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Relative Scarcity of Physical Gold Prompts Large Drawdowns From Funds and ETFs

October 15, 2018

Relative Scarcity of Physical Gold Prompts Large Drawdowns From Funds and ETFs

“It appears that there is a dwindling and overleveraged supply heading towards an unmanageable and relentless source of demand.”

It is interesting to watch the ongoing management of physical gold holdings in the West.

Physical gold has been seeing large drawdowns from inventory during this price decline, but silver does not.

This is not due to some preference or matter of taste.   Physical gold for sale at these prices is in short supply, whereas silver is not.

Both are subject to speculative price manipulation in the paper markets.

The relentless demand from Asia is stressing the highly leveraged claims per physical ounce of gold in London and New York.

It appears that there is a dwindling and overleveraged supply heading towards an unmanageable and relentless source of demand.

The system will be maintained— until it cannot.   Although the game can be extended by a determined effort, no commodity pricing pool can last forever in the face of a stubbornly stable supply and a steady excess of offtake out of the pool, shenanigans and antics notwithstanding.

Physical gold is flowing from West to East, into the markets and strong hands of Asia.

Bye bye gold.

The eventual resolution may be quite energetic in terms of price.

…click on the above link to read the rest of the article…

Bill Binney In His Own Words: ‘A Collaborative Conspiracy to Subvert the Government of the US’

August 4, 2018

Bill Binney In His Own Words: ‘A Collaborative Conspiracy to Subvert the Government of the US’

“None are more hopelessly enslaved than those who falsely believe that they are free.”
Johann Wolfgang von Goethe

William Edward Binney is a former highly placed intelligence official with the United States National Security Agency (NSA) turned whistleblower who resigned on October 31, 2001, after more than 30 years with the agency.

He was a high-profile critic of his former employers during the George W. Bush administration, and later criticized the NSA’s data collection policies during the Barack Obama administration.

In 2016, he said the U.S. intelligence community’s assessment that Russia interfered in the 2016 presidential election was false.

Wikipedia, Bill Binney

Because of his analysis in conjunction with Veteran Intelligent Professionals for Sanity (VIPS) that has tended to carefully debunk the Russia Russia narrative, Binney has not been given much airtime on certain channels within the mainstream news media.  So like you I had not heard of him except recently when reading something else.

I found this recent interview to be very interesting.  I am not qualified or sufficiently well-informed to assess it, but listen to it for yourself and see what you think. It would seem to be worth your time at least.

He has some good things to say about Donald Trump and draining the swamp. And you know how I feel about his Presidency. So there must be something there for me to find it worth hearing.

He discussed a number of controversial topics including 9/11, etc.

Binney certainly has the right pedigree to be an informed whistleblower, and he has never been brought to heel or silenced, so he must have something going for him.  He does seem to be extraordinarily well-informed. I would imagine that if it was possible that he would be charged or discredited or smeared.

Stocks and Precious Metals Charts – Three Day Weekend – Times of General Corruption

February 19, 2017

Stocks and Precious Metals Charts – Three Day Weekend – Times of General Corruption

 “And I’ll leave you with one set of numbers that I found today, which is just an absolute for this whole thing. In 2015, Wall Street Bonuses, not regular compensation, bonuses, seven years after they were bailed out with the public purse, totaled $29.4 billion dollars. Total compensation paid to every single person in this country who makes minimum wage totaled $14 billion…

The era of neo-liberalism is over. The era of neo-nationalism has just begun.”
Mark Blyth

“Caesar was swimming in blood, Rome and the whole pagan world was mad.  But those who had had enough of transgression and madness, those who were trampled upon, those whose lives were misery and oppression, all the weighed down, all the sad, all the unfortunate, came to hear the wonderful tidings of God, who out of love for men had given Himself to be crucified and redeem their sins.

When they found a God whom they could love, they had found that which the society of the time could not give any one— happiness and love.”
Henryk Sienkiewicz, Quo Vadis: The Time of Nero

When historians look back on this period of the last forty years and diagnose what went wrong, they might do worse than to conclude that at the root of it was a general failure of character, from the top down.

The replacing of honor and duty with egoism and greed as the most honored of civic virtues was a long and slow process.  It took root and was nurtured in a portion of the population that was served by it during the Reaganomics revolution, but eventually spread to those institutions and groups that had generally provided a bulwark for freedom and justice against the perennial amorality of the greedy.

…click on the above link to read the rest of the article…

About 38% of All the Comex Gold in Hong Kong Left the Warehouses Yesterday

November 14, 2015

About 38% of All the Comex Gold in Hong Kong Left the Warehouses Yesterday

Perhaps it went out for some dim sum.  TTFN, but be right back!

Roughly 21 tonnes, or 685,652 troy ounces of gold in .999 fine kilo bars, was withdrawn, net of a small deposit of 27,328 ounces, from the Brinks warehouse in Hong Kong yesterday.

To put that into some perspective, that is the same amount of all gold in the entire JPM warehouse in the US.

Now compared to the Comex US, in which very little gold bullion actually changes hands or goes anywhere, that is a huge number.  But Hong Kong is typically seeing large inflows and outflows of gold.  Because that is how the precious metals market has been manifesting in Asia since about 2007: not with endless chains of paper just changing hands in a grand game of liar’s poker, but with the physical exchange of bullion.

And most of that bullion leaves the warehouse and does not come right back, as Koos Jansen has explained repeatedly about the operations on the Shanghai Gold Exchange.  It is being accumulated on the mainland, and this probably does not include the PBOC official purchases.

The point of this is that the price discovery in New York is becoming increasingly distinct from the actual physical supply and demand flows of bullion which are taking place in Asia.  As I have said, gold is ‘trading like a modern currency’ without respect to its nature as a commodity bound by physical supply.  The Fed et al. can print money, but they cannot print bullion.  That is the point of it.

And that is a potentially dangerous development, especially with respect to a commodity that is being traded at a leverage in excess of 200:1.  And in the face of shrinking inventories of gold available for delivery at current prices in both New York and London….click on the above link to read the rest of the article…

An Almost Perfect Storm of Incompetence and Felony

November 11, 2015

An Almost Perfect Storm of Incompetence and Felony

“People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason.

But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right.”
John Kenneth Galbraith, Age of Uncertainty

“Misdeeds, once exposed, have no refuge but in audacity. And they have accomplices in those who are fearful in their complicity.”
Tacitus, Annals

I was discussing the markets this morning with my friends Dave and Bill Murphy as we generally do.  This is what I just wrote back in response to a question from Bill.

I read his columns at LeMetropoleCafe.com every day.  His is an amazing crossroads for discussion of things that are interesting about precious metals.  I have been a subscriber since 2000. Dave has a new site at Investment Research Dynamics that is quite good and different since he has a very different background in the heart of darkness as a NYC bond trader from mine as a Bell Lab rat and Silicon Valley roustabout.

We just saw a very historically significant decline in the precious metals in terms of days lower without relief. And we have seen a remarkable rise in the US dollar index against the Euro and the Swiss franc that cannot possibly be good for the real economy of the US, when every other developed nation is trying to devalue their currencies to stimulate their exports and inhibit imports.
I believe that a portion of the gold selling in particular is an effort to knock down the open interest in gold for December. If there was any serious attempt for holders of those contracts to stand for delivery, even JPM, which has been obviously building up its stores of gold to act as the ‘fixer’ in that market, would not be able to cover the demand.

JPM was consistently taking delivery for their house account in gold, and just transferred 70,000+ ounces over from Nova Scotia’s warehouse, from whom they had been taking delivery.

As we know, in the last big delivery month, JPM stepped up with an enormous amount of their gold, 400,000+ ounces, to provide enough real bullion to satisfy the contracts standing for delivery. Even now their inventories remain somewhat depleted.

The dollar has also been soaring, because the Fed is trying to pretend that the US is recovering so that they can raise rates.  A strong dollar and higher rates are very harmful to what is almost undoubtedly a fragile economic recovery in the US.

And it is fantasy to think that the US can somehow go it alone, and continue to improve while the rest of the world is cutting rates because their economies are slowing.

The Fed wants to raise rates for their own policy purposes, so they can cut them, without going overtly negative, when their latest financial bubble starts to collapse, which it may already be doing. They cannot really raise rates in a Presidential election year past June, so they will push ahead, to serve their own purposes, even as they harm the real economy.

There will be another financial crisis as the IMF warned today. There will be a serious dislocation in several financial markets, including the precious metals and the bonds at some point, that will rock the current system to its foundations.

It is a portion of the credibility trap which inhibits any meaningful remedy and reform.

It is an almost perfect storm of incompetence and felony.

A Currency War That Few Economists and Analysts Notice, Much Less Understand

September 23, 2015

A Currency War That Few Economists and Analysts Notice, Much Less Understand

 “The enormous gap between what US leaders do in the world and what Americans think their leaders are doing is one of the great propaganda accomplishments of the dominant political mythology.”

Michael Parenti

Most economists and financial analysts think that ‘currency war’ merely refers to the competitive devaluations that nations sometimes engage in to help boost their domestic economies, as they had done in the 1930’s for example.

 

This time the currency war is a much more profound confrontation of differing agendas revolving around the historically unusual role of the US dollar, based on nothing more than the will of the Federal Reserve and the ‘full faith and credit’ of the US, as the reserve currency for global central banks and international trade.

When a single nation begins to wield such an ‘exorbitant privilege’ to underwrite the speculative excesses of a crony capitalist banking system, and perhaps even more importantly, as an instrument in support of their international policy, one ought not be surprised that the rest of the world will begin to resist it.

A currency must be policy neutral, without regard to any party if it is to be a true medium of exchange.  Can this still be said of the US Dollar as it has been managed, especially since 1990?

As Alan Greenspan once correctly pointed out, but certainly did not heed when he was at the Fed, if a fiat dollar is managed by monetary policy such that it emulates gold, then it will be perceived as fair, and will certainly be above the particular domestic issues or international policy biases of a single nation that de facto wields the reserve currency status.
…click on the above link to read the rest of the article…

Lawrence Wilkerson: Travails of Empire – Oil, Debt, Gold and the Imperial Dollar

August 17, 2015

Lawrence Wilkerson: Travails of Empire – Oil, Debt, Gold and the Imperial Dollar

 “We are imperial, and we are in decline… People are losing confidence in the Empire.”
This is the key theme of Larry Wilkerson’s presentation.  He never really questions whether empire is good or bad, sustainable or not, and at what costs.  At least he does not so in the same manner as that great analyst of empire Chalmers Johnson.It is important to understand what people who are in and near positions of power are thinking if you wish to understand what they are doing, and what they are likely to do.  What ought to be done is another matter.

Wilkerson is a Republican establishment insider who has served for many years in the military and the State Department. Here he is giving about a 40 minute presentation to the Centre For International Governance in Canada in 2014.

I find his point of view of things interesting and revealing, even on those points where I may not agree with his perspective.  There also seem to be some internal inconsistencies in this thinking.

But what makes his perspective important is that it represents a mainstream view of many professional politicians and ‘the Establishment’ in America. Not the hard right of the Republican party, but much of what constitutes the recurring political establishment of the US.

As I have discussed here before, I do not particularly care so much if a trading indicator has a fundamental basis in reality, as long as enough people believe in and act on it. Then it is worth watching as self-fulfilling prophecy.  And the same can be said of political and economic memes.

At minute 48:00 Wilkerson gives a response to a question about the growing US debt and of the role of the petrodollar in the Empire, and the efforts by others to ‘undermine it’ by replacing it.  This is his ‘greatest fear.’
…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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