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There were more large silver withdrawals from the Comex Deliverable Inventory with 773,018 ounces taken out of the Brinks depository. Additionally, there were withdrawals of 1,418,178 ounces of silver from the eligible (customer) inventory.
Comex will have to add to their deliverable inventory from some other sources in a tight market. Typically that implies higher prices.
Someone with credibility suggested to me yesterday that a panic liquidation in all assets may be in the cards in the minds of the Wall Street banks and the monied class. When you cannot win the game, you kick over the card table and turn out the lights.
Since they are sitting in large pools of cash, thanks to the Fed, this would allow the monied interests to buy good assets up on the cheap, to fill the holes in their balance sheet as they write off their remaining fraudulent assets. A reset for them, and a misery for the rest.
I remain a little skeptical that this is their intent, but it would 'work' to their benefit. After all, 'first by inflation, then by deflation...'
More likely is a longish period of stagflation and continued kicking the can down the road. And a gradual exposure of more fraud in the financial markets, with fake paper assets undermining the real economy and genuine wealth.
And then it gets ugly.
A bounce based on a less pessimistic view of global growth, from an oversold considition. We will have to wait and see what the rest of the week brings, and how we go into the Comex option expiration at the end of the month.
China raised its bank reserve requirements again, in the hope of slowing down the 15% YoY growth in money supply they are seeing, and a troublesome inflation situation they are still managing to keep under control by stifling domestic consumer demand through low median wages, also in support of their export policy and top down social structure.
I added short stock index positions into the close and took short term profits on the miners. I am now long gold and short stocks again, in anticipation of a backtest of this bounce. I will go with whatever way it breaks up or down.
Better than expected industrial production numbers out of China eased fears of a global slowdown in the BRICs, and less wretched than anticipated retail sales numbers in the US helped to spark a stock rally, as we had indicated might happen.
The next couple of days will tell us if this is a trend change or a dead cat bounce. Keep in mind this is an option expiration week.
I took a broad stock index short in the last hour of trade near the peak of the rally. I will use that to balance my remaining long position in gold, having taken the profits on the miners I picked up on the downtrend last week.
