freefallThe Doc & Eric Dubin break down the latest cartel smash-down of the metals, discussing:

  • Is a crash to new lows imminent, or did we see the bottom Friday afternoon as gold broke below $1250 and silver below 18.70?
  • Retail demand EXPLODES– SDBullion saw largest single day sales volume EVER Friday as nearly 20,000 oz of physical silver were withdrawn from the market
  • Russia, Kazakhstan, & Belarus sign Eurasian Economic Union Agreement- accelerate plans to launch “gold” Altyn currency to replace the USD in trade! 
  • GOFO rates & options expiration- implications for the metals

 Full Coverage of the Latest PM Take-down is Below With This Week’s SD Metals & Markets!

Has the next major economic downturn already started?
As you will read about below, major retailers had an absolutely dreadful start to 2014 and home sales are declining just as they did back in 2007 before the last financial crisis.  Meanwhile, the U.S. economy continues to lose more good jobs and 20 percent of all U.S. families do not have a single member that is employed at this point.  2014 is turning out to be eerily similar to 2007 in so many ways, but most people are not paying attention.

BubbleThe global derivatives bubble is now 20 percent bigger than it was just before the last great financial crisis struck in 2008
Let that sink in for a moment.
JPMorgan’s derivative exposure alone has ballooned to over $70 TRILLION (mainly interest rate swaps).

We are witnessing a financial bubble far larger than anything the world has ever seen, and when it finally bursts it is going to be a complete and utter nightmare for the financial system of the planet. 
A financial crisis far greater than what we experienced in 2008 is coming, and it is going to shock the world.

gold-nanex-feb2014_Dec-6-2013-NFP_smashLast week gold and silver fell sharply. The principal reason was the expiry of the June gold future contract on Comex, whose open interest has unwound 120,000 contracts in the last six trading sessions.
Some of this has been rolled forward, but Open Interest still took a bad knock as shown in the chart below.

cashlessWill Israel be the first cashless society on the entire planet? 
A committee chaired by Israeli Prime Minister Benjamin Netanyahu’s chief of staff has come up with a three phase plan to “all but do away with cash transactions in Israel”.

The interview you are about to hear contains some of the most shocking information we’ve ever heard.  Our friend and fellow precious metals researcher Road to Roota’s Bix Weir was recently interviewed by History Channel 2 for THREE HOURS as part of their new documentary style series America’s Book of Secrets.  The information Bix shared with them on camera was to be aired in the episode titled America’s Book of Secrets: Secret Underground.  What Bix said on camera was so shocking, after the interview the entire crew told him that they were going to pull all funds out of their bank accounts.
But when Book of Secrets: Secret Underground aired, Bix had been cut from the show — Not one word Bix shared with them was allowed to be broadcast. But you can know it all right now…

bulgeThe detection of the rapid rise in USTreasury Bonds in the Belgium official central bank account has aroused broad and deep suspicions.
The TIC report indicated that Russia indeed dumped a record $26 billion in January, equal to 20% of all of its holdings, bringing its post-March total to just over $100 billion.
The question must be raised whether a hidden party has joined Russia in the dumping process.
Clearly, the Belgium Bulge indicates a late stage of collapse.  The game is fast changing, using big hidden channels in the monetary war. 
History might be repeating itself with a financial war-front Battle of the Belgium Bulge, a pincer movement to capture Western gold and form the Anti-USD Central Bank.
he Belgium Bulge means a big Sovereign Type Entity is in the Game, who refuses to take losses but instead continues to post collateral with a goal toward taking Gold Delivery. 

When American explorers first traveled through north Texas, Oklahoma and Kansas, they referred to it as “the Great American Desert” and they doubted that anyone would ever be able to farm it.  But as history has shown, when that area gets plenty of precipitation the farming is actually quite good.  Unfortunately, the region is now in the midst of a devastating multi-year drought which never seems to end.
The truth is that we are now in the midst of the worst drought crisis since the days of the Great Depression.

Historic Horn Silver MineMexico has been a popular destination for mining companies seeking out their fortunes amidst gold’s secular bull market.
And considering the huge lack of modern exploration across its rich precious-metals belts, some of the first movers like Alamos Gold have found smashing success.

stormThe collapse of the monetary system awaits the world in the near future, says financial expert James Rickards. Russia and China’s desire to rid the US dollar of its global reserve currency status is an early sign of the “increasingly inevitable” crisis.
China has three trillion dollars, but they are buying gold as fast as they can. China worries that the US is going to devalue the dollar through inflation so they want to have a hedge if the dollar goes down, so the gold will go up.
The best-selling author writes that the “linchpin” of the collapse is the approaching failure of the dollar since it is at the foundation of the system. Powerful countries such as Russia, China, Iran, and India do not rely on the US in their national security and would benefit from the US economy being weaker, thus desiring to break free from the dollar standard.
He elaborates that the dual collapse looks increasingly inevitable.  The mistakes have already been made. The instability is already in the system. We’re just waiting for that catalyst that I call the snowflake that starts the avalanche.”

Eurasian Economic UnionAs I have reported on April 24: Introducing the Altyn: Russia Accelerates Plans to Launch New “Gold” Eurasian Currency , the members of the Eurasian Economic Space, Russia, Belarus and Kazakhstan have accelerated the formation of the Eurasian Economic Union-  A union that can be compared to the European Union.
Today President of Russia Vladimir Putin, President of Kazakhstan Nursultan Nazarbayev and President of Belarus Alexander Lukashenko signed the Agreement on the Eurasian Economic Union in Astana, the capital of Kazakhstan, where the Supreme Eurasian Economic Council met.
The EEU is another clear example of increasing cooperation on the Asian continent and the formation of power blocks, underlining the descent of the US as the world superpower

bondsThe Federal Reserve has intentionally lowered interest rates to such an extent that investors feel they have no choice but to chase the riskiest assets just to catch a few additional basis points.
Now we see that junk borrowers are increasingly using tactics such as “add-backs” in order to make earnings look better.
This allows low quality borrowers to borrow, while at the same time providing an excuse for investors to buy garbage.
Think I’m exaggerating the problem? 

DroneBig brother may be watching and listening more closely than ever — as the NYPD considers using drones and other gizmos to fight crime in the city.
Police Commissioner Bill Bratton said the unmanned machines equipped with cameras and tiny microphones could help spy on crime hotspots  like housing projects, where shootings are up about 32% this year.
“Myself, I’m supportive of the concept of drones, not only for police but for public safety in general,” Bratton said Tuesday. “It’s something that we actively keep looking at.”
John Miller, the NYPD’s head of intelligence, said cops have been studying flying drones. They’re looking atwhat’s on the market, what’s available.”
Bratton sat on the board of ShotSpotter, a company that makes the detectors, before returning to his post as the city’s top cop in January.  He said the bidding process hasn’t begun.

Seem as if “what’s available” may just happen to be produced by a company the police chief sat on the board of as recently as January.
How convenient. 

dollarAs we can see power shifting from West to East on a daily basis at the current time of writing, in the fourth quarter of this year the Shanghai Gold Exchange (SGE) will launch an international board in the Shanghai Free Trade Zone (FTZ) for investors worldwide to trade gold spot contracts denominated in renminbi.
The purpose is not only becoming the world’s primary physical gold market but also to increase pricing power and internationalize the renminbi.
The SGE international board will be another blow to the US dollar hegemony, as more people around the world will hold and use the renminbi for trading gold.

saudi goldChinese gold imports dropped for the third month in a row in April, according to new data released by the Hong Kong Census and Statistics Department.  Net gold imports from Hong Kong amounted to 67,04 tonnes, the lowest volume in more than a year.
A Shanghai Gold Trader stated:  Banks have adequate stocks from imports earlier in the year, and in some cases, even last year, that they are waiting to dispose of.   Any new imports will have to wait until they clear the backlog”.

However year to date, the Chinese gold imports from Hong Kong are 347 tonnes, which is more than the 294 tonnes after the first four months of last year.

roofIn the past, when you could get 6 or 7 percent interest on a CD, and inflation was 2 or 3 percent, you were still ahead of the game. But now you get a half a percent on your CD and inflation is 2, 3, 4, 5, whatever it actually is – you’re losing. You can’t win. And so as more people wake up to this reality, the demand for gold is just going to explode worldwide.  And the price of gold is going to go through the roof.”  -Peter Schiff

Fed whistle blower“For lack of a better term, you’ve got an organized crime syndicate,” a whistleblower who works in the Texas VA told The Daily Beast. “People up on top are suddenly afraid they may actually be prosecuted and they’re pressuring the little guys down below to cover it all up.”
What’s worse, the documents show the wrongdoing going unpunished for years, even after it was repeatedly reported to local and national VA authorities….

Negative GOFO is now the norm, not the exception.  In fact, since the price bottom at $1180 on June 28th of last year, there have been 229 market days. Of those days, GOFO has been negative for 133 of them or 58% of the time!  GOFO has been in positive territory just 42% of the time or 96 days.  For the previous 24.5 years, GOFO had only been negative for just 7 days.
Now, after the massive and counter-intuitive price slam, it’s negative nearly 60% of the time?!?
The “new normal” of negative GOFO is, in fact, symptomatic of extreme physical tightness and empty vaults in London.  Knowing this and the clear correlation of GOFO with price (that we will demonstrate below), you should adjust your trading strategies accordingly. For those of us who are stacking only, persistently negative GOFO is just another clue that the end of the fractional reserve bullion banking system is near. Whether or not that “end” comes in 2014 or 2015 matters little.  It is coming.

Chinese gold trade lawsIn the beginning of May I wrote an extensive post on why round tripping, also referred to as a Chinese Commodity Financing Deal, does not influence the amount of gold withdrawn from the vaults of the Shanghai Gold Exchange, which equals Chinese wholesale demand.
Round tripping merely inflates the import and export of gold between a Customs Specially Supervised Area in the mainland, usually Shenzhen, and foreign countries, usually Hong Kong.
What I didn’t cover in that post was the amount of physical gold tied up in round tripping. Though this does not have anything to do with domestic Chinese gold demand, it can be important because when these financing deals are unwound the gold is released as physical supply.
So how much gold is there tied up in round tripping?

PM Fund manager Dave Kranzler joins the show, discussing silver and more specifically the “fix” for both gold and silver.
Does the fix play a role in the pricing? Not really, it hasn’t since the advent of electronic contracts being generated twenty-three hours a day six days a week.   Does anyone really think the Rothschilds are going to walk away from the massive profits they have been raking in for the past two-three DECADES?!   Seriously? Not going to happen.
Naked Shorting, check. High-frequency trading, check. Profits on the long and short side, check.
Daily fix, who cares?

Statistically, gold and silver prices closely follow each other.
But what is more important is the ratio between silver and gold and the trend of that ratio.

The 30 year gold/silver ratio chart reveals that the silver-to-gold ratio is currently priced at the low end of the range, long-term silver prices are gradually increasing relative to gold, and a price explosion could occur at any time!