It’s Saturday afternoon on the flight home from Ft. Lauderdale, following a wonderful day at the beach with my family – including my father, who has lived here since 2009. Thursday night’s Q&A event was a tremendous success – with 200 people attending, 500 participating in the interactive webcast, and Kerry Lutz doing a tremendous job hosting. To that end, the entire three-plus hour proceedings were uploaded on YouTube. And for those living in Houston and Chicago, we hope to see you at our upcoming events on May 20th (hosted by Daniel Ameduri of Future Money Trends) and June 24th.
As for what occurred outside the cloistered world of our Florida event, it’s difficult to put into words the madness of what were once markets, in an environment where economic fundamentals catalyzed movement until roughly 15 year ago. In equities, the “Dow Jones Propaganda Average” is now being propped by the “dead ringer” algorithm on roughly 90% of all trading days – including yesterday, when the top stories were the lowest manufacturing PMI since 2009; plunging Philly Fed and Chicago Fed activity indices; 12,000 job cuts from Intel; and horrific earnings announcements from economic bellwethers Microsoft, Google, Starbucks, Caterpillar, and Visa. To that end, I can’t wait to see what the Fed and Bank of Japan say at their respective policy meetings this Wednesday – as it sure as hell better be mega-dovish.
As for commodities, even I’m dumbfounded at watching oil pushed back to $43/bbl (which is still a horribly low number), in the face of unrelenting negative news flow – like Schlumberger and Halliburton noting the historic E&P “cash crisis”; and Saudi Arabia and Russia, just one week after the epic failure in Doha, producing crude at record levels. Just like equities, which have rallied for 2½ months without a shred of incrementally positive data; amidst plunging corporate earnings; and P/E valuations akin to the 2000 bubble top – oil prices have been manipulated in unprecedented fashion – per the this Zero Hedge-quoted statement from a long-time trader.
“The insanity has now fully spilled into the commodity markets – to which I professionally made a transition to after the 2008 crisis, from the financial markets, simply because I believed commodities would still function according to true fundamentals.”
But alas, they don’t; and like equities, fixed income, and essentially all markets these days, the historic imbalances created by such gross, world-destroying manipulations must be reckoned with – likely, far sooner than most can imagine. That said, the blatancy, heavy-handedness, and desperation of the manipulation of all financial markets combined, doesn’t hold a candle to Precious Metals; i.e., the canary in the coal mine the powers that be are so terrified of losing control of.
Practically speaking, they have nearly lost the war already – as in all currencies, gold is in a bull market; in most cases, for more than a year. In fact, gold is either near, at, or above all-time highs nearly everywhere. And now that silver has taken off, yielding a plunging gold/silver ratio, the writing is on the wall of what’s to come. Throw in surging institutional demand – as evidenced by soaring, and resilient, mining shares; surging bullion ETF holdings; and rising closed-end bullion fund premiums; and it couldn’t be clearer that the “New York Gold Pool” – which commenced just before the turn of the century – is on its last legs; just as the “London Gold Pool” in 1968. Only this time, a lot more is at stake; for the global monetary system, political leadership, and social fabric.
With each passing week, new “game-changing” events are exposing the Cartel in plain site; from the January 28th silver “fix” that prompted many of the world’s largest miners to no longer trade on the LBMA; the BOJ joining the QE-expanding ECB in negative rate territory; Sprott’s PSLV silver fund executing its first offering (and $86 million silver purchase) in five years; and Deutsche Bank admitting it has manipulated the gold and silver markets for 15 years. Consequently, gold, silver, and platinum have decidedly broken out in dollar-priced terms – breaking above long-time, Cartel-generated resistance levels to reach multi-month highs. And trust me, when mining shares start leading the metals, and silver leads gold, we are unquestionably in a bull market.
To that end, what we witnessed the past three trading days was, even for me, incredible to watch. Starting on Wednesday; when, as the PPT again “dead ringer’d” the Dow higher, the Cartel’s new “lines in the sand” at $1,250 gold and $17 silver were defended first at the usual “2:15 AM” EST open of London paper trading; and then, for the third time in the past month, in the last half hour of NYSE trading.
Thursday was even worse – with gold and silver, on the first day of the Shanghai Fix, rising as high as $1,270/oz and $17.60/oz, respectively, before being smashed down – amidst massively PM-bullish economic data, at the 10:00 AM EST close of physical PM trading; closing trading session at, what do you know, exactly $1,250/oz and $17/oz.
That said, Friday was worst yet; as even with silver surging anew – this time, to $17.30/oz – the Cartel capped gold with a vengeance at $1,250/oz. In fact, during the morning, reflecting what I noted above, the “red-headed stepchild” silver was actually thwarting the Cartel’s efforts to smash gold! Finally, at the 12:00 PM EST “cap of last resort,” with no other markets budging, amidst a slew of “PM bullish, everything-else-bearish” news, the Cartel were finally able to waterfall decline gold, getting it to plunge $20/oz before closing down $16/oz. However, silver closed down a mere $0.02/oz, as the Cartel yet again failed to reverse the powerful, real-metal-buying-supported silver surge. And by the way, note how identical silver’s charts were on both days, showing the entire, rapidly-learning world just how obviously it is manipulated. Let alone, in light of last week’s game-changing Deutsche Bank admission.
To a man, the most amazing aspect of what’s going on done in such a short amount of time. And yet, as I wrote is the Cartel’s abject desperation, in naked shorting more paper metal than it has ever in “about those COTs” and other articles, they are decidedly failing to push the metals down – particularly silver, which is challenging 52-week highs nearly every day now. Again, because we are back in a bull market.
I mean, look at these charts of “commercial” – i.e., Cartel – shorting. In silver’s case, to nearly its highest level ever; and for gold, its largest short position nearly three years. And given that the latest COT data point is as of Tuesday’s close – before the aforementioned three days of Cartel ignominy – I can only imagine where their short positions stand today; particularly in silver, which still sits just under $17/oz, after taking the Cartel’s best shots.
To that end, the last time I saw silver act so strongly was right after PSLV went public in late 2010 – before surging from $24/oz to $50/oz in just seven months’ time. And given that today’s silver (and gold) fundamentals are many multiples more powerful, it’s only a matter of time before the Cartel, and its minions, are utterly destroyed. Frankly, I wouldn’t be surprised to see things play out just as they did in 1980, with the last 90% of the bull run occurring in the last 10% of time. And even if PMs’ ultimate trajectory is different, their gains will be far greater. As this time around, there will be no governments or Central banks capable of slowing them down.
Ladies and gentleman, I have been shouting from the rooftops that the dollar-priced gold and silver bottoms are in; and now, believe the “Cartel’s last stand” is directly ahead of us. As usual, the far tighter silver market is leading Economic Mother Nature’s real money troops; and frankly, I’d be shocked if they don’t “break through enemy lines,” to some extent, this year. And when they do, you will you be thankful to have physical metal in your possession, and terrified at the coincident changes in “civilization.”