Friday, December 5, 2008
FROM JSMINESET.COM Hourly Action In Gold From Trader Dan Posted: Dec 05 2008 By: Dan Norcini Dear CIGAs, Paper gold at the phony Comex continues its disappearing act as more and more longs throw in the towel and close things out for the year. I should note here that volume in the Comex is absolutely horrendous dropping under 100,000 per day over the last few days. Toss in a collapse in open interest and it is pretty easy to see that what we are witnessing is a destruction of liquidity which allows any relatively larger-sized order to move price pretty much wherever the “orderee” wishes things to go. There is simply no one to take the other side of the trade with the result that large air pockets are forming in this market into which prices may drop or, in the event that prices rise, may shoot sharply higher. The same thing is happening in every single commodity complex out there. There are some fresh short sellers but these are minor compared to the selling originating from speculative longs bailing out in the face of disappointing price action. The fed’s crony pals cap the price on any rise and then stand back and cover those shorts as all the lemmings dutifully abandon ship. Presto – an ATM for the bullion banks courtesy of the weak-handed longs who still try to play the paper game against these insiders. Technically, you could not get a more classic definition of a washout which is exhausting itself as both shrinking volume and collapsing open interest signal that this is NOT the beginning of a bear trend but rather a technical washout that is winding down. I especially like the fact that volume is so anemic – it indicates no particular enthusiasm for the downside but more of a general disgust type of trade. Every single technical analysis book that I have ever read over the years will tell the shorts to be very careful selling a market in which volume and open interest are falling off – you simply never know when the last long who is going to run has run – when they do, that is it and the shorts then lose since there is simply no one left to sell the market to. For now they are sitting pretty but I suspect many buyers are waiting in the wings and should this market move down to near the $730- $720 level in February, these will emerge and make their presence felt quite strongly. The risk/reward no longer favors the shorts at these levels. What do they have, maybe $60 on the downside at the absolute best? Still, all things considered, even paper gold is holding very well compared to the carnage in the rest of the commodity markets. For instance, crude topped out near $150/ barrel. Today is dropped below $41. That is nearly a 73% price collapse. December corn hit $8.00 bushel this past summer. Today it broke below $3.00 – the first time in two years it has been below the $3.00 level. That is a price drop of 62%. Platinum peaked at over $2200/ounce earlier this year. Today it was trading at $790 – a drop of a “mere” 64%. Copper is 67% off its peak. Silver is down 56% off its best levels seen this year. Yet gold is only down 27% off its peak price. Even with all the paper selling at the Comex, gold has withstood the orgy of redemption related selling pretty doggone well. And we know that demand for the real deal, the actual yellow metal is phenomenal, paper games at the Comex notwithstanding. Support near $770 gave way in New York this morning (gee- what a surprise) setting up a move down to test $740 and then that level that I mentioned above, $730-$720. Resistance is now $770 followed by $790 and then $800. Unfortunately the 10 day moving average in gold has turned down so the short term posture of the market is not particularly friendly. The longer term 40, 50 and 100 day moving averages are all still trending higher however. The late session comeback from off the worst levels of the day is a bit friendly although it is probably pre-weekend short covering by profitable shorts. On the delivery front – another 274 were taken yesterday bringing this month’s total to a very respectable 12,164 or 1.2 million ounces. Comex is still reporting registered totals at 2.9 million so about 41% of that gold has been taken. The question remains – are these buyers willing to take it OUT of the warehouses and remove it completely? There still remains time for even more deliveries to be taken. Interestingly enough for the first time in some while, Bank of Nova Scotia was a net seller. They issued 263 against stopping of 51. The biggest stopper was once again HSBC. Some of you know that HSBC is one of the authorized warehouses for Comex so whether they are taking this gold in to meet outgoing deliveries is still unclear at this point. The trading arm is in a sense separate from the warehouse folks so we will not know unless we can see the actual warehouse stocks report showing the gold moving out of HSBC’s warehouses at some point. The mining shares continue to struggle. At least they have managed to bounce a bit off the session lows for now – if they could manage to stay above 205 into the close it would be a psychological victory.. After managing to trade above the 50 day moving average, a significant bullish technical feat, both the HUI and the XAU have broken down below every single major moving average in the last week. The longer term moving averages are still moving lower in both indices but the 10 and 20 day are trending upwards which was a friendly signal. Today’s break below both of those shorter term moving averages means that the bulls choked and surrendered their advantage to the shorts. The longs must stand their ground and do it quickly. All I can say is to repeat that so much hedge fund money is leaving the markets that nothing is safe until those idiots are finally run out of business. Good riddance to the sorry lot of them. It looks as if OPEC is content to allow crude oil prices to decline below the $40 level – a level which I thought they would try to defend. So far, not a peep out of them which is quite remarkable. Given the horrendous payrolls number if they do not at least attempt to cut back production so as to mop up some of the extra supply on the market, $40 will come and go and they will then be debating about whether or not to try to keep the price above $30. By the way, you might as well kiss the noisy clamor for alternative energy markets such as ethanol and other “green” technologies bye-bye for a while. As gasoline prices drop to close to $1.00 gallon, one thing you will not hear is the voice of politicians screaming for us to burn our food supplies in the gas tank. The bond bubble continues with yet another high in the long bond. The frontrunning by firms ahead of the Fed’s intentions to buy Treasuries to keep interest rates low, along with the usual “insane haven” play, has resulted in the bubble being blown even larger. I am sure that the clerks in the pit and the guys manning the digital decks are ready to quit this business and permanently retire after this week. The yields on Treasuries of shorter dated maturities are comical. I suggested last week that investors buy brass, gunpowder and reloading equipment. This week add to that some Wii’s and the game cartridges that go with them. You can sell those on Ebay and make more money than the stinking ridiculous bottomless abyss of a Treasury will ever pay you. Better yet, let’s hire some lobbyists to represent us and head to Washington and demand a bailout of $200,000 per family. After all, if we the good ol’ consumer, won’t buy, what’s the point of sending all this money to the banks, the auto industry and only heaven knows who else they plan on donating to. Just imagine all the pent up demand that would be unleashed. Why we are at all, just scrap the entire tax system and declare a year tax holiday. That would surely get things going. After all the government doesn’t need any damn revenue anyway. They can just keep printing more IOU’s and called them a “treasury”.
The Manipulation of Gold Prices by: James Conrad December 04, 2008 http://seekingalpha.com/article/109210-the-manipulation-of-gold-prices There is no other leveraged commodity market where short sellers increase their positions, materially, as the price rises, and increase them even more when prices are exploding, except gold and silver...
Thursday, December 4, 2008
The Daily Reckoning PRESENTS: The price of gold is seeing a modest rally...and Ed Bugos wonders if it is just a ‘retracement rally’ that will give way to new lows, or if we’ve seen the bottom for the yellow metal, and this is just the first of many rallies to come. Read on... GOLD LOOKS BULLISH AS DUST SETTLES by Ed Bugos The late November rally in gold prices wasn’t quite as spectacular as mid-September’s gain, but it was still impressive. There was good follow-through too, though the momentum softened as bulls knocked on resistance near $850. The rally was a no-brainer. There is a strong line of support at $700, which was resistance during 2006 and the first half of 2007. Moreover, the market was, and is, oversold. The catalyst was news that the U.S. government had to bail out Citigroup, the world’s largest bank by revenues. The event has given way to new concerns about the economy, which weighed on stocks and gold this week, or at least provided an excuse to take some profits in the latter. The big question now is whether it was just a retracement rally that ultimately gives way to new lows or whether we have seen the bottom in gold, with this rally being only the first of many to come. I don’t think the chart can answer that question alone. Technically, the structure of the market is healthy now, and as far as the fundamentals go, gold should not remain under $1,000 for very long. Indeed, I sense the market is building up for a very bullish move. Allow me to touch on some of the bullish factors coming into play. “Notwithstanding the many developments on the bailout front during the past six weeks, The New York Times , like other media outlets, continues to quote Wall Street insiders who report” [that] “‘You have a market that is frozen.’ What planet do these guys live on? It certainly is not the same one to which the Federal Reserve’s data apply. I’ve been singing this song for many weeks, but I’m going to keep singing it until somebody in the news media wakes up and realizes that these ‘frozen credit market’ tales are pure hooey. Look at the data, for crissake.” – Robert Higgs, author of Crisis and Leviathan , in a recent essay on the bailout programs The fundamentals are significantly bullish for gold. I’d like to say they are bearish for the dollar, but in truth, they are increasingly bearish for all paper currencies. Outside of the Bank of Japan, everyone is inflating madly. In the G-7, narrow money (M1) is growing at 7-10% on a year-over-year basis in the U.S., Canada, the U.K. and Australia – more in developing countries like China. And this rate is picking up now. October’s data are not in yet for the ECB. Its balance sheet increased by some 400 billion euros during the month, which is the first big change since the second quarter, and will probably reflect in M1. The Bank of Japan started inflating M1 again in September too, after holding it steady for most of the year. The broader monetary aggregates (i.e., those determined by the banking system at large) are growing briskly everywhere but in the U.S. and Japan, though even the latter are still growing. Broad money in the U.S. is growing between 5-10%, depending on whether you rely on TMS or MZM or higher, if you like M3 (I don’t). The U.S. data are good through October. Up till the end of September, as far as we are updated, the year-over-year growth rate in broad money approached 20% in Australia, its highest rate in almost 20 years. In the U.K., the broader monetary aggregates are growing at close to 14% on a year-over-year basis, which is its highest growth in almost a decade. These growth rates are almost as bad as China’s, which is approaching 20% year over year too, again. Given these numbers, it is no surprise to me whatsoever that the yen is the strongest currency, followed by the U.S. dollar, or that the Aussie and the pound are taking the greatest beatings, along with all the other riskier currencies. The actions governments are taking now are bearish for stocks and bullish for inflation. But they are not just bullish for inflation – they are remarkably bullish. I don’t mean to sound happy about it. It’s just an observation that the market has yet to come to terms with. Since September, the Fed has expanded its balance sheet a total of $1.3 trillion. Of that total, it has created about $600 billion in reserves out of thin air. Most of that is not counted in money supply, because it excludes deposits held by depository institutions. Total money supply is about $6 trillion, if you rely on the Austrian School definition (I do). It has, nevertheless, translated into growth of about $100-200 billion in new money created by the banking system since September already. Deflation is a no-show so far, and I don’t think it will arrive at all. I think history will see this as just another scare. The Federal Reserve just announced two new programs that commit it to another $800 billion, and that is even before President-elect Obama puts his stimulus package together. Reuters cited Wachovia’s chief economist: “Some, however, are worried the mounting costs of the measures, which have the potential to reach several trillion dollars, could eventually fuel a troubling inflation. “‘It may mean (a) longer-run issue with inflation and inflation concerns,’ said John Silvia, chief economist at Wachovia Securities in Charlotte, N.C. ‘It may be too much of a good thing is a bad thing.’” Ya think? Even more inflationary, in my opinion, is the fact that the talking heads think the Fed’s latest facilities are simply not enough. They are complaining the programs do not include direct purchases of credit card debt and mortgages in the secondary market and that the Fed isn’t going to buy mortgages with maturities of more than one year. Not long ago, the Fed never bought anything but Treasury notes. Gold bulls are going to attempt to raid Comex’s vaults by forcing delivery on their December futures contracts (Dec. 19). Who can tell how that will go? I can’t. But it’ll be interesting to watch. Facts: The open interest in futures contracts on the Comex has fallen to its lowest level since summer 2005, breaking a general uptrend in place since 2001. From a contrarian standpoint, the short-term bottoms in these data tend to favor the buyers over the sellers. However, the statistic went into orbit during the last half of 2007 – it broke away from the upper channel on the charts, creating a bubble in appearance. The current extremity could simply be a symmetrical reaction to that extreme. Nevertheless, this is a bearish fact, technically speaking, if it represents a lasting new trend. It is tempting to suggest that the threat of a raid in futures contracts is causing a short squeeze. It is true that the commercials are liquidating their short positions promptly. But the funds are increasing their short bets, and the liquidation of longs is such that the net short ratio has hardly budged off its mid-September low – which, incidentally, is a level that has coincided with strategic buying points at seven other junctures since the bull cycle began in 2001. However, the record of this statistic in gold is unique in that during bear markets, the commercials tend to be net long (wrong) most of the time. So the fact that they are covering their short interests on net does not necessarily presage a rally if a bear market has set in. A bear market would mean that gold prices could fall as far back as US$500. Fundamentally, the conditions just don’t look ripe for a bear. I don’t believe the COTs (Commitment of Traders report published by CFTC) have any real predictive value. They tell us only whether the market is too much extended one way or another; they don’t tell us how long those conditions will last. Right now, the structure of the market is healthy. The commercials are covering their shorts, the funds are getting short and the numbers basically favor the bulls. The contraction in open interest worries me a little, but it could be explained in terms of a collapse in spread trades linked to various index products. In its most recent report on gold demand, the World Gold Council said as much in trying to explain the drop in the gold price in the context of soaring physical demand. In its third-quarter report on gold demand, the WGC noted growth in both jewelry and investment demand across the spectrum relative to both the last quarter and the year-ago quarter. I don’t want to go into a critique of the method here, except to point out that it chronically understates investment demand and overstates jewelry demand. The inclusion of ETFs all but proves the point. In just one year, investment demand has grown in importance from under 15% to over 30% of total gold demand, causing the deficit (supply shortfall) to grow nearly tenfold. The WGC interprets this deficit as supply coming from speculative sources, like futures trading or changes in inventories at the various exchanges – like at Comex. Thus, it calls it “inferred investment.” Formerly, it called this the “balance.” But as it grew, the WGC decided it meant something. What is causing it to grow, aside from growing demand in general, is that while the WGC is “identifying” new kinds of demand, it has not kept up with the various sources of supply. Gold bugs have argued for years that the supply of gold is not limited to mine production, officialdom or scrap...that it is not like other consumable commodities. It is more useful to assume that most of the gold ever produced is held as a reserve, or store, aboveground. And if this is true, then investment demand must be much larger than the WGC calculates, or the price would, frankly, never go up. If the WGC is smart enough to include producer hedging (or dehedging) in the equation, it should also include a measure of demand that expresses itself through all the exchanges and bring itself up to speed on all the sources that supply the market. It assumes that jewelry demand dominates the market, which is incorrect, but even if it were, it still has the wrong idea. Jewelry demand may be price sensitive in the short term, yet it has grown every year, at successively higher prices, since the bull market began. Despite my objections, however, I am in total agreement with the council’s explanation why gold prices have fallen despite the evidence of soaring gold demand: “Notably, the selling captured by the [inferred] investment category was mainly by investors with a short-term focus. It largely reflects the fact that gold was caught in the downdraft of other commodities and other assets – it does not reflect a questioning of gold’s value or role as a safe haven. The strong buying in the ETF and bar and coin markets during the quarter, which reflects investors with largely a longer-term focus, suggests that investor belief in gold’s role as a safe haven and store of value is stronger than ever.” No wonder the commercials are covering. The establishment is getting hot for gold. JP Morgan’s gold analysts “urged” investors to stock up on gold this month, citing counterparty risk and tight supplies. Citigroup’s foreign exchange group also put out a bullish tout. Well, that’s an understatement, actually. “[Gold] continues to look like a bull market to us. We continue to believe that a move of similar percentage to that seen in the 1976-1980 bull market can be seen, which would suggest a price north of $2,000,” Citigroup’s FX group said last week. What I found particularly intriguing, besides the timing of these calls, was that they both discounted the dollar. That is, they noted, as I have in the past, that the foreign exchange value of the dollar may not be important at this stage. Morgan said, “It is not an absolute given that a rally in gold means a falling U.S. dollar,” while Citigroup pointed out, as I also have, examples of just such a situation during the 1970s. Anyway, it’s not a sure thing yet, and it all makes great fodder for the bull market in gold. Good Trading, Ed Bugos for The Daily Reckoning Editor’s Note: The above was taken from the latest issue of Gold & Options Trader
Thursday, December 4, 2008 Welfare-State Dependency in America by Jacob G. Hornberger How pathetic to see the executives of American automobile companies on their knees before the members of Congress, begging them to use taxpayer monies to bail them out of their financial difficulties. What a fine example of what the welfare state has done to Americans. Self-reliance? Alas, a quaint and obsolete term that has no place in the modern-day welfare-state society. What now characterizes so many Americans is dependency on the government. Over a period of many decades, the political class has made Americans dependent on the state for their retirement, healthcare, unemployment pay, education, food, subsidies, loans, and much, much more. The entire package of goodies that government provides to the citizenry could easily be described as welfare-state heroin. Even more damaging than the dependency itself is the mindset of dependency that the welfare state has inculcated in the modern-day American. So many people honestly believe that they would never be able to survive, prosper, and get educated without the state. One sees this phenomenon in all age groups. Among the elderly, the mindset is: “I could never survive without Social Security. I am totally dependent on the government. I would starve to death if the state didn’t send me my Social Security check every month.” We see it also within the younger crowd. “My children would never get educated if the state didn’t provide schooling for them. And how would the poor ever get educated if the government didn’t provide it?” Modern-day dependents on government have convinced themselves that the absence of a welfare state means the absence of government entirely. Thus, oftentimes they are shocked to learn that our American ancestors lived without a welfare state for more than 125 years and yet still had federal, state, and local governments. That’s right: no welfare, Social Security, Medicare, Medicaid, subsidies, public (i.e., government) schooling, income taxation, and the like. Americans were once free to keep everything they earned and to decide for themselves what to do with it. Despite all the maligning of 19th-century Americans that takes place in American schools and colleges (e.g., “They obviously hated their children because they sent them to work in dismal factories for long hours.”), the fact is that when Americans were free to keep everything they earned and to decide what to do with it, the result was the most prosperous and charitable society in history. The reason for this was that people were saving large portions of their income, thereby producing the capital that is necessary to raise standards of living, and voluntarily donating other portions of their income to worthy causes. The savings built the businesses and industries that provided the jobs, and the charity built the churches, museums, and opera houses. Among the chief characteristics of our American ancestors were self-reliance and a can-do spirit. The thought of looking to government to help them solve their problems would not even have occurred to most of them. Ironically, in the latter part of the 19th century and early 20th century, thousands of immigrants were flooding American shores, fleeing the socialism of Europe in order to come to a land where it was “root hog or die” — a land where people were on their own, where government lacked the power and the means to provide sustenance to them or bail them out of their difficulties. This is what our American ancestors defined as freedom. It was a concept of freedom that was totally contrary to the dependency-on-government concept that today’s Americans define as freedom. Our ancestors rejected socialistic measure not just because they favored a free, self-reliant, and voluntary society. They also rejected it on moral grounds. In a free society, consumers decide which businesses are going to stay in business and which ones are not. U.S. automobile companies have the right to ask people to buy their cars. They have the right to issue bonds asking people to loan them money. They have the right to raise money through the issuance of stock. The automobile companies, however, have no moral right to force people to buy their products, fund their loans, and give them money. For that matter, no one else has that right either. Yet, as they get down on their knees before the members of Congress, that’s precisely what U.S. automobile executives are doing. How shameful. How immoral. Is it possible to restore a free society to our land, given the deep sense of dependency that the welfare state has produced within the citizenry? Absolutely. All it takes is faith in ourselves, in others, in freedom, and in God, and an unwavering commitment to restore moral principles to our land. Jacob Hornberger is founder and president of The Future of Freedom Foundation.
Trader Dan Comments On The Dire Condition Of The International Monetary System Posted: Dec 04 2008 By: Dan Norcini Dear CIGAs, Linked below are a few charts showing the custodial account treasury holdings and agency holdings. If there is any wonder why the bond market is experiencing a once-in-a-generation bubble, just look at the Treasury Holdings chart. It is going vertical. Meanwhile, the chart showing the Agency debt holdings such as Fannie Mae and Freddie Mac continues its “fall off a cliff” imitation. Foreign Central Banks are dropping Fannie and Freddie debt like a bad habit and rushing into US Treasuries. I keep wondering just who it is that is supposed to provide the capital for Fannie and Freddie to function! The feds supposedly dumped $200 billion into them if I recall correctly but foreign Central Banks have already unloaded $120 billion. At the rate the FCB’s are ditching the debt, it looks like it is a wash and we are back to where Fannie and Freddie were in July. I read these charts as an indicator as to just how dire is the condition of the world’s current monetary system. If any of these foreign Central Banks balks at buying US Treasuries or even whisper about selling them, Katie bar the door on the US Dollar. Still, I think it is just a matter of time before the US has to devalue the dollar if it ever hopes to make good on these ever-increasing obligations. It reminds me of one of those old biology films we used to watch back in school when the virus would divide and just keep on dividing and dividing and dividing. Maybe we could rename US Treasury bonds to US Treasury viruses - They just keep on multiplying until they suck the life out of their host. Also, note the yield charts on the 3 month and the 10 year. The three month is effectively at zero. I have not shown them but the one month is at 0.01% and the one year is at 0.61%. Talk about zero bound… Quantitative Easing, here we come with a vengeance. They have no other choice. Trader Dan
Wednesday, December 3, 2008
Financial Crisis Only Squandering Our Future Posted: December 3 2008 http://theinternationalforecaster.com/International_Forecaster_Weekly/Financial_Crisis_Only_Squandering_Our_Future Big rise in monetary base, trillions in loans all over the world that will never be repaid, many nations very exposed in monetization crisis, all currencies to fall against gold, writers running naked, larger corporate failures to come, American condition to worsen, resentment already smoldering around the world, taxpayer money still being squandered on bankrupt Wall Street...
"The individual has always had to struggle to keep from being overwhelmed by the tribe. To be your own man is hard business. If you try it, you will be lonely often, and sometimes frightened. But no price is too high to pay for the privilege of owning yourself.": Rudyard Kipling - (1865-1936)
Breakdown of the Global Monetary System by Summer 2009 By GEAB December 01, 2008 "GEAB" -- "November 17, 2008 http://www.informationclearinghouse.info/article21364.htm Go to the GEAB WEBSITE by clickinng on the "GEAB" next to the date in the infoclearinghouse copy of the article. It is a very good website. Be sure to scan it thoroughly. YOU WILL LEARN LOTS.
The Cost of Hegemony is Beyond Reach By Paul Craig Roberts December 01, 2008 "Information Clearinghouse" EXCERPT: When the dollar collapses, the image of a strutting Washington as “the world’s only superpower” will evaporate. The evil that is the American government will find itself at war with its own people and those of the rest of the world." http://www.informationclearinghouse.info/article21366.htm
FROM JSMINESET.COM Hourly Action In Gold From Trader Dan Posted: Dec 03 2008 By: Dan Norcini Dear CIGAs, I am a bit pressed for time today as the price action in the various commodity futures that I trade is keeping me on my toes. Some of the commodity markets are following the US equity markets higher today while some of them are not, notably gold and most of the metals. Gold in particularly is not trading “right” today. By that I mean the correlation between it and the US equity markets has been pretty close recently. When the equities are moving higher, gold has been moving higher in what I am calling the reflation trade. The opposite also has been holding true. Today, the equity markets were initially higher and yet gold still got whacked again. Generally, we have been seeing the Dollar and the US equity markets going in opposite directions as well. Today that changed with the Dollar moving slightly higher while the equities were also moving higher. That brought in selling into gold after the market had recovered most of its overnight losses. About 30 minutes before the close of pit session trading in New York, gold was hit once again. So too were the mining shares. The war against gold obviously continues. Interestingly enough, the equities faded off their highs just about the time gold was getting ready to close in the pit. The volume in the gold is getting quite anemic. It looks more like a holiday trade than a normal business day trade. Spreads between bids and offers at times are as much as 7-8 points at times even in the most active month. The contraction in open interest is taking its toll on liquidity. Yesterday saw another drop of over 1900 contracts bringing the total to an almost laughable 264,796. I say laughable because who would have envisioned that during a time of such incredible financial duress, the interest in gold would be collapsing. That just goes to show the extent of the de-leveraging trade. Again, we are talking about the phony paper gold market and not the real deal. Technically gold is treading water holding just above support near the $760 level basis February. Failure there and it will retest $740. Upside resistance is first at $780 - $785 and then at $800. We had another 285 deliveries assigned this morning with HSBC the largest stopper followed by Bank of Nova Scotia. Fortis Clearing is providing the brunt of the selling. Total deliveries so far this month are 11,758 contracts or 1,175,800 ounces. That is a nice chunk of gold but we still need some more taken out. Open interest in the December contract still is a bit high for this late in the contract’s life which could mean that there are more than a few players left who intend to take delivery. The total remaining as of yesterday is 2,118. That is 211,800 ounces of potential physical gold purchases. More guys still could come into that month yet if they knock prices much lower so stay tuned. A quick comment about the price action in so many of these markets which can aptly be termed, “schizophrenic” – they have become the domain of day traders and scalpers. Drawing too much in the way of assumptions from price action in regards to the fundamentals is a waste of time. They will go in whatever direction the most money happens to get thrown at them on any given day. If the biggest order of the day is one that says in effect; “Jump off the edge of the canyon and follow me” – guess what – They all will do exactly that! Newsletter writers in particular, who are forced to make daily recommendations to their readers are to be pitied. What they write one day, they have to take back the next only to eat those words the day after. Better to sit on the sidelines and wait and see if some semblance of sanity comes back after the new year. I have chatted with a few of my trading pals and the consensus is becoming just that. Take a long vacation and let the rest of these guys chop each other to pieces, particularly the hedgies.
FROM THE ZIMBABWE TIMES: http://www.thezimbabwetimes.com/?p=7633 $60 000 000 000 000 000 000 000 fraud! November 20, 2008 By Our Correspondent HARARE - Reserve Bank Governor, Gideon Gono has frozen the accounts of eleven companies and nine individuals who have been involved in fraudulent cheque activities totaling Z$60 000 000 000 000 000 000 000 ($60 hexillion) over the past ten days which they deployed on the Zimbabwe Stock Exchange to bid for shares. This amount effectively dwarfs the $1, 1 hexillion that is the total of all quasi-fiscal operations the central bank has engaged in over the past five years. The accounts of nine individuals and directors of blacklisted companies were frozen while they were barred from opening any other banking accounts in Zimbabwe for “indiscipline, corruption, fraudulent activities and underhand manipulation of the money and capital markets”. Gono blamed rogue and fraudulent activities for the cash shortages that have forced depositors to sleep in queues outside commercial banks and building societies in order to withdraw the $50 000 proclaimed by the central bank as the maximum daily withdrawal limit. While the fraudulent activities in question have, in the words of Gono, taken place over the past 10 days, the bank queues that the Reserve Bank governor refers to have been in existence for months now. Gono made these shocking revelations as he put in place new measures to curb fraudulent banking activities and trading on the Zimbabwe Stock Exchange which he said “had become the most devastating vehicle of economic destruction”. In the past, Gono has labelled inflation as the Number One enemy hampering his much talked about economic turn-around programme. His previous efforts have achieved little success in reining in inflation which is now currently pegged officially at 231 million percent “The current cash shortages are a combined effect of the rogue trading on the Zimbabwe Stock Exchange,” Gono said. “Insurance companies have stoked the flames of financial instability through flouting of the statutes that govern their operations.” The central bank has immediately stopped entertaining unsecured accommodation from commercial banks and threatened to eject those who flout regulations out of the clearing houses. “Any banks or stock-broking firm which writes cheques that are not funded will have their accounts closed. Any bank where bank cheques are fraudulently drawn will automatically lose their trading licences and the CEO charged with criminality,” Gono said. For instance, one bank branch authorised a cheque that far exceeded the whole company’s assets put together. Some players in the banking sector had relaxed controls and risk management systems leading to officials engaging in corrupt activities, he said. Other proposed deterrent measures include penalizing a bank’s entire management and board of directors in cases where the bank does not report suspicious transactions that turn out to be fraudulent or money laundering proceeds and closing accounts for any stock broking companies that fail to settle their obligations on the ZSE register “The victims of these fraudulent activities are the hard-working workers going for months without access to their salaries at banks; the sick who cannot get treatment at hospitals and clinics due to lack of cash; the commuting public who fail to go from place to place because of rampant increases in transport costs and children having to go to school of empty stomachs and the disadvantaged members of society who can barely make end meet,” Gono said. Gono routinely uses populist excuses and lays blame on the banking sector to cover up for cases of clear mismanagement at the Reserve Bank.
Tuesday, December 2, 2008
Hourly Action In Gold From Trader Dan Posted: Dec 02 2008 By: Dan Norcini Dear CIGAs, Today we are back into trading the “reflation trade”. Yesterday we were all trading the deflation trade. Tomorrow – who knows? Today was a near perfect inverse of yesterday’s price action in the commodity complex. Yesterday the index funds and some hedgies were throwing away everything and anything that remotely resembled a commodity. I remarked that my quote board was a solid line of red. Today that same quote board is a solid line of blue – everything that looks remotely like a commodity is up. Okay – let’s try to deeply divine this incredibly sophisticated and complex trading program that is being employed by the marvelously inept modern hedge and index funds – ready? Stock market UP – BUY COMMODITIES… Stock market DOWN- SELL COMMODITIES… I know it is hard to wrap your mind around such a complex algorithm, but I think that if we concentrate really hard and apply ourselves we will be able to grasp the vagaries of this amazingly sophisticated strategy. I sure am glad the best and brightest traders on the planet are handling this strategy as I for one would no doubt be lost in its complexities. Seriously folks – we are all trading the US equity markets nowadays whether we actually trade them or not. Even with the up day (thus far) in the equity markets, it does seem to me from watching the price action, that ongoing long liquidation and some small amounts of fresh hedge fund selling are emerging on rallies in the commodity markets. That is being confirmed by yesterday’s release of the supplemental commitment of traders reports showing further index fund long liquidation across the entire spectrum of the commodity complex. The exodus of that money from the complex has seen open interest in many of these markets cut by more than 50% from its peak. That is a tremendous amount of selling. These guys were the ones that drove prices north when they first came in to buy as investors were clamoring for commodity exposure in their portfolios and now they are the ones driving prices south as those same investors sour on world of tangibles. Assuming there are any of them left when the dust settles, they will also be the ones driving prices back up again once the fallout from this quantitative easing begins and the Dollar gives up the ghost. As a further point of reference, open interest took yet another big hit in yesterday’s price collapse dropping nearly 5,000 contracts to 266,000. We are now down to levels of open interest last seen in August 2005, more than 3 years ago! Gold was trading closer to $450 back then. I am beginning to think that the bulk of the index fund liquidation is coming to an end. A lot depends on whether or not the hedge funds decide to start building short positions in the gold market but as far as selling goes, the index funds are generally “long only” funds so once they have exhausted their selling and met all the redemption requests that they need to meet, the selling is going to either have to come from the hedge funds or the comex gold market is going to run out of sellers. If the hedge funds do not move in on the short side, gold is not far from a bottom. We just have to wait and see since attempting to ferret out just how large a long position the index funds had built up is pretty challenging since we do not have the appropriate data from the COT – instead we have to extrapolate from the current COT reports. Three year’s worth of positions dropped in less than a year is pretty revealing however. Technically, gold bounced off of the ascending 20 day moving average and climbed back above the 40 day – both are positives. It has not been able to recover the 50 day moving average however – that is a negative. The shorter term moving averages are moving higher while the longer term moving averages are headed lower. That means short term the picture is friendly while the intermediate term is still negative. An upside crossover by the shorter term moving averages above the longer term moving averages will further reinforce the friendly technical picture but to really give the bulls control of the market, the 40 day and the 50 day will need to turn higher. Above those two moving averages, the 100 day comes in near the $833 level. That will be a noteworthy achievement if gold can best that level. The HUI and the XAU are following the broader stock market higher today. I am still waiting for these to trade independently on their own merits. Crude oil dipped sharply overnight to nearly $47 before it too rebounded with the higher stock market. It is struggling however to maintain its minor gains on the day. I would be surprised to see crude oil much lower than the lower 40’s. OPEC has a meeting scheduled in a couple of weeks so its price action over this period will determine what they may or may not do in regards to any potential supply reductions. I am sure there are quite a few sad faces among that group considering that it was not all that long ago that they were fetching an additional $100 per barrel on their product. Not that too many celebrate Christmas over that way but I suspect that among those that might, the stockings are going to be a bit light this year. Incidentally, if you have not looked at a price chart of the long bond recently, do yourself a favor and do so. I was still sucking milk through a bottle the last time yields were this low. I would not be the least bit surprised, and this is the cynic in me, to learn that a good portion of the bond buying in the futures pits is actually front-running using bailout money to get into position for the Fed to begin buying across the yield curve to keep interest rates low. How else to explain the insane rush into US Treasuries in the face of nearly unlimited creation of US debt and collapsing yields? Since there is ZERO accountability for the use of this bailout money, what is to keep the recipients from using it to try to once again leverage it up for a “sure bet”? Answer – nothing! These are the same people who would sell those worthless alphabet soup structured investment securities to their own grandmothers if they thought that they could make a quick buck from it. Do not be under any illusions as to what these conscience-deprived cretins are capable of. Let me take a brief moment here to address an issue that seems to be coming up more often than not. I think some folks misunderstand what Jim and I, along with others, are attempting to do with our campaign to urge folks who want to buy gold in quantities of 100 oz or more to stand for delivery at the Comex. We are not trying to bust the Comex in the month of December. What we are attempting to do is to begin a systematic and sustained effort among potential buyers to REGULARLY buy their gold by entering long positions at the Comex and then taking delivery and doing this over and over again each time they feel prices are cheap or they have money to invest in gold. Every time the bullion banks raid the gold price, those who want to buy gold at a discount thanks to our “friends” there, can enter their long positions and then ride the contract into the delivery process. If enough gold buyers do this over and over again on a regular basis, the shorts will have been served noticed that their days of manufacturing unlimited amounts of paper gold with which they can attempt to drive the price lower are coming to a close. What it will do is force them to cover their shorts much more quickly effectively limiting the downside damage that they can inflict on the paper price of the metal. The more buyers that can be recruited to this effort, particularly buyers of large size, the more difficult the life of the paper shorts will become. Short of taking delivery of the actual metal, preferably pulling it out of the warehouses, the shorts can reign supreme over this market. What’s more – they are doing this with impunity as they pay no price financially to do so and profit quite handsomely I might add. Strip them of the metal and they are cooked. Then they will have to compete on a level playing field like the rest of us. Who was it that said, “He who sells what isn’t his’n, must pay the price or go to prison”? If the paper shorts are selling what doesn’t exist, namely tons of actual gold, forcing them to show us the actual metal will work to modify their behavior. This is the only way to keep the Comex gold market honest. Speaking of deliveries, another 307 deliveries were assigned this morning. I can tell you that 43 of those were retenders by Greenwich Capital Markets. The total so far this month is 11,473 contracts or 1,147,300 ounces. I want to see the warehouse totals over the next couple of days before commenting on that. Time is needed to actually move the metal that is going out.
FROM JSMINESET.COM on Dec 1, 2008 The dollar cannot rise in the face of the Fed wishing to construct a less deflationary perception in markets and business. It is simply not possible to sustain. The dollar rising in the face of the creation of so many dollars simply is not possible to sustain. The dollar rising in the face of imploding financial and general business entities, being immensely bigger than the Euroland problems, is impossible to sustain. The dollar rising in the face of Quantitative Easing cannot be sustained. As you clearly recognize, gold is a currency, has always been a currency and will continue to be a currency regardless of today’s effort to the contrary. Therein lies the future of gold which will trade on or before January 14th, 2011 at $1650. When Comex deliveries represent 21,000 100 oz. bars taken delivery and removed from the COMEX warehouse, the price of gold will no longer be a game for the well known names out there. The price of gold will reflect the true state of the physical market because the Comex in a practical sense will be a cash market. The Comex as an observation also becomes a cash market at 100% margin requirement. The effort here is in no way a covert attempt to break the playing board known as the Comex. The actions suggested and practiced here will with certainty level the playing field which is now totally leaning towards the professionals who are picking your pockets regularly and without fail on every single move.
http://meltdown2011.wordpress.com/2008/11/29/vaporize-comex-countdown/ Be sure to scroll through the whole first page. It will answer many of your questions. Thanks to UNWASHEDMASS on the MW gold thread for the link.
Monday, December 1, 2008
[Ed. Note: This report should be read from its website location at http://www.whatdoesitmean.com/index1173.htm as this email copy does not contain the links embedded in the original report.] December 1, 2008 Obama To Usher In "Mark Of The Beast" Age, Warns Russian Church By: Sorcha Faal, and as reported to her Western Subscribers A new report presented to Prime Minister Putin and President Medvedev by His Holiness Patriarchy Alexy II of Moscow and All Russia is warning that the new United States President Barak Obama is following the same dark 'spiritual pathway' forged by last centuries German Leader Adolph Hitler as the Western Nations continue their efforts to institute upon this Earth their centuries old goal of a 1,000 Year Third Reich. The Third Reich was the official name for the Nazi Germany - or Nazi period of government from January,1933, to May, 1945. The term "Reich" is a German term to mean reign or rule. During this brief reign, it was under the firm control of Adolph Hitler's dictatorship and the totalitarian ideology of National Socialism. The term Nazi is a short form of the German Nationalsozialismus. The Nazi Party is the short form for the NSDAP (Nationalsozialistische Deutsche Arbeiterpartei) or the National Socialist German Workers' Party. Not being understood by the Western peoples however, is that this Third Reich was always meant to be the 'last age' of our present World as the bridge between what we are now and what we are going to become and follows upon the previous two 1,000 year reigns of the Babylonian and Roman Empires that preceded it and which were, likewise, working towards the establishment of One World Rule upon our Earth. Most interesting to note in this report are the stunning parallels between Hitler and Obama's meteoritic rise to power which include: Neither Hitler nor Obama were natural born citizens of the Nations they took command of as Hitler came from Austria and Obama from Nigeria. Both Hitler and Obama were raised from relative obscurity based upon the publishing of their first books which propelled them to National prominence and the publics consciousness with Hitler's "My Struggle/My Battle [Mein Kampf]" and Obama's "The Audacity of Hope: Thoughts on Reclaiming the American Dream". Both Hitler and Obama were preceded to power by ineffective and unpopular governments that nevertheless laid the groundwork for dictatorial rule through numerous laws enacted to prevent "terrorism" and protect the Homeland. Both Hitler and Obama campaigned for office using the slogans of "Change" and "Yes We Can" while at the same time having their pasts nearly totally obscured by their National corporate media structures. The warnings issued to the German and American peoples by numerous religious organizations about Hitler and Obama went unheeded by the mass of their citizens. Both Hitler and Obama assumed leadership during their Nations worst economic crisis in history allowing them to radically change the social structures of their Nations towards full militarization of the populace as the means to restore their economies. Both Hitler and Obama advocated vast public work projects to repair their Nations systems of roads and bridges as a means to employing their citizens. Both Hitler and Obama advocated new laws and protections for the environment vowing to protect our Earth for the benefit of future generations. Both Hitler and Obama advocated mandatory public service for all youths as a means for attaining free public education. Both Hitler and Obama advocated energy 'revolutions' to reduce their Nations consumption of fossil fuels. Both Hitler and Obama were described as charismatic speakers able to mesmerize their supporters with "messiah like" fervor. Both Hitler and Obama in private conversations prior to their taking power held great disdain for both religion and their citizens owning guns. But most importantly about Hitler and Obama, this report continues, is that to their citizens they had been put forth as 'blank slates' upon which anyone is able to project upon them anything they like as behind them lies no substance, history or record of achievement other than that which is directed upon them by those dark forces which control them. In one of the most astounding surveys conducted by the Russian Church on Obama it was found that among the American people that: Over 97% of Americans were not able to name either the city or State of his birth; Over 98% of Americans were able to name either his mother or father; Over 99% of Americans were unable to name any US elementary or secondary school he attended; Over 78% of Americans were unable to say which university he attended; Over 99% of Americans were unable to state what he did or where he lived between the years of 1970-1998. What brings these shocking numbers into even sharper relief is that when Hitler had, likewise, assumed the leadership of Germany nearly 95% of the German people didn't know he was born and raised in Austria. What is not known about Obama's past however, does not conceal his plans for his Nations future, and as best stated by the British Illuminati researcher David Icke on the coming Obama Presidency, "It is not a change of direction.just the next stage." And to this 'next stage' the American people are about to enter into there should be great fear among them as Obama is in the process of creating a ruling elite which combines the worst personages of the last 20 years coming from both the Bush and Clinton Family's powerful rule and which began with Prescott Bush, the current Presidents grandfather, who along with the most powerful US and British Industrialists, financed the rise of Nazi Germany, attempted to overthrow President Roosevelt in a 1933 coup d'état called the Business Plot, brought to the United States after World War II the elite of German Nazis surviving that conflict in what was called Operation Paperclip, assassinated President Kennedy for daring to oppose them, took over the Central Intelligence Agency (CIA) turning it into the largest drug cartel the World has ever known, and killed nearly 4,000 American citizens during the 9/11 attacks to further their aims towards total dictatorial rule. Even today as these very words are being written, and in yet another bid showing both their leaders arrogance and the ignorance of the American people, the Pentagon has announced it is stationing 20,000 armed US Soldiers in the United States itself to help 'protect' the Homeland from attacks. These 20,000 US Soldiers being stationed among them should strike great fear into the hearts of all Americans, especially when viewed in the context of Russian Military reports which state that with nearly every US City surrounded by 'circle freeways', and with the average number of exits for these circle freeways being around 50, and with the number of armed troops needed to secure each exit being 6, and with only one heavy combat vehicle needed for each squad of 6 soldiers, every major population center in the United States can be sealed off and contained within 24 hours by just this exact number of troops. In our World today one doesn't have to look to far to see how this is done as the Israeli's have perfected the mass imprisonment of human beings in urban prison camps as evidenced by the Gaza Strip where barely 300 Israeli soldiers have cut off from all food and fuel supplies to over 1.5 million Palestinian men, women and children. And it should come as no surprise that neither the United States, nor its Western allies, are opposing this mass imprisonment as they themselves are planning for those times when they will be doing the same thing to their citizens. To how soon the mass imprisonment of Western citizens will begin we can glimpse as reported by the Prison Planet News Service: "An internal memo from a top Citibank analyst reveals what the banks really think about the global financial situation, and the outlook is grim. "The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed through into an inflation shock," wrote Tom Fitzpatrick, Citibank's chief technical strategist. He goes on to explain that the massive money creation efforts by the Federal Reserve and other central banks will end with one of two things: A resurgence of inflation, or a fall into "depression, civil disorder and possibly wars." But to the direst warning of this report, the Russian Church states that like the Soviets had once defended our Earth from the Nazis, it is going to have to be done again lest we all fall into an eternal darkness where the "Mark of the Beast" will no longer be an antiquated Biblical myth, but will become the reality for billions of our human race forced into micro chipped and drugged servitude to the cruelest slave masters our Earth has ever known. © December 1, 2008 EU and US all rights reserved. http://www.whatdoesitmean.com/index1173.htm -- Sorcha Faal firstname.lastname@example.org
Sunday, November 30, 2008
Debt Upon Debt And Bankrupt Financial Institutions Posted: November 29 2008 A moment for the big picture, panic set in to resolve the insolvency crisis now upon us, new moral hazard, soon an end to the bubbles, toxic waste worth next to nothing, legislative malfeasance, markets soon to be put under maximum pressure, everyone now terrified of lending and our way of life is set to change http://theinternationalforecaster.com/International_Forecaster_Weekly/Debt_Upon_Debt_And_Bankrupt_Financial_Institutions
Hope You Die Before You Get Old By David Michael Green http://www.informationclearinghouse.info/article21359.htm November 30, 2008 "Information Clearinghouse" -- As a Baby Boomer, I’m sure not encouraging generational warfare in America. I have everything to lose from such a battle. On the other hand, though, as a political analyst, I can hardly believe we’re not seeing it. Never has it been so manifestly logical. Never would it be so thoroughly deserved. And yet, never has it been so astonishingly absent from the playing field of American politics. I grew up in a period of generational conflict. “Never trust anyone over thirty”, “Hope I die before I get old”, etc. But I have to say that my generation got a way better deal from our parents than we’re leaving for our kids. Sure, our parents bequeathed us Vietnam and Nixon. But I think those politics were a matter more of naivete, really, rather than malice or greed. I remember how my own parents reacted to the war and to Watergate. Having struggled collectively through the Depression, and having fought the good fight of World War II, I think they were wholly unprepared for the levels of deceit and callous indifference to harm they came inescapably to find that their government was capable of. This was an existential challenge of the kind we jaded Boomers can probably never appreciate. They were true believers, and they were rattled to the core when Toto pulled back the curtain. Their children, on the other hand, were raised to become cynics, for whom no such political crime can ever quite surprise us.
George W. Bush Belongs in Prison By Joel S. Hirschhorn http://www.informationclearinghouse.info/article21358.htm November 30, 2008 "Information Clearinghouse" -- Electing Barack Obama president was the first step in redeeming American democracy. The second step must be indicting ex-president George W. Bush, giving him a fair trial, finding him guilty of many criminal acts and putting him in prison. Forget revenge. Think rule of law and justice. I want President Obama soon after taking office to go on television and announce the formation of a special group of outstanding jurists and attorneys to make a recommendation whether or not the US Justice Department should bring criminal charges against George W. Bush. Based on earlier analyses, including work by the American Bar Association, I have no doubt they will recommend indictment. If moral honesty and courage have any meaning, then the nation must take seriously the concept that no president can ever be allowed to be above the law. How can President Obama not strongly support this? Surely no president must be allowed to disrespect and dishonor the US Constitution. George W. Bush broke his oath of office. His behavior was treasonous. Instead of defending the Constitution he disgraced it. Instead of protecting constitutional rights, including privacy, he sullied them. He asserted his right to ignore or not enforce laws so he could break them. Respect for the office of the presidency must never be allowed to trump truth and justice. Millions and millions of Americans and people worldwide know that George W. Bush made 9/11 the trigger for initiating an illegal war in Iraq that has killed and maimed so many thousands of people. What Vincent Bugliosi, author of “The Prosecution of George W. Bush for Murder" called “the most serious crime ever committed in American history.” I say convict Bush of myriad counts of criminally negligent homicide related to both Iraq and the Katrina disaster and put him in prison. A former president in prison would not disgrace the presidency. It would restore honor to the office and the Constitution. Surely millions more people now understand that George W. Bush bears responsibility for creating the conditions that encouraged greed-driven capitalism to rape and murder the middle class and push us into the current global economic meltdown. By removing government oversight and regulation he committed the greatest acts of fraud in the history of mankind. After he made American democracy delusional he made prosperity delusional. We the people are paying the price for George W. Bush’s criminal acts and so must he. When George W. Bush is sent to prison everyone will see that American democracy has earned the respect of the world. Everyone will better understand that evil comes in many forms and that even an elected president of the United States of America can and must be recognized as a perpetrator of horrendous criminal acts. Please President-elect Obama, make it so. Be the principled person we want you to be. Make the USA the nation it is supposed to be. Have the courage to do what Congress refused to do when it did not impeach George W. Bush. Change history by showing the world that American justice applies as equally to the president as it does to anyone else. Do not let George W. Bush escape the justice and prison sentence he deserves. Do not let respect for the presidency trump respect for justice. If we do not bring George W. Bush to justice that probably only you can make happen, then surely we do not restore respect for the office that you worked so hard to achieve. To ensure that no future president behaves like George W. Bush we must punish him. Not merely through the words of historians, but through the physical punishment that he has inflicted on so many millions of people. In previous eras citizens would have demanded “off with his head.” Now we must demand “lock him up.” How poetic for a pro-torture ex-president. As summed up at www.imprisonbush.com : “Bush must be made accountable to the law, to serve as a lesson to all those who would attempt to destroy the American system of laws and liberty for the sake of their own power.” This is a test for both President Obama and American democracy. If there is any kind of God in the universe, then George W. Bush must go to prison. When he does, then and only then should God bless America. Formerly a full professor at the University of Wisconsin, Madison and a senior official at the Congressional Office of Technology Assessment and the National Governors Association, Joel S. Hirschhorn is the author of nonfiction books, including Prosperity Without Pollution, Sprawl Kills and Delusional Democracy.