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China And Russia Look To Take Over Global Gold Trading
BRICS countries are large economies with large reserves of gold and an impressive volume of production and consumption of this precious metal. In China, the gold trade is conducted in Shanghai, in Russia it is in Moscow. Our idea is to create a link between the two cities in order to increase trade between the two markets,” First Deputy Governor of the Russian Central Bank Sergey Shvetsov told TASS – RT.com, April 19
The article in RT.com from which the above quote is sourced surprisingly did not receive a lot of attention from the alternative media. Perhaps it was overshadowed by the highly anticipated move by China to commence fixing the price of gold on the Shanghai Gold Exchange in yuan. I suggested that we would not see an immediate impact on the price of gold, which we have not, but that the move was part of a larger plan by China to “de-dollarize” the world.
Also largely ignored by the alternative media was the fact that Russia added another 500,000 ounces of gold to its Central Bank reserves – data provided by Smaulgld.com. To put this into some context, currently the Comex, which is sporting over 50 million ounces of paper gold open interest, is reporting 643k ounces of gold designated as available for delivery (“registered”). In 2015, Russia added a record amount of gold tonnage to its Central Bank stash.
I would argue, as would many, that China and Russia are strategically and methodically weaning the world off paper gold and fiat currencies and are looking to officially remove the dollar from its reserve status and to re-introduce gold into the global monetary system – without triggering WW3. Of course, this would explain the Obama Government’s recent military belligerence toward both countries…
Dennis Gartman, among many others, has expressed anxiety over the net short position in gold futures by the “commercial trader segment” bullion banks per the Commitment of Traders report. The fear is that the banks are getting ready to attack the price of gold with another hedge fund “long liquidation” operation. This, of course, is a trading pattern in the precious metals that we have become accustomed to enduring since the bull market began in 2000/2001. Obvious manipulation that for some reason seems to be undetectable by the Government regulators (CFTC) who are paid by the Taxpayers to enforce laws.
I looked at some statistics from the COT data that goes back to 2005 (compiled assiduously by one of the partners in the investment fund I co-manage). While the net short position in gold futures held by the bullion banks, 240,121 per the latest COT report, is quite a bit higher than the average net short over the period (-161,781), it’s not even close to the highest net short of -308,231 in December 2009 or -302,740 in September 2010. In 2009, gold sold off for a bit after that -308k reading but in 2010 gold continued higher toward $1900 after the -302k reading.
The point here is that the relative net short position held by the criminal bullion banks is not necessarily the best predictive metric with which to forecast the next move in the price of gold. Furthermore, it’s quite possible that the physical gold market activities being conducted by China and Russia will act as a counter-force to the manipulation efforts exerted by the western Central/bullion banks.
I have argued for years that traditional chart and t/a analysis applied to the precious metals is thoroughly useless because of the high degree of intervention by the Central and bullion banks.
With that reservation about using charts, I wanted to present a couple charts of gold and one of the dollar because, in my view, gold is potentially set up for a monster move higher and the dollar appears to be potentially headed off the proverbial cliff (click on images to enlarge):
The graph on the above-right is a 10-yr weekly of gold. You can see that over this time period, the price of gold is still exceedingly “oversold” per the TRIX indicator. The graph on the above-left is a 1-yr daily which shows that gold has been “oscillating” laterally in a consolidation formation. It’s brushing up against its 50 dma (yellow line). Of course, at this point, the price of gold could “break” either way, higher or lower. Perhaps even a quick trip down to its 200 dma (red line). Having said that, the longer term graph of gold, combined with the massive demand for physical gold from Russia and China, suggests that every manipulated price hit should be aggressively bought. You can see the dollar (lower left graph) is positioned treacherously, as it has traded well below its 50 dma and could be headed lower. Certainly the ongoing economic and political deterioration of the United States is not giving anyone a reason to buy dollars.
There’s been a lot of “chatter” about whether or not the mining shares, which have had a tremendous run since mid-January, are “overbought.” The general consensus is that the mining shares are due for a pullback and I know a lot of my subscribers are hesitant to buy right now. My view is that, in the context of the brutal beating inflicted on the miners since March 2011 by overt manipulative forces – from both official entities and predatory hedge funds – it’s impossible to determine a true measure of “overbought” because the mining shares have been oversold for nearly five years.
I’m in an email group with a very impressive roster of precious metals investment and analytic professionals. One of them who is rather well-known made this comment today, which I thought summed up the situation perfectly: Now everybody is desperately waiting on the sideline to build up a first positon in gold, silver and miners, but nobody wants to buy into the rally, but rather buy into a correction… that’s why I am convinced, that every bigger dip will be bought and gold might head to 1,400-1,500 by year end!
The next bi-monthly issue of my Mining Stock Journal will be released Thursday. I have a sub-50 cent junior exploration stock to present with a market cap that is likely 1/10 the intrinsic value of the Company given the amount of proved gold and silver it has already discovered. This company is self-funding for now as well. You can access the next issue plus I’m offering the four previous back-issues (for now) by clicking here: Mining Stock Journal.
Gold/Silver Manipulation: The Foul Smell Of Desperation
Nearly 40 million ounces of paper silver were launched at the Comex yesterday in the space of seven minutes, which triggered a 92 cent waterfall in the price of silver; over 118 million ounces of paper silver were dumped on the Comex today (April 22) between 11 a.m. and noon EST. This market intervention typically occurs after the bona fide physical precious metals in the eastern hemisphere have shut down for the day.
The baseline assumption of modern financial theory is that fiat money is sound and markets are efficient. Neither of those suppositions are valid. The markets have been completely stripped of any legitimate price discovery function. You can’t tell me with a straight face that Tesla, which is now burning cash at a rate of half a billion a year is worth $33 billion – or 8x revenues – any more than you can tell me that junior mining stock with $500 million in proved gold/silver resource in the ground is worth only $24 million.
Gold and silver have been “climbing a wall of worry” for several weeks now. The traditional signs of an imminent manipulative attack on the metals (open interest of shorts vs. longs on the Comex, chart formations, etc) have defied the behavioral patterns of the past 15 years. Several “chartists” and Wall Street analysts, notwithstanding their boorish market prediction revisionism, have been been humiliated by the price-action in gold/silver since mid-January.
Several of us who have researched, traded and invested in the precious metals markets since the inception of the precious metals bull market believe that the bullion banks may have a bigger problem with sourcing physical silver for deliveries right now than with gold. The Comex bullion banks have been hitting the price of silver hard with paper contracts the last two days, in a desperate effort to beat down the price 
appreciation of silver during the overnight physical market activities of the eastern hemisphere bullion markets.
(click image to enlarge)
Currently there are are 56,863 open May silver future contracts representing 284.3 million theoretical ounces of physical silver on the Comex. Against this is 31.9 million reported ounces of physical silver in Comex vaults that have been designated as available for delivery against these open contracts. In other words, the bullion banks have thrown nearly nine ounces of theoretical paper silver at the market for every ounce of alleged physical silver that could be delivered into these contracts.
Tuesday is options expiration day for May Comex gold/silver options. Typically options expiry is one of the triggers for a heavy onslaught of bank manipulation on the Comex. With a brief glance as the put/call open interest in May silver options, it looks like the bullion banks – i.e. the entities that are short May silver options – are motivated to push silver below $17 (based on the amount of open calls vs puts at $17) by the close of silver trading on Tuesday.
Similarly, “first delivery notices” for Comex gold/silver contracts go out after the close next Thursday. With the paper open interest in silver as of today 900% greater than the amount of physical silver designated as available for delivery, the Comex bullion banks will make every effort to shock and awe the hedge funds into liquidating their long paper silver positions. We saw this yesterday with the 92 cent silver smash going into the Comex open. Silver open interest dropped over 14k contracts yesterday. This is one of the many manipulation games the bullion banks have been playing with the hedge funds over the last 15 years.
Because the CFTC and the Justice Department look the other way when it comes to enforcing market regulations as they should apply to the Comex – because those same regulations are actively applied to every other CME commodity product – true price discovery in the gold and silver markets has become an impossibility. But we have 5,000 years of historical evidence which suggests that market interventions always fail. And when they ultimately fail, they fail spectacularly.
India’s jewelry industry is re-opening after a strike since March 1st that shut down India’s gold import machinery. A sleeping elephant is waking up starved for metal as India heads into its second largest seasonal buying period of the year. This will make it more difficult for the banks to manipulate gold/silver prices using paper, which means the illegal trading activity of the next few days may be the banks’ last opportunity to cap the metals until India goes back into hibernation in the summer.
I added to high octane junior mining stock positions in the fund I co-manage today and I will be presenting an insanely cheap junior mining stock with 5 million ounces of proved gold, have of which is in the form of gold-equivalent silver ounces in my next issue of the Mining Stock Journal next week. For a limited time, all new subscribers will have access to the back-issues published since the March 4 debut.
Guest Post: Precious Metals Bull Snorts, Resumes Move
The character of the precious metals market has changed. The manipulation efforts using paper derivatives masquerading as gold and silver futures contracts is losing traction. I believe that the supply/demand dynamic in the physical gold and silver market is beginning to drive the price. Control over the price of the metals is likely shifting from NY/London to Moscow and Shanghai. I’ll have more to say about soon.
The News Doctor’s Eric Dubin posted commentary and analysis of the blatant paper attack on the price of gold and silver that took place about 40 minutes into the floor trading session on the Comex on Thursday morning (April 21). The initial price attack occurred in the space of about seven minutes in which $2 billion of paper gold and 1,218 tonnes of paper silver were dumped on the Comex. Over the last five years, an attack like this was usually the start of bigger systematic price-takedown of the precious metals over a period of several days. However, in the last couple of months, the market seems to shrug off these paper attacks and head higher.
“We’re setting up for an epic battle, and if silver keeps motoring forward, we may very well have an $18 handle on silver smack in the middle of the expiring contracts window. Buckle-up! There’s going to be fireworks, one way or another” – Eric Dubin, The News Doctors You can read the rest of Eric’s commentary here: The Precious Metals Bull
The Kinder Morgan Myth Shrivels With Each Quarter
The KMI fantasy continues to shrivel, along with its “vaunted” DCF and its CAPEX. The CAPEX narrative is part of what fueled the myth surrounding KMI. Richard Kinder is self-serving Ponzi master who learned his trade under Ken Lay at Enron. He was sucking money out of KMI at a rate of close to half a billion dollars annually by the time the banks forced him to slash and burn the dividend.
Per yesterday’s earnings report for its Q1 2016, Kinders revenues and earnings continue to decline. What happened to the famed “stabilility in earnings and cash flow” – the narrative promoted by Wall Street, the media and the Company itself? The legend had it that Kinder’s contracts insulated the Company’s cash flow from volatility in the energy market. Operating income continues to plunge, falling 24% from Q1 2015 to Q1 2016.
But IRD did some bona fide research and buried in the Company’s 10-K – a place that no self-serving Wall St. analyst would ever tread – is a disclosure revealing that more than 25% of Kinder’s revenues is sourced from buying and selling natural gas and CO2 in the State of Texas. Furthermore, Kinder discloses that its revenues and cash flow are highly correlated with the directional movements in the price of oil, natural gas, NGL (natural gas liquids).
The other part of the myth that is imploding is the CAPEX story. The stock price was fueled by the narrative that Kinder would spend money to make money. But now not only has the Company already lowered its cash flow guidance for 2016 – guidance that was promoted vigorously when it announced Q4/yr-end 2015 results – but Kinder has chopped down its CAPEX spending guidance as well. Why? Projects were cancelled because there were no customers for them. KMI was borrowing money every quarter to fund CAPEX and the dividend. Yes, borrowing money to pay money out to shareholders, namely the Chairman.
Kinder’s debt load net of cash actually increased in Q1 from the end of 2015. It’s tangible book value (stripping out goodwill) is $5.31 per share.
My Company report on Kinder Morgan backs up every assertion I make above and lays out a view of the Company that will surprise most investors, especially the ones who are still “stuck” in the stock. I explain why Kinder Morgan had become a Ponzi scheme dressed in drag in an analytic presentation that you not find like this anywhere: You can access my report here: KINDER MORGAN.
Early Look At The Proposed New “Face” Of The $100
The history of U.S. dollar bills is that past Presidents have been featured on them. With just a few exceptions, most of them have featured men who were original Founding Fathers as well as Presidents. For some reason Obama has decided to change this and ordered Harriet Tubman to replace Andrew Jackson on the $20 bill. I guess in the face of betrayed campaign promises and a largely failed Presidency (Obamacare is starting collapse), changing up the face of the fiat currency will be Obama’s legacy of “change.”
Below is the rumored change coming to the $100 bill, otherwise known as “c-notes, Bennies or honey-bees:”
SoT Market Update: Gold, Silver And The End Of The Biggest Ponzi Scheme In History
The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation – which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system. Or the banks stop before this point is reached, voluntarily renounce further credit expansion, and thus bring about the crisis. The depression follows in both instances – Ludwig Von Mises
I re-watched the movie “The Big Short” this past weekend. It’s worth watching twice if you are interested in learning about how corrupt the entire U.S. financial system is. Now, my guess is that a lot of viewers left the theatre after watching the movie thoroughly horrified by what was presented in understandable form to the typical “main street” American.
However, most are likely unaware that the original sources of corruption and fraud were never addressed. In fact, if anything, legislative “reforms” like Dodd-Frank did nothing more than enable the big banks to continue using derivatives and Ponzi-scheme financial structures as mechanisms to continue sucking wealth out of the system. Perhaps what’s most humiliating about this is that Obama Government and Congress blindly let former Goldman Sachs CEO, Henry Paulson, in his capacity as Secretary of Treasury give these banks an $800 billion blank check from the Taxpayers to continue on with their criminality.
The credit and derivatives problems are, in reality, are worse now than they were in the period leading up to the financial market collapse. The legislative “reforms” served two purposes: 1) allow the banks to continue their ways under the illusion that the problems were fixed; 2) provide the banks with accounting tools which enable them to better hide the fraud.
It was reported today that the Central States Pension Fund, which handles the retirement benefit programs for Teamster truck driver unions across several large States, has formally filed an application to cut benefits up to 60%. It stated that the fund would be empty by 2025 if the application is denied.
This reflects how catastrophically underfunded this pension fund was in the first place. And make no mistake, if you are covered by a large institutionalized pension fund, public or private, your fund is equally as underfunded – it just has not yet been affected but it will be sooner or later.
This begs the question: with the stock market at near-record levels and Treasury bond prices at all-time highs, how is it at all possible that these pension funds are still underfunded to this extent?
The truth lies in the fact that the entire U.S. financial system is one gigantic Ponzi scheme. The Shadow Truth podcast show presents another Market Update in which we discuss the fact that the U.S. financial system is a giant mirage that has been fabricated by the Federal Reserve and the U.S. Government. It’s not a question of IF the next financial market collapse will occur – it’s a question of WHEN:
Silver Is Off To The Races Again
What we don’t know about the gold/silver price admissions is what it has stirred up behind the scenes … meaning how it might be, or will, affect the manipulation of the precious metals in the United States, where the real big issue resides. There is no telling what could be percolating at Gold Cartel headquarters … or what just might be TOLD to them. – Bill “Midas” Murphy from tonight’s Midas report (LeMetropolecafe.com)
There’s a lot of factors going on right now that could be pushing gold/silver higher over
and above the inexorable headwind of Central/bullion bank market price manipulation.(click on graph to enlarge).
Today’s move up could be attributable commencement of the yuan/gold price fix rolled out by the Shanghai Gold Exchange. But this was a known event well ahead of time and the market theoretically should have priced this in. Same deal with the Deutsche Bank lawsuit settlement. But that event hit the tape last Wednesday and gold/silver yawned.
Something a lot more profound seems to have developed behind the thick fog of Orwellian smoke billowing from the western Central Banks and Governments. I believe the financial system is collapsing. This explains the Fed’s frenetic attempt to keep the stock market propped up. This effort has become about the only part of the Fed’s activities that is transparent.
Phillip Kennedy – Kennedy Financial – hosted me on his Youtube program to discuss some of the factors that are contributing to the surprisingly strong move higher in the precious metals sector. Phil blends sharp insight with humor to produce an informative and entertaining show:
I recommended a silver stock in early January that has gone up over 600% since its January 10th close. Shortly after that recommendation to subscribers of the Short Seller’s Journal, the Mining Stock Journal was introduced. I’ve featured three other junior stocks which easily have the same upside potential as the silver stock. “I got the email with the past reports. Thank you very much. This is an incredible value” – new subscriber comment.
Right now I’m offering all of the back-issues to subscribers (debut issue was March 4th). I’m already working on the next issue and the stock I’ll be featuring is not well known (for now anyway) and is irrationally undervalued. You can access these reports here: Mining Stock Journal.
The Deutsche Bank Gold/Silver Manipulation Settlement: All Show, Little Tell
Until I’m proven wrong, it is likely that the Deutsche Bank gold/silver manipulation settlement with investors will not change the ongoing Central Bank/bullion bank manipulation of the gold and silver markets.
To begin with, the charges and settlement relate to DB’s participation the LBMA gold/silver daily price fix, from which DB removed itself in early 2014. Deutsche Bank is de facto insolvent. It would have collapsed under the weight of bad assets and fraudulent OTC derivatives had western Central Banks not cooperated to keep the corpse alive. Letting DB hang for the sins of the other players was an easy decision.
It’s the Comex that is more relevant than the LBMA with regard to the highly methodical Central Bank intervention in precious metals trading. The DB settlement isn’t going to change anything – just the names of the players that step in to replace any banks removed from the LBMA. Why did they wait several months after the LBMA was “reformed” to announce this deal? Because now they can say “we’ve taken measures to make sure banks like DB can’t manipulate the fix anymore.” Truth is, all they did is make the process even more opaque and even more susceptible to rigging schemes. Look at what happened to silver with the 84 cent price plunge at the a.m. silver fix on January 28th. This was after the so-called reforms were put in place.
One positive note with DB’s settlement agreement: It’s further vindicated GATA’s efforts to expose the truth about the manipulation that is endemic in the daily trading of gold and silver futures, forwards and OTC derivatives. Eric Dubin’s (News Doctors) and Jason Burack’s (Wall St For Main St) Welcome to Dystopia show hosted GATA’s Bill”Midas” Murphy to discuss the DB settlement and factors that are driving gold, silver and mining stock higher right now:
I hope I’m wrong on my assessment of the significance of the DB precious metals manipulation settlement. But everything that has occurred in the financial system over the past couple of decades has happened for a reason. At the end of the day, the outcome of what appears to be an event that is beneficial to society ultimately turns into yet another device by the big banks to screw the public.
Gold Looks Ready To Spike Higher – JPM Gets It Wrong Again
These are the most gold-friendly readings in almost 2 months. India is getting ready to participate in the world gold market again. India’s gold imports drop 80.48% to $972.9 million in March documents what a heavy blow the Indian gold retailers strike struck to global gold. JBGJ guesstimates March imports at around 24 tonnes meaning some 120 tonnes of demand was lost in March. – From John Brimelow’s Gold Jottings.
The quote above from Brimelow’s Gold Jottings report is in reference to the fact that gold import price premiums in excess of the import duty India’s gold market began to appear again.
Since the big move higher through early March, gold has been surprisingly “resilient” up to this point from repeated attempts to manipulate the price lower. The most common occurrence has been attempted “flash crashes” during early Asian trading. Interestingly, gold has tended to rally after the London a.m. fix and into the NY Comex floor trading hours. Perhaps most surprising is that the bullish activity has occurred in the absence of demand from India. India’s jewelers have been on strike since March 1, which has effectively closed down India’s massive gold import machine (excerpt from the latest issue of the Mining Stock Journal).
The graph above (click to enlarge) shows the big “cup/handle” formation that has formed in gold since its extraordinary move since mid-December. “Extraordinary” because the gold market has had to endure strong headwinds in the form of a literal avalanche of anti-gold propaganda from the financial media, financial cable networks, Wall Street banks and even some of gold’s supporter.
As you can see from that graph, gold has been “oscillating” sideways, digesting the 21% bottom to top move it made in a short period of time. Perhaps most impressive about the move is its durability despite a continuous flood of paper gold thrown at the market by the Comex bullion banks, per the CFTC’s Commitment of Traders report. In fact, the latest report released last Friday showed a big spike higher in the bullion bank net short position in both paper gold and paper silver. Typically this signals an imminent, manipulate price-plunge, enabling the Comex operators to cover their shorts at a handsome profit.
Too be sure, the technical formation in the graph above could break either way. From a technical standpoint, it would not be atypical to see the price of gold to pullback to the “rim” of the cup (112 area on GLD) or even down to the 200 dma (red line, 109.40).
But the market manipulators will not be getting help from India, who’s elephantine appetite for gold at this time of year appears to be picking back up or from the public, which has been converting paper fiat dollars into gold at a record rate per this report on gold eagles sales by SRSRocco.com.
JP Morgan’s mining stock analyst issued a report on Agnico Eagle (AEM) in which he made the assertion that, “the company’s exploration efforts have yielded good results, resulting in an increase in the share price, even against declining gold prices.” Hmmm. I wonder what kind of smokable material JPM’s analyst has been putting into his pipe (click to enlarge:
SoT – Jeff Brown In Beijing: Why Does The West Fear China?
There are some serious heavy-weight challenges to the Bretton-Woods economic stranglehold on the world that are happening right now. A lot of events are percolating up right now…that should lead to a more equitable use of the world’s resources now. – Jeff Brown in Beijing on the Shadow of Truth
China has been aggressively accumulating physical gold for a long time. Anyone with any modicum of knowledge about the global precious metals market dismisses China’s publicly released 1,778 tonnes gold holdings report as readily as they dismiss the United States’ published gold ownership holdings.
Perhaps the most credible estimate of China’s gold holdings is based on research by Alasdair Macleod. His research shows that China has been stockpiling gold at its Central Bank for a far greater period of time than is commonly assumed. Further, he suggests that China holds at least 25,000 tonnes – LINK.
On Tuesday China will begin to price gold on its Shanghai Gold Exchange in yuan. While no one knows if this will have an immediate affect on the ability of western banks to continue their inexorable manipulation of the gold market, it is likely another methodical move by China toward re-introducing gold back into the global monetary system.
The West, especially the United States’ neocon-controlled Deep State, is facing a global reset that is being engineered by China and Russia that is going to nullify the west’s Bretton Woods-based control of the global financial system.
Several other important building blocks for this reset have been or are about to be put in place. The establishment of the BRICS’ New Development Bank, which will open for business this month, is seen as an alternative to the IMF. The Asia Infrastructure Investment Bank, which recently issued a $750 billion yuan-denominated bond, is funding alternative to the World Bank.
Most important is the imminent introduction by China and Russia of a trade settlement system (CIPS) that will enable participants to by-pass the west’s SWIFT system and to settle their trade transactions without using the dollar.
The Shadow of Truth hosted Jeff Brown, author of the China Rising website. Jeff has been living in Beijing for several years and offers us a view of China that is not distorted by the heavily manipulated United States’ propaganda-infested news apparatus.