And Then There’s This…Thursday, January 22nd, 2009
Posted on Thursday, January 22nd, 2009 | In Iceland, Market CommentaryGold started off early morning Far East trading on Wednesday as it usually does lately…going into a slow decline. And, as usual, at 3:00 a.m…shortly before the London open…the price began to rise, this time sharply. But it was all for naught once again, as someone was there to sell gold hard the moment that the London a.m. fix was in. The decline lasted for the rest of the London session…through the Comex open…and only reversed at the close of London trading at 4:00 p.m….11:00 a.m. New York time. However, this attempted rally was not allowed to amount to much, but gold did close the Globex session about eight dollars above its lows.
;) |
| click to enlarge |
Silver was far more volatile. The price rise at the London open was impressive until it, too, ran into the same seller at the London a.m. fix. This time the decline was aborted at the Comex open, and the price rose once again. But every rally attempt was crushed, with the bottom…like gold…coming at the close of London trading. Silver finished up on the day, but it was never allowed to seriously challenge its highs of the London a.m. fix. As I’ve said so many times in the past…no profit-maximizing seller ever sells like this in either gold or silver…ever!!!
Tuesday’s huge rally in the gold price…that was stopped dead in its tracks shortly after London closed…had a disturbingly large increase in open interest to go with it…up 13,772 contracts to 331,507. That’s a lot! Was this the ‘4 or less’ bullion banks increasing their shorts…or the ‘9+ traders’ (Ted Butler’s raptors) taking profits on their long positions? Maybe it was a combination of both. Friday’s Commitment of Traders should tell us more…and I doubt I’ll be thrilled with what’s in it. In silver, o.i actually fell 674 contracts to 86,340…so Tuesday’s attempted rally in that metal had all the signs of short covering.
In gold news, I see in a story at ninemsn.com.au that Newcrest Mining in Australia reported a 21% fall in gold production in the three months to 31 December. Newcrest said it mined 382,584 ounces in the second quarter versus 456,618 ounces reported a year ago. And in a story at indiatimes.com, I note that there is yet another report as to how much gold was imported by India in 2008. This is the fifth number I’ve seen in the last three weeks on what gold imports into India were…all were different. This story says that “gold imports in India for 2008 dipped by almost 47% to 402 tonnes.” Maybe we’ll get another number next week. Watch this space! And in a story in the Globe and Mail (Toronto)…Kinross “unveiled a bought deal financing Wednesday that could raise as much as US$414.6-million.” Looks like they’re on the hunt for a cheap acquisition. And lastly, I see that the gold ETF, GLD (NYSE:GLD), has added another 7.65 tonnes to bring it up to another new record of 803 tonnes. There was no change in the silver ETF, SLV (NYSE:SLV)…but Ted Butler feels that based on volume, the fund is still owed between 2-4 million ounces.
In ‘other news’ I noted that along with Britain and the United States, Japan is about to fire up their printing presses. In a Bloomberg story just filed…”The Bank of Japan may today offer to expand corporate debt purchases to prevent a credit shortage from deepening the recession.” The new meaning of this is “quantative easing.” Debt monetization is just money printing by another name.
Like yesterday, I have four stories again today. The news from across the Atlantic is simply unbelievable. You couldn’t make up stuff like this! The entire banking system is done for over there. Many nations are on the brink…and some have already gone over the edge. Iceland and Ireland come to mind. You need a program just to keep up. I urge you to read all these stories when you have the time.
The first story is from The Telegraph in London. As usual, it’s from their international business editor, Ambrose Evans-Pritchard. The headline says it all…”Monetary union has left half of Europe trapped in depression”. The link is here.
The next story is from timesonline.co.uk. The essay is headlined “World Agenda: riots in Iceland, Latvia and Bulgaria are a sign of things to come”. [One can only hope that all citizens of all nations finally wake up to what's happening to them. – Ed] The link is here.
In this story, another from The Telegraph in London, the headline reads “Gordon Brown brings Britain to the edge of bankruptcy”. On Wednesday, investment guru Jim Rogers said: “Sell any sterling you might have. It’s finished.” The story, which is well worth the read, is linked here.
And lastly, another story from The Telegraph, and once again it’s an Ambrose Evans-Pritchard piece. This looks at the British banking crisis from another perspective, and it shows the untenable position that the British government finds itself in. No matter what option they choose…they’re screwed. The headline reads “U.K. cannot take Iceland’s soft option” and the link is here.
The country stands on the precipice. We are at risk of utter humiliation, of London becoming a Reykjavik on Thames, and Britain going under. Thanks to the arrogance, hubristic strutting and serial incompetence of the Government and a group of bankers, the possibility of national bankruptcy is not unrealistic. – Iain Martin, The Telegraph, January 21, 2009
;) |
| click to enlarge |
In case you haven’t got the message…the current world financial and monetary system is done for. That’s why the U.S. government is sitting on the precious metals prices at the moment. But it’s still the only game in town as far as wealth preservation is concerned…and you can’t own too much gold or silver bullion. They will be just about the only things left standing when the current system finally passes into history…however long that takes. And it won’t be much longer at the rate it’s going now.
All of us at Casey’s Daily Resource Plus look forward to seeing you here on Friday morning.
Source: And Then There’s This…Thursday, January 22nd, 2009
Last 5 posts by Contrarian Profits
- How and Why China Will Flood the Gold Market - November 25th, 2009
- Gold – getting in while the bull’s still hot - November 25th, 2009
- Gold – Not the end, but possibly a correction - November 24th, 2009
- How do retail sales stack up in an atypical recovery? - November 24th, 2009
- The Best Energy Investments in the World - November 23rd, 2009
Ambrose Evans-Pritchard, Australia, bloomberg, Britain, British government, Bulgaria, contrarian profits, Depression, Europe, Far East, filed& The Bank of Japan;, gld, Globe And Mail, Gordon Brown, Iceland, Iceland, India, Ireland, Japan, Jim Rogers, Latvia, London, Market Commentary, metal, Money Printing, New York, Newcrest Mining;, Printing Presses, Reykjavik, SLV;, Ted Butler, the Telegraph, Toronto, United Kingdom, United States, Us Government, USD
ContrarianProfits.com is a financial news and opinion website with a twist. As investment guru Rick Rule puts it, “You are either a contrarian or a victim.” In the financial world, most people are losers because they just don’t know what game they’re playing. They think they can just get “into the market” along with everyone else, do what everyone else does, and they will make money. Not likely. By the time you’ve paid commissions, spreads, fees, taxes – and suffered the consequences of inflation – you’ll be very lucky just to have as much money as you started with.
ContrarianProfits.com is a contrarian site, in the sense that we provide ideas, opinions and recommendations that often run counter to the mainstream financial press. We do this not just to be contrary, but because we’ve realized that Rick is right. You don’t make money by following the crowd; you make money by leading it.
Why is this so? Well, it’s obvious that if you do the same thing everyone else does you’ll get the same results everyone else gets. On average, and over the long run, real investment returns for the typical investor cannot exceed the rate of growth of the economy itself. Everybody can’t get richer faster than everybody else. Real economic growth in the US today averages about 3% per year; if you don’t make any mistakes, that’s about what you can expect. Few people may be satisfied with 3% per year, but most feel comfortable in the middle of the financial herd and are happy to take whatever that gets them. If you’re one of those people, you will probably not like our site. It will make you uncomfortable.
If, on the other hand, you’re willing to look at things a little differently, you’ll appreciate the views of many of our columnists, contributors and visionaries.
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.