Occupy Wall Street Revolt reaches Silver Market

Arab Spring spreads to the United States.

As operation Occupy Wall Street buds into a potential monstrous patch of weeds scattered throughout, what would be, otherwise, a bankers Garden of Eden, with unconfirmed reports of the Transportation Workers Union, Teamster’s Union and Verizon Workers slated to join in on the bankers bashing this week in NYC, the silver market, too, is undergoing its own protest—of sorts—against the Monopoly money of the bankers—the U.S. dollar.

Speaking with Financial Sense Newshour’s James Puplava, CEO of KDerbes Precious Metals, Kathy Derbes, told listeners that September’s swoon in the silver price sparked a shocking revolt against paper money, as her clients came in with “extraordinary buying” for all silver products “across the board” in a frenzy to trade paper for precious metals, especially silver.

Derbes account corroborates reports out of King World News’ Eric King, who interviewed Eric Sprott of Sprott Asset Management last week, in which Sprott said his firm had been wiped clean of its silver stock during the huge price drop of the week ending September 30.

Similar to Sprott’s clients, Derbes’ explained that her clients are well-healed, shewed investors who are acutely aware of the bullish fundamentals underpinning the bull market in silver.  In fact, in the minds of these investors, according her, the reasons for converting paper money to hard-money have intensified.  “They know what’s going on,” she said.

While the selling intensified in the silver futures pits last week, Derbes said her clients previously had picked up on the paper game played at the Chicago Mercantile Exchange (CME) and don’t interpret the price drop as a disappointment.  The opposite reaction, she said, is true: these investors see the calamity as a gift.

“That [silver's 30+ percent drop within three days] was intense selling for a myriad of reasons, Derbes explained.  “But while that was going on, my clients on the physical side have had just extraordinary buying.”

“I think investors are really smart; they know what’s going on.  They understand that these price breaks, particularly this time around, are not telling us anything about fundamentals of gold and silver,” she continued.  “In fact, I think the reasons for owning it have gotten a lot stronger.  It’s basically a reaction to, in my opinion, short-term liquidity needs brought about by a number of different issues going on in the macro environment.”

Not only have premiums increased for sovereigns and privately-minted silver coins at bullion dealers during last week’s sell off, dealer delivery times are expected to match the delays following the aftermath of the global 2008-9 sell off.  At that time, reports from dealers across the globe indicated long lead times for larger orders, most notably, of which, came from Sprott Asset Management  and the subsequent ongoing drama associated with protracted delays in delivery of its 694-ton silver order in late 2010.

On Jan. 10, 2011, Sprott issued the following news release: 

As of Nov. 10, 2010, the Trust had contracted to purchase a total of 22,298,525 ounces of silver bullion. As of Dec. 31, 2010 a total of 20,919,022 ounces of silver bullion had been delivered to the Trust. The Trust expects to take delivery of the final 1,379,503 ounces of silver bullion by Jan. 12, 2011.

Derbes believes the market for silver may become tighter, still, in subsequent weeks and moths ahead following last week’s massive drop in the spot price at the COMEX.  Coin premiums have soared on Thursday and Friday of last week, just as they had during the last steep correction in paper silver two years ago.

“We’re probably in the beginning stages of what could be shortages; it certainly looks that way, so we’ll have to wait and see what happens,” she reckons.  “I’ll tell you this, the buying has not stopped.  If anything, it’s intensified this week.  It’s pretty amazing.”

“We have to remember that it’s [silver] a market that cannot be printed into existence like the paper currencies.”

The Occupy Wall Street movement is the latest in, what appears to be, an ongoing and more intensified crises in confidence in US institutions.  While protestors descend on Wall Street to voice their anger regarding its government taking side with big bankers and the Fed during the toughest economic times since the Great Depression, investors in droves are casting their vote against the paper dollar and in favor of hard money—gold and silver.

Marc Faber on the Gold Price

In early morning trading in Europe today, publisher of the Gloom Boom Doom Report Marc Faber gave CNBC his latest take on a plunging gold market.

“We overshot on the upside when we went over $1,900,” he told CNBC’s Steve Sedgwick.

“We’re now close to bottoming at $1,500, and if that doesn’t hold it could bottom to between $1,100-1,200.”

So far, spot on, as Faber’s call for gold to fall to $1,500-1,600 at a conference in Mumbai a little more than a week ago has materialized.  Faber said he holds 25% of his portfolio in gold.

Spot gold traded as low as $1,536 in Asia, Monday.  With less than two hours before the open in NY, gold is $100 off its low to trade at $1,636.  Silver, too, is up more than 10% off its low of $26.05.

Faber’s next level of support, between $1,100 and 1,200, coincides with gold’s 60-month moving average—and level that could be tested if the global financial crisis turns profoundly more ugly than the already terrible expectations implied by the colossal move into U.S. dollars and out of emerging market currencies during the past two weeks.

The Brazil real and Mexican peso, for example, have gotten clobbered since mid-September, registering staggering 22 and 16% total declines against the dollar in the past 5-6 weeks.

Though not nearly as dramatic, Asian currencies, too, have been hit with 6% to 10% declines against the dollar during the same time period.

Currencies guru John Taylor of FX Concepts nailed that prediction in July, when he told Bloomberg that the dollar was primed for a very strong rally against emerging markets currencies in the fall season.

Incidentally, Taylor also predicted in July that gold would reach $1,900 per ounce.  Then, he said, the yellow metal would crash to Faber’s most recent pessimistic call of approximately $1,000 mark before gold resumes its bull market ways.

However, for now, Faber suggests the bounce in gold may begin as early as Wednesday.  And, at that time, he may turn into a buyer again.

“Both equity markets and gold markets have become very oversold,” he said, “and I think a rebound is occurring.”

Unlike many analysts, who point to Greece as the catalyst for the sell off in every asset except U.S. Treasuries, Faber thinks heightened fears of a meaningful slowdown in China could be behind the global mass exodus out of assets associated with the Asia growth story.

China, he believes, has “overcapacities” in some areas of its economy, which were brought about, partially, by Beijing’s rapidly increased capital spending programs following the collapse of Lehman Brother on Sept. 15, 2008.

“Asian markets are weak, Asian currencies are weak and economically sensitive stocks are weak because there’s a more meaningful slowdown in China,” he said.

“You have a capital goods level where capital spending increases dramatically and companies keep spending to a high level, but because of the acceleration, it can lead to recession simply by the economy growing at a steady rate, and I think we are at this point in China.”

Though, Faber didn’t say so, specifically, during the CNBC interview, he may be looking to the industrial metals price action for clues to where gold, in the short term, would go from here.

Silver traders: Stop Cryin’ and Start Buyin’!

As another financial crisis comes to a head, another silver crash ensues.  Oh, the tears of sorrow!

Background:

Though there still exists economists, portfolio strategists and corporate CEOs who still don’t see or admit to seeing a double-dip coming to America [did you watch CNBC yesterday?], everyone’s favorite sleaze, George Soros, on September 21, told—that very same 24-hour propaganda doubly-sleaze outfit—CNBC, that the U.S. is in “a double dip already.”

Sometimes, Soros, too, tells the truth, as long as it aligns well with his fascist global-community agenda.

But if you’ve been listening to John Williams of shadowstats.com, you’d already know the fake recovery was just that, fake, and that the worse days for the U.S. are yet to come.

“As activity begins to turn down again, you are going to see things get even worse, and the continued economic trouble is going to be very long and very deep,” Williams told KWN on July 11.  “That puts the Fed in a circumstance where you virtually are assured of a quantitative easing three. That in turn will weaken the U.S. dollar further.”

But as we all know, Bernanke, instead of giving the market what it perceived it needed on Wednesday, crushed the dollar slide, instead.  No QE3!  Not today, anyway.  But Williams will most assuredly be proved correct after the fight from Republicans on Capitol Hill turns Captain Queeg ‘yellow stain’ as it did during Speaker Newt Gingrich’s 1995 noble fight to turn the money spigots off by shutting down the Treasury-Fed cabal.

At some point, the mob will beg for QE3!  Ask Gingrich, who went from Time’s Man of the Year to the bum who authored the ‘Contract ON America” —which leads us to today’s Fed puzzle.

“The markets apparently were hoping for a large, magic pill for an anemic economy that feels like it’s catching the flu,” Barton Biggs told Bloomberg News.  He’s now been quoted by the Washington Post as saying we may be “on the eve” of a financial crisis.

And Dr. Feelgood at the Fed can’t wait for his patient to beg for that shot, thereby garnering support in Washington and within his own ranks to play catch up in the race to minimize the impact of a crushing debt load plaguing the U.S. economy.

John Williams (as well as BU’s Laurence Kotlikoff) has worked the numbers and concludes that the federal budget is “beyond containment.”  The U.S., too, is standing inline for a Greek moment—a Minsky Moment—but that moment is temporarily frozen in time.

What Bernanke showed us Wednesday is that he is indeed very concerned about commodities prices forking the wrong way during that critical phase of a debt-based monetary system gone hopelessly broken, a phase that von Mises referred to as the ‘Crack-up Boom.’

Bernanke doesn’t want hyperinflation; he’s not stupid.  But he does want some inflation in the money supply (however it’s defined)!  “The Bernanke” just doesn’t want his helicopter money printing of U.S. dollars to become expected by market participants.  Admittedly, in hindsight, he had no choice but to punish the markets for even suggesting, at this time, for that whopper monetary shot.  Bernanke wants everyone on the same page begging for QE3.

The Bernank refers to inflation expectation incessantly in his testimonies, speeches and writings.  Believe it or not, The Bernank (and Greenspan, and every Fed chairman since Marriner Eccles (from whom we get the name of the politburo headquarters in Washington) has heard of von Mises and has read his brilliant works.

Austrian economics professor Ludwig von Mises (September 29, 1881 – October 10, 1973) stated that the Crack-up Boom we’re immersed in today can lead to two outcomes: deflation or hyperinflation.  Von Mises wrote:

“If once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities and services will not cease to rise, everybody becomes eager to buy as much as possible and to restrict his cash holding to a minimum size. For under these circumstances the regular costs incurred by holding cash are increased by the losses caused by the progressive fall in purchasing power. The advantages of holding cash must be paid for by sacrifices which are deemed unreasonably burdensome. This phenomenon was, in the great European inflations of the twenties, called flight into real goods (Flucht in die Sachwerte) or crack-up boom (Katastrophenhausse).”

Money supply dropped post 1929 crash, and the student of the Great Depression vowed to Milton Friedman that it won’t happen again.  Take Bernanke at his word.  That’s why he was chosen to head the Fed.

But there’s a catch to the money pumping, many, in fact, but most notably the expectations for the direction of consumer prices.  Are inflation expectations “firmly anchored”? as Bernanke likes to state.

And the best way to crush exceptions is to coordinate an attack, initially, on the Swiss franc and commodities complex, then the precious metals, then, everything connected to the inflation trade.  Bravo.  Well done.

Bless CNBC’s Bob Pisani, too, for his repetitive comments regarding traders “gaming the Fed” the week prior to the FOMC meeting.  He was right!  And Bernanke certainly was on board with that observation along with every hedge fund manager from Tokyo to Greenwich, Connecticut.  Even Greenwich’s has-been Barton Biggs ended up looking like a chump for making a call for a market bottom in August.

Well, it’s Revenge of the Nerds.  Isn’t it?  Cool hedge fund managers getting clocked by a bearded policy wonk.

So what is a fiat-money slave to do?: 

Well, has anything materially changed in the outlook for currencies debasement in the coming zillion years?  Read a little from BU’s Laurence Kotlikoff or subscribe to John Williams Shadowstats.com for an instant primer on the disaster that has been covered up by everyone who’s been benefiting from the cover up.

So, stop cryin’ and start loading up the basket of silver goodies left behind by those unfortunate, scared, stupid, impetuous, lazy, distracted or drugged out to know the tsunami will eventually move from the entire world back to U.S. shores.

And, by the way, if you happen to live in Brazil and were clever enough to hold gold (silver prices will be a commin’, too), gold hit a record high in Reals yesterday.  What?  No coverage on CNBC?  So, the inflation generated by, and led by, the gang of four at the Fed, ECB, BOE and BOJ has reached the ‘invincible’ Brazil.  A crushing 22% collapse in the Real since July 26 spells potential civil unrest from those lagging behind its approximate $10,000 PPP national average.

Watch for a potential Brazilian Real-like crash in the Malaysian Ringgit, Thai Baht, Philippines Peso, Indonesian Rupiah and other currency escape routes out of the U.S. Dollar.  The tide has gone out fully now, and the Bernanke knows it will eventually come back to the shores of the U.S.

MP Nigel Farage said it well; he told King World New’s Eric King, yesterday, “Yeah, we’ve had a setback, a little bit of a settling of the gold price after what was a meteoric rise.  I think the worst in the financial system is yet to come, a possible cataclysm and if that happens the gold price could go (higher) to a number that we simply cannot, at this moment, even imagine.  Gold is in an uptrend and professional traders should be buying the dips.”

Naturally, it’s dittos for buying silver.

Marc Faber: Gold “probably cheaper than when it was $300”

As the debate moves from how high the gold price can go to whether the precious metal has become too expensive at $1,830, Marc Faber, editor of the Gloom Boom Doom Report, said the ultimate world’s reserve currency is “dirt cheap.”

Speaking with Newsmax’s MoneyNews.com, the eclectic Swiss money manager, who has called Thailand his home for more than 20 years, believes the gold price should be put into a context of its relative value against rapid devaluations of the world’s primary reserve currencies—the U.S. dollar, euro, yen, and British pound—and, now, the Swiss franc, following the SNB decision last week to peg the franc to the declining euro.

“In fact, I could make an analysis to show that the price of gold today is probably cheaper than when it was $300 per ounce based on the increase in government debt, based on the increase in monetary base in the United States and based on the expansion of wealth in Asia,” Faber explained.

Spot gold reached a high of $1,923.70 per ounce on September 6, whose price has since pulled back to the $1,800-$1,850 trading range following the SNB announcement that the franc, de facto, will no longer become a refuge of the currency.

Nearly 18 months earlier on April 26, 2010, Faber told Newsmax he won’t give up his gold as long as the stewards of the U.S. dollar remain in power—as gold’s price in terms of dollars should increase commensurate with its rate of debasement, which, he said, has been at an alarmingly high rate since the collapse of Lehman Brothers in September 2008.

“I own my gold and I will never sell it, especially when I see clowns like Ben Bernanke, Larry Summers, Tim Geithner,” Faber had said.  At the time of that interview, gold closed at $1,151.10 on the COMEX, a 59% rise to today’s price of $1,830.

Today, Faber remains very cautious, recommending to his clients and followers to hedge bets on the outcome of what he calls a “failed Keynesian policy” among governments and central bankers worldwide.  On many previous interviews around the world, he has stated he speculates that U.S. equities have topped this year, emerging markets appear vulnerable to a shock, and U.S. bonds remain in a massive bubble that someday will “end badly.”

How badly?

On Feb. 27, 2011, Faber conducted an interview with Colorado-based precious metals dealer McAlvany Financial Group, and said, “I think we are all doomed. I think what will happen is that we are in the midst of a kind of a crack-up boom [a term coined by famed Austrian economist Ludwig von Mises] that is not sustainable, that eventually the economy will deteriorate, that there will be more money-printing, and then you have inflation, and a poor economy, an extreme form of stagflation, and, eventually, in that situation, countries go to war, and, as a whole, derivatives, the market, and everything will collapse, and like a computer when it crashes, you will have to reboot it.”

Gold Market hit by Chinese Bailout PSYOP; $2,000 Gold “in 45 days,” says James Turk

The latest dirty trick to save global markets from nature’s healthy forces of ejecting the garbage came, as they usually do, out of the blue during Monday’s afternoon session in NY from none only than the Financial Times (FT), who reported that unnamed sources told the London financial journal that meetings with Italian officialdom and Chinese “white knights” were scheduled to discuss Italy’s scrumptious debt deal.

Not too surprisingly, equity markets in NY, desperate for any sign of reprieve to the inevitable death of the euro in Europe, suddenly got strong bids, reversing the overnight 3%-4% toilet flush in stocks during the European session, and proving once again the Times’ loyalty to uphold the wilderness of mirrors for yet another day.

According to our friends at zerohedge.com, the outfit that’s kept score of the number of Chinese bailout rumors launched since the beginning of the EU crisis, stated, “ . . . this is at least the 4th time that China has ‘bailed out’ Europe in 2011. We give this latest rumor a 15 minute half life.”

In addition, Zerohedge cited a report from Reuters, a news outlet that had no trouble finding a source who may know a little something or two of Chinese intentions in the Italian bond market, quoted Italian Economy Minister Giulio Tremonti on August 4 about what the Chinese told him. “We don’t understand what Europe is,” Tremonti said.  “The second point is that they say ‘if your central bank doesn’t buy your bonds, why should we buy them?’”  Zerohedgers wonder if Tremonti, too, has plans to spend more time with his family.  There’s no word from the straight shooter of a scheduled trip to NY, either.

This latest, in a four-part PSYOP, called “Operation Beat the Chinese Dead Horse,” perpetrated against the people of freegold comes on the heels of another coordinated attack on the gold market following the extended Labor Day weekend—the day the Swiss National Bank announced it will begin pegging the Swiss franc to the dying euro.  Instead of gold adding to its record high off the day’s London trading, threatening to again take JP Morgan’s shorts to the cleaners, the precious metal sold off sharply into the awaiting hands of the now-value-conscious Chinese.

Where was FT on this obvious anomaly?  Not even anonymous sources at JP Morgan could be reached for comment about this strange reaction in the gold market to a very gold-bullish news story out of Switzerland.

Goldcore, however, had this to say of gold’s mysterious sell off on that day:

“Asian traders spoke of some 4,000 lots of gold being ‘dumped’ on the COMEX and of a ‘large sell order.’ This would suggest that the sellers may not have been profit motivated and official selling may have been involved.”  GATA is right again!

And Reuter’s reported the morning of the NY open, “expectations that other central banks may step in to intervene in the currency market” may have factored into the “restraint” seen in the gold trade in London and NY.

Back to Goldcore’s take on the post-Labor Day sell off: “Given the fact that global currency wars have intensified and will likely escalate in the coming weeks, we should be mindful of peculiar and volatile short term movements that give false signals.”

“Investors and store of wealth buyers should continue to buy the dip,” it said.

And the man who knows all too well of the sanctioned criminal enterprise’s tricks in the gold market, James Turk, of Goldmoney.com, told Eric King of King World News on Monday that he wouldn’t be surprised if gold resumes its march higher in spite of central bank intervention yesterday to reinforce the phony double top on the gold chart.

“Gold is headed over $2,000 and if it doesn’t happen this month, it will probably happen in October,” he said.

Turk, one of a handful of guys who got it right on the prediction for another summer-of-1982-like bull move in the yellow metal, added, “So look at shakeouts like we have had today as yet another great opportunity to get rid of overvalued dollars, euros, pounds, etc., and trade them in for physical gold. . . Unlike debtors of all sorts, whether individuals, companies or governments, gold does not default.  This is one of the main reasons to own physical gold as the world’s financial system unravels around us.”

Gold Price poised to “Go Parabolic” to $2,100

As the gold price touched $1,890 per the ounce in London trading today, persistent doubt of the consensus forecast for U.S. and Europe economic growth has weighed down equities, lifted bond prices, and soared gold, as traders scramble in and out of positions to suit renewed uncertainty and the growing distrust of the Fed as well as European and U.S. policymakers.

Adding to the stack of the most recent gold-bullish news, which has been streaming in nearly daily now, comes Hugo Chavez’s request for a repatriation of Venezuela’s gold reserves from the Bank of England.

CEO of Hinde Capital, Ben Davies, today told King World News he believes Chavez’s move to bring 365 tons of gold reserves back to Venezuela could result in an explosive move in the gold price, as data suggest that the gold market has operated equivalently to a banking fractional reserve system since 1971—and a highly levered fractional system, at that.

“There was a game changer event yesterday: Chavez – the proverbial thorn in the West’s side – ruined the gold-bears’ picnic, “ stated Davies.  “So what? I hear you say. Well I believe this is significant. Chavez holds 365.7 tonnes of gold overseas, mostly in Western Central Bank vaults, such as the Bank of England. Some 100 tonnes of Venezuelan gold is held there.”

“The question is: do these vaults still have all the gold?” Davies asked rhetorically, who now targets gold at $2,100 on this move.

In fact, the gold may not be there, according to Gold Anti-Trust Action Committee, who has published numerous articles showing the steep ratio between “paper” gold and the physical.  Davies said that the global gold market’s fractional reserve system “means each troy ounce has been lent or swapped out many times over, and should gold holders request the return of their gold en masse, we could get a proverbial ‘gold bank’ run.”

If Chavez’s move triggers a gold run, or not, it most certainly will spark at least some fear into those traders seeking an empty chair before the music stops in the gold market.  Force majeures at a time of panic to gold will leave wealth exposed to the threat of cliff-dive devaluations and bizarrely-priced physical gold ounce bars, a possible scenario that could turn rich people into poor ones, and vice versa.

Chavez appears nervous about the situation in the gold market, and may trigger other countries to repatriate their gold from Western entities, too, in another bullion bank run similar to the run on Ft. Knox in the early 1970s.

Even the U.S. dollar apologist of the gold market Dennis Gartman of the Gartman Letter is getting skittish about the possibility of a flashpoint in the currency markets.

“Gold is strong in any and all currency terms, and it is now entering that stage when prices go parabolic,” Gartman stated in his Gartman Letter.

Flight out of the U.S. dollar and euro won’t have many paths to left to safety, as banking officials of well-managed currencies fight back the stem of appreciation.  A recent survey among Swiss reveals a majority of respondents alarmed by the rise in the franc, and fear a string franc will devastate exports of Swiss-made goods.

“You have a look at some of the other safe-haven assets that investors were looking at, the Swiss franc and Japanese yen,” Fat Prophets resource analyst David Lennox told Bloomberg.  “Authorities there have taken steps to try and curb the rise in those particular currencies. That’s probably pushed more investors into gold.”

Gold Price entering Phase 3 of Bull Market: Jim Sinclair

$1,764.  That’s the demarcation price for gold’s move into the next phase of the bull market, the third and most exciting phase, characterized by widespread participation by the mainstream investor, according to Jim Sinclair.

As one of the world’s foremost “scholars” on the subject of gold and money, Sinclair believes the long-awaited awakening of the retail investor to the dollar endgame lies just ahead.

Phase 2 of the gold bull, he said, began at $524.90, and has now ended.

“$1764 has the same significance as $524.90 because it represents phase 3, the point when a runaway price market for gold would gain exponential properties,” stated Sinclair, on his Web site, JSMineset.com.

Anecdotal evidence of increased traffic at bullion dealers in the U.S. have been streaming in, as investors there already see the handwriting on the wall for the dollar, and want to front-run a replay of 1979.

Certainly, in Europe, the reports of periodic bank runs in Greece, Ireland, Spain and Italy (with the latter two through electronic withdrawals) have been well-reported since 2010, leaving Americans anxious for refuge as the back-end of the eye of the currency storm reaches the shores of the U.S.

So far, the assets of choice at this stage of the global financial crisis have been deep government paper markets, the Swiss franc, yen and gold, with most of the scared money presumably bypassing reasonable (and not so reasonable) facsimiles of money, and moving straight into gold.

“Some of the finest minds in gold anticipate a very short but brutal reaction in price,” added Sinclair. “The dollar market seems to not agree with a gold correction here.”

“Market wise, the Fed has thrown the U.S. dollar into the wind. Under .7400, the dollar denies a reaction in gold at these levels.”

Sinclair’s $1,764 marker for the price of gold is a key point in the bull market, he has repeatedly stated over the years.  That is the price where the most dramatic devaluation of the dollar begins, with a target north of $10,000 per ounce as a projected peak price for the metal, following the final months of the predictable mania period of phase 3—a phase much similar to the 100% move in the Nasdaq during the last six months of the tech bubble of 1999.  But, first, the fight for entry into phase 3 rages on before the real fun begins for holders of gold, according to Sinclair.

“Because $1,764 is such a significant number, you can expect one of the more serious price battles before the price departs to Alf Fields’ and Armstrong’s predictions,” he stated, referring to five-digit projections for the gold price from fellow hard-money advocates, Alf Fields and Martin Armstrong.

With price targets above $10,000, $1,764 gold is a screaming buy, according to the JSMineset think tank.

“To sum up the situation, you haven’t seen anything yet,” exclaimed Sinclair.

3 Gold Stocks to Watch

Goldcorp Inc. (NYSE: GG)

 

SPDR Gold Trust (NYSE: GLD)

Yamana Gold Inc. (NYSE: AUY)

 

 

 

Where to now for Gold? Peter Schiff, James Turk and Richard Russell weigh in

The three men most well-known to the broader investment community seeking a fair shake and honesty from the financial industry, Peter Schiff, James Turk and Richard Russell, all have recently gone on the record as raging bulls on the gold price in the coming weeks and months.

Each man has his unique style of communicating the fundamentals underlying the move in the precious metals; the widely misunderstood concepts regarding money, in general; and why it’s vital to act now to protect wealth from monetary events expected to materialize one way, or the other—with both outcomes varying in degree of tragedy.

Either politicians and monetary authorities will standby idle and let nature takes its course regarding irreparable insolvencies of governments and many of the largest financial institutions, globally, or they will attempt to fix only the symptoms of a malaise that cannot be ultimately fixed without profound consequences, which are inevitable anyway, but will take on a different guise.

All told, both outcomes point to gold as a no-brainer asset of choice during the widespread and profound awakening coming soon, globally, and will most likely avail is itself in earnest some time by New Year.

Starting with the man with the most stamina and passion for waking up the mainstream investor: Peter Schiff of Euro Pacific Capital.  Schiff possesses the business sense to promote almost any investment, making a living while guiding his clients through both calm waters and avoiding tidal waves.  A win-win situation for him and his clients.

“ . . . gold is going to go higher because people want refuge, Schiff told King World News, yesterday.  “In fact the other safe havens in the currency world, like the Swiss franc or the yen, the central banks there are trying to undermine their currencies.”

Investors thinking that they can avoid the decision to acquire the politically incorrect asset, gold, by buying Swiss francs, instead, will ultimately be disappointed, according to Schiff.  A very strong currency can be almost as troubling to portions of an economy than a weak one is other part of the economy.

Both Japan and Switzerland have taken measures to halt the rapid appreciation in its currencies against the two major reserve currencies of the U.S. dollar and euro.

“I mean the Swiss are actually thinking about pegging their currency to the euro,” Schiff continued.  “One of the reasons people were buying the Swiss Franc was to get out of the euro.  Now they are threatening to turn the Swiss Franc into the euro.  So what’s the one asset that central banks can’t print?  That’s gold and so gold is the last man standing and everybody is going to be piling into it.”

Next, James Turk of goldmoney.com, the man who is presumably closest to the bullion market than either Peter Schiff or Richard Russell given his experiences of running a bullion storage business on a day-to-day basis.  Turk has been as accurate with his short-term predictions as one can with the information, deep knowledge and vast experience he possesses.

“Gold has been rising against all national currencies, and that’s significant,” Turk told IB Times, Monday.  “Politicians and central bankers are making decisions that debase national currencies, and the resulting bad monetary policies they are following are causing the gold price to rise.”

Turk continued, “When there are problems with a national currency … (investors) begin to worry about the value of their money, whether they’re going to lose purchasing power because of inflation or other problems. As a consequence, they look for safe havens.”

And last, but certainly not least, Richard Russell, the publisher and editor of Dow Theory Letters, has been successfully guiding subscribers of his investor newsletter for more than 50 years.  The 87-year-old survivor of the Great Depression, WWII, and many recessions as well as a few inflationary scares told his readers to hunker down like no other time of the past 65 years.

“ . . probably 90 percent of living Americans have never seen or lived through what I call really ‘hard times,’” Russell noted in his newsletter last week, implying that many investors suffer from a term floating around recently, a normalcy bias.

“When chaos reigns, people look for certainty,” he continued.  “When all is lost, only one item stands supreme and has been supreme for thousands of years. That item is gold.”

And if it wasn’t for Russell’s stellar reputation as a man of rigorous reason and steady hands, the notion of the gold price reaching the cost of a used Ford sedan at the end of the bull market in the world’s safest of safe havens would appear to most unfamiliar with the true meaning of money as ridiculous.

“At 2,000 [gold price], the next objective would be 2,500, and from there, 5,000, and from 5,000 – 10,000.  As gold marches higher, it’s playing the death knell for fiat money. And every central banker knows it.”

That statement, coming from the Godfather of financial newsletter, is not to be taken for the purpose of entertainment.

Gold Short Squeeze is ON

In a dramatic change of events from decades-long control of the gold market by the gold cartel, led by JP Morgan (NYSE: JPM) and HSBC  Holdings (NYSE: HBC), the cartel shorts took a bloodbath in the overnight trade after Monday’s close in New York.

The long awaited short squeeze is ON in the gold market.

“Well, what’s happened with the shorts that were in there is they were absolutely crushed on that overnight rise on Monday,” said King World News’ (KWN) anonymous London trader in a Tuesday interview with Eric King.

Anonymous added, “These guys in London woke up with their asses handed to them and I don’t think some of these guys will ever be short again, if they are still in business.  So some of these perennial shorts that have always joined in the party got screwed, I mean literally lost everything.”

After the Fed announced Tuesday afternoon it would extend its ZIRP through mid-2013, the 2 and 3-year Treasury notes soared, while the Swiss franc jumped 400 points against the dollar in a matter of minutes.  And gold, it sold off $50 after short covering in the pits took the metal to a new record price of $1,782.50.

But in New York trading this morning, gold trades at less than $5 from its all-time high.

Earlier, on February 10, Goldmoney’s James Turk told KWN he was watching the gold futures chain closely for signs of a breakdown in the dollar.

As of the close Tuesday in New York, the gold futures chain now look like the silver futures chain, all but completely inverted, a sign that Turk’s backwardation scenario in gold could be near.

“It will be interesting to see whether the backwardation in silver will lead to a backwardation of gold,” said Turk.  “If it does, the end game for the U.S. dollar is near.”

Last month, Turk had warned investors that this summer was shaping up to look like the summer of 1982, the time when the Mexican government devalued the peso, creating a 50% firestorm rally in the gold market.

Back to KWN’s anonymous London trader, who said Tuesday some gold shorts won’t be playing in the pits anymore, and predicted a possibility of the yellow metal achieving the $1,800 print soon.

“Gold just gapped up and didn’t come back and these guys were heavily short,” the anonymous London trader said.  “I believe there is still enough momentum to push gold into the $1,800’s.”

“I fully expect to have $2 moves in silver and $50 moves in gold as absolutely normal at this point.”

Another new normal.

Peter Schiff on Gold and Treasury Downgrade

For those of you who have followed Peter Schiff through the years, you already know of his long-term prediction for U.S. Treasuries to eventually reach “junk” status.  Friday’s Standard and Poor’s downgrade of U.S. Treasuries to AA+ (with a negative outlook) from AAA was the first step in what could be a successive chain of downgrading events to come for U.S. debt from the credit rating agencies.

As Treasury Secretary Tim Geither jumps up and down at the injustice of S&P’s downgrade, the Wall Street Journal chimes in with its propaganda piece entitled, U.S. Debt Remains ‘Gold Standard’ to do its part in the Soviet-style disinformation campaign perpetrated to prolong the 40-year fraud of the U.S. dollar.

Euro Pacific Capital CEO Schiff, on the other hand, just tells it like it is—an apparent genetic characteristic inherited from his father, Irwin Schiff, a prominent figure in the protest of the U.S. tax code and author of The Biggest Con: How the Government is Fleecing You.

“The dollar used to be the safe haven, Treasuries used to be the safe haven, well if you are downgrading U.S. Treasuries, obviously they are not the safe haven anymore,” Schiff told King World News (KWN).

“For those people who believed foolishly that Treasuries were the safe haven, S&P is finally saying they’re not,” he continued.  “In fact they (Treasuries) are on negative watch for a reason.  I think S&P is going to downgrade again … by then, I’m sure Moody’s and Fitch will have also downgraded U.S. Treasuries.”

As equities markets in Asia, Europe and the U.S. plunge in anticipation and eventual announcement of the unprecedented downgrade of U.S. Treasury debt (post Civil War), further ratings downgrades across the debt markets will follow, as in municipal and corporate debt, according to Reuters Insider, which stated on Monday, “Announcements should be expected this morning about effects to corporations from S&P’s downgrade of U.S. credit rating, David Beers, head of S&P’s sovereign ratings.”

The street-smart Schiff also pegged Moody’s for not coming clean on its outlook for U.S. Treasuries, knowing that the kept team-player Warren Buffett holds a significant share of Moody’s through his Berkshire Hathaway fund, and was probably the biggest beneficiary on the planet of Uncle Sam’s largesse in the rescue of AIG during the meltdown of March 2009.  How could Buffett then downgrade U.S. debt after thanking Uncle for his assistance in a New York Times Op-Ed piece?

“Well he [Buffett] owns a big chunk of Moody’s, doesn’t he?” Schiff asked rhetorically.  “Moody’s hasn’t lowered their [U.S. Treasuries] rating, so somebody is mistaken, it’s either Moody’s or S&P.  It stands to reason that Buffett would say his competitor was mistaken rather than himself.”

In contrast to legendary commodities trader, Jim Rogers—who doesn’t bother following the very same rating agencies who failed to warn of an impeding debt collapse in 2008—the significance of S&P’s downgrade, as well as the abstention to follow suit from the other two rating agencies, Moody’s and Fitch, shouldn’t be understated, according to Schiff.  He believes Moody’s and Fitch have given politicians a debating point to continue debasing the dollar.

“I think that this is a real wake up call, this is kind of an ‘Emperor has no clothes’ moment,” said Schiff.  “If we get downgraded and interest rates don’t spike up, that’s just going to embolden our politicians to say, ‘Hey, It doesn’t matter what our credit rating is.  Let’s just run up the debt even more because we can borrow just as cheaply with a AA+ as we can with AAA.  Hey, why not really go for broke?’”

Smart investors, however, have been buying gold and selling stocks for many years now, as they knew this day would come—and will repeat, a la Greece, not withstanding Treasury Secretary Geithner’s firm conviction only weeks ago that there was “no risk” of a U.S. downgrade.

And as gold prints new highs above $1,700 in the wake of the calamity of sovereign debt woes from both sides of the Atlantic, how can the WSJ’s headline, U.S. Debt Remains ‘Gold Standard’, make any sense when U.S. Treasuries are denominated in U.S. dollars?

Ah, lest we forget: Fed Chairman testified to Congress that gold is not money, though the U.S. Treasury claims to hold 8,130 tons of the yellow metal for reasons of tradition.