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Issue 9 | April 1, 2014

In This Week’s Report:

Volcker Ruling | Charts, Quotes & Quick Hits | Gold | Silver | Banks | GEO-Political | Video

APRIL 1ST – THE VOLCKER RULING

-Mike Kosares: Volcker Rule starts April 1 and might push big banks out

of gold. Speculative trading by banks is to end in the United States on April 1 upon

implementation of the "Volcker Rule," Mike Kosares of Centennial Precious Metals in

Denver notes today, with implications for the gold market. "The big trading banks

traditionally have occupied the short side of the paper gold market," Kosares writes. Read

More: http://goo.gl/AFGyjw

CHARTS OF THE WEEK-QUOTES-QUICK HITS

-"Looking around the world, the real economy is certainly not improving. In the U.S., the

latest retail sales point to a 4% decline, and housing starts are seeing a 34% decline.

Existing homes sales are down 18% since 2013 that’s the 19th drop in a row. The U.S.

consumer is getting squeezed continuously. Real household incomes are down 10% since

2000, and consumer debt is up 20% since 2010. Also, inflation in food prices is getting out

of hand. Coffee is up 70%, hogs are up 42%, and beef is up 5% this year alone. So the

consumer is really getting squeezed.

This so-called recovery in the U.S. does not look healthy to me at all. Turning to gold, as

usual we saw a fall in price in connection with the Fed Meeting. The average fall in the

price of gold around the last seven Fed Meetings has been $47, so this time was no surprise.

One must ask if this is a natural fall or manipulation? Regardless, all of this volatility is

part of a move to much higher prices. Investors now have a wonderful opportunity to swap

soon to be worthless paper currencies for real money and real wealth gold. And they can do

this at what will be seen as absolutely ridiculously cheap prices in coming years. But of

course investors must buy physical gold and store it outside of the banking system." Egon

von Greyerz

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-CHART OF THE WEEK: 7 Astonishing Charts Exposing The Big Picture

For Gold. Read more here-http://bit.ly/1jA0mKg

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-CHART OF THE WEEK: The Real Inflation Fear US Food Prices Are Up

19% In 2014. Read more here-http://bit.ly/OYwj0Z

-CHART OF THE WEEK: Stocks And Bonds Are Now So Expensive That

They Are Priced To Have The Worst Long-Term Performance In History.

Read more here-http://read.bi/1hePjmw and http://read.bi/1lpEgu4

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-"I think that longer-term gold is in a secular bull market. We have put in a

low on gold, but it’s going to take some time to work its way higher. But longer-term gold

trades higher. It’s not just China that’s buying gold we also have India as a big buyer.

Those are the two large gorillas in the room. I think there is an inherent distrust for

currencies. I don’t understand why there is distrust for the Chinese renminbi. One of the

last things John Templeton said to me was to ‘Go long the renminbi and never sell it.’ He

was saying just convert your dollars into Chinese renminbi because over the long cycle it

was going to continue to strengthen against the U.S. dollar, and I think that’s right. But I

think there is an inherent distrust in paper currencies not just in India and China but in a

lot of these emerging and frontier markets because of what historically has happened in

terms of devaluations, coup de tats, and other things. So there has always been a move in

those areas to store wealth in precious metals. In the United States, one of the ways to pass

on wealth is through gold coins." Jeffrey Saut

-"Gold is in a short-term downtrend. Gold and the shares have had very big advances. We

finally had an upturn this year in the entire raw materials sector. This even includes rare

earths and uranium. But gold will also have periodic choppiness. Right now gold and silver

are pulling back. So those who missed the bottom last year will be getting another chance

to buy into them. The length of time for a pullback is unpredictable because it depends on

the geopolitical situation. It also depends on interest rates and a number of other things.

It’s the kind of thing that’s more measurable by studying when the downtrends begin to

break. I’m looking for much higher prices after this pullback ends. Gold went up 12

straight years, and we have seen a normal and healthy correction. So we saw a normal

roughly 1/3 decline. But I think when this pullback is over, gold is going to new all-time

highs." James Dines

-Monetary Base Skyrocketing & Bail-Ins Already Well Under Way. "The

precious metals sector had a sizable pullback, but was understandable given the

outperformance for the year-to-date. We expect it to be an opportunity to establish new

positions or add to old. Based upon past actions, we have to believe that what the Fed is

doing is more Kabuki Theater and sleight-of-hand. The central planners as a whole are

boxed into a dead end street. If they are truly trying to fight their way out by reversing the

policies of the past 12 years, they run the risk of collapsing global economies and financial

markets. While we have focused on opportunities as well as pitfalls, the signals coming

from the markets suggest once again that the unpleasant results of decades of fiscal and

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monetary mismanagement might not lie far ahead and caution is warranted." Robert

Fitzwilson

-Greg Hunter: James Rickards Interview, Fed Insolvent, Dollar Will

Collapse 90% or More. Financial expert and best-selling author James Rickards

thinks the “international monetary system is headed for a collapse.” Rickards contends,

“It’s really not meant to be a provocative statement. The international monetary system

actually has collapsed three times in the past 100 years. It collapsed in 1914. It collapsed in

1939, and it collapsed in 1971. When it happens, it doesn’t mean the end of the world or we

all go live in caves.

We have a period of sort of economic confusion.” Rickards new book “The Death of

Money” is a road map for what is coming. Rickards contends, “What I do for the reader is

explain why the collapse is coming and, secondly, describe what this new system might look

like. That should be very helpful to investors in preparing to both survive the collapse and

be well positioned in terms of wealth preservation under the new system that’s coming.”

Rickards foresees big inflation because the U.S. dollar’s buying power will shrink.

Rickards predicts, “Imagine gas at $20 a gallon and bread at $10. That’s what we’re

talking about.”

So, if big inflation is coming, what about gold? Rickards says, “When I say the price of gold

is going to $7,000 or $9,000 per ounce, which I expect it will, what I am really saying is the

dollar is going to collapse 80% or 90% or more.” It did in the 1970’s. None of this is

unprecedented, it all happened before.” Rickards says, “When a collapse happens, it will

happen quickly. You won’t see it coming. There won’t be time to run out and buy gold,

and it probably will not even be available at that stage. You need to prepare now. Watch

more here-http://bit.ly/1mxhnoH

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GOLD

-John Embry: As U.S. Lies & Suppresses Gold, Its People Are Getting

Crushed. Gold is already down about $80 from its recent highs, but the fact is that

nothing has changed since gold traded at $1,390 vs. today, except that these guys have the

paper longs liquidating. In the long run this means absolutely nothing. At this point gold is

extremely cheap, very few people own it, sentiment is rotten, and every currency in which

gold is denominated in is being seriously debased. Everyone who is not buying physical

gold at these prices is making a huge mistake. There is a war going on in the gold market

and it is a war of psychology. This is why they keep trying to wear people out

psychologically and exhaust them into selling.

The problem is that this is not going to work with goldbugs. People invested in gold know

that the currencies are being destroyed and that governments are imploding their

economies with what will be seen in the fullness of time as catastrophic policies. I don’t

believe the central planners can hold this together through the end of this year because the

problems in the system are simply too acute. As an example, food prices are going through

the roof compared to last year. This is what the average person has to deal with. The

average person’s income isn’t rising, and yet the prices of things they have to consume such

as food, energy, shelter, and healthcare, all of these things are rising in price. But the

central planners keep telling people there is no inflation.

The government is just lying to the people. Virtually every economic report from the

government is a lie from GDP growth, to inflation, etc.. The central planners are trying to

sell people on the fallacy that the U.S. economy is recovering and this is bad for gold and

good for the stock market. That is patently false. The truth is that if they don’t continue to

pump money into the system, it will crater. So the idea that this tapering will continue is

preposterous. It’s just another government sponsored lie that is fed to the public through

its ‘Ministry of Propaganda’ the mainstream media. The reality is that the West can’t

support both its economies and its currencies. They are mutually exclusive.

I know the central planners are going to try to hold together the economy and the financial

system, and this means the currencies are going to crater. This will be wildly bullish for

things like gold, silver, and other tangible assets. None of this artificial manipulation is

going to fool any of the army of investors in gold and silver around the world. These people

are just too well-informed and they know how this is going to end very badly. Right now

financial assets are grossly overvalued, and hard assets such as gold and silver are

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extremely undervalued. But because of the vulnerability of the global financial system,

these guys are going to try to perpetuate this lie as long as they can because the minute this

reverses, it’s all over for them and they know it. Read more here-http://bit.ly/O0zV1m

-James Rickards: Interview on The Death of Money. Listen here-http://bit.ly/1loU00r and

http://bit.ly/1dQWAV2

-John Browne: Gold's fundamentals may be starting to overcome market manipulation.

Read more here-http://bit.ly/1l7gzEb

-GATA Chairman Murphy interviewed by The Daily Bell. Read more here-

http://bit.ly/1hdTXkA

SILVER

Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33

Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00

Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00

-Greg Hunter: David Morgan Interview, Silver Market Update. On silver,

Morgan says, “The rush into gold is basically nation states, but the rush into silver is

basically ‘the people,’ and it’s not just ‘the people’ of the U.S., it is ‘the people’ of the

world. Silver has been mined in more places in the history of the world than gold ever has.

Gold has always been nation state to nation state settlement. What will happen in my view,

and this happened in late 1979 and 1980, is that people will catch on quickly.

They will see what’s happening in gold and they will say ‘I can’t afford gold at $2,500 an

ounce or $3,000,’ and they’ll say ‘I’m going to buy silver.’ Since there are many more

people that are middle-class or lower that have a financial survival instinct, they’re going

to get whatever they can. The top tiers of all the commodities are gold and silver. Why?

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Because they’re money, they last, they don’t rot and store forever. There will be a rush into

gold and then silver like you have never seen before. This will be a global phenomenon. It

wasn’t in 1979, this time it will be. You will either have it or you don’t.” What are

Morgan’s price targets?

Morgan says, “I am on the record that it will hit $100 an ounce, and that may be

conservative. If you look back in history an ounce of silver is basically a day’s wage in very,

very good times. The minimum wage in some states is $9 an hour, and that equates to $72 a

day. That means an ounce would be $72 at the minimum, just to be fair value today. I don’t

think we need to focus on the paper price but the value of silver relative to the market. Two

things to consider here: Silver is very undervalued where it is currently, and its value has a

lot of upside. You really have to focus on what it purchased relative to what it purchased in

the past, and we have not ever gotten to par.” Watch more here-http://bit.ly/1gvKlSp

-KWN: One Of The Greatest Market Calls In History Happened In Silver.

Read more here-http://bit.ly/1gv7wfU

-Stephen Leeb: There Is A Conspiracy In The Silver Market. I am very

surprised to see silver at $20. I would have expected silver to be closer to $30 by now if it

were not manipulated, especially given the incredible demand for photovoltaics. This will

be a huge driver for the price of silver going forward. Current events have turned me into

someone who believes in conspiracies. There is no question that the silver market is being

manipulated, but one of these days the price of silver is going to explode higher. We are

seeing the price of copper back above $3 again, and China is getting ready to ramp up their

energy infrastructure spending.

This will entail spending of well over $1 trillion over the next several years. All of this

means higher prices for commodities in the future, but especially for silver. However,

people should understand that gold is going to be part of a basket that defines the new

world reserve currency. This means that gold will be revalued significantly higher. So when

investors see pullbacks in gold like the one we have just witnessed, they should simply use

that weakness for long-term accumulation of gold because that is what is going to preserve

or even enhance their purchasing power over the long haul. Read more here-

http://bit.ly/1h0NBR7

-Richard Russell: I Am Buying Physical Silver Right Now. Here's what I did

today. I took some un-backed junk currency called Federal Reserve Notes, and with them

bought some constitutional money, known as silver. I consider gold and silver, now being

manipulated, as on the bargain table. You and I, using Federal Reserve Notes, can go to

our local coin dealer and swap junk Federal Reserve Notes for constitutional money, better

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known as gold and silver. The current erratic and nervous markets are hardly conducive to

peace of mind. And in my opinion, no amount of money is worth the loss of peace of mind.

As I see it, peace of mind at this time and a reasonable position can be found in an actual

physical position in silver and gold.

In relation to the enormous position in Federal Reserve Notes, the currently manipulated

price of silver and gold puts them on the bargain counter. Over time, I believe the truth of

the manipulation of gold and silver will come out. The ends that the Federal Reserve has

gone to hold down the prices of gold and silver is both disgusting and immoral. My final

note: You can still buy constitutional money with the fiat junk that the Fed is turning out.

I'm looking at a one-ounce silver coin, and on it I read the four words, “In God we trust.”

These words are redundant, since silver, like gold, is pure wealth, and there is no need of

“trust” on the part of those holding it. I note the way that Federal Reserve Notes also state,

“In God we trust.” How dare they invoke God's help? In my mind, it is a blasphemy. Read

more here-http://bit.ly/1l8E27X

-Silver Vault for 600 Tons Starting in Singapore on Demand. Silver Bullion Pte, a

Singapore supplier of coins and bars to retail investors, opens a 600 metric ton vault

tomorrow as investor demand increases. The storage could hold silver worth $390 million

at prices on March 21. The company doubled sales to 1.04 million ounces in 2013 from

517,000 ounces a year earlier, said Gregor Gregersen, who founded the company in 2009.

Almost all the sales were silver, he said in an interview in Singapore on March 18. Investors

are adding to holdings as silver becomes cheaper relative to gold. Read more here-

http://bloom.bg/1gGlAE7

BANKS

-Citigroup Fails Fed Stress Test as BofA Gets Dividend Boost. Citigroup Inc.’s capital plan

was among five that failed Federal Reserve stress tests, while Bank of America Corp. won

approval for its first dividend increase since the financial crisis. Lenders announced more

than $60 billion of dividends and stock buybacks after the Fed approved capital plans for

25 of the 30 banks in its annual exam. Citigroup, as well as U.S. units of Royal Bank of

Scotland Group Plc, HSBC Holdings Plc and Banco Santander SA, failed because of

concerns about the quality of their processes, the central bank said yesterday in a

statement. Zions Bancorporation failed after its capital fell below Fed minimums in a

simulation of a severe economic slump. The results show lenders may still face obstacles to

boosting dividends and buybacks even as regulators say the firms have doubled their

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capital since the first public stress test in 2009. The Fed is increasing scrutiny of the

industry’s controls and planning processes as concerns about capital levels wane. Read

more here-http://bloom.bg/1g4ANsV and http://bloom.bg/1g4AVZm

-Capital controls feared in Russia after $70bn flight. Investors are withdrawing money at a

rapidly increasing rate amid escalating sanctions from the West. Capital flight from Russia

has spiked dramatically since President Vladimir Putin first sent troops into Crimea and

may reach $70bn (£42bn) over the first quarter of the year, prompting fears that the

country may soon have to impose capital controls to stem the loss. Andrei Klepach, the

deputy economy minister, admitted in Moscow that the outflows are likely to reach $65-

70bn, far higher than originally expected and a clear sign that investors are extremely

nervous of escalating sanctions. Read more here-http://bit.ly/1guk72N

-European Central Bank now considering even negative interest rates. European Central

Bank officials sent strong signals Tuesday that they are willing to consider dramatic steps

to guard against dangerously low inflation, suggesting that the bank is prepared to shed

some of its traditionally cautious approach. The possible tools, cited by some top policy

makers from different parts of the euro zone, include effective negative interest rates

meaning rates so low that commercial banks would essentially pay the ECB to park their

extra cash overnight.

They also include purchases of government or private-sector debt to hold down long-term

rates and spur lending. "We haven't exhausted our manoeuvring room" on interest rates,

Bank of Finland Governor Erkki Liikanen, told The Wall Street Journal in an interview in

Helsinki. Mr. Liikanen is on the ECB's 24-member governing council. Asked what tools the

ECB has remaining, Mr. Liikanen cited a negative deposit rate as well as additional loans

to banks and asset purchases. Read more here-http://bit.ly/NUlzj3

GEO-POLITICAL

-London to become Chinese currency trading center. London will become the

first center outside Asia in which investors will be able to clear and settle Chinese renminbi

trades. The major boost to the City came after the Treasury said Britain and China would

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next week sign an agreement opening the way to much greater volumes of renminbi-

denominated trading in the UK. Read more here-http://bit.ly/1pzQZaR

-Iraq Buys $1.56 Bln of Gold, Biggest Purchase in 3 Years. Iraq bought 36

metric tons of gold this month valued at about $1.56 billion in the largest purchase by a

nation in three years. The Central Bank of Iraq acquired the metal to help stabilize the

Iraqi dinar against foreign currencies, it said in an e-mailed statement. The country held

about 29.8 tons of bullion as of August, according to data on the International Monetary

Fund’s website. The latest addition was the biggest since Mexico bought 78.5 tons in March

2011. While nations purchased about 544 tons in 2012 in the largest accumulation in about

five decades, acquisitions slowed to 369 tons last year, according to the London-based

World Gold Council. Countries will continue buying amounts in the “hundreds” of tons,

the producer-funded council said in February. Read more here-http://bloom.bg/1gGm5hB

-Korea Exchange Seeks Cut of $3 Billion Illegal Gold Trade. South Korea’s equity

exchange started offering physical gold trades for the first time today, as the government

seeks to curb as much as $3 billion of black-market transactions. Korea Exchange Inc.,

which has had bullion futures since 1999, aims to gradually replace illegal sales that total as

much as 70 metric tons annually and deprive the state of an estimated $280 million in taxes.

Customs officers intercepted 360 kilograms last year as the number of busts more than

doubled from 2012. Purchasing gold bars is a common way to hide income in Korea, where

a shadow economy of unreported buying and selling accounts for a quarter of gross

domestic product. While Korea Exchange will reduce taxes on physical trades, smuggled

gold is likely to remain as much as 7 percent cheaper, according to the Korea Precious

Metals Distributors’ Association. Read more here-http://bloom.bg/1mwWie1

-China gold demand up 29% so far this year, Koos Jansen reports.

"60 Minutes" investigates high-frequency trading

[VIDEO]: http://goo.gl/uV0QTT