Merideth - it is all about timing, not whether she is right or not...she is right

Why?

Brian Williams does Snoop... 'till the next episode...

Within days of the May drive-by shooting - Naked Shorting and Manipulation

from Dr John

...and his quandary...note the rise on the right

http://www.hussmanfunds.com/wmc/wmc130722.htm

The Shanghai Gold Surprise

by David Baker (dbaker@sprott.com) and David Franklin (dfranklin@sprott.com)

The physical gold market continues to develop in the most wonderfully counterintuitive way. While the paper gold price languishes below US$1,300 per ounce, physical demand out of China is now reaching previously unforeseen levels. If you’ve heard this story before, it’s more of the same, except that the demand tonnage is now so high as to be almost comical.

According to data released by the Shanghai Gold Exchange, the amount of gold contracts settled for physical delivery on its exchange reached a staggering 1,098 metric tonnes year-to-date as of the end of June.¹ This is an astoundingly large amount of physical gold. For perspective, 1,098 tonnes represents approximately 40% of the entire estimated global gold mine production in 2013. It also represents roughly 1/8^th of the US Treasury’s official gold reserves, and over 100% of China’s stated official gold reserves. If the rate of physical delivery on the Shanghai Gold Exchange continues at current levels, it will deliver the equivalent of over 100% of global mine production by the end of this year… all through one exchange.

In contrast, the COMEX futures exchange in New York, where the bulk of US gold futures are traded, saw a measly 160.7 tonnes of physical delivery requests over the same period (year-to-date to June).² Although the paper volume on the COMEX dwarfs that of the Shanghai Gold Exchange, the level of physical delivery requests is only 15% of that seen in Shanghai.

If the Shanghai data is true, when combined with the gold imports going into China via Hong Kong, we now have a situation where China is buying the equivalent of all global gold mine production produced on a monthly basis. How that can coincide with a gold price drop of US$400 per ounce over Q2 is beyond our capability to explain, but it does mean that China is now the undisputed hub for physical gold.

Interestingly, China’s demand for physical gold does not seem to be benefitting the growth of gold ETF products within the country. Bloomberg recently reported that China’s first two exchange-traded funds backed by bullion both had disappointing debuts, with Huaan Asset Management Co. reportedly raising only $195 million out of an expected $400 million at launch.³ Although the press has naturally concluded that this news indicates waning gold demand in China, we can’t help but think it shows that China’s gold interest is primarily focused on the physical metal, as opposed to financial products that trade on exchange. Certainly if the time ever comes where the physical gold market sets price discovery for the gold price (as opposed to the futures market) it seems highly likely that the first place that will happen now is within Shanghai itself.

Whether there’s a link between China’s increasing physical gold deliveries and the drop in gold inventories within the COMEX and GLD ETF remains to be seen, but whoever is supplying China’s gold appetite is supplying it in size. Despite gold’s lackluster price performance, these developments strongly suggest we could be in for an interesting summer in the weeks ahead. Gold is a finite resource - if China’s current purchase rates continue, it is going to own a significantly large proportion of global gold reserves. 

Ben does not understand Gold Prices

Bad Omens - Louis and Charles Gave

Conclusion

So here we are, with:

• China, the single biggest contributor to global growth over the past decade, slowing markedly.
• World trade now flirting with recession.
• OECD industrial production in negative territory YoY.
• Southern Europe showing renewed signs of political tensions (i.e.: Portugal, Greece, Italy...) as unemployment continues its relentless march higher and tax receipts continue to collapse.
• Short-term interest rates almost everywhere around the world that are unable to go any lower, even as real rates start to creep higher.
• Valuations on most equity markets that are nowhere near distressed (except perhaps for the BRICS?).
• A World MSCI that has now just dipped below its six month moving average.
• A diffusion index of global equity markets that is flashing dark amber.
• Margins in the US at record highs and likely to come under pressure, if only because of the rising dollar (most of the US margin expansion of the past decade has occurred thanks to foreign earnings—earnings that may now be challenging to sustain in the face of a weaker global trade growth and a stronger dollar).

Lackluster growth? Falling margins (outside of Japan)? Rising real rates? Unappealing valuations (outside of the BRICS)?... Perhaps these make up the wall of worry that global equities will climb successfully. After all, if the British and Irish Lions can win a rugby series in the Southern hemisphere, while a Scotsman wins Wimbledon, then nothing is impossible. Though perhaps the simpler explanation to the above growing list of bad omens was formulated by Claudius who said that “when sorrows come, they come not as single spies, but in battalions”.

ref. John Mauldin's Outside the Box

from Dr John

"When we analyze the financial crisis and subsequent recovery, the key events are actually very clear. In March 2009, the Financial Accounting Standards Board bowed to political pressure and removed “mark-to-market” accounting requirements, loosening U.S. accounting rules to allow banks “substantial discretion” in how they valued the distressed assets on their books, and making it possible for them to avoid insolvency even if they were in fact insolvent. Since then, banks have largely refused to restructure mortgages and other loans, and the Federal Reserve’s zero-interest rate policies have allowed banks to gradually recapitalize themselves on the backs of savers earning zero-interest and homeowners locked into higher-interest mortgages. Many of these banks should instead have been restructured, at no loss to depositors, and with bank bondholders bearing the cost.

The Fed did not save the economy. Rather, the Financial Accounting Standards Board rescued the banks by making their accounting more opaque. The Fed’s policies then shifted the costs of financial recklessness onto those who are not financially reckless – particularly ordinary savers and the elderly on fixed incomes, while the economy has more or less floundered. The Fed’s policies aren’t to be hailed as virtuous efforts that saved the economy – they are more appropriately reviled as unethical policies that subordinate Main Street to Wall Street.

Regardless, Fed policy is what it is, and it is more productive to accurately estimate its effects and respond accordingly. On that front, even during the most recent market cycle, the general hierarchy of considerations has remained intact, in that market internals and trend-following considerations have outweighed monetary ones – on average – when the two have been in conflict. While overvalued, overbought, overbullish syndromes have historically outweighed both trend-sensitive and monetary factors, my impression is that the relative ineffectiveness during the past 18 months or so is an artifact of a mature, half-finished cycle still near its highs, and that investors will wish they had paid more attention to these factors (and the wicked losses that followed historical counterparts) by the time the present cycle is complete."

http://www.hussmanfunds.com/wmc/wmc130708.htm

Lawlessness Is The New Normal — Paul Craig Roberts

In various articles and in my latest book, The Failure of Laissez Faire Capitalism And Economic Dissolution Of The West, I have pointed out that the European sovereign debt crisis is being used to terminate the sovereignty of the countries that are members of the EU. There is no doubt that this is true, but the sovereignty of the EU member states is only nominal. Although the individual countries still retain some sovereignty from the EU government, they are all under Washington’s thumb, as demonstrated by the recent illegal and hostile action taken on Washington’s orders by France, Italy, Spain, Portugal, and Austria against the airliner carrying Bolivia’s President Evo Morales.

Flying back to Bolivia from Moscow, Morales’ plane was denied overflight and refueling permission by Washington’s French, Italian, Spanish, and Portuguese puppets and had to land in Austria, where the presidential plane was searched for Edward Snowden. It was a power play by Washington to kidnap Snowden from Bolivia’s presidential airliner in defiance of international law and to teach upstart reformers like Morales that independence from Washington’s orders is not permitted.

The European puppet states went along with this extraordinary breach of diplomacy and international law despite the fact that each of the countries is incensed that Washington is spying on their governments, diplomats, and citizens. Their thanks to Snowden, whose revelations made them aware that Washington was recording their every communication, was to help Washington capture Snowden.

This tells us how much morality, honor, integrity there is left in Western civilization: Zero.

Snowden informed the countries of the world that their communications have no independence or privacy from Washington’s eyes and ears. Washington’s hubris and arrogance are shocking. Yet, no country has been willing to stand up to Washington and to give Snowden asylum. Ecuador’s Correa was intimidated and slapped down by Washington and withdrew his offer to Snowden. For China and Russia, Washington’s favorite targets for human rights demonization, giving Snowden asylum would have been a propaganda triumph, but neither country wanted the confrontations that Washington’s reprisals would have caused.

In short, the governments of the countries on earth want Washington’s money and good graces more than they want truth and integrity or even their independence.

Washington’s sordid interventions against Snowden and Morales give the world another chance to hold Washington accountable before Washington’s hubris and arrogance force the world into a choice between accepting Washington’s hegemony and World War III. The countries, split among themselves and grasping for money and favor, are, instead, permitting Washington to establish that whatever it does is legitimate. Washington’s lawlessness is being established as the new normal.

The South American governments are unlikely to stand together against Washington’s affront. A few of the countries are led by reformers who represent the people instead of the rich elites allied with Washington, but most prefer calm relations with Washington and domestic elites. South Americans assume that Washington will succeed in overthrowing the reformers as it has in the past.

In Europe headlines are that “NSA surveillance threatens the EU free trade deal” and “Merkel demands explanations.” The protests are the necessary public posturing of puppets and will be regarded as such by Washington. The French government says the trade talks should be temporarily suspended “for a couple of weeks to avoid any controversy.” However, the German government says, “We want this free trade agreement and we want to start the talks now.” In other words, what Merkel describes as “unacceptable Cold War-style behavior” is acceptable as long as Germany gets the free trade agreement.

The lust for Washington’s money blinds Europe to the real consequences of the free trade deal. What the deal will do is to fold Europe’s economies into Washington’s economic hegemony. The deal is designed to draw Europe away from trade with Russia, just as the Trans-Pacific Partnership is designed to draw Asian countries away from China and fold them into US-structured relationships. These deals have little to do with free trade and everything to do with US hegemony.

These “free trade” deals will commit the European and Asian “partners” to support the dollar. Indeed, it is possible that the dollar will supplant the euro and Asian currencies and become the monetary unit of the “partners.” In this way Washington can institutionalize the dollar and protect it from the consequences of the printing press that is being used to boost the solvency of banks too big to fail and to finance never-ending federal budget deficits.

http://www.paulcraigroberts.org/2013/07/05/lawlessness-is-the-new-normal-paul-craig-roberts/

Kyle Bass Asian Report