CFTC Seeks Admission Of Market Manipulation From JPM; Jamie Balks

Jamie Dimon and Blythe Masters of JPMorgan will burn in hell.

http://www.zerohedge.com/news/2013-09-18/cftc-seeks-admission-market-manipulation-jpm-jamies-balks

Gold Bear Market Hits Hardest in South Africa Mines: Commodities

Mine closures due to sinking gold prices will reduce supply.  Labor strikes will increase producer costs.  Both conditions are constructive for rising physical gold prices.  Stay the course.

http://www.bloomberg.com/news/2013-06-25/gold-bear-market-hits-hardest-in-south-africa-mines-commodities.html

Blythe Masters Interview on CNBC

This sure sounds like 2007--only the interview took place in 2012.  Perhaps Blythe can explain the derivatives blow up in 2008, and JPMorgan's $6 billion "whale trade" loss last year.  JPMorgan is always "flat", eh?  Sure--so is the earth.

http://blythemasters.blogspot.com/2012/11/blythe-masters-interview-on-cnbc.html

CNBC: And you're looking at growth not only in agriculture and in metals and in oil, but across the board in all facets.  That's what you're investing in.  A lot of concern has been placed though about JPMorgan particularly its positions in the metals space.  And looking at your positions in silver, we talked earlier about the volatility in the silver market.  Can you talk about JPMorgan's positions and price volatility and how are they related?

Blythe Masters:  Yeah. that's a great question. And you're right, there's been a tremendous amount of speculation particularly in the blogosphere about this topic. I think the challenge is that that speculation represents a misunderstanding as to the nature of our business. As I mentioned earlier, our business is a client-driven business where we execute on behalf of clients to achieve their financial and risk management objectives.  The challenge is that commentators don't see all of that activity simultaneously.  So, just to give you a specific example, we store significant amounts of commodities -  for example, silver - on behalf of customers. We operate vaults in New York City, in Singapore and in London.  And often when customers have that metal stored in our facilities, they hedge it on a forward basis through JPMorgan who in turn hedges itself in the commodity markets. If you see only the hedges and our activity in the futures market, but you aren't aware of the underlying client position that we're hedging, then it would suggest inaccurately that we're running a large directional position. In fact that's not the case at all. We have offsetting positions. We have no stake in whether prices rise or decline. Rather we're running a flat, or a relatively match book.

Gold Bears Braced for U.S. to China Growth Recovery: Commodities

The experts are telling us to sell.  Time to buy.

http://www.sfgate.com/business/bloomberg/article/Gold-Bears-Braced-for-U-S-to-China-Growth-4281607.php

No Inflation? Commodities Highest Ever For This Time Of Year

http://www.zerohedge.com/news/2013-02-05/no-inflation-commodities-highest-ever-time-year

Gold, Silver, Corn, And Brent Are Best Performers On The 5-Year Anniversary Of The Great Financial Crisis

Gold bashers won't like this chart.

http://www.zerohedge.com/news/gold-silvercorn-brent-are-best-performers-5-year-anniversary-great-financial-crisis

John Embry on Gold, Silver, Currencies and Commodities

This is a must-read interview with John Embry.

http://www.24hgold.com/english/news-gold-silver-john-embry-on-gold-silver-currencies-and-commodities.aspx?article=3967100870G10020&redirect=false&contributor=Ron+Hera

The Great Escape: Delivering in a Delevering World

The world's biggest bond fund manager is telling investors to run towards commodities (or tangible assets).  Commodities are basically the antithesis of bonds, so readers may want to read up on Bill Gross' letter to shareholders before dismissing his investment thesis.

http://www.pimco.com/EN/Insights/Pages/The-Great-Escape-April-2012.aspx

Inflation is not "transitory"

According to Jim Quinn of the The Burning Platform blog:

The reality since Ben Bernanke announced his QE2 policy in August 2010 is:

• Unleaded gas prices are up 45%.
• Heating oil prices are up 46%.
• Corn prices are up 71%.
• Soybean prices are up 26%.
• Rice prices are up 13%.
• Pork prices are up 31%.
• Beef prices are up 25%.
• Coffee prices are up 38%.
• Sugar prices are up 48%.
• Cotton prices are up 13%.
• Gold prices are up 42%.
• Silver prices are up 115%.
• Copper prices are up 23%.

Yet, official statistics from the BLS state inflation is running at 2 - 3%.  They must be applying fictional math in the District of Corruption.

Jim Rogers 1-on-1

Markets down, gold up

Last week's bad news on the economic indicators continue to weigh down markets.  Equities, commodities, the USDollar, and the Euro are all down.  10-year US Treasury bonds are up slightly in a "slow-growth economy" mini-rally, while gold is rallying higher.  Precious metals are commodities, but they are also monetary metals.  Take heed.

Commodities and a stalling economy

This article aligns with my hypothesis that the price suppression of paper silver and gold (COMEX futures, LBMA, GLD and SLV ETF's) enables buyers of physical metals lower entry points.  Among the buyers of physical bullion are investors (especially in Asia), hedge funds, and central banks.  It's also conceivable that some of those buyers of physical metals are the same ones who are manipulating the prices of paper silver and gold down.

http://www.goldmoney.com/gold-research/commodities-and-a-stalling-economy.html

CFTC to Probe Speculator Role in Commodity Prices

http://www.cnbc.com/id/15840232?play=1&video=3000020494

US DOLLAR very close to an accelerating decline

http://traderdannorcini.blogspot.com/2011/04/us-dollar-very-close-to-accelerating.html

There is only one way to describe what is occuring to the US Dollar; its future as the global reserve currency is in serious danger of disappearing forever. Under the "leadership" of the US Federal Reserve, and thanks also to the reckless and incredibly short-sighted spending occuring at the Federal level, the Dollar has run out of friends.

It's decline this morning has opened the door for gold to push past $1500 and silver into what looks to me like the beginning of a "MELT UP" mode. It has also send further speculative money flows into the commodity sector with the result that the CCI, the Continuous Commodity Index, is within a whisker of matching its all time high.

What many of us have feared could happen but were hoping to see avoided, is becoming increasingly likely the further the Dollar descends into this abyss.

Gold Daily and Silver Weekly Charts - Gold, Silver and Stocks in a Financial Panic

http://jessescrossroadscafe.blogspot.com/2011/04/gold-daily-and-silver-weekly-charts-no.html

I will repeat as I have done so over and over, that if there is a general liquidation of all financial assets, gold and silver will take a hit as well, along with most other commodities. Silver will decrease further because it has a high beta or variability.  Since the miners have a correlation to stocks they will take a hit depending on their beta.

This will most likely represent a buying opportunity if you have the right time horizon and capitalization, and of course depending on your economic outlook, because gold and silver tend to  recover more quickly than stocks if there is an economic recovery.

Commodities resume price hikes

Commodities, including the precious metals complex, resumed their climb today, which perhaps validates my suspicion that Goldman Sachs' call for a top in commodities prices earlier this week was just another head fake--and an opportunity for them to buy in at lower prices after enabling a price crash.  Modus operandi:  get their retail clients and the gullible public to fall for another of their "prescient" market calls.  Score another profitable win for Goldman Sachs, and another "learning lesson" for their followers.

Click <here> for yesterday's blog entry.  Put me in the cynic category.

Energy

	PRICE*	CHANGE	% CHANGE	TIME
BRENT CRUDE FUTR (USD/bbl.)	122.920	2.000	1.65%	16:29
GAS OIL FUT (ICE) (USD/MT)	1,019.000	8.500	0.84%	16:27
HEATING OIL FUTR (USd/gal.)	320.500	3.240	1.02%	16:31
NATURAL GAS FUTR (USD/MMBtu)	4.149	0.051	1.24%	16:26
GASOLINE RBOB FUT (USd/gal.)	324.090	7.680	2.43%	16:31
WTI CRUDE FUTURE (USD/bbl.)	107.140	0.890	0.84%	16:29

Agriculture

	PRICE*	CHANGE	% CHANGE	TIME
CANOLA FUTR (WCE) (CAD/MT)	570.300	5.100	0.90%	14:39
COCOA FUTURE - LI (GBP/MT)	1,946.000	9.000	0.46%	12:05
COCOA FUTURE (USD/MT)	3,070.000	14.000	0.46%	14:00
COFFEE 'C' FUTURE (USd/lb.)	283.700	6.800	2.46%	14:00
CORN FUTURE (USd/bu.)	761.000	3.500	0.46%	14:15
COTTON NO.2 FUTR (USd/lb.)	180.640	-4.930	-2.66%	14:47
FCOJ-A FUTURE (USd/lb.)	163.400	-0.600	-0.37%	14:18
WHEAT FUTURE(CBT) (USd/bu.)	788.000	-4.250	-0.54%	14:15
WHEAT FUTURE(KCB) (USd/bu.)	895.500	-9.000	-1.00%	14:15
SUGAR #11 (WORLD) (USd/lb.)	23.650	-0.720	-2.95%	14:00
SOYBEAN FUTURE (USd/bu.)	1,345.000	4.000	0.30%	14:15
LUMBER FUTURE ($/1,000 board ft.)	276.000	10.000	3.76%	14:14
OAT FUTURE (USd/bu.)	395.500	-4.000	-1.00%	14:15
ROUGH RICE (CBOT) (USD/cwt)	13.950	0.260	1.90%	14:15
SOYBEAN MEAL FUTR (USD/T.)	347.600	0.200	0.06%	14:15
SOYBEAN OIL FUTR (USd/lb.)	57.990	0.120	0.21%	14:15
WOOL FUTURE (SFE) (cents/kg)	1,315.000	12.000	0.92%	04/13

Industrial Metals

	PRICE*	CHANGE	% CHANGE	TIME
COPPER FUTURE (USd/lb.)	430.050	-10.250	-2.33%	16:10

Precious Metals

	PRICE*	CHANGE	% CHANGE	TIME
GOLD 100 OZ FUTR (USD/t oz.)	1,457.300	3.700	0.25%	16:29
SILVER FUTURE (USD/t oz.)	40.590	0.524	1.31%	16:31

Livestock

	PRICE*	CHANGE	% CHANGE	TIME
LIVE CATTLE FUTR (USd/lb.)	115.900	0.300	0.26%	16:30
CATTLE FEEDER FUT (USd/lb.)	136.650	1.250	0.92%	16:31
LEAN HOGS FUTURE (USd/lb.)	101.675	2.325	2.34%	16:28

Commodities trade on different exchanges with different trading sessions. Change always shows the change from previous close price.

Rush to Use Crops as Fuel Raises Food Prices and Hunger Fears

I've been saying this for a long time: misguided mandates on biofuels will trigger food shortages, soaring commodities prices, and increase world hunger.  I've also said the overarching motivation for social unrest isn't just to overthrow oppressive dictatorships.  The main motivation is lack of food.  Thanks to Kitty for finding this article.

http://www.nytimes.com/2011/04/07/science/earth/07cassava.html?ref=science

THE BOJ ANSWERS THE TRILLION DOLLAR QUESTION: WHAT IS CAUSING THE COMMODITY RALLY?

http://pragcap.com/the-boj-answers-the-trillion-dollar-question-what-is-causing-the-commodity-rally

“While the strong increase in commodity prices has been driven by global economic growth propelled by emerging economies, speculative investment flows into commodity markets have amplified the intensity of the price surge. The dynamics of global commodity prices has been changing as well, in accordance with the growing presence of financial investors in commodity markets. The entry of new financial investors has paved the way for the “financialization of commodities”. Consequently, global commodity markets have become more sensitive to portfolio rebalancing by financial investors, which has made commodity markets more correlated with other asset markets, including major equity markets. Furthermore, globally accommodative monetary conditions have played an important role in the surge in commodity prices, both by stimulating physical demand for commodities and driving more investment flows into financialized commodity markets.”


Unlike the SF Fed, which just yesterday absolved the Fed of any impact on commodity prices (in fact said QE2 was exerting downward pressure on commodity prices), the BOJ performs multidimensional & unbiased research that finds the Fed and global central banks are having a dramatic impact on commodity prices.

QE ending?

I know some readers are long the precious metals, so I thought I would chime in with my admittedly subjective take on future Fed actions.

If QE 2.0 is not extended beyond June 30, after Fed announcements in April, look for all asset classes to decline, including possibly gold and silver (and mining companies).  However, I view a correction (dip) in the mining sector as a buying opportunity, because when the economic indicators tank as a result of the ending of QE, the Fed and monetary authorities will figure out the economy is too fragile to stand on its own, and will need further injections of liquidity to continue its "recovery."

It may take them several months of states and municipalities going bankrupt to figure out they can't stop the printing press, and will need to bail out these entities as well as sectors like commercial real estate.  Then, they will stealthily implement new rounds of stimulus, which will enable a resumption of the bull market in precious metals.

Long-term buy and holders need not do anything right now, and perhaps even buy the dip if and when it happens.

Traders may want to take some profits off the table, and wait for the buying opportunity to re-deploy the cash.  Aggressive traders may consider shorting the commodities complex, but that's not something I would personally consider, because front-running and fighting the Fed could be hazardous to your health if you mistime it.

Of course, I could be wrong:  if QE gets extended, the bull market in precious metals could continue onward and upward without pause.  Which means even if I do sell out of some positions, I won't sell everything.  Instead, I will possibly take only partial profits, and wait for the dip to occur--if it ever does.

Jim Rickards and Chris Whalen have submitted fantastic interviews and reviews on the topic of the potential cessation/continuation of QE, and how the Fed can use its enormous balance sheet to shape the bond yield curve, shifting it to shorter term securities without drastically expanding their balance sheet.  In other words, the Fed can surreptitiously continue rounds of QE in an attempt to stimulate the economy without drastically expanding their already bloated balance sheet.

See disclaimers in the side bar.

Disclosure:  long precious metals equities.

China sees strong commodities, weak dollar in 2011

http://www.reuters.com/article/2011/03/25/us-china-economy-overview-idUSTRE72O1MP20110325