India's gold: the bankers' last hurrah.

We have been warned it is coming. There were negotiations between the Indian govt and ?(the BIS?) to rent India's 200 tons of gold to make one more stab at breaking the gold mining industry. As long as paper gold is regarded as real, gold prices can be dropped by selling options with the pretense that the gold will be actually delivered.

Parallel with the possible loaning of its gold, the Indian govt  has also raised taxes on gold purchases to 10% to discourage buying gold by Indians.

So, here we go again.

Syrian policy: A symphony of failure.

The "coalition of the willing" is shrinking by the hour. The British Parliament voted against participating and France has pulled in its horns and now wants "diplomacy;" meaning just talk. None of the Arab countries is willing. That leaves O'Bungle. And even he might bug out.

American intelligence sources are not sure that Assad's regime used chemical weapons Logic would tell us that it was the Al Qaeda-led rebels that may have pulled the stunt. Why? Because they are losing the "civil war." In reality, this is a war between the Shiite minority of Syria and the Sunni population, plus the Iranian "volunteers" and the Sunni contingents from outside of Syria.

The American President can order our military into action without the approval of Congress if our Country is attacked or our vital interests are threatened. If the Assad regime had indeed used chemical weapons it is reprehensible, but no justification to use our military force. The UN is unwilling to go on record to authorize an attack of Assad forces, neither does NATO or the Arab League.

The Market agrees with my last post that any action ordered by O'Bungle will be limited and meaningless.

Gold, silver, Syria and Miley

As gold is aiming at 1,450 and silver at 25, Larry Edelson has grown quiet and absent from my emails from Uncommon Wisdom. No doubt that the crying you hear is his subscribers who bought the leveraged ETF on silver going down. But, Larry is a good technician and once he digests the lesson, he will be back, pretending that all that did not happen and that he called the turns of the PM Market perfectly.

Gold and Silver are heading higher. Why? Because Central Banks are now long, they are buying gold and silver and whatever is left is hovered up by China. The miners have not done that well, because they were influenced by the Stock Markets getting clobbered. Why is that happening? It is attributed to jitters over war with Syria. I should write a satire about how the Obama regime changes its mind about Syria: starting with tough talk of bombing for weeks, then days until the final day when five cruise missiles are launched.

The Syrian fiasco epitomizes the price of incompetence. The Syrian "civil war" is really a struggle between  Iran-backed Shiites and Al Qaeda- backed "rebels." Kucinich, the Ohio Leftist refers to the Obama effort as "being Al Qaeda's air force." The Obama regime simply wants to take people's minds off its failures and appeal to Americans' patriotism to support the President during a war. IT IS NOT GOING TO WORK!

We see a resumption of the commodities super cycle as China resumes its march toward a consumer society and needs commodities besides gold and silver.

Another important factor that weighs in on PM prices is the looming selection of FED Chairman. Bernanke will make a wonderful scapegoat for why the economy is not recovering fast enough) and Geithner is rumored to be dark horse. His allure? He will promote inflation to reduce the importance of the National Debt. Bernanke engineered the takedown of gold, but that simply stimulated demand for gold and silver. awhen the damage done by this regime is done, experts expect gold to end at $10,000/oz and silver at $500/oz. We will see.

What about Miley Cyrus? She is not the first young entertainer who is fed into the maw of decadent entertainment. The Harry Potter main character performed in the nude once he finished with his role. The progressive mindset is getting weirder and more debased as time goes on.  Miley Cyrus is Michael Jackson two steps down the road to Hell.

What now Larry?

Larry has been rather schizophrenic lately. He admits that the mining stocks have risen (and even recommends some), but insists that gold will hit 1050 and silver about 15 before the bull market resumes. He gave himself an out though: he said he will change his mind if gold closes above 1445 and silver above 23.73.

Today was an up-day on the PM prices. Gold is almost at 1,400 and silver had closed above Larry's magic number and on a Weekly basis:

 

 

What say you now Larry?

The pulse of the world.

EUROPE is coming out of a nasty and protracted recession. QII growth in Europe was 0.3%, which is nothing spectacular, but better than shrinkage. True, Europe's banks are in bad shape, but it is not European money that is responsible for the rally in gold. Europe needs to write off $3T and if not done soon, the sum will increase. Liabilities of European banks are estimated as $30T, 6x GDP.

WAR fears are mounting world wide.

1. Egypt is heading for a civil war.

2. Israel must be close to unloading on Iran as Iranians are getting ready to start up 7000 more centrifuges, among them some new ones that are faster. Right now the centrifuges are concentrated in two areas, but if Iran acquires enough uranium for a half dozen bombs, that capability will be dispersed.

3. Syria continues with its civil war.

4. Japan, Taiwan and the Philippines have decided to build aircraft carriers to counter China's aggressive stand.

US economy uncertain. The Market anticipates a tapering to begin in September, where the FED will reduce its stimulus by $10-20B monthly. The Market responded and 10 year Treasuries had an interest rate hike from 1.4% to 2.8%. And gold took off.

PMs rally.

Silver miners lead the rally.

Larry still says that gold will hit between 1050 and 1110 before the rally is ON. He is correct to say that a bear market reversal requires a low to be tested. But, this is where ha makes his mistake. Gold had a double bottom in July and HE IGNORES THIS. Otherwise he was correct that the PM market would turn around in QII.

Let's sum up where Larry was wrong:

1. The gold market WAS being manipulated.

2. Gold and silver have broken out of their bear markets.

3. Stocks he selected for avoiding are doing fine.

Larry says he will change his mind if Silver closes above 23.73 on Friday and gold above 1445. Silver closed at 23.32 last Friday so its close. I expect a short pullback in silver, but it should resume its rally later this week.

But, why does the FED want digital money?

The FED wanting digital money is in line with the practices of the Federal Government, which is the establishment of an all-powerful Federal Government. To wit:

1. The govt NOW reads all our phone calls and claims that they do not need warrants to do so;

2. The govt also reads/stores our e-mails and claims it needs no warrants;

3. The IRS will be in charge of determining who gets what medical care;

4. The IRS is in charge of denying the regime's opponents the ability to raise money.

5. When the FED forces us into using digital money, the govt will know where and how we spend.


These are all steps in establishing a dictatorship.

WHY? Because the FED wants digital money.

There is a tremendous article that pierces the curtain around the manipulation of the LIBOR and the gold and silver markets:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/8/8_Default_Feared_-_Gold_%26_Silver_Paper_Claims_Hit_All-Time_Highs.html

The manipulators are literally risking the financial world, especially the gold stock of the Western world.

I have already posted on how the Bank of England has lost 20% of its gold hoard between February and June. This constant loss continues. How about COMEX? COMEX is also losing gold and may default on delivery. As we see in the Kings World News article, the number of claims on each ounce of gold has now reached 24 and for silver it is 26. Here is the amount of gold stored by the COMEX:

 

 

There are two kinds of gold accounts stored by COMEX: 1. Eligible stocks. These comprise 1000 oz silver bars and 100 oz gold bars. These are PM bars that meat the requirement of purity and authentication and are thus "eligible" to be stored at the warehouse. These bars belong to banks and other institutions and are not available to satisfy obligations such as paper options. Registered stocks have the same purity, but are available for delivery on paper accounts. Note that COMEX stocks of both kinds are dwindling.

Some people should pay a price...

1. The Treasury Bill Bubble.

QE III involves the purchase of $40B/month worth of Treasuries by the FED. Is this helping the economy? Not so much, but it has created a bubble in Treasuries and the bubble is being deflated as we watch. It is estimated that the FED has lost $195B on he 10y Treasuries it "owns" and this threatens its ability to defend the Dollar, since it has only a $60B to its credit. Of course it can print more money, but it sets up a vicious circle of inflation, increasing.

The Media is trying to keep this a secret, but word will get out. And those responsible will be held to account.

2. The squandering of Western gold.

The various schemes to suppress the gold price are not without cost. One became known recently due to the efforts of Alasdair McLeod. He noticed that the Bank of England reported a total of 500,000 gold bars on deposit (the BOE acts as a bank that deposits other people's gold) in February, whilst this decreased to 400,000 by the beginning of June. The difference (100K 400 oz gold bars) represents 1,300 tons of gold. Since, England owns only 300 tons, this means that 1,000 tons of gold is missing. Either that, or it has been loaned out not to the real owners. Since, the BOE reports these gold bars as 'not there' they may have been delivered to a second claimant. Just like the German gold. Germany owns 1,436 tons of gold, but the FED is unable to deliver.

These are crimes, folks! Somebody will have to pay dearly as the consequence.