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The Doc & Eric Dubin break down the action in the markets this week, & discuss:

  • Gold completes a golden cross last Friday, the cartel promptly smashes gold & silver under $1300 & $20 to dampen sentiment 
  • Shortage developing in US Gold Eagles as the Authorized Purchasers collectively rebel against the US Mint & halt Gold Eagle purchases- The Doc breaks the story and explains why on the show
  • Banker deaths roll on as JPMorgan’s top commercial bankruptcy lawyer killed and thrown 150 ft by a speeding minivan
  • The Goldman/Zerohedge narrative that Chinese hedging caused gold’s 2013 price crash- why the numbers don’t add up

 The SD Weekly Metals & Markets With The Doc & Eric Dubin is below:



 

 

The New Cold War - WilliamBanzai7
Source: William Banzai7

Janet Yellen didn’t exactly yell during the last FOMC release, but the financial press ran with the idea that continued tapering will depress the price of gold and silver going forward.  The mainstream media would have us believe precious metals are simply selling off after a momentum run.  It’s true that we did see a quick snap back from December lows.  Take a look at the following GLD chart, and how just after reaching 70 on a relative strength index, the sell-off began:

GLD_March_27_2014

It’s actually not all that uncommon to see sustained readings above 70 and sideways price moves to “digest” over-bought conditions.  As you can see above, that’s what happened with gold last month, when we were still fresh off the slaughter of 2013 and the line of investors and speculators holding bags of capital seeking increased exposure ahead of a reversion to the mean was far from being satiated (i.e., representing a pool of capital big enough to overcome the cartel, and further supported by Iraq’s central bank buying 36 metric tons of physical gold in early March, to which Kitco unsurprisingly spins as a negative on a going forward basis).

Fast forward to the last couple of weeks.  After gold flirted with $1,400, the fast money gang was ready to take profits.  All it took was a relatively small push by the cartel to get downside momentum moving.  It’s also important to underscore that this week we have been moving through COMEX contract settlement for near-month gold contracts.  It was important for the powers that be to shake longs out of their in the money positions.  Time and again, we’ve seen this pattern.  Paging Bloomberg News and Professor Rosa Abrantes-Metz and Albert Metz:  a study of gold vis-a-vis COMEX expiration should be the subject of your next research paper.

If anything, the fundamental case for owning gold and silver has grown stronger in the last three weeks.  We have rising geopolitical tensions, more widespread understanding of an epic credit bubble in China, a housing market that’s rolling over in the United States, ongoing negotiations to rejigger the IMF system and the US dollar’s weighting, continuing demand for gold exceeding mine supply, and many other dynamics.  We’ve seen a modest reversion to the mean following the 2013 crash.  A “normal” market with this sort of  set-up would have more likely seen sideways “digestion” of over-bought conditions – just like February.  But gold and silver are political metals.

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As Low As $2.99 Over Spot!

 

Vampire Squid:  China Behind 2013 Gold Crash  

Goldman Sachs would have you believe the 2013 gold crash was the result of China hedging its physical gold.  This thinking, and the general thesis that China has been the main actor behind gold price suppression seems to be attracting many converts.  At least when it comes to the Vampire Squid message to the Muppet brigade, logic fails.  The volume of contracts involved with the 2013 smashing was an order of magnitude greater than what would be required to hedge China’s physical gold and gold acquisitions.  Furthermore, China isn’t buying to have a 6 month trading position.  They’re buying on a 50+ year generational timeline.  Think about it.  Why the heck would China want to hedge — and certainly, what would be the point of hedging with short- and intermediate-term COMEX contracts?  This is the most obvious fact that no one seems to have thought to address and conflating what goes on with China’s shadow banking system credit issuance backed up by warehoused commodity stockpiles is over-stating the linkage between gold and said shadow banking credit activity.  Copper and iron ore?  That’s a different story…

In any event, if you evaluate the 2013 crash, you’ll see that the key catalyst period was April 12 through April 15, when over 400 metric tons of paper gold was smashed through a few minutes of trading during that Friday access market period and later, early Monday morning.  While China did buy quite a bit of gold in March, 2013 any such hedging related to that buying would have taken place well before the April 12-15 drive-by shooting.  Furthermore, the roughly 1,000 metric tons of ETF-sourced gold was purchased primarily out of GLD share tendering AFTER the paper price was bombed.  That ETF gold flowed primarily to China.  If you simply place these events on a chronological timeline, it’s clear that it would be crazy for China to try to hedge purchases they had yet to make!  The physical gold China was acquiring out of ETF and COMEX vaults was liberated during and after the initial price smashing.  A great deal of the physical wasn’t available for purchase until *after* the smash.  Sometimes sticking with very basic facts, logic and a forensic timeline is all one needs to turn Vampire Squid intellectual masturbation (propaganda?) on its head.  If you want to dive deeper, we highly recommend an article Dave Kranzler penned:  click here.

JPM Lawyer Dead:

Another person in the banking industry has met an untimely death.  If anyone in our audience works with actuarial analysis in the insurance industry related to life insurance policies formulated for high level executives and might have insight on historical probability baseline data relevant to the seemingly unusual high number of bankers meeting untimely deaths, email me.  I can be reached by joining “Eric” and “TheNewsDoctors.com to send an email.  I’d like to get a handle on just how usual these events are.

Ukraine Update:

We produced today’s show on Thursday.  But in keeping with our tip for quality weekend reading and viewing, I highly recommend Stefan Molyneux’s interview with Dr. Paul Craig Roberts.  They focus primarily on the Ukraine and Russia.  Click here – it’s well worth your time.

See you next week — Eric Dubin

SDB

 

 

 

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  1. Silver Slicker  Maybe someone could write a program called the Manipulation Index. Designed to predict all forms of commodity manipulation it could be traded under the symbol  MAX.
    CUSIP symbol is 1SCHMUCKU
     If it proves successful the writer could market it to Bloombeerg,  sell derivatives, rehypothecate the profits,  naked short it and become a billionaire overnight when he sells it to a TBTF bank or the CME
     That might sound ridiculous unless you see an IPO for Kandy Krush go off at $22 and make it’s creator a billionaire, WhatApp sell for $19 billion to FaCIAbook and Osculus-Succubus is bought  by *uckerberg for $2 billion
    Yeah, that’ll happen.
    We sit here dodging HFT minivans driven by insane bankers, watching our precious metals being driven back into the ground and wonder WhatsNXT?.  
    If you figure out how write a software program for that one, youll  sell it for a billion.  
    I’m trading the WTF index in the meantime

    • @AGXIIK
       
      “Silver Slicker  Maybe someone could write a program called the Manipulation Index. Designed to predict all forms of commodity manipulation it could be traded under the symbol  MAX.”
       
      I favor the ticker symbol of FAHQ.  Yeah, say it slowly a few times.  ;-)
       
      “If it proves successful the writer could market it to Bloombeerg,  sell derivatives, rehypothecate the profits,  naked short it and become a billionaire overnight when he sells it to a TBTF bank or the CME”
       
      What surprises me is that the big names in the physical gold and silver selling business do not commission an algo that watches the gold and silver markets for manipulation as it develops and then buys / sells put and call options as needed to milk it for all the money they can get.  The big boys will have their eyes firmly on the price suppression ball and might not notice a little ferret nibbling around the edges of their BIG nest-egg.  It is entirely possible that such an algo, properly funded, could become the perfect counter-balance to all this manipulation.
       
      “We sit here dodging HFT minivans driven by insane bankers…”
       
      Oh, no, my friend.  Banksters do not DRIVE speeding minivans.  They’re too busy becoming hood ornaments for them!
       
      “I’m trading the WTF index in the meantime”
       
      I know that one.  It’s basically an entire market index.  X-/
       

    • Until we see the death penalty arrive for theses parasites, sociopaths and scumbags, nothing much will change. They certainly deserve to die for their crimes too. It is clearly treasonous, by any stretch of the imagination.

    • Very interesting article; glad to see it was very harsh in its tone against Goldman. If one believes in karma and that what goes around comes around these scumbags have a terrible future to look forward to. The level of disgust I have for the “too big to fail” banks cannot be put into words. 

  2. “The volume of contracts involved with the 2013 smashing was an order of magnitude greater than what would be required to hedge China’s physical gold and gold acquisitions.  Furthermore, China isn’t buying to have a 6 month trading position.  They’re buying on a 50+ year generational timeline.  Think about it.  Why the heck would China want to hedge — and certainly, what would be the point of hedging with short- and intermediate-term COMEX contracts?”
     
    The problem with the financial media is that they are ALL looking at China as an investor in gold.  Most of us here recognize that China is not an investor but a stacker.  The ultimate stacker, in fact.  They are buying gold and LOTS of it.  They have no interest in paper gold unless perhaps it can be used as a financial weapon to suit their purposes.  I am convinced that it can and that they will use it as such at some point.  I do not know what interest that would be but we can all bet that it will serve China’s needs and those of the CCP.  Coincidentally, this will also serve the needs of the Chinese people for a true store of value in which to put their wealth for long-term savings.  We know that fiat is not money because it is not a store of value. The Chinese probably know that as well, which is why they are cashing out of paper and converting it into gold.  
     
    It will be VERY interesting if the Chinese do not have as much gold as they want when the market becomes really tight.  Will they then switch to silver?  Perhaps.  Silver was MONEY in China for a VERY long time, so the recognition that the Chinese people have for silver as money is still strong.  They also know that paper currencies have been used a number of times in China and all ended in the same way… bankrupt.  It is likely that they do not want to take that same ride ever again.  They are very much aware of their history.  They have an ancient and venerable culture that has prized silver as a medium of exchange and a store of value for a very long time.  Them returning to that in large numbers would be completely in character.  When they do, their large appetite for the small silver market could cause a serious rise in silver prices.  Got REAL money?
     

  3. Shouldn’t this date stuff be a non issue?  2014 or 2013 isn’t going to matter to most stackers, in fact a cheap 2013 premium might be seen as a bonus?  just doesn’t fire me up to much, in fact signals overproduction of bullion if the dealers don’t even want to touch the stuff.
     
     

    • Some people collect bullion coins by the year, so maybe it matters to them.  I couldn’t care less what the date on a bullion coin is.  An ounce or Ag or Au is STILL an oz. of Ag or Au!  :-)
       

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