Under The Surface

56
Thu, Apr 23, 2015 - 10:47am

While the computer-derived paper price of gold continues to be jerked around by the whims of the Forex algos, I thought I'd bring to your attention some far more important items that are bubbling just beneath the surface.

Let's start with a seemingly unrelated story. Did you see this today at ZH: https://www.zerohedge.com/news/2015-04-23/deja-deja-deja-deja-vu-mysterious-us-bond-seller It contains this chart:

Though of us who follow gold should be able to immediately recognize this for what it is, having seen it about a million freaking times through the years. NO DOUBT this is a timed algo trade, meant to influence and direct the Long Bond market. The questions become: Who and why?

  • Who? To move a market as large as the T-bond futures market, you need some real heft...this ain't your average hedge fund. Instead, this is very likely The Fed itself acting through its network of Primary Dealer accounts.
  • Why? How many times have I mentioned that The Fed can't raise short rates without the risk of flattening, or even inverting, the yield curve? Solution? If you can raise the long end by 25 bps, you can raise the short end by 25 bps, too, with no overall change to the curve.

And, to me, that is definitely what you're seeing here. A Fed, desperate to raise the Fed Funds rate in order to promote "normalcy" and "dry powder", attempting to manipulate long rates higher in order to create the "space" needed to raise the Fed Funds rate in June.

If I'm right, does that raise the risk of some "bad Fedlines" next Wednesday? Yes it does as a matter of fact. Am I worried that this may cause the computer-derived paper price of gold to fall a bit further. No I am not. Not in the least.

WHY? Keep reading...

Below are some hidden gems regarding the ongoing, global de-dollarization movement. First this from our buddy Alasdair, regarding gold, the SDR and fading dollar hegemony: https://www.financeandeconomics.org/gold-sdr-brics/

This post from two weeks ago: https://www.globalresearch.ca/chinas-defiance-before-the-imf-incorporate... which references this from five years ago: https://abcnews.go.com/Business/story?id=7168919

And then this...A translation of a Russian article that discusses some statements made last week at the "Asian Davos", a "forum in Jakarta, created by Beijing as a counterweight to Western Davos, designed as a platform for the discussion of the economy in the post-American world." Though the translation is a bit jumpy, I think you'll be able to get the point: https://fortruss.blogspot.com/2015/04/the-rats-are-leaving-dollar-titani...

So, again, am I worried about the short-term trends of the fiat-conversion price of gold and silver? Nope. True, I spend a lot of time and energy discussing and forecasting such things but, in the end, we must all remain focused on the MUCH BIGGER PICTURE.

To that end, I'm still excited about the role that Bullion Capital and their new allocated metal exchange can play in the new world. The CEO of Bullion Capital is Tom Coughlin and we had hoped to record an update for you today on the status of the new exchange. Unfortunately, due to his changing schedule, we've had to push back to tomorrow. In the meantime, Tom was on with Max Keiser earlier this week and the program was aired earlier today on RT. Please take the time to watch in preparation for listening to Tom and I tomorrow.

Finally...and I know it's very short notice...since I didn't schedule an A2A this week, having planned on speaking with Tom today, instead...At 1:00 pm EDT (New York time), roughly 2 hours and 10 minutes from now as I type, I'll be in the GoToWebinar "studio", fielding any and all questions from any of you who'd like to meet me there. You can do so by clicking here: https://attendee.gotowebinar.com/register/2329994148146133506 If no one shows up, then I'll just ramble incoherently for a few minutes and post the recording as today's podcast.

Have a great day. Keep the faith and persevere.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  56 Comments

· Apr 23, 2015 - 10:49am

This conflict is now

This conflict is now deepening by the hour:

CPE · Apr 23, 2015 - 10:49am

thx

Turd

silver66 · Apr 23, 2015 - 10:50am

second

Silver66

infometron · Apr 23, 2015 - 10:51am

Wow

Third planet from the sun!

· Apr 23, 2015 - 10:53am

And this is excellent from Denver Dave

And this is excellent from Denver Dave...took GATA's post and added to it:

https://investmentresearchdynamics.com/weve-got-to-start-rigging-the-gol...

infometron · Apr 23, 2015 - 10:58am

by the way...

King World News is experiencing difficulties this morning... lots of this:

Internal Server Error

The server encountered an internal error or misconfiguration and was unable to complete your request.

Please contact the server administrator and inform them of the time the error occurred, and the actions you performed just before this error.

More information about this error may be available in the server error log.

· Apr 23, 2015 - 11:01am

btw & fwiw

Another HUGE jump in open interest in both metals yesterday on the big price decline. Obviously LOTS of new, fresh shorting going on.

Gold was down $16 and its OI jumped a massive 9,161 (2+%) to 406,540. This is the highest OI in a month.

Silver was down 21¢ and its OI surged to another alltime high. UP 1,645 (1%) to 184,278. WOW!

infometron · Apr 23, 2015 - 11:03am

Eric has been complaining a

Eric has been complaining a lot lately about repeated DOS attacks. I don't envy him.

Perhaps the biggest benefit of closing off TFMR is the reduced notoriety. We used to get DDOS'd nearly every week it seems and the hacking in 2013 took us offline for two weeks. Now we haven't had one in months. <Knock on wood>

TF · Apr 23, 2015 - 11:06am

Hmmm. Ya think crude noticed these headlines?

A close above $58 puts a move to $64-66 on the table. That's 10%+ and tradable.

SteveW · Apr 23, 2015 - 11:10am

That's awesome news!

Good for him! Certainly one way to close that ridiculous discount to NAV.

Orange · Apr 23, 2015 - 11:13am

Turd

I vote to make your very important post public.

Thanks for your work and insight.

Orange · Apr 23, 2015 - 11:15am

OK. Maybe tomorrow.

That way it will be included in the weekly email newsletter.

wolfman71 SteveW · Apr 23, 2015 - 11:18am

he is bidding for GTU and SBT

he is bidding for GTU and SBT not CEF

perdman · Apr 23, 2015 - 11:19am

Commodity Index Bottomed?

TF-So ive read alot of stories saying people are now in the camp that the CCI has put in a final bottom. Any thoughts on whether you think this is true?

On another note. Just sent a check for another 20ozs. That purchase is so small my wife wont notice lol. Just need to make sure im home when the delivery arrives. Been busted that way before lol

Old Howard · Apr 23, 2015 - 11:38am

webinar link?

Webinar link not working for me!

CPE · Apr 23, 2015 - 11:55am

CLOB

Would the following eliminate much of the HFT scourge? Would the following revolutionize much the "markets"?

ABX uses a CLOB. LBMA of course does not. Neither do the stock "markets". Neither does the CME. And so on.

Anyway, don't let facts get in the way of the stone throwing. Carry on.

https://en.wikipedia.org/wiki/Central_limit_order_book

  1. Central limit order book

    From Wikipedia, the free encyclopedia

    A central limit order book (CLOB) was a centralised database of limit orders proposed by the Securities Exchange Commission. However, the concept was opposed by securities companies who were afraid that such a system will cause them to lose business.[1][2][3]

    A Central Limit Order Book[4] or ("CLOB") is a trading method used by most exchanges globally. It is a transparent system that matches customer orders (e.g. bids and offers) on a 'price time priority' basis. The highest ("best") bid order and the lowest ("cheapest") offer order constitutes the best market or "the touch" in a given security or swap contract. Customers can routinely cross the bid/ask spread to effect low cost execution. They also can see market depth or the "stack" in which customers can view bid orders for various sizes and prices on one side vs. viewing offer orders at various sizes and prices on the other side. The CLOB is by definition fully transparent, real-time, anonymous and low cost in execution.

    In the CLOB model, customers can trade directly with dealers, dealers can trade with other dealers, and importantly, customers can trade directly with other customers anonymously.[5]

    In contrast to the CLOB approach is the Request For Quote ("RFQ") trading method. RFQ is an asymmetric trade execution model. In this method, a customer queries a finite set of participant market makers who quote a bid/offer ("a market") to the customer. The customer may only "hit the bid" (sell to the highest bidder) or "lift the offer" (buy from the cheapest seller). The customer is prohibited from stepping inside the bid/ask spread and thereby reducing its execution fees. Contrary to the CLOB model, customers can only trade with dealers. They can not trade with other customers, and importantly, they can not make markets themselves.

    References

  2. Caroline Humer (21 March 2000). "New Age Securities Firms to Testify Against Central Limit Order Book". TheStreet.com. Retrieved 2007-03-20.
  3. Robert Kowalski (24 May 2000). "Firms and Exchanges to Swap Views on Markets' Future". TheStreet.com. Retrieved 2007-03-20.
  4. Gregg Wirth (5 November 1999). "Grasso Speech on Electronic Orders Highlights Industry Strife". TheStreet.com. Retrieved 2007-03-20.
  5. https://www.ft.com/cms/s/0/6c24f7e4-0948-11e0-ada6-00144feabdc0.html#axzz18N8sI200
  6. https://online.wsj.com/article/SB10001424052748704170404575625071140314554.html
Marchas45 · Apr 23, 2015 - 11:58am

More To Come????

China government firm’s default shocks market

https://www.marketwatch.com/story/china-government-firms-default-shocks-market-is-more-to-come-2015-04-22?siteid=YAHOOB

"Based on past experience, investors assumed that the government would ultimately come to the rescue." Who Can You Trust????

· Apr 23, 2015 - 12:02pm

Anyone interested in attending?

lund175 · Apr 23, 2015 - 12:07pm

Delete

Delete

CPE · Apr 23, 2015 - 12:08pm

RE: LBMA Conference

I'd rather put my member in a vise.

· Apr 23, 2015 - 12:13pm

And this is great

mike97 lund175 · Apr 23, 2015 - 12:17pm

lund175 - Don't provide disinformation on CEF

Lund175 - I don't know what your agenda is but CEF has been audited and proved to contain real gold and silver. Why do think Sprott is trying to buy Spicer's other two gold and silver funds if they don't contain what they advertise.

· Apr 23, 2015 - 12:31pm

More on Sprott's pending offer for CGT

https://finance.yahoo.com/news/central-goldtrust-responds-announcement-s...

And from the article:

Central GoldTrust (established on April 28, 2003) is a passive, self-governing, single purpose trust, which invests primarily in long-term holdings of gold bullion and does not speculate in gold prices. At April 22, 2015, the Units were 99.0% invested in unencumbered, allocated and physically segregated gold bullion. Units may be purchased or sold on the Toronto Stock Exchange and NYSE MKT.

lund175 mike97 · Apr 23, 2015 - 12:34pm

MIKE97 Hey mack, here is your disinformation

The only agenda I have here is to do a very small part in helping fellow stackers. THAT'S IT.

"There is no good reason that the operators of CEF, GTU and SBT do not convert their trusts to a physical redemption trust. But let’s start with having GTU identify the bank(s) who have custody of the gold and let’s see an independent, physical audit of the gold – open for public inspection.

What’s shocking is that GTU will not name the vaulting bank in any of its prospectuses. How come? Even worse, the Spicers are intimately involved on the boards of GTU and SBT. It’s a viper’s next of incestuousness.

There’s NO good reason these trusts don’t convert the physical redemption trusts. The operators of the Trusts must be preventing it for a moral hazard reason from which they are personally benefiting.

All shareholders will benefit because the deep discount to NAV will disappear. That’s an immediate 8% gain based on yesterday’s NAV discounts. If I were advising shareholders who do not own enough of the shares to convert, if conversion even happens, I would tell them to sell their shares once the discount is corrected and buy physical gold/silver that the safekeep on their own"

https://investmentresearchdynamics.com/cef-and-gtu-whats-wrong-with-this-picture/

lund175 mike97 · Apr 23, 2015 - 12:35pm

No agenda

I am passing along what I read. Is it fact or fiction I do not know.

Yeah, the LBMA has been audited to.

Another link above states Sprott is not buying CEF.

Is that disinformation?

I did not make that statement up out of thin air and I will look for the article right now.

 I am here to help do a very small part in providing information and my 2 cents.

Block me if you can not handle it,mack.

Nick Elway · Apr 23, 2015 - 12:39pm

zero hedge link

Link in the post had a problem, maybe space at the end?

Try this

https://www.zerohedge.com/news/2015-04-23/deja-deja-deja-deja-vu-mysteri...

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