Tungsten-Filled 10 Oz Gold Bar Found In The Middle Of Manhattan's Jewelry District

It is one thing for tungsten-filled gold bars to appear in the UK, or in Germany: after all out of sight, and across the Atlantic, certainly must mean out of mind, and out of the safe. However, when a 10 ounce 999.9 gold bar bearing the stamp of the reputable Swiss Produits Artistiques Métaux Précieux (PAMP, with owner MTP) and a serial number (serial #038892, likely rehypothecated in at least 10 gold ETFs across the world but that's a different story), mysteriously emerges in the heart of the world's jewerly district located on 47th street in Manhattan, things get real quick. Moments ago, Myfoxny reported that a 10-ounce gold bar costing nearly $18,000 turned out to be a counterfeit. The discovery was made by the dealer Ibrahim Fadl, who bought the PAMP bar in question from a merchant who has sold him real gold before. "But he heard counterfeit gold bars were going around, so he drilled into several of his gold bars worth $100,000 and saw gray tungsten -- not gold. The bar was filled with tungsten, which weighs nearly the same as gold but costs just over a dollar an ounce."

Bundesbank's Weidmann Likens Draghi's OMT To "Devil's Work"

Ongoing grand plans to flood the economy market with money have reminded Bundesbank's Jens Weidmann of the scene in the play Faust - when the devil (Mephistopheles) 'disguised as a fool', convinces an emperor to issue large amounts of paper money - which inevitably solves the kingdom's financial problems in the short-term but ends rather badly in rampant inflation. As The Telegraph notes, without specifically mentioning Mario Draghi’s bond-buying programme, he said: “If a central bank can potentially create unlimited money from nothing, how can it ensure that money is sufficiently scarce to retain its value?” He added: “Yes, this temptation certainly exists, and many in monetary history have succumbed to it,” Mr Weidmann warned.

The Bernank... The Blind Archer...

The great day has come and gone when the Fed would once again ride to the action, not daring to be left behind by the ECB’s perverse vaunting of its new ‘unlimited’ programme of bond purchases. But the few, brief sentences from Bernanke contain such a miasma of error that it is hard to know where to begin if we are to restore a fresh breeze of economic rationale to this swamp of non sequiturs and wilful misunderstandings. It is not enough that crude, Krugmanite Keynesianism clings to the cheap parlour trick of using money illusion to fool unemployed wage-earners into lowering the reservation price of their labour, but now we must battle against banal, Bernankite Bubble-blowing – the hope that money illusion will fool cash-constrained asset owners instead. It is not only that Bernanke’s policies will inevitably assist the zombie companies and the obsolescent industries to absorb scarce resources (not least on bank balance sheets) to a much greater degree than is justified, there is also the danger that lax money misleads even today’s supramarginal businesses into over-estimating the depth and duration of demand for their products, ultimately undermining many otherwise sound undertakings and reducing these, too, when the cycle next turns, to the ranks of the Living Dead.

Conflict between Japan and China Intensifies/Rajoy still refuses to ask for aid/Europe stock exchanges fall in price/

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 4 hours ago

Gold closed up by 50 cents to $1768.40 retracing all the dollars it lost yesterday in the access market. Silver also rose by 38 cents to $34.64 as investors believe that they have the bankers on the ropes. I saw that the gold equity shares started to rally at the close of trading yesterday despite the huge raid in the access market.  It seems that massive paper demand overwhelmed the massive

 

Kazakhstan: Upcoming Area Of Strength

Admin at Marc Faber Blog - 9 hours ago

Kazakhstan is a much sounder country than the United States or any European country. - *in CNBC.com* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

 

We versus They Not Helping Anyone

Eric De Groot at Eric De Groot - 9 hours ago

Big government ‘dependency’ ranging from transfer payments to corporate and farm subsidizes and bailouts influence nearly all demographics within America. That’s the problem, people! Political affiliation has nothing to do with dependency on other people’s money (OPM). What one group call moochers, another calls a good business relationship. The OPM party will end when the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Re-Retaliation: Fire Spotted At Gate Of Chinese School In Kobe, Japan

All day long we read how today, on the 81st anniversary of Japan's invasion of Manchuria, anti-Japan protests flared up in 125 Chinese cities, for the most part peaceful, protesting what China believes is an illegal Japanese attempt at annexation of the Senkaku Islands as a proximal catalyst, but likely also an outlet for years of pent up anti-Japanese sentiment (of which there is plenty on both sides). For a good example of this see recent events in Muslim countries, US embassies and a certain film about Mohammed. Things got so heated, that late in the day there was some speculation that China may consider retaliating for what it considers an unprovoked territorial grab by the not so beloved eastern neighbor by selling its holdings of Japanese bonds. And while that may or may not occur, the probability of some serious escalation only gets largely greater as we read news of such development, this time out of Japan

• Fire Spotted At Gate Of Chinese School in Kobe, Japan: Kyodo

Well, if Japan wants this confrontation to get trulye ugly, then by all means re-retaliate, and certainly bring the school children in it. One thing is certain: China will not step down, and neither will Japan. What happens next is thus anyone's guess.


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Corporate Profits Squeeze For Large Caps

US large cap corp profitability has been enhanced instead of eroded by outsourcing simply due to final demand being reflated by credit growth. That the US consumer’s deleveraging has not yet actually been felt in terms of final demand being squeezed and that the Federal government is going to go from supporting demand to detracting with some degree of fiscal cliff effect going into next year.  In a highly leveraged economy where SMEs are not performing well as evidenced by numerous anecdotal pieces of information and the overall weak post-08 recovery, the US could easily slide into a structural type deflationary recession. This is likely to have negative ramifications in EM/ EM FX where many of these companies have also enjoyed strong performance and negative implications for commodities and commodity exporters.

Your Taxes At Work: All You Need To Know About Who Pays What Taxes In The US 

  Presented with little comment - since the charts speak for themselves. From Buffett to a Burger-flipper, everyone has a view - driven in large part by their anchoring bias of who they choose to listen to. The graphics below will help, we hope, to clarify that thinking - whether you are the 1%, 47%, or 99%...

Bond Wars: Chinese Advisor Calls For Japanese Bond Dump

Earlier today we casually wondered whether the US stands to lose more by supporting China or Japan in their escalating diplomatic spat, considering the threat of a US Treasury sell off is certainly not negligible, a dilemma complicated by the fact that as today's TIC data indicated both nations own almost the same amount of US paper, just over $1.1 trillion. In a stunning turn of events, it appears that China has taken our thought experiment a step further and as the Telegraph's Ambrose Evans-Pritchard reports, based on a recommendation by Jin Baisong from the Chinese Academy of International Trade (a branch of the commerce ministry) China is actively considering "using its power as Japan’s biggest creditor with $230bn (£141bn) of bonds to "impose sanctions on Japan in the most effective manner" and bring Tokyo’s festering fiscal crisis to a head." I.e., dump Japan's bonds en masse.

Can Saudi Arabia Really Lower US Gas Prices Ahead Of The Election?

One of the more curious conspiracy theories that has appeared in the past 24 hours, or since yesterday's so far unexplained crude oil flash crash without a subsequent corresponding jump (those only happen in equities it appears), is that Saudi Arabia has decided to come to the aid of the Obama administration two months ahead of the election, and to pump enough crude into the system to offset the pricing in of the inevitable liquidity tsunami from the now global QEternity, or at least until such time as the election passes. Partially confirming this speculation was the FT's report that Saudi Arabia has offered its main customers in the US, Europe and Asia extra oil supplies through the end of the year, a sign the world’s largest exporter is worried about the impact of rising prices on the global economy. Reuters adds, citing a Gulf source that "We would like to see the price coming down and we are working to bring it down... The price now, we believe is high, and it's not supported by fundamentals at all. It's just speculation and geopolitics." "The majority of OPEC countries prefer around $100, including Saudi Arabia," he said, adding that $100 per barrel was "right now the ideal price for the majority of OPEC countries ... the majority is all except one or two." "We think the oil market is well balanced," the Gulf source added. This comes a day after fellow OPEC member Iran, whose output has been substantially curtailed in recent months as a result of a global embargo (with notable exemptions for key Iran clients India and China) made it clear that it would be happy with crude rising to $150 for obvious reasons. Obviously Iran is in the "minority" according to the Gulf source. And while the reasoning for Saudi Arabia to do all in its power to promote amicable relations with America's leadership is easily explainable, it is far less clear if Saudi Arabia can actually do much if anything to really prop up crude production, prop down the price of crude and gas at the pump, and support Obama's reelection chances.

Gold And Silver Outperform As Volumeless, Rangeless Equities Drift Lower

Equity markets traded in an extremely narrow range once again today with NYSE volumes dreadfully low. The USD, Treasury yields, and the S&P 500 in general tracked each other well all day. Gold swung from underperformance to outperformance and stocks lifted into the close to try and catch-up - as well as manage a green close - they failed (except the Dow - with CAT and MCD accounting for 14 of the 11.5 point gain on the day). AAPL closed above $702 (of course it did, silly) but NASDAQ was unable to make hay off of that. VIX remained under pressure and stocks reverted to catch down to it. The USD strength (+0.5% on the week) was ignored by Gold ($1770 - unch on the week) and Silver ($34.75) which had solid days but Oil ($95.50) kept sliding - below yesterday's spike lows. JPY's risk-on sell-off on BoJ news was also shrugged off by the equity market. With Staples and Healthcare outperforming and Energy and Financials laggards, as we noted earlier, the sectors post-Fed have converged rather dramatically - as TSYs have retraced much of the post-Fed move. There was also a small plague of epic Flash Smashes into the close... on massive volume shifts... perfectly normal.

Consolidation, Covering, Or Capitulation?

While AAPL keeps levitating (no matter how high complacency in its options stands), it seems the rest of the equity markets are less enamored (for now) with this strange new normal of the Fed/ECB's own making. Below we present four charts indicating regime shifts in average trade size, index dispersion, high-beta sector convergence, and high-beta financials convergence. Whether these are bullish consolidations, short-coverings, or total capitulations - who knows? But with the S&P 500 reverting lower to catch-down to VIX's less sanguine view and the total lack of a move on the BoJ news today - we suspect (at least for now) that all the good news is out.

Taylor Rule Says The Fed Should Be Tightening Now

Once upon a time, the Federal Reserve decided to adopt the Taylor rule, named after Stanford economist John Taylor, as its key determinant in setting the Fed Funds rate. Then, after it realized that the original formulation of the Taylor rule was too constricting and not as permissive to pro-inflationary policy as the Fed's financial sector superiors demanded, it decided to adjust the Taylor rule formulation to its own parameters so that it was always in sync with whatever policy, monetary or as of QEterenity, pseudo-fiscal, it decided to pursue. In the meantime, John Taylor has become one of the more vocal critics of Ben Bernanke's printing ways if for no other reason then because the original Taylor rule says that instead of ZIRP at least until 2015, the Fed should be tightening right now.

The One Chart That George Washington Would Not Want To See

We discussed the inflationary costs and deflationary benefits of government action or inaction earlier - specifically with regard to the middle class. Bloomberg TV provided a succinct clip this morning that showed the one chart that Obama (and also Romney just as likely) would really not like to see. Loosely defined as lying between the ruling class and the proletariat, it would seem that George Washington himself would be distraught as the median net worth of the middle class has plunged 28% since 2000 back to early 90s levels (while the ruling class is up around 1%) and the lower tier down around 45%. Forget the lost decade, watch these 90 seconds to get a clue and see that Japan is not the only nation suffering under 20 years of subjugation.

Global Retaliation To QEternity Begin: BOJ Considers Additional Easing

Last week it was the Fed crossing the Rubicon with infinite easing. We explained very clearly that the next steps would be everyone else joining the infinite easing party. Sure enough, here comes the first one:

• BOJ TO CONSIDER ADDITIONAL EASING: NIKKEI

Keep in mind that the BOJ already monetizes ETFs and REITs, the very instruments which the Fed will soon be forced to buy. And so it begins - because when it comes to pushing CTRL and P, over and over, it really doesn't take much skill.

Perspectives On Gold's "Parabolic" Catch-Up Phase

Since 2007 our analysis has suggested the likelihood of economic outcomes that most have considered unlikely: significant and ongoing monetary inflation, policy-administered currency devaluation, substantial global price inflation, and an eventual change in how the forty year old global monetary system is structured. Most observers have viewed such outlooks as tail events – highly unlikely, unworthy of serious consideration or a long way off. We remain resolute, and believe last week’s movements in Frankfurt and Washington towards perpetual quantitative easing confirmed and accelerated the validity of our outlook. With QBAMCO's view that $15,000 - $19,000 Gold is possible, timing of the catch-up phase is impossible - though they suspect last week's events may be the catalyst that begins to raise public awareness of the link between monetary inflation and price inflation.

US Totalitarian State Wins After All: Obama Reinstates NDAA Military Detention Provision

Just over a week ago, we wrote of the challenge to Obama's NDAA totalitarian bill. Hope remained that Chris Hedges' view of the indefinite detention as "unforgivable, unconstitutional, and exceedingly dangerous" would bolster judgment. However, as Russia Today reports, a lone appeals judge bowed down to the Obama administration late Monday and reauthorized the White House's ability to indefinitely detain American citizens without charge or due process. On Monday, the US Justice Department asked for an emergency stay on the previous Chris Hedges'-driven order, and hours later US Court of Appeals for the Second Circuit Judge Raymond Lohier agreed to intervene and place a hold on the injunction. The stay will remain in effect until at least September 28, when a three-judge appeals court panel is expected to begin addressing the issue. It would appear the total fascist takeover of Amerika is drawing nearer by the day.


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