Friday, September 16, 2011

Must-Listen Interview On The Global Physical Gold Market

"It appears that India wants to buy the entire world's gold supply at the right price"  - John Brimelow

This is about an 18 minute interview by James Turk of John Brimelow, someone who most you have never heard of but who provides invaluable reporting/information on the gold trading globally - specifically on the massive physical buying markets in India and Asia.  I access the publicly available commentary by Brimelow in the nightly Midas report at  It is one of the key tools we use to manage our fund. 

If you are interested in learning about some of the key variables driving the trading price gold, you need to listen to this:   LINK


  1. Is this money mis-management?

    Giving Up on the Dream
    What started as a family's ideal home blows their budget—and is now for sale for $28.8 million
    In 2004, David Sandwith and his wife, Becky, snapped up a stretch of this rocky coast. Their goal: build the perfect dream house to raise their kids.

    Six years, two more kids (total four) and more than $30 million later, the home isn't done, but the Sandwiths are. In September they put the house on the market for $28.8 million, the priciest listing in the Seattle area.
    Paradise Lost

    Retired at 40, Mr. Sandwith had an ownership stake in Mikron, a manufacturer of window and door components started by his father that sold in 2004 for about $205 million. Usually attired in jeans or shorts, Mr. Sandwith devotes much of his time to coaching his kids' sports teams and volunteering at their schools. He said selling the house would give his family the flexibility to afford other experiences, like traveling the world.

  2. Money makers or potential bunker busters? hmmm etfs? jpm? derivatives? sounds explosive!

    Delta One Desks Are Big Moneymakers
    Instead of buying bars of gold, a hedge fund manager may buy an exchange-traded commodities fund, or even a gold fund. These derivatives can also be attractive because they typically require little upfront capital.

    In some cases, the Wall Street firms themselves try to profit from the tiny differences between the values of the derivatives and the underlying assets.

    In recent years, the desks have generated billions of dollars for Wall Street firms. In a research note last year, Kian Abouhossein, an analyst with JPMorgan Chase, said that he expected revenue from the business of about $11 billion this year, growing on average about 9 percent from 2010 through 2012.

  3. Dave - I haven't seen any recent comments from you regarding ecuxf.

  4. Very quick to silence the truth..

    In the second half of the show Max talks to Aaron Krowne of about mortgage lending fraud and government complicity.

    @12 minutes

  5. Michael Pento - JP Morgan Silver Manipulation & US Debt Crisis

    As a side note, if the allegations that JP Morgan has engaged in silver manipulation are proven correct, as discussed in the King World News piece, the conspiracy theorists will have been exonerated. This will vindicate those who believed for so many years that prices in the silver market were being artificially depressed. Chalk one up for the hard money advocates as this is a big blow to the wire houses who have been hopelessly defending their silver short positions.”

  6. (Dave)

    RE ECU: I'm very disappointed with the performance of the stock since the merger was closed. I really don't know what the problem is. The stock is highly manipulated and still is - there was a very high short interest in AUMN pre-merger. Hopefully we'll get to see some deep drilling results soon and hopefully they will be very good and blow awya the shorts.

  7. Hey Dave

    Il Folletto

  8. Gold and Silver Stocks

    Osiris Investment Partners went on to write: “[S]ince the early 1980s, when the XAU Index was first constructed, until the fall of 2008, this ratio remained in a range of .16 to .38, even during the depths of the gold bear market. [That is the ratio of the XAU Gold Stock Index divided by the price of an ounce of gold in U.S. dollars. - FJS] During the financial crisis of 2008, this ratio dropped briefly to .09. Since that time, it has traded up to .16, but it has never exceeded the former floor. As I write today the ratio is .114. In other words, the gold shares are currently the cheapest that they have ever been, excluding a one-month period in the fall of 2008. On a fundamental basis, gold stocks have historically traded at 10 times or more annual cash flow. We are presently seeing many companies priced at one to three times potential forward cash flow, if they can execute their plan. Clearly, not all of them will realize the potential. However, many will.”

  9. (Dave)

    Thanks for the links!

  10. Right on cue...I think its been obvious for a long time

    Tom Stevenson: ETFs have potential to become the next toxic scandal

    Here are just a few of the reasons why ETFs are not all they are cracked up to be.

    First, around half of the ETFs in Europe today do not match the index they are designed to track by holding all of its constituent shares. Unlike the plain vanilla "full replication" ETFs which do, 45 percent of the market is in the form of so-called "swap-based" ETFs which instead use derivative agreements, often with investment banks, to simulate the performance of the underlying assets.

    Derivative trades add a second layer of uncertainty to the unavoidable ups and downs of the market, the counterparty risk that the organisation on the other side of the contract might go bust. Even worse, the provider of the ETF might sometimes be a part of the same organisation as the derivatives desk carrying out the swap.

  11. The Dutch Ask Their Central Bank: "Where Is Our Gold?"

    Think Ron Paul is the only person asking questions about the actual gold supposedly backing the currency in circulation. Think again: the "ask your central banker where his gold is" tour just went global after the Dutch the Dutch Socialists Party (SP)’s spokesman for financial affairs, Mr. Ewout Irrgang, asked the Dutch Secretary of the Treasury 10 detailed questions about the gold supposedly held by the Dutch Central Bank. Questions vary from: where is the gold? why are gold and gold receivables one line item? how much gold is loaned out? As Dutch website points out, "This is potentially a big breakthrough for global awareness on how central banks hide crucial info from the public and the disastrous effects central banks have on society." Is Belgium next to ask the same question in a vain attempt to understand just how much of its gold is permanently "lent out"? And after Belgium, everyone else with a central bank perhaps?

  12. Sniff,sniff...this smells funny...?

    Sept. 18, 2011, 9:24 p.m. EDT
    Bank of England warns on securities-lending risks

    "Interconnectedness between institutions--together with opacity around the pricing and exposure to risk associated with it--can amplify contagion in times of stress," the Bank said.

    The Bank warned in particular of the risks arising from dependency on revenue from securities lending for some market participants such as exchange-traded funds. It cited research by Deutsche Bank AG (DBK.XE) estimating that up to one-third of the total revenues of some ETS's is generated this way.

    exit stage left

  13. Delta Farce?

    Delta One

    Policymakers have orchestrated a huge dilemma. The ongoing simultaneous global expansion of debt and marketable instruments, along with the policy-induced reflation of global risk markets, has created an unprecedented accumulation of market-related risk. At the same time, a financial monstrosity has evolved that is in the (what had been highly-profitable) business of writing market insurance to protect against declining stock, Credit, sovereign debt, currency and commodities prices. The business of peddling ETFs, listed options, Credit default swaps (CDS), “swaps,” “swaptions,” and countless varieties of over-the-counter derivatives to protect against market risk has been booming. And the more authorities intervene to ensure unending Credit expansion and the ongoing inflation of global risk markets the greater the amount of market risk to hedge - and the grander the profit bonanza available from trafficking in market “insurance.”

    From the timing of increasingly vocal outcries against “high-frequency trading,” one might get the idea that these players sit back and become active only when they develop a hankering to see the market get wacked. From my perspective, I assume these players are among the most sophisticated, best informed and keenly opportunistic traders in the marketplace. Throughout the policy-induced rally that commenced in 2009, they likely garnered huge long-side profits buying (“squeezing”) heavily shorted stocks ahead of an enormous unwind of bearish hedges and bets (I don’t recall any protesting). They will gravitate to wherever they can garner a trading advantage (“front running”) ahead of the crowd. But mostly, I believe the “high-frequency” contingent is immersed in a game of extracting trading profits from this monstrous business of structuring, selling, hedging and managing market (“flood”) insurance. Call it “front running,” savvy or despicable market manipulation.