Something interesting and unusual has been developing in the silver market for several months. The Comex operators have been throwing a record amount of Comex paper silver at the market in an attempt to control the price. The last time the silver futures open interest was as high as it is now, silver was about to bust through $50. Eric Dubin of The News Doctors published a news brief today on the topic, reprinted below.

When we were laboring through the 2011-2015 bear market cycle, constant snap backs the likes of which silver is producing were never to be seen.

Last Thursday, I published, “Silver, Gold, Miners: Everyone, Back In The Pool.” Mining shares witnessed a bit more pain than I had expected, but silver bottomed off the ~$19.20 level, as discussed. Even with Comex options expiration and central bank meetings this week, speculators taking on the bullion banks are buying every cartel smack-down, yesterday offering the latest example:

When we were laboring through the 2011-2015 bear market cycle, constant snap backs the likes of which silver is producing were never to be seen.

Today, the Japanese yen is appreciating relative to the US dollar as speculators – largely, algorithm-based trading (including things like execution algorithms) – react to a Nikkei news report that fiscal stimulus plans will be smaller than expected. The dollar fell as much as 1.4% in the early market session. This is an ironic case where the short-term impact of the yen carry trade flow and long-term yen debasement from continued fiscal and monetary stimulus are both positive catalysts for precious metals.

Taro Aso, Japan’s finance minister, talked down the report, saying that the government had not yet decided on the size of the package. But the report was enough to send the FX algos into a frenzy, which spilled over into other markets. Japanese policy makers flip-flop, ‘jawbone’ and massage the media just like the Federal Reserve. The BOJ might announce smaller stimulus measures than expected, but Japan’s fate is sealed, and the helicopters are on the tarmac.