Ed Steer this morning
posted on
Jun 12, 2010 10:39AM
Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.
Japan PM warns of Greece-like debt crisis
There was no gold price activity worthy of the name during all of Far East and half of London trading on Friday. But, at 1:00 p.m. in London [8:00 a.m. Eastern time]... just a few moments before the Comex opened in New York... gold caught a bit of a bid and rallied about $9 in an hour, before giving back every dollar of that gain going into the London p.m. gold fix at 10:00 a.m. Eastern time... 3:00 p.m. in London.
From the 10:00 a.m. low, gold rallied about $11 to its high of the day [$1,231.80 spot] around 2:30 p.m. Eastern time, before selling off a few dollars into the close of electronic trading at 5:15 p.m. in New York.
Not that I wish to appear overly suspicious, dear reader, but did you notice that fact that gold hit its high price of the day about the same moment that the Dow had another 'magic rally' out of negative territory? Maybe I'm just imagining things.
Similar to gold's rally, silver began a rally about 11:30 a.m. in London... and this continued the moment that New York began to trade... with the price heading for the moon and the stars. The price wasn't allowed to get very far before a not-for-profit seller showed up and beat the price back. Then, one or more bullion banks pulled their bids... and that was that... with silver's absolute low [$18.06 spot] coming about 80 minutes after its absolute high of $18.56 spot.
Nothing to see here, folks... just normal buying and selling... please move along.
One thing I should point out, is that volume in both metals yesterday was light once again. But, having said that, there was nothing 'normal' about the price action yesterday... especially in silver. I just keep buying the stuff every chance I get.
The dollar didn't do anything worth mentioning yesterday, so instead of posting the 24-hour dollar graph, here's the 3-year chart... and you can read into that anything you wish. But if I was a non-American [which I am]... and I had a U.S. dollar asset right now... I'd be a seller.
Once again, the precious metals shares spent most of the day in the plus column. The HUI was up 0.50% on Friday... but here's the weekly chart to show you how the week as a whole went.
The CME Delivery Report for Friday showed that 374 gold and zero silver contracts were issued for delivery on Tuesday. The Bank of Nova Scotia was the big issuer and JPMorgan was the big stopper. All the action is linked here.
There were no reported changes in either GLD or SLV... and nothing from the U.S. Mint, either. The Comex-approved depositories reported taking in 639,708 ounces of silver on Thursday... all of into the Brinks, Inc. warehouse.
The Commitment of Traders report [for positions held at the end of trading on Tuesday] showed that the bullion banks added another 5,954 contracts to their net short position in gold... which now sits at 27.36 million ounces.
Silver was the surprise, as both Ted Butler and myself were expecting a pretty big decline in the bullion bank's short position after the big take-down in silver on Thursday and Friday of last week. But... it didn't happen. There was virtually no change in the bullion banks net short position... with the net short position in silver still at 260.2 million ounces... the same as last week. The '4 or less' bullion banks are short 253.0 million ounces... and the '8 or less' bullion banks [which includes the '4 or less'] are short 321.7 million ounces.
Silver analyst Ted Butler had his usual weekly interview with Eric King over at King World News... and I'll let him explain what happened. The link to the interview is here.
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I only have six items for your reading/listening pleasure today. The first story is from The Telegraph in London... and is courtesy of reader Roy Stephens. "The United State's $182.5bn [£124bn] rescue of troubled insurer American International Group [AIG] at the height of the financial crisis could have been avoided, an influential Congressional commission has found." It's a short piece headlined "U.S. faces 'severe' losses on AIG, Commission warns"... and the link is here.
The next story is one that I found posted over at Bloomberg yesterday. The headline is brilliant... and sums up this fiat currency system in a handful of words. It reads "Banks With State Debt Ignore Not-If-But-When Default". And that, dear reader, is a fact. The world is trading all this debt paper like it was the crown jewels themselves! Before this "greater depression" is over... as our own Doug Casey so succinctly puts it... all this debt will crash and burn. You can't borrow your way out of debt... nor spend your way to prosperity! And that particularly applies to the euro... which Doug Casey likes to a call a "who owes you nothing". The euro, as a currency, is already a dead man walking... with the beloved U.S. dollar not far behind. In my opinion, this article is a must read... and the link is here.
Roy Stephens has two more contributions for this column today... and the first one is from the English edition of chinadaily.com. It appears that Japan's new prime minister, Naoto Kan, warned Friday that his country could face a financial mess like that of Greece if it did not deal urgently with its swelling national debt. He's just stating the obvious... and several articles I've posted over the last six months or so, have said exactly the same thing... but this time it's coming from the top guy in Japan himself. The headline says it all... "Japan PM warns of Greece-like debt crisis". I seem to remember someone in Hungary's government saying exactly the same thing earlier this week. But with Japan admitting the obvious, the slippery slope just got a little steeper. This story is a must read from one end to the other... and the link is here.
Roy's last contribution is a UPI story filed from Baghdad on Thursday. Along with the Israeli boardings of Turkish-flagged ships in international waters, it appears that Iranian troops are reported to have crossed into Iraqi Kurdistan and built a fortified base. It's just another brick in the wall over there. If I had to pick a likely starting point for some serious military confrontations that would have immediate international repercussions... it would be in the Middle East. This story is headlined "Iranians put pressure on Iraq again"... and it deserves your undivided attention... and the link is here.
Up until 3:30 a.m. Eastern time this morning, I'd never heard the name Chris Whalen before. Eric King said that he was going to send me a "kick ass" interview with this guy. Part of his bio reads as follows... "Christopher helped found The Herbert Gold Society, an informal group of current and former employees of the U.S. Treasury and the Federal Reserve System. In this interview Chris discusses the insolvent banking system, the derivatives market, CDO’s, horrific recovery rates on certain bank assets, the possibility that the German government may overturn the bailout in Europe, Goldman’s troubles and the fact that they are mishandling the current trouble they are encountering and much more." I would think it's worth the listen... and the link is here.
And lastly... Sprott Asset Management in Toronto has put together an attractive two-page brochure [with text written by Chief Investment Strategist, John Embry] outlining "17 Reasons to Own Gold". It's contained in a pdf file at the Sprott Internet site... and the link is here.
Here's a youtube.com 'blast from the past' that I posted a couple of years back... and it's worth revisiting today. The group is known world-wide... and so is their signature song from 38 years ago. Turn up your speakers... then click here.
I'll close this column with the contents of an e-mail I received from Washington state reader, S.A. It's certainly food for thought... and S.A. called it "thought for food".
"While the crash only took place six months ago, I am convinced we have now passed through the worst - and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us." - Herbert Hoover, President of the United States, May 1, 1930
"...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent..." - Harvard Economic Society [HES] May 17, 1930
"Gentleman, you have come sixty days too late. The depression is over." - Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930
"...irregular and conflicting movements of business should soon give way to a sustained recovery..." - HES June 28, 1930
"...the present depression has about spent its force..." - HES, Aug 30,1930
"We are now near the end of the declining phase of the depression." - HES Nov 15, 1930
"Stabilization at [present] levels is clearly possible." - HES Oct 31, 1931
"All safe deposit boxes in banks or financial institutions have been sealed...and may only be opened in the presence of an agent of the IRS." - President F.D. Roosevelt, 1933
As Mark Twain said... "history never repeats itself, but it rhymes."
See you on Tuesday.