Three reasons we’re one match away from a 5-alarm fire

SD Exclusive

We know the demand in the United States is low. We have been talking about abysmal US Mint Gold Eagle sales ad nauseum.  Q2 data is coming in, however, and there are 3 immediate causes for concern. Follow along with the snip at the bottom for reference.

  1. US Demand was “exceptionally weak” in Q2. OK. But say that differently and hash out the meaning. If US Demand picks up somewhat, there are gonna be BIG problems for Team Gold Price Suppression.  If we may don til foil for a quick moment, is it no coincidence that every day the stock market charges higher and  higher? Ok. Take off the tin foil and think about it. If there is a limit to physical supply, which there is, the Fed and the ESF, with their ability to print as much money as possible to buy up as many stocks as possible, can contain price by pushing investors into certain asset classes over others. In other words, If a person walks into a pet store to buy a parrot, only to find a deal on parakeets that can’t be resisted, well then, we know which choice will be made.
  2. Chinese and Indian combined bar and coin demand up massively over Q2 2016. Demand is indeed robust, you just have to know where to look for it. If the market finds demand pick up in the US, see point 1. Things could dry up on the quick.
  3. Worldwide gold ETF inflows rise 56t on the first half of the year. And we have learned to not take the official numbers at face value. We are told they have increased this amount, but just because I write an extra $1,300 in my checkbook register doesn’t mean it’s there. Also on the heels of this point is that Europe DOMINATED the ETF demand at over 76% of inflows. Since we are showing massive increases in physical gold demand in the east over this time last year, see point 1 again. The slightest increase in demand from either North America or Europe and the retail market could get tight on the quick.

Those are only three points. There are many more, but any one of those could be cause for the central banks to lose control of their ability to contain. And these are World Gold Council numbers, and as such, we know their suspect if now downright statistically fabricated nonsense.

Which leads us to ask, If demand is picking up year over year, and they are admitting to 26% and 56% bar and coin demand from two countries alone, just how much data are they leaving out in order to not sound the 5-alarm fire?

 

 

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  1. Most on here know that the lame stream media isn’t satisfied to just print or show us the news anymore, they also want to MAKE the news.  One of their favorite tools for this is lying by omission.  They simply fail to report any news that refutes their left-wing narrative.  They also choose specific words that either make their side of the story more believable or someone else’s side less believable.  Such things are often backed up by photos taken at specific angles to “prove” their point about this or that news story when an objective photo of the same event shows something entirely different.  Crowds supporting some leftist cause can be made to look MUCH bigger than they are while crowds supporting right wing causes can be made to look MUCH smaller than they are.  150 leftists doing a protest then becomes equal in stature to 10,000 conservatives doing a counter protest or demonstration.  BUT THAT ISN’T WHAT HAPPENED.  It’s what the media droids WANT us to THINK happened when it didn’t.  The media today if rife with this sort of nonsense, which is why they have so little credibility.  They moan and complain about that sometimes but they have pretty much earned every bit of criticism of this kind via their own actions.

     

    • Thanks, guys.  I call ’em as I see ’em.  🙂

      Most on here do the same, including both of you.

       

      On a totally unrelated topic… I rented the movie “GOLD” from Redbox last night.  Actually, it was my birthday and they sent me a code for a free movie, so what the hey?  Anyway, this movie was OK but it could have been MUCH better.  Matthew McConaughey’s character was not at all what he usually plays, so that was kind of a hard sell.  The theme and plot of the movie were good, though, and it did have a nice twist at the end.  I guess that my main complaint about it is that it could have been a MUCH better movie and just wasn’t.  I would rate it as 2 stars.  I feel for those who paid $8-10 to see it in the theaters, though.

       

    • The Pump… but beware of the Dump.  The big boys can buy and sell too.   In 1970, I could have bought a new truck for $3,250.   Best of luck to you… Seriously.   All assets valued in dollars should go up as the dollar inflates.

    • Hmm…and the only thing tangible behind this digital fiat money is…….???   old school fiat money!!  Oh…and a few servers, switches, etc….  This insanity reminds me of the Tulip bulb craze of the Netherlands and February 1637 is creeping up on them.  I’d would certainly like to know what these proud Bitcoin owners will do if its network gets slammed with relentless hacks, DOS, theft, etc…  Once that sky high parabolic bubble pig gets its poke, its price will drop faster than a lead balloon.  I have doubts anyone will get out with their hides.

    • Tulips here!  Get your tulips here!  Only 20,000 guilders for this rare and unique species!

       

      This was the call heard in Amsterdam just before they heard a giant POP! and a lot of people screaming the Dutch equivalent of, “Oh, S#|+!”.

       

      History repeats… sort of… but the bottom line is still the bottom line.  Manias are always hot and heavy… for a while… and then they go SPLAT!  Don’t be in them when they go SPLAT! or you WILL lose your @$$.  😉

       

  2. Silver is not money.  It’s an industrial metal.

    Gold is money, but they can create an unlimited amount of paper gold, because most people do not in fact want physical delivery of gold, but merely to invest in its currency price.  They can thereby send gold down to its cost of production, forever.

     

    Sorry guys, you lost.  Game over.

    • Either a troll or one unfortunate suffering from a terminal case of SFB Syndrome.
      (That’s Sh*t For Brains). When do you start working for CNN?

       

       

    • Sorry pal,  silver has been both an industrial metal AND money.  I see history is no friend of yours.  In fact, when the Bitcoin bubble pops, guess where all the money will go that hasn’t evaporated?  Yep, precious metals and would you care to imagine how fast they will rocket upward in price?

    • Agree with Vlad on this.  Silver has been money for 5,000+ years… longer than gold has been money, in fact.  The very word “silver” in multiple languages means “money”.  The fact that silver is not used officially as money was a political decision of the BIG spenders who MUST spend more than their nations produce, so cannot use REAL money and must instead use something that they can pull out of their butts at need.  Paper works for them.  Honest folks prefer honest money because honest money systems do not have inflation built into them and fiat paper does.  This too is why the banksters and politicians prefer dishonest money.

       

  3. On a subject dear to our hearts… On Zero Hedge.   

     
    Judge Jeanine Posts Epic Rant   
      
    Is Judge Jeanine the only one with the [email protected]$ to cover this?  
         
    http://www.zerohedge.com/news/2017-08-06/judge-jeanine-posts-epic-rant-calls-grand-jury-lynch-clinton-and-eric-holder  
     
      

    • If there was any question that the liberal-ass Democrats, the media, and too much of our FBI, DOJ, & CIA were not and are not corrupt to the core then you have been asleep for years Rip Van Winkle.  I just hope that Donald Trump will keep his promise to the TRUE American citizens that elected him and DRAIN THE CORRUPT LYING SWAMP of ALL of it’s greedy slithering lizards.

      I don’t guess there is any question as to how I feel.  A big ‘thank you’ to Judge Jeanine for always speaking out and going after the bad guys.

    • This Judge is nothing more than a MSM pundit and there to promote the “us against them” mentality.  It’s all designed to keep the general public angry, frustrated and fighting amongst themselves… divide and conquer.   I’ve learned to ignore all of it/them… my life has become more productive and a lot less stressful.

    • @jbwhitco

       

      IMO, there is no draining of the swamp.  It’s too vast, too deep, too corrupt, and too rich to fight.  A better move would be to pull out and… nuke it from orbit.  It’s the only way to be sure.  😉

       

      But if Mr. Trump wants to attempt to drain the swamp, he needs to immediately fire every single Clintonista and Obamunist ostensibly working for the US Gov.  These people are actively working to undermine and destroy both him and his presidency, not to mention the country itself.  As has been said of DC, “You’re either on offense or you’re on defense.  It’s better to be on offense”.   Maybe it’s about time the tables were turned on this scum?  We need to quit having one set of rules for us and another set for the lefto-communists.  Round up their leadership and put them in the damned FEMA camps… or Gitmo.  Either would work.  With that done, we just might be able to save this country from the utter stupidity and duplicity of these morons.

       

  4. So we’re just a match away from a conflagration. Always just this close, almost there, not quite. This bullshits like that chick who keeps tellin yazz you’re this close to gettin in her pants, but just one more thinghas to happen. In the meantime, her sister is tellin you it’s all yours now if you dump that mess.

    Meanwhile, PMs are going to continue to get pounded. I’m thinking Au tests 1200, Ag goes and sees what it’s like Ag 14….

  5. There is just like so much Gold on the planet that you can’t even shake a stick at it. There is so much Gold that people are literally eating it.

     

     

    It’s a matter of public record in regards to my sentiments about Gold.  That is you can tank it to zero.  It don’t bother me.  I have some Gold. It’s pretty.  I’m thinking it’ll be better to grab the bull by the horns with Silver.  That’s just me.

  6. This is for all of the people who just love to kick precious metal fans and who continually love to wave their imaginary crypto-paper in our faces.

    WE DON’T CARE.

    We are precious metal masochists.   We like being kicked when we’re down.   There is absolutely nothing you can do to persuade us that we are wrong.    3000+ years tells us we are right.

    One day (hopefully soon) when the dust has settled and the ‘paper boys’ of the Comex and Crypto-currency World are still scratching their heads and wondering how nothing of value became for a moment valuable and then back to nothing….. we will be walking proud, head held high, showing our scars received during our long battle against the ‘powers that be’ and the annoying insect detractors.

    Good grief!   Did I just say all of that?

     

    • Yes @GBS, you sure did.  But here’s another facet of this.  Some of us really don’t give a damn what the nay-sayers have to say about owning some PMs.  If they don’t want to own any PMs, that’s their decision to make and they are welcome to it.  We have thought this through carefully, have purchased what we deem necessary as adequate financial insurance, and are as ready for what comes next as anyone can be.  Whether that satisfies others does not matter to us AT ALL.  When one is right, there is no need for that to be recognized by others who don’t even know that it is possible, let alone likely, for the S to actually HTF.

       

  7. This is my amateur attempt at chart analysis.

    Looking at the daily chart, silver has been stuck in a downward channel since April, bumping between upper and lower bands, making lower highs and lower lows. If it continues as it is, it will drop to $14-50 before bouncing up again off the lower band.

    As alway happens, I expect at some point this pattern will break down. Some significant change in sentiment will force it to break out either to the up or down side.

    Given the cost of production, I doubt there is much downside from $14-50 but that is just my gut feeling. Short term I am concerned that a temporary recovery of the $ will drive it lower (as we saw on Friday).

     

     

     

    • The cost of production is nowhere near current prices as this nonsense is usually promoted by those who market metals to consumers. Take Barrick’s latest Q2 filings. They made billions and prices were lower. Their overall cost to mine gold is $726 from their own statement. If silver is mine as a by product when you figure in the overall cost of all metals that are mined the cost is a little over $2. The pure silver miners who are not many have cost a little over $7. Of course when you read mining reports from financial analyst from investment firms who follow the industry their mining cost are in line with Barricks with the highest cost reported by those older mines and these are a little over $700 to $900. People has to understand that those who market metals to consumers are not professional traders. They are simply salesmen who use and say anything to market metals and most is not grounded in any economic or financial reality.

      Gold is not money and like any other asset its true value cannot be realized until it is converted into a currency. Gold is a long term store of value and that is it. Silver on the other hand is one of the largest scams on the net. I saw one post on the net a few months back claiming silver should be at $940 based on US debt as if this has anything to do with the price. Total absurdity. Silver is not used much as a monetary metal by governments except to mint collectable coins. The monetary demand has become to small to effect price and this small demand can never offset the drop in industrial demand. Depending on what industry sources you believe 70 to 89% of demand is industrial, manufacturing and retail jewelry. This is why low prices are needed and the price will never rise significantly but gradually with inflation as mining cost increase over time. The price forecast from $200 to $840 is just total nonsense.

    • Summary
      Silver mining companies have succeeded in lowering AISC towards $15/ounce.
      High silver premiums are evidence of difficulty in lowering AISC further.
      Bottoming oil, reverse in U.S. dollar strength and continuing silver deficit will support higher silver prices.

      In Q1’17, the top 34 GDX components reporting AISC averaged a level of only $878 per ounce for gold.  That’s just 0.3% higher than Q4’16’s $875 despite sharply-lower production! The major gold miners are growing their operational efficiencies, which will lead to much-bigger profits growth in coming quarters as both gold prices and production levels mean revert higher. Stable AISC are super-bullish fundamentally for this sector.

      According to The World Gold Council’s Q1 GDT report, world mine production fell 9.6% QoQ in Q1’17.
      Some silver mines are stock piling the ore due to low prices. It has an impact on their financials and stock prices but it’s temporary. The stock price takes a hit, but people that know the company’s strategy look at it as an opportunity to acquire the shares.

  8. I would like to understand the cost of production better and what contributes to it. The oil price is certainly a contributor but the oil price alone is not enough on its own.

    In July 2008 oil hit S150 (before crashing) where silver was $17-80. Today oil is only $50.

    • Here are some of the things that impact PM producer’s costs.
      geological location, permits, safety, leases, taxes, exchange rates, labour costs, labour disputes, access roads, available energy, type of mills, extraction method, type of rock to process, depth of ore body, terrain, weather, equipment maintenance, drilling, mapping, lab costs, decommissioning equipment, unscheduled maintenance, equipment breakdowns, hazardous waste disposal, chemicals,  mine reclamation, administration, construction expenses, exploration.

      All-in sustaining costs are the most-important gold-mining cost metric by far for investors, revealing gold miners’ true operating profitability.

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