The Sunday Evening Post

Sunday, January 20, 2013 at 10:31 pm

Since Monday is a U.S. market holiday, I'm hoping to sleep in. To put my mind at ease, I thought I should take the unusual step of typing up this Sunday evening post.

The challenging part of posts like this is figuring out where to start and how to put it together in some type of logical structure. Hmmmm. Well, I...Uhhhh... Aw, screw it.

Let's start with the two videos. First, here's a short one from CNBC where the "talent" discusses the German Gold Hijinx and actually questions whether or not "the gold is actually there". Holy cow! Talk like this must drive the paper bugs crazy. http://video.cnbc.com/gallery/?play=1&video=3000142033

A more coherent and helpful video on the topic comes to us from the inimitable Max Keiser. (Gee, I wonder if he'd have me on if I ever make it over to London? That sounds like fun!) In this episode, Max and Stacy discuss The Hijinx as well as a number of other issues near and dear to the hearts of Turdville.

Our old pal, Trader Dan, has become a regular contributor over at KWN and, in this latest installment, he discusses the silver market and the short term likelihood of this rally extending UP toward $34 and beyond. You'll definitely want to read this: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/20_Something_Substantial_Has_Just_Changed_In_The_Silver_Market.html

And here's something that I've been bitching about forever...The Globex. Simply put, it has become nearly criminal that "electronic trading" is permitted during times of non-existent, global liquidity. If I had my way, I'd eliminate this 24-our trading nonsense as it clearly gives an unfair advantage to the manipulators, who care very little about price and execution.

For fun(?), here's a sample of something I wrote over two years ago, on the afternoon of a particularly nasty and unfair Globex raid. http://tfmetalsreport.blogspot.com/2010/12/ok-now-im-pissed.html

I bring this up now because of what I saw last week. On Tuesday, Thursday and Friday, it was quite clear that some variation of the same HFT algo was running down the price of gold on the Globex. Without this intervention, gold might have been as much as $20 higher at week's end. Little-by-little, drip-by-drip, the "managed ascent" continues. All the while, the little guy who is simply interested in financial protection, gets screwed and robbed.

You may recall that last month Paul Coghlan hosted a free webinar to tout his charting services and the entire Coghlan Capital site. It was so well-attended and well-received hat he has decided to do another. It is scheduled for this coming Wednesday and you can register by clicking this link: https://www1.gotomeeting.com/register/499274952

And then there's this article that I found at ZH. The author claims that high margins are killing silver. That's interesting, I suppose, though open interest totals don't necessarily bear that out. I mean, they sort of do. If you go back to the heady days of spring 2011, the total open interest was about what it is now. What's slightly different is the Large Spec category. On 2/22/11 for instance, the Large Specs were long 51,000, short 11,700 and spreading 26,430. As of last week, they were long 38,000, short 9,000 and spreading 29,000. So, I don't know if this article is overly helpful but here it is anyway: http://www.econmatters.com/2013/01/high-margin-requirements-are-killing.html

The topic of open interest leads me to last week's CoT. I'll spare you all the usual gory details and simply highlight this: The Silver Commercial gross long position continues to grow, up another 1,360 just last week. As has been the trend, this commercial buying interest is prohibiting JPM from covering at their usual pace and is a clear "civil war" within The Cartel. Looking for a bullish signal? Chew on this: The current Commercial gross long position is 46,337. This is the highest it has been since the 47,797 we saw on....8/14/12...right before price exploded from $28 to $36 over the next 6 weeks.

Lastly, here are some charts for you to consider as we get ready for another week.

OK, I'll think I'll stop there because, if I do, I'll be able to catch the end of the NE-Baltimore game. If you're wondering why I've been typing instead of watching...let's just say that having San Francisco win by 4 instead of 5 sort put my fire out, if you get my drift.

Anyway, have a great Monday and get ready for the rest of the week. It should be pretty wild and crazy.

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Comments

Did the director/s of Tulving

Submitted by daveyboy on January 21, 2013 - 6:39pm.

Did the director/s of Tulving say that? I doubt it, that would be their reputation in tatters and with big customers that is a no no.

Keiser

Submitted by hz on January 21, 2013 - 6:42pm.

Long-time lurker, first-time poster (from Australia). Bit late on Keiser but we have time differences getting in the way, so here goes anyhow. The main thing I like about Max is that he does NOT care what other people think, and for that, I give him a lot of credit as that shows integrity. He still gets some very good guests on his show coz of his reach. However, I’m also convinced he exhibits the behaviour of an intelligent person who has had a drug addiction in the past with those rants (most likely Wall street’s substance of choice).

As to the currency collapse he predicts by April (one of many of these predictions from him IIRC), that's where he loses credibility.

As Bugsy stated, Keiser Report should be done less frequently to keep the quality from slipping too much (I don’t listen to Truth in Markets).

As to Stacy, she just regurgitates articles we’ve already read with little to add.

@Puck

Submitted by Sheetrocker on January 21, 2013 - 6:48pm.

You are so right about false quotes and information. If you lay out 10 points on anything, whether it be a silver shortage, 911 attacks, voter fraud, etc., and your opponent can easily prove two of them false, that pretty well blows your argument with a lot of people, even if your remaining 8 are valid. I believe a lot of the theories flying around the internet are deliberate disinformation, planted for just that purpose.

I agree with what you just

Submitted by daveyboy on January 21, 2013 - 6:49pm.

I agree with what you just wrote sheerrocker, planted and then spread through a misunderstanding.

You mean Hannes Tulving, the

Submitted by Prize Fighter on January 21, 2013 - 6:50pm.

You mean Hannes Tulving, the owner? I've spoken to him once and was abruptly routed to Karen in the front office who says "just a few more days." Not every order was delayed mind you. Only most every one I've known of in the past 8 months.

There is a thread about this in the forums. Other members here can validate all of this as I have spoken with several via PM. As one of six primary Mint dealers, it has been my contention that Tulving has been delaying shipments and dealing with pissed off customers as a shield to the Mint itself. Because, a private company can have bad service but the Mint would be a problem. Well, that postulation was about 6 months ago and from where I sit given the 2 recent Mint closures, I am not surprised at all.

No disrespect whatsoever Daveyboy, and I quite appreciate the opportunity for detailed discussion, but I have strong opinions and experience on the matter as well.

If Tulving have been a

Submitted by daveyboy on January 21, 2013 - 6:52pm.

If Tulving have been a problem, surely you just look elsewhere surely?

It's going to have done their business no good that's for sure.

@Puck

Submitted by Sheetrocker on January 21, 2013 - 6:55pm.

Sorry for the double post.

Stacy adores Max !

Submitted by Monedas on January 21, 2013 - 6:55pm.

That's why she's had a special glow lately .... don't doubt me on this stuff .... I'm the Monedas .... three time loser .... but I see happiness .... when others find it ! The secret is .... Max is even more smitten .... he just plays the tough guy .... but that don't fool old Monedas .... Max is one "Pussy Whipped" Dude in LOVE ! Monedas 1929 Comedy Jihad Hoarders Are Really Caring People Down Inside .... That's Why They Save For Their Loved Ones .... In My Case That Would Be Me Mostly World Tour PS: I hereby give the love birds the OK to name their first little troy bouncer .... Monedas .... boy or girl .... same difference !

RE: Quotes on the Internet

Submitted by DayStar on January 21, 2013 - 6:58pm.

Puck referenced the pseudepigrapha and the fact that they are frequently attributed to Christian writers. I have run into that repeatedly, even when the Christians of the first three centuries who were in a position much closer to the truth frequently quoted from these sources and attributed them to earlier writers, the ones claimed in the pseudepigrapha. Just like gold and silver, truth has many enemies, and there are those who are not above denigrating truth by making truth into a falsehood by impugning the sources of a document with no real substance. I have caught Snopes doing this, and we also see misinformation published on TFMR by those that wish to disparage truth. This has never been more true than the gun issue where statistics are posted on both sides of the issue purporting to show that gun confiscation does/does not make society safer. As we know there are trolls that patrol truther sites with the intent of poisoning the water. The Bible has also been victim of this, as the original source documents are no longer accessible, and skeptics point to the oldest extant documents and claim the Bible is a more modern forgery. Finding truth in the midst of the fog of intentional disinformation becomes problematic.

DayStar

@hv

Submitted by Bollocks on January 21, 2013 - 7:04pm.

Good first post .

I like Max and Stacy and agree with you - he doesn't care what others think of him and also he tries out some crazy stuff, which could work against him, so I give him credit for doing what he does.

The Truth about Markets audios are good. An hour of relaxed chat between Max and Stacy which can, and often does, go anywhere. The most recent one (from a couple of days ago) was really great and filled in some holes in my knowledge.

"As to Stacy, she just regurgitates articles we’ve already read with little to add."

Oh, I don't agree with that at all. She writes the Keiser Reports. She does all the research and puts it all together and produces them. She's as important as Max. With some KR's she's brought the most intelligent arguments I've heard to certain news items.

I agree that Max is a bit of a Wall St casualty. He's been there, seen it and lived it. Hence he has authority - even though many don't particularly like his delivery.

Someone said earlier that Max is trying to make money with his silver coins. I agree with whoever it was that said he wouldn't do that.

He made millions from developing, patenting, and selling some kind of trading software. He's doing alright.

To your point, yes orders

Submitted by Prize Fighter on January 21, 2013 - 7:04pm.

To your point, yes orders since Tulving problems have been placed for MBs with Provident and Gainesville and received them on time as promised. However, those companies also list items as out of stock when they are indeed out of stock. I can speculate from there but that's all it would be. Tulving is the tip of the spear for the majority of ASE sales and when they started getting shaky, a lot of us took notice. Everybody doesn't run out at the same time because there is always a pipeline but when Tulving delays big money orders and then the Mint shuts down, I cannot in good conscious, discount thoughts that this isn't the beginning of something bigger.

Silver Shortage

Submitted by bucktooth on January 21, 2013 - 7:12pm.

Problem: Is there a silver shortage?

Analysis: (just off the top of my head… no links provided)

Available above ground INVESTMENT silver is approximately 1000 million ounces.
Sprott buys in quantity; he reports a significant time delay.
Retail investment demand is a relatively small portion of the overall demand of AG. New demand is occurring as manufacturing use increases.
Mining produces less than 1000 million ounces per year and as reported, ore grades are depreciating and operating costs are increasing.
Limited new mining supply can be expected as silver is usually a by-product; hence, price has little weight on the decision to increase supply.
Recycling is not a reliable supply supplement, hence, has little bearing on long term supply.
A multiyear graph, shows a 45 degree downward angle for available silver until 2005 when SLV was born. That is, paper silver is in play and distorting actual supply.
AGE again out of supply after only 10 days in production.
It is obvious that the vast supply of silver the Government owned has significantly declined.
Economic theory, if a product is under priced, it will encounter shortages.
QE is adding fiat to the system. Not just the US, but all fiat currencies are increasing. This is obviously precious metal positive in fiat terms, additionally, it is investment positive as it is a hedge against inflation.

No conclusion -- rather just more questions:

We don’t know what China is doing with the silver they are hoarding. Went from major exporter to importer. This represents a risk.
We also don’t know what Government regulations could be put in effect to limit demand. For example, a sales tax, see India 4% to 6%, or a VAT.

Just how much supply does the EE still have left to depress the price?

Just when will the market be forced to rely on mine supply as recycling efforts are quite limited?

Just how far can they play the paper game before that supply is shown to be a farce?

What price will it take to get strong hands to part with their investment?

Will manufacturing be able to substitute other elements?

..............

On another important note: Don’t try to replicate the flex seal in a can experiment. As a stacker, it has disastrous results.

http://getflexseal.com/ (30 sec mark -- they float a pickup truck)

Euro thoughts for Indenture

Submitted by foggyroad on January 21, 2013 - 7:12pm.

Thank you, I guessed yesterday that your undisclosed opinion, was that the Euro is special in part, because it is partially backed by gold, approximately 10200 tons or 15% of E.U. reserves.

These holdings belong to various sovereign nations, contained within the E.U., not the E.U. or the ECB, if I'm not mistaken.

The newly created ESM may be able to claim these in a melt down, at least they seem to have extraordinary powers, above those of elected governments and have immunity from legal redress, as does the BIS.

I am no expert in E.U. rules and treaties, but it would seem to me there at best, would be some dispute as to who has ultimate ownership of this gold.

Therefore, the idea that the Euro would be more resilient in a global financial melt down, does seem suspect to me, but as I have indicated I am not an expert.

Your assertion here..

"So, in order for silver to 'not be manipulated' the Dollar must, lets call it 'break' or therefore Treasuries must 'break'. When the Dollar 'breaks' the Treasuries supporting the Central Banks of the world 'break'. "

I would beg to differ, the Silver and even the Gold manipulation, serves the interest of all the CB's not just the dollar, but the Euro and the Yen et. al.

It is not a 'dollar' only benefit, it is a fractional reserve banking model benefit, and it will not be a fractional reserve banking destroyer

as such, it is only one plate, of many, that the PTB have to keep spinning.

A signal failure at the Comex, will break the Comex, but would not cause in and of itself the breaking of the dollar, let alone ,the T-bond market.

It might cause the dollar to loose some ground in the FX market but that would be temporary, and not that big a deal.

The bigger effect would be a substantial bounce in Silver spot price, combined with some 'niggling trust' issues related to paper currency, possibly, crossing the minds of otherwise blissful eyeswideshut types.

JMHO

Hmm ... pseudo stuff

Submitted by Urban Roman on January 21, 2013 - 7:15pm.

Now that it has been batted back and forth several times, I'm beginning to wonder if there is a shortage..

The dealer I follow (and have used in the past), Colorado Gold, is now showing delivery delay times for some of its stock. Not for everything, but they do quote a ten-day delay on their A-Mark generic rounds. They have not quoted a similar delay for several years ... last time there were rumors of shortages and sales of physical shot skyward. Come to think of it, that little episode ended up with silver kissing the $50 mark.

Shortage or not, it's looking like a bullish spring this year.

[edit]
On finviz, I see that gold and silver gapped UP on open, while copper has gapped DOWN. But it hasn't been open long, so that's just noise, really. We shall see overnight.

pretty cool website for silver/gold weight and price calculation

Submitted by Save_America1st on January 21, 2013 - 7:24pm.

SilverRecyclers.com

Not sure if anyone had seen this site before for price and weight calculations, but it's pretty damn cool! Has pretty much everything you'd ever need all wrapped in one kick ass site.

Bollocks !

Submitted by Monedas on January 21, 2013 - 7:25pm.

You almost sound human on your assessment of Max and Stacy .... there is hope for you .... maybe ! It is so hard for British Snot Rot Socialists .... like Piers Morgan .... to understand American genius ! We are the prodigal sons .... that didn't have to come home .... our poor English in-laws have had to move in on us ! I'll keep the light in the basement on for ya .... there's a cot by the clothes dryer .... toasty warm ! Monedas 1929 Comedy Jihad Humble Pie American Genius Tormenting British Stuffy Teapots For Four Centuries World Tour

@ So It Goes

Submitted by Prize Fighter on January 21, 2013 - 7:32pm.

As for this quote in regards to Tulving Maple prices, "So far, there is NO increased premium and NO limit.", I say wrong. First, there has never been a limit on how much you can order so that's a non-sequitur and secondly there has indeed been a premium increase. Sealed Maple boxes have been $1.99 for years and now they are $2.49, which is the OLD ASE premium. Opened Maple boxes were $1.49 and are now $1.99. This is actually fuel for shortage argument and not the "alls well" indicator you may believe.

You know, my immediate

Submitted by daveyboy on January 21, 2013 - 7:38pm.

You know, my immediate counter question to this endless speculation/interpretation about supply vs demand.

What is it going to happen when at certain price points groups and individuals will sell hundreds of millions of ounces of silver into the market.?

You think things have been nasty at certain points so far, I don't believe you have seen anything yet

Turdville Trollish fellow

Submitted by foggyroad on January 21, 2013 - 7:40pm.

Years ago there was a fellow here in turdville, a very sharp guy who seemed to have an insiders knowledge of the workings at the Comex.

He proposed a situation, of backwardation, where a shortage was seemed apparent and the market responded, as expected going long and being bullish. The trap had been set. Out of nowhere the morgue dumps 20000 oz. on the market.

This, if I recall, was around the time when the morgue got their vault up and running in a 3 day period.

It may have been during the last big run up.

Anyone remember this fellow?

coininvestdirect.com - silver premiums

Submitted by JY896 on January 21, 2013 - 7:43pm.

According to the price history of the products they sell shown on their website, premiums for many of their items have increased substantially over last few days:

1000 g silver bars: premium to spot 10.9%, up from 8.9% over the weekend (23.5% increase overnight)

15 kg silver bars: premium to spot 6.5%, up from 5.4% over the weekend (19.8% increase overnight)

No dates of Canadian Maples prior to 2013 seem to be available, except the Wildlife Series coins. Current year Maples selling at 7.4% premium to spot (no price history available).

Current year Austrian Philharmonics selling at 7.4% to spot (price identical to 2013 Maples -- to the cent, also no price history available). No prior year coins listed as available.

Premiums on prior-year ASE's seem to have gone down, from 15% to 9.6% overnight.

2013 ASE's on sale at 12.4% premium to spot -- though they are showing 'historical' prices of this coin as being AT spot silver price for all days prior to today (see the same above for Maples & Phillies), making me question the validity of the historical data they show.

No, this does not in itself prove anything, not does it scream shortage. But I would love to see an explanation of how USMint capacity or the availability of 1 oz. blanks has anything to do with the price of 15 kilo bars. Or the availability of 2012, 2011, 2010, etc. coins of the most popular national mint lines.

Yep, I have been monitoring

Submitted by daveyboy on January 21, 2013 - 7:48pm.

Yep, I have been monitoring the premiums on coininvestdirect.com too, demand has definitely risen, the question is first will it be sustained and if it can, can it really break out?

We will see

Sorry, save

Submitted by Turd Ferguson on January 21, 2013 - 8:00pm.

MODERATOR

Had to moderate that one. Too far.

Lol Monedas :)

Submitted by Bollocks on January 21, 2013 - 8:05pm.

That was hilarious!

But don't ever say I 'almost sound human' again.

That's the last thing I want to be .

InAuguration Day Words From Richard Maybury

Submitted by Green Lantern on January 21, 2013 - 8:09pm.

And I quote

U.S. & World Early Warning Report

38 minutes ago

from "The Fed Caused Disaster Is Here" Vol. V -- Great Monetary Calamity...

WHY GOVERNMENTS ARE CORRUPT
May 2010 EWR

To me, this is the problem: the essence of government—the characteristic that sets it apart from all other institutions—is that it has the legalized privilege of using brute force on persons who have not harmed anyone. Overtly or covertly, this privilege backs almost everything government does.

Who would not be corrupted by the use of this power?

Please, give me the person’s name.

Here is another way to look at political power. There are two laws taught by all religions: do all you have agreed to do, which is the basis of contract law, and, do not encroach on other persons or their property, which is the basis of tort law and some criminal law.

Political power is the privilege of violating these laws.

Who would not be corrupted by this?

Today’s federal government is so powerful that if we filled the House, Senate and White House with saints and angels, in six months they’d all be wackos.

To expect government to produce something that has benefits greater than costs is to expect the nearly impossible. In most cases, government isn’t the solution to mankind’s problems, it’s the cause.

The only lasting remedy is one any of the American Founders would have recommended: less government today, even less tomorrow, and so on, until we need a microscope to find it.

We have the opposite. The Keynesian polices of tax, spend, borrow, print, subsidize and regulate are what got us into this mess, and the blockheads in Washington think more of the same will get us out. Their new medical system and its taxes are icons of their attitude, which can be summarized as, the torture will continue until morale improves.
-RJM

ok

Submitted by Save_America1st on January 21, 2013 - 8:09pm.

"Consensual illusion"

Submitted by Chicagau on January 21, 2013 - 8:39pm.

What a great phrase and you can find it, used very nicely, in this piece.

http://capitalismmagazine.com/2013/01/barack-obama-our-orc-in-chief/

Foggy- anything else you recall?

Submitted by Pining 4 the Fjords on January 21, 2013 - 9:12pm.

I read just about everything here and this one isn't ringing a bell... and since I know you are a straight-up guy, I am sure you are remembering something. Let's figure this out, if we can. I know you go back to the olden times, was this on the Blogspot, maybe spring 2011? Do you see repeating bookshelves in your mind ;-) ? You used the word troll, do you associate this guy with negativity or bragging, like he was boasting "Here's what we'll do?"

anything you remember might help...

My favorite quote...

Submitted by Boswell on January 21, 2013 - 9:13pm.

"Not everything you read on the internet is true."

- George Washington

Or something like that. ;-)

Markus

Submitted by DrkPurpleHaze on January 21, 2013 - 9:21pm.

I'm pretty sure Foggy's referring to markus (marcus?) who went by another poster name and used that as his signature.

edit: stoneeh to be exact

From our pal, Alasdair

Submitted by Turd Ferguson on January 21, 2013 - 9:23pm.

MODERATOR

Via Harvey. Seems he agrees with us on the German Gold Hijinx:

Gold reserve mysteries

2013-JAN-20

Last Wednesday the Bundesbank released a statement to the effect that 300 tonnes of Germany’s gold will be moved from New York and 374 tonnes from Paris. This should be a simple operation: rail or trucks from Paris, and a few military planeloads (or ships) from America – as soon as they have somewhere to store it.

Instead they plan to do it over the next seven years, which is a postponement. This tends to confirm suspicions that the gold does not actually exist. As a side issue, along with the Bundesbank statement is a PDF download with slide number 14 entitled “Storage at the Federal Reserve Bank New York”. It looks like a photomontage rather than real gold, and the come-on is to believe it’s the Bundesbank’s. This gives the game away: the whole exercise is a public relations stunt.

Why hold any gold in New York nowadays? The Soviets are no longer menacing the Fulda Gap. Yes, New York is obviously still a critical trading venue, but not for physical gold – the Bundesbank apparently withdrew 940 tonnes from the Bank of England in 2000, where the physical market is actually located.

The reason this matters is that independent deductive analysis has concluded that the central banks have been supplying the market with physical bullion in order to suppress the price, all of which is either officially denied or goes unanswered. The origin of price suppression actually go back to the 1990s, and was exposed by Frank Veneroso in a paper published in 1998, confirmed by detective work from our own James Turk, and triply confirmed by the evasive responses on this issue given by central banks and the IMF to the Gold Anti-Trust Action Committee (GATA). The public are unaware of this issue because the mainstream media, with the occasional exception, refuses to investigate the subject.

But here is something that joins up a few more dots. We know that Gordon Brown sold half of Britain’s gold at the bottom of the market from 1999-2002. We commonly assume that he was just incompetent. What is not commonly appreciated is that he learned his economics from Ed Balls, the current Shadow Chancellor. As his economics advisor, Balls was the puppet-master and Chancellor Brown the puppet. Ed Balls was also a close friend of Larry Summers, who was US Deputy Secretary of the Treasury from 1995 and then Secretary of the Treasury from 1999 to 2001 – the time of Britain’s gold sales. As Treasury secretary Summers was head of the Exchange Stabilization Fund, the US government’s mechanism for supplying bullion to the markets. In the light of these deeply Keynesian relationships from the mid-1990s, it is unlikely that Brown acted in isolation. More than likely Washington was also supplying the market through swaps and leases that were never recorded as changes of ownership.

The net result is that there is not enough physical gold left in the vault to deliver to Germany, which is why they are stalling for time. What was presented to us last Wednesday was just a desperate attempt to stop the whole issue becoming more public.

Tags: Bank of England, GATA, Germany, gold reserves

Author: Alasdair Macleod