Today is Wednesday

694
Wed, Apr 17, 2013 - 11:22am

Which means that tomorrow is Thursday. Well, that's exciting!

So here we are. The metals aren't sharply rebounding but at least they're not still falling. Intelligent people around the globe are rushing to gobble up as much gold at "sale prices" as possible. Here's a good summary link from ZH: https://www.zerohedge.com/news/2013-04-17/gold-buying-frenzy-continues-china-japan-and-australia-scramble-physical And of course, anecdotal stories about retail shortages persist here in the U.S. Though certainly some dealers are simply refusing to sell at the current price (no doubt at a loss), many report to simply being "sold out".

The U.S. Mint continues to sporadically report its sales data. They haven't updated since last week, so the numbers on their site are suspect. https://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2013 Regardless, as you can see, Silver Eagle sales are trending quite well and look at the Gold ounces! For April month-to-date, 83,500 ounces have already been sold. Compare this to 62,000 for all of March and 80,500 for all of February. Additionally, April of 2012 saw just 20,000 total where April 2011 had 108,000. Clearly we can throw another big, anecdotal log on the fire.

Moving along, as you know ole Harvey keeps track of gold deliveries every day so check this out. Back on First Notice Day, the April gold contract had 6,601 contracts standing for delivery. Since FND, the amount standing for delivery has increased to 11,141. That's an increase of 4,540 contracts or 454,000 ounces! That's a lot. Recall that many of us tied the February takedown to the unusually high (14,000+) number of contracts standing for delivery that month. Is this current beatdown also related to Comex delivery? And one more thing...1,114,100 is 34.65 metric tonnes. OK, hold onto that number for a moment...

Last Thursday, I wrote the post on GLD in which I tried to give you some measure of the scale of the "inventory" reductions. When I typed that post, the GLD allegedly held in "inventory" 1,183.53 metric tonnes of gold. As of last night, the GLD is down to 1,145.92. That's a reduction of...wait for it...37.61 metric tonnes. (Oh, and we're supposed to think that gold sold off because Cyprus is being forced to sell 10 mts.) Now down exactly 204 metric tonnes YTD, the alleged GLD "inventory" has fallen 15.11% since 1/2/13.

But back to just the last 4 days. Another 37.61 metric tonnes is 1,209,189 troy ounces or another 16 pallets.

Here's another link for you. As you know, I got my "start" at ZH a long time ago. One of the guys hanging around back then went by the name "Gordon Gekko", as in the "Wall Street" character. Anyway, he was always a sharp dude and he now has his own blogspot site, too. On there yesterday, he posted a terrific piece echoing many of the same things we consistently advocate here. You should read this: https://www.gekkosblog.com/2013/04/buy-physical-gold-now-discount-of.html

As we look at the mainstream media, here are two items that are completely surprising, considering the sources. First, here's a link from The Telegraph. Can you believe that this actually made it past the editors and into print? https://blogs.telegraph.co.uk/finance/thomaspascoe/100024081/the-gold-price-crash-is-further-evidence-of-market-rigging/ And then last night, while I'm at the gym, The Idiot Cramer is on discussing gold. Since he discussed it using many of the same metrics we use here, maybe I should lighten up on him a bit. Perhaps he's a closet Turdite? Maybe both he and Santelli appreciate the finer qualities of canned bacon?

And you simply must take the time to read both of the articles linked below. Perhaps you're new here and searching for answers after this latest, contrived "event". DO NOT BELIEVE THE MEDIA SPIN. If you truly want answers, they are contained within these two excellent, forensic analyses. Please read and study them both.

https://news.sharpspixley.com/article/ross-norman-gold-crushed-by-400-tonnes-or-usd20-billion-of-selling-on-comex/159239/

https://www.peakprosperity.com/blog/81535/gold-slam-massive-wealth-transfer-our-pockets-banks

The title of the Chris Martenson post sort of follows along a theme I mentioned back on Monday. Consider this. It's not a perfect analogy but it's close:

Much of the outrage of The Financial Crisis of 2008 stemmed from the money lust of the bankers. They created mountains of worthless securities and took on what became systemic risk. And, in doing so, they paid themselves exorbitant amounts of money. When it all came crashing down, they weren't held accountable. Not even financially accountable. The TBTF losses were transferred onto the backs of the citizenry through TARP and other such chicanery. In the end, the banks took on the risks but, when it all inevitably failed, the public took the losses.

Fast forward to this instant. The banks have been managing and manipulating the price of precious metals for decades through fractional reserve bullion banking. This entire system seems to be on the verge of collapse as physical demand is applying incredible pressure to a system that is built upon 100:1 leverage. For example, a major bullion bank, ABN Amro, has recently defaulted, opting to force cash settlement upon depositors rather than supply physical gold. So now the banks, which have been short and naked short paper metal for decades, have once again assumed massive, system-threatening risk...and what are they doing?? They are once again transferring that risk to "private sector". How you ask? Look at the CoT structure. In silver, where we all expect the initial disconnect to occur, the banks are now likely net long while the speculators (private hedge funds, managed money, etc) are now net short. In making this change, which side now has the ultimate risk when price explodes? The banks? Nope. They're long and ready to profit. Once again, the banks win and the public (albeit the wealthy hedge fund and managed money-investing public) loses.

As we wrap this post, let's go back and focus on the title for a moment. Today is Wednesday. Tomorrow is Thursday. At this point, all I ask is that you check this site a few times tomorrow and that you clear your calendar for tomorrow evening. It's going to be a memorable day. To whet your appetite, watch this. It's only about 90 seconds long. https://www.cbc.ca/documentaries/ Buried in the archives here at TFMR, you'll find this post: https://www.tfmetalsreport.com/blog/4084/summer-heats I leave you today with this follow-up: The "he" who has "high hopes" doesn't refer to me and it doesn't refer to Andy, either.

Have a great day!

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  694 Comments

ctob
Apr 17, 2013 - 3:36pm

Yep sandman

Looks like it. And price actually a bit lower than when I ordered on Monday. Premiums raise price lowers. I won't be surprised if we see another leg like some people say (50/50 chance) but if silver goes to $18 the premiums are gonna be nuts.

In fact if I was these real time pricing guys I would code premiums in to some inverse of current difference so they rose automatically as prices declined. I would get rid of all advertising of premium by an absolute number.

champuga
Apr 17, 2013 - 3:38pm

While the sheep are selling

I am furiously trading in my FRNs for metals, especially silver. I can't think of many assets trading over 50% below their all-time highs. Thanks dupes for selling. Noticed Buffalos are trading at $1.99 over spot. Ridiculously large premiums for these things now.

Apr 17, 2013 - 3:42pm
zman
Apr 17, 2013 - 3:42pm

If deflation takes hold, what

If deflation takes hold, what can the Fed even do at this point? Seems like they are basically out of ammo.

1. $85 billion per month buys everything that is being issued, and deflation attracts buyers into T-bonds, so the bond market will be fine, additional QE is not really needed if this happens.

2. There is no political will for governmental stimulus programs, they are cutting, there will not be any new programs, not gonna happen.

3. A weakening Yen and Euro holds up the dollar, I don't see what can be done about this fact.

4. Gold suffers in deflation, and silver even more. Cash might be king for sometime.

ballyale JailBank
Apr 17, 2013 - 3:43pm

@JailBank

Interesting post.

If JPM has managed to go net long and let ML holding the short bag, it would seem to me that JPM would start lending to various miners at 6% to 8% interest, knowing that they are going to manipulate the market upward.

Also, they may make deals with the miners for shares for cash, especially at these BK prices the miners are experiencing.

JPM would make money both ways.

It's a lot of "if", though.

________________________

re: the Ft. Know article. I first thought it was a spoof. The "official" explanations seem rather ridiculous, but who knows. If there really was gold in Ft. Knox, there would be no reason why they wouldn't perform a true audit.

Bally.

ancientmoney TJeffson
Apr 17, 2013 - 3:45pm

@TJeffson re: Ft. Knox . . .

About a year or two ago, there was supposedly some proof that the Treasury had tons and tons of gold-plated tungsten bars made up, as I recall, in early-to-mid 2000's. They may have thought about allowing an "audit" to "prove" that the gold was still there, and so figured best to have some gold around for it.

However, somebody actually drilled into one of those bars that came from Treasury, and lo, it was one of the tungsten bars.

So, they likely took any possible audit off the table again, as they sure wouldn't want anyone questioning and testing those bars.

Groaner
Apr 17, 2013 - 3:46pm

Ebay silver prices are carzy!

I guy is selling a roll of 20 eagles for $997 in various years.. wow! many others are going for $33 a coin in a roll.

It's amazing that people do buy at these prices..

I can't wait for the day to start selling a few here and there.. not today.

SamSchlepps
Apr 17, 2013 - 3:49pm

Ancient Money - Tight Oil - Nirvana not

I 'm sending this to allay your reaction, it might provoke a different one

First, I thought of Gary Dorsch as a bit more on the gold side and pretty good in previous articles I have read - so he may the recipient of slanted information. I say slanted because just like belief in PM manipulation and the MOPE that is provided there is also a like belief in the Peak oil theory and the future decline in availability of oil and MOPE against.


Interestingly, I was at Jim Sinclair in Toronto last week and I asked him about the oil-gold ratio or relationship - he doesn't know and really declined to answer. I think its as important as anything in understanding the rise and fall of fiat, gold, and empires in this current environment. FOFOA goes into this - not an endorser of

To me, Peak Oil is true in that the quantity of oil at a certain price is limited and will decline. There isn't any more $20, $30, $40 oil - its gone. We up in the 80-100 range because that is the marginal cost of oil today and its not likely to go lower unless demand falls away and then will be limited to the marginal cost of production aka cash costs.

As I read the experts:

The Bakken and idea of tight oil (oil in shale) has been known of for 40-50 years, The technology of fracking is also that old. What allowing them to come together and produce oil now is price. It was not economic until we got to these levels over 80-90; so its not a savior in regard to bringing about lower prices.

Its looks like a steady upward slope in production volumes because of high initial production and wells drilled in "best" areas. However, it has a very high decline rate - sometimes up to 70% per year, whereas conventional oil maybe closer to 5%. Think of a straw drilled into the ground vertically and then horizontally, then fracking to loosen up the surrounding area and free the oil. That tube is your reservoir - nothing more, It goes away pretty quick and the recoverable oil is limited. The areas of shale are vast, the good areas smaller, and I would reasonably assume they started with the best(most profitable areas) they could find. But please remember as with all oil what is ultimately recoverable is usually a fraction of what is there.

So to keep production stable with these declining rates and "lesser" areas, you need to drill more, increasing your costs as a producer. Please notice that is just to keep it stable,not growing. In other words, the Shale oil revolution isn't - there is talk that it has hit high levels now and declines are coming not increases.

Some increases in US production are real, but just like the BLS and CPI are subject to a little manipulation. Crude oil production worldwide plateaued in 2005 - they just changed the definition to include some condensates and we're growing again. US production also got higher because it now includes some refinery gains - we got better at cracking the hydrocarbons into more product and because they decide to include the refined product shipped overseas out of the USA. It may come from a bbl of oil imported from overseas, but that just a minor detail - its production isn't it?

Something else I haven't seen quantified (wonder why) is the fact that US consumption is down. It may be efficient new cars but miles driven is also way down.


Emerging countries(China) can afford the oil; USA can't - its all going east and the new nirvana behind oil is just another cover story to hide the reality.

More trivia - Saudi Arabia is to USA as Iran is to what country. Yes you win a hat -- its China and Iran represents about 12% of China imports of oil. USA invading Iran would be like China invading Saudi Arabia - wonder what would happen? Let's go or be led to North Korea instead - tin foil hat working.

They say Saudi Arabia could be an oil importer by 2030. Yes, that's importer - it costs a lot for air conditioning. Wonder where all that excess that used to go to rest of world is coming from?

JML-2012
Apr 17, 2013 - 3:50pm

Groaner - Kapooya!

If you're going to keep posting "Kapooya!" clip, might as well make it the hot remix version +1 for the Obama Phone lady cameo in this one too

Kapooya #Kapooya REMIX - WTFBrahh
koan
Apr 17, 2013 - 3:54pm

With the boston marathon

With the boston marathon tragedy and other local but just as tragic happenings of late sure put things into perspective. Which is why I cannot bring myself to stress about the price of 'stuff'. If you've had the pleasure of spending even a minute of this day with your family/friends then appreciate just how blessed you've been.

Saying that, what an opportunity!!! If the metals drop significantly further I'm selling a kidney to boost the stack, maybe even consider selling my kids - got a third one on the way that could be negotiable: 'mint condition/unwrapped' premium and all that!?

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