"t was similar in the United Kingdom. In 1918, the U.K. was the richest, most powerful country in the world. It had just won the First World War, et cetera. By 1939, it had exchange controls and this is in just one generation. And strict exchange controls. They in fact made it an act of treason for people to use anything except the pound sterling in settling debts. "
"Has this thread slowed down since being dropped over here?
And who decided that this one belongs in the PM forum?
Ren"
Maybe this thread has slowed a bit since it had become somewhat of a single source for predictions but with the new venue there are fractional topics that kind of spun off of the GS original thread and the result seems to be good. But, it kind of had to be done, we were screwin' with the boys on the other forum. People were reading our stuff instead of their stuff. You know, you have to keep the hype up and move dead stuff like the pressies and all the gimmick stuff and flipper bait to the uninformed. For some reason I guess this thread screwed up their game with us talking about buying PM and saving cash and reducing personal debt and them hypeing the rev' 07's and smooth presidential dollars and all the other "rare" stuff as future money makers. Our only problem here is that we're not trying to sell anything to our co-forumites; no "look at this" or "Grade this/opinion" or "do you like this toning" trolling threads. So, we got moved into our own house...not bad eh? It's much better like this.
But on the on the other hand and as noted by an earlier poster, GS's thread is the first time a thread became it's own forum and since it is top ten on the google search for metal, we're in good company. Not to worry, you will adapt.
NO MAS NO MAS NO MAS How do you say that in Chinese?
Aug. 20 (Bloomberg) -- Fannie Mae and Freddie Mac's success in repaying $223 billion of bonds due by the end of the quarter may determine whether they can avoid a federal bailout.
Investors in Asia, the biggest foreign owner of Fannie's $3 trillion of bonds, are reducing their share of purchases, potentially increasing the need for Paulson to make good on his pledge to backstop the companies.
Fannie paid a record high yield in a $3.5 billion sale of three-year benchmark notes last week that drew less demand from Asia. Investors in the region bought 22 percent of the offering, almost half the demand of three months ago and about two-thirds of Asia's usual purchases.
“THE PONZIE SCHEME”
Fannie and Freddie issue new debt to pay off outstanding obligations as they mature and have a combined $1.7 trillion in outstanding unsecured notes and bonds. The companies can also sell securities to raise cash.
Fannie was created as part of Franklin D. Roosevelt's New Deal in the 1930s.
<< <i>"Has this thread slowed down since being dropped over here?
And who decided that this one belongs in the PM forum?
Ren"
Maybe this thread has slowed a bit since it had become somewhat of a single source for predictions but with the new venue there are fractional topics that kind of spun off of the GS original thread and the result seems to be good. But, it kind of had to be done, we were screwin' with the boys on the other forum. People were reading our stuff instead of their stuff. You know, you have to keep the hype up and move dead stuff like the pressies and all the gimmick stuff and flipper bait to the uninformed. For some reason I guess this thread screwed up their game with us talking about buying PM and saving cash and reducing personal debt and them hypeing the rev' 07's and smooth presidential dollars and all the other "rare" stuff as future money makers. Our only problem here is that we're not trying to sell anything to our co-forumites; no "look at this" or "Grade this/opinion" or "do you like this toning" trolling threads. So, we got moved into our own house...not bad eh? It's much better like this.
But on the on the other hand and as noted by an earlier poster, GS's thread is the first time a thread became it's own forum and since it is top ten on the google search for metal, we're in good company. Not to worry, you will adapt. >>
Thanks for the info. I didn't realize this thread was the reason for this forum...that is very cool.
I must be very naive or not absorbent but some "sellers" are posting so that they can peddle their stuff on "grade this/opinion" or "do you like this toning" threads(?) How underhandedly rude!
I believe this will not only occur on the Federal level but also at the State level as well. Big government in unsustainable. A possible reversal from socialism to privatization.
<< <i>"Any thoughts on why the financial press has not noted the lack of supply of physical silver and gold? It would make for good ratings. "
/////////////////////////////////////////
Maybe because there is NO genuine "lack of supply."
Likely just a bunch of burried resellers not willing to lose money, yet. >>
Actually, there is indeed a shortage of physical silver. Industial stockpiles are virtually gone worldwide, even the US Mint has none to very little. Same with the Canadian Mint.
What we are seeing is a manipulation to shake out the lesser players and bring silver to the open market that has been hoarded away.
The squemish are following in lockstep and selling now under the false assumption that they are geting out while they can recoup as much as possible.
Not many around here are falling for it.
Saw a guy sell 7 100 ouncers last week and he took a loss on them but was happy it was a small loss. I bought them in minutes after he left the store.
Unless he really needed the money, I don't think he will be so happy in the future.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
It is quite possible that our money supply which includes credit from banks (M3 and M4) may now be shrinking instead of growing.
I would probably agree that money in circulation (basically M1) is shrinking as banks hoard cash. But the M3 component is probably rising because a lot of this new FED induced money is off the books. In one respect it looks like a liquidity and deflation to some, and massive inflation and a feeding frenzy to others. It's up to each one to decide what it is (deflation or inflation....or both or none of the above).
Why is it that the Asians do not want to buy any more of this really good paper?
Lehman’s secret talks to sell 50% stake stall By Henny Sender and Francesco Guerrera in New York
Published: August 20 2008 23:30 | Last updated: August 20 2008 23:30 Lehman Brothers, the beleaguered US investment bank, held secret talks to sell up to 50 per cent of its shares to South Korean or Chinese parties in the first week of August but failed to reach agreement with either.
The South Koreans and Chinese walked away after concluding that Lehman was asking too high a price, said New York-based people familiar with the potential buyers. Lehman declined to comment. The price under discussion was 50 per cent above Lehman’s book value.
Perhaps I should have made my post clearer regarding my thoughts on the M3 and M4 money supply.
Actually, we are seeing a massive reduction in privately held real currency and credit whereas the amounts of credit held by the public sector including the Federal Reserve Bank of New York and the US Treasury is exploding.
This is such an awful cross current of inflationary as well as deflationary events that it is making it so difficult to "read" what is going on.
This is so different from the 1929-1940 Great Depression in that the US Treasury and the Federal Reserve were running huge surpluses and tightening credit as well as the member and non-member banks ability to extend credit was imploding at the onset of the Great Depression making the Great Depression a deflationary one.
What we have here is a total cross current winds. Government and the Federal Reserve Bank risking hyperflation while the Federal Reserve member banks and investment community is seeing their ability to extend credit implode.
Enough to give you whiplash in the neck to see what will ultimately happen. This is why it pays to be diversified as much as possible.
I also fear that a continuation of this kind of nonsense will eventually end up with some kind of United States currency controls, which will be a disaster.
Did Great Britain go down the same path by the late 1930's??
Oh great now the investment guys want to take over our banks so they can play their funny money games with our deposits.
THE STREET.COM Aug.21st 2008
Starved for Capital, Lenders Call on Banks
Lenders who had relied on now-choked debt and equity markets for financing are increasingly looking to good, old-fashioned bank deposits as a cheaper and more reliable alternative.
"Deposits will be our principal source of funding going forward,"
However, many lenders will not be able to convince bank regulators to trust them with deposits, which in most cases are insured up to $100,000 by the FDIC. Indeed, that may be one of the reasons MatlinPatterson, a vulture investment firm that has reportedly been trying to acquire a bank for some time as an additional source of capital for struggling Santa Fe, N.M.-based Thornburg Mortgage, has not yet sealed the deal.
Given the recent bank failures, one might expect regulators to be more cautious about approving new buyers for banks. On the other hand, banks need capital, and regulators are interested in encouraging lenders to diversify beyond mortgages.
OK, reading the tea leaves and I can see that what ever was happening seems to have happened and is done for now; oil back to reasonable levels, silver and gold rising, corn etc. moving upwards, DOW flat. So, when will we know what happened...who is so big that their influence was so much that it all took a dive at once, are they done now, is it over, is it save to come out? Just who was that masked man and where'd he get those silver bullets?
It's weird thinking that it would be good if silver got back to $17 so I could buy some on the open market instead of being locked out at $14. Now who in their right mind would want to buy silver at $17...strange times indeed.
Perhaps I should have made my post clearer regarding my thoughts on the M3 and M4 money supply.
Actually, we are seeing a massive reduction in privately held real currency and credit whereas the amounts of credit held by the public sector including the Federal Reserve Bank of New York and the US Treasury is exploding.
This is such an awful cross current of inflationary as well as deflationary events that it is making it so difficult to "read" what is going on.
This is so different from the 1929-1940 Great Depression in that the US Treasury and the Federal Reserve were running huge surpluses and tightening credit as well as the member and non-member banks ability to extend credit was imploding at the onset of the Great Depression making the Great Depression a deflationary one.
What we have here is a total cross current winds. Government and the Federal Reserve Bank risking hyperflation while the Federal Reserve member banks and investment community is seeing their ability to extend credit implode.
Enough to give you whiplash in the neck to see what will ultimately happen. This is why it pays to be diversified as much as possible.
I also fear that a continuation of this kind of nonsense will eventually end up with some kind of United States currency controls, which will be a disaster.
Did Great Britain go down the same path by the late 1930's?? >>
Tend to agree with your thoughts, though I don't know about Great Britain, worth some study though.
I don't like what I am seeing at all.
Inflation and depression at the same time will ruin the majority of US citizens over a short time period of even less than two years, but that sure looks like what is going on. Wholesale food prices up 10% alone in the last month, jobs and wages going down the tubes. Not good, not good. Even the illegal Mexicans are fleeing the country in droves and heading back to Mexico.
I just noticed the other day that the large bags of cat food that I was buying for $8.99 last month are now going for $13.99. I'm sure the rest of the food supply is going in the same direction. Wonder how long my full freezers will last me? Already stocked up a year's supply of dried beans, pasta and rice a few months ago, those prices have nearly doubled today. I think I'll be enlarging my fall garden.
Worst of all, it seems quite manipulated. I think there is a special place in the afterlife for those behind all this.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance..... --Cicero, 55 BC
Some things never change....and they didn't even need a FED to drive their monetary system to ruin.
<< <i>The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance..... --Cicero, 55 BC
Some things never change....and they didn't even need a FED to drive their monetary system to ruin.
<< <i>The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance..... --Cicero, 55 BC >>
Of course he was murdered as an enemy of the state shorthly thereafter. Then came the reign of the Ceasars and the final ruin of Rome. They had hundreds of years to rectify it before the final fall, we can do that in the next 10 or less.
Just suppose the Fed announced that we were officially bankuipt and there would be no more Government services, just suppose that happend in the next several months. It isn't that far fetched. They'd scoop up all the politicians and give them protection from us, the evil citizens and all Hell would break loose.
Actually, Civil War would break loose. I've often wondered just how close to that we could be. No apocalyptic visions here, just some thinking slightly outside the box.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance..... --Cicero, 55 BC >>
Of course he was murdered as an enemy of the state shorthly thereafter. Then came the reign of the Ceasars and the final ruin of Rome. They had hundreds of years to rectify it before the final fall, we can do that in the next 10 or less.
Just suppose the Fed announced that we were officially bankuipt and there would be no more Government services, just suppose that happend in the next several months. It isn't that far fetched. They'd scoop up all the politicians and give them protection from us, the evil citizens and all Hell would break loose.
Actually, Civil War would break loose. I've often wondered just how close to that we could be. No apocalyptic visions here, just some thinking slightly outside the box. >>
They would still have to keep ONE of the government services happy...... the military! Otherwise they would have no place to go with absolutely no protection!
And now we have another bank failure..... the Columbian Bank and Trust in Topeka, KS. Small potatoes.... under 1 Billion needed for bailout. Have you all noticed how complacent the public is becoming about the bank failures? The first one or two seemed to get quite a bit of notice.... but now, it seems to be business as usual. Bank failing?..... no problem. Just keep watching American Idol or the Olympics.... and Uncle Benny will take care of us....
well golly shucks after yesterday, cousin Ben says things are gettin' better??
heck, i just went to the gas station to fill up my rig, (and get some more chew and a 12 pak, a daily thing with the chew and 12 pak) thinkin' that a few sawbucks ($10 for you upitty folks here) and a couple a chickens would be "enuff" to hold me over' till i got me my check from the guvmint, dang! my third cousin (actually my sisters boyfriend..we're kinda close here) said my kredit was no good no more.
so i walked home (had to get the Pabst, even shared a can with the sheriff who drove by, ya know.... that do unto others stuff?) and dug up momma's grave and yanked what few teeth she had left (thinkin' about the golden rule, still) and took the gold back to settle things up.
she laughed at me like i was some kinda gold tycoon.
i need to call my cousin Ben and see if i can qwalify for this beggin' bowl contraption.
Little guy beats Uncle Sam Kind of OT for the thread, but still pretty interesting, and anyone who got a payout when an insurance company went public could benefit.
"Despite the Fed’s best efforts, the broadest measure of money supply in the U.S., including outstanding credit — known as M3 — has fallen off a cliff. July saw the biggest one-month drop in M3 since the government started keeping track in 1959."
Sharp US money supply contraction points to Wall Street crunch ahead By Ambrose Evans-Pritchard Last Updated: 3:04pm BST 19/08/2008
The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months.
Data compiled by Lombard Street Research shows that the M3 ''broad money" aggregates fell by almost $50bn (£26.8bn) in July, the biggest one-month fall since modern records began in 1959.
"Monthly data for July show that the broad money growth has almost collapsed," said Gabriel Stein, the group's leading monetary economist.
advertisementOn a three-month basis, the M3 growth rate has fallen from almost 19pc earlier this year to just 2.1pc (annualised) for the period from May to July. This is below the rate of inflation, implying a shrinkage in real terms.
The growth in bank loans has turned negative to a halt since March.
More by Ambrose Evans-Pritchard More on banking "It's obviously worrying. People either can't borrow, or don't want to borrow even if they can," said Mr Stein.
Monetarists say it is the sharpness of the drop that is most disturbing, rather than the absolute level. Moves of this speed are extremely rare.
The overall debt burden in the US economy is currently at record levels, raising concerns that a recession - if it occurs - could set off a sharp downward spiral.
Household debt is now 131pc of disposable income, compared with 93pc at the top the dotcom bubble, 79pc in the property boom of the late-1980s, and 62pc at the end of the 1970s.
The M3 data measures both cash and a wide range of bank instruments. It tends to provide an early warning signal of major shifts in the economy, although the US Federal Reserve took the controversial decision to stop reporting the statistics in 2005 on the grounds that the modern financial system had rendered the data obsolete.
Monetarists insist that shifts in M3 are a lead indicator of asset prices moves, typically six months or so ahead. If so, the latest collapse points to a grim autumn for Wall Street and for the American property market. As a rule of thumb, the data gives a one-year advance signal on economic growth, and a two-year signal on future inflation.
"There are always short-term blips but over the long run M3 has repeatedly shown itself good leading indicator," said Mr Stein.
He cautioned that the three-month shifts in M3 can be highly volatile.
M3 surged after the onset of the credit crunch, but this was chiefly a distortion caused by the near total paralysis in parts of the American commercial paper market. Borrowers were forced to take out bank loans instead. The commercial paper market has yet to recover.
The University of Michigan's index of consumer sentiment has fallen to the lowest level since the 1980s recession.
The US economy is without doubt facing severe headwinds going into the autumn.
Richard Fisher, the ultra-hawkish head of the Dallas Federal Reserve, warned over the weekend that growth would be near "zero" in the second half of the year.
Sharp US money supply contraction points to Wall Street crunch ahead By Ambrose Evans-Pritchard Last Updated: 3:04pm BST 19/08/2008
The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months.
Data compiled by Lombard Street Research shows that the M3 ''broad money" aggregates fell by almost $50bn (£26.8bn) in July, the biggest one-month fall since modern records began in 1959.
"Monthly data for July show that the broad money growth has almost collapsed," said Gabriel Stein, the group's leading monetary economist.
advertisementOn a three-month basis, the M3 growth rate has fallen from almost 19pc earlier this year to just 2.1pc (annualised) for the period from May to July. This is below the rate of inflation, implying a shrinkage in real terms.
The growth in bank loans has turned negative to a halt since March.
More by Ambrose Evans-Pritchard More on banking "It's obviously worrying. People either can't borrow, or don't want to borrow even if they can," said Mr Stein.
Monetarists say it is the sharpness of the drop that is most disturbing, rather than the absolute level. Moves of this speed are extremely rare.
The overall debt burden in the US economy is currently at record levels, raising concerns that a recession - if it occurs - could set off a sharp downward spiral.
Household debt is now 131pc of disposable income, compared with 93pc at the top the dotcom bubble, 79pc in the property boom of the late-1980s, and 62pc at the end of the 1970s.
The M3 data measures both cash and a wide range of bank instruments. It tends to provide an early warning signal of major shifts in the economy, although the US Federal Reserve took the controversial decision to stop reporting the statistics in 2005 on the grounds that the modern financial system had rendered the data obsolete.
Monetarists insist that shifts in M3 are a lead indicator of asset prices moves, typically six months or so ahead. If so, the latest collapse points to a grim autumn for Wall Street and for the American property market. As a rule of thumb, the data gives a one-year advance signal on economic growth, and a two-year signal on future inflation.
"There are always short-term blips but over the long run M3 has repeatedly shown itself good leading indicator," said Mr Stein.
He cautioned that the three-month shifts in M3 can be highly volatile.
M3 surged after the onset of the credit crunch, but this was chiefly a distortion caused by the near total paralysis in parts of the American commercial paper market. Borrowers were forced to take out bank loans instead. The commercial paper market has yet to recover.
The University of Michigan's index of consumer sentiment has fallen to the lowest level since the 1980s recession.
The US economy is without doubt facing severe headwinds going into the autumn.
Richard Fisher, the ultra-hawkish head of the Dallas Federal Reserve, warned over the weekend that growth would be near "zero" in the second half of the year.
Yup, M3 "dropped" like a stone from +17% to +15% yoy. The FED pumped in so much in the past few months they had to give their fingers a rest from the keyboards. Smells like spin to me.
It's becoming pretty clear that the cartel smack down in gold was due several major things all coming together at once:
Fannie and Freddie on verge of bankruptcy and to be bailed out/nationalized Georgia/Russia confrontation building for the past 30+ days Lehman or some other large bank getting very close to failure Elections getting too close for comfort with any additional bad news
And to coordinate gold's takedown, 3 major banks increased their gold shorts by a factor of 5X over a one month period.
The difficulty in this analysis is that M3 is now just an estimate. There is no more reporting of M3. My undergraduate economics days are long behind me, but we were taught to always follow M3. I wonder what economics students are now taught to study?
The smoking Gun Major banks brought down the prices selling short?
The Smoking Gun
By: Theodore Butler
For years, the data contained in the weekly Commitment of Traders Report (COT), issued by the CFTC, have indicated that several large COMEX traders have manipulated the price of silver and gold. For an equal number of years, the CFTC has reluctantly responded to public pressure over this issue with blanket denials of any wrongdoing. Many analysts have agreed with the CFTC’s position, conjuring up various ways to explain why a massive short position held by a handful of traders is not manipulative.
The recent widespread shortage of silver for retail purchase coupled with a price collapse appears to have shaken these analysts’ confidence that the COMEX silver market is operating ‘fair and square.’ Well it should, since there is no rational explanation for a significant price decline going hand in hand with product shortages other than collusive manipulation.
For any remaining doubters that COMEX silver and gold pricing is manipulated, the following CFTC data should be considered. This data is taken from a monthly report issued by the CFTC, called the Bank Participation Report. Here’s the link for the report -
These facts speak for themselves. Here are the facts. As of July 1, 2008, two U.S. banks were short 6,199 contracts of COMEX silver (30,995,000 ounces). As of August 5, 2008, two U.S. banks were short 33,805 contracts of COMEX silver (169,025,000 ounces), an increase of more than five-fold. This is the largest such position by U.S. banks I can find in the data, ever. Between July 14 and August 15th, the price of COMEX silver declined from a peak high of $19.55 (basis September) to a low of $12.22 for a decline of 38%.
For gold, 3 U.S. banks held a short position of 7,787 contracts (778,700 ounces) in July, and 3 U.S. banks held a short position of 86,398 contracts (8,639,800 ounces) in August, an eleven-fold increase and coinciding with a gold price decline of more than $150 per ounce. As was the case with silver, this is the largest short position ever by US banks in the data listed on the CFTC’s site. This was put on as one massive position just before the market collapsed in price.
This data suggests other questions should be answered by banking regulators, the CFTC, or by those analysts who still doubt this market is rigged. Is there a connection between 2 U.S. banks selling an additional 27,606 silver futures contracts (138 million ounces) in a month, followed shortly thereafter by a severe decline in the price of silver? That’s equal to 20% of annual world mine production or the entire COMEX warehouse stockpile, the second largest inventory in the world. How could the concentrated sale of such quantities in such a short time not influence the price?
Is there a connection between 3 U.S. banks selling an additional 78,611 gold futures contracts (7,861,100 ounces) in a month, followed shortly by a severe price decline in gold? That’s equal to 10% of annual world production and amounts to more than $7 billion worth of gold futures being sold by 3 U.S. banks in a month. How can this extraordinary concentrated trading size not be manipulative?
Because prices fell so sharply after the short sales were taken (with the appropriate dirty tricks as I have previously explained) holders of known physical silver in the world suffered a decline in value of more than $2.5 billion and long COMEX silver futures holders suffered a similar $2.5 billion decline in the value of their contracts. In gold, because the dollar value held is much greater than silver, investor losses were much greater, on the order of hundreds of billions of dollars on their physical holdings. Declines in the value of mining shares adds many billions more. Was this loss of value caused by the concentrated short selling of 2 or 3 U.S. banks?
What real legitimate business do 2 or 3 U.S. banks suddenly have for selling short such quantities of speculative instruments over a brief time period? Do we want banks to be engaging in this type of activity? If the manipulation was not successful, would U.S. taxpayers be called on to bail out yet another bank speculation gone bad?
Do the traders who lost money in the recent price collapse of silver have a reason to believe that their money is now in the pockets of these two or three U.S. banks? If so, do they have recourse?
The data in the Bank Participation report is clear and compelling. that it is hard to conclude anything but manipulation. It is beyond credulity to conclude other than two or three banks caused one of the most severe price collapses in precious metals history. The CFTC has a lot to answer for as the regulatory agency responsible for preventing this type of blatant manipulation.
The CFTC only seems to answer to Congress, FED and Treasury. And those guys certainly don't care about manipulation of barbarous relics
My undergraduate economics days are long behind me, but we were taught to always follow M3. I wonder what economics students are now taught to study?
I don't know, but it seems the economists and bankers keep pushing to have us only look at M1 or M2, mimicking the FED's abandonment of M3. Where do the huge bailouts such as Fannie, etc get coded to?.....M80? Watch as we bail out the Chinese govt of their hundreds of billions in Fannie/Freddie. That doesn't show up on M3.
Monetarists say it is the sharpness of the drop that is most disturbing, rather than the absolute level. Moves of this speed are extremely rare.
Isn't it odd that those same monetarists had nothing to say when the many hundreds of billions were being pumped into the system?
<< <i>The smoking Gun Major banks brought down the prices selling short?
The data in the Bank Participation report is clear and compelling. that it is hard to conclude anything but manipulation. It is beyond credulity to conclude other than two or three banks caused one of the most severe price collapses in precious metals history. The CFTC has a lot to answer for as the regulatory agency responsible for preventing this type of blatant manipulation. >>
Can anyone name these banks/financial institutions?
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Do the traders who lost money in the recent price collapse of silver have a reason to believe that their money is now in the pockets of these two or three U.S. banks? If so, do they have recourse?
Why do you think the traders lost money? The charts clearly showed, and I posted them in this thread, that silver was breaking down hard. Just because prices go down, does not mean traders lost money. Afterall, they probably shorted it to the extent that the charts looked bad and then the markets panicked. Manipulation at its finest.
BTW---Out of SLV with my buck. Will look for another entry point in the next 7-10 days.
Beijing swells dollar reserves through stealth Last Updated: 12:31am BST 26/08/2008
Have your say Read comments
Rule changes for commercial banks are acting as cover for exchange rate intervention, writes Ambrose Evans-Pritchard
China has resorted to stealth intervention in the currency markets to amass US dollars, using indirect means to hold down the yuan and ease the pain for its struggling exporters as the global slowdown engulfs the economy.
A study by HSBC's currency team in Asia has concluded that China's central bank is in effect forcing commercial banks to build up large dollar reserves, using them as arms-length proxies in a renewed campaign of exchange rate intervention.
advertisement Beijing has raised the reserve requirement for banks five times since March, quickening the pace with two half-point rises in late June.
This is having major spill-over effects into the currency markets because banks in China have been required over the last year to hold extra reserves in dollars rather than yuan. The latest moves have lifted the mandatory deposit from 15pc to 17.5pc of total lending since March.
"China has used the pretext of reserve requirement hikes to help slow yuan appreciation. We estimate that the PBOC [central bank] intervened by about $49.6bn in June," said Daniel Hui, the bank's Asia strategist.
Beijing has also slashed the amount of foreign debt banks operating in China can hold. The effect is to oblige the banks to become net buyers of dollars, halting the flow of foreign "hot money".
More on currencies More on economics More Ambrose Evans-Pritchard Given the sheer scale of China's foreign reserves - now $1,800bn (£970bn) - any shift in its exchange policy now ripples around the globe. The covert buying may help to explain at least part of the explosive dollar rebound over recent weeks.
There is little doubt that the key driver behind the wild currency ructions this summer has been the blizzard of dire data from Britain, Europe, Japan and Australasia. The mounting danger of a full-fledged recession across the club of rich OECD nations appears to have caught the markets off guard.
The closely watched Dollar Index reached an all-time low in March. It crept up gradually in the early summer before smashing through resistance in July.
The world's currency system is swivelling on its axis. Central banks in Asia and Europe have stopped raising rates, and some have begun to cut aggressively. The Federal Reserve is no longer nakedly exposed. Indeed, investors are already starting to look ahead to the next round of Fed tightening.
The 18pc slide in oil prices from a peak of $147 a barrel in July has added juice to the dollar rally. Russia and the Middle East petro-powers tend to recycle a high proportion of their vast earnings from oil into the eurozone, either by purchasing European bonds or expensive imports.
A Bundesbank study found 40 cents of every dollar spent by eurozone countries on oil imports comes back again one way or another. The figure for the US is just 10 cents. This trade bias has given oil a new character as a sort of anti-dollar driving the currency markets.
Even so, the China effect is a key ingredient in the dollar comeback. Beijing's Politburo is clearly disturbed by the sudden downward turn in the economy as export markets freeze, and surging wage inflation in the country's manufacturing hubs eats away at profit margins.
"They are now more worried about growth than overheating, and you are seeing that play out in the currency markets. There has been a remarkable change of view," said Simon Derrick, exchange rate chief at the Bank of New York Mellon.
China's PMI purchasing managers index fell below 50 for the first time in July, signalling an outright contraction in manufacturing output. Hong Kong's economy contracted 1.4pc in the second quarter. The Politburo has rushed through special rebates for textile producers now caught in a ferocious downturn.
Much of the clothing, footwear and furniture industry has been hit, leading to mass plant closures in the Pearl River Delta.
"During the first half of this year, about 67,000 small and medium-sized companies went bankrupt throughout China, leaving more than 20m people out of work," said the National Development and Reform Commission. "Bankruptcies of textile and spinning companies have numbered more than 10,000. Two thirds are on the brink of bankruptcy."
Last week's rebound on the Shanghai stock market stalled on fading hopes of a fiscal stimulus package. "It is unrealistic to expect the government to rescue the market," said Li Ka-shing, chairman of Hutchison. "Speculators should be very cautious now. The worst is not over in the global credit crisis."
Lehman Brothers warns of a risk that a housing slump and the 55pc equity crash since October could combine with a global downturn to set off a "vicious cycle". House prices have already fallen 18pc in Guangzhou and 9pc in Beijing. Prices are now falling in cities that make up over half China's population.
Comments
"t was similar in the United Kingdom. In 1918, the U.K. was the richest, most powerful country in the world. It had just won the First World War, et cetera. By 1939, it had exchange controls and this is in just one generation. And strict exchange controls. They in fact made it an act of treason for people to use anything except the pound sterling in settling debts. "
So to use gold was an act of treason!!
Credit from many banks is now disappearing rapidly.
It is quite possible that our money supply which includes credit from banks (M3 and M4) may now be shrinking instead of growing.
Tax revenues for many states are shrinking as well.
It may be a good thing to spread your money into as many banks as possible at under $20,000 per bank. Plus hold more cash than usual.
Of course, keep a good amount of gold coins and 90% junk silver coins.
<< <i>Bump to turn page >>
lemme' try GS
USD is up and so is Au (a wee bit at least right now)
And who decided that this one belongs in the PM forum?
Ren
Where did it go? Are people starting to hoard or do they ship the cash to overseas banks instead of just sending electrons, or something else?
And who decided that this one belongs in the PM forum?
Ren"
Maybe this thread has slowed a bit since it had become somewhat of a single source for predictions but with the new venue there are fractional topics that kind of spun off of the GS original thread and the result seems to be good. But, it kind of had to be done, we were screwin' with the boys on the other forum. People were reading our stuff instead of their stuff. You know, you have to keep the hype up and move dead stuff like the pressies and all the gimmick stuff and flipper bait to the uninformed. For some reason I guess this thread screwed up their game with us talking about buying PM and saving cash and reducing personal debt and them hypeing the rev' 07's and smooth presidential dollars and all the other "rare" stuff as future money makers. Our only problem here is that we're not trying to sell anything to our co-forumites; no "look at this" or "Grade this/opinion" or "do you like this toning" trolling threads. So, we got moved into our own house...not bad eh? It's much better like this.
But on the on the other hand and as noted by an earlier poster, GS's thread is the first time a thread became it's own forum and since it is top ten on the google search for metal, we're in good company. Not to worry, you will adapt.
NO MAS NO MAS NO MAS
How do you say that in Chinese?
Aug. 20 (Bloomberg) -- Fannie Mae and Freddie Mac's success in repaying $223 billion of bonds due by the end of the quarter may determine whether they can avoid a federal bailout.
Investors in Asia, the biggest foreign owner of Fannie's $3 trillion of bonds, are reducing their share of purchases, potentially increasing the need for Paulson to make good on his pledge to backstop the companies.
Fannie paid a record high yield in a $3.5 billion sale of three-year benchmark notes last week that drew less demand from Asia. Investors in the region bought 22 percent of the offering, almost half the demand of three months ago and about two-thirds of Asia's usual purchases.
“THE PONZIE SCHEME”
Fannie and Freddie issue new debt to pay off outstanding obligations as they mature and have a combined $1.7 trillion in outstanding unsecured notes and bonds. The companies can also sell securities to raise cash.
Fannie was created as part of Franklin D. Roosevelt's New Deal in the 1930s.
<< <i>"Has this thread slowed down since being dropped over here?
And who decided that this one belongs in the PM forum?
Ren"
Maybe this thread has slowed a bit since it had become somewhat of a single source for predictions but with the new venue there are fractional topics that kind of spun off of the GS original thread and the result seems to be good. But, it kind of had to be done, we were screwin' with the boys on the other forum. People were reading our stuff instead of their stuff. You know, you have to keep the hype up and move dead stuff like the pressies and all the gimmick stuff and flipper bait to the uninformed. For some reason I guess this thread screwed up their game with us talking about buying PM and saving cash and reducing personal debt and them hypeing the rev' 07's and smooth presidential dollars and all the other "rare" stuff as future money makers. Our only problem here is that we're not trying to sell anything to our co-forumites; no "look at this" or "Grade this/opinion" or "do you like this toning" trolling threads. So, we got moved into our own house...not bad eh? It's much better like this.
But on the on the other hand and as noted by an earlier poster, GS's thread is the first time a thread became it's own forum and since it is top ten on the google search for metal, we're in good company. Not to worry, you will adapt. >>
Thanks for the info. I didn't realize this thread was the reason for this forum...that is very cool.
I must be very naive or not absorbent but some "sellers" are posting so that they can peddle their stuff on "grade this/opinion" or "do you like this toning" threads(?) How underhandedly rude!
Ren
I believe this will not only occur on the Federal level but also at the State level as well. Big government in unsustainable. A possible reversal from socialism to privatization.
Box of 20
<< <i>"Any thoughts on why the financial press has not noted the lack of supply of physical silver and gold?
It would make for good ratings. "
/////////////////////////////////////////
Maybe because there is NO genuine "lack of supply."
Likely just a bunch of burried resellers not willing to lose money, yet. >>
Actually, there is indeed a shortage of physical silver. Industial stockpiles are virtually gone worldwide, even the US Mint has none to very little. Same with the Canadian Mint.
What we are seeing is a manipulation to shake out the lesser players and bring silver to the open market that has been hoarded away.
The squemish are following in lockstep and selling now under the false assumption that they are geting out while they can recoup as much as possible.
Not many around here are falling for it.
Saw a guy sell 7 100 ouncers last week and he took a loss on them but was happy it was a small loss. I bought them in minutes after he left the store.
Unless he really needed the money, I don't think he will be so happy in the future.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
I would probably agree that money in circulation (basically M1) is shrinking as banks hoard cash. But the M3 component is probably rising because a lot of this new FED induced money is off the books.
In one respect it looks like a liquidity and deflation to some, and massive inflation and a feeding frenzy to others. It's up to each one to decide what it is (deflation or inflation....or both or none of the above).
roadrunner
NO MAS NO MAS
Why is it that the Asians do not want to buy any more of this really good paper?
Lehman’s secret talks to sell 50% stake stall
By Henny Sender and Francesco Guerrera in New York
Published: August 20 2008 23:30 | Last updated: August 20 2008 23:30
Lehman Brothers, the beleaguered US investment bank, held secret talks to sell up to 50 per cent of its shares to South Korean or Chinese parties in the first week of August but failed to reach agreement with either.
The South Koreans and Chinese walked away after concluding that Lehman was asking too high a price, said New York-based people familiar with the potential buyers. Lehman declined to comment.
The price under discussion was 50 per cent above Lehman’s book value.
Perhaps I should have made my post clearer regarding my thoughts on the M3 and M4 money supply.
Actually, we are seeing a massive reduction in privately held real currency and credit whereas the amounts of credit held by the public sector including the Federal Reserve Bank of New York and the US Treasury is exploding.
This is such an awful cross current of inflationary as well as deflationary events that it is making it so difficult to "read" what is going on.
This is so different from the 1929-1940 Great Depression in that the US Treasury and the Federal Reserve were running huge surpluses and tightening credit as well as the member and non-member banks ability to extend credit was imploding at the onset of the Great Depression making the Great Depression a deflationary one.
What we have here is a total cross current winds. Government and the Federal Reserve Bank risking hyperflation while the Federal Reserve member banks and investment community is seeing their ability to extend credit implode.
Enough to give you whiplash in the neck to see what will ultimately happen. This is why it pays to be diversified as much as possible.
I also fear that a continuation of this kind of nonsense will eventually end up with some kind of United States currency controls, which will be a disaster.
Did Great Britain go down the same path by the late 1930's??
Oh great now the investment guys want to take over our banks so they can play their funny money games with our deposits.
THE STREET.COM
Aug.21st 2008
Starved for Capital, Lenders Call on Banks
Lenders who had relied on now-choked debt and equity markets for financing are increasingly looking to good, old-fashioned bank deposits as a cheaper and more reliable alternative.
"Deposits will be our principal source of funding going forward,"
However, many lenders will not be able to convince bank regulators to trust them with deposits, which in most cases are insured up to $100,000 by the FDIC. Indeed, that may be one of the reasons MatlinPatterson, a vulture investment firm that has reportedly been trying to acquire a bank for some time as an additional source of capital for struggling Santa Fe, N.M.-based Thornburg Mortgage, has not yet sealed the deal.
Given the recent bank failures, one might expect regulators to be more cautious about approving new buyers for banks. On the other hand, banks need capital, and regulators are interested in encouraging lenders to diversify beyond mortgages.
Box of 20
It's weird thinking that it would be good if silver got back to $17 so I could buy some on the open market instead of being locked out at $14. Now who in their right mind would want to buy silver at $17...strange times indeed.
<< <i>roadrunner:
Perhaps I should have made my post clearer regarding my thoughts on the M3 and M4 money supply.
Actually, we are seeing a massive reduction in privately held real currency and credit whereas the amounts of credit held by the public sector including the Federal Reserve Bank of New York and the US Treasury is exploding.
This is such an awful cross current of inflationary as well as deflationary events that it is making it so difficult to "read" what is going on.
This is so different from the 1929-1940 Great Depression in that the US Treasury and the Federal Reserve were running huge surpluses and tightening credit as well as the member and non-member banks ability to extend credit was imploding at the onset of the Great Depression making the Great Depression a deflationary one.
What we have here is a total cross current winds. Government and the Federal Reserve Bank risking hyperflation while the Federal Reserve member banks and investment community is seeing their ability to extend credit implode.
Enough to give you whiplash in the neck to see what will ultimately happen. This is why it pays to be diversified as much as possible.
I also fear that a continuation of this kind of nonsense will eventually end up with some kind of United States currency controls, which will be a disaster.
Did Great Britain go down the same path by the late 1930's?? >>
Tend to agree with your thoughts, though I don't know about Great Britain, worth some study though.
I don't like what I am seeing at all.
Inflation and depression at the same time will ruin the majority of US citizens over a short time period of even less than two years, but that sure looks like what is going on. Wholesale food prices up 10% alone in the last month, jobs and wages going down the tubes. Not good, not good. Even the illegal Mexicans are fleeing the country in droves and heading back to Mexico.
I just noticed the other day that the large bags of cat food that I was buying for $8.99 last month are now going for $13.99. I'm sure the rest of the food supply is going in the same direction. Wonder how long my full freezers will last me? Already stocked up a year's supply of dried beans, pasta and rice a few months ago, those prices have nearly doubled today. I think I'll be enlarging my fall garden.
Worst of all, it seems quite manipulated. I think there is a special place in the afterlife for those behind all this.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Some things never change....and they didn't even need a FED to drive their monetary system to ruin.
roadrunner
<< <i>The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance..... --Cicero, 55 BC
Some things never change....and they didn't even need a FED to drive their monetary system to ruin.
WOW what a quote.
Chance favors the prepared mind.
<< <i>The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance..... --Cicero, 55 BC >>
Of course he was murdered as an enemy of the state shorthly thereafter. Then came the reign of the Ceasars and the final ruin of Rome. They had hundreds of years to rectify it before the final fall, we can do that in the next 10 or less.
Just suppose the Fed announced that we were officially bankuipt and there would be no more Government services, just suppose that happend in the next several months. It isn't that far fetched. They'd scoop up all the politicians and give them protection from us, the evil citizens and all Hell would break loose.
Actually, Civil War would break loose. I've often wondered just how close to that we could be. No apocalyptic visions here, just some thinking slightly outside the box.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
<< <i>The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance..... --Cicero, 55 BC >>
Of course he was murdered as an enemy of the state shorthly thereafter. Then came the reign of the Ceasars and the final ruin of Rome. They had hundreds of years to rectify it before the final fall, we can do that in the next 10 or less.
Just suppose the Fed announced that we were officially bankuipt and there would be no more Government services, just suppose that happend in the next several months. It isn't that far fetched. They'd scoop up all the politicians and give them protection from us, the evil citizens and all Hell would break loose.
Actually, Civil War would break loose. I've often wondered just how close to that we could be. No apocalyptic visions here, just some thinking slightly outside the box. >>
They would still have to keep ONE of the government services happy...... the military! Otherwise they would have no place to go with absolutely no protection!
Columbian Bank
heck, i just went to the gas station to fill up my rig, (and get some more chew and a 12 pak, a daily thing with the chew and 12 pak) thinkin' that a few sawbucks ($10 for you upitty folks here) and a couple a chickens would be "enuff" to hold me over' till i got me my check from the guvmint, dang! my third cousin (actually my sisters boyfriend..we're kinda close here) said my kredit was no good no more.
so i walked home (had to get the Pabst, even shared a can with the sheriff who drove by, ya know.... that do unto others stuff?) and dug up momma's grave and yanked what few teeth she had left (thinkin' about the golden rule, still) and took the gold back to settle things up.
she laughed at me like i was some kinda gold tycoon.
i need to call my cousin Ben and see if i can qwalify for this beggin' bowl contraption.
if there is any thruth to it, it's gonna get a lot worse.......
the only thing the FED can do right now is keep the system awash with cash, talk the big game, and pray
"Despite the Fed’s best efforts, the broadest measure of money supply in the U.S., including outstanding credit — known as M3 — has fallen off a cliff. July saw the biggest one-month drop in M3 since the government started keeping track in 1959."
By Ambrose Evans-Pritchard
Last Updated: 3:04pm BST 19/08/2008
The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months.
Data compiled by Lombard Street Research shows that the M3 ''broad money" aggregates fell by almost $50bn (£26.8bn) in July, the biggest one-month fall since modern records began in 1959.
"Monthly data for July show that the broad money growth has almost collapsed," said Gabriel Stein, the group's leading monetary economist.
advertisementOn a three-month basis, the M3 growth rate has fallen from almost 19pc earlier this year to just 2.1pc (annualised) for the period from May to July. This is below the rate of inflation, implying a shrinkage in real terms.
The growth in bank loans has turned negative to a halt since March.
More by Ambrose Evans-Pritchard
More on banking
"It's obviously worrying. People either can't borrow, or don't want to borrow even if they can," said Mr Stein.
Monetarists say it is the sharpness of the drop that is most disturbing, rather than the absolute level. Moves of this speed are extremely rare.
The overall debt burden in the US economy is currently at record levels, raising concerns that a recession - if it occurs - could set off a sharp downward spiral.
Household debt is now 131pc of disposable income, compared with 93pc at the top the dotcom bubble, 79pc in the property boom of the late-1980s, and 62pc at the end of the 1970s.
The M3 data measures both cash and a wide range of bank instruments. It tends to provide an early warning signal of major shifts in the economy, although the US Federal Reserve took the controversial decision to stop reporting the statistics in 2005 on the grounds that the modern financial system had rendered the data obsolete.
Monetarists insist that shifts in M3 are a lead indicator of asset prices moves, typically six months or so ahead. If so, the latest collapse points to a grim autumn for Wall Street and for the American property market. As a rule of thumb, the data gives a one-year advance signal on economic growth, and a two-year signal on future inflation.
"There are always short-term blips but over the long run M3 has repeatedly shown itself good leading indicator," said Mr Stein.
He cautioned that the three-month shifts in M3 can be highly volatile.
M3 surged after the onset of the credit crunch, but this was chiefly a distortion caused by the near total paralysis in parts of the American commercial paper market. Borrowers were forced to take out bank loans instead. The commercial paper market has yet to recover.
The University of Michigan's index of consumer sentiment has fallen to the lowest level since the 1980s recession.
The US economy is without doubt facing severe headwinds going into the autumn.
Richard Fisher, the ultra-hawkish head of the Dallas Federal Reserve, warned over the weekend that growth would be near "zero" in the second half of the year.
By Ambrose Evans-Pritchard
Last Updated: 3:04pm BST 19/08/2008
The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months.
Data compiled by Lombard Street Research shows that the M3 ''broad money" aggregates fell by almost $50bn (£26.8bn) in July, the biggest one-month fall since modern records began in 1959.
"Monthly data for July show that the broad money growth has almost collapsed," said Gabriel Stein, the group's leading monetary economist.
advertisementOn a three-month basis, the M3 growth rate has fallen from almost 19pc earlier this year to just 2.1pc (annualised) for the period from May to July. This is below the rate of inflation, implying a shrinkage in real terms.
The growth in bank loans has turned negative to a halt since March.
More by Ambrose Evans-Pritchard
More on banking
"It's obviously worrying. People either can't borrow, or don't want to borrow even if they can," said Mr Stein.
Monetarists say it is the sharpness of the drop that is most disturbing, rather than the absolute level. Moves of this speed are extremely rare.
The overall debt burden in the US economy is currently at record levels, raising concerns that a recession - if it occurs - could set off a sharp downward spiral.
Household debt is now 131pc of disposable income, compared with 93pc at the top the dotcom bubble, 79pc in the property boom of the late-1980s, and 62pc at the end of the 1970s.
The M3 data measures both cash and a wide range of bank instruments. It tends to provide an early warning signal of major shifts in the economy, although the US Federal Reserve took the controversial decision to stop reporting the statistics in 2005 on the grounds that the modern financial system had rendered the data obsolete.
Monetarists insist that shifts in M3 are a lead indicator of asset prices moves, typically six months or so ahead. If so, the latest collapse points to a grim autumn for Wall Street and for the American property market. As a rule of thumb, the data gives a one-year advance signal on economic growth, and a two-year signal on future inflation.
"There are always short-term blips but over the long run M3 has repeatedly shown itself good leading indicator," said Mr Stein.
He cautioned that the three-month shifts in M3 can be highly volatile.
M3 surged after the onset of the credit crunch, but this was chiefly a distortion caused by the near total paralysis in parts of the American commercial paper market. Borrowers were forced to take out bank loans instead. The commercial paper market has yet to recover.
The University of Michigan's index of consumer sentiment has fallen to the lowest level since the 1980s recession.
The US economy is without doubt facing severe headwinds going into the autumn.
Richard Fisher, the ultra-hawkish head of the Dallas Federal Reserve, warned over the weekend that growth would be near "zero" in the second half of the year.
<< <i>let me look for that graph i saw about a week ago where the M3 money supply is dropping like a rock over the last 3 weeks.......
if there is any thruth to it, it's gonna get a lot worse.......
the only thing the FED can do right now is keep the system awash with cash, talk the big game, and pray >>
is this it?
It's becoming pretty clear that the cartel smack down in gold was due several major things all coming together at once:
Fannie and Freddie on verge of bankruptcy and to be bailed out/nationalized
Georgia/Russia confrontation building for the past 30+ days
Lehman or some other large bank getting very close to failure
Elections getting too close for comfort with any additional bad news
And to coordinate gold's takedown, 3 major banks increased their gold shorts by a factor of 5X over a one month period.
roadrunner
it has fallen HUGE, much more than a couple percent,
the article states annualized 2.1% is far from the 13-15% annualized for the last few years,......
the constriction starts........watch out.......
this FED does not have a handle on ANYTHING
when lease rates are minus 2-3%, how could those guys not make huge money
My undergraduate economics days are long behind me, but we were taught to always follow M3. I wonder what economics students are now taught to study?
<< <i>Warren Buffet Says The “Game Is Over” for Fannie and Freddie >>
Must be why Freddie and Fanny are up right now.
The Smoking Gun
By: Theodore Butler
For years, the data contained in the weekly Commitment of Traders Report (COT), issued by the CFTC, have indicated that several large COMEX traders have manipulated the price of silver and gold. For an equal number of years, the CFTC has reluctantly responded to public pressure over this issue with blanket denials of any wrongdoing. Many analysts have agreed with the CFTC’s position, conjuring up various ways to explain why a massive short position held by a handful of traders is not manipulative.
The recent widespread shortage of silver for retail purchase coupled with a price collapse appears to have shaken these analysts’ confidence that the COMEX silver market is operating ‘fair and square.’ Well it should, since there is no rational explanation for a significant price decline going hand in hand with product shortages other than collusive manipulation.
For any remaining doubters that COMEX silver and gold pricing is manipulated, the following CFTC data should be considered. This data is taken from a monthly report issued by the CFTC, called the Bank Participation Report. Here’s the link for the report -
http://www.cftc.gov/marketreports/bankparticipation/index.htm The relevant data is found in the July and August futures sections. I will condense it.
These facts speak for themselves. Here are the facts. As of July 1, 2008, two U.S. banks were short 6,199 contracts of COMEX silver (30,995,000 ounces). As of August 5, 2008, two U.S. banks were short 33,805 contracts of COMEX silver (169,025,000 ounces), an increase of more than five-fold. This is the largest such position by U.S. banks I can find in the data, ever. Between July 14 and August 15th, the price of COMEX silver declined from a peak high of $19.55 (basis September) to a low of $12.22 for a decline of 38%.
For gold, 3 U.S. banks held a short position of 7,787 contracts (778,700 ounces) in July, and 3 U.S. banks held a short position of 86,398 contracts (8,639,800 ounces) in August, an eleven-fold increase and coinciding with a gold price decline of more than $150 per ounce. As was the case with silver, this is the largest short position ever by US banks in the data listed on the CFTC’s site. This was put on as one massive position just before the market collapsed in price.
This data suggests other questions should be answered by banking regulators, the CFTC, or by those analysts who still doubt this market is rigged. Is there a connection between 2 U.S. banks selling an additional 27,606 silver futures contracts (138 million ounces) in a month, followed shortly thereafter by a severe decline in the price of silver? That’s equal to 20% of annual world mine production or the entire COMEX warehouse stockpile, the second largest inventory in the world. How could the concentrated sale of such quantities in such a short time not influence the price?
Is there a connection between 3 U.S. banks selling an additional 78,611 gold futures contracts (7,861,100 ounces) in a month, followed shortly by a severe price decline in gold? That’s equal to 10% of annual world production and amounts to more than $7 billion worth of gold futures being sold by 3 U.S. banks in a month. How can this extraordinary concentrated trading size not be manipulative?
Because prices fell so sharply after the short sales were taken (with the appropriate dirty tricks as I have previously explained) holders of known physical silver in the world suffered a decline in value of more than $2.5 billion and long COMEX silver futures holders suffered a similar $2.5 billion decline in the value of their contracts. In gold, because the dollar value held is much greater than silver, investor losses were much greater, on the order of hundreds of billions of dollars on their physical holdings. Declines in the value of mining shares adds many billions more. Was this loss of value caused by the concentrated short selling of 2 or 3 U.S. banks?
What real legitimate business do 2 or 3 U.S. banks suddenly have for selling short such quantities of speculative instruments over a brief time period? Do we want banks to be engaging in this type of activity? If the manipulation was not successful, would U.S. taxpayers be called on to bail out yet another bank speculation gone bad?
Do the traders who lost money in the recent price collapse of silver have a reason to believe that their money is now in the pockets of these two or three U.S. banks? If so, do they have recourse?
The data in the Bank Participation report is clear and compelling. that it is hard to conclude anything but manipulation. It is beyond credulity to conclude other than two or three banks caused one of the most severe price collapses in precious metals history. The CFTC has a lot to answer for as the regulatory agency responsible for preventing this type of blatant manipulation.
My undergraduate economics days are long behind me, but we were taught to always follow M3. I wonder what economics students are now taught to study?
I don't know, but it seems the economists and bankers keep pushing to have us only look at M1 or M2, mimicking the FED's abandonment of M3. Where do the huge bailouts such as Fannie, etc get coded to?.....M80? Watch as we bail out the Chinese govt of their hundreds of billions in Fannie/Freddie. That doesn't show up on M3.
Monetarists say it is the sharpness of the drop that is most disturbing, rather than the absolute level. Moves of this speed are extremely rare.
Isn't it odd that those same monetarists had nothing to say when the many hundreds of billions were being pumped into the system?
roadrunner
<< <i>The smoking Gun Major banks brought down the prices selling short?
The data in the Bank Participation report is clear and compelling. that it is hard to conclude anything but manipulation. It is beyond credulity to conclude other than two or three banks caused one of the most severe price collapses in precious metals history. The CFTC has a lot to answer for as the regulatory agency responsible for preventing this type of blatant manipulation. >>
Can anyone name these banks/financial institutions?
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Verrrrrrry interesting but he should have named the banks. If you're slinging doo, you ought to at least be aiming at something.
carry on
Will they? What would a 1% FFR do to PM's?
Oreville, great advise on spreading out, kinda scary.
Thinking of converting Roth IRA's into gold and silver, good move?
Scott
Why do you think the traders lost money? The charts clearly showed, and I posted them in this thread, that silver was breaking down hard. Just because prices go down, does not mean traders lost money. Afterall, they probably shorted it to the extent that the charts looked bad and then the markets panicked. Manipulation at its finest.
BTW---Out of SLV with my buck. Will look for another entry point in the next 7-10 days.
Knowledge is the enemy of fear
Last Updated: 12:31am BST 26/08/2008
Have your say Read comments
Rule changes for commercial banks are acting as cover for exchange rate intervention, writes Ambrose Evans-Pritchard
China has resorted to stealth intervention in the currency markets to amass US dollars, using indirect means to hold down the yuan and ease the pain for its struggling exporters as the global slowdown engulfs the economy.
A study by HSBC's currency team in Asia has concluded that China's central bank is in effect forcing commercial banks to build up large dollar reserves, using them as arms-length proxies in a renewed campaign of exchange rate intervention.
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Beijing has raised the reserve requirement for banks five times since March, quickening the pace with two half-point rises in late June.
This is having major spill-over effects into the currency markets because banks in China have been required over the last year to hold extra reserves in dollars rather than yuan. The latest moves have lifted the mandatory deposit from 15pc to 17.5pc of total lending since March.
"China has used the pretext of reserve requirement hikes to help slow yuan appreciation. We estimate that the PBOC [central bank] intervened by about $49.6bn in June," said Daniel Hui, the bank's Asia strategist.
Beijing has also slashed the amount of foreign debt banks operating in China can hold. The effect is to oblige the banks to become net buyers of dollars, halting the flow of foreign "hot money".
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Given the sheer scale of China's foreign reserves - now $1,800bn (£970bn) - any shift in its exchange policy now ripples around the globe. The covert buying may help to explain at least part of the explosive dollar rebound over recent weeks.
There is little doubt that the key driver behind the wild currency ructions this summer has been the blizzard of dire data from Britain, Europe, Japan and Australasia. The mounting danger of a full-fledged recession across the club of rich OECD nations appears to have caught the markets off guard.
The closely watched Dollar Index reached an all-time low in March. It crept up gradually in the early summer before smashing through resistance in July.
The world's currency system is swivelling on its axis. Central banks in Asia and Europe have stopped raising rates, and some have begun to cut aggressively. The Federal Reserve is no longer nakedly exposed. Indeed, investors are already starting to look ahead to the next round of Fed tightening.
The 18pc slide in oil prices from a peak of $147 a barrel in July has added juice to the dollar rally. Russia and the Middle East petro-powers tend to recycle a high proportion of their vast earnings from oil into the eurozone, either by purchasing European bonds or expensive imports.
A Bundesbank study found 40 cents of every dollar spent by eurozone countries on oil imports comes back again one way or another. The figure for the US is just 10 cents. This trade bias has given oil a new character as a sort of anti-dollar driving the currency markets.
Even so, the China effect is a key ingredient in the dollar comeback. Beijing's Politburo is clearly disturbed by the sudden downward turn in the economy as export markets freeze, and surging wage inflation in the country's manufacturing hubs eats away at profit margins.
"They are now more worried about growth than overheating, and you are seeing that play out in the currency markets. There has been a remarkable change of view," said Simon Derrick, exchange rate chief at the Bank of New York Mellon.
China's PMI purchasing managers index fell below 50 for the first time in July, signalling an outright contraction in manufacturing output. Hong Kong's economy contracted 1.4pc in the second quarter. The Politburo has rushed through special rebates for textile producers now caught in a ferocious downturn.
Much of the clothing, footwear and furniture industry has been hit, leading to mass plant closures in the Pearl River Delta.
"During the first half of this year, about 67,000 small and medium-sized companies went bankrupt throughout China, leaving more than 20m people out of work," said the National Development and Reform Commission. "Bankruptcies of textile and spinning companies have numbered more than 10,000. Two thirds are on the brink of bankruptcy."
Last week's rebound on the Shanghai stock market stalled on fading hopes of a fiscal stimulus package. "It is unrealistic to expect the government to rescue the market," said Li Ka-shing, chairman of Hutchison. "Speculators should be very cautious now. The worst is not over in the global credit crisis."
Lehman Brothers warns of a risk that a housing slump and the 55pc equity crash since October could combine with a global downturn to set off a "vicious cycle". House prices have already fallen 18pc in Guangzhou and 9pc in Beijing. Prices are now falling in cities that make up over half China's population.
Another Piece of the puzzle?
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I knew it would happen.
If Ted Butler ever fails to complain about price manipulation in his silver market, we'll know aliens have taken over his body.