Multiple technical signs are pointing to a possible sharp sell-off in stocks. Too be sure, the amount of money the Fed is printing and putting into the financial system might defer the inevitable, but at some point the stock market is going to converge with the economic reality imposed by the underlying fundamentals.
In addition, the open interest in paper gold contracts on the Comex has soared to all-time highs. This has been accompanied by a tripling of dollar amount of “London Gold” from $250 million to $750 million that can be used as collateral for a performance bond requirements (Note: Comex clearing members – i.e. banks and hedge funds primarily – assume full financial responsibility for their trades that are cleared by the CME).
There’s no way to know what “London Gold” means. It could be a paper claim on unallocated gold sitting in a London vault that may or may not have been already hypothecated. Nonetheless, the tripling of this class of collateral suggests the Comex is preparing for open interest in gold contracts to go parabolic.
Silver Doctors invited me onto their podcast to discuss the implications of a fiat currency based financial system that is going off the rails:
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