Still Pounding Away

151
Mon, Jun 11, 2012 - 10:48am

In moves that are increasingly disconnected from physical reality, paper metal is under siege again today. Whatever.

You see, here's the deal. Quite literally tonnes of precious metal are leaving London and heading east to China, Russia, India, Turkey, Iran, Saudi...you name it, they're buying and taking delivery. This is metal that won't be coming back! The foolish bullion banks think that they are just playing another round of fun and games with paper metal, leasing and hypothecation. They're not! This time it's for real and they don't seem to get it.

Think of it this way. I am a car dealer with a fleet of vehicles that I own. I lease these vehicles to borrowers who use the vehicles in their business. These borrowers routinely return the vehicles to me, only to release the same or other vehicle out of my inventory at a later time. I, the dealer, continue to recycle leases from one customer to another, moving cars from here to there based upon demand. As long as the cars are returned to me safe and sound, I can continue to run this program.

What happens, then, when a few of my customers take the cars I have leased them and sell them instead of returning them? My customer takes the cash and then, when I expect my car back, there is no car to return. It's been sold to someone else? But wait a minute. That was my car! I want it back. Too bad, says the new owner, I sold it, too. The next owner also sold it and so on and so on. Eventually, the final owner took the car, broke it completely down, refabricated the parts, reforged the body and, eventually built a completely different car. My original cars are gone and they're not coming back! My entire business model collapses and I go broke.

This is where we are now in London and New York. Gold and silver have been leased for decades. This dangerous game has been perpetuated by the ability to rehypothecate, the ability to "raid" the big ETFs and the ability to "manage" the paper markets. The Bullion Banks foolishly and naively believe that nothing has changed. They hope and expect that the precious metal currently being withdrawn from their vaults will return one day soon. Not gonna happen. This time it's for real. The metal, once withdrawn from "the system" isn't coming back. It's gone. For good.

It hardly matters why. Perhaps the "eastern" central banks are switching from dollars to gold for simple protection from dollar debasement. Maybe China in planning to start their own metals exchange to rival London in the 21st century. As mentioned here repeatedly, maybe all the countries listed above are planning a new gold-based, international trade settlement system. Again, it hardly matters. What does matter is that the gold isn't coming back. Ever. And just like the car dealer whose business model collapsed when he no longer owned any cars, the "western" central banks and the bullion banks are about to have a very rude awakening.

In the meantime, as mentioned above, paper price is being melted down yet again today. Though we have clearly bottomed in price for both gold and silver, last week's action certainly put a damper on any immediate bounceback. By driving price back under $29 and $1600, the Cartels were able to dissuade any additional spec buying and momentum has been halted. I'd expect this to continue for a while this week as both charts appear rangebound.

The only other interesting thing to discuss this morning is the latest CoT and Bank Participation Report. Within those reports, Uncle Ted found something rather telling. He now estimates JPMs net short position to be around 16,000 contracts. However, from the CoT, we know that the entire commercial net short position is 16,525. This tells us that JPM alone accounts for the entire net short position in silver. Remove them and the silver market is "balanced"...equal numbers of banks and specs, long and short. Instead, we have one bank with an extraordinarily large and concentrated short position. This is the essence of manipulation. One market participant with a huge, one-sided position. The only solution is to convince or force JPM to exit the silver market. Lord willing, one day soon, this is exactly what will happen. Until then, stay patient and keep stacking.

Have a great day.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  151 Comments

Steinbacken
Jun 11, 2012 - 10:53am

Secund!

A new record! Still trying for Furst!

achmachat
Jun 11, 2012 - 10:53am

so true

of course... when the metal has left for the orient... it's gone.

how much did you stack while you still could?

Hammer
Jun 11, 2012 - 10:53am

Couldn't do it and even

Couldn't do it and even waited to not be.

edit. dammit..........

second edit. Excellent post ​ Turd

stalking wolf
Jun 11, 2012 - 10:54am

FIRST! HAHA

YES! Finally

Patrancus
Jun 11, 2012 - 10:54am

Thurd

Thurd

stalking wolf
Jun 11, 2012 - 10:54am

SHIT!

DAMN IIITTT!

ReachWest
Jun 11, 2012 - 11:03am

Thanks

Thanks Turd - You are a voice of reason and level-headedness in an insane world.

This shit is really, really starting to get tiring.

Shnozberries
Jun 11, 2012 - 11:05am

With utmost respect...

Turd, as you've stated in the past, you are just a lowly turd living in Flyover, Turdville. If you or I can see the massive outflow of metals heading east and the implications thereafter, don't you think The Bullion Banks or US Government are clued in as well?

Of course I am a lowlier turd than you so I can't propose any guesses as to what their plan is, but with the level of corruption we see daily I think anything is possible.

rtabit
Jun 11, 2012 - 11:06am

SI 20

Fork working good, great touch up there on medium line last night at 29.00. Fork has been working close to 2 weeks, it's been a long time since I've had an upward trending fork work this long on 20 minute chart, good stuff. Looking for entry position on lower parallel around 28.15, stop at 28.00.

https://www.screencast.com/users/RandyTabit/folders/Silver/media/17c8d85e-52d7-41a8-bb1b-bcddec685df3

babaganoush2307
Jun 11, 2012 - 11:08am

Stack for the USA

I really wish more people in America were turds and stacking like never before. Once the SHTF, the only wealth that will remain in the US is going to be the PM's that the turds and other aware people tucked away, and let me tell you, the east is far far far ahead of the west. Don't expect America to be the head honcho to much longer...

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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