Lots of fun and games this morning as the "markets" attempt to anticipate what The Almighty Bernank may mutter later this week in Wyoming. Please try to maintain your sanity.
What a joke this all is. It's the last week of summer for most folks and hardly anyone is watching. The Europeans are on "holiday" and the U.S. is anticipating the 3-day, Labor Day weekend. With no one around, it becomes literal child's play for The Cartels to lead the spec algos around by their collective noses. Throw in some obtuse, end-of-week Bernank remarks and you've got a perfect setup for thin volume volatility.
I see that gold is being hammered lower this morning. Whatever. As if suddenly all of the holders of physical metal are desperate to unload it in exchange for fiat. All we are seeing is spec algo tripping. This shoves price lower and allows The Cartel to cover some of their recently-added shorts at a profit. How many new shorts were created last week and early this week in their vain attempt to contain gold below $1680? Well, if you can now cover those shorts at or below 1660 you make a tidy little profit for your desk AND replenish your ammo for defending 1680 the next time price surges back up there. It's just a game and one that you should be using to your advantage. Buy all dips. Period. End of story.
Silver, too, has lost the momentum and desire needed to jam toward new highs. Whatever. No worries. After a 10%+ run-up in under two weeks, a little pause is good. PLEASE use any and all dips to add to your stack. If trading, I'd be looking to use any dip toward 30.25 as a possible entry point.
Moving on...I spoke last evening with Rahul at Altinvestors. He asked me beforehand if I'd like to create the same stir that Bill Murphy did last week. I told him that I had no interest in being quite that provocative. Nonetheless, I think you'll enjoy the discussion. As an aside, Rahul entitled this "Turd Ferguson - Silver Smackdown Ahead". That's not really what this is about nor is it quite accurate. Early in the interview, I mention that The Bernank will likely "disappoint" on Friday and, given the current makeup of the CoT, a raid of some sort is likely. I firmly believe that robust physical demand will blunt any concerted effort to drive prices back down and into their summer-long ranges. As mentioned above, any and all dips should be bought, not sold. Massive changes and rallies are coming and you do not want to be caught flat-footed.
Please pay particular attention to the discussion of the "gold standard". All of the political talk in the U.S. centers around whether or not this is an option and whether or not it is even feasible. What no one ever mentions is that it is inevitable. It is NOT an option. Sometime soon, in the next 1-5 years, the Chinese acting alone or in consortium, will offer a new unit of global trade settlement. This new unit will be at least partially gold/precious metal backed. As this unit will rapidly become the preferred unit for settling trade, demand for dollars will drop precipitously. The U.S. will be left with no other choice but to devalue the dollar by linking it to a price of gold that is multiples higher than current levels.
For laughs, here is a link to a Douchebag Nadler commentary from yesterday where he discusses some of this. Thanks to "tabberto" for bringing it to my attention. Pay special attention to this little nugget: "Professor Mehmet Dicle (Loyola University New Orleans) notes that a) there is little evidence that gold prices have provided protection against inflation in the 1999-2007 period and that b) gold’s reputation as a stock market hedge is largely undeserved." I would strongly suggest that if you are currently paying tuition for yourself or your child to attend Loyola University of New Orleans, you should withdraw immediately as it is quite clear that the place is populated with complete idiots. "Little evidence that gold protected against inflation from 1999-2007" while gold was rising 15-20% per year? Simply amazing. https://www.kitco.com/ind/Nadler/20120827.html
And here's a MarketWatch gold standard story that, to its credit, at least isn't the same 100% BS Keynesian tripe that every other news outlet seems to be running. https://www.marketwatch.com/story/even-talk-of-a-gold-standard-would-boost-the-price-2012-08-29?pagenumber=2
I've received several emails from folks concerned about Jim Quinn as he has abruptly stopped writing his blog at https://www.theburningplatform.com/. I was concerned, too, so I fired off an email and here is his response. The dude is tired and I certainly understand where he's coming from.
Thanks for asking. I’m just burnt out from trying to run a blog 24/7, keep people entertained, and work my real job and raise my family. I think it is starting to affect my health, so I’m just going to step back from posting stuff daily. I hope my energy comes back and I can go back to writing an article once in a while.
I think my daily rage would put me in the grave sooner than I’d like.
Lastly, it appears that things are about to get seriously crazy in the MENA. If debka is correct on this, (and keep in mind that they've been very accurate lately, often leading the MSM by 24-48 hours), Russia is bugging out and advance of increasing "hostilities". NATO war on Syria comes with an explicit Iranian guarantee of Syrian military support. I would expect any NATO action to quickly lead to full, regional conflagration. Got UCO? https://www.debka.com/article/22314/Is-Russia-disengaging-from-Syria-Arms-shipments-stopped-warships-exit-Tartus
And, as a side note, what the hell is this? Two tons of uranium in Bolivia? https://latino.foxnews.com/latino/news/2012/08/28/bolivian-police-seize-2-tons-uranium/
OK, that's it. As I go to publish I see that The Evil Ones have tried to raid price a bit while I've been typing but they've been repelled. Gold hit 1655 but has since rebounded and silver bounced again off of 30.60. Hopefully, that concludes their efforts for today. We'll see.