SD Weekly Metals & Markets: 2 Million Oz of Paper Gold Break COMEX Gold Market


On this week’s Metals & Markets Wrap The Doc & Eric Dubin cover:

  • Ongoing metals manipulation visible across the board; we’ll document this week’s gold and silver lunacy- & cartel signaling minutes prior to dumping 17,000 paper gold contracts on the market between 8:43 and 8:45am: triggering a stop of Comex gold trading as the market went dark for 20 seconds!
  • Signs that physical market demand is tightening up again in Asia, which should limit cartel maneuverability;
  • Shut-down, Obama Care and debt ceiling debate analysis and its relationship to precious metals trading

The SD Weekly Metals & Markets Wrap With The Doc & Eric Dubin is below!


Due to the government shutdown, we regret to report that Major League Baseball playoffs have been canceled…

Just kidding!

If there’s one forecast we’re quite confident in making it’s this:  as strange as this week was, action on the political front this weekend and early next week is probably going to get even more bizarre.  We have to dive deep into political discussion if we’re going to have any hope gaining insight into near-term trends for precious metals.  The good news?  As an educated guess, it appears Obama and his backers are not going to play chicken past this week — and yes, dear reader, it’s Obama that needs to back down now.  I will explain.

Thursday, Republican House majority leader John Boehner led a group of Republicans to the White House to speak with Obama and his staff.  The Republicans proposed to raise the debt ceiling just enough to allow for a six week period enabling calm negotiations.  The Obama Administration balked, which should not be a surprise given that a major segment of the mainstream media has been acting like propaganda apparatchiks, dutifully reporting within the framing confines of Democratic Party Leadership talking point memos, placing TOTAL blame for the shutdown on the Republican Party.

Credit where credit is due, the Obama Administration has been winning the short-term “framing” battle (but they could very well lose the long-term war, a discussion for another time).  There’s no better crystallization of this zeitgeist than what we see spewing forth from Saturday Night Live and Jon Stewart’s The Daily Show, which TND has reported on here and here.

Truth be told, the current impasse is a bi-partisan production, and even though the majority of the media continues to spin this debate in favor of President Obama, a number of important developments happened this week that will bring discussions to a head.  It’s fair to say the catalytic event happened when Republican Representative Sean Duffy, a member of the House of Representatives Committee on the Budget, embarrassed MSNBC’s Andrea MitchellRepresentative Duffy stated point blank that President Obama has “won the debate” over Obama Care.  Remember, this was early this week!  Duffy’s comments also show the shift in the Republican leadership’s strategy.

The Republicans realize that full defunding of Obama Care is extremely unlikely.  Instead, they now appear to be pushing the big picture debate about the long-run status of Obama Care into 2014 and beyond, with one key exception:  their demands now focus on the fact that average American citizens need to be treated equally under the law as big businesses that have received waivers against penalties for not signing up for Obama Care during 2014.  This is a reasonable demand — equal treatment under the law.  That’s a powerful argument, not easily framed into oblivion.

The Republican leadership realizes they’ll possibly have a much improved hand following the 2014 election.  If the Republicans buy the American people a penalty-free opt-out option for 2014, that gives time for the “bomb thesis” Dr. Dave Janda posits to “go off” while the Obama Care program hasn’t been fully implemented, which in turn will demonstrate more clearly the negative aspects of the program for all to see (hat tip to Nancy “we have to pass it to see what’s in it” Pelosi; only now, it’s we have to partially implement it to see its nasty byproducts and scare the bejesus out of Americans such that they demand an alternative to reforming the problem of the uninsured, escalating costs and the long-term unfunded entitlements quagmire).

Dr. Janda’s analysis of Obama Care is brilliant.  Click here to listen to my interview with the good doctor.  Did you know that doctors could end up in jail under Obama Care if Obama’s government doesn’t approve of a treatment?  No joke.  Again, listen to the interview.

Bottom-line:  President Obama has probably over-played his hand and he’s going to have to honestly embrace negotiations.  As James Carville once famously quipped, “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter.  But now I would like to come back as the bond market.  You can intimidate everybody.”  The bond market has been in an artificial state of calm, first induced by the “MOPE” fiesta of we’re gonna taper, taper, taper — whoops, just kidding bullshit last month, to what now appears to be an elevated level of direct bond market management (yes, we’re conspiracy theorists, and for the good reason that object reality supports the thesis, damn it!).

Despite all the theater, bond market yields are starting to tick up again.  Playing chicken with a full default can not be hidden by manipulation forever.  Meanwhile, Paul Ryan, the Republican Chairman of the House Budget Committee (starting to see the connection here?) conceded Thursday that the Republicans are not going to get all they wanted, and that as CNN Chief National Correspondent John King reported Friday, the tone of discussions with Obama changed, “…both Democrats and Republicans say,” adding that “The president said (paraphrasing), ‘Listen, I’m not going to negotiate with you until you reopen the government, but go to your members, find out what you need to do to get that part done and let’s try to make some progress.'”

The president’s advisers can see the bond market starting to react just as easily as I can.  Likewise, they can see the shift in the Republican strategy that will be far more difficult to “frame” and have obedient mainstream media and SNL spin.  This is why next week should, theoretically, witness the end-game — not to mention the fact that the official schedule for the debt limit to be reached occurs next week as well, farcical as that has been over the last few months of budgetary gymnastics performed to delay the inevitable.

Make time to read the transcript and/or watch the video of Representative Sean Duffy excoriating MSNBC’s Andrew Mitchell with the above analysis in mind.  The pieces of this puzzle will fit together for you, and heck, the video is funny anyway.

Switching gears, Doc and I discussed the flash crash algo trading this week in the precious metals space and how it has been responsible for “painting the tape” during a period of time when gold and silver should be rising.  The mainstream might be brain-dead, but the laws of economics haven’t been repealed.  When a nation and its currency are under threat given a potential default, it’s moronic to accept the notion that massive liquidations are taking place in gold in advance of that potential cataclysm.  After an actual default?  Sure, theoretically, for a brief period of time a rush to the liquidity of fiat versus gold is possible given the bizzaro world created with 40+ years of Keynesian “barbarous relic” brainwashing, as we discussed during the broadcast.  But not before the event when the selling is executed in a loss-maximizing manner as this week’s charts clearly illustrate.

I wonder how Bart Chilton is feeling given that he’s still apparently getting a government paycheck right now even after he warned about how things could turn to sh*t during a government shutdown, and while manipulation continues for all to see in this week’s gold and silver trading?  Please read our open letter to Mr. Chilton:  click here.

Enjoy the long, holiday weekend.  A little rest from this week’s lunacy certainly is well deserved!  — Eric Dubin
2 ton paper gold dump breaks the Comex for 20 seconds, courtesy Nanex:


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