A National Holiday

Two score and seven years ago this day, during the tumultuous Keynesian Epoch and the disastrous reign of King LBJ, Mama Ferg brought forth a Turd...

...It's just too bad that today isn't a bank holiday (yet).

Anyway, there is just so much stuff going on, behind the scenes and right in front of us, that it is really easy to miss/overlook a few things. Additionally, it makes it very challenging to know where to start.

For example, years ago a story like this one would have been BIG news and it would have elicited all sorts of hand-wringing, discussion and speculation. http://www.zerohedge.com/news/2013-01-28/currency-wars-heating-taiwan-korea-and-china-fire-warning-shots Now it's just another headline in a virtually endless string of fiat currency devaluations.

And then there's this. Glossed over last week and completely ignored by the MSM, this story speaks volumes about the current state of affairs. http://www.sovereignman.com/expat/scam-complete-the-us-government-takes-a-page-from-diocletians-book-10559/

But again today, I want to focus upon that which I know is happening. Of course, I can't prove it and certainly others will suggest that they know the exact opposite. One day, in the (not too) distant future, the Chinese will introduce a gold-backed renminbi for international trade settlement and an alternative to the U.S. dollar as a reserve currency. (By the way, perhaps you'll know this day is drawing near when your spellcheck does not think "renminbi" is a misspelled word.)

Anyway, we know that China officially imported about 800mts in 2012, on top of 400 or so in 2011. Their last public pronouncements on their reserves came in 2009, so, given all of official imports since then, the unofficial and off-the books imports AND the amount they've mined and not exported, it's really anyone's guess as to how much gold they are actually sitting upon. 3000 mts? 4000?? 6000??? And the total continues to grow, as do the imports of so many other nations. Take this headline as just another example. http://www.bloomberg.com/news/2013-01-28/russia-kazakhstan-expand-gold-reserves-as-central-banks-buy.html And, of course, the German Gold Hijinx is just the start of a global move to repatriate reserves. Is Switzerland next? http://goldnews.bullionvault.com/swiss-gold-bullion-repatriation-012420136

And how does this story fit into the picture? http://in.news.yahoo.com/china-introduce-gold-exchange-traded-funds-052201538.html

So, finally, for today let's simply focus upon the strange occurrences within SLV and GLD since the first of the year. Two weeks ago, the SLV added about 18.4MM ounces in one day, more than it had added in all of 2012. http://www.zerohedge.com/news/2013-01-17/slv-etf-adds-record-572-tons-silver-one-day-more-all-2012. Then, back on Friday alone, over 7 million ounces were withdrawn. What in the heck is going on? There are many theories but by far the best I've seen comes from Uncle Ted. Since 18MM ounces would be a holding of just under 5% of the fund...and 5% is the level at which a concentrated position must be reported...Ted thinks that a large investor (a Buyer of Size) has taken this position for the expressed purpose of taking delivery. Fast. Again, this makes the most sense considering all of the anecdotal evidence we've accumulated of delivery delays in similar-sized orders through the LBMA. And just who would be wanting 20MM ounces of silver in a hurry? Go back up a paragraph and read the "china etf" story again.

Even if official Chinese sources are not the buyers of this silver, someone is...and that someone seems intent upon building up a sizeable inventory. Is this the "final straw"? Will we look back with hindsight later this year and conclude that this was the sign that the silver market was finally breaking, after years of price suppression finally led to shortages and defaults? Maybe. Regardless, I like Ted's idea a lot and it certainly seems a plausible explanation for the strange goings-on. (You can read Ted's entire analysis by becoming a subscriber: http://www.butlerresearch.com)

Contrast this action within the SLV with the GLD. While SLV has added (and withdrawn) all of this silver this year, the total inventory at the GLD has been declining. By over 20 metric tonnes! On 1/2/13, the total GLD inventory stood at 1349.92 mts. As of Friday, it had fallen to 1329.90. Hmmmm. So while prices have been rising, falling and rangebound for the first four weeks of the year, both ETFs have seen massive withdrawals of metal by someone looking for immediate access and delivery. What does this tell you?

And here you are, spending your weekend obsessing about the writings of some guy who, fresh off his release from the pokey, seems determined to remake himself into some sort of contrarian. Whatever. He can draw all sorts of lines on his silly charts but none of them will change the insatiable demand of the Chinese for physical precious metal as they prepare the next global financial paradigm.

Instead, let's focus on these lines and these silly charts.

Finally, don't forget that today is the day that the U.S. Mint had promised to resume sales of ASEs. Hmmm, I wonder how long it will take until they are forced to suspend sales again? Later today? Tomorrow? Friday? We'll see. Come to think of it, since ASE demand only seems to increase as price rises, perhaps now we know why silver has been beaten back over $1.50 since Wednesday. Did Little Timmy send out orders to Jamie, instructing him to have The Monkeys bash price in order to curtail ASE demand this week? Makes about as much sense as anything else emanating from the silver pit lately.

With that, have a great day and try to keep your wits about you. The Feb13 gold options finally expire today. (And with it my $1800 call that I bought back in November. Ouch.) And though price will likely remain pressured through FND on Wednesday, things should rebound in short order later this week. Maybe the BLSBS will be a catalyst for buying...for once!

TF

203 Comments

old tradesman's picture

@dph

My thoughts exactly,. Thanks for all you do!! 

foggyroad's picture

TF is 47 :0)

Forty seven is a very good age to be, pretty close to half time, enjoy your fine family, and friends.

Life is good.

I went a little nutty at 47, mid life crisis type stuff, bought a corvette, that's about it I guess, not too nutty.

A word of advice though.

Get any notion of, 'Gee, I'm almost fifty out of your head!

Now, don't let that thought ever cross your mind again, until your 49 years 364 days and 23 hours old.

There is plenty of time to be fifty, when your fifty.

Your 47, not fifty, savor each year as they come.

I wasted half my 49th year thinking, crap I'm 50.

The past is past, the future hasn't arrived yet, no sense being stressed about either.

Find the present, live in it, revel in it, enjoy all the blessings in your life here and now.

Smell the roses, feel the sun on your face, smile your 47.

Best regards;

foggy 

AlexCojones's picture

Facebook Down & Gold UP?

Monedas's picture

Feliz Cumpleaños, Turd !

I had no idea you were so young .... and me being so impertinent .... well, that's not going to change .... couldn't do it .... even if I wanted to ?    Happy Birthday .... south of the border .... take it away !      Monedas     1929      Comedy Jihad Gushing Is Hard For Me World Tour    devil  PS:  Are you 27 or 47 .... if it's the latter .... then, Happy Fucking Birthday .... como chingados no !  Oh, two score and seven ?  Scoreboard:   Home Team:  Life, on Earth   "47"   -   Just Visiting Team: Turdtown, Nebraska  "O" !  May the bacon .... not get stuck between your teeth .... and may the extra sharp cheddar cheese and peanut butter .... never stick to the roof of your mouth !  devil

DarkStar's picture

Happy Birthday Turd!

Happy Birthday Turd! cheeky

babaganoush2307's picture

Lookin' like....

....the Zastava PAP M92 PV Pistol, 7.62x39mm w/ 30 Rnd Mag is winning laugh I was thinking the same thing fellow turdites wink Great minds clearly think alike

Harald's picture

GLD and SLV inventories

So, SLV is increasing their supposed physical inventory by 18 mts while GLD is decreasing their supposed inventory by 22 mts.  Guess we'll find out which instance is bullish or bearish or means nothing unless there is an unprecedented divergence in the price of gold and silver.  Victorthecleaner says declining inventory signals less bearish/more bullish if that makes any sense.  Guess he is always bullish and even more so when inventories are declining.  Actually, pretty interesting.

In order to manage the flow of physical gold, someone might therefore try to manage the dollar price of paper gold. Since the physical inflow is by weight, but the outflow by dollars, one might try to increase the paper price in response to an increased outflow of physical gold and try to lower the paper price whenever there are plenty of reserves. There you go. This is indeed consistent with what we see in our trading strategy: The price of paper gold increases in response to an outflow of physical gold.

Let us keep this speculation in mind as a second possible explanation of why the trading strategy works.

In light of this interpretation, it would be worthwhile watching the total inventory of GLD (the blue curve, right scale, in the very first diagram of this article). The inventory of GLD, the central bank of the bullion banks, should move in line with their total physical reserves. We see that the inventory peaked at 42.1 million ounces (1310 tonnes) in summer 2010, a level that has not been reached ever since. Even though the dollar price of gold rose further from $1200/ounce to $1900/ounce, the investors in GLD were not able to entice the APs to make additional inventory available.

Nevertheless, the present GLD inventory of still 40.84 million ounces (1270 tonnes) forms a considerable reserve of physical gold which the bullion banks can draw on in order to replenish their own reserves. Should the total inventory continue to decline, this would indicate increasing pressure on the physical reserves of the bullion banks. The financial media, however, would presumably tell you that investors are no longer interested in gold, that they sold their shares in GLD and that this was bearish for gold. Nothing would be further from the truth.

http://victorthecleaner.wordpress.com/2012/06/01/gld-the-central-bank-of-the-bullion-banks/

Boswell's picture

I Used BROWN "Frosting"! ;-)

yt9f1.jpg

Silverman's picture

50 level holding

Looks like silver bottomed at 50 level.

Hammer's picture

Nothing ? Noone ? Everyone

Nothing ? Noone ? Everyone shat a brick when Fukushima got damaged and nada, nothing about this ?

Granted it is hard to get confirmed information from anywhere other than Israel news sources and some say it is a ploy by Iran to stop inspectors viewing the site. Who the hell knows ?

http://www.israelnationalnews.com/News/News.aspx/164645#.UQd-Po4eY22

thurd aye's picture

if you have wondered how the

if you have wondered how the current government can blithely engage in the wholesale transfer

of wealth from the poor to the rich, how its front-bench can rock with laughter as it truncates the

livelihoods of the poorest people of this country, why it commits troops to ever more pointless

post-colonial wars, here, I think, is part of the answer. Many of those who govern us do not in their

hearts belong here. They belong to a different culture, a different world, which knows as little of

its own acts as it knows of those who suffer them.

http://www.guardian.co.uk/commentisfree/2013/jan/28/rich-born-to-rule-fatal

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

moderator:

The new thread with film is jamming/freezing my machine,not good.

Texas Sandman's picture

New thread is malignant.

>The new thread with film is jamming/freezing my machine,not good.<

Mine too.  It's a disaster.  FWIW: You are not alone!

philipat's picture

@TS

Works fine for me. System issues for you??

Puck T. Smith's picture

@Hammer: "Nothing ? Noone ?

@Hammer: "Nothing ? Noone ? Everyone..."

Do we know for a fact that this actually happened?  Also, the US is not downwind from Iran.

Hammer's picture

That is exactly the question

That is exactly the question I was asking in my post. Thanks for reissuing it :)

silver66's picture

@ag1969---Nickels

another reason to go thru your stack--LOL

http://hosted.ap.org/dynamic/stories/U/US_MILLION_DOLLAR_NICKEL?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-01-29-06-07-07

Come on 1913, daddy needs a new pair of shoes

Silver66

Wizard's picture

Happy Birthday Young Man

I have known many that have done less in more years

Thank You and Stay Proud of what you have built here.

W

Hrunner's picture

Happy Bday to me and Turd!

Very cool, Turd and I share a birthdate!

Happy birthday, T-man! 

May God bless you and your readers with another year of sharing, education and fellowship.

H

rtabit's picture

SI Daily

You guys sure are bearish.  Anyways here is a very interesting daily fork to watch, it has the exact same slope as the green slope we've been watching, decent touches along medium line, a few really well working floating parallel lines, I very much like this fork, and it's up sloping.  Support from green line currently 30.30 area, lower parallel of fork currently 29.70 area, that's what I want hit (and will look to buy tomorrow if SI gets beat down during FED meeting), would add even more validation to fork.

http://www.screencast.com/users/RandyTabit/folders/Silver/media/e113671b-63c0-43bd-a76e-fb20b41bf48f

babaganoush2307's picture

Gotta have this bad boy in the bug out bag!

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Texas Sandman's picture

rtabit

The time to get positioned was early this month when silver printed that huge hammer with a big long tail & a positive close on huge volume.  They say markets don't ring a bell at the top or the bottom, but this one was an exception.  You didn't need any pitchfork, multicolored lines or goat entrails to see that one coming.

The indicator I use signaled a buy very soon thereafter & I got 30.14 myself.  And I'm just riding it as I've seen no convincing reason to sell despite recent weakness.

Will we see 30 again this move?  Honestly I strongly doubt it.  The reason is everybody & his cousin, including you is waiting to jump on that one.  Most likely, the market will frustrate.  That's what markets do.

Look at all the weak longs on this board & elsewhere who got shaken out by this opex insanity.  We had a throng of folks on this board quoting that convicted felon & probable lunatic Martin Armstrong & carrying on about armageddon for silver longs with alternating forecasts of 25 or 20.  Do I hear 17.50 anybody?? Markets do that to steal your position from you if you are weak.  Shake that tree, baby!!!

Being right is the easy part.  Now, sitting tight... That's an entirely different matter.

Strongsidejedi's picture

Happy Birthday TF

A belated Happy Birthday to you.

tip of the hat to ya

Thanks for all you do and have done to bring us together on the Watchtower

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