Thursday, April 18, 2013

Major Precious Metals Retailer: “We Have Been Experiencing Astounding Volume”

Mac Slavo

Were one restricted to watching just the paper market spots prices for precious metals, one might assume that there is major panic selling of gold and silver around the world.
A few days ago gold saw its biggest drop in thirty years, and silver was right behind it, leaving many investors concerned that gold’s decade-long run-up was nearing its end.
With all of this selling you’d think there’d be lines of panicked investors standing outside of brick and mortar local dealers and an overstock of precious metals at online retailers.
Curiously, it seems to be that exactly the opposite is happening. As the price of gold and silver collapsed to two-year lows, retailers in local markets and online have been scrambling just  to keep up.
A spokesperson for JM Bullion, a major online supplier of gold and silver to the retail market, suggests that they are experiencing unprecedented demand, all the while gold and silver prices as reported by the mainstream media have been “falling” precipitously:
We still have certain things in stock, like 10 oz bars, while others, like Silver Eagles, are a bit of revolving inventory.
The shipments are going out as soon as inventory comes in.
Our main challenge right now is actually getting the silver into the boxes and shipped out – we have been experiencing astounding volume.
Gold is in much better shape. We have all of our 1 ounce gold coins and bars in stock.
While JM Bullion still has gold and silver in stock and is able to meet demand, investors are being advised that they may have to wait five days or more to receive their orders as the company works to clear their backlogs.
Many other online retailers, however, are reporting significant shortages. So much so that some are being forced to cancel customer orders because there is simply no inventory, especially as it pertains to silver.
A subscriber alert from Future Money Trends indicated that the shortage is quickly becoming more widespread:
Several bullion dealers are reporting low or no inventory, others are just outright overcharging their customers. Wholesale dealers are also reporting they are out of several products including the American Eagle.

“…there is basically a silver shortage right now. Dealers are starting to run out of products and delay the shipping times.” David Smoler, DBS Coins
Here is a message from my good friend who works in the bullion industry when I asked him if there were real shortages happening.
“Across the board, sold out. Delivery delays up to 4-6 weeks, premium rising. Friday was our busiest day ever; until today. Which was much busier.” Andy Hoffman, Miles Franklin
Renaissance Precious Metals also reports having inventory of silver and gold available, but has advised that demand is so high, supplies are so low and paper prices are under such manipulation, customers should be prepared to pay higher premiums.
This shortage of physical metals may be due in part to wholesale suppliers like CNT, the company which supplies gold blanks to the US mint, having run completely out of silver.
Two of the largest wholesale suppliers in the US, including Amark and CNT, who is the supplier of gold blanks to the US Mint for Gold Eagles, and is a registered COMEX depository, HAVE JUST SOLD OUT OF ALL PHYSICAL SILVER!!!
Additionally, a major collapse of a Rio Tinto silver and copper mine in the United States last week has essentially vaporized about 16% of the physical precious metals market for potentially years to come.
Adding further pressure to the supply shortage, just a week prior to the mine collapse, the U.S. mint reported that it sold over 15 million silver eagles so far this year, leaving them so shorthanded that they have begun rationing supplies to primary dealers.
The number one driving force, however, seems to be investor demand amid what many perceive to be the next leg down in the financial crisis.
By all accounts, there is a gold and silver buying frenzy all over the world as prices have reached levels that are appealing to investors who were, as recently as last year, paying in excess of $1700 per ounce for gold and $35 per once for silver.
The shake out of ETFs and futures has left the Australian mint short of deliverables and Japanese and Chinese gold retailers seeing a “frenzied” surge in demand.
The customers are not just the ‘rich’ or ‘elderly’; in China “they tend to wear water shoes and come directly from the market…;”
in Australia, “the volume of business… is way in excess of double what we did last week,… there’s been people running through the gate,” and Japanese individual investors doubled gold purchases yesterday at Tokuriki Honten, the country’s second-largest retailer of the precious metal.
Thus, despite a significant crash in precious metals prices recently, investors are not only ignoring the media hype, but they are doubling down on the historic relics in anticipation of runaway inflation and continued uncertainty in the global economy and financial markets.

The Great Global Tax Grab is Already Underway

by Phoenix Capital Research
The world will soon be facing a tsunami of defaults on bad debts. This will include municipal or local government defaults such as the one now occurring in Stockton California, governments “defaulting” on promises they’ve made to the people (Social Security, Medicaid), a default on the social contract between society and politicians such as the one in Cyprus (a default on the notions of private property and Democracy), stealth defaults on debts in the form of inflation and finally, of course, outright sovereign defaults.
However, the last option will be sovereign defaults; all other options will be tried first. The reason for this is that sovereign bonds are the senior most collateral posted by the banks for their hundreds of trillions of Dollars worth of derivatives bets.

The minute an actual sovereign default occurs in Europe, Asia or the US, then the large global banks will all be vaporized. End of story.  As is now clear, the Central banks do not care about ordinary citizens. They only care about propping up the big banks.

This is why Cyprus decided to default on the social contract with its people and steal their funds rather than simply instigating a formal default. And it’s why in general we’re going to see Governments implementing more and more theft in the form of “taxes” (Cyprus called its theft a tax) in the future.

This will be sold to the public as either an attempt to tax those with a lot of money because it’s only fair that they put in more to bailout the nation OR as a form of financial terrorism e.g. “either you take a 7% cut on your deposits and the bank stays afloat or the bank crashes and you lose everything.”

This will be spreading throughout the world, GUARANTEED.

Spain, Canada (which allegedly has the safest banks in the world), and New Zealand have already begun discussing confiscation schemes for depositors in the event of a banking crisis.

As Cyprus has shown us, when push comes to shove, rule of law goes out the window. I fully expect that when things get really bad in the financial system the money grabs will come fast and furious. Foreign accounts, including possibly even Gold held aboard, will come under attack. Heck, the US got Switzerland to throw its 300-year-old banking secrecy out the window…

The Swiss bank Wegelin is to close, after admitting that it helped about 100 US clients evade paying taxes.

The news that Switzerland’s oldest private bank will cease to operate has potentially huge implications for Switzerland’s entire banking sector, and for the long tradition of Swiss banking secrecy.

Thirteen other Swiss banks are under investigation by US authorities, among them Credit Suisse, a bank now termed “too big to fail” by the Swiss government.

When Wegelin’s managers pleaded guilty in a New York court, the case was watched with mounting horror by the financial communities in Zurich and Geneva.

Many had expected Wegelin to continue to try to fight the case. For months, the bank had failed to turn up in court, saying the summons had not been delivered correctly.

Instead, Wegelin’s guilty plea included the admission that it intentionally opened accounts for US citizens to help them avoid tax.

If you’re an individual investor worried about what Europe’s Crisis really means for your portfolio, we’ve published a FREE Special Report outlining exactly that. It’s titled, What Europe Means For You and Your Savings.

In this report, we outline the risks Europe’s banking crisis holds not only for those in Europe, but for savers around the world. We also explain how this crisis will most likely unfold, including which areas are most at risk in the financial system. And we cap it off by listing multiple backdoor plays on Europe that investors can use to profit from Europe’s Crisis.

You can pick up a FREE copy here

Thank you for reading!

Graham Summers

Paul B. Farrell: There Are Plenty Of Warning Signs That Augur Poorly For The U.S. Economy And For The Markets But The Stock-Market Bulls Refuse To See Them. We’re Headed For Our Third $10 Trillion Stock Crash Of This Young Century.

Bulls love bull markets. History’s most famous bull, Yale economist Irving Fisher, loved the Roaring Twenties of the Great Gatsby.
Remember, weeks before the Crash of 1929 this brilliant Yale professor told investors: “Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon, if ever, a 50 or 60 point break from present levels, such as bears have predicted. I expect to see the stock market a good deal higher within a few months.”
Yes, bulls are perennial optimists. It’s in their nature, born in their DNA, a gyroscope guiding their brains. Their mantra: Napoleon Hill’s “Success Through a Positive Mental Attitude.” Their theme song, Monty Python’s “Always Look at the Bright Side of Life.”
They have an innocence, as if a sacred Invisible Hand gave them permission to set aside contrary evidence, dismiss facts and reality, rewrite history, challenge another “wall of worry,” and ignore market cycles, like the fact that 2013 is the fifth year of aging bull market, all mere dust to sweep under their bright-side-of-life rug.

Historical facts: Aging bulls in denial, roaring gets hoarse, bearish

Still, pause for a moment: Remember Bill O’Neil, Investors Business Daily’s publisher, a realist, part bull, part bear, who wrote in his classic, “How to Make Money in Stocks”: “During the last 50 years, we have had 12 bull markets and 11 bear markets … the typical bull market lasted 3.75 years and the classic bear market lingered only nine months.”
Well, investors, today’s bull is over four years old. Yes, an aging bull around hungry bears coming out of hibernation. Still, today’s bulls only sing the bright side, love roaring, and love taking risks against the odds.
They already lost roughly $10 trillion twice this century. They’re addicted to roaring, luring investors like a Pied Piper, making their money gambling with your money, even in losing markets.

Historical facts: Economic growth slowing to near zero

Jeremy Grantham, strategist for $100 billion GMO money managers, surveyed America’s economy for several generations, from the late 1900s: “The trend for U.S. GDP growth up until about 1980 was remarkable: 3.4% a year for a full hundred years. But after 1980 the trend began to slip.” And it’s “not going back to the glory days of the U.S. GDP growth.”
Get it? America’s growth rate is on a long slippery slope.
After a century of high-growth prosperity, GDP dropped “by over 1.5% from its peak in the 1960s and nearly 1% from the average of the last 30 years.” Worse, “going forward, GDP growth (conventionally measured) for the U.S. is likely to be about only 1.4% a year.”
And even worse, warns Grantham, through the next generation to 2050, America’s adjusted growth will average “about 0.9%.” Near zero, no growth, a killer for the stock markets through 2050.

Historical facts: Grand Disconnect, dramatic shocker by late 2013

Economist Gary Shilling, author of “The Age of Deleveraging” and long-time Forbes columnist, also confirms the long trend, warning of a “dramatic shock,” a wake-up call, a new black swan hitting the markets in 2013. Shilling is a realist among bulls: “Investors are paying little attention to weak and declining economies around the world, and concentrating on the flood of money being created by central banks.”
Shilling warns that this Grand Disconnect is driving “stocks around the world while the zeal for yield, amidst low interest rates, benefited junk bonds and other low-quality debt. The recent rush into equities by individual investors, after consistently liquidating them since 2008, suggests an expanding bubble.”
Yes folks, Wall Street bulls are blowing a new bigger, nastier bubble, repeating the roaring run-up to the 2008 meltdown, the 2000 dot-com crash, the 1929 Crash.
Remember, bulls are blind, they harmonize on the “Bright Side,” like Don Quixote, they believe in the promised land, a “permanently high plateau,” that they have finally discovered a cure to the 800-year old “this time is never different” malady. They dismiss Shilling’s warning that a Grand Shocker could shake up the financial markets before year-end.

Historical facts: 9 macrotrends slowing global economic growth

Gary Shilling just released his new Insight newsletter noting that “most of our economic forecasts have proved correct.” The most telling: “our projection of 2.0% annual real GDP growth was dead on.” Dead on, and he sees “another eight years of slow growth of about 2% in real GDP per year.”
That’s far less than the 3.4% long-term average from recent history and in line with the projected decline to near-zero growth in the next generation. Shilling sees a “forecast of continuing deleveraging” with “Nine Causes of Slow Global Growth in Future Years,” fairly rapidly through the next generation to 2050. The nine megatrends he predicts are putting the brakes on growth worldwide and across America are:
  • New consumer-savings era: “U.S. consumers are shifting from a 25-year borrowing-and-spending binge to a saving spree. This is spreading abroad as American consumers curtail the imports of the goods and services many foreign nations depend on for economic growth.” We went from 12% savings in the 1980s to 1% in the last decade.
  • Financial deleveraging: America’s financial leveraging binge began accelerating in the 1970s, with “debt-to-equity ratios of Wall Street firms jumping to 20-to-30 or more before Bear Stearns and Lehman Brothers.” Today financial deleveraging is reversing “the trend that financed much global growth in recent years.”
  • New government regulations: In “The Age of Deleveraging” Shilling warns: “increased government regulation and involvement in major economies will stifle innovation and reduce efficiency, slowing growth.”
  • Low commodity prices: “Earlier high prices spurred overinvestment and overcapacity, as usual, is coming on stream just in time for the recent drop in demand.” Going forward, “lower commodity prices will limit spending by commodity-producing lands” inhibiting future global growth: “The likelihood of continuing sluggish growth in coming years is a distinct depressing effect.”
  • More fiscal restraint: “Developed countries are moving toward fiscal restraint.” And while such policies may not be “needed now they have resulted from the ongoing political gridlock between the Democrats and Republicans” that is definitely slowing economic growth.
  • New global protectionism: “Rising protectionism will slow, even eliminate, global growth. Recessions spawn economic nationalism and protectionism, and the deeper the slump, the stronger are those tendencies.” It’s easier “to blame foreigners for domestic woes and take actions to protect the home turf.”
  • Domestic housing slowdown: In the future “the U.S. housing market will be restrained by excess inventories and loss of homeowner investment appeal.”
  • Consumer-spending cutbacks: As deflation continues, buyers will “curtail spending” anticipating lower prices as sellers get more competitive.
  • State/local governments cuts: States and municipalities “will continue to contract” meaning less to spend, lower revenues, fewer services, less money from the federal government and more costs shifted to the people.
Yes, Shilling sees things getting worse, with real GDP growth at 2.0% annually for at least for the rest of this decade. Then as Grantham and many others warn we’re on the “Road to Zero Growth,” America’s GDP growth collapsing under 1% by 2050.
Of course, none of these facts will stop a bull from being a perpetual optimist with a positive mental attitude. Indeed, it’s a motivation to stick to your convictions. Why? It’s in their nature, in their DNA, with an Invisible Hand gyroscope pointing their minds at the “Bright Side of Life.”
No matter that America’s bulls have already lost roughly $10 trillion twice this decade — after the 2000 dot-com crash and the 2008 bank meltdown — they still believe “this time will be different,” in spite of 800 years evidence to the contrary. And you can’t just turn off an optimistic bull’s brain. Never can.
So secretly you must admire their innocent faith. Yes, eventually these nine economic macrotrends will wake all of America up to reality. But until then, enjoy Robert Mankoff’s brilliant New Yorker cartoon: “While the end-of-the-world scenario will be rife with unimaginable horrors,” predicts the CEO of a leading Wall Street bank, “we believe that the pre-end period will be filled with unprecedented opportunities for profit.”
Paul B. Farrell is a MarketWatch columnist based in San Luis Obispo, Calif. Follow him on Twitter @MKTWFarrell.

More Children in Greece Are Going Hungry

ATHENS — As an elementary-school principal, Leonidas Nikas is used to seeing children play, laugh and dream about the future. But recently he has seen something altogether different, something he thought was impossible in Greece: children picking through school trash cans for food; needy youngsters asking playmates for leftovers; and an 11-year-old boy, Pantelis Petrakis, bent over with hunger pains.
“He had eaten almost nothing at home,” Mr. Nikas said, sitting in his cramped school office near the port of Piraeus, a working-class suburb of Athens, as the sound of a jump rope skittered across the playground. He confronted Pantelis’s parents, who were ashamed and embarrassed but admitted that they had not been able to find work for months. Their savings were gone, and they were living on rations of pasta and ketchup.
“Not in my wildest dreams would I expect to see the situation we are in,” Mr. Nikas said. “We have reached a point where children in Greece are coming to school hungry. Today, families have difficulties not only of employment, but of survival.”
The Greek economy is in free-fall, having shrunk by 20 percent in the past five years. Unemployment is more than 27 percent, the highest in Europe, and 6 of 10 job seekers say they have not worked in more than a year. Those dry statistics are reshaping the lives of Greek families with children, more of whom are arriving at schools hungry or underfed, even malnourished, according to private groups and the government itself.
Last year, an estimated 10 percent of Greek elementary- and middle-school students suffered from what public health professionals call “food insecurity,” meaning they faced hunger or the risk of it, said Dr. Athena Linos, a professor at the University of Athens Medical School who also heads a food assistance program at Prolepsis, a nongovernmental public health group that has studied the situation. “When it comes to food insecurity, Greece has now fallen to the level of some African countries,” she said.
Unlike those in the United States, Greek schools do not offer subsidized cafeteria lunches. Students bring their own food or buy items from a canteen. The cost has become insurmountable for some families with little or no income. Their troubles have been compounded by new austerity measures demanded by Greece’s creditors, including higher electricity taxes and cuts in subsidies for large families. As a result, parents without work are seeing their savings and benefits rapidly disappear.
“All around me I hear kids saying: ‘My parents don’t have any money. We don’t know what we are going to do,’ ” said Evangelia Karakaxa, a vivacious 15-year-old at the No. 9 junior high school in Acharnes.
Acharnes, a working-class town among the mountains of Attica, was bustling with activity from imports until the economic crisis wiped out thousands of factory jobs.
Now, several of Evangelia’s classmates are frequently hungry, she said, and one boy recently fainted. Some children were starting to steal for food, she added. While she did not excuse it, she understood their plight. “Those who are well fed will never understand those who are not,” she said.
“Our dreams are crushed,” added Evangelia, whose parents are unemployed but who is not in the same dire situation as her peers. She paused, then continued in a low voice. “They say that when you drown, your life flashes before your eyes. My sense is that in Greece, we are drowning on dry land.”
Alexandra Perri, who works at the school, said that at least 60 of the 280 students suffered from malnutrition. Children who once boasted of sweets and meat now talk of eating boiled macaroni, lentils, rice or potatoes. “The cheapest stuff,” Ms. Perri said.
This year the number of malnutrition cases jumped. “A year ago, it wasn’t like this,” Ms. Perri, said, fighting back tears. “What’s frightening is the speed at which it is happening.”
The government, which initially dismissed the reports as exaggerations, recently acknowledged that it needed to “tackle the issue of malnutrition in schools.” But with priorities placed on repaying bailout funds, there is little money in Greek coffers to cope.
Mr. Nikas, the principal, said he knew the Greek government was laboring to fix the economy. Now that talk of Greece’s exiting the euro zone has disappeared, things look better to the outside world. “But tell that to the family of Pantelis,” he said. “They don’t feel the improvement in their lives.”
In the family’s darkened apartment near the school, Themelina Petrakis, Pantelis’s mother, opened her refrigerator and cupboards one recent weekend. Inside was little more than a few bottles of ketchup and other condiments, some macaroni and leftovers from a meal she had gotten from the town hall.
The family was doing well and was even helping others in need until last year. It was able to afford a spacious apartment with a flat-screen TV and a PlayStation.

Odds of COMEX Default Increasing Exponentially

A”default” can occur if too many longs stand for delivery.  This very well could happen and the likelihood has risen in just the last 2 trading days as open interest has increased rather than decreased.  If 10% of the longs stood for delivery in Silver, the inventory would be wiped out.  The fact that the “drop” in price was CAUSED by new shorts opening positions rather than longs scurrying away tends support the case that the long position is a resolute buyer with deep, VERY DEEP pockets.  If they hold in and meet the margin calls created by the price drop AND higher (18+%) margin requirements as of yesterday, the shorts and the exchange itself have a very big problem on their hands as the availability to deliver on the open interest just does not exist. 
If open interest does not decline after the drop in price and this latest margin hike (and maybe more to come) the odds of longs standing in a big way for delivery increases exponentially.

Submitted By Bill Holter, Miles Franklin Ltd,:
When there are more buyers than sellers…the “price” goes up, when there are more sellers than buyers…the “price” goes down…right?  This is the way it works?  Or is supposed to?  As you know, we live in a world where nearly everything real has 2 markets, the paper market and the physical market.  Originally the paper markets were created so that farmers could “hedge” their crop and outright buyers or speculators could have access to the commodity.  This has morphed into a situation where the paper markets have outsized the real physical markets and become more important to “price”.  It is a “Wag the Dog” scenario where in Gold for example there are at least 100 “paper” ounces for every real ounce (thank you Jeffery Christian for this admission) and the paper markets have “made” the price for years now.  We knew all of this before and what has happened since last Wednesday only supports this view and confirms it.
First let’s see what has happened in the paper markets.  The open interest in Gold went up during Friday’s trading by some 13,000 contracts while Silver dropped about 1,000 contracts, yesterday Gold open interest increased another 10,000 contracts and Silver increased by 3,500.  So, while Gold and Silver’s price was monkey hammered, the amount of contracts open actually increased?  How can this be?  Weren’t people “selling”, the price went down…more sellers than buyers…right?   Well yes, what apparently happened was that there WERE more sellers, the increase in open interest was initiated by “short sellers”.  Were the last 2 trading days an event where “longs” finally panicked out and sold, open interest would have gone down, it did not and in Gold’s case the open interest actually rose substantially.  The obvious fingerprints of what GATA has been saying for 15 years now are all over this move, it was a fake and “made” to happen!
Now let’s look at the physical side of the market, on Friday Miles Franklin did 116 orders, there was only 1 buyback, yesterday they did 90 orders with only 3 being sells.  So what is this “buy to sell” ratio, at least 30 to 1 buys over sells?  Does this sound like a panicked market where everyone wants out of the water?  We also can look at what other dealers are doing by going online to look at pricing and availability.  “Junk” for all intents and purposes is gone, the only thing left are the scraps that your local dealer has to sell as “bags” are not available and were last trading at $5 (20%) over spot on Friday morning.  Other Silver product has become spotty as to availability and premiums rose dramatically over the last week…low price in the physical market IS doing what it is supposed to do, it is bringing out demand and drying up supply.  But, if real demand has been exploding and supply is tight then how did the price get here in the first place?  It is obvious that the futures market “wagged this dog” BIGtime!
As I wrote yesterday, I can see the possibility of a force majeure in both Gold and Silver.  I should have clarified and written more correctly however.  A force majeure is when supply gets disrupted which the mine collapse in Utah could cause but not immediately as they can process existing ore, the Barrick situation pertains only to future potential production (which is sorely needed).  A”default” on the other hand can occur if too many longs stand for delivery.  This very well could happen and the likelihood has risen in just the last 2 trading days as open interest has increased rather than decreased.  If something like 10% of the longs stood for delivery in Silver, the inventory would be wiped out.  The fact that the “drop” in price was CAUSED by new shorts opening positions rather than longs scurrying away tends support the case that the long position is a resolute buyer with deep, VERY DEEP pockets.  If they hold in and meet the margin calls created by the price drop AND higher (18+%) margin requirements as of yesterday the shorts and the exchange itself have a very big problem on their hands as the availability to deliver on the open interest just does not exist.  
I will say this, if open interest does not decline after the drop in price and this latest margin hike (and maybe more to come) the odds of longs standing in a big way for delivery increases exponentially.  As for the physical markets, the longer they keep the “price” down the more and more physical metal will be gobbled up.  We were already extremely tight in the physical Silver market, the last 2 days price action has cleaned up inventory and left shelves nearly bare of Silver.  This is what you’d expect in a real market.  As always, Mother Nature will take care of price when availability is short.  Premiums have risen as supply dwindled.  I do not believe that the “price” in the physical market can stay where it is now for very long, otherwise we will have a supply “event” where there is none to be had…UNTIL price rises to entice sellers.  This low price will also add incentive to paper longs to stand for delivery if the physical price is far higher than the paper price.  It would simply be an arbitrage where COMEX Silver is purchased at one price and sold on the physical market for another (higher) price.  It very well may be that the COMEX is engineering it’s own demise that ends in a default because they so blatantly defied supply and demand in the real world. 
Regards,  Bill H.

U.S. Fed Balance Sheet Grows Again In Latest Week

“The Fed’s balance sheet liabilities, a broad gauge of its lending to the financial system, stood at $3.210 trillion on April 10, compared with $3.198 trillion on April 3.
The Fed’s holdings of Treasuries totaled $1.814 trillion as of Wednesday, up from $1.806 trillion the previous week”

The ECB, Ransom Notes and Financial Gangsterism

The ECB, Ransom Notes and Financial Gangsterism

Physical Bullion Demand on Fire

Late last week and into the early part of this week, gold and silver prices experienced some of the largest daily price drops, both on a dollars and cents basis and on a percentage basis, than has been seen in years or decades.

Normally, prices drop because of an actual or an anticipated glut of supply. But that isn’t what is happening with physical gold and silver right now. There are reports out of Japan of people trying to get rid of their yen (which the government is promising to depreciate rapidly) and into assets like precious metals that will hold their value – and having to wait in line as long as three hours to be able to buy gold and silver.

Yesterday in our store, the further price drop brought out even more eager buyers of precious metals. Even though we recently moved to much larger quarters (the size of the showroom quadrupled and we added several phone lines), customers were waiting as long as 30-60 minutes to be served. Many people simply could not get through on the telephone lines because they were jammed with calls.

The premium over silver value on $1,000 bags of U.S. 90 percent silver coin topped 20 percent. Dealers and wholesalers have almost nothing in stock for immediate delivery and premiums are rising across the board.

Because of slowing deliveries on bullion-priced physical gold and silver coins and ingots, we had to implement a limitation of $5,000 in sales to new mail-order customers. We accepted orders from established mail-order customers and from in-store customers who were ready to made immediate payments. (Note: there is value in having a relationship with a coin dealer who will take care of you on days like today rather than risking not being able to trade at all because a dealer doesn’t know you.)

I’ve heard all the technical and chart signs that several commentators refer to in saying that gold and silver prices are due to decline. However, just charting price movements without examining why prices are moving only gives you half the story. That leaves you at risk of making incorrect decisions that will cost you dearly in the future, simply because you don’t understand what is going on today.

Here’s what I seen going on in the physical market. In COMEX trading, silver demand has soared to near record levels, meaning that there are a huge number of buyers as the price has been dropping for more than the past six months. This continuing strong interest in purchasing precious metals puts the value of the U.S. dollar at risk. If people are trying to get out of paper currencies that are falling as a result of worldwide currency devaluation wars, their ability to do so only accelerates the decline of major currencies.

For the U.S. government, issuer of what until now has been the international reserve currency, this risk of a falling dollar would normally push up U.S. interest rates for all debt, including U.S. government debt. Therefore, the U.S. government has a strong incentive to tell its trading partners and allies to clobber the prices of gold and silver. In theory, if the prices can be suppressed enough that they break down through key technical trading points, investors with long positions can be intimidated into selling their holdings. Since much of the trading on the COMEX market involves leveraged trading up to about 20 times the cash investment, it isn’t that hard to create a string of temporary margin calls that will force holders of long positions out of the market.

That is exactly what has happened with traders of paper contracts on a large scale in the past week. Depending on which expert you talk to, last Friday, Merrill Lynch supposedly sold between 3.4 and 4 million ounces of gold contracts at the COMEX open. Total paper gold sales last Friday totaled from just under 13 to 16 million ounces. These quantities amount to $20 billion or so of gold sales, that leveraged sellers could accomplish with the use of barely $1 billion in funds.

Yesterday, there was a large early sale of about 2.25 million ounces and a total of almost 5 million ounces of paper gold sold into the market in the hour before the London fix. Sales of so much gold had the desired effect to benefit the U.S. government – lots of investors with long positions sold out. As these long positions were closed, that put even more downward pressure on prices.

At some point, gold prices could fall so low that primary mines will not be able to operate, which would cut supplies. There are some large gold mining operations with cash costs now exceeding Monday’s $1,360.60 closing gold price. Most silver is produced as a co-product or by-product of other commodities. With declining copper prices this year, some mine operators have recently announced plans to trim output, which also means that new silver supplies will decline. One mine’s planned reduction would draw down worldwide silver mining output by 0.5 percent all by itself.

Knowing that the prices of gold and silver have been blatantly suppressed in the past week means that it will be much more difficult to achieve any significant declines in the near future. Prices could drop slightly from where they closed Monday night, or they could stay relatively close to the new lows achieved in the past few days. It is also possible that there will be some degree of rebound, possibly even this week. 

One analyst made a sage observation about why gold and silver prices have been going down when many indicators point to increases. He said, “Gold and silver prices will rise when China and Russia decide that it is time for them to do so.” There is a lot of truth to this sentiment. 

So far in 2013, China has imported about 25 million ounces of gold to go with the world-leading domestic mine output. Russia has also made multiple purchases. Yesterday, while the U.S. government’s trading partners and heavily margined long position investors were selling the nearly 5 million ounces, central banks purchased about 1.8 million ounces. These central banks are seeking to take physical delivery, not paper contracts. But chart watchers and technical traders didn’t take such information into account when making decisions on gold and silver holdings.

In the long-term, it is important to understand that none of the global financial crises have suddenly been resolved, to explain why precious metals prices fell. The outlook for gold and silver 2-5 years out is for extraordinary appreciation. But this appreciation will likely only be enjoyed by those who have physical metals in their direct custody. Unfortunately, this longer-term outlook doesn’t tell you what will happen with prices in the next month.

Patrick A. Heller is the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He owns Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at Other commentaries are available at Coin Week and He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” ( His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at

History Tells Us That A Gold Crash + An Oil Crash = Guaranteed Recession

by Michael
History Tells Us That A Gold Crash + An Oil Crash = Guaranteed Recession
Is the United States about to experience another major economic downturn?  Unfortunately, the pattern that is emerging right now is exactly the kind of pattern that you would expect to see just before a major stock market crash and a deep recession.  History tells us that when the price of gold crashes, a recession almost always follows.  History also tells us that when the price of oil crashes, a recession almost always follows.  When both of those things happen, a significant economic downturn is virtually guaranteed.  Just remember what happened back in 2008.  Gold and oil both started falling rapidly in July, and in the fall we experienced the worst financial crisis that the U.S. had seen since the days of the Great Depression.  Well, a similar pattern seems to be happening again.  The price of gold has already crashed, and the price of a barrel of WTI crude oil has dropped to $86.37 as I write this.  If the price of oil dips below $80 a barrel and stays there, that will be a major red flag.  Meanwhile, we have just seen volatility return to the financial markets in a big way.  When volatility starts to spike, that is usually a clear sign that stocks are about to go down substantially.  So buckle your seatbelts – it looks like things are about to get very, very interesting.
Posted below is a chart that shows what has happened to the price of gold since the late 1960s.  As you will notice, whenever the price of gold rises dramatically and then crashes, a recession usually follows.  It happened in 1980, it happened in 2008, and it is happening again…
The Price Of Gold
A similar pattern emerges when we look at the price of oil.  During each of the last three recessions we have seen a rapid rise in the price of oil followed by a rapid decline in the price of oil…
The Price Of Oil
That is why what is starting to happen to the price of oil is so alarming.  On Wednesday, Reuters ran a story with the following headline: “Crude Routed Anew on Relentless Demand Worries“.  The price of oil has not “crashed” yet, but it is definitely starting to slip.
As you can see from the chart above, the price of oil has tested the $80 level a couple of times in the past few years.  If we get below that resistance and stay there, that will be a clear sign that trouble is ahead.
However, there is always the possibility that the recent “crash” in the price of gold might be a false signal because there is a tremendous amount of evidence emerging that it was an orchestrated event.  Anabsolutely outstanding article by Chris Martenson explained how the big banks had been setting up this “crash” for months…
In February, Credit Suisse ‘predicted’ that the gold market had peaked, SocGen said the end of the gold era was upon us, and recently Goldman Sachs told everyone to short the metal.
While that’s somewhat interesting, you should first know that the largest bullion banks had amassed huge short positions in precious metals by January.
The CFTC rather coyly refers to the bullion banks simply as ‘large traders,’ but everyone knows that these are the bullion banks.  What we are seeing in that chart is that out of a range of commodities, the precious metals were the most heavily shorted, by far.
So the timeline here is easy to follow.  The bullion banks:
  1. Amass a huge short position early in the game
  2. Begin telling everyone to go short (wink, wink) to get things moving along in the right direction by sowing doubt in the minds of the longs
  3. Begin testing the late night markets for depth by initiating mini raids (that also serve to let experienced traders know that there’s an elephant or two in the room)
  4. Wait for the right moment and then open the floodgates to dump such an overwhelming amount of paper gold and silver into the market that lower prices are the only possible result
  5. Close their positions for massive gains and then act as if they had made a really prescient market call
  6. Await their big bonus checks and wash, rinse, repeat at a later date
While I am almost 100% certain that any decent investigation by the CFTC would reveal that market manipulating ‘dumping’ was happening, I am equally certain that no such investigation will occur.  That’s because the point of such a maneuver by the bullion banks is designed to transfer as much wealth from ‘out there’ and towards the center, and the CFTC is there to protect the center’s ‘right’ to do exactly that.
You can read the rest of that article right here.
There are also rumors that George Soros was involved in driving down the price of gold.  The following is an excerpt from a recent article by “The Reformed Broker” Joshua Brown
And over the last week or so, the one rumor I keep hearing from different hedge fund people is that George Soros is currently massively short gold and that he’s making an absolute killing.
Once again, I have no way of knowing if this is true or false.
But enough people are saying it that I thought it worthwhile to at least mention.
And to me, it would make perfect sense:
1. Soros is a macro investor, this is THE macro trade of the year so far (okay, maybe Japan 1, short gold 2)
2. Soros is well-known for numerous market aphorisms and neologisms, one of my faves being “When I see a bubble, I invest.”  He was heavily long gold for a time and had done well while simultaneously referring to it publicly as a speculative bubble.
3. He recently reported that he had pretty much exited the trade in gold back in February. In his Q4 filing a few weeks ago, we found out that he had sold down his GLD position by about 55% as of the end of 2012 and had just 600,000 shares remaining. That was the “smartest guy in the room” locking in a profit after a 12 year bull market. 
4. Soros also hired away one of the most talented technical analysts out there, John Roque, upon the collapse of Roque’s previous employer, broker-dealer WJB Capital. No one has heard from the formerly media-available Roque since but we can only assume that – as a technician – the very obvious breakdown of gold’s long-term trend was at least discussed. And how else does one trade gold if not by using technicals (supply/demand) – what else is there? Cash flow? Book value?
5. Lastly, the last public interview given by George Soros was to the South China Morning Post on April 4th. He does not mention any trading he’s doing in gold but he does reveal his thoughts on it having been “destroyed as a safe haven”
It is also important to keep in mind that this “crash” in the price of “paper gold” had absolutely nothing to do with the demand for physical gold and silver in the real world.  In fact, precious metals retailers have been reporting that they have been selling an “astounding volume” of gold and silver this week.
But that isn’t keeping many in the mainstream media from “dancing on the grave” of gold and silver.
For example, New York Times journalist Paul Krugman seems absolutely ecstatic that gold has crashed.  He seems to think that this “crash” is vindication for everything that he has been saying the past couple of years.
In an article entitled “EVERYONE Should Be Thrilled By The Gold Crash“, Business Insider declared that all of us should be really glad that gold has crashed because according to them it is a sign that the economy is getting better and that faith in the financial system has been restored.
Dan Fitzpatrick, the president of, recently told CNBC that people are “flying out of gold” and “getting into equities”…
“There have been so many reasons, and there remain so many reasons to be in gold,” Fitzpatrick said, noting currency debasement and the fear of inflation. “But the chart is telling you that none of that is happening. Because of that, you’re going to see people just flying out of gold. There’s just no reason to be in it.Traders are scaling out of gold and getting into equities.”
Personally, I feel so sorry for those that are putting their money in the stock market right now.  They are getting in just in time for the crash.
As CNBC recently noted, a very ominous “head and shoulders pattern” for the S&P 500 is emerging right now…
A scary head-and-shoulders pattern could be building in the S&P 500, and this negative chart formation would be created if the market stalls just above current levels.
“It’s developing and it’s developing fast,” said Scott Redler of on Wednesday morning.
Even worse, volatility has returned to Wall Street in a huge way.  This isusually a sign that a significant downturn is on the way…
Call options buying recently hit a three-year high for the CBOE’s Volatility Index, a popular measure of market fear that usually moves in the opposite direction of the Standard & Poor’s 500 stock index.
A call buy, which gives the owner the option to purchase the security at a certain price, implies a belief that the VIX is likely to go higher, which usually is an ominous sign for stocks.
“We saw a huge spike in call buying on the VIX, the most in a while,” said Ryan Detrick, senior analyst at Schaeffer’s Investment Research. “That’s not what you want to hear (because it usually happens) right before a big pullback.”
The last time call options activity hit this level, on Jan. 13, 2010, it preceded a 9 percent stock market drop that happened over just four weeks, triggered in large part by worries over the ongoing European debt crisis.
And according to Richard Russell, the “smart money” has already been very busy dumping consumer stocks…
What do billionaires Warren Buffet, John Paulson, and George Soros know that you and I don’t know? I don’t have the answer, but I do know what these billionaires are doing. They, all three, are selling consumer-oriented stocks. Buffett has been a cheerleader for US stocks all along.
But in the latest filing, Buffett has been drastically cutting back on his exposure to consumer stocks. Berkshire sold roughly 19 million shares of Johnson and Johnson. Berkshire has reduced his overall stake in consumer product stocks by 21%, including Kraft and Procter and Gamble. He has also cleared out his entire position in Intel. He has sold 10,000 shares of GM and 597,000 shares of IBM.
Fellow billionaire John Paulson dumped 14 million shares of JP Morgan and dumped his entire position in Family Dollar and consumer goods maker Sara Lee. To wrap up the trio of billionaires, George Soros sold nearly all his bank stocks including JP Morgan, Citigroup and Goldman Sachs. So I don’t know exactly what the billionaires are thinking, but I do see what they’re doing — they are avoiding consumer stocks and building up cash.
… the billionaires are thinking that consumption is heading down and that America’s consumers are close to going on strike.
So what are all of those billionaires preparing for?
What do they know that we don’t know?
I don’t know about you, but when I start putting all of the pieces that I have just discussed together, it paints a rather ominous picture for the months ahead.
At some point, there will be another major stock market crash.  When it happens, we will likely see even worse chaos than we saw back in 2008.  Major financial institutions will fail, the credit markets will freeze up, economic activity will grind to a standstill and millions of Americans will lose their jobs.
I sincerely hope that we still have at least a few more months before that happens.  But right now things are moving very rapidly and it is becoming increasingly clear that time is running out.
Time Is Running Out

Corporate Revenues Miss, a False Breakout in the S&P 500, and Europe’s Canary in the Coalmine is Out Cold

by Phoenix Capital Research

The markets moved higher yesterday because frankly Tuesday is the day for upside moves: thus far in 2013, we’ve had 13 straight Tuesday gains. This, combined with the very short-term oversold basis of several markets, mainly Gold and commodities, gave the “risk on” trade a bump.

From a technical perspective, the S&P 500 is in danger of breaking several critical trendlines:

The rising wedge pattern is a consolidation pattern that can break either up or down. One of the trickiest issues is a “false breakout,” which occurs when the initial move out the pattern proves to be short-lived. False breakouts are usually followed by violent moves in the opposite direction as traders realize the initial move was false.

In today’s market, that direction would be down.

We get additional signs of trouble from Spain. It was Spain that nearly took down Europe last year. In this sense, the Spanish stock market, the Ibex, has become the proverbial “canary in the coalmine” for Europe. If the Ibex is rallying, investors believe Europe is alright. If the Ibex breaks down, then the European Crisis is back.

The Ibex has stalled and is in danger of breaking critical support:

Final indications of trouble come from earnings. We’ve had a slew of corporations beating earnings guidance (which isn’t too difficult given how easy it is to manipulate profits) but missing revenues.

Coke, Goldman Sachs, Yahoo! all did this yesterday. They join Blackberry, US Bancorp, St Jude Medical and others.

Revenues are much harder to fudge than profits. They are more closely tied to the economy. So if revenues are missing estimates, it can be a warning that the economy is slowing.

Investors take note, the markets are sending multiple signals that things are not going well in the world.

And stocks are always the last asset class to realize this.

If you’re not preparing for a potential bout of deflation in the markets, we can help you to do so. We offer a FREE Special Report outlining actions you can take to protect your wealth and loves ones from market risk. It’s calledProtect Your Portfolio and you can download a FREE copy here:

Best Regards,
Graham Summers

Faber: Gold may fall to $1300 before rebound


Faber on the fall in gold prices:

“I love the markets. I love the fact that gold is finally breaking down. That will offer an excellent buying opportunity. I would just like to make one comment. At the moment, a lot of people are knocking gold down. But if we look at the records, we are now down 21% from the September 2011 high. Apple is down 39% from last year’s high. At the same time, the S&P is at about not even up 1% from the peak in October 2007. Over the same period of time, even after today’s correction gold is up 100%. The S&P is up 2% over the March 2000 high. Gold is up 442%. So I am happy we have a sell-off that will lead to a major low. It could be at $1400, it could be today at $1300, but I think that the bull market in gold is not completed.”

“$1300. Nobody knows for sure but I think the fundamentals for gold are still intact. I would like to make one additional comment. Today we have commodities breaking down including gold. At the same time we have bonds rallying very strongly. If you stand aside and you look at these two events, it would suggest that they are strongly deflationary pressures in the system. If that was the case, I wouldn’t buy stocks or sovereign bonds because the stock market would be hit by disappointing profits if there was a deflationary environment.”

On gold falling lower if we have a deflationary environment:

“Yes, I agree. That’s why I said if the gold market collapse is saying something about deflation and at the same time we have this sharp rise in bond prices and the signals are correct that we have deflation, I wouldn’t buy stocks because in a deflationary environment, corporate profits will disappoint very badly.”

On whether a deflationary environment is possible right now:

“Everything is possible…In the economy of the cuckoo people that populate central banks, everything is possible. What you have is gigantic bubbles, the NASDAQ in 2000, then the housing bubble and then commodities in 2008 when oil went from $78 to $147 before plunging to $32 within sixth months. That kind of volatility comes from expansionary monetary policies from money-printing.”

“All I’m saying is that I think we’re going to have a major low in gold in within the next couple of weeks. Gold, as of today, you should actually buy as a trade. I think it can rebound in the next two days by $40.”

On why gold will rebound $40 in the next two days:

“Because we are about in gold as oversold and we were essentially during the crash in 1987. From there we have a strong rebound. All I am saying as a trader I would probably enter the market quickly for a rebound of $20 or $40. From a longer term perspective, I would give it some time. We may go lower. I am not worried. I am happy gold is finally coming down, which will provide a very good entry point.”

On whether investors should also stay in cash:

“My argument is that you should always have in this kind of high volatility environment a fair amount of cash because opportunities will always arise again and again and if you have cash you can then buy assets at a reasonable price. I think Patience is very important in this environment. The question is, how do you hold your cash? Hopefully not with a Cyprus bank.”

After the Gold Rout: Blame Central Bank Manipulation, Says GATA’s Powell

Gold rose $25 an ounce Tuesday but only managed to recoup a small portion of a wicked two-day slide that wiped out 14% of its value. The speed and depth of gold’s decline drew comparisons to the 1987 stock market crash and prompted veteran trader Dennis Gartman to declare: “We've never… ever… ever… seen anything like what we've witnessed in the past two trading sessions.”
Nomura analyst Tyler Broda echoed those sentiments in a note to clients: "We are running out of superlatives to attach to the gold price move since last Friday."
Gold was down slightly in recent trading Wednesday, suggesting Tuesday’s rally may indeed have been a “dead cat bounce” vs. a sign the selling squall was over.
Related: As Gold Prices Collapse, Investors Seek Answers
As the dust continues to settle after the gold rout, market participants and scribes are still trying to come up with a rationale for the drama. Some of the commonly cited reasons include:
  • India’s recent decision to increase its gold import tax to 6% from 3%.
  • Reports Cyprus would be forced to sell gold to pay for part of its “bail-in”. (On Wednesday, Cyprus' finance minister Haris Georgiades confirmed his government has committed to sell about 400 million of 'excess' gold reserves.)
  • Bitcoin’s collapse, on the theory many of the same investors were long both “alternative” currencies.
  • China’s weak GDP report, which prompted a broad flight from commodities, including copper and energy as well as gold.
  • Selling begets selling: A lot of 'hot money' has poured into gold in recent years and speculators were quick to rush for the exits when prices started to falter. To be sure, gold's sharp decline is a reminder that momentum is a double-edged sword.
But such explanations miss the forest for the trees, according to Chris Powell, cofounder of the Gold Anti-Trust Action Committee (GATA). The organization's goal is to “expose, oppose, and litigate against collusion to control the price and supply of gold and related financial instruments,” according to its Web site.
“I’m pretty confident it was a central bank operation,” Powell says of the huge drop. “Financial journalism does its best to contrive other reasons but there was too much selling for it to be any source other than an inspiration from central banks.”
According to Powell, global central banks flooded the futures markets in London and New York with sell orders to prevent a short squeeze that was developing. He claims a similar operation occurred in March 1999 when the Bank of England announced plans to auction 58% of its gold.
“Once again central banks had to intervene to protect their currencies and bonds against a rise in gold prices,” he says. “This does happen every decade or so – the gold market gets tight and central banks have to intervene to get the price down.”
By his own admission, Powell “can’t prove” his theories but the folks at GATA believe them with religious fervor. Among other documents, he pointed me to a “secret IMF” report from 1999 that purportedly reveals such machinations.
To his credit, Powell also be believes the price of gold was being manipulated during its huge, historic 650% rally from August 1999 to August 2011.
That was a “controlled retreat by central bankers,” he says. “A free market would not trade so steadily [higher] like that and a free market would not crash like it did without a little help.“
Part of the beauty of GATA’s theories is they cannot be disproven; academics call this an “unfalslifiable theory." But I will note a few facts on the other side of this argument:
- Although the New York Fed's vault is the repository for gold owned by other central banks and the U.S. Treasury, the Fed doesn't own any gold. "None of the gold stored in the vault belongs to the New York Fed or the Federal Reserve System," according to its Website.
The "gold certificates" listed on the Fed's balance sheet are a "historic accounting" from when the Fed used to own gold, according to a spokesman. "The Fed doesn't own gold" and is not involved in buying or selling on behalf of other central banks, he said. "Other reserve banks hold gold, you could ask them."
- The Washington Agreement, signed during the IMF meeting, was designed to limit annual gold sales by central banks to prevent a repeat of the 1999 selloff incited by the BOE, as noted above. The agreement was last renewed in 2009 and remains in force, compelling central banks to limit annual gold sales to 400 tonnes. "They live by that," says Mark Dow, a former IMF staff economist turned hedge fund manager and blogger, who doesn't believe the "big conspiratorial plot" explanation for gold's recent washout.
Aaron Task is the host of The Daily Ticker and Editor-in-Chief of Yahoo! Finance. You can follow him on Twitter at @aarontask or email him at

Rolling Stone: Inside The FBI Plot Against Occupy

How the government turned five stoner misfits into the world's most hapless terrorist cell.
Rolling Stone
Thunder rumbled and rain pattered on the leaves as Connor Stevens tramped through the darkness down a wooded path to the base of the Brecksville-Northfield High Level Bridge. A sad-eyed 20-year-old poet from the Cleveland suburbs, Stevens was crouched in the foliage, his baby face obscured by a bushy lumberjack's beard. Beside him ducked two friends from Occupy Cleveland – the group that had come to define Stevens and his place in the world – both as gaunt and grungy as Stevens himself. Farther up the trail, Stevens knew, three other comrades were acting as lookouts. Gingerly, the young men opened the two black toolboxes they'd carried down from their van. Inside were eight pounds of C4 explosives.
They were actually going through with it. The six of them were going to blow up a bridge.
That they were on the brink of something so epic was surprising, even to the crew, a hodgepodge of drifters plus a pair of middle-class seekers: quiet Stevens and puppyishly excitable Brandon Baxter, also 20. Anarchists who had grown disenchanted with the Occupy movement, which they considered too conservative, they yearned to make a radical statement of their own – to send a message to corporate America, its corrupt government and that invisible grid underlying it all, the System. They'd joined Occupy Cleveland in the fall, but over the winter they'd waited in vain for the group to pick a direction before finally taking matters into their own hands. For weeks they'd fantasized about the mayhem they'd wreak, puerile talk of stink bombs and spray paint that had anted up to discussion of all the shit they'd blow up if only they could. But the grandiosity of their hopes stood in stark contrast to their mundane routine. They spent their days getting stoned at their Occupy­subsidized commune in a downtown warehouse, squabbling over dish duty and barely making their shifts at the Occupy Cleveland info tent; when they managed to scrounge up a couple of cans of Spaghettios for dinner, it was celebrated as an accomplishment. If not for the help of their levelheaded comrade Shaquille Azir, who at this critical moment stood as lookout, hissing, "How much longer is this gonna take?" the plot might never have come together.
The boys anxiously fiddled with the safety switch on one of the IEDs. Even on this April night, as they planted two bombs, the plan felt slapdash. No one knew how to handle the explosives. They had no getaway plan. At one point they'd discussed closing the bridge with traffic cones to minimize casualties – 13,000 vehicles crossed the bridge daily – but there was no mention of that now. Some of the accomplices weren't even clear on the evening's basic agenda. "Do we plant tonight and go boom tomorrow?" Baxter had asked in the van. "No, we're going to detonate these tonight," someone had clarified.
The red light on the other IED winked on, signaling it was armed. "One is good to go," Stevens announced. "We just gotta do this one." A night-vision camera mounted nearby captured the boys' movements as they hunched around the second IED until its light shone. Then all six jogged back to the van, relief in their voices. "We just committed the biggest act of terrorism that I know of since the 1960s," Stevens said, as a recording device memorialized every word. All that was left now was for the boys to pick a location from which to push the detonators and go boom. They were feeling pretty good. They decided to go to Applebee's.
Nothing was destined to blow up that night, as it turns out, because the entire plot was actually an elaborate federal sting operation. The case against the Cleveland Five, in fact, exposes not just a deeply misguided element of the Occupy movement, but also a shadowy side of the federal government. It's hardly surprising that the FBI decided to infiltrate Occupy; given the movement's challenge of the status quo and its hectic patchwork of factions – including ones touting subversive agendas – the feds worried it could become a terrorist breeding ground. Since 9/11, the federal Joint Terrorism Task Force has been charged with preventing further terrorist attacks. But anticipating and disrupting terrorist plots require both aggressive investigative techniques and a staggering level of collaboration and resources; to pull together the Cleveland case alone, the FBI coordinated with 23 different agencies. The hope, of course, is that the results make it all worthwhile: The plot is detected and heroically foiled, the evildoers arrested, and the American public sleeps easier. The problem is that in many cases, the government has determined that the best way to capture terrorists is simply to invent them in the first place.
"The government has a responsibility to prevent harm," says former FBI counterterrorism agent Michael German, now the senior policy counsel for the ACLU. "What they're doing instead is manufacturing threatening events."
That's just how it went down in Cleveland, where the defendants started out as disoriented young men wrestling with alienation, identity issues and your typical bucket of adolescent angst. They were malleable, ripe for some outside influence to coax them onto a new path. That catalyst could have come in the form of a friend, a family member or a cause. Instead, the government sent an informant.
And not just any informant, but a smooth-talking ex-con – an incorrigible lawbreaker who racked up even more criminal charges while on the federal payroll. From the start, the government snitch nurtured the boys' destructive daydreams, egging them on every step of the way, giving them the encouragement and tools to turn their Fight Club-tinged tough talk into reality. To follow the evolution of the bombing plot under the informant's tutelage is to watch five young men get a giant federal-assisted upgrade from rebellious idealists to terrorist boogeymen. This process looks a lot like what used to be called entrapment.
Continue reading at Rolling Stone...

Peter Schiff "Gold May Very Well Go To A $1000! If It Does You'd Better Buy It!"

Peter Schiff "Gold May Very Well Go To A $1000! If It Does You'd Better Buy It!"

The “Guns Are Bad” Indoctrination of Children Continues: Full Scale ‘Active Shooter’ Drill TODAY at Clarence High School in NY

Sgt Report
Ed. Note: We received this tip from a reader who lives in the area. This is the letter sent out to parents by Clarence High School Principal Kenneth Smith. What caring parent would allow their kids to participate in this brainwashing? Sadly, most of them.  
from Clarence Schools:
On April 17, 2013, Clarence High School will be taking part in an intruder drill. The purpose of the drill is to test the response of the school district and emergency personnel. During this time, the school will practice “lockdown” procedures and “Drill in Progress” will display on the digital sign in front of the high school. The drill establishes a simulated “active shooter” situation. Plastic, non-firing weapons are used by the “intruder” and emergency responders.
An open community meeting will take place on April 25, 2013 at 7:00 pm in the high school auditorium to discuss the drill and what was learned.
Please read the letter linked at the bottom of this article for more details and information.
To read the the letter that went out to parents, click HERE.

Is Bernanke’s Worst Nightmare Just Around the Corner?

by Phoenix Capital Research

First off I want to say that all of us here at Phoenix Capital Research are sending our prayers to the victims of the Boston Terror Attacks. We sincerely hope none of you, our readers, or your loved ones were injured or harmed by these events.
The markets today are snapping back from yesterday’s sharp drop. However, in the bigger picture we believe that Ben Bernanke must be terrified.
The Fed and other Central banks of the world have done their darnedest to inflate away the debts of the developed world. These folks wantedmore than anything to create inflation… because it meant it was easier to service their debt loads provided interest rates stayed low.
It is beginning to look like they failed. The Fed has announced QE 3 and QE 4, the Bank of Japan just announced a $1.2 trillion stimulus, the European Central Bank has promised unlimited bond buying… and yet deflation looks to be rearing its head again.
Copper has taken out its “recovery’ trendline.

Oil is breaking down:

So is Gold:

These are all signs of rising deflation. If deflation IS back then Bernanke’s efforts to create inflation will have failed. IF this is the case, the Fed is literally out of bullets.
Investors take note, the global economy appears to be contracting again. China’s recent GDP miss is the just the latest in a series of economic surprises to the downside.
And stocks are always the last asset class to realize this.

We produced 72 straight winning trades (and not a SINGLE LOSER) during the first round of the EU Crisis. We’re now preparing for more carnage in the markets… having just seen another SIX trade winning streak…
To join us…

Best Regards,
Graham Summers

Buy PHYSICAL Gold. NOW: The Discount of a Lifetime: Or Why You Must Abandon the Fake Paper Gold Market

For previous articles by the author go to: Gordon Gekko's Blog -

They just showed their hands. The paper Ponzi pyramid is wobbling. It’s time to go in for the kill.

Let me explain. But first let’s get a handle on what’s happening:

“We’ve traded gold for nearly four decades and we’ve never … ever… EVER… seen anything like what we’ve witnessed in the past two trading sessions,”

Dennis Gartman, via The New York Times

“This is an orchestration (the smash in gold).  It’s been going on now from the beginning of April.  Brokerage houses told their individual clients the word was out that hedge funds and institutional investors were going to be dumping gold and that they should get out in advance…it is the Fed’s concern with the dollar because the dollar is being printed in huge quantities at the same time that other countries are abandoning the use of the dollar as international payment.

The exchange value of the dollar is (being) threatened, and if that collapses the Fed loses control over interest rates.  Then the bond market blows up, the stock market blows up, and the banks that are too big to fail, fail.  So it’s an act of desperation because they’ve got to establish in people’s minds that the dollar is the only safe place, it is the only safe haven, not gold, not silver, and not other currencies.

And to help protect this policy they have convinced or pressured the Japanese to inflate their own currency.  The Japanese are now going to print money like the Fed.  They are lobbying the ECB to print more.  So I see this as a dollar protection policy...I know where the gold is coming from in the market, it’s just paper.  It’s naked shorts, there is no gold there.  If somebody wanted to take delivery on those contracts nobody would be able to provide it.  I don’t know what the source of the (physical) gold is...

..I think the power of the West has already been lost.  When you have off-shored your manufacturing and professional service jobs, you’ve hollowed out your economy.  So gold or no gold, the United States economy has been severely damaged and I don’t think it can recover...

This gold business (smash in price) is something to do with the dollar….They are trying to destroy gold as a (safe) haven from the dollar in order to carry on the Fed’s policy of negative real interest rates.  That is what is driving the illegal policy of selling naked shorts in order to manipulate a market.  If you and I were to do something like this without the government’s instruction or protection, we would be arrested.  So the fact that it’s illegal, being done by the authorities, tells me that they are seriously worried about the dollar.

(All emphasis mine.)

Paul Craig Roberts, Former Assistant Secretary of the Treasury (via King World News)

If there is one thing this latest shock-and-awe “theater” in the Gold market tells us, it’s that the government and banksters (i.e. the oligarchy) must be REALLY pissing their pants. It doesn’t show their strength – it lays bare their weakness. They just made it abundantly clear (again) how important Gold is in their scheme of things. A rapidly rising Gold price would reveal the utter fraud of their paper money Ponzi scheme and reveal them as simple hucksters, charlatans and scamsters counterfeiting money and hiding behind all the elegant regalia. The emperor would be naked. Can’t let that happen. The franchise of the paper dollar – arguably the most profitable franchise in history enabling theft on a global scale - must be protected at all costs. Something is or must be about to go seriously wrong with their empire of fake paper money (perhaps the recent gyrations in the JGB market is a tell).

With this recent paper Gold market “drama” they have only shown their desperation and weakness. The level of their desperation this time is so great that they had their bought-and-paid-for shills in the media mouthpieces attack and mock Gold and its buyers even before the sell-off (which further goes to proves that it was orchestrated; I’ll provide more evidence below). Consider this in an article “Lust for Gold” which appeared in the New York Times on the 11th April by none other than the lead bankster shill and cheerleader Paul Krugman:

After all, historically, gold has been anything but a safe investment…John Maynard Keynes famously dismissed the Gold standard as a “barbarous relic”, noting the absurdity of yoking the fortunes of a modern industrial society to the supply of a decorative metal…for a while, rising gold prices helped create some credibility for the goldbugs even as their predictions about everything else proved wrong, but now gold as an investment has turned sour, too. So will we see prominent goldbugs change their views, or at least lose a lot of their followers.

Its funny how the paperbugs liken Gold buyers to a cult, while not realizing they themselves sound like one, with their irrational faith in and defense of paper money (well, not completely irrational - they know where their next paycheck is coming fromJ). While I may provide a full rebuttal to Mr. Krugman in a later article (it barely deserves one, childish and inane as it is), I will point out this: If Gold is so inconsequential and such a “barbarous relic”, why is the government lapdog media busy trying to discredit it and all those who buy it? I mean just look at the sheer gloating: