Tag Archives: TF Metals Report

Is A Precious Metals/Mining Stock Sell-Off Imminent?

Silver is up 25% YTD through last Friday.  I have not checked every commodity and stock index, but if silver is not the best performing asset YTD, it’s in the top three.  What’s more remarkable is that this move has occurred despite vociferous anti-gold/silver propaganda flooding from Wall Street and the media.

The current “meme” is that the large net short position by the bullion banks against the large net long position of the hedge funds has set the market up for another predictable price raid by banks.   I do not know if the banks will be able to pull it off yet again.

Depends on whether or not the hedge funds have stop-losses set that the banks can smash with enough paper to trigger them or whether the hedge funds will keep buying the paper that the banks print. In the past, it gets to a point at which the hedge fund computers start selling and the banks can successfully attack the stop-losses. that’s what causes the waterfall drops.

Up until now every attempted price raid since February has been met with aggressive buying, especially in the junior miners.  Too be sure, the banks – under the direction of the Fed under the direction of the BIS – are getting geared up to take another run at taking down the price of gold/silver.   Whether or not they will be successful is another matter. There is a lot of cash on the sidelines which recently exited the stock and high yield bond markets and is looking to pile opportunistically in the PM sector.

Craig “Turd Ferguson” Hemke invited me on to his A2A  Podcast Show last week.  We engaged in a lively discussion about the precious metals and a lot of other timely issues which will affect the markets.   You can listen to the podcast by clicking here – TF Metals Reprot –  or on the image below.  Download as an MP3 here:   LINK

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SoT – Craig Hemke: Demand For Physical Gold/Silver Will Break The System

The 50 day moving average in gold has turned up and it has bullishly crossed through the 100 dma – it has also bullishly crossed through the 200 dma…It’s almost like the HFT hedge fund programs have been flipped from “sell every rally” to now “buy every dip” because the technical picture is so good. – Craig “Turd Ferguson” Hemke on the Shadow of Truth

The debate raging in the precious metals community is if and when the a big raid on the precious metals market will commence.  Today, for instance, gold had drifted higher in overnight trading only to be smacked pretty hard when the Comex opened.   That’s nothing new.  But what’s new, given the way in which the precious metals market is set up right now, is that after being taken down $12 by the criminal traders on the Comex, gold grinded higher until it was only down a couple bucks by the time the stock market closed.  Even more interesting is that fact that the mining stocks (HUI Amex Gold Bugs Index)  rejected repeated attempts to take them into negative territory and they finished up over 6 points – 3.6% – on the day.

The trading pattern of the precious metals sector – at least for now – has defied all expectations of the market given that the technical factors currently in place have historically ushered in a vicious takedown of the sector.

This data that I refer to when I talk about the bank picture, whether its the Commitment of Traders report or the Bank Participation report, it’s all dubious crap anyway because it’s generated by the criminals at the CFTC…when they crank out these reports, we’re supposed to take them seriously in the first place? The CFTC is a criminal co-conspirator [in the precious metals manipulation scheme] – Craig “Turd Ferguson” Hemke, SoT

A big variable in the expectation of a big sell-off in gold and silver is the COT “structure.”  As of last Tuesday, the “Commercial Sector,” which is primarily the bullion banks, is net short 171,000 gold future contracts.  The hedge funds  segment of the COT is net long 104k gold future contracts.  The “other reportables” and “non-reportable (retail trader) segments make up the rest of the long side of the bullion bank short position.

The net short of the bullion banks is 17.1 million ounces. Currently, the Comex vaults are showing 377k ounces of gold in the “deliverable” account and 6.8 million total ounces. This ratio of short interest to the amount of physical underlying is absurd.  Technically it’s illegal because, as Craig discusses in the interview (see below), the CFTC continuously defies the laws in place and enables the banks to skirt mandated position limits on the Comex.

What will happen if one of these days the hedge funds decide to stand for delivery?  If just 50% of the hedge funds stand for delivery?  While it’s true that in any given delivery period that, at most, 1% of the long open interest stands for delivery, the laws of probability suggest that one of these days a significant portion of the longs will decide to take delivery.  This will bust the Comex.

In the interview session below, we discuss this issue with Craig and several other factors right now that are affecting both the markets  and the Central Banks ability to manipulate the markets.  At some point the demand for physical gold/silver will break the system:

Someday something will change and the confidence scheme will fail. Every uptick [of gold] increases the pressure on that confidence scheme which is why the banks are fighting it so hard…in the end they are just not going to be able to…Craig “Turd Ferguson” Hemke on SoT

Was The July 19 Paper Raid On Gold Implemented To Remove Gold From GLD?

Craig Hemke of the TF Metals Report wrote an article which has sniffed out the probable motive behind the shamelessly blatant paper smash of gold on Sunday evening July 19 at one of the quietest trading periods of the week:

As a readily-accessible source of instantly-available gold, The Authorized Participant Bullion Banks are once again redeeming their 100,000 share lots for physical gold from the GLD “inventory”. That this gold is then utilized to settle physical demand from around the globe is hardly arguable, given recent history.  – Craig Hemke, TFMetalsReport.com

I believe Craig has hit the nail on head here.  Ever since first reading James Turk’s original dissection of the GLD Trust legal structure from the Prospectus, it’s been pretty obvious that GLD was created to act as a “holding reservoir” of physical gold that would be used by the Central Banks/bullion banks as a source of gold to required to settle LBMA forward commitments to buyers (i.e. China, India and Russia) who would refuse to settle in cash.  99% of all Comex trades are settled in cash.

The one unresolved question, for me anyway, is the issue of how much gold really still exists in unencumbered (e.g. leases or hypothecation agreements) physical bar form in HSBC’s vault or the vaults of designated subcustodians.  It’s an question that won’t be answered until the system implodes because GLD, by design, has made it impossible for anyone to conduct a bona fide, independent audit.

This is an excerpt from a post I wrote on the The Golden Truth, the predecessor blog to Investment Research Dynamics – it looks like my analysis was correct back then which reaffirms Craig’s analysis of what happened two weeks ago:

We have witnessed a stunning drain of gold from the GLD ETF trust.  Through last Friday, an incredible 479 tonnes – more than 35% – of GLD’s gold has been removed and has disappeared, most likely to Asia – in the space of about 10 months.  The biggest chunk of that 479 tonnes was removed shortly after Germany’s Bundesbank issued it’s feeble and hopeless request to the U.S. that the Federal Reserve start shipping back some portion of the 1500 tonnes of gold that is supposedly being “safe-kept” on behalf of Germany by the Fed in its vault in New York City.   Gold luck, Angela…

I have looked at GLD suspiciously ever since James Turk issued the first analysis of GLD’s prospectus back in 2004.  Those of us who are familiar with securities laws and investor “safe guards” supposedly enforced by the SEC were absolutely shocked that the SEC approved the GLD prospectus as it was filed because of the egregious lack of GLD sponsor and custodian legal accountability standards typically required by the SEC for publicly traded securities.

Given this fact, I believed at the time that GLD was a scheme devised to suck  in retail and institutional cash that might otherwise flow in massive quantities into actual physical gold that would be safe-kept in private vaults in this country.  Although GLD has a mechanism to enable investors with a minimum of 100,000 shares to convert those shares into gold that would be delivered to the investor, the procedure is exceedingly cumbersome and expensive and there’s a mechanism embedded in the language of the prospectus that enables the trustee of GLD to deny such requests.

But I also knew – through GATA’s invaluable research – that there would eventually be a shortage of physical gold that would be available to allow the western Central Banks and bullion banks to maintain their oppressive and incessant manipulation of the paper gold market for the purposes of maintaining a cap on the price of gold, for the purposes of defending the credibility of the U.S. dollar.  I figured that at some point the gold in GLD would used for this purpose once the Central Bank stocks of gold were largely if not fully depleted.  In this context, please recall that about three years, the ECB system, which had been selling 400 tonnes per year on average, pretty much stopped selling any gold.  That’s sign-post #1 that I was right.

Then along comes the Bundesbank in early 2013, with a request that the Fed start shipping Germany’s gold held in in New York back to Germany.  That’s when all hell broke loose:

(The graph above is from the TFMetalsReport.com)

There’s something really wrong with that picture because the intuitive response from the market by Germany’s request of the Fed should have been a quickly rising price of gold.  But as you we all know, the Fed defaulted on the request – for all intents and purposes – and that’s when the massive drain of gold from GLD commenced.

The truth is that my original hunch was correct.  100% correct.  The gold in the GLD trust is being used to satisfy the enormous physical delivery demands from China and the other big gold buying countries because the western Central Banks have run out of gold to deliver.  That is an unmistakable fact. Reports and data ad nauseum have been published in the last six months describing and verifying the voluminous, unprecedented amount of gold bars that have been moved – literally physical transferred – from the Comex in NY and  the LBMA and Bank of England vaults in London to Switzerland and then on to Hong Kong, where it flows to its ultimate destinations in China.  Anyone who would deny that this is the case has a blatant and catastrophic disregard for the truth as supported by provable facts.

So the question is, how much longer can the depletion of gold from GLD continue before this scheme falls apart?  Let me first say that it is likely that the U.S Government’s “Waterloo” in this situation will be the gross miscalculation – when GLD was originally devised – of the growth and size of China’s appetite for physical gold for which actual physical delivery is demanded.

Along with all the other manipulated schemes of the western Central Banks/Governments, I believe that the GLD fraud is starting to unravel.  I would argue that the ability to execute successfully the intervention  in interest rates, currencies and equities requires the unfettered ability to manipulate the price of gold.  In my view, the western Central Banks are losing their grips on gold and this will likely bring the entire western financial system down.

SoT Ep 30 Craig Hemke: The U.S. Has Come Off The Rails – Mass Civil Unrest Is Coming

In a time of universal deceit – telling the truth is a revolutionary act. – George Orwell (Eric Blair)

All China has to do to flush our system down the toilet is to tweet out: “bid wanted in comp for $1.2 trillion Treasuries.” That’s it. Our system is done – we’re dust. – Shadow of Truth

They’re at the point now (the central planners) where they are just openly making things up and manipulating data just to game whatever they want to do. It is surreal to watch. – Craig Hemke, Shadow of Truth

When a nation owes another nation a million dollars, the debtor has a problem. When a nation owes another nation $1.2 trillion dollars the creditor nation has a problem. How does the creditor nation, China, handle this fact? What if China began using the interest payments from the debtor nation, the United States, to finance a new global bank, like the BRICS Bank and the AIIB? What if the creditor nation, China, began using the interest payments, roughly $300 billion annually, to build a New Silk Road that solidifies relations with their neighbors, creates commerce for both the neighbor and China and used some of the funds to build up their military? This would create a natural exit strategy for China that allows her to walk away with a clean break from the parasite nation, the United States. No harm, no foul.

Isn’t this exactly what we are seeing unfold today? Each of the scenarios described above are in motion and racing towards completion. This is unfolding as the Chinese, along with the Russians, are acquiring all the gold and silver that is being made available on the planet. The Chinese have been encouraging their citizens to acquire gold for several years. If you think for a minute the Chinese are acquiring this gold to make more jewelry you are in for a rude awakening. “He who has the gold makes the rules.” – Anonymous.

AUDIO MP3: – Download ALL Audio MP3’s for Shadow of Truth interviews at SilverFarm.podbean

As Chris Powell explained in a recent interview the Chinese are not acquiring all this wealth in the form of gold for the benefit of the goldbugs. The Chinese are acquiring all the gold they can find to reign in the power. Gold is loyal to everyone and to no one. Gold is money and has been money for approximately 5,000 years. “He who has the gold makes the rules.” – Anonymous

Will tomorrow look like today? Will there always be “just-in-time” delivery of groceries, gasoline and every other aspect of current U.S. economy? What if one small piece broke, like an interest payment to the Chinese? What about something a little smaller, like a dirty bomb that explodes at the wrong time in the wrong place, like somewhere in a Chinese province? What effect would this have on the flow of goods from China, the manufacturer of the world, if it were determined the U.S. government was involved with the “dirty-bomb”? Where would you get your “stuff”? What would your world look like?

Gold and silver are manipulated markets. They are tiny markets, especially in comparison to something like the Dow Jones or bond market. The impact these tiny markets have on their giant sized brothers is enormous. Why else would the banking cabal devote so much time, resources and manpower to their manipulation. The reason is very simple. Gold and silver are real, tangible money and a representation of real wealth.