Silver Breaks Its Golden Shackles

On September 21, 2010 I published an article entitled “More Forensic Evidence of Gold & Silver Price Manipulation”. In that article I showed how silver from 2003 to 2010 had never traded freely at all; I showed that silver was algorithmically traded with gold and there was a very clear relationship between the price of gold and the price of silver. For those who haven’t read the previous article the following figure 1 (figure 4 in the previous article) demonstrates the inter-relationship.

Figure 1 Cross-plot of Silver versus Gold 2003-2010

Figure 1 is a cross-plot of the price of gold against the price of silver for every trading day from June 2003 to September 2010. There are two linear relationships, one is pre-2008 (black line) and the second is post 2008 (green line). The best fit equations for the two data sets are also given on the chart.

The stunning revelation from the data analysis was that if on any day I knew what the price of gold was I would be able to calculate the silver price from the equation of the relationship! How is that possible in a free market? It simply is not possible and so the conclusion is that silver is not in a free market but is manipulated to move algorithmically with the price of gold. I have written many articles that show that gold is itself manipulated and suppressed (for example, see Gold Market is not “Fixed”, it’s Rigged)

I have updated the chart of Figure 1 which is shown in Figure 2.

Figure 2 Cross-plot of Silver versus Gold 2003-2011

Since September 2010 silver has broken its golden shackles. The algorithmic trading that kept the price of silver subdued for seven years has been completely annihilated.

On Friday silver closed in complete backwardation on the Comex. Spot silver closed at $29.075/oz while FEB 2011 closed at $29.064/oz and DEC 2015 closed at $29.026/oz. I believe this is the first time in history that this has happened. Silver traded in backwardation between the spot price and futures contract up to one year out during the blatantly manipulative precious metals bashing of January, but now the entire futures structure is in backwardation. This is a sure sign there are shortages of silver because it means that buyers will pay a premium for silver delivered sooner rather than later.

Signs of shortages have also been apparent from a shrinking silver inventory on the Comex in the face of rising prices. The registered inventory stands at a paltry 43 Mozs. In addition there is lots of anecdotal evidence that there are tight supplies everywhere. There are reports of refineries refusing to take new orders due to insufficient silver feedstock.

News out of China recently showed that China's net imports of silver quadrupled in 2010 to 3,500 tonnes (112 Million ozs). China has traditionally been a silver exporter. For example, in 2005 China made net exports of 3,000 tonnes of silver.

The US mint reported last week a record month in silver eagle sales in January of 6.4 million ozs.

This update of my previous work adds more fuel to the fire that the dynamics of the silver market have dramatically changed. Because silver has been suppressed for so long we do not know what its free market price should be, but we are going to find out soon and I strongly suspect it will be many multiples of the current price.

Source: http://news.silverseek.com

"Unbelievable" Gold Demand" Stuns China Traders

The volume of Chinese citizens' purchasing of gold running up to the start of the Chinese New Year has completely stunned traders leading to big price premiums in Shanghai.
Consider the following paragraph from London's highly respected Financial Times - a publication not usually prone to hyperbole: Precious metals traders in London and Hong Kong said on Wednesday they were stunned by the strength of Chinese buying in the past month. "The demand is unbelievable. The size of the orders is enormous," said one senior banker, who estimated that China had imported about 200 tonnes in three months.
Now China has already reported a five-fold increase in gold imports over the first 10 months of 2010 and if the estimate quoted above is correct the country may well be seen to have imported upwards of 320 tonnes in the full year which brings the total to within a hairsbreadth of Indian imports - and India has for many years been the world's largest importer of gold by a considerable margin.  If Chinese gold purchasing momentum continues at anywhere near close to current levels it will soar past India as the world's largest importer of the yellow metal this year.
The FT quotes UBS gold strategist Edel Tully as commenting that not only is China on the fast track to replace India as the largest physical consumer of gold but that now the Chinese New Year holiday, which starts tomorrow, has already become significantly more important than India's Diwali Festival in gold buying volume terms.
What is perhaps being ignored by many investors who have been liquidating gold holdings in the U.S. in particular where there is a growing, but perhaps unwise, perception that the stock market is on a roll again, is the burgeoning, and seemingly accelerating, strength in Asian demand.  As fast as investors are selling their gold ETFs in the U.S., the Chinese and other Asian nations are snapping up the physical gold which thus becomes available again.
Indeed in some parts of Asia, gold has been selling at a strong premium over and above the London price - as much as a $20 an ounce premium is being reported as applying recently in Shanghai, although now the Chinese New Year holiday itself gets under way the demand strength is expected to slip a little.  Nevertheless Chinese observers expect buying to surge again once the holiday is over.
With China having been the world's largest producer of gold for the past several years now, with output rising each year, if we add this to the perceived import levels China will have consumed close on 650 tonnes of gold in 2010 - around 25% of estimated global mined production on its own - a remarkable statistic.  China, India and other southeast Asian countries together will thus be absorbing around half of global newly mined gold output and for the moment this demand is not just rising, but rising fast, with the Chinese, Indian and several other Asian nations' growth rates rising at close to 10% per annum or more.  Those analysts out there who continually harp on about gold's fundamentals not supporting current price levels, let alone further rises, seem to have totally missed this point
 
Source: http://www.mineweb.com

Yuan Trying To Replace The Dollar As The World’s Reserve Currency

In a move that provides a glimpse of the future of US dollar and gold, China has allowed its currency to be traded for the first time in the United States. This is a bullish sign for gold investors. It is an important step in the country’s plan to make the renminbi an international currency. The explicit move is an endorsement by Beijing since the state-controlled Bank of China Ltd is at the forefront of this development. Although a floating currency allows price moves in both directions, it is general consensus that the renminbi will strengthen against the US dollar due to trade imbalances between the two countries. The impact on commodity markets, including gold, will depend on the extent and speed to which China allows its currency to rise.

The impact of a free floating yuan will affect commodities in three angles: economic strength and prospects of global recovery, direct impact on trade of commodities to and fro China, and the broader knock-on effect on commodity demand.

Bank of China Expectations

According to Li Xiaoping, the general manager of Bank of China’s New York brand, “we’re preparing for the day when renminbi becomes fully convertible.” He added that the bank’s goal is to become the “renminbi clearing center” in the United States. Right now, the yuan is still tightly controlled by the government. Until the middle part of last year, the buying and selling was confined to China and was under tight capital controls. It was in July last year that the government allowed the currency to be traded in Hong Kong. Its volume has since ballooned to $400 million from a base of zero.

The move by Bank of China comes at a time when the United States is pressuring the country to let its currency appreciate, blaming it for making US trade deficit worse. It should be noted, however, that Beijing’s preparation for convertibility also hints at the strength of China’s economy. It is the second-largest national economy in the world. To be recognized as a global power, it should also have a global currency.

Although individuals and businesses in the United States can trade yuan in Western banks like HSBC Holdings, this is the first time that China has allowed a Chinese-controlled bank to engage in similar activities. This is a stamp of approval on renminbi trading. However, the Bank of China puts a limit of $4,000 per day (and $20,000 per year) on the amount that a US-based person can convert. This restriction is basically in place to minimize currency speculation. There is no limit on the amount that businesses can convert as long as they are engaged in international trading. In addition, the Bank of China places no restriction on the amount of yuan that can be converted back to dollars.

Growing Openness in Beijing

The decision of allowing open trading of the yuan can be traced back to Beijing’s growing openness to currency liberalization. I have talked in a previous blog about China’s (together with Russia, France, and other countries) intension to create a basket of currencies to replace the dollar. But “China has a long way to go before it has a fully convertible currency, and this is an inching step forward,” according to Robert Sinche of RBS Securities in Stamford, Conn.

Some analysts expect that in a few years, 20-30% of the country’s transaction will be conducted in yuan instead of dollars (the figure is less than 1% today). Take note that as China becomes more proactive in pushing its currency, every one US dollar worth of contracts may be replaced by yuan. In addition, for every seven yuan that is purchased on the international foreign exchange, it is replacement one US dollar. There is also a perception that the renminbi is stronger than the dollar is growing.

If you look further down, the impact of using the yuan as an international currency won’t be positive for the US dollar since it will no longer be used as widely for international trade. The money will add to the home money supply. This will have a lot of ramifications in the global economy.

There are skeptics who doubt its growth potential, however. For example, some say that growth will be checked due to new regulations. Last month, the Hong Kong Monetary Authority placed restrictions on banks’ ability to provide yuan-related products in the territory. Analysts believe the regulations are designed to keep speculators from betting on the currency’s movement, which can potentially cause massive disruptions to the economy. A more immediate obstacle to growth is lack of demand among American businesses, majority of which still use the dollar for cross-border transactions. Some people also believe that China may back track if this proves to be the wrong move. What Beijing is interested in, at this point, is measured growth in yuan trading.

A lot of investors are looking into buying yuan as a form of investment, seeing it as a sure bet. Chinese officials have stated that they will allow the currency to appreciate. The only question here is the pace of appreciation. Another aspect to look into is bank fees as these tend to be high for yuan accounts.

The Chinese renminbi has appreciated by 3.3% against the US dollar last year. Beijing loosened the currency’s peg to the dollar during summer. But the gains stalled after the world’s major economies met in November for the Group of 20 summit. In response to the renminbi appreciating Ron Fricke president of Regal Assets stated “worldwide the greenback is losing confidence as the world’s reserve currency and it is only a matter of time before it is replaced.”

Chinese Demand for Gold

In a previous blog, I have talked about the increasing gold demand from China. This will impact global gold prices because most will be imported. Right now, the premiums for gold bars for spot delivery is skyrocketing and the end is not yet in sight. Some trends that can be observed in China include rising food inflation and the rising levels of general inflation. The phenomena may be the result of urbanization shifting productivity from the countryside to the cities. While inflation may play some part in rising demand for gold in China, it is not the driving force behind it. As the country’s capacity continue to increase, its middle class investors are growing – many of them are turning to bank deposits and gold because it is perceived to be “safe”. The government itself also has a massive demand for the bullion.

 

Source: http://goldcoinblogger.com

The Manipulation Behind Gold And Silver Prices

A strange start to the year and a strange end to a volatile week, so we take a whiz across the air waves in order to get a ‘feel’ of what’s going on, so this will be a mixed bag of data. The first eye catcher is this: Eric Sprott: Expects $50 for Silver, and for gold possibly $2,150 by Spring 2012.

Eric Sprott recently launched a silver fund and so entered the market to acquire 15 million ounces of physical silver. To his surprise, it wasn’t readily available and in fact it took 10 weeks to get his order filled. Another order placed for 1 million ounces has been given a delivery period of around 2 months. The silver that he received looks to have come directly from the refiners; it is that new. This also tells us that that the supply side is indeed very tight. On the subject of China, Eric drew listeners’ attention to this interesting dynamic: In 2005 China exported 100 million ounces of silver. Fast forward to 2010 and China imported 100 million ounces of silver; that’s a 200 million ounce turnaround in an 800 million ounce market.

Other influential factors:

One of China’s major banks has offered its customers a facility whereby they can save a portion of their savings in gold. Since the offer, the bank had to open one million accounts, which required 10 tonnes of gold to satisfy the demand. Sprott ponders the outcome: What if this idea were to spread throughout China and further afield, say to India? What is the effect if we get an extension to QE2 or even a QE3? What about the possibility of a trillion dollar fund, an idea that is being considered at the current meeting at Davos? What about the impact of the U.K., where economic confidence remains rather weak? The Bank of England supremo, Mervyn King talks of the U.K. being in a depression. Over in the United States, the social security department has announced a $45 billion overspend for 2011.
So, there appears to be no hiding place as the currencies vie for position in a race to the bottom. Rallies are no longer based on the merits of individual currencies, but rather just how slowly the other fiat currencies are falling apart.

In India, China, Asia and many other countries throughout the world, the concept of receiving money for doing nothing is laughable. For the western world to remain remotely competitive, welfare, social security, bailouts, handouts, freebie benefits are existing on borrowed time. You have been warned. Securing your own financial independence has now reached a critical stage; think, plan and implement new ways to supplement your income.

Now, just what was the reason for gold prices taking a dip recently? We take a quick look at a possible scenario as proffered by Zerohedge from an original piece in the WSJ: Over the past several weeks there had been rumors that the reason for the precipitous drop in gold was primarily driven by a hedge fund liquidating its futures positions. This has now been confirmed: “Yeah, that was just me liquidating my spread position,” Mr. Daniel Shak, [of SHK Asset Management] 51 years old, said in an interview. “I had a significant, fully margined position. The dollar amount of the gold liquidation was very small, it was just a lot of contracts.”

Of course, in the extremely jittery gold market, the kind of persistent marginal gross selling of contracts was all that was needed to spook weak hands into a consistent dump of the precious metal (which as we pointed out, was beyond overdone).

Judging by Monday morning’s jump in the Precious Metals complex, SHK’s liquidation is now not only over but about to promptly reverse as daytrading momos realize they were duped by one single guy. Look for gold to resume its upward advance as investors realize that the gold dump was nothing more than an ongoing futures position liquidation.

A huge trade by a tiny hedge fund has sent shudders through the gold market.

Thanks to the nature of futures trading, Daniel Shak’s $10 million hedge fund held gold contracts valued at more than $850 million, more than 10% of the main U.S. futures market, and the equivalent of South Africa’s annual gold production. It just goes to show how sensitive this market can be when the above action has such an impact. No doubt there are other contributing factors that also gave weight to the movement in gold prices, but this will suffice for now.

While Italy could be the next candidate for a bailout, despite the soothing words from the Eurocrats… investor appetite for gold will move gold further North. All in all, in a report from Barclays Capital, while exchange-traded-fund holdings of gold fell in January, Asian gold premiums nevertheless remained strong. Barclays said that Asian gold premiums have hit record highs last month. The bank said that gold premiums rose as consumers in China purchased ahead of the Chinese New Year, Indian consumers bought gold ahead of the February wedding season and demand was supported by the re-emergence of geopolitical concerns.

 

Source: http://goldcoinblogger.com

Gold Has Cleaned Up Its Act And Washed Out The Weak

I am constantly amazed at the gold (and silver) bashers who, if they are not economically illiterate or challenged, must be shills for the propaganda machines. This government and those in Europe are pulling out all the stops to indoctrinate the people that wealth can only be measured in terms of fiat currencies. They’ll make you cry they’ll make you laugh while they hypnotize you with words about a staff of humble beginnings! One of the truly a funny moment to me in President Obama’s speech, which I assumed was to be a turning point to have confidence in our government is, when he almost made Boehner cry as he spoke of his and Biden’s humble roots (as if that takes much effort to make Boehner cry). It is a mistake to not acknowledge Obama’s gift of deep empathy. Paul Ryan I think had the winning message of the evening when he said that government plays an important role in setting the stage–but ultimately our nation’s greatness rests in the “importance of limited government” and the “blessings of self-government.”

If all that was said in that speech was true, then why do we see an increasing distrust of any government pronouncements these days when they say, who has come from humble roots. WHO HAS NOT? Even the silver fed, had come from roots of humbleness from a gold invested relative! Meanwhile…here are some facts about gold. The “capitulation” in gold that drove the metal to its worst January in 14 years may be ending as escalating violence in northern Africa spurs demand for a haven and after a key technical indicator held.

“The capitulation is over,” said Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago, who correctly predicted in September that the metal would keep rallying to $1,350 an ounce after reaching a record. “The liquidation has washed out the weak trades and put gold at a point that looks attractive to new buyers.”

While futures fell as much as 8.1 percent this month, they are still 24 percent higher than a year ago. The metal has risen for 10 consecutive years in London trading, the longest winning streak in at least nine decades. That’s attracted investors including John Paulson’s Paulson & Co. and George Soros’s Soros Fund Management LLC. Paulson has denominated some share classes of his funds in gold, something that at least doubled their gain last year relative to the dollar-denominated shares, according to a performance report sent to clients this month.
Gold’s rebound from the 150-day moving average of about $1,306 is a sign that prices are poised to rally, said David Hightower, the president of the research firm based in Chicago. The metal may climb to $1,630 by the end of June, he said.

150-Day Moving Average

Prices rebounded from the 150-day moving average three other times in the past year, data compiled by Bloomberg show. The last time gold traded near the average was in late July. Since Aug. 1, prices have advanced 13 percent. They touched a record $1,432.50 on Dec. 7. The metal has not fallen below the average since January 2009.

“People take these longer moving averages as a key measure of confidence,” said Hightower, who correctly forecast that gold would rally above $1,400 last year. “Gold has respected the 150-day average in the past. By repelling from that level, it suggests that gold has value, and that the bull camp was not scared and forced out of their positions.”

The metal’s 14-day relative strength index, a gauge of whether a commodity is overbought or oversold, was at 31.7 on Jan. 27, the lowest level since October 2008. Some analysts view a level of 30 as a sign that prices may be poised to jump.

Trading Patterns

In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. On Jan. 28, gold futures for April delivery rose $21.90 to $1,341.70 on the Comex in New York as stocks worldwide plunged the most since November because of the violence in Egypt. Earlier, the most-active contract touched $1,309.10, the lowest since Oct. 1. The metal has dropped 5.6 percent this month and reached a record $1,432.50 on Dec. 7.

Gold fell this month as hedge funds cut their bets on higher prices. In the week end Jan. 25, three days before prices rebounded on the violence in Egypt, net-long positions dropped 3.6 percent to 129,664 contracts on the Comex, the lowest since May 2009, U.S. Commodity Futures Trading Commission data show. It was the fourth consecutive weekly drop, the longest decline since November.

Reduced Bets

Investors in exchange-traded products backed by gold also reduced their bets. Combined holdings across ETPs from 10 providers were at 2,033.8 metric tons by Jan. 28, the lowest since June, according to data compiled by Bloomberg. That’s still more gold than all but four countries’ official reserves, data from the World Gold Council in London show.

The metal’s decline this month is “a healthy break,” Hightower said. “Gold has cleaned up its act and washed out the weak hands.”
This month’s decline in prices has precedents in the decade-long bull market. Futures slumped about 8.5 percent in the five weeks to July 28 and almost 15 percent in a two-month stretch that ended in February 2010. There was also a 34 percent retreat from March 2008 to October of that year. Prices have more than doubled since then.

“The short-term negative sentiment in gold will be dramatically curtailed,” said Jon Spall, a product manager for precious metals at Barclays Capital in London, who expects the commodity to reach $1,700 this year. “Gold is a great hedge against financial uncertainty,” Spall said. “Nimble money gets in and out, but there are still plenty of people with long-term interest in gold.”

 

Source: http://goldcoinblogger.com

The Truth about Gold Correction, and its Monster Move North Again

Beware of the point when the U.S. Federal Reserve ends the cheap-money mindset that’s fueling the Economy… That uncertainty will bring the best opportunity for Gold! The majority of economists and strategists are now telling anyone who will listen that, the economic recovery is now normal, and are trumpeting this view to jump-start the stock market. They are confidently asserting that “the new normal” concept popularized by Pimco is now a moot issue. 

In fact, there is nothing in the major economic indicators to indicate that the current recovery is anything other than anemic recovery. Asians these days say US is in depression and it’s only a matter of time before it gets declared officially. What is told and shown to the public about gold, and what actually is, is hidden manipulation of its worst kind. Let’s not be a gullible bunch! A very famous banker once said :” BUY WHEN THERE IS BLOOD IN THE STREETS”!

While we have unemployment at a historical level and the debts of various states and counties are teetering on bankruptcy, the Federal Reserve balance sheet filled with toxic mortgage crash, the American army is overextended in 720 bases while also fighting unpopular wars in Iraq and Afghanistan, America has to borrow from China to finance its own house, corporate debt is high, private debt is astronomical, the dollar has lost 96% of its value since 1913……. and the fools tell you to pile up some more PAPER ASSETS!

Economy, economics…play their role on Gold as God’s more than ever before! While Gold operates in a society full of economic traps and snares, one has to have a sense and sensibility for it or falter. Some things are just too important to leave to the Economists—and that is the Economy, itself!

Funny thing, since Russia said they will take control of physical gold they have purchased, gold and silver have been going down. Could the Central banks be pushing the price down so they can purchase the required amount for Russia?

It also took a hedge fund manager over two months to get his physical silver from the bank holding it. Hmmmmm, do you think Central banks are trying to scare people out of their gold and silver so they can fill their orders?

Bernanke and other central banks have not pulled money out of the market yet. Ben kept interest rates the same. FOMO bought more bonds today, just like every day. SO what has changed? China’s domestic gold market hasn’t. It’s actually facing supply shortage as the gold demand continues to surge amid the upcoming traditional Chinese Spring Festival. A statistical report earlier released by the World Gold Council showed that the gold investment demand has become the dominated factor affecting the gold prices after the global financial crisis. The global gold demand still remains strong, said the report. And will be even stronger after the veil is lifted off Gold!

During the first three quarters of last year, developing countries, including China, India and Russia, have present huge demand for gold. The world largest gold-backed Exchange Traded Funds has cut 31.26 metric tons of gold recently, bringing its gold reserves to the lowest in the past five months. Gold and silver have been some of the best performing asset classes for the past 10 years! The dow is flat, has been at the same level since 2000s, unadjusted for INFLATION!

Utter nonsense! BUY GOLD, RACK UP ALL THE SILVER YOU CAN LAY YOUR HANDS ON! The Indians are buying, the Chinese are buying, the Japanese and Russians are buying, and the world is buying! There is shortage of the physical stuff, the real stuff! Even dictators in Tunisia know about it!

While enjoying the QE2 inflated stock markups, those of sense and sensibility know the reality. The simple fact that we live in an ‘ artificial” monetary system, based on government issued fiat monies should be a reason enough for smart individual to buy gold! Beyond that fact; our recent history shows that governments will not relinquish any means to save themselves and their corporate acolytes; aka quantitative easing! This is the fundamental reason behind our recent surge in price inflation. What is the point of having a DOW at 20,000 if the price of oil is at 200 a barrel and a loaf of bread is 10 dollars? Does that really matter? That’s my “contrarian paradigm.” Blood in the street has to do with food riots, price inflation, and overvalued securities already happening in the Middle East and South Asia! Undervalued commodities are still being disregarded despite the fact that they have been outperforming other asset classes for 10 years! Holding real hard assets such as gold, silver, platinum, palladium and a whole set of commodities that have been doing much, is much sensible than paper assets!

The yen fell sharply against both the U.S. dollar and the euro on Thursday after Standard & Poor’s cut Japan’s long-term credit rating while the increased prospect of rising European interest rates weighed on commodities. Wall Street stock indexes held near 29-month highs, boosted by strong earnings from companies like heavy equipment maker Caterpillar Inc (CAT.N: Quote) , news that also supported European equities.
Standard & Poor’s cut Japan’s rating one notch to AA-minus, citing the country’s ballooning deficit, which it said will further reduce Tokyo’s already restricted fiscal flexibility. The move will have a limited impact on Japan’s ability to raise money on financial markets, but it raised a red flag with investors about other leading countries’ fiscal imbalances. “It is reasonable to expect that the Japanese downgrade will raise concerns over the sovereign rating of the U.S.,” said Vasileios Gkionakis, macro strategist at Fulcrum Asset Management LLP in London, which oversees $900 million in assets.

The euro’s gains were sharply curtailed against the U.S. dollar on profit taking and a rebound in the greenback based on lower gold prices. Commodity prices were mostly lower as the prospect of rising interest rates in Europe grew after European Central Bank member Lorenzo Bini Smaghi said an expected rise in imported goods inflation could not be ignored. [ID:nFLARCE7IJ]

“The ECB has started to show more concern about secondary price pressures, and the market has acknowledged that,” said Gavin Friend, currency strategist at nabCapital.

Bini Smaghi’s comments went to the heart of current investor concerns, highlighting the potential for inflation to prompt central banks to raise interest rates at a time when low rates are seen as key to boosting renewed economic growth.

Now, as of this morning I was also informed through a Bloomberg article that the Financial Crisis Inquiry Commission has faulted the Fed for lax mortgage regulation helping lead to our most recent financial crisis. Talk about the tip of the iceberg. The article also informed me that Mr. Alan Greenspan declined to comment on the Commission’s findings, as did his spokeswoman, Katie Byers Broom. When Fed spokeswoman, Michelle Smith, was asked to comment she also declined, saying that she had not seen the report yet. Funny, isn’t it? I am sure that Mr. Greenspan did not want to comment on the Commission report because it might raise questions about the significant role he played in our current debacle. It might also raise questions regarding the significant level of consulting fees he is earning for warning us now about the risk associated with the type of Debt Buildup that he created during his realm. I am still baffled, how do these people keep getting away with it!

Based upon what we all know, doesn’t it make you wonder who is paying our ex-Great Economist for his advice these days? And why the television networks still bring him on for his insightful vision? Talk about a risk factor—The truth of the matter is this: during Mr. Greenspan’s full reign at the Fed, the United States was practicing a form of “reverse” Keynesian economics and we applauded him. Not only was Mr. Greenspan jacking up our somewhat growing economy with steroids using mortgage debt, he was allowing the same thing with our National debt. In fact, the Fed was practicing so much “reverse” Keynesian economics during Mr. Greenspan’s reign that we have no room to use it now. Why or how did we let this happen? There is one reason and one reason only. Because we defaulted our own common sense to our non-business oriented economists, who don’t know a damn thing about business, nor seemingly, the economy, itself. I say some things are too important to leave to the economists, and the most important of these things is the Economy.

I also find it rather interesting that Bloomberg News found it important enough to get an early copy of the Financial Crisis Inquiry Commission report to see what they had to say but the Fed seemingly did not? All I can say is this–typical of our economists. Sitting high on top of their Golden Perches, people like Mr. Greenspan, Mr. Bernanke, and the Fed Governors don’t have to listen to anyone other than their own group of selectively groomed economists with like minds, who will support everything they say. And keep quiet about any opposing views. I can almost hear the Fed talking these past couple of days in their secretive little cliquish gathering: “The Financial Crisis Inquiry Commission report? Ah, we don’t need to worry about that. That’s just something a bunch of laymen non-economists put out, looking for someone to blame after the fact.

They don’t know anything about the economy or economics. So, who do we listen too? After all, no one saw this crisis coming. No one other than Roubini, where history has proven, all he does is throw things up against the wall and hope something sticks. Who would want to bet on his projections? And Krugman, who simply says about the economy: “We’re okay. Let’s just stay pat for awhile and let this thing blow over.”

Through all the nonsense, hidden agendas, miss communicated facts, “Gold prices may have seen heavy corrections in the recent days from its unquestionable number uno position, and had fallen slightly putting investors to panic, but technical indicators are showing high and sufficient signs that it will have a super rebound, “says Commodity Oneline. And, wow! Look what happened to gold Friday the 28th…flying North again!

 

Source: http://goldcoinblogger.com

Gold’s Correction Seen As Healthy

Despite the recent fall back in the gold price all the structural imbalances in the global economic system remain in place and ever-growing Chinese and Indian demand could turn supply/demand forecasts on their head. Holdings in the SPDR Gold Trust remained unchanged. While holdings in the iShares Silver Trust, the world’s largest gold-backed exchange-traded fund, fell further to 10,526.70 tonnes, its lowest since November, spot gold gained 0.2 percent to $1,348.25 an ounce by 0341 GMT, but was on course for a third consecutive week of falls. U.S. gold edged up 0.1 percent to $1,347.8.

The recent downturn in gold and silver prices is a healthy correction that will not last long, traders and analysts said, a great time to buy.

“There’s some selling pressure still ongoing in the gold market,” said Yingxi Yu, an analyst at Barclays Capital. “But we still expect prices to venture into uncharted territory sometime this year. The macro environment still looks supportive for investment interest in gold.”

An improved economic outlook dampens gold’s safe-haven appeal, but inflation worries down the road will again drive investors to the precious metal, Yu said. Also weighing on sentiment, the CME Group, the parent of the Chicago Board of Trade, said it would hike requirement margins on gold futures by 11 percent, and silver futures by six percent.

The dollar index pared some gains from the previous session, as the euro held its ground with investors wary of getting too bearish on the common currency after a recent rally turned round sentiment.

The physical market in Asia remained buoyant, as jewelers, investors and bullion traders hunted for bargains after prices fell to nearly $100 below the record high of $1,430.95 hit on Dec 7. Chinese activity is expected to slow as the week-long Lunar New Year holiday in early February draws closer.

“Demand is still strong, with Thailand being the major buyer,” said a Singapore-based dealer. Considered a safe investment against economic and related crises, gold is and will be enjoying sustained growth in demand, even though its price remains at $1,346 per ounce it will go much higher, and may reach as high as $1,600 this year if not more. Resurgence in investment demand was propping up gold prices Monday. Gold for February delivery was adding $5.30 to $1,346.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,352.40 and as low as $1,340.70 while the spot gold price scooted $4.60 higher, according to Regal Assets gold index.

 

Source: http://goldcoinblogger.com