High-Frequency Trading and High Returns

"The rise of high-frequency trading (HFT) in the U.S. and around the world has been rapid and well-documented in the media. According to a report by the Bank of England, by 2010 HFT accounted for 70% of all trading volume in US equities and 30-40% of all trading volume in European equities. This rapid rise in volume has been accompanied by extraordinary performance among some prominent hedge funds that use these trading techniques. A 2010 report from Barron’s, for example, estimates that Renaissance Technology’s Medallion hedge fund – a quantitative HFT fund – achieved a 62.8% annual compound return in the three years prior to the report.
Despite the growing presence of HFT, little is known about how such trading strategies work and why some appear to consistently achieve high returns. The purpose of this post is to shed some light on these questions and discuss some of the possible implications of the rapid spread of HFT. Although much attention has been given to the potentially destabilizing effects of HFT, the focus here instead is on the basic theory behind such strategies and their implications for the efficiency of markets. How are some HFT funds such as Medallion apparently able to consistently achieve high returns? It is natural to suspect that such excellent performance is perhaps an anomaly or simply the result of taking significant risks that are somehow hidden or obscured. Indeed, this is surely the case sometimes. However, it turns out that there are good reasons to believe that many HFT strategies are in fact able to consistently earn these high returns without being exposed to major risks..."

at http://baselinescenario.com/2012/11/29/high-frequency-trading-and-high-returns/

Despite Choppiness, Gold To Have Massive Breakout In 2013

"With continued volatility in gold and silver, today King World News wanted to share what top Citi analyst Tom Fitzpatrick released concerning the action in the gold market. Fitzpatrick has been incredibly accurate regarding his forecasts for both gold and silver.

 

Here is what top Citi analyst Fitzpatrick had to say, along with powerful charts: “Gold: Gold held the 76.4% retrace against the Nov low yesterday thereby giving an early indication that the correction down may have ended. Additional support comes in at $1,669..."

 

at  http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/12/6_Despite_Choppiness,_Gold_To_Have_Massive_Breakout_In_2013.html

The Coming Derivatives Panic That Will Destroy Global Financial Markets

"When financial markets in the United States crash, so does the U.S. economy. Just remember what happened back in 2008. The financial markets crashed, the credit markets froze up, and suddenly the economy went into cardiac arrest. Well, there are very few things that could cause the financial markets to crash harder or farther than a derivatives panic. Sadly, most Americans don't even understand what derivatives are. Unlike stocks and bonds, a derivative is not an investment in anything real. Rather, a derivative is a legal bet on the future value or performance of something else. Just like you can go to Las Vegas and bet on who will win the football games this weekend, bankers on Wall Street make trillions of dollars of bets about how interest rates will perform in the future and about what credit instruments are likely to default. Wall Street has been transformed into a gigantic casino where people are betting on just about anything that you can imagine. This works fine as long as there are not any wild swings in the economy and risk is managed with strict discipline, but as we have seen, there have been times when derivatives have caused massive problems in recent years. For example, do you know why the largest insurance company in the world, AIG, crashed back in 2008 and required a government bailout? It was because of derivatives. Bad derivatives trades also caused the failure of MF Global, and the 6 billion dollar loss that JPMorgan Chase recently suffered because of derivatives made headlines all over the globe. But all of those incidents were just warm up acts for the coming derivatives panic that will destroy global financial markets. The largest casino in the history of the world is going to go "bust" and the economic fallout from the financial crash that will happen as a result will be absolutely horrific..."

at http://theeconomiccollapseblog.com/archives/the-coming-derivatives-panic-that-will-destroy-global-financial-markets

Marc Faber : Central Banks are Monetizing Debts

"Marc Faber: Basically we are in an environment where central banks are monetizing debts and where the balance sheets of central banks are increasing, and this will continue, especially in the United States and Europe. We are also in an environment where in the long run, a lot of sovereign debts will either not be paid or will have to be inflated away. So owning some physical gold is a prudent insurance. I am specifying here 'physical gold' because one wants to protect oneself as an investor for the potential of a systemic collapse of the financial system. - in ET Now"

at http://marcfaberchannel.blogspot.com/2012/12/marc-faber-central-banks-are-monetizing.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28Marc+Faber+Blog%29

Tom Cloud: Wholesale Gold Inventories Evaporating

"In this week’s interview with gold dealer Tom Cloud of National Numismatic Associates, we cover one very timely topic – the sudden decline in gold inventories – and one perennial question – how can an individual put physical precious metals in an IRA.
DollarCollapse: Good to talk to you again Tom. Let’s start with your observation that the major gold wholesalers don’t seem to have their usual level of inventory. Why the sudden tightness?
Tom Cloud: Of the seven or eight major wholesalers that send me price sheets, almost every one is having supply issues. Some [coins and bars] I can get right away, but most take between a few days and two weeks.
The wholesalers don’t necessarily know why this is, but some speculate that the 58 tons that China’s central bank purchased in September was responsible, and that [the Chinese] purchased at least that much more in October. When a big seller elects to sell something they don’t even put it in the market any more, they just call up China’s central bank, and we see the report four weeks later, if we see it at all.
And it’s not just China. Central banks in general are buying. Until 2011 central banks were selling gold but in the last two years hardly any are selling and many are buying. I’ve been doing this for 35 years and last month made my first sale to a central bank.
Another factor is the new Basel III agreement in which gold counts for what it’s worth rather than 50% of what it’s worth, which makes it a more attractive asset for banks. And the final factor is that more Americans are moving into metals, which is producing more small orders to go with the big orders from central banks. It’s different for each wholesaler, but the overall effect is to tighten inventories..."

at http://dollarcollapse.com/precious-metals/tom-cloud-wholesale-gold-inventories-evaporating/

Jim Rogers : There's too much speculation in Gold right now

"Jim Rogers: I own gold and I own silver. I own all the precious metals, especially gold and silver. I'm not sure I would buy right now. Gold has gone up 12 years in a row, which is extremely unusual for any asset, at least in my experience. I don’t know any asset that’s gone up 12 years without a down year except gold. Gold has had only one decline over 30 percent in those 12 years. That, too, is extremely unusual. Plus, if you look at the open interest from the CFTC, the speculators have been piling into gold. The number of call options is more than twice the put options. All the signs are that there's too much speculation in gold right now. I’m not selling, by any stretch. I own it. If it goes down, I’ll buy more. If America bombs Iran, I’ll probably buy more going up. But I own it and, over the longer term, gold is going to go much higher because the world is doing nothing but printing money. And when the world economies get bad again, they're going to print even more money. But I'm not buying now. - in indexuniverse"

at http://jimrogers1.blogspot.com/2012/12/jim-rogers-theres-too-much-speculation.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FWOHK+%28Jim+Rogers+Blog%29

Confiscation, Price Suppression & The True Gold & Silver Price

"Today 40-year veteran, Robert Fitzwilson, wrote the following piece exclusively for King World News. Fitzwilson, who is founder of The Portola Group, discusses the true price of gold and silver, confiscation, price suppression, coming shortages, and what powerful entities are doing in this chaotic environment..."

at   http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/12/4_Confiscation,_Price_Suppression_%26_The_True_Gold_%26_Silver_Price.html

REPORT: Anonymous Hacks Top Nuclear Watchdog Again To Force Investigation Of Israel

"It appears the hacking collective Anonymous has compromised the internal computer systems of the world's top nuclear watchdog for the second time in two weeks, Adam Kredo of The Washington Free Beacon reports.

YouTube/AlJazeeraEnglish

The hackers claim to have seized “highly sensitive” nuclear data and satellite imagery from the International Atomic Energy Agency (IAEA) and threaten to publish the confidential information if the IAEA does not investigate Israel's unofficially acknowledged nuclear program.

The group, called Parastoo (Farsi for bird), declared that it obtained documents from the IAEA's internal “nuclear data section”—including " Confidential ‘SafeGuard’ Documents, Satellite Images, Official letters, [and] Presentations”—and published a couple of satellite images, screenshots of the IAEA's internal system, an internal IAEA letter as well as the names and emails of IAEA judges and IAEA auditors.

"IAEA cannot just keep us away by turning off their Servers (either old or new ones!)," the group said in a statement, which also lists parts of the IAEA system it says is under its control. "There are plenty more of where this information came from but we guarantee that these information will stay in a very safe place with us. This information only released to open eyes of IAEA and independent media to real threat of world peace, Israel."

Last week IAEA chief Yukiya Amano recognized the first hack—which led to the publication of personal information of hundreds of IAEA scientists—but suggested that no sensitive information about Iran's atomic activities had been stolen.

The newest statement from the hackers ends with Anonymous' tagline and a question:

We are Anonymous.
We are Legion.
We do not forgive.
We do not forget..."

at  http://www.businessinsider.com/anonymous-hack-iaea-nuclear-weapons-israel-2012-12#ixzz2E1d8WSVt

Chinese Cities Have Absolutely Dominated The Past Twenty Years

"Chinese cities have been on an absolute economic tear in recent years.

The Brookings Institute 's latest report, the Global MetroMonitor Report, tracks the economic growth of metro areas from 2011-2012 — and Chinese cities were clearly miles ahead of their counterparts in the West.
13 of the top 20 cities in the Overall Economic Index — which is calculated using annualized growth rate of real GDP per capita and annualized growth employment — were from China, including the special administrative region of Macau at number one.
But over the last twenty years the results are even more impressive. Business Insider asked Brookings how GDP and employment has changed from 1993 to 2012, and here's what we found:

Data: Brookings Institute, Rank: Business Insider

at  http://www.businessinsider.com/chinese-cities-dominate-brookings-report-2012-12#ixzz2E1LoKzmV

Arvind Subramanian's Book, Eclipse, Named Best Book by China Business News

"The Peterson Institute for International Economics is pleased to announce that Eclipse: Living in the Shadow of China's Economic Dominance (2011), by Arvind Subramanian, has been named one of the three Best Books of 2012 by China Business News. Subramanian, a senior fellow at the Institute and at the Center for Global Development, shares this year's Best Book honor with Henry Kissinger for his book, On China, and with Zhou Xiaochuan, the governor of the Central Bank of China, for his book, The Global Financial Crisis: Observations, Analysis and Countermeasures. The award was presented during China Business News's annual conference in Beijing on November 24. Eclipse was published by the Peterson Institute and has been translated into Chinese, Japanese, and Spanish (forthcoming). There are more than 100,000 copies in print worldwide.
"We are extremely proud that Arvind's book has been recognized with this award for its important discussion of China's ascendance as an economic power," said C. Fred Bergsten, director of the Peterson Institute. "The award demonstrates that Arvind's historical and political analysis is spurring debate and discussion throughout the world, not just in the United States. He is in very good company with Dr. Kissinger and Governor Zhou!"
In the book Subramanian argues that China's global economic dominance is likely to be more imminent, broader in scope, and larger in magnitude than is generally believed. He explains this dominance as a product of historical forces, economic policies and objectives put forward by China, and argues that the United States cannot do much to alter the trend. This conclusion challenges a widely held view that the right set of economic policies can retain the United States' position as the most economically powerful nation in the world..."

at http://www.piie.com/publications/newsreleases/newsrelease.cfm?id=198&utm_source=feedburner&utm_medium=%24%7Bfeed%7D&utm_campaign=Feed%3A+%24%7Bupdate%7D+%28%24%7BPIIE+Update%7D%29

Over 20 Million Houses Sitting Vacant-Fabian Calvo

"Real estate expert Fabian Calvo says there’s more to the story about rising prices in the housing market than what’s reported by the mainstream media. Calvo charges, “There’s a tremendous amount of manipulation . . . Yes, prices have gone up 3%. I see it, but it’s because the inventory has been suppressed on purpose by big players . . . not foreclosing on properties.” Calvo should know because he runs a company called TheNoteHouse.us. It buys and sells $100 million annually in distressed debt and real estate. Calvo says, “Over 20 million houses, on any given night in America, are completely sitting vacant.”
According to Calvo, the economy is being helped by “shadow stimulus.” It’s coming from millions of underwater homeowners who have stopped making mortgage payments. Calvo says, “Money that would have been otherwise allocated towards a housing payment is going into consumer spending.” The Fed is also propping up housing by suppressing interest rates. Calvo says the fragile real estate market would crash if rates rose just a little, and he adds, “That’s why you’re going to see low interest rates . . . through 2015 or until there’s some kind of dollar or bond crisis.” Join Greg Hunter as he goes One-on-One with Fabian Calvo..."

at http://usawatchdog.com/over-20-million-houses-sitting-vacant-fabian-calvo/

Sprott: Shorts May Need To Deliver 40 Million Ounces Of Silver

"Today billionaire Eric Sprott spoke with King World News about key players on the Comex that may be standing for delivery of as much as a staggering 40,000,000 ounces of silver. This is the second in a series of interviews with Sprott that will be released today which reveals what is going on behind the scenes with the increasingly desperate Western central planners and their gold and silver price suppression scheme.

 

Eric King: “We have the LBMA eliminating reporting on silver lease rates, we covered that extensively with James Turk. There is frustration out there. How much longer can they keep gold and silver effectively manipulated? Are we getting very close to where they are going to lose control of these markets?..."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/12/1_Sprott__Shorts_May_Need_To_Deliver_40_Million_Ounces_Of_Silver.html

Collapse Is What Is Really Taking Place Around The World

"...“He told me he is in Athens now and is observing what is going on in Greece. He said to me, ‘Athens is nothing compared to what we have in France now with the trouble we are seeing with the unions, poor people, people in the streets.’ 

 

Still, there is no austerity in France compared to Greece. He expects France to be a lot worse than Greece will ever be. That’s one European country and this will be the case in many other European countries. The UK will be terrible economically, but the social unrest will also be very, very severe and extremely difficult in the UK. 

 

So we are seeing it everywhere. Mervyn King, head of the Bank of England, he now says UK banks will need another 35 to 50 billion pounds of capital. He says the banks in England are undercapitalized and the risks are major. Here you have a central bank chief who openly says the banks are at risk of failing. Of course this is the risk worldwide with banks, but it is refreshing to see a central bank governor actually saying it officially. Sadly this is the case with almost all countries in the world.

 

Turning to Japan once again, as I said in the last few interviews, Japan is one of the biggest risks in the world because of their economic position. The Bank of Japan had a loss in the last quarter of 230 billion yen, which is about $3 billion. Their balance sheet is also continuing to expand, it’s up to roughly 156 trillion yen or about $2 trillion.

 

Moving to the US, GDP was better at 2.7%, but again that was just inventory buildup and government spending. GDP is still weak if you take those two elements out. Consumption is very weak and inflation in the US is running at 1.6%. Anyone who buys food and fuel knows inflation is a lot higher than 1.6%. Also, if you used the real ‘deflator,’ GDP would be negative.

Consumption will continue to head lower because people are worse off now. There are 127 million people in the US dependent on government welfare. This is against a full-time working population of 115 million people. So there are 115 million people working full-time and 127 million depending on the government. 

 

The bottom line is there are less and less people to pay for the welfare. This is why the deficits will continue and grow much worse than they are today. Also, if you look at median income in the US, it’s down 8% in the last three years, and disposable income is down a staggering 25% if you adjust for inflation in the last ten years. 

 

If you look at the real estate bust in the US, take states like Florida, California and Arizona, 50% of homeowners have negative equity. Las Vegas is as high as 70% negative equity. Again, it means that the banks are never going to get the money back. This simply means that the government has to print more money.

 

This is the same problem in developed countries all over the world. Therefore, governments will print increasing and virtually unlimited amounts of money. So currencies will continue to reflect that activity. The dollar, euro, yen, and the other currencies have already fallen 80% in real terms vs gold over the last ten years. These currencies will continue to fall another 80% to 100% vs gold in coming years. 

 

So investors have to look at how to preserve their wealth and the way to do that is with physical gold. Investors are always asking, ‘What percentage of my money should be in physical gold?’ I told people in 2002 to put 50% of their money into gold. That would now total 85% since gold has gone up more than any other asset..."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/12/1_Collapse_Is_What_Is_Really_Taking_Place_Around_The_World.html

Here Is What Will Break The Massive Silver Short Positions

"...“How many times have I seen the type of action we witnessed last week in the last 15 years? You can set your watch by this type of action. We had big open interest and then they attack it. So down gold and silver go as they clean out the weak hands.

The metals will rebuild themselves, and one of these times it won’t happen that way. The physical market will overpower these paper players. It didn’t happen this time, but at some point it will.

I was reading a fascinating article in the Financial Times. I think it’s a worthwhile paper, but you have to understand their editorial bias, one of which is they don’t care for gold at all. They had an article in there over the weekend describing the recent action of the gold market titled, ‘Gold wobbles after mid-week selloff unsettles investors.’

They did acknowledge that when the week started, a lot of people were looking for gold to break through the key $1,800 level. Then, all of the sudden on Wednesday the yellow metal dropped sharply on large sell orders. What they didn’t comment on was, who were these large sell orders?

I would bet my life that they were the same suspects which have been pulling this stunt for the last 15 years. So the price managers pounded the gold price down and they tried to come up with some reasons for it. But how does that explain silver getting crushed?

This was the same type of action where the same people knock down gold and silver to try to give the impression that this is not a good place to invest, butt is the only place to be in my opinion. At some point the market is going to collectively going to realize this, but that day hasn’t arrived yet.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/12/3_Here_Is_What_Will_Break_The_Massive_Silver_Short_Positions.html

The Fed Is Running Out Of Short-Term Securities To Sell

"Under Fed Chairman Ben Bernanke, the Fed has been the great enabler of Washington’s fiscal excesses of the past few years. The Fed’s quantitative easing blurs the line between fiscal and monetary policies. The Fed may still be politically independent, but fiscal policy has become very dependent on the willingness of the Fed to purchase lots of government securities. A consolidated statement of the US Treasury and the Fed would show that $1.7 trillion of US government debt, which is held at the Fed, is costing the government only 0.25%.

In yesterday’s WSJ, Jon Hilsenrath reported that the FOMC is likely to vote for QE4 when the committee meets on December 11-12. In September, the FOMC implemented QE3, i.e., an open-ended commitment to purchase mortgage-backed securities at the rate of $40 billion per month. The Fed’s Operation Twist is scheduled to terminate at the end of the year. Under this program, the Fed purchased $45 billion a month in long-term Treasuries, paying for them with the proceeds from its holdings of short-term debt.

Now some members of the FOMC are pushing for more purchases of Treasury bonds. However, the Fed is running out of short-term securities to sell. Hence, QE4! As Hilsenrath observes:

“The Fed has run down its stockpile of the short-term Treasurys to sell to fund long-term purchases. To keep buying the long-term bonds it would need to fund the purchases by creating new bank reserves, which in effect is printing money. That is how the Fed has funded previous Treasury purchase programs and how it is funding the mortgage-bond buying. Though critics say this could be especially inflationary, many Fed officials believe they can manage the reserves without risking inflation.”

at  http://blog.yardeni.com/2012/11/us-monetary-fiscal-policies.html#ixzz2DdnjICGO

Jim Rogers: We Will have Wars

"Daily Bell: Are there going to be additional wars?

Jim Rogers: Oh, yeah. Throughout history there has always been war. There is no period in history where we didn't have wars of some sort. Politicians like to blame somebody and it's easier to blame foreigners, so as tensions rise people will blame foreigners more and more.
Also, I'm told throughout history when you have shortages of raw materials, that leads to strife and wars and we have shortages of raw materials developing which will be bigger and bigger. So we will have wars. - in Daily Bell"

at http://jimrogers1.blogspot.com/2012/11/jim-rogers-we-will-have-wars.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FWOHK+%28Jim+Rogers+Blog%29

Richard Russell - Bursting Bubbles Will Make Things Far Worse

"With gold, silver and stocks on the move, the Godfather of newsletter writers, Richard Russell, issued this warning in a note to subscribers: “I continue to believe that we are in a primary bear market, one that is, and has been, disguised by the Federal Reserve's series of QEs. Bernanke's theory is that if the Fed creates enough “money,” then sooner or later deflation and sluggish growth must turn into inflation and faster growth.”

 

Richard Russell continues:

 

“The problem with Bernanke's theory is that the economic world is caught in a massive world-wide cycle of deflation -- more goods produced than can be consumed. Normally, the deflationary trend would fully express itself through a primary bear market that would get rid of the weak hands and those who don't deserve to survive. This would result in stocks declining to the point where they would once again represent great values.

 

The theory espoused by the world's central banks is that they can control the planet's economic cycles. Actually, I believe what is happening is that the seemingly endless flood of fiat currency is creating a series of bubbles, which, in the course of time, is fated to burst. The bursting of these various bubbles will result in the bear market being far worse than would otherwise have been the case. As Shakespeare put it, “What fools these mortals be.”

Following the 1929 crash, the stock market embarked on a huge recovery that lasted into early 1930. Most present-day analysts are very familiar with the 1929-30 episode. So today's stock market had to do something different in order to draw retail investors (and pros) back in to the market. 

What the market did this time was to produce an even bigger and longer-lasting post-crash recovery. The recovery has lasted far longer than most experts expected and has carried the Dow within 500 points of its 2007 record high.

 

The 2008-09 bear market decline was swift and violent. It was over almost before most investors knew what had hit them. According to the law of alternation, the next bear market decline should be just the opposite in character of the 2008-09 decline. The next decline should be slow and lazy, with stocks sinking in a deceptive, leisurely manner, sinking in a lazy way that scares nobody.”

“The US gold coverage ratio, which measures the amount of gold on deposit at the Federal Reserve against the total money supply, is currently at an all-time low of 17%. This ratio tends to move dramatically and falls during periods of disinflation or relative price stability. The historical average for the gold coverage ratio is roughly 40%, meaning that the price of gold would have to more than double to reach the average. The gold coverage ratio has been there twice during the twentieth century. Were this to happen today, the value of an ounce of gold would exceed $12,000.” Scott Minerd, analyst, courtesy Investment Rarities, Inc."

 

at  http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/11/29_Richard_Russell_-_Bursting_Bubbles_Will_Make_Things_Far_Worse.html

Escalating Delinquency Rates Make Student Loans Look Like the New Subprime

"Now that student loans are undeniably in bubble territory, the officialdom is starting to wake up and take notice. Evidence that students were taking on so much debt as a group that it was undermining their ability to be Good American Consumers wasn’t enough. A recent New York Fed study found that 94% of recent graduates had borrowed to help pay for their education, and average debt levels among student borrowers is $23,000. Remember, that average includes seasoned borrowers, who presumably borrowed less and also in many cases reduced the principal amount of their loans, so the average amount borrowed by recent grads is certain to be higher. Student debt is senior to all other consumer debt; unlike, say, credit card balances, Social Security payments can be garnished to pay delinquencies. As a result, it has contributed to the fall in the homeownership rate, since many young people who want to buy a house can’t because their level of student debt prevents them from getting a mortgage.
But despite some pious noises about the burden that student loans place on young Americans, there’s been no willingness in the officialdom to do much about it. But that may finally be changing. The latest Federal Reserve data is grim.



Student loan delinquencies are getting into nosebleed territory. The Wall Street Journal, citing New York Fed data, tells us that student debt outstanding increased 4.6% in the last quarter. Repeat: in the last quarter. Annualized, that’s a 19.7% rate of increase* during a period when other consumer borrowings were on the decline. And this growth is taking place while borrower distress is becoming acute. 11% of the loans were 90+ days delinquent, up from 8.9% at the close of last quarter. The underlying credit picture is certain to be worse, since many borrowers aren’t even required to service loans (as in they are still in school or have gotten a postponement, which is available to the unemployed for a short period). And it was the only type of consumer debt to show rising delinquency rates.
This is the new subprime: escalating borrowing taking place as loan quality is lousy and getting worse. And in keeping with parallel to subprime, one of the big reasons is, to use a cliche from that product, anyone who can fog a mirror can get a loan..."

at http://www.nakedcapitalism.com/2012/11/escalating-delinquency-rates-make-student-loans-look-like-the-new-subprime.html#7wkEfl2lAKM5qM5E.99

The Giant Currency Superstorm That Is Coming To The Shores Of America When The Dollar Dies

"By recklessly printing, borrowing and spending money, our authorities are absolutely shredding confidence in the U.S. dollar. The rest of the world is watching this nonsense, and at some point they are going to give up on the U.S. dollar and throw their hands up in the air. When that happens, it is going to be absolutely catastrophic for the U.S. economy. Right now, we export a lot of our inflation. Each year, we buy far more from the rest of the world than they buy from us, and so the rest of the world ends up with giant piles of U.S. dollars. This works out pretty well for them, because the U.S. dollar is the primary reserve currency of the world and is used in international trade far more than any other currency is. Back in 1999, the percentage of foreign exchange reserves in U.S. dollars peaked at 71 percent, and since then it has slid back to 62.2 percent. But that is still an overwhelming amount. We can print, borrow and spend like crazy because the rest of the world is there to soak up our excess dollars because they need them to trade with one another. But what will happen someday if the rest of the world decides to reject the U.S. dollar? At that point we would see a tsunami of U.S. dollars come flooding back to this country. Just take a moment and think of the worst superstorm that you can possibly imagine, and then replace every drop of rain with a dollar bill. The giant currency superstorm that will eventually hit this nation will be far worse than that..."

at http://theeconomiccollapseblog.com/archives/the-giant-currency-superstorm-that-is-coming-to-the-shores-of-america-when-the-dollar-dies

Comex Open Saw 24 Tonnes of Paper Gold Dumped at Market

"I am open to other possibilities, but it certainly looks like the Dr. Evil strategy being employed for the Comex post-option expiration in which a large number of call options are turned into active December futures contracts. I suggested that this might happen yesterday given the way in which the option market closed.

But I am sure Bart Chilton and the stalwarts at the CFTC have already identified the seller, and examined their selling motivations and the size and placement of their 'fat finger,' and will let us know about it four or five years from now.

"Gold saw a massive 24 tonne sell order (7,800 contracts) at 08:20 a.m. New York time - bang on the opening of the world's largest gold exchange - which a fall of 2.25% in the market price.

If the selling was year-end profit-taking then it was inept. Dealers try and finesse big sell orders into the market to get the best (highest) price for the biggest volume they can and thereby optimize profit - that requires stealth. If on the other hand it was a "fat finger" episode as has been suggested with a broker said to be looking to roll his December gold futures contract then it was even more inept.

More likely this could be a short play, with the seller looking to trigger stops below the market at $1730 and thus extend the move significantly lower and thus increase his profits. If so, he certainly caught the market on the hop as the move is counter-intuitive with everything else that is going on in the economy..."

 

at  http://jessescrossroadscafe.blogspot.com/2012/11/comex-open-saw-24-tonnes-of-paper-gold.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29