- Friday’s massive cartel raid on the metals as gold pummeled by $25, and silver by nearly $1 on the NFP release
- Ukraine crisis rapidly escalating as Russia has halted ammo exports to the US, both sides threaten economic war & retaliation, and Russia invades Ukranian Air Force Base in Crimea late Friday
- SD Exclusive Report: After hundreds of BBB complaints over 6 month delays shipping bullion to customers, Tulving Company goes out of business
- Bill discusses the latest on BaFin’s PM investigation, and whether GATA might be involved in assisting the German regulators
- Murphy provides his outlook for the metals, and makes the case why gold and silver will become explosive within a month!
The SD Weekly Metals & Markets With The Doc, Eric Dubin, & GATA’s Bill Murphy is below:
“Russia: Exposed To The World’s Contempt.”
Image Credit: William Banzai
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Another non-farm payrolls report, another precious metals smack-down… The correlation of these events is probably at least 0.85 over the last seven years. The geopolitical rumblings over the Ukraine make this week all the more interesting. Last Tuesday witnessed a large gold and silver smack-down just past the 1am EST hour, within the most thinly traded time window during the 24 hour day. The mainstream media and most industry analysts were quick to chalk up that flash crash to Russian signals of easing their position on the Crimea. But as best as I could tell, there was no news about tensions easing until at least an hour after precious metals performed their swan dive. Over 9,500 April contracts were sold by 1:21am EST, representing about 30 metric tons of “paper gold.” Just to help put the absurdity of how big this “paper gold” game is, the US Mint sold a total of 856,500 troy ounces worth of American Gold Eagle coins in 2013, which translates into 26.6 metric tons of physical gold — and that’s counting the fractional American Eagle coin sales. In about 15 minutes, the futures traders liquidated more paper gold than the entire 2013 American Eagle sales. Lunacy.
That smash had all the hallmarks of a cartel-induced smack down other than the fact that oil also took a beating at the same time. Odds are, Tuesday’s event was probably a combination of cartel action and momentum traders ringing the cash register. But there can be no mistaking what happened Friday. With the release of yet another fishy non-farm payrolls report where 124,000 of so-called 175,000 net job additions originated from the unicorn statistics division of the BLS and their “birth-death model,” who in their right mind could conclude the jobs report was bullish for the US economy, suggestive of continued tapering, and thus negative for precious metals? Regardless, the 175,000 “headline” figure beat expectations of a mere 149,000 net addition per Bloomberg’s analyst survey. It’s worth pointing out that expectations were ratcheted downward, leading Matthew Boesler at Business Insider to note this morning, “Perhaps the most notable development in the run-up to Friday’s jobs report is just how low the bar has been set.” Bottom-line: It’s the birth-death model that justifies skepticism.
Gold was pummeled, with nearly 8,000 contracts dumped on the employment report release while all other market factors were neutral for precious metals, at worst. Silver took a beating as well. Friday’s tape painting was manipulation-driven. Period, full stop.
Looking past all this fireworks, perhaps the real story is how strongly gold and silver rebounded Thursday as if Tuesday’s smash was a non-event. That sort of rapid rebound hardly ever followed waterfall declines during 2012 through 2013. That’s just one of many anecdotal price-based market behavior signals that are likely the product of a tight physical market constraining the maneuverability of those on the short side of the paper-driven precious metals exchanges (both momentum traders and the cartel short interest agents).
Fund manager Dave Kranzler published a missive Friday morning covering this action, along with the general fact that we live in a world of pervasive propaganda. “The U.S. Government Is One Big Lie,” he notes. Sadly, this isn’t an exaggeration. When it comes to economic policy, we’ve witnessed “management of perspective economics” applied to the business press narrative, bastardization of government statistics and outright rigging of almost all markets as the ludicrous replacement of sound public policy. If there’s a problem or if something smells, break out the potpourri and paint the tape. US Government policy makers (and their banker bosses) are channeling Groucho Marx from the afterlife: “Who are you going to believe, me or your lying eyes?”
As Kranzler notes, Ukraine remains a flashpoint and Dr. Paul Craig Roberts has been among the most lucid commentators analyzing events as they unfold. Dr. Roberts’ worldwide following has grown rapidly, to the point where his website nearly crashes anytime he posts a new article. If you really want to understand how Ukraine has become a flashpoint and why Putin is not 100% to blame, I highly recommend you read the following two articles by Dr. Roberts: “Washington’s Arrogance, Hubris, And Evil Have Set The Stage For War” and “Propaganda Rules The News.” Another current article well worth your time was published by Richard Sale: “Regime Change Blueprint: The NED At Work.” You’ll never look at “colored revolutions” the same way again.
It’s important to underscore that there are organic elements within Western Ukraine seeking independence from Russia, elements that have a leaning towards the European Union. But the Maiden separatist forces in Western Ukraine that have been behind the most active and violet protests that caused this crisis received at least $5 billion from the West in support of their destabilization efforts. It’s also important to underscore that Russia already had a large contingency of military forces in the Crimea per long standing agreement with the Ukraine. The US media and Obama administration is downright hyperbolic in their attempt to paint this situation as a pure democratic uprising and, in turn, an attempt by Putin to crack down on the situation. The truth is far more nuanced.
This weekend, we’ll have ongoing coverage of geopolitical events on The News Doctors. This drama is far from over and it will have a direct impact on the precious metals market.
On a final note, I plugged Bill Murphy’s newsletter during the show. It’s an honest plug. Bill isn’t paying us! Take the two week free trial to see if you like it — can’t hurt to try it. Click here to check it out, and click here to read GATA’s free “dispatches” penned by Chris Powell.
Thanks for listening to this week’s show — Eric Dubin
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