Sunday, November 28, 2010

Bits of News

Korea Tensions send Gold to a 27 Year High (quoted in Yen)
and what does China say? --It warns the U.S.
China calls on the U.S. to sell its Gold Reserves (China wants all it can buy!)
Russia & China agree to using Yuan/Rubble in bilateral Trade (a step towards ending Dollar Supremacy in International trade)
Russia wants a trade Zone with Europe, even hinting they'll join the Euro, this will only happen when they can agree on the 'value' of a 'Euro' no doubt backed by a combination of Gold, and/or silver or other hard assets
China can't keep its currency pegged to the dollar without stoking inflation, as the USD depreciates in value, prices rise in China.
Japan Passes a 5.1 Trillion "Stimulus" package
The Ireland 'Bail Out' by the EU and IMF should be concluded tomorrow, and bonds are pricing in that Portugal and Spain, and Italy may follow suit. This all money printing.

Monday, November 15, 2010

Public sector now 53% of economy as record 6.09million Britons work for the state


The public sector has ballooned under Labour to make up more than half of the economy.
State spending now accounts for 53.4 per cent of gross domestic product (GDP) compared to 40 per cent when Labour came to power in 1997.
Britain's public sector is now bigger than the European Union average of 50.4 per cent, according to the Organisation for Economic Co-operation and Development figures.

Wednesday, November 10, 2010

The Fed's Foreign Policy Misstep -Excerpt from the CFR (Council on Foreign Relations)

    The Fed's return to quantitative easing threatens to create a glut of liquidity reminiscent of the mid-2000s savings glut. It is likely to inflate bubbles, notably in the fast-growing emerging world.
    As well as harming the U.S.’s ability to take the high ground with China, quantitative easing will test the world's commitment to an open international economy. Already, countries from Brazil to Thailand have responded to the flood of incoming capital by imposing controls and taxes, retreating from the idea of financial globalization. To make capital controls stick, these countries may find they need to intervene heavily, policing the activities of multinational companies that are suspected of funneling capital illicitly between subsidiaries. Likewise, the new capital controllers may demand the right to police trade invoices, since over- or under-invoicing is a time-honored method for circumventing capital controls.
     None of this might matter if next week's G20 summit were on track to succeed wonderfully. But the Fed's super-loose policy is straining the international monetary order at a time when the spirit of international cooperation looks particularly limp. Across the rich world, leaders have been weakened by a sluggish economy that has dragged down their poll ratings, undercutting their appetite for making unpopular concessions to foreigners.
     Even before the Fed's action this week, there was much loud talk of currency war. This now seems sure to intensify, and the United States has lost its moral authority to broker currency peace.
    Full Article Here:

Tuesday, November 9, 2010

Grant Says Quantitative Easing Is Just Money Printing

Great Video! Intellectual Hygiene; its Money Printing --drop the QE PHD Approved Euphemism

Oct. 8 (Bloomberg) -- James Grant, editor of Grant's Interest Rate Observer, and Neal Soss, chief economist at Credit Suisse Holdings USA Inc., talk about the outlook for Federal Reserve monetary policy, the labor market and the dollar.

2010-11 Updates

The banks have still not heavy reduced their short positions, they are still holding them, but at about a $300 Million loss per $1 rise in silver price.

574 Silver Contracts (each 5,000 oz) posted for delivery in November.

This shows the details of how much is left at the exchange ware houses

From now on I'll divide all of these into the four different categories
1. Regulatory Changes (Manipulation, Law Enforcement, Law Suits etc)
2. Investment Demand (Paper Vs Physical, Global Precious Metals ETF etc)
3. Industrial Demand
4. The Future

 1. Regulatory Change

JP Morgan and HSBC Face RICO Charges in Silver Futures Class Action Lawsuit  Banks alleged to have used naked short-selling to rig market NEW YORK, Nov. 3, 2010 /PRNewswire/ -- JP Morgan Chase & Co. (NYSE: JPM) and HSBC Securities Inc. (NYSE: HBC) face charges of manipulating the market for silver futures and options in violation of federal commodities and racketeering laws, according to a new lawsuit filed Tuesday in the U.S. District Court for the Southern District of New York.

Kaplan Fox Sues JP Morgan and HSBC on Behalf of Investors
for Silver Futures and Options Contract Losses Caused by Market Manipulation

NEW YORK -- On November 2, 2010, Kaplan Fox & Kilsheimer LLP (, a leading plaintiffs' firm, filed a class-action complaint in the U.S. District Court for the Southern District of New York on behalf of an individual investor against JP Morgan Chase and HSBC in connection with their alleged conspiracy and manipulation of the market for silver futures and options contracts traded on COMEX.

Ron Paul vows renewed Fed audit push next year

2. Investment Demand

Central banks in past were net sellers, now they are net buyers!
No need to gold imports for a decade, Iran says
TEHRAN, Oct. 30 (MNA) – Iran has changed some 15 percent of its foreign exchange reserve to gold stocks and there is no need to gold imports for the next ten years, Central Bank governor Mahmoud Bahmani said here on Saturday.

CHINA is a buying all domestically produced gold, encouraging their citizenry too as well.One alternative for China is to declare itself the buyer of last resort for gold, i.e. it will buy all that is offered for sale at their specified dollar price.  This is not going on the gold standard, but rather, it’s a hijacking of the valuation process for both the dollars and  gold.  To implement such a policy, they should currently be busy secretly buying all the gold they can.  When their buying finally attracts world attention, they would announce the new policy.  With the announcement would also be the setting of this month’s dollar denominated benchmark gold price.  As frequently as they need to, they can ratchet this price upward to preserve the buying power of their combined gold/dollar reserves or to gain other advantages yet to be discovered.


Cramer Is A Goldbug, Says His Retirement Fund is 'Almost Entirely Gold' (GLD, GDX)

November 4, 2010 3:12 PM EDT,+Says+His+Retirement+Fund+is+Almost+Entirely+Gold+%28GLD,+GDX%29/6078056.html

Hong Kong launches first local gold fund

HONG KONG (MarketWatch) — For Asians unnerved about a global currency war, a new weapon is about to emerge: a gold exchange-traded fund that stores its bullion in Chinese vaults. 

4. The Future
There will be more bailouts in the future, probably of the banks, most likely through the FED (in Europe the ECB) rather than through the legislative side. Right now they are walking a fine line with the all residential and commercial
MBS they hold on their assets sheets. FASB changed the accounting rules (Mark-to-Market) at the beginning of the crisis to allow the banks to 'value' these securities at what they wish.

Bank of America Edges Closer to Tipping Point: Jonathan Weil

Mortgage-bond investors are demanding untold billions of dollars in refunds. The foreclosure fiasco is metastasizing. A member of the Troubled Asset Relief Program’s oversight panel, AFL-CIO attorney Damon Silvers, openly worried at a hearing last week about the risk that Bank of America might need another bailout.

Irish banks, bonds hit as EU eyes survival plan

Irish bank shares hit new lows, bond yields new highs as EU eyes Ireland's survival plans

World Bank president open on the idea of a gold standard

LONDON (Reuters) – The advanced economies should consider adopting a modified gold standard to guide the exchange rate, the World Bank group president, Robert Zoellick, said on Monday in an unexpected proposal before the G20 summit.

* Urges return to gold standard

Wednesday, November 3, 2010

Pushing on a String: Fed Fires $600 Billion Stimulus Shot .

The 'debt' based economy is still the satus quo that is being protected. --receiptents of fixed incomes and savers be damned!

So here we have another round of QE (there will be more!)  $600 Billion more should buy some more time.

As long as the medicine of QE continues asset prices may inflate but look at this chart which shows the current rally in stocks (S&P index) quoted in Oz of Gold

There is a certain point of no return, where you get little return for the increase in debt; Saturation point;

Monday, November 1, 2010

COT/how many days Commercials have presold

Here is the updated numbers on how many days of the worlds annual production the commercials have 'sold' (gone short) to the worlds markets, notice the HUGE, disproportionate position they have taken in silver, the red line (4 Largest Commercials) is also part of the green line (8 largest).

CFTC Chairman Chilton lets loose: Fraudsters deviously rig silver prices".

Here is the statement from the CFTC website;

A Few other related articles;

 Oct 26 (Reuters) - There have been repeated attempts to influence prices in silver markets, Bart Chilton, a commissioner at the U.S. futures regulator, said on Tuesday.