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Gold Reserves Surge 1,000% In Hungary As It Joins Poland, Russia, China and Other Central Banks Buying Gold

October 20, 2018

Gold Reserves Surge 1,000% In Hungary As It Joins Poland, Russia, China and Other Central Banks Buying Gold

News, Commentary, Charts and Special Podcast on Direct Access Gold

Here is our Friday digest of the important news, commentary, charts and videos we were informed by this week including our special podcast on Direct Access Gold.

From our perspective, the most important developments were the IMF’s financial warnings and the escalation in central bank gold buying with Hungary increasing its gold reserves by a whopping 1,000% due to increasing “safety concerns.”

For the first time since 1986, Hungary’s central bank is buying gold bullion – a lot of gold bullion.

The Eastern-European country announced that it had boosted its gold reserves ten-fold, up to 31.5 tons. It not only dramatically increased its reserves but also repatriated the gold from the Bank of England to Budapest due to concerns about “financial stability”.

Central banks in Europe are diversifying into gold or moving to repatriate and take “possession in country.”

Hungary and Poland are the most recent central banks to do this but they follow in the footsteps of Austria, Netherlands and the powerful German Bundesbank all of which have been repatriating their gold from the Bank of England and the Federal Reserve in recent months and years.

Source: Bloomberg

“Gold is still considered to be one of the world’s safest assets,” in the words of the Hungarian central bank.

This view is shared by the President of the ECB Mario Draghi who in February 2013 spoke about how “gold is a reserve of safety” which “gives you a value-protection against fluctuations against the dollar.”

Central bank gold reserves remain very small versus the scale of their massive foreign exchange holdings and their significant exposure to the vulnerable dollar in particular but also the euro and other fiat reserve currencies.

…click on the above link to read the rest of the article…

911 was a bank heist

October 18, 2018

911 was a bank heist

Food for thought. 9/11 was a bank heist.

As we explain in Splitting Pennies and Splitting Bits – the world is not as it seems.

If we can source this untold story even from the JYT then you know it must be real:

A team of 30 firefighters and police officers are helping to move the metals, a task that can be measured practically down to the flake but that has been rounded off at 379,036 ounces of gold and 29,942,619 ounces of silver. As layers of debris are peeled away, recovery workers are opening gangways to intact portions of a 16-acre basement that was largely unseen but was a place of spectacular scope in its own right. Just the basement area of the World Trade Center enclosed twice as much space as the entire Empire State Building. Nearly a quarter of a mile below the spectacular vistas from the towers was their upside-down attic dropping 70 feet below the ground, a strange world with enough room for fortunes in gold and silver, for Godiva chocolates, assault weapons, old furniture, bricks of cocaine, phony taxicabs and Central Intelligence Agency files. With so many people still lost, the owners of this stuff have maintained a discreet silence during the recovery operations. But that doesn’t mean they’re not interested.

So let’s repeat this. Cocaine, guns, gold, silver, and secret CIA files – all stored underground in the WTC complex and all went missing? How convenient!

You can’t make this stuff up folks. Growing up in the 90’s you can’t miss Hollywood films like Die Hard with a Vengeance. But who would have even suggested, that only 6 years later, an eerily similar plot would unfold in Lower Manhattan, shaping the world forever?

…click on the above link to read the rest of the article…

Why Competing Currencies is the Solution to a Collapsing Dollar

October 17, 2018

Why Competing Currencies is the Solution to a Collapsing Dollar

Cooperate when you think everyone involved will benefit.

Compete when you think something needs improvement.

For too long, certain states have been cooperating with the federal government without any benefit to the state or the citizens who live there. I recently highlighted five states, in particular, that would be better off as countries, without the federal government controlling them, and leaching off them.

Instead, states should be competing against the federal government.

They should be solving problems that the federal government cannot, or will not, solve.

One of America’s biggest problems is a fiat currency which has lost 85% of its value since 1971 when Nixon eliminated the gold standard.

Yesterday I discussed one possible solution. States could create or incentivize banks that safely store deposits of gold and silver, and issue a digital representation of its value. The value would not be denominated in dollars. Instead, the precious metals themselves would be indexed to purchasing power.

The banks would make money in the same way banks currently do, by lending and charging interest.

States could incentivize the use of this real money by giving discounts to anyone who paid their taxes with this new digital metal-backed money.

And the state’s incentive to do this is to cushion an economic crisis triggered by massive debt, inflation, and loss of confidence in value the US dollar.

But one possible pitfall of this system is a shortage of physical gold or silver to deposit, thus creating excess demand, and driving the price of gold and silver up.

So here’s another alternative.

State Cryptocurrency

You know the golden rule–he who has the gold makes the rules.

If states position themselves right, they can avert financial disaster when DC’s luck finally runs out.

…click on the above link to read the rest of the article…

How States Can Escape America’s Looming Financial Meltdown

October 16, 2018

How States Can Escape America’s Looming Financial Meltdown

The USA is $21.4 trillion in debt. That is larger than the entire US economy. And it shows no sign of slowing down.

To put that in perspective, imagine spending $28 million per day, EVERYDAY since Jesus walked the earth. Even then, you’d still have a trillion dollars to go…

But it gets worse. This debt does not even include unfunded liabilities, like the promise to pay out Social Security benefits to retirees. Social Security is underfunded by a whopping $50 TRILLION.

Worse still is that the Federal Reserve has the power to print money, and set interest rates. That means the economy you and I see on a daily basis is not reality.

Markets always have corrections. It is natural for sectors to wax and wane. Some years boom, and some years bust.

But the Federal Reserve has made this problem a hundred times worse. The booms are astronomical because of artificially low interest rates.

That means it is easy to borrow money, even if there isn’t much real capital out there to borrow. And that means money gets wasted, placed in bad investments, or squandered and misallocated on unneeded projects.

We are living in a ticking time bomb.

I have no particular faith in any government.

But I do believe the smaller the government gets, the easier it is to control. Your vote might actually count at the state level.

And living down the street from your State Representative helps to keep him fearful of his constituents. Politicians should fear the people.

State governments can cushion the collapse of the federal government.

This collapse will be triggered by monetary policy.

So states should make sure their economies can keep on chugging along in the event of such a catastrophic financial meltdown.

…click on the above link to read the rest of the article…

You Can’t Eat Gold

October 15, 2018

You Can’t Eat Gold

“You can’t eat gold.” The enemies of gold often unleash this little zinger, as if it dismisses the idea of owning gold and indeed the whole gold standard. It is a fact, you cannot eat gold. However, it dismisses nothing.

This gives us an idea. Let’s tie three facts together. One, you can’t eat gold. Two, gold is in backwardation in Switzerland. And three, speculation is a bet on the price action.

The fact that gold is inedible is supposed (by the enemies of liberty) to be proof positive that a gold standard wouldn’t work. Of course, there’s always the retort: You can’t eat dollars!

That may be emotionally satisfying, but there is a deeper issuer that the anti-gold crowd is missing. Yes, money makes terrible food but, also, food makes terrible money. A car makes a lousy airplane. And a shoe makes an awful TV. Cow poop is putrid as food for people, but it works well as fertilizer for plants. Each thing fits a particular purpose.

Why does food make terrible money? One reason is that it’s perishable. No one—other than a refrigerated warehouse—can make a bid on food beyond his own short-term needs. Without this robust bid, food has limited marketability. That is, it has a wide spread between its bid and offer prices.

Think of it in human terms, or even personal terms. Suppose you strolling along the sidewalk, and you’re hungry. You see a restaurant sign, “Hamburger + fries + drink $10.” You would pay the offer price. The next restaurant is going out of business, and its sign says, “All inventory must go! 50 hamburgers and 50 pounds of fries for $100!” You would not pay it (unless you were with 49 friends).

…click on the above link to read the rest of the article…

As The Markets Sell-off The Precious Metals Rebound

October 12, 2018

As The Markets Sell-off The Precious Metals Rebound

To the surprise of many investors, the precious metals have rallied while the broader markets continue to sell-off. Currently, both gold and silver are solidly in the green while the major indexes were all the red following a huge sell-off yesterday. The Dow Jones Index has lost nearly 1,000 points in the past two days while the gold price is up nearly $25.

However, even though we could see a late-day rally in the markets, and even higher stock indexes over the next few months, the bear market for stocks is still coming. The Dow Jones Index has now suffered two large sell-offs in the past ten months:

In January, the Dow Jones Index fell by more 3,000 points, and the current correction is only one-half of that amount. So, I expect to see a continued correction over the next month. Because October is the worst month for market Crashes, this could be one hell of a blow for not only the economy but also, for investor confidence.

For example, according to the Zerohedge article, Used-Car Prices Plunge Most In 15 Years:

Looking deeper at the core inflation print, it reflected a 3% monthly drop in prices for used cars and trucks following increases in each of the last 3 months, and the biggest drop in 15 years…

And then, of course, the continued disintegration of the U.S. Retail Market, Sears Creditors Push For Bankruptcy Liquidation As Vendors No Longer Paid:

Amid recent reports that Sears is set to file for bankruptcy as soon as this weekend ahead of a $134 million debt payment due on Monday, the only question is whether the filing will be a Chapter 11 debt for equity reorganization or a Chapter 7 liquidation. And contrary to the desires of Sears CEO and biggest creditor, Eddie Lampert, who would like to preserve the core business, others are pushing for an outright liquidation.

…click on the above link to read the rest of the article…

LBMA Clearing and Vaulting data reveal the absurdity of the London ‘Gold’ Market

October 3, 2018

LBMA Clearing and Vaulting data reveal the absurdity of the London ‘Gold’ Market

The first day of each month sees the reporting of a number of statistics about the London Gold Market by the bullion bank led London Bullion Market Association (LBMA). These statistics focus on clearing data and vault holdings data and are reported in a 1 month lag basis for clearing activity and a 3 month lag basis for vault holdings data. Therefore the latest clearing data just published is for the month of August, while the latest vault holdings data is for the end of June.

While LBMA clearing data has been published for many years now, publication of vault holdings data by the LBMA is a recent phenomenon and only began at the end of July 2017. As the LBMA press release at the time stated:

“The physical holdings of precious metals held in the London vaults underpin the gross daily trading and net clearing in London. The net clearing is undertaken by the members of the London Precious Metals Clearing Limited (LPMCL).”

Although in both cases the data reported lacks any granularity and are just rolled up numbers, the two sets of statistics are useful in that they highlight the clear contradiction that exists between the huge volumes of fractionally-backed paper trading in the London Gold Market, and the relatively small quantities of underlying physical gold that sit in the gold vaults of the same institutions engaged in this ‘gold’ trading, quantities which are even smaller when Bank of England and ETF gold holdings are excluded.

**LBMA gold vaulting data report for end of June 2018: Published 1st October**

Vault Holdings – Underpinning ‘Gold’ trading

…click on the above link to read the rest of the article…

Signs of the Gold Apocalypse: M&A and Fund Extinction

September 25, 2018

Signs of the Gold Apocalypse: M&A and Fund Extinction

For bear markets to truly end investor sentiment has to get to a point where they would rather walk on broken glass than buy that asset or asset class. We’re reaching that point in the precious metals market.

In conjunction with that we also have to see arrogance on the part of short-sellers convinced that all rallies will be sold, keeping a lid on prices. It doesn’t matter if buyers come in at higher prices or above significant technical support levels, they will push because they become convinced this is a one-way trade.

We see this in the government bond markets as well. In traderspeak it’s called the [Insert Head of Central Bank Here] Put. The Greenspan Put begat the Bernanke Putwhich morphed into the Yellen Put.

Over the past few months we’ve seen sign after sign that the gold and silver markets are nearing the end of their bear markets. These are signs of extreme distress. The first I’ve already mentioned, record speculative short positions among futures traders.

Then there was the re-balancing of Vanguard’s $2.3 billion Gold and Precious Metals fund into the Global Capital Cycles Fund, trimming exposure to precious metals to 25% of AUM — Assets Under Management.

And now we’re seeing the M&A (Mergers and Acquisitions) phase of the bear market. Where companies begin merging to shave costs after having already cut back on production to preserve cash flow.

It was just announced that American Barrick Corp (NYSE:ABX) and RandGold Corp (NASDAQ:GOLD) are merging into one company. The largest mining company by market cap in the world at around $18 billion.

Primary silver producers like Endeavor Silver (NYSE:EXK) are shuttering high-cost mines in this pricing environment. Well run companies with low debt and strong balance sheets don’t do mergers like this, they tough it out or go on a hostile raid of assets under-valued by the market.

…click on the above link to read the rest of the article…

Which Precious Metals Are Likely To Be Better Investments During The Next Market Crash?

September 18, 2018

Which Precious Metals Are Likely To Be Better Investments During The Next Market Crash?

The question on the minds of many investors, is which of the precious metals will be better investments during the next market crash? I should know because I receive this question in my email box quite often. So, I decided to test the price action of several metals and how each traded during a large market correction.

This article will focus on the top four precious metals, gold, silver, platinum, and palladium. Even though Rhodium and other metals are considered precious, the ones listed above take the lion’s share of the investment market. Furthermore, while platinum and palladium are purchased as investments, they have a much larger industrial component than gold or silver.

As I have mentioned many times, gold and silver disconnected from the broader markets when the Dow Jones Index fell 2,000 points in the first six weeks of 2016.

The two reasons I believe gold and silver jumped considerably as the markets sold off at the beginning of 2016 were:

Gold and Silver were extremely oversold, and the Commercial hedgers’ short positions were at a low, thus very bullish
Investors were extremely worried that the Dow Jones and markets were beginning a massive correction, so they moved into both gold and silver

To explain why investors were spooked in 2016, we need to look at the following chart:

Typically during a major correction, the market makes several attempts at a top. In 2007, there were three tops made before the market finally came down in 2008. Then in 2015, we had three more tops and two large corrections. The reason investors’ worry turned into fear at the beginning of 2016 was that the last top did not reach the previous 18,000 level.

And this can be seen in the next chart:

…click on the above link to read the rest of the article…

Real Gold and Silver Are Hedges Against the “Stupidity of the Elites” – Kiyosaki

September 3, 2018

Real Gold and Silver Are Hedges Against the “Stupidity of the Elites” – Kiyosaki

Real Gold and Silver – 7 Reasons Robert Kiyosaki Owns Them

In Robert Kiyosaki’s just-released book ‘FAKE – Fake Money, Fake Teachers, Fake Assets’, the best selling ‘Rich Dad’ author and respected personal finance expert details the seven reasons he owns “real gold and silver.”

The book is designed to deliver insights and answers to help the millions of people – many of whom have had little in the way of financial education — determine what is ‘real’ and relevant to their financial future.

Kiyosaki is the inspirational author of “Rich Dad, Poor Dad,” the No. 1 selling personal finance book of all time, and therefore always worth listening to.

Kiyosaki believes in the law of attraction and the principle that ‘like attracts like’ and focusing on the purest forms of wealth – gold and silver – attracts like and brings more wealth into gold owners lives.

He believes that holding real gold coins and bars attracts wealth to gold bullion owners through the law of attraction and is the best way to attract wealth and have a steady income.

In the book, CHAPTER 3 of which was released on Saturday (September 1st), Kioyosaki considers the 7 Reasons I Own Real Gold and Silver and we feature an short extract in our market update today:

REASON #1: Real gold and silver are not investments.

I do not own gold and silver to make money. They are insurance, a hedge against the stupidity of the elites… and myself.

I have insurance on my car, just in case someone hits me, or in case I hit someone else. Gold and silver serve a similar purpose.

…click on the above link to read the rest of the article…

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Gold, Silver, Shale Oil Industry & The Economy: My Interview With James Kunstler

August 16, 2018

Gold, Silver, Shale Oil Industry & The Economy: My Interview With James Kunstler

How insane are the markets today? Well, it’s always a pleasure to discuss this and other topics with James Howard Kunstler. Jim and I had a lively conversation about gold, silver, the shale oil industry and the overall economy in his most recent KunstlerCast. James is one of the few that understands the dire energy predicament we face.

I started following James Kunstler after listening to an interview he had with Art Bell on Coast-To-Coast AM, back in 2005. James is way ahead of his time and in his book, “The Long Emergency” and in the video, “End of Suburbia” he describes what the world looks like after peak oil… and it isn’t pretty.

During our interview, James and I chatted about precious metals manipulation, the soon-to-be disintegrating shale oil industry, the insanely overvalued markets, peak oil, and many other topics. One of the more important items I brought up was the incorrect notion that the Central banks can continue to rig the markets indefinitely. They can’t.

And why is that? Because Central banks can’t continue to prop up the market with paper when the problem is one based on a limitation of PHYSICAL OIL. If the Central banks want to really solve our problems, they have to find a lot more oil… but there just really isn’t much left to find.

So, there lies the rub

To listen to my interview with James Howard Kunstler, please click on the link below:

KunstlerCast 306 — Gold, Silver, and Oil with Steve St. Angelo

Also, please check out James Kunstler’s website as he is a prolific writer and has many interesting books on his website.

The Yield Curve Is The Economy’s Canary In A Coal Mine

July 7, 2018

The Yield Curve Is The Economy’s Canary In A Coal Mine

The economy has hit a wall and is now sliding down it. I don’t care what bullish propaganda may or may not be bubbling up in the headlines from the financial media and Wall Street, the hard numbers I look at everyday show accelerating economic weakness. The fact that my view is contrary to mainstream consensus and political propaganda reinforces my conviction that my view about the economy is correct.

As an example of the ongoing underlying systemic decay and collapse conveyed by this week’s title, it was announced that General Electric would be removed from the Dow Jones Industrial Average index and replaced by Walgreen’s. GE was an original member of the index starting in 1896 and was a continuous member since 1907.

GE is an original equipment manufacturer and industrial product innovator. It’s products are used in broad array of applications at all levels of the economy globally. It is considered a “GDP company.” GE was iconic of American innovation and economic dominance. Walgreen’s is a consumer products reseller that sells pharmaceuticals and junk. Emblematic of the entire system, GE has suffocated itself with poor management which guided the company into a cess-pool of financial leverage and hidden derivatives.

As expressed in past issues (the Short Seller’s Journal), I don’t put a lot of stock in the regional Fed economic surveys, which are heavily shaded by “hope” and “expectation” metrics that are used to inflate the overall index level. These are so-called “soft” data reports. But now even the “outlook” and “expectations” measurements are falling quickly (see last week’s Philly Fed report). The Trump “hope premium” that inflated the stock market starting in November 2016 has left the building.

…click on the above link to read the rest of the article…

It’s Time To Care Again About Gold & Silver

June 30, 2018

DnD-Production.com/Shutterstock

It’s Time To Care Again About Gold & Silver

Fundamentals and TA are signaling extreme undervaluation

It’s been a while since I’ve covered the precious metals in an article. They’ve been range-bound for much of the past year, with few notable sector developments to report.

But I feel compelled to write about them today for two reasons:

The probability of an upwards re-pricing of the precious metals is rising, and
Both gold & silver are quite over-sold right now, technically-speaking.

With technical and fundamental indicators flashing green simultaneously like this, now is an advantageous time to consider increasing your PM exposure (I did so myself yesterday).

The Human Factor

Before I go into further detail on the current conditions of the PM market, here’s a recent personal experience that underscores how few people have any real familiarity with gold & silver as an asset class, let alone own any (beyond, perhaps, a bit of jewelry).

A good friend moved and needed help transporting some bullion from his old town to his new one. Most of it was silver, several thousand ounces worth.

That much silver is pretty friggin’ heavy.

So we huffed and strained, hauling that load out of one bank vault, into his car, and from there into the vault at his new bank. While we did our best to be as discrete as possible, our sweaty, grunting 2-man production was hard for the bank staff to ignore.

Managers at both banks figured out what was going on, as it was pretty obvious. And both separately asked us out of genuine curiosity, “Is that real silver?”.

My friend briefly handed over a 100-oz bar so they could see for themselves, sparking conversations about the merits of owning physical bullion.

…click on the above link to read the rest of the article…

Ronald Stoeferle: Gold Is Dirt Cheap Right Now

June 13, 2018

Ronald Stoeferle: Gold Is Dirt Cheap Right Now

And a new bull market for the metal is beginning

Fresh from releasing his exhaustive 230-page annual report titled In Gold We Trust, Ronald Stoerferle joins us to summarize his forecast for the yellow metal.

Stoerferle, an author of several books on Austrian economics and head of strategy and portfolio management at Incrementum AG, concludes that gold is extremely cheap right now in dollar terms. And he sees a new bull market beginning for the precious metal — one likely to quickly build momentum as the next (and long overdue) financial market correction arrives.

We’re at the beginning of a new stage of a bull market.

We’ve seen a massive correction with a big drawdown, but we’re now seeing the Commitment of Traders report suggesting that there’s been a washout. We’re seeing that sentiment is really negative. We’re seeing that nobody really cares about gold and mining stocks, and especially about silver. Silver is probably the biggest contrarian investment, though silver mining stocks are probably even more contrarian at the moment.

We all know that the herd behavior in the sector is getting more extreme. I think it has got to do with career risk in the financial industry, so nobody really wants to make a contrarian call. But once we go above this $1,360-$1,380 resistance, which is also the neckline of a large inverse head & shoulder formation, I think gold will hit $1,500, $1,600 pretty quickly.

The most important thing is: in comparison to all the monetary printing that we’ve seen in the last couple of years, gold got significantly cheaper. Gold, in monetary terms, is dirt cheap at the moment. We’re basically at the same levels like in 1971 when it comes to the gold backing of the US dollar. So gold is a bargain at this level.

…click on the above link to read the rest of the article…

My Views on US-Canada Trade, Steel’s Impact on National Security, NAFTA, and the Dollar

June 11, 2018

My Views on US-Canada Trade, Steel’s Impact on National Security, NAFTA, and the Dollar

Wolf Richter with Jim Goddard on This Week in Money:

Trade agreements are designed to benefit companies, not people – which is part of the problem. We also get into whether gold and silver will remain stuck in the current trading range, and whether there will be a recession under Trump.

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