It’s Monday morning, and we still haven’t seen roughly 275,000 ounces standing for delivery from the December COMEX gold contract actually be delivered. If it does – and JP Morgan, HSBC, or Scotia Macotta do not receive “Hail Mary” receipts of new, physical supply to offset such a drain – COMEX registered gold inventories will plunge to roughly 200,000 ounces; worth barely $200 million at current prices, or 95% below the levels seen before April’s blatant “Alternative Currencies Destruction.” Conversely, if it doesn’t, how else can the situation be described but default? And no, at this point the Cartel can’t get away with “cash settlement”; as, per noted above, the holders of the underlying December contracts have already stood for delivery.
In other words, yet another massively bullish factor for the Precious Metal market; among the countless we have discussed in recent months. In fact, the great John Williams of Shadowstats.com has long forecasted 2014 to be the year hyperinflation takes hold in the U.S. – per this gripping interview from last weekend. God help us all if he is correct; but even if not, it’s only a matter of time before it does – and subsequently, PM demand takes off like that of ice cream in July. Or heck, like Bitcoin over the past week; which, by the way, cannot be naked shorted.
Per the title of today’s piece, the U.S. government – with help from other destitute, desperate Western governments – have created the “most lopsided trade in financial history.” We hate to use the word “traded” when referring to gold and silver, as ownership of such ounces should be utilized to preserve wealth from inflation, as opposed to “making money” from appreciation. Still, PMs are in fact market-traded assets; and thus, we of course aim to “buy low” and “sell high.” In our view, we have NEVER seen gold and silver prices so inexpensive – relative to fiat money created, mining costs, and just about any other tangible metric one can consider; and better yet, it’s still widely available in most regions. Except, of course, in places like India, Vietnam, and shortly – your home nation. And by the way, some of our silver products have up to a 1-3 week shipping delay after payment has cleared (refer to our website for payment clearing times).
To demonstrate just how lopsided the Cartel’s 2013 attacks have made the PM market, we present Exhibit A; i.e., “Commercial” short positions in COMEX paper gold and silver contracts. To long-time readers, these charts are nothing new. However, within the mosaic of this piece, it makes sense to show, yet again, that said “Commercials” – i.e., the ultimate market insiders – are on the verge of going net long for the first time in the entire 13-year bull market.
Then, of course, we have the suicidal position of the “large speculators”; which typically take the opposite position from the commercials, and always lose. Why, do you ask, do they continue to take such punishment? Simple, because it’s human nature to buy when things are rising, and sell when they’re falling; in this unique case, as Cartel algorithms wreak havoc on the technical “black boxes” they rely on for “buy” and “sell” signals. And thus, we present the COMEX “large speculators”; holding their most bearish gold position since at least 2006.
Next up, some additional, equally telling charts; care of this fantastic article by Alisdair Macleod; starting with the COMEX net long positions of the “largest four” Commercials – which presumably, are led by none other than JP Morgan. As you can see, they have gone from being MASSIVELY short over the past three years – and per the charts shown above, the entire 13-year PM bull market – to massively long in gold, and nearly long in silver.
Conversely, the “managed money” – i.e., the equivalent of the “large speculators” noted above; are massively short both gold and silver. Not only is such a position eminently dangerous – bordering suicidal; but in light of what we wrote last week – in “Charts even we can appreciate” – they have been foolish enough to do so amidst not only the most bullish fundamentals of our lifetimes, but technicals.
Frankly, we are in awe of how the global political, economic and social situation is unfolding; and thus, cannot emphasize enough how imperative it is to act now to make sure you are PROTECTED from what’s coming. Simply give us a call at 800-822-8080 and we’ll be happy to answer any questions you might have!