Casey Research Publication
Gold & Silver Daily
"As I've said before, this is the Anglo/American precious metals price management scheme laid bare for all that care to see it."
 

¤ Yesterday In Gold & Silver

Not much happened during the Far East trading day on Friday. The five bucks that gold did gain during their business day evaporated shortly after the London open...and the gold price proceeded to hug the $1,700 spot price mark right up until precisely 8:30 a.m. in New York.

Then the jobs numbers were posted and...as happens more often than not...down went the gold price.

After getting sold off about twenty-five bucks in thirty-five minutes, gold rallied a hair into the London p.m. fix at 10:00 a.m. Eastern time. Then a short-covering rally of some note appeared out of nowhere...and thirty-five minutes later, gold was above $1,710 spot...where it spent most of the rest of Friday's New York session.

Gold closed at $1,713.50 spot...up $14.00 on the day. Net volume was pretty impressive...in the area of 181,000 contracts. The New York high was $1,716.90 spot...and the low was $1,675.80 spot...a forty-one dollar price range.

Silver gained a bit for the first two hours of Far East trading...and then slowly sold off until shortly before 9:00 a.m. in London...the same London low as gold. From there it rose slowly...making it almost back to the $34 price level by 8:30 a.m. in New York.

Thirty-five minutes after the jobs report came out, silver was down about eighty cents...and from that 9:05 a.m. low, silver gained back over a dollar by 10:35 a.m. Silver, like gold, traded sideways from there.

Silver closed at $34.32 spot...up 44 cents. Net volume was pretty chunky at 47,000 contracts and, like gold, a large percentage of the volume would have been of the HFT variety.

With the benefit of 20/20 hindsight, the dollar index low [79.06] came about 3:10 p.m., during the New York trading session on Thursday afternoon. From there, it developed an upward bias that increased in strength starting shortly before midnight on Thursday night...and by 7:30 a.m. Eastern time on Friday morning, the dollar index was up a bit over 30 basis points off that low.

Then away it went to the upside...and by 11:30 a.m. in New York, the dollar index had tacked on another 65 basis points...reaching its 80.50 high. From there it traded down a hair into the close of electronic trading at 5:15 p.m. Eastern time.

Here's the three-day dollar index chart to put the entire rally into perspective.

The gold stocks pretty much mirrored the price action in the metal itself...with the 10:35 a.m. peak equities/gold price the standout feature on the HUI chart below. From there it traded sideways until shortly after lunch in New York...and then got slowly sold off to unchanged by the close of trading at 4:30 p.m. Eastern time. The HUI actually did finish up 0.10%...but that's basically unchanged to me.

There's no silver equivalent to the HUI...but I would think that the if Nick Laird's Silver Sentiment Index was a live chart, it would have been pretty much a mirror image of the HUI. The silver stocks did marginally better...and Nick's SSI chart was up 0.70% on Friday.

The CME's Daily Delivery Report was a bit more interesting...as 80 gold and 113 silver contracts were posted for delivery on Tuesday. As has been the case for months now, Jefferies was the short/issuer of all 113 silver contracts...and JPMorgan was the biggest long/stopper with 87 contracts...16 contracts in its client account and 71 contracts in its proprietary [in-house] trading account. The link to the Issuers and Stoppers Report is here.

And, for the second day running, there were no reported changes in either GLD or SLV.

The US Mint had another small sales report. They sold 2,500 ounces of gold eagles and 50,000 silver eagles. Month-to-date the mint has sold 19,000 ounces of gold eagles....12,000 one-ounce 24K gold buffaloes...and 745,000 silver eagles.

The Comex-approved depositories reported receiving 596,899 troy ounces of silver...all of into Brink's, Inc...and they shipped out 135,393 ounces. That action is linked here.

Well, I was expecting a terrific Commitment of Traders Report...and it was beyond even my expectations. In silver, the Commercial net short position declined by an incredible 8,797 contracts, or 44.0 million ounces. That's the second-largest weekly decline that I can remember...so you can see that "da boyz" were serious.

In gold, the Commercial net short position declined by an eye-watering 45,1431 contracts...or 4.51 million ounces of gold.

These are huge improvements, to be sure, but we're still miles away from the absolute lows of late December...and JPMorgan et al. would have to pull off another drive-by shooting of absolute biblical proportions to get their short positions back to where they were back then.

Can they do it...or will they do it? I don't know, but I'd put nothing past them. This week's COT report puts silver back in the mostly bullish camp I would think...and gold back at neutral at best, so prices could still go either way.

I only had a brief moment to discuss anything with Ted Butler yesterday...and I look forward to his weekend report to his paying subscribers with great interest when he posts it on his website later today. He goes much deeper into the COT than any other commentator on the Internet, as he uses the disaggregated report instead of the long form report that I and everyone else uses...so he sees far more detail of what's going on. I'll steal what I can for my Tuesday column.

As for the monthly Bank Participation Report...which is compiled from the same data as Tuesday's COT data above...the four largest US bullion banks increased their net short positions in silver by 2,825 contracts from February to March...and that's after the big smash-down that began on February 29. One can only imagine how big that number would have been if the big engineered price decline hadn't occurred.

As of the Tuesday cutoff, these four US banks are currently net short 23,665 Comex futures contracts...118.3 million ounces. I'd guess that 90% of those are held by JPMorgan all by itself. These contracts represent 26.4% of the entire Comex futures market in silver, once all the market-neutral spread trades are removed. That's called a concentrated short position by anyone's standards.

As for the "Non-US" banks...there are fourteen of them...and they hold a net short position in silver of 2,573 Comex contracts in total...less than 200 contracts each. I'd guess that more than 50% of that net short position is held by only two or three non-US banks...so the short positions of the rest are immaterial. But the take-away from this is that the market manipulation in silver is "Made in the USA."

In gold, it was quite a bit different. Five US banks are net short 92,052 Comex gold futures contracts...9.2 million ounces...and that's down about 12,700 contracts from what they held in February. But between the four of them, they still hold a net short position of 22.5% of the entire Comex futures market in gold.

There are currently nineteen Non-US banks holding Comex futures contracts. Between all nineteen of them, they increased their net short position by about 500 contracts between the February and March reports. That's barely a rounding error.

Currently, these nineteen banks are net short 36,257 Comex gold contracts...which is 3.63 million ounces of the stuff...just under 2,000 Comex futures contracts apiece. But, like silver, I'd bet that over 50% of those 36,257 contracts are held by three or four foreign banks...and the rest are immaterial.

You have to ask yourself this question: Since these banks neither produce nor consume these two precious metals, what are they doing in the Commercial category of the COT report at all, either long or short? They should be in the Non-Commercial category with the rest of the price speculators.

Reader Scott Pluschau has a few paragraphs about yesterday's COT report...along with a report about the mega-short position in the US dollar. His blog is definitely worth a look...and the link is here.

Here's a little eye candy that Florida reader Donna Badach sent me yesterday. I've posted a photo of this gold bar before, but it's always worth a second look. It apparently weighs 485 pounds...and is worth about $12.8 million...and currently sits in a gold museum in Taiwan. This photo was posted over at the Wealth Daily website yesterday.

Since it's the weekend, I have a lot of reading for you...and I hope you can find the time for all of it over the next couple of days. Quite a few of the stories have to do with the Greek bond debacle.

 

¤ Critical Reads

Financial Regulators "Paralyzed" by Threat of Wall Street Lawsuits

Some US regulators are "paralyzed" by the threat of lawsuits from Wall Street firms seeking to slow or stop the rollout of rules that would crimp their bottom line, a top U.S. official said on Thursday.

Bart Chilton, a Democratic commissioner at the Commodity Futures Trading Commission, said if regulators live in fear of a lawsuit alleging they failed to consider sufficiently the costs and benefits of a rule, rulemaking slows or halts and opponents have succeeded.

Regulators, already months behind in implementing rules from the Dodd-Frank financial reform law passed in 2010, are bracing for additional legal challenges as more regulations are completed.

Insufficient or flawed analysis of the costs of a rule versus the benefits to the public or industry likely will be a reason cited in lawsuits seeking to overturn the measures.

This Reuters story was posted over at The Huffington Post website on Thursday...and I thank Florida reader Donna Badach for sharing it with us. The link is here.

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Gas Prices Now a Big Factor in Presidential Election

It might be one of the biggest issues in the upcoming presidential election. Last night, CBS News exit polls found 77 percent of those voting in seven Super Tuesday states say rising gas prices were an important factor in their vote.

The poll reflects growing consumer anxiety as gas prices have risen nearly 50 cents a gallon in just over two months.

Consumers have been telling us they are cutting corners because for most driving is a necessity.

This story was filed from Minneapolis yesterday...and was posted over at the minnesota.cbslocal.com website...and I borrowed it from yesterday's King Report. The link is here.

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US Trade Gap Widens Sharply in January

The US trade deficit widened sharply in January, driven higher by record imports of autos, capital goods and food, government data showed Friday.

The trade gap expanded 4.3% in January to $52.6 billion from $50.4 billion in December, the Commerce Department said.

This is the largest monthly differential between imports and exports since October 2008 and came in much bigger than had been expected.

This story was posted over at the marketwatch.com website yesterday...and I thank Florida reader Donna Badach for sending along her second contribution to today's column. The link is here.

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Now, Sterilized QE?

"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." Do the Keynesians ever deeply, seriously contemplate perhaps Keynes' greatest and certainly most pertinent monetary insight?

Doug Noland's Credit Bubble Bulletin is a must read for me every Friday...and this week's commentary was certainly no exception. It's posted over at the prudentbear.com website...and the link is here. I thank reader U.D. for sending to me this week.

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The Crash of 1929: The American Experience

This most excellent PBS documentary was sent to me by reader "David in California" earlier this week...and it's certainly classified as weekend viewing material, as the video runs just under an hour. It's posted over at the pbs.org website out of WGBH in Boston. It's well worth your time...and the link is here.

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See Something, Say Nothing

Well, if you didn't read Friday's edition of Casey Daily Dispatch, there's still time to make amends...and I suggest you do exactly that.

David is on a roll in his Friday commentary...and it's certainly a must read. Included in it is a youtube.com video...a campaign against a small-time African warlord named Joseph Kony. Australian reader Wesley Legrand sent me this video on Thursday...and I thought it rather esoteric for my blog. However, since David Galland has blessed it, then it's okay by me.

All of this is posted at the caseyresearch.com website...and the link is here.

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First We Conquer Iceland...

Consider the prospect of Iceland abandoning the króna and adopting the dollar as its currency. No, no, not the US greenback, but the Canadian "loonie," so named for the waterfowl imprinted on the flip side of its one-dollar coin.

There are several reasons for the Canadian dollar – usually viewed as the greenback's poor cousin – to be preferred over the euro. The loonie has a AAA sovereign debt rating and Canada has very little debt compared to every other Western nation. The Globe and Mail provides other reasons:

"It [the loonie] offers the tantalizing prospect of a stable, liquid currency that roughly tracks global commodity prices, nicely matching Iceland's own economy, which is dependent on fish and aluminum exports, and in the future, energy.

There's also a more sentimental reason. They're both cold, Arctic countries. 'The average person looks at it this way: Canada is a younger version of the US. Canada has more natural resources than the US, it's less developed, has more land, lots of water, ' explained Heidar Gudjonsson, an economist and chairman of the Research Centre for Social and Economic Studies, Iceland's largest think tank. 'And Canada thinks about the Arctic. '"

[Once we have Iceland firmly in our grasp, then we'll revisit the war of 1812 with the US. We should have never stopped just at winning our own border. We should have pushed those damn Yankees all the way back into the deep South, as we could use some Canadian territory where it's warm pretty much all year round. Then we'd give back just about everything that the US stole from Mexico in the Mexican-American War of 1846-48. Whose idea was it to live in the desert in the first place? Good idea...eh? – Ed]

This delightful, but rather tongue-in-cheek story, was posted over at the dailyreckoning.com website the other day...and is well worth the read. I thank Roy Stephens for his first offering of the day...and the link is here.

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Has Japan Run Out of Cans to Kick?

Japan's Trade and Current Account imbalances appear to be hitting some kind of terminal velocity, and while neither JGBs nor CDS seem to reflect the ensuing chaotic recognition that perhaps the can that has been so faithfully kicked down the "Nishi-no-michi" or the "West Road" may have plunged over the lip of Mount Fuji (conjuring images of Mordor), FX markets' recent and abrupt weakness brought on by yet more printing may well be coming face to face with reality.

There are some really ugly-looking graphs in this zerohedge.com posting from yesterday...and I thank Casey Research's own Bud Conrad for sending this to me. The link is here.

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Tactics and Strategy at the Strait of Hormuz

About a month ago, when Iranian officials started venting the idea of closing the Strait of Hormuz to commercial traffic, Western media was prompt in reviewing the events of 1981. At that time, Iranian forces mined the Strait and engaged commercial vessels with rubber speedboats in what was largely seen as a pathetic attempt to control the area. The media seems to think that Iranian officials are talking about using similar tactics today. In reality, the military technology deployed by Iran in the region is completely different today, creating a strategic scenario totally different from that of 30 years ago.

According to the EIA, 17 million barrels of petroleum crossed the Strait of Hormuz each day during 2011. This makes up almost 40% of the international petroleum market, clearly the most important chokepoint of the world for this commodity; on average 28 oil tankers cross the Strait every day, half of them empty and inbound, the other half outbound. Adding to petroleum is liquefied natural gas (LNG), exported by Qatar and the UAE ; over 6 million tonnes of LNG cross the Strait every month, about 25% of the international market. All of this traffic takes place very close to Iranian waters and shores.

Iran is a very large country, with an area of almost 1,700,000 km2, more than Spain, France, Italy, and Germany combined. To its south, Iran has a coast almost 1,700 km long, which makes up all the north shores of the Persian Gulf (hence the name) and the Gulf of Oman.

This big essay on Iran was posted over at the oildrum.com earlier this week...and was sent to me by reader U.D. If you know nothing about Iran, this essay certainly helps a little. Iran, once called Persia, is one of the oldest civilizations on planet Earth...and, like Turkey, I'd love to visit the place. The link is here.

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Banks Shouldn't Be Both Judge and Jury on Credit Defaults

Imagine you bought a house and to insure it, you had to purchase coverage from the homebuilder.

Then imagine a fire nearly destroyed the house, but your ability to collect the insurance depended on a committee of anonymous homebuilders meeting in secret to vote on whether to write you a check. If denied, the panel wouldn't have to provide an explanation, you wouldn't be allowed to review the minutes of closed-door discussions, and you'd have no right to appeal.

Not a great system...but not dissimilar to the one that governs the world of credit-default swaps, the contracts that insure sovereign- and corporate-debt investors against default. Panels made up of representatives from large banks, hedge funds, investment firms, and other interested parties, formed by the International Swaps and Derivatives Association, decide whether payouts will be made to investors.

I plucked this must-read Bloomberg story out of a GATA release yesterday...and the link is here.

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Moody's: Greece Has Defaulted

Moody's Investors Service considers Greece to have defaulted per its default definitions. The announcement comes despite Athens reaching a deal with private creditors for a bond exchange that will shave €107 billion from its €350-billion debt.

The agency pointed out that even though 85.8 per cent of the holders of Greek-law bonds had signed to the deal, the exercise of collective action clauses that Athens is applying to its bonds will force the remaining bondholders to participate.

Eventually, the overall cost to bondholders, based on the present net value of the debt, will be at least 70 per cent of the investment, Moody's explained.

"According to Moody's definitions, this exchange represents a 'distressed exchange,' and therefore a debt default," the US rating firm said. "This is because (i) the exchange amounts to a diminished financial obligation relative to the original obligation, and (ii) the exchange has the effect of allowing Greece to avoid payment default in the future."

This short story was posted over at the Russia Today website yesterday...and I thank Roy Stephens for sending it along. The link is here.

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Greece Deal Triggers $3 Billion in Default Swaps, ISDA Says

Greece's use of collective action clauses forcing investors to take losses under its debt restructuring triggers payouts on $3 billion of default insurance, the International Swaps & Derivatives Association said.

A total 4,323 credit-default swap contracts may now be settled after ISDA's determinations committee ruled the use of CACs is a restructuring credit event, according to a statement distributed today by Business Wire. Before the ruling, Greek swaps rose to a record $7.68 million in advance and $100,000 annually to insure $10 million of debt for five years.

A swaps trigger "raises the question of which country is next and which banks are most exposed," Hank Calenti, a bank analysts at Société Générale SA in London, wrote in a note. "Less than six months ago we had the head of the ECB exhorting that there must be no credit event on Greece," he wrote.

This is another Bloomberg story I pulled from a GATA release yesterday...and the link is here.

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Greek "Credit Event" Cost Will Be So Much Higher, Sinclair Tells King World News

Mining entrepreneur Jim Sinclair told King World News last night that the Greek "credit event" will cost much more than the official figure of $3.5 billion in credit default swaps, probably in the trillions. He suspects that it could require the rescue of eight international banks, with enormous inflationary consequences.

I borrowed the headline and the introductory paragraph from another GATA release...and the link to the KWN blog is here.

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Bill Gross Says Greece Weakens Bond Contract Sanctity

The "sanctity" of bondholders' contracts has been diminished by Greece's pushing through the biggest sovereign restructuring in history, according to Bill Gross of Pacific Investment Management Co.

"The rules have been changed here," Gross, co-chief investment officer at Pimco, said in a radio interview on Bloomberg Surveillance with Tom Keene and Ken Prewitt. "The sanctity of their contracts is certainly lessened. Bondholders have that to look forward to going into the future."

Yields on Greece's new bonds may climb to as high as 20 percent amid "material risks" stemming from implementation of terms for the biggest sovereign restructuring in history, Morgan Stanley said yesterday in a report.

This Bloomberg story was sent to me by Washington state reader S.A...for which I thank him...and the link is here.

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Debt Haircut for Greece: "The Problem Has Only Been Deferred"

Nearly 86 percent of private investors have agreed to join in the debt-swap deal that will help Greece avoid an uncontrolled default. But is that good news? Many experts have their doubts. In a Spiegel Online interview, economics professor Harald Hau argues that not only will the plan put the burden on taxpayers, but it will mean an even bigger crisis to come.

Spiegel Online: Is the debt haircut enough to free Greece from its worst burdens?

Hau: No. The agreed-upon debt haircut is insufficient. No matter what, there will be a second, proper bankruptcy. It will probably take another nine months to three years, but then there will be a really big crisis, both economically and politically. The problem has only been deferred. The next time it will only affect the taxpayers, though.

This story was posted over at the German website spiegel.de yesterday...and I thank Roy Stephens for sharing it with us. It's a must read in my opinion...and the link is here.

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Greece Has Defaulted: Here Is Where We Stand

The brain trust over at Zero Hedge got together and came out with this statement on Greece's default yesterday.

After reading this, everyone should have a fairly good grasp of what happened not only today, but ever since the great (and quite endless) European financial crisis took center stage, and what to look forward to next...

This zerohedge.com piece is not an overly long read...but it's worth running through. I thank reader U.D. for sending it my way...and the link is here.

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Peter Brimelow: Gold Bugs Digging Out, Again

Last week was heartbreaking for the gold bugs, not for the first time. But they're digging out again.

A week ago, on February 28, gold, gold shares, and silver all saw 2012 highs and appeared to be headed for dramatic chart breakouts.

But sudden, ferocious selling on Wednesday completely reversed this pleasant picture. CME April gold settling down $77.10, or 4.3%, and NYSE Arca Gold BUGS down 3.41%.

Such an abrupt and decisive shock did more than raise eyebrows. The Gold Anti-Trust Action Committee's Daily Dispatches email service (which has developed into an invaluable supplier of key stories on gold) was in its element.

GATA has been much derided for its view that the gold market is manipulated. Now it was able to report a whole procession of significant observers making unprecedented sympathetic noises.

Here's another story that I lifted from a GATA release yesterday. It was posted over at the marketwatch.com website on Thursday. It's a must read for sure...and the link is here.

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Two King World News Blog Posts about Gold

First Eagle's gold guy, Jean-Marie Eveillard, told King World News yesterday that gold is very much undervalued amid the worldwide money printing and financial turmoil. His comments would be even more interesting if he mused about how this undervaluation has come about and how it is sustained. Oh, well... The link to the KWN post, headlined All Hell May Break Loose & Gold is Way Undervalued is here.

The second KWN blog post is with Gabelli Gold Fund manager Caesar Bryan. He told King World News that the gold market seems to have turned upward again, thanks to the buying of real metal in London, which is starting to overcome the price suppression of the paper futures market. The link to that post is here.

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Gold Bulls Strengthen as Wagers Hit $131 Billion

Gold traders are the most bullish in four months after investors accumulated more metal than ever and hedge funds raised bets on gains to a five-month high.

Sixteen of 23 analysts surveyed by Bloomberg expect prices to gain next week and one was neutral, the highest proportion since November 11. Investors increased their holdings in exchange-traded products backed by bullion for seven consecutive weeks and now hold 2,407 metric tons valued at $131 billion, data compiled by Bloomberg show.

"Record-high ETP holdings show both institutional demand and hedge-fund demand is robust," said Mark O'Byrne, the executive director of Dublin-based GoldCore Ltd., a brokerage that sells and stores everything from quarter-ounce British Sovereigns to 400-ounce bars. "People are concerned about inflationary implications of quantitative easing, zero-percent interest rates policy and global currency debasement."

This Bloomberg story from yesterday was sent to me by Roy Stephens...and it's his final offering in today's column. It's worth the read...and the link is here.

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The Warlord and the Basketball Star: A Story of Congo's Corrupt Gold Trade

When an athlete-turned-humanitarian and an energy executive tried to buy gold in Kenya, they found themselves mired in Congo's dangerous world of conflict minerals – and totally outmatched.

In 18 seasons in the National Basketball Association, Congo-born Dikembe Mutombo was a relentless defender, an 8-time all-star who accumulated the second-most blocked shots in the league's history and averaged a double-double in rebounds and points in each of his first 11 seasons. Mutombo became a star – even during the NBA's Michael Jordan-Patrick Ewing-Karl Malone golden age – because of his ability to intimidate. The 7-foot center owned the most feared and arguably most dangerous elbows in the league, and after every blocked shot, Mutombo would wave a taunting index figure at whatever hapless small forward or shooting guard had attempted to drive the lane against him. ....

Mutombo may be a renowned basketball player and humanitarian. But as a UN Group of Experts report published last December makes clear, he's not much of a businessman. Mutombo had linked up with Houston-based oil executive Kase Lawal, a respected businessman whom President Barack Obama had appointed to the Federal Trade Commission's Advisory Committee for Trade Policy and Negotiation. According to the UN document (and as first reported by the Houston Chronicle), the two attempted to purchase what they thought was $30 million worth of gold from dealers in Kenya – only to find out that the gold (most of which was probably counterfeit) was in the possession of a notorious Congolese warlord, who ended up profiting handsomely off of Mutombo and Lawal's blind enthusiasm and almost total lack of due diligence.

This long, but very interesting essay, was posted in the March edition of The Atlantic. Washington state reader S.A. sent it to me earlier this week...and the link is here.

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Time to Accumulate Gold and Silver: Jeff Clark, Casey Research

If 10% of your total investable assets (i.e., excluding equity in your primary residence) aren't held in various forms of gold and silver, we at Casey Research think your portfolio is at risk.

After speaking at the Cambridge House conference last month and talking with many attendees, I came away convinced that most investors fall into one of two categories: those that hold an abundance of gold and silver (which tends to be physical forms only), and those with little or none. While both groups need to diversify, I'm a little more concerned about the second group. Here's why.

Regardless of what you think will happen over the remainder of this decade, one thing seems virtually certain: the value of paper money will be affected, perhaps dramatically. Even if the economy slips into deflation, the deflation wouldn't last long. A panicked Fed would print to the max and set off a wild rise in prices. This is why we're convinced currency dilution will not only continue but accelerate.

This must-read commentary was posted on the Casey Research website yesterday...and if West Virginia reader Elliot Simon hadn't sent to me, I would have never known it was there. The link is here.

Read more...

 

¤ The Funnies

(Click on image to enlarge)

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¤ The Wrap

We ought to be discussing an intelligent move to a sound currency, by which I mean a currency that is based on a standard and not at the whim and the discretion of a bunch of mandarins sitting around Washington D.C. – James Grant, CNBC 07 March, 2012

My "blast from the past" this week revisits Cuba one more time.

Throughout Latin America and Spain, Ernesto Lecuona [born in Guanabacoa, Cuba in 1895] is recognized as one of its musical giants. For the first half of the 20th century, he was one of the most important composer-musicians from Cuba and the dominant figure in Cuban musical life. Newsweek magazine called him "The Cuban Gershwin" and "The Latin American Victor Herbert." His enormous commercial success included Hollywood stints for MGM, 20th Century Fox, and Warner Bros., and included an Oscar nomination.

Possessing a prodigious gift for melody, Lecuona wrote in many popular idioms of his day...and became primarily known as a composer of "light" music. This tended to overshadow his more serious compositions and until recently, may have contributed to the lack of scholarly attention his considerable achievements merit.

Lecuona never touched the piano while composing. Extremely prolific, he jotted down notes in hotel rooms, in a restaurant, or while at a card table. Like Mozart, he made very few changes, and sometimes sent a publisher music without ever hearing it, claiming he knew what it sounded like in his head!

The piece I've picked out is my favorite...and I have three CDs of his music. The one selected happens to be from the same recording I own. It was written during a tour he did in Buenos Aires back in 1937...and I hope you enjoy it. This BIS recording features the Polish National Radio Symphony with Thomas Tirino at the piano. Michael Baros conducts...and the link to the youtube.com recording is here.

I'm not going to attempt to analyze yesterday's price action in either gold or silver, except to say that the price smack at 8:30 when the jobs numbers were released came as no surprise. It happens a lot. I'd forgotten all about it until yesterday when I read about it on the Internet. Once I read that, all became clear.

But what wasn't clear was why the big rally after the London p.m. gold fix happened. It had all the hallmarks of a short-covering rally...but was a big surprise nonetheless. Someone with big pockets was "buying the dip."

What it means going forward is a big unknown...and we'll have to see how things develop next week...and I would guess that Monday's trading action could tell us a lot. All four precious metal charts look bullish to me...and if the dollar succumbs to the huge short position that's currently in place on it, well, it could be an interesting week.

And to top that off, we've had an enormous improvement in the COT structure in all the precious metals as well, so there's lot of room for gold and silver to run if that's what "da boyz" have in mind.

Before heading out the door, here's a graph that Washington-state reader S.A. sent late last night. You've seen Nick Laird's version of German gold analyst Dimitri Speck's famous chart...here's Dimitri's latest version of it. It covers all the gold trading between August of 1998 and the end of 2010...about eleven years and change.

It shows what it has always shown. Gold's Far East high is at the London open...followed by the take-down at the London a.m. gold fix at 5:30 a.m. Eastern time [10:30 GMT in London]...followed by the usual smack-down at the opening of the equity markets in New York at precisely 9:30 a.m. Eastern time. Then there's the low of the day at the London p.m. gold fix thirty minutes later at 10:00 a.m. Eastern time...3:00 p.m. in London. From there, gold climbs the usual wall back into the London open, before the whole process gets repeated.

As I've said before, this is the Anglo-American precious metals price management scheme laid bare for all who care to see it.

With the precious metals and their shares still on sale...but for how much longer, nobody knows...there's still the opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best (and current) recommendations...as well as the archives. Don't forget that our 90-day guarantee of satisfaction is in effect for both publications.

That's it for the week. Enjoy what's left of it...and I'll see you here on Tuesday.