Building Pressure

As if my head wasn't swimming enough, I spent about an hour on the phone with Jim Willie this morning.

As you might imagine, we had a free-wheeling conversation that drifted from topic to topic. Of all the things we discussed, I'd like you to consider this:

Did you even know that this meeting was taking place this week? Have you seen coverage in the mainstream press? Did CNBS send LIESman or Headiromo over for live reports? Here's the summary and source link: https://www.4-traders.com/news/G-20-Group-of-Twenty-Finance-Ministers-and-Centr-Global-Finance-in-Transition-conference-to-take--16735638/

"On May 7-8, 2013, Istanbul (Turkey) will host the Global Finance in Transition conference. The event is organized by the Central Bank of the Republic of Turkey jointly with the Reinventing Bretton Woods Committee and the Russian Ministry of Finance.
Representatives of G20 finance ministries and central banks, international organizations, research institutions and businesses will take part in the conference. Head of Turkey's Central Bank Erdem Basci, Deputy Minister of Finance of Russia Sergey Storchak and Executive Director for the Reinventing Bretton Woods Committee Marc Uzan will give the opening remarks at the conference.
Five panel discussions are planned as part of the event. They will cover the international financial architecture, in particular, changes in the flow of global investments, local bond markets and growth in emerging economies, incentives and determinants of investment and other issues. In addition it is expected that new instruments and incentives for making the global financial system safer will be suggested during the forum."

Did you know there was such a thing as the "Reinventing Bretton Woods Committee"? Wouldn't you like to know how the panel discussions of "international financial architecture" or "flow of global investments" went? Also, it was "expected that new instruments and incentives for making the global financial system safer will be suggested". Oh, really? That sounds interesting. But of course, CNBS doesn't care. Their main story right now is "Forget Software. Hardware Is Where It's At!" https://www.cnbc.com/id/100716901 Nero fiddles while Rome burns...

Much appears to be taking place while hiding in plain sight. You see the events and wonder if they are all, somehow, interconnected. I would suggest to you that they are. The problem is, like anything else, you and I won't clearly see how they connect until after the fact, after all is said and done. But suffice it to say, there are connections to be made from just these examples:

  • Western and Japanese debt monetization and QE to
  • Chinese direct currency swaps to
  • LBMA member default to
  • German gold repatriation to
  • China gold imports to
  • Shanghai gold deliveries to
  • Cyprus to
  • Gazprom to
  • The Tamar gas field to
  • Israel bombing Syria and, by proxy, Iran to
  • Netenyahu visiting Beijing to
  • The end of the petrodollar to
  • The historic April raid on gold price and draining of the GLD to
  • The BRICs Development Fund to
  • The latest FOMC language about "raising" QE to
  • .......

I could continue but I'll stop there. I think you get the picture. As it relates to the precious metals, I think we all understand that there is currently a growing rush to get physical possession of metal. Whether it is from/out of Western central bank vaults, from LBMA vaults, from Comex vaults, from the GLD, from the U.S. Mint and other global mints...whatever/wherever...the push is on to redeem paper certificates for actual physical metal. Why now? Who cares?!? In a crisis of confidence, the initial cause is of no import. What matters is the escalating belief and fear that "If I don't act now, I'll be left holding the bag".

And so we've seen:

  1. Comex inventories plummet to the lowest levels since 2008.
  2. GLD inventory plummet to lowest level since 2009.
  3. JPM New York vault nearly emptied.
  4. German gold repatriation plan.
  5. 470 metric ton reduction of Comex Commercial net short position since 9/12.
  6. 800 metric ton Chinese import for 2012. 233 metric ton import for just March 2013.

And this is seeming to accelerate. Look at this chart of Comex inventories:

And look at the increasing rate of Chinese imports:

And then check this out. The GLD has now shed almost exactly 300 tonnes of its "inventory" since the first of the year. That's about 22% in just a little over four months! But did you know that it took:

  • Two months to drain the first 100 tonnes (1/2- 3/7)
  • Six weeks to drain the next 100 tonnes (3/8-4/15)
  • And just three weeks to siphon the next 100 tonnes (4/16- 5/8)

And this week's CoT will almost assuredly show a further drop in the Comex net short position of the bullion banks. I posted this yesterday but it's worth repeating:

  • On 9/11/12, two days before QE∞ was announced, The Gold Cartel was net short 237,091 contracts. That's 23,709,100 troy ounces or a whopping 737 metric tonnes of paper gold.
  • As of last Tuesday, April 30, The Gold Cartel is now net short 95,563 contracts, a reduction of nearly 60%! And they've reduced their potential delivery obligation by 440 metric tonnes to 297!

We'll get another CoT tomorrow and, for the reporting week, gold was down $23 while total OI was UP by nearly 17,000 contracts. I'll be stunned if almost all of the OI increase doesn't come from Spec shorting and Cartel buying.

Again, all of the things I've mentioned are spectacular in their own right. For example, the German repatriation story or the drawdown in the GLD. Taken in concert, however, it becomes quite clear that something significant is coming over the horizon. But what??? THAT is the question we must attempt to answer in the days ahead.

Anyway...time to wrap this up, I suppose. First, some charts. Note that gold and silver are marking time here. Silver is particularly interesting as it is clearly caught in a pennant that is rapidly closing. Keep a close eye on this as it portends a breakout sometime very soon.

And since I mentioned my friend, The Jackass, many of you are probably clamoring to hear from him, too. No, I don't have a podcast for you but Kerry Lutz does. A link is below. Jim and I may record something in a couple of weeks. https://financialsurvivalnetwork.com/2013/05/jim-willie-the-us-land-of-the-fascists-and-the-debt-serfs/

OK, that's all for now. Have a great day!

TF

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Key Economic Events Week of 11/28

11/28 12:00 ET Goon Bullard
11/28 12:00 ET Goon Williams
11/29 9:00 ET Case-Shiller home prices
11/29 10:00 ET Consumer Confidence
11/30 8:15 ET ADP jobs report
11/30 8:30 ET Q3 GDP 2nd guess
11/30 9:45 ET Chicago PMI
11/30 10:00 ET JOLTS
11/30 1:30 ET Chief Goon Powell
12/1 8:30 ET PCE and Core PCE
12/1 8:30 ET Consumer Inc and Spend
12/1 9:30 ET Goon Bowman
12/1 9:45 ET S&P Manu PMI
12/1 10:00 ET ISM Manu PMI
12/2 8:30 ET BLSBS

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