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To: Goose94 who wrote (9892)	10/24/2014 9:31:12 AM
From: Goose94	Read Replies (1) \| Respond to of 203640

Russians Make Largest Gold Purchase In 15 Years: What Does It Mean For Gold Investors? Russian central bank purchases 1.2 million ounces of gold in September. This is the largest gold purchase by Russia in over 15 years. If the Russian central bank keeps up monthly gold purchases of this size then it will impact total annual gold demand. There may also be significant political motivations in publicly announcing this large gold purchase. A few days ago the Russian central bank released its gold reserve data that showed a tremendous increase in gold reserves during the month of September. (click to enlarge) Source: ShareLynx The surprise isn't that the Russian central bank bought gold reserves; it has been buying gold pretty consistently since 2007. The surprising aspect of the purchase that should really interest investors is the large amount of the purchases - 1.2 million ounces (valued at around $1.5 billion dollars) or around 37 tonnes of gold! This is the largest purchase of gold that Russia has made in over 15 years and occurred as the Ruble plummeted during the month. There are a number of takeaways that gold investors should take from this monster purchase of gold. First of all, the physical market for gold is not as large as many investors think. When it comes to gold derivatives, the market can be almost limitless as gold can be leveraged via these instruments to astronomical levels, but the physical market is very limited. With $100 million dollars an investors can easily load up on the GLD gold ETF in a matter of minutes, but it would take days or weeks to acquire that same amount of physical gold - even if we disregard the difficulties of transportation. It is simply not that easy to source physical gold that quickly and in the same amounts as can be done in the paper market. Coming back to the Russian gold purchase, we can see that a 37 tonne monthly purchase is almost 1% of total gold supply. (click to enlarge) Source: World Gold Council Second Quarter Report Remember this is total world gold demand - 1% is a huge number especially considering it was acquired all in one month by one entity. We don't expect Russia to continue to buy 37 tonnes a month, but if we do extrapolate that out it would come to around 500 tonnes of annual gold demand - around 12% of total gold demand. This would be equivalent to all other transparent annual net central bank purchases. The point is that this is a significant amount of purchases compared to total demand and investors shouldn't ignore the possible impact on the physical market if Russia continues to buy at such elevated levels. Sending a MessageInvestors also need to remember that when it comes to Central Banks, nothing is accidental. The decision to buy 1.2 million ounces and the decision to release this information was probably done at the highest levels of the Russian government. We actually think the release of this information is much more important than the actual amount purchased. Let us not forget that nobody forces the Russian government to release its gold holdings, and many countries choose not to release any new gold purchase information even though it is clear that the government is buying gold (such as China). Additionally, nobody outside of the Russian government can truly audit the gold without Russia's permission, and thus Russia could release almost anything regarding its gold holdings without anybody to fact-check. If Russia's only goal was only to accumulate gold, then there would be no need to release any over and beyond the 200-500 thousand ounces of average monthly gold purchases that the country has bought consistently since 2007 - even if they chose to buy more than that in a month. They could simply claim 500,000 even if they bought 1.2 million and then worry about the actual declared holdings later. But the fact that they chose to declare that they bought the largest amount of gold in over 15 years and DECLARE it was, in our opinion, done purposefully. What was the purpose? To send a message to the United States that there could be consequences to the current sanctions and animosity towards Russia. Gold is the true Achilles Heel of the US Dollar because it is the only true alternative as a global reserve currency - it is no coincidence that the US holds more gold than any other nation. So if Russia wanted to really do damage to the existing US hegemony on the world's reserve currency, it would use gold as its weapon - and this may be a warning to the US that Russia can indeed do just that. During the late 1960's and early 1970's, the French decided to convert their US Dollar reserves into gold and that was the last straw that forced President Nixon off of the gold standard and thus closing the last ties of the US Dollar to gold. The lesson that investors should take from this chapter in history is that one large nation that is intent on asking for physical gold, could cause havoc in the gold market. According to the IMF, Russia has over $400 billion in currency reserves and if a mere $1.5 billion bought the largest amount of gold in 15 years, what would happen if Russia decided to accelerate purchase to $3 or $5 billion of physical gold per month? That would certainly be enough to move the gold market considerably and it could cause copycats to jump onboard and exacerbate the shortage and create chaos in the financial markets. Of course, Russia wouldn't want to make chaos in the financial markets…right? Well, not according to Hank Paulson, former US Treasury secretary who says that at one point during the financial crisis: "Here I'm not going to name the senior person, but I was meeting with someone… This person told me that the Chinese had received a message from the Russians which was, 'Hey let's join together and sell Fannie and Freddie securities on the market.' The Chinese weren't going to do that but again, it just, it just drove home to me how vulnerable I felt until we had put Fannie and Freddie into conservatorship [the rescue plan for them, that was eventually put in place]." For me this is pretty jaw-dropping stuff - the Chinese told Hank Paulson that the Russians were suggesting a joint pact with China to drive down the price of the debt of Fannie and Freddie, and maximize the turmoil on Wall Street - presumably with a view to maximizing the cost of the rescue for Washington and further damaging its financial health. The point is that Russia may have more incentive to damage US financial interests than it did in 2007, and gold may be the best way to do it if Putin chooses this path. Conclusion for InvestorsRussia's decision to buy 1.2 million ounces of gold in September is a very important thing for gold investors to note. First, if the Russian government decides to consistently buy 1 million ounces per month, it would add a new buyer that would be consuming a large amount of annual gold supply (over 400 tonnes or close to 10% of total estimated world demand) - enough to have a significant effect on the physical market. Secondly, and in our opinion more importantly, this move may be a shot across the bow of the current financial system and the US Dollar regime. By making such a large monthly buy and revealing it in it a very public fashion, Russia may be making a statement that it will be accumulating gold in a big way - the only other asset that represents a challenge to the US Dollar's reserve currency status. This issue may be resolved behind the scenes with a ratcheting down of US aggression over the Ukraine issue, but it will be very interesting to look at how much Russia accumulates during the month of October - and how much they declare. If Russia is going to be using gold as a weapon, then investors would be foolish not to invest a bit in gold especially as Russia does have the financial strength to create significant waves in the gold market that could reverberate through the whole financial system. Pay close attention to what Russia does in the physical gold market and if they start ratcheting up their gold accumulation - If so, then maybe the gold war has begun.

To: Goose94 who wrote (9892)	11/4/2014 1:58:58 PM
From: Goose94	Read Replies (1) \| Respond to of 203640

Survey: Will a Cartel Save the Silver Price? By now those involved in the silver space are likely well aware of First Majestic Silver’s (FR-T) decision to postpone the sale of about 934,000 ounces of silver. The company announced the move on October 14, describing it at the time as “an attempt to maximize future profits.” Since then, President and CEO Keith Neumeyer has offered a more in-depth explanation, telling Future Money Trends that it’s a path his company has followed before. “The third quarter [of] 2014 was the second-worst quarter in five years. Silver prices are down 19 percent in the quarter and that compares to the only other worst quarter in the last five years, and that would’ve been the second quarter of 2013 where silver prices were down 26 percent,” he told the news outlet, adding, “we also held back ounces in that quarter — we didn’t hold back as much, we held back about 700,000 ounces then.” He also encouraged other silver producers to join him, stating, “I think it would be a very exciting thing for all the silver companies to form a semi-cartel in a way, similar to OPEC. I don’t see why we can’t do that — I think we all agree together that the paper market has no representation to the physical market, and I think it makes sense that we would all work together to sell our product to industry. I would encourage all [silver producers] to hold back their silver.” What do silver miners think? The vast majority of market watchers have responded positively to First Majestic’s announcement that it will hold back silver, but what do other silver companies think of that decision? To find out, Silver Investing News spoke with seven companies at the recent Silver Summit, which took place in Spokane, Washington from October 23 to 24. Here’s what they had to say. Producers: Endeavour Silver (EDR-T): “Endeavour Silver was the first company in the silver group to do that in 2009/2010. We have done it once or twice since that time, and our view is that there are appropriate times to either hold back sales or accelerate sales, depending on how obvious the near-term outlook is for the silver price. We also, in August and September of this year, started holding back metal from production. We didn’t make it headline news like First Majestic, but we actually quadrupled our silver inventory in the third quarter. That’s not going to stay there forever, the idea is to try and get a better price for that metal, and when we see a better price we will sell it.”Coeur Mining (CDE-NY): “Obviously what they’re showing the market is they believe that silver prices will be higher at some time in the future, and that holding them in inventory is like a savings account that’ll pay down the road … I’m a believer in silver and gold also, so I think that it’s a good move as long as they can continue to stay profitable.”Juniors: Mines Management (MGT-T): “If that’s a strategic opportunity that First Majestic was able to make and still be able to achieve their goals, I think it’s an advantageous thing for them to do.”Bayhorse Silver (BHS-V): “Too many people have to settle, and if you’re in a position where you don’t have to settle, then more power — wait for higher prices.Golden Arrow Resources (GRG-V): “If you can afford to do it, you can do it. It’s nice to have that sort of luxury. I don’t know what it’s going to do if all the silver companies pull back — we’ll have to see what happens.”Rare and strategic metals seller: Swissmetal: “I think they’re clever. I think the prices will go up. I think by the end of this year we’re probably going to see $20 to low $20s. I think by next year maybe high $20s, low $30s. And I think in the next three to five years we’re going to definitely see [silver] breaking the $50-an-ounce barrier. So if I had a million ounces, I would not sell it today.”While the responses above highlight that not all silver companies are in a position to follow First Majestic’s lead in holding back silver, they also show that silver producers and explorers alike support the company’s plan. It will thus be interesting to see whether any make a similar leap either now or in the future. Tell us what you think Silver Investing News would like to know what you think — can an OPEC-style silver cartel like the one suggested by Neumeyer help lift silver prices? Weigh in by voting in the poll below! Do you think an OPEC-style silver cartel will boost prices? Yes, the price of silver will rise if more companies hold back production. No, holding back production will not impact the silver price. Other: Vote View Results Polldaddy.com To vote click on link: http://silverinvestingnews.com/26884/silver-price-keith-neumeyer-first-majestic-cartel.html?pmc=E-1&MyID=Mr.Dean.White@eastlink.ca&utm_source=Resource+Investing+News&utm_campaign=e411e54dfd-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_f83d87db0f-e411e54dfd-248816957