Across The Board

Palladium and platinum lead the charge higher.

89
Fri, Jan 17, 2020 - 10:30am

It is another good day....and strong start to 2020...for all metals, not just gold and silver, as the rallies in platinum and palladium continue. And you know what they say about rising tides and boats.

Let's just dive right in. Here's the board as I begin typing:

Obviously, the key standouts are platinum and palladium. Let's start with platinum as it's probably the most important for now. And why? Because platinum has been beaten down for so long that any signs of life are encouraging for the entire sector. Additionally and as we pointed out a few days ago, you can't help but notice the similarities between the charts of platinum and silver...both short and long term.

Let's watch to see where old "Sylvia" finishes the week. For the front-month Apr20 contract, it looks like $1030 or so is a level to watch.

And here's another look at the plat-silv overlay:

Turning to palladium...I've not seen an update from David Jensen yet on today's London lease rates but yesterday they hit 21%! This is undoubtedly a sign of physical stress and this physical stress is driving price. We've written about this on multiple occasions over the past two years with the theme being that perhaps...PERHAPS...palladium could be the "magic bullet" that draws attention to, and maybe even brings down, the entire over-levered, digital derivative pricing scheme.

Here's David Jensen's tweet update from yesterday:

ALERT NOTE:

London #Palladium lease rates big step move up today:

1 Mo. 21.67%
3-Mo. 17.34%
6-Mo. 12.12%
1-Yr. 8.45%

Supply is breaking.#fintwit #oott #market #stocks #finance #Crypto #BTC #gold #palladium #oil #wti #platinum #commodities

— David Jensen (@RealDavidJensen) January 16, 2020

A word about those lease rates....That's an annualized rate and the leases are repayable in METAL. So, for the sake of simplicity, a 21% one-month lease rate is roughly 2% for the month. This means that if I have to borrow 1,000 ounces from you for my immediate delivery needs, I have to repay you 1,020 ounces a month from now. Can you see how this can spiral out of control at some point?

However, this does NOT mean that the system is breaking RIGHT NOW. This also does NOT mean that palladium is going straight up to $5000/oz. My sole interest here is the supply drain and run on physical. Can it eventually draw attention to the similarly structured LBMA/Comex precious metals markets. We'll see. For now, this is sure moving fast. UP over 6% today!

In economic news today, US housing starts inexplicable soared to their best levels in years...all while consumer confidence slipped and industrial production continues to collapse. NET/NET...no real impact on the PMs.

OK, I am supposed to be on vacation today so it's time to wrap up. Eric was also supposed to be on vacation today but we still took time to record the usual weekly wrap-up. Here's the link: https://soundcloud.com/sprottmoney/sprott-money-news-weekly-wrap-up-11720

Below is Eric's fish that he mentions in the call. Also below is my view as I recorded the call.

As I close, I've got CDG back to $1555, which places it down $6 on the week. CDS has been washed all the way back to $17.95 after a pre-Comex high of $18.18. That's disgusting. What a frigging scam these "markets" are. I think I'd better take the rest of the day off before my head explodes. Here's the board as I close:

Please be sure to check back later today for another special podcast with an exploration CEO. And then check back tomorrow sometime for a new thread with the weekly charts and CoTs. Have a great day!

TF

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  89 Comments

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AGAUIt'stheBankers
Jan 18, 2020 - 9:09am

Posting jpg etc

I think it's a secret ?...

matt_Libero
Jan 18, 2020 - 9:00am

Dismissing science versus dismissing politics and religion

Libero,

This is the hard science:

https://www.esrl.noaa.gov/gmd/ccgg/trends/full.html

It shows CO2 in the atmosphere actually measured by instruments that can be calibrated and confirmed to be working. The computer models trying to predict the future have a lot of uncertainty. You asked what kind of thermometer people had 15,000 years ago. I would ask what kind of thermometer can measure temperature 15,000 in the future.

I don't dismiss science, and I am a scientist. What bothers me greatly is that climate change has become some kind of religious and political movement to be exploited by power hungry politicians. I was watching a news show in which a reporter asked several guest pundits and politicians if they "believe" in global warming. What other field of science does that? Do you believe in Newton's laws of motion, or Ohm's law?

I watched Greta's speech at the UN with horror. She was accusing UN bureaucrats at stealing her childhood and destroying her future. The whole speech was hyperbolic, but the sad part is I think Greta actually believes those things. She is being exploited by those seeking power, and she will be cast aside when she is no longer useful to them. It is child abuse.

The people at the UN, in Davos, Brussels, and Washington DC are not serious about the environment. They want power and control. If they were serious, they wouldn't be flying around in private jets. They would be eliminating all the regulations that make it so costly to build new nuclear power plants. They would be shutting down all those large ships, aircraft carriers, jets and tanks that are exempt from the clean fuel regulations foisted on everyone else. They could be doing a lot of things, but all they want is a grand takeover of society. The idea that the government should be in charge of running the climate is laughable.

NW VIEW
Jan 18, 2020 - 8:49am

Sat. Morning quote before coffee:

"Children say that people are hung sometimes for speaking the truth. " Joan of Arc

allenbUltraBoy
Jan 18, 2020 - 7:00am

Maunder minimum

I really have absolutely no idea if climate change due to carbon emissions is real or fake and i don't think the "experts" really know either.

Every time i read an argument for or against the theory i can see holes in the argument.

If you set up a water tank with a pump to pump water over a weir with a suction line from the other side of the weir leading back to the pump forming a loop then the height of water before the weir remains almost constant as the weir will regulate the height even when the pump speed is increased or decreased. There will be fractional changes in water height due to other factors such as surface tension. But if you increase the amount of water in circulation artificially by allowing a slow constant drip from a tap then, over time with no drain to offset the artificial supply, the increase in total water in the system will cause the tank to overflow and, thus, the level before the weir to increase.

There are so many theories for and against climate change it is hard for me to decide. All i do know is that they are called theories because there is no proof otherwise they would be called facts.

allenbzman
Jan 18, 2020 - 6:36am

Helicopter money

Zman,

I see it from a different angle.

The banks do not print money they issue credit. That makes them the creditors and all who receive that credit are the debtors. The creditor holds more power over the debtor as the debt increases. It has been mentioned here many times that the working class is not benefiting from this bubble in asset prices because they have no assets to speak of. It seems to me that the money system has already successfully transferred the wealth from the working class through inflation and taxation. The target now is the middle class and the rich. Yes also the rich. The con now is to make shareholders large and small alike think they are wealthy because they see stock prices going up but they do not see the connection between the credit fueling the bubble and the corresponding power and ultimate ownership gained by the issuer of that credit. Through the purchase of corporate bonds the creditor increases power over the debtors of the business world and through the purchase of government bonds the creditor increases power over government. The ultimate goal is not wealth but power. Total power. I think that when the time comes that politicians are clamoring for credit to buy their re-election (that time may already be here) then the banksters will be happy to issue it and increase their power. They will only allow the system to collapse when they are ready. If they are losing control then they will try to grab as much power as they can before it does collapse IMHO.

They key thing that makes me see it from that angle is the fact that everything is built on credit not money ("gold is money all else is credit").

I could be wrong though. It is probably even more malevolent than that!

I am not religious but sometimes i wonder if the "Beast" of the Bible is not meant to be perceived as a living entity but is actually meant to be a system. The systems of Banking and civil law. These are the tools of total control. Now there's something to think about!

UltraBoy
Jan 18, 2020 - 1:18am

Statistical Analysis

"Statistical significance is the likelihood that a relationship between two or more variables is caused by something other than chance. ... In general, a p-value of 5% or lower is considered to be statistically significant."

Therefore; IF the world goes into another Maunder Minimum cycle of major global cooling which is correlated with reduced sunspot activity, it can be reasoned that Man made CO2 emissions are not statistically relevant in the climate change model. Volcanoes have been pumping CO2 into Earths atmosphere for a very long time in Earths History. Bottom Line: another Maunder Minimum would render all other variables insignificant in the climate change model beyond reduced sunspot activity. Sunspot activity reduction leads to reduced solar wind which allows more cosmic radiation to enter Earths atmosphere which interacts with the ocean waters increasing cloud cover which has the effect of reflecting more sunlight into space cooling the earths atmosphere creating a colder climate. CO2 is plant life "oxygen" and is absorbed by plants; also, much CO2 is absorbed by the ocean waters. The increased CO2 emissions of the very active Volcanic cycle also add to overall CO2. If the next Maunder Minimum can overcome all those factors then mans additional CO2 is negligible to the outcome.

Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

zman
Jan 18, 2020 - 1:04am

@silverseeker

I agree with much of what you're stating, the issue is that the system could go on for decades at this point. Yes, The Elite know it can't last forever, but the plan to go to negative interest rates and actually have the bottom 80% living in a full blown recession/depression despite the markets at all-time highs.

One could argue that the real estate, bond and stock markets do trade on real fundamentals because of the current environment. Interest rates are low because the wealth is concentrated at the very top and there's a dying velocity of money and credit creation. That means wages and commodities prices are low and profit margins are high. As a result, stocks trade at a premium, as does real estate.

There are no fools here, all of these prices are near fair value because of the current environment. IF the environment changes, then we could get a different prices in those markets. Do you see wages moving higher? I don't. Do you see commodity prices moving higher? I don't. I see more deflation and even lower interest rates in the months and years ahead.

Weak economic growth in developed economies is part of the plan, it's not the problem. You know what scares The Elite more than anything, strong economic growth!!!

Libero
Jan 18, 2020 - 12:48am

And the last comment on the global warming/climate change thingy

... I understand the skepticism, the easy explanation of these cycles go round and round for hundreds, thousands, wooly mammoth years. It's "Natural"!

What is not "Natural" is the last 100-200 years of fossil fuel use which is an entirely new variable to the equation of what is "natural". Right?? This new variable of burning fossil fuels cannot be dismissed. It is an entirely new factor added into our ecosystem. You cannot dismiss it. How can you folks dismiss it so easily and with great confidence say that it is a hoax and Nothing needs to be done or changed.

Anyways...

But I think I said this earlier this afternoon. Night all.

silverseekerzman
Jan 17, 2020 - 10:55pm

Leaky plumbing and no pressure in the pipe

Zman, its now over a decade since the financial system collapsed and the world has been running on the notion that debt is an asset and universal willful suspension of accounting law. It seems there no limit to debt and monetization because there’s no inflation pressure evident in the lines. The fallacy of this seemingly magical conundrum is that there is an inexhaustible supply of greater fools. Whether you look at real estate, the Bond market or stocks; all depend on ever greater fools able to borrow at ever cheaper rates or justify ever higher multiples to continue the status quo. Like every cycle before in history; just as the elite imagine that a new paradigm dawned; the bottom drops out.

There has never been a bigger bubble on planet Earth than the present financial bubble supported by debt as assets and zerp financing. When this gets real, there is going to be a googleplex of magnitude more fiat globally looking to ‘get the F out’ of this Roach Motel.

Helicopter money is not relevant, as the present debt load vs real economy and no growth has already mathematically insured collapse of this Ponzi.

Alex777Clarkii Stomias
Jan 17, 2020 - 10:40pm

20th January 2016

I remember it well! First Majestic was knocked down to around $3 and then shortly after bounced big time over the next 6 months. Maybe this is a similar technical shakeout? The fundamentals are suggesting this year will be a very good year for the metals. Rhodium and Palladium are blasting much higher because they are in shortage and are not controlled by the Ponzi paper market.

Anyway, I sold a further 50 put contracts of Jan 2021 AG $10 at $1.80 and still have plenty of ammunition to add more should prices be knocked down further over the Chinese New Year Holidays

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Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 4/20

4/20 8:30 ET Chicago Fed
4/21 10:00 ET Existing home sales
4/23 8:30 ET Weekly jobless claims
4/23 9:45 ET Markit flash PMIs
4/24 8:30 ET Durable Goods

Key Economic Events Week of 4/6

4/8 2:00 ET March FOMC minutes
4/9 8:30 ET Producer Price Index
4/10 8:30 ET Consumer Price Index

Key Economic Events Week of 3/30

3/31 9:45 ET Chicago PMI
4/1 8:15 ET ADP Employment
4/1 9:45 ET Markit manu PMI
4/1 10:00 ET ISM manu PMI
4/2 10:00 ET Factory Orders
4/3 8:30 ET BLSBS
4/3 9:45 ET Market service PMI
4/3 10:00 ET ISM service PMI

Key Economic Events Week of 3/23

3/24 9:45 ET Markit flash PMIs
3/25 8:30 ET Durable Goods
3/26 8:30 ET Weekly jobless claims
3/27 8:30 ET Personal Inc and Spending

Key Economic Events Week of 3/9

(as if these actually matter)
3/11 8:30 ET CPI
3/12 8:30 ET weekly jobless claims
3/12 8:30 ET PPI
3/13 8:30 ET Import Price Index

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