17 February 2015

Gold Daily and Silver Weekly Charts - How Unusual

"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, [bars of silver], or barrels of oil 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...

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."

US Congressman Carl Levin

Obvious, heavy-handed, and pretty clear to anyone who will look at the tape.
Such are the times in currency wars and financial coups d'état.

It was a concerted dumping of contracts at market in the quiet early hours of trading precipitated by no news, amongst players who will be unlikely to exchange any of the physical commodities that they are 'buying and selling.'
This is not price discovery.
This is will not achieve its intentions, unless those involve a severe market dislocation, and a break in trust in the integrity of the financial system, starting at the periphery of the Dollar empire.
The fraud and looting will continue until confidence improves.
What could go wrong?
There was intraday commentary here and here.
Have a pleasant evening.