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Coin Chat Radio May 28th Episode Summary

May 31, 2009 by · Leave a Comment 

Coin Chat Radio Web site"What’s In the News" with Bob Van Ryzin leads off the May 28th edition of Coin Chat Radio with news of the formal release ceremony of the John Tyler Presidential Coin at the Sherwood Forest Plantation once owned President Tyler.

Ryzin also reminds listeners that the Smithsonian is premiering a numismatics exhibition called "Stories on Money." Among other displays, it showcases samples of money from colonial times in America to the present.

Numismatic News editor Dave Harper interviews Diane Piret, Industry Affairs Director of the Industry Council for Tangible Assets.

 

"ICTA was formed to represent anyone who has an interest in rare coins, currency and precious metals with government," Piret replied when asked what the Council was. "We had no voice, especially in Washington, before that, and laws were passed without input from us which were detrimental to our hobby and industry."

 

The ICTA has had a pivotal impact on Broker Reporting Regulations. According to Piret, the legislation was intended for commodity brokers, but the coin industry was sucked in as well, mainly due to large transactions like bullion sales.

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How The ‘Cartel’ Suppresses The Price Of Gold

May 31, 2009 by · Leave a Comment 

The Daily Bell

The editors of the Daily Bell are pleased to present this comprehensive and exclusive interview conducted by Scott Smith with William Murphy of the Gold Anti-Trust Action Committee.

Daily Bell: Thanks for spending some time with us.

Bill Murphy: Thanks for thinking of GATA.

Daily Bell: Some people would say you have done more to move the price of gold upward than the Federal Reserve – with all its blundering. How do you respond to that?

Bill Murphy: That certainly would not be the opinion in the mainstream gold world who have fought against GATA’s efforts and discoveries from day one. The Federal Reserve is a dichotomy as to the price of gold. They have been instrumental in their efforts to suppress the price of gold in their role in The Gold Cartel. At the same time their “quantitative easing” could not be more gold friendly. For those who believe GATA has had a substantial impact on the gold price, we thank them.

Daily Bell: You seem to view the world through a free-market prism – that’s fairly obvious. Would you consider yourself fully a free-market “Austrian” in terms of your economic philosophy?

Bill Murphy: Don’t really get into it that much. I used to trade commodities on a rather large scale and like to think I know a fair amount about the markets and how they work. A few weeks after I opened my website, LeMetropoleCafe.com, Long Term Capital Management blew up. My colleagues and I knew they were short more than 300 tonnes of gold on a “carry trade.” When they were forced to cover that short, the price should have gone ballistic. Instead, the bullion banks (Goldman Sachs, Deutsche Bank, Chase Bank), who were short too, bailed them out and stopped gold’s advances cold on a daily basis around $300 per ounce. That couldn’t have been clearer by the price action and the reports from the Comex floor.

Daily Bell: How convinced are you that the monetary elite manipulates the price of gold? How did you come to that conclusion?

Bill Murphy: The Gold Anti-Trust Action Committee’s basic assertion for the past 10+ years is that there is a Gold Cartel out there suppressing the gold price. It consists of the US Government, including the Fed and Treasury, various other central banks, and bullion banks like Goldman Sachs and JP Morgan Chase. Bullion banks such as Goldman and Morgan became The Gold Cartel’s hit men, trading the gold market from the short side and bombing the market in coordinated anti-trust fashion at the beck and call of our government, making a great deal of money in the process. It seems to have all started with Robert Rubin:

Before he was CEO of Goldman Sachs and then US Treasury Secretary, Robert Rubin worked as the top dog in London for Goldman Sachs. One of his duties was to oversee their gold trading operations. We know this because the CEO of Kirkland Lake Gold, Brian Hinchcliffe, whose firm is a staunch GATA supporter, worked in London back then for Goldman Sachs and reported directly to Robert Rubin.

This was many years ago (late 80′s) and interest rates in the US were very high, say from 8 to 12%. Rubin had Goldman Sachs borrow gold from the central banks to fund their basic operations, doing so at about a 1 % interest rate. Then they sold the physical gold in the marketplace, using the proceeds as they so desired. This was like FREE money, as long as the price of gold did not rise to any sustained degree for any length of time.

Soon other major financial institutions realized what Goldman Sachs was doing and copied them. Rubin continued these operations as the overall Goldman Sachs CEO in New York and then took it to a new level as US Treasury Secretary. That is how the gold price suppression became the lynchpin of his widely acclaimed “Strong Dollar Policy.” GATA’s Reg Howe caught onto this notion by finding a paper titled, “Gibson’s Paradox and The Gold Standard,” co-authored by Lawrence Summers in 1988. Summers, a professor at Harvard at the time, succeeded Rubin as US Treasury Secretary. The bottom line of Summer’s analysis is that “gold prices in a free market should move inversely to real interest rates.” Control gold and it will help to control interest rates.

From GATA’s standpoint it is a serious bummer that Summers is now the Director of the White House’s National Economic Council for President Obama. Our energetic new President has the architect of America’s economic demise as his key advisor.

I met with Bart Chilton, an outstanding and receptive commissioner with the CFTC, on December 19, 2008 and laid out GATA’s evidence of the gold market manipulation. There were three others at our meeting from the CFTC, including their senior counsel. Bart took copious notes and I suggested he take what GATA had to say to the Obama people … emphasizing the gold price suppression scheme would blow up before President Obama’s watch was over due to dwindling available central bank gold to suppress the price. Better to let the gold price trade freely now and blame what occurred on the Bush Administration, rather than let the scheme go on and eat the problem on his administration’s watch down the road.

Daily Bell: How about silver?

Bill Murphy: No question about it … MANIPULATED! JP Morgan Chase is by far the major silver short and its position is way too concentrated for a free market. Silver needed to be manipulated along with gold in order to keep attention away from the price suppression scheme. Ted Butler, well known in the precious metals internet world, knows as much about the silver market as anyone, and has brilliantly articulated just how much silver has been manipulated … and by whom.

Read more….

Korelin Economics Report interviews GATA director Steer

May 31, 2009 by · Leave a Comment 

9:15p ET Saturday, May 30, 2009

Dear Friend of GATA and Gold:

Casey Research gold and silver market analyst Ed Steer, a member of GATA’s Board of Directors, was interviewed about those markets and the U.S. dollar for five minutes yesterday by Al Korelin of the Korelin Economics Report, and you can listen to it here:

http://www.kereport.com/DailyRadio/Daily052909.mp3

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Congress expected to approve IMF gold sale next week

May 31, 2009 by · Leave a Comment 

Commodity Online

LONDON — The International Monetary Fund’s decisiion to sell its gold reserves could get the necessary approval from the US Congress next week.

At the G20 summit in London in April, participating countries agreed the IMF could sell 403.3 metric tons of gold as part of efforts to leverage up to $6 billion in concessional loans for low-income countries over the next few years.

In order for the sale to proceed, 85% of IMF shareholders need to approve the proposal. Since the U.S. has 17% of the votes, it has a de-facto veto over the proposal, which requires Congressional approval, but IMF Managing Director Dominique Strauss-Kahn told Dow Jones Newswires this week he expects Congress will soon approve the sale.

On Friday analysts said US Congress may approve International Monetary Fund gold sales as early as next week.

“This issue appears now fully priced into the gold market and any announcement confirming sales should not move the market — apart from perhaps a knee-jerk reaction,” said John Reade, an analyst at UBS.

Gold hit a three-month high Friday due to U.S. dollar weakness across a number of currencies such as the euro and pound. Traders and analysts said the metal is heading towards $1,000 a troy ounce with speculative buying reentering the market and the dollar weakening. …

The approval to sell gold, along with an increase in U.S. funding to the IMF, is scheduled for a debate beginning Monday as part of the 2009 Supplemental.

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Einhorn’s Greenlight Capital’s Big Bets on Gold: 13F Filing – Q1

May 31, 2009 by · Leave a Comment 

Market Folly submits:

This is the 1st Quarter 2009 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings series preface.

Next up is Greenlight Capital, a $6 billion hedge fund ran by David Einhorn that specializes in spin-offs and value investing and has seen annual returns of over 20%. Einhorn’s name has been popping up in the media a lot over the past year, as he talked about his well documented short position in Lehman Brothers. And, while that position paid off handsomely for him, it barely offset losses he experienced from other positions.

He was caught in the massive Volkswagen (VLKAY.PK) short squeeze as he detailed in one of his investor letters. Einhorn has also recently detailed the saga between his fund and Allied Capital (ALD), a company he shorted, in his book Fooling Some of the People All of the Time: A Long Short Story. It gives you an inside perspective as to how Greenlight constructs and researches their investment theses and we highly recommend it. Greenlight approaches things by identifying mispricings in the markets and going from there.

He has recently advocated getting long gold (GLD) and gold miners (GDX). And, at the same time, he has advocated shorting commercial real estate property REITs, saying that a drop in rents of 10% hurts values due to leverage and also points to the difficulty they will have trying to refinance debt coming due. We covered more of his recent thoughts and ideas from his most recent investor letter.

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Inflation Hedging: How to Protect Your Portfolio

May 31, 2009 by · Leave a Comment 

David Fessler submits:

Right now, the markets are caring about one thing: inflation. And they’re starting to get a little edgy. They need inflation hedging…

Why? The U.S. Treasury is printing money and dumping it into the financial system at historically unprecedented rates, in an effort to stimulate the economy.

Chances are good that the Fed won’t know when to stop the printing presses. Continuing to print money only exacerbates the inflation problem and deepens the hole.

And it’s quite a hole.

Jessica Hoversen, Fixed Income Analyst at MF Global, had this to say Thursday on CNBC: “The ratio of U.S. budget deficit to [gross domestic product] GDP is at the highest level since World War II.”

The government thought process goes something like, “If some stimulation is good, more will be even better.” And most politicians, who are always looking ahead to the next election, won’t want to risk their futures by cutting off ANY economic aid prematurely.

It goes on and on…

The real problem though, is that all of this economic over-stimulation sets us up for inflation. It’s something every investor should guard against in his or her portfolio. And it’s why we’ve got the best four investments for you to hedge against inflation’s impact.

The Tried and True Inflation Hedge – Gold

These days, many think of gold as a great investment for its safety and growth. And solely based on the amount of direct-mail advertisements I get from gold bugs, you’d think it was the only investment worth keeping.

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The Curious Problem of Gold and Silver Coins as Legal U.S. Tender

May 31, 2009 by · Leave a Comment 

Tim Iacono submits:

The idea that gold and silver coins are still legal tender in the U.S. has always struck me as one of the more intriguing aspects of our monetary system, a system that appears to teeter a bit more each and every year, its fate sure to be the same as all prior fiat money systems throughout history – they never end well.

The notion that a quarter or a dime from the 1950s or early-1960s that contains 90 percent silver might be worth ten times its face value seems like more of an oddity than anything else since the values are so small.

A dime being worth more than a dollar really isn’t that big a deal until you get a whole bag full of them. Then you can sell these coins with a face value of $1,000 for more than $10,000 (maybe $11,000 by the end of the day given how metal prices are soaring).

The name “junk silver” really doesn’t do these coins justice as the real “junk” is clearly what followed silver quarters and silver dimes, the citizenry promptly removing them from circulation after the government discontinued them – something about bad money forcing out good money as Gresham once said.

But, gold presents a whole new set of math.

Currently about 63 times as valuable as silver by the ounce (roughly $960 an ounce versus $15 an ounce), the U.S. Mint continues to produce these coins with dollar values printed right on their face.

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Gold: At the $1,000 door

May 31, 2009 by · Leave a Comment 

Gold investors know all too well the psychological importance of $1,000 gold and at $980 it’s awfully close again. According to John Kaiser, editor of the Kaiser Bottom-Fishing Report, “we’re getting very close.” Interview with The Gold Report

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Silver Prices in May Jump 26.6% in N.Y., 22.9% in London

May 30, 2009 by · Leave a Comment 

kjhlkjSilver had a monster month in May, recording the best month since 1987. According to most reports, prices soared as a result of inflation fears, weakness in the U.S. dollar and higher demand expectations with hopes of an economy recovery.

New York silver futures for July delivery ended Friday at $15.61 an ounce, soaring 91.5 cents, or 6.2 percent this week. The metal gained 4.9 percent the week prior, and has surged 26.6 percent in May.

 

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Bullion & Business Weekend Report – May 30

May 30, 2009 by · Leave a Comment 

Markets were on fire this week and month. In terms of monthly heights, silver streaked ahead in New York to post its biggest monthly gain since April 1987, rising 27 percent. Gold rallied as well, advancing 9.8 percent. In black gold, crude-oil recorded its best monthly gain in 10 years. U.S. stocks made noise too, rising for three straight months.

Weekend Recap: Silver, Gold and Platinum Prices; Business Week NewsFor the week in London, gold rose 1.6 percent, silver soared 5.9 percent, and platinum jumped 2.3 percent. Precious metal spot figures follow:

London silver closed Friday to $15.52 an ounce, soaring 86 cents this week and an impressive $2.89 for the month.

London gold was fixed at $975.50 an ounce, rising $15.75 for the week while gaining $92.25 in May.

London platinum advanced to $1,175.00 an ounce, rising $26.00 on the week and increasing $82.00 for the month.

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