“Furthermore, in the main, historians educated as Keynesians and monetarists do not understand the economic history of money, let alone the difference between a gold standard and a gold-exchange standard. These similar sounding monetary systems must be defined and the differences between them noted, for anyone to have the slimmest chance of understanding this vital subject, and its relevance to the situation today…
…The pricing of financial assets, and today’s extraordinarily low interest rates indicate that a flight from the dollar is the last thing expected in financial markets. If they were still alive, de Gaulle and his economic advisor, Jacques Rueff, would be instructing the ECB, as successor to the Bank of France, to dump all dollars for gold immediately. And probably to dump all other foreign fiat currencies for gold as well. However, today, it is likely that other actors will blow the whistle on the dollar, such as the Chinese, and the Russians.”
The quotes above are from Alasdair Macleod’s piercing essay on the gold standard and the mechanics underlying an inevitable collapse of the U.S. dollar: Why A Dollar Collapse Is Inevitable. No one can claim to understand the modern monetary system without reading this piece from Macleod. It also explains by Modern Monetary Theorists are full of shit.
As the antithesis to the dollar, gold will soar. I was looking at some charts with a colleague earlier this week and was startled to discover that a very quiet bull move has begun in the miners.
Like the move that began in late 2015, it seems that some of the junior miners per GDXJ have gotten the party going. As you can see in the chart below, GDXJ is up 12.8% since December 7, 2017. GDX is up 9.5% since March 1st. Some individual stocks are quite a bit more than the indices: AEM up 18% since March 1st, EXK up 49.7% since Feb 9th, Bonterra up 25% since March 1st, etc.
I’ve had several stocks in my Mining Stock Journal that have outperformed the sector my several multiples. Some of them are risky junior exploration stocks and some are lower-risk producers. A good example is EXK, which I presented in the August 24, 2017 issue at $2.16. It closed Friday at $3.06, up 41% from my buy recommendation. This is just one out of many examples. You can learn more about the Mining Stock Journal here: Mining Stock Journal Information.
Below is a must-read essay from a friend and colleague of mine, Chris Marcus, who is a former options trader (Wharton MBA) that now lives in Denver. Many of you may not be aware, but Mark Cuban made his fortune the old fashioned way – he was lucky to be in the right place at the right time. Cuban owned Broadcast.com (a relic of the 1990’s tech bubble). Yahoo.com used tech bubble stock “wampum” to acquire Broadcast.com. Broadcast.com was no longer around a few years later.
If anyone knows how to get lucky off a worthless asset, it’s Mark Cuban. Currently he spends his time running the Dallas Mavericks into the ground. Chris Marcus eloquently presents the counter-argument to Mark Cuban’s absurd comments about gold in a Kitco.com interview.
During my time training to be an equity options trader, the shop I worked for required that I log 100 hours of poker training. Under the belief that there are great similarities between the decision-making required for poker, and that required for successfully trading the financial markets.
Along those lines, there was a particular lesson that always stood out to me. That while the numbers and percentages are important in both sciences, understanding the people you are playing against is equally, if not a more important element of the game.
Because you might think you’re right, and the person you’re trading against might think they’re right. But if you can identify why they’re wrong and spot the flaw in their thinking, that can really arm you with some confidence in your bet.
If you’ve seen the movie The Big Short, you may remember the scene where right before one of the funds was getting ready to increase the size of their bet against the mortgage industry, they were a little bit concerned.
But to ease those fears, the Deutsche Bank character played by Ryan Gosling took the fund managers to meet the people they were actually trading against. Because once they heard how the people they were trading against were completely caught up in the mania and missing the bigger picture, it gave them the confidence to pile on their trade in even bigger size.
Along those lines, for those investing in gold and silver, there were some interesting recent comments from Dallas Mavericks owner Mark Cuban. That are somewhat reflective of the mainstream view of gold, and similar to the rhetoric you hear out of the central banks.
Which in my own personal opinion comes as extremely fantastic news for those who own precious metals and wonder whether there is still upside to the pricing.
Cuban was interviewed by Daniela Cambone of kitco.com. And with all due respect to Mr. Cuban, some of his answers were so far detached from the reality I’m living in that the more I heard him talk, the more I was tempted to dial Andy Schectman and buy more gold.
Consider the following:
Cambone: Where do you think are some of the safest bets for your money right now?
Cuban: If you need safe, just put the money in the bank. (Editor side note – seems safe to say at this point that Cuban likely hasn’t been reading Von Mises during halftime at the Mavs games).
Cambone: Gold, up 2.5% for the first quarter. I know in the past you’ve seen it as a speculative bet. How do you see it today?
Cuban: I hate gold. Gold is a religion. There’s some fundamental value to gold, but everything else…it’s a collectible.
Cambone: Well hate is a strong word. The miners too?
Cuban: Individually as people, I heard they’re great people (he says giggling). But as an investment, hate is not strong enough. Hate with an extreme prejudice.
Cambone: So you don’t see gold as money.
Cuban: I do not see it as an alternative to currency. No not at all.
Cambone: Do you feel the same about silver, palladium, or platinum?
Cuban: I don’t know those others as well. But those are pretty much based off their intrinsic value as much as I can tell.
Cambone: So you’re in the camp of gold is just a pet rock.
Which makes his current comments all the more baffling. Although perhaps Cuban doesn’t see any cause for concern with rising interest rates and foreign creditors walking away from the dollar system.
Ultimately what Cuban thinks about gold may be irrelevant. Yet to the degree that there are many in the markets who share a similar line of thinking, it’s worth registering that if you own gold, this profile and argument is essentially what you’re betting against.
Personally I receive it as great news. Because in my career, the best trades are not when a person thinks they’re right and puts the trade on. But when a person thinks they’re right, knows why the other person is betting against them, and can spot the flaw in that person’s logic.
I’ll leave it up to you to decide whether Cuban’s argument makes much sense. But his views are generally reflective of what the anti-gold crowd is thinking, and it makes me feel better than ever about owning physical gold and silver. (Article LINK)
As students of the gold market know, the paper gold markets in New York and London function as price manipulation mechanisms used by the western Central Banks in their effort to control the price of gold. As the physical demand from the eastern hemisphere pushes the price higher, the operators of the LBMA and Comex print large quantities of paper gold (gold futures, forwards) in order to satisfy the demand of hedge funds, which use futures to chase price momentum (up and down) in gold and silver.
Gold had been trading in a sideways pattern since mid-September between $1320 and $1260:
The graph above is derived from the Comex “continuous contract” end of day price. The continuous contract is not an actual contract. It is rather a price measure that “splices together” the front-month contracts over time for charting purposes.
As you can see, gold has formed a nice uptrend from late December 2016 that seems to have “stalled” since mid-September. I watch the Comex gold futures open interest level and the COT “structure,” where COT structure is the big bank net short position vs the hedge fund net long position, in order to form an opinion on where I think the price of gold is headed. When the open interest in gold futures is at an extreme high level, combined with a bank net short position that is also extremely high, it almost always implies a price-takedown is coming.
Since mid-September, however, the gold futures open interest has stubbornly persisted above 500,000 contracts until the last week. Similarly, the big bank net short and the hedge fund net long positions have persisted at extremes over this time period. This is because, contrary to the “fake news” anti-gold propaganda spewing from U.S. financial media (Bloomberg and reuters specifically), physical “consumption” in the eastern hemisphere (India, China, Russia, Turkey, etc) has been unexpectedly strong. Evidence of this is in direct data that comes from these countries and from the unusually high level of Privately Negotiated and Exchange For Physical transactions occurring on the Comex and the LBMA. These are “off exchange” contract settlement transactions that are intentionally opaque in nature.
Historically, extremes in these metrics tend to correct in much less time than the current period. We have maintained a hedge on our mining stock portfolio for about 80% of the time between mid-September and now. We pulled it off about two weeks ago on a Friday thinking that maybe the ability of the banks to slam the market had diminished this time because of the strong physical demand from the east. Literally about 30 minutes after we took off the hedge the price of gold was slammed (I’m not kidding).
My thinking has been that, if we abide strictly by the COT and open interest, the Comex o/i needs to decline to the low 400k area before the next move higher takes place. When I “eyeballed” the gold chart in early September in the context of historical price-takedown operations, I figured it would take a move down to the $1230-1240 area to wash out enough open interest to rebalance the net short/net long set-up. But the open interest has persisted above 500k and the attacks on the gold price during the paper trading Comex hours have been short-lived in duration and shallow relative to historical intra-day attacks. The banks couldn’t seem to get gold below $1260-$1270 until this week.
My best guess is that the unusually high demand for physical gold from the eastern hemisphere has prevented the banks from taking the price down enough to trigger one last hedge fund open interest wash-out. The 34,896 contract plunge in gold futures open interest last Tuesday (November 28) was the third largest one-day decline in o/i since the beginning of 2011 and it is a move in the right direction in order to break the “log-jam” in open interest on the Comex.
That said, the eastern hemisphere will go into temporary hibernation in mid to late December thru early January. I suspect that one last “shock and awe” price attack orchestrated in the paper market will be attempted in order to get the open interest down into the low 400k area. I thus expect the bull trend in gold/silver will resume in mid-January. We put the hedge back on this week, though we’ve been trying to trade in and out of it on price swings. In all likelihood, unless I see something that suggests otherwise, we’ll likely go through the Christmas/New Year’s period with a hedge.
One last thought, it’s going to be interesting to watch the Bitcoin bulls squirm and panic when the CME banks wrap their tentacles around Bitcoin futures. Contrary to the untested notion that the supply of Bitcoin is capped, the supply of paper Bitcoin (futures contracts) is theoretically infinite…
The commentary above is from IRD’s Mining Stock Journal, which focuses on undiscovered gold and silver junior exploration stock ideas as well as presents relative value trading ideas in mid-cap mining stocks. You learn more about this newsletter here: Mining Stock Journal Information.
I wanted to thank you again for explaining to me how you put a hedge on it has saved me a great deal of money – subscriber feedback received this morning
The Chicago Mercantile Exchange (CME) announced a plan to launch Bitcoin futures by the end of the year. The price of Bitcoin surged to a new record in response to the announcement. It was reminiscent of the dot.com era, when a dot.com stock would jump 10% if Maria Bartiromo merely whispered the name of the company on CNBC.
Ironically, the cheers for this new contract from the Bitcoin faithful could turn out to be analogous to chickens in the barnyard cheering at the appearance of Colonel Sanders.
GATA released an article about the new Bitcoin futures contract titled “So Long Cryptos.” I’m sure that editorial stance puzzled most Bitcoin price-momentum chasers. Crypto aficionados, for now, overlook the fact that CME futures are used aggressively to push around the dollar-based Comex gold and silver futures contracts.
As GATA points out, the ability to manipulate precious metals futures contracts by the official entities motivated to suppress the price of gold is reinforced by the volume trading discounts given from the CME to Governments and Central Banks who trade on the CME.
If there any reason to assume that the same volume discounts will not be extended to the Bitcoin contract? Another curious feature of the Bitcoin contract is that it will be settled in cash. I would point out the original intent behind futures contracts was to enable producers and users to agree ahead of time on a price that would be paid for the delivery of the underlying commodity associated with the futures contract. Futures were a financing tool intended to facilitate the production and distribution of the underlying commodity product.
The Bitcoin futures contract is settled only in cash – U.S. dollars. To wit, does this not theoretically sabotage the intended purpose of Bitcoin, which is to provide an alternative to fiat currencies? Why would you want to receive fiat dollars rather than delivery of the underlying?
Technically this is not a bona fide futures contract. It’s a derivative of the “index” price of Bitcoin but it does not facilitate the production and distribution of Bitcoin. As such, it’s an instrument of pure speculation. By definition, this opens the door to manipulation by the entities who might be motivated to control the price of Bitcoin. Oh, by the way, those entities can buy and sell the contracts at a price advantage to the speculators by virtue of the volume discounts.
At least with gold and silver contracts, the contract enables the contract owner to take delivery of the actual physical commodity connected to the contract. To a limited extent, this mechanism serves to prevent the complete unfettered manipulation of gold and silver via the Comex futures contract.
With the Bitcoin futures contract, the contract owner is paid cash. The absence of a requirement to deliver actual Bitcoins enables the issuance of an unlimited number of fiat dollar-based paper Bitcoin contracts which can be used to drive the price lower by increasing the supply of the contract relative to the demand. So much for the idea that Bitcoin supply issuance is firmly capped. This could actually be quite entertaining to observe
It’s also quite possible that Bitcoin futures could divert hedge fund trading volume away from gold and silver futures. This would be a blessing in disguise if this occurs. The price-momentum chasing hedge fund algo trading enables the Comex bank manipulation of Comex futures contracts. Remove this source of volume and it will remove to some degree the ability of the banks to push the price around by exploiting the hedge fund algos.
If the percentage of open interest in gold and silver Comex futures contracts becomes skewed toward the users of these contracts who actually take bona fide delivery of the underlying physical gold/silver bars because the non-delivery-taking users move over to Bitcoin futures, it could mitigate the ability of the banks to price-cap the price of gold/silver.
In this regard, investors who prefer to keep their wealth stored in physical gold and silver rather than fiat dollars or fiat Bitcoins will indeed welcome the new Bitcoin futures product.
A concocted public relations scheme – an event which resembled the annual Punxsutawney ground-hog viewing tradition – in which the Treasury Secretary emerges from Ft Knox and proclaims, “the gold is safe” does not provide any evidence whatsoever.
On cue, Jim Rickards followed up with a half-baked apology for the unwillingness of the U.S. Government to force a bona fide audit of the public’s gold being “safekept” in the Fed’s custody.
Bill “Midas” Murphy asked my opinion on Rickard’s white washing of the topic:
This is why I don’t read Rickards. I don’t know what his deal is anymore. He was a front for the Pentagon’s goal to circulate the idea of the SDR replacing the dollar as the reserve currency. This is because they know the dollar is toast but the dollar is still the largest percentage share of the SDR so the U.S. would remain in control over the world’s reserve currency if it were to be the SDR.
Now Rickards has pimped himself out to Agora, which really devalued Agora in my opinion. And he’s ripping off the public with his gold letter subscription. Total scam. I’ve had subscribers to my Mining Stock Journal tell me his subscription service is a farce.
He really butchered the truth there with that article. While it’s true that a gold leasing transaction does not have to entail the actual transfer of physical gold from the lessor to the lessee, often it does. Goldman recently did a lease-style transaction with Venezuela that transferred possession of VZ’s gold to Goldman.
The U.S. would have to audit to the gold if the public forced the issue. Ron Paul tried several times to force the issue on behalf of the public and the Fed spent millions in lobbying money to get Barney Frank to quash Paul’s efforts. The Fed hired Linda Robertson, formerly a lobbyist for Enron, to assist with the effort to snuff out any attempt to legislate an audit. That’s why the Government has never ordered an audit of the PUBLIC’s gold. You don’t spend millions to derail legislation just because you’re worried it will elevate the importance of gold to the public. That’s complete foolish babble but coming from Rickards makes it sound legitimate.
That’s Rickards’ modus operandi. Offer up some half-baked justification to support his argument because he knows a majority of his audience will nod their head robotically in agreement rather than question the assertion. Does he ever offer proof? Who are his military contacts? Why are we supposed to accept the legitimacy of his assertions with blind faith, especially considering that the “tracks in the snow” suggesting the contrary have been visible for many years. Certainly well before Rickards’ handlers thrust him under the spotlight of the gold investing, truth-seeking community.
As for the actual physical transfer of gold, if gold under the Fed’s control has not been used to satisfy eastern hemisphere delivery demands for several years, how come it took so long for Germany to get its gold bars back, allegedly? Especially given that it took Hugo Chavez just 4 months to repatriate 160 tonnes of gold that was held at several Central Bank vaults around western Europe? From all accounts, the gold bars Germany originally sent to the U.S. for “safekeeping” after WWII are not the same bars that were returned, assuming they were actually returned. Again, why does anyone accept with blind faith anything coming from any Government, especially the U.S. Government?
A small portion of the public, led by a high-ranking, long-time Congressman have demanded several times in the last decade to see bona fide evidence that the gold owned by the Treasury, which means the citizens of the U.S., is physically sitting in the various Fed vaults and is unencumbered by any form of counter-party claim. The fact that the Government refuses to do this can only lead to one conclusion – and it’s not Rickard’s half-baked apology.
This is a topic that was put to rest in my mind more than a decade ago. Some of the gold may be physically sitting in the various Fed vaults “safeguarded” by the military, but most of it is now sitting in the form of refined kilo bars in Chinese vaults or as highly-prized gold jewelry draped around Indian wives.
To counter Rickards’ “military sources” reference, I received this email last night from a reader:
Back in February 2011, I ran into a Kentucky good ole boy who worked at Fort Knox in rural Kentucky. Fort Knox was also an Army Military depot as well as gold storage which it is/was famous for.
Several months before February 2011, the Army made a decision to transfer the Army Military Depot at Fort Knox to other military depots and my Ky guy no longer had a job and had to transfer and relocate to keep a Federal Gov’t job. So that’s what he did, he relocated and how I ran into him.
So I asked him…”Does Ft Knox have any gold there because I have heard there may no longer be any gold there.”
His response: “That’s been the rumor on the Base for some time…but the only people that would know for sure are the people who have clearance to get into the vault.” He didn’t have anything else to add or say because he worked on the military depot part of the base. But this is 6 plus years ago and I believe him because it just came spontaneously out of his mouth. It sent shivers down my spine when he told me this.
This is how I feel about what he said: People can’t keep a secret…just human nature….a worker can tell his spouse, a spouse can talk to a friend…and before you know it, it’s all around the base. Spreads like a wild fire. This is in rural KY so rumors and news like this will never get any national publicity legs so it just stays local.
While I will maintain, until proven wrong by the test of time, that Bitcoin and Cryptocurrencies are nothing more than a temporary fad, investing with a long term outlook (20-30 years) gives the investor the best probability of generating life-style changing wealth.
William Powers, of MiningStockEducation.com, invited onto his podcast to discuss using leverage in precious metals and mining stock investing. We discuss greed/fear, using margin with mining stocks, volatility, options, futures and the leveraged ETFs.
The problem for most investors, and the reason many have not made a lot of money – or might have lost money – in the precious metals sector is the inability to invest with a long term perspective. Since 2001, gold has outperformed every asset class. The mining stocks, in general as measured using the HUI index, have outperformed the Dow/Naz since 2001.
If your reason to be invested in a sector is still valid, there’s no reason to sell investments in that sector. Have the reasons for investing precious metals as a hedge against a collapsing U.S. economic and political system, and thereby a collapse in the U.S. dollar, changed? Have the problems taking the U.S. down been fixed? The answer is pretty obvious, which means you should be holding your precious metals investments, even if you bought them in early 2011. In fact, if you bought then, you should be buying more now. I know I have been adding to my holdings gradually since early 2016.
The next issue of the Mining Stock Journal will be published this Thursday. I’ll be reviewing a junior stock that has gone parabolic and a mid-cap producer that has been hammered hard but is poised to bounce back just as sharply. You can learn more about the MSJ here – new subscribers get all of the back-issues: Mining Stock Journal information.
Ballooning open interest, heavy fix selling, aggressive post-settlement selling, flash crashes – this all seems a lot of bother. Perhaps the Other Side is afraid of something. – John Brimelow from his Gold Jottings report
Wednesday evening at 7:06 EST, at one of the least liquid trading periods of the 23 hour trading day for Comex paper gold, a “motivated” seller unloaded 10,777 August gold contracts into the CME’s Globex trading system, knocking the price of gold down $9 in 25 minutes. There were no obvious news or events reported that would have triggered any investor to dump over 1 million ozs of gold with complete disregard to price execution.
Rather, the selling was the act of an entity looking to push the price of gold a lot lower in “shock and awe” fashion. The 10.7k contracts sold were just the August contracts. There was also related selling in several other contract months. To be sure, the total number of contracts unloaded included hedge fund selling from stop-losses triggered in the black boxes of momentum-chasing hedge funds.
In addition to the appearance of frequent, strategically-timed “fat finger” flash crashes, the open interest in paper gold on the Comex has soared by 23,000 contracts since last Friday. This added 2.3 million paper gold ounces to the Comex open interest, which represents nearly 27% of the total amount of alleged physical gold ounces sitting Comex vaults. In fact, the total paper gold open interest on the Comex is 455,605 contracts, or 45.5 million ounces of gold. This is 530% more paper gold than the total amount of gold reported to be sitting in Comex vaults.
The dramatic rise in open interest accompanied gold’s move in price above the 50 dma. It’s typical for the bullion banks on the Comex to start flooding the market with additional paper contracts in order to suppress strong rallies in the price of gold. Imagine what would happen to the price of gold if the regulatory authorities forbid the open interest in Comex gold contracts to never exceed 120% of the total amount of gold in the Comex vaults. This is unwritten “120% rule” is de rigeur with every other commodity contract except, of course, silver.
The “flash crash” and “open interest inflation” are two of the obvious signals that the western Central Banks/bullion banks are worried about the rising price of gold. The recent degree of blatant manipulation reflects outright fear. I suspect the fear is derived from two sources. First is a growing shortage of physical gold that is available to deliver into the eastern hemisphere’s voracious import appetite. Exports from Swiss refineries have been soaring. India’s appetite for gold has not been even slightly derailed by the 3% additional sales tax imposed on gold.
Speaking of India, the World Council has put forth a Herculean effort to down-play to amount of gold India has been and will be buying. After India’s 351 tonnes imported in Q1, the WGC tried to shove a 90 tonne per quarter forecast down our throats for the rest of the year. India’s official tally for Q2 is 167.4 tonnes. Swing and a miss for the WGC. Now the WGC is forecasting at total of 650-750 tonnes for all of 2017.
The WGC forecast is idiotic given that India officially imported 518.6 tonnes in 1H and 2H is traditionally the best seasonal buying period of the year AND a copious monsoon season means that farmers will be flush with cash – or rupees, rather – which will be quickly converted into gold. Two more swings and misses for Q3 and Q4 and the WGC is out of excuses for why India likely will have imported around 1,000 tonnes, not including smuggled gold, in 2017. This aggressive misrepresentation of India’s gold demand reeks of propaganda. But for what purpose?
Back to the second reason for the banks to fear a rising price of gold: the inevitable collapse of the largest financial bubble in history inflated by Central Bank money printing and credit creation. The trading action in the gold and silver markets resembles the trading activity in 2008 leading up to the collapse of Lehman and the de facto collapse of Goldman Sachs.
One significant difference is the relative effort exerted to keep a lid on the price of silver. In early 2008, with the price of silver trading between $17 and $19, the open interest in Comex silver peaked at 189k contracts (Feb 29th COT report). Currently the open interest is 206k contracts and it’s been over 240k. In late 2008, the Comex was reporting over 80 million ozs of “registered” silver in its vaults. “Registered” means “available for delivery.” There were thus roughly 3 ozs of paper gold for every reported ounce of physical gold available for delivery. Currently the Comex is reporting 38.5 million ozs of registered silver. That’s 5.3 ozs of paper silver for every ounce of registered silver.
As you can see, the relative effort to suppress the price of gold and silver is more intense now than in 2008. Given what occurred in 2008, I have to believe that fear emanating from the western banks currently is derived from events unfolding “behind the curtain” that are worse than what hit the system in 2008.
Once again there was an overnight “flash crash” in Comex gold futures trading. This time it occurred at 3:56 a.m. EST at one of the quietest trading periods of the roughly 23 hour electronic trading day. India has gone sleep. The Shanghai Gold Exchange has been closed for about 90 minutes and the London markets are just beginning to function. I guess someone decided it was a good time to unload close $500 million worth of paper gold into the Comex’s Globex electronic trading system (click to enlarge):
The graph above is the Comex August paper gold derivative, sometimes referenced as a “contract.” The $500mm million number is from Zerohedge and likely includes all the contract months. At exactly 3:56 EST a clearly motivated seller decided it was the best time to unload 2,741 August pieces of paper gold, driving the market down $4.50 instantaneously. If the gold were actually physically delivered into the buyer, that chunk would be 274,100 ozs, or roughly $360mm worth of gold. It’s doubtful that amount of gold is actually sitting in the Comex “registered” vaults (yes, I know what is allegedly reported to be in the vaults).
INTERESTINGLY, the very next minute, some entity BOUGHT 2,373 August paper gold contracts, nearly offsetting the amount of contracts sold. That’s why the price snapped right back up. Also interesting is the fact that the apologists on behalf of those manipulating the paper gold market were dead silent as to the source of this large sell – i.e. there were not any reported “fat finger” excuses.
The question I have is whether or not the flash crash sale was perpetrated to induce the hedge fund black algos to mechanically sell, assuming stop-losses were triggered, to enable the buyer to buy 2,373 contracts at a lower price. We know for sure, based on the recent COT reports, that the bullion banks are feverishly covering their short position, with the bank swap dealers now net long gold. Concomitantly, we know the hedge funds are dumping longs and going short.
Unfortunately, whoever decided to implement this operation strategically executed it one day AFTER the reporting cut-off date for Friday’s COT report. It’s a neat little maneuver the bullion banks have doing for years as a method of covering up their “tracks in the snow.” It will be impossible to analyze what occurred overnight when the COT report a week from Friday is released. The “winds” will have blown snow over the tracks.
That said, it certainly feels like there’s real buyers of gold and silver accumulating positions at these levels. I know from looking at the data on a daily basis that the Indians are actively importing gold currently. For now, it looks like the General Sales Tax “boogieman” was a non-event. China is actively buying, albeit it’s somewhat seasonally slow on the SGE.
What is of interest, at least to me, is the fact that the market has a bullish tone in what is normally one of the slowest seasonal periods of the year. In another month the Indians will be gearing up for their peak buying period. Also of note is that fact that U.S. retail coin buyers have ramped up their appetite considerably for silver eagles and, more of note, for some reason India is importing silver right now in unusually large quantities. I have not been able to track down a link yet, but yesterday Reuters referenced an article in the Economic Times hard copy edition titled, “Silver Imports May See Three-Fold Rise as Low Price Drives Demand.”
Stewart Dougherty is back with scathing commentary about the big mining companies – Barrick, Newmont, Goldcorp, etc – and their unwillingness to fight the obvious intervention in the gold and silver markets by western Central Banks and Governments.
While the Fed and other Deep State puppets have floated subtle memes that there is a noble purpose behind the control of gold, such as to support the dollar and preserve confidence in their (disintegrating) financial and monetary system, these are nothing but contrived and coagulated lies designed to cover up the biggest financial crime in history. – Stewart Dougherty
In 1980, the Financial Deep State realized that there existed an extraordinary opportunity for serial plunder and profiteering: the manipulation of the gold and silver markets. They immediately mobilized to exploit it.
During the subsequent 37+ years (we are now well into the 38th), the Deep State manipulators have criminally looted the gold and silver markets, pocketing astronomical profits for themselves in the process, all of which have come from real victims on the other sides of their fraudulent trades. While literally billions of people worldwide have been financially damaged by this crime, many of them severely, not one of the perpetrators has spent so much as ten seconds in jail for the global looting spree they have conducted. This is because precious metals price fraud is a state-sponsored crime.
While in this article we will concentrate on gold from here on, the exact dynamics we describe also apply to silver. The only difference between the two is that the price carnage in silver has been far worse than it has been in gold, on a percentage basis.
As a consequence of the unrelenting gold price manipulation, gold has been thrust into two severe bear markets that have lasted for more than 27 of the past 37 years, or more than 72% of the time.
The first bear market ran from 1980 until 2001, during which the gold price was savaged from $850 to $250 in nominal dollars, a plunge of 71%. Inflation-adjusted to today’s dollars, the carnage was even worse: it collapsed from $2,674 to $344, an 87% implosion.
In 2001, in the midst of unprecedented (at the time, but far worse now) economic, financial and monetary pressures, gold embarked on a ten year rise to a nominal (although not inflation-adjusted), all-time high of $1,925. The Financial Deep State had its hands full then with other, more pressing matters (such as keeping its global financial and monetary Ponzi schemes from disintegrating), and was forced to take its eyes off of the gold ball. It is impressive what gold can do when it is freed from the chains of greed, looting, and official corruption.
By 2011, after employing its signature techniques, including rampant counterfeiting and reporting fraud, the Deep State had returned the errant financial genies to their poison bottles, and was able once again to focus its attention on its favorite, most profitable crime: precious metals price rigging.
For the 6+ years since, gold has been slammed into a second major bear market, during which its price has been crushed from $1925 to $1050, a collapse of 45%. It has recovered somewhat to $1210 at the time of this writing.
During the entire 37+ year period, and particularly during the 27+ years of outright price annihilation, the major gold miners have done precisely nothing to expand the market for physical gold via advertising, direct marketing or any of the other proven demand-creation techniques. They have also done nothing to support gold’s price in any way, or to take action against the criminal price manipulators.
The industry’s sole innovative effort during this period was to have its association, the World Gold Council, get behind a gold ETF, GLD. The management of this ETF was…
Dave, just a moment for some feed back on your Short Seller’s Journal. I just placed an order for 1oz gold eagles thx to my profits off Tesla and BBBY, thx as always. – subscriber email received today –Short Seller’s Journal information
Wow. The hedge funds are almost net short silver contracts again, having had their algos steered into that predicament by the bullion bank market manipulation. The fraudulent paper short position in both gold and silver – but especially silver – is many multiples larger than the available supply of physical metal that is supposed to legally back commodity derivatives. This is evident from the Comex disclosures.
We have no idea what the total net short position would be including LBMA forward contracts and OTC derivatives. That the entities who are paid by the public to prevent this continue to allow and enable this massive fraud is a tragic commentary on the current U.S. economic, financial and political systems.
Craig “Turd Ferguson” Hemke invited me onto his weekly subscriber podcast show to discuss the trading action in gold and silver, the catastrophe otherwise known as the Federal Reserve and the slow-motion train wreck occurring in the stock market:
TO LEARN MORE ABOUT THE MINING STOCK JOURNAL OR SHORT SELLER’S JOURNAL – CLICK IN IMAGE: