Miles Franklin Daily Gold & Silver Summary

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Market Recap for

Friday November 2, 2012


GOLD

$1676.90 Down $38.10

 

GOLD - one year ago today

Down $60.50

 

SILVER

$30.91 Down $1.35

 

SILVER - one year ago today

Down $3.36

 

PLATINUM

$1543.00 Down $24.00

 

PALLADIUM

$599.00 Down $13.00

 

HUI

474.56 Down 22.35

 

XAU

178.96 Down 8.12

 

DOLLAR INDEX

80.57 Up 0.55

 

EURO

1.2830 Down 0.0113

 

DOW

13093.16 Down 139.46

 

SILVER TO GOLD RATIO

54.25 to 1

tableTable of Contents


Click on the Links Below to Scroll to the Articles

 

  • Quotes of the Day
  • From David's Desk:   The BLS Did It Again. They manipulated the jobs report to prop up Obama's chances in the upcoming election.
  • The Holter Report: What if us "lunatics" are correct and the banks actually do close, ATM's don't work and distribution breaks down? Can you eat or feed your family for a week? How about a month?
  • Gold Highlights
  • John Williams: Regardless of whether Barrack Hussein Obama or Willard Mitt Romney wins the election, the next presidential term most likely will see the onset of a domestic, hyperinflationary great depression.
  • Jim Sinclair: Gold is a national asset to be protected and kept not by strangers who give promises, but by yourself and close to home.
  • Paul Craig Roberts : U.S. Elections: Will the Dead Vote and Voting Machines be Hacked?
  • Noah Feldman: In this year's presidential race, nothing matters more than the Supreme Court.
  • Adam Hamilton: If Obama wins, the odds of a new cyclical bear probably approach certainty.A Romney win, on the other hand, could certainly delay the cyclical bear.
  • Ed Steer: For the rest of November, we have the run-up to the December delivery month in gold and silver. All holders of December Comex futures contracts in those metals must do one of three things on or before the end of November...sell, roll into a future month...or stand for delivery.
  • Odds & Ends 
  • About Miles Franklin

 

Read more articles from Ranting Andy Hoffman
and Bill Holter on the Miles Franklin Blog site.
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quoteQuotes of the Day

Silver will trade at $50 minimum. In the meantime it will drive you nuts.
- Jim Sinclair, Jim's Mailbox, November 2 2012

 

There has been a coup that hides in plain view. Wall Street owns Washington. Illegal has become good business. It was possible because the sheeple are more interested in reality shows than anything else. I am 71 and I am bursting with energy to lean as hard against the sociopaths that are now the "In Crowd."
- Jim Sinclair, Jim's Mailbox, November 2 2012

 

QE is the bag man for taking lousy assets off the books of financial institutions in order to prevent their bankruptcy, as well as holding up the international government debt situation. QE does not have a damn thing to do with employment other than if you stop it there will be no employment.
- Jim Sinclair, Jim's Mailbox, November 2 2012

 

Hi Jim!

Thank you for all your help and support throughout the years! Knowing that the markets in Gold are manipulated, when will the "Cartel" finally fail? It is so hard to imagine $3,500 when we are constantly kicked in the groin on any significant advances.

Your thoughts are always appreciated, CIGA Gary

Gary,

They will as they did in the 70s. The same people will be the people who run it to $3500 or maybe $12,400.
- Jim Sinclair, Jim's Mailbox, November 2 2012

 

In Currency Induced Cost Push Inflation the velocity of money will skyrocket in days just like it did in Weimar.
- Jim Sinclair, Jim's Mailbox, November 2 2012

 

Jim,

Only once the model has fallen below the support line we are on now, and that for only a couple of days.

A significant drop below 1675 brings 1642 into play.  The chance of that happening is about 9%.

91% chance 1675 +/- 5 USD holds.

CIGA Stefaan

Dear Stefaan,

Reading charts when a market is under clear manipulation is simply falling prey to their prime tool.

Since I know there can be no difference between either candidate as far as the dollar long-term trend is concerned, I simply turn off my computer and deal with a combination of voluminous, dire hate mail, and suicidal gold guys.
- Jim Sinclair, Jim's Mailbox, November 2 2012

 

For years it has been Standard Operating Procedure (SOP) for the Cartel to paper-raid and smash Gold and Silver on-and-around the NFP release the first Friday of the month.

Unsurprisingly* with only four days to go to the big election 'beating expectations' was the very transparent order of the day (never mind that the numbers will be quietly revised closer to reality later on, a 'great' headline number was obviously required today), even if the 'longs' had to take a beating.
- Jim Sinclair, Jim's Mailbox, November 2 2012

 

After the new quantitative-easing campaigns by the ECB and Fed crushed the dollar, it stabilized in October. It stayed weak while the US stock markets lingered near major highs, again proving that it needs safe-haven demand to stage any significant rally. Its fundamentals remain very bearish due to the Fed's rampant money printing and the Obama Administration's record-shattering deficit spending. All of the strong-dollar talk from this past spring as the euro weakened is long forgotten. As the dollar's supply growth continues to exceed its global demand growth, its sliding price is bullish for gold. Restoring the dollar's fundamentals will take many years
- Adam Hamilton, Zeal Intelligence

 

Gold was down 40 bucks today to 1675, which makes it even a more attractive buy. Put it away for the long term, ten years from now today's price will look like a bargain.    

- Richard Russell, Dow Theory Letters, November 2, 2012

 

 

Regardless of whether Barrack Hussein Obama or Willard Mitt Romney wins the election, the next presidential term most likely will see the onset of a domestic, hyperinflationary great depression
- John Williams, ShadowStats.com

 

 

Back to Table of Contents

daviddeskFrom David's Desk 

David Schectman 

 The BLS Did It Again

 

If you didn't carefully read all of the above quotes, please do so now. I have chosen them carefully!

 

The information in today's daily is especially relevant. Don't miss the articles by Russell, Sinclair and especially Williams. The last three articles plus the John Williams article deal with the election. Read them before you cast your vote.

 

The following was published on JSMineset late Friday evening. It is an explanation of why gold dropped below $1700 and why it won't stay there. If you are worried about the bottom falling out, don't. (There is another excellent explanation leading off Jim Sinclair's section later in the daily)

 

Gold Market Overview From An HFT Perspective - JSMineset.com

November 2, 2012, at 7:46 pm
by Jim Sinclair

 

Jim,

 

I'm sure your mailbox is inundated with letters, so I'd like to help. Feel free to post this if you think it will relieve some of the pressure. Thank you for all you have done for gold.

 

Here is an overview of market action for gold longs from a HFT perspective. If you plan to trade on my information, then the trade is: Buy physical gold. Any HFT worth their salt (or silicon) already knows what I have written here.

 

TAKE HEART GOLD LONGS, THE PAIN IS ALMOST OVER. The next leg of our journey takes us to $1800 and over, probably in time for Christmas. The best advice I ever received in gold is: "Your emotions are always wrong." This was from a highly skilled trader named Jim Sinclair. Thank you, Jim.

 

Here is what is going on:

 

Market releases are important, and NFP is the most important.

 

NFP (non-farm payrolls) is the most volatile of all data releases. Every HFT (algo and human) trade it. The high-risk trade is to short bonds or long S&P prior to the release. The HFT method is to close your position pre-release and have your finger on the mouse ready to pounce. Failing that, the human method is to fade the spike and profit from mean reversion.

 

On a ladder, you can see 1 min before a data release that orders are pulled and volume is barren. As the data is released, algos get it first. They slam orders into the market. A second (or less) later, humans add to these orders at market and the algos sweep their profits. This drives the price as stops are crossed and slow traders enter.

 

For this NFP release, everyone knew the data release would be the same as October. It's an election year. The number may be revised in a week or 2, but that won't matter after the election.

 

Knowing in markets is a powerful thing. Most trading is guessing and hoping, so knowing is a comfort rarely experienced.

 

When the release happens, the gold market got slammed. The previous day, traders were pulling their longs from $1725, causing the price to drop. For the release, the shorts know that longs have stops under $1700. This is a human "line in the sand". So the goal is to cross $1700. You can see the stops trigger to $1696. From there, longs feel the pain and close positions, allowing the shorts to hit the price again into the next level $1678. These were the levels in my last email, and nothing has changed. The short goal is $1650, but won't get a chance to push $1650 and here is why:

 

China demand. The Chinese government has encouraged it citizens to buy gold. This is a saving culture with little faith in governments and currency. These avid savers have already bought large amounts of gold and will be buying more under the assumption that "If the price was good at $1750, then it's great at $1700!" This is how value buying works.

 

Come Monday, Asian value buyers will be into the market. Some may want to try to get $1650 prices or wait until Tuesday to get a better price, but will quickly snap up gold as they see the price start to go up. These physical buyers will be buying on as the price starts to press $1700 for fear of missing this BREIF pullback in price.

 

CIGAs should also be value buying at these levels.

 

On Monday, shorts will try to breach $1678. They may get it to fall (briefly) but that level won't hold. Spec shorts will be closing positions and adding longs at these prices. Spec shorts don't want to get caught behind the wave of big money value buyers. High volume VALUE traders will be back into the market on Wednesday, after the election smoke clears. These traders will be snapping up every pullback of gold, knowing they can reap a big profit before the end of the year. This starts the gold run to $1800 (short term, ie Christmas) and $2000 close behind. $2000 is a low estimate with a looming fiscal cliff and rabid money printing.

 

It is an election week. All eyes (news coverage) will be on the election, with real news hidden in the folds. No matter who wins, nothing will change.

 

If Obama wins, Bernanke will continue QE as normal, secure in his job. If Romney wins, Bernanke will increase QE in an attempt to keep his job. Either way, the printing press rolls on devaluing in the dollar and increasing the book price of hard assets. Markets know this. Knowing something in a market is a strong motivator.

 

There is NO scenario short of an election coup d'�tat of congress that can stop the presses.

 

If you are NOT buying gold at these prices, you have NO insurance for what is to come.

 

If you are long physical gold, turn off the tape and come back to it on Thursday when this paper BS is over.

 

Jim, thank you for all of your wisdom and advice.

 

Cheers,CIGA Henry (HFT)

As you can see, from this report, the spark that started the selling was the strong jobs report. But wait... according to John Williams (Shadowstats):

 

No. 479: Presidential Election, Hurricane Sandy, October Employment and Unemployment, - ShadowStats.com

November 2nd, 2012

 

October Jobs and Unemployment Numbers Were Not Credible, Artifacts of a Broken Reporting System and/or Direct Manipulation.

 

With Consistent Seasonal Adjustments, October Jobs Gain Would Have Been About 117,000 Instead of 171,000.

 

October Unemployment: 7.9% (U.3), 14.6% (U.6), 22.9%

 

M3 Annual Growth Picks Up Again.

 

Here is what Jim Sinclair has to say about John Williams:

 

John Williams of www.shawdowstats.com is the only trustworthy source of economic statistics available to the public. If you do not subscribe to him you are hurting yourself. Today we live in a false world of fabrications accepted with gratitude by the sheeple.
- Jim Sinclair, Jim's Mailbox, November 2 2012

 

This is two months in a row that the Jobs and Unemployment Numbers were rigged. Give me a break! This system is so rigged, so obviously manipulated that a "rational" observer would never find it reliable. I said reliable, but I probably should have said credible. If this pre-election BS doesn't cause you to doubt our current administration, then you deserve what you get! They blatantly manipulate and "adjust" the statistics to persuade the voters that things are improving and Obama has turned things around. Well, he hasn't!

 

Headline in Saturday's Minneapolis StarTribune paper: JOBS REPORT SHOWS ECONOMY IS IMPROVING.

 

As to be expected, the funds and bullion banks pounced all over gold and silver. Even though they knew the numbers were BS, they understood that the High Frequency Trading Algos would short the metals, which of course they did. In a couple of weeks, after the election, when they "revise" the numbers, the metals will trade back up, so I am not worried about this latest contrived attack, but it makes me sick that this administration will use any dirty trick in the book to pull out the election.

If you are reading this daily and still vote for Obama, I just don't get it - and neither do you. Your only excuse might be "if the Republicans were in power, they would have done the same thing." And you know what, you'd probably be right. The truth is - it's not just the Democrats; the entire political system is corrupt and broken. Nothing is as it seems. All we get from Washington and Wall Street is MOPE (Jim Sinclair's term for Management Of Perspective Economics). All the endless borrowing and spending, in the name of "buying more votes," will continue no matter which box you check. Your choice is bad and worse. But that's usually the case.

 

What should you do? Cast your vote for gold and silver; that is your best protection against these liars. That is the only honest and winning ticket and the only thing that will keep you above water when TRUTH finally surfaces and then, all the lies and manipulations in the world will not save the dollar or the economy!

 

Check out the following from Jim Sinclair. This is the traders' reaction to the jobs report. Also, here for the first time, Jim lays out a timetable for $3,500 gold and .72 US Dollar. It depends on whom we vote into office. If Romney wins, the timetable moves up to next year. If Obama wins it is pushed out to 2015-2017.

 

The reason that Romney will accelerate gold's move up is because he is committed to reigning in Bernanke and that will spell disaster for the economy and the banks. In fact, Sinclair says it will be nothing short of suicidal to stop or curtail QE. But the important thing is that IT IS GOING TO HAPPEN. Like I have told you for years now, if you buy physical gold and silver and hold it, YOU HAVE ALREADY WON. What could be simpler?

In The News Today - JSMineset.com

November 4, 2012, at 2:58 am
by Jim Sinclair

 

My Dear Friends,

 

There is much discussion this weekend of the following:

 

Almost 192 million ounces of paper Silver were 'dumped' on the market Friday within ten minutes upon the NFP release. This is the equivalent to one-quarter of the world's annual physical Silver production.

-CIGA RS.

 

Have you for a moment considered that 192 million ounces of silver were purchased on the market on Friday within 10 minutes?

 

Respectfully yours,

Jim

 

_______________________________________

In The News Today - JSMineset.com

November 3, 2012, at 2:03 pm
by Jim Sinclair

 

My Dear Friends,

 

The thesis of MSM is that "Nothing must ever disturb the social order." Mother Nature can do this in seconds, and an overnight collapse of confidence in the dollar will do it in three days.

 

Currency induced cost push inflation is what will collapse confidence overnight and cause an explosion in the velocity of money in three days. Study history. It has happened before and will happen again. Although you will not want to hear this, it is true.

 

Ben Bernanke is the only person in the US financial management that thoroughly understands the mess that has been made, that which I have taught you. His action with QE is the only tool to buy time. QE is the only way the can gets kicked down the road for 3 years, preventing for some time, a total collapse. To fire Bernanke will be the single greatest error made in US financial management ever. We are over the cliff and in a free fall. Anyone speaking austerity and the dollar is unknowingly speaking about the final Western world financial collapse, without any remedy, within 9 months. If they knew, they would keep their mouths shut.

 

What I know and Bernanke knows is that your vote next week in the USA is for immediate (9 months) collapse or for the test coming between 2015 and 2017. You have the right to select the time of the end. This choice of leadership is between the devil you know or the devil you do not know.

 

Having your business assets in East Africa is a calming feeling. Two major Brics taking Tanzania under their wing gives me comfort. The choice of next week's election in the USA is gold at and above $3500 either immediately defined as within 6 to 9 months from now, or in 2015-2017. The US dollar will trade at USDX .7200 and lower in the same timeframes resulting from your vote.

 

Choose wisely,

Jim

 

Around 7 on Friday evening, Susan and I were walking our dog in our gated community when we chanced upon a young man in a motorized wheel chair who was also out walking his dog. We've seen him before, so we stopped to talk.

 

Susan asked him, "What is your accent, are you Russian?"

 

He said, "No, I'm from Venezuela."

 

I piped in, "Close." We all laughed.

 

Susan, ever forthright and direct, asked him, "What happened? How did you end up in a wheelchair?"

 

He replied, "I was shot during a robbery. Criminals kill more people in Venezuela every year than in our war in Iraq. Over 500 people were killed in my city last year alone. My entire family left the country. An idiot runs Venezuela and his social programs have destroyed the country. All we get is crime and poverty. Anyone with money is leaving." And that was my lesson on socialism Friday night! That's what happens when Socialism is voted into office. We haven't seen it here - YET, but it's coming.  

 

Libertarian Leonard Read (1898-1983) pointed out that government redistribution was an evil act and only bad could come from it. He believed that no person could benefit by living off of another's income (welfare). It would not improve one's character or growth. He foresaw a terrible end for those who lived on other people's earnings.

 

The tale we heard on Friday evening is a perfect example of this. The more money you give to subsidize (in Chavez' Venezuela or here) the more money they demand and the worse they behave. The more entitlements they receive the more they think they deserve. We even hear vague threats to our safety if they don't get a bigger cut. We hear endless complaints about the raw deal our society gives the welfare class. To add insult to injury, those who the government takes the most from are vilified and cursed. The most affluent taxpayers who finance the bulk of the welfare payments are hated because they supposedly don't pay enough. Leonard Read was right to argue that this process could only have a bad ending. Our new friend "in the chair" would agree. He has five bullet holes in his body to prove it.

 

The following graphic, presented in Ed Steer's excellent letter, puts physical gold into perspective in relation to derivatives. The folks at GATA believe that the central bank gold cube is much smaller than shown here, by maybe a third or even half, because they have been quietly leasing their gold into the market for most of the last dozen years in order to hold the price down. They are allowed to count their leased gold as gold in their possession but there is no way they will ever get it back, and the "it" amounts to somewhere around 12,000 -15,000 tonnes! When (not if) the derivatives ($1,100 Trillion worth) come tumbling down, what do you think will happen to the price of gold?

 
Source: CaseyResearch.com 

   

 The following chart is courtesy of Nick Laird:

gold   

How successful are our government programs to help the needy?

 

Over $60,000 in Welfare Spent Per Household in Poverty - WeeklyStandard.com

3:27 PM, Oct 26, 2012 * By DANIEL HALPER

 

"According to the Census's American Community Survey, the number of households with incomes below the poverty line in 2011 was 16,807,795," the Senate Budget Committee notes. "If you divide total federal and state spending by the number of households with incomes below the poverty line, the average spending per household in poverty was $61,194 in 2011."

 

This dollar figure is almost three times the amount the average household on poverty lives on per year.

 

This dollar figure is almost three times the amount the average household on poverty lives on per year. "If the spending on these programs were converted into cash, and distributed exclusively to the nation's households below the poverty line, this cash amount would be over 2.5 times the federal poverty threshold for a family of four, which in 2011 was $22,350 (see table in this link)," the Republicans on the Senate Budget Committee note.

 

[There's a lot of slippage, mostly support salaries, in the welfare state.]

 

Jeff Clark says:

 

Just take a look at the "stock" of the United States of America over the past 10 years...

  

  

 

The U.S. dollar has lost one-third of its value in the last 10 years. Our debt level is exploding. We can't balance our budget. And we're about to tumble over the fiscal cliff.

Continue Reading at GrowthStockWire.com

 

Sincerely,

 

David Schectman

Miles Franklin

 

Back to Table of Contents

holterreportThe Holter Report

bill holter
Bill Holter

Only "lunatics" prepare for the worst?
Published: November 2nd, 2012

 

Hurricane Sandy has come and gone, CNBC and Wall Street for the most part are espousing how "bullish" it is that $ billions of damage was done because now it has to be rebuilt.  Forget about the "destruction" part, let's just look at all the future construction that needs to be done.  How stupid is this train of thought?  I feel for the people who have lost everything or have partial losses, as you may remember we lost our house and everything in it about a year ago, it was a nightmare to put it mildly.

 

I do want to mention that what we are watching now as far as gas lines, people "dumpster diving" for food, violence and "gun play" over necessary commodities is a little surprising to me.  Maybe it shouldn't be and maybe I should have expected it.  This was a storm that was highly publicized for a full week prior to the first rain drop or gust of wind.  NO ONE should have been surprised one bit and had plenty of time to prepare.

 

...So, why, if you had time to prepare would you need to be stuck in a gas line?  Why, if you knew for a fact ahead of time that a big storm was going to hit, would you not have stocked up on a couple of weeks' worth of food?  Why would you chance having to go out onto the streets to fight for that days' meal?  Yes, I understand, when your house burns down or is flooded or blown away, your food is lost also, but why not at least fill up your gas tank?  It makes no sense to me but then again I am a "doom and gloomer" who prepares for the worst and hopes for the best.

 

Now, let's go one step further and assume that those who have been correct for the past 10+ years will be correct about the future and that a "re set" and some sort of "banking holiday" is in the cards.  After watching the aftermath of Sandy, how prepared do you think the average person is for this type of scenario?  How prepared are you?

 

What if us "lunatics" are correct and the banks actually do close, ATM's don't work and distribution breaks down?  Can you eat or feed your family for a week?  How about a whole month?  What if the system doesn't re boot for 6 months?  I get it, many people cannot afford to build up a huge stash of food... but surely they should be able to at least fill up their gas tank ahead of time.  My point is this, if people did not prepare for a hurricane that was known for a fact to be headed somewhere towards the East Coast, do you think that they will be prepared for the mathematical certainty that the financial system breaks down and the currency goes "poof?"

 

Sadly, I think that what you are watching now is a preview to the future.  I personally know many people who have the means to prepare themselves for a financial breakdown who have not done so.  For less than $5,000, you can prepare yourself and family with enough food for 6 months to a year.  But no, "you are a lunatic," "that will never happen, this is the United States," or the best one is "the government will never let it happen" is what people say to preparing.  Yes, I know that there is a movement toward "prepping" but this is still a very small minority.  I can only hope that if you are reading this piece and have not prepared yourself, you will do so now.  If there is anything at all positive about hurricane Sandy, maybe this is it?

 

I want to end this piece by pointing out that ONLY the "lunatics" called the Internet bubble... a bubble beforehand.  The lunatics were the only ones who thought that real estate nationwide and worldwide was going to crash while the mainstream (including Bernanke) believed that real estate could never, ever even drop in value because as they said "it had NEVER gone down before."  Only the lunatics pointed at the banks and banking system as to where the direct negative effects of a crashing real estate market would be felt.   Only the lunatics pointed out back in 2008 that sovereign governments were next and that they would begin to fail as they were exposing their balance sheets to destruction.  ...And now, you are still considered a lunatic if you stock up on food, believe that precious metals are true money or purchase weapons for your own protection.  In my opinion, if you do not prepare yourself for what is surely sooner or later coming, you will look back with a new found definition of the word "lunatic."



Regards,

Bill Holter
Associate Writer for Miles Franklin

Read more Bill Holter Articles on the Miles Franklin Blog
goldhighlightsGold Highlights

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williamsJohn Williams (www.shadowstats.com)

No. 479: Presidential Election, Hurricane Sandy, October Employment and Unemployment,

November 2nd, 2012

 

U.S. Presidential Election.  On Tuesday, November 6th, voters will select the President of the United States who will serve for the term extending from January 2013 to January 2017.  Regardless of whether Barrack Hussein Obama or Willard Mitt Romney wins the election, the next presidential term most likely will see the onset of a domestic, hyperinflationary great depression.  That is the ultimate domestic financial disaster that has been predicted here for a number of years, with an outside timing of 2014 (see Hyperinflation 2012 and links therein to preceding reports). 

While the longer-range outlook should not be affected much by the election results, the impact of a very-short-lived shift in global confidence in the U.S. dollar is a possibility.

***

With a Romney win, look for relatively lower taxes, with a minimally less-negative economy and somewhat slower expansion of the federal budget deficit, than with Obama.  In response, near-term market perceptions could some provide short-lived support for the dollar and detraction from gold. 

The market effects here, however, should be transient, particularly if there is divided control of Congress.  Bringing a roughly $5-trillion GAAP-based deficit (GAAP here means generally accepted accounting principles) under control would be extremely painful for the nation, but that is absolutely necessary, if the United States as we know it is to survive. 

The budget-balancing task will not be easy, contrary to what has been popularized in the campaign, and I still view it as a political impossibility.  The system was pushed beyond the point of no return, in the wake of the 2008 financial panic and near-collapse of the financial system. 

Phony budget surpluses (non-GAAP), as generated during the Clinton Administration might be attainable, but the global markets are looking for truly balanced fiscal circumstances (see Hyperinflation 2012).

Neither Obama nor Romney, as president, has much if any chance of stabilizing the economy or fiscal conditions in the short-term, and of preventing a hyperinflationary collapse of the U.S. currency.  Where Mr. Obama, upon entering office in 2009, had the chance to change the future of U.S. fiscal conditions dramatically, he did so, but in the wrong direction. 

Mr. Romney has promised to take immediate actions to balance the budget, to restore fiscal normalcy.  Any President, new or re-elected, deserves the benefit of the doubt-irrespective of truly intractable deficit difficulties that largely were ignored during the presidential race.

The issues here need to be discussed openly, net of political hype.  For purposes of disclosure, I am an old-line conservative Republican, with a libertarian bent, and do the best I can to keep my comments free of politics.  Fault for the extreme financial and economic problems besetting the United States lies on both sides of the aisle, and neither major political party has shown the political will to address the underlying fundamental issues beyond political window dressing.  This has been discussed in Hyperinflation 2012 and will be reviewed extensively in the post-election Special Commentary.

Federal Reserve Chairman Ben Bernanke has observed that broad aggregate measures of the U.S. economy, such as GDP, do not appear to be reflecting the common experience of the general public.  Indeed, common experience suggests that the economy has not recovered.  The official recovery simply is a statistical illusion created by the government's use of understated inflation in deflating the GDP, which overstates deflated economic growth, as discussed in Commentary No. 467, Special Commentary No. 445, and Public Comment on Inflation.

The long-term fiscal solvency issues of the United States-where GAAP-based accounting shows annual deficits running in the $5 trillion range-are not being addressed, and the politicians currently running the government lack the political will to address those issues.  That circumstance initially suggested a hyperinflation crisis by the end of this decade, but federal government and Federal Reserve actions-in response to the systemic-solvency crisis of 2008-accelerated the process, suggesting a hyperinflation problem by no later than the end of 2014.  The continuing economic downturn is intensifying the fiscal- and systemic-solvency problems, and public awareness of this should grow rapidly in the months ahead.

Neither economic nor systemic-solvency issues have been resolved by U.S. government or Federal Reserve actions, and the most recent readings on income variance suggest that the worst is yet to be seen, as discussed in Commentary No. 469

With the economy weak enough to provide political cover for further Federal Reserve accommodation to the still-struggling banking system, QE3 was introduced on September 13th.  That action effectively provided for open-ended monetization of U.S. Treasury debt at the Fed's discretion.  The mechanism for eventual full debasement of the dollar now is in place, and it likely will come into full play, as needed to support the banking system and as needed to assure "successful" auctions of Treasury debt.

QE3 likely will lead to a massive dollar-selling crisis, and that will begin the process of a rapid upturn in domestic consumer inflation.  A near-term dollar-selling crisis is now of a much greater risk, post-QE3.  Separately, though, a dollar-selling crisis could begin at any time, triggered by various economic, sovereign-solvency or political issues.  With the guidelines set for QE3, even negative employment reports could trigger massive dollar selling.

Subscribe to John William's Shadow Stats 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.

sinclairJim Sinclair (www.jsmineset.com)

Jim's Mailbox

November 2, 2012, at 4:51 pm
by Daniel Duval

Dear CIGAs,

For years it has been Standard Operating Procedure (SOP) for the Cartel to paper-raid and smash Gold and Silver on-and-around the NFP release the first Friday of the month.

Unsurprisingly* with only four days to go to the big election 'beating expectations' was the very transparent order of the day (never mind that the numbers will be quietly revised closer to reality later on, a 'great' headline number was obviously required today), even if the 'longs' had to take a beating.

If it ain't broke... this SOP has worked so well for the Cartel they see no point in 'fixing' it. It will work, until it suddenly doesn't. Only then will the 'fixed' game be fixed.

Today's anticipated waterfall raid (a continuation of yesterday's) is just the Cartel's effort to trigger stop-losses and scare the Muppets. It has nothing to do with ground-truth or fundamentals.

*I had my calendar marked in advance for Cartel paper-raids yesterday and today, while the 'regulators' at CFTC did too... only their calendar was noted: Hawaiian shirts, sunglasses, free donuts - casual Friday. I think I'll send them a copy of my commodities calendar (Same Sh, Different Day).

 

  

***

 

Hi Jim,

We have a question concerning your recent post suggesting that the Cartel would flip from a Gold Short strategy to a Gold Long strategy sometime in the near future. Our question: Wouldn't this run contrary to the Fed's and ECB's wishes? Many have postulated that the Cartel's purpose behind the Gold Short strategy is to keep gold prices stifled to avoid shining a light on Fed/ECB currency debasement. Wouldn't a flip to Gold Long be in direct opposition to Fed / ECB wishes? Since the Cartel is viewed as the manipulation arm of the Fed, wouldn't they tow the party line (Gold Short) essentially forever?

Your thoughts on this would be much appreciated. We know you're busy and thank you for your time and inputs.

CIGA Ted B.

Ted,

You really think the ECB and the Fed are not run externally? You are wrong.

All this is for profit, not saving anything. "Stuff the Republic and take the cash," is their motto.

Jim

 

***

 

Dear Jim,

 

Could this be the reason for the recent paper-raid on precious metals?

 

CIGA Christopher

 

Christopher,

 

No. Just MSM to be used in the manipulation. QE has ALMOST nothing to do with employment, but few realize that. QE is the bagman for lousy balance sheets in the financial industry.

 

Jim

 

Fed's Rosengren sets 6.5% jobless rate for QE exit

Other Fed comments suggest end of quantitative easing is far away

November 01, 2012|Greg Robb, MarketWatch

 

WASHINGTON (MarketWatch) - The unemployment rate would have to drop near 6.5% before the Federal Reserve should raise short-term interest rates, as long as inflation pressures remain tame, Eric Rosengren, the president of the Boston Federal Reserve Bank, said Thursday.

 

Rosengren, a leading dove on the Fed, said the central bank should not consider ending its third round of asset purchases, known as quantitative easing, or QE3, until the jobless rate falls below 7.25%.

 

Earlier in the day in a separate speech, Dennis Lockhart, the president of the Atlanta Fed, said the Fed should keep buying assets until it sees broad and deep structural improvements in the labor market.

 

Taken together, the comments suggest the Fed is in no rush to exit from its ultra-easy monetary policy.

 

In September, the Fed launched an open-ended purchase of $40 billion per-month of mortgage-backed securities. The central bank said it would keep up the purchases until there was "substantial improvement" in the labor market.

 

The Fed is mounting "an aggressive attack on the serious employment challenges that beset the nation," Lockhart said in a speech to a business group in Chattanooga.

 

More...

 

Labor Market Sends Message of Deterioration While Few Listen

CIGA Eric

 

The first causality of a decline Republic is the truth. The "truth" has been distorted for so many years; generations of Americans have lost their feel for the trends in place.

 

Trends in place:

 

Declining goods-producing sector jobs (chart 1). This includes mostly manufacturing jobs.

 

Advancing service-producing sector jobs (chart 2). This includes jobs such as food service-, bar tending-, healthcare-, hospitality-related jobs.

 

The two trends above have contributed to a steady deterioration real (nominal less inflation) average hourly earnings since 1970's.

 

Chart 1: Good-Producing (GP), Manufacturing (MFG), and Service-Producing (SP) Sector As % of Nonfarm Payrolls (NFP)  

  

  

 

The job creation histogram (JCH) suggests that that upward momentum in job creation has slowed in the weak, muddle through economic recovery (chart 2). A JCH close below zero by 2016 will confirm a significant economic transition.

 

Chart 2: Job Creation Histogram (JCH): Net Nonfarm Payrolls Added/(Lost) less Civilian Labor Force Added/(Lost), 12 Month Average.  

  

  

 

The Birth/Death Model (BDM) also illustrates a weak, muddle through economic recovery (chart 3).

 

Chart 3:   Birth/Death Model (BDM) Contribution to Nonfarm Net Payrolls (NFP) Added/(Lost)

  

  

 

Few other than the cold, calculating hand of big money will heed these warnings during an election year.

 

Headline: Pre-Election Jobs Report Shows Some Gain; Rate 7.9%

 

American job creation improved in October with 171,000 new jobs but the unemployment rate moved higher to 7.9 percent, setting the stage for a final push to the finish line in the heated presidential campaign.

 

Economists had been expecting the report to show a net of 125,000 new jobs and a steadying of the unemployment rate at 7.8 percent. Nomura Securities predicted the rate would fall to 7.7 percent, but most expected no change.

 

Most of the job creation came in the services sector, with a gain of 150,000, while government employment rolls saw a collective decrease of 13,000.

 

Source: finance.yahoo.com

 

More...

__________________________________________________

In The News Today

November 1, 2012, at 9:22 am
by Jim Sinclair

Jim Sinclair's Commentary

Everything is not right. QE cannot stop or the explosion will be heard on Mars.

Four global banks told to hold extra capital

1 November 2012 last updated at 20:26 ET

Citigroup, Deutsche Bank, HSBC and JPMorgan Chase have been told by global regulators that they need to hold more extra capital than their rivals.

The four will need to hold 2.5% of common equity as a percentage of assets, on top of the new 7% buffer generally recommended.

The advice comes from the Financial Stability Board (FSB); a Group of 20 (G20) developed nations' task force.

It said recent scandals showed risks were not being covered properly.

The instruction from the FSB comes as G20 finance ministers prepare to meet in Mexico over the weekend to consider what else needs to be done to protect taxpayers against banking excesses.

The four names are on a list of 28 banks deemed so large and complex they need a bigger buffer than smaller, less globally important banks.

More...

 

 

 

 

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globalresearchGlobal Research (www.globalresearch.ca)

U.S. Elections: Will the Dead Vote and

Voting Machines be Hacked?

 

by Dr. Paul Craig Roberts    

 

"He who casts a vote decides nothing. He who counts the vote decides everything."

Joseph Stalin

 

Whether or not he said it, Stalin's quote has entered into folklore. For a vote to mean anything, those counting the ballots must have a greater respect for the integrity of democracy than they have lust for power. 

 

Since Stalin's time, the technology has changed. With electronic voting machines, which leave no paper trail and are programmed with proprietary software, the count can be decided before the vote. Those who control the electronics can simply program voting machines to elect the candidate they want to win. Electronic voting is not transparent. When you vote electronically, you do not know for whom you are voting. Only the machine knows.

 

According to most polls, the race for the White House is too-close-to-call. History has shown that when an election is close and there's no expectation for a clear winner, these are the easiest ones to steal. Even more important, the divergence between exit polls, perhaps indicating the real winner, and the stolen result, if not overdone, can be very small. Those who stole the election can easily put on TV enough experts to explain that the divergence between the exit polls and the vote count is not statistically significant or is because women or racial minorities or members of one party were disproportionately questioned in exit polls. 

 

There have been recent reports that, because of costs, exit polls in the 2012 presidential election will no longer be conducted on the usual comprehensive basis in order to save money. If the reports are correct, no check remains on election theft.

 

Digital Votes

In a fascinating article in Harper's Magazine (October 26, 2012) Victoria Collier notes that in the old technology, election theft depended on the power of machine politicians, such as Louisiana Senator Huey Long, to prevent exposure. 

 

With the advent of modern technology, Collier writes that "a brave new world of election rigging emerged." The brave new world of election theft was created by "the mass adoption of computerized voting technology and the outsourcing of our elections to a handful of corporations that operate in the shadows, with little oversight or accountability. This privatization of our elections has occurred without public knowledge or consent, leading to one of the most dangerous and least understood crisis in the history of American democracy. We have actually lost the ability to verify election results."

 

The old ballot-box fraud was localized and limited in its reach. Electronic voting allows elections to be rigged on a statewide and national scale. Moreover, with electronic voting there are no missing ballot boxes to recover from the Louisiana bayous. Using proprietary corporate software, the vote count is what the software specifies. 

 

The first two presidential elections in the 21st century are infamous. George W. Bush's win over Al Gore was decided by the Republicans on the US Supreme Court who stopped the Florida vote recount.

 

In 2004, George W. Bush won the vote count although exit polls indicated that he had been defeated by John Kerry. Collier reports: 

 

"Late on Election Day, John Kerry showed an insurmountable lead in exit polling, and many considered his victory all but certified. Yet the final vote tallies in thirty states deviated widely from exit polls, with discrepancies favoring George W. Bush in all but nine. The greatest disparities were concentrated in battleground states - particularly Ohio. In one Ohio precinct, exit polls indicated that Kerry should have received 67 percent of the vote, but the certified tally gave him only 38 percent. The odds of such an unexpected outcome occurring only as a result of sampling error are 1 in 867,205,553. To quote Lou Harris, who has long been regarded as the father of modern political polling: 'Ohio was as dirty an election as America has ever seen.'"

 

The electronic vote theft era, Collier reports, "was inaugurated by Chuck Hagel, an unknown millionaire who ran for one of Nebraska's U.S. Senate seats in 1996. Initially Hagel trailed the popular Democratic governor, Ben Nelson, who had been elected in a landslide two years earlier. Three days before the election, however, a poll conducted by the Omaha World-Herald showed a dead heat, with 47 percent of respondents favoring each candidate. David Moore, who was then managing editor of the Gallup Poll, told the paper, 'We can't predict the outcome.'"

 

"Hagel's victory in the general election, invariably referred to as an 'upset,' handed the seat to the G.O.P. for the first time in eighteen years. Hagel trounced Nelson by fifteen points. Even for those who had factored in the governor's deteriorating numbers and a last-minute barrage of negative ads, this divergence from pre-election polling was enough to raise eyebrows across the nation."

 

"Few Americans knew that until shortly before the election, Hagel had been chairman of the company whose computerized voting machines would soon count his own votes: Election Systems & Software (then called American Information Systems). Hagel stepped down from his post just two weeks before announcing his candidacy. Yet he retained millions of dollars in stock in the McCarthy Group, which owned ES&S. And Michael McCarthy, the parent company's founder, was Hagel's campaign treasurer."

 

Vote theft might also explain the defeat of Max Cleland, a Democratic Senator from Georgia. As Collier documents:

 

"In Georgia, for example, Diebold's voting machines reported the defeat of Democratic senator Max Cleland. Early polls had given the highly popular Cleland a solid lead over his Republican opponent, Saxby Chambliss, a favorite of the Christian right, the NRA, and George W. Bush (who made several campaign appearances on his behalf). As Election Day drew near, the contest narrowed. Chambliss, who had avoided military service, ran attack ads denouncing Cleland - a Silver Star recipient who lost three limbs in Vietnam - as a traitor for voting against the creation of the Department of Homeland Security. Two days before the election, a Zogby poll gave Chambliss a one-point lead among likely voters, while the Atlanta Journal-Constitution reported that Cleland maintained a three-point advantage with the same group."

 

Rigged Game

 

"Cleland lost by seven points. In his 2009 autobiography, he accused computerized voting machines of being 'ripe for fraud.' Patched for fraud might have been more apt. In the month leading up to the election, Diebold employees, led by Bob Urosevich, applied a mysterious, uncertified software patch to 5,000 voting machines that Georgia had purchased in May."

 

"We were told that it was intended to fix the clock in the system, which it didn't do," Diebold consultant and whistle-blower Chris Hood recounted in a 2006 Rolling Stone article. "The curious thing is the very swift, covert way this was done. . . . It was an unauthorized patch, and they were trying to keep it secret from the state. . . . We were told not to talk to county personnel about it. I received instructions directly from [Bob] Urosevich. It was very unusual that a president of the company would give an order like that and be involved at that level."

 

When the Republican Supreme Court prevented the Florida recount in the deciding state between George W. Bush and Al Gore in the 2000 presidential election, the Democrats' response was to acquiesce in order not to shake the confidence of Americans in democracy. Similarly, John Kerry acquiesced in 2004 despite the large disparity between exit polls and vote counts. But how can Americans have confidence in democracy when voting is not transparent?

 

For now Republicans seem to have the technological advantage with their ownership of companies that produce electronic voting machines programmed by proprietary software, but in the future the advantage could shift to Democrats. Early voting aids electronic election theft. Successful and noncontroversial theft depends on knowing how to program the machines. The victory needs to be within the range of plausibility. Too big a victory raises eyebrows, but if the guess is wrong in the other direction theft fails. Early voting helps the voting machine programmers decide how to set the machines.

 

Voting 2.0

The absence of transparency is a threat to whatever remains of American democracy. In the Summer 2011 issue of The Trends Journal, Gerald Celente made the point that "if we can bank online, we can vote online."

 

Think about it! Across the globe, trillions of dollars of bank transactions are made each day, and rarely are they compromised. If we can accurately count money online, we can certainly count votes accurately online. The only obstacles blocking online voting are entrenched political interests intent upon controlling the ballot box.

 

The lack of transparency has given rise to election litigation. Yesterday, The Washington Post reported that "thousands of attorneys, representing the two major presidential candidates, their parties, unions, civil rights groups and voter-fraud watchdogs, are in place across the country, poised to challenge election results that may be called into question by machine failures, voter suppression or other allegations of illegal activity."

 

Voting online, if property arranged, can provide the transparency that the current system lacks. While the GOP might remain active in voter suppression, the Democrats could no longer vote graveyards, and the count of those who do manage to vote would not be subject to secret proprietary software. 

 

In 2005 the nonpartisan Commission on Federal Election Reform concluded that the integrity of elections was compromised by those who controlled the programming. Proprietary private ownership of voting technology is simply incompatible with transparent elections. A country without a transparent vote is a country without democracy. 

 

Publisher's Note: Our contributing editor, Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of The Wall Street Journal.


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bloombergNoah Feldman (www.bloomberg.com)

This Election Is About the Court, Not the Economy

By Noah Feldman Oct 29, 2012 5:45 PM CT

When it comes to Supreme Court appointees, though, the differences really are going to be stark -- and they will last for a generation. Somehow the campaigns have failed to remind us that four justices are 74 or older, meaning they will be at least 78 by the end of the term. Justice Ruth Bader Ginsburg is already 79, with Justices Antonin Scalia and Anthony Kennedy not far behind at 76 and Justice Stephen Breyer at 74. One hopes of course they all live long lives, but the notion that all four will still be willing and able to serve the next four years is preposterous. Several will retire and be replaced -- and even one replacement could fundamentally change the configuration of the court.

If Romney becomes president, Ginsburg will certainly do all she can to remain in the saddle. But if she were to have to retire for health reasons (she has been treated for colon cancer and pancreatic cancer), the court would become ineluctably conservative. The present 4-to-4 split with Kennedy as the swing vote would change into a stable 5-to-3 conservative majority, with Kennedy no longer important.

Conservative Majority

Under Romney, Scalia might retire to give a Republican president the chance to replace him with someone young and comparably conservative. That would consolidate the conservative majority of Chief Justice John Roberts, Justice Samuel Alito and Justice Clarence Thomas (now 64) for as long as Thomas stayed healthy.

Or consider the scenario where Obama is re-elected and either Scalia or Kennedy is replaced by a relatively more liberal justice. That would in turn create incentives for Ginsburg and Breyer to retire, which would allow the possibility of a five-justice liberal majority in which Justice Sonia Sotomayor, now 58, would be the eldest.

The Senate can constrain the president's pick in either direction so that we do not get a radical justice on either side. But just because we will not have a Robert Bork does not mean we will get an Anthony Kennedy. Roberts and Alito both got substantial Democratic support when they were confirmed. No president of either party can be denied a reasonably moderate Supreme Court nominee who is not an ideologue.

***

The justices of the future will decide our nation's course on abortion, affirmative action, civil liberties and gay rights, not to mention big-ticket policy items such as health care. Our founding fathers never imagined such a role for the court, but for better or worse, it is here to stay. Vote your conscience this time around, but for heaven's sake, vote on the Supreme Court. It's going to matter.

Read the full article at Bloomberg.com


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zealZeal LLC (www.zealllc.com)

Wall Street was thrilled to see Romney's chances surging, as Obama's economy has been terrible for business. And Obama wants to nearly triple capital gains and dividend taxes to 43.4%, an asinine plan that will crush the stock markets.

If Obama wins, the odds of a new cyclical bear probably approach certainty. He has engineered the biggest tax hike in US history including nearly tripling capital gains and dividend taxes. And his toxic class-warfare and anti-business rhetoric has paralyzed our economy. So if Americans sadly choose 4 more years, an imminent bear seems inevitable.

A Romney win, on the other hand, could certainly delay the cyclical bear. It could quickly bring back confidence in business and the stock markets, especially if Romney can push for a solution to the year-end fiscal cliff this year even before he takes office. I would not be surprised to see this cyclical bull extend on a Romney victory. The last one ran for 60 months and briefly hit SPX 1565 in October 2007. So despite today's being big and old, it could still conceivably continue running in an ideal sentiment environment.

And just for the record, ever since Romney became the Republican front-runner I believed he would win. Obama's economic record is too poor, his term has been too hard for too many Americans economically. And when push comes to shove, we Americans generally vote our pocketbooks. A president with the worst job-creation record and biggest deficits in history, along with a weak economy, isn't likely to be re-elected. Obama tried, he failed, so we fire him and move on. And his ouster should be bullish for the markets.

On the gold front, the elections ought to be irrelevant in the near term. Gold's next seasonal upleg between November and February is its strongest of the year by far. Heading into it, this metal remains very low in its relative trading range and sentiment is bearish. This is the perfect breeding ground for a major upleg, no matter who wins. And the Fed will continue expanding the money supply near double-digit rates annually regardless of which party happens to rule.

A Romney victory will certainly bring big changes, and some traders fear they will adversely impact gold. Romney advocates a strong dollar, and has been critical of the Fed's inflationary quantitative-easing campaigns and Ben Bernanke. So if he can rein in the Fed, and balance the budget, will gold lose its luster? The long timeline makes this question irrelevant for now. Even in the best-case scenario, this process will take many years. In the meantime the Fed will keep on expanding the money supply near double-digit annual rates, creating relatively more dollars to chase relatively less gold. While there could be an initial knee-jerk gold selloff on a Romney win, it should prove short-lived. A new Administration actually greatly ramps anxiety as traders attempt to figure out what it will do. And with the new government not even coming to power until late January, nothing major is likely to happen before spring. So gold's current bullish supply-and-demand fundamentals will remain in force during this strong season.

Gold's weak month troubled traders, but it really shouldn't have. After enjoying any outsized rally as large as September's, some kind of consolidation is in order. And throughout its entire mighty secular bull, gold has tended to suffer a sizable seasonal slump in October. It is actually one of gold's weakest months of the year, simply because this metal hap- pens to be in between two major seasonal demand spikes. I marvel every year that this freaks out traders, as they should be seizing this opportunity to buy cheap. November is gold's best month of the year by far, so the rebound after this October slump tends to be awesome. It should be lots of fun.

Of course with gold weak, silver doesn't stand a chance. For all this metal's considerable merits, it still needs a strong gold environment to thrive. So silver tends to drift in October before surging sharply in November, which also happens to be its best month of the year seasonally. Like gold, silver's surge in August and September created a "golden cross", a bullish technical formation that heralds major new uplegs. It happens when a rising 50dma crosses back over a 200dma. So silver is poised to surge as gold's upleg resumes. Sentiment ought to turn fast, as it never got particularly bearish.

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The Wrap

November 2, 2012

For the rest of November, we have the run-up to the December delivery month in gold and silver. All holders of December Comex futures contracts in those metals must do one of three things on or before the end of November...sell, roll into a future month...or stand for delivery. That's all there is, there ain't no more.

As I've stated before, December is one of the biggest delivery months for both gold and silver...and along with other two items mentioned above, it's always tempting for JPMorgan et al to thump the precious metals pretty good as November progresses and the delivery month approaches. Will that happen this month? Beats me...but it's always one of those "in your ear" moments ripe for the picking if "da boyz" choose that path.

And as I also mentioned before, if we do get a sell-off, it will most certainly be accompanied by a substantial rally in the dollar index...either real, or engineered. As I mentioned in the paragraph just under today's quote...we're still waiting for a resolution of these grotesque short positions in both gold and silver...either down, or up.

________________________________________

The Wrap

November 3, 2012

Well, the resolution that both Ted Butler and I had been expecting, manifested itself during the Comex trading session yesterday. This had little if anything to do with either the jobs report or the rally in the dollar index. As I said earlier, this was entirely expected, even if disappointing. Neither Ted nor myself were happy to see it...but as Ted has been pointing out for over a decade now, when JPMorgan et al get over run, it would be for the first time.

Are we done yet? I doubt it, but a bottom is near...it just remains to be seen how long JPMorgan et al drag this out. But I'm sure that they want to shake out as many long holders as they can. If you look at the 6-month gold chart below, you'll see that "da boyz" didn't even get the price below the 200-day moving average yesterday...so that's still a big fat target. Yesterday's volume wasn't as heavy as I was hoping for...and I figure we've still got a few down-days in front of us yet, as it appears likely that they will have to take out the 200-day moving average by a decent amount to get final capitulation from the technical fund longs, as we haven't had it yet.

  

In silver, the 200-day moving average was breached...and the price closed below it. But once again, the volume numbers weren't big enough, so I'm expecting some more price pressure from JPMorgan and their friends in the days and weeks ahead.

  

I'm only speculating here, but I'd guess that this will continue for the better part of this month...either just after December options expiry, or shortly after First Day Notice at the end of November.

As I've said on many occasions, I was very afraid of the short-term price direction...but once that had been dealt with, then I was very bullish from that point onward. It was wall-to-wall buyers at my bullion dealer's store today, as the smart investor was out buying the dip...and it's my opinion that that's what you should be doing as well, dear reader.

Well, I never heard a word back from Dave Shearim at Scotiabank yesterday, so I'm pretty much of the opinion that they are the new "non-U.S. bank" that showed up in the CFTC's October Bank Participation Report. As Ted Butler pointed out many weeks back..."JPMorgan now has a co-conspirator". It appears that we now know who that is. As a Canadian, I must admit that I was most unhappy that the Bank of Nova Scotia/Scotia Mocatta would be involved in a price fixing conspiracy of this size, as it's flat out illegal. I was hoping that our banks were above this sort of thing, but obviously not.

Although I reserve the right to be wrong about this, it's my opinion that the 'Big 4' shorts in silver are...JPMorgan, the Bank of Nova Scotia/Scotia Mocatta, HSBC USA...and most likely Citigroup. JPMorgan is the tallest hog at the trough...and is short 33% of the futures market in silver. Scotiabank is second with a bit over 11%. HSBC USA might be 5%...and Citigroup would be something less than that. What the '5 through 8' Commercial short positions holders have is immaterial.

I would also be pretty close to the mark if I considered these four bullion banks were the 'Big 4' shorts in gold as well.

Here's Nick Laird's "Concentration of Traders in Days of World Production to Cover Short Positions" chart, updated with Tuesday's COT data. The entire red bar in silver is most likely made up of the above mentioned four bullion banks...and the '5 through 8' short holders hold the tiny difference between the red bar and the green bar. This probably applies to gold as well.

  

In a court of law this is called prima facie evidence. The bullion banks know it. The CFTC knows it. The CME Group knows it. The World Gold Council and Silver Institute know it. All the precious metal mining companies know it, as well. But they all do nothing. You couldn't make this scenario up if you tried.  

 
 

 


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oddsnendsOdds & Ends

Nick Barisheff: Unallocated Gold Storage Or Accounts...Avoid This Risk When Buying Gold - GoldSilverWorlds.com

November 1, 2012

 

This is the third of a five part series that is based on a Q&A with Nick Barisheff, CEO of Bullion Management Group Inc. and author of the book "$10,000 Gold: Why Gold's Inevitable Rise is the Investor's Safe Haven." His book will be released later this year but is available now for pre-order on Amazon.com. In our first article, we discussed the single most important reason for gold's primary upward trend pointing to $10,000. The second part provided insights in the unwillingness of people and the media to see the real benefits of owning physical gold. In this third article, we look at the risks to avoid when buying precious metals.

Continue reading at GoldSilverWorlds.com

___________________________________________________

Would a second Obama term be good for gold? - MineWeb.com

Author: Geoff Candy
Posted: Friday , 02 Nov 2012

According to a note from HSBC out earlier this week there is a loose correlation between Democratic control of the White House and Congress and higher bullion prices.

While at pains to point out that this line of inquiry shouldn't be taken too far or relied on at all heavily because gold prices are influenced by far more than the red or white nature of the White House, a look at gold's performance in light of who is in charge does show some interesting trends.

Continue reading at MineWeb.com


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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.

We sell over $100 million a year in gold, silver, platinum and palladium.  We are rated A+ by the BBB.  We are recommended by many prominent newsletter writers including Doug Casey, David Morgan, Jean Paul Louvet, LeMetropole Caf�.  Our reputation for service, education, quality product and pricing is outstanding.

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