Baltic Dry Index. 876 +01
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"All of the government's monetary, economic and political power, as well as its extensive propaganda machinery, will be enlisted in a constant battle to drive down the price of gold - but in the absence of any fundamental change in the nation's monetary, fiscal, and economic direction, simply regard any major retreat in the price of gold as an unexpected buying opportunity."
Irwin A. Schiff
Central bankers should be careful what they wish
for! One week after the ECB ordered tiny Cyprus to hold a fire sale of most of its
gold bullion inventory, and pass the proceeds over to the ECB, and by
implication putting bankrupt Portugal and nearly bankrupt Italy’s gold bullion
into play as well, the gold market crashed, as buyers quite correctly pulled
their buy orders awaiting the coming fire sale, but leveraged gold futures
Muppets found no buyers for their margin call forced sales. Way to go Super Mario!
The idiocy that passes for modern capitalism 2013. I have been waiting since
last November to add to my gold coin collection, thanks to the ECB lunacy I will
now get bargain basement gold. Probably at the sale of the century prices. Of
course, they have probably just blown up several mining companies, probably
starting in the Republic of South Africa, an entirely unintended consequence of
Super Mario’s “talent.”
But that wasn’t enough for the inmates running the
insane asylum of the parallel universe of CNBC, and other talking heads, modern
central bank directed fiat economy. China missed its growth numbers, not that
many believe China’s numbers, and the IMF downgraded the prospects for the USA
as well. Suddenly the Great Disconnect was called into question, and margin
call selling from the precious metals spilled over into everything else. Pile
on a senseless, murderous atrocity in Boston, and by the end of Monday April 15th
2013, the central banks had once again lost control of the markets they were
rigging as part of the Davos Spring “line” that the worst was behind us. QE had
worked, the US economy had reached a self-sustaining recovery, stocks were “cheap”,
QE programs might be slowed later in the year and ended entirely in 2014. Happy
days were here again! By the end of Monday April 15, we all now have to guess
where the next Lehman is, and which mining companies are now fatally impaired
from bullion to rare metals.
Below, coincidence or something more sinister? With
banks an unsafe place to hold much in the way of deposits, fiat cash under
attack from the central banks of America, Britain, Euroland, Japan and
Switzerland, I will swap some fiat currency for gold during the coming bullion fire
sale. Yesterday will have done nothing for main street, employment, and
recovery prospects in the real economy.
Deposits swap the ownership of your funds for a paper obligation from the bank!! Welcome counter–party risk!
Gijsbert Groenewegen Posted Apr 15, 2013
----Let me give you a taste of how reliable and
safe banks are and the counter party risk they represent! The largest Dutch
bank, ABN AMRO, defaults on physical gold deliveries to customers!!
A couple of days ago, an important milestone was
reached in the precious metals market as one of the largest banks in Europe,
ABN AMRO, defaulted on their gold delivery contracts, and informed their
customers there was no physical gold “available” for delivery. What does that
tell you about the physical shortages in the market and manipulation of the
gold market, do you need any other evidence!! Goldman just brought out a
forecast that targeted a gold price of $1,300/oz!?
ABN AMRO issued a letter to their gold contract
customers of failure of delivery, and that instead the bank will pay account
holders in a paper currency equivalent to the current spot value of the metal.
Voila counter party risk. If you have a piece of paper you don’t have anything,
“if you don’t hold it, you don’t own it”. It is all about physical possession.
ABN AMRO, the biggest Dutch bank, has informed it
clients that they will no longer be able (?) to take physical deliveries of the
gold they have bought through ABN. Instead they are offered money at the
current market rate for gold. Basically, instead of owning a risk free,
physical asset (a gold bar or a gold coin), the bank’s clients now own an
obligation from, a monetary claim on ABN AMRO.
More
ROSS NORMAN - Gold crushed by 400 tonnes or $20 billion of selling on COMEX
The gold futures markets opened in New York on Friday 12th
April to a monumental 3.4 million ounces (100 tonnes) of gold selling of the
June futures contract (see below) in what proved to be only an opening shot.
The selling took gold to the technically very important level of $1540 which
was not only the low of 2012, it was also seen by many as the level which
confirmed the ongoing bull run which dates back to 2000. In many traders minds
it stood as a formidable support level... the line in the sand.
Two hours later the initial selling, rumoured to have been routed through Merrill Lynch's floor team, by a rather more significant blast when the floor was hit by a further 10 million ounces of selling (300 tonnes) over the following 30 minutes of trading. This was clearly not a case of disappointed longs leaving the market - it had the hallmarks of a concerted 'short sale', which by driving prices sharply lower in a display of 'shock & awe' - would seek to gain further momentum by prompting others to also sell as their positions as they hit their maximum acceptable losses or so-called 'stopped-out' in market parlance - probably hidden the unimpeachable (?) $1540 level.
The selling was timed for optimal impact with New York at its most liquid, while key overseas gold markets including London were open and able feel the impact. The estimated 400 tonne of gold futures selling in total equates to 15% of annual gold mine production - too much for the market to readily absorb, especially with sentiment weak following gold's non performance in the wake of Japanese QE, a nuclear threat from North Korea and weakening US economic data. The assault to the short side was essentially saying "you are long... and wrong".
Two hours later the initial selling, rumoured to have been routed through Merrill Lynch's floor team, by a rather more significant blast when the floor was hit by a further 10 million ounces of selling (300 tonnes) over the following 30 minutes of trading. This was clearly not a case of disappointed longs leaving the market - it had the hallmarks of a concerted 'short sale', which by driving prices sharply lower in a display of 'shock & awe' - would seek to gain further momentum by prompting others to also sell as their positions as they hit their maximum acceptable losses or so-called 'stopped-out' in market parlance - probably hidden the unimpeachable (?) $1540 level.
The selling was timed for optimal impact with New York at its most liquid, while key overseas gold markets including London were open and able feel the impact. The estimated 400 tonne of gold futures selling in total equates to 15% of annual gold mine production - too much for the market to readily absorb, especially with sentiment weak following gold's non performance in the wake of Japanese QE, a nuclear threat from North Korea and weakening US economic data. The assault to the short side was essentially saying "you are long... and wrong".
China Stuck With Sub-8% Growth as G-20 Confronts Slowdown
By Bloomberg News - Apr 16, 2013 6:16 AM GMT
China’s longest streak of
expansion below 8 percent in at least 20 years is sending a message to
suppliers and investors around the world to get used to slower growth in the
second-biggest economy. The 7.7 percent increase in first-quarter gross domestic product from a year earlier marked the first time in data going back two decades that four periods in a row have seen growth of less than 8 percent. The figure released yesterday by the National Bureau of Statistics in Beijing was also the worst miss of analyst estimates since the third quarter of 2008, according to data compiled by Bloomberg
A
sustained shift to a lower-growth gear would affect everything from iron-ore
demand in Australia
to the fortunes of companies including carmaker General
Motors Co. (GM), who are counting on China to drive profits. It increases
challenges for global policy makers contending with Europe’s debt
turmoil and Japan’s
record monetary easing, with BHP Billiton Ltd. (BHP) saying GDP gains will
moderate toward 6 percent later this decade.
More
April 15, 2013, 11:33 p.m. EDT
U.S. dollar extends dive against yen
Yen gains as gold plunges, G-20 officials prepares to gather
LOS ANGELES (MarketWatch) — The U.S. dollar declined against
the Japanese currency Tuesday, extending a sharp loss triggered the previous
day by heightened worries about global growth and a plunge in gold prices.
The dollar USDJPY +0.79% bought
96.62 yen during Asian trading hours, building on its 1.9% tumble Monday to
¥97.09.
The yen was the top performer among major currencies Monday after Chinese
quarterly growth and monthly industrial production figures came in weaker
than expected.
The
data set sparked a selloff in commodities, including in gold for June delivery GCM3 +0.76% ,
which
plunged 9.3% on the Comex division of the New York Mercantile Exchange, the
biggest one-day decline since the 1980s.
The commodities-sensitive Australian dollar AUDUSD +0.63% fell
to levels not seen in a month after the economic reports from China,
Australia’s biggest trading partner. However, the Aussie pared those losses
modestly on Tuesday to fetch $1.0338, up from $1.0313 the previous day.
The yen had fallen sharply in the wake of Japan’s launch of an aggressive
monetary-policy program aimed at reflating its stagnant economy. Weakness in
the yen had prompted investors to borrow the currency at low interest rates and
then buy higher-yielding assets. But as gold prices and other markets sold off
Monday, the yen benefitted from the reversal of these so-called “carry trades.”
More
http://www.marketwatch.com/story/us-dollar-extends-dive-against-yen-2013-04-15?dist=lbeforebell
Back in the zoo called Euroland, the Greek Prime Minister took leave of his senses on Greek TV. Even he can’t believe what he preaches.
"Sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a break-up of the currency union as Greece pulls out, probably followed by other countries"Douglas McWilliams, chief executive of the Centre of Economics and Business Research.
Greece to sack 4,000 state workers to unlock bail-out cash
Greece will fire 4,000 civil servants this year as part of programme of austerity measures agreed with the EU-IMF “troika” as the condition for the next €8.8bn of payments in its €270bn bail-out.
The
redundancies will begin a savage round of job cuts in the Greek public sector,
with another 11,000 officials due to be sacked by the end of next year.
Greece
is in deep recession, GDP has contracted by 22pc since 2008 and unemployment
has spiralled to 27pc as the Greek government has implemented deeply unpopular
EU-IMF austerity measures or “fiscal adjustment” in return for loans.
“Our
society has reached its limits. But finally we are meeting our targets and the
programme is being improved,” said Antonis Samaras, the Prime Minister, in a
nationally televised address.
“Soon,
Greece will not depend on the memorandums. Greece will have growth, it will be
competitive and outward-looking. In other words, we will have a strong Greece.”
More
http://www.telegraph.co.uk/finance/financialcrisis/9995140/Greece-to-sack-4000-state-workers-to-unlock-bail-out-cash.html
We end with the only good news for the day. With reality surfacing in the Great Disconnect, the price of crude oil is falling again.
Oil falls below $100 as gold ticks higher
Brent crude on Tuesday slipped below $100 a barrel for the first time since July as concerns over slowing global growth sapped demand and Asian markets sank after a series of bomb blasts in Boston rattled confidence.
As markets digested figures showing manufacturing in the New York region expanded less than projected and China's economic growth unexpectedly eased, brent crude slipped 1.03pc to $99.60 a barrel.Data on Monday revealed that China's economy grew by 7.7pc in the first three months of the year, down from the previous quarter's 7.9pc. That fell short of many private sector forecasts that growth would accelerate slightly to 8pc.
China is the world's second-largest oil consumer, accounting for 11pc of global consumption last year, behind America at 21pc, according to the International Energy Agency.
"The market is mainly still reacting to the poor GDP numbers out of China, which has reaffirmed the trend that the world's second-biggest economy is slowing," David Lennox, resource analyst at Fat Prophets in Sydney, told AFP.
Brent's decline was mirrored by markets in Asia where the Nikkei slipped 13.82 points to 13261.49 and the Hang Seng dropped 153.81 points to 21,618.86.
----Oil aside, other commodities recouped some of their earlier steep losses, but remained volatile as concerns over the global economy's outlook crimped confidence.
More
http://www.telegraph.co.uk/finance/commodities/9996719/Oil-falls-below-100-as-gold-ticks-higher.html
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."Henry Hazlitt
At the Comex silver depositories Monday final figures were: Registered 41.62
Moz, Eligible 123.03 Moz, Total 164.65 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No crooks today. Today we extend
our sympathies and prayers to all those affected by the atrocity in Boston.
The monthly Coppock Indicators finished March:
DJIA: +119 Up. NASDAQ: +132 Up. SP500: +157 Up. Another Fed bubble grows. For the adventurous,
with true risk capital, ridding this new bubble is a calculated risk as long as
the central banksters pursue QE and ZIRP. But remember, getting out early and
near first is the name of the game in trading bubbles.
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