NAV Premiums of Certain Precious Metal Trusts and Funds

“I believe in aristocracy, if that is the right word, and if a democrat may use it. Not an aristocracy of power, based upon rank and influence, but an aristocracy of the sensitive, the considerate and the plucky.

Its members are to be found in all nations and classes, and all through the ages, and there is a secret understanding between them when they meet. They represent the true human tradition, the one permanent victory of our queer race over cruelty and chaos.

Thousands of them perish in obscurity, a few are great names. They are sensitive for others as well as themselves, they are considerate without being fussy, their pluck is not swankiness but the power to endure, and they can take a joke.”

E.M. Forster

The word 'pluck' means spirited and determined courage. These days I think it might be best expressed as 'character,' or 'to be a mensch.

And it isn't often found amongst the financiers, or the one percent, or our pampered political overlords, with a few notable exceptions.  There is something about power and money that softens a person's mind and moral sensibility. 

They tend to become obsessed with themselves, and their special needs.  They all too often are told what they want to hear, like the admirers do for beautiful women who lose all sense of their real worth.  And so they lose the character that comes from remembering our common humanity, memento mori, and our own fallibility, weakness, and quite frankly, unworthiness.  No wonder the parable about the camel and the eye of a needle.

Therein lies the root of tragedy.  The best lack all conviction, while the worst are filled with passionate intensity, as Yeats observed in 1919.

Gold Daily and Silver Weekly Charts - Morgan Gold Warns of Possible Physical Gold Shortage

All right I will confess up front, that during the day I have been watching recordings of the Winter Olympics curling matches which were held at Sochi earlier today. The women's match between the US and the Swiss was of particular interest, especially the strategy of the two teams led by their captains, Erika Brown and the legendary Mirjam Ott.

 I will not give anything away if you have not yet seen it. I will be watching the curling matches all week.  It is one of my few idiosyncrasies.  Most Americans have never heard of it.

The bit of controversy today is how much gold exactly is flowing from West to East, most specifically to China?

Bloomberg had a piece in print today about the record amount of gold that was imported by China last year through Hong Kong, exceeding 1,000 tonnes for the first time.  You may read it here.

What was even more interesting were the gold bullish comments that were made by two guests, one from Pimco and the other by Ed Moy, the chief strategist at Morgan Gold.  I include the interview below. He notes that there is concern about a physical gold bullion shortage.

"Quantitative easing has had a distorting effect on the price of gold...Overall when you look at gold, there are two separate pieces here. One is how the West looks at gold, and they have been investing in a lot of electronic derivatives and proxies for gold. Whereas the East has been buying a lot of physical gold. That demand has actually gone up. China looks like it bought 1,000 tonnes in 2013 making them the number one buyer in the world

Do you have a concern about a possible gold shortage?

Absolutely!

How ironic, now that JPM has hammered the paper price of gold down and covered their shorts, and are said by some informed analysts to be sitting net long gold.  Classic.

By the way, Morgan Gold is NOT associated with JP Morgan.  I want to make that clear.

Koos Jansen has an even better, more comprehensive article discussing the China gold action through Shanghai. The Shanghai Gold Exchange delivered 2,181 last year.   And this may not include official gold purchases by the People's Bank of China.  You can read that piece here.

I still think that most of the mainstream media and analysts are still missing the big macro trend change in gold buying by the central banks, and the reasons for it.  And you know that I think that many of them do not get it, because they do not wish to get it.  It is dangerous to imagine that the status quo may change.

Gold is moving from West to East.  And the time is coming when all will be revealed, when the paper gold market freezes up in shock, and the call from the world is made, stand and deliver.

SP 500 and NDX Futures Daily Charts - All God's Children

Stocks had a little upward bias today, but are now more firmly up against resistance.

VIX has fallen back down to calmer levels as you can see.

There are enough economic statistics this week to make things interesting.

Have a pleasant evening.

Tainted Meat Joins the Stench of Political and Financial Corruption

“Wall Street had been doing business with pieces of paper; and now someone asked for a dollar, and it was discovered that the dollar had been mislaid.  It was an experience for which the captains of industry were not entirely prepared; they had forgotten the public.  It was like some great convulsion of nature, which made mockery of all the powers of men, and left the beholder dazed and terrified.   In Wall Street men stood as if in a valley, and saw far above them the starting of an avalanche; they stood fascinated with horror, and watched it gathering headway; saw the clouds of dust rising up, and heard the roar of it swelling, and realized it was only a matter of time before it swept them to their destruction...

But it is difficult to get a man to understand something when his salary depends upon him not understanding it."

Upton Sinclair, The Moneychangers


"You are a den of vipers and thieves. I intend to rout you out, and by the grace of the eternal God, I will rout you out."

Andrew Jackson

It was discovered that in all that blizzard of corruption, and the paper that covered it up, that the very basis of the value of things had been 'mislaid.' And then the deluge came.

If you listen to the reasoning of 'free market' types, and their paid mouthpieces and demagogues, this kind of thing could not happen, because companies, being rational and focused on the long term, would not allow tainted meat with their name on it to be sold into the markets.

They would not risk the lawsuits, and damage to their reputations. It is a similar argument that holds that financial markets need only light regulations because people will manage their own behaviour for the ultimate good, with almost perfect rational and altruistic self-constraint.

But alas, we know this is not true, as anyone who ever travels on a major highway can tell you. People and their tendencies to greed and careless stupidity require a certain association of people in a society for their common good, to take on not only large tasks with common and broad benefits to the pubic, but also in order for the majority to protect themselves from criminals, cheats, sociopaths, and plain old ignorant selfishness. This is why we establish police and fire departments, and have health laws, for example.

Government is never perfect. But its occasional flaws and corruption are no reason to do away with it. The power of government must be held in balance, but so must the power of private wickedness.

If you bother to look into the history of certain types of laws,  especially those designed to protect the public, and the often long progressive efforts of many dedicated souls to achieve them, from civil rights to basic food safety to voting rights to consumer protections against financial fraud, you can see what they have accomplished, and how their effectiveness must be upheld and occasionally renewed, since the corrupting power of easy money respects few if any boundaries.

Goodness may occasionally falter, but evil never sleeps.  And as many are now discovering, telling the truth becomes a subversive act, in times of general deceit.   Notice the patterns of smears and dehumanization of certain types of people.  This is how it begins.

And so it seems that every other generation forgets the lessons learned by their grandparents, and casts off their protections in fits of foolishness fuelled by the sweet words and slogans of the pampered princes of easy money, and their puppets, who will say and do anything for power and position.

Those who forget history are doomed to repeat it, and this is surely the story of the last thirty years, especially in the area of financial regulation, and the political standards of oaths and stewardship.

Recall of nearly 9 million pounds of meat not fully inspected
By Greg Botelho and Janet DiGiacomo, CNN
February 9, 2014

(CNN) -- Some 8.7 million pounds of meat from a Northern California company have been recalled because they came from "diseased and unsound" animals that weren't properly inspected, a federal agency announced Saturday.

The recall affecting Rancho Feeding Corporation products -- as detailed by the U.S. Department of Agriculture's Food Safety and Inspection Service -- marks a significant expansion of one announced January 13, when just over 40,000 pounds of the company's products were recalled.

According to the U.S. agency, Rancho Feeding "processed diseased and unsound animals and carried out these activities without the benefit or full benefit of federal inspection."

"Thus, the products are adulterated, because they are unsound, unwholesome or otherwise are unfit for human food and must be removed from commerce," the FSIS reported. The Petaluma company made the recall...

The FSIS recall notice indicates a "reasonable probability" that consumption could result in "serious, adverse health consequences or death."

Attempts to contact the Rancho Feeding Corporation for comment were unsuccesful Saturday and Sunday.

A wide range of products are listed in the recall, including beef carcasses and various parts such as heads, cheeks, lips, livers, feet and tongues in boxes of 20 pounds and bigger. Forty-pound boxes of veal bones and 60-pound boxes of veal trim are included as well...

Read the entire news article here.

Report of 'Intense Investigation' Into London Death of JPM VP

It will be interesting to see if this 'intense investigation' actually reveals anything of substance.

It might have been something inadvertent, or a suicide.  There was a suicide of another prominent financier in London just two days earlier there as well.  Perhaps it is a contagion.

Or just more collateral damage from the financialised, predatory economic environment I like to call The Hunger Games. 

And may the odds be ever in your favor.

Suspicious Death of JPMorgan Vice President, Gabriel Magee, Under Investigation in London
By Pam Martens
February 9, 2014

London Police have confirmed that an official investigation is underway into the death of a 39-year old JPMorgan Vice President whose body was found on the 9th floor rooftop of a JPMorgan building in Canary Wharf two weeks ago.

The news reports at the time of the incident of Gabriel (Gabe) Magee’s “non suspicious” death by “suicide” resulting from his reported leap from the 33rd level rooftop of JPMorgan’s European headquarters building in London have turned out to be every bit as reliable as CEO Jamie Dimon’s initial response to press reports on the London Whale trading scandal in 2012 as a “tempest in a teapot.”

An intense investigation is now underway into the details of exactly how Magee died and why his death was so quickly labeled “non suspicious.” An upcoming Coroner’s inquest will reveal the details of that investigation.

It’s becoming clear that when JPMorgan tells us “nothing to see here, move along,” that’s the precise time we need to bring in the blood hounds and law enforcement with the guts to get past this global behemoth’s army of lawyers who have a penchant for taking over investigations and producing their own milquetoast reports of what happened...

Read the entire story here.

Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Fizzle, Precious Metals Held in Check

Today was an exceptionally interesting day, with a lot of things going on from the very start.

The premiere event was the US Non-Farm Payrolls Report, which pretty much sucked out loud, coming in with an underestimated 113,000 jobs versus a 175,000 expected. This was mitigated a bit by the 'private jobs' added of 142,000 which was closer to estimates. And it could make some feel good because it was in 'government jobs' that much of the shortfall occurred.

I didn't see how much play was given to the complete revision of all the employment numbers going back as far as I normally look. They even revised the CES Birth-Death model which is a plug, or imaginary jobs, if you prefer. How do you revise stuff you pretty much swagged (made up) in the first place?

So anyway, I was cranky off the get go, because I had to go and manually revise my spreadsheets everywhere, in addition to making minor corrections on the graphs for the first report of a new year. So I did not get a chance to do any serious analysis of the changes that the revisions made. I'll try to get to that later next week unless I find someone who does a good job of describing the effects that I can simply show to you. Why do extra work?

But then someone passed around a nice textbook description of how bullion banks work, and it prompted me to write something that I had been thinking about, but wasn't quite ready to do. That was put up intraday here. I hope it is of some value to you, if in no other way than to help you order the things you would like to know.

I probably said far too much in an attempt to be even-handed, and circumspect, in trying not to colour a particular situation with the broader brush of revulsion against a tendency of the TBTF Banks, some of whom are bullion banks as well, to misprice risk.  And of their one percent owners who promote abhorrent social policies and predatory 'capitalism' through fine sounding economic rubbish.

It would probably be better for those who are trying to defend their particular groups against unjust attacks to not attempt to justify the broader financial landscape which they might inhabit, because this financial system is so profoundly fouled that it will be like trying to clean the Augean stables.

Some days one might become discouraged at how the United States of Amnesia so quickly forgets the lessons, not from history, but from just a few years ago. This applies to both foreign policy and financial chicanery. It really is amazing at times.

Remember we are in a currency war, almost a kind of new cold war at times, and great changes are occurring in the international currency structures. In times like these, some hysteria is not uncommon,. There is propaganda, and sometimes not very subtle if you have a discerning eye for it, even in some seemingly petty and unrelated things.  And the deceitful are emboldened because they think they are operating with official sanction, and indeed sometimes it seems as though they are.

What, for example, was the Bank of England thinking when it turned a blind eye to trading desks actively gaming the foreign exchange markets to the point of cheating their customers? Is this some professional courtesy, or a sense of perverted noblesse oblige that entitles an entire financial class to an innovative seigniorage that exploits the difference between earning paper wealth and the ease by which one can steal it, if you are in the know.

What a world.  This too shall pass.

Have a pleasant evening.