Ranting Andy: Cartel Secrets Revealed

May 31, 2011

RANTING ANDY – This week’s missive is my favorite yet, as I reveal to the world NEARLY ALL of the Gold Cartel’s illegal tricks to separate you from your money, and more importantly to keep the investing public as far as possible from the Precious Metals sector. 

Sometimes it seems like the powers that be are in full control of your life, and your destiny, and thus that the evil monsters in Washington and on Wall Street will always be able to manipulate the world to their benefit.

But not so, as the end game of the “Age of Fiat” is approaching rapidly.  The dollar is not just on life support, but now requires a team of EMT’s attending to it 24/7 with increases doses of adrenaline and shock treatments.  If anyone has seen the 1980s movie Spaceballs, the Fed’s money printing (along with the ECB, BOJ, BOE, etc.) has gone past light speed, past ridiculous speed, past ludicrous speed, and finally, into PLAID (see clip below).

http://www.youtube.com/watch?v=mk7VWcuVOf0

And if you want to see what I’m talking about graphically, check out this week’s chart of the U.S. Monetary Base, as prepared by the Federal Reserve Bank of St. Louis.  This chart depicts money supply growth that is REPORTED to the public, but not the hundreds of billions, perhaps TRILLIONS, NOT REPORTED by the Fed.  The money printing orgy is getting more intense each day, and again. DOES NOT INCLUDE perhaps trillions of printing press dollars that you never are told about, such as what goes into manipulating financial markets each day, including stocks, bonds, commodities, currencies, and, of course, the BIG KAHUNA of manipulation, PRECIOUS METALS.

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Geoff Candy: Active Commodity Management Growing in Stature

May 31, 2011

GRONINGEN – As an asset class, commodities have grown up quite significantly lately. Like a teenager who hits puberty and suddenly shoots up in height, so the range of options available to commodity investors now has seen a similar growth spurt.

And, it seems, investors are beginning to make use of these opportunities. According to a report by Barclays Capital called, “The commodity investor: dropped but not broken” the bank examines the performance of a number of these new product types, as writes: “Demand for active management by commodity investors is higher than it has ever been. Our recent Commodity Investing Survey shows that over 60% of the investors we surveyed in March are planning to use active strategies as the main way to invest in commodities over the next 12 months.”

Part of the reason for this growth in demand for active strategies, the bank says, is because of the maturation of the market.

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As the Focus Shifts from the U.S. Dollar to the Euro, All is Good for Gold

May 31, 2011

JOHANNESBURG – Luckily for US financial officials, the Greek debt crisis and Eurozone has taken center stage. It was not long ago when the United States hit their $14.3 trillion borrowing limit. The government now has until about August 2, before it begins to default on its loans, which have ballooned as the country spends more than it takes in. Now back to the crisis in Greece.

The Greek debt crisis continues as Antonis Samaras, leader of the biggest opposition party, New Democracy, rejected Papandreou’s austerity plan at a meeting with him and other opposition leaders. These fresh austerity steps were demanded by the EU and IMF, raising concerns over whether Greece will receive its next tranche of bailout loans. And, just to make matters a little worse, a government minister in Ireland said it may have to ask for another loan from the EU and IMF because it will struggle to return to debt markets to raise funds next year. The European Union and International Monetary Fund officials are expected to deliver their verdict this week about Greece’s financial dilemma.

If Greece does default, something that I personally can’t see, several large financial institutions that purchased the high yield debt will lose billions. Frankly, while I have no sympathy towards these greedy financial institutions that were enticed by the high yields without any consideration of potential risk, I am concerned about the average individual who has little idea about the impact political mismanagement can have on the value of these fiat currencies. Suddenly, they will wake up and find that the money they have worked so hard all their lives for will become worthless. While Greece’s financial situation remains perilous, there is very little mention about Belarus where a sharp devaluation of the Belarusian rubble has spread panic across the country, with people rushing  to buy dollars, euros, toasters and canned goods – anything that will not lose its value as quickly as the national currency.

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Geoff Candy: U.S. Debt Train Could Drive Gold Higher and Higher

May 31, 2011

GRONINGEN – Gold prices are currently flirting with a four week high in dollar terms largely on continued fears that the crisis in Greece could lead to some kind of contagion in markets across Europe and, potentially even further.

Indeed, the events within the euro zone have done well to take people’s attention away from the two other big macro economic stories ongoing in the world – the terrifying growth of U.S. debt and the continued growth of China and India.

Speaking to Mineweb’s Metals Weekly podcast, Michael Power, Investec investment strategist, said of the ongoing crisis, “The sentiment effect is that it probably acts as a bit of a dampener especially to traders who are often coming out of the west.  They tend to pay a lot of attention – indeed I would argue too much attention – to the macro data that’s coming out of the US and Europe, somewhat underestimating the power of the macro data that continues to come out of Asia.”

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Silver Turnover on COMEX has Tripled This Year Versus 2010

May 31, 2011

LONDON – Silver’s high fix, when it was way overbought, was $48.70 on April 28th.  Gold held up briefly as silver toppled over, but as the commodities sector as a whole got caught up in the onslaught, gold in particular, was sold in order to raise cash against margin calls.  Gold’s high fix was $1,546.50 on the morning of 3rd May.

The speed of the falls of these two metals is well-documented, but for the record, silver dropped to a low fix of $32.50 in 12th May, while gold fell to a low fix of $1,478.50 on 17th May.  These were falls of 33% and just 4% respectively.  On an intraday basis the price declines represented the unwinding of part of the most recent very sharp upward legs that had commenced in late January.  Silver’s move was unwound by 75% and while gold’s correction was obviously much shallower, it was still over 40% of the post-January move.

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Gold’s Role as a Currency is Increasing Once More

May 31, 2011

LONDON – While gold is clearly a monetary asset and will, if anything, extend its influence as the only non-fiat currency (especially following developments in Europe last week), it is clear that in recent weeks it has been moving more closely in line with the rest of the commodities sector than with currencies or other financial instruments.  Correlation analysis however shows that the relationship with the $:€ rate is tightening, while that with the G6-trade-weighted rate appears to be relatively static.  The price in euros, meanwhile, has been tightening its relationship with credit default instruments as concerns over European debt have intensified once more.

Obviously risk appetite is an important driver of short term movements in the financial sector and this has been a key to the comparative homogeneity of the commodities sector, stretching back at least as far as the collapse of Lehman Brothers.  The correlation table shown here does demonstrate, however, that “perception of risk” per se, as measured in this case by the VIX volatility index, is taking something of a back seat to currency movements, while gold and the equities are forging ever closer links – and there has been a sharp strengthening in the relationship with the ten-year bond.  All of this tends to confirm the perception that investors remain nervous and this argues for further highs in due course.  The path will not be a straight one, however, as there are still possibilities of the occasional bout of liquidation as a result of distress and in order to raise funds.  Any dollar strength is likely also to see gold falter.

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Indian Investors Bail Out of Silver

May 31, 2011

MUMBAI – Silver appears to have lost its shine for most investors in India, with many preferring to transfer funds from the white metal to the dollar and even the equities market. Traders and analysts say that most investors are a bit skittish because of the metal’s wild price swings and are wary of global concerns that could dull its shine.

“As of last August, silver jumped over 175% to around $50 at the start of May. And then, it slumped almost 35%, to hit a low of $32.33 on May 12. Though it has risen to $38.18 over the weekend, the massive ups and downs are scaring people off,” said Santosh Mahendale, equities and precious metals analyst at a foreign brokerage firm in Mumbai.
Moreover, he added the dollar index has fallen on poor housing data emanating from the United States, which was another indicator that interest rates would not be hiked in the near future.

Analysts maintain that an interest rate hike in the US before mid-2012 would likely weigh on prices, in addition to the euro-zone debt fears.

Anshuman Daga, precious metal investor said silver has fallen by 28% over the past month, from a record high of $1,680.60 per kilogram on April 25, to $1,202 per kilogram on profit booking and a stronger dollar. “Apart from profit booking by fund houses, there have been successive margin hikes by the Chicago Mercantile Exchange. The exchange has raised margins to $21,600 per future contract from $16,200 per contract. They have also increased the maintenance charges by $2,000 from $12,000. All of this has impacted prices and has made investors wary,” said Daga.

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