Sunday Night, Summer Recap

Sun, Aug 18, 2013 - 10:37pm

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

Video unavailable

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?

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.

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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 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.

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?

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.

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.

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

Silver Seasonal Charts

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.

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.

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.

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!!

About the Author

Green Lantern


El Gordo
Aug 18, 2013 - 11:54pm

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.

Aug 18, 2013 - 11:56pm


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.

Dyna mo hum
Aug 19, 2013 - 12:05am

Outstanding GL!

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

Green Lantern
Aug 19, 2013 - 12:21am

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.

Aug 19, 2013 - 12:22am


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
Aug 19, 2013 - 12:26am

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. .

Green Lantern
Aug 19, 2013 - 12:36am

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.


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.

Aug 19, 2013 - 12:54am

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...

Aug 19, 2013 - 1:48am

The Summer Knows...

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

The Summer Knows - Sarah Vaughan

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...

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!!!...

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

Bag Of Gold

Aug 19, 2013 - 2:04am

Wow that's funny!!

Its' really a funny post with funny cartoons and poems. I likes it they are really interesting. buy instagram followers

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