By: Adam Hamilton, Zeal Intelligence - 3 July, 2015
The US Federal Reserve has been universally lauded for the apparent success of its extreme monetary policy of recent years. With key world stock markets near record highs, traders universally love the Fed’s zero-interest-rate and quantitative-easing campaigns. But this celebration is terribly premature. The full impact of these wildly-unprecedented policies won’t become apparent until they are fully normalized. Full Story
The news this week was dominated by Greece, which should have led to European demand for gold, and it was indeed reported that Greeks were buyers of British sovereigns and that European bullion demand picked up somewhat from low levels. Precious metals were otherwise side-lined and left to drift in markets dominated by central bank intervention in foreign exchanges, with the Swiss National Bank triggering a very strong rally in the euro on Monday, driving the rate from an overnight low below 1.1000 to the US dollar to 1.1270. Full Story
George Magnus is one of the most influential economists in the world today. From his position as chief economist at UBS for a number of years, he enjoyed a front-row seat to growth miracles, credit booms, and financial crises in major economies around the world and is widely credited with identifying the trigger points that eventually led to the global financial crisis in 2008. Full Story
I was watching the 6 o’clock news and saw images of closed banks in Greece and people lined up at ATMs. I’m sure you did, too. This must seem surreal to most people because it seems so remote. But put yourself in these people’s shoes for a second. You have money in the bank. Suddenly you can’t get to it. After standing in long lines, you can only get 60 euros at a time, which isn’t going to last you very long. Full Story
This is a short story. It has a purpose. Bear with me. A long time ago and far, far away there was a village that was occasionally raided by outlaws who took food, jewels, and women. The villagers were understandably angry but could do little to protect themselves. Full Story
The Fundamental Problem has been caused mainly by The Private, For-Profit Fed and other Mega-Central Banks themselves. They have kept Rates artificially so low and thus (with the help of QE) Equities etc. artificially High that the World is awash both in Excess Debt and in Bubbles. And now the Debts can not be repaid (and the Bubbles will Burst) and Greece is only the First of many Casualties to come. Consider Puerto Rico, Portugal, Spain, Italy… and Chicago!! Full Story
Most people understand that it’s foolish to keep all their eggs in one basket. Yet they fail to go far enough in applying the principle. Diversification isn’t just about investing in multiple stocks or in multiple asset classes. Real diversification - the kind that keeps you safe - means holding assets in multiple countries, so that you’re not overexposed to the economic and political risks that are present in every country. Full Story
We are witnessing the end-game phase of this operation. For the record, “middle class” is defined as anyone who does not have enough cash laying around to buy their own Congressman, Senator or the Oval Office. This means anyone reading this who has a few million in the stock market, bonds and a house or two will soon be stripped of that unless they convert that “wealth” into real money. Full Story
The Fuse on the Global Debt Bomb has been lit. We are now officially in the Crisis to which the 2008 Meltdown was just the warm up. The process will take time to unfold. The Tech Bubble, arguably the single biggest stock market bubble of all time, was both obvious to investors AND isolated to a single asset class: stocks. In spite of this, it took two years for stocks to finally bottom. Full Story
The federal government can’t seem to help itself. After overseeing the inflating and bursting of the dot-com bubble in the 1990s and the subprime mortgage bubble in the 2000s, the United States government is at it again – this time in the area of student loans. Student loan debt now stands at a record $1.2 trillion, which represents the second largest category of consumer debt after home mortgages. It has grown by leaps and bounds since the financial crisis of 2008 and now surpasses even car loans and credit card debt. Full Story
I linked Barry Ritholtz’s gold bug swipe along with other items in an Around the Web post. Anything linked (or republished from guests for that matter) on this site is to be taken as 100% their view, not mine. You, the reader are tasked with using your own brain to consider, discount or ignore any of it as you see fit. Full Story
By: Steve Saville, The Speculative Investor - 2 July, 2015
Inflation expectations bottomed in January of this year, or, to put it another way, deflation expectations peaked in January of this year. The question is: did the January reversal mark a 1-2 quarter shift or a much longer-term shift? We think it will prove to be the latter, although we hasten to point out that we are not anticipating a dramatic increase in inflation fear within the next year -- just the dawning of a general perception that more "inflation" lies ahead. Full Story
This coming Sunday Greece will hold its referendum. The question to be asked is not, as the foreign press initially reported it, about leaving the euro. It is about accepting or rejecting the troika’s bail-out terms. The Greek government’s finance minister is making this distinction clear to voters in the few days remaining. As if to ram the point home, Greece was reported earlier this week to be considering taking out an injunction at the European Court of Justice to block attempts to expel Greece from the euro on the grounds that there is no mechanism to do so. Full Story
The USDollar is on a collision course with imminent death. It is utterly amazing that so many supposedly smart analysts and highly paid wealth managers cannot see the obvious path on which the USDollar treads, limps, and struts proudly, dangerously, and abusively, suspended by numerous false cables and tethers. The USDollar cannot be sustained in its current form or on its present course. The abuse of its management and stewardship will be told in history books (possibly with certain chapters scribed by the Jackass). The aggressive defense of the USDollar includes criminal activity on a widespread scale never witnessed before. Full Story
Regulars to this newsletter will recognize the quote from Mr. Wodehouse gracing this issue's masthead. It's been there before -- almost always at summer's start -- and almost always with a reflection that perhaps we can learn something from Mr. McHoots. After all how much of what any one of us has to say about the current state of affairs matters much in the scheme of things? Even the Open champion has limited sway on the course of world events. So McHoots had solid justification for turning up his nose at the prospect of answering the media's inquiries. Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 2 July, 2015
My organization would welcome an honest exchange with you about these things, as your commentaries about gold seem to overlook the most relevant "narrative" about the monetary metal and ignore a substantial and serious audience quite different from the one you seem to enjoy engaging with. Full Story
American industrialist J. Paul Getty once said: “If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” And when the amount is $1.73 billion, it’s everyone’s problem. Greece is officially in arrears for missing its scheduled payment Tuesday to the International Monetary Fund (IMF). Expecting this, American stocks had their largest one-day drop of 2015 on Monday. Market volatility, as measured by the VIX, spiked sharply. Full Story
Gold standards have always been under government control. That’s why they were abused, suspended, and ultimately abandoned in favor of a currency that central banks could inflate at will. Central banking has always required a close partnership with government. As Vera Smith pointed out decades ago, central banks are not free market entities. They always require government sponsorship. Full Story
With the Greek banks closing, capital controls being imposed, and the unwillingness of the European Central Bank to expand its emergency liquidity assistance program – the stability of the global financial system is officially in play. Nothing is set in stone yet, but a looming Greek default and potential economic catastrophe in Greece is setting elements into motion on a global basis that have the ability to impact many things. Full Story
Early 2014 my first post was published about the audits performed on 95 % of US official gold reserves – the 7,628 tonnes stored by the US Mint – this is referred to as Deep Storage gold, 4,583 tonnes is at Fort Knox, 1,364 tonnes in Denver, 1,682 tonnes at West Point. In total US official gold reserves account for the 8,134 tonnes, owned by the US Treasury. My focus has always been the gold at the Fort Knox depository, as this is the largest facility. At the very surface the official story presented by the US government regarding the existence of Deep Storage gold seems credible. However, while investigating we could observe the official story is anything but credible. Full Story
In our opinion, short (half) speculative positions in gold, silver and mining stocks are justified from the risk/reward point of view. Gold and silver declined yesterday, but the really profound action was seen in the precious metals mining stocks. Both key indices for this sector (the HUI and XAU) declined below their respective 2008 lows and managed to close below them. What’s next? Will gold and silver stocks bounce like they did in late 2014? Full Story
How many of you reading this were aware that new home prices are down 12% since October 2014? Do not believe the propaganda. The headlines are full of lies. The numbers themselves are lies. The 2.2% gain in new home “sales” from the Census Bureau was driven by what is likely a corrupted “sales” report from the northeast region. I am putting “sales” in quotes because “new home sales” as reported by the Census Bureau are based on contracts signed. How many of you were aware of that? On average right now roughly 20% of all contracts signed are cancelled. So the report has a natural 20% error built into it. Full Story
I’ll leave a link at the end of the article for those who are interested in the translation of the title of this week’s installment of ‘Two Cents’. Well folks, it’s game on once again in the Eurozone and the shenanigans have once again escalated to another bank holiday – this time in Greece. ATMs were drained over the weekend as the Greek populace was mildly jolted from its collective stupor and lazily made its way to get a few precious Euros from bank accounts. The politicians postured, a referendum on the IMF cabal’s terms for yet another bailout is scheduled for this coming Saturday, and once again many are claiming that the end of the folly of the Eurozone is once again at hand. Full Story
I am watching the latest on goings in Greece from deep on the sidelines. One analyst after another suggests that Greece is on the verge of imploding. And, we have been warned so many times that such an implosion will have a dire effect upon the Euro, as well as world-wide stock markets. They are suggesting that people consider some protection for their assets. Full Story
So what’s the Federal Reserve going to do? Perhaps the Fed has painted itself into such a tight corner with all its tough talk that it has no choice but to raise interest rates before the end of this year. If that’s the case, however, I expect the FOMC to raise interest rates by so little that it may feel like a mosquito bite. I’m talking about a 5 to 10 basis point increase. Full Story
As the crisis in Greece (and now Puerto Rico) intensifies, Global markets (except gold) are tumbling. Greek banks are closed, and the situation looks grim. Incredibly, the enormous volatility seen in US stock markets yesterday could intensify, when the US jobs report is released around 830AM on Thursday, just a few days ahead of the Greek referendum! Gold and silver have a rough general tendency to decline ahead of the jobs report, and rally following its release. Full Story
Now that we know Greece will default, where do things go from here? Before getting to that very tough question (with no concrete answers), I would ask another stinging question. "Was a Greek default really "already in the market"? I have to chuckle just a little as Zerohedge did an article quoting many "talking heads" who as of last Friday were still doing their best Bruce Willis imitations and advising "come out to the coast, we'll have a BLAST"! How Could The "Greek Experts" Be So Wrong? As I questioned last week, a Greek default and Eurozone exit was in no way already factored into the market ...unless you believe today's carnage is a result of Puerto Rico 'fessing up to their bankruptcy! Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 30 June, 2015
Citing the latest quarterly report of the U.S. Office of the Comptroller of the Currency, Zero Hedge concludes tonight that JPMorganChase has "cornered the commodity derivative market," the notional value of the investment bank's commodity derivative position having just exploded from around $200 billion to nearly $4 trillion. Full Story
On Friday morning, at around midnight (Arizona time), the price of silver had a little crash. It dropped 30 cents in 11 minutes. More importantly, it dropped more than 10 cents in a single second. Then, the price rose above its level before the event. Here is a graph of the event, with each tick representing one minute. Full Story
By: Steve Saville, The Speculative Investor - 30 June, 2015
I was recently sent an article containing the claim that during the next financial crisis and/or stock-market crash there will be a panic ‘into’ the US dollar, but that unlike previous crises, when panicking investors obtained their US$ exposure via the purchase of T-Bonds, the next time around they will buy dollars directly. This is wrong, because large investors cannot simply buy dollars. As I’ll now explain, they must buy something denominated in dollars. Full Story
Here’s a bit of energizing news: In 2014, for the first time in four decades, the global economy grew along with energy demand without an increase in global carbon emissions. That’s according to energy policy group REN21’s just-released Renewables 2015 Global Status Report, which attributes this stabilization to “increased penetration of renewable energy and to improvements in energy efficiency.” Full Story
The GDXJ is at an important inflection point right here and now. As you can see it’s sitting right on the neckline of a small H&S top that has formed at the fourth reversal point on the potential bearish falling wedge. A break of the neckline will almost assure a move down to the bottom blue rail of the falling wedge at a minimum. Full Story
Amidst all the talk about “Grexit” ( are the rest of the readers as sick of hearing about this as I am at this point?), one thing being overlooked, especially by those who keep calling for some sort of rip roaring surge higher in gold and silver, is the fact that crude oil is weakening. In short, with many looking at the situation in Greece as contributing to a hit on economic growth, and with the fact that China is struggling, crude oil is moving lower as traders are concerned over a SLOWDOWN IN DEMAND. Full Story
We should watch closely to see how Greece handles its biggest problem — pensions — since the U.S. and Europe are certain to face the same problem eventually. Try to monetize it, which is what I predict the Greek government will do, and you get hyperinflation. Try to pay for it by reducing benefits and increasing taxes, which is what Greece’s creditors are demanding, and you get: 1) instant, ruinous deflation; 2) a plunge into poverty for nearly everyone; and, 3) taxpayer riots that pit the private sector against government employees. Full Story
By: Ira Epstein, Linn & Associates, LLC - 29 June, 2015
If I had asked you two or so weeks ago these “what ifs” you’d have likely said gold would be soaring. So would I but that’s not what’s occurring. Instead, gold is barely moving at all, barely able to hold rallies off of shocks due to Greece’s surprise moves and counter moves by the European Central Bank and the IMF Fund. When traditionally bullish shocks don’t move gold higher, gold is telling you a story. The story however is unfolding, as no one knows what this game of poker’s outcome will be. Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 29 June, 2015
No one who has followed GATA for a while could have thought last night, as Greece collapsed financially and the foundations of the European Union and its currency were shaken, that gold would do anything but decline or be held steady under surreptitious central bank intervention in the markets. But at least today's price action, the most anomalous since the otherwise inexplicable smashes down in April 2013, may awaken a few of the more oblivious analysts who purport to cover the gold market. Full Story
Greece is just the first domino to fall. Indeed the front pages of the financial media today show an interesting tale: both China and Greece are experiencing debt implosions, the former being a margin debt fueled stock market bubble crashing while the latter is on the verge of defaulting on its sovereign debt. Full Story
How is this even legal? That's a serious question and I'd like a serious answer after the you read what is presented below. Immediately following the short squeeze in mid-May that resulted in a 10% price move in just five days, the "Large Specs" in silver set out to rebuild (or were tricked into rebuilding) a massive naked short position in Comex silver. As you can see on the chart below, over the past five weeks, these Large Specs have added 41,806 gross naked short contracts to their accumulated position. Full Story
Not surprisingly there is little official documentation on the recently launched Silk Road Gold Fund. However, the translation below (original article published on ifeng) provides an intriguing insight at what this Fund is about. On May 22 Chinese financial policy makers from the PBOC, Chinese gold industry executives from commercial banks, mining companies, the Shanghai Gold Exchange and the China Gold Association together with representatives of the Western gold industry discussed gold’s future role in finance and how it will serve the New Silk Road Initiative. Full Story
The Shanghai Gold Exchange is expected to receive approval from its central bank for a yuan-denominated gold fix soon, according to Reuters. If the yuan fix takes off, China could draw buyers in the mainland and foreign suppliers to pay the local price, making the London fix less relevant in the world’s biggest bullion market. Additionally, the Shanghai Gold Exchange is in discussions with the CME Group about listing each other’s contracts on their respective exchanges, according to the exchange’s vice-president. Full Story
By: Richard Daughty, The Mogambu Guru - 29 June, 2015
I was feeling particularly low, having sunk into a sloppy, self-pitying, tequila-fueled, drunken introspection after (again) failing to achieve blissful Nirvana, this time per my wonderful new (“Why didn’t I think of it before?”) theory, which is to finally attain true transcendence through sheer, strict gluttony. Full Story
Hedge funds and high-frequency traders have finally forced gold into a US dollar loss this year as shown in our introductory chart, but silver is still in positive territory. This week gold declined $29 with a break from the $1200 level to $1171, and silver fell 40 cents to $15.70 early this morning in European trade. Full Story
Friends of the show call in with their questions and comments. The first caller wants to know if it is prudent to buy or rent a home. The Rule of 100 yields a home price estimate - multiply comparable monthly rent by 100: $1,000 per month in rent suggests a price of $100,000. Gold and silver remain the quintessential portfolio insurance - when every other asset fails, gold and silver lined life boats will save the day. Full Story
What was predicted for China has started to happen with the dramatic failure of its parabolic uptrend just over a week ago leading to a plunge. The update China Crash was posted when all indicators were at “nosebleed” levels late in April, right after which the third steepest fanline shown on our 1-year chart for the Shanghai Composite Index below was breached. Somewhat amazingly, that overbought peak late in April was not the final top – it rose even higher into early-mid June, but after that, just over a week ago, it finally broke below the parabola and started to cave in. Full Story
I often find myself apologizing for the emotion and struggling to keep it all professional. To keep a cool head, stick to the facts, honor the investment implications and serve the interests of readers. Just this past weekend, I had one of these conversations you have all had from time to time. The one where you end up defending a network of feelings tied in with a complicated conspiracy. Full Story
Greece is again all the buzz in the media and on the commentary circuit. If you’re like me, you are suffering terminal Greece fatigue. You just want Greece and its creditors to “do something already” rather than continually coming to the end of every week with no resolution, amid finger-pointing and dire warnings from all sides about the End of All Things Europe – maybe even the world. Full Story
This coming week could be very telling. China just ended a disastrous week and finished just whiskers away from entering bear market (-20%) territory. Credit markets all over the world are weakening and yields are rising. Greece will not make their June 30 payment(s) and probably go through a referendum to decide whether or not to flip their creditors the bird in a meaningless vote. In fact, Greece will probably "go boom" this week. Their banks and stock markets may not open Monday morning. Full Story
By: Steve St. Angelo, SRSrocco Report - 28 June, 2015
This is a chart every gold investor needs to see. While the gold mining industry works harder every year to produce the highly sought-after monetary metal, its overall productivity continues to decline. Actually, decline is too soft of a word to describe what’s taking place in the world’s leading gold producers. Full Story
Gold and silver will see a huge short covering rally on Monday that will lift prices out of their recent trading range and set the precious metals up for stellar price increases in the coming weeks and months. Short positions on the Comex futures exchange are presently at record levels. This is often the case at key reversal moments. If the gold price moves against these contracts then they are automatically forced to cover and buy gold, amplifying the movement of the price to the upside. Full Story
We may have been early on warning about leaving your savings in the financial system. It’s okay to be too early getting your money out of the system but it’s fatal to be just one second too late. The gates are already in place in money market funds just waiting for the signal to be lowered. Full Story
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