Miles Franklin Daily Gold & Silver Summary

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Market Recap for

Wednesday December 19, 2012


GOLD

 $1665.90 Down $5.00

 

GOLD - one year ago today

 Up $72.00

 

SILVER

 $30.98 Down $0.66

 

SILVER - one year ago today

 Up $2.18

 

PLATINUM

 $1587.00 Down $5.00

 

PALLADIUM

 $691.00 Up $7.00

 

HUI

 429.71 Down 3.04

 

XAU

 160.91 Down 1.63

 

DOLLAR INDEX

 79.39 Up 0.06

 

EURO

 1.3204 Down 0.0023

 

DOW

 13251.97 Down 98.99

 

SILVER TO GOLD RATIO

 53.77 to 1

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Read more articles from Ranting Andy Hoffman
and Bill Holter on the Miles Franklin Blog site.
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Miles Franklin seeks creative ways to partner with its clients to market Precious Metals to nationwide audiences.  If you are interested in hosting a private meeting - or sponsoring a Webinar presentation - with Andy Schectman, President of Miles Franklin, and "Ranting Andy" Hoffman, Marketing Director, please inquire via email to aschectman@milesfranklin.com or ahoffman@milesfranklin.com; or via telephone at 800-822-8080. 
quoteQuotes of the Day

What is important to remember is that no individual trader or individual firm can control (manipulate) a market's price for very long. Even the major central banks of the world have tried manipulation in the currency markets (central bank intervention to the tune of billions in currency) with only marginal initial success, and not a lasting impact. Regarding any longer-term conspiracy to manipulate the price of gold or silver (lower), I cannot say for sure if that is the case or not-because I have never had the time to completely research the matter. However, I do know that by looking at the longer-term monthly chart for gold I see that prices are presently in a solid 11-year-old uptrend and that gold has been one of the best upside market performers of any asset class for the past 11 years. If some big outfit has been trying to manipulate gold to the downside, it has not worked very well for them the past 11 years.

- Jim Wyckoff, P.M. Kitco Metals Roundup, December 18 2012

 

 

The Great Train Robbery in Gold and Silver

We were discussing gold over dinner. It sure looks like the elitists are about to attempt the great train robbery in gold.

All the rumors are crap. This is the biggest manipulative play in gold ever. The only good part is as soon as the criminals have their positions filled, we are off to $3500 and above.

- Jim Sinclair, In The News Today, December 19 2012


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daviddeskFrom David's Desk 

David Schectman 

 

My Error Is Not In The "Number," But In The TIMING.

Yesterday, I received the following email:

Guys I've been following your blogs for over two years now. I respect your views and insights into the gold and silver market. But it has to be said last year you all predicted at least $2000 an ounce gold and $50 an ounce silver by the end of this year. Well it looks like you're all wrong and about that.  Gold and silver won't go to predicted prices whilst the cartel JPMorgan and Co. are manipulating the market. This has been going on for years and years. They will never let the prices rise, so stop kidding yourselves and everyone else. Cause your wrong unfortunately just admit it.  The system is corrupt in the banksters favor...

 

This is an excellent email and I suspect the author speaks for many of our readers. So, let me address his comments.

 

Yes we did predict $1900-$2000 gold by the end of this year and yes, we thought silver could hit $50. O.K., I admit it, I was wrong. But my error is not in the "number," but in the TIMING. That, dear readers, is the risk of predicting a price and a date. But that's no reason to stop predicting. Just don't bet the farm on our predictions, at least not our SHORT-TERM predictions. I stand firm, along with Jim Sinclair, that we WILL SEE gold at $3,500 or higher within the next three or four years at the outside. That will translate into $75 - $100 silver.

 

As far as the comment "they will never let the prices rise," well, I strongly disagree with this comment. JPMorgan and Goldman Sachs before JPM have shorted and manipulated gold and silver relentlessly SINCE 2001! And guess what - gold still managed to rise from $252 to a high of over $1900, and currently just under $1700 while silver moved up from $4 to $50 and is now a bit above $30. If the "boyz" had control of the gold and silver markets, why did gold rise seven-fold and silver eight-fold in the last decade? The fact is, JPM can move the market in the short-term, but cannot hold back the price over time, nor can they stop the power of the bull market. No one can, not even the central banks.

 

JPM rules in the COMEX pits but not in the real PHYSICAL world. Every time they push the price down, buyers from India and China, not to mention the central banks, rush back in and buy the dips and up goes the price.

 

Yes, the system is corrupt and it has been since the start of the bull market, but that doesn't mean that the bullion banks and funds can control the price beyond an occasional raid. Even though 2008 was, by my standards, a bad year for the metals, gold will still finish the year UP over $100 and silver is up even more, on a percentage basis. If that is "controlling the market," I say, let them keep controlling the market.

 

I urge the author of the email to get back in touch with me in March and let's see if my predictions look bad then? Sure, I may be off a few months, but I will not be wrong. Either cut me some slack or ignore my predictions.

 

My track record has been pretty good for a decade but not perfect. As our friend Ed Steer (and Ted Butler) says, "Gold and silver will rise when JPM is ready to let the price rise." They make money by playing both sides of the trade. You can't always be JUST SHORT the market; they knock the price DOWN so they can buy gold and silver back cheaply. Notice I said, "buy back," and they do.

 

You are falling prey to their strategy of turning gold and silver bulls into doubters. If you give way to this, they win and you lose. I'll finish this up with a quote from Jim Sinclair on Wednesday - it sums it all up:

What is happening now is the Great Train robbery whereby the Goldmans of this world will take a huge long position in gold under the beard of manipulation and control of popular gold guys plus financial TV.

Please tell our Euroland friends to simply hunker down because this is as much of a passing cloud as was every single reaction since $248. Once these blackards take all the CIGA gold they can get, we are off to $3500 and above. This is not something I think. This is something I know.

-Jim Sinclair, Jim's Mailbox, December 19 2012

And here is one more bit of information that you should consider, before throwing in the towel and finding fault with those of us who know better and refuse to...

 

The indicators technically are at the same levels as 2008. A trigger to reverse course is very near.

Sharks are buying at big discounts and bargain hunting time is here. I'm sure the extremes will work on both sides.

- CIGA Luis Ahlborn Sequeira, Jim's Mailbox, December 19 2012

Just to be sure you understand WHY gold is not living up to "expectations," for now....

How To Read The Negative Pressure Over Gold And Gold Stocks

December 18 2012

By Jim Sinclair

 

Dear Jim,

How should I read the negative pressure over gold and gold stocks? What's going to change this negative scenario?

Respectfully,

Arlen

Dear CIGA Arlen,

This is capitulation everywhere. This event has been a manufactured market move since $1800, with clearly planned and executed intervention. The gold price takedowns during low volume periods internationally is a known price moving only tactic.

I simply shut off the machine because all the regular causes for the gold price will make themselves effective with time. A manufactured market event will not change the trend. Even the most professional can be reduced to sheeple by their emotions.

I refuse emotions and emotional people in a market context. To save yourself from all this that has happened and will continue to happen requires commitment and courage.

You have it or you do not. Admit who you are and act accordingly.

Like every mistake made by Westerners, what you see today is simply driving gold into Asian control.

Jim

 

Now, on to the newsletter...

 

In today's newsletter I lead off with a few insights from Jim Willie. Jim writes on of the finest financial newsletters on the market and I highly recommend it. Ranting Andy Hoffman also loves Willie's work. We both subscribe to his Hat Trick Letter.

 

 

Sincerely,

 

David Schectman

Miles Franklin

 

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goldhighlightsGold Highlights

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Miles Franklin and BFI Consulting of Zurich, Switzerland, have partnered for the past two decades in offering access to offshore annuities and managed accounts.  Born at roughly the same time in the early 1990s, both firms have successfully PROTECTED clients via quality, secure, private accounts holding PHYSICAL Precious Metals, annuities, and other managed products.  BFI is a global leader in the sale and maintenance of Swiss annuities and privately managed accounts - particularly to U.S.-based clients; and through its Global Gold subsidiary - utilizing worldwide storage leader Via Mat - offers international Precious Metal storage services in Switzerland, Hong Kong, and Singapore. As with Miles Franklin's Canadian offshore storage program, Global Gold offers allocated storage OUTSIDE the banking system.  


INTRO MONETARY FRAGMENTS

A SOCIAL CATASTROPHE FOR THE UNITED STATES AWAITS. POVERTY AND HUNGER WILL PREVAIL. THE PROOF OF THE UNITED STATES FALLING INTO THE THIRD WORLD IS ELUSIVE.

The data screams of several pathways with growing legions of members. The number of Americans receiving Food Stamps reached a new record in August this year, at 47.1 million people. That is two of every 13 people, according to the USDept Agriculture. Fully 20% of households in the state of Mississippi are on Food Stamp aid. The figure has risen by 50% since October 2008. A bill is before the USCongress to slash $billions from the program. The official calculation measures 49.7 million people living beneath the poverty line in the United States, or 16.1% of the total population, according to the US Census Bureau. In 2006 there were 37.3 million people in poverty and 12.5% was the official poverty rate. The California poverty rate is at 23.5%, nearly one in four residents in the once highly prosperous giant state. The Census data revealed that median household income in America, adjusted for inflation, fell by 1.5% from the previous year. The figure was 8.1% lower than in 2007 and 8.9% lower than its high point in 1999. Factor in a realistic CPI inflation rate, and the income decline in the real world is much worse. The income of the typical US family is falling every single year.

In 2011, jobless insurance helped 26 million workers, and lifted 2.3 million people, including more than 600,000 children, above the poverty line. However, imposed limits on jobless aid are taking a toll. In 2010, about 67% of people counted in the UGovt official unemployment figures received unemployment benefits. By 2011, only 54% received jobless aid. This year the figure fell to only 45%, according to the National Employment Law Project. The federally extended unemployment benefits are due to end by December 31st. They were implemented in response to a powerful economic recession and chronic jobless condition. When the program is ended, two million people will be cut off, at which time the standard aid will cover only 26 weeks of jobless insurance. Let it be known that the Jackass was laid off from a good professional staff position in August 2003, at which time the groundwork was laid for launching the Hat Trick Letter. See the Global Research article (CLICK HERE).

THE FACE OF WHAT SYSTEMIC FAILURE LOOKS LIKE IS SLOWING BECOMING APPARENT. THE PICTURE SLOWLY BECOMES MORE CLEAR.

The vast insolvency permeates the entire US nation, well described and even forecasted within the Hat Trick Letter. Banks no longer function as credit suppliers, nor as company incubators. Households are largely wiped out of home equity, most life savings stuck in the stock market and bond market. The USGovt is indescribably bankrupt, that fact more evident to the masses with each passing year. The endless war has ransacked the nation, the decades of war having causing at least half of the entire $17 trillion in accumulated debt. Yet the military budget remains as sacred as the wars. Factories have in the main been shut down or dispatched to Asia where labor is cheaper and unions are less demanding. The central bank policy is to offer money at zero cost for the connected tribes and to purchase unlimited bonds to keep the system running. However, the system is failing.

The face of failure will be many sided. There will be supply line disruptions in food and commodities from the vast Mississippi River artery. There will be storms and earthquakes, which add to significant disruption and economic damage, whose origins are suspicious. There will be rising cost of living for the entire worker class, with angry feedback in form of strikes. This is the fuse to light the powder keg in my view. The official US security stance against terror threats contributes to isolation on a global level. There will be USDollar currency caught in isolation, not widely accepted by foreign suppliers, forcing extreme economic duress. The isolation grows each month, hastened ironically by the Iran sanctions. There already is broken USGovt apparatus on debt management, with a possible failure to raise debt limit soon. The forced across the board USGovt budget cuts will push the system into a grand stumble. The effect on the USEconomy will be profound. The recession has been a constant at minus 4% to minus 6% annually since 2008 in the world of reality with proper accounting.

Expect deep anger and resentment among the population for political class, not only the banker class. The awareness of banker control of the USGovt is the newest element in popular movements laden with demonstrations. But the right to demonstrate and the right to speak freely have been rescinded by edict decrees. The business sector frustration with the central bank and its monetary policy has reached a critical level, enough for numerous groups to solicit the White House and Congress, but to no avail. There is wide recognition of crime and impunity at the highest levels of national leadership. The most vulnerable points in my estimation are gasoline stations and grocery supermarkets. These are the locations of violence to erupt out of public need and desperation. The wild card is a rash of cancer from Fukishima radiation that spreads across entire northern states, but with zero reporting by the news networks. The FEMA Camps should begin to fill very soon, as the economy disintegrates further and disorder grows worse. The level of public anger is rising fast.

THE FACE OF WHAT SYSTEMIC FAILURE LOOKS LIKE IS SLOWING BECOMING APPARENT. THE PICTURE SLOWLY BECOMES MORE CLEAR.

The vast insolvency permeates the entire US nation, well described and even forecasted within the Hat Trick Letter. Banks no longer function as credit suppliers, nor as company incubators. Households are largely wiped out of home equity, most life savings stuck in the stock market and bond market. The USGovt is indescribably bankrupt, that fact more evident to the masses with each passing year. The endless war has ransacked the nation, the decades of war having causing at least half of the entire $17 trillion in accumulated debt. Yet the military budget remains as sacred as the wars. Factories have in the main been shut down or dispatched to Asia where labor is cheaper and unions are less demanding. The central bank policy is to offer money at zero cost for the connected tribes and to purchase unlimited bonds to keep the system running. However, the system is failing.

The face of failure will be many sided. There will be supply line disruptions in food and commodities from the vast Mississippi River artery. There will be storms and earthquakes, which add to significant disruption and economic damage, whose origins are suspicious. There will be rising cost of living for the entire worker class, with angry feedback in form of strikes. This is the fuse to light the powder keg in my view. The official US security stance against terror threats contributes to isolation on a global level. There will be USDollar currency caught in isolation, not widely accepted by foreign suppliers, forcing extreme economic duress. The isolation grows each month, hastened ironically by the Iran sanctions. There already is broken USGovt apparatus on debt management, with a possible failure to raise debt limit soon. The forced across the board USGovt budget cuts will push the system into a grand stumble. The effect on the USEconomy will be profound. The recession has been a constant at minus 4% to minus 6% annually since 2008 in the world of reality with proper accounting.

Expect deep anger and resentment among the population for political class, not only the banker class. The awareness of banker control of the USGovt is the newest element in popular movements laden with demonstrations. But the right to demonstrate and the right to speak freely have been rescinded by edict decrees. The business sector frustration with the central bank and its monetary policy has reached a critical level, enough for numerous groups to solicit the White House and Congress, but to no avail. There is wide recognition of crime and impunity at the highest levels of national leadership. The most vulnerable points in my estimation are gasoline stations and grocery supermarkets. These are the locations of violence to erupt out of public need and desperation. The wild card is a rash of cancer from Fukishima radiation that spreads across entire northern states, but with zero reporting by the news networks. The FEMA Camps should begin to fill very soon, as the economy disintegrates further and disorder grows worse. The level of public anger is rising fast.

A SYSTEMIC BREAKDOWN IS COMING. NEITHER CENTRAL BANKS NOR LEADING GOVERNMENTS CAN PREVENT IT. NO ACTIONS TO DATE CONSTITUTE A REMEDY. NO SOLUTIONS ARE BEING ATTEMPTED, ONLY POWER PRESERVATION BY THE BIG BANKS, STILL NOT LIQUIDATED ALTHOUGH HOLLOW GIANT STRUCTURES. THE SYSTEM IS STUCK UNTIL COLLAPSE.

When USFed Chairman Ben Bernanke announced in the second December week that the official interest rate would remain near 0% forever and a day, and that bond purchases with toxic new money would continue without limit, he showed the face of a failed institution, and a failed central bank franchise system. Witness a failed state, since the bankers wrested control at the staged 911 quickening. Bernanke even made vague comments to disavow blatantly wrong forecasts, since his miserable track record reads the exact opposite of the Jackass. He looks tired, frustrated, out of ideas, annoyed by the demonstrated proof of his PhD thesis falsity. Recall this man loudly urged that the subprime mortgage crisis was contained in 2007, when the Jackass rebutted that the bond crisis was absolute (sure to reach all bonds). Perhaps he should take a long rest at Jackson Hole. He must realize the job was offered to him as a bagman, to preside over the systemic failure and monetary system collapse. Heightened liquidity is no solution to a dreadfully insolvent system, a basic tenet that escapes him and most of his incompetent band of high priests.

Bernanke (Magoo Jar) frustrated

Those at the Syndicate helm cannot hike interest rates, or else collapse the system. They cannot stop bond purchases, or else collapse the system. They cannot cut off big bank bond redemptions, or else collapse the system. They cannot stop filling the Fannie Mae and AIG black holes, or else collapse the system. They cannot end the Dollar Swap Facility for foreign usage, or else collapse the system. However, the system will collapse anyway, from its own sheer weight and the eroding pillars they constructed. Expect broad seizures in numerous chambers, from the bond market to the currency market to the big banks to trade settlement to oil shipments to supply chains. My best source, a brilliant man with keen insight and contacts on every continent, commented to my broad collapse unavoidability comment. He said, "To be sure, the system in its entirety will collapse and then it is over, once and for all. But the Gold market will survive in an un-manipulated fashion. Gold will serve as the backbone of the new commodity backed money with all other commodities grouped and layered around it. Investments in Gold will not just survive the collapse, they will thrive."

Carry on with the self-protection in precious metals, with a deferral of all paper based securities destined to be flushed. A great evaporation of paper wealth is in progress. A bright colleague connected to the Chicago pits added a great comment. He said, "The real indication of what is coming is that the announcement of a half $trillion of unsterilized money creation had no impact last week, after $2 trillion of past bond purchases also had no impact." No solutions lie in their empty bag of tools.

Subscribe to Jim Willie's Hat Trick Letter for the full article.


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Reliable Financial Advisors

In a world of heightened speculative and counterparty risks, finding someone you can trust may be the most important research you do. Miles Franklin does not sell stocks, but is frequently asked if we know of reputable, full-service brokers. WE DO NOT CONDEMN OR CONDONE EQUITY INVESTMENTS, but want investors with such interest to be honestly and competently handled.

In resource stocks, the folks at Sprott Global Resource Investments - managed by Eric Sprott and Rick Rule - are the best in the business. In various capacities, we have worked with Eric Angeli, Jeff Howard, Kenton Toews, Mishka vom Dorp, Jason Stevens, Anthony Marsh, and Andrew Jackson - all of whom are diligent, ethical, and knowledgeable. That style of business is indicative of the reputation Global has built over the past 25 years. You can feel comfortable with any of their brokers, reachable at 800-477-7853.

For all other stocks - including large cap gold, silver and other resource equities - Nick Shermeta, from Northland Securities here in Minneapolis, is as trustworthy and knowledgeable as they come. Nick is a Senior Vice President with more than 20 years experience, but will treat you as if you were his only client. You can reach Nick at 612-851-5908, or by email at nshermeta@northlandsecurities.com.

The common denominator is decades of Wall Street experience, which should give you comfort that well-seasoned and weathered hands are helping manage your portfolio. Notably, we do not receive compensation for these recommendations. We just want you to know that if they are good enough for us, they should be good enough for you too.

hunterGreg Hunter (usawatchdog.com)

We're Going To Be In A New Recession-John Williams

19 December 2012

By Greg Hunter's USAWatchdog.com 

Economist John Williams thinks the economy is in worse shape than most people think. In 2013, Williams predicts, "As this goes forward, you're going to see we're going to be in a new recession." The Federal Reserve announced last week it is now printing a total of $85 billion every month to reduce unemployment and stimulate the economy. Williams says, "That's nonsense. . . . There's nothing they can do to stimulate the economy." Williams has long contended the Fed is really just using the weak economy to continue to prop up the banking system. Williams says, "If the Fed wasn't doing what it's doing . . . I'd presume you'd be on the road to a banking system collapse. The banking system is still in trouble." Williams warns the "open-ended" printing of $85 billion a month ". . . will be part of what will eventually become hyperinflation."   And if there is no deal on the so-called "fiscal cliff," then Williams expects "heavy selling pressure on the U.S. dollar." Join Greg Hunter as he goes One-on-One with John Williams of Shadowstats.com.

John Williams: We're Going to be in a New Recession in 2013
John Williams: We're Going to be in a New Recession in 2013

 


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caseyreCasey Research (www.caseyresearch.com)

The 12 Gold Bugs of Christmas

By Jeff Clark, Senior Precious Metals Analyst

December 17 2012

 

While the price of gold has languished in a trading range much of the year, leaving some investors scratching their heads, many have been buying - and in some cases, really loading up.

 

It's a tad puzzling that gold hasn't broken into new highs, despite enough catalysts to move a herd of stubborn mules. But that's the hand we're dealt right now. We can't get up from the table until the game reaches its conclusion. Besides, I think the stall in prices is giving us one last window to buy before prices break permanently into higher levels for this cycle.

 

At least that's how a number of prominent investors and institutions are viewing the price action right now. Here's a sampling of this year's "gold bugs" and what they've been doing about precious metals recently.

 

Jim Rogers, billionaire and cofounder of the Soros Quantum Fund, publicly stated last month that he plans to "sell federal debt and purchase more gold and silver."

George Soros increased his investment in GLD by a whopping 49% last quarter, to 1.32 million shares. His stake is now worth over $221 million. Many investors don't realize that he also placed call options on GDX worth $9 million. The most logical explanation is that he thinks gold equities are undervalued and that there's big money to be made in them within a year.

Marc Faber mocks those claiming gold is in a bubble. "It's nowhere close to that stage," he says. And even though he's already sitting on a huge gain, he won't take any profits. Why? "I keep a picture of Mr. Bernanke in my toilet, and every time I think about selling my gold, I look at it and I know better!"

Brent Johnson, a San Francisco hedge-fund manager, believed in gold so much that he started his own gold fund, Santiago Capital, earlier this year. His latest video points out that there have been "278 global easing moves in the last 14 months." How does someone not own gold in that kind of environment?

Don Coxe, a highly respected global commodities strategist, stated at the Denver Gold Forum that "now is the best climate I have ever seen for an increase in gold prices." He told fund managers, mining analysts, and mining executives to prepare for significantly higher gold prices and thus higher gold-mining-stock valuations. "The opportunities ahead are the best I've seen." He thinks a new gold rush is ahead for gold stocks, and that a "lustrous" rally will occur within a year.

Jeffrey Gundlach, cofounder of DoubleLine Capital, predicts that deeply indebted countries and companies will default sometime after 2013. Central banks may forestall these defaults by pumping even more money into the economy - but at the risk of higher inflation in coming years. He recommends buying hard assets including gold, and also "gold-mining firms because we consider them to be bargains."

Rob McEwen, CEO of McEwen Mining and founder of Goldcorp, is buying precious metals because he believes gold will someday hit $5,000 and silver $200.

Savneet Singh, a former investment analyst at Morgan Stanley, was frustrated with the options available to acquire physical gold in an allocated, whole-bar format outside the banking system. He started Gold Bullion International, the platform service used by the Hard Assets Alliance, a service that virtually does away with the need to buy GLD.

This is only a handful of individual investors who have made recent news with their bullion buying. But institutions, governments, and others are participating, too...

Central Banks

  • The South Korean central bank added 14 tonnes (approximately 450,000 troy ounces) of gold in November, and now holds six times more than back in June of 2011. "Gold is a physical, safe asset, and allows us to deal with changes in the international financial environment more effectively," bank officials said.
  • Brazil bought 18.9 tonnes (607,650 ounces) in September and October alone. It will likely buy more, since gold still accounts for only 0.8% of its reserves.
  • Paraguay bought 7.5 tonnes (241,130 ounces) in July.
  • Turkey imported 4.2 tonnes (135,000 ounces) of gold in November. It has bought 117.2 tonnes (3.7 million ounces) so far this year, almost double last year's purchases.
  • Central banks around the world bought a total of 351.8 tonnes of gold (11.3 million ounces) in the first nine months of 2012, up 2% from a year ago.
  • Even Argentina added 7 tonnes last year (225,000 ounces), and Colombia 2.3 tonnes (almost 74,000 ounces).
  • And of course there's China. While nothing official has been announced by its central bank, its imports and buying habits are mind-boggling.

 

These data suggest in and of themselves that dips in the gold price are likely being bought - and will continue to be bought - by central banks. They're not exactly short-term traders. Remember, central banks were net sellers as recently as 2009, so this reversal will likely play out for years.

India. I tire of the reports that proclaim something like, "Indian buying dropped this month!" Let's be clear about India and gold: Imports have more than doubled in three years (through 2011), and investment demand has climbed almost fivefold. And all this occurred while prices were rising and from a nation that already has a strong cultural predisposition towards the metal. Further, silver demand is taking off: sales have jumped 24% this year over last.

There is some government interference, but no slump in demand in India. This trend will continue and may even strengthen when inflation begins making front-page headlines.

Germany. A precious-metals group recently reported that Germans are increasingly buying gold because of fears about economic uncertainty, and that a third of citizens are now considering gold as part of their investments. "There has been a significant increase in demand in recent months because of worry about actions taken by the European Central Bank and US Federal Reserve, as the two central banks seek to counter the euro zone crisis and slow US economic growth."

Commercial Banks

  • Morgan Stanley's preferred metal exposure for 2013 is gold, though the company expects silver to outperform it. The bank stated that it believes "nothing has changed with gold's fundamental thesis: QE 3 (and 4...) and similar commitments from the ECB and BoJ; low nominal and negative real interest rates; ongoing geopolitical risk in the Middle East; and mine supply issues."
  • ScotiaMocatta stated that it would "not be surprised to see prices reach $2,200/oz." Why? "One of the main reasons we are still bullish is because of the mess the Western world is in. Europe has a debt problem that is proving all but impossible to solve, and all efforts to date have revolved around throwing more money at the problem to avoid the monetary system from breaking down... that should be reason enough to be bullish."
  • Deutsche Bank released a new report essentially declaring that gold is money. "We see gold as an officially recognized form of money for one primary reason: it is widely held by most of the world's larger central banks as a component of reserves. We would go further, however, and argue that gold could be characterized as 'good' money, as opposed to 'bad' money which would be represented by many of today's fiat currencies."
  • Bank of America Merrill Lynch says gold will hit at least $2,000 by the end of 2013.
  • JP Morgan now accepts physical gold as collateral.
  • Another source of demand from banks could be the change in Basel III regulations. If you haven't read about it, gold could get promoted to Tier 1 status, meaning it would be considered a "zero-percent risk weighted item."

     
    Eric Sprott recently wrote, "If the Basel Committee decides to grant gold a favorable liquidity profile under its proposed Basel III framework, it will open the door for gold to compete with cash and government bonds on bank balance sheets - and provide banks with an asset that actually has the chance to appreciate. Given that US Treasury bonds pay little to no yield today, if offered the choice between the 'liquidity trifecta' of cash, government bonds or gold to meet Basel III liquidity requirements, why wouldn't a bank choose gold?"

     
    We'll be watching the news on this topic.

 

None of these parties think the gold bull market is over, nor the price too high. They recognize the implications of a world floating on fiat currencies, and that government "solutions" to debt and deficit spending will significantly - perhaps catastrophically - dilute the value of currencies, the fallout of which has yet to materialize. As for me, I think that the longer the malaise continues, the more likely the breakout is to be both sudden and dramatic.

We can all speculate about when the next leg up for gold will kick in, but the point for now is to take advantage of the weakness, like many of these gold bugs. When the price breaks out of its trading range, are you sure you won't wish you'd bought a little more?


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moneynewsMoney News (www.moneynews.com)

Robert Reich: Pegging Interest Rates to Unemployment Rate Won't Work

Friday, 14 Dec 2012 08:13 AM

By Forrest Jones

 

The Federal Reserve's decision to keep interest rates at rock-bottom levels until unemployment rates fall by more than a percentage point won't boost the economy, said Robert Reich, former Labor Secretary under Bill Clinton.

 

The Federal Open Market Committee announced after its December meeting that it will keep its benchmark lending rate, the fed funds target, at 0 to 0.25 percent as long as unemployment rates hover above 6.5 percent, well below the current level of around 7.7 percent.

 

Interest rates will also stay near zero provided inflation rates don't threaten to cross a 2.5 percent threshold.

 

Expect rates to stay low indefinitely, because no amount of monetary stimulus measures out there will lower jobless rates until banks loosen their currently tight purse strings, Reich said.

 

"[T]he sad fact is near-zero interest rates won't do much for jobs because banks aren't allowing many people to take advantage of them. If you've tried lately to refinance your home or get a home equity loan you know what I mean," Reich wrote in his blog.

 

Banks don't need to lend to homeowners anyway.

 

"They can get a higher return on the almost-free money they borrow from the Fed by betting on derivatives in the vast casino called the global capital market," he added.

 

"Besides, they've still got a lot of junk mortgage loans on their books and don't want to risk adding more."

 

Lower interest rates reduce capital costs, which ideally prompt businesses to borrow money and invest and hire.

 

Many businesses, however, aren't borrowing because they don't see any customers lining up for new products and services.

 

Those customers aren't out there spending because they don't have new money, thanks to tight lending standards and lower wages.

 

"And here we come to the crux of the problem. Consumers don't have additional money. The median wage keeps dropping, adjusted for inflation. Most of the new jobs in the economy pay less than the jobs they replaced," Reich pointed out.

 

"Corporate profits are taking a higher share of the total economy than they have since World War II, but wages are taking the smallest share since then."

 

Public spending must keep the middle class afloat, and unions play a role as well, while tax breaks and deregulation alone won't ensure a prosperous America.

 

"The real job creators are America's middle class and all those aspiring to join it, whose purchases propel the economy forward. And whose declining earnings are holding the economy back," Reich wrote.

 

"So two cheers for [Fed Chairman] Ben Bernanke and the Fed. They're doing what they can. The failure is in the rest of the government - at both the federal and state levels - still dominated by deficit hawks, supply-siders and witting and unwitting lackeys of big corporations and the wealthy."

 

Market participants, meanwhile, point out that the Fed's new targets don't represent any real changes from past policy goals anyway.

 

"These threshold figures are consistent with the economic forecasts and rate guidance that have been in the Fed's quarterly economic projections since last year," said Greg Gibbs, senior FX strategist at RBS, according to CNBC.

 

Gibbs told the network that the Fed has crafted past policies to bring longer-term unemployment rates to the 5.2 to 6 percent range.

 

"Some Fed governors have expressed a preparedness to see short-term inflation as high as 3 percent to more closely meet the full employment target," he said.



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caseytwoCasey Research (www.caseyresearch.com)

Could Japan Spark a New Asian War?

By Marin Katusa, Chief Energy Investment Strategist

December 18 2012

Last Sunday in Japan, the Liberal Democratic Party (LDP) completely crushed its main competition in the elections, defeating the ruling Democratic Party of Japan. The LDP took 294 of the 480 seats that were available, handing Prime Minister Yoshihiko Noda an absolute shellacking. The leader of the LDP, former Prime Minister Shinzo Abe, returns to power after a five-year hiatus.

To most people outside of Asia, this may not seem to be important news, but a major LDP victory in Japan could have global economic and political consequences.

Shinzo Abe and his allies now have a super-majority in the lower house of parliament. And Shinzo Abe is known to be tough on China. That attitude could be very dangerous when Sino-Japanese tensions are already at an all-time high.

China and Japan are currently embroiled in one of the most serious disputes in East Asia of the past few decades: the fight over the uninhabited Senkaku (Diaoyu) Islands in the East China Sea (we have previously written about the issue). The fight is not just for the islands themselves, but for national pride and fishing rights... as well as the trillions of cubic feet of natural gas that is said to be underneath the islands.

During one of Abe's first broadcasts after being assured of victory, he declared that "China is challenging the fact that [the islands] are Japan's inherent territory and our objective is to stop that challenge." Them's fighting words.

Abe seeks to not talk the talk but also walk the walk: he is seeking to revise the current war-renouncing Constitution of Japan in order to bolster Japan's military capabilities and be able to exercise the right to collective self-defense. If he is successful in this regard, he could cite this right in order to send out actual armed forces to the Senkaku Islands, which will surely elicit a response from the Chinese.

And what is to say that something cannot go wrong during this back-and-forth between the Japanese and the Chinese, leading to a full-scale confrontation?

The ongoing drama over the Senkaku Islands and the potential Sino-Japanese conflict is just one of a few "black swan" events that could happen:

  • Egypt is on the brink of civil war
  • Saudi Arabia's leader is nearly 90 years old and its succession rules practically beg for trouble
  • Putin is seeking to increase his energy dominance not only in Europe, but the rest of the world (in fact, we are discussing how investors could profit from this "Putinization" in the upcoming Casey Energy Report)

 

As less and less easily accessed oil needs to be used by more and more people, the price of oil has nowhere to go but up.

These global geopolitical black swans will only make the jump even more dramatic.

So with all that is going on in the world, shouldn't you do your portfolio a favor and place your money in energy?



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gataGATA (gata.org)

Queen on gold bars at Bank of England: 'Regrettably not all of them belong to us'

Submitted by cpowell on Tue, 2012-12-18 15:25. Section: Daily Dispatches

10:27a ET Tuesday, December 18, 2012

 

Dear Friend of GATA and Gold:

 

Becoming today the first British monarch to attend a Cabinet meeting since George III in 1781, Queen Elizabeth remarked on her visit last week to the Bank of England's gold vault, which was greatly publicized in the United Kingdom. (See http://www.gata.org/node/12030.)

 

In a receiving line at 10 Downing St., addressing the chancellor of the exchequer, the UK treasury secretary, George Osborne, the queen said, "I saw all the gold bars. Regrettably not all of them belong to us."

 

Osborne replied that Britain still has some gold left, and apparently that was that -- nothing about swaps and leases and the purposes thereof, particularly secret currency market intervention to sustain the Anglo-American financial establishment that is bankrupting much of the Western world. (See http://www.gata.org/node/12016.)

 

If any of our British friends happen to run into the queen -- and she does get around, being the most conscientious and selfless public servant in Britain -- they might let her know that GATA would be delighted to make a presentation to her about what her chancellor apparently won't tell her about her kingdom's gold and its former gold.

 

Of course under one of the basic U.K. laws -- is it the Act of Irrelevance? -- the sovereign and her immediate family are forbidden to do much more than serve as fodder for celebrity programs on television and the celebrity columns in the newspapers. But since there are no serious financial journalists anymore, one has to start somewhere, and if the queen could just keep talking about gold, maybe the issue eventually could break into "Inside Edition," "Entertainment Tonight," and People magazine if not "60 Minutes," "Panorama," and The Wall Street Journal.

 

The Telegraph's story about the queen's visit to the Cabinet meeting, posted at the link below, contains a 1-minute, 53-second video of the event, with the queen's exchange with the chancellor about gold coming at the 1-minute mark:

 

http://www.telegraph.co.uk/news/politics/david-cameron/9752199
/Queen-receives-60-placemats-after-David-Cameron-invited-
her-to-Cabinet.html

 

CHRIS POWELL, Secretary/Treasurer

Gold Anti-Trust Action Committee Inc.



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mailboxDavid's Mail Box

 

Dear David,

 

I enjoy your editorials.  They are thoughtful and reveal a depth of Wisdom and Understanding.

 

As for the rest: It really makes no sense to highlight all of these "Brilliant" Analysts who have all the charts and clever sayings about PM's. The Manipulation is in control and NO one can call the next years high! Also, your beloved Richard Russell just did another flip on KWN today. He has NO idea on the Markets. It is nice that you respect and honor him as your elder, however he is Lost. He calls a Bear Market one week and a Bull the Next.With the Manipulation in control I think personally it is a waste of precious time to listen to all of these writers. They have no idea what will happen tomorrow and I can prove that by reviewing what they have said vs. what has happened.

 

Buy the Metals and Live Life. The rest is a guessing Game that probably will never happen.

 

Thanks for your Messages.

Sincerely,

 

George M.



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aboutAbout Miles Franklin

Miles Franklin was founded in January, 1990 by David MILES Schectman.  David's son, Andy Schectman, our CEO, joined Miles Franklin in 1991.  Miles Franklin's primary focus from 1990 through 1998 was the Swiss Annuity and we were one of the two top firms in the industry.  In November, 2000, we decided to  de-emphasize our focus on off-shore investing and moved primarily into gold and silver, which we felt were about to enter into a long-term bull market cycle.  Our timing and our new direction proved to be the right thing to do.

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