As We Watch Paint Dry Waiting For The Fed…

fedThis will blow you away:


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Submitted by Craig Hemke, TFMetals

Another one of Mother Fellen’s Tea & Doily Parties begins today amidst a haze of economic collapse and negative interest rates. Just last week, Mother held three unscheduled meetings with her Goons and she even visited the brain trust at The White House. So the question becomes, might Mother have some surprises up her sleeve when the Fedlines are released tomorrow?

I mean, for crying in a bucket. At some point there has to be some sort of mainstream acknowledgement of just how lousy things are…right?

Seriously, how can this stuff be continually downplayed and overlooked? How many goons and shills can CNBS and BBG roll onto their airwaves to disingenuously assure everyone that “Q2 will surely see a rebound”? The Economic Disaster du Jour comes to us this morning listed as Durable Goods for the month of March:

But check this…Even the ZH headline fails to tell the entire story. ZH states: “Core Durable Goods Tumble For 14th Month, Longest Non-Recessionary Stretch In 60 Years”. Well, why would that be? How could we have this current “non-recessionary stretch”? Remember the traditional measure of a recession is two, consecutive quarters of negative GDP growth. Well, back in the day…say over the first 55 years or so…you could actually put some amount of trust in the GDP measurements. But now, the GDP numbers are all double and even triple seasonally-adjusted to make them look better! THAT’S how you get “The Longest Non-Recessionary Stretch In 60 Years”! You never get data that shows a recession because you keep fudging and inflating the data! See how that works?!?

(Keep in mind that the first guesstimate of Q1 GDP will be released on Thursday at 8:30 EDT. Recall that the most recent Atlanta Fed GDPnow is just +0.3%…even with the double adjustments!)

And into this ongoing disaster Mother convenes another Tea & Doily party today. No one is expecting much and the odds of a “rate hike” are essentially zero. However, LIESman will still breathlessly analyze each Fedline word-for-word when they’re announced and who knows what slight punctuation changes might wiggle the algos. But I do want you to at least ponder the possibility of some sort of surprise. 

Keep in mind that ole Mother held those three, previously-unscheduled meetings with her Goons last week. Additionally, last Monday, she rushed off to The White House to meet Woody and Plugs. Now, of course, we have no freaking idea what all of this might have been about…this being, as you know, the most transparent administration in history. BUT…what if these meetings were about a pending reversal of course? Maybe, instead of “two more rate hikes in 2016”, Mother was informing The Buffoon Brothers of her plans to ease rates and restart QE, if necessary? What if this is alluded to in the Fedlines tomorrow? I don’t know…I’m just sayin. I’ll guess we’ll just have to wait and see. In the meantime, I saw in the press release that Mother had already stitched this little beauty earlier today. She really has a gift…

Given that today is option expiration for the May silver contract, it should continue to come as no surprise that silver is pinned near $17, given that the small “sweet spot”  for expiry is right near there, too. I still haven’t made any moves…no options or miner buybacks…but that’s about to change. Having a decent cash balance in an option account is not something that an addicted gambler can handle and I definitely want to get back into a few deals before the fedlines tomorrow. For those playing along at home, I’ll be sure to let you know what I decide.

In the meantime, be sure to note that…as of today…the moving averages in silver are all bullishly crossed and this configuration is as bullish as it gets for these particular technical inputs. Does this mean that silver can no longer be raided and smashed lower? F NO!!! However, it does mean that the HFTs should now be dip buyers rather than rally sellers for the first time since 2012.

And here’s a shocker…After reaching a low of $1232 and a high of $1246, gold is currently $1243. What so shocking about that? If you don’t know, then you clearly haven’t been spending enough time in Turdville over the past week.

On the bright side, total OI in gold fell another 6,400 contracts yesterday, back to 495,436. This means we’ve now shed over 16,000 contracts from last Thursday’s massive cap and raid and it gives us a little wiggle room should the Specs come charging back in late tomorrow and Thursday.

But this will blow you away…In silver, where the May contract is going off the board on Thursday and OI should be falling, total open interest surged again yesterday by another 4,250 contracts! This brings the total Comex silver OI to a new alltime record high of 206,037…a level which is simply incredible!!! Again, doing the math:

  • 206,037 contracts X 5000 oz/contract = 1,030,185,000 ounces of paper “silver” on the Comex

Please allow me to remind you that the entire planet will only produce 880,000,000 ounces of silver this year.

So, THE CRIMINAL AND EVIL COMEX BANKS now have written derivative contracts for 117% of total mine supply.

And this is legal? And this process “discovers” a free and fair price? Okeydokey, then.

As I go to close, I see that ZH has just posted summaries of three more, terrible economic datapoints from this morning:

Perhaps we should embed LIESman directly into that Fed meeting room. He might even be inspired learn how to sew. With the yarns that will be spun at 2:00 pm tomorrow, that skill might come in awful handy.

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