Sunday Night, Summer Recap

The Summer of 42.   A little jazz instrumental version of this classic from the movie "Summer of 42"

Were any of you around?  The world was at war.  We were still in the throes of the great depression.  FDR had set-up the Japanese Interim camps.... Suffice to say, it wasn't the happiest of times.   Let's move forward 70 years and do a quick review of the Summer of 2013 to date.  

Yes, summer is quickly coming to an end. Do you feel the nip in the air as Labor Day fast approaches and the Back To School sales are already in high gear? For our purposes here and discussion of economic affairs, I'm calling summer the period between Memorial Day and Labor Day.  No, I'm not looking to cheat anybody out a few more BBQ's and a few more days wearing flip flops.   (I really don't like those things)

I'd like to briefly recap the events of the Summer of 2013. To quote Mr. Turd Ferguson, “If you been paying attention you don't need a recap” However, I think it might be a useful exercise to look at the events through a larger lens to see the intensification of financial and world political events which have unfolded in the summer of 2013 before we look at what is to come.  Sometimes when you are too close, you do not catch their significance.   In my estimation it has been an historic and unprecedented summer so far and things look like they will be getting more interesting both in geopolitics and our gold and silver investments.

It will be interesting to see how statist history writes some of these events for future generations but while it's fresh in our memory, let's recap.

The New Police State and The End of The Industrial Age?

Two significant trends began in 2013. With the revelations of the Edward Snowden Affair, we learned how Washington had escalated it's activities on the War on Terrorism from enemies abroad to monitoring the day to day activities of it's citizens. Although some are speculating that much of what has been reported is a con job and your government is not as smart as you think.   Fear or fact?  http://jonrappoport.wordpress.com/2013/07/20/nsa-genius-spying-eye-or-bumbling-idiot/

Detroit The End of the Industrial Revolution?

The city of Detroit declared bankruptcy, the largest municipal insolvency in American History. Banks, bond insurers and pension systems await the verdict of a Federal Judge. Robert Kiyosaki gives a good interview with Greg Hunter of USA Watchdog. The point I want to draw to your attention is that he believes that bankruptcy of Detroit represents the end of the industrial revolution.

For those of you who don't know Kiyosaki ,the real estate self help guru is uber-bullish on silver and gold and has been since at least the early 2000's when I heard him speak.   I also believe he is the owner of silver mines in China. At least that is what he said some years back.  I never paid much attention to him until he began talking silver and then he had my attention.

The Arab Spring Continues.

The west again has it's hands dirty as the US backed interim Egyptian government began a full style military crackdown on thousands of pro-Morsi protestors.  The civil war in Syria continues with allegations of chemical warfare, unsubstantiated claims in the alternative blogosphere about nuclear weapons being used and the US debates whether or not to send weapons to the Syrian's insurgents.  

While all this happens, it seems the human toll gets lost in the politics.  Over 20,000 innocent citizens have had to leave everything they own, get up and get out of dodge and have been crossing the border into Iraqi Kurdistan.

This kind of puts financial repression in a new light.  It's hard to talk about how bad it is if you consider what it must be like to have to leave everything on a moments notice with only your clothes on your back to cross the border into a new country.  While we might complain how bad our financial repression is from our arm chair only 20 steps away from a full refrigerator, next time you ask the question how bad can it get, see if you can find an Egyptian who can't find food in the markets, or a Syrian who crossed the boarder to save the life of his family for their perspective.

Bail-In's and Taper Tandrums

Enough of perspective, lets get back to the economics of the day, by far the buzz words for the Summer of 2013 up to this point have been “Bail-Ins” and “Taper”

Taper was the talk of the town this summer. Back in May Bernanke suggested that taper could happen as early as June and then in his June comments put off that decision until September. Ellen Brown www.webofdebt.com indicated that, he wiped out about $3 trillion dollars from the global equity markets with his comments and after the June 18th meeting, gold came crumbling down.

Bail-In has been all the rage since the Cyprus bail-ins. This summer Santa went on his 2013 Bail-In tour. When he first appeared in New York, he told investors they had two years to get their money out of the system and then it became his summer theme that people should get out of the system NOW. I can't account for his urgent change in tone but certainly we do know for a fact that the bail-in model is based on an agreement between the Bank of International Settlement, aka The Tower of Basil, and endorsed at a 2011 G 20 summit.

In June, the EU agreed to a new banking system in which their uninsured depositors would face losses. http://www.nytimes.com/2013/06/27/business/global/europe-agrees-on-new-banking-rules.html

Now Let's Briefly Look at the Future

The big news for gold investors is the gold news flow is starting to turn positive and I'm sure by now you've listened to your favorite TA analyst either on Turdville or around the blogisphere and the rumor mill is that we could start seeing some bullishness out of the metals at least for a time.  If you're not reading AM's The Setup Forum regularly, you might consider it especially if you are not receiving all the information that Turd is putting out in the Vault.   There are some very smart individuals calling the direction of the market and looks like end of August, we could see a nice move in the metals. 

I mentioned the other day that Forbes Magazine has had a sustained flow of articles bashing gold and then all of a sudden JP Morgan puts out a buy signal for gold and curiously the news flow has changed. 

Time To Buy Gold Again?

http://www.forbes.com/sites/sharding/2013/08/16/time-to-buy-gold-again/

The Turd  has been talking about JPM's going bullish on gold but I don't recall if it has been mentioned here in the forums so for your reading pleasure.  I'll just leave you with the articles and await the communities speculation as to why it's happening.  I know the Turd probably has a few words to say about it.

http://www.businessinsider.com/jpmorgan-buy-gold-2013-8

http://blogs.marketwatch.com/thetell/2013/08/16/j-p-morgan-is-bullish-on-gold-even-after-paulson-dumped-holdings/

As Turd was saying the other day in my mining blog, weve seen an sizeable increase demand and buying in India and China after the release of numbers by the World Gold Council.   Here is a good article on those numbers as well as a little film for your viewing pleasure.

http://www.goldmadesimplenews.com/interviews/world-gold-council-q2-2013-gold-demand-11430/


 

The metals while seasonally fickle, have had some very nice run-ups in late summer/early.  Here are some seasonal charts that tell the story up until 2012. .

Gold Seasonal charts

http://www.seasonalcharts.com/classics_gold.html

Silver Seasonal Charts

http://www.seasonalcharts.com/classics_silber.html

We can look forward to India's festival season which is a popular time to get married with the five day Diwali festival in November when Indians flock to gold shops. Consumer demand in-tact? Check.

Russia Buying Gold

Russian continued their buying spree until mid-June when Russia all of a sudden stopped it's gold purchasing with economists pointing to it as a sign of continued disinterest in gold. Well than came July, when Russia began accumulating again 0.3 metric tons to 996.4 tons.

There is also no question that the appetite for Gold for Chinese middle class remains high up 157% as they account for quarter of the global gold demand based on the numbers put out by the China Gold Association.

Some of you might have seen this article by Jim Rickards predicting that China's gold purchases would reach 5000 metric tons by 2014.  If not, here it is for your consideration.

http://www.arabianmoney.net/gold-silver/2013/07/27/china-to-report-gold-reserves-of-5000-tonnes-next-year-says-jim-rickards/

And one more interview by Rickards who suggests that China's accumulation of Gold to go on the gold standard is a bunch of hype and they are accumulating Gold to make the Yuan more attractive so it is included in the new emerging world currency the SDR.

http://www.forbes.com/sites/kitconews/2013/08/12/rumors-of-a-chinese-gold-standard-are-overblown-cpms-christian-and-author-jim-rickards/

I'm not sure if Rickards comments were a direct response to Zerohedges article of 8/04 but here it is for you to review and I'll let you choose which side of this debate you favor.

http://www.zerohedge.com/news/2013-08-04/did-china-just-fire-first-salvo-towards-new-gold-standard

I think that's enough for your consideration and impetus for a healthy discussion with JPM going gold positive, the ongoing saga of negative Gofo rates and backwardation.   And I know that Turd has some interesting stuff to present both the forum community and the Vault community.    When Turd says it should be an interesting week, I have no reason to doubt him. 

In the meantime, Green Lanterns super powers are waning and has to go get some rest to  deal with a late summer cold/flu. Last week a computer virus, and this week a body one.  And oh yeah, it's a nasty one!!       

73 Comments

Kailiku's picture

Furst!

My Furst Furst?

PMBull's picture

Two

Two

Gold and Silver Up Tonight!

:-)

Doc1800's picture

Close enough

Should be a good week

silver66's picture

top 5

sweet

Silver66

ag1969's picture

Prism

DeaconBenjamin's picture

Silver price up 14% in best week for five years and ready for an

The most volatile of commodities posted a thumping 14 per cent gain last week, its best week in five years. Is this just a flash in the pan or is silver now set up for an autumnal price spike?

Step back a little and consider the win-win position for precious metals. Silver is just a leveraged play on gold, also up by 4.5 per cent last week.

Win-win

Basically if the recovery scenario emerges on top this autumn then industrial demand for silver is going to be far more robust than anticipated by the price crash of April. If the US uptick makes it to the eurozone and UK and China stabilizes then silver is overdue for repricing as an industrial metal.

Then again if the US recovery proves unsustainable in the face of rising interest rates then gold and silver will benefit as safe haven assets. That is what we saw last week with both the stock market and bond market selling off as precious metals rose.

A third scenario has a global financial crash with more money printing and a rush to inflation-protection assets.

It is always nice to be on the right side of a win-win situation as an investor. Hedge funds like to operate in this kind of niche. They’ve been the biggest drivers of the bear market for precious metals this year and will also be the biggest buyers now.

http://www.arabianmoney.net/gold-silver/2013/08/17/silver-price-up-14-in-best-week-for-five-years-and-ready-for-an-autumn-spike/

RationalMind's picture

Lucky 7

Metals going up in Asia tonight. Bodes well for next week.

Keep the faith and stack.

Mammoth's picture

Eight is Enough!

Finally arrived early enough in a new thread to post an idiotic comment about being in the top ten, while having nothing relevant to say about PM's.

Enough indeed.

Mudsharkbytes's picture

Number…

…nine.

Pining 4 the Fjords's picture

Dang GL

Way to blow the curve ;-).  This is just outstanding, the links alone are a valuable compendium- thank you for your efforts here!

The 'step back and get some perspective' idea is a good one, and my gut reaction to this is that our long period of boredom with the markets is nearly over... Shit's about to get real. Suez troubles send oil past 130+ ? Drain on economy and higher costs cause stocks to slide for a bit then waterfall in October? PMs then make new highs by year end?   As Silverwealth used to say, "Who knows?"

ArtL's picture

ten!

Kind of useless post, hard to resist,

edit - not even ten.

It is nice to see that PMs are up in early trading in Asia.

El Gordo's picture

Ready for fall

let's hope the fall shows a rising tide for all of us who have been beat about the head and shoulders all summer long.

Dyna mo hum's picture

Outstanding GL!

You might could do this writing thing for a living. No shortage of material out there.

Green Lantern's picture

Ok, #11 or #12. The first

Ok, #11 or #12. 

The first Turd who speculates with a well supported argument as to why JPM has issued a buy call will win a free two free trial subscription to the vault. No JOke.

HERE ARE THE RULES

In order to play, you must not currently be a member of the  vault or a family member of one who is already subscribed.  You must not be a current employee or related to Turd Ferguson in anyway or related to any of his current group of volunteer staff writers.  In the last 30 days, if you called me a bad name because you disagreed with me, you are not eligible.  If in the last 30 days, you have corrected my spelling, grammar, vocabulary, figures of speech, you are NOT eligible and I hold the right to permanently suspend you from any future contests I might consider.     

If you were one of the first five to make a comment and didn't mention gold or silver, you are not eligible.  Hey you already won an honor, don't be greedy. 

If you are currently sleeping, you are eligible to play only if you have the ability to sleep walk and type.   I am the final arbiter of what constitutes a good answer and well supported answer however, I reserve the right to consult with my friends and do a background check on you.   If you repeat what Turd has said in the vault and can prove that nobody who has access to that information has provided you with that answer, you are eligible. 

If you ever paid more than $20 for a lap dance, you are not eligible (inside joke)  If in addition to the answer to the JP Morgan question, you can tell me what is the name of the instrument  being played in the The Theme Song for Summer of 42, you will be given preferential treatment.  IN another words, a bad answer will be made better if you guess the instrument as well as JP Morgan. 

All entries must be posted by 6:00am eastern time.   All ineligible contestants can be made eligible if they record themselves singing the 1st verse of the Summer knows and post here on this forum before the next guest writer posts.  You can either upload to youtube, or soundcloud and you can just sing into you computer laptop.  You must try to be in tune and do it without laughing.  

Let the games begin.   The clock is ticking.

Green Lantern's picture

Oh yeah, if nobody wins, I'm

Oh yeah, if nobody wins, I'm giving the prize to Dyn Mo Hum.  Flattery will get you every where. Oh he is a member of the vault.  And Pining is an insider.  Dang,   We'll figure something out.

SilverSurfers's picture

?

How do you have a recap of the summer, when the summer still has 3 more weeks, during which, fire works are most likely? This summer aint over. Just Saying

Oh, 23. 63 in China.

Green Lantern's picture

Madhatter, I addressed that

Madhatter, I addressed that in my post and acknowledged it wasn't finished.  You are not eligible!  The moment there is a nip in the air, I start getting romantic about the end of summer.  I'll do another summary in a couple of weeks. Writers perogie, I mean prerogative Can't have too many summaries.  Humans forget.    .

thisismynewname's picture

My Guess

Sounds like a flugelhorn - anyway - the Morgue is issuing a buy call because they had a deadline (Jackson Hole) to be out of the manipulation business issued by Thunderlips and Co. in order to wrap up their decades long investigation into Silver manipulation.  Since they are getting out of the metals manipulation business (selling the vaults, warehouses and getting long) they are positioned now to profit as price climbs - and since no one would dare short this stuff anymore, it's about to rocket up to "New Paradigm" prices - 10K AU, 400 AG.

My 2 cents anyway.

And if I have to give Turd my billing address - I don't want a membership.  Just saying - since we all advocate getting the Phys - I don't want others to know where the Phys is...

BagOfGold's picture

The Summer Knows...

that Art Farmer plays a mean flugelhorn...& nobody sings it better than this lady!...

The summer knows, the summer's wise, she sees the doubts within your eyes,
And so she takes her summertime, tells the moon to wait and the sun to linger,
Twist the world around her summer finger.
Lets you see the wonder of it all,
And if you learned your lesson well,
There's little more for her to tell,
One last caress, it's time to dress for fall.

As far as JP Morgan is concerned...

The rehypothecation rabbit hole...

Jamie Dimon will sit on the wall...

JP Morgan will have a great fall!...

All Of Turd's horses...& all of Turd's men...

Won't put Jamie back together again!!!...

Jamie Dimon sat on the wall...

Now...I'm lost for words about JP Morgan...& am getting very sleepy...very sleepy...very sleepy...zzzzzzzzzzzzzzzzzzzzzzzzzzzz...

Now...

Bag Of Gold

El Gordo's picture

JPM/Instrumentation

JPM has issued a buy call in order to make money.

Verticle skin flute or baritone bonaphone, I can't tell for sure.

turnoffthewater's picture

I'll bite

Flugelhorn arranged by Kenny Wheeler

JPM is taking a contrarian stance after reducing their short positions and taking delivery of coontracts/metal on the comex as stated by Harvey and Turd. From Harvey: Today, 0 notices were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 52 contracts. JPMorgan is now actively seeking physical gold as it stopped most of the issuance, namely 47 contracts received at its dealer/house account. The GOFO rates are still negative:

08-Aug-13 -0.12167 -0.10000 -0.08333 -0.00600 0.13333                    
09-Aug-13 -0.11500 -0.09667 -0.08000 -0.00500 0.12833                    
12-Aug-13 -0.10833 -0.09000 -0.07500 -0.00167 0.13000                    
13-Aug-13 -0.11000 -0.09000 -0.07250 0.00500 0.13250                    
14-Aug-13 -0.11000 -0.09333 -0.07667 0.00167 0.13667                    
15-Aug-13 -0.11000 -0.09500 -0.08000 0.00250 0.13750                    
16-Aug-13 -0.11167 -0.09667 -0.08167 -0.00500 0.13667

And most importantly JPM reads and follows Marketwatch. TOTW

Watcher's picture

a violent regression to the mean is now underway in gold

From: http://bullmarketthinking.com/gold-trader-big-money-is-now-trying-to-get-in-on-a-violent-regression-to-the-mean/

"I had the chance to reconnect with technical gold trader Gary Savage, publisher of the Smart Money Tracker daily gold market commentary and trading service, which has outperformed most of the world’s hedge funds in 2011 and 2012.

It was a powerful conversation as Gary indicated that precious metals and mining shares have finally confirmed a 1-2-3 reversalpattern, suggesting a violent regression to the mean is now underway in gold—to be further angered as capital flees a collapsing bond market.

Speaking to the occurrence and meaning of a confirmed 1-2-3 reversal in the metals and miners, Gary indicated that, A 1-2-3 reversal (some people call it an A-B-C reversal) is just a change from a pattern of lower lows and lower highs, to a pattern of higher highs and higher lows…silver, platinum, palladium and the miners have all completed that 1-2-3 reversal within the last week. We were just waiting on gold to do the same thing and confirm that the cyclical driver of the sector was also in line with the rest of the metals—and gold did that yesterday.”

As a consequence of that confirmation according to Gary, Big money is now trying to get in on the long side and I think this move up out of this bear market bottom probably isn’t going to behave like a normal rally…it’s going to have a violent regression to the meanmy theory was that we were going to see a pretty strong V-shaped rally out of this bottom…that appears to be what’s going on…we could see gold retesting those September 2011 highs in the next three or four months depending on how hard the dollar falls.”

What will further anger this violent regression to the mean according to Gary, will be the bond market, in that, “We’ve got a big problem in the bond market. The bond market is starting to come unraveled…and the Fed in my opinion is going to have to increase QE to try and reclaim control. [So] the big trending moves from here until late 2014 or late 2015 are no longer going to be in stocks, bonds or real estate…it’s going to be in the commodity markets. Specifically…in the precious metals markets. It’s where the really big gains are going to be.”

Capturing this historic move in metals and miners will be challenging Gary noted, for the reason that, “When you have a bear market like we did, people are very nervous and as we come up off that bottom, they’re afraid to [buy]…and so they wait until we start going up again, exactly like what has happened this time—we go up very aggressively, get overbought very quickly—and then they ‘can’t’ buy because it’s overbought…[then] as soon as the dip comes, it looks like the bear market is [returning]. So they ‘can’t’ buy again, and they continually miss this move.” 

So [that's how] the bull continues to knock people off even as it goes up“, Gary added, “and that’s what produces these very aggressive moves.” 

As a final comment towards strategy over the next few months, Gary suggested that, “We need to get in, not worry about daily wiggles and just sit tight until later this fall.”

——

This was another powerful interview with one of the top traders in the gold market, and is required listening for investors looking to profitably trade this gold bull market.

To listen to the interview, click the following link and/or save to to your desktop:

>>Interview with Gary Savage (MP3) "

(no need to 'pay' for good commentary when it's all over the net)

silver foil hat's picture

@ GL

Greed.

GoldMania3000's picture

Nice post GL

Nice summary of events and keeping things on topic.  You folks posting these things once a week is a lot of hard work and I know i couldn't do it.   You posted some things on minors. Any thoughts as to if the minors have bottomed:)  

Monedas's picture

Nothing moves in a straight line !

JPM knows .... that the re-emergence of the PMs .... first as Super Money .... later as regular money .... is not a straight line proposition .... it's an ascending Zig Zag .... they've made money up and down .... the manipulation doesn't hurt .... but there was money to be made in the bull and bear markets .... they just made a naked short killing .... in the last 8 months .... now it's time to go long .... and there is no such thingy as a naked long .... well, maybe in the sense .... that with 100 to 1 "Fracking" .... even the longs are naked .... in the end .... my friend .... OK .... GL .... you may send me my Turd's Vault subscription .... I just nailed it !      Monedas     1929        Comedy Jihad Life Is So Easy For Me World Tour    devil

Green Lantern's picture

WINNERS

Looks like we have winners folks!!!!

Some very fine answers indeed by some individuals very much in need of some Lunesta.

Honorary 1st Prize: Watchingdogma- Based on the fact that you were the first to reply, I'd give you the prize. However, for the safety, security of your stack, we'll have to give you an honorary prize and give the cash to somebody else.

Cash Prize Bag of Golds, Not only did she provide us with another classic rendition of the Summer Knows, a unique piece of art, the lyrics, and some JPM relevant information and she put no conditions on the prize, I declare Bag of Gold the cash winner. Bag of Gold wins a two free month subscription to the Vault. Once you let me know privately if you will accept the prize, I'll send Turd the gelt.

El Gordo, The fact that the album was recorded in May and probably recorded in NYC, means it was cool at the time. A vertical skin flute goes flat in the cool weather. Art Farmer was not flat on that video. Beep. Good try but wrong answer

Turnoffthewater-Very good show indeed. Do you really know who Kenny Wheeler is? Or did you look that up. That's a name only a true jazz aficionado would throw around. 2nd problem, you had pre-existing knowledge of Turd's answer which makes you ineligible. However, good form!

silverfoilhat-Greed would be the right answer for any JPM relevant question. However, no effort to ascertain the name of the instrument in the video meant I had to deduct 5 points from your total score.

Art Farmer was one of those underrated jazz masters who is not with us any longer.  Got to meet him when I was a kid hanging around the New York City music district that in 2013 went 100% out of business.

Monedas's picture

Ex-wife # 2 has been a real shit !

We haven't talked in a couple of months .... since Ag did the nose dive .... but, finally I got a snarky call .... and she admitted my buy Ag recommendation .... was partly to blame .... plus the way I slurp my coffee .... repeat myself .... and call her "Kiddo" .... apparently an endearing term used in another of her losing relationships .... and off limits to this loser .... anyway .... I said "You mean in all this sell off you didn't even pick up ten more AEs ?" .... she spent $600 taking the Grand Kids to Universal Studio Tour .... Hell, she could have picked up 25 to 30 AEs for that .... at the nadir of the dip .... yeah, I'm a little pissed, too .... how ungrateful .... my lovers have been .... they never deserved me, anyway !      Monedas     1929     Comedy Jihad Pissed In Paradise World Tour   devil     PS:  GL .... your gratuitous mention of the Japanese American Internment camps .... short lived as they were .... speaks volumes of your mindset .... when the US has a case of the hiccups .... we get more bad press than Germany, Russia, China, Japan, Cambodia, Syria .... when they get Summer pneumonia ?

Green Lantern's picture

@Goldmania I don't call

@Goldmania

I don't call bottoms unless they are walking down the street. 

But here is something to think about.  The recent move in the Juniors might be of some concern.   They went up across the board and like I mentioned in my mining article we will see a great number close shop.  So obviously for some, they haven't even come close to bottom.  For the select few that are in it for the long run,  a bottom is very possible.

murphy's picture

Congrats BOG

Nice post and contest GL. Summer of 42 will always hold a special place in my heart. I remember my Dad remarking in 1942 he was 15, just like the main character.

More importantly how wholesome and hot was Jennifer O'Neil? I wanted her badly, in a good way.

ag1969's picture

GL

It reminds me of soap opera, where one could watch once per quarter and catch right up.  I could have taken the whole summer off from researching and just read this!  You are a compelling character GL, thank you!  ag1969

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