Another 100,000+ Ounces of Gold Get 'Delivered' at 1,209 Yesterday

Over 100,000 ounces of gold were claimed on delivery yesterday at the bargain price of 1,209.80.

That bring the total ounces taken in the first few days of the June gold 100 oz contract delivery to a record 878,400 ounces.

The big takers are a JPM mystery customer and their house account, and the house account at Nova Scotia.

But in all reality this is relatively peanuts compared to what the 'exceptionally well-informed' were able to make on the movements in the bond markets this morning, given the size and leverage of the position in that casino.  And a casino it surely has become.

But every little bit helps when one is attempting to sustain the unsustainable.

In the second chart I show the annual deliveries of gold in ounces on the Comex.

So for example, in all of last year there were about 1.5 million ounces delivered.

The blistering pace we are seeing now reminds one of the type of action that we were recording prior to gold's big move higher starting around 2006 when the central banks changed from net sellers to net buyers.

The big price movements in physical gold and silver are yet to come I think.

Jobs Report Huge Miss at 38,000 Jobs Added, Stagnant Real Wages, Shrinking Labor Participation

"This election was lost four and five and six years ago and not this year. They didn't start thinking of the poor old common fellow until they started out on the election tour.

The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickled down. Put it uphill and let it go and it will reach the driest little spot.

But he didn't know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night anyhow. But it will at least have passed through some poor fellow’s hands.

They saved the big banks, but the little ones went up the flue."

Will Rogers, 5 December 1932

I said yesterday that 'I have a hunch that gold and silver are being capped here for a reason.  Maybe.  It's hard to tell with the non-linear Fed.'

And today I think that things are becoming clearer, as suspected.  The Fed needs to raise rates to cool down the economy, in a pig's eye.  They want to raise rates for their own policy purposes, so they can lower them again when their latest paper asset bubble fails.

The common person may not understand all this, and the lessons from history.  But the 'experts' most certainly should understand them, and quite frankly they do.   They may not say so, they may never admit it, they may let themselves be convinced, and even convince themselves and quiet the nagging doubts, but at the end of the day they know exactly what they are doing, what they are abiding, what they are enabling if only by their silent acquiescence.

Then why do they keep pursuing the same failing policies, and try to justify them with wildly inaccurate forecasts and flat out misstatements of fact?   Why do the wealthy prosper while the country as a whole stagnates, and for years?

Why do the politicians go all out to try and maintain things as they are, even though they can clearly see with their own eyes that they are failing the people whom they have pledged to serve by oath?

Herein lies the credibility trap.   They wish to keep things as they are because, at least for them and their friends and cronies, the times are good, and for some wildly so.  Innovation is risky, but the wrongheaded consensus of the insiders is safe.   Insider do not speak ill of other insiders, and therein can keep their sinecures, their connections, and the camaraderie of the fortunate few.

They are caught between the age old Scylla and Charybdis of pride and profit.  They fancy themselves to be exceptional, a credentialed elite, but the sad truth is that their conceits and self-delusions are as old as Babylon, and evil as sin.

BILL MOYERS: And you say that this oligarchy consists of six megabanks. What are the six banks?

JAMES KWAK: They are Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo.

BILL MOYERS: And you write that they control 60 percent of our gross national product?

JAMES KWAK: They have assets equivalent to 60 percent of our gross national product. And to put this in perspective, in the mid-1990s, these six banks or their predecessors, since there have been a lot of mergers, had less than 20 percent. Their assets were less than 20 percent of the gross national product.

BILL MOYERS: And what's the threat from an oligarchy of this size and scale?

SIMON JOHNSON: They can distort the system, Bill. They can change the rules of the game to favor themselves. And unfortunately, the way it works in modern finance is when the rules favor you, you go out and you take a lot of risk. And you blow up from time to time, because it's not your problem. When it blows up, it's the taxpayer and it's the government that has to sort it out.

BILL MOYERS: So, you're not kidding when you say it's an oligarchy?

Gold Daily and Silver Weekly Charts - Big Deliveries, Small Price Action - Payrolls

"Amateurs want to be 'right.' Seasoned investors want to make money."

I got a chuckle from article this evening about how technical analysis is useless.  It was written by a fellow who admits in the opening lines that he does not use it and knows very little about it.  Well, it is no real surprise then that he thinks it is useless.

It would be as if some child of nature from deep in the Amazon discovered an sextant left behind by some explorers, and found it to be very ineffective as an axe.  Too short and bulky. Useless!

Or even more aptly, if an inexperienced but ardent weekend warrior were to receive a collection of tools as a gift and pronounce, after some cursory experimentation without experience and instruction, that a roofing square makes a very poor wood chisel indeed.

Seasoned traders tend to use whatever works for them in order to get the job done.  They are focused on the task, and they improve over time by learning.   And others like to argue, and debate seemingly without end on various chatboards. about systems and seers, about which is best for predicting the future, and the various merits of each.  They do not want a set of tools, but a black box, or better yet, a crystal ball or a prophet.  They focus on the means without fully understanding the place that they have in achieving the ends.

Don't do this.  It is a complete waste of time.  If there were even a nearly perfect system, or a prophetic voice who could tell you the course of future market prices even eight out of ten times, I guarantee you that they would not be dishing it out on the internet, at any price, unless they were as wise as Solomon and as selfless as angels.

There was intraday commentary about the unusually high volume of gold deliveries for the June contract on the Comex for the first three days of this period.  Given the recent history, it is almost astonishing.

The European Central Bank did nothing today.  It is what they seem to do best.

They suggested that they might start buying corporate bonds, presumably at non-market rates.

Why don't they just mail envelopes stuffed with cash to their corporate cronies and banksters?  I mean, from what I can tell, most of the policy in the US and Europe has been focused on further enriching a wealthy few, and sustaining a corrupt financial system that is unsustainable without heavy subsidies and seigniorage of information, special allowances, and outright monetary assistance.

In the European Bank's defense, the Fed is just as bad or worse when it comes to lack of principles, class myopia, and cronyism.

I have a hunch that gold and silver are being capped here for a reason.  Maybe.  It's hard to tell with the non-linear Fed.

As old Sister Killian used to say of such behaviour, 'babies must play.'

Non-Fulltime Payrolls Report tomorrow.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - The Pause that Regresses

Stocks went sideways today on very lackluster trading ahead of the Non-Fulltime Payrolls Report tomorrow.

To paraphrase Charles Dickens' Mr. Brownlow, the Fed is an ass.

Have a pleasant evening.