Tag Archives: silver eagles

Forget GDXJ – Follow The Real Money Into Gold, Silver And Juniors

Silver Doctors / The News Doctors invited me onto their weekly SD Bullion Metals and Markets show to discuss why both the technicals and fundamentals are setting up for an unexpected rally into the summer in gold, silver and the mining shares, specifically the juniors.

Subsequent to our recording, the weekly Commitment of Traders report released Friday showed that the bullion banks continue to cover their net short positions in both gold and silver rather aggressively and the hedge funds are unloading long positions and piling into the short side.  Historically, this has been a set-up for big moves higher in the sector.  The hedge funds chase momentum and they are almost never right in the precious metals sector.  When they pile into short positions, like they are now, it’s always a valid contrarian indicator.  We also discuss why the “summer doldrums” in the precious metals sector is no longer a valid seasonal play.

Another contrarian indicator is the negative sentiment connected to the GDXJ ETF.  Adam Hamilton wrote a non-compelling critique of GDXJ and made the assertion that GDXJ was diverting the flow of capital away from junior companies that deserve to get funding. The problem with this analysis is that retail investor buying of junior mining stocks on the secondary market is not a source of capital for junior mining companies. The secondary trading of stocks is not a source of capital for any stock, for that matter.  ETFs are a “derivative” of the secondary trading market and thus are also not a source of capital for companies.

Junior mining stocks get their capital from new share issuance or from direct investment by strategic investors.  If Hamilton bothered to call on the companies themselves rather than take quarterly filings and throw numbers into a spreadsheet as his primary tool of analysis, he would discover that many junior exploration CEO’s would tell him that they are getting a lot interest from strategic investors. Furthermore, many junior mining companies with investment-worthy stories are having no problem raising capital  through primary share-issuance, notwithstanding the recent turmoil connected to GDXJ. GDXJ is a derivative security. Derivatives are a source of fees for their issuer/sponsors, not a capital raising conduit for companies.

The Mining Stock Journal focuses on the emerging junior exploration mining companies that are seeing an elevated level of investment interest from sophisticated private investment funds and from strategic investors.  These are the stocks that offer the greatest upside-potential in the junior segment of the sector – not the larger-cap, developed companies in the GDXJ Trust.  The latest issue features a company with a potentially prolific gold property that is in negotiations with a strategic investor.  Two juniors featured in the Mining Stock Journal were acquired recently.  Looking at companies one-by-one, not en masse, is how you find the potential home run stocks.  You can learn more about investing in these opportunities here:  Mining Stock Journal information.

Here’s the download for the latest SD Bullion weekly show:  MP3 download  and here’s the podcast:

Phenomenal movement lately with one of your stock picks, Dave, and I have no doubt it’s still in the first inning of what will be a very long game. Superb. Thank you! – subscriber “Mark”

Stock Bubbles, Propaganda And The Deep State

At the close of the Constitutional Convention of 1787, someone asked Ben Franklin: “have we got a Republic or a Monarchy?”  To which Dr. Franklin replied, “A Republic – if you can keep it.”  – from the notes of Dr. James McHenry, one of Maryland’s delegates to the Convention

A “Republic” is defined as a State in which the supreme power is held by the people and their elected representatives.  The critical foundation of a Republic is Rule of Law.  When a person or group of people transcend the Rule of Law, and therefore “rise above” the sovereign power, a Republic no longer exists.

The Republic to which Ben Franklin referred no longer exists in the United States.  It’s debatable as to when the Republic status was lost, but the fact that Rule of Law has transformed into Rule of Man is not debatable.   The “invisible” entity known at the Deep State is the ruling body in the U.S.

Evidence of this is ubiquitous.  For example, Barack Obama’s Attorney General, Eric Holder – the chief enforcer and prosecutor in the United States – said with regard to the obvious crimes committed by the big Wall Street banks:  some banks are too large to prosecute. With that, Holder declared that the Too Big To Fail Banks are above the law.   Wall Street, in fact, is an integral part of the Deep State apparatus.

Another essential tool of the Deep State operation is the proliferation of propaganda.  The socially accepted term for “propaganda” is “alternative facts.”  But propaganda is merely a lie that is formulated and presented in a way that a lazy-minded populace will accept as the truth.   The Iraq war is good example.  The propagandists, like Colin Powell, who helped to enable an illegal attack on Iraq by the Bush regime, have openly admitted they lied to get the public behind the invasion.

The current pre-war “alternative fact” propaganda is this idea that Russia interfered in presidential election in order to influence the outcome.  This lie was floated by Hillary Clinton during one of the debates with Trump.  That lie has disturbingly transformed into an insidious lie that is promoted by the media and happily accepted by most Americans.

Another big lie seemingly accepted as truth is the stock market.  Never before in history has the value of the U.S. stock market been as dislocated from the underling fundamental reality than now.  But as long as the Dow and the S&P 500 keep levitating higher, the politicians and economists can point to the stock market as evidence of a healthy economy and “success” with regard to their policies of money printing, credit creation an unfettered Government spending.

(Of course, don’t pay attention to the fact that the median stock that trades on the NYSE is below its 200 day moving averaging and stocks in certain sectors are testing 52-week lows).

In today’s episode of the Shadow of Truth we apply Orwell’s quote – “In our age, there is no such thing as ‘keeping out of politics.’ All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia” – to 2017 America:

Silver – The Only Commodity 66% Cheaper Than 37 Years Ago

Silver has gone from being the cartel’s kryptonite to being its LHC, or Large Hadron Collider. There are a lot of theories on what is going on with silver but the reality will probably be something even more fantastic. I keep getting back to lumber by way of comparison. The OI in silver is 55 times higher than in lumber, yet the global physical lumber market by dollar volume is actually higher. – quote from LeMetropole Cafe’s “Midas” Report

Those of us who have studied and traded silver for a long time (16 years in my case), have concluded that the Western Central Banks have painted themselves into a corner with their multi-decade effort to control the price of silver. Central Banks ran out of silver to unload on the market a long time ago. As such, they’ve had to resort to using paper derivative silver in the form of Comex futures, LBMA forward and OTC derivatives in their effort to cap the price of silver. In the last year, the amount of paper silver sold short against the available supply physical silver has grown into an astronomical number. At this point the banks can only pray that less than 1% of the longs each delivery period will continue to settle the contracts in cash…

“As a fiduciary, to the extent that you own gold and are going to own it a long time, it is not a trade….in the COMEX warehouse they had $80 Billion of open interest, and $2.7 Billion of deliverables….thats an easy one, you go get it.”  -Kyle Bass

Kyle: “What if 4% of the people want delivery?”
COMEX Delivery Manager: “Oh Kyle that never happens. We rarely ever get a 1% delivery.
Kyle: “Well, what if it does happen?”
COMEX Delivery Manager: “Oh, well price will solve everything.”
Kyle: “I said thanks, give me the gold.”

Here’s the link to that interview with Kyle Bass: “I’ll Take My Gold, Please”

The Daily Coin chatted with GATA’s Bill “Midas” Murphy about the current degree of manipulation in the silver market. The banking cartel is trapped, in a sense. The only resolution of this dilemma is a much higher price of silver – the free market solution – or war:

Silver Demand Shows A Consumer In Trouble

Global demand for silver declined from 2015 to 2016 by 123 million ozs per numbers from the Silver Institute presented in an article on The Daily Coin yesterday.   In fact, for the demand categories primarily driven by the consumer, demand plummeted 125 million ozs, or 15.3%.   Industrial demand for silver increased slightly but this was because of the global expansion in the solar panel industry, primarily in India and China.

The consumer portion of global silver demand is derived from jewelry, coins and bars (investment), silverware and electronics.  The 15.3% plunge in demand reflects the fact that consumer disposable income is drying up.   After making required monthly expenditures – food, mortgage/rent, debt service, healthcare – consumers, especially in the United States, are out of money.

Disappearing disposable income explains only part of the equation.  The illusion of economic improvement in the U.S. was created by debt issuance.   Between Q3 2012 and now, total household debt expanded by $1.38 trillion dollars.  In fact, total household debt is now at an all-time high, driven by auto, student, credit card and personal loans.  The truth is that “discretionary” consumption was fueled by the Fed enabling the average U.S. household to accumulate a record level of debt.

The economy likely hit a wall in late 2016 and is now contracting.   Today’s retail sales report – to the extent that the numbers have any credibility – showed a .4% gain in retail sales for April vs. March.  But these are nominal numbers.   On an inflation-adjusted basis, retail sales declined.

While demand for silver products reflects the fact that the average consumer is out of money, restaurant sales confirm this.   April restaurant sales declined 1% in April and foot traffic into restaurants dropped 3.3%.  This was the 12th month out of the last 13 that restaurant sales fell.  Restaurant sales have dropped five quarters in a row.  The last time a streak like this occurred was 2009-2010.   Sound familiar?

Regardless of what the Fed says in public, the U.S. economy is in trouble.  The illusion of economic growth post-2009 was a product of debt issuance.  Now the consumer – 70% of the economy – has hit a wall with regard to its ability to take on more debt – look out below. In today’s episode of the Shadow of Truth, we review the silver demand numbers and discuss the implications for U.S. and global economy:

Is The U.S Ponzi Scheme About To End?

“How did you go bankrupt?” “Two ways. Gradually, then suddenly.”
– Ernest Hemingway, “The Sun Also Rises”

I was chatting with a friend two days ago who was agitated by the insanity of the markets. Look at TSLA, for instance.   This thing loses $13,000 for every car sold.  Soon the tax credits – i.e. the taxpayer subsidies – will expire and TSLA will lose even more per car because it will have to lower the price to entice buyers.   Its balance sheet is a ticking time bomb in the form of residual value guarantees issued by TSLA used to induce buyers into paying up for a car that has depreciated in value considerably more than the value of the guarantee. Those poor saps don’t realize it yet, but they will be unsecured creditors to a bankrupt corpse of a company.  And yet, the market has pushed the market cap above the market caps of GM and Ford.

To say this is absurd is an insult to the word “absurd.”  I’m still trying to decide whether TSLA or AMZN is the biggest Ponzi scheme in U.S. history.  I have not had a chance to dissect TSLA’s financials and operations to the extent that I have done so with AMZN.  With AMZN the market doesn’t seem to care that, on a net income basis, in its latest quarter AMZN’s product sales business (it’s non-cloud, or AWS, business) lost money (that’s right, if you subract the operating income of AWS from total net income,  AMZN lost money – AMZN manufactures net income for its non-AWS business via GAAP gimmicks) .  But why focus on the facts?  The operating income of its AWS cloud business dropped 29%.   Once GOOG, MSFT and ORCL have fully implemented their attack on AMZN’s cloud market share, AWS will become irrelevant.   I would bet every single entity that bought AMZN stock since it released its Q1 earnings does not know these facts.  AMZN, pure and simple, is a Ponzi scheme.

Amusingly, there’s a contest on CNBC over whether AMZN or GOOG hits $1000 first.  This is the surest signal that the end of this fiat currency-driven credit and stock bubble globally is about to collapse.

Given the inability to manipulate its market via paper derivative instruments and short selling, this is the message that Bitcoin is signaling:

In the absence of the ability to manipulate the market, this is the same message that gold and silver would be sending to the world, only the scramble for gold and silver bullion in any form would be more frenzied and it would be widespread. There actually is a somewhat frenzied scramble for gold and silver in eastern hemisphere markets based on the premiums to melt being paid for refined products in places like India, China, Turkey and Viet Nam.

At some point the western Central Banks will lose the ability to manipulate the gold and silver price and the Comex will default.  That’s when chaos will break out in the physical gold and silver markets.  That may be what it will take to trigger the collapse of the U.S. Ponzi scheme.   Apparently JP Morgan understands this inevitability.  Prior to 2011, JPM did not operate a Comex vault.  It had zero Comex silver.   Currently JPM is holding nearly 108 million ozs of silver, or 54% of the total silver reportedly held in Comex silver vaults.   This tells us, or at least me, that smart insider money is loading up on precious metals – not Bitcoin – and that silver is a better bet than gold.

Hemingway’s “slowly” method of going bankrupt has nearly run its course.  There’s no way to tell the timing on the “all at once” side of this trade but the price action in Bitcoin is signaling to the world that the obviously inevitable draws near.

Will Physical Gold/Silver Demand Prevent A Bigger Sell-Off?

The precious metals market has been under attack for the last two weeks by the Comex banks who have once again built-up an extreme net short position in their paper gold and silver positions.  In fact the open interest in paper silver recently set a new record high, exceeding the previous high set in 2011, when the price of gold was approaching $50.  That it took a record amount of paper silver creation to keep the price of silver below $20  a sense of desperation by the banking cartel in its effort to keep gold and silver “irrelevant” as an investment.

But the price action of the metals is behaving somewhat differently from past cycles when the banks decide to flex their muscles and trample on the precious metals market by bombarding the Comex with thousands of gold and silver contracts in order to disgorge the long positions held by hedge funds and create intermittent “waterfall” sell-offs.

Eric Dubin (The News Doctors) and the “Doc” (Silver Doctors) invited me back on to their “Metals and Markets” weekly show sponsored by SD Bullion to chat about the precious metals, junior mining stocks and geopolitical current events:

If you would like more information about Investment Research Dynamics’ Mining Stock Journal or Short Seller’s Journal, click on either banner below. The latest MSJ features a relatively unknown junior mining stock that could eventually be a 5-10 bagger from its current price (currently below 30 cents) and the new issue of SSJ (published this evening) explains why the housing market is about to follow the retail and auto sales into a recessionary spiral:

Massive Attacks On Gold Reek Of Desperation

The paper silver open interest on the Comex is at all-time highs.  The previous all-time high was 224k contracts when the price of silver was pushing $50 in 2011.  The current paper silver open interest is 229k contracts with the price of silver at $18.  At least the degree of fake silver open interest in silver was more appropriate to the price level at which silver was trading in 2011.

Having said that, the current paper silver open interest is entirely inappropriate relative to the amount of silver reported to be held in Comex silver vaults.  229 thousand silver contracts translates into 1.15 billion ozs of paper silver.  That number represents  about 37% more actual silver ounces produced by global by mining companies in one year.  Compare that paper representation of silver to the actual 193 million ozs of silver reported to be held in Comex vaults, primarily “held” by JP Morgan which is reporting nearly 102 million ozs of silver in its vault.

Notwithstanding whether or not those 101 million ozs of silver are actually sitting physically in JP Morgan’s Comex-designated custodial vault (and much of it has likely been hypothecated), the amount of paper silver issued primarily by Comex bullion banks is nearly 6x the total amount of silver reported to be held in Comex vaults.

But it gets worse.  The amount of silver that has been designated as available for delivery, or “registered silver,” is only 30 million ozs.  In other words, the amount of paper silver issued by the Comex is 38x greater than the amount of silver made available to be delivered to the holders of those silver contracts.

The point here is that the Comex is likely the world’s most fraudulent market. In fact, It’s inappropriate to refer to the Comex as a “market.”  The Comex is nothing but a mechanism by which the Fed, in conjunction with the Treasury’s Exchange Stabilization Fund and the Comex bullion banks, exerts control over the price of silver.

The degree to which the Fed et al has to exert fraud in order to contain the price of silver is reflected by the absurd imbalance between paper silver contracts issued in relation to the amount of the underlying silver available for delivery.   In any other commodity sector this situation would be labeled “criminal.” With silver and gold it’s labeled, “nothing to see here, move along.”

As with silver, the trading patterns in gold reflect a high degree of desperation by the bullion banks to contain the price and demand of physical gold.  Interestingly, right now most of the blatant manipulation appears to be connected to the London p.m. gold fix activity on the LBMA.  We believe it’s evidence of a growing shortage of physical gold available to deliver into India, China and other gold-buying countries.   We explain this view in detail in today’s Shadow of Truth episode:

The next issue of the Mining Stock Journal, released this evening to subscribers, will have new junior explorer idea with 5-10x upside potential. It will also have an alternative explanation to the JNUG suspension of new unit issuance and why this could be very bullish for the sector. You can find out more about subscribing to the MSJ here:   Mining Stock Journal Subscription Info.

The Comex Is The World’s Most Corrupted Market

While no additional silver was put on deposit at the Comex during the [past] week, The Banks sold contracts for 120MM oz.  This is fraud.  -@TF MetalsReport

If you were to poll the public about comparing the investment returns  between gold, silver and stocks during the first quarter of 2017, it’s highly probable that the majority of the populace would respond that the S&P 500 outperformed the precious metals.   That’s a result of the mainstream media’s unwillingness to report on the precious metals market other than to disparage it as an investment.

In reality, among silver, gold, the Nasdaq 100 and the S&P 500, the S&P 500 had the lowest ROR in Q1.  Silver led the pack at 14%, followed by tech-heavy Nasdaq 100 at 11.1%, gold at 8.6% and the S&P 500 at 4.8%.  Put that in your pipe and smoke it, Cramer.  Imagine the performance gold and silver would have turned in if the Comex was prevented from creating paper gold and silver in amounts that exceeded the quantity of gold and silver sitting in the Comex vaults.

As an example, as of Friday the Comex is reporting 949k ozs of gold in the registered accounts of the Comex vaults and 9 million ozs of total gold.  Yet, the open interest in paper gold contracts as of Friday totaled 41.7 million ozs.  This is 44x more paper gold than the amount of physical that has been designated – “registered” – as available for delivery.  It’s 4.6x more than the total amount of gold sitting on Comex vaults.

With silver the situation is even more extreme.  The Comex is reporting 29.5 million ozs of silver as registered and 190.2 million total ozs.  Yet, the open interest in paper silver is a staggering 1.08 billion ozs.  1.08 billion ozs of silver is more silver than the world mines in a year.  The paper silver open interest is 5x greater than the total amount of silver held in Comex vaults;  it’s an astonishing 37x more than the amount of silver that is available to be delivered.

This degree of imbalance between the open interest in CME futures contracts in relation to the amount of the underlying physical commodity represented by those contracts never occurs in any other CME commodity – ever.   Historically, when the amount of paper exceeds the amount of underlying commodity that is available for delivery by more than 20-30%, the CFTC intervenes by investigating the possibility of market manipulation.  But never with gold and silver.

The Comex is perhaps the most corrupted securities market in history.   It is emblematic of the fraud and corruption that has engulfed the entire U.S. financial and political system. The U.S. Government has now issued $20 trillion in Treasury debt for which it has no intention of every redeeming.  It’s issued over $100 trillion in unfunded liabilities (entitlements, pensions, etc) for which default is not a matter of “if” but of “when.”

In today’s episode of the Shadow of Truth, we discuss “The Big Lie,” which is also known as the “Comex,” and explain why those looking to protect their savings should be buying physical gold and silver now:

Gold And Silver Are Potentially Explosive

Gold and silver are acting differently right now. Usually when the open interest in the paper gold (Comex) net short of the bullion banks becomes overweighted, it’s a signal that they are getting ready attack the price of gold by triggering massive stop-loss selling by the technically-driven hedge funds.

And through last Tuesday, per the latest COT report, the Comex banks had piled heavily into the short side, feeding paper shorted to the hedge funds. And true to form, the market was attacked aggressively this past week starting Tuesday with the expiration of Comex options. Interestingly, the banks had to wait until after the Comex floor trading closed on Tuesday in order to take advantage of a thinly-traded electronic “access” market that is open for about another 90 minutes after the Comex closes in order to push down the price of gold enough to trigger automated hedge fund algo stop-loss selling.

The attacks on the price of gold persisted through Thursday, resulting in what appears to be a record weekly percentage drop in Comex gold open interest. But this attack resulted in a shallow price decline.  And if you trace the build-up in the bullion bank short position over the past couple of weeks, it appears that the banks were willing to sustain losses on those shorted contracts in order to cover them.  Bill “Midas” Murphy at Lemetropole Cafe first pointed this pattern out to me and I confirmed his theory by tracing out the rise in the commercial short interest with the movement in the price of gold.

At the same time, there has been a massive amount of silver – as reported – moving in and out of the “registered” accounts at the Comex silver vaults.  The silver in the “registered” account is the silver designated to be available for delivery.   On the last two days of this past week, for instance, nearly 30% of the silver held in the registered account was moved into the “eligible” account. The “eligible” account is the account in which silver is allegedly “safekept” for the owner of that silver.

Finally, although the mainstream financial media and the fear porn oriented alternative media has been making a lot of noise about the sudden fall-off in the sales of minted bullion coins, I heard a report from a large bullion dealer who said that, while retail coin sales are slow, his company has been receiving very large orders from very connected quite off the radar types purchasing large quantities of physical silver. The recurring theme from these buyers is a desire to move money out of electronic fiat currency bank credits and into privately safe-kept precious metals in bullion form.

Eric Dubin (The News Doctors) and “Doc” invited me to join them on their weekly Metals and Markets podcast to discuss the latest developments which point to possibility of a big surprise move to the upside in gold and silver that is driven by the physical market:

Animal Spirits Are Percolating In The Gold Market

The use of the term “animal spirits” is most commonly attributed to John Maynard Keynes. But it originates from the Latin term, “spiritus animales” in reference to the spirit that drives human thought, feeling and action. We saw animal spirits at work in gold and silver on Tuesday this past week when the Dow dropped 237 points and gold quickly popped up $16. Silver jumped 72 cents, much to Wall Street’s surprise, on March 16th after the FOMC issued its latest monetary policy statement despite an assurance that the Fed would raise rates three more times this year.

At some point the paper control of the gold market is going to fall prey to animal spirits. I think the reaction of the metals after the FOMC policy release and when the Dow plunged are evidence that “animal spirits” are percolating in the precious metals market. (Excerpt from yesterday’s issue of the Mining Stock Journal)

In the latest issue of the Mining Stock Journal I review a junior mining stock that was heavily promoted last summer ahead of a big issuance of stock. Many of you may own it thinking you sitting on junior with close to 20 million ounces of gold in the ground. What I found when I examined the background of management and quality of the alleged mineralization on the company’s properties, with no plans for advancing the properties, might shock you. This stock is down 50% from its highs last summer and insiders were dumping shares in September before the stock sold off. This is a stock you want to avoid and you can find out more about it by subscribing:  Mining Stock Journal subscription info.

When I asked a colleague and subscriber who invests in junior mining stocks and participates in select financings if he had an opinion on the above-mentioned company, this was his partial response: “No, I have never looked at it principally because of the people behind it, who are well-known to front run their own subscribers.”