Editor’s note: Mark Leibovit is one of the investment world’s top-rated gold timers, and helps investors anticipate and benefit from both the ups and the downs of the precious metals markets with his Leibovit VR Gold Letter (available to WND readers at a huge discount).
The bankers’ war on cash
When JPMorgan Chase recently informed customers that the bank will no longer allow cash to be stored in safety deposit boxes, it capped off a frightening trend in banker restrictions on cash usage and storage internationally:
- Citi’s Willem Buiter recently advocated abolishing cash altogether in order to “solve the world’s central banks’ problem with negative interest rates.”
- Chase instituted a new policy which “restricts borrowers from using cash to make payments on credit cards, mortgages, equity lines, and auto loans.”
- The Justice Department has ordered bank employees to consider calling the police on customers who withdraw $5,000 or more.
- HSBC is now interrogating its account holders in the UK on how they earn and spend their money as well as restricting cash withdrawals for customers.
- Banks in the U.S. are making it harder for customers to withdraw and deposit cash, with Chase imposing new capital controls that mandate identification for cash deposits and ban cash being deposited into another person’s account.
- Chase banned international wire transfers while restricting cash activity for business customers (both deposits and withdrawals).
- The French government announced it will restrict French citizens from making cash payments over €1,000.
From Kitco News:
Wall Street, Main Street see higher gold prices this week
Although gold appears to be ending its second consecutive week in negative territory, both Main Street and Wall Street are expecting to see higher prices as a new month of trading kicks off.
However, according to the results of the Kitco Weekly Wall Street vs Main Street Gold Survey, market professionals have a stronger upward bias. This week, out of 33 market experts contacted, 20 responded; of those, 13 participants, or 65 percent, see higher prices, three experts, or 15 percent, see lower prices and four, or 20 percent, are neutral on the gold market. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
The results of the online survey showed a slightly narrower vote. In total 515 people voted; of those, 230 participants, or 45 percent, expect to see higher gold prices next week, 186 people, or 37 percent, expect to see lower prices and 96, or 19 percent, are neutral.
Looking at the results of the previous week, Main Street once again has come out on top as the online survey correctly predicted that prices would be lower. In the previous survey 46 percent were bearish on gold, while most market professionals expected to see higher prices. Main Street has correctly predicted gold’s short-term price action four out of the last six weeks.
Although most Kitco readers appear bullish on gold price next week, some aren’t convinced. Yash, from India, said that he is negative on gold prices as the risk of Greece defaulting on its debt payments falls and on improving U.S. economic data.
Other analysts said they are also expecting a short-term correction in the U.S. dollar should help boost gold prices higher next week.
Could South Africa’s gold mining industry be gone by 2020?
The South African mining industry is in trouble. That is not in question. The only debatable point is exactly how much trouble it is in.
The industry on which this country’s modern economy was built has been stuttering since the global financial crisis. What investors and anyone else with an interest in mining’s role in the economy wants to know is, where this is headed.
Are we nearing a point where we will start to see a turnaround? Or is there a chance that things will simply continue to deteriorate?
Speaking at the JSE’s Power Hour in Cape Town, Peter Major, mining specialist at Cadiz Corporate Solutions, warned that one must be wary of thinking that things will always revert to an historically established mean. The mining environment in South Africa has changed so much over the last few decades that “the old rules no longer apply.” …
From Jesse’s Crossroads Café:
Currency wars, gold pools, and Comex potential claims per deliverable ounce
An excellent overview of the worldwide great game in gold, outlining what is known and the possibilities for what is unknown, was posted today at Jesse’s Crossroads Cafe. Jesse reviews why big money never puts the gold futures markets into the short squeeze to which they are so plainly vulnerable. He also identifies the political and economic factions around the world that likely have an interest in the gold market.
From U.S. Con News:
U.S. Mint ends rationing of silver eagles – but for how long?
Coin News reports that the U.S. Mint has ended its rationing of U.S. silver eagle coins. It’s not clear whether the end of rationing is intended to be permanent or if rationing might be reinstated along with reductions and even suspension of production if demand increases enough.
From the Wall Street Journal:
Forex’s ‘last look’ practice gets curbed
Two of the world’s biggest currency-trading platforms plan to restrict a controversial industry practice in which banks can pull out of trades at the last moment if the market moves against them.
Thomson Reuters Corp. and BATS Global Markets Inc. will limit the practice, known as “last look,” on their platforms in coming weeks in a move aimed at increasing transparency in the foreign-exchange market.
The change comes amid a broader shake-up of the trading industry prompted by concerns about traders’ efforts to manipulate a range of financial markets. Markets for precious metals, interest rates, stocks, and currencies have all come under scrutiny from regulators in recent years because of allegations of inappropriate behavior. …
Russia acquires gold as defense against ‘political risks,’ central banker explains
Russia is increasing its gold holdings because gold is a reserve asset free from legal and political risks, a senior central banker said on Tuesday. The comments by Dmitry Tulin, who manages monetary policy at the central bank, reflect Russian fears that the country’s overseas assets could be frozen as part of a possible toughening of Western sanctions over the Ukraine crisis.
“As you know we are increasing our gold holdings, although this comes with market risks,” Tulin told lawmakers in the lower house of parliament. “The price of it swings, but it is a 100-percent guarantee from legal and political risks.” …
Businesses turn to dollar in fiercely anti-American Venezuela as currency crashes
CARACAS, Venezuela – It’s still possible to buy a gleaming Ford truck in Venezuela, rent a chic apartment in Caracas, and snag an American Airlines flight to Miami. Just not in the country’s official currency.
As the South American nation spirals into economic chaos, more products are not only figuratively out of the reach of average consumers but literally cannot be purchased in Venezuelan bolivars, which fell into a tailspin on the black market last week.
Businesses and individuals are turning to dollars even as the anti-American rhetoric of the socialist administration grows more strident. It’s a shift that’s allowing parts of the economy to limp along despite a cash crunch and the world’s highest inflation. But it could put some goods further out of reach of the working class, whose well-being has been the focal point of the country’s 16-year-old socialist revolution.
The latest sign of an emerging dual-currency system came this month when Ford Motor Co. union officials said the company had reached a deal with officials to sell trucks and sport utility vehicles only in dollars.
A few weeks earlier American Airlines announced that it had stopped accepting bolivars for any of its 19 weekly flights out of Venezuela. Customers must now use a foreign credit card to buy the tickets online. Virtually all other foreign carriers have made the same switch with the government’s consent, according to the Venezuela Airlines Association.
Driving the shift is the crumbling value of the bolivar, which has lost more than half its value this year, plunging to 400 per dollar on the free market as Venezuelans scramble to convert their savings into a more stable currency. Desperate, people are selling bolivars for a rate 60 times weaker than the strongest of country’s three official exchange rates. …
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