Silver News

The Mission Of The Silver News Surfer Has Always Been & Will Always Be - To Preserve Your Wealth, Protect Your Purchasing Power and Create Generational Wealth!

May Health Wealth And Success Be Yours!


Forget The FED, It’s The “Other Taper” That Could Hit The Treasuries…

November 21, 2013 8:36 am est

The Mission Of The Silver News Surfer Has Always Been & Will Always Be – To Preserve Your Wealth, Protect Your Purchasing Power and Create Generational Wealth!

May Health Wealth And Success Be Yours!

 

Now, onto protecting your wealth…

Are you Confused about Fed tapering? Don’t be The financial community in general overreacted to the FOMC minutes. The price action in equities, Treasuries and currencies suggests that there was a major shift or revelation by the Fed but in reality the minutes contained very little surprises and did not say anything that we had not all already known. The minutes came just a day after Fed chief Ben Bernanke suggested the central bank would keep its ultra-easy monetary policy in place for as long as needed.

We are a looong way away from any kind of tapering, but the FED’S only tool left is just the threat, which we hear over and over again. The double talk might be for sale, but I ain’t buying it!

The other ‘taper’ that could hit Treasuries – Fixed-income investors remain transfixed on Treasury yields, trying to second guess when the Federal Reserve might look to rein in its bond-buying program.

But strategists say there may be another threat on the horizon with China starting to fall out of love with U.S. debt.

A deputy governor at the People’s Bank of China (PBoC), said in a speech at Tsinghua University on Wednesday that it’s no longer in China’s favor to accumulate foreign-exchange reserves, according to reports by both Bloomberg and the Wall Street Journal.

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Nonetheless, as I stated yesterday, regardless of what the FED minutes reveal it just another reason to smash the price of gold lower -It was so strong, that the Gold Market Halted For 2nd Time Today Following FOMC Minutes Monkey-Hammering 

This process is so counter-intuitive. Let’s smash the price of gold and ship it off to the East so they can have it at much cheaper prices and then maybe,if we give China what they want they won’t dump our debt and crush us.

While paper gold is getting the cold shoulder in the West, the Love Trade buyers in the East are wrapping their arms around all the physical gold they can get their hands on.

Something is going on and it sticks like a fish factory. Why? The stories keep coming like a tidal waves…

China’s Gold Production Increases But Is Dwarfed By soaring Consumption, Which Is Driven By Central Bank Gold Buying

Gold pours into China to meet record demand, bypasses Hong Kong

IMPORTANT: We talk alot about how we should follow the BIG money right? How we should dig in and do what the BIG boys do and what the powerhouse countries are doing right?

If you know that and I know that and we certainly have plenty of confirmation of what they are doing behind the curtain such as… Central Banks Net Buyers of Gold for Eleven Consecutive Months Now then what would make us hesitant to buy silver and gold on the cheap?

So if there is absolutely no good reason to hold gold (or silver) then why is it that the (banks) who print the money are net buyers of gold? Could it be that they don’t believe in their own product (Fiat)?

You know, last time gold & silver was this cheap, people who bought around $18 saw a significant increase to $25 which represented a $7 return or 38% ROI

Did they sell and take profits in the physical metal? NOPE! They understand that buying in the range of $18 and $25 will create EXTREME WEALTH for them in a few short years ahead or at the very least, their purchasing power will have been protected. Remember the story I published on Friday…

“Silver in 2008 (post crash) was at $9 per ounce and gas was $1.50 per gallon – That means I could purchase 6 gallons of gas with my 1 ounce of silver! Today, even though silver is significantly down from it’s highs of 2011, we are bouncing around $20.00 – $21.00 per ounce and according to my calculator, $21.00 divided now by $3.50 per gallon of gasoline still buys me 6 gallons of gasoline!

Once you stop focusing on the “price” of silver everyday, you are then able to understand the “value” that silver has in PROTECTING YOUR PURCHASING POWER.”

Allow me to assist you in understanding these ever changing and challenging financial markets and more importantly, how you can profit on the upside potential and protect yourself from the downside risks….

Now, onto the breaking news that matters…

Fed Propaganda Used To Smash Gold Market – How many times can the Fed say they may taper next month? We have been seeing that China’s intake of gold is considerably greater than that what is being reported.  All that is reported is the gold they get through Hong Kong.  That has already reached 850 tons this year.  So China will take in well over 1,000 tons of gold this year, and possibly as high as 1,100 tons of gold through Hong Kong.

Why would China want dollars when there is no guarantee the US will be able to keep the government open past mid-January.  China also runs the risk of a US default or something catastrophic when they hold dollars.  So when you see the price of gold drop on propaganda from the Fed, when we know that China’s purchases of gold have been greatly accelerated, it’s time to buy.

Remember, the Fed is already buying over $1 trillion a year.  So if they move to buying $700 billion a year, who cares?  That’s still an extraordinary amount of money printing.  They are still monetizing the debt.  This is unsustainable.

That’s why the Chinese are accumulating gold at an all-time record pace.  It’s also looking increasingly obvious that the West is in some kind of agreement with China to sell them cheap gold.  There is no other way to explain the price action.

This is why the Chinese are buying up all of the available gold for sale in the world.  They are literally in a race to accumulate gold.  You can see it in the data.  Yet the Western based Ponzi scheme paper markets in gold take the price lower.  Yes, there is something strange going on here but I can promise you it’s unsustainable.  The Chinese will revalue gold when they are ready and that day is coming.

Then it will be goodbye dollar and hello gold.  And when I say, ‘hello gold,’ I’m not talking about a run to the old highs.  I’m talking about gold many thousands of dollars higher than current levels, and quite possibly over $10,000 an ounce.  There is just no way around this outcome, but until that day comes, the West will desperately cling to Fed propaganda and paper gold price suppression until it blows up in their faces.

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Silver Fundamentals from an Historian’s Perspective – Ignore for the moment moving averages, technical analysis, relative strength indicators, partial differential equations, econometric analysis, Federal Reserve economic models, and all the other tools of the technician and just listen to the history.

· Demand for silver is strong in the United States, India and China.

· Central banks are printing currency and attempting to create inflation.

· The reserve status of the dollar is weakening. Many countries are bypassing the dollar in their international trade.

· Mining companies will have reduced output because their revenues have declined while expenses have increased. Hence the supply of silver and gold will remain relatively flat while demand is increasing.

· The global middle class will demand more gold and silver for savings. Americans may not understand gold and silver but over 2,000,000,000 Chinese and Indians do, and that demand for actual physical metals will grow.

· The cult of equities is flying high but it may not last. There is room for a shift from equities and bonds to precious metals. Even a small shift in demand away from stocks and bonds could cause the relatively tiny gold and silver markets to rise to new highs.

Fundamentally and historically speaking, there are many reasons to own gold and silver.

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2014: The Year for Gold Bullion Investors? – As Janet Yellen was testifying in front of the Senate Banking Committee, and when asked about the possible formation of bubbles as a result of the Federal Reserve’s quantitative easing program, she stated point-blank, “By and large, I would say that I don’t see evidence at this point in major sectors of asset price misalignments.” (Source: Bloomberg, November 15, 2013.)

I certainly don’t have any experience working at the Federal Reserve, but I find this hard to believe. Is the new Federal Reserve chairwoman trying to convince us that with a weak economy, it makes perfect sense for the stock market to be at all-time highs, margin debt to be soaring to record levels, the housing market to be experiencing bidding wars in certain areas of the country, and for vehicle sales to be soaring—all while incomes remain flat?

With the new Federal Reserve chairwoman explicitly stating that she is willing to continue these policies—even though we all realize that there aren’t any significant benefits to the average American—when quantitative easing finally ends, the pain will be horrendous.

I find the reaction in the gold bullion market quite interesting. If the new Federal Reserve chairwoman is saying she will continue policies that are as aggressive (and possibly more aggressive) to even larger amounts of quantitative easing (money printing), this can only be bullish for gold bullion.

Compared to earlier in 2013 when the Federal Reserve was considering the idea of reducing quantitative easing, this caused gold bullion to sell off. But now, the very thought of reducing quantitative easing appears to have been thrown out the window. With much more money printing coming down the pipeline—and gold bullion significantly underperforming the stock market—investors can look for a catch-up move in precious metals going forward.

Read More Here