Murphy On Gold & the Markets
March 9 – Gold $441.70
up $1.70 – Silver $7.59 up 10 cents
Gold, Silver, Mount St.
Helens And Jimmy Buffet
"I
don't know,
I don't know,
I don't know where I'm gonna go
when the volcano blows!" ………..Jimmy
Buffett
GO GATA!
GO GOLD RUSH 21
The MIDAS headliners the
past few days have had a volcano focus. Looks like my commentary might be
prescient:
Don’t know about you,
however, I consider this an omen for us. Mt. St. Helens is trembling and so are
gold and silver. That volcano has come alive, just like silver and gold have.
What you see when viewing this imposing Washington State mountain is what the
investment world is looking at when it comes to the precious metals. The Gold
Cartel has messed around with the natural, free way of things far too long. The
Gods are not happy with them. SO BE IT!
Meanwhile, back at the
ranch, The Gold Cartel’s attempts to manipulate/suppress the price of gold
continue to grow bolder. As one market watcher said this morning, "they
don’t even care who sees it any more."
The Gold Cartel has a
number of rules which they constantly execute as part of their rigging
operations. The $6 Rule is well documented by now. Another one is once gold
goes limit up ($6 Rule parameters), it is NEVER allowed to follow through on
the upside the very next evening, or on the following Comex opening. NEVER!
Doing so might engender some serious excitement re gold as an investment. The
Orwellians will not tolerate such prehistoric notions, notions which might
threaten their own cretinous empire building type of thinking.
Last night and this
morning was no exception to this other cabal rule. Even though the dollar was
comatose, the crooks immediately took gold 80 cents to $1.50 lower when trading
commenced during the Kangaroo trading hours in Australia - where the volume is
usually very light. What is astounding is that a humongous 7,000 contracts
exchanged hands during Access trading hours. This means The Gold Cartel had its
hands full keeping the price from extending yesterday’s gains, which any normal
market would do after a major breakout.
The depth of The Gold
Cartel’s depravity was reinforced this morning when the US bond market (the
bond vigilantes are waking up to the true US inflation situation) was pounded
for a full point going into and after its opening. Now, if there was ever a
reason for gold to EXTEND yesterday’s capped rally, it would be another sign
inflation is heating up, which we got this morning:
March 9 (Bloomberg) --
U.S. 10-year Treasury notes fell, pushing yields to the highest since early
August, as a rise in oil and gas prices fanned concern inflation will
accelerate… -END-
The early interest rate
move extended its rise throughout the day:
30-year March bond
http://futures.tradingcharts.com/chart/TR/35
Total breakdown from a
massive top formation by the 10-year note:
http://futures.tradingcharts.com/chart/NO/35
But, there is no
inflation!
Thank you very much
Bloomberg. If bonds are going up on inflation concerns, why is gold stuck in
its tracks after a major breakout like we had yesterday? That was written with
gold stuck at unchanged for the better part of the Comex trading period.
In a free market gold
would have been up another $2 to $3 in the early going. When you have
Orwellians controlling a market and rigging it on behalf of the major bullion
banks in the US, gold has to be held in check to demonstrate to the naïve and
clueless investment world that inflation really isn’t that worrisome. Same
drill; these propagandists point to the calm gold price to prove their point.
You would think a few dingbats in the mainstream financial market community
would catch on to this repetitive deception.
The gold market is now
closed. The farce worsens. Once again you could not have had a more bullish
gold day, yet The Gold Cartel made sure reality was not allowed to reign. They
sat on gold all both morning and afternoon. While other markets were surging,
or swooning in fairly big moves, gold had to struggle for every dime on the
upside. The crooks were on the case (gold) during the entire Comex trading
session. Just like the other day, gold should have risen over $10 by the close.
Instead we got crumbs.
My colleague and buddy
Chris Powell was laughing at me this afternoon, saying I was the volcano about
to blow. It’s just so hard to watch this all day long and take it without any
of the nincompoops in the mainstream gold world saying anything about what is
going on here.
It doesn’t get much more
gold bullish:
CRB – up ANOTHER 1.05 to
313.70
April crude oil – up 18 cents to $54.77 per barrel
Dollar – down .35 to 81.58
March euro – up .56 to 134
10-year note – down 26/32 to 108 30/32
30-year bond – down a whopping 1 19/32, a new low for the move
The 10-year note
breakdown is both dramatic and significant. Prices are breaking down (yields
breaking out) after completing a MASSIVE top. The interest rate picture is
worsening in stunning fashion even as the Doofuses in the Treasury and Fed
continue to claim inflation is not a problem, nor is there any serious
inflation in sight.
All that and gold pops a
piddly $1.70 AFTER breaking out from a major support pattern. The euro gold
price FELL .54 to 329.27.
I think it is important
to pound away again on a long-held theme of mine. Those who say gold is the
antithesis of the dollar are correct in some sense, yet have it all bass
ackwards.
The way it really is
centers around The Gold Cartel using the dollar action to cap the price of gold
and keep it in check via foreign currencies. One of the reasons is to stifle
Western investment demand. Those holding gold in foreign currencies are seeing
a nothing market and have no incentive to buy. Gold never appreciates in
foreign currency terms no matter what else is going on in the world.
Why bring this up again?
Because The Gold Cartel is being found out. There is a zero component in the
price of gold for anything other than what the dollar is doing, which defies
its historical trading pattern (see Dan Norcini below). And, as we saw in
December, when The Gold Cartel wants to bury the gold price even the dollar
action doesn’t matter.
What I mean by that is
commodity prices are going nuts and US interest rates are on the rise in a
major league way. This combination, along with a falling dollar, should have
the price of gold on a tear for many reasons, which is JUST THE REASON WHY THE
GOLD CARTEL IS ALL OVER IT.
Gold has been panned
over the years as this relic of a market, a tiny one at that, which is
meaningless in this day and age of super financial market sophistication. Quite
frankly, if it weren’t for The Gold Cartel, there might be no reason to think
otherwise. Gold could have been viewed as just another commodity and one rising
with all the other commodities of the day.
Instead, because of
their devious and greedy price suppression scheme – one originally put in play
to effect the US’ strong dollar policy, they have made it the most important
market of
all
these days. These short-term thinking fools among The Gold Cartel have created
a time bomb which will inevitably go off (Murphy’s Law says at the worst
possible time). They are suppressing gold to hide the true reality of the US
economy and financial markets and give the US dollar as strong a presence as
possible. They point to the subdued price action as evidence inflation is not
really a problem.
However, the soaring
commodity markets and now rising interest rates, along with a falling dollar,
all suggest otherwise. This has to have a substantial impact on US financial
markets in addition to all the other problems oft-discussed in this column. Meanwhile,
because of the cabal’s fraudulent scheme, which made them many billions at the
expense of the unknowing general public, the central banks only have half the
gold they say they have. The crooks are running out of available gold supply at
the worst possible time (yep, Murphy's Law again) which is why the phony
financial press in the US won’t allow GATA to be heard.
The point is the reasons
to own physical gold are beginning to go off the chart. More and more investors
around the world want IN. Silver too. The precious metals are going to go
berserk when the bums are carried out on stretchers, when they lose control of
their scam.
One of the other major
reasons The Gold Cartel is sitting on gold is they are short so much gold, it
CANNOT be covered. Their derivatives exposure to this mammoth gold short
position must be staggering. When the gold price rises sharply, and it will
some day in the not too distant future, our long waited gold derivatives
neutron bomb should go off along with a Commercial Signal Failure. When this
happens, interest rates will go that much higher as pundits point to a soaring
gold price as evidence of horrific inflation in the US. Stock and bond markets
will tank even further, along with the dollar.
Gold (and silver) will
reign supreme in the developing troubled time. The Gold Cartel’s ploy will have
backfired in the most ignominious of fashions. The cabal will be haunted by its
own BEST LAID PLANS.
Silver remains explosive
and yet the price managers are all over it too. The silver open interest rose
2,583 contracts to 101,960. The gold open interest gained another 5,786
contracts to 296,335, which is indicative of the specs piling in and The Gold
Cartel doing all they can to keep the price from rising too fast.
CARTEL
CAPITULATION WATCH
Wake up time for stock
market bulls. Contrary to the spin handed out by Wall Street, the scenario for
the market and the US economy looks lousy with darkening clouds on the horizon.
With longer term interest rates only JUST breaking out higher, the potential
for serious chaos in the US real estate and stock market is now moved to the
front burner.
The DOW gave up 107 to
10,806 and is leaving 11,000 in the dust. The DOG lost 12 to 2061, leaving 2100
in the dust too.
That wasn’t enough for
the day. The Orwellian spin machine is out in full force:
13:28 Chicago Fed
Pres. Moskow says policy still accommodative; rates can rise at measured pace
Nothing incremental in his comments. Moskow says must be vigilant regarding
inflation pressures, but sees little evidence that long-term inflation
expectations have risen.
* * *
* *
Very reassuring Moskow.
Your nonsense reads like it came from Moscow!
The geopolitical agenda
of the US is becoming clearer by the day. There is a worldwide hunt to secure
natural resources. Everyone knows how China is scouring the earth securing
supply. So are other countries. Worse, the US in its Gold Cartel-like arrogance
has offended so many other countries, they are going out of their way to snub
us. The latest:
Industry, energy deals
to boost Iran-Venezuela ties
By
Pascal Fletcher
CARACAS, Venezuela, March 9 (Reuters) - Iran and Venezuela will sign investment
projects this week to build a cement factory and a car assembly plant in the
South American nation in a growing economic, political, and energy alliance
between the two OPEC oil producers, officials said Wednesday.
More than a score of cooperation accords, including broad agreements in oil,
gas and petrochemicals, will also be initialed during a three-day visit to Venezuela
by Iranian President Mohammad Khatami which starts Thursday.
The visit risks raising U.S. hackles as President George W. Bush's
administration has both countries under close scrutiny.
Washington accuses Iran of seeking to develop nuclear weapons, a charge denied
by Tehran. Ties between Venezuela and its biggest oil client, the United
States, have also become tense as U.S. officials portray left-wing President
Hugo Chavez as an authoritarian anti-U.S. troublemaker in Latin America.
Stoking fears that the longstanding multibillion dollar Venezuelan-U.S. energy
marriage may be at risk, Chavez has sought alternative oil partners by recently
signing supply and investment deals with Russia, China, Brazil and India.
Venezuelan officials said similar wide-ranging energy cooperation deals would
be signed with Iran.
–END-
PS:
13:26 Venezuela's Chavez
says OPEC has no current spare capacity -- Dow Jones
April WTI crude quoted last at $55.35.
* * * * *
14:01Fed's Beige Book
reports that economy expanded at a moderate pace through 2/28
The Beige Book for the 3/22 meeting says that the economy expanded in all
districts, and that prices for consumer goods were mixed but relatively flat.
The report appears to be little change from recent Beige Books. Seeing little
movement in stocks or bonds on the report.
* * *
* *
Gold demand news … The
Gold Cartel’s worst nightmare – coming drainage of physical gold supply:
Jewellers
spot gold in mainland
JIANG JINGJING,China Business Weekly staff
2005-03-09 09:43
"No
diamond rings, no marriages."
That is how jewellery industry insiders describe the sector's market potential
in China.
The jewellery sector has experienced double-digit growth which has coincided
with the growth in China's economy and the rise in people's living standards in
recent years.
Jewellery firms, from both the Chinese mainland and Hong Kong, are seizing
every opportunity to reinforce their positions in the market.
Chow Tai Fook, the largest jewellery producer in Hong Kong, plans to open 100-120
outlets in the Chinese mainland this year.
Chow Sang Sang, another famous Hong Kong brand, plans to open 40-60 outlets.
3D-Gold Jewelry said it plans to own 1,000 stores in 100 cities. The firm has
opened 200 outlets in the past five years.
-END-
Rhody with some insight
on the rigging:
Good
morning Bill:
I had an interesting time at the
PDAC in Toronto yesterday. I met many interesting people, did a little mineral
specimen swapping, and renewed acquaintances. The presentations were excellent.
For the first time, gold and silver advanced strongly while I was at the PDAC,
in contrast to all past years when both metals were tanked.
Lease rates
were not roiled yesterday, but they are this morning. Silver rates advanced
strongly across all terms, implying capping efforts today.
Gold
remains in backwardation right out to the six month term but at low rates. This
also implies major leasing to cap gold spot prices with central banks opening
the lease spigots full to provide cheap liquidity. The parallel between the
lease rate curve inverted to cool down the gold market even as rates overall
remain low and the tendency toward an inverted yield curve in the bond market
to control inflation is obvious. Just as lease rates in the bullion markets are
low, so are interest rates in the paper debt markets.
Artificially
low rates in both bullion and paper debt markets imply financial instability.
Regards, Rhody.
http://www.kitco.com/market/lfrate.html
Houston’s
Dan Norcini was kind enough to send his insightful commentary on the CRB and
gold to us. It shows you in stark detail the degree to which The Gold Cartel
has rigged the gold market. AND, allow me to add, the central banks probably
have less than half the gold in their vaults than they had when the CRB was
last above 300.
Bill and Jesse:
Take a look at these monthly closing price CRB levels and the monthly closing
spot gold price to see the actual numbers were gold should conceivably be
trading at a bare minimum. The months listed below are the only time when the
CRB was above the 300 level. The lowest gold price was 591.30 and that occurred
as the CRB was definitely on the way down due to the spike in interest rates
brought about by Volcker to knock it down. Every other time the CRB had a
handle of "3" in front of it, gold was over $600/ounce.
Today's close on the CRB
was 309.25 - London PM spot Gold price - 437.25 (New York Comex $441.10) -
depending on how you measure it; gold should be anywhere from $591/ounce -
$647/ounce, and that does not even include adjusting it for the dollar's loss
of purchasing power in the last 25 years.
............................CRB.......Spot
Gold
|
6/30/1980
|
286.40
|
647.4
|
|
7/31/1980
|
302.30
|
619.7
|
|
8/29/1980
|
308.40
|
635
|
|
9/30/1980
|
319.40
|
671.5
|
|
10/31/1980
|
327.10
|
636
|
|
11/28/1980
|
334.80
|
624.6
|
|
12/31/1980
|
308.50
|
591.3
|
Absolutely pathetic
isn't it?
Dan
The spin coming from the
establishment on the inflation front is out of control and emanates from almost
all quarters. I caught CNBC briefly and heard one economist (Yardeni) say how
the surge in commodity prices was terrific for US financial markets and our
economy as it reflected surging growth around the world. Then, this similar
commentary from the New York Times:
Published Wednesday,
March 9, 2005
Surging
Prices for Commodities Reflect Global Growth
By JONATHAN FUERBRINGER
New York Times
Commodity prices are nearing record highs - but there may be less to worry
about than investors think.
While higher commodity prices have often been a worrisome portent of inflation,
those concerns have been overshadowed by the other significance of the rise -
that economic growth is picking up in areas around the world.
Some analysts also say that the impact of these higher commodity prices on
inflation will be muted.
The rise "reflects booming activity in the Asian developing world and on
balance, that means the global economy is doing better than we thought,"
said Robert J. Barbera, chief economist at ITG/Hoenig.
Yet after a closely watched index of commodities rose to a 24-year high
yesterday, doubts about this upbeat interpretation emerged in the markets. As
the prices of crude oil, home heating oil and copper, all components of the
commodity index, neared their record highs, the stock market slumped and
Treasury prices fell, sending yields higher…
The CRB/Reuters index of 17 commodities climbed 1.1 percent, to 312.65, not far
from its 314.50 high in January 1981. In the last year, the index has risen 15
percent, with most of that coming in the last month….
Still, for investors, the rise in commodity prices, especially for industrial
materials, is positive right now because it is a sign that the global economy
is healthy, which is good for the American economic recovery.
As for their inflationary impact, Mr. Barbera, the economist, argues that it
should be much weaker than in the past. One reason for this, he said, is that
the industrial commodities are being used in low-wage countries, like China and
others in Asia, to make products that can sell for less elsewhere in the world,
mitigating the inflationary pressure.
To support his argument, he notes that the prices of consumer goods, excluding
food and energy, have climbed just 0.9 percent in the last 12 months through
January. In that same time period, the CRB/Reuters index of raw industrial
commodities has climbed 4.8 percent.
"So the inflation link is tenuous at best," he said. "I don't
see the big inflation associated with this."
-END-
Which brings us back to
rigging the gold price. If the price of gold were screaming right now, the
pundit on CNBC and this New York Times reporter would be forced to sing a
different tune.
The third rule of the
low-lifes in The Gold Cartel is after they cap the market like they did today,
they take gold down in the ACCESS market to influence trading. Like yesterday,
they are at it again as I go to print. Gold is down $1.40. So far all that
happened today, which should have sent the gold price through the roof, gold is
up a net of 30 cents. The "SCANDALE" grows like Pinocchio’s nose.
The gold shares sold off
as they usually do late in the day. The XAU ended only .56 higher to 102.83,
while the HUI dropped from 227.18 at its high to close at 224.72, up only 1.01.
While a very aggravating
day, the big picture scenario for the Mount St. Helen’s gold and silver volcano
to blow sky high continues to electrify the skyline. The bums are in big
trouble. One of these days in the near future, they are going to get theirs –
in spades!
Gold, silver and the shares
remain THE historic investment opportunity of a lifetime.
GATA BE IN IT TO WIN IT!
MIDAS
Appendix
Thanks to so many who
took the time to email Bloomberg’s Caroline Baum. This retort came in last
night to Café member Brad T:
"did you folks just
have a convention or something? i got about 6 notes from
conspiracy theorists in succession. go feed off one another."
MANY more of you emailed
today, including me with a copy to Bloomberg’s gold reporter, Claudia Carpenter
(no response as of yet, of course):
March 9, 2005
Dear Ms. Baum,
You are a highly regarded journalist and I assume a staunch believer that we
have a free press in America. That is not the case when it comes to the gold
market. You trivialize six years of documented evidence by GATA that the gold
market is managed in clandestine fashion to the detriment of our so-called free
markets - and to the benefit of the major bullion banks in the US. You do so
without knowing the facts.
I realize you have much
on your plate and don't have time to deal with all those facts. However, if you
are so sure of yourself, why won't you, or Bloomberg, let what GATA has
discovered be presented to your readership, along with dissenting views? I
wrote the following in my commentary at http://www.lemetropolecafe.com/
last evening which covers eminent financial market people around the world who
say GATA is correct.
Would you at least take
the time to see who they are and respond to GATA's challenge?
All the best,
BILL MURPHY
CHAIRMAN
GOLD ANTI-TRUST ACTION COMMITTEE
March 8
After many of the
mainstreamers in the gold industry, my biggest beef is with the US financial
press and those in our government running around the world promoting democracy
when we don’t even have a FREE financial market press in the US, nor do we have
FREE financial markets. This particular rant touches on the lack of free press
and I am going to focus on a highly regarded Bloomberg journalist, Caroline
Baum, and Bloomberg itself.
Six years ago this
coming June, Bloomberg gold reporter Claudia Carpenter came to a luncheon GATA
gave in New York in which I explained to the attendees what GATA uncovered and
what we had to say. The word GATA has not been mentioned once before then, or
since, by Bloomberg. Not mentioned once even though we have received focused
commentary on us by:
*Oleg V. Mozhayskov,
Deputy Chairman of the Central Bank of Russia, who bluntly brought GATA to the
attention of the mainstream gold world. Mozhayskov delivered the keynote
address at the London Bullion Dealers Conference in Moscow on June 4th 2004.
His speech was delivered in Russian. The only words he mentioned in English
were Gold Anti-Trust Action Committee (or GATA).
*Sprott Asset Management
in Toronto, which released its own publication in August 2004, "Not Free,
Not Fair: The Long-Term Manipulation of the Gold Price," confirming GATA's
work.
*Eckart Woertz, vice
president of CFC Securities in Dubai, for the Gulf Research Center, who just
last week published a study, "The Role of Gold in the Unified Gulf
Cooperation Council Currency," by his research foundation in Dubai. The
report endorsed the Gold Anti-Trust Action Committee's findings that Western
central and commercial banks have rigged the gold market and have much less
gold than they claim to have and so are vulnerable to rising demand for gold.
Yet, not one word from
Bloomberg, who wouldn’t even mention our GATA African Gold Summit in Durban,
South Africa, attended by 5 sub-Saharan gold producing nations, the SA Reserve
Bank, trade unions, SA gold producers, etc. The South African Broadcasting
Company featured us two days running. Bloomberg? Nothing!
***
The Korelin
Economics Report Discusses Putting Recent Gold Price Levels into Inflationary
Perspective with Neil McMillan
www.kereport.com
Neil McMillan, President
of gold producer Claude Resources (AMEX "CGR" and TSE
"CRJ"), joined Paul and I on the latest edition of The Korelin
Economics Report. Our discussion with Neil gave credence to the argument that
gold could very easily be trading in the four figure range sooner rather than
later. This becomes apparent when one adjusts the 1980 price of gold for
inflation and brings it up to the present day. If you missed the show last
weekend, check out our segment with Neil by going to www.kereport.com
and clicking on Segment 5.
In another segment, we
continued our discussion of the effect of Petrodollars on decisions within the
international community with Jim Willie of The Hat Trick Letter. Jim brought
out some thought provoking ideas, which could explain political relationships
around the world and their effects on commodity pricing. Jim’s discussion gave
us serious thought about what Bill Murphy and the folks at GATA have to say
about gold price manipulation. We will be taking this up with Bill on next
week’s show.
Jay Taylor discussed
Former Fed Chairman Paul Volcker’s recent candid statements concerning the U.S.
economy in another segment of the show. If you think that everything is coming
up rosy in the financial world, listen to what Jay has to say.
We also followed up last
week’s report on Northern Dynasty Minerals with Lawrence Roulston. Great timing
as Lawrence alerted listeners to the new resource estimate of Northern Dynasty
just shortly after the press release came out. Lawrence began following this
company before anyone else so we feel that has the best ideas to share with our
listeners as to its future potential.
Paul and I wrapped up
the show with a discussion of two new debt "opportunities" available
to consumers. Listen to this segment and perhaps you, like other listeners,
will send us an e-mail to thank us for keeping you out of them.
*
* * * * * *
Alexander Korelin is the
co-host of The Korelin Economics Report along with Paul Warren. This
program is syndicated nationally on Talkstar and can also be listened to on the
Internet by going to www.kereport.com
and clicking on "recent programs". Guests pay no fees to appear on
the program and neither Mr. Korelin nor Mr. Warren own any stock in the
companies discussed unless it is fully disclosed.
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