A Golden Buying Opportunity
Forbes
The lightness of the correction in gold is very bullish for the metal as well as its ETF vehicles, and as this drought ends, the next big leg up may soon begin.
The two-week pullback in gold futures from the early February highs was very mild, as it also was in the most popular gold ETFs.
With less than a 3% correction from the highs, last week’s close suggested that the correction might be over. Tuesday’s strong opening and the close above the recent swing high supports this view.
The weekly and daily chart formations have indicated for several months that the drop from the early September highs was just a pause in the uptrend. Thesecontinuation patterns are one of my favorite formations to trade.
The completed flag formations on both the futures and ETFs have initial upside targets well above the September 2011 highs. Therefore, the two key gold ETFs, the Spyder Gold Trust (GLD) and the iShares Gold Trust(IAU), both look attractive for new purchases, as the recommended stops make the risk very manageable.
Click to Enlarge
Chart Analysis: The weekly chart of the gold futures shows the completion of the flag formation (lines a and b) in the latter part of January.
- The tight weekly ranges and triple “dojis” made a deeper correction less likely
- Once above the 2011 highs at $1,942, the 127.2% upside target is at $2,035
- As I noted in my article on longer-term Fibonacci projections, the next “major target is $2,274”
- The weekly on-balance-volume (OBV) closed last week very strong, as it shows a bullish zig-zag formation
- The weekly OBV is leading prices higher, even though the daily OBV (not shown) is still below its WMA
- There is short-term support for the April futures at last week’s low of $1,706, with more important levels at $1,652
The daily chart of the Spyder Gold Trust (GLD) shows the completion of the flag formation, lines d and e.
- There is near-term chart resistance at $173.80, and then further levels in the $175.40 area
- The flag formation has a 127.2% Fibonacci retracement target in the $196 area
- The daily OBV confirmed the price breakout as it overcame its downtrend, line f. The OBV is still below its WMA but has turned higher
- Short-term support now sits at $170.75 to $169.50, with more important levels at $166
- GLD’s recent correction held well above the 38.2% Fibonacci retracement support at $162.40, as the recent low was $166.17
- The breakout level (line d) and stronger support in the $158-$162 area
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How Greece Could Take Down Wall Street
Global Research
In an article titled “Still No End to ‘Too Big to Fail,’” William Greider wrote in The Nation on February 15th:
Financial market cynics have assumed all along that Dodd-Frank did not end "too big to fail" but instead created a charmed circle of protected banks labeled "systemically important" that will not be allowed to fail, no matter how badly they behave.
That may be, but there is one bit of bad behavior that Uncle Sam himself does not have the funds to underwrite: the $32 trillion market in credit default swaps (CDS). Thirty-two trillion dollars is more than twice the U.S. GDP and more than twice the national debt.
CDS are a form of derivative taken out by investors as insurance against default. According to the Comptroller of the Currency, nearly 95% of the banking industry’s total exposure to derivatives contracts is held by the nation’s five largest banks: JPMorgan Chase, Citigroup, Bank of America, HSBC, and Goldman Sachs. The CDS market is unregulated, and there is no requirement that the “insurer” actually have the funds to pay up. CDS are more like bets, and a massive loss at the casino could bring the house down.
It could, at least, unless the casino is rigged. Whether a “credit event” is a “default” triggering a payout is determined by the International Swaps and Derivatives Association (ISDA), and it seems that the ISDA is owned by the world’s largest banks and hedge funds. That means the house determines whether the house has to pay.
The Houses of Morgan, Goldman and the other Big Five are justifiably worried right now, because an “event of default” declared on European sovereign debt could jeopardize their $32 trillion derivatives scheme. According to Rudy Avizius in an article on The Market Oracle (UK) on February 15th, that explains what happened at MF Global, and why the 50% Greek bond write-down was not declared an event of default.
If you paid only 50% of your mortgage every month, these same banks would quickly declare you in default. But the rules are quite different when the banks are the insurers underwriting the deal.
MF Global: Canary in the Coal Mine?
MF Global was a major global financial derivatives broker until it met its unseemly demise on October 30, 2011, when it filed the eighth-largest U.S. bankruptcy after reporting a “material shortfall” of hundreds of millions of dollars in segregated customer funds. The brokerage used a large number of complex and controversial repurchase agreements, or "repos," for funding and for leveraging profit. Among its losing bets was something described as a wrong-way $6.3 billion trade the brokerage made on its own behalf on bonds of some of Europe’s most indebted nations.
Avizius writes:
An agreement was reached in Europe that investors would have to take a write-down of 50% on Greek Bond debt. Now MF Global was leveraged anywhere from 40 to 1, to 80 to 1 depending on whose figures you believe. Let’s assume that MF Global was leveraged 40 to 1, this means that they could not even absorb a small 3% loss, so when the “haircut” of 50% was agreed to, MF Global was finished. It tried to stem its losses by criminally dipping into segregated client accounts, and we all know how that ended with clients losing their money. . . .
However, MF Global thought that they had risk-free speculation because they had bought these CDS from these big banks to protect themselves in case their bets on European Debt went bad. MF Global should have been protected by its CDS, but since the ISDA would not declare the Greek “credit event” to be a default, MF Global could not cover its losses, causing its collapse.
The house won because it was able to define what “ winning” was. But what happens when Greece or another country simply walks away and refuses to pay? That is hardly a “haircut.” It is a decapitation. The asset is in rigor mortis. By no dictionary definition could it not qualify as a “default.”
That sort of definitive Greek default is thought by some analysts to be quite likely, and to be coming soon. Dr. Irwin Stelzer, a senior fellow and director of Hudson Institute’s economic policy studies group, was quoted in Saturday’s Yorkshire Post (UK) as saying:
It’s only a matter of time before they go bankrupt. They are bankrupt now, it’s only a question of how you recognise it and what you call it.
Certainly they will default . . . maybe as early as March. If I were them I’d get out [of the euro].
The Midas Touch Gone Bad
In an article in The Observer (UK) on February 11th titled “The Mathematical Equation That Caused the Banks to Crash,” Ian Stewart wrote of the Black-Scholes equation that opened up the world of derivatives:
The financial sector called it the Midas Formula and saw it as a recipe for making everything turn to gold. But the markets forgot how the story of King Midas ended.
As Aristotle told this ancient Greek tale, Midas died of hunger as a result of his vain prayer for the golden touch. Today, the Greek people are going hungry to protect a rigged $32 trillion Wall Street casino. Avizius writes:
The money made by selling these derivatives is directly responsible for the huge profits and bonuses we now see on Wall Street. The money masters have reaped obscene profits from this scheme, but now they live in fear that it will all unravel and the gravy train will end. What these banks have done is to leverage the system to such an extreme, that the entire house of cards is threatened by a small country of only 11 million people. Greece could bring the entire world economy down. If a default was declared, the resulting payouts would start a chain reaction that would cause widespread worldwide bank failures, making the Lehman collapse look small by comparison.
Some observers question whether a Greek default would be that bad. According to a comment on Forbes on October 10, 2011:
[T]he gross notional value of Greek CDS contracts as of last week was €54.34 billion, according to the latest report from data repository Depository Trust & Clearing Corporation (DTCC). DTCC is able to undertake internal netting analysis due to having data on essentially all of the CDS market. And it reported that the net losses would be an order of magnitude lower, with the maximum amount of funds that would move from one bank to another in connection with the settlement of CDS claims in a default being just €2.68 billion, total. If DTCC’s analysis is correct, the CDS market for Greek debt would not much magnify the consequences of a Greek default—unless it stimulated contagion that affected other European countries.
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Gold at 3-Month High as Bargain Seekers Prevail
MarketWatch
Gold futures on Wednesday beat initial weakness to settle at a three-month high as the early price dips only enticed investors back to the metal.
Gold had spent most of the day in the red, as the optimism from the Greek deal faded after downbeat data from China and with investors taking profits given recent gains. Bargain-hunting ensued, however, in the last hour of trading, securing the milestone for the metal.
Gold for April delivery advanced $12.80, or 0.7%, at $1,771.30 an ounce on the Comex division of the New York Mercantile Exchange, the highest settlement for gold since mid-November.
The metal, which settled 1.9% higher on Tuesday, spent most of the session in the red.
The decline in prices enticed back some investors, said Jim Steel, an analyst with HSBC in New York.
Helping gold higher were steep gains for platinum and palladium, he said. The gains came mostly on the back of a ongoing strike in South Africa, a top exporter of platinum.
Greece remained in the headlines after Fitch Ratings cut Greece’s sovereign-credit rating to C from CCC, and said that the planned bond swap for private debt holders will amount to a restricted default.
The dollar pushed higher, contributing to the fall of gold and other commodities, but moderated its gains. The ICE dollar index, which measures the greenback’s performance against a basket of six rival currencies, rose to 79.207 from 79.023 late Tuesday.
The dollar topped the key ¥80 level against the Japanese yen, also as economic data from China disappointed. The preliminary result of a survey by HSBC showed Chinese factory activity at a four-month high in February, but at a level that indicated modest contraction.
News on Tuesday that Beijing had cut reserve requirements for lenders had helped gold and other metals rise. The move was an effort to boost lending and increase liquidity in China, a large consumer of raw materials.
Copper and silver kept their losses, with platinum and palladium ending higher.
Copper for March delivery fell less than 1 cent to settle at $3.83 a pound.
March silver futures shed 18 cents, paring losses, to end at $34.25 an ounce.
Gold Up One Percent on Greek Deal, Economic Uncertainty
Reuters
Gold rose about one percent on Tuesday, outpacing gains in the euro and equities, as a massive European bailout deal as investors bought the metal amid doubts the bailout will work.
Gold rallied to its highest in more than two weeks after Euro zone finance ministers agreed a 130-billion-euro ($172 billion) rescue for Greece. Analysts said the deal bought time for the single-currency bloc but left deep doubts about Greece's ability to recover and avoid default.
Bullion has benefited from news that China recently cut its required reserve ratio and committed to help the euro bloc. The metal already received a strong boost after the U.S. Federal Reserve last month said it would keep rates near zero at least until late 2014.
"Gold gets a boost from the EU kicking the can down the road," said Rob Kurzatkowski, senior commodity analyst at optionsXpress.
"Not only does the bailout perhaps delay the inevitable (Greek bankruptcy), but it also opens the door for higher inflation across the euro zone," he said.
Spot gold rose 1.2 percent on the day to $1,755.19 an ounce by 11:30 a.m. EST (1630 GMT), having earlier hit a high of $1,756.41, the loftiest price since February 3.
Bullion was on track for its biggest one-day gain in two weeks.
U.S. COMEX April futures rose $31 from Friday's close to $1,756.90 an ounce as traders returned after Monday's U.S. Presidents' Day holiday.
Analysts said gold outperforming the U.S. stock markets and other riskier assets highlighted underlying inflation worries and lingering doubts on Greece's ability to avert a chaotic default in the long run.
However, gold could face strong headwinds as liquidity appears to tighten for European banks soon.
The European Central Bank wants its second offer of cheap ultra-long funds next week to be its last, putting the onus back on governments to secure the euro zone's longer-term future.
GOLD-EURO CORRELATION
The positive 30-day log correlation between gold and the euro has risen to near 0.5 up from 0.3 last week, indicating a stronger positive link between the two.
"Gold is trading more like the other metals - as a risk asset, rather than a risk hedge," Citigroup analyst David Wilson said.
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Gold Ends at Highest Level in More than Two Weeks
MarketWatch
Gold futures rallied Tuesday, ending at their highest point in more than two weeks as traders cheered the approval of a second bailout for Greece.
Gold for April delivery advanced $32.60, or 1.9%, to end at $1,758.50 an ounce on the Comex division of the New York Mercantile Exchange. It had traded as high as $1,752.50 an ounce.
The settlement was gold’s highest since Feb. 2.
“Gold right now is behaving like a risk asset more than anything else,” tracking gains for U.S. equities and other commodities, said Frank Lesh, a broker and futures analyst with FuturePath Trading in Chicago.
U.S. markets were closed Monday for the Presidents Day holiday.
After a marathon meeting into the early hours of Tuesday, European finance ministers sealed a deal to give Greece up to 130 billion euros ($171.9 billion) of financial aid.
Other metals tracked gold higher, with copper and silver rallying. Copper for March delivery advanced 13 cents, or 3.5%, to settle at $3.84 a pound.
Metals also benefitted from news that China cut reserve requirements for lenders in an effort to spur lending and increase liquidity in its financial system. China is a top consumer of gold, copper and other commodities.
That was “good news for gold in the long run as bullion remains an attractive alternative to major currencies. Real interest rates are negative in major developed nations while developing nations are also playing their part in currency wars, fearing rapid appreciation of their domestic currencies against weak benchmarks,” analysts at VTB Capital in London wrote in a note to clients.
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Gold Prices Climb With Euro on Hopes for Greek Deal
Economic Times
Gold prices rose more than half a percent on Monday as growing optimism that European leaders will sign off on a rescue deal for Greece lifted the euro, and after China's central bank further loosened monetary policy.
Spot gold was up 0.6 percent at $1,734.19 an ounce at 1210 GMT, while U.S. gold futures for February delivery were up $10.10 an ounce at $1,736.00.
Gold prices are up nearly 11 percent this year, benefiting from a rebound in the euro and expectations that U.S. monetary policy will remain loose, cutting the opportunity cost of holding non-yielding bullion. But analysts say the appeal of other investments could keep gold prices rangebound this year.
"The risks (in Europe) could dissipate modestly in the near term. Certainly, in China, there is a growing acceptance that the government will step in to support growth, and things look like they're stronger than expected in the United States," said Deutsche Bank analyst Daniel Brebner
"Globally, it looks like risk assets are being accumulated by investors, and in that kind of environment, gold should perform reasonably well," he added. "But I would argue it could underperform some of the other metals, the base metals and the white precious metals."
The euro rose 0.5 percent on Monday after China eased monetary policy to stimulate growth and expectations mounted that euro zone policymakers were set to approve Greece's long-awaited second bailout, averting a messy default.
Euro zone finance ministers are expected to approve a second deal for Greece when they meet at 1600 GMT, a move they hope will draw a line under months of turmoil that has shaken the currency bloc.
"The market's attention is to remain fixated on developments in the euro zone as finance ministers gather in Brussels to finalise the details of the second bailout for Greece," said VTB Capital in a note. "We see subdued action today as a positive decision on Greece is pretty much priced in."
Other assets seen as higher risk rallied along with the euro, with European equities reaching their highest in nearly seven months and oil prices up more than $1 a barrel. Safe-haven German government bonds slipped.
MONEY MANAGERS CUT GOLD LENGTH
Money managers in gold futures and options reduced their net long position by about 6 percent in the week of Feb. 14, their first decline in weeks, latest data from the U.S. Commodity Futures Trading Commission showed on Friday.
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While You Were Sleeping, Central Banks Flooded The World In Liquidity
Zero Hedge
There are those who have been waiting to buy undilutable precious metals in response to a headline announcement from the Fed that it is starting to buy up hundreds of billions of Treasuries or MBS. This is understandable - after all that is precisely the trigger that the headline scanning robots which account for 90% of market action in the past year are programmed to do. And the worst thing that one can do is put on the right trade at the wrong time. Yet it may come as a surprise to some, that while the world was waiting, and waiting, and waiting, for Bernanke to hit the Print button, virtually every other central bank was quietly unleashing it own mini tsunami of liquidity. In fact, as Morgan Stanley puts it, "the Great Monetary Easing Part 2 is in full swing." But wait, there's more: in an Austrian world, where fundamentals don't matter and only how much additional nominal fiat is created is relevant, it is sheer idiocy to assume that the printers will stop here... or anywhere for that matter. They simply can't, now that the marginal utility of every dollars is sub 1.00 relative to GDP creation. This means that by the time the Global Weimar is in full swing, we will see much, much more easing. Sure enough, MS anticipates an unprecedented additional round of easing in the months ahead. So for those waiting to buy gold et al at the same time as DE Shaw's correlation quants do, the time will be long gone. Because slowly everyone is realizing that it is not the Fed that is the marginal creator of fake money. It is everyone.
Behold, the Great Monetary Easing part 2:
MS Summary:
The Great Monetary Easing Part 2 is in full swing – and begets inflation risks. Global monetary policy interconnectedness, the impact of central bank easing on commodity prices, and the possibility of an improved outlook for the real economy could mean a return of the Global Inflation Merry-Go-Round:1) Super-expansionary monetary policy in the major developed economies, particularly the US, a) contributes to commodity inflation and b) is imported by EM central banks through (US dollar) soft and hard pegs.
2) Price pressures rise in EM due to domestic overheating and higher commodity prices. Inflation is then re-exported to DM through more expensive goods exports.
3) More expensive imports from EM and dearer commodities raise inflation in DM. In turn, DM central banks initiate the next round by maintaining – or increasing – monetary accommodation.
2013 might yet look like 2011 on the inflation front.
...and Detail:
The Great Monetary Easing (Part 2), is in full swing … In response to a slowing global economy and further downside risks emanating from the possibility of an escalating Eurozone debt crisis, central banks all over the world – and across the DM-EM divide – have been deploying their arsenal for a while now, and should continue to do so. The result is aggressive monetary easing on a global scale – what we have dubbed the Great Monetary Easing, part 2 (GME 2 - see Sunday Start: What Next in the Global Economy, January 22, 2012); this follows on from GME1 in 2009-10. The GME2 is now in full swing. Last week, the Bank of England announced a further GBP 50bn of gilts purchases, to take place over the next 3 months. On Tuesday, the Bank of Japan upped the target of its Asset Purchase Program by 50%, from JPY 20trn to JPY 30trn, with the increment concentrated exclusively on JGB purchases. We think Sweden’s Riksbank will pick up the baton from the Bank of Japan on Thursday and cut the repo rate by 25 basis points.
Gold Adds More Than $10 to End Losing Streak
MarketWatch
Gold futures log their first gain in four sessions Wednesday, as rising tensions between Iran and Israel as well as ongoing uncertainty over Greece’s debt problems buoyed the metal’s safe-haven appeal.
“The time is limited to avoid spreading the euro-zone debt crisis from Greece to countries with a larger economic impact, such as Portugal, Spain and Italy, [and] most of the efforts have been to contain the crisis,” said Jeff Wright, a precious-metals analyst with Global Hunter Securities.
Gold for April delivery rose $10.40, or 0.6%, to settle at $1,728.10 an ounce on the Comex division of the New York Mercantile Exchange. Prices had tallied a three-session decline of more than $23 an ounce.
European Union officials may delay parts or all of the second bailout program for Greece until after expected April elections in that country, according to a Reuters report.
“The situation in Europe is causing huge global uncertainties,” said David Beahm, vice president at precious-metals retailer Blanchard & Co.
“Even if Greece’s problems are solved, there are three or four more countries that are on the verge of needing the same type of help,” he added. “The problem is no one has the money to help, therefore the [European Central Bank] is going to have to print billions of euros to fight the debt problems Europe is facing.”
At the same time, “the geopolitical issues in the Middle East, specifically between Iran and Israel, are supporting the price of gold as well,” Beahm elaborated. “Gold is acting as a safe haven for what could be a situation that gets way out of control.”
China factor
Gold’s gains Wednesday came as Asian and European markets got a lift after Gov. Zhou Xiaochuan of the People’s Bank of China voiced optimism that Europe can overcome its sovereign-debt crisis and said that China will expand investments in the euro zone.
“If events spiral out of control, even with [People’s] Bank of China intervention, I can see how the euro currency dissolves or the more stable Northern European countries allow for a controlled default by Greece, Portugal and Spain,” said Global Hunter Securities’ Wright.
“While these events would strengthen the U.S. dollar and negatively impact gold in the short run, gold will continue to appreciate over the long term,” he added.
Gold also found support in advance of U.S. inflationary data due out Thursday and Friday, according to Wright.
He expects a continuation of the trend, seen in December at the producer level, showing signs of initial inflationary pressure. The “real impact will come when inflation hits CPI; gold will turn sharply higher on signs of price inflation.”
Silver gains
Silver futures also advanced in Wednesday’s Comex trading, finding support from upbeat U.S. manufacturing data. March silver SI2H +0.16% tacked on 6 cents, or 0.2%, to close at $33.41 an ounce.
The Empire State manufacturing index rose to a reading of 19.5 in February, its highest since June 2010, according to the Federal Reserve Bank of New York. The size of the February gain surprised analysts.
Separately, the Federal Reserve reported that U.S. manufacturers boosted output in January, though industrial production as a whole was unchanged.
“Silver is both a precious and industrial metal, with over 60% of demand for industrial applications, [meaning] positive signals for economic growth provide a leg up for silver,” said Wright. “Also, silver has not seen the same level of attention which gold has in the past couple quarters and should not be ignored.”
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Gold Up on China, Inflation Concerns; Greece Eyed
Reuters
Gold rose on Wednesday after Chinavowed to continue to invest in euro zone government debt, increasing gold's appeal as a hedge against inflation fueled by ample liquidity in the financial system.
Bullion broke ranks with the euro and U.S. equities, even though it was off session highs as the dollar recovered losses on news euro zone finance officials are looking to delay a second bailout program for Greece.
The metal rose as much as 1 percent after China's central bank governor said China and other emerging nations such as Brazil, Russia or India were waiting for the right time to help the euro bloc, but there were no concrete promises on fresh funding.
"For China to make a commitment like that is enough to give gold the psychological boost and to...increase the potential for inflating commodities and precious metals prices," said Jeffrey Sica, chief investment officer of SICA Wealth Management with more than $1 billion in assets.
Spot gold was up 0.4 percent at $1,725.79 an ounce by 3:04 p.m. EST (2004 GMT).
U.S. COMEX gold futures for April delivery settled up $10.40 at $1,728.10. Volume was about 30 percent below its 30-day average, in line with its recent pace.
Gold was lifted by crude oil's gains, while the euro and Wall Street fell after initial rallies fizzled.
The metal, though viewed as a safe haven, has tracked the fortunes of riskier assets in the past few months, as market turbulence caused by the euro zone debt crisis forces investors to sell gold to cover losses elsewhere.
"The correlation between gold in the short term and some of the risk markets is higher than people probably expect," said Pau Morilla-Giner, head of equities, commodities & alternative investments at London and Capital Asset Management.
"Gold continues to trade about 60 to 70 percent of the time as an alternative currency, which clearly has to do with being a better store of value than nominal currencies that are being abused by excessive quantitative easing (QE) across the board," he added.
A few Federal Reserve officials in January believed another round of central bank bond buying would be needed before long to support the U.S. economy, but others dissented, minutes of the Fed's last meeting showed.
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Debt Saturation Ensures Much Higher Gold and Silver
GoldSeek
It is once again a great pleasure to address the attendees at this conference following the GATA Workshop I participated in this morning. I'd like to thank Bill Murphy for his kind introduction. As many of you may know, Bill and I have become great friends as the result of our mutual struggles in the gold and silver markets over the past 13 years. That struggle has simultaneously represented the most exhilarating and the most frustrating experience in my nearly 49 years in the investment business.
After acknowledging my longevity in the business, I'd love to say that I started when I was 12 years old but that unfortunately is not true. I'm just getting old, which, at least so far, beats the alternative.
The main subject I want to address today is the staggering debt situation throughout the industrialized world and the impact it will have on the value of paper money and by extension, gold and silver. However, before I get to that topic, I would like to make a few comments about the price action of gold and silver in the last four months of 2011, price action that incidentally set the stage for the explosive price rises we've seen in the first six weeks of this year.
Up until Labor Day last year, gold was enjoying an excellent year, rising by comfortably over 30 percent in price in eight months. This strong advance reflected the turmoil in Europe, the U.S. debt rating downgrade, excessive money creation worldwide, and widespread economic and financial deterioration generally. Ergo, gold was acting exactly as it should in these circumstances.
However, this also represented the worst nightmare for the powers that be, essentially revealing to the public that all was not well.
Thus, in response, the Western world governments, their central banks, and their bullion bank allies sprung into action. Gold plummeted nearly $300 in a month and silver dropped by a third despite not an iota of visible improvement in the world economic and financial backdrop. It was just the same tired old criminal drill that we have seen throughout the more than decade long powerful bull market in gold and silver. These muggings took place primarily in the paper markets of the LBMA and the COMEX while the regulators, most particularly the Commodity Futures Trading Commission here in the U.S., blissfully slept on.
Then, after gold subsequently re-established its equilibrium above $1,700 and silver bounced back into the mid 30s, both collapsed again in the wake of a totally failed European summit in early December. In the absence of any palatable solutions to their many intractable problems, the Europeans undoubtedly knew the scope of the quantitative easing they were going to have to unleash to hold things together. Thus, they and their American counterparts deemed it essential that gold and silver not be seen as an attractive and essential alternative to their beloved pure fiat currency system, which was failing rapidly in plain view. Gold dropped well over $200 and silver fell by 20 percent in a three-week period, with much of the damage occurring in the traditionally very quiet week between Christmas and New Year's Day.
Desperate people tend to do very stupid things and I can assure you that the powers that be are getting increasingly desperate.
Despite these offensive raids, gold still posted an 11-percent year-over-year price gain in 2011, marking the 11th consecutive year the price had been up, a feat the venerable investment letter writer Richard Russell termed unprecedented in any significant asset class.
However, in spite of this exemplary performance over the past decade the vast proportion of society remains blithely unaware of what is unfolding in the gold and silver markets. This stems from many sources, the first being the relentlessly negative press from the mainstream media on the subject. How many times does the public have to be subjected to the views of the likes of Jon Nadler of Kitco and Jeff Christian of CPM Group, to name but two? They are not true analysts but purely and simply establishment propagandists whose sole purpose, in my opinion, is to provide disinformation to keep the unsuspecting public away from precious metals.
Then the anti-gold cartel, with its insidious paper raids, creates wild volatility and totally counterintuitive price action that further discourages all but the most knowledgeable and committed believers in the only real money, gold and silver.
In reality, to date, the public hasn't had a chance. Whenever they have stuck their toe in the water, almost without exception they have been burned as yet another raid knocked them out of the box. When that happens often enough, most people just give up and go away and that is exactly what has occurred.
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