Precious Metals

Authorities have located one of the gold bars stolen last month in what was the eleventh-largest gold heist in history. Police now suspect the robbery may have been an inside job.

Just days after Russia lifts sanctions on Iran and prepares to send its S-300 missile defense system, it appears Washington has retaliated. As TASS reports, Poland - on Russia's doorstep - has decided to buy the US Patriot air-defense system (made by Raytheon) for a total cost of around $9bn: "The US proposal has been found to be more profitable from the viewpoint of Poland’s security and implementation of commitments within NATO framework." Washington, keen to ensure Warsaw signed up with Raytheon, has decided to loan Poland a battery of Patriots until the deal is signed.

Many have forecast the creation of a new monetary system by which governments and banks gain total control over all monetary transactions. On the surface of it, this may seem an impossible goal, as it would be so all-encompassing and would eliminate economic freedom entirely. Surely, it would not be tolerated. However, we believe that it’s not only relatively easy to create, but it will be sold in such a way that the public will see it as an absolute panacea to their economic woes. Only those who are far-sighted will understand its level of destruction in advance of its implementation.

It is only fitting that the next business day following a headline that "Global Futures Slide China Tumbles On Short Selling Boost" we would see China, in an apparent panic, not only cut its RRR by 100 bps to 18.5% - far more than expected and the most since 2008 - but, more importantly, hinted that the Friday regulatory decision to encourage short sales and tighter margin rules on "umbrella trusts" was in no way meant to pop that the Chinese stock bubble, ridiculous as it may be. End result: after Chinese futures crashed by up to 6% on Friday after the Shanghai close, overnight the SHCOMP was down just 1.64%, erasing the bulk of the futures loss. More importantly, US equity futures have seen a strong bid this morning in yet another attempt to defend not only the Apple Sachs Industrial Average from going red on the year but the all important 100 DMA technical levels.

In the end, there are only two real drivers for the price of gold...

In the first part of this series; several fundamental principles of economics (and markets) were stressed. Supply/demand analysis is not merely objective, and logically/mathematically irrefutable; it is the only basis upon which the market for any hard asset can be analyzed. Conversely the price-analysis constantly parroted by the Corporate media is utterly devoid of any significance or legitimacy – in the corrupted crime-scenes of today which we call our markets.

Having written for several years about precious metals, the massive threat to our financial security (from our own financial institutions), and why gold and silver represent our best protection from that threat; it’s easy to forget that there are readers who are new to this sector. For those readers; it is necessary to review the fundamentals of supply and demand.

* Fall 2015 turning point - civil unrest and riots globally says forecaster Armstrong
* European banks will collapse and “blood in the streets”
* Advocates diversification and holding bullion coins familiar to public such as $20 gold coins
* “Your portfolio has got to include everything … including bullion”

As Wall Street struggles to explain last night’s trade data out of China which seemed to vividly illustrate the notion that the combination of the yuan’s dollar peg and generally weak demand can and will take a devastating toll on the country’s exports, and as iron ore does its best dead cat bounce impression on the “psychologically” important news that Australia’s fourth largest miner is suspending operations, Citi is out with a rather dismal take on the outlook for iron ore prices.

There appears to have been a shocking lapse in security surrounding the Easter weekend heist. The security lapse reflects badly both on the company and on the police. Holding tangible assets outside of the fragile banking system is a risky exercise, if the manner in which those assets are stored is not thoroughly secure and fully insured.

If there was any doubt that global trade is stalling, it was promptly wiped out following the latest abysmal Chinese trade data which saw exports tumble by 15% - the most in over a year - on expectations of a 8% rebound, with the trade surplus coming in at CNY18.2 billion, far below the lowest estimate. While unnecessary, with the Chinese GDP growth rate this Wednesday already expect to print at a record low, this was further evidence of weak demand both at home and abroad. Weakness was seen in most key markets, and the strength of China's currency was partly to blame, which again brings up China's CNY devaluation and ultimately QE, which as we wrote some time ago, is the ultimate endgame in the global reflation trade which, at least for now until the CBs begin active money paradropping to everyone not just the 0.01%, is only leading to inflation in stocks and deflation in everything else.v

As many are increasingly coming to terms with the 'obvious failure of fiat currency', the inevitavble question arises "what next?" Earlier this year, we discussed the possibility of a Chinese- or Russian-currency backed by gold, amid the increasing calls (domestically and abroad) for an end to USD Reserve hegemony; but this weekend, as Bloomberg reports, Lord Meghnad Desai, chairman of The Official Monetary and Financial Institutions Forum, stated that IMF Special Drawing Rights (SDR) should contain some gold to help stabilize the currency.

Overnight market news was once again driven by the Asian superbubble, where as expected, the Hang Seng (+1.22%) soared once more and is now up 9.5% for the week, following news the Hong Kong Exchanges and Clearing Ltd (HKEx) expects it will "substantially increase" quotas for the stock connect program between Hong Kong and Shanghai, HKEx Chief Executive Charles Li said on Friday. The exchange could boost the current quotas, which cap how much mainland investors can buy Hong Kong stocks and vice versa under the trading link, by more than 20 or 30 percent, Li said at a media briefing in Hong Kong. Li did not give a precise date for when the quotas would be raised, but one thing is clear: everyone in China, and Hong Kong, must be all in stocks if the Chinese housing bubble can not be reflated. The Shanghai Comp closed higher by almost 2.0% following better than expected Chinese inflation data, while HK stocks continued their recent rally to closer higher by 9.5% for the week.

As noted several hours ago, the main story overnight is not that Greece once again narrowly averted a Grexit when it was reported it would make its scheduled payment to the IMF today (adding that next month is a "different story") a development that was met with yet another ultimatum by its "partner", the Eurozone, but the dot com bubble deja vu-esque move in Hong Kong stocks, where the Chinese, seemingly tired of pushing up their local market into the stratosphere have turned their attention southward and are desperate to buy up every single Hong Kong stock.

While US equity futures are largely unchanged, if only ahead of the now daily pre-open market-wide ramp, things in Asia have continued on their bubbly flurry, where China's Shanghai Composite briefly rose above 4000 for the first time since 2008, but it was the surge in the Hong Kong stock market that showed the Chinese bubble is finally spilling over, in the form of a blistering rally on the Hang Seng which rose nearly 4% on immense volume which at 250 billion Hong Kong dollars ($32 billion) was three times the average daily volume over the past year and nearly 20% more than the previous record volume day in October 2007, at the height of the pre-financial crisis bubble.