Gold Daily and Silver Weekly Charts

Benny made it perfectly clear in his Humphrey Hawkins testimony today that QE, in whatever forms and permutations, is here to stay at least for this year. And when the Fed expands its Balance Sheet, it is most certainly 'creating money,' although as I have said often enough 'printing' is a colloquial expression of the same sentiment.

Thank you very much for clarifying that for all the learned economists Ben.  Your occasional honesty in Congressional testimony is a nice change of pace for a disgraced profession.

• Q: Are You printing money?
• Bernanke: Not literally.

and

• Bernanke: If the Fed were to tighten policy, the economy "would tank."

Ben tended to point a finger at the inept and ideologically purblind Congress for the obstacles to growth.  And in addition to a hearty 'hear, hear,'  I would certainly include the Obama Administration.  The lack of genuine reform is appalling.  But what else can we expect from those stewards of bad governance caught up in a credibility trap which they helped to create.

Gold and silver were obviously hit with a bear raid in honor of Bernanke's testimony. What else would we expect from a thoroughly corrupted financial system? Intraday commentary on that here.

SP 500 and NDX Futures Daily Charts - Earnings With Revenue Misses

After the bell Intel and Amex and IBM all hit their earnings but missed on revenues.

Look for that to be a recurrent theme given the lax accounting standards and weak aggregate demand in the US economy.

I think we are in for some downside in stocks, but perhaps not yet.

NAV Premiums of Certain Precious Metal Trusts and Funds

Just another Humprhey-Hawkins day.

Interesting comments from Ben.

• Q: Are You printing money?
• Bernanke: Not literally.

and

• Bernanke: If the Fed were to tighten policy, the economy "would tank."

I particularly enjoyed that first comment, in the light of all the economic sophists who keep insisting that 'the Fed is not printing money.'

With regard to the second, it is QE as far as I can see. And the hedge funds are wriggling on the precious metals hook.

The Gold/Silver ratio is back to 65.

 

Gold Chart Intraday - The Bernanke Dipsy-Doodle and Germany's Gold

As you know Ben Bernanke is giving what is likely to be his last testimony to Congress today as the Chairman of the Fed.

So we see gold doing the old 'wax on, wax off.'

The wiseguys need bullion going into a key delivery month of August at the COMEX. Their registered for delivery inventories are at record lows for this leg of the bull market. Overall inventories are getting thin as well.

Every time this has happened, there has been a marked change in the direction of price, higher.

I found this transcript of Lars Schall's interview with William Kaye to be informative.

The decline in the price of gold coincided with the Bundesbank's request for repatriation as I have shown in the past. I would not be surprised if this gold market operation, which is facilitating the removal of large amounts of gold from the ETFs which I have also documented, is serving the purpose of replenishing the missing gold stocks.

Stand and Deliver: How Germany Disrupted the World Gold Market

It may also take the form of a 'stealth confiscation' which will allow the TBTF bullion banks to get long the metals, and ride them higher.

As some commentators have pointed out, there are big drains of physical metal in the gold ETFs, and comparatively little from the silver.  That is not a mark of 'silver strength,'  but more a sign that the physical gold is in very short supply, whereas silver has a more systemic and longer term supply problem.  This is what I think if one looks at the total picture.  Silver supply on the COMEX is not under immediate pressure.

It will be interesting to watch the hedge funds, who are quite short, try and wriggle out of this one.  They deploy their dependents in the media quite well, but that does not help them provide what they have already sold.  It will be bought back at higher prices.

The wiseguys and their water carriers in the media will try to blame China, which indeed is a recipient of much of this gold, because they are a willing buyer, seeking to trade paper for metal as part of their reserve's plan. But I think they are just a contrarian player in a market managed by the Anglo-American banking establishment. 

As I have noted many times before, there is a 'currency war' underway as the international monetary regime evolves and changes.  And it appears that the wealth of the German people in the form of gold may be serving as cannon fodder as it has been conscripted and deployed.

Change in the monetary system status quo is being resisted by the elite that it has enriched, as it always has been and does still.

So for today, time to shake the ETF tree. Tough times ahead so better sell that gold.

Tut tut, looks like rain.

COMEX Registered Gold Falls To New Record Low

COMEX Registered Gold fell to a new low even as prices rebounded off the recent bottom.

Total Gold remained steady at just over 7 million ounces.

Included are the key dates for the August Contracts for both gold and silver.

Gold Daily and Silver Weekly Charts

Gold is holding a key support level so far in its recent rebound off the lows.

The 50 Day Moving Average remains a formidable overhead obstacle.

Physical supply in the west remains tight with two weeks before the August delivery period.

SP 500 and NDX Futures Daily Charts

Gold Daily and Silver Weekly Charts - A Sharknado of Mass Distractions

One of the top stories on Bloomberg TV today was a made for TV science fiction movie called 'Sharknado' which caught some Twitter buzz over the weekend because it was so outrageously bad, what they used to call 'campy' in the manner of badly made movie icon Ed Wood.

It was about a tornado that had picked up sharks, and artfully went about dropping them on unsuspecting people, in full frenzied attack.

During one of the two interviews with the people who made this Syfy shlock show, the Bloomberg anchors got so over the top in their praise and speculation about a sequel and Broadway musical that Tara Reid, an actress not noted for her Solomon-like wisdom, dismissed the anchor's ebullient praise somewhat embarrassedly. She looked pretty wise compared to those frivolous knuckleheads.

Alix Steel did some commentary on the gold market later on that was a veritable Sharknado of misunderstanding about what is happening in the commodity world. Perhaps she can star with Ms. Reid in the sequel.

I was saddened to see the news today that Finance is about to overtake Tech as the most profitable sector in the US economy. This speaks volumes to the foul partnership between Wall Street and Washington that is consuming the real economy with fees and frauds.

The New York - Washington Metroplex reminds me of the Capitol District in the The Hunger Games: removed, intellectually inbred, and increasing irrelevant, like a modern day Versailles.

And may the odds be ever in your favor.

SP 500 and NDX Futures Daily Charts - Ship of Fools

Retail sales came in much worse than expected with Sales ex-auto dead flat.

The Empire manufacturing number came in 'better than expected.'

The equity market was in a float up mood in light volumes.

CPI out tomorrow. I doubt it will have much meaningful content.

Weekend Reading: And What Then of the Other?

And who in this story is 'the other?'

Are there more than one?   Who is not 'the other?'

And behold, a certain lawyer stood up and tested Him, saying, “Master, what shall I do to inherit eternal life?”

Jesus said to him, “What is written in the law? How do you understand it?”

And the lawyer answered Him saying, “‘Thou shalt love the Lord your God with all your heart, and with all your soul, and with all your strength, and with all your mind, and your neighbor as yourself.’”

And Jesus said to him, “You have answered rightly; do this and you shall live.”

But the lawyer, wanting to justify himself, said to Jesus, “And who is my neighbor?”

And Jesus answered him saying, “A certain man went down from Jerusalem to Jericho, and fell among thieves, who stripped him of his belongings, assaulted him and departed, leaving him half dead.

And by chance there came down a certain priest that way. And when he saw him, he passed by on the other side.

And likewise a Levite, when he was at the place, came and looked at him, and passed by on the other side.

But a certain Samaritan, as he journeyed, came to where he was. And when he saw him, he had compassion for him. He went to him and bound up his wounds, pouring oil and wine on them. And he set him on his own beast, and brought him to an inn and took care of him.

And on the next day when he departed, he took out two pieces of silver, and gave them to the host and said to him, ‘Take care of this man.  And if  you spend more, when I come back this way I will pay you.’

Which of these three do you think was a neighbor to him that fell victim to the thieves?”

And the lawyer said, “He that showed mercy to him.” Then Jesus said, “Go you, and do likewise.”

Bill Moyers: Weapons Of Mass Distraction and Bending Towards Justice

Gold Daily and Silver Weekly Charts

Intraday commentary on the German gold situation here.

There was some cross current discussion between Fed heads today, with regard to the future of quantitative easing and the state of the real economy.

It is good to note that the Banks have just slashed their estimates for US GDP for this quarter. The recovery is illusory, unless you restrict yourself to the gated communities and lofty towers of the pampered elite and ignore the state of the great bulk of your people.

Something must be done, of course, but the credibility trap is an obstacle to genuine progress. So until then, it is extend and pretend.

I see that Larry Summers is making a strong push to be the new Chairman of the Federal Reserve. It is hard to tell what is true and what has been planted by the financiers in the news, but Obama is said to view this favorably.

Proverbs 26:11 comes to mind.    'As a dog returns to its vomit, so a fool repeats his folly.'

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Another Record Close on the SP 500

Despite the faux exuberance from Wells Fargo and JPM earnings reports, the market action seemed 'heavy' even with the light volumes.

I thought it was notable that JPM made most of its profit from investment banking and 'trading.'

The market looks tired after a remarkably parabolic run.

NAV Premiums of Certain Precious Metal Trusts and Funds - A Rose By Any Other Name

"People always overdo the matter when they attempt deception."

Charles Dudley Warner

Just watching, and waiting.

Speaking of overdoing the matter, a reader informs me that the Fed has changed some names in their Monetary Base Report H3.

Excess Reserves are now called Balances maintained that exceed the top of the penalty-free band

Now, is that just a new bureaucratic euphemism, or is the Fed tipping its intention to start penalizing certain reserve categories held by the Banks with negative interest rates? And if penalties on reserves are enacted, what if anything does that imply for interest paid on savings deposit accounts and other savings vehicles?

Is that a calculator in Ben's pocket, or is he just glad to see us?

More On the German Gold Situation: Some Light from Deutschland and Canada

Journalist Lars Schall was kind enough to forward this excerpt from one of his articles that is printed below.

I think it 'frames up' the situation with regard to the repatriation of Germany's gold from the US very nicely.

How sovereign is Germany relative to the US? Indeed how sovereign are a number of the western nations vis-à-vis the Anglo-American establishment? The recent search for the elusive Snowden cast some light on the issue of sovereignty.

And as a corollary, how complacent and compliant are the western people to the Banks?  Have the Banks quietly assumed the role of government, without proper accountability to the people?

And secondly, what exactly is the problem with the gold? Is it there or gone? And if it is there, is it already spoken for, in the manner of modern banking rehypothecation? And if so, why?

Jeff Nielson casts some light on that subject of central bank leasing in his recent article here. It is finely reasoned. Short selling is legal, but like many legal things it can become illegal if it is done with an intent to manipulate prices, even with the blessing of entities who, through their association with a sovereign, hold themselves to be above the law and public accountability.

This is the excerpt of Herr Schall's interview. You may make up your own mind as events unfold, but it does seem to parse the subject quite nicely.

Lars Schall: In January this year, the Deutsche Bundesbank announced that it wants to repatriate some of its gold holdings at the NY Fed and all of its gold from the Banque de France. Do you consider it a bit strange that apparently it will take seven years to bring roughly 300 tons of gold from New York City to Frankfurt and five years to bring roughly 370 tons from Paris to Frankfurt? Moreover, the Bundesbank will leave a huge amount of its gold in New York City and London to have in the event of a currency crisis ”the ability to exchange gold for foreign currency […] within a short space of time.” Does this argument convince you?

Norbert Haering: The specifics of the plan for partial repatriation of gold seem to be designed to quash the public discussion about gold storage abroad. For many years to come, the Bundesbank will be able to answer these calls by saying: we are already working on it. And that will work well as a communication strategy. But the truth of the matter is that there is no good reason to store your national gold treasure abroad. The issue and the way in which the Bundesbank got itself tangled up in conflicting statements and justifications during these discussions makes one suspicious that either there is a problem with the gold or that Germany might not be as sovereign a state as we like to think. I do not know which one is true.

Lars Schall, Money Lies Disguise Banking Truths: An Interview with Norbert Haering

I find the refusal of the Federal Reserve to release the national gold of Germany for repatriation for seven years to be one of the most remarkable of recent developments in the world of money. And it is all the more remarkable in that so few are willing to even ask the most fundamental of questions regarding the custodial integrity of the bankers.

It is truly the dog that did not bark.

Stand and deliver. Either the bullion, or the truth.

Note:  You may click on the label 'German Gold' just below to see the other articles I have written about this subject.  In retrospect it seems rather obvious that this smash in gold price is tied to the request for the repatriation of Germany's gold, and the panic that ensued.  Just how depleted or compromised is the custodial bullion held in NY and London?

Gold Daily and Silver Weekly Charts - Curiouser and Curiouser

As you know I reported last night that there was a huge weekly drain of gold from the Brinks vaults.

This follows on a similar drain from JP Morgan's COMEX registered vaults.

There is no increase reported in any of the other COMEX vaults.

The metal bears have three weeks before the first delivery notice day in the August Gold contract.

I believe gold lease rates were negative for a fourth day, which is quite unusual.

As a point of interest, I have included a snapshot of the Café visitors map this afternoon. I think you can see this for yourself in real time by clicking on the map to the left. The clientele changes with the passing of day into night.

This is pretty much all the information that I can see as well, just some simple headcounts with basic locations. There is no need for any more, and it is certainly not worth the trouble or expense of gathering it. The numbers are not large in comparison to many internet sites, but I like to think of the regulars as being rather special, each in their own way.

The participation from around the world is remarkable, and heartening. Asia and the western Pacific will be coming along in a few hours.

The Café is always open, and we keep a light on for you.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - A Record High Close on the SP 500

Stocks were on a tear since late yesterday afternoon when Fed Chairman Bernanke said that the Fed will have to remain accommodative for the foreseeable future.

I believe that the SP 500 turned in a new closing high today.

Techs are appearing a bit stretched.  I would not get in front of this, since after all, its only money.

NAV Premiums of Certain Precious Metal Trusts and Funds

CME Reports That Brinks Has a Seventy Percent Decline in Registered Gold Bullion Supply

Nick Laird of Sharelynx.com informs me that Brinks is 'now being depleted' of private gold holdings.

I am following up to make sure that there has not been an error in reporting.  The CME reports these figures one day in arrears, on a weekly basis, so the chart below is dated July 9. 

I have extended the calendar axis a bit to show the nearly vertical drop in inventory of registered bullion. 

In referring to the registered supply at Brinks, Nick notes that:

"Brinks is now being depleted.   They have gone from 447,199 on July 3rd to 134,525 on July 9th which is a drop of 312,674 oz."

If this is correct, then this is a decline of 70 percent in the gold held in private accounts at Brinks in just one week.

If this is data is correct, it would not be too much of a stretch to say that this has the appearance of 'a run on the bank.'   Again, I will wait to see if the CME issues a correction for this.  It seems almost incredible.

Where is the gold going?  It was not transferred from the registered to eligible category, and does not seem to have been transferred to any other COMEX vault.  I suspect it is flowing East.  And perhaps it is being taken to replace gold that has been rehypothecated from custodial vaults somewhere.

Someone seems to know something.   Rather odd things are happening.

One looks at this and wonders, what next?  

Registered Gold On the COMEX Breaks the Million Ounce Level

Relative to the amount of contracts open the amount of gold held for delivery at these prices is somewhat 'thin' to say the least.  And relative to the global physical markets the amounts held at COMEX are almost too small to really matter.  And yet this is where prices are set.  At times it appears like a game of 'liars poker.'  How apropos.

If there is any good news for the gold bears it is that the first delivery notice for the next active August contract is three weeks away. The open interest for August is now a little more than 197,000 contracts, representing a potential 19,700,000 ounces of gold that could be called.

That a large number of contract longs would stand for delivery is highly unlikely to say the least, since COMEX is large a paper or virtual market place. But at a 20:1 leverage based on current deliverables, the possibility of a demand for delivery in excess of available supply is certainly a possibility.

That would represent an interesting situation. I don't know what would happen, and won't hazard any guesses.   I would imagine that a declaration of force majeure  and a forced cash settlement is most probable, along with hikes to 100% margins, except for privileged insiders.

Specs who get caught short may find the Big Banks, who are now largely covered,  to be rather unforgiving in their demands for any settlement.  I wonder which side the Exchange would favor. 

I am still chuckling to myself about the smirking pundit this morning who suggested that naked shorting of gold contracts on the COMEX would be a nice approach for the speculator to try and ride gold lower.  This was before gold rocketed higher later in the day.  

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

Daniel Drew

Although if you are particularly well connected politically, charges are entirely out of the question. It's nice to know the king.

The way eligible gold is fleeing the COMEX vaults, it also seems that some private holders of bullion may also be concerned about a 'bail in.'