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Friday, June 1, 2012

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Saturday, May 12, 2012

A golden opportunity – Experts predict gold is set for a massive upswing

Many gold experts are predicting a massive upswing saying the downturn in gold has levelled off and history tells us when that happens, gold takes off again like a rocket. According to the highly respected economist and strategist David Rosenberg "gold will go to $3,000 per ounce before this cycle is over." Rosenberg considers gold has corrected and sees a “very good opportunity in gold” and seems to be "off the radar screen right now". He sees gold as a currency and says the best way to value gold is in terms of money supply and “currency in circulation.” As the “volume of dollars is going up as we get more quantitative easing” he sees gold at $3,000 per ounce. And in a recent interview John Hathaway revealed more valuable insights about the precious-metals market at the Casey Research Recovery Realty Check Summit. Joining him were Doug Casey, James Rickards, John Mauldin, and 27 other financial experts. And it was not so long ago that Alf Field, a noted gold expert pointed out, "The Elliott Wave Theory (EW) gives superb results in predicting the gold price…. I have determined that once this present correction in gold has been completed it should undergo the largest and strongest wave in the entire gold bull market. The target for this wave should be around $4,500 with only two 13% corrections on the way." Now seems the time to buy gold and take advantage of this golden opportunity as before the massive upswing in the gold price occurs.

Saturday, April 17, 2010

The Gold in Gold etfs, Now You See it, Now You Don’t

Are gold exchange traded funds (etfs) a ponzi scheme?

London Metals Trader whistle-blower Adrian has stated as much at a Commodity Futures Trading Commission Hearing (CFTC), the US Government regulatory agency, to the chagrin of the London Bullion Market Association (LBMA).

He claims that the worlds largest gold trading center is nothing more than a giant ponzi scheme with trades backed, not by gold, but by a fractional reserve system where 100 ounces of gold is backed buy only one ounce. So if everyone who 'owned' gold in the system demanded their stored value in gold bars and not cash, like a run on the bank, there would not be enough gold to supply the demand.

This is not the first time this has come to light. In 2007, Morgan Stanley forked out several million dollars to settle claims it had charged 22,000 clients for storage fees on non existent silver bullion.

At the hearing also Jeffrey Christian of CPM Group made the revelation that the LBMA banks have one hundred times more gold deposits than … er … gold.

So where IS the gold? Well it seems there never was anywhere near as much as investors have been lead to believe.

Its like a perverted ponzi scheme. Sell gold that does not exist, keep the gold price down with short selling. Everyone is a winner, except for those that want to redeem or take delivery of their gold.

And to cap it off when one does demand their gold and takes delivery, one finds it is really a bar of tungsten coated in rich creamy gold and worth, if your lucky, one hundredth of the gold price. This was recently discovered in Hong Kong when delivery of four 400 ounce LBMA bars were delivered and sparked off a wave of investigations in which further LBMA gold bars were found to be counterfeit.

So we wonder now how many thousands of clients, Asian and Middle Eastern Governments think they own billions of dollars worth of gold but in fact own, at the best, unsecured loans to the banks at a disturbing negative interest rate and at the worse, bits of paper with large numbers on them.

In any event, we will likely see a continuing rise in the gold price as the true amount of gold in the world emerges. Those people, then, who are astute enough to have actually bought real physical gold instead of worthless paper gold will be the winners when the price of gold shoots through the roof.

Monday, April 12, 2010

Lifting the Lid on Gold Price Suppression

You know what it’s like. You have a old tin of paint and it is a devil of a job getting that lid off to see how much paint there is inside.

Well the Gold Anti-Trust Action Committee (GATA) have been experiencing this very same feeling with the gold price. They have been trying to prise off the lid on the gold price suppression and expose it for some years. It now seems their attempts are starting to see the light of day. They can see the glint of gold in that old paint tin and it is tantalizingly close.

In mid March GATA Director Adrian Douglas was contacted by a metals trader in London, Andrew Maguire. Who indicated he had been told first-hand by traders working for JPMorganChase, that JPMorganChase manipulates the precious metals markets, and they have bragged to how they make money doing so.

Subsequently, at a hearing held by the US Commodity Futures Trading Commission (CFTC) Douglas gave testimony on and reported how JPMorganChase (JPM) signals to the market its intention to take down the precious metals. Traders recognize these signals and make money shorting the metals alongside JPM. Based on whistle-blower Andrew Maguire report, these are routine market manipulations at the time of option expiry, non-farm payroll data releases, and COMEX contract rollover, as well as ad-hoc events.

Prior to that, in early February, Maguire gave warning to Eluid Ramirez a senior investigator for the CFTC's Enforcement Division, that the precious metals would be attacked upon the release of the non-farm payroll data on February 5. On February 5, as market events played out exactly as predicted, further e-mails were sent to Ramirez while the manipulation was in progress.

One could be forgiven for thinking that there is a lot of desperation around when such 'coincidental things happen', such as Maguire's car being rammed by a hit and run just after his initial statements and strange ‘technical’ breakdowns during videos of Bill Murphy and Adrian Douglas's testimony to the CFTC. Interestingly enough after the hearing, Douglas and Murphy were contacted by several media outlets for interviews but all, repeat all of the interviews were cancelled.

Never the less although the hearings were supposed to be low key, the word is now out and the main stream media is now following the birds on a line rule. When one bird flies the others will too. The New York post, the Huffington Post and even the Herald Sun newspaper from way down under in Melbourne, Australia have taken up the story.

We can likely expect more revelations as the lid is eventually prised off this can of worms and the true gold price begins to assert itself.

Monday, September 15, 2008

Buying Gold Like There is no Tomorrow

A New Gold Rush has started!

Shops in Abu Dhabi are reporting a 300 percent increase in the buying gold. One Jewelery shopkeeper reported selling over 5 kilos of gold coins and gold bars in just a few hours.

All since the price of gold has dropped by just 15 Dh per gram.

Most of the customers were shopping for Eid Al Fitr and Onam, a festival of Keralties which ended on Thursday but many were reported as buying gold for investment purposes expecting the price of gold to go up fairly soon according to a reporter from the Khaleej Times.

Coins sold out fast as customers rushed the shops to buy whatever gold coins and bars they could.

According to Sheejan Thomas, the manager of Joy Alukkas Jewellery at Hamdan in Abu Dhabi, “We have done over 200 per cent more business this time as compared to the same time last year. The reason is obvious: low prices. Residents are purchasing both 22 and 24 carat gold for investment and wedding purposes. We finished our stock of gold coins and biscuits in two days.

“We have mostly Asian customers, particularly from India. As Asians crave for 22 carat gold jewellery, we deal in them only. We don’t sell 24 carat gold jewellery.”

A cashier at Pure Gold in Dubai’s oldest gold market, Uzair Alam, stated, “For the past three days, our shops have been completely packed with customers purchasing jewellery.” He went on, “In Dubai, our business has been all-time high, reaching over 300 per cent as compared to September last year. People are purchasing jewellery as if they are being given free.”

And Cushar Patni, manager of Ajanta Jewellers in the capital, confirmed, “We made 200-300 per cent more business than the same period last year. “This is because of the low prices of gold. We don’t think the prices will go down further. They are, in fact, going up gradually. Many people are purchasing gold this time for investment purposes.” He said.

It seems the fast east market has a lot of faith in the gold price going up. Either that or they know something we don't.

Friday, July 25, 2008

Hong Kong Gold ETF

Hong Kong will launch its first gold exchange traded fund ( Gold ETF) in a few days attracting Hong Kong investors keen to cash in on gold to preserve their wealth and hedge against rising prices.

The Hong Kong's market regulator, the Securities and Futures Commission, has given the green light for the launch of the SPDR Gold Trust by the World Gold Council and investment firm, State Street Global Advisors.

SPDR Gold Shares is an ETF that will hold allocated pooled gold, stored in a vault in London, as its asset. Each share will represent one-tenth of an ounce of gold. A minimum order of 10 shares, or one ounce of gold will be required to start off an account.

SPDR Gold Shares already trade in New York, Japan and the Hong Kong market is seen as a new and potentially wealthy market to capitalize on.

The exchange-traded fund will be listed on the Hong Kong Stock Exchange. It will track the price of gold which it keeps in a HSBC vault in London.

Sammy Yip, Head of Exchange-Traded Funds (Asia Pacific), State Street Global Advisors, stated, "You may trade these gold shares in exactly the same way you trade any stock."

Hong Kong's listing follows a very similar fund launched in Singapore and Tokyo, but the fund's manager was quick to state there will be no rivalry between the three markets.

"We are talking about three different markets and the underlying investors' characteristics are also different. So I believe the listings basically will be able to offer more to investors to participate in this product," said Yip.

However this ETF will suffer the same disadvantages as other ETFs traditionally have, including the fact that investors will not be able to redeem any gold of course as they will not actually own any gold. This is simply an investment in the value of the unspecified quantity of gold held by SPDR and is subject to the variations that beset any investment vehicle.

James Turk, the noted gold authority, stated recently, "Gold is we all know as an inflation hedge, but not everyone understands that it is also a catastrophe hedge. Gold is both a tangible asset and money. Consequently, gold is the only money that is not someone's liability. In other words owning physical gold does not have counterparty risk, which is an attribute that is becoming increasingly important given the fragility of the banking system."

So, in this case, a more secure gold investment vehicle where you are the absolute owner of your gold and silver would be goldmoney.com. Gold Money simply stores it securely on your behalf fully insured and stored securely in specialized bullion vaults in London and Zürich.

In this situation gold and silver is truly owned directly by you with no counterparty risk And when it comes to your gold and silver bullion, no risk is what it is all about when it comes to your assets!

Friday, July 11, 2008

History Has A Way of Repeating: The Gold Price Will Run

One of the most fascinating things we have learned about history, is that we do not learn from history. Well, some of us have been taking notes, and those of you who are regular readers of our newsletter are already onto much of this.

If you choose to study money, and particularly gold’s role as money throughout history, you will find that gold (and silver) has been the one consistent currency of choice, off and on, for over 5000 years.

This is not some archaic hidden secret, facts and figures are readily available to any layman with an internet connection who knows how to execute a search on google.

Societies from the beginning of recorded time have oscillated back and forth between “Easy Money”, also known as Fiat Currency, and “Disciplined Money”, also known as some form of gold or gold exchange standard.

The reason this occurs, is that societies have always gone through a cycle that tends to repeat itself, over and over, as predictable as the tides.

Throughout history, the way that money originated, is that markets traditionally created their own currencies, and over time would almost inevitably end up using gold and or silver as mediums of exchange. This is due to the fact that of the worlds naturally occurring materials, gold serves the role the best.

The reason for this, is that over time, gold has been a reliable measurement of mans labor and time. It takes labor and great capital expense to force the earth to yield the soft yellow metal. In addition, if you measure the number of ounces of gold above ground over any period of history, you will find, that until very recently, there have been roughly one ounce of gold, for every human being on the planet. In ancient times it took the measure of a man’s life to mine roughly one ounce of gold, and likewise, in ancient times a man’s life could be purchased, for his entire life, for one ounce of gold.

Gold has been called “The Money of Kings”, and for much of human history, only Kings traded in it.

So what does this cycle look like, that we mentioned a bit before?

Essentially, once wealth is created in a marketplace, government likes to get involved because “he who controls the issue of currency controls the people and the markets”. At this point, once the government has gained control over issuance of the currency, then the government starts to debase the currency.

Why would a government do this? Well lets say for example that there was a make believe government someplace that for some strange reason wanted to spend more money than it “earned” through taxation, to pay for some silly projects such as social security, pointless wars, or other massive social welfare programs. Crazy, I know, but humor me for a moment. The way a government could do this, would be to simply reduce what each unit of currency was worth (in ancient times this meant melting down pure gold and silver and recasting the coins with a less pure metal), and then create more units of currency – in other words, add more physical money to the money supply.

This, in a nutshell, is the true meaning of inflation. Many people, and even financial analysts, incorrectly believe that inflation is increases in prices. This is not the case. Increases in prices, as well as devaluation of a currency, is a symptom of true inflation, which is the act of adding more currency to an available pool of money.

This is not rocket science. Anytime there is more of something, it becomes worth less. For example, if dollar bills were as common as rocks lying on the ground, they wouldn’t be worth much would they?

A “Disciplined Money” system of course, prevents this. If a currency system is a gold standard, or based on a gold exchange standard, then it acts as a check on the government, and prevents it from printing as much as it likes. Why? Because each dollar, if exchangeable for gold, would imply that there would have to be enough gold to give out if all the dollars were turned in.

This in fact happened in the late sixties, when the USA was printing so much money that several countries around the world got sick of it and started turning in all the dollars we were printing up for the gold instead.

What did we do? In 1971 President Nixon, by Executive Order, simply “closed the gold window”. This is a fancy way of saying we defaulted on backing our currency, and severed all ties to the gold standard that we had operated on for hundreds of years up to that point in time.

Now it is important to note here, that when a currency system is removed from a “Disciplined Money” standard and placed on an “Easy Money” standard, that is kind of like removing the thermostat from your automobile, your engine could be going super critical as far as heat, and you would not know it until steam is pouring out from under the hood, at which point the damage is already done. This is not unlike what is happening in our economy today. When we see the price of oil skyrocketing, and financial institutions failing left and right, it is a sign that the damage has already been done. Don’t fret, we have a solution, as you will see below.

Ever since that fateful day in 1971 when we closed the “Gold Window”, the government has been free to print up as much money as desired, a role it has taken to with gusto.

One thing I find very interesting, is that On March 23, 2006, the Board of Governors of the Federal Reserve System ceased publication of the M3 monetary aggregate report. In short, what this report told us, is how much money the government is creating and pumping into the financial system. The reason they cited for no longer producing this report, was that it was becoming too expensive to produce, which of course is a ludicrous argument. Ever since the Federal Reserve Act of 1913 gave permission to the Federal Reserve to essentially create as much money as it wants, the Federal Reserve can create money at will, I don’t see how they can’t afford to pay analysts to produce it. But that’s a rant for an entirely different article.

We will assume, for now that a common truism concerning government applies here: “nothing ever exists (or in this case doesn’t exist), until the government officially denies it”.

What this means to me, is that whenever the government fails to tell its citizens something, or intentionally covers it up, then it is highly likely that the government is doing something naughty. In this case, that naughtyness means printing a whole gangload of money and adding it to the money supply.

The great thing is, we have private firms who still track all the variables involved, and are kind enough to tell us that the government has in fact added almost $14 Trillion (yes that’s Trillion with a T) more dollars to the money supply, at an annualized rate of almost 18% a year.



If you have been paying attention, then perhaps you have come to the same conclusion I did when I started studying this stuff. If the government is creating money at almost 18% annually, that means that my investments and income have to be increasing at OVER 18% annually, or I am going backwards!!! Holy cow Batman, what now?

Lets for a moment get back to the point of the article: The Gold Price Will Run.

Yes, yes, there has already been a tremendous amount of hoopla in the media in regards to how high the price of gold is, and that it has surpassed its 1980 high, and its so overvalued.

With respect, I must say that there has never in history been a stronger set of fundamentals pointing to a massive rise in valuation for gold (and silver, for that matter).

First of all, the current high does not take into consideration inflation, which if factored in, we see that gold must surpass at the minimum $1200 for it to come close to matching the 1980 high.

In addition, if you look at the factors which contributed to the last manic bull run in the metal, we will see factors that eerily match the 1980 manic rise almost identically. This is where that history thing comes into to play.

Once severing the gold standard in 1971, the US Treasury went on a concerted bear raid on gold. Anyone with common sense can come to the conclusion that the reason the Treasury would want to do such a thing is so that the Dollar maintained its strength. The entire world was watching the dollar value after the US closed the Gold window, and a skyrocketing gold price would not signal confidence.

In 1974, before US Citizens were again allowed to buy gold in any form, steps were already being taken to ensure the gold price would go nowhere. In 1975, the United States, aided by the principal members of the IMF, the first gold auction took place, pouring 2,500,000 ounces of gold onto the market.

In august of that same year, the G-10 leading nations decided that the IMF gold reserves should not be increased, but decreased instead, which triggered another 25,000,000 ounces to be sold into the market over the next four years.

What the US Treasury, the IMF, and the G-10 was not prepared for, was that all cycles repeat, and history shows us that when people stop trusting their governments money, they start buying gold.

Dresdner Bank saw right through the ruse, and in 1979 made a bid for the entire allocation of gold for sale at the US Treasury auction in August of 1979. The impact of this was that the entire world piled onto the bandwagon, shattering the $400 ceiling and driving gold prices out of the atmosphere. The public had finally woken up and become fearful about what the government was doing with their money, and they had had enough.

To add gasoline to the fire, in late 1979, Iranian Revolutionary Guards stormed the American Embassy in Tehran taking US Diplomats as hostages. This ignited fears of a new oil crisis.

If you combine these two events and look at what is happening today, with a falling confidence in the US Dollar, and war drums beating over a possible conflict with Iran, not to mention the fact that Americans are already freaking out about prices at the gas pump, and you will see that we have almost an exact repeat of the factors that triggered the last manic run in 1980.

Lets add a few more factors to this puzzle:


1.
The governments of the world who are currently sitting on trillions of USD based reserves are all currently looking at each other wondering who is going to bug out first. Let’s face it, if you were China and losing 18% a year on a huge stockpile of USD, you would probably be a little nervous. When the flight comes, it will be a flight to sound money.

2. We are 8 years in to what is normally a 20+ year commodity cycle, and all of the money in Sovereign Wealth Funds sloshing around the world is looking for a place to go, and is going to seek a level – this could very well be sound money aka gold and silver.

3. We are now watching the tail end of the “Easy Money” to “Disciplined Money” Cycle. This means we may actually see a gold standard, or gold exchange standard of some type again in our lifetime. I have written in the past that I already suspect the Chinese may have ideas in this area. If this were to occur, the price of gold would be through the stratosphere overnight.

4. Oil has been catapulting. The historic ratio of oil:gold is 15:1, meaning one ounce of gold historically averages 15 barrels of oil. With oil today at $146, the gold price should probably be closer to $2190


The bottom line is, we are watching a series of events that are lining up perfectly to create a massive fundamental basis for a run in gold far beyond anything we have seen in history.

Some of us should do quite well while the rest of the equities markets are crashing and burning all around us from credit crisis fallout. The question here is: Will you? If you don’t have gold and silver yet, perhaps its time to consider it?

Author: Alex Stanczyk
http://www.rapidtrends.com/blog/