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Manipulation of the Gold Market?

Submitted by Roanman on Thu, 04/12/2012 - 18:40


This one might be a bit obscure for those of you that don't trade, still if you can get your mind around the idea of "selling short" Gold you don't have via futures contracts or options and then buying the stuff back in order to make whole or reconcile your position, it should ... OK, Ok maybe could ... fall into place.

This set of charts first showed up as a trading strategy proffered by SK Options

It is now being bandied about as evidenceof manipulation of the gold markets.

The first chart from Kitco is for the daily closing price of Gold or "PM fix" from January 2002 until January 2012 on the Comex, located in New York City and demonstrates what I consider to be just a wonderful upward sloping trendline.



Starting in 2001 with an index arbitrarily set at 100, the chart below shows what would have happened to that investment of 100 whatevers if it had been used to purchase Gold daily at the AM fix on the Comex in New York City and subsequently sell that Gold daily at the PM fix again in New York City on the Comex, replicating the daily percentage performance of Gold in the U.S. intraday market.

What you need to keep in mind here is that the morning fix on the Comex is seldom if ever the same as the previous evening's fix.

This is true of most markets and every exchange.

What this chart is telling you is that had you taken $100,000 and invested it all daily by purchasing Gold to the maximum you were able at the morning fix and subsequently selling all of it back at the evening fix, beginning January 1, 2001, your account would have been reduced to somewhere around $32,000 on or about March 1, 2012.



The following chart is barely more complex.

The red line demonstrates the gains you would have enjoyed employing a buy and hold strategy if you had purchased and held some amount of Gold on Jan 1, 2001 again arbitrarily set at 100, and held it through March 2012.

The blue line demonstrates the gains you would have enjoyed had you bought gold daily at the evening fix on the Comex in New York and then sold it daily at the morning fix, again on the Comex in New York City and then sold short Gold at the morning fix and repurchased Gold to close your short at the evening fix.

Got that?

Buy at night, sell in the morning, go short with the proceeds then close your short position at the evening close and using the proceeds from that trade repeat the whole process.



Gold goes up all over the world while we sleep and goes down in New York when we're open for business.

It's a fascinating world we live in.


MF Global Hearing

Submitted by Roanman on Thu, 03/29/2012 - 10:14


Click on the photo below to link up to the C-Span coverage of the MF Global hearings.

If you have any money invested anywhere or hope to have some money invested somewhere, some day in the future, you should probably take the time and watch this/these hearings.

This one will only take about three hours out of your life.

I'll admit to having scrolled forward during most everybody's prepared remarks.

The questioning process is very revealing, to say the least.



Facts Figures and Random Information

Submitted by Roanman on Mon, 03/05/2012 - 08:06


Physical gold held by ETFs, at 2,469 metric tons, is now the world’s 4th largest gold stash, behind the US, Germany and the IMF.

Iceland is considering adopting the Canadian dollar, “the loonie”, as its currency.

Every $10 increase in the price of crude oil reduces US GDP by 1%.

A record 46.5 million Americans are on food stamps, 15% of the US population, over 22 million US households.

TSA’s VIPR teams conducted 9,300 unannounced checkpoint and frisking operations in the US in 2011 on highways, subways, train stations, ferry terminals, all mass transit locations.

Windows 8 will have a “kill switch” that will have the capability to arbitrarily access your computer and delete “dangerous software”.

The yield on the 10-year bond issued by Portugal jumped by 70 basis points last week coming close to a 14 percent yield. The Greek 10-year bonds jumped to a yield of more than 38 percent.

The Electronic Privacy Information Center (EPIC), obtained hundreds of documents from the Department of Homeland Security through the Freedom of Information Act and found details of an arrangement with General Dynamics in which DHS has been paying the defense contractor to monitor social media websites and other Internet communications to find criticisms of the department’s policies and actions. The company was contracted to monitor the Web for ‘reports that reflect adversely on DHS,’ including sub-agencies like the Federal Emergency Management Agency, Citizenship and Immigration Services, Customs and Border Protection and Immigration and Customs Enforcement.”


Reading on a cold Sunday evening.

Submitted by Roanman on Sun, 03/04/2012 - 17:41


CNN of all people provides a well done story on Dean Tofteland, ripped off farmer in the MF Global fraud and his pursuit of John Corzine and Dean's stolen $253,000.



Seems kind of simple when you put it that way.


If it ain't Goldman Sachs, it's J.P. Morgan

Submitted by Roanman on Thu, 01/19/2012 - 19:39


From Reuters.

It's always interesting when the thieves start turning on each other.

Click on the photo for the entire story.


In MF Global, JPMorgan again at center of a financial failure


Thu Jan 19, 2012 10:18am EST


(Reuters) - In late October, as MF Global Holdings Ltd teetered toward bankruptcy, Jon Corzine phoned his close-knit circle of Wall Street friends for help.

His firm, facing demands from customers and other firms for cash, needed to sell billions of dollars in securities to raise the money. As the week progressed, MF Global executives came to believe that JPMorgan Chase & Co., one of MF Global's primary bankers and a middleman moving that cash, was dragging its feet in forwarding the funds.


Scroll down one post to see who the boys are supporting in this years presidential election, having supported Obama in 2008.


Some facts and figures about the Gold we got

Submitted by Roanman on Tue, 01/17/2012 - 07:54


The following calculations were compiled or figured by R.E. Mcmaster.

I haven't checked them, but probably will to the extent I'm able to this evening.

It mostly feels about right.


There are $30 trillion in currencies worldwide.

All the gold ever mined would fit in a 62.3 ft. cube.

All the gold ever collected, panned and mined since the time of Jesus is worth approximately $7 trillion at today's price.

There are 158,000 tonnes of gold above ground, 86% of which is held by central banks, investors, and jewelry owners.

This means there are 4.8 billion ounces of gold above ground globally, of which 2.1 billion ounces, 43% is in jewelry, religious and art items, official reserves of 1 billion ounces, industrial use of 530 million ounces, and 1.1 billion ounces in private hands.

The market cap of all gold that is above ground, including central bank reserves (30,717 tonnes as to 10/11), is equal to only 1.4% of global financial assets. Combined central bank gold reserves rose in 2009 by 425.4 metric tons to 30,116.9 tons, an increase of $13.3 billion (2009 average prices), the first increase since 1988.

Central banks hold 18% of all the world’s gold ever mined.


Historic Interest Rates

Submitted by Roanman on Sat, 01/07/2012 - 07:16


From Bianco Research who claim "more than 300 institutional clients worldwide including official government agencies, central banks, public and private pension plans, institutional money managers and hedge funds".

Which claim has caused me to never bother pricing them out.

Take note of the year 1916 which incorrectly holds the line marking the creation of the Federal Reserve Bank.

The New York offices of which are the official summer home of Satan himself and the source of all evil in this world.

The Federal Reserve Act was voted into existence December 23, 1913.

Click on the chart if you have an interest in pricing out Bianco Research, someone around here might partner up with you.



Take a hard look at 1940 through 1984 if you own or are planning to own bonds anytime soon.

The value of your bonds rise as interest rates fall, and subsequently fall as interest rates rise.



Think your IRA is safe? Better think again.

Submitted by Roanman on Wed, 01/04/2012 - 06:47


From THE GOLDEN TRUTH and Dave in Denver, here's a bit of holiday cheer.

Click anywhere below for the entire piece ... recomended as it makes perfect sense.

At least to us.


Think Your IRA Is Safe?  Better Think Again


The MF Global bankruptcy is a blueprint for how the Government and wealthy bankers will begin to take everything that is kept within the confines of the financial system.


Ten years ago I tried to tell many friends and acquaintances that housing prices would collapse and this country was headed for disaster and that the only only way to protect themselves financially was to load up on gold and silver.   Almost everyone looked at me like I needed my own floor in the mental health wing at Belleview Hospital in NYC.  Of course, that was back when gold was around $300/oz. and housing prices were on average about 50% higher than they are now.


As I run into these folks these days, they compliment me for my ability to see into the future and immediately want to know what I think will happen next.   My only logical response is to say that they don't want to know what I think because, just like 10 years ago, they'll think I'm crazy.   I add that I hope I'm wrong this time about what I think is coming but that I doubt that I am.


I bring this up because one of the things that I believe will eventually happen is that the Government will find a way to confiscate all retirement assets (IRA's/401k's).   But rather than outright taking them, they'll substitute them with some kind of retirement "annuity" that is funded with good old Treasury bonds.   Of course, by that point in time, the Treasury bond printing press will be working overtime to print currency the Government can use to stay afloat.



To quote Richard Russell

Submitted by Roanman on Fri, 12/30/2011 - 17:14


From today's installment of Richard Russell's Dow Theory Letter.


Below are the last day of the year quotes for gold.

2000 -- $273.60
2001 -- $279.00
2002 -- $348.20
2003 -- $416.10
2004 -- $438.40
2005 -- $518.90
2006 -- $638.00
2007 -- $838.00
2008 -- $889.00 

2009 -- $1096.50
2010 -- $1421.40
2011 -- $1566.80

This year's close for gold marks the 11th year for higher year end gold closing.

To my knowledge this is the longest bull market of any kind in history in which each year's close was above the previous year.

This fabulous bull market will not end with a whisper and a fizzle. I continue to believe that the upside gold crescendo of this bull market lies ahead.

We are watching market history.



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