Right to the breaking news that matters…
Hathaway – Plunging COMEX Metal Stocks & BoE Gold Sales – To me the biggest story right now is the disconnect between paper gold and physical gold. I see a lot of good commentary. I just don’t know how this plays out, but it seems to me that if the banks were involved in manipulating electricity, oil, and LIBOR, why would gold be exempt from such manipulation?
That’s why I’m so interested in the fact that COMEX warehouse stocks have dropped to extremely low levels…. We are in a backing and filling mode where the metals are base-building from this recent price smash. But we are close to entering a seasonally strong pattern. So going into the fall there are seasonal factors that should help gold. I believe the shorts are close, or are already to the point where they have run out of ammunition.
But part of the reason why gold will trade higher is this mismatch between the shorts, gold that has been leased, and physical demand, which we know continues to be very strong. I’m just waiting for the next macro event that will make everybody want to own gold again, instead of being comfortable on the short side.
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The Most Important Number In The Entire U.S. Economy – There is one vitally important number that everyone needs to be watching right now, and it doesn’t have anything to do with unemployment, inflation or housing. If this number gets too high, it will collapse the entire U.S. financial system. The number that I am talking about is the yield on 10 year U.S. Treasuries.
When that number goes up, long-term interest rates all across the financial system start increasing. When long-term interest rates rise, it becomes more expensive for the federal government to borrow money, it becomes more expensive for state and local governments to borrow money, existing bonds lose value and bond investors lose a lot of money, mortgage rates go up and monthly payments on new mortgages rise, and interest rates throughout the entire economy go up and this causes economic activity to slow down.
On top of everything else, there are more than 440 trillion dollars worth of interest rate derivatives sitting out there, and rapidly rising interest rates could cause that gigantic time bomb to go off and implode our entire financial system. We are living in the midst of the greatest debt bubble in the history of the world, and the only way that the game can continue is for interest rates to stay super low. Unfortunately, the yield on 10 year U.S. Treasuries has started to rise, and many experts are projecting that it is going to continue.
The Fractional Reserve Gold System Is Closer To Collapse – I would say gold is now poised to go much, much higher than any potential downside, and so the risk/reward is very favorable as I see it right here. I think monetary authorities are going to decide what comes next for the monetary system, and it is going to include gold, and it will include gold at a much higher price than where it is currently trading.
I also think it’s going to be whatever they think they can get away with. So I don’t know if gold will be $3,000, $5,000, $10,000 or $20,000, but it is going to be much higher than where it is today because the bottom line is they are going to have to inflate.”
Experts Predict 30-Day Window for Gold – We’ve been studying the resource markets – and gold in particular – for over 30 years. And have seen almost every cycle the yellow metal has gone through.
We believe this is a unique moment in history to get gold on the cheap, and take advantage of before the end of summer. The fact is, if you got into the bull market early, even up until mid-2010, you’re fine. But if you bought any time after mid-2010, you are break-even to down.
But even if you’re down, it’s just a matter of time before we see higher gold prices, so it’s imperative you keep a core position. Gold hits a consistent low area nearly every 8 years. You can see below, it’s been pretty reliable by several months.
Gold To $1,500 By Fall: Van Eck Global – Kitco News talks to Van Eck Global portfolio manager Joe Foster about the current state of the precious metals markets. Foster is bullish on gold and expects the markets to act better by fall. With regards to issues in the mining industry, Foster says it is a buying opportunity for mining stocks. What is his outlook for gold? “Gold will move towards $1,500 an ounce by year end”