Building Pressure

As if my head wasn't swimming enough, I spent about an hour on the phone with Jim Willie this morning.

As you might imagine, we had a free-wheeling conversation that drifted from topic to topic. Of all the things we discussed, I'd like you to consider this:

Did you even know that this meeting was taking place this week? Have you seen coverage in the mainstream press? Did CNBS send LIESman or Headiromo over for live reports? Here's the summary and source link: http://www.4-traders.com/news/G-20-Group-of-Twenty-Finance-Ministers-and-Centr-Global-Finance-in-Transition-conference-to-take--16735638/

"On May 7-8, 2013, Istanbul (Turkey) will host the Global Finance in Transition conference. The event is organized by the Central Bank of the Republic of Turkey jointly with the Reinventing Bretton Woods Committee and the Russian Ministry of Finance.
Representatives of G20 finance ministries and central banks, international organizations, research institutions and businesses will take part in the conference. Head of Turkey's Central Bank Erdem Basci, Deputy Minister of Finance of Russia Sergey Storchak and Executive Director for the Reinventing Bretton Woods Committee Marc Uzan will give the opening remarks at the conference.
Five panel discussions are planned as part of the event. They will cover the international financial architecture, in particular, changes in the flow of global investments, local bond markets and growth in emerging economies, incentives and determinants of investment and other issues. In addition it is expected that new instruments and incentives for making the global financial system safer will be suggested during the forum."

Did you know there was such a thing as the "Reinventing Bretton Woods Committee"? Wouldn't you like to know how the panel discussions of "international financial architecture" or "flow of global investments" went? Also, it was "expected that new instruments and incentives for making the global financial system safer will be suggested". Oh, really? That sounds interesting. But of course, CNBS doesn't care. Their main story right now is "Forget Software. Hardware Is Where It's At!" http://www.cnbc.com/id/100716901 Nero fiddles while Rome burns...

Much appears to be taking place while hiding in plain sight. You see the events and wonder if they are all, somehow, interconnected. I would suggest to you that they are. The problem is, like anything else, you and I won't clearly see how they connect until after the fact, after all is said and done. But suffice it to say, there are connections to be made from just these examples:

  • Western and Japanese debt monetization and QE to
  • Chinese direct currency swaps to
  • LBMA member default to
  • German gold repatriation to
  • China gold imports to
  • Shanghai gold deliveries to
  • Cyprus to
  • Gazprom to
  • The Tamar gas field to
  • Israel bombing Syria and, by proxy, Iran to
  • Netenyahu visiting Beijing to
  • The end of the petrodollar to
  • The historic April raid on gold price and draining of the GLD to
  • The BRICs Development Fund to
  • The latest FOMC language about "raising" QE to
  • .......

I could continue but I'll stop there. I think you get the picture. As it relates to the precious metals, I think we all understand that there is currently a growing rush to get physical possession of metal. Whether it is from/out of Western central bank vaults, from LBMA vaults, from Comex vaults, from the GLD, from the U.S. Mint and other global mints...whatever/wherever...the push is on to redeem paper certificates for actual physical metal. Why now? Who cares?!? In a crisis of confidence, the initial cause is of no import. What matters is the escalating belief and fear that "If I don't act now, I'll be left holding the bag".

And so we've seen:

  1. Comex inventories plummet to the lowest levels since 2008.
  2. GLD inventory plummet to lowest level since 2009.
  3. JPM New York vault nearly emptied.
  4. German gold repatriation plan.
  5. 470 metric ton reduction of Comex Commercial net short position since 9/12.
  6. 800 metric ton Chinese import for 2012. 233 metric ton import for just March 2013.

And this is seeming to accelerate. Look at this chart of Comex inventories:

And look at the increasing rate of Chinese imports:

And then check this out. The GLD has now shed almost exactly 300 tonnes of its "inventory" since the first of the year. That's about 22% in just a little over four months! But did you know that it took:

  • Two months to drain the first 100 tonnes (1/2- 3/7)
  • Six weeks to drain the next 100 tonnes (3/8-4/15)
  • And just three weeks to siphon the next 100 tonnes (4/16- 5/8)

And this week's CoT will almost assuredly show a further drop in the Comex net short position of the bullion banks. I posted this yesterday but it's worth repeating:

  • On 9/11/12, two days before QE∞ was announced, The Gold Cartel was net short 237,091 contracts. That's 23,709,100 troy ounces or a whopping 737 metric tonnes of paper gold.
  • As of last Tuesday, April 30, The Gold Cartel is now net short 95,563 contracts, a reduction of nearly 60%! And they've reduced their potential delivery obligation by 440 metric tonnes to 297!

We'll get another CoT tomorrow and, for the reporting week, gold was down $23 while total OI was UP by nearly 17,000 contracts. I'll be stunned if almost all of the OI increase doesn't come from Spec shorting and Cartel buying.

Again, all of the things I've mentioned are spectacular in their own right. For example, the German repatriation story or the drawdown in the GLD. Taken in concert, however, it becomes quite clear that something significant is coming over the horizon. But what??? THAT is the question we must attempt to answer in the days ahead.

Anyway...time to wrap this up, I suppose. First, some charts. Note that gold and silver are marking time here. Silver is particularly interesting as it is clearly caught in a pennant that is rapidly closing. Keep a close eye on this as it portends a breakout sometime very soon.

And since I mentioned my friend, The Jackass, many of you are probably clamoring to hear from him, too. No, I don't have a podcast for you but Kerry Lutz does. A link is below. Jim and I may record something in a couple of weeks. http://financialsurvivalnetwork.com/2013/05/jim-willie-the-us-land-of-the-fascists-and-the-debt-serfs/

OK, that's all for now. Have a great day!

TF

463 Comments

Istack's picture

Music helps deal with the pressure

i purchased a guitar yesterday.  gonna go pick it up at lunchtime.  i have been thinking about getting one for years.  i hope to get some lessons as well.  i'll see if i can learn a little from some youtube videos too.  whenever i see people playing the guitar it moves my soul and i get a little jealous.  i am hoping that guitar playing will help me deal with some of the building emotional pressures of life.  music is soothing to the silver stacking heart.

it is good to have convictions and even more helpful to sing about it too.  i hope this will help me with my silver stacking blues.

It is an Epiphone DR-100 Acoustic Guitar. It had great reviews on guitarcenter.com

Down Range's picture

Early

Early post of nothing important.......

Somewhere in the top 10....

Howard Roark's picture

3!!!

3!!!

Salut,

HR

Dr. Fix's picture

Fourth......

Dear Turd,

Thank you for the new post, it's always interesting.  Especially on a boring day like today.smiley

I am always happy to hear that you have been talking to The Jackass, even if we don't get to listen in.

I listened to that last interview yesterday, he does a great job of putting the pieces of the puzzle together.

The whole thing is going to blow, and very soon, and this is a great place to watch it from.

That economic conference that you were discussing, is all about replacing the dollar with a gold backed trade settlement system. Most of the world is on board, and as soon as it does become public knowledge,

the dollar will be toast, and gold will be the only currency worth talking about.

Time to go shine up my stack…wink

Ccanuck's picture

Fiveith

Been reading the boards all morning, stumble by and hit a Fifth...time to feed the Turd!

This is absolutely the best all around metals/preparation site, a hat tip all contributors!

Edit: Just signed up for monthly subscription,...don't know why I waited so lonnng?

The information I get here is well worth the small fee.

Hey Gold Dog how about a contest for subscriptions...just a though to help spread the word for TURD.

Ccanuck

DeaconBenjamin's picture

When the Sovereign Debt Bubble Bursts, Things Will Get Nasty

 

What do Greece and an unemployed homeowner in Arizona have in common? They are both bankrupt with no hope of ever being able to pay back what they owe.

As I wrote this, I realised it sounded as though I were making a joke (and a bad one at that). The reality is, unfortunately, not funny in any sense, but actually far more worrying.

When Lehman Brothers fell off the proverbial cliff, everyone suddenly realised that lending money to people who have no money doesn't make a huge amount of sense. Due to central banks having decided that they could 'end' the normal business cycle, they decided to make a lot of money available in the early 2000s thinking this would avert a recession. It did, for a few years. Bankers, in the search for money to pay for their ferraris, lent this free money from the central banks to anyone who asked for it.

On that dark day back in 2008, it suddenly became apparent that not only did this money never really exist in the first place (because it was printed out of thin air by the central banks) but that this fake money would never get paid back.

Cue the recession, soaring unemployment and successive attempts, with mixed results, to encourage people to pay down debt.

How does this relate to Greece? In much the same way that banks were give incentives to lend to people who had no money, countries like Greece suddenly looked a whole lot more attractive after the introduction of the euro.

One happy European family, all sharing a (fake) currency! Its introduction led to countries suddenly being able to go to the bank to borrow a lot of dosh at ultra low interest rates. This belief was based on the clearly misguided impression that a common currency would lead to a common way of running a country, i.e. like Germany.

And then the crisis hit. As with individual homeowners who had no money, suddenly it became apparent that Greece (and Cyprus, Italy, Spain, Portugal, Ireland, France, Slovenia and much of the rest of Europe) had no money either.

Cue the sovereign debt crisis, soaring unemployment and successive, definitely failed, attempts by governments to pay down debt.

The sinister thing here is that whereas an individual going bankrupt won't really have much impact in the long run on the global economy, a lot of individuals doing so will. This is why banks are being so kind and generous in letting individuals pay back the money they owe in stages over longer period of times.

In fact it's simply because banks are sh*t scared of what will happen to their share prices if it becomes apparent that a lot of money they lent to people is never coming back.

And the same principle goes for countries. The reason our wise and level-headed politicians decided to 'save' Greece from bankruptcy was simple. The banks who had lent money to the Greek government would have gone insolvent overnight, which would have required other governments to bailout their banks, which would have in turn led to those governments becoming insolvent as well.

Instead we have austerity programmes being implemented in most countries that are designed to bring their finances onto sustainable footings. In the same way a bank will sometimes give an individual a second chance to repay their credit card bill, this is what is happening in Europe. Future growth, induced by that catch-all term 'structural reform', means more tax revenue, which means the ability to pay off these massive debts.

However let's look at the facts. Europe is in decline. Its population is ageing and shrinking, which means ever more expensive healthcare systems and less tax revenue. Its industries are gradually migrating to warmer climes to take advantage of cheap slave labour in China and elsewhere. Where is the money to pay back so much debt going to come from?

The answer, at the moment at least, is 'the central banks'. It is they who are keeping the whole system afloat. But with what? The money they create has no intrinsic value, only the value we place on it. It isn't real.

Why then are stocks and shares the highest they've ever been? Why are countries able to borrow at such low interest rates? Europe is mired in the deepest recession, let's call it a depression actually, since the 1930s. How can this be?

A glance over the past few decades would suggest that, if we look hard, we might spot a bubble developing. A bubble is simply when a group of investors become willing to spend more money on something that it is actually worth. On this basis, sovereign debt is the new bubble.

Are we really claiming that Italy, after several months without a government, deserves to be charged next to nothing to borrow money to pay for the debt it already owes? The intrinsic value of Italy is pretty hard to identify these days. Similarly with most of the developed world, we are living beyond our means and the only thing that's keeping us afloat is a credit card given to us by the central bank.

Who knows when investors will wake up and realise that the money they have lent to the governments of the western world is not coming back. But when they do and the sovereign debt bubble bursts, as the mortgage bubble did in 2008, and the tech bubble in 2000, things could get rather nasty.

Urban Roman's picture

Number ... ??

whatever number this is. I read the article before posting. 

Thinking maybe I'll go hit up TPM for some more silver while the price is still low. 

Mad5Hatter's picture

Take it

the score, thats the score that is, an inside 2 pointer from the light forward cutting in side for the 2 point layup, and no foul was called, but that, missing the long ball 3 pointer of the heavy forward out on the wing, but hey, we scored, nonetheless, and still in bullish lift off mode, with todays higher low. Take it!!! for the score,

And a top 10 turder to boot, atty boys!!!  its called team play!!!

Nana's picture

Paper Contracts

and diminished physical.

Reams of paper.

Very little physical.

Howard Roark's picture

The meeting

No sign of the meeting in the MSM: just the ManUni coach stepping down, the saga (I call it novela) of the women hostages and Dow bubbling... (CNN, BBC not mentioning my national news channels...) 

It´s just a bright (as bright as it gets!) of the manipulative nature of the state capitalism worldwide... 

I would love to read more info on the conversation with Mr. GoldenJackass. It must be explosive. Right?

Salut,

HR

meegoreng1's picture

@Turd

Thanks for all that you do.

I would like to make a suggestion to have an open thread from Friday evening to Sunday evening only, where some of this subject matters that are not related to metals can be posted. And then strictly enforced the other threads to be only on metals and economy only.

This open thread can then be moved to the forums every Sunday evening. Just a suggestion.

Edward G's picture

Yeah....

.....forget software, hardware is where it's at!!!!  enlightenedenlightened

Xty's picture

First

to hat-tip the post.  After reading it.

Howard Roark's picture

About the meeting - again

Not even on the Bloomberg, Yahoo internet sites ("front page"). Just a piece from Peter Schiff on gold and it´s fundamentals (which it´s always good to see/read and remember).

Salut,

HR

Hagarth's picture

Global interest rate cuts

The Bank of Korea just unexpectedly cut its key interest rate to 2.5% fom 2.75%.

This is pretty remarkable, considering that market economists have already been surprised by two other central bank rate cuts this week.

On Monday, the Reserve Bank of Australia unexpectedly lowered its key interest rate to 2.75% from 3%.

Earlier Wednesday, the National Bank of Poland unexpectedly cut its key interest rate to 3% from 3.25%.

These three surprise rate cuts follow two rate cuts made last week: on Thursday, the ECB cut to 0.5% from 0.75%, and on Friday, the Reserve Bank of India cut to 7.3% from 7.5%.

Global growth slowdown, "currency wars," etc. – call it whatever you'd like, but it seems to really be getting going now.

 
 
rtabit's picture

Forget Software. Hardware Is Where It's At!

"There is something that's really appealing about hardware. When someone says download this app, there's really only so much you can get excited about," DiResta said. "But when you see someone in the park with a flying robot, people want to know more about it. People are drawn to physical things."

Flying robots > downloading an app == groundbreaking journalism;

Dr Jerome's picture

Found a silver ring at a yard sale

An old spoon ring--for one US dollar. Has $10 worth of silver in it. The lady said "Silver went down, didn't it?" I said "Yes, but its going back up, way up!

I fear I must apologize for starting that run of Hillary pics yesterday. I have published a scholarly study on Hillary and have maintained and interest in her political career--purely academic of course... Unfortunately, she may be the next US president, especially if TPTB support this sham of an economy for another 3 years. Well, that's my excuse anyway. Good thing I didn't post the famous pic of her dancing with Bill in her swimsuit while on a "marriage-is-all-fixed-PR-vacation" after the Monica incident or it may have spoiled the whole day for someone. You can just visualize it, can't you?

As far as I am concerned, pretty bird pics are more interesting than discussions that turn into flame wars. Metals seem pretty boring.

Loud Noises's picture

Nickels

I swear I have the worst timing with posts and old threads!  Anyway... just wanted to vent to Turdville,

I have been stacking nickels as well as PM's for the past few years.  I amassed a big ole pile of nickels at home with confidence that they were like my 2nd tier PMs and their composition would be changed imminently. 

Well, I'm moving out of state in a few weeks and I don't feel like transporting giant chunks of CuNi along with all my other stuff.  So I'm going back to the bank to deposit an ungodly amount of nickels today.  (Don't worry, I'm taking cash for them and keeping the cash on hand, not depositing it.)

Serious pain in the A.

BagOfGold's picture

Istack...

Good for you on the purchase of your Epiphone DR-100...it is a nice beginner model guitar!...I suggest that you learn how to read musical notation...it will help you to understand music theory...& why notes & when notes are played!...I have 3 guitars & one of them is an old Martin D-18...

http://mynetimages.com/8fb3d6fbfe.jpg

Old tradesman & Goldtop...eat your hearts out!!!...

Bag Of Gold

Howard Roark's picture

But then...

Still no meeting…
After Schiff then comes a guy and… Well then you listen to a critic (Swedroe) on BreakOut: "Gold is collapsing, not bottoming" Or "Gold is not a safe heaven, short term TBills are"(!!!!!!)
Is this the carry trade???
But no meeting.
Salut,
HR

Xty's picture

being a pest but is this post related to metals?

 

Thanks for all that you do.

I would like to make a suggestion to have an open thread from Friday evening to Sunday evening only where some of this subject matters that are not related to metals can be posted. And then strictly enforced the other threads to be only on metals and economy only.

This open thread can then be moved to the forums every Sunday evening. Just a suggestion.

Try to provide more of the content you would like to see and perhaps what you hope for will appear.  But there is only so much to be found out and said and beating the drum 24/7 is surely more unpleasant than the occasional foray into something tangential.

edit: nice guitars and an excellent idea to learn a new skill. 

Teach's picture

REPOST...still hoping for more FOOD FOR THOUGHT...

and I know I'm in the right place.  I am considering pulling my pension plan funds and taking control (and responsibility) for their placement.  The portion I can actually get my hands on is going 50/50 into pms and paying down my mortgage, but there is a sizable chunk that has to stay in paper for 4 more years.  I know very little...nothing...about investing in stocks and mutuals and the like, and am hoping some Turdites could let me know the hows and whys of decisions they would make in this situation.  I quit investing in paper a long time ago because I did not like the volatility or having someone else making my investment decisions, but I am forced to participate for a few more years.  I have thought about investing with Sprott, (have now emailed them) but am quite heavy into physical (about 50% of net) and recognize the safety ...hopefully...of some diversification.  I also wonder what types of paper fared the best in 2008 when the market was doing a swan dive.  Thanks for any insights you all!  This is really important to me and I want to do the best due diligence I can. Thanks again AOmegaa. 

pforth's picture

HEH dead and gone?

It's been over 2 weeks now since HEH was cut from the CBC show and we haven't heard a further peep about it.  Is that really it?  One strike and he's out?

Why isn't anyone else trying to get his evidence out there?  Why hasn't he interviewed with Max Keiser or Alex Jones or Turd?--I'm pretty sure they aren't going to cut his segment!

Seriously, if this guy wants to become less of a target he needs to get his story public before someone gets to him.  Turd...help me out here...what's going on with this?

Texas Sandman's picture

theme music

Howard Roark's picture

But then...2

And some story about J.Dimon (rrrrrrrrrrrrrrr):

"During the financial crisis, JP Morgan Chairman and CEO Jamie Dimon was the golden boy of Wall Street.

Dimon's bank, JP Morgan, was one of the only big Wall Street's banks that didn't obviously need a bailout during the crisis, and Dimon himself made a strong, likable, and articulate spokesperson for the industry in a period when everyone hated it.

After the financial crisis, however, Dimon was quick to criticize the Obama administration and others for bashing fat-cat bankers and quick to resist new Wall Street regulations, arguing that the industry didn't need any new rules and that firms could police themselves.

Then JP Morgan had a massive trading bet go awry, costing the firm $6 billion. And Dimon's critics pounced.

A $6 billion loss on a trade didn't put JP Morgan in jeopardy, but Dimon was forced to admit that the firm hadn't been aware how much risk it was taking. And that blew a big hole in Dimon's argument that Wall Street didn't need rules and baby-sitters."

Just beautiful, isn´t?

It´s on The Daily Ticker. Remember LLister?

ancientmoney's picture

From Ted Butler's article . . .

posted above:

"JPMorgan is short 126% of the entire total commercial net short position in COMEX silver futures. In other words, without JPMorgan’s net short position of 18,000 contracts (90 million oz), there would be no commercial net short position in COMEX silver (all data as of COT of April 30)."

---------------------------------------------------------------------------------

The raptors must be net long; who will win this battle?  JPM owes somebody 90,000,000 oz. of silver, if they want to pursue it . . .

My guess?  JPM adds more silver shorts to drive paper silver price lower and lower and lower til the remaining longs give up.  Paper stops trading, as nobody is left to play the fool in their fool's game.

Dr. Fix's picture

@ meegoreng1

That was a worthwhile idea, there have been many occasions where there were two concurrent threads over the weekend, and very often, the “alternate thread”, can become quite lively, and informative.

It also tends to keep the “gold and silver” thread pure enough to delight those that are only interested in such talk.

For example, those occasions when a Jim Willie podcast was put up on a Friday afternoon, it always made for an interesting weekend.

Xty:

Of all of the posts over the last day that had nothing to do with gold or silver, why would you pick that one out to spotlight?

We spent the better part of the  last two days talking about your legs, On Main Street.

Don't you think you deserve your own "alternate thread" by now?cool

billwilson's picture

Algos all messed up

JPY/USD going through 100 is messing up the algos. Let's see how this settles ... but a big move is going to happen  as stuff gets reweighted ... just a matter of when. In a normal world this should send gold soaring ... but who said we live in a normal world.

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