Gold surpassed $1400 in late Asian and London trade yesterday, holding this level and adding another $15 in New York trade overnight. Gold has benefited this week by markets being spooked by the Japan's stock market selling off in erratic fashion, with the leading Nikkei index down 5% yesterday and roughly 15% for the week. Also weaker than expected economic data released in the US has given more confidence to the market that Uncle Ben ain't going to stop printing money anytime soon, which has then fed into a weakening US$.
Today Perianne and Bob interview Jon Roe, co-founder of the Commodity Customer Coalition, about the latest developments with MF Global and a suit against Jon Corzine. And we feature another scintillating Bitcoin interview with Jered Kenna, CEO and co-founder of TradeHill. Then Perianne and Bob duel over Jon Bon Jovi and the European debt crisis.
Have you ever wondered how the government’s misinformation gains traction?
What I have noticed is that whenever a stunning episode occurs, such as 9/11 or the Boston Marathon bombing, most everyone whether on the right or left goes along with the government’s explanation, because they can hook their agenda to the government’s account.
The leftwing likes the official stories of Muslims creating terrorist mayhem in America, because it proves their blowback theory and satisfies them that the dispossessed and oppressed can fight back against imperialism.
The patriotic rightwing likes the official story, because it proves America is attacked for its goodness or because terrorists were allowed in by immigration authorities and nurtured by welfare, or because the government, which can’t do anything right, ignored plentiful warnings.
Whatever the government says, no matter how problematical, the official story gets its traction from its compatibility with existing predispositions and agendas.
In such a country, truth has no relevance. Only agendas are important.
A person can see this everywhere. I could write volumes illustrating how agenda-driven writers across the spectrum will support the most improbable government stories despite the absence of any evidence simply because the government’s line can be used to support their agendas.
For example, a conservative writer in the June issue of Chronicles uses the government’s story about the alleged Boston Marathon bombers, Dzhokhar and Tamerlan Tsarnaev, to argue against immigration, amnesty for illegals, and political asylum for Muslims. He writes: “Even the most high-tech security systems imaginable will inevitably fail as they are overwhelmed by a flood of often hostile and dangerous immigrants.”
The writer accepts all of the improbable government statements as proof that the brothers were guilty. The wounded brother who was unable to respond to the boat owner who discovered him and had to be put on life support somehow managed to write a confession on the inside of the boat.
As soon as the authorities have the brother locked up in a hospital on life support, “unnamed officials” and “authorities who remain anonymous” are planting the story in the media that the suspect is signing written confessions of his guilt while on life support. No one has seen any of these written confessions. But we know that they exist, because the government and media say so.
The conservative writer knows that Dzhokhar is guilty because he is Muslim and a Chechen. Therefore, it does not occur to the writer to wonder about the agenda of the unnamed sources who are busy at work creating belief in the brothers’ guilt. This insures that no juror would dare vote for acquittal and have to explain it to family and friends. Innocent until proven guilty in a court has been thrown out the window. This should disturb the conservative writer, but doesn’t.
The conservative writer sees Chechen ethnicity as an indication of guilt even though the brothers grew up in the US as normal Americans, because Chechens are “engaged in anti-Russian jihad.” But Chechens have no reason for hostility against the US. As evidence indicates, Washington supports the Chechens in their conflict with Russia. By supporting Chechen terrorism, Washington violates all of the laws that it ruthlessly applies to compassionate Americans who give donations to Palestinian charities that Washington alleges are run by Hamas, a Washington-declared terrorist organization.
It doesn’t occur to the conservative writer that something is amiss when martial law is established over one of America’s main cities and its metropolitan area, 10,000 heavily armed troops are put on the streets with tanks, and citizens are ordered out of their homes with their hands over their heads, all of this just to search for one wounded 19-year old suspect. Instead the writer blames the “surveillance state” on “the inevitable consequences of suicidal liberalism” which has embraced “the oldest sin in the world: rebellion against authority.” The writer is so pleased to use the government’s story line as a way of indulging the conservative’s romance with authority and striking a blow at liberalism that he does not notice that he has lined up against the Founding Fathers who signed the Declaration of Independence and rebelled against authority.
I could just as easily have used a left-wing writer to illustrate the point that improbable explanations are acceptable if they fit with predispositions and can be employed in behalf of an agenda.
There was no investigation of 9/11. Indeed, the White House resisted any inquiry at all for one year despite the insistent demands from the 9/11 families. NIST did not investigate anything. NIST simply constructed a computer model that was consistent with the government’s story. The 9/11 Commission simply sat and listened to the government’s explanation and wrote it down. These are not investigations.
The only investigations have come from a physicist who proved that WTC 7 came down at free fall and was thus the result of controlled demolition, from a team of scientists who examined dust from the WTC towers and found nano-thermite, from high-rise architects and structural engineers with decades of experience, and from first responders and firefighters who were in the towers and experienced explosions throughout the towers, even in the sub-basements.
We have reached the point where evidence is no longer required. The government’s statements suffice. Only conspiracy kooks produce real evidence.
In America, government statements have a unique authority. This authority comes from the white hat that the US wore in World War II and in the subsequent Cold War. It was easy to demonize Nazi Germany, Soviet Communism and Maoist China. Even today when Russian publications interview me about the perilous state of civil liberty in the US and Washington’s endless illegal military attacks abroad, I sometimes receive reports that some Russians believe that it was an impostor who was interviewed, not the real Paul Craig Roberts. There are Russians who believe that it was President Reagan who brought freedom to Russia, and as I served in the Reagan administration these Russians associate me with their vision of America as a light unto the world. Some Russians actually believe that Washington’s wars are truly wars of liberation.
The same illusions reign among Chinese dissidents. Chen Guangcheng is the Chinese dissident who sought refuge in the US Embassy in China. Recently he was interviewed by the BBC World Service. Chen Guangcheng believes that the US protects human rights while China suppresses human rights. He complained to the BBC that in China police can arrest citizens and detain them for as long as six months without accounting for their detainment. He thought that the US and UK should publicly protest this violation of due process, a human right. Apparently, Chen Guangcheng is unaware that US citizens are subject to indefinite detention without due process and even to assassination without due process.
The Chinese government allowed Chen Guangcheng safe passage to leave China and live in the US. Chen Guangcheng is so dazzled by his illusions of America as a human rights beacon that it has never occurred to him that the oppressive, human rights-violating Chinese government gave him safe passage, but that Julian Assange, after being given political asylum by Ecuador is still confined to the Ecuadoran embassy in London, because Washington will not allow its UK puppet state to permit his safe passage to Ecuador.
Perhaps Chen Guangcheng and the Chinese and Russian dissidents who are so enamored of the US could gain some needed perspective if they were to read US soldier Terry Holdbrooks’ book about the treatment given to the Guantanamo prisoners. Holdbrooks was there on the scene, part of the process, and this is what he told RT: “The torture and information extraction methods that we used certainly created a great deal of doubt and questions in my mind to whether or not this was my America. But when I thought about what we were doing there and how we go about doing it, it did not seem like the America I signed up to defend. It did not seem like the America I grew up in. And that in itself was a very disillusioning experience.” http://rt.com/news/guantanamo-guard-islam-torture-608/
In a May 17 Wall Street Journal.com article, Peggy Noonan wrote that President Obama has lost his patina of high-mindedness. What did Obama do that brought this loss upon himself? Is it because he sits in the Oval Office approving lists of US citizens to be assassinated without due process of law? Is it because he detains US citizens indefinitely in violation of habeas corpus? Is it because he has kept open the torture prison at Guantanamo? Is it because he continued the war that the neoconservatives started, despite his promise to end it, and started new wars?
Is it because he attacks with drones people in their homes, medical centers, and work places in countries with which the US is not at war? Is it because his corrupt administration spies on American citizens without warrants and without cause?
No. It is none of these reasons. In Noonan’s view these are not offenses for which presidents, even Democratic ones, lose their high-minded patina. Obama can no longer be trusted, because the IRS hassled some conservative political activists.
Noonan is a Republican, and what Obama did wrong was to use the IRS against some Republicans. Apparently, it has not occurred to Noonan that if Obama–or any president–can use the IRS against opponents, he can use Homeland Security and the police state against them. He can use indefinite detention against them. He can use drones against them.
All of these are much more drastic measures. Why isn’t Peggy Noonan concerned? Because she thinks these measures will only be used against terrorists, just as the IRS is only supposed to be used against tax evaders.
When a public and the commentators who inform it accept the collapse of the Constitution’s authority and the demise of their civil liberties, to complain about the IRS is pointless.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss crack babies and debt crack banker babies.
In the second half, Max talks to James Howard Kunstler, author of the Long Emergency, about the US central bank pushing debt crack on an unemployed and under-educated population and a media high on frack crack - a high which makes the user see the oil wealth of Saudi Arabia in America.
For one night only, Professor Brian Cox goes unplugged in a specially recorded programme from the lecture theatre of the Royal Institution of Great Britain. In his own inimitable style, Brian takes an audience of famous faces, scientists and members of the public on a journey through some of the most challenging concepts in physics.
With the help of Jonathan Ross, Simon Pegg, Sarah Millican and James May, Brian shows how diamonds - the hardest material in nature - are made up of nothingness; how things can be in an infinite number of places at once; why everything we see or touch in the universe exists; and how a diamond in the heart of London is in communication with the largest diamond in the cosmos.
GATA's Chris Powell expounds on his belief that the gold markets are being manipulated during a conversation with Cambridge House Live anchor Bridgitte Anderson at the World Resource Investment Conference.
T.V. Seshadri, Asia division president at MasterCard Worldwide, comments on a MasterCard survey which reveals that Bangkok is to become the most visited city in the world this year, narrowly beating London.
Australia is still the world's happiest nation based on criteria including income, jobs, housing and health, despite some signs of a slowing economy, according to the Organisation for Economic Co-operation and Development.
More than 73 per cent of people aged 15 to 64 in Australia have a paid job, above the OECD average of 66 per cent, while life expectancy at birth in Australia is almost 82 years, two years higher than the OECD average, the survey showed.
Australia, the only major developed nation to avoid the 2009 worldwide recession, remains at the top of the OECD index even as the mining boom powering economic growth crests and the government forecasts unemployment will rise to 5.75 per cent by June 2014, from 5.5 per cent last month.
I just learnt something interesting. Hugo Salinas Price's (guest on Keiser Report and occassional contributor to this blog) son is Ricardo Salinas, Mexico's second richest man, and 34th richest in the world. Ricardo's bio
Hedge funds are the least bullish on gold in more than five years as speculation about the pace of money printing by central banks whipsawed prices, driving volatility to a 17-month high.
Money managers cut their net-long position by 9 percent to 35,686 futures and options as of May 21, the lowest since July 2007, U.S. Commodity Futures Trading Commission data show. Holdings of short contracts rose 6.7 percent to a record 79,416. Net-bullish wagers across 18 U.S.-traded commodities slid 2.1 percent, as investors became more bearish on coffee and wheat.
Gold’s 60-day historical volatility touched the highest since December 2011 last week and a gauge of price swings for the SPDR Gold Trust, the biggest bullion-backed exchange-traded fund, surged 73 percent this year. Bullion see-sawed as Federal Reserve Chairman Ben S. Bernanke testified before Congress on May 22
In this episode of the Keiser Report, Max Keiser and Stacy Herbert in the second part of a two part currency war special focus on George Osborne hoping a rising stock market will convince voters his economic policies are working and the new front in the South Pacific as New Zealand launches defensive measures against global currency devaluations.
In the second half, Max talks to Jim Rickards, author of Currency Wars, for the second half of their interview focusing on currency wars and hot wars.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert have a look at the narcissists' rally as we drown in central banking their currency wars and their quantitative easing without wealth creation.
In the second half, Max talks to Jim Rickards, author of Currency Wars, about why we don't need to worry about a recession - because we're in a depression! They discuss US Federal Chairman, Ben Bernanke's, plan to not Beggar Thy Neighbor, but Enrich They Neighbor by jumping out of the printing plane together with simultaneous devaluations. And, in terms of gold, Keiser and Rickards suggest maybe it's the Chinese manipulating the price of gold . . . and not the US Federal Reserve.
You know that gold bear market that the financial press keeps touting? The one George Soros keeps proclaiming? Well, it is not there. The gold bear market is disinformation that is helping elites acquire the gold.
In addition the Soros Fund maintains a $32 million stake in individual mines; added 1.1 million shares of GDX (a gold miners ETF) to its holdings which now stand at 2,666,000 shares valued at $70,400,000; has 1,100,000 shares in GDXJ valued at $11,506,000; and 530,000 shares in the GLD gold fund valued at $69,467,000. [values as of May 17]
The 13-F release shows the Soros Fund with $239,200,000 in gold investments. If this is bearish sentiment, what would it take to be bullish?
The misinformation that Soros had sold his gold holdings came from misinterpreting the reason Soros’ holdings in the GLD gold trust declined. Soros did not sell the shares; he redeemed the paper claims for physical gold. Watching the gold ETFs, such as GLD, being looted by banksters, Soros cashed in some of his own paper gold for the real stuff.
The giveaway that Soros is extremely bullish on gold comes not only from his extensive holdings, but also from his $25.2 million call option on junior gold stocks. This is a highly leveraged bet on the weakest gold mines. With high production costs and falling gold price from constant short selling in the paper market, Soros’ bet makes no sense unless he thinks gold is heading up as the short raids concentrate gold in elite possession.
In previous articles I have explained how heavy short-selling triggers stop-loss orders and margin calls on investors in gold ETFs. Scared out of their shares or forced out by margin calls, investors’ add to the downward price pressure caused by the shorts. Bullion banks and prominent investors such as Soros are the only ones who can redeem GLD shares for physical metal. They purchase the shares that are sold in response to the falling gold price, and present the shares for redemption in gold metal.
Insiders familiar with the process describe it as looting the ETFs of their gold basis.
In my last column I described how the orchestration of a falling gold price in the paper market protects the dollar’s value from the Federal Reserve’s policy of printing 1,000 billion new ones annually. The other beneficiary of the operation is the financial elite who buy up at low prices the ETF shares sold into a falling market and redeem them for gold. Like all other forms of wealth in the West, gold is being concentrated in fewer hands, while the elite shout “bear market, get out of gold.”
The orchestrated decline in gold and silver prices is apparent from the fact that the demand for bullion in the physical market has increased while short sales in the paper market imply a flight from bullion. As a hedge fund manager told me, it is a Wall Street axiom that volume follows price. Bull markets are characterized by rising prices on high volume. Conversely bear markets feature declining prices on low volume. The current bear market in gold consists of paper gold declining steadily while demand has escalated rapidly for physical metal. This strongly indicates that demand for physical gold continues to be in a bull market despite the savage attacks on paper gold.
If the orchestration is apparent to me, a person with no experience as a gold trader, it certainly must be apparent to federal regulators. But don’t expect any action from the Commodities Future Trading Corporation. It is headed by a former Goldman Sachs executive.
And don’t expect any investigation from the financial press. The financial press sees a bear market while supplies of bullion decline, premiums over spot rise, and even publicly declared bears such as George Soros make highly leveraged bets that will fail in the absence of a bull market in gold.
Egon discusses the increasing disconnect between the paper and physical price for gold and the stalling tactics bullion banks are taking to prevent clients taking physical possession of their gold. Listen to the KWN interview here
I highly recommend the interview section of this week's report with one my favourite analysts and twitter friend Sandeep Jaitly. Max and Sandeep discuss the fiat price of gold being an unequal exchange, in similar terms to the Islamic teachings on sunnah money, particularly the excellent lectures given by Sheikh Imran Hosein, one of which can be viewed on this blog here
In this episode of the Keiser Report, Max Keiser and Stacy Herbert examine whether the markets are soaring or crashing but find it impossible to determine as long standing data patterns have broken down. They discuss feeding the ducks while they're quacking and bitcoin vigilantes fighting the Fed.
In the second half, Max talks to Sandeep Jaitly of FeketeResearch.com about the imminent extinction of the price of gold as well as the permanent backwardation in both gold and silver markets.
South Africa's mining industry can ill afford to offer wage rises during talks that are about to start with a new and unpredictable union, so it may well face fresh strikes, Impala Platinum said on Friday.
South African mining companies are due to embark on one of their toughest periods of wage talks in the next one or two weeks, with increasingly radicalised unions.
The world's biggest platinum producing country is hoping to avoid the 2012 wildcat strike action that cost billions in lost revenue and production.
HKMEx chairman Barry Cheung Chun-yuen told the Sunday Morning Post
that the decision to surrender the trading licence and not reopen for
business tomorrow would have no impact on investors and that client
contracts would be honoured.
"There is no question of not getting your money back or anything like
that. People absolutely do not have to worry about that and I don't
think they are.
"The only thing they will want to know is what settlement price will be used," Cheung said.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert examine stories about those who, using spoof trades, bogus securities and fictitious capital, steal real wealth and income. They discuss how it is that every benchmark index is rigged and introduce the concept of the 'bonus benchmark.' In the second half, Max talks to Dr. Michael Hudson, author of The Bubble and Beyond, about debt and wage deflation and about the intersection of interest rates and wages going back to David Ricardo when wages were measured against the price of bread to today when they are measured against the price of debt.
Piers Morgan of all people might actually have woken up. In this snippet of an interview with Penn Jillette, Piers bemoans that the US executive might be tyrannical for impinging on the 1st amendment (the freedom of the press) although I suspect he still has no problem with the executive impinging on the 2nd amendment.
As an aside Penn Jillette before getting to political commentary was one of the world's greatest illusionists, along with his partner Teller. You can view their work on youtube here
Well after 10 days and no reply from either of them I am left to assume they are both happy with the RBA storing 99.9% of their gold at the Bonk of England. Although they might have also been busy with that budget nonsense. Please if anyone else wishes to ask the same question be my guest, if you get a response please leave a comment on this post. The link to the RBA gold story is: http://ausbullion.blogspot.com.au/2012/12/reserve-bank-of-australia-admits-999-of.html
"I can assure you that we are looking very, very carefully at any evidence that anyone outside Iran is selling gold to Iran," he said.
The remark came after Rep. Edward R. Royce, California Republican and the US Foreign Affairs Committee's chairman, asked whether the administration was aware of recent reports indicating an uptick in the flow of gold into Iran.
"With its currency now in free fall, the Iranians desperately need gold," said Mr. Royce, who noted that a U.S. law authorizing the Obama administration to sanction anyone selling gold to citizens inside Iran does not take effect until July 1.
With existing U.S. law only allowing sanctions on the sale of gold directly to the Iranian government, Mr. Cohen told lawmakers the administration is keeping a close eye on the situation.
While Mr. Cohen acknowledged that U.S. authorities have "no question that there is gold going from Turkey to Iran," he said that "in large measure what we're seeing is private Iranian citizens buying gold as a protection to the falling value" of Iran's currency, the rial.
In scenes reminiscent of the Japanese Unit 731 the CNBC puppets have been rallied to jump on what they to perceive is the corpse of Gold. Of course they give scant attention to the fact that the cost of mining gold is on average $1200/oz and increasing as grades decline and energy costs increase or the record demand from Asia, the Middle East and Australia.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert
behold the Sacred Dow, worshipped by economists and analysts around the
world and to which whole economies and jobs have been sacrificed to keep
it rising. They compare the Japanese bond market to Fukushima. Markets
have become so distorted by manipulation, they argue that like godzilla,
one day the market will go where it needs to go and it will smash down
buildings and economies with it.
In the second half, Max talks to John
Butler of Amphora about confusing price signals caused by market
manipulating central bankers and the misallocation of capital this
encourages. They also talk about Japan's economy, Krugman's bond
allegations and Mrs. Watanabe's gold shopping spree.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the brainless food of the future that is the consumer of today. From shopping for clothes to buying equities, consumers and investors ask not where the profits or discounts come from. In the second half, Max talks to Mark Campanale and Luke Sussams of CarbonTracker.org about unburnable carbon, wasted capital and stranded assets.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the currency of an independent Scotland. Max argues that bitcoin will force the banking system to reinvent itself or die, for what can be more of an invisible hand but a cryptologically guarded, invisible currency.
In the second half, Max talks to Glaswegian comedian, Frankie Boyle, about Scottish independence, Boris Johnson, the mainstream media, being semi-banned from the BBC and about George Osborne's Help to Buy housing scheme being like eating toilet tissue while trapped in a loveless marriage caused by negative equity.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the girl band cheering for quantitative easing and the former Bank of England economists charging George Osborne with deploying a 'reckless' Help to Buy housing scheme designed, they say, "to guarantee maximum damage to the UK's long-term growth prospects and its fragile credit rating."
In the second half, Max talks to Pierre Jovanovic, the author of "Blythe Masters," about the latest market manipulation scandal to hit JP Morgan and what it means for the future of Blythe Masters, the Head of Commodities at the bank.
The FBI is drafting a proposal that would allow them to force tech companies to allow them to spy on websites' customers in real-time, through technology such as Skype, Google chat, some online gaming, and more. They also seek to impose fines on companies that don't comply with the real-time wiretap orders. Many see this as a privacy issue, along with a jobs issue. The Resident (aka Lori Harfenist) discusses the issue.
LONDON—A tiny tip of the vast subterranean network of governmental and intelligence agencies from around the world dedicated to destroying WikiLeaks and arresting its founder, Julian Assange, appears outside the red-brick building on Hans Crescent Street that houses the Ecuadorean Embassy. Assange, the world’s best-known political refugee, has been in the embassy since he was offered sanctuary there last June. British police in black Kevlar vests are perched night and day on the steps leading up to the building, and others wait in the lobby directly in front of the embassy door. An officer stands on the corner of a side street facing the iconic department store Harrods, half a block away on Brompton Road. Another officer peers out the window of a neighboring building a few feet from Assange’s bedroom at the back of the embassy. Police sit round-the-clock in a communications van topped with an array of antennas that presumably captures all electronic forms of communication from Assange’s ground-floor suite.
The Metropolitan Police Service (MPS), or Scotland Yard, said the estimated cost of surrounding the Ecuadorean Embassy from June 19, 2012, when Assange entered the building, until Jan. 31, 2013, is the equivalent of $4.5 million.
Britain has rejected an Ecuadorean request that Assange be granted safe passage to an airport. He is in limbo. It is, he said, like living in a “space station.”
In this episode of the Keiser Report, Max Keiser and Stacy Herbert
discuss that feeling you get when you've blown your life savings on a
carnival game and all you have to show for it is a stuffed banana with
dreadlocks and how the entire global financial system is not too
dissimilar. They also note that those blowing their life savings on a
rigged game, or stock market, always seem to turn to doubling down in a
vain attempt to win back all that they lost.
In the second half, Max
talks to the author of Paper Money Collapse, Detlev Schlichter of
DetlevSchlichter.com about ECB policy, the gold battle between Chinese
housewives and Wall Street.
Date 7 May 2013
Embargo For Immediate Release
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to lower the cash rate by 25 basis points to 2.75 per cent, effective 8 May 2013.
The global economy is likely to record growth a little below trend this year, before picking up next year. Among the major regions, the United States continues on a path of moderate expansion and China's growth is running at a more sustainable, but still robust, pace. Japan has announced significant new policy initiatives aimed at strengthening demand and ending deflation. The euro area remains in recession. Commodity prices have moderated a little in recent months though they remain high by historical standards.
Financial conditions internationally continue to be very accommodative, with risk spreads reduced, funding conditions for most financial institutions improved and borrowing costs for well-rated corporates and sovereigns exceptionally low.
Growth in Australia was close to trend in 2012 overall, but was a bit below trend in the second half of the year, and this appears to have continued into 2013. Employment has continued to grow but more slowly than the labour force, so that the rate of unemployment has increased a little, though it remains relatively low.
With the peak in the level of resources sector investment likely to occur this year, there is scope for other areas of demand to grow more strongly over the next couple of years. There has been a strengthening in consumption and a modest firming in dwelling investment, and prospects are for some increase in business investment outside the resources sector over the next year. Exports of raw materials are increasing as increased capacity comes on stream. These developments, some of which have been assisted by the reductions in interest rates that began 18 months ago, will all be helpful in sustaining growth.
Recent data on prices confirm that inflation is consistent with the target and, if anything, a little lower than expected. The CPI rose by 2½ per cent over the past year, and measures of underlying inflation gave a broadly similar outcome. These results have been pushed up a little by the impact of the carbon price. Growth of labour costs has moderated slightly over recent quarters while productivity growth appears to be improving. This should help to lessen increases in prices for non-tradables. The Bank's forecast remains that inflation over the next one to two years will be consistent with the target.
Over recent meetings, the Board has noted that interest rates have already been reduced substantially, with borrowing rates approaching previous lows, and that the effects of this on the economy are continuing to emerge. Savers have been changing their portfolios towards assets with higher expected returns, asset values have risen and some interest-sensitive areas of spending have increased.
The exchange rate, on the other hand, has been little changed at a historically high level over the past 18 months, which is unusual given the decline in export prices and interest rates during that time. Moreover, the demand for credit remains, at this point, relatively subdued.
The Board has previously noted that the inflation outlook would afford scope to ease further, should that be necessary to support demand. At today's meeting the Board decided to use some of that scope. It judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target.
Gold kept outside of the banking system is the ultimate un-blocker for your financial safety, especially compared to constipated funds blocked in a bank account. Thanks to silverdoctors for the following image of an Cypriot bank account in the process of being stolen.
Gold and silver bullion coins and bars are important in this regard as they are not about making a capital gain per se rather they are about wealth preservation.
Given we are in an era of competitive currency devaluations, there is also the real possibility of making significant capital gains.
Of fundamental importance is the fact that gold and silver coins are not ‘investments’ rather they are a safe form of money and an important form of financial insurance that everybody should own.
With the risk of a global depression remaining very real, people need to own the financial insurance that bullion coins represent. Bullion coins are like health insurance in that you should own them but hope you never have to use them.
The biggest benefit of owning gold coins either in your personal possession or allocated in secure vaults internationally is that they will always retain a value unlike paper assets and currencies which have considerable counter party risk today – as was seen in the deposit confiscation in Cyprus.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert
discuss the Great Leap Forward in central banks' central planning which
has driven the Housewives of China to buy 300 tons of gold, an act of
disloyalty to the central bank revolution. Max notices that Mrs. Wang
has displaced Mrs Watanabe as the most important buyer in global
financial markets. In the second half, Max talks to Alasdair MacLeod of
Goldmoney.com about everything to do with the physical and paper gold
markets - from open interest to naked short selling by bullion banks.
Consumers select gold finger rings at a gold jewellery shop in Fuyang, east China's Anhui Province, April 18, 2013. Gold jewellery shops through China have lowered price of gold jewellery due to the consecutive decline of gold price global markets recently, which boost sales in these shops. (Xinhua)
A "TUSSLE" to determine gold prices has connected two groups of people who could hardly be more different - Wall Street moguls and Chinese housewives, with the latter turning out to have the edge.
According to "Voice of China" radio program, one of this year's most popular phrases may be "Chinese housewives" - as a major force which reportedly spent 100 billion yuan (US$16 billion) over the past two weeks purchasing 300 tons of gold and thus helping to sustain gold prices at US$1,468 an ounce.
The "Chinese gold rush" has prevented short selling, where gold is sold and then bought back when prices fall. The practice was seen as a possible bid to shore up the US dollar - gold is often regarded as a means of safeguarding wealth against a weak dollar - and to maintain stable interest rates in the US.
China's latest hunger for gold began in middle of last month following a decline in global gold prices after Cypriot authorities made a commitment to sell excess reserves.
On April 12 and April 15, international gold prices dropped by 15 percent, from US$1,560 per ounce to US$1,330 an ounce.
Consumers cram in a gold jewellery shop in Nanjing, capital of east China's Jiangsu Province, April 18, 2013. Gold jewellery shops through China have lowered price of gold jewellery due to the consecutive decline of gold price global markets recently, which boost sales in these shops. (Xinhua)
Some critics said the fall in gold prices was a well-planned scheme drawn up by investment bankers to bolster the US economy, as two days before the price slump, Goldman Sachs released a research note saying gold's prospects for the year had eroded and recommending investors to sell short.
Before Goldman Sachs, investment banks including Barclays, Societe Generale and Deutsche also projected gold had ended its 12-year bullish performance. Societe Generale even predicted an outright crash, saying "gold may have had its last hurrah."
On April 13, China National Gold Group, the country's biggest gold producer, slashed the bullion price from 313 yuan per gram to 298.5 yuan per gram, the lowest level in two years.
This triggered the enthusiasm of Chinese shoppers, who swarmed into jewelry shops desperate to get their hands on a bargain. In most Chinese cities, gold bars were selling like hot cakes and some even reported empty inventory during the May Day holiday.
According to media reports, some people even spent more than 10 million yuan in purchasing gold, a product considered to bring good fortune in China in addition to its value as a long-term investment.
The number of Chinese gold buyers and the money they spent caught out those investment bankers who had bet on prices continuing to fall.
"A large rebound in gold prices is unlikely barring an unexpected sharp turn in the US recovery," analysts at Goldman Sachs had written in its research note.
But to their disappointment, gold prices rose by more than 10 percent yesterday compared with that on April 16.
Guo Tianyong, a professor at Central University of Finance and Economics, said that was likely the result of its latest analysis of the gold market, taking the "Chinese housewives" into consideration.
"Chinese people have a natural love for gold, but such a craze is a reflection of the very limited investment channels available in China," Guo said.
However, the effect may be shortlived. Credit Suisse analyst Tom Kendall said gold wasn't going to rise in a sustained fashion for a long period of time.
He told Reuters: "These buyers are price sensitive and they are not going to be buying indefinitely if the price goes up."