Arizona Makes Gold & Silver Legal Tender

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Arizona follows Utah’s lead by making gold and silver legal tender.  More than a dozen states have considered similar moves in the last few years. This is a further kick in the stones for people’s faith in the US dollar since Central Bankers have gone full retard with the printing presses. At least now in Arizona there is an alternative that cannot be inflated so easily. Watch this space as more will undoubtedly follow.

 

PHOENIX (Reuters) – The Arizona Senate on Tuesday approved a measure to make gold and silver legal currency in the state, in a response to what backers said was a lack of confidence in the international monetary system.

The legislation cleared the Republican-controlled Senate by an 18-10 vote after being approved by the state House earlier this month. It now goes to Republican Governor Jan Brewer, who has not indicated if she will sign it into law or veto it.

The bill calls for Arizona to make gold and silver coins and bullion legal tender beginning in mid-2014, joining existing U.S. currency issued by the federal government.

If signed into law, Arizona would become the second state in the nation to establish these precious metals as legal tender. Utah approved such legislation in 2011.

More than a dozen states have considered similar legislation in recent years, according to the National Conference of State Legislatures.

The use of gold and silver as currency would be strictly voluntary, with businesses left free to accept the precious metals as payment for goods and services as they choose.

State Senator Chester Crandell, a Republican and sponsor of the bill, said the ability to use gold and silver in everyday life in the state is still a “work in progress” and that more legislation was needed before it could be viable.

“This is the first step in getting it into the statute so we can build on it,” Crandell said at an earlier hearing on the bill.

But Democratic state Senator Steve Farley said the bill could create massive problems for businesses in the state and government officials trying to administer what would in effect be a dual monetary system.

“There’s no reason for us to do this,” Farley told lawmakers during the final vote on Tuesday. “This is another one of those things that gets national press for us – and not in a good way.”

He also pointed to the recent decline in the value of gold – which sank to $1,321.35 per ounce on April 16, its lowest price in more than two years – noting that “anybody who thinks gold or silver is a really safe place to put your money had better think again.”

The push to establish gold and silver as currency has become increasingly popular in the United States in recent years among some hardline fiscal conservatives, with the backing of groups including the Tea Party movement, American Principles Project and the Gold Standard Institute.

Keith Weiner, president of the Gold Standard Institute advocacy group and a supporter of the bill, said the legislation was needed to counter what he sees as insolvency in the global monetary system.

“The dollar system and all of the other derivative currencies, including the euro, are a recipe for worldwide bankruptcy,” Weiner told lawmakers at an earlier hearing, adding that a “sound and honest money system such as gold and silver” was needed to bring stability.

Source: Yahoo

Failure On COMEX Silver Likely

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We finished December with a large takedown of both gold and silver by the central banks cartel but already the COMEX is showing signs of strain in coping with demand in silver. Banks with short positions (used to suppress the price) are unlikely to be covered in 2013 and so there is likely to be a failure on the COMEX.

Matterhorn Asset Management’s Lars Schall has released an excellent interview with GoldMoney’s Alasdair Macleod, discussing the latest take-down of the metals post QE4, the outlook for gold and silver, and cartel manipulation of the metals.
Macleod states that massive amounts of physical gold and silver have been flowing to Asia, and that the latest bank participation report indicates massive problems are brewing for the banksters in the COMEX silver market.  With cartel shorts near a record at just under 300 million net ounces, yet with the silver price substantially lower than the 2011 high, Macleod believes that we are quite likely to have a failure on COMEX and in the silver market in particular.

Regarding the latest bank participation report, Macleod states that commercial shorts are at record highs, yet NO SILVER IS AVAILABLE!:

“Bank shorts are at or near record levels. And what is interesting is that with the prices of gold and silver well below the all-time highs there are no profit-takers in the market to sell contracts to close their shorts. And in silver it is very, very alarming. This leads me to think that we are quite likely to have a failure on COMEX and in the silver market in particular.

If you have a failure in silver on COMEX then that is going to affect the gold futures market as well. The West’s central and commercial banks have suppressed the price of both gold and silver by supplying central-bank gold and increased short positions, making prices far too cheap. The result has been a massive transfer of gold and silver to Asia. This is the relevance of the point that you have been raising about Central Banks gold holdings, and it is also going to bring into question the solvency of the bullion banks who are short.

So, I think that while it may not be obvious to many people at the moment, when we look back at the fourth quarter we will see that the conditions were in place for a huge bear squeeze, for silver in particular. I would assume that the short position in gold is more controllable so long as Western Central Banks continue to make bullion available to the bullion banks that are short either on COMEX or with LBMA. But silver is different, nobody has it for sale. There is no silver around.”

Macleod goes on to state that gold will be remonetized, and the process is already well underway:

“I suspect that the Chinese Yuan will play a big role in Asia. What they’re doing with Iran is interesting. They’re settling net balances in gold and gold is being re-monetized in that sense. And I think that China has accumulated a lot more gold than they officially tell us. So they have the potential to use gold as money. I can see gold being re-monetized in the loosest sense for the largest internal market the world has ever seen. Believe me, it’s happening now.”

Macleod also states that the upcoming physical silver crisis at the COMEX will result in a suspension of silver trading at the COMEX, and a reset massively upwards in the price of silver:

“You’ve got the banks’ short position on COMEX which cannot be covered. According to the most recent bank participation reports, the banks are short of nearly 300 million ounces of silver. When you bear in mind this is an industrial metal, the vast bulk of silver consumption from mining and recycling supply goes into biocides, solar panels, electronics, et cetera. You have only 100 million ounces annually left over for investors. The short position for the banks on COMEX is three times that 100 million ounces.

There’s no way this can be covered without a price rise sufficient to kill off significant industrial demand, because there are no strategic reserves to draw on. The only country which might have strategic reserves is China but otherwise there are no reserves. And I think that the only way in which the banks’ shorts could be closed out is after a price hike which would lead to billions of dollars of losses for these banks. There will be a market crisis, and I think that they will have to suspend trading in silver and agree a settlement procedure for long and short contracts. And if that happens, it will be well over $50 an ounce. But remember, other exchanges will continue to price silver if Comex suspends, which will not help Comex resolve the problem if the price continues to rise elsewhere.”

On another question, Macleod was asked about Yuan as the next reserve currency being backed by gold :

“We must also understand that the dollar is for security reasons not something they want to use for their international trade settlements. Remember that every dollar transaction done in the world is reflected in a bank account in New York. So, the Chinese want to get away from the potential control and the intelligence information that it gives America. They want to use a different settlement medium.

Now, they agreed about 10 years ago with the Russians to set up the Shanghai Cooperation Organisation (SCO), and the last unsatisfied objective of the SCO is to have a common trade settlement system between the members of the SCO, which at the moment are Russia, China, and the various “stans” in middle-Asia. But interestingly, the next wave of members who will join are India, Iran, Pakistan, Mongolia and Afghanistan (as soon as NATO has left). So you’ve really got the bulk of Asia’s four billion people and they’re going to be settling cross-border trade not with the dollar but with something else. They need to be gold-rich to give confidence to their currencies. I suspect that the Chinese Yuan will play a big role in Asia. What they’re doing with Iran is interesting. They’re settling net balances in gold and gold is being re-monetized in that sense. And I think that China has accumulated a lot more gold than they officially tell us. So they have the potential to use gold as money. I can see gold being re-monetized in the loosest sense for the largest internal market the world has ever seen. Believe me, it’s happening now.”

Source: SilverDoctors

 

Russia Introduces Gold And Silver Coins As Legal Tender

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A smart move by Russia to issue gold and silver coins as legal tender. Its another blow to the confidence of fiat currency. The Central Bank of Russia said:

The coins are legal tender cash payment in the Russian Federation and must be accepted at face value in all kinds of payments without any restrictions

 

It seems 2012 is not yet done with its surprises. The Central Bank of Russia has issued three values of bullion (300,000 31.1g silver pieces with a 3RUB face value, 300,000 7.78g gold pieces with 50RUB face, & 100,000 15.55g gold pieces with a 100RUB face value) that can be used as legal tender beginning, well,  TWO DAYS AGO! If you don’t yet understand the ramifications of such a move, don’t worry, it’s not too late. But you want to begin reading now – starting with the history of metals as money. The clock is ticking and no one knows when the the current economic model’s Duracell will die. Hell, we don’t even know if it’s a AAA, AA, 9V, C size, or D size battery. Every year there seems to be the establishment of new institutions with the capital to lend more. In my book these sizes don’t matter. I think we’re already on the Duracell Rechargeable model. But we all know they don’t last for ever either.

The link from the Central Bank of Russia is at : http://www.cbr.ru/pw.aspx?file=/press/if/121217_164427monet1.htm

Sourc: sandeproject.wordpress.com

Eric Sprott: Central Banks Use Accounting Tricks To Hide Lack Of Gold

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Eric Sprott gave an interview on Bloomberg regarding Central Banks using accounting tricks to hide the missing gold from their reserves. Some of the transcript from Silverdoctors are below including link to video. Well worth a look.

Sprott simply destroyed the MSM pundits’ anti-gold arguments, stating that gold has beat the Dickens out of every other asset class over the last 12 years, and questioned whether the Western Central Banks have any physical gold left in the vaults, as the gold listed on their balance sheets includes gold receivables, which has been leased out and is gone for good.

Bloomberg kicked the interview off by asking Sprott whether he is as much a fan of precious metals today as he once was, ”given the fact that they’ve treated you so poorly over the past 18 months?”  Sprott replied:

A little history is probably important here.  Gold has gone from $250 to over $1700.  It’s beat the Dickens out of every other asset class over the last 12 years…To specifically answer your question, am I more optimistic today than I might otherwise be?  Absolutely.   I wrote an article recently questioning whether the Western Central Banks had any gold left.  We simply did a physical analysis of the people that are coming into the gold market and the changes that have happened since 2000, (and the supply of gold has not changed since 2000 on an annual basis, it’s still 4,000 tons).   When you look at the fact that the central banks used to sell 400 tons annually, now they buy 500 tons.  The ETF didn’t even exist in 2000, now they buy 300 tons a year. 

The Bloomberg host then interrupted Sprott to claim that this sounds like a conspiracy theory and asked for another reason to buy gold.  Sprott responded:

I could probably give you 20 reasons.  How about money printing?  QE1, QE2, QE3, LTRO, OMT’s, people are essentially debasing their currencies.  They’re not holding them in the esteem that they should, and it’s reflected in the fact that the price of gold’s gone up.  One of the issues we have with gold is the fact that it hasn’t performed well in the last 18 months…But People are flocking to goldWhen I look at the US Mint statistics for gold sales.  When I look at what the Chinese are doing in terms of imports of gold from Hong Kong into the mainland, they’re up 500 tons in the last 12 months in a 4,000 ton market!!  Imagine if the Chinese bought an extra 12% of the oil or wheat market this year!  Would they get it?  And who’s supplying the 500 tons?  We already had a market that was in balance!

Gold production is flat, and one might even argue that the gold miners may have trouble increasing production this year.  You’ve seen the disappointments of Barrick and Newmont, and many others are having issues.

The Bloomberg host then asked Sprott why the gold price hasn’t responded to those supply and demand factors.  Sprott responded:

Well, there’s two markets for gold.  There’s the paper market, the COMEX futures. You can have the annual gold production trade in two days on the paper market.  I focus on the physical market.  I want to see what people are doing with their money physically.  Are they continuing to buy more and more gold, year after year?  Every indication we have is that they continue to buy INCREASING AMOUNTS OF GOLD.  Sooner or later, (and ask Eric asked, how do the central banks sell gold without telling anybody?), they have a very simple way: Central banks have one line on their balance sheets for gold and gold receivables!  If they lease gold to a bullion dealer, that’s a receivable.  That gold has obviously been sold into the market, but we can’t tell what’s real gold and what’s receivable (on the central bank balance sheets).

Full Video Interview

Source: Silverdoctors

John Williams: Hyperinflation by 2014

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John Williams of Shadowstats.com gave an interview on usawatchdog regarding his opinion that there will be hyperinflation by 2014.

  • Public awareness to grow in the months.
  • Its a certainty that we will experience hyperinflation.
  • You will see a sell off in dollar followed by spike in oil prices.
  • The Fed’s primary concern is to keep the banking system afloat.
  • $12 trillion in liquid dollar assets held outside the U.S.  Williams says it is only a matter of time before all the Fed money printing will “trigger a sell-off”.
  • Buy gold and silver to protect your purchasing power.

17% Of Silver In Comex Gone In One Day

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Last friday a client of JPMorgan got tired of holding paper silver and asked for the delivery of 3.6 million ounces, which is 17% of all the registered inventory of silver. The full amount wasn’t met which begs the question what happens when others eventually follow suit and how long will it be before everyone panics and swaps paper for physical? Its long been know that paper silver out numbers physical, therefore someone is going to be disappointed when the paper is eventually traded for the real stuff.

This week’s interview with gold dealer Tom Cloud of National Numismatic Associates comes as precious metals are correcting and rumors are swirling around Comex silver.

Dollar Collapse: Hi Tom. It’s been an interesting couple of days for silver, with a big Comex draw-down being followed by a sizable price drop. If the silver market wasn’t so obviously free and honest, it might be tempting to suspect some kind of manipulation…

Tom Cloud: Late Friday afternoon a big client of JP Morgan requested delivery of 3.6 million ounces, which is 17% of all the registered inventory of silver (assuming it’s all really there). But only 1.6 million ounces were reported moved. A lot of people are asking where the rest of it is. If it wasn’t immediately available and the client allowed JP Morgan to move it in pieces, that’s another sign of very tight supply.

Ordinarily seeing that much silver inventory move would make the price go up, but at the same time they – probably the same people — were buying shorts to drive the market down late in the day when trading was slow.

DC: The size of the silver draw-down raises the question of what happens if a few more big players want to turn their futures contracts into physical metal. Would this cause a delivery disruption or outright default on the Comex?

TC: Somebody stepped up and said ‘no more paper for me; it’s time to get the real thing in my name.’ They’ve played the [paper silver] game and benefited from it and now they want their silver. But not everyone can do that. There is 100 times as much silver paper [in the form of futures contracts] as there is physical, which means a lot more people think they own silver than there is silver in the world. At some point someone will be left out. If 17% of Comex inventory is taken out in one move, then you don’t need that many more big players to take delivery to see this thing fall apart.

A lot of people were already worried about this, and what happened Friday certainly raises the odds that others with paper claims are going to ask for physical. This morning I’m seeing a lot of dealers buying a lot of silver for their own inventories. This is a very scary situation.

DC: Has an exchange ever defaulted on a commodity?

TC: I don’t know of one that has completely defaulted, where they drain their warehouses of product. So it would be a huge event. And the picture for gold, though not as urgent as silver, is also pretty tight, with futures contracts far exceeding available physical.

DC: So what does the prospect of a Comex default mean for precious metals investors? How can we play it?

TC: Only gold bars from major fabricators like ScotiaMocatta and Johnson Matthey can be used to settle a Comex futures contract. That is, they’re approved for future delivery. When the shortage hits, if you’re holding one of these bars the premium is going to shoot straight up, so in addition to a higher spot price you’ll make money on the wider premiums. Because of this, a lot of my larger investors buy Comex bars exclusively instead of coins.

There are now ten different mints producing Comex gold bars. Two years ago there were four. Comex is smart. They know it’s gonna hit the fan and are now willing to approve other brands in order to increase their sources of metal. I don’t think they’d be approving these other brands if they didn’t expect a default. It’s the same with silver. 24 months ago there were two approved fabricators, Johnson Matthey and Engelhard, making bars you could deliver on a futures contract. Today you’ve also got Ohio Precious Metals, Academy, and Royal Canadian mint.

But even in the absence of a Comex default, bars are cheaper than coins. They’re not made by a country, but by large refineries, and because of this their premiums are lower. One exciting thing that happened this year is the introduction of one-ounce Comex silver bars from Johnson Matthey. The premium is $2 an ounce, which is about $0.75 an ounce more than for a 100-ounce bar. But it’s a dollar an ounce cheaper than for a Silver Eagle coin, so they’re selling very well.

DC: How do you store Comex bars once you’ve bought them?

TC: Several ways. You can take delivery of them and arrange your own storage. The newest state-of-the-art depository is Diamond State in New Haven, Delaware. They’re tremendous. A buyer can arrange to have their bars shipped directly there, generally for free. They’ll handle the paperwork and charge an annual storage fee. If you buy through us, we have a warehouse where customers can store their bullion for three years for free. It’s allocated, so you own specific coins or bars, and it’s all insured.

Source: Dollar Collapse

Is JPMorgan Stockpiling Physical Silver?

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The ultimate of hedges, to sell paper silver and yet stockpile up on the physical in anticipation of the USDollars demise. Thats exactly what SilverDoctors are suggesting. Makes perfect sense when explained below and very profitable for JPM.

As silver investors are likely aware, leading silver analyst Ted Butler has openly speculated whether JP Morgan’s alleged massive short silver position is held on behalf a client such as the Federal Reserve (with the intent to prop up the dollar by suppressing gold and silver) or the Chinese government (with the intent of acquiring physical gold and silver bullion at a discount due to their massive paper short position on the futures market).

The Doc has long privately wondered whether the bullion banks’ PM short positions could actually be leveraging their own physical bullion accumulation by artificially suppressing the paper futures price.

These thoughts originate in our following of Jim Sinclair, who has always maintained that the bullion banks will be the one’s making the lion’s share of the profits in this great secular gold and silver bull market.   One thing the bullion banksters are not is dumb, and they can see the writing on the wall for the US dollar as well as any SD or ZH reader.

New commentary from a bullion insider who claims to have personally managed the movement of 27 million ounces of gold from HSBC’s vaults into JP Morgan’s seems to substantiate Sinclair’s claims.

The industry insider has come forward claiming that JP Morgan’s paper short position is in fact a hedged trade (as Blythe Masters claimed here)- and claims that JPM is in fact MASSIVELY LONG PHYSICAL GOLD AND SILVER HELD IN THEIR OWN PRIVATE VAULTS while short the paper futures market. 
Is JP Morgan actually a double agent shorting the paper metals market for their own benefit?

The claim is not only rational, but it also would perfectly explain why the CFTC has opened three separate investigations into silver market manipulation, and has yet to charge anyone with manipulation of silver.

Clearly, if JP Morgan’s commodities desk was accumulating massive physical gold and silver inventories in their own personal vaults, they would be able to claim their paper short position is a legitimate hedge- essentially leveraging their physical position against the paper COMEX futures market itself.

Miles Franklin’s David Schectman states he has been in contact with the insider, who claims JPM is massively long physical gold and silver bullion stored in their own warehouses:

In insider gave his opinion of whats happening:

My friend Trader David R flatly states that this IS the case; he has seen the silver with his own eyes in London. In fact, he asked me to come with him last year and told me he would bring me to the vaults and personally show me the silver. Last winter he emailed me and said, “I will be going to London in May; if want to come along, I am sure I can get you a tour of a few of the major banks vaults (JPM included) and you can see all of the gold and silver for yourself ?”
 

For those inquiring minds wishing for a little background on this mysterious gold trader David R:

I worked at some of the largest bullion banks in the world over my career and I ran all types of books and did a lot of business with Central Banks around the globe.  I was involved in the largest gold hedge ever done in the history of the world back in 1996. This has been my life for the past 18 years. From 2000 to 2006 I was the gold trader at Barclays London. I have worked for AIG, Barclays, and UBS, some of the biggest bullion desks in the world.

I worked for three of the major bullion banks for 11 years and was in charge of Barkleys gold book and the hired 42 Brinks trucks to move our 27 million ounces of gold out of HSBC ‘s vault and into JPMs vault when HSBC raised storage costs on us, I am 100% positive that it’s there. I know we had 27 million ounces of gold on our daily balance sheet and the other big banks all had around the same amounts.

David R left Barclays and moved to Manhattan to work for one of the largest and most successful privately held hedge funds in NYC. He was in charge of the precious metals trading department, and supervised dozens of the most talented precious metal’s traders in NYC. I was told by a reliable source that every metals trader worth his salt would kill to work for that firm. The traders were not salaried, they worked on commission and they all made BIG money. That is where I met David. He gave me a personal tour of their trading department. His understanding of the gold and silver industry and his resume is as good as it gets.


The trader states that JPM is indeed massively long physical precious metals and set to vastly benefit from the coming mania, precisely as Jim Sinclair has long predicted:

 Here lies the beauty of the trade for JPM.

They buy the physical silver at the same time they sell the future (on Comex) futures trade in contango (higher price than spot physical) they get zero interest rate cash from FED so borrow the money for free, they own the vaults to store the silver…. so as the future comes to maturity they can either settle against their physical long or roll the future to collect more free contango…. This is pure arbitrage paid for by the FED.  This has been going on for over 30 years and why shouldn’t they be allowed to have 25% of the Open Interest?  There is no manipulation because they are short the futures and long the physical and have “ZERO” price risk, but nice profits!  It’s brilliant trading and completely 100% legal and that’s why they will never be charged with manipulation because there is none going on. Sometimes it’s just that easy!

David R states there is no massive shortage of physical silver- it is just being hoarded by the bullion banks in their own private vaults ahead of dollar devaluation and collapse:
Let’s go and visit their vaults and you can see all the physical silver there… Lease rates are at full carry +.  There is no shortage what so ever and the banks are charging 40 bp for storage because they cannot find any more space to put it all, you can take all the physical you want!  The JPM manipulation is not a manipulation, but a way of trading that has been going on for years. JPM is short futures (due to contango) and long physical.  People need to understand that metals are just a derivative of the interest rate market and once people do, they will get a better understanding why the market moves the way it does.

I explained to you what HSBC and JPM do on the silver.  They get $ from the FED for free.  They own all the storage vaults, so they do not have to pay the fees for storage.  They then own the physical silver in their vaults and sell the futures contracts (which are in contango) at a much higher price than OTC price so then hold the both till delivery.  Since there is no cost for $ and no cost for storage, they made a fortune on earning the contango of the silver and gold market. It’s a brilliant strategy, which has made them a fortune.

If you sat with me for a day I could show you how this market really works.

Miles Franklin’s David Schectman states he has known David R for over four years, that he is legitimate and the real deal, and that although David states JPM’s short silver (and gold) positions are NOT naked, it is massively bullish for both metals, stating:
He is absolutely convinced that gold and silver are going MUCH, MUCH higher. He told me last week that with the Fed’s latest “open-ended” QE edict, the dollar and bond market are done, finished and the bull market in gold is guaranteed! As far as he is concerned, Bernanke has sold out our kids and grandchildren and it no longer makes any difference who occupies the White House!

 As mentioned previously, if JPM is shorting gold and silver futures with the intent of eventually breaking the futures market/ physical price link to the metals, this would explain motive (pure profit- always the ONLY motive for a bankster), as well as the reason why the CFTC has been unable to charge JPM with manipulation of the silver market- even though they routinely fleece the specs using their algos and raids.

Source: SilverDoctors

Massive Attempt At Silver Price Manipulation

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Yes we all know who as a vested interest in making sure silver does not take off. Over the weekend paper silver was sold off in huge volumes(6 month total US silver supply in minutes) again to try to smash the momentum since the recent QEver announcement from the Fed. What I enjoy most from these stories is that eventually the dam will burst and will be interesting to see the manipulators panic. Excellent work from SilverDoctors below:

Apparently Blythe’s monkey’s are burning the Sunday midnight oil in order to prevent silver clearing $36 and triggering JPM’s rumored silver derivative losses.

A miniature replica of the May 2nd, 2011 drive by shooting was just completed, as silver was knocked down the proverbial mine-shaft moments ago, dropping nearly a dollar in nano-seconds on Monday’s Asian open.

Volume data indicates that 3,297 contracts, or 16.5 million paper ounces of silver were dumped on the market in a mere 5 minutes between 9:00 and 9:05pm EST.
In other words, approximately 1/2 of the entire US annual silver production was dumped on the market by the cartel in a 5 minute period on a Sunday night.

Silver was drifting under $34.50 prior to the raid which knocked .80 off the metal nearly instantaneously at precisely 9:00pm EST:

Wynter Benton Returns, Predicts Silver Will Trade Above $50 by Dec 31, 2012

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Wynter Benton is an ex JPMorgan Commodities broker who was well know for his accurate predictions via Yahoo’s forum in the silver market. After been missing for the last 11 months, has returned to predict silver to go to $50 per oz by the end of the year. A fascinating story of what happened to MF Global.

Silverdocters writes:

Benton claims that the Oct 31st 2011 take-down of MF Global was SPECIFICALLY designed to prevent the group of former JPM traders with a chip on their shoulders against their old boss Blythe Masters from taking delivery of a massive amount of physical silver and breaking JP Morgan’s massive naked short silver position.

Benton also claims that JP Morgan’s $36 silver derivative time-bomb is still in effect, and states that the ex-JPM traders have re-grouped, and that silver WILL trade above $50 before Dec 31, 2012.

Benton wrote on Yahoo’s forum of his latest prediction.

We wish to inform our followers that silver will trade above $50 before Dec 31, 2012.

The $36 silver derivative timebomb is still in effect for the Morgue so count the trading days once silver gets above $36.

MFG was setup to prevent us from taking silver above $45 last year. Did anyone wondered why MFG failed precisely 30 days before our deadline or why no one can locate the vaporized money? It was designed SPECIFICALLY to stop us from taking silver up and out. Think about it.

Too bad The Morgue cant do that again this time cause we are beyond their reach now.

Once again, we are back. . . . . do da do da. . . .

http://finance.yahoo.com/mbview/threadview/?&bn=657e31ff-3231-3847-9760-4f6647a2dfc9&tid=1347560331309-c1ef57d8-049d-48bb-9918-c56a7832d4d9&mid=

Source: silverdoctors

 

Economic Collapse For Dummies

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Highly recommend viewing.

JP Morgan’s Trading Loss May Hit $9 Billion

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Back in may when the story broke of JPMorgan’s London Whale costing the company $3 billion in trading losses, there was great shock but asked the question could it be much higher. Today the figure looks to be getting closer to $9 billion. BusinessInsider reports as follows:

JPMorgan’s famous London Whale trading loss could spiral as high as $9 billion according to Jessica Silver-Greenberg and Susanne Craig at Dealbook.

This is a staggering amount, especially since in May people were freaking out at that might be as high as $3 billion.

…..

POLITICO’s Ben White notes astutely that it’s nice timing for JPMorgan to let this news leak on the day the SCOTUS healthcare announcement will be released.

The $9 billion number was actually scooped first by independent journalist Teri Buhl earlier this week.

Losses on JPMorgan Chase’s bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation.

..

The bank’s exit from its money-losing trade is happening faster than many expected. JPMorgan previously said it hoped to clear its position by early next year; now it is already out of more than half of the trade and may be completely free this year.

As JPMorgan has moved rapidly to unwind the position — its most volatile assets in particular — internal models at the bank have recently projected losses of as much as $9 billion. In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion, according to a person who reviewed the report.

With much of the most volatile slice of the position sold, however, regulators are unsure how deep the reported losses will eventually be. Some expect that the red ink will not exceed $6 billion to $7 billion.

CNBC (Andrew Sorkin) is saying he reckons its more likely to be $4-5 billion. Lets wait and see.
There is always MaxKeiser’s view on what is happening.
As we’ve been saying for two years. JPM uses it’s own stock to collateralize naked silver short positions (echoes of Lehman and Enron). My analysis has concluded that liability from a rising silver price vs. loss of collateral value of the stock renders JPM’s balance sheet null and void when JPM’s stock price drops below the price of Silver. We’ve only seen this a couple of times since I made this call two years ago, BUT NEVER ON A SUSTAINED BASIS of more than a day or so. When the price of Silver popped over JPM’s stock price, the London desk quickly fabricated a few billion fresh naked silver shorts to tamp silver’s price down. Given this week’s revelations regarding JPM’s reckless balance sheet incineration the ‘crash jp morgan, buy silver’ trade has never been more important as a way to take down this financial terrorist. The SLA has been winning battles all along. Now we are poised to win the war as well. Bye-bye Jamie. NOTE TO HEDGE FUNDS: Sell JPM’s stock naked to Hell. This is the easiest money you’ll make this year.

 

Utah – Gold and Silver Now Legal Tender

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Utah has become the first state to bring in gold and silver as legal tender. Another small step away from fiat currency as people’s confidence in the monetary system breaks down. 

After months of public outcry over Washington’s out-of-control fiscal and monetary policies, Utah Governor Gary Herbert signed into law Utah House Bill 157 Currency Amendment allowing gold and silver bullion as legal tender within the state to settle retail transactions and debts.

Though several other states have proposed similar legislation, Utah becomes the first state of the Union to actually pass a law providing ammunition to fight back the ill effects of the Federal Reserve’s malicious debauching of the U.S. dollar.

The symptoms of rapidly rising costs of life’s necessities can be directly attributed to 10 years of money supply growth, not seen since the disastrous 1970s.   As of April ’02, M1 money supply has skyrocketed 77 percent to $2.22 trillion for April of this year.

……

Other states may soon follow Utah’s watershed legislation—and quickly.  In its annual World Economic Outlook publication, the International Monetary Fund (IMF) noted that a Eurozone breakup could rapidly disintegrate into a “full-blown panic in financial markets and depositor flight.”

 

Source: EFTDailyNews

Silver Manipulation Attempt Fails

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Excellent news for Silver when a paper contract attack on silver price failed. The cartel dumped 102.5 million ounces in paper silver over 7 minutes in an attempt to manipulate the silver price down but failed.

Silver has put in a monster rally this week, and much to the cartel’s dismay, was preparing to close the week above $35.50 today, preparing a break-out next week that could potentially fill the gap from the September smash to $40, and see silver off to the races back to challenge the all-time nominal highs near $50.  Obviously, the cartel stepped in with a massive paper raid to prevent such a bullish weekly close.
That’s where things got interesting and likely induced more than a few Myocardial Infarctions today among JPMorgan execs.
Check out the following price and volume chart screen shot on this 1-minute silver chart courtesy NetDania.
Notice the massive volume that began at approximately 14:47, with 4,000 paper contracts dumped on the market in a single minute, followed by 2,500, 1,800, 3,200, 3,000, 2,900, and 3,100 over the next 6 minutes.

 

Back Of Envelope Calculation Of Gold Sales

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Calculations taken from an Eric Sprott presentation.

And perhaps I can explain it best just by comparing ‘10 to ‘11.In ’10 we had the IMF theoretically selling 400 tons of gold.This year we have central banks buying 400 tons of gold.That’s an 800 ton change in one year in a 4,000 ton market.We’re getting data outta China which suggests that their purchases might be up 3 or 400 tons this year.

So with those two items I can come up with one 1,100 tons of change year over year in a stagnant market that provides 4,000 tons available.Where could the gold possibly have come from?And I have no other conclusion to come to other than to believe that central banks are surreptitiously continuing to lease out their gold.And then when they lease it out they essentially lease it to a bullion dealer who sells it to the real buyer and the bullion dealer owes it back to the central bank who still says they own it but of course getting it back won’t be easy because of the shortage.

And what about China, as figures show demand is clearly rising

this shows the gold imports that mainland China receives from Hong Kong.And this date is up to November of this year.And you can see the stunning change in demand whereas most months was below 20 tons, we’ve had a series of month where it goes 20, 40, 50, 60, 80 and the latest month which was November was 102 tons.As I mentioned, the annual production of mines is around 2,700 tons, 350 that’s produced in China; none of it leaves the country.The world has 2,350 tons left to buy which is less than 200 a month and China bought 102 tons of that last month.

Pension funds have been massively short of gold in their portfolios as a hedge in recent years and are now due to beef up their holdings.

the World Gold Council that basically said studies were done showing that even a pension plan that had minimal amount of risk should have two or three percent of their investment in gold, medium risk would be four to nine, max risk or high risk would be at ten percent.And just to put that all in reference, the amount of gold in gold stocks that is available in the world’s investment pool today is .75 percent of all assets.So even just to get to two would imply a huge influx of buying in both bullion and equities from that sector.But the work stands up to analysis and I think ultimately the pension fund advisors will have to go there.

Then there’s gold’s relationship to silver in its price.

A company called Gold Money that many of you might know that’s on the Internet, their sales of gold and silver are just about equal and I’m unofficially I think the Royal Canadian Mint’s about 1.5 to 1.And all I can suggest to you is if people keep buying gold and silver at a 1 to 1 ratio, there’s no way in this earth that the price could be 55 to 1.In other words you’re buying 55 times more silver and even just the relationship of silver to gold, there’s 80 million ounces of gold available per year.There’s 900 million ounces of silver.That would imply something like 11 to 1 ratio but half the silver’s used in industry.So it really is something like 5.5 to 1 is the ratio of what’s available and yet the prices are trading at a 55 to 1 ratio.

 

Using History To Value Silver

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Excellent video to help establish the true value of silver. Taking examples from the past history, 1 days labour(12 hours) was equivalent to 1/10th ounce. By todays money if you take average wage of $8 per hour then

$8 x 12 hours = $96 (1 days labour) <=> 1/10th ounce.

=> $960 per ounce.

 

Intense Demand For Gold In London – Nobody Trusts The Comex

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KingWorldNews conducted an interview with “LondonTrader” about the demand for gold in London which recently has gotten intensive.

The demand for euro gold here in London is so intense it’s shocking to some of the players.  This is what has left some market participants in the US wondering why the price of gold has risen along with the dollar.  It’s because demand in the eurozone is unimaginably strong.  The euro physical gold demand is off the charts and it is creating shortages for metal, in size, here in London.

The physical gold market is actually being drained by euro gold buyers.  People are converting their euros to gold and there is only a finite amount of physical gold available.  Again, that’s why you are seeing the dollar and gold rallying together.

In the case of silver, because of many short positions (to manipulate the price downwards) there has been much silver borrowed from SLV to cover these.

“We’ve still got a very, very compressed spring because the shorts are still trying to defend their positions, their naked short positions in both the gold and silver markets.  As an example, in the silver market, you saw that type of activity in the silver ETF (SLV).  Shorts borrowed another 3 million ounces to cover immediate delivery concerns.  There are 25 million ounces now borrowed from SLV.  It is getting worse and worse for them.”

“They are naked short on the COMEX and to meet immediate delivery demand they are having to borrow it from the SLV.  It is still unwinding and it’s still got a long way to go.

Silver is in backwardation (future price is high than spot price, implying investors demand for physical delivery is high)

There are huge premiums for size (large tonnage orders) in silver and you are going to wait 3, 4 or 5 weeks for delivery.  There is constant backwardation into the March futures contract.  For the most part, the bid on silver spot has been higher than the ask on March futures.

The most interesting thing that came out of the interview it that none of the international trading funds trust the Comex after MF Global fallout.

“You now have international funds, whose compliance departments are saying to them, ‘You can no longer trade on the Comex because the CME did not back client accounts.’  There are a tremendous number of international funds and hedge funds that can no longer trade on the COMEX as of the first of this year because of compliance reasons and no one is talking about this.  This is huge news.

Finally, these is still a massive demand from the Chineese people and Government as they push to be the worlds reserve currency.

The Chinese are long-term thinkers and they really don’t care whether they are paying $1,600 or $1,700 for gold.  What they do is get the best price they can.  When the new floor eventually becomes $1,700, they will buy everything available at that price.  When it becomes $1,800 they will buy at that price.  They are just looking to accumulate gold and they are never sellers, never.

There are two things here.  Yes, China wants a cheap gold price and they’ve been enjoying the fact the gold market was taken down.  They have recently taken another roughly 150 tons away from the Western central banks.  The Western central banks essentially donated that gold in an attempt to prop up their paper currencies.  Yet again these traitorous Western central bankers have given away more power. 

I see gold as power and once again they have given it away to the Eastern Hemisphere.  The Chinese continue to laugh.  As much as the Chinese would like to have a cheap gold price and have this manipulation keep going, they also want to bring the renminbi to the center stage.  

To them, it’s more important the Chinese currency becomes the world’s currency.  The dollar, despite the latest rally, is dying, we all know it’s dying.  So, the Chinese are moving to become the international currency of the world and the best way to do that is through gold.  It’s a very clever tactic.  Every time more gold arrives in China, the more their currency is backed, the closer they move technically to becoming the world’s reserve currency.”

Silver Shortages

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KingWorldNews did an interview with a London trader on the shortage of physical silver. The help with filling orders the SLV has been tapped.The trader was quoted as saying

“It is so tight, the silver market is so tight that we’ve been waiting three weeks plus, before this takedown, for deliveries of size to arrive.  I’m talking about tonnage orders.  This is also key, most of the silver being delivered was refined after the orders had been placed, and again, that was before the takedown.  You can just imagine how long the wait times will be going forward.”

There is nobody in COMEX silver contracts anymore, other than casino players.  The only way they have been able to keep silver depressed is by borrowing silver from SLV to meet immediate demand.  That’s the only reason silver isn’t trading $10 to $15 higher right now.

There isn’t enough silver for investors to buy (in large amounts) so they have been using SLV as a flywheel.  SLV is over 20 million ounces short on the silver they are supposed to have in the vaults to back the shares which have been issued.  The silver isn’t there.  So there are people who purchased SLV to own physical silver, but all they have is shares that aren’t backed by the physical silver.

… on manipulating prices…

Part of managing the price of silver recently has been for the central banks to attack the gold market.  But what is interesting is how this manipulation of the gold price was effected.  Obviously, the bullion banks, which are working with the central banks, have inside knowledge as to the timing and just how much gold is going to be available to them. 

So, in order for the bullion banks to maximize the effect of the physical gold they get from leasing, they add high scale paper leverage.  They then short-sell just enough tranches of COMEX contracts to surgically take out three important support pivots….

What tactics are used to suppress physical demand?

“Each of those important support pivots that everyone is watching, like the 50 day moving average and so on, each one of those are taken out in the access market in the quiet trading, overnight, on three successive days.  In other words, they take out these three important pivots, which turns the momentum buyers into sellers.  It also gets a bunch of funds to start selling as well.

So using as little ammunition (physical gold) as possible, and in thinly traded markets, they take out these pivots.  They smash the price, but leave just enough physical gold for going into the fixes because the smart buyers are saying, ‘I’ll take it at this price.’  So, as we go into the fix, they’ve provided just enough physical to satisfy as many of those buyers as they can.  They then smash it right after the fix, again, with paper. 

That’s what’s happened with gold and it’s the reason it has been manipulated down to these levels.  It’s the only way they could do it, and it’s a sign of absolute desperation when central banks are willing to risk giving bullion banks gold they will never, ever receive back. 

..and of course China is taking advantage of cheap prices and taking delivery as should YOU.

These central banks had to be in desperation to allow this borrowed gold to be absorbed by foreign entities.  They needed to raise dollars in a hurry and they are extremely afraid of gold going through the roof.  I was very, very surprised they got as far as they did (driving gold lower).  They had to use an awful lot of gold to do it.”

Anyone For Physical Silver ?

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Above ground Supply in Months –

1950 – 140 months supply
1970 – 70 months
1990 – 55 months
2010  -11 months
(700 million ounces of above ground silver ounces)

This translates to a 93% collapse in global inventory

Where Silver goes

Electronics
1999 100million oz
2011 250 million oz

Solar
1999 not reported
2010 75 million oz
2014 130million oz projected.

Investment
1986  10million oz
2010  35million oz

a new mine takes 10yrs from discovery to product an oz.

Nevada produced
1997 25 million oz
2010 7.3 million oz

COMEX trades of paper silver are 100 times physical silver
1bn oz per day traded in paper

So have you got yours yet?

Silver Bears – Part 8

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Don’t you just love our little buddies. Can’t wait for part 9 already 🙂

Summary:

Source in Dept. of Homeland security syay all out war to get physical metals is on. They don’t care about currencies or bonds.

European gold is hel in New Yeork Fed.

IMF is gearing up for paper war on metal and plan to manipulate market with SDRs.

Paper price is irrelevant.

Central Banks are fighting themselves for the last ounces of gold, then prepare for violence.

 

Euro zone – two outcomes

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With the current demise of the Euro zone there appears to be only two outcomes

1. Eventually descends into chaos and breaks up. Euro zone countries are carrying too much debt to GDP and haven’t a hope in hell of growing their way out. 😦

2. ECB = CTRL+P. The lender of last resort prints money.

Personally I wouldn’t mind going back to the old Irish Punt but make sure you are protected by transferring your wealth into physical gold and silver. Remember the Argentina Peso dropped massively in value when they finished the peg with the dollar in 2002.

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