Again, This Isn't Complicated

109
Mon, Mar 24, 2014 - 5:18pm

Frustrating? Yes. Complicated? Nope.

Well, it's good to be back though the timing of my spring break turned out to be challenging for it seemingly could not have come at a worse time. More on that below but, for now, rest assured that Turd is back on the watchtower and ready to fight.

Let's start again today with where we left off Friday. In that podcast thread, I implored you to go back and review this post from 3/1/14. Even if you did so then, you should do so again today because it's extremely important that we get on the same page:

https://www.tfmetalsreport.com/blog/5530/negative-gofo-and-rising-gold-p...

To summarize, here are a few of the salient paragraphs:

"The days of Central Bank gold leasing are almost over. Whether the CBs are "out" of gold or simply unwilling to lease what they have left for fear of not getting it back (from China), the CBs are not playing the gold leasing game like they have for the past 45 years. Again, for the past 24 years, GOFO rates were negative just 7 out of 5,000 days. Since July 8, 2013, GOFO rates have been negative for 98 out of 164 days or roughly 60% of the time.

Put another way, positive GOFO means "business as usual". Central Banks are willing to lease gold to the Bullion Banks. The BBs take this gold and dump it onto the futures market, using this scheme to contain, manage and suppress price. This worked perfectly until 2003 when demand and fundamentals overwhelmed this scheme for the next nine years and price rallied from $300 to $1900. Leased gold was continually dumped from October 2012 until late June 2013 and the resulting decline took gold back from $1800 to less than $1200.

But, now, negative GOFO is the new norm. Why? Because the CBs no longer have the gold to lease to the BBs. Without this readily available physical supply, the BBs are unable to aggressively manage price on a day-to-day basis and they are forced to stand down. Instead of daily 7:00 am London time price raids, we only get one per week. Instead of "waterfall" declines on the Comex, we get gradual and steady price increases."

And I concluded that post with this:

"This leaves us with this conclusion for traders and stackers everywhere:

Buy when GOFO is negative. Be cautious, sell or hold off on new purchases, when GOFO is positive.

Could it be as simple as that? Yes! It may very well be, at least for now."

Allow me to put this another way for you...

When GOFO is negative, physical supply is scarce. Because of this, The Cartel Banks have no gold to dump into the market to raid and jam price lower. Their only option is to be on the offer. All they can do is stand ready to absorb as much of the speculative buying pressure as they can each day, hoping to contain price and manage rallies.

Once GOFO flips back to the positive, this indicates that The Banks again have the ability to freely lease gold en masse. They then can utilize this gold to aggressively raid and sell in their attempts to paint the charts and force the spec money back out. Into this spec selling, the banks can buy back and cover many of the shorts employed earlier to contain price.

The two charts below illustrate this point. First, check this daily chart of the past two months of action. Just as the pattern has been, once Comex February deliveries began in earnest, GOFO turned negative again on 2/4/14. From there, gold went on a tear. It was UP 13 of 15 days with most days seeing an unusual lack of even London Monkey attacks. GOFO "peaked" negative on 2/21/14 and began to drift back toward positive as the February delivery month concluded, turning slightly positive again on 3/6/14. However, GOFO didn't immediately jump higher. Instead, it languished near flat for over a week as tensions in Ukraine/Crimea heated up and more speculators rushed into the paper market. As of 3/14/14, GOFO was still just slightly positive at +0.0075%.

Conveniently, we had a CoT survey taken on 2/4/14 as well. That evening, The Cartel Banks (gold commercials) were NET SHORT a total of 65,782 contracts. Left with no gold to raid price, all they could do was absorb spec bids through February and into March and by the CoT of 3/18/14, The Cartel Bank NET SHORT position had grown to 145,934 contracts. It was "mission accomplished" though because they had managed to contain the price rise to just $100. Can you even imagine how price would risen without The Banks covering each bid??

But, as you now know, GOFO did turn positive last week and each day since has seen rates move even deeper into positive territory. Again, this means that leasable gold is now readily available again for The Banks to borrow and dump into the market. GOFO moved from +0.016% to +0.038% last Monday. Can there be any surprise, in retrospect, that after price jumped higher last Sunday evening it was immediately raided back down and then lower later that day? As GOFO spiked toward a Friday high of +0.102%, are you surprised that price is now another lower?

Anyway, the good news in all of this is that we are clearly onto them. The game is ending, as witnessed by the now-persistent negative GOFO and, with April Comex deliveries set to commence in a week, rates will undoubtedly slip negative again soon. In the meantime, we must expect even lower prices as a desperate Cartel attempts to paint the charts as negatively as possible while they can, hoping to avoid another spec rush in April.

In gold, this means at least a drop to the lower end of the 2014 channel, currently near 05. However, I doubt that price will stop there. The Cartel goal almost has to be to break the 2014 channel. Why would they want to leave that channel and bull trend intact for when GOFO slips negative again next month? No, they'll almost certainly keep raiding until that channel is broken. Also, if they can break price down and out of the channel, they'll also try to knock price back below the 50-day and 200-day moving averages, currently near 02. In the end, absent any geo-political dramatics over the next 5-10 days, I think price is headed to 80 or so and the 100-day MA. Yes, that stinks but it is what it is.

And silver, now that it's convincingly back below .60 and all of its moving averages, is likely headed to at least .50. I'd love to see a third "higher low" by having it stop there but we can't rule out , either. Yes, that sucks. But, again, recognize it for what it is and prepare to take advantage of this current dip.

I have a lot more to say but I'd better get this posted. I'll try to cover this and other topics in more detail in today's podcast so please be sure to check back later.

Again, hang in there. Recognize what is going on and use this knowledge to your advantage.

TF

About the Author

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tfmetalsreport [at] gmail [dot] com ()

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Unholy Dallianceancientmoney
Mar 26, 2014 - 2:23pm

No, you haven't understood

No, you haven't understood what I was saying (unless you are trolling and therefore you understand perfectly…).

An international repricing of gold and silver (which is what a Jim Willie 're-set' would be) is not dependent on contracts traded on any commodity exchange and the prices at which such contracts are exchanged. A price re-set is nothing new: it has happened many times in the past. Unfortunately, it is not in anyone's memory (FDR repricing gold from $20.42 to $35.00 in January 1933, for example. The exchanges will be completely helpless to stop it - it will be a 'fait accompli' with no possibility of it being reversed. That is why my dream showed a re-set to $75 and trading continuing to drive price HIGHER thereafter. Of course, I have no idea whether the price will actually be re-set to $75. That is why I advise caution in taking anything here at face value. The value of my dream is to force a re-evaluation of the collective mind-set of which your post is a prime example: 'they always win', 'don't try and fight them - you will lose' sort of thinking. That paradigm has gone. It no longer exists or at least it is no longer 'potent'.

In fact, all I am advising is to sit tight! That's all. There's nothing else. Don't trade unless you are only trading a small (tiny even) proportion of your total assets as the old gambling/trading advice holds true here: only gamble/trade as much as you are prepared to lose.

Unholy Dalliance
Mar 26, 2014 - 2:01pm

Prophetic? II

There is something I would like to add to my 'commentary' earlier which was sparked by the strange dream of a silver price 're-set' I had a few days ago.

After thinking about the dream for a day or two (and this was after the silver 'smash' which coincided with the last week's Fed. Res. Board meeting), it occurred to me: if silver and gold were to be dramatically and instantaneously 'revalued' by resetting their internationally traded prices much, much higher (and, by the way, could someone tell Jim Willie not to write 'revaluated'?), then isn't this kind of contrary price action exactly what you would expect beforehand? The reason would be to deter as many people as possible in investing in or buying physical precious metals? It makes perfect sense, otherwise far too many 'scurvy knaves' would benefit! Even Stephen Leeb, interviewed by Eric King is puzzled by the low price of silver and has now openly used the 'M' word (breathe it softly: manipulation). I think it is absolutely what would be served up prior to a re-set, although I warn you again, that this is purely speculation on my part - just my personal musings.

All I am attempting to do is to 'draw a few disparate threads together'. To me, there is something in the air, its presence is almost palpable and it is overwhelmingly positive if you are correctly positioned to take advantage of it. Another 'caveat': the current action would also tempt people from their long positions as the price drops further and further in the hope that they can buy back their positions at a lower or much lower price. The PoS is currently at $19.78 which has wiped out ALL of the movement up from the 14 February. approx. $2.40!!! A 12% reduction!!! What on earth would account for a decline of 12% in the PoS now? It's beyond insane. It is insanity personified unless there is a reason which must remain hidden at all costs. That reason can only be, could only be what I outline above and what my dream possibly, foretells.

As someone once famously said: 'Sit tight and be right.'

(I tried to post the link to the Leeb interview at www.kingworldnews.com but couldn't, for some reason.)

ag1969
Mar 26, 2014 - 9:32am

Bloomberg Editor Quits After Story Censored to Protect Corporate

HomeClass Warfare Exists

Bloomberg Editor Quits After Story Censored to Protect Corporate Interests

Kerry-anne

March 26, 2014

Class Warfare Exists

Bloomberg News editor Ben Richardson quit the organization in protest this week, citing the channel’s handling of an investigative piece on China. While the US mainstream media jumps on stories of bias elsewhere, it remains silent on the corporate power that censors journalists at home.

“I left Bloomberg because of the way the story was mishandled, and because of how the company made misleading statements in the global press and senior executives disparaged the team that worked so hard to execute an incredibly demanding story,” Richardson, who served as editor-at-large for Asia news, told Jim Romenesko on Monday.

“the reporters who worked on the story for months didn’t get to review the copy before it was unilaterally spiked on a conference call with a ludicrous amount of top brass.”

So what was the story, and why was it spiked?

https://iacknowledge.net/bloomberg-editor-quits-after-story-censored-to-...

ivars
Mar 26, 2014 - 9:23am

And here is clear intention

And here is clear intention of BOE/UK to play with China (Rothschilds balancing out the USA-but obviously with Rockefeller consent as all out war seems to be more harmful, though last attempts are still ongoing in Ukraine) :

https://www.marketwatch.com/story/boe-pboc-agree-on-yuan-clearing-bank-in-london-2014-03-26?link=MW_home_latest_news

Quote:

LONDON — The Bank of England and People’s Bank of China reached an agreement Wednesday on clearing and settling renminbi trades in London. It’s the first such tie-up outside of Asia and is seen as further enhancing the U.K. capital as a Western trading hub for China’s currency.

The central banks will sign a memorandum of understanding on March 31, paving the way for the appointment of a clearing bank for the renminbi, also known as the yuan USDCNY +0.13% , in London.

“I’ve put such government effort over the last three years into making sure we’re the leading Western center for trading in the Chinese currency. That effort has paid off — and today’s agreement … is another major step forward,” U.K. Treasury chief George Osborne said in a statement.

Notably, UK was not very hard on Russia when it came to practicalities. They know that Russia will be in China Debt Empire interest sphere which in turn will be Rothschild run which in turn is good for old mother United Kingdom. I wonder why Scotland is looking for Independence now?? In this setting it would be wiser to stay with England unless..Scottish Independence is pushed forward by Rockefellers.

I admit there are still nuances to find out but it is much easier to give NAMES to current Debt Emperor (e.g David Rockefellerhttp://en.wikipedia.org/wiki/David_Rockefeller) and his rival soon to become Co-Emperor ( e.g. David Rothschildhttp://en.wikipedia.org/wiki/David_Ren%C3%A9_de_Rothschild) and operate with them as they give more focused view and allow to transcend the things of secondary importance like FED, USG, China, PBOC, BOE, UK, values systems, cultures, political systems, politicians, generals etc. which , while not easy, can always be adjusted to match the DEBT increase and control needs.

I wonder if name David is of significance nowadays to become a DEBT Emperor, or its just a coincidence

ag1969
Mar 26, 2014 - 9:19am

No, this isn't complicated

And for anyone beginning to think that , because of the extend and pretend, that maybe, just maybe, this version of ponzi coupons is somehow going to be different than every other paper collapse in world history, Peter Schiff has an excellent back to basics article out this morning:

Debt and Taxes

Peter Schiff
Euro Pacific Capital, Inc.
Posted Mar 26, 2014

The red flags contained in the national and global headlines that have come out thus far in 2014 should have spooked investors and economic forecasters. Instead the markets have barely noticed. It seems that the majority opinion on Wall Street and Washington is that we have entered an era of good fortune made possible by the benevolent hand of the Federal Reserve. Ben Bernanke and now Janet Yellen have apparently removed all the economic rough edges that would normally draw blood. As a result of this monetary "baby-proofing," a strong economy is no longer considered necessary for rising stock and real estate prices.

https://www.321gold.com/editorials/schiff/schiff032614.html

ancientmoneyUnholy Dalliance
Mar 26, 2014 - 8:57am

@Unholy Dalliance re: silver dreams . . .

If I had that same dream (silver at $75 to $77) it may include a nocturnal e . . . well, anyway, I daydream about such things quite often.

The COMEX silver market (and gold, slightly less than total) is completely rigged. Butler's article that I linked earlier, tells of a way to sue JPM and CME for their long-running manipulation and fraud perpetrated in silver.

He says the hedge funds continually do the same stupid mo-mo's over and over and over, making it easy for JPM to control silver pricing.

I have often stated that the hedgies would figure this out, if they wanted to. Those hedgies, of course, are part of JPM's scam wrought large, in my opinion. They are paid co-conspirators in one way or another, so that JPM can control silver (and gold) pricing. They either have a feeding tube from the Fed, JPM, or another banking entity--ot else they are given easy profits in other markets to more than compensate for their silver "losses."

Of course, under this scenario, they can continue their games until physical shortages render them obsolete in the silver pricing world. So far, there has been enough silver, obviously, for them to maintain the scam.

DeaconBenjamin
Mar 26, 2014 - 7:53am

Moscow says Ukraine stops Russian crews disembarking in Kiev

(Reuters) - Russian accused Ukraine on Wednesday of violating international conventions and putting lives at risk by preventing Russian pilots and crew disembarking after passenger flights to Kiev.

Citing information from Russian carrier Aeroflot, the Foreign Ministry said Ukrainian border officials were not allowing crews to rest in compliance with flight safety regulations when they flew to the Ukrainian capital.

"Russia insists on an unconditional cessation of these irresponsible practices by Ukraine which endanger the safety of civil aviation flights," the ministry said in a statement.

Earlier this week, the ministry issued statements saying Russians had been targeted by Ukrainian nationalists in two robberies and accusing the Ukrainian authorities of being unable or unwilling to prevent the incidents.

Moscow has used reports that ethnic Russians in Ukraine are under threat from nationalists as part of its justification for annexing the Crimea region. Russia has also reserved the right to use its armed forces to protect compatriots in Ukraine.

https://www.reuters.com/article/2014/03/26/us-ukraine-crisis-russia-flig...

DeaconBenjamin
Mar 26, 2014 - 7:46am

China’s Gold Imports From Hong Kong Increase on Import Quotas

China’s gold imports from Hong Kong rose in February amid increasing demand and as the country allowed more banks to import the precious metal.

Net imports totaled 109.2 metric tons last month, compared with 83.6 tons in January and 60.9 tons a year earlier, according to calculations by Bloomberg News based on data from the Hong Kong Census and Statistics Department today. Exports to Hong Kong from China fell to 15.8 tons in February from 19 tons in January, the Statistics Department said in a separate statement. Mainland China doesn’t publish such data.

Bullion is up 9.1 percent in 2014 on rising consumption in Asia and as emerging-market turmoil and signs the U.S. recovery may be faltering boost haven demand. China overtook India as the largest user last year as the biggest price drop in more than three decades spurred purchases, the World Gold Council said last month. China granted licenses for importing gold to Australia & New Zealand Banking Group Ltd., HSBC Holdings Plc and China Everbright Bank Co., Reuters reported in January.

“Imports were boosted by more participants in the market,” said Duan Shihua, a partner at Shanghai Leading Investment Management Co. “Some buyers may be replenishing inventory after robust sales during the Lunar New Year.”

https://www.bloomberg.com/news/2014-03-25/china-s-gold-imports-from-hong...

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Unholy Dalliance
Mar 26, 2014 - 7:45am

Prophetic?

I had a strange dream a couple of nights ago. The gist of it was this: I was at reading some articles about silver online, one of which had a link to another silver blog - the author of the second blog was saying, excitedly, that COMEX was going to discontinue trading silver futures quite soon - in a matter of days. My reaction to this was to wonder what 'games' would be instituted as a result of this. It wasn't made clear whether the COMEX was being forced to ban futures or whether they had come to that decision voluntarily! In my dream I then checked what silver was doing: it had 're-set' to $75.00 and within minutes was bouncing between $75 and $77. I am not entirely sure what time of day it was but I feel it was during COMEX trading - which is during the afternoon/evening for me.

Now, I am not trying to give anyone false hope. We, HUmanity, have all suffered enough. You might even say that I shouldn't share this kind of thing with you at all - and I did think long and hard about posting it, believe me. However, I find this dream quite interesting for 2 reasons. The first is Jim Willie's oft-claimed re-set 'scenario' in which gold will re-set to $3000 overnight (probably when trading commences on a Sunday) and take silver along with it ($75.00 sounds about right here!) and the news that the Volker Rule will be implemented on 1 April 2014. (You can't say 'they' don't have a sense of humour choosing that date!) There is something additionally interesting about that news as at the time gold and silver rose to their unprecedented peak of $880/$50 (respectively) in January 1980, Paul Volker, as US Treasury Secretary, began to ratchet up interest rates to curb inflation and to stifle 'out-of-control' credit growth which, of course, was then fuelling inflation. The same policy was used here in the UK in 1980/81 inflicting enormous financial pain on ordinary people as interest rates rose to a peak of 18%.

Could it be, therefore, that the Universe has an even wrier sense of humour in using Mr. Volker as an instrument to 'rebalance' all the suffering that 'misguided' policies over the last 30+ years have inflicted on HUmanity? Even if you dismiss my dream as nonsense, you may wish to reflect on that thought.

I AM keeping an open mind about my dream. It goes without saying that it would be very nice if it does occur! We will see whether it is prophetic or not soon enough.

atarangi
Mar 26, 2014 - 6:25am

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