Gold Daily and Silver Weekly Charts - December Continues to Play Out

"The powers of financial capitalism had a far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert by secret agreements arrived at in frequent private meetings and conferences."

Caroll Quigley, Tragedy and Hope

Gold and silver did not get hit hard on a Non-Farm Payrolls day. Film at 11.

If you look at the Comex inventory report below, you can see that they have bucked up the deliverable inventory to almost 700,000 ounces.  And they have managed to knock down the December open interest a bit as well.

Ok guys, time to start moving that bullion, and letting more actual deliveries take place.  It looks like you will have December covered. 

As for February, who can say.

The Shanghai Gold Exchange says that it intends to attract more foreign investors with new products.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Stocks Rise On Peachy Jobs Report

Stocks rose sharply on better-than-expected Nonfarm Payrolls report.

What happened to all the fear about the taper?

The tape will be painted into the year end. There are a lot of hedge fund and trading desk bonuses at stake.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Tomorrow

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage."

John Kenneth Galbraith

There was intraday commentary on the leverage against deliverable gold on the Comex here.

Gold was under some renewed downward pressure today ahead of the Non-Farm Payrolls report tomorrow.

About 10,000 ounces of gold were added to the deliverable inventory at the Comex yesterday.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Up Is Down and Down Is Up

GDP came in better than expected for Q3 this morning.

Stocks were shaving off points as concerns about 'the taper' were floating around the pool.

Tomorrow is the Non-Farm Payrolls and expectations are leaning higher.

Have a pleasant evening.

Comex Deliverable Gold Still Out On the Tails of Leverage at 57 to 1

"Jim, lad, there be consequences an' then there be consequences. Devil take 'em all, says I, and pass aft the rum."

Robert Louis Stevenson, Treasure Island

The ratio of potential claims to deliverable gold remains at an extreme of 57 to 1, despite the pricing antics designed to shake off the standing longs, and to scrape out physical supply from wherever it can be had.

But the leverage remains quite high in what is normally a big delivery month of December. That so few longs have yet to be filled with physical bullion is interesting.

January is a non-active month.

So we will probably see continued volatility, more price bluffing maneuvers, and more disinformation from hangers-on, hired help, and useful idiots.  

The shorts are trapped, and it is just a matter of time until they have to let go and allow the price to rise. And the odd thing is that the producer/merchants have already read this and have shifted their shorts to the 'smart money.'

I think for now the gold bears' goal is for the bullion banks and hedge funds to get through the big December delivery month without breaking anything or losing control of price, even if they have to allow it to rise towards the end of year to permit more gold to come to delivery.  

And the Banks keep encouraging the funds to take those shorts on to the limit.  Hoo hah.

What is lacking is a major player who is willing to call them out.  So far the game is 'working' for everyone on the short term.  Those who want it are getting bullion on the cheap, and those who want to take their short term money are getting paid.

It will be an interesting month. I will be surprised if there is a resolution, and as you know I do not expect a Comex default, although a technical de facto default is always a possibility, as a fail to deliver and a force majeure. Not to put a fine point on this temporally, the Comex may be like the Battle of Stalingrad, but the Shanghai Gold Exchange is Kursk.

More likely the jokers will continue to try and bluff through year end and close their books, and regroup in January if they can make it without allowing the price to rise too far. They may keep doubling down and increasing their leverage. What could go wrong? This is how an LTCM and MF Global happens. They are a bit hard to predict because of the obvious opacity, but also because it takes some player or some incident to send them tipping over.

But it does seem to be in a spiral now as the physical offtake to Asia and strong hands continues. Most of the world sees the gold leasing scheme for what it is, even if those in the fog of the Anglo-American banking cartel do not. There the status quo maintains its studied silence, while the flacks continue to put up their smokescreens for their cronies and patrons. And it is hard to believe that there are those in official positions who are not aware, and providing support for this both directly and indirectly.

What a funny system of price discovery this is.  With a few minor variations, the ending seems almost inevitable. 

And yet we keep coming back to this place, again and again.  Wickedness is resilient, persistence, but the virtue and vigilant righteousness of the people seems to ebb and flow.

"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."

From the original minutes of the Philadelphia bankers sent to meet with President Jackson February 1834, from Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels

Comex and Shanghai - Gold and Silver Deliveries Compared Over the Last Five Years

I asked Nick of Sharelynx if he could wrangle up some comparison charts between the Comex and Shanghai for our inquiring minds.

Interestingly enough, Shanghai dominates in gold delivery, but Comex does reasonably well for silver over the last five years.    The new charts are shown below for both metals.

Comex delivered a total of 1,025 tonnes of gold, whereas Shanghai did 8,655.  And in the case of Comex much of their delivery had never left the warehouse complex until recently.  It went into customer storage and came back on a trade.  In Shanghai the gold must leave the warehouse.

In the case of silver, Comex has delivered 15,165 tonnes whereas Shanghai has done only 3,266.  But if you look at the Shanghai trend it is obviously growing at an accelerating rate in silver.

Interestingly enough, the delivery ratio of silver to gold at the Comex is about 15:1.  Again, we have to allow for the round trips that occur.

In the case of Shanghai the silver to gold ratio is skewed heavily to gold.  Gold seems to be the metal for China.   But that skew appears to be lessening in the past couple of years.

A comparison of the recent trends shows that the Comex is relatively light on deliveries whereas Shanghai seems to be accelerating

As a reminder, the London Bullion Market Association is the bigger Western delivery exchange, but its records are not yet available to us for analysis like this.

The source of these charts is the master data wrangler, Nick Laird.

Wages As a Percent of US Corporate Profits Lowest Since WWII

"Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir."
"Are there no prisons?"
"Plenty of prisons."
"And the workhouses." demanded Scrooge. "Are they still in operation?"
"Both very busy, sir."
"Those who are badly off must go there."
"Many can't go there; and many would rather die."
"If they would rather die," said Scrooge, "they had better do it, and decrease the surplus population."

h/t Zerohedge

Gold Daily and Silver Weekly Charts - More and More Interesting

I am closely watching the December Comex gold contracts still standing. As of yesterday there were enough to pose a bit of a concern with the current amount of deliverable gold at the Comex, even with the recent additions.  

The price volatility, both up and down, on the Comex is symptomatic of the technical nature of the trading there now, with technical implying artificiality.

As I have said, I do not expect the Comex to be the locus of a break in the gold market, since it is not the focus of the action, which has now shifted firmly to Asia and the Mideast.  If the Comex should falter, it will most likely be because of a more fundamental break, or scandal, in the system.  but I can't rule it out, as a de facto if not actual default. 

Comex is becoming like a shell game, or liar's poker between ill-mannered children in suits, and it's really a shame.   But that is what happens when a society starts mistaking wealth for wisdom, and a trader's cunning for sound social or even economic judgement.  

Have a pleasant evening.

SP 500 and NDX Futurs Daily Charts - No Recovery

It is hard to believe, but Alan Greenspan actually said something of value today.

Greenspan noted the stock market valuations, and said that corporate profits may be reaching some diminishing returns as a percentage of GDP.

I have not done the math or looked up the figures, but he made the point I think that the artificiality of the recovery is notable, and cannot be sustained without some sort of organic growth from the real economy.

The one percent won't understand any of this, what is really going on, because they have lost all perspective, and so have their hangers-on who only say for pay.   Sometimes it almost gets funny if it were not so sad.  I thought JPM Jim Glassman's comments on Pope Francis were hysterical. 

They speak with one another, and get all sorts of confirmation bias from their 'winning,' but really the divergence between the real economy and the financial system as it is currently constructed is one of the more dangerous conditions we can see in a nation's history.

The chart of population employed as a percentage of total population below is rather telling.

Let's see how this all goes.  Generally it does not go well.

Shanghai Gold Exchange Cumulative Deliveries Of 8,655 Tonnes Since 2009

“In a room where
people unanimously maintain
a conspiracy of silence,
one word of truth
sounds like a pistol shot.”

Czesław Miłosz

Since the beginning of 2009, the Shanghai Gold Exchange has delivered about 8,655 Tonnes of gold bullion. That is about 278,264,715 troy ounces.

Comex is the tail wagging the dog of Asia and the Mideast.

The Shanghai Gold Exchange competitive differentiation is in their motto: Integrity Leads to Prosperity.

Gold Daily and Silver Weekly Charts - Deliverables from Scotia - Kozlowski Redux

Scotia added 60,000 ounces to the deliverable category yesterday from their vaults. Brinks threw in about 4,635 ounces as well.

This brings the deliverable (registered) bullion inventory back up to 655,556 ounces, a bit more respectable for the December delivery month.

As far as deliverable inventory goes,  Scotia and JPM hold the bulk of it.  As a percentage of total holdings, HSBC is remarkably light on deliverables.   Must be an Asian thing.

For now the Comex is setting price, the tail wagging the dog.  But at some point that will change, and the Comex will become a price follower, and then we may see some real market clearing.  The longer these antics go on, the more violent the market correction coming from a blind side will be.

But until then it is the usual games, and the usual suspects.

Speaking of financial antics and the usual suspects, after the bell it was announced that ex-Tyco CEO Dennis Kozlowski, who famously used fraud to take $134 million from his company, is being granted parole from prison.

He and the CFO Mark Swartz had been sentenced to 8 1/3 to 25 years in prison for grand larceny, conspiracy, falsifying records and violating business law. They were found guilty of giving themselves illegal bonuses and forgiving loans to themselves from 1999 to 2002.

In many ways Kozlowski and Swartz were pioneers for American financial innovations that were not fully realized until the 2007-8 financial crisis.

"Back when I was running Tyco, I was living in a CEO-type bubble. I had a strong sense of entitlement at that time," Kozlowski told the board.

Kozlowski was clearly a trend-setter.

Is it time to go long high-end umbrella stands and wastebaskets, or custom-tailored Italian silk burnt orange prison jumpsuits and Presidential handcuff links? Once an outlier, massive financial fraud now seems to be in season in both NY and London, if not de rigueur.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Permanent Prosperity, Prêt-à-Porter

Stocks are tottering into the end of year, near to bubble levels.

With the Fed kicking in $85 billion per month as walking around money for the one percent, things have never looked better.

Equity price is way over its skis, and needs some organic earnings and revenue growth to justify even current levels. But that reckoning is for another day.

Gold Daily and Silver Weekly Charts - Lions, and Tigers, and Bears, Oh My!

This is a fairly economic information heavy week, which will see both a Non-Farm Payrolls report and the second look at Q3 GDP. The weekly economic calendar for the US is included below.

The metals were pounded fairly steadily all day, in light trade. As I mentioned some weeks ago, we may see the 'December effect' in gold and silver, in which the metals are hit in the first part of the month, only to recover into the year end.

There was little movement in the Comex metals warehouses on Friday as we had one large deposit into storage, and nothing was done with the deliverables.

Bloomberg TV was recommending the purchase of bank stocks as a means of employing your wealth,  instead of gold and silver today, complete with a comparison chart.  And they included European bank stocks in that, as if they were somehow inferior to the wondrous US bank stocks, but were still better than precious metals.

Sometimes it really is that obvious.

Today was the first delivery day for the December contract.

Have a pleasant evening.

"Take care that you do not despise one of these little ones; for, I tell you, in heaven they will continually see the face of my Father."

Matt 18:10

SP 500 and NDX Futures Daily Chart - Preparing for the Paint Job

Light volumes, listless trade.

The high flyers were not responding well to the new month.

We can expect this to be a tape painted month in the latter half. We could see some profit taking
and squaring up in the first part.

NAV Premiums of Precious Metal Trusts and Funds

 

John Ralston Saul: Voltaire's Bastards

John Ralston Saul discusses the ideas put forward in his book Voltaire's Bastards and their application today.

He talks about the growth of oligopolies in the name of free markets, the pitfalls of the debt economy, and the problems with the way in which the West has responded to the financial crisis.

Glenn Greenwald on BBC HardTalk

Glenn Greenwald is interviewed by the BBC's Stephen Sackur.

Weekend Reading

The forces of darkness are at a zenith, and the love of many grows cold because of the increase in wickedness.

I think that the boundary lines of the engagement have been drawn, unequivocally. And they are well done.

There will be those who will embrace or reject this based on the great message which is included, of the equality of all people as people, and the liberation of God's love which makes us fully human, and alive. Even though we will have to return to that love, again and again, for strength and forgiveness, given our weaknesses. The door is open.

This message stings the pride of those who would ascend to the throne of God themselves by themselves, who consider themselves superior to their neighbor, and the gifts of God which come from God as their own, and profane them in their use. Their greed is a reflection of the emptiness that is pride.

The choice is between life and death. And we all choose, one way or another, whether we fully realize our choice. We may try to rationalize it, and hide the face of that darkness whom we serve from our own hearts. But we will choose.

The first sin was that of Lucifer, in his pride. And those who fall will fall with him, in it.

Let go of your foolish pride, and choose life.

"The great danger in today’s world, pervaded as it is by consumerism, is the desolation and anguish born of a complacent yet covetous heart, the feverish pursuit of frivolous pleasures, and a blunted conscience. Whenever our interior life becomes caught up in its own interests and concerns, there is no longer room for others, no place for the poor. God’s voice is no longer heard, the quiet joy of his love is no longer felt, and the desire to do good fades.

This is a very real danger for believers too. Many fall prey to it, and end up resentful, angry and listless. That is no way to live a dignified and fulfilled life; it is not God’s will for us, nor is it the life in the Spirit which has its source in the heart of the risen Christ.

I invite all Christians, everywhere, at this very moment, to a renewed personal encounter with Jesus Christ, or at least an openness to letting him encounter them; I ask all of you to do this unfailingly each day. No one should think that this invitation is not meant for him or her, since “no one is excluded from the joy brought by the Lord.” ...

There are Christians whose lives seem like Lent without Easter. I realize of course that joy is not expressed the same way at all times in life, especially at moments of great difficulty. Joy adapts and changes, but it always endures, even as a flicker of light born of our personal certainty that, when everything is said and done, we are infinitely loved.

I understand the grief of people who have to endure great suffering, yet slowly but surely we all have to let the joy of faith slowly revive as a quiet yet firm trust, even amid the greatest distress: “My soul is bereft of peace; I have forgotten what happiness is… But this I call to mind, and therefore I have hope: the steadfast love of the Lord never ceases, his mercies never come to an end; they are new every morning. Great is your faithfulness… It is good that one should wait quietly for the salvation of the Lord.”

Sometimes we are tempted to find excuses and complain, acting as if we could only be happy if a thousand conditions were met. To some extent this is because our “technological society has succeeded in multiplying occasions of pleasure, yet has found it very difficult to engender joy.”

I can say that the most beautiful and natural expressions of joy which I have seen in my life were in poor people who had little to hold on to. I also think of the real joy shown by others who, even amid pressing professional obligations, were able to preserve, in detachment and simplicity, a heart full of faith. In their own way, all these instances of joy flow from the infinite love of God, who has revealed himself to us in Jesus Christ.

Thanks solely to this encounter – or renewed encounter – with God’s love, which blossoms into an enriching friendship, we are liberated from our narrowness and self-absorption. We become fully human when we become more than human, when we let God bring us beyond ourselves in order to attain the fullest truth of our being. Here we find the source and inspiration of all our efforts at evangelization.

For if we have received the love which restores meaning to our lives, how can we fail to share that love with others?

Jorge Mario Bergoglio, Francis I, Evangelli Gaudium