Just when you think that the devious and manipulating mainstream financial media has grown tired and bored in their efforts to toy with silver and gold prices, they surprise you once again! The precious metals had staged a significant rally back off of the lows seen a few weeks ago.

Suddenly this past week, they ran afoul of the totalitarian forces of the world’s major international investment banking cartels. These deep pocketed bandits combined their considerable powers to help sink silver and gold prices once more.

For the spot market week that ended Friday, May 17th, silver opened at $23.65 per ounce , and closed at $22.24 an ounce. This down $1.41 per ounce spot market close represented an almost six percent plunge for the week.

The financial media tyrants offered several clever explanations for this development. They claimed that the Fed is moving closer to exiting from QE3 and that the U.S. economic fundamentals are actually improving. These downright laughable theories are their latest basis for selling off silver and gold this past week.

Does the Fed Really Ever Plan to Exit from Its QE3 Purchases?

A respected piece in the Monday, May 13th edition of the Wall Street Journal encouraged the latest silver and gold bashing efforts. According to this article, the U.S. central bank, affectionately known as the Fed, is preparing to back off from its historically unprecedented money printing spree.

Even more shocking still, analysts told the mother of all mainstream financial media outlets CNBC that when the Fed quits printing money, it will not actually devastate the world’s financial and equity markets after all.

Financial Armageddon simply will not happen, even though many well known and respected economists and analysts such as Nouriel Roubini, Marc Faber, and Jim Sinclair have sagely predicted this end result. This is supposed to be because the Fed officials have carefully laid out their plans to taper off their enormous $85 billion per month buying of bonds pet project (better known as money printing in honest economist circles).

The Fed Will Keep Printing Until Unemployment Rate Hits 6.5%

The main basis for this argument is that the U.S. job market is somehow continuously and substantially improving. The Federal Reserve has flatly stated on several occasions that they will keep interest rates at historically artificially low levels of around zero percent until the unemployment rate declines to 6.5% (from its current manipulated level of 7.5%).

The money printing agenda will also only stop when a significant improvement in the labor market materializes as well. The global market strategist from J.P. Morgan Asset Management, Geoff Lewis, offered the investment banking giant’s official line that the QE from the U.S will end conclusively by the end of this year. They can not be serious!

Industrial Production Slowed Down Again

Reality gave a hard slap in the face to this argument when the government began to release its weekly economic data this past week. Industrial production in the U.S. dropped by a greater amount than analysts had been expecting for April. The Federal Reserve figures showed that industrial production declined by a significant .5%.

The Reuters polled economists had looked for this output to diminish by only .2% for April. The sub number on Factory production plunged by .4% when analysts had anticipated a .1% increase.

Another key sub number for Durable Goods Production nose dived by .6%. Most alarmingly for those fools who believe that the U.S. economy is rapidly and radically improving, factory capacity utilization sharply dropped from 78.3 percent in March down to 77.8 percent in April. This brought the reading down to 2.4 percentage points lower than its long term average.

Is The Objective U.S. Economic Data Really Improving?

The mainstream financial media and Wall Street attempted to shrug off the terrible industrial production and factory capacity utilization data as a one off data point. Next came the Thursday series of data that included a trifecta of weekly jobless claims, the Philly Fed index, and housing starts.

If the mainstream financial media’s theories are correct, then these data points all should have shown at least some improvement. How else could they justify selling off silver and gold unless the U.S. economy is growing significantly and the Fed is preparing to back out of its historically unprecedented money printing schemes?

Presto, the numbers magically appeared on your television screen. Just like that, all of the air deflated from the mainstream financial media’s balloon-like dream about a rapidly improving U.S. economic picture.

The weekly jobless claims spiked to 360,000 (versus consensus calls for only 330,000), the Philly Fed Index dropped sharply to -5.2 (versus consensus calls for a rise to 2.5), and housing starts cratered by an eye watering 16.5% for April too. You had not seen such a bad economic data hat trick in a long, long, long time!

How did the financial and commodities markets respond? In a sane world grounded in reality, you would expect stocks to potentially collapse on the news while the precious metals should shoot for the moon. Instead, the financial mainstream media managed to beat the usual and now very tired drums about the Fed continuing to support the markets with unlimited accommodative monetary policy.

They trotted out first one analyst and then another to tell you that the Fed money printing party is not over. Never mind that this was the complete opposite of what they had told you only a few days before!

This latest media blitz offensive caused the stock market to actually go up for the week, despite the abysmal underlying economic data! It gave the financial masters of the universe all the ammunition they needed to shoot down silver and gold into the spot markets’ close on Friday afternoon too.

Consider the interview and timely analysis of David Tepper, hedge fund titan who founded and still runs the multi billion dollar Appaloosa Management. He said that nobody should worry about the possibility that the Federal Reserve will taper off its enormous bond buying (money printing) program.

Over $400 Billion Seeking An Investment Home

He calculates that there is at least $400 billion within the U.S. economy that is currently seeking an investment home. Stocks will be one of those places, he knowingly promised you. Strangely enough, he was suspiciously silent about the precious metals.

But then again, consider his keynote quote in the interview before you run out and sell your silver and gold to purchase paper shares of stocks instead. “It’s a My Cousin Vinny Market.” When you hear the fantastically wealthy investment managers calling the equities markets a My Cousin Vinny Market, it is surely time to cash out your equities investments, take the money, buy silver and gold as fast as you can, and “run for the hills,” as Jim Rogers so famously said a few months ago.

The post The Great Financial Shell Game Continues appeared first on Building Wealth With Silver.

Silver managed to stay within a few pennies’ range from the beginning of the week to the end of spot markets that closed on Friday, May 10th. The white metal opened the spot markets at $23.94, having gapped down from the prior Friday’s close of $24.14. It finally closed at $23.90 by Friday afternoon.

Let us examine the latest comical lies of the mass media closely. This week they tried to sell you on the ideas that the global silver markets are massively oversupplied, that silver and gold are only benefitting from a dead cat bounce, and that equities and real estate will massively outperform the precious metals in the next few years.

Is the Global Silver Market Really Massively Oversupplied?

This week, financial media trotted out a brand new theory designed to kick silver to the curb. They were not merely content with the recent price plunge to as low as $22 and change per ounce. They wanted a better, more devious story to help knock the legs out from under the recent silver market comeback. To this effect, they created the idea that silver’s industrial demand is massively slowing down.

It was not just one minor analyst who came out with this withering salvo either. In a rare display of rival mainstream financial institution solidarity, all of the big guns were firing in unison this week. The American based Blackrock mega asset manager joined forces with other global heavyweights like Australia’s Macquarie Bank, Switzerland’s Credit Suisse, Great Britain’s HSBC, and France’s Society General. Together, they combined their considerable powers to spin the notion that silver’s industrial use has just taken a swan dive off of a high cliff.

Take a look at some of these assassinations of silver brought to you by the world’s biggest, wealthiest, brightest, and best known financial institutions. “The worldwide silver market is massively oversupplied by around 4,000 tons in 2013.” “Industrial demand that accounts for about half of silver usage has been severely dented by the slowdown of the solar panel industry. This represents fully ten percent of the worldwide silver demand,” said HSBC. “Investors have held on to silver as if they thought there would be limitless monetary expansion,” said Macquarie Bank. “Silver is resilient simply because it is lagging behind gold,” said BlackRock.

The award for best two pronged attack on both gold and silver together goes to the French at Society General. “Silver is plagued with over supply. The long term bear market that has begun in gold will sink silver prices too.” With only one little statement, the French investment bank managed to crucify both the major precious metals!

Now look more closely at a few of the grudging admissions (could it be secret, veiled admiration?) from the self proclaimed silver haters of the past week. “If monetary expansion does continue, it would benefit silver more as it would increase demand for the industrial applications for the white metal,” Macquarie Bank admitted.

“The somewhat negative exchange traded products data on silver still shows that investors are purchasing silver, and if this is true, it would just be a matter of time until the prices rise along with demand,” Credit Suisse wistfully opined in a research note. “Gold has received much better headlines these days and gained momentum that silver has yet to enjoy,” Black Rock let slip. The major analysts trip over themselves with their double speak in the same interviews and research notes!

What’s Rally Happening With Global Silver Supply, Prices, and Demand?

The silver to gold ratio has risen to a level of 61 ounces of silver per one ounce of gold. This abnormally high number has not been seen in nearly three years. The holdings of the Exchange Traded Products in silver are still in relatively good health with .7% of all ETP assets contained in silver. The sales of silver coins out of the U.S. mint just rose to their most impressive four month run in twenty-seven years at least.

As far as the argument about a declining number of industrial applications for silver today, this is utter nonsense as well. There are more than 10,000 individual industrial uses for silver. One of the most promising is in electric wiring.

Silver is hands’ down the world’s best electricity conductor. All of the national planners know that the U.S. is on the verge of needing to rebuild the entire national electric grid. Can you guess what metal has already been selected to be used in the wiring of the entire new electric grid?

If you just answered silver, then apparently you are smarter than five of the world’s best known investment banks!?

Have Gold and Silver Been the Unwitting Victims of a “Dead Cat Bounce?”

Even a dead cat bounces when you throw it off a tall building. So goes the Wall Street proverb that many of its analysts have been applying to the precious metals of late. This dramatic claim that silver and gold are merely reacting to a temporary oversold condition needs to be explored. While no one can tell you what the short term noise in silver and gold prices will amount to, we do know a few things with certainty.

Bullion Vault reported that the physical purchases of gold in April surged as private investors took advantage of the fire sale prices that followed the dramatic plunge. This online market for physical gold and silver represents over 47,000 unique investors who self direct their investments.

Their well known Gold Investor Index reached 58.6 for the month of April. (Any number that is higher than fifty means that there are more net buyers than sellers). This represents the highest level in more than sixteen months!

Their spokesman claimed that private investors have merely been waiting for the best price opportunity to acquire larger positions in the precious metals! The U.S. mint’s own sales’ records from last month support this argument. They sold over two tons of gold bullion coins in a single day!

Listen to Bullion Vault’s next statement very carefully. It explains much of what is going on in precious metals these days. It is not possible for the divergences between the self directed investors and the fast money speculators to be any more clear.

There is an ongoing disconnect between the retail private investors who can not acquire enough of the tangible gold and silver coins and bars for their own holdings and the slick, fast money funds that decided to sell out of their paper positions because they were not making enough money quickly enough.

In case the statistical evidence that concerns private investors is not enough to convince you, take a look at what the Chinese are doing (they are the real smart money, after all!) Keep in mind that this data is for the month of March, before the prices of gold and silver prices crashed.

Mainland China (not even including Hong Kong!) imported a staggering over 223.5 metric tons of gold!

The last time China got close to this amount was back in November, 2011. At that point, they imported a mere 102.6 metric tons of the yellow metal. Prices then were $1,922 an ounce… Does that sound to you like the Chinese feel that we are in the middle of a dead cat bounce in precious metals?

Will Equities and Real Estate Markets Really Outperform Precious Metals Long Term?

The best misdirection of the past week centered on the line that both equities and real estate are going to outperform precious metals over the near, medium, and even long term time frames. The so called smart money arrived at this conclusion by starting with the idea that the Dow is on its way to 20,000 in the coming year or several years!

Other analysts have been out pushing the concept that “real estate is back, baby!” They point to the double digits price increases in real estate nationally over the last year. This will only continue (and accelerate), they confidently trumpet. Some of these analysts even believe that real estate prices are going to grow at an exponential pace in the next year.

It sounds like a compelling argument at face value. The truth is that the Dow Jones has risen against all reasonable expectations and with no connection to economic reality whatsoever. Real Estate prices are also surprisingly higher.

Will it continue indefinitely though?

Consider the warning of well known independent analyst David Roche. He stated grimly that the bond markets are soon to crash as the world’s central banks cease their purchasing of debt. This will kick off a staggering financial crisis that will make the one from 2008 seem like proverbial child’s play.

He points out that when the debt burden of the world is re-priced according to market fundamentals, the real, ugly truth will be plain for all to see. This will happen once the yields of the world’s major sovereign bonds from Great Britain, The U.S., and Germany spike higher. This in turn will lead to a severe equities crash.

Roche is not alone in this assessment. Mark Faber of the Gloom, Boom, and Doom Report said recently that he expects things to get so bad for the rich people that their very lives are in danger. Nouriel Roubini, the major economist who correctly predicted the financial crisis back in 2006-2007, also projects a significant crash and burn in the U.S. stock markets.

Real estate’s long term prospects can also be questioned.

It is no longer headline news, but the foreclosure crisis is far from over! News flash – the foreclosure crisis has millions in its icy, death like grip still! It has been five years since the mortgage meltdown crushed the U.S. (and much of the global) economy. Yet, the truth is that 70,000 new foreclosure cases just entered the pipeline for April.

The Congressional Budget Office grimly tells you that as many as three million U.S. borrowers are so far behind in their housing payments that they are in danger of having the banks foreclose on their homes! Why do you not hear more about this in the mainstream financial media?

The whole exercise of pretending that the banks have changed their behavior to help homeowners is nothing more than a charade to convince you the working public that the foreclosure problem has been solved, according to Tampa foreclosure attorney Michael Wasylik.

Despite the handwriting on the wall for equities and real estate today, smart money would still have you believe that the prospects for silver and gold are dimming by the minute. They tell you that silver is simply over supplied now. They would have you believe that the industrial applications and growth for the white metal are declining by the day.

Here is the real truth for you in one succinct sentence, brought to you courtesy of Lear Silver. In only sixty years time, we have gone through 5,000 years worth of silver production. So how much silver is left out there anyway?

The post How Much Silver is Left Out There? appeared first on Building Wealth With Silver.

It takes a huge amount of nerve to be the mainstream media or an investment bank analyst these days. They have the audacity to stand on their pedestals and tell you that stocks are going “to infinity and beyond!”

Out of the other side of their mouths, most of these talking heads proceed to tell you that silver and gold are finished. Have you ever wondered how these smart people (who really do know better than this) get up every morning and look themselves in the mirror?

Despite the continued bashing by mainstream media and investment bank analysts, silver (and gold) held most of its ground for the week that ended May 3rd. In fact, if you look at silver prices versus where they closed spot markets on the previous Friday, April 26th, silver actually closed up for the week to date.

Silver closed spot markets the prior Friday the 26th at $24. They gapped up to open at $24.44 in spot markets at the beginning of the week. They finished still strong at $24.14 at this past Friday’s spot market close. This put silver down 1.2% during the Monday to Friday spot market week, but up .6% from the prior Friday spot market close to this past Friday’s spot market close.

Silver managed this heroic feat of holding its ground despite mass financial media claims that silver and gold are overvalued and can never reclaim their highs, that the Fed will wrap up QE3 in 2014, and that the U.S. job market is improving.

Will Silver and Gold Reach their Former Highs Again?

There are no shortage of analysts who glibly claim that silver and gold have seen their best days. Recall from last issue that Society General’s head of commodities stated that gold will trade at $1,100 or lower by the end of this year or early next year. Other analysts have taken pop shots at silver. They predicted that it will soon trade below $20 per ounce and perhaps as low as $16 for an ounce. The media sang this now tired tune at various points this past week.

What is the truth of these assassinations of the precious metals’ reputations? Nothing could be further from the truth! Gold and silver are actually either undervalued or at the worst case fairly valued. Consider this chart on the U.S. M1 money supply as backed by stated (not actually audited) U.S. gold reserves.

Even an elementary school student can clearly see what has been going on here!

The U.S. money supply has been radically increasing against the stated gold reserves since before 1990. In the glory days of the American empire, fully half of the U.S. dollar supply was backed up by stated gold reserves.

Fast forward to today, and you see a shockingly different picture.

We have dropped from over 50% of the money supply backed by gold to about 10%!

Yes, you read that correctly. This means that the U.S. dollar has been debased by an eye watering 80% in around twenty years. When someone tells you that precious metals like gold and silver have seen their best days, remember this chart.

Silver has similar charts that demonstrate to you why it is not overvalued at current levels. Direct your attention to this one below.

This is the price of silver from 2006 to date. The rising trend line that you see beneath it indicates the inflation adjusted price for silver. It should shock you!

Silver is not at all overvalued at today’s prices. To the contrary, it is fairly priced based on all the money that your “honest” government in Washington D.C. has been printing since the start of the “Great Recession.”

Where Are Silver Prices Heading From Here?

While we do not have a crystal ball here, we can safely point this out. The U.S. government continues to print $85 billion new U.S. dollars every single month. That represents over $1 trillion in new greenbacks per year! You can see where this will eventually take silver prices in the future…

Will The Fed Actually Wrap Up QE3 in 2014?

Speaking of the Fed and their runaway money printing spree, a Wall Street survey addressed the issue this past week. The so called wise men of Wall Street believe that the Fed will only keep QE3 going through this year and some of next year.

The CNBC April Fed Survey showed that 40 out of 46 respondents believe that the Federal Reserve will “buy assets” next year (the not so secret Fed code for “print more money”). A majority of the respondents also believe that the program will not completely end until July 2014.

Who are these mysterious respondents anyway? They are economists, fund managers, and strategists. You can call them the so called “smart money.” The problem is that many times, the “smart money” gang is either not so smart, or worse, they are outright lying to you.

Consider that from that same survey, only a third of respondents believe that gold prices will be higher next year, while the same number believe that gold prices will be lower next year. Obviously, smart money is not paying much attention to the cold, hard facts!

What the Fed said about its quantitative easing at their FOMC meeting this past week was quite clear. They will now allow themselves the flexibility to increase the amount of their QE3 purchases each month as necessary.

Some estimates say this could mean that Helicopter Ben Bernanke and his merry men band of outlaws will print an addition $10 billion greenbacks per month!

How can you possibly believe that the Fed will actually stop printing money next year when they are just now gearing up to print even more money per month? Once again, the truth remains stranger than fiction!

How About the Big Jobs Report and Improving US Economic Data?

By the end of the week, the government had released its much heralded and anticipated U.S. jobs report, along with a batch of important U.S. economic data. The unemployment rate ticked down a tenth of a percent to 7.5% (ooh…aah!).

Financial Media anchors called their brokers and the “smart money” (here we go again) raced out to buy any and all stocks that were not nailed down to the floor. At the same time, they were out trying to say “I told you so” about why the precious metals have no future. After all, if the economy is really on the mend, why would you be so foolish as to buy the “has been” relics silver and gold?

Are you ready for the truth about the jobs report and the other U.S. economic data that the government quietly released a little later? The only question is where to begin! Hours worked in the report showed a stark decline of .2 percent.

This translates to around a half million jobs lost!

The hours worked part of the report showed sobering declines in the manufacturing, defense, retail, construction, hospitality, and leisure areas of the economy (The categories that actually make up much of the job base in the entire U.S.).

The average work week in the U.S. declined to 34.4 hours. Last time we checked, a full time job offered you forty hours or more of work!

How about that drop in the unemployment rate? It sounds impressive! When you look further down the report to the true measure of unemployment (that President Bill Clinton steered away from so that the job numbers would look higher than they actually were), it tells a different story.

The real unemployment rate, per the government’s own numbers in the report, actually rose from 13.8% to 13.9%! (And as billionaire business mogul Donald Trump famously claimed a few months back, even that number is low…) Only six states actually have real jobless rates of less than 10%.

Financial mass media and the talking heads claim that the jobs report will get stronger and better as we enter the second half of the year. Yet, the Congressional Budget Office says that the rate of layoffs is anticipated to increase this summer!

In fact, they estimate that the mandated federal spending cuts will decrease employment rolls this year through end of September by around 750,000 more jobs! The truth is that the majority of the government agencies have only begun to enact their mandatory job cuts. This federal job cutting will increase all through the summer…

The Worst Economy in 83 Years!

Right, but is not the general economic data improving, you might wonder? Bespoke Investment Group pointed out this past week that the current annual GDP growth of less than 3 percent since 2005 makes this the worst economy in 83 years! We haven’t seen such anemic GDP growth over such an extended period since 1929. We all know what happened around that time— the Great Depression…

Finally, let’s objectively examine the other U.S. economic data. The government quietly slipped it through in the middle of the irrational stock market rally and precious metals sell off that happened Friday after the unemployment data.

The all important U.S. service sector growth (that represents more than 2/3 of the entire U.S. economy) dropped to its feeblest level in nine months! New U.S. factory goods orders plunged four percent in their largest drop in seven months! It is safe to say that U.S. economic data released Friday ranged from bad to abysmal…

Do not think for one moment that the smart money is really buying this overblown and tired U.S. stock market rally. Listen to the under-reported comments from a large hedge fund and money manager fund investment conference this last week…

In a reference to investing in stocks now, Wilbur Ross said “sometimes it is better to hide.” Harris claimed that all traditional asset classes are over valued. The enormous private equity group Apollo’s manager Leon Black quipped that this is a fabulous environment in stocks, so long as you are selling them…

If the real question that haunts the financial mass media talking heads’ minds is has the precious metals’ rally ended, then think about this. Silver and gold have a long term track record of 8,000 proven years of bull market history under their belts! We dare the global stock markets and their mainstream media prophets to try to compete with that…

The post The Fairy Tale of Mainstream Media and Investment Bank Analysts appeared first on Building Wealth With Silver.

No one was more confounded by silver and gold’s rapid recovery this past week than mainstream financial media. They had just killed and buried the white and yellow metals with unbridled glee. The ink on the media’s obituaries for the precious metals had not even dried. Suddenly, without fair warning, silver (and more especially gold) rallied back from the so called grave.

This is yet more evidence that you should pay no attention to the man behind the curtain. He is busy telling you that the end of the barbaric precious metals is at hand. Nothing could be further from the truth!

For the week that ended Friday, April 26th, silver recovered solidly. The white metal opened spot markets at $23.36, roared back to as high as $24.66, then closed the spot market week at the important $24.00 round number. This means that silver ended up by 2.7%. More impressively, it had been up by as much as 5.6% around mid to late week.

Mainstream Media Fails to Explain Recent Precious Metal Move

Naturally, the mainstream media attempted to explain this heroic comeback away. Their mixed up theories looked a little tired and worn out this past week. Still, they told you everything from “the precious metals have hit bottom – but just for now,” to “ETF selling will keep silver and gold prices down,” to “the worldwide central banks are basically tapering off their so called asset purchases” (better known as money printing in honest, intelligent circles).

In your heart and gut, you know that these ideas are utter and total nonsense. In this issue, you will learn why these mainstream media concepts are merely a smokescreen. Someone out there is busy running interference…

Have the Precious Metals Really Hit Bottom – But Just For Now?

If you listened to financial media this past week, then you had considerable reason to doubt the rally off of the crash bottom in silver and gold. More than one major analyst danced out on stage to say that this was only a temporary recovery rally.

George Gero of RBC indicated that we have made a temporary bottom… then asked if the smart money really believes that the lowest price of the last two years is worth them buying back the precious metals or not. At least that is a somewhat positive criticism of the precious metals rally!

Other analysts were not so kind in their assessment. One of the famed talking heads that correctly predicted gold’s retracement is Michael Haigh. The Society General Commodities Research Head believes that gold will soon drop under $1,300, and silver with it. He goes so far as to say that gold will crater to under $1,300 after the end of the year.

Will Gold Crater Below $1,300 By The End of 2013?

While anything is possible in life, let’s look at what’s wrong with this basic assessment. Michael Haigh did make a prescient call on a long overdue gold correction. The idea that silver and gold are finished is another long stretch altogether!

The Society General mouthpiece admitted later in the same interview that there are risks to his predictions for gold prices in the medium to long term. He said that his prognosis would be negated if QE continues, U.S. economic growth stalls, or the dollar weakens.

Do any of his caveats seem likely to you? Even a third grader knows that the U.S. economy is over the shoals and headed for the rocks now! Could QE become a never ending drug fix? A recent report showed that the unsettling and growing income disparity between the poor and the rich has worsened with the artificially inflated stock market recovery.

QE – A Never Ending Drug Fix?

QE is what propped the stock market up in the first place! So the Fed has yet to produce the effect that they desired. This is despite the fact that they have printed about three trillion new dollars (that will be here with us forever).

Add to this that the end of QE would mean higher real interest rates. It is a well known fact that the U.S. government could barely make its interest payments (on the current $16 trillion and change in debt) at five percent interest.

Imagine if the interest rates rose to a more historically typical level of 7-8%! QE to infinity is insured, the dollar will weaken, and the U.S. economy is on track for another recession possibly later this year or early next. The real question is whether the Fed will soon decide to print even more than their current $85 billion per month…

Will Future ETF Selling Keep Silver and Gold Prices Down?

The verbal attacks on precious metals just kept on coming all the while silver and gold rallied impressively. HSBC was quick to point out the data on SPDR Gold Shares’ GLD ETF over the past week and year so far. They said that last Tuesday, small investors cashed out 7.52 metric tons of gold from GLD, the world’s largest gold ETF.

Besides that, HSBC mentioned that 253.63 tons of gold had left the fund through share redemptions so far this year. Rather than state the data indicated that the selling should be coming to an end, the mainstream king of international banks said that the gold redemptions are not yet over. Selling by ETF’s is standing in the way of a more substantial and sustainable comeback, according to the world’s largest bank by balance sheet.

Does Physical Demand Come From Emerging Markets?

The all powerful HSBC is right about a few things in this assessment at least. Later in the interview, they indicated that silver and gold prices have bounced because of the physical demand for gold and silver coins and bullion. This demand is in fact sensitive to lower prices, as they claimed. Yet, HSBC says such physical demand of hard precious metals comes primarily from the “emerging markets,” more popularly known as China and India. Is this last claim, the crux of their argument that physical demand alone can not hold up the precious metals, really true?

The Perth Mint of Australia

Consider Exhibit one – the Perth Mint of Australia gave an interesting interview this past week (while HSBC was busy telling you that really only China and India are interested in silver and gold bullion and coins at the current prices).

Perth Mint’s Ron Currie, the Sales and Marketing Director, said that their business has doubled! They have not seen so much precious metals demand since the financial crisis erupted in full force in 2008. They are literally racing against the clock to acquire as many silver and gold blanks as they possibly can.

He claimed that it is the lower price in the precious metals from mid April that kicked it off. The one kilogram (2.2 pounds) silver coins and bars are especially hot. Last time we checked, Australia and its world class official national mint at Perth did not qualify as only “emerging market” interest in physical precious metals.

Queen Elizabeth’s 1,100 year old Royal Mint

Now direct your attention to Exhibit two – Her Majesty Queen Elizabeth’s 1,100 year old Royal Mint produces a new Lunar series of silver coins. These 2013 issue Silver Britannias are one ounce silver coins that they sell most commonly in rolls of twenty. They are not rare and have no significant additional numismatic or collectors’ value.

Yet, they are in hot demand by collectors all over the Western world. Here is the really shocking development in these eagerly sought out British silver coins. Merit Gold and Silver is selling these rolls of 20 silver coins for over $700 per roll.

This amounts to nearly $36 per one ounce silver coin, an almost $12 premium over silver spot prices!

Do not believe for one moment that real physical silver is actually selling at only $24 per ounce. The evidence is shockingly different. A real divergence between the prices of paper silver/gold, and real in your hands silver/gold, has developed as people demand that you “show them the money.” How come mainstream financial media is not pointing this out today?

Are Worldwide Central Banks Tapering Off their So Called Asset Purchases?

Most of the mainstream analysts out there have told you that the Fed is getting ready to stop its QE3 program. Goldman Sachs famously carries the standard of these particular talking heads. If it were true, it would help to explain why silver and gold prices can not continue to rise. The reality is surprisingly different to this consensus view.

Stock markets have been gaining around the world. Despite this, true improvements in the economic fundamentals have been strangely absent. U.S. GDP growth just missed its consensus target of 3% and came in at only 2.5%. Several of the regional economic indicators missed their lofty targets. Consumer confidence is pulling back. The fact is that the trend of the last three springs is once again materializing.

The spring recovery melts in the heat of summer and all of the so called economic progress burns to dust and ash. This makes it difficult, if not impossible, for Federal Reserve Chairman Big Ben Bernanke to stop printing money.

Brian Smedly is a lone voice crying out in the wilderness of the strategists of the significant investment houses. He alone of these talking heads is claiming that U.S. economic data continues to disappoint as the grind of the U.S.’ own version of austerity begins to bite hard.

There Will be More – Not Less – Federal Reserve Quantitative Easing

We call it “sequester” and “sequestration” in the States. Smedly alludes to the fact that unemployment is actually worsening. This is especially the case when you consider the all important participation in the labor force rate that recently set a new all time low. This disturbing fact, coupled with still “officially” tame inflation, indicates that there will be more – not less – Federal Reserve Quantitative Easing.

What about the other central banks of the world? Surely they are done with, or at least wrapping up, their quantitative easing. This is what mainstream financial media is telling you, after all. This past week, Central Banking Publications released a survey with shocking news. The central banks of Japan, Sweden, Israel, and dozens of other central banks claim that they have bought stocks in their own national companies!

What’s more, they are getting set to buy more of them…

They are propping up their own stock markets with printed money for crying out loud! Mainstream analysts have the nerve to tell you that central banks are getting ready to wrap up their money printing efforts despite this…

The thing that you have to keep in mind with all of these mainstream financial media theories is that precious metals are, always have been, and always will be real money. Silver and gold are not simply philosophies, as some analysts wish for you to believe. They are hard and tangible assets.

Most Americans are not aware of the word for silver in many of the languages of the world. This word for silver is “argent” and it translates literally to money. Does that sound like a mere philosophy to you?

The post Will Future ETF Selling Keep Silver and Gold Prices Down? appeared first on Building Wealth With Silver.

You will notice an exciting, new, and different approach to the silver market weekly update as of this week’s edition. In light of the recent mysterious and much talked about plunge in silver and gold, we found it necessary to come up with better and deeper explanations for silver market related events than what the mainstream media is offering.

From now on, you will not only read about what the mainstream media is telling you in this newsletter. You will also get the perspective of what is wrong with their analysis. After all, the mainstream media is always contradicting itself with its explanations for major moves in all of the financial markets, not just silver and gold.

Finally, you will now read more behind the scenes analysis and perspective here. This is in your best interests, as you probably came to this site in the first place to learn what is really happening with silver (and its big brother gold). And so without further ado…

Silver and Gold Take a Swan Dive Off of a High Cliff

To say that these are the times that try men’s souls would be an understatement. In the week that ended Friday, April 19th, you saw silver and gold take a swan dive off of a high cliff. This happened despite the fact that the United States was successfully attacked by the blood thirsty terrorists for the first time since 9/11.

According to our traditional understanding of the precious metals as safe haven assets, the opposite should have occurred with precious metals prices. On and in the days immediately following 9/11, gold itself rallied around 25%!

Silver Price Chart – Week April 12 – April 19 2013

In the spot market Friday, silver managed to rally to some kind of a comeback level after the past weeks’ and days’ eye watering declines. The white metal opened Monday, April 15th spot markets at $23.35. This represented an incredible 10.3% gap down from the prior Friday spot markets close of $26.02.

The Almost Unbelievable Silver Roller-Coaster Ride

Silver reached as low as $22.24 in spot markets this past week. It rallied as high as $23.86. By the time the dust had settled in spot markets Friday at the close, the white metal sat at $23.25. The almost unbelievable roller-coaster ride saw silver in a spot market range of $1.62 during the spot market week. This happened after it had already opened down by nearly three dollars per ounce from the prior Friday spot market close.

Mainstream media had its own basket of theories to help explain the collapse in precious metals prices. These ranged from “Cyprus is selling all of its gold – run for the hills” to “the secular bull market in silver and gold is over” to “no one honestly knows what has happened to the prices of silver and gold or why they tanked.” The truth is that these theories are completely off base. Sadly enough, they are partly intended to deceive you and to separate you from your precious metals holdings.

Does it Matter If Poor Cyprus Liquidates its Entire Gold Holdings?

Investment bank Nomura was quick to point out that there are few superlatives that are strong enough to describe the massive move down in the precious metals this past week.

Among the many theories that the mainstream media threw down to help explain it was that Cyprus is selling its gold. The idea is supposed to be that when Cyprus regretfully liquidates its 40 tons of gold holdings, this will panic and spook the gold and silver market.

Beyond that, it could mean that the big bad IMF, EU, and European Central Bank will force other more serious (financially troubled) countries like Italy and Spain to sell their more considerable gold reserves. Market and credit analyst Egan Jones’ very own Sean Egan claimed that even a little selling by central banks can rock the gold market.

The Cyprus Theory Has Not Yet Begun to be Proven

Sean Egan was right about one claim anyway. The Cyprus theory has not yet begun to be proven. The financially wrecked Cypriot nation is still debating whether they will actually sell even a single ounce of their precious gold reserves, their only national treasure.

If they do, 40 tons will not amount to much in a world where central banks buy and sell literally thousands of tons of gold per year. As for the possibility that the evil empire of the IMF, EU, and ECB will be able to force the fiercely proud, independent, and still fully sovereign nations of Spain and (G-8 member) Italy to sell their treasured gold reserves, you can be the judge of that for yourself.

This theory about why the precious metals prices plummeted just does not hold much water, if any at all.

Did Precious Metals ETF’s Actually Sink Silver and Gold Prices?

Mainstream financial media also reported this past week that a new side of the silver and gold markets’ trade reared its ugly head in the recent crash in precious metal prices. Exchange traded funds, or ETF’s, have allowed the “working man” people of the world to trade silver and gold like they would a stock.

You can do this yourself when you acquire shares of SLV or GLD. These are the two name brand, and incidentally most popular, ETF’s for the silver and gold markets.

Financial media’s next theory on the metals’ markets crash boiled down to the fact that the average working class stiff got scared when silver and gold prices started to tank. These are smaller investors who can not afford to watch their 401K’s or IRA’s decline and sit idly by.

They lack the will and resolve of institutional investors, like university endowment funds, pension plans, and mutual funds. They certainly do not have the stamina and stay in power of  the all powerful (wildly reckless money printing) central banks.

Over 150 Million GLD Shares Were Traded!

To give you an idea of how volatile the trading in the precious metals’ ETF’s actually were, the media held up the statistic on GLD during the two market days of panic. Over 150 million shares were traded.

This represented more than the combined volume in the 16 days prior to the two day sell-off. They call this panic selling on Wall Street. Greenberg Capital’s own David Greenberg suggested that the effects of ETF’s on the precious metals market during a time of panic selling have never before been tested.

This sounds like a reasonable theory at first glance. It is true that when there are more buyers than sellers in a market, prices will inevitably decline. But let’s examine the actual behavior of the small players in silver and gold recently.

Physical holdings of silver were actually on the rise during the panic sell off!

Precious metals analysts and coin dealers reported that there was an intense amount of interest in silver Eagles last week. Even when the price plummeted during the crash, they saw a great deal of orders. The U.S. mint had already sold over 2.22 million ounces for the first half of the month of April.

On a full month basis, that would put them over the 3.37 million ounces sold in February and the 3.36 million they sold in March. David Morgan, Silver-Investor.com analyst, reported that the backlog orders on silver coin products are two to three months long.

That does not sound like there is a huge amount of real silver being sold by the smaller players!

Even as the price of paper market silver declined, the price of physical, tangible silver coins held up. Late Monday at the peak of the crash in silver prices, one ounce Silver Eagles were selling for $4 more than the official price of silver. You guessed it – silver prices for actual silver bullion and coins that you can hold, see, and spend have not really declined at all.

The World is Dumping Silver and Gold Is Nonsense

As far as the nonsense notion that everyone in the world is dumping silver and gold, think again. Physical demand for gold and silver is raging in Asia since the precious metals went on sale. Reports out of the continent last week showed that both Indian and Chinese citizens literally snatched gold and silver off of the shelves. There were stories of retail stores in Asia that literally ran out of gold coins and bullion to sell…

Was Global Deflation the Culprit for Falling Silver and Gold Prices?

Some analysts this past week argued that global deflation is in the cards. If this is true, then the prices of real assets would be declining. This argument attempts to explain how silver and gold prices can be dropping even as massive amounts of worthless fiat money are printed by the central banks of the U.S., Japan, Great Britain, and now even the European Union’s ECB.

Could it be that the worst possible nightmares of Central Banks the world over are coming to pass? Will prices of hard assets like precious metals drop precipitously? If they do, this would cause the debt loads that ruinously indebted countries such as the U.S., Japan, Italy, and Greece carry to implode under their own weight. This is precisely what makes the notion of deflation so much more ridiculous than inflation, or higher prices of hard assets, goods and services.

Do not think for one minute that the all powerful central banks of the world are going to let this happen. They can print and have already printed practically limitless mountains of fiat currencies to stop deflation from ever occurring.

Just ask Federal Reserve Chairman “Helicopter” Ben Bernanke how long it took him to more than triple the supply of U.S. dollars. He once famously quipped that if he had a big enough helicopter and pile of paper dollars on hand, he could save the nation from economic collapse.

He would simply fly around the U.S. in the chopper and throw out money to the grateful populous below. In practice, this kind of attitude would never allow deflation to occur. Silver and gold prices are not declining over it.

Has the Secular Bull Market in Silver and Gold At Last Come to An End?

Now at last you come to the all important question that the mass media put to us all this past week. Gold has plunged over twenty-five percent from the bull market peak of a few years ago at $1,890 and change.

Silver has tanked from its bull market high of nearly $50 per ounce to $23.25. This means that silver is now down over fifty percent in the last few years. You might forgive the talking heads for asking if silver and gold’s best days are behind them. So what really caused the precipitous decline in silver and gold this past week?

Silver Price Chart – April 2008 – April 2013

The best answer to this question comes from legendary commodities’ investor Jim Rogers. The much loved yet slightly eccentric billionaire based in Singapore had this to say about the decline in gold and silver prices.

Precious metals are long overdue for a correction.

In fact, Rogers has been looking for a significant correction in the complex for years now. This does not mean he thinks that the bull market in gold and silver is over. Quite the opposite is true if you listen to the man’s interview.

Jim Rogers coyly ended the question and answer session with these astute remarks. He is buying more precious metals on the pullbacks. If gold and silver pull back even further, then he will buy even more of them. Most famously of all, the legendary commodities guru said this – precious metals are not something that Jim Rogers sells. They are something he leaves to his children.

The post The Almost Unbelievable Silver Roller-Coaster Ride appeared first on Building Wealth With Silver.

Silver embarked on a wild roller coaster ride over the week that ended Friday, April 12th. The white metal opened in spot markets at $27.21. It then rallied as high as $27.88. In the second half of the week, it plunged to close just over the critical line in the sand of $26 per ounce, at $26.02.

Silver gyrated wildly as North Korea earned a dubious honor for trouble, global Central Bankers pledged continued Quantitative Easing, silver speculators turned net short, Goldman Sachs recommended a new gold short, and the EU forced Cyprus to sell it’s 40 tons of gold.

Citibank Calls North Korea the Greatest Geopolitical Threat and Risk

After years where Iran represented the greatest threat to world peace and market stability, there is a new arch villain in the world. Citigroup Global Markets’ CitiResearch named North Korea as the greatest geopolitical risk for the year 2013. The threats from North Korea continued unabated this past week.

U.S. defense officials admitted that they are highly confident North Korea will fire off one or more medium range Musadan missiles to further inflame the situation. The U.S. Pacific Command commander testified to congress this past week that he could not think of a time where tensions were higher in the Korean Peninsula since the Korean War ended in 1953.

Besides this, there is a rising chance that North Korea will engage in more disruptive cyber attacks on U.S. and South Korean websites. It is an understatement that world leaders are showing growing alarm at the very real possibilities of an armed conflict in the Korean peninsula. In the early part of the week, this news was bullish and supportive for silver and the precious metals.

Central Bankers Pledge Continued QE and Silver Rallies Hard

At the beginning of the week, silver and gold found massive support from central bank actions and comments. Ben Bernanke came out swinging in his speech. He reiterated that the economy has significant room to improve.

Chinese government inflation data demonstrated that China’s central bank has more room to ease monetary policy. Rumors are flying that the European Central Bank will lower interest rates soon. To top it off, the Bank of Japan continued its incredible devaluation of the Japanese Yen.

Silver rallied as high as $27.88 and was up 2.7% at one point. Anyone who believes that central banks will soon back off their slap happy money printing policies is drinking the Kool-Aid. The race to the bottom that seemingly every major currency block is running was bullish for both gold and silver in the first half of the week.

Silver Speculators Turn Net Short

By mid week, the tide began to turn against silver and the precious metals. The weekly commitment of traders report (brought to you courtesy of the Commodity Futures Trading Commission) contained bad news for the white metal.

The big speculators’ category changed from net long to net short silver contracts for the first time ever in the disaggregated report that dates back to September of 2009. In the legacy report, silver’s net long position declined to its lowest level since the beginning of 2007. This represented a seismic shift in the speculators’ attitude towards silver. Prices began a sharp decline on the news.

Goldman Sachs’ New Gold Short Becomes A Self Fulfilling Prophecy

Silver is often a hostage to its big brother gold. This past week proved to be no exception. Goldman Sachs came out with both barrels of their smoking gun blazing. They announced to the world that they would short gold after having been long the yellow metal for some time.

George Gero of RBC then said that the open interest in gold had declined to the tune of around 20 percent. He claimed that all of the major asset managers of supposedly smart money had already positioned out of gold and into U.S. stocks. Gold began to plunge on these calls, and it took silver with it.

The Evil Empire Forces Cyprus to Sell Its 40 Tons of Gold

By Friday, gold had officially reached bear market territory. This means that the yellow metal had declined 20 percent from its old price highs of $1,891.90 per ounce set back in August of 2011. The final blow that took gold and silver to the mat Friday came out of Cyprus.

Speculation had abounded that Cyprus would be forced to sell its 40 tons of gold to help cover the costs of their banks’ bailout. The EU confirmed this action later in the day. Forty tons of gold is very small in a world where thousands of tons of gold are traded by central banks these days. The problem arose as analysts and speculators came to the conclusion on Friday that other fiscally troubled EU countries such as Spain, Italy, Greece, and Portugal may also be forced to sell their gold reserves.

That has yet to happen. The fear inspired the necessary terror to tip gold below its long term bull market support line in the $1,520′s per ounce. From there, gold and silver continued to fall almost to the spot market close Friday afternoon.

When the dust settled at the close, silver had declined close to five percent for the volatile week. The only silver lining in the end of week silver price action lay in the fact that the white metal managed to close above the critical $26 bull market support line.

Take Away on Silver Markets

No one can argue that silver has bled out over the past few weeks. Weak longs are beginning to run for the hills. The fundamental facts on the ground for the precious metals remain the same. As Kingsview Management’s Managing Director Philip Silverman astutely pointed out, central banks purchased more gold in 2012 than they have for the past almost fifty years.

You would not fight the Federal Reserve and its massive efforts to artificially inflate the stock market. You also would be a fool to fight central banks like those of China, Russia, India, South Korea, and Switzerland. In the end, the global central banks always have far deeper pockets than even the so-called smart money can possibly imagine.

The post The Evil Empire Forces Cyprus to Sell Its 40 Tons of Gold appeared first on Building Wealth With Silver.

Silver again took a significant price hit in the week that ended Friday, April 5th. The white metal gapped down to $27.93 on the spot market open Monday. It declined 2.1% to $27.33 by the spot market close Friday.

Safe haven silver demonstrated that it is still very much a prisoner of its industrial use side. It declined in a week that saw dour news from Europe weigh, North Korea continue its brinksmanship, India and China begin to dip buy in precious metals, and the much anticipated U.S. jobs report wildly disappoint markets.

Dour News Out of Europe Weighs on Silver’s Industrial Use Side

The Cyprus crisis may be resolved for the moment, but the body blows from Europe just keep on coming. On Tuesday, the Euro Zone achieved a new dismal milestone. The numbers of unemployed workers in Europe reached a new high.

The unemployment rate remained at an eye watering 12% for February. At the same time, data from the manufacturing segment worsened. The PMI for European manufacturing declined to 46.8 from 47.9. This means that manufacturing weakness has accelerated from the previous month.

You might expect this to be bullish news for the precious metals. If silver were merely a safe haven metal like gold, it might be. UBS’ London based analyst Joni Teves astutely remarked that silver as an industrial use metal requires a far greater economic recovery than what the world economy has demonstrated so far.

Silver prices will struggle to gain ground until the safe haven bid picks up more or the world economy proves the so called stronger economic growth prospects are real.

North Korea’s Latest Nuclear Threats Rattle the Marketplace

The volatile North Korean situation has become almost as constant a news byte as the European Union sovereign debt crisis. This past week, North Korea amped up their weeks old threats still further. Now they are not just vaguely waving around their nuclear weapons. To outdo themselves, they authorized nuclear strikes against American cities and targets. Their fearless leader Kim Jong Ang also restarted work at his old plutonium reactor.

The U.S. indicated it takes the man seriously. Secretary of Defense Chuck Hagel stated that North Korea is a “real and clear” danger to the U.S., its interests, and allies. To that effect, he dispatched an Israeli-styled missile defense system to protect the strategic American base at Guam in the Pacific. The stock market plunged over a hundred points at one moment in response to Hagel’s live televised comments. Silver and gold recovered off of their low points of the week on the news as well.

Indian and Chinese Dip Buying in Precious Metals Appears

Silver’s slide this past week could have been substantially worse. India and China helped to limit the losses and even turn big brother gold radically around. The two nations began buying precious metals aggressively on the dips.

While ETF holdings in gold have declined in March from 50.1 metric tons, the silver ETF holdings managed to rise 82.1 tons up to 19,952.9 tons of total holdings. Despite the price declines that silver has suffered from during the past two consecutive weeks, this is a bullish indicator for future silver prices.

U.S. Job Report Wildly Misses Expectations and Precious Metals Rally Hard

The biggest economic news item of the week revolved around the much heralded U.S. jobs report. Prior to the release of the job numbers, analysts had begun to believe that the Federal Reserve might have to dial back its money printing schemes and policies.

This idea was utterly crushed Friday when the non farm payrolls report showed a paltry 88,000 in new jobs added while some watchers had expected 200,000 new jobs. To make matters worse, the six month average in the report showed a drop from 197,000 new jobs to 188,000 jobs added. The old adage “one report does not a trend make” was shot down by this six month average deterioration.

It is true that the unemployment rate declined to 7.6%. Pay no attention to the man hiding behind the curtain. This was also the result of bad economic trends. The overall participation rate in the U.S. job market has reached new lows yet again.

This skews the unemployment rate dramatically. Donald Trump put it best over the past few months. He pointed out that the overlooked and under-reported U-5 unemployment report numbers show actual unemployment to be over 14% in the U.S. Now that is starting to sound like Greece and Spain.

The quotes on just how bad this job report is proved to be noteworthy. Investment Bank Nomura states that the jobless rate decline is for “wrong reasons” with discouraged workers out of the job search pool. Vecchio of DailyFX says the job market is “barely treading water.”

Brown Brothers Harriman’s Chandler claimed that the report is “shockingly disappointing.” He went on to say that the old pattern of prior years is back. The job market attempts to improve. Reality then sets back in with the economy actually not on the mend. Instead, it is on Federal Reserve induced life support.

The conclusion you should take away from this pitiful unemployment report is that the Fed is nowhere near ending its wild money printing spree that has caused them to more than triple the U.S. money supply. They will continue to print $85 billion in new money per month ad infinitum.

This report may have hurt the industrial use side of silver in the short run. In the medium to longer term, it shows you that safe haven demands like silver and gold will only grow in value as the federal government continues to debase the U.S. dollar until the bitter end.

Take Away on Silver Markets

An interesting development surfaced this past week. Silver prices dropped on the futures market. At the same time, the U.S. mint released data on silver sales. The year over year U.S. silver coin sales are up a staggering 32%.  They sold 3.36 million ounces strong of silver coins. This means that physical holdings of silver are on the rise in both ETF’s and actual personally held bullion and coins.

One day soon, the paper silver market speculators who dominate the prices in the short run will see that the jig is up. When that day comes, heaven help the people who are holding short positions of silver and gold.

The post Dour Europe News Weighs on Silver’s Industrial Use Side appeared first on Building Wealth With Silver.

Silver had offered several weeks of stability and calm amid the world economic and geopolitical storm, but this past week was not its best performance lately. The white metal opened at $28.84, closed at $28.30, and dropped 1.9% for the spot market week that ended Good Friday, March 29th.

While the fundamental news remains wildly supportive of silver and gold, the precious metals continue to trade off technical levels and remain range bound. Silver gyrated within a dollar per ounce range this week of Easter as Cyprus’ banks finally reopened.

Investors and depositors of the world learned the meaning of the new concept of “bail in’s”. A new Swiss gold initiative demonstrating that safe haven buying by central banks is still in fashion. The world waited anxiously for the Japanese to begin massive new asset purchases with freshly printed Yen, and Italy’s political gridlock continued to threaten the world economy at large.

Cyprus Banks Reopen With Armed British Guards and Cypriot Police

After the wild week in bailout nation Cyprus that was littered with the political wreckage demonstrated between Nicosia, Cyprus and Brussels, the EU, markets were nervously watching to see how things might play out when Cyprus re-opened its banks.

Analysts had feared carnage and blood in the streets as bank branches manned their entrances with not only Cypriot police, but also armed British security guards. While world media descended on the central square in sunny, cafe lined Nicosia and expected violent Greek styled protests, what actually transpired was surprising and anti-climactic.

Instead of “runs on the banks,” what you saw were a few dozen people standing patiently in lines, waiting for their turn to withdraw their money. What’s more, an actual “run on the banks” never occurred. While it is may be a little premature to call the all’s clear signal for Cyprus, silver was disappointed with the apparently calm resolution to what promised at one point to set off a domino effect event that could have potentially overthrown the banking systems of fellow EU behemoths Spain and Italy.

New Reality of “Bail In’s” in the EU Makes Silver and Gold Must Have Assets

The case is far from closed on the far ranging repercussions of what just went down in Cyprus though. The new reality on the ground is that the IMF, EU, and European Central Bank have now sanctioned, and even given their blessing, to countries nationalizing deposits in excess of 100,000 Euros from banks in order to help contribute to bail outs of financially troubled nations.

The EU calls these so-called “contributions” (that amount to looting the bank accounts of ordinary, hard working people) “Bail In’s. Since Jeroen Dijsselbloem, the Dutch Finance Minister, let slip that the EU is considering this as part of the new solution to sovereign debt crises going forward, you can be sure that the “bail in’s” will return to haunt troubled depositors in other countries in the near future.

Dennis Gartman, famed author of the Gartman Letter, put it best when he alluded to the chills that Europeans should all be feeling now as they come to grips with the fact that their Euros are now very seriously at risk and the banking system in the cultured continent is under attack by governments and intergovernmental agencies who are desperate for creative financial solutions.

There is even a draft law under consideration in the EU Parliament that would make these bail in’s completely legitimate in a banking crisis or emergency. You should be asking yourself whether or not this frightening new feature is coming soon to a banking institution near you.

Silver may have been down prematurely on the relief over the Cyprus situation not blowing up, but longer term, the white metal can only go up as these banking seizures become more commonplace. You can bet your bottom Euro that they will.

New Swiss Gold Initiative Confirms that Central Banks Will Continue to Buy Precious Metals

An analyst Joni Teves at UBS reported this past week that there is a new gold initiative that the Swiss People’s Party has formally launched in the safe haven stalwart of Switzerland. If citizens do go ahead and vote this resolution into law, then the revered Swiss National Bank will be required to keep a minimum of 20% of all its considerable assets in gold bullion.

At present, the Swiss keep slightly more than 10% of their assets in gold reserves. They would have make purchases of a full 1,000 metric tons to increase the ratio to 20%.

World Waits for Japanese to Begin New Asset Purchases as Money Printing Continues

While the Japanese government and its central bank have been talking about asset purchases, they have yet to carry them out in practice. In fact, the world markets expected them to take place beginning in 2014.

This week, Reuters released a bullish bulletin that the BOJ will begin immediately to purchase assets with no end date to be announced. They may also begin buying longer dated bonds when they meet to review their interest rates this coming week. Both of these actions are bullish for silver and gold, and may be reflected in silver price movements this first week of April.

Italy’s Political/Economic Troubles Threaten the World Markets and Silver Takes Notice

Italy has been under the radar for a while now since they held their recent election. The reality that things are not well in Italy began to settle in after the voting as investors realized that Italy will be a long time getting its act together well enough politically to form a stable government.

Italian borrowing costs jumped to a five month high when the market comprehended that the political drama in Italy will go on indefinitely. This is both bearish and bullish for silver, as Italy is among the G-8 economies and a prolonged crisis here is bad for economic growth prospects, which hurts the industrial use side of silver. At the same time, the uncertainty that surrounds the whole political mess in Italy gives rise to the safe haven bid side of silver.

Take Away on Silver Markets

The key theme to remember for silver prospects can be summed up in an interview that legendary currency and commodities investor Jim Rogers gave on CNBC this past week. When Rogers was asked what he thought about the state of the investment world, he opined that if you are an investor, then you should run for the hills because of the terrible Cyprus bank accounts raids that the IMF and EU mercilessly carried out.

He further warned everyone who thinks that they have a simple bank account anywhere in the world to take note. Silver markets are watching, and in due time, they will certainly take note of the continuous banking instability, “bail in’s,” Swiss Central Bank activities, and Japanese money printing. It is only a matter of time now.

The post Silver Market Update – Week Ending March 2013 appeared first on Building Wealth With Silver.

Silver closed at nearly even for the week in what proved to be another volatile and rollicking time period filled with eventful fundamental news for the markets.

The white metal opened at $28.77 per ounce, and despite some wide swings up and down closed at $28.74 in spot markets on Friday, March 22nd. Precious metals again found themselves in vogue as safe haven assets, yet were still restrained by headwinds to the industrial use side of their nature.

Silver held steady as a ship through the storm by the end of the week in response to the unfolding saga of Cyprus, a Federal Reserve two day meeting, new North Korean threats to deploy nuclear missiles against the United States’ interests, and fresh data from Europe showing the EU economic zone again sliding towards recessionary territory.

Cyprus Bailout Roils Markets and Encourages Silver Safe Haven Demand

Undoubtedly the biggest story of the week when you turned on the financial news channels centered on a relatively small Mediterranean island nation Cyprus. For decades, this haven of prosperity nicknamed the sunny isle for its over 300 days a year of sunshine per year grew and prospered in what was called the modern economic miracle of the Republic of Cyprus. Unknown to most people, the real engine of their growth and success lay in their enormous offshore banking industry.

In less than a week, the merely troubled banking industry in a country whose GDP is less than that of Wichita, Kansas grew to be the proverbial 800 pound gorilla in the world’s living room. How could this happen? Russian money had been invested in Cypriot banks as a convenient place to hide and launder it, and the Russians lived in Cypriot towns in such numbers that there are high streets filled with Russian luxury goods stores that sell everything from exotic Russian foods to fur hats and coats. The banking industry grew to be 8 times the entire annual economic output of Cyprus as a result.

It sounds good so far, especially if you are among the 1 million inhabitants of Cyprus. The problem came as the three largest banks in Cyprus were encouraged to invest their own money, and that of their depositors, in Greek Sovereign Debt bonds a few years ago when the ECB encouraged European banks to help out their troubled Greek neighbor.

If you know the story of what happened to Greek bondholders who were all made to take “haircuts” on the value of these bonds, then you can guess the rest of the sordid tale. Cypriot banks lost their shirts, and those of their deposit holders along the way. By last Monday, all of the banks in Cyprus had been closed down to prevent wholesale capital flight and full scale runs on the banks.

Despite these efforts, a slow motion run on Cypriot banks occurred through ATM machine withdrawals. The so called gang of three, the “Troika” of the European Union, The European Central Bank, and the International Monetary Fund, bore much of the blame as they not given Cyprus a concrete answer on their request for a bailout.

Now they offered harsh terms that caused the Cypriot parliament and governing party to wring its hands in anguish. All of this was highly supportive of precious metals markets as investors feared that the contagion in Cypriot streets and ATM lines would spread to troubled bailout and near bailout status nations including Ireland, Portugal, Spain, and Italy.

The situation is finally being brought to a climactic conclusion which looks like the Russian depositors and investors will bear the lion’s share of the losses. Meanwhile, Cyprus’ banking industry lies in smoldering ruins.

Needless to say, if you were nostalgic for the EU sovereign debt crisis, it is back once again. The wild uncertainty in the Eurozone all this past week, and maybe for the immediate future, is tragic for the people of Cyprus but good for silver prices.

Federal Reserve Meeting Offers More of the Same

In other news this week, the Fed’s two day FOMC conference may have been overshadowed by the news out of Cyprus and Brussels, the EU’s headquarters, but it happened all the same. The meeting kept the status quo in place for money printing to infinity to continue until further notice.

Ben Bernanke and company will not be raising the interest rates until at least 2015 as they had said previously (though no one who does the math on the interest payments on the over $16 trillion in national debt is sure how they will ever be able to raise them!). This fact of life continues to support silver prices and all of the precious metals’ prices.

North Korean Threatens to Use Nukes On US Bases in Japan

Nothing supports the silver and the other safe haven metals so well as a good nuclear threat. North Korea had opened this Pandora’s Box last week when they threatened to destroy Washington D.C. in a reign of atomic fire. This week, they tried to outdo themselves when they claimed that they might launch a nuclear strike against American bases in Japan.

They certainly have the proven nukes to carry out such a threat, and their newest target is much closer to home and hence easier for them to actually hit. This latest geo-political hotspot bears watching as additional tensions that arise between America and South Korea versus North Korea could conceivably cause gold and silver prices to skyrocket.

European Purchasing Managers Index Drops to Recession Levels Again

One thing holding silver back from vaulting over the $30 price bench mark lately has to do with the fact that the so called economic recovery around the world continues to demonstrate that it is unproven and unfounded.

This last week, the EU showed that the worlds’ largest economic block is in fact not really getting better, but quite probably is getting worse. Thursday saw the Markit Data Euro Zone Composite Purchasing Managers’ Index drop to 46.5 for March, down from February’s 47.9.

Any number under the all important 50.0 mark means that there is economic contraction taking place. Friday, EU powerhouse and paymaster Germany’s business confidence showed an unexpected decline from February’s 107.4 to 106.7 in March. The EU stymied in recession is bad news for silver’s industrial applications facet of its split personality (with safe haven buying being the other side).

Take Away on Silver Markets

TDS Securities summed the big story of the week up very well when they indicated that precious metals will become an appealing alternative investment as individuals around the world begin to worry about how safe their deposits are.

With the U.S. in unprecedented debt (the largest debt in the history of the world in outright terms) and printing money at a pace that would make long gone money printing regimes dizzy, and Europe still on the ropes battling its own worst enemy of its past spending and borrowing habits, individuals and investors the world over are taking notice and looking for other places to go park their money.

Silver is one of those favored safe destinations, as it derives its spending power from its rarity, historical precedent, and innate value, and not from any corrupt government’s decree.

The post Cyprus Bailout Encourages Silver Safe Haven Demand appeared first on Building Wealth With Silver.

Silver posted another consolidating week with a modest drop for the week that ended Friday, March 15th. The white metal managed to decline from $28.87 spot market open on Monday to $28.79 by spot market weekly close Friday afternoon.

This represented a drop of less than .3% on the week. Silver continues to be supported by fundamental news such as an HSBC report that cited higher silver demand, a new silver ETF, the return of risk aversion, and new record levels of industrial demand for silver that economists project for the next several years. This week, technical buying also returned to help silver hold its own.

Gold Buy-Stops Trigger and Silver Rises Sympathetically

Silver has long been a hostage of its big brother gold, but this week, the hostage situation turned far more positive. Gold ripped out of its medium term trading range of $1,560 to $1,585 and threatened a close even over $1,600 by the end of the week. Silver responded sympathetically, fighting off sellers during the week as gold buy stop orders triggered and weak short hands were washed in blood.

HSBC Cites Recently Strong All Around Silver Demand

One advantage that silver has always clung too over gold is that it is quite possibly the world’s most useful metal. There are over 10,000 industrial and commercial applications for silver, which puts gold to shame.

HSBC updated investors and analysts on silver applications this week. China massively uses silver in its global export business that stems from semiconductors and computers. Electronics and electrical industries employ the lion’s share of silver usage around the world. In fact, over half of global silver demand is a direct result of industrial and commercial applications.

If you turn to the investment and safe haven demand front, HSBC reminds that physical silver coin demand continues unabated, with the U.S. mint having set a new sales record just last month.

New Silver ETF Fund Allows Silver Bullion Redemption

Well respected investment products purveyor Van Eck Global has just filed paper work to start up new silver and gold ETF’s. It is always bullish for the precious metals when new ETF’s are launched to bring in additional investors to the fold.

This particular new fund is unique in the U.S., as both will allow silver and gold investors in the shares to redeem their shares for physical silver and gold bullion or coins when they decide to cash out. This cuts the uncomfortable, direct link bond between American precious metals ETF’s and greenbacks once and for all. Silver prices are well supported by this new development that is sure to significantly increase the demand for the physical metal over the medium term.

Risk Aversion Returns With A Vengeance to Support Silver and Gold

If you had missed the risk aversion trade that typically support silver and gold so nicely, then you were relieved to see it reappear this past week. Between Italy’s recent election gridlock and woes, downbeat recent data emerging from the EU economies, and Italian and British sovereign debt rating downgrades, investors are once again running a bit scared.

Add to this the still developing story about Cyprus’ bailout terms that look likely to seize ten percent of all depositors’ money within the troubled island nation’s banks, and you have a recipe for steadily grinding higher silver and gold prices.

Industrial Demand for Silver Reaches New Highs

You saw earlier that the world’s largest international bank (by virtue of its over $3 trillion balance sheet) HSBC has noted that silver is receiving far greater attention than in the past. Now the news that silver is growing in economic input importance is official.

The Silver Institute’s Executive Director Michael DiRienzo pointed out this past week that the demand for silver industrial fabrication has risen to over 483 million troy ounces of the white metal for the years ranging from 2012 to 2014. This represents an impressive 53% increase over the annual silver demand recorded from 1992 to 2001.

This is because silver is truly finding uses in applications that include electronics, medicine, health, solar power, communications, superconductors, batteries, computers, silverware, and jewelry, to name the more important ones.

Take Away On Silver Market Prices

Since honesty is always the best policy, it is time for the silver detractors out there to come to grips with reality about silver’s increasingly positive prospects both from a fundamental and technical point of view. The longer term uptrend for silver remains solidly in play so long as the price per ounce sits comfortably atop $26.

Silver has yet to even threaten the $27 per ounce price. This means that the prospects for the white metal to move higher have almost never been better. Ignore the truth, or fight it, at your own personal risk and loss.

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