Jim Sinclair’s Commentary
Are you tired of those Gold banks that specialize in stealing your gold price lollypop on a daily basis, as they did once again today? I am.
There is only one way that we can permanently corral these costly nuisances.
If you can afford to buy 100 ounces of gold, buy it as the near trading month future on the Comex and then take delivery. Please move your gold bar or bars out of the Comex warehouse. You will have no problem reselling a bar like a Johnson Matthey or some other major refiner registered serial numbered bar.
The Comex requirement of re-assay before sale is simply a means to dissuade you from removing your gold from their warehouse. It only applies to sales on the Comex.
The entire process can be handled at every point with you by CIGA JB Slear. He has promised not to solicit you but only to serve you.
CIGA JB Slear can be reached at the following:
Fort Wealth Trading Co. LLC
866-443-0868 ext 104
Please for all of us, and certainly for your best interest, do the necessary.
There is no other means of defense against these grinches. It is the only way to stop our pockets being picked daily as the Comex sees itself being moved toward a cash exchange by the longs.
If you have the financial capacity to do this and do not then do not moan when these knuckle dragging apes knock a few hundred dollars off gold from time to time while the physical market is devoid of gold due to massive demand (like now).
Comex Gold Surges As Dollar Falls, Oil Soars
Thu, Dec 11 2008, 19:38 GMT
By Allen Sykora
Gold futures hit a seven-week high Thursday as the dollar tumbled, crude oil rallied sharply and investors turned to the metal as an alternative to low or non-existent yields in the Treasury markets, analysts said.
Nevertheless, gold stalled around chart resistance and some profit-taking set in after a sharp run-up in recent days.
February gold rose $17.80 to $826.60 an ounce on the Comex division of the New York Mercantile Exchange.
"We broke some major technical levels on the dollar index, which is going to be supportive for gold going forward," said Rob Kurzatkowski, futures analyst with optionsXpress.
The dollar index fell as far as 83.282, its weakest level since Oct. 30. And the euro hit a high of $1.3403 that was its strongest level against the greenback since Oct. 20. Traders often turn to gold as a hedge against dollar weakness.
"The dollar looks like it has broken out of its trading range and we may have seen a top in the dollar for a while," said Bill O’Neill, one of the principals with LOGIC Advisors.
Jim Sinclair’s Commentary
The Comex gold bear manipulation must be stopped. Demand today in the physical market was immense yet the Comex knocked $20 off the gain.
Fear triggers gold shortage, drives US treasury yields below zero
By Ambrose Evans-Pritchard
Last Updated: 9:26AM GMT 11 Dec 2008
The investor search for a safe places to store wealth as the financial crisis shakes faith in the system has caused extraordinary moves in global markets over recent days, driving the yield on 3-month US Treasuries below zero and causing a rush for physical holdings of gold.
"It is sheer unmitigated fear: even institutions are looking for mattresses to put their money until the end of the year," said Marc Ostwald, a bond expert at Insinger de Beaufort.
The rush for the safety of US Treasury debt is playing havoc with America’s $7 trillion "repo" market used to manage liquidity. Fund managers are hoovering up any safe asset they can find because they do not know what the world will look like in January when normal business picks up again. Three-month bills fell to minus 0.01pc on Tuesday, implying that funds are paying the US government for protection.
"You know the US Treasury will give you your money back, but your bank might not be there," said Paul Ashworth, US economist for Capital Economics.
The gold markets have also been in turmoil. Traders say it has become extremely hard to buy the physical metal in the form of bars or coins. The market has moved into "backwardation" for the first time, meaning that futures contracts are now priced more cheaply than actual bullion prices.
Jim Sinclair’s Commentary
This is a global event caused by a singular scam. That scam is OTC derivatives. OTC derivatives have turned a normal economic correction into a global disaster.
Financial life has met its global killer and will not survive.
Until the focus of fixing looks at OTC derivatives as the only culprit, no solution can be anticipated ever.
The longer it takes for derivates to take the problem limelight, the less chance there is for anyone to do anything but sit back and watch the world implode.
Globally at the instant this started, all OTC derivative of all kinds should have been drafted into a Resurrection Trust, taking the profits from the profit makers and loses from the loss makers.
All the derivative makers should have been arrested and their assets seized. Those entire assets would be credited to the Resurrection Trust.
All tax havens and bank secrecy states would have to cooperate only where the OTC derivative culprits are concerned or their banks would get no part of the pie. Actually if you had done that the math would have worked.
The only problem with this plan is then there would not be jails big enough. The District of Columbia would be a wasteland and country clubs would have been decimated. The Columbus Club would be empty and there would be no more bridge games at Jimmy’s condominium mansion.
BOJ’s Nishimura Sees No End to Financial Turmoil (Update1)
By Mayumi Otsuma
Dec. 10 (Bloomberg) — Bank of Japan Deputy Governor Kiyohiko Nishimura said there’s no end in sight to the global financial crisis that began with the collapse of the U.S. home mortgage industry last year.
“The turmoil in financial markets and the financial system, which was triggered by the U.S. subprime loan problems, continues to spread worldwide,” Nishimura said in a speech in Tokyo today. He said Japanese banks are becoming more wary of lending to small businesses as the economy stagnates.
The credit crunch in the U.S. and Europe has spread to Japan, as investors grow reluctant to lend cash on concern companies won’t be able to repay debt. Japan’s first recession since 2001 is deepening as companies including Sony Corp. and Toyota Motor Corp. cut production, jobs and spending.
“With the global economic slowdown prolonging, it’s becoming increasingly clear that Japan is slipping into a severe recession,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “The Bank of Japan will be forced to take more policy action eventually.”
Nishimura said that while being more prudent about lending may seem reasonable to individual banks, if they all hoard cash at the same time that would worsen the economic slowdown.
Jim Sinclair’s Commentary
This is a global event caused by a singular scam. That scam is OTC derivatives. OTC derivatives have turned a normal economic correction into an irreversible global disaster.
Heavy withdrawals hit Gaisano bank as more banks close
CEBU CITY — Alarmed by the bank holidays declared by rural banks under the Legacy Group, depositors have flocked to a Gaisano-owned bank since Wednesday in a bid to withdraw their money.
Three of the seven branches of the Rural Bank of Subangdaku (RBS) in Metro Cebu and one in Dumaguete City in Negros Oriental suffered from heavy withdrawals since Wednesday, said spokesperson and administrative manager Maritess Obenza.
Despite this, she assured that they had no plan to declare a bank holiday in any of the affected branches.
"The board (of directors) is still meeting on how to address the withdrawals although we have contained these because we were able to explain to our depositors and convince them that there’s no need to panic," Ms. Obenza said.
RBS depositors panicked after rural banks under the Legacy Group declared bank holidays. The affected RBS branches are located near the Legacy banks.
Jim Sinclair’s Commentary
Here it comes on a global basis. That is Quantitative Easing plus Fiscal Stimulation at the same time. QE means saturation bombing the world with newly minted money.
U.K. May Expand Toolkit to Halt Recession Slide (Update3)
By Gonzalo Vina
Dec. 10 (Bloomberg) — The U.K. government and central bank are considering plans to pump billions of pounds into the economy as the bank rescue package and the lowest interest rates since 1951 fail to halt a slide into recession.
The Bank of England and the Treasury are weighing a strategy known as “quantitative easing” where authorities increase money supply to boost bank reserves. The initiative was last used by Japan at the start of the decade.
Prime Minister Gordon Brown’s government is frustrated that banks are rationing credit after tapping the Treasury for cash and guarantees to prop up their own balance sheets. Policy makers both in the U.K. and the U.S. Federal Reserve are looking beyond traditional interest-rate tools to revive the economy.
“The Bank of England has to step up to the plate,” said Neil Mackinnon, chief economist at ECU Group Plc in London. “They are thinking hard about quantitative easing. But they probably won’t announce anything until the next quarter, and they’ll follow the Fed.”
A U.K. Treasury spokesman said it is prudent for the government and the central bank to consider all options as the Bank of England’s benchmark lending rate approaches zero. He denied that a decision has been made and declined to be identified in line with government policy.
The unthinkable has happened
Posted by Tracy Alloway on Nov 10 15:49.
Just two weeks after Deutsche Bank issued a note discussing the possibility of Japan-style quantitative easing in the US, it’s happening.
DB’s previous note was titled “The unthinkable.” This one is “Losing control of monetary policy.” From the note:
We are already close to a zero interest rate policy and quantitative easing, given the recent behavior of the effective fed funds rate and reserve balances.
Monetary policy has become more stimulative than indicated by the fed funds target, implying increasing loss of control of monetary policy.
FT Alphaville discussed most of the ins and outs of this last week. Deutsche Bank adds more meat to the argument today:
Jim Sinclair’s Commentary
I am much too conservative at $1650. I believe Alf Fields has nailed it. Kudos to Alf.
RETURN TO $11-$13 SILVER?
Trend of gold as store of wealth ‘may start to snowball’–ScotiaMocatta
Deep-rooted global financial problems will escalate the demand for gold as a safe haven.
Author: Dorothy Kosich
Posted: Wednesday , 10 Dec 2008
RENO, NV – In its December Metals Matters report, ScotiaMocatta suggests that global financial problems "seem so deep rooted that demand for gold as a safe haven is expected to escalate."
On silver ScotiaMocatta advised, "Investors remain key to silver’s fate, but its monetary attributes should keep investment demand strong."
Their analysis also noted that low PGM prices, especially for palladium, are "likely to rebalance the PGM markets before too long-thus providing long term investment opportunities.
Although ScotiaMocatta remains bullish for gold "we are concerned that gold prices are not considerably higher given the current bullish climate. "
"We see two possible reasons for this. Firstly, funds and investors have been in liquidation mode and industrial commodities have been hard hit. As gold is a component in commodity baskets, which were popular investment vehicles in the commodity boom, gold has been sold as investors have sold their commodities. "
"Secondly, gold has traditionally been bought for a ‘rainy day’ and many hedge funds and other institutional investors have indeed been having a ‘rainy day,’ according to ScotiaMocatta. However, as central banks’ measures to tackle the financial rout start to work, the level of redemptions is likely to slow and that should provide less selling pressure in gold."
ScotiaMocatta’s analysis revealed that gold lease rates have been soaring and "likely to put an end to the gold carry trade, at least for a while. With interest rates falling, the profit margin on gold carry trades has diminished significantly. This means that as former carry traders come to the end of their term, gold will be withdrawn from the system and returned to central banks."
"As carry trades are closed the pressure on the spot market will switch from selling pressure to buying pressure," they advised.
If people lose faith in the financial system and their currencies, ScotiaMocatta forecasts "the growing trend in wanting some gold as (a) store of wealth may start to snowball."