FOMC Wednesday

140
Wed, May 1, 2013 - 2:33pm

Today's FOMC Fedlines are a non-event. So now we turn to tomorrow.

Thursday brings some news from the ECB. Won't that be fun? Perhaps a reason for the paper jockeys to jam prices lower again? More likely, prices rebound tomorrow as today's shorts are squeezed back out. Then we do this same dance over again on Friday. We'll see.

For now, here's the FOMC statement from the ZH scribd page:

April Redline

Moving on, my thoughts on the day were summarized in this comment to the previous thread. Rather than re-type, how about a simple C&P:

"All you need to know is this: Nearly every important Eastern and Asian buyers market was closed today for May Day. Just like we've seen in the past, absent physical purchasers, the Spec HFTs and Cartel monkeys play freely to kill paper price. Today is no different.

The only real stories today are these:

https://www.zerohedge.com/news/2013-05-01/arizona-becomes-2nd-state-make-gold-silver-legal-tender

https://www.zerohedge.com/news/2013-05-01/crude-inventories-surge-record-high-energy-demand-collapses

https://www.zerohedge.com/news/2013-05-01/manufacturing-ism-drops-lowest-december-employment-drop-biggest-2008

https://www.ft.com/cms/s/0/f7d2e844-b253-11e2-8540-00144feabdc0.html#axzz2S3ls6nkg

https://www.bloomberg.com/news/2013-05-01/crude-falls-for-second-day-on-signs-of-economic-slowdown.html

https://www.usnews.com/news/articles/2013/05/01/weak-adp-estimate-raises-concerns-about-jobs-report

My enthusiasm for typing a new thread is low because I simply don't care what these baboons are doing to paper price. I don't. Gold (and silver) is being sold off because the global economic weakness is prompting paper traders to sell all commodities. And gold is a commodity? Not to me!! And screw the FOMC minutes. Nothing but worthless SPIN and MOPE. We all know by now that QE can't and won't end. EVER! Ending QE would collapse everything. Not going to happen.

Paper trading is completely disconnected from economic reality. Today's paper action deserves nothing but a cursory glance and shoulder shrug."

The only other interesting item at this time in the open interest and CoT survey. For the Wednesday to Tuesday reporting week, gold surged over $62 in price and its OI climbed by 6,000 contracts. Silver, however, was dealing with May contract expiration so, while it also surged forward by $1.36, its OI fell by about 15,500! This sets up another very interesting CoT report this week. Who, in silver, was buying/covering and closing May positions? Was it the Specs? Was it the Comms? How much by category? A very interesting CoT this week, indeed.

But the CoT is still 49 hours away. Before then, we're going to have all kinds of price volatility, likely enough to make us not even want to see the CoT as we'll all be ready for the weekend. Hang in there, keep the faith and let's see what tomorrow brings.

TF

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SilverSurfers
May 3, 2013 - 9:52am

She

head of commodities controlling the behemoth army, of the leviathan, including one of those manipulatory minions, but, do you have pity, silly wont, its just not part of the psychological makeup during war in the take down of all time, getting one of them on the stand for all to see on the record.

The Bourne Supremacy (5/9) Movie CLIP - Interrogating Nicky (2004) HD
Motley Fool
May 3, 2013 - 7:26am

madwaloo

It has been said that silver is the money of the poor, and gold the money of the rich.

Today I would say fiat is the money of the poor, and gold remains the money of the wealthy.

(Fwiw credit has always been the money of the people, as per Graeber's research.)

Have you ever given consideration to why silver was the money of the poor? I presume you would say something along the lines of, it was cheaper and thus more practical in trade. That would be correct but far from the whole story. Fact is when silver was the money of the poor, it was always more plentiful than gold, and not only that, its stock always increased at a faster pace than the stock of gold. In those times, even with fixed ratios, austrian school money theory gives you a good idea of the changes in the value of silver.

Have you considered what is the difference between rich and poor? The wealthy have more than they can reasonably use, while the poor lives hand to mouth, and in debt a lot of the time. What is it that the poor would want? Yup, easy money...easy repayable debts. And in the time silver served as money it was the easy money, a lot easier(to repay) than gold anyways. Today fiat is much easier than silver ever was, and let me tell you, the poor love it even more for repaying their debts.

Anyhow, consider who holds silver. There is some industrial users, and then there are the silverbugs and some mixed metal bugs. Now luckilly most of the latter group are preppers too, so when TSHTF they will be okay in terms of food, water and medial supplies for a while. But they hold silver with the idea that if there are bills to pay they can use it to do so. How about industrial holders....well, for the most part they produce electronics. Recent hyperinflations have shown that in times of chaos, essentials become worth more, and luxuries such as that big screen tv, become almost worthless. I don't expect they will be doing too well and buying up loads of silver. There are some military and medicinal applications too, and I suppose those should be ok.

Well then what about those that hold gold. Frankly, goldbug holdings are not that much in the bigger scheme of things, and we don't matter much. But consider those big producers and big holders of gold. Do you think they would want to be selling or buying when TSHTF? And would they be able to meet their desires.

Lastly Gresham's law tells us a bit more ito what to expect of flow. It states they bad money chases good money out of circulation. Stated otherwise, we spend our least valueble (value holding) money first, and keep the best for last. So of available monies, the velocity of fiat will be highest, followed by silver followed by gold, if we consider only those three. As standard economics shows, the velocity of money impacts the value of money.

In short, I do not think silver will do all that well.

But we all have to make our own judgements.

SilverSurfers
May 3, 2013 - 6:59am

Bourne

is up and rockin, as usual after the 4 hour cat nap, at 2am, eyes wide open, ready to rocket jock, again, and silly may have been confusing, so lets set the record real straight, being in retirement, wet nursing two young boys as house husband, while dodging the cops shrinks doctors agents, FBI and treasury, county ticket sheriffs with their county revenue books in hand, ditching the guns and explosives and playing it really cool per local PD orders, those guys take all the fun out of life, seriously, but now silly has been getting rusty real rusty, mostly just listening and reading, and not much typing, and so, the commander must get back up to speed, dont you all love it, back in fighting trim, and so, the typing skills, fast and furious, have to be on again, its been four years in retirement, but not to worry, the neural net was burned in long ago and the tools still work, so, what is required now, is allot of typing, hands on keyboard, speaking of which, those 250 macros to make word emulate wordstar for the burn exploitations, well it goes with a ball track mouse and an AT keyboard layout, for if one function key is moved, it screws up the burn big time, its like being locked in time and space, but not to worry, there are plenty of keyboard and mice backups, silly putting covering all the bases, but eh, whatever works, right, and so, will be doing allot of typing, just in case, as one has to be prepared, just in case, because you never know, the star may just step up and tap a shoulder for the take down of all time to liberate your tails from chopping tree after tree in the forest, meaning of course that the head honcho actually may be really tweaked about the manipulatory shorts and wants to liberate the gang, yeap, you really never know, for sure for sures, but it could just happen, and you have got to be prepared, and modernly that means typing ones butt off, like crazy being silly practicing, to get the commander back into fighting trim, so you see, the longstreet Old War Horse commanding first corps, and the magnificent seven, being long in the tooth has plenty of kick, and fight, probably living three more decades coming genetically from a long line of long livers, and so, the commander is getting up to speed, and its coming back, real fast, the neural net is burned in, and the clock is all wound up, back on night light savings time, as usual during a life time, operating 24/7 at least 16 hours a day, where being down for just four hours, any time any where, gives you twelve hours of hard on rock and roll, and baby its coming back, honk honk, just picking up backwards and disposing the trash and misdirections, so look out for the double dutch bus, honk honk, and so, bourne is getting up to speed, and he dont do random, he always has an objective, smelling blood in the water, and he dont screw around really, especially in nirvana with the spirits in the sky, baby, seeing the light for the take down of all time, as any grandiose alpha werewolf would, just being prepared just in case the STAR goes for it, for the take down of all time, just in case the STAR really wants to liberate your sobbing tails, and so, its now 3am, jet fuel is topped off, inspirational done, it party time at the OK, it is hoped, on the back page, and the current objective is a prime one at that, and that is to set forth the attack plans in detail for the route in detail, having organization and command and control and force definition and proven secrecy well in order for the war in the greatest take down of all time, just crossing tees and dotting eyes, and thats a fact jack, and so, now the commander is just checking, that main engines and rocket boosters are on line, jet fuel topped off, all system go, so lets rock, atta boy, its the back page, yeah baby, at the naple consulate, circling jupiter on thrusters, but a question is posed, is pam, the head of commodities, just being impressed while being very unimpressive, just asking, just saying.

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SilverSurfers
May 2, 2013 - 11:14pm

Leeb

on KWNs is just a riot to listen to, meh, he emotionally goes off in that high pitched shrill, always, I mean always, and you just have to love him when his audio clip is up on KWNs, and today as usual he made complete sense, as always, but its funny in a way, as he bases QE to infinity in part because food stores are in short supply, and that the medium income earner has problems keeping up, so, the printer has to keep printing, as Leeb goes off with the usual emotional pitch, meh, he really just goes off, kind of like an 8 yo on fire, hot and mad, so as an inherent problem solver, and not proud at all, actually, when eating, and would eat nearly anything, lets put in the fudge factor, so thinking back 50 years with 4 siblings growing up, come dinner time, if you did not snatch your portion, that was it, starvation till the next morning, and what that taught you is to always clean your plate, not knowing when the next one would come by, and so modernly we have grannies moving back in, the inflation rate just devastates fixed incomes, and they move back with their kids, that squares up, and people should learn the sneaky tricks of the trading house, in that, when the 8 yo dont finished the lunch, and goes out to play, papa sneaks in for sneak and eat, cleaning left overs, such that, when the 8 yo comes back, bang on the floor crying, wondering who ate the porridge, lol, but granny, Leeb and the 8 yo could learn something about sneak and eat, lol, in the trading house, its cost effective, which these days is important, just saying as a pink panther pro tip. :) Silly

madwalooMotley Fool
May 2, 2013 - 3:21pm

Motley

If there was a collapse of fiat currency, particularly the US dollar, I believe that the perceived value of both gold and silver would rise and would be desired commodities in trade -- particularly in the US, which still has a memory of using silver coins as money. Elsewhere in the world, perhaps silver would not have as much allure as gold.

If there was a collapse of the Comex due to failure to deliver gold, then I would think that the price of gold would rise dramatically, with maybe only a small effect on other commodities such as silver. Gold has been held as a store of wealth by the very wealthy, countries and other entities for centuries--usually in a vault. The bullion banks/depositories have had decades to "fractionalize" those holdings. If that is exposed, those left with no gold but other assets may be willing to trade in order to re-establish their gold insurance position.

as far as I know, silver does not have the same store-of-wealth situation, so there is not the same condition of the BB's/depositories having stolen it. There is only current production, industrial stores and private storage, usually outside of depositories. Therefore the reason why there seems to be no run on SLV while GLD continues to drain.

Im curious what your answer is to your own question. Mind sharing?

Edit: I stack both gold and silver since 2006.

Monedas
May 2, 2013 - 1:59pm

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Indenture
May 2, 2013 - 1:44pm

Xty: ""Of course, somebody is

Xty: ""Of course, somebody is going to need to come up with a way of pricing physical metal." You were joking, right? I thought the transaction of bullion proves a currency is alive.

Motley Fool
May 2, 2013 - 1:37pm

Nick

The purpose of my question was simple. To create consideration of the 'profile' of silver investors, and their purpose in doing so. Also the same consideration for gold investors. I do not mind using the word trade, bu that is besides the point. At the margin value is determined by flow. In such tumultuous times what do you expect in terms of flow for these two disparate metals? And what would be the purpose of the flow.

It is simply something to consider.

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beardeus
May 2, 2013 - 1:24pm

@Chewy

Thanks for your knowledge and thoughts!

Mr. Fix
May 2, 2013 - 1:09pm

Xty, Thank you for your well considered response.

I suppose the meaning of “meaningless” is a bit subjective. Your points are quite valid, and we could even add a few more, but probably the most important is that the spot price is used primarily for the management of perception right now. When the spot price is announced on CNBC, or Bloomberg, the perception of the investing public is being steered towards considering gold a bad investment. In that context, it does have meaning, and it is still being used effectively.

Few people track physical demand, were spot shortages as we do here, So most people do not realize that there is actually a run on physical gold, despite its price being knocked down.

As far as the run on GLD inventory, It is possible that some of it is seeing the market, at least in the context that with high demand, and low inventory, if some gold is not supplied, then the repercussions of diminishing supply might end the game they are playing prematurely.

At these prices, I still think that that supply is actually being stolen, because even with the paper price going up over the past week, the supplies are still going down. It is supposed to be the other way around.

It's hard to analyze what's going on in the metals markets right now, both gold and silver,

paper and physical, because other than our LSC reports, I think most of the numbers are fabricated.

As far as “keeping the plates spinning as long as possible”, those days are over.

I think they have a very specific end to this game in mind, and it is one that they will profit wildly from.

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