If you’re having trouble accepting the general idea that the U.S Federal Reserve will continue its assault on the U.S Dollar ( devaluing USD providing considerable relief to the current government debt obligations) then I can’t imagine you’ll be particularly thrilled with the following breakdown on gold and silver.
There is no greater enemy to the Fed than a rising price in gold or silver.
Against a backdrop of such extreme money printing and currency devaluation in the U.S, if left to reflect its true value” (as we’ve seen with respect to the price of gold priced in Yen) the price of gold would now be significantly higher – and I mean SIGNIFICANTLY HIGHER than we see reflected in the current “paper market”.
When ever Uncle Ben gets nervous about the price creeping higher, he simply calls his buddies at JP Morgan, sends them a couple suitcases of freshly printed U.S toilet paper and POOF!
JP Morgan piles in even further “short” (via naked short contracts placed at the CME / COMEX) and the “paper price” continues to flounder/move lower. Ben keeps printing useless fiat paper – and the continued “illusion of prosperity” runs across televisions country-wide.
As I understand it ( and please forgive me if I’m way off ) there is considerably more silver/gold current sold “short” than physical / actual metal currently “above ground” on the entire planet Earth, and as informed investors now look to take “actual delivery” of the physical as opposed to just “trading in the paper market” we are about to see some serious fireworks.
Many heavy hitters have already suggested that The Comex may soon be looking at default. (CME Group is the largest futures exchange in the world. Many commodities, of which gold is one, are traded on this exchange. The gold exchange – which is often still referred to as the Comex, its original name prior to being bought by the CME – is the largest gold exchange by volume in the world).
Take it for what it’s worth as JP Morgan is now under investigation by the FBI and other authorities – this all may fall into the category of “conspiracy theory” if one chooses to just bury their head in the sand.
Your head would absolutely spin if we jump up another “rung on the ladder” to discuss the London Bullion Markets, The Bank of International Settlements and The Fractional Gold System – let alone where China fits in.
i need some dramamine! seriously though, Kong, whenever i read about problems at the Comex, the first thing i do is look at the stock – CME is publicly traded after all. if there’s a problem with the exchange, the stock price will show it. as far as the amount of gold sold in the futures market, open interest as of last Thursday was reportedly 396,925 contracts. A standard contract is 100 oz., so 396,925 x 100 = 39,692,500 oz. / 16 = 2,476,563 pounds / 2000 = 1238 tons. As of Friday, there was 911 tons held in GLD as a point of reference…
Looks like we’ve found our gold n silver guy! Woohoo!
I’ve likely got more questions than answers with respect to the specific numbers, as I’ve moreso been following the “story” of dollar printing vs gold value. The more stones I turn however – it would appear that this “naked shorting” can’t possibly go on much longer no?
Would you imagine then that COMEX would just “settle in cash” if not able to actually provide the physical?
Seems to me that almost any way we cut it – something “large” has to give at some point.
Hey – just pulling charts etc…and grabbed CME as well.
Personally – I wouldn’t be able to discern a thing from following the stock price. It went from 80 to 30 in 2 months during the 2008 crash, with no “indication of problems on the horizon”. It’s bumped into 80 here again and has been rejected after nearly 5 years trading in pretty tight range.
I wouldn’t / couldn’t possibly line up the “speculation on gold and silver shortages” with an actual “date” but as it stands – I don’t like the CME chart at all.
i like that story you are following, and i think it’s the heavy short positioning by hedge funds/specs that will ignite a nice rally in gold and silver (if it hasn’t already started) as they are forced to cover. i agree the CME chart looks heavy, but it’s not a going out of business look do you think?
No no of course not – I’m just shedding a little light on “yet another area” of dabbling by your local friendly neighborhood central bank etc….
The fact that prices of gold and silver have not risen (but tanked relatively) in the face of massive USD devaluation speaks for itself. “This ain’t your mothers market”..if that makes any sense at all.
I assume something like a “Comex default” would come directly out of left field as opposed to being reflected in any chart pattern.
may i ask another questions : when trader said he use fundamental analysis, is there shortcoming using this approach because most current fundamental already price-in by the market. What its mean ‘forward looking’ fundamental ? is there any economics data that we can use to ‘scenario gaming’ the Fed probable decision about his next interest rate decision based on most recent (past) US economics economics data ?
Ok – The Fed ( in my view ) is likely one of the easiest to evaluate with respect to the “forward looking fundamental” in that the current path of dollar printing and bond buying really has no “near term” end in sight.
If the Fed where to stop buying bonds the market would implode. If the Fed stopped printing money – bank profits and inflated stock prices would tumble. The Fed (and the U.S) has itself painted so far into the corner that “any” change / tapering would most certainly lead to a “major risk off event”.
I am a firm beleiver that “all things economic” are far worse in the U.S than any of the data suggests – hence my “generally bearish bias”.
Interest rates are already at “0” and really have no where to go but up so……more easing to keep rates low, more easing to fatten up bank stocks, more easing to prop up bond market , more easing to minimize/ease government debt load etc….
I’d have a different view if / when I saw legit turns in the employment situation as well the housing situation but currently…..no dice in my books.
Hence USD down.
wow .. to ‘predict’ what the Fed will do with his financial/fiscal tool, we need to know what US employment and housing condition currently showing. If we know the REAL 2 economics data above .. then we know the most probable direction of USD index … and if one know most probable direction of USDx then .. we know the direction of OTHER currency pair ( major & cross pair) AND …. if we know the direction of ALL currency pair then.t … we can know next probable direction of CRB CCI, TLT and SP500 .. AND sorry if me ask too much and its seem like childish question. Just try to get conviction myself as currency ‘strategist’ …
Well……having a firm idea of the future direction of the USD “should” provide alot of direction in currency markets – yes.
Being the world’s reserve currency, and having global trade ( for the most part ) priced in dollars certainly makes USD a major focus.
But keep in mind that there will always be several factors that “come together” to create the big picture. Take the idea of “slowing in China” for example. This being “projected” by IMF as well numbers like GDP coming in lower , and maybe even lower over time.
Slowing China will affect commodity purchases from Australia, as well manufacturing and sales ( in turn affecting bottom line numbers for U.S companies ), so there isn’t really “a single answer” to successfully navigating the market but more so a “combined view” of the largest factors affecting global growth and risk environment.
Thanks for the ton of info about tonnage PC. Very interesting.
“illusion of prosperity”…Thanks Kong, I am flattered.
Kong, a gorilla made of Cheerios??? I am perplexed.
Jim Rogers, in a recent article, said, “Don’t sell your gold”. Ignore him at your peril.
He gave more reasons than room to quote here. Most importantly, he agrees with Kong. An uptick in spot gold begets a suitcase of toilet paper dollars to JP Morgan. The dip in gold is temporary at best unless you trade by the nano second.
Fedspeak says jobs are improving. However, 70% of the jobs are part-time, underemployed, or federal bureaucrats, that are a net liability, to enforce obamacare. May obama and his ilk burn in hell.
They also say, “The economy is improving, stocks are up, we’ll taper off QE-100″.
A fed governor was recently quoted, “QE is the right thing to do”. Also, “QE should continue”.
So which is it? It is the latter unless you’re a dumb-o-crat.
Every den of thieves on Wall St. should have gone BK and then re-organized.
Every auto company should have gone BK and then re-organized.
Every obamunist that wasted a fortune on solar panels should have been taken out and shot.
A motorcade in Dallas should have been arranged in 2009. (Don’t bother calling. I’ve already been visited by the Secret Service and most of them agree with me. So up yours POTUS).
I could go on, but it is futile. At this point the only thing to do is restructure your portfolio in order to reduce the damage and even profit from the acts of idiots. Use part of the profits for ammo, food and water.
If they believe they are entitled to pick your pockets they also believe they are entitled to eat your young.
The gorilla is made out of colored pencils! Amazing no?
You’ve summed it up brilliantly as “portfolio restructuring” pretty much says it all, as well the ol “ammo n food”. I know at times it starts to sound “loony” but the current path suuuuuure is taking some interesting twists n turns. I get tired of the day to day ramblings from the FED and media about how “things in the U.S are improving” and the circus/ games playing out in the stock market.
The transfer of wealth is well under way, and a person certainly does need to keep a watchful eye.
“Obamunist” – now that’s funny.