NAV Premiums Of Precious Metal Trusts and Funds - 17,256 Ounces of Gold Leave PHYS

When I did my update today I noticed that the number of ounces held in the Sprott Gold Trust has declined by 17,256 ounces. I believe this is a very recent development. That is over $21.5M in gold bullion that has been redeemed which is a fairly large amount. I don't think it's for Hanukkah gelt.

With these paper price raids on gold, the redemption terms at PHYS must look good compared to the premium one can obtain to physical gold in Asia. Given the integrity of PHYS and the cost and bother of a redemption, it must be due to some significant price differentials. Or someone just sees something coming, and wants to have their gold very close to home, wherever that might be.

There were no changes at the Sprott Silver Trust, except for the usual reduction in cash on hand. The cash levels there are getting down to the point where I suspect that Sprott will consider another shelf offering sometime within the next six months at most.

Gold is flowing from West to East. It is a somewhat unique phenomenon, seen markedly in the ETFs and Funds that hold physical gold. I have not seen anything like it before in my memory.

This drawdown in physical gold inventories in the West is remarkable, especially when compared to the other precious metals and silver.

It seems to me to be a fairly strong indication of a mispricing in the market, most likely caused by the blatant price manipulation we see almost every day on the Comex.

But what is surprising to me is that we see the same kind of antics in the silver price, but the silver inventory is robust and even slightly increasing. I suspect that we are seeing Mideastern and Asian powers gearing up for a big 'currency event.' What exactly it is and when it will happen no one really knows, but when it does happen it will be noticeable, that I can almost guarantee.

When Nick Laird takes a break from the barbie, I will ask him for an update on the ETF drain, probably near the end of November. 

This is going to get interesting. Historic, I suspect.

Gold Daily and Silver Weekly Charts - A Special Request From Me To You

"The terrible, cold, cruel part is Wall Street. Rivers of (paper) gold flow there from all over the earth, and death comes with it. There, as nowhere else, you feel a total absence of the spirit: herds of men who cannot count past three, herds more who cannot get past six, scorn for pure science and demoniacal respect for the present.

And the terrible thing is that the crowd that fills the Street believes that the world will always be the same, and that it is their duty to keep that huge machine running, day and night, forever."

Federico Garcia Lorca

Gold was hit by an opening bear raid that was fairly obvious, and then was hit again in the afternoon, together with a wash and rinse in equities, based on the Fed minutes from a month ago which reopened the repeated canard of Fed tightening.

There was negligible activity in or out of the Comex bullion warehouses today, typical for non-active month of November.

What can you say about a culture when the word of the year was selfie. And the runner up was twerking.   And there was an excess selfie twerking by the spokesmodels of Wall Street, and the bloviating windbags of Big Money, on the boob tube today. 

Gold is flowing from West to East.

This video below was made by the family of Joan, who accompanied her on a very special 'Make-a-Wish' trip to Rome. Joanie is the angelic looking young lady in the hat. She is being treated at St. Jude Research Hospital for Children for osteosarcoma.

As you know, my way is to rarely ask for anything, and certainly not money.  Your fellowship and occasional thoughts are more than enough. When I write, I write for both you and me. And when we pray, we pray for both another and ourselves. Love is never an exclusive thing, it does not diminish us.  And if we do things with love, they can never be for nothing.

Today I am asking that if I have ever done you any service, any good at all, have helped you to see anything in yourself or in the world that has touched your heart, that you remember Joanie and her family in your prayers, as I will remember you in mine.  

And perhaps you can forward this request to those who are like minded, and would be inclined remember a child and her family in their thoughts and prayers, especially during the coming holiday season. 

In prayer we find not only the grace to care for another who is in God's hands, but to also realize, through their own trials which we willingly share, that we also are in God's hands too. It is better to discover this now, while we are in some better position to act upon it.

I know, like so many others who have seen and who have said so to me, that our society, which is based on greed and the self, is becoming coarse.  And the hearts of many have grown cold, and harsh.  It will get worse before it gets better.   But as Dostoevsky once said, 'If they drive God from the earth, we shall shelter Him underground.'

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Fed Minutes Triggered Wash and Rinse

The market was clicking along, buoyed by weak economic news, until the Fed minutes from a month ago came out, and traders hit the markets on QE taper thoughts, despite what Chairman Ben said yesterday.

I think the corruption of some members of the Fed is unfortunate but inevitable, and sometimes barely hidden by the fig leaf of plausible deniability and the 'scientific objectivity' of economics.

The only possible remedy is a surplus of transparency, and not more secrecy and the centralization of power in the hands of a privileged few.  And where offenses are found, the correction must be swift, and forceful in its example. 

As they used to say, Caesar's wife must be above suspicion.

Have a pleasant evening.

Trickle Down Recovery: Monetary Expansion, Excess Bank Reserves, and Leftovers For Main Street

“Trickle-down theory - the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”

John Kenneth Galbraith


"There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below."

William Jennings Bryant


"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. You tell me that if I take the deposits from the Bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin.

Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out!

Andrew Jackson

It is not quite as straightforward as this, but the two charts below help to illustrate a point that the Fed, and the government, are pursuing a 'top down' approach to a recovery from the banking crisis as a matter of policy.

And one of the most consequential flaws in this policy error is that the financial system, and a fiscal policy that largely favors the one percent, are largely unreformed. Big money has thoroughly corrupted the political process.

I cannot tell from the Fed's descriptions whether these excess reserves include any funds which they may have committed to foreign owned banks that are not included within the Fed's definition of their own 'depository institutions.'

The Fed owns this policy error through its own actions, its complacent posture as regulator, and as a thought leader and key influencer for government economic policy. The Fed has not been neutral, and is certainly not blameless. It has been a critical enabler for a financial system that turned predatory under Alan Greenspan.

The Fed has been an aggressive advocate for the policy errors and imbalances that have led to both the tech and housing bubbles, widespread abuses and fraud in the financial system, and for the dangerously unbalanced 'recovery' that we have seen since the last bubble which they have created.

The notion that if you just leave the markets alone they will naturally distribute the fruits of our national labour and resources equitably is a corollary of the 'efficient markets theory.' That is to say, it is a fraud based on an outrageous load of hogwash.

And it is strangling the economy. But the political and privileged class could care less, because they are the primary beneficiaries of the system which they have substantially helped to create over the past thirty years. They are doing very well by it, taking everything that they can carry, bleeding the real economy with loans, frauds, bribes, graft, and fees. And they present the bill to their unfortunate victims by financing their schemes with the people's own money.

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

 

JFK's Report To America - Fifty Years Ago

Gold Daily and Silver Weekly Charts - Artificial Intelligence

Just a little dribble of bullion into the vaults today, and otherwise it truly is an 'inactive month.'

In watching the financial TV spokesmodels, and the hollow men like Bill Gates, I think the word for today is 'banality.'  

The financial class gives 'wasteland' a new dimension in vacuousness. 

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - De Trop

The spokesmodels seemed just desperate and sad today.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts

Today was more of the same, with an easy hit on price during the NY trade.

There was some movement into the customer storage (eligible) category on Friday of about 31,000 ounces.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - May the Odds Be Ever In Your Favour

The spokesmodels of Bloomberg TV were wondering why Jon Corzine is being annoyed by the little people with these lawsuits. After all, didn't everyone get paid back?

Why are people so 'litigious' these days asks the pampered princess. They just must be bitter for some reason.

Yes, opines the visiting village idiot, people sold at the bottom during the financial crisis, and now they are just envious and angry, and taking their bitterness out on poor Jon Corzine.

You cannot make this stuff up. It is right out of The Hunger Games. And people wonder what the JPM people were thinking when they opened the twitter gates to the barbarian hordes of the disgruntled. They just do not get it.

Have a pleasant evening.

John Law and the Mississippi Bubble

John Law and the Mississippi Bubble by Richard Condie, National Film Board of Canada

NAV Premiums of Certain Precious Metal Trusts and Funds

Gold Daily and Silver Weekly Charts - Claims Per Ounce at 69 to 1

Nothing much of note in the metals today as they continued to bump into overheard resistance.

There was little movement of gold bullion in or out of the Comex warehouses.

I had asked Nick Laird of Sharelynx to check his figures and it turns out that the 'claims per ounce' from yesterday were a bit light at 63.  That did seem very little for a 51,000 ounce change in registered inventory.

A corrected chart is shown below. 

We are at an all time record of 69 potential claims for each ounce of deliverable gold.

Koosjansen has a new update on 'West To East Gold Distribution'

Have a nice weekend.

 

SP 500 and NDX Futures Daily Charts - Up Up Up

This was the sixth week of gains on the SP 500 as VIX slumped near the yearly low.

The perception is set that Janet Yellen will maintain an exceptionally accommodative policy at the FOMC.

Have a pleasant weekend.

Comex Registered Gold Falls To 587,235 Ounces - Claims at 63 to 1 - The Karma of Buddha's Palm

There was a rather large adjustment into eligible gold storage at the HSBC warehouse as 51,617 ounces left the deliverable 'registered' category.

This is not such a big short term issue since November is a' non-active delivery month' for the Comex precious metals futures markets.

But in fact there is so little actual physical delivery activity taking place there anymore, even in an 'active month,' that one might argue that the New York metals market is approaching practical insignificance, long before it can reach the storied permanent backwardation.

However, one must keep up appearances, since the Comex still effectively sets the metals price for much of the free world, if only aspirationally these days for Asia.

More charts will be added as they are updated later this evening.

Earlier today in a piece about price premiums in India I included a link to the online section of Charles Mackay's Extraordinary Popular Delusions and the Madness of Crowds.

You might want to have a quick glance over the chapter regarding John Law's highly innovative dalliance into the théorie monétaire moderne that was adopted by the nation of France, almost to the point of its demise.  It is a useful reminder that truly, there is nothing new under the sun.

As theoretical as all these pricing antics and market manipulations might seem, exercises in price setting for personal greed or policy considerations have real world consequences, especially when they are applied over long periods of time, and with some resort to coercion.

The longer that valuations are maintained against the market, the stronger the coercion to sutain them must become, to the demise of freedom, and the point of exhaustion and collapse.   The Soviet ruble is a possible case study for what happens when the unsustainable meets the inevitable, even with a hairy knuckled police state backing it up. 

We might start thinking about 2014 as the year of financial consequences.

Weighed, and found wanting.

Stand and deliver.

Gold Daily and Silver Weekly Charts - 修羅の花 'The Flower of Carnage'

“I recently made fairly detailed presentations to two Asian central banks... I was struck by the fact that one of the central bankers did volunteer to me that most central bankers are aware of the fractional reserve nature of the Western gold banking system, and its vulnerabilities.

He clearly acknowledged their understanding that gold does not back all of the claims to gold that are floating around the world financial system, particularly when it comes to the West. You would probably never get a central banker to acknowledge that publicly, but that is precisely what he said to me off the record.”

Chris Powell, KWN

There was a fairly substantial adjustment of gold bullion from registered to eligible in the HSBC vaults yesterday. It brings the inventory of deliverable gold down to a new record low. I will post something about that later this evening.

Intraday commentary touched on the 21% premium being paid for physical gold bullion in India now, and equates it to a US dollar price of $1,565 just to give you an idea of the divergence between paper and physical in the world today.

Someone sent me a rather insipid piece on gold demand in the FT. The only excuse for it is that the author unquestioningly accepts the data and quotes from the World Gold Council at face value.

The reason for this disillusionment and investor bearishness for gold is slack demand from India.  This is the same India that is willing to pay a 21% premium for any physical gold they can get through the very obtuse and restrictive government controls.  QED, right? 

Since the WGC is jointly responsible for setting up GLD, I can see where they might wish to go out of their way to put a dreary, downcast outlook on their own members' products. 

The action in the gold market since last October has been nothing short of remarkable.  I suspect it was a trading ploy gone badly for the reasons which I have stated before, with semi-official sanctions. 

But it takes a special sort of insular arrogance to keep doubling down on a bad trade, and hope that it finally turns your way.   If these jokers do not wise up fairly quickly, this one could make the London whale look like the Canary Wharf carp.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - '16 Trillion, Shoot It All'

OMG.