Hedge Funds Betting Long on Dollar

Source: kingworldnews.com

This should be interesting. Those following the metals and the dollar are certainly aware of continuous monkey hammering to the precious metals and the soaring dollar. As a rule of thumb, as the dollar gains strength, the metals tend to decline. But the devaluation of the metal prices are not just falling due to the strong dollar, to get an insight on another force pushing the metals down examine the COT reports.

Another rule of thumb is that the commercials (bank traders) are right most of the time where as the speculators (hedge fund managers) are wrong most of the time. Lately the commercials have been buying back their short positions of the metals and to some degree increasing their long positions while the speculators have been doing the exact opposite.

The hedge fund managers are not ignorant it is their strategy to invest like day traders. They are caught in a bind as they must reap as high a return but they can’t compete with the commercials. So they are heavily reliant on timing, they will attempt to play the game of the commercials and liquidate their positions somewhere between the swings. Following the trend, the commercials will dump paper contracts when the markets just open or when the market has very few traders, especially foreign traders. When the market is thin (few traders) they can move the price more easily with the dumping of large amounts of paper contracts.

Logic should make it obvious that precious metal prices should be multiples higher than where it is currently. Look at how the eastern countries, primarily Russia, China and India have been loading up on physical gold and physical silver while the western countries (US and UK) have been manipulating with paper contracts and EFPs. Additional, notice how many countries have pulled their gold from US storage and repatriated it to their own country’s storage. Another point is the massive amount of metals being amassed by JP Morgan.

Source: kingworldnews.com

Source: kingworldnews.com

Most holders of precious metals have been worn down by the continuous manipulation pushing the metal prices down to unexpected lows. I believe this is their strategy to eke out as much physical metal as possible, so to speak they are now trying to squeeze blood out of a turnip. Mathematically, this can not last forever even though it appears so. I can’t say that it will not go on for a time as I originally believed that the dollar should have collapsed by now and we would be waking up to an economic climate similar to Venezuela.

Watching what is taking place in other countries indicates that the sword of Damocles is about to fall. The BRICS have an alternative financial transfer system in place, the one belt road is close to completion, the Nordstream pipelines are close to completion, many countries have secured ties to the BRICS for trading purposes, countries have pretty much repatriated any substantial gold which was held in the US, states are moving to accept precious metals for trade, rumors are growing of how they are planning on tying cryptocurrencies to gold or silver and globally fiat currencies are failing. Another point is the corruption of the US (as well as other countries) government is becoming exposed. It sure seems that the sword is ready to fall.

Russia Divesting in US Dollars

Source: thedailycoin.org

Russia’s US dollar reserves have gone from $96.4 billion in March to $14.9 billion in May.  They are building their gold reserves and now have surpassed China’s gold stockpile.  This can’t be verified as China doesn’t report their actual numbers.

There are many things converging this year to indicate that the BRICS are about to pull the plug.  They have set up a viable financial exchange to rival the SWIFT system, they have made many trade agreements involving the ‘one belt road’, they have almost completed the pipeline to circumvent Ukraine and supply oil and LNG to European countries and they have built up their military to a comparable strength to the US’s.  Some say their weaponry is superior to the US’s.

The US is infighting still hampered by the Russian collusion and the possible demise of the democratic party as it use to be.  The party is showing signs of a huge change in the old guard leadership and the new guard seems bent on a socialistic platform.  The republicans are not very vocal but their days also seem to be numbered.  It almost seems that the US is on the verge of a civil war.

The metals have been severely hammered in the COMEX over the past three weeks for no apparent reason.  The reason maybe due to something known to only the insiders like the central banks.  The dollar is being kept strong but the fundamentals are indicating that it should be weakening against foreign currencies.  The major buyers of the US notes are all backing away from buying the treasuries and in many cases they are lowering their holdings.  The precious metal prices in foreign countries is rising, this makes sense as the precious metals prices move opposite to the strength of the country’s currency.

For those who believe that TPTB have a policy of making their intentions known even if it is in a clandestine way that eludes most, the Economist magazine cover from an issue in 1988 that was predicting a new currency.  Sure looks like this prediction was correct.

Looking For a Hit on the Metals

Source: kitco.com

The markets are closed on Wednesday for the Fourth and much of this week people will not be active in the markets.  This is the time when the manipulators get the biggest bang for their buck.  Exactly why I am expecting the metal prices to sustain a major hit.

Their modus operandi is to hit the market with a large amount of shorts when the trading is thin.  We are already going into this week with weak prices.  The support levels have been breached and the opportunity to push the price even lower is too much of a good thing to be passed up.  The lower they can push the price, the cheaper they can buy back the shorts to cover their position.

Many of us are wondering where the bottom is.  The bottom is as low as they can manipulate it to.  Over the past few years, they have been painting the OI figures by using EFPs.  This makes the OI look better but the short contracts are still open but they have been shifted to the London market.  These contracts (theoretically) still need to be covered.  I say theoretically because when the market goes ‘no offer’ they will likely void these contracts.

The terms of trading on the COMEX say that they don’t have to delivery to the short contract holder physical metal but it is the COMEX’s option to settle in fiat.  The COMEX was established to provide people a way to own metals, back in 1933 the public was limited to owing only 5 ozs of gold.  With the COMEX people could own more than the limited amount.

Today it is rumored that the COMEX has very little physical metals and most of the stated metal is in paper contracts.  When short contract holder demand physical delivery en masse, the price will go ‘no offer’ and it will mark the end of the COMEX.

They want the price as low as they can get it primarily so they can buy back the enormous amount of short contract they have issued.  If they don’t and the price of metals rise it will certainly end in major losses and the likely demise of many of the commercials.

Precious Metal Monkey Hammer

Source: kitco.com

Source: kitco.com

Over the last week, I have watched the prices of metals smashed.  My problem is I do not have an inkling as to why, there has been no apparent reason, the prospects of an imminent world war breaking out is not any higher, no country is in imminent danger of defaulting (although Italy is teetering) and other than Venezuela, Argentina and Italy there are no currencies on the verge of implosion.  So what is the cause behind them hammering down the metals.

I have been noticing that the cryptos are also being smashed.  The only thing I can point to is an unseen ‘black swan’ on the horizon.  The time is certainly ripe as we are in the summer doldrums (for the US).  This is the opportune time for them to put their plan in motion because most of us are in a lull and not really paying attention to the ways of the world.  Historically they act when we are most oblivious, now days most of us are oblivious all the time.

There has been an uptick on the political division causing a huge crevice between the right and the left, in fact it seems that it is pushing people to start the next civil war.  History shows that when the economy is failing the best way to boost the numbers it to perpetrate a war whether a world war or a national war.  They have been and still are inciting a world war in Syria and other parts of the middle east, but so far they have not been successful.  Now their impetus seems to have moved to inciting a national war by pushing the immigration issue and calling for civil uprising against members of the current administration.

Another facet is the ongoing investigation for the ‘Russian collusion’ is failing, the number of political members having sealed indictment levied against them and the number of incumbent politicians resigning.  It should be an interesting upcoming election.  The democrat’s belief they would be recovering control of the senate and the house is definitely in question but the republicans are resigning en masse.  Maybe the illegal migrants will be voted in and the US will once again be the property of Mexico, just a musing but anything seems possible in our dystopic nation.

I also thought it might be related to the Brexit, now assured.  I was not able to tie the two together.  But there may be some connection as over the last year London has been the recipients of large amounts of liabilities for EFPs from the COMEX.  The UK’s ability to cover the metal short contracts with physical is just as doubtful as the US’s ability.  This is solely based on my assumption that there is a minimal amount of actual physical gold remaining in the US’s or the UK’s vaults.  I believe that the physical metals were already shipped to the BRICS countries and the US and UK are left with paper.

I believe this will be one summer that will go down in the history book as the downfall of the western supremacy or should I say hegemony.

 

Russians Turning US Bonds Into Gold

Source: giphy.com

The saying is that money moves from weak hands to strong hands, this may sound like a old wives tale until you take the time to look at the movement of value.  As you may know, the US dollar is hardly worth the paper it is printed on.  The value is being shored up by manipulation, this is also true of the stock prices.

One ploy that is employed to shore up the dollar is to hammer the price of precious metals to unsustainable lows.  This practice is being exploited by the Russians, they are using their stockpile of deprecated US bonds to parley them into gold.  They are depositing the bonds in US banks and using their deposits as collateral to purchase physical gold.

If you have been following, the major holders of the US debt are working to divest their holdings but they are divesting in a way that won’t cause the US to implode.  Implosion of the US economy would result in losses that the BRICS wish to avoid until they divest their holdings.

As a follower of the GoldenJackass.com, I can appreciate some being put off by Willie’s brash demeanor but he imparts with what I believe it insightful analysis.  He doesn’t pull punches and although his predictions may not be accurate if judged by a timetable, they are fairly accurate based on trends.  Between Willie and Celente, I get some valuable insight as they both have a good grasp on reading between the lines.  Both are somewhat brash but the main reason I follow them are for the acumen not their personality, I honestly appreciate their fervor and their off the cuff presentations.

It seems that the BRICS are working to stockpile physical assets while the western countries insist on playing with monopoly money.  I’m just PATIENTLY waiting for the Russia or China to play the trump card (no pun intended but the pun is valid).

Asian Nation Dumps Dollar and Yuan

Source: rt.com

A neighbor of China, Kygyzstan has been amassing a sizable gold reserve in relation to the size of their country.  They have international reserves of about $2 billion and they have stockpiled about 16% of this reserve in gold, their goal is to build the percentage to 50%.

The country’s Central Bank Governor said “The rules of the game are changing.  It doesn’t matter what currencies we have in our reserves;  dollars, yuan or rubles all make us vulnerable”.  The governor probably makes this assessment based on what occurred in 2015 when the country’s currency (som) fell to record lows due to the devaluation of the Russian ruble.  After that, the country increased its gold reserves from 8 to 15%.

Kyrgyzstan’s largest export is gold, the country mines a large amount of gold.  The governor believes it is far more prudent to maintain the mined gold in the country’s reserve instead of exporting it.  The stored gold can be converted into the currency they need for trade.

This is likely to be a growing trend as the currency wars and the trade wars escalate among the countries of the world.  It is the opinion of some that precious metals are real wealth and fiat dollars are just representations of precious metals.  As the economies of the world’s countries move towards collapse, more pundits are moving to the conclusion that precious metals are the real wealth.

It is true that one can not eat gold or silver but it is more likely that someone would be more willing to trade for gold and silver than fiat currencies.

Friday’s Magnitude of Paper Dumped

Source: silverdoctors.com

Semantics is frequently ignored when people discuss precious metals.  It is important to precisely describe the difference between physical and paper when one speaks about the metals.  The COMEX is a market consisting of paper contracts and the price quoted is only relevant to the price of the paper contracts.

The problem exist that this price is seen by the majority of people as the price of physical gold and silver and the price is easily manipulated.  This is precisely what occurred on Friday.  Over a 60 minute period about 90,300 contracts were dumped on the COMEX, these contracts are equivalent to 9.03 million ounces of gold but remember not physical gold.

If one examines COMEX, there was reportedly a total of 9.01 million ounces of gold of which only 507,453 ounces were listed as available for trading.  There are 2 categories in COMEX, registered and eligible.  Only registered is available for trading.

Since the traders using COMEX rarely take actual delivery of the physical metal, the COMEX market should not be relied on to provide a realistic price of the physical metal.  The manipulated price provides some buyers to obtain physical metals at a lower price but buyers wishing to secure large quantities will probably not be able to find a seller because the physical supply is limited – again remember that the supply listed on the COMEX is paper not physical.

It has been long awaited for the COMEX to default when the holders of the futures contracts which come due request delivery and the COMEX is unable to provide the physical.  When this occurs it is speculated that the price of actual physical metals will soar in price.

Email With Insight

Source: kingworldnews.com

After Friday’s monkey hammering on the metals, I was seeking other people’s opinion on what caused the beating.  There was, in my opinion, no obvious reason for the massive volume of paper contracts floated on the COMEX which resulted in the price drop.

Source: kitco.com

Source: kitco.com

I came across this email submitted to kingworldnews.com and found it to have many valid points.

“Unfortunately it’s starting to look like truth doesn’t matter and restoring rule of law or money with store of value will not happen. My own conviction is that maybe the 5g network has to be in place in the US before the plug is pulled. And then the blockchain money controlled by Central Bankers will be all powered up to turn on and off full spectrum.

China and Russia seem to be complicit in the construct of this world order scheme, and clearly they are already benefitting with what everyone claims is their long game to not crash the US dollar or market and win by attrition. My previous belief was China and Russia would reinstate the physical metals markets as the price discovery mechanism. For the last few months I have put that belief into question and began considering other details that would counter my belief. Somehow my cognitive awareness is telling me that the Ponzi scheme will end but not like I envisioned.

When it ends, all countries will have been complicit in the means and the end from day one. And hardly anyone is going to get away without being caught without their pants down or without a shackle around their ankle. All one can do is their best to eat healthy food, drink clean and pure water, breathe clean air, avoid the fire of big Pharma, protect themselves from EMF and continue to question the truth, even if to the rest of the world truth doesn’t matter.”

I’m sure many of you have your own opinions on the beating, here are some of mine.  Just to mention, these are just opinions.  The comment on the 5g network is valid, as this network will increase the speed along with other nefarious features.  The network requires much added infrastructure which translates into increased costs.  To pull the plug before this system is complete would inhibit their ability to hack the mobile network and due to the additional costs, they might have to print more money to pay for the towers required.

Regarding the involvement of China and Russia, I am in total agreement.  I would wish that their motives are to restore a stable currencies backed by precious metals but one cannot be certain of their overall plans.  There is the possibility that they will vent some of their anger to destroy the western hegemony.

Lastly, the point that all countries will be affected is on point.  There is no way that the new financial and political changes will not alter how global trade is transacted in the future.  I anticipate that the countries which have been living high on the hog for the past decades will have a rude awakening.  The only thing that that can not be taken away is one’s knowledge.

 

East Stocking Up on Cheap Gold

Source: rt.com

As the US works to suppress the gold price because they are attempting to prop up the value of the dollar, Russia and China have stepped up their buying to build up their stockpile.  According to the World Gold Council, central banks have purchased 42% more gold in the first quarter than they did in the first quarter of 2017.

Russia has been steadily increasing their gold holding for the past 2 decades.  Since 2000, Russia’s gold reserve increased by 500%.  Last month, they became one of the top 5 countries in their holding of gold.

China and Russia are not the only countries building up their gold holdings.  Turkey and India have increased their stockpiles to attempt to diversify their financial holdings away from the US dollar.  We have witnessed several countries repatriating they gold stores away from western countries, primarily the US.  Probably a good indication of these countries motives to initiate future ties with the BRICS.

The US appears to be caught in a trap of their own making.  If they don’t work to support the dollar prices of imported goods will skyrocket but to make the dollar stronger they must hammer down the precious metals.

Precious Metals Attacked

Source: kitco.com

Examining the above graphs, you will notice that both metal sustained a dip at about 8 to 8:30 AM.  Their normal modus operandi is to hit the market about 10 AM.  Why did they diverge from their standard plan?

 

Some point the timing to the release of the BLS report which took place at 8:30 AM.  By the way all times listed are EST.  The BLS report was the CPI for May 2018.  The CPI is the government’s measure of price inflation.

 

The next question is what does the price of metals have to do with the CPI.  The link is a mechanism that affects adjustments to payment to people receiving government entitlements like social security and federal retirees.  It is know as a ‘cost of living adjustment’.  The metals are historical known to be inflation hedges.  This means that by ‘normal’ economic theory, as the value of the dollar falls PMs should rise in response.  I say ‘normal’ because of actions just like this one.

 

If both the CPI and the ‘inflation hedges’ show that inflation is rising, this would result in the COLA allowance to be increase to account for the rising prices.  By raising the entitlement payments, the government will have a greater liability (they will have to pay out more money).  Social security is already slated to run out of money in about 14 years, if they monthly pay out is increased, the projected time till it runs out of money will be shortened.

 

By hammering the price of the PMs, they have some fuel to say that the CPI report was an anomaly and they will point to the PM prices to show that inflation is not on the rise.

 

Source: silverdoctors.com

Greenspan Returns to Goldbug

Greenspan penned ‘Gold and Economic Freedom’ in 1966. The following excerpt sums up his position,

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”

His argument is relevant today. I believe we are in the throes of a severe financial catastrophe. When the other shoe drops, the people who do not have some of their assets outside of the system will be devastated. According to some financial pundits, once the fall becomes apparent, it will be too late to divest because of those whom waited and held their assets in banks, stocks and bonds will all be trying to exit at the same time.

Source: silverdoctors.com

Go Texas

Source: newsmax.com

Texas will open its own bullion depository this month bring back a vestige of the long gone days of the gold standard, in my opinion it’s about time. Hopefully it will have more physical gold than Fort Knox and Texas will allow it to audited.

The Texas Bullion Depository will be the first state government owned depository. Customers will be able to deposit and withdraw their bullion AT WILL. This is already 1,000% better than Fort Knox. The depository will start as a service to the general public whom want their physical gold stored.

Source: newsmax.com

Gold to Silver Ratio

The gold to silver ratio went up to 82, that’s crazy. As of this post, silver is around $16.50 and gold is about $1325 bring the GSR to about 80. The GSR has only been this high on two occasions since 1915. Today both gold and sliver were hammered, as usual.

The open interest has come quite a bit most likely due to EFP. Many metals contracts were transferred to the London market. With the Chinese market being closed since last Wednesday for the Lunar New Year, the manipulators had plenty of time to monkey hammer the precious metals and they took advantage.

When the eastern markets open, the metals will most likely rise as once again the metals will move to the east.

Source: silverdoctors.com

Source: macrotrends.net (GSR chart)

GSR

Britain’s Gold Boom

The gold mine located in the village of Tyndrum is almost set to be green lighted for opening. A Scottish mining company believes that there is about 200,000 ounces of gold in the Cononish Mine.

New plans which will improve the mining operations to be more environmentally friendly may have won over officials. Scotgold Resources Ltd. says that opening the mine will create 63 new jobs as well as increase the business for local suppliers.

In addition to gold, Scotgold expects to be extracting silver as well. So far the company has raised 3 million pounds from their shareholders. It is still trying to get commitments from investors for an additional 7 million pounds.

Next week the planning committee at Loch Lomond and the National Park Authority are visiting the site and it is rumored that after this visit, Scotgold will receive the final approval.

Source: express.co.uk

Source: express.co.uk

Paper Gold Trading Days Numbered

Vince Lanci, founder of Echobay Partners said “The last three days have reconfirmed my commitment to a much higher gold price in 2018. We are making higher lows for the year – the recent behavior made me nervous, but something very telling happened in the last three days”. In technical analysis parlance, when a trend forms with higher lows, this indicates that a pennant is forming and it points to a upside break out. But as I mentioned in previous posts, it is hard to bet on the technical signals as they have ‘painted the tape’. I still remain hopefully that there is a breakout to the upside.

If Lanci’s predictions are correct, gold will hit $1,700 an ounce. On Tuesday, there was a short covering rally and Wednesday there was a 10,000 contract increase. According to Claudio Grass of Precious Metal Advisory Switzerland, the total trading volume in the London Over-the-Counter (OTC) gold market is estimated at the equivalent of 1.5 million tons of gold and only 180,000 tons of gold have been actually been mined to now.

If one were to examine the number, it would be clear something is very wrong. A seismic blow up is coming in the market will this be the year?

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