eBay vs. CRIMEX: Will the Real Precious Metal Price Please Stand Up?

eBay Silver Maple Price Summary for Sunday, November 30, 2008

This screenshot is courtesy of the chaps and www.24hgold.com who I believe have performed a huge service to precious metal investors the world over with a fantastic new price discovery website that monitors eBay transactions for gold and silver coins and bars. The results in terms of the per ounce premium price disconnect (especially for Canadians) are astounding. As of this weekend (Sunday, Nov 30/2008) the per ounce price differentials are as follows:

• GOLD
• COMEX Spot: $817.83 US / $1013.14 CDN
• AVG. EBAY 1Oz Maple Leaf Price For Friday: $1263.81 CDN
• That’s a 25% Premium over Spot, or $250 CDN / Ounce !!

And the price differential of CRIMEX spot vs. eBay silver, especially Maples, is more than double…

• SILVER
• COMEX Spot: $10.31 US / $12.78 CDN
• AVG EBAY 1Oz Maple Leaf Price For Friday: $29.74 CDN
• That’s a 117% Premium Over Spot, or $16.96 CDN / Ounce !!!

The website does point out the difficulty is separating out shipping prices from eBay bids, so some shipping cost is probably worked into the eBay price. Also, prices for gold and silver bars are closer to the spot price, but still much, much higher.

I encourage you to check out this fantastic new service at: http://www.24hgold.com/english/buy_sell_silver_coins.aspx?co_id=2

Now if only some clever individual would start a banner charting service for this so we can rid ourselves of the ridiculous Kitco CRIMEX spot price spam graph …

Pregnant Pause On Air After the Elephant in the Room Speaketh

CNBC: Gold spike to “at least double the price [i.e. $1700/oz] in very, very short period”

Within the gold complex, there is a disparity between the paper market and the physical market, notes Jurg Kiener, CEO of Swiss Asia Capital. He tells CNBC’s Maura Fogarty & Rebecca Meehan that if the paper market collapses, gold prices may double very quickly.

http://www.cnbc.com/id/15840232?video=880574352

Partial Transcript:

MEEHAN: I’m kind of surprised at where gold is trading, however because even though we see gold as a safe haven status given all the volatility in the markets lately gold hasn’t really reacted as positively. Why not?

KIENER: I think the paper market has really traded as positively as one might expect. When I say the paper market of gold I talk about COMEX and LME. If you look at the physical market, the physical market has been on fire. It’s getting very hard to buy one-ounce coins or smaller bars. Most jewellery shops have been running out. You can try some of the major banks. So we have a supply problem in supplying the feed. So what you have right now is a two-tier market. A paper market on Wall Street where the bankers continue to gamble like everything else, and the real market where gold is red hot and people can’t get physical.

[DEAD AIR FOR ABOUT THREE SECONDS]

MEEHAN: It’s Rebecca in Europe here. So what does that mean? That trend in the physical market. What does that mean for the gold market in general. If the economic conditions continue to deteriorate or stay as they are what does that mean for the gold market in general?

KIENER: First of all the stability in the financial markets where governments are destabilizing the savers, basically the person in power of the money, and if you get interest rate reductions almost close to zero then owning gold can probably be the best thing you can have. That’s going to put pressure on the paper markets, the LME and COMEX, and what I would like to see is actually some of the paper contracts defaulting, like you had the CDOs and the CDSs and whatever else out there defaulting I think we are going to get very close to see an environment where you are going to see the paper contracts on precious metal defaulting, and with that you are going to get a massive price increase in the overall prices of precious metal.

FOGARTY: Okay, were at 863 right now for COMEX gold. We checked on spot earlier around the 860 level as well. If you expect to see a spike when we see the paper market break down, in other words, where would that spike lead us to?

KIENER: At least to double the price.

FOGARTY: In… within a short amount of time?

KIENER: Very, very short period. It will spike up quite fast. If you think we had an oil rally going from $65/70 to $140 in nine months. I think you can double in gold in basically a much shorter period because the market is much smaller.

[And where gold goes silver follows.]

Whisperings of a New Gold-Backed Global Currency From the BRIC Countries Could Decimate Both the U.S. Dollar and the Euro

With the BRIC (Brazil, Russia, India, China) economies in much stronger shape domestically compared to the sickly U.S. and their respective markets already pricing in much of the coming collapse yet to really hit the U.S. stocks I wonder when these countries will band together to form a new currency of their own? They may as well, since many global financial instruments already treat them as an economic unit (case in point).

And if these countries were to form a new global currency that’s 100% backed by gold (like the U.S. dollar was from 1792 to 1971) then I suspect we would witness a global stampede out of Euros and U.S. Federal Reserve Notes into this new golden currency backed by the strongest economies across the globe. Why not call the new currency a bric? In English, the name alludes to something concrete, sound, stable, and badly needed in these uncertain times. The gold-backing shouldn’t be B.S., though. Any Tom, Dick or Harry needs to know he can go to the bank with a Bric note and know he can walk out with gold.

From Brazil: Although its stock market is beaten up, its domestic economy is still very strong.
Brazil expects the odd sniffle, but nothing serious

• Brazil has not decoupled itself from the rest of the world: its stock market has fallen fairly much in line with other markets but, unlike in the past, the turmoil elsewhere has not been amplified.
• Brazil has been able to maintain foreign reserves in excess of $200bn to help it weather the storm.

From Russia: Now a major player in the world energy scene, Russia’s central bank has recently been stockpiling gold.
Time for a gold rouble?

• The decision by the US government to inject $700 billion into the financial system means that the already gigantic annual budget deficit of the American state (previously some $450 billion a year) will now rise by a factor of three. The total state debt of the USA will rise to well over $11 trillion. It is obvious that such a colossal debt can never be repaid.
• Russian leaders might also consider making their own currency, the rouble, convertible into gold.

From India: The World Gold Council says that Indian citizens possess the most personally-owned gold in the world. And that love for gold is now stronger than ever.
Indian customers lured by gold’s lower price

• UBS, one of the largest gold exporters to India, says it has seen a spike in sales. John Reade, UBS metals strategist, says that the near-absence of jewellery demand in India between August 2007 and July left the local market largely de-stocked, “hence the tremendous pickup in demand over the past five weeks.”

From China: Also big gold lovers, the Chinese government is now openly questioning the use of U.S. Dollars as the default world currency.
China paper urges new currency order after “financial tsunami”

• Threatened by a “financial tsunami,” the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.
• “The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States.”

China Gets Protectionist: Cuts Off Inter-bank Lending to U.S. Banks Only

South China Morning Post: China stops its banks from lending to U.S. banks

• Mainland regulators have told domestic banks to stop lending to United States financial institutions in the interbank market in a bid to prevent possible losses during the financial crisis, industry sources said yesterday.
• The ban from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to US banks but not to banks from other countries, a source said.
• Mainland banks had US$9.8 billion in exposure to US subprime loans at the end of last year and US$25 billion to Fannie Mae and Freddie Mac by June 30.

Devil in the Details: ‘Sinister’ $700-Billion Bailout == ‘There Goes Your Country’

Congressman Ron Paul: Time is running out

Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

…

Then there’s this: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.“ Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

…

There goes your country.

Money 101

Since we will all spend most of our lives trying to earn money it behooves us to actually know what money is. IMHO, absorbing the content of this video should be required for every man, woman and child on the globe. The time spent viewing this 45-minute video is well worth it.

Brace Yourself, Vancouver: GasBuddy Chart Indicates $2.25/liter Gas Price Is On The Way

My 2-Bits: Up until a year ago, Vancouver’s gas price and crude oil tracked pretty closely … check where it’s at now. Something’s gotta give: either the pump price is going up or the barrel price is going down. (My gut says the former. Does anything go down these days?)

P.S. The six-year chart looks even worse: $3.00/liter+

Is the Energizer Battery Company Charging 300% Too Much for Rechargeables?

[Environmental News Network] Energizer “D” Battery Exposed

” These inferior ‘D’ batteries cost around $25 for a pack of two. These are known as ‘Energizer E2 Rechargeable Batteries, Size D,’ rated at 2500 mAh each. (mAh is a measure of how much power is contained in the battery. It’s sort of like the fuel tank in your car. The bigger the number, the more power the battery delivers.) … By comparison, an Energizer AA battery rated at the exact same capacity — 2500 mAh — costs about THREE dollars! “

My 2-Bits:

• Wikipedia says an average D-Cell Battery should provide 12,000 mA capacity, so why is the infamous Energizer company’s rechargeable D-Cell only 2,500mA?
• The company’s website says these rechargeables are “highly recommended for high drain or frequently used devices.”
• Oh, and it’s not like real rechargeable D-Cells are impossible to make. PowerEx and Powerizer both make 10,000+ mA rechargeable D-Cells.

Shining a Light on Canada’s Fake Citizens

[Financial Post] Canada: sucker nation part III

” I had dinner with six good buddies, all from `questionable’ foreign countries [Pakistan, Syria], all great guys and I found out they were all `Canadian’,” he said. ‘None of these guys has spent more than a few weeks in Canada. Yet four were citizens and two were permanent residents who will become full blown citizens shortly.’ … ‘They come from rich families in corrupt countries and they travel the world freely on our passports, without ever paying a dime in tax.’ “

Are Safe Deposit Boxes Not Only Useless but Dangerously Misleading?

This article is pegged to a current class-action lawsuit against the State of California. It appears state reps have admitted to seizing the contents of safe-deposit boxes under the excuse that the contents had been abandoned. The article also cites internal state memos that admit to wanting to reduce the time frame for abandonment from its current three years to only one (it used to be 15) and a desire to avoid alerting deposit-box owners lest they try to claim it. The article also shows how pervasive this problem is throughout other states within the union.

Stories of state seizures of safe-deposit boxes remind me of a blog post about a year back from someone who apparently resigned from a bank soon after attending a training course conducted by the Department of Homeland Security. According to the post: “At this point they were told that no weapons, cash, gold, or silver will be allowed to leave the bank – only various paperwork will be given to its owners. After discussing the matter with them at length, she and the other employees were then told not to discuss the subject with anyone.”

And two years ago there were also excerpts from a DHS memo circulating stating that DHS Agents:
” shall, at the discretion of the agent supervising the search, remove, photograph or seize as evidence” any of the following items”bar gold, gold coins, firearms of any kind unless manufactured prior to 1878, documents such as passports or foreign bank account records, pornography or any material that, in the opinion of the agent, shall be deemed of to be of a contraband nature. “

The posting goes on state that over 1500 seizures had already taken place within the state of California alone. That was over two years ago, so God knows how many more people have lost their nest eggs since then. Many may not even be aware of the loss yet since safe-deposit boxes are often left alone for years.

Perhaps the folks at DHS need to be sent back to school to learn the tenets of the United States Consitution, particularly when it comes to protection against search and seizure. After all, are they all not swearing an oath to preserve and protect this brilliant document?

Does Anybody Believe Government (Statistics) Anymore?

[Huffington Post] Washington’s Great “No Inflation” Hoax

” The New York Times’ consumer reporter, W.P. Dunleavy, wrote on May 3 that his own groceries now cost $587 a month, up from $400 a year earlier. That’s a 40 percent increase. … Oil is up over 80 percent in the last twelve months. … Therein lies the danger. If the current inflation rate is really 6-9 percent instead of the 2-3 percent claimed by government … would identify an economy that was deteriorating and shrinking, not growing. “

My 2-Bits: Personally I think John Williams over at ShadowStats.com is the closest to reality at 10%+. BTW, blatant government lies about critical economic statistics as one of the warning signs of hyperinflation.

A Ringing Endorsement for Bernanke’s ‘Flexible’ Policies from the Governor of … the Bank of Zimbabwe?

[Safe Haven] I Swear I Can’t Make This Up
” That is precisely the path that we began over 4 years ago in pursuit of our national interest and we have not wavered on that critical path despite the untold misunderstanding, vilification, and demonization we have endured from across the political divide. “
My 2-Bits: Oh Zimbabwe had its troubles with failing banks, says the Bank’s Governor Dr. Gono, but that was several years (and many dollar-denominated decimals) ago now. He assures us that the Zimbabwe economy is moving along just swimmingly and the same will happen for the US, UK, Canada, and Europe so don’t worry. You will see. The good doctor hasn’t been wrong yet!

‘FIRE’ is now Toast so What’s the Next Bubble? Health Care? Biotech? Alternative Energy? Web 2.0? (The iTulip Guru’s Prediction May Surprise You)

[Harpers] The next bubble: Priming the markets for tomorrow’s big crash
” Because all asset hyperinflations revert to the mean, we can expect housing prices to decline roughly 38 percent from their peak as they return to something closer to the historical rate of monetary inflation. If the rate of decline stabilizes at between 6 and 7 percent each year, the correction has about six years to go before things stabilize, leaving the FIRE economy in need of $12 trillion. Where will that money be found? “

My 2-Bits: If you don’t know what FIRE is then the article is a must-read. While doing so please bear in mind Mr. Janzen’s current occupations, but his track record is pretty good and the logic presented sound, IMO.

Common Sense from the Globe and Mail (Finally)

[Report on Business] Inflation’s rising, so pay down debt now

” To understand what’s ahead, you have to look past the current economic environment into 2009 and 2010. Two themes to think about: rising inflation – we’re talking serious inflation here – and rising interest rates. “

Economic Think Tank: Bank of Canada Is Deliberately Devaluing the Loonie

[Canada.com] Bank of Canada trying to get loonie down, says U.S. think-tank

” While the bank will not say this, we continue to believe that it seeks to cheapen the loonie against the U.S. dollar,” Carl Weinberg, economist and head of High Frequency Economics, said in an analysis. “This requires aggressive rate cuts to catch up with the Fed.”

It’s Official: Morgan Stanley Recommends You Sell this Bank Rally

[Reuters] Morgan Stanley see big bank woes just beginning

” We think we are only in the third inning of the credit cycle and expect this credit cycle will be worse than (the slump in) 1990-91.”