With gold and silver hammered again Friday and gold briefly breaking below $1100, Silver Expert David Morgan joined the show, discussing:
- 5 MILLION oz Retail Silver BACKLOG
- Morgan Breaks Down Physical Market: Shortage in the Wholesale Market, or Just in Retail?
- At What Point Does the Retail Market Put Stress on the 1000 oz Bar Market?
- Funds Attempting to Trigger $1070 Stops, Send Gold Towards 3 Figures
- Closer to the Edge of the Cliff- “At Some Point, Something’s Going to Give!”
- Shemitah Week is HERE: Is the BIG ONE on the doorstep? Eric and David weigh inThe SD Weekly Metals & Markets With The Doc, Eric Dubin, and David Morgan is below:
Source: William Banzai7
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Janet Yellen and her merry band of central bankers will meet next week to review goat entrails and set interest rate policy. Odds are, they will not hike rates. But there’s still a lesser probability that they might judge it productive to hike by a piddly 25 basis points or even 10 basis points just for the sake of proving their (totally bogus) “credibility.”
The reality is that there’s zero wiggle room for the Fed to sustain interest rate hikes on a going forward basis. The global economy is in a funk and deflationary forces are manifesting again on top of already weakening economies. There remains far too much debt in general in the global economy, particularly in China, Japan and large Western economies – and one must add on top of this dynamic rotting debt exposure that has yet to work its way towards fair pricing (e.g., junk bonds in the energy sector have yet to manifest their full impact; there’s still bad debts from the real-estate sector on bank balance sheets; sovereign debt is now suspect in many cases and ridiculously mispriced given the credit quality of many sovereigns, etc.).
If it were not for the equities market correction last month and the increasing pressure in the emerging markets debt market, the chances for a “one and done” meaningless gesture from the Fed would be much higher. But at this stage, the Fed is probably not going to raise rates next week, and they will site continued moderate and under target inflation (another b.s. position built on b.s. data, but that’s another story). They will also point towards overall economic data not justifying any action even though some on the Fed like to proffer the propaganda that since the current US labor force has the contrivance of a lower unemployment rate on account of the Fed not counting real unemployment by statistical methods of yesteryear, that there is a growing “tightness” in the labor market. How can one have tightness in the labor market when labor force participation is crashing to levels not seen since the 1970s? They might make a reference to market instability and especially instability in China and other emerging markets. But then again, to do so would be to send a signal that the Fed can be led around by speculators. Everyone knows the Fed dances to the tune of bankers and speculators, but Yellen will likely try not to fall into the trap of validating that thesis.
The maddening thing about all of this is that the Fed and the rest of the world’s major central bankers are stuck and we are most certainly in the end game.
Precious metals turned in some interesting swings this week. For over a week silver has been able to trade mostly sideways and off the late August intraday dip below $14. Silver rebuffed an intraday attack on Friday, regaining most of the day’s lost ground. Silver’s performance in September has been stronger than gold, and that’s all the more interesting given the rising fear of a deflation quagmire looming on the horizon. It also speaks to how tight the silver physical market remains, as we discuss in this week’s show.
It really does look like precious metals attempted to put in a bottom this week and it’s even normal to expect a “sell the rumor” in advance of a possible Fed rate hike, and reversal going into and following the actual news; a rate hike is built into market expectations, and another can kicking should also be interpreted by market participants as bullish for precious metals. Time will tell. Forecasting these most manipulated markets in world history is about as fun as ramming one’s head against a brick wall. Nevertheless, odds are better than not that we’re past peak pain in the PM sector when considering these factors combined with the improving fundamentals. Indian demand is going bonkers, Chinese demand is not far behind while the mainstream media and most of the conventional finance world continues to massively underestimate true Chinese consumption. All the while, North American demand is on the rise. We are now within the strong seasonal period for precious metals market demand. Something has to give…
The whole brouhaha about Russia escalating its presence in Syria is a fascinating case study in propaganda – and later, reality. For over two weeks the world has been treated to an avalanche of Western media stories about Russia escalating its support of Syrian president Assad. Interestingly enough, this wasn’t really true given that Russia has had ongoing military relations with the Assad government, having a naval port relationship, ongoing military contracts and training. This is not news. What’s news is that the West, with Turkey serving as the tip of the spear, is moving towards a ground war offensive with the goal of removing the Assad government. In the face of this behind the scenes escalation, ironically enough, on Thursday Russia in fact did start to make moves towards escalation. But note, this was AFTER previous claims that were based mostly on propaganda. You can review the supplemental links section for context on the earlier Western propaganda. The News Doctors will cover this evolving situation in more detail in the days ahead.
- India Precious Metals Import Explosive – August Gold 126t, Silver 1,400t
- It’s virtually impossible to get physical gold in London
- Is Comex gold really being critically drained? – Chris Powell, GATA
- This Is Why The Western Media Is Hyping ‘Russian Aggression’ in Syria
- Russian military advisers work in Syria, longtime military cooperation ‘no secret’
- A Russian buildup in Syria? The propaganda machine strikes again
- Debunking Russian Military Escalation In Syria; Examining Solutions – CrossTalk
- Putin aide’s advice: Default on foreign debt, put reserves into gold and BRICS bonds
Check out David Morgan’s website and his YouTube channel too. You’ll find plenty of his posts in the public domain:
Have a great weekend! — Eric Dubin, analyst and managing editor, The News Doctors