Month: Jan 2014

When the Music Dies…

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“Bye, Bye, Miss American Pie.
Drove my Chevvy to the Levy but the Levy was dry.
Them good ol’ boys are drinking whisky and rye.
Singin’ this’ll be the day that I die.
This’ll be the day that I die.
The day, the music died.”

(Apologies to Don Maclean if the lyrics are not quite right)

The Gold market is at the moment a bit like the old parlour game of yesteryear, when we all played ‘Musical Chairs’ after dinner on Sundays, before wall to wall TV, and other distractions began to isolate us from each other – except via digital means.

The game – for those who don’t know – involves putting together enough seats for all the participants, while playing music, and then removing one chair.

When the music stops, the last one to sit, is out.

The game continues until all the participants are out except one, as each turn gradually reduces the number of chairs to one.

The gold market is gaily playing the game, blissfully unaware that the gold (Chairs) are being continually reduced and one day soon, the Bullion Bank Gold Vaults, will be empty, and one of the players will want to walk away with their chair.(Gold) and the chair won’t be there.

The day that happens, will be like the day in the song above.
For those unaware the music was a reference to the airplane crash on February 3, 1959, when Buddy Holly, Richie Valens and the other musicians disappeared off the radar on a snowy journey in the Mid-West.

The evidence is stacking up for all to see. Those with even a small stash of Gold and silver will be the lucky ones when the music stops.

Exhibits A, B, C, and all the rest are from a web-site I visit on occasion, King World News,  which in recent days has been just full of evidence that the number of chairs is quietly, and incessantly being reduced, as the Chinese take all the chairs east.

The day the music stops, will be like the story of the Emperor who was wearing no clothes, until the small boy pointed out the truth.

Gold (and silver) will be worth a whole lot more, no matter what Harry Dent Junior says:

See below:

“A 42-year market veteran who predicted the recent spike in gold ahead of time spoke with King World News about the catalyst that is going to create a massive spike in the price of gold.  John Hathaway, who is one of the most respected institutional minds in the world today when it comes to gold, and whose fund was awarded a coveted 5-star rating, also included a fantastic chart.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/1/27_This_Will_Create_A_Massive_Spike_In_The_Price_Of_Gold.html

Some more interesting information can be found at the links below:

This is how Gold will trade as Inflation and Deflation fight it out.

What is going on with Germany’s Gold in fort Knox?

Stock Market Crash – 2014?

As I’ve mentioned on a number of occasions. When that happens, Gold, Gold miners, Silver and Silver miners will be worth several multiples of what they are now.

During the 1970s, which is the only recent time we have to compare it against. Gold went up 25 fold. From its base at $35.00/troy ounce in 1971, to 1980, when it became $850/oz. Silver went up over the same period 31 fold – 31 times… Just do the Maths…

Those who had bought in the period when it was disconnected from the monetary base on August 15th 1971, the day that Richard Nixon – “temporarily” closed the Gold Window, were ecstatic. Since then the monetary base has ballooned.

The charts in some of the links above should give the reader some idea of by how much, and how far the price will likely go.

If I might hazard a guess? I’d say circa $8,500. I chose this price back in early 2004, when I began reading about the economy in depth, I haven’t changed my mind in the intervening 10 years, and Silver I feel will get to circa $500.

Although many perceive silver as an industrial metal, it is used in very small quantities, and is constantly being used up. Historically it was more plentiful than Gold, by a ratio of circa 16:1. However, in the tech-sphere there is no alternative, and it has almost 10,000
uses – More than any other substance on the planet, apart from oil.

Seventy years ago, above ground stocks were five time greater than Gold. The reasons were mostly because it had been used as money for thousands of years, but after the depression years, governments increasingly sought to eliminate it from the currency. (Read “The Coming Battle” – available FREE – to get the full history)

Silver is an amazing substance – Its light reflectance makes it the undisputed king for mirrors. Its conductivity makes it indespensible for solders and joints in electronics. It is a fungicide, biocide, and viruscide making it increasingly useful in the medical field killing over 650 different bacteria, and with the drive towards solar power, it is used in the plastics, electronics, glass and PV-cells that convert sunlight to electricity. With China and other emerging nations increasing their renewable energy sources, and even Saudi-Arabia, attempting to wean itself off oil for power generation, the demand is only likely to increase.

If you want to buy some silver – there are several dealers. For UK citizens, you can still buy silver coins and bars from Liberty Silver at VAT FREE prices.

And if you are after silver miners, the UK charts have precious few.

Fresnillo (FRES)
and
Arian Silver (AGQ)

Gold Miners are manifold, and account for a large proportion of the FTSE 100, which accounts for why the FTSE hasn’t risen as far and as fast as its US counterpart.

Mwana Africa (MWA)  is a junior miner in several African Countries, with the only Nickel mine, smelter and refinery in the whole of Africa – BNC. After a dismal few years with the global financial crisis, and Zimbabwean economics and politics, the price looks set to rise substantially.

Randgold Resources (RRS:LN) is one of the major miners with a wide array of African Gold mines, and a Market Cap of almost £4Bn.

Fresnillo, is also a producer of Gold.

Rio-Tinto (RIO) is one of the huge global miners, and who own 55% of a company known on the Toronto Stock Exchange as “Turquoise Hill Resources” (TRQ:TSX)

TRQ is a HUGE Gold, Copper and Silver mine currently under construction in Mongolia. Although limited production is already happening.  A fall-out with the Mongolian government a year or so ago, who own 30% of the mine has meant its price has fallen from over $20, to just over $4, but as the price of Gold and other minerals recover, and the dispute with the Government is resolved, the price should recover dramatically. And given the HUGE resource it’s previous owner discovered, the upside is for me, potentially one of the best in the mining space.

Another Gold specialist I was given a hint about is not a miner, but a company that provides up-front finance in return for the right to buy the ore at a fixed price, for the life of the mine. This means their share price is highly leveraged to the price of Gold. Sandstorm Gold (SAND) trades on the Toronto Stock Exchange (TSX) and like RIO the market manipulation of Gold and Silver (and miners) has lowered the price to the point where I feel it now represents an exceptionally cheap opportunity.

For those with a gambling streak, Continental Gold (CNL:TSX) is a junior explorer, but has recently found some excellent results in its drilling campaign to prove up the resources at its Colombian Property

And for those looking for a little more security, the others on the LSE, should offer some upside:

Xstrata (XTA)
BHP Billiton (BHP:ASX),(BLT:LN)
(BHPBF:US)
Anglo-Gold Ashanti (ANG:LN)

I could go on, but any of the major Gold miners should do reasonably well when the inevitable happens.

As always I have to state these are not recommendations.

Please speak to your broker or financial adviser before purchasing, and of course the usual, share prices and other investments can go down as well as up. There are no guarantees in life. But if you like what you read, don’t forget to share it with your friends and associates. (Facebook, Twitter, LinkedIn, Pinterest, or wherever…)

W.

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1920s Revisited? Or the Great Reset?

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The last week has seen me in reflective mood, 

I read a piece by Bob Bauman, who was reflecting on his studies as a student at Georgetown Universaity, back when most men wore suspenders to hold up their socks, and a side parting was de rigeur, with a neat square finish on the neck-line.

The first World War began as many are aware, when a disgruntled Serb, shot and killed Austro-Hungarian Archduke Franz Ferdinand (and his wife – Sophie)  in June 1914.  This particular Serb, was Serbian nationalist Gavrilo Princip, and this was the spark that ignited the war to end all wars, as it later became known.

His (Bauman’s) fascination with World War I though, went back even further, as his father fought in France after enlisting when he was 18 in Baltimore and serving in the U.S. Army’s 29th Division, made up of National Guard troops from Maryland, Virginia and North Carolina.

The archduke’s assassination took place in that part of Europe, where more recently, our own Paddy Ashdown, helped rebuild that battered ancient principality of Kosovo as NATO fought Serb Nationalism once more, but that was far from where the heavy fighting subsequently occurred in WWI. Few people at the time though expected that incident in Sarajevo to be followed by four years of human butchery and bloody turmoil. Most people expected wiser heads to prevail.

BUT, if history has taught us anything, it is that wiser heads do not always prevail.

Yet, at the same time, history is not necessarily destined to repeat itself either -.at least not exactly.

In the run-up to the 100th anniversary of the outbreak of the war, scholars have ruminated on the obvious historical parallel: Is 2014 another 1914? Are we poised for global conflagration?

In an earlier post, I hinted that maybe we were… Japan and China are firing verbal insults across the South China Seas. Japanese factories were recently attacked by Chinese infuriated by the apparent lack of care taken, when the new Japanese Prime MInister – Shinzo Abe, visited a graveyard to honour the Japanese war dead, and has steadfastly refused to apologise. The Chinese have also attempted to impose rules over previously international waters, about notifying flight plans to Chinese authorities. And the U.S. have been getting drawn into this.  The Chinese criticism of Federal Reserve policies has not helped either.

After all, just like in 1914, there are two superpowers, one in decline and one in ascendancy, contending for economic and political dominance.  There is once again widespread dissatisfaction with the institutions and arrangements governing global affairs, paradoxically and perhaps “delusionally,” combined with a belief that “it can’t happen here.”

There is even a far-off (from the U.S.)  geographical flashpoint — the disputed waters and islands of the East China Sea. There, China faces off against a U.S. “proxy,” Japan.

In 1914, it was Austria-Hungary facing off against Serbia, a Russian proxy.

All this historical speculation, not to mention the economic, financial and political differences sees growing potential for another global conflagration, and that got me thinking. The jury is still out on whether wiser heads will prevail this time — whether the superpowers will move toward a meaningful partnership, as Germany and Britain should have done — or whether the U.S. and China repeat the folly of 1914.

Of course the period after the world war was particularly difficult too, because as I have also previously mentioned the time was a transition from phase one of the Industrial Revolution – The  coal and steam phase, to the oil and petroleum phase.

John Galey, famous Pennsylvania oilman, formerly of Corsicana Oil Development Company, was persuaded to return to Beaumont, Texas to search for oil. On January 10th, 1901 Spindletop oil well in Texas, gushed forth, reaching peak production of 100,000 barrels per day; doubling the US output in a single day, and changed the face of industry in the U.S., and the world.

It took 9 days to bring that particular gusher under control, and the rate of production was such, that it influenced other oil companies to explore, and over the next few years some 1500 oil companies were incorporated. Over 100 oil companies jockeyed for position at the Spindletop reservoir alone.

By 1908, Ford was producing the Model T, and hundreds of other car companies had sprung up all over America, Europe and the world. Skoda even likes to claim it was in business before Ford too.

The Steam train though, would continue in production for 40 more years, and in use into the 1960s and even amongst its devotees to today.

But the 1920s which followed all this innovation and conflagration meant we had 3 million unemployed in Britain, with Jarrow marches for work and 20%+ unemployment in the U.S.  In fact so disturbed by this situation was the outgoing Fed Chairman – Ben Bernanke, he fought tooth and nail to stop the economic malaise that caused this misery to so many, and his answer, may yet furnish us with hyper-inflation, as the Germans and Austrians faced after the war.

The parallels to today though are legion.

We’re at the end of the Personal Computer revolution, and possibly the Industrial Revolution phase too, but like the Steam train, they won’t disappear overnight.

Laptops and Desktop PCs still have their uses, The Internet which began life as plain text evolved, and pictures, video, and audio soon followed. The smartphone shrunk the display area and made us all slaves to “Push” technology, as more and more companies – “pushed” their “Apps” (or Mini-Applications) as they were first known. This meant surrendering information so that we couldn’t use facilities anonymously, and the marketing geeks could track our every move to push Ads to us. But it was also in response to people demanding that someone – anyone – solve THEIR problems.

Of course all this logging of IP addresses means the NSA, and GCHQ can follow our every move too.

BUT, the recent trend in Manufacturing which meant out-sourcing manufacturing to lower cost countries in the Far-East, is changing, and looking increasingly likely it will return to western shores.

Like in the early 1900s, America, and possibly the UK too, are undergoing an energy revolution. Fracking – (Hydraulic Fracturing) is changing the game for Americans, as their domestic oil and gas production is making the U.S. one of the cheapest places on the planet for energy . (Perhaps excepting the oil-producing middle-east) and big American corporations are returning home to re-build factories.

Initial estimates were that they would be energy independent by 2017, but it appears they were overly pessimistic. – California alone now produces over 500,000 barrels per day, and the Bakken fields in the North West, the Texas – Eagle Ford shale, and the shale under the Appalachians are making increasingly larger contributions. – Estimates now are that they will be independent by 2015, or earlier..

Of course fracking is not without its critics, and many would not want it going on in their back yard, but when viewed through the prism of the unemployment rate, it might just be worth it. RT has shown video clips of Gas emerging from water pipes in people’s homes, and others have had their silence bought by big checks.

BUT the BIG changes are taking place in Bio-Tech, Metals-Technology, Cyber and Military Hardware, 3D printing and the “Internet of things”.

Whole industries will likely disappear, and as these 3D printers, able to print in a range of materials become commonplace, manufacturing will face an inglorious revolution.

Harry Dent Junior, a major author of books on economics and finance, who calls it “The Great Reset” has written that he expects the demographic timebomb of the West to lower demand for raw materials and expects oil to go to $10, Housing to fall in price perhaps 50% more and precious metals to head lower too as interest rates rise by mid-year causing massive problems for the over-leveraged consumer and manufacturer alike. Since April 2012, the number of Americans retiring reached 10,000 PER DAY…

Europe is also in a similar position, and while Greece had the earliest retirement age in Europe, which is perhaps why they’re in the mess they’re in. He also expects mild inflation first, with a deflation in the middle, and a mild inflation later rather than the hyper-inflation many are predicting. He also feels Gold could fall to circa $750/oz.

However, Inflation is not measured in price terms. If you speak to an monetarist economist it is measured in an increase in the supply of money, over and above the increase in the supply of goods and services. The money supply needs to grow in what is sometimes called the “Goldiocks zone”, but of course, if the amount of money stays the same, the VALUE of money has to change – it goes down when goods are plentiful i.e. a boom (people want more of it), and up when goods are scarce – a bust (people will take less).

Of course, for new industries to emerge, old industries have to disappear, and they don’t always do so in the same places, or with the same people – Joseph Schumpeter called it “Creative Destruction” and it is what drives the world economy.

It also pays for all those expensive politicians and local government workers, military personnel, Police, Fire and Ambulance workers and of course the teachers, hospital workers and road workers who repair the motorways so speedily or not.

It also pays for the huge spending on military hardware, and the nice spy equipment that those nice boys in the NSA and GCHQ get to play with.

So if the money dries up?

The Fed (or BoE, BoJ, PBoC, or ECB) steps in, and pays for it, and you get to pay off the debt with the taxes that you’re going to maybe earn down the road. BUT where does the Fed get it from?.They conjour it up from the printing presses that they own.

Nice work if you can get it.

More on the new industries next time.

If this floats your boat, and you think your friends might like it, don’t forget to let them know, and if you want to drop me a line, you can do so at: WA1Marketing [at] AOL [dot] COM.

W…

 

 

 

The End of Markets?

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I’ve been musing about the world’s stock markets, and reading copious amounts on LIBOR rigging, Commodities rigging, High Frequency Trading, and the like, and reached the conclusion that the markets aren’t all they’re cracked up to be.

Of course when markets first arrived, roughly about the time that money was invented, they were meeting places for Farmers to exchange their wares – a sheep for a pig, a sheaf of wheat or oats, for some hens, A dozen eggs for a hind quarter of a pig, or a leg of mutton.

As time progressed these places became villages, and later towns. By the time of the Romans, there were already cities where people traded their wares, and of course these ballooned when money made placing a value on things much more easy.

By the time of Adam Smith’s “Wealth of Nations” written in the 18th Century, Britain was already a hugely successful trading nation, and well on the way to becoming the most dominant trading nation on the planet.

But it wasn’t just trading that made Britain Great.

People learn who they can trust and distrust from their actions, they learn where they can get a fair deal, and also where if there is a problem,  they can get fair representation and their case heard.

Britain, was at the forefront of all these by having that word “Honour” as part of the code that people no matter where in these islands, would treat others fairly, and they had a legal system that had evolved since the 13th century, and grown up, ever since in 1215, the King was forced to cede some powers to the Lords, and others of the Nobility in the Magna Carta.

A House of Parliament where discourse was carried out, and people respected that despite differences of opinion, they could be heard, and later a police and judiciary to enforce these legal pronouncements (Acts of Parliament)

Business exchange where there is free flow of information means everyone benefits, but in the last ten years, these tenets seem to be breaking down.

The creed in the City of London used to be “My word is my Bond.”.

But now, many in the world of Finance increasingly see their role as to “Pull the wool over the eyes of their clients, colleagues, financial industry participants and regulators”, and the devil take the hindmost.

Markets are like putty – you squeeze them in your hand, and the money (Putty) oozes out elsewhere – Always looking for the easiest most profitable exit.

For the last ten years as Politicians and Central Bankers have attempted to massage markets to their will, we increasingly find they fail to behave like true markets.

Interest rates are held artificially low, LIBOR and Euribor rates are illegally massaged to make then appear less than they actually are.

Commodity prices are manipulated to make those who trade these, believe that demand is less than it actually is.

A case in point is the alleged manipulation of Aluminium, as metals were moved from one warehouse to another, and delivery held up for weeks by the great Banking institutions of New York.

Gold and Silver prices were manipulated down, by the use of derivatives to attempt to fool the markets into believing that demand was lower than it is. And when this failed, they implored (or threatened) India into imposing tighter controls on Gold, by raising import taxes, and duties, and creating legislation that required 20% be re-exported, as Gold and Silver demand ballooned in that country.

Germany was told that it would take 6 or 7 years to return all their gold, and we know that the UK Bank of England lost several hundred tonnes early last year, when their web-site inadvertantly showed they had lost 400tonnes.

And High frequency trading, allowed after the trading rules were changed by the U.S. SEC, in 1998, has also contributed to manipulating the markets. The German financial regulator warned the media that precious metals markets are manipulated, and Deutsche Bank is to give up its seat on the LBMA, perhaps because it is seeking to distance itself from the forthcoming fallout.

The answer to all this of course is to ignore market chatter, and to follow your instincts, and your head.

Markets have a tendency to overshoot, but they also have a tendency to return to the mean.

At the moment, the RSI (Relative Strength Index) of Gold and Silver are showing the most oversold prices in the last 40years. This will soon return to the mean.

Sprott Group, who I have mentioned before, studied Gold and Silver production and demand, and reached the conclusion that world demand significantly outstrips supply by some 200million ounces, and the only conclusion is that the only way that Gold and Silver demand was being met in the near and Far East, was by selling short (Selling a derivative, or selling forward at a price below the current price) to manipulate the price lower, and releasing Central Bank Gold from the British and American vaults to meet unprecedented demand.

In China alone, last year they imported over 1,000 metric tonnes, and produced over 300million ounces of their own, while allegedly scouring the states of Africa to buy from artisanal miners at the spot price, possibly importing another 40tonnes per month.

One day soon when the precious metals vaults are empty, and the game is up… The price will go where demand and supply take it. That time is near.

You have been warned.

If you like this post or want to comment, feel free to post elsewhere, and respond here…

Funny Money? Funny Jobs?

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My most recent post, hinted at the technological revolution that is just underway, as the digital revolution enters phase two.

I talked about how mainframes were superceded by mini-computers for medium sized businesses and universities, and at how that begat their widespread adoption which led acadamic institutions to seek to share their intellectual resources via the research network – Arpanet. This followed on from the former Darpanet, which was supposed to be a way for the U.S. military to communicate, if in the event of a nuclear attack many of their telecommunications systems were wiped out. That was the start of Phase 1.

The network settled on TCP/IP as the protocol – Transmission Control Protocol/Internet Protocol which is where we get our IP addresses from. (and the NSA knows where we are and monitors our communications – but that’s another story)

Anyway, as this revolution is throwing up some prospects for making money, the other side of the coin is that many jobs that have existed for many years, may be about to be wiped out. If your employment is in one of these industries, or sectors then perhaps it’s time to consider the alternatives…

BUT, where to start?

The starting place is “Funny money”… That’s what many people call money they’re not sure about. Monopoly money. Money that doesn’t feel right.

Well, when the Central Bank uses “Quantitative Easing”, which is a euphemism, for creating new money, to lend to the big core banks of the banking system.  In essence these Banks, they’re supposed to lend that money to other institutions and/or government (via Bond purchases), and businesses then the economy will grow – so goes the thesis.

And of course, the Central Bank to end all Central Banks – The Federal Reserve, with its un-backed currency – can effectively be the lender of last resort to half the known world. via its tentacles – the BIS (The Bank for International Settlements) and the IMF (The International Monetary Fund) which is part of the World Bank.

Now when the Central Bank prints money out of thin air so to speak… that’s fine, but when a businessman prints, or copies this fictional money (Fiat money, or money by Diktat) then the central authorities get nervous. Of course you can’t copy or print Gold or Silver – well, not really, (except by creating derivatives) which is why the Bankers and the politicians in their pockets don’t like it – but I digress.

In the Huffington Post and AOL this morning, it was reported that two Asian Businessmen – brothers – took the Xmas break in 2012, to print up £1.27 million of their own. They and two others, got upto seven years in prison, in their final hearing in December last.

Different rules for different people springs to mind? And don’t get me started on JP Morgan’s affairs, it seems their fingerprints have been over almost every financial scandal of the last ten years, including the Bernie Madoff affair, but we’ll save that for another day.

No, this technological revolution including currency revolution is gathering pace. In France I heard yesterday, that up to 20 new local currencies have been created and are circulating in localities, as people seek to stop their money from leaking out into the wider economy, to protect their own jobs and the village or town they live in. The free market strikes again…

These local currencies are also appearing in the USA, where across several states, local currencies are appearing. If we add in the 80 (or so I hear) crypto-currencies, the most widely known ones being Bitcoin, and Lite-coin, it appears the Bankers are going to have a real problem going forward as alternatives to their FIAT money systems abound.

What is making it worse we learn is that their traditional business of “Lending” is also under attack too, as the Internet now allows depositors with money to save or salt away – you choose your perspective – can now lend direct to borrowers through “Peer to Peer” lending web-sites, and crowd-funding. Even business finance I learned yesterday can be got on-line via financing web-sites. if we add in the ETFs, which use savers money to invest in the largest corporations, and in the UK, Investment and Unit Trusts, then the world is awash with alternatives to the old system of Bankers collecting savers cash, and using it to invest in the economy.

If the internet has changed anything, it is that geography is not the restriction that it once was, but that this will have a dramatic effect on our whole society. (But we also need to be aware of moves to restrict free access)

Anyone who has been down one of Britain’s High Streets recently, cannot have failed to notice how that has changed in the last 5+ years, as new under cover Malls sprang up during the boom years, and stores on the uncovered main streets now remain empty – with boarded up windows to protect them, and advertising, suggesting that sometime soon, some wonderful event is about to happen.

But it got me thinking, if this technological revolution is affecting Britain’s HIgh Streets as more of us shop on-line, and Britain’s Banks as more of us find alternatives to the currency, what will happen when Google manages to perfect its driverless car?

A report I saw over the week-end suggested it wil be perfected and regulated within the next five to ten years. So, if we have driverless cars, will we need driving licences? And if not? Do we need Driving Schools? So if you are BSM, AA-Driving School, or any one of the thousands of small businessmen and women who run a driving school from home, then this revolution is not going to leave much by way of business, and thus employment.

So if there are fewer and fewer jobs… Are we about to return to pre-industrial revoluton days, where we all operate a small-holding and the modern equivalent of a spinning-wheel in our kitchen with a 3d-printing press, churning out our own stuff, which we buy as raw materials and exchange these with our neighbours?

And if so? What about those who don’t have these devices, or can’t afford the raw materials? What if you are one of the thousands of people whose job it is to regulate industry, push paper and electronic digits around, write e-mails to other departments, and generally keep tabs on the productive sector of the economy, such as the IRS or HMRC?

Under the previous administration, this army of beauraucrats grew to over 40% of the economy. That means that for every pound earned by the private sector, over 40pence went to pay for people who merely watch what other people do in some way shape or form, and make sure they comply with someone else’s vision of what is right and proper. Even the military are increasingly being used to resolve disputes between neighbours – even if the neighbours happen to be Muslim and Christian, or Muslim and Jew, or even different versions of Islam.

Will the technological revolution therefore mean these people will have to find alternative work? And if so What?

The skills to manage a small business are manifold. As a former Business Studies Lecturer, I thought I knew it all (or most of it anyway), but after leaving the confined spaces of academia, I learned that in the real world, you have to be constantly looking at the horizon to see where the next threat is looming to your current business model, and to many small businesses, wrapped up in the day-to-day business of running their business, it is hard to find the time to stay one step ahead.

It therefore, suggests we’re all going to have to think differently about our money, employment and investment. Investing in ourselves, in our knowledge and in other prospective businesses.

Robert Kiyosaki famously currently promotes self improvement through Network Marketing, though ten years ago, I saw a report that predicted the death of Network Marketing, and which, I’ll make available free in a future missive. BUT Affiliate Marketing, which is the on-line equivalent, perhaps holds greater promise. And as for investing? Well until such time as we can manufacture Gold, or Silver, these precious metals, the real stuff, that has been the preserver of wealth for 50 centuries, will have to do.

And given the amount of QE that has been pumped into the system these last six years, the value of raw materials is rising inexorably, and one day soon, that will have to show up in the inflation numbers. As much as the inflation figures and for that matter the jobless numbers have been massaged since the last great financial crisis in the 1970s, Shadowstats.com, has tried to show the real figures and paints a very different picture.

On shadowstats.com, the current  inflation rate as calculated back in the 1970s is 8.5% in the U.S., rather than the 2.0% we learn that the U.S and Britain is currently experiencing. And the U.S. jobless rate, recently reported as down to 6.7% is actually over 20% and rising, if calculated as it was in the 70s. Are we to assume Britain is so different from the U.S.? RT this morning suggested that corporations are minimizing price rises, by reducing pack sizes to avoid price hikes. But this can’t go on forever…

Of course, the Black (or grey) economy will undoubtedly add to the real economy, but always fails to show up in the government’s books. Is this perhaps one of the few – Growth markets?

For those interested in investing in 3-D printing, and those who will take advantage of the technology, and even 4-D printing – (a subject for a future post perhaps) they should check out the activites of the following:

Autodesk Incorporated, – ADSK:US

Hewlett Pacquard – HPQ:US

ExOne Corporation – XONE:US

Organovo Holdings Incorporated – ONVO:US

Stratasys Ltd – SSYS:US

3-D Systems – DDD:US

Thermo Fisher Scientific Inc. – TMO:US

General Electric – GE:US

Dassault Systèmes – DASTY:US

It seems our changing technology, will make fortunes for some… Of course the usual rules apply – these are not recommendations, but merely for educational purposes, and further research – as you might often see – DYOR – (Do You Own Research.)

And if you’re even thinking about finding an alternative to that job, that might disappear down the road, there’s dozens of simple, low-cost or almost FREE ways to get started.

Six Degrees of Separation?  They say that we are just 6 people away from anyone on the planet. Be that:  Hugo Salinas-Price, Al Gore, David Cameron, Barack Obama, Wen Xiao Bo, Warren Buffett, Bill Gates, Richard Branson or Angela Merkel. You might have a brother or sister, cousin or Aunt, involved in local politics, who met a senior politician, who met one of the above during a political rally, who knows all the others…

“It’s not what you know, it’s WHO you know” – How many times have you heard that?  Well, your network of contacts knows someone, who knows someone, who knows someone… Who might just know one of the above, and building a network, whether via Social Media, or via an Affiliate Marketing network, the sooner you get started, the better.

Here’s an invite to get started NOW!

W.

Sorry – We don’t need you now – You’re Redundant!

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The words you don’t want to hear.

Like many before you, imagine hearing those words, just as many do each year usually
when they least expect or need it – like just before Xmas in December 1999, as
happened to me, and again after I and two others completed the project we’d been
working on for 6months, just 8months later, I heard those words a second time…

And less than 18months later as my employer Marconi Software Solutions was closed
down by its parent corporation, GEC-Marconi, as the then parent company reduced its
workforce from 55,000 employees to just 12,000 in a worldwide re-organisation.

I was a software specialist – a “Techie” who worked in and for, some of the biggest
corporations in the world. and the life I had worked for 20years to make, was
gone…

Within the next 5years, if you don’t work for one of the many organisations who make
at least some of their living via the internet, or run one of these organisations
yourself, then you may be destined to hear those same words for yourself.

How would that affect YOUR life?

How would having no visible means of earning a living affect you? Your mortgage?
Your kids? Your spouse or partner? Your retirement? How would that affect your
relationship if you’re supporting another individual for years, or if that someone
was supporting you?

I understand, its difficult to see things when they’re far away, when you can’t see
the direct impact on you. BUT we’re in the early stages of another part of the
Digital Revolution.

Don’t believe me?

The Western democracies are experiencing the biggest financial upheaval since the
dawn of the Industrial Revolution. They might not know it yet, but they are.

How so?

When I was a much younger man, I read a couple of books by a man called Alvin
Toffler, the first called “Future Shock” and the other “The Third Wave” were a
visionary’s peep into the future.

His style, though eclectic, served up a vision of the future, that might just
finally be arriving.

At the time, we were experiencing the start of the digital revolution – a transition
if you will, from an analogue world to the digital world we now enjoy.

Just like the Industrial revolution that had two major waves – initially coal and
steam engines, then later oil, and petroleum production which ushered in a huge new
wave of industries, and the motor-vehicle, we are now experiencing the second phase
of the digital revolution.

The first phase shrunk the huge mainframe computers used by the military, and Universities – first to mini-computers, and then to micro-computers; it saw the end of the “typing pool”, and secretaries, and they all became admin personnel, or administrators.

The tail end of this phase ushered in inter connectivity of computers beginning in 1969,
as they connected four Universities in DarpaNet, (Defence Advanced Research Projects
Agency NETwork) and later Arpanet in 1976 as Unix became the Education sector’s
Operating System platform of choice, and ‘C’ became the third of a trio of
programming languages that were readable by humans. – The first being A and B.

But that was then, and this is now.

The end of the PC era effectively began towards the end of the millennium, as the
world’s computer hardware manufacturers realised they needed 32bits to store a
“Date”, and a 32-bit software environment to run it all, just at the time that Tim
Berners-Lee was working in the Hadron Collider and wanted to share industry files
with others in the Physics community, and came up with the World-Wide Web.

That little way to allow people to find documents on other computers without needing
to know what they’re called, or even where they are, coupled with the extensions to
embed pictures, and later videos, and then a new wave of this digital revolution
started, as it merged the web with the phone, shrinking it and making it wireless,
putting the power of a mainframe into your pocket.

That was the final stage of the communications revolution, but now the real changes
will sweep away whole industries, put millions of Chinese factory workers, out of
jobs, send Bankers into a tailspin, shrink some of the biggest companies on the
planet to the size of a handful of people, and enrich their owners like the wealth of
Kings and Queens of the early rennaissance.

How so I hear you ask?

Just as the printing press put scriveners out of work, and ushered in the publishing
industry, and the PC put secretaries out of work, so the 3D-Printing Press will
revolutionise manufacturing.

3D Printing

Software supplier Dassault Systemes of France and 3D Systems Corp are among the
leaders in this 3D-Printing revolution. According to the Motley Fool web-site, we are at the beginning of the end of Chinese manufacturing dominance, but will it be also a revolution in other industries.

Imagine, if you will, having one of these $1200 printers in your garage – just like
the one found in a Manchester out-building late last year, which had the designs and
a partially completed functioning gun.

The same gun design which an Austin, Texas, University student, video’d firing at a
rifle-range. The magazine was also manufactured on that same printer.

Now, we learn that these 3D-printers can manufacture – print – live cells creating
live organs such as the kidney used in a live organ transplant, rubber, plastics,
metals, even building materials in upto 99 different materials.

If you work in the building industry and the housebuilder you work for doesn’t use
this technology, how will they compete with a company that manufactures 40 storey
tower blocks in a factory and builds them in sub-assemblies to be assembled on site
in days, rather than weeks. If you’re an administrator, brickie, techie, plumber
electrician or driver, where’s your JOB if the company you work for no longer
exists?

Of course, designers, architects and engineers, will also find this technology a blast.,
just as many already are. Printing in glass, wood, rubber, steel, concrete, or even
a combination of materials.

For the ladies, you might be pleased to learn they can even print chocolate.

BUT, if we can produce a design in one part of the world, and print it off on the
other side of the world, where does that leave the transport and logistics
industries? And if designs are everywhere, then where does that leave factory
workers if components can be manufactured -printed – as and when needed? A complete car has already been produced using this technology.

If you work in the minerals industry – producing the raw materials for this
brave new world then you would appear to be relatively safe perhaps even increasingly in demand – for now.

If you don’t need a refinery to make things, what happens to those workers who work
in those industries?

And if China and India have several hundred million, perhaps a billion people
between them unemployed, what will those two countries do to employ their hundreds
of millions of unemployed, and angry young men?

The last time this happened was after the 1908 Banking crisis, leading ultimately to
the first world war, and we all know what that outcome was.

The Banks though too, need to be concerned at these changes, as the crypto-
currencies previously mentioned replace real folding paper money, and everyone’s
computer or smart-phone can be a bank vault, how will Banks make money?

Perhaps the GRG (Global Restructioning Group) of RBS which was recently criticised
for aggressive tactics, when it “pulled the rug from under” the feet of dozens of
small businesses, is the way they’ll do it, making everyone a rent or debt slave.

A report on RT today told of a hotelier, who was just 11 days from re-opening a hotel
after a major refurbishment, when their Bank Manager rang and said that the £1.6m of
their loan agreed and still outstanding, couldn’t be paid, as they had run out of money, and the business was effectively bankrupt.

As the man told of losing his hotel, and the Bank taking it into their property division, the hotel opened on the day his wife was diagnosed with cancer except now the Bank owns it.

The Banks who enslave people with mortgage debt are using the original old french
meaning of the mortgage – the “DEAD-HAND” of the mortgagor, who controls the life of
the mortgagee. Only the elimination of the debt can free the energies of the world,
and this means taking away the power of the Central Bankers to create money out of
thin air.

Gold, Silver and even Bit-coin may be the tools of retribution. However, in 1933,
President Franklin Delano Roosevelt, issued executive order 6102, which made the
ownership of Gold a criminal offence punishable by upto a fine of $10,000 – a HUGE sum at that time, or a period of upto 5years in prison. Silver was added to this list in 1934.

It has just been made illegal in China to trade bit-coin, how long before other
autocratic governments do the same?

But this new industry can’t be un-invented.

Business Insider research analyst – Pascal Gobry calls it:

“THE NEXT TRILLION  DOLLAR INDUSTRY.”

If you are at risk, maybe the answer is to start your own business, and accumulate Gold or silver.  Just make sure you keep it under wraps, and out of the hands of Bankers.

As Long-Term Capital Management, MF-Global, Lehman Brothers, Bear Stearns, and others have left so-called gold owners without their physical metal, meaning they are just another creditor of these now defunct Institutions and Banks. It seems as if Cyprus is the model of the future…

How will you pay for food if your savings go the way of the Dodo?

Until Next time…

W.

In Gold we trust?

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Following on from the last piece on America’s paranoia, I add this piece by Theodore (Ted) Butler of Butler Research.

Ted Butler was the man behind the disclosure of the manipulation of the Silver market, as exposed by Andrew Maguire in early 2010 when he predicted a precipitous price fall two days before it happened. That exposure almost cost Maguire and his wife, their lives. The full story can be read in “The Coming Battle” at http://wa1-marketing.webs.com

When this battle unfolds, those with precious metals will be the survivors.

2013 – The Year of JPMorgan   

 

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 January 3, 2014 – 10:22am
  
Probably owing to the dramatic decline in the price of gold and silver, I’ve read scores of year end metal reviews, more than I have ever read previously. Like most of you, I read in order to learn. Therefore, I approach every year end review and outlook with an eye towards understanding just what caused the prices of silver and gold to decline as much as they have and what that portends for the New Year.
I know I look at silver and gold differently than most commentators and what follows I haven’t seen elsewhere, for better or worse. Let me assure you that I’m not trying to be different for the sake of being different; my objective is to understand what really moves the price of silver and gold – no more, no less. I’m not interested in making up stories that can’t be verified or documented; I would not put my name on anything that I did not believe to be factual and accurate.
As has been the case for the past five years (since it acquired the concentrated short positions of Bear Stearns), 2013 was the year of JPMorgan in silver and gold. Everything important that transpired in silver and gold can be traced to JPMorgan, just as this bank will dictate what happens in the future. I realize I am being overly specific and that many different factors influence the price of any market; but the circumstances surrounding JPMorgan are so overwhelming as to render all those other factors combined moot when it comes to silver and gold.
From the very beginning of the year to the last two days of 2013, JPMorgan has dominated and controlled the price of silver and gold. Here are the documented facts. At the start of 2013, with gold at $1650 and silver at $30, JPMorgan held short market corners in COMEX gold and silver futures. JPM was short 75,000 gold contracts (7.5 million oz) and 35,000 silver contracts (175 million oz). JPMorgan’s short market corners at the start of 2013 amounted to a 21% net share of the entire COMEX gold futures market (minus spreads) and an astounding (but typical) 35% of the entire COMEX silver market. No single entity had ever held such outsized and anti-competitive shares of any important regulated futures market. It is unreasonable not to associate such extreme market corners with what followed in price.
The next standout feature to this year’s historic $450 (28%) decline in the price of gold and the $10.50 (35%) decline in silver is in the specific manner of the decline. The vast majority of the total price decline in gold and silver occurred within several days; two days in April (when gold fell $200 and silver by $5) and a few days in June (when gold fell another $150 and silver another $3). The price record clearly shows that the major damage of the worst year in gold and silver history transpired over a handful of days, something never witnessed before in gold, but occurring before in silver (twice in 2011). It wasn’t just that gold and silver declined dramatically in 2013, but the nature of the decline.
Take away those five trading days of 2013 and it would have been a rather ho-hum year in gold and silver. Of course, we can’t take away those five horrible days, but to ignore them would be a mistake. The degree of the time-compression of this year’s decline in gold and silver, were it to occur in any other market would necessitate historical nomenclature (Black Monday or Friday). Even more than the plunge in price for gold and silver in 2013 was the time-concentrated nature of the decline. Try to imagine the furor that would arise if the stock or bond market were to decline 35% in a matter of days.
Let’s stop for a moment and connect these two dots – JPMorgan’s short market corner in COMEX gold and silver at the start of the year and the historic and concentrated price plunge of 2013, essentially completed for the year by the end of June. Can it be possible that these two facts were not directly related and a case of cause and effect? Let me restate that – is it possible that JPMorgan just happened to be in the right place at the right time and the historic gold and silver price plunge occurred through no input by JPM? Before you answer, let me comment further.
The price plunge through the end of June resulted in JPMorgan making more than $3 billion on their short market corners in COMEX gold and silver. So, to conclude that JPMorgan had nothing to do with the price plunge is the same as concluding that $3 billion in commodity futures trading profits is a normal and regular occurrence. But it wasn’t just that JPMorgan innocently stood by while legitimate market forces bestowed a sudden $3 billion windfall on a financial institution found to have acted improperly in more different circumstances than can be recorded – it’s what JPM did as a result of the gold and silver price plunge.
The facts show that JPMorgan not only took profits on their short market corners in gold and silver (to the tune of $3 billion+), JPM bought so aggressively on the price plunge thru June, that this bank almost eliminated their short market corner in COMEX silver and actually reversed their short market corner in COMEX gold to a long market corner. The facts indicate that JPMorgan was the single most aggressive trader on the extreme price plunge and not a lucky bystander.
It is well-established that a market corner is against commodity law. In fact, this is the most important aspect to commodity law, because market corners are unquestioned proof of manipulation. CFTC data indicate (as I’ve been reporting all year) that JPMorgan held short market corners in COMEX gold and silver at the start of the year and that this crooked bank holds a long market corner currently in COMEX gold. There can be no question that JPMorgan held and holds market corners in COMEX gold and silver based upon market share.
The only question is how the heck did these crooks pull it off? Specifically, how was JPMorgan able to buy so much COMEX gold and silver as prices plunged? Normally, one would think the net purchase of 150,000 COMEX gold contracts (15 million oz) and 23,000 COMEX silver contracts (115 million oz) by the US’s largest bank would cause prices to soar. That would usually be the case, except for one other fact – JPMorgan and other collusive traders have come to control the price mechanism on the COMEX, thru high frequency trading (HFT), spoofing and other illegal computer trading means. The evidence of this is in the otherwise inexplicable daily price volatility on the COMEX and the fact that JPMorgan and other collusive commercials are always on the buy side on big down days with no exceptions.
This HFT daily price control, combined with trading counter parties (technical funds) solely motivated by price signals has created a Frankenstein-market – a monster out of control. Real commodity markets are supposed to have prices dictated and discovered by real world supply and demand forces; the COMEX monster market has computer algorithms dictating prices to real world producers, consumers and investors for the benefit of JPMorgan.
I’ve concentrated on what JPMorgan has done this year on the COMEX because that market determines gold and silver prices throughout the world. But JPMorgan’s influence and activity is not limited to COMEX gold and silver futures. In addition to holding a long market corner in COMEX gold futures, JPM has been extraordinarily active in taking actual delivery of metal recently. For the month of December, JPMorgan has taken delivery of more than 96% of the 6493 gold deliveries issued this month. The 6254 contracts taken by JPMorgan in its house (proprietary) account is equal to 625,400 oz of gold. In addition, JPMorgan also took delivery of 10 million silver oz in December and another 5 million silver oz this week in the new January delivery month.http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf
Here’s something new I’ve been meaning to mention. The CME Group (owner-operator of the COMEX) lists a spot month position limit and monthly limit on actual deliveries of 7.5 million silver oz and 300,000 gold ounces by any one trader. Yet the CME is reporting that JPMorgan in its house account took delivery of more than double the amount of gold allowed in any one month. Since JPMorgan held the 6254 gold contracts from first delivery day forward, it also means that JPM was in violation of CME rules limiting spot month holdings in gold futures of 3000 contracts for the entire month. The violations in silver were less egregious but were violations nonetheless.
I’m sure if pressed the CME could come up with some cockamamie excuse why JPMorgan was allowed to hold and take delivery of so many gold and silver contracts in one month, but the real reason is that JPMorgan is above all rules and law. The CFTC backed down on policing JPMorgan and it would be foolish to think the CME would restrict its most important client in any way. Far from a band of brothers, this is a brotherhood of criminals. Besides, rules are for the little people, not JPMorgan.
2013 also highlighted the unintended consequences of JPMorgan’s control on silver and gold prices. By rigging gold and silver prices lower on the COMEX to close out its gold market corner and flip it to long market corner, JPMorgan also caused the extraordinary liquidation of metal from the world’s largest gold ETF, GLD. There can be little argument that the steep plunge in gold prices caused the massive liquidation of almost 18 million ounces (41%) of gold holdings in GLD. Investors dumped $25 billion worth of GLD in reaction to declining gold prices and prices declined because JPMorgan rigged prices lower on the COMEX in order to flip a short market corner into a long market corner. If there’s an alternative plausible explanation, I haven’t heard it.
Earlier in the year, when I first discovered that JPMorgan held a long market corner in COMEX gold, I speculated that JPM was gaining ownership of much of the gold liquidated from GLD. Numerous reports of buying by China and India subsequently persuaded me to think that most of the metal from GLD ended up there. But considering how aggressive JPMorgan has been in acquiring gold and silver metal via COMEX deliveries recently, I now believe JPM got a pretty good chunk of the liquidated GLD gold. I also think that JPMorgan has been getting serious amounts of silver from SLV by buying shares and converting to metal before share holdings require SEC reporting. There are just too many factors pointing to JPMorgan acquiring all forms of gold and silver to not consider this the key factor of 2013.
One of the questions I have been unable to answer to myself over the past several months is why hasn’t JPMorgan let gold and silver prices rip to the upside after establishing a long market corner in COMEX gold and sharply reducing their short market corner in COMEX silver. After having made $3 billion on the short side, JPMorgan has been in position to make that much and more to the upside. I couldn’t quite understand what was holding them back. The recent COMEX delivery data, as well as the continued outflows from GLD (and more recently from SLV), come close to answering my question.
It appears that JPMorgan hasn’t let gold and silver rip to the upside because the bank is still acquiring important quantities of metal in physical form. It does appear that JPMorgan has hit the limit of COMEX gold futures ownership, as the bank’s long market corner is pretty easy to track and, apparently, hard for anyone to deny. Likewise, JPM’s short position in COMEX silver has been hard to reduce significantly for six months or longer.
But the documented data clearly indicate that JPMorgan has been acquiring important amounts of gold and silver thru COMEX deliveries and, most likely, in actual metal from GLD and SLV. Unlike futures contracts which are reported weekly in COT reports, there is no reporting requirement by JPMorgan for physical gold and silver held. Considering that the statistics from the COMEX have shed much light on JPMorgan taking delivery of gold and silver in extraordinary amounts and the knowledge that JPM doesn’t welcome close scrutiny of its trading, I’m inclined to believe we are closer to the end of JPM taking such visible deliveries, rather than this being the start of growing delivery-taking by them. In addition, after the unprecedented bleed of more than 40% of the metal in GLD, further massive liquidations look improbable from that source.
Therefore, I can see what JPMorgan has accomplished in 2013 and why they haven’t pulled the trigger yet to the upside, as they continue to acquire physical gold and silver. But the easy flow of physical gold and silver accumulation by JPMorgan now appears largely over. That’s not to say JPMorgan is done with its dirty tricks to the downside, but it’s important to put things in perspective, which is the main purpose of year end reviews.
As was the case in 2013 and every year since 2008, the next year in gold and silver will be determined by JPMorgan. But considering that JPMorgan now holds a long market corner in COMEX gold for the first time in history, it is hard to see how 2014 doesn’t shape up to be the exact opposite of 2013. Throw in JPM’s sharply reduced short position in COMEX silver and the massive quantities of physical gold and silver acquired by the bank and the start of 2014 couldn’t be more different than the set up of a year ago.
While no one can accurately predict short term pricing or the exact moment the deliberate price beatings of 2013 will end, the facts indicate a remarkable turnabout in JPMorgan’s positioning. We fell sharply in 2013 because of JPMorgan and will likely rise sharply in 2014 for the same reason. From my perspective, that’s all that matters. 2013 – Good riddance. 2014 – Step right in. Happy and Healthy New Year to all.
 
Ted Butler
Published on January 1, 2014