http://goldswitzerland.com/a-failure-on-comex-silver-alasdair-macleod/
THE MATTERHORN INTERVIEW – Review 2012: Alasdair Macleod
“We are quite likely to have a failure on COMEX in the silver market”
Matterhorn Asset Management is very pleased that the X-mas 2012 Matterhorn Interview is with Alasdair Macleod. We know Alasdair as a man with a lot of common sense based on a long time hands on experience in the largest financial center of the world. So here it is; straight from the horse’s mouth. Enjoy the interview.
The renowned economist and financial analyst Alasdair Macleod looks back through the rear window of twenty-twelve and comments important events and developments such as “QE to infinity.” Moreover, he gives his expectations for 2013 in general and the gold and silver markets in particular.
Alasdair Macleod started his career as a stockbroker in 1970 on the London Stock Exchange, and learned through experience about things as diverse as mining shares and general economics. Within nine years Macleod had risen to become a senior partner at his firm. He subsequently held positions at director level in investment management, fund management and banking. For most of his 40 years in the finance industry, Macleod has been de-mystifying macro-economic events for his investing clients. The accumulation of this experience has convinced him that unsound monetary policies are the most destructive weapons that governments can use against the people. Accordingly, his mission is to educate and inform the public, in layman’s terms, what governments do with money and how to protect themselves from the consequences.
By Lars Schall
Lars Schall: Shall we do a review of 2012 by season?
Alasdair Macleod: Yes.
L.S.: Let’s look for the big stories last winter, spring, summer and fall. So, what in your experience was the big story last winter at the start of 2012?
A.M.: The short answer is the Federal Reserve Board extending zero interest rates until 2014, which was unheard of before. We have now got used to zero rates. And also the ECB started to abandon all sound money in order to support the Eurozone banking system and the weaker members. And that to me sets the tone for an eventual complete paper money collapse.
L.S.: Maybe you tell us a little bit about zero interest rates and what usually happens?
A.M.: Well, usually what happens is that the Central Bank manages interest rates at a level which it thinks is appropriate for the economy. In the case of the Federal Reserve Board, it is meant to balance the level of unemployment and the prospects for inflation by managing the interest rates. Now, in practice, that probably means that it sets it below what the market would normally be comfortable with or what the market would decide on its own.
But here we have a situation where the Federal Reserve Board has turned around and said, “We are going to keep interest rates frozen at zero until late 2014 at least. So, that basically means that the cost of borrowing is tied to that zero bound and there is no way that interest rates can go any lower. It is the end point of lowering interest points. Obviously, if you’re going to keep interest rates at that very low level, you’ve got to do two things: Firstly you’ve got to pump money into the system to keep rates at zero and secondly the Central Bank must satisfy any demand for money at that zero bound. And of course, the FED has been doing this, by buying government treasuries and injecting the money in payment for them into the banking system. The banks, where they have drawn down on their lending capacity, have not lent it into the economy but they have used it for financial speculation. So that’s why huge amounts of derivatives have been piling up. And the US banking system, believe it or not, is also exposed quite significantly to the Eurozone area.
L.S.: How did this exposure to the Eurozone arise?
A.M.: Well, it goes back to the beginning of this year when it was only people like you and I perhaps who worried about the possibility that Greece and Italy and Spain might be bankrupt. The average banker just looked at guarantees from the ECB, allowing them to turn 3 per cent or more on a Eurozone sovereign loan. So you end up with bank exposure to the Eurozone and the Eurozone banking system. At mid-year, according to the Bank for International Settlements, the BIS, the total was about $1.5 trillion. This was a very, very important development from the beginning of this year. The ECB at that time was insisting they were not going to print money, and they were going to be conservative in their lending policy. But under Draghi they’ve responded to a systemic banking problem and to politicians unable to deal with government finances in individual countries. And so it became obvious the ECB is the only institution in the Eurozone which can keep this show on the road. So the ECB has started to abandon all pretence at sound money. The hard-money Germans have either resigned or been basically over-ruled in the ECB. The euro, like the US dollar, is now a story of print, print, print. And then of course we had the Greek bail-out in January. The first of two bail-outs this year at least as far as I can recall.
L.S.: Yes.
A.M.: So that’s the first quarter. In the spring what caught my eye was the Target 2 settlement system. Suddenly Germany was on the wrong end of something like Euro 500 billion, reflecting capital flight into Germany from countries such as Greece, and also increasingly out of Spain, Italy and Portugal. Ordinary citizens in those countries began to worry about the safety of leaving money on deposit in their banks. The imbalances from capital flight today are reflected in the Bundesbank with 715 billion Euros, or one trillion dollars owed to it by other Eurozone national Central Banks. Total imbalances from capital flight within the Eurozone are now one trillion euros. So that to me was the second quarter’s feature. I think the third quarter was notable for the LIBOR manipulation story.
L.S.: Yes, we had.
A.M.: And that started with Barclays Bank and it was clear at the time, it wasn’t just Barclays but all the other major banks could well be implicated in this, from UBS to Royal Bank of Scotland. All sorts of big banks had an interest in supporting the value of their derivatives at artificial levels, otherwise their solvency margins looked bad. This is actually a major, major scandal, but it’s nothing compared with the economic damage from manipulation of interest rates by the Central Banks, with zero interest rate policies. We now have LIBOR manipulation on top. The thing that upsets people is the banks pursuing what is obviously a vested interest in keeping their asset values, the price of the bonds and other things that they have on their balance sheets, high by manipulating LIBOR interest rates down. And that I think is a very, very big scandal. It is a global scandal that implicates central banks, which I am sure knew it was happening and knew how important a low LIBOR was to commercial bank balance sheets.
L.S.: Okay. So we enter again the fall and winter season.
A.M.: Yes. There are so many systemic dangers now but I think the story I’m going to alight on is one I wrote about recently about gold and silver on the COMEX. The bank participation report came out on the 4th of December, and I was able to complete the figures for this year. Bank shorts are at or near record levels. And what is interesting is that with the prices of gold and silver well below the all-time highs there are no profit-takers in the market to sell contracts to close their shorts. And in silver it is very, very alarming. This leads me to think that we are quite likely to have a failure on COMEX and in the silver market in particular.
If you have a failure in silver on COMEX then that is going to affect the gold futures market as well. The West’s central and commercial banks have suppressed the price of both gold and silver by supplying central-bank gold and increased short positions, making prices far too cheap. The result has been a massive transfer of gold and silver to Asia. This is the relevance of the point that you have been raising about Central Banks gold holdings, and it is also going to bring into question the solvency of the bullion banks who are short.
So, I think that while it may not be obvious to many people at the moment, when we look back at the fourth quarter we will see that the conditions were in place for a huge bear squeeze, for silver in particular. I would assume that the short position in gold is more controllable so long as Western Central Banks continue to make bullion available to the bullion banks that are short either on COMEX or with LBMA. But silver is different, nobody has it for sale. There is no silver around.
L.S.: Yes, there is no stock.
A.M.: No, exactly.
L.S.: And that’s the big difference?
A.M.: Yes, and this silver position could actually destabilize other derivatives in financial markets. I blame complacency on this matter on Keynesian economists and monetarists saying, “Oh well, gold is just a commodity”. It’s absolute nonsense, we are talking about the most important money to all mankind. If you go into Asia and you ask what is money you will be told, ”Gold and silver”, not rupees, not any paper currencies issued by governments. Gold and silver, that’s what they regard as money, that is where they put their savings. And that is why we are short of it.
L.S.: Can I interrupt you because I would like to bring it both together. The Yuan in China, there’s now a lot of talk about the Yuan being the next reserve currency and we see the Chinese buying gold like crazy. Do you think they have something in mind with backing up their currency with gold?
A.M.: Yes, I do. I think they do have a plan and we don’t know what it is, but we can guess. My starting point in this is that all the Chinese and Russian Marxian economists were taught that capitalism destroys itself. Now, whether you believe that or not isn’t the point, but the Chinese economists actually have this in mind. And they can see the dangers of the way the US dollar is going. We must also understand that the dollar is for security reasons not something they want to use for their international trade settlements. Remember that every dollar transaction done in the world is reflected in a bank account in New York. So, the Chinese want to get away from the potential control and the intelligence information that it gives America. They want to use a different settlement medium.
Now, they agreed about 10 years ago with the Russians to set up the Shanghai Cooperation Organisation (SCO), and the last unsatisfied objective of the SCO is to have a common trade settlement system between the members of the SCO, which at the moment are Russia, China, and the various “stans” in middle-Asia. But interestingly, the next wave of members who will join are India, Iran, Pakistan, Mongolia and Afghanistan (as soon as NATO has left). So you’ve really got the bulk of Asia’s four billion people and they’re going to be settling cross-border trade not with the dollar but with something else. They need to be gold-rich to give confidence to their currencies. I suspect that the Chinese Yuan will play a big role in Asia. What they’re doing with Iran is interesting. They’re settling net balances in gold and gold is being re-monetized in that sense. And I think that China has accumulated a lot more gold than they officially tell us. So they have the potential to use gold as money. I can see gold being re-monetized in the loosest sense for the largest internal market the world has ever seen. Believe me, it’s happening now.
L.S.: Okay, let me then connect another thing with this question. Do you think the Chinese will get paid in gold for perhaps helping out in the euro crisis. So they’re helping to prop up the euro and they get in turn some of the European gold?
A.M.: I don’t think China is going to get sucked into supporting the Euro, no, I don’t see that at all. What I think is possible is they would very much like to cash in Euro’s for gold. I am sure they would consider taking physical gold as collateral for Eurozone loans. But for now every time a Eurozone country goes to China and says “we’ll be very grateful for some of your money, the Chinese listen very politely and then just show them the door. China is not in that role as they’ve got enough of their own problems.
L.S.: Yes.
A.M.: And look at it also this way, the average European has a standard of living, perhaps ten times better than the average Chinese. China is not interested.
L.S.: Let us then talk about the three big stories in gold this year, and I think the one thing out of the different campaigns for repatriation of gold reserves into the respective countries.
A.M.: Yes. That was going to be my overall story for 2012, and that owes much to the work that you have done. Teasing out of the German authorities, exactly how much gold they think they have got and where, was a great achievement, a journalistic scoop. And what I particularly liked was not only did you manage to do that but you have encouraged others to do the same thing elsewhere. The journalist in Mexico who has got the Mexican Central Bank to talk. We now discover from Austria that the bulk of their gold is in England and not only that, but they earned 300 million Euro in leasing fees. What a mistake to tell us that!
L.S.: Yes, but can you elaborate on this. Why was it a mistake?
A.M.: Well, I think it was a mistake because the sensible thing for a Central Banker to do when asked questions about this, given that a lot of the gold has probably disappeared through leasing, is actually to say as little as possible. The real reason for having gold as part of your foreign reserves is to have the ultimate protection of it for your country and currency. Are you telling us, central bankers, that you have compromised that role by leasing it with the risk that it won’t come back? You know that must be the next question you journalists will ask.
L.S.: Yes.
A.M.: And of course, to that they all clam up. So I think it was a mistake for the Austrian Central Bank to admit it. And the most recent story has been the Netherlands where it has just been revealed by the Central Bank after lots and lots of pressure that they have got 50 per cent of their gold in New York, they’ve got 20 per cent in Canada, 20 per cent in London and 10 per cent — only 10 per cent — in Amsterdam.
L.S.: So we come to the question what is a gold reserve. I would say a gold reserve is gold that you have in your possession and at your disposal at any time?
A.M.: Yes, a central banker has actually got to be able to go down into the basement, into the strong room, and count it.
L.S.: Yes.
M: It’s as simple as that.
L.S.: In Germany for example this is not the case. So what do they have. They have no gold reserve, what do they have, what kind of hybrid?
A.M.: There was a time when it made sense, with the Russian bear on the doorstep, for Germany to store her gold in New York or London or Paris. But things have changed, that’s no longer the case and they really should move it back. And I just can’t see the circumstances that have occurred or should occur for Germany whereby she needs to dispose of any of the gold, nor to keep any of it near the markets. It looks like the Bundesbank instead of physical gold has counterparty promises from the Fed, Bank of England and the Banque de France. This should be clarified.
Now, if you ask me about France I would say that France is theoretically bust, I can certainly see them selling gold in order to pay some of their debts or for emergency funding or something. Perhaps using it as collateral for loans. But for Germany it doesn’t make any sense at all, let alone have gold in any form in Paris. And I suspect that the Central Bankers in Germany have also had quite a tough time keeping gold out of the hands of various German chancellors, but that is another story.
L.S.: The argument now is, for example, that you have the gold in New York to trade with it. When you are trading with your gold reserve, what does this say?
A.M.: Well, it tells me that you’re not actually looking after it or keeping it for what it’s meant for. And if you are leasing it, then you’re being a party to a scheme which keeps the gold price, and therefore the value of your gold reserves low. Central Banks that go into leasing have lost sight of the whole point of having gold reserves.
L.S.: Why is it interesting for some parties to have a low gold price and what is the connection between the gold price and the bond market and the setting of interest rates.
A.M.: Okay, there’s quite a long story to that aspect.
L.S.: Can I challenge you?
A.M.: Yes, if we go back to the Nixon shock in 1971, the Americans decided that the Bretton Woods system of gold convertibility only for Central Banks (and the IMF and the World Bank) had to come to an end because they did not have enough gold to stem the losses resulting from dollar repatriation by the Banque de France and various other Central Banks. So, from that moment the US Treasury and the Federal Reserve Board tried to demonetize gold completely and they ran a campaign of saying that gold was old-fashioned; it was not money anymore. The dollar is king, the dollar is money and you can ignore gold.
And initially, they tried to hit the gold price to persuade speculators that gold is yesterday’s money. That failed spectacularly when the Bull Market in gold easily absorbed all the bullion the Americans sold. After that in the 1980s and 1990s, leasing developed. Gold leasing was the basis of the carry trade. A bullion bank gets a Central Bank to lease it some gold for an annual rate about a half, maybe three-quarters of a per cent. The Bullion Bank sells it into the market and with the proceeds goes and buys government short-dated bonds which at that time yielded say 5 or 6 per cent, so they got a very nice turn on that money. And they were meant to cover themselves through the London market from a producer who wanted to sell the gold forward so that he could fix the cash flow for his operations.
But what we don’t know other than by indirect analysis is to what extent these leasing operations were actually closed out by mine deliveries. Most of the gold that they sold in the 1980s and 1990s from this leasing ended up being fabricated into jewellery. And I think it was estimated that up to 90 per cent of the gold sold into the bullion market was actually going into jewellery in one form or another. That was the “raison d’être” if you like for the Central Banks trying to remove gold entirely from the financial system. I guess that the gold carry trade is now considerably reduced, because the interest rate spread is no longer there.
The other aspect of the relationship with bond yields is that physical gold doesn’t yield any interest. So, if bond yields are high, then there is a penalty for holding gold. If on the other hand interest rates are low there is no penalty and gold becomes more attractive. And that basically I think would sum up the relationship of gold with bonds.
L.S.: But now we see a move to declare gold a non-risk asset.
A.M.: Yes.
L.S.: Is this maybe also one of the big stories this year?
A.M.: Yes, it’s a very interesting one, because I think they’re trying to stop regulatory arbitrage, bearing in mind that derivatives markets have already accepted gold as collateral for margin purposes. And this was after some lobbying by the London bullion market. If they did nothing to stop regulatory arbitrage from bank balance sheets, it would encourage growth in shadow banking, which for regulators is not desirable. And now that the banks in America have been asked the question as to whether they think it will be a good idea to have gold as a collateral with zero or minimum haircut then of course they are bound to say yes. So I think it’s a done deal.
L.S.: It’s very important for the price, right?
A.M.: Well, I think in time it will be, because I would expect a number of bankers to begin to worry about the value of fiat currencies and it therefore makes sense to have a certain amount of asset allocation on their balance sheets in gold, just to give them protection. Gold will be on every banker’s radar screen.
L.S.: So gold will then also become a big story in 2013?
A.M.: I think it will be a story of 2013. But how important; I don’t know Lars. At this stage what I see is a potential failure in the precious metals markets. I think it’s far more important to worry about that. You know, they’re not going to get their gold and silver if this happens.
L.S.: Yes, sure. And then let us switch to the third big story in gold for 2012, and this has everything to do with Iran. They were kicked out of the SWIFT system and what did they do then?
A.M.: Well, I found this interesting because it first started with America banning the use of dollars for Iran’s payments. And that meant that no Iranian Bank and no other bank trading with Iranian counter parties could operate a dollar account because under the Nostro/Vostro correspondent system, all those dollar accounts are actually in New York, and they can be vetted and banned from that point. So the Americans turning around and saying, “No dollar settlements for Iran” is a done deal. But then you have the SWIFT system based in Brussels, which does all international currency transfers, and that was stopped.
So you have a situation where Iran, a future member of the Shanghai Cooperation Organisation and major exporter of oil to China India and Turkey, cannot be paid for its oil in dollars or any other currency. So, Iran has had to resort to external settlements in gold. This is bound to spur China on to increase her own desire for gold over dollars. She’s probably producing more gold than the World Gold Council figures actually reflect. Anyway, I am sure that not only has she been accumulating all her own production but we know China and her citizens have been buying gold whenever it is offered from elsewhere. We also know that they have invested in gold mining capacity outside China, both in Australia and also Africa. Here we have a country which is quite evidently preparing itself for the time when gold comes back as money and paper money, at least in the West, becomes useless. And all China’s suspicions that this is going to happen have not been diminished by American’s treatment of Iran.
L.S.: Yes, exactly. And so India is now paying for Iranian oil with gold.
A.M.: Yes. As I understand it India’s trade with Iran works on a net settlement basis in gold. But having said that, the collapse of the Iranian rial must have dampened Iran’s imports substantially, so Iran is probably earning a lot of gold from its oil, some of which it’s not having to give up against foreign imports.
L.S.: Now we come to your expectations for 2013, and let us begin with silver. Would you agree with me that this is the most explosive market there is, not just compared to gold but compared to all other markets?
A.M.: Absolutely. You’ve got the banks’ short position on COMEX which cannot be covered. According to the most recent bank participation reports, the banks are short of nearly 300 million ounces of silver. When you bear in mind this is an industrial metal, the vast bulk of silver consumption from mining and recycling supply goes into biocides, solar panels, electronics, et cetera. You have only 100 million ounces annually left over for investors. The short position for the banks on COMEX is three times that 100 million ounces.
There’s no way this can be covered without a price rise sufficient to kill off significant industrial demand, because there are no strategic reserves to draw on. The only country which might have strategic reserves is China but otherwise there are no reserves. And I think that the only way in which the banks’ shorts could be closed out is after a price hike which would lead to billions of dollars of losses for these banks. There will be a market crisis, and I think that they will have to suspend trading in silver and agree a settlement procedure for long and short contracts. And if that happens, it will be well over $50 an ounce. But remember, other exchanges will continue to price silver if Comex suspends, which will not help Comex resolve the problem if the price continues to rise elsewhere.
L.S.: It’s also a very difficult situation for the European banking system, right?
A.M.: Yes, it is. Last year the election of President Hollande added to this crisis because he has taken France away from the path of austerity and reverted to old-fashioned central planning and socialism. The result is that very quickly the French economy is beginning to collapse. And France in my view is at least as bust as Greece, Italy or Spain and it’s only a matter of time before that is realised in the markets. I think that is certainly an important development for 2013. At some stage in 2013, I expect Eurozone residents to turn away from the euro in favour of gold.
More generally, I would say that the systemic risks for next year are the Euro-zone, Japan (which might surprise you but note that in Japan the dissaving from elderly savers is now getting to the point where it’s reflected in a trade deficit which will lead either to higher interest rates or a lower yen). So, those are two problems for the banks – you’ve also got the precious metals market which we have already mentioned and I think is going to be the big surprise for everyone. And I know that the response to the Eurozone and Japanese problems is central banks around the world will print whatever it takes to stop this affecting their banks and bringing the banking system down. The US economy, with higher taxes, seems certain to disappoint as well. Going into 2013 I do not see progress, only problems, and a global banking system that is constantly on the verge of collapse. And if the banking system goes down, you bring down the currencies as well.
L.S.: That’s likely for sure. Okay, and with this background, what do you expect for the gold market in 2013?
A.M.: I expect it to be considerably higher because I would expect it to reflect the increased systemic risks and the quickening pace at which the systemic risks are likely to develop. I think it is going to be truly frightening or could be truly frightening. That is the outlook; but in the short run we also have a systemic shortage of bullion in the West which can only be resolved with higher prices, far higher prices in the case of silver.
L.S.: One last question; one gold story of 2012 was of course that we saw much more discussion about the gold standard in comparison to the past. Do you think this will increase and how do you view this debate?
A.M.: I think the people who are pushing for a gold standard are just indulging in wishful thinking. I really do not see a gold standard working at all, because the fact of the matter is the central banks want the flexibility to continue to issue currency without any restrictions whatsoever. As soon as you bring in a gold standard, if it’s going to mean anything at all, you impinge on that flexibility. It won’t happen, I think you can forget it.
L.S.: Do you think in 2013 we’ll go further down the road of decline?
A.M.: I’m very, very pessimistic about where we’re going, Lars. I think eventually we’re going to have a complete breakdown in value for paper currencies. I think they will become valueless and it will give me no pleasure at all to be sitting on my savings in gold and silver at a time when everyone else is impoverished. That appears to be the prospect as we go through 2013 and beyond.
L.S.: That’s the sad truth. Nevertheless, I thank you very much for this interview!
A.M.: No, not at all, it’s my pleasure!
CHINA PLAYING A MAJOR ROLE IN GLOBAL SILVER MARKET
market suspected- China has become the largest physical market for silver in the world.
The legendary and.....
http://www.tfmetalsreport.com/blog/4397/can-i-bum-match
Can I Bum a Match?
I know you all probably think I'm crazy, particularly after the action this week...but I'm here to tell ya, just below the surface, something is definitely brewing in the silver pit.
Let's start with gold where the changes were utterly predictable. For the reporting week, price fell about $40 while total OI rose by 2,156. As you'd expect, the Large Specs reduced their net long position by 5,900 and the small specs reduced their's by 6,800. Add them together and The Cartel was able to reduce their net short position by 12,700. The Cartel net short ratio is now a solid NEUTRAL at 2.47:1. (Anything near 2:1 is bullish. Anything near 3:1 has proven to be bearish.)
Silver is simply remarkable. Not so much this week by itself but in the total picture since the final QE∞ cap job in early October with price above $35. For the week, the only notable change was the Large Spec gross long position. These cats had hung in there for 10 weeks before finally succumbing (a little) this week. Large Spec gross long fell by 3,659 while their gross short also fell by 148 for a net reduction of 3,500. The small specs were actually 900 net positive for the week as they added 21 longs and covered 906.
And here's where it continues to get more and more interesting each week. Because the everyone-but-JPM commercials added 832 longs this week, JPM et al was only able to cover 1,752 shorts. This does reduce the total net short position by 2,600 but this is nowhere near what JPM would like. In fact, when we go back to the CoT of 10/2/12, the numbers for JPM are downright hair-raising.
For gold, the changes from 10/2/12 are exactly as expected. With price pushing $1800, The Gold Cartel was long 136,250 and short 405,520. By this past Tuesday, with price down well over $100, the Cartel was still long 137,780 but had reduced their short position by over 15% to 339,914. This entire drop in Cartel short interest, total open interest and price was entirely caused by speculators, both large and small, liquidating and closing contracts.
But check out silver! On 10/2/12, with price above $35, the total open interest was 139,117. As of Tuesday, it was 141,423. Hmmm. Now look at the details:
For the specs, the gross short positions are nearly unchanged. The gross long positions are nearly unchanged, too, with the Small Spec gross long only falling from 30,066 to 29,658 and the Large Spec gross long falling from 47,236 to 44,889 (and all of that drop came this week). So, it can be said that the reason JPM and their partners in crime haven't been able to cover in silver like they have in gold is because the specs haven't yet been chased out. Yes, you could say that, but you'd be wrong.
Check this out: On 10/2/12, the every-commercial-but-JPM crowd was long a gross total of 35,788 contracts. As of Tuesday, with price down over $4 in 11 weeks, the gross long position had risen to 40,347. That's an increase of 12.74%. So, the primary reason that JPM hasn't been able to cover shorts is that all of the other commercials are buying and, as we know, JPM is the seller/capper/manipulator of last resort! In fact, since 10/2, the total Cartel gross short position in silver has actually RISEN by over 2000 contracts from 93,628 to 95,686.
THIS IS UNPRECEDENTED!! NEVER BEFORE HAVE I SEEN THIS AND, FRANKLY, I DON'T KNOW FOR SURE WHAT TO MAKE OF IT. Ask yourself these questions this weekend:
- Have we finally begun "The Civil War" in silver?
- Is JPM increasingly and permanently isolated as the primary naked short?
- Why now? We've never seen this before so why is it happening now?
- What would happen to price if a "spark" set off a blaze that forced JPM to cover into a rising price?
Look, I know this is hard to believe, especially considering this week's deliberate and desperate manipulative takedowns. However, the silver market internals are increasingly bullish to the point where a huge 2013 is not only likely, it's a virtual certainty. At this point, all we need is a spark to set off an unquenchable fire of JPM short-covering where the silver market, for all intents and purposes, goes "offerless". The only question is: Will we get that spark? If we do, the outcome will truly be historic and explosive.
Have a great weekend.
TF
http://www.caseyresearch.com/gsd/edition/brazil-doubles-gold-reserves-central-banks-buy-bullion
Brazil Doubles Gold Reserves as Central Banks Buy Bullion
Dec
22
"I wouldn't read much into yesterday's precious metal price action...or the price action of their associated equities."
¤ YESTERDAY IN GOLD AND SILVER
After another high-frequency trader-induced sell off in mid-morning trading in the Far East...both gold and silver hit new lows for this move down. And as I mentioned in 'The Wrap' in yesterday's column, it takes new price lows to get more technical fund selling, that is precisely what that engineered price decline was all about.
After that, the gold price moved unsteadily higher...and got sold down every time it appeared that it would get overly rambunctious to the upside once New York opened for the day. And as soon as the London close was in at 11:00 a.m. Eastern time, the price traded basically sideways into the 5:15 p.m. electronic close.
The high tick of the day came at the 1:30 p.m. close of Comex trading...and Kitco recorded that price as $1,660.80 spot. The low price tick came around 10:30 a.m. in Hong Kong...and that was approximately 1,634 spot.
The gold price closed the week at $1,657.00 spot...up $9.80 on the day. Net volume was around 144,000 contracts, with more than a quarter of that coming during the Far East trading session.
Silver printed a new low in Hong Kong trading the same time as gold...but by the 8:20 a.m. Comex open, the silver price had rallied to slightly above its Thursday close. After a tiny sell off, the silver price moved higher with the high tick of the day [$30.38 spot] coming about fifteen minutes before the London close...around 10:45 a.m. in New York. And it was all down hill from there.
Silver finished the Friday trading session at $29.96 spot...up a whole 4 cents from Thursday's close...and it should be obvious to anyone that it would have closed materially higher if a not-for-profit seller hadn't shown up when they did. But I'm not telling you anything you don't already know, am I?
After that, the gold price moved unsteadily higher...and got sold down every time it appeared that it would get overly rambunctious to the upside once New York opened for the day. And as soon as the London close was in at 11:00 a.m. Eastern time, the price traded basically sideways into the 5:15 p.m. electronic close.
The high tick of the day came at the 1:30 p.m. close of Comex trading...and Kitco recorded that price as $1,660.80 spot. The low price tick came around 10:30 a.m. in Hong Kong...and that was approximately 1,634 spot.
The gold price closed the week at $1,657.00 spot...up $9.80 on the day. Net volume was around 144,000 contracts, with more than a quarter of that coming during the Far East trading session.
Silver finished the Friday trading session at $29.96 spot...up a whole 4 cents from Thursday's close...and it should be obvious to anyone that it would have closed materially higher if a not-for-profit seller hadn't shown up when they did. But I'm not telling you anything you don't already know, am I?
The dollar index opened the Friday trading session at 79.25. It rallied to around 79.40 in very short order...and then stayed around that mark until about 10:30 a.m. in London. Then away it went to the upside, with the high tick of the day...about 79.66...coming shortly after 12 o'clock noon in New York. From there it sold off a bit...and the index closed at 79.53...up 28 basis points from it's Thursday close.
It was another day where there was little, if any, co-relation between the precious metal prices and the dollar index.
It was another day where there was little, if any, co-relation between the precious metal prices and the dollar index.
* * *
The CME's Daily Delivery Report showed that 54 gold and 96 silver contracts were posted for delivery on December 26th within the Comex-approved depositories. In both metals it was Jefferies, JPMorgan Chase...and the Bank of Nova Scotia. The link to yesterday's Issuers and Stoppers Report is worth a quick peek...and the link is here.
There was a small increase in GLD yesterday, as an authorized participant added 9,685 troy ounces of gold. But it was the activity in SLV that was the big surprise of the day, as an authorized participant...or more than one AP...added an absolutely eye-watering 4,838,030 troy ounces of silver. That's well over two days of world silver production. I would guess that this deposit was involved in covering part of the current obscene and grotesque short position [19.17 million shares/ounces] that currently exists in SLV as of the last report atshortsqueeze.com.
And while we're on that topic, it's a given that this bear raid in the Comex futures market was used by JPMorgan/Scotiabank et al to cover a huge chunk of those silver and gold ETF short positions. Ted Butler figures that it's the same banksters involved in the price management scheme on both the Comex...and in the SLV and GLD ETFs...and I agree totally.
It was a quiet day for sales over at the U.S. Mint on Friday. They reported selling only 2,500 ounce of gold eagles...and that was it. Month-to-date the mint has sold 67,000 ounce of gold eagles...8,000 one-ounce 24K gold buffaloes...and 1,635,000 silver eagles. Based on these sales, the silver gold ratio is now down to just under 22 to 1.
However, since the mint is not selling any more 2012 silver eagles...and there were huge one-time gold eagle sales...this ratio is skewed out of proportion for the month of December. Normal silver eagle sales for a December would be at least double this amount...and I'm still curious as to why the mint suddenly announced that they were no longer selling silver eagles from the current year, as I don't remember them ever making such an announcement in the past.
Based on the above, it's my bet that January 2013 silver eagle sales will set a new monthly sales record.
There was a small increase in GLD yesterday, as an authorized participant added 9,685 troy ounces of gold. But it was the activity in SLV that was the big surprise of the day, as an authorized participant...or more than one AP...added an absolutely eye-watering 4,838,030 troy ounces of silver. That's well over two days of world silver production. I would guess that this deposit was involved in covering part of the current obscene and grotesque short position [19.17 million shares/ounces] that currently exists in SLV as of the last report atshortsqueeze.com.
And while we're on that topic, it's a given that this bear raid in the Comex futures market was used by JPMorgan/Scotiabank et al to cover a huge chunk of those silver and gold ETF short positions. Ted Butler figures that it's the same banksters involved in the price management scheme on both the Comex...and in the SLV and GLD ETFs...and I agree totally.
It was a quiet day for sales over at the U.S. Mint on Friday. They reported selling only 2,500 ounce of gold eagles...and that was it. Month-to-date the mint has sold 67,000 ounce of gold eagles...8,000 one-ounce 24K gold buffaloes...and 1,635,000 silver eagles. Based on these sales, the silver gold ratio is now down to just under 22 to 1.
However, since the mint is not selling any more 2012 silver eagles...and there were huge one-time gold eagle sales...this ratio is skewed out of proportion for the month of December. Normal silver eagle sales for a December would be at least double this amount...and I'm still curious as to why the mint suddenly announced that they were no longer selling silver eagles from the current year, as I don't remember them ever making such an announcement in the past.
Based on the above, it's my bet that January 2013 silver eagle sales will set a new monthly sales record.
Over at the Comex-approved depositories they reported receiving 891,371 troy ounces of silver on Thursday...and they shipped only 50,186 ounces out the door. The link to that activity is here.
Because I'm sort of in 'holiday mode' for the rest of the year, I forgot all about yesterday'sCommitment of Traders Report until many hours after it had been posted on the CFTC's website...so I never got a chance to talk to Ted about it...so you're left with my comments only. I much prefer adding extra bits from Ted, as he's the number one authority on this report.
In silver, for positions held at the close of Comex trading on Tuesday, there was a small improvement in the Commercial net short position...2,584 contracts to be precise. The Commercial net short position now sits at 276.7 million ounces. The 'Big 4' traders are short 258.8 million ounces of that amount...and the '5 through 8' traders are short an additional 56.6 million ounces of silver. The 'Big 8' combined are short 315.4 million ounces of silver, or 114.0% of the Commercial net short position.
As far as concentration goes...once you remove as many spread trades as are reported from the total open interest...the 'Big 4' are short 50.7% of the entire Comex futures market in silver...and it's my guess that JPMorgan Chase [and most likely Scotiabank in #2 spot] are short about 90% of that amount on their own...and the other two traders in that category hold immaterial amounts. And don't forget for one minute that these areminimum concentrations. If all the market-neutral spread trades were removed...including the ones that aren't reported as a separate line item in the Disaggregated COT Report...the actual concentrated short positions would be noticeably more grotesque than they already are.
As of yesterday's COT Report, there were 40 traders on the short side in the Commercial category...and just two of them are short about 45% of the entire Comex futures market in silver. If you have any questions, please forward them to Bart Chilton at the CFTC.
Because I'm sort of in 'holiday mode' for the rest of the year, I forgot all about yesterday'sCommitment of Traders Report until many hours after it had been posted on the CFTC's website...so I never got a chance to talk to Ted about it...so you're left with my comments only. I much prefer adding extra bits from Ted, as he's the number one authority on this report.
In silver, for positions held at the close of Comex trading on Tuesday, there was a small improvement in the Commercial net short position...2,584 contracts to be precise. The Commercial net short position now sits at 276.7 million ounces. The 'Big 4' traders are short 258.8 million ounces of that amount...and the '5 through 8' traders are short an additional 56.6 million ounces of silver. The 'Big 8' combined are short 315.4 million ounces of silver, or 114.0% of the Commercial net short position.
As far as concentration goes...once you remove as many spread trades as are reported from the total open interest...the 'Big 4' are short 50.7% of the entire Comex futures market in silver...and it's my guess that JPMorgan Chase [and most likely Scotiabank in #2 spot] are short about 90% of that amount on their own...and the other two traders in that category hold immaterial amounts. And don't forget for one minute that these areminimum concentrations. If all the market-neutral spread trades were removed...including the ones that aren't reported as a separate line item in the Disaggregated COT Report...the actual concentrated short positions would be noticeably more grotesque than they already are.
As of yesterday's COT Report, there were 40 traders on the short side in the Commercial category...and just two of them are short about 45% of the entire Comex futures market in silver. If you have any questions, please forward them to Bart Chilton at the CFTC.
In gold, the Commercial net short position improved by a more substantial 12,746 contracts...and as of the Tuesday cut-off, the Commercial net short position is now down to 20.21 million troy ounces.
The 'Big 4' traders are short 12.51 million ounces of gold...and the '5 through 8' traders are short an additional 5.31 million ounces of gold. The 'Big 8' are short 88.2% of the Commercial net short position in gold.
As far as concentration goes, the 'Big 4' are short 34.5% of the entire Comex futures market in gold...and the '5 through 8' traders are short an additional 14.7 percentage points. So the 'Big 8' are short 49.2% of the entire Comex futures market in gold on a net basis...and that's a minimum concentration number.
It almost goes without saying that these numbers posted above are all "yesterday's news" as Ted would say...as the price/volume action from Wednesday and Thursday are not included and, without doubt, the Commercial net short position fell precipitously on those days. What may not have changed is the concentration of the 'Big 2'...but 'none of the above' will be known for sure until the Commitment of Traders Report that comes out on December 28th.
To put yesterday's COT Report in a yearly context...click on the interactive link for silverhere...and gold here.
Here's Nick Laird's chart of the Big 4 and Big 8 traders for all physical commodities traded on the Comex...and it's my guess that 90% of the red bar in silver is the combined short positions of JPMorgan Chase and Scotiabank. So you can see that the six other traders don't account for much in the grand scheme of things from a concentration point of view.
The 'Big 4' traders are short 12.51 million ounces of gold...and the '5 through 8' traders are short an additional 5.31 million ounces of gold. The 'Big 8' are short 88.2% of the Commercial net short position in gold.
As far as concentration goes, the 'Big 4' are short 34.5% of the entire Comex futures market in gold...and the '5 through 8' traders are short an additional 14.7 percentage points. So the 'Big 8' are short 49.2% of the entire Comex futures market in gold on a net basis...and that's a minimum concentration number.
It almost goes without saying that these numbers posted above are all "yesterday's news" as Ted would say...as the price/volume action from Wednesday and Thursday are not included and, without doubt, the Commercial net short position fell precipitously on those days. What may not have changed is the concentration of the 'Big 2'...but 'none of the above' will be known for sure until the Commitment of Traders Report that comes out on December 28th.
To put yesterday's COT Report in a yearly context...click on the interactive link for silverhere...and gold here.
Here's Nick Laird's chart of the Big 4 and Big 8 traders for all physical commodities traded on the Comex...and it's my guess that 90% of the red bar in silver is the combined short positions of JPMorgan Chase and Scotiabank. So you can see that the six other traders don't account for much in the grand scheme of things from a concentration point of view.
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selected news and views.....
ZERVOS: The Fed Is Risking An Inflation Disaster, And There Will Only Be One Place To Hide
Jefferies' economist David Zervos is back in a new note, which takes stock of developments at the Fed and the Bank of Japan.
The Fed, of course, recently adopted [the] Evans Rule, which indicates that tightening won't occur until unemployment gets to around 6.5%, or inflation expectations are around 2.5%. The Bank of Japan is expected to see a new round of aggressive policy, thanks to the wishes of incoming Prime Minister Shinzo Abe.
While markets seem to be pretty happy about it all (especially in Japan) Zervos thinks it will end in uncontrollable inflation, like in other past Keynes-inspired experiments.
This story was posted on the businessinsider.com Internet site early Friday afternoon...and I thank Roy Stephens for today's first story. The link is here.
The Fed, of course, recently adopted [the] Evans Rule, which indicates that tightening won't occur until unemployment gets to around 6.5%, or inflation expectations are around 2.5%. The Bank of Japan is expected to see a new round of aggressive policy, thanks to the wishes of incoming Prime Minister Shinzo Abe.
While markets seem to be pretty happy about it all (especially in Japan) Zervos thinks it will end in uncontrollable inflation, like in other past Keynes-inspired experiments.
This story was posted on the businessinsider.com Internet site early Friday afternoon...and I thank Roy Stephens for today's first story. The link is here.
With Farm Bill Stalled, Consumers May Face Soaring Milk Prices
Forget the fiscal crisis and the automatic budget cuts. Come Jan. 1, there is a threat that milk prices could rise to $6 to $8 a gallon if Congress does not pass a new farm bill that amends farm policy dating back to the Truman presidency.
Lost in the political standoff between the Obama administration and Congressional Republicans over the budget is a virtually forgotten impasse over a farm bill that covers billions of dollars in agriculture programs. Without last-minute Congressional action, the government would have to follow an antiquated 1949 farm law that would force Washington to buy milk at wildly inflated prices, creating higher prices in the dairy case. Milk now costs an average of $3.65 a gallon.
Higher prices would be based on what dairy farm production costs were in 1949, when milk production was almost all done by hand. Because of adjustments for inflation and other technical formulas, the government would be forced by law to buy milk at roughly twice the current market prices to maintain a stable milk market.
This news items showed up on The New York Times Internet site on Thursday sometime...and I thank West Virginia reader Elliot Simon for his first of two stories in a row. The link is here.Swaps ‘Armageddon’ Lingers as New Rules Concentrate Risk
On a good day, 27-year-old Bobby Timberlake at CME Group Inc. in Chicago rounds up $2.5 billion from the world’s biggest traders and banks such as JPMorgan Chase & Co. to cover their losses in the $639 trillion derivatives markets.
What happens on a bad day will test new rules in the Dodd-Frank Act designed to prevent a repeat of 2008’s credit crisis. Starting in March, as much as 79 percent of derivatives trades known as swaps must be backed by collateral and go through clearinghouses such as CME Group. Traders may have to post $927 billion with Timberlake and his peers at LCH.Clearnet Group Ltd. and IntercontinentalExchange Inc., whose role as middlemen is to ensure participants get paid.
This arrangement can withstand almost any shock, including defaults by four of the biggest lenders, according to the clearinghouses. Some bankers and researchers aren’t convinced. They warn unprecedented amounts of risk will be concentrated in a handful of clearinghouses -- some newly eligible for emergency Federal Reserve loans. If they fail, taxpayers who financed $1.2 trillion of bailouts last time could be on the hook again.
This long article showed up on the Bloomberg website early Friday morning Mountain Time...and I thank Washington state reader S.A. for bringing it to our attention. The link is here.
What happens on a bad day will test new rules in the Dodd-Frank Act designed to prevent a repeat of 2008’s credit crisis. Starting in March, as much as 79 percent of derivatives trades known as swaps must be backed by collateral and go through clearinghouses such as CME Group. Traders may have to post $927 billion with Timberlake and his peers at LCH.Clearnet Group Ltd. and IntercontinentalExchange Inc., whose role as middlemen is to ensure participants get paid.
This arrangement can withstand almost any shock, including defaults by four of the biggest lenders, according to the clearinghouses. Some bankers and researchers aren’t convinced. They warn unprecedented amounts of risk will be concentrated in a handful of clearinghouses -- some newly eligible for emergency Federal Reserve loans. If they fail, taxpayers who financed $1.2 trillion of bailouts last time could be on the hook again.
This long article showed up on the Bloomberg website early Friday morning Mountain Time...and I thank Washington state reader S.A. for bringing it to our attention. The link is here.
Doug Noland: Recalling John Law
“There are good reasons to think that the nature of money is not yet rightly understood.” John Law, 1720 (with the collapse of the Mississippi Bubble)
“Irredeemable paper money has almost invariably proved a curse to the country employing it.” Irving Fisher, 1911
“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” John Maynard Keynes, 1920
"It’s difficult not to be pessimistic on how this will all play out. I assume they’ll figure out some stopgap measure to dodge around the “cliff.” I have faith in our democracy, although I worry about post-boom misunderstandings, animosities and deep divides. At the same time, I have lost all confidence in our central bank. Their flawed doctrine is my biggest worry, as they operate unchecked and outside the democratic process. Our nation – and the world – is in this state of instability, uncertainty and confusion because contemporary money and Credit is so unsound and poorly managed. Admittedly, this sounds archaic. The root of the problem is not well understood. And, regrettably, the Bernanke Federal Reserve is in the process of only making the problem worse. Markets cheer."
Another excellent read from Doug Noland over at the prudentbear.comInternet site. It was posted there yesterday evening...and I thank reader U.D. for sharing it with us. The link is here.
“Irredeemable paper money has almost invariably proved a curse to the country employing it.” Irving Fisher, 1911
“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” John Maynard Keynes, 1920
"It’s difficult not to be pessimistic on how this will all play out. I assume they’ll figure out some stopgap measure to dodge around the “cliff.” I have faith in our democracy, although I worry about post-boom misunderstandings, animosities and deep divides. At the same time, I have lost all confidence in our central bank. Their flawed doctrine is my biggest worry, as they operate unchecked and outside the democratic process. Our nation – and the world – is in this state of instability, uncertainty and confusion because contemporary money and Credit is so unsound and poorly managed. Admittedly, this sounds archaic. The root of the problem is not well understood. And, regrettably, the Bernanke Federal Reserve is in the process of only making the problem worse. Markets cheer."
Another excellent read from Doug Noland over at the prudentbear.comInternet site. It was posted there yesterday evening...and I thank reader U.D. for sharing it with us. The link is here.
Kyle Bass: The Entanglement
This one hour video presentation from Kyle was taken at the AmerCatalyst 2012 conference on October 1, 2012...and was posted on the youtube.comInternet site a week ago. It's on my must watch list for this weekend...and I might humbly suggest that it should be on your must watch list as well. I have the feeling that I may have posted this already...several months ago...but I can't be sure. But if I did, here it is again. I thank reader E.W.F. for bringing it to my attention yesterday...and now to yours. The link is here.
Two King World News Blogs
The first is with Andrew Maguire...and it's headlined "Shocking $2.89 Premium for Physical Silver in China". The second blog is with Egon von Greyerz. It's entitled "US Debt & Liabilities Set to Increase a Staggering $70 Trillion".
Frank Holmes: Light at the End of the Tunnel for Gold
Intuition was telling me something was going on these past few days in the gold market. Our investment team was watching gold and gold stocks take a tumble for no obvious reason. It wasn’t only us who felt this way: many analysts were caught off-guard. One comment from Barclays Research indicated that the week was unusually “brutal … with quite a few confused participants with some seemingly positive aspects of the market not having an impact.”
My hunch was realized only days later when Zero Hedge posted that Morgan Stanley Wealth Management recommended that its clients dump two of John Paulson’s funds. As MS clients redeemed their shares, the hedge fund giant became a forced seller of gold and gold stocks.
What complicates the gold market is the fact that Paulson is such a big fan of the yellow metal that he offers a “gold share class” to investors, meaning shares are denominated in physical gold. The drawback is when an investor redeems shares, his firm has to convert from gold back to dollars, which forces him to sell his hedged position in the SPDR Gold Shares ETF (GLD). The unfortunate consequence of his actions is a short-term decline in the gold price as the market adjusts.
Of course I'm in total disagreement with Frank on the reason that gold got clocked this week...but other than that, his weekly "Investor Alert" regarding gold is worth running through. It was posted on the usfunds.com Internet site on Friday...and I thank Elliot Simon for his last offering in today's column. The link is here.
My hunch was realized only days later when Zero Hedge posted that Morgan Stanley Wealth Management recommended that its clients dump two of John Paulson’s funds. As MS clients redeemed their shares, the hedge fund giant became a forced seller of gold and gold stocks.
What complicates the gold market is the fact that Paulson is such a big fan of the yellow metal that he offers a “gold share class” to investors, meaning shares are denominated in physical gold. The drawback is when an investor redeems shares, his firm has to convert from gold back to dollars, which forces him to sell his hedged position in the SPDR Gold Shares ETF (GLD). The unfortunate consequence of his actions is a short-term decline in the gold price as the market adjusts.
Of course I'm in total disagreement with Frank on the reason that gold got clocked this week...but other than that, his weekly "Investor Alert" regarding gold is worth running through. It was posted on the usfunds.com Internet site on Friday...and I thank Elliot Simon for his last offering in today's column. The link is here.
Brazil doubles gold reserves as central banks buy bullion
Brazil boosted gold reserves for a third month in November to double the country's holdings since August as central banks from Russia to Belarus and South Korea add the metal to diversify their assets.
Brazilian holdings expanded 14.7 metric tons in November to 67.2 tons, the most since November 2000, according to data on the International Monetary Fund's website. The country bought 17.2 tons in October after adding 1.7 tons in September, the first increase since 2008. Russia's holdings increased 2.9 tons last month and Belarus' reserves expanded 1.4 tons, the data show. Turkey pared holdings 5.9 tons and Mexico sold 0.1 ton.
Central banks have been expanding reserves as the metal heads for a 12th annual gain and investors hold a record amount in bullion-backed exchange-traded products. Nations bought 373.9 tons in the first nine months of the year and full-year additions will probably be at the bottom end of a range from 450 to 500 tons, the London-based World Gold Council estimates.
The big questions associated with all of these purchases is whether or not the central banks in question are taking physical delivery...and if not, where is it stored...and is it in allocated or unallocated form?
I found this must read Bloomberg story embedded in a GATA release yesterday...and the link is here.
Brazilian holdings expanded 14.7 metric tons in November to 67.2 tons, the most since November 2000, according to data on the International Monetary Fund's website. The country bought 17.2 tons in October after adding 1.7 tons in September, the first increase since 2008. Russia's holdings increased 2.9 tons last month and Belarus' reserves expanded 1.4 tons, the data show. Turkey pared holdings 5.9 tons and Mexico sold 0.1 ton.
Central banks have been expanding reserves as the metal heads for a 12th annual gain and investors hold a record amount in bullion-backed exchange-traded products. Nations bought 373.9 tons in the first nine months of the year and full-year additions will probably be at the bottom end of a range from 450 to 500 tons, the London-based World Gold Council estimates.
The big questions associated with all of these purchases is whether or not the central banks in question are taking physical delivery...and if not, where is it stored...and is it in allocated or unallocated form?
I found this must read Bloomberg story embedded in a GATA release yesterday...and the link is here.
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¤ THE WRAP
The only difference between the government and the mafia is the cost of their suits. - Author unknown
Since this is my last column before Christmas, I thought it appropriate that I post something in the way of a musical selection that reflected the true meaning of the season. I've had this baroque piece saved since August, just for this day...a Sacred Oratorio by George Frideric Handel...Messiah. It was recorded at Westminister Abbey in London back in the very early 1980s. The baroque orchestra is the world renowned Academy of Ancient Music withChristopher Hogwood conducting. I note that Simon Preston is the organist...someone whom I've had the pleasure of listening to in concert here in Edmonton many years ago.
I also note that Emma Kirkby is one of the sopranos...and I posted a piece of hers in this space last week...and it was an excerpt from this very performance. This is the only version of this work that I own...and I've had the CD since the moment it became available in that format, so it's almost as old as this performance itself...and it gets regular airtime in our house every Christmas. I consider this recording to be definitive. The performance runs for 2:16 hours...and the link is here.
I wouldn't read much into yesterday's precious metal price action...or the price action of their associated equities. My main concern is whether or not JPMorgan Chase et al are done with this clean-out to the downside on the Comex.
Nothing has changed in the physical world, as you can tell from the amounts going into...and coming out of...the Comex-approved depositories and the various precious metal ETFs. This was all paper on the Comex...and had nothing to do with the Fed, interest rates, the dollar index, the Dow...or the price of tea in China. It's a routine that Ted Butler points out ad nauseam that we've seen hundreds of times in the past.
And as I pointed out at the top of this column, this smack-down gave "da boyz" the opportunity to cover as many short positions in both GLD and SLV as they could...and I'm sure they put it to good use.
Since this is my last column before Christmas, I thought it appropriate that I post something in the way of a musical selection that reflected the true meaning of the season. I've had this baroque piece saved since August, just for this day...a Sacred Oratorio by George Frideric Handel...Messiah. It was recorded at Westminister Abbey in London back in the very early 1980s. The baroque orchestra is the world renowned Academy of Ancient Music withChristopher Hogwood conducting. I note that Simon Preston is the organist...someone whom I've had the pleasure of listening to in concert here in Edmonton many years ago.
I also note that Emma Kirkby is one of the sopranos...and I posted a piece of hers in this space last week...and it was an excerpt from this very performance. This is the only version of this work that I own...and I've had the CD since the moment it became available in that format, so it's almost as old as this performance itself...and it gets regular airtime in our house every Christmas. I consider this recording to be definitive. The performance runs for 2:16 hours...and the link is here.
I wouldn't read much into yesterday's precious metal price action...or the price action of their associated equities. My main concern is whether or not JPMorgan Chase et al are done with this clean-out to the downside on the Comex.
Nothing has changed in the physical world, as you can tell from the amounts going into...and coming out of...the Comex-approved depositories and the various precious metal ETFs. This was all paper on the Comex...and had nothing to do with the Fed, interest rates, the dollar index, the Dow...or the price of tea in China. It's a routine that Ted Butler points out ad nauseam that we've seen hundreds of times in the past.
And as I pointed out at the top of this column, this smack-down gave "da boyz" the opportunity to cover as many short positions in both GLD and SLV as they could...and I'm sure they put it to good use.
I'm hoping that this is the last clean out for quite some time...but there's no way of knowing for sure. However, if I had to bet ten bucks on it, that's the way I would bet it going forward...and nothing has changed with me personally, as I'm still "all in".
I note from Kitco that the gold market will be open until 12:30 p.m. in New York on Monday. There will be an a.m. London gold fix...and a noon GMT silver fix as well...but no London p.m. gold fix. Then it's back to normal operations on December 26th...so I'll probably [but not guaranteed] have a column on the 27th...but it will be as short as I can possibly make it...and it may or may not be posted at its usual time on the Casey Researchwebsite.
I wish you and yours a safe and happy holiday season.
I note from Kitco that the gold market will be open until 12:30 p.m. in New York on Monday. There will be an a.m. London gold fix...and a noon GMT silver fix as well...but no London p.m. gold fix. Then it's back to normal operations on December 26th...so I'll probably [but not guaranteed] have a column on the 27th...but it will be as short as I can possibly make it...and it may or may not be posted at its usual time on the Casey Researchwebsite.
I wish you and yours a safe and happy holiday season.
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