Stocks and Precious Metals Charts - Take It To the Limit, One More Time - The Downward Spiral of Dumbness

 

“Benign remedies are for the innocent.  Misdeeds, once exposed, have no refuge but in audacity.  And they had accomplices in all those who feared the same fate.” 

Tacitus, Annals

 

"If we are dealing with psychology, then the thermometers one uses to measure it have an effect.  I was raising the question on the side with Governor Mullins of what would happen if the Treasury sold a little gold in this market.  There's an interesting question here because if the gold price broke [lower] in that context, the thermometer [price of gold] would not be just a measuring tool.  It would basically affect the underlying psychology. 

Now, we don't have the 'legal' right to sell gold but I'm just frankly curious about what people's views are on situations of this nature because something unusual is involved in policy here.  We're not just going through the standard policy where the money supply is expanding, the economy is expanding, and the Fed tightens. This is a wholly different thing." 

Alan Greenspan, Federal Reserve Minutes, May 18, 1993

 

"We looked into the abyss if the gold price rose further.   A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.   Therefore at any price, at any cost, the central banks had to quell the gold price, manage it.  It was very difficult to get the gold price under control but we have now succeeded.  The US Fed was very active in getting the gold price down.  So was the U.K." 

Sir Edward 'Steady Eddie' George, Governor Bank of England in conversation with Nicholas J. Morrell, of Lonmin Plc, 1999

 

Stocks attempted to rally, but fell into the red in the afternoon, and went out near the lows.

The Dollar dropped to the mid-range of the 92 handle.

Gold and silver rallied back a bit from the recent 'mini-me' smackdown.

The gold bullion readily available in Hong Kong for Comex delivery is getting a bit sparse again.

Time to milk the ETFs for gold bullion again?

Robbing Peter to pay Ping.

Just keep the music playing as long as the punch and profits are flowing.

They'll never learn.   Because their paychecks depend on maintaining a downward spiral of dumbness.

And so gold keeps flowing, from West to East.

Have a pleasant evening

 

 

Physical Gold Withdrawals from the Shanghai Gold Exchange and The New Silk Road

"Time is coming when markets search frantically for physical collateral to find that paper far exceeds underlying collateral for several metals and other resources.    I am warning that when markets fall in sustained negative response to bursting bubbles, widespread deleveraging will reveal insufficient hard collateral underlying traded asset-backed securities.  The words rehypothecation and hyper-rehypothecation may be rediscovered or remembered again, forgotten somehow during much of decade since the Great Financial Crisis."

Harald Malmgren


"Gold has 'worked' down from Alexander's time.  When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory."  

Bernard M. Baruch

One might wonder why these countries are steadily acquiring such enormous inventories of gold bullion.

And they might even notice that since around 2008 the central banks of the world have become net buyers of gold, after many years of managed selling.

Gold is flowing from West to East, and into strong hands and official vaults as security against a changing monetary landscape.  And except for the occasional use of subtrefuge and force, it will not return to the public markets anywhere near to these current valuations.

London Gold Market Imports and Exports - Currency Wars

"Fraud and falsehood only dread examination.  Truth invites it."

Samuel Johnson

Gold is flowing from West to East.

Net central bank purchases of gold in 4Q 2018 were the highest on record.

So few notice—  and even fewer really understand.

Money is power, so do not expect this transition to go smoothly.  Or quietly.  Or honestly.

C'est la guerre des monnaies.

Truly, there is nothing new under the sun.

New Silk Road Physical Gold Demand Since 2005

Gold is flowing from West to East.

What Do China and Goldman Sachs Have in Common?

Gold is not only flowing from West to East.

It is also flowing into the house account at Goldman Sachs.  Or at least the paper claims for it in New York.

Below is the monthly report showing the large amounts of physical gold which have been steadily flowing through the Shanghai markets into strong hands in China.

Few commentators are talking about this.

What is less familiar, and what I have not read about much, is the very large amount of gold that Goldman Sachs has been taking delivery on the Comex this month.

Attached are a few of the clearing reports below.

Notice that the big takers are the house account at Goldman, and some presumably large customer at JPM.

What's up with that?

Precious Metals Flows In Trusts and Funds

The ebb and flow of the precious metals Grift-on-the-Hudson.

Physical Gold and Silver Flows and Traders Comex Positions - All Quiet on the Western Front

Mischief managed?

Precious Physical Metal Flows From Trusts and Funds - Managing the Gold Float

"He who sells what isn't his'n, must buy it back or go to prison."

Daniel Drew

Unless you are a Bankster. Then you get to keep your gains, and get backstopped by the Fed for any losses.

Because you are just that systemically important, and politically well-connected.

In our priorities we value corporatist systems and their elite over people.

It looks like they are managing the physical 'gold float' fairly closely, shoving metal around the plate to make the global market seem fully functional.

Silver, not so much.  There does not appear to be much if any shortfalls in physical supply.

Let's see if the outflows continue to pause and reverse this week with the upcoming Non-Farm Payrolls Report.

Physical Gold Flowing Steadily Out of the US

Exhaustible supply meets seemingly insatiable demand.

There is a sea change underway in the global monetary regime that has been in place since the 1971, and the unilateral abandonment of the gold standard by Richard Nixon.   This current evolution is a major historic event, and as such, happens slowly for a very long time, and then all of a sudden, catching most by surprise.

The 'gold float' is the available physical supply at anywhere near current prices held primarily in the US and the UK for export to Asian Demand.

When the 'float' is exhausted higher prices, likely much higher, will be required to free up existing inventory held by strong hands and official sources.

History suggests that when the physical supply float collapses, and that information becomes known generally by markets, the gold pricing pool will also collapse, and suddenly so, because of the pyramid of leverage that is being shakily maintained.

The pool, the great gold pricing manipulation game, will continue until it can no longer be sustained.

Gold is being treated and traded as if it is just another currency, and is managed for all the reasons that currency prices are managed in a fiat monetary regime managed by central banks.

Unfortunately for them they can only 'create' gold through leverage and non-transparency.

Weekly Gold and Silver Flows In Funds and ETFs

Flowing, from West to East.

We seem to have indications of a durable bottom being formed.

Let's see if that trend continues.

Relative Scarcity of Physical Gold Prompts Large Drawdowns From Funds and ETFs

"It appears that there is a dwindling and overleveraged supply heading towards an unmanageable and relentless source of demand."

It is interesting to watch the ongoing management of physical gold holdings in the West.

Physical gold has been seeing large drawdowns from inventory during this price decline, but silver does not.

This is not due to some preference or matter of taste.   Physical gold for sale at these prices is in short supply, whereas silver is not.

Both are subject to speculative price manipulation in the paper markets.

The relentless demand from Asia is stressing the highly leveraged claims per physical ounce of gold in London and New York.

It appears that there is a dwindling and overleveraged supply heading towards an unmanageable and relentless source of demand.

The system will be maintained— until it cannot.   Although the game can be extended by a determined effort, no commodity pricing pool can last forever in the face of a stubbornly stable supply and a steady excess of offtake out of the pool, shenanigans and antics notwithstanding.

Physical gold is flowing from West to East, into the markets and strong hands of Asia. 

Bye bye gold.

The eventual resolution may be quite energetic in terms of price.