Stocks, Gold, Silver, and the printing press.

[teddy12b]

Didn't see any of my gold and silver stack vaporizing.

Me either!! The spot price on silver did drop a lot today though

 

[smokingman]

Moody's and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash.

In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.
"Lord help our ****ing scam . . . this has to be the stupidest place I have worked at," writes one Standard & Poor's executive. "As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it," confesses a high-ranking S&P analyst. "If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value," complains another senior S&P man. "Let's hope we are all wealthy and retired by the time this house of card falters," ruminates one more.


The Last Mystery of the Financial Crisis | Politics News | Rolling Stone

 

[smokingman]

Japan is in deep trouble this morning.They are losing control.

"BOJ injected 2 trillion yen ($19.4 billion) into the financial system to stem volatility following a circuit breaker in JGB futures trading."

Nikkei 225 is now down 1250 points from its highs and down 950 (over 6%) from yesterday's close.*Edit Nikkei is closed,and will stay closed for the rest of the day.Down 1143 to 14483 or -7.32%

6% loss,in FUTURES trading(thin),all trading is currently halted at the NIKKIE exchange,and it looks like they will keep the market closed for the day at this point.The Japanese Bond market is also closed,with the 10 year earning 1%.Margin calls all over the place.It is very ugly.Do you remember what a 6% down day was like(2008 for the DOW)?US futures are down(as are most futures markets in the world due to this).


Going to be an interesting day,with another 1-3 Billion from the FED here(FED purchasing of US treasuries),that may lower the impact temporarily on US markets.

Japanese Shares Extend Biggest Drop in Seven Weeks on Yen - Bloomberg

Japanese Stocks Halted; Plunge 1500 Points To Close Down 7.3% - Biggest Drop In 26 Months | Zero Hedge

Japanese Bond Market Halted At Open As Bond Selling Purge Goes Global | Zero Hedge

On a side note.Who is the largest foreign holder of US Treasury notes?Japan(they over took China last year as China has been a net seller for over 3 years)Japanese banks meeting margin calls will sell US treasuries to help meet those calls.Good thing the FED is buying 90% of all US treasuries issued.The crisis in Japan will have global impact.

US Treasury Sales See Record High in April - Trade the Newsroom
With the Fed more than happy to scoop up treasuries, foreign sales of US treasuries hit a record high in April. What was once a bastion of risk off or a flight to safety, a US treasury has now turned into a product foreigners just aren’t interested in.

Accounting for official and private sales by foreigners, over $54 billion was sold off just in the month of April. If you slide over and take a look at rotation into US equity markets, foreign investment accounted for just over $11 billion in stock market equity purchases. The rotation out of bonds may be offset by a jump in MBS purchases. Corporate bonds were also sold off to the tune of $4.5 billion.
This number lags, so it rarely gets the attention it deserves but it is interesting to look at who the sellers are. Not surprisingly, Japan comes in at the top of the list. with the Nikkei struggling to find a floor if the subsequent TSY sales numbers were become even more stark out of Japan.

I guess I nailed that one.I also said to watch US Treasury yields,which will continue to go up less more intervention from the FED(vs the claim of tapering,I think they MUST taper to save the shadow banking and derivatives markets).
Foreign sales record for the month of April...I guarantee April sales will look small once the numbers come out for June.In April,for the first time in history,no foreign state purchases exceeded sales.In other words every single country in the world that trades in US treasuries where net sellers.

 

[smokingman]

US GDP growth officially at 1.77% for the first quarter of 2013,revised down from the preliminary number of 2.5%.

Official inflation was 1.5% "
Excluding food and energy prices, the price index for gross domestic purchases increased 1.5 percent in the first quarter *source News Release: Gross Domestic Product
(Figures from the US Department of Commerce).

So for Q1 the official us growth rate less inflation is .2%.Now look at the seasonal adjustment to the GDP figures,according to the Saint Louis Fed.The adjustment .7%
GDP/GNP - FRED - St. Louis Fed

In other words our GDP shrank by .5% in the first quarter of 2013.

How is that for reality?
http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

 

[Hotdoger]

US GDP growth officially at 1.77% for the first quarter of 2013,revised down from the preliminary number of 2.5%.

Official inflation was 1.5% "
Excluding food and energy prices, the price index for gross domestic purchases increased 1.5 percent in the first quarter *source News Release: Gross Domestic Product
(Figures from the US Department of Commerce).

So for Q1 the official us growth rate less inflation is .2%.Now look at the seasonal adjustment to the GDP figures,according to the Saint Louis Fed.The adjustment .7%
GDP/GNP - FRED - St. Louis Fed

In other words our GDP shrank by .5% in the first quarter of 2013.

How is that for reality?

We are in a recovery, quit blowing smoke up my a.....

 

[AtTheMurph]

Interest rates are jumping up incredibly. That means our Fed government's debt service payments will be ramping up quickly as the average duration on govt debt is something like 3 yrs.

The budget cannot handle a rise in rates and we are about to get into yet another debt ceiling fight. That means more printing to come.

Also, the Fed is a huge holder of Fed debt. Rates have shot up on them meaning their balance sheet is worth a whole hell of a lot less than it was a short time ago. That means more printing as the Fed has to strengthen it's balance sheet.

Then all the pension funds (Public/Private/Union) who ran to govt debt as a safe haven have lost exacerbating their shortfalls. That means more printing.

All roads lead to the same answer. Our government will print money. They will tell you that they won't, that they aren't but they are and they have to. It is the only answer other than flat out default, and governments that can print always print.

Everything else is just sideshow material to the printing. May take a decade or more to reach the end but it will eventually end and printing always does.

 

[rhino]

Me either!! The spot price on silver did drop a lot today though

That just means it's a good time to buy. The spot dropped below $19 and you can get 25 0.999 Ag 1 oz rounds at Provident Metals for just over $500.

 

[Hotdoger]

The Single Largest Driver of the US Economy is About to Collapse

The Single Largest Driver of the US Economy is About to Collapse | Zero Hedge

 

[teddy12b]

That just means it's a good time to buy. The spot dropped below $19 and you can get 25 0.999 Ag 1 oz rounds at Provident Metals for just over $500.

I am just amazed that with the Fed's activities that the SPOT prices on Silver & Gold haven't blown through the roof. I didn't think I was going to see Silver this low again for years. I certainly agree that it's a buying opportunity.

 

[Hotdoger]

I am just amazed that with the Fed's activities that the SPOT prices on Silver & Gold haven't blown through the roof. I didn't think I was going to see Silver this low again for years. I certainly agree that it's a buying opportunity.

Many don't have funds to buy in the private sector, also less of a demand from manufacturing.

 

[smokingman]

From the Federal Reserve today.

From the London Bullion exchange.
Physical delivery requests will now take 100 days to process for gold or silver.This includes futures contracts that settle for delivery.No fraud here.
Fraud Confirmed: 100-Day Delay To Take Bullion Delivery In London

In other news.The derivatives markets are rigged.
"

The European Commission says many of the world's largest investment banks appear to have colluded to block attempts by exchanges to trade and offer more transparent prices for financial products known as credit derivatives.

The commission, the executive arm of the European Union, said Monday it has informed 13 banks — including Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley — as well as the industry association for derivatives itself, the International Swaps and Derivatives Association, ISDA, of the preliminary conclusions of an investigation that began in March."




​

 

[smokingman]

The bull market's profit problem - Jul. 7, 2013

http://money.cnn.com/2013/07/07/investing/corporate-earnings/index.html?iid=HP_LN
When companies begin reporting second-quarter results this week, investors will look for signs that profits can keep the bull market going once the Federal Reserve steps aside.

The prognosis is not good. Companies in the S&P 500 are expected to report overall earnings growth of less than 1%, according to FactSet.
Exclude the financial services industry, with projected profit growth of 17%, FactSet is forecasting an overall earnings decline of 2.4%.

In another troubling sign, a record number of companies have already issued negative guidance for the quarter.
Out of the 108 companies that have released forecasts, 87 have projected earnings below consensus estimates, according to FactSet. That's the highest number since the data provider started keeping records in 2006.

 

[smokingman]

Had fun trying to find this thread to post in.

7/19/2013
JP Morgan banks gold inventory is at a record low,in the history of the company.
JPM Eligible Gold Plummets By 66% In One Day To Just Over 1 Tonne, Total Gold At Fresh All Time Low | Zero Hedge

Another Dutch bank defaulted on physical delivery contracts for gold yesterday forcing all contracts to settle for cash,even those who had physical gold stored at the bank(some had gold stored for generations).Second Dutch Bank to Follow ABN Amro, Close Gold Accounts! | SilverDoctors.com

Reminder if you can not physically hold it,it is not yours.

 

[ruger1800]

Can't eat gold, the system has been rigged since its creation.

 

[ZombieApocolypse]

Had fun trying to find this thread to post in.

7/19/2013
JP Morgan banks gold inventory is at a record low,in the history of the company.
JPM Eligible Gold Plummets By 66% In One Day To Just Over 1 Tonne, Total Gold At Fresh All Time Low | Zero Hedge

Another Dutch bank defaulted on physical delivery contracts for gold yesterday forcing all contracts to settle for cash,even those who had physical gold stored at the bank(some had gold stored for generations).Second Dutch Bank to Follow ABN Amro, Close Gold Accounts! | SilverDoctors.com

Reminder if you can not physically hold it,it is not yours.

Am i understanding this correctly... Some people had gold stored at a bank, the bank sold the gold while it was up, and the peoplecouldnt collect the gold but had to take cash instead?

 

[pudly]

Am i understanding this correctly... Some people had gold stored at a bank, the bank sold the gold while it was up, and the peoplecouldnt collect the gold but had to take cash instead?

Basically. Some people thought they had gold in safe keeping at the bank with major safeguards to protect it. In fact, they were making regular payments for that storage and protection. The bank is then able to lease it for a fee to others who use it in transactions (much like banks do with our cash deposits). These secondary gold owners merely get a claim to that gold, they almost never actually withdraw it due to the risk/expense of actually moving it around, especially in large quantities.

So, there are more claims on the gold in the vaults than there really is physical gold. The banks get to collect fees from all of these "owners". If you know how the banking system works this should sound very similar to cash banking (fractional-reserve banking). This lending, redepositing, and re-lending happens over and over meaning that far more people have a claim to the gold than there is physical metal. There is a huge market in "paper gold" such that people are buying/selling claims to gold in the market without actually moving the metal around (for example the GLD ETF). I've read numbers like 100-1. Well, what happens if too many people want to withdraw their deposits at the same time? A bank run. That is what we are seeing, but in slow motion compared to a cash run.

Well, you may remember that Venezuela demanded 160 tons of gold be moved out of US banks back to their country in 2011. That strained the system because now there was less gold in reserve to handle day-to-day claims for physical gold from the banks. Then in January of this year, Germany demanded 300 tons (of their 1500 tons) that is being stored in the US. In a real eye-opening statement, the Fed said it would take 7 years to return that gold.

Bottom line, if you can't hold the gold, there is a very large risk that you will never get it, especially if things go belly up and people want gold over a declining dollar. You should know that you are considered an unsecured creditor when you deposit cash/gold at the bank. The FDIC doesn't hold nearly enough money to cover a system-wide bank run. Therefore, the new paradigm is that depositors may take the hit (this is the lesson of Cyprus). There is no real guarantee that you will get it all back.

 

[zippy23]

owning physical gold or silver, and having it in a safe locked up tight is really the only thing i can see investing in at this point. when the dollar callapses, who cares what investments you have? When the dollar is worth nothing, investing in gold and silver companies or stocks doesnt seem like it will matter. I've think about this idea a lot, if you invest and make 5%, and next year everything costs 6% more, you havent gained, you have just slowed your loss. The stock market is a casino to me. wish i had land in the middle of no where with chickens and livestock and a huge garden, investing in THAT i think is really worth while.

 

[rhino]

Or, invest in more non-perishable food, water storage, and long-term methods of replenishing both that do not depend on our current distribution system.

 

[smokingman]

What to do if you have contracts for the physical delivery of a commodity,but lack the inventory to deliver?

Well this is the question facing JP Morgan over at the COMEX gold market.With over 100,000 oz of gold beyond their current inventory(already due almost 5 weeks ago).For exact details about current contracts due and the record low dealer inventory at the COMEX go here
http://harveyorgan.blogspot.com/


Friday we finally got the answer.JPMorgan To Exit Physical Commodity Business | Zero Hedge
You get rid of the liability.Press release from JP Morgan Friday afternoon.
"

J.P. Morgan to Explore Strategic Alternatives for its Physical Commodities Business

New York, July 26, 2013 - JPMorgan Chase & Co. (NYSE: JPM) announced today that it has concluded an internal review and is pursuing strategic alternatives for its physical commodities business, including its remaining holdings of commodities assets and its physical trading operations.

To maximize value, the firm will explore a full range of options over time including, but not limited to: a sale, spin off or strategic partnership of its physical commodities business. During the process, the firm will continue to run its physical commodities business as a going concern and fully support ongoing client activities.

J.P. Morgan has built a leading commodities franchise in recent years, achieving a top-ranked revenue position. The business has been consistently named as a top client business in Greenwich Associates' annual client surveys and was recently named Derivatives House of the Year by Energy Risk magazine.

Following the internal review, J.P. Morgan has also reaffirmed that it will remain fully committed to its traditional banking activities in the commodity markets, including financial derivatives and the vaulting and trading of precious metals. The firm will continue to make markets, provide liquidity and offer advice to global companies and institutions that have, for years, relied on J.P. Morgan's global risk management expertise."

Nothing to see here....move along and accept CASH settlements for your gold contracts,we are no longer in the gold business.

​

 

[AtTheMurph]

Or, invest in more non-perishable food, water storage, and long-term methods of replenishing both that do not depend on our current distribution system.

Gold isn't for the tumult but for what arises afterward. It's a way to transport wealth from the current economic/monetary system to the next.

Food, water etc are for getting you through.