Saturday, June 6, 2020

A Tale of Two Markets, Continued

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by Jim Rickards, Daily Reckoning:

Political dysfunction in the United States is at an all-time high.

Republicans and Democrats are fighting pitched battles on immigration, Obamacare, tax cuts, regulation, infrastructure and just about every other major policy issue you can name. These fights are bitter, involve a lot of name-calling and show no signs of abating soon.

The stakes could not be higher. These policy fights are a prelude to the congressional elections in November 2018 when the entire House of Representatives is up for grabs. Right now the Republicans are in control, but a loss of 24 seats will put the Democrats in charge and hand the gavel over to Nancy Pelosi as the speaker of the House.

Once that happens, the impeachment of Donald Trump will begin within a matter of weeks.

In this toxic environment, it seems that Republicans and Democrats cannot find common ground on anything. It turns out that’s wrong; they can agree on something. More spending!

The Republicans have thrown in the towel and given up any pretense of being fiscally conservative. Republicans have joined forces with Democrats to eliminate budget caps on defense and domestic spending.

Entitlements were already out of control because they’re on budget auto-pilot and don’t require new appropriations or votes. Now even the budget items that were subject to votes are out of control.

The bad old days of $1 trillion annual government deficits of the Obama administration (2010, 2011, 2012) are back under a Republican administration. Of course, none of this spending is paid for, because the recent tax cuts already increased the deficit before the new spending spree took effect. Many economists try to find a silver lining by saying spending will be stimulative for the economy.

This is part of the “tale of two markets” narrative I relayed last week.

The first narrative could be called “Happy Days are here Again!” It’s being offered by much of the mainstream.

It goes like this: We’ve just had three quarters of above trend growth at 3.1%, 3.2% and 2.6% versus 2.13% growth since the end of the last recession in June 2009. The Federal Reserve Bank of Atlanta GDP forecast for the first quarter of 2018 is a stunning 5.4% growth rate.

This kind of sustained above-trend growth will be nurtured further by the Trump tax cuts. With unemployment at a 17-year low of 4.1%, and high growth, inflation will return with a vengeance.

This prospect of inflation is causing real and nominal interest rates to rise.

That’s to be expected because rates typically do rise in a strong economy as companies and individuals compete for funds. The stock market may be correcting for the new higher rate environment, but that’s a one-time adjustment. Stocks will soon resume their historic rally that began in 2009.

In short, the Happy Days scenario expects stronger growth, an improved fiscal position due to higher tax collections, higher interest rates, and stronger stock prices over time.

Don’t believe it.

We’re past the point of no return. With a 105% debt-to-GDP ratio, heading toward 110%, the historical evidence is clear that bigger deficits do not produce real growth — they just produce higher interest rates, slower real growth and, ultimately, inflation.

The competing scenario, therefore, is far less optimistic than the Happy Days analysis. In this scenario, there is much less than meets the eye in recent data.

The most recent employment report was much touted because of the 2.9% year-over-year gain in average hourly earnings. That gain is a positive, but most analysts failed to note that the gain is nominal — not real. To get to real hourly earnings gains, you have to deduct 2% for consumer inflation.

That reduces the real gain to 0.9%, which is far less than the 3% real gains typically associated with a strong economy.

The employment report also showed that labor force participation was unchanged at 62.7%, an historically low rate. Average weekly earnings declined slightly, another bad sign for the typical worker.

It’s also important to note that the Atlanta Fed GDP report, while useful, typically overstates growth at the beginning of each quarter and then gradually declines over the course of the quarter. This is a quirk in how the report is calculated, but it does suggest caution in putting too much weight on the above-trend GDP growth suggested.

In fact, GDP growth for all of 2017 was just 2.3%, only slightly better than the 2.13% cumulative growth since 2009. And worse than the 2.9% growth rate in 2015 and the 2.6% rate in 2014.

In other words, the “Trump Boom” is nothing special; it’s actually just more of the same weak growth we’ve seen since 2009.

Read More @ DailyReckoning.com

Silver’s Key Resistance – Craig Hemke

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by Craig Hemke, Sprott Money:

With the recognized top in the US dollar, it appears clear that renewed bull markets have begun across the commodity sector. Copper, crude oil and even gold are showing rallies and breakouts that promise much higher prices in the months ahead. But what’s the matter with silver?

First of all, you need to realize that the digital silver “market” is easily the most manipulated in the world. This is no longer some sort of “conspiracy theory.” It is, instead, admitted and proven fact:

• https://www.zerohedge.com/news/2016-12-08/deutsche…

• https://www.tfmetalsreport.com/blog/8799/cftc-fine…

And by what means do The Banks manipulate price? They use their position as “market makers” to utterly dominate the digital derivative price. The relative concentration of this manipulative power in COMEX silver is displayed in the chart below from GoldChartsRUs:

But overt price manipulation cannot last forever. Simple laws of economics dictate this. And with prices of all commodities rising as the US dollar falls, pressure is building for a breakout in silver that will force the price manipulators to fall back to higher ground.

How will you know that this breakout has begun? The chart below lays it out quite clearly.

Since the bear markets ended in December of 2015, the dollar price of COMEX silver has—ON THIRTEEN SEPARATE OCCASIONS—closed above its 200-week moving average. Note that after each of these THIRTEEN events, the price was immediately set upon the following week and pushed back below this important, long-term trend indicator.

This is clear, deliberate and obvious price suppression designed to keep price contained. Could it continue for a while longer? Of course. Will it continue forever? No. Especially not with the falling dollar and rising commodities ratcheting up the pressure on The Banks to an intolerable level.

Read More @ SprottMoney.com

THE CROOKS RAID GOLD AND SILVER BECAUSE CHINA IS AWAY FOR THEIR NEW YEAR

by Harvey Organ, Harvey Organ Blog:

GOLD DOWN $24.15 TO $1329.05/SILVER DOWN 29 CENTS TO $16.48/DEUTSCHE BANK, THE WORLD’S LARGEST DERIVATIVE PLAYER IN TROUBLE AGAIN AS IT LAYS OFF MORE EMPLOYEES/HUGE TROUBLE TODAY WITH LATVIAN BANKS/ HUGE FIGHTING IN SYRIA BETWEEN THE KURDS, SYRIANS AND THE USA/MORE SWAMP STORIES

GOLD: $1329.05 DOWN $24.15

Silver: $16.48 DOWN 29 cents

Closing access prices:

Gold $1330.20

silver: $16.46

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: $XXXX DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $XXXX

PREMIUM FIRST FIX: $xxx

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SECOND SHANGHAI GOLD FIX: $XXXX

NY GOLD PRICE AT THE EXACT SAME TIME: $xxx

discount of Shanghai 2nd fix/NY:$

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LONDON FIRST GOLD FIX: 5:30 am est $1337.40

NY PRICING AT THE EXACT SAME TIME: $1337.65

LONDON SECOND GOLD FIX 10 AM: $1339.85

NY PRICING AT THE EXACT SAME TIME. $1340.30

For comex gold:

FEBRUARY/

NUMBER OF NOTICES FILED TODAY FOR FEBRUARY CONTRACT: 0 NOTICE(S) FOR nil OZ.

TOTAL NOTICES SO FAR:1784 FOR 178400 OZ (5.5489 TONNES),

For silver:

FEBRUARY

1 NOTICE(S) FILED TODAY FOR

5,000 OZ/

Total number of notices filed so far this month: 310 for 1,550,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $11,443/OFFER $11,514: UP $319(morning)

Bitcoin: BID/ $11,651/offer $11,722: UP $526  (CLOSING/5 PM)

 

end

Let us have a look at the data for today\

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In silver, the total open interest ROSE BY A TINY SIZED 122 contracts from 199,730  RISING TO 199,852 DESPITE  FRIDAY’S  7 CENT LOSS IN SILVER PRICING.  WE HAD ZERO COMEX LIQUIDATION. HOWEVER, WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER FAIR SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE:  849 EFP’S FOR MARCH AND AND 0 EFP’S FOR MAY AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 849 CONTRACTS.  WITH THE TRANSFER OF 849 CONTRACTS, WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S. THE 849 CONTRACTS TRANSLATES INTO 4.245 MILLION OZ DESPITE  WITH THE CONTINUAL DROP IN OPEN INTEREST IN SILVER AT THE COMEX.

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF FEBRUARY:

38,948 CONTRACTS (FOR 14 TRADING DAYS TOTAL 38,948 CONTRACTS OR 194.740 MILLION OZ: AVERAGE PER DAY: 2782 CONTRACTS OR 13.910 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  194.74 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 27.81% OF ANNUAL GLOBAL PRODUCTION

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:  443.08 MILLION OZ.

ACCUMULATION FOR JAN 2018: 236.879 MILLION OZ

RESULT: A TINY SIZED GAIN IN OI SILVER COMEX DESPITE THE  7 CENT GAIN IN SILVER PRICE.  WE ALSO HAD A GOOD SIZED EFP ISSUANCE OF 1247 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER . FROM THE CME DATA 849 EFP’S  FOR  MONTHS MARCH AND MAY WERE ISSUED FOR TODAY  FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS.   WE GAINED  971 OI CONTRACTS i.e. 849 open interest contracts headed for London (EFP’s) TOGETHER WITH A INCREASE OF 122  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE FALL IN PRICE OF SILVER OF  7 CENTS AND A CLOSING PRICE OF $16.77 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A FAIR AMOUNT OF SILVER STANDING AT THE COMEX.

In ounces AT THE COMEX, the OI is still represented by just OVER 1 BILLION oz i.e. 1.0001 BILLION TO BE EXACT or 143% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH/ THEY FILED: 1 NOTICE(S) FOR 5,000 OZ OF SILVER

In gold, the open interest  ROSE BY A GOOD 4,015 CONTRACTS UP TO 536,075 DESPITE THE SLIGHT RISE IN PRICE OF GOLD WITH FRIDAY’S TRADING ($0.25). HOWEVER, IN ANOTHER DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED FOR TUESDAY AND IT TOTALED AN GOOD SIZED  6,334 CONTRACTS OF WHICH  APRIL SAW THE ISSUANCE OF 6334 CONTRACTS AND  JUNE SAW THE ISSUANCE OF 0 CONTRACTS AND THEN ALL OTHER MONTHS ZERO.    The new OI for the gold complex rests at 536,075. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. DEMAND FOR GOLD INTENSIFIES GREATLY AS WE CONTINUE TO WITNESS A HUGE NUMBER OF EFP TRANSFERS TOGETHER WITH THE MASSIVE INCREASE IN GOLD COMEX OI  TOGETHER WITH  THE TOTAL AMOUNT OF GOLD OUNCES STANDING FOR FEBRUARY COMEX. EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER (BIG RISE IN BOTH GOFO AND SIFO) AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE TODAY DESPITE YESTERDAY’S TRADING IN GOLD,  WE HAVE A GAIN OF 10,349  CONTRACTS: 4015 OICONTRACTS INCREASED AT THE COMEX AND A GOOD SIZED  6334 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.(10,349 oi gain in CONTRACTS EQUATES TO 32.18 TONNES)

FRIDAY, WE HAD 21,324 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF FEBRUARY STARTING WITH FIRST DAY NOTICE: 159,088 CONTRACTS OR 15,908,800  OZ OR 494.83 TONNES (14 TRADING DAYS AND THUS AVERAGING: 11,363 EFP CONTRACTS PER TRADING DAY OR 1,136,300 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 14 TRADING DAYS: IN  TONNES: 494.83 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2200 TONNES

THUS EFP TRANSFERS REPRESENTS 494.83/2200 x 100% TONNES =  22.49% OF GLOBAL ANNUAL PRODUCTION SO FAR IN FEBRUARY ALONE.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:  1128.23 TONNES

ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018: 653.22  TONNES

Result: A  GOOD SIZED INCREASE IN OI AT THE COMEX WITH THE SLIGHT RISE IN PRICE IN GOLD TRADING FRIDAY ($0.25). IT IS WITHOUT A DOUBT THAT MANY OF THE DEPARTED COMEX LONGS  RECEIVED THEIR PRIVATE EFP CONTRACT  FOR EITHER  APRIL OR JUNE. HOWEVER, WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 6334 CONTRACTS AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED.   THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX AND YET WE ALSO OBSERVED A HUGE DELIVERY MONTH FOR THE MONTH OF DECEMBER. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS HARDLY ANY GOLD PRESENT AT THE GOLD COMEX FOR DELIVERY PURPOSES. IF YOU TAKE INTO ACCOUNT THE 6334 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 10,349 contracts ON THE TWO EXCHANGES:

6334 CONTRACTS MOVE TO LONDON AND  4015 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 32.18 TONNES).

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

WITH GOLD DOWN $24.15 TODAY, THE CROOKS DECIDED TO DEPOSIT 3.34  TONNES OF GOLD INTO THE GLD

Inventory rests tonight: 824.64 tonnes.

SLV/ 

NO CHANGES IN SILVER INVENTORY AT THE SLV/

/INVENTORY RESTS AT 314.045 MILLION OZ/

end

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

1. Today, we had the open interest in silver ROSE BY A TINY 122  contracts from 199,730 UP TO 199,852 (AND now A LITTLE FURTHER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE  THE FAIR SIZED FALL  IN PRICE OF SILVER  (7 CENTS WITH RESPECT TO  FRIDAY’S TRADING).   OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER GOOD 849 PRIVATE EFP’S FOR MARCH AND 0 EFP CONTRACTS OR MAY  (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM) AND 0 EFP’S FOR ALL OTHER MONTHS .  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD SOME COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI GAIN AT THE COMEX OF  122 CONTRACTS TO THE 849 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A GAIN OF  971  OPEN INTEREST CONTRACTS .  WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN JANUARY (SEE BELOW). THE NET GAIN TODAY IN OZ ON THE TWO EXCHANGES:  4.855 MILLION OZ!!!

RESULT: A TINY SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE FAIR SIZED FALL OF 7 CENTS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING ). BUT WE ALSO HAD ANOTHER GOOD 849 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE GOOD  SIZED AMOUNT OF SILVER OUNCES STANDING FOR FEBRUARY, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS MAJOR BANK SHORT COVERING ACCOMPANIED BY INCREASES IN GOFO AND SIFO RATES INDICATING SCARCITY.

(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 MONDAY night/TUESDAY morning: Shanghai closed /Hang Sang CLOSED / The Nikkei closed DOWN 224.11 POINTS OR 1.01%/Australia’s all ordinaires CLOSED UP 0.03%/Chinese yuan (ONSHORE) closed UP at 6.3415/Oil DOWN to 62.03 dollars per barrel for WTI and 65.23 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN  .   ONSHORE YUAN CLOSED XXX AGAINST THE DOLLAR AT XXX. OFFSHORE YUAN CLOSED XXX AGAINST  THE ONSHORE YUAN AT XXX//ONSHORE YUAN /OFFSHORE YUAN NOT TRADING

Read More @ HarveyOrganBlog.com

Why Now Is the Perfect Time to Be in Gold and Silver

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by Jeff Clark, GoldSilver:

We buy gold for many reasons—as monetary insurance, a crisis hedge, and even for simple diversification. And another one of those reasons is coming to the fore right now: as a hedge against overvalued stock and crypto markets.

We’ve been saying for some time that sooner or later these two markets had to correct—and that gold would serve as a buffer against those inevitabilities. It’s a short and simple message, but one that is crucial for investors to address: Are you sufficiently hedged against overvalued equity and cryptocurrency markets?

S&P Down, Gold Up

Through the end of last year, the S&P had nearly quadrupled from its 2009 low. This run currently ranks as the second-longest bull market in the last 140 years. It was clearly getting frothy; the only questions were when it would reverse and how big that reversal would be.

As you know, 2018 has seen an abrupt increase in volatility in the stock market.

So how has gold performed during that surge in volatility? Through Friday, February 16:

While the stock market has experienced some sudden and scary drops so far this year, gold has risen. The flight to gold as a safe haven has pushed the price higher. This is a small taste of what gold can do as a hedge against stock market volatility.

The question you as an investor have to ask is this: is the market weakness and high volatility over? At what point do stocks—the largest asset allocation of most North American retirement plans—enter a bear market? And how bad does it get?

The sober reality is that the risk of the market continuing these scary nosedives is high. And we’ve shown that gold can hedge a stock market crash.

We’re not the only ones saying this. A new report from Bank Credit Analyst said that during periods of negative equity returns, gold has historically outperformed stocks 79% of the time. And in periods of rising volatility gold outperformed equities 64% of the time. Both of those risks are on the increase right now.

What is more likely going forward is a falling stock market and higher volatility. One reason to own gold is to insure against those events.

Bitcoin Down, Gold Up

Will cryptos serve as a hedge against a falling stock market?

The honest response is that it’s not possible to answer that question yet. Cryptos have far too short of a history, and are far too volatile.

On top of that, they were overdue for a correction as well. That correction came, and here’s how gold has performed against it.

Read More @ GoldSilver.com

You Gotta Own Physical Gold and Silver – Especially When Prices Are Rigged Against You

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by Clint Steiger, Money Metals:

Banks rig markets and government regulators aren’t taking it too seriously. In fact, central bankers at the Federal Reserve, the primary regulator for banks, are the biggest market manipulators of all.

With forces like that allied against precious metals and free markets, it is no wonder the past several years have frustrated gold bugs. They have been continually punished for doing the right thing. It’s been excruciating. Yet the wisdom behind holding physical metals is still sound.

Crooked markets cannot last forever. Banks and traders are undermining confidence each time their cheating makes the headlines. If you are a believer in honest money and own it in the form of bullion, it’s important to remember you aren’t the only one frustrated by these markets.

Speculators just trying to make a buck trading gold and silver futures have also been whipped mercilessly by the bullion banks. Taking a long position (with the leverage that accompanies futures contracts) in gold or silver against the banks has been devastating for most players. They too are reading the stories about private chat rooms where bank traders conspire to stick it to their clients. One must wonder how much reputation the major banks have left.

The jig will be up when honest players start to walk out of the rigged casinos that markets such as the COMEX have become. Only they may be stampeding for the exits, not walking.

When confidence is lost it tends to happen gradually at first, then suddenly following some unforeseeable catalyst. People wake up one morning to find markets in turmoil – like when Bear Stearns collapsed in 2008.

It isn’t just Wall Street banks where trust is undeserved. Central planners have a shoddy track record when it comes to maintaining healthy and sustainable economies, despite the worship they generally get in the financial press. They are really only good at two things; blowing bubbles and avoiding the blame for it with some outstanding public relations.

Plenty of Americans have been somehow convinced the fine people at the Fed are looking out for them. The actual job of the Federal Reserve is to make sure its political masters in Washington aren’t constrained by budgets and its bank masters on Wall Street never pay for their sins. Central bankers exist to make sure systems stay broken, not get fixed.

Federal Reserve stimulus, bailouts and the central bank’s failure as a regulator played a key role in cultivating the Dot Com bubble. Officials took no blame for their role in those events and doubled down instead. The global financial system nearly imploded when the bubble in housing collapsed in 2008, revealing an epidemic of mortgage securities fraud.

Central bankers responded to that crisis by furiously pumping the next bubble. Their “solutions” included zero interest rates, outright monetization of Treasury debt (printing money to pay government bills), bailouts for too-connected-to-fail banks, and more aggressive intervention in a wide range of markets.

The Fed and its counterparts around the world have active trading desks and they never run out of money to back their positions.

Anyone frustrated by the price action in precious metals should stop for a moment of honest reflection.

These extraordinary measures do not represent the final victory of central planning and control over markets. They represent the last ditch effort of a small group of people who have been appointed to ensure Wall Street and the federal government need never exercise restraint.

Read More @ MoneyMetals.com

Top Gold Producers Mine Supply To Fall Right When Potential Investment Demand To Surge

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by Steve St. Angelo, SRSrocco:

The gold market is setting up for a perfect storm as the top mining producers’ supply is forecasted to decline right when demand is likely to surge.  The surge in gold demand will occur as the broader stock markets roll over and begin their inevitable massive correction.  Due to the tremendous amount of leverage in the system, the coming market correction will be quite violent at times.  If investors believe the correction is over, and high times are here again, then they haven’t learned anything about the cyclical nature of markets.

For example, I have stated that Bitcoin and the Crypto Market are classic bubbles, and wasn’t at all surprised by the collapse of the Bitcoin price from $20,000 to $6,500 in a short period.  However, now that Bitcoin and the Crypto Market have reversed, I see analysis and comments that anyone suggesting that Bitcoin is in a bubble is flat out wrong.  I would kindly like to remind these individuals that markets don’t go down in a straight line.

We can see this quite clearly in the following two charts which came from the article, As Bitcoin Nears $11,000, Here’s A History Of Its Biggest Ups And Downs:

The price of Bitcoin in 2013 surged higher, crashed and then corrected higher before falling over the following year.  The same thing took place in 2013 and 2014:

At the end of 2013, the Bitcoin price surged more than ten times to a high of $1,150 before falling to nearly $500, reversed direction and shot back up to $900+.  However, over the next year, the Bitcoin price trend was lower.

Now, I put this chart together to compare the current Bitcoin price trend with the previous graphs:

As we can see, after Bitcoin fell from nearly $20,000 to $6,500, it reversed and quickly added $5,000.  But, this is exactly how corrections behave, as they did for Bitcoin in the past.  Moreover, the Bitcoin price may move even higher before it starts to sell-off in the longer-run.  Unfortunately, the notion that Bitcoin will continue to endure these corrections on its way to $100,000 or $1,000,000 will likely disappoint crypto investors who are counting on a wealthy lifestyle from their tremendous digital Bitcoin profits.

I realize my opinion on Bitcoin and the Crypto Market runs counter to many followers or a percentage of the Alternative Media.  While a decentralized cryptocurrency seems much more appealing than our present highly leveraged debt-based fiat monetary system, it has degraded to nothing more than mere hype and speculation.  Furthermore, even though blockchain technology offers positive solutions, it can function quite nicely without the highly speculative crypto coin values.  

In a nutshell, blockchain and hashgraph technology can offer useful solutions, however, rampant speculation causing volatile cryptocurrency values are worthless distractions.  Regardless, Bitcoin and the Crypto Market are behaving like classic bubbles and will eventually end up at the same value from where they started.  So, it’s probably a good tactic for crypto investors to consider SELLING THE RALLIES rather than BUYING THE DIPS.

Top Gold Producers Mine Supply To Fall As Future Demand Surges

If we understand that the stock and crypto markets are bubbles, then it can be said that the opposite is true for the precious metals.  Thus, when these bubbles pop, logic suggests that investors will seek the 2,000+ year store of value history of the precious metals.  As I have mentioned in several articles and videos, investors moved into gold in a big way during market turmoil.  The two record quarters of Gold ETF flows were Q1 2009 and Q1 2016.  Both periods had one thing in common, investors panicked into gold because they thought the markets would continue to head much lower.

While the Dow Jones Index fell 3,000 points and has reversed much higher, this is only the first stage of the massive correction and crash to come.  Again, stock markets don’t go down in a straight line.  

If we apply the logic that investors will return to buying gold hand over fist as the markets sell off, they will be doing so right at a time when supply from the top miners declines.  According to Barrick Gold’s yearend results, they forecast production will decrease from 5.3 million oz (Moz) in 2017 to 4.7 Moz in 2018 and even lower to 4.4 Moz in 2019.  In just two years, the largest gold producer in the world is forecasted to lose nearly one million oz of production.

Read More @ SRSrocco.com

A Slow Start To The Week Could End With Excitement In The Gold & Silver Market

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by SilverDoctors:

SD Outlook: It may seem like a boring few days, but that could all change by the end of the week…

There are some important events to consider this week.

Or should I say, lack of events.

U.S. Markets are closed today for what used to be called Washington’s Birthday but is now called President’s Day.

There is some light trading – for example, gold & silver can be traded up until 12:00 p.m. EST today, but there will be light volume in a thinly traded market.

Markets in China are still closed through Wednesday as the Lunar New Year celebrations continue.

So it seems like we will either have three days of boring, or three days of smash in front of us.

To make matters worse, we have a barrage of Fed Heads to round out the week:

Notice the morning, afternoon, and then late afternoon speeches on Friday, you know, just in case.

Don’t be surprised if this week gets off to a slow start, but come Friday, we see some fireworks.

The gold to silver ratio climbed again last week:

Once again, we are completely over 80: Open, High, Low and last price are all telling us that silver is severely undervalued right now.

It looks like for the time being, the cartel will succeed in smashing silver back down below its 50-day moving average:

It would be nice to see the open interest come down even more over the next few days, but for now, e’ll have to see if the short-term lows put in two Fridays ago holds.

If that low does not hold, that’s very bearish and will signal a bearish trend change of two lower-highs and two lower-lows, but it would give us a great starting point for the next rally.

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Is THE BLACK SWAN That Everybody Is Looking For ACTUALLY SILVER?

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from SilverDoctors:

SD Friday Wrap: Presenting the case that the black swan everybody has been looking for is actually silver, and also presenting a market wrap…

Here’s a question: Could silver see sharp price rises due to a developing trade war that now includes tariffs on Chinese, Russian, Venezuelan and Vietnamese steel and aluminum (in addition to the ones already in place on solar panels)?

There certainly does seem to be turmoil and infighting between the Deep State, Patriots, the global elite, and the Trump Administration.

The cartel could be an unintended casualty in all of this by taking a stray bullet with all this fighting.

We do not know the great lengths the cartel goes through to keep all the balls in the air, but we do know that its tired, and it just can’t keep juggling forever.

Here’s the thing: Silver has been suppressed for so long, that as a counter-attack to this Trade War, China and Russia could just buy up all the available physical silver on the market.

That would thrust the COMEX into turmoil, and as Bill Murphy says, silver is the cartel’s Achilles Heel. If we think of the cartel as a combination of the ESF and the Fed, comprised of the Deep State and the global elite, that would deliver a serious blow to the cartel.

China and Russia have a way to bring the U.S. to its knees.

Bottom Line: Silver could see a major price spike out of the escalation in the Trade War.

The jig would be up.

If China and Russia counter-attack by buying up a commodity (in silver’s capacity as an industrial metal) that the U.S. and the cartel has kept suppressed since basically the 1960s and especially since COMEX opened in 1974, would the cartel just feed all that supply at these unnaturally low prices?

How long would it be before supplies ran dry?

That would be the black swan that absolutely nobody saw coming (unless you read Half Dollar’s informative articles of course).

But for now, it’s the same old same old in the markets.

I mean, the stock market is fixed you know:

Up five days in a row and seems I read somewhere the fastest and steepest five-day rally ever.

Obviously they are not ready to pull the plug on the market and crash the economy just yet.

Not surprisingly, volatility is dropping:

Read More @ SilverDoctors.com