The Israel Deception

Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Friday, December 23, 2016

Indicators for gold the best in 16 years as oversold markets show disconnect between bid and price

Well known and respected precious metals analyst Dave Kranzler published some new research derived from the recent and near unprecedented drop in the gold price for the past seven straight weeks.  And in his determination, gold indicators are flashing the best environment for a strong move upward in perhaps the past 16 years.

In addition to the factors outlined from Kranzler's work, when you look at the imploding currency and debt issues throughout the world that are even affecting China right now, along with the crashing of bonds in the U.S., evidence points to the world very soon rushing into gold as the only real safe haven left to protect one's wealth.

Dave Kranzler: I was looking at a lot of data as I was writing up this latest issue of the mining stock journal, and there are several indicators screaming buy about as loudly as I've ever seen a buy signal in the 15 years I've been doing this market. 
These indicators are both technical indicators and some are contrarian indicators.  For instance, I was chatting with Eric King the other day and I said to him just looking at the intra-day action, whenever they try to take silver below $16, and gold below $1130 it bounces back, and that's been the case now for at least a week.  And he said that if gold closes down this week, it will be the first time that he can recall ever that it's closed down seven weeks in a row on a weekly basis.
In the video below Kranzler lays out many of the indicators he has discovered that point towards a vastly oversold market, as well as a growing disconnect between the paper and physical markets.  And despite the continuous beat down in the gold price during the past seven weeks since the Presidential election, the one factor that hasn't changed is that demand for physical gold has increased during this time, and the current price does not reflect this supply and demand factor.

Thursday, December 22, 2016

Year end stock market boom may be tied to Trump planning to lower capital gains rate next year

Leading up to the Nov. 8 Presidential elections, most Wall Street analysts had forecasted dire consequences for the stock markets and economy should Donald Trump win the White House.  But within six hours of the media declaring him the winner, stocks surged in a historic move which one and a half months later, is now standing on the cusp of hitting Dow 20,000.

Yet what is most interesting in the way the markets have gone up nearly parabolic since the election is how little selling there has been, and this despite Janet Yellen raising interest rates and the cost of borrowing last week.  And one thought on this is that traders and investors are holding onto their gains from this rally until early next year because of the potential that Trump will get passed a new tax cut program in 2017 will have huge effects on their capital gains if and when they sell next year rather than taking profits before Dec. 31.

Image result for santa claus rally
Many investors are waiting to take any profits on the Donald Trump rally on the notion that if they wait to sell until January, they will benefit from a capital gains tax cut by the new president on their 2017 returns. 
It's a theory cited by Dan Clifton of Strategas Research Partners in a note to clients Tuesday. Many strategists, including those at Strategas, believe it's the one reason why this rally is showing no signs of slowing down into year end. 
Clifton has a great piece of advice for those waiting to sell in 2017: 
"In 2003, when Congress cut the capital gains tax, the provision was made retroactive to the first committee hearing in March. So be careful just selling on January 1st, depending on when Congress acts, the provision may not be in effect at the exact start of 2017." - CNBC
Many pension and hedge funds often spend a great deal of cash buying into stocks right at the end of the year, leading to the illusion of a 'Santa Claus' rally the media loves to tout.  However, this is mostly done to 'fill out' their books for their clients since they will have be more into stocks than cash when year end reports are sent out to their investors.

Last year the stock markets rose into the end of 2015, and this despite the Fed raising interest rates for the first time in nine years.  But once January 2 rolled around, the markets sold off for the next 17 trading days.

So if recent history is any indication, don't get too excited about this year's rally because there is a high probability that investors and traders are simply waiting until early in 2017 to take their profits on the hope that Donald Trump's expected tax cuts will come to fruition.

Wednesday, December 21, 2016

Global financial markets already creating new gold products for Islam's Sharia finance edict

It was only a couple weeks ago when the Auditing Organization for Islamic Financial Institutions (AAOIFI) began implementation of new edicts regarding gold ownership under Sharia financial law for the world's 1.6 billion Muslims.  And in this short amount of time several markets around the globe are already creating new gold based products to help bring in Islamic investors.

New standards for the use of precious metals in Islamic finance are encouraging the development of financial products based on gold and silver, from futures contracts to a mobile app. 
Toronto-based Bullion Management Group (BMG), which manages $348 million in assets, launched a silver fund in October and expects its bullion funds will adhere to the new AAOIFI guidance, Nick Barisheff, BMG's founder and chief executive, said. 
On Monday, the Singapore Exchange (SGX) said it had certified as sharia-compliant its gold futures contracts, which were originally launched in 2014 and are aimed at the wholesale market. 
Meanwhile, Malaysia-based HelloGold has launched a sharia-compliant online platform using a mobile app, targeting customers through agreements with technology and financial services firms, chief executive Robin Lee said. 
"We expect to sell about 10,000 ounces of sharia-compliant gold by the end of next year," Lee said. He also said that the firm planned to enter Indonesia, the Philippines and Thailand next year and China by 2019. - Reuters

Tuesday, December 20, 2016

Growing spreads between London and Shanghai means that very soon China will take control over gold pricing

Two weeks ago, Deutsche Bank publicly admitted that they and several other banks have been manipulating the price of both gold and silver for several years now.  And yet despite these admissions, both London and the Comex have been smashing down the price of each to the point now where the markets can no longer even facilitate a break even cost for companies producing the metals.

“The analysis of FCF breakeven price suggests that 50% of the gold miners generate free cash flow below $1,150/oz gold with an average FCF breakeven gold price of US$1,135/oz for 2016E,” BMO said. “Excluding dividends, the FCF breakeven gold price for the miners declines to $1,070/oz in 2016E. 
Silver miners may be “less prepared,” however, after enduring a deeper correction in the price of silver relative to gold, BMO said. Three out of 11 companies report FCF breakeven costs for 2016 that are estimated below $15 an ounce, BMO said. - Kitco
As of Dec. 20, the current spot price for gold in London was $11.25, which according to the above study means that the manipulated 'fix' price at the Comex is now $10 below the average cost necessary for 50% of the miners just to break even.

However, as noted in an article published over the weekend here, spot prices out of Shanghai are at least $50 more than what is set in either London or New York, and premiums for metals are even higher than this when purchased in large quantities by investors, stackers, or speculators.

This dislocation in prices between Eastern and Western markets is now creating a nexus point where according to long-time bullion analyst Jim Sinclair, as well as by the CEO of Matterhorn Capital out of Switzerland, China is growing ever closer to being the primary market for determining gold and silver prices, and leaving London and New York with little metal to back their paper contracts.
For those distraught over the COMEX paper futures price of gold plunging towards $1,000/oz, Switzerland’s Egon von Greyerz has some information for you: 
I am not upset because I know one day, COMEX will default. The futures market will default. The banks will not be able to deliver the paper gold they have issued. One day people will come in and try to get their gold, and there won’t be any gold when they ask for it. How can you be nervous (holding gold)? The truth will eventually come out, and that truth will be very painful for all the paper holders of gold.” - Greg Hunter via Silver Doctors

Sunday, December 18, 2016

Venezuela's Maduro halts cash ban as desperate people left with no choice but to give up their children

On Dec. 18, Venezuela President Nicolas Maduro halted his policy from earlier in the week of banning the 100 bolivar currency as the economic situation in the country became even more desperate.  And in addition to the growing starvation, riots, and looting that has emerged from the nation's mass inflation, some Venezuelans are having to give away their children as they can no longer afford to feed them amid the economic chaos.


Struggling to feed herself and her seven children, Venezuelan mother Zulay Pulgar asked a neighbor in October to take over care of her six-year-old daughter, a victim of a pummeling economic crisis. 
The family lives on Pulgar's father's pension, worth $6 a month at the black market rate, in a country where prices for many basic goods are surpassing those in the United States.
"It's better that she has another family than go into prostitution, drugs or die of hunger," the 43-year-old unemployed mother said, sitting outside her dilapidated home with her five-year-old son, father and unemployed husband. 
With average wages less than the equivalent of $50 a month at black market rates, three local councils and four national welfare groups all confirmed an increase in parents handing children over to the state, charities or friends and family. 
The government does not release data on the number of parents giving away their children and welfare groups struggle to compile statistics given the ad hoc manner in which parents give away children and local councils collate figures. 
Still, the trend highlights Venezuela's fraying social fabric and the heavy toll that a deep recession and soaring inflation are taking on the country with the world's largest oil reserves. - Reuters


Sadly, the people's trust in their socialist government, along with in their fiat currency, is partially to blame why few Venezuelan's were prepared for the quick, and in some cases deadly, effects that escalating high inflation has caused for their nation and economy.  And because of the growing loss of confidence in the Bolivar, as well as in access to hard currencies such as the dollar, stories have broken out of those who owned a little gold and silver being able to not only survive this ongoing economic collapse, but actually thrive in it.
Tom Cloud: We got an incredible email this morning from one of our clients who's brother in law is a missionary down in Venezuela.  And he was telling us that in Venezuela, once ounce of silver will buy you food for three or four months... one ounce of silver.  And an ounce of gold will buy you a house. - The Daily Economist
While many Americans believe that what is taking place right now in Venezuela, India, and in Greece over the past six years could ever come to America, then all one needs to do is look back 80 years ago in our history to see what the Great Depression did for a large portion of our citizens following a financial crash that involved stock markets, debt, derivatives, the collapse of a housing bubble, and the overall banking system.
From one perspective, the story emerging from the Great Depression can be described as one of family "disorganization" and deprivation. Marriage rates declined, although they started to rise in 1934, and the trend toward decreasing birthrates, already underway, accelerated during the 1930s. Although divorce rates also declined, this seems to have been largely the consequence of the inability to pay lawyers' fees; desertion rates increased during the decade. In some cases, two or more families crowded together in apartments or homes designed as single-family residences. Some 250,000 youths were on the road, travelling by freight train or hitchhiking in order to find work or more favorable circumstances. From 1929 to 1931, the number of children entering custodial institutions increased by 50 percent. In many economically deprived families, children suffered from malnutrition and inadequate clothing. - IC.Galegroup

Saturday, December 17, 2016

India's war on cash and gold through capital controls not as simple is it seems for the future of their economy

Many in the alternative media, including this author, have seen the outrage engendered by the Indian people over Prime Minister Modi's intrusive measures of capital controls where he has virtually declared war on both cash and gold.  And without a doubt, the attempts by Modi to wean the people off their long-standing traditions of a purely cash economy were done with little planning or thought of the consequences they would trigger.

But when you look below the surface you will find that this policy, albeit through a slower and more methodical way, may actually be necessary if not vital to the future of India as it attempts to grow its economy into an international power.

Since 98% of India's commerce is currently done using only cash, it is virtually impossible to determine the true amount of capital that would be available for the country to expand in both growth and investment since the majority of the nation's wealth resides outside their financial system.  And this has been one of the reasons why India has acted primarily as the world's labor pool rather than as a true economic power.

Yet despite their large GDP which ranks them number seven in the world, they still remain behind economies such as China, the EU, the U.S., Hong Kong, and even Russia in growth potential.

Make in India

Earlier this year Prime Minister Modi created a program to try to entice business creation and expansion into India, using their relatively well educated and vast labor pool as the sweetner.  And this move was to try to end a long-standing trend where most of the best and brightest inevitably left India for better opportunities in Europe, Asia, and the U.S..

However, Modi's Make in India program has accomplished only minimal results at best, and in part this has been due to their antiquated financial system, and the fact that most workers expect to be paid in cash rather than through a formal banking mechanism.

Image result for make in india
The Indian economy is at a critical inflection point in its modern history. India’s GDP growth has accelerated to become the fastest of all major economies in the world, with income levels today at China’s c.10 years ago, it is expected that India is now the next big story. Given its favorable demographics and other resources, India has the inherent drivers to sustain 7-8% growth over the medium to long term and the potential to achieve 10%. 
An India that can sustainably harness its core assets and create new ones has the potential to emerge as one of the key drivers of growth and stability in a world faced with increasing global economic and geopolitical uncertainty. In order to attain this position, however, India will need to do what China has historically excelled at, creating significant population-wide savings and channeling these into (reasonably) efficient assets to deliver competitive returns. Doing this requires a robust financial machine ready to finance the nation’s growth. 
Despite the significant growth and evolution of its financial services industry, India’s financial sector continues to be hamstrung by major structural inefficiencies, including an old fashioned state-dominated banking system and, despite increasingly aggressive changes, a lack of financial inclusion for large parts of the population. It is a sector in need of a new vision as the basis of a restructuring so it can play its part in India’s new growth story. 
Recent years have seen a concerted effort by both the Reserve Bank of India (RBI) and the Modi-led government to rapidly grow financial inclusion and bring more and more of India’s poor into the formal banking system. The country’s technology sector has also made a significant contribution by developing delivery systems that reduce transaction costs and spread access by leveraging growing smartphone penetration. 
However, as various factors including the large pile-up of stressed assets in the banking system, the sharp slowdown in industrial credit growth and other measures of inefficiency of the financial system indicate, India still faces significant challenges in creating an effective financial system if it is to stride more aggressively towards its potential. 
While addressing these challenges will undoubtedly be a painful process and require the expenditure of political capital, the prize is significant: potential incremental growth of 2-3% p.a. would set India’s growth on the path to achieve the double digit levels necessary to replicate China’s economic miracle. - Great Pacific Capital
India is hamstrung by the fact that they are a nation steeped deeply in tradition, and it takes decades if not centuries for serious changes to occur.  And this is why Modi's recent move to ban certain denominations of the Rupee in a very short amount of time has resulted in the population rebelling against the policy, and entrenching their distrust in banks to even greater levels.

It is a difficult act to change the confidence of a people in an institution when their natural reaction is to go on the defensive, especially when that policy is instigated from a government that has a history of corruption.  Yet if India is ever going to move ahead and reach their full potential in the global economic system, then both the people and the government will have to find some way to compromise, otherwise India will remain simply a labor pool for the world's other economic powers, and continue to be considered only a second world economy which helps grow the overall wealth of everyone else.

Friday, December 16, 2016

Turkey's stabilization of the Lira came by dumping dollars and having their citizens rush into gold

Earlier today a new report out showed that China continued dumping dollars in November at the rate of $30 billion, taking their 12 month totals to $404 billion.  At the same time, demand for gold has skyrocketed in China where premiums on the metal are ranging between $50 - $800 per ounce.

And now we are discovering that Turkey's recent call for their citizens to get rid of their dollars and either buy gold or Lira has resulted in a slowdown in the devaluation of their currency, and a stabilization of the Lira over a short period of time.

Asked by their President Recep Tayyip Erdogan to shun the dollar, Turks are favoring gold over liras. 
On the face of it, the appeal to defend the Turkish currency worked. It arrested the biggest three-week surge in foreign-currency deposits since August as Turks drew down a net $450 million from these accounts in the week ended Dec. 9. But residents also boosted their precious metal holdings, traditionally denominated in dollars, by $700 million, a hint that confidence in their currency remains tenuous, according to Nomura Inc. - Bloomberg Markets
Gold demand around the world has been red hot over the past month as confidence in nearly all currencies falls to decades long lows.  And contrary to the dollar's recent moves over 103 on the dollar index, much of this has been due to nations like China, Turkey, Belgium and others dumping Treasuries and their dollars reserves.

As governments look towards creating policies to try to ban cash as a way to protect their dying monetary systems, more and more people are realizing that the current fiat money system that has been prevalent around the world since the 1970's is collapsing around them.  And those that are agile enough to move out of their devaluing currencies and into a sounder form of money such as gold before the supply becomes completely unaffordable, are the ones who will, just like what is slowly taking place in Turkey, be prepared during this emerging currency and banking crisis where even the dollar is no longer safe.

Thursday, December 15, 2016

Following the Fed rate hike and spike in the dollar, the gold price spread between London and China soars to $50

Gold prices were once again beaten down in the United States following the Federal Reserves decision on Dec. 14 to raise rates by .25 bps in only the second move by the central bank in the last decade.  And while gold was sold off on Wednesday as well as early Thursday morning in New York, markets in Shanghai have not followed the same path as those in London and the Comex.

In fact with the London AM Fix coming out just a few hours ago, the price spread between the physical and paper markets have now spiked to a record $50 difference.

Shanghai Price Fix


London Price Fix


As mentioned earlier this week in another article, the divergence in official prices are also being expanded by record amounts of premiums placed upon gold by the market makers in China.  In fact, according to analyst and statistician Dr. Jim Willie, the premiums necessary to purchase large quantities of gold have forced prices right now to exceed $2000 per ounce in the physical markets.

As the dollar continues to strengthen the price of gold in nearly all other currencies and markets will continue to rise, and in some cases break through record levels.  And what we are seeing right now in the price of gold out of both London and the Comex is not indicative of the record demand being created all across the world which is the primary basis between the spreads in price we are seeing between the London fix and the one coming out of Shanghai.

Wednesday, December 14, 2016

At the normal historic 10:1 ratio, gold should be at over $9000 and silver over $1000 to backstop current debt and money supply

As of Nov. 30, the U.S. Department of the Treasury claims in their monthly report that they have a total of 261,498, 926 ounces of gold contained in bullion, coins, blanks, and miscellaneous products.


In addition, the national debt for the United States is approximately $19.8 trillion as of Dec. 1, with $1.48 trillion of that being physical currency in circulation.

Yet the power of the U.S. dollar being the recognized global reserve currency is based upon its being backed by gold, as determined back in the 1940's during the Bretton Woods conference.  And despite the fact that the U.S. Treasury closed the ability for other nations to exchange dollars for gold when former President Richard Nixon closed the 'gold window', it did not stop the caveat that the dollar must be tied to gold in some capacity.

Ie... this is why the Federal Reserve holds reserves in gold even today despite the deception that Fed Chairmen such as Ben Bernanke gave to Congress and the American people that gold is no longer money.

So with this in mind, what should the real price of gold in dollars be today to backstop the current debt and monetary expansion that exists in the global economy?  And just as important, what should the price of silver be if allowed to reside at its historic 10:1 ratio to gold when the manipulation of the metals finally ceases.

For the reported amount of gold the U.S. is believed to hold, the current dollar price to backstop $19.8 trillion in debt would set the price at $75,717.  However, as most of the debt held domestically and offshore is in Treasury Bonds rather than physical cash, let's break it down instead to what the value of gold should be for the amount of actual currency in circulation.

$1.48 trillion / 261,498,926 = $5659 per ounce.

Yet these number are also limited as they reflect simply the bare amount of currency in circulation, but not representing all money used in financial transactions (electronic banking).  So for that we need to look at an approximate number, which is calculated to a relative degree of accuracy by the Debt Clock website, which estimates the current monetary base as being over $3.6 trillion.

$3.61 trillion / 261,498,926 = $13,820 per ounce.

Over time the expansion of the dollar monetary base has become extremely convoluted since its recognition as the global reserve currency.  And this is due to the fact that not only are dollar denominations used as currency, but also bonds and derivatives are considered by many to be as good as money.  So with that in mind we could probably safely put the true price of gold to be somewhere in between the reported amount of dollars in circulation, and the estimated total amount of dollars used between cash and fractional electronic banking.

screen-shot-2016-12-12-at-2-19-49-pm

The invisible hand of the markets will always eventually push asset prices back to their true value, as manipulations can only be done for a finite period of time before they cause distortions elsewhere that lead to financial calamities... as we are seeing right now in the monetary distortions occurring in both India and Venezuela.

So how long can the government suppress gold and silver prices to protect their dollar expansion, and keep the true price from breaking through in the markets?  No one really has an answer to this but historically, no fiat currency system has ever survived to 50 years of use, and we are now within the final five years of that mean.

Tuesday, December 13, 2016

Gold spread between London and Shanghai now $36 as premiums in India and China reach 50% over price

The gold price spread between the London paper markets and the Shanghai physical markets continues to climb as the divergence between China's PM fix and London's AM fix reached $36 on Dec. 13.

Shanghai Gold Fix

London Gold Fix

Yet these prices are not truly indicative of what is really going on in the physical markets since the bullion banks crushed down the spot price following the election of Donald Trump back on Nov. 8.  This is because geo-political and economic events in both India and China have caused demand to surge immensely over the past month, and dealers and jewelers in both countries are incorporating premiums sometimes as high as 50% over the designated price.

Last week saw news of reported gold import curbs in China (and looming capital controls) has sent gold premiums in China near three-year highs amid limited supply of the precious metal (as Reuters reports)... 
The import curbs may be part of China's efforts to limit outflows of the yuan after the currency's slide to its weakest in more than eight years, traders say. China allows only 15 banks to import gold, including three foreign lenders. 
"There is severe restriction on the banks' quota to import gold into China. Each one of them have to justify their need," a Hong Kong-based banker said. 
Gold was sold in China at about $24 an ounce above the international spot benchmark this week. Premiums went as high as $30 last week, the most since January 2014, according to Thomson Reuters data. - Zerohedge
Over in India the shortages and demand are much more extreme, with premiums skyrocketing as government officials threaten consumers and dealers with cuts to imports, and even outright confiscation.
In November the country's gold imports jumped to around 100 tonnes, the highest in 11 months. 
Jewellers and bullion dealers are deferring purchases and gold imports in December could fall to 30 tonnes, down from 107 tones in the same month a year ago, said a Mumbai-based dealer. 
It is estimated that one-third of India's annual demand of around 800 tonnes is paid for in "black money" - the local term for untaxed funds held in cash by citizens that do not appear in any official accounts. 
And this has sparked a surge in physical demand (amid limited supply concerns)... (as Reuters reports) 
There have also been reports of people rushing to buy gold by paying as much as a 50 percent premium above official prices using their unaccounted money to skirt the note ban.