Raiding the GLD

Time to broach this subject again.

Just yesterday, the GLD saw a withdrawal of 8.88 metric tonnes. This followed a drawdown of nearly 23 tonnes on Wednesday. In fact, since the start of 2013, the GLD is now down 59.61 metric tonnes or 4.42% of "inventory". 

Hmmm. Now where has that gold gone?

  • Has it simply been returned to the Authorized Participants' vaults as investors reduce their exposure to precious metals?
  • Have GLD investors liquidated shares and taken delivery?
  • Or, as argued back in November, are the APs using the GLD as a store of gold that they can easily access anytime they struggle to find legitimate physical metal to deliver to clients demanding immediate allocation and delivery?

If the third bullet is true, then GLD drawdowns would be symptom of very strong, global physical demand.

So, for your consideration, let's revisit this issue. First, here's a reprint of the points that Andrew Maguire made initially. The full link can be found here: http://www.tfmetalsreport.com/blog/4327/guest-post-price-suppression-mecanics-gld-and-slv-andrew-maguire

THE PRICE SUPPRESSION MECHANICS OF GLD & SLV

The bullion banks finance their ‘physical inventory’ by leasing it or selling it to GLD and SLV shareholders/investors, then the bullion banks in turn use these ETF’s inventories as a ‘flywheel’ to both manage and leverage their physical reserves. For this walk-through, I will use GLD as an example. (One can substitute SLV for all that is described below relating to GLD except the basket sizes are smaller, constituting 50,000 shares).

Baskets of GLD shares are bought and sold through a limited number of Authorised Participants. The authorised participants, (AP’s), are JPMorgan, Merrill Lynch, Morgan Stanley, Newedge (a joint venture between Société Générale and Credit Agricole CIB), RBC, Scotia Mocatta, UBS and Virtu Financial. This is how it is supposed to work. The size of each GLD basket comprises of 100,000 shares, each share representing just less than 1 troy oz. The AP’s, transfer ALLOCATED physical gold to the trustee who in turn creates the required number of new baskets of shares and then transfers these newly created shares back to the AP. To redeem the shares for physical gold or silver, the AP’s transfer any number of the baskets of 100,000 shares back to the trustee who then redeems these shares and transfers allocated gold back to the AP.

This is all well and good on the face of it, but there are a number of ways this ‘allocated’ gold backing the shares in the ETF can be diluted /hypothecated in order for the bullion banks to ‘manage’ their physical reserves.

If, as is often the case, there is insufficient allocated inventory available to the bullion bank at the current Comex driven & discounted spot fix price to create the necessary new GLD shares backed by allocated gold, then it is possible for a bullion bank to borrow short these GLD shares from the ETF instead of providing the required Allocated physical to the trustee to meet this obligation thereby ‘fly wheeling’ this physical demand in order to meet obligations elsewhere, likely at the day’s gold fix. This obviously has the effect of manipulating price lower vs. the true immediate supply demand fundamentals as no allocated physical metal has to be bought on the open market at that days fix to meet this new share demand as should be the case.

This is now the point where transparency evaporates. The AP claims to be Short GLD while concurrently claiming to be backing it with an equal size long ‘UNALLOCATED’ spot gold position. However, LBMA unallocated gold accounts are run upon a fractional reserve requirement and leveraged around 100/1 so there is very little need to back this transaction with any real physical at this point; this is left until later as explained below. To unwind this short GLD position, the bullion bank has to ALLOCATE the required amount of unallocated gold and then transfer this gold back to the trustee thereby receiving back the required # of shares in order to repay the original GLD shares sold short.

However, in conjunction with concurrent concentrated short futures positions, the sole object of this entire charade is to assist in depressing the price of gold at times of strong physical demand so that the futures price can be capped, usually at key inflection points where the price would break out and also swamp the very large concentrated Comex short positions. If this were not the case, the bullion bank would simply bid up that days fix price until it reflected that days true supply demand price levels for that fix and provide allocated gold to meet this real demand at that higher price.

The resulting distortion now created between the real and paper market price is exacerbated through the use of heavy position concentration and leverage in the futures and derivatives markets, where these very same bullion banks then seek to profitably repay the shorted GLD shares at a lower price at the point at or below where the lines cross profitably. This then puts these bullion banks in a position to finally spot index UNALLOCATED gold against this naked short position only then moving to buy the now discounted unallocated gold into the Comex contrived dips. These discounted unallocated long spot index positions are then ALLOCATED at the upcoming fix, enabling both the repayment of the GLD short position at a profit but most importantly controlling the rise in price against much larger derivative positions elsewhere.

Conversely, as evidenced by the steady 12-year stair step rise in prices easily observed in the daily and weekly charts, despite this many-year capping, we have also seen an ever larger and untenable LBMA unallocated short positions grow to what I now consider to be extreme danger levels. The reason is as follows: When the Bullion bank needs to make good on the unplanned/unanticipated CB and sovereign physical allocations at the fixes, they have regularly achieved this by going long GLD vs. short/selling UNALLOCATED gold. They then immediately turn around and transfer the required number of baskets of GLD shares to the trustee and receive ALLOCATED gold in return. Instead of settling/covering the short UNALLOCATED leg with this ALLOCATED gold, they are forced to satisfy these CB and Sovereign allocations by providing them this metal instead. The longer term price charts reveal this stair step higher, whereas we see no reduction, in fact from 2008 an increase, in the naked short Comex, (and unallocated OTC), bullion bank positions.

I hope this has been helpful in providing an insight into the internal dynamics of the ETFs and how the bullion banks continue to operate in the shadows.

Quite a few folks found this explanation a little too technical and slightly confusing. To help the cause, a few days later I took a stab at deciphering Andy's message:

_______________________________________________________________________________

Finally today, please allow me to take a stab at explaining in greater detail the "Guest Post" from Andrew Maguire. I posted it on Wednesday as we were leaving for Thanksgiving and I can see now where it caused some confusion. As you know, one of my favorite techniques for explanations is the chronological layout so let's give that a try. Additionally, I think I'm laying this out accurately. This is how I understand it. I'll check with Andy on Monday to ensure that this is at least close to being accurate. If it's not, I'll post some additional clarification then.

  1. The "Authorized Participants" have a special relationship with the fund whereby they issue metal, 100,000 ounces at a time, to the fund in exchange for 100,000 share blocks.
  2. This should function as a two-way street where the AP can get its metal back by redeeming shares and the AP can also supply additional metal in exchange for additional shares. THIS, HOWEVER, IS WHERE THE TRICKERY AND MANIPULATION BEGINS.
  3. On big UP days in paper price, there is often a big physical demand in London and a big demand for additional shares in GLD.
  4. This is a double whammy of demand. The Bullion Bank (and Authorized Participant) should have to not only supply metal at the London allocation but this same BB/AP might also have to deliver metal to GLD to cover all of the newly-issued shares.
  5. I think you can see where that's a lot of metal and, in an environment of limited inventories, rapid BB/AP supply depletion would lead to shortages and even higher prices.
  6. So, here's the trick they employ to manage the situation, even doing so at a profit: The GLD delivers the gold back to the AP without the AP actually redeeming their shares. The AP is considered to be "short" the shares, instead.
  7. These shorted shares provide the "offer" against the investment world "bid" for GLD shares that day on the NYSE. Since no new shares are needed to be created that day, no new demand for physical deposit is created, either.
  8. On the other side of this trade, GLD delivers metal to the AP as if it had redeemed the shares, though. The AP uses this metal to settle the physical allocations for that day.
  9. So, where there should have been two, separate demands for physical, the demand was met by short-selling GLD and then using this GLD metal to meet allocations in London.
  10. The effect is then chronicled by Harvey and others as "gold went up $20 but, mysteriously, GLD shed 2.72 tonnes".
  11. Here, then, is how they reverse these "trades" and return everything to where they were. The BB/AP that is short the metal to the GLD needs to put it back in at some point. The next time a paper price raid is effected on the Comex, the AP itself takes delivery of some metal in London.
  12. This metal is then returned to the GLD in exchange for a "covering" of it's short position.
  13. This, typically, takes place on a DOWN day where Harvey et al notice that "though gold declined $15, the GLD added 2.72 tonnes of metal today. Go figure."

Anyway, I hope this helps explain the process. Again, the Bullion Bank that is also an AP of the GLD can "flywheel" metal into and out of the GLD and/or SLV anytime they need to in order to meet physical demand elsewhere. In the process, the BB/AP conveniently provides liquidity for GLD/SLV share demand, which negates additional GLD purchasing which would have otherwise been necessary. It's a true WIN-WIN-WIN for the BB/AP as they are able to cap and control price while appearing to have no problem meeting London demand and then they turn around and cover all the positions at a profit on the next bout of price weakness.

Again, THIS IS NOT SUPPOSED TO BE HOW IT WORKS. The banks are supposed to supply metal to both the GLD and the London buyers. There is not, however, sufficient supply to make this happen at the current price levels. So, instead of allowing price to rise to the natural equilibrium of buying and selling interest, the BB/AP uses the tricks outlined in Andy's guest post to manage and cap the situation. On the bright side, THIS CANNOT CONTINUE FOREVER and, WHEN it fails, the reset in price will be spectacular to behold.

_______________________________________________________________________________

By the time the next week rolled around, there was an active discussion on the internet regarding the accuracy of this analysis. (No doubt this post will reinitiate the "discussion" and bring out many of the same commentators.) Here's a link to the follow-up discussion, posted a few days later. Before you form an opinion on the matter, you'll definitely want to read both sides of the issue:  http://www.tfmetalsreport.com/blog/4354/cage-match-bron-vs-denver-dave

So there you have it. All of this should all make a very interesting reading assignment for you as we wait for today's GLD numbers. Could there be another huge drawdown? If so, what does it mean? Does it even matter? I look forward to reading your comments.

TF

p.s. Andy just recorded this morning another interview with KWN. Be sure to check that site later today for the full interview.

313 Comments

Mad5Hatter's picture

The Gov

El Gordo

Gov even making heads fakes with the 2nd amend, and gun dealers could not be happier, stuff flying off the shelves, eh?

Arnt they all just pathetic saps?

THAT 2nd amendment is the PEOPLE's right, DAMN IT, IT MY RIGHT, that the gov should be protecting, not destroying, but they know, as we do, guns are the last ditch defense to totalitarian socialistic fascist rule from that cesspool in DC. For in the final analysis, there are allot more common folks with guns, and as they mismanage the public trust, and send us all into the abyss, its those guns that will make the pause.

Lets just hope, when push come to shove, we have few of 22 yo girls about, to lead the militia battalions against those who would enslave us all with their taxes and handouts.

Maybe in 10 years, when the boys are of age, I may be as brave .... and walk the walk.

Nick Elway's picture

@Vet @Adolf @Kid Maybe Raiding GLD and SLV to make delivery

Thanks for the wonderful input.

In summary,

1. Some entity with enough GLD shares (possibly borrowed shares as suggested by Turd and AM) can get physical gold from GLD and deliver it to satisfy a Comex short gold position. Similarly with SLV.  The raid on GLD shows that some entity is obtaining a significant amount of physical gold.   This would be almost the same as my assertion of settlement with ETF shares, making my assertion functionally possible while preserving the Kid's adamant denial as technically correct.  Such a 2-step exchange wouldn't show up in the EFRP report the rules require.

2. The relevant rules are in 538 Exchange For Related Positions http://www.cmegroup.com/rulebook/files/RA1006-5.pdf 

3. JPM and HSBC don't need to worry about breaking the law..they are too big to prosecute and just get a cost-of-doing-business wrist slap for behaviors like wash sales, LIBOR rigging, and drug-money laundering.  Rules? They don't need no stinking rules!

El Gordo's picture

SS

Somebody's got to keep those deer from taking over.

Counterfiat's picture

Russellites jw

I don't think pacifism stopped the Nazi's or imperialist Japan.
People who are followers of God's truth don't hide behind pacifism when they are able with God's help, to defeat some of the most horrific evils the world has ever seen. 
 
What part of this pacifist cult helped to stop and free the world from the Nazi takeover, and liberate others, including 'their own'? 
You mean they did NOTHING ... and their integrity is intact? The 'fruit by which they are known' applies here. Or are you going to desecrate the memories of the fallen soldiers?
 
Your being pacifist, I wonder if you believe that the second ammendment is given by the devil? Retrospectively ofcourse, as Charles Taze Russell your founder was only born in 1852.
 

http://www.watchman.org/fast-facts/fast-facts-on-jehovahs-witnesses/http://www.truthnet.org/Christianity/Cults/Jehovahwitness5/

Ecclesiastes 3

King James Version (KJV)

To every thing there is a season, and a time to every purpose under the heaven:

A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted;

A time to kill, and a time to heal; a time to break down, and a time to build up;

A time to weep, and a time to laugh; a time to mourn, and a time to dance;

A time to cast away stones, and a time to gather stones together; a time to embrace, and a time to refrain from embracing;

A time to get, and a time to lose; a time to keep, and a time to cast away;

A time to rend, and a time to sew; a time to keep silence, and a time to speak;

A time to love, and a time to hate; a time of war, and a time of peace.

What profit hath he that worketh in that wherein he laboureth?

10 I have seen the travail, which God hath given to the sons of men to be exercised in it.

11 He hath made every thing beautiful in his time: also he hath set the world in their heart, so that no man can find out the work that God maketh from the beginning to the end.

Hammer's picture

OK, let's get something

OK, let's get something straight about Soros selling half his GLD. He rolled into yen and made a very handsome profit. While everyone has been getting weird about how low au is getting, I have been quietly saying "but not in japanese yen."

The dollar has afe haven status due to it being so important for trade worldwide etc. How long that will last as the merrygoround of "tag, it's your turn to devalue your national currency" goes on is anyone's guess. It was the yen's turn over the last month or so. Who's next ? Oh yeah, The British Pound. OK, who's next ? etc etc etc.

Currency traders are having a field day if they get it right. And Soros did by rolling out of GLD into yen.

http://www.businessweek.com/videos/2013-02-22/how-yen-weakness-affects-gold-prices

philipat's picture

GLD depletion of Physical Gold

I think my point is along the same lines as Hammer. Excuse me if I am being naive or missing something here but as follows:

  1. At least in theory, GLD is supposed to hold physical Gold exactly (Oz/Oz) in line with the number of GLD shares outstanding.
     
  2. Over the last few weeks Gold has been under pressure and a number of major Hedge Funds have cashed out of GLD (Including Soros) because GLD was their preferred vehicle for investments in Gold.
     
  3. If major players cash out through an AP, irrespective of whether the settlement is in Fiat or physical, the number of outstanding GLD shares would decline and so the amount of Physical Gold held by GLD should reduce commensurately as the Gold is either handed over to a major player or sold to pay the investor cashing out in Fiat (Again whether in Fiat or Physical Gold makes no difference because the Gold would have to be sold to settle in Fiat)

So why is it such a big shock that Physical Gold should be declining in GLD? Isn't that just a direct reflection of the fact that major players have cashed out through AP's?

Again, I am asking as much as saying and I may indeed be missing something??

philipat's picture

@Counterfiat

And Gold, the topic if this site, is the devil's money. Thank you for gracing us with your presence but might I respectfully suggest that you go play elsewhere where the topic is more worthy of your noble sensitivities?? Or, put more simply, Go forth and multiply. Off!!

Tabberto's picture

Trader Dan

Has his moments and can be worth listening to.....however, he DOES NOT understand the issue of backwardated monetary metals and his attempt to play 'i know better than you' has discredited him in my eyes.  This is a complex subject but my view is that his recent narkiness (and yes I do think he was referring to TF in part) is solely due to being accurately called out on his 'backwardation in corn is the same as in gold' chat.  Everyone gets things wrong sometimes and you cant know everything, he should just admit this - bear in mind too that he knows nothing of the london otc market so bantering on as if he does and effectively calling Professor Fekete a confused old man is a disappointing performance all round.

On another matter, I visited an antiques centre in Bedfordshire yesterday and found a bunch of 2008 silver eagles being offered for the jolly price of £45 a go!!  When I explained how the pricing should work (including premium, vat etc) I got a look of utter bemusement from the dealers.  Clearly this 'stacking' is new subject for many!   I also had a VERY long conversation this week with UK customs having imported some physical from SD in the US - they simply couldn't understand what i would want with 10oz silver bars, except they seemed darned sure something dodgy was afoot! Still haven't been delivered them yet, trying to retain sense of humour in the face of the state and its machinations........

customs-dogs.jpg

nathan1234's picture

GLD and SLV are vehicles

GLD and SLV are vehicles designed by the banksters to make you pay for their gold.

It's your money and their gold.

The bits of paper called certificates are just that- bits of paper.

Anyway why would any adult and right thinking man buy something and handover possession to another!!!!

It's like paying for a prostitute while someone else gets to to the job.

You get screwed every which way.

philipat's picture

@Tabberto

GBP45? Isn't that now about USD 40 ;-)

JazzTalker's picture

Trader dan again

I just went back to JSMINESET and looked back at Santas post over the past two months. There's a major divergence between him and trader dan.  i wonder what those two are talking about if they are still talking:)  I personally don't have any answers for anyone, but it is interesting to see this disparity between the two.  

I still believe one has to look at all the data points for the mid-long term perspective.  I don't trade so im not as concerned with the points of the  short term.  But if Santa's claim about these folks are about to go long I wonder why trader dan doesn't hold that same perspective given santa's history.  o well not sure this is something to focus on but it's very very interesting.

JazzTalker's picture

SPROTT< Rickards<Sinclair, et al

Big money people, successful individuals all have been providing analysis on what the CB are doing.  They have been putting their money with their mouth is.  They all have some type of alignment on where things may go, and have all indicated that there are bigger hands playing in the gold market to drive prices.  There's been GATAs documents from the IMF, FED, etc to point toward funny things going on.  We have Fed chairmen statements talking about the gold markets or inferring to them.   We have Trader Dan that says markets go up and markets go down....

We have China buying gold (no they are not speculative money, but have more money then the specs) we have Russia buying gold (no they are not speculative money, but have more money then the specs). I have spoken to people in Asia and they are buying gold people.  They know what's going on.   We have smaller countries buying gold. We have Germany saying bring back my gold.   We have the queen going out in London with their propaganda saying "look at all this gold" we have the Fed audit saying "we have gold" --the admition of gold is the denial that something is us.

We have massive upon massive paper trading - more then supply.  We have major gold companies saying they are in need to increase reserves...that there resources are dwindling.  We have minimal junior mines that have high grade resources to mine, for majors to buy.  

Connect the dots.  Look at the entire picture. not just what maybe going on with some hedge fund managers in the US.  One is naive to think that the gold market will be dictated by the US markets only-this is global my friends.  This is a global rush going on and someone doesn't want this baby to run.

A war is ongoing in these markets.  We can either see it or not.  We can either say that it's all about the speculative money or we can see what is going on with the real markets (the physical, the big big money)  Whether china or the US is playing a game in the market, there is a game going on in the gold market..

We can't be fooled by analysis that looks at the narrow, must look at the broad picture.   My bet is with the big money players.  Focus..Focus..Focus.  I have blocked out many analysis if they dont' take into consideration all the data points...not just the data points they want to see.

If we are all wrong....then we can stand on the food stamps lines together.  But i would not bet against those who have been right and have made significants amount of money.   

I need analysis of the BIG picture not of the small time analysis.  I will view everything but will take what I need based on what I assume could play out.  I could be wrong.  But in the world we live in you have make your bet based on the bigger picture. 

There's too much at stake right now.  Will see very soon. By 2014 we will see a clearer picture about where the world is going, if not sooner.  Many aspects to consider right now. Geopolitical, economic and geologic.  

There's a law of the universe.  You can't print, lie and cheat...There's no free ride. Eventually, the forces will rebel.  Believe it or not. Time will provide us with the answers.  

nathan1234's picture

In lighter vein but meaningfully

 The dollar collapses , Ben gets a heart attack and passes on for fear of being strung up and pissed on.

He approaches heaven and thinks St. Peter will permit him access.

On the way, Satan appears before him .

" Let me through " Ben pleads with Satan.

Satan screams with laughter and says " You have always been mine. You have been destined for and are only qualified  to be in Hell.

I trained you. I gave you protection on earth, while you carried out the work ,through my proteges like Timmy, Hank, Alan, George and Barry.

In hell your printing capacity for notes is needed to keep the hellfires going.

And anyway Money as you call it has no value in Heaven."

boatman's picture

philipat

i bought a volkswagon van in honolulu, Hi in '68 from the guy that was writing 'Mr. Natural' head comics as he moved to SanFran.

Orange's picture

Turdite Alert!

Turdites, oh my God, we have got to sell our gold immediately, its going to crash. Sell sell sell.

What a turkey this guy is. It may go up and down, but it won't end until we have a reset to a new gold backed currency as the dollar crashes and burns! It's pretty damn obvious that the time is coming closer when you see what the CB's are doing.

"We have been concerned about gold and silver prices for some time and the recent loss of momentum has concerned us even more," said Citigroup analyst Jon Bergtheil. He says it's possible that the 12-year bull market in gold and silver has ended.

"If gold is currently peaking, it may have a long way to go down in terms of dollars per ounce as well as in the matter of the extended time frame," he said.

http://www.twincities.com/business/ci_22648706/money-gold-and-silver-prices-could-be-primed 

Groaner's picture

Can't the sheeple see where this is all going?

Everyone just follows the crowd, believes what ever garbage is told them, and willing to never question anything. 

How easy steeple are to be deceived. This has been going on since Adam and Eve were sold a bill of goods, lied to and they bought it.. duhh.. and that's why we are in this mess, why we get sick and die, why we have wicked governments ruling us.

The party is over for the so called American dream, kaput!

The loss of freedoms that are gradually taken away in the name of national security, or using the terrorist card over and over again, or we are doing this for your safety is nothing but a cover up for other motives..

It couldn't happen here, we have rights.  Blaahhhhh.

Those who fail to learn from history are bound to repeat it.. 

I see an acceleration of things speeding to an end for this system. 

The 30,000 drones being purchased to spy plus this new building for the NSA which will be the most invasive illegal intrusion of any privacy you might think you have.. or is this a counter part SS Guard? When you figure it out it will be too late.

http://www.aclu.org/technology-and-liberty/nsa-spying-americans-illegal

As you know I am putting my trust and faith in the rightful ruler of this world, Jesus , by means of God's Kingdom,  that will step in and get rid of wickedness once and for all time.

There is no way people can stop what is going to happen.. 

There is no doubt in my mind that we will see Armageddon, the Satanic rulers of this world are quickly heading for a battle with the King of Kings and they will lose.. Who's side are you on?

REV 16:14 They are, in fact, expressions inspired by demons and perform signs, and they go forth to the kings of the entire inhabited earth, to gather them together to the war of the great day of God the Almighty.

15“Look! I am coming as a thief. Happy is the one that stays awake and keeps his outer garments, that he may not walk naked and people look upon his shamefulness.”

16And they gathered them together to the place that is called in Hebrew Har–Ma‧ged′on.

http://www.jw.org/en/bible-teachings/questions/what-gods-kingdom-will-do/

Orange's picture

Interesting discussion

Ben Davies thinks that revaluing gold and backing the monetary system with it could be one of the least disruptive ways out of the credit mess. The continuance of debt monetisation on the other hand has the potential to cause a hyperinflationary collapse. 

http://www.goldmoney.com/podcast/ben-davies-part-2-2-on-the-gold-price-and-inflation.html?gmrefcode=gata

Adolf_Hitler's picture

@Tabberto

Based on my reading Trader Dan's blog, Trader Dan seems to be a momentum chaser and swing trader. He doesn't seem to know a lot about the physical market. He doesn't care about the fundamentals. If I remember correctly, he mentioned on his blog that the mining shares are down because the management of mining companies are not getting their houses in order.  Although I don't trade mining shares, I find it hard to believe there are no good mining companies with sound fundamentals in this sector as Trader Dan claimed.  

Just A Regular Guy's picture

A few tid-bits

Hi kids, wow so much stuff going on!

A few interesting things - multiple markets are @ (from what I can tell) an inflection point - Stocks, PMs, Forex, and say Gilts/JGBs. I'm bullish on PMs here, as the people that say ZOMG gold to $1200 I believe are wrong. $1500 IMHO is an absolute limit. I would also hazard a guess that the miners would simply NOT SELL their dore @ less than say $1500 to constrain supply and put upward pressure on price in the spot market. Although this might be trivial as most gold mined hasn't been "consumed" and is merely locked up in vaults or around peoples fingers/necks/wrists, so maybe it will move the price up then market participants will sell their individual "treasures". Suffice to say a lot of people are calling for a big up-move in the price, but as I said before I definitely think we're @ an inflection point. Considering stocks/some currencies and some bonds are signaling current weakness and implied future weakness that money has to go somewhere and PMs have had the living shit beaten out of them over the last few months.

Some other nonsense - I saw an interesting quote on Rickard's twitter. I think it goes thus "The first thing you learn as an analyst is that there are no coincidences" [I think "analyst" had intelligence before it, I cannot remember]. Considering this, here's some crap to think about (keep in mind the theme of "signalling" i.e. talking in code).

The Dow cannot break 14k: 2013 is the year of the dollar sell-off (as John Williams says) and the year the dollar takes a mortal blow (Jim Willie), this year is the year of the snake. I have been told by a few people many are "cautious" in this year. With 2014 being the year the dollar is killed (JW). With this and the number theme in mind, "4" is a very unlucky Chinese number (due to sounding like the word for "death" in Mandarin). Well what does next year end with? Correct, a 4! Rickards believes the "spike" wont take place till say 2017/2018. Go check out the significance of 7, 8 and 9 in Chinese culture.

The Pope has resigned - I was driving home earlier and he said God had told him to go "climb the mountain". If you think about what the world is going through today in terms of the power/money/geopolitical shift (and one would have to be naive to think the Holy See is not at ALL involved) it is quite an intriguing comment given this backdrop. He could have said "I'm old/sick etc." (obviously I am being overly simplistic, but you get the idea) and referred to something less significant (see this full article to understand what I mean http://www.catholicnewsagency.com/news/pope-benedict-says-he-is-not-abandoning-the-church/ ).

Anyway, that's about it, some more dots and speculative sh!t to confuse you some more smiley

Peace guys/gals

Mad5Hatter's picture

tx

Thanks Turd, for being here, with all the good info, insight, pods, and stuff like that. :)

The Vet's picture

philipat - GLD depletion of Physical Gold

Your description and conclusions are accurate but you have not considered the effect of short sales of GLD shares which distort the number of GLD shares issued to the physical gold held by the ETF.  While the mechanism of creation and destruction of shares should ensure that every share has an exact and known quantity of gold backing it, short sold shares add to the supply of shares but not to the corresponding stock of gold in the vault.

A retail shareholder who bought GLD shares and holds them in a margin account never knows if those shares have been lent to a short seller or not.  He still believes his shares and the gold they represent are his when in fact they could have been lent out, traded a hundred times by various HTFs and finally included in a parcel that was redeemed for physical gold without him being any the wiser.  He still has the book entry but the physical gold those shares were backed by is probably in Hong Kong ready for shipment to China!

Puck T. Smith's picture

@JazzTalker

Mad5Hatter's picture

Throwing Bones

Every time I do, IT JUST FEELS RIGHT, it feels like late August 2010 again. I jumped backed into Lemet, and told murphy, this baby is gonna rock, right here, right now, and he agreed, and silver went on a run to 50$, at which time, I moved some silver to gold on the ratio. But this is not late summer, the typical seasonal launch. The dollar printing, and gov impasse may be the seasonal game changer. We have had 1 good summer rally, out of 11, the odds are against, so it seems, that this next move will be big and slow in starting the big mo, but the mo will build and should last a year til next may-ish, or so it feels.

It just bad-A meh, just throwing bones, and man its looking real bad, to the bones.

Monedas's picture

Comrades, I appreciate all of your manifesto (long) posts !

Some of your posts were even charming and humorous .... except for Taberto .... I'm with Customs .... what do you want 100 trounce bars for .... I've got a few .... but nevermore saeth the Raven .... nevermore .... don't mean to be mean .... but everyone knows .... the manipulators track Monedas .... being the heritage hoarder .... opinion maker that he be .... and they time their nasty moves .... to discredit him .... and with this in mind .... I throw them a little bait .... so they can strut their stuff !  The bottom is in .... from here it's up, up and away in my silver balloon .... Mr. Bernanke .... I double dare you .... to embarrass me .... in front of my colleagues, pupils and adoring disciples .... have at me with your rubbery little penis !        Monedas     1929        Comedy Jihad More Humour Less Vulgar World Tour   devil

Mad5Hatter's picture

We enslaved ourselves, willing piglets ...

The loss of freedoms that are gradually taken away in the name of national security.

=====

that's just one attack on our freedom. Enslavement to taxes and handouts is the most despicable kind of self-enslavement, we actually VOTE FOR IT. Lay it on, where it belong, a majority of insecure unproductive looking for gov for the easy ride. We have enslaved ourselves.  Tell me that aint phucked up big time.

The american populus has bought into the nanny state, after 110 years political pandering, to where, WE ARE NO LONGER the strong character Americans of the 19th century.

We have been pussy whipped, into submission, by our weak minds, buying into gov promises.

http://totalcontrol.blogtownhall.com/2011/07/09/americas_corrupted_judiciary.thtml

http://totalcontrol.blogtownhall.com/2010/08/08/intellectually_dishonest_democrats.thtml

One can expect members of that most despicable profession, having a licensed monopoly to dispute resolution, to exhibit self-centered greed, such as turning federal malpractice claims into a federal court lotto game, or pandering politicians who seek to cement political power through pandering of "vote for me and I will give you the goodies", to enslave us all, but it was THE JUDICIARY that was suppose to protect us all from ourselves and from the over reaches of the Federal Government, and the judiciary has utterly failed to protect Americans from the excesses of the Federal Government, which was their primary role, and as such, the Judiciary's trashing of the constitution and our freedom is the most dastardly of all public services.

The politcal panderers, learn the lesson very well indeed.

Catch some wild pigs, its a snap!!!

http://www.crossroad.to/Victory/stories/wild-pigs.htm

Texas Sandman's picture

Trader Dan versus Santa

I've followed Santa for many years... perhaps going on a decade now.  Santa is very much a "big picture" guy glued to fundamentals.  Trader Dan is very much a "little picture" guy focused on technicals.  They are BOTH worth listening to, as long as you put each in perspective.

Santa called the bull in PMs right before it happened.  I personally was there for that around 2000 before there even was a jsmineset.  I can't even remember where on the web I ran into him.  But Santa was known widely as a precious metals expert in Barrons back to the 1980s.  Trader Dan I take with a big grain of salt.  If you listen carefully to his calls he seldom gives away much beyond support & resistance levels that are so obvious to anybody who knows how to look at a chart, he's seldom worth listening to.  I think his latest nostrum is something like: "$30 round number resistance is the big test for silver, and its latest action is constructive (it's stopped going down)".  To which I respond, "Geee, thanks alot.  I could have gotten this at the local bowling alley.  But thanks anyway!". He goes on to give a higher test as $32, but I think that one's incorrect, as the upper test comes from the upper border of a falling wedge, which I currently consider to be around $31.30 and falling by the day (see my chart on page #9).   Santa's pronouncement of $3500 gold is somewhat more valuable in that I trust that call implicitly.  But there's no time given for it.  A whole bunch of folks will get real irate & send him hate mail if/when we penetrate $1500.  But again, I think that's taking Santa the wrong way.

If you're a stacker, I'd listen to Santa & take him very seriously.  If you're any sort of a serious trader, trader dan isn't worth your time. 

For myself, I was thinking this weekend about taking out a position in USLV in my 401K and grabbing a May SLV contract both of which to just hold.  But I decided against both notions.  First, after the sort of bash silver has taken there's likely to be required a period of repair, possibly going on for weeks where we either base quietly, or attempt a rally & then come crashing back down either to levels we've tested previously or even crashing through to the lower trend channel around $27.  I expect that during that time my MACD longer term model will have time to get itself in a positive configuration and I can then enter more confidently, and likely with little lost opportunity. Risk reward in sticking my neck out for a longer term long, just ain't favorable right now, in summary.

"Markets form their tops with violence.  They form their bottoms under quiet conditions."

And that's more than you'll get from Trader Dan!

That's my take on it.

Jasper's picture

@ Jazz Talker

Well its about bloody time Mr. King.  A bit anticlimactic after all the hype.  Now its yesterdays news.  Like, "ive got this great interview, but you don't get to hear it for a long time."  

well well well, ive got a secret too!

GoldMania3000's picture

jasper

i think it does it so he gets more HITS. and then he can go to his advistisers and say look at all these hits

Texas Sandman's picture

One more thing

Looking back over my chart of the prior page, there is a subtle bullish divergence maybe forming here versus the Jan low.  To confirm that, the macd would need to at least turn up right here.  Those are very powerful plays when they do form.  That would be a big hint.

All that volume & they couldn't push it through the bottom of this falling wedge...

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