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India’s Hidden Demand For Gold
Western anti-gold propagandists have been scratching their head over the surprising strength in the gold market despite aggressive Central Bank efforts to push the price lower. Here’s a perfect example of the idiotic articles hitting the internet – this one from Investing.com: Bring Out The Bears: Gold Is Headed Lower. This author refers to gold as “the shiny rock.”
Anyone who’s traded gold for a reasonable length of time knows that simple T/A applications are utterly useless. This author’s work is T/A scatology. I see he operates something called “Dragonfly Capital.” Dear god I hope he’s not responsible for managing other people’s money…
The recent strength in gold is widely being attributed to vigorous “western” demand. Other than the fictitious run-up in GLD’s reported vault holdings, and the record Q1 2016 quarterly demand for U.S. minted gold eagles, it’s hard to see whether or not the west is buying up a lot of physical gold or not.
However it’s been assumed that since early March that India was dormant for several reasons, not the least of which is a general jeweler’s strike over the excise tax implemented on jewelry sales. However these jewelers still have to make a living.
John Brimelow – JB’s Gold Jottings report – featured an article from India which reports that “unofficial” imports of gold into India – aka “smuggled gold” – are estimated to be around 2.5 tonnes per week. Based on the numerous other reports published by JBGT, estimates of smuggled gold into India tend to understate the true amount of smuggling. One of the the benefits to jewelers to using smuggled metal is that they avoid paying import duties and the associated premiums over the spot price, and thereby offset the excise tax.
With the dramatic run-up in paper derivative forms of gold relative to the amount of physical gold available to deliver into those paper claims, it would be a grave mistake for the bullion banks to underestimate the amount of physical gold disappearing into private hands.
Fox Business Goes Full Retard: “Stocks Stabilize”
All morning Fox Business has had a green banner posted that exclaims, “stocks stabilize.” So down 5% in two days followed by a 2.7% bounce in a little more than 1 day of trading is defined as “stabilizing?”
How about the fact that the S&P 500 was down 3.7% on Monday yet the VIX was down 8%?The only way the VIX can drop like that when the stock market is falling off a cliff is if the Fed is shorting VIX futures in large quantities. This theory is confirmed by the fact that the VIX futures shot back up after the NYSE closed on Monday, which can only be explained by after-hours short-covering. Let’s have a look at the trading log at the NY Fed to see what it was doing on Monday…
Yesterday’s spike up was accompanied by extremely low volume. The most heavily shorted shorts on the NYSE were the ones that were up the most on a percentage basis. Clearly this bounce is a hedge fund short-covering squeeze engineered by the Fed.
While the Fed can manufacture upside movement in the S&P 500 and Dow, it is helpless to prevent big sell-offs in certain sectors and stocks within those sectors. Nike (NKE) is down 18% from its 2016 high after reporting a big miss in revenues and orders last night. The entire retail sector as represented by XRT is down nearly 19% from its all-time high close last July. This action reflects collapsing retail sales – a clear signal that the economy is in a recession, notwithstanding the highly manipulated GDP data.
Several homebuilder stocks are well below their 1-yr highs from last August. Despite appearance of “healthy” housing market per the extremely manipulated housing data coming from the National Association of Realtors and the Government, the housing market is finally hitting a wall after being heavily stimulated by the Fed and the Government, with copious amounts of Taxpayer dollars.
When Freddie Mac and Fannie Mae roll-out zero downpayment mortgage programs for lower income “buyers” and when the NAR is spending millions lobbying for credit-relief for debt-riddled college grads, it is a clear sign that desperation has engulfed the housing industry. If the Government has to intervene in the housing market to the extent that is has since 2009, the housing market is anything but “healthy.”
Gold is hitting 18-month highs today because the gold market “smells” Central Bank desperation. It was clear from Draghi’s speech yesterday that the Central Banks are entering the final stage of the currency war: money supply hyperinflation. If you think the purchasing power of your after-tax disposable income is shrinking now, come report back in six months and tell me how it feels.
The Central Banks have painted themselves into a fatal corner. If they don’t hyperinflate the money supply, the markets will collapse. As the markets collapse, it will accelerate the ongoing global – including and especially the U.S. – economic collapse. At some point the situation will become completely unmanageable. At that point the stock markets will collapse and gold/silver will go parabolic.
Government Sponsored Mortgages Go Full Retard: 2008 Redux-Squared
This is a note to me from one of my Short Seller Journal subscribers:
As a 20 year real estate agent, investor and wholesaler in Atlanta, I’d like to add my comment to your analysis. I totally agree that things are not what they seem to be in housing. I despised the NAR [National Association of Realtors] when I was a member because of their “it never rains” housing reports and their confiscatory attitude toward realtor dues and their subversive political activity. I eventually gave up my agent’s license when they started forced PAC contributions in 2010. Edward Pinto of the American Enterprise Institute told me that NAR is spending $55 million a year for lobbying on housing issues. The NAR never met a loan they did not like.
I’ve been working the Atlanta metro housing market since the early 1990’s. I can tell you that this time around is different in that the home buyers I’m seeing in entry level FHA neighborhoods are mostly “minorities” (some are refugees), and virtually every neighborhood in my general area northwest of Atlanta is being sold with 100% financing via USDA loans. There is NO equity in these neighborhoods, and most of the selling prices are as high or higher than 2006-07. The mortgage fees and costs for things like PMI and funding fees are added into the payment along with ever rising tax and insurance payments. The outcome is not going to be pretty.
I do not know when exactly, but at some point, I’m going to make that massive killing in housing stocks that I missed out on in 2009. I knew that crash was coming as early as 2004, from reading mortgage data, but I did not think to short the home builders! This time I won’t miss. Enjoy your work very much.
There you have it. That’s the truth from the trenches. “The NAR never met a loan they did not like.” But guess what? All these 3% to no percent down payment mortgages are being subsidized by you, the taxpayer. Instead of Countrywide originating subprime nuclear waste and dumping it on Wall Street (and into your pension fund), this home finance scatology is being sponsored by the Government through Fannie Mae, Freddie Mac, the FHA, the VHA and the USDA.
Now Quicken – through Taxpayer-sponsored Freddie Mac – is offering 1% down payment mortgages (LINK) that also avoid the use of PMI insurance. The PMI insurance is was a requirement for low down payment mortgages (below 20%), but the NAR and other PACs successfully lobbied to have this requirement removed. The funds from PMI were put into a trust that was used to help cushion blow when low down payment buyers defaulted. It was a thin layer of protection for the Taxpayer. Now that’s been removed.
Most of the homes being sold to actual buyers are now financed with Taxpayer funded subprime mortgages. If you note in the article about the Quicken product linked above, it references that these are not considered “subprime” mortgages thanks to rule changes. We can call a “nuclear bomb” a “snow cone” instead, but it’s still a nuclear bomb.
When a buyer closes on a low down payment house, the buyer is underwater on the mortgage after netting all the costs that are included. Home prices are not going up as reported by Case Shiller and the Government. Look around at all but the hottest markets and you’ll see a plethora of “price reduced” offerings.
This is going to get ugly again. Interestingly, I run into lot of people who agree with me that what’s coming will be worse than 2008. I reiterated a short on a big homebuilder less than two weeks ago that is down almost 9%. Despite the general upward push in the SPX since mid-Feb, I’ve had several picks that are down double-digits on a percentage basis, including a mortgage company that’s down 15% since late March, a consumer durables stock down 17% since mid-April and an auto seller that’s down over 18% since early June. This is because the Fed is concerned with propping up the Dow and the S&P 500 for propaganda purposes. But individual stock sectors are melting down. The home construction and auto sectors will be a blood-bath.
You can access my research with these ideas here: Short Seller’s Journal. It’s a weekly
report for $20/month delivered to your email on Sundays. In recent issues I’ve been reviewing past ideas that have not worked since mid-Feb because of the Fed’s market intervention. Many are better shorts now than back then, as conditions in the general economy have deteriorated since then. I also provide at least one new idea per week.
Subscribers can also access a 50% discount to the Mining Stock Journal.
BREXIT: An Expression Of Political Freedom
In the latest episode of Market Update, we explore the “aftermath” of the BREXIT vote and the fact that the global markets have become manipulated by the Central Banks to the extent that it’s impossible to tell the difference between reality and fraud.
“There had to be hedge funds that blew up on Friday that we’re not hearing about”
CELEBRATE BREXIT
The NWO’ers and U.S. neocons have been out since this past weekend railing against the British populace vote for self-determination. The best thing that can happen for Democracy is for the rest of the EU member countries to line up and fall out of the EU like dominoes.
Why do Hillary Clinton and Joe Biden and the other Establishment U.S. politicians hate the BREXIT decision? Because it completely undermines the U.S.-controlled NATO, which plunders U.S. military hegemony. It also undermines Obama’s beloved TPP Treaty, which removes Rule of Law as it applies to U.S. multinational corporations.
Here’s the attitude that Hillary Clinton supports: “”The British have violated the rules. It is not the EU philosophy that the crowd can decide its fate”. – Martin Schulz, President of the EU Parliament .
If the nationalism which gripped the U.K. last Thursday spreads to this country, it might force real change in this country. That’s something to “hope” for. Graphic courtesy of William Banzai on Zerohedge.com:
Stand Down Merkel, Stand Down Please
said I see no joy, I see only sorrow
I see no chance of your bright new tomorrow
so stand down Margaret, stand down please, stand down
I say stand down Margaret, stand down please, stand down
Stand down Margaret, stand down please, stand down Margaret
I say stand down Margaret, stand down please, stand down
I sometimes wonder if I’ll ever get the chance
Just to sing to my children in a holiday jam
Our lives seem petty in your cold gray hands
Would you give a second thought, would you ever give a damn?
BREXIT Destroys The Gold/Silver Manipulation Cartel
Just a quick note on this referendum as we are in the final minutes of the voting. My sister’s friend is in the army. They came over for dinner tonight and he was asking about the vote and what my thoughts were. I then returned the question and he had said that 90% of the lads in his camp, which are in the hundreds, were all voting to leave. Their reasoning, in a British army camp of lads aged between 18 and 35, was because they don’t believe they should be getting webbed up in wars that we shouldn’t be fighting. He said they pretty much all can agree on the fact that the wars are dictated by Washington, via Brussels, and what they say goes and its not something they support. These were his words and I have to agree. – A British friend of the Shadow of Truth
The elitists had a lot to lose if the BREXIT referendum succeeded. Just like AP declared Hillary the nominee did BEFORE the Calif primary, the WSJ sent out an online article yesterday afternoon saying the REMAIN vote had won. But this last-gasp attempt to rig the vote failed.
The elitist narrative said that BREXIT would take down the British economy. The details of this were never explained but NWO’er, George Soros, warned as much last weekend. This was just another scare tactic used to cover up the fact that a BREXIT would undermine considerably the western elitist holy grail of a one world, one Government system.
The Ruling Body of the EU is the European Council, often described as the supreme political authority. Its members are not elected. It’s the fortress of totalitarian political control the western elitists have been methodically imposing on Europe, the UK and the U.S for several decades. If anything, the BREXIT victory represents a last gasp attempt to preserve democracy and Rule Of Law.
At the root of every political upheaval is indeed are hidden economic issues. The BREXIT should undermine the effort of the western elitists to impose the TPP Treaty, which is designed to advance the confiscation of individual self-determination. But more significantly is the issue of gold and silver:
The day that QE2 was announced by the Fed. That day, that morning, they were just beating the living daylights out of gold. People on the site were like “oh boy, this is going to be terrible”. I said NO, this is what the banks do. They try to reset the price as low as they can before the news because they know they are trapped. – Craig Hemke, Shadow of Truth
This is exactly what has transpired over the past week leading up to the BREXIT vote. Same game, different scenario. Craig went on to say “Ahead of what they knew was going to be gold bullish regardless of the outcome.” [BREXIT vote]
Since the end of 2014, there have been several notable indicators signalling a high degree of stress between the fraudulent paper bullion market used by the Central Banks to suppress the price of gold/silver and the available supply of physical metal to deliver into the paper claims.
One such indicator that is now stretched to an extreme is the Comex, where the amount of paper silver contracts issued represents over one billion ounces of silver. This is more than seven times the total amount of physical silver reported to be sitting in Comex vaults. It’s 45 times more than the amount of “registered” (available to be delivered) silver on the Comex. It’s 25% more than the annual global production of silver.
Likely, the most significant collateral damage inflicted on the NWO’ers by BREXIT is that it will destroy the ability of the western Central Banks to manipulate the price of gold and silver. The Shadow of Truth hosted Craig “Turd Ferguson” Hemke of TFMetalsReport.com to discuss this overlooked significance of the BREXIT victory (Part 1 followed by Part 2):
Part 2:
BREXIT Means Much Higher Gold/Silver Prices
The elitists’ bid to rig the BREXIT referendum failed. Notwithstanding a continuous flow of propaganda sponsored by the elitist-controlled mainstream media showing that the Remain vote win, the public’s voice in England prevailed.
As I suggested yesterday, the BREXIT pandemonium deflected the public’s attention from the collapsing western economies. The most prominent sign of this is the Fed’s unwillingness to raise interest rates just one-quarter of one percent. Today’s durable goods report showed a 2.2% plunge in durable goods orders during May. A drop of .5% was expected. This 17 months in a row of year over year declines in “core” durable goods orders. Freight shipments represent the “pulse” of an economic system. The Cass Truck Transportation Index is in a literal free-fall.
The boost in the U.S. dollar vs. most global currencies will undermine any uptick in export activity that was preliminarily reported for June. The alleged 4.9% unemployment rate shoved down our throats by the Government and Janet Yellen is belied by the fact that the percentage of working-age people in the U.S. is at its lowest point since the late 1970’s, a time when most households were still one-income in nature.
Perhaps most at stake for the elitists is the paper war on gold and silver that intensified when the metals threatened to go parabolic in 2011. But there is evidence that the paper rigging scheme is failing. To the extent that a BREXIT event undermines the euro, one of the collateral consequences for the elitists is that it will hasten the conversion of fiat currencies into physical metal.
But there’s a problem. The most glaring evidence of this problem is the catastrophic issuance of Comex paper silver claims on a shrinking pile of physical silver in Comex vaults. Since January 20th there’s been a stunning decline in reported Comex silver inventory.
Currently, the amount of paper silver contracts issued on the Comex represents over one billion ounces of silver. This is more than seven times the total amount of physical silver reported to be sitting in Comex vaults. It’s 45 times more than the amount of “registered” (available to be delivered) silver on the Comex. It’s 25% more than the annual global production of silver.
I discuss this issue in the latest issue of the Mining Stock Journal, which was released yesterday (Thursday). I present another junior mining stock idea that has still not been discovered by the mainstream mining stock analysts and purveyors of research. You can access the MSJ here: Mining Stock Journal. New subscribers will receive a copy of all of the back-issues plus a discount link for the Short Seller’s Journal.
BREXIT And The Escalation Toward War With Russia
Today’s episode of the Shadow of Truth’s Market Update series covers the use of the BREXIT referendum as a point of deflecting the public’s attention away from much more serious issues engulfing the U.S. and the world. It’s a distraction away from the collapsing global economy, the corrupt U.S. political system and the escalation of U.S. military belligerence toward Russia and China, both of whom are working to remove the U.S. as the global reserve currency in order to flatten the global economic and financial “playing field.”
BREXIT Is Being Used To Deflect From The Economic Collapse
I actually could care less about BREXIT. I have yet to encounter any valid analysis on why the issue matters at all. What is valid is that the BREXIT theatrical show is being used to deflect scrutiny of the continuous economic reports showing that the U.S. economy is collapsing.
The Chicago Fed National Activity index released today plunged to -.51 against Wall Street’s expectation of a .11 gain. Last months data-point was revised lower to barely positive. The way that this index is calculated, it takes a lot to move the needle. A drop from a revised lower .05 to -.51 reflects heavy contraction in economic activity across a broad (85 indicators) spectrum of the economy. The 3-month moving average declined from -.25 – which was revised lower from the original .22 reported – to -.36.
New home sales reported today – for whatever the data series is worth – indicated an 11% plunge from the previously reported number for April, which of course was revised lower. May’s print was down 6% from the revision. Ironically, yesterday the National Association of Realtor’s Chief Economic Clown was extolling the virtues of new home construction and sales activity. Oops.
I suggested yesterday that existing home sales report was highly overstated by the seasonal adjustments imposed on the data collected. The Census Bureau, which prepares the new homes sales data series, has admitted in the past its estimation and adjustment models tend to overstate sales when actual sales are in a downtrend. Ergo, the incessant downward revisions of previous reports. Same with existing home sales, as the NAR uses the same statistical modelling package as the Census Bureau. The NAR’s report yesterday contained a significant downward revision for April’s report, not coincidentally.
To be sure, there are still some hot pockets of housing activity around the country. But most of the large economic areas are experiencing falling demand, falling prices and rising inventory, especially in the upper price segment of the market. The collapse of the current housing bubble will be even more spectacular than the last bubble collapse.
The U.S. economy is collapsing. In the “inside out” world of U.S. financial media Orwellian propaganda, today’s jobless claims number is being used to substantiate a “tight labor market.” That’s a complete fairy tale. The reason jobless claims are historically low right now is that the number of workers as a percentage of the workforce who qualify to apply for benefits when they get fired is at a historical low. This fact is substantiated by the historically low labor participation rate and the percentage of the workforce that is now part-time. Part-timers do no qualify for company healthcare or unemployment insurance. It’s that simple. the I would question the data if jobless claims were high.
So the entire financial world is focused on what is largely an irrelevant referendum on whether or not the UK will remain in the EU. Meanwhile, the rug is being pulled out from under the entire western economy, including and especially the U.S. economy.
More On Housing – 2008 All Over Again
This commentary is from a subscriber to my Short Seller’s Journal:
The 3% down loans seem to have brought in a lot of first time buyers into the market. I live in the east bay area of California, which is more affordable than San Francisco, or the South Bay area but still painfully expensive nonetheless. Rents are now the same as a mortgage payment on a home in the exurbs. So a lot of people seem to be buying for this reason. They only look at the monthly payments but overlook the fact that when financial markets seize up and the music stops, you could be left holding the bag on a hugely upside down mortgage and can’t get out of a 30 year commitment by selling.
A friend of mine, who is a borderline novice in financial matters, just bought a home. He has meager savings and has jumped on the 3% down bandwagon. This is the guy who until I told him to pay off his credit card balances because of the usurious interest rate, had no clue the damage they were doing to his finances. He was making minimum payments on them because he wanted to build up his savings – I explained to him how by earning 0.01% interest and paying out 18-24%, his savings were getting depleted every month.
The Bottom line is people who are not too financially savvy are being lured into the housing market by the banks. I don’t know how long this 3% crap has been going on, but it seems that Banks are desperate and looking for newer segments of people to swindle.
Everyone has probably seen the report on NYC high end real estate posted in Zerohedge – LINK. While the suburbs in Denver are still hot because of the huge influx of people moving here from California, I’m seeing the same price cuts and inventory build-up in Denver that is described in the ZH piece. I get listings on just one central Denver zip code. Yesterday alone i received two price changes of 5% on listings over $850k.The inventory in that price segment is bulging. Over the weekend I was hit with more than 20 new listings and price cuts all across the price spectrum. I have received six more today – 1 new listing and five price reductions.
Now that the NAR is begging the Government to give debt-bloated college graduates even more debt to buy a crappy starter home, I can smell the desperation to keep the housing market’s “gerbil” running on the wheel. But the gerbil is like a meth-addict that has been overdosed for too long with near-zero interest rates and recklessly lascivious Government mortgage subsidies. Like the gerbil, the housing market is about to seize up and re-collapse. It will be an event that is much more horrific than what occurred in 2008.
The mining stocks are one economic convulsion away from from more than doubling in value. – “Hal,” long-time friend/colleague