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

14 thoughts on “SoT – Craig Hemke: Demand For Physical Gold/Silver Will Break The System

  1. Very Deep Pockets

    Print gold? Yes they can, in the form of new gold futures contracts.
    How deep are their pockets? There’s a currency printing press in there.
    If no physical to settle contracts, then settlement will be in cash.
    The current wash, rinse, repeat game will continue until someone has the cajones to clean the cesspool out and send many to prison. Until that time comes, its business as usual.

  2. The COMEX will have enough metal or bribe the delivery taker with enough extra cash, to not allow for the metals to move out, only back and forth between dealers.

    The Chinese gold backed and Yuan traded system is coming online soon and this is what is going to free the price of precious metals. When the last of the dusty gold bars leaves the US and London, then the Chinese will reset the AU markets with a bid to buy any and all gold at $5000.00 an ounce or higher. They might have to do it earlier than they planned on after the hugely dismal import/export reports from last night, to keep their economy from imploding…

    Love that Mr. Kranzler!

  3. Dave: that’s ‘Turd’ Ferguson, not ‘Turn’ Ferguson which suggests a ‘turncoat’ (which he isn’t) but one of the most consistently truthful and forensically accomplished gold/silver experts around. And no, I don’t subscribe to his trading advice service! So my endorsement comes free of all attached strings. We certainly need more people like Turd (and you, as well) to ‘tell it how it is’ without pulling any punches and without ‘on the one hand; on the other hand ‘glosses’!


    1. LOL. Thanks. I’ll have to talk to my late night editor about that uncorrected typo. (my “late night editor” is me at 10 p.m. after 2 hours of tennis)

  4. Outlooking

    You are wrong! Very wrong. Read Mike F. (who is right) and understand that COMEX will close very, very suddenly: probably on a Sunday eve. here in London (i.e. not open at 23.00 GMT/UTC). They will not be in a possition to honour outstanding futures/options contracts so they will close and just give people their ‘stake money’ back (if ther are lucky). If they are unlucky, they will not give anyone anything and leave it for the lawyers to sort out à la MF Global débacle! We will just have to see.

    You have to understand that the game is changing or has changed already but is not quite visible to the likes of you and me. That doesn’t mean that changes haven’t happened. I can believe that Chicago doesn’t exist because I have never seen it/visited it. It is a very obvious false premise to believe something to be true only from personal empirical eveidence. Be that as it may, the change (when it is visible) will be unbelievably dramatic – prices changing in multiple $ rises and declines each day which will mean extraordinary volatility that will be difficult, if not impossible, to trade! What is happening at the moment is a ‘psyop’ to lull people into a ‘dream-state’ where, like you, they cannot imagine something so utterly different from what we see in gold/silver markets at the moment. If you are anything to go by, the ‘psyop’ is working as you claim the so-called ‘wash, rinse, repeat’ cycle will be perpetrated forever. WRONG! It is wrong for the reasons above and for the additional reason that Natural Market Forces cannot be held back now. The evidence for this is the strong demand for mining shares which is like a ‘tell’ in a poker game. Once you know someone’s ‘tell’, it is almost impossible for that person to bluff his/her hand. The result is that they start losing money as any bluffs they attempt are ‘trumped’ (Nice polictical allusion thrown in there at no extra cost!)

    I don’t know if you are a troll. I will be generous and give you the benefit of the doubt. However, please think twice, and twice again, before you make claims that the Bully Boy Banks can never be defeated. (Having said that, there is every possibility that they are positioned to take advantage of the phenomenal gold and silver prices coming to a stock price ticker near you very soon!


      1. I don’t need to be ‘convinced’ as I have researched silver for a very long time and I have something which you don’t possess, the gift of critical thought vouchsafed to me by my teachers at a school where intellectualism was encouraged rather than smothered!

        The mere fact that you peddle the ‘things won’t change’ BS is suspect considering what Dave (and others) write about on a daily basis. I cannot see how such arguments are even sustainable, let alone plausible, in the current macro-economic environment. The only way what you suggest can happen is if the silver market (i.e. buying silver for investment and also for industrial uses) is ‘hermetically sealed’ from the rest of finance and commerce. I grant that this is what is being attempted but market forces are quickly moving against this continued ‘control’ and it will end in a very dramatic fashion. All I need to have is patience, the rest will happen without any interference or assistance from anyone.

        The big ‘tells’ are the rediculous gold/silver ratio: 81:1 (silver oz. to gold oz.) and the fact that mining shares have started to rise dramatically. How can these 2 things be reconciled? Answer: they can’t! One of them will have to ‘give’ i.e. return to equilibrium. Which is most likely – shares to crash or the price of silver to rise? The questions to ask aren’t difficult, just difficult to find in an ocean of disinformation, obfuscation and deceit which surrounds us.


        1. Thanks for your comments Jack. I was educated in public schools and know what you mean about the fact that critical thinking is not permitted there, only indoctrination. The university I attended was not much better. I broke free of the conditioning a few years ago, and now question everything.

          The likes of Craig Ferguson, Andy Hoffman, Dr Paul Craig Roberts and Dave Kranzler ring bells of truth. It is too bad that far to few hear the bells ringing.

  5. Dave, I ‘ve followed the turd’s work since early hedge days’ when he used to blog their all the time…but this hft thing only has power while dummies’ keep holding their cards. The chicken in every pot strategy can’t work forever, when the ONE chicken they have left eaten by a Chinaman 6 months ago ..& I that’s what i think has happened.
    I heard rumours about banks not for closing on farmers, truckdrivers blahh blahh 7years ago.. they know they HAVE to keep the supply illusion going….but sooner or later that chicken just ain’t gonna be there…

  6. Also the Dow …2.8 million shares today ? it’s 6.30 am here in OZ …that looks like the scam is running on fumes now , seriously nobody light a match here….

  7. Dave, I enjoy your site. How do you see the gold/silver scenario playing out if the value of the dollar declines? Obviously the government will never allow metals as a legal currency, so metals prices and transactions would have to be set on the black market. This could carry stiff penalties or jail time. Moreover, you have to get the average dumbass American to understand that precious metals are real money. Good luck with that…

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