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HmmmA walk around the fringes of nance
30 April 2011 1
I you can keep your head when all about youAre losing theirs and blaming it on you;I you can trust yoursel when all men doubt you,But make allowance or their doubting too;I you can wait and not be tired by waiting,Or, being lied about, dont deal in lies,Or, being hated, dont give way to hating,
And yet dont look too good, nor talk too wise;I you can dream - and not make dreams your master;I you can think - and not make thoughts your aim;I you can meet with triumph and disasterAnd treat those two imposters just the same;I you can bear to hear the truth youve spoken
Twisted by knaves to make a trap or ools,Or watch the things you gave your lie to broken,And stoop and build em up with wornout tools;
I you can make one heap o all your winningsAnd risk it on one turn o pitch-and-toss,And lose, and start again at your beginningsAnd never breath a word about your loss;I you can orce your heart and nerve and sinew
To serve your turn long ater they are gone,And so hold on when there is nothing in youExcept the Will which says to them: Hold on;
I you can talk with crowds and keep your virtue,Or walk with kings - nor lose the common touch;I neither oes nor loving riends can hurt you;I all men count with you, but none too much;I you can fll the unorgiving minute
With sixty seconds worth o distance run -Yours is the Earth and everything thats in it,And - which is more - youll be a Man my son!
Rudyard Kipling
If it looks like a duck, and quacks like a duck, we haveat least to consider the possibility that we have a small
aquac bird of the family anadae on our hands.
Douglas Adams
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My name is Grant Williams and Im a precious metals bug.There. Ive said it.
It feels good to get that o my chest.
Of course, those amongst you who have been riding alongside me these past few years probably
already had a sneaking suspicion that was the case and, I imagine, several more of you are now tut -
ng, rolling your eyes and muering I KNEW it. Wheres that Unsubscribe buon?(boom of the
last page no oence taken). Well today, were going to talk about precious metals again Im afraid,
but in a broader sense if that helps at all. For readers who are over the whole precious metals thing,
theres a nice cartoon on the last page and youll nd several stories about alternate subjects scat-
tered throughout pages 7 to 15). For those of you sll reading at this point, join me inside the recesses
of my mind. Please keep your hands and arms inside the carriage at all mes.
Whenever I look at an idea as either a potenal trade or a possible themac shi, the very rst ques-on I ask myself is does this idea make sense?. Plain old common sense. Nothing to do with the num-
bers or the likely quantum of any associated move, but would the idea seem reasonable if presented
to someone with either zero, or at best a very limited background in nance?
Whilst stories around individual stocks can fulll this criterion reasonably regularly, they oen oper-
ate in conned parameters (a parcular geography or a parcular market segment for example) and
so an idea is easier to explain and simple to quanfy. It is much harder to nd bigger picture, macro
ideas that make secular sense because, for the most part, these ideas but it is these big picture shis
that contain the possibility to make real money.
To illustrate this point, one of my
favourite charts of all me (le,courtesy of Bud Conrad) demon-
strates how, by making a single trade in each
decade, it was possible to take $35 in 1970 and turn it
into $159,591 in 2008. Of course, had you then made a
5th decision and completed the circle by reinvesng that
$159,591 back into precious metals - this me silver - in
2008 (and, to ensure nobody accuses me of picking the
low price well take the year high of $21, recorded the
day Bear Stearns disappeared), you would, this week,
have turned your $35 into a staggering $372,379.
Five simple, considered decisions over a forty year periodfor a gain of a lile over 1,000,000%.
Easy..... Kind of.
Te pressure to chase things, to follow momentum or to be involved is a considerableinuence on the decision-making process of most investors. Its easy to get caught up in trying to pick
interim tops in a rising market with the intenon of buying back on pullbacks to add a lile vig to any
gains being made. Get it right and you feel as though youre a seer - possessed with vision many hope
for but few achieve; get it wrong however and the consequences are potenally far, far worse. The
chances are youll nd yourself sing on the sidelines watching your great idea make other people
very rich because you just cant pull the trigger to buy something 5% higher than you sold it - or 10%,
$372,379
$372,379
SOURCE: BUD CONRAD
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or 20% - and for what? Because you tried to game a quick 5% extra by proving you could me the
market?
I have lost count of how many calls I have had from friends of mine who have bought either gold or
silver at some point in the bull run (sadly, most were late to the party because they just didnt believe
the story - but well get to that later) and wanted to know whether it was me to take some prot.
Ive lost count of the number of calls, but the quesons, in essence, were the same:
Silvers run really hard here. Should I sell some? What if it pulls back?
Golds over $1,500 now and I bought it at $1,200 - should I sell it and look to buy it back when it
corrects. Its goa correct, right?
My answer to both quesons was the same. What if it doesnt?
Yes, silver is extended. Yes, gold has performed incredibly well. But the point here is to understand
WHY you bought them.
If you bought silver for a trade then go ahead and sell it - depending on your entry point it has been a
hell of a trade. If you bought gold as a trade then the same thing applies. If it DOES pull back and you
want to play again you can. If it doesnt, then you sll made some money. But if you bought either
of the precious metals as an INVESTMENT, then you need to ask yourself a whole lot more quesons
before you call your broker, visit your bullion dealer or place an order to sell electronically.
Te reasons or buying precious metals are myriad, and their intrinsic worth will con-nue to be debated - probably for centuries - but, like it or not, based upon 5,000 years of history,
gold IS money. Silver IS money. You can argue it. You can at out denounce it, but there will always
be somebody happy to take your gold and silver o you at whatever market price you may deem ri-diculous. You cant win. Nobody can unilaterally declare the idea of gold and silver as stores of value
err..... well, valueless.
Last year Mark Dice went to the beach in California and tried to sell a one-ounce solid gold Canadian
Maple Leaf coin (worth, at the me, $1,100) to passers-by for $50 cash.
No takers.
This was one of my favourite exchanges:
Dice: Wanna buy it?
Dude: No thank you
Dice: Twenty bucks?
Dude: Not for me.
Dice: Its Canadian.
Dude: Oh, denitely not
But the best part of the video is when Dice tries to sell the coin to a passer-by who has a live parrot
casually sing on his shoulder. When you see a man in the street wearing a tropical bird as a fashion
accessory look at someone trying to sell him a 1-oz gold coin worth $1,100 as though HES crazy -
youve prey much hit rock boom. (If you want to watch the video, it s HErE but PLEASE... no emails
about Dices views on anything else - to me its just an interesng video)
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But enough about parrots and passers-by - they are mere distracons from the point I am trying to
make here.
In a big picture sense, as you can
clearly see from the chart, le, own-
ing precious metals (in this case
gold) has been the right trade for
the last ten years - it has been one
of those once-in-a-decade decisions
that, if you had made and stuck
with, would have made you real re-
turns. However, the volality that
has been evident during periods of
those ten years is such that many
people were, to use Richard Rus-sells analogy, shaken from the bull.
Many people saw 10% correcons
or even the big shakeout aer 2008
and, with very few believing gold
was anything but the next bubble, they dumped their holdings - convinced either a major correc-
on was under way or just around the corner or that the bull run in gold had ended and the bubble
had burst. Many were selling with a view to buying back and many were selling fearing a return to
$300 gold was not only possible, but probable. The big trade was all-but forgoen in the panic of
deleveraging.
Many who sold have yet to buy their gold back and have missed out as gold has more than doubled
from its late-2008 lows.
In Bud Conrads chart, he shows how a switch from one asset class to another onceevery ten years would have been all that was required and it just so happened that, at each crucial
juncture, another asset presented itself as the next big trade. The danger is that, in following Buds
example to the leer, especially now precious metals have run for ten years, it would be easy to
switch out of them and into the next big trade. But what is the next big trade?
It could be a short trade in US Treasuries, as many believe (certainly when something is at zero and
cant, in absolute terms at least, go below that level - in this case the discount rate - it is a prey safe
assumpon which way it will ulmately be headed). It could be a long posion in crude oil or a basket
of commodies if you believe in all or part of the Peak Everything theory laid out beaufully in the
great Jeremy Granthams latest leer - which you will nd HErE. (As an aside, if you HAVENT read it
yet - I recommend you take the me to do so as it is a truly marvellous piece of work - even by Jer -
emys loy standards - and one you will doubtless want to read again at some point.)
But heres the thing. What if the big trade is buying precious metals - again?
At no point does Bud Conrad say you cant have your money in the same asset class for consecuve
decades - in fact, Bud doesnt lay out the rules at all because there arent any. Its about nding the
big trade, making sure the logic of it is sound to you and then sing with it unl it has either run its
course, or you feel that a beer opportunity for long-term gain has presented itself.
Has the precious metals trade run its course? Well, I guess its possible - but lets look at the factors
that are aecng the price of what, for the specic purposes of this part of our program, we will referto as monetary metals.
SOURCE: GOLD RATE FOR TODAY
http://www.gmo.com/websitecontent/JGLetterALL_1Q11.pdfhttp://goldratefortoday.org/wp-content/uploads/2011/03/gold-chart-2001-2011.pnghttp://www.gmo.com/websitecontent/JGLetterALL_1Q11.pdf8/6/2019 ,DanaInfo=Exchange07+Hmmm Apr 30 2011
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Until 1971, gold backed every dollar in circulaon. Period.Behind every $35 in paper money, in a vault in the United States, sat an ounce of gold. Quiet, immu-table, stoic. The gold couldnt be printed at will or created out of thin air. The idea of dropping gold
from helicopters would have seemed downright dangerous or overtly stupid. Of course, as it turns
out, dropping paper money from helicopters has proven equally dangerous - parcu-
larly to the value of the dollar itself which broke through 73 this week and has now
lost roughly 90% of its purchasing power since the decision was taken by Nixon to
shut the gold window.
Never were the words of Nixons Treasury Secretary, John Connally (le), more ap-
ropos than today:
...[the dollar] is our currency, but your problem
Since that day, with the restraint of a gold-backed dollar removed, the amount of
dollars in circulaon has steadily increased unl, as the waves of 2008 crashed upon
the worlds shores, it absolutely exploded. The graph below shows the adjusted
monetary base, with the near-vercal updras represenng QE1 and QE2.
My friends Paul Brodsky
and Lee Quaintance of
QBAMCO recently pub-
lished parts II & III of
their paper entled Ap-
ropos of Everything and
I would recommend ev-
eryone who reads this to
email Paul and ask him
to send you a copy of all
three parts as, together,
they comprise one of the
single best reads I have
seen in years. In fact, if
you only have me in
your busy day to either nish reading this or dig into Paul and Lees exceponal wring then let me
help you out: STOP READING THIS AND EMAIL PAUL. NOW. Hee s the nk agan
In Apropos of Everything, Paul and Lee revisit their Shadow Gold Price which is a measure of what
returning to a gold-backed dollar would mean to the price of gold:
In a report distributed to our investors in December 2008 we divided Federal Reserve Bank Li-
abilies by US ocial gold holdings and dubbed it The Shadow Gold Price. A few months later
we began using the more conservave denominator, the Monetary Base, in our calculaon. As it
turned out, dividing the US Monetary Base by US ocial gold holdings happened to be the very
formula used in the Breon Woods system to establish the global xed monetary exchange rate.
Our logic was conrmed by long convenon...
The Flat column in the table above shows our current SGP, which implies the substanal devalu-
SOURCE: ST. LOUIS FED
mailto:pbrodsky%40qbamco.com?subject=Apropos%20of%20Everything%20-%20TTYMGH%20Referralmailto:pbrodsky%40qbamco.com?subject=Apropos%20of%20Everything%20-%20TTYMGH%20Referral8/6/2019 ,DanaInfo=Exchange07+Hmmm Apr 30 2011
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aon of purchasing power of the US dollar that has already occurred. Are we nuts? Are we assert-
ing gold should be valued at $10,000/ounce when it is trading around $1,500/ounce in London
and New York?
The SGPs purpose is to provide a sense of magnitude as to how much the US dollar has already
been devalued and how much further it may be devalued. (Obviously there can be no guarantees
about future pricing.) We believe the Shadow Gold Price provides the intellectual framework for
the magnitude of necessary future global currency devaluaon. We feel most comfortable with
this metric for two praccal reasons: 1) there is recent precedent for its use and 2) it actually
produces a lower gure than other valuaon metrics that include systemic credit in their calcula-
ons...
To put this table in perspecve, the Fed already increased the US Monetary Base over 200% since
2008, from about $850 billion ($3,251 implied SGP) to an esmated $2.6 trillion (following the
compleon of QE2). It is important to note that the Monetary Base only constutes systemic bank
reserves held at the Fed and currency in circulaon. It does not include upwards of $70 trillion in
US dollar-denominated claims, a signicant poron of which conceivably must be ulmately be
repaid in money from the Monetary Base that does not yet exist.
And there, in a nutshell, is the big trade in gold.
How do the worlds central banks nd a way out of the dire straits in which they ndthemselves? Faltering economic growth (look at this weeks US GDP number), insolvent banking sys-
tems in mulple insolvent sovereign countries (you know who you are), plummeng consumer con-
dence (Japan and Germany the latest examples of this phenomenon), crippling debt levels at both the
naonal and individual levels (higher US decit ceiling anybody?), spiralling inaon (no maer WHAT
core numbers may tell you) and their favourite (and some would say only) tool to ght it, namely
interest rates at or close enough to zero to make them almost ineecve.
Fear of all these issues amongst investors has driven them to what they consider safe money. Money
that cant be manufactured at will (though it CAN be conscated - but more of that another day) and
that will protect their purchasing power.
SOURCE: QBAMCO
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Yes, there is denitely some speculave froth in the monetary metal prices (nowhere more obvious
than silver at the moment) but, structurally, there are more reasons why monetary metals could well
be the next, next big trade and that resides in the dierence between the futures price and that ofthe metals themselves.
Historically, the monetary metals futures contracts were used primarily by gold producers to hedge
their exposure to uctuaons in the gold price and/or to lock in prices against their forward produc-
on. Simple. There have been all sorts of conspiracy theories about central banks leasing their gold
holdings in order to keep the price of gold down, thus validang their at currencies, and of bullion
banks manipulang the futures prices to make prots from the technical funds, but, again, we will
leave those aside today.
In August 1999, John Hathaway of Tocqueville Gold Fund wrote an essay called The Golden Pyramid (I
have linked to it in a previous edion of Things That Make You Go Hmmm..... but in case you didnt see
it, or didnt have the me to read it, I would urge you, if you have any interest in the monetary metals,
to do so. You will nd ithere)
In his essay, John lays out quite clearly how what he
calls the Golden Pyramid works:
The old currency gold/pyramid has been replaced by a
lile understood labyrinth of paper claims against gold.
Responsible senior ocials of mining companies, central
banks, and bullion banks cannot begin to understand the
internal mechanics in order to make appropriate judge-
ments of risk. There are few published gures, no reserve re-
quirements, no supervision or regulaon, and no accountabil-
ity. It is the private domain of bullion dealers, central banks, andmining companies. The credit worthiness of the old currency/gold
pyramid was quanable. The credit worthiness of the new pyra-
mid can only be an educated guess. Our guess is that it is bankrupt.
The gold derivaves pyramid is a vigorous free market creature. It
cannot be put down with a simple declaraon that the paper is no lon-
ger redeemable in gold, as governments did with currency. It is a short
selling scheme that has become a trap from which few short sellers will
escape. Paper claims in the form of derivaves far exceed the underlying
physical metal on which they are based. The trust, which balances this new
pyramid, is based on false assumpons and lack of informaon. Paper gold
claims have proliferated at a pace rivaling any government prinng press. A sur-feit of paper gold has driven down the price of the physical on which it is based.
The structure can survive as long as bullion dealers, the mining community and the
nancial media subscribe to the bearish case. But the posion of short sellers is precarious. This
is true whether gold stays at current levels, or drops below $200/oz. The point is, they will be un-
able to realize their paper prots, and stand to lose money on their posions in the aggregate.
The compound miscalculaons on which the gold market is based rank with the blowup of the yen
carry trade in 1998. The yen carry disaster illustrates how over-investment and near unanimity of
market opinion can lead to a vicious squeeze. Compared to the yen, golds liquidity is microscopic.
The coming squeeze will lead to a several hundred dollar rally and a permanent change in a-
tudes towards gold.
Federal Reserve
Notes (Dollars)
Treasury Bills
Government Bonds
Listed Stocks
Corporate Bonds
Municipal Bonds
Commodites
OTC Stocks
Diamonds & Gemstones
Real Estate
Small Business
GOLD
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Read that last sentence again.
The coming squeeze will lead to a several hundred dollar rally and a permanent change in a-
tudes towards gold.
Many casual readers of Johns work would have found that statement dicult to accept in 1999. They
would have, in fact, dismissed his words simply because the outcome he was proposing - a rise in
price of several hundred dollars - would have seemed extremely unlikely with Gold trading around
$300. And yet, the beauty of reading this essay now, 12 years later, is that you can clearly see a simple
idea that, with the benet of hindsight, makes complete sense.
The trick comes in trying to nd these simple, clear ideas WITHOUT the benet of hindsight.
So, to recap:
Sovereign governments are awash with debt; several are on the verge of inevitable default (you STILL
know who you are), Central Banks around the world have printed trillions of units of their respecvepaper currencies in the past three years in an aempt to smulate their moribund economies (which
are either slowing in the case of the US and the UK, or are pping back into recession like Japan),
policians are starng to nally understand that Austerity ISNTCalvin Kleins new cologne and are
about to nd out just how hard it will be to apply in the real sense, consumers are pulling in their
heads and are more concerned about the future than at any point since the depths of the crisis in
2008, the housing market in the United States - Ground Zero for the debt-driven disasters that pped
the world on its head - has turned down once more and is about to make new lows just as a slew of
Opon ARM resets are due, inaon is starng to bite in a real way, not only in Asia, but in the West
as well and all the REAL money that has ever been mined could STILL only ll a cube 67 feet in each
direcon (thanks for that, Warren).
Simple? Clear?
OK... aer that rather lengthy introducon, lets get to the important stu, shall we? Today we have
plenty of precious metal-related stu for you (it would be churlish of me not to include it aer those
opening pages) including a fascinang look at the supposed buy-side conspiracy, courtesy of Good-
man, Jesse gives us his views on the uctuaons in the Comex warehouses (dont miss those), we see
how this current rise in silver is nothing compared to 1980 and JPM Morgan are up to something in
the forgoen precious metal - possibly.
The Yuan breaks a key level, we hear how Goldman Sachs created the food crisis, nd 9 places ina-
on is hing home as the World Bank issues China with a warning and Ben Bernanke is told to makea tough choice.
We y forward in me to see a Fed press conference from 2012, see just what a problem the Baby
Boomers are and poor Jeerson County, AL, is slammed with a tornado.
Charts on housing, gold and silver (of course) and GDP as well as words from Bill Fleckenstein, Jim
Rickards and complete things for a bumper edion of Things That Make You Go Hmmm.....
What are you waing for?
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Contents 30 April 2011
Bernankes Press Conference, August 1, 2012
Short-Sellers Now Screaming About A Buy-Side Silver Conspiracy
What I Think The Fluctuaons And Trends In The Comex Silver Inventory Mean
Your Pick, Ben, But One Goes O The Cli
For A Few Dollars More Part One
How Goldman Sachs Created The Food Crisis
World Bank Warns China On Inaon
The 9 Places Where Inaon Is Crushing Us
Think Silver Just Went Parabolic? 1980 Was Faster
Why Is JPMorgan So Eagerly Acquiring Bars Of Physical Planum?
Tornado Slams Jeerson County Contemplang Bankruptcy
Yuan Breaks Through 6.5 Per Dollar For First Time Since 1993
Charts That Make You Go Hmmm.....
Words That Make You Go Hmmm.....
And Finally.....
The Gonnie, Gonnie Banks
# Bank Assets ($m) Deposits ($m) Cost ($m)
35 First National Central Bank of Florida, Winter Park, FL 352.0 312.1 42.9
36 Cortez Community Bank, Brookville, FL 70.9 61.4 18.6
37 First Choice Community Bank, Dallas, GA 308.5 310.0 92.4
38 The Park Avenue Bank, Valdosta, GA 953.3 827.7 306.1
39 Community Central Bank, Mount Clemens, MI 476.3 385.4 183.2
Total Cost to FDIC Deposit Insurance Fund 643.2
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August 1, 2012: Federal Reserve Chairman Ben Bernanke once again defended theFeds accommodave monetary policy at todays press conference. Mr. Bernanke was late to the con -
ference, which was shielded from protesters by riot police.
In his absence, a pet parrot was brought out to amuse the waing journalists, who had been carefully
veed by the Fed to represent the naons media. The parrot had apparently occupied a perch in
the Feds conference room, for it repeatedly squawked, Stocks are up, stocks are up.
The Fed chairman nally emerged someme later, looking somewhat
distracted. Recent developments in the global economy have cast
a shadow on the Feds connuaon of zero interest rates and
quantave easing, the term describing direct purchases of as-
sets such as mortgages, Treasury bonds and stocks.
As the dollar connued its slide, unemployed German workersshouted Death to America in mass protests in Germa-
nys industrial heartland. With the euro worth $2, Ger-
man exports to the U.S. have shriveled, causing a sharp
contracon in the once robust German economy.
In Japan, the 7th government in six months took power,
vowing to connue scal smulus, despite the failure of the
policy. The dollars decline has crushed Japanese exports to the U.S., as the dollar fetches only 55 yen,
far below the breakeven point for Japanese exporters.
Japans new prime minister voiced support for the quatloo, the new petroleum-backed currency be-
ing touted by Saudi Arabia, China and PIMCO as a global alternave to the U.S. dollar.
Chinas military deployed to 15 addional cies to quell the protests over rising food and energy
prices. As the Chinese economy spiraled into that naons rst deep contracon, Chinas leadership
connued to blame the Feds policies for crushing the dollar and driving up commodity prices.
Since the Chinese currency is linked to the dollar, then skyrockeng commodity costs caused by the
sinking dollar are also aecng the Chinese economy.
Just before the Fed press conference, President Obama announced that he was closing the commod-
ity futures exchanges to eliminate these speculators once and for all. He also announced that any
farmer caught hoarding grain would face conscaon of the grain by Federal authories.
We have to stamp out these evil speculators, whatever it takes, the President said from the safety
of the White House, which has been surrounded by angry mobs protesng $10 per gallon gasoline.
Gasoline suppliers responded to the closing of the futures exchange by raising the cost of fuel from
$10 per gallon to $11 per gallon.
O O O OF TWO MINDS / LINK
It was onlya maer of me. Now the talk of silver price conspiracies has shied from longbuyers to those on the other side of the fence. On April 21st, the historically an-precious metals
editorial sta of the London Financial Times ran an arcle tled Silver Surge Prompts Conspiracy
Theorists. Meanwhile, order was reestablished among the short side conspirators once the COMEX
trading oor opened on Monday morning.
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Aer silver prices had temporarily risen to over $49 per ounce during Asian trading, they were beaten
down again to about $47 in a ood of newly opened short posions. From this return to discipline
within the bullion bank ranks, we can assume that the Federal Reserve probably will temporarily haltQE-2 at the end of June or before.
At the close of business on Tuesday, April 26, 2011, the COMEX performance bond commiee will,
yet again, signicantly raise silver margin requirements. We believe that this is an aempt to suppress
prices and delay the inevitable reckoning. With the end of QE-2, short-sellers hope the exponenal
rise in the price of silver will also end. But, in our view, arcial price aacks in the futures markets
are unlikely to help short sellers in the long run. The nexus of price appreciaon is NOT at COMEX, but
in the physical market. Physical silver buyers pay cash, and it doesnt maer to them how high or low
COMEX commiees set performance bonds.
If the performance bond commiee is successful, they will manage to reduce the so-called spot
price. In praccal terms, however, the only thing they will have accomplished is to cause a few specu-
lators to lose money while helping well-nanced market vigilantes to buy more bars of physical silver
for the same money. The bankers will then need to deliver even more physical silver than they would
if the commiee had done nothing. These fule aempts to ght back illustrate that a market ma-
nipulaon cannot be eecve in a market that is well aware of it.
The massive losses that short sellers have been taken has naturally led to some new urban myths.
Some now claim that evil long side billionaires are out to ruin the market. Yet, even the Financial
Times arcle points out the ridiculously paranoid nature of this theory. The author notes that silver
prices were rising even as speculave posions at COMEX were reduced by 8.4%. This illustrates that
the COMEX is now just a sideshow. A lot of people are simply buying physical silver.
The silver buyers do include some billionaires, undoubtedly, but most of them are simply folks who
watched Jerey Chrisans tesmony at the well publicized CFTC posion limits hearing back on March25, 2010, and came away with the disnct impression that a small group of London banks have been
creang alchemic silver. The banks were ostensibly selling and then storing so-called unallocated
silver bars for silver investors. In reality, they seem to have been maintaining a fraconal banking sys-
tem in which only one physical ounce is really purchased for every 100 ounces they supposedly sell.
O O O AVERY GOODMAN / LINK
I am not talking about the specics, about which individual holder of bullion changed thestatus of a very large poron of the remaining registered silver inventory at the Comex, and what
their parcular movaon might have been. I imagine that the details of that transacon and its
short term intent will become known at some point. I am not even sure yet whether it is bullish or
bearish. It could be part of a short term trading gambit ed in with the coming opon expiraon.
I wanted to step back and get the signicance of this in the big picture. So I looked at the interacve
Comex silver inventory chart over at 24hourgold to see what the big withdrawal from the registered
ounces looked like in context. The chart goes back to middle 2008.
Several things stand out for me. First, there are denitely big declines in the past, certainly on the
order of the most recent decline this week.
There is one signicant dierence. Two of the biggest declines occurred at year end, and are indicated
on this chart (next page)as circles.
There are another two large declines in inventory comparable to this week in April me frames,
marked on the chart by rectangles.
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So its just a normal thing, right?
Not really. The prior two declines in April occurred aer signi-
cant builds in inventory from the rst of the year. This year that
simply did not happen. There was no bounce.
For me the most signicant aspect of the chart is the steady de-
cline in inventory over the past three years, stepwise at mes,
but geng dangerously low compared to the open interest in
the futures market which that inventory supports which con-
nues to increase. That is known in the trade as leverage.
I am sure that the exchange principals will pass along rumours
about a short squeeze and an aempted market corner, and try
to paint this as some insidious anomaly. Yes there are specula-
tors becoming involved, those who see what is happening. As the
Brish government aempted to hold the pound to an arcial
value, and was hammered down by traders, famously George Soros but primarily the faceless acng
through the Swiss, so too the metals manipulaon by the Anglo-American banking cartel is staggered,
and is probably going to go down hard, capitulate with a revaluaon and paral disclosure, and move
on from there. I think the episode of cheap gold and silver is over, unl a new cycle of money begins.
I prefer to view it as the natural outcome of a long term manipulated market, in which arcial
shortages have been introduced by protracted interference. If you arcially depress the price of
most things for a long enough period, in a market based system you will introduce underinvestment
and systemic shoralls that will only be corrected by either higher prices and investment in produc -
on, somemes with long lead mes, and/or with raoning either overtly, or through public rela-
ons campaigns that seek to discourage demand from a group of the people while other segments
take the remaining supply.O O O JESSES CAFE AMERICAIN / LINK
Its one or the other, Ben: you either push the real economy over the edge or you pushstocks and the risk trade o the cli.
Now that youve pushed the dollar down, Ben, its
your pick on what to push o the cli: your be-
loved risk trade or the real economy. Heres a chart
of the U.S. dollar and crude oil. Noce theyre on
a see-saw: when the dollar tanks, oil skyrockets.
When the dollar recovers a bit, oil declines.
Ben Bernanke and the Fed are replaying their 2008
game plan: drive the dollar down to goose the risk
trade in stocks. But a funny thing happened on the
way to blowing another equity bubble: oil bubbled
up, too, and that killed the real economy.
For the past three years, Ben has been trying to
resuscitate the real economy via the wealth ef-
fect: if your porolio of stocks is rising, then youll
feel richer and your animal spirits of borrowing
CLICK TO ENLARGE SOURCE: COMEX/JESSE
SOURCE: CHARLES HUGH SMITH
http://1.bp.blogspot.com/-ZbSjRmk5Qpg/TbBNZuTtNPI/AAAAAAAAQgs/XMfthOk87GU/s640/silverounces.PNGhttp://jessescrossroadscafe.blogspot.com/2011/04/what-i-think-fluctuations-and-trends-in.html8/6/2019 ,DanaInfo=Exchange07+Hmmm Apr 30 2011
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and spending will be aroused. The only proven way to goose stocks is to crush the dollar so overseas
corporate earnings will be boosted by the currency depreciaon (when transferred back into dollars,
even at prots look like theyre rising), and U.S. exports will be cheaper to our trading partners.
Flooding the U.S. market with liquidity and keeping interest rates at
zero had another consequence, one adamantly denied by the Minis-
try of Truth: it sparked a carry trade in which cheap dollars could be
borrowed for next to nothing and exported around the world to seek
higher returns.
Unsurprisingly, much of this free money owed into commodies,
which retained their value as the Fed pushed the dollar down. Also
unsurprisingly, oil exporters raised the price of their oil in dollars as
the dollar tanked.
Ben and his motley crew at the Fed reckoned that the nancialized U.S. economy would respondposively to the lower dollar and the goosing of the risk trade in stocks. But the guys and gals seem to
have forgoen that the real economy is dependent on oil. All the folks at the cocktail pares aended
by Yellen et al. may be gushing over their hey stock gains, but in the kitchen and carpark the workers
are grousing about the rising prices of food and gasoline.
Now the cost of oil--the lifeblood of the real economy--is close to the point that it will push the real
economy into recession. This sets up a dicult choice for Ben: if he pushes the dollar down to new
lows, then oil leaps up and pushes the real economy o the cli.
Alternavely, Ben renounces QE3 and surprises the markets with a rate increase, thus rescuing the
dollar from freefall and pushing oil down. But that will send his precious risk trade and equity Bull o
the cli.O O O CHARLES HUGH SMITH / LINK
Te U.S. Congress is dominated by Baby Boomers today and has been dominatedby this generaon since the 1990s. The Senate has 60 Boomers out of 100, while the House of Rep -
resentaves has 254 Boomers out of 435 members. Boomers occupied the White House from 1992
through 2008. They have had the polical power and control of the agenda for two decades and have
failed miserably. Rather than do what was best for the country for the long-term, they took the expe-
dient, easy, vote geng route. Promise more than you could ever deliver and let future generaons
worry about the consequences. Not one true noble statesman has arisen from this generaon of
myopic, self centered Me Generaon polical hacks. Even as the country nears the precipice, they
connue to address the great issues of the day with talking points supplied by other Baby BoomerPR maggots from Park Avenue. These weasels care not for the country, but worry only about poll
numbers and the next elecon cycle. An apathec public, dominated by the Baby Boom generaon,
has the aenon span of a gnat. As long as they can make the lease payment on their Escalade, use
one of their 15 credit cards at the Mall, be entertained by 600 cable TV staons, play with the latest
iSomething, live in their McMansion for two years without making a mortgage payment and consume
massive quanes of fast food, then any thoughts of future generaons or civic duty are unneces-
sary. Live for today has been the rallying cry for the Boomer generaon. Pot was their drug during the
1960s. Debt has been their drug since 1980.
The drug (debt) dealer for the Baby Boom generaon has been the Wall Street mega-banks, coinciden-
tally, run by Boomers. The enre corrupt nancial industry is being run by Boomers. The CEOs, CFOs,
...Alternatively, Ben renounces QE3and surprises the markets witha rate increase, thus rescuing thedollar rom reeall and pushing oildown. But that will send his pre-cious risk trade and equity Bull othe cli
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and the thousands of Harvard MBA VPs that created the
fraudulent derivave scheme to bilk billions from clue-
less municipalies, pension funds and American taxpay-ers are all Boomers. It is no coincidence that the great
debt delusion began in the early 1980s. Jim Kunstler
captured the essence of Boomer transformaon:
The Baby Boomers came back from the land, clipped
their pony tails, discovered venture capital, real estate
investment trusts, securizaon of consumer debt,
and the Hamptons. Greed was good.
The Boomer CEO hall of scam has been built on the
brilliance and nancial acumen of Lloyd (gods work)
Blankfein, Charlie (keep dancing) Prince, Jamie (friend
of Obama) Dimon, and the king of the Boomers, Hank
(the system is sound) Paulson. These mainstays of crony capitalism led the Boomer charge of greed,
greed and more greed. The Baby Boomer generaon has been the proverbial pig in a python working
its way through the decades as presented below. By 1985, Boomers had entered the work force in full
force with the enre generaon between the ages of 25 and 42. It will be a great day when the python
craps this pig of a generaon out the other end.
O O O THE BURNING PLATFORM / LINK
It took the brilliant minds of Goldman Sachs to realize the simple truth that nothing is morevaluable than our daily bread. And where theres value, theres money to be made. In 1991, Goldman
bankers, led by their prescient president Gary Cohn, came up with a new kind of investment product,a derivave that tracked 24 raw materials, from precious metals and energy to coee, cocoa, cale,
corn, hogs, soy, and wheat. They weighted the investment value of each element, blended and com-
mingled the parts into sums, then reduced what had been a complicated collecon of real things into
a mathemacal formula that could be expressed as a single manifestaon, to be known henceforth as
the Goldman Sachs Commodity Index (GSCI).
For just under a decade, the GSCI remained a relavely stac investment vehicle, as bankers re -
mained more interested in risk and collateralized debt than in anything that could be literally sowed
or reaped. Then, in 1999, the Commodies Futures Trading Commission deregulated futures markets.
All of a sudden, bankers could take as large a posion in grains as they liked, an opportunity that had,
since the Great Depression, only been available to those who actually had something to do with the
producon of our food.
Change was coming to the great grain exchanges of Chicago, Minneapolis, and Kansas City -- which
for 150 years had helped to moderate the peaks and valleys of global food prices. Farming may seem
bucolic, but it is an inherently volale industry, subject to the vicissitudes of weather, disease, and
disaster. The grain futures trading system pioneered aer the American Civil War by the founders of
Archer Daniels Midland, General Mills, and Pillsbury helped to establish America as a nancial jug-
gernaut to rival and eventually surpass Europe. The grain markets also insulated American farmers
and millers from the inherent risks of their profession. The basic idea was the forward contract,
an agreement between sellers and buyers of wheat for a reasonable bushel price -- even before that
bushel had been grown. Not only did a grain future help to keep the price of a loaf of bread at the
bakery --or later, the supermarket -- stable, but the market allowed farmers to hedge against lean
SOURCE: BURNING PLATFORM
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mes, and to invest in their farms and businesses. The result: Over the course of the 20th century,
the real price of wheat decreased (despite a hiccup or two, parcularly during the 1970s inaonary
spiral), spurring the development of American agribusiness. Aer World War II, the United Stateswas rounely producing a grain surplus, which became an essenal element of its Cold War polical,
economic, and humanitarian strategies -- not to menon the fact that American grain fed millions of
hungry people across the world.
O O O FOREIGN POLICY / LINK
Te good news is, the World Bank says Chinas GDP will connue to grow at a rate thatmakes the rest of the world envious -- 9.3 per cent this year, and 8.7 per cent next.
But their economists are warning Chinas macroeconomic policies sll need work to get inaon and
a roaring property market under control.
Much of the impact of the higher oil and industrial commodity prices is sllin the pipeline, inaon expectaons are high and there is lile spare capac-
ity in the economy. Therefore, a full normalizaon of the macro policy stance
is important, Louis Kuijs, a senior economist with the World Bank in Beijing,
told a brieng yesterday.
Along with hikes in interest rates and banks reserve requirement raos, Chi-
nese ocials have imposed price controls and used what the World Bank has
delicately described as moral suasion to keep prices of food and some consumer goods from rising
too fast, policies which economists warn only postpone the inevitable.
The prices of wheat and rice in China are set by government policy rather than internaonal markets;
China has also dipped into naonal reserves to boost supply of grains, increased farmer subsidies andexempted trucks transporng vegetables from road tolls to help limit food price inaon that hit 11.7
per cent in March.
At the end of March, the countrys Naonal Development and Reform Commission also said it would
begin sending inspectors to manufacturers of consumer goods to invesgate why prices were rising
and suggested some of those manufacturers would be invited in for a talk with the NDRC directly -- a
move widely seen as intended to discourage price increases.
Macro policy is beer placed to address the risks on inaon and the property market than moral
suasion and administrave measures. It is too early to stop the macro ghtening, Mr. Kuijs said.
We think the central projecon for inaon is not that bad but as we highlight, there are several
sources of risks, he said, among them being delaying price increases in consumer goods to reectthe real costs of raw materials and transport. Not doing so causes distoronsAt some point, these
administrave prices will have to increase and that adds inaonary pressures.
O O O THE GLOBE AND MAIL / LINK
Infation is ar from under control and its me that Americans demand our governmentocials do something about it.
The Federal Reserve would have you believe that everything is ne, focusing on core inaon rates
and ignoring broader measures of inaon as they aect food and energy. These commodity-driv-
en prices, as our central banking overlords would have you believe, are naturally more volale and
...We think the central projectionor infation is not that bad butas we highlight, there are severalsources o risks,
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/world-bank-warns-china-on-inflation/article2001749/http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis8/6/2019 ,DanaInfo=Exchange07+Hmmm Apr 30 2011
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shouldnt be overstated.
You would think aer Fed bureaucrat William Dudley was casgated for talking up the aordability
of iPads while ignoring real family expenses, our Federal Reserve ocials would have woken up to
reality. But aer the publicity stunt by Chairman Ben Bernanke on Wednesday, its clear that the Fed
and perhaps many Americans as a result is in denial when it comes to the inaonary trends
crippling U.S. households. Read about how the Feds reckless policy has created a catastrophic bubble
on InvestorPlace.com.
While its all well and good for investors to focus on surging precious metals and the prot opportuni-
es there, lets not overlook the dark side of inaon that is eang away at family budgets. Here are
nine crushing costs of inaon that are breaking many American households:
1. Beef
In a revised forecast Monday, the U.S. Department of Agriculture said consumers will see higher pricetags on ground beef and steak, projecng 6% to 7% increases year over year. Thats up from a previ -
ous forecast of just 4.5% to 5.5% inaon for beef prices. Beef prices have surged in the last several
months as supplies shrink, exports boom and grain costs soar.
2. Pork
Dont think you can just switch from cow to pig to avoid this trend pork could see retail price in -
creases of as much as 7.5% over 2010 levels according to the USDA.
3. Grains
Even going vegetarian is more expensive than it was a year ago. Corn prices have doubled, from $3.49
a bushel in July to well over $7.70 currently. Wheat prices have rolled back a bit in recent weeks, but
topped 2008 highs in February to set a new record and remain very high currently.
4. Gasoline
The average U.S. price of a gallon of gasoline has jumped about 12 cents over the last two weeks to
$3.88, with the highest average price for gas tallying $4.27 in Chicago. This is with oil at $112 a barrel
if crude prices reach 2008 peak levels of $145, four bucks for gas may seem cheap
O O O MARKETWATCH / LINK
Tis essay will aempt to ad-dress the queson of whether or not silver
prices are in a bubble, or possibly may beturning into a bubble and if so what trading
strategies may be suited to the situaon.
This arcle will hopefully provide another
string to the readers bow in aempng to
idenfy bubbles and being able to protect
ones porolio and even potenally prot
from them. For the record we feel it is pru-
dent to state our view upfront, we do not
think silver is in a bubble at this point in
me. However we think that it is likely that
it will become a bubble in the future, but
SOURCE: SKOPTIONSTRADING
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we cannot say when or at what price.
Asset price bubbles have occurred since the beginning of nancial markets and will connue to do so
as long as there remains a marketplace for assets to be traded. A key property of a bubble is that is it
near impossible to idenfy with certainty before it pops, but once it does pop the bubble is apparently
obvious to everyone. In our opinion, only those who risk capital and prot beng against a bubble
can claim to have correctly idened one.
A casual glance at the chart (previous page) could leave an impression that history is going to repeat
itself and silver prices are about to crash. However in order to not only successfully indenfy bubbles
but also prot from them, one will need to know the pping point. This is the point at which the bub-
ble is unsustainable and begins to break down.
There are many factors which contribute to the
emergence of bubbles and one would need to
look at a myriad of factors to determine when abubble may pop. We will focus on just one in this
arcle, momentum. In nance, momentum is
the empirically observed tendency for rising as-
set prices to connue to rise. We are aempng
to gauge when silver may run out of momentum
and when this bull market will turn into a bubble
and ulmately pop.
While some may consider it crude to study mo-
mentum as opposed to fundamentals such as
supply and demand, we feel that it is vitally im-
portant from both a psychological and technical standpoint. Psychologically if investors are used tosilver prices increasing 30% per year and then silver prices only increase at a rate of say 15% for one
year, psychologically this return looks poor on a relave basis, even though it is sll posive and nor-
mally would leave many investors sased. Therefore there is a greater incenve to sell silver since it
is not performing as well as it was in the past. Technically once a bubble is fully underway prices begin
to rise in a parabolic or exponenal fashion. If the price ceases to rise in an exponenal fashion, selling
will commence, even if the price is sll rising, since investors will have extrapolated the exponenal
rise and so anything short of parabolic will not meet their expectaons.
O O O RESOURCE INVESTOR / LINK
JPMorgan Chase isthe biggest derivaves issuer of all U.S. banks, but it is busy
below the radar, loading up its vaults with 50 troy ounce planum bars. JPMorgan has been a large net
physical planum buyer in 2011, and it was also a big buyer in 2010.
In 2010 the bank stopped a total of 975 planum contracts, while delivering only 463, resulng in a
net accumulaon of 512 contracts, represenng 25,600 troy ounces of planum. In 2011, the delivery
pace increased substanally. In January, 2011, JPM took delivery of 333 contracts, represenng ap-
proximately 16,650 troy ounces of planum.That month, a sum total of only 527 contracts were de -
livered to all clearing members, leaving JPM with 63% of all the delivered planum at NYMEX. Then,
in March, JPM took delivery of 12 more contract, even though it was a nonstandard o-month
for planum futures contracts. The o-month adventure added another 600 troy ounces to its kiy.
As of April 8, 2011, about 680 total planum contracts were delivered at NYMEX. Of those, 307 con -
SOURCE: SKOPTIONSTRADING
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tracts, 15,350 troy ounces, or over $27 million worth
of planum went to JPM. There are sll over 100 April
contracts le to be delivered, so it is likely that JPMsgross intake will likely rise further this month. Set
against these stoppages[i], are a mere 101 deliveries,
so net 2011 intake has been 551 contracts, 27,550 troy
ounces, more than $49 million worth of the precious
white metal - even though the year has barely begun!
So far, combining this year and last, nong that the
April NYMEX delivery month is not yet over, JPM has
accumulated approximately $76 million worth of phys-
ical planum bars. That does not count any bars that
may have been delivered to it at the secreve London
Planum and Palladium Market Associaon (LPPM).
The planum market is bigger than that, but most of it is actually made up of a combinaon of
derivaves and unallocated storage schemes. In other words, $76 million in physical planum is a
huge amount for anyone, except, perhaps, a big internaonal auto/truck manufacturer to buy in
about 12 months. This raises a few quesons. Who exactly, within the JPM-Universe, is accumulat -
ing physical planum through NYMEX deliveries? Is it the bank itself? Or, is it one or more of its
customers?According to the bank, it closed its proprietary trading division back in October 2010.
Rumor has it, however, that most of the posions and the execuves were simply transferred to close-
ly related hedge funds. But, in any event, accumulaon of physical planum started last year when
JPMs proprietary trading division was very acvely operang. So, chances are that the accumulaon
of planum bars is a bank decision, not one from its customers.
O O O SEEKING ALPHA / LINK
Jeerson County, Alabama, alreadyon the brink of bankruptcy,faces another emergency aer a tornado ripped through the states most populous county, destroy-
ing 1,000 homes and killing at least 30 people.
The county of 660,000 people, which may run out of cash in July, was devastated yesterday when a
tornado with winds of more than 100 miles an hour (161 kilometers an hour) tore through the west
side and then slammed into Birminghams northern neighborhoods. More than 100 people were
injured.
Police, reghters and public-works crews from the countys more than 40 municipalies have started
search-and- rescue operaons, and the death toll and injuries will probably climb, said Mark Kelly, aspokesman for Jeerson Countys Emergency Management Agency. At least 1,000 homes in Jeerson
County were aened and unliveable, said Allen Kniphfer, the agencys execuve director.
You somemes say nothing else can happen, David Carrington, president of the county commission,
said at a meeng in Birmingham to discuss the emergency. Im not going to say that anymore.
At least 280 people died in six states, including 194 in Alabama, as dozens of storms tore apart homes
and businesses, the Associated Press reported. As many as 1 million residents were le without pow-
er, Governor Robert Bentley said.
It was the deadliest single day for tornadoes in the U.S. since April 3, 1974, when 310 people died,
according to AccuWeather Inc.
SOURCE: SEEKING ALPHA
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Jeerson County wont bear much of the cost of the clean- up because President Barack Obama
yesterday issued a disaster declaraon and the federal government will reimburse the county for
expenses, Kelly said. Assistance from towns will also help the county, he said.
We have to do what we have to do to address the loss of life and damage to property, and to try to,
as quickly as we can, get life back to normal, Kelly said.
Encompassing Birmingham, Alabamas biggest city, the county has sought since 2008 to avoid the
biggest-ever U.S. municipal bankruptcy aer interest costs on more than $3 billion of sewer debt
soared during the nancial crisis. The nancing process was riddled with corrupon.
Last month the state Supreme Court struck down a wage and business-license tax enacted in 2009,
amplifying the countys scal crisis. The ruling slashed general-fund revenue by about 25 percent, or
$73 million a year. The county may have to cut 1,200 of its 3,500 employees to cope with the drop.
O O O BLOOMBERG / LINK
Chinas yuan strengthened beyond 6.5 per dollar for the rst me since1993, supported by speculaon the central bank will allow appreciaon to help tame the fastest ina-
on in more than two years.
The currency was headed for a seventh straight weekly gain, its best winning streak since July 2008,
aer the Federal Reserve signaled plans to maintain its record monetary smulus. Chinas consumer
prices rose 5.4 percent from a year earlier in March, exceeding the governments 4 percent goal for
this year. Inaon may reach 5.6 percent in May and June, Xinhua News Agency reported yesterday,
cing an unidened Ministry of Finance ocial.
Inaon is sll higher than what the government would like to see,
said David Cohen, a Singapore-based economist at Acon Economics, who
previously worked for the Fed. The central bank is tolerang faster currency
appreciaon to contain import costs.
The yuan strengthened 0.12 percent to 6.4935 per dollar as of 10:05 a.m.
in Shanghai, the strongest level since the country unied ocial and market exchange rates at the end
of 1993, according to the China Foreign Exchange Trade System. Its set for a 0.85 percent monthly
advance, the best performance of 2011.
Twelve-month non-deliverable forwards rose 0.09 percent to 6.3175 per dollar in Hong Kong, trad -
ing at a 2.8 percent premium to the onshore spot rate, according to data compiled by Bloomberg. In
Hong Kongs oshore market, the currency rose 0.06 percent to 6.4785 per dollar as local billionaire
Li Ka- shings Hui Xian Real Estate Investment Trust, the citys rst listed shares denominated in yuan,began trading.
The unusually fast pace of yuan gains conrms that the yuan is being used to ght inaon, Dariusz
Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong, wrote in a note to clients today. He
said there may be a sharp gain once 6:50 is breached and recommends buying the yuan against the
greenback using non-deliverable forwards.
O O O BLOOMBERG / LINK
...Te central bank is toleratingaster currency appreciation tocontain import costs.
http://www.bloomberg.com/news/2011-04-29/china-s-yuan-strengthens-beyond-6-5-per-dollar-for-first-time-since-1993.htmlhttp://www.bloomberg.com/news/2011-04-28/tornado-strains-jefferson-county-as-officials-weigh-bankruptcy.html8/6/2019 ,DanaInfo=Exchange07+Hmmm Apr 30 2011
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...Many o you will recall this chart that showed the monthly dollar gure of mortgageresets for the years 2007 through 2014.
The original chart was ploed as a column chart. I have converted the gures into a line chart and
over-laid it against the Case-Shiller index. There have been several updated versions of the original
chart, and they do not all agree exactly on the monthly amounts. In those instances, I have used an
average to construct the following chart. The Case-Shiller Index is as of February 2011, which is the
latest available data. Here it is:
The steep decline in house prices
that commenced in 2007 was inter-
rupted by two speed bumps of re-
prieve in 2009 and 2010, which were
the products of several government
intervene-and-rescue schemes.
The $8,000 rst-me homebuyers
tax credit that was rolled out in 2009
(and expired later that year) was re-
vived and expanded in 2010. The
brief and shallow recovery in house
prices during both years directly cor-
relates to the smulang eects on
demand fostered by these programs.
As you can see, throughout it all, U.S.
house prices have had to contendwith a mul-year series of spikes in
mortgage resets within the context
of an overall elevated level of resets, as shown in
the next chart (below le).
The $421-billion reset hurdle for housing in 2011
will connue to exert downward pressure on pric-
es. As these mortgages are adjusted to a higher
interest rate and hence a higher monthly mort-
gage payment it will likely mean another wave
of homeowners unable to make the new pay-
ment, ending up in foreclosure or a short sale (thehouse is sold for less than is owed, conngent on
the banks acceptance of such terms).
How big might that wave be? If we make a few
reasonable assumpons, we can make an inial
esmate of the number of mortgages facing reset.
Assuming that most of the mortgages are ve-year ARMs means they were originated in 2006 when
the median price for a house was $242,000. Doing the math ($421 billion divided by $242,000) gives a
ballpark gure of 1.74 million mortgages that could potenally adjust this year. But the actual number
is almost certainly less, as many of these loans have already defaulted.
O O O KEVIN BREKKE / LINK
SOURCE: CASEY RESEARCH
http://www.caseyresearch.com/cdd/climbing-mountains8/6/2019 ,DanaInfo=Exchange07+Hmmm Apr 30 2011
21/24
21.CHARTS THAT MAKE YOU GO Hmmm...
30 April 2011 21
Gold was the ead to-day and in style.
Why?
Because the dollar was thrown un-
der the bus by Bernanke yesterday,
and gold is sll the primary alterna-
ve currency.
Silver had a bit of a cheap pullback at
end of day, but aer the huge turn-
around this week there should be
few complaints.
The shorts are impaled.
SOURCE: JESSES CAFE AMERICAIN
SOURCE: JESSES CAFE AMERICAIN
SOURCE: JESSES CAFE AMERICAIN
CLICK TO ENLARGE
CLICK TO ENLARGE
http://2.bp.blogspot.com/-CsJZ_lFLj3I/Tbsa9Lc0DoI/AAAAAAAAQlk/QzEGNwGpIk8/s1600/silverweekly4.PNGhttp://2.bp.blogspot.com/-CsJZ_lFLj3I/Tbsa9Lc0DoI/AAAAAAAAQlk/QzEGNwGpIk8/s1600/silverweekly4.PNGhttp://2.bp.blogspot.com/-CsJZ_lFLj3I/Tbsa9Lc0DoI/AAAAAAAAQlk/QzEGNwGpIk8/s1600/silverweekly4.PNGhttp://3.bp.blogspot.com/-bdFJ9F7Dlys/Tbsa7JJfVYI/AAAAAAAAQlg/qry0FPJBKbc/s1600/golddaily8.PNG8/6/2019 ,DanaInfo=Exchange07+Hmmm Apr 30 2011
22/24
8/6/2019 ,DanaInfo=Exchange07+Hmmm Apr 30 2011
23/24
23.
30 April 2011 23
WORDS TH AT MAKE YOU GO Hmmm...
Bill Fleckenstein talks to EricKing about government handouts, real estate, pre-
cious metals, the sliding dollar and the perils of
trading from the short side.
As always, Fleck is at the top of his game and reit-
erates his long-held beliefs about the culpability of
the Federal Reserve (saving his harshest words for
his nemesis, Alan Greenspan)...
Jim Rickards talksto Eric King about Chinas $3 trillion
in reserves, our old friends gold &
silver and the acons of the Federal
Reserve.
Another great interview.
During a recent visit to Wharton as partof The Goldstone Forum, [nassim Taleb] spoke with Whar-
ton nance professor Richard Herring -- who taught Taleb
when he was a Wharton MBA student -- about events in
the Middle East, the oil supply, invesng in opons, the U.S.
economy, the dollar, health care and of course, black swans.
CLICK TO WATCH
CLICK TO LISTEN
CLICK TO LISTEN
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2755http://www.kingworldnews.com/kingworldnews/Broadcast/Broadcast.htmlhttp://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/4/28_Bill_Fleckenstein_files/Bill%20Fleckenstein%204%3A28%3A2011.mp38/6/2019 ,DanaInfo=Exchange07+Hmmm Apr 30 2011
24/24
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