Gold & Silver Daily
"I don't think the IMF, the ECB or the U.S. Federal Reserve have a clue what to do"
 

¤ Yesterday In Gold & Silver

After hammering gold and silver into submission on Monday, it was business as usual for JPMorgan et al during Far East and most of London trading on Tuesday.  Gold faded a hair as the Tuesday trading day progressed, with the low tick [$1,599.30 spot] coming just minutes before 9:00 a.m. in New York.

The subsequent rally got capped a bit shortly after the London p.m. gold fix...but then struggled higher to its high tick of the day [$1,617.00 spot] which came shortly after 1:00 p.m. Eastern.  From that high, gold got sold down a few dollars going into the Comex close...and traded sideways from there.

The gold price finished the day at $1,612.80 spot...up a measly $7.00...but it should be obvious to all and sundry that it would have traded much higher than that if allowed to do so...which it obviously wasn't.  Volume, net of all roll-overs out of the April delivery month, was on the light side at around 122,000 contracts.

Silver's price pattern was somewhat similar, but it got sold off about two bits the moment that Comex trading began in New York...and it's low [$28.57 spot] was also just minutes before 9:00 a.m. Eastern time.

The subsequent rally got capped around 10:40 a.m. in New York...and from there got sold off going into the 1:30 p.m. Eastern time Comex close.  From there it traded more or less flat into the 5:15 p.m. electronic close of trading...and back under the $29 spot price mark.  Silver's high tick was $29.23 spot, so it traded over a two percent price range again yesterday.

Silver finished the Tuesday session at $28.91 spot...up a penny from Monday's close.  I'm underwhelmed.  Like gold, silver would have closed materially higher in price if allowed to do so.  Gross volume was around 38,000 contracts.

And now for platinum and palladium.

They weren't doing a thing price-wise yesterday...but at, or just minutes before, the 4:00 p.m. GMT London close [11:00 a.m. in New York] a high-frequency trader masquerading as a not-for-profit seller hammered both metals for no reason that I could fathom.  The beatings stopped right at the Comex close, and the subsequent rallies...such as they were...didn't get far.

Platinum got blasted below its 200-day moving average...and palladium closed below its 50-day moving average...and I'm sure that these engineered price declines were specifically designed to force the technical fund longs to puke up their positions, just as JPMorgan et al do in silver and gold.  We'll know how successful they were in this Friday's Commitment of Traders Report.

It's a safe bet to say that the CFTC won't ask any questions of the CME about this...and neither will the miners.

When trading was done in all four precious metals yesterday...gold finished up 0.44%...silver was up 0.03%...platinum was down 'only' 1.40%...but palladium got it in the neck to the tune of 3.55%.

The dollar index opened at 82.66 in the Far East early on their Tuesday morning...and then chopped around that value until the London p.m. gold fix at 10:00 a.m. Eastern time.  The index then rallied up to the 83.05 mark just before 1:00 p.m. in New York...and spent the rest of the afternoon attempting to stay above the 83.00 mark.  It did...and closed at 82.04...up 38 basis points from Monday.

The gold stocks opened in slightly negative territory, but broke into the green as the gold price rallied.  They stayed in positive territory until just shortly after gold's high tick was in around 1:00 p.m. Eastern...and then fell back into negative territory rather quickly.  However, there was obviously a buyer around...and they managed to close the gold stocks barely in the green...and the HUI finished up a miniscule 0.13%...which is better than the alternative, I suppose.

The silver stocks were all over the place, but mostly finished in the red...as did Nick Laird's Silver Sentiment Index...which closed down a smallish 0.31%.

(Click on image to enlarge)

The CME's Daily Delivery Report, like Monday's report, was pretty eventful for this time of the delivery month.  It showed that 181 gold and 200 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  In gold, Canada's Bank of Nova Scotia was the biggest short/issuer with 179 contracts...and Barclays was the lone long/stopper on all 181 contracts.  In silver, Credit Suisse was the short/issuer on all 200 contracts.  Canada's Bank of Nova Scotia and JPMorgan Chase were the only two big long/stoppers of note, with 103 and 89 contracts respectively.  The link to yesterday's Issuers and Stoppers Report is here.

For only the second time in 2013, the GLD ETF actually added metal to its inventory, as an authorized participant deposited 87,079 troy ounces yesterday.  But in SLV, there was finally a withdrawal of note, as 4,832,080 troy ounces of silver was shipped off to parts unknown.  Based on the current price action, I suspect that this withdrawal was not normal investor liquidation.  It would be my guess that the metal was needed more urgently elsewhere, so the owner redeemed their shares and took it.

The U.S. Mint had another sales report yesterday.  They reported selling 2,000 ounces of gold eagles...500 one-ounce 24K gold buffaloes...along with another 54,000 silver eagles.

Over at the Comex-approved depositories on Monday, they reported receiving 69,440 troy ounces of silver...and shipped 247,608 troy ounces of the stuff out the door.  The link to that activity is here.

Here's a chart that Nick Laird sent me on Sunday, that I wasn't about to post in what was already an overcrowded column on Tuesday...so here it is today.  It's titled "Intraday Average Gold Price Movements"...and it's based on a 5-year rolling average...and also on German gold analyst Dimitri Speck's orginal work on this subject.

Note the high tick of the day at precisely 9:00 a.m. in London trading...the a.m. London gold fix...the 8:20 a.m. Comex open in New York...the 9:30 a.m. Eastern time high tick for gold in New York...and the London afternoon gold fix.

No matter what the BIS and the bullion banks do, they can't hide their tracks when using five years worth of data.  It exposes the price management scheme to all...except for those who will never accept the truth [or admit to it] no matter what proof is presented to them.  And as Nick Laird pointed out in his covering e-mail..."The LBMA effect is blatant."

That it is.

So, if the CFTC is looking for evidence of price fixing at the 'fixes'...this is pretty much the only chart they'll need.  But let's face it, dear reader, they already know this stuff...and are only going through the motions...just like they're doing with the four and half year 'investigation' into the silver price fixing case that involves not only the CFTC...but the CME Group and JPMorgan Chase as well...and dare I mention Canada's own Bank of Nova Scotia...along with HSBC USA as well?

The mining company executives and their respective boards of directors know it too...as do all the 'persons of interest' that work at the World Gold Council and the Silver Institute.  None of them, especially the miners, have the slightest interest...or intention...of going to the rescue of their stockholders...even if it's in their own personal...along with their company's best interests to do so.

How did it come to this?

(Click on image to enlarge)

Just when I thought that this Cyprus saga couldn't get any worse...it does.  The government in that country just voted down the idea which, in reality, was no surprise.  So now what?  The stage is set for a massive run on the banks in that country.  When the banks finally do open, every person with a bank account and two synapse to rub together will be standing there to withdraw their money...all of it...and if they don't withdraw it, they'll wire it out of the country and out of reach.  Then there's the not-so-little matter of where all the cash is going to come from when the depositors rush the wickets.  They'll soon discover the true meaning of the term "Fractional Reserve Banking."  What the %#&@ were the IMF, ECB and the U.S. Fed thinking about?  This is what happens when you put a bunch of sociopaths in a room together.

You couldn't make this up if you tried.

I have a fair number of stories for you again today...and the final edit is up to you.

 

¤ Critical Reads

U.S. Deposits in Perspective: $25 Billion in Insurance...$9.28 Trillion in Deposits...and 297.5 Trillion in Derivatives

Yesterday, the American Banking Association reminded Americans that there is absolutely nothing to worry about when it comes to the sanctity of US deposits: after all there is a whopping $25 billion in the FDIC insurance fund which means "insured depositors are safe and their deposits are protected by a strong FDIC fund....The FDIC insurance fund has over $25 billion in reserves and the banking industry."

Obviously supposedly "insured" depositors in Cyprus also though there was nothing to worry about, until they woke up on Saturday with a haircut between 6.75% and 9.9% on their money in the bank. Sadly, it may be the case that the ABA is being just modestly disingenuous in its statement. Why? Instead of explaining it in detail, here is a snapshot that does more than thousands of words ever could.

The embedded chart, drawn to scale, is a must view...and it was posted in this Zero Hedge article yesterday.  I thank Manitoba reader Ulrike Marx for today's first story.

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JPMorgan, MF Global trustee reach $546 million settlement

JPMorgan Chase & Co. has reached a $546 million settlement with the trustee liquidating the failed broker-dealer unit of MF Global Holdings, a court filing showed, an amount that will help repay the brokerage's customers.

As part of a settlement reached with James Giddens, the trustee who is tasked with liquidating MF Global Inc, JPMorgan will pay $100 million that will be made available for distribution to former MF Global customers.

JPMorgan will also return more than $29 million of the brokerage's funds held by the bank while releasing claims on $417 million that was previously returned to Giddens.

This short Reuters story was filed from Bangalore in India earlier today...and I plucked it from another GATA release that Chris just filed from Hong Kong during their Wednesday evening.

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JPMorgan: Cyprus Could Still Default, and the Market is Underestimating the Risks

Markets have mostly shrugged off the news out over the weekend that the EU bailout of the Cyprus banking system will contain a controversial haircut on depositors – an unprecedented move in this era of euro area bailouts and restructurings.

European markets took a bit of a hit yesterday, but nothing on the scale that would indicate investors in Spain and Italy, for example, are worried about the fallout from the Cyprus deal.

In a note titled "Why the market is underestimating Cyprus," JPMorgan economist Alex White challenges this notion, explaining why the Cyprus deal could still spoil the party in Europe.

This article appear on the businessinsider.com Internet site at noon Eastern time yesterday...and it's the first of many from Roy Stephens.

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Russian oligarchs stung by Cypriot bank tax

Russia's elite are angry. Cyprus's plan to seize deposits is "unfair, unprofessional and dangerous," said Russian President Vladimir Putin's spokesperson Monday (18.03.2013). Russian Prime Minister Dmitry Medvedev added fuel to the fire. "This simply looks like the confiscation of other people's money," he said.

Events in Cyprus also affected Moscow's stock exchange, as shares from two major Russian banks - VTB and Sberbank - dropped roughly five percent when trading started. According to media reports, both banks are said to have more than $10 billion (7.7 billion euros) stashed in deposits in Cyprus.

This news item was posted on the dw.de Internet site yesterday...and I thank Ulrike Marx for he second story in today's column.

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Protecting Their Own, Russians Offer an Alternative to the Cypriot Bank Tax

When the European Union said it would bail out Cypriot banks by seizing a percentage of deposits, Cypriots erupted. Russian government officials also raged, on behalf of Cyprus’s many Russian depositors.

Meanwhile Gazprom, the giant Russian energy company, quietly acted by offering a private bailout plan. Rather than tax deposits, Cyprus could raise money to right its economy by selling Gazprom exploration rights to offshore gas deposits in the Mediterranean Sea.

The fate of this proposal is uncertain. Gazprom refused to confirm it even made an offer. But it illustrates how a sprawling, wealthy company so deeply entwined with President Vladimir V. Putin of Russia that it is often called a state within a state is willing to seize an opportunity and exploit weaknesses and divisions within Europe to cement its position and power.

Welcome once again to the "New Great Game".  This story was posted on The New York Times website yesterday evening...and is also in section B2 of today's print edition as well.  I thank Phil Barlett for bringing it to our attention.

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Plane Tickets From Moscow To Cyprus Are Sold Out

C4 News Economics Editor Faisal Islam tweets an interesting anecdote about the unfolding Cyprus situation: "every flight I can see from Moscow to Cyprus is full, apart from two seats". Unusual, as its not holiday season.

We're not sure exactly what this means, but there are a lot of worries that due to a controversial aspect of the Cyprus bank bailout – a haircut on depositors – moneyed Russian interests using the Cypriot banking system as an offshore tax haven will look to move their funds elsewhere as soon as they get the chance.

Well, dear reader, I'd guess that these planes are loaded with hit men.  When they get there, they'll be given their targets...and those will be any politicians that  voted for the 10 percent haircut. Fortunately for them, it was a unanimous vote. This tiny story...and you've already read most of it...was posted on the businessinsider.com Internet site during the New York lunch hour yesterday.  I thank Roy Stephens for sending it.

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U.K. sends plane-load of cash to Cyprus for its troops

Britain sent a military plane carrying 1 million euros ($1.3 million) in cash to Cyprus on Tuesday for its troops on the island in case cash machines and bank cards stop working, the defense ministry said.

About 3,500 British military personnel are based in Cyprus, which has been granted a 10 billion euro bailout. But a tax on its banks' depositors as part of the deal sparked outrage and rattled financial markets.

"An RAF (Royal Air Force) flight left for Cyprus this afternoon with 1 million euros on board as a contingency measure to provide military personnel and their families with emergency loans in the event that cash machines and debit cards stop working completely," the Ministry of Defence said in a statement.

"We will keep this under review and consider further shipments if required."

This Reuters story, filed from London yesterday, was picked up by the finance.yahoo.com Internet site...and I thank West Virginia reader Elliot Simon for sharing it with us.

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Cyprus parliament rejects bank deposit tax, putting bailout in disarray

Parliament on Tuesday overwhelmingly rejected a proposed levy on savings in banks as a condition for a European bailout, throwing international efforts to rescue the latest casualty of the euro zone debt crisis into disarray.

The vote in the tiny legislature was a stunning setback for the 17-nation bloc; lawmakers in Greece, Portugal, Ireland, Spain, and Italy have all accepted unpopular austerity measures over the last three years to secure European aid.

With hundreds of demonstrators facing riot police outside parliament and chanting "They're drinking our blood," the ruling party abstained and 36 other lawmakers voted unanimously to reject the bill, bringing the Mediterranean island, one of the smallest European states, to the brink of financial meltdown.

This Reuters article was posted on their website early yesterday evening...and I consider it a must read, as it's the most up-to-date story I have on the current situation.  I found it in a GATA release that Chris Powell posted from Hong Kong much earlier today.

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Banks In Cyprus Could Be Closed For Another Week, ECB Working On 'Insane' Plan

They were originally supposed to re-open their doors today after a bank holiday Monday.

Then, it was reported that they would remain closed until Thursday.

A new report from Dow Jones suggests that Cypriot banks now won't be re-opened until next Tuesday.

Who knows for sure really.  As I said in this space yesterday..."the situation remains very fluid"...and nothing has changed that assessment.  This very short businessinsider.com story is a must read for sure...and it's another offering from Roy Stephens.

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CYPRUS: Two Possibilities For What Happens Next

Société Générale S.A. analyst Anatoli Annenkov gives two possibilities.

1) Cyprus finds alternative measures to raise the €5.8 bn that the deposit levy would have raised: either through a higher haircut on deposits over €100,000 and a lower on smaller deposits (or none at all, as favoured by the eurogroup), but such options seem to have been rejected, as it would damage Cyprus status as a financial centre. Or they could also sell state assets, such as gas reserves (or banks), possibly to Russian interests, or find other creditors (Russia).

2) The eurogroup shows flexibility and accepts that the debt level in Cyprus rises to 120% of GDP, similar to what was agreed for the Greek bailout, possibly in return for stricter conditionality (more banking oversight and restructuring, lower interest rates on deposits). Depending on the structure of such deal and interest rates, this could reduce the amount Cyprus would need to raise by some €2.5 bn. The remaining €3.3 bn would still need to be found, either from a deposit levy (on deposits over €100,000), bondholder bail-in, other investors or selling of state assets.

There are actually three other possibilities, with lower odds attached to them.

This businessinsider.com article was posted on their website early yesterday evening Eastern time...and it's courtesy of Roy Stephens once again.

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Nigel Farage Message To Europeans: "Get Your Money Out While You Can"

In Nigel Farage's first TV appearance since the Cypriot wealth tax was announced, the Englishman pulls no punches. In all his years and all his experience of the desperation of the European Union's leadership "never did [he] think they would resort to stealing money from people's savings accounts." The simple fact is that they know they cannot let any country leave, no matter how small, for "once one country goes, the whole deck of cards will come tumbling down."

There are now "clear irreconcilable differences" between the North and the South of Europe and now that they have done this in one country, "they are quite capable of doing it in Italy, Spain and anywhere." The message that sends to people is "get your money out while you still can."

This 5:04 video clip was posted on the Russia Today website on Monday, the day before the vote was taken...and picked up at the zerohedge.com Internet site.  I thank Marshall Angeles for sending it along...and it's definitely worth watching.

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France budget minister Cahuzac resigns over tax probe

Mr. Cahuzac has denied any wrongdoing following a report by an investigative website that he had an undeclared Swiss bank account until 2010.

Mr. Cahuzac gained a reputation as a vocal crusader against the use of overseas tax havens.

On Tuesday, prosecutors announced a full investigation into the Swiss bank account that the minister allegedly used to hide assets from the tax authorities.

This news item was posted on the bbc.co.uk Internet site early yesterday afternoon Eastern time...and it's another offering from Ulrike Marx.

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Icelandic bank Kaupthing's top executives indicted over market rigging

Icelandic banker Sigurdur "Siggi" Einarsson, who ran Kaupthing bank from offices in Mayfair until its collapse five years ago, is among nine former senior staff who have been variously charged in Reykjavik with orchestrating five large-scale market manipulation conspiracies.

Further details, to be released by the courts later this week, are expected to allege a conspiracy by Kaupthing executive chairman Einarsson and other bosses at Iceland's largest bank, claiming they secretly used the bank's funds to indirectly buy Kaupthing shares in the hope of propping up its share price.

The criminal case is the largest in a series of fraud prosecutions that have been brought to court in Iceland in recent years, and may be one of the largest alleged market manipulation conspiracies ever seen in Europe.

This very short article appeared early yesterday evening on the guardian.co.uk Internet site...and it's worth reading.  I thank Swiss reader B.G. for finding it for us.

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Suntech Defaults on $541 Million Bond, a First for China

Suntech Power Holdings Co. Ltd. became the first company from mainland China to default on its bonds after failing to repay $541 million of notes due March 15, breaching terms of other outstanding loans.

The move pushes what was once the world’s biggest solar panel maker into default on credit lines it has with International Finance Corp. and Chinese domestic lenders, Suntech said today in a statement from its headquarters in Wuxi. China Development Bank Corp. has loans to Suntech.

The move opens the way for Suntech note holders to sue the company in the U.S., where its shares and bonds trade. Last week, Suntech obtained an agreement of holders of 63 percent of the notes to delay exercising their rights until May 15, allowing executives to press ahead with restructuring payments. Some note holders not involved in those talks are organizing a rival group and have threatened to sue.

This Bloomberg story was posted on their website early on Monday morning...and I found it in yesterday's edition of the King Report.

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Three King World News Blogs

The first blog is with John Embry...and it's headlined "Cyprus Catastrophe Has People Scared to Death".  Next comes Nigel Farage...and this interview is more recent than the above posted RT video...and after the vote in Nicosia yesterday.  This blog is titled "Cyprus Rejection Sets Up a Crash in Markets".  Lastly is this blog with Jim Sinclair...and it's entitled "The Next Danger After Putin Crushes IMF in Cyprus".

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Adrian Ash: CFTC, communism and fixing the gold fix

So, is the London gold fix a fix? US derivatives-market regulators think it might be.

The CFTC is no doubt absolutely within its rights to question the use of certain prices as reference points (aka "marks") in US transactions. Joining the International Roundtable on Financial Benchmarks three weeks ago, its commissioner Bart Chilton said he also thought many other markets might deserve attention, too. But quite what a Washington commission overseeing the US futures markets might achieve – or hope to – as regards the London Fixings as a process, however, we can't imagine.

This must read article was originally posted on the bullionvault.com Internet site on the weekend...and was picked up by the mineweb.com on Sunday.  Don't bother sending him any of Nick Laird's gold price management scheme charts that have appeared in this column during the last week...even the one posted above in today's column...because Adrian won't believe it no matter what the charts show.

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Sprott on banks, gold and silver – mania, manipulation and meltdown

Eric Sprott may have surprised a new audience with some very pessimistic views on banks and the global economy, but spoke very positively on the investment merits of gold – and particularly of silver.

In introducing his talk to the audience at the first full day of Mines & Money Hong Kong (Conference and Exhibition) mega precious metals bull Eric Sprott opened by explaining why he titled his presentation Mania, manipulation and meltdown – although those who follow him will already be pretty well aware of his views, and his strong track record.

The bulk of his talk was taken up by examining the politico-economic aspects of what is going on in the world today with the main theme that government debt has become so big – and is continuing to grow – that it has passed its Minsky Moment – the point at which debt has become so large that it can never be paid off.  In many respects, according to Sprott, this is because the banking system has become too large so that, in many cases it is bigger in value than the company in which it is domiciled.  Following the Lehmann Brothers collapse nearly bringing down the entire global banking system, banks are just being bailed out at ever increasing cost if they become totally illiquid for fear of the first domino falling and bringing down the rest of the system – they are just getting too big to fail at whatever cost, but eventually the dam could burst.

Eric gave his Hong Kong speech earlier today...and I found this commentary about it posted on the mineweb.com Internet site in the wee hours of this morning.  I know that Lawrie Williams is at the conference, so he wasted no time in getting this up on their website.

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John Embry: Manipulation of gold market at all-time high

There's been a big disconnect between what's happening to gold...and the fundamentals that would normally help set its price.

Consider this: Not only have we seen escalating currency wars, but both the Chinese and the Russians have been buying up gold as if there were no tomorrow.

Moreover, Germany has announced its intention to repatriate part of its gold reserves held abroad.  Still, gold prices have been driven relentlessly lower.

What this, of course, shows is the short-term power of the paper gold market.

John's commentary was written for the March edition of Investor's Digest of Canada...and was posted on the sprott.com Internet site last Friday...and I just discovered in on Monday, but saved it for today because of the number of stories I had in this column yesterday.  It is, of course, a must read. Note that, depending on your browser, this may take more than a few seconds to load.

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Credit growth endangered in India as gold lures deposits

Indian banks are struggling to attract deposits to fund credit growth amid the slowest economic growth in a decade as customers buy assets such as gold and real estate to protect themselves against inflation.

The credit-to-deposit ratio at lenders led by State Bank of India widened at the end of last month to almost 79 percent, or the highest since the central bank began reporting the data in 1998. Meanwhile, physical savings including gold imports, which slumped to 45 percent of household assets in the 1990s, may end this month at about 66 percent, Vishal Narnolia, a Mumbai-based analyst at SMC Global Securities Ltd., estimated.

The accelerating flow of funds into gold -- spurred by households seeking to curtail erosion in the value of their savings -- may hinder policy makers efforts to bolster growth in Asia's third-largest economy. New deposits aren't keeping pace with lending, especially at private-sector banks such as ICICI Bank Ltd., according to central bank data, signaling that credit growth may halt.

This Bloomberg article was filed from Mumbai early on Monday Mountain time...and I found it in a GATA release yesterday.

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Chinese Tax Lifted from Gold Pandas

Buyers in China are generally charged a Value Added Tax of 17 percent on coins they buy. Several weeks ago, this tax was lifted for gold Panda coins. This gives gold Pandas a privileged position among Chinese coin buyers that other coins don’t enjoy. Given the demand for gold among China’s citizens, this is a very interesting development.

The effects of this policy are likely to push demand for gold Pandas even higher than it already is. It may also have the effect of creating a whole new group of collectors in China as buyers discover the charms of the coins that change design from year to year. All in all, 2013 is likely to be a very exciting year indeed for Panda collectors.

There isn't much else of interest in this story that was posted on the numismaster.com Internet site on Monday...but I thank Elliot Simon for alerting us to this development.

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Sprott study of trade data suggests huge export of U.S. government gold

Sprott Asset Management's Eric Sprott and Shree Kargutkar report that their study of 22 years of international trade data suggests that the United States has exported almost 4,500 tonnes of gold beyond the country's supply capability.

Sprott and Kargutkar write: "The only U.S. seller that would be capable of supplying such an astonishing amount of gold is the U.S. Government, with a reported gold holding of 8,300 tonnes. The U.S. Government's gold holdings have not been audited or verified in more than four decades. The U.S. trade data defines the export of nonmonetary gold as a sale of gold from a private seller within the U.S. to an official agency. In September 2012 we espoused that the Western central banks have been surreptitiously selling or leasing their gold through private channels in an effort to increase the available supply and in turn suppress prices. This new analysis using official U.S. agency numbers seems to provide the strongest validation of our hypothesis to date. It is worth noting that our data covers only two decades and that the export gap could in fact be significantly larger if earlier numbers were included or the real private investor demand for gold was known."

The Sprott and Kargutkar "Markets at a Glance" commentary is headlined "Do Western Central Banks Have Any Gold Left? -- Part II" and it's posted at the Sprott Internet site.  I thank Chris Powell for the headline...and the extensive preamble above.  It's a must read for sure.                                                                  

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¤ The Funnies

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¤ The Wrap

If you’re caught with an ounce of cocaine, the chances are good you’re going to go to jail. If it happens repeatedly you may go to jail for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night. - Senator Elizabeth Warren

There are time when I just don't know what to write...and this is one of those times.  I can only see one possible thing that can save us from the mess that the powers that be have put our beloved Planet Earth in.  And as Sprott's David Franklin said yesterday...Cyprus was a 'Rubicon Moment'...and I have to agree.  I knew ages ago that Cyprus was going to be a huge problem when its day of reckoning arrived, but not in my wildest imaginations did I consider a scenario like this one.

We're really day-to-day on this situation...and I don't think the IMF, the ECB or the U.S. Federal Reserve have a clue what to do...and are caught between the proverbial rock and a very hard place.

I'm always on the lookout for the world financial system's last ace in the hole...and that's a repricing of the world's gold reserves to balance the books of the west's central banks.  But as Eric Sprott has alluded to in his latest "Markets at a Glance" commentary posted above...who the hell really knows who has got what in terms of physical gold...and if they do have it, who really owns it...at least on paper.  But when push becomes shove at some point...as it surely will...possession will determine who owns what, as the paper that says it belongs to someone else won't be worth framing.

One thing that I am sure about...and that's when the repricing comes, it will come on a weekend, just like this Cyprus deal.  It will be a fait accompli...and as I said before, you'll either be all the way in, or all the way out when that time comes.

Here's one more chart that Nick Laird sent me that didn't make the cut for yesterday's column...and that's the "Total PMs Pool".  You can see that despite the ferocious price capping by JPMorgan et al...the total ounces continues its climb from lower left to upper right.

(Click on image to enlarge)

The time has come to diversify your precious metal holdings outside your country of domicile...especially if you call the United States your home.  The names that come to mind in no particular order are Goldmoney.com, The Perth Mint, Sprott Physical Bullion Trusts...and Bullion Management Group, as well as Central Fund of Canada.  I chose these because the companies themselves, plus all their physical bullion holdings are outside of the United States...and some, such as GoldMoney, have depositories in multiple foreign jurisdictions.

Why wait any longer?  I'm sure that the good citizens of Cyprus wish they had acted on similar advice before last Friday.  Now look where they are, as they can't even get into their own banks until their government decides to reopen them.

In Far East trading there sure wasn't much price or volume activity during their Wednesday...and the same can be said for early London trading as well.  Volumes in both metals are even lighter than they were this time yesterday...and the dollar index is still hanging in their around the 83.00 mark, but only by its fingernails.

I haven't the foggiest as to what might happen in New York trading today, but unless I miss my guess entirely, any budding rally will get capped...and it will be interesting to see what's in store for both platinum and palladium after they got the living crap kicked out of them yesterday.

See you tomorrow.