Max Keiser and Mark O'Byrne Discuss the Gold and Silver Markets

"The tyranny of a prince in an oligarchy is not so dangerous to the public welfare as the apathy of the citizens in a democracy."

Montesquieu

I do not see the NSA involvement which Max mentions.  It does not seem to be necessary if you have big market principals and insiders involved, able to operate in secret with the acquiescence of the regulatory bodies and exchanges.   And if there is a need to obtain more specific information, the industry dominant Bloomberg terminal offer a wealth of information about how and when it is being used.

I do think there is serious fraud and abusive market rigging going on, as we have seen in LIBOR, energy, ISDA spreads,  advance selling and leaking of key economic data, insider trading, Bernie Madoff, MF Global, the London Whale, and now currency markets.

There is a general disregard for the rule of law when it is overruled by 'expediency.'   And the threshold for overruling it has gotten lower and lower, to whenever it is of benefit to one's friends and associates, rather than isolated to key issues of national interest. That is a corrosive condition.    It is crony capitalism, and it is destructive of real economic productivity and of markets.

It is ironic that the freest exchanges of information on some of these market abuses are occurring in Asia, and in governments that have made much less pretense to transparency and freedom of information than the US and UK.  They see what is coming and are making it easier for their people to protect themselves.  This is because they are not beholden to the Anglo-American banking cartel.

I am sure that the Congressional hearings that would follow the 'failure to deliver' of a major bullion bank or exchange will be very impressive, full of faux anger and histrionics from outraged politicians.  But like the MF Global hearings, I would expect much noise and heat, little light, and no effective redress for those who have been harmed, 'bailed-in' if you will. 

I expect the whole thing, all the leverage, deception, and fraud to be swept under the rug, and the event attributed to the course of human events.  The madness of crowds, practically an act of God, like the rewriting of the CDO/Housing financial crisis.  It is the most likely outcome in a credibility trap.  And apathy just encourages greater and bolder excesses and abuses.  Greed and fraud are usually not self-limiting, but self-reinforcing. If it worked once it will work again, so keep expanding.  Nothing is sacred.

Here is a reminder of the fundamentals.

Ted Butler: Busting the Perfect Crime

Obviously I do not know if the CFTC is going a good job of regulating the metals markets or not.

And that is a big part of the problem. I have little confidence that they are doing a good job of maintaining honest and efficient markets based on what I am seeing in the futures markets almost every day.

For an agency to have an ongoing investigation of manipulation in a global market like silver, with NO offical report having been issued after almost five years, is not up to the expectations that the American people have for its government.

Indeed the silence of the Agency borders on arrogant disregard, given the many, many complaints of the appearance of irregularities it has received.

This is especially true in light of the several recent revelations of egregious market manipulation by the Banks in LIBOR, energy, and derivatives markets. And these are some of the same actors in the alleged silver manipulation.

Here is what Ted Butler has to say about it. And it makes sense to have the GAO review the Agency to reassure people that they are doing their jobs properly, and if there is a problem with oversight from within the Administration itself, whether through aloof indifference, or the undue influence of outside parties.

And if there is some manner of funding problems and manpower, I am sure that the CFTC would like to take its priorities from the people whom it serves and whose confidence is its highest mission, and not the Banks and Exchanges whom they are expected to regulate.

Busting the Perfect Crime
Theodore Butler
May 24, 2013 - 12:23pm

A subscriber recently commented that the Oligarchs who rule Russia only wish they got to run things as efficiently as how JPMorgan and the big banks control our financial markets, particularly in the trading of precious metals. Based upon the last few days, it’s hard to argue with that. On Sunday evening shortly after 6 PM, the price of silver was taken down 10% within a few minutes on an insignificant number of contracts (1600), evoking memories of the infamous 13% ($6) decline on the May 1 Sunday evening of 2011. If the Russian criminals oversaw silver trading and not the CME Group and the CFTC they could not possibly have rigged prices more corruptly.

What makes the silver (and gold) manipulation the perfect crime are a number of elements; short term price control through High Frequency Trading, compliant regulators and the fact that most victims don’t even realize they are being had, as the sellers are mostly just reacting to the deliberately-set lower prices. It’s hard to end an ongoing crime in progress when so many don’t realize it is in progress. Worse, there are still some who profess that there is no manipulation underway. And for the few who do realize what’s really going on, what can you do about it when the regulators are in bed with the manipulators? Perhaps the options are limited, but that’s not the same as non-existent.

In the last paragraph of the January 5 Weekly Review; I made reference to something I was working on that I preferred not to disclose at that time. I’d like to do so now and ask for your assistance. A little over a year ago, a subscriber sent me a constructive suggestion for how to force the CFTC to do their job and end the silver manipulation. Since I had promised myself that I would never leave any stone unturned in the attempt to end the manipulation, I followed Jeff’s suggestion, although I admit to doing so with as close to zero expectation for success as was possible. The suggestion was to complain to the Government Accountability Office (GAO) about the CFTC. I filed a complaint on their web site hotline www.gao.gov and promptly forgot about the matter. After all, over the years I had complained to every government agency possible and never heard back from anyone.

In December, I got a follow up call from the GAO that caught me so much by surprise that I didn’t know why they were calling me at first. They requested additional information (which I provided) and I have had several conference calls with the agency concerning my allegations of malfeasance by the CFTC in matters related to the silver manipulation. It was only after the first phone call from the agency that I took the time to find out what this agency was all about and I suggest you do the same.

I thought I knew it as the General Accounting Office, but the name was changed in 2004. What I also learned was that this was a unique government agency, separate and distinct from all the other federal agencies, including the CFTC. The GAO reports only to Congress and exists to ensure that all the other federal agencies stay on the up and up. In a practical sense, the GAO is the Inspector General of all the federal agencies. As such (and you can verify this on your own), this agency seems tailor-made to investigate why the CFTC won’t do its job when it comes to the silver manipulation...

Read the entire piece, including what you can do today to support the effort to encourage the GAO
in its Congressional oversight of the CFTC here.

Silver Rally Hit By Ruthless Selling

Bernanke's QE remarks sparked a flight to the metals and short covering as the silver shorts temporarily lost control of the trade.  There will be QE of many sorts, as far as the eye can see.

This was quickly met by renewed waves of ruthless selling by the Anglo-American financial cartel.

Silver has since returned to its pre-rally price of 22.75.

The suppression of gold was even more brutal with a plunge on selling, and a gap lower, even on the one minute chart.

The premiums for real metals continue to be high compared to the paper prices set in London and New York.

Gold and silver are flowing from West to East.  With each purchase, the Banks are being stripped of their bullion.

They can keep this up, until the people, in their increasing confusion and misery, finally realize that the emperor has no clothes.   And then comes change, and one would hope, reform. A generation forgets, and the next remembers and relearns the lessons from the past.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

This is what happens when an artificial tyranny finally falls. First it is the actions of individuals, then a movement, and finally a swiftly moving avalanche.

Freedom is not an objective or a prize to be won and kept at last; freedom is a way of life, a continuing commitment to truth, and to equal justice for all.

Revolutions decay into tyrannies, and over slow time are renewed again. The human spirit is resilient, as long as at least one person can stand for the truth and with peaceful but determined resolve say, 'You may own the world, but you don't own me.'

“Stand up for what you believe, even if you are standing alone.”

Sophie Scholl

Gold and Silver Futures Hourly Charts - Sharks With Laser Beams

There is not much doubt in my mind that the antics we saw in the silver, and to a lesser extent gold, markets last night were a classic hit and run, Dr. Evil market play.

It is not particularly sophisticated, more like a brazen street con, or a smash and grab.  But it does require a complacent regulatory environment, and a certain regard for fellow insiders who are in a position to see what has happened and raise objections with regulators and the exchanges.

One hits a quiet market with a very large 'sell at market order' and runs the stop loss orders on long positions.  And also triggers margin selling by longs.  But given the four minute turnaround it looked more like stop loss busting.

As the sell orders and any associated selling abates, which is generally rather quickly, the trader quietly buys back contracts and gets long 'on the cheap,' and allows the market to run higher and book a profit.

The point of this is not to manipulate the price lower and keep it there. The objective is to take out long positions in a quiet period and put them in your own pocket at below market prices.

This is one of the classic market cons and one of the reasons why prior reforms had instituted the 'uptick rule' on short selling. That rule has been eliminated and the regulating of naked short selling is a bit of a joke.  It is also why some are asking for 'position limits,' but this plea is falling on highly compromised ears often numbed by the revolving door between politics and finance.

So what next. Gold and silver were at extreme oversold position in terms of sentiment, Comex registered gold ounces, and chart technicals. The usual price suppression scheme was not going to keep going with the huge amount of physical offtake in the markets working against it.

So the smart money started covering the 'ancillary shorts' in cross markets such as mining companies, and went long in anticipation of a forced bottom.

There could be another bout of steady price suppression once this oversold condition is worked off.  It really depends on what had triggered this long effort to push the prices lower despite rising physical demand. 

Today Goldman Sachs says it sees 'more downside.'  You may recall that it was a 'short gold' call by Goldman that started this downside ball rolling through support some time ago.

Last night there were some related shenanigans in the Yen trade, but certainly did NOT look like a panic sell off by legitimate metal longs, although I am sure it will be portrayed that way by some. And I doubt it was a margin call either, except as the price plunged from calculated selling.

Although I would certainly appreciate any hard evidence that the CFTC could offer on this. In a better world we would not have to guess at how the prices of key commodities are being set, and shoved around the plate by those scavengers who are not involved in the real world process of demand and production.

That Banks who are on an ongoing public subsidy, and utilizing depositor funds, in order to game the markets and disrupt the real economy for their own profits is almost beyond belief, unless you have a knowledge of the history of central banking in the US.

And if they have a hand in implementing official financial policy for the Fed/Treasury, it would be understandable why they are untouchable when they engage in extracurricular activities like the market operation last night.  Or the coming moves in the equity market that could 'blow your mind,' as we used to say.  All these fellows know is 'more.'

Most of the discussion has been on the gold market, but I continue to think that the real chronic problem in the metals market is arising from the silver market where there is a real fear of a delivery default, or an uncoverable short position by a TBTF.

But in general this looks like another sign of the pathological environment on Wall Street and in Washington. 

In the target period only the NY Globex Market is open and volume is very light.

Silver Market Sunday Evening Follies

A large number of silver contracts were dumped on the Comex open on Sunday evening, a very quiet market period.

This ran the 'stops' and the price.

A similar number of contracts were then bought back at a lower price.  And then the market was roiled, but started to recover from a very obvious price smackdown. 

It is a little hard to see it on the 15 minute chart which just looks like a lot of selling.  I hear that 2500 contracts traded in 15 minutes is a near record for an off hours session.

The action is much easier to see on the 5 minute chart below that.

This looks very much like the Dr. Evil strategy which the banks and funds like to use when the regulators are turning a blind eye.

I have included a 15 minute gold chart just for comparison sake.

If this was selling by a trader with an eye to raising cash, that trader should be fired.  If it was done by a trader seeking to manipulate the price of the market, the CFTC should be able to find out fairly easily and publicly fine them.  But don't hold your breath for that to happen in the US.

The price of key commodities are being set by what is little more than a bucket shop.

The world sees this, and is appalled.

Matt Taibbi: Everything Is Rigged - The Biggest Price-Fixing Scandal Ever

“The worst crimes were dared by a few, willed by more, and tolerated by all.”

Tacitus

There are more scandals to come.   Wall Street is now a pathological environment, and the City of London is as bad or worse.

When someone raises their voice over these abuses they are often met with stony denial and ridicule.  That is the credibility trap at work.  Those who owe their positions to the system, as corrupt as it may be, feel the need to defend it rather than reform it.

There will be no sustainable recovery until the system is reformed.  

Rolling Stone
Everything Is Rigged: The Biggest Price-Fixing Scandal Ever
By Matt Taibbi
April 25, 2013

Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything.

You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t") worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it "dwarfs by orders of magnitude any financial scam in the history of markets."

That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps...

All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings ­ in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation's GDP ­ are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.

If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati ­ this is the real thing, and it's no secret. You can stare right at it, anytime you want.


Read the entire story here.

Fekete: Who Said the Hydra Would Take It Lying Down - A Failure Not of Knowledge, But Character

"Corruption is a tree, whose branches are
of an immeasurable length: they spread
Everywhere; and the dew that drops from thence
Hath infected some chairs and stools of authority."

Beaumont and Fletcher, The Honest Man's Fortune


“In the eyes of the empire builders men are not men, but instruments”

Napoleon Bonaparte


"When I despair, I remember that all through history the ways of truth and love have always won. There have been tyrants, and murderers, and for a time they can seem invincible, but in the end they always fall. Think of it-- always...

First they ignore you, then they laugh at you, then they fight you, then you win."

Mohandas K. Gandhi

By way of introduction, Professor Antal Fekete defines the gold basis as the difference between the price of gold in the nearest futures contract and the price of gold for immediate delivery.

In commodity trading contango is the situation where the difference is positive, that is, there is a premium placed on the futures contract. In backwardation, there is a negative difference, that is, one will pay more for gold for immediate delivery than you will for the futures contract, or a promise of delivery.

Contango is the normal condition in most commodities because of the time value of money or inflation. I think most are familiar with that concept. Think of it in terms of Net Present Value. If something will become more valuable in the future because of inflation, it will cost more than the same object if possession is taken today, less any organic growth and dividends.

This is always tied in with the risk free interest rate and the application of a risk factor. If you have not seen the video called Risk then you may wish to see it. Risk is just a calculation that estimates the probability that the underlying value of a thing will deviate from expectations without considering inflation, based on some change in fundamental valuation.

Now for some really good news. You can understand what Professor Fekete is saying without bothering about any of the theoretical.    Academics like to think about this and Fekete is a deep thinker on the subject, and we are glad and grateful for his work.  Theoretical work provides the planks and the plans out of which practical men like me build houses.   But unless you have taken courses in Economics and Finance you probably are not as familiar with the mechanics of this.

But for most people it does not mean all that much because they do not care about the intellectual arguments and fine nuances of the professors because as non-specialists they lack the context to care or understand it.  And academics like to argue the fine points of contention and sometimes with great passion like knights at a joust.

And unfortunately there is another class of academics who like complex and convoluted argument because it allows them to 'prove things,' that would otherwise be considered nonsense by anyone keeping an eye on the big picture, and especially matters of public policy.  And they often bring shame on themselves and to their profession even if they may make quite impressive amounts of money in the process.

Also, and I am going to steer clear of discussing this, there is quite a bit of distortion introduced at the ZIRP event horizon, and one can get sucked into side arguments about this almost endlessly.

Instead you can think of basis as simply the divergence between the paper metal and physical metal markets with regard to price.

If there is a small and steady divergence, things are normal. If there is a large divergence where paper is worth more than physical, the expectations of future inflation are high and increasing. If there is a large divergence where the physical is more expensive than paper, then there is something odd going on.

That oddness can mean one of two things. First, it can be a signal of future deflation, and especially if the price of physical gold is dropping because of an excess of physical supply. Supply is key to watch as well as price, and people who do not study supply don't really know what they are talking about.

If there is a large divergence in which physical is more expensive than paper, and the supply of physical is tightening, then you have that oddest of conditions where the futures market is grossly miscalculating things as they are and may be.  And this is what has just happened.

There are several reasons for this. One primary reason is that some market participants who are predominant in the futures markets are acting on hidden information. This again could be several things, but it almost certainly involves the willful distortion of the markets for personal gain. This may or may not be technically illegal.

Remember the case of the very obvious and willful distortion of the European bond market by Citi some years ago? As you may recall, the FSA got involved and Citi was fined for dumping a huge amount of bonds into a quiet trading period to knock down the price and run the stops, grabbing a quick profit.

The FSA did not charge them with market manipulation which is quite clearly what they did by any common sense judgement, but rather with failing to observe orderly markets, which is what one might think of as a misdemeanor.  What they really did wrong was to grab their profits from the wrong people, other insiders.  It is similar to what even more recently happened in the case of the London Whale.

So when some regulator stand up and says that nothing 'illegal' is being done, they may be saying the same thing as the FSA was saying. That is, of course these jokers are bloody well batting the price around, but since no one of serious power is complaining, we can't do anything about it, since it fails to meet some difficult to prove considerations of intent and conspiracy within the pathological environment of Wall Street.

So be that as it may, watching the divergence between paper and physical is paramount, while bearing in mind the lags. Markets are not quite uniform and instantaneous even in this age of marvels.

But there is little doubt in my mind that the recent antics in the metals markets were a price manipulation or a market operation with the intent to move the markets for some personal objective. It takes a willful effort not to see it that I could not undertake even if it was to my personal advantage.  And I think when people haven't a leg to stand on they resort to name-calling and ridicule, because the facts are not their friends.  And they need to keep their reputations in mind.

So in summary, a pre-meditated market operation used the futures market to knock down the price of gold and silver recently. This has resulted in greater buying of physical bullion across world markets, so this is not some localized event or prejudice by some domestic political group.  To say so is pure jingoism and disgraceful, absurd and unworthy of anyone who wishes to be taken seriously.

The current physical shortage will be resolved  But it will continue to worsen and become systemic if the distortions in the market, ie. an artificially low price, continues. At some point if not relieved there will be a market break and the paper market will lose all credibility and effect except where imposed by force.

I do not believe in naturally efficient markets. But at the same time, I do not believe that an inefficient market equilibrium can be maintained for long periods of time even with force and fraud.  There are always consequences, and sometimes they are unintended.

I am not delving into motives here, although if this continues I think some of Dr. Fekete's suspicions become much more credible.  For example, I do suspect quite strongly that the gold of Germany held in custody has been misappropriated, or hypothecated if you will.  And if this was disclosed it would prove embarrassing to some very self-important people who will use the excuse of national interest to protect themselves as is the custom amongst the self-rationalizing kleptocracy.

And as an aside, I think that where Dr. Fekete says 'Bernanke' he is really citing a broader financerati, the status quo of the Anglo-American financial sector and their attendants.  There is a currency war underway, and like other wars it is based on power and its distribution and abuse.

I don't think it is fruitful to argue too much where the resort to name-calling happens so quickly.  Instead I prefer is to see what happens, and to continue to push for greater transparency which makes control frauds more difficult to execute.   Opaqueness in markets is the servant of fraud,  always and everywhere.

And for those who believe that the price of bullion is what they say it should be, then they should be ready and able to stand and deliver at those prices, in open markets, with greater disclosure of their positions.

A futures contract and an option are forms of derivatives. And as with any derivatives they are more susceptible to fraudulent misuse, and therefore require stricter regulation than markets for real goods. And any regulator who does not comprehend that should go find other work.

By the way, some in the media were spreading the rumour on Friday that Goldman Sachs was in the bullion market 'buying physical with both hands.'  If and when that sort of thing comes out, it might prove to be their 'bridge too far' because then those they have betrayed (again) may turn on them as well who are yearning for reform in the markets.

If I have any concern at all it is that those who have held bullion legitimately will get mixed up in the repercussions against those who have gamed and looted the system for their own benefit, as Jeff Sachs has described it.   The hypocrisy of the privileged often knows no bound or restraints of conscience.  But when they stop and look at what they have done, some of them are appalled.  And the great crowd of people may help them come to that self-examination.  Then reform may begin.

Here are is the material from Dr. Fekete:

"Bernanke is trying to stop gold backwardation by selling unlimited amount of gold futures contracts through his stooges, the bullion banks. He is underwriting losses they are certain to suffer in due course. We can take it for granted that they haven’t got the gold to make delivery on their contracts. In fact, delivery of gold will be suspended under the force majeure clause. Short positions will have to be settled in cash, to be made available by the Fed’s printing presses. Gold futures trading will be a thing of the past.

Bernanke and columnist Paul Krugman, formerly his subaltern colleague at Princeton don’t understand that the issue is not the price of gold. The issue is backwardation or contango. In trying to wrestle the gold price to the ground the Fed makes “the last contango in Washington”* an accomplished fact.

From the frying pan into the fire

Ostensibly a lower gold price would solve the problem Bernanke has. Demoralized gold bugs would be forced out of their holdings through margin calls. Disillusioned investors would shun gold. This would make physical gold available to rescue the strapped gold futures market.

In fact, however, a lower gold price is making the problem more intractable, not less. The Fed is diving from the frying pan into the fire. This is the point missed by almost all observers and market analysts. They ignore the underlying flight into physical gold that continues unabated, in spite of (or, better still, because of) the panic in the paper gold market. The Fed’s intervention in bankrolling short interest is going to back-fire, for the following simple reason. The Fed’s strategy is inherently contradictory. A lower price for paper gold makes it easier, not harder, to demand delivery on maturing futures contracts. 

(Note: the delivery process at the Comex is not free and efficient.  The exchange can and does set redemption limits and other special situations without having to declare force majeure.  A minor point but will tend to make one look elsewhere for shortages first. And if in fact there is a control fraud in price setting and the futures markets are the locus, then we would anticipate that the data coming from such a private source would be increasingly less reliable.  - Jesse)

The more paper gold Bernanke sells, the lower the cost of acquiring physical gold in exchange for paper gold becomes. The price of the nearby futures contract will drop to hitherto unimaginable depths, relative to the cash price, making backwardation worse, not better. Ultimately this will make backwardation irreversible. Welcome to the world of permanent gold backwardation.

From what hole does the evil deflationary wind blow?

Academia and the financial press have utterly failed to recognize the relevance of gold backwardation as regards deflation. They might fret about hyperinflation as a result of unbridled money-printing (euphemism for the monetization of government debt). Yet the real danger is not on the inflationary but on the deflationary front as realized even by Krugman – while he is perfectly clueless on the question from what hole the evil deflationary wind blows (other than conservative wishful thinking).

Well, I can pinpoint the location of the hole to within yards for the benefit of Krugman. It is on Constitution Avenue, in Washington, D.C. The evil deflationary wind is blowing from the building of Federal Reserve Board.

If Bernanke thought that his attacks on the gold price would stem deflation, well, his efforts were counter-productive, to put it mildly. They have, in fact, made the flight into physical gold accelerate. Permanent backwardation of gold, and its concomitant, the re-invention of barter – the ultimate in deflation – will be the result.

There is no reason to fear that the Fed is pushing the world into hyper-inflation. In fighting the gold price the Fed unwittingly pushes the world into hyper-deflation.

All the same, it is destroying the dollar and the international monetary and payments system."

You may download and read the entire paper here.

Not that it matters but I do diverge a bit from Dr. Fekete's outcome of hyper deflation.  And I do so carefully because of the respect I have for this thinking.

A similar understanding is the basis for my own longstanding forecast of stagflation, which may become severe. I am assuming that the same kind of phenomenon that Dr. Fekete thinks will take place in a rush to gold and away from dollars is being perpetrated now by the Fed in this policy error of bottling up printed money in bank reserves, hoping for a trickle down effect of cheap loans to the real economy based on artificially low interest rates.

Instead what they are doing is subsidizing financial corruption and devastating the middle class, especially amongst those who are not retiring on official government pensions, but on a lifetime of savings.

As an aside, I am not of the Austrian School of economics, but there are several of those who identify with it whom I have read.  And I do consort with the other schools, because  I am of that odd class of people who think for themselves. Schools have loads of baggage and old fights. And people like to think in black and white.  Luckily I think the next financial collapse will discredit most of them again, and something new will come out of it that is a synthesize of the good in all of them.

I don't fear hyper deflation so much but I do think at some point they will have to reset the currency while knocking a few zeroes off in the process, as had occurred with the Russian rouble in the 1990's.  And whether that is called a hyperinflation or a hyperdeflation matters little with regard to the consequences.

Like the financial crisis of 2008, this will not be a failure of knowledge, so much as a failure of character.

Related:  Psy-Ops by Hugo Salinas-Price


 

Bullion Shortage Reported in Dubai - When Pigmen Go Wild

This is related to the story about the shortage of bullion at the Hong Kong Exchange as reported on Bloomberg earlier today.

This was clearly not metals longs disgorging their bullion positions, but rather 'an orchestrated panic.' Even the speculative longs were forced in, as an examination of the action on the open interest shows.

And it is so brazen and clumsy that I doubt it was even the usual suspects gaming the markets for a quick buck. Although they just might be that arrogant, thinking they can do almost anything these days with impunity.

In order to make a big 'market operation' work you have to let the major players know, otherwise they complain about it as we saw in the London Whale and the Citi bond manipulation scandals. But the downside is that if you let too many greedy people know, the operation becomes harder to control, and it can get 'over its skis.'

Let's call this Imperial Overreach: When Pigmen Go Wild.

Still, it seems more likely that this was a quasi-political move as well as a commercial opportunity for plunder given the chiming in from the pampered pets, manservants, assorted spokesmodels, and Lord Haw-Haw's of the Anglo-American banking cartel on cue. 

And I don't exactly expect that this means that it is over.  You know what they say, 'in for a penny, in for a pound.'   One would expect the Wall Street wiseguys and the City lords and barrow boys to run their last bluff until they hit the wall.  That is how we will know it is the last.

Pigmen go whole hog on naked shorts and get slaughtered.  And wouldn't that be a headline to remember.

Economic Times of India
Shortage of gold bars and coins in Dubai, says World Gold Council
By Sutanuka Ghosal, ET Bureau
19 Apr, 2013, 12.46PM IST

KOLKATA: World Gold Council, which has been tracking the global gold market pattern, has found that there is a shortage for bars and coins in Dubai which is creating a supply shortage.

Aram Shishmanian, CEO, World Gold Council: "It has become increasingly clear over the course of the past week that the fall in the gold price was triggered by speculative traders operating in the futures markets. Their short-term view of generating a trading profit is in stark contrast to the views of long term investors in gold, as evidenced by the massive wave of physical gold buying that began over the weekend and accelerated following Monday's further decline.

The surge in gold purchases is spanning markets from India and China to the US, Japan and Europe. Buyers are viewing this as an opportunity to purchase gold at prices not seen in the past couple of years."

The World Gold Council is uniquely positioned in the gold market to get immediate feedback on market patterns. "We are already seeing shortages for bars and coins in Dubai, while premiums in Mumbai are at $26/oz and $6 in Shanghai, indicating that buyers are willing to pay more than current spot prices for the metal..

Source: Economic Times of India

CBC Documentary: The Secret World of Gold

Here is the CBC Documentary from this week, presented in three parts.

In Part Three they present Andrew Maguire and his activities in calling attention to manipulation in the silver market.

I could be surprised, but I expect nothing to be done for all the same reasons that Jeff Sachs cites in his talk to the Philadelphia Fed banking conference about the pathological environment on Wall Street, and how a docile President, Congress and regulators will say or do nothing about it.

I think they will, but only after something blows up so badly that they cannot keep hiding it and kicking it down the road. I cannot hardly blame them. And this does not speak to the situation in London and especially Berlin.

I am however seeing more indications that we are getting closer to a tipping point. And when and if it does break it could break rather quickly, with the exchanges closed or on holiday. There is a desperation in the air amongst the financerati and their loyal manservants.

So have a care when swimming in opaque waters that are subject to rip tides.








h/t To the TFerguson crowd for putting this up on Youtube and to SilverSaito for making me aware of it.

Chinese Gold and Silver Exchange Has 'Almost Run Out of Available Gold Bullion' Awaits Imports

Hong Kong's century old Chinese Gold and Silver Exchange has reportedly almost run out of gold bullion at these price levels and is waiting for imports to come on Wednesday of next week from Switzerland and London. This information is from an April 19th interview.

Apparently they are not able to source from within their region which is a bit of a surprise since China is a major gold and silver producer.  Gold seems to be moving from West to East.

Why aren't they also going to New York for available bullion supply at the Comex?  

The Hong Kong Gold and Silver market seems to be more of what is called a 'bullion market' rather than a paper speculative market dealing in highly leveraged position trading with only small amounts of actual metal changing hands.

"The Chinese Gold and Silver Exchange Society operates in Hong Kong as a registered society. At present, we have 171 member firms which are sole proprietorships, partnerships or limited companies. Among these 171 firms, 30 are bullion group members. Bullion group members who want to manufacture good delivery bars may apply for the qualification of accredited refineries. Upon accreditation, these member firms may produce 99% fineness 5-tael gold bullions and 999.9% 1-kg gold bullions for delivery on the Exchange. The bullions they produce also circulate widely in the open market."

Please see the attached interview from Bloomberg Asia with the President of the exchange.

I do not want to make too much of this as it may be temporary. And since this is a metals exchange rather than a derivatives market a shortage of metal is not a default. A default is a paper promise to deliver that fails.

But it seems to call into question, if not shoot all to hell, the theory that the precipitous decline in the price of gold marked by the dumping of huge numbers of contracts into quiet markets was based on market fundamentals rather than brazen naked short selling and highly leveraged speculation in the London and especially New York markets, which both deliver only a fraction of the metals volumes which are traded on their exchanges.

And still hardly anyone is talking about the dog that didn't bark, and that is silver.



h/t to Delray and Liberty Mike

Sorry but I do not have any way to turn off the autoplay feature with the Bloomberg player. You will have to pause it yourself.

How the Gold Market Was Crashed - But Most Importantly, Why? Leveraged Default? And Silver?

Many are still sorting through the data to try and figure out what happened, but it is hard to look at the available data and the market action and conclude that the recent 'flash crash' in gold was anything but a calculated takedown.

Some big players had been trying to work the market price of bullion down in stair step fashion for some time.  Their tracks on the tape were big enough to be hard to miss, and any number of people who watch the market structure as it develops were seeing them, and a few were reporting what they saw.

But it just wasn't enough.  The pressures were building, and something had to be done. 

A plan for a market operation to relieve the pressure was made, and then executed ahead of the upcoming option expiration on the Comex on April 25th.  The word was quietly spread so the important monied interests would not make a fuss about losses when the time came, as in the case of MF Global and Cyprus.

And then Goldman gave the signal to the market with their 'short gold' call.

As I said at the time, I was not sure if this was done to try and avert a disaster, or to cover up some longer term corruption. Or perhaps a bit of both.  Motives are never easy to discern where leverage and opaque trading pools are involved.

This could be in advance of a major announcement out of Europe with regard to the Eurozone and also their monetary policy following along the lines of Japan.  Perhaps it is even something regarding US policy.  Obviously one has to have an open mind about that.

But there were persistent rumours of a potential default situation at both the LBMA and the Comex. Well, one has to take those with a skeptical eye.  But there are some data that point to the LBMA in particular, although the drawdown of bullion from the two exchanges could have been more general. 

Linked just below is a report that includes more data and it well worth reading. It tends to concentrate on the Comex.

How the Gold Market Was Crashed.

It seems that the word has gone out to the media and the stories are being spun to protect the system.   And the parrots dutifully pick up the chatter, without knowing why.

The story being spun that there was a speculative excess in gold being held by pension funds that panicked.   Foolish people, outsiders really, got over their heads and caused this regrettable incident.

There is probably a grain of truth in that, but I think it is more likely that they were forced out of their positions by a market operation designed to do just that.  And market insider knew exactly what they were holding.

Price declines caused by legitimate selling and panicked longs are not marked by increasing open interest. That is the hallmark of short selling with a purpose.

This is a big deal, and it was writ large across the media.  And that suggests that there is an equally big problem that had to be dealt with quickly and brutally.  Ordinarily market operations are more adept and protracted.

Something was close to breaking, and it most likely still is. 

And if it broke, it would prove to be embarrassing to quite a few very important people.  At least, that is what this situation suggests to me. 

Even the endlessly levitating stock markets seem a bit 'edgy' with a tension on the tape.

I cannot possibly know what is at the root of this.  Can't find Germany's gold, and can't buy enough at the LBMA to deliver it, because the market is leveraged 100 to 1?

Maybe not that but something of that magnitude.  A major TBTF tottering on the brink of a derivatives domino collapse? There are rumours out of Switzerland about Italy and France.

Most eyes are on the States, but how quickly we forget that ABN/Amro declared a force majeure and stopped all physical delivery of bullion, forcing settlement in cash.  The soft default of a major bullion bank is no joke, especially when it appears they could not obtain suitable goods at any price. 

This tends to point towards problems in Europe and the LBMA.  And one of the big sources of LBMA 400 oz. qualified gold is the big SPDR Gold ETF, GLD which is stored by HSBC in London.  I have included a chart of who tends to use 400 oz. bars below.  The COMEX does not.

As you may recall, Andrew Maguire reported early on that there were indications of problems on the LBMA with regard to gold inventory.  It is said to be leveraged 100 to 1.

“Entities went to the LBMA and said, ‘We don’t trust anybody anymore. We want our physical metal.’ They were told they would be cash settled instead by a bullion bank. The Western governments have been trying to plug holes, and the reason for it has to do with the default that was taking place at the LBMA.

This is why this smash has been orchestrated because of the run that has been taking place on physical metal. So Western governments had to do this because of an imminent run on the unallocated LBMA system. The LBMA bullion banks had become so mismatched at one point on their trading positions vs real world demand that they had to orchestrate this smash."

The 'entities' in question are again just rumour, but they are most likely to be from the Mideast or Asia.    They could be a central bank, or even an ETF for that matter.  But the size was said to have been substantial, and untenable for withdrawal without a severe market disruption given the leverage on which the LBMA operates.  100 to 1 leverage is no joke when the drawdown is physical and available supplies are tight.

If you have not picked it up, the implication in this theory is that the big price declines allowed some non-allocated repositories, like GLD for example, to disgorge delivery ready bullion to the LBMA for delivery to the entity that had demanded delivery.

And something like this might not be a singular event.  People talk, and if one entity got nervous and took delivery that information cannot be kept from other sizable players in the same circles.  And so others step up and ask, and there is the threat of a run.  And it could be happening in more than one place, ie not just the LBMA.  Hence the decline in inventories at the Comex referenced above.

JP Morgan holds enormous derivatives positions in the precious metals not reported anywhere in detail except occasionally in the OCC report.  If something were to perturb the markets, it would almost certainly affect them. 

And recall that the outrageous excesses of the 'London Whale' were not uncovered by regulators, but rather by market participants who reported JPM to be distorting the market because of the size of their position.  And the OCC is having a bit of recent notoriety from overlooking irregularities (some say crimes) to protect the banks.  So keep that in mind.

Changing the subject, if you wish to get a bit more baroque, gold may have been a necessary misdirection with the real target being silver, which hardly anyone is talking about, even the house economists and spokesmodels for the status quo. 

Keep an eye on stocks and the markets.  The big money always moves first, because they get to know what is happening first.

But I have to remind you, your guess is as good as mine.   It is an opaque market, and it has gotten worse and not better, despite all the show of 'reform.'

When the tide goes out, you not only get to see who is naked, you see who they are naked with.  And so the smokescreens go up.

I suspect that this is going to get ugly.

Related: Update to the Update: The Attack On Gold - Paul Craig Roberts (this gets more into the general government-business-as-usual theory rather than something that was incidentally related, ie a major impending default.  As I pointed out I think those sort of antics tend to be a more elegantly executed and gradual.  The recent gold/silver smack down was sheer brute force.  Could have been shock and awe but it really was over the top and probably called far too much attention to itself to have been a 'policy thing.')

Gold Daily and Silver Weekly Charts - The US Dollar: Keeping Up Appearances

Ron Paul: "I had a Federal Reserve Board Chairman testify before the committee that the gold standard had some merits but it was unnecessary because central bankers have now learned how to manage a Fiat currency in a manner in which it would mimic the gold standard. Would anybody care to comment about where the flaw is in that thinking?"

Mr. Lehrman: "I am anxious to comment on that, Dr. Paul. Under--and I must say Mr. Greenspan made the same insipid remark. Mr. Greenspan and Mr. Bernanke will have to then explain why it was that two of the greatest booms in American history, and two of the greatest panics and busts in American financial history, occurred under their 25-year watch..."

Mr. Grant: "The failure of AIG is so instructive in this respect. AIG, this immense insurance company with this ever so brilliant financial products group, didn't do one thing. It didn't mark its positions to market. Finally came the day of judgment and it argued with Goldman Sachs about what these things were worth, AIG said 100 cents on the dollar, Goldman Sachs said not close, Goldman Sachs won that debate and AIG failed.

As with AIG and Goldman Sachs, so it is today with the United States and its Asian trading partners. We never clear our trades. Our dollars go there, and they come right back here. We run twenty five consecutive years of debts on a current account and there will be for us, as there was for AIG, a moment in truth in which we must settle."

U.S. House of Representatives, Committee on Financial Services, Testimony of March 17, 2011

The US will settle, in paper dollars.  And if the payment is insufficient, they can always create more.

That is the long and short of it, and the sophistry of modern money.  Because the value of the money is self-referential, it is in essence a literal confidence game.  The dollar is worth what we say it is, and it is worth it because we say it, without regard to other opinions and considerations to the contrary. And as long as people believe this, or even pretend to believe this even if they don't but are afraid of the consequences of their disbelief, the dollar hegemony is secure.

Money is a matter of force and confidence; and when confidence wavers, force must provide. Force can take many forms, from persuasion to deception and even compulsion.

So the appearance of solidity and confidence must be maintained no matter what.   It must, as apparently Messrs. Greenspan and Bernanke have said, must 'mimic the gold standard.'  And they are right.  Caesar's wife must be above reproach, and the fiat dollar is the dowager queen of empire.

That is why the chat board gimmickry of the platinum coin was such a remarkably dangerous folly. Even given that money is a somewhat specialized area of study, it was shocking that a distinguished economist like Paul Krugman did not seem to understand it.  I could attribute that to a moment of political weakness. 

But the rest of the world did understand exactly what was happening, and held its breath.  Would the US dare to cynically impugn the basis of its debt, even by implication? 

Perhaps the greater question, such silliness as trillion dollar platinum coins aside, is how far the Anglo-American financial system is willing to go to keep up the appearance and dignity of a stable global reserve currency in the dollar, even while the dollar is being used and abused by the financiers like a 12th Avenue hooker?

I think you know that I believe that the paper metals markets are an accident waiting to happen, particularly with regard to silver.

It appears that the exchange and the regulators are managing the markets with reckless disregard for their soundness.

So let's see what happens.

Gold Daily and Silver Weekly Charts - Sequester Will Harm Effectiveness of the CFTC

CFTC Chairman Gensler noted on financial television that the sequester will make the enforcement efforts of his agency to police the markets harder, and it will be more difficult to 'stop the bad guys on Wall Street.'

Isn't he the one that just went to court and filed a brief in support of market manipulators to overturn the Federal Energy Commission's successful $30 million fine against an Amaranth natural gas trader because the FERC was doing 'his job?'

Chairman Gensler also noted today that LIBOR is useless for ensuring the integrity of commercial business interest rates.   Can't dispute that testimony.

Not to put too fine a point on the irony, but speaking of concocted numbers without genuine merit, and of little value in setting prices for the real economy, has the Chairman looked at the silver futures markets lately?  

Have a pleasant weekend. 



'Oh lawdy, this is grim.  My Grand Slam breakfast!'

Enter the Credibility Trap: A Prediction About the S&P Ratings Lawsuit

No, I do not predict that there will be no criminal indictments and convictions to follow the suit, or even serious personal penalties from the civil action beyond something that is tax deductible as a cost of doing business. That is like predicting that a heavy rain will make puddles.

I predict that the primary defense that will be offered by S&P will be based on 'the credibility trap' itself.

The usual defense in cases like this is the First Amendment, that S&P was merely voicing an opinion. In this particular case, after having combed through over 20 million documents, the Department of Justice will attempt to prove that S&P was not merely voicing an opinion, but lying for gain, which is not 'protected speech.'

And most of them obviously cannot use the CEO defense of non-involvement and general ignorance of the entire situation, since they were being paid to write professionally informed judgements based on a factual due diligence.  It would be like a surgeon arguing against malpractice because he was watching porn while performing surgery, and was so distracted he did not really notice what he was doing and was therefore merely a hapless bystander.  Don't laugh.  It seems to be working for MF Global, and several national governments.

Having these usual avenues thwarted, I suggest that S&P will point to all the other credible voices of the economists and politicians, 'very serious people,' who said either absolutely nothing, or voiced similarly misplaced opinions and 'mistakes in judgement' about the true nature of the unfolding financial frauds.  How can you blame us, when no one of consequence said anything differently, forcefully.

So rather than key actors in a massive control fraud, they will portray themselves as hapless victims of the same mass delusion that affected most of the New York-London-Washington establishment, with many top universities in their supporting cast. 

Will Alan Greenspan offer to be an expert witness on the perils of mistakes made while blinded by a sincerely held ideological delusion?  Poor fellow, just a good chap making an honest error in judgement.  He used a bad model.  Who can blame him.

The defense will be 'the credibility trap' itself.  You cannot convict us, without indicting yourself.  

And if they are as I think they are, the S&P team will bring some credible implications of their case for the sacrosanct TBTF crowd to the plea bargaining process, and make its objective the best terms in a settlement while admitting no wrongdoing.   We chose to settle because it was cheaper.  We are victims of big government.   The usual suspects will run with that.

It is a corollary to the credibility trap that no one who knows 'where the bodies are buried' will be personally inconvenienced beyond mere appearances.

It will be interesting to see how this plays out.  It might set the tone for the 'investigations' of the coming collapse and scandal in the paper silver market.   How could we have done anything wrong when the CFTC investigated us for five years, and sat next to our people almost every day?

Ned Naylor-Leyland: Silver Smoke Signals at the LBMA

Bear Raid In Gold and Silver After Option Expiration

As I noted yesterday, a large number of options were 'in the money' for the Comex option expiration. As you know, these options become active futures contracts on the following day.

"The metals went out on a quiet expiration, with a decent amount of options closing in the money. They will be converted to active futures contracts tomorrow. I expect some market action on this."

It is not unusual for the market manipulators to deliver a serious 'gut-check' to the holders of those contracts, especially those of the spec variety, to try and shake them out of their positions in a forced selling of stop-loss orders and margin calls.

Just another facet of financial repression, times of general deception, and the ongoing war on the public interest.

Let's see what the rest of the week may bring.

Bart Chilton On Silver Manipulation - Gold and Silver Coiling For a Major Move - The Next Disaster

In discussing the government's lack of reaction in reforming the high frequency trading developments in the market, the CFTC's Bart Chilton remarks in the video below about the unfortunate tendency of regulators not to act until something unfortunate happens as being a:

"...tombstone mentality, when you wait for a disaster before you put something in place."

The CFTC is hampered and opposed at every step of the way by the financial powers and their exchanges, who unfortunately wield a powerful and well-funded lobbying effort that tends to lead the political element in Washington by the nose, or their wallets, as you prefer.

I have come to believe that the US government will do nothing effective to reform the gold and silver markets and the equity exchanges until there is a MAJOR dislocation in the markets, and a virtual 'run on the exchange.'

Change will come after the US financial system is threatened by a major solvency or liquidity event.

Whether it originates from a failure to deliver in gold and silver markets that exposes them as a highly artificial and overleveraged house of cards, or another 'flash crash' that brings down a major exchange or trading house through counter party failures, I now believe that this sort of failure and scandal is what it will take to bring meaningful reform to this highly unstable Anglo-American financial system.

Change will be not voluntary with these greedy, self-destructive jackals, especially after the moral hazard that was introduced by the unfortunate policy error of 'no-strings' bailouts from the last financial crisis.   And the lack of regulation and accountability that has ensued is corrosive.

Reform will be accomplished, but only under the duress of the next financial disaster.  

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds - Three Stooges

The Three 'Stooges'

"Extreme careerism is the propensity to pursue career advancement, power, and prestige through any positive or negative non-performance based activity that is deemed necessary."

Bratton and Kacmar, The Dark Side of Impression Management

The revolving door has a long runway and a vast lobby.

The cash levels in PSLV continue to draw down, making an additional shelf offering highly likely within the next four months. This may be why the premium is historically a bit thin.

Sprott will almost certainly start to secure supply before the offering which may provide some resilisence to the physical market.  I am not informed sufficiently to say if these are merely verbal inquiries or firmer commitments in the nature of contracts with contingencies.  Each ounce of physical silver taken out of the highly leveraged LBMA shell game machine takes the basis for about 100 paper ounces with it.

The physical silver market is an accident waiting to happen, and the CFTC stands firmly in the center of responsibility which they will attempt to avert through the usual CEO style defenses of plausible deniability.

At least they will not be able to easily admit that they were merely following orders, although they probably are.   The question is, whose?   So hard to tell the rank and responsibility without the uniforms.

Jamie Dimon is spinning his vision of the future and a particular version of the past using the bully pulpit of the Council On Foreign Relations today. It is quite the show.

C'est la guerre des monnaies.

Gold Daily and Silver Weekly Charts - Silver Turns It Around - Gold Options Expiration - Ted Butler

As noted in the intraday commentary this is a week with a few key events on the Comex for gold, and so we continued to see the metals under pressure, although silver turned it around quite impressively and reached back up for the 34 handle.

Let's see how we go into gold option expiration and first notice.

Sept. 26 Comex October miNY gold futures last trading day
Sept. 26 Comex September silver futures last trading day
Sept. 27 Comex October gold options expiry
Sept. 28 Comex September gold futures last trading day
Sept. 28 Comex October E-mini gold futures last trading day
Sept. 28 Comex October gold futures first notice day

Ted Butler on J.P.Morgan and silver:

"My allegations in silver are incredibly specific. I believe that JPMorgan, by virtue of a massive concentrated short position in COMEX silver futures, is manipulating the price of silver lower than it would be otherwise. If JPMorgan’s concentrated short position did not exist, the price of silver would be substantially higher. It does not matter if the bank is hedging or engaged in market-making; the mere existence of such an unprecedented large and concentrated short position proves manipulation. That’s a key feature of commodity law and is why the CFTC monitors concentration closely.

For some reason, however, the Commission treats silver differently than other commodities. In addition to ignoring the concentrated short position, it glosses over the results of the concentration on price. Silver witnessed, among other large and uneconomic sell-offs, two distinct sell-offs in 2011, in which the price fell 30% and 35% within a few days. Not one word was heard from the Commission on the two most pronounced sell-offs in modern commodity history. Yet, this week Commissioner O’Malia promised that the Commission was looking into the 4% price decline in oil. A decline in oil of 4% gets same day comment; 35% down in silver is not worthy of any comment. This amounts to a level of discrimination that is not tolerated in society or in regulatory matters.

In addition to being specific, my allegations around JPMorgan manipulating the silver market are consistent and continuous. Four years ago, instead of responding directly to public complaints about JPMorgan’s concentrated short position, the Commission chose to investigate as a way of kicking the can down the road. After four years, the issue remains because JPMorgan’s concentrated short position remains. No one in authority wants to make the issues around this short concentration more transparent; not the CFTC, not the CME, not JPMorgan itself. Transparency is good in principle and for the other guy; but when it comes to silver, not so much..."

Ted Butler, 25 September 2012

As you know I think the CFTC may be caught in a credibility trap with respect to the silver and gold markets. And if so, at some point this is going to break, as a scandal of major proportions.

All the CFTC has to do is to release its findings, and satisfy analysts like Ted Butler with proof that the big short in silver is a genuine hedge. That is their responsibility as the representatives of the public in overseeing the markets.

That they will not do so, that they will not even speak to the issue but continue to be evasive, makes one wonder just what sort of people these are, and what they have to hide.

I read with some cheerfulness today that Europe is using the US markets as a model of what NOT to do, in crafting their new regulations about high frequency trading. The types of 'Dr. Evil' market manipulation practiced in the states is already illegal in Europe, and more importantly, enforced on occasion.

And for New York and London and their contempt for the people, shame.

Key Comex Dates for Gold and Silver To Year End and Updated 'Shadow Gold Chart'

In addition to the end of quarter mark to market boogie woogie, which I think is responsible for quite a bit of the stock market action, there are also a few key things happening in the gold and silver futures markets this week that also provide the occasion for some 'technical trading.'

Harvey Organ reminds us that the metals often get 'hit' as an active month rolls over, to discourage speculators from taking delivery on their contracts.  This is often marked by the 'first notice day.'

In the short term the markets are a bit treacherous because of the lack of enforcement of the basic rules that govern healthy markets.  In the longer term these things tend to become just noise.

Pick whatever time frames you wish, but know the character of the markets in which you choose to participate.

Also bear in mind that during times of excessive market speculation because of hot money and lax regulation, information sources are often used and even co-opted to help to shape 'perceptions.'

This may even be unconscious if the information provider does not view certain stories that are offered at certain times with a skeptical eye. A little truth broadly embellished and assigned is the most reliable sort of lie.

Sept. 26 Comex October miNY gold futures last trading day
Sept. 26 Comex September silver futures last trading day
Sept. 27 Comex October gold options expiry
Sept. 28 Comex September gold futures last trading day
Sept. 28 Comex October E-mini gold futures last trading day
Sept. 28 Comex October gold futures first notice day
Oct. 27 Comex November E-mini silver futures last trading day
Oct. 27 Comex October silver futures last trading day
Oct. 27 Comex November E-mini gold futures last trading day
Oct. 29 Comex October gold futures last trading day
Nov. 27 Comex December gold options expiry
Nov. 27 Comex December silver options expiry
Nov. 28 Comex December miNY gold futures last trading day
Nov. 28 Comex December miNY silver futures last trading day
Nov. 30 Comex December gold futures first notice day
Nov. 30 Comex December silver futures first notice day
Dec. 27 Comex December gold futures last trading day
Dec. 27 Comex December silver futures last trading day
Dec. 27 Comex December E-micro gold futures last trading day
Dec. 31 Comex January 2013 silver futures first notice day

The formation will not be valid until the previous high is exceeded and there is a clear breakout, or a handle is set for a 'cup and handle.'