Don't look at us. Gold did it!

84
Sun, Apr 2, 2017 - 9:22am

Some of you clearly recall the year 1969 where Ted Kennedy drove off a bridge with a woman in his car. (No, this article really is not about politics, but describes how the media shapes the public’s thoughts and views). Accounts of the Chappaquiddick event paint a sordid picture. It was clear to anyone that Kennedy was partying with single women while his wife was absent, drinking, flirting and left the party with a woman for reasons that evidence suggests were not altogether innocent. It was likely he was drunk. It was likely that he was speeding away from the sheriffs' deputy who saw the car parked by a cemetery a few minutes earlier and came over to ask if they needed help. His actions—driving off a bridge—caused her death. But somehow, he managed to hold onto his office. He sidestepped punishment, stayed in office, and got away with a heinous crime.

Who did what and with what effect? Agent –action—results. Agents make a choice, they act, and then we see a result. And we determine responsibility in the construction of a story by assigning one of the players as the "agent." Kenneth Burke wrote over 400 pages to explain this, though he really nailed it by the first page. Very simple grammar right? We learned it in “grammar-school.” Surely nobody could fool us simply by manipulating grammar… right?

A speech critic and colleague of mine, David Ling, explained how Kennedy pulled it off: Within Kennedy’s speech to the people of Massachusetts, Kennedy was able to ascribe the tragic result to the “scene” of the crime, AND to the mysterious “Kennedy curse” that had afflicted his family. Kennedy was at the wrong place at the wrong time—and this evil “curse” that had taken the lives of his two brothers ... well he mentions it and leave it to the imagination. Though he repeatedly takes responsibility in the speech, his underlying argument was that a dark night, a wrong turn, a poorly designed bridge, and a curse conspired to commit the crime against him (and Mary Jo, of course).

The sheeple of Massachusetts bought it.

So, when analyzing the reasons that an action has occurred, as we do every day when we try to understand our stock charts, we must look very closely at grammar and the narrative structure of the stories told that explain it. And I see a simple, purposeful, clever strategy as I look at headlines each day about stocks bonds, currencies, etc., and especially describing movements in the price of gold. The writers of headlines and articles conceal the real agent, and point to another as they ascribe a reason for the action.

Consider these headlines from March 31, 2017:

  • U.S. Stocks Climb With Dollar as Treasuries Slip link
  • And my favorite, with a tagline:

  • Gold Hits One Month High As Investors Retreat from Global Reflation Trade--Gold prices jumped to a one month high as the precious metal extended its rally since the Fed rate hike earlier this month amid a collapse in the dollar link
  • You have seen thousands of headlines that conform to this grammatical form. What I hope you notice in each headline is the noun and the verb. Who is doing what?

    In each case, it is the commodity, or the stock that is doing the action! Stocks climb. Treasuries slip. Gold hits, gold jumps, gold extends, gold crashes. All on its own volition? Think about it. Who would have known gold could do all these things?

    Stocks, the dollar, gold –none of these things are alive, none have a will, and none are able to perform an action. They simply have a moment to moment value to people—people whose buying and selling influence price, and can be influenced by others. All are inanimate objects that are affected by actual agents who do have a will, are alive, and can act! But we never hear who those agents are… except for here on this blog and other alternative media like it.

    But reading the mainstream news each day, we learn how wrong we are. We are told that gold indeed does have a will and performs actions. It simply moves, it rises, it skyrockets, it crashes, it dips, it falls. It even goes to the moon. I think someone is lying and concealing.

    Actually, gold doesn’t do anything except sit there in a vault, in your safe, or at the bottom of your pond.

    Well, just like Kennedy (and his speechwriter), by subtly shifting the grammatical structure of a sentence or headline, media propagandists indeed make an inanimate object appear to have a will and perform actions. How mysterious it all is… when gold rises or falls. No wonder you have to be a “wizard” to understand the markets.

    Of course we don’t believe gold has a will or the power to act as we read the headlines, but the real agent remains concealed and most people never ask whodunnit. We have been passively absorbing the grammar of these headlines since we started following stocks & commodities. The result is that each morning when I awake I wonder, “What did gold do last night?” what is gold gonna do today? Will gold move higher, lower, or run flat? My best friend calls me each week and asks, "Where is gold heading?"And each time I use these grammatical constructions in my own mind, the actual agents who are deciding, acting and affecting the price of gold can continue their work in the dark.

    Grammar matters! As rhetorician, I am becoming persuaded that grammar can be the most powerful sophistic persuasive force that we experience each day. It highlights and conceals all at the same time. One can lie through choices in grammar in a way that few others detect. Subtle, sneaky, and completely dishonest.

    We have learned some things reading Craig’s articles here on this blog.

    The price of gold is controlled by three, no, four agents:

    A) The bullion banks who have desires and intentions and the monetary power to move the price of CDG one direction or another, using the agency of the COMEX paper trading system that rarely ever delivers gold.

    B) Hedge fund traders that are programmed their computers to respond to certain inputs—inputs that are influenced by the bullion banks. They have news release & tweet reading software that identifies key words & terms the instant new data is released, and then buys or sells their gold as programmed.

    C) Smaller traders who think they can earn some fiat if they can anticipate the increases and declines in the price.

    D) The CFTC who can change margin requirements at will, causing traders to buy or sell, rebalancing their accounts, or choose to do nothing, failing to enforce trading regulations, allowing other powerful traders to cheat.

    A rising gold price suggests that people are not trusting the value of fiat currencies, thus even more investors choose to allocate more of their portfolios to the stability of gold where their trust is stronger. So, the bankers must contain the price to keep trust invested in fiat currency. In 2011 and 2012 the banks had serious trouble handling the price of silver and then gold and were caught on the short side as more and more investors bought into the metals. They took decisive, bold, and illegal action to cap and lower the price of each metal. Since that time, the bankers have monitored the price closely “nipping things in the bud” so to speak, discouraging investors from allocating too much money into metals each time that they have decided to do so.

    Clearly, the bullion banks are the real agent who determines the direction of price in the gold market, taking their orders from… ? (see comments below for opinions). Hedge fund algos and the traders have an effect as well, but they simply follow the lead of the banks, usually losing money as they do.

    Technical analysis provides a statistical description of what already happened—a description that reveals likely decision points of actual investors, key price points where in the past, traders have tended to make parallel decisions—buy, or sell.

    So, the questions you should ask yourself each day are these:

    • What will the banks do that can affect the price of gold today, or this week.
    • What direction do they need the price of gold to move?
    • How soon do they need it to move in that direction?

    And when we ask questions about what the bankers are likely to do?” instead of “what is gold likely to do?” we might actually begin to predict the price direction--bullish trends, bearish trends. Then we can dig for answers to very specific questions that can guide our buying & selling decisions

    • How unbalanced is the COT report? Do the bankers need to cover an excessive accumulation of short contracts? Or do they have room to load up with more new shorts so as to contain price?
    • When is options expiration? What is the “sweet spot” where “the most traders will lose the most money to the bankers” on the other side of those trades? THAT is where the bankers want gold to be priced on expiration day.
    • When is Yellen speaking next and what is the FED is likely to do? Raise interest rates? Lower rates? How might the FED’s actions encourage traders to buy or sell gold?
    • How many FED governors are speaking about the economy this week. How might they wish to affect the markets?
    • Where is the 200 day moving average? Because in the current environment, gold traders must be discouraged from pushing price above that level.
    • What other technical indicators might encourage purchases or sales of gold? Support or resistance levels? Crossing of moving averages? Where are those levels and is price close enough that banks might push the price of gold to their advantage?
    • How might the banks move price to set up technical indicators that will cause the hedge funds and small investor to lose?

    I am looking for these kinds of headlines--and when we see these sorts of headlines, just maybe we can begin to hope:

    • Hedge funds go on Golden buying spree after 200 day moving average is crossed.
    • Silver shorts get squeezed in physical default, forcing prices higher.

    So each morning as you have your coffee, look at the charts, draw some lines, consider overnight action, and ask some different questions. Ask what direction do the banks want gold to move, and what events are approaching that will help them achieve it? The read what Craig has to say, because he actually provides some of these answers. Then make your decisions as you stack or trade. And when you catch yourself musing, "I wonder where gold is headed today?" then slap your own face back into reality.

    References

    Burke, Kenneth. 1945. A Grammar of Motives. Berkeley: University of California Press.

    Ling, David A. 1970. A pentadic analysis of senator Edward Kennedy's address to the people of Massachusetts, July 25, 1969. Central States Speech Journal 21 , 81-86

    About the Author

      84 Comments

    Dingo
    Apr 2, 2017 - 10:04am

    Slapping

    I probably won't slap myself, Dr J. It'd be a green light invitation for my kids to join in on the slapping. Always enjoy your work Good Dr.

    Joseph Warren
    Apr 2, 2017 - 10:07am
    cashonly
    Apr 2, 2017 - 10:08am

    Sunday First!

    You know Dr. J it seems to be all about emotion. Kennedy got the people to sympathize with him rather than blame him and hold him responsible for his actions and the loss of life. My mother, 72 years of age, last year was talking politics and stated that Assad has to go! I asked why we took out Saddam and she stated "he was a bad man" and then followed up with "and that dam Putin!, oh my GOD!!!". I asked her if she had ever been to Iraq, Syria or even Russia and she stated of course not. I can clearly see how her mind/emotions are being manipulated through the media. It is so bad that she will argue with her son who she will not believe. Surprisingly my own wife, a teacher, demonstrates the same principles. She is now stating that the internet is full of fake news. I asked her what sites does she think is fake news?, she said "you know which ones". I said you must mean the ones that disagree with the TV? She sees the market going up, up and up and listens to her 'well educated' associates yakking up the wealth while chastising our PM holdings that seem to never go anywhere. I respond with "ask Kevin Bacon and Kyra Sedgwick about their investments". When I tell her this is all about debt as wealth and it is the biggest ponzi sham ever played on mankind she shakes her head.

    Sadly I don't watch the PM action, I don't really care. If the price goes up that is less that I can buy, let them beat it down and I'll buy MOAR! The system is a fraud, the entire global monetary system is a debt based system that is doomed. The end will justify the means. And that means is: Keep stacking!

    (if I could only get Marchas to drop in and give me a "DAMN RIGHT - KEEP STACKING")

    NUGTCALL
    Apr 2, 2017 - 10:13am

    Moral of the story

    If your in a car with a Kennedy going over a bridge better to be a stack of gold than Mary Jo Kopechne. At least, no one dies and the alibi should work given it dodged murder charges.

    Marcrward
    Apr 2, 2017 - 10:22am

    Simulation

    The futures market is a deterministic simulation.

    Trades do not impact price, price impacts trades.

    If you can't prove that statement wrong, then where are we? In a PSYOP designed to steal your energy and give you in return an iou.

    AGXIIK
    Apr 2, 2017 - 11:09am

    Paraphasing Mike Tyson

    "Hey Teddy. All your mea culpas mean jack shit when someone punches you inna mouf' "

    If there ever was a face crying out for a fist, it was Teddy's.

    Now we have Schumer, Clinton and Obama. So many faces; so little time

    As for gold, mine's like a fat Buddha.

    It doesn't jump; it doesn't hit; it doesn't skip, hop, run or get smacked down. It get's no exercise whatsoever. It sits serenely in it's favorite spot, observing all the foibles and frailties of humankind, knowing it was born in the furnace of two colliding neutrons stars 5 billion years ago. We are puffs of dust in the stream of time. Gold is gold and is forever.

    And Teddy is a corpse moldering in his family plot; his soul crisping in the deepest bowels of hell.

    Seeing gold beat up exorcises me however as I feel quite protective of my fat Buddha. When I'm gone, my gold will move to another friend whom, I hope, appreciates it's stellar reputation.

    Keep stackin'

    NW VIEW
    Apr 2, 2017 - 11:32am

    Sunday morning project!

    This week has been busy, reworking in our organic garden. New fence posts, new wire to keep the deer out, new seeds planted and now I need to build a gate. One of my friends put up a sign that said: "No deer allowed". Even here in the NW, the deer have not learned how to read English even if the net says so.

    I learn many valuable lessons from my garden. It just never changes. I fully expect that onions will come up where I planted onions. Two rows of peas will produce peas and the garlic will be tasty garlic. I do not expect that my garden will grow silver or gold and a crop of sweet potatoes will not pop up where I planted lettuce.

    Even an old baby boomer can see that whatever a person plants, that they will reap. Many wonder why their gardens are filled with weeds. Keeping those weeds out will bring forth a bumper crop. Jim

    billhilly
    Apr 2, 2017 - 11:35am

    Dr. J....

    Sound wisdom Sir.

    However, if I begin to try and analyze "what the Bankers will do" I will find myself banging my head on the wall. The real trouble with these "markets" is the tremendous lack of transparency. Without information, how can I ever hope to make informed decisions.

    Derivatives, OTC, underlaying physical demand structure, etc...these are significant and powerful movers of the "market" and I/we are closed out of them. Therefore, we are simply guessing and trying to discern/dissect ANY piece of info which "they" allow us to have.

    As a trader I MUST seek relevant data and pay attention to the list you have provided. Yet I can NEVER be truly comfortable with a position I have because of the power of sheer volume/$$ influence the Bankers can exercise. In a moments notice, and for what seems like weeks and months on end, "they" can DRIVE the market where they want ! It is a failure of the system's structure and we can have very little influence over it at the moment.

    As a stacker though, I/we can evaluate some of the hard data, and indirect/anecdotal data, and see an imbalance in price structure that will eventually be a benefit for my stack. This is because of the time frame involved. I envy the "pure stackers" out there because they do not have to get into the mud-pit with the Bankers.

    To conclude, we are at their mercy currently. We can ask the questions, evaluate the tidbits of info offered, and try to come up with a plan, but it is like trying to answer the following math problem; 2 + ? = ? . Until truth and transparency comes to the market structure (don't hold your breath) we'll ALWAYS get gamed !

    goldcom
    Apr 2, 2017 - 11:40am

    It's those Arbitrageurs that police gold price

    This is from a Futures Trading Course on Futures TradingCharts.com

    Arbitrageurs in the futures markets are constantly watching the relationship between cash and futures in order to exploit such mispricing. If, for example, an arbitrageur realized that gold futures in a certain month were overpriced in relation to the cash gold market and/or interest rates, he would immediately sell those contracts knowing that he could lock in a risk-free profit. Traders on the floor of the exchange would notice the heavy selling activity and react by quickly pushing down the futures price, thus bringing it back into line with the cash market. For this reason, such opportunities are rare and fleeting. Most arbitrage strategies are carried out by traders from large dealer firms. They monitor prices in the cash and futures markets from "upstairs" where they have electronic screens and direct phone lines to place orders on the exchange floor.

    So what they are telling the new sheeple futures traders is these wise Arbitrageurs that know what the price should be can quickly push price down in line with the cash market and don't question it because they are UPSTAIRS. What a bunch of shit

    billhilly
    Apr 2, 2017 - 11:50am

    Nice to see you Sir Marchas !

    ...and your new profile pic is a good, happy one !!! I hope all is well in your world !!!!!!!

    Subscribe or login to read all comments.

    Contribute

    Donate Shop

    Get Your Subscriber Benefits

    Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

    Key Economic Events Week of 8/19

    8/21 10:00 ET Existing home sales
    8/21 2:00 ET July FOMC minutes
    8/22 9:45 ET Markit Manu and Svc PMIs
    8/22 Jackson Holedown begins
    8/23 10:00 ET Chief Goon Powell speaks

    Key Economic Events Week of 8/12

    8/13 8:30 ET Consumer Price Index
    8/14 8:30 ET Retail Sales
    8/14 8:30 ET Productivity & Labor Costs
    8/14 8:30 ET Philly Fed
    8/14 9:15 ET Ind Prod and Cap Ute
    8/14 10:00 ET Business Inventories
    8/15 8:30 ET Housing Starts & Bldg Permits

    Key Economic Events Week of 8/5

    8/5 9:45 ET Markit services PMI
    8/5 10:00 ET ISM services PMI
    8/6 10:00 ET Job Openings
    8/8 10:00 ET Wholesale Inventories
    8/9 8:30 ET Producer Price Index

    Key Economic Events Week of 7/29

    7/30 8:30 ET Personal Inc/Spending & Core Inflation
    7/30 10:00 ET Consumer Confidence
    7/31 8:15 ET ADP employment
    7/31 2:00 pm ET FOMC Fedlines
    7/31 2:30 pm ET CGP presser
    8/1 9:45 ET Markit Manu PMI
    8/1 10:00 ET ISM Manu PMI
    8/2 8:30 ET BLSBS
    8/2 10:00 ET Factory Orders

    Key Economic Events Week of 7/22

    7/23 10:00 ET Existing home sales
    7/23 10:00 ET Richmond Fed Manu Idx
    7/24 9:45 ET flash Markit PMIs
    7/25 8:00 ET Count Draghi/ECB policy meeting
    7/25 8:30 ET Durable Goods
    7/25 8:30 ET Wholesale Inventories
    7/26 8:30 ET Q2 GDP first guess

    Key Economic Events Week of 7/15

    7/15 8:30 ET Empire State Fed Index
    7/16 8:30 ET Retail Sales and Import Price Index
    7/16 9:15 ET Cap Ute and Ind Prod
    7/16 10:00 ET Business Inventories
    7/17 8:30 ET Housing Starts and Building Permits
    7/18 8:30 ET Philly Fed
    7/19 10:00 ET Consumer Sentiment

    Key Economic Events Week of 7/8

    7/9 8:45 ET Fed Stress Conference, three Goon speeches
    7/10 8:30 ET CGP Hump-Hawk prepared remarks
    7/10 10:00 ET CGP Hump-Hawk House
    7/10 10:00 ET Wholesale Inventories
    7/10 2:00 ET June FOMC minutes
    7/11 8:30 ET CPI
    7/11 10:00 ET CGP Hump-Hawk Senate
    7/11 12:30 ET Goon Williams
    7/12 8:30 ET PPI

    Key Economic Events Week of 7/1

    7/1 9:45 ET Markit Manu PMI
    7/1 10:00 ET ISM Manu PMI
    7/1 10:00 ET Construction Spending
    7/2 6:35 ET Goon Williams
    7/3 8:15 ET ADP June employment
    7/3 8:30 ET Trade Deficit
    7/3 9:45 ET Markit Services PMI
    7/3 10:00 ET ISM Services PMI
    7/3 10:00 ET Factory Orders
    7/4 US Market Holiday
    7/5 8:30 ET BLSBS

    Key Economic Events Week of 6/24

    6/25 10:00 ET New Home Sales
    6/25 1:00 pm ET Chief Goon Powell
    6/25 5:30 pm ET Goon Bullard
    6/26 8:30 ET Durable Goods
    6/27 8:30 ET Q1 GDP final guess
    6/28 8:30 ET Personal Income and Consumer Spending
    6/28 8:30 ET Core Inflation
    6/28 9:45 ET Chicago PMI

    Key Economic Events Week of 6/17

    6/18 8:30 ET Housing Starts and Building Permits
    6/19 2:00 ET FOMC Fedlines
    6/19 2:30 ET CGP presser
    6/20 8:30 ET Philly Fed
    6/21 9:45 ET Markit flash June PMIs

    randomness