Jim’s Mailbox

Posted at 3:40 PM (CST) by & filed under Jim's Mailbox.

Hello Jim,

That $1650 sure is a magnet, both on the upside and downside. I suspect we will hover around this range for the next week or so until the FOMC where Bernake will tell everyone how rosy things are, however Europe still poses a threat.  Then down goes gold I would suspect. However, I am seeing this $1650 as quite the resistance level so who knows? Then in the following weeks we’ll see more unfavourable news continuing from the US as well as sh*t hitting the fan in Spain, Arab Spring in full force, and the stock market possibly turning over. All this just in time for the June FOMC and presidential campaigning. So I think I now understand when you say June may be the turnaround time. QE to infinity.

We in Canada announced this morning our interest rates are staying on hold… for now. I work in banking so I have already fielded several calls this morning on clients wanting to ‘lock in rates’ and worried that rates may increase. If everyone is concerned about a 0.25 or 0.5% increase, what does that say about the state of the consumer? They are worried. Then I thought how the citizens of the US would feel if there was a prospect on increasing rates. Probably would feel the same and then some. Increasing rates prior to 2014? Not a chance.

Anyway, quick question though: wouldn’t all the recent negative economic news – housing starts, manufacturing indices, jobless claims… have some sort of positive impact on the price of gold? I think the manipulators are holding it down because they know the storm that is coming.

CIGA Lou Lou

Dear Lou-Lou,

It is actually the opposite. MSM mainstream media controls what people believe to be true. MSM is the source of their intellectual basis. MSM has informed everyone on a daily basis, hundreds of time a day, by wire and financial TV that the Fed has an appetite to sit and watch to see if the present weakness is the beginning of a weak economic trend or a lull in the recovery. As such, the lousy economic news is not the friend of gold until the public perceives QE in earnest. It will come and come soon. Until then, yes $1650 is the most powerful magnet among them all.

That is good because it negates those who pan gold to line their pockets with gold.

Jim

Jim,

During today’s trading there were simultaneous "V" drops and recoveries in both gold and silver.  The drop in gold was around $20.

What’s behind a move like that?  Did a large holder have to get out fast or was this a failed manipulation move?

Regards,
CIGA Stephan

Stephan,

The reason behind the V drops were manipulators at the gold banks versus cash market buyers fighting it out while most voices call for lower precious metals prices because they simply do not understand what gold is. Gold’s price detractors are wrong in thinking that the Fed can sit back and cogitate about economic indices as the bottom starts dropping out of international business without the application of enthusiastic QE

Jim

 

Jim,

In the last 25 years, the main stream media’s news has gone from the "Fourth Estate" to "Tabloid News" to finally "Propaganda".

The sad thing is that the vast majority of the population doesn’t even realize the shift. They still believe it is the Fourth Estate.

CIGA Jeff S

Dear Jeff,

It is worse than that. MSM’s mission is no different from what intelligence services do in the opposite when they wish to unsettle an enemy country.

Today’s reality is what is real to Main Street media. They are writing whatever history they want in the present. The worst still is utterances of the truth are considered as that of the enemy.

This usually is what exists at the end of empires when what is real cannot be confronted by the citizens, short of revolution.

Regards,
Jim

 

Hi Jim,

Tell me something please.

How does one remain true to oneself when many people around you aren’t ? I’m working in the financial game and it surprises me just how much money changes people. For example, I have a Director who pays me well, seems fairly balanced but will lie about anything and anyone.

It’s a pity I can’t sit down and have a cup of tea with you as you sound like a top person. Unfortunately I’m based in New Zealand and
that’s very far away.

Regards,
CIGA David

David,

Take the position of the observer, and you may become it. Try being fictional, if you wish to be real.

Judge not that you should not be judged is what I wrote above. We have to love each other, nobody ever said we had to like each other.

Some play the part of Bums. Some play the part of Saints. It really does not make any real difference.

Jim

 

Hi Jim,

Just a quick thank you for all you have done and the information you relentlessly provide the community.

Just wonder if the LME wants Chinese renminbi on hand to settle with currency rather than delivery of the metal?

CIGA Ian

Dear Ian,

Paper exchanges are not capable of becoming cash exchanges without a loud explosion. One that might be heard on Mars without a radio.

This has to do with all eyes being on the East as the Yuan grows into the International Reserve Currency of choice.

It is just another daily increase in dollar negative items that very few, if any, are looking at. See today’s message here on JSMineset concerning how a currency becomes a reserve currency and how it ceases as a reserve currency offered in the fewest words possible.

Jim

 

Jim,

Are these types of bonds more secure or is this just another game of paper shuffling?

CIGA BJS

Dear BJS,

They are just more fancy paper decorations.

Remember the axiom that states collateral is no better than the asset offered and the guarantee is never superior to the guarantor.

These are simply more Bankster marketing psy-opts programs to produce commissions while picking your pocket.

Jim

Covered Bonds in Dollars Soar to Fill AAA Vacuum
By Esteban Duarte and Jody Shenn – Apr 17, 2012 9:59 AM MT

Sales of covered bonds in dollars are surging to a record as investors snap up the secured bank notes amid a drop in supply of AAA rated alternatives, benefiting lenders from Bank of Nova Scotia to UBS AG. (UBSN)

Bank of Nova Scotia and UBS have led $23.5 billion of the mortgage-backed offerings this year, a 43 percent jump from the same period in 2011, according to data compiled by Bloomberg. Investors in the notes earned 2.04 percent in 2012, double the gain in investment-grade debt from Treasuries to corporate bonds, Bank of America Merrill Lynch and Barclays Capital indexes show.

More…

 

Paper to Cash Exchanges Would Be Accompanied By Loud BOOM
CIGA Eric

Agreed.

Paper exchanges and their key second derivative markets absorb demand and leverage paper attacks. Watch the spreads between bullion and paper markets swing from one statistical extreme to another before paper attacks to better understand why Jim screams BOOM!

Chart: Silver London PM Fixed (SLVL) And SLVL to Silver ETF Ratio ZScores (SLVLSLVR), Monthly

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Dear Ian: Paper exchanges are not capable of becoming cash exchange without a loud explosion. One that might be heard on Mars without a radio. This has to do with all eyes East as the yuan grows into the International Reserve Currency of Choice. It is just another daily increase in dollar negative items that very few, if any, are looking at See today message on jsmineset concerning how a currency becomes a Reserve Currency and how is ceases as a Reserve Currency offered in the fewest words possible Jim

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D-Wave Declines in Gold Test Patience
CIGA Eric

D-wave hooks form under and backdrop of fear and terminate when WA crosses above 50 percentile.

Chart: London PM Fixed Gold and GLD (ETF) Total Assets WA Stochastic

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Jim,

History repeats itself. Blame it on the so called speculators.

Like always, politicians are directing the debate away from the true problem on rising oil price: Currency produced cost-push inflation.

Best regards,
CIGA Christopher

Obama sees oil manipulation, vows response
By Robert Schroeder
April 17, 2012, 7:58 a.m. EDT

WASHINGTON (MarketWatch) — President Barack Obama on Tuesday morning will announce a plan to crack down on what the White House calls manipulation in oil markets. Obama will deliver a statement from the Rose Garden on the plan to increase oil-market oversight, the White House said. Energy policy has emerged as a major election-year issue between Obama and Republicans.

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Wall Street climbs, boosted by earnings, Spain debt sale
CIGA Eric

The blissful charade of headline interpretations never gets old. Wall Street climbs because liquidity lifts all boats, but the boosted earnings is the explanation investors want to read (believe).

Headline: Wall Street climbs, boosted by earnings, Spain debt sale

NEW YORK (Reuters) – Stocks rose at the open on Tuesday, with the Dow industrials climbing as much as 1 percent, as investors welcomed a slew of corporate results and a decline in borrowing costs for Spain. A better-than-expected Spanish bill sale boosted confidence as yields on Spain’s 10-year bond dipped below 6 percent before a longer-term debt auction later in the week. Spanish debt yields have jumped recently on concerns about the nation’s fiscal stability in the latest flare-up of the euro-zone debt crisis. Coca-Cola Co (NYS:KO – News) climbed 2 percent to $73.87 as one of the top boost’s to the Dow industrials after the world’s largest soft drink maker reported a higher quarterly profit. Goldman Sachs Group Inc (NYS:GS – News) edged up 0.1 percent to $117.89 after first-quarter earnings fell from a year earlier but were better than many analysts had anticipated.

Source: finance.yahoo.com

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Extremes, Divergences, and Art of Independent Thinking
CIGA Eric

Extreme readings (green circles) followed by positive divergences in breadth and/trend energy relative to price generate bullish signals.  If the financial media, also known as the dog and pony show, has been interviewing long-term bears every thirty minutes, it’s usually time to buy. 

Chart: NYSE Composite Average

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Mr. Sinclair,

I am writing you because I think you are the real deal in the precious metal markets. I am in my mid sixties and got into silver almost one year ago. I made a big mistake and purchased my physical silver at $45.88/oz. It was for me a big purchase as it was 80% of my life savings. All the males in my family history died in their sixties. So I figure I have around 10-15 years at most to go. My question is with silver now running a surplus, do you think with all the manipulation, that I have any chance of seeing silver hit my purchase price again in the next 10-15 years? I thought when I purchased it, $100/oz. was around the corner. I now see investment demand, reflected in 2012 eagle sales dropping way off, is now down. I think investors are defeated with all the crashes.

Thanks for any input you may provide me in giving me hope or direction. Are we headed for the twenties or forties?

Thanks for all you do,

CIGA Dave

David,

You are going to be ok in your silver position, however in the future you buy when weekly prices looks like a fishing line. You sell 1/3 when weekly prices looks like a Rhino horn.

Cut this out and paste it on your computer. Let us call this the "Two commandments in Precious Metals."

All the best,
Jim

 

Dear Jim,

I had some thoughts about China’s gold policy the other day and wanted your opinion. From an outside perspective it looks like the Chinese government is hoarding gold, and telling its people it is their patriotic duty to own physical gold. At first I thought they were going to eventually make a move to offer up a gold backed currency. I don’t think that is going to happen, because if the Chinese government doesn’t print paper and command cities to be built, their GDP would fall off a cliff. I have heard that below 5% growth in China would cause riots, in my mind I view a gold standard as holding governments accountable and keeping the printing in check. If that were to happen it’s my opinion they would see negative economic growth, their people would be in revolution. Also china does not have "safety nets" for their people like unemployment benefits etc, so telling their people to buy gold tells me the government wants them to hold insurance.

I don’t think the Chinese have a chance at pulling off a gold standard, but I definitely think they see a major currency event in the coming years across the board. Like a vote of no confidence in other countries ability to maintain stable currencies.

What do you think?

Cheers,
CIGA Matthew

Dear Matthew,

China is a Maoist country that likes money. The two hundred foot picture of Mao on the Hall of the People tells you all you need to know to get along in China.

The ousting of Starbucks from the center of the Forbidden City also has a message in it. Understand this, and you will understand more about our Chinese brothers. You might actually be able to work with them if you respect this.

As such, the population of China is to serve the best interest of the program for the greater good. The gold being bought by Chinese citizens is the Chinese government’s shadow inventory. If the nation needs it the civilian population will have the great honor of doing their patriotic duty by sending it in.

Small inexpensive pins made in China will be distributed to be worn in public by the citizens that have earned their patriotic status. So will you if you have gold in anywhere Chinese.

You, however, will not get a pin.

Regards,
Jim