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At yesterday’s close, gold and silver were marginally above their respective 50-day moving averages.  Will they move higher on Friday as the Technical Funds close out short positions or will the drop back at this level, as they have in the past?  As of 8:30 on Friday morning, they have dropped back, below the 50-day MA.  How they finish the day and the week will be important.  Here are some important headlines:

October US Manufacturing Output Tumbles To 2009 Levels

Consumer Confidence in U.S. Declines to Lowest in Eight Months

No way the Fed can taper now.  The economy is on the wane even with the $85 billion monthly Fed injections.  QE to infinity is the only road to follow.  This will result in a falling US dollar and rising gold.  As the Fed loses control and interest rates start to rise, there will be a growing negative impact on the economy and the stock market.

Keep your eye on the dollar.  It is about to drop into the 78 range.  Its downward trend is very alarming.  Our Mid East policy, that angers Saudi Arabia, our governments inability to address the debt limit and the Feds no let up on QE are strong down drafts for the dollar.

The Growing Rift With Saudi Arabia Threatens To Severely Damage The Petrodollar

Graph

In addition to the bond fund outflows that we have seen from individual investors we have seen foreign bondholders dump the most Treasuries in history.

Great Interest Rate Rout

This chart goes all the way back to the late 1970s and it shows what foreign holders are doing in terms of net buys and sales of bonds. In a recent month earlier this summer we had $40.8 billion in sales, the absolute worst ever recorded going all the way back to the 1970s.

The next Bretton Woods currency reset.

October 25, 2013

The Frightening Truth About China’s Control Of The US

October 24, 2013

Today acclaimed money manager Stephen Leeb told King World News “There is a tremendous amount of fear in the United States about the increasing power the Chinese are exerting in this country and the fears are well-founded as far as I’m concerned.” Leeb also discussed the frightening implications of this for the United States as well as where the US is headed from here, and also spoke about China’s accelerate accumulation of gold.

Leeb: “The euro is on a tear and it has risen quite dramatically, but one currency has done considerably better than any other during the past month and that is the Chinese yuan. The yuan is just soaring. Right now there is a massive of flow of gold from West to East, and I think the West is desperate, and want to emphasize the word ‘desperate,’ to hold down the price of gold because gold represents a massive threat to the US dollar.

“From a foreign perspective, they are holding what could become worthless pieces of paper because the dollar may collapse. So there is tremendous pressure to keep any alternative currencies out of the spotlight. This means pressure from the West to keep gold down.

More…

Building a de-Americanized World is a process of de-dollarizing. Therefore China is slowly moving out of US Treasuries.

“Building a de-Americanized World” China Slowly Moving Out Of US Treasuries
This Zero Hedge article below shouldn’t come as a surprise to you.  I have discussed how you should never listen to Goldman Sachs recommendations on gold and if it’s even possible, Gartman’s record on gold is even worse.  Gartman almost always finds the perfect time to sell out at the worst possible time.  Then he is usually late to get back in after the turnaround.  The reason is because he refuses to believe that gold and silver are manipulated.  He has heard all the arguments and seen the “proof” but he is a Wall Street puppet and will not open his eyes to the truth.  As for Goldman Sachs – they are part of the manipulation.  Before JPMorgan moved to the top in the gold and silver rigging game, Goldman Sachs was the evil force holding back gold in the early 2000s.  Obviously, they never went away – they just moved into the background but they have been active since last spring with negative predictions.  They tell their clients to sell and then they buy at lower prices for the house account.  The best I can say is that thanks to Gartman, GS and JPM, we’ve been given repeated opportunities to buy gold and silver at prices far below where they should have been, and would have been, without their presence in the market or their bearish market commentary.

Gold Hits 1-Month High In Aftermath Of Goldman’s (And Gartman’s) “Slam Dunk Sell” Advice

Submitted by Tyler Durden on 10/24/2013 – 08:31

Just two weeks after Goldman’s “Slam Dunk Sell,” report, the price of gold is  once again. Goldman’s Currie (in direct opposition to BofAML’s Curry) argument that post debt-ceiling, “… with significant recovery in the U.S., tapering of QE should put downward pressure on gold prices,” seems like another round of wishful thinking as physical premiums for gold around the world surge to record highs and spot prices reach one-month highs. Of course, while Goldman had a few days of positive reaction after their call, it is none other than Dennis Gartman who provided the bottom-tick in the latest exuberance.

It’s not complicated.  There are two possible outcomes but only one winner.  Either the price of gold will continue to be set by Technical Analysis on the COMEX – or it will be determined by the physical demand and off take from China.  China is rapidly moving to the forefront and buying most of the world’s production.  There is a good chance that the outcome will be settled in the next 12 months.  Without more large additional distributions of gold from GLD (ETF) and without more large withdrawals from the COMEX, gold’s price will rise to a level where its moving average attracts hedge fund participation on the long side of the paper trades.

1900 tonnes of gold left GLD in the last nine months.

Graph 2

When that happens, plus the ongoing demand from China, the final leg of the bull market will awake from a two-year slumber.

I’ve shown the following chart by LeMetropole Café and Mark Lundeen before, and it is important.  Where do you think all the gold coming out of GLD and the COMEX is going?

The Market’s Lay Of The Land As 2014 Approaches

Mark J Lundeen

October 20, 2013

So who is buying the gold and silver?  Well you don’t read about who is buying gold in the daily newspapers, or on TV.  But the same foreign central banks (Blue Plot below) who have been walking away from the US Treasury market for the past five years have been huge buyers of the old monetary metals in the spot-markets.  Over the past few years Asian central banks have bought thousands of tons of gold, and more importantly, shipped it home far away from London and New York.

How have America’s “policy makers” responded to this foreign central bank “sell the US dollar and buy gold” trade?  Well, since the foreign central banks became net-sellers of US T-bonds in July 2008, the Federal Reserve’s position in the US Treasury market (Red Plot above) has increased from 5% to over 20% to support lower yields, and higher prices in the bond market.  Had the Federal Reserve failed to implement its Quantitative Easing (QE) programs after the mortgage debacle of 2007-09, bond yields today would be much higher than they now are; and so would be the price of gold and silver.

What has happen in the red plot above since 2008 is an act of desperation, and desperate people do desperate things when survival becomes an issue.  One has to wonder what the status of the US Treasury’s gold reserves is.  Is the 262 million ounces of US Treasury gold still there?  And if so, who has title to it?  It’s possible that the US Tank corps stationed at Fort Knox is actually defending 400 Oz bars of gold that now belongs to China and India.  Think I’m wrong?  I could be.  So, write to your congressman and senators and ask them about the US gold reserves.   From personal experience with my members of Congress, they they’d rather not place their signature on a document concerning the status of the American gold reserves. It seems that in 2013, some simple questions have only difficult answers.