Thursday, April 25, 2019

THE UNKNOWN FUNDAMENTAL: This Will Push The Silver Price Up Much Higher

by Steve St. Angelo, SRSrocco.com

Precious metals investors need to understand the coming silver price surge will not occur due to the typical supply and demand forces.  While Mainstream analysts continue to generate silver price forecasts based on supply and demand factors, they fail to include one of the most important key factors.  Unfortunately, the top paid Wall Street analysts haven’t figured it out that supply and demand forces don’t impact the silver price all that much.

For example, I continue to read articles by analysts who suggest that industrial demand will impact the silver price in the future.  They believe that rising industrial silver demand should push prices higher while lower demand does the opposite.  However, according to my research, I don’t see any real correlation.  So, why should industrial demand impact the silver price in the future when it hasn’t in the past?

If we look at the following chart, there doesn’t seem to be a correlation between global industrial silver demand and the silver price:

Here we can see that industrial silver demand only increased 17 million oz (Moz) in 2011 compared to 2008. However, the price more than doubled from $14.99 to $35.12.  On the other hand, as the silver price fell in half in 2015 versus 2012, industrial silver demand only declined by 30 Moz (600 Moz down to 570 Moz).  Thus, rising or falling industrial silver demand isn’t a factor that determines the silver market price.

Also, many analysts have suggested that a falling silver price would generate more industrial consumption.  Unfortunately, as the silver price peaked and declined in 2011, so has industrial demand.  Now, some readers may believe that the decline in industrial silver consumption is due to less silver being used in photographic applications.  While this is partially true, if we remove photographic silver usage from industrial demand, we can plainly see that industrial consumption of 529 Moz in 2007 was higher than the 517 Moz in 2016:

Regardless, forecasts for industrial silver consumption have been consistently wrong.  In an article I wrote back in 2014, I stated the following on industrial silver demand:

I have always stated that industrial silver demand, especially solar power demand, will not be much of determining factor in setting the price in the future.  Wall Street analysts continue to regurgitate that industrial silver demand will grow for the next 5-10 years.  Hogwash.

When the peak of global oil production takes place within the next several years, this will impact Global GDP growth.  Matter-a-fact, world economic activity will contract along with the decline in global oil production.  Which means, demand for silver in industrial applications will decline as well.

Here is a chart showing the forecasted growth of industrial silver consumption from a report by GFMS done in March 2011, for the Silver Institute:

GFMS Analysts projected that industrial silver demand would rise to 650 Moz by 2015.  However, If we look at the first chart above, global industrial silver fabrication declined over the past five years falling to a low of 562 Moz in 2016.  Even though silver consumption in Solar PV manufacturing may increase for a few years, I believe overall industrial silver consumption will continue to decrease, especially when the markets crack and U.S. and global oil production decline.

Read More @ SRSrocco.com

Stocks Up and Yields Down – Keith Weiner

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by Keith Weiner, Sprott Money:

Many gold bugs make an implicit assumption. Gold is good, therefore it will go up. This is tempting but wrong (ignoring that gold does not go anywhere, it’s the dollar that goes down). One error is in thinking that now you have discovered a truth, everyone else will see it quickly. And there is a subtler error. The error is to think good things must go up. Sometimes they do, but why?

First, we think it’s a cop-out to say, “well it’s all subjective.” If it were all subjective, then there would be no way to say that gold is good, and no way to say that it “should” go up. It would be sufficient to say, “gold is $1,276.” Indeed that is all that one could say, if everything were subjective.

Why is gold trading at that price? Subjective preference, nothing more. Will it trade at $12,760? Maybe. If subjective preference changes. One might as well say “if God wills it.”

But it is not all subjective. There is something objectively wrong with the dollar and all of its derivatives such as euro, pound, yuan, etc. They are all slowly failing. Gold is the alternative to holding the dollar.

It is important to keep in mind that most people do not like to buy on speculation. This may be particularly difficult to understand if you are someone who bought gold as a bet on its price. Most people buy, not because they expect a discontinuous change, but simply because they have goals to achieve.

For example, a consumer buys food because he needs to eat. A business buys copper because it manufactures wire, or circuit boards, or chemicals to pressure-treat wood. That’s what businesses do—buy inputs, combine them into a product, and sell it for a profit.

Will copper go from $3.02 to $4.02? Maybe. But that is not why copper-using businesses buy it (at least not in the falling interest cycle—see part IV of Keith’s Theory of Interest and Prices ).

Suppose Acme Piping Inc. buys copper at $3.02. It adds $1.98 worth of labor, and turns the metal into pipes. It sells a pound of pipes for $6.00. It spends $5.00 ($3.02 + $1.98). We can say that this $1 of profit is an incentive to produce plumbing.

And there is another incentive. If Acme has a debt of $1,000,000, with a monthly payment of $15,000, then it must sell at least 15,000 pounds of pipes. If not, then its creditors will seize the business. It would like to sell at least 20,000, so it makes the payment, and has a profit of $5,000 left over.

If you wonder why the “worthless paper dollar” can buy so many great products, it’s because every debtor is exchanging whatever it can produce and sell to get enough dollars to service their debts.

When the interest rate falls, several things change. First, the incentive to borrow increases. If Acme had decided not to borrow to buy a new pipe-making machine when the rate was 6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}, the company may be more tempted at 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Total debt goes up as more businesses take this greater incentive.

The monthly payment per dollar of debt is lower (total debt may be a lot higher). However, it becomes harder to generate the profits to service the debt. When every pipe manufacturer borrows more to add more machines to make more pipes, the price of pipe tends to fall. Taxes and regulations might slow or prevent the drop in price, but not the drop in profit margins.

So let’s look at a chart of the price of the S&P stocks overlaid with nonfinancial corporate debt (not the same as S&P 500 debt, but we use it as a proxy for data we don’t have). We started the graph in January 2008, so you can see the big plunge from 1400 in May 2008 to 734 in February 2009.

  Source: Nonfinancial Corporate Debt, St. Louis Fed
Source: Nonfinancial Corporate Debt, St. Louis Fed

Acme Piping, Acme Banking, Acme Pharma, and 497 other Acmes are steadily adding to their debt. According to this data series, borrowing did not miss a beat, even in the worst of the financial crisis. This debt is quoted in millions, so total nonfinancial corporate debt nearly doubled from $3.4 trillion to over $6 trillion.

Aside from buying more machines, companies use some of this borrowing to buy back their shares. There is a reasonable argument for this, as debt and equity are alternative ways to finance the enterprise. And the lower the interest rate, the more attractive debt becomes.

Many companies are also paying dividends. Management has a tougher case, to argue that borrowing is used for other purposes, and dividends are paid of out of cash flow. However, cash is fungible. If a company is adding debt at the same time, it raises the question if it is borrowing to pay the dividend. The fact is that cash comes in from borrowing, and goes out for dividends.

Stocks have been rising relentlessly since 2009. We don’t know how much of the rise is due to borrowing for so called “shareholder friendly” actions. The graph certainly shows a strong correlation. We can say that these moves may seem “friendly”, but actually create a problem for long-term shareholders. Debt is rising. As the expression goes, “it’s not a problem until it’s a problem.”

Until it’s a problem, speculators keep buying stocks to front-run relentless “shareholder friendly” actions by the public companies.

Most have been trained not to think about yield, but to think about capital gains. Preferably big capital gains. They don’t see the engine of capital destruction, as each buyer in turn, turns over his capital to the previous owner of the asset. The buyer would never consume his own wealth, or want to be the Prodigal Son. However, to the previous owner who is now selling, it comes as income. Which he happily spends. This is a process that must inevitably end, when it depletes all capital that people are willing to put into it.

Read More @ SprottMoney.com

Democrats Collapsing with Socialism?

by Martin Armstrong, ArmstrongEconomics.com

QUESTION: Marty; I just read Time Magazine that said the Democrats are in the worse shape since 1929. I understand you take no personal credit for all of these amazing forecast you provide on so many topics. You have clearly shown that the world is connected and the global trend is identifiable. Can your computer also forecast that you will make a difference when it comes to push v shove?

ND

ANSWER: Political change is driven by economics. That is fundamental. Time Magazine correctly wrote: “On the surface, the Democratic Party has been united … [b]ut dig an inch deeper and it’s clear the party is divided…” I have warned that the seeds of discontentwere rising inside the Democratic Party back in February. In September 2016, I warned that: “By 2018, we just may see a completely different party forged out of the collapse of both the Democrats and Republicans we have come to know.” Trump has recast the Republican Party even though the elites are still in denial and fighting back. Trump beat all their candidates. So even the Republican think this is a fluke.

The people now handling Trump, are doing their best to steer him clear of the Deep State to protect the inner-workings. Trump is finding it very difficult to Drain the Swampbecause the Press is defending the Swamp to their last gasp of air like CNN, New York Times, and the Washington Post. CNN fell below all the other news programs because of their extreme bias.

The numbers are the numbers. The computer has no personal bias. If we simply step back and look at this chart objectively, it is not hard to see why the computer has been forecasting the demise of the Democratic Party which has maintained the mantra that business is evil as are the rich.

That view dominated the union movements of the 20th century and they succeeded in driving quality down and their jobs to leave by boat, train, and plane. New York use to be the biggest port in the United States. Today only a few Cruise lines sail from NYC at Pier 88/90/92 by 55th street. Here is a postcard from 1909 showing all the activity. The unions drove the shipping industry out of New York with this anti-business attitude inspired by the Democrats and Karl Marx.

Socialism is dying and taking the Democratic Party with it. Time Magazine quotes Democrat Tim Ryan is an 8 term Congressman who was even considered as a potential VP with Hillary. He is frustrated with his own party and finds the message with “its fixation on divisive issues and its ‘demonization’ of business owners” is not a message people want to hear any more.

The Democrats are living in the past and their message is not embracing anyone except those Democrats who cannot think for themselves and simply vote because they are Democrat.

This is BY NO MEANS my personal opinion. This is simply based upon the trend in motion. The left is losing around the globe for it has been a hateful agenda that always blames the rich, yet constantly reduces the standard of living for everyone the same a s Communism did while making politicians rich and the elite. This is how empires, nations, and city states collapse into the dust of history.

Read More @ ArmstrongEconomics.com

US Stock Market Whistles Past the Graveyard

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by David Haggith, The Great Recession:

It was a summer fit for the start of the Epocalypse followed by a fall where every event leans into Halloween. Summer began with a total solar eclipse that cast a long shadow across the nation from sea to shining sea, and fall began with hurricanes, mass bloodshed and fire. And through it all, the stock market barely blinked.

I watched a total solar eclipse for the first time. I had seen a 98{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} eclipse once before, but the difference made by the final 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} that I saw this time was literally all the difference between night and day. I discovered by experience why the ancients saw this spectacle as an omen portending the demise of a king or end of a dynasty. Evening triumphed over the earth in the middle of morning, but it was an eery, otherworldly, preternatural kind of evening, for the far horizon glowed almost white in a circle all around my world as if it was sunset everywhere. The sky grew darker toward the center where the stars were pooled in midnight blue. The birds stopped singing, and the crickets in the fields around me began to hum. Then the sun, which had been slowly dimming, transfigured in an instant into a pitch-black hole in the sky with long streamers of silver fire coming out of it — a change so sudden and a hole so large that it startled me. It was both horrific and beautiful, and I could see where it would have easily looked to the ancients like a portal to Hades.

I didn’t really expect the summer to live up to all the meanings that have been loaded into an eclipse, but this one did. I expected the summer to be fairly normal but with increasingly evident economic fractures and an increase in strife — politically and physically — but this summer exceeded those expectations in other ways. First, North Korea detonated a hydrogen bomb and used that display to overtly threaten to destroy US cities if the US does anything its tin-hat dictator finds overly aggressive — “anything” being a rather vague term to cover the conditions that might trigger a nuclear holocaust. To that the US president replied with something about raining fire and fury upon the DPRK such as the world has never seen.

Becoming particularly reckless, North Korea volleyed back with what could have been considered an act of war by flying its first intercontinental ballistic missiles directly over its arch enemy, Japan. (The fact that the missile wasn’t shot down by Japan or the US is probably due to inability, rather than patience. After all, how could anyone really knowwhether the missiles were armed with nuclear warheads or whether fuel would be cut off prematurely, suddenly changing the trajectory downward to Japan? So, for either Japan or the US to say they didn’t shoot down the missile because they knew this was not an act of war but just a threat and a test borders on ludicrous when entire cities are at risk if that calculus is wrong.) The president threatened back with total annihilation of North Korea, but then provided us with a surreal calm by smiling as he said that all of this is just the “calm before the storm” as we shall soon all see.

As the Korean Missile Crisis was developing, the Pacific Northwest and California caught on fire, shrouding entire states in smoke for the entire remaining summer during which the sun and moon were oft’ times blood red and barely seen — reminiscent of the summer’s eclipse — and the stars oft’ did not shine at night. Even soggy Seattle broke its record of 52 consecutive days without rain as ash from across the state dusted the city.

Then, just as the smoke from the summer fires started to settle, two back-to-back catastrophic earthquakes ripped open wounds in the United States’ neighbor to the south. Not to leave the US free of castrophe as the fires abated, nature pounded the country’s southern and eastern flanks with three massive hurricanes followed by a lesser encore last week from Nate, the fourth and paler horseman of this hurricane holocaust. The first three recked huge economic damage, mass exodus in the millions and emotional upheaval. People are still fleeing Puerto Rico, many for good. And hurricane season is not yet over, prompting one to wonder what further wickedness may still this way come.

In all, not bad for the summer of our raging discontent during which Republicans failed at all their promises, and social outrage continued to spread across the land. And then came fall with an equally fiery start. As if nature and tin-pot depots had not done enough, the nation experienced the most deadly lone-gunman massacre in its history. (At least, the gunman acted alone so far as we know at this point.)

Even as national mourning over that horror continues, a California firestorm blew up out of nowhere this weekend, catching local residents by total surprise. Already 1,500 homes, businesses and other structures in multiple areas of northern California have been consumed with ten lives lost and many others injured. Forests and vineyards and housing developments scattered across eight counties went up in flames.

Late Sunday night, Ken Moholt-Siebert noticed the smell of the smoke from his Santa Rosa vineyard just off Highway 101. It was not until midnight that he spotted the flames: a small red glow growing a couple of ridges to the east, off Fountaingrove Parkway. He ran up the hill on his property to turn on a water pump to protect the ranch his family has been raising sheep and growing grapes on for four generations. Before the pump could get the water fully flowing, a small ember from the Tubbs fire landed nearby. With the wind picking up, the ember sparked a spot fire about 50 feet in diameter. Then it was 100 feet in diameter. “There was no wind, then there would be a rush of wind and it would stop. Then there would be another gust from a different direction,” Moholt-Siebert, 51, said. “The flames wrapped around us.” He ran for cover. “I was just being pelted with all this smoke and embers,” he said. “It was just really fast.” (LA Times)

While the fires (more than fourteen known so far with numerous other hot spots detected) are just beginning — a literal firestorm driven by seventy-mile-per-hour gusts of wind — they already rival the most savage conflagrations in the state’s history. Governor Brown has been quick to declare a state of emergency, and drought-stricken areas that are choking in smoke and writhing in flames are now in exodus just as rain-soaked hurricane regions of the US were only weeks before. A large northern swath of Santa Rosa is under evacuation orders as are many smaller communities. Even hospitals are being evacuated, and many evacuation centers have already reached full capacity. With nature being so unrelenting toward the US, one wonders what winter storms will bring.

The market tilted and wobbled and then settled back into its repose

It seems like every week since the eclipse has brought with it a new catastrophe in or around the US. Some people wrung their hands throughout the hellish summer and into fall’s freakish followup as they listened to others preach and postulate or prophesy (depending on your persuasion in how you look at such things) that all of this was sent by a higher authority than the president.

Nevertheless, through all of this, stocks have bobbed merrily along as if nothing is happening around them. And that is what I find most freakish of all! Even so, it is not surprising so much as it is a deeper revelation of how completely rigged the market is by central banks.

Read More @ TheGreatRecession.info

The Market’s Got It Wrong

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by Jim Rickards, Daily Reckoning:

Janet Yellen’s mantra is, “It’s transitory!”

That’s Yellen’s typical response to a long litany of data that shows the U.S. is in the grip of a powerful disinflationary trend that may lead to outright deflation — a central banker’s worst nightmare.

The Fed has a publicly announced 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} inflation goal, which they consider to be price stability. In fact, 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} inflation cuts the purchasing power of the dollar by 75{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in the course of an average lifetime. The Fed would tell you to ignore that.

Why 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} inflation is considered “price stability” is a subject for another day. For now, let’s just accept the Fed’s definition and see how the Fed responds from a policy perspective.

The Fed carves out food and energy prices from inflation. That gets to something called “core” inflation.

The Fed’s preferred metric is calculated monthly by the U.S. Commerce Department as the personal consumption expenditure (PCE) deflator. The Fed’s preferred interval is monthly data compared to the same month one year earlier, or “year-over-year,” YOY.

With a 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} target for PCE core YOY, what’s the actual time series of data? Here it is:

  • December 2016: 1.9{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • January 2017: 1.9{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • February 2017: 1.9{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • March 2017: 1.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • April 2017: 1.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • May 2017: 1.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • June 2017: 1.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • July 2017: 1.4{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • August 2017: 1.3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}

An objective analyst would give the Fed credit for coming close to their target in late 2016. This is precisely why the Fed embarked on a path of rate hikes. The Fed raised interest rates in December 2016, March 2017 and June 2017.

The chart below is taken from a presentation given by Janet Yellen on September 26, 2017. The black horizontal line is the Fed’s 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} inflation target. The blue line represents actual PCE inflation; the red line represents PCE “core” inflation with food and energy prices removed, (the Fed’s preferred method). The downward trajectory of the red line should be disturbing to the Fed, but is routinely dismissed as “transitory.”

What happened next?

To answer that question, bear in mind that monetary policy works with a lag. That insight is one of Milton Friedman’s few economic contributions that has stood the test of time.

The Fed has been tightening in fits and starts since Bernanke’s “taper talk” in May 2013. This has resulted a consistent pattern in which Fed tightening slows the economy, then the Fed flips to ease, and the economy picks up steam, which leads to another round of tightening, and another slowdown.

Wash, rinse, repeat.

The Fed’s late 2016, early 2017 tightening cycle has now come home to roost. In the latest nine-month time series, shown above in the table and chart, inflation was flat or down in every month, and dropped a total of 0.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

Read More @ DailyReckoning.com

GOLD AND SILVER ADVANCE: GOLD UP $8.00 AND SILVER IS UP 23 CENTS

by Harvey Organ, Harvey Organ Blog:

COMEX GOLD OPEN INTEREST FALLS BY OVER 2,000 CONTRACTS BUT SILVER DOES THE REVERSE AS SILVER LONGS REFUSE TO BUDGE/TRUMP IN A SHOUTING MATCH WITH BOB CORKER WHICH WILL SEAL THE DEATH OF TAX REFORM/TRUMP HINTS AT WAR WITH NORTH KOREA/TOMORROW IS A BIG DAY FOR CATALONIA SPAIN/RELATIONS BETWEEN THE USA AND TURKEY AT AN ALL TIME LOW WITH ARRESTS WITH RESPECT TO EMBASSY OFFICIALS FROM BOTH COUNTRIES

GOLD: $1282.50 UP   $8.00

Silver: $16.93UP 23 CENT(S)

Closing access prices:

Gold $1284.80

silver: $16.98

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1300.79 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1281.60

PREMIUM FIRST FIX:  $19.19 (premiums getting larger)

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SECOND SHANGHAI GOLD FIX: $1300.79

NY GOLD PRICE AT THE EXACT SAME TIME: $1282.30

Premium of Shanghai 2nd fix/NY:$19.49 (PREMIUMS GETTING LARGER)  

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1282.15

NY PRICING AT THE EXACT SAME TIME: $1281.90

LONDON SECOND GOLD FIX  10 AM: $1278.75

NY PRICING AT THE EXACT SAME TIME. 1279.90

For comex gold:

OCTOBER/

NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 0 NOTICE(S) FORnilOZ.

TOTAL NOTICES SO FAR: 2329 FOR 232,900 OZ  (7.241TONNES)

For silver:

OCTOBER

 

 5 NOTICES FILED TODAY FOR

 

25,000  OZ/

Total number of notices filed so far this month: 390 for 1,950,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

end

Let us have a look at the data for today

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In silver, the total open interest SURPRISINGLY ROSE BY A STRONG  1979 contracts from  184,165UP TO 186,144   WITH RESPECT TO FRIDAY’S TRADING (UP10 CENTS).  THE CROOKS TRIED TO COVER AS MUCH OF THEIR SILVER SHORTS AS POSSIBLE YESTERDAY BUT IT LOOKS LIKE THEY HAD NO SUCCESS..SO THEY TRIED ANOTHER RAID ON FRIDAY BUT THEIR PLAN WAS FOILED WITH THE NEWS THAT NORTH KOREA WAS PLANNING ANOTHER LONG RANGE MISSILE CAPABLE OF HITTING THE WEST COAST OF THE USA.

RESULT: A GOOD SIZED RISE IN OI COMEXWITH THE  10 CENT PRICE RISE AND CONSTANT TORMENT. IT SURE LOOKS LIKE OUR BANKERS FAILED AGAIN IN THEIR ATTEMPT TO COVER MUCH OF THEIR MASSIVE SILVER SHORTFALL SO ANOTHER RAID WAS ORCHESTRATED FRIDAY MORNING BUT THAT FAILED AS WELL ON THE NORTH KOREAN NEWS.

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.931 BILLION TO BE EXACT or 133{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 5 NOTICE(S) FOR 25,000OZ OF SILVER.

In gold, the open interest FELL BY A  MUCH LARGER THAN EXPECTED 2,591 CONTRACTS DESPITE THERISE in price of gold ($1.60 ) .  The new OI for the gold complex rests at 514,151. OUR BANKER FRIENDS WERE MILDLY SUCCESSFUL IN COVERING SOME OF THEIR GOLD SHORTS. THE BANKERS WERE REACHING FOR CAPITULATION ON FRIDAY BY CAUSING ANOTHER HUGE RAID ON GOLD AND SILVER BUT THAT WAS FOILED ON NEWS THAT NORTH KOREA WAS PLANNING ANOTHER LONG RANGE MISSILE LAUNCH.

 

Result: A GOOD SIZED DECREASE IN OI WITH THE RISE IN PRICE IN GOLD ($1.40) 

we had: 0 notice(s) filed upon for NIL oz of gold.

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With respect to our two criminal funds, the GLD and the SLV:

GLD:   

Tonight , ANOTHER BIG CHANGE  in gold inventory at the GLD/ this time A DEPOSIT OF 4.43 TONNES

Inventory rests tonight: 858.45 tonnes.

SLV

Today:  ANOTHER BIG change in inventory: ANOTHER DEPOSIT OF 1.227 MILLION OZ

INVENTORY RESTS AT 326.898 MILLION OZ

 

end

.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver ROSE BY2102 contracts from 184,165UP TO 186,144(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . IT  SEEMS THAT  OUR BANKERS WERE AGAIN UNSUCCESSFUL IN COVERING THEIR SILVER SHORTS. OUR BANKER’S ATTEMPTED RAID ON FRIDAY WAS ABORTED ONNEWS THAT NORTH KOREA WAS PLANNING A MISSILE LAUNCH CAPABLE OF HITTING THE WEST COAST OF THE USA AND THAT PUT AN END TO THE WHACKING.

RESULT:  A GOOD SIZED INCREASE IN SILVER OI  AT THE COMEX WITH THE TINY RISE IN PRICE OF 10 CENTS WITH RESPECT TO FRIDAY’S TRADING. OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS AS THEIRRAID WAS ABORTED ON THE KOREAN NEWS.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed up 25.43 points or .76{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} /Hang Sang CLOSED down 131.45 pts or .46{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} / The Nikkei closed /Australia’s all ordinaires CLOSED UP 0.48{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Chinese yuan (ONSHORE) closed upat 6.6240/Oil DOWN to 49,46 dollars per barrel for WTI and 55.54 for Brent. Stocks in Europe OPENED GREEN EXCEPT FTSE .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.6240. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.6197 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. CHINA IS VERY HAPPY TODAY

Read More @ HarveyOrganBlog.com

The Consent of the Conned

by Charles Hugh Smith, Of Two Minds:

Every single line item in our entire Bernie Madoff scam of a system is cooked.

My theme this week is The Great Unraveling, by which I mean the unraveling of our social-political-economic system of hierarchical, centralized power. Let’s start by looking at how the basis of governance has transmogrified from consent of the governed to consent of the conned.

In effect, our leadership leads by lying. As we know, when it gets serious, you have to lie to preserve the perquisites and power of those atop the wealth-power pyramid, and well, it’s serious all the time now, so lies are the default setting of the entire status quo.

But all too many of us are willing to accept the lies because they’re what we want to hear.

As any competent con-man knows, you can only con those who want to be conned. You can only scam the marks who want to believe that what’s obviously too good to be true is in fact true.

The story of scams such as Bernie Madoff’s isn’t that canny Bernie victimized helpless wealthy people; the untold story is that all those “victims” wanted to believe that something that was obviously too good to be true–incredibly high returns, logged month after month and year after year like clockwork–was in fact true because their greed made them more than just vulnerable to being scammed–they wanted to be bamboozled by Bernie.

Victims of scams naturally deny their own culpability. It’s extremely uncomfortable to admit that greed didn’t just blind us to a patently impossible yield; we wanted to be conned because it felt so wonderful to believe we richly deserved unearned wealth.

All wealth is “earned” to those doing the skimming. The greatest con machine of all time, Wall Street, judiciously refers to every skim and scam as “earnings.”

And so the “victims” blame our lying leaders for telling them what they want to hear. You see how the webs of self-interest reinforce each other: those atop the wealth-power pyramid secure their position by lying persuasively enough to gain The Consent of the Conned–those who give their consent to a visibly corrupt and unsustainable status quo because that status quo is promising to provide too good to be true goodies.

In other words, the lies are constantly compounding: the leadership lies to themselves– we have to lie to keep everything glued together for the good of the people–when their real motivation is to keep the system glued together because the system gives them wealth and power.

If we can be honest for a moment, we might admit that representational democracy encourages leaders to issue too good to be true promises because those promises win votes.

Those on the bottom of the wealth-power pyramid accept the too good to be true assurances because that’s exactly want we want to hear: that we all deserve a piece of the unearned wealth that, like Bernie Madoff’s painfully impossible scam, flows in permanent abundance via some sort of financial magic.

The books are cooked, people; we embrace a gigantic too good to be trueBernie Madoff scam of a system because it’s what we want to believe and what we want to hear. Then, when the whole phantom-wealth con collapses in a heap, we quickly pull on the tattered cloak of victimhood: we were promised, we were lied to, we trusted our leaders to lead us wisely, and so on, as if the con wasn’t obvious to anyone who was skeptical of too good to be true claims.

Now that the whole Bernie Madoff scam of a system is unraveling, two self-reinforcing dynamics are in play: our leadership, elected and unelected alike, are doubling down on the lies because there is no alternative–TINA. What does a liar gain by confessing the whole prosperity thing is illusory, and darn it, we can only spend what we produce in real-world surplus? Short answer: nothing, because that’s not going to win elections or gain the consent of the governed.

So lies are piled on lies to the point of absurdity. But just as Bernie Madoff’s wealthy marks ignored the warnings of the skeptical and mounting evidence that they were being conned, the electorate wants to believe the magical thinking is real, and so they accept the latest statistical flim-flammery as “proof” that the con is not a con.

Once again, we worship the Goddess TINA–there is no alternative. Just as our leaders are now trapped in their web of lies and false assurances, the governed are also trapped in the con because it’s too painful and unnerving to admit we’ve willingly bought into a complete con: we’re too smart to be conned, we protest; look, it’s not a con, the GDP is growing and unemployment is low–and so on.

Bernie Madoff’s marks made the same defensive protests: it can’t be a con, look at my statement: the monthly “earnings” keep pouring in.

The books are cooked, folks, at every level of our Bernie Madoff scam of a system: the federal books are cooked; state, county and city books are cooked; corporate books are cooked; the statistical metrics are all cooked; the projections are cooked, and the estimates are cooked.

Every single line item in our entire Bernie Madoff scam of a system is cooked.Wanting to believe a con is true doesn’t make it true. The power of a con rests in our great desire to believe that what’s too good to be true is magically true. It isn’t, but it feel so reassuring and, well, deserved for it to be true.

Read More @ OfTwoMinds.com

GATA: Those Who Deny Gold / Silver Manipulation Won’t Answer Basic Questions

by Dave Kranzler, Investment Research Dynamics:

IRD Note:  For nearly two decades, GATA has seized on Frank Veneroso’s original research which provided first-hand evidence that Central Banks were actively operating to suppress the gold and has presented direct evidence of precious metals manipulation.  Beyond this, there are public admissions from Henry Kissinger and Alan Greenspan acknowledging this fact.   Unfortunately, those who deny that gold/silver are manipulated have never offered any response to the direct proof that Central Banks intervene directly in gold trading.  The article below presenting just the facts was published by GATA.

Newsletter writer Steve Saville of The Speculative Investor, who long has denied that manipulation of the monetary metals markets means much, has seized on the recent essay by Keith Weiner of Monetary Metals as the conclusive refutation of silver market analyst Ted Butler’s longstanding complaint that JPMorganChase has been rigging the silver market.

Weiner’s analysis, headlined “Thoughtful Disagreement with Ted Butler” and posted here – LINK – argued that JPMorganChase is undertaking only ordinary arbitrage in the silver market, exploiting spreads between bid and ask prices.

Saville, in commentary headlined “A Silver Price-Suppression Theory Gets Debunked” – LINK – cheers Weiner’s essay and goes on to remark: “Entering a debate with someone who is incapable of being swayed by evidence that invalidates his position is a waste of time and energy, so these days I devote no commentary space and minimal blog space to debunking the manipulation-centric gold and silver articles that regularly appear.”

But when has Saville himself ever addressed evidence of manipulation of the gold and silver markets? Of course if he declines to address the evidence, he too can’t be swayed by it. The manipulation deniers never address the evidence. [IRD note: this is similar to Hilary Clinton never denying the allegations of corruption – instead she deflected the issue using the scare tactic of blaming the Russians for making the evidence public]

Weiner’s technical analysis is no refutation of silver market manipulation, for even if JPMorganChase is just doing arbitrage in silver, a judgment on manipulation would require knowing for whom the investment house was doing the arbitrage. JPMorganChase’s former chief of commodity operations, Blythe Masters, said on CNBC five years ago that the investment house had no position of its own in silver and was trading only for clients:  LINK

So might those clients include governments and central banks, entities with nearly infinite resources sufficient to nullify markets? The question is compelling because filings with the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission by CME Group, operator of the major futures exchanges in the United States, assert that governments and central banks are clients of the exchanges and that the exchanges give them special volume trading discounts for trading all futures contracts, not just financial futures contracts: HERE and HERE

Do Weiner and Saville know that JPMorganChase is not trading silver futures for governments and central banks? Do Weiner and Saville know that governments and central banks are not trading gold and gold derivatives surreptitiously? If Weiner and Saville think they know, they’re wrong, for the Bank for International Settlements admits that it operates as a broker in gold and gold derivatives for its member central banks: BIS admission

Read More @ InvestmentResearchDynamics.com

The Hated Dollar Resurges. But Why?

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by Wolf Richter, Wolf Street:

Betting against the dollar remains a favorite sport.

The dollar has done – as it so often does – the opposite of what was expected. Last December, the Fed raised its target for the federal funds rate and indicated that this time it was serious about tightening and that it wouldn’t flip-flop anymore. Two weeks later, the dollar, after surging much of 2016, turned around and headed south in defiance of the Fed.

On September 8 intraday, the dollar index (DXY), which tracks the dollar against a basket of currencies, hit the lowest point since December 2014. In a little over eight months, it had dropped 12{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} from its intraday peak on January 3. But that was it. Since September 8, it has bounced nearly 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. The chart shows the weekly movements:

Since early September, the dollar has bounced against the euro, the yen, the Canadian dollar, the Mexican peso, and the Chinese yuan between 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} and 6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Based on the dollar index, the dollar has now risen four weeks in a row, though this morning, it is taking a breather. September 8 also coincides with the recent peak in the gold price expressed in US dollars — seen another way, the dollar has since risen against gold.

So why the dollar’s bounce?

One theory, among many, is that currency exchange markets – after blowing off the newly hawkish Fed for months and expecting it to flip-flop any moment, as it had done relentlessly starting in 2014 – are considering the possibility that the Fed might not flip-flop this time.

One more rate hike in December is likely. The Fed indicated after its last meeting that three more rate hikes next year seem likely, which would bring the Fed’s target range for the federal funds rate to 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} to 2.25{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}, up from around 0{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} not long ago – “low” inflation, no problem.

But more importantly, in September the Fed announced the start-date of the QE unwind, after having announced the mechanics and amounts in June. The QE unwind has now commenced. And the members of the FOMC voted for it unanimously.

With the QE unwind, the Fed will gradually destroy the money it had created during the phases of QE. It had watered down the dollar during QE with this money creation, now it’s going to reverse the process.

Rate hikes impact short-term yields. The QE unwind is designed to raise yields of longer-dated securities. Rising yields would make dollar-denominated bonds more attractive for international buyers stuck with ultra-low yields in other currencies, and when the plow into dollar-denominated securities, they also create demand for the dollar – or so goes one of the theories.

At the same time, additional political risks are creeping into the euro scenario, with Spain trying to repress Catalonia’s drive for independence, and with a right-wing party in Germany surging out of nowhere a few years ago to become the third largest player in parliament, thus weakening Chancellor Merkel’s grip.

So the dollar index bounced, but it remains down over 9{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} from its intraday peak on January 3.

Betting against the dollar remains a favorite sport for hedge funds, at least as of October 3 when there were $17.4 billion in short positions against the dollar, according to data from the Commodity Futures Trading Commission, though that had edged down from the prior week, and positions might have changed more by now.

The weakening dollar over the first three quarters this year has helped corporate earnings of those companies with overseas exposure, which includes most of the S&P 500 companies. When the dollar weakens, their sales and profits in other currencies are translated into more dollars, which makes the results look better on paper. A strengthening dollar will do the opposite.

What everyone wants to know now is this: Was this bounce just a blip, or was it the beginning of a reversal with stamina to move “higher for longer,” as they might say in the new jargon. The one-way trade against the dollar for the first eight months of the year seems over, and now it gets complicated.

Other central banks have also started to walk back their monetary policies. The Bank of Canada has raised rates twice this year and will likely raise one more time. The Bank of England has indicated that it might raise its rate, likely to happen in November. The ECB, which has already reduced its QE by €20 billion earlier this year, may announce more backpedaling after its meeting on October 26. The Fed leads, other central banks follow.

Read More @ WolfStreet.com