Sunday, June 9, 2013
Tuesday, May 28, 2013
Chinese America Summit and Gold
News is bubbling out about the June 7-8, 2013 summit in California, between Chinese President Xi Jinping and United States President Barrack Obama. There is are plethora of issues that are being mentioned. From territorial disputes in Asia and the Chinese backing of Iran that is frustrating to the Obama administration, to copy right infringements and cyber security. Certainly these are all important issues, but one has to wonder why any of these issues would prompt a face to face meeting between the two leaders being moved up in date by months and the odd circumstances around the meeting being held in California and not in DC with ordinary large delegations.
Look back over the past year and you will find lot's of military deployments by the US in Asia and the responses by the Chinese that include an incursion into India and increase rhetoric toward Japan, the Philippines and Taiwan. For sure these topic will be discussed, but I have a different theory about the urgency and main topic of the summit, GOLD.
China snub the US last fall by sending a low level diplomat to the talks in Japan following the FED's QE to infinity announcement in September. They followed that up by going on a tear, and buying gold on a massive scale. Then in April there was a huge sell off on the Comex of paper gold. The amount was so large that it is hard to believe it didn't have central bank backing, due to it's scale and timing in after hours thinly traded markets. This type of action should it occur without approval in any market would certainly draw the attention of CFTC regulators. That type of selling is only done to manipulate market price, a normal sale would not draw the best price under these circumstances. This action may have blown out Chinese stop losses and forced their liquidations(pure conjecture on my part). Then we had the G-7 meeting hastily called in the early part of May in London. The west is likely caught and Obama is hoping to talk his way out of a major confrontation with the Chinese over US money printing. Gold is the anti dollar and the best weapon the Chinese have against the Americans and their massive advantage of the reserve currency and unlimited dollar creation. Their opposition is not so much for economic reasons, but geopolitical necessity. Likely all the market action is forced by this reality and the banks and whoever else is more then willing to make a fortune and call it their patriotic duty or "GOD's" work if you prefer. The error most precious metal commentators make is to assume "free" markets will trump the manipulations when in fact it is unpredictable geopolitics that is the real straw likely to break the camels back.
So where does that leave us? Well, I think it leaves us with sideways markets across the board. I do not see the FED allowing the President to head into such an important meeting with any further signs of weakness. I suspect the bond market will strengthen and PM's and stocks will head straight east on the charts going into the summit. The real question is how do we interpret the results of the meetings. We will likely see a lot of happy talk from the summit either way, with any sell offs waiting till mid month to begin so as not tip the markets into believing the summit was the cause. This would be an ominous sign that the Chinese dug their heels in and gold will move higher and soon. However, if we see gold trends sideways with stocks resuming their slow march higher this will be negative for gold long term and signal capitulation of the Chinese. The problem with this is I do not believe the Chinese can afford to capitulate on gold to the Americans. They do not have a military that can compete with the Americans and that leaves gold and cyber attacks as the only options to resist the Americans. The Americans will respond with higher gold prices and the move might be stunning. Followed by the stock market and sideways movement in bonds. Emerging market money will move back home due to political uncertainty and we will see civil unrest around the world spread. Stocks will correct slightly and the FED will lock down the bond market. Long term, all hell will break loose, but initially the Americans will be defiant.
This is just my two cents mid you, pure speculations, but it is what my tea leaves are telling me. You will have to divine yours for yourself and take appropriate actions.
Look back over the past year and you will find lot's of military deployments by the US in Asia and the responses by the Chinese that include an incursion into India and increase rhetoric toward Japan, the Philippines and Taiwan. For sure these topic will be discussed, but I have a different theory about the urgency and main topic of the summit, GOLD.
China snub the US last fall by sending a low level diplomat to the talks in Japan following the FED's QE to infinity announcement in September. They followed that up by going on a tear, and buying gold on a massive scale. Then in April there was a huge sell off on the Comex of paper gold. The amount was so large that it is hard to believe it didn't have central bank backing, due to it's scale and timing in after hours thinly traded markets. This type of action should it occur without approval in any market would certainly draw the attention of CFTC regulators. That type of selling is only done to manipulate market price, a normal sale would not draw the best price under these circumstances. This action may have blown out Chinese stop losses and forced their liquidations(pure conjecture on my part). Then we had the G-7 meeting hastily called in the early part of May in London. The west is likely caught and Obama is hoping to talk his way out of a major confrontation with the Chinese over US money printing. Gold is the anti dollar and the best weapon the Chinese have against the Americans and their massive advantage of the reserve currency and unlimited dollar creation. Their opposition is not so much for economic reasons, but geopolitical necessity. Likely all the market action is forced by this reality and the banks and whoever else is more then willing to make a fortune and call it their patriotic duty or "GOD's" work if you prefer. The error most precious metal commentators make is to assume "free" markets will trump the manipulations when in fact it is unpredictable geopolitics that is the real straw likely to break the camels back.
So where does that leave us? Well, I think it leaves us with sideways markets across the board. I do not see the FED allowing the President to head into such an important meeting with any further signs of weakness. I suspect the bond market will strengthen and PM's and stocks will head straight east on the charts going into the summit. The real question is how do we interpret the results of the meetings. We will likely see a lot of happy talk from the summit either way, with any sell offs waiting till mid month to begin so as not tip the markets into believing the summit was the cause. This would be an ominous sign that the Chinese dug their heels in and gold will move higher and soon. However, if we see gold trends sideways with stocks resuming their slow march higher this will be negative for gold long term and signal capitulation of the Chinese. The problem with this is I do not believe the Chinese can afford to capitulate on gold to the Americans. They do not have a military that can compete with the Americans and that leaves gold and cyber attacks as the only options to resist the Americans. The Americans will respond with higher gold prices and the move might be stunning. Followed by the stock market and sideways movement in bonds. Emerging market money will move back home due to political uncertainty and we will see civil unrest around the world spread. Stocks will correct slightly and the FED will lock down the bond market. Long term, all hell will break loose, but initially the Americans will be defiant.
This is just my two cents mid you, pure speculations, but it is what my tea leaves are telling me. You will have to divine yours for yourself and take appropriate actions.
Sunday, February 12, 2012
Backpacking is my drug of choice. Nothing quite gives me the same high, as mountain air and drains the tension like hauling a pack over a five thousand foot pass. My guess is, we could substantially cut the pharmaceutical companies profits, by simply taking a little time, producing a little sweat and gaining a little perspective.
If you've got too much on your mind or your view of life seems gloomy. Just take a trip to the best psychiatrist on the planet, Mother Nature.
Friday, March 25, 2011
The Silver Patriots
Our world has experienced numerous revolutions and rebellions . Each one has specific objectives, but all revolve around the basic premise that those in charge are failing to meet the expectations of those they govern.
Revolutions and rebellions by their very nature encompass a power struggle. The present power regime never desires to give up it's power with a fight. Thus conflict begins as the resolve of both sides are test in order to procure a victor. The conflict is often violent with deaths and injuries. If this occurs, there is never reconciliation between the two sides. The victor punishes and often kills the loser. next comes the non violent revolution/rebellion, the Gandhi and Martin Luther king kind. There may be deaths and injuries, but the possibility that reconciliation can be achieved in this type of power struggle is good.
Today we have financial Tierney. Governments and corporations control news media, financial markets and even individuals. It is more dangerous then ever to have a revolution/rebellion in this age. The powers that be are very well equipped to control physical aggression of protesters and their ability to crush and harm is without president in the world. Evil is too prevalent within the powers making the only logical alternative a non violent revolution/rebellion.
Not the type of MLK or Ghandi, but financial non violent civil disobedience coupled with active legal aggressive action. These action take the form of funds with drawl, no payment of debts, and my favorite purchase of precious metals.
This pro active action of exchange of paper fiat for suppressed precious metals is the ultimate weapon,. capable of slaying the evil empire of corruption and greed. Those who answer the calling, I refer to as Silver Patriots. It take intelligence and faith. the minions constantly work to dis inform the public and dis wade the Silver Patriot from his/her calling. However, just as the minute men of old defeat a British army of superior skill and out fit, the Silver Patriot will like wise prevail.
Revolutions and rebellions by their very nature encompass a power struggle. The present power regime never desires to give up it's power with a fight. Thus conflict begins as the resolve of both sides are test in order to procure a victor. The conflict is often violent with deaths and injuries. If this occurs, there is never reconciliation between the two sides. The victor punishes and often kills the loser. next comes the non violent revolution/rebellion, the Gandhi and Martin Luther king kind. There may be deaths and injuries, but the possibility that reconciliation can be achieved in this type of power struggle is good.
Today we have financial Tierney. Governments and corporations control news media, financial markets and even individuals. It is more dangerous then ever to have a revolution/rebellion in this age. The powers that be are very well equipped to control physical aggression of protesters and their ability to crush and harm is without president in the world. Evil is too prevalent within the powers making the only logical alternative a non violent revolution/rebellion.
Not the type of MLK or Ghandi, but financial non violent civil disobedience coupled with active legal aggressive action. These action take the form of funds with drawl, no payment of debts, and my favorite purchase of precious metals.
This pro active action of exchange of paper fiat for suppressed precious metals is the ultimate weapon,. capable of slaying the evil empire of corruption and greed. Those who answer the calling, I refer to as Silver Patriots. It take intelligence and faith. the minions constantly work to dis inform the public and dis wade the Silver Patriot from his/her calling. However, just as the minute men of old defeat a British army of superior skill and out fit, the Silver Patriot will like wise prevail.
Thursday, February 10, 2011
Quiet Before the Storm
An eerie calm has formed in the States lately. As if the populous senses something bad is on the rise.
We find our government speaking out against Egyptian President Mubarak and yet the moral authority we have taken for granted for 60-70 years is strangely absent. How is that President Obama feels so compelled to advise Mubarak to obey the Egyptian people, when he dismisses the will of his own citizens. He somehow has come to believe that his authority is more then the office of President affords him. For instants, he took an oath to up hold the constitution and laws of the United States. Yet he feels he can ignore the blatant criminal activity that caused the present financial crisis. Think that it is under his discretion to forgive these crimes without them even being acknowledge little lone corrected. He believe that the people's desire for a healthcare system grants him automatically to decide what that system looks like without citizens input. These are certainly egregious but pale in comparison to his self appointment as head of corporate America. Were by he used the office of the president to further corporate American interests around the world without any attempt to seek the will of the American people.
I for one feel such matters are extremely dangerous. The government is first and foremost a government by and for the people. People are to run the corporations with the interest of the owners or shareholders in mind. For our government to take up that mantel means that it is in direct opposition to many of it's people who may have interest that are directly contrary to the corporation. Such as polluting or workers rights. Stepping over this obvious conflict has corrupted the government, perhaps irrevocably.
The citizens sense this. The Watch as a private entity, the Federal Reserve conducts itself, not in the direct interest of the people but as central planners. Assisting the banks and corporate America in their futures, which most likely are in direct opposition to the American people. A very strong case can be made that the banks should have been nationalized.
Then you have the discerning individuals that watch as the regulator bodies within our government become completely captured. Nowhere is this more apparent right now then with the CFTC. Having been given a mandate to correct the commodities markets they are instead choosing to hold staged public meetings and fashion rules that add procedures that further muddy the water and allow market manipulation to continue. We are standing on the edge of the silver market which has been so poorly managed and manipulated that the price has created huge demand which can not possibly be met. It will end with a complete collapse of the market or insolvency of a huge financial institution which will require additional bail outs.
So, we wait paused motionless. Needing desperately to get on with commerce and yet unable to move forward due to uncertainty that the worst is yet to come. It would have been better to have nationalized the banks, Cancelled the derivatives and modified mortgages in order to stabilize the economy and put the crisis behind us. Not that such actions would not have caused pain. They most certainly would have. However, they would have allowed for a resolution of the crisis and a point at which we could have rebuilt.
Sunday, January 30, 2011
Silver Studs or Pump and Dump?
Quite a week it was in the precious metal markets. After a week of unrelenting attacks by the large banks to hold down the price of the metals and more importantly to keep futures contracts from growing in the all important delivery month of (silver)March 2011.
Several interesting deployments have been forming in the market and the propaganda machine that manipulates it. The markets continue to see the privately negotiated transactions(TPN) stay high around March silver futures contracts. Most are interpreting this as cash settlements used to keep futures contracts from taking physical delivery. This would indicate that the ability to deliver physical silver is failing and to keep from defaulting the Comex and probably Banks such as JP Morgan and HSBC are willing to pay a premium to keep the wheels from coming off. The problem with this strategy is that with each passing month the traders become bolder. Increasing the OI (open interest) and they have more capitol with which to finance there raids given the more then likely generous premiums they are getting paid not to take delivery from earlier months. It can't go on forever. Mine production will have to increase which will raise cost, due to the fact that silver is often a by product of other industrial metals and gold mining. Therefore silver's production cost can be off set by the other metals. If however demand for other metals like copper falls due to a weakening world economy. Then mines will be looking to reap the silver at a production cost, which is considerably higher then were it is now. Some think Asian demand for industrial metals won't let that happen, but with city in China without people and the west buying less goods due to weak economies the demand may fall considerably. Also plenty of news stories about China bringing in commodities into one port and shipping them to Japan from another to keep up the appearance of growth.
Another complicating factor is all the printing from central banks around the world, particularly the United States. Six hundred billion in November 2010 and more likely once the debt ceiling and June 2011 date rolls around. June will be the time when the six hundred billion is used up and more is required.
So, what is to be done by the average? Does he buy silver as it rises. Hoping to profit from higher prices in the futures. Should he sell into the rallies, believing that he is being manipulated to pull physical out of the paper market and that real demand will fall as the prices rises out of the reach of an indebted public?
Should he look to invest in a more liquid silver vehicle such as an ETF or silver mining stocks, so as to capture the rise and still be able to hit the exit easily with the stroke of a keyboard? Good question.
I picked up most of my physical in March 2010 when the CFTC hearing broke and the manipulation scandal that most of us thought was taking place, reached the public and gained recognition. Since then I have only picked up Eagles and small bars on pull backs when small high quality ingot bars can be had. I am trying to cover myself by buying and holding Sprott's Managements ETF PSLV. To me this gives me the luxury of riding the price up and selling easily while being able to get my hands on physical if I so choose. I will more then likely take profits into March and look to reload in April for May delivery. That's my strategy. My method of timing is for another day.
In closing, let me caution all on two points. One I'm doing this, not advising anyone to do anything. Just thinking out loud and if someone comments and gives me better wisdom then great. I'll take it. Second, watch out for the stories of shortages and people on message boards pumping silver. Never hurts to assume the worse of these articles and people. Do your own research. It is not hard to visit online dealers all over the world and look for outages of silver or premiums rising. What these shortages mean and who is buying is the key. Are their strong hands buying, determined to hold as an investment or just manipulating the price and will dump the supply back on the market at some point caution the price to fall like a rock. It's each persons call, lots of thought and research should go into it and for me a lot of prayer. Till next time, it's time to milk the cows.
Several interesting deployments have been forming in the market and the propaganda machine that manipulates it. The markets continue to see the privately negotiated transactions(TPN) stay high around March silver futures contracts. Most are interpreting this as cash settlements used to keep futures contracts from taking physical delivery. This would indicate that the ability to deliver physical silver is failing and to keep from defaulting the Comex and probably Banks such as JP Morgan and HSBC are willing to pay a premium to keep the wheels from coming off. The problem with this strategy is that with each passing month the traders become bolder. Increasing the OI (open interest) and they have more capitol with which to finance there raids given the more then likely generous premiums they are getting paid not to take delivery from earlier months. It can't go on forever. Mine production will have to increase which will raise cost, due to the fact that silver is often a by product of other industrial metals and gold mining. Therefore silver's production cost can be off set by the other metals. If however demand for other metals like copper falls due to a weakening world economy. Then mines will be looking to reap the silver at a production cost, which is considerably higher then were it is now. Some think Asian demand for industrial metals won't let that happen, but with city in China without people and the west buying less goods due to weak economies the demand may fall considerably. Also plenty of news stories about China bringing in commodities into one port and shipping them to Japan from another to keep up the appearance of growth.
Another complicating factor is all the printing from central banks around the world, particularly the United States. Six hundred billion in November 2010 and more likely once the debt ceiling and June 2011 date rolls around. June will be the time when the six hundred billion is used up and more is required.
So, what is to be done by the average? Does he buy silver as it rises. Hoping to profit from higher prices in the futures. Should he sell into the rallies, believing that he is being manipulated to pull physical out of the paper market and that real demand will fall as the prices rises out of the reach of an indebted public?
Should he look to invest in a more liquid silver vehicle such as an ETF or silver mining stocks, so as to capture the rise and still be able to hit the exit easily with the stroke of a keyboard? Good question.
I picked up most of my physical in March 2010 when the CFTC hearing broke and the manipulation scandal that most of us thought was taking place, reached the public and gained recognition. Since then I have only picked up Eagles and small bars on pull backs when small high quality ingot bars can be had. I am trying to cover myself by buying and holding Sprott's Managements ETF PSLV. To me this gives me the luxury of riding the price up and selling easily while being able to get my hands on physical if I so choose. I will more then likely take profits into March and look to reload in April for May delivery. That's my strategy. My method of timing is for another day.
In closing, let me caution all on two points. One I'm doing this, not advising anyone to do anything. Just thinking out loud and if someone comments and gives me better wisdom then great. I'll take it. Second, watch out for the stories of shortages and people on message boards pumping silver. Never hurts to assume the worse of these articles and people. Do your own research. It is not hard to visit online dealers all over the world and look for outages of silver or premiums rising. What these shortages mean and who is buying is the key. Are their strong hands buying, determined to hold as an investment or just manipulating the price and will dump the supply back on the market at some point caution the price to fall like a rock. It's each persons call, lots of thought and research should go into it and for me a lot of prayer. Till next time, it's time to milk the cows.
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