Freefalling Dollar Sends Silver Above $46

Submitted by Tyler Durden on 04/21/2011 01:55 -0400

At this rate the Hunt Brothers all time high to be taken out within a week...or a day, right about the time the dollar suffers terminal implosion. The DXY is now below 74. 

 

 

 

 

 

Oil Crisis Just Got Real: Sinopec (Read China) Cuts Off Oil Exports

Submitted by Tyler Durden on 04/21/2011 02:05 -0400

As if a dollar in freefall was not enough, surging oil is about to hit the turbo boost, decimating what is left of the US (and global) consumer. Xinhua, via Energy Daily, brings this stunner: " Chinese oil giant Sinopec has stopped exporting oil products to maintain domestic supplies amid disruption concerns caused by Middle East unrest and Japan's earthquake, a report said Wednesday. The state-run Xinhua news agency did not say how long the suspension would last but it reported that the firm had said it also would take steps to step up output "to maintain domestic market supplies of refined oil products". Oh but don't worry, those good Saudi folks are seeing a massive drop in demand... for their Kool aid perhaps. "Sinopec would ensure supplies met  the "basic needs" of the southern Chinese special regions of Hong Kong and Macao, but they also should expect an unspecified drop in supply, Xinhua quoted an unnamed company official as saying." Now... does anyone remember the 1970s?

 

 

25% Of Scotia Mocatta's Silver Transferred From "Registered" To "Eligible" Status: A 45% Reduction In "Physical"

Submitted by Tyler Durden on 04/20/2011 20:14 -0400

Something interesting appeared in the daily NYMEX report of its silver warehouse stockpile data: Canada's largest bullion depository (and one of five total) reclassified a whopping 5.2 million ounces of silver from Registered to Eligible status. In order to get a sense of how big this amount is, which amounts to just under $238 million at today's fixing price, it represents just over 25% of the total silver stored at Scotia Mocatta, and about 5% of the total silver held across all depositories. The reason for this substantial shift is given as follows: "due to a reporting reclassification, 5,287,142 t oz was moved from Registered to Eligible." That's a pretty substantial reporting reclassification. Of course it could well be nothing but that, although one would imagine that a fat finger is somewhat unlikely when it comes to such a material amount. On the other hand, as those who follow the NYMEX data know too well, registered silver is actual physical Comex silver. Eligible on the other hand is sometimes called "someone else's silver" as it does not go through assays on exit/selling events. In other words, this is silver that can not be used to make delivery under a futures contract. As a result of this reclass, total registered silver dropped by 13% from 41.0 million ounces to 35.8 million. Assuming one does not have full faith in the simple error story, does this mean that deliverable silver just dropped by 13% overnight (this event occurred yesterday, but was reported as usual with a 24 hour delay). And if so, is this effective transformation of physical to semi-paper silver indicative of what we may expect from other depositories in the next few days as the delivery notices start coming in?

 

 

 

 

20 Signs That A Horrific Global Food Crisis Is Coming

Posted by: ilene

Post date: 04/21/2011 - 00:24

As competition for food supplies increases, food prices are going to go up. In fact, at some point they are going to go way up.

 

 

 

 

 

In The News Today

Posted: Apr 20 2011     By: Jim Sinclair      Post Edited: April 20, 2011 at 11:11 pm
Filed under: In The News

Thought For The Evening:
The 1979 style setup for a ballistic move in gold is setting up right now!


Jim Sinclair’s Commentary
If QE, aka the “non-economic purchase of US Treasury bonds” ends, who will buy the bonds required to finance the deficit? Apparently not China.


PBOC governor says foreign reserves excessive
Updated: 2011-04-19 14:13
China’s huge stockpile of foreign exchange reserves, the world’s largest, have become excessive and the government must diversify investments using the reserves, Zhou Xiaochuan, governor of the People’s Bank of China, said in comments published on Tuesday.
The country’s foreign exchange reserves swelled by nearly $200 billion in the first quarter of this year to more than $3 trillion, indicating hefty capital inflows, and the government has so far focused on investing mainly in US dollar assets, including US Treasures.
“Foreign exchange reserves have exceeded our country’s rational demand, and too much accumulation has caused excessive liquidity in our markets, adding to the pressure of the central bank’s sterilization,” Zhou was quoted by the official Shanghai Securities News as saying.
“The State Council has required a cut in excessive accumulation and good management of the funds accumulated, including diversification of investments,” Zhou was quoted as telling a forum at Tsinghua University in Beijing.
To keep the yuan exchange rate stable in a capital account control system, the PBOC injects huge amounts of yuan into the banking system by buying foreign currencies from commercial banks.
More…

Things That Make You Go Hmmm - Such As Gold...

Submitted by Tyler Durden on 04/21/2011 00:00 -0400

Grant Williams shares: "I had been reading about gold as an investment but more importantly as a hedge against money-printing for some time and had dabbled in ETFs while I told myself that I would DEFINITELY buy some gold – real gold. Physical gold. Shiny, yellow, heavy gold. But of course, I didn’t. It was all too hard, frankly. Why go to all the trouble of researching, finding a bullion dealer, choosing between bars and coins and then plunking down your cash in return for a lump of gold when you could sit at home in front of your computer, click your mouse a few times and be the proud owner of some unallocated claim on a pool of gold that may or may not be there but that gives you exposure to any move in the gold price? You can buy exposure to gold during the commercial break of Grey’s Anatomy. Easy. The trouble with doing that, is that you then end up with a position. It becomes a number that you trade into and out of based on extraneous factors that may or may not have an effect on the underlying price. There aren’t many people who have taken a position in GLD (or SLV for that matter) who haven’t either been chased out of their position in a big down-move, or failed to pull the trigger on a buy-order because they felt the price had run too far." 

 

 

 

Paging Dr. Rogers: Patient Federal Reserve Confetti Is Asystolic

Submitted by Tyler Durden on 04/20/2011 22:18 -0400

A few days ago Jim Rogers prudently warned that silver had entered parabolic mode and the the only case which would not lead to a collapse in silver prices (once silver hit $100 that is) is if the Federal Reserve note, or the liability to all those uber-valuable Fed assets known as Treasury Bonds (and of course Agencies, thank you QE1) became "confetti." Well, confetti is what we have. As of tonight, the dollar has just taken out the 2009 lows, and only the extreme carry trade which sustained the overall market into the biggest market crash ever, back in 2008 is now a lower point in the DXY index. In other words only a complete market wipe out, or an exogenous external event such as war, now that the market does not even blink at such black swans as civil wars, bankrupt European countries, nuclear catastrophes, and record earthquakes, can lead to some restoration in the purchasing power of the US currency. Incidentally, as the long term DXYchart below shows, the current dollar cash is by now means the most pronounced one. A far bigger one occurred in the mid 80s, when the dollar was cut in half from over 160 to 80, in a move that, as everyone who was alive back then and not merely some derivative of gaseous gallium metal and arsenic trichloride, recalls culminated with Black Friday. Oh yes, gold just hit another record high.