Gold & Silver Daily
"John Embry said over a decade ago...the miners are either "ignorant, naïve...or complicit.""
 

¤ Yesterday In Gold & Silver

Gold rallied in early Far East trading on their Monday, but that didn't last long before it got sold back to unchanged from Friday's close.  Selling pressure showed up at the Comex open once again...and the low price tick of the day [$1,568.70 spot] came at 2:45 p.m. in New York.  From there it rallied a few dollars into the 5:15 p.m. Eastern time electronic close.

Gold ended the trading day at $1,574.60 spot...down $2.20.  Net volume was pretty light...around 105,000 contracts or so.

Silver followed the same path as gold did yesterday, except for the fact that there was a smallish rally in the early going in London.  From there it traded sideways before meeting the same fate as gold at the 8:20 a.m. Comex open in New York.

The low price tick [$28.35 spot] came fifteen minutes after the 1:30 p.m. Eastern time Comex close.  From there it rallied a bit into the close of trading.

Silver finished the Monday session at $28.54 spot...down 4 cents.  Volume was around 31,000 contracts.

The dollar index opened at the 82.27 mark on Sunday night in New York...and spiked up to its high of the day [82.47] around 9:30 a.m. in London.  From there it declined slowly for the rest of Monday...finishing the day at 82.15...down 12 basis points from its close on Friday.

The gold stocks got sold off the moment that trading began at 9:30 a.m. Eastern time on Monday...and then continued lower for the rest of the day...closing just off their lows.  The HUI closed down another 2.80%.

The silver stocks got slammed again...and Nick Laird's Intraday Silver Sentiment Index closed down 5.18%.

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The CME's Daily Delivery Report for 'Day 3' of the March delivery month showed that 39 gold and 21 silver contracts were posted for delivery tomorrow within the Comex-approved depositories.  The link to that activity is here.

There was a small withdrawal from GLD again yesterday.  This time it was only 19,354 troy ounces.  An authorized participant also made a withdrawal from SLV yesterday to the tune of 140,983 troy ounces.

The U.S. Mint had a sales report yesterday.  They sold 5,500 ounces of gold eagles...and a chunky 763,000 silver eagles.

Over at the Comex-approved depositories on Friday, they had a rare day where no silver was either shipped in or shipped out.

Nick Laird sent me a couple of charts over the weekend.  They are the Intraday Average Gold/Silver Price Movement for the month of February.  Starting around 2:20 p.m. Hong Kong time, the sell-off during February was relentless...with only slight differences in timing as to when the selling stopped.  For both gold and silver, those time occurred during the electronic market in the New York afternoon, long after the Comex had closed for the day.

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Try as I might, I could not get the stories down to a manageable number, so the final edit is up to you.

 

¤ Critical Reads

Ron Paul: The Sequester ‘Crisis’ And What Should Be Done

Despite what the media and politicians would have us believe, the United States did not collapse last Friday when the package of spending reductions known as “sequestration” went into effect. The financial markets hardly blinked, as they have come to be more skeptical about these periodic government-hyped “crises.”

What had been portrayed as a drastic reduction in government spending was merely a decrease in the projected rate of increase in government spending over the next decade. Under sequestration, government spending increases by $2.4 trillion over the next 10 years rather than $2.5 trillion without it.

So we are speeding toward collapse at only 100 miles per hour instead of 110 miles per hour.

Ron's short commentary was posted on his new the-free-foundation.org Internet site...and I thank reader Ken Metcalfe for today's first offering.

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Jonathan Weil: Too-Big-to-Fail Crowd Turns on One of Their Own

There's a scandal brewing at the American Securitization Forum -- and sure to be a lot of schadenfreude to follow.

The trade association "fell into turmoil last week when most of the board resigned in a dispute with the group's executive director over governance and bonuses," Bloomberg News reported today, citing six unnamed people familiar with the matter. Members that quit include Bank of America Corp., JPMorgan Chase & Co., Deutsche Bank AG and Citigroup Inc.

The article said the resignations came after the board tried, but failed, to remove the forum's executive director, Tom Deutsch. Part of the dispute reportedly concerned bonuses he was paid. Deutsch didn't return phone calls. The forum lobbies and holds conferences for the securitization industry, which packages loans and other financial assets into securities.

This short op-ed piece by Bloomberg columnist Jonathan Weil was posted on their website during the Denver lunch hour yesterday...and I thank Manitoba reader Ulrike Marx for sending it along.

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Gretchen Morgenson: Promises, Promises at the New York Fed

Two weeks ago, I wrote a column about a secret agreement struck in July 2012 by the Federal Reserve Bank of New York and Bank of America. The existence of the confidential deal was disclosed recently in court filings, which showed the New York Fed releasing Bank of America from all fraud claims on mortgage securities the Fed had bought as part of the government’s rescue of the American International Group in 2008.

The agreement spells out the terms of a deal in which the New York Fed received $43 million from Bank of America’s Countrywide unit. The money changed hands to settle a narrow dispute involving cash flows on several mortgage securities held by an investment vehicle, known as Maiden Lane II. That vehicle was created by the New York Fed as part of the rescue of A.I.G., which had held the Countrywide securities. The previously confidential agreement released Bank of America from all litigation claims on the securities held by Maiden Lane II.

But in exchange for that $43 million, the New York Fed did something else for Bank of America. It agreed to testify on behalf of the bank in its legal battle against A.I.G. over fraud claims.

This 2-page essay was posted on The New York Times website on Saturday...and it's courtesy of Phil Barlett.

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Wealth Inequality in America...and you thought you knew

This youtube.com video was posted late last year...and I actually received several copies of it over the weekend.  It's definitely worth watching.  The first reader through the door with it was Matthew Nel.

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Currency War Turns Stimulus War as Brazil Surrenders

The currency wars declared by Brazilian Finance Minister Guido Mantega are proving more a battle to salvage economic growth than a spiral of competitive devaluations.

While the yen and pound slide on the prospect central banks will intensify stimulus and South Korea’s won and Chile’s peso strengthen, volatility in the currency market is below its average of the past decade and global stocks have gained $2.15 trillion since the start of 2013. Policy makers reduced intervention over the past 12 months as foreign reserves grew at the slowest pace in four years, data compiled by Bloomberg show.

Even Mantega, who used war terminology in 2010 to criticize industrialized nations for policies that weakened their exchange rates, says he is abandoning efforts to push down the real. Federal Reserve Chairman Ben S. Bernanke and other policy makers signaled last week that currencies are a corollary, not a cornerstone, of policies to boost growth from unacceptably low levels, paving the way for what Morgan Stanley calls a third round of “Great Monetary Easing.”

This Bloomberg article appeared on their website around 10:00 a.m. Mountain time yesterday...and I thank Ulrike Marx for her second offering in today's column.

 

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Ambrose Evans-Pritchard: Brave Ireland is the poster-child of EMU cruelty and folly

It has endured a fiscal squeeze of 16pc of GDP. It has stabilized the colossal debts left from taking on the gambling losses of Anglo Irish Bank at EU behest, that is to say from shielding German, British, Dutch and Belgian lenders from systemic contagion at a critical moment.

It has clawed its way back to market credibility, issuing bonds at respectable rates. “Our last issue of routine 3-month treasury bills was at 0.26pc, not quite what Germany gets but very low,” said finance minister Michael Noonan.

It was spared serious contagion from last week’s anti-austerity revolt in Italy, evidence of sorts that the Celtic Tiger is off the sick list. Deo volente, it will be the first of the EMU victim states to regain its sovereignty by early next year and escape control of the EU-IMF Troika, though it will answer to inspectors for another 20 years and the yet unborn will be paying off the €67bn of Troika indenture until 2042.

Thirty years to get out from under a crushing debt load...paying back loans which were created out of thin air.  What kind of deal is that?  Ireland is not out of the woods yet...not by a long shot as Ambrose explains.  This story was posted on The Telegraph's website early Sunday evening GMT...and I thank Roy Stephens for his first offering of the day.

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Hundreds of thousands march against austerity in Portugal

Hundreds of thousands of people took to the streets of Lisbon and other Portuguese cities Saturday to protest against the government's austerity measures aimed at rescuing the debt-hit eurozone nation.

The rallies were organised by a non-political movement which claimed 500,000 marched in the country's capital and another 400,000 in the main northern city of Porto. There have been no official estimates of the crowds.

But the mood of the crowd was clearly political, calling for new elections with banners declaring "Portugal to the polls!" and "If you fall asleep in a democracy, you wake up in a dictatorship".

This AFP story appeared on the france24.com Internet site very late on Sunday night Europe time...and I borrowed it from yesterday's edition of the King Report.

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Swiss Voters Approve a Plan to Severely Limit Executive Compensation

Swiss citizens voted Sunday to impose some of the world’s most severe restrictions on executive compensation, ignoring a warning from the business lobby that such curbs would undermine the country’s investor-friendly image.

The vote gives shareholders of companies listed in Switzerland a binding say on the overall pay packages for executives and directors. Pension funds holding shares in a company would be obligated to take part in votes on compensation packages.

In addition, companies would no longer be allowed to give bonuses to executives joining or leaving the business, or to executives when their company was taken over. Violations could result in fines equal to up to six years of salary and a prison sentence of up to three years.

Filed from Geneva, this very interesting read was posted on The New York Times website on Sunday...and I thank Phil Barlett for his second contribution to today's column.

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Italian newcomer Grillo predicts collapse in six months

The new third power in Italian politics, former comedian and populist Beppe Grillo, has predicted financial and political meltdown within months. He said that Italy would have to renegotiate its debt repayments.

"I'd give the old parties another six months - then it will be all over here," Grillo said in excerpts of the interview released on Saturday ahead of Focus' publication. "Then they won't be able to cover pension payments or public sector salaries anymore."

"We are being crushed – not by the euro, but by our own debts. If the interest repayments constitute 100 billion euros ($130 billion) per year, then we're dead. There is no alternative," he told Focus. Any ripples on among banks or investors, Grillo said, would just have to be absorbed like in other areas of trading - likening government bonds to company shares. "If I buy shares in a company that then goes bankrupt, then that's my bad luck. I have taken a risk, and lost out."

This...and the two stories that follow...certainly indicate that it's not "business as usual" in Italy for the time being.  This articled was posted on the dw.de Internet site on Saturday...and I thank reader Norbert Wangnick for bringing it to our attention.

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Italy paralysed as Grillo plots exit route from euro

Italy plunged deeper into political chaos this weekend after Beppe Grillo, the quixotic former comedian who holds the balance of power in parliament, suggested that the country may have to abandon the euro and return to the lire.

The rebel comic's warning came amid a growing rebellion among grass-roots supporters of his Five Star Movement, with 150,000 signing a petition calling for him to open up dialogue with the centre-Left Democratic Party, the biggest force in parliament.

At 127 per cent of gross domestic product (GDP), it is the highest in the euro zone after Greece. "Right now we are being crushed, not by the euro, but by our debt," he told Focus, a weekly news magazine. "When the interest payments reach €100 billion a year, we're dead. There's no alternative."

This Italy-related story showed up in The Telegraph on Saturday...and it's courtesy of Marshall Angeles.

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Italian Elections: Europe's Lost Generation Finds Its Voice

For years, Europe's young have grown increasingly furious as the euro crisis has robbed them of a future. The emergence of Beppe Grillo's party in Italy is one of the results -- and is just the latest indication that disgust towards European politics is widespread.

Only a few weeks ago, they hardly would have thought it was possible. But now here they are; their first public appearance following their surprise success in the Italian general election. In a hotel in Rome, not far from the Piazza San Giovanni, eight of the 162 newly elected parliamentary representatives of Movimento 5 Stelle (the Five Star Movement, or M5S) are squinting into the spotlights and speaking softly -- and what they are saying actually sounds reasonable.

They are talking about empowering Italians and giving people more of a say in political decisions -- and they want to know how their tax money is being spent. Grassroots politics is the goal. Their efforts remain somewhat clumsy, but they are sincere.

This commentary was posted on the German website spiegel.de early Monday evening Europe time...and it's worth reading...and I thank Roy Stephens for sending it

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Medicine Wears Off: Is the Euro Crisis About to Return?

The recent Italian elections demonstrated that the specter of the return of the euro crisis is never far away. Not a single problem in the currency zone has been definitively resolved and some are questioning if the European Central Bank might have to intervene again.

Mario Draghi has a close relationship with the world of faith. The president of the European Central Bank (ECB) was educated at a Jesuit school in Rome, he wrote articles for the Vatican newspaper L'Osservatore Romano, and when he delivered remarks on the "crisis in the euro area" last week, he chose the Catholic Academy in Munich as the venue for his announcement. "Caring for the welfare of our neighbors is not only an ethical principle of the Christian faith," he preached, standing next to a candlelit crucifix, "it also makes eminent economic sense."

Europe's top monetary policymaker can certainly use the support of higher powers. Only a few weeks ago, he said "the worst" of the euro crisis was over. But since voters denied the proponents of the current reform policies a clear majority in Italy's recent election, providing former Prime Minister Silvio Berlusconi with a political comeback, the crisis is back.

This is another spiegel.de story from yesterday afternoon Europe time...and is also courtesy of Roy Stephens.  It's worth skimming as well.

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Greek ex-minister Akis Tsohatzopoulos imprisoned for eight years for tax fraud

A Greek court has sentenced a former defence minister to eight years in prison for failing to disclose the source of lavish wealth that made him a symbol of the corruption that has plagued the country.

Once a powerful Socialist politician who almost became prime minister in the 1990s, Akis Tsohatzopoulos has been in jail pending trial since April last year as prosecutors investigated allegations of fraudulently acquired wealth.

In the highest-profile conviction of a politician in decades, the Athens appeal court ruled on Monday that his income statements between 2006 and 2009 were false and he had failed to declare a neo-classical mansion at the foot of the ancient Acropolis when he bought it in 2009.

This article was posted on the guardian.co.uk Internet site very early yesterday evening GMT...and it's definitely worth reading.  I thank Ulrike Marx for sending it.

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Cash Airlift Helped Avert Greek Bank Run During Debt Crisis

Greece's central bank had billions of euros of banknotes shipped in from other central banks to avert a bank run during the country's debt crisis as depositors withdrew their money, newspaper To Vima reported on Sunday.

Fears the debt-laden country might ditch the euro and return to the drachma led Greeks to pull out billions of euros of savings in the last three years, stashing their cash under mattresses or in safe deposit boxes.

"While many talked about a lack of liquidity in the economy, the cash circulating ... had no historical precedent," the paper said, citing central bank officials it did not name.

Cash in circulation jumped to 48 billion euros ($62.32 billion), about a quarter of gross domestic product (GDP), in June 2012, from 20 billion before the crisis erupted, way above normal ranges of 6 to 8 percent of GDP in developed economies, the paper said.

This Reuters piece, filed from Athens, ended up on The New York Times website on Sunday morning...and I thank Phil Barlett for his third offering in today's column.

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Think New York Is Costly? In New Delhi, Seedy Goes for 8 Figures

The fading bungalow at 38 Amrita Shergil Marg does not immediately shout real estate bling.

There is no tennis court, no infinity pool, no Sub-Zero refrigerator or walk-in closet. The paint is chipped, the bathrooms are musty and the ceilings have water stains. The house may ultimately be torn down.

Yet when it went up for public auction, the winning bid was almost $29 million. And many neighbors consider that a bargain. One block away, a gracious if not quite Rockefeller-ready residence once leased by the Mexican ambassador is now reportedly on the market for more than $100 million. Other nearby houses are going for $40 million to $70 million.

Forget American and Chinese real estate bubbles, as New Delhi tops that.  This must read story from The New York Times on Saturday is courtesy of Roy Stephens.

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China "fully prepared" for currency war: banker

A top Chinese banker said Beijing is "fully prepared" for a currency war as he urged the world to abide by a consensus reached by the G20 to avert confrontation, state media reported on Saturday.

Yi Gang, deputy governor of China's central bank, issued the call after G20 finance ministers last month moved to calm fears of a looming war on the currency markets at a meeting in Moscow.

Those fears have largely been fuelled by the recent steep decline in the Japanese yen, which critics have accused Tokyo of manipulating to give its manufacturers a competitive edge in key export markets over Asian rivals.

This short AFP story was posted on the france24.com Internet site on Saturday morning...and it's courtesy of reader "h c".

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BOJ nominee Kuroda sets out aggressive policy ideas

The Japan government's nominee to be the next central bank governor outlined more forceful policy prescriptions on Monday to finally defeat deflation, saying he would not set any limits on the amount of cash the Bank of Japan pumps into the economy.

Underlining expectations he would be an aggressive governor, Haruhiko Kuroda told lawmakers the BOJ's current policies were not powerful enough to boost inflation to 2 percent, a target he said the central bank should strive to achieve in two years.

Kuroda suggested the most natural way to ramp up the central bank's stimulus for the economy would be through huge purchases of longer-dated government bonds. The BOJ should also consider kicking off its open-ended asset purchases early, rather than waiting until the scheduled start date of 2014.

This guy sounds serious, as it appears that the sky's the limit...literally.  This Reuters story, filed from Tokyo on Monday, was posted on their website in the wee hours of Monday morning Eastern time...and it's courtesy of Ulrike Marx.

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Why Is JPMorgan's Gold Vault, The Largest In The World, Located Next To The New York Fed?

GATA long has maintained that JPMorganChase & Co. is not just a primary dealer in U.S. government securities but effectively the agent of the U.S. government in all strategic markets. On Saturday, Zero Hedge's pseudonymous Tyler Durdan reports that the company's underground vault in New York, said to be the largest bank vault in the world, is adjacent and likely connected to the famous gold vault of the Federal Reserve Bank of New York.

Of course GATA also long has maintained that a primary tactic of the Western central bank gold price suppression scheme has been, with "paper gold," to create the illusion that one piece of gold is in many places at the same time. Certainly adjacent government and private vaults would facilitate such an illusion.

I thank Chris Powell for wordsmithing the above for us...and I thank Phil Barlett for being the first reader through the door with this story.

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Alasdair Macleod: A detailed look at Bank of England gold

GoldMoney research director Alasdair Macleod today reviews reports from the Bank of England, other central banks, and the research of the World Gold Council and concludes that the belief that central banks store much of their gold at the Bank of England is erroneous. And if central bank gold is not at the Bank of England as long thought, Macleod wonders, where is it and does it really exist at all? His commentary is headlined "A Detailed Look at Bank of England Gold" and it's posted at GoldMoney's Internet site.

I found this item in a GATA release on Sunday...and I thank Chris Powell for doing the heavy lifting once again.

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GATA Chairman Murphy and Secretary Powell interviewed by Future Money Trends

Dan Ameduri of the Future Money Trends Internet site interviewed GATA Chairman Bill Murphy and secretary/treasurer Chris Powell about gold market manipulation a week ago during the California Resource Investment Conference. The interview is 20 minutes long and can be viewed at Future Money Trends.

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How India aims to turn gold into paper and suppress its price, as in the West

"Current account deficit" is all over the news these days. Be it the general public, investors, foreign institutions, and government agencies, all are aware and talking about the significant deficit that the country is facing.

The other factor that they are talking about is gold imports, a concern shared by the Reserve Bank of India. India is the largest consumer of gold in the world. Its aggregate estimated demand for gold was 1,079 tonnes in 2012, almost 26 per cent of the total world demand.

The working group committee of the RBI has recommended measures to channelise gold possessions. The central bank is working on steps to channelise idle gold held by households both in rural and urban areas. Some of the measures, which investors will see getting implemented in coming days, are detailed below.

This story was posted on the deccanchronicle.com Internet site on Sunday...and I found it in a GATA release yesterday.  The headline reads "Switch to paper gold to help India".

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Gold scheme frauds on the rise in China

China's growing appetite for gold investment also resulting in increased cases of gold scheme related frauds.

Analysts said cheating investors under the guise of gold speculation on international markets is an emerging form of fraud in China as criminals exploited the investors' ignorance of gold investment to make off with the principal.

In the last six months, Chinese authorities have tried several criminals who got investors to speculate in valuable metals in false accounts or take part in illegal overseas gold or foreign exchange trading.

Wealth management professionals said victims were attracted to illegitimate service providers by the principal they required - as little as 5 percent of what legitimate wealth management institutions demand.

This article was posted on the bullionstreet.com Internet site on Monday afternoon India Standard Time...and I thank Ulrike Marx for bringing it to my attention and now to yours.

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Morgan Stanley: The Gold Bull Market Isn't Over, And The Reasons To Own It Are 'Evolving'

A notable feature of the investment landscape over the past few months has been the 12 percent drop in the price of gold since September.

During that time, we've heard some incredibly bearish calls on gold from strategists at Goldman Sachs and Credit Suisse, among other shops. Rising real interest rates are said to be the death knell for gold.

Morgan Stanley, which for a while has touted gold as its number-one investment idea in the commodity space, isn't ready to throw in the towel just yet.

This short article appeared on the businessinsider.com Internet site yesterday afternoon Eastern time...and I thank Nick Laird for sending it.

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Canada’s economy in weak position for lacking gold reserves: Sprott

Canada’s main gold reserves problem is that it has none, said billionaire Eric Sprott, the chairman of Sprott Asset Management, in an interview with CTV.ca.

The economist discusses the likely consequences for the Canadian economy of not having any gold reserves, especially in times when the price of gold keeps shrinking to the point where it lost 5.5% in value in February this year.

Last month was, in fact, the fifth down in a row for the precious metal, something that hasn't happened since January 1997.

Meanwhile, central banks around the world keep buying tons of bullion.

What does it all mean? Sprott answers.

This 4:51 minute CTV interview was posted on the mining.com Internet site yesterday...and it's courtesy of Marshall Angeles.  It's well worth watching.

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Eric Sprott: Central Bankers Are Gaming Gold

I would hypothesize that the central bankers know their policy of printing money is the most irresponsible thing imaginable, and they are suppressing gold and silver prices to hide their irresponsibility. When one is printing that much money, gold and silver prices are the first things you would expect to rise. If we saw gold going to $2,000/oz, the price of oil would probably go to a new high and the price of agricultural commodities would go up. Then you would have a huge inflation problem on your hands.

Based on my research, I believe the Western central banks have been surreptitiously supplying gold to the market. I say this because the demands I see for physical gold are way beyond the supply of gold. The annual gold supply has not changed in 12 years, and demand just keeps increasing from China, India, the U.S. Mint and silver and gold coin sales; even the non-Western central banks are buying gold. Where is this gold coming from? I think the Western central banks are selling gold to keep the lid on the price so everyone thinks their monetary policies are benign. Nothing could be farther from the truth.

This interview was posted over on theaureport.com Internet site yesterday and it's a must read for sure.

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PDAC - Two hard gold price predictions for 2013

Delegates got two hard gold price number to remember this morning during the opening salvo of newsletter writer talks on the first day of the Prospectors and Development Association of Canada (PDAC) conference now in progress in Toronto. Indeed, you can even put one on the calendar. 

Ian McAvity, author of Deliberations on World Markets, got about as specific as it gets in the gold price prediction game. 

“And I’ll tell you right now. It’s a very simple forecast. If we can break through $1,800, we’ll see $2,642 in the week of September 20th, 2013. Everyone ok with that one?” 

He added, “You’re never supposed to put price and date in the same paragraph, on the same page, let alone the same sentence.“

This story appeared on the mineweb.com Internet site yesterday...and I thank Ulrike Marx for her final offering in today's column.

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Casey Research: Gold Is Over - Just Like in 1976

Greetings from snowy Toronto, where bear-claw marks are visible all over the companies I'm meeting with. More on this shortly. For now, Jeff Clark has some excellent historical perspective for us on the current bearishness in the gold market.

Of course, there was a time for bearishness on gold - but that was in 1980, when everyone was buying, not 1976, when there was blood in the streets. That turned out to be a fantastic time to buy.

This was Louis James' 2-paragraph introduction to yesterday's edition of the Casey Daily Dispatch.  It's on the longish side, but worth the read nonetheless.

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Ted Butler: Highest Concentrated Position in Silver in History

In his latest market update, Ted Butler’s calculations show that we are witnessing a historic moment in time: the silver short position by one big player in the market has never been as concentrated as today. Please do not confuse relative concentration with the absolute volume. Unfortunately, regular investors and individuals feel the consequences of this situation as this too large concentrated position sets the short term direction of the silver price. This is exactly the long term premise from Ted Butler, and the core of his silver manipulation thesis. There is no other publicly traded asset or commodity that has such a concentration.

We were granted permission from Ted Butler to make the following excerpt public.

This short, but absolute must read commentary was posted on the goldsilverworlds.com Internet site on Sunday.

Read more...

 

¤ The Funnies

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¤ The Wrap

Over the last three reporting weeks, the total commercial net short position in COMEX silver has declined by 21,000 contracts, or the equivalent of 105 million oz. Let's put that into perspective. During that time, the world mined less than 45 million oz, recycled an additional 15 million oz and consumed that 60 million oz of total silver production. Investors also added 15 million oz to holdings (SLV and COMEX alone) over that same time period...and the price dropped by $4...or 12%. How in the world could the commercials on the COMEX buy 105 million paper oz on a 12% decline in price with the background I just described in a market that wasn’t manipulated? I’m not kidding – if anyone has a legitimate explanation, please drop me a line. - Silver analyst Ted Butler...02 March 2013

With gold down a couple of bucks...and silver down a few pennies on Monday, it was a shock to everyone to see their associated equities get slammed once again.  I would suggest that this sell-off had more to do with forced liquidation than panic liquidation.  I'm sure that virtually every precious metal mutual fund that contains their equities are getting massive redemptions...and the funds are forced to sell whether they wish to or not.

It can end up being a vicious circle at times...and this is certainly one of those.  Here's the 3-year HUI chart as 'for instance'.

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As many pundits have stated, the XAU/GOLD Index is at an all-time record low...and here's the 3-year chart for that.

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I have no idea whether we'll go lower from here or not.  But as I've been saying for years, the miners will never address the real issue...and that's the price management scheme in all four precious metals by JPMorgan et al.  And as I said last week, they'd rather let their companies crash and burn than live up to their fiduciary responsibilities to their shareholders...and if you doubt me, just pick up the phone and talk to any precious metal mining company about this.  Normally I'd tell you what the answer will be, but you should find out on your own.  But I can tell you that they don't give a damn about you...and that's one of the things you'll find out pretty quick.

And don't expect anything from either the World Gold Council or The Silver Institute.  The reason they are there is to make sure that this issue never sees the light of day within the gold and silver mining industry.

As Sprott Asset Management's John Embry said over a decade ago...the miners are either "ignorant, naïve...or complicit."  Two of those three cop-outs existed ten years ago, when it was just us "conspiracy theorists" pounding at the gates.  Well, conspiracy theory has now become conspiracy fact...and "ignorant and naïve" no longer apply...as everyone one of them knows what's going on, even if they won't publicly admit it.  And the fact that they aren't doing anything means that they are all complicit now...silent co-conspirators along side JPMorgan et al.  You couldn't make this stuff up.

In overnight trading, the gold price rallied until about 3:00 p.m. in Hong Kong...and has since rolled over, but is heading a bit higher in London as I hit the 'send' button.  Silver rallied even more strongly, but got hammered as it tried to break above the $29 spot price mark going into the London open.

Gold volume, as of 5:15 a.m. Eastern time, is slightly higher than 'normal' for this time of day...and silver's volume is substantially higher, as I suspect that JPMorgan had to throw a lot of short contracts at that rally to prevent it from blowing sky high, which it would have done had they not shown up to put out the fire. The dollar index has been heading lower all night...and as of this writing is down about 23 basis points.  As I hit the 'send' button at 3:20 a.m. Eastern time, gold is up about seven bucks...and silver is up 30 cents.

Today, at the close of Comex trading, is the cut-off for this Friday's Commitment of Traders Report.  Last Tuesday we had a big rally in both metals, which really distorted the COT numbers in last Friday's report.  But since then, JPMorgan et al have got prices back down again, so if things don't blow up again today, we might actually get a more realistic look at the short positions in both gold and silver on Friday.  We'll just have to wait and see what happens in New York, as that's where all the trading activity that really matters, takes place.

See you tomorrow.