It’s early Wednesday morning; on what may, following this afternoon’s Fed decision, and tonight’s by the Bank of Japan, turn out to be a “day of Central banking infamy.” Which is why, before I get to today’s extremely important topic, I’m going to start with my fourth straight day of detailed “manipulation analysis.”
Frankly, nothing I have seen in 14 years in the sector has been as blatant, and desperate, as what I’ve seen in the last week – as the Cartel chaotically attempts, and fails, to respond to the hard fact that dollar-priced gold, silver, and platinum have joined PM markets in the world’s other 180 currencies in BULL MARKETS. And this, ironically, on the five-year anniversary of the May 1st, 2011 “Sunday Night Paper Silver Massacre.”
Thus, when you see a surge like last Thursday, when silver shot up to $17.60 – and gold to $1,270 – before the Cartel swooped in to “save the status quo,” you can be sure markets are simply saying “we’ll be back there soon.” Heck, silver almost got back there this morning (trading at $17.30 as I write); and my guess is, it won’t be too long before not only $17.60, but $18.00 will be in the rear-view mirror. To that end, the “all-time high” silver open interest and “commercial” short positions appear on the verge of proving, once and for all – notwithstanding whatever the Cartel attempts in the wake of today’s FOMC decision – that the “COTs no longer matter!”
As for such manipulative transparency, here’s what I wrote yesterday morning of Monday’s gold “trading” – followed by charts of not only Monday’s; but yesterday’s; and this morning’s trading – amidst an environment of “horrible headlines” such as miserable durable goods, PMI service, and consumer confidence numbers. And oh yeah, last night’s catastrophic earnings report from Apple, whilst Exxon was stripped of the triple-A credit rating it held for the prior 86 years. Not to mention, Bitcoin dramatically breaking out, in yet another glaring example of just how scared the world is becoming of the inevitability of a “cashless society,” featuring negative interest rates. Heck, even CNBC is now openly “fighting the Fed,” in proclaiming it would be “crazy” for them to raise rates.
“And finally, the prototypical gold “up day” – starting with a “2:15 AM” smash; capped at the 10:00 AM close of physical gold trading (i.e., “key attack time #1); and ending with the usual end of day “walk down.”
In this case, desperately clinging to the nearly three month “line in the sand,” at the “key round number” of $1,250/oz that appears ready to be violently breached – likely, permanently – to the upside. As an aside, I have not seen the “Cartel Herald” algorithm – i.e., the “pennant formation” shown below – a single time in “Dow Jones Propaganda Average” history; as opposed to gold and silver, where every uptick in the 14 years I’ve been watching has been stopped by it.
That said, it’s time to move on to today’s extremely important topic, of how the walls are not-so-slowly caving in on the gold Cartel – as the reality of history’s most violently bullish fundamentals starts to overtake the fraud of covert, unreported Western Central bank dishoarding; naked shorting; and propaganda – care of the “ultimate Chinese finger trap.”
To that end, long-time readers are well aware that I use the term “mosaic” quite often, in describing the incorporation of dozens of “factors” into my analysis of Precious Metal markets, to come up with a broad-based, “best guess” prediction of the future. As opposed to what the vast majority of today’s “analysts” and newsletter writers do; in utilizing a single input or theory – often, involving a conspiracy of some sort, or “proprietary” technical analysis – to explain market movements.
In the case of Precious Metals, each “compartment” of my mosaic is ragingly bullish. Cumulatively speaking, on an inflation-adjusted basis – let alone, considering “peak production” officially passed – more so than at any time in history. However, the biggest “piece of the puzzle” is undoubtedly China. Which, with a 1,000-year history of failed fiat currencies ingrained in the DNA of its 1.5 billion citizens, is hell bent on not only protecting itself from the collapse of history’s largest, most destructive fiat Ponzi scheme, but emerging from the wreckage as the world’s leading economic power. Which, as history tells us in spades, is a role always assumed by the nation with the most gold.
In my view, no article puts the “ultimate Chinese finger trap” into perspective better than this one; published yesterday, and titled “these five trends in China will change the gold market.” And change the market it most certainly will – for generations to come!
In a nutshell, the five aspects of the “mosaic” discussed in the article are the following…
- China officially participates in the London gold fix (as of June 2015)
- The renminbi is in the IMF basket (as of November 2015)
- China officially participates in the London silver fix (as of March 2016)
- China now generates its own gold fix (as of April 2016)
- Chinese gold production is slowing
- Lack of other alternatives for Chinese investors
In reading the authors’ commentary on these topics – and dozens of articles the Miles Franklin Blog has produced on such issues – it becomes crystal clear that not only is the “ultimate Chinese finger trap” suffocating the life out of the dying gold and silver Cartel, but at a rapidly accelerating rate. And now that global money printing, and debt accumulation, is going parabolic, the odds of this “mosaic” coalescing to end two decades of manipulative infamy – and the most destructive financial status quo in centuries – have never been higher.