Archive for the ‘Bailout’ Category

‘Plunge Protection Team': Everywhere or Nowhere?

Posted by on October 23rd 2014 in Bailout, Federal Reserve, General Economy, Gold, Interest Rates, JPMorgan, Monetary Policy, Short Sellers, Silver, Ted Butler, USD, Wall Street | Be the first to comment!

PlungeProtectionTeam

Gold and silver futures ended off 0.5% and 1.8% on Wednesday, with the drop attributed in some quarters to a “firming dollar and subdued inflation,” which an analyst cited by MarketWatch sees as “a normal trading correction.”  And while a post at Jesse’s Café Américain agrees, suggesting that the metals “may have taken a pause at support,” he also finds it “interesting to see them run with stocks today, in the face of some exogenous risk events. They are certainly acting oddly. One has to wonder if this is a related action by the “Plunge Protection Team” which feels free to purchase stocks at key points apparently to help restore confidence.”

David Stockman’s Contra Corner advances the argument that there is a “Plunge Protection Team,” and “It’s called the FOMC.” This as Bloomberg reports that Citigroup analysts “have put a price on how much liquidity central banks need to provide each quarter to stop markets from sliding. By estimating that zero stimulus would be consistent with a 10 percent quarterly drop in equities, they calculate it takes around $200 billion from central banks each quarter to keep markets from selling off.”

Ted Butler has also raised the issue of the “Plunge Protection Team” meddling in the metals, alleging that it gave JPMorgan the greenlight to manipulate the silver market.

Can the EM Crisis be Contained?

Posted by on January 25th 2014 in Bailout, China, Federal Reserve, General Economy, Gold, India, Janet Yellen, Monetary Policy, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

“The Emerging Market (EM) crisis took a turn for the worse,” begins Doug Noland’s latest Credit Bubble Bulletin. “The apt Bloomberg currency market headline read: ‘Contagion spreads in emerging markets as crises grow.’ Note plural ‘crises’ as opposed to a singular EM crisis. This is a pertinent issue. A popular CNBC contributor posited Friday that EM-related market stress was not as troubling because it was related to individual country issues as opposed to what would be more challenging ‘macro’ forces. I would counter that the unfolding global crisis will be particularly problematic because of what has been a dangerous interplay between global ‘macro’ and individual country ‘micro’ Bubble dynamics.”…Read More >>>

Author Sees Monetary ‘Reset’ On Horizon

Posted by on January 21st 2014 in Bailout, China, Federal Reserve, General Economy, Gold, IMF, India, Monetary Policy, Russia, Silver, Wall Street | Be the first to comment!

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Koos Jansen, whose Web site In Gold We Trust is an invaluable resource for information on China’s gold dealings, interviews Willem Middelkoop, described as “the Dutch equivalent of Jim Rickards,” and who is also a co-founder and principal of the Commodity Discovery Fund.

Q:  Your new book is named “The Big Reset,” isn’t our current monetary system sustainable?

 A:  No, we now have arrived at the point where it is not the banks, but the countries themselves that are getting in serious financial trouble. The idea that we can ‘grow our way back’ out of debt is naive. The current solution to ‘park’ debts on to the balance sheets of central banks is just an interim solution. A global debt restructuring will be needed, as economists Rogoff en Reinhart recently explained in their working paper for the IMF. This will include a new global reserve system to replace the current failing dollar system, probably before 2020….Read More >>>

See also:

Gold Switzerland:  Interview with Jim Rickards –  “The Fed wants gold to rise orderly

Zero Hedge/Reuters:  Gold and silver tumble most in a month; Fall on stronger dollar, tapering speculation

Economic Times:  Jim Rogers – Gold will rally, but silver will do better

Miles Franklin:  Very strong U.S. Mint sales to start 2014

Peak Prosperity:  A new way to hold gold

Hathaway: If You Can’t Hold It, Fold It

Posted by on December 13th 2013 in Bailout, CFTC, China, Federal Reserve, General Economy, Gold, Goldman Sachs, IMF, Janet Yellen, JPMorgan, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

HoldingGold

In what is heralded as “a brilliant study of the gold market,” Tocqueville Gold Fund’s John Hathaway looks at the “Big Picture in Gold as We Head into 2014″ and concludes with two words of advice, get physical:

“It seems to us that restoration of sustainable fiscal order remains a long shot and that money printing, thought by most to be only an emergency measure, will become the norm. Our negative view on the prospects for fiat currency has not been invalidated by the steep two year decline in gold price. When the market reverses, the diminished physical anchor to paper claims, concerns over title and encumbrances on central bank bullion, and worries over the drift of public policy will drive liquid capital into gold. However, this time around, it seems to us that the major recipient of flows will be the physical metal itself. Holders of paper claims to gold will receive polite and apologetic letters from intermediaries offering to settle in cash at prices well below the physical market. To those who wish to hold their wealth exclusively in paper assets, implicitly trusting the policy elites to resurrect normally functioning capital markets and economic conditions, we say good luck. For those who harbor doubts on such an outcome, we say get physical.”

More from Hathaway in a follow-up interview to his article, in which he reiterates that “We are in a world of permanent money printing, and what may trigger this massive squeeze in gold to new all-time highs is when this all dawns on the investment community at large.”

See also:

Mises Daily:  How the paper money experiment will end

Jesse’s Café Américain:  Holding gold or silver in unallocated storage or in ETFs & brokerage accounts

MarketWatch:  Gold & silver advance to post slight weekly gain; JPMorgan cuts 2014 gold forecast by 10%, leaves silver unchanged

Index Universe:  Gold could surprise on the upside next year

Zero HedgeSafe-havens sought as stocks tumble to worst run in 4 months

Dan Norcini:  Commitment of Traders and the reverse flash crash

Bubble Trouble?

Posted by on December 13th 2013 in Bailout, China, Federal Reserve, General Economy, Gold, IMF, Janet Yellen, Monetary Policy, Quants, Short Sellers, Silver, Wall Street | Be the first to comment!

BubbleTrouble

Spiegel:  “Central banks around the world are pumping trillions into the economy. The goal is to stimulate growth, but their actions are also driving up prices in the real estate and equities markets. The question is no longer whether there will be a crash, but when.”

John Hathaway: Gold ‘Insiders’ Positioning for ‘Historic Short Squeeze’

Posted by on July 3rd 2013 in Bailout, CFTC, China, Federal Reserve, General Economy, Gold, Goldman Sachs, JPMorgan, Monetary Policy, Short Sellers, Silver, U.S. Congress, Wall Street | Be the first to comment!

In his 2nd quarter letter to investors, asking “What is happening to gold?,” the Tocqueville Gold Fund’s John Hathaway points out that “commercial CFTC positions have swung sharply away from the short side,” — they’re now “nearly net long” according to the latest COT report — and “Comex warehouse stocks have dwindled precipitously, dropping 32% or nearly 100 metric tonnes since the beginning of 2013.”  Also since the beginning of 2013, “physical gold held by ETF’s such as GLD has dropped by 586 tonnes.”

“Where does the liquidated gold go?,” asks Hathaway. “The final destination is impossible to know, but the first stop is into the accounts of “authorized participants”, aka, bullion dealers such as JPMorgan and Goldman Sachs. There are quite a few dots to connect here, but in our opinion, (and it is admittedly our speculation) an historic short squeeze is looming, and the insiders (bullion dealers) see it coming. By using the paper market to crush the price of gold, they have attempted to shake loose physical gold to reduce their short exposure in order to minimize the damage from what lies ahead.” … Read More >>>

News & Views

MarketWatch:  Gold futures end 0.7% higher on political strife, silver gains 2%

SilverSeek:  Silver market buy signal – again!; The Dow and gold/silver ratio signals coming silver rally

Zero Hedge/Reuters:  U.S. stocks surge despite weak data, European crisis and military coup

Bloomberg:  U.S. stocks rise as jobs reports offset Egypt, Portugal; Former Fed governor says Fed ready for September taper after shocking market

Pragmatic Capitalism/Seeking Alpha:  David Rosenberg – 5 signs of QE’s diminishing returns; Why tapering is good for gold

Wall Street Pit:  Physical demand for gold is gearing up at an alarming rate

CNBC:  Investing pros look east for signs of gold rebound; Dennis Gartman’s ‘watershed’ shift on gold

StreetInsider.com/Bloomberg:  JPMorgan – Ten reasons to get overweight commodities…now; UBS rates commodities ‘underweight’ as equities seen advancing

Arabian Money/KWN:  How global asset deflation will quickly morph into consumer price inflation and higher gold prices; Shadowstats’ John Williams – We are beginning to approach the end game

Gold Switzerland:  Ronald Stoeferle is interviewed about his latest edition of “In Gold We Trust“; Graphic from Stoeferle’s report – Gold’s share of total financial assets at a mere 0.5%

Alternet-NY Times:  More government snooping: The U.S. Postal Service is spying on you too!

CNBC/Washington Post/ReutersDelay in Obamacare could save jobs—for now; Employer mandate shouldn’t be delayed, it should be repealed; Could the U.S. delay Obamacare’s mandate for individuals, too?

Does Metals’ Sell Off Signal ‘Final Washout’?

Posted by on April 12th 2013 in Bailout, CFTC, China, Federal Reserve, General Economy, Gold, Goldman Sachs, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

About what was described as Friday’s “bloodbath” in the gold markets, Jesse’s Café Américain points out that “There was no news to provoke this kind of a massive sell off in a quiet market and on heavy volume,” which saw gold and silver futures drop 4.1% and 4.9% respectively. Quoted by MarketWatch, the Got Gold Report‘s Gene Arensberg fingers Goldman Sachs:  “Give credit where credit is due — to Goldman Sachs, for a masterful sell raid on gold.”

Metals market analyst and whistleblower Andrew Maguire tells King World News that while Friday’s sell off was “in excess of 500 tons of paper gold,” China has “purchased and taken delivery of over 400 tons in less than a month and a half.” He contends that “What we are seeing today is actually a very positive development.  I think we’ve reached a point of capitulation. I cannot see how the central bank buying cannot overwhelm all of these short sales, despite the leverage.” And Dan Norcini gives a qualified agreement, writing that “It is too early to call this as a final washout day but it has the makings of one.”

News & Views

GoldSeek:  Gold and silver fall about 6% and 4% on the week

Zero HedgeGold Bitcoined, bonds & yen Soar, Dow back to unch (of course); The gold and silver morning takedown is back

USA Gold/Mineweb:  Gold falls through range lows; Lawrence Williams:  Gold price manipulation – the never ending game?

KWN:  Paul Craig Roberts – Fed orchestrated smash in gold; Michael Pento likes gold but warns a stock market crash is coming

Wealth WireRemove Goldman’s golden veil

MarketWatch/The Golden Truth:  Cyprus causing fresh market pain as doubts grow over ability to meet bailout terms; The wheels are coming off in Cyprus – This is bad news for the U.S.

Bloomberg/Telegraph/Mike Shedlock:  Draghi says any Cyprus gold sale must cover emergency-loan loss; Liar, liar, pants on fire; Spoon-fed demands by the number

Gary North/Daily Bell:  Will Cyprus’ central bank sell some of its gold?; Was Cyprus attack also an attack on gold?

Barron’s/Thomson Reuters:  Commerzbank – Cyprus gold sale is no sign of Europe’s future; Graphic of the day – Gold reserves

Bloomberg:  Analysts – The era when safe havens are no longer safe

Reuters/Daily Reckoning:  Austria slams US, UK “tax havens” as EU turns up heat; The IRS is following your digital tracks

Economic Collapse:  The tunnel people that live under the streets of America

U.S. News/Spiegel/Bloomberg:  Here’s how lousy life is in North Korea; Foreign tourists flock to border between North & South Korea; N. Korea’s retro propaganda calls U.S. boiled pumpkin

Reversal of Fortunes: What Could Turn Metals’ Tide?

Posted by on April 5th 2013 in Bailout, Federal Reserve, General Economy, Gold, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

Under the headline “Gold and silver – one step forward, two steps back,” Mineweb‘s Lawrence Williams finds it “hard to reconcile the apparent high demand levels for physical precious metals with declining prices, but at the moment, and as they have been for much of the past two years, prices have been forced down by paper selling.”

“How long can this go on?,” he asks.  “One could say indefinitely but there are indeed underlying forces at work which could well bring this particular house of cards crashing down – notably if a European nation is forced to declare bankruptcy, another major bank collapse or, as some of the gold bulls suggest, that the supply of physical metal, particularly of silver, dries up to such an extent that deliveries cannot be made if demanded.  There is some evidence that this may already be beginning to occur with some banks reportedly refusing to supply holders with requested physical metal.  If this trickle were to become a flood then prices could indeed explode – but for the moment it seems that governments and their central bankers are pretty much in control.”

News & Views

GoldSeek/MarketWatch:  Gold and silver end slightly lower; Gold cuts loss, but still falls a third session

Jesse’s Café Américain:  Metals oversold on paper metal gimmickry

Reuters:  Gold hits 10-month low despite Japan stimulus, hopes for ECB cut; Euro, dollar soar vs. yen on ambitious BoJ policy move

Zero Hedge:  Kyle Bass – “Japan will implode under weight of their debt”; If Japan’s “Shock and Awe” QE happened in the US….

Bloomberg/Reuters:  GFMS sees gold rising toward $1,850 this year before drop begins

Dollar Collapse/MinewebGold’s paper price “doesn’t mean anything”; 2013 U.S. silver bullion coin sales may shatter records if trend holds

Tim Iacono/KWNSell your gold and silver now – Billions of people on the other side of the world will thank you; Louise Yamada – Cyprus, key chart plus gold & silver commentary

CBC/SafeHaven:  Canadian government looking at ‘Cyprus solution‘ for bank failures; Can a Cyprus-like ‘bail-in’ occur with gold?

Zero HedgeA ton of gold bricks: What capital flight looks like in Italy

Bloomberg/Telegraph:  Fed’s Lockhart, Evans want more job growth before QE end; Helicopter QE will never be reversed

Caroline Baum/Barron’s:  Gold bugs had the best monetary rule; Emerging markets: Embracing the gold standard?

Telegraph:  Bitcoin the ‘new gold’ – but what on earth is it?

Peter Schiff/Sovereign Man:  The Stockman backlash; What Peter Schiff told me this morning….

Equities Fall With Metals; ‘Clear Disconnect’ Between Paper and Physical

Posted by on April 3rd 2013 in Bailout, CFTC, China, Federal Reserve, General Economy, Gold, India, JPMorgan, Monetary Policy, Russia, Short Sellers, Silver, Wall Street | Be the first to comment!

“Gold futures dropped to the lowest since June, leaving prices on the brink of a bear market, as signs of a slowing U.S. economic growth sparked a drop in equities and commodities,” reports Bloomberg, with silver hitting an eight-month low. “The market is reacting to the U.S. data,” said one trader, “and it seems as if there is no interest to look at gold as a safe-haven asset,” while another predicted that silver prices “may continue to remain under pressure.”

MarketWatch quoted The Real Asset Co.’s Jan Skoyles as pointing out that “There is a clear disconnect between the paper and physical market.”  She added that “those in the paper market look at this on a day-by-day basis and today gold doesn’t look as attractive as other asset classes,” while “Those interested in physical gold continue to buy, but expect the gold price to drop further and so are hanging back until it does so.”

News & Views

Reuters/Dan Norcini:  Gold tumbles along with sharp losses in crude, equities; Gold, crude oil and copper break down

Silver Doctors/Jesse’s Café Américain:  Gold & silver rout continues; There was a very obvious hit on the precious metals market today

KWN/Money Morning:  Jim Sinclair – Russia & China loot Western gold while JP Morgan sells silver; ‘Gold only rises during the bad times’ and other fairy tales

Reuters/Bloomberg:  SF Fed’s Williams: Fed could start to pare bond buys this summer; Bullard days Fed ‘full steam ahead‘ with bond purchases

Economist/Washington Post:  Who will be the next Federal Reserve chair?

The Daily Bell:  Japanese officials promise to degrade currency aggressively

The Gold Report/Bloomberg:  Interview with David Stockman:  Welcome to Irrational Exuberance 2.0; Matthew Klein:  Stockman is right, the gold standard wasn’t so bad

Spiegel/Sprott Group/24hGold:  The aftermath of the Cypriot banking collapse; Caveat depositor; A message to the bottom 90%

GoldCore/Arab News:  Turkey’s silver imports surge 31% and gold imports climb to 8-month high; Gold does brisk business in Syria war — but at a risk

Reuters:  Young nation Kyrgyzstan fights over gold at top of the world

SwissInfo/New Indian Express:  Italian border checks strike gold; Gold smugglers take body route to outwit customs

Guardian/Bloomberg:   France’s former budget minister admits lying about secret offshore account; Ex-Goldman trader admits to hiding $8 billion position

Alternet:  Stock market super-star Jim Chanos reveals the perverse new mindset of financial fraudsters

Metals Drop on ‘Goosed’ Equities, Dollar ‘Strength’

Posted by on April 2nd 2013 in Bailout, CFTC, Federal Reserve, General Economy, Gold, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

With “strength in the dollar and a rally in U.S. equities” given as the main reasons for sending gold and silver futures down 1.6% and 2.5% respectively on Tuesday, Dan Norcini writes that “consistent strength in the U.S. dollar is continuing to set the hedge fund algorithms into selling commodities as a general trading strategy. This is the reason for the continued weakness in silver, and in gold.”  He sees the dollar being boosted primarily by “weakness in the euro which has not been able to recover from the blow it received as a result of the Cyprus debacle,” and, “Throw in the fact that we have a U.S. equity market which has been goosed into the stratosphere, compliments of Ben Bernanke and the rest of the doves over at the FOMC, and you have the ingredients for further strength in the dollar as by comparison to the rest of the world, the U.S. economy looks decent.”

News & Views

Jesse’s Café Américain:  Gold & silver charts – Non-farm payrolls week hit on the metals

Jim Sinclair/Addison Wiggin:  Today’s massive attempt to break gold; Dow never to see 2009 lows again but gold bull has miles to go

Gold Silver Worlds/Silver for the People:  The great disconnect between paper & physical silver

Seeking AlphaU.S. Mint sales for March: U.S. on pace to use all domestic mine production for Silver Eagles

BullionVault/Guardian/Mining.com:  Interest in gold “disappears” as North Korea tensions rise; Jim Rogers’ North Korea bet

The Golden Truth/Zero HedgeDeath by 1000 paper cuts; When a great deflationary bear starts turning inflationary

The Atlantic/Fiscal Times:  David Stockman’s stark warning for America; Stockman blames both parties for a debt-ridden nation

Spiegel/GoldMoney:  Bail-in blues: Luxembourg warns of investor flight from Europe; Danger in bank accounts

Tim Iacono:  A slow motion run on European banks will benefit gold

The Street/CNBC:  Cyprus – Not your grandfather’s bank holiday; Marc Faber – What happened in Cyprus will happen everywhere

AP/Globe & Mail:  Euro area unemployment at record 12 percent; Bound to go from bad to worse

Sprott Group/Silver Doctors:  Mining stocks or physical metal?; In the face of irrational paper markets, the complete cost for mining silver

Sovereign Man:  Hard money luminaries share stage in Santiago, Chile

Does Silver Coin Surge Herald Higher Prices?

Posted by on April 1st 2013 in Bailout, CFTC, China, Federal Reserve, GATA, General Economy, Gold, JPMorgan, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

Closing its books on March, the U.S. Mint reports that it sold 14,223,000 Silver American Eagles through the first three months of this year.  Peter Cooper points out that this number wasn’t hit until May of last year, and Silver Eagle sales are “running at their highest level ever since records began in 1986. If the price of silver was set by coin sales then it would be at a new all-time high, but the Comex futures pit still rules the price.”  Despite that, he argues that “the explosion of coin buying is a concrete indicator of a silver price surge coming soon, whatever the short-term vagaries of the global financial markets might do to the Comex silver price in the meantime. Coin holders should take heart and keep their bullion.”

News & Views:

MarketWatch:  Gold reclaims $1,600 after manufacturing data; silver off 1.3%

Bloomberg/Mineweb:  Silver futures drop into bear market amid China slowdown concern

Reuters/BBC:  China March PMIs rebound, domestic demand shines;  China manufacturing activity at 11-month high in March

Casey Research:  Silver ETFs signal bears are wrong

SilverSeek:  Silver — Keep it simple!; (Earlier — Part 1)

Got Gold Report/Gold Silver Worlds:  Grant Williams – Risk, it’s not just a board game; Five key take-aways from Williams’ presentation

Bloomberg/Peak Prosperity/Azizonomics:  David Stockman warns of crash of Fed-fueled bubble economy; Extended interview with Stockman; On Stockman & liquidation

Reuters:  Fed study:  Like rate cuts, unconventional easing weakens dollar

GATA:  Fed shorting gold to support dollar, former Asst. Treasury Secretary Paul Craig Roberts says; Australia and China plan to trade directly in their own currencies

Mineweb/BBC:  Turkey gold exports to Iran resume despite tough US sanctions; How much gold is there in the world?

Bill Fleckenstein/Michael Pento/Ron Paul:  Turning a blind eye to Cyprus; The real fallout from Cyprus; The great Cyprus bank robbery

NY Times:  As banks in Cyprus falter, other tax havens step in; As stock market heats up, trading slips into shadows

Reuters/Simon Johnson:  Banks score major win in private Libor suits; Money-laundering banks still get a pass from U.S.

WFAE:  Judge’s ruling makes Stockton most populous city to enter bankruptcy

Paper Metals: A House of Cards?

Posted by on March 29th 2013 in Bailout, CFTC, Federal Reserve, GATA, General Economy, Gold, JPMorgan, Monetary Policy, Short Sellers, Silver, Wall Street | Be the first to comment!

In summing up “Everything you need to know about gold and silver,” the Motley Fool’s Christopher Barker believes “The game is rigged,” but predicts that “Ultimately … suppression of gold and silver prices will fail, and that one likely mechanism for that failure lies in enhanced demand for physical bullion as opposed to the leveraged financial instruments that are routinely mistaken as bullion equivalents.

If a financial professional tried to convince you today that mortgage-backed securities are a viable cash alternative, you’d turn around and walk out the door, right? But the same ruse persists in the markets for gold and silver, where opaque derivative markets, leveraged as high as 100-to-1 over the available supply of physical collateral, underscores the dangerous house of cards that most investors mistake as the markets for physical gold and silver.”

News & Views

Zero Hedge/GoldSeekThe week that was: March 23-29th 2013; Is the correction in gold and silver behind us or still to come?

KWN:  What’s happening with bulls, bears & global markets

SilverSeek:  Buy silver now?; Storing silver for the next generation

SafeHavenSilver’s coming of age

TF Metals Report/Seeking Alpha:  Silver analyst David Morgan interviewed; The true cost to mine silver – Complete 2012 figures

GATA/Index Universe:  Turkey trading gold with Iran again; gold ETFs examined on 10th anniversary; Redeemable gold ETFs could be costly

Mike Shedlock:  Arizona lawmakers advance bill allowing gold and silver as money; Bureaucratic nightmare? Nonsense.

Casey Research/GoldSeek:  Preparing for inflationary times; The real inflation rate and what to do about it

GATA/Yahoo! Finance:  Hinde Capital: The central bank revolution;   Rethinking Bernanke & the Fed’s power

Guardian/Zero Hedge:  Is Europe’s central bank misleading us over who’s to blame for eurozone crisis?; ECB backs Dijsselbloem’s liquidation policy “template”

Telegraph/Cynicomomics:  Slovenia faces contagion from Cyprus as banking crisis deepens; 3 types of contagion and what they mean for the global economy

Casey Research/Mises Daily:  The chess game of capital controls; Cyprus and the unraveling of fractional-reserve banking

CNBC/Bloomberg:  Jim Rogers – ‘Run for the hills‘ now, I’m doing it; Jonathan Weil – Betray your bank before your bank betrays you

Russia Today:  ‘BRICS development bank would shift the tectonic plates of geopolitics and geo-economics’