LONDON, Jan 16 (Reuters) - The world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its bullion holdings rose 1 percent to a record 7,143.27 tonnes on January 14.
The New York-based trust, which issues securities backed by physical stocks of silver, has increased its silver holdings by 2,300 tonnes or 48 percent year-on-year, according to data published on its website. (http://us.ishares.com/product_info/fund/overview/SLV.htm).
Buying of silver bullion by ETFs has formed a major tranche of demand in recent years, helping to offset falling consumption in industry and from the photographic sector.
Investors have taken a greater interest in physical precious metals in recent months as volatility in other assets has led to increased risk aversion.
"We see this as driven by the safe haven story," said Standard Chartered analyst Daniel Smith. "We remain quite bullish on gold, and that is helping lift interest in silver. If you look at the gold-silver ratio, silver looks quite cheap."
Silver's appeal as a currency hedge and an alternative to gold is outweighing falling demand in other areas, he said.
"From an industrial perspective, demand is quite weak but I don't think people are focusing on that as much as where the dollar is likely to go, and where gold is likely to go," he said.
Spot silver was quoted at $10.75/10.83 an ounce at 1045 GMT. Standard Chartered sees silver prices averaging $12 an ounce in the fourth quarter.
I have a very strict gun control policy: if there's a gun around, I want to be in control of it - Clint Eastwood
The Obama stimulus is just more of the same. Amazing. Very little that is going to do anything in the long run.
Pouring it all into infrastructure would have done a bit of good...but there isnt much in the way of that. Just more injections and pathetic give backs to appease the masses.
I guess this is what happens when you have a college frat boy from Yale in power for 8 years followed by a community organizer from Harvard, who, if he did study economics, was immersed in JMK.
I find interesting how Keynesian economics, relatively new, is assumed to be the end all be all...and infallible.
I am not a type that thinks we need to go back to a gold standard per say, but the idea that unlimited borrowing and spending will always work really baffles my mind. Even more so is the fact that people that are very very intelligent DONT find it baffling.
OK, men. I want you brave little indians to join me in displacing the naysayers. We'll be riding for about 4 days after which, I expect that the little buffalos will join us to provide military support. We will proceed en mass until we have contact.
Stewart Thomson supports the theory that in order to start an economic recovery, the govt has to get a handle on gold ownership prior to turning up the speed of the printing presses to hyper-drive.
I guess they SCOOPED up your money and it is waiting for you in VALHALLA? I don't know! This is really investing for the long term.
Jan. 16 (Bloomberg) -- Arthur Nadel, a hedge-fund manager in Sarasota, Florida, has disappeared and clients are concerned they may have lost hundreds of millions of dollars, according to law enforcement officials.
Nadel, 76, is president of Scoop Management Inc., which oversees funds including Valhalla Investment Partners LP. He was reported missing two days ago after he called his stepson, Geoff Quisenberry, and told him to go to his house where he had left a note, Lieutenant Chuck Lesaltato of the Sarasota County Sheriff’s Office said today in a telephone interview.
Nadel’s wife, Peg, and Quisenberry, were “concerned about his welfare,” Lesaltato said. Nadel had sounded “distraught,” Lesaltato said, citing the note.
Scoop may have managed as much as $350 million, the Herald- Tribune in Sarasota reported today on its Web site. The newspaper said Nadel was a “prominent player in Sarasota social and philanthropic circles.”
"turning up the speed of the printing presses to hyper-drive. "
Hey, I thought we were going green...why waste all that paper and electricity and ink and administrative time? Just do what Zimbabwe is going an print larger bills like 10,000 and 1,000,000 and so. Big Money!
EXCELLENT BUFFALO STAMPEDE AND THEY BROUGHT THE BABY BUFFALOS!!! We should have these naysayers on the ropes pretty soon.
Stewart Thomson supports the theory that in order to start an economic recovery, the govt has to get a handle on gold ownership prior to turning up the speed of the printing presses to hyper-drive.
roadrunner >>
Good article........ I think all of us need to be prepared to be surprised. Who really knows what will happen....
Stewart Thomson supports the theory that in order to start an economic recovery, the govt has to get a handle on gold ownership prior to turning up the speed of the printing presses to hyper-drive.
roadrunner >>
Getting control has been in the works for a long time;
The document, which is marked “Confidential”, is from the papers of William McChesney Martin, Jr., and this collection is held by the Missouri Historical Society. A scanned image of the original document is posted by the Federal Reserve Bank of St. Louis at the following link: http://fraser.stlouisfed.org/docs/historical/martin/23_06_19610405.pdf
Martin was the longest-serving chairman of the Board of Governors of the Federal Reserve System, and worked there under five U.S. presidents from April 1951 to January 1970. It was during his tenure that the dollar devolved from “as good as gold” to a perennially inflated fiat currency backed by nothing but government promises, which makes one ponder what could have happened to the dollar had Martin been an advocate of sound money dedicated to preserving the dollar’s link to gold. Instead, during his tenure the US Gold Reserve declined by nearly one-half from 633.2 million ounces to 339.5 million ounces, while M3, the total quantity of dollar currency, soared more than three-fold from $190.0 billion to $616.1 billion.
The author of this Federal Reserve document is not clear, but was obviously written by a senior staffer who was not only familiar with the Fed’s operation and that of the Treasury, but also well attuned to their policies and procedures. It appears to have been written by someone in the Federal Reserve Bank of New York, given the obvious familiarity and extensive knowledge of the writer with that branch’s trading desk that executes trades for the Federal Reserve and the Treasury, which explains why this document is so interesting and important.
It was written in April 1961, and the run on the dollar had already begun. It was becoming increasingly clear that the U.S. government was not managing the dollar according to the rules and the intended goals of the 1944 Bretton Woods Agreement. The dollar was being debased under Martin’s chairmanship, and as a consequence, gold had begun to flow out of the U.S. Treasury as dollar holders realized that one ounce of gold was worth more than $35, the fixed exchange rate then in place. By April 1961, the US Gold Reserve had already declined significantly from the beginning of Martin’s tenure to 498.1 million ounces.
So the warning signs for the dollar were already apparent, not only to dollar holders, but also to the U.S. government. As this document makes clear, the government realized that the monetary course it was pursuing could not be sustained. Consequently, policy makers realized that something would need to be done, and this “Confidential” Federal Reserve memo was obviously prepared to analyze one of the alternatives available to policy makers.
The document does not explain the different alternatives, but there were three. It is the same three alternatives all governments have when deviating from the rules of the gold standard.
First, the government could follow the aims intended from Bretton Woods and raise interest rates to reduce new loan creation and the quantity of dollars. This action would dampen economic activity, and reverse the outflow of gold, thereby enabling the gold standard to be maintained.
Second, it could devalue the dollar as Franklin Roosevelt had done. In this way, the remaining weight of gold in the US Gold Reserve would provide sufficient backing to the dollar, which would stop the redemption of dollars for gold.
Third, it could try experimenting with a course not taken before – government intervention to force the market to bend to government will. This alternative was the worst of the three, and unfortunately, it is the one chosen by the government, which brings me back to this newly discovered confidential document of the Federal Reserve.
In short, it lays out what the Treasury and Federal Reserve needed to do in order to begin intervening in the foreign exchange markets, but there is even more. This document plainly shows what happens when government operates behind closed doors. It also makes clear the motivations of the operators of dollar policy long described by GATA <www.gata.org> and its supporters, namely, that the government would pursue intervention rather than a policy of free markets unfettered by government activity. The run to redeem dollars for gold had put the government at a crossroads, forcing it to make a decision about the future course of dollar policy. This paper describes what the government would need to do by choosing the interventionist alternative.
This document provides primary, original source supporting evidence that GATA has been right all along.
I have long hoped that a “Confidential” document like this one would eventually emerge. There are no doubt countless more like it, as evidenced by the Federal Reserve’s and the Treasury’s refusal to provide all the documents requested by GATA under its recent Freedom of Information Act request. Maybe those documents will eventually see the light of day too.
In the meantime, this newly discovered document is all that we have. And a close reading of if is warranted because it is so revealing.
To analyze this document, I have copied it below in its entirety in italics, with my occasional comments embedded in the text in order to highlight key points.
Gold fireworks over in London this morning as the metal rocketed from $823 to $857 in minutes apparently on the heels of the bad news emanating from the Royal Bank of Scotland. They continue to be in deep water despite tens of billions being tossed at the problem. HSBC, Barclays and other banks also took some hits.
Gold's move was striking in spite of a continuing move by the dollar which no doubt will continue during Obama day (Jan 20th). I suspect the PPT, if ready to go, will try to take gold back down today. But without a new Treasury Sectretary in place yet, who will give the PPT their official marching orders?
The open in NY hasn't turned the wave. A quick correction back to $849 and then a pop back to $860. A close today over $850 would be a strong sign.
Interest rate swaps have allowed JPM (ie our central banker) to distort interest rates for years. But for how much longer? When these deleverage down the road it will make the CDS issue seem small in comparision.
<< <i>Gold fireworks over in London this morning as the metal rocketed from $823 to $857 in minutes apparently on the heels of the bad news emanating from the Royal Bank of Scotland. They continue to be in deep water despite tens of billions being tossed at the problem. HSBC, Barclays and other banks also took some hits.
Gold's move was striking in spite of a continuing move by the dollar which no doubt will continue during Obama day (Jan 20th). I suspect the PPT, if ready to go, will try to take gold back down today. But without a new Treasury Sectretary in place yet, who will give the PPT their official marching orders?
The open in NY hasn't turned the wave. A quick correction back to $849 and then a pop back to $860. A close today over $850 would be a strong sign.
roadrunner >>
More likely the move is related to the fear of collapse of the Euro. Spain and Greece have had their sovereign credit ratings cut. The viability of the Euro has come under more scrutiny in the past week and gold is shining as a perceived alternative currency.
ttown has posted his share as well! , yet your avatar freaks me out
i wonder if more and more about a bank closure day and not so much Au confiscation but a fractional gold backed currency. what other way out is there of this mess?
Standard & Poor's Ratings Services said it had lowered its long-term sovereign credit ratings on the Republic of Portugal to 'A+' from 'AA-', as it believes the government's structural reform measures relating to the economy and public finances have proven insufficient to bring about convergence with the 'AA' peer group. At the same time, we lowered the short-term ratings on the Republic to 'A-1' from 'A-1+'. The outlook is stable. With these actions, Standard & Poor's removed the ratings from Creditatch with negative implications, where they were placed on Jan. 13, 2009. "In our opinion, Portugal faces increasingly difficult challenges as it tries to boost competitiveness and lift persistently low growth," Standard & Poor's credit analyst Trevor Cullinan said. "This, together with a heavy general government debt burden, leads us to believe that Portugal is unlikely to make the necessary structural improvements to remain in the 'AA' peer group." During an unusually benign global economic environment, the current administration managed to reduce the general government deficit from a peak of 6.1% of GDP in 2005 to 2.2% of GDP in 2008. The failure over the same period to bring down net general government debt-to-GDP is largely due to the denominator effect--that is, the weakness of Portugal's underlying economy. Moreover, we believe that efforts to raise potential growth, including measures to improve education and innovation and redress the loss in export market share over recent years, are yielding only limited results. As a result, we do not expect any substantial improvement in productivity or indeed the long-term potential growth rate of 1.0%-1.5% over the medium term.
Standard & Poor's Ratings Services said it had lowered its long-term sovereign credit ratings on the Republic of Portugal to 'A+' from 'AA-', as it believes the government's structural reform measures relating to the economy and public finances have proven insufficient to bring about convergence with the 'AA' peer group.
The irony is inescapable that with the foxes guarding the hen houses why would anyone believe anything published by any of the so-called "rating" agencies? What major western nations are technically not already insolvent as most of their large banks are? Grading on a curve such that a deserved rating of C,D,or F becomes an A, A+, AA, AAA, etc is a hard swallow. Maybe Portugal should take a few lessons from larger nations in how to prop up GDP values with gimmicks and to hide detrimental "assets" far off the balance sheets.
The linked charts show some interesting trends that would tend to support a managed gold market. This link supplies a trend of trading patterns over the past several years as well as the past 20 years that is hard to dispute. The only thing up for discussion is what causes the pattern, manipulation or a growing shift of Asian buying and Western selling.
The pattern is that over the past 24 yrs, one could have averaged 1% per week by buying gold at the London PM fix (3 PM) just after the US markets open up and selling it at the London AM fix (10:30 AM) just as the Asian markets close. That works out to be a gain of nearly 25,000,000% over the past 24 years. If one did just the opposite, you would have lost the better part of a % per week in that time. If one looks at the last 2 years from early 2007, the gain is a staggering 1.78% per week.
There are only 2 real choices for this pattern occuring. One is a constant amount of Western gold selling and Asian buying over many years. The other option is manipulation of prices as the US markets open each day...or possibly some combination of the two. My guess goes for the combination, but with a preponderance of manipulation since managed gold prices support desired dollar policy.
I suspect the next move up will be so fast it will not give time for those that are not invested to invest......An overnight revaluation? A dollar devaluation?
<< <i>Pouring it all into infrastructure would have done a bit of good...but there isnt much in the way of that. Just more injections and pathetic give backs to appease the masses. >>
Obama has spoken about funding infrastructure on a wide scale, including upgrading the power grid to improve efficiency and to accommodate alternative energy. A good deal of R&D will also be needed for those purposes.
It will also be interesting to see if the government proposes any new medical R&D funding programs that will make funding available to the private sector.
Will that sort of spending revive the economy? I don't know but at least we might get some tangible benefit from the effort.
<< <i> the idea that unlimited borrowing and spending will always work really baffles my mind. Even more so is the fact that people that are very very intelligent DONT find it baffling >>
If there is a compelling case that can be made for sparking an economic turn-around without government spending I would like to hear it. So far all I have heard from the right wing is nonsense about eliminating capital gains taxes (investors are not concerned about taxes on capital gains right now--the VCs can't raise money, start-ups can't get funding, and public companies cannot raise debt or equity capital because the only thing that investors can see is losses) or letting the “free market” work. I suppose the “free market” (if such a thing existed) might get us out of an economic death spiral -- eventually. But there is something dreadfully unappealing about the prospect of living under a bridge and eating mulligan stew while waiting for the “invisible hand” of the free market to move things along.
“But there is something dreadfully unappealing about the prospect of living under a bridge and eating mulligan stew while waiting for the “invisible hand” of the free market to move things along.”
CalGold,
The problem with GOVERNMENT FIXS is that they are never ending, never repealed, and by there very nature can NOT be regulated.
The most socialist cites and states in our country show us exactly where we are headed, and there are so many folks under the bridge already in those cites there is no more room!
Poverty in the Cities. City, State, % of People Below the Poverty Level 1. Detroit , MI 32.5% 2. Buffalo , NY 29.9% 3. Cincinnati , OH 27.8% 4. Cleveland , OH 27.0% 5. Miami , FL 26.9% 5. St. Louis , MO 26.8% 7. El Paso , TX 26.4% 8. Milwaukee , WI 26.2% 9. Philadelphia , PA 25.1% 10. Newark , NJ 24.2%
What do the top ten cities (over 250,000) with the highest poverty rate all have in common?
Detroit, MI (1st on the poverty rate list) hasn't elected a Republican mayor since 1961;
Buffalo, NY (2nd) hasn't elected one since 1954;
Cincinnati , OH (3rd)...since 1984;
Cleveland , OH (4th)...since 1989;
Miami , FL (5th) has never had a Republican mayor;
St. Louis , MO (6th)....since 1949;
El Paso , TX (7th) has never had a Republican mayor;
I think the trading you see in gold has more to do with the timing of the close of the session. Why do they close in the middle of the equity trading day? Stocks can and usually do have big moves at the end of the day. This surely has an impact on sentiment and the price of gold. I am also not surprised that the gain is outsized during the last 2 years. As is the case with anything in an uptrend, you are more likely to have gap higher opens than you are to have gap lower opens.
I think if gold were to close at the same time as equity markets and/or currency markets this would be a moot point.
.....An overnight revaluation? A dollar devaluation?
Wow... Do any of you think this will actually happen?
It sure would fit in with BO's "everyone is going to have to do their part" promise. And, wealthy folks would certainly be "doing their part" more than people with fewer assets (another popular theme).
In a currency devaluation competition (assuming there will be one), is this the next step after all currencies' interest rates hit zero?
For now, I dont see anything extraordinary in the movement of treasuries. Looks like just a gardern variety profit-taking correction. Not until global rates are near or under 1% will the bubble reach critical mass.
The economy and its money are not only based on the full faith and credit of the US government but the basis of this faith is its ability to tax to repay its debts. If the perception begins to grow that there is no longer enough blood in the turnip then these instruments can re- verse sharply.
While the optimism displayed by the new administration is helpful, the fact remains that the perception is already wavering and mountains of new debt can push it over the edge. Rhetoric might suffice for the short term but I'd remind everyone this is already a long term problem begun in the 1930's and pushed into high gear in the '80's.
For now, I dont see anything extraordinary in the movement of treasuries. Looks like just a gardern variety profit-taking correction. Not until global rates are near or under 1% will the bubble reach critical mass. >>
I think the move today was quite extraordinary because the dollar was lower and there should have been a flight to quality. Instead the bonds suffered an unusually steep loss.
This is a chart of the yield of the 10 yr Treasury. It move opposite the price of the bond. Bond prices down hence yields up. And vise versa. Anyway, I see nothing more than a "dead cat" bounce. These type of moves usually top out at the 50 DMA--blue line, but can sometimes run up to the 200 dma--red line. In any case that projects to about 3.25%. I see this as no big deal.
Regarding the movement of the dollar. There has been some very interesting developments in the big 3 currencies--Dollar, Yen, Euro--over the past week. I will not go into detail, but suffice to say, something else very interesting may occur shortly.
Translation: Obama will tell us all how we should cut back our personal consumption and live lives of severe austerity, while the government ramps up their spending into overdrive.
Cohodk, that chart looks kinda ominous.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Translation: Obama will tell us all how we should cut back our personal consumption and live lives of severe austerity, while the government ramps up their spending into overdrive.
<< <i>Translation: Obama will tell us all how we should cut back our personal consumption and live lives of severe austerity, while the government ramps up their spending into overdrive.
jmski, I hope you cover eyes and on one knee when you speak of Dear Leader.
<< <i>Ominous in what way? Like it wants to go lower?
Yes. Ominous in ways that will cause us grief even though we own gold. >>
Think of it this way. The lower rates go, the higher they could bounce. And you know my contention of the relationship of gold to global interest rates.
Right now we are seeing a flight to gold due to the nationalization of European banks and the downgrades of sovereign debt in several EU members.
<< <i>Translation: Obama will tell us all how we should cut back our personal consumption and live lives of severe austerity, while the government ramps up their spending into overdrive.
Cohodk, that chart looks kinda ominous. >>
Ominous in what way? Like it wants to go lower? >>
This is a chart of the yield of the 10 yr Treasury. It move opposite the price of the bond. Bond prices down hence yields up. And vise versa. Anyway, I see nothing more than a "dead cat" bounce. These type of moves usually top out at the 50 DMA--blue line, but can sometimes run up to the 200 dma--red line. In any case that projects to about 3.25%. I see this as no big deal.
Regarding the movement of the dollar. There has been some very interesting developments in the big 3 currencies--Dollar, Yen, Euro--over the past week. I will not go into detail, but suffice to say, something else very interesting may occur shortly. >>
I don't want to be right but it's the same thing today; lower dollar, lower bonds.
This is a strong signal that people might be losing their faith in the ability of the government to ever service these debts. These markets need reassurance now. Gold could bounce 50% higher in a single day if money flees bonds and the cur- rent trouble could be remembered fondly as good times.
Every day the psychology could worsen until people believe the government can repay. I don't believe the dollar could survive such onslaught.
<< <i>Translation: Obama will tell us all how we should cut back our personal consumption and live lives of severe austerity, while the government ramps up their spending into overdrive.
Cohodk, that chart looks kinda ominous. >>
Ominous in what way? Like it wants to go lower? >>
whatever "it" is. yup >>
"it" is the yield on the 10 yr Treasury. The lower the yield, the higher the price. Prices go up when there are more buyers than sellers. So I, and you, see Treasuries to still be in demand.
mhammerman, the world gold inventory of 29,600 tons is accurate using the IMF convention that gold sales and leasees can be double counted (ie no worse than 50% accuracy...lol). One could potentially cut that number in half to get a range on the true amount of gold currently in CB hands: 15K-30K tons. I suspect the real number is closer to the 15,000 ton value. The CB's expended considerable gold wealth over the past 15 years to keep the pog somewhat contained.
So I, and you, see Treasuries to still be in demand.
I'm wrestling with this. If the yield from 10-yr Treasuries has dropped to 2.5+ or so, which is half of it's previous baseline, how does that indicate demand for Treasuries?
I mean, ok - maybe the 10-yr Treasury prices are going up, but why? And for how long? Are people branching out from the low yielding short term Treasuries now, looking for return and taking on a little more risk?
If so, bad move - imo. I interpret the money supply numbers and the plans for massive spending by Congress to be only bad for bonds of all stripes. For the forseeable future.
What am I missing?
Q: Are You Printing Money? Bernanke: Not Literally
It's begun...so much for the First Amendment. I wonder when the gold seizure announcement will come.
Ren >>
And just like Jon Stewart on Crossfire (partially credited with the ending of that show), I agree that the Rush Limbaugh people of the world who are more interested in their own type of "hate" speech than actually solving the worlds problems ARE the problem. Seriously, you're criticizing Obama for saying quit listening to Rush who publicly stated he wants the President to fail, essentially that he hopes the country goes down in flames? REALLY?
Again, it's pretty easy for me to see that kind of talk serves no useful purpose, and political wrangling / showboating, etc. does not further the business of IMPROVING the country.
Comments
Fri, Jan 16 2009, 11:10 GMT
http://www.afxnews.com
LONDON, Jan 16 (Reuters) - The world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its bullion holdings rose 1 percent to a record 7,143.27 tonnes on January 14.
The New York-based trust, which issues securities backed by physical stocks of silver, has increased its silver holdings by 2,300 tonnes or 48 percent year-on-year, according to data published on its website. (http://us.ishares.com/product_info/fund/overview/SLV.htm).
Buying of silver bullion by ETFs has formed a major tranche of demand in recent years, helping to offset falling consumption in industry and from the photographic sector.
Investors have taken a greater interest in physical precious metals in recent months as volatility in other assets has led to increased risk aversion.
"We see this as driven by the safe haven story," said Standard Chartered analyst Daniel Smith. "We remain quite bullish on gold, and that is helping lift interest in silver. If you look at the gold-silver ratio, silver looks quite cheap."
Silver's appeal as a currency hedge and an alternative to gold is outweighing falling demand in other areas, he said.
"From an industrial perspective, demand is quite weak but I don't think people are focusing on that as much as where the dollar is likely to go, and where gold is likely to go," he said.
Spot silver was quoted at $10.75/10.83 an ounce at 1045 GMT. Standard Chartered sees silver prices averaging $12 an ounce in the fourth quarter.
I have a very strict gun control policy: if there's a gun around, I want to be in control of it - Clint Eastwood
Pouring it all into infrastructure would have done a bit of good...but there isnt much in the way of that. Just more injections and pathetic give backs to appease the masses.
I guess this is what happens when you have a college frat boy from Yale in power for 8 years followed by a community organizer from Harvard, who, if he did study economics, was immersed in JMK.
I find interesting how Keynesian economics, relatively new, is assumed to be the end all be all...and infallible.
I am not a type that thinks we need to go back to a gold standard per say, but the idea that unlimited borrowing and spending will always work really baffles my mind. Even more so is the fact that people that are very very intelligent DONT find it baffling.
siliconvalleycoins.com
OK, men. I want you brave little indians to join me in displacing the naysayers. We'll be riding for about 4 days after which, I expect that the little buffalos will join us to provide military support. We will proceed en mass until we have contact.
Fall in. Left face. Forward march.
9800
Yee-Haa!!!!
I knew it would happen.
Stewart Thomson supports the theory that in order to start an economic recovery, the govt has to get a handle on gold ownership prior to turning up the speed of the printing presses to hyper-drive.
roadrunner
Jan. 16 (Bloomberg) -- Arthur Nadel, a hedge-fund manager in Sarasota, Florida, has disappeared and clients are concerned they may have lost hundreds of millions of dollars, according to law enforcement officials.
Nadel, 76, is president of Scoop Management Inc., which oversees funds including Valhalla Investment Partners LP. He was reported missing two days ago after he called his stepson, Geoff Quisenberry, and told him to go to his house where he had left a note, Lieutenant Chuck Lesaltato of the Sarasota County Sheriff’s Office said today in a telephone interview.
Nadel’s wife, Peg, and Quisenberry, were “concerned about his welfare,” Lesaltato said. Nadel had sounded “distraught,” Lesaltato said, citing the note.
Scoop may have managed as much as $350 million, the Herald- Tribune in Sarasota reported today on its Web site. The newspaper said Nadel was a “prominent player in Sarasota social and philanthropic circles.”
Hey, I thought we were going green...why waste all that paper and electricity and ink and administrative time? Just do what Zimbabwe is going an print larger bills like 10,000 and 1,000,000 and so. Big Money!
EXCELLENT BUFFALO STAMPEDE AND THEY BROUGHT THE BABY BUFFALOS!!! We should have these naysayers on the ropes pretty soon.
<< <i>Getting control of the gold
Stewart Thomson supports the theory that in order to start an economic recovery, the govt has to get a handle on gold ownership prior to turning up the speed of the printing presses to hyper-drive.
roadrunner >>
Good article........ I think all of us need to be prepared to be surprised. Who really knows what will happen....
<< <i>Getting control of the gold
Stewart Thomson supports the theory that in order to start an economic recovery, the govt has to get a handle on gold ownership prior to turning up the speed of the printing presses to hyper-drive.
roadrunner >>
Getting control has been in the works for a long time;
Linky
Snip Snip
------------------------------------------------------
The Federal Reserve’s Blueprint
for Market Intervention
by James Turk
Founder, GoldMoney.com
January 16, 2009
An important document buried in the Federal Reserve’s archives has been discovered by writer and researcher Elaine Supkis. This document is posted on her blog at: http://emsnews2.wordpress.com/2009/01/15/1961-top-secret-fed-reserve-gold-exchange-report/
The document, which is marked “Confidential”, is from the papers of William McChesney Martin, Jr., and this collection is held by the Missouri Historical Society. A scanned image of the original document is posted by the Federal Reserve Bank of St. Louis at the following link: http://fraser.stlouisfed.org/docs/historical/martin/23_06_19610405.pdf
Martin was the longest-serving chairman of the Board of Governors of the Federal Reserve System, and worked there under five U.S. presidents from April 1951 to January 1970. It was during his tenure that the dollar devolved from “as good as gold” to a perennially inflated fiat currency backed by nothing but government promises, which makes one ponder what could have happened to the dollar had Martin been an advocate of sound money dedicated to preserving the dollar’s link to gold. Instead, during his tenure the US Gold Reserve declined by nearly one-half from 633.2 million ounces to 339.5 million ounces, while M3, the total quantity of dollar currency, soared more than three-fold from $190.0 billion to $616.1 billion.
The author of this Federal Reserve document is not clear, but was obviously written by a senior staffer who was not only familiar with the Fed’s operation and that of the Treasury, but also well attuned to their policies and procedures. It appears to have been written by someone in the Federal Reserve Bank of New York, given the obvious familiarity and extensive knowledge of the writer with that branch’s trading desk that executes trades for the Federal Reserve and the Treasury, which explains why this document is so interesting and important.
It was written in April 1961, and the run on the dollar had already begun. It was becoming increasingly clear that the U.S. government was not managing the dollar according to the rules and the intended goals of the 1944 Bretton Woods Agreement. The dollar was being debased under Martin’s chairmanship, and as a consequence, gold had begun to flow out of the U.S. Treasury as dollar holders realized that one ounce of gold was worth more than $35, the fixed exchange rate then in place. By April 1961, the US Gold Reserve had already declined significantly from the beginning of Martin’s tenure to 498.1 million ounces.
So the warning signs for the dollar were already apparent, not only to dollar holders, but also to the U.S. government. As this document makes clear, the government realized that the monetary course it was pursuing could not be sustained. Consequently, policy makers realized that something would need to be done, and this “Confidential” Federal Reserve memo was obviously prepared to analyze one of the alternatives available to policy makers.
The document does not explain the different alternatives, but there were three. It is the same three alternatives all governments have when deviating from the rules of the gold standard.
First, the government could follow the aims intended from Bretton Woods and raise interest rates to reduce new loan creation and the quantity of dollars. This action would dampen economic activity, and reverse the outflow of gold, thereby enabling the gold standard to be maintained.
Second, it could devalue the dollar as Franklin Roosevelt had done. In this way, the remaining weight of gold in the US Gold Reserve would provide sufficient backing to the dollar, which would stop the redemption of dollars for gold.
Third, it could try experimenting with a course not taken before – government intervention to force the market to bend to government will. This alternative was the worst of the three, and unfortunately, it is the one chosen by the government, which brings me back to this newly discovered confidential document of the Federal Reserve.
In short, it lays out what the Treasury and Federal Reserve needed to do in order to begin intervening in the foreign exchange markets, but there is even more. This document plainly shows what happens when government operates behind closed doors. It also makes clear the motivations of the operators of dollar policy long described by GATA <www.gata.org> and its supporters, namely, that the government would pursue intervention rather than a policy of free markets unfettered by government activity. The run to redeem dollars for gold had put the government at a crossroads, forcing it to make a decision about the future course of dollar policy. This paper describes what the government would need to do by choosing the interventionist alternative.
This document provides primary, original source supporting evidence that GATA has been right all along.
I have long hoped that a “Confidential” document like this one would eventually emerge. There are no doubt countless more like it, as evidenced by the Federal Reserve’s and the Treasury’s refusal to provide all the documents requested by GATA under its recent Freedom of Information Act request. Maybe those documents will eventually see the light of day too.
In the meantime, this newly discovered document is all that we have. And a close reading of if is warranted because it is so revealing.
To analyze this document, I have copied it below in its entirety in italics, with my occasional comments embedded in the text in order to highlight key points.
-----------------------------------------------------
Snip Snip
Gold's move was striking in spite of a continuing move by the dollar which no doubt will continue during Obama day (Jan 20th). I suspect the PPT, if ready to go, will try to take gold back down today. But without a new Treasury Sectretary in place yet, who will give the PPT their official marching orders?
The open in NY hasn't turned the wave. A quick correction back to $849 and then a pop back to $860. A close today over $850 would be a strong sign.
Rob Kirby discusses 15 years of interest rate and gold price controls
Interest rate swaps have allowed JPM (ie our central banker) to distort interest rates for years. But for how much longer? When these deleverage down the road it will make the CDS issue seem small in comparision.
roadrunner
<< <i>Gold fireworks over in London this morning as the metal rocketed from $823 to $857 in minutes apparently on the heels of the bad news emanating from the Royal Bank of Scotland. They continue to be in deep water despite tens of billions being tossed at the problem. HSBC, Barclays and other banks also took some hits.
Gold's move was striking in spite of a continuing move by the dollar which no doubt will continue during Obama day (Jan 20th). I suspect the PPT, if ready to go, will try to take gold back down today. But without a new Treasury Sectretary in place yet, who will give the PPT their official marching orders?
The open in NY hasn't turned the wave. A quick correction back to $849 and then a pop back to $860. A close today over $850 would be a strong sign.
roadrunner >>
More likely the move is related to the fear of collapse of the Euro. Spain and Greece have had their sovereign credit ratings cut. The viability of the Euro has come under more scrutiny in the past week and gold is shining as a perceived alternative currency.
Knowledge is the enemy of fear
<< <i>...running to the US dollar was not done this time, instead it was gold? >>
The dollar is up as well. So is the Yen.
Knowledge is the enemy of fear
From Mr. Doom and Gloom himself.
<< <i>US Banking system is "effectively insolvent"
From Mr. Doom and Gloom himself.
ttown has posted his share as well! , yet your avatar freaks me out
i wonder if more and more about a bank closure day and not so much Au confiscation but a fractional gold backed currency. what other way out is there of this mess?
Standard & Poor's Ratings Services said it had lowered its long-term sovereign credit ratings on the Republic of Portugal to 'A+' from 'AA-', as it believes the government's structural reform measures relating to the economy and public finances have proven insufficient to bring about convergence with the 'AA' peer group. At the same time, we lowered the short-term ratings on the Republic to 'A-1' from 'A-1+'. The outlook is stable. With these actions, Standard & Poor's removed the ratings from Creditatch with negative implications, where they were placed on Jan. 13, 2009. "In our opinion, Portugal faces increasingly difficult challenges as it tries to boost competitiveness and lift persistently low growth," Standard & Poor's credit analyst Trevor Cullinan said. "This, together with a heavy general government debt burden, leads us to believe that Portugal is unlikely to make the necessary structural improvements to remain in the 'AA' peer group." During an unusually benign global economic environment, the current administration managed to reduce the general government deficit from a peak of 6.1% of GDP in 2005 to 2.2% of GDP in 2008. The failure over the same period to bring down net general government debt-to-GDP is largely due to the denominator effect--that is, the weakness of Portugal's underlying economy. Moreover, we believe that efforts to raise potential growth, including measures to improve education and innovation and redress the loss in export market share over recent years, are yielding only limited results. As a result, we do not expect any substantial improvement in productivity or indeed the long-term potential growth rate of 1.0%-1.5% over the medium term.
Knowledge is the enemy of fear
The irony is inescapable that with the foxes guarding the hen houses why would anyone believe anything published by any of the so-called "rating" agencies? What major western nations are technically not already insolvent as most of their large banks are? Grading on a curve such that a deserved rating of C,D,or F becomes an A, A+, AA, AAA, etc is a hard swallow. Maybe Portugal should take a few lessons from larger nations in how to prop up GDP values with gimmicks and to hide detrimental "assets" far off the balance sheets.
roadrunner
The linked charts show some interesting trends that would tend to support a managed gold market. This link supplies a trend of trading patterns over the past several years as well as the past 20 years that is hard to dispute. The only thing up for discussion is what causes the pattern, manipulation or a growing shift of Asian buying and Western selling.
The pattern is that over the past 24 yrs, one could have averaged 1% per week by buying gold at the London PM fix (3 PM) just after the US markets open up and selling it at the London AM fix (10:30 AM) just as the Asian markets close. That works out to be a gain of nearly 25,000,000% over the past 24 years. If one did just the opposite, you would have lost the better part of a % per week in that time. If one looks at the last 2 years from early 2007, the gain is a staggering 1.78% per week.
There are only 2 real choices for this pattern occuring. One is a constant amount of Western gold selling and Asian buying over many years. The other option is manipulation of prices as the US markets open each day...or possibly some combination of the two. My guess goes for the combination, but with a preponderance of manipulation since managed gold prices support desired dollar policy.
roadrunner
$20 Saint Gaudens Registry Set
$20 Saint Gaudens Registry Set
<< <i>Pouring it all into infrastructure would have done a bit of good...but there isnt much in the way of that. Just more injections and pathetic give backs to appease the masses. >>
Obama has spoken about funding infrastructure on a wide scale, including upgrading the power grid to improve efficiency and to accommodate alternative energy. A good deal of R&D will also be needed for those purposes.
It will also be interesting to see if the government proposes any new medical R&D funding programs that will make funding available to the private sector.
Will that sort of spending revive the economy? I don't know but at least we might get some tangible benefit from the effort.
<< <i> the idea that unlimited borrowing and spending will always work really baffles my mind. Even more so is the fact that people that are very very intelligent DONT find it baffling >>
If there is a compelling case that can be made for sparking an economic turn-around without government spending I would like to hear it. So far all I have heard from the right wing is nonsense about eliminating capital gains taxes (investors are not concerned about taxes on capital gains right now--the VCs can't raise money, start-ups can't get funding, and public companies cannot raise debt or equity capital because the only thing that investors can see is losses) or letting the “free market” work. I suppose the “free market” (if such a thing existed) might get us out of an economic death spiral -- eventually. But there is something dreadfully unappealing about the prospect of living under a bridge and eating mulligan stew while waiting for the “invisible hand” of the free market to move things along.
CG
“But there is something dreadfully unappealing about the prospect of living under a bridge and eating mulligan stew while waiting for the “invisible hand” of the free market to move things along.”
CalGold,
The problem with GOVERNMENT FIXS is that they are never ending, never repealed, and by there very nature can NOT be regulated.
The most socialist cites and states in our country show us exactly where we are headed, and there are so many folks under the bridge already in those cites there is no more room!
Poverty in the Cities.
City, State, % of People Below the Poverty Level
1. Detroit , MI 32.5%
2. Buffalo , NY 29.9%
3. Cincinnati , OH 27.8%
4. Cleveland , OH 27.0%
5. Miami , FL 26.9%
5. St. Louis , MO 26.8%
7. El Paso , TX 26.4%
8. Milwaukee , WI 26.2%
9. Philadelphia , PA 25.1%
10. Newark , NJ 24.2%
What do the top ten cities (over 250,000) with the highest poverty rate all have in common?
Detroit, MI (1st on the poverty rate list) hasn't elected a Republican mayor since 1961;
Buffalo, NY (2nd) hasn't elected one since 1954;
Cincinnati , OH (3rd)...since 1984;
Cleveland , OH (4th)...since 1989;
Miami , FL (5th) has never had a Republican mayor;
St. Louis , MO (6th)....since 1949;
El Paso , TX (7th) has never had a Republican mayor;
Milwaukee , WI (8th)...since 1908;
Philadelphia , PA (9th)...since 1952;
Newark , NJ (10th)...since 1907.
I think if gold were to close at the same time as equity markets and/or currency markets this would be a moot point.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
This kind of thing can turn into a torrent rapidly and be destabilizing.
They will have tone down the rhetoric and put some things on hold.
Wow... Do any of you think this will actually happen?
It sure would fit in with BO's "everyone is going to have to do their part" promise. And, wealthy folks would certainly be "doing their part" more than people with fewer assets (another popular theme).
In a currency devaluation competition (assuming there will be one), is this the next step after all currencies' interest rates hit zero?
<< <i>The move away from bonds seems to be accelerating.
This kind of thing can turn into a torrent rapidly and be destabilizing.
They will have tone down the rhetoric and put some things on hold. >>
i found this link interesting in regards to your comment
cnn money
<< <i>
<< <i>The move away from bonds seems to be accelerating.
This kind of thing can turn into a torrent rapidly and be destabilizing.
They will have tone down the rhetoric and put some things on hold. >>
i found this link interesting in regards to your comment
cnn money >>
For now, I dont see anything extraordinary in the movement of treasuries. Looks like just a gardern variety profit-taking correction. Not until global rates are near or under 1% will the bubble reach critical mass.
Knowledge is the enemy of fear
<< <i>
i found this link interesting in regards to your comment
cnn money >>
It's a good article.
The economy and its money are not only based on the full faith and
credit of the US government but the basis of this faith is its ability to
tax to repay its debts. If the perception begins to grow that there is
no longer enough blood in the turnip then these instruments can re-
verse sharply.
While the optimism displayed by the new administration is helpful, the
fact remains that the perception is already wavering and mountains of
new debt can push it over the edge. Rhetoric might suffice for the short
term but I'd remind everyone this is already a long term problem begun
in the 1930's and pushed into high gear in the '80's.
We npow seem to be entering overdrive.
<< <i>
For now, I dont see anything extraordinary in the movement of treasuries. Looks like just a gardern variety profit-taking correction. Not until global rates are near or under 1% will the bubble reach critical mass. >>
I think the move today was quite extraordinary because the dollar
was lower and there should have been a flight to quality. Instead
the bonds suffered an unusually steep loss.
I think this is a warning that must be heeded.
This is a chart of the yield of the 10 yr Treasury. It move opposite the price of the bond. Bond prices down hence yields up. And vise versa. Anyway, I see nothing more than a "dead cat" bounce. These type of moves usually top out at the 50 DMA--blue line, but can sometimes run up to the 200 dma--red line. In any case that projects to about 3.25%. I see this as no big deal.
Regarding the movement of the dollar. There has been some very interesting developments in the big 3 currencies--Dollar, Yen, Euro--over the past week. I will not go into detail, but suffice to say, something else very interesting may occur shortly.
Knowledge is the enemy of fear
Cohodk, that chart looks kinda ominous.
I knew it would happen.
<< <i>Translation: Obama will tell us all how we should cut back our personal consumption and live lives of severe austerity, while the government ramps up their spending into overdrive.
Cohodk, that chart looks kinda ominous. >>
Ominous in what way? Like it wants to go lower?
Knowledge is the enemy of fear
<< <i>Translation: Obama will tell us all how we should cut back our personal consumption and live lives of severe austerity, while the government ramps up their spending into overdrive.
jmski, I hope you cover eyes and on one knee when you speak of Dear Leader.
Renski
Yes. Ominous in ways that will cause us grief even though we own gold.
I knew it would happen.
<< <i>Ominous in what way? Like it wants to go lower?
Yes. Ominous in ways that will cause us grief even though we own gold. >>
Think of it this way. The lower rates go, the higher they could bounce. And you know my contention of the relationship of gold to global interest rates.
Right now we are seeing a flight to gold due to the nationalization of European banks and the downgrades of sovereign debt in several EU members.
Knowledge is the enemy of fear
<< <i>
<< <i>Translation: Obama will tell us all how we should cut back our personal consumption and live lives of severe austerity, while the government ramps up their spending into overdrive.
Cohodk, that chart looks kinda ominous. >>
Ominous in what way? Like it wants to go lower? >>
whatever "it" is. yup
<< <i>
This is a chart of the yield of the 10 yr Treasury. It move opposite the price of the bond. Bond prices down hence yields up. And vise versa. Anyway, I see nothing more than a "dead cat" bounce. These type of moves usually top out at the 50 DMA--blue line, but can sometimes run up to the 200 dma--red line. In any case that projects to about 3.25%. I see this as no big deal.
Regarding the movement of the dollar. There has been some very interesting developments in the big 3 currencies--Dollar, Yen, Euro--over the past week. I will not go into detail, but suffice to say, something else very interesting may occur shortly.
I don't want to be right but it's the same thing today; lower dollar, lower bonds.
This is a strong signal that people might be losing their faith in the ability of the
government to ever service these debts. These markets need reassurance now.
Gold could bounce 50% higher in a single day if money flees bonds and the cur-
rent trouble could be remembered fondly as good times.
Every day the psychology could worsen until people believe the government can
repay. I don't believe the dollar could survive such onslaught.
In fact, since bonds topped out in mid-Dec, the dollar has done very well.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>Translation: Obama will tell us all how we should cut back our personal consumption and live lives of severe austerity, while the government ramps up their spending into overdrive.
Cohodk, that chart looks kinda ominous. >>
Ominous in what way? Like it wants to go lower? >>
whatever "it" is. yup >>
"it" is the yield on the 10 yr Treasury. The lower the yield, the higher the price. Prices go up when there are more buyers than sellers. So I, and you, see Treasuries to still be in demand.
Knowledge is the enemy of fear
roadrunner
I'm wrestling with this. If the yield from 10-yr Treasuries has dropped to 2.5+ or so, which is half of it's previous baseline, how does that indicate demand for Treasuries?
I mean, ok - maybe the 10-yr Treasury prices are going up, but why? And for how long? Are people branching out from the low yielding short term Treasuries now, looking for return and taking on a little more risk?
If so, bad move - imo. I interpret the money supply numbers and the plans for massive spending by Congress to be only bad for bonds of all stripes. For the forseeable future.
What am I missing?
I knew it would happen.
It's begun...so much for the First Amendment. I wonder when the gold seizure announcement will come.
Ren
<< <i>Should be an interesting monday morning at the EIB network
It's begun...so much for the First Amendment. I wonder when the gold seizure announcement will come.
Ren >>
And just like Jon Stewart on Crossfire (partially credited with the ending of that show), I agree that the Rush Limbaugh people of the world who are more interested in their own type of "hate" speech than actually solving the worlds problems ARE the problem. Seriously, you're criticizing Obama for saying quit listening to Rush who publicly stated he wants the President to fail, essentially that he hopes the country goes down in flames? REALLY?
Again, it's pretty easy for me to see that kind of talk serves no useful purpose, and political wrangling / showboating, etc. does not further the business of IMPROVING the country.