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#26 2014-07-08 19:03:57

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Precious Metals Price Pinch

Yesterday we posted just one of a growing number of investment experts talking about reallocating assets away from equities ahead of a financial crash.  Legendary Warren Buffet too is divesting shares heavily into defensive assets.  Precious metals are one such asset.  But consider this absolutely crucial fact.  The very essence of gold/silver's appeal is its scarcity and the inability to simply reverse that.  How scarce?  The graph below illustrates it's just 0.5% of all financial assets!  So if there was any sort of material shift into gold you can well imagine what the price must do when there is so little to go around.  Consider too this quote from silver analyst Ted Butler just last week:

"While the same 100 million ounces of metal is, effectively, available for investment in both gold and silver annually, because of the great price difference, that translates into a markedly different comparison on a dollar basis. 100 million oz of gold equals $130 billion, while 100 million oz of silver equals $2 billion. These are the dollar amounts required to be expended by the world's investors in order to absorb the new gold and silver produced annually. Not only is it, obviously, easier for the world to come up with $2 billion than $130 billion, it is also easier for the world to come up with more than the $2 billion required in silver to strongly propel silver prices higher. That's the key to precious metals prices – investment demand. That silver requires such a small amount of investment dollars to ignite prices to the upside compared to gold is the key difference between the two metals."

gold%20share%20of%20world%20assets.jpg
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#27 2014-07-09 19:05:49

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

The great gold price tug of war

We are in extraordinary times.  It's a battle of shorts v longs.  Over the last few weeks the big bullion banks have piled on their short positions in both silver and gold to historically high levels.  On the other side we have a world dishing up reason after reason to own gold and silver with the 'real' market buying (going long) and maintaining prices in the face of all the shorting.  This week was providing 2 key events that could see a break out on gold.  Last night's US Fed minutes and today's Indian budget where Modi may or may not remove the restrictions on gold.  Last night the Fed said they would finish QE in October and were still working out their exit strategy re interest rates.  That was a perfect opportunity for the bullion banks to hit the gold price but yet again it defied and rallied higher.  If Modi removes or reduces restrictions it should be tremendously bullish for gold.

Right now we have, just to name a few: debt/easy money fuelled and central bank supported equities markets in bubble territory; bond markets scaring many economists; geopolitical conflicts all over the middle east, Ukraine, and China/Japan; attacks on the USD from Russia, China, France, Iran, South Korea etc; Eurozone faltering with serious bank issues in Austria, Spain, Greece, Germany etc and the ECB yesterday reconfirming they are ready to start their own money printing exercise as things get worse not better; the US recovery driven by misrepresentation of data and blind 'belief' on the eve of QE ending and the consequences of that yet to be seen yet seemingly unavoidable; Japan hurtling on with money printing and the world's highest debt to GDP ratio, and finally China (who got us through the GFC) showing very real signs of slowing and struggling with its own massive debt bubble.  It is by no means an exhaustive list but merely an insight into just some of what is pulling the 'natural' long forces against the 'orchestrated' short forces of the banks.  Even if the banks win this one with all their 'paper' trades most gold commentators are now calling that the last price plunge before the gold and silver rocket takes off.  Take the strain….. pull!


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#28 2014-07-13 19:01:21

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Indian Elephant remains in the room

As we mentioned last week all eyes were on the Indian budget Thursday night to see if the new Government would abolish the restrictive 10% tax on gold and accompanying 80/20 import export rule.  There were no changes which may see two things happen.  Firstly the already rampant smuggling will escalate and secondly there was a lull in buying in the lead up as people expected the tax to be reduced or abolished.  Neither happened so there are some expecting a short term rush in buying to satisfy those needs, coinciding with the strong global demand and price growth of late.  The Indian Government said recently that gold imports fell by 34% to 670.4 t year on year to the end of March 2014. 

If you consider that does not account for the reported smuggling supplementing demand, it is still an extraordinary amount of gold from the country who until last year held the crown for biggest gold consumer in the world.


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#29 2014-07-14 18:52:51

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

What happened last night?

Gold had its biggest drop since December 2013 last night coming off $31 from this time yesterday, or 2.3%.  Likewise Silver dropped too by about 2.5%.  So what has happened?  We wrote last week about the 'tug of war' between the Wall Street traders who have piled on record amounts of short futures contracts and the 'natural' supply / demand, safe haven buyers.  Since writing that piece, last Friday's Commitment of Traders report showed the combined short position increased markedly last week.  Remember this is big traders, with literally $billions at their disposal and the ability to electronically flash trade that amount  'betting' on a price drop.

Keeping that in mind, ask yourself if the chart below (courtesy of Zero Hedge) looks natural?  Zero Hedge reported that US open hit was no less than a $1.37b notional flush.  But as we've said before, and as we saw in 2011, when there is a squeeze in supply they quickly lose control and the price takes off.  There is a lot of data indicating that is not far away and many gold commentators have been calling the next 'bottom' the last before it takes off.  Timing your buy?  There is a much repeated gold commentator quote of "I'd rather be a year early [buying] than a day late".

15Jul14%20prices.jpg
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#30 2014-07-15 19:16:40

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Impressions of suppression

Last night again saw someone dumping about $2.3 billion in futures contracts in one hit, taking gold down $10 in it's wake and great news if you, say, had a heap of short positions….  When we get the sort of blatant price hit we saw Monday night and then again last night, it reignites the speculation of whether this is just Wall Street using their might and high frequency trading abilities to drive markets and make money, or is it indeed 'sponsored' by the US Fed / Governments to suppress gold and make all appear good in the world.  The latter is a 'bridge too far' for most people to believe and very few probably really know.  Irrespective it can't last as it defies mother nature's supply and demand forces (who always win in the end), but we are always reminded of this infamous quote from then Bank of England governor Eddie George: 

"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it."

When a commodity in strong demand has it's price pushed to at or below the cost of production by unnatural trading techniques, at a time when paper assets are looking very bubble like, at any time something could snap and the price let loose.


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#31 2014-07-16 18:58:36

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

BRICS get serious

Brazil, Russia, India, China and South Africa – the so called BRICS alliance have talked for some time about setting up a de-Americanised alternative to the global monetary system for themselves and other emerging nations.  At their annual meeting this week they took their first definitive step by announcing the establishment of their own version of the IMF and World Bank, with an initial size of $100b.  They, with others, are clearly tired of the US centric IMF.  Indeed tellingly Putin was quoted as saying it is "a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies." 

Further in a clear warning on the USD's continued dominance as the reserve currency they also stated "The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures". To put BRICS into perspective for you, their combined GDP of $16t is about the same as the US's and population of 3b nearly 10 times the US's 318m.  Context for gold?  Well for a start it is another step closer to the fall of the USD, but it is also a precautionary step to try and shield themselves from the fallout out of the looming US debt crisis, which is a telling indictment on the global economic situation. Oh, and China, Russia and India bought nearly all the gold produced last year….


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#32 2014-07-17 18:52:15

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

BIS warns again of a crash
In a recent interview with Ambrose Evans-Pritchard of London's Telegraph, and further to our recent article, the head of BIS, Jaime Caruana, said investors were ignoring the risk of monetary tightening in their voracious hunt for yield and the developing economies that got us out of the GFC are no longer removed. 
"Markets seem to be considering only a very narrow spectrum of potential outcomes. They have become convinced that monetary conditions will remain easy for a very long time, and may be taking more assurance than central banks wish to give,"

'Mr Caruana said the international system is in many ways more fragile than it was in the build-up to the Lehman crisis. Debt ratios in the developed economies have risen by 20 percentage points to 275pc of GDP since then.'

Bank of England chief, Mark Carney has since come out and lambasted Mr Caruana for suggesting they should raise interest rates.  Ironically this blast came just hours after a shock rise in UK inflation (from 1.5% in May to 1.9% in June – the biggest monthly jump in nearly 2 years) led to more calls for an interest rate rise.  Carney argued that BIS acted "in a vacuum" …. "outside political and economic reality".  Maybe that 'political reality' is having to give easy money addicted voters what they want rather than 'taking the medicine' so to speak… 
This is just one of a growing number of warnings of a massive crash in the making.  Remember BIS were sceaming of an imminent crash in the lead up to the GFC where again they were ignored by politicians.  If they are right again you'd want to be considering gold and silver sooner rather than later.
You can read the original Telegraph article here.
http://www.telegraph.co.uk/finance/mark … surge.html


You can also listen to our Weekly radio session (Every Friday) by listening here>
https://www.ainsliebullion.com.au/gold- … fault.aspx


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#33 2014-07-20 19:03:44

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Silver demand strong

The Silver price lagged gold for a while this year but now as the spot price is up nearly 7.5% for the year a report by the silver institute shows demand is strong and multifaceted.  ETF's added 7m oz in June, silver coins sales are up 4.5% globally for the first quarter and US silver Eagles at 24.1m oz for the first half, just shy of the 25m oz sold in the record breaking 2013.  We mentioned in a recent Ainslie Radio that India just reported importing 711 tonne in May taking their YTD to 2254 tonne, similar to their huge 2013 number. 

Industrial demand is increasing too with use in ethylene oxide production up significantly (exp 23% for year to 8m oz), solar up 10% (and India announcing last week it will double renewable energy over 10 years), and semi conductors in electronics up 8.8% and the highest quarter in history.

Investment and industrial demand account for 77% of all demand last year so the above is encouraging.

Interestingly China has been subdued in its imports and analysts Seeking Alpha think that is the one to watch as a trigger for a real jump in demand.  Others have noted they have depleted inventories incredibly this year to critically low levels so it may be imminent.  When you consider the extent of electronics and solar panel demand in China that could well be significant.


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#34 2014-07-21 19:11:23

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

China, gold, the big picture

Today we posted an excellent article from Jeff Clark of Casey Research.  If you don't have the time to read it we want to list the key takeaways as we think they are critical:
You should likely ignore the main stream press reports on falling Chinese imports.

- China is importing through Beijing as well now and we only get to 'see' the Hong Kong figures.
- China's central bank hasn't updated their holdings since 2009 and is unlikely to do so until they have their 'fill' as it will likely be high and will drive up prices.  They last reported holding 1054t, or only 1.3% of foreign reserves.
- People talk about the US having 73% foreign reserves as gold but forget the USD is the reserve and hence the US holds little in the way of foreign reserves.  As a % of GDP it is only 2% (IFF they have the gold they say, and that is the subject of much speculation and doubt).
- If analysts of China now holding 4,500 t are correct their % of GDP would be 2% also.
- Clark debunks theories of China's sliding GDP being bad for gold as there is a reverse correlation. 
- The WGC estimates a 25% increase in gold demand by 2017 simply through 300m more Chinese becoming more affluent within 6 years.
- Whilst the gold spot price is largely determined by paper trades on COMEX, a tangible shift away from this is underway, spearheaded by the physical trading (and long term holding) China via its Shanghai Gold Exchange.
- Clark present a good little summary of the pressures mounting on the USD.  Whether its collapse is slow or sudden it is looking more likely and imminent.
- 20% of your wealth in gold should protect you from the ramifications.


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#35 2014-07-21 19:25:01

swoydaz
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

I like the chart feature on your website.

Nice smile

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#36 2014-07-22 19:12:18

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

The Next Lehman
Fresh after Portugal's Espirito Santo filed for creditor protection on Friday night the US Fed has raised serious concerns about Germany's largest bank, Deutsche Bank's US operations, stating they represent a "systemic breakdown" and "expose the firm to significant operational risk and misstated regulatory reports,".  Zero Hedge has for some time now been reporting the global danger represented by Deutsche Banks eye watering EUR55 trillion derivatives position as depicted in the graph below.  For further context that is about the same as global GDP.  Whilst Credit Default Swaps (CDS's) played a big role in the GFC, many believe we just scraped through because somehow the full extent of these and other toxic derivatives in the global system didn't play out to the extent they threatened.  Since the GFC the world has taken on much more debt, entwined the GFC saviour emerging economies and looks more prone to the next "Lehman" event bringing it all down harder than last time.  Whilst the relatively small Espirito Santo case seems to have been absorbed, something like Deutsche Bank could make Lehman look relatively insignificant.

:: Discover special and rare bullion items in our new product section 'Special Bullion Items' - https://www.ainsliebullion.com.au/produ … fault.aspx ::

DB%20Derivs%20in%20context.jpg
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#37 2014-07-23 19:02:24

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Past Peak Gold
One of the most respected analysts of gold production, SNL Metals & Mining have just released a report that confirms what we've reported previously from other credible sources in that gold discoveries are diminishing, but critically they also report on how time to production too is increasing.  That means fewer new gold discoveries are also taking longer to get to production.  Combining this with our previous articles on diminishing yields and increasing costs (or tonnes of ore & costs to produce a gram of gold) and it is a dire forecast for gold supply in an already constrained market.

The 2 graphs below need little explanation and paint a very clear picture of us having passed peak gold supply.  SNL point out too that one needs to keep in mind conversion and recovery not captured in these graphs.  They estimate a 75% rate for converting resources to economic reserves (noting this is likely underestimated with worsening political, environmental and economic hurdles) and a 90% recovery rate during ore processing.  So for the last 15 years that translates to new discoveries replacing only half of the gold produced during the same period.  Got yours yet?

gold%20production.jpg

gold%20years%20to%20production.jpg
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Source:


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#38 2014-07-24 19:12:21

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Where to for gold and silver?
The main stream press are presenting 2 very different stories yesterday and today.  One is that gold will fall further as demand in China has come off 19% and the US is on the road to recovery, and 'supported' by Goldman Sachs calling for US$1050 by the end of the year (you know, the same Goldman Sachs that talked it down last year whilst buying up long on the other side).  Anyone who reads our articles and listens to our weekly wraps must surely be questioning the US recovery and Chinese demand figures. 

But to be honest we don't have the track record of calling markets that the infamous Levy's do.  Other articles are running the Levy's call for an imminent US recession.  The Levy's of the Levy Forecast have an enviable track record having accurately predicted the 1929 great depression timing, decades of turns in the business cycle since (often against 'conventional' thinking), and more recently the 2000 dot com crash and GFC crash, with the latter even spelling out the Fed's response to it which has played out accurately.  Interestingly Levy predicts the crash will come from outside economic forces not necessarily from within the US.  Which is right?  We don't know and you don't know and that is why balancing your wealth is so critical as the world navigates unchartered economic territory.  Gold and silver are perfect hedges against the last story and are 'on sale' because of the first story.  It's a win win.

Also, jump across and enjoy today's Ainslie Radio - highlighting the news of the week in a short radio session.
https://www.ainsliebullion.com.au/gold- … fault.aspx


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#39 2014-07-27 19:12:18

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Central Banks and Gold
As the world grapples with multiple wars and the issuer of its global reserve currency, the US, printing nearly $4t since the GFC and holding interest rates to near zero, central banks are clearly preparing for the worst… they are buying gold.  By the end of 2013 the world's central banks held 30,500 tonnes of gold or nearly a fifth of all the gold ever mined.  From the time we left the gold standard in 1971 central banks began to sell their gold.  When the penny dropped with the GFC that this new global economic experiment wasn't working, and the US Fed's response to fixing it was actually making it worse, they all started buying up gold again and have done so continuously since the GFC.  We are in a world now seemingly perilously close to either an easy money bubble or war triggered financial collapse.  And 'war' may not be the usual guns and bombs, it could be economic as Russia's ambassador to the U.K. said last week - "sanctions would not serve the interests of the countries concerned, including the U.S., and would trigger a long-anticipated endgame of the present global crisis."
If you think investing in physical gold and silver is speculative, Central Bankers are by repute some of the most conservative investors around as they are charged with protecting their respective country's wealth.

1-oz-goldcoin-kangaroo-PerthMint.jpg
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#40 2014-07-27 19:29:57

sammysilver
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

By the end of 2013 the world's central banks held 30,500 tonnes of gold or nearly a fifth of all the gold ever mined.

Reference please?


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#41 2014-07-28 19:09:21

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Bullish fundamentals for gold
Last week we reported on SNL's latest gold mining report.  If you haven't read it, we urge you to here.  The following quote from Hebba Investments provides insight in to how important a respected analyst thinks it is too…
"There is much more to be gleaned from this report, but for gold and mining investors, it is absolutely critical to understand what we think are the major conclusions discussed in the report:
    •    Discoveries of gold resources and reserves have been falling and are not keeping up with gold production
    •    The trend of falling gold discoveries has accelerated over the last decade and the replacement rate is around 50% of the production rate
    •    The time it takes to bring a discovery to production has increased substantially to close to twenty years
As the supply and production picture only worsens despite the rising gold price, we believe prudent investors should recognize a significant opportunity to make money by buying and holding gold (and their paper equivalent the gold ETFs (GLD, CEF, PHYS)) - though we stress that physical gold and paper gold are two VERY different investments and investors should only invest in the ETFs after creating a comfortable physical gold position.

This is not a complicated trade and everything which we've said so far has nothing to do with the many other catalysts that we write about on a regular basis (such as the US fiscal position, the battle between bondholders and the Fed, increase in central bank purchases of gold, or the deteriorating world order). In fact, even the supposed improvement in the US economic picture (the main reason investment banks forecast a falling gold price) would still have no effect on this much more important fundamental issue."

This article contains links to other articles : Visit https://www.ainsliebullion.com.au/gold- … fault.aspx


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#42 2014-07-29 18:58:41

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

GDP
Tonight the US gives its first report of their Q2 GDP after the woeful negative 2.9% Q1 result for which they largely blamed the weather.  Our regular readers and more particularly listeners to our Weekly Wrap radio will know the much prophesised US recovery is not as clear as the equities punters would like to believe.  But we should all be reminded just what GDP reports.   Gross Domestic Product = C + G + I + NX, where simplistically C is private and public consumption, G is government outlays, I is investments and NX or Net Exports is exports less imports.  We have seen little since Q1 that indicates any sizeable turnaround and remember 2 negative quarterly results in a row is a recession.  But do you see something missing? Something topical in much of what we discuss?  Debt.  With enough easy money, enough printed money, enough debt fuelled Government spending, and an artificially deflated dollar (making your exports stronger) anyone can create a decent GDP if they 'need to'. The IMF and the US themselves have continually downgraded their 2014 GDP estimates, the latest to only 1.7% which after -2.9% still needs some pretty good numbers for the other quarters.  The more cynical will not be surprised by a robust GDP print tonight given how it can be manipulated with debt and is nowadays so often quietly 'corrected' down on subsequent adjustments to the 'final'. 
This is not just a US phenomenon by any means.  The graph below illustrates very clearly the disconnect in the world today.  Global GDP is still falling despite all the easy money fuelling the "I" in the equation above and global sharemarkets rising.  Greed, riding that never ending sharemarket rocket, too often overrules common sense.  Common sense looks at the graph below when equities are at all time highs and gold/silver, the safe haven when things collapse, at relative lows, and looks to buy low and sell high.  In the US gold has outperformed shares so far this year as more and more people are applying common sense.  Are you?

gdp-msci-cross.png
Source:


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#43 2014-07-29 19:05:15

Court Jester
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

AinslieBullion wrote:

GDP
  In the US gold has outperformed shares so far this year as more and more people are applying common sense.  Are you?

https://www.ainsliebullion.com.au/Porta … -cross.png
Source:

we are not in the US and gold has not out performed our share market


please know your audience and dont rehash crap from other sites


<--------------------------------------------------------- SIDEWAYS --------------------------------------------------------->
quote=sammysilver 25/10/13  ----- PMs will drive silver to over $30 by Christmas with the GSR dropping to sub 50. I've overextended myself at sub $24 but will keep buying up to $30 then sell half my stack at Easter at $36 and buy up on the next dip if there is one.
Running Telly of incorrect to correct Predictions by SammySilver -- 7:1 as of 10/08/16

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#44 2014-07-29 19:28:47

STC
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

I think when discussing US GDP figures that comparing gold to US share market is appropriate.


We are all here because we are not all there.

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#45 2014-07-30 01:28:19

badhammy
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Court Jester wrote:
AinslieBullion wrote:

GDP
  In the US gold has outperformed shares so far this year as more and more people are applying common sense.  Are you?

https://www.ainsliebullion.com.au/Porta … -cross.png
Source:

we are not in the US and gold has not out performed our share market


please know your audience and dont rehash crap from other sites

   THANK YOU CJ.
I attempted to point this out previously but like their customer service, arrogant and supported by "die hard" members

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#46 2014-07-30 18:51:49

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

When QE is gone
Last night the US Fed tapered another $10b off its monthly Quantitative Easing (QE) money printing program (and announced a 4% estimate of Q2 GDP!! – if you haven't read yesterday's missive on GDP you should to put that in context).  QE is now down to 'only' $25b per month and on course for being phased out by October.  So why aren't stockmarkets crashing and interest rates rising?  Casey Research penned a great article yesterday that simply says they went so hard with QE3 that there is some slack in the system – i.e. the Fed's balance sheet grew much faster than US Gov debt but once this is 'used up' history would suggest we will see the sharemarket crash.  The graph below tells the story..
Don't forget too that we have a US Gov that hasn't run a real budget surplus since 1969 and need to keep selling debt (US Treasuries/Bonds) to pay for this (and the interest on the $17.6t already accumulated).  We also have a world getting increasingly frustrated by this and not buying that debt like they used to.  So when the Fed stops buying it, who will?  And if they let interest rates rise how will they pay their interest?

NOTE – if you haven't spotted it, we have put up a new video on the home page of our website.  It paints a very clear and compelling case for silver's supply and demand dynamic.  A must watch!

Casey Research Article - http://www.caseyresearch.com/articles/w … market-yet

qe-and-shares.jpg
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Last edited by AinslieBullion (2014-07-30 18:52:12)


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#47 2014-07-31 19:08:07

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Economic Drugs
We are in interesting times… Japan yesterday reported its worst industrial production fall since the 2011 tsunami and nuclear plant scandal.  That industrial production was across nearly all sectors and coincides with rising inventories (making it even scarier) and last week's increased trade deficit as exports fall.  It is also seeing economic growth falling with some analysts predicting a negative 3% GDP figure for the last quarter.  Japan has arguably the most aggressive stimulus program in the world as it has printed $75b/month and facilitated zero interest loans to the same industries that are falling, together with devaluing its Yen.  Whilst this program dragged Japan out of its multi decade deflationary trap and saw great gains in sharemarkets it is now looking to be not enough, and incredibly there are calls for more stimulus.  i.e. the heroin is no longer good enough so lets move on to ice – both of which are hiding the real problem and creating a bigger one.
There are parallels with the US that can't go unnoticed.  The US is in rehab, easing itself off the heroin (which drove up sharemarkets etc)  with tapering and are now down to "only" $25b/month and planning to be 'clean' by October albeit continuing with the zero interest rate 'methadone' for the foreseeable future.  The 4% GDP estimate this week is seen as a sign of a recovering patient.  But as we reminded readers on Wednesday debt fuelled stimulus can always help GDP, and estimates seemingly always now get downgraded (Q1 US GDP started at 0.1% before revisions to -2.9%).  Furthermore, just as Japan has growing inventories, 1.7% of the 4% US GDP number was growing inventories (you know, stuff produced but with no buyers yet) and easy money fuelled investments takes that up to 2.5%.  As we discussed yesterday, the US is yet to feel the effects of QE/heroin withdrawal.  Some analyst are saying last night's stocks plunge was the penny dropping with the market after the Fed's talk on Wednesday night.
And now it is looking increasingly likely that Europe (who last night saw the worst CPI figure since 2009) will be hitting the hard stuff to try and get their party going just as Argentina couldn't pay their dealer.
There is an increasing feeling that this is all about to go horribly horribly wrong…. For those not holding gold and silver that is….

___
Also, today's Ainslie Radio is now live - Listen here - http://goo.gl/FVkDTm
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#48 2014-08-03 19:18:27

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Nervous times in shares
Consider the graph below in the context of what is going on in the world right now.  As Argentina defaults (with as yet unknown CDS derivative consequences), US and Europe sanction Russia (with as yet unknown consequences), wars escalate in Gaza, Ukraine, Syria, Libya, etc etc, struggling economies continue with or ramp up easy money / debt, the BRICS alliance continues it move away from the USD (with the latest being India and Russia looking to commence non USD trade), etc etc.
The graph below is a collection of global equities indices weighted 41% to US shares.  The graph is clearly at heady heights and Friday just a small glimpse of how flighty it could be in the above environment.  No one knows how long or high it could go but in this current environment a bit of safe asset hedging just seems common sense.

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#49 2014-08-04 19:06:22

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Shanghai Silver v COMEX
As we've seen in gold there is an interesting development in silver trading as well where the largely 'paper/cash' traded COMEX futures, which incredibly inform a lot of the pricing we see, is being overtaken by the Shanghai Futures Exchange which sees most trades settled in real metal not cash.  So at a time where the big commercial (JP Morgan et al) traders are massively 'short' silver on COMEX, the inventories in the Shanghai Futures Exchange are running low…. two very different tales and only one 'real'.  The 'East' is taking more and more control of precious metals and that is a good thing for those who hold physical metals.  SRSrocco reported recently that trading volume on the Shanghai Futures Exchange and Shanghai Gold Exchange are nearly 3 times higher than the volume at the COMEX.  If you were holding a heap of paper short contracts on COMEX, you'd surely be getting pretty nervous looking at the graph below, especially in a world in economic and geopolitical turmoil.

- We've just started stocking XAG's, with the closest to Spot pricing (cheaper than coins) it's a great way to stack some fine silver.
https://www.ainsliebullion.com.au/produ … fault.aspx

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#50 2014-08-05 19:14:07

AinslieBullion
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Re: Ainslie Bullion - Daily news, Weekly Radio and Discussions

Too Big To Fail
TBTF – the acronym at the heart of the systemic risk of global economic meltdown.  In the week that saw Portugal's central bank take control of the failed Banco Espirito Santo's assets and deposit-taking operations with a "loan" (bail out) of $6.6 billion we now see US regulators reject their big bank's "Living Wills".  Living Wills are supposed demonstrate how any one of them can fail without bringing down broad economic failure or the need for tax payer funded bail outs as we saw in the GFC and again this week in Portugal.  In response to examining 11 banks with assets over $250b each, via the Wall Street Journal the FDIC said "Despite the thousands of pages of material these firms submitted, the plans provide no credible or clear path through bankruptcy that doesn't require unrealistic assumptions and direct or indirect public support,".  The FDIC has given these banks until July 2015 to improve their plans.
What makes this particularly scary are the following 2 graphs courtesy of Zero Hedge.  The first shows no less than $230 trillion in derivatives exposure by the banks.  The second shows just 4 hold $213t of that!  No "Living Will" or bail-in will cover the domino effect just one of these failing will cause.
Think we are immune in Australia?  If you are wondering how the major banks are offering these new cheap 5 year fixed rates when our cash rate is unchanged, you may be surprised (shocked/scared) to know it is through accessing cheap funds from overseas banks.  We are as linked into this mess as anyone…

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