It was more back and forth with gold and silver today.
I thought I had already given a fairly complete overview of what I think is happening in the precious metals markets. Perhaps I need to repeat it with just a little embellishment.
And just for grins, although it does contain some satirical exaggeration just for effect, the cartoon to the right is pretty much how I conceive our current situation and the real economy. Our financial problems cut right to the bone of who we are and how we are conducting ourselves as a society.
We have just seen an historically significant decline in the precious metals in terms of days lower without relief. And we have seen a remarkable rise in the US dollar index against the Euro and the Swiss franc that cannot possibly be good for the real economy of the US, when every other developed nation is trying to devalue their currencies to stimulate their exports and inhibit imports.
I believe that a portion of the gold selling in particular is an effort to knock down the open interest in gold for December. Why? Because of the incredibly high ratio of open interest to deliverable gold, which I publish frequently and was among the first to do so, although Nick Laird is the data wrangler pre-eminent on this. If there was any serious attempt for holders of those contracts to stand for delivery, even JPM, which has been obviously building up its stores of gold to act as the ‘fixer’ in that market, would not be able to cover the demand.
JPM was consistently taking delivery for their house account in gold, and just transferred 70,000+ ounces over from Nova Scotia’s warehouse, from whom they had been taking delivery.
As we know, in the last big delivery month, JPM stepped up with an enormous amount of their gold, 400,000+ ounces, to provide enough real bullion to satisfy the contracts standing for delivery. Even now their inventories remain somewhat depleted.
The dollar has also been soaring, because the Fed is trying to pretend that the US is recovering so that they can raise rates. A strong dollar and higher rates are very harmful to what is almost undoubtedly a fragile economic recovery in the US.
And it is fantasy to think that the US can somehow go it alone, and continue to improve while the rest of the world is cutting rates because their economies are slowing.
The Fed wants to raise rates for their own policy purposes, so they can cut them, without going overtly negative, when their latest financial bubble starts to collapse, which it may already be doing. They cannot really raise rates in a Presidential election year past June, so they will push ahead, to serve their own purposes, even as they harm the real economy.
There will be another financial crisis as the IMF warned today. There will be a serious dislocation in several financial markets, including the precious metals and the bonds at some point, that will rock the current system to its foundations.
It is the credibility trap which ensnares the ruling class that inhibits any meaningful remedy and reform. Consequently I do not think we are in for an easy or peaceful time. As you may recall, I think the next imperial president may be our ‘Nero.’ This is by way of saying that unless we change our ways, it will get worse before it gets better.
You may think I have it wrong. And that is certainly a possibly that I not only admit but weave into my own investment strategies in the short term particularly. But I do not think I am being coy or evasive on what I think.
And this it a part of a greater framework and forecast that I put together in 1999, and if one does not expect exact timing, which is not possible in these things, has proven itself over time to be sound.
IndenturedServant
November 12, 2015 7:00 am
Didn’t they just steal………….I mean get their filthy paws on Venezuela’s gold the other day?
I don’t care if it goes up or down but down is better. I keep on buying either way. Silver premiums are normalizing and gold premiums never really got enough momentum to move. It’s like a fire sale IMO.
I’m only trying to preserve what I laughingly refer to as wealth until after the reset but I remain flexible.
Maggie
November 12, 2015 7:02 am
My husband and I were talking about what negative interest rates would mean for this country today. He gets overly angry when talking about the corrupt politicians we have personally known over the years, mostly in Oklahoma, and how they grew rich while serving in the state or nation’s Capitol. (It doesn’t seem to matter; bribery may be more lucrative for politicians in D.C., but it is still highly profitable at the state level.)
So, while he believes that negative interest rates on large cash savings in a bank are impossible because that would require banks to give notice to depositors and it would cause a run on banks, I believe that the politicians would easily sneak a clause into legislation about to be passed (that has nothing to do with banking even) that would allow banks to change rates overnight without notice.
Once he realized that while my suggestion was perhaps far-fetched, it wasn’t out of the question in light of what we have seen our Imperial President and Congress doing recently, he grew very angry and in order to keep his blood pressure down while he was navigating the S-turns of our Ozark highways, I changed the subject.
The evil that men are capable of when it comes to wanting what others have worked for is without bounds. It is the love of money/power that corrupts people.
Maggie
November 12, 2015 7:06 am
By the way, I hate to brag but Missouri got a D- on the State Integrity Test. (Oklahoma got an F, so we are so relieved we moved to a state with more integrity.)
IndenturedServant
November 12, 2015 7:33 am
Maggie, most banks already have daily withdrawal limits in place. It’s not out in the open but try withdrawing $35K tomorrow. You’re already trapped if the banks are holding your cash and shit goes sideways today. Read that superfine print brochure they send you with every other monthly statement. It can be a bedtime story for your hubby.
Maggie
November 12, 2015 8:06 am
@IS… I will skip that one. My husband is fully on board with us moving out here to live a sustainable lifestyle because he loves the NOPIS feature (No Other People In Sight) and loves working for US. How-ever, while I was here overseeing the building of the log home and he was there (finishing up his last year of work for the gubment contract until we got our son transferred to a Missouri school with ME as an in-state resident!), he decided that all that cash I had pulled out in $1000 and $2000 increments over the past couple of years that was safely sealed in PVC pipe could be safely placed BACK in the bank since the crisis was over.
I am personally glad that silver continues to be low, because I think he’d sell ours the second it wouldn’t lost us money. He’s a smart man, a great husband and father and can do just about anything he puts his mind to, but he won’t accept the idea that one day soon, Federal Reserve Notes will have similar value to all the Post It notes I leave him to remind him to do something for me… Worthless and ineffective.
I don’t worry so much when precious metals continue to stay down. Hopefully, but the time they get back in range of our purchase price(s), the wisdom of holding them instead of selling will be obvious.
Maggie
November 12, 2015 8:08 am
By the time they are back in range and wouldn’t “lose” us money. Hard to believe I once edited for a living.
IndenturedServant
November 12, 2015 8:20 am
Maggie, if he planned to sell it for dollars again at some point, why buy pm’s in the first place?
How goes the tax assessor dance?
Maggie
November 12, 2015 8:49 am
Ah… the tax assessor has been notified that we moved in November 1. Since we are dropping the electricity on the birdhouse and draining the pipes, we decided it might be too easy for them to prove we were not living there this winter.
He did stop by one other time to drop off some paperwork for us to send in when we “made the move”, but since our carport is actually at the birdhouse and we leave my car there almost always, it has been easy to show that we were still living there.
No more dancing with the tax man.
Maggie
November 12, 2015 8:52 am
Oh, and he didn’t plan to trade them for dollars. He just expected the collapse to occur and be over with by now and when it hasn’t, he’s decided that the Fed can keep doing this FOREVER. I think that it is easier for him to believe that than I because he has tuned OUT the world completely, while I stay informed with clever people and a few ijits here on TBP.
IndenturedServant
November 12, 2015 9:06 am
Maggie said:
“a few ijits here on TBP”
Hey! I resemble that remark!
Need sleep. I’m off to bed.
Administrator
Author
November 12, 2015 10:26 am
‘Gold’ Spikes Off 2015 Lows As Gold Coin Sales Surge To Highest Since Financial Crisis
Submitted by Tyler Durden on 11/12/2015 09:46 -0500
With the ‘paper’ price of gold are a somewhat unprecedented barrage of selling currently (down 9 of the last 11 days) to 4-month lows, one could be forgiven for thinking that demand for the precious metal is dropping. However, as almost every nation in the world (ex US) is devaluing their currency, The World Gold Council reports that physical gold demand has risen dramatically with US gold Eagle coin sales at the highest levels since the financial crisis.
‘Physical’ Demand is exploding…
As ‘Paper’ prices collapse…
And then spike off 2015 lows…
As the latest report from The World Gold Council shows, gold buyers jumped on the new low prices…
“US retail investment demand jumped to 32.7 tonnes, generating growth of more than 200% year-on-year,”
“This signaled both a level of interest in gold investment not seen since the global financial crisis, and a level of price awareness on a par with that of Indian and Chinese retail investors. Nowhere was this more clearly demonstrated than in the US, where the US Mint reported rocketing sales of gold Eagle coins.”
…
“Demand for was the highest for more than five years: in volume terms, sales hit 397,000 oz.,”
“Demand for newly minted coins surged across all key product lines: sales across all denominations were many multiples of their long-term average levels. Secondary market activity was correspondingly weak as profit-taking slumped in favor of bargain hunting.”
Finally – who is buying? It’s not just those crazy retail gold bug doomers… Central Banks continue to back up the truck, taking advantage of the ‘low’ prices…Gold as a reserve asset remains firmly on the radar
Central banks continue to build their holdings of gold, adding 175t to official reserves.
Purchases by central banks and other official sector institutions almost equalled the Q3 2014 record of 179.5t as gold’s diversification benefits were increasingly recognised and sought. A couple of new countries joined the ranks of repeat buyers, the most significant of those being China.
The People’s Bank of China (PBoC) confirmed in July that its gold reserves had expanded by over 50% since its last announcement in 2009. At 1,658t, that put China at number six in the global rankings. Subsequently, the PBoC has begun regularly to report changes to its gold holdings and has confirmed an additional 50.1t of purchases between July and September.
And in another small but significant step, the central bank of the United Arab Emirates (UAE) confirmed that, between April and September it added 5t of gold to its reserve asset portfolio, having held none since 2003. The result is that the UAE makes it into the top 100 holders of gold and expands the geographical spread of central bank buyers.
Q3 saw continued buying by regular names, primarily concentrated in the CIS region. Selling was again limited and sporadic.
bb
November 12, 2015 10:31 am
Little sister , no matter where you move the Golden Hordes will find you.Got to be prepared to fight . You ever tell your husband about me ?You should.
Fiatman60
November 12, 2015 12:12 pm
It’s pretty simple really……. If I were a central bank, I would want to get as much gold in my vault for the lowest price possible, knowing full well the gig is up for fiat currency.
What’s the lowest price possible? $0.00 of course, but I have to realize that someone went to great trouble to dig it out of the ground and process it so that I could acquire it. Therefore, digging it up works out to around $1300 per ounce. That’s way too high!!, so we will manipulate the above ground supply below the cost of getting it, because we don’t care that there is a finite supply, we just WANT it ALL!!
When the SHTF, we will manipulate the price of gold upwards so that we even get richer!!
The Road Ahead
by Jesse
It was more back and forth with gold and silver today.
I thought I had already given a fairly complete overview of what I think is happening in the precious metals markets. Perhaps I need to repeat it with just a little embellishment.
And just for grins, although it does contain some satirical exaggeration just for effect, the cartoon to the right is pretty much how I conceive our current situation and the real economy. Our financial problems cut right to the bone of who we are and how we are conducting ourselves as a society.
We have just seen an historically significant decline in the precious metals in terms of days lower without relief. And we have seen a remarkable rise in the US dollar index against the Euro and the Swiss franc that cannot possibly be good for the real economy of the US, when every other developed nation is trying to devalue their currencies to stimulate their exports and inhibit imports.
I believe that a portion of the gold selling in particular is an effort to knock down the open interest in gold for December. Why? Because of the incredibly high ratio of open interest to deliverable gold, which I publish frequently and was among the first to do so, although Nick Laird is the data wrangler pre-eminent on this. If there was any serious attempt for holders of those contracts to stand for delivery, even JPM, which has been obviously building up its stores of gold to act as the ‘fixer’ in that market, would not be able to cover the demand.
JPM was consistently taking delivery for their house account in gold, and just transferred 70,000+ ounces over from Nova Scotia’s warehouse, from whom they had been taking delivery.
As we know, in the last big delivery month, JPM stepped up with an enormous amount of their gold, 400,000+ ounces, to provide enough real bullion to satisfy the contracts standing for delivery. Even now their inventories remain somewhat depleted.
The dollar has also been soaring, because the Fed is trying to pretend that the US is recovering so that they can raise rates. A strong dollar and higher rates are very harmful to what is almost undoubtedly a fragile economic recovery in the US.
And it is fantasy to think that the US can somehow go it alone, and continue to improve while the rest of the world is cutting rates because their economies are slowing.
The Fed wants to raise rates for their own policy purposes, so they can cut them, without going overtly negative, when their latest financial bubble starts to collapse, which it may already be doing. They cannot really raise rates in a Presidential election year past June, so they will push ahead, to serve their own purposes, even as they harm the real economy.
There will be another financial crisis as the IMF warned today. There will be a serious dislocation in several financial markets, including the precious metals and the bonds at some point, that will rock the current system to its foundations.
It is the credibility trap which ensnares the ruling class that inhibits any meaningful remedy and reform. Consequently I do not think we are in for an easy or peaceful time. As you may recall, I think the next imperial president may be our ‘Nero.’ This is by way of saying that unless we change our ways, it will get worse before it gets better.
You may think I have it wrong. And that is certainly a possibly that I not only admit but weave into my own investment strategies in the short term particularly. But I do not think I am being coy or evasive on what I think.
And this it a part of a greater framework and forecast that I put together in 1999, and if one does not expect exact timing, which is not possible in these things, has proven itself over time to be sound.
Didn’t they just steal………….I mean get their filthy paws on Venezuela’s gold the other day?
I don’t care if it goes up or down but down is better. I keep on buying either way. Silver premiums are normalizing and gold premiums never really got enough momentum to move. It’s like a fire sale IMO.
I’m only trying to preserve what I laughingly refer to as wealth until after the reset but I remain flexible.
My husband and I were talking about what negative interest rates would mean for this country today. He gets overly angry when talking about the corrupt politicians we have personally known over the years, mostly in Oklahoma, and how they grew rich while serving in the state or nation’s Capitol. (It doesn’t seem to matter; bribery may be more lucrative for politicians in D.C., but it is still highly profitable at the state level.)
So, while he believes that negative interest rates on large cash savings in a bank are impossible because that would require banks to give notice to depositors and it would cause a run on banks, I believe that the politicians would easily sneak a clause into legislation about to be passed (that has nothing to do with banking even) that would allow banks to change rates overnight without notice.
Once he realized that while my suggestion was perhaps far-fetched, it wasn’t out of the question in light of what we have seen our Imperial President and Congress doing recently, he grew very angry and in order to keep his blood pressure down while he was navigating the S-turns of our Ozark highways, I changed the subject.
The evil that men are capable of when it comes to wanting what others have worked for is without bounds. It is the love of money/power that corrupts people.
By the way, I hate to brag but Missouri got a D- on the State Integrity Test. (Oklahoma got an F, so we are so relieved we moved to a state with more integrity.)
Maggie, most banks already have daily withdrawal limits in place. It’s not out in the open but try withdrawing $35K tomorrow. You’re already trapped if the banks are holding your cash and shit goes sideways today. Read that superfine print brochure they send you with every other monthly statement. It can be a bedtime story for your hubby.
@IS… I will skip that one. My husband is fully on board with us moving out here to live a sustainable lifestyle because he loves the NOPIS feature (No Other People In Sight) and loves working for US. How-ever, while I was here overseeing the building of the log home and he was there (finishing up his last year of work for the gubment contract until we got our son transferred to a Missouri school with ME as an in-state resident!), he decided that all that cash I had pulled out in $1000 and $2000 increments over the past couple of years that was safely sealed in PVC pipe could be safely placed BACK in the bank since the crisis was over.
I am personally glad that silver continues to be low, because I think he’d sell ours the second it wouldn’t lost us money. He’s a smart man, a great husband and father and can do just about anything he puts his mind to, but he won’t accept the idea that one day soon, Federal Reserve Notes will have similar value to all the Post It notes I leave him to remind him to do something for me… Worthless and ineffective.
I don’t worry so much when precious metals continue to stay down. Hopefully, but the time they get back in range of our purchase price(s), the wisdom of holding them instead of selling will be obvious.
By the time they are back in range and wouldn’t “lose” us money. Hard to believe I once edited for a living.
Maggie, if he planned to sell it for dollars again at some point, why buy pm’s in the first place?
How goes the tax assessor dance?
Ah… the tax assessor has been notified that we moved in November 1. Since we are dropping the electricity on the birdhouse and draining the pipes, we decided it might be too easy for them to prove we were not living there this winter.
He did stop by one other time to drop off some paperwork for us to send in when we “made the move”, but since our carport is actually at the birdhouse and we leave my car there almost always, it has been easy to show that we were still living there.
No more dancing with the tax man.
Oh, and he didn’t plan to trade them for dollars. He just expected the collapse to occur and be over with by now and when it hasn’t, he’s decided that the Fed can keep doing this FOREVER. I think that it is easier for him to believe that than I because he has tuned OUT the world completely, while I stay informed with clever people and a few ijits here on TBP.
Maggie said:
“a few ijits here on TBP”
Hey! I resemble that remark!
Need sleep. I’m off to bed.
‘Gold’ Spikes Off 2015 Lows As Gold Coin Sales Surge To Highest Since Financial Crisis
Submitted by Tyler Durden on 11/12/2015 09:46 -0500
With the ‘paper’ price of gold are a somewhat unprecedented barrage of selling currently (down 9 of the last 11 days) to 4-month lows, one could be forgiven for thinking that demand for the precious metal is dropping. However, as almost every nation in the world (ex US) is devaluing their currency, The World Gold Council reports that physical gold demand has risen dramatically with US gold Eagle coin sales at the highest levels since the financial crisis.
‘Physical’ Demand is exploding…
As ‘Paper’ prices collapse…
And then spike off 2015 lows…
As the latest report from The World Gold Council shows, gold buyers jumped on the new low prices…
“US retail investment demand jumped to 32.7 tonnes, generating growth of more than 200% year-on-year,”
“This signaled both a level of interest in gold investment not seen since the global financial crisis, and a level of price awareness on a par with that of Indian and Chinese retail investors. Nowhere was this more clearly demonstrated than in the US, where the US Mint reported rocketing sales of gold Eagle coins.”
…
“Demand for was the highest for more than five years: in volume terms, sales hit 397,000 oz.,”
“Demand for newly minted coins surged across all key product lines: sales across all denominations were many multiples of their long-term average levels. Secondary market activity was correspondingly weak as profit-taking slumped in favor of bargain hunting.”
Finally – who is buying? It’s not just those crazy retail gold bug doomers… Central Banks continue to back up the truck, taking advantage of the ‘low’ prices…Gold as a reserve asset remains firmly on the radar
Central banks continue to build their holdings of gold, adding 175t to official reserves.
Purchases by central banks and other official sector institutions almost equalled the Q3 2014 record of 179.5t as gold’s diversification benefits were increasingly recognised and sought. A couple of new countries joined the ranks of repeat buyers, the most significant of those being China.
The People’s Bank of China (PBoC) confirmed in July that its gold reserves had expanded by over 50% since its last announcement in 2009. At 1,658t, that put China at number six in the global rankings. Subsequently, the PBoC has begun regularly to report changes to its gold holdings and has confirmed an additional 50.1t of purchases between July and September.
And in another small but significant step, the central bank of the United Arab Emirates (UAE) confirmed that, between April and September it added 5t of gold to its reserve asset portfolio, having held none since 2003. The result is that the UAE makes it into the top 100 holders of gold and expands the geographical spread of central bank buyers.
Q3 saw continued buying by regular names, primarily concentrated in the CIS region. Selling was again limited and sporadic.
Little sister , no matter where you move the Golden Hordes will find you.Got to be prepared to fight . You ever tell your husband about me ?You should.
It’s pretty simple really……. If I were a central bank, I would want to get as much gold in my vault for the lowest price possible, knowing full well the gig is up for fiat currency.
What’s the lowest price possible? $0.00 of course, but I have to realize that someone went to great trouble to dig it out of the ground and process it so that I could acquire it. Therefore, digging it up works out to around $1300 per ounce. That’s way too high!!, so we will manipulate the above ground supply below the cost of getting it, because we don’t care that there is a finite supply, we just WANT it ALL!!
When the SHTF, we will manipulate the price of gold upwards so that we even get richer!!
I love it when a great plan comes together!!