Stocks and Precious Metals Charts - Quiet Comex Option Expiration - Bitcoin, the Mania

The rebound for gold and silver off the lows associated with the recent Non-Farm Payrolls and FOMC continued with gold taking and holding 1280 and silver putting a stick in the ground above 16.50.  I lightened up on a largish short term position I had put on at the time.  I did circle these instances of short term lows on the chart as you may recall.

As noted with the publication of the new Comex options calendars yesterday, today was an options expiration for precious metals.

February is the new active month for gold contracts.  March is the next active contract for silver.

Although it still matters for pricing, the Comex listed warehouse complex is starting to resemble a museum.   Very little gold flows in or out of its approved warehouses, excepting for those in Hong Kong which is by far their largest source of physical gold movement.

Silver is a bit different, because CNT is an active wholesaler of physical silver for the Mint among others, and it uses the Comex to warehouse its inventory flows.  But I just don't see the shortage of physical silver in the same light as gold.  It is easy to see that JPM is sitting on a massive hoard which is interesting.

Gold is a funny market now.  In some ways it reminds me of a ponzi scheme in which a relatively small amount of free float physical gold is being leveraged over a very large and growing number of commitments.

Since the young man is home for the holidays, we had a nice long conversation about blockchains and bitcoin again.   He understands the technical aspects of the data structure aspects of it, and built his own GPU based bitcoin mining operation in his bedroom just for grins a few years ago.

The net result of our long conversation is that bitcoin seems more like a mania that I had even thought before.

Blockchain as a data structure is an interesting way of recording transactions.  But its scalability is severely constrained unless the users delegate the maintaining of the blockchain, or the decentralized ledger of transactions, to a central authority with an enormous amount of computing power at their disposal. 

So at first blush it seems more suited for applications that involve fairly tight communities of users who wish to have a common record of their transactions that is decentralized.  But scalability is going to be a real issue unless you bolt something on that undermines the whole 'trust' issue.

Most 'users' of bitcoin have lite wallets, and rely on some third party to insure the integrity of their 'money.'  They do not generate their own blockchains, which is the very definition of how much 'money' you have.  You go back and sum up all of your recorded user transactions, and what you have left is what you have.

And this is contrary to the principles that drove technocrats who distrusted the Fed, for example, to seek an 'independent' crypto-currency.  And since it is unregulated, and in the hands of a few oligarchs in let's say China for example, it seems fairly dodgy even compared to a fiat currency which is transparent and regulated.   And you know how I feel about that sort of thing.

Once I understood the mechanics of how the chains are updated, it became a lot clearer why it takes an hour or so for a genuine bitcoin transaction to complete.  Most people who say they are using bitcoins for transactions are really just trading obligations held in trust by some third party.

If you have made money on it great.  But in my own estimation, and I could be wrong, the hyping involved in bitcoin is all too reminiscent of the dot com bubble.  And there is no talking to people who are seized by the desire to be rich, and those who seek power.

Like the dot com bubble, I suspect that the rewards from this digital gold rush will be taken primarily by those who sell the picks and shovels and storage and assaying services to the miners, and a few insiders and lucky early adopters.   And the average person is going to get skinned.

Have a pleasant evening.

Gold and Silver Option Calendars for 2018 - Comex Options Expiration For Precious Metals 26 December

As you can see there will be an option expiration for the January 2018 contracts for gold and silver futures on the Comex.

Within the next few days I will mark the more important contract months on the calendars.

For example, the trading for the February gold contract has the most volume by far compared to January.

Christmas Day

"Let us rejoice. Sadness is not becoming upon the Birth Day of Life Itself, which, now that the fear of death is ended, fills us with gladness, because of our own promised immortality.   No one is excluded from sharing in this cheerfulness, for the reason of our joy is common to all men.   Our Lord, the Conqueror of sin and death, since there was no one free from servitude, came that He might bring deliverance to all.

Let him who is sanctified rejoice, for he draws nigh to the palm. Let the sinner rejoice, since he is invited to grace. Let the Gentiles exult, for they are called to life. For the Son of God, in the fullness of time, has taken upon Himself the nature of our humanity, as the unsearchable depths of the divine counsel hath decreed, in order that the inventor of death, the devil, by that very nature which he defeated, would be himself overcome.

And in this contest that was undertaken for us, the battle was waged in accordance with a great and wondrous law of justice.   For the Omnipotent God engaged in combat with His most bitter enemy, not in the strength of His own Majesty, but in our human infirmity; confronting him with our very form and nature, and sharing likewise in our mortality; but free of all stain."

Conscience, Heroic Virtue, and Civil Disobedience in the Resistance to Evil

"A period of tension ensued, for the Danish population in general and its Jewish citizens in particular. Danish policy sought to ensure its independence and neutrality by placating the neighboring Nazi regime. After Denmark was occupied by Germany following Operation Weserübung on April 9, 1940, the situation became increasingly precarious.

In 1943, the situation came to a head when Werner Best, the German plenipotentiary in Denmark ordered the arrest and deportation of all Danish Jews, scheduled to commence on October 1, which coincided with Rosh Hashanah. However, the Jewish community was given advance warning, and only 202 were arrested initially. As it turned out, 7,550 fled to Sweden, ferried across the Øresund strait. 500 Jews were deported to the Theresienstadt concentration camp. In the course of their incarceration, Danish authorities often interceded on their behalf, as they did for other Danes in German custody, sending food.

Of the 500 Jews who were deported, approximately 50 died during deportation. Danes rescued the rest and they returned to Denmark in what was regarded as a patriotic duty against the Nazi occupation. Many of non-Jewish Danes protected their Jewish neighbors' property and homes while they were gone."

Lidegaard, Bo. Guarding Denmark’s Jewish Heritage, The New York Times, 26 February 2015


"We who lived in concentration camps can remember the men who walked through the huts comforting others, giving away their last piece of bread. They may have been few in number, but they offer sufficient proof that everything can be taken from a man but one thing: the last of the human freedoms — to choose one's attitude in any given set of circumstances, to choose one's own way."

Victor Frankl, Man's Search for Meaning

What is not mentioned in the videos below, and what is all too easily overlooked, is the protection and welcome and aid that Denmark's Jews received in Sweden, where they remained safely until the end of the war.

What is particularly troubling is when some look back, and in retrospect diminish what others may have done as not enough, as not pure enough, as not motivated in the right way.   To these we say, wait until you are faced with the same trial with the same stakes, and then come back and tell us how much better you have done.

Those who would enslave us wish us to believe that all men are created evil, and that there is nothing of fairness or justice in anyone's hearts.  They wish us to forget, to forget the actions of the Danish people, of the friends and family of Sophie Scholl in Munich, and of all the other actions of those who performed individual and organized acts of heroic virtue, most often unremarked and in quiet, in the face of ruthless, dehumanizing evil.

So therefore, they would have us think, we may all live and act as heartless swine, as they do.  After all, it's only human.   It is not.  It is the antithesis of the truly human.

We must not be silent in the face of such injustice, for anyone.

"It is always the soul that dies first, even if it's departure goes unnoticed. And it always carries the body along with it... Man is nourished by the invisible, man is nourished by that which is beyond the personal. He dies from preferring the opposite."

Jacques Lusseyran, Poetry at Buchenwald