02 December 2015

Gold Daily and Silver Weekly Charts - QE Bunga Bunga with the ECB - Deliverable Gold Leveraged 325:1

"A nation's economic salvation does not lie in the amount of money its rich inhabitants can squander recklessly.   A nation's economic salvation lies in the amount of money its inhabitants can save and invest after providing themselves with all the necessaries and all the reasonable comforts of life."

B. C. Forbes

"Ordinarily, the financial risk in a market, and hence the risk to the economy at large, is limited because the assets traded are finite. There are only so many houses, mortgages, shares of stock, bushels of corn or barrels of oil [or bars of gold and silver] in which to invest.

But a synthetic instrument has no real assets. It is simply a bet on the performance of the assets it references. That means the number of synthetic instruments is limitless, and so is the risk they present to the economy. Synthetic structures referencing high-risk mortgages garnered hefty fees for Goldman Sachs and other investment banks. They assumed an ever-larger share of the financial markets, and contributed greatly to the severity of the crisis by magnifying the amount of risk in the system.

Increasingly, synthetics became bets made by people who had no interest in the referenced assets. Synthetics became the chips in a giant casino, one that created no economic growth even when it thrived, and then helped throttle the economy when the casino collapsed."

Senator Carl Levin

If the Fed, the Congress, and the professional enablers and courtiers to the power of money understood these simple, yet profound truths of the economics of a stable and sustainable society, we might hope to enjoy the long awaited recovery, and peace and prosperity, that has eluded so many in the West for far too long.

Gold was slammed lower with the London PM fix and the opening of trading in New York this morning, down to test the 1050 level on the spot price.

Silver managed to hold on to the 14 handle.

The CME precious metals director will be leaving effective December 11.

Tomorrow Mario Draghi and the ECB may reveal some stimulus plans for the Euro area. They are likely not to be stimulative of the real economy, but favorable to the financial sector. If it is something in the QE line of recreational monetary drugs, it will be interesting to watch them do it, given the predominance of negative yields in the tonier Euro area bonds.

Janet Yellen gave a rousing speech today to lay the groundwork for a Fed rate increase in December. It was so painful to watch that it roused me to catch up on some shows on my DVR. I almost feel sorry for her, having to clean up the messes in the real economy left by Greenspan and Bernanke.

There were no gold deliveries at The Bucket Shop yesterday. What a surprise. There were some more takes in silver however, and those are shown below.

The warehouses continued to show a slow leakage, with some actual buying and selling and using of bullion taking place in silver, but little to none in gold.

The potential claims or 'leverage' per ounce of registered gold has hit a new all time high of 325:1, despite a marked decline in the open interest.

I hear that the hedge funds and mo-mo players are at a 14 year historic short interest.

There was intraday commentary about some of the precious metal trusts and funds here.  One highlight is the marked decline in Western gold bullion inventories, a phenomenon not really seen with silver that has also experienced price declines over the same period.

When these jokers blow up the global markets again, and I am reasonably confident that they will, I hope that if they hold out their hands for another bail-in that someone slaps the cuffs on them.  I doubt it, but it is still a worthy aspiration.

Once again Hillary has sidestepped the questionable entanglements of the monetary sort which she maintains with Wall Street by citing their admiration and gratitude for her brave and decisive actions in the aftermath of 9/11. 

Non-Farm payrolls are on Friday.

Have a pleasant evening.