First Poland, Now Russia Confiscating Private Pension Assets

If Poland can do it, then Russia can too.  Another precedent for government confiscation of private pension assets: 
"Russia’s government is temporarily seizing $7.6 billion in savings from non-state pension funds while it carries out inspections"
http://blogs.wsj.com/emergingeurope/2013/10/03/russia-to-grab-pension-money-temporarily/

http://rikgreeninvestorforum.blogspot.com/2013/09/poland-nationalizing-private-pension.html

COMEX Contracts Allow for Forced Cash Settlement

According to David Morgan in this interview by usawatchdog.com precious metals forward contracts allow for the COMEX to force cash settlement.  Therefore, if the COMEX runs out of physical metal it will not technically default.  The discussion of a potential COMEX default begins at minute 14:30 in this video interview.  

There is no reasons to doubt Morgan's read of COMEX contracts.  I like his attitude, "read the contract."  I would like to.  Can anyone refer me to a copy of COMEX precious metals contracts?

This raises the big question of why anyone would use the COMEX to trade in precious metals if there are situations where you could be stuck with fiat currency instead of bullion.  The current price of paper gold must be discounted for this risk.  Amazingly one can still purchase physical from coin dealers for example for near paper gold prices.  The discount can be this small only because every COMEX trader thinks they will be able to get out before there's a run on the vault.

Run you fools . . . 

JP Morgan's Regulatory Issues Should be Ignored, CNBC

You must watch this, especially if you have any confidence in the main stream business press.   Thank goodness for Matt Taibbi.  The Majority Report is new to me.  I will check them out more often.    

The curtain is pulled back on the presstitutes at CNBC in this video clip:
http://www.rollingstone.com/politics/blogs/taibblog/talking-jamie-dimon-with-sam-seder-of-the-majority-report-20131001  They really are ready to ignore 'regulatory problems' because Dimon is making record profits at JP Morgan.  The ends justify the means.  Unethical and illegal behavior is a cost of doing business.  And, as long as the ends more than cover the costs it is to be encouraged and rewarded.  

JP Morgan has paid $16B over the last 3 years in fines and legal settlements:
 http://www.rollingstone.com/politics/blogs/taibblog/chase-once-considered-the-good-bank-is-about-to-pay-another-massive-settlement-20130718#ixzz2ZQq176Ev   

And, that does not include $6B of 'London Whale' loses in 'hedge' investments that JPM should never have made.

And one more thing, JP Morgan's record profits are coming mostly from zero interest rate financing from the US Fed and mark to model accounting of their investments, not from brilliant leadership.

Gold could go to $1,000/ounce. Really? Rant Warning!

Many precious metals market pundits and news services are losing credibility fast.  The puff pieces are not distinguishable by reading the headline.  I keep getting suckered in to wasting time on speculation.  "Gold could go to $1,000" claims the pundit who has enough credibility to get video time on kitco.com news.  http://www.kitco.com/news/video  OK, thanks.  That's nice.  When? and Why?  If you are not confident enough with your market prognostication to provide a timeline then keep it to yourself.  Is gold going to hit $5,000 before private ownership is outlawed and then drop to $1,000?  Will the new dollar be issued for 10 old dollars and be backed by 1/1,000 an ounce of gold?

Why? Why? Why, is your forecast going to come true?  Do you have any new information or perspective to add?  Or, is it just over bought?  Or perhaps the technical analysis shows an inverse head and shoulders pattern just as the market exhibited in 1976.  

What does over bought mean?  There were just as many sellers as buyers!  Is a stock down for the day because it was over bought or because there was profit taking?  My ears now translate these buzz words as "I have no idea, but I need to say something."   

Is there anyone left who thinks that technical analysis can predict precious metals prices over the next day, week, or month?  Did any chartist predict that gold would fall from $1,700 to $1,100 in the first half of this year?  Did anyone forecast that gold would rebound from $1,100 to $1,400 in the last 3 months?  Predictions from charts are doomed to fail because they are based on history.  Precious metals markets are event driven when they are not being manipulated.  Events do not repeat themselves.  They are not cyclical.  Big events are so random that they get named black swan or crash.  

Even if a forecast accurately predicted an event, would it also guess the impact to precious metals correct?  Who would have thought that when the US government shut down the price of gold would drop 3% as it did on October 1st?  That price drop certainly had more to do with the bullion banks dropping large sell orders than with any macroeconomic event.  http://rikgreeninvestorforum.blogspot.com/2013/10/how-long-can-pigmen-keep-suppressing.html

The bullion banks are manipulating the prices of precious metals on the COMEX and the LBMA.   Trading during the day, week, month and even year is therefore, a function of the bullion banks greed and fear.  Greed to run the stops and fear of physical delivery demands.  Is a technical analysis or chart going to predict that someone would offer 300 tons of gold for sale on the COMEX in 30 minutes at any price as happened in mid April?  http://www.zerohedge.com/news/2013-04-15/gold-crush-started-400-ton-friday-forced-sale-comex

Investors have very little reliable, timely information about the precious metals markets.  How credible are the COMEX trading and warehouse data, the Commitment of Traders (COT) reports, and ETP inventory, for example.  We must use these reports because they are the only data available.  Use with a very skeptical eye.  The publishers have the motive and the opportunity to deceive and a track record of greed, corruption, and unethical behavior.

Harvey Organ's daily reporting is terrific.  But, remember that he reports the tonnes of gold at GLD each night and then comments that "There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat  (same banks) http://harveyorgan.blogspot.com/

Only the manipulators can predict short term prices in these opaque, managed markets.  Don't waste my time with what COULD happen.  Focus on facts.  What is happening with physical bullion demand or supply?  Is there anything new regarding confiscation risk?  What premiums are being paid for physical?  Where?  There is a lot to learn and report without resorting to speculation.

Historical Gold Prices Show Volatility - Don't get left behind!

This link is to a good commentary by Michael Kosares at usagold.com 
http://www.usagold.com/publications/octreview2013.html

It is reassuring to know that gold prices have not increased as quickly nor as much as as the NASDAQ in the 90's and gold in the 1970's and oil in the 2000's.  These comparisons do not however prove that gold is not currently in a bubble.  History repeats itself, but maybe the current situation is different.  When was the last time the world reserve currency was dramatically debased while alternative currencies were not available (e.g. the Chinese Yuan) or in worse shape (e.g. Euro and Yen)?  When was the last time that gold prices were set based on a contract to deliver gold and not physical?  The extent of price manipulation in the precious metals markets makes historical comparisons dangerous.  

The chart of historical gold prices adjusted for CPI is a good reminder.  For a gold bull, the historical volatility in gold prices is remarkable.  And, volatility in recent years must be compounded by the advent of derivatives and ETP trading.  Reading from the chart gold jumped from $1,000 to $2,500 in about 3 months back in 1979.  When gold jumps it really takes off.  Don't get left behind.  

US Mint Sales of Gold Coins slow in September. Silver sales decelerating.

Sales of gold Eagle and Buffalo coins by the US Mint were 23,000 ounces in September, compared to 21,500 in August and 69,000 in July.  September gold sales were 7% more than in August, which was the lowest month since June 2008.  As of September, year to date gold sales are 904,000 ounces which is 56% more than in 2012 and significantly less than in 2009, 2010, and 2011.  The US Mint reported September sales of 10,000 gold Buffalo coins and 13,000 ounces of gold Eagle coins.

Sales of silver Eagles by the US Mint were 3,013,000 in September, compared to 3,625,000 ounces in August.  September sales were the lowest month of this year and 7% less than in September 2012.  Year to date silver Eagle sales are a record 36,088,000 ounces which is 40% more than 2012 and significantly more than in earlier years.  

http://www.usmint.gov/about_the_mint/index.cfm?action=PreciousMetals&type=bullion

The US Mint decreased the retail price for an uncirculated Gold Eagle by $50 to $1,625 during September.  An uncirculated silver Eagle retails for $43.95 which is unchanged from July and August.

A quick survey of 3 internet coin dealers shows that pricing for gold and silver Eagles is about $65 and $3.00 over spot respectively.  The premium for gold Eagles is the same as last month while the premium for silver Eagles has decreased about $1.00.  These price premiums are based on purchasing one coin.  All dealers offer volume discounts for larger purchases.  Spot gold and silver market prices are currently $1,318 and $21.88, respectively.

Coin dealers are currently offering to pay about $25 and $1.75 over spot to purchase gold and silver Eagles, respectively.  This seems reasonable because the US Mint charges dealers 3% for gold and $2.00 per coin for silver premiums.  Dealer purchase premiums are not hinting at supply constraints as they were in April and May.

Coin sales by the Austrian and Australian mints have followed the same trend as US Mint sales.
http://www.bloomberg.com/news/2013-08-28/austrian-mint-increases-gold-sales-as-price-slump-spurs-demand.html
http://www.bloomberg.com/news/2013-07-04/gold-sales-slump-at-australia-s-perth-mint-as-rout-deters-buyers.html

Rik Green's Investors Forum Growth Portfolio down 5% in September

Rik Green's growth portfolio <Port-faux-lio> lost 5.5% in September while the S&P500 gained 3.0%.  CVX which is 38% of the portfolio's value was flat and GG which is 22% of the value dropped 12% during September.  Gold and silver lost 5% and 8% respectively during the month.  PSLV, PHYS, CEF, SLW, and AUY all depreciated about the same as their underlying precious metal.  CDE was down 17% and is almost as low as at the end of June which was the lowest it has been since 2009.  In July, CDE rebounded from its June low and appreciated almost 50% in one month.  CDE is a volatile stock.

Year to date the port-faux-lio is down 11.3% and the S&P 500 is up 17.9%.  Gold and silver ended September at $1,329 and $21.70, respectively which is down 21% and 29% year to date.

In mid-May and August the port-faux-lio traded some CVX shares for more gold and silver related investments.  The trade does not looks so good right now as CVX is currently about flat with its sale price, but SLW, CDE, AUY, and PHYS are down.  This is a good time to double down, because CVX is still over $120 per share and the precious metals are beaten down.