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Wednesday, September 03, 2008

New Low Gold Short Position

New low gold short position for Goldman Sachs on the Tocom exchange in Japan.

Yesterday, September 2, Goldman Sachs got out of 1,612 short contracts and added 351 long contracts to bring their long position to 1,049 contracts (a 50% increase in one session) and Voltheir net short position to 2,537 contracts (a 44% reduction in one session).

This is a new record low for their net gold short position since these statistics started being tracked in January of 2006.

Goldman Sachs is running for the hills.

Their net gold short position in the middle of 2006 was a little over 50,000 contracts. Since then, it has been trending down in a channel so that they should have a zero net short position by November of 2008 if the 2+ year long channel and down trend line holds.

Volatility can work both up and down. Is there going to be an explosion in gold and silver price to the upside?









Gold made a nice recovery on Tuesday, the yellow line, almost a "hammer" (bottoming action) on a bar chart. And, it left a nice big gap to be filled. After today, the USD is now up 5 days in a row and made an upside down hammer on the fifth day. Topping action.

Wednesday, August 27, 2008

Gold and Silver Outside Days



Yesterday, Tuesday, gold and silver made outside reversal days. These are bullish.

Thursday, August 21, 2008

Gold and US Dollar Outside Days

On Tuesday (the second price bar from the right side of the graph), gold made a very bullish outside reversal day (to the upside):














Also, on Tuesday (the second price bar from the right side of the graph), the US dollar made a very bearish outside reversal day (to the downside):
















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Three interviews of Jim Rogers:

"Rogers first made a name for himself with The Quantum Fund, a hedge fund that’s often described as the first real global investment fund, which he and partner George Soros founded in 1970. Over the next decade, Quantum gained 4,200%, while the Standard & Poor’s 500 Index climbed about 50%."

March 17th, 2008
Snapshot From Singapore:

April 8th, 2008
More Pain for the Greenback, and the Failure of the Federal Reserve

August 19th, 2008
Jim Rogers Predicts Bigger Financial Shocks Loom, Fueling a Malaise That May Last for Years

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Good 'ol Aubie Baltin includes some good history from the last gold bull market:
21st Century Gold Rush Re-Examined

" ...
Some examples were: Lion Mines – 1975 price $0.07 / 1980 price $380. YES, that’s right it’s not a misprint - you could have bought 10,000 shares of Lion Mines in 1975 for around $700 dollars and if you held on for the whole 5 years until January 1980, you could have netted a total profit of around $3,799,300. Not bad ay!!!!! A few others were Bankeno – 1975 price $1.25 / 1980 price $430; Steep Rock – 1975 price $0.93 / 1980 price $440; Mineral Resources – 1975 price $.60 / 1980 price $415; Azure Resources – 1975 price $0.05 / 1980 price $109. The Majors also performed superbly well, but nothing compared to the Juniors. WARNING: The Juniors, although offering great potential, also contain much greater risk as most of them ended up falling back to zero. So be careful. ... "

Human nature has not changed in 5,000 years or so, so why should it change in the next 5-10? Thus the value of studying history. Gold and the US dollar outside reversal days are important sign posts, gold and silver bullish sign posts

Saturday, August 09, 2008

Screaming Gold And Silver Buy Points

Gold and silver are at outrageously good buying points / levels.

Gold is down 6 days in a row, plus it gapped down on the 6th day, plus it is down to it's previous low in this base building action. It's probably forming a big strong "W" (double bottom) base.







Silver is also down 6 days in a row, plus it gapped down on the 6th day, plus it is down to the bottom of a rectangular downward sloping flag.









Buy!!, Buy!!, Buy!!










Gold and silver are at screamingly great buy points / levels.

Sunday, August 03, 2008

Zimbabwe Knocks Off 10 Zeroes From Z Dollar

Zimbabwe knocks 10 zeros off currency, the Zimbabwe dollar. Their dollar now has a single 1 on it.

http://news.bbc.co.uk/2/hi/africa/7532702.stm
...
Only last week, the government introduced the Z$100bn note.
...

... good video of an industrial center that is now a ghost town, of the reporter buying food in a supermarket with many empty shelves in Zimbabwe.

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Meanwhile in the US:

The government raised it's debt **limit**. It increased by $US 1,650 Billion since September 27, 2007. That's in just 10 months. How long did it take the US government to make in increase like this one? Try just under two CENTURIES (1787 - 1984). Don't think straight trend lines. Think compound curves.

Remember, a USD cannot be created without a USD's worth of debt being created at the same time. The thing is with the nature of the USD system and just about the rest of the world is that the dollars to pay the interest on the new debt/dollars created, have yet to be created, thus the compound curve, pressure to create more debt/dollars so interest in the future can be paid, and the ultimate destruction of the system.

The US, Zimbabwe, where ever debt/fiat tokens get out of hand, gold and silver are savings protection.

Sunday, June 15, 2008

US Dollar Creation

Federal Reserve US dollar creation lone worker at his iFed Task Manager ready for work:















































































Really! It just takes one guy to create 100s of billions, trillions worth of US dollar digital bits.


























































Chart source: http://nowandfutures.com/key_stats.html

John Williams' Shadow Government Statistics:
http://www.shadowstats.com/alternate_data

It does take more workers than one if they are paper dollars.


The really dark side of it all is the fact that they can control down to the penny, and tax down to the penny, and monitor down to the penny your every digital dollar / penny spend or receipt. That your digital "stuff" as George Carlin would probably call it is not actually **owned** by you when it is digital, that you are allowed access or use of your "stuff" to the extent that they think it is ok for you, how they think it is ok for you, and when they think it is ok for you. That is of course unless you have control over the server and access to root. Do you? Didn't think so.





*************** All your "stuff" belongs to us. ********************


https://web.da-us.citibank.com/tandcFiles/printable_cashedge.htm

...

Limits on IIT Transfers
Type of Limit--Standard Transfers------Next Day Transfers

Incoming
Daily------------$100,000------------------$1,000
Monthly*-------$100,000------------------$2,500

Outgoing
Daily------------$2,000--------------------$1,000
Monthly*-------$10,000-------------------$2,500

...

Now do you still think you **own** your "money" in a bank?


Aaaaaah nooooooooo, my stuff is trapped!








That's the plan, man!

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"I feel like we're inside a Civilization game and there's some f*cking idiot playing." --Michael T. McNamara

"...as we transfer our whole being to the data bank, privacy will become a ghost or echo of its former self and what remains of community will disappear"...Marshal McLuhan

"Civilization is the progress toward a society of privacy. The savage's whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men."--Ayn Rand

"The most potent weapon of the oppressor is the mind of the oppressed." - Steven Biko

"Liberty means responsibility. That is why most men dread it." - George Bernard Shaw

They are good reasons that the Fed and its operations are illegal, provides for big time theft / robbery, not needed, should be abolished and will end up broken.


"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it." - Frederic Bastiat, 'The Law'

Hayek's trilogy on Spontaneous Order:
http://www.amazon.com/Law-Legislation-Liberty-Rules-Order/dp/0226320863/
http://www.amazon.com/Law-Legislation-Liberty-Mirage-Justice/dp/0226320839/
http://www.amazon.com/Law-Legislation-Liberty-Political-People/dp/0226320901

Any central bank, not just the Federal Reserve, is simply not needed. Is simply organized crime. It only exists for the benefit of a minority. Of course a dumbed down majority is needed to pull off a stunt like this, which is the point to having government schools, that government schools are the 10th plank of the communist manifesto.

"Gold is absolute objectivity. It is blind, like justice. It has no politics and ideology, no likes or dislikes, no friends or enemies. All it recognizes is its possessor, whom it serves faithfully so long as he has it." -- British historian Paul Johnson quoting Charles de Gaulle

"A government that robs Peter to pay Paul can always depend upon the support of Paul." -- George Bernard Shaw

"All the perplexities, confusion and distress in America arise, not from defects in their Constitutin or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation." - President John Adams (1735 - 1826)

"The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it." -- John Kenneth Galbraith,
Money: Whence it came, where it went - 1975, p15

There are perhaps 5% of the population that simply can't think.
There are another 5% who can, and do.
The remaining 90% can think, but don't.
-- R. A. Heinlein, The Moon Is A Harsh Mistress

Thinking is man's only basic virtue, from which all others proceed.
And his basic vice, the source of all his evils, is that nameless act
which all of you practice, but struggle never to admit: the act of
blanking out, the willful suspension of one's consciousness,
the refusal to think -- not blindness, but the refusal to see; not
ignorance, but the refusal to know. It is the act of unfocusing
your mind and inducing an inner fog to escape the responsibility
of judgment -- on the unstated premise that a thing will not exist
if only you refuse to identify it, that A will not be A so long as
you do not pronounce the verdict "It is." Non-thinking is an act
of annihilation, a wish to negate existence, an attempt to wipe out
reality. But existence exists; reality is not wiped out, it will merely
wipe out the wiper. By refusing to say "It is," you are refusing to
say "I am." By suspending your judgment, you are negating your
person. When a man declares: "Who am I to know?" -- he is
declaring: "Who am I to live?" - Ayn Rand

"In a separate lecture, Hayek noted that, "I am more convinced than ever that if we ever again are going to have a decent money, it will not come from government: it will be issued by private enterprise, because providing the public with good money which it can trust and use can not only be an extremely profitable business; it imposes on the issuer a discipline to which the government has never been and cannot be subject." - F.A. Hayek

"The possibility of a discriminatory capital-gains tax on gold
'profits,' or even of outright confiscation, cannot be wholly
dismissed. We must remember that in 1933, when private
citizens began to exercise their clear legal right to convert their
Federal Reserve notes and gold certificates into gold, President
Franklin D. Roosevelt suspended the conversion, ordered the
citizens to exchange their gold for paper money, and made it
illegal for private citizens to hold or own gold. In other words,
the government not only broke its solemn and explicit pledge to
convert its notes into gold on demand, but treated the holder
(and dupe) who had taken the pledge seriously as the real
culprit." - Henry Hazlitt

Thursday, May 22, 2008

Gold Doing Its Job

Gold doing one of its jobs; as a safe store of value.

(Open in new tab to enlarge)
Good thing because the USD is falling down on the job particularly as a reliable measuring stick, let alone as a store of value. Since the USD is failing at a faster and faster rate, at some point they're going to tell it to "go sit in the truck". It gets told that when it can not do its medium of exchange job anymore.









(Open in new tab to enlarge)
“... sound money protected the citizenry against the predatory inroads of Government.” - Von Mises

"When nothing happens for a long time, people begin to assume that nothing ever happens. But, sooner or later, something always happens." … Steven Lagavulin

http://www.mises.org/books/bubbleworld.pdf
"In many ways, as will appear, the folly of the lender has exceeded the extravagance of the borrower." - A BUBBLE THAT BROKE THE WORLD, Garet Garrett


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Some recent tidbits:

About bags of junk silver ... 10,000 dimes in each bag of $1,000 face value:

" ... If things get really dicey, and we have to live through a currency
crisis or a bank holiday, you can always barter a silver dime for a
gallon of gas. In 1980, when silver hit $50, there were gas stations in
every major city in America offering to swap a gallon of gas for a
silver dime. That will happen again."

"The story that appeared on Monday referring to the Oregon gas station
accepting silver quarters as payment reminds me of the time I took a
trip to visit my parents in Florida during the last energy crisis in the
late 70's. All along the route (Montreal to Miami) we had to wait in
long line-ups on the American side of the border for gas, but as luck
would have it, I was always able to get some. While in Miami I found it
strange that many stations were not open for business, but I never gave
it a second thought. A few days into my visit, radio announcements were
talking of emergency rationings and that car plates with odd last
numbers could line up at the pumps on odd numbered days, while even
numbered on even days. Waiting in a long line-up for my rations, I saw
the gas attendant approaching all the cars ahead of me and talking to
the drivers. I remember thinking that he probably was telling everyone
that there may not be enough gas to go around. When he got to my window
he asked if I had a silver dime. I asked him why and he said that if I
had one, he would pull me out of the line-up and fill me up. I asked if
this was a joke, but no, he was serious,a dime for a total fill-up.
Several minutes later I saw through my rear view mirror a car pulling
out. The attendant led it to the next available pump and filled it up.
There were a few clients cursing, but the attendant ignored them.
Needless to say, I was not able to get gas that day.With just four more
cars to go, the tanks ran dry. That was my first exposure to the
barbaric metals. It's amazing just how precious, precious metals really
were in a crisis. Even the gas jockey understood."

************

"Without some attachment to harder values, the half-life of paper money is Hobbesian -- "nasty, brutish and short"."

"It is well enough that the people of the nation do not understand
our banking and monetary system, for if they did, I believe there
would be a revolution before tomorrow morning." ... Henry Ford

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Gold, "... taking care of business.", on the job, doing its job, on time, doing it right.

Monday, May 19, 2008

Inflation Adjusted Silver Price Charts


Jason Hommel's programmer, Shelby Moore, has produced two USD ** price ** (not supply, which would be M3) inflation adjusted silver price charts. One using the US goverment's rigged bogus estimates of price increases since 1975, and the other using realistic Shadowstats.com's use of government statistics http://www.shadowstats.com/alternate_data
estimates of price increases since 1975.

For those new to silver and not up to speed on silver basics, here is a silver review from December of 2007.

Here is a review of silver versus gold.


Most people in the world are not aware of the fundamental silver story. When just a tiny percentage of people catch on, the silver price will be a sight to behold. You can bet on it because of all the USD that has been created since 1975. There were about maybe $1.1-1.2 trillion of them then. Look at how many there are now. Most are still outside the US and in financial instruments. Wait till they start heading back to the US and start coming out of financial instruments looking for a home in real stuff, or atoms related financial instruments, like silver stocks.

http://nowandfutures.com/key_stats.html

Silver is still the Rodney (I can't get no respect) Dangerfield of metals.
















Buy! Buy!













ShadowStats.com founder John Williams on M3 Money Supply:

"....
It's going to be the .. probably the worst business cycle seen since the great depression
...
I believe that it will evolve into a depression.
...

What Mr. Bernanke is assuring us ... a hyperinflationary great depression ..."





A fun graphic:
http://www.phile.com.au/SecTreasAdvice.jpg

However you want to adjust today's USD silver price for reality, it's a screaming steal. "Just this side of stealing.". Money, currencies and tokens are:

1.) Mediums of exchange
2.) Stores of value
3.) Units of account/measure

Radically increasing the supply of USD has radically distorted the USD's unit of account (measure of value) ability, thus silver's really low USD price. And it's not just silver's price that has been distorted. People need a unit of measure that stays constant over time. If it does not, future financial, business, economic calculations get distorted. Well, distorted, big time, they have become, thus big time re-adjustments still to be made, as in another Great Depression in the US.

Sunday, May 18, 2008

You Need Gold and Silver Because of the System Break Down That Paul Volcker Sees As Happened

Paul Volcker says a system break down has happend while providing testimony to Congress. This breakdown is not over and gold and silver are you major protectors. The situation is going to get a lot more ugly than it is now.

He uses the words "broken down" "break down".

What are the amounts of otc derivatives potentially involved? Try well over 500 trillion USD worth. If central banks around the world try to create out of thin air not even half that much to try and save the butts of the boyz, all hell breaks loose.

"We are in the most difficult and complicated circumstances...

...

I would emphasize the point that we often lose sight of.
This country has spent some years spending a lot more than it has been producing. It's been carrying out a higher level of consumption relative to GDP than we can sustain.

...

In the forground is the new financial system that a number of you have commented on, less relying on banks, more relying on the open market, a more fluid system, certainly heavily engineered. You and others have said, Mr. Chairman, that you look to more tranparency. It's hard to argue against tranparency but I have to tell you this new financial system with all its enormous complexity gives rise to a certain opaqueness. It is almost impossible to penetrate. So I don't think we're gonna find all the answers in transparency.

There's kind of a symbiotic relationship between this new financial system and the unbalanced economy that the new financial system was so fluid and so effective in some ways that it enabled us to finance the excess in spending. We didn't have to save when people thought that they had other ways of finding money. The sub-prime mortgage phenomina is the prime example of financial engineering leading to a way to finance consumption. Well, that's broken down. And to over simplify I think we've seen a system in which the mathematicians have basically have taken over, the financial engineers.

And you combine that complexity and opaqueness with a super charged compensation system and you had great incentives for risk taking. And at the same time you had a basic break down I think in the discipline of creditor houses. That the system developes in a way that it is trading dominated. People didn't worry so much in the quality of the paper so long as you could pass it off on someone else in a hurry. And there was a lessor sense of vulnerability. And I .. a general sweeping conclusion I would have to say that under stress, this new system has failed the test of the market place. We are here because the new system has in effect broken down. That put the Federal Reserver front and center in dealing with a crisis. It obviously has reacted in unprecidented ways.

...


When things are going well, no one wants to be regulated.
When things go bad everone asked the regulator where were you.

But there have been breakdowns in supervision and regulation. I don't think there is any doubt about this.

...




Of course being one of the boyz himself, he fails to mention the most fundamental problem of the new (since Bretton Woods in 1971) system, everyone in the system never gets paid, no settlement. They just get to use a medium of exchange based on debt. This new system that the world has never experienced will fail in a really big way because it tries to deny the fundamental facts of life.


(Open in new tab for larger view)
http://www.frbsf.org/news/speeches/2008/charts.pdf
Page 18 of the .pdf file.

The Fed's balance sheet has be deteriorating since taking on all kinds of junk collateral for loans to various financial entities. Get your dog to sign a million dollar I.O.U and see if the Fed will take it as collateral for a loan to your dog.

When the Fed runs out of US Treasuries for assets, what they want to do is to be able to tell / order the Treasury to issue more debt, send it over to the Fed, and the Fed will use it to issue more US dollars since that debt is an asset on the balance sheet of the Fed. 'course the Treasury will have to pay interest to the Fed ... or ultimately the US tax payer will have to pay the interest and other dollar holders through the process of loss of stored value in USD due to USD devaluation due to the increase in supply of USD. Virtually no people in the US are aware of this at the moment, that they will be bailing out the boyz, the gangster banksters. Wait till they find out, it won't be pretty.

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Ron Paul tells Paul Volcker what really is needed:



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"Last call to board gold train at under US$1,000"
http://www.sprott.com/pdf/investorsdigest/digest.pdf
Article by John Embry, chief investment strategist at Sprott Asset Management

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Currency War (a best seller in China)

"6th printing in two months, sales breakthrough 100,000 copies, still in short supply, -- the book "Currency war" in the financial services sector has brought spotlight.

Song is not denying his view - all Chinese families should produce 3% -5% of revenue to purchase gold in kind, to add their wealth with insurance, because when real turbulence come, we can guarantee wealth, rather than any government-issued letter with notes. In fact, when the government trusted, issued currency is valuable, and when the government was not strong sense of trust, it will devalue the currency, or even worthless."

http://www.thechinaweekly.co.uk/chinaweeklyspecial/peopleoftheweek.html

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Gold and silver are major protection from what's coming. Even if Paul Volcker does not say all this, he knows it. Watch for panic at some point as people try to get their hands on gold and silver. Because the new system is so flawed, it looks like it will have an historically very short life.

Thursday, May 08, 2008

Trader Jones on Gold and Silver

Veteran gold and silver trader Jones comments on the need to own gold and silver coins in lieu of paper money:







...
"The average American doesn't know what money is, the average Brit, average Aussie, anybody in the west."
...
"... the thing about this money is that it holds its value."
...
"... only about 5% is paper money. The rest are computer entries."
...
"... most Americans have never held a gold coin. Don't even know what it is. ... gold. Solid honest money."
...




" ... The Chinese ... in asia are buying gold with both hands. They're accumulating dollars and buying gold."

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Don't expect to later on buy gold and silver when ever you want and in what ever quantities that you want.