Biggest Gold Mine In The World Shutdown: Is This The Catalyst Gold Has Been Awaiting?

http://seekingalpha.com/article/1476581-biggest-gold-mine-in-the-world-shutdown-is-this-the-catalyst-gold-has-been-awaiting

The Equivalent Of Cyprus Gold Reserves Have Just Gone Offline

http://seekingalpha.com/article/1359471-the-equivalent-of-cyprus-gold-reserves-have-just-gone-offline

Case Closed: CME Hikes Gold, Silver, Copper Margins (again)

http://www.zerohedge.com/news/case-closed-cme-hikes-gold-silver-copper-margins

20 Cents for Gas Shows the Power of Silver - 2 August 2011

http://goldnews.bullionvault.com/silver_price_gas_prices_080220115

Go to any bank right now and hand them $100 and ask for nickels. The teller will gleefully give you back about $135 in metal (as of this writing). We suggest you do this as regularly as you can.

No, you can't take advantage of that now by turning around and selling these cupronickel pieces ("nickels" are actually only 25% nickel and 75% copper) for an immediate 35% gain. Not yet. But that time is coming. It could take years, but we doubt it will be that long this time around. The pace of debasement is accelerating over time.

JP Morgan revealed as mystery trader that bought £1bn-worth of copper on LME

Is JPMorgan cornering the market in copper?

http://www.telegraph.co.uk/finance/newsbysector/industry/8180304/JP-Morgan-revealed-as-mystery-trader-that-bought-1bn-worth-of-copper-on-LME.html

Save your nickels

At current price levels, their melt value is $0.06. If inflation gets worse, nickel and copper prices will rise further, and the melt value will rise accordingly. If deflation sets in, the nickel still has a face value of $0.05.

http://www.coinflation.com/coins/1946-2007-Jefferson-Nickel-Value.html

The Chinese shunning of gold?

Not according to Dan Norcini:

Gold put in an impressive performance today from where I sit battling back from a barrage of selling linked to the ridiculous story circulating around the market today that China was not interested in buying gold. That initially emboldened the raiders at the Comex and sent the lemmings packing and heading for the hills before saner minds prevailed who began buying into the weakness. The result was a strong bounce from important technical support near the $1,110 level (see the chart for a view and read the comments there).

Let’s state the obvious here – the Chinese NEVER announce their intentions beforehand. Do the investors/traders in this nation believe that they are stupid? Anyone who follows the soybean market can attest to this. As we mentioned last time a story appeared announcing China’s intention to buy the remainder of the IMF gold sale; such a thing would be very uncharacteristic for them. After all, we are not dealing with a Gordon Brown here (the Prime Minister of England who at the time he headed the Treasury there announced beforehand his intention to sell England’s horde of gold thereby guaranteeing that the citizens of his nation would receive the lowest possible price). Rest assured that China has no intention of saying the least thing positive about gold purchases knowing full well that they will create a stampede of buying into the market which would guarantee them the worst possible purchase price.

You might recall that after copper collapsed from over $4.00 all the way down to $1.25 that it was not until it had recovered quite nicely off the bottom that word leaked out that China had been accumulating the red metal for its strategic stockpiles. Did China come in and announce beforehand that they were going to buy gobs of copper? Of course not –it was only after the market began moving higher and kept moving higher and traders were speculating as to what was going on that the truth came out. I remember full well the comments from the analysts at the time who were dumbfounded by the fact that the metal kept moving higher in the face of a collapse in the US housing market and an abrupt shutdown of the US economy. They were all sitting around scratching their heads trying to come up with reasons why the market was going up and not down.

It will be exactly the same for gold. China will buy it and you will not know it UNTIL AFTER THE FACT. The price chart will tell us when the buying is occurring but it will not tell us who is buying. I repeat, the East does not announce their intentions until after the fact. They will accumulate the metal on price weakness whenever Western-based hedge funds are in the process of selling it. If I had to bet on these funds against China, my money would be on the Chinese.

One last comment about this matter – China is still reeling from the fact the India beat them to the market on their gold buys late last year. And do not forget that India is going to be adding more gold to their official reserve holdings at an appropriate price level.

Even if you leave the Chinese out of the gold market – gold has not been making all time record highs in terms of the Euro and the British Pound and 30 year highs in terms of the Swiss Franc because China might or might not buy the metal. It has been doing so because it is functioning as a currency without any obligations attached to it. In other words, China’s actions in the gold market have nothing to do with gold’s string of all time highs in these major currencies. It is fear, uncertainty and a desire for a safe haven that have fueled the metal’s rise. China is just an added bonus which will serve to keep a floor under the metal on price retracements.

It looks to me like it's just another head fake--this time thrown by the Chinese to throw speculators and other sovereign governments off their trail.

Disclosure: long gold mining shares.

CFTC to holding hearing on position limits

The CFTC will be holding a hearing on March 25 to examine position limits in the gold, silver and copper futures markets. I've blogged a few entries on the need to limit and enforce concentrated positions in commodities markets in order to prevent price manipulation, including this entry yesterday: http://gregnguyen.blogspot.com/2010/02/gold-and-silver-suppression-confirmed.html (the original link was incorrect--click on it again).

http://www.gata.org/node/8364

Let's see if anything positive comes out of this meeting. I'll post the results when available.

Deflation or inflation?

With much of the focus in the commodities sector on crude oil and the precious metals gold and silver, what's been somewhat lost among the mainstream media and audience is the surge in the "red" metal, copper. Since copper is used in many industrial, housing, and information technology industries, it's been dubbed the bellweather for economic activity and inflation.

http://stockcharts.com/h-sc/ui

The deflationists correctly claim economic activity is dormant in the US and other developed countries, but they are not accounting for the unintended consequences of the carry trade, where Fed easy monetary and interest rate policies are causing asset bubbles and booming economic activity in emerging countries such as China, India, and Brazil. In essence, the hot money is borrowing at 0% interest rates in the USDollar, and investing in commodities and equities in foreign currencies, hence driving asset values higher.

Deflationists also point to official consumer price index (CPI) numbers--benignly low at 0.1% in November, 2009, as further proof that inflation is not an imminent threat.

To which I say "hogwash", as the increase in copper and commodities prices overall reflect inflationary pressures. Banking lending has not returned to nominal levels and wage labor prices have not increased due to a loose employment market; these two scenarios should be keeping a lid on prices. But commodities prices continue to rise despite an absence of these two inflationary factors. When and if the two components do return, inflation could potentially soar due to the exploding monetary base and resultant increased money supply.

While I expect asset values in US housing and equities in certain sectors to continue to be under pressure, the Fed's easy money policies will continue to debase the USDollar, deteriorating the purchasing power of consumers.

Doug Casey on the Roman empire

Along with the Greeks, the Romans form the base of Western civilization. We know a lot about Rome now, and they were people exactly like us. And the rise of Rome does in many ways parallel the rise of America. Its rise, its peak - and at this point I think you can even see its decline reflected in the distant mirror of Rome.

We see the same change from a republic to a highly bureaucratized state with tentacles all over the world and great importance placed on the military. The population relying on welfare (after the time of the conquest of Egypt by Caesar, most of the grain and olive oil, the two big commodities of the ancient world, were no longer grown in Italy; they were imported from Africa and given for free, or nearly free, to the people in Rome). Even what went on in the Circus Maximus, the Coliseum, and their many copies in smaller cities, has its parallel in today’s massive football events - not to mention cage fighting and other grisly sports. The big one, of course, is the gradual destruction of the currency.

Quite interesting to me is that in the days of the republic, Roman coins portrayed mythical figures, like gods and goddesses, and ideal concepts. They changed to portraits of the emperor after Caesar.

In the U.S., 1913 - which was a pretty bad year overall, with the initiation of the income tax - was the year the first coin with a dead president’s head on it was introduced, the Lincoln penny. Before then, we only had things like Liberty, Indians, buffaloes, etc. on our coins. Since then, all our coins have had dead emperors on them. We started out with semi-mythic figures like Washington and Jefferson. But now we do the recently dead - Roosevelt, Kennedy, Eisenhower.

It’s simply wrong to put the features of your rulers on the coinage. And the Romans, before Augustus, agreed. And, of course, gold was taken out of daily circulation in 1933, silver in 1965, and copper from the penny in 1982.

Nothing new.

-Doug Casey