Friday, May 24, 2013

One in three children in Greece living in poverty: UNICEF

ATHENS, May 23 (Xinhua) -- About one in three children in recession-hit Greece live in poverty, according to a survey presented by the Greek branch of UNICEF.
Approximately 597,000 minors, which account for 30.4 percent of the total number of children, are facing poverty and social marginalization, UNICEF and University of Athens experts estimated based on data up to 2011. The figure is 9 percent more than that of 2010.
Some 322,000 children did not receive daily nutritional needs as they lived in households that could not cover basic costs for food, clothing, healthcare and education. In 2010, the number stood at 89,000 minors.
"The situation is alarming. Poverty and social exclusion are increasing with a negative effect on the living of children, on their welfare, health, education and development," UNICEF Greece's president Lambros Kanellopoulos told Greek national news agency AMNA.
Greece has been hit by an acute debt crisis since 2010. A large proportion of Greek households suffer from record rising unemployment, poverty and recession.
The Greek branch of UNICEF is organizing a radio marathon on May 28 on local radio channels to raise funds to assist children in need.

Delinquent Student Loans Hit Record, 30% Of 20-24 Year Olds Are Unemployed And Not In School

Almost a year ago we shared a calculation according to which "Over $120 Billion In Federal Student Loans In Default", suggesting that the next credit crisis has already arrived. Since then the topic of the student loan bubble has become a household topic. Sadly, that does not mean it has gotten any better. In fact, according to the latest Education Department data it has gotten as bad as it has ever been. As Bloomberg reports, not only have overdue student loans reached an all-time high but the number of young people aged 20-24 out of school and unemployed is at a record high: not quite astronomic by European standards, but hardly a ringing endorsement of an economy set to transition labor tasks to the next generation, especially with the employment of those 55 and older at all time highs.
From Bloomberg:
Eleven percent of student loans were seriously delinquent -- at least 90 days past due -- in the third quarter of 2012, compared with 6 percent in the first quarter of 2003, according to the report by the U.S. Education Department. Almost 30 percent of 20- to 24-year-olds aren’t employed or in school, the study found.

The research is being released amid concern in Congress and President Barack Obama’s administration about rising college costs and $1 trillion in outstanding student loans, the largest category of consumer debt besides mortgages. Borrowers say the burden is affecting their choice of jobs and their ability to buy homes and get married.

“Today’s economy puts young graduates in a difficult position,” Jack Buckley, commissioner of the National Center for Education Statistics, which published the report, said in a statement. “A college diploma no longer guarantees a direct pathway to the middle class, making it harder to justify the expense of a degree.”
It's not all bad news: those saddled with tens of thousands of student debt at least have a leg up on those with no college education, supposedly:
College graduates have an edge in the job market, showing the need for higher education, Buckley said. The employment rate for young adults who are college graduates is 87 percent, compared with 64 percent for those with only a high-school diploma, the report found.
Which is great news for college grads looking for temp jobs and other openings for which they never even went to college. Oh well: new normal and all that. And if all else fails, they can just open an E*Trade account, take some trading lessons from the E*trade baby, and just BTFD.

The Crypto Currency Company That Google is Investing In

Source: Economic Policy Journal

Google Ventures has put money into OpenCoin, Inc, creators of the open currency exchange called Ripple. Ripple users can trade any currency, including crypto currencies like Bitcoin, for another, without requiring any broker or third-party to facilitate the trades.  There's also a crypto currency, Ripple.

I know a few people involved with Ripple and this is a a very smart group. Bitcoin has a lead in crypto currencies, right now, and it may hold that lead. But will Bitcoin become the AOL of crypto currency, and Ripple, the Google? It's possible.

Below is an interview RT Prime Interest producer, Bob English had with OpenCoin CEO Chris Larsen.

The interview is a bit technical, but that is because adoption is only at the developer stage. If this stuff really takes off, and Ripple has a very good chance to do so, at least at the exchange level, then what the later adopters will know is that they can transfer dollars to gold or Swiss farnce, the euro, bitcoins or Ripples, on their cell phones. Technical stuff be gone.

Hilarious! Top official to plead Fifth Amendment protections after targeting constitutional groups that taught the Bill of Rights

by Mike Adams, the Health Ranger, NaturalNews Editor

(NaturalNews) IRS official Lois Lerner who heads the tax exempt division of the IRS will be invoking Fifth Amendment protections under the Bill of Rights to avoid incriminating herself in federal testimony, reports the LA Times. What makes this such a hilarious example of hypocrisy, of course, is the fact that her office specifically targeted non-profits that were teaching the Constitution and the Bill of Rights.

As has now emerged across mainstream news, the IRS targeted these groups for "extra scrutiny" by demanding answers to questions like: What are the contents of your prayers? What books do you read? What are the names of the students you've instructed? Applications for tax exempt status were also denied tax exempt status for three years even while pro-Obama non-profits were quickly approved, no questions asked.

Suddenly the enemies of America want Constitutional protections...

By invoking the Fifth Amendment, Lois Lerner is flat out admitting that her campaign of targeting pro-Constitution groups was a traitorous, criminal betrayal of America. She also apparently believes that Bill of Rights protections only apply to her, not the People of America. This elitist attitude runs like a festering case of cancer throughout the Obama administration, where a culture of intimidation persists.

The "I Know Nothing" administration

To date, no one in the Obama administration has taken any responsibility for the IRS targeting of conservative groups, the Department of Justice secret police state tactics targeting the Association Press, nor the stand-down orders that resulted in the death of the U.S. ambassador at Benghazi. Somehow in all these scandals, nobody knew anything!

Across the board, Obama officials are either taking the Fifth Amendment or declaring they "know nothing" about anything that happened. Check out this amazingly annoying video of Eric Holder, the top law enforcement "official" in the U.S. government, claiming just how little he knows!

Lois Lerner of the IRS knows nothing, too. In fact, she knows so much nothing that she's going to plead the Fifth Amendment in order to make sure she doesn't actually say exactly how much she doesn't know.

In reality, this pleading of the Fifth Amendment by a key lawbreaking operative in the Obama administration is a tactic to make sure she doesn't either spill the truth or perjure herself by lying under oath.

Because, you see, a whole los of people like Lois Lerner are ultimately going to prison once the true criminality of the entire Obama network of government operatives implodes.

The dam has already burst, and now we just have to watch and see what spills out of it. Countless "officials" in the IRS, the State Department and the Department of Justice are, factually speaking, unindicted criminals who must be prosecuted and convicted of their crimes of America is to have any hope of being restored to a nation where law and due process still apply.

Question of the day: Why is Adam Kokesh in jail but Eric Holder isn't? Because the government has become a criminal mafia, and law and order have been not only abandoned but gleefully shredded by Obama's thugs who deeply hate America, the Constitution and the Bill of Rights.

Watch Eric Holder's "I know nothink!" testimony here:

David Stockman: Bernanke Can't See The Bubble, Goldman Calling Cattle To The Slaughter

World Bank Insider Blows Whistle on Corruption, Federal Reserve

World Bank Insider Blows Whistle on Corruption, Federal ReserveThe New American – by Alex Newman
A former insider at the World Bank, ex-Senior Counsel Karen Hudes, says the global financial system is dominated by a small group of corrupt, power-hungry figures centered around the privately owned U.S. Federal Reserve. The network has seized control of the media to cover up its crimes, too, she explained. In an interview withThe New American, Hudes said that when she tried to blow the whistle on multiple problems at the World Bank, she was fired for her efforts. Now, along with a network of fellow whistleblowers, Hudes is determined to expose and end the corruption. And she is confident of success.    
Citing an explosive 2011 Swiss study published in the PLOS ONE journal on the “network of global corporate control,” Hudes pointed out that a small group of entities — mostly financial institutions and especially central banks — exert a massive amount of influence over the international economy from behind the scenes. “What is really going on is that the world’s resources are being dominated by this group,” she explained, adding that the “corrupt power grabbers” have managed to dominate the media as well. “They’re being allowed to do it.”
According to the peer-reviewed paper, which presented the first global investigation of ownership architecture in the international economy, transnational corporations form a “giant bow-tie structure.” A large portion of control, meanwhile, “flows to a small tightly-knit core of financial institutions.” The researchers described the core as an “economic ‘super-entity’” that raises important issues for policymakers and researchers. Of course, the implications are enormous for citizens as well.
Hudes, an attorney who spent some two decades working in the World Bank’s legal department, has observed the machinations of the network up close. “I realized we were now dealing with something known as state capture, which is where the institutions of government are co-opted by the group that’s corrupt,” she told The New American in a phone interview. “The pillars of the U.S. government — some of them — are dysfunctional because of state capture; this is a big story, this is a big cover up.”
At the heart of the network, Hudes said, are 147 financial institutions and central banks — especially the Federal Reserve, which was created by Congress but is owned by essentially a cartel of private banks. “This is a story about how the international financial system was secretly gamed, mostly by central banks — they’re the ones we are talking about,” she explained. “The central bankers have been gaming the system. I would say that this is a power grab.”
The Fed in particular is at the very center of the network and the coverup, Hudes continued, citing a policy and oversight body that includes top government and Fed officials. Central bankers have also been manipulating gold prices, she added, echoing widespread concerns that The New American has documented extensively. Indeed, even the inaccurate World Bank financial statements that Hudes has been trying to expose are linked to the U.S. central bank, she said.
“The group that we’re talking about from the Zurich study — that’s the Federal Reserve; it has some other pieces to it, but that’s the Federal Reserve,” Hudes explained. “So the Federal Reserve secretly dominated the world economy using secret, interlocking corporate directorates, and terrorizing anybody who managed to figure out that they were having any kind of role, and putting people in very important positions so that they could get a free pass.”
The shadowy but immensely powerful Bank for International Settlements serves as “the club of these private central bankers,” Hudes continued. “Now, are people going to want interest on their country’s debts to continue to be paid to that group when they find out the secret tricks that that group has been doing? Don’t forget how they’ve enriched themselves extraordinarily and how they’ve taken taxpayer money for the bailout.”
As far as intervening in the gold price, Hudes said it was an effort by the powerful network and its central banks to “hold onto its paper currency” — a suspicion shared by many analysts and even senior government officials. The World Bank whistleblower also said that contrary to official claims, she did not believe there was any gold being held in Fort Knox. Even congressmen and foreign governments have tried to find out if the precious metals were still there, but they met with little success. Hudes, however, believes the scam will eventually come undone.
“This is like crooks trying to figure out where they can go hide. It’s a mafia,” she said. “These culprits that have grabbed all this economic power have succeeded in infiltrating both sides of the issue, so you will find people who are supposedly trying to fight corruption who are just there to spread disinformation and as a placeholder to trip up anybody who manages to get their act together.… Those thugs think that if they can keep the world ignorant, they can bleed it longer.”
Of course, the major corruption at the highest levels of government and business is not a new phenomenon. Georgetown University historian and Professor Carroll Quigley, who served as President Bill Clinton’s mentor, for example, wrote about the scheme in his 1966 book Tragedy And Hope: A History Of The World In Our Time. The heavyweight academic, who was allowed to review documents belonging to the top echelons of the global establishment, even explained how the corrupt system would work — remarkably similar to what Hudes describes.
“The powers of financial capitalism had a far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole,” wrote Prof. Quigley, who agreed with the goals but not the secrecy. “This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”
But it is not going to happen, Hudes said — at least not if she has something do to with it. While the media are dominated by the “power grabber” network, Hudes has been working with foreign governments, reporters, U.S. officials, state governments, and a broad coalition of fellow whistleblowers to blow the entire scam wide open. There has been quite a bit of interest, too, particularly among foreign governments and state officials in the United States.
Citing the wisdom of America’s Founding Fathers in creating a federal system of government with multiple layers of checks and balances, Hudes said she was confident that the network would eventually be exposed and subjected to the rule of law, stopping the secret corruption. If and when that happens — even if it may be disorderly — Hudes says precious metals will once again play a role in imposing discipline on the monetary system. The rule of law would also be restored, she said, and the public will demand a proper press to stay informed.
“We’re going to have a cleaned-up financial system, that’s where it is going, but in the meantime, people who didn’t know how the system was gamed are going to find out,” she said. “We’re going to have a different kind of international financial system…. It’ll be a new kind of world where people know what’s going on — no more backroom deals; that’s not going to keep happening. We’re going to have a different kind of media if people don’t want to be dominated and controlled, which I don’t think they do.”
While Hudes sounded upbeat, she recognizes that the world is facing serious danger right now — there are even plans in place to impose martial law in the United States, she said. The next steps will be critical for humanity. As such, Hudes argues, it is crucial that the people of the world find out about the lawlessness, corruption, and thievery that are going on at the highest levels — and put a stop to it once and for all. The consequences of inaction would be disastrous.
Photo of World Bank headquarters in Washington, D.C.

Law Erases Statute of Limitations on Your Federal Debt

Feds went after Minooka woman for overpayment of survivor's benefits from 35 years ago

View more videos at:
The federal government no longer has a statue of limitations when it comes to collecting on debt that is owed to them. Lisa Parker reports.

Buried deep inside a massive piece of legislation passed by Congress sits a little-noticed passage that, with few exceptions, wipes out any statute of limitation for a debt owed to the federal government.
Thanks to the "Food, Conservation and Energy Act of 2008," anyone overpaid by a federal agency, at any time in their life, can now be tracked down and put on the hook for debts that are decades old.
For Bridget Galazkiewicz of Minooka, the unexpected tax grab began in the form of a mysterious message from the IRS she received the day after she expected her tax refund.
"If you haven't already seen a letter, expect one," she said of the message.
Soon thereafter, a letter arrived from the Department of the Treasury announcing the government had seized all $1,200 of her 2012 return for a debt about which she said she knew nothing.
There was no warning letter or call, just the seizure notice.
"It just raised more questions because it said the money went to Social Security, and I am not on Social Security... haven't been since I was a kid," Galazkiewicz explained.
Calls to the Social Security Administration left her more confused.
"(They) told me that I was making too much money in 1968. I was eight years old, so I don't think I was making any money," she said. "I had a .25 cent allowance."
The letter contained a social security number that Galazkiewicz thought had belonged to her mother. Galazkiewicz later found out it was actually her father's. And the confusion, she said, got thicker from there.
"And then (they) told me that my mother was working, if I wasn't working, in 1968 and she made too much money," Galazkiewicz recalled.
If you are thinking 45 years is too far for the government to reach back, you would have been correct until very recently. The tiny section tucked away on page 561 of the legislation allowed the federal government to blow out any existing statute of limitations and go after debts decades old.
"This completely lacks due process. It is not a fair system at all," Ralph Martire of the Center for Tax and Budget Accountability told NBC5 Investigates. "So now they can go back 20, 30, 40 years -- which they are doing. It is problematic for taxpayers on a number of levels."
Martire pointed out that some federal agencies, such as the SSA, already had a 10-year statute of limitations. To wipe that out and give agencies an "indefinite" timeframe to go back and find their own mistakes, he said, is a bad idea.
"If they haven't acted on a claim in 10 years, maybe they ought not act on it at all. Maybe it is marginal," he said. "This is guilty until proven innocent... a really unfair burden to put on the taxpayer."
Ultimately, in Galazkiewicz' case, the SSA said she was overpaid for survivor's benefits for her father, who died in 1964. After an inquiry by NBC5 Investigates, a spokesperson for the SSA said Bridget's wages rose for a four-month period in 1979, and that increase led to an overpayment of the survivor's benefits. Almost 35 years later, Galazkiewicz said she has no way to prove or disprove what happened so many decades ago.

French minister says IMF boss Christine Lagarde 'must resign' if she is charged in connection with £270million fraud and embezzlement scam

  • Lagarde, 57, appears in front of special tribunal of judges in Paris
  • Widely expected to be charged with fraud and embezzlement
  • Relates to £270m payout to Bernard Tapie when she was finance minister
  • Government minister Najat Vallaud-Belkacem says she will be asked to quit if placed under investigation by Court of Justice of the Republic
  • Denies any wrongdoing and lawyer said she expects case to be dismissed

Former French finance minister and head of the IMF Christine Lagarde appeared in court this morning to be formally charged with embezzlement and fraud
Former French finance minister and head of the IMF Christine Lagarde appeared in court this morning where she was expected to be formally charged with embezzlement and fraud
A French government  minister last night called on Christine Lagarde, the head of the International Monetary Fund, to resign if she is charged with fraud and embezzlement.
She was questioned by magistrates in Paris yesterday over a £340million payout of public money five years ago to convicted conman Bernard Tapie.
As she appeared in court, there were calls for her to stand down from  her high-profile £305,000-a-year job if she is charged.
Najat Vallaud-Belkacem, the Minister for Women’s Rights, said: ‘Knowing the IMF and the way this type of institution works, I tend to think that if she was placed under investigation, she would without doubt be asked to quit her post.’
Last night the court adjourned after 13 hours sitting but it was widely predicted Mrs Lagarde, 57, would be placed under investigation by the Court of Justice of the Republic, equivalent to a suspect being charged in the UK.
She faces allegations that she stepped in to settle a long- running legal battle in which Tapie claimed he was cheated out of millions by Credit Lyonnais bank over the 1993 sale of his sportswear company Adidas.
Mrs Lagarde ordered a panel of judges to arbitrate and they awarded Tapie 400million euros (£340million) in damages paid from taxpayers’ money. Prosecutors suspect Tapie received favourable treatment in return for supporting ex-president  Nicolas Sarkozy in the 2007 presidential elections.
Claims: The raid relates to claims Miss Lagarde authorised a £270million payout to Bernard Tapie
Claims: The raid relates to claims Miss Lagarde authorised a £270million payout to Bernard Tapie
They have suggested that Mrs Lagarde – who was France’s Finance Minister at the time and the first woman ever to hold the post – was partly responsible for ‘numerous anomalies and irregularities’ which could amount to complicity in fraud and misappropriation of public funds.
There is no suggestion Mrs Lagarde profited personally in any way from the final settlement.
The affair has become a huge embarrassment to France and the IMF.

Dominique Strauss-Kahn was forced to quit the IMF two years ago after being accused of trying to rape a hotel chambermaid in New York, charges which were later dropped.
Dispute: Mr Tapie, the former head of Adidas in France, claims he was cheated out of millions by Credit Lyonnais bank. miss Lagarde ended the dispute by asking a panel of judges to arbitrate
Dispute: Mr Tapie, the former head of Adidas in France, claims he was cheated out of millions by Credit Lyonnais bank. Miss Lagarde ended the dispute by asking a panel of judges to arbitrate
Mrs Lagarde took over from ‘DSK’ almost two years ago, in July 2011.
Her grilling by prosecutors comes after police raided her £1million Paris apartment in March.
Mrs Lagarde’s lawyer, Yves  Repiquet, said the inquiry was ‘in no way incompatible’ with her new job, adding that he expected the case to be dismissed.

She has denied any wrongdoing, saying: ‘If it’s decided to continue with this inquiry it won’t be particularly surprising. Personally, it doesn’t worry me at all – I didn’t benefit personally.’
But it has been widely reported in the French media that investigators intend to charge her with fraud  and embezzlement.

Le Monde reported that magistrates had already written to Mrs Lagarde to tell her not to expect any special treatment because of her high-profile international job.

Tapie was jailed for six months in 1997 for corruption and match- fixing while he was the owner of  Marseilles football club.

Bernanke Sparks Massive Sell-Off - VIDEO

GLOBAL DEPRESSION “Trigger Mechanism”: Collapse of Japanese Govt Bonds – 10-Year Now at 1%!!! Japanese BOND Market Closed – Nikkei DOWN over 1000 POINTS!!! Start of Reflation Bubble Bust?!?!

This is going to be huge!!!

Japan Bond Yields Spike – 10-Year Now at 1%

Japanese government bond (JGB) yields soared to 1 percent on Thursday, their highest level in a year, prompting the Bank of Japan to hold true to its promise of taking action to stabilize an incredibly volatile bond market.
Analysts expected the market volatility to last for a while, but added that buying by domestic pension funds and the central bank should help keep a lid on yields.
Benchmark 10-year JGB yields jumped as high as 1.002 percent as debt markets globally sold off on comments from the Federal Reserve chief overnight that fueled worries about an early unwinding of the central bank’s asset-buying program….

Japanese Bond Market Halted At Open As Bond Selling Purge Goes Global

Japanese government bonds (JGB) futures have been halted once again this evening as the market opens down over 1 point. 10Y yields smash 11.5bps higher to 1.00% and 5Y yields add 6bps to 47bps. These are quite simply unprecedented moves in what ‘was’ a safe asset class and impresses yet another VaR shock on the market (as we detailed here). What this means practically is that Japanese banks push further into insolvency land (as we explained here) today’s move wipes out another 1.5% of blended Tier 1 capital off the entire Japanese banking industry. Since the 10Y JGB yield lows of 32.5 bps on April 5, the move is rapidly approaching a full percentage point, or the parallel shift amount that the IMF warned would lead to 10% and 20% MTM losses for regional and major banks respectively. Today’s jump in 10Y yields continues the post-BoJ regime of greater-than-six-sigma moves…something no risk model can withstand for three weeks. Just a good job the BoJ didn’t have anything at all to say about this totally disorderly fiasco yesterday.
JGB Futures plunge to two-year lows…

Japan markets plunge most since March 2011; Nikkei futures halted

Japan’s Topix index slides 7%, as financial companies plunge amid rising bond yields
Japan’s Topix index tumbled almost 7%, the most since the aftermath of the March 2011 tsunami and nuclear disaster, as financial companies plunged amid rising bond yields. The rout triggered a halt in Nikkei 225 stock average futures trading in Osaka.
Consumer lenders lost 11% to lead declines among the Topix’s 33 industries. Mitsubishi Estate Co., the country’s biggest developer, slid 9.3%. Mitsubishi Motor Corp. dropped 14%, falling a second day after advancing more than 50% in the previous three days. Tokyo Electric Power Co. plunged 13%.
The Topix lost 6.9% to close at 1,188.34 in Tokyo. Even with Thursday’s decline, Japan’s broadest measure is still up almost 40% for the year. Japan’s 10-year government bond yields touched 1% on Thursday for the first time in a year after treasuries slid on speculation the Federal Reserve will curb stimulus….

Bank of Japan Policy Is Huge, Risky Experiment: Fund Manager - 4 Apr 2013

Japan is wagering its future on a massive experiment by essentially doubling its monetary base, and Kyle Bass of Hayman Capital Management doesn’t see it ending well.
The Bank of Japan’s announcement Thursday of it’s aggressive monetary policy—with roughly 140 trillion yen, or $1.46 trillion, on the line by the end of 2014—is meant to send a signal, Bass told CNBC’s Squawk on the Street. “What [Prime Minister Shinzo] Abe and [new BOJ Gov. Haruhiko] Kuroda have done is formalized the announcement that the new sheriff is in town.”

JAPAN: The Beginning of it’s Economic End – Get Ready To Short Japanese Equities And Expect Another Real-Estate Bubble Burst - May 22nd, 2013

Just got this very reliable financial intel.
Get ready to short Japanese equities and expect another real-estate bubble burst.

Christine Hughes, President and Chief Investment Strategist, discusses details of Japan’s radical monetary policy.
the key part of the video, for ease of viewing:

DOW FUTURES in the crapper!


Index Close Cur Future
15307.17 15148.0   -172.00
Fair Val Close Cur Future
15284.17 15148.0   -136.17
Last Updated: Thu, 23 May ’13 | 2:35 AM ET

Jim Rickards – Japan’s Taking The World Down With Them


Foreclosed Homeowners Arrested While Demanding Banker Prosecution- DHS, Cops make arrests

 How ironic, arrests made on CONSTITUTION BLVD

Which Foreigners Got the FED $500,000,000,000? Bernanke: “I Don’t Know”

This is Congressman Alan Grayson questioning Federal Reserve Chairman Ben Bernanke on $550B of loans to foreigners (or ‘central liquidity swaps’ in Federal Reserve-ese’).
Which financial institutions received this money? Bernanke’s answer: I don’t know.
As the Fed was lending this money, the dollar increased by 30% in value. Grayson asks, was this a coincidence? Bernanke’s answer: yes.

Tim Geithner Refuses To Answer Brad Sherman On Some Questions
“Bernanke Threatens The Congress” We will cause an Economic Collapse

Rand Paul: 'Audit the Fed'

Bullion Rallies Despite “Losing US Fed Prop” as Stock Markets Sink on Weak China Data

London Gold Market Report
from Adrian Ash, BullionVault
Weds 22 May, 08:45 EST

Bullion Rallies Despite “Losing US Fed Prop” as Stock Markets Sink on Weak China Data

BOTH gold and silver rose in Asian and London trade Thursday morning, defying a sharp slide in global stock markets to gain 3.0% rally from yesterday’s sharp sell-off.

Commodity prices fell as major government bonds rose but weaker Eurozone debt slipped, pushing interest rates higher.

Tokyo’s Nikkei index – up by 85% from November – dumped more than 7% after new data showed a surprise contraction in China’s manufacturing sector.

Private “retail” investors have “abducted” the Japanese stock market, accounting for more than a third of recent volume, according to brokers quoted by the Financial Times.

“[Gold's] inability to hold the highs is bearish,” says the latest technical chart analysis from Scotia Mocatta.

“[Wednesday's] intra-day rally is indicative of bargain hunting in gold rather than a change in trend,” the bullion bank adds, pegging support at the April 2013 low of $1323.

Like Barclays Capital’s analysts, Scotia now puts short-term resistance at yesterday’s sudden spike of $1412.

Gold prices rose Thursday morning to breach $1390 per ounce once again, recovering two-thirds of Wednesday’s plunge from that 1-week high – made as US Federal Reserve chairman Ben Bernanke was testifying to the Senate on the likely direction of Dollar interest rates and quantitative easing.

Having warned against “a premature tightening of monetary policy” however, Bernanke was then asked if the Fed might start reducing its $85 billion in monthly QE purchases of government debt and mortgage bonds before Labor Day on Sept. 1st.

“I don’t know,” Bernanke replied.

Minutes from the US central bank’s latest policy meeting also showed one participant wanting to reduce the level of QE “immediately”.

“Not having the future support of the Fed,” says Edward Meir’s note for INTL FC Stone, “will remove a major prop for gold.”

“It seems the market is now squarely focusing on the September 17-18 [policy] meeting for the Fed to make its move,” reckons ING bank’s analysts.

“Together with expectations of tightening quantitative easing,” says Mitsubishi analyst Jonathan Butler – also quoted by Reuters – “the general trend for a modest economic recovery in the developed markets is going to fuel growth in the equity markets and the Dollar.

“That should see gold coming under pressure.”

“The momentum is strongly negative,” says Edward Lashinski, global strategist at RBC Capital Markets in Chicago.

“The market understands that gold is no longer a safe haven.”

On the supply side meantime, “Being more profitable is better than being bigger,” said Jamie Sokalsky, CEO of the world’s largest gold miner, Barrick, at Bloomberg’s Canada Economic Summit in Toronto on Tuesday.

Also forecasting new record highs for the gold price thanks to central-bank demand and the state of the global economy, Sokalsky mooted “divesting” some smaller, higher-cost mines to focus on more efficient projects.

In particular, the giant Pascua-Lama project in Chile – valued at some $8.5 billion, and already eating some $5bn in costs – has been delayed by environmental concerns, says Canada’s Financial Post.

“Barrick is considering all its options at Pascua-Lama,” says the paper, “including outright suspension.”

At current gold prices around 10% of gold mines globally will be making losses, according to Thomson Reuters GFMS data.

“We would initially expect the oldest mines closing,” says a special report from Japanese trading house Mitsui’s metals strategist David Jollie in London, “as they are in many cases coming to the end of their operating life.”

Gold mining companies are likely to avoid closing newer projects “as long as possible,” Jollie says. But if the gold price stays low enough long enough, “closures will happen.”

Adrian Ash

The One Percent