The war between bullish physical gold and bearish paper-gold will be entirely determined by the future of this chart.
The dollar is too large for a government to manipulate where trend is concerned. The Exchange stabilization fund will try hit and run support, but that is not enough to change the trend.
Yet another massive nail in the dollar’s coffin
December 4, 2013
On the other side of the world today, a couple of gentlemen that few people have ever heard of signed an agreement that has massive consequences for the global financial system.
It was a Memorandum of Understanding signed by representatives of the Singapore Exchange and Hong Kong Exchange. Their aim– to combine their forces in rolling out more financial products denominated in Chinese renminbi..
This is huge….
Jim Sinclair’s Commentary
Guidance from ShawdowStats.com, a must subscribe service.
– No Signs of a Growing Economy
– Intensifying Weakness in Revised Third-Quarter Trade and Construction Data Should Soften Third-Quarter GDP Growth
– Construction Spending Falters Despite Statistically-Insignificant October Gain
– New Home Sales Monthly Data Are Nonsense, Extreme Volatility and Revisions Leave Monthly Changes Meaningless
"No. 578: Trade Deficit, Construction Spending, New Home Sales "
– "Booming"� GDP Growth Not Reflected in Any Other Major Economic Indicator
– Involuntary Inventory Build-Up Spiked GDP Revision; Final Sales (GDP Less Inventory Change) Growth Revised to 1.9% from 2.0%
– Revised Headline Growth in Third-Quarter GDP Was Reported at 3.6%; GNP Was 3.9%; But GDI (the Theoretical GDP Equivalent) Was 1.4%
– Another Set of GDP Revisions in Two Weeks
"No. 579: First Revision to Third-Quarter 2013 GDP "
Jim Sinclair’s Commentary
Jim Sinclair’s Commentary
The physical versus paper war.
Silver imports surge 40 pct in Oct, hit three-month high
By Siddesh Mayenkar
MUMBAI Tue Dec 3, 2013 12:01pm IST
(Reuters) – India’s silver imports rose to a three-month peak in October and are on track to hit a record this year, data from Thomson Reuters GFMS showed, as buyers opt for the precious metal instead of expensive gold to meet high seasonal demand.
More shipments by the world’s top buyer may help underpin global silver prices that have slumped 37 percent so far this year – their biggest annual drop in at least three decades.
Silver imports jumped 40 percent to 338 tonnes in October from 241 tonnes in September, GFMS data showed, driven by demand during the festivals and weddings season that starts from October and tapers off by early May next year.
"By the end of the year, silver imports should be at 5,200-5,400 tonnes," said Sudheesh Nambiath, an analyst with Thomson Reuters GFMS. This would be more than India’s record high purchases of 5,048 tonnes in 2008.
The country has imported 4,652 tonnes of silver in the first ten months from January, GFMS data shows.
Jim Sinclair’s Commentary
This is the softest of soft loans ever.
Auto Loan Delinquency Rate Increases
The auto loan delinquency rate (the ratio of borrowers 60 days or more delinquent on their auto loans) increased to 1.04 percent in the third quarter, up on both a quarterly and yearly basis (from 0.87 percent in the second quarter and 1 percent in the third quarter of 2012).
The delinquency rate, though, is well below the third quarter average of 1.22 percent observed between 2007 and 2013.
Auto loan debt per borrower increased for the 10th straight quarter, moving up 4.7 percent from $15,943 in the third quarter of 2012 to $16,685 in the third quarter. On a quarterly basis, auto loan debt also increased from $16,410 in the second quarter.
The data provided are gathered from TransUnion’s proprietary Industry Insights Report, a quarterly overview summarizing data, trends and perspectives on the U.S. consumer lending industry. The report is based on anonymized credit data from virtually every credit-active consumer in the U.S.
The subprime delinquency rate (those consumers with a Vantage Score 2.0 credit score lower than 640 on a scale of 501-990) increased from 5.3 percent in the third quarter of 2012 to 5.6 percent in the third quarter. Despite the increase, the delinquency rate for this group remains near levels observed in recent third quarters: the third quarter 2011 – 5.45 percent; the third quarter 2010 – 5.82 percent; the third quarter 2009 – 6.59 percent.
Inventories accounted for a massive 1.68 percentage points of the advance made in the July-September quarter, the largest contribution since the fourth quarter of 2011. The contribution from inventories had previously been estimated at 0.8 percentage point. Stripping out inventories, the economy grew at a 1.9 percent rate rather than the 2.0 percent pace estimated last month.
Grant Williams: Today’s gold suppression will break just as London Gold Pool did
Submitted by cpowell on Thu, 2013-12-05 04:59. Section: Daily Dispatches
12:02a ET Thursday, December 5, 2013
Dear Friend of GATA and Gold:
December’s "Things That Make You Go Hmmm. …" letter by Grant Williams of Vulpes Investment Management in Singapore compares the current mechanisms used by central banks and bullion banks to suppress the gold price with the mechanisms used by the London Gold Pool of the 1960s, which, Williams observed, worked fine every day for a long time until suddenly it didn’t.
Williams draws heavily on the long Bloomberg News report from a week ago that raised suspicion about the daily gold price "fixing" undertaken by bullion banks in London, a report called to your attention by GATA:
Williams writes: "The last time an effort was made to manipulate the price of gold lower than the market wanted it to be, it ended in a quick 25 percent spike in the price, followed over the next decade by the manifestation of those market forces in no uncertain terms and ending in a blow-off top some 2,332 percent higher than the price at which gold had been held for two decades.
"If anything were to come of the supposed investigation into the gold price fixing and if charges were filed similar to those laid at the feet of the banks that admitted no fault in the Libor rigging, it would start a mad dash by owners of physical gold to take custody of their assets. The problem with that eventuality is that currently there are almost 70 claims on every ounce of gold in the Comex warehouse and serious doubts about the physical metal available for delivery at the London Bullion Market Association. …
"Gold is moving to ever-stronger hands, and when the dam does inevitably break again, the true price will be discovered by natural market forces, free of interference."
May we all live so long, and, in the meantime, may we all do what we can to break the dam.
The section of Williams’ letter about gold market manipulation is titled "Twisted (By the Pool)" and the whole letter is posted in PDF format at the Mauldin Economics Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Robin Bromby: Golden lining for yuan as China stocks up on price slump
Submitted by cpowell on Wed, 2013-12-04 13:24. Section: Daily Dispatches
By Robin Bromby
The Australian, Sydney
Monday, December 2, 2013
For gold to make it a 12th straight year of rising prices, the yellow metal would need to add $US427 an ounce between now and December 31.
Fat chance, you might say. And you would probably be right. For 11 consecutive years the yellow one was worth more (a lot more in some years) on December 31 than it had been the previous January. On January 1 this year trading closed at $US1,678/oz. To get back to that over four weeks would require a market miracle.
While you can still find analysts who believe the gold price will stage a meaningful recovery, there might be quite a different story to tell. Perhaps we should stop being too fixated on price (a suggestion that will fall on deaf ears with every punter reading this) and look instead at demand for physical metal (and leave aside the $US250 billion — $274.4 billion — in daily trading of various gold instruments).
First, though, Puru Saxena on price. This Hong Kong-based wealth fund manager and familiar talking head on cable business channels says precious metals are in a secular downtrend and this is not the time to swim against the tide. The party ended in 2011, he adds. Both gold and silver topped out two years ago and prices have fallen since.
"Unsurprisingly, this downtrend has stunned most gold bugs as well as their cheerleaders and these folk are still in denial," Saxena says in his latest note. And blind faith is not a sound investment strategy. Gold is now trading below the 40-week moving average, a bearish omen.
The other news concerns demand. ANZ Bank commodity strategist Victor Thianpiriya forecasts softening demand for gold and a 2014 average of $US1,269/oz. This involves a drop to $US1,150 in the March quarter, followed by slow recovery.
Part of his forecast is based on Chinese demand falling. ANZ is expecting total gold imports of 1,050 tonnes this year, which would be a 80 per cent increase on last year. He sees it dropping back to 900 tonnes in 2014, which is roughly one-third of world mine output and in addition to the 420 tonnes China is expected to mine this year.
China may be the biggest producer of gold, but still has to import 70 per cent of its needs. Thianpiriya, in concluding imports will drop next year, argues there are signs that much of the overall consumption for this year was front-loaded to the first half.
No doubt that was written before Wednesday’s Reuters report that "China’s net gold imports from Hong Kong climbed to their second-highest on record in October" at 131.19 tonnes, the sixth straight month of imports over 100 tonnes.
Not much sign of "front-loading" there: If that October figure was annualised, that would make 1,574 tonnes, or half the world’s mined production.
But we also know that unknown tonnages of gold enter China through Shanghai and Singapore.
Then there’s China’s own mine production. Plans have been announced to lift national output by 10 per cent next year, even though at one of its main producing areas, Zhaoyuan in Shandong province, mines are showing marked declines in production grades.
So here’s the latest Pure Speculation gold theory: There will be no gold surplus in 2014 (as there never has been, unlike with most metals), China will keep taking advantage of the subdued price to buy both metal and the foreign mines that produce it, and one day, probably too late, Western investors will wake up to the fact that China controls so much of the world’s gold and is using it to back the yuan as a reserve currency.
Jim Sinclair’s Commentary
Wall Street’s income comes from market manipulation, not trading.
To call what the banks do trading is an insult to those of us who have made our living on our wits.
If the game was not totally rigged with the Fed’s blessing, Wall Street could not trade their way out of a brown paper bag.
Wall Street Sweats Out Volcker Rule Impact on Revenue
By Michael J. Moore & Dakin Campbell – Dec 4, 2013 9:24 AM ET
Wall Street banks, which already shut proprietary trading units that helped fuel record profits, are girding to learn next week how much revenue the Volcker rule may cut from the $44 billion they say comes from market-making.
With U.S. regulators scheduled to vote Dec. 10, the largest firms are getting little detail about the final terms of the Volcker rule’s ban on proprietary trades, and still have basic questions about what kind of market-making will be allowed, said three senior U.S. bankers. They’re also wondering whether they’ll have to change practices or curtail business in some less-liquid markets, the bankers said.
The answers could threaten their revenue and affect transaction costs for clients of firms such as JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc. The Volcker rule is close to being adopted more than three years after it became a centerpiece of the 2010 Dodd-Frank Act, designed to prevent a repeat of the global credit crisis.
“Everything in the Volcker rule that defines what is permitted market-making, and what is not, is by far the most important part of the rule,” said David Hilder, an analyst at Drexel Hamilton LLC in New York. Regulators probably have been silent on the specifics to preserve agreements they’ve made, he said. “Outside input in the late stages of a negotiation tends to blow apart consensus.”
Jim Sinclair’s Commentary
Hyper liquidity to infinity.
Australia to ‘abolish phony debt ceiling’, continue spending-spree
Published time: December 04, 2013 13:10
Australia will dive further ‘Down Under’ into debt, as lawmakers reached a deal to do away with a limit. The government can now borrow as much as it wants, and will avoid a shutdown when it reaches the AU$300 billion debt limit on December 12.
Federal Treasurer Joe Hockey won over the Greens who had previously supported the Labor Party cap of AU$400 billion (about $373 billion). Earlier, the upper house blocked a motion to raise the debt ceiling to AU$500 billion.
The government must justify any increase in debt up to AU$50 billion Greens leader Christina Milne told reporters in Canberra.
“This, I think, will return some maturity to the debate around debt and get rid of what has become a phony debate every time the government has wanted to raise the debt ceiling,” Milne said Wednesday.
In return, Hockey promised the Greens that the budget will include comprehensive debt figures on how much the government is spending on climate change.
If lawmakers didn’t strike a deal by December 12, Australia’s $1.5 trillion economy would have gone ‘down under’ with its government forced into a shutdown.
Jim Sinclair’s Commentary
Steal what? It is already gone,
only you do not know it.
A Hard Lesson from Motown: They Will Steal Your Pension
By David Cay Johnston / December 04 2013 12:27 PM
Anyone in a public-sector job looking forward to retiring in comfort should look carefully at what is going on in Detroit and Springfield, Ill. Sherlock Holmes would call it the case of the missing pension money.
News leaking out this week from the Motor City tells how the enormous gap between the pensions workers earned and the money set aside to pay for them will be closed. By stealing from the workers.
Courts, legislatures, and corporations are all working in concert not to pay the full benefits owed. For decades, political and business leaders failed to set aside the right amount of money each payday to cover the pensions workers earned and, in some cases, covered up the mismanagement of pension fund investments.
This is nothing short of theft, as pensions are simply deferred wages, that is, money that workers could have taken as cash in their regular paychecks had they not opted to set it aside.
In Detroit, a federal bankruptcy judge handling the city’s Chapter 9 case held Tuesday decided he could safely ignore a Michigan Constitution provision barring any reduction in pension benefits to already retired public sector workers. Judge Steven W. Rhodes went beyond asserting the supremacy of federal law over state regulations, ruling that the pensions workers earned were a mere “contractual obligation,” no different from any other bill the city owes but lacks the money to pay.