Sufiy's  Instablog

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Picture is courtesy of Jim Sinclair.

Something is happening for real with the Physical Gold Shortage behind the curtain this time and it can not be contained any more. JP Morgan's Gold Vault is close to be blown up - will all bullion system be under threat after that?

ZeroHedge:

With a massive 6,208 (or 80% of the total in the entire Comex system) Customer Delivery issues outstanding against JPM so far in June alone, many have been wondering - how and when will the firm reconcile what is seemingly more demand for JPM vaulted gold than the firm has in its possession?

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While we still don't have the answer, what we do know is that as of an hour ago when the Comex released its daily vault depository statistics, JPM has said goodbye to another 28.4% of all of its vaulted gold - the largest one day withdrawal since April 25, the result of the departure of 61.5% of its Eligible gold, or 218k troy oz, as hundreds of thousands of registered ounces in the bast few weeks have seen warrant detachment.

Which means that as of last night, total gold held by JPM has fallen to a new fresh all time low of just 550k ounces, down from 768K the day before, and total eligible gold of only 136,380 troy oz in inventory (just over 4 metric tonnes) - also a record low.

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Whoever is "running the JPM vault" shows no sign of relenting. At this pace, the world's biggest gold vault located below 1 CMP, and just next to the Fed's own gold vault, will be empty in about 1.5-2 months."

From Peak Prosperity:

Precious metals investors' heartbreak may soon be over

"There's no way to sugarcoat the dismal performance of the precious metals in recent months. But a revisitation of the reasons for owning them reveals no cracks in the underlying thesis for doing so.

In fact, there are a number of new compelling developments arguing that the long heartbreak for gold and silver holders will soon be over.

The past two years have not been kind to holders of the precious metals. The price of gold is down over $500/oz since the record high (nominal) price it hit in August of 2011. That's a decline of 28%. Silver has seen a decline of 56% over the same period.

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A healthy amount of that decline came in the past seven months, which have pretty much seen a steady price deflation punctuated by sharp (and historic) downdrafts:

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On top of these grim charts, daily headlines touting, often with delight, the demise of gold appear nearly everywhere in the media.

• NOURIEL ROUBINI: 6 Reasons Why Gold Will Plunge to $1,000
• 10 Countries That Are Losing a Fortune on the Collapse in Gold
• The Shine Is Off
• Gold U. Takes It on the Chin

And forget about PM mining stocks. They have been absolute widow-makers for investors:

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It's hard to argue that PM mining stocks aren't the most hated sector in today's markets. The chart below shows that last month, the bullish sentiment on gold miners dropped to 0%. Can't go any lower than that:

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Wasn't reckless central-bank money printing going to flood the world with paper currency, sending gold prices -and those of its "poor man's" sister, silver - to the moon? Weren't the markets going to crack as the unresolved economic and financial rot in the U.S., EU, and Japanese systems became further exposed, sending capital fleeing into the bullion market and driving prices much, much higher? Weren't escalating mining costs going to march up the price floor for the precious metals?

Why haven't any of these scenarios happened? Were we wrong in our reasons for purchasing gold and silver?

Are we the clueless patsy at the poker table?

These are very understandable questions to be asking. You wouldn't be human if you didn't.

So, it's wise to return to the #1 lesson of investing: Never fall in love with your positions. Be sure to question your rationale regularly and often. Remove emotion from your decision-making, look to what the data tells you, and continually ask yourself: Ignoring my past decisions, would I purchase this investment today? If the answer is no, lightening up your position is almost always the right decision.

Chris and I follow the precious metals markets on a daily basis, and we frequently challenge the logic behind our support of them. But at this time, we can find nothing - nothing - that has happened over the past two years that invalidates the principal reasons we've laid out for owning precious metals. You can review these reasons in detail on our foundational report, The Screaming Fundamentals for Owning Gold & Silver.

The hard truth for us investors is that secular market trends take time to play out. Nothing moves in a straight line. And they are many false signals along the way. There are no sure bets, no risk-free winning options to pick.

But the good news is that the laws of physics and rationality always prevail in the end. If you can identify the right endgame and position yourself for it patiently, the messy volatility along the way really won't mean much in the big picture.

Let's look at the key reasons why we originally recommended that investors look to the precious metals as a safeguard:

• Negative real interest rates
• Fiscal deficit spending and unserviceable sovereign debts
• Loose, if not reckless, monetary policies
• The price of newly mined ounces continues to climb higher and higher, due both to reduced ore grades and higher costs for fuel and equipment.

Negative real interest rates have always been supportive of gold prices. While admittedly that's not been the case for the past two years, we now see that historic relationship re-expressing itself.

After all, when the return on cash savings is virtually nothing and the money printers are running, inflation eats away at fiat purchasing power. Gold, as money, offers protection from this.

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Perhaps things are different this time, but we're thinking not.

The degree of fiscal and monetary recklessness has taken us by surprise, both for the intensity of the actions already taken, but also for the fact that financial markets have adjusted to the practices and now treat them as normal, if not desirable. While the U.S. deficit has been declining from its record highs, much of that is due to accounting shenanigans, all while our dangerously high debt-to-GDP ratio (as well as those of most other developed countries) continues to worsen.

Mining costs have been on a steady march upwards over the past decade, setting an average "all-in" cost floor now very close to the current price of gold:

Even exploration costs have skyrocketed, which, importantly, is happening in parallel with a marked decrease in discovery volumes:

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Gold, it seems, is getting both harder to find and harder to get out of the ground.

And to the above list of original fundamentals, we must sadly add several new drivers:

• MF Global proving that client accounts can be looted and then drawn into a lengthy and unsatisfying bankruptcy/creditor process
• Cyprus proving that the banking system intends to make depositors pay for its mistakes
• Politicians openly calling for various wealth taxes to be levied on anybody who has managed (dared? bothered?) to save up funds

And one last big one: a new secular change in rising interest rates that threatens to create havoc in world economies and financial markets across the world.

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After a decade of low and declining interest rates, yields are back on the rise. The low cost of debt that the markets have become used to has created a worldwide bubble in bond prices, about which experts like Bill Gross have been increasingly vocal in issuing dire warnings. A popping of this bubble will increase borrowing rates for governments/business/consumers, depress home prices, make mortgages more expensive, and basically act like kryptonite to any "recovery" in the world economy.

Wall Street has certainly taken notice. And it's worried about the implications:

In a Shift, Interest Rates Are Rising (The New York Times)
"I think you all should be ready, because rates are going to go up," Jamie Dimon, the chief executive of JPMorgan Chase, told a financial industry conference at the Waldorf-Astoria Hotel in Manhattan on Tuesday.

As investors brace themselves for a new era of higher interest rates, global markets in bonds, currencies and stocks have experienced spasms of turmoil.

Bond bubble threatens financial system, Bank of England director warns (the guardian)
A key Bank of England policymaker has warned of the risks to global financial stability when "the biggest bond bubble in history" bursts.

"Let's be clear. We've intentionally blown the biggest government bond bubble in history," Haldane said. "We need to be vigilant to the consequences of that bubble deflating more quickly than [we] might otherwise have wanted."

60% chance of global recession: Pimco (CNN Money)
Pimco's founder and co-chief investment officer, Bill Gross, argued last month that central banks' ultra low interest rate policies and ongoing bond-buying programs have resulted in a financial system that is "beginning to resemble a leukemia patient with New Age chemotherapy, desperately attempting to cure an economy that requires structural as opposed to monetary solutions."

Lastly, there is the wild-card possibility - improbable, but certainly worth considering because of the gains to be had - of gold being re-monetized as a means of balancing and settling international accounts. Should that transpire, gold will be worth many multiples of today's value.

For all the reasons above, the bruised precious metal investors out there should still sleep well at night, secure that the foundational rationale for holding gold and silver remains intact.

But, excitingly, there are numerous new compelling new reasons to hold on to - or add to - your precious metals stack.

In Part II: The New Game Changers for Gold & Silver, we delve into the very positive, very noteworthy developments afoot, including:

• A seismic change in the commercial trader positions, returning to a bullish stance not seen since 2004 (and changing the incentives for any potential price manipulators)
• "Unprecedented' retail investor appetite for bullion
• Accelerating East-to-West demand for physical gold and silver
• Continued accumulation by world central banks
• Shockingly depleted Comex inventories available for delivery

And we revisit the signals to watch for that will indicate that the secular bull market has run its course (none of which are remotely visible at this time.)

Trying times like these are designed to wear you down and force weaker hands to capitulate before reversing. We remain steadfast in our conviction that the precious metals investment thesis remains healthily intact, and that the real price action in the gold and silver story has yet to be seen. And we see increasing evidence indicating that the next big upward reversal is near at hand, which we detail in Part II.

Stay disciplined."

Junior miners are ready to follow the suppressed Gold now:

"We have the official confirmation that Los Azules is NOT on a fire sale any more by McEwen Mining. This asset will see its day and proper valuation now, starting with the new PEA to be released in Q3 of this year.

McEwen Mining: "As a result of our lower capital requirements, the rationale for selling Los Azules has effectively been eliminated. As a result, Los Azules has been removed from the sale process, which began in January. Los Azules is a significant copper deposit that we believe will command a better price in the future."

Please Note our Legal Disclaimer on the Blog, including, but Not limited to:

There are NO Qualified Persons among the authors of this blog as it is defined by NI 43-101, we were NOT able to verify and check any provided information in the articles, news releases or on the links embedded on this blog; you must NOT rely in any sense on any of this information in order to make any resource or value calculation, or attribute any particular value or Price Target to any discussed securities.

We Do Not own any content in the third parties' articles, news releases, videos or on the links embedded on this blog; any opinions - including, but not limited to the resource estimations, valuations, target prices and particular recommendations on any securities expressed there - are subject to the disclosure provided by those third parties and are NOT verified, approved or endorsed by the authors of this blog in any way.

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advice on this blog and there is no solicitation to buy or sell any particular company.

"Vancouver B.C. April 3, 2013: International Lithium Corp. ("ILC" or the "Company") (ILC: TSX-V) is pleased to announce lithium and associated rare metal assay results from the remaining eight drill holes of the recent 19 hole (2,075 metre) diamond drill program on the lithium and rare metals pegmatite field spanning the contiguous Fairservice and Mavis Lake claim blocks near Dryden, Ontario.

Key Highlights

1.34% Li2O over 8.50m intersected in MF-12-33

1.05% Li2O over 10.85m intersected in MF-12-34

1.06% Li2O over 10.75m intersected in MF-12-36"

International Lithium Presentation.

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Jun 05, 2013

Vancouver B.C. June 5, 2013: International Lithium Corp. ("ILC" or the "Company") (ILC: TSX-V) is pleased to announce that Ganfeng Lithium Co. Ltd. ("Ganfeng Lithium") has advanced to ILC USD$1,199,000, being the first advance of a total USD$2,289,000 loan committed to ILC from Ganfeng Lithium, as previously announced by the Company on May 10, 2013. The loan advance bears interest of 10 percent per annum, payable quarterly.

In lieu of receiving repayment of the loan, Ganfeng Lithium may elect to convert into an interest in the Mariana Property. The loan agreement contemplates that Ganfeng Lithium may convert what would otherwise be ILC's repayment obligation for the first loan advance into a 26% interest in ILC's rights in the Mariana Property. Likewise, instead of receiving repayment of the second advance, Ganfeng Lithium may convert into a 25% interest in ILC's rights to the Mariana Property, for a total interest of 51%. If Ganfeng Lithium elects to convert into a 51% property interest, at that time, the parties would enter into a joint venture relationship for the operation of the Mariana Property.

The Company has used the loan proceeds to make the underlying property payment to the vendors of the Mariana Property and related costs.

About Ganfeng Lithium Co. Ltd.

Ganfeng Lithium based in Xinyu, Jiangxi Province, China, is a professional producer of lithium products which has developed a comprehensive product chain, including lithium metal and alloys, inorganic and organic lithium chemicals, supplies a wide range of lithium products for primary and secondary lithium battery market, pharmaceutical and new material industries. Ganfeng Lithium's principal market is in China with international exports to Europe, Japan, the USA and India. Ganfeng Lithium was founded in 2000 and listed on the Shenzhen Stock Exchange in August 2010, notably as the first publicly listed Lithium Company in China and has experienced rapid continuous growth over the last 12 years.

About International Lithium Corp.

International Lithium Corp. is an exploration company with an outstanding portfolio of projects, strong management ownership, robust financial support and a strategic partner and keystone investor Ganfeng Lithium Co. Ltd., a leading China based lithium product manufacturer.

The Company's primary focus is the Mariana lithium-potash brine project in Argentina within the renowned South American "Lithium Belt" that is the host to the vast majority of Global lithium resources, reserves and production. The 160 square kilometre Mariana project strategically encompasses an entire mineral rich evaporate basin that ranks as one of the more prospective salars or 'salt lakes" in the region.

Complementing the Company's lithium brine projects are rare metals pegmatite properties in Canada and Ireland that have recently reported positive geochemical results (latest news releases dated April 3,2013 and April 9, 2013). With the increasing demand for high tech rechargeable batteries used in vehicle propulsion technologies and portable electronics, lithium is paramount to tomorrow's "green-tech" economy. By positioning itself with solid development partners and acquiring high quality grass roots projects at an early stage of exploration, ILC aims to be the green tech resource explorer of choice for investors and build value for its shareholders.

John Harrop, PGeo, FGS, and Vice President, Exploration of the Company is a "Qualified Person" as defined under NI 43-101 has reviewed and approved the technical content of this news release.

On behalf of the Board of Directors,

KirillKlip

President, International Lithium Corp.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Statements in this press release other than purely historical information, historical estimates should not be relied upon, including statements relating to the Company's future plans and objectives or expected results, are forward-looking statements. News release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.

Please Note our Legal Disclaimer on the Blog, including, but Not limited to:

There are NO Qualified Persons among the authors of this blog as it is defined by NI 43-101, we were NOT able to verify and check any provided information in the articles, news releases or on the links embedded on this blog; you must NOT rely in any sense on any of this information in order to make any resource or value calculation, or attribute any particular value or Price Target to any discussed securities.

We Do Not own any content in the third parties' articles, news releases, videos or on the links embedded on this blog; any opinions - including, but not limited to the resource estimations, valuations, target prices and particular recommendations on any securities expressed there - are subject to the disclosure provided by those third parties and are NOT verified, approved or endorsed by the authors of this blog in any way.

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advice on this blog and there is no solicitation to buy or sell any particular company.

Watch The Video:

Eric Sprott On Gold, Financial System And FED's "Tampering": "It's A Joke".

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"Eric Sprott is talking about the demand for physical gold, Central Banks and that the "Gold Raid Has "Unleashed A Torrent Of Buying". All the Talk about the FED Tapering the QE will stay as it is: just Words - you can not print prosperity, Wealth or Gold, but FED will continue its Tampering with the basic economics and Laws of Supply and Demand. Watch the Japan Bond Market, which is totally out of control to get some clues where U.S. Treasury market is heading next."

Eric Sprott: "Gold Raid Has "Unleashed A Torrent Of Buying".

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Grant Williams: Understanding Gold - The Gold Price Is NOT The Price of Gold!

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Some gold and silver miners are showing signs of life already, others to follow.

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TNR Gold Corp. Files Technical Report on Shotgun Gold Project, Alaska TNR.v