Wednesday, April 20, 2011

Hotspots with Max Keiser - Ireland

E-Waste in India

Even with Indian workers making a $1 a day to work over e-waste, still some scrap silver is not captured and ends up being "de-mined" into a landfill.

Syria gun battle: Police open fire on protesters

From: RussiaToday | Apr 19, 2011

Syrian security forces opened fire before dawn on Tuesday at hundreds of anti-government protesters staging a sit-in, shooting live ammunition and tear gas. There were casualties but the exact number was not immediately clear.

By Andy Hoffman:

Occam's Razor is a logical principal stating that "one should not increase, beyond what is necessary, the number of entities required to explain anything." In other words, the simplest explanation is usually the correct one. By my life experience, this principle is correct roughly 99% of the time. Science, and humanity, are pretty consistent in their respective behaviors, and the same goes for financial markets.

Technical and fundamental analysis have been used successfully for centuries, and in my case over a 20-year career as an equity analyst. Stocks tend to rise with good news and fall with bad news, just like commodity stocks tend to outperform commodities in bull markets and underperform them in bear markets. These patterns have repeated themselves for centuries, and would continue in like manner were it not for one small wrinkle....ALL financial markets, particularly in the Nazi States of America, are now rigged.

Governments have always had an "invisible hand" in the markets, acting indirectly to influence stock prices via the setting of artificial interest rates via Central Banks or gold prices via the London Gold Pool, and at key points in history have been known to intervene directly. But the U.S. was largely a freely traded stock market until the 1987 crash, when President Reagan created the "President's Working Group on Capital Markets" (i.e. the Plunge Protection Team) to directly intervene in financial markets at times of crisis.

The PPT, created simply as a buyer of last resort during emergencies, lie dormant during the 1990s, until that fateful day in September 2001 when the history of America changed, which I watched first hand from 10 blocks away, I might add. When the stock market finally re-opened a week later, the PPT clearly was in the market supporting the Dow, to such a level of blatancy that even a child could recognize it. Not uncoincidentally, that period also marked the top of the bull markets in both the Dow and the dollar, the end of the bear market in gold, and the commencement of a long decade of market manipulation.

After 9/11, the PPT increasingly shifted from an "emergency buyer" to a regular buyer, gradually increasing its role in the markets to where we are today, a market managed 24/7 to make sure it NEVER has a meaningful decline. And that interference is now rampant in all markets, such as Treasury bonds, currencies, and, of course gold and silver. By now, we all know the paper gold and silver market is a fraudulent, fractional system in which "paper ounces" are created in multiples of hundreds or even thousands of actual existing metal, and we also know that concentrated, naked short positions are not only prevalent in the metals and PM stocks, but blessed (and promulgated) by regulatory authorities. If I hear one more person say that "JP Morgan is in trouble due to its silver short", when in fact it is just a branch of the U.S. Government, who is the REAL PAPER SILVER SHORT!

In fact, the incidence of naked shorting of stocks (PM and otherwise) has blown up to epic proportions, to a point today where not only are such violations not enforced, but apparently no one even cares anymore. And now that High Frequency Trading has been perfected (to the point where criminal investment banks post trading profits EVERY DAY), massive algorithms have been created to make sure that certain sectors consistently trade the SAME WAYS ALL THE TIME.

In the case of paper gold, for instance, trading is so predictable that I can summarize it one paragraph. At 3:00 am EST, after trading flat or rising nearly every night, gold and silver suddenly drop sharply on 80% or so of all trading days. When the COMEX opens at 8:20 am EST, paper gold drops sharply roughly 80% of the time as well. Moreover, if you watch CNBC quotes in the hour leading up to the NYSE open, you'll see that EVERY SINGLE DAY WTI Crude has a sharp dip at some point in this hour, at which point paper gold prices automatically drops at twice the rate of oil (doesn't matter if Brent is rising, by the way, as the ALGOs are set versus WTI Crude). Of course, when oil rises during this period, gold never keeps up with it. Then, after the NYSE opens at 9:30 am, the price of gold has roughly 30 minutes to rise before the PM Fix at 10:00 am, at which point gold falls sharply on roughly 80% of all trading days. If it manages to rise after 10:00 am, it doesn't matter much because roughly 90% of the day's gains have been made already (particularly if gold has risen by the mandatory 1% cap limit), and in those rare cases you'll see that gold is capped exactly two hours later at 12:00 pm EST roughly 95% of the time.

Applying Occam's Razor, one would clearly conclude that such aberrational behavior, relative to hundreds of years of stock market history, could only be attributed to manipulation.

As for the shares, they meet massive resistance in the first 5-10 minutes of trading EVERY DAY, ensuring no early morning momentum that could generate a buying panic. The HUI tends to peak for the day in the first half hour of trading (as it did EVERY DAY this week), and then dribbles down all day long, with periodic crashes that are never matched by intense upward moves. In fact, now that the GOVERNMENT COMPUTERS have taken over, algorithms are built into the market ensuring that the HUI falls anytime the Dow is falling (by at least a 2x rate), any time oil is falling, any time copper is falling, any time the Euro is falling, etc., etc., etc..

I don't just BELIEVE that GOVERNMENT COMPUTERS run the stock market now (I haven't even discussed the predictability of the Dow), I KNOW IT. Do yourself a favor and watch a stock like SVM (the low cost silver producer on earth) trade for a few hours, and you'll know what I mean. Just like trading in GLD and SLV, two of the most fraudulent securities ever created, you'll see that the ask size is larger than the bid size roughly 90% of the time, and that it is never allowed to rise more than a cent at a time while it is constantly plummeting by 5-10 cents at a time on no volume, as in 100 times a day or so. These computers, spitting out naked shorts all day long in essentially all important PM stocks, have caused roughly 99% of PM investors (my estimate) to lose money in the sector, while roughly 1% (I like to believe I'm in that minority) deal with a lot of misery, not to mention a lot less stock market gains than are warranted.

Applying Occam's Razor, one would also conclude that such aberrational behavior is not a coincidence.

Despite all the evidence (and admissions) of PM market manipulation, many "analysts" refuse to change the way they look at markets, even those squarely in the manipulation corner. They refuse to realize, for instance, that a weak short-term HUI or gold price CHART does not mean "the market" is expecting a gold price crash, and essentially has ZERO PREDICTIVE POWER. It simply means the Cartel is successfully creating that perception through endless naked shorting, particularly at strategic times such as the open or close of paper trading or around key events such as employment numbers, Fed meetings, or Presidential speeches. Heck, they even refuse to acknowledge that something is amiss when gold is continually pounded in the aftermath of crisis events such as the Japanese earthquake (can't have it being a safe haven).

Applying Occam's Razor, one would also conclude that such aberrational behavior is not a coincidence.

In nine years of being 100% invested in this sector, I have never seen anything as blatant as the HUI action this week. How ANYONE watching this sector, particularly a gold/silver "expert", can give any other explanation of what we saw this week (and this year for that matter) other than government manipulation, is beyond me.

First, the statistics for this past week:

+1% (to an all-time high)

+5% (to a 31-year high)




And now for calendar 2011:

+5% (to an all-time high)

+40% (to a 31-year high)




-3% (!!!!)

and, oh yeah:


OSX (oil service index)

From my trained eye, the GOVERNMENT COMPUTER ALGORITHM ATTACK on gold mining stocks started in December 2010, shortly after silver breached $30/oz for the first time. After watching gold mining stocks (senior and junior) underperform bullion for several years, we saw a brief week or so of frenetic buying activity across the board, the type that PM investors have not seen in the past four years on absolutely massive trading volume. That excitement threatens everything TPTB are fighting against, as manic demand for PM investments would likely result in a rapid decline in paper investments, particularly Treasury bonds and, generally, anything dollar-denominated. It was then that the computer algorithm trading started to show up en masse, with successive major smashes to PM stocks in both November and December before the comical 14% HUI decline we all enjoyed starting in the FIRST HOUR OF TRADING of calendar 2011 for no apparent reason.

But even that paled in comparison to what we saw this week, starting with sharp paper gold and silver declines EVERY SINGLE DAY at exactly 3:00 am EST, and sharp HUI declines EVERY SINGLE DAY within minutes of the NYSE opening, despite the fact that outside market forces (such as SOARING silver prices, for instance) were extremely bullish for the sector. And let's not forget the bogus Bolivian nationalization rumor (refuted one day later), which reminded me a lot of the "Bin Laden Captured" and "IMF to sell gold" rumors that were used to attack PMs countless times in the years following 9/11. Think it was a surprise that the rumor targeted Bolivia, where two of the largest silver mining stocks (PAAS and CDE, of which I own neither) are major players?

Applying Occam's Razor, one would also conclude that such aberrational behavior is not a coincidence.

Before ending this RANT, I have one more topic to address, one that has drawn my ire for years now, but has finally motivated me to write (much as my Warren Buffet RANT last week). And that topic is the ridiculous notion that "hedge funds" are buying gold and silver (likely via GLD and SLV) and shorting mining shares. I hope I don't ruffle any feather with this, but that has got to be the most ridiculous thing I've ever heard, for many reasons. This silly hypothesis, which seems to gain traction in PM land every time the PM stocks are hit, is a perfect example of "analysts" refusing to address the most important issue in the market - MANIPULATION. Thus, they feel the need to make up silly theories to explain why the market did what it did - in other words, MARKET ACTION MAKES COMMENTARY!

Let's think about this a bit. To start, who are these "hedge funds", given that PM's still represent only 1% of all global financial assets, and are they really powerful enough to take down the entire PM mining sector for weeks (or months) at a time? Really?

If so, I think I'd have heard by now of these amazing hedge funds that are making so much money at the expense of 99% of PM investors. If, for instance, Silver Wheaton is trading 17 million shares, or $750 million a day in the U.S. and Canada, in an environment of SOARING silver prices, am I really to believe that some "hedge funds" are selling that much stock EVERY DAY in a frenzy of shorting, not to mention two dozen other major PM stocks?

And in all my years of investing in commodity markets (I was an oilfield service analyst for nine years prior to my nine years in PMs), I have never heard of such a ludicrous concept of a trade as shorting commodity stocks against the commodity. Oilfield service stocks have outperformed the price of oil since the beginning of the oil bull market in 1995, and I'll bet anything that copper and agricultural stocks have outperformed the underlying commodities, respectively, in their bull markets as well.

Moreover, not once in nine years of working in perhaps the largest Energy research department in the world (at Salomon Smith Barney) did I hear about clients shorting E&P or oilfield service stocks against the price of oil. And why, you might ask? Because it's RIDICULOUS! The only instance I can think of where this is likely happening is among the criminal Canadian investment banks that, in the absence of ANY naked shorting enforcement at all, enjoy non-stop shorting of their clients with the goal of getting them to price stock offerings (with tons of warrants, of course) at prices so low that the companies rarely have a chance to ever recover from the dilution.

And one more thing to add, which goes out to the majority of people reading this RANT, whom are probably among the most educated and savvy in the world. Don't let ANYONE tell you the "smart money" is doing something that is above your head! YOU are the smart money, not them! That is why you have invested in gold and silver, while 99% of the Western world has not. No, there are no "brilliant hedge fund managers" doing things you are not capable of.

WE are the smart money, and NOT ONE OF US would even DREAM of "shorting mining stocks against gold and silver", particularly microcap junior miners with cash in the bank, valuations 70% below the 2007 levels, and, oh yeah, an environment of RAMPANT INFLATION and SOARING GOLD AND SILVER PRICES!

Believe me, if YOU haven't thought of doing such things, there is no "smart money" that has.

And I'm sure William of Occam would agree.

Diagnosis Negative: Severe case of debt, contagion risk high

From: RussiaToday | Apr 19, 2011
Global markets are catching their breath after taking a big hit on Monday. That's after Standard and Poor's cut the U.S. economic outlook from stable to negative, over the country's spiraling debt

Big US Companies: Hire Abroad, Fire At Home

From Business Insider:
The benefits of globalization have been much-hyped by Wall Street, Washington think-tanks, newspaper columnists and the like. The reality is somewhat more...complex. David Wessel of The Wall Street Journal reports:

U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home, sharpening the debate over globalization's effect on the U.S. economy.

The companies cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the U.S. Commerce Department show. That's a big switch from the 1990s, when they added jobs everywhere: 4.4 million in the U.S. and 2.7 million abroad.

In all, U.S. multinationals employed 21.1 million people at home in 2009 and 10.3 million elsewhere, including increasing numbers of higher-skilled foreign workers.

Neither political party wants to talk about this, since both parties get major institutional fund-raising support from US-based multi-nationals, their PACs, their managements and employees. So the issue is unlikely to get much "play" in the 2012 election. But if the employment trend (hire abroad, fire at home) continues, it will become a major political issue.

Mr. Wessel's full article can be read by clicking here.

Gold & Silver tease watchers with new intraday highs

Gold and Silver teased seasoned market watchers today with new intraday highs in New York trade. Gold briefly hit an all time high of $1500/oz. Silver also had a very quick play with a new post 1980 intraday high of $44/oz.

Whilst of the subject of 1980, in January of that year Gold hit a intraday high of $US850 and Silver a intraday high of $52, both on the same day. Whilst gold is now hit $1500, a 76% increase over the 1980 bull market high, Silver at $44 is still about 20% below its 1980 high. Also keep in mind that the 1980's highs for Gold & Silver were caught in the updraft of an attempted market cornering to the upside by the Hunt Bros. and their Saudi mates. In the current bull market in precious metals the new high for Gold and 31 yr high for silver is being made against the headwind of market cornering to the downside, in the form of naked short bets in silver and 10's of years of net central bank sales of gold.

Silver Fundamentals Explained

Debunking the Silver Bubble Myth

Keiser Report: Murderers & Martyrs

by on Apr 19, 2011

This time Max Keiser and co-host, Stacy Herbert, report on Senator Carl Levin's report alleging lies and perjury from Goldman Sachs. In the second half of the show, Max talks to Janet Tavakoli, a credit derivatives expert and author of "Dear Mr. Buffett," about corruption and an absence of justice in the U.S. banking industry.

Bix Weir - $1000/oz Silver is Conservative

Tocqueville Asset's Hathaway Interviewed About Gold

April 18 (Bloomberg) -- John Hathaway, senior managing director of Tocqueville Asset Management and manager of the Tocqueville Gold Fund, talks about the gold market, investment in gold-mining companies and the decision by University of Texas Investment Management Co. to convert the endowment fund’s gold investments into bullion. Hathaway speaks with Pimm Fox on Bloomberg Television's "Surveillance Midday."

'We view silver as gold on steroids'

From the UK Telegraph:

Silver is a better bet than gold in the current precious metals bull run and has been described as "gold on steroids" by one asset manager.

Brian Ostroff, the managing director of Windermere Capital, a Canadian investment firm, said he was bullish about the prospects for all precious metals because the world's central banks were printing money. But he was particularly upbeat about silver.

"We love silver. It has definitely come into the forefront. The physical market characteristics are very positive," he told the Gold Report. "Ultimately, we view silver as gold on steroids. When you're in these uptrends and everyone's looking at precious metals, silver tends to perform much better [than gold].

"We think that, as the whole precious metals bull market proliferates and more average investors start to look at it, silver at $35–$40 might be more appealing than gold at $1,400–$1,500."

Silver was trading at $43.24 an ounce on Monday, its highest level since 1980. At the same time, gold hit an all-time high of $1,489.

But Mr Ostroff warned silver investors that they faced a bumpy ride. "Our feeling is that silver offers a better opportunity relative to gold – but make no mistake about it, silver is a lot more volatile. If we get a downturn in precious metals, silver will fall harder than gold," he said.

Asked why he was bullish on precious metals, he said: "I've always believed that gold is a currency. Ultimately, investors have a choice – put their money in dollars, yen, euros or pounds, as they choose, or in gold. The one difference is that gold, unlike paper currencies, has to be found and on

Will Ben bring himself to say QE3?

From Bloomberg:

Federal Reserve Chairman Ben S. Bernanke may keep reinvesting maturing debt into Treasuries to maintain record stimulus even after making good on a pledge to complete $600 billion in bond purchases by the end of June.

The Fed chief’s top two lieutenants said this month the economy and inflation are too weak to warrant the start of a monetary-policy reversal. Investors and economists including David Kelly at JPMorgan Funds see that as a signal the Fed will keep its balance sheet at current levels by replacing about $17 billion a month in maturing mortgage debt with Treasuries.

Ending the reinvestment policy and the $600 billion program at the same time would be like quitting stimulus “cold turkey,” said Kelly, who is based in New York and helps oversee $400 billion as chief market strategist at JPMorgan. “It does make sense to reinvest for a while,” he said. “Then they could watch how bond yields react to that" on

Secret memos expose link between oil firms and invasion of Iraq

From The Independent:

Plans to exploit Iraq's oil reserves were discussed by government ministers and the world's largest oil companies the year before Britain took a leading role in invading Iraq, government documents show.

The papers, revealed here for the first time, raise new questions over Britain's involvement in the war, which had divided Tony Blair's cabinet and was voted through only after his claims that Saddam Hussein had weapons of mass in full

Wall Street shares slump as S&P downgrades US debt outlook

From the Guardian:

Shares fell heavily on Wall Street on Monday after a leading ratings agency fanned fears of Europe's debt crisis spreading across the Atlantic by issuing a strong warning about America's failure to tackle its budget deficit.

In a move seen by Wall Street as a "shot across the bows" of bickering politicians in Washington, Standard and Poor's (S&P) said it was cutting the outlook on the US's long-term rating from stable to negative for the first time since the attack on Pearl Harbor 70 years ago.

The announcement surprised the financial markets, where attention in recent months has been focused on the problems of the weaker nations of the eurozone. Renewed speculation that Greece will be forced to default on its debts led to a sharp sell-off in the euro, but S&P stressed that the US was not immune from the sovereign debt crisis.

In New York, the Dow Jones industrial average ended the day down 140 points, or 1.1%, with the dollar weaker on the foreign exchanges and yields rising on US treasury bills. The FTSE 100 in London was down 126 points at 5870 – a drop of more than 2% – as ongoing concerns about the eurozone's debt crisis were compounded by the setback for the world's biggest on