Saturday, March 29, 2014

The Gold Price is Ready to Climb Higher

Investors are adding to their long physical positions by borrowing national currencies because they want this exposure. They are long physical gold and short national currencies because they expect the gold price to rise and currencies to fall. It is useful to note how the Chinese yuan has fallen these past several weeks, so the yuan gold price was not hit that hard last week. It probably just whetted their appetite to borrow CCFDs so that they could buy more physical metal.

These Chinese buyers know what they are doing. They understand gold is good value, and therefore they want all the physical metal they can possibly get in their possession. And the banks have been willing to heighten this insatiable demand with these CCFDs.

So owners of physical gold should rest easy this weekend. They own what is in short supply, which means that the gold price is ready to climb higher.

- James Turk via a recent King World News interview, read more here:

Wednesday, March 26, 2014

Chinese Investors are Gobbling up Whatever Physical Metal They Can

As we all know, Chinese investors are gobbling up whatever physical metal they can at these low gold prices. The CCFDs are being used by wealthy Chinese - namely those who have access to these credit facilities - to borrow against metal they own in order to buy more metal.

The metal being used here as collateral is stored in China, not in the LBMA banks. That’s an important point, because there is no fractional reserve lending going on. Instead these wealthy investors are making a strategic decision. They are using their physical metal stored in China to borrow national currencies, and are using the proceeds of these loans to buy more physical metal. That is the important point. They want as much exposure to physical metal as possible.

- James Turk via a recent King World News interview:

Sunday, March 23, 2014

Minter Talks Trash & Best of with Jim Rickards, Cullen Roche, and James Turk

Our lead story: Here's an interesting matter for you to ponder as you head into your weekend: Why is the internet in the US so darn slow? In short, it's because telecommunication companies have divvied up the market in such a way that Comcast, Time Warner, Verizon, and AT&T are all in a position to operate with virtually no competition. Erin gives you the details.

For our interview today, we invite "Junkyard Planet" author Adam Minter to come on and talk trash. He gives some amazing insight into the ways trash can reveal the health of the economy, comments on shipping costs and the prospect of the alliance of the 3 biggest shipping companies, and explains why he believes that we still aren't seeing a roaring recovery in the global economy yet.

For our Best Of the Week, we bring you the best clips from Cullen Roche, James Turk, and Jim Rickards. And "In the Margins," Edward and Erin bring you some of the most interesting comments we received from social media. Watch to catch up on what's happening with Boom Bust around the web.

- Russia Today:

Thursday, March 20, 2014

Gold Will be at a New Record High Above $1,925

Let’s step back from the trees for a moment and take a look at the forest. Basically everything is moving in favor of the precious metals. Commodities are rising pretty much across the board. Also, China’s credit crisis is deepening. The government there has bailed out five shadow lenders so far, but there are a lot more problems just beneath the surface.

Europe is facing another crisis as the Italian government looks ready to fall, and Germany’s court basically gave a thumbs down to Mario Draghi’s promise to do “whatever it takes” to save the euro. Japan’s weak currency is creating huge trade deficits, worsened of late by the rising price of crude oil. And these are just some of the obvious problems, not to mention that the Federal Reserve is continuing to print unneeded dollars. The Dollar Index looks ready in the next few days to close at its low for the year.

The bottom line is that 2014 promises to be a great year for everyone who owns physical gold and physical silver. But let’s take it one month at a time. Gold rose 3.2% in January, and is doing well so far in February. A few more months of solid gains, combined with increased momentum as the public once again jumps aboard, and before you know it gold will be at a new record high above $1,925.

- Source, James Turk via King World News, read more here:

Tuesday, March 18, 2014

Gold Seek Radio Interviews James Turk on the Money Bubble

Gold Seek radio interviews James Turk, author of the Money Bubble. They discuss the problem with money printing and the outlook for gold and silver.

- Source, Gold Seek Radio:

Sunday, March 16, 2014

Another Potential Global Crisis is Brewing

Turk questioned whether government intervention was keeping the gold price down.

“Gold is exceptionally undervalued at current levels and there’s imbalance between supply and demand.”

Turk added that another potential global crisis was brewing because of the mountain of debt that could not be serviced. Interest rates were rising in many countries, worsening the debt burden.

“Debt continues to grow and interest rates are rising. We’re facing a situation where the Federal Reserve will have to continue tapering or tell the US government it doesn’t have money to spend.”

Turk, who recently published his book The Money Bubble – What to do before it pops, said the US dollar was likely to lose more buying power and was heading for a hyper inflationary environment.

“We are in a fear currency bubble,” he noted, adding that the African continent needed to make the most of gold as an asset.

“Gold is one of Africa’s greatest competitive advantages. Fifty per cent of gold mines are from Africa, with the lion’s share from South Africa.

“Africa needs to serve its own interests and take the lead in returning to gold and recognising it as money,” Turk pointed out.

- Source, Mining Weekly:

Friday, March 14, 2014

Central Planners Could Not Keep Gold Down

Gold finally plowed through $1250, Eric, and we got the expected move higher. The central planners tried ‘circling the wagons’ at $1,275, but they could not hold that line -- there was just too much buying power behind gold’s surge....

- James Turk via King World News:

Tuesday, March 11, 2014

James Turk: Erosion of Trust Will Drive Gold Higher

They have promised more than they can possibly deliver, so a lot of their promises are going to be broken before we see the end of this current bust that began in 2000. And that outcome of broken promises describes the huge task that we all face. There will be a day of reckoning. There always is when an economy and governments take on more debt than is prudent, and the world is far beyond that point. So everyone needs to plan and prepare for that day of reckoning. We can't predict when it is coming, but we know from monetary history that busts follow booms, and more to the point, that currencies collapse when governments make promises that they cannot possibly fulfill. Their central banks print the currency the government wants to spend until the currency eventually collapses, which is a key point of The Money Bubble. The world has lost sight of what money What today is considered to be money is only a money substitute circulating in place of money. J.P. Morgan had it right when in testimony before the US Congress in 1912 he said: "Money is gold, nothing else." Because we have lost sight of this wisdom, a "money bubble" has been created. And it will pop. Bubbles always do.

- Source, Zero Hedge:

Saturday, March 8, 2014

Bitcoin is For Real

Throughout that boom and bust, Bitcoin retained a core user base that saw its possibilities and worked to overcome its flaws by developing point-of-sale hardware and online merchant services while lessening its dependence on a small number of exchanges.

And then, just when the outside world had stopped paying attention, Bitcoin recovered. From under $20 at the beginning of 2013 it rose to $240, crashed to below $100, and then in one dramatic arc soared to more than $1,000. In early 2014 Bitcoin's market value exceeded $10 billion and the number of merchants willing to accept it was soaring. The market appears to have spoken: Bitcoin is for real.

- Source James Turk:

Thursday, March 6, 2014

Bitcoin Revolution or Trap?

In 2008, a mysterious person or group using the apparent pseudonym Satoshi Nakamoto unveiled a new digital currency called Bitcoin that appeared to solve some of its predecessors' problems. Without going too deeply into the technical details, the Bitcoin system tracks each piece of currency from buyer to seller, eliminating the possibility of one person spending the same piece of currency multiple times before the counterparties catch on. The network is distributed, with no central clearinghouse or bank holding everyone's money and imposing rules. "Miners" create more Bitcoins by solving complex algorithms to add more Bitcoin to the system, with the difficulty of the number crunching increasing as the quantity of Bitcoin grows, thus keeping their supply rising at a steady, predetermined rate until it reaches is a preordained limit of 21 million a century or so hence.

Bitcoins, which are a long string of alphanumeric characters, can be stored in a variety of places, from a digital "wallet" on a desktop computer to a centralized service in the cloud, or even completely off-grid by being printed on a piece of paper. And because it operates over peer-to-peer networks similar to those used by techies and teens to download music and videos, it bypasses the established banking/regulatory system, making it, at least initially, free of government oversight.

Nakamoto, whoever he (or she, they) was, disappeared in 2010. But by then the Bitcoin community had taken on a life of its own. Hundreds of users began to mine Bitcoins with increasingly sophisticated computers, and the number of merchants and individuals willing to accept, store, and transact in the currency rose steadily.

As the buzz grew louder, the small community of techie/libertarian early adopters was joined by traders sensing a serious momentum play. The dollar price of a Bitcoin rose from 5 cents in early 2010 to 36 cents in November. In February 2011 it briefly achieved parity with the dollar, and when a Forbes Magazine ran a favorable story that called it a "crypto currency," the price went parabolic, to nearly $9. More breathless press ensued, sending the price to $27 and putting the market value of Bitcoins in circulation at $130 million.

On the Internet's black market - the network of sites only accessible to computers running anonymizing software such as Tor - Bitcoin was rapidly becoming the preferred form of money. This drew the ire of the establishment, with US Senator Charles Schumer demanding the closure of online drug emporium Silk Road and describing Bitcoin as "an online form of money-laundering."

At about the same time, Bitcoin's Achilles heel became apparent, which is that it has to be stored somewhere, and no place is 100 percent secure. Bitcoins stored on a desktop can be wiped out by a crashed hard drive. Backed up on other storage media, they're vulnerable to hackers. Kept in an online storage service - which sounds like a bank but has no deposit insurance or even physical reality - they can disappear without a trace. Traded on an online exchange they can likewise simply disappear, with no recourse to former owners.

As Bitcoin rose in value the number of high-profile crimes and crashes rose apace. A Tokyo-based exchange was hacked and lost numerous client accounts. A Poland-based storage service accidentally overwrote its customer records. A West Indian storage service simply shut down, and its owner disappeared. And viruses aimed at Bitcoin caches proliferated. Newcomers, meanwhile, discovered that working with Bitcoin required skills not yet common among the non-techie 99 percent. The press turned scornful, and a consensus formed that the concept was fatally flawed and without much of a future.

- James Turk via the Market Oracle:

Monday, March 3, 2014

The Digital Liberation of Money

In the Internet's early days there was general agreement that one of the first killer apps would be some form of cyber-currency. Since money was already largely non-corporeal, existing as entries in bank accounts and ready to spend with plastic cards, the next logical step would be to move the whole thing online and dispense with paper and coins and their costly and burdensome infrastructure of banks, regulators and printing presses. The emergence of such currencies would, in this optimistic scenario, consign relics like the dollar and the Fed to history's circular file and usher in an era of trust, stability, and growth similar to what occurred under the classical gold standard.

But the digital liberation of money turned out to be easier said than done, as the first wave of cyber-currencies came and went without much of an impact. eCash, for instance, was an encrypted, anonymous payment system that allowed anyone anywhere to send and receive instant payments. But it relied on the existing banking infrastructure, and because "anonymous" meant "money laundering" to the police, it faced extreme pushback from authorities who viewed such currencies as primarily empowering drug dealers - and from banks that saw no point in encouraging the competition. Only one small bank ever accepted eCash, and the currency died a quiet death a few years after its introduction.

A larger impact was made by e-gold, which offered accounts denominated in grams of gold from which owners could make and receive payments. It generated some buzz, peaking at five million users and $2 million of transactions in 2009. But here again, the fact that much of this action was apparently money laundering by parties with good reason to stay anonymous led to legal pressure that eventually led to its failure.

James' company, GoldMoney, was originally designed to operate as a gold-based payment system based on several digital currency patents. It avoided the money laundering stigma by requiring users to register under their own names, and also met with early enthusiasm. But other logistical and legal barriers proved to be insurmountable, and GoldMoney's payment system was deemphasized in favor of offshore gold storage. By the late 2000s, purely digital currencies looked, to most observers, like a near-impossibility in a world where governments and banks had the power to prevent such competition.

- Source, James Turk via the Market Oracle: