Before we start the week, just a few items for you to consider.
First of all, the Commitment of Traders report from Friday was interesting yet again. Below is a c&p of my thoughts from Friday afternoon.
The Large Specs added 3000 longs but also added a fresh 5200 shorts. The Small Specs dumped 137 and added 998 new shorts and now are once again net short by almost 700 contracts.
The Gold Cartel dumped 1000 longs but also covered 4300 shorts, thereby reducing their net short position by 3,330 contracts. This leaves them net short just 58,300 contracts with a net short ratio of 1.40:1.
The Large Specs dropped their net longs by another 1650 contracts and they are now net long just a total of 3,700 with a preposterously low net long ratio of just 1.12:1. The Small Specs dumped 350 longs and added 1367 new shorts. This leaves them net long only 1300 contracts.
The everybody-but-JPM silver commercials added another 1,581 longs this week. This brings their gross long position back to the 2nd highest on record at 68,438. WOW! JPM and their pals were able to further reduce their gross short position, too. They used the weakness brought upon by the Spec selling to cover 1798 contracts. This leaves them with a gross short position of just 73,458. All totaled...The entire commercial category on silver is now net short just 5,020 contracts and the are sitting on a new record low net short ratio of just 1.07:1.
Once again, from a historical perspective this is truly astonishing...almost breathtaking. From time immemorial, even getting the Commercial net short ratio down under 1.5:1 was considered extremely bullish. Now it's 1.07:1!. If you want to see some historical comparisons, I once again refer you here: https://www.tfmetalsreport.com/blog/4492/strange-days-indeed.
I would strongly encourage you to go back to that post and review those numbers. Not just the historical ones but even the data from the CoT of 2/5/13. The changes in the four months since are amazing."
Just for fun, let's go back and look at the data from the "Strange Days" post of 2/9/13. All of the historical CoT data is telling but let's look specifically at the CoT from 2/5/13. Why that date? You likely recall what happened on the days that followed. First, we had the price smash of mid-February and then we had the stop-running, range breakdown price smash of mid-April.
Again, all you hear in conventional media and analysis is the "the bull market in the metals is over" and why is this? Because the speculators are selling and, in doing so, they've driven price sharply lower. But always remember and never forget that whenever someone is selling, there is someone buying and taking the other side of the trade. So, now take a look at this:
DATE L.S.LONG L.S.SHORT RATIO CARTEL LONG CARTEL SHORT RATIO
2/5/13 42,449 6,588 6.45:1 46,293 98,239 1.99:1
6/11/13 35,309 31,806 1.11:1 68,438 73,458 1.07:1
In just over four months, the net short position of the Silver Commercials has dropped from nearly 52,000 contracts to just 5,000...a reduction of over 90%!! So, the specs have sold and the commercials have bought. Whether you are bullish or bearish going forward is simply determined by whether you think the specs lead this "market" or the banks. I think you know where I stand.
Let's look at gold in the same format.
DATE L.S.LONG L.S.SHORT RATIO CARTEL LONG CARTEL SHORT RATIO
2/5/13 192,806 55,341 3.48:1 145,291 319,898 2.20:1
6/11/13 174,015 115,010 1.51:1 146,470 204,792 1.40:1
For gold, there are a couple of things that should absolutely jump off the page at you.
- The Large Spec gross short position has more than doubled in the past four months.
- The Gold Cartel gross long position is unchanged. Contrast that to the commercial gross long position is silver, which has climbed by nearly 50% over the same time period.
- The Gold Cartel has covered 115,000 short contracts. This has reduced their net short gold liability from nearly 175,000 contracts (17,500,000 ounces) to just 58,000 contracts (5,800,000 ounces). That's a reduction of 67%.
Also consider that, according to the latest Bank Participation Report, chief evildoer JPM has now flipped what was a 50,000 net short position in gold into a 50,000 net long position.
Again, I ask you: Going forward, with whom would you like to side? Do you think that The Specs will be proven correct with a money-making short position or do you think the The Forces of Darkness will rule the day?
While we're on the subject of JPM, let's move on to point #2 of this post. Why is JPM now net long in gold and, at a minimum, likely net neutral in silver? Hmmmm. Why would that be??
As you know, sources have told me that late last summer, the criminal CFTC was given damning information, proving JPM's role in manipulating the metals "markets". As I've often stated, the inaction by the CFTC in the 10 months since makes them a co-conspirator to a crime in progress. But now ponder this: We know that the commissioners of the CFTC are just a bunch of politically-appointed hacks, firmly in the back pocket of the Big Banks. This worthless organization has been "investigating" silver manipulation for nearly five years. The information provided them last summer should have brought about an immediate conclusion and judgment. Clearly, it didn't. Why?
As we look at the CoT data in the 10 months since, the answer is obvious. When presented with the irrefutable proof of manipulation, rather than act immediately, the CFTC kicked-the can and sat on it. Eventually, they must have notified JPM that they "had the goods" and ordered JPM behind-the-scenes to end their manipulation scheme. JPM said "OK, just give us a few months and we'll take care of it". Et, voila! From a net silver short position of over 30,000 contracts back in November, today the JPM silver short position, if it exists at all, is likely less than 10,000 and, in gold, they've flipped from a net short position of 50,000 to a net long position of 50,000. Mission accomplished! JPM can no longer be said to be the big, evil, rascally short manipulator and the CFTC is absolved from their dereliction of duty. Ain't that great?
Finally, to thought #3, and this is a biggie. Did you see this yesterday? https://www.zerohedge.com/news/2013-06-15/deutsche-bank-horribly-undercapitalized-its-ridiculous-says-former-fed-president-hoe
So now we have a former Fed Goon openly questioning whether or not Deutsche Bank is solvent. This isn't the first time I have heard this. The Golden Jackass himself has been telling me this for months. In fact, when I saw this story, I emailed it to him and he responded with this, which he gave me the OK to post for all to read:
"My best German source told me that D-Bank is going into failure very very soon.
A week ago, he said 3 banks were in great danger of failure, likely not to survive, to happen soon
after a certain amount of begging, along with my lame guesses, he gave in
Barclays, Citigroup, Deutsche Bank -- all gonna die in a huge round that will eclipse Lehman & Fannie & AIG
it will be global
watch a Japanese bank join them
post this if you wish."
OK, let's worry about Barclays and Citi another day. For now, let's focus on DB. They've been in trouble for some time and now it's becoming clear for all to see. Additionally, I was told by an English friend that "a major bullion bank has been and continues to be on the verge of bankruptcy/insolvency". Hmmm. I wonder who that could be? There are, of course, six major banks that do all of the clearing for the LBMA. They are:
Barclays, Scotia, HSBC, JPM, UBS and...drumroll please...Deutsche Bank.
Things get curiouser and curiouser, don't they? It's going to be another interesting week. I hope you're ready.