Nothing says global 'economic recovery' like a major retailer drastically missing revenue expectations, slashing earnings projections and announcing it will shutter 225 stores nationwide. Staples, the largest US office supplies retailer, hit the triple whammy and didn't blame it all on the weather as the CEO notes "our customers are using less office supplies." Or maybe there are just less office workers? Isolating Staples is a little unfair but as the largest (and most bellwether-ish), it is perhaps time to question the constant meme of escape velocity, improving fundamentals, and cleanest-dirty-shirt growth.
This news item was posted on the Zero Hedge website late yesterday morning EST---and I thank reader M.A. for today's first story.
Moody’s Investor's Service has downgraded Chicago’s credit rating, citing the city’s unfunded pension liabilities.
The agency announced Tuesday it’s lowering the rating on $8.3 billion in debt from A3 to Baa1, putting it only three notches above junk-bond status.
Moody’s gave Chicago a negative outlook indicating another downgrade could occur if there’s no pension fix. Moody’s says the rating “reflects the city’s massive and growing unfunded pension liabilities.”
Moody’s says those liabilities “threaten the city’s fiscal solvency” unless major revenue and other budgetary adjustments are adopted soon and are sustained for years to come.
This very brief CBS/AP story was posted on the cbslocal.com Internet site very early Tuesday evening CST---and I thank U.A.E. reader Laurent-Patrick Gally for sending it our way.
Bank of America Corp., the second-biggest U.S. lender, suspended a senior foreign-exchange dealer amid a probe into the alleged manipulation of currencies, a person with knowledge of the matter said.
Joseph Landes, the London-based head of spot foreign exchange for Europe, Middle East and Africa, has been put on leave while the bank investigates, said the person, asking not to be identified as the details are private. Landes, the first trader known to have been suspended by Bank of America in the investigation, didn’t respond to an e-mail or calls to his work phone or mobile. Lawrence Grayson, a Bank of America spokesman, declined to comment on the suspended employee.
At least 21 employees of global banks have been fired, suspended or put on leave since Bloomberg News first reported in June that dealers said they shared information about client orders to manipulate benchmark rates used in the $5.3 trillion-a-day currency market. No firms or traders have been accused of wrongdoing by government authorities.
This Bloomberg story was posted on their Internet site yesterday morning MST---and it's the first contribution of the day from Manitoba reader Ulrike Marx.
Federal Reserve Chair Janet Yellen vowed on Wednesday to "do all that I can" to boost a U.S. economy where unemployment is too high and inflation is too low.
"The economy continues to operate considerably short" of the central bank's objectives of full employment and stable prices, Yellen said at a swearing-in ceremony at the central bank in Washington.
"The economy is stronger and the financial system is sounder," added Yellen, who succeeded Ben Bernanke on February 1. "We have come a long way, but we have farther to go."
This article showed up on the moneynews.com Internet site early yesterday morning EST---and it's the first offering of the day from West Virginia reader Elliot Simon.
Bank of England policy makers extended unprecedented stimulus into a sixth year today as they seek to ensure the economy fully recovers from the damage wrought by the financial crisis.
The Monetary Policy Committee led by Governor Mark Carney held its benchmark interest rate at 0.5 percent, as predicted by all 52 economists in a Bloomberg News survey. The central bank has maintained borrowing costs at a record low since March 2009, the longest stretch of unchanged policy since the 1940s. It also said today it will reinvest funds from gilts in its asset-purchase facility that mature tomorrow.
Carney says there’s “no rush” to remove the emergency stimulus put in place by his predecessor Mervyn King, even after the strongest expansion since 2007 pushed unemployment toward the 7 percent level at which officials had said they’d consider a rate increase. With signs the recovery is becoming entrenched, traders are betting the BOE will lift borrowing costs next year after officials raised their growth forecasts last month.
This short Bloomberg story, filed from London, was posted on their Internet site very early yesterday morning MST---and it's the second offering of the day from Ulrike Marx.
Italy and France were the major euro area countries put on the European Commission's economic "watch-list" over fears about persistently high debt and deficit levels.
The two countries were among 14 nations deemed to have "macro-economic imbalances" in their economy by the EU executive in a series of reports on 17 countries published on Wednesday (5 March).
Italy "must address its very high level of public debt and weak external competitiveness," the commission said, adding that its economy is hamstrung by "a continued misalignment between wages and productivity, a high labour tax wedge, an unfavourable export product structure and a high share of small firms which find it difficult to compete internationally."
This news item, filed from Brussels, was posted on the euobserver.com Internet site late yesterday morning Europe time---and it's the first contribution to today's column from Roy Stephens.
Lights, camera…no action. There had been such a build up to today's council meeting of the European Central Bank – which had been very much encouraged by the president, Mario Draghi, with talk of possible further credit easing, funding for lending, and so on – that when nothing happened, it was, to put it mildly, a bit of letdown. Did he want to do more, but was blocked by all the usual suspects? Almost certainly yes, though you rarely get to the bottom of these matters.
In any case, the ECB's inaction in the face of continued credit contraction and a clear and present danger of price deflation perhaps shouldn't really have come as such a surprise. The ECB has proved itself an extraordinarily cautious animal, and today's lack of fire works is just true to form.
For those clutching at straws, Mr Draghi did at least say that policy would remain extraordinarily accommodative even after the data started to show significant improvement. Mr Draghi was also relatively convincing in his explanation of why inflation was so low. Mainly, it is about falling energy prices he pointed out. In the eurozone, the average historical contribution of energy prices to annual HICP inflation was 50 basis points. In February it was minus 30 basis points. Some two thirds of the fall in inflation since early 2012 is accounted for energy prices.
Jeremy Warner over at The Telegraph has his knickers in a twist in this commentary that was posted on the telegraph.co.uk Internet site yesterday---and it's courtesy of Roy Stephens.
The International Monetary Fund has warned of the risks of low inflation and called for the European Central Bank to help strengthen the region's economy ahead its policy decision on Thursday.
The IMF blog, written by economists led by Reza Moghadam, director of the fund's European Department, says that Europe "can have too much of a good thing, including low inflation."
It comes despite better-than-expected euro zone inflation data, which came at 0.8 percent in February - welcome news for the ECB, as previous figures had fueled concerns about growth-sapping deflation.
"The ECB must be sure that policies are equal to the tasks of reversing the downward drift in inflation and forestalling the risk of a slide into deflation," Moghadam wrote.
This article showed up on the CNBC website on Wednesday morning EST---and I found it in yesterday's edition of the King Report.
1. Crimea 'votes' to join Russia as E.U. leaders meet: E.U. Observer 2. Ukrainian leader declares Crimea referendum an illegal farce: Reuters 3. U.S. in tenuous sabre rattling over Ukraine: Russia Today 4. U.S. navy confirms missile destroyer USS Truxton approaching the Black Sea: Russia Today 5. Ukraine crisis and Olympics boost Vladimir Putin's popularity in Russia: The Guardian 6. Russia said to seek repeal of U.S. veto at IMF: Reuters 7. VTB Cancels New York Forum as U.S. Relations Sour: Bloomberg 8. London's lucrative Russia ties hang over sanctions debate: Reuters 9. Ukraine P.M., E.U. leaders taking soft line on Crimea: E.U. Observer
[The above stories are courtesy of Ulrike Marx and Roy Stephens]
The U.S. establishes strategic networks around globe, some linked to humanitarian organizations, and some to fascist organizations and individuals who will do their dirty work, Scott Rickard, former intelligence officer for the NSA, told RT.
Rickard, who also worked for the USAF and the Directorate of National Intelligence, believes that no doubt Yanukovich was very corrupt, and the uprising can’t of course be called peaceful, although it started out that way.
“When you are throwing thousands of Molotov cocktails and you are being funded – this is a very strategic network that these NGOs have and they have been operating in Ukraine for decades. These individuals have ties at the greatest levels into humanitarian organizations, all the way up to the best side of the things and all the way down into the fascist organizations for the individuals that will do dirty work for them,” Rickard said.
Rickard also argues that “the CIA has operated like this in South America, they have operated like this in Africa” and there is nothing surprising that “they are going to do this in Ukraine.”
This absolute must read commentary was posted on the Russia Today website early yesterday afternoon Moscow time---and it's another contribution to today's column from Roy Stephens.
Loss-making Chinese solar equipment producer Chaori Solar said it will not be able to meet interest payments on bonds due on Friday in what would be the country's first-ever domestic bond default, and possibly the first of many.
The warning by Shanghai Chaori Solar Energy Science and Technology Co Ltd highlights rising credit risk in China, where a massive run-up in corporate debt since 2008 - and overcapacity in sectors such as steel, coal and solar - have threatened the solvency of many borrowers.
A precedent-setting default, however, could benefit the economy in the long run by heralding the end of an era of risk-free credit in China, where local governments have often used public funds to rescue weak firms in order to prevent financial and social instability.
And so it begins again. This Reuters story, co-filed from Shanghai and Hong Kong, was posted on their website very early on Wednesday morning EST---and I thank Elliot Simon for sending it.
1. Art Cashin: "Tensions in Ukraine...and the Biggest Problem Washington Faces". 2. Keith Barron: "This is Going to Be a Huge Surprise For Investors in 2014". 3. Tom Fitzpatrick: "Look For Staggering $570 Surge in Gold and 44% Spike in Silver". 4. Bill Fleckenstein: "This is What's Going to Crater the Stock Market". 5. Richard Russell: "Damn the U.S. Lies, Bulls Hit and Propaganda".
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]
Timothy Massad, the Treasury Department official named to head the U.S. Commodity Futures Trading Commission, said he would work to approve speculation limits in oil, natural gas and other commodities that have been resisted by banks and parts of the energy industry.
Massad and commission nominees Sharon Y. Bowen and J. Christopher Giancarlo told Senate Agriculture Committee lawmakers at a confirmation hearing today that they would look to review data and public comments on a current CFTC proposal to set limits on how large a position a trader can have in commodity markets.
“It is very important that we work to finalize that rule,” Massad, 57, said at the hearing in Washington. “They are a very important tool in the toolkit, and Congress obviously has directed us to take action in this regard. I will make that a priority.”
Where have we heard this line before? One wonders if he will be allowed to finally put a muzzle on JPMorgan et al's dealings in the Comex futures market in all four precious metals. I doubt it, but hope springs eternal. This Bloomberg story, filed from Washington, was posted on their website during the Denver lunch hour yesterday---and I found it embedded in a GATA release.
Odyssey Marine Exploration has been awarded the exclusive contract to conduct an archaeological excavation and recover the remaining valuable cargo from the SS Central America shipwreck located approximately 160 miles off the coast of South Carolina. The ship, which was immortalized in the best-selling book, "Ship of Gold in the Deep Blue Sea," sank in 1857 with one of the largest documented cargoes of gold ever lost at sea.
Odyssey was selected for the project by Ira Owen Kane, the court-appointed receiver who represents Recovery Limited Partnership (RLP) and Columbus Exploration (CE). Kane is charged by the court with overseeing the recovery project and has the benefit of a permanent injunction and exclusive salvage rights over the SS Central America shipwreck granted by the U.S. District Court for the Eastern Division of Virginia.
"We are excited about returning to the SS Central America and welcome the opportunity to work with Odyssey Marine Exploration on this historic undertaking. We are confident that Odyssey's unparalleled experience, superbly qualified personnel and state-of-the-art equipment will build on the successes of the first recovery effort, which has been characterized as a story of American initiative, ingenuity and determination," stated Kane.
This very interesting news item was posted on the maritime-executive.com Internet site yesterday---and it's anther story I found on the gata.org Internet site.
The U.S. Mint said it will resume selling its American Eagle platinum bullion coins on March 10, ending a four-year exit from the market, due to renewed interest from investors and dealers.
The U.S. Mint will offer the platinum bullion coins at a 4 percent premium over the spot price. Only 1-ounce coins will be sold, the Mint told authorized dealers in an email on Tuesday that was seen by Reuters.
Tom Jurkowsky, U.S. Mint's director of corporate communications, told Reuters the Mint notified its authorized purchasers about the platinum coin sales on Tuesday.
This Reuters piece showed up on the Chicago Tribune's website early Wednesday afternoon CST---and I thank Elliot Simon for his third and final offering in today's column.
GoldMoney founder and GATA consultant James Turk was interviewed at length on Wednesday by Erin Ade on Russia Today's "Boom/Bust" program, discussing gold's enduring function as money, the best money insofar as other forms are actually credit with counterparty risk. Central bank suppression of gold prices is mentioned as well.
The program has been posted at the youtube.com Internet site---and Turk's segment begins at the 6-minute mark. This is another item I found in a GATA release yesterday---and I thank Chris Powell for wordsmithing "all of the above."
Commodity prices are not just for buyers and sellers of the physical stuff. They are also the basis of derivative markets -- futures contracts, options, and combinations of these and other financial instruments -- which can be far larger. A twitch in the "benchmark" price can mean big shifts in the value of derivatives, and profits for the prescient.
People unhappy with the way the world gold market works suspect that more than prescience may be involved. In a class-action lawsuit filed this week, Kevin Maher, a New York-based investor in the gold and derivative markets, is suing the five banks which set the benchmark -- Deutsche, Barclays, Nova Scotia, Société Générale and HSBC -- for collusion. Those banks that have commented say they will defend the suit vigorously.
Another bit of bad news for the gold market comes from a forthcoming paper by Rosa Abrantes-Metz, of New York University's Stern School of Business, and her husband Albert Metz, a ratings-agency chief (writing in a personal capacity). This identifies a puzzling number of large downward price movements in the run-up to the afternoon "fix": a conference call, typically 10 minutes long, when the banks exchange information and decide on the price. Ms Abrantes-Metz terms the spikes "too frequent and too large" to be mere chance.
Chris Powell added that---"When a GATA delegation visited an editor for The Economist at his office in London in May 2009 to give him the gold price suppression story and the associated documentation, he couldn't get rid of us fast enough." This interesting commentary is headlined "Gold: In a fix, Mr. Bond"---and it's posted on the economist.com Internet site.
GATA's sometime lawyers, Berger & Montague in Philadelphia, a leading national antitrust law firm, are among those investigating complaints about the daily London gold price fixing, whose suppression of the gold price was documented by GATA's late board member Adrian Douglas in 2010.
If such a lawsuit ever got into what is called the discovery phase, the records of the banks might become subject to a court's review and eventually public, exposing the banks' transactions with the Western central banks that long have been underwriting the gold price suppression scheme.
Of course GATA supports such exposure and encourages gold traders and gold mining companies who feel harmed by gold price suppression generally and the London gold fix particularly to contact Berger & Montague's lead lawyer, GATA's friend Merrill Davidoff, to learn more about the firm's investigation. Presumably that investigation could lead to another federal anti-trust lawsuit for which plaintiffs would be needed.
This commentary by GATA's Chris Powell, plus all the appropriate links, was posted on the gata.org Internet site yesterday.
The power cuts that have been scheduled by South Africa's power utility Eskom to take effect over the next few days will have an adverse effect on production in the mining sector, industry insiders told Mineweb on Thursday.
Peter major, a mining consultant at Cadiz Corporate Solutions said load shedding by Eskom is paving the way for an increasingly difficult atmosphere between government and big mining houses that is critically reliant on consistent, uninterrupted electricity for their survival.
Earlier this morning, Eskom declared an emergency and asked key industrial customers to reduce load by 10% as from 08:00.
“Eskom calls on consumers to urgently switch off geysers, pool pumps and all non-essential appliances this morning to prevent the need for rotational load shedding. The power system is very tight. This risk has increased significantly due to the heavy rains over the last few days and an increase in technical problems experienced at some of Eskom's power stations,” the utility said in a statement.
This news item, filed from Johannesburg, was posted on the mineweb.com Internet site yesterday---and I thank Ulrike Marx for digging it up for us.
India’s current-account deficit narrowed to a fresh four-year low as gold imports cooled, offering a potential boost for the rupee even as economists said the gap may widen again if the economy improves.
The deficit was $4.2 billion in October through December, compared with $5.2 billion for the prior quarter, the Reserve Bank of India said in a statement in Mumbai yesterday. The shortfall was equivalent to 0.9 percent of gross domestic product. The current account is the broadest measure of trade, tracking goods, services and investment income.
The government increased taxes on gold imports in the world’s second-biggest user of the metal three times last year to help pare a trade imbalance that has weighed on the rupee. The currency has gained about 11 percent since reaching an all-time low on Aug. 28, the world’s best performer in that time, as imports have fallen and growth remains subdued.
“It has come down for all the wrong reasons -- if the economy picks up, imports will rise and you’ll see the current-account deficit go up again,” said Dharmakirti Joshi, chief economist with Mumbai-based Crisil Ltd. The government should start to withdraw restrictions on gold imports, he said.
Today's last story comes from Bloomberg. It was filed from New Delhi and posted on their website late on Wednesday evening MST---and I thank Ulrike Marx for her final offering in today's column.
A U.S. Federal Reserve policymaker who has long criticized its bond-buying stimulus said on Wednesday the program has lasted too long, and there are signs it is now distorting financial markets and encouraging risk-taking.
In a speech here, Dallas Fed President Richard Fisher amplified some lingering concerns that the central bank's policy stimulus is stoking asset-price bubbles that "may result in tears" for investors acting on bad incentives.
"There are increasing signs quantitative easing has overstayed its welcome: Market distortions and acting on bad incentives are becoming more pervasive," he said of the asset purchases, which are sometimes called QE.
"I fear that we are feeding imbalances similar to those that played a role in the run-up to the financial crisis," he said in prepared remarks to the Association of Mexican Banks.
No! Really? The man has a keen grasp of the obvious. This Reuters story, filed from Mexico City, was posted on their website early yesterday evening EST---and I thank Manitoba reader Ulrike Marx for today's first story.
Bank of England officials knew of concerns the foreign-exchange market was being manipulated as early as July 2006, more than seven years before regulators opened formal probes into alleged rate-rigging.
The BOE today released minutes of central bank meetings with traders from some of the world’s biggest banks where they discussed concerns that currency benchmarks such as the WM/Reuters 4 p.m. London fix were being manipulated. The central bank suspended an employee amid an internal investigation into allegations its officials condoned rigging, according to a separate statement.
At a July 4, 2006, meeting led by BOE chief dealer Martin Mallett at Smiths of Smithfield, a celebrity-chef-owned restaurant in the City of London, attendees said there was “evidence of attempts to move the market around popular fixing times by players that had no particular interest in that fix,” according to the minutes. “‘Fixing business’ generally was becoming increasingly fraught due to this behavior.”
This Bloomberg news item was filed from London---and I found it embedded in a GATA release from early yesterday morning. It's definitely worth reading.
'To be, or not to be . . .' is the famous line of one of William Shakespeare's most famous plays.
The double-minded theme of The Tragedy of Hamlet, Prince of Denmark, aptly reflects the Danish people's relationship with the European Union. In 1972 a good half of them voted Denmark into the EU. In 2000 a similar proportion of citizens voted against joining the euro.
Recent events are set to remind Danes of this ambivalence.
This interesting, but rather meandering article, was posted on the euobserver.com website yesterday morning Europe time---and I thank Roy Stephens for his first contribution of the day.
The European Union offered a larger than expected package of aid to Ukraine on Wednesday, saying it was willing to provide $15 billion in loans and grants over the next several years to help get the shattered economy back on its feet.
European Commission President Jose Manuel Barroso said the assistance, to be discussed by European Union leaders at a summit in Brussels on Thursday, would require widespread reforms by the new Ukrainian government and the signing of a deal between Ukraine and the International Monetary Fund.
The EU had been expected to come up with a package of short-term assistance worth around 1 or 2 billion euros, but instead presented a more comprehensive program that perhaps by coincidence matched the amount Russia had offered Ukraine before president Viktor Yanukovich's government collapsed.
This Reuters story, filed from Brussels, was posted on their Internet site just before noon Denver time yesterday---and I thank Ulrike Marx for her second contribution of the day.
1. Putin, Flashing Disdain, Defends Action in Crimea: The New York Times 2. In Crimea, Mother Russia Looms Large: The New York Times 3. "Behind the Kiev Snipers it Was Somebody From the New Coalition"- a Stunning New Leak Released: Zero Hedge 4. Estonian Foreign Ministry confirms authenticity of leaked call on Kiev snipers: Russia Today 5. Russia Proposes Confiscating US, European Assets If Sanctions Adopted: Zero Hedge 6. Crimea Crisis Haunted by Ghosts of Bungled World War I Diplomacy: Bloomberg 7. Questions on Ukraine the West chooses not to answer: Russia Today 8. Ukrainian people will bear brunt of IMF deal with tough austerity: Russia Today 9. Russia puts Ukraine far-right leader on international wanted list over calls for terrorism: Russia Today 10. 'Cold War stereotypes': Russia condemns NATO plan to strengthen cooperation with Ukraine: Russia Today 11. U.S. and Russia fail to reach Ukraine deal on day of frantic diplomacy: The Guardian
[The stories above are courtesy of West Virginia reader Elliot Simon, Ulrike Marx---and Roy Stephens]
The UAE, Saudi Arabia and Bahrain said on Wednesday they were withdrawing their ambassadors from Qatar because Doha had not implemented an agreement among Gulf Arab countries not to interfere in each others' internal affairs.
Qatar said it will not withdraw its envoys from UAE, Saudi Arabia and Bahrain despite differences in matters which it said were "external to the GCC".
The move by the three countries, conveyed in a joint statement, is unprecedented in the three-decade history of the Gulf Cooperation Council, an alliance of Saudi Arabia, Bahrain, Kuwait, Qatar, UAE and Oman.
Qatar has been a maverick in the region, backing Islamist groups in Egypt, Syria and elsewhere in the Middle East that are viewed with suspicion or outright hostility by some fellow GCC members.
This very interesting news item, filed from Dubai, was posted on the gulfnews.com Internet site early yesterday afternoon local time---and once again my thanks go out to Ulrike Marx for sharing it with us.
Here's the US's exceptionalist promotion of "democracy" in action; Washington has recognized a coup d'etat in Ukraine that regime-changed a - for all its glaring faults - democratically elected government.
And here is Russian President Vladimir Putin, already last year, talking about how Russia and China decided to trade in roubles and yuan, and stressing how Russia needs to quit the "excessive monopoly" of the US dollar. He had to be aware the Empire would strike back.
Now there's more; Russian presidential adviser Sergey Glazyev told RIA Novosti, "Russia will abandon the US dollar as a reserve currency if the United States initiates sanctions against the Russian Federation."
So the Empire struck back by giving "a little help" to regime change in the Ukraine. And Moscow counter-punched by taking control of Crimea in less than a day without firing a shot - with or without crack Spetsnaz brigades (UK-based think tanks say they are; Putin says they are not).
This must read commentary by Pepe was posted on the Asia Times website yesterday---and it's also courtesy of Ulrike Marx.
American economist Jim Rickards looks at the risks inside China as its growth slows. This 6:57 minute must watch video clip was posted on the cbc.ca Internet site on Tuesday---and my thanks go out to reader Harold Jacobsen for sending it our way.
This 19:47 minute video interview with Marc was conducted by Tekoa DaSilva of Sprott Global Resources---and is well worth watching. It was posted on the youtube.com Internet site back on February 28---and I thank reader Ken Hurt for pointing it out to us.
1. Ronald-Peter Stoferle: "U.S. Dollar Collapse, Beijing, Moscow---and the Ascendancy of Gold". 2. Dr. Stephen Leeb: "Germany, Russia, China---and a New Golden Global Currency". 3. Dr. Paul Craig Roberts: "They Will Get the Whole World Blown Up". 4. Louise Yamada: "Three Incredibly Important Gold and Silver Charts".
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]
The chief executive officer of Sharps Pixley Ltd., who has traded gold for 30 years, challenged a study that says the market’s price-setting mechanism is susceptible to manipulation, compromising the $19.6 trillion of the precious metal that trades annually.
The price fluctuations for gold when five banks meet daily to determine the so-called fixing in London are a consequence of supply and demand, not a sign of manipulation, said Ross Norman, the chief executive of Sharps Pixley, a broker of physical gold in the city. Norman previously worked at Johnson Matthey Plc, N.M. Rothschild & Sons Ltd. and Credit Suisse Group AG.
Five banks meet twice a day to set benchmark prices used by miners, jewelers and central banks to trade and value the metal. Unusual trading patterns in the spot market during the afternoon session suggest collusive behavior and should be investigated, New York University’s Stern School of Business Professor Rosa Abrantes-Metz and Albert Metz, a managing director at Moody’s Investors Service, wrote in a draft research paper.
The bigger price swings in the afternoon are caused by both London and New York being open and more people trading bullion because of increased liquidity as the so-called fixing happens, said Norman. The volatility also reflects differing views on the value of metal rather than price manipulation, he said.
This Bloomberg news item, filed from London, was posted on their website yesterday morning MST---and I found it embedded in a GATA release. It's worth reading.
Bank of Nova Scotia Chief Executive Officer Brian Porter said the process for setting gold prices, known as the London gold fix, is outdated and should be reviewed.
“The fix is dated, it has been around for a long period of time,” Porter said today in an interview on Bloomberg Television. “It should be reviewed and any degree of transparency we could bring to that would be healthy.”
Bank of Nova Scotia, based in Toronto, is one of five banks overseeing the London gold fix, the century-old benchmark used throughout the $20 trillion market for the metal. Kevin Maher, a New Yorker who said he buys and sells gold futures and options, sued the banks, which also include Barclays Plc, Deutsche Bank AG, HSBC Holdings Plc and Société Générale SA, claiming they colluded to manipulate it.
The above three paragraphs is all there is to this very short Bloomberg story yesterday. It was filed from New York---and posted on their Internet site early yesterday afternoon MST. My thanks got out to Ulrike Marx for sending it along.
Perhaps the clue to the argument should be in the name – the Gold Fix or Fixing – the daily meetings between the five bullion banks which set the London agreed gold price morning and afternoon, which much of the gold market uses as benchmark pricing. The silver price is ‘fixed’ similarly once per day.
One of the definitions of the word fix from the Oxford Dictionary is, “A dishonest or underhand arrangement”, and, while the London Gold Fix dates back to 1919, the word and this is perhaps a more modern interpretation of the word , it does thus have connotations which may in itself raise doubts about the financial integrity of the overall process.
Thus this ‘fixing’ mechanism has been coming under increased scrutiny, perhaps following on from the LIBOR scandal whereby benchmark interest rates had been manipulated in favour of some of the participants setting them. In the latest move regarding the London Gold Fixing which is already under regulatory investigation, a ‘class action’ lawsuit has been initiated in New York against the five member banks for manipulating the gold price through the fixing process.
This interesting commentary by Lawrie was posted on the mineweb.com Internet site yesterday---and I thank Ulrike Marx for bringing it to our attention.
GEOFF CANDY: Hello and welcome to this week’s edition of Mineweb.com’s Gold Weekly podcast. Joining me live at the Sprott Asset Management Offices is Eric Sprott himself. Eric it’s been quite a long time since we last chatted and since then a lot has happened in the gold markets. We’ve seen the first year of down movement in gold in a long time. In January though things seemed to pick up a little bit and in February some of that momentum has carried on. Has something not changed necessarily this year, but sentiment seems to have shifted a little.
ERIC SPROTT: Well of course it’s the $64m question… what is going to happen in the gold market, and I would say on the surface the two arguments that are gaining a lot of strength, firstly the absolute physical demand for gold that we’re seeing, particularly in China, but also through mint sales and other data like that and other Asian countries and so one can make a case that the physical demand far exceeds supply at western central banks or continuing to supply the gold, and it’s the old supply and demand argument and who is going to win that?
The other major change that’s happened here is that a number of spokespeople who have come out and said that gold prices are manipulated and we’ve had about four or five articles and one of the best ones is the book called the “Gold Cartel” by Dimitri Speck… which is a wonderful read by the way and I recommend it to your viewers and listeners. And then there is the discussion by the equivalent to the SEC in Germany, BaFin said that possible manipulation in precious metals could worse than LIBOR and then we’ve had a couple of studies, one by somebody in New York Stern Business School saying it looks like the COMEX market has had some very odd things happening there.
This longish interview with Eric was posted on the mineweb.com Internet site yesterday---and it's another contribution to today's column from Ulrike Marx. It's definitely worth reading if you have the time.
Short version: Well, that was fast!
Analysts at Nomura Securities this morning upgraded their view of precious-metals prices, and the gist of the argument is that the conditions which sent gold’s price tumbling 28% last year appear to have vanished. It’s a familiar theme to close watchers of the niche.
“Like a phoenix regenerating from its ashes, cyclical gold appears set to recover,” write Tyler Broda and six co-authors.
This short article was posted on the Barron's website yesterday morning EST---and it's worth skimming. I thank West Virginia reader Elliot Simon for finding it for us---and it's worth skimming.
Zimbabwe is holding gold coins valued at $501,390 (299,802.68 pounds) as its only reserves, enough to buy only 1,400 tonnes of maize, the finance minister said on Wednesday, highlighting the parlous state of the country's finances.
The economy of the southern African country, which has slowed to 4-6 percent growth after four years of near-double digit growth, is the biggest challenge to veteran President Robert Mugabe, who was re-elected last July in elections disputed by the opposition.
"The (central) bank does not hold any gold reserves except for gold coins, which were valued at $501,390 as at the end of January 2014," Finance Minister Chinamasa said.
Zimbabwe produced 13 tonnes of gold last year, well below the all-time record of 29 tonnes in 1998.
This short Reuters story is definitely worth your time. It was filed from Harare late yesterday afternoon GMT---and once again my thanks go out to Ulrike Marx for sharing it with us.
The platinum wage negotiations have been adjourned; leaving the parties involved pondering their next course of action.
The Association of Mineworkers and Construction Union is still demanding R12,500, but by yesterday afternoon, AMCU had lowered their demand, arguing for a wage increase that will see workers earn R12500 by 2018
The big three platinum producers, Anglo American Platinum, Lonmin, and Impala Platinum, however, remain resolute in their offer of increases between 7 percent and 9 per cent over three years.
The Commission for Conciliation Mediation and Arbitration has its hands full trying to find an amicable solution to the stalemate. And according to a press release from Lonmin on Wednesday, “CCMA has deemed the respective parties’ current position to be too far apart to warrant further mediation at this stage”.
This news item, filed from Johannesburg, was posted on the mineweb.com Internet site yesterday sometime---and once again I thank Ulrike Marx for digging it up on our behalf.
Canada's Barrick Gold Corp , the world's biggest gold miner, is not looking to hedge the price of the precious metal because it expects a sharp increase in coming years, Chief Executive Jamie Sokalsky said on Tuesday.
"That is not something we're considering doing right now," Sokalsky said at an interview with Bloomberg News during the Prospectors & Developers Association of Canada (PDAC) convention in Toronto.
Sokalsky said he was not interested in hedging because investors want to capture gold's upside.
In December, incoming Barrick Chairman John Thornton told reporters he would look seriously at hedging.
This short Reuters article, filed from Toronto, was posted on their Internet site very early Tuesday evening EST---and it's the final offering of the day from Ulrike Marx, for which I thank her.
While the comments by Russian presidential advisor, Sergei Glazyev, came before Putin's detente press conference early this morning, they did flash a red light of warning as to what Russian response may be should the west indeed proceed with "crippling" sanctions as Kerry is demanding.
As RIA reports, his advice is that "authorities should dump US government bonds in the event of Russian companies and individuals being targeted by sanctions over events in Ukraine." Glazyev said the United States would be the first to suffer in the event of any sanctions regime. “The Americans are threatening Russia with sanctions and pulling the EU into a trade and economic war with Russia,” Glazyev said. “Most of the sanctions against Russia will bring harm to the United States itself, because as far as trade relations with the United States go, we don’t depend on them in any way.”
This commentary was posted on the Zero Hedge website yesterday morning---and today's first story is one that Manitoba reader Ulrike Marx sent my way. But the first person through the door with the original story hours earlier was reader "Andres A" who sent me this short marketwatch.com item on it linked here.
It remains one of Wall Street’s most puzzling mysteries: What exactly did JPMorgan Chase bankers know about Bernard L. Madoff’s Ponzi scheme?
A newly obtained government document explains why — five years after Mr. Madoff’s arrest spotlighted his ties to JPMorgan and later led the bank to reach a $2 billion settlement with federal authorities — the picture is still so clouded.
The document, obtained through a Freedom of Information Act request, reveals a behind-the-scenes dispute that tested the limits of JPMorgan’s legal rights and raised alarming yet unsubstantiated accusations of perjury at the bank. More broadly, the document highlights the legal hurdles federal authorities can face when investigating a Wall Street giant.
This article was posted on The New York Times website late yesterday evening EST---and I thank Phil Barlett for sending it our way.
RadioShack revealed another quarter of red ink and a 19% tumble in same-store sales on Tuesday, prompting the embattled electronics retailer to shutter up to 1,100 stores.
Wall Street slammed RadioShack’s beaten-down share price in the wake of the big earnings miss, driving it as much as 19% in the red.
The electronics company logged a net loss of $191.4 million, or $1.90 a share, last quarter, compared with a loss of $63.3 million, or 63 cents a share, a year earlier.
Excluding one-time items, RadioShack lost $1.29 a share, widely missing projections from analysts for a loss of 14 cents.
Reader M.A. sent me this business news item that was posted on the foxbusiness.com Internet site yesterday.
"I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest."
This was said by Winston Churchill in the opening stages of the Second World War, yet it remains to this day a remark that should instruct all analysis of Russian foreign policy.
Russia’s effective annexation of Crimea shouldn’t have come as a surprise to anyone with their finger on the pulse of Vladimir Putin’s Russia, which is perhaps why the reaction of Western financial markets has so far been relatively muted for what is said to be the “worst crisis in Europe in the 21st century” – a bit of a tumble in stock markets, a firming up of commodity prices and some limited evidence of flight to safety.
Even the hit taken to the Russian stock market and the ruble is not yet as bad as occurred in similar circumstances when Russia moved into Georgia.
This must read story was posted on the telegraph.co.uk Internet site late on Monday evening GMT---and it's the first offering of the day from Roy Stephens.
As the conflict with Russia over Crimea intensifies, Germany is playing a central role in communications with Russian President Vladimir Putin. But the international community has doubts that Chancellor Angela Merkel can pull it off.
Germany had only recently announced the end of its era of restraint. German President Joachim Gauck, Defense Minister Ursula von der Leyen of the Christian Democrats and Foreign Minister Frank-Walter Steinmeier of the Social Democrats have all argued that it's time for Germany to play a greater role in the world.
Steinmeier couldn't have expected that he would need to follow-through on his push for an "aggressive foreign policy" so quickly. But the dramatic escalation in Crimea needs quick answers and it has become a focus of Chancellor Angela Merkel's government in Berlin.
"Europe is, without a doubt, in its most serious crisis since the fall of the Berlin Wall," Steinmeier said on Monday. "Twenty-five years after the end of the conflict between the blocs, there's a new, real danger that Europe will split once again."
Partly as a result of Steinmeier's key role in Kiev in February -- in which he, together with his French and Polish counterparts, helped forge a last-minute agreement to ward off a bloodbath in Kiev -- but also because of Germany's traditional role as a go-between with Russia, many are now looking to Merkel as a potentially vital intermediary with Russian President Vladimir Putin.
This is another must read news item. This one showed up on the German website spiegel.de very early yesterday afternoon Europe time---and it's the second contribution in a row from Roy Stephens.
The leak took place in London on Monday (3 March), when a freelance photographer, Steve Back, got an image of a classified document being carried by a British official into a meeting of the country’s National Security Council.
It said the U.K. backs E.U.-level "visa restrictions/travel bans" on Russian officials and supports "deployment of OSCE and/or U.N. (but not E.U.) monitors in Crimea and eastern Ukraine.”
But it added that Britain does “not support, for now, trade sanctions … or [to] close London's financial centre to Russians."
The information reflects an agreement by EU foreign ministers in Brussels the same day to threaten Russia with “targeted measures” if it does not end its occupation of Ukraine’s Crimea region.
But it indicates that British PM David Cameron will not be willing to harm British trade or financial interests vis-a-vis Russia when EU leaders meet in Brussels on Thursday to discuss the Ukraine crisis.
This very interesting news item was posted on the euobserver.com Internet site yesterday morning---and it's courtesy of Roy Stephens as well.
1. Russia test-fires ICBM amid tension over Ukraine: Yahoo! News 2. Putin: Deploying military force is last resort, but we reserve right: Russia Today 3. Crimean self-defense squads in stand off with Ukrainian soldiers at Belbek airport: Russia Today 4. Russia slams Ukraine's U.N. envoy for publicly justifying Nazi collaborators: Russia Today
[Stories courtesy of reader M.A...and Roy Stephens]
As [The Republic of] Moldova prepares to sign an Association Agreement with the European Union, Russia is stepping up attempts to keep the country in its fold. It has found some willing helpers in the country.
Moscow is now in the process of infiltrating the last pro-European republics in its sphere of influence. Moldova is especially important to the Russians: a country, smaller than the German state of Nordrhein-Westfalia, almost entirely surrounded by Ukraine except for a border it shares with Romania. The republic, which left the Soviet Union in 1991, only has three million inhabitants.
Until 2009, the communists led the country -- but now a pro-European coalition is in power. Moldova long ago agreed on the text of an Association Agreement with the EU and it is supposed to be signed in August. This makes Moldova and Georgia the only ones of the six original former Soviet republics risking rapprochement with Europe.
But will it actually happen? The Kremlin is currently expending significant effort to loosen Europe's grasp on Moldova -- and using the Gagauz to do so. The Gagauz capital, Comrat, is a sleepy town in the south Moldavian steppe where the only language spoken aside from Gagauz is Russian and people watch Moscow's Channel One.
The rest of Moldova has also changed its attitude towards Europe -- only 44 percent of them are still in favor of integration into the EU, while, at the same time, the number of people in favor of entering the Customs Union with Russia has grown from 30 to 40 percent.
This very interesting story was posted on the spiegel.de website yesterday---and is a must read for all serious students of the New Great Game. It is, of course, another contribution from Roy Stephens---for which I thank him.
The drama highlighted the risks of shadow banking, which over the past three years has evolved from underground lending among individuals and small companies into a complex and interconnected web, estimated by JPMorgan Chase & Co. to be valued at $7.7 trillion, involving the nation’s biggest banks, state-owned firms, local governments and millions of households.
The mixing of funds makes it more difficult for the government to rein in the nation’s credit supply and to shield its state-controlled banks from rising defaults as the economy cools. Banks had an estimated 6.6 trillion yuan of off-balance-sheet loans channeled mostly through trusts to risky corporate and local-government borrowers, according to Mike Werner, a Hong Kong-based analyst at Sanford C. Bernstein & Co.
That figure is equal to more than 80 percent of banks’ shareholder capital and has increased 65 percent annually for the past three years.
As China’s top legislators start their annual meeting in Beijing tomorrow to set economic targets, efforts by policy makers to crack down on unregulated lending threaten to undermine financial stability.
I posted a story similar to this a few days back, but this one is more comprehensive. This Bloomberg story, co-filed from Shanghai and Beijing, was posted on their Internet site late Monday evening Denver time---and I thank Manitoba reader Ulrike Marx for her first contribution to today's column.
1. William Kaye: "This is What is Happening in Ukraine---and the War on Gold". 2. Dr. Paul Craig Roberts [#1]: Ukraine "More Dangerous Than Cuban Missile Crisis" 3. James Turk: "An Historic Event Has Taken Place in the Gold Market". 4. Dr. Paul Craig Roberts [#2]: "The Entire World is Now in Great Danger".
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]
Barclays Plc, Deutsche Bank AG and three other banks were accused in a lawsuit of manipulating the London gold fix, a benchmark used throughout the $20 trillion market for the metal.
Kevin Maher, a New York resident who says he bought and sold gold and gold futures and options, sued today in Manhattan federal court claiming the five banks overseeing the century-old benchmark colluded to manipulate it.
Maher’s complaint cites press reports, including a Bloomberg News story last week on a draft paper by two researchers showing unusual pricing patterns connected to the gold fix. The paper is the first study to raise the possibility that the banks, which also include Bank of Nova Scotia, HSBC Holdings Plc and Société Générale SA, may have been actively working together to manipulate the benchmark.
JPMorgan's name is conspicuous by its absence---and I'm sure there's a good reason for that. This Bloomberg news item was posted on their website yesterday afternoon MST---and I found it on the sharpspixley.com Internet site minutes before I hit the send button on today's column.
Rick Rule, according to reader Ken Hurt, spends an hour talking with the talking heads at BNN, who are doing live interviews from the floor of the PDAC convention in Toronto that's underway at the moment.
I haven't had time to listen to any of it---and I thank Ken for sharing it with us.
Wow! Talking head/first class jerk Howard Green has his hands full with Ned in this 3-part 30-minute BNN interview live from the PDAC convention yesterday---and it's an absolute must watch---but part #2 is the most interesting! I thank reader Ken Hurt for bringing this video interview to our attention.
A story that describes a gold heist from the San Francisco Mint at the turn of the century could explain the source of the gold coins worth $10 million that were found last month in California’s Mother Lode country.
The published news item was discovered in the Haithi Trust Digital Library and was provided by Northern California fishing guide Jack Trout, who doubles as a historian and collector of rare coins.
This interesting news item showed up on the sfgate.com Internet site on Monday---and I found it in a GATA release early yesterday morning.
With the recent uptick in gold and silver prices, there has been a slight increase in the amount of bullion-priced gold and silver being liquidated by retail customers in the United States. At the same time, demand for physical gold in China continues to break the all-time records set last year.
On the other side, demand to purchase physical precious metals in the United States has softened. With more bullion items being liquidated and lower demand to purchase them, a wide range of gold, silver, platinum and palladium products are being sold back to wholesalers. Within the past week, there have been several opportunities to acquire selected coins or bars at lower than normal premiums.
Among silver items, the premiums for silver American Eagle one-ounce bullion coins and U.S. 90 percent silver coins are down. Sometimes, you can also find deals on silver bars and rounds.
This interesting news item by Patrick Heller was posted on the numismaster.com Internet site yesterday---and is worth reading. I thank West Virginia reader Elliott Simon for sharing it with us.
India's trade minister said on Tuesday he had raised the issue of easing some curbs on gold imports with the finance ministry, as they were encouraging smuggling and hurting the gems and jewellery industry, an important export sector.
The government imposed the restriction on imports last year, in order to narrow a worryingly high current account deficit, and any relaxation of the curbs could revive Indian demand and support global prices.
"We have to have a balance. Over-regulation, too much of tariffs, lead to another problem ... of smuggling," Trade Minister Anand Sharma told a news conference.
"We have to ensure adequate availability of gold for the gems and jewellery industry, which is a very important sector for our exports."
This gold-related Reuters story, filed from New Delhi, was picked up by the mineweb.com Internet site yesterday---and it's worth reading as well. I thank Ulrike Marx for her second offering in today's column.
Gold researcher and GATA consultant Koos Jansen reports that India's silver imports were up 189 percent in 2013 as the government began obstructing gold imports. But he quotes an Indian source as saying that Indians are getting all the gold they need through smuggling and that smugglers and organized crime, collecting a smuggling premium, wouldn't have it any other way.
Jansen's commentary is headlined "India Imported 6,125 Tonnes Of Silver in 2013" and it's posted at his ingoldwetrust.ch Internet site. This is another precious metal story that I found embedded in a GATA release from yesterday.
I’m not sure why the West is surprised at President Putin’s ‘invasion’ of Crimea in Ukraine and the potential for further incursions by Russian troops and/or Russian-backed militia in the east of the country which is largely Russian-speaking and pro-Russian.
The exertion of control over Crimea was wholly predictable and has similarities with the Russian ‘invasion’ of South Ossetia and Abkazia in Georgia in 2008 when internal dissension looked like marginalising Russian speaking pro-Russian areas of that country.
So where does this leave gold? Does it have any impact? Gold does tend to thrive on uncertainty so the recent runup in the gold price will have incorporated a significant Ukrainian factor, but once some kind of settlement is reached – probably sooner rather than later – the world may breathe a sigh of relief and mark gold down accordingly. Indeed a small de-escalation of the situation this morning saw gold plunge $10 from an overnight level of around the $1250 mark. The only question is perhaps if by the time a solution is finally engineered whether gold has reached a self-sustaining upwards momentum which could negate, or mitigate, the likely potential fall.
This must read commentary by Lawrie was posted on the mineweb.com Internet site yesterday---and it's the third and final contribution of the day from Ulrike Marx.
JPMorgan Chase is trying to put its troubles behind it. Having agreed to pay a $13 billion settlement to the government for its past mortgage-lending misdeeds, it wants to move on. At the big “Investor Day” meeting with shareholders last week, Jamie Dimon, its chief executive, and his top lieutenants extolled the bank’s strong and diversified position in its four main businesses. “I am so damn proud of this company,” Mr. Dimon exclaimed.
But not so fast. Proxy season is around the corner. And, behind the scenes, a skirmish is flaring over what will be put to an investor vote at the bank’s annual shareholder meeting this spring.
Among the more interesting proposals this year is from Michael C. Davidson, a tax accountant and individual investor in Portland, Ore., who owns about 300 JPMorgan Chase shares. The S.E.C. hasn’t yet ruled on whether it will require the bank to have shareholders vote on the idea.
In Mr. Davidson’s view, it’s high time for big-bank shareholders to weigh in on this crucial issue. His proposal, should the S.E.C. allow it to stand, recommends separating JPMorgan’s commercial bank operations from its investment banking and asset management units, similar to the way banks operated after the Glass-Steagall law was passed in the 1930s. The proposal asks the company’s board to create a committee of independent directors “to develop a plan for divesting all non-core banking business segments” and to report to shareholders on that plan within 120 days.
This interesting article was posted on The New York Times website on Saturday---and I thank Phil Barlett for today's first story.
Matteo Renzi's new Italian government on Friday approved an emergency decree to bail out Rome city council whose mayor had warned the capital would have to halt essential services unless it got financial help.
The decree transfers 570 million euros ($787 million) to the city to pay the salaries of municipal workers and ensure services such as public transport and garbage collection.
Renzi, under pressure from critics who say Rome is getting favorable treatment, attached conditions to the bailout.
Rome must spell out how it will rein in its debt, justify its current levels of staff, seek more efficient ways of running its public services and sell off some of its real estate, the government decree said.
This Reuters story, filed from Rome, was posted on their website early Friday afternoon EST---and I found it in yesterday's edition of the King Report.
1. Ukraine P.M. warns of war as Russian military seizes control in Crimea: The Guardian 2. Putin: Russian citizens, troops threatened in Ukraine, need armed forces’ protection: Russia Today 3. Yanukovich sent letter to Putin asking for Russian military presence in Ukraine: Russia Today 4. U.S. raises rhetoric as Russian forces seize Crimea: France 24 5. Thousands rally against 'illegitimate govt', raise Russian flags in eastern Ukraine: Russia Today 6. Ukraine nationalist leader calls on 'most wanted' terrorist Umarov 'to act against Russia': Russia Today 7. Ukraine in Maps: The New York Times 8. After Initial Triumph, Ukraine’s Leaders Face Battle for Credibility: The New York Times 9. Ukraine Capital Control Crunch: Largest Bank Limits Cash Withdrawals To $100 Daily: Zero Hedge 10. Unicredit "Temporarily" Limits ATM Withdrawals In Ukraine: Zero Hedge 11. Cold War Ghosts Haunt East Europe in Moves for Crimea: Bloomberg 12. The New Ukraine: Inside Kiev's House of Cards: Spiegel OnLine 13. In Crimea’s Phantom War, Armed Men Face Unseen Foe: The New York Times 14. Russian Defense Ministry dismisses Ukraine ultimatum reports as ‘total nonsense’: Russia Today 15. Kerry's threats vs. Russia unacceptable, West sides with neo-Nazis - Russian FM: Russia Today 16. Ukraine crisis: US-Europe rifts surfacing as Putin tightens Crimea grip: The Guardian 17. It Begins: Gazprom Warns European Gas "Supply Disruptions" Possible: Zero Hedge
[Stories courtesy of Elliot Simon, Ulrike Marx---and Roy Stephens]
How far the blunt and threatening posture U.S. Secretary of State John Kerry took in his interview with the CBS News toward Moscow - and President Vladimir Putin in person - over the Ukraine situation was genuine and how far it was intended to meet the domestic criticism of the Barack Obama administration being "weak" in its foreign policies doesn't really matter. What matters is that Kerry demanded virtual capitulation by Russia under the shadow of U.S. retribution and that's being plain dishonest and unrealistic.
The history of the current Ukraine crisis didn't begin with the Russian Duma's authorization of Putin to use military force in Ukraine, if necessary. Kerry can easily check that out by asking his subordinate Assistant Secretary Victoria Nuland whether she indeed discussed a road map for Ukraine's color revolution on phone with the U.S. Ambassador in Kiev, Geoffrey Pyatt, during their famous "F**k-the-E.U." conversation two months ago.
In fact, that conversation took place on December 11 and the subsequent events in Ukraine, including the takeover by the new prime minister, Arseniy "Yats" Yatsenyuk, have been ditto according to Nuland's road map. Suffice to say, Kerry can't say there is no blood on his hands.
This absolute must read essay is right on the money. It was posted on the Asia Times website yesterday---and it's courtesy of Roy Stephens.
With hypocrisy befitting a hyper power, U.S. President Obama expressed “deep concern” over Russia’s decision to send troops into Crimea, calling it a “violation of Ukrainian sovereignty and territorial integrity. . . and breach of international law.”
In a 90-minute conversation described as tense, Obama and Russia’s president, Vladimir Putin, exchanged views on the crisis in Ukraine, where the country’s legitimate leader, Viktor Yanukovich, was ousted from power by violent street protests.
Obama reportedly warned Putin that Russia’s refusal to order the Russian soldiers back to their bases would result in the United States sitting on the sidelines of the upcoming G8 summit in Sochi, Russia, scheduled for June, as well as “greater political and economic isolation.”
Putin won parliamentary approval from the Senate over the weekend to dispatch military forces to the Crimean Peninsula. In defending his position, Putin drew attention to “ultra-nationalist elements” working alongside the opposition, which are being “encouraged by the current authorities in Kiev.”
Here's an op-ed piece that showed up on the Russia Today website on Sunday afternoon Moscow time---and it, too, is courtesy of Roy Stephens. It's also very much worth reading.
Last June, an affiliate of the Chinese e-commerce giant Alibaba made an offer to its hundreds of millions of users: Give us your cash, and we will pay more than Chinese banks will.
Savers swamped the company seeking interest rates that were significantly higher than the low rates fixed by the government. By early February, 81 million people had signed up for the company’s money market product called Yu’e Bao, which translates as “leftover treasure.”
The fund, which was established by Alipay, a unit of Alibaba, now has $40 billion in assets under management, making it the country’s biggest money market fund.
Other big Chinese Internet companies have followed suit, promising even higher returns than Yu’e Bao. The result is an assault on one of the crucial instruments the Chinese government uses to manage the economy: interest rates.
This article was posted on The New York Times website on Sunday sometime---and I thank Phil Barlett for sharing it with us.
1. Gerald Celente: "Ukraine May Ignite World War---and the End of All Life". 2. James Turk: "The U.S. May Be Preparing to Declare Economic War on Russia". 3. Art Cashin: "Ukraine Disaster May Create Worldwide Panic and Contagion". 4. Michael Pento: "Expect a Historic Stock Market Collapse and Global Chaos". 5. Dr. Paul Craig Roberts: "World is Now on the Edge of Nuclear War". 6. Egon von Greyerz: "The World is Now Standing on the Edge of a Precipice". 7. Robert Fitzwilson: "Warn in Ukraine and a Global Financial System Meltdown". 8. John Embry: "Ukraine, Russia, Putin, a World on the Edge---1914 and Gold". 9. The first audio interview is with Egon von Greyerz---and the second audio interview is with Dr. Paul Craig Roberts.
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]
Now that it appears clear the bottom is in for gold, it’s time to stop fretting about how low prices will drop and how long the correction will last—and start looking at how high they’ll go and when they’ll get there.
When viewing the gold market from a historical perspective, one thing that’s clear is that the junior mining stocks tend to fluctuate between extreme boom and bust cycles. As a group, they’ll double in price, then crash by 75%... then double or triple or even quadruple again, only to crash 90%. Boom, bust, repeat.
Given that we just completed a major bust cycle—and not just any bust cycle, but one of the harshest on record, according to many veteran insiders—the setup for a major rally in gold stocks is right in front of us.
This may sound sensationalistic, but based on past historical patterns and where we think gold prices are headed, the odds are high that, on average, gold producers will trade in the $200 per share range before the next cycle is over. With most of them currently trading between $20 and $40, the returns could be stupendous. And the percentage returns of the typical junior will be greater by an order of magnitude, providing life-changing gains to smart investors.
This commentary by Casey Research's Senior Precious Metals Analyst Jeff Clark, was posted in yesterday's edition of the Casey Daily Dispatch---and it's definitely worth reading.
In his recent market commentary, Chairman of Sprott Global Resource Investments Ltd. Rick Rule warned that the current upswing in commodities and precious metals could be overheating.
Over the last three months, precious metals and natural resources have edged higher. As of March 3, gold was up 9% over three months. Commodities rose by a similar number, as per the Dow Jones-UBS Commodity Index. The AMEX Gold Bugs Index, which tracks gold companies, is up 23% over that period.
Investors are piling in as a result. Bloomberg reports: “Hedge funds raised bullish gold wagers to the highest in more than 14 months amid mounting concern that the U.S. economic recovery is weakening.”
Rick believes the rally will face difficult times, testing the courage of investors currently entering the market. “These double-digit gains in many stocks over a couple of months are not sustainable,” he believes. “This recovery will need to consolidate in order to push further, so prepare for the stocks to come down in the near term, yielding attractive entry points in the summer.”
"Frothy?" "Overheated?" Spare me. The only reason that the precious metals will get sold down is if JPMorgan et al decide to pull the lever and flush the technical funds for fun and profit---as they can engineer a price decline whenever they see fit. This market is as from frothy as you can get. This edition of Sprott's Thoughts was posted on the sprottglobal.com Internet site yesterday.
In an entertaining presentation on the first day of the 2014 Prospectors and Developers Association of Canada Conference, Grant Williams, the author of "Things that make you go Hmmm” newsletter outlined why Ian Flemming’s book, Goldfinger, the seventh in his James Bond series, might soon have to be reclassified as non-fiction.
Of course, Williams acknowledged, the eponymous villain does not exist, nor is it likely that there is a concerted plot to break into Fort Knox currently being planned, but, as in the book, there is a significant flow of gold taking place from west to east. And, like in the book, much of that flow is being routed through Switzerland.
According to Williams, not only has fabrication and investment demand in the Far East, Middle East and India grown five fold since 1984, in the west such demand is below 1984 levels and has plunged over 60% since 2004 . And, importantly over this period, physical gold exchanges sprung up around the world, but almost entirely in the east.
And, he says, if one excludes the production from Russia and China, neither of which sell their mined gold onto the open market , then withdrawals on the Shanghai exchange exceeded total global mine production in 2013.
This short commentary by Geoff Candy was posted on the mineweb.com Internet site yesterday---and its definitely worth your while.
"The longer this insatiable demand continues," Jansen writes, "the more I start to ask myself where this gold is coming from. We know from Swiss refineries they're having a very hard time to source this much gold for China."
Jansen's commentary is headlined "Chinese Physical Gold Demand YTD 369 Tonnes, Up 51% Year over Year" and it's posted at his Internet site ingoldwetrust.ch. I found this must read piece embedded in a GATA release yesterday.
Gold producers that lost almost half their market value are tempting back investors from Julius Baer Group Ltd. to Invesco Ltd. who are getting set for a rebound as Chinese demand for the metal soars.
“We expect a major turn in gold equities in the next two years,” said Herisau, Switzerland-based Erich Meier, who manages about $500 million in the Julius Baer Multipartner Gold Equity Fund and other funds. “Lower production costs and much less capital expenditure spending bode very well for the industry in the near future.”
The Julius Baer fund holds Newcrest Mining Ltd., Barrick Gold Corp. and Kinross Gold Corp., according to Bloomberg data. It’s raising holdings in Lake Shore Gold Corp., Meier said in an e-mailed response to questions.
Producers including Barrick, the world’s biggest, say they’re poised to benefit from rising prices after cutting staff, selling marginal assets and lowering production costs. Gold, which posted the biggest annual slump in three decades last year after hitting a low of $1,180 an ounce, may rise to $1,500 an ounce in 2015 aided by demand from China, according to Australia & New Zealand Banking Group Ltd.
This Bloomberg gold-related news item was filed from Melbourne---and posted on their website late Sunday afternoon MST---and I thank West Virginia reader Elliot Simon for sending it our way.
Outcome of general election due in April-May with prospects of a stable new government would influence gold prices apart from equity markets, a study said.
"Gold prices in India may increase beyond Rs 32,000 per 10 grams in the coming few months in case the voters throw up a highly fractured mandate leading to an unstable government at the centre," industry body Assocham said in a study.
On the other hand, in case India gets a decisive government after elections even within a coalition framework, the investor bias will return towards equity and real estate and the gold may lose in the bargain of portfolio shuffling.
This commentary was posted on the Times of India website late Sunday morning IST---and my thanks go out to Ulrike Marx for bringing it to our attention.
India has started to make physical checks of gold stocks held by wholesalers to ensure inventories match the amount imported by banks and state-run traders, an industry association said, as the country steps up efforts to halt smuggling.
The move could aggravate shortages in the physical market as authorities seize gold without a valid provenance, boosting premiums, which rallied to a record of $160 an ounce on London prices late last year.
"Government agencies are raiding and seizing gold at various places and asking to reconcile the (gold bar) number with the imported gold," said India Bullion and Jewellers Association general secretary Surendra Mehta.
Gold was being seized if numbers do not match up, said Mehta, whose 1,200 bullion dealers and jewellery retailers plan plan to close their shops on March 10 in protest at the spot checks and import curbs.
This Reuters article, filed from Mumbai, was posted on their website in the wee hours of Monday morning EST---and once again I thank Ulrike Marx for sharing it with us.
Gold jewelers in India, the world’s second-biggest consumer, are planning a nationwide shutdown next week to demand easing of curbs on precious metal imports.
Bullion dealers and jewelers will shut shops on March 10 to protest restrictions on imports, Kumar Jain, a spokesman for the Bombay Bullion Association, said by phone. Jewelers want the import tax cut to 2 percent from 10 percent, relaxation in re-export rules and easier credit norms, he said. The association represents about 1,000 jewelers and traders.
India raised the tax on gold imports three times last year and linked shipments to re-exports to rein in a record current-account deficit and a slump in the rupee. The restrictions reduced overseas purchase and created a shortage, fueling domestic premiums to a record $160 an ounce over the London cash price in December. The South Asian country buys all its gold from overseas and made up for 25 percent of global demand in 2013, according to the World Gold Council.
This Bloomberg news item, also filed from Mumbai, was posted on their website in the wee hours of Monday morning Denver time---and I thank Ulrike Marx for her third and final offering in today's column.
A mining consultancy firm says production is up seven per cent on 2012, with 273 tonnes of gold produced last year.
Surbiton and Associates' Jim Pollock says miners have targeted higher grade ore due to the lower gold price.
"When the price goes up companies can treat lower grade ore and still make a reasonable profit, but when the prices go down the reverse is the same and companies have to actually mine higher grade ore to maintain the same profits," he said.
"Therefore the amount of gold they produce goes up and their cash costs go down."
The downside to high-grading is almost always reduced mine life, but I never saw that fact mentioned in this story posted on the abc.net.au Internet site late Monday afternoon AEDT. I thank "Tim from China" for providing today's last story.