There is only one thing you need to know about gold: It is going to and through $3500.

We have witnessed market manipulation right here at these levels 9 times. This one will have no more success than the predecessors.

I know that respected minds in our camp feel accumulation is not the intention of the major gold banks.

Do you really believe these mammoth Bankster operations are really going to miss the great gold market's best move over the shortest time span? I find that impossible to conceive of. They did not miss it in the 70s and will not now.

Gold is going to and through $3500.

- Jim Sinclair, jsmineset.com

Back to Table of Contents

Back to Table of Contents

Technical Trading: VP Nominee - "Ryan Factor" Could Prove Bullish For Gold

13 August 2012, 10:20 a.m.

By Kira McCaffrey Brecht

(Kitco News) -Mon Aug 13-Comex December gold futures are little changed in early Monday New York trading. But, gold bulls are a persistent lot and the market keeps knocking at the door of key resistance at the top of the summer-long trading range.

This weekend's announcement in the U.S. regarding Republican presidential contender Mitt Romney's choice of running mate could have some potential implications for risk assets over the next several weeks to months. His vice presidential pick, Representative Paul Ryan, is a known hard-liner when it comes to fiscal issues. If the Romney/Ryan ticket pick up steam in the days or weeks ahead, this could increase market speculation that fiscal consolidation and cuts will be "front-loaded" quickly onto the economy with a Republican win in November.

That, in turn, could slow the U.S. economy as tax cuts and spending cuts are implemented early in a new administration, resulting in continuing slow growth or even the risk of recession in 2013. The U.S. Federal Reserve with its dual mandate to pursue price stability (think low inflation) and maximum employment would need to act according to its monetary policy mission.

Bottom line? Political policies that could slow growth are likely to be gold-bullish, as the Federal Reserve would need to keep its accommodative monetary policies in place, amid efforts to achieve its official mandates.

For now, gold traders need to keep a watchful eye on key near-term resistance levels.

The key level to watch on the upside for the December Comex contract remains the $1,633-$1,650 per ounce zone. If the bulls can muster enough strength to crash through that door, it will unleash the next wave higher in gold-market action.

Looking at price action since the mid-May low at $1,535.40, the gold futures contract has etched a minor pattern of higher daily highs on the chart-this is encouraging for the bulls. However, momentum readings are currently neutral. For example, the 9-day relative strength index is mid-range with a 60% reading-that is not a strongly bearish or strongly bullish signal.  

The gold market remains in a wait-and-see mode. The bulls are poised and ready to rocket higher at the first bullish fundamental trigger, which could be a variety of factors including fresh weak economic news from the U.S., or the globe. Stay tuned and keep an eye on economic headlines.  

By Kira Brecht, contributing to Kitco News  

Back to Table of Contents

Back to Table of Contents

EXECUTIVE ORDER PROMISES TO GIVE TOTAL CONTROL OF THE INTERNET TO THE DHS

AUGUST 14, 2012 BY THE DOC 

Obama has signed an Executive Order giving Chaz's DHS total control of the Internet.

Apparently the massive outcry against SOPA was meaningless as the fuhrer simply made a dictatorial decree.

In an event that was devoid of the usual pomp and circumstance, President Obama issued an Executive Order, (EO) that effectively handed the Department of Homeland Security, (DHS) the ability to take complete control over the internet, according to reports from VPNReviewz. According to privacy advocates like the EFF, EPIC, UsenetReviewz, and many others, this order gives the DHS the authority to take complete control of public, private, and non-profit facilities...giving them the ability to close off or limit any and all civilian communications. And, on the National Communications Systems official website, the order is further elaborated on, saying that the infrastructure, "includes wireline, wireless, satellite, cable, and broadcasting, and provides the transport networks that support the Internet and other key information systems."

Back to Table of Contents

In The News Today

August 14, 2012, at 1:00 pm
by Jim Sinclair

Jim Sinclair's Commentary

The EU situation is not something with the comfort of time to resolve the pressures.

Pressure without definitive resolve will move into crisis mode. This situation cannot be tolerated by markets into the Fall.

European banks under substantial pressure: Deutsche Bank report English.news.cn   2012-08-14 06:17:11

FRANKFURT, Aug. 13 (Xinhua) - European banks remain under substantial pressure on many operating fronts, a Deutsche Bank report said on Monday.

Revenue declines seem to become entrenched due to volatile capital markets and the low interest rate environment and initial improvements on the cost side have not nearly been able to compensate for those reduced earnings, said the report.

The report pointed out that the 20 largest banks in Europe reported weak results for the first half of this year. The banks have posted declines in net interest income, fee income and trading income.

The Deutsche Bank sees the further strengthening of capital levels of banks as one of the few bright spots. "In spite of the application of Basel 2.5 rules, Core Tier 1 ratios are now 11.2 percent on average," said the report.

More...

Jim Sinclair's Commentary

The purpose of the US Student Loan program is to avoid the major unemployment that would occur if students were in the employment pool.

All this fancy dancing hits the fan as student loans go out of sight in terms of amounts and loan failures.

Everything is manipulated to the point that is seems the Dutch story of Hans Brinker is the strategy of Washington and Europe with every challenge. A young boy in this story saved a dike by putting his fingers and toes into all the leaks.

Very soon the amount, frequency and size of the financial leaks we are dealing with will overwhelm all the kings men now trying to save it.

16 French police wounded in overnight clashes with youths English.news.cn   2012-014 21:12:24

PARIS, Aug. 14 (Xinhua) - Sixteen police were injured during violent clashes with youths overnight in Amiens, a city in northern France, local media reported on Tuesday.

About 100 youths shot at the police, torched up to 20 cars, a leisure center and a nursery school, the news channel BFMTV reported. The violence was sparked by tension over spot police checks on residents, according to BFMTV.

The wounded police were injured by buckshot, mortar and throwing projectiles and damages amounted to over 1 million euros (1.23 million U.S. dollars), it added.

Police reinforcements were being dispatched and Interior Minister Manuel Valls was due to visit the Amiens suburb, which has already been identified as needing extra policing by the government.

French President Francois Hollande pledged "to mobilize all the resources to fight against the violence" and promised higher funds to improve security mainly in the country's poor cities.

More...

Jim Sinclair's Commentary

If you do the crime you no longer do the time, but rather pay the fine.

That is as long as you are a member of the Good Ole Boys club or Yale's Skull & Bones fraternity.

Standard Chartered, New York regulator reach $340 million settlement

By Karen Freifeld

NEW YORK | Tue Aug 14, 2012 2:25pm EDT

(Reuters) - Standard Chartered Plc has agreed to pay $340 million to settle allegations that it hid transactions with Iran from regulators, the New York Department of Financial Services said on Tuesday.

In addition to the civil penalty, the bank agreed to install a monitor for at least two years to evaluate the bank's money-laundering risk controls in its New York branch, the department said in a statement.

The department also said it had adjourned a hearing set for Wednesday at which it had called on Standard Chartered to demonstrate why its New York state banking license should not be revoked.

"The parties have agreed that the conduct at issue involved transactions of at least $250 billion," the department said in a statement.

The bank did not immediately return a call seeking comment on the settlement.

More...

Back to Table of Contents

Predicted in Summer 2011 Trends Journal:

Paul Ryan Pick Political Suicide

KINGSTON, NY 14 August 2012 - One year ago, in the Summer 2011 Trends Journal, we focused on the 2012 Presidential election. At that time, we analyzed the strengths and weaknesses of both President Obama and the cast of Republican challengers.

Trends Journal subscribers were provided with yet another vivid, important insight into "History Before it Happens" as we spelled out, in great detail, why the Republicans were on a political suicide mission and singled out Paul Ryan as the chief suicide strategist. Even though he was not in the running, we devoted an entire story to his policies, his credentials (or lack of them) and the consequences the GOP would suffer by adopting his policies.

Thus, a year before the media was looking closely into Ryan's past and his qualifications for designing a massive budget deficit reduction plan, we had singled him out as THE politician whose views and values best represented a Republican platform that led us to forecast an Obama victory in October.

In that Trends Journal we wrote:

Not Playing with a Full Deck In the Spring of 2011 Republican hopefuls were on a political suicide mission. Yes, entitlement excesses had to be addressed, but making that the main focus of their campaigns was a strategy that might have been devised by insidious Democratic infiltrators ... .

The Republican final solution was to reduce and/or eliminate "entitlements" - a word that had taken on a pejorative meaning. How dare people who had worked all their lives, acted responsibly and paid their taxes, feel entitled to anything from their government? Health care, elder care ... Republicans were running on a "we don't care" platform. And, if they got their way, any care the people did receive would be less than what they got before and would come from the private sector; the health industry that gives generous campaign contributions (i.e., bribes and payoffs) to politicians for passing legislation that will further enrich them.

Another main Republican plank was the reform of Social Security. Under a complex partial privatization plan crafted by Wisconsin Representative Paul Ryan (Roadmap For America's Future), Social Security and Medicare benefits would be cut, cost-of-living increases trimmed, and the retirement age for those under 55 would be "modernized" to eventually reach 70. At the same time, the Social Security agency itself would be significantly downsized to a level of predictable inefficiency.

The end result of their "Roadmap" would be to steer as much tax money as possible away from the public sector and into the private sector. It was passionately held GOP Gospel that corporations operated more efficiently than government bureaucracy.

The third major plank of the Republican platform called not only keep in place the Bush-initiated and Obama-perpetuated tax policy that gave breaks to the richest, but under the Ryan plan, to further lower the top tax rate from 36 percent to 25 percent. Incredible as it may sound, the GOP genuinely believed that the more the very rich made and the less they paid, the better off everyone else would be.

The Republican platform boiled down to: "What can we do to make the biggest bigger and the richest richer?" Not surprisingly, for the small percentile that stood to benefit, the Republican platform was attractive.

Just as we wrote "History Before It Happens" before it happened, so now we are forecasting "The Next Four Years: What to Expect, What it will Mean." Among the broad range of socioeconomic and geopolitical trends and forecasts, we will also be shining our penetrating spotlight on The Presidential Reality Show with insights and analyses that you won't find anywhere else.

Subscribe to the Trends Research Journal

Back to Table of Contents

Gold Up-Date - August 14, 2012

Many Factors are conspiring to create the Perfect Scenario for Gold Prices to go Much Higher.

The latest economic data released this morning showed slightly better than expected GDP data from France and Germany. French GDP growth came in flat, which was better than expectations of a contraction of 0.1% quarter-on-quarter. And, Germany, Europe's biggest economy grew by 0.3% between April and July, compared to analysts' forecasts of 0.1% mainly due to its strong exports. However, overall Eurozone GDP data for the second quarter shrank by 0.2%.

Meanwhile the latest GDP figures from Japan were weaker-than-expected. Japan Q2 GDP increased by only 0.3% quarter-on-quarter which was below expectations of an increase of 0.6%. And, the Greek economy, struggling in a fifth year of recession, shrank by 6.2% in the second quarter compared with a year earlier, official data showed on Monday.

The latest official data, made public last week, showed unemployment in Greece at a record 23.1% for May, with almost 1.15 million people registered as unemployed.

Although the 17-nation avoided a technical recession after a flat GDP reading in the previous quarter, several peripheral countries have slipped into recession and the situation in these countries looks set to get even be worse as the governments implement additional austerity measures.

In the US central bank's most recent Federal Open Market Committee statement, it noted the elevated unemployment levels and decelerated economic activity, but simply said it "will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labour market conditions in a context of price stability." And, of course we all know that in spite of the bold statement made by ECB president Mario Draghi, in which he declared that the central bank is "ready to do whatever it takes to preserve the euro, and believe me, it will be enough," no action has been taken. However, many market participants have interpreted these statements to signal that some kind of coordinated action by central banks is looming and that these central banks are likely to resume large money printing programs sooner, rather than later.

Contrary to the rhetoric we have heard from global central bankers and other financial leaders, there is enough empirical evidence to show that the economies of these two regions are contracting and the unemployment rate remains high, which means their monetary policies have been a dismal failure in stimulating economic growth. It is also amazing that they don't seem to understand that good GDP growth comes from a vibrant economy in which productivity increases due to good demand, and not from falsely inflated asset prices or cheap money that banks can borrow to buy additional sovereign debt. Nor does it come from a myriad of austerity plans. Nevertheless, I have no doubt these banks are currently cooking up their next move which will no doubt be another round of some form of quantitative easing.  But, as long as the current world order and corrupt, plutocratic, debt laden fiat monetary system continues along this path, we are going to see an increasing loss of confidence in paper money. This will lead to an increase in interest in gold.

Gold is a monetary metal whose price is determined by a myriad of factors that include inflation, fluctuations in the dollar, currency-related crises, interest rate volatility, international tensions, global equities, investor sentiment and increases or decreases in the prices of other commodities. The price of gold also reacts to supply and demand changes. 

Gold is different from other precious metals such as platinum, palladium and silver because the demand for these precious metals arises principally from their industrial applications. Gold's value does not arise from its usefulness in industrial or consumable applications. It arises from its use and worldwide acceptance as a store of value. Gold is money.

In contrast to other commodities, gold does not perish, tarnish or corrode. Gold mined thousands of years ago is no different from gold mined today. Therefore, gold existing in the aboveground gold stock is interchangeable with newly mined gold.

Today, many factors are conspiring to create the perfect scenario for gold prices to rise: a faltering global monetary system, a currency war, expansionary monetary policies, a long term decline in the major fiat currencies in particular the US dollar, low interest rates, a spike in food and oil prices, unsustainable sovereign debt, geo-political tensions, domestic unrest, a mammoth US trade deficit, and America's status as the world's largest debtor nation. But in addition, we are seeing an increase in the demand for physical gold especially by central banks as well as China.

In the last two years we have seen a complete reversal of attitude towards gold from many central bankers. For most of these central banks traditionally the dollar has been approximately 60% plus of their foreign reserve assets. And, the euro has probably constituted for another 20%. But now as these countries around the world see what the Europeans and the U.S. Fed are doing, many of these central banks have shown a keen interest in gold.

Last year, central banks purchased more than 400 tons of gold, the most in nearly five decades, according to the World Gold Council. IMF data shows that central banks were again net buyers in April with Turkey and Philippines being the largest buyers of gold.

The Philippines increased their gold holdings significantly by 32.13 tons to 194.241 tons in March - a 17% increase in their gold reserves in the month. 

It was the single largest addition Philippines has made since September 2008. They have been pretty consistent buyers of gold over the last few years, but the 17% increase in April was another big rise.

Turkey expanded its gold reserves by 29.7 metric tons in April, putting their bullion reserves at 239.3 tons meaning that Turkey increased their gold reserves by 14% in April. The central bank also doubled the share of lira reserves banks can hold in gold to 20%.  

Mexico increased gold holdings by 2.92 tons to 125.5 tons in April. 

Kazakhstan raised gold holdings by 2.02 tons to 98.19 tons in April. 

Ukraine upped gold reserves by 1.4 tons to 30.607 tons in April. 

Sri Lanka raised gold reserves by 2.177 tons to 7.807 tons in January. 

In July, South Korea, the world's seventh largest Forex reserves holder, reportedly bought 16 tons of gold. And, Russia has consistently added god to their holdings almost every month. 

While the gold tonnage demand from central banks in recent months has been significant, gold remains a tiny fraction of their foreign exchange reserves and therefore the trend is sustainable and indeed may accelerate.

Central banks are buying gold because they see it as sound money.  Price is not a determining factor in central bank buying. They are more likely being guided to allocating a percentage of their overall foreign exchange reserves into gold bullion.

In the meantime, as central banks continue to increase their holdings of gold, China remains very secretive, so we don't know really if they're buying or not. However, I am positive the Chinese government is accumulating as much gold as they can. And, we are also seeing more Chinese invest in gold bullion bars and coins.

It was only two weeks ago, that the price of gold struggled to breach the key resistance of $1600 an ounce. Now it has remained above this level for enough time to consider it to be the new support level. Thus any dips to this level should be bought while we await a break above the $1625 an ounce level, which I believe, will occur shortly.

TECHNICAL ANALYSIS

Towards the end of July gold broke above its 50 day MA which has turned positive. It is now attempting to breach the $1625/oz. level. I believe we will see a break of this resistance followed by a move to $1650/oz.  

By David Levenstein   

Back to Table of Contents

Charting Gold

Tuesday August 14, 2012 14:45

"Some men see things as they are and say why - I dream of things that never were and say why not."

If George Bernard Shaw were around today, he might apply his famous quote to the price of gold. Spot gold is trading near it January levels, and down from its high for the year at 1792 back in February. As GBS might ask "What's been holding the price of gold back?"

The simple answer is there are no more buyers than sellers. Owners of the yellow metal are not selling, and others are not buying right now. That has not been the case throughout the year, so far. The buyers swarmed in back in February to bid the price up to nearly $1800/oz. And there have been some intermediate dips and rallies over the past several months. But here has not been enough selling pressure anytime this year to push the price of gold down below 1571 (the opening price on January 3rd) for very long.

The monetarist point to the growth in the money supply as a major factor contributing to the high gold prices.  Since 2009, the Washington money printing Triumvirate (Fed, Treasury, Congress) have flooded the system with over $4 Trillion in new paper money. Although the Fed has not committed to another round of Quantitative Easing this year, it has continued to expand its balance sheet in subtle ways. For example, the Fed increased its liquidity swap lines with other central banks to $31.02 billion last week, compared with $27.23 billion the week prior. More importantly, the banks are spilling more money into the economy from their $1.7 Trillion ocean of excess reserves. Adding new money debases the currency in circulation, robbing purchasing power for anyone who buys with Federal Reserve Notes. Gold benefits from the weaker Dollar.

Stocks also benefit from the easy money regime. Just the hint of QE3 is enough to send stocks skyward. Chairman Ben continues to entice but has yet to succumb. But the rumor of added stimulus has buoyed the S&P 500 above 1400 for the first time since March.

Some technical analysts have identified several bullish breakouts in the gold charts. On July 31st, readers of these pages saw what resulted in a failed breakout of gold from a symmetrical triangle pattern at the 1612 level. We suspected the breakout might revert based on the lack of confirming volume, a tell-tale doji candlestick pattern and Ichimoku Kinko Hyo indicators that pointed to sideways price movement. We can see now that prediction proved correct. But what are the charts telling us about the price of gold today?

The failed symmetric triangle pattern for spot gold has now formed an ascending triangle pattern. This is a bullish pattern that portends a move up on a valid breakout from the top trend line level, which in this case is 1635. Typically, the ascending triangle usually forms during an uptrend as a continuation pattern.  Although there are instances when an ascending triangle signals a reversal at the end of a downtrend, more often it forecasts a continuation of the established trend. All ascending triangles indicate bullish accumulation.

We can see that higher lows have established the ascending trend line at the bottom of the triangle. The apex extends beyond current price action. The target price from a valid breakout is calculated by projecting a line parallel to the ascending line, from the beginning of horizontal trend line, forming another right triangle. The target price is indicated along this target line at breakout. If a valid breakout had occurred on yesterday's closing price, the target price from the pattern would be 1725 or so. The lower volume during the accumulation phase is a good indicator (highlighted by the heavy line).  A spike in trading volume at breakout helps to validate the bullish ascending triangle pattern.

Will gold breakout of this bullish chart pattern?  We shall see. The Ichimoku Kinko Hyo indicators confirm the continuation pattern with accumulation.

We can see on the daily chart above that all Ichimoku indicators are bullish for spot gold.

Back to Table of Contents

Stocks

Our call for a market correction has been late in coming, with the 100 largest cap stocks (OEX) recording a multi-year high last week, on a multi-year low in volume, totally uncharacteristic of bull markets, but not uncharacteristic of manipulated markets aided by the PPT. A spike in our Big Block/Volume ratio -- the highest in 6 months -- strongly suggest institutional bailout at these atmospheric levels. Additionally, a bearish Weekly Squat was generated, with an astounding 85 week low in weekly range. While the market has only tacked on 1.4% since our call 2 weeks ago, the complacency generated is jaw dropping with a 71 week high  in our Call/Put ratio. Because of the longevity of bullish momentum that's built up, it's now likely the initial correction will be modest, taking SPY to 138.88 - 137.25, before another (and final) attempt at new highs. Our "weight of evidence" remains heavily tilted to the bearish side, led by our Accumulation/Distribution readings.

Gold

The miners led the charge last week gaining 5.3%, slightly outpacing bullion. Our call for a gold breakout is imminent, but first a minor pullback is likely. GLD traded precisely to the embarkation line, (157.75) where the intermediate term trend turns higher, and pulled back on the close to 157.18. The pullback should be contained to 156.05 (1610 - 1605 spot).

Dollar (UUP)

With the 3rd consecutive weekly close under 22.80, the Dollar (UUP) has, once again, realigned with its bearish long term trend. UUP support exists at 22.49 - 22.32, with critical 22.02 as the last line of defense against a test of historic lows. Range trading can be expected until critical mass hits around mid September.

Interest Rates (TBT)

Rates turned higher last week, confirming the higher 13 day trend. Near term target is 16.33, which will take long rates to a 4 month high. Longer term, as inflationary expectations take hold, instigated by the enormous amount of money printing that's taken place, 17.97 is on our radar, a 28% rise in rates from the low.

Bernie Mitchell

www.feargreed.com

Back to Table of Contents