James Turk on Gold: Getting Close to the Endgame

James Turk increasingly sees the tell-tale signs of the endgame for the U.S. dollar rapidly emerging right before his eyes.  Ergo, a move in gold that will “light people’s hair on fire,” as the Nostradamus of the gold market, Jim Sinclair, has predicted, moves ever closer to reality.

“What we are seeing today is just like we saw in the 1970s when hot money was flying around the world from place to place,” Turk told King World News on Monday.  “Despite the fact that the Federal Reserve is buying long-term paper, interest rates are still rising.”

And rising rates on the long end of the curve, not only have demonstrated the dangers of levering up the Fed’s balance sheet but extending its average maturity (one of the many problems with Greek sovereign debt), it’s extraordinarily costly to the Fed and those who’ve made a living front-running the Fed, a la PIMCO’s Bill Gross, who, by the way, just released his crocodile tears mea culpa address to investors on Friday.  It appears the insiders at Gross and Co. have had a bad year.

“So the high in government [Treasuries] prices is probably behind us,” Turk speculated.  “This will eventually [lead] to questions about the Federal Reserve’s solvency.  The Fed has a lot of low-yielding paper and as interest rates rise, the price of that paper will fall.”

It appears that while Turk’s legion of tin-foil hat wearers have so far weathered this year the most vicious turmoil in currencies, sovereign debt and stocks since the 2008-2009 meltdown, Bill Gross has been busy taking a bullet for the Fed (Buffett, too, from his purchase of BofA ahead of the most dreadful earnings releases for the banks in recent memory) at the expense of his shareholders.

What?  Bill Gross?  Sounds like another tin-foil conspiracy theory.

Consider the real threat of a military invasion of any OPEC nation that threatens to bypass the U.S. dollar in oil transactions.  Collectively, OPEC holds approximately 30 percent less Treasuries than the potential holdings of PIMCO’s $1 trillion.  It’s a far-reaching conclusion to support a case that Gross has not been touched by someone at the NY Fed—and at a most critical time when ‘Operation Twist’ needed a little help beyond the initial reaction to the news of its deployment.

That’s a sign of desperation, or fear, at the Fed.  As the founder of bullion storage company Goldmoney reviews his proprietary model, called the ‘Fear Index,’ Turk has not backed off from his earlier prediction of $2,000 by November 1.  But from the looks of things, gold may not reach Turk’s $2,000 target with only 10 trading days left for October, but given his widely-followed track record, reaching as far back to the year 2000, Turk can only be faulted for his intermittent flubs in the precise timing of his calls.

That precision, of course, only proves that Turk is not included in the loop of cc’ed memos following ad hoc conference call pow-wows held by Bernanke, Geithner, JP Morgan and CFTC cabal.

Besides, a review of Turk’s record for timing major moves reveals miscalculations of only mere weeks, for the most part, but more importantly and typical of Turk, it shows his willingness to stick his neck out for investors time and time again—unlike the endless lame calls made by big Wall Street firms that issue target prices 5% from present levels and on a time horizon that nearly assures a correct call.

Turk continued, “It won’t take a big jump in interest rates to cause people to question the Federal Reserve solvency, especially given the poor quality of the assets on the Fed’s books from the bailouts it has engineered.  This is all part of the the overall trend of increasing fear as part of my ‘Fear Index.’”

And that’s where the dollar dominoes are mostly likely to fall first.  In line with Turk’s belief that a dollar collapse will show up first in the U.S. Treasury market, Donald Coxe, former Global Portfolio Strategist for BMO Capital Markets (the firm of the iconic CEO Jeremy Grantham) told listeners of Financial Sense Newshour that the dollar’s Achilles heal can be gleaned from the stresses on the Fed’s balance sheet and from the participation (or lack, thereof) at Treasury market auctions.

Keeping a careful eye on the amount of direct bid take-downs by the Fed’s primary dealers in relation to the indirects (mostly central banks and the likes of PIMCO) may provide investors a heads up to the stress the Bernanke Fed feels.  Zerohedge.com does a good job keeping investors apprised of the capital flows at the Fed’s custodial accounts.

As the Fed stresses, gold moves higher.

“What we are seeing in the metals right now is the quiet before the storm, Eric,” said Turk. “These are excellent times to be accumulating gold and silver on the dips because longer-term you are going to see price levels for the metals that today would be considered unimaginable.  This is how secular bull markets work and this one won’t be any different.  It will end in a mania that will, ‘Light people’s hair on fire,’ as Jim Sinclair is fond of saying.”

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.

Here we go again! Turk vs. Faber on the Outlook for Gold

Two heavy weights of the hard-money camp, James Turk and Marc Faber, once again disagree on the short-term outlook for the gold price.

For those new to the competition in the Fight-to-be-Right, Goldmoney’s James Turk of Team Sinclair-Turk won the first bout against Faber in its predictions for the gold price during the summer months of July and August.

Back in June, Team Sinclair-Turk told its respective readers to expect an uncharacteristic boom in the gold price during the seasonally slowest time period of the year, July and August, while the Gloom Boom Doom Report’s Faber said he expected the price to follow the 30-year historical bias to the downside in the metal.

As we now know, Sinclair-Turk won hands down, as the gold price soared nearly 25% in the face of expected marginal declines—a truly bold call by Sinclair and Turk, who both stood out from the pen of gold bulls reticent of taking one side or the other.

So here we go again.  On September 12, Goldmoney’s Turk told KWN’s Eric King that gold’s short-term outlook is for still higher prices—technically overbought conditioned be damned—targeting $2,000 as the next stop for gold by the end of October—which, once again, defies historical data that suggest October is the month when gold typically sells off pretty meaningfully from September’s typical strong rally post Labor Day weekend.

“I was expecting closer to 50% [rally from July 1 $1,480 low] by the end of September; and even though we are not at the end of the month and may not reach that 50%, there is a lot more left in this move,” Turk told KWN.  “Gold is headed over $2,000 and if it doesn’t happen this month, it will probably happen in October.”

On the other side of the ring, gold bulls’ favorite pony-tailed Swiss eccentric money manger (who’s lived in Chiang Mai Thailand for the past 20+ years), Faber, of the Gloom Boom Doom Report, told an audience in Mumbai last week he believes the gold price is “extremely overbought” today and wouldn’t be surprised if the yellow metal drops to the $1,500 to $1,600 before resuming its secular bull market rally.

As followers of Faber already know, he’ll “never sell” his gold, but doesn’t recommend adding to a position above the $1,800 level.  Though Faber doesn’t make an outright call for the metal in the short term, Faber apparently doesn’t like the looks of the gold chart in the face of another seasonally weak period coming up for the month of October and believes market volatility could prompt some selling in the metal as a means of raise cash to settle hedge fund redemptions.

“I am not selling any gold but traders should realize the gold price is extremely overbought,” India-based Business Standard reported Faber saying at a Mumbai conference, “and that it could easily drop toward the 200-day moving average – that is, between $1,500 and $1,600 (not a prediction).”

So there you have it, two informed and studied men take diametrically opposed positions on the short-term outlook for the gold price.  Once again, Turk has thrown away the seasonal charts and has come out with another scary call for a $2,000 gold price “in 45 days,” as we moving into the most dangerous time of the year for the stock market—the seasonally lowest period for money inflows into stocks.

Will hedge funds need to raise cash (from their profitable gold positions) if the Fed disappoints at the close of its FOMC meeting on Wednesday?  What if the German parliament rejects funding of the EFSF after its scheduled vote on September 29?  What if Greece doesn’t get its second tranche from the IMF?  What if Berlusconi opens his mouth again?

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 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.

Gold Shorts to soar Gold Price, says James Turk

After a slew of positive gold news of the past two weeks, James Turk weighed in on his latest thoughts with King World News (KWN) yesterday, and reiterated his forecast for a golden summer rally led by the unrelenting Asian buyers.

“It is very important that demand in Asia for physical metal has reappeared,” said Turk in the KWN interview.  “I continue to be amazed how the Asian buying adjust so quickly to the rising gold price.”

As the never-ending crisis in Europe, and now, the U.S., dominate mainstream news, more and more nervous investors waiting for cheaper gold prices find the strain of watching gold slip away to new record highs in all major currencies increasingly too much to bear.

“Clearly people are worried about the train leaving the station without them, so demand for physical metal adjusts quickly to the reality of higher prices,” Turk told KWN.  “After all, what would you rather own – gold or the dollar?”  Or the euro?

The effects of QE2 have already slammed the purchasing power of the Chinese, Vietnamese, Indians, Koreans, Thais, as well as most of the rest of Southeast Asia.  And as the shockingly poor data on U.S. jobs, GDP, manufacturing, housing, personal income, consumer sentiment and stubbornly high food and energy costs, show no signs of turning around, Asia investors fear yet another round of money printing by the Fed will send another inflation shock wave their way, knowing, too, that the full effects of QE2 have yet to come.

International bullion dealer, GoldCore, recently wrote, “South Korea’s central bank bought 25 tonnes of gold over the past two months . . . a 17 fold increase in their gold reserves. . . . Thailand’s gold reserves rose by 15.5% in the two months and rose to about 4.07 million ounces in June, from about 3.523 million ounces in May, according to figures on the Bank of Thailand’s Web site.”

All of that sudden buying out of Asia, on top of the already rapidly increasing rates of gold purchases from China and India, has the gold shorts (commercials) on the ropes, according to Turk.

“You have to remember, Eric, that the commercials have a massive short position in gold that is severely underwater,” he said.  “What the commercials try to do is trade for short-term gains while the longer-term positions go against them as gold climbs relentlessly higher.  They have this done for over 10 years, so this is nothing new to them.  What they (the commercials) fear is the strong physical buying coming out of Asia because they are powerless to fight that tidal wave.”

Today’s Silver Price Critical, says James Turk

With silver hanging ruggedly firm above the $40 battlefield, the naked silver short cartel could completely lose control this time, James Turk told King World News  (KWN).  But today is a critical day, as the cartel typically throws everything they’ve got at the paper market before the August options expiration of July 26.

The result of that expected struggle will be telling, he said.

“The fact that we are breaking through $40 [for silver], which has provided overhead resistance for so long, is a clear sign that the shorts are losing control,” Turk told Eric King of KWN.  “The upper hand is shifting to the buyers of physical silver.”

Coincidentally, signs of another break from the correlated moves up and down in the Dow and the precious metals market are evident in the Dow-to-gold ratio, which has been teetering on collapsing below the 7.8 mark this week.  If broken, as it was in the panic month of March 2009, the precious metals could attract buyers of the metals this time around and trigger another short squeeze, especially in the razor-thin silver market.  In 2009, the rush to liquidity took the gold price down.  Today, the problem in the global financial system is solvency—not liquidity.

“My near-term target is still something in the mid $40s, but if gold starts moving higher, as I expect, silver will be testing that $50 level by next month,” said Turk, who has warned of that scenario nearing reality all year.  “That is going to spoil the summer vacations of many of the silver shorts who will be left shocked and in disbelief as they buy hand over fist to limit their losses.”

Several bullion experts have expressed disbelief that the Commitment of Traders report (COT) indicates subdued bullish sentiment in silver under the circumstances in Europe and the U.S.  It appears that possibly the large speculators (specs) have mistaken the summer of 2011 as any other summer of the past 29 years, according to Turk, and may not fully appreciate why this summer could be one for the record books.

“I’m surprised by all of the bearish sentiment, particularly in view of the fact that both metals look ready to rocket higher,” Turk continued in the interview.  “The summer is just getting started and this is already looking more and more like the summer of 1982 when gold was up 50% in three and a half months.”

The continuing crisis in Europe and renewed weakness in the U.S. dollar against the commodities producing nations of Australia and Canada, as well as the record print against the Swiss franc, could indicate the dollar’s morphing status from safe haven to one of just another currency in line for trouble after the euro and sterling.  With the euro under threat of unraveling, the dollar, remarkably, still trades at near 1.44 against the dollar, or only $0.16 off its all-time high before the crisis began.  At this time last year, the dollar traded at near parity, and has lost approximately 25% against the Swiss franc within those 12 months.

Is the Swiss franc’s strength foreshadowing the summer rally in the metals?  Today’s silver price action could give traders a clue as to the possibility of such a rally.  If the price of silver can struggle to trade above $40 amid the expected cartel onslaught, Turk could be spot on with his analysis of a breakout and test of the $50 mark.

“So tomorrow [July 26] is shaping up to be an interesting battle between the option sellers and the physical buyers,” he said.

Spectacular Short-squeeze in Silver Price coming, says James Turk

Our friends at King World News recently posted two interviews from two blue-chip sources, who report the possibility of an imminent and massive short covering by the government-supported cartel in the gold and silver markets.

As the premiere Web site for breaking interviews from the best informed in the gold and silver market, Eric King’s King World News (KWN) has been atop the drama and inside ball in the metals as it breaks.

James Turk, a frequent guest of KWN, as well as the founder and president of Goldmoney, got word (confirmed by the KWN’s anonymous London trader) of a massive short squeeze potential developing.  If gold and silver were to achieve prices north of $1,600 and $40, respectively, and hold above these benchmarks for a day, or two, many of the oversized number of short contracts will have to cover to cut losses from the adverse move higher—a move, said Turk, that could rival the monster rally of August through April.

“I wouldn’t be surprised to see $2,000 (gold) very quickly,” Turk speculated  in his KWN interview.  “It’s just a question of how the European bank crisis unfolds or the U.S. debt limit unfolds or any one of these number of trouble spots around the world unfolds. Any one of those could light a fire under the gold market and you could see $2,000 very, very quickly.  You could also see silver over $50 very quickly.”

Brief panic set in the Italian 10-year note at the close of trading in Asia today, which culminated in a sell off in the 10-year to above a 6% yield.  Last time Italy’s 10-year reached the 6% handle, an emergency gathering of Italy’s upper legislative body was assembled to vote on Finance Minister Giulio Tremonti’s austerity package to ward off a Greece-like run on its sovereign debt.  The passage of Tremonti’s plan occurred last week, briefly triggering a rally in the 10-year.

But here we are again at the precipice of another sovereign debt collapse, in no less than a week’s time from the last threat.  As the EU fights the bond vigilantes of Italian debt, the gold price correlated strongly with the yield on the 10-year following the NY close.

As the 10-year punched through 6%, gold and silver surged to intraday highs of 1,609.92 and $40.85, respectively.  But as buyers (central banks?) aggressively bought the notes above 6%, the yield fell back to 5.72%, taking down gold and silver to the $1,600 and $40.15 levels, respectively.

All of that comes on top of a PM market already tight from the escalating buying since the aftermath of the March 2009 meltdown.

“Because the market is so tight still, any kind of huge buying of physical metal is going to send these prices much higher,” added Turk.  “Then if you add in what the London Trader is talking about, short-covering coming in, it’s got the potential for an upside explosion.”

And to add another pinch of drama to the ongoing bullish story for silver, Reuters reported Monday the Hong Kong Mercantile Exchange is set to launch a silver futures contract on Friday, in the hopes of tapping into the “growing demand for the metal in China.”

The contracts will trade in lots of 1,000 ounces, as apposed to the 5,000-ounce contracts traded on the Chicago Mercantile Exchange.

Eclipsing a 17% increase in global demand for silver, China’s 67% rise in demand for the gray metal will enable Chinese investors an additional market to trade 2011′s hottest metal without falling prey to rapid-fire CME margin hikes and other maneuvers to protect the JP Morgan-HSBC price suppression scheme.

“The new contract will enable buyers and sellers in China to trade effectively with their counterparts across the world, while at the same time, allowing investors to gain exposure to silver price movements and broaden their investment portfolio,” said HKMEx president Albert Helmig in a statement.

Some analyst say the HKME is another nail in the coffin of the Anglo-American monopoly of the silver market, and that the HKME’s extended hours session will pose an additional problem for the manipulators of the silver price at customary 10 a.m. attack.

Though, typically a seasonally slow period for the precious metals market, this summer has been anything but slow.  Turk believes a perfect storm is on the horizon, and expects moves in gold and silver to rival the 1982 blastoff in the metals during the Mexican debt crisis.  Gold soared approximately 50% during that summer.

And if the previous 177% run in silver during the 25%  rally in gold between August and late April is any indication of things to come for silver, a blow up of the shorts could trigger another breathtaking rally in silver.  A similar move to the last silver rally calculates to $100 silver.

“People are looking for the safety of gold and exiting national currencies,” Turk said. “Exiting the dollar, exiting the euro, exiting the British pound, gold is at record highs against all three of those currencies.”

“It’s all very positive Eric, it’s still within my bigger point of view that the summer is going to be spectacular.”

Lehman-like Meltdown Looms Large

Greece may be a small European nation with small financial problems when compared to a backdrop of a quadrillion dollars of accumulated global debt (according to the Bank of International Settlements), but Greece has also become the litmus test for the resolve of political leaders to fix the problem with the euro and its dependent counter-parties worldwide.

As the pressure from the IMF on the Greek president intensifies while the crowds on the streets of Athens grow in size and violence, traders have been monitoring sovereign debt interest rates for signs of contagion amid the crisis in Greece.

Signs have appeared in the European bond market, whereas the yields on Greek, Irish and Portuguese 10-year sovereign debt have all surpassed the 10% print, with all three moving higher every week to levels which are now higher than the lofty rates of March 2010 when the Greek crisis emerged in earnest.

What everyone seems to fear is another Lehman-like meltdown.  And for good reasons, too.  But this time crisis could be much worse.  A major financial institution failing is one thing.  It’s together another story if the ones doing the bailing out need bailing out.  And as the crisis deepens, the loan amounts grow while the number of pockets left to guarantee the additional debt grows smaller and smaller.

Germany and France are financial backbones of the EU, and both countries’ politicians feel pressure from those determined to keep the euro together as well as from constituents who want nothing to do with bailing out “lazy” Greeks.

Asked if the markets need to fear a Greek debt default, Belgian finance minister Didier Reynders told Belgium’s RTL Radio, “We can indeed fear it because that’s what we experienced in 2008.”

“Remember — the collapse of an American bank, Lehman Brothers, Reynders continued.  “Everyone said ‘OK, a bank’s gone under.’ But that triggered a collapse in confidence right through the financial sector and banks could no longer borrow money amongst themselves. And we saw what that meant.”

Reynders warned of a repeat of another contagion if Greece, the EU, and the IMF cannot come to a deal on tranche number two of the original Greek debt restructuring agreement reached last year—which Greece had failed to achieve key financial metrics stipulated within the initial terms for a second tranche.

“If we turn our backs on Greece, it won’t be able to repay its debts to banks and therefore savers in our country (and savers, globally),” he said.  “The domino effect will begin and there will be consequences in Ireland, in Portugal and perhaps even here (in Belgium).

A collapse of Greece and the contagion that is sure to follow could happen “tomorrow,” bullion expert Jim Sinclair told Eric King of King World News.

“It’s just that bad . . . this thing can blow at any time,” Sinclair continued.  “Wiemar Republic had no more problems than we have right now.”

The saga in Europe continues next week as German Chancellor Angela Merkel and French President Nicolas Sarkozy meet today before they head off to an EU summit scheduled for next week.  Merkel wants one-third of the bailout package to come from banks, while Sarkozy’s French banks seeks a resolution as well after downgrades of French banks were issued by credit rating agencies this week.