Tag Archives: precious metals

Why Are The Banks Long Gold And Silver Futures?

“The banks are very net long gold and silver futures. To the extent that banks can peer at what’s going on behind the proverbial ‘curtain,’ they must see something that has inspired them to take long position in the precious metals.”

Gold is behaving the same way it was behaving in the months leading up to the 2008 financial crisis.  Emerging markets are melting down and transmitting a financial and economic virus that infect the entire world.  The coming financial collapse will be magnified by the enormous amount of visible and hidden debt, the worst perpetrator of which is the United States.

Elijah Johnson invited me onto his Silver Doctors podcast to discuss the bullish set-up for gold and silver, along with the underlying factors that will lead to problems which have motivated the banks to go long gold and silver:


You can learn more about this newsletter here:  Short Seller’s Journal information and more about the Mining Stock Journal here: Mining Stock Journal information.

Is Trump A Weaker President Than George W. Bush?

Shortly after his inauguration, Trump started doing the politicians favorite dance-step: The 180-Degree Pivot.  This is where the politician as a candidate for office issues policy promises that patronize enough voters to get the politician elected.  Once elected, the politician reverses course and becomes a puppet for actual policy-deciders “behind the scenes.”  The only “promise” to which Trump seems to adhering is that stupid wall along the Mexican border.  I’m not sure who really wants that other drug-addled right-wingers and schizophrenics.

More disconcerting is Trump’s about-face on foreign policy.  Specifically, his Administration’s sudden antagonism toward pretty much the rest of the world, except Israel, England and Saudi Arabia.  To his credit, early on Trump threw a few punches at the Deep State.  Unfortunately the Deep State has once again hijacked the Oval Office – more rapidly than I expected.

I wanted to re-post this commentary from my friend, Dr. Paul Craig Roberts, in which he presents VP Mike Pence as the Deep State’s front-man in the White House.  I was concerned from the day Trump selected him that Pence was a Trojan Horse for the Deep State.  As Dr. Roberts elaborates, it appears as if my fears were well-founded:

President Trumps Disappearance – by Dr. Paul Craig Roberts (LINK)

In my long experience in Washington, vice presidents did not make major foreign policy announcements or threaten other countries with war. Not even Dick Cheney stole this role from the weak president George W. Bush.

But yesterday the world witnessed VP Pence threaten North Korea with war. “The sword stands ready,” said Pence as if he is the commander in chief.

Perhaps he is.

Where is Trump? As far as I can tell from the numerous emails I receive from him, he is at work marketing his presidency. Once Trump won the election, I began receiving endless offers to purchase Trump baseball caps, T-shirts, cuff-links, coffee mugs, and to donate $3 to be entered into a raffle to win some memorabilia. The latest offer is a chance to win one of “personally signed five incredible photographs of our historic and massive inauguration.” https://donate.donaldjtrump.com/signed-inauguration-photo-sweepstakes?utm_medium=email&utm_campaign=JFC_direct-ask_signed-inauguration-photo-sweepstakes&additional[utm_content]=041917-inaugural-photo-contest-djt-jfc-p-p-hf-e&utm_source=e_p-p&amount=3

For Trump, the presidency is a fund-raising device. If his VP, National Security Advisor, Secretary of Defense, UN Ambassador, CIA Director, whoever, want to start wars wherever, that’s just more memorabilia to raffle off for a $3 donation.

As a result of Trump’s failure to govern his own government, we have VP Pence telling Russia and China that there could be a nuclear exchange on their borders between the US and North Korea. Although Pence is not smart enough to know, this is not something Russia and China will accept.

Washington worries about North Korea having nuclear weapons, but the entire world worries that Washington has nuclear weapons. And so many of them. World polls have shown that the majority of the world’s population are far more concerned about the threat to peace posed by Washington and Israel than by Iran, North Korea, Russia and China.

Pence prefaced his “the sword stands ready” remark with “the United States of America will always seek peace,” which after Serbia, Somalia, Afghanistan, Iraq, Libya, Yemen, Pakistan, and Syria is as false a statement as it is possible to make. From Washington’s perspective it is always Washington’s victims that are “reckless and provocative,” never Washington.

The US stands for war. If the world is driven to Armegeddon, it will be Washington, not North Korea, Iran, Russia, or China, that brings life on earth to an end.

Is The Pullback In Gold Over, Part 2

The bullion banks/Central Banks seem to be having a problem pushing gold lower here. Nearly every evening (U.S. time zone) they take a sledge hammer to the price by dumping payloads of paper gold electronic contracts in the Globex trading system.  But gold snaps-back typically after the London a.m. fix.  They also try to hammer it about 25 minutes before the Comex floor trading opens, to no avail:

Untitled3This graph on the left shows the spike up in gold that occurred at 9:05 EST today (the x-axis is MST).  The banks tried to hit gold about 15 mins after the stock market open but failed.

The next graph shows the daily gold price since September 29, 2015.   As you can see, gold appears to be consolidating Untitled1after a pullback from the 20% move that occurred from early January to early March.

I find it amusing when the gold investment community starts whining about a price pullback after a big move in a short period of time.  When is the last time the S&P 500 moved up 20% in 2 months?   It looks like the momentum indicators are curling back up as well.  The action in the HUI and the metals reminds of late 2005 and late early November 2008.   I leave it to the reader to review that particular history to see if they draw a similar conclusion.

Note:  I just got off the phone with the CEO of a junior gold mining company that is one of the best ideas from a risk/return standpoint that I’ve seen in 15 years of researching, investing in and trading this sector.  There’s been a handful of time when I’ve smelled “grand slam” ideas – Aquiline Resources, Silvercrest Mines, Wheaton Minerals (which became SLW and Gold Wheaton), Osisko, to name some of the most memorable.  I smell a grand slam in the making with this company.  I’ll be featuring it this week in the latest issue of the Mining Stock Journal.

30-yr Treasury Yield: “The Economy Is Collapsing”


We know that inflation is running a lot higher this year – true inflation, that is, and not the phony Government CPI.  Thus, low inflation would not explain the 80 basis point drop in long bond yields since January 1st.   “Flight to safety” would flow either into the very short end of the yield curve or into gold or under the mattress.   Therefore, it is apparent to me that the Treasury bond market is starting to price in economic armegeddon.   This will mean deflation of asset prices (stocks, homes, crappy Wall Street concoctions) but not necessarily deflation of necessities.

With retail sales, auto sales,  and home sales all collapsing, the only explanation left is that the Treasury bond market is pricing in a severe economic downturn.    This would explain also why high yield bond spreads have widened considerably over the past month.  The big drop in oil prices this week would further affirm this.

For anyone who is reading this and has invested in my Easy Trade Idea from the end of July, I used to today’s low volume pullback in the stock to add to our position in the fund by shorting slightly in the money puts that expire tomorrow.  If the price closes below the strike tomorrow, we will take delivery of more shares with a cost-basis reduced by the amount of put premium we collected today.

Buy All Attempted Takedowns Of Gold, Silver And Junior Mining Stocks

The most absurd part about today’s payroll report is  the fact that supposedly highly educated people get on financial spin networks and discuss and debate the report with serious expressions on their faces as  though the report has any degree of validity.  It’s emblematic of the fraud and fiction that has infected our system to the core.  The economic reports are bogus, the physical gold in Ft Knox has been replaced with hypothecation agreements and Comex fiat paper futures contracts and the politicians and business leaders are all corrupt – every single one of them.

Please see Zerohedge etc for a dissection of today’s fiction published by the Government, in conjunction with the Fed and Wall Street.   Just for point of note, the number of people who have left the labor force hit another all-time record high and half a million full-time jobs were lost, replaced by 800,000 part-time jobs.   There’s your 6.1% unemployment rate:  deadbeats collecting unemployment insurance and Social Security Disability, students taking out debt and enrolling to DeVry on-line University and full-timers converted into part-timers.


The day of reckoning is coming.  I had a “eureka” moment last night when I read the comments by the chief economist of the Bank of England who, presumably unwittingly, warned that the aggregation of derivatives in the derivatives clearing system (primarily a subsidiary of The Depository Trust and Clearing Corporation – aka DTCC) could be “a problem from hell.”

The nexus of the problem is that fact that interest rate derivatives contracts make up the majority of the OTC derivatives.  JP Morgan and Citibank alone have $97 trillion in notional amount of OTC interest rate derivatives exposure.   To put that in perspective, the total size of the U.S. stock market is around $22 trillion.  And $97 trillion doesn’t include the leverage that is embedded in these contracts.

My co-producer and I are going to do a video on this topic.  I think viewers will be stunned. Pimco, Black Rock and Fidelity have by far the largest concentration of exposure to this. That’s why the Vice Chairman of Black Rock is going around promoting the idea of a mechanism to bail-out DTCC when the derivatives bombs start to fly.  Trust me, I was told this morning by someone in a position to know that the regulators are absolutely terrified of this problem and of a total bond market collapse.

As for the precious metals action today, it was almost as funny as the Government jobs report.  With the entire analytic world (except me and few colleagues) expecting a massive take-down today, here’s what happened (click on chart to enlarge):


They are having trouble taking down the precious metals sector.  I can’t recall the metals ever behaving this way when the market is technically and psychologically set up for a big move lower.  Hell, Goldman still has an $1000 target for gold.   Keith Weiner of Monetary Metals still thinks fair value for silver is like $15.

The truth is, the precious metals market as “sniffed out” the complete Ponzi-nature of our entire system.  The scramble  globally to buy and possess physical gold and silver  is starting to take over the ability of the Fed/big banks to manipulate the prices with fiat futures contracts that can readily printed up.  GATA  (www.gata.org) predicted this would eventually happen over 14 years ago.

The bottom line is that you need to dump your bond funds before they put capital controls on them and load up on gold, silver and junior mining stocks on every sell-off.  Since I published my research on Pilot Gold on May 20th, it’s gone up 22%;  Almaden is up 9.2% (5/15);  EMXX is down 3 cents but requires patience; and the Big Upside Idea is up 5.6% since 6/25.    All four ideas still have a multiples of upside potential and you can read my analysis here:   Junior Mining Stock Research Reports.

Whether you want to buy into the precious metals sector is your decision but if you wait much longer to decide whether or not to get your money out of bond funds, you soon won’t have any control over that decision because getting out won’t be an option.