Economy

How The Gold Price Is Manipulated During The ‘London Fix’

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– How Gold Price Is Manipulated During The “London Fix” (ZeroHedge, Nov 25, 2013):

There was a time when the merest mention of gold manipulation in “reputable” media was enough to have one branded a perpetual conspiracy theorist with a tinfoil farm out back. That was roughly coincident with a time when Libor, FX, mortgage, and bond market manipulation was also considered unthinkable, when High Frequency Traders were believed to “provide liquidity”, or when the stock market was said to not be manipulated by the Fed, and when the ever-confused media, always eager to take “complicated” financial concepts at the face value set by a self-serving establishment, never dared to question anything. Luckily, all that changed in the past several years, and it has gotten to the point where even the bastions of “serious”, if 3-5 years delayed, investigation are finally not only asking how is the gold market being manipulated, but are actually providing answers.Such as Bloomberg.

The topic of gold market manipulation during the London AM fix is not new to Zero Hedge: in fact we have discussed both the historical basis and the raison d’etre of the London gold fix, as well as the curious arbitrage available to those who merely traded the AM-PM spread, for years. Which is why we are delighted that none other than Bloomberg has decided to break it down for everyone, as well as summarize all the ways in which just this one facet of gold trading is being manipulated.

Bloomberg begins:

Read moreHow The Gold Price Is Manipulated During The ‘London Fix’

Chart Of The Day: How China’s Stunning $15 Trillion In New Liquidity Blew Bernanke’s QE Out Of The Water

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– Chart Of The Day: How China’s Stunning $15 Trillion In New Liquidity Blew Bernanke’s QE Out Of The Water (ZeroHedge, Nov 25, 2013):

Much has been said about the Fed’s attempt to stimulate inflation (instead of just the stock market) by injecting a record $2.5 trillion in reserves into the US banking system since the collapse of Lehman (the same goes for the ECB, BOE, BOJ, etc). Even more has been said about why this money has not been able to make its way into the broader economy, and instead of forcing inflation – at least as calculated by the BLS’ CPI calculation – to rise above 2% has, by monetizing a record amount of US debt issuance, merely succeeded in pushing capital markets to unseen risk levels as every single dollar of reserves has instead ended up as assets (and excess deposits as a matched liability) on bank balance sheets.

Much less has been said that of the roughly $2 trillion increase in US bank assets, $2.5 trillion of this has come from the Fed’s reserve injections as absent the Fed, US banks have delevered by just under half a trillion dollars in the past 5 years. Because after all, all QE really is, is an attempt to inject money into a deleveraging system and to offset the resulting deflationary effects. Naturally, the Fed would be delighted if instead of banks being addicted to its zero-cost liquidity, they would instead obtain the capital in the old-fashioned way: through private loans. However, since there is essentially no risk when chasing yield and return and allocating reserves to various markets (see JPM CIO and our prior explanation on this topic), whereas there is substantial risk of loss in issuing loans to consumers in an economy that is in a depressionary state when one peels away the propaganda and the curtain of the stock market, banks will always pick the former option when deciding how to allocated the Fed’s reserves, even if merely as initial margin on marginable securities.

However, what virtually nothing has been said about, is how China stacks up to the US banking system when one looks at the growth of total Chinese bank assets (on Bloomberg: CNAABTV Index) since the collapse of Lehman.

The answer, shown on the chart below, is nothing short of stunning.

Here is just the change in the past five years:

Read moreChart Of The Day: How China’s Stunning $15 Trillion In New Liquidity Blew Bernanke’s QE Out Of The Water

Inflation Is Raging … If You Know Where To Look

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– Inflation is Raging – If You Know Where to Look (Dollar Collapse Blog, Nov 24, 2013):

Most people – certainly most governments and economists – define inflation as a general rise in prices. But this is wrong. Inflation is an increase in the money supply, of which a rising general price level is just one possible result – and not the most common one.

More often, excessive money creation shows up as asset bubbles, where the new money, instead of flowing equally to all the products that are for sale at a given time, flow disproportionately into the ‘hottest’ asset classes. Readers who were paying attention in the 1990s might recall that the consumer price index was well-behaved while huge amounts of money flowed into financial assets, producing the dot-com bubble.

The same thing happened in the 2000s, when excess currency flowed into housing and equities. In each case, mainstream economists and government officials pointed to modest consumer price inflation as a sign that things were fine. And in each case they were simply looking in the wrong place and completely missing the destabilizing effects of an inflating money supply.

Read moreInflation Is Raging … If You Know Where To Look

The World’s 2170 Billionaires Control $33 TRILLION In Net Worth, Double The US GDP

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– The World’s 2170 Billionaires Control $33 Trillion In Net Worth, Double The US GDP (ZeroHedge, Nov 23, 2013):

Before it became a conspiracy fact, the traditional response to all suggestions of a massive Libor/FX/commodity/mortgage rigging cartel was a simple if stupid one: too many people are involved and so it can never be contained. As it turns out not only can it be contained, but when the interests of the “conspiracy” participants are alligned, it can continue for decades. Naturally, the same applies for the pinnacle of the global wealth pyramid: the world’s billionaires and their plan of wealth preservation and accumulation.

Not only have the world’s richest been the biggest beneficiaries of the monetary and fiscal policies since 2009, with the current 2170 global billionaires representing a 60% increase since 2009 according to UBS, but their consolidated net worth has more than doubled from $3.1 trillion in 2009 to $6.5 trillion now. At the same time, the net worth of the “bottom 90%” of the world’s not so lucky population, has declined. Yet, somehow, the Fed is still revered.

Read moreThe World’s 2170 Billionaires Control $33 TRILLION In Net Worth, Double The US GDP

Today’s Wealth Destruction Is Hidden By Government Debt

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– Today’s Wealth Destruction Is Hidden By Government Debt ( Ludwig von Mises Institute, Nov 21, 2013):

Still unnoticed by a large part of the population is that we have been living through a period of relative impoverishment. Money has been squandered in welfare spending, bailing out banks or even — as in Europe — of fellow governments. But many people still do not feel the pain.

However, malinvestments have destroyed an immense amount of real wealth. Government spending for welfare programs and military ventures has caused increasing public debts and deficits in the Western world. These debts will never be paid back in real terms.

The welfare-warfare state is the biggest malinvestment today. It does not satisfy the preferences of freely interacting individuals and would be liquidated immediately if it were not continuously propped up by taxpayer money collected under the threat of violence.

Read moreToday’s Wealth Destruction Is Hidden By Government Debt

Dr. Paul Craig Roberts: The Dying Dollar – Federal Reserve And Wall Street Assassinate US Dollar

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Dr. Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University.

– The Dying Dollar — Paul Craig Roberts (Paul Craig Roberts, Nov 22, 2013):

The Dying Dollar
Federal Reserve and Wall Street Assassinate US Dollar

Since 2006, the US dollar has experienced a one-quarter to one-third drop in value to the Chinese yuan, depending on the choice of base.

Now China is going to let the dollar decline further in value.  China also says it is considering undermining the petrodollar by pricing oil futures on the Shanghai Futures Exchange in yuan. This on top of the growing avoidance of the dollar to settle trade imbalances means that the dollar’s role as reserve currency is coming to an end, which means the termination of the US as financial bully and financial imperialist.  This blow to the dollar in addition to the blows delivered by jobs offshoring and the uncovered bets in the gambling casino created by financial deregulation means that the US economy as we knew it is coming to an end.

Read moreDr. Paul Craig Roberts: The Dying Dollar – Federal Reserve And Wall Street Assassinate US Dollar

JPMorgan Gave $75,000 A Month To Chinese PM’s Kid (Video)

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YouTube Added: Nov 21, 2013

Description:

JPMorgan Chase has made many headlines recently. There’s a new investigation underway regarding the bank’s practice of giving lots of money to the kids of rich people abroad in order to gain influence illegally. They just topped the Financial Stability Board’s “Too big to fail” list. They just reached an agreement with the Justice Department to pay a record $13 billion for its fraudulent mortgage products. It’s facing an investigation as Bernie Madoff’s primary bank. And an ex-employee stands accused of hiding hundreds of millions of dollars worth of trading losses.

‘This Is Really A Symbol Of What’s Going On In This Whole Country. We’re Losing Middle-Class Jobs’

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– “This Is Really A Symbol Of What’s Going On In This Whole Country. We’re Losing Middle-Class Jobs” (ZeroHedge, Nov 21,2013):

We wish we could say we didn’t warn Boeing’s machinists about the key trend taking place in the US economy under the Obama “recovery” but unfortunately we did. Three years ago, to be specific, when we wrote: “Charting America’s Transformation To A Part-Time Worker Society” and followed it up with “A “Quality Assessment” Of US Jobs Reveals The Ugliest Picture Yet” in which we explained that while the propaganda machine was fixated on numeric, quantitative, job additions every month, what has subversively going on, was the constant deterioration in the quality of jobs – and specifically the declining wages – available to those Americans who had not rotated outside of the labor force permanently (currently at a record 91.5 million). We say “alas” because it once again took several years before our cautions to be felt by the broader population, in this case the Boeing machinist union struggling to extract a wage increase from its employer: Boeing, whose stock keeps hitting new record highs with every passing day.

Read more‘This Is Really A Symbol Of What’s Going On In This Whole Country. We’re Losing Middle-Class Jobs’

World Famous Blogger ‘Mish’ (Mike Shedlock) Fined 8,000 Euros By France For Freedom Of Speech

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– Blogger “Mish” is Fined 8,000 Euros by France for Freedom of Speech (Liberty Blitzkrieg, Nov 20, 2013):

Well if this isn’t one of the more ridiculous things I have read in a while, I don’t know what is. Many of my readers are probably familiar with Mike “Mish” Shedlock, who writes a very popular economics/finance blog. He has a habit of doing what I like best, challenging propaganda, engaging in critical thought and a fearlessness when it comes to saying what he believes. It appears that such behavior is frowned upon by French banksters and their minions in government.

Incredibly, Mish was fined 8,000 euros for quoting a French blogger’s analysis of Societe Generale’s leverage ratio. He was also summoned to appear in front of a tribunal in France.

Expect more of this sort of thing as the status quo loses more and more credibility and struggles to censor alternative narratives of what is actually happening. We have even seen similar calls here in the U.S., such as when Eric Posner, a Professor at the University of Chicago Law School, bashed the First Amendment in a Slate article.

For more on the Mish story, here are some excerpts from his blog:

A few days ago I learned, via a French blog, that I was fined 8,000 euros for quoting a French blogger. I would have known earlier, but the letter notifying me of the fine was sent in French.

In an earlier express letter packet, I could make out a few of the words, in particular noting a summons to appear before a tribunal in France. Needless to say, I did not go.

Read moreWorld Famous Blogger ‘Mish’ (Mike Shedlock) Fined 8,000 Euros By France For Freedom Of Speech

Is Venezuela Selling Its Gold To Goldman Sachs?

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– Is Venezuela Selling Gold to Goldman Sachs? (Liberty Blitzkrieg, Nov 20, 2013):

The following article was published in the Venezuelan newspaper El Nacional, and it appears to imply that the struggling South American nation has agreed to sell or swap the gold it still holds overseas at the Bank of England to Goldman Sachs.

This is one of the major problems with gold. Despite what some may say, it is probably the most manipulated asset on the planet. Given the fact that so much of the gold is in the hands of sovereign nations and Central Banks that can be pressured by the U.S. empire, this is what happens. In fact, as I have said on many occasions, many of the Central Bank purchases we hear about do not consist of countries actually moving gold to within their borders, but rather just paper purchases. This does nothing to tighten supply/demand for gold. The main countries who’s Central Banks actually appear to buy and deliver gold within their borders are China, Russia, Iran, and well, Venezuela. Until that changes, gold will be relatively easily manipulated, which is exactly why I support Bitcoin and why is taking off as it has.

From a sentiment perspective I think gold is buy, but personally I am waiting to see if we get one more major flush.

Here are excepts from the article courtesy of GATA. I believe it is a google translation and the actual sourced article in Spanish can be found here.

Read moreIs Venezuela Selling Its Gold To Goldman Sachs?

Almost Half Of Young Italians Want To Flee

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– Almost half of young Italians want to flee (The Local, Nov 19, 2013):

Italy’s stagnant economy is driving its best talent overseas, with almost 50 percent of young Italians wanting to work abroad, according to a new report on Monday.

Forty-eight percent of young Italians are ready to go abroad, while some 46.5 percent of those who do stay end up working in an area different from what they studied, according to the report by the Toniolo Institute and the Cariplo Foundation.

Read moreAlmost Half Of Young Italians Want To Flee

Another American Nightmare: 80 Is The New 60 When It Comes To Retirement

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– 80 is the new 60 when it comes to retirement (New York Post, Nov 16, 2013):

American business has become a gray area. As in hair color.

Call it the new American nightmare: Running out of money in retirement is scaring the hell out of record numbers of older workers, forcing them to stay in the workforce.

Now 80 is the new 60 when it comes to retirement. Many older workers who finally clock out have sharply underestimated their financial needs in retirement, raising the specter of personal financial disaster.

Read moreAnother American Nightmare: 80 Is The New 60 When It Comes To Retirement

Veterans Today’s Gordon Duff: Only Rich Americans ‘Deserve To Live’

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Listen to Gordon Duff here:

– Only rich Americans ‘deserve to live’ (PressTV, Nov 19, 2013):

American journalist Gordon Duff says the US economic problems have turned it into a country where only rich people deserve to live decent lives.

“People who have money no matter how they got it, dealing drugs, prostitution, kidnapping children off the street, taking kickbacks from contractors….they deserve to live,” Duff told Press TV on Tuesday.

Read moreVeterans Today’s Gordon Duff: Only Rich Americans ‘Deserve To Live’

The ‘Obamacare Shock’: One California Employer’s Terrifying True Story

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– The “Obamacare Shock” – One California Employer’s Terrifying True Story (ZeroHedge, Nov 20, 2013):

From a Zero Hedge reader:

My company, based in California, employs 600. We used to insure about 250 of our employees. The rest opted out. The company paid 50% of their premiums for about $750,000/yr.

Under obamacare, none can opt out without penalty, and the rates are double or triple, depending upon the plan. Our 750k for 250 employees is going to $2 million per year for 600 employees.

By mandate, we have to pay 91.5% of the premium or more up from the 50% we used to pay.

Read moreThe ‘Obamacare Shock’: One California Employer’s Terrifying True Story

Fake Employment Numbers – And 5 More Massive Economic Lies The U.S. Government Is Telling You

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– Fake Employment Numbers – And 5 More Massive Economic Lies The Government Is Telling You (Economc Collapse, Nov 19, 2013):

According to a whistleblower that has recently come forward, Census employees have been faking and manipulating U.S. employment numbers for years.  In fact, it is being alleged that this manipulation was a significant reason for why the official unemployment rate dipped sharply just before the last presidential election.  What you are about to read is incredibly disturbing.  The numbers that the American people depend upon to make important decisions are being faked.  But should we be surprised by this?  After all, Barack Obama has been caught telling dozens of major lies over the past five years.  At this point it is incredible that there are any Americans that still trust anything that comes out of his mouth.  And of course it is not just Obama that has been lying to us.  Corruption and deception are rampant throughout the entire federal government, and this has been the case for years.  Now that some light is being shed on this, hopefully the American people will respond with overwhelming outrage and disgust.

The whistleblower that I mentioned above has been speaking to John Crudele of the New York Post.  In his new article entitled “Census ‘faked’ 2012 election jobs report“, he says that the huge decline in the unemployment rate in September 2012 was “manipulated”…

Read moreFake Employment Numbers – And 5 More Massive Economic Lies The U.S. Government Is Telling You

Billionaire Jim Rogers: ‘Own Gold’ Because ‘One Day, Markets Will Stop Playing This Game’

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– Jim Rogers: “Own Gold” Because “One Day, Markets Will Stop Playing This Game” (ZeroHedge, Nov 19, 2013):

Jim Rogers hope-driven wish is that the politicians were smart enough at some point to say (to the central bankers), “we’ve got to stop this, this is going to be bad.” He adds, on the incoming QEeen, “she’s not going to stop it, first of all she doesn’t believe in stopping it, she thinks printing money is good.” However, Rogers warns in this excellent interview with Birch Gold, “eventually the markets will just say, “We’re not going to play this game anymore”, and we’ll have a serious collapse.” The world is blinded by central bank liquidity, and as Rogers somewhat mockingly notes “if everybody says the sky is blue, I urge you to look out the window and see if it’s blue because I have found that most people won’t even bother to look out the window…” Rogers concludes, “everybody should own some precious metals as an insurance policy,” because as he ominously warns, when ‘it’ collapses, “there will be big change.

Transcript (via Birch Gold Group)

Rachel Mills, Birch Gold Group (BGG): This is Rachel Mills for Birch Gold, and I am very pleased to be joined today by Jim Rogers, legendary investor. Thank you so much Jim for joining me.

Jim Rogers: I am delighted to be here Rachel.

BGG: So today I wanted to talk a little about stock market highs and Quantitative Easing and inflation and a little bit of Federal Reserve and when is the taper is going to happen and currency wars. But there is one question that I don’t have to ask you, which you get asked a lot, I know, and that is what your secret to being so prescient in the marketplace?

“…if everybody says the sky is blue, I at least urge you to go and look out the window and see if it’s blue because I have found that most people won’t even bother to look out the window…”

JR: As far as I know, I’m not quite sure. I do know that I have learned over the years, always, when nearly everybody is thinking the same way that means somebody’s not thinking that means we got to start thinking about it and see if there’s not another way, another approach. Because if everybody says the sky is blue, I at least urge you to go and look out the window and see if it’s blue because I have found that most people won’t even bother to look out the window. If they see on the television or in the newspaper or something that everybody says the sky is blue, I at least urge them to look out the window. I find that most people don’t want to do their homework, that’s the first problem that many people have, is just doing simple homework.

“…no matter what we all know today, it’s not going to be true in 10 or 15 years…”

Read moreBillionaire Jim Rogers: ‘Own Gold’ Because ‘One Day, Markets Will Stop Playing This Game’

Collecting Donations For Wal-Mart Employees That Cannot Afford Thanksgiving Dinner?

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– Collecting Donations For Wal-Mart Employees That Cannot Afford Thanksgiving Dinner? (Economic Collapse, Nov 18, 2013):

You may find what is happening at one Wal-Mart in Ohio very hard to believe.  At the Wal-mart on Atlantic Boulevard in Canton, Ohio employees are being asked to donate food items so that other employees that cannot afford to buy Thanksgiving dinner will be able to enjoy one too.  You can see a photo of the donation bins that has been posted on Twitter right here.  On the one hand, it is commendable that someone at that Wal-Mart is deeply concerned about the employees that are so poor that they cannot afford to buy the food that they need for Thanksgiving.  On the other hand, this is a perfect example that shows how the quality of the jobs in this country has gone down the toilet.  Wal-Mart is the largest employer in the United States and it had operating income of 26.5 billion dollars last year.  Wal-Mart is not required to pay their employees a decent wage, and it is very unlikely that anyone will force them to.  But they should.  Because Wal-Mart does not pay decent wages to their employees, the rest of us end up with the bill.  As you will see below, huge numbers of Wal-Mart employees end up on Medicaid and other government assistance programs.  Meanwhile, those that control Wal-Mart continue to enjoy absolutely massive profits.

The following is a short excerpt from a local news story about the donation bins that have been set out at the Wal-Mart in Canton, Ohio.  As the story notes, this does not appear to be a nationwide program, and the donation bins are only available in an employee-only area…

Read moreCollecting Donations For Wal-Mart Employees That Cannot Afford Thanksgiving Dinner?

Timothy Geithner in January 2013: ‘Extremely Unlikely Will Take A Job In The World Of Finance’

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– Tim Geithner in January 2013: “Extremely Unlikely Will Take a Job in the World of Finance” (Liberty Blitzkrieg, Nov 18, 2013):

So over the weekend, the world learned that Tiny Turbo Tax Timmy Geither had accepted a job with private equity giant firm Warburg Pincus. The news was about as much of a surprise as a lie popping out of Barack Obama’s mouth every time he opens it. Nevertheless, the move is particularly hilarious in light of a profile article of Geithner in New York magazine from January of this year, in which the king of cronyism tried to distance himself from Wall Street.

Here’s the money-shot paragraph from the piece:

Another fiction that has plagued Geithner is the idea that he is a creature of Wall Street, specifically that he worked for Goldman Sachs. He isn’t sure where it came from—probably just confusion with his predecessor, Hank Paulson, who was the former CEO—but “once it hardened, it was very hard to overcome.” Indeed, he has not really overcome it at all. I can write, right here, in all caps, TIM GEITHNER HAS NEVER WORKED ON WALL STREET, and still someone will comment on our website that he is a bankster who should just go back to Goldman Sachs. Geithner says it’s “extremely unlikely” he will take a job in the world of finance, but the idea that he is somehow, secretly, working hand in hand with that community persists, and every once in a while someone pulls out records of his phone calls and meetings with CEOs as evidence. Geithner is not really sure what to say about that. “I’m the secretary of the Treasury.” He laughs. “How am I supposed to run a financial rescue if I don’t take phone calls from people?”

At least he is making up for lost time. Those conspiracy theorists making stuff up again…

Read moreTimothy Geithner in January 2013: ‘Extremely Unlikely Will Take A Job In The World Of Finance’

The Failure Of Abenomics In One Chart … And When Even The Japanese Press Admits “Easing Is Not Working, And It’s Going Nowhere”

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– The Failure Of Abenomics In One Chart… And When Even The Japanese Press Admits “Easing Is Not Working, And It’s Going Nowhere” (ZeroHedge, Nov 18, 2013):

Since late 2012 Zero Hedge has been very critical of Japan’s Abenomics experiment, and its first and only real arrow: a massive increase in the monetary base thanks to the BOJ’s shock and awe QE announced in April, resulting in the collapse of the Yen (although in a not zero sum world this means ever louder complaints from US exporters such as Ford competing with Japanese companies), a soaring Nikkei (if only through May), and what was expected to be an economic renaissance as a result of a return to stable 2% inflation.We repeatedly warned that the only inflation anyone would see in Japan is in imported energy costs and food prices, which in turn would crush real disposable income especially once nominal wage deflation accelerated, which it has for the past 16 months straight. So far this has happened precisely as warned.

Another thing we warned about is that the result of the bank reserves tsunami – just like in the US – lending in Japan would grind to a halt, as everyone and their grandmother sought to invest the resulting excess deposits in risk markets as exemplified best by JPMorgan’s CIO division.

Read moreThe Failure Of Abenomics In One Chart … And When Even The Japanese Press Admits “Easing Is Not Working, And It’s Going Nowhere”