Bad News for IBM, Caterpillar, Chrysler...and Detroit

In four separate stories from yesterday's edition of the King Report...IBM to lay off 6-8,000 employees world-wide.  CAT will lay off one third of its workers in Wisconsin..."With lower orders from mining customers, we must take steps to bring production in line with demand."  Chrysler to freeze salaried employee's pensions in effort to limit liability..."Chrysler plans to freeze pensions for 8,000 salaried employees at the end of the year, the automaker announced Friday, joining a growing group of companies seeking to limit the amount of money they have to set aside now for future retirees."  Some of Detroit's Creditors are Asked to Accept Pennies on the Dollar.  "...deep cuts alone cannot save Detroit...painful sacrifices must be shared. The proposal includes an offer that amounts to less than 10 cents on the dollar on some of the city’s unfinanced debt obligations."

E.U. Car Sales Fall to 20-Year Low as Joblessness at Record

European Union car sales in May fell to a 20-year low as rising joblessness caused by a recession in the euro region contributed to falling demand at PSA Peugeot Citroen, Renault SA and General Motors Co.

Registrations in the 27-member EU dropped 5.9 percent to 1.04 million vehicles from 1.11 million cars a year earlier, reaching the lowest level for the month since 1993, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today in a statement. The drop contrasts with 1.7 percent growth in April that was the first gain in the market in 19 months. Including figures from Switzerland, Norway and Iceland, sales in May fell 5.9 percent to 1.08 million cars. 

“Nobody’s buying cars,” and there’s “no reason to be optimistic,” as the sales increase the previous month was because of a calendar effect, Jens Schattner, a Frankfurt-based analyst at Macquarie Group Ltd., said before the ACEA released figures. Any revival in deliveries won’t start until the end of the third quarter at the earliest, he said.

This Bloomberg story was filed from Paris early this morning Europe time...and was posted on their website at midnight last night MDT...and it's the first of two in a row from U.A.E. reader Laurent-Patrick Gally.

Britain's Serious Fraud Office to charge central LIBOR suspect

The Serious Fraud Office is poised to bring criminal charges against former Citigroup Inc and UBS AG trader Thomas Hayes, who is alleged to have been a central figure in a scam to rig global benchmark interest rates, a source familiar with the situation said on Monday.

The SFO was expected as soon as Tuesday to charge Hayes, following the London interbank offered rate rigging scandal, which has rocked the financial industry from the United States to Japan, the source said.

Regulators allege Hayes and others made thousands of unlawful requests to colleagues to submit false Libor rates, colluding with other banks and at least five interdealer brokers to spread false information and influence others.

This Reuters story was posted shortly after midnight in London earlier this morning...and it's the second story in a row from Laurent-Patrick Gally.

Britain's Co-operative set to unveil 'bail in' plan to plug £1.5 billion balance sheet hole

The plan makes Co-operative Bank appear much more like a bank than a mutual organisation.

An announcement between the bank and the Prudential Regulation Authority could come within the next few hours.

Under such a rescue deal, it is unlikely that taxpayer money will be required or that savers will be affected, but it could affect up to 5,000 smaller investors.

Concerns about the bank's capital arose after a deal with Lloyds collapsed.

OK...who's next?  Today's first story was posted on the bbc.co.uk Internet site early Sunday evening when nobody was looking...and I thank U.K. reader Tariq Khan for sending it our way.

Deutsche Bank 'Horribly Undercapitalized': U.S. Regulator

A top U.S. banking regulator called Deutsche Bank's capital levels "horrible" and said it is the worst on a list of global banks based on one measurement of leverage ratios.

"It's horrible, I mean they're horribly undercapitalized," said Federal Deposit Insurance Corp Vice Chairman Thomas Hoenig in an interview. "They have no margin of error."

Hoenig, who is second-in-command at the regulator, said global capital rules, known as the Basel III accord, allow lenders to appear well-capitalized when they are not. That is because the rules allow the banks to use complicated measurements of how risky their loans are to determine the capital they must hold, he said.

This Reuters story was picked up by CNBC in the wee hours of Saturday morning...and I thank Laurent-Patrick Gally for bringing it to our attention.

NSA, U.K. Spied on Politicians, Intercepted Emails, Eavesdropped on Russian President's Phone Calls

The espionage scandal that keeps on giving has released its latest installment, once more courtesy of The Guardian, which on the eve of tomorrow's starting G-8 meeting reveals that foreign politicians and officials who took part in two G-20 summit meetings in London in 2009 had their computers monitored, their phone calls intercepted, and fake internet cafes were set up on the instructions of the British Government Communications Headquarters, the sister organization to the U.S. NSA.

Naturally, it wasn't just the GCHQ - according to The Guardian, during the 2009 G-20 meeting there was an NSA attempt to eavesdrop on then-Russian leader, Dmitry Medvedev, as his phone calls passed through satellite links to Moscow.

And while broad espionage allegations can be deflected by pretending by the rhetoric-endowed and teleprompter-aided that only terrorist threats were targeted, it will be very difficult to explain why the national information super spooks used every trick of the trade to spy on the so-called leaders of the developed world.

This rather explosive story made an appearance on the Zero Hedge website late Sunday evening...and I thank Matthew Nel for finding it for us.

Syria Sketch: 'Dead eyed' Putin asks: 'Do you want to support people who eat the guts of their enemies?'

It started badly and then got worse. To begin with President Putin and his delegation were late. Their plane into the UK was delayed and when they did finally arrive at Downing Street, they had to be taken in through the back entrance to avoid a Turkish protest taking place on Whitehall. You could imagine Putin musing that you wouldn’t see that happening in Moscow.

After the obligatory forced smiles for the camera outside Number 10, Mr Putin and David Cameron got down to business.

Except rather than the one-to-one talks that the British had been expecting earlier in the week, the Russians had decided to bring along their Foreign minister Sergey Lavrov to join the party. So a tête-à-tête became a foursome, with diplomatic protocol dictating that William Hague also be included in the talks. There was going to be no repeat for Mr Cameron of his “productive” private talks last month.

What went on in the meeting was, of course, private but what was clear to everyone at the press conference afterwards was that the Russian President was not in a happy mood. Smaller than Cameron...but stocky...Putin managed to carry off an air of menace effortlessly.

This news item showed up on the independent.co.uk Internet site on Sunday as well...and I thank U.K. reader Tariq Khan for sending it along.

Putin faces isolation over Syria as G8 ratchets up pressure

Russian President Vladimir Putin faced further isolation on the second day of a G8 summit on Tuesday as world leaders lined up to pressure him into toning down his support for Syrian President Bashar al-Assad.

Following an icy encounter between the Kremlin chief and U.S. President Barack Obama late on Monday, the G8 leaders will seek to find resolution to a war that has prompted powers across the Middle East to square off on sectarian lines.

The sticking point again will be Putin, who faced a barrage of criticism from Western leaders for supporting Assad and the Syrian's president's attempt to crush a 2-year-old uprising in which at least 93,000 people have been killed.

"It's a clarifying moment to see what kind of commitments the Russians are willing to make in a leading world forum," a British official said before the leaders met for dinner at a remote, heavily guarded golf course outside of Enniskillen.

Here's another prime example of the pots calling the kettle black.  This Reuters piece was filed from Enniskillen in Northern Ireland early yesterday evening EDT...and it's another story courtesy of Laurent-Patrick Gally.

G20 summits: Russia and Turkey react with fury to spying revelations

Turkey, South Africa and Russia have reacted angrily to the British government demanding an explanation for the revelations that their politicians and senior officials were spied on and bugged during the 2009 G20 summit in London.

The foreign ministry in Ankara said it was unacceptable that the British government had intercepted phone calls and monitored the computers of Turkey's finance minister as well as up to 15 others from his visiting delegation. If confirmed, the eavesdropping operation on a Nato ally was "scandalous", it added.

The ministry summoned the UK's ambassador to Ankara to hear Turkey's furious reaction in person. A spokesman at the foreign ministry read out an official statement saying: "The allegations in the Guardian are very worrying … If these allegations are true, this is going to be scandalous for the UK. At a time when international co-operation depends on mutual trust, respect and transparency, such behaviour by an allied country is unacceptable."

This must read article appeared on The Guardian's website late yesterday afternoon BST...and it's courtesy of Roy Stephens.

"Being called a traitor by Dick Cheney is highest honor for an American." - Edward Snowden

The threat of imprisonment or murder will not stop the truth from coming out, Edward Snowden, the whistleblower who blew the lid on the massive National Security Agency surveillance program, told The Guardian in a live Q&A.

The 29-year-old former NSA contractor in conjunction with Glenn Greenwald, The Guardian journalist who broke the story on the NSA’s two controversial data-collection programs which targeted Americans and foreign allies alike, took questions online regarding the fallout from the massive intelligence leak. 

Edward Snowden kicked off the session by describing the targeted campaign by the US government to paint him as a traitor, “just as they did with other whistleblowers." The smear campaign, he argues, has destroyed the possibility of a fair trial at home. In this regard, his decision to leave the United States was not based on any desire to evade justice, especially since he believes he can “do more good outside of prison.”

This longish news item from Russia Today is well worth reading...and it was posted on their website mid-afternoon Moscow time.  I thank Roy Stephens for this story.

Asia Times: Syria and Egypt Can't be Fixed

Syria and Egypt are dying. They were dying before the Syrian civil war broke out and before the Muslim Brotherhood took power in Cairo. Syria has an insoluble civil war and Egypt has an insoluble crisis because they are dying. They are dying because they chose not to do what China did: move the better part of a billion people from rural backwardness to a modern urban economy within a generation. Mexico would have died as well, without the option to send its rural poor - fully one-fifth of its population - to the United States.

It was obvious to anyone who troubled to examine the data that Egypt could not maintain a bottomless pit in its balance of payments, created by a 50% dependency on imported food, not to mention an energy bill fed by subsidies that consumed a quarter of the national budget. It was obvious to Israeli analysts that the Syrian regime's belated attempt to modernize its agricultural sector would create a crisis as hundreds of thousands of displaced farmers gathered in slums on the outskirts of its cities. These facts were in evidence early in 2011 when Hosni Mubarak fell and the Syrian rebellion broke out. Paul Rivlin of Israel's Moshe Dayan Center published a devastating profile of Syria's economic failure in April 2011. [1]

Sometimes countries dig themselves into a hole from which they cannot extricate themselves. Third World dictators typically keep their rural population poor, isolated and illiterate, the better to maintain control. That was the policy of Mexico's Institutional Revolutionary Party from the 1930s, which warehoused the rural poor in Stalin-modeled collective farms called ejidos occupying most of the national territory. That was also the intent of the Arab nationalist dictatorships in Egypt and Syria. The policy worked until it didn't. In Mexico, it stopped working during the debt crisis of the early 1980s, and Mexico's poor became America's problem. In Egypt and Syria, it stopped working in 2011. There is nowhere for Egyptians and Syrians to go.

This short essay was posted on the Asia Times website yesterday...and is worth reading. It's another offering from Roy Stephens, for which I thank him.

Iran to deploy '4,000-strong force’ to Syria as U.S. military set to stay in Jordan

Iran will deploy 4,000 Revolutionary Guards to Syria to bolster Damascus against a mostly Sunni-led insurgency, media reported. Meanwhile, U.S. F-16s and Patriots will stay in Jordan – speculatively, to help establish a no-fly zone to aid Syrian rebels.

The deployment of the first several-thousand strong military contingent was reported by The Independent on Sunday who quoted Iranian sources tied to the state’s security apparatus. The sources said the move signals Iran’s intention to drastically step up its efforts to preserve the government of President Bashar Assad.

The Islamic Republic’s heightened military commitment could reportedly extend to the opening up of a new “Syrian” front on the Golan Heights against Israel.

The thin edge of the war wedge in the Middle East is showing signs of growing thicker in a hurry.  This Russia Today story was filed from Moscow late Sunday evening local time...and it's courtesy of Roy Stephens once again.

After Turkey, Brazil Hit by Widespread Protests

Thousands of protesters took to the streets of Brazil's biggest cities, Rio de Janeiro, Sao Paulo and the capital Brasilia, on Monday evening to protest the rising cost of public transport, corruption and heavy-handed police tactics.

In the city of Belo Horizonte, police clashed with protesters and fired tear gas to disperse crowds, Brazil's Globo TV reported.

The governor of Brazil's richest and most industrialized state Sao Paulo called the protesters "troublemakers."

The demonstrations began last week after a 0.20 Brazilian real ($0.10) increase in bus fares.

This CNBC story appeared on their website early yesterday evening...and it's another contribution to today's column from Laurent-Patrick Gally.

Fitch says China credit bubble unprecedented in modern world history

China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned. 

The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead.

"The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation," said Charlene Chu, the agency's senior director in Beijing.

"There is no transparency in the shadow banking system, and systemic risk is rising. We have no idea who the borrowers are, who the lenders are, and what the quality of assets is, and this undermines signalling," she told The Daily Telegraph.

This sounds very similar to what Doug Noland was saying in his Credit Bubble Bulletin from last Friday.  This particular story is an Ambrose Evans-Pritchard offering...and it was posted on The Telegraph's website on Sunday afternoon BST...and I thank Roy Stephens for bringing it to my attention...and now to yours.

Seven King World News Blogs/Audio Interviews

1. Dr. Stephen Leeb: "Massive Demand to Send Price of Silver Skyrocketing".  2. Rick Rule: "Gold, Silver and Institutional Investors Who Are Terrified".  3. Michael Pento: "Expect Panic and Devastation as Control of Markets is Lost".  4. Robert Fitzwilson: "Fed and Other Central Planners to Enact Frightening Solutions".  5. Richard Russell: "The Great Gold Rip-Off, China, Russia and Silver".  6. The first audio interview is with Gerald Celente...and the second audio interview is with Egon von Greyerz.

Sprott's Thoughts: Chart of the Week...India Declares War on Gold

With the Indian rupee plumbing new lows against the US dollar and the country’s current account deficit at record levels, the Reserve Bank of India (RBI) is taking the easiest route to tackle both; it has declared a war on gold. Our Chart of the Week shows the Indian current account deficit from 1970 to the end of 2012. As you can see, it has hit a record deficit level and continues to weaken. Put simply, a current account deficit occurs when a country's total imports of goods is greater than its total export of goods; this situation makes a country a net debtor to the rest of the world. India is the largest consumer of gold, almost all of which is imported and is a significant contributor to this deficit.

The RBI has drawn the battle lines and targeted gold imports as the main culprit. The central bank has announced a series of measures over the past month, including restraining lending against gold-backed assets, and restricting gold imports. The hike in gold import duty to 8% this month is the most recent announcement in this drive and doubles the duty that was applied at the beginning of this year. The RBI has asked bank trading houses not to import gold on a consignment basis for domestic sales, further insisting on 100% cash margin for letters of credit. The restrictions were invoked after imports soared to 162 tonnes in May from 142 tonnes in April on the back of weak international prices. In their campaign against gold imports the Indian finance minister P. Chidambaram has even urged banks to advise their customers not to invest in gold. “I think the Reserve Bank has advised banks that they should not sell gold coins,” said Chidambaram, while speaking at an event in Mumbai.

This very short must read commentary by David Franklin was posted on the sprottgroup.com Internet site yesterday.  The chart alone is worth the trip.

Gold is being supplied by western governments

There has been considerable throughput of gold in western capital markets, with substantial buying from all round the world following the April price crash. The supply can only have come from two sources: the general public, or one or more governments. It really is that simple. Two months later the gold price has only partially recovered, so physical supplies have continued to be made available. Physical demand cannot have been entirely satisfied by ETF liquidations, confirming governments are involved. This article looks at the dynamics of the gold market around this event and the implications.

While the investing public in the western nations has been generally stunned following the April price smash, demand from Asia is running at record levels.

The increase in deliveries for April and May was spectacular, totalling 460.5 tonnes, with the week ending 26 April alone seeing phenomenal deliveries of 117 tonnes. In addition, according to the Economic Times, India imported 142.5 tonnes in April and 162 tonnes in May, compared with an average monthly rate of 86 tonnes in Q1 2013. Therefore these two countries imported 765 tonnes of gold in two months, before considering any unofficial imports or their government purchases in foreign markets. The rest of Asia, from Turkey to Indonesia would certainly have stepped up their demand for gold as well, as did the western world itself for physical metal as opposed to paper entitlements.

This extensive commentary by Alasdair Macleod was posted on the goldmoney.com Internet site on Sunday...and I found it in a GATA release yesterday.

Casey Research: Death by Optimism

The junior resource sector is struggling financially, something most investors seem to agree on – and rightly be wary of. Here at Casey Research, we've analyzed both producers and explorers to see how profitable (or value-adding) they may be under current market conditions. The rather obvious conclusion, shared by many company executives, is that now is the time to be frugal.

Producers have started to focus on cutting costs and pulling back from development projects that have diminished prospective returns or otherwise unacceptable risk profiles.

Developers have sinned in their own way, too: as gold prices rose year after year, the price assumptions used in economic studies likewise went higher and higher. Some used assumptions that were too optimistic. And now that trend is coming back to bite them – as well as any investor who buys into those assumptions.

Naturally, when the gold price continued rising, it seemed to justify using a higher gold price when calculating how profitable a mine might be. This worked well to persuade banks to loan money and investors to buy stock, and some mines were built without enough consideration of a protracted price reversal, which has caught less prepared companies and investors off guard.

This commentary is the Monday edition of the Casey Daily Dispatch...and it was posted on the CR website yesterday afternoon.

Jeff Nielson: Gold-bashing mythology hits new crescendo

The mainstream financial news media's propaganda campaign against gold has gotten more intense than ever even as evidence abounds that gold -- the metal, not the paper labeled "gold" -- is in greater demand than ever. That's what Jeff Nielson of Bullion Bulls Canada writes in his commentary today, "Gold-Bashing Mythology Hits New Crescendo".

This is another precious metal-related story that I found embedded in a GATA release yesterday...and I thank Chris Powell for wordsmithing the introductory paragraph.

Eric Sprott interviewed by Greg Hunter

Eric Sprott, president and CEO of Sprott Asset Management, says extreme physical demand for gold and silver is draining supplies. Sprott predicts, "Somebody's going to fail here. All the data I look at says the Western central banks. . .that have been selling gold are running on fumes now...so, it's very close at hand." 

This 17:51 minute audio interview with Eric was posted over at theaureport.com Internet site on Sunday...and I thank Roy Stephens for his final offering in today's column.

Gold's Neglected Cousin to Face Supply Squeeze

A record deficit in platinum supplies is set to push prices higher, as unrest sweeps the South African mining industry and demand is boosted by the auto sector and a new exchange traded fund (ETF), according to HSBC.

Platinum, which has been influenced by the wild swings in the price of gold since April this year, hit a six-week high of $1,531 earlier this month following the "highly successful" launch of a new physically backed ETF. According to James Steel, chief precious metals analyst at HSBC, prices will rise further over the next two years, as the risk of South African mining strikes weigh on output.

But Steel also cut his price target on the metal because platinum had been influenced more than he had anticipated by the sharp swings in the price of gold.

It's interesting to see the platinum/palladium shortage story show up in the main stream press...which is the only reason I'm posting it here, as it's already yesterday's news for most precious metal investors.  This CNBC story was picked up by the finance.yahoo.com Internet site yesterday...and my thanks go out to West Virginia reader Elliot Simon for sharing it with us.

Dr. Dave Janda Interviews T. Ferguson

This 25-minute interview with Mr. Ferguson was posted on the davejanda.com Internet site on Sunday...and it's almost all about gold and silver.  For that reason it's well worth your time.

It Finally Comes Out: Elite Traders Are Getting Access To Data Before Everyone Else

In the past few days people have finally started paying attention to a funny thing going on in the market.

Time after time ahead of major news, there seems to be someone who knows something before it happens — there seem to be trades that hit too hard and fast before the news is actually made.

This has been going on for a while, and people are finally starting to understand why.

The current target of collective ire is Thomson Reuters. There was some shady trading ahead of the Consumer Confidence number at the end of last month. About a quarter of a second before the number was released, there was an eruption of orders in the SPDR S&P Sector ETF (SPY), the e-Mini (electronically traded futures), and in hundreds of stocks, according to Nanex, a market research firm.

This very interesting article was posted on the businessinsider.com Internet site during the New York lunch hour on Thursday...and I thank Casey Research's own Bud Conrad for today's first story.

Treasury Sales by Foreigners Hit Record High in April

The monthly TIC (foreign capital flows) data gets less respect than it should. Perhaps it is because it is two months delayed, or perhaps due to the Treasury Department labyrinth one has to cross in order to figure out what is going on. Either way, for those who do follow the data set, will know by now that in April, foreign investors, official and private, sold $54.5 billion. Why is this number of note? Because it is the biggest monthly sale of Treasurys by foreigners in the history of the data series.

This Zero Hedge story from yesterday is courtesy of reader 'David in California'...and the chart is worth a quick peek.

Bank Deposits at Fed Top $1 Trillion

Thanks to the Federal Reserve's massive quantitative easing program, banks have more money than they know what to do with.

So they're parking much of their cash at the Fed, where they receive a 0.25 percent interest rate. Indeed, bank deposits at the Fed have topped $1 trillion, reaching that record level in April, Fortune reports.

But while bank reserves at the Fed are soaring — up 25 percent, or $200 billion, in the first quarter alone — lending slumped during that period.

Concerns about the deposit bulge are twofold. First, money that is parked at the Fed is doing nothing to help the sluggish economy. Second, what happens to the deposits when the Fed reverses its QE?

This moneynews.com article was posted on their website early on Friday morning...and it's worth skimming.  I thank West Virginia reader Elliot Simon for sending it.

Illinois’ failing economic model: more food stamps, fewer jobs

Illinois added nearly three times more people to its food stamp program than it added in jobs over the past year – just another confirmation that the state’s economic model is failing.

Between February 2012 and February 2013, Illinois added nearly 200,000 new enrollees to the Supplemental Nutrition Assistance Program, or SNAP. In contrast, Illinois added only 68,400 non-farm payroll jobs during that same time period.

This disappointing news comes on top of the most recent Bureau of Labor Statistics labor release that reported Illinois has the second-highest unemployment rate in the nation. At 9.3 percent, the state’s unemployment rate is significantly higher than the 7.6 percent national average. 

Poor job creation is causing Illinoisans’ dependence on food stamps to rise. The U.S. Department of Agriculture reported that in February 2013, Illinois was the only state in the country to report a year-on-year, double-digit increase in the number of people signing up for food stamps.

This short story was posted on the illinoispolicy.org Internet site on Wednesday...and I found it in yesterday's edition of the King Report.

Doug Noland: The King of Emerging Markets

Japanese policymakers have really mucked things up. The Nikkei sank 6.5% Thursday and was down 1.5% for the week. Perhaps it’s a little early to pronounce the BOJ’s “shock and awe” monetary experiment a failure. The yen rallied 3.5% this week against the dollar. Against the Philippine peso its was up 4.5%, versus the South Korean won 4.1%, the Indian rupee 4.31%, the Malaysian ringgit 4.0%, the Indonesian rupiah 3.2%, the Argentine peso 3.9% and the Brazilian real 4.2%. Indonesia raised rates to support its weak currency. The yen “carry trade” (sell yen and use proceeds to buy higher-yielding instruments globally) is doling out painful losses – forcing the unwind of leveraged trades across many markets. I wouldn’t be surprised if the yen short is the largest short position in modern history. The yen bears are now running for cover – causing all kinds of havoc in the currencies and securities markets.

“Emerging” Asian markets are in the middle of an unfolding financial storm. Friday’s 2.1% gain cut the Philippine’s loss for the week to 9.2%. Even with Friday’s 4.4% recovery, the Thailand stock exchange ended the week down 3.4%. South Korea’s Kospi dropped 1.8%.

Latin America is as well caught in troubling dynamics. Brazil’s currency (real) trade to a four-year low against the dollar this week – despite currency interventions and the removal of taxes on financial flows and currency derivatives. Brazilian equities were hit for 4.4% this week, increasing y-t-d losses to 19.1%. Mexican stocks dropped 2.4%, boosting y-t-d losses to 10.2%.

Another absolute must read from Doug Noland that was posted on the prudentbear.com Internet site yesterday evening...and I thank reader U.D. for bringing it to our attention.

Firefox plug-in warns users of NSA surveillance

According to leaked NSA documents published by The Guardian last week, the United States National Security Agency is conducting dragnet surveillance of the communications of Americans, regularly receiving phone records for millions of Verizon customers while also being capable of accessing the conversations that occur over Facebook, Google and several other major Internet names through a program called PRISM. Now a 28-year-old artist and developer from Brooklyn, New York has found a fun way of warning computer users about potential government surveillance, and he’s incorporated one of the best-selling rock albums ever in the process.

Justin Blinder released a plug-in for the Web browser Firefox this week, and he’s already seeing a positive response in the press if not just based off of the idea alone. His “The Dark Side of the Prism” browser extension alerts Web surfers of possible surveillance by starting up a different song from Pink Floyd’s 1973 classic “The Dark Side of the Moon” each time a questionable site is crossed.

Blinder told the Guardian that he built the program over the course of four hours with the hopes he could "create some sort of ambient notification that you are on a site that is being surveiled by the NSA."

This Russian Today article was posted on their website early on Friday evening Moscow time...and it's courtesy of Marshall Angeles.

Facebook Releases Information on Security Data Requests

Facebook Inc. and Microsoft Corp. said they received thousands of warrants for data from government entities in the U.S. during the second half of 2012.

Facebook received 9,000 to 10,000 requests, while Microsoft got 6,000 to 7,000, their legal executives said in blog posts yesterday. The companies, seeking to reassure users that authorities don’t have unfettered access to personal details, said the numbers are a “tiny fraction” of their user bases.

Google Inc., Facebook and Microsoft asked the U.S. government for more leeway this week to report aggregate numbers of data requests, following reports that the U.S. National Security Agency is collecting millions of residents’ telephone records and the Web communications of foreigners under court order. While the companies have denied giving authorities direct access to their systems, thousands of technology, finance and manufacturing businesses are swapping intelligence with security agencies, four people familiar with the process said.

This Bloomberg item was posted on their website very late last night...and I thank U.A.E. reader Laurent-Patrick Gally for sliding it into my inbox at 5:01 a.m. EDT this morning.

The Case for Congress Ending Its Authorization of the War on Terror

U.S. troops will soon leave Afghanistan. Al-Qaeda is in shambles. What reason is there for Congress to abdicate responsibility for declaring war?

Last month, I argued that the time has come for Congress to repeal, or "sunset," its sweeping "Authorization for Use of Military Force" (AUMF) enacted just three days after the Twin Towers fell on September 11, 2001. The legislative "blank check" given to the executive branch to wage the War on Terrorism -- a measure enacted while fires at the World Trade Center and Pentagon were still smoldering -- has been, as diplomats used to say, "overtaken by events."

This morning, 4,288 days after the AUMF was enacted, Rep. Adam Schiff, a California Democrat and member of the House Permanent Select Committee on Intelligence, introduced legislation in Congress to sunset the measure on December 31, 2014, a date chosen to coincide with the withdrawal of American combat troops from Afghanistan. The proposal is a serious bit of business and warrants timely and serious consideration on Capitol Hill.

This is a must read for all serious students of the New Great Game.  It was posted in The Atlantic on Monday...and I've been saving it for today.  My thanks to Elliot Simon for digging it up for us.

Iceland's E.U. bid is over, commission told

Iceland's bid to join the EU is over, the country's foreign minister told the European Commission on Thursday (13 June).

"This is how democracy works," said Gunnar Bragi Sveinsson, on his first overseas trip, three weeks after being appointed to the recently elected Icelandic government.

He pointed out that both parties in the new government had campaigned against EU accession.

He commented that the main purpose of the trip had been "to tell the commission that the new government has made decision to put negotiations on hold.

This story was posted on the euobserver.com Internet site early yesterday morning...and it's Roy Stephens' first offering in today's column.

Asia Times: Obama's Monica moment

The United States may have administered one of the biggest-ever snubs to the Kremlin in the post-Cold War era with the White House announcement on Thursday that it will provide military support to the Syrian rebels.

The U.S. President Barack Obama is scheduled to meet Russian President Vladimir Putin on the sidelines of the Group of Eight summit scheduled to begin in Northern Ireland this coming Monday. This was to have been the first meeting for the two presidents after their respective re-election to the high office.

As a token courtesy to Putin at a personal and public level, Obama should have deferred the announcement until after meeting Putin. Syria was expected to figure on top of their agenda and Obama and Putin have been closely in touch over Syria.

Geneva 2, the proposed conference on Syria, is a joint Russian-American initiative. By delaying the announcement to next week, the US wouldn't have "lost" Syria. Quite obviously, Obama has made a cool assessment that Putin's friendship is expendable. After all, the discord over missile defense sticks out like a sore thumb in the US-Russia relations and there is no remedy in view.

This, too, is a must read for all students of the New Great Game.  It was posted on the Asia Times website yesterday...and it's Roy Stephens' second contribution in a row to today's column.

Syria chemical weapons accusations ‘a means of justifying further military action’

The ‘red line’ drawn by the U.S. over chemical weapons usage is a standard not applied to Syrian rebels, despite the same ‘red line’ being used for the Syrian government, Abayomi Azikwe, editor of the pan-African news wire, tells RT.

The U.S. is conveniently ignoring accusations that the Syrian rebels themselves might have engaged in crimes against humanity, while throwing blame at Syria for unproven chemical weapon use to justify further military, political and diplomatic pressure against the Syrian government.

This is also required reading for all students of the New Great Game...and it was posted on the Russia Today website early yesterday afternoon Moscow time.  It's another offering from Roy Stephens.

Singapore Censures 20 Banks on Traders’ Bids to Manipulate Rates

Singapore’s monetary authority censured banks for trying to rig benchmark interest rates and ordered them to set aside as much as S$12 billion ($9.6 billion) at zero interest pending steps to improve internal controls.

ING Groep NV, Royal Bank of Scotland Group Plc and UBS AG were among 20 banks at which 133 traders tried to manipulate the Singapore interbank offered rate, swap offered rates and currency benchmarks in the city-state, the Monetary Authority of Singapore said in a statement yesterday. The regulator said it will also make rigging key rates a criminal offense and bring supervision under its direct oversight.

Singapore, seeking to bolster its reputation as a major financial hub, is cracking down amid a widening global review of benchmarks. Bloomberg News reported this week traders manipulated key foreign-exchange rates in the $4.7 trillion-a-day currency market. Barclays Plc, UBS and RBS have been fined $2.5 billion over the past year for rigging Libor.

Well, Singapore's monetary authorities mean what they say...and if the banks are real smart they'll toe the line.  This Bloomberg story, filed from Singapore, was posted on their website early yesterday afternoon MDT...and I thank Marshall Angeles for his second contribution to today's column.

China braces for capital flight and debt stress as Fed tightens

China appears increasingly worried that monetary tightening by the US Federal Reserve could trigger capital flight from the People’s Republic and set off a Chinese corporate debt crisis.

A front-page editorial on Friday in China Securities Journal - an arm of the regulatory authorities - warned that capital inflows have slowed sharply and may have begun to reverse as investors grow wary of emerging markets. “China will face large-scale capital outflows if there is an exit from quantitative easing and the dollar strengthens.” it wrote.

The journal said foreign exodus from Chinese equity funds were the highest since early 2008 in the week up to June 5, and the withdrawal Hong Kong funds were the most in a decade.

It also warned that total credit in Chinese financial system may have reached 221pc of GDP, jumping almost eightfold over the last decade. Companies will have to fork out $1 trillion in interest payments alone this year. “Chinese corporate debt burdens are much higher than those of other economies and much of the liquidity is being used to repay debt and not to finance output,” it said.

This absolute must read by Ambrose Evans-Pritchard was posted on the telegraph.co.uk Internet site early yesterday afternoon BST...and it's Roy's final offering in today's column.

Japanese investors refuse to embark on global yield hunt, and it’s killing Abenomics

What do yield-hungry Japanese investors have in common with unicorns and Bigfoot?

Like the latter two, supposed Japanese buyers of U.S. equities and myriad other instruments have been talked and written about to excess, but have yet to materialize.  They were supposed to arrive after the Bank of Japan in April moved to aggressively step up its stimulus efforts. The shocking efforts aimed at boosting assets and stoking inflation would leave Japan’s return-starved investors little choice but to set out on a “scavenger hunt for yield,” or so the argument went.

Or not. Data released by Japan’s Ministry of Finance earlier Thursday showed that Japanese investors were net sellers of foreign securities for a fourth consecutive week. In the period running from June 2 to June 8, Japanese investors sold a net 386.9 billion yen ($4.1 billion) of foreign bonds and notes and a net 221.8 billion yen of foreign equities in the week ending June 8, the ministry said.

This marketwatch.com article is another must read story. It...and the Ambrose Evans-Pritchard piece before it...are all the more reason that you should spend the necessary time reading Doug Noland's commentary posted further up in the Critical Reads section.  This MarketWatch article was posted on their website very early on Thursday afternoon EDT...and I found it embedded in yesterday's edition of the King Report.

Three King World News Blogs

1. Egon von Greyerz [#1]: "Silver is Coiling For a Major Upside Explosion in Price".  2.  Citi analyst Tom Fitzpatrick: "Stocks to Plunge as World Enters Massive Bank Panic".  3. Egon von Greyerz [#2]: "Financial Chaos, Disappearing Freedom and Hyperinflation".

France bans the mailing of gold, silver

France's government has banned sending currency by mail — including coins, cash and all forms of precious metals.

BullionStreet notes that the legislation, which was approved May 23, was not announced by the government at the time and has been little reported on by media outlets.

Published via Legifrance, the law states: “the insertion of banknotes, coins and precious metals is prohibited in mailings, including the insured items, registered items and items subject to formalities certifying deposition and distribution.”

This story has been around the Internet for a week or so now, so it's not really new...but I wanted to see it posted on a more well-known Internet site before I was going to post it in this space.  This version of it appeared on the mining.com Internet site yesterday...and it's courtesy of Marshall Angeles.

Stunning Images From China: Ten Thousand People Waiting in Line to Buy Gold

Sometimes one must see to believe, in this case believe just how massive the raw demand for the shiny, barbarous relic is in China during times of relative monetary stability (in this case the Dragon Boat Festival). Now assume runaway inflation as we saw in 2011 China, which may be unleashed by something as catalytic as the PBOC once again deciding to inject liquidity in its suffocating banking system and to revive growth in the stalling economy.

June 11th, ten thousand people line up in front of a gold shop to buy gold. The buyers lined up during the three day Dragon Boat Festival.

Well, dear reader, here's a story that was posted on the Zero Hedge website yesterday...and I admit that I have my suspicions about it.  It's either a wild exaggeration, or patently false.  Several readers sent me this article yesterday...and even though there's a link to the original news item [in Chinese] embedded at the end of this ZH posting, I'm not quite buying it.  I've never seen 10,000 people [which seems like a gross exaggeration] lined up to buy anything.  You can read it for yourself...and make up your own mind.  Matthew Nel talked me into posting it, so you can blame him... ))

On This Day in 1933...the U.S. Confiscates Gold

Roosevelt had only been in office for 101 days and while there was broad bipartisan support for inflationary policies in Congress, it’s safe to say that most of those who voted for FDR never expected him to confiscate private holdings of gold coins, bullion, and certificates.

Roosevelt called the measure a temporary one (it wasn’t), and he followed it up by invalidating gold clauses in private contracts that obligated payment in gold dollars, which had the effect of devaluing the assets of bond and contract holders. Many of these hoarders and slackers purchased gold as a hedge against the (Fed-fueled) inflationary boom of the 1920s and then hung on to it during the Hoover years when his crazed and unprecedented interventions in wages and prices caused a normal market correction to devolve into a depression. Why would they trust Roosevelt any more?

They were smart not to. By January 1934, Roosevelt increased the dollar price of gold from $20.67 to $35, thus devaluing the dollar by 70 percent while increasing the value of gold that the government now owned.

This Zero Hedge piece from yesterday is well worth your time...and I thank Elliot Simon for his last story of the day.

David Morgan: Gold is Not Just a Commodity...It is Money.

Félix Moreno talks to David Morgan, publisher of The Morgan Report and the proprietor of silver-investor.com. They discuss the bond bubble and the coming collapse of fiat money, the difference between “paper gold” and physical precious metals, fractional reserve in gold markets, the price of gold and silver and why gold is not just another commodity, but rather a monetary metal. They also talk about central bank gold reserves – particularly those of Germany and China.

This 24-minute podcast was recorded on 13 June, 2013...and I found it in a GATA release from yesterday.

100-year-old Wild West silver certificate lassos $2.6M at auction

A rare, century–old silver certificate bearing the likeness of 19th century politician William L. Marcy was sold to an anonymous buyer for that lofty sum, which auctioneers at Stack's Bowers Galleries say is a record.

"Only two exist of this type, the other being a treasure in the National Numismatic Collection in the Smithsonian Institution," Stack's Bowers said in announcing the sale.

The certificate was issued in 1891, at a time when silver miners, Western mining companies and some Western banks were objecting to the government's decision to adopt a gold standard.

William Jennings Bryan's "Cross of Gold" speech...and the Frank Baum's book "The Wonderful Wizard of Oz" popped into my head the moment I read this short, but very interesting news item.  It, and some of the embedded links, are well worth your time...and I thank reader Bill Moomau for today's last story.

Budget Deficit in U.S. Widened in May as Spending Increases 10%

The U.S. budget deficit widened in May from a year earlier on a 10 percent increase in spending, the Treasury Department said.

Outlays exceeded receipts by $138.7 billion last month compared with a $124.6 billion shortfall in May 2012, the Treasury said today in Washington. The gap was in line with the $139 billion median estimate in a Bloomberg survey of 23 economists.

The Congressional Budget Office last week said that spending in May would’ve been $4 billion less than a year earlier were it not for shifts in the timing of payments compared with May 2012. The U.S.’s AA+ credit-rating outlook was increased this week to stable from negative by Standard & Poor’s based on receding fiscal risks, less than two years after the company stripped the world’s largest economy of its top ranking.

Its credit outlook raised from negative to stable?  Surely you jest?  The U.S. rating agencies are even bigger whores than I thought.  Today's first story is one that I found in yesterday's edition of the King Report.

Bernanke’s Tapering Talk Backfires Amid Bond Yield Surge

Federal Reserve Chairman Ben S. Bernanke has repeatedly said a reduction in the Fed’s $85 billion in monthly bond purchases wouldn’t mean an end to record easing. Investors are behaving as if they don’t believe him.

The yield on the 10-year Treasury note has risen to 2.15 percent, an almost 14-month high, from 1.63 percent on May 2 as investors bet the Fed will begin trimming bond buying. The surge is undermining Bernanke’s unprecedented effort to hold down borrowing costs and combat 7.6 percent unemployment.

“They are playing with fire when they want to talk about tapering but don’t explain how it fits in with the rest of the exit strategy clearly,” said Gapen, a senior U.S. economist at Barclays Plc. “You risk the premature tightening that you want to avoid.”

This Bloomberg story, courtesy of U.A.E. reader Laurent-Patrick Gally, was posted on their website yesterday afternoon MDT.

Foreclosures Jump as Banks Bet on Rising U.S. Home Prices

Home repossessions in the U.S. jumped 11 percent in May after declining for the previous five months as rising prices and limited inventory for sale across the country spurred banks to complete foreclosures.

Lenders took back 38,946 homes, up from 34,997 in April, according to Irvine, California-based data firm RealtyTrac, which tracks notices of default, auction and seizures. Thirty-three states had increases in the number of homes repossessed, RealtyTrac said in a report today.

Banks are more willing to move to the final stage of foreclosure because there is sufficient demand and prices are improving, said Eric Workman of Tinley Park, Illinois-based Mack Cos., which aggregates single-family rental homes and resells them to individuals and institutional investors. U.S. home prices advanced almost 11 percent in the year through March, the biggest 12-month gain since April 2006, according to the S&P/Case-Shiller index of values in 20 cities.

“For a very long period of time, the market in general and specifically banks were unsure of what these assets were valued at,” Workman, vice president of sales and marketing at Mack, said in a telephone interview. “With increasing stability of the economy and housing prices throughout the U.S., these banks and sellers are getting much more comfortable with the value of their properties.”

This is the second Bloomberg story in a row from reader Laurent-Patrick Gally.  This one was posted during the Denver lunch hour yesterday...and it's worth reading.

Sheila Bair: We Still Haven't Lowered the Boom on Big Banks

Former U.S. banking regulator Sheila Bair, a champion of forcing big bank breakups, used a self-interview in Vox to attest that protecting taxpayers from the reckless behavior of financial behemoths is far from completed.

In a sometimes humorous exchange with herself, Bair, former head of the FDIC, said the ideal American banking system would be smaller, simpler, less leveraged and aimed at meeting real credit needs.

"And oh yes, we should ban speculative use of credit default swaps from the face of the planet," she wrote.

According to Bair, the banks themselves are managing the financial reform process in Washington by outgunning the efforts of government regulators.

She noted the industry is already trying to undermine a Dodd-Frank requirement that lenders be exposed to 5 cents of every dollar of loss on mortgages they securitize, and that opaque inter-connectedness between mega-banks is still a reality.

The link to this must read Vox commentary by Sheila Bair is embedded in this moneynews.com article from late yesterday morning EDT...and I thank West Virginia reader Elliot Simon for sending it along.

Italian showdown with Germany over euro looms closer

Italy’s simmering revolt against Germany, austerity and its own ultra-European elites is coming to a head again, in a reminder that the deep clash of interests between the euro’s north and south remains as bitter as ever.

Something snapped in the Italian psyche last week after the European Central Bank offered nothing to combat the credit crunch asphyxiating small business, and more broadly washed its hands of Euroland’s incipient deflation crisis and catastrophic wastage of its youth.

The next day ex-premier Silvio Berlusconi called for a showdown, or “Braccio di Ferro”, with northern powers before it loses it chemical, car and steel industries altogether.

Mr Berlusconi told Il Foglio that Italy’s government - which his Liberty Party keeps in office - is complicitly serving forces that are destroying Italy. It must instead confront the north, “and particularly Angela Merkel’s Germany”, with a stark choice: either they call a halt to fiscal and monetary contraction, and opt instead for full-blown reflation; or they must expect the victims to snatch back their own destinies.

This Ambrose Evans-Pritchard offering was posted on the telegraph.co.uk Internet site late on Wednesday afternoon BST...and it's definitely worth reading.  I thank Roy Stephens for his first offering in today's column.

Prism Revelation: E.U. Weakened Data Protection at U.S. Request

Earlier this week, European Justice Commissioner Viviane Reding vented her fury over the US data spying program known as Prism. The far-reaching online surveillance operation, which saw the US National Security Agency spying on users across the globe, clearly demonstrates "that a clear legal framework for the protection of personal data is not a luxury, but is a fundamental right," Reding told SPIEGEL ONLINE on Tuesday.

Just two days later, however, it would seem that Reding was perhaps protesting a bit too much. According to both the Financial Times and Reuters, the European Commission bowed to US lobbying in early 2012 and scrapped a data protection measure that would have significantly reduced the NSA's ability to spy on Europeans.

According to the Financial Times report, which cites EU documents and unnamed EU officials, the measure was specifically designed to ward off US efforts to eavesdrop on international phone calls and emails. It was even called the "anti-FISA clause," a reference to the Foreign Intelligence Surveillance Act. Washington, however, launched a significant lobbying effort to get the Commission to remove the clause -- which it then did, partly in order to smooth the way ahead of talks on the trans-Atlantic free trade agreement. "We didn't want any complications on this front," an EU official told the Financial Times.

This amazing story showed up on the German website spiegel.de early yesterday afternoon Europe time...and it's Roy Stephens' second offering in a row.

Pepe Escobar: PRISM...See You on the Dark Side

Unbounded by "legal restrictions", Snowden was certainly smart enough to smell a rat, major rats. After the Clapper denial, he could not possibly trust congress. Not to mention the parroting US mainstream media. He did contact the Washington Post - but eventually settled on Glenn Greenwald, who's definitely not mainstream. The UK Guardian's position is more dubious; it badly wants to crack the American market, but at the same time solemnly ditched, even smeared, Julian Assange after it got what it wanted from him.

Snowden is surfing the PR tsunami as a master - and controlling it all the way. Yes, you do learn a thing or two at the CIA. The timing of the disclosure was a beauty; it handed Beijing the ultimate gift just as President Obama was corralling President Xi Jinping in the California summit about cyber war. As David Lindorff nailed it, [5] now Beijing simply cannot let Snowden hang dry. It's culture; it's a matter of not losing face.

And then Snowden even doubled down - revealing the obvious; as much as Beijing, if not more, Washington hacks as hell.

This short commentary by Pepe was posted on the Asia Times website yesterday sometime...and it's also courtesy of Roy Stephens.  It's also worth the read.

Felix Zulauf: Japan Will Cause the Next Big Global Crisis

For weeks, Japan's stock market has been in an absolute freefall.

Wednesday night the Nikkei fell to 12,445, down 6.4%. But it wasn't long ago that commentators were rejoicing in Abenomics – the policy moniker for Japan's monetary stimulus and government spending plan – for its bold three-pronged approach to juice the Japanese economy.

Now, with the Nikkei taking a turn for the worse and the yen strengthening, it appears Abenomics has not had the intended effect.

Felix Zulauf, Swiss hedge fund manager and macro thinker, goes even further. He thinks Japan will spark a global crisis within the next 18 months.

This businessinsider.com story from late yesterday morning EDT is courtesy of Roy Stephens as well...and it's his last contribution to today's column.

Japan Resorts to Teenage Girls in Short Skirts to Get Their Stocks Up

While the full court press propaganda express in Japan's media that 'Abenomics' is working may be flagging a little in the face of the recent 20% collapse in equity prices, there appears no limit to how low they will stoop.

It's not the first time young girls have been used to promote the benefits of buying Japanese bonds but, as The Telegraph reports, a four-member band of 16-year-old Japanese girls will be raising (and lowering we suppose) the length of their skirts based on the Nikkei 255. The band - Machikado Keiki Japan, which roughly translates as "street corner economic conditions", debut single - Abeno Mix (seriously!) - has karaoke references to quantitative easing and construction bonds.

You couldn't make this stuff up.  This Zero Hedge piece from yesterday is well worth your time...and I thank Laurent-Patrick Gally for his last offering in today's column.

Three King World News Blogs

1. John Hathaway: "Gold to Shock the World With Rapid $1,000 Advance".  2. Keith Barron: "Coming Chaos, Phony Global Markets and the War on Gold".  3. Gerald Celente: "QE, Gold, Silver and the Coming Financial Collapse".

Government curbs finally bite; Indian gold imports fall

It appears to have finally sunk in. The steps taken by the Indian government on gold have started yielding results, with imports of the precious commodity plunging in India, the world's biggest gold consumer. 

Net gold imports averaged $135 million a day, in the first 13 business days in May till May 20. However, in the subsequent 14 business days, it averaged only $36 million, coming down sharply. 

Moreover, the demand for foreign exchange for gold purchase too appears to have gone down significantly in the past five-seven days.

This mineweb.com story, filed from Mumbai, was posted on their website early this morning in London...and is a must read.

If you think gold is the only un-manipulated market left, Grandich is selling a bridge

Mining company consultant and market analyst Peter Grandich today tells Al Korelin of the Korelin Economics Report that with all other markets now shown to be manipulated, anyone who thinks that the gold market is not manipulated should call him about a bridge he'd like to sell.

Of course monetary metals in possession -- wealth without counterparty risk -- may be the last refuge of reality, and Grandich, angry as he is, says he still believes that fundamentals will assert themselves. His interview is a little less than five minutes long and it can be heard at the Korelin Economics Report Internet site.  I found this interview embedded in a GATA release yesterday...and I thank Chris Powell for wordsmithing the introduction for us.

Mining exploration companies must mobilize to survive, new group says

Canadian junior mining companies, which do most of the resource exploration in the world, are being strangled by financial regulation and must mobilize to survive, a new organization says.

The organization, the Venture Company Association, says regulatory costs are rising while the mining industry's ability to raise capital is collapsing. The association says that more than 700 mining exploration companies registered in Canada probably cannot survive to the end of the year if they have to meet current regulatory requirements.

A founder of the organization, Joe Martin of the resource conference company Cambridge House, writes in the organization's initial appeal:

"Markets go up and markets go down but this 'double whammy' may well bring about the death of the great historical tradition Canada has achieved in becoming the No. 1 nation in finding mineable ore bodies and bringing them into production around the world.

Joe Martin spoke to me briefly about this new organization when I was at his Vancouver Resource conference last month.  It's definitely worth reading...and is another news item I found in a GATA release yesterday.

Kinross Gold Cancels Ecuador Project over Tax Impasse

Kinross Gold Corp. said on Monday it is halting development at its Fruta del Norte gold project in Ecuador after failing to reach an agreement with the government over a windfall tax on revenues.

Chief Executive Paul Rollinson said Ecuador had refused to budge on the 70-per-cent tax, and had indicated that it would not approve a sale or extend the company's license beyond an Aug. 1 deadline.

"It's been a tough negotiation," Mr. Rollinson told Reuters. "Sometimes the best deal is the one that you don't sign, and that seems to be the case here."

The move is a blow to Ecuador, where the government is drafting a new mining law meant to encourage investment. Ecuador does not have a significant mining sector, but it is largely unexplored and could have major deposits.

This story appeared in The Globe and Mail on Monday...and is another story I found embedded in a GATA release yesterday.

Peak Prosperity's Adam Taggart: Is Gold at a Turning Point?

There's no way to sugarcoat the dismal performance of the precious metals in recent months. But a revisitation of the reasons for owning them reveals no cracks in the underlying thesis for doing so.

In fact, there are a number of new compelling developments arguing that the long heartbreak for gold and silver holders will soon be over.

The past two years have not been kind to holders of the precious metals. The price of gold is down over $500/oz since the record high (nominal) price it hit in August of 2011. That's a decline of 28%. Silver has seen a decline of 56% over the same period.

A healthy amount of that decline came in the past seven months, which have pretty much seen a steady price deflation punctuated by sharp (and historic) downdrafts.

This is Part One of a two-part commentary...and you have to sign up/enroll [not for free] to read the real meat of this article, which I suspect is in Part Two.  It was posted on the peakprosperity.com Internet site late on Wednesday evening.

Sneak peek: US Mint's gold & silver coins production facility

This 9-photo slide show was posted on the Economic Times of India website the other day...and I thank Elliot Simon for digging it up for us.

GoldMoney interviews Sprott's John Embry on gold's prospects

Interviewed by GoldMoney's Andy Duncan, Sprott Asset Management's John Embry discusses the increasingly desperate manipulation of the gold market by Western central banks, the hard choice ahead between debt deflation and hyperinflation, the demoralization of the monetary metals sector, the transfer of gold from West to East, the prospect of a sharp upward revaluation of gold, and the valuable news and commentary published at the Zero Hedge Internet site.

The interview, which was recorded on 11 June 2013, is 17 minutes long, and is posted at GoldMoney's Internet site.  It's another news item I picked up in a GATA release yesterday...and it's a must listen for sure.

Traders Said to Rig Currency Rates to Profit Off Clients

Traders at some of the world’s biggest banks manipulated benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to five dealers with knowledge of the practice.

Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said the current and former traders, who requested anonymity because the practice is controversial. Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years.

The behavior occurred daily in the spot foreign-exchange market and has been going on for at least a decade, affecting the value of funds and derivatives, the two traders said. The Financial Conduct Authority, Britain’s markets supervisor, is considering opening a probe into potential manipulation of the rates, according to a person briefed on the matter.

So...what else is new?  Today's first story was posted on the Bloomberg website at noon Mountain Daylight Time...and I thank U.A.E. reader Laurent-Patrick Gally for sending it along.

E.U. Urges U.K. to Probe Currency Rigging in Libor’s Wake

Britain should investigate the manipulation of currency rates, European Union officials said after Bloomberg News revealed that traders have been rigging foreign-exchange benchmarks for more than a decade.

“They need to get to the bottom of it,” Sharon Bowles, 60, chairwoman of the European Parliament’s economic and monetary affairs committee and a member of the U.K. Liberal Democrat party, said in an interview. “It’s quite upsetting we have got another bad-news story. It’s time we managed to restore the reputation of our banks.”

The U.K. Financial Conduct Authority, created in April to oversee markets and prosecute financial crime, is looking into potential manipulation in the $4.7 trillion-a-day foreign-exchange market, a person briefed on the matter said. Bloomberg News reported yesterday that traders at some of the world’s biggest banks rigged benchmark WM/Reuters rates, according to five current and former dealers with knowledge of the practice.

One wonders if the precious metals price fixing scheme by JPMorgan et al will every get this sort of scrutiny?  This Bloomberg news item was filed from London...and posted on their website early yesterday evening Denver time.  It's Laurent-Patrick Gally's second of three stories in a row in today's column.

Can Bernanke Avoid a Meltdown in the Bond Market?

The past few weeks have given us a hint of what might happen when the Federal Reserve starts to reverse its super-easy monetary policy. Expect turbulence in financial markets, especially for assets that have moved far above normal or reasonable valuations.

A return to normality eventually implies a benchmark 10-year Treasury yield of 4 percent or more. It won’t happen all at once, but that’s where we’re heading. With yields at roughly 2.2 percent, there’s a long way to go. This transition will mark a recovery of the equity culture and the cooling of investors’ protracted love affair with bonds.

Because of this prospect, markets are sensitive to the merest whiff that Fed Chairman Ben S. Bernanke might be forced by colleagues on the Federal Open Market Committee to reduce the scale of quantitative easing. This nervousness has affected asset prices across the maturity spectrum, not just at the short end of the money market as you might expect.

This Bloomberg story, as I mentioned above, is also courtesy of  Laurent-Patrick Gally...and it was posted on their website late Tuesday afternoon MDT.

German top court 'not interested' in saving euro

The German Constitutional Court is not interested whether the European Central Bank's (ECB) actions in the euro-crisis were successful, but whether they were legal, the court's top judge said on Tuesday (11 June) in a public hearing.

"Otherwise the end alone would justify the means," Andreas Vosskuhle, the presiding judge, noted.

In the run-up to the hearing, ECB chief Mario Draghi had called his bank's bond-buying programme "the most successful monetary policy undertaken in recent time."

This news item, filed from Berlin yesterday, was posted on the euobserver.com Internet site yesterday...and is worth skimming.  I thank Roy Stephens for his first offering in today's column.

Sprott's Thoughts: The Dijssel-Bomb

This past March, Jeroen Dijsselbloem, the head of the finance ministers of the eurozone, shocked the markets with seemingly off-the-cuff comments suggesting that the Cyprus banking solution will, "serve as a model for dealing with future banking crises." Depositors across Europe took a collective gasp of horror – could banks possibly confiscate depositors’ funds in a form of daylight robbery? Indeed they could, and last week the Bank for International Settlements (“BIS”), the Central Bank's Central Bank, published what we have referred to as 'the template'; a blueprint outlining the steps to handle the failure of a major bank and the conditions to be met before ‘bailing-in’ deposits.

In their recently published paper "A Template For Recapitalising Too-Big-To-Fail Banks", authors Paul Melaschenko and Noel Reynolds argue for a “simple” mechanism to recapitalize failed banks without the use of taxpayers' money. They propose a process whereby a bank, if it reached the point of failure, could transfer ownership to a newly created holding company over a weekend and be recapitalized. The bank would then be sold, enabling the market to determine the ultimate losses to previous equity holders and creditors. And, yes, this scenario includes losses for depositors above a guaranteed limit. Presto! A new bank with a clean balance sheet, ready to receive liquidity support from the prevailing central bank, without the need for handouts, bailouts, TARP programs, or any other form of government assistance. Previous debt and equity holders and depositors of this failed bank would be left with an equity position in the new entity. This 'template' would ensure that "shareholders and uninsured private sector creditors (read: depositors and bond holders) of such banks, rather than taxpayers, bear the cost of resolution." While at the moment this framework is only outlined in a discussion paper, it confirms our suspicions. While the old template involved “bailing out” banks through the transfer of toxic assets from the corporate sector to the taxpayer, the new template calls for “bailing in”. In this model the risk is contained within the affected institution at the expense of equity holders, bond holders and finally depositors. Far from being an idle comment, the unscripted 'bomb' that Mr. Dijsselbloem dropped on the market during the Cyprus Banking crisis is on its way to becoming a reality across Europe and other major banking centers.

This must read commentary by Eric Sprott and David Franklin was posted on the sprottgroup.com Internet site yesterday.

Greece First Developed Market Cut to 'Emerging' at MSCI

Greece became the first developed nation to be cut to emerging-market status by MSCI Inc.  after the local stock index plunged 83 percent since 2007.

Greece failed to meet criteria regarding securities borrowing and lending facilities, short selling and transferability, said MSCI, whose equity indexes are tracked by investors with about $7 trillion in assets. Qatar and the United Arab Emirates were raised to emerging markets, while Morocco was cut to a frontier market. New York-based MSCI kept South Korea and Taiwan as emerging markets, and placed Chinese shares traded on local exchanges on review for inclusion in the emerging category, according to a statement yesterday.

The ASE Index fell 1.4 percent to 882.99 at 1:49 p.m. in Athens. The gauge has dropped 10 percent this week as Greece failed to win any bids in a sale of the country’s gas monopoly. The unsuccessful attempt to sell Depa SA dented Greece’s state-asset sales program, which underpins 240 billion euros ($318 billion) of bailout loans from the euro area and International Monetary Fund.

This rather amazing story was posted on the Bloomberg Internet site in the wee hours of yesterday morning...and it's courtesy of Casey Research's own John Grandits.

World From Berlin: Turks 'Have Simply Had Enough'

With his efforts to quash the protest movement on Taksim Square in Istanbul on Tuesday, German editorialists fear Turkish Prime Minister Erdogan has become an "autocrat." Some argue he is threatening his country's very future.

Istanbul's most important square was clouded in tear gas and drenched by water cannons as police moved to clear it of protesters on Tuesday, escalating tensions that have been brewing since demonstrators began camping out at the site two weeks ago. Dozens of injuries have been reported by demonstrators.

By Wednesday morning, only police and bulldozers could be seen on Taksim Square, and barricades and debris from the protests had already been cleared away. Although local officials had assured they didn't want to clear the protest camp at Gezi Park, activists claimed police surrounded it and pelted it with tear gas canisters during the night. Hundreds remain camped out in the park.

The German press tees off against Turkish P.M. Erdogan in this short spiegel.de piece from yesterday afternoon Europe time...and it's courtesy of Roy Stephens.

'Everyone Is Afraid': Erdogan Regime Cows Embattled Media

There are more journalists in prison in Turkey than in any other country. Prime Minister Erdogan tolerates no criticism, and aggressive prosecution of journalists on often questionable charges has fostered an atmosphere of anxiety and self-censorship.

It was mostly angry office workers from Istanbul's Maslak banking district who appeared on Monday, June 3, during their lunch break at the editorial offices of the NTV news channel. "Stop acting as if nothing were happening," they chanted, as they railed against what they called the "bought media." "We can pay you, too," the roughly 3,000 demonstrators shouted, mocking the NTV employees who had managed to completely ignore the anti-government protests that had already been going on for three days. The protestors had glued Turkish lira bank notes to their banners.

The editors at CNN Türk also fell short of expectations. While CNN International showed live images of the dramatic clashes between police and protesters, the Turkish channel aired a documentary about penguins. Many newspapers complied with the de facto news blackout. Whether the journalists were following government instructions or simply suppressing the news in an act of preemptive obedience is still unclear.

I heard on the news last night that two Canadian journalists with the CBC were arrested in Istanbul yesterday...and their fate remains unknown.  This is another story from the German website spiegel.de...and I thank Roy Stephens for sending it along late yesterday morning.

Turkey's Gamble: Crackdown Threatens E.U. Accession Talks

The crackdown against protesters in Istanbul by the Turkish government creates a dilemma for the EU. The Europeans don't want to tolerate violence against demonstrators, but they also don't want to lose Erdogan as a partner.Once again, images of violence in Istanbul have been broadcast to living rooms across Europe. They showed Turkish police advancing on Taksim Square during the night with bulldozers and water cannons. For hours, officers in riot gear engaged in street fighting with protesters. On Wednesday morning, the remnants of those clashes could be seen on the cleared square.

The drastic measures taken by the government of Prime Minister Recep Tayyip Erdogan have created a dilemma for Turkey's partners in the European Union. Since the escalation of the civil protests at Gezi Park at the end of May, the Europeans have been helplessly observing as events unfold. Besides an appeal or warning here and there, so far there has been no substantial reaction from Brussels, Berlin, Paris or London.

They are worried that the violent excesses in Turkey could destroy progress made in recent months. After years of stalling, diplomats had worked painstakingly to get talks over Turkey's future European Union accession back on track. On June 26, EU foreign ministers had hoped to open a new chapter in accession talks with Turkey for the first time in three years. It would be the 19th of 35 chapters that must be completed before Ankara can join the European club.

This is another article from the spiegel.de website on Wednesday...and it's worth reading.  I thank Roy Stephens for his final contribution to today's column.

Three King World News Blogs

The first of two interview with James Turk is headlined "A Summer Gold and Silver Explosion That Will Shock the World".  The second James Turk interview bears the title "A Massive Black Swan is Going To Rock World Markets".  The third commentary is by Jeffrey Saut. It's entitled "What We Are Witnessing Right Now is Historic and Unprecedented".

Summarizing The Known Rigged Markets

Following last night's revelation that FX trading is the latest addition to the "rigged" column, here is a summary of the known market manipulation scandals (because it can be problematic keeping track of all by now):

• Libor - interest rates
• ISDAfix - swaps
• Platts - oil prices
• WM/Reuters - FX
• High-Frequency Trading - equities

We also know that the Fed and world central banks are engaged in a full blown (and unprecedented) Treasury curve modeling exercise courtesy of both ZIRP (short-end) and QE (long-end), and that courtesy of some $12 trillion in extra liquidity in the past 5 years, stocks are at an artificial "wealth effect" sugar high.

We can therefore deduce that, following the process of elimination, gold and silver are the only markets that are un-manipulated and where transparent price discovery is allowed to take place without intervention from key players.

Sarcasm off.

This is all there is to this short Zero Hedge commentary from yesterday...and I thank Washington state reader S.A. for bringing it to our attention.

James Turk: Saving Real Money

Beginning in the 1970s, countries around the world led by the United States began pursuing monetary policies that no longer encouraged savings. The relatively sound money that had previously prevailed, when it was said that the “dollar was as good as gold”, gave way to deplorable policy that ushered in decades of money debasement. Currency as a consequence has lost purchasing power over time, and the interest that banks pay on savings accounts has not sufficiently compensated the saver. In other words, even though the nominal value of a savings account rose from the interest income being earned, the overall purchasing power of the money being saved was losing value.

How can you save money today when central bank and government policy result in the erosion of your purchasing power when saving any national currency?

The answer lies in the money being saved. Save gold and/or silver instead of any national currency.

This short commentary by James was posted on the goldmoney.com Internet site yesterday...and it's worth reading.

This Tiny Nation [Singapore] Could Be a Gold Trading Hub

The tiny Southeast Asian city-state Singapore has transformed itself into one of the world's top financial hubs and has now set its sights on turning the wealthy island into a gold bullion center.

A step in that direction came this week when Deutsche Bank opened its second-largest gold storage facility in the world in Singapore.

"If you look at the existing primary locations of London, Zurich and New York, these are clearly Western-centric," Mark Smallwood, head of APAC wealth planning at Deutsche Asset and Wealth Management said Wednesday. "The launch is really part of the story of Singapore, and about a story of evolving storage facilities for gold bullion."

I posted a story about this a couple of days ago, but this article that showed up on the CNBC website in the wee hours of yesterday morning EDT, expands on it by quite a bit.  It falls into the must read category...and I thank West Virginia reader Elliot Simon for bringing it to our attention.

A.C.L.U. Files Lawsuit Seeking to Stop the Collection of Domestic Phone Logs

The American Civil Liberties Union sued the Obama administration on Tuesday over its “dragnet” collection of logs of domestic phone calls, contending that the once-secret program — whose existence was exposed last week by a former National Security Agency contractor — is illegal and asking a judge to stop it and order the records purged.

The lawsuit could set up an eventual Supreme Court test. It could also focus attention on this disclosure amid the larger heap of top secret surveillance matters revealed by Edward J. Snowden, the former N.S.A. contractor who came forward Sunday to say he was their source.

This news item appeared in The New York Times yesterday...and I thank Roy Stephens for today's first story.

Google, Microsoft, Facebook Want 'Transparency' on U.S. Requests

Three of the largest Internet companies called on the U.S. government to provide greater transparency on national security requests on Tuesday, as they sought to distance themselves from reports that portrayed the companies as willing partners in supplying mass data to security agencies.

In similarly worded statements released within hours on Tuesday, Google, Microsoft and Facebook all asked the U.S. government for permission to make public the number and scope of data requests each receives from security agencies.

Each of the companies, and several others, have come under scrutiny following disclosures in The Guardian and Washington Post newspapers of their role in a National Security Agency data collection.

This short CNBC story from yesterday afternoon EDT, is worth reading...and it's courtesy of West Virginia reader Elliot Simon.

NSA surveillance: anger mounts in Congress at 'spying on Americans'

Anger was mounting in Congress on Tuesday night as politicians, briefed for the first time after revelations about the government's surveillance dragnet, vowed to rein in a system that one said amounted to "spying on Americans".

Intelligence chiefs and FBI officials had hoped that the closed-door briefing with a full meeting of the House of Representatives would help reassure members about the widespread collection of US phone records revealed by the Guardian.

But senior figures from both parties emerged from the meeting alarmed at the extent of a surveillance program that many claimed never to have heard of until whistleblower Edward Snowden leaked a series of top-secret documents.

This story, posted on the guardian.co.uk Internet site in the wee hours of this morning BST, is definitely worth reading...and I thank Roy Stephens for his second offering in today's column.

Pepe Escobar: Digital Blackwater Rules

The judgment of Daniel "Pentagon Papers" Ellsberg is definitive; "There has not been in American history a more important leak than Edward Snowden's release of NSA material". And that includes the release of the Pentagon Papers themselves.

By now, everything swirling around the US National Security Agency (NSA) points to a black box in a black hole. The black box is the NSA headquarters itself in Fort Meade, Maryland. The black hole is an area that would include the suburbs of Virginia's Fairfax County near the CIA but mostly the intersection of the Baltimore Parkway and Maryland Route 32.

There one finds a business park a mile away from the NSA which Michael Hayden, a former NSA director (1999-2005) told Salon's Tim Shorrock is "the largest concentration of cyber power on the planet". Hayden coined it "Digital Blackwater".

This rather short, but very interesting essay was posted on the Asia Times website yesterday...and is also courtesy of Roy Stephens.

Turkish police and protesters battle for control of Taksim Square

Turkish riot police using teargas and water cannon battled protesters for control of Taksim Square in Istanbul on Tuesday night, hours after the prime minister, Tayyip Erdogan, demanded an immediate end to 10 days of demonstrations.

Istanbul's governor, Huseyin Avni Mutlu, declared on TV that police operations would continue day and night until the square, the focus of protests against Erdogan, was cleared.

Police fired volleys of teargas canisters into a crowd of thousands – people in office wear as well as youths in masks who had fought skirmishes throughout the day – scattering them into side streets and nearby hotels. Water cannon swept across the square.

This is another news item that was posted on The Guardian's website just after midnight BST this morning...and I thank Roy for his final contribution to today's column.

Three King World News Blogs

The first interview is with Dr. Stephen Leeb...and it's headlined "Here Comes the Next Major Leg of Gold Demand in China".  The second commentary is by Richard Russell.  It's entitled "Gold, Stocks, Rigged Markets and the Wealthy".  And lastly are these comments by Robert Fitzwilson: "The Most Dangerous and Scary Crisis in World Financial History".

CBOE to settle U.S. SEC charges of regulatory failure

The Chicago Board Options Exchange will pay a $6 million penalty and take "major remedial measures" to settle civil charges that it failed to properly enforce short sale rules, U.S. regulators said on Tuesday.

The financial penalties against the exchange operator and C2 Options Exchange, an affiliate, are the first ever against a U.S. exchange for violating the duty to self-police a marketplace, the U.S. Securities and Exchange Commission said.

Some of the problems the SEC uncovered at CBOE are related to the inadequate self-policing of optionsXpress, a firm now owned by Charles Schwab that was ordered by an SEC judge last Friday to pay a penalty and disgorgement for illegally selling shares it did not own. The firm is considering appealing the judge's ruling.

CBOE settled the case without admitting or denying the charges.

This would be funny, if it wasn't so pathetic.  One has to wonder why the almost five year CFTC investigation into the silver price management scheme by JPMorgan in the precious metal markets hasn't been resolved.  This is nickel-dime stuff by comparison.  This Reuters story, filed from Washington, was posted on their website yesterday...and it's courtesy of Washington state reader S.A.

India's gold duty increase leads to a spurt in smuggling

Days after government increased duty on gold from 6% to 8% to curb its import, Customs authorities are already witnessing a spurt in smuggling. In two separate operations on Sunday, Customs authorities at the IGI Airport here held two men with over 2.6 kg gold worth close to Rs 70 lakh. While a man from UP was arrested with gold worth over Rs 19 lakh, another person from Bhatkal in Karnataka was arrested with Rs 50 lakh of jewellery. Both were smuggling the precious yellow metal from Dubai.

The seizure also revealed a unique modus operandi, where the man from UP had converted the gold into silver coloured pins and stapled them on the box of a TV he was legally importing from Dubai. The man from Bhatkal had wrapped jewellery around his legs.

Sources said the Customs had information about some gold being smuggled in from Dubai by the accused, identified as Abul Sattar of Muzaffarnagar in UP and Abdul Patel from Bhatkal. Based on the information, authorities apprehended Sattar as he alighted from the flight (no. 9W 545) and was trying to pass through the Green Channel. The authorities found him carrying a TV with more than usual staple pins on its box.

It's a pretty good bet, dear reader, that only a tiny fraction of the gold that's being smuggled into India every day is being found by customs agents.  This Times of India story, filed from New Delhi, was posted on their website very early yesterday morning IST...and I found it embedded in a GATA release.

Mike Kosares: The connection between Q.E. and Gold

Mike Kosares of Centennial Precious Metals in Denver compares the chart of the gold price with that of reserve bank credit and finds a glaring anomaly since April's smashing of gold in the futures markets.

Kosares writes: "The gold price, as a result of its recent plunge, has crossed decisively under the reserve bank credit trend line. The two developments together have made for an interesting chart divergence -- the sort of thing that catches the attention of technicians and value investors alike, particularly if it defies logical explanation.

"This latest correction, more than any I can remember, has the experts scratching their heads. When an upward or downward spike in the market proceeds sans logical underpinnings, a snap-back rally or correction often follows. The last such incident in the gold market occurred in 2008. The market sold off roughly 30% at the height of the financial crisis, and then regained and superseded those losses before 90 days had elapsed. From there the market climbed to all-time highs in 2009."

This essay, with an excellent chart, was posted on the usagold.com Internet site yesterday...and I thank Chris Powell for wordsmithing the preamble for us.  By the way, if you want to sign up [for FREE] to Mike Kosares' news, commentary and analysis, you can do so by clicking here.

Inside Story: Gold, Trust, And The Federal Reserve - The Video Documentary

From the inside of the Federal Reserve's gold vault (where we are told one quarter of the world's bullion resides) to NYC's diamond district and the gold-dealers on the streets, this National Geographic documentary is a fascinating walk through the reality of trust, money, and gold.

As the narrator notes, "the Fed's discretion is so trusted that few depositors have ever asked to see if their gold is still here," except of course Germany now that is, adding (from the exact opposite perspective to the man that runs the building) that, "for thousands of years people used gold as money... it's the perfect recyclable money...."

The must-watch video then progresses to the reality of our financial world where he explains, the trillions in money that is transacted every day "used to be backed gold, but is now supported by the promise of our government...the fact that it all works based on trust alone is simply taken for granted," leaving the ominous question of "who is in charge" of that 'trust'?

This 30-minute documentary is well worth watching if you have the time.  It was posted on the Zero Hedge website early Monday evening...and I thank reader Christopher Cathis for bringing it to my attention...and now to yours.

Downward forces again hit gold and silver – can it continue?

Downward forces affecting the gold price are still prevailing as high frequency traders in paper gold continue their recent domination of the markets. 

Gold took another $30+ plunge at or around the time the latest U.S. job figures were released on Friday and appears to be making heavy weather of coming up with any significant recovery from the decline.

Indeed it has taken another dip Monday morning in London as high frequency trades kicked in at [the] open and again at 10.00.  Cynics would say that the release of the U.S.  figures gave those who are wishing to see the gold price fall the opportunity to have another go at driving down the market – successfully it would seem – as there was virtually nothing in the U.S. employment situation to suggest that the U.S. Fed is anywhere near tapering (winding down its bond purchasing policy) – fear of which seems to be the so-called analysts’ reasoning-of-the-moment behind the latest bout of gold and silver price weakness. 

And hereby remains the huge dichotomy that is gold.  Demand for physical gold has seldom, if ever, been higher.  Premiums being applied mean that those buying are happy to pay far higher prices than the official prevailing ones, yet the paper markets continue to force gold down.  At some stage one side or the other is going to have to give and there seems little sign of physical gold purchasing slowing down to any serious extent, although one supposes investor fatigue could set in given gold’s continued poor performance.

This commentary by Lawrence Williams was posted on the mineweb.com Internet site yesterday...and it's worth reading.

Bulk of U.S. Payroll Gain in Jobs Paying Less-Than-Average Wages

Occupations paying below-average wages accounted for more than half of last month’s U.S. payroll increase, a dynamic that may restrain consumer spending and the economic recovery.

Retailers, the hospitality industry and temporary-help agencies accounted for 96,300, or 55 percent, of 175,000 jobs added in May, figures from the Labor Department showed today in Washington.

“It’s not just jobs, it’s the kinds of jobs we’re creating,” said Diane Swonk, chief economist at Chicago-based Mesirow Financial Inc. “We need to see more broad-based and even growth in the economy to see better jobs return. We’re still relying too much on the part-time and contingent workforce.”

This story dove-tails nicely with that chart that Washington state reader S.A. sent our way further up.  This Bloomberg story was posted on their website just before noon MDT on Friday...and I thank reader Federico Schiavio for today's first story.

Fed’s Bullard Says Low Inflation May Warrant Longer Q.E.

Federal Reserve Bank of St. Louis President James Bullard, who has voted this year in favor of maintaining stimulus, said inflation below the central bank’s 2 percent target may warrant prolonging the “aggressive” use of bond buying to spur growth and bring down unemployment.

While “labor market conditions have improved since last summer,” Bullard said today in remarks during a panel discussion in Montreal, “surprisingly low inflation readings may mean the Committee can maintain its aggressive program over a longer time frame.”

The Federal Open Market Committee, which meets next week, is discussing when to slow $85 billion in monthly bond purchases, with San Francisco Fed President John Williams saying last week a “modest adjustment downward” in the buying is possible as “early as this summer.” Atlanta Fed President Dennis Lockhart said “very mixed” economic data makes him “more cautious” about a near-term reduction in purchases.

This Bloomberg news item was posted on their Internet site early yesterday afternoonMDT...and I thank West Virginia reader Elliot Simon for sharing it with us.

Economist Rogoff: Learn to Love Inflation

Instead of dreading inflation, central banks need to learn to love it, advises Kenneth Rogoff, former chief economist at the IMF, in an article for Project Syndicate.

Rather than preparing to take away the punch bowl, central banks should be spiking it, argues Rogoff, a Harvard University economics professor who co-authored the book, "This Time is Different: Eight Centuries of Financial Folly."

The Federal Reserve may soon end quantitative easing (QE) to "take away the punch bowl before the party gets going" and head off inflation before reaching its employment target.

"The trouble is that this is no ordinary recession, and a lot people have not had any punch yet, let alone too much," he explains.

This article was posted on the moneynews.com Internet site early yesterday morning...and it's Elliot Simon's second offering in a row.

Hedge Funds Haven't Owned This Much of the Stock Market Since Right Before the Crash in 2008

Two interesting stats on hedge fund exposure to the market via BofA Merrill Lynch analysts Stephen Suttmeier, Jue Xiong, and MacNeil Curry:

In the first quarter of 2013, net exposure (the difference between long and short positions in stocks) rose to match the previous peak (made in the second quarter of 2007).

The percentage of the stock market (specifically, the Russell 3000 float) owned by hedge funds is now the highest since the second quarter of 2008.

Based on the quarterly 13F filings and estimated short positions of the equity holdings of 895 funds, we estimate that hedge funds reduced cash holdings to the 2Q07 trough of 4.3%, while raising net exposure to the 2Q07 peak of 59% in 1Q13. Meanwhile, dollar notional net exposure rose by 11% to $463bn notional in 1Q13 – setting a new record. The bullish positioning indicates that risk appetite is back to the peak set in 2007.

This businessinsider.com article was posted on their Internet site on Saturday afternoon EDT...and it's a little something I found in yesterday's edition of the King Report.

Prism Exposed: Data Surveillance with Implications for the World

The American intelligence director and the White House have finally confirmed what insiders have long known: The Obama administration is spying on the entire world. Politicians in Germany are demanding answers.

South of Utah's Great Salt Lake, the National Security Agency (NSA), a United States foreign intelligence service, keeps watch over one of its most expensive secrets. Here, on 100,000 square meters (1,100,000 square feet) near the US military's Camp Williams, the NSA is constructing enormous buildings to house superfast computers. All together, the project will cost around $2 billion (€1.5 billion) and the computers will be capable of storing a gigantic volume of data, at least 5 billion gigabytes. The energy needed to power the cooling system for the servers alone will cost $40 million a year.

Former NSA employees Thomas Drake and Bill Binney told SPIEGEL in March that the facility would soon store personal data on people from all over the world and keep it for decades. This includes emails, Skype conversations, Google searches, YouTube videos, Facebook posts, bank transfers -- electronic data of every kind.

"They have everything about you in Utah," Drake says. "Who decides whether they look at that data? Who decides what they do with it?" Binney, a mathematician who was previously an influential analyst at the NSA, calculates that the servers are large enough to store the entirety of humanity's electronic communications for the next 100 years -- and that, of course, gives his former colleagues plenty of opportunity to read along and listen in.

George Orwell's wet dream come true.  This spiegel.de story from yesterday is a must read...and it's courtesy of Roy Stephens.

Edward Snowden, NSA files source: 'If they want to get you, in time they will'

Q: Why did you decide to become a whistleblower?

A: "The NSA has built an infrastructure that allows it to intercept almost everything. With this capability, the vast majority of human communications are automatically ingested without targeting. If I wanted to see your emails or your wife's phone, all I have to do is use intercepts. I can get your emails, passwords, phone records, credit cards.

"I don't want to live in a society that does these sort of things … I do not want to live in a world where everything I do and say is recorded. That is not something I am willing to support or live under."

Q: But isn't there a need for surveillance to try to reduce the chances of terrorist attacks such as Boston?

A: "We have to decide why terrorism is a new threat. There has always been terrorism. Boston was a criminal act. It was not about surveillance...but good, old-fashioned police work. The police are very good at what they do."

Q: What do you think is going to happen to you?

A: "Nothing good."

This follow-up interview [12:35 video clip embedded] was posted on the guardian.co.uk Internet site on Sunday...and it's definitely worth your time.  I thanks "Dr. David" for bringing this news item to our attention.

ECB says bond-buying program is unlimited

There is no limit to the European Central Bank's (ECB) bond-buying program, a spokesman for the bank said on Sunday, denying a German newspaper report published in the run-up to a court hearing on the scheme.

Frankfurter Allgemeine Sonntagszeitung on Sunday cited central bank sources as saying the ECB had set a limit of 524 billion euros on the Outright Monetary Transactions (OMT) scheme.

The bank had also had informed Germany's constitutional court - which will weigh the OMT's legality on Tuesday and Wednesday - of that limit, it said.

"The report is incorrect," an ECB spokesman told Reuters.

This Reuters piece, filed from Berlin, was posted on their website early Sunday morning EDT...and is another article I found in yesterday's edition of the King Report.

Clashes rock Turkish capital as protesters defy Erdogan

Police in Ankara fired tear gas and used water cannons to disperse thousands of people protesting near government buildings on Saturday, as Turkey’s biggest wave of anti-government protests in decades entered its second week with no signs of waning.

Turkey's state-run agency said pro- and anti-government protesters also clashed, for the second time since demonstrations began, according to the AP. The Anadolu Agency said a pro-government group hurled stones at a march by anti-government demonstrators in the city of Adana late Saturday. The agency said police evacuated women and children, but the two groups continued to clash with stones and batons.

Turkish Prime Minister Tayyip Erdogan’s governing party on Saturday ruled out early elections as tens of thousands of anti-government demonstrators defied his call for an immediate end to protests. He convened the leadership of his Justice and Development Party (AKP) to discuss the protests Saturday afternoon.

This news item, courtesy of Roy Stephens, was posted on the france24.com Internet site yesterday.

Japan’s Pension Fund Cutting Local Bonds to Buy Equities

Japan’s public pension fund, the world’s biggest manager of retirement savings, said it will reduce its holdings of local bonds and buy more shares.

The proportion of assets held in Japanese bonds will be cut to 60 percent from 67 percent, the health ministry said yesterday in Tokyo at a briefing to announce changes to the mid-term plan of the Government Pension Investment Fund. The weighting of local shares will be increased to 12 percent from 11 percent currently. The Health and Welfare Ministry, which oversees pensions, didn’t give a time frame for the changes.

GPIF’s shift toward higher-yielding assets comes as it prepares to fund retirements in the world’s most elderly population and Prime Minister Shinzo Abe tries to revive the economy through fiscal and monetary stimulus. Domestic shares have slid since Abe said on June 6 that a legislative campaign to loosen rules on businesses, the “third arrow” of his economic plan, won’t begin for months.

This Bloomberg news item, filed from Tokyo, was posted on their website late Friday afternoon Denver time...and I thank U.A.E. reader Laurent-Patrick Gally for finding it for us.

Seven King World Blogs/Audio Interviews

1. Hong Kong fund manager William Kaye: "The Ongoing War in Gold and  Coming Currency Collapse".  2. James Turk: "Financial Chaos, Currency Destruction and Cracks in the System".  3. Philippa "Pippa" Malmgren: "Former White House Official - Expect More Government Theft".  4. Michael Pento: "Expect Massive Inflation and Pain For Ordinary Citizens".  5. Eric Pomboy: "Stunning Gold and Silver Charts Reveal Shocking Global Demand".  6. The first audio interview is with Dr. Philippa Malmgren...and the second audio interview is with John Embry.

Australian Financial Review: The great gold bullion conspiracy

Thanks to our friend A.F., a better PDF copy of the Australian Financial Review's "Pierpont" commentary published Friday, headlined "The Great Gold Bullion Conspiracy" and cited in Friday's dispatch, "The Debate on Gold Infiltrates the Mainstream" has been posted at GATA's Internet site.

Gold's strange 'bear market': Deutsche Bank opens gold vault in Singapore

Deutsche Bank is opening a vault in Singapore that can hold $9 billion of gold, as it hopes to tap rising demand for the precious metal in Asia amid a push by the city-state to burnish its image as a bullion-trading hub.

Singapore last year scrapped a goods-and-services tax on gold in a bid to help boost its share of global gold demand to 10-15% within a decade from around 2% in 2012 as it seeks to compete with more established bullion-trading centers.

"Gold has traditionally been stored in London, Zurich, and New York, but there is a serious shift in dynamics going on as the global financial crisis continues to evolve," Mark Smallwood, Deutsche Asset & Wealth Management's head of wealth planning in the Asia-Pacific region, told The Wall Street Journal on Friday.

This subscriber-protected story was posted on The Wall Street Journal website on Sunday...and is posted in the clear in this GATA release.  I thank Marshall Angeles for first bringing this story to my attention...and now to yours.

Jim Rickards: Roubini Doesn't Understand Gold

Following some heated Twitter debates with Nouriel Roubini, James Rickards, author of "Currency Wars: The Making of the Next Global Crisis" spoke with Kitco News' Daniela Cambone to counter Nouriel Roubini's prediction that gold will drop to $1,000 by 2015. Aside from his rebuttal of Roubini's call, Rickards discusses his open Twitter exchanges with Roubini which the two have recently become known for, and sheds some light on the nature and origin of their debate.

This 15:18 minute interview was posted on the kitco.com Internet site on Friday...and is a must watch/listen.  I thank reader Lou Horner for being the first through the door with this news item.

China Approves Its First Gold Bullion ETFs

Chinese securities regulators approved for launch two gold bullion gold ETFs that will trade on the Shanghai stock exchange, bringing to investors in China an ETF concept that has been a smashing success in the U.S. but that has run into head winds in recent months as the 12-year gold rally falters.

The approvals allow Huaan Asset Management Co. and Guotai Asset Management Co. to proceed with separate product launches, according to a report published by Bloomberg News that cited sources at both asset management firms. It wasn’t clear from the report when the products might go live.

This story was posted on the indexuniverse.com Internet site yesterday...and it's courtesy of reader Randall Reinwasser.  There's also a WSJ story about it courtesy of Marshall Angeles...and the link to that is here.

Indian Government could take more steps to curb gold import: Rajan

Within days of hiking import duty on gold, Chief Economic Advisor Raghuram Rajan today said government could take more steps to curb demand for the precious metal amidst widening current account deficit.

"We have taken number of measures to curb the import of gold. The government will never say its end of it," he told reporters on sidelines of a workshop here.

Last week the government increased import duty on gold to 8%, the second such hike within six months.

This short gold-related news item appeared on the business-standard.com Internet site yesterday afternoon IST...and it's another offering from Marshall Angeles.

Casey Research: Gold Investor’s Stress Test

We've spent the past couple issues of BIG GOLD and the International Speculator examining our recommended companies in depth. We've analyzed all-in costs, tracked insider holdings, and projected stock prices based on lower metals prices. We've monitored political risk, reassessed the viability of projects, and examined past corrections to determine when gold might bottom.

But there's one factor that trumps all these.

The investor's attitude. More specifically, his or her emotional reaction to the gold industry's current retreat. After all, even if a company has high-grade projects, top management, low political risk, and below-average costs, it doesn't do the investor any good if they don't own the stock.

The realities of gold's price action over the past couple months dictate that our emotions not control our investment actions. We should coolly evaluate the circumstances based on facts, trends, and historical similarities.

Jeff Clark's comments were posted in yesterday's edition of the Casey Daily Dispatch...and they're definitely worth reading.

Sprott's Thoughts: Platinum...ETF Demand Points to a Price Increase

Despite a seemingly slam-dunk supply/demand imbalance, platinum's spot price has bounced around in a trading range between $1,400/oz and $1,730/oz. More recently it has come back down to test the bottom end of that range, but current developments in the ETF space suggest that the platinum price may be set to improve significantly in the coming months.

Our optimism stems from the April launch of a new platinum ETF by South Africa-based Absa Capital. Absa’s new ETF, which is the first of its kind in South Africa, managed to acquire 368,000 oz of platinum in its first month alone.

This short commentary by Mssrs. David Franklin and David Baker was posted on the sprottgroup.com Internet site yesterday...and is worth your while.

CFTC Gold and Silver Bank Participation Report - Ted Butler's Comments

"Since the BPR of February 5, the US bank category position (in effect, almost exclusively JPMorgan) has swung by a net 100,000 contracts, from net short 70,000 contracts to net long 30,000 contracts (all rounded). There has never been a move of such magnitude before. Over that same time, the total net commercial short position (in the COT) declined by 113,000 contracts, meaning that JPMorgan accounted for almost 90% of the entire commercial decline. It is not possible for that extreme degree of concentration and market share not to be manipulation, pure and simple.

And here’s the manipulative icing on the cake – JPMorgan was able to flip a net short position in COMEX gold of 50,000 contracts in February to a net long position of 50,000 contracts on a gold price decline of as much as $350. I would submit that the singular purchase of 10 million ounces of gold (worth the equivalent of $15 billion) within four months on a greater than 20% price decline could only be accomplished if the price was manipulated lower by the purchaser. No other explanation would be possible...

This absolutemust read article was posted on the jessescrossroadscafe.ca Internet site on Saturday.  The author 'borrowed' far more of Ted Butler's Saturday commentary than I would ever dare ask for...but since it's now in the public domain...I'll be happy to 'borrow' it too.

I had extensive comments on June's BRP in my Saturday column as well...but you, dear reader,must consider Ted's work on this as definitive.  He is the master...and the rest of us scribblers are just the messengers.  Everything about the BPR [and the COT Report, for that matter] came through him first.  I thank Marshall Angeles for the last story of the day.

Bill Gross Says Jobs Report Suggests Fed Won’t Taper Bond Buying

Bill Gross, manager of the world’s biggest bond fund, said the Federal Reserve is unlikely to reduce its asset purchases after the unemployment rate climbed from a four-year low in May.

“I don’t think today’s report says anything about tapering at all with unemployment going higher and metrics in terms of the work week and wages being very dour,'' Pacific Investment Management Co.’s founder Gross said in a radio interview on “Bloomberg Surveillance” with Tom Keene and Mike McKee. Fed Chairman Ben S. Bernanke “won’t taper. But I think ultimately in order to get a more normal economy, the Fed has got to move interest rates up to more normal levels.”

This Bloomberg item was posted on their website at 8:15 a.m. MDT yesterday...and I thank Ken Hurt for today's first story.

Greenspan: Taper Now, Even if Economy Isn't Ready

Former Federal Reserve Chairman Alan Greenspan told CNBC on Friday that the central bank should taper its $85 billion a month bond buying even if the U.S. economy is not ready for it.

"The sooner we come to grips with this excessive level of assets on the balance sheet of the Federal Reserve—that everybody agrees is excessive—the better," he said in a "Squawk Box" interview. "There is a general presumption that we can wait indefinitely and make judgments on when we're going to move. I'm not sure the market will allow us to do that."

Greenspan said he's not sure the markets will allow an easy exit. "Gradual is adequate, but we've got to get moving."

This CNBC interview was posted on their website early yesterday...and I thank U.A.E. reader Laurent-Patrick Gally for sending it our way.

Charlie Rose Interviews Former Fed Chairman Paul Volker

Paul Volcker, Former chairman of Federal Reserve the discusses launching The Volcker Alliance, a foundation which will look closely at the “nuts and bolts” of governance.

This 25-minute interview with Paul was posted on the charlierose.com Internet site on May 30th...and it had to wait until today's column.  It's well worth listening to...and I thank Ken Hurt for his second offering in today's column.

Why the Fed Can't Stop Fueling The Shadow Bank Kiting Machine

Fractional reserve banking is unlike most other businesses. It's not just because its product is money. It's because banks can manufacture their product out of thin air. Traditional commercial banks essentially create money through a well understood and time honored pyramiding of loans. Depositors who understand that their deposits are thereby placed at risk choose their banks accordingly.

Under the bygone rules of free market capitalism, only one thing kept banks from creating an infinite amount of money, and that was fear of failure. Failure occurs when depositors come to believe that their bank has lent out too much manufactured money to too many dodgy borrowers and may not be able to cover depositors’ withdrawals. When this happens, depositors rush to reclaim their money while there is still some left, leading to the bank’s collapse.

This longish, but very excellent essay, was posted on the Zero Hedge website on Monday...and it also had to wait until Saturday's column to find a home.  I thank reader U.D. for sending it along.

Doug Noland: 20-Year Anniversary of Market Backstops

I have posited that the Greek/European debt crisis was the first crack in the “global government finance Bubble”. Well, we are now witnessing the next important crack unfold in the “developing” markets and economies. And I don’t think it’s a stretch to suggest that another very important crack is emerging in the U.S. bond market (MBS, Treasuries and corporates). U.S. equities markets have shown resilience, not a shocking occurrence with sentiment so bullish and QE effects so powerful.

With the rapidly deteriorating global financial environment hitting an already fragile economic backdrop, it would be better for systemic stability if some air started to come out of the U.S. equities Bubble. But as Bubbles become deeper entrenched and increasingly speculative, it is more the nature of distended speculative Bubbles to disregard faltering fundamentals until it’s too late.

Above I noted the lack of a self-sustaining private-sector Credit upturn. Four years ago, I was writing that Washington’s reflationary gamble “was betting the ranch.” Increasingly, the marketplace is coming to better appreciate the fragility four years of Credit and financial excess has wrought on “developing” economies. Money has begun to flee some of these markets and the lesson of rapidly evaporating liquidity is learned the hard way - again. Confidence that large international reserve holdings would provide a liquidity backstop for the “developing” markets is waning. Here at home, the surge in market yields (and widening spreads) in the face of the Fed’s $85bn portends future liquidity issues.

Doug Noland's Friday commentary over at the prudentbear.com Internet site is always worth reading...and I thank reader U.D. for his second offering in a row.

Intelligence Chief Calls Leaks on U.S. Data Collection ‘Reprehensible’

The top intelligence official in the United States condemned as “reprehensible” leaks revealing a secret program to collect information from leading Internet companies and said a separate disclosure about an effort to sweep up records of telephone calls threatens “irreversible harm” to the nation’s national security.

The comments by James R. Clapper, the director of national intelligence, late Thursday night about the newly revealed government surveillance programs came as President Obama was set to travel to Southern California on Friday for a two-day summit with President Xi Jinping of China. The revelations appeared certain to overshadow discussions between the two leaders.

Disclosure of the secret programs involving some of the nation’s biggest technology and communications firms — including Google, Apple and Verizon — also seemed likely to prompt a vigorous discussion among policy makers and Internet consumers about the expectations for privacy in an increasingly connected and online world.

This article appeared in the Friday edition of The New York Times...and I thank Washington state reader S.A. for bringing it to our attention.

'How little rights you have:' Anonymous leaks more PRISM-related NSA docs

Hackers affiliated with the Anonymous collective have leaked a US Department of Defense memo relating to the PRISM program, revealing that the National Security Agency has secretly gathered intelligence on millions of Americans for years.

The hacktivists, who have long sought complete transparency online and elsewhere, published a total of thirteen documents, one of which outlines the US government’s “NetOps Strategic Vision” for monitoring the Internet.

The documents are mostly pulled from 2008, just after when the government reportedly began using PRISM to mine servers at technology companies including Microsoft and Yahoo. An NSA slideshow published Thursday by the Guardian and the Washington Post reveals the intelligence community first gained access to Google in January of 2009 and Facebook in June of the same year.

This news item was posted on the Russia Today website late yesterday evening Moscow time...and it's Roy Stephens' first offering in today's column.

Nigel Farage: Greece has been sacrificed on the altar of the failed euro experiment

In June 2011, I stood in front of the assembled ranks of Eurocrats – Barrosso et al – with a copy of the IMF charter in my hand and read it out. The IMF expressly rejects the idea of supporting currencies; it is there instead to support countries.

Now, exactly two years later, we find that the IMF – with the support of the political establishment of the European Union, including our own George Osborne and David Cameron – was preparing to gamble billions of pounds on a lie.

This gamble has resulted in liabilities being run up that will take generations to pay back. It has resulted in the destruction of millions of lives and the colonial depredation of a once-proud nation.

Nigel is never one to pull his punches, gild lilies, or suffer fools gladly...and his commentary here is typical Nigel Farage.  It's worth reading...and I thank London, U.K. reader Iain Doherty for sharing this story from yesterday's Telegraph with us.

No 'peace at home' in Turkey

"Peace at home, peace in the world" is the official motto of the Turkish Republic. Coined in 1931 by the republic's founder, Mustafa Kemal Ataturk, it implies a causal relationship, but the events this week in Istanbul and dozens of other cities of Turkey suggest that causality can work in reverse order, too.

With protests continuing over the past week, two years of Arab Spring and intense socioeconomic unrest in southern Europe seem to be spilling into Turkey, which until now had stayed out of trouble.

Still, the economy is strong, although not as strong as it has generally been in the past decade. As a result, the similarities Turkey shares with northern and southern Mediterranean countries that are also going through a crisis have more to do with poor leadership.

Financial success, fueled by foreign direct investment (FDI) in luxury real estate in Istanbul and along Turkey's Aegean coast and by massive privatization of state enterprises, has given the ruling Justice and Development Party (AKP) unparalleled popularity as well as an increasing feeling of invincibility.

This very interesting commentary from Inter Press Service was posted on the Asia Times website yesterday...and is another contribution to today's column from Roy Stephens.

Iran Outmaneuvers U.S. in the Syrian Proxy War

Syria’s uprising offered the possibility of a strategic defeat of Iran. In this scenario, Iran would be weakened by the collapse of Bashar al-Assad’s regime, its single Arab ally and a vital link to Lebanon’s Hezbollah militia. Isolated, Iran would become more vulnerable to international pressure to limit its nuclear program. And as Iran’s regional influence faded, those of its rivals -- U.S. allies Turkey, Qatar and Saudi Arabia -- would expand.

Instead, events in Syria are spinning in Iran’s favor. Assad’s regime is winning ground, the war has made Iran more comfortable in its nuclear pursuits, and Iran’s gains have embarrassed U.S. allies that support the Syrian uprising. What’s more, Iran has strengthened its relationship with Russia, which may prove to be the most important strategic consequence of the Syrian conflict, should the U.S. continue to sit it out.

Part of the U.S. calculation in declining to intervene has been the assumption that Assad would inevitably fall. The U.S., apparently, did not consider the implications of leaving the door open to a comeback by Assad. Reinforced by Hezbollah fighters and armed with Iranian and Russian weapons, the Syrian army broke through rebel lines in the central city of al-Qusair last week. The symbolic victory has dashed hopes for a quick end to the regime or a diplomatic resolution to the fighting.

This Bloomberg story was posted on their website on Tuesday...and is a must read for all students of the "New Great Game".  It's another article that had to wait for today's column...and I thank Laurent-Patrick Gally for sending it.

Pepe Escobar: Hezbollah don't take no mess

The "Friends of Syria" are appalled. Their much vaunted "rebel held" stronghold of Qusayr is gone. This BBC headline sums it all up: "Syria conflict: US condemns siege of Qusayr."

For White House spokesman Jay Carney, "pro-government forces", to win, needed help from by their "partners in tyranny" - Hezbollah and Iran. Right: so the "rebels" weaponized by Saudi Arabia, Qatar and the CIA, not to mention jihadis of the Jabhat al-Nusra kind, are partners in what, "freedom and democracy"?

Spin out, facts in. This is a monster strategic defeat for the NATO-Gulf Cooperation Council-Israel axis. [1] The supply lines from Lebanon to Homs of the Not Exactly Free Syrian Army (FSA) gangs and the odd jihadi are gone. The Syrian Arab Army (SAA) will next move to Homs and the whole Homs governorate. The final stop will be two or three Aleppo suburbs still controlled by the FSA.

There's absolutely no way Qusayr can be spun in the West as yet another "tactical withdrawal" by the FSA. The rebels insist they "withdrew". Nonsense. It was a rout.

Pepe is at the top of his game in this Asia Times piece from Thursday...and it's a must read whether you're a student of the "New Great Game" or not.  I thank Marshall Angeles for digging this one up for us.

60,000 in Tokyo protest government plans to restart nuclear power

Approximately 60,000 people rallied in Japan’s capital of Tokyo on Sunday, June 2nd in order to protest recent government plans to restart the country’s idled nuclear reactors. People gathered in Shiba Park and later marched towards the parliament building. Among the organizers was Kenzaburo Oe, a Nobel literature laureate, who called on the Japanese government to leave the nuclear power plants in suspension out of fears for safety.

The Japanese government has previously stated that it will most likely allow those reactors to return to power which have been approved by the Nuclear Regulation Authority (NRA), whose new safety guidelines are scheduled to be adopted in July. One of Japan’s largest-ever protests saw 170,000 people gather in a similar fashion in July 2012, around the same time that then-Prime Minister Yoshihiko Noda decided on the first two reactor restarts since the March 2011 Fukushima disaster. As of now, the anti-nuclear protestors say they have collected over 8 million signatures of those opposed to reactor restarts.

This very short, but very interesting article was posted on the japandailypress.com Internet site on Monday...and I thank reader Bill Busser for sending it our way.

Sprott's Thoughts: Chart of the Week...Aussie Dollar ‘Dirt Nap’

The Australian dollar has dropped to its lowest level in more than two and a half years versus the US dollar. The currency dropped below 95 cents US and briefly touched 94.71 US cents, a level not seen since October 2011. Economic weakness in China and a tepid domestic recovery are to blame.

Recently, evidence has been mounting that the Chinese economy is losing momentum. The final reading of the HSBC China manufacturing Purchasing Managers’ Index (PMI) for May fell to 49.2, down from a preliminary reading of 49.6, and below April’s reading of 50.4. A result below 50 signals a contraction and the May reading was the first below 50 in seven months. In a recently published report, quoted by MarketWatch, JP Morgan stated that, “Overcapacity and declining rate of return on investment are the top challenges in the manufacturing sector, and may continue to drag on China’s economic growth in the medium term.” The potential slowdown in China, the biggest buyer of that country’s minerals has sparked a reappraisal of Australia’s economic prospects.

In addition to the reverberations from China, the Australian domestic economy has also been showing signs of vulnerability. GDP figures released yesterday showed that yearly growth in the Australian economy slowed to just 2.5% in the first quarter of 2013, its weakest level in two years. Further, the Australian PMI index for manufacturing recovered slightly in May, but has been below the benchmark 50 level for the last 15 months, signifying a manufacturing contraction that continues.

This short commentary by David Franklin was posted on the sprottgroup.com Internet site yesterday...and the chart is well worth looking at.

Four King World News Blogs/Audio Interviews

1. Dr. Philippa "Pippa" Malmgren [#1]: "Former White House Official Discusses Gold Manipulation".  2. Keith Barron: "There is a Tremendous Shortage of Physical Gold Out There".  3. Dr. Philippa "Pippa" Malmgren [#2]: "Former White House Official - Coming Chaos, Inflation and Gold".  4. The audio interview is with Bill Fleckenstein.

Here is Today's 482 Millisecond NFP Leak...the Subsequent Gold Slam and Trading Halts in Treasurys and ES

On Monday we brought to you proof of a 15 millisecond front-running of the manufacturing ISM number by what turned out to be HFT clients of Reuters which admitted subsequently it had "inadvertently" leaked the number to select clients.

However, that was child's play compared to the absolute market farce that happened today which we can visualize courtesy of Nanex, and which impacted gold, ES, and Treasury Futures altogether.

In sequential order: 62 milliseconds before the NFP number a massive dump of gold took place in what can merely be described as yet another of the infamous gold take downs we know so well which however take place just around the time of the London fixing. That it happened right before the NFP number is either an indication of an early NFP data leak reaching "some" HFT traders, or merely an attempt to set the "mood" for further selling by someone who decided that the NFP print would be negative for gold no matter what it was...

This Zero Hedge commentary from yesterday pretty much sums up my thoughts on what happened yesterday...and the charts are definitely worth your time.  I thank Manitoba reader Ulrike Marx for bringing it to my attention...and now to yours.

Sprott at the World Resource Investment Conference in Vancouver

We’d like to share with you some interesting video presentations from the World Resource Investment Conference in Vancouver.

In these three presentations, Rick Rule, Chairman of Sprott USA, shares his views on the resource sector, Steve Yuzpe, CFO of Sprott Resource Corp, discusses the long term thesis for investing in agriculture, and David Franklin, Market Strategist at Sprott Asset Management LP, explains why we are bullish on the fundamentals for platinum and palladium.

The video interview with Rick Rule runs for 10 minutes...and the other two are about 30 minutes apiece.  I sat in on David Franklin's presentation...and if I had to pick just one video out of the three, that would be the one I would choose...but I'm not you.  All of this was posted on the sprottgroup.com Internet site last Saturday.

Australian gold fund shut as investors exit

Sydney-based Taurus Funds Management Pty Ltd has shut its precious metals mutual fund as Australian and U.S. investors fled after prices of gold began to decline in the beginning of the year, director Gordon Galt told Reuters.

The fund, which at one point held about $250 million in assets under management (AUM), was closed last month after large redemptions reduced the size of the fund. Its AUM was at $120 million as of December, according to Galt.

"We had a number of large investors who decided they no longer wanted to carry the exposure to precious metals," said Galt. "So once the fund got below a certain size, it was not worth continuing to run it."

This Reuters piece was filed from Singapore yesterday...and it found a home over at the mineweb.com...and I thank Ulrike Marx for her second and final offering in today's column.

Ghana Expels Illegal Chinese Gold Miners

Ghana is expelling more than 160 Chinese nationals as part of a recent crackdown on illegal gold mining.

The government announced the expulsions this week, about a month after President John Dramani Mahama formed a task force to curb illegal mining in Ghana, Africa's second largest gold exporter behind South Africa.

An official with Ghana's Immigration Service, Public Affairs head Francis Palmdeti, told VOA that small scale mining activities are forbidden to foreigners in Ghana.

This article was posted on the Voice of America website yesterday...and I thank Marshall Angeles for bringing this story to our attention.

The debate on gold infiltrates the mainstream

Yesterday's edition of the Australian Financial Review, published from Melbourne, carries a long commentary, headlined "The Great Gold Bullion Conspiracy," which acknowledges growing suspicion that the gold futures markets are being manipulated to suppress the gold price and support the U.S. dollar.

If gold market manipulation can elicit interest from a news organization as mainstream as the Australian Financial Review, getting into The Wall Street Journal, The New York Times, the London Telegraph, Bloomberg News, Reuters, and The Associated Press might not take more than another few hundred years.

This absolute must read commentary is embedded in a GATA release from yesterday.

Stock Sell-Off Should Be Wake-Up Call: SocGen’s Edwards

Wednesday's sharp selloff in U.S. stocks should be a wake-up call for investors, Société Générale's notoriously bearish strategist Albert Edwards said, adding that weak manufacturing data merely illustrated the continuation of a clear downtrend.

"I might be wrong, but I just don't see this economy as healthy. If I am right, then any sharp rise in bond yields should quickly derail this apology of a recovery," Edwards wrote in a note, published on Thursday.

The Dow Jones Industrial Average closed below 15,000 points on Wednesday, for the first time in a month. This followed the publication of the Institute for Supply Management's (ISM) index, which showed that U.S. factory activity fell to 49.0 in May, below the 50-point level signaling growth. However, many investors are convinced the bull market remains intact, with bargain hunters still keen to step in.

Well, the Plunge Protection Team showed up to save the Dow at its 50-day moving average, so we'll see what happens going forward.  This CNBC story was posted on their website early yesterday morning...and today's first news item is courtesy of U.A.E. reader Laurent-Patrick Gally.

Dr. Marc Faber: Even QE99 won't help U.S...India best in Asia

Despite quantitative easing (Q.E.) not really bearing any fruit for the common man, the Federal Reserve is likely to continue with it and go "up to QE99," says investment guru Marc Faber. He strongly feels easy money has not boosted employment for the ordinary people; instead it has given a philip to asset prices owned by very small portion of the population. Property prices over the last 12 months are up 35 percent, but all this has not helped the man on the street, he says.

After Japanese market went up 17 percent between November and two weeks ago and then corrected by 15 percent, Faber cautions investors of the high volatility in the second half of this year.

He feels there has been a remarkable slowdown in economic activity in Asia. Also, there has been a significant slowdown in Indian growth. Europe is in recession. "We are not in a traditional recession where everything is depressed like during SARS in Hong Kong, but it is just not growing anymore and the corporate profits by large are now beginning to disappoint," he says in an interview to CNBC-TV18.

This story was posted on the moneycontrol.com Internet site at 10:13 a.m. IST yesterday...and I thank reader Ken Hurt for sharing it with us.

Mortgage Refinance Applications Are Crumbling

Mortgage refinance applications have been taking a hit recently.

Yesterday morning's MBA purchase applications showed that refinance index was down 15% for the May 31st week.

The refinancing index is down four straight weeks, and was down 12% the previous week.

This Business Insider article was re-posted on the seattlepi.com Internet site yesterday...and I thank Washington state reader S.A. for sending it our way.

Democratic Senator Defends Phone Spying, and Says it's Been Going on For 7 Years

Senators on both sides of the political aisle moved to defend the National Security Agency's collection of data from millions of Americans' phone records, saying it has been an ongoing practice that has kept the United States safe.

Sen. Dianne Feinstein (D-Calif.) told reporters on Thursday that The Guardian's revelation of the court order that compels Verizon to give data on millions of Americans' calls is a standard three-month renewal of a practice that has been ongoing for about seven years.

Welcome to the Police State of Amerika, Komrade.  This business.com story was posted on their Internet site late yesterday morning...and it's today's first offering from Roy Stephens.

The History Of The Bilderberg Conference — The Most Famous Secretive Gathering Of Elites That Happens Every Year

Yesterday, over 100 masters of the universe assembled at the swanky Grove hotel in Watford, England for one of the most clandestine and controversial meetings in the world — the Bilderberg Conference.

Bilderberg has been around for almost 60 years, bringing together the most powerful people in the United States and Europe.

From CEOs to political bigwigs, it's an opportunity for the global elite to gather every year and have an open dialogue about world affairs, no reporters allowed.

This businessinsider.com news item was posted on their website early yesterday EDT...and it's the second story in a row from Roy Stephens.

'Notable Failures': IMF Admits Major Mistakes on Greek Bailout

The International Monetary Fund acknowledges that it made "notable failures" on the first rescue package for Greece, setting overly optimistic expectations for the country's economy and underestimating the effects of the austerity measures it imposed. As such, the fund said in an unusually frank report released on Wednesday, it lowered its own standards on debt sustainability, setting lending levels too high for Greece while not pushing hard enough on Greek debt restructuring.

The IMF, together with the European Central Bank and the European Commission, make up the so-called Troika, which intervened in 2010 to keep the euro-zone country from defaulting on its debts and having to leave the common currency bloc. At the time, the IMF pledged some €30 billion ($39 billion) to Greece, out of a total bailout package of €110 billion. This was followed by a further pledge of €165 billion, plus €107 billion in private loan forebearance.

Some IMF board members and others criticized the fund for giving Greece so much money relative to the size of its economy and accused it of bending to appease its European members. The IMF, however, insisted the debt levels were sustainable as long as its economic projections were accurate. In retrospect, however, the IMF now says that it lowered its bar for Greece.

This article was posted on the German website spiegel.de yesterday...and I thank Roy once again for bringing it to our attention.

E.U. commission on the defensive over IMF report

The European Commission has hit back at criticism over its handling of the Greek debt crisis, insisting that cutting the country's budget deficit and keeping it in the euro was "no mean feat."

Speaking with reporters on Thursday (6 June), Simon O'Connor, spokesman for Olli Rehn, the bloc's economic and monetary affairs commissioner, described as "plainly wrong" assertions in an International Monetary Fund (IMF) report that not enough had been done to promote economic recovery in Greece

"We fundamentally disagree that not enough was done to promote growth, this is plainly wrong and unfounded," he said.

This article was posted on the euobserver.com Internet site yesterday afternoon Europe time...and it's another offering from Roy Stephens.

Hard-line ECB washes hands of jobless crisis, sees no 'Japanese' deflation

The European Central Bank has refused to take any further measures to lift the eurozone out of recession and curb rising unemployment, counting on spontaneous recovery later this year to do the job.

Mario Draghi, the ECB’s president, said the wild moves in currencies and global stock markets over the past two weeks do not change the fundamental picture, though the bank has downgraded its economic forecasts and expects a deeper contraction of 0.6pc this year. “It is not enough to justify immediate action,” he said.

“The ECB seems to have given up. It is as if they have decided that there is not much more they can do and will simply allow events to run their course,” said David Owen from Jefferies Fixed Income.

The Governing Council held interest rates steady at 0.5pc, and discussed a range of measures to alleviate the credit crunch across Southern Europe and boost lending to small business, without reaching any conclusion. “People don’t have definitive ideas yet,” said Mr Draghi.

This Ambrose Evans-Pritchard commentary was posted on the telegraph.co.uk Internet site early yesterday evening BST...and I thank Manitoba reader Ulrike Marx for bringing it to our attention.

The Truth about Erdogan: Turkey's 'Other 50 Percent' Demand a Voice

Turkish Prime Minister Erdogan is driving a wedge through his country. While one half reveres him as a savior, the other reviles him as a dictator. By continuing to condemn his opponents and ignore their demands, he is playing a dangerous game.

In Turkey, there are always at least two truths. On Taksim Square in Istanbul, and on the streets of many other cities in 77 of Turkey's 81 provinces, the prevailing truth is that Prime Minister Recep Tayyip Erdogan is curtailing civil rights, governing in an autocratic manner and is trying to force his conservative religious values on the population.

That is the truth motivating tens of thousands of demonstrators to take to the streets for six days, despite tear-gas and truncheon attacks by police. The Turkish Medical Association (TTB) estimates that three people have died and more than 4,000 have been wounded during the protests. There are no reliable figures regarding the number of arrests.

But there is another truth in Kasimpasa, the former dockyard area of Istanbul where Erdogan grew up, and in other more religious parts of the city and in villages throughout the country. In these areas the prevailing truth is that rioters, who have possibly been incited by opposition leaders and foreigners, are running wild and wrecking the cities, waging a campaign against Islam and vilifying the lone politician deserving of praise. The police, in this view, are only reacting so brutally because they are forced to.

This background story, originally headlined "Erdogan plays dangerous game by ignoring protester demands" was posted on the spiegel.de Internet site late Thursday afternoon Europe time...and the stories from Roy Stephens just keep on coming.

Turkey's prime minister vows to continue Gezi Park development

Turkey's prime minister, Recep Tayyip Erdoğan, has vowed to press ahead with the controversial redevelopment of a square in Istanbul, in a move that puts him on a collision course with tens of thousands of anti-government protesters and could provoke further unrest across the country.

Speaking in Tunis before flying back to Istanbul on Thursday evening, Erdoğan acknowledged that some of those who had defended Istanbul's Gezi Park had acted for genuine environmental reasons. But he also said "terror groups" were behind Turkey's biggest demonstrations in years and hinted at a plot involving radical Marxist-Leninists.

"Public property was damaged during the Gezi Park protests. The Taksim [Square] project is a project that will make Istanbul more beautiful," Erdoğan said.

He pledged to press ahead with the building of an Ottoman barracks on the site next to the park, despite the vehement objections of protesters. "You cannot rule a state with the logic of give and take," he said.

This story appeared on the guardian.co.uk Internet site early yesterday evening BST...and it's another news item courtesy of Roy Stephens.

China fuels trade row with attack on 'haughty' Europeans

The official mouthpiece of the Chinese Communist Party has attacked the European Union, lashing out at the “haughty attitudes of certain Europeans” and warning that China still had “plenty of cards” to play in an increasingly acrimonious trade dispute.

“China does not want a trade war, but trade protectionism cannot but bring about a counter-attack,” warned an editorial in the People’s Daily newspaper, whose opinion pages often reflect government thinking.

The newspaper’s attack came two days after the EU Commission announced it would begin charging duties on solar panels imported from China.

Hefty tariffs of up to 48 per cent will be placed on subsidised Chinese solar panels, Karel De Gucht, the EU’s trade commissioner, announced on Tuesday.

This news item appeared on The Telegraph's website early yesterday afternoon BST...and it's another contribution by Roy to today's column.

Emerging markets displace Europe as fulcrum of world risk

There is a wicked double edge to the emerging-market boom that has so enthralled us for the past decade. The economies of these rising powers are by now big enough to shake the entire world if they come off the rails.

Some feared this might happen in 1998 when Russia defaulted and East Asia’s currency crisis span out of control, a drama precipitated by a rising dollar. Contagion spread to western Europe, causing the pre-euro “convergence play” to snap back violently.

The US hedge fund Long Term Capital Management was caught $100bn (£65bn) short as bond spreads surged in Club Med, and equities plunged. The threat of a chain reaction was serious enough to force emergency rate cuts by the Fed. The crisis abated.

Asia’s economy is a much bigger beast today, and so is the emerging market (EM) universe. These countries now account for half of global investment. Gross fixed-capital formation last year by EM powers in the G20 bloc was $6.7 trillion, 48pc of the total. China alone spent $3.85 trillion, eclipsing America at $2.5 trillion – even with the US shale boom.

This Ambrose Evans-Pritchard commentary was posted on the telegraph.co.uk Internet site on Wednesday evening...and it falls into the must read category.  This story also represents Roy Stephens' final offering in today's column.

Three King World News Blogs

1. Egon von Greyerz: "Swiss Refiner Delays Hit 5 Weeks on Massive Gold Demand".  2. Louis Yamada: "3 Fantastic Charts Plus Commentary on Gold and Stocks".  3.  Dr. Stephen Leeb: "Fund Managers Are Now Buying Gold With Their Own Money".

HKMEx may face searching Legco inquiry

The failed Hong Kong Mercantile Exchange (HKMEx) could come under further scrutiny after Liberal Party leader James Tien Pei-chun suggested launching an inquiry into the company under the Legislative Council's power and privileges ordinance.

Tien proposed setting up a select committee to look into the exchange founded by Barry Cheung Chun-yuen, a former key adviser to Chief Executive Leung Chun-ying, and whether it received privileged treatment from the securities regulator.

Legco's House Committee will discuss the proposal tomorrow. The pan-democratic camp backs the idea, but some key pro-establishment groups are withholding support.

HKMEx is already under investigation by the Securities and Futures Commission and the police.

This very interesting story was filed on the South China Morning Post early Thursday morning Hong Kong time...and I thank reader 'David in California' for sending it.

India's move to douse gold demand unlikely to succeed

India's decision to raise the import tax on gold for the third time in 18 months is unlikely to help the government narrow a widening trade deficit and may only drive trade to illegal channels, traders and analysts said Thursday.

The government late Wednesday increased the import tax on refined gold to 8% from 6% and on gold ore and intermediate products to 7% from 5%. The tax hikes are meant to reduce demand for imported gold, which has worsened India's trade deficit and pushed the rupee this month to the verge of all-time lows against the U.S. dollar.
Related

The latest tax increase followed a surge in demand since mid-April, as the international price of gold fell to a two-year low.

This Wall Street Journal piece from Thursday, filed from New Delhi, was posted in the clear in this GATA release yesterday.

Anger, smuggling and other implications of India's gold import hike

A trigger happy Indian government has done it again. Customs duty on the import of gold was hiked by two percentage points, to 8%. This is the second time in six months that the duty has been raised. Traders who are set to lose heavily insist that it could lead to large scale smuggling in the country.

Import duty was at 6% earlier, which had rattled jewellers and made the cost of the precious metal more expensive for Indian consumers, who could not effectively benefit from the drop in bullion prices in the international market.

Gold imports by India were set to surge with the festival season luring shoppers. However, news of the import hike was greeted by scorn and anger from retailers. ``This is bound to raise many issues. Smuggling is just one of them. How can one sustain demand in the world's biggest gold consumer,'' said Navneet Mehta, bullion trader.

This news item was posted on the mineweb.com Internet site yesterday...and it's courtesy of Ulrike Marx.

India Central Bank Prohibits Sales Of Gold Coins

"The Reserve Bank of India has advised banks against selling gold coins to retail customers, Finance Minister P. Chidambaram said on Thursday, a day after he raised gold import duty to try to ease pressure on India's bloated current account deficit."

Well, if there ever was one sure way to send demand for any product through the roof (guns, ammo, etc), it is for the government to prohibit its outright sale.

This short article was posted on the Zero Hedge website early yesterday afternoon EDT...and my thanks go out to Marshall Angeles.

Glancy Binkow & Goldberg LLP Files Securities Class Action Lawsuit Against Barrick Gold Corporation

The Complaint alleges that, throughout the Class Period, the defendants made false and misleading statements and concealed material information relating to the cost and time-to-production projections for the Company’s Pascua-Lama Project (“Pascua-Lama” or the “Project”), a property under development as an open-pit gold and silver mine that straddles the mountainous border between Argentina and Chile.

Barrick, based in Toronto, Ontario, is one of the world’s largest gold mining companies in terms of production, reserves and market value. The Complaint alleges that during the Class Period, Barrick concealed from shareholders that: (1) the costs of bringing Pascua-Lama into production far exceeded any of Barrick’s various publicly presented estimates; (2) Pascua-Lama presented no reasonable expectation of coming into production within any of Barrick’s various publicly presented time horizons; (3) Pascua-Lama’s environmental impact presented significantly greater risks to the Project and the Company than those disclosed by defendants; and (4) as a result, defendants had no reasonable basis for their statements regarding the cost, timing, and production estimates for the Project, or the reserves and earnings guidance for the Company.

The true state of the Pascua-Lama Project was revealed in part on April 10, 2013, when news outlets reported that the Appeals Court of Copiapó, Chile, had issued an order suspending work on Pascua-Lama. In reaction to this news, Barrick’s stock price fell $2.23 per share, or 8.3 percent, to close at $24.46 per share on trading volume of more than 40 million shares.

There are many skeletons in Barrick's closet...and this one is hardly worth mentioning, but it certainly won't help the company.  Bankruptcy, or something close to it, is probably staring them in the face right now.  This item was posted on the businesswire.com Internet site yesterday...and it's the second news item in a row from Marshall Angeles.

GoldMoney's Macleod interviews GATA secretary on gold price suppression

GoldMoney's research director, Alasdair Macleod, interviewed Chris Powell earlier this week about gold price suppression, GATA's work exposing it, and the refusal of most of the mainstream financial news media to examine the issue. The interview is 23 minutes long and can be heard at GoldMoney's Internet site.

I found this podcast in a GATA release yesterday...and anything Chris has to say is worth your while.

Gold Traders Most Bullish Since Bear Market Began

Gold traders are the most bullish since before the bear market began two months ago after a retreat in equities from an almost five-year high and a weakening dollar spurred demand for bullion.

Nineteen analysts surveyed by Bloomberg expect prices to rise next week, with eight bearish and six neutral, the largest proportion of bulls since March 22. Global stocks that rose to the highest since June 2008 on May 22 reached a six-week low yesterday amid mounting speculation about whether the Federal Reserve will taper stimulus. The U.S. Dollar Index, a measure against six currencies, slipped to the lowest in three months.

Well, it will only rise significantly if JPMorgan et al wish it to be so.  They are...and always have been...in the precious metal drivers seat. This Bloomberg story was posted on their website late last night Mountain Daylight Time...and is definitely worth reading. I'm somewhat curious as to why this story was posted that late at night. I thank reader Ken Hurt for the final news item in today's column.

C'est Fin: Fed's Fisher Declares End to Bond Rally

We've had Federal Reserve officials say it's time to consider tapering bond purchases, but we haven't —at least not in my memory — had a Federal Reserve official declaring a rally of anything "over"...until now.

"This is the end of a 30-year rally" in bonds, Federal Reserve Bank of Dallas President Richard Fisher said last night to reporters, after a speech in Toronto. Mr. Fisher isn't a voting member of the FOMC — and granted, he's the leading voice of hawkishness within the small contingent of Fed hawks — but his views are widely quoted.

Read that comment carefully: he emphasized that this wasn't just a short-term top, this was the end of the BIG BOND RALLY. His full quote: "We've had a 30-year bull bond market...At some point secular markets change."

This CNBC story was posted on their Internet site at 10:30 a.m. EDT yesterday...and today's first story is courtesy of U.A.E. reader Laurent-Patrick Gally.

Reuters Admits to "Inadvertently" Leaking ISM Data 15 Milliseconds Early to HFT Clients

Back on Monday, following the huge miss in the Manufacturing ISM, in collaboration with Nanex, we exposed yet another instance of blatant headline data front-running in "15 Milliseconds Of HFT Fame: Watch Today's Early Leak Of The ISM Print" where we showed aggressive trading amounting to tens of millions in notional contracts ahead of the 10 a.m. release of the key economic indicator.

We assumed that just like every other lament about a market that is front-run by those "who have the means", manipulated (by the Fed of course - remember when that was just a conspiracy theory: good times) and simply broken, it would disappear in the ether forever. After all: why bring attention to facts when hopium is sufficient for the E-Trade baby to retire rich and famous before it has hit 2.

We were delighted to learn that CNBC's Eamon Javers picked up the torch and actually did some further investigating, which in turn led to an actual admission out of Reuters that it "inadvertently" sent out the data to "a select group of high frequency traders, many of whom immediately traded on the information before it was available to the wider market, CNBC has learned." Inadvertently? The humor just never stops.

This Zero Hedge piece from early yesterday afternoon EDT is the second story in a row from Laurent-Patrick Gally.

Ted Cruz: ‘Abolish the IRS’

Hours before the House Appropriations Committee held a hearing on political targeting at the Internal Revenue Service, Sen. Ted Cruz (R-Tex.) had a simple solution to the agency’s problems — get rid of it altogether.

“I think we ought to abolish the IRS and instead move to a simple flat tax where the average American can fill out taxes on postcard,” he explained in a Fox News interview over the weekend. “Put down how much you earn, put down a deduction for charitable contributions, home mortgage and how much you owe. It ought to be a simple one-page postcard, and take the agents, the bureaucracy out of Washington and limit the power of government.”

Cruz proposed a flat tax during the 2012 election, but he said he would keep a standard deduction for lower-income earners, as well as deductions for mortgage interest and charitable donations.

This short news item showed up on the washingtonpost.com Internet site late on Monday afternoon...and I found it in yesterday's edition of the King Report.

WHAT IN THE WORLD IS GOING ON? Jeff Gundlach Answers This In His Fantastic New Presentation

Something happened in the middle of May," said investing god Jeff Gundlach as he began his latest webcast on the state of the global markets and the economy.

He was referring to how global interest rates quietly rallied and how the Japanese stock market fell spectacularly.

He notes that the magnitude of the interest rate rally isn't unusual.  Having said that, Gundlach believes rates will stay low thanks to a "put" by the Federal Reserve. Should rates rise, Gundlach believes the Fed would actually expand quantitative easing. This is because high interest rates would put too much pressure on the economy, and it would cause Federal interest expenses to become too onerous.

This webcast presentation by Jeff Gundlach was posted on the businessinsider.com Internet site early Tuesday evening and is definitely worth your time.  I thank Roy Stephens for his first offering of the day.

NSA collecting phone records for millions of Verizon customers, report says

The National Security Agency currently is collecting the telephone records of millions of U.S. customers of Verizon under a top secret court order, Britain's Guardian newspaper said Wednesday.

The order was granted by the secret Foreign Intelligence Surveillance Court on April 25 and was good until July 19, the newspaper said. The order requires Verizon, one of the nation's largest telecommunications companies, on an "ongoing, daily basis" to give the NSA information on all telephone calls in its systems, both within the U.S. and between the U.S. and other countries.

The newspaper said the document, a copy of which it had obtained, shows for the first time that under the Obama administration the communication records of millions of U.S. citizens were being collected indiscriminately and in bulk, regardless of whether they were suspected of any wrongdoing.

This AP story was posted on the foxnews.com Internet site in the wee hours of this morning...and I thank Florida reader Charles Dubelier for passing it along.

Renault, Citroën hit by 10% drop in French car sales

New car registrations in France, a key indicator of economic health, dropped sharply in May according to new data published on Monday, with Renault and Citroen the worst affected.

A total of 148,554 new cars were registered in France last month, a 10.3-percent drop compared to the same period in 2012, according to statistics published by France's industry group for auto makers, CCFA.

The Renault group plunged by 16.5 percent while Citroen also dropped sharply, by 14.5 percent.

It's never a good sign for an economy when car sales fall off a cliff like that.  This france24.com article showed up on their Internet site on Monday...and it's the second offering in a row from Roy Stephens.

Unrest in Turkey: Erdogan's Love-Hate Relationship with the Web

The protests in Turkey keep flaring up, in the street and on the Web. Police on Wednesday arrested activists because they had allegedly sent 'libelous' tweets. It's a sign of the government's contradictory approach to the Internet, which it purports to embrace.

They learned about the clashes going on in other cities via Facebook and Twitter and on foreign news websites -- not from Turkish television or newspapers, which they mistrust. CNN Türk broadcast a cooking program instead of reporting about the start of the unrest.

On Taksim Square, many demonstrators get out their smartphones and iPads as soon as they sense trouble -- a smell of tear gas, burning flares or a sudden increase in noise. They record what they see and instantly post it online. "Foreign Policy" magazine has published some of the videos of the protests, filmed with the Twitter app Vine, on its blog.

According to state news agency Anadolu, two dozen people were arrested on Wednesday for spreading "misleading and libelous information" on the Web. Shortly before that, Erdogan had railed against Twitter.

This news item appeared on the German website spiegel.de yesterday afternoon Europe time...and I thank Roy Stephens for sending it our way.

Syrian town of Qusair falls to Hezbollah in breakthrough for Assad

The Syrian border town of Qusair has fallen to Hezbollah forces after a three-week siege that pitched the powerful Lebanese Shia militia against several thousand Sunni rebels in what had been billed as a defining battle of the civil war.

Rebel groups released a statement early on Wednesday confirming that they had pulled out of the strategic town in the early hours. Rebel fighters are believed to have taken refuge in hamlets near Syria's third city, Homs, around 20 miles (30km) to the north.

Outgunned since the siege began, rebels inside the town said they had no option but to flee "in face of this huge arsenal and lack of supplies and the blatant intervention of Hezbollah".

This story was posted on the guardian.co.uk Internet site at 10:20 a.m. BST yesterday...and I thank Roy Stephens for his final offering in today's column.

China’s Economic Empire

THE combination of a strong, rising China and economic stagnation in Europe and America is making the West increasingly uncomfortable. While China is not taking over the world militarily, it seems to be steadily taking it over commercially. In just the past week, Chinese companies and investors have sought to buy two iconic Western companies, Smithfield Foods, the American pork producer, and Club Med, the French resort company.

Europeans and Americans tend to fret over Beijing’s assertiveness in the South China Sea, its territorial disputes with Japan, and cyber-attacks on Western firms, but all of this is much less important than a phenomenon that is less visible but more disturbing: the aggressive worldwide push of Chinese state capitalism.

By buying companies, exploiting natural resources, building infrastructure and giving loans all over the world, China is pursuing a soft but unstoppable form of economic domination. Beijing’s essentially unlimited financial resources allow the country to be a game-changing force in both the developed and developing world, one that threatens to obliterate the competitive edge of Western firms, kill jobs in Europe and America and blunt criticism of human rights abuses in China.

This op-ed piece appeared on The New York Times website on Saturday...and I thank Casey Research's own John Grandits for passing it around.

Three King World News Blogs

The first interview is with Bill Fleckenstein...and it's headlined "We Are Staring at Economic Collapse".  The second commentary is with John Hathaway.  It's entitled "Gold to Surge as Fed Pursues Radical New Policy".  And lastly is this second interview with Bill Fleckenstein.  It bears the headline "Gold Will Be Damn Explosive to the Upside".

China’s Gold Imports From Hong Kong Slump on Quota Backlog

China’s gold imports from Hong Kong slumped in April from a record as banks failed to get quotas fast enough to meet surging demand from mainland buyers keen to purchase bullion.

inland buyers purchased 126,135 kilograms, including scrap, compared with 223,519 kilograms in March, according to Hong Kong government data yesterday. Net imports, after deducting flows from China into Hong Kong, were 75,891 kilograms, from 130,038 kilograms a month earlier, according to Bloomberg calculations.

Quotas were in short supply after imports reached a record in March. Only qualified banks that secure quotas from the Chinese central bank can import gold to the mainland.

“Some qualified banks used up their gold import quota in the first three months and weren’t able to get the paperwork done fast enough to bring in bullion in April,” said Tian Rui, vice president of the precious metals division at INTL FCStone Trading Co. “We might see higher imports in May because demand surged after the rout.”

This Bloomberg news item, filed from Beijing early yesterday morning, is a real education...and a must read in my opinion.  I thank Manitoba reader Ulrike Marx for her first story in today's column.

Lawrence Williams: China’s gold demand – surmise and reality

How much can one believe in the various pronouncements on official gold purchases from China? We have reports of key party officials pointing out that the country’s gold holdings are vastly underweight in comparison to those of most of the major Western nations and that China should be building its reserve base accordingly (and many analysts believe it is indeed so doing). On the other hand, we have had a recent categorical statement from Yi Gang, Vice Governor of the People’s bank of China, that the nation’s official gold holdings remain at 1,054 tonnes – the stated level last time the country restated its gold reserve back in April 2009.

Well – the answer is that both positions could be technically correct in politician-speak -  it very much depends on interpretation of the way China treats its gold internally.

This commentary by Lawrence Williams was posted on the mineweb.com Internet site early yesterday morning BST...and it's the second news item in a row from Ulrike Marx.  It's worth reading if you have the time.

Adrian Ash: If India wants gold, it will buy gold!

"The [gold] market has quite rightly shrugged this off," says David Govett at brokers Marex Spectron of yesterday's decision by the Indian government to ban credit-paid imports of gold bullion. 

"If India wants gold, it will buy gold!"

"As a result of these measures," agrees the Business Standard in an editorial, "gold demand and import will come down...[but] smuggling of the precious metal is likely to go up."

Reuters says retail distributors in the world's largest gold-consuming nation are "braced for higher premiums" over and above the international benchmark price for gold, typically quoted for London settlement.

Speaking for the world's leading gold-mining companies,The Times of India quotes Aram Shishmanian, CEO of market development organization the World Gold Council..."But we are proposing to work with [the Reserve Bank of India]," he explains, "so that in the long term gold could be monetized as a financial asset" rather than as a physical consumer commodity dragging on India's trade balance.

This commentary by Adrian was posted on the mineweb.com Internet site early yesterday morning...and certainly falls into the must read category as well.  Included as part of this must read, is the link that states "gold could be monetized as a financial asset".  I thank Ulrike Marx for her third and final offering in today's column.

U.S. bullion coin demand still at 'unprecedented' levels: Mint

Demand for U.S. gold and silver bullion coins is still at "unprecedented" high levels almost two months after an historic sell-off in gold released years of pent-up demand from retail investors, the head of the U.S. Mint said on Wednesday.

"We are buying all the coin (blanks) they can make," Richard Peterson, acting director of the U.S. Mint, said in an interview referring to the Mint's suppliers.

This very short Reuters item was posted on their website early yesterday afternoon EDT...and my thanks go out to Washington state reader S.A.

David Morgan Interviews Nick Barisheff of Bullion Management Group

David: This is an interview conducted by David Morgan with Nick Barisheff. He’s recently written a book called $10,000.00 Gold: Why Gold’s Inevitable Rise is the Investor’s Safe Haven. Nick, I haven’t re-read the whole book. I read the preliminary, but it’s an excellent job of characterizing why gold is so important. Before we start on that, what prompted you to switch from the real estate industry to precious metals? 

Nick: Well I guess that would take us back to 1997. I’d just finished a project and was looking at what the next trend might be. I concluded that it would be precious metals, the energy sector, and water. The thing that attracted me to precious metals in particular was that in Canada, there was no method of holding physical bullion in registered retirement accounts in a way that didn’t compromise the fundamental attributes of bullion.

So that’s what I set out to do. I thought precious metals were going to rise, and I was going create a structure that would accommodate Canadian RRSP investors. At the time there was about $400 billion in retail mutual funds, and somewhere in the back of my mind I had this idea that everybody should have 10 percent in bullion. So I thought there could be great potential to create a bullion fund.

This excellent interview was posted on the goldseek.com Internet site yesterday...and I thank West Virginia reader Elliot Simon for pointing it out.

Paul Craig Roberts on gold suppression, the dollar's decline, and 'gangster capitalism'

GoldMoney's Andy Duncan interviewed former U.S. Assistant Treasury Secretary Paul Craig Roberts about the Federal Reserve's suppression of gold prices, the decline of the U.S. dollar as the world reserve currency, and the "gangster capitalism" that has resulted from deregulation of the financial markets and failure to enforce anti-trust law.

The interview, conducted on June 3rd, is 40 minutes long and is posted at GoldMoney's Internet site. I haven't had the time to watch it yet, but I would guess it's worth watching.  I found this interview in a GATA release yesterday.

Dr. Doom Marc Faber: Don't Bet on New Market Highs

The market is likely to head higher in the near term, but new highs can't be trusted, said Marc Faber, the contrarian investor and publisher of the Gloom, Boom & Doom Report.

In an interview Tuesday, he also told CNBC's "Squawk on the Street "there's "no exit" from the Federal Reserve's bond-buying program.

"Very near term, we are a bit oversold and we may rally back to around 1,660-1,670 on the S&P," he said. "On the backs of Intel,Microsoft and IBM we can make a new high. But the new high would not be confirmed by the majority of shares. I think the market is actually quite vulnerable."

This 9:14 minute video clip was posted on the CNBC website just before lunch on the U.S. East Coast yesterday...and it's definitely worth watching.  Our first story of the day is courtesy of U.A.E. reader Laurent-Patrick Gally.

JPMorgan’s Alabama Debacle Set to Cost Bank $1.5 Billion

JPMorgan Chase & Co. may see as much as $1.6 billion go down an Alabama sewer.

The biggest U.S. bank by assets agreed to forgive $842 million of debt owed to it by Jefferson County, Alabama, where it took the lead in arranging risky securities deals that pushed the county into the largest U.S. municipal bankruptcy.

That comes on top of a $722 million settlement in 2009 with the U.S. Securities and Exchange Commission tied to Jefferson County deals.

Elizabeth C. Seymour, a bank spokeswoman, had no comment on the accord announced yesterday. If accepted by the court, it would cap a years-long saga in Alabama’s largest county, where JPMorgan once reaped substantial fees arranging deals -- tainted by corruption -- that turned costly during the credit crisis.

This Bloomberg story was posted on their website late last night MDT...and it's the second contribution in a row from Laurent-Patrick Gally.

Global shock as manufacturing contracts in U.S. and China

The closely-watched ISM index of US factories tumbled through the “boom-bust line” of 50 to 49, far below expectations. It is the lowest since the depths of the crisis in mid-2009 and a clear sign that US budget cuts are starting to squeeze the economy. New orders plunged 3.5 to 48.8 on weak foreign demand and reduced federal contracts.

The news came hours after HSBC said its index for China also fell below 50, a major inflexion point for the world’s industrial workshop.

“This is not a good moment for the world economy,” said David Bloom, currency chief at HSBC. “The manufacturing indices came in weaker than expected in China, Korea, India and Russia, and then we got America’s ISM.

This Ambrose-Evans Pritchard offering was posted on the telegraph.co.uk Internet site early on Monday evening...and it's definitely worth reading.  It's today's first contribution from Roy Stephens.

You thought central bank money printing was at an end? Don’t bet on it

Is the great bond market bubble finally over? For the following, very simple, reason, I’m not yet convinced.

The world economy is still in a very deep hole, with major structural imbalances still largely unaddressed. Any attempt to apply the brakes would only choke off what remains a very fragile and unconvincing recovery, tipping some major economies back into recession.

This in turn means that central banks will struggle to remove monetary accommodation in the way markets are starting to anticipate. We’ve become hooked on easy money, and I very much doubt the world economy is yet ready for the cold turkey of its withdrawal.

This story followed close on the heels of the previous story from The Telegraph...and it's worth reading as well.  It's the second story in a row from Roy Stephens.

IMF's Lagarde: U.S. Cutting Spending Too Much, Too Fast

The International Monetary Fund chief criticized the U.S. on Tuesday for cutting back government spending too much too fast, saying it was taking a toll on growth in one of the world's main economic engines.

Christine Lagarde also said upbeat financial markets are out of whack with a sluggish global economy that is showing signs of slowing even further.

In an overview of trouble spots around the world, Lagarde said the U.S. had come a long way in the five years since it triggered the global economic crisis with financial excesses.

She particularly criticized across-the-board federal spending cuts imposed in March known as sequestration.

This story was posted on the moneynews.com Internet site early yesterday afternoon EDT...and it's courtesy of Elliot Simon.

Solar Strife: E.U. Fires First Shot in Trade War with China

The European Commission on Tuesday announced it was imposing tariffs on Chinese solar panels in response to "price dumping." China has previously warned it would retaliate. The escalating trade war can only have one loser: Germany.

In Chinese industry, the officials of the European Commission have a reputation similar to that enjoyed by tax investigators among affluent tax evaders. They are hated, but at the same time they are received with the greatest of civility.

Which is why more than 100 Chinese exporters of solar panels in recent months have dutifully filled out pages of forms from the European Commission, which accuses them of trying to drive the competition into bankruptcy by undercutting their prices. When the European inspectors arrived, Chinese companies even gave them access to their confidential price calculations for the domestic and international market.

This very interesting must read story was posted on the German website spiegel.de yesterday afternoon Europe time...and it's another offering from Roy Stephens.

Protests in Turkey: 'Taksim Square Belongs to Us'

The protests in Turkey have brought together people from all walks of life, including engineers, teachers, construction workers, leftists and even some former supporters of Prime Minister Erdogan. They are demanding changes in a country that is more divided than ever before.

An engineer, who stumbles through the clouds of pepper spray. A doctor to be, who brings medicine and lemon juice, which is supposed to help limit the effects of tear gas. A teacher, who is filming everything with her camcorder. A foreign exchange student, who is there to experience the revolutionary atmosphere. A left-wing activist, who has been camping for days on Taksim Square in the heart of Istanbul, defending it against the police.

All kinds of people are demonstrating against the government of Prime Minister Recep Tayyip Erdogan. Monday night marked just the latest gathering in Turkey's biggest city, part of the wave of protests that has spread across the country after a handful of people in Istanbul came out to prevent the destruction of a small park in the city. It has become a revolt. Hundreds, if not thousands, in Taksim Square have refused to go home and continue to brave the tear gas wafting through the streets. Though the situation has calmed down since the weekend, protesters remain behind their makeshift barricades, made of police barriers and whatever else they could find.

This news item appeared on the spiegel.de Internet site during the lunch hour in Europe yesterday...and once again I thank Roy Stephens for another contribution.

The Stunning Image Of 'The Lady In Red' Will Endure Even After The Turkey Protests End

Turmoil in Turkey has entered its fifth straight day as protests over the destruction of trees in a public park morphed into an indictment of Prime Minister Recep Tayyip Erdogan's government.

And the "lady in red" — a woman who was sprayed directly in the face with teargas by a policeman on May 28 in Gezi Park of Taksim Square — has become the symbol of the dissidents.

The description of the photo by Reuters nails it..."In her red cotton summer dress, necklace and white bag slung over her shoulder, she might have been floating across the lawn at a garden party; but before her crouches a masked policeman firing teargas spray that sends her long hair billowing upwards."

The image of the "woman in red" has become the leitmotif for female protesters during days of violent anti-government demonstrations in Istanbul.

This must read story was posted on the businessinsider.com Internet site mid-morning EDT yesterday...and the photos alone are worth the trip.  It's also courtesy of Roy Stephens.

Smog Plus Storm Send Beijing into Darkness at Noon

It appears that thanks to a combination of stormy weather and the Chinese capital's notorious smog problem, Beijing at 12pm was looking a little more like Beijing at 12am.

A Twitter account run by the US Embassy in Beijing reported that China's air quality was at "unhealthy" levels at noon — actually quite good for the city. And while today's phenomenon seems to be a rare combination of elements, over the past year there has been growing concern about the level of air pollution in China — at points recorded air pollution levels have reached 40 times the standard set by the World Health Organization.

This short photo essay was posted on the businessinsider.com Internet site mid-morning yesterday EDT as well...and the pictures are incredible.  I thank Roy Stephens once again.

Three King World News Blogs

The first commentary is by Richard Russell...and it's headlined "Silver, Gold and a Coming Stock Market Crash".  The second interview is with Rick Rule...and it's entitled "A Second Way Investors Can Make a Fortune in These Markets".  And lastly is this interview with Jean-Marie Eveillard...and it's headlined "There is Now a Huge Risk of a Collapse in Major Countries".

India's Gold bill for April, May hit $15 billion

India is likely to take more steps to curb the rising imports of gold which may include a ban on sale of gold coins by banks.

India's efforts to keep it’s people away from gold seems to have going nowhere as the country consumed more gold in May than in April when prices crashed.

The world's largest gold consumer, India imported around 162 tonnes of gold in May, from April's 142.5 tonnes. For the two months, cost of gold buying hits over $15 billion.

This must read article appeared on the bullionstreet.com Internet site during the New Delhi lunch hour yesterday...and it's courtesy of Manitoba reader Ulrike Marx.

Reserve Bank of India nears panic in its war against gold

In what traders termed a near-panic reaction to the sliding Indian rupee, the Reserve Bank of India banned import of gold by domestic consumers through bank credit and has made overseas purchase of the precious metal a cash-and-carry business.

The move will nearly cripple the retail jewellery trade and probably lead to higher smuggling into the country, putting the clock back by nearly two decades when socialistic governments restricted gold imports. A day after P. Chidambaram said that "necessarily we will have to check gold imports," the central bank barred gold importers using letters of credit from banks for gold imports.

"All letters of credit to be opened by nominated banks, agencies for import of gold under all categories will be only on 100 percent cash margin basis," the RBI said. "Further, all imports of gold will necessarily have to be on documents against payment basis. Accordingly, gold imports on documents against acceptance basis will not be permitted."

This absolute must read story was posted on the Economic Times of India website in the wee hours of their Wednesday morning...and I found this late-breaking news item in a GATA release just before midnight last night.

Major Insider: Time to Buy Gold; The Chinese Want to Make the Yuan Gold Backed

I have mentioned Philippa Malmgren before.

Philippa Malmgren is an insider's insider. She was Special Assistant to the President for Economic Policy on the National Economic Council. She was also a member of the President's Working Group on Financial Markets, aka, the Plunge Protection Team. Her client list includes every elite corporate firm in the world. You don't get much more insider than this.

She is out with a new comment on gold. In it she seems to hint that there might have been a conspiracy to push gold down (Remember this is coming from a major insider, who travels in the circles she is talking about).

This is definitely a must read...as is the link to Dr. Malmgren's commentary at the citywire.co.uk Internet site that was posted on that website last Thursday.  I thank Casey Research's own Jeff Clark for bringing this story to my attention...and now to yours.

China becomes lead financier to new Australian mines

China is backing up its status as the world's biggest consumer of metals by becoming the lead financier to new Australian mines, with more than US$1.5 billion (AU$1.55 billion) now being committed to projects Beijing wants to see developed to ensure a diverse and long-term supply of metals vital to that nation's ongoing industrialisation and urbanisation.

While traditional financiers for Australian projects in Europe and the US have retreated from the sector and equity markets have been closed off as a source of ready funding, China's network of state-controlled development banks, mining companies, and engineering and construction groups is taking up the slack.

ASX-listed Rex Minerals yesterday became the latest beneficiary, with the group signing a financing and engineering/construction memo of understanding under which Chinese interests will facilitate $US550 million in debt funding for the likely $US800 million cost of developing its Hillside copper project on South Australia's Yorke Peninsula.

This very interesting article appeared on theaustralian.com.au Internet site early on their Wednesday...and I found it embedded in a GATA release.

Gold still gleams for China's acquisitive miners: WSJ

Chinese companies are snapping up overseas gold mines in their quest to become international giants like Canada's Barrick Gold Corp., even as prices for the metal hit a two-year low.

Driven by strong domestic demand for gold, Chinese miners are taking advantage of depressed company valuations to boost gold reserves by acquiring mines. The challenge they face is that most of the mines that are large enough to pique their interest are either not for sale, already developed with dwindling reserves, or in politically unstable countries.

"New significant mines are always harder to find and more expensive or in a more difficult political environment. If you are a latecomer, you are unlikely to ever become as big as an earlier participant," said Viral Gathani, head of energy, natural resources, and infrastructure investment banking at CIMB Securities Ltd. in Hong Kong.

This Wall Street Journal article from Monday is posted in the clear in this GATA release.

Sprott's Thoughts...Silver Equities too cheap: Maria Smirnova

Maria is skeptical that this year’s decline is a natural movement in the market. US regulators are reportedly scrutinizing whether prices are being manipulated in the world’s largest gold market. The Commodity Futures Trading Commission is examining the setting of prices in London, in which a handful of banks meet twice daily and set the spot price for a troy ounce of physical gold.

“You should be suspicious of sudden market moves. Three large banks have already been fined a total of $2.5 billion over manipulation of the London interbank offered rate, or Libor, and many others are still under investigation. The events of the gold and silver smack-down could very possibly be the result of manipulation. The amount traded over 2 days was obscene, and doesn’t usually occur in a normal market. The magnitude of the trade was simply too massive relative to that time period.”

This commentary was posted on the sprottgroup.com Internet site yesterday...and it's worth skimming.

Addison Wiggin: The "Zero Hour" Scenario

"The Daily Reckoning's Addison Wiggin shows again that he understands Western central banking's racket in the gold market." - Chris Powell, GATA

It’s a Sunday night. October 2013. Parents are making sure the kids’ homework is done. Football fans are settling in for the night’s NFL matchup. Reigning champs, Baltimore, are about to lose. And all hell is breaking loose in the precious metals markets.

Moments before electronic trading opened at 6 p.m. EDT, Commodity Exchange Inc. — the Comex — announced it would settle a large gold contract in cash and not gold. To be blunt about it, the Comex has defaulted on its contract. Suddenly, everyone else with a gold contract — or a silver contract — started to wonder if they’d be next to get stiffed.

Gold, which ended that autumn week at $1,715 an ounce, starts gyrating wildly… but mostly up. By Monday morning, it’s up past $1,800. But good luck trying to get that price — or anything near it — at a coin shop or online dealer. Under normal circumstances, a $1,800 spot gold price would mean U.S. Gold Eagles around $1,890 — a 5% premium.

But on this day, buyers — desperate to get their hands on actual, physical metal because trust in the system is breaking down — have driven the price far above $2,000.

This is “zero hour” — the day you can mark on a calendar when the price of real metal breaks away forever from the quoted price on CNBC’s ticker. It’s the day you’ll be grateful you hold real metal and not a proxy like the GLD exchange-traded fund.

Well, Addison has figured out how this price management scheme will most likely end...and that's my theory as well. Some Sunday night it will begin...whether it's October, or some other month...and it will all be over by the Comex close on Monday.  Pick a very large number for gold...and a rather large 3-digit silver price to go with it.  This amazing must read was posted on the dailyreckoning.com Internet site yesterday...and I thank Roy Stephens for his last offering in today's column.