I am going to be away for the next 36 hours, or so. Sadly, the mother of my friend "Sweetness" passed away earlier this week following a long battle with cancer. She was only 70 years old. She should have had at least 20 more years of birthdays, baptisms and weddings. Instead, that evil, insidious disease claims her as another victim. Do me a favor. Relax and be happy this weekend. Take some time away from all the endless C/C/C/Fed/ECB nonsense. Sit back, count your true blessings and thank your Creator for the opportunity to live and love.
That said, here's a little C/C/C/Fed/ECB nonsense to help you pass the time.
Several Turdites have enquired whether or not I am familiar with a blogger named David Malone. Honestly, I had no idea who he was. Now that I've read some of his stuff, I'm going to be keep track of his site. You should probably do the same.
For our weekend discussion, let's concentrate on two of his recent posts. First up, this gem on MFing Global. At the risk of prejudicing your opinion, let me just say this: I agree 100% with this post. I wish I'd written it myself. Please take time to read and understand what David has written here.
Now, having read that, go back and read this from November of last year:
Hmmm. Yes, I'm sure that's going to end well. When just a small portion of BoA's CDS blow up, the counterparties (JPM, GS et al) will steal the personal deposits of millions of everyday Americans. Oh don't worry. I'm sure the Fed/U.S. govt will step in and honor the FDIC guarantees but, in the end, it will be just another $1T transferred to the TBTF banks, all "paid for" by the American taxpayer.
OK, onto article #2. This one has to do with the impending hostilities in the Persian Gulf. Unlike the first post, I can't say that I agree with 100% of what David writes here. However, it is certainly worth your time to consider.
Lastly, I would be remiss if I didn't discuss the selloff in the PMs today and their failure to breakout and head higher as I had hoped. I believe we got our answer in the OI numbers that were just released for yesterday. Recall that yesterday, gold soared to almost 1665 before it was savagely beaten back. If gold was not a horribly manipulated market, you would have expected total OI to decline or at least be stable. Longs would be closing contracts by selling but maybe a few new shorts would enter and the result would be an offset in the total OI. Instead, what did we see? Total OI increased by almost 4500 contracts! This, my friends, tells you all you need to know. Though The Cartel can see the writing on the wall and they are working to flatten their huge net short position, they are clearly not yet ready to let gold resume its decade-long bull market.
I'm happy to report, though, that the silver OI was almost exactly as I had hoped. Unchanged! In the past, a decline in gold would have caused JPM to pile on lots of fresh shorts and OI in silver would have increased, too. Instead, a flat OI tells me that the EE is nearing the end of the position flattening process they began back in May. Be patient, folks. Silver is about to explode! Could it go lower still before it rockets higher? Of course it could. In the end, however, silver is about to be free of the shackles of overwhelming EE suppression. I am extremely confident that silver is going to have a big, big year.
That's all for now. I'll have more for you on Sunday. TF