Monday, December 31, 2012

Fiscal cliff fiasco/gold and silver rise

Good evening Ladies and Gentlemen:

Gold closed up $19.90 to finish the year at $1674.80.  Silver finished the year at $30.17 up 25 cents.
Gold has now risen in each of the last years and many have said that no other asset class can boast a gain every year for 12 years.  Today the story is the farce behind the fiscal cliff.  Yesterday Durban, one of the big Democrats stated that it would be foolish for them to entertain a deal and not deal with the debt ceiling which was officially hit today.  There will be no vote tonight so officially, the USA goes off the cliff.
However there will be deals on the tax front preventing many from paying higher taxes.  The real issue left undone is the debt ceiling which must be addressed by March 2013.  Tonight's commentary will be short so you can get ready for New Years.  I will outline a few major stories but first.......................................

Let us now head over to the comex and assess trading today.

The total comex gold open interest rose by 2060 contracts from 423,459 up to 425,519. I guess we had a few paper players wishing to take on the establishment
The non active January contract gold month saw it's OI fall by 35 contracts from 838 down to 803.  The next big active contract month is February and here the OI rose by 1527 contracts from 254,772 up to 256,299.  The estimated volume today at the gold comex was extremely weak coming in at 79,799.  The CME folks are quite concerned over this lack of volume and maybe a reason for the lowering of margin levels for gold. The confirmed volume on Friday was also very weak at 83,186.

The total silver comex continues to play in a very narrow band surrounding an OI of 140,000.  The longs seem to be taking their time on silver ready to pounce when the right time arrives.  The OI settles the year end at 141,748  a loss of a tiny 436 contracts from Friday's level of 142,154.  The non active January contract month saw it's OI fall by 76 contracts from 420 down to 344.  The big active March contract saw it's OI fall by 310 contracts from 80,349 down to 80,039.  The estimated volume today was mainly vapour coming in at only 15,310.  The confirmed volume on Friday was also anemic at 22,035. Very few are willing to take on the establishment.

Comex gold figures 

Dec 31.2012    The  January contract month

initial standings for January in gold.


Withdrawals from Dealers Inventory in oz
Withdrawals from Customer Inventory in oz
Deposits to the Dealer Inventory in oz
Deposits to the Customer Inventory, in oz
2218.35  (Scotia)
No of oz served (contracts) today
 677     ( 67,700)
No of oz to be served (notices)
126  (12,600 oz)
Total monthly oz gold served (contracts) so far this month
677  (12,600 oz) 
Total accumulative withdrawal of gold from the Dealers inventory this month
Total accumulative withdrawal of gold from the Customer inventory this month

Today, we  had tiny activity  inside the gold vaults 

The dealer had no deposits  and no   withdrawals.

We had 1  customer deposit:

i) Into Scotia:  2218.35 oz

total deposit:  2218.35 oz

we had 0   customer withdrawals:

total customer withdrawal  zero oz

We had 2 adjustments and they were biggies:

i) Out of the HSBC vault, 5945.45 oz leaves the dealer and enters the customer
ii) Out of JPMorgan:  327,503.706 oz leaves the dealer and enters the customer account at JPMorgan.

total adjustments out of dealer 333,449.156. (10.37 tonnes)

this surely looks like gold has been settled upon longs. The gold received by the dealers originated  from the customer.

Thus the dealer inventory rests tonight at 2.288 million oz (71.16) tonnes of gold.

The CME reported that we had a rather large 677 notices  filed on first day notice or 67700 oz of gold. To obtain what is left to be served upon, I take the OI for January  (803) and subtract out today's delivery notices (677) which leaves us with 126 notices or 12600 oz of gold left to be served upon our longs.

Thus the total number of gold ounces standing in this non active month of January is as follows:

67,700 oz (served)  +  12600 oz (to be served upon) =   80,300 oz or 2.50 tonnes.

Generally, January is a very weak delivery period for both gold and silver and thus the 2.5 tonnes of gold is quite a surprise.


Dec 31.2012:   The January silver contract month

Initial standings for silver for January

Withdrawals from Dealers Inventorynil
Withdrawals from Customer Inventory  367,414.14  (Scotia, Delaware)
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory   1,491,457.24 oz (Brinks,Scotia)
No of oz served (contracts)299  (1,495,000 oz)
No of oz to be served (notices)45  (225,000 oz)
Total monthly oz silver served (contracts)299  (1,495,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this monthnil
Total accumulative withdrawal of silver from the Customer inventory this month367,414. 14

Today, we again had good activity  inside the silver vaults.

 we had no dealer deposits and no   dealer withdrawals:

We had 2 customer deposits of silver:

i) Into Brinks:  900,911.61  oz
ii) Into Scotia:  590,545.63 oz

total deposit:  1,491,457.24 oz

we had 2 customer withdrawals:

i) out of Delaware:  1,000.000 oz
ii) out of Scotia:  366,414.14 oz

total customer withdrawal:  367,414.14  oz

we had 2  adjustments:

i. Out of the HSBC vault, 4784.800 oz leaves the dealer and enters the customer
ii) Out of JPMorgan vault:  1,716,160.63 oz leaves the dealer and enters the customer

these transactions no doubt are part of the settlement process.

I have still not received any answer from the CFTC  regarding the round numbered deposits/withdrawals in gold and silver we have been witnessing lately, especially from the CNT vault.  

Registered silver remains today at :  40.299 million oz
total of all silver:  148.205  million oz.

The CME reported that we had 299 notices filed first day notice for this evening. 
The total number of silver oz is represented by 1,495,000 oz.  To obtain what is left to be served upon, I take the OI standing for January (344) and subtract out today's delivery notices (299) which leaves us with 45 or 225,000 oz left to be served upon our longs.

Thus the total number of silver oz standing for the month of January is as follows:

1,495,000 oz (served)  +  225,000 (oz to be served upon)  =  1,720,000 oz

this is quite a showing for silver in a non active month.
It shows the heavy demand for comex silver from various players.
My guess is that actual oz standing will increase as the month progresses for both gold and silver.


The two ETF's that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.

Total Gold in Trust   Dec 31.2012  



Value US$72.239 billion

Dec 28.2012:



Value US$71.959  Billion

Total Gold in Trust   Dec 27.2012  ( at 6 pm)



Value US$71.873  Billion

Dec 26.2012:



Value US$72.178 billion.

Dec 24.2012:



Value US$72.180 Billion

we neither gained nor lost any gold ounces into/out of the GLD vaults.

and now for silver:

Dec 31.2012: 

Ounces of Silver in Trust322,981,444.700
Tonnes of Silver in Trust Tonnes of Silver in Trust10,045.85

dec 28.2012:

Ounces of Silver in Trust322,981,444.700
Tonnes of Silver in Trust Tonnes of Silver in Trust10,045.85

Dec 27.2012:

Ounces of Silver in Trust322,981,444.700
Tonnes of Silver in Trust Tonnes of Silver in Trust10,045.85

Dec 26.2012:

Ounces of Silver in Trust322,981,444.700
Tonnes of Silver in Trust Tonnes of Silver in Trust10,045.85

Dec 24.2012:

Ounces of Silver in Trust322,981,444.700
Tonnes of Silver in Trust Tonnes of Silver in Trust10,045.85

no change in the silver inventory

And now for our premiums to NAV for the funds I follow:  

Sprott and Central Fund of Canada. 

(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)

1. Central Fund of Canada: traded to a positive 3.5 percent to NAV in usa funds and a positive 3.2%  to NAV for Cdn funds. ( Dec31 2012)   

2. Sprott silver fund (PSLV): Premium to NAV rose to 1.5.4% NAV  Dec 31./2012
3. Sprott gold fund (PHYS): premium to NAV  fell to 1.37% positive to NAV Dec 26.2012. 

 Now we witness the Central fund of Canada  gaining big time in its positive to NAV, as we now see CEF at a positive 3.5% in usa and 3.2% in Canadian.This fund is back in premiums to it's former self with respect to premiums per NAV. 

The silver Sprott fund announced a big silver purchase and this reduces the premium to NAV temporarily.  It seems that the bankers are picking on Sprott to short their funds trying to cause an avalanche in selling in the precious metals.  They are foolhardy in their attempt.

It looks like England may have trouble in finding gold and silver for its clients.
It is worth watching the premium for gold at the Sprott funds which is a good indicator of shortage as investors bid up the premiums.



Here are your major physical stories:

 For the past 8 years, gold has advanced greater than the Dow
We almost had 9 years in a row.  The Dow with it's big advance today eked out a small gain against gold.

However for 12 consecutive years, gold as an asset class has advanced per year every year.  As we have been told, no other asset class can claim this type of advance:

(courtesy zero hedge)

Will Gold Make It 9 Out Of 9?

Tyler Durden's picture

For the past eight years-in-a-row, that worthless yellow barbarous relic that some call 'Gold' has outperformed the 'precious' Dow Jones Industrial Average (even with the constant DJIA re-indexing where the losers are quietly taken out back and shot). As we enter the last day of trading in 2012, Gold still holds a slight edge +6.3% on the year vs the Dow's +5.9%. Will 2012 break the record-breaking run? Or will Warren Buffett's nemesis once again outperform equities and with lower volatility - just a few more hours to find out...


Gold trading from Europe early this morning:

(courtesy Ben Traynor/bullion vault)

Gold Records 5.7% Annual Gain, Still No Deal on Fiscal Cliff

By: Ben Traynor, BullionVault

-- Posted Monday, 31 December 2012 | Share this article | Source:

London Gold Market Report

WHOLESALE gold bullion prices touched their highest level since Christmas at $1669 an ounce during Monday morning's London session, before easing slightly towards lunchtime to record a 5.7% gain for 2012 at the final gold fix of the year.

Silver failed to hold gains from Asian trading, falling back towards $30 an ounce.

Major European stock markets ticked lower this morning following news that no deal has been done in Washington to avoid the so-called fiscal cliff. An exception was France's CAC 40 Index, which rose following news of a setback to the French government's plans to raise taxes on the wealthy.

Oil prices edged lower meantime, falling for the third day in a row, amid concerns the US economy is about to see automatic tax rises and cuts in government spending which could threaten a new recession.

"[The Republicans] say that their biggest priority is making sure that we deal with the deficit in a serious way," President Obama told Sunday's edition of NBC's Meet the Press.

"But the way they're behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected."

"Americans elected President Obama to lead, not cast blame," countered John Boehner, Republican speaker of the House of Representatives.

"The president's comments are ironic, as a recurring theme of our negotiations was his unwillingness to agree to anything that would require him to stand up to his own party."

If the two sides fail to agree a deal by tomorrow on how to tackle the budget deficit, automatic tax rises and spending cuts worth around $600 billion will come into effect.

"Some investors are looking through this in the hope that politicians can find a middle ground that will allow the increasing momentum in the economy not to be impeded," says Tim Schroeders, who helps manage $1 billion at Pengana Capital in Melbourne.

"It's disappointing that politics has got in the way to such an extent, with investors becoming increasingly nervous that this will drag on into the new year."

"Gold and silver will...find near-term support amid ebbing haven demand for the US Dollar," says a note from analysts at Swiss refiner MKS.

"But one should be cautious when an agreement is reached," they add, noting that this could be followed by "a sharp downtick".

Over in Europe, the French government will press ahead with plans to introduce a 75% tax rate for the wealthy, the country's finance minister has said, despite France's constitutional council ruling against the measures on Saturday.

"We are in a period of is logical that the wealthiest should make a contribution at this time," Pierre Moscovici told the Financial Times, adding that the council's ruling was technical rather than fundamental.

Manufacturing growth in China meantime accelerated in December, according to HSBC's purchasing manager's index, which hit its highest level since April 2011 this month (a figure above 50 indicates increased sector activity during the month).

The final London gold fix of 2012 on Monday morning was $1664 an ounce – an annual gain of 5.7%.

Gold in Euros traded at €1261.56 an ounce at the time of the fix – up 3.7% on the year – while gold in Sterling ended the year up 0.9% at £1029.32 an ounce.

Ben Traynor

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault's weekly gold market summary on YouTube and can be found on Google+

(c) BullionVault 2012


Gerald Celente on what to expect in 2013 with respect to gold and silver:

(courtesy Greg Hunter/Gerald Celente)

Gerald Celente on 2013, Gold and Silver and WW III

By Greg Hunter’s
Dear CIGAs,
Trends forecaster Gerald Celente predicts the global financial system will continue to be propped up.  Celente says, “The scheme continues to go, the scheme being dumping cheap money into the system to perpetuate an economy that should have crashed in 2008.  So, for 2013, our best shot is more of the same, but worse.”  Celente’s advice for people who want to protect themselves financially, “Continue to buy gold and silver because a currency war has broken out.”  Celente says gold’s assent has stalled because the financial elite “rigged the game” just like the $800 trillion global LIBOR interest rate market.  Celente asks, “Don’t you think they’re rigging the gold and silver markets?”  Celente contends the fuse is lit on the Middle East and North Africa.  He thinks, “The Arab Spring has nothing to do with a democracy movement.  It has to do with far too few having much too much and way too many having much too little.”  Celente predicts, “If anybody attacks Iran, it will be full-fledged World War III.”  Join Greg Hunter as he goes One-on-One with Gerald Celente, publisher of The Trends Journal.


A must read:

(courtesy Alasdair Macleod)

Alasdair Macleod's Outlook for 2013

-- Posted Sunday, 30 December 2012 | Share this article | Source:

By Alasdair Macleod
I have not faced the prospect of a new year with so much trepidation as when I contemplate what is in store for 2013. Systemic risks abound, which of themselves are not the main story, only milestones on the road to final currency destruction, unless governments somehow regain their senses.
To help understand the perils of 2013 I shall give them their background context first before listing them individually. No such list can be exhaustive or temporally sequenced, but all on it have the same root: the long-term accumulation of a burden of unsupportable debt.
This is a story that started with the end of the First World War, and involves a world which replaced laissez-faire with political motivation in economic and monetary affairs, moving away from wealth-creation into wealth-destruction in the cause of the common good. This was what motivated Keynes. In his Concluding Notes to his General Theory he said as much: he looked forward to the “euthanasia of the rentier” (a term for saver he intended to convey disdain), to be replaced by “communal saving by the agency of the state to be maintained at a level which will allow the growth of capital up to the point where it ceases to be scarce”. Monetarists in charge of central banks join Keynes in this objective, acting as the agency by which savings are destroyed and capital is made to be no longer scarce.
I shall not go into business cycle theory, beyond to say that government and central bank manipulation of their economies and fiat monies has succeeded in deferring the bankruptcies and liquidation of accumulated malinvestments, to the point where their cost can no longer be sustained. By 2007/08 the accumulation of debt was too large for distorted, burdened and weakened economies to support. And this is not just a single-country problem, because it has become a problem everywhere. The United States, the United Kingdom and the eurozone countries reached this terminal point together while Japan had been waiting in the wings for them to catch up. These nations alone account for about half global GDP. The banks to which all this debt is owed are financially interconnected and also linked to other banks in countries where the debt bubble is not so acute.
The coincidence of all nations following the same path to destruction is the result of international coordination that has increasingly dominated global politics since the Bretton Woods Conference in 1944. The response to the financial crisis of 2008 was to draw in more participants, leading to the G20 becoming the post-crisis forum for international economic coordination. Never in modern history have we seen so many governments agreeing to make the same mistakes; and it is hard to see, with the underlying inter-connectivity of their banks, how there is room for dissent.
The global banking system for the last five years has struggled with insufficient capital, over-valued collateral, and an underlying tendency for balance sheets to deflate. Their respective governments through their central banks are back-stopping these insolvent institutions by flooding them with both sovereign debt and fiat money, and manipulating credit markets to maintain valuations. Take these distortions away and we see the private sector economy still contracting four years after the credit bubble burst, a fact that is concealed by the expansion of both government spending and fiat money. Otherwise, bank balance sheets would have contracted, wiping out their aggregate capital, in some cases several times over.
Governments do not generally realise they are in the midst of an economic collapse. The manipulation of credit, money and prices has made economic calculation impossible. There is little difference in this respect between the communism of failed states in the past and the regulated and planned economies of today, except perhaps in the degree of state interference. As happened with the Soviet Union, eventually ordinary people, by acting in their individual interests, will bring about the downfall of their governments. It is bound to happen unless governments reverse course.
That is a very brief summary of the global crisis, and being fully committed to Keynesian fallacies it is immensely difficult for governments to turn back. In the longer term, government health and welfare spending is also escalating beyond control. Furthermore attempts to reduce persistent budget deficits through higher taxes on the private sector will only depress economic activity, reducing tax revenues. The majority of economists, the neo-classicists who misunderstand the very basis of their subject, seem unable to grasp the origin of the problem they themselves have helped governments to create.

Systemic risks in 2013


Banks are interconnected through interbank and cross-border loans. They are also linked by counterparty risk in derivatives and by off-balance-sheet hypothecation of collateral. Collateral is always someone else’s property used and reused profitably without their involvement and often knowledge. The level of bank capital behind on- and off-balance sheet liabilities is inadequate to cover either hidden losses, systemic contagion or a resumed downturn in the global economy. Hidden losses are those covered up by earlier changes in accounting rules and from malinvestments not yet recognised. Systemic risks include sovereign defaults, significant falls in collateral values, and counterparty failure in derivative markets. And the slump in the private sector, stripped out from national statistics, continues.
The banks have become corrupted institutions continually on the verge of failure. They serve themselves and their governments at the expense of their customers. Nevertheless they will continue to be rescued by central banks through further monetary expansion and by state guarantees irrespective of the cost. This will be particularly dangerous for countries with large bank balance sheets relative to their GDP, such as the UK and Switzerland.

Sovereign countries

The US economy, as well as facing the immediate fiscal cliff crisis, is caught between the economically destructive effects of increasing taxes, and rapidly escalating health and welfare costs. The economic recovery upon which forecasts of future deficits depend is made more remote by erroneous economic and monetary policies, and there is little appetite to address mandated spending. The outlook is therefore one of deteriorating government finances, and a possible need to raise interest rates sooner than expected to curb the inevitable price-inflation effects of accelerated money-printing.
The eurozone is clearly in a financial and economic crisis. The ECB is prepared to do all that is necessary to stop the problems of Greece being replicated elsewhere, but it is almost certainly too late. The burden of the euro-system on Germany, the Netherlands, Finland and Austria is far too great for them to bear, and we can expect mounting political dissent in this election year for Germany. In 2013 we should see the combined problems of Spain, Italy and France begin to undermine the value of their sovereign debt. Their bonds are over-valued, and owe their status mostly to Basel Committee rules on capital adequacy and on misplaced confidence in the ECB. The eurozone’s banking system is under-capitalised and already bankrupt on realistic assumptions.
In Japan the Bank of Japan faces irreconcilable difficulties. With one quadrillion yen of government debt the new government is now forcing the BoJ to finance its continuing deficit by monetary means. Furthermore savers are now dissaving at an accelerating rate, leading to a developing trade deficit. Japan at last appears to be entering the final stage of her economic collapse, which started with the end of her bubble exactly 24 years ago.
The UK faces similar problems to the US, with taxes actually designed to discourage wealth, and she faces intractable welfare and health costs. Her government is politically weak with a coalition that prevents all attempts to move away from social priorities towards economic reality. She is also exposed to a disproportionately large finance and banking sector with high international exposure, particularly to the eurozone, which will be an unsupportable burden on the state if the banking crisis develops further in 2013.
Watch out for developments in the following
  • Inflation, which will pick up unexpectedly if there is a shift of preference from money to goods, the consequence being accelerating stagflation. Bear in mind that governments usually under-report inflation, and prices in the US, UK and other nations are already increasing at a significantly faster rate than CPI measures suggest.
  • Interest rates, which may have to rise sooner than expected due to inflationary concerns. This being the case, an implosion of asset prices could begin if markets price in rising interest rates before they happen, destroying the ability of central banks to retain control of prices in credit markets.
  • A further downturn in the US private sector economy, (excluding government).
  • Rising bond yields for Spain, Italy or France.
  • Deterioration in Japan’s trade balance and weakness in the yen.
  • The bursting of bond market bubbles, particularly in the US, UK, Germany, Japan or France.
  • Crisis meetings by governments and central banks that resolve nothing and only further public understanding of their inadequacies.
  • Derivative markets, and their exposure to counterparty risk, hypothecation and rehypothecation of collateral.
  • Silver markets, where there are large short positions held by the bullion banks and so are vulnerable to a vicious bear-squeeze. If this happens a sharp rise in gold prices will also be triggered, and possibly spread to other metals and beyond.
  • Growing social unrest.
  • Further clampdowns on personal freedom
Is there a solution?
Yes, but it is unlikely to be taken. All that is required is for enough of the G20 membership to stop destroying wealth, in order to contain near-term global systemic risks. A government that understands this will cut its own spending and obligations, remove taxes from savings and discourage its citizens from relying on state welfare. By removing itself from provision of health and education services, the costs to society will be substantially reduced and they will become focused to provide only what is actually wanted of them. Unnecessary resources will be released to be deployed more effectively elsewhere.
Such a government will learn the value of sound money and its importance for economic calculation, and it will move as a matter of policy towards securing sound money in everything it does. It will understand it has no role in the trinity of consumer, saver and entrepreneur, restricting its role to ensuring that property rights are inviolate. It will dispense with its central bank as a tool for intervening in markets. Interest rates will be set by markets in accordance with users’ needs.
And above all it will remove all government regulations, forcing businesses to value and enhance their own reputations, individuals to make their own choices, and savers to decide for themselves how much to save and who to invest it with.


We are one year closer to a renewed banking and financial crisis, the pace of which is quickening, and which can be expected to turn eventually into a fiat currency collapse. These systemic risks increased in 2012, most notably in the eurozone, but also elsewhere. None of the solutions applied anywhere did any good.
On the evidence to date, it has become less likely any Western government can or will take the right steps to avoid an eventual collapse of their currency, so 2013 is more likely to realise systemic failures than 2012.
Alasdair Macleod runs, a website dedicated to sound money and demystifying finance and economics. Alasdair has a background as a stockbroker, banker and economist. He is also a contributor to GoldMoney - The best way to buy gold online.


John Embry of Sprott Asset Management discusses his outlook for 2013:

(Kingworldnews/John Embry)

John Embry gives King World News his outlook for 2013

2:32p ET Monday, December 31, 2012
Dear Friend of GATA and Gold (and Silver):
Sprott Asset Management's John Embry today gives King World News his outlook for the new year. While he is surprised that Western central banks managed to keep gold under as much control as they did this year, he sees that coming to an end in 2013, as well as a rocket launch for silver. An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


Dave from Denver/the GoldenTruth talks about how cheap gold/silver equity stocks are tonight!

(courtesy, the Golden Truth/Dave from Denver)


What Gold Bubble? Mining Stocks Are Dirt Cheap

When the people fear their government, there is tyranny; when the government fears the people, there is liberty  - Thomas Jefferson
I thought of that quote when I read yesterday that the U.S. Senate has extended the law enabling the Government to search our emails and monitor our cellphones without a warrant.  This country is collapsing...

I wanted to revisit briefly the notion that gold might be in some kind of bubble.  A lot of people have contacted me expressing disappointment with gold's recent behavior and many have dumped their mining stocks or plan to do so.  This is a  mistake.

First, assuming it doesn't drop around $95 on Monday, gold will have completed its 12th straight year of year-over-year gains.  Name one other asset class that has done that.  In terms of reaching a new high, gold did that in August 2011 and the new high was followed by the current price correction cycle.  These cycles typically last an average of 18 months, so we are nearing the end of this correction cycle.

Finally, I was struck by a chart posted by which shows the serial decline of gold demand in the western hemisphere.  I wrote about that  HERE  As you can see, based on demand metrics gold is decidedly not in an investment "bubble."

From a fundamental standpoint, the mining stocks, as represented by the HUI Amex Gold Bugs Index of unhedged mining stocks, are as cheap relative to the price of gold as at any time over the last three years. This is actually true going back 10 years. As you can see from the HUI/gold chart I posted in the linked article, the HUI/gold ratio chart has consolidated just above a 3-yr low, after testing the 3-yr low twice. To reinforce the potential bullishness of the mining stocks, the momentum indicators represented by the RSI and MACD are moving higher from an "oversold" condition.

My prediction for 2013 is that it will be a very happy year indeed for anyone aggressively invested in the precious metals and mining stock sector. 

Your early morning overnight sentiment from Europe/Asia:

Major points:

1. no news on the fiscal cliff issue. The senate adjourned last night with no agreement and they began at 11 am.

2,  Greece's October sales plummeted by 18.1% by volume (17.1% by revenue)..biggest drop in two years. The Greek economy has never been worse.

3. Merkel states that conditions in 2013 will be tough and that Europe's financial crisis is far from over.

4.The French ruling that states it's tax of 75% on high income earners is unconstitutional will still not bring back wealthy French who left for England and/or Belgium.

your early morning market sentiment:

(courtesy zero hedge)


Tyler Durden's picture

It's the last trading day of the year, nothing has been resolved on the Cliff, the perpetually wrong media has now decided to change its tune and  spin the Wile E. Coyote plunge as a "good thing" (just as we expected), Congress is nowhere, the Senate failed to reach any resolution last night and is resuming the "negotiations" farce at the bright and early hour of 11 am, and yet somehow, in spite of everything, the strong bid under the futures refuses to go away (thank you Kevin Henry). This despite what is becoming clear to even this broken market (InTrade odds of a debt ceiling deal by the end of today are still a substantial 2.3%) that there will likely be no deal until some time in February or March when the debt ceiling extensions expire by which point the only question is how deep the US recession will be. And still everyone will be shocked, shocked, when nothing is done today either. Why? Because the market continues to price in an outcome which demands that it crash for it to be achieved. That so few grasp this is frankly, disturbing. Also, everything else is perfectly enjoyable theatrical noise. And just to keep the excitement factor really high, most rates and FX markets close early today, with rates and FX futures markets close at 1pm New York time while cash bond trading at 2pm.
Not like news matters anymore, but here is what else happened recently, via BBG:
  • Greek October retail sales imploded by 18.1% by volume and 17.1% by revenue, the biggest dump in 2 years and proof that despite Greek hedge fund bondholders being made whole, the Greek nation and economy has never been worse.
  • Merkel said the economic environment will be more difficult in 2013 than this year, and that Europe’s sovereign debt crisis is "far from over," though progress has been made
  • A French court’s rejection of Hollande’s 75% millionaire tax shows the limits on his ability to tap high earners, even as the ruling is unlikely to attract investors and executives back to France
  • BofAML Corporate Master Index OAS narrows to 153bps. $54.9b has priced in December. Markit IG widens 1bps to 98bps; YTD low 83bps. High Yield Master II OAS rises 2bps to 530bps; $25.26b has priced this month. Markit HY narrows 5bps to 510bps, YTD low 445bps
  • $6.6b ABS priced in December
  • EUR/USD falls, trades at $1.3187. Asian, European stocks mixed; U.S. equity-index futures higher. Energy complex lower, precious metals gain.
Oh, and finally today the US finally breached its latest and greatest debt ceiling as reported previously. But just one more hike, and this time the US will get its financial house in order. Promise.



It seems that China is on a collision course with the new Japanese government under Abe:

(courtesy zero hedge)

Chinese Think Tank: "Conflict With Japan Inevitable"

Tyler Durden's picture

Shinzo Abe's re-election on the basis of his monetary policy aggression plans have sent the JPY reeling (as he hoped for) and the NKY soaring - but it is his more aggressive perspective on patriotism that could lead to far greater problems. As the Chinese Academy of Social Sciences recently noted,all eyes are fixed on Abe as "Japan’s nationalization of the Diaoyu Islands destroyed the framework for keeping a balance, which means ‘shelving a conflict'," a Chinese diplomatic source said, adding that "China has no political methods to return the situation to the (pre-nationalization) state. Therefore, there are no other ways except for looking for a new framework." As a precondition for establishing the framework, an executive of the think tank said, "Prime Minister Shinzo Abe should not take actions that heighten the tensions further. It is the same as a game of go. If Japan escalates the conflict, China will be prepared to respond to the move." As a result, Japan-China relations will enter into a highly volatile period, ruining any hope of a resurgence in Japan's real economy, and more worryingly, the think-tank concludes, China's conflict with Japan is inevitable.

With the rise of China as Asia's leading economic power, a Chinese government think tank says thenation's conflict with Japan over the Senkaku Islands is inevitable at a time when its bilateral relations are changing as a consequence.

The Chinese Academy of Social Sciences (CASS) also said in its annual report that the two countries’ relationship will enter into a highly unstable period.

While thinking that the conflict over the islands could be prolonged, China is now paying attention to what action the new Japanese government, headed by Prime Minister Shinzo Abe, will take.

The “report on the development of the Asia-Pacific region” points out that China’s rapid development is raising anxieties in surrounding nations, forcing them into taking precautions and requiring them to accept the “readjustment” of the power balance.

As for the Senkaku Islands, the report explained that Japan’s right-wing groups, which have gained strength through the country’s two decades of a sluggish economy called “the lost 20 years,” regarded U.S. policy of “pivoting to Asia” as the best opportunity to nationalize the islands. In September, Japan purchased three of the five Senkaku Islands, called the Diaoyu Islands in China, from a private landowner.

Until the new power balance is established in the fields of politics and economics, prolongation of the conflict is inevitable. As a result, Japan-China relations will enter into a highly volatile period, the report said.

“Japan’s nationalization of the Diaoyu Islands destroyed the framework for keeping a balance, which means ‘shelving a conflict,’ ” a Chinese diplomatic source said.

“China has no political methods to return the situation to the (pre-nationalization) state.Therefore, there are no other ways except for looking for a new framework,” the source said.

In a symposium held on Dec. 28, Chinese Vice Foreign Minister Zhang Zhijun said, “China and Japan should find crisis management methods through dialogue.”

With the comment, Zhang showed willingness to establish a framework for preventing possible clashes between vessels or aircraft around the Senkaku Islands from escalating into a military conflict.

As a precondition for establishing the framework, an executive of a think tank said, “Prime Minister Shinzo Abe should not take actions that heighten the tensions further.”

Since the days before Dec. 26 when the Abe government was formed, Beijing has been paying close attention to Abe’s hard-line remarks, such as stationing public servants on the Senkaku Islands or making visits to Yasukuni Shrine, which honors not only Japanese war dead, but also Class-A war criminals.

“It is the same as a game of go. If Japan escalates the conflict, China will be prepared to respond to the move,” the executive said.

Gao Hong, deputy director of the CASS’s Institute of Japanese Studies, said, “It is necessary for Japan-China relations to return to the original point of the two countries seeking long-term profits in their relationship.”


Japan lashes out over the depreciating USA dollar and the Euro:

(Wall Street Journal/GATA)

Japan lashes out over depreciating dollar and euro

By Takashi Nakamichi and Eleanor Warnock
The Wall Street Journal
Saturday, December 29, 2012
TOKYO -- Japan's new finance minister upped the ante in the country's war of words against the strong yen, lashing out at the U.S. and Europe for letting their currencies weaken dramatically and calling on the U.S. to strengthen the dollar.
The tirade from Taro Aso, Prime Minister Shinzo Abe's point person on currency strategy, underscores the increasingly pugnacious stance of the fledgling Abe government against what it sees as a global trend of currency devaluations.
Mr. Abe made weakening an unduly strong yen a plank in his party's campaign during national elections, which he won resoundingly in mid December. The strong, explicit rhetoric on yen levels from Mr. Abe and his deputies have sparked worries recently that Japan could be fanning the flames of a global currency war.

But Mr. Aso's words also highlight the deep frustration felt by many in Japan over the erosion of the country's global competitiveness from years of strong yen.
"The U.S. ought to do its job and make the dollar strong. And what about the euro?" Mr. Aso said Friday, during his first set of press interviews after taking office.
Mr. Aso said that the yen's value had risen sharply versus both currencies since a Group of 20 meeting of major economies three years ago in which countries made a promise not to resort to competitive currency devaluations.
"But tell me how many countries in the G-20 have stuck to that promise," Mr. Aso said. "We're the only ones doing things properly. Foreign countries are in no position to lecture us."
Mr. Aso also told reporters later that he conveyed his thoughts about the yen in a 30-minute phone call to U.S. Treasury Secretary Timothy Geithner, in which "I told him that there is no doubt that the yen's excessive, one-sided rally in the recent past is gradually being corrected. But I also said there is a good possibility that this situation could change again so we will keep a close watch" on the yen.
Treasury spokeswoman Natalie Wyeth Earnest said Secretary Geithner and Minister Aso spoke by phone Fiday morning, and discussed "the U.S.-Japan economic relationship as well as global economic and financial developments."
Mr. Aso isn't alone in airing exasperation at the level of the currency in recent years. A procession of Japanese executives and politicians have bemoaned the yen's strength, blaming it for a loss of competitiveness, dwindling earnings, bankruptcies, and the relocation of operations abroad.
Since the global financial crisis of the late 2000s, the dollar has fallen 30% to around Y86, putting considerable stress on Japanese exporters, whose products become less competitive overseas when their home currency rises. Much of the dollar decline happened during Mr. Aso's tenure as the country's prime minister, which lasted a year until Sept. 2009, and was partly blamed for the severe recession Japan experienced then.
According to market researcher Teikoku Databank, at least 51 companies went bankrupt in the first half of 2012 due to exchange rate-related issues, and their total debt -- one indication of the size of their operations -- was almost twice that for similar bankruptcies during the preceding four years.
Japanese car makers have been some of the most vocal in calling for relief as yen strength dents profits. Nissan Motor Co., for instance, has said that every Y1 of appreciation against the dollar translates into Y20 billion ($208 million) cuts in the company's operating profit annually.
"The one major obstacle to competitiveness is the exchange rate," said Nissan and Renault chief executive Carlos Ghosn, at a Tokyo forum on corporate management two months ago. "I don't think we are getting enough effort behind this. Many countries are bringing their currency to neutral territory. I'm not asking for incentives here; I'm just asking to bring the yen to neutral territory, allowing companies to do their job. ... I am facing Korean competitors in the Middle East. I can't compete."
Mr. Ghosn has in the past said that he'd like to see the currency around Y100 to the dollar.
The dollar has recently staged a sharp recovery, as Mr. Abe's pledge to strong-arm the Bank of Japan into easing monetary policy to weaken the yen has driven investors to sell off the yen. While that has cheered Japan's struggling exporters, Mr. Abe's drive toward a weaker currency has also raised concerns abroad that it could risk triggering a devastating global race to undercut currencies to protect export competitiveness.
Mr. Aso brushed aside the concerns as misplaced.
"We are not radically weakening the yen or anything like that," he said. "We still haven't taken any policies."
While the previous government under the Democratic Party of Japan intervened in the market to rein in the yen's strength, inviting sharp criticism from Washington, when Mr. Aso was prime minister, the government stayed away from the market.
Mr. Aso also acknowledged that a weak yen isn't without disadvantages.
"The only people who are celebrating seeing the currency weaken are the exporters," he said. "For importers, if the currency were to weaken, it's a problem."

* * *

Your early Monday morning currency crosses;

the Euro is down against the dollar,  The Japanese continues to deteriorate especially against the dollar.  However the British pound and Canadian dollar are up against the USA dollar.  The mood is optimism that a deal will be struck as thus we have a risk on situation.

Euro/USA    1.3189 down  .0025
USA/yen  86.14  up .292
GBP/USA     1.6168 up .0008
USA/Can      .9941  down .0023


your closing 10 year bond yield from Spain:  




5.265000.01000 0.19%
As of 07:13:06 ET on 12/31/2012.


Your closing Italian 10 year bond yield: 
climbing faster in yield than Spanish bonds

Italy Govt Bonds 10 Year Gross Yield



As of 12:03:08 ET on 12/31/2012.


Your 3:30 pm Monday currency crosses: , the Euro faltered at the close against the dollar, the Japanese yen continue to sink into a vortex.  The British pound advanced against the dollar and so did the Canadian dollar..  The dollar only advanced against the Canadian dollar. 

Euro/USA    1.3203 down  .0011
USA/Yen  86.71  up  .856
GBP/USA     1.6244 up .0084
USA/Can      .9927  down .0037


Your closing figures from Europe and the USA:

a bloodbath everywhere, from England, France, Germany, Spain and the USA.

Red ink to all:


i) England/FTSE  down 27.56  or  .47%

ii) Paris/CAC  down 33.19 or  0.90% 

iii) German DAX: down 43.49 or .57% (did not trade today)

iv) Spanish ibex: up 36.50  or 0.45%

and the Dow: up 171 points or 1.32% 


And now for major USA stories:

Expect many announcements like the following if the uSA goes over the cliff;

(courtesy zero hedge)

Pentagon To "Temporarily" Fire 800,000 If No Cliff Deal; Chaos To Ensue

Just in case the stakes in the final episode of the 2012 season of the "Fiscal Cliff" soap opera, and a 30 second advertising block was not selling for a record amount, here comes the Pentagon with a warning that it may fire almost 1 million civillians their services will be required but unpaid if there is no Cliff deal. From the WSJ: "Mandatory federal spending cuts designed to be prohibitively drastic will become a reality on Wednesday if negotiators remain unable to reach an agreement to avert the reductions. Illustrating the gravity of the cuts, the Pentagon plans to notify 800,000 civilian employees that they could be forced to take several weeks of unpaid leave in 2013 if a deal isn't struck, and other agencies are likely to follow suit. The cuts, which members of both parties have referred to as a "meat ax," are the product of a hastily designed 2011 law that required $110 billion in annual spending reductions over nine years to reduce the deficit. Their severity, representing close to 10% of annually appropriated spending, was intended to force Democrats and Republicans to come together on a broader package of deficit-reduction measures, which would replace the cuts. That effort failed, raising the prospect of the cuts' taking place."
It gets worse now that it turns out absolutely nobody is prepared for precisely the contingency America is now facing:
Complicating matters, the White House hasn't informed federal agencies or contractors of precisely how the cuts might be administered, leading to confusion about the potential impact.Several federal agencies referred questions about the cuts to the White House's Office of Management and Budget. OMB didn't respond to questions.

"The biggest challenge is just the uncertainty," said Steven Glass, chief financial officer at the Cleveland Clinic, a medical center and health-care system that expects to see a $22 million cutback in its Medicare payments in 2013 if the government doesn't reverse the cuts. "It's really hard to plan when you're literally looking a few days out and you don't know what Washington is going to do."
Oh well, luckily according to the latest bout of optimism spewing forth from Politico, things are fine and a deal, at least in the Senate, is imminent.
Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden engaged in furious overnight negotiations to avert the fiscal cliff and made major progress toward a year-end tax deal, giving sudden hope to high-stakes talks that had been on the brink of collapse, according to sources familiar with the discussion.

McConnell and Biden, who served in the Senate together for 23 years, only started talking Sunday, after negotiations between Senate Majority Leader Harry Reid (D-Nev.) and McConnell sputtered.

Sources close to the talks said a deal is now more likely to come together but cautioned that obstacles remain, including how Speaker John Boehner and House Republican leaders react to any tentative agreement.

“The Leader and the VP continued their discussion late into the evening and will continue to work toward a solution. More info as it becomes available,” a McConnell spokesman said.
Then again, this wouldn't be the first time Politico has gotten absolutely everything wrong about the near and far-term outcome of the cliff. So sit back, grab the popcorn, and watch as algos proceed to respond with furious stupidity to every single unsourced, unvalidated, and untrue rumor and various other flashing red headlines.
As for those millions of people who, like the guy in the basement in Office Space, and like the New Normal Schrodinger cat, are employed and unemployed at the same time but certainly unpaid, better luck next time.


Bruce Krasting has delivered quite a article on nobel prize laureate Paul Krugman.
Its seems that Paul Krugman had a vision that something is terrible wrong with his model of economics and it has to do with labour.  He comes to the absolute "brilliant" hypothesis that increasing discoveries of technology lessens the labour participation.  Give this man another nobel prize for such deductive reasoning.  He goes on...he states that there is now not enough workers in the work force to pay for retirees.  I am not making this up. He advocates taxing invention with a special tax to help social security.

I give you Bruce Krasting on Paul Krugman

(courtesy Bruce Krasting)

On Krugman's Epiphany

Bruce Krasting's picture


Paul Krugman is one of the leading “names” in economics today. There are reasons for his stature. He’s got a Nobel Prize, he’s an academic at a leading University, he writes for the NY Times, and not a week goes by without him being on some TV show or another. If you asked the average guy on the street to name an economist, there’s a good chance the answer would be - “Krugman”.

PK has been having a slow motion epiphany over the last month. He has posted four articles on a topic since December 8. (Link,LinkLink and Link) He has identified a “phenomenon” that is occurring in the US economy. This new, powerful force that he has stumbled upon, is keeping him awake at night. Clearly, PK is troubled by what he has uncovered. His words:

“It” has really uncomfortable implications. But I think we’d better start paying attention to those implications.

Are you worried yet?

PK drives home the point that what he has uncovered is not now in mainstream economic thinking. He admits that even he missed the signs that something was amiss in the world of modern economics:

Not enough people (me included!) have looked up to notice that things have changed.

Okay. What is it that PK has found hidden deep below the economic rocks that is causing him such fits? Grab onto your seats - this is big. PK has observed, for the first time in his economic career, the simple fact that technology has reduced the role of labor in the economy.


That’s PK’s epiphany? He just came to that conclusion in the last month? I’m thinking, “What planet has this guy been living on the past 10 years?” But then I realized PK has not been living on Mars, he’s been living in Princeton; amongst the Ivy.

Has PK not gone to a new mechanized distribution center like FedEx, UPS and Amazon have? Does he not know that it takes less printers to make the NYTs these days? Has he not been to a modern assembly plant that makes things with robots? How could he have missed the notion that technology was reducing the demand for human labor all these years? The only way that this could have been missed is if PK had his eyes covered and his head in the sand. He had this to say about his big new "find".

Mea culpa: I myself didn’t grasp this until recently. But it’s really crucial.


Forget about why PK has not connected these very important dots over many years; focus on why he's crapping in his pants over his new awareness. It’s simple math. Take two examplesA) where Labor = 60% of GDP and B) Labor = 50% of GDP. If GDP = $16T, then A = 9.6T and B = 8T.

The problem is that Social Security (SS) taxes Labor at 12%. The difference between A and B ($1.6T * 12.4%) means that SS ends up with $200 Billion less in annual revenue.

PK went off and pondered his “discovery”. He did the A and Bmath, then he wrote:

If payrolls lag behind overall national income, this will tend to leave those programs underfunded


Then PK went on to really stir the pot by suggesting that the Congressional Budget Office (CBO) was using a rosy long-term estimate for the critical Labor/GDP percentage in its projections. PK says:

CBO could very easily be quite wrong here, and will indeed be very wrong if the rise of smart machines plays out

What’s dawning on PK is that his vision of the future does not take into proper consideration the role that technology has today, and will play in the future, on labor employment. What he's looking at is a structural change; one that can’t be altered. He’s coming to the conclusion that Social Security doesn't “work” when there are not enough workers paying into the scheme. This is a remarkable conclusion from the most liberal economist out there.

Move on a few days and PK does some more deep thinking. He now realizes that the current expectations for future revenue for SS are unrealistic. He knows that the lines will cross more quickly than is now anticipated. He understands that this is a here-and-now problem, but he also has grasped that this is also a 75-year problem. So he comes up with a plan; simple yet elegant. He wants to tax the robots.

There would be no problem, at least in economic terms, by adding revenue (to SS) from dedicated taxes on capital income.

No problem? PK thinks it’s okay to charge 12% FICA taxes on a robot. OMG!

Actually, I don’t think that PK really believes that taxing investments in manufacturing technology is a good idea. The fact is, it’s a terrible idea, and PK knows it. If you want an economy to grow, and be globally competitive, you create incentives (tax breaks) for capital investment; you don’t create disincentives. Period.

I suspect that PK is slowly recognizing that he has put himself in a box. He has come to conclude that SS, as it is currently configured, is not viable. The villain is technology that reduces the long-term demand for labor. His solution, not surprisingly, is more taxes. But there is not a chance in 100 of taxes on capital investments to support SS (nor should there be).
PK is walking a plank, he’s getting close to the edge. When he goes over, he will bring with him a bunch of other liberal economists that believe that the SS “miracle” can be sustained. In his latest missive on this topic PK promises:

I’ll be writing more about this in weeks to come

I can’t wait.


- PK is quite right that the CBO's assumptions regarding Labor’s share of future GDP are optimistic. I’m sure that the folks at the CBO read PK’s criticism. I doubt they were too happy about it. The question is, what will CBO do, now that a Nobel has challenged a basic assumption it uses? If the CBO were to re-gear its computers to reflect a lower long term role of labor in the economy, it would create a massive hole in America's entitlement programs.

- It’s going on five years now that I’ve been writing about SS and the CBO. There must be a few hundred articles of mine in the ether on these two topics. Again and again I’ve said the same thing. The assumptions are not realistic, the numbers do not add up when realistic assumptions are used, the outcome will not be what is now anticipated, and there will be a disappointment when reality sets in. Sorry PK.

Maybe I should get a Nobel, that, or maybe PK shouldn't have one…..



Late in the day, Bruce Krasting puts the pieces together on the deal 
The most important part of the deal left off:  the debt ceiling which will have to be addressed in two months.
Then I guess the Republicans were get their flesh:

(courtesy Bruce Krasting)

Cliff Deal - Winners and Losers

Bruce Krasting's picture


My read of the President's speech is that there is a deal that will avoid the cliff. So go enjoy New Year’s Eve. Give it another 30 days, and we’ll be right back into the soup. My scorecard on the deal.

-If you’re unemployed, you’re a winner. You get another extension of benefits.

-If you’re employed, you’re a loser. Fully 155m workers are going to pay 2% more on income starting tomorrow. The increase in FICA taxes will come to a lumpy $120B. This will rank as one of the largest YoY tax increases in history. This is a very regressive tax increase. There is a $108K cap on what is subject to FICA taxes, so high incomes do not feel the bite. But those who earn an average income will see a meaningful reduction in disposable income ($2,000 per household).

This is a decidedly un-Democratic outcome. The rich avoid taxes, lower incomes pays a disproportionate share. Who insisted that this unfair outcome was part of the deal? Answer:Harry Reid, Nancy Pelosi and Barack Obama. Don’t blame the Republicans when your next check has an extra bite out of it.“Go figure?”, on this outcome.

-If you make between $250 and $400k, you are a very big winner, congratulations. Half of the top 2% just got a free pass.

-If you make over $450k, the cliff deal says you may have to pay more taxes. I wouldn’t worry too much about the top 1% - that group has 18% of all income. The move from 35 to 39.6% for America’s richest will not matter a bit. None of them paid the old rate, they won’t pay the new higher rate either.

-If you’re one of the 33 million taxpayers who avoided falling prey to the Alternative Minimum Tax (AMT) by the last minute patch, you dodged a bullet. This would have taken an average of $4k out of your pocket. I’m happy for you.

-If you’re one of the 4 million hopeless losers who have been stuck with AMT in prior years, you’re going to get stuck again. I’m one of those poor souls who is mired in this tax trap. It's a very unfair outcome for me. I make a fraction of the top 1%, but because of AMT, I pay a minimum federal tax of 28% while the top 1% pays an average of only 15%. Where’s the damn cyanide?

-The defense industry will have the bubbly out tonight, no sequestration for them for the time being. Phew! I was really sweating this one!

-Investors will also have the Champagne out. They dodged a bullet – at least for the next 60 days…..Keeping the 15% Cap Gains rate for most incomes is a plus, the new 20% rate for the top filers is a gift.

-The American people are very big losers. The cliff deal just sets up another crises before the snow melts. Nothing has been accomplished that addresses the uncertainty factor. The deal insures a big deficit for 2013. It will not increase tax revenue from the top 1%. It will result in a big increase in payroll taxes that will hurt the bottom 40%.

-Washington is the biggest loser of all. Democrats, Republicans, Senate, House and Obama all come off looking like chumps. They didn’t deliver anything but a Band Aid. I give the cliff deal a D-.



Anonymous said...

Thanks for all you do Harvey!! Happy New Year to you and yours.

Anonymous said...

Hi Harvey

All the best. I am also a Princeton grad (thus I remain anonymous). Only thing is that I graduated in engineering. Two comments:

1. The USA cannot go off the fiscal cliff. There is no cliff anywhere in the world high enough.

2. Anything is possible if you divide by zero. I learned this in my Princeton economics class.

Happy New Year

Anonymous said...

Thanks Harvey.

The Funky Shmuck knows as little as Freddy Boy...together, they share a wonderful single digit IQ.

Happy New Year everyone and here's to $0 silver in the coming year...(paper that is!)

Spamspunk, the Turd puppet

Anonymous said...

Happy New Year and thank you for your daily posts.

Quick question, what happened to the 19+ million ounces that were standing in December? I never did see any inventory movements in the vaults that came anywhere near that number. I would love to understand this better.

Thank you

Harvey Organ said...

we had some adjustments which look like a settlement (1.7 million oz jPM)

however i see no other evidence of settling


Mark said...

More silver demand. SLV gained 1.258 million oz today.

Anonymous said...


Thank you for your blogging efforts this past year.

J said...

2013 could be a good year for silver.

Gold looks overpriced. It takes only 90 ounces of gold to buy the average US house. Used to be 600 ounces a century ago and also 6 years ago to buy a house.

Historically the 13th year of a bull run is a disaster.

Anonymous said...

Thanks again Harvey, kudos for putting some very important articles together. Wish you a happy new year!

Anonymous said...

In terms of valuations, J, you do have to be careful of that.. you might do better to use the valuations of MANY different things vs gold, not just housing. You can make anything look expensive by using just one comparison.

If I were you, I would pay closer attention to the bull to date chart. It shows a very strong uptrend channel. (silver also has a similar channel that has formed over the years)

J said...

^ he gold chart is, at best, neutral. It narrowly missed a bearish reversal. Silver has completed a failed I-HNS.

Gold and silver already broke below their uptrend channel into a corrective wave several weeks ago. Whether this has ended remains to be seen.

Remember tho that this is charting the bogus comex price.

Anonymous said...


That is assuming that the bottom support line is drawn (on a logarithmic chart) to connect the lows of late 2008 with that of summer 2012. I will note that the trend line you drew is indeed more than enough to throw up the caution flag for the short to intermediate term.

However, if you draw a support line parallel to that of the upper line.. we still have a very well established uptrend. The $1500 this bottom line is at now can certainly mark another turning point upward, as this would make enough sour sentiment to put in a serious cyclical bottom in gold.

While there is no law stating that the lower trend line has to be parallel with that of the upper line, it is still more likely that this will be the case.

Search This Blog