Saturday Stuff

Just a quick wrap up of some assorted stuff as we prepare for what will be an eventful week ahead.

First of all, the big news from late yesterday...Moody's downgraded Her Majesty's debt. Though this is once again a fundamentally gold-positive event, I wouldn't expect an immediate jump in price because of it. Remember that in the fiat world, Pound weakness inversely means Pig strength. http://www.telegraph.co.uk/finance/economics/9889485/Downgrade-to-pile-pressure-on-pound.html

In the absence of a podcast here at TFMR, please take the time to listen through all three segments of Andy's visit with Eric King yesterday (once they're finally posted). When we spoke yesterday, Andy told me not to expect anything too earth-shattering but I'm confident that it's worth your time, nonetheless. He and I plan hope to record something either Monday or Tuesday so look for that early next week. In the meantime, here are the KWN links:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/22_Maguire_-_Stunning_225_Tons_of_Physical_Gold_Bought_By_CBs.html

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/22_Whistleblower_-_Gold_%26_Silver_Smash_Orchestrated_By_The_BIS.html

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/23_Maguire_-_Stunning_%2424_Premiums_For_Gold_In_Shanghai.html

If you haven't already, you're going to be reading a lot this weekend about yesterday's Commitment of Traders report. As you know, I like to review it right when it comes out and then post a sort of "instant analysis". Here's a c&p of my thoughts from yesterday, in case you missed them:

GOLD: For the week, price fell about $45. While this was taking place, the LargeSpecs added 1900 longs and a jaw-dropping 25,000 shorts! The LS net long ratio falls to an very bullish 2.12:1. The SmallSpecs got in on the act, too. They dumped 400 longs and added nearly 5,000 new shorts. This is an extremely bullish, contrary signal.
But the real action was by The Cartel. They added 4,300 new longs and covered an incredible 24,200 shorts. Again, who was buying while the specs were busy shorting? And who do you think will, ultimately, profit??
The Cartel net short ratio now stands at an extremely bullish 1.83:1.

SILVER: Almost identical to gold. Simply astounding, amazing and incredible.
For the reporting week, the price of silver fell about $1.60. Look what was happening internally:
The LargeSpecs dumped 1,150 longs and added 4,450 shorts. After reaching an unheard of extreme of 6.5:1 just two week ago, the LSpec net long ratio is all the way back to a mildly bullish 3.1:1
The SmallSpecs added 500 longs and 3700 shorts. Again, as in gold, the specs are racing to get short.
The "commercials"...pretty much all big firms except JPM and their con-conspirators...added another 2,026 longs, bringing their total gross long position to a never-before-seen 54,208. Simply incredible! They've continued to add longs all the way down. What do they know? What are they expecting??
The Silver Cartel...namely JPM and their two or three pals...were finally able to cover 6,800 of their disgustingly large short position. It's still disturbingly high at 92,164 but the total commercial net short ratio, which last peaked in September of last year at 2.6:1 has now declined to a quite bullish 1.7:1 Nearly every drop in The Cartel net short ratio to near 1.5:1 has preceded a substantial rally. We are very close!
All in all, both CoTs are extraordinarily bullish and indicative of a bottom very soon. Hang in there, now. Your patience will soon be rewarded!

Now, let me just add a couple of things:

  1. Getting the Gold Cartel net short ratio all the way down to 1.83:1 is a very good sign. For perspective, at the lows of late December 2011 and summer 2012, the Cartel net short ratios were 1.98:1 and 2.01:1, respectively. And this week's data was surveyed on Tuesday, before the big drop on Wednesday. All in all, the gold CoT is very bullish.
  2. Please also consider the net short ratio of The Silver Cartel. After the last four price washouts, here are your net short ratios at the bottom: On 8/14/12 it was 1.49:1. On 12/27/11 it was 1.34:1. On 10/4/11 it was 1.48:1 and on 6/28/11 it was 1.79:1. As of last Tuesday, it had fallen 1.7:1.
  3. And, finally, this theory....note the emphasis on theory. Regular readers know how perplexed I am by the silver OI situation. The primary outlier is the Commercial Long position. It "should be" somewhere near 30,000-35,000 contracts by this point in the price cycle. Instead, it grew again last week to 54,208. Chew on this: What if the 20,000 contract difference is, in fact, JPM trying to square away their naked short position that Uncle Ted estimates to be around 30,000. Now, stick with me on this... They tried to lessen it by covering back in April 2011 and the result was a near-cataclysmic event for them that was only rectified by the Sunday Night Massacre and the collusive CME margin hikes. Since then, they've maintained their position as The Big Short but, beginning late last summer, they began to build an equally-large long position. Again, stay with me here... They've added shorts through the fall to keep a lid on prices until they're ready to let it go, either voluntarily or involuntarily. If this is the case...and that's a very big IF...JPM could be approaching the point where they would be short 25,000-30,000 contracts AND long 25,000-30,000 contracts. At that point, if forced to exit the shorts, they'd be fully hedged and even profiting on the UPside.

Anyway, just chew on the 3rd point over the weekend. The more I think about it, the more it explains the "commercial long anomaly" and it provides JPM an exit strategy should the toothless CFTC ever choose to call them out.

Here are your updated charts. Given the CoT structure, I feel very comfortable declaring that a bottom is near. (And obviously hope that, by doing so, my Google ad revenue will increase.)

And just a couple of other items that have found their way into my inbox. First, this interview from last fall that details the whys and hows of gold manipulation:

This fun article discusses the effects of the gold repatriation movement: https://wealthcycles.com/features/15-ton-gold-repatriation-hits-jp-morgan-london-vaults

If you haven't read up on this subject yet, I strongly urge you to do so. Just like the German gold repatriation, we may look back on these events and recall them as clear warning signs of imminent events: http://www.sovereignman.com/important-information/red-alert-worlds-biggest-gold-storage-company-dumps-us-citizens-10958/

And our friends at Gold Bullion International do some excellent analytical work. Their latest was posted to ZH and you should definitely take the time to read it: http://www.zerohedge.com/news/2013-02-22/gold-and-potential-dollar-endgame-part-3-backwardation-and-gold

Speaking of GBI, for now they are still the only bullion and storage affiliation that this site has. Many of you have purchased from them and I am very grateful for their support. If you are buying coins and bullion, please be sure to check them out. You can link to them trough the ad on the right side of the page. I'll soon be adding affiliations with GoldMoney, SilverDoctors, Provident and JMBullion, too, so please be sure to always consider them when looking the BTFD. (Which I would strongly encourage you to consider doing this weekend.)

OK, I think I'll stop there. I hope that you have a safe and relaxing weekend. You certainly deserve some serenity after the madness of the past two weeks. But keep the faith as this, too, shall pass. The metals have simply been forced back to the bottom of their 18-month price ranges and will soon begin to rebound as physical demand and the glaringly obvious fundamentals begin to take over.

TF

p.s. You've got to check this out. The trollololo song is going mainstream!! I sure hope that the dead Russian guy's estate is getting a little skin out of it...(Thanks to my pal, DocD, for passing it along!)

300 Comments

Ned Nederlander's picture

Getting My Peeping Tom on...

I have been lurking daily for months now and finally pulled the trigger on registering.  Thanks to TF for all the dedication

along with the priceless comments and links provided by the community!!!  Just got an order from Provident and eagerly awaiting delivery.  Hopefully it won't take a month like last time.  Bastards!!!  I live in CA so a LCS charges the old 7.75% tax.  So that is not a viable option.  Anybody know a quicker online site to order from?  JM Bullion took around the same time.  Plus, all they have are Buffaloes.  I am truly sick of that design.

Kcap's picture

@Happynow

Explain the US/Royal Canadian Mint shortages?  (I don't buy a seasonal shortage or a blank misappropriation)

Kcap

HappyNow's picture

What shortage?    I could

What shortage?    I could always buy an ASE or a Maple.  At the usual premium.  It is true that some shops ran out of ASE's yet it didn't take long to find someone in stock and happy to sell (at the usual premium not at scarcity pricing).

You see again how looking at this 'shortage' proves there is no shortage of silver material.   The mint stopped shipping and yet:  a)  I could still buy them and b) the price didn't go up and c) the mint is shipping them again.

Bugzy's picture

happy now

Grinds my gears:

You make a statement of fact which, when challenged; suddenly becomes an opinion!

Seems to happen a lot these days

Karankawa's picture

Silver shortage?

It's only a matter of time.

Chris Duane is doing his part to get 'real money' into the hands of 'real people'.

http://dont-tread-on.me/?p=28155

HappyNow's picture

Bugzy.  What?   It's a

Bugzy.  What?   It's a fact.    There is enough silver to go around.

Please go and find out how much silver Sprott has taken off the market by adding to his funds since 2010.  Find both the date and the quantity and post it here.   Then we can all use the same facts and it will pretty quickly be obvious to anyone who wants to apply critical thinking that there is not a global scarcity of silver.

Kcap's picture

@happy

They are both rationing all new orders and the USM shut down twice within a month due to overwhelming demand...under which, they had no supply...otherwise, if they had, they would not have shutdown production...hence, the "shortage".  Not sure what isn't getting across to you, perhaps you just don't know the answer.  And that is fine, but I don't think you can prove there is no shortage.  If anything, the pendulum is slightly leaning to the shortage side of the things.

And yes happynow, anyone can buy a maple.  Even a ton of silver.  But one MT is NOTHING when it comes to silver...$900,000 USD.

10 MT's...nothing.  9 million USD

100 MT's...starting to be something....90 million USD

Get it yet?

Put in a couple billion dollar order...and guess what? 

I don't even have to say what'll happen.

Kcap

ps. This is a shortage.

Karankawa's picture

John Stossel: Liberty Conference with guest interviews

While I have certainly been a witness to the Dumbing Down of America over the last 4 decades, I think something very exciting is happening.

I just finished watching the interviews done at the Liberty Converence in D.C.

These kids get it, they are energized, and they understand that individual freedom is what America is all about.

Note the NWO collectivist that came to debate them.  This, along with this Board TURD ;), answers a hope I had years ago that when this thing crashes, people would be educated enough as to who caused it.  I thank everyone that is standing up in their own way to defeat the collective mindset.

http://www.dailypaul.com/275808/john-stossel-justin-amash-interview

HappyNow's picture

Kcap that's just it.  Nobody

Kcap that's just it.  Nobody is putting in a billion dollar order that hasn't put one in before.   Nobody wants that much silver.

There isn't that much demand.

Sure if someone wanted to make a new planet out of silver then there wouldn't be enough to to around and there would be a shortage. But nobody needs that much silver.

As for the mint.   Let's think this through.  What if the same production line makes ASE's and proof coins?   If you were the mint, would you short the proof coin market which has huge profit for the almost commodity trade of the plain eagle?   I know I would not.

OK  I am heading for bed for the night.   I've said what I need to say.   If nobody has the info on Sprott's purchases for the fund I'm done....will check back in the morning.

Fred Hayek's picture

@jezfry There's at least one way they could safely pass off

Isn't there at least one way that TPTB and their media sock puppets could pass off a PM rise as not having to do with the U.S.?  If various european nations are collapsing, couldn't they pass off gold and silver shooting upward in price as being the result of panic buying in europe?

Lurker's picture

Happy Now no silver shortage?

I wish that I could refute what Happy Now is saying.  Truth is, he is correct.  The availability of as much physical silver as anyone wants to buy, at a consistent (not rising) premium seems to indicate no shortage.  What facts refute this?  I listen to Sprott, and his evidence is based on presumed flows of metals to the east.  All of his conclusions are based on assumptions, not on hard evidence of any shortage.  There has never been a failure to deliver physical metal when it has been demanded.  I really want the Sprotts of the world to be correct, but so far, I'm not seeing it.  Now, obviously Sprott is much closer to the inner workings of the whole system than I am, and I consider him to be an honest person, albeit with an axe to grind.  As another indicator of no shortage, the silver miners seem very happy to produce metal at the current prices.  For the most part, they are not losing money at today's prices.  So, from a supply standpoint, the only things that could create an upward pressure on prices would be either increasing fuel cost or declining ore grade.  While both of these may be happening, they are happening gradually.  Therefore, the only thing that will cause a cataclysmic rise in silver prices would be a spike up in demand.  I don't see that happening anytime soon either.  Somebody please point out a flaw in my reasoning.  BTW, Just because your LCS is out of this coin or that coin, that does not indicate a systemic shortage of metal.  

Karankawa's picture

There may not be a shortage, today.

In my opinion, it's much more about defending fiat than anything else.  It's about CONTROL and nothing more.

If people mentally place a value on real money and trade outside of their system of control, it will ruin decades of effort to create more centralization and control.

Centralized Government can't exist when people are independent.

Bugzy's picture

Happy now

No, you just suspect there is. It is in the powers that be to ensure it appears that way. Even though the cupboard may be nearly bare.

Imagine, if you will, a chocolate vending machine. Every time you pull the lever a bar comes out. So you believe that there is no shortage of bars. Sprott have taken a shed load of chocolate already.

Yet you have no idea if there is 1 bar or 5000 bars left in the machine. We heavily suspect that the reserves are decreasing rapidly.

It will happen all at once. Someone will pull that lever and no bar will come out. Then the frenzy starts.

Green Lantern's picture

Puck/El Gordo, It's not about

Puck/El Gordo, It's not about being a dumb ass, it's not about having to be experienced enough to trade with Andrew Maguire.  People didn't get wealthy just on stacking in the last bull gold market.   And I've told the story that few people realize how fast people were pulling out of the dollar.  Fed had emergency meetings to stop the run on the dollar.   That run on the dollar that made gold go up was a geopolitical faux pas by Jimmy Carter that went viral by holders of the dollar.   Obviously, a large group of people at the time saw it coming and they put bets down on the table.   They played everything from basic call options (YOU DON"T HAVE TO BE AN EXPERIENCED TRADER).   All they had to do was say, I believe gold will go to a thousand buy such and such a date.    You don't do shit but pick up the phone and call a broker.   If you played Turd's contest and put an educated guess in, that's the game.   It's not complex.  you just have to know it exists.

Your basic junior mine went up anywhere from 500 to 1000%.   There has been no dirth of posts on this forum with Rick Rule talking about this cycle and what's there, what's available, how the money will be made.   Rick and siimilar are in  their fourth bull/bear cycle and they are aiming to ride one more.    Actually, he recently said that this wasn't the toughest one.

The markets have always been manipulated.   It was written about everyday in the 1920's in the Wall Street Journal.  EVERY freakin' day in the editorials.   Books larger than the encyclopedia Britannica have been written on the subject.  Men have testified infront of congress on it.  It's not new.  What's new is that people are waking up to what has always been.   We are finally looking at the dynamic of it.   Just two years ago on this blog, we argued about it everyay.  Look how fast the awareness has changed.  Despite manipulation, people have made money.  Always and forever.   TA that Turd uses is invented for one reason by Mr. Dow, to create a way you could play the markets under the conditions of  manipulation.  Men have been doing it for ages.   Hasn't turd said that like 800 times? .  My TA works because the markets are manipulated.

However, the manipulation has changed in complexity.  And that was my point.  In a bull market, you should be able to make money easily by any leveraged asset whether it be basic options that you take off your supermarket shelve, miners.   You wouldn't have to join Andrew Maguire's very complex system.  

So again, I understand your wish to buy more.   I simply said my wish differs.  I want it to go up.    Let gold and silver blow to the upside and I'll more than double my stack not by working my knuckles to the bone but using other types of leveraged investments.    I ain't that smart either.  Andrew Maguire is well beyond what I am capable of doing.  But there are investments for us knuckleheads and experts to help you.    It's only a matter of asking for information.

It's about putting your money into something with the intention that it is going to rise in value just as it did in the 70's gold bull market.   I can't think of any basic investment philosophy that says, I want to put my money into something but I want it to stay low so I can go to work for the man, and buy 5 more units of something and then I want it.   Yeah, I get it.    I think every person that says that really means to say, I wish I started stacking  A Long time ago.   Yeah, me too!     But in the absence of that, the next best thing is a bull market where everything goes ape shit and even Soccer mom's are calling up their broker for the next move.   I'm not wishing it stays low.   Because I plan to buy gold at $2000.00, and watch it become worth $4000.00

jezfry's picture

@ Fred Hayek - One way to pass off PM's rising

I guess panic buying in Europe could be the reason/cover for PM's rising. However it would almost certainly cause a rush into the dollar with a commensurate rise in it's value - and we know what that does to PM prices...

Karankawa's picture

Silve has been 'plentiful' for the last decade or so,

so has fiat.

Why has the fiat value changed so much?

http://fx.sauder.ubc.ca/cgi/fxplot?b=XAG&c=USD&c=CAD&c=EUR&c=GBP&c=JPY&rd=*&fd=1&fm=1&fy=2001&ld=31&lm=12&ly=2013&y=monthly&q=volume&f=png&a=lin&m=0&x=

The question should be not 'availability' as to how much 'availability' would we have had over the last decade if the 'price' was still $6 US?

NOTE  (This service only does Monthly averages on charts of over two years.)

Fred Hayek's picture

@GL . . this manipulation is different

I'll admit up front that I didn't follow any market much until the last 6 or so years.  But the news and market movements used to be consistent.  If you were driving to work in the early 90's and heard over the radio some news that was bad for the economy, the stock market went down.  Period.  Full Stop. 

Now, they could announce that an asteroid bigger than the one that took out the dinosaurs has just been sighted entering our solar system and will hit us on Tuesday, wiping out 90% of life on earth . . . and the Dow would go up 50 points. 

Yes, there was always manipulation.  But not as frequent as this, or as egregious as this.  Has there been an actual bit of economic news that was legitimately bearish for PM's in the last 4 months?  You can just about say no.  And there have been scores of significant stories, from new QE to european nations' economies falling apart to terrible U.S. pmi reports etc and yet the PM's go down on this bullish short term news while still having outstanding long term fundamentals.  This is nearly impossible absent gross manipulation of the market.

Puck T. Smith's picture

@GL, If I read your post

@GL, If I read your post right you seem to be talking about trading options.  I just went to Investopedia and read their section on options.

http://www.investopedia.com/university/options/default.asp#axzz2Lt003KZH

It confused me greatly.  It appears to be an easy way to lose money.  Maybe I'm just being thick and my bias against trading is keeping me blind.  The simple fact of the matter is I have no idea where the price of anything is going to be a month from now.  Maybe I just need someone to explain it a way that a simple geek can understand.  I'm not saying you are wrong, I'm just saying I don't understand it.

Karankawa's picture

Is this chart confusing?

http://fx.sauder.ubc.ca/cgi/fxplot?b=XAG&c=USD&c=CAD&c=EUR&c=GBP&c=JPY&rd=*&fd=1&fm=1&fy=2001&ld=31&lm=12&ly=2013&y=monthly&q=volume&f=png&a=lin&m=0&x=

While I posted it above (Mispelling Siver by leaving out the 'r') it shows that ALL currencies have depeciated MASSIVELY to silver over the last decade or so.

A 'bag' of silver could be had for $3500 bucks in 2001, now it's around 20 grand.

But that is not the point.  The reason to convert fiat to silver today is much more obvious than it was in 2001.  Back then everything was just starting to roll over and it could have been fixed.

Tell me what has been FIXED other than More Manipulation?

The reason to escape the fiat system was obvious to me 20 years ago.  And it's more obvious today.

A bubble in reality here?  Hardly.  Hard assets are a better risk today than they were 10 years ago because NOTHING has been done to fix anything.

Just my 2 pre 1982 cents.

Karankawa

ClinkinKY's picture

Apparently TFMR has attracted more attention...

...than originally thought:)

I posted this video under the title: "Law Student Schools Cop On Gun Laws". It was subsequently "blocked" by youtube or whomever. Found it again here:) http://www.infowars.com/law-student-takes-cop-to-school-after-being-illegally-stopped-for-carrying-gun/ What's the problem with youtube or whomever was responsible for blocking?:)

ClinkinKY's picture

Sorry, but we're at the threshold....

...and not just for PMs

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

Leaked Memo Show Soros-Funded Leftist Group Advising Hiring Private Investigators To Go After Republicans, “Eviscerate” Conservative Government…

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

Dem Sen. Patrick Leahy Says Time To Embrace Communist Cuba After Meeting With Raul Castro…

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

Obama’s “Non-Partisan” OFA Helping SEIU Astroturf New York Anti-Gun Rally…

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

Many more examples but chew on these for awhile:)

Karankawa's picture

Sorry, but we're at the threshold....

Sorry Clink, but I think THEY are at the threshold and are being desperate.

Tell me, How Many Times have you been to Cuba or China.

How many Muslims do you know personally?

How much do you respect the Golden Rule that seems to be the foundation of most religions, and seems to be ignored by the major ones today?

Do you understand that my neighbors couldn't even bear to Listen to any talk about 911 5 years ago, and now they ask me what is going on?

You tell me who is in trouble.

Karankawa

PS.  I would say its the LIARS

SteveW's picture

Sprott's 2010 silver purchase

Sprott's initial offering for the silver trust in October 2010 was for $450 million. The silver was purchased in November and the last of the bars were received in January 2011. Many of the bars were refined after the order was placed which was part of Eric's justification for a tight supply.

ClinkinKY's picture

@ Karankawa

Please quit IMing me.

I'm sure you mean well but it's getting very tiresome.

That is all.

Karankawa's picture

Clink, I have 'NEVER' Im'd you

I did send you a PM concerning this link.

http://www.youtube.com/watch?feature=player_embedded&v=jfdEbe7e9GE

I am not ashamed in any way if what I sent you.  While it was sent in confidence, I'm willing to post it to the board.  ;)

Your turn to stand for truth my friend.

Karankawa

ClinkinKY's picture

I've asked you nicely...

...now STOP.

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

Clink, I have 'NEVER' Im'd you

I did send you a PM concerning this link.

http://www.youtube.com/watch?feature=player_embedded&v=jfdEbe7e9GE

I am not ashamed in any way if what I sent you.  While it was sent in confidence, I'm willing to post it to the board.  ;)

Your turn to stand for truth my friend.

Karankawa

Chibster's picture

Silver supply? So what...

Silver is what people are willing to pay for it.  

Carbon is the most abundant element yet fools go in top dollar for diamonds like they do for cheesy vinyl Louis Viton purses, & fad brand labels...

With the fiat currency failing, soon the masses will learn again that silver is real Constitutional money.  They will go through a mania phase.  I foresee another baseball bat Beany Baby craze coming... regardless of how many 'beanies' are produced..

Silver shortage or not, it will happen.

Karankawa's picture

For the record ... I don't want to let Clink paint me as

me as a stalker.

Clink, you are one of the first people that ever PM'd me on this board.

And I haven't deleted any of them.

I'm willing to post them all.

Karankawa

I just sent this to Clink, and I will post EVERY conversation we have had!

Karankawa's picture

Can anybody tell me why this is a Hate Message about Liberty?

NOBODY owns it, and it has been here forever.  Thank you for posting a link to this.  But you aren't the first, and while you aren't, it doesn't matter.  Just don't try to own it.

http://www.dailypaul.com/241453/video-legal-open-carry-man-cites-law-cop...

Don't think TFMR OR dailypaul posting it had anything to do with it's significance.

The significance was when the people stood up on a personal level.

Please don't see this as hate mail.  And keep on posting things you find that respect Liberty!

Just don't try to own it.  I sours the whole message.  I don't want to be part of Any gang but I will respect you right to be who you are, and your rights to not be agressed upon.  By anybody.

Karankawa

delacroix's picture

when silver went below $10

when silver went below $10 per oz. I ordered some 100 0z bars from northwest territorial mint. It took almost 3 months to get them. it was probably still in the ground when I placed my order.

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