The precious metals sector sharply reversed course after the Federal Reserve hinted that it may raise rates at its next meeting. This about face from the Fed was enough to effectively end the fledgling rally that began in the summer and threatened to take metals and miners higher to their 400-day moving averages. The prevailing thought was the Fed was on hold for a while and this paved the way for more strength in the precious metals complex. Thoughts be damned! The Fed has whipsawed gold bugs (and me) again. Full Story
My first public market call in the metals complex was made back in 2011, at which time I was looking for a top in the gold market at $1,915. While it came quite close to the actual top struck in the market ($1,921), many thought me to be less than credible in publishing such an article when the rest of the market was so certain that we would exceed $2,000 imminently. Full Story
As we begin another Spec rinse cycle on The Comex, we thought it best to remind everyone once again of the fraudulent nature of the short selling that takes place there. The central component of any futures market is the physical asset that backs the exchange. Though we can't be certain of exactly how much gold is in the Comex vaults (recall the disclaimer added in June of 2013: http://truthingold.blogspot.com/2013/06/the-comex-confirms-that-its-gold-and.html), we can be certain that it is nowhere near the amount needed to settle the thousands of paper claims written against it. Full Story
By: Adam Hamilton, Zeal Intelligence - 30 October, 2015
With the Federal Reserve’s first rate-hike cycle in nearly a decade looming, traders are working overtime trying to divine its timing and impact on the markets. They are closely monitoring the same employment and inflation data the Fed will use to start tightening. But there’s another little-discussed concern for the Fed, the solvency of the US government. The Fed’s zero-interest-rate policy has spawned a grave US debt bomb. Full Story
Another strong week for gold demand at the Shanghai Gold Exchange – China’s main physical gold bourse. From 19 until 23 October 57 tonnes have been withdrawn from the vaults of the Shanghai Gold Exchange (SGE), according to data released on Friday by the SGE. Year to date 2,119 tonnes have been withdrawn. With a little over two months left in 2015 SGE withdrawals, which capture the amount of Chinese wholesale gold demand, are set to reach more than 2,500 tonnes in 2015, breaking the record of 2013 at 2,197 tonnes. Full Story
One of America’s largest companies is taking a controversial stance on employee benefits. In a move that is sure to draw criticism from the mainstream press, Jonathan Johnson, chairman of online retail giant Overstock.com (OSTK), publicly stated that the company has stockpiled gold and food in preparation of a U.S. financial crisis. Full Story
If it wasn’t already clear, the junior companies that explore, develop, and mine the world’s metals are struggling. PwC recently recapped the malaise of these companies in its latest Junior Mine 2015 report, along with highlighting some success stories of those that have been able to bypass the onslaught. Full Story
PEOPLE! If the Fed were to raise rates from here, our already declining economy will be flushed! A strong dollar has already put more than a pinch on our exports ...but the real killer will be the financial system itself. Derivatives will blow up all around the world with a dollar rate hike, this will make the real economy a moot point as the banks will close their doors. In case anyone forgot, it was as recent as Monday we were hearing trial balloons from Fed mouthpieces regarding NEGATIVE INTEREST RATES!!! Full Story
In previous commentaries; readers have read firm conclusions that the U.S. government (via the Federal Reserve) has already hyperinflated its currency – past tense. Yet what do we actually see as we look around us? We see this obviously/blatantly worthless currency with its exchange rate versus other currencies propped-up at a particularly absurd extreme. Where is the “hyperinflation”? Full Story
Back when I was in business school, the PC manufacturers were go-go football stocks. Bull market, dude. There was Dell, Hewlett-Packard, Compaq, and Gateway, which used to sell its computers in a Holstein cow-pattern box. Apple was making Macs but had a much smaller market share than it does today. Business mags like Fortune and Forbes fawned over Michael Dell—how he had achieved this “mass customization” ideal in his manufacturing process. Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 29 October, 2015
There's a great story here, the financial news story of the modern age, about the subversion of markets, the producing class, and democracy by the unelected elite of the financial class, central banks. Too bad that the first rule of mainstream financial journalism is never to put a critical question to a central bank, and especially not a critical question about gold. Full Story
What did the Fed do yesterday? Why, they rolled over once again and held ZIRP. They also got mighty specific with some wording that freaked out precious metals players and put in a reversal, not only in the metals, but importantly, in their ratio. See yesterday’s post on the Silver-Gold ratio’s status… What Thing Looks Like the Other. A reversal in silver vs. gold would put the sector on a correction and also issue a warning to other global markets. Full Story
With comparatively little fanfare, Fidelity Investments has announced that 100% of their $115 billion Cash Reserves fund, the world's largest money fund, will be invested in US government debt by December 1st of 2015. It is expected that many other money fund companies will also change their policies and invest only in US government and agency securities, because of a change in regulations that will occur in 2016. Full Story
For six years, the world has operated under a complete delusion that Central Banks somehow fixed the 2008 Crisis. All of the arguments claiming this defied common sense. A 5th grader would tell you that you cannot solve a debt problem by issuing more debt. If the below chart was a problem BEFORE 2008… there is no way that things are better now. After all, we’ve just added another $10 trillion in debt to the US system. Full Story
Last week Paul Krugman wrote a column for the New York Times in which he called Republican Paul Ryan, a “con man.” The Republican chairman of the House Ways and Means Committee’s sins, Krugman, a Nobel prize winning economist and a professor at City University of New York, argues, stem from a lack of detail in his budget plans, regarding proposed spending cuts and closed tax loopholes. Full Story
Uranium Resources (URRE) is set to enter a new era now that a deal to merge with Anatolia Energy Ltd. has been overwhelmingly approved by both shareholder bases. The merger will give Uranium Resources control over the advanced-stage, low-cost Temrezli uranium project in Turkey and put the revamped company on a fast track to production. Full Story
Examine the graph of average monthly gold prices Jan. 1970 – Sept. 1976. Compare it to the graph of gold prices from April 2002 – October 2015. Note that the second graph was prepared with the same number of data points, but the time scale was doubled – each point is a two month average price. Note the similarity in form. The first is scaled $0 to $200 and the second $0 to $2,000. Full Story
Chris welcomes back Bill Murphy from GATA.org who is in New Orleans with Chris Powell at an Investment Conference, amid a stealth precious metals rally. Our guest is convinced that the a big opportunity for oversized profits exists in the silver coin market, due to supply constraints. Full Story
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By: Chris Powell, Secretary/Treasurer, GATA - 29 October, 2015
The first is the 2013 10-k filing with the U.S. Securities and Exchange Commission by CME Group, operator of the major futures exchanges in the United States. In August 2014 Eric Scott Hunsader, founder of the market data firm Nanex in Winnetka, Illinois, called attention to a telling paragraph in the filing. The telling paragraph discloses that the customers of CME Group include "governments and central banks." Full Story
It finally looks like a major inflection point is getting very close to resolving itself in many different areas of the markets. The US dollar is the key driver of this inflection point which is starting to breakout from a nearly eight month bullish falling wedge consolidation pattern. This afternoon the US dollar began a strong rally that is somewhat unusual during the afternoon hours unless it is Fed Day where anything goes . The daily chart below now shows today’s bar clearly above the top rail of the bullish falling wedge. It’s still possible that we could see a backtest to the top rail at 97.12 before the next impulse move up begins in earnest. Full Story
By: John Mauldin and Joan McCullough - 29 October, 2015
I came across this quote while reading today’s Outside the Box, which comes from my friend Joan McCullough. She didn’t actually cite it but mentioned Bootle in passing, and I googled him, which took me down an alley full of interesting ideas. I had heard of him, of course, but not really read him, which I think may be a mistake I should correct. Full Story
WOW! I know no other way of saying it than to say that the Fed took everyone by surprise. I certainly did not expect this Fed, this timid FOMC, to sound such a hawkish note. As dovish as Draghi and the ECB sounded last week, the Fed sounded hawkish this week. Talk about a sea change in attitude! Full Story
Many individuals and experts state that market timing is impossible. The answer to this question is yes and no. We all know there are seasons in a year and we know roughly when winter, summer, fall, and spring will begin. No one can predict the exact time the one season will transition into the next. The same rationale applies to market timing. If you are trying to predict the exact market turning points, then you might get it right once or twice, but overall your record will be dismal, it is an exercise in futility for the most part and best reserved for those who seem to have a deep desire to take on large losses. Full Story
In this paper, we introduce a model for understanding the short- and medium-term price movements between gold and currency. Solving for gold in US Dollars, we find that the majority of price movements can be explained by just a few key drivers: real interest rate expectations, central bank policy and changes in long-term energy prices. We offer the reader our insights as to why these drivers matter, and why other drivers like "fear and sentiment" are less significant than commonly attributed. Full Story
By: Richard (Rick) Mills, Ahead of the herd - 28 October, 2015
The world’s urban population is expected to nearly double in the next 30 years. Globally infrastructure is in need of major rebuilds measured in the trillions of dollars worth of capital investment. Consider electrification of the global transportation system, the growing move to solar and wind, that’s millions of tonnes of additional copper use. Throw in aging mines, resource nationalism and exploration cutbacks. Full Story
I am amazed at how investors have such short memories. Yet, it probably explains why the the public makes the same mistakes over and over when it comes to investing. When QE3 was announced in 2012, everyone cried in unison “gold is going to the moon.” However, we, cried “short it like there is no tomorrow.” And, now, as silver has lost as much as 75% of its value, we clearly understand that QE did not have the effect the market believed it would have on metals. Full Story
Gold is rare, beautiful and has superior metallic characteristics to other metals. Furthermore, gold is durable, portable, divisible, fungible and possesses intrinsic value. This has led to gold being used as money throughout most of recorded human history. One of the strongest historical value propositions of gold as money is that gold naturally emerged as money in different civilizations and continents worldwide, without the civilizations being aware of each other. Full Story
For years, a rather pointless argument has been ongoing amongst economists - that of inflation vs. deflation. The principle countries of the world have amassed a greater level of debt than the world has ever seen and, of course this can only end badly. But will it end in inflation or deflation? To me, this discussion is akin to arguing whether the sun will rise in the morning or set in the evening. Full Story
Casey Research founder Doug Casey answered dozens of investment questions during the recent Casey Research Summit. We transcribed five of Doug’s best answers, and we’re sharing them with you below. What you’re about to read is Doug speaking to a live audience. His responses are unrehearsed. Full Story
We are listing excerpts from past market updates to illustrate how the mass mindset is always wrong. Even big shots like Bill Gross are not exempt from being sucked into this black hole, otherwise known as the mass mindset. Herd psychology clearly indicates that the only time a market is going to crash is when emotions have hit a boiling point. In other words, the crowd is foaming with joy. However, regarding bonds, there is one more factor that needs to be considered. The element of control and that element has a name; it is called the Fed. Full Story
Looking at the debt ceiling first, we are yet again living the lunacy where the U.S. tells its people and the rest of the world "see, we are not broke"! In a sense this is true because when all is said and done, the U.S. can incur any amount of debt required or desired because dollar bills (FRN's) can be printed or issued to pay for the debt and its service. From a practical point however, this is not true. Should the ceiling be raised to $19.6 trillion and promptly funded to that amount, we will be poking our heads over the 110% debt to GDP level. Full Story
Gold is the world’s ultimate asset. So, even when nothing important is occurring in the market, investors can experience “ultimate greed” or “ultimate fear”. Because the quality of the asset is so high, it’s crucial that investors are emotionally able to buy gold when uncertainty or even outright fear is present. Full Story
As I write this article, at about 11:30AM NY time, on 27 October 2015, the probability of another banker raid in the paper gold and silver derivatives markets increases and remains elevated. Yet, every time bankers raid paper prices, if indeed this happens again sometime over the next few trading days, their raids on the fiat currency prices of gold and silver always trigger a lot of frustration on behalf of physical gold and physical silver owners due to an improper equating of fiat currency price with real value and improper equating of “perceived” value with “real” value. Full Story
For everyone's sake, since ole Turd is "wrong 99% of the time", hopefully we'll be wrong again about what's likely coming later this week. If, however, this is one of those 1% deals, you should be sure to prepare yourself now while everything is nice and quiet. Again, the primary issue is the degree to which The Cartel Banks have gone to cap and stall this latest rally. Full Story
By: Steve Saville, The Speculative Investor - 27 October, 2015
In my two “Gold Is Not Money” posts (HERE and HERE) I explained why it is not correct to think of gold as money these days, and in a subsequent post I explained why it was not correct to view gold as an economic constant (there is no such thing as an “economic constant”). It is clearly also not correct to think of gold as “just a commodity”, because if it were just a commodity then its price would have collapsed relative to the prices of other commodities due to the massive size of its aboveground supply relative to its annual usage in commercial/industrial applications. Full Story
Last Thursday I had the pleasure of attending an intensive daylong ETF conference in Austin, just up the road from our office in San Antonio. Hosted by Cantor Fitzgerald, the conference was designed for institutional investors. Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 27 October, 2015
The German freelance financial journalist Lars Schall has done again what no mainstream financial journalist in the world dares to do: put critical questions about gold to a central bank. This time Schall has directed his questions to Peter Mooslechner, executive director of the central bank of Austria, who a week ago let slip in an interview with Daniela Cambone of Kitco News that central banks are using their gold reserves for secret intervention in the gold and currency markets. Full Story
I am starting to see a lot of anger being directed toward gold analysts. While most of them stayed bullish for this entire decline for the last 4 years, I cannot say I am surprised. But, remember, it is simply human nature and part of the genetic design of human beings to be caught up with the rest of the herd. Full Story
Gold and silver spot prices lost ground to a strengthening U.S. dollar last week. The dollar enjoyed its best week in 5 months, as other major world currencies weakened. European central bankers are once again hinting at more stimulus, and the Chinese government cut interest rates for the 6th time in the past year. Full Story
The usual suspects in the gold bug and perma-bull camps got their panties all wet last week when the yellow metal briefly set a four-month high of $1184 per ounce. Of course when the price backed off a bit, the conspiracy theorists immediately played their trump card, a bastardized version of the EMH (acronym for the widely recognized “efficient market hypothesis”). This gang’s “eternal manipulation hyperbole” is routinely called upon to rationalize a depressed gold price, negate the metals’ inability to punch thru market resistance, or counter solid technical analysis. Full Story
So you think the economy is going into recession, or is already there. For growing numbers this is true if you are not part of the subsidized and / or financialized economies. Certainly the useless parasites on the Beltway are not feeling it. But the hard working and honest people in the real economy are getting decimated by these assholes – not that it matters – or at least it hasn’t mattered to the stock market up to this point. Full Story
Gold got a boost this week as China announced further interest rate cuts and the ECB re-emphasized its pledge to use all the monetary tools at its disposal to support global growth. Furthermore, Russia boosted its gold purchases by the largest amount in a year throughout the month of September, adding 34 tonnes. Full Story
Retirement is every worker’s dream, even if your dream would have you keep doing the work you love. You still want the financial freedom that lets you work for love instead of money. This is a relatively new dream. The notion of spending the last years of your life in relative relaxation came about only in the last century or two. Before then, the overwhelming number of people had little choice but to work as long as they physically could. Then they died, usually in short order. That’s still how it is in many places in the world. Full Story
More and more institutions are trying to make it harder for you to move your money into cash. Globally, over $5 trillion in debt currently have negative yields in nominal terms, meaning the bond literally has a negative yield when it trades. In the simplest of terms this means that investors are PAYING to own these bonds. Full Story
Markets were tricky this week until we saw strength emerge Thursday on the back of a few large leading companies reporting good numbers and soaring to new heights. We were seeing weaker numbers from many companies and poor action after earnings which kept markets from moving higher and I was worried that we may not see a rally as we usually do this time of year. Full Story
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