Month: June 2014

Gold & Silver Price Limits

“Last year was crazy, and then we said we have to do something,” Miguel Vias, the director of metals products at CME, said.

In 2013 gold prices fell 28% with silver falling 36% representing the largest slumps for both metals in more than three decades. After bullion fell to a 34-month low in June, the yellow precious metals saw its volatility reach the highest levels since 2009.

CME, considering applying daily price limits on gold and silver, are looking to mellow out the wild volatility seen in the precious metals markets over the last few years.  There is precedent for this, as CME currently has limits for various futures contracts across commodities, like energy, agriculture, as well as as financial products. As yet, it has not introduced limits on precious metals.

CME’s major concern is the high level of buying and/or selling and the associated price fluctuations. “We don’t have price limits in gold and silver. That’s something that we are looking into,” Vias said.

 

 

The suggestion comes as allegations about high-speed frequency traders rigging markets via dark pools and off-book exchange trading. One of CME’s major concerns are the trading programs that could push the market higher or lower all on their own.

Through the first four months of 2014, COMEX gold futures volume decreased 10 percent from one year ago. Turnover in silver contracts increased about 7.5 percent.

Gold and silver futures are the most-traded commodity contracts behind crude oil and other energy products.

The frequency of wild price movement has only increased in recent years and so the exchange introduced circuit breakers in order to prevent cascading stop orders that could make price movements larger.

But not everyone supports setting limits on price movements.

“I think the breaks in trading are good, but I wouldn’t support fixing price moves,” said one U.S. trader.

Other analysts, like Bix Weir, claim this is a new stage in gold and silver price manipulation.

The moves by the CME could be seen as evidence that big movements are coming in the gold markets, what with geopolitical turmoil and emergency Fed meetings taking place, as happened this week. CME runs the COMEX, and many speculate the COMEX is actually short gold and silver, and thus any movements to the upside could hurt it, causing it to default on its obligations.

At any rate, the decision seems to come on the heels of the CME acknowledging that markets are manipulated via high speed computer programs.

Russia Prefers Gold To US Paper

[heading]Russia Prefers Gold To US Paper[/heading]

The United States (US) and the European Union (EU) have threatened sanctions against Russia, but even these efforts have seemed lackluster, as namely Europe seems reluctant to step on Russia’s toes. In the meantime, Russia has made moves to tighten its relationship with emerging world superpower China, causing those two nations to move towards closer trade and sometimes trade that circumvents the US Dollar altogether.

Since the Ukraine crisis worsened this year Russia and China have worked closer together, but there are some things Russia is not interested in selling to China, and what they are might be very telling for investors. Read More

US Marshal’s Auction Off Silk Road Seized Coins

[heading]US Marshal’s Auction Off Silk Road Seized Coins[/heading]

The US Marshals announced this week that they will be auctioning off almost 30,000 bitcoins that were seized in the Silk Road raid, but not those from the computer of Ross William Ulbrecht, allegedly known among Silk Road users as “Dread Pirate Roberts.” The coins are worth altogether nearly $18 million USD.

Reddit user “ozme” posted the link to the online notice Thursday afternoon, and another user noticed before that the FBI had moved from one bitcoin wallet to another.

The 29,658.80613651 bitcoins located in an online wallet have been monitored by bitcoiners via the Blockchain public ledger. Read More

Why The Gold Industry Is Packing Up & Leaving Western Nations

[heading]Why The Gold Industry Is Packing Up & Leaving Western Nations[/heading]

Wealth is draining out of western nations, and there’s good reason. Record levels of debt, institutionalized corruption, fraud and so on have left financial markets looking towards the east, and gold is no exception.

A new trend has emerged in the gold market, one which might have implications for an ongoing power shift in global geopolitics. Basically, eastern markets, led by China, want more influence on the gold market. Traditional power center, London, might not be ready to cede power, but does it have a choice? More western nations have little control over precious metals. For instance, record levels of debts preclude the purchase of further gold stockpiles. Palladium is controlled by Russia and the platinum market is in turmoil in South Africa. Read More

These Banks Are Getting Sued For Manipulating This 6,000 Year Old Form Of Money

[heading]These Banks Are Getting Sued For Manipulating This 6,000 Year Old Form Of Money[/heading]

The New York Times published a piece on May 5 entitled “Banks Sued On Claims Of Fixing Price Of Gold,” which goes into detail about a bunch of gold price suppression lawsuits in New York. The article goes over the 40-minute hearing in which lawyers for over twenty plaintiffs met in a Federal District Court in Manhattan so as to coordinate their lawsuits against the five banks which steer the London Gold Fix. Read More

Gold Mine For Sale In Bitcoin

[heading]Gold Mine For Sale In Bitcoin[/heading]

One gold miner is selling his gold mine, but don’t offer him Federal Reserve Notes – he prefers bitcoin…

An unknown parent company of a Yukon, Canada, gold mine is for sale on high-end bitcoin-specific marketplace BitPremier for the asking price of $2m in BTC, potentially the highest priced bitcoin sale ever on record.

The price tag for the gold mine is more than 3,000BTC. This price includes the gold mine itself, all its associated assets, including $1 million worth of actual mining equipment, the rights to one mining property and the lease agreement to a seperate mining lot. Read More

Will The ECB Negative Interest Rate Decision Affect Bitcoin?

[heading]Will The ECB Negative Interest Rate Decision Affect Bitcoin?[/heading]

In a historical decision the European Central Bank (ECB) has lowered interest rates into negative territory, something that will surely heighten the pro-European/anti-European tensions seemingly cropping up throughout the region. The decision resulted in a bitcoin price change, leaving many curious if bitcoin will act like a commodity in the future. Read More

Hip Hop Loves Bitcoin

[heading]Hip Hop Loves Bitcoin[/heading]

The hip hop industry has long been obsessed with money. From 2Pac to indie artists, making money has been a theme throughout. Much of this is simply the acknowledgement that money makes the world go round, a clairvoyant observation. It is this observation that makes bitcoin and hip-hop a match made in paperland…

Most recently 50 Cent said that he would make his new album, Animal Ambition, available in bitcoin –  0.01373 Bitcoin to be exact. The payment through his Shopify store will be processed through BitPay. BitPay executive chairman Tony Gallippi said,  “We are excited to see high profile independent artists use Bitcoin and 50 Cent’s trail as an innovator is outstanding.”

50 Cent was discovered by legendary hip hop artist Eminem, and went platinum under the guidance of Dr. Dre and Eminem with his album “Get Rich or Die Tryin’.” 50 Cent, whose real name is Curtis Jackson, was once shot nine times and survived. Read More

Ecuador Transfers Gold To Goldman Sachs For Cash

[heading]Ecuador Transfers Gold To Goldman Sachs For Cash[/heading]

Ecuador’s transfer of over half its known gold reserves to Goldman Sachs Group Inc. for three years, in order open up cash for the South American nation, will see the central bank sending 466,000 ounces of gold to Goldman Sachs, worth approximately $580 million at current price levels. The nation expects to get the same amount back three years from now in exchange for the cash. Ecuador, in return, will receive “instruments of high security and liquidity” and anticipates to earn a profit of $16 million to  $20 million over the three years for lending her gold.

The central bank did not detail additional terms of the transactions, including feeds or financing costs paid to Goldman Sachs. Five years ago Ecuador defaulted on $3.2 billion in bonds. The recent move with Goldman Sachs comes as the South American nation must meet a budget deficit of approximately $4.94 billion. In April, President Rafael Correa said he planned to sell approximately $700 million of foreign debt this year in the country’s first international bond sale since Ecuador’s 2008 and 2009 default. Read More

Why Did The US Mint Lift Its Rationing Of American Silver Eagles?

[heading]Why Did The US Mint Lift Its Rationing Of American Silver Eagles?[/heading]

On Friday the US Mint announced it would stop rationing its popular American Silver Eagle bullion coins due to falling investment demand.

The Mint began rationing the American Silver Eagles last year due to sustained demand but recently told its authorized dealers they could buy as many Silver Eagles as they wish starting Monday.

The US Mint has been rationing coin sales to its authorized dealers since late January, 2013 following a suspension due to unprecedented demand, which depleted silver coin blanks. Read More

The Home Of Central Banking Embraces Bitcoin

[heading]The Home Of Central Banking Embraces Bitcoin[/heading]

The Netherlands, and specifically Amsterdam, has, in recent history, been known for its marijuana culture. But now, the birthplace of the world’s first stock exchange and central bank, is becoming home to banks with an open mind about bitcoin.

Big banks in China and the US are avoiding bitcoin ventures, although some of hinted otherwise. Dutch banks, contrarily, are embracing bitcoiners as potential customers. National regulators are not cracking down on bitcoiners like in other nations and bitcoiners are noticing. Major bitcoin startups from around the world are setting up shop in Amsterdam.

For those interested in the history of central banking, the Netherlands’ interest in bitcoin is underscored by that it is home to the world’s first central bank – the Bank of Amsterdam. Found in 1609, the bank was the first public bank to offer accounts not directly convertible to coin as a response to the chaotic economic environment of the time.

According to Mark Buitenhek, ING Groep NV (INGA)’s global head of transaction services, “customers want change, and that change could be bitcoin.”

“We are very expressly looking at what it is, what it can do and, mostly, what the message behind it is,” Buitenhek said at a conference. “And that tells us: Banks, take action.” ING is the Netherland’s largest bank by total assets.

Dutch regulators, like many nation-states, have warned about the risks of using bitcoins. But the authorities in the Netherlands have also looked into the crypto-currencies potential.

Amsterdam_canal

“They are willing to let this technological experiment unfold,” Jeroen Blokland said in an interview. At the same time, authorities are warning anyone who wants to use it as an investment to “be careful, be very careful.”

Bitcoin businesses are choosing Amsterdam over Europe’s more traditional tech hot spots like London and Berlin. BitPay, based in Atlanta, Georgia, has opened an office in the Netherlands, while BitFury, a startup that manufactures equipment for the bitcoin network, plans on basing major operations in Netherlands as well.

The Netherlands is home to about 5 percent of all bitcoin “nodes” – a source of computing power for the network that authenticates transactions. This is not far behind rates for Germany, Britain, Canada and France, and is more than China. The original bitcoin client software – Bitcoin QT – has been downloaded in the Netherlands nearly 130,000 times, one of the highest rates in the world on a per-capita basis.

Kim Gunnik, a policy officer for innovation and cybersecurity at the Dutch central bank, said the regulator believes companies could “learn something from virtual currencies” like bitcoin.

“Technological innovations in the financial industry and in payment traffic can entail huge opportunities and large benefits for society,” Gunnink said.

The central bank downplayed the notions that bitcoin could replace legal tender – the euro –  in an official statement on virtual currencies on May 8.

ABN Amro is one bank that has taken the bitcoin community aboard. Paul Iske, head of the bank’s innovation center, said virtual currencies are “to some extent a Black Swan.”

“We’re not excluding them,” and the bank will assess each proposition separately, he said. “That’s the kind of bank we want to be.”

Bitcoin enthusiasts nonetheless face resistance in the Netherlands, as the country is already part of a European payment system, and banks power a popular and cheap online direct-debiting system.

“The Netherlands is among the absolute front runners,” ING’s Buitenhek said. “I think we will be and remain pioneers, just as bitcoin is rising very rapidly here compared to other countries.”

Bitcoin Boulevard

Amsterdam is even home to a “Bitcoin Boulevard.” That’s right. At 17:57 on March 20th – the start of spring in the Netherlands – all of the businesses along two canada-side streets in the city center began accepting bitcoin; that is, nine restaurants and one art gallery.

Unofficially the two streets running along the canal – Bierkade and Groenewegje – will also change their name to ‘Bitcoin Boulevard’.

Of the restaurants accepting bitcoin, one is a beer hall with more than 160 beers, one’s a cafe and one’s a vegetarian restaurant.  The M Restaurant will also be holding a daily bitcoin ‘happy hour’, when all guests paying with the digital currency receive a discount.

The street has celebrated two successful months.

Bitcoin is a harbor in the current global economic storm. People who learn about the technology will have an inside look at the future, and can live well by being on top of their stuff.

Justin O’Connell is the CEO of GoldSilverBitcoin, Head Researcher at Dollar Vigilante, author of  Bitcoinomics as well as a co-host at Our Very Own Special Show, a lifestyle podcast about music, news, life and other topics.

Young People Would Rather Bank With Google Or Amazon Than Big Banks

[heading]Young People Would Rather Bank With Google Or Amazon Than Big Banks[/heading]

Originally appeared at Ounce.Me – the home of the Pizza/BTC ratio

While people would traditionally go in and meet face-to-face with a bank teller, as we’ve all done, there’s a new gig in town: self-checkout.

Today, lines are forming for self-checkout banking. Only this process is much easier than the self-checkout of the grocery store because it’s online. And it’s not just bitcoin that is attempting to get the job done.

Young people are gravitating towards a world in which the bank-tellers chair behind the glass is vacant, meaning no need for actual bank branches. As Buzzfeed’s Matt Zeitlin states, “more Minority Report than It’s A Wonderful Life.” Read More

Bilderberger Speaks Out, Bitcoin NOT Discussed At Historic Meeting

[heading]Bilderberger Speaks Out, Bitcoin NOT Discussed At Historic Meeting[/heading]

This year’s Bilderberg meeting has come to an end, and this, the sixtieth anniversary of the first Bilderberg meeting was historical. A lot of the footage was caught by Julia Tourianski of Brave The World. It seems that the head of Parliament in the Netherlands, Diederik Samson, served as the first ever face of Bilderberg.

What sentences fell from Samson’s lips? Some interesting ones, some entertaining ones, some predictable ones. There will likely be many videos floating around on YouTube of Mr. Samson, and he knew this would soon be the case. I highly recommend you watch them if you’re interested in modern history, especially Julia’s video, posted below. Read More