New From Paul Mylchreest

Thu, Dec 4, 2014 - 10:15am

By TF

Longtime Turdites will recall that Paul Mylchreest is an excellent metals analyst. His latest report explores in great detail the ongoing link between the price of gold and the value of the Japanese yen which, as you know, is a theme we've already been following here for months.

This is a lengthy and detailed summary and it is chock full of terrific information about the gold--yen link, the global gold "market" and GOFO/backwardation. Please take the time to scroll through it and thank you to Paul for sharing it!

Nikkei Gold Danger

About the Author

TF

Founder

TF Metals Report

43 Comments

Refresh

erewenguy

Dec 5, 2014 - 10:15am

Great analysis. Usually, once

Great analysis. Usually, once a trade like this is made public, it quickly runs its course. What will be the next long/short trade to suppress gold?

G-Rod

Dec 5, 2014 - 5:13am

Has the unwind already started

Since the beginning of November, both the Nikkei and Gold have trended up.

J Y

Dec 5, 2014 - 2:45am

Bravo, Paul

This is indeed an epic presentation, thank you for sharing. Questions: 1) If the theory is correct (and I see no reason to think otherwise), what if any impact does exposing it going to have? As it's stickied on ZH, the entire trading world should have read it by morning. (BTW, nailguns and hit tubs are no-nos) 2) Who else but a large Western (but at minimum large) central bank (or several) has the firepower to continuously buy Nikkei/short gold futures in such volume for several years? Not to mention opportunity and motive? If true, this would mean it continues until the sponsoring entity implodes - which in turn will likely make the paper price of PMs the least of our problems... PS: Great to see you around, ReachWest! I need to catch up on RNN, I miss those brilliant newscasts.

DAGEORGE42Safety Dan

Dec 4, 2014 - 8:52pm

Best article I've seen on this site

This is excellent work. Extremely detailed and makes complete sense. If this is indeed true, it could take some time to unwind, but the next major risk off environment should result in some de leveraging and hence an unwind of Nikkei/gold pair trade. This is the only rational explanation I've seen which drives why gold has gotten killed with central bank balance sheets exploding in size. None of us can predict when it blows, so you have to be there now before it blows up. Could take three years, could be Monday morning. Shorting a risk less asset to buy one with risk won't end well. Especially when the world realizes that QE does nothing for sustainable economic growth I own a lot of gold and reading this article scares the shit out of me. The size of this trade is likely beyond huge If it exploded all equity markets would crash And gold would explode higher

Safety Dan

Dec 4, 2014 - 7:57pm

Kirby: Zero Interest Shock

Kirby: Zero Interest Shock Treatment – Can We Survive It? (Part 3/3)

silver66

Dec 4, 2014 - 6:01pm

Reach West

Great job on the video, I visited your youtube site . I see you have made other videos. What a constructive way to wake people up

Silver66

ReachWest

Dec 4, 2014 - 5:23pm

Big Banker Pilots (An original RNN Cartoon movie)

Great to see Paul commenting in this thread! Fabulous access we have here in Turdville.

And .. for some fun .. here is a trip down Memory lane that RNN (that's me) created a couple of years back for fun and relaxation.. Watch as Chairman Ben of the Fed uses his amazing Keynesian skills to pilot the world economy into a crash landing. It's parody - but fun. This video only ever got 230 views - YoutTube originally disallowed it because they claimed it infringed on copyrights (The original name was "Snakes Fly a Plane").

Anyway - here it is - 8 minutes of silliness - exclusive to Turdville.

https://youtu.be/xpqgT--DjkE?list=UUX4wdMUIA6DqlNljO8wrZCg

A couple of screenshots..

CPE

Dec 4, 2014 - 4:29pm

Soooooooo

Perhaps Kuroda and the BoJ are the futures "traders" responsible for the cynical trade...

CME offers rebates for the volume, Central Banks trade futures, who cares about Japanese stawks more than the Japanese? The world has forgotten about Japanese equities, but a roaring "wealth effect" during currency destruction with a suppressed alternative (gold) would fit nicely with Kuroda and crazy Abe's Kamakazi of an entire nation.

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

TFAGAU

Dec 4, 2014 - 4:28pm

If it hasn't already.

"So I guess its the eventual lack of physical that will put the stick in the spokes of long Nikkei /short gold trade?"

SamSchlepps

Dec 4, 2014 - 4:18pm

Probably crossed a number of minds here SIFO

SIFO disappears too - as Paul so aptly puts "...Another coincidence..." Many thanks for the article!

https://www.lbma.org.uk/silver-forwards

Cessation of SIFO 11:00 Means with effect from 5th November 2012.

Following consultation with the LBMA forward Market Makers, and more generally with other market participants, the LBMA Management Committee has agreed that after 2nd November 2012, the forward Market Makers will cease making contributions of their mid-price silver forward rates to allow the calculation of the SIFO means on the Reuters system each day.

Subscribe or login to read all comments.

Key Economic Events Week of 11/9

11/9 1:30 pm ET Goon Mester
11/10 7:30 am ET Goon Kaplan
11/10 10:00 ET JOLTS job openings
11/10 10:00 ET Goon Rosengren
11/11 Veteran's Day. Bond market closed.
11/12 8:30 ET CPI
11/12 11:45 ET Chief Goon Powell
11/12 2:00 pm ET Federal budget
11/13 7:00 ET Goon Williams
11/13 8:30 ET PPI
11/13 8:30 ET Goon Bullard
11/13 10:00 ET Consumer sentiment

Key Economic Events Week of 11/2

11/2 9:45 ET Markit Manu PMI
11/2 10:00 ET ISM Manu PMI
11/2 10:00 ET Construction Spending
11/3 U.S. Election Day
11/4 November FOMC begins
11/4 8:30 ET ADP jobs report
11/4 8:30 ET US Trade Deficit
11/4 9:45 ET Markit Services PMI
11/4 10:00 ET ISM Services PMI
11/5 8:30 ET Productivity & Unit Labor Costs
11/5 2:00 ET FOMC Fedlines
11/5 2:30 ET Chief Goon Powell presser
11/6 8:30 ET BLSBS
11/6 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/26

10/27 8:30 ET Durable Goods
10/27 10:00 ET Case-Shiller home prices
10/27 10:00 ET Consumer Confidence
10/27 10:00 ET Richmond Fed
10/28 8:30 ET Advance Trade in Goods
10/28 8:30 ET Wholesale Inventories
10/29 8:00 ET ECB monetary policy stmt
10/29 8:30 ET Q3 GDP first guess
10/30 8:30 ET Personal Income and Spending
10/30 8:30 ET Core Inflation
10/30 10:00 ET UMich Consmer Sentiment

Key Economic Events Week of 10/19

10/19 11:45 ET Goon Chlamydia
10/20 8:30 ET Housing Starts
10/20 1:00 pm ET Goon Evans
10/21 10:00 ET Goon Mester
10/21 2:00 pm ET Fed Beige Book
10/22 8:30 ET Initial Jobless Claims
10/23 9:45 ET Markit Oct flash PMIs

Key Economic Events Week of 10/12

10/13 8:30 ET CPI and Core CPI
10/14 8:30 ET PPI
10/14 9:00 ET Goon Chlamydia
10/15 8:30 ET Philly Fed
10/15 8:30 ET Empire State Idx
10/15 8:30 ET Import Price Idx
10/16 8:30 ET Retail Sales
10/16 9:15 ET Cap Ute & Ind Prod
10/16 10:00 ET Business Inv

Key Economic Events Week of 10/5

10/5 9:45 ET Markit Svc PMI
10/5 10:00 ET ISM Svc PMI
10/5 10:45 ET Goon Evans
10/6 8:30 ET Trade Deficit
10/6 10:00 ET JOLTS job openings
10/6 10:45 ET Chief Goon Powell
10/7 2:00 ET Sept FOMC minutes
10/7 3:00 ET Goon Williams
10/8 8:30 ET Initial jobless claims
10/9 10:00 ET Wholesale Inventories
10/9 12:10 ET Goon Rosengren

Key Economic Events Week of 9/28

9/29 8:30 ET Advance trade in goods
9/29 9:00 ET Case-Shiller home prices
9/29 10:00 ET Consumer Confidence
9/30 8:15 ET ADP employment report
9/30 9:45 ET Chicago PMI
10/1 8:30 ET Personal Income and Spending
10/1 8:30 ET Core Inflation
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/2 8:30 ET BLSBS
10/2 10:00 ET Factory Orders

Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
9/15 9:15 ET Cap Ute and Ind Prod
9/16 8:30 ET Retail Sales
9/16 10:00 ET Business Inventories
9/16 2:00 ET FOMC Fedlines
9/16 2:30 ET Powell Presser
9/17 8:30 ET Philly Fed
9/18 8:30 ET Current Acct Deficit

Key Economic Events Week of 9/7

9/9 10:00 ET JOLTS job openings
9/10 8:30 ET Initial jobless claims
9/10 8:30 ET PPI
9/10 10:00 ET Wholesale Inventories
9/11 8:30 ET CPI
9/11 9:45 ET Core CPI