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Offline g

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Re: Gold & Silver News (Recovery an Illusion: John Williams at His Best!
« Reply #15 on: May 20, 2012, 04:15:18 AM »
JW: Your primary hedge is physical gold; precious metals, including silver; and some assets outside the dollar. I still like the Swiss franc—its ties to the euro will not last. I like the Australian dollar and the Canadian dollar. Having funds actually outside the U.S. is a plus. To get through the crisis, you need a hard asset that is liquid for the near term.

Over the longer haul, gold stocks are wonderful hedges, but if the system gets into real trouble, which I think it will, you may have liquidity issues in the market. I am talking about limitations on the physical ability to transact in the market. You may also have liquidity problems with real estate, although over time, real estate is a tremendous hedge against inflation.

TGR: What is the best investment advice you ever received?

JW: Well, I do not generally take investment advice, but the best investment advice I ever gave myself was to buy gold.                                                                                Excerpt Full Article Link Below. Don't miss it chock full of charts and goodies!  http://feedproxy.google.com/~r/theaureport/Ajgh/~3/ei5Vo4q4g70/13404        :icon_study:

Offline Surly1

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Re: Gold & Silver News
« Reply #16 on: May 25, 2012, 09:05:12 AM »
GO, thinking of you on this one:

http://www.zerohedge.com/news/bank-russia-buy-%E2%80%9Cconsiderable-figure-gold-tonnage-2012

From GoldCore

Bank Of Russia To Buy “Considerable Figure" Of Gold Tonnage In 2012

Gold’s London AM fix this morning was USD 1,560.50, EUR 1,240.66, and GBP 996.04 per ounce. Yesterday's AM fix this morning was USD 1,558.50, EUR 1,239.27, and GBP 993.62 per ounce.

Silver is trading at $28.30/oz, €22.60/oz and £18.13/oz. Platinum is trading at $1,430.00/oz, palladium at $588.70/oz and rhodium at $1,275/oz.

Gold was off $1.70 or 0.11% in New York yesterday and closed at $1,559.50/oz. Gold fell in Asia prior to gains late in the session and these gains continued in early European trading as lower prices are leading to some safe haven demand.


Gold USD Chart – (Bloomberg)

Gold looks set to see a fourth consecutive monthly loss which will be bearish technically. Gold will need to rally nearly $100/oz between now and end of trading of next Thursday May 31st to not incur a monthly loss of some 6% in May.

It will be the first time it has had four consecutive monthly losses since the four months to January 2000 – prior to the current secular bull market.

Gold’s monthly decline is primarily in dollar terms and therefore a dollar phenomenon as it coincides with a very poor month for the euro which currently is down nearly 5% versus the dollar.

Thus, gold is only down 1% against the euro while most European equity indices are down by 5% plus.

Although gold is a safe haven, in recent days speculators and investors burnt by riskier assets like equities, oil and industrial metals have been forced to liquidate their gold paper positions to cover losses in other markets.

While speculative players in futures markets can exert considerable influence in the short term, as ever physical supply and demand will be the ultimate arbiter of price in the long term.

The debt crisis in Europe looks like it may spiral out of control and trigger a global economic slowdown and contagion which will again support gold in the long term.

Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded fund, rose for a second day to 1,270.30 metric tons yesterday. Demand in Asia outside of India was “good” yesterday and interest in Europe is “evident,” UBS said in a report this morning.

Premiums of gold bars in Tokyo rose to as much as $1.50 per ounce above London prices, the highest level since last March, as investors turned from sellers to buyers during this most recent price correction, dealers told Reuters.

The IMF central bank gold demand figures for April were very bullish and suggest that central bank demand in 2012 may be even higher than the 456.4 tons added last year – which was the most in almost five decades.

The World Gold Council estimates that central banks will buy as much as 400 tons this year.

The data yesterday suggests that demand may be even higher than these levels and there is also the near certainty that larger central banks, such as the People’s Bank of China, are quietly accumulating gold reserves and not reporting their purchases to the IMF - as was done previously.


XAU/EUR Currency Chart – (Bloomberg)

Today, the deputy chairman of Russia's central bank, Sergey Shvetsov, said that the Bank of Russia plans to keep buying gold on the domestic market in order to diversify their foreign exchange reserves. 

"Last year we bought about 100 tonnes. This year it will be less but still a considerable figure," Shvetsov told Reuters on the sidelines of a financial conference in Milan.

Russia's gold and foreign exchange reserves fell to $514.3 billion in the week ending May 18, from $518.8 billion a week earlier. However, they have risen from the $498.6 billion seen at the end of 2011.

Yesterday, Shvetsov said that Greece has plans for a parallel currency and that it is a “necessity” for Greece to leave the euro.

US exchanges are closed on Monday for Memorial Day.
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline g

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Re: Gold & Silver News
« Reply #17 on: May 25, 2012, 09:12:25 AM »
Thanks Surly, Marc Faber is speaking of it's wonders on CNBC right now.  :icon_sunny:

Offline g

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Re: Gold & Silver News Merkel Warms to Idea of Gold for Collateral
« Reply #18 on: May 30, 2012, 08:57:52 AM »
I am not surprised.    :icon_study:

From: GoldMoney - Gold Research
http://www.goldmoney.com
Gold reserves as collateral
http://www.goldmoney.com/gold-research/newsdesk/gold-reserves-as-collateral.html

London Good Delivery gold bars Yesterday’s big news as far as gold was concerned was a Telegraph report stating that Germany could be about to get into the “cash for gold” business in a big way. Angela Merkel is said to be increasingly favourable to the idea of countries pooling a portion of their sovereign debt into a redemption fund, with the eurozone then taking on a collective obligation to honour this debt. Member states would be obliged to pledge gold and currency reserves as collateral in case they are unable to make good on their obligations.

This so-called “European Redemption Pact” gets around German courts' constitutional objections to “Eurobonds”. It would also allow PIIGS governments to in effect share “Germany’s credit card”, thus lowering borrowing costs in the eurozone periphery and so taking the pressure off of embattled governments in Spain, Greece, Italy and elsewhere. And a big plus point as far as Germany is concerned is that this is no free lunch: if countries cannot honour their commitments, then they will lose their collateral.

But of course, things are never as simple as that. The fly in the ointment here is the always-emotive subject of gold, with many in southern Europe sure to object to the idea of pledging their gold to such a venture. Italy’s sovereign gold reserves stand at 2,451 tonnes – worth €98 billion as of March – while France sits on a hoard of 2,435 tonnes, and Portugal 383 tonnes (Portugal actually owns around 72 tonnes more then the European Union’s second largest economy, the United Kingdom). Having thus far resisted pressure to sell gold in order to shore up state finances, many in these countries will no doubt be wary of this EU take on a “cash for gold” shopping mall kiosk.

This idea bears close attention. If it looks like taking off, it will be yet another indicator that gold is slowly but surely re-entering the financial calculations of governments around the world.
GoldBarStack
GoldBarStack
 
« Last Edit: May 30, 2012, 09:04:39 AM by Golden Oxen »

Offline Surly1

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Re: Gold & Silver News
« Reply #19 on: May 30, 2012, 10:35:23 AM »
Somebody somewhere is already packaging derivatives on this concept, with "rehypothification" to come next week.
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline g

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Yesterday, June 18, 2012, the FDIC distributed a rule-making notice to member banks, telling them it intends to change collateral rules, among other things. The changes are not purely the work of the FDIC alone. Prior to the notice, the agency got the approval of all US federal bank regulatory agencies. These include the Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board of Governors and the Office of the Comptroller of the Currency (OCC).

The purpose is to harmonize and address perceived shortcomings in the measurement of risk-weighted assets, in part by implementing changes made by the Basel Committee on Banking Supervision (BCBS) to international regulatory capital standards. It is also intended to implement aspects of the Dodd-Frank Act. The proposed rule would:

1) Revise risk weights for residential mortgages based on loan-to-value ratios and certain product and underwriting features;
2) Increase capital requirements for past-due loans, high volatility commercial real estate exposures, and certain short-term loan commitments;
3) Expand the recognition of collateral and guarantors in determining risk-weighted assets;
4) Remove references to credit ratings; and
5) Establish due diligence requirements for securitization exposures.

One key provision significantly strengthens restrictions on the way banks estimate their exposure to derivative risks. Banks use these estimates, and disseminate them to regulators, for purposes of setting and/or justifying capital levels. Estimates of exposure using so-called "net current credit exposure" (the cost of canceling the contracts prior to the occurrence of a trigger event) and/or purely subjective mark-to-fantasy "models", concocted by the bank financial team, would no longer be acceptable. Notional exposure would become a mandatory part of calculating the "risk" of derivatives.

Under new rules, the following would be entitled to a zero percent risk weighting:

1. Cash;
2. Gold bullion;
3. Direct and unconditional claims on the U.S. government, its central bank, or a U.S. government agency;
4. Exposures unconditionally guaranteed by the U.S. government, its central bank, or a U.S. government agency;
5. Claims on certain supranational entities (such as the International Monetary Fund) and certain multilateral development banking organizations
6. Claims on and exposures unconditionally guaranteed by sovereign entities that meet certain criteria, as listed in the notice.

A set of other assets, which are considered less reliable, are assigned a 20% risk weighting:

1. Cash items in the process of collection;
2. Exposures conditionally guaranteed by the U.S. government, its central bank, or a U.S. government agency;
3. Claims on government sponsored entities (GSEs);
4. Claims on U.S. depository institutions and NCUA-insured credit unions;
5. General obligation claims on, and claims guaranteed by the full faith and credit of state and local governments (and any other public sector entity, as defined in the proposal) in the United States;
6. Claims on and exposures guaranteed by foreign banks and public sector entities if the sovereign of incorporation of the foreign bank or public sector entity meets certain criteria.

Offline Jb

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Re: Gold & Silver News
« Reply #21 on: June 21, 2012, 01:21:52 PM »
Silver at $26.88 as of 4:20 EST. Getting close to my target.

Offline g

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Re: Gold & Silver News: Ignore The Noise Dark Years are Here
« Reply #22 on: June 22, 2012, 03:41:30 AM »
IGNORE THE NOISE - KWN & Egon von Greyerz
Egon von Greyerz
Matterhorn Asset Management AG - 18 June 2012
IGNORE THE NOISE

For several years I have stressed to investors that they must focus on real issues and the big picture and ignore all the background noise that is produced by the media and so called financial experts. The scene for what is happening today and will happen in the next few years has been set for years and even decades. What happens to Greece, what the Fed or the ECB do has no effect whatsoever on the extremely severe long term economic and social decline which the world will experience in the next few years.

These daily events just create short term volatility caused by irrational and short term oriented investors/gamblers. As I have been stating in many articles and interviews over the last few years like "Alea Iacta Est" (the die is cast), or the "Dark Years Are Here", the world is virtually certain to experience a hyperinflationary depression of a magnitude that will have a massive impact for the majority of the world's population for years and probably decades. And there is no short term action taken by governments that can change the outcome.

The depression has already started in countries like Greece and Spain and will soon spread to most European countries as well as the USA, Japan and even China.

As Richard Russell of Dow Theory Letters who experienced the 1930s has been saying for years, in a depression everybody suffers, it is just a question of who suffers the least. As the depression spreads, governments and central banks will continue to destroy the value of money by printing unlimited amounts of worthless paper. This is when the suffering worldwide will accelerate. Not only will many people be without jobs, they will also be without a social security support system and with virtually no pension. And whatever little money people will have will have no value due the hyperinflationary prices of goods and services. For a few privileged investors it is still time to preserve assets and purchasing power by purchasing physical gold and storing it outside the banking system. Although gold has gone up around 6 times in the last ten years, it is still cheap and will continue to reflect the destruction of paper money.

In a audio interview with Eric King of King World News (KWN) from 17 June, I cover these very important events in more detail. KWN has an impressive stable of independent thinkers who are interviewed every week. On 16 June for example there is an important interview with Gerald Celente who is a (or rather 'the') world renowned trend forecaster. Since most of the media only covers conventional wisdom and what happened yesterday, KWN has a very important position in featuring interviewees who clearly and objectively can understand the real issues. In my interview with KWN of yesterday I also cover what is likely to happen to gold in the next 12 months. I do agree with James Turk that we are likely to see a major move in gold starting this summer.      :icon_study:

Offline Surly1

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Re: Gold & Silver News
« Reply #23 on: June 22, 2012, 06:12:21 AM »
This is certainly the right place for this post.

What is interesting is he posits a "hyperinflationary depression" which seems a contradiction in terms. If any of the trillions which Helicopter Ben has created on his laptop were to actually reach the proles, that would be one thing. But from where I sit (and I hasten to add I am no economist) it loks like he is just inflating the balloon enough to keep the Great Ponzi going for another day. All the hyperinflationistas, like Speedy, keep waiting, waiting...

Of course, the hyperinflation might be managed as a slow motion event, witnessed daily in increased food and energy costs, smaller package sizes, etc. , much in the same way as the Zionist Apartheid State is managing the extermination of the Palestinians... slowly, and cut-by-cut.

Egon is certainly a doomy doomster, and he can feel free to nestle around the campfire with Kunstler and all the members, posters and lurkers (and lurkettes) on this board.
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline g

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Re: Gold & Silver News
« Reply #24 on: June 22, 2012, 06:54:46 AM »
Quote Surly " Of course, the hyperinflation might be managed as a slow motion event, witnessed daily in increased food and energy costs, smaller package sizes, etc. , much in the same way as the Zionist Apartheid State is managing the extermination of the Palestinians... slowly, and cut-by-cut."

We have been on that path here also in my opinion Surly. Have you noticed the 4 1/2 oz tuna fish cans and 11 1/2 tins of what used to be a pound of coffee on top of the price increases. Reminds me of an interview I watched of Pigman Kraft on CNBC a few months ago. He was bragging about how he cut the thickness of a slice of cheese by 50 % and no one even noticed, he was laughing at his novel approach to raising prices. The panel of nit wits was applauding his genius at raising prices in such a brilliant manner. Imagine bragging about such a thing on TV in front of millions of your customers. Incredible what imbeciles our society have become.  I do hope for our sake however that you are correct and it can be managed slowly, but I have my doubts.      :'(

Offline Surly1

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Re: Gold & Silver News
« Reply #25 on: June 22, 2012, 07:29:43 AM »

//Have you noticed the 4 1/2 oz tuna fish cans and 11 1/2 tins of what used to be a pound of coffee on top of the price increases. Reminds me of an interview I watched of Pigman Kraft on CNBC a few months ago. He was bragging about how he cut the thickness of a slice of cheese by 50 % and no one even noticed, he was laughing at his novel approach to raising prices. The panel of nit wits was applauding his genius at raising prices in such a brilliant manner. Imagine bragging about such a thing on TV in front of millions of your customers. Incredible what imbeciles our society have become. 

The 100 year war on public education has resulted in a system that rewards conformity, teaches people, in Carlin's words, to be "just smart enough to push the levers and fill out the paperwork" but not smart enough to elucidate one's self-interest.

You are familiar, I am sure, with the execrable movie, "Idiocracy?" Awful movie, but the premise is right on the money.

<a href="http://www.youtube.com/v/y0O7_3o3BrI?rel=0" target="_blank" class="new_win">http://www.youtube.com/v/y0O7_3o3BrI?rel=0</a>
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline g

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Re: Gold & Silver News ( Unusual US Gold Activity Report 1st Qtr 2012 )
« Reply #26 on: July 07, 2012, 05:04:16 AM »
 U.S Gold Net Exports Increased Substantially During First Quarter 2012
By Steve St. Angelo
Created 6 Jul 2012

Something very interesting took place in the first three months of 2012. Last year, the United States was a net importer of gold during the first quarter. However this year, the U.S. became a huge net exporter of gold during the same time period. This information was acquired from the latest USGS Gold Mineral Industry Surveys.

Below, we can see the actual data:

u.s. imports and exports of gold [1]

I have focused on the first three categories as these are the predominant sources used in the gold bullion trade. This first chart lists the amount of gold imported during the first quarter of 2012. If we look at the bottom highlighted figure we will see that 75.1 metric tonnes of gold were imported into the U.S. between January and March (These figures are listed in kilograms). The top highlighted figure (507 metric tonnes) shows the total amount of gold imported in 2011.

The chart below displays the amount of U.S. gold exported during Jan-Mar:

u.s. exports of gold 2011 to 2012 [2]

Here we can see that during the first three months of 2012, the U.S. imported only 75.1 metric tonnes, but exported 178 metric tonnes. Thus, the United States was a net exporter of 103 metric tonnes of gold during the first quarter of 2012.

The reason why this is interesting is due to the fact the U.S. was a net importer of 38 metric tonnes of gold during the same time period last year. The next chart reveals just how much gold is leaving the U.S. continent.

u.s. gold imports vs. exports 2011 to 2012 [3]

What a difference in a year – the tide has indeed changed. This turns out to be a net export difference of 141 metric tonnes of U.S. gold compared to last year – or 4.53 million ounces of gold in just three months. When the USGS releases the next Gold Mineral Industry Survey, it will be interesting to see how much more gold is leaving the country. Not only is gold leaving the continent, look at the drop of gold imports during this time period.
U.S. Gold Imports

Q1 2011 = 172 metric tonnes (MT)

Q1 2012 = 75.1 metric tonnes (difference of 97 MT)

So where is all this gold going? That’s a good question. If you look up at the Gold Export chart above, you will notice that top three countries receiving U.S. gold were Hong Kong, the United Kingdom, and Switzerland.

top 3 u.s. gold exports q1 2012 [4]

Of the total 178 metric tonnes of gold exported from the U.S. during Q1 of 2012, Hong Kong, the United Kingdom and Switzerland acquired 161.7 metric tonnes or 91% of the total amount. If the rumors are correct, the majority of this gold is being shipped to these countries and being purchased by the Big Eastern Buyers.

Of course this information is from a U.S. governmental agency and it can’t be a guarantee of complete data, but at least this gives us a good idea how the situation has changed from the prior year.
Retail Investment Demand Is a Mere Pittance

As I have mentioned before, retail investment demand is not a good barometer for the precious metal market. If the figures are correct, the U.S. had net exports of 103 metric tonnes (3.3 million ounces) of gold during the first three months of 2012. If we look at the chart below, we can see how little Gold Eagles sales are compared to overall U.S. gold exports:

u.s. mint gold eagle sales 2011 vs. 2012 [5]

Gold Eagle sales in the first half of the year were 343,500 ounces (down 40% yoy), while U.S. gold net exports were over 3.3 million ounces from Jan-Mar 2012. If this trend of U.S. gold exports continues, half year figures could reach 5-6 million ounces. This would mean that retail Gold Eagle demand may only account for 6-7% of the forecasted 5-6 million ounces of U.S. gold net exports.

This proves the case that the majority of Americans are still quite clueless when it comes to understanding gold’s role as money. As the world financial system continues to crumble, the large Eastern buyers and a small minority of Europeans are rapidly exchanging fiat paper notes for gold.

At some point in time the game of music gold chairs will end and the public may not have the opportunity to buy physical gold…. even if they had the means to do so.

Got gold?
                   http://feedproxy.google.com/~r/fso/~3/1uU5l-Rrrgs/u-s-gold-net-exports-increased-substantially-during-first-quarter-2012   Link will show chats of this unusual behavior.   :icon_study:

Offline g

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Re: Gold & Silver News: Olympic Gold Coin Farce
« Reply #27 on: July 29, 2012, 07:40:54 AM »
The con job continues everywhere.

Do you need any further proof of Central bank currency debasement? They can spend $42 million on the opening ceremonies but put less than 2% gold into the gold medals for the greatest athletes in the world. This again shows the true nature of this farce. The Olympics are about Coke, GE, McDonalds, NBC and the reputations of governments and politicians - and nothing else matters. 
Austerity At The Olympics: Each “Gold” Medal Contains 1.34% Gold
Tyler Durden's picture

Submitted by Tyler Durdenon 07/28/2012 20:27 -0400

As every Olympic athlete knows, size matters. The London 2012 medals are the largest ever in terms of both weight and diameter – almost double the medals from Beijing. However, just as equally well-known is that quality beats quantity and that is where the current global austerity, coin-clipping, devaluation-fest begins. The 2012 gold is 92.5 percent silver, 6.16 copper and… 1.34 percent gold, with IOC rules specifying that it must contain 550 grams of high-quality silver and a whopping 6 grams of gold. The resulting medallion is worth about $500. For the silver medal, the gold is replaced with more copper, for a $260 bill of materials. The bronze medal is 97 percent copper, 2.5 percent zinc and 0.5 percent tin. Valued at about $3, you might be able to trade one for a bag of chips in Olympic park if you skip the fish.

 http://www.theburningplatform.com/?p=38033     :icon_study:

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Offline g

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Re: Gold & Silver News: Trust Starts with Truth and Ends with Truth.
« Reply #28 on: August 07, 2012, 08:08:36 PM »
A Matter of Trust - Part Two
By James Quinn
Created 7 Aug 2012

This is Part 2 of my three part series on trust. Part 1 [1] addressed the history of bubbles and busts and the role trust plays in these episodes. In the end, truth is what matters.

    “Trust starts with truth and ends with truth.” - Santosh Kalwar [2]


Hundred Year Bust

share of silver roman coins

    “Debasement was limited at first to one’s own territory. It was then found that one could do better by taking bad coins across the border of neighboring municipalities and exchanging them for good with ignorant common people, bringing back the good coins and debasing them again. More and more mints were established. Debasement accelerated in hyper-fashion until a halt was called after the subsidiary coins became practically worthless, and children played with them in the street, much as recounted in Leo Tolstoy’s short story, Ivan the Fool.” – Charles P. Kindleberger – Manias, Panics, and Crashes [3]

The Holy Roman Empire debased their currency in the early 1600s the old fashioned way, by replacing good coins with bad coins. Any similarities with the U.S. issuing pennies that cost 2.4 cents to produce and nickels that cost 11 cents to produce is purely coincidental. I wonder what the ancient Greeks would think of our Olympic gold medals that contain 1.34% gold. The authorities have become much more sophisticated in the last one hundred years. Digital dollars are so much easier to debase. The hundred year central banker scientifically manufactured bust relentlessly plods towards its ultimate conclusion – the dollar reaching its intrinsic value of zero.

dropped only four cents founding of fed

    “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford [4]

Henry Ford made this statement decades before the debasement of our currency entered overdrive. The facts reflected in the chart above should have provoked a revolution, but the ruling class has done a magnificent job of ensuring the mathematical ignorance of the masses through government education, mass media propaganda, and statistical manipulation of inflation data to obscure the truth. Mainstream economists have successfully convinced the average American that inflation is good for their lives and deflation is dangerous to their wellbeing. There are economists like Kindleberger, Shiller and Roubini who have brilliantly documented and predicted various bubbles, despite being scorned a ridiculed by the captured mouthpieces for the oligarchs. But even these fine men have a flaw in their thinking. They can see speculative manias spurred by irrational beliefs and delusional thinking, but are blind to the evil manipulations of bankers, politicians, and corporate titans. They believe that humans with Ivy League educations can outsmart markets and through the fine tuning of interest rates, manipulation of the money supply and provision of liquidity through a lender of last resort, can control the financial system and avoid panics.

Kindleberger understood the dangers, but still concluded that the Federal Reserve lender of last resort was a desirable entity which would be a benefit to the smooth functioning of the economic system and people of the United States.

    “I contend that markets work well on the whole, and can normally be relied upon to decide the allocation of resources and, within limits, the distribution of income, but that occasionally markets will be overwhelmed and need help. The dilemma, of course, is that if markets know in advance that help is forthcoming under generous dispensations, they break down more frequently and function less effectively.

    The dominant argument against the a priori view that panics can be cured by being left alone is that they almost never are left alone. The authorities feel compelled to intervene. In panic after panic, crash after crash, crisis after crisis, the authorities or some “responsible citizens” try to bring the panic to a halt by one device or another. The learning has taken the form of discovering the desirability and even the wisdom of a lender of last resort, rather than relying exclusively on the competitive forces of the market.” -– Charles P. Kindleberger – Manias, Panics, and Crashes [3]

Kindleberger’s reasoning seems to be that since egomaniac busy bodies in power always interfere in markets in order to convince voters they care; it is desirable to institutionalize this intervention. Book smart academics always think they can outsmart the markets and correct the errors caused by the flaws endemic across all humanity. Well-meaning brainy economists like Kindleberger, Shiller, and Stiglitz easily identify the irrationality of human nature in creating havoc with our economic system, but somehow conclude that human constructs like the Federal Reserve, tinkering with interest rates, controlling money supply, and applying fiscal stimulus can be managed to the benefit of the American people. This is a foolish notion and has been proven to be disastrous for the majority of the American people.

Why wouldn’t the same human flaws that lead to booms and busts manifest themselves in the actions of bankers and politicians selected to manage and control our economic system? Therein lays the problem and the need for a true free market method of dealing with our human frailties. The false storyline of Democratic socialism versus Republican free market capitalism is nothing more than propaganda talking points designed to keep the non-critical thinking public distracted from the looting and pillaging of the nation’s wealth by our owners – the wealthy powerful elite who have captured our political, economic and financial system. The “solution” to create a private central bank has created more crises than it has prevented.

When examining Kindleberger’s list of manias, panics and crashes, you will note that prior to 1913 almost all of these crashes occurred over the course of two years or less. The creation of the Federal Reserve was supposedly in response to the 1907 panic, created by J.P. Morgan, who then nobly came to the rescue of the banking system. He then secretly led the effort to create a central bank that would function as the lender of last resort during future panics. Forbes magazine founder B.C. Forbes [5] later described the meeting that hatched the malevolent plan for the creation of a banker controlled Federal Reserve:

    “Picture a party of the nation’s greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily riding hundreds of miles South, embarking on a mysterious launch, sneaking onto an island deserted by all but a few servants, living there a full week under such rigid secrecy that the names of not one of them was once mentioned, lest the servants learn the identity and disclose to the world this strangest, most secret expedition in the history of American finance. I am not romancing; I am giving to the world, for the first time, the real story of how the famous Aldrich currency report, the foundation of our new currency system, was written.”

The American people should have been alarmed that a small group of powerful bankers designed the Federal Reserve and it was passed into law in the dead of night on December 23, 1913 with 27 Senators not even in Washington D.C. to vote on the bill. Something done this secretively never leads to a positive outcome. It is beyond question the creation of a private lender of last resort has not ended the boom and bust cycles of our economic system, but it has intensified and protracted them.

The Great Depression, which was precipitated by Federal Reserve easy money policies during the 1920s, Federal Reserve missteps in the early 1930s, and FDR driven government intervention in the markets, began in 1929 and did not truly end until 1946. The easy money Federal Reserve policies during the 1970s, along with Nixon’s closing the gold window, and commencement of our welfare/warfare state, led to a prolonged crisis from 1973 through 1982. The Federal Reserve easy money policies in the late 1990s and early 2000s, along with the repeal of Glass Steagall, belief that bankers could be trusted to regulate themselves, and capture of regulators, rating agencies, and politicians by Wall Street, has led to two prolonged epic busts between 1999 and 2009, with the biggest bust still coming down the track. Putting our trust in a secretive society of bankers has worked out exactly as expected, with bankers and their cronies becoming obscenely wealthy, while the average person has seen 96% of their purchasing power inflated away since the Federal Reserve’s inception.

The illusion of prosperity through debt and inflation does not change the fact that the inflation adjusted wages of blue collar manufacturing workers are lower today than they were 40 years ago. Luckily for your owners, 98% of Americans don’t know or care what the term “inflation adjusted” means. As long as they can keep buying stuff with one of their 15 credit cards, life is good. Ignorance is bliss.

aheman cpiaucns100 1930 to 2012

The debate regarding whether markets should be allowed to correct themselves or be saved by the authorities has transcended the centuries. Kindleberger poses the dilemma succinctly:

    “There is of course much truth in these contentions, and some danger in coming to the rescue of the market to halt a panic too soon, too frequently, too predictably, or even on occasion at all. The opposing view concedes that it is desirable to purge the system of bubbles and manic investment but that a deflationary panic runs the risk of spreading and wiping out sound investments that may not be able to obtain the loans necessary to ensure survival.” – Charles P. Kindleberger – Manias, Panics, and Crashes [3]

The lack of historical understanding and politically correct education doled out in public schools perpetuates the myth that Herbert Hoover was a do nothing non-interventionist that allowed the Great Depression to worsen because he refused to intervene. The truth is that FDR just continued and expanded upon the massive intervention begun by Hoover. It was Hoover, not Roosevelt, who commenced the policy of piling up huge deficits to support massive public-works projects. After declining or holding steady through most of the 1920s, federal spending soared between 1929 and 1932, increasing by more than 50%, the biggest increase in federal spending ever recorded during peacetime. Public projects undertaken by Hoover included the San Francisco Bay Bridge, the Los Angeles Aqueduct, and Hoover Dam. His description of the advice of his Treasury Secretary has been passed down to the ignorant masses as his actual policy. But it’s another false storyline propagated by the mainstream media.

    “The leave-it-alone liquidationists headed by Secretary of Treasury Mellon felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.’ He insisted that, when the people get an inflationary brainstorm, the only way to get it out of their blood is to let it collapse. He held that even panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.” – Herbert Hoover [6]

In retrospect, Andrew Mellon’s advice, if followed, would have resulted in a short violent collapse, with a true recovery within a year or two (aka Iceland). This exact scenario had played out over the prior three centuries, as detailed by Kindleberger. The monetary intervention, tariffs, mal-investments, price controls, intimidation of businesses, and overall interference in the markets kept a true recovery from happening. Unemployment was still 19% in 1938, after years of stimulus. It wasn’t until 1946 that the U.S. economy started a real recovery, and that was due in part to the rest of the world being left in a smoldering ruin.

Based on the catastrophic results over the last hundred years, you would think the non-interventionist view on markets would be gaining traction. But, the interventionists gain even more power as they propose and implement more resolutions to the disasters they created with their previous solutions. The belief in the wisdom and ability of a few men to control the levers of a $70 trillion world economy for the good of the many is staggering in its naivety and basis in delusion. “Experts” can barely predict tomorrow’s weather, this month’s unemployment rate, the value of Facebook stock, or the next $5 billion snafu from the Prince of Wall Street – Jamie Dimon. But, we trust that Ben Bernanke, his fellow central bankers, and bunch of political hacks like Geithner know how to micro-manage the world economy.

Kindleberger understood exactly the risks in having an institutionalized lender of last resort:

    “One objection to helping either the borrowing banks and industry or lending to capitalists abroad was that it made both less prudent. In the insurance area this effect is called “moral hazard.” It is a strong argument for letting a financial crisis recover by itself, provided one is willing to take a long term view and worry equally, or almost equally, about a future financial crisis, as opposed to the present one. It requires a low rate of interest for trouble.” – Charles P. Kindleberger – Manias, Panics, and Crashes [3]   Link to full article and many useful charts
http://feedproxy.google.com/~r/fso/~3/YtTAJLoK1CU/a-matter-of-trust-part-two        :icon_study:



Offline g

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Re: Gold & Silver News: A High Frequency Attack on Gold
« Reply #29 on: August 09, 2012, 05:19:46 PM »
The swill are getting bolder and bolder with their manipulations and flaunting of their computer weapons of robbery and intimidation. The authorities kiss their asses for campaign money and jobs.


A High Frequency Attack on Gold
By Dimitri Speck
Created 9 Aug 2012

On June 7th, 2012, the price of gold dropped by $22 in less than a second, guided by a computer algorithm during late trading

Sharp price drops in gold, for example $10 within a few minutes, can be observed frequently. Often they occur several times per week. The decline that happened on June 7, 2012 looks, at first glance, like such a drop as well, although some observers immediately noticed the extremely high speed. Market reports assessed the timeframe from “43 seconds” to “less than 5 minutes”. According to spot price data with minute precision, the decrease was $20 in less than 2 minutes. The intraday chart below shows the price development in the spot market on June 7, 2012. The relevant decline is marked in red.

gold intraday 7 jun 2012 [1]
Fig. 1
A High Frequency Attack

However, what took place in the late evening hours of June 7th on the futures market is of a wholly different quality. As part of the CME Group, COMEX is the largest exchange for gold futures contracts. The exchange records each single trade with the exact time, price and quantity. These records are called Times & Sales report and are available from the CME. They reveal for June 7, 2012 for the period of one second, namely at 9:21 PM and 20 seconds CDT, a complex price attack in the high frequency range which can be performed only by specially programmed computers.

During that one second 501 prices were determined, among them 490 with volume, while during all other 3599 seconds of this trading hour on average only 1.87 trades per second were registered. In this one second the number of trades suddenly rose 260-fold! Figure 2 shows an excerpt of the Times & Sales report with the start of the relevant second for the most active August contract.

future exchange provides times and sales with all trades          Many interesting charts and proof with time sales data for the technically proficient in full article.           http://feedproxy.google.com/~r/fso/~3/EhBFye-rerw/a-high-frequency-attack-on-gold                                                                                     
                                                                                                                                            :icon_study:

 

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