Gold Seeker Closing Report: Gold and Silver Rise With Stocks and Oil

The Metals:

Gold climbed $13.72 to $1733.32 in Asia before it fell back to $1716.19 by a little before 10AM EST, but it then bounced back higher midday and ended with a gain of 0.22%. Silver rose to $34.025 in Asia before it slipped back to $33.45, but it also rebounded midday and ended with a gain of 0.69%.

Euro gold remained at about €1306, platinum lost $6.50 to $1645, and copper fell a couple of cents to about $3.83.

Gold and silver equities traded mostly slightly lower and ended with modest losses.

The Economy:

After "lemming" exodus, manufacturers look to U.S. Reuters

Obama Sends $3.8T Budget to Congress Bloomberg

Volcker Stands Up For Namesake Rule Yahoo

Obama's election-year budget to target rich Reuters

Bernanke Labor Pessimism Seen Misplaced Bloomberg

Foreclosure Deal May Prop Up State Budgets Bloomberg

Tomorrow at 8:30AM EST brings Export and Import Prices for January and Retail Sales for January expected at 0.8%. Excluding autos, sales are expected at 0.5%. At 10AM is the Business Inventories report for December expected at 0.5%.

The Markets:

Charts Courtesy of http://finance.yahoo.com/

Oil rose as the U.S. dollar index fell on Greece’s austerity deal that sent the Dow, Nasdaq, and S&P higher.

“Europe gave Greece until Wednesday to convince skeptical international creditors that it would stick to the punishing terms of a multi-billion-euro rescue package, endorsed by parliament as rioters torched downtown Athens.

Lawmakers backed drastic cuts in wages, pensions and jobs on Sunday as the price of a 130 billion euro ($170 billion) bailout by the European Union and International Monetary Fund to avert a messy default that would send shockwaves through the euro zone.”

“Treasury prices edged up on Monday, pushing yields down slightly, after Greece passed a package of fiscal measures leaders hope will satisfy bailout providers — the European Union and the International Monetary Fund — and thus enable it to avoid a debt default.”

Among the big names making news in the market today were GM, Groupon, Facebook, and Apple.

The Commentary:

“My Dear Extended Family,

The replacement of lost liquidity is NOT arithmetic. Booms, like busts, turn geometric on their liquidity effect because of the impact of mass financial psychology. Management of Perspective Economics primarily operated by mainstream media can make the gestation period of this event long, but it cannot reverse the underlying process.

With there being no question whatsoever that a credit event is on the near horizon for Greece, there is no avoidance of a further haircut in the valuation of Greek debt held by international banks, primarily Euroland institutions. What you take away with one hand you must provide with another if the banking system of Euroland is to remain viable. As you haircut (reduce in value for balance sheet considerations) Greek debt you reduce the value of that debt held as assets of financial institutions, therein reducing their viability to borrow in order to conduct their banking activities. This mark down is in full gear as speculation advertises to the world that the next step in this Greek tragedy is a haircut of value to just 30%.

How is it possible for the Euro wizards of words to punish Greek debt severely but not hammer others equally now under assault both by mainstream media as well as the undertakers of bond ratings in the USA?

The argument takes a position that the International Swaps and Derivative Association, which is made up of the manufacturers of these devices, will not self immolate by declaring credit events to be credit defaults. This is the ultimate irreversible can kick directly into the dead end sign at the end of the road of postponement to perdition.

Financial currency inflated hell by global debt monetization is the condition from which there is no escape, except though burning down the old system and making a new one. This is the dead end sign at the end of the road for can kicking. It is the condition of financial perdition. It is not something coming in a distant future. It is here and now, clear and present, if you have the eyes to see.

The means to this end is the combination of sick sovereign debt, risk insurance issued against the default of debt without sufficient liquid capital to do so, and the fact that those entities who issued this insurance are themselves and in truth illiquid under strain thanks to the capitulation of FASB on true market value of their legacy and other assets. This is the construction of the house of financial cards that will not survive intact during the period of 2012 to 2015. This is what gold at $1700 is indicating to those unfortunate enough to understand the practical workings of a system whose life force has been stolen to a degree that can only be deemed epic.

Never in written history has anything this size occurred where trillions has been bled away from an economic system with impunity. In all history when this has occurred the then monetary system imploded, to be replaced always by a commodity based money. That is what the Retenmark was in the Weimar experience. This is what the virtual reserve currency will be that replaces the US dollar in the next three years. The commodity currency definition will be derived by a connection to the gold held by the central banks of all the currencies that make up the Western world averaged virtual currency. This virtual currency will be a computer based settlement mechanism that cannot be traded in by other than central banks on behalf of trade settlement. Each contributing nation will also contribute to a universal M3 that will be the percentage measure of gold’s value to determined percentage-wise appreciation of depreciation, constituting value of the position held by each central bank in gold. Few if any central banks need to make transactions to adjust value as the squids of the world will invent derivatives upon which to speculate on the value of gold as a product of the growth or contraction of the western world M3.

This is not by any means a gold convertible system. This is not by any means a perfect system. There will be automaticity in this system but an agreement only by members to perform as above. However this system will work the same as the Retenmark worked. When the need becomes so great to believe in something solid anything that sounds solid has and will again work.

Only a resurgence of business based on solid foundations of equity and not debt can do the final clean up and provide a door to a better future.

No politician anywhere can do the necessary without causing the explosion of the results being heard almost as a new big bang. We are going to inflate this debt away or those in power will be swept away by the violence inherent in the suffering citizen.

Gold and only those things gold will provide the bridge to maintaining a lifestyle, maintain some freedom of choice and most importantly give you options you would not otherwise have. This has been as it always has been and will continue so. The drama of the market is nothing but that – sound and fury presaging but not defining change.

Do not allow anything to deter you from holding that which will build your bridge to tomorrow safely.

I am personally 100% in. It is my intention to hold as much gold as possible lending to me leverage without borrowing or margin. What was done in the 70s cannot be done now because we are only on the cusp of the volatility in the price of gold and it is already impossible to carry leverage except in the manner I have devised for myself participated in by others. I invite you to join with me.

This is a lonely road we are on where its direction does not tend to make friends. The road to freedom of any kind never does.

Stay focused. “Non Carborumdum Est,” do not let the hateful, vengeful bashers get you down.

Respectfully,”- Jim Sinclair, JSMineset.com

GATA Posts:

Iran presses ahead with attack on dollar

Gold needn't fear rising rates, Macleod says; and Calandra on a Russian play

Sudan central bank raises dollar supply after gold sale

The Statistics:

Activity from: 2/10/2012

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from yesterday’s data: SPDR added 0.302 tonnes.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 179.27: +0.83 change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,700.53: No change from yesterday’s data.

The Miners:

Freeport’s (FCX) redemption and sale of senior notes, Claude’s (CGR) drill results, McEwen’s (MUX) drill results, and Silvercorp’s (SVM) drill results were among big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

Winners & Losers tracks NYSE and AMEX listed gold and silver mining stocks that trade over $1.

Please see Yahoo’s Mining/Metals News Wire for all of today’s mining news.

- Chris Mullen, Gold Seeker Report

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© Gold Seeker 2012

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