Rally Denied As Stevie’s Exchange Stabilization Fund Has Had Enough Of The Goldbugs

SD Midweek: Cartel plan is now clear: BOHICA. Down for the week, month, quarter and year (after gold nearly hit new highs on Tues). Here’s an update…

Just a reminder of what Treasury Secretary Steve Mnuchin’s Exchange Stabilization Fund can do:

  • ANYTHING THEY WANT!

If you are really inclined to read what they can do, it’s right there on the Treasury Department’s website, but for those new readers, I’ll post it below directly from the ESF, saying they can pretty much do whatever they want (bold for emphasis):

The ESF can be used to purchase or sell foreign currencies, to hold U.S. foreign exchange and Special Drawing Rights (SDR) assets, and to provide financing to foreign governments. All operations of the ESF require the explicit authorization of the Secretary of the Treasury (“the Secretary”).

The Secretary is responsible for the formulation and implementation of U.S. international monetary and financial policy, including exchange market intervention policy. The ESF helps the Secretary to carry out these responsibilities. By law, the Secretary has considerable discretion in the use of ESF resources.

The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s, the Act provides in part that “the Department of the Treasury has a stabilization fund …Consistent with the obligations of the Government in the International Monetary Fund (IMF) on orderly exchange arrangements and an orderly system of exchange rates, the Secretary …, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities.

Notice two key features specifically mentioned: Gold & currencies.

So let’s start there today and we can see the forces we’re up against. It’s not like they’re hiding it, you just have to look and right there it is plain as day (or wee-morning hours).

You see, all we can get is Suicide Squad or Mad Max out of Stevie.

We know we’re not getting a Treasury Secretary who strives to get in accordance to the Constitution:

If I sound bitter today, it’s because I am.

Sometimes battle fatigue sets in, and as we end the first quarter of 2018, with what we’re up against, wow have they been relentless. Gold & silver are to the Exchange Stabilization Fund what Iraq & Syria is to the war mongers – non-stop targets of brute force shellackings.

Let’s look at Stevie’s ESF work above, and then we can see why the rally has died out.

First, on Monday evening, gold gapped-up to start the session. Notice the dollar gapped-down. Of course, this is expected because fundamentally, pretty much everything going on in the world is good for gold right now, and technically, the charts were set-up and price began to rally.

But notice the second point: The “enough is enough” point.

You see, as much we can’t stand the suppression, they can’t stand the price rises, and since they have unlimited money and can operate openly in the shadows, and being accountable to nobody except the President himself, the cartel will always get the upper hand until there is a problem in the physical markets.

So at number two on the graph, at approximately 2:42 a.m. EST on Tuesday morning, in a thinly traded market while everybody in the U.S. was asleep, gold broke above $1362 and was looking to make new highs. Imagine how bullish that would have been come Tuesday morning?

At that same time, approximately 2:42 a.m. EST, the dollar was also bottoming.

And what happened?

Yup. The order was sent down to Mr. Fat Fingers to inflict pain and reverse the prevailing conditions.

Reverse them he did.

I put number three up only as a shimmer of hope: As the dollar rose Tuesday afternoon, so did gold. Yeah, I know. Not much hope there. I’m just trying to not be a Debbie Downer all the time.

So now I am no longer anticipating a rally this week.

There are two days left in the trading week – today and Thursday, and what better way for the ESF to close out the month and the quarter than having gold (and silver) down on the week, month, quarter, and year. Oh my!

There will come a time when the cartel can’t do this any longer.

It’s along this logic: When just a few more individuals decide to purchase a tiny amount of gold or silver as a matter of safe, stable savings, or myriad reasons for owning precious metals, the cartel would have a problem with the physical supply, and that would force the paper hand.

But since nobody alive today really recalls using real gold & silver as money other than a few of the old die-hards, and since the propaganda has been beaten into the collective psyche to trust the almighty dollar and paper financial instruments, the light bulb will not turn on until the collective psyche finally reaches financial rock-bottom.

And we’re not there yet, so here we are.

It will go on until it won’t.

We know it, and the cartel knows it too. So they will be the sore losers as long as they can.

Here’s some resources to help understand what we’re up against:

Let’s move on to the charts.

We can see gold has been worked on overnight and this morning as well:

I’m looking for the cartel to smash below the 50-day before the close of business tomorrow. I’m thinking $1320 but I wouldn’t put it past the cartel to try to smash all the way down to the $1306 or $1303 spike lows.

Like I said, the plan is now evident – down for the week, month, quarter and year.

Prepare for brutal cartel bombings.

Silver tried to get up through it’s 50-day moving average but failed:

I would be looking for the cartel to try to smash silver back down to $16 to close out the week.

We’ll have to see if $16 holds.

Platinum is doin’ the nasty around its 200-day moving average:

Although we’re working on a definite confirmation of three lower-highs and three lower-lows. Very bearish indeed.

Palladium, well, sorry brother:

You have served your sector well and you have done a spectacular job of holding on, but the cartel is looking to force you to let go.

Once palladium loses its 200-day moving average, we’ll reassess, though first a little mourning because it held on for so long.

I’m now looking for palladium to lose the 200-day moving average today or tomorrow.

There is no mercy from the cartel here. There is only hate from the cartel.

But beyond the hate, the cartel is really angry for some reason right now. Actually, anger is not the right word. “Anger” can be good. The cartel is mad for some reason. Raving mad. That’s the word.

But perspective – we know how this ends.

Besides, everybody turned bullish again, so this was to be expected sooner or later. Can’t have that sentiment turning positive you know.

And to think, we didn’t even get the dud rally to break-out of the trading ranges.

Yet nothing fundamentally has changed. All we have to do is endure more pain, for longer, and come out on the other side of it with our stacks intact.

And if there is any bright spot it is again in the GSR:

The gold to silver ratio got over 82 ounces of silver required to purchase one single ounce of gold yesterday. This is really becoming the arbitrage play of the decade.

Copper is showing the classic signs of rolling over:

As copper mining is vital to the production of silver, if copper gets pushed too low and miners cut back production or even close down mines, that will affect the net silver supply, so there are secondary effects the cartel knows about and will take into consideration. In other words, there are indeed price floors.

But for now: Geez Louise – everything is getting smashed right now.

Crude is about the only thing that’s kept its albeit ugly rally since the start of the year:

When you’re up over 7.5% on the year as everything else is either down or treading water, what does that mean?

Stagflation is coming in full force.

Oil is the most vital commodity there is, and when the price of it goes up, the price of everything goes up. Except for gold & silver. The cartel has a rule in place to never, ever let those go up. The rule will be in effect until we win and they lose.

So the dollar has had a bounce here:

I never thought I’d say this but just go die already!

I’m ready to rip the Band-aid off. I’m ready to take the bitter tasting medicine. I’m ready to do whatever metaphor you would like to use to get on to the next system as our politicians and bankers have failed us. We know the bankers are dirty, so the blame really lies on the politicians. But then again, if there is actually some sort of  “We the People”, we’ve only brought it on ourselves.

But I say let’s move on already.

The yield on the 10-Year Note did not break-out but rather broke-down:

Amazing.

Has this been all one great big “Bear Trap”, as rising interest rates (falling bond prices) was just one big fake out, and we’re headed lower in yield?

If that’s the case, we’re talking money printing on a massive, massive scale, as in get ready for the hyperinflation.

Or is it that the pull back in yield is just showing that we’re going to be range-bound for longer?

We’ll see.

I’ve said all along, I don’t think the bond market can just drift higher like it has. Sure, 2.3% to 2.8% in three months is a massive move, but the types of increases I’m talking about are Paul Volcker style increases as in many hundreds of basis point spikes.

Bitcoiners might want to take profits since the rollover has been slow and opportunistic:

 

Of course, when you’ve been overtaken in search by an online video game, there clearly is a problem with bringing in new buyers to feed the ponzi:

So those opportunistic, drawn out selling opportunities may well become urgent selling opportunities seeing how much the interest has crashed in Bitcoin.

The stock market is looking sickly:

The S&P 500 looks like it could break down through the 200-day, and if it does that, who knows how low it could go?

I’m not putting it past the cartel, and especially the Fed, that this is not all part of the plan to reverse course on rates and re-implement QE. They will need a catalyst after all to do just that, and the fastest catalyst out there would be a severe market crash. The only problem is that after rising for 9+ years, the drop in the stock market still isn’t big enough yet.

Of course, Mr. Big Fat Ugly Bubble is lovin’ it:

I don’t agree, and if he really wants to MAGA, he understands what needs to be done:

Since the President is not only not doing what needs to be done to set the country straight (bimetallic gold & silver standard as required by the U.S. Constitution) but directly responsible for the smashings as the ESF buck ultimately stops with the President, exactly who’s side is he on again?

The solution to most of the problems in the world can all circle back to one fundamental concept we’ve let go – Sound Money.

But I digress.

Volatility looks like it could be painting a massive cup & handle:

If that is the case, then under normal markets, things would be getting very interesting right about now, like rounding out the cup at 50 and the handle taking us to perhaps 75.

But these are not normal markets. These are cartel tinkered with markets every single minute of every single day.

And their hubris will be their downfall because they actually believe they can keep this going forever.

They will fail.

Stack accordingly…

– Half Dollar