Tuesday, December 30, 2014
Tuesday, November 18, 2014
An ounce of gold today buys the same amount of crude oil it did 60 years ago
An ounce of gold today buys the same amount of crude oil it did 60 years ago – that’s one of the keys to having a successful sound money. And, for the foreseeable future gold is going to continue to preserve purchasing power. There will be fluctuations from time to time in gold’s price, but gold will preserve purchasing power over long periods of time and that’s why I highly recommend it.
- James Turk via Fin News
Saturday, November 15, 2014
In a Financial Collapse, You Want to Own Real Assets
It’s hard to predict exactly when this is going happen. I actually thought 2008, when we saw the collapse of Lehman Brothers and all the problems there that the money bubble was going to pop, but here we are six years later. But, we’re basically in a financial system that is unsustainable. There is too much debt and not enough wealth being created to carry and service that debt. So, my guess is that, in the next year or two we are going to face some very difficult financial situations, not unlike 2008, perhaps even worse.
During periods of financial uncertainty you want to own tangible assets of all sorts. You don’t want to own promises. You don’t want to own financial assets. And, by tangible assets I mean not only physical gold or physical silver but things like farmland, buildings, timberland, things that have productive assets. And, regardless what happens to the monetary system, these tangible assets will continue to produce wealth and I think that’s the key.
During periods of financial uncertainty you want to own tangible assets of all sorts. You don’t want to own promises. You don’t want to own financial assets. And, by tangible assets I mean not only physical gold or physical silver but things like farmland, buildings, timberland, things that have productive assets. And, regardless what happens to the monetary system, these tangible assets will continue to produce wealth and I think that’s the key.
- Source, James Turk via Fin News
Wednesday, November 12, 2014
Fiat Money, Isn't Real Money
People think that what we are using today as currency is money, but it’s really just a money substitute circulating in place of money. Money is a tangible asset. Money is gold and money is silver. That’s the way it’s been for 5,000 years. The bubble has risen because we think that this paper really is a settlement, something that can be used in transactions. But, it’s just a convenience, it really isn’t money in a historical sense.
- Source, James Turk via Fin News
Sunday, November 9, 2014
Gold Confiscation & Its Consequences
Thursday, November 6, 2014
James Turk: Forget Promises, Buy Physical Assets
I think gold is cheap. Even though $US1,200 per ounce sounds as though it’s expensive on a historical basis based on all of my measures, it’s still cheap. It’s still early in this bull market and I think gold is going to be going much higher. My near term target is $US2,000 per ounce and I think we will see that in the not too distant future.
Saturday, October 25, 2014
Wednesday, October 22, 2014
Tangible Assets Will Continue to Produce Wealth
During periods of financial uncertainty you want to own tangible assets of all sorts. You don’t want to own promises. You don’t want to own financial assets. And, by tangible assets I mean not only physical gold or physical silver but things like farmland, buildings, timberland, things that have productive assets. And, regardless what happens to the monetary system, these tangible assets will continue to produce wealth and I think that’s the key.
An ounce of gold today buys the same amount of crude oil it did 60 years ago – that’s one of the keys to having a successful sound money. And, for the foreseeable future gold is going to continue to preserve purchasing power. There will be fluctuations from time to time in gold’s price, but gold will preserve purchasing power over long periods of time and that’s why I highly recommend it.
An ounce of gold today buys the same amount of crude oil it did 60 years ago – that’s one of the keys to having a successful sound money. And, for the foreseeable future gold is going to continue to preserve purchasing power. There will be fluctuations from time to time in gold’s price, but gold will preserve purchasing power over long periods of time and that’s why I highly recommend it.
- Source, James Turk via FinNews
Sunday, October 19, 2014
Money is Gold and Silver, Not Fiat Paper
People think that what we are using today as currency is money, but it’s really just a money substitute circulating in place of money. Money is a tangible asset. Money is gold and money is silver. That’s the way it’s been for 5,000 years. The bubble has risen because we think that this paper really is a settlement, something that can be used in transactions. But, it’s just a convenience, it really isn’t money in a historical sense.
It’s hard to predict exactly when this is going happen. I actually thought 2008, when we saw the collapse of Lehman Brothers and all the problems there that the money bubble was going to pop, but here we are six years later. But, we’re basically in a financial system that is unsustainable. There is too much debt and not enough wealth being created to carry and service that debt. So, my guess is that, in the next year or two we are going to face some very difficult financial situations, not unlike 2008, perhaps even worse.
It’s hard to predict exactly when this is going happen. I actually thought 2008, when we saw the collapse of Lehman Brothers and all the problems there that the money bubble was going to pop, but here we are six years later. But, we’re basically in a financial system that is unsustainable. There is too much debt and not enough wealth being created to carry and service that debt. So, my guess is that, in the next year or two we are going to face some very difficult financial situations, not unlike 2008, perhaps even worse.
- Source, James Turk via FinNews
Gold Could be $2000 an Oz in the Not Too Distant Future
Gold has been around for 5,000 years. It’s money that doesn’t have any counterparty risk, in other words, there is no one promising the value of gold except the market itself. The market accepts gold for what it is. And, it is an important diversifier in everyone’s portfolio. So, I think everyone should own some physical metal.
I think gold is cheap. Even though $US1,200 per ounce sounds as though it’s expensive on a historical basis based on all of my measures, it’s still cheap. It’s still early in this bull market and I think gold is going to be going much higher. My near term target is $US 2,000 per ounce and I think we will see that in the not too distant future.
I think gold is cheap. Even though $US1,200 per ounce sounds as though it’s expensive on a historical basis based on all of my measures, it’s still cheap. It’s still early in this bull market and I think gold is going to be going much higher. My near term target is $US 2,000 per ounce and I think we will see that in the not too distant future.
- James Turk via finnews
Thursday, October 16, 2014
Forget Promises, Buy Physical Assets
- Source, Yahoo Finance
Monday, October 13, 2014
The Super Rich Get It - Moving Out of Cash & Into Physical Assets!
This week we speak with the founder of Goldmoney, James Turk. James Turk has long been a proponent of sound money. In 2001, he founded the precious metals online dealership Goldmoney.com, which was very unique at the time, and is to this day one of the most popular precious metals dealers online. We brought James on to talk about the role of precious metals in today's economy, and what James thinks it's role will be in the future.
James starts out by saying that there is so much money being printed by central banks, and its got to end up somewhere, and a lot of this money is ending up in what are perceived as safe-havens. For example, London and Singaporean real-estate, artworks, collectibles, and antique automobiles.
It's what you see in the early stages of what the Austrian economists call a 'crack-up' boom, the demand for the currency declines, and people move into things and out of the currency. I think the super rich get it, they're moving out of currencies because they aren't earning enough interest income, and safe-havens of all sorts are benefitting.
Speaking on the gold price, James' guess would be that the gold price will rebound quickly. Simply for the reason that gold has had so much downwards pressure, and that gold has been so undervalued. The recent downturn could be a short-squeeze, and if it is, then we could see a 'rubber band' effect in the price.
Next, James talks about the money bubble. People have generally lost sight of what money is, and the paper that's circulating as national currencies is not really money since it doesn't settle an obligation. If a shop receives a tangible asset (gold/silver) for the good of service that he's is giving in return, he has no lingering obligation or risk afterwards.
A currency presents payment risk, inflation risk, and bank risks. People are accepting those risks without realizing how severe those risks are. The risks of holding money in a bank today is quite large, the risks of inflation are large, and the risks of various promises being broken by governments are also quite large.
When asked on the future of currencies, and a possible gold back Russian/Chinese currency, James states that we can't predict the future, but he hopes that private currencies become dominant. What we're seeing with Bitcoin and other crypto currencies represent an important technological breakthrough, but at the end of the day, he sees gold emerging as the form of money, which it has always been throughout history.
Finally, on the topic of storage of physical gold. If you are buying physical gold, there are really only two ways to store it: at home or have professionals store it for you. If you store it at home, you have it at hand, but it can get stolen, and it can be inconvenient to sell. But if you use professional storage, you don't have it at hand but you do have liquidity, and can easily convert the gold into a national currency.
James Turk has over 40 years’ experience in international banking, finance and investments. He began his career at The Chase Manhattan Bank where he worked on assignments in Thailand, the Philippines and Hong Kong. In 2001 he co-founded GoldMoney and remains a director of the group. James makes regular conference appearances around the world, provides commentary for numerous publications and newswires as well as producing articles for his website and GoldMoney.
Thursday, September 4, 2014
Gold Has Been Climbing the Wall of Worry
The federal government has simply made too many promises that in total cannot be fulfilled. It is for this reason that everybody should be accumulating physical gold and silver. It is to be ready for the federal government’s day of reckoning, much like the mini-reckoning that occurred in 2008. It will be different the next time, though, because there will be no one who can bail out the federal government. But let’s move away from the big picture and go back to focusing on the week ahead.
Will gold and silver drop again this week because of the economic news and FOMC announcement? We’ll see, but whatever noise impacts gold and silver this week will soon pass.
The plain fact is that gold and silver are undervalued, and consequently the tide already has turned in their favor. The uptrend in gold and silver has now been underway for 13 months. It was June 2013 when the precious metals made their low, and for months gold and silver have been climbing the proverbial ‘wall of worry’ that is the characteristic of all new bull markets.
Will gold and silver drop again this week because of the economic news and FOMC announcement? We’ll see, but whatever noise impacts gold and silver this week will soon pass.
The plain fact is that gold and silver are undervalued, and consequently the tide already has turned in their favor. The uptrend in gold and silver has now been underway for 13 months. It was June 2013 when the precious metals made their low, and for months gold and silver have been climbing the proverbial ‘wall of worry’ that is the characteristic of all new bull markets.
- Source, James Turk via King World News
Monday, September 1, 2014
Understand That Gold is Manipulated
The Fed’s balance sheet hit a new milestone last week. For the first time ever, its assets have hit a new record by expanding to more than $4.4 trillion. That means a lot of inflation is in the pipeline.
Anyway, if we use history as a guide, these economic reports and FOMC announcements in the past have repeatedly been met with intervention by central planners in an attempt to keep the price of gold and silver under their thumb. No Fed official wants to be embarrassed by a rising gold price when testifying before Congress, which explains why the gold price dropped during Fed Chairwoman Janet Yellen’s testimony two weeks ago.
Similarly, no Fed official wants to admit that six years of unprecedented money printing has failed to produce a meaningful economic recovery because it would expose the lie that central planners and their money printing are beneficial.
Fortunately, in addition to more people understanding that the gold price is manipulated, more people are questioning the role of the Fed and starting to understand that the Fed serves the banks and the federal government, not the American people, by printing money to perpetuate the illusion that an over-leveraged federal government is solvent when in fact it is not.
Anyway, if we use history as a guide, these economic reports and FOMC announcements in the past have repeatedly been met with intervention by central planners in an attempt to keep the price of gold and silver under their thumb. No Fed official wants to be embarrassed by a rising gold price when testifying before Congress, which explains why the gold price dropped during Fed Chairwoman Janet Yellen’s testimony two weeks ago.
Similarly, no Fed official wants to admit that six years of unprecedented money printing has failed to produce a meaningful economic recovery because it would expose the lie that central planners and their money printing are beneficial.
Fortunately, in addition to more people understanding that the gold price is manipulated, more people are questioning the role of the Fed and starting to understand that the Fed serves the banks and the federal government, not the American people, by printing money to perpetuate the illusion that an over-leveraged federal government is solvent when in fact it is not.
- James Turk via a recent King World News interview
Friday, August 29, 2014
Sadly, The War on Gold and Silver Continues
The good news is that these tests show that support around $1,300 is solid, which is confirmed by the strong demand for physical metal that showed up on these price dips. There is a lot of cash patiently waiting on the sidelines to scoop up physical metal whenever the price drops.
Now for the bad news. Both dips were the result of price manipulation by the central planners and their allies who pile on the short side by selling as much paper gold and paper silver as they need to stop precious metal prices from climbing. So sadly the war on gold and silver continues.
Consequently, we need to be cautious about the rest of this week. While the Comex options expired today without the central planners and their allies taking gold below $1,300, the more important over-the-counter options expire over the next couple of days. Then on Wednesday afternoon gross domestic product for the second quarter will be reported. Also, the unemployment report will be released on Friday. So there is a flurry of economic reporting this week.
As if that were not enough, there also is the Federal Reserve's Federal Open Market Committee meeting this week. The consensus is that its announcement -- to be made Wednesday afternoon -- will say that the Fed will continue tapering, meaning that it is still slowing down the printing press.
Consequently, we need to be cautious about the rest of this week. While the Comex options expired today without the central planners and their allies taking gold below $1,300, the more important over-the-counter options expire over the next couple of days. Then on Wednesday afternoon gross domestic product for the second quarter will be reported. Also, the unemployment report will be released on Friday. So there is a flurry of economic reporting this week.
As if that were not enough, there also is the Federal Reserve's Federal Open Market Committee meeting this week. The consensus is that its announcement -- to be made Wednesday afternoon -- will say that the Fed will continue tapering, meaning that it is still slowing down the printing press.
- James Turk via a recent King World News interview
Tuesday, August 26, 2014
Silver was money in Hamburg for 250 years
Saturday, August 23, 2014
Can the US grow its way out of a currency collapse?
Wednesday, August 20, 2014
Ben Davies: Gold Is Money
Sunday, August 17, 2014
Thursday, August 14, 2014
Argentina debt default, life as a PT, James Turk of Goldmoney
Then, he discusses the Argentina debt default and things to look out for in your home country or when investing offshore.
And James Turk from Goldmoney joins to talk about offshore gold storage and how to protect your gold internationally with his specific steps.
- Source, Nomad Capitalist
Monday, August 11, 2014
Turning Hard Times into Good Times
Wednesday, July 30, 2014
The War on Gold and Silver Continues
Trading is hard, and best left for the professionals. Buying can be hard too, particularly after a mini-crash. But the emotion can be removed when you have a set plan to purchase a certain amount of physical metal every month as your savings.
Anyway, the war on gold and silver continues. Perhaps the next battle will be fought next week when options expire. And maybe the central planners will win another battle, but what is clear is that the central planners are losing the war.
There is one other point I would like to mention, Eric: Maybe last week’s quick mini-crash is telling us something important. With both gold and silver - as well as the mining stocks - being so undervalued, the central planners can’t keep downward pressure on the precious metals for days or even weeks like they used to.
In other words, maybe last week was a historic turning point, and that one-day mini crashes - instead of long, drawn out corrections - will become the norm. Carrying this point one step further, maybe sub-$1300 gold is history, just like we will never see $1050 gold again. Given the strong performance gold has put in the past few days, it is possible that another important low was made last week in the uptrends for gold and silver that are now 13 months old.
There is one other point I would like to mention, Eric: Maybe last week’s quick mini-crash is telling us something important. With both gold and silver - as well as the mining stocks - being so undervalued, the central planners can’t keep downward pressure on the precious metals for days or even weeks like they used to.
In other words, maybe last week was a historic turning point, and that one-day mini crashes - instead of long, drawn out corrections - will become the norm. Carrying this point one step further, maybe sub-$1300 gold is history, just like we will never see $1050 gold again. Given the strong performance gold has put in the past few days, it is possible that another important low was made last week in the uptrends for gold and silver that are now 13 months old.
- James Turk via a recent King World News interview
Sunday, July 27, 2014
Central Planners Can Only Push Gold Lower for so Long
This buying of physical metal explains why gold and silver bounced up off their support so quickly, Eric. The central planners can only push the short side so far, and their agents in the select bullion banks that trade for them know when to cover. These guys all know their limits, but we will continue to get the anti-gold propaganda.
For example, the media was quick to tell everyone last week that Goldman Sachs is keeping their year-end gold price target at $1,050. That ‘news’ - coming as it did right after last week’s price slam - probably scared some people and kept them from buying physical metal at those good prices when gold and silver were testing support.
Putting aside the propaganda, we have to remember that these attacks on gold and silver don’t always work. And some - like this last one - are short lived. So if you had money on the sidelines waiting to buy and blinked, you missed the low. It’s another reason why I always recommend accumulating gold on a regular basis rather than trying to trade it.
For example, the media was quick to tell everyone last week that Goldman Sachs is keeping their year-end gold price target at $1,050. That ‘news’ - coming as it did right after last week’s price slam - probably scared some people and kept them from buying physical metal at those good prices when gold and silver were testing support.
Putting aside the propaganda, we have to remember that these attacks on gold and silver don’t always work. And some - like this last one - are short lived. So if you had money on the sidelines waiting to buy and blinked, you missed the low. It’s another reason why I always recommend accumulating gold on a regular basis rather than trying to trade it.
- Source, James Turk via King World News
Thursday, July 24, 2014
Money on the Sidelines is Waiting to Move Into Precious Metals
The experience of the last several years tells us that we will see more attacks on the precious metals like the one the central planners engineered last week. We know from experience that these mini-crashes particularly occur before testimony before Congress by Fed officials, release of FOMC minutes, at month-end during option expiry, and before the U.S. unemployment report.
I am sure the hedge funds that trade gold have these dates marked in their calendars. But regardless, I do know that there is a lot of money on the sidelines waiting to buy physical gold and physical silver whenever we get bargain basement prices like we saw last week.
I am sure the hedge funds that trade gold have these dates marked in their calendars. But regardless, I do know that there is a lot of money on the sidelines waiting to buy physical gold and physical silver whenever we get bargain basement prices like we saw last week.
- James Turk via a recent King World News interview
Monday, July 21, 2014
Gold and Silver Look Ready to Move Higher
"The big drubbing the precious metals took last week is already pretty much forgotten. Both gold and silver stabilized at the support we discussed last Monday, around $1300 for gold and just under $21 for silver. They have since turned around, and look ready to head higher again. Today’s strong close is very encouraging."
- James Turk via King World News
Saturday, July 19, 2014
Debasement of Money Drives Gold and Silver Higher
Gold and silver are now back at support, around $1,300 for gold and just under $21 for silver. And the price manipulators are walking away with big day-trading profits. They are covering here at support all the shorts they sold last week and early this morning when Europe and the US were asleep. And because the shorts they put on this morning are traded intraday and mainly off the Comex, no one will ever see any Comex or other exchange report of their huge build up in short selling and the disappearance of these positions later the same day.
It is tough living with the irony of it all. There are record high prices everywhere except the gold price and the silver price. Many stocks, bonds, works of art and real estate in many safe-havens around the world are already at historic highs. But it will change.
We have to put aside today’s drubbing and focus on what’s important, namely, what drives the gold price. It is of course central bank debasement of currencies, which is making gold and silver increasingly undervalued and explains why both precious metals remain in uptrends that began over a year ago. And notwithstanding what happened today, let’s remember that both gold and silver are up 8% so far this year.
It is tough living with the irony of it all. There are record high prices everywhere except the gold price and the silver price. Many stocks, bonds, works of art and real estate in many safe-havens around the world are already at historic highs. But it will change.
We have to put aside today’s drubbing and focus on what’s important, namely, what drives the gold price. It is of course central bank debasement of currencies, which is making gold and silver increasingly undervalued and explains why both precious metals remain in uptrends that began over a year ago. And notwithstanding what happened today, let’s remember that both gold and silver are up 8% so far this year.
- Source, James Turk via King World News
Wednesday, July 16, 2014
Bank Shorts Orchestrating Gold & Silver Smash
The central planners today won another battle in the precious metal arena, Eric. They got the short sellers to dig in their heels over the past few days, which is clear from the increase in the open interest on the Comex, particularly for silver....
If we look at what happened last week, approximately 21% more silver was sold short on the Comex than was actually mined in those 5 days. The Comex open interest increase in gold was about 88% of all the gold mined those five days.
When comparing how much gold and silver were sold short than was actually mined, it only takes logic to conclude that it was paper selling that stopped gold and silver’s price advance last week. And these results are only for the Comex, which is generally said to represent just 10% of paper derivative trading in silver and gold.
Clearly, the paper sellers were out in full force last week. They were trying to keep gold and silver prices capped. Nevertheless, from Monday to Friday’s close, gold rose 1.6% while silver jumped 2.1%. But these shorts turned the tide in their favor early this morning.
Before Europe opened, the paper sellers were out in full force painting the tape with short selling during the most illiquid time of the day. By the time the metals opened for trading in New York, the spec longs were ready to be flushed out. Also, because precious metal prices today broke below their short-term moving averages, the black-box proprietary traders had to flip their positions from long to short. The selling pressure on gold and silver prices was relentless.
If we look at what happened last week, approximately 21% more silver was sold short on the Comex than was actually mined in those 5 days. The Comex open interest increase in gold was about 88% of all the gold mined those five days.
When comparing how much gold and silver were sold short than was actually mined, it only takes logic to conclude that it was paper selling that stopped gold and silver’s price advance last week. And these results are only for the Comex, which is generally said to represent just 10% of paper derivative trading in silver and gold.
Clearly, the paper sellers were out in full force last week. They were trying to keep gold and silver prices capped. Nevertheless, from Monday to Friday’s close, gold rose 1.6% while silver jumped 2.1%. But these shorts turned the tide in their favor early this morning.
Before Europe opened, the paper sellers were out in full force painting the tape with short selling during the most illiquid time of the day. By the time the metals opened for trading in New York, the spec longs were ready to be flushed out. Also, because precious metal prices today broke below their short-term moving averages, the black-box proprietary traders had to flip their positions from long to short. The selling pressure on gold and silver prices was relentless.
- Source, James Turk via King World News
Saturday, July 5, 2014
All You Need To Know About Negative Interest Rates
In the days following, despite the ECB attempting to clarify its stance further, many questions still linger; most notably: What exactly will the implications of this negative interest rate (NIRP) policy be?
We've asked our European correspondent, Alasdair Macleod, to lay things out in black as white as much as is possible. In this detailed podcast with Chris, he explains exactly what steps the ECB is undertaking, what the most probable ramifications will be, and where the highest degrees of risk now lie.
- Alasdair Macleod of James Turk Gold Money, Source, Peak Prosperity
Wednesday, July 2, 2014
How to Prevent the Manipulation in Gold and Silver
There is a practical way to eliminate the manipulation of gold and silver prices. It is to require that anyone selling short any derivatives contract that provides for the delivery of physical metal must meet margin requirements by having physical silver in a vault, and further that the margin requirement be reasonably high to control the fractional-reserve leveraging.
This step would prevent price manipulations like the one where Barclays Bank was caught and fined. Traders, whether acting for their bank’s account or as agents for government central planners, would no longer be able to conjure up out of thin air London good delivery bars in an attempt to force gold and silver prices lower by making believe that they have physical gold available for sale when in fact they don’t. A reasonably high margin requirement in terms of physical metal imposed on short sellers of physical metal would move price discovery in gold and silver back to where it should be based, which is the market for physical metal and not the derivatives market.
My recommendation is that a 50-percent margin requirement be imposed on short sellers of contracts of physical metal. So if someone sells short a contract obligating the delivery of physical metal, the short-seller needs to prove that he has at least 1 ounce of silver in a vault for every 2 ounces sold short.
This measure will reduce the fractional-reserve aspect of precious metal trading to a reasonable level from the 100-to-1 level, which some market participants have stated is the present ratio of paper commitments to actual physical metal available. Not only will reasonable margin requirements reduce the opportunity to manipulate gold and silver prices with derivatives, it will also offer the added benefit of lowering the possibility of systemic risk like what occurred in 2008.
Silver Bullion Bars 999
Choose From 10-100oz Pure Silver
Trusted Bullion Dealer - Buy Now!
This step would prevent price manipulations like the one where Barclays Bank was caught and fined. Traders, whether acting for their bank’s account or as agents for government central planners, would no longer be able to conjure up out of thin air London good delivery bars in an attempt to force gold and silver prices lower by making believe that they have physical gold available for sale when in fact they don’t. A reasonably high margin requirement in terms of physical metal imposed on short sellers of physical metal would move price discovery in gold and silver back to where it should be based, which is the market for physical metal and not the derivatives market.
My recommendation is that a 50-percent margin requirement be imposed on short sellers of contracts of physical metal. So if someone sells short a contract obligating the delivery of physical metal, the short-seller needs to prove that he has at least 1 ounce of silver in a vault for every 2 ounces sold short.
This measure will reduce the fractional-reserve aspect of precious metal trading to a reasonable level from the 100-to-1 level, which some market participants have stated is the present ratio of paper commitments to actual physical metal available. Not only will reasonable margin requirements reduce the opportunity to manipulate gold and silver prices with derivatives, it will also offer the added benefit of lowering the possibility of systemic risk like what occurred in 2008.
Now here’s the important point. Fractional-reserve systems are not only fraudulent because of the inability to deliver all commitments; they are also inherently unstable and come with incalculable risks. For this reason I therefore always recommend avoiding paper products, and owning only physical gold and physical silver. When you own physical metal, you are going to be safe when the next 2008-like systemic collapse arrives.”
- James Turk via King World News
Sunday, June 29, 2014
James Turk Responds to the LBMA
Over the past two weeks the LBMA has been conducting a survey of market participants that trade physical silver. They are taking this step in response to the decision to end the daily silver fix.
The LBMA said: “In view of the recent announcement by the London Silver Market Fixing Ltd., it is important to gather the views of the global market to find a solution that meets the needs of market users around the world. The launch of the survey is an integral part of this process.
The LBMA reported that more than 250 people responded to its survey, which ended Friday. Here is my response to the key questions the LBMA posed....
“1. Is the current silver price discovery method sufficient?
Gold Maple Leaf Coins
RCM 9999 - 24/7 Ordering
Buy Now - BBB Trusted
Silver Gold Bull
The LBMA said: “In view of the recent announcement by the London Silver Market Fixing Ltd., it is important to gather the views of the global market to find a solution that meets the needs of market users around the world. The launch of the survey is an integral part of this process.
The LBMA reported that more than 250 people responded to its survey, which ended Friday. Here is my response to the key questions the LBMA posed....
“1. Is the current silver price discovery method sufficient?
The market for silver derivatives dominates price discovery for physical silver, which explains why gold and silver have been in backwardation more often than not since July 2013. This backwardation is proof positive of the abnormal influence of silver derivatives on the pricing structure, as is the fact that commitments to deliver silver in the aggregate far exceed the annual new supply; they even exceed available above-ground supplies. In this regard, an analysis of U.S. Commodity Futures Trading Commission data shows that futures derivatives of commodities such as corn or soybeans do not exceed annual supply. Backwardation in gold in theory is impossible because it would mean participants are passing up the free arbitrage. Given that silver is a gold substitute in that at present 66 ounces of silver provide the same safe-haven characteristics as one ounce of gold (that is, money outside the banking system), backwardation in silver is impossible too, yet backwardation has prevailed on and off for months. That the LBMA 18 months ago stopped reporting SIFO shows how artificial the price curve is for silver. Back then the LBMA stated in effect that customers were unable to transact at the SIFO rate being quoted, which meant that paper pricing was unrealistic because sellers of paper were unable to commit to physical delivery at the prices being posted (that is, posted but not true dealing quotes). If silver derivatives did not dominate the pricing structure, the price of physical silver would be much higher. A similar situation prevails in gold, but is not as extreme (that is, prices in gold are not as unrealistically low as they are in silver).
2. What new improvements would you like to see/recommend?
There are two very different silver markets. One is for physical silver, which is a tangible asset of limited availability. The other one is for paper silver, which includes derivatives of all sorts that can be issued in essentially unlimited supply, meaning that it is impossible for ALL sellers of these derivatives to meet their commitments to deliver physical silver if called on to do so. The paper silver market is in effect a fractional reserve system, which obviously could result in adverse systemic consequences for banks and other participants should a silver squeeze occur (as it did in September 1979 to January 1980). These two silver markets need to be clearly delineated for the benefit of market participants, and the short side of the paper silver market needs to be controlled with rigid governors to impose discipline on the quantity of paper issued. If the prices of silver along the curve (that is, spot or forward) in these two different markets are to intersect as they do now, the shorts in the paper market need to prove that they can deliver physical metal. Doing so would improve the accuracy of any price discovery in the silver market by making spot and forward prices more realistic because they would become an authentic reflection of true supply conditions. Namely, there would be an acknowledgement that the supply of physical silver is limited. Thus, silver price discovery would be improved by imposing discipline that would prevent the paper shorts from dominating the price of physical silver.
3. What are the essential features that you would wish to see in any replacement?
Derivative contracts can settle in either cash or metal. Both the buyer and the seller need to put up margin as evidence of their ability to fulfill the terms of the contact they enter into. These margin requirements are now met generally by providing cash. Though margins can also be met with physical metal in some cases, it is rare. My proposal would be for cash settlement contracts to be margined with cash, regardless whether the participant is long or short the contract, and can be essentially unlimited in terms of the number of contracts issued. In contrast, derivatives that commit to deliver physical metal should be margined differently, in effect controlling the shorts which in turn also would result in disciplined control of the longs of these contracts. Those who have bought a contract that could result in the delivery of physical silver should meet their margin requirement with cash. But those who have sold short a contract that could result in the delivery of physical silver should meet their margin requirement by having physical metal stored in an LBMA-approved vault. As is now the case, the size of the margin requirement can be periodically set by an exchange for exchange-traded derivatives or a regulatory body such as the Bank of England for over-the-counter trade derivatives. Note that even though the short sellers of contracts that could result in the physical delivery of metal are meeting their margin requirement with physical metal, the fractional-reserve nature of the physical market will not disappear. For example, if a 50-percent margin requirement was imposed, the commitments to deliver physical metal in the aggregate could grow to twice the available stock, unless of course the short sellers have additional physical metal available that is not being put into LBMA vaults for margin. But the objective of requiring these short sellers to meet margin requirements with physical metal is not to try eliminating the fractional-reserve aspect of the market, which is probably an impossible task given the human tendency to expand credit. Rather it is simply a method of imposing prudent discipline on the silver market by controlling short sellers of silver derivatives.
4. Which market participants would be the ideal contributors to the pricing mechanism? (for example, bullion banks, manufacturers, refiners, others?).
All market participants should be the contributors to the pricing mechanism. When a trade takes place on an exchange or over the counter, the data of that trade should be immediately provided to neutral third parties to collect and report (for example, Bloomberg, Reuters, et al.). Aggregate data should also be reported. For example, this would include measurements of the total outstanding commitments for physical metal by size and forward date.
5. Other comments on the pricing mechanism?
While I have focused almost exclusively on silver, my analysis and recommendations also apply to gold."
2. What new improvements would you like to see/recommend?
There are two very different silver markets. One is for physical silver, which is a tangible asset of limited availability. The other one is for paper silver, which includes derivatives of all sorts that can be issued in essentially unlimited supply, meaning that it is impossible for ALL sellers of these derivatives to meet their commitments to deliver physical silver if called on to do so. The paper silver market is in effect a fractional reserve system, which obviously could result in adverse systemic consequences for banks and other participants should a silver squeeze occur (as it did in September 1979 to January 1980). These two silver markets need to be clearly delineated for the benefit of market participants, and the short side of the paper silver market needs to be controlled with rigid governors to impose discipline on the quantity of paper issued. If the prices of silver along the curve (that is, spot or forward) in these two different markets are to intersect as they do now, the shorts in the paper market need to prove that they can deliver physical metal. Doing so would improve the accuracy of any price discovery in the silver market by making spot and forward prices more realistic because they would become an authentic reflection of true supply conditions. Namely, there would be an acknowledgement that the supply of physical silver is limited. Thus, silver price discovery would be improved by imposing discipline that would prevent the paper shorts from dominating the price of physical silver.
3. What are the essential features that you would wish to see in any replacement?
Derivative contracts can settle in either cash or metal. Both the buyer and the seller need to put up margin as evidence of their ability to fulfill the terms of the contact they enter into. These margin requirements are now met generally by providing cash. Though margins can also be met with physical metal in some cases, it is rare. My proposal would be for cash settlement contracts to be margined with cash, regardless whether the participant is long or short the contract, and can be essentially unlimited in terms of the number of contracts issued. In contrast, derivatives that commit to deliver physical metal should be margined differently, in effect controlling the shorts which in turn also would result in disciplined control of the longs of these contracts. Those who have bought a contract that could result in the delivery of physical silver should meet their margin requirement with cash. But those who have sold short a contract that could result in the delivery of physical silver should meet their margin requirement by having physical metal stored in an LBMA-approved vault. As is now the case, the size of the margin requirement can be periodically set by an exchange for exchange-traded derivatives or a regulatory body such as the Bank of England for over-the-counter trade derivatives. Note that even though the short sellers of contracts that could result in the physical delivery of metal are meeting their margin requirement with physical metal, the fractional-reserve nature of the physical market will not disappear. For example, if a 50-percent margin requirement was imposed, the commitments to deliver physical metal in the aggregate could grow to twice the available stock, unless of course the short sellers have additional physical metal available that is not being put into LBMA vaults for margin. But the objective of requiring these short sellers to meet margin requirements with physical metal is not to try eliminating the fractional-reserve aspect of the market, which is probably an impossible task given the human tendency to expand credit. Rather it is simply a method of imposing prudent discipline on the silver market by controlling short sellers of silver derivatives.
4. Which market participants would be the ideal contributors to the pricing mechanism? (for example, bullion banks, manufacturers, refiners, others?).
All market participants should be the contributors to the pricing mechanism. When a trade takes place on an exchange or over the counter, the data of that trade should be immediately provided to neutral third parties to collect and report (for example, Bloomberg, Reuters, et al.). Aggregate data should also be reported. For example, this would include measurements of the total outstanding commitments for physical metal by size and forward date.
5. Other comments on the pricing mechanism?
While I have focused almost exclusively on silver, my analysis and recommendations also apply to gold."
- Source, James Turk via King World News
Thursday, June 26, 2014
Government is the Real Manipulator of Gold
A select group of bullion banks are simply the front-men, acting as agents of the gold price suppression scheme devised and engineered by governments, and Barclays Bank may not even be among this chosen group. After all, it was accused of manipulating the gold price by a dollar around the London fix, but the FCA did not investigate the big $18 drop in the gold price that had already occurred from the previous day. The FCA only went so far to note the impact on the gold price from extreme selling in the US market by reporting that there was “a drop in the price of August COMEX Gold Futures (which was caused by significant selling in the August COMEX Gold Futures market, independent of Barclays and Mr Plunkett).”
So who was the real manipulator of the gold price that day? Why isn’t the CFTC doing its job by investigating this manipulation? And what about investigating the flash-crashes where imponderable weights of gold are sold on the COMEX in mere seconds?
You will get old waiting for an investigation. We all know that the CFTC turns a blind eye to the manipulations by the US government. But at least something is being done in London. The FCA made a small step in the right direction, and so has the LBMA.
High Quality, Worry Free Food Storage Only From MyFoodStorage.
So who was the real manipulator of the gold price that day? Why isn’t the CFTC doing its job by investigating this manipulation? And what about investigating the flash-crashes where imponderable weights of gold are sold on the COMEX in mere seconds?
You will get old waiting for an investigation. We all know that the CFTC turns a blind eye to the manipulations by the US government. But at least something is being done in London. The FCA made a small step in the right direction, and so has the LBMA.
- Source, James Turk via King World News
Monday, June 23, 2014
Gold Manipulation Starting to be Covered by Mainstream Media
We’ve seen manipulations like this time and again over the years, but there has been a major new development. The mainstream media is starting to write about these manipulations in the wake of the fine imposed on Barclays Bank by the Financial Conduct Authority, which is the UK’s regulator.
This £26 million fine is of course a drop in the ocean when compared to fortunes made over the years by the price manipulators. But the fine is big enough to start drawing mainstream media attention to the skulduggery going on in gold.
An article by Bloomberg is particularly revealing, relying as it does on the FCA’s document that reports its investigation of this one particular gold price manipulation by Barclays Bank. It makes clear how the paper market is being used to manipulate the price of physical gold, which ignores the reality that the supply of physical gold is limited, while the supply of paper commitments to deliver gold is essentially unlimited.
This means that gold - and silver too - operates on a fractional reserve basis. In other words, there are far more commitments to deliver physical metal than there is physical metal available, so when the music stops - which it always does eventually - the result will be a systemic failure as occurred in 2008 when Lehman Brothers was unable to meet all of its derivative commitments.
The important point is that the FCA report illustrates how the Barclays “exotic options” trader, Daniel Plunkett, twice conjured up out of thin air up to 150 LBMA good delivery bars that he did not own (then valued at $93.5 million) in order to force the price of gold lower during the fixing process. He then covered this short position by ‘buying back’ these non-existent bars from the trader at Barclays spot metal desk.
My Food Storage provides the fastest delivery available with next day shipping, FREE Shipping on orders over $87.
This £26 million fine is of course a drop in the ocean when compared to fortunes made over the years by the price manipulators. But the fine is big enough to start drawing mainstream media attention to the skulduggery going on in gold.
An article by Bloomberg is particularly revealing, relying as it does on the FCA’s document that reports its investigation of this one particular gold price manipulation by Barclays Bank. It makes clear how the paper market is being used to manipulate the price of physical gold, which ignores the reality that the supply of physical gold is limited, while the supply of paper commitments to deliver gold is essentially unlimited.
This means that gold - and silver too - operates on a fractional reserve basis. In other words, there are far more commitments to deliver physical metal than there is physical metal available, so when the music stops - which it always does eventually - the result will be a systemic failure as occurred in 2008 when Lehman Brothers was unable to meet all of its derivative commitments.
The important point is that the FCA report illustrates how the Barclays “exotic options” trader, Daniel Plunkett, twice conjured up out of thin air up to 150 LBMA good delivery bars that he did not own (then valued at $93.5 million) in order to force the price of gold lower during the fixing process. He then covered this short position by ‘buying back’ these non-existent bars from the trader at Barclays spot metal desk.
- Source, James Turk via King World News
Friday, June 20, 2014
Derivatives, Sound Money and the Move to Tangible Assets
Tuesday, June 17, 2014
The Importance of Gold to Human Liberty
They discuss Austrian economics and how they are not even taught in Vienna. Gregor explains that academic economics at university level are very mathematics focused and debates are very narrow. However there is a growing interest among the general population in alternative schools of economic thought. Gregor sees a role for gold and silver coins in the solution to our monetary system.
They talk about how under the classical gold standard the negative feedback disciplinary mechanism was imposed automatically by gold, without the need for political discretion. They talk about the importance of gold to human liberty.
Saturday, June 14, 2014
Robert Prechter and James Turk on Inflation vs Deflation
Both men differ on the question of whether or not inflation (defined as a rising price level) or deflation (when prices fall) will be the dominant economic trend in the years ahead. Prechter argues that governments and central banks will be unable to prevent a big collapse in financial markets, owing to debt defaults and massive contractions in bank lending. In contrast, Turk thinks that America is heading for hyperinflation, owing to the US government's unwillingness to change its spending habits and the Federal Reserve's continuing monetisation of government deficits.
However, they agree that regardless of whether or not deflation or (hyper)inflation prevails, owning gold is still desirable -- provided that it is held in allocated form in secure storage. James and Robert both see gold as insurance against financial chaos, and as a means of protecting yourself from a collapse in the value of stocks, bonds and real estate.
Wednesday, June 11, 2014
A Lot of Central Bank Gold is Missing
James Turk explains the problem that central banks report gold and gold receivables as one line item on their balance sheets. This allows them to lease out physical gold in return for paper claims -- posing the question of just how much physical gold is left.
They also discuss the Gold Money Index and the gold-based Fear Index. Both show that gold remains undervalued compared with historical norms. They talk about how close we are to a "Golden Cliff", where the western central banks stop lending out their gold, and what the systemic repercussions of this are likely to be.
Finally, they assess the chances of Western governments undertaking gold confiscation and capital control measures; the likely amount of physical gold held at Fort Knox; and the reasons behind their prediction of an upcoming failure of fiat paper currency.
Sunday, June 8, 2014
The Eurozone's New Bailout Fund
They talk about stocks. Philipp explains that dividends and cash flow has to be analysed together with risk, sustainability of earnings and risk. They also talk about the Eurozone's new bailout fund and whether it will be enough to save the euro. Philipp explains the difference between the EFSF and the ESM and the process for their approval. He explains that the size of the EFSF is enough to rescue small countries like Greece or Ireland, but too small to deal with problems in Italy or Spain.
They talk about whether Greece can leave the euro. Philipp explains that there is no doubt that Greece is bankrupt. He talks of a 75% haircut on Greek debt and also expects strong opposition to austerity from Greek public opinion. He talks of the danger of bank runs in Portugal and other countries. Portugal, Greece and Ireland could still be contained and even leave the euro without destroying it.
- Source, Gold Money
Thursday, June 5, 2014
Austrian Economic Center and the Friedrich August v. Hayek Institute
Barbara explains the importance of innovation and economic growth for the material wellbeing of humanity. Barbara talks about the student competition that they are organising as well as their soon-to-come media lecture program. She talks about their mobile-based Austrian economics dictionary available in many languages on Blackberry, i-Phone and Android platforms. She also talks about the Free Market Roadshow. Barbara explains how the Austrian school teaches individual freedom and individual responsibility, and that these are fundamental for prosperity.
- Source, Gold Money
Monday, June 2, 2014
The Gold Price & Its Cycle
- Source, Gold Silver.com
Tuesday, May 13, 2014
They're Not Going To Be Able To Save The System This Time Around
Turk, who recently co-wrote a book called "The Money Bubble," goes on to say, "Sooner or later, we are going to go over the cliff as we did in 2008. They saved the system, the system in 2008, but I don't think this time around they are going to be able to save the system. So, you have to prepare for it."
- Source, USA Watchdog
Wednesday, May 7, 2014
The Central Bbanks Can’t Keep the Gold Price Down if the Oil Price Goes Up
By Greg Hunter’s USAWatchdog.com
Gold expert James Turk says the Ukraine crisis can affect the price of gold. Turk says, “Whenever there is global tension, people go to safety, and one of the greatest safe havens of all-time has been gold. It’s been money for 5,000 years, and it’s still money and still a safe haven because it’s money that doesn’t have counter-party risk. . . . Gold does respond to geopolitical tensions, and I must admit the situation in Ukraine is getting more serious. I would not be surprised if the tensions continued to rise.” So, could this be a trigger to cause distress in the global financial community? Turk contends, “Yes, it really could. This could blow out of proportion very quickly, and it would be much more serious than what happened in the Balkans where there was a shooting war. What’s happening here is you are talking about a major economic power and the use of sanctions. In WWII, one of the causes of friction between the United States and Japan was the economic sanctions the U. S. imposed on Japan because of their incursions in China. It is eerily similar to what is happening now with Russia, and I think the stakes are just as high when you are talking about two major powers confronting themselves this way.”
As far as ratcheting up sanctions, Turk worries, “To do it in an environment where economic conditions in both the United States and Europe are very weak is even more worrying. You just do not have the economic base as you would during a period of strong economic activity. You have to remember these sanctions can bite home. People living in glass houses should not throw stones, as the old saying goes. The issue here is there is so much debt and counter-party risk between various players in the global economy that it has a knock-on effect, and we just don’t know how that knock-on effect is going to play out. If you look back to 2008, during the financial collapse then, we saw Bear Stearns get into trouble and then some European banks get into trouble and, ultimately, Lehman . . . fell apart and collapsed, and that had a knock-on effect as well. We just don’t know how it’s going to play out, but it is very worrying to see these threats of economic sanctions and imposition of economic sanctions and this war of words. It is potentially very serious.”
Turk goes on to say, “Back in 1999, gold was $250 per ounce, and the gold price has risen just over five times. Likewise, crude oil was $20 a barrel back then, and it also has risen five times since then. So, an ounce of gold still buys the same amount of crude oil as it did in 1999. So, if you get geopolitical tension and Russia threatens to do something on the energy issue, crude oil will go up and gold will go up as well. . . . The central banks can’t keep the gold price down if the oil price goes up.”
On central banks running out of gold this year, Turk says, “There are two things I am looking at. There are reports of lots of old gold bars coming out of the vaults and going into the refiners being turned into kilo bars for shipments to Asia. The fact that these are old bars that were refined thirty, forty, fifty years ago suggest they are at the back of the vault and not at the front of the vault where the newly refined bars would be. More importantly is the backwardation we are seeing in gold. . . . In other words, the spot price is higher than the future price of gold. . . . The weird thing that has happened and it’s never happened in history, when the gold price was driven down last year to its lows in June 2013, gold went into backwardation, and since then, it has been in backwardation more than 50% of the time. The only other times backwardation occurred were in 1999, with the lows in gold, and 2008, with the lows in gold. After both of those backwardations, the gold price soared. Backwardation is occurring because central banks are emptying out their vaults to try to keep the gold price from rising and to keep inflation looking low and to keep the economic conditions looking good. There is only so much gold that exists in central banks’ vaults. The fact this backwardation has been going on so long suggests to me that we’re pretty close to the point in time where the central banks are going to say ‘no more.’ We are not going to empty our vaults in the West to ship gold to the East. . . . My guess is it’s going to happen this year.”
Turk, who recently co-wrote a book called “The Money Bubble,” goes on to say, “Sooner or later, we are going to go over the cliff as we did in 2008. They saved the system, the system in 2008, but I don’t think this time around they are going to be able to save the system. So, you have to prepare for it. . . . Focus on real wealth; avoid Treasury bonds, any kind of financial asset. If you are going to own shares, own shares of a company that creates real wealth such as oil companies, agricultural companies and things of that nature. The best thing for the average family is to focus on your shelter. Make sure your house and land are secure. Then, start focusing on other types of tangible assets such as gold, silver and even things that you use around the house.”
Gold expert James Turk says the Ukraine crisis can affect the price of gold. Turk says, “Whenever there is global tension, people go to safety, and one of the greatest safe havens of all-time has been gold. It’s been money for 5,000 years, and it’s still money and still a safe haven because it’s money that doesn’t have counter-party risk. . . . Gold does respond to geopolitical tensions, and I must admit the situation in Ukraine is getting more serious. I would not be surprised if the tensions continued to rise.” So, could this be a trigger to cause distress in the global financial community? Turk contends, “Yes, it really could. This could blow out of proportion very quickly, and it would be much more serious than what happened in the Balkans where there was a shooting war. What’s happening here is you are talking about a major economic power and the use of sanctions. In WWII, one of the causes of friction between the United States and Japan was the economic sanctions the U. S. imposed on Japan because of their incursions in China. It is eerily similar to what is happening now with Russia, and I think the stakes are just as high when you are talking about two major powers confronting themselves this way.”
As far as ratcheting up sanctions, Turk worries, “To do it in an environment where economic conditions in both the United States and Europe are very weak is even more worrying. You just do not have the economic base as you would during a period of strong economic activity. You have to remember these sanctions can bite home. People living in glass houses should not throw stones, as the old saying goes. The issue here is there is so much debt and counter-party risk between various players in the global economy that it has a knock-on effect, and we just don’t know how that knock-on effect is going to play out. If you look back to 2008, during the financial collapse then, we saw Bear Stearns get into trouble and then some European banks get into trouble and, ultimately, Lehman . . . fell apart and collapsed, and that had a knock-on effect as well. We just don’t know how it’s going to play out, but it is very worrying to see these threats of economic sanctions and imposition of economic sanctions and this war of words. It is potentially very serious.”
Turk goes on to say, “Back in 1999, gold was $250 per ounce, and the gold price has risen just over five times. Likewise, crude oil was $20 a barrel back then, and it also has risen five times since then. So, an ounce of gold still buys the same amount of crude oil as it did in 1999. So, if you get geopolitical tension and Russia threatens to do something on the energy issue, crude oil will go up and gold will go up as well. . . . The central banks can’t keep the gold price down if the oil price goes up.”
On central banks running out of gold this year, Turk says, “There are two things I am looking at. There are reports of lots of old gold bars coming out of the vaults and going into the refiners being turned into kilo bars for shipments to Asia. The fact that these are old bars that were refined thirty, forty, fifty years ago suggest they are at the back of the vault and not at the front of the vault where the newly refined bars would be. More importantly is the backwardation we are seeing in gold. . . . In other words, the spot price is higher than the future price of gold. . . . The weird thing that has happened and it’s never happened in history, when the gold price was driven down last year to its lows in June 2013, gold went into backwardation, and since then, it has been in backwardation more than 50% of the time. The only other times backwardation occurred were in 1999, with the lows in gold, and 2008, with the lows in gold. After both of those backwardations, the gold price soared. Backwardation is occurring because central banks are emptying out their vaults to try to keep the gold price from rising and to keep inflation looking low and to keep the economic conditions looking good. There is only so much gold that exists in central banks’ vaults. The fact this backwardation has been going on so long suggests to me that we’re pretty close to the point in time where the central banks are going to say ‘no more.’ We are not going to empty our vaults in the West to ship gold to the East. . . . My guess is it’s going to happen this year.”
Turk, who recently co-wrote a book called “The Money Bubble,” goes on to say, “Sooner or later, we are going to go over the cliff as we did in 2008. They saved the system, the system in 2008, but I don’t think this time around they are going to be able to save the system. So, you have to prepare for it. . . . Focus on real wealth; avoid Treasury bonds, any kind of financial asset. If you are going to own shares, own shares of a company that creates real wealth such as oil companies, agricultural companies and things of that nature. The best thing for the average family is to focus on your shelter. Make sure your house and land are secure. Then, start focusing on other types of tangible assets such as gold, silver and even things that you use around the house.”
- Source, USA Watchdog:
Sunday, May 4, 2014
Insatiable Demand for Physical Precious Metals
That backwardation has been happening as long as it has, and we are hearing these reports about old bars coming out of the deepest recesses of various (Western) vaults -- these are bars that were marked and minted back in the 1960s or before -- so the easy-to-get at gold is gone. And now they are starting to go in to the deeper reaches of the vaults to get material out to keep feeding the (physical) market because the demand is insatiable for physical metal down here at these low prices.
- James Turk via a recent King World News interview, read more here.
Thursday, May 1, 2014
The End of This Year is Going to be Good for Gold and Silver
Gold is undervalued. It still has the utility it’s always had for 5,000 years -- it’s money outside of the banking system and a tangible asset with no counterparty risk.’ And when we get through this the gold price will just take off as it did after previous backwardations in 1999 and the low in 2008.
So a little bit more patience is required, but ultimately, I think this is going to be a good year, Eric. The first quarter we were up 7 percent in the gold price. We are down here in April but I think by the end of the year it’s going to be a good year for gold and silver.
So a little bit more patience is required, but ultimately, I think this is going to be a good year, Eric. The first quarter we were up 7 percent in the gold price. We are down here in April but I think by the end of the year it’s going to be a good year for gold and silver.
- Source, James Turk via King World News, read more here.
Monday, April 28, 2014
Gold Backwardation Like This Has Never Happened in History
Turk, who recently co-wrote a book called "The Money Bubble," goes on to say, "Sooner or later, we are going to go over the cliff as we did in 2008. They saved the system, the system in 2008, but I don't think this time around they are going to be able to save the system. So, you have to prepare for it."
- Source, USA Watchdog:
Backwardation is Gold is Continuing
What’s going on in the gold market is just unbelievable, Eric. It’s really never happened before. We’ve had this prolonged backwardation starting in the middle of last year when the lows in gold and silver were reached....
And by the way, those lows in gold and silver have not been broken. We are now nine months into a base-building pattern, which is ultimately very bullish. But this backwardation in gold is just going on and on and on.
You have to ask yourself, ‘Why is it doing this?’ There is only one logical answer: It’s not that this is some kind of ‘new normal.’ It’s an aberration that’s occurring because of intervention by central planners to keep the gold price from rising.
What they are doing is somehow getting physical metal out of the vaults of Western central banks, and selling it into the market to supply the Asian demand. But it’s not eliminating the backwardation, which continues.
You have to ask yourself, ‘Why is it doing this?’ There is only one logical answer: It’s not that this is some kind of ‘new normal.’ It’s an aberration that’s occurring because of intervention by central planners to keep the gold price from rising.
What they are doing is somehow getting physical metal out of the vaults of Western central banks, and selling it into the market to supply the Asian demand. But it’s not eliminating the backwardation, which continues.
- Source, James Turk via a recent King World News interview
Thursday, April 24, 2014
In Essence, the FED is Bankrupt
The Fed’s debts are greater than its assets. In this regard, the Fed’s true financial condition is not much different from many of the large banks around the world when eliminating the accounting gimmicks that enable banks to sidestep the true market value of the assets they hold.
These banks keep their doors open for business because they have sufficient liquid assets to provide the illusion of solvency, but they are essentially the ‘walking dead.’ In essence, the Fed is bankrupt. What’s worse, they will become even more bankrupt if interest rates continue to rise because the true market price of any fixed rate assets they own - like bonds and mortgages - will decline as interest rates rise.
These banks keep their doors open for business because they have sufficient liquid assets to provide the illusion of solvency, but they are essentially the ‘walking dead.’ In essence, the Fed is bankrupt. What’s worse, they will become even more bankrupt if interest rates continue to rise because the true market price of any fixed rate assets they own - like bonds and mortgages - will decline as interest rates rise.
- Source, James Turk via King World News:
Monday, April 21, 2014
Central Planners are Manipulating Markets
Look at what happened to gold over the last several days: On the way up to $1390, ‘black-box’ funds were buying (and covering short positions) and the gold open interest exploded. Who was selling into this rising price? It was the gold manipulators. They were following government instructions, and sold as the gold price climbed higher, and kept selling as evidenced by the rise in Comex open interest.
The manipulators could sell without regard to risk because they are backed by essentially unlimited government money. Their selling onslaught was enough to turn the market lower, forcing the funds to sell their long positions. The market manipulators bought what the funds were selling as the gold price dropped. So the manipulators covered their shorts with a profit while the funds took a loss. The huge drop in Comex open interest corroborates this outcome.
It means that the central planners, through their market manipulations, have sucked out most of the customer money originally invested in these funds, causing many of these black-box traders to close down their funds and return to their investors what money was left after losses.
The failure of this form of black-box trading was inevitable in a rigged market. I wrote about it in 2004 and 2005, observing how customers of these funds were getting their pockets picked by the market manipulators, who were following the orders of government central planners.
The manipulators could sell without regard to risk because they are backed by essentially unlimited government money. Their selling onslaught was enough to turn the market lower, forcing the funds to sell their long positions. The market manipulators bought what the funds were selling as the gold price dropped. So the manipulators covered their shorts with a profit while the funds took a loss. The huge drop in Comex open interest corroborates this outcome.
It means that the central planners, through their market manipulations, have sucked out most of the customer money originally invested in these funds, causing many of these black-box traders to close down their funds and return to their investors what money was left after losses.
The failure of this form of black-box trading was inevitable in a rigged market. I wrote about it in 2004 and 2005, observing how customers of these funds were getting their pockets picked by the market manipulators, who were following the orders of government central planners.
- Source, James Turk via King World News:
Friday, April 18, 2014
Fund Managers Are Going Out of Business
There was an interesting news item reported by Bloomberg today, Eric. A $120 million managed-futures fund run by Tudor Investment Corp., which is one of the best fund managers in the business, is closing and returning money to its clients because of three years of losses....
This report follows closely on the heels of managed futures funds that were closed by John Henry & Co., which up until the years before its closure had a great track record. Also, reported losses are being incurred by one of the largest managed-futures companies, the Man Group and its flagship AHL Fund, which until recently had a successful track record going back to the early 1980s.
There is an interesting story here because there is a similarity to these funds. All of them are managed by ‘black-box’ mathematical models. These models are designed to spot price trends of commodities. So the fund buys futures contracts when trends are rising, and sells the long position (and some aggressive funds, at the same time, even go short) when the price trend reverses.
These models were very successful and generated outsized returns from the time they were first developed in the late 1970s up until the last several years. So they key question is what caused their change in fortune? The answer is simple...
This report follows closely on the heels of managed futures funds that were closed by John Henry & Co., which up until the years before its closure had a great track record. Also, reported losses are being incurred by one of the largest managed-futures companies, the Man Group and its flagship AHL Fund, which until recently had a successful track record going back to the early 1980s.
There is an interesting story here because there is a similarity to these funds. All of them are managed by ‘black-box’ mathematical models. These models are designed to spot price trends of commodities. So the fund buys futures contracts when trends are rising, and sells the long position (and some aggressive funds, at the same time, even go short) when the price trend reverses.
These models were very successful and generated outsized returns from the time they were first developed in the late 1970s up until the last several years. So they key question is what caused their change in fortune? The answer is simple...
- Source, James Turk via a recent King World News Interview, read more here:
Tuesday, April 15, 2014
Gold is Money and Ukraines Fiscal Woes
Our guest today is James Turk, co-founder and director of GoldMoney.com, and we talk about gold, gold, gold. Turk explains that gold has been used as money for five thousand years, and he argues that it's much better than fiat currency. In fact he thinks that people are losing confidence in paper money because the super-rich are moving out of money and buying up tangible assets. He further argues that gold allows you to avoid the risks of political manipulation or economic warfare.
After the break, Turk talks about the advantage gold has over fiat currency. He also explains why he is bullish on silver right now, but gives reasons why it is less desirable than gold. What about paper gold and paper silver? Watch to get Turk's view on these investments. In the final part of our interview, Turk explains why he is concerned with hyperinflation while many people talk about deflation.
In today's Big Deal, Edward Harrison and Erin chat about how airline companies are revamping their frequent flier programs based on ticket price, not miles traveled. Ed gives the details of the changes, the logic behind them, and discusses why companies are making these changes now.
- Source, Russia Today:
Saturday, April 12, 2014
Advanced Technology to Verify the Quality of Gold Bars
Click on this link to hear James Turk's interview with Turd Ferguson of TF Metals Report. They discuss gold and silver, the importance of the use of advanced technology to verify the quality of gold bars.
James discuss how diversification helps you out to avoid government interventions. And they also talk about James' new book - The Money Bubble, the future of money, and the future of gold.
This interview was recorded on 13 March 2014.
James discuss how diversification helps you out to avoid government interventions. And they also talk about James' new book - The Money Bubble, the future of money, and the future of gold.
This interview was recorded on 13 March 2014.
- Source, Gold Money:
Wednesday, April 9, 2014
Gold Will Have to Double in Price
Turk points out that gold has moved together with the S & P500 up. Only through the manipulation of the central planners, gold had decoupled from the stock market and had less developed. Turk believes, however, that the movement will converge again. And to make this correlation again, gold would have to double. Accordingly, the expert expects at least as good second quarter of 2014 as the first. Over the next twelve months, the price could even more than 100 per cent down to produce the trend towards the Fed's balance sheet again.
If a scenario by James Turk, then stay raw material shares the greatest chance this year - probably in this decade. SHAREHOLDERS 'notes in his new report " 100 percent in gold, silver & Co "again a promising gold companies before. In addition, just pushing a small explorer in the view of investors. Both stocks have been under normal conditions, a 100 percent chance. Should gold really double in value, both stocks will go through the roof.
If a scenario by James Turk, then stay raw material shares the greatest chance this year - probably in this decade. SHAREHOLDERS 'notes in his new report " 100 percent in gold, silver & Co "again a promising gold companies before. In addition, just pushing a small explorer in the view of investors. Both stocks have been under normal conditions, a 100 percent chance. Should gold really double in value, both stocks will go through the roof.
- Source:
Sunday, April 6, 2014
James Turk Sees 100 Percent Gold Increase in One Year
Has the price of gold has the potential to be doubled? Yes, says at least precious metals expert James Turk. And the expert expects that this duplication will take place within a year. In an interview with King World News Turk speaks also about the fact that gold has already trained his ground.
The founder of GoldMoney explains the low of gold had been reached last June. Since then, the price had never been lower. The depth is now gone nine months. This gold had formed a strong basis for a rebound. The same is also true for silver. This, however, did not fit to the continuing negative sentiment in the West. In his view, the downward trend had ended last year.
The founder of GoldMoney explains the low of gold had been reached last June. Since then, the price had never been lower. The depth is now gone nine months. This gold had formed a strong basis for a rebound. The same is also true for silver. This, however, did not fit to the continuing negative sentiment in the West. In his view, the downward trend had ended last year.
Turk believes that too many people would trust the negative image of the mainstream media with a view to gold.
- Source:
Saturday, March 29, 2014
The Gold Price is Ready to Climb Higher
Investors are adding to their long physical positions by borrowing national currencies because they want this exposure. They are long physical gold and short national currencies because they expect the gold price to rise and currencies to fall. It is useful to note how the Chinese yuan has fallen these past several weeks, so the yuan gold price was not hit that hard last week. It probably just whetted their appetite to borrow CCFDs so that they could buy more physical metal.
These Chinese buyers know what they are doing. They understand gold is good value, and therefore they want all the physical metal they can possibly get in their possession. And the banks have been willing to heighten this insatiable demand with these CCFDs.
So owners of physical gold should rest easy this weekend. They own what is in short supply, which means that the gold price is ready to climb higher.
These Chinese buyers know what they are doing. They understand gold is good value, and therefore they want all the physical metal they can possibly get in their possession. And the banks have been willing to heighten this insatiable demand with these CCFDs.
So owners of physical gold should rest easy this weekend. They own what is in short supply, which means that the gold price is ready to climb higher.
- James Turk via a recent King World News interview, read more here:
Wednesday, March 26, 2014
Chinese Investors are Gobbling up Whatever Physical Metal They Can
As we all know, Chinese investors are gobbling up whatever physical metal they can at these low gold prices. The CCFDs are being used by wealthy Chinese - namely those who have access to these credit facilities - to borrow against metal they own in order to buy more metal.
The metal being used here as collateral is stored in China, not in the LBMA banks. That’s an important point, because there is no fractional reserve lending going on. Instead these wealthy investors are making a strategic decision. They are using their physical metal stored in China to borrow national currencies, and are using the proceeds of these loans to buy more physical metal. That is the important point. They want as much exposure to physical metal as possible.
The metal being used here as collateral is stored in China, not in the LBMA banks. That’s an important point, because there is no fractional reserve lending going on. Instead these wealthy investors are making a strategic decision. They are using their physical metal stored in China to borrow national currencies, and are using the proceeds of these loans to buy more physical metal. That is the important point. They want as much exposure to physical metal as possible.
- James Turk via a recent King World News interview:
Sunday, March 23, 2014
Minter Talks Trash & Best of with Jim Rickards, Cullen Roche, and James Turk
For our interview today, we invite "Junkyard Planet" author Adam Minter to come on and talk trash. He gives some amazing insight into the ways trash can reveal the health of the economy, comments on shipping costs and the prospect of the alliance of the 3 biggest shipping companies, and explains why he believes that we still aren't seeing a roaring recovery in the global economy yet.
For our Best Of the Week, we bring you the best clips from Cullen Roche, James Turk, and Jim Rickards. And "In the Margins," Edward and Erin bring you some of the most interesting comments we received from social media. Watch to catch up on what's happening with Boom Bust around the web.
- Russia Today:
Thursday, March 20, 2014
Gold Will be at a New Record High Above $1,925
Let’s step back from the trees for a moment and take a look at the forest. Basically everything is moving in favor of the precious metals. Commodities are rising pretty much across the board. Also, China’s credit crisis is deepening. The government there has bailed out five shadow lenders so far, but there are a lot more problems just beneath the surface.
Europe is facing another crisis as the Italian government looks ready to fall, and Germany’s court basically gave a thumbs down to Mario Draghi’s promise to do “whatever it takes” to save the euro. Japan’s weak currency is creating huge trade deficits, worsened of late by the rising price of crude oil. And these are just some of the obvious problems, not to mention that the Federal Reserve is continuing to print unneeded dollars. The Dollar Index looks ready in the next few days to close at its low for the year.
The bottom line is that 2014 promises to be a great year for everyone who owns physical gold and physical silver. But let’s take it one month at a time. Gold rose 3.2% in January, and is doing well so far in February. A few more months of solid gains, combined with increased momentum as the public once again jumps aboard, and before you know it gold will be at a new record high above $1,925.
Europe is facing another crisis as the Italian government looks ready to fall, and Germany’s court basically gave a thumbs down to Mario Draghi’s promise to do “whatever it takes” to save the euro. Japan’s weak currency is creating huge trade deficits, worsened of late by the rising price of crude oil. And these are just some of the obvious problems, not to mention that the Federal Reserve is continuing to print unneeded dollars. The Dollar Index looks ready in the next few days to close at its low for the year.
The bottom line is that 2014 promises to be a great year for everyone who owns physical gold and physical silver. But let’s take it one month at a time. Gold rose 3.2% in January, and is doing well so far in February. A few more months of solid gains, combined with increased momentum as the public once again jumps aboard, and before you know it gold will be at a new record high above $1,925.
- Source, James Turk via King World News, read more here:
Tuesday, March 18, 2014
Gold Seek Radio Interviews James Turk on the Money Bubble
- Source, Gold Seek Radio:
Sunday, March 16, 2014
Another Potential Global Crisis is Brewing
Turk questioned whether government intervention was keeping the gold price down.
“Gold is exceptionally undervalued at current levels and there’s imbalance between supply and demand.”
Turk added that another potential global crisis was brewing because of the mountain of debt that could not be serviced. Interest rates were rising in many countries, worsening the debt burden.
“Debt continues to grow and interest rates are rising. We’re facing a situation where the Federal Reserve will have to continue tapering or tell the US government it doesn’t have money to spend.”
Turk, who recently published his book The Money Bubble – What to do before it pops, said the US dollar was likely to lose more buying power and was heading for a hyper inflationary environment.
“We are in a fear currency bubble,” he noted, adding that the African continent needed to make the most of gold as an asset.
“Gold is one of Africa’s greatest competitive advantages. Fifty per cent of gold mines are from Africa, with the lion’s share from South Africa.
“Africa needs to serve its own interests and take the lead in returning to gold and recognising it as money,” Turk pointed out.
“Gold is exceptionally undervalued at current levels and there’s imbalance between supply and demand.”
Turk added that another potential global crisis was brewing because of the mountain of debt that could not be serviced. Interest rates were rising in many countries, worsening the debt burden.
“Debt continues to grow and interest rates are rising. We’re facing a situation where the Federal Reserve will have to continue tapering or tell the US government it doesn’t have money to spend.”
Turk, who recently published his book The Money Bubble – What to do before it pops, said the US dollar was likely to lose more buying power and was heading for a hyper inflationary environment.
“We are in a fear currency bubble,” he noted, adding that the African continent needed to make the most of gold as an asset.
“Gold is one of Africa’s greatest competitive advantages. Fifty per cent of gold mines are from Africa, with the lion’s share from South Africa.
“Africa needs to serve its own interests and take the lead in returning to gold and recognising it as money,” Turk pointed out.
- Source, Mining Weekly:
Friday, March 14, 2014
Central Planners Could Not Keep Gold Down
Gold finally plowed through $1250, Eric, and we got the expected move higher. The central planners tried ‘circling the wagons’ at $1,275, but they could not hold that line -- there was just too much buying power behind gold’s surge....
- James Turk via King World News:
Tuesday, March 11, 2014
James Turk: Erosion of Trust Will Drive Gold Higher
They have promised more than they can possibly deliver, so a lot of their promises are going to be broken before we see the end of this current bust that began in 2000. And that outcome of broken promises describes the huge task that we all face. There will be a day of reckoning. There always is when an economy and governments take on more debt than is prudent, and the world is far beyond that point. So everyone needs to plan and prepare for that day of reckoning. We can't predict when it is coming, but we know from monetary history that busts follow booms, and more to the point, that currencies collapse when governments make promises that they cannot possibly fulfill. Their central banks print the currency the government wants to spend until the currency eventually collapses, which is a key point of The Money Bubble. The world has lost sight of what money What today is considered to be money is only a money substitute circulating in place of money. J.P. Morgan had it right when in testimony before the US Congress in 1912 he said: "Money is gold, nothing else." Because we have lost sight of this wisdom, a "money bubble" has been created. And it will pop. Bubbles always do.
- Source, Zero Hedge:
Subscribe to:
Posts (Atom)