Silver Serfer

Gold Force Majeure?

2013-05-01T04:10:00.001-07:00

So what happens when the "evil rich banks" (tongue in cheek) push paper metals to zero and thus drive physical demand to ad infinitum?

Perhaps we should ask Terrence Duffy, President and Executive Chairman of CME Group Inc,. and see what he has to say.

:40s mark of video

http://libertyblitzkrieg.com/2013/04/30/cme-president-on-gold-they-dont-want-certificates-they-want-the-real-product/

For those short on time and interest in the subject......

"What’s interesting about gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products trade down significantly, but one thing that did not trade down, was gold coins, tangible real gold. That’s going to show you, people don’t want certificates, they don’t want anything else. They want the real product."

- Terrence Duffy, President and Executive Chairman of CME Group Inc,. on Bloomberg TV (April 29, 2013)

That is just an amazing statement!

So was it the record sales of physical by the US mint, physical shortages in China, India, and Japan...or perhaps that Perth is once again working weekend shifts to get coins out? Perhaps it's the 36% premium on silver coins (which are still trading at 29 dollars+, and our local shops which had 0 gold as of yesterday), or JPM's little drop in eligible gold, or perhaps he's just wrong.

http://www.zerohedge.com/news/2013-04-26/jpmorgan-receives-no-new-comex-gold-today-converts-registered-eligible

Or we could look at a bit of history.
When the Great Housing Bubble crashed in 2007/2008 the Fed decided to monetize, or in the words of Ben "to stimulate the economy through lower interest rates", which has been followed by Japan, UK, EMU, BRICS, and Israel. (I know I missed a lot of countries). So the question on everyone's mind should be; is this a coordinated effort by central bankers, or are they acting independently and we're witnessing a currency war? This might explain a bit of Mr. Duffy's comment.

We know for sure, the Fed owns over 4% of the US housing market, Japan has devalued 20% YTD, China is setting up trade clearing accounts with many independents, and "the GDP deflator was 1.838% (1.8%.............I honestly can add nothing, just repeat............1.8%). Add in a touch of foreign bank buying of US Treasuries (most notably China and Japan. The first to devalue, the latter to keep inflation in check) and you end up with a lot of folks willing to take no yield on money. Thus they loose confidence in manipulated markets, purchase physical and wait for the debt to clear and the New Great Depression to subside. (To be fair, manipulation may be a strong word but interest rates, gold and silver are set/maintained by bankers. Perhaps we should touch on LIBOR, CDS pricing, HFTs, derivative position with zero chance of clearing, a debt/GDP ratio masked by hidden additions, Cypriot confiscations and the FDIC's post Dodd-Frank implications, and of course US Treasuries Gold/Silver reserves)

So what happens when the "evil rich banks" (tongue in cheek) push paper metals to zero and thus drive physical demand to ad infinitum?

Cyprus Capital Restrictions Detailed

2013-03-28T03:25:00.000-07:00

http://www.telegraph.co.uk/finance/financialcrisis/9958595/Cyprus-imposes-capital-controls-the-measures.html

4D Record

2013-03-13T05:11:00.000-07:00

As a bookmark, please note the call for the next 5 years "liquidate all assets buy metals" 3/13/13

Greece is Fixed, again

2013-03-12T15:39:00.002-07:00

http://www.guardian.co.uk/world/2013/mar/11/yannis-stournaras-greece

Argentine Inflation = Hot Money

2013-02-04T21:46:00.000-08:00

Nothing like pegging your currency to a nation with very low inflation...like the US for example.

http://modernmoney.wordpress.com/2011/01/31/argentina-inflation-due-to-pegged%C2%A0currency/

and that leads to......

http://www.zerohedge.com/news/2013-02-04/argentina-freezes-supermarket-prices-halt-soaring-inflation-chaos-follow

Debt to GDP

2013-02-04T21:39:00.000-08:00

Interesting article about historical growth rates for nations based on size (market cycle) and Debt/GDP ratios, and inflationary averages.

GROWTH IN A TIME OF DEBT
http://www.nber.org/papers/w15639.pdf?new_window=1
by
Carmen M. Reinhart
Kenneth S. Rogoff

Notes"
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES (does not include private investors)

FHDebt/GDP Ratio grew 7.5% YoY to 40.49% in October of 2012

http://www.treasurydirect.gov/NP/BPDLogin?application=np
DEBT HELD BY THE PUBLIC
PDebt/GDP Ratio grew 7.7% YoY to 82.8% in October 2012

With the contraction in 4Q 2012 of .1%, and a slight underestimation of the deflator, it's likely PH/GDP is above 85%.
If CPI is allowed substituted for the deflator it's quite likely the ratio is over 90% on 1/1/2013, we'll just have to wait on the releases to find out.

Credit Supernova! by Bill Gross

2013-01-31T20:20:00.001-08:00

http://www.pimco.com/EN/Insights/Pages/Credit-Supernova.aspx#.UQp3KOIdHWo.twitter

Greek Newz

2013-01-31T20:10:00.002-08:00

In Greece, purchases of more than 500 bucks must be transacted via credit card to ensure proper tax collections....that's if you have the money.
Seizing bank accounts without due process:
http://www.imerisia.gr/article.asp?catid=26516&subid=2&pubid=112986874

In other news, the bankers confess they hosed the people of Greece???
Confessions of the IMF:
http://www.imerisia.gr/article.asp?catid=26516&subid=2&pubid=112987058

Meet the Money Factory

2013-01-29T19:47:00.004-08:00

Great name for a website....

http://www.moneyfactory.gov/

And....We're Out of Silver

2013-01-29T19:42:00.002-08:00

http://www.treasurydirect.gov/govt/reports/pd/mspd/1943/opdm021943.pdf
2/1/1943 - Report showing silver dollar holdings by treasury to equal 361,805,991.7 oz.
Silver holdings of 1.17b oz.

On the treasury FAQ page the following:
http://www.treasury.gov/resource-center/faqs/Currency/Pages/edu_faq_currency_sales.aspx

Question:

I have some old silver certificates. How can I trade them in for silver dollars?

Answer:

On March 25, 1964, C. Douglas Dillon, the 57th Secretary of the Treasury announced that silver certificates would no longer be redeemable in silver dollars. This decision was pursuant to the Act of June 4, 1963 (31 U.S.C. 405a-1). The Act allowed the exchange of silver certificates for silver bullion until June 24, 1968. This was the deadline set by the Congress. Since that date, there has been no obligation to issue silver in any form in exchange for these certificates. You may be interested to know that the Congress took this action because there were approximately three million silver dollars remaining in the Treasury Department's vaults. These coins had high numismatic values, and there was no way to make an equitable distribution of them among the many people holding silver certificates.

Silver certificates are still legal tender and do still circulate at their face value. Depending upon the age and condition of the certificates, however, they may have a numismatic value to collectors and dealers.

That's 2,828,619 oz

http://www.treasury.gov/about/organizational-structure/ig/Documents/oig11004.pdf

2009/2010

7,075,171.14oz

As of 12/5/12 deep storage had not changed from the 7m oz of 2009/2010.

http://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG13018.pdf

This article appeared...source is reputable, though often appears overly pessimistic on silver supplies.

http://www.silverdoctors.com/is-ted-butlers-silver-panic-imminent-apple-contractor-claims-new-imac-production-delayed-over-silver-shortage/

Interesting, when put in perspective of:

http://www.safehaven.com/article/5204/the-real-silver-deficit

Art Cashin - We Are At Risk Of A Frightening Hyperinflation

2012-10-15T18:16:00.000-07:00

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/10/12_Art_Cashin_-_We_Are_At_Risk_Of_A_Frightening_Hyperinflation.html

It's Only Monetizing Debt if it's Done Permanently

2012-10-04T10:34:00.001-07:00

Amazing, absolutely amazing. I'll let Ben speak for himself:

"By buying securities, are you "monetizing the debt"--printing money for the government to use--and will that inevitably lead to higher inflation? No, that's not what is happening, and that will not happen. Monetizing the debt means using money creation as a permanent source of financing for government spending. In contrast, we are acquiring Treasury securities on the open market and only on a temporary basis, with the goal of supporting the economic recovery through lower interest rates. At the appropriate time, the Federal Reserve will gradually sell these securities or let them mature, as needed, to return its balance sheet to a more normal size."

Full text: http://www.federalreserve.gov/newsevents/speech/bernanke20121001a.htm

As a follow up question, perhaps we should ask if this will work the same way with the nearly 1T in MBS purchases.

http://www.federalreserve.gov/releases/h41/Current/

Pottersville

2012-10-02T17:31:00.004-07:00

http://www.pimco.com/EN/Insights/Pages/Pottersville.aspx

Federal Reserve: 10 Things Every American Should Know

2012-10-02T17:30:00.001-07:00

http://billtotten.wordpress.com/2012/10/02/ten-things-that-every-american-should-know-about-the-federal-reserve/

Is Silver Money?

2012-10-02T16:33:00.006-07:00

http://seekingalpha.com/article/898151-is-silver-money

Curiouser and Curiouser

2012-10-02T16:33:00.000-07:00

http://www.zerohedge.com/news/2012-10-02/ecb-eur22-trillion-missing

Bond Bubble

2012-09-30T18:51:00.003-07:00

It seems there is a lot of speculation on this subject, I would offer a conjecture. There is not in a bubble at present, but if inflation begins to rise a bubble could be imminent. Therefore, I'd suggest watching CPI closely and make buddies with your local recycling center owner.

http://online.wsj.com/article/SB10000872396390443884104577645470279806022.html

Don't Piss Off the US Government

2012-09-30T18:40:00.001-07:00

Or they will shut you down....there seems to be a pattern.

http://www.bloomberg.com/news/2012-09-30/sec-sues-the-one-rating-firm-not-on-wall-street-s-take.html

Spain is Fixed (part 4 gazillion)

2012-09-30T18:32:00.002-07:00

http://mobile.bloomberg.com/news/2012-09-29/spain-plans-267-billion-of-debt-amid-rescue-pressure-correct-

Protection Money

2012-09-30T18:30:00.001-07:00

Our Government is protecting us again, now don't you feel safer?

http://www.bloomberg.com/news/2012-09-11/u-s-said-set-to-target-first-non-bank-firms-for-scrutiny.html

And It's Pretty

2012-09-29T15:29:00.003-07:00

http://www.bloomberg.com/news/2012-09-26/hedge-funds-bullish-on-silver-as-hoard-nears-record-commodities.html

In Defense of Supply Side Economics

2012-09-29T15:23:00.000-07:00

Lack of aggregate demand is often sited as a problem leading to recessions, and thus the government must compensate for demand losses with stimulus (deficit) spending in order to maintain the status quo until such time as demand recovers.

I demand a Saturn cruise, a cable bill that is only $1.00, and free tacos on Tuesdays. It's called supply and demand, not demand, and not supply; however, one can have all the demand in the world...but that doesn't mean the product will ever exist. Hell, I'd really like a personal robot to iron my clothes.

Supply Comes First. (PERIOD)

I argue that if the government would allow for free unfettered capitalism, we would pull out of our current mess without the monetary and fiscal spending. Let innovators do what they do, get the EPA, IRS, and OSHA off there backs. It would encourage jobs which lead to higher wages which lead to increases in aggregate demand via the wealth effect.

This really doesn't seem difficult, perhaps you just need a lack of education to figure it out.

(and for liverals that read this and want to argue the use of the word "unfettered" may I just take a moment to say limitations based on libertarian principles is my definition, but you really need to stop being so nit picky on wording)

New Jobs in Demolition

2012-09-29T15:03:00.001-07:00

Chinese company ordered to divest itself from energy sector.
http://www.businessinsider.com/obama-demands-china-divest-from-windfarm-and-rip-up-everything-theyve-already-built-2012-9

Cheap rent...for a bit

2012-09-26T17:13:00.001-07:00

http://www.foxnews.com/us/2012/02/06/16-house-dallas-area-man-evicted-after-squatting/

More Pain in Spain

2012-09-26T17:11:00.001-07:00

As a footnote, this sort of thing doesn't happen in the Western world, not in civilized countries, AND CERTAINLY NOT IN THE UNITED STATES OF AMERICA.

http://www.dailymail.co.uk/news/article-105333/Demonstrators-riot-Spain.html