Pre-Bernank Post

Wed, May 22, 2013 - 10:05am

Just a quick post as The Bernank is due before Congress at 10:00 a.m. EDT.

Five no particular order...

First, the Yen is rolling over again. In case you missed it, here's a reprint of a chart I posted as a comment back on Sunday. I went searching for something historical. One, to put the decline into context and, two, to look for a potential bottom level. Well, I think I found a bottom and it looks to still be a ways away. Maybe 85/115?

The open interest levels as we approach FND for the June13 gold are getting more interesting. The latest number is as of Monday. This leaves us with 8 trading days to go (including yesterday, for which we get the numbers today). As of Monday, the total OI in Comex gold had grown to 453,048. Interestingly, this is the highest OI level since March 13th. Additionally, with 8 days to go until FND, the June13 OI still stands at 186,952. Now don't go getting too excited just yet...but...with 8 days to go before FND for the April13, OI stood at 176,921 and with 8 days to go before Feb13 FND, the Feb13 OI was 187,059. Could we get 12,00-15,000 contracts standing on FND? Maybe. Why is this important? As of last evening, the total Comex registered inventory stood at just under 52 mts. Some quick back-of-the-envelope math reveals that this is only enough gold to settle 16,680 contracts. Hmmmm...

And this is fun. The GLD shed another 8.42 tonnes of "inventory" yesterday, dropping the alleged total "inventory" back to 1023.08 metric tonnes. How long before the total tonnage drops back into he triple digits? At this rate, not very. And chew on this little nugget I was sent yesterday: Back in the day, the GLD added about 230 mts in a little over a month. From 1/16/09 to 2/18/09, the "fund" went from 795.5 mts to 1024.09. Again, hmmmm. We are now back to that level. Will we now see 200 tonnes exit the "fund" in rapid succession???

Jim Quinn has written another excellent article. Please read this today:

And, finally, please check out the growing list of prizes for the Riff-Raffle. We've added several new items, most prominently, a one ounce Gold Philharmonic coin. This brings the total gold coins to be given away up to two!! The deadline for buying tickets has been extended to Friday so please consider purchasing a few and taking your chances. The current pool is about 450 tickets so you still have a decent shot at winning!

Have a fun day and enjoy the pleasant mutterings of The Bernank!


About the Author

turd [at] tfmetalsreport [dot] com ()


May 23, 2013 - 8:16am

Kcap & GLD

Hey Kcap,

You are correct that GLD was formed so small investors could participate in a paper gold ETF.

You are incorrect that I ever owned any. That kind of assuming is exactly what keeps your head where the sun don't shine.

GLD was formed by those major banks depositing gold with the fund. Now they are taking it back out.

My guess is that there aren't enough small investors interested in GLD for them to make a buck on it. (and that should make you happy since those investors are out of the paper game that you hate)

I don't know what they are doing with the gold they redeemed but it seems to me that they have to sit on it (stack) or sell it at these fire-sale prices.

Bank A can only take back the gold that was put in by Bank A. Bank A cannot take out Bank B's gold. GLD is not a trading house in that way.

I am far more interested in what is happening with that gold than just shouting that the sky is falling because GLD is being drained. Know this....the same banks that put the gold in are taking it out.

If by some chance you believe they didn't have any gold to put in (eg it was only paper) then there cannot be any gold to take out which case the GLD depletion is meaningless. I believe that there is physical.

May 23, 2013 - 3:09am

I think that that the "investor"world will awake with a hangover

This might be a "Black Thursday". Dow futures down 160 or so.

500 might be likely.

Bernanke is sooo stupid. Doesn't he know by know uncertainty in the markets breeds a sell off?


Cry Me A River
May 22, 2013 - 4:58pm

New GLD Depletion Chart Based On Recent Depletion Rates

Using The Depletion Rate That Was Derived From Turd's 200 Tonne Depletion Target, I Zoomed Into The Chart For This Month And Added Today's New GLD Total Of 32,796,278 oz. which is another daily drop of 96,682 oz.---this is close to that estimated -144,000 oz/day line and has accelerated from that last rate of 66,000/day.

Cry Me A River
May 22, 2013 - 4:41pm
May 22, 2013 - 4:36pm

Ranting Andy Hoffman

I know, MARKET MANIPULATION cannot possibly exist; even though the Fed admits to supporting bonds...

QE4-Ever: Fed Announces 4th Round of Quantitative Easing

...while distinct GOVERNMENT AGENCIES are mandated to support stocks...

President's Working Group on Financial Markets

...and manage currencies...

Exchange Stabilization Fund ("The ESF")

...and what's this, per the ESF's mandate...

"The ESF was established at the Treasury Department by a provision in the Gold Reserve Act of January 31, 1934. The act authorized the ESF to use its capital to deal in goldand foreign exchange to stabilize the exchange value of the dollar. The ESF as originally designed was part of the executive branch not subject to legislative oversight."

As the Fed overtly "stabilizes" markets via daily Open Market Operations, is it not possible the ESF (i.e. the "Cartel") does the same in the gold market? I mean, what are the odds of anything other than government intervention explaining the EXACT SAME trading patterns, day after day?

You see, gold MANIPULATION is not exactly a new phenomenon. "Coin Clipping" dates back millennia; and frankly, all attempts to create fiat regimes can be considered the manipulation of REAL MONEY...

Historical Error #9: China's Medieval Fiat Paper Money Had Centuries of Success.

In fact, the London Gold Pool was an overt organization charged with "maintaining" the Bretton Woods mandated gold price of $35/oz. via daily open market operations...

"The London Gold Pool was the pooling of gold reserves by a group of eight central banks in the United States and seven European countries that agreed on November 1st, 1961 to cooperate in maintaining the Bretton Woods System of fixed-rate convertible currencies by defending a gold price of US$35 per troy ounce through interventions in the London gold market."

Of course, it FAILED in barely six years; when PHYSICAL demand swamped their "best suppression efforts"...

"The central banks coordinated concerted methods of gold sales to balance spikes in the market price of gold as determined by the London morning gold fixing while buying gold on price weaknesses. The United States provided 50% of the required gold supply for sale. The price controls were successful for six years, when the system became no longer workable because the pegged price of gold was too low. Subsequently, runs on gold, the British pound, and the US dollar occurred - and France decided to withdraw from the pool. The pool collapsed in March 1968."

...and like today's Cartel, they simply WOULDN'T GIVE UP their FLAWED SUPPRESSION SCHEME; until it imploded three years later...

"The London Gold Pool controls were followed with an effort to suppress the gold price with a two-tier system of official exchange and open market transactions, but this gold window collapsed in 1971 with the Nixon Shock, and resulted in the onset of the gold bull market which saw the price of gold appreciate rapidly to US$850 in 1980."

Fast forward to 1995, when Treasury Secretary Robert Rubin (fresh from his post as Goldman Sachs CEO) first uttered the term "strong dollar policy" to mask the creation of a second gold Cartel; which we are still dealing with today...

Gold and the US Strong Dollar Policy

I'm not going to spend time discussing the various machinations of the current Cartel; as I do so essentially EVERY day. However, I think it's fair to say that not only has my manipulation motto of the past decade held true - "every day worse than the last"; but in the past six months, such efforts have become so maniacal, it appears as if TPTB are actually attempting to mimic the London Gold Pool's efforts.

We already know that 90% of PMs' daily movements occur during COMEX PAPER trading in New York; and per Dmitri Speck's brilliant work below, it should be no surprise that "KEY ATTACK TIME #1" is 10:00 AM EST - i.e., the "London PM Fix," when PHYSICAL trading ends for the day. Additionally, we know that London PAPER trading commences at "THE 2:15 AM" EST open - whilst Chinese PHYSICAL trading ends at 3:00 AM EST; nearly ALWAYS resulting in immediate WATERFALL DECLINES. Thus, it's safe to say the Cartel works in both London and New York to suppress PAPER prices...

However, given that the U.S. has the most to lose (the world's reserve currency) and that England has essentially become its puppet; it's also safe to say U.S. bankers and politicians run the show...

Is the United Kingdom a 'PuppetState' for the United States

In other words, I believe TPTB are attempting to covertly resurrect the London Gold Pool; only this time, it's the "NEW YORK GOLD POOL." Unfortunately for these power-hungry, misguided souls; the END RESULT will be the same - as it ALWAYS is...

Research Shows that ALL Paper Money Systems Failed

May 22, 2013 - 4:33pm

Sign of ... something

Two junk mails in the last week hawking free seminars for - house flipping?

On a different note, everyone from Baron Rothschild to Warren Buffett have advised buying "when there's blood in the streets."

Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family, is credited with saying that "The time to buy is when there's blood in the streets."

He should know. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. But that's not the whole story. The original quote is believed to be "Buy when there's blood in the streets, even if the blood is your own."

Of course the Baron had set up a sort of pony express system that allowed him to know the outcome of Waterloo before anyone else and enabled him to front run the market. Easier said than done for the rest of us but I think anyone could honestly say that the blood is sloshing in the gutters regarding the metals and the miners. A chance to test our mettle so to speak. So, we've got that going for us.

May 22, 2013 - 4:22pm

This is a must hear!!!

Its a really awesome interview!! The whole thing is great but the 50 min mark! WOW!!!

If you ever wondered about the USA gold reserve, wonder no more! Its not there!!

When US gold was confiscated and after Nixon closed the gold window and allowed private citizens to own gold, the interviewee states that almost all of the 20$ gold pieces he sold, came from Europe. He then put two and two together as why would the sovereigns have US consumer coins, would they have preferred to have received standardized bars? And why would we send them coins, because we have no gold. He states that it takes 7 years of mining to fulfill Germany's request. Oh and the clincher, when the world finds out we have no Gold, Boom Goes the Dynamite!!!

Don McAlvany: The Great Gold Robbery | McAlvany Commentary

May 22, 2013 - 4:20pm

Thanks Tyberious I'll check

Thanks Tyberious I'll check it out.

Am sure it isn't there too : )

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May 22, 2013 - 4:17pm

Almost last

Moved to new thread.

Cry Me A River
May 22, 2013 - 4:14pm

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