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Today’s headlines –

Gold surges above $1,300-an-ounce level, bears seek cover

NEW YORK/LONDON: Gold surged 3 per cent and hit a one-month high on Monday, vaulting back over a technical threshold at $1,300 an ounce as speculators fearing a reversal of the recent downward price trend rushed to buy back bearish bets.

It was the gold’s heftiest one-day gain in 13 months and its three-day rally is the biggest in almost two years. Also contributing was heavy short covering as futures investors anticipating the start of delivery period on August contracts rolled positions from August to December. The first day for delivery notices is July 31.

Economic Times, July 23, 2013

Here is a special release from Jim Sinclair, late Monday evening that you should find very interesting and exciting if you are already invested in gold.

My Dear Extended Family,    

The cause of today’s spectacular rise in the gold price is the reality that with Friday continue large drop in Comex warehouse gold inventory. No cogent argument can be formed against the reality that because of the continue fall in gold inventory that within in 90 days or sooner the Comex must change its delivery mechanism.

The highest probability is that Comex will have to move to cash settlement rather than gold. Part of that settlement could be lots of 100,000 GLD that represents the ability to exchange for gold.

Their problem is that if GLD is part of the settlement mechanism for the spot Comex contract that GLD will be destroyed by the convertibility. It is a truism in gold that which is convertible into gold will in fact be converted over time.

Gold rose today because those knowledgeable know the inevitability of the changing of the Comex contract, as it is today which calls for settlement in gold between contracting parties. There is no question this is the emancipation of physical gold from the fraud of no gold, paper gold. The emancipation will cause physical gold exchanges to take birth and to be the discovery mechanism for the price of gold. This is the end of the ability to use paper gold future contracts as a mechanism to make the gold price sing and dance at the will of the manipulators.

With manipulation coming to an end the true value of gold will be discovered by the cash exchanges that are now taking birth. The advent of the cash spot exchanges around the world is the natural demise of the Comex set up as convertible and now being converted.

As long as one can buy spot, pay insurance, transportation and re-casted by Rand Refinery to Asian products sold profitably, the demands for real gold are ending the hay days or even existence of the futures exchanges.

Gold is headed back to be traded as it was before 1973. Gold will trade well above $3500 and those who have lived in the gold market like me for now 53 years know it.

A price of $50,000 for gold is not out of the question as a result of its emancipation from “fraudulent paper, no gold, paper gold.”

GOFO is screaming this truth. The warehouse inventory of every futures gold exchanger is screaming this. The fact that there is no meaningful above ground supply of gold is screaming this. The fact that most of the central banks supply of gold is leased is screaming this.

There is no reason why gold cannot move up hundreds of dollars a day when the Comex changes their spot contract settlement, as they must, as they will, very soon.

Respectfully, Jim

jsmineset.com, July 22, 2013

One of my most often repeated themes are “the bull market in gold and silver is NOT over.”  How can I be so sure?  Let’s think about it – bull markets almost always end with a parabolic rise, before they peter out.  Gold has not gone “parabolic” as shown in the following chart.

10 Year Gold 1900.30

Gold rose at a fairly constant 45-degree angle from early 2005 through 2010, then blipped up and then pulled back at an even steeper angle.  But where is the “parabolic” rise that signals the end of the bull market?  It’s nowhere to be found.  The short-lived rise in 2011, had it continued for another six months or year, would probably qualify, but it didn’t.  It’s just a small “blip” on the 10-year chart.

Let’s ask another question – “What event ended gold’s bull market in 1980?”  There is a good chance that if the current bull market has ended; the reasons will be similar to those that put the last bull market to rest.  The answer is simple; just two words.  Do you know what they are?

When he came into office, Paul Volcker allowed interest rates to rise as high as they needed to, to encourage investors to start buying US Treasuries again. Under his new leadership, the prime interest rate, a highly important economic measure, eventually reached 21.5% in June 1982.  The 30-year mortgage hit 18%.  Volcker put an end to the bull market in gold (and the bear market in the dollar) by letting interest rates rise to a level that made the ownership of gold much less important.  Bernanke has taken the OPPOSITE position.

So why can’t the Fed follow the same course that Volcker took when gold takes off again?  Simple!  When rates are zero, they can’t go any lower but interest rates can go a lot higher, in fact there is no limit to how high they can go.  Anyone who refuses to acknowledge that interest rates will start to rise is out of touch with reality.  The question becomes how high will they have to be allowed to rise in order to stop a runaway bull market in gold?

No one knows more about the bond market than Bill Gross.  In May of 2013 he warned investors that the bottom was about to fall out on the 30-year bond, because they will he hit hard when interest rates start to rise.

When will that be?  Gross now says, not until 2016.  So bonds come out of their coffin & it’s not even Halloween.”  Gross, who manages Pimco’s $268 billion Total Return Fund, said, “Bernanke says follow policy rate & we agree. The Fed won’t tighten policy until 2016 at the earliest.”  That’s another way of saying QE to Infinity, which is the fuel for the coming rebound in gold and the reason John Williams says we will have hyperinflation in the US by the summer of 2014.

Interest rates will rise, but not because of a strong economy; no, it will be because of dollar debasement that, according to Gross, will be with us for the next three years.

Once the interest rates start to rise, gold will be well into new all-time highs. Interest rates will rise a great deal before they are high enough to stop the bull market in precious metals.  Look what it took in 1980.

“Ask yourself what would happen if interest rates spiked to 8% or 10% or 15%?”  It would be catastrophic for housing, the stock market and especially the bond market.  Wealthy investors and large hedge funds would bolt from these markets and if even if only a small portion of their capital went back into gold and silver, which are both tiny markets, the price of both metals would reach levels that most of you cannot imagine.  This is not fantasy or day dreams; it is reality, a reality that is coming.

Today, gold is up over 3% and silver is up over 5% (as of 2:45 EDT) and that is news!  This only happens a few times a year.  Gold is usually “capped at 1% a day,” on the way up.  There is no limit to how far the Cartel will take it down.

Gold and silver are rapidly approaching their “moving averages,” and when that happens, the funds will start buying, again.  And since they are very, very “short” gold and silver, there will be a lot of “short-covering” to add fuel to the rise.  Could today be the beginning of the end of the correction?  Could be, but let’s see $1,400 gold and $24 silver before we order the champagne.

Last Monday I wrote about the Face the Nation interview with Benjamin Netanyahu that took place on Sunday, July 14, and I included a link to the actual video.  It would be very difficult to listen to Netanyahu speak, watch his face and listen to his passion and ignore how serious he was when he said, “We will never allow Iran to get them bomb.”  I presented this information because I strongly feel that this is one of the most likely lurking Black Swans that would dramatically affect the price of gold, and oil.  It is in my opinion, only a matter of when, not if.

Since I discussed this, one week ago, there have been several other newsletter reports on the interview, and virtually all of them came to the same conclusion.

For example, check this article out below from Business Insider:

“Legendary General James Mattis Just Gave One Of The Best Talks On Middle East Policy We’ve Ever Seen”

Read more: http://www.businessinsider.com/general-james-mattis-aspen-security-forum-2013-7#ixzz2ZnTdYsTC

On Iran’s development of nuclear weapons:

Mattis believes Iran is roughly one year from having a nuclear weapon, and doesn’t believe military action could solve the issue. A strike would only delay it, but he has “no doubt” Israel would strike if they had a bomb.

“The military can buy our diplomats some time,” Mattis said, but it cannot solve the problem alone.

To continue reading the article, please click here

And this article from James DiGeorgia from UnCommon Wisdom below:

Israel is Ready for War.  Are You?

July 22, 2013

If you think gasoline is expensive now, imagine the price when Iran and Israel start lobbing nukes at each other.

Am I having a nightmare? No, I’m fully awake. That snoozing you hear is an energy market blissfully unaware of potential major war in the Middle East. The shooting could begin as soon as this year.

The world’s financial markets are completely discounting the very real possibility of an Israeli-Iranian war. Years of anger, threats and caustic rhetoric have put the so-called “experts” to sleep. Their blindness is incredibly dangerous for everyone.

Just look what’s happening RIGHT NOW. Israeli jets are already flying into Syria and Lebanon, disabling air-defense systems. Why?

To me, it’s obvious. Israel is clearing the path for a first strike against Iran’s nuclear missile launchers.

Israel’s Benjamin Netanyahu is not kidding. He will not allow Iran to have nuclear weapons. If he can’t stop them through negotiations, he will do whatever it takes.

Most people discount the possibility of an Israeli “first strike” for logistical reasons. They believe Israel would need U.S. cooperation to strike deep inside Iran. We could certainly make it easier for them. The U.S. could provide aerial refueling and other support while Israel drops the bombs.

With his nation’s very survival at stake, Netanyahu is also preparing to go it alone.

Some think Iran’s newly elected Hassan Rouhani, who takes over as president next month, will extend an olive branch. This is pure fantasy!

Rouhani is a wolf in sheep’s clothing. He was hand-picked by Iran’s Supreme Leader Ali Hosseini Khamenei to for two purposes …

First, Rouhani needs to satisfy Iran’s increasingly restless public. The massive protests of the last few years represent a real threat to Iran’s theocratic regime. The daily struggles created by economic sanctions are real. Rouhani must convince them he is working to end the country’s economic isolation.

Second, Rouhani will buy time with the Western powers by pretending to be a moderate, reasonable leader. Meanwhile the nuclear and missile programs will            move forward. The Iranian regime believes that once it has nuclear warheads and missiles to deliver them, it can force an end to the devastating economic sanctions.

I believe both the U.S. and Iran underestimate Netanyahu’s willingness to go to war. One way or another, he will stop Iran from obtaining nuclear weapons.

Netanyahu’s “Face the Nation” appearance last week was a clear warning to the United States and other world powers. Incredibly, almost no one noticed. (See my publisher Brad Hoppman’s excellent July 17 analysis of the media missing the mark.)

The Obama administration is not blind. They know war between Iran and Israel is all but certain. They are doing all they can to postpone the inevitable.

The U.S. has its own reasons to stop Iran. So do other regional powers like Saudi Arabia. They simply want Israel to do the dirty work.

The good news: Iran will not have a chance to nuke Israel.

The bad news: The war to stop it will be ugly.

  • Here is how I think events will unfold …
  • An Israeli strike on Iran nuclear facilities and missile development infrastructure will lead to …
  • Vicious air war over Syrian, Lebanese and Iraqi airspace, followed by …
  • An Israeli land invasion of Lebanon to neutralize Hezbollah’s rocket capacity, while  …
  • Iran tries to choke off oil exports through the Strait of Hormuz!

Then it will get even worse …

  • Egypt’s paramilitary Muslim Brotherhood will obstruct the flow of oil through the Suez Canal.
  • The final blow: an Iranian missile strike on Saudi oil fields.

When all this happens — and it will — world markets will suffer the worst one-day loss since 9/11. Crude oil could skyrocket to as high as $200. I expect to see gold make daily jumps of $100 or more.

If U.S. carrier groups in the Arabian Sea come under fire, we could see $300 oil and $2,000 gold — or even more!

I refuse to be guilty of willful blindness. That’s why I’m telling my subscribers how to prepare.

In Global Resource Hunter, I am planning hedges against the stock market’s visceral reaction to the coming Israeli strike. And my Junior Resource Millionaire subscribers will get recommendations designed to rack up substantial profits in the coming crisis. In both services, I am aiming to help members to maximize their profit potential in the wild swings we will see for both commodities and equities.

Whatever you do, keep your eyes open your eyes and prepare for the inevitable. You can survive — and even profit — from the trouble ahead. Don’t wait too long.

Best wishes,

James

The reason I am bringing this up again is because of an email I received last Wednesday.  I found it to be insulting.  By presenting this information, which is directly linked to gold’s future price, he calls me a “fanatical Israel supporter,” and then says, “Now go ahead and get pissed off and call me anti-Semite for speaking the truth.”  Furthermore, totally missed the point that it was not “my” opinion being presented, it was an interview on one of the most highly respected news shows on national TV.  I have presented further commentary, above, on this topic.  It is not just me and it has nothing to do with supporting Israel!

Here is what “Gary” wrote in his email to me:

First off don’t worry Israel will not attack Iran and neither will the USA.  You can take that to the Brinks vault in Canada.  How do you figure it is up to the Ayatollahs whether they get attacked or not?  Is it up to you weather some mugger in Florida attacks you or not?   Iran is a sovereign country and unlike Israel a signature to the Nuclear Nonproliferation Act.  There is no proof that Iran wants a bomb and their Ayatollahs have said it is against the Koran.  I would be more inclined to take their word than a war-mongering liar like Netanyahu.  Iran has never attacked anyone in two hundred years.  We sure as hell can’t say that for Israel and the USA.   If they wanted to they could get a bomb from Pakistan or North Korea, maybe even India.  (There is even talk about Saudi Arabia having acquired a bomb.) Ask yourself this, WHAT WOULD HAPPEN TO THEIR COUNTRY IF THEY OBTAINED A BOMB AND USED IT ON ISRAEL? It would be the end of their country period.  The US would totally destroy them.  Why would the Ayatollahs want to commit national suicide, where is the gain?  Fanatical Israel supporters like you need to clean the cobwebs out of your brain.  Start thinking rationally. 

I’ve already sent you quotes from previous Israel prime ministers and won’t repeat myself.  You just don’t get it and probably never will.  Now go ahead and get pissed off and call me anti-Semite for speaking the truth. 

I will not re-print my reply to him.  I usually don’t lose my temper, but I made an exception for him.  His email says all you need to know about him.

It is up to YOU to decide if the world is nearing another war in the Mid East over Iran’s quest for a nuclear bomb.  I am presenting the news, presenting an interview that Face the Nation felt was newsworthy enough to devote a 10-minute segment on.  Will there be a war between Iran and Israel?  We will find out, but if it does happen, the event will have a dramatic affect on the price of gold and that is what this newsletter is all about.  You make the decision of what is and what is not, and you invest your hard-earned money accordingly.

As for people like Gary, he has been removed from our mailing list and my email inbox.  This is not the first time he has written insulting and prejudiced emails to me, but it will be the last.