Sunday, June 1, 2014

Dollar Going to Collapse 80% or 90%, Gold Can Touch $ 7000 To $ 9000 - James Rickards



Dollar Going to Collapse 80% or 90%, Gold Can Touch $ 7000 To $ 9000 - James Rickards
   You Can Buy This Book @ Rs 509 By Clicking On The Picture.
More about James Rickards Click HERE

“Massive Shortages” In Gold Coming and “Typical Investor” Will Not Be Able To Get Bullion - James Rickards

“Massive Shortages” In Gold Coming
   You Can Buy This Book @ Rs 509 By Clicking On The Picture.

Gold extended losses down over 4% this Week.  It fell to 16 week lows, possibly due to slightly weaker physical demand in top buyer China and technical selling.
In China, gold premiums ticked slightly higher to $2 to $3 per ounce. They have remained roughly the same since before the price drop, which suggests demand in China has not picked up on the price falls.
We are bearish in the short term and technically, gold is vulnerable to further falls. Potentially to test what appears to be a double bottom between $1,180/oz and $1,200/oz. Gold is particularly vulnerable in the very short term.

It is also worth considering seasonal trends and in recent years, June is one of the weakest months for gold. Gold's five year and ten year average performance in June is negative. We will look at this in more detail tomorrow.
While gold is vulnerable technically to further falls, it’s 14-day relative strength index (RSI) has dipped into very oversold territory.
This morning Russia, Belarus and Kazakhstan signed the historic Eurasian Economic Union which will come into effect in January 2015. "The just-signed treaty is of epoch-making, historic importance,"Russian President Vladimir Putin said.
The Eurasian Economic Union expects Armenia to join within a month, Kyrgyzstan within a year.
Cutting down trade barriers and comprising over 170 million people it will be the largest common market across the ex-Soviet states. The troika of countries will cooperate in energy, industry, agriculture, transport and monetarily.
 
“Massive Shortages” In Gold Coming and “Typical Investor” Will Not Be Able To Get Bullion - Rickards
Financial expert, Pentagon insider and bestselling author James Rickards has warned that “typical investors” may not be able to acquire physical gold when prices begin to surge hundreds of dollars a day as “massive shortages” will take place.
In another fascinating interview, this time with the always worth a watch Greg Hunter, formerly of ABC and CNN and now of USA Watchdog, Rickards said that gold will become the preserve of the “big guy” in the form of sovereign wealth funds and central banks.
This is something we have warned of since 2003. There is another risk in the form of ultra high net worth individuals (UHNWIs) in Russia, China and elsewhere also attempting to corner the physical gold and silver markets.
In the 1970’s, the Hunt Brothers made the mistake of not accumulating enough physical silver outside the reach of the U.S. authorities. Some billionaires today will likely not make the same mistake.
Rickards latest book, ‘The Death of Money’ predicts “the coming collapse of the international monetary system” and is being very well received. In recent days alone, Rickards has conducted a huge amount of media interviews with most leading financial networks. 
One of the signposts of the coming collapse of the international monetary system is countries like Russia declaring it will no longer use the U.S. Dollar as a reserve currency in international trade.
Rickards explains, “Putin said he envisions a Eurasian economic zone involving Eastern Europe, central Asia and Russia.  The Russian Ruble is nowhere near ready to be a global reserve currency, but it could be a regional reserve currency.”
Rickards is surprised at how fast the economic situation is unfolding.  Rickards says, “If you ask me what has happened since you finished writing the book that comes as a surprise, I would say a lot of the things I talk about in my book are happening faster than I would have expected. Things that I thought would happen in the 2015 or 2016 time frame seems to be happening now in some ways.  If anything, the tempo of events is faster than expected. “
“Therefore, some of these catastrophic outcomes may come sooner than I wrote about.”
Rickards told Hunter that “right now, we are on the precipice now”.
“When you are on the precipice, it doesn’t mean you fall off immediately, but you are going to fall off because you can see the forces in play.  What I tell clients and investors is it’s not as if we are going to make some mistakes and some bad things are going to happen.  The mistakes have already been made.  The instability is already in the system.  We’re just waiting for that catalyst that I call the snowflake that starts the avalanche.   You don’t worry about the snowflakes; you worry about the snow and that it’s unstable and it’s just waiting to collapse.  That’s what the system is right now; we are just waiting for a catalyst.  People ask me all the time, what could it be?  
Technically, my answer is it doesn’t matter because it will be something.  It could be a failure to deliver physical gold.  It could be an MF Global financial failure.  It could be a natural disaster.  It could be a lot of things.  The thing investors need to understand is the catalyst doesn’t matter.  It’s coming because the instability is already there.”
On gold manipulation and when it will end, Rickards says, “It will end when the physical shortage gets to the point that someone fails to deliver; which, at that point, there will be a buying panic.  There could be a buying panic or what some people call a demand shock.  One of the things I said about gold manipulation is if I was the manipulator, I would be embarrassed at this point.  The manipulation is obvious.  The evidence is coming in from all directions. . . . The manipulation is clear.  When will it end?  It will end when there is a physical shortage that pops up somewhere, or it will end with a short squeeze.”
“We are going to get a very large demand shock coming from China and India”, said Rickards.
“Let me explain those two cases.  We have a brand new government in India, and they are going to repeal the import tax on gold.  We also have the wedding season coming up. . . . So, India is set up for a very large surge in demand in the fourth quarter.  Now, over to China, this is one of the things that it’s happening faster than I originally thought.  The credit collapse story is happening in real time.  I said (in my book) this might be a 2015 event, but it looks like it is happening now.  Defaults are piling up.  We are seeing money rise.  We’re seeing people march down to the banks . . . trying to get their money back. . . . So, if they can’t buy foreign stocks, domestic stocks, don’t want to put their money in the bank and are getting out of real estate, then what’s left?  The answer is gold. . . . I see a demand shock coming from China. . . . You could see a scramble to buy gold.  It is going on anyway, but you could see it accelerate.  That will take down the manipulation.  Once the markets prevail over the manipulators, then watch out.”
Rickards, Washington and Wall Street insider, is certain the collapse will happen. He is just not sure when it will happen. 
“It is the thing you won’t see coming that will take the system down.  Things happen much more quickly than what investors expect.” 
“What will happen in gold is that it will chug along and then all of a sudden–boom.  It will be up $100 an ounce, and then the next day it will be up another $200 an ounce.  Then everyone will be on TV saying it’s a bubble—boom.  It’s up $300 an ounce, and before you know it, it will be up $1,000 per ounce.”
“Then people will say gee, I better get some gold, and they’ll find out they can’t get it because the big guy will get it.  You know, like central banks and sovereign wealth funds will be able to get the gold.  The typical investor will run down to the coin shop and they will be sold out, and the U.S. Mint will say sorry, we’re not shipping.” 
“You’re going to find out you can’t get it because the whole thing is set up for massive shortages in supply.”

More about James Rickards Click HERE In Video Chat with Mr Greg Hunter.

Gold & Silver Moving Closer to Bottom

The chart shows an 11-year trendline marking what should be rock solid support at or slightly above $17. A final decline could touch the trend line and then begin a strong reversal.
Precious Metals Moving Closer to Bottom
Gold has more downside potential and could easily make a new low. If and when the weekly low of $1200 breaks, Gold could plunge to its bottom within a few weeks. Keep an eye on $1080, which is the 50% retracement of the entire bull market.

The Global Death Cross Just Got Deathier

In the immortal words of Cher - "Do you believe in life after QE; I can feel something inside me say, "I really don't think you're strong enough, Now."
The Global Death Cross Just Got Deathier
How does this end well?

Don't Get Bullish on Copper Yet

The Decline Appears Far From OVER.

Many traders have noted that copper  has found some support after its downward break out of the 2011-2012 triangle formation. Some have even begun taking the position that copper is ready to rally. To those traders we advise caution, as we believe the bearish course is likely to persist for another year or longer.
It makes sense that price acknowledged support around the 2.92 level, since that is the Fibonacci 0.618 multiple of the "crash" decline of 2008. However, note how well price has behaved with regard to the declining Schiff channel shown on the monthly chart below. We expect the channel boundary to continue to provide resistance, and another test of the support level is probably due soon. Either the channel resistance or the Fibonacci support must yield, and we believe a downward break is likely. (A decisive break and close above the monthly channel would have us reassess the Elliott wave count described in this article, although it would not necessarily be a long-term bullish development.)
The long-term price target of 1.78 for the completion of big wave C also is based on a Fibonacci multiple of the 2008 decline.
Copper Futures Monthly Chart
A different Schiff channel on the weekly chart helps illuminate the wave structure. We believe price has traced the component waves [i] and [ii] of the big C-wave break out of the triangle. Now it is in the process of moving through the internal waves within [iii]. Thus, we believe price is on the verge of a powerful declining wave (iii) inside wave [iii].
The target levels shown on the weekly chart are speculative, since we don't yet know where wave (ii) actually ends. Assuming that a downturn begins soon, then the upper support levels at 2.67 and 2.52 are likely regions for the internal wave (iii) to finish, and the next lower support around 2.34 is a likely area for the larger wave [iii] to halt. After that, we would expect several months of corrective activity before an eventual move down into the 1.78 region shown on the monthly chart.
Again, it is important to see whether price stays within the channel in the near term, and an upward break above the channel would cause us to reassess the scenario described here. For the week of June 2, the channel will pass near 3.20.
Note also that Wave59's Adaptive CCI indicator is testing the zero line on the weekly chart, which often indicates the market is at a decision area. It can either reverse course and send the indicator back downward (our scenario), or it can cross over while price rallies. A daily chart with a proposed wave count can be found at our website.
 Copper Futures Weekly Chart

Chile’s Codelco Output slips slightly in first quarter

Chile’s Codelco, the world’s top copper producer, said Friday (in Spanish) output dropped slightly in the first quarter and its profit dived as metal prices fell and ore grades deteriorated.
The company posted a 0.3%$ drop to 383,000 metric tonnes, and said its pre-tax profit tumbled 38% to $539 million.
The miner said efforts to reduce production costs partially helped to offset the sharp drop in revenue, as copper prices averaged $3.194 a pound in the first three months of the year, a value that is 11% lower than in the same period of 2013.
Chile’s Codelco Output slips slightly in first quarter
Codelco's Finance and Administration vice-president, Ivan Arriagada.
Finance and Administration vice-president, Ivan Arriagada, said that despite the slight output fall, Codelco is dealing with prices well above the average registered in the company’s history. However, he acknowledged the firm needed to continue efforts to reduce costs and increase productivity.
Codelco has seven mining divisions. Radomiro Tomic, Chuquicamata, Gabriela Mistral, Salvador, Andina, El Teniente and the new Ministro Hales mine, which began production in the last quarter of 2013 and it is set to reach its full capacity this years.
The state-owned miner also owns the Ventanas copper smelter and refinery, has a 49% stake in El Abra, a joint venture with US-based Freeport-McMoRan Copper & Gold, and —since 2012— owns 20% of Anglo American Sur.
Chile expects mining investment to reach $112 billion by 2021, figure that includes the $27bn planned by Codelco. By the same year, the country’s total copper production is projected to reach an annual 8.1 million metric tons.
The red metal accounts for 60% of Chile's exports and 15% of gross domestic product.

Big Positive News Flow for Stock Market in Next 90 DAYS - Finance Ministry Source

REFORMS PIPELINE
* ECBs: Foreign borrowing norms likely to be liberalised
* PERMANENT ESTABLISHMENTS: Global income of India-based establishments might not be taxed
* DEPOSITORY RECEIPTS: Unlisted companies’ sale of receipts against debt could be allowed
* CAPITAL CONTROLS: Outward remittance limit might be restored to $200,000 from $75,000 at present
* EUROCLEAR: To enable cross-border settlement of locally-issued government bonds
* ROAD SHOWS: Finance Minister Arun Jaitley to sell the India story in London, Tokyo, Hong Kong, Singapore, New York
Big Positive News Flow for Stock Market in Next 90 DAYS - Finance Ministry Source* RETAIL PARTICIPATION: Tax sops to encourage retail investors’ participation in equityThe finance ministry is set to push through major reforms in equity and debt markets to be implemented in the next three months. According to the plan, the foreign borrowing norms are to be liberalised and the capital controls imposed by the Reserve Bank of India last year rolled back. The ministry is also considering replacing short-term capital gains tax with a higher securities transaction tax (STT).
While tax incentives are being considered for retail investors and permanent establishments managing global funds in India, measures are in the offing to deepen corporate bond markets, strengthen retail participation in equities, comprehensively revamp depository receipts and join Euroclear, the world’s largest securities settlement system.
To sell the Indian reform story to foreign investors, Finance Minister Arun Jaitley is planning to go to London, Tokyo, Hong Kong, Singapore and New York for road shows.
“We are looking at a three-month time-frame to roll out many of these measures. Some that require legislative amendment might come in the Union Budget. The restrictions imposed by RBI in July last year will also be lifted,” a finance ministry official, asking not to be named
Budget measures might include abolishing short-term capital gains tax and, instead, levying a higher securities transaction tax (as suggested by the Parthasarathi Shome committee), exempting global income of India-based permanent establishments from tax, and offering tax sops to encourage retail investors’ participation in equity markets.
The finance ministry wants to take measures to boost investments by domestic players, especially the retail ones, as the market rally in recent times has mainly been driven by inflows from foreign investors. “Participation of retail investors is a big concern. We have to push this in a big way,” another official said.
The ministry will also try to widen the scope of both American and global depository receipts (DRs). Currently, only listed companies are allowed to sell DRs (that too only against underlying equity shares). The M S Sahoo committee had proposed DRs for debt and unlisted companies as well. These would give easy access to foreign investors who don’t wish to invest directly in Indian companies.
The finance ministry also wants to relax the external commercial borrowing (ECB) norms and enable companies to fully hedge against foreign currencies. “We want to let borrowers decide how much they want to raise. If you hedge it, the cost of borrowing goes up. So, naturally, they will be cautious,” said the second official quoted earlier.
Experts said ECBs should, in fact, be liberalised generally, with control only for certain sectors. “Refinancing of ECBs should be allowed on a wholesale basis. They should ease end-use of ECBs because international markets provide cheaper funds. Its use should be expanded significantly, while there should be control for certain sectors,” said Abizer Diwanji, partner and national leader (financial services), EY.
In a step towards internationalising debt, the government is also planning to join Brussels-based Euroclear bank.
This will facilitate cross-border settlement of locally-issued government bonds. Officials said this would bring down borrowing cost for Indian companies. The ministry is getting legal opinion on whether this would require amendment to the Sebi Act. It is awaiting a formal view from RBI on the issue.
The government is also trying to liberalise the rupee-denominated corporate bond market. So far, its efforts to deepen this have yielded little result.
“If banks are ready to lend at cheaper rates, who would go for corporate bonds? Unlike the US, our economy is dependent on bank debt,” the official explained.