It's Friday February 15th, and the "big news" of the day is there is a SALE on all gold and silver products. For a limited time only; gold products are available starting at the unbelievable sticker-price of under $1600/oz, while silver products are available at the fantastic starting-price of under $30/oz.
This is how all price-declines in the bullion sector should be reported (by responsible commentators) and how all price-declines should be regarded by both potential bullion-buyers and current bullion-holders.
If sirloin steaks were suddenly available at $2/lb; we wouldn't look at the price tag on the packages and think to ourselves "those damn Bankers are manipulating beef prices again." Instead, our reaction would be "it's steak for dinner tonight."
This much is patently obvious to people. For anyone/everyone contemplating purchasing (more) bullion: low prices are obviously better than high prices. However, current bullion-holders (if they are newer readers) may still be scratching their heads as to how LOWER prices today are "good" for them too.
And for those newer readers; I'll once again trot-out my famous "chocolate bar" hypothetical scenario.
Suppose the banksters hated chocolate bars as much as they hate gold (could anyone be that Evil?); and so they "shorted" chocolate bars ruthlessly (along with their other market-manipulation techniques) and drove the price of chocolate bars to 10 cents apiece.
The NEXT DAY all the world's store-shelves would be cleaned out of these ultra-cheap chocolate bars. But that is only the start of the repercussions here. No chocolate-bar manufacturer could produce chocolate bars for 10 cents (let alone make a profit), and so all the chocolate-bar manufacturers would shut down.
We would have INFINITE demand; ZERO supply; ZERO inventories...and then what happens to the price of chocolate bars? The same thing that happened to a Rembrandt painting -- after the painter died. The price goes straight up.
But the price doesn't just go back up to $1/bar...or $2...or $5. If you could find any sellers; prices would likely start at $10/bar. They wouldn't stay there. At $10/bar; suddenly you would have chocolate-bar manufacturers sprouting-up like mushrooms -- and eventually prices would head back down to equilibrium.
Gold and silver are similar to this example; with one HUGE difference. Restarting existing gold/silver mines generally takes at least a year, and often several. Building new mines is generally a ten-year process from beginning exploration to extracting.
Thus the difference between the hypothetical chocolate bar scenario and the REAL scenario is this: because the supply-reaction (to price) is so much slower for gold and silver than chocolate bars, this means the "spike" will not only be higher, but the PLATEAU of these high prices will last much longer.
If the banksters continue with their psychopathic, scorched-earth policies in this sector -- and finish driving bullion-inventories to zero -- current bullion-holders cannot even IMAGINE where prices will go.
This is why I say again and again and again (as "shorthand" for this long discussion):
It's Monday February 18th, a new week, and a late edition of The Grind. Is it a little Spring Fever in the air, or what?
Between increased mail, increased activity on the forum, and even more interview-requests than normal; I'm stretched a little thin at the moment. So those long, rambling monologues which people have gotten used to lately will probably not be nearly as common in the days ahead. (I'm sure there are some who are grateful for that.)
In bullion markets, gold and silver prices edged higher following last week's theatrics in metals markets by the banking cabal. A quick glance at the news didn't reveal anything especially interesting, except a report from Basher Central on "shrinking long positions, and growing short positions".
This confirms what was recently reported over on Turd Ferguson's blog, and covered in a recent post over here. "Open interest" in the gold market is at its lowest level (excepting Christmas) since August of last year.
As I noted in that other post, the significance of this is that this was the last thing we've had anything remotely approaching a "rally" in the sector.
Low open interest can be thought of as "the tide being out" in bullion markets, and (quite naturally) this tends to be the sort of thing which characterizes BOTTOMS in the market. However, as I've learned from years of observing the fine work of veteran metals analyst Dan Norcini; just because it looks like a "bottom" doesn't mean that open interest (and prices) can't go lower.
In other words, don't read today's commentary and go out and "mortgage the farm" buying bullion. As I always tell people: no leverage (lol). However (once again) we are getting reasons to strongly suspect that the next move in prices will be higher...
CFTC: Large Speculators Cut Gold Net Length As Traders Add Short Positions
Large speculators trimmed their net-long position in gold during the most recent reporting period for Commodity Futures Trading Commission data. Only unlike most other similar situations in recent years, this time the decline was fueled mainly by traders establishing short, or bearish, positions rather than mainly selling to exit or capture profits on bullish ones.
The large-spec net long also fell for silver, but increased slightly for the industrially oriented precious metals of platinum and palladium. A pair of CFTC reports for copper was mixed.
The CFTC compiles data as of each Tuesday that provides a snapshot of how market participants are collectively positioned in all U.S. futures markets. A net long refers to how many more traders are bullish than bearish, as it is determined by subtracting the number of shorts (bearish bets) from the number of total longs (bullish ones). The most recent data is as of Feb. 12.
While the Comex gold net long declined for both gold and silver over the week leading up to this, so did prices. April gold lost $23.90 to $1,649.60 an ounce over the week to Feb. 12, while March silver fell 85.6 cents to $31.019 an ounce.
In the case of gold, the managed-money accounts in the CFTC’s “disaggregated” report trimmed their net long to 70,250 lots for futures and options combined from 86,926 the previous week. This was the lowest since the CFTC began the “disaggregated” reporting format in September 2009 and was mostly due to fresh selling, as the number of new shorts, or bearish bets, increased by 14,324 lots. There was also some long liquidation, as the number of total longs fell by 2,352...
It's Tuesday February 19th, and the assault continues in bullion markets. It now seems to be increasingly clear that "this is it": the MAJOR campaign against the bullion markets -- which inevitably leads to the biggest/longest/strongest RALLIES.
From late-2008, through the Spring of 2011; gold had its longest/strongest single rally of this entire bull market. In 2 1/2 years it went from just under $700/oz to $1900; in a single, uninterrupted climb -- nearly tripling in price. Silver went from under $10/oz to over $40. A more-than-quadrupling in price. The move from the $41-$42 level to $49/oz was actually caused by the bankers themselves -- so it doesn't count.
What's notable, of course, is that those huge rallies took place immediately after the Crash of '08. So what is different today between the CURRENT scorched-earth campaign against bullion markets and the Crash of '08? Obviously it's the fact there is no "crash"...yet.
And here's the point, the banksters (and Oligarchs) have already seen that (despite their best efforts) bullion markets have gone UP -- not down -- when they have (deliberately) released some "bad news" propaganda. They know that simply manufacturing another (economic) "crisis" is not enough (any longer) to get the Sheep to stampede away from bullion and toward their own worthless paper.
Thus we have what appears to be a preemptive assault on bullion markets. Get sentiment (and the charts) pointing lower BEFORE they manufacture their next crisis. And so (if my reading of "the tea leaves" is correct) we are getting TWO messages from the banking cabal.
1) Bullion prices are being taken to their absolute lowest level -- despite the fact they know this will lead to (another) spectacular rally.
2) We are about to experience a new (made-in-Wall-Street) "crisis" in our economies...or (even worse) the Oligarchs are about to start a new war.
For those bullion-holders who are concerned about the statement "prices are being taken to their lowest absolute lowest level", here are several points to consider before you either postpone bullion-buying, or (worse) actually SELL some bullion -- thinking you will "buy it back cheaper."
a) The bankers make MISTAKES -- lots of them. It may turn out that "the absolute lowest level" to which they are capable of driving bullion prices may happen TOMORROW. Remember that the market is completely controlled by the Big Buyers. They only allow these moves lower in prices to scoop-up cheap (physical) bullion. If no more metal is being made available at lower prices, they will immediately march the price back up again.
b) When prices DID reach their lowest levels in 2008; gold supplies were drying-up, and it was hard to locate ANY silver at all in anything less than 100-oz bars (and today, anecdotal evidence suggests supplies are much tighter). You may WANT to buy a lot of "cheap bullion" -- and find the only thing actually for sale is the bankers' "paper gold" or "paper silver" (they never "run out" of that - lol).
c) The lower prices go, the higher premiums go. This is an unfortunate supply/demand reality -- rather than any sort of "conspiracy". When bullion dealers are running out of stock (and possibly LOSING money on current, low prices); inevitably they will jack-up their premiums DRAMATICALLY.
What this means is that the trading-mythology that people can "anticipate" moves in the market, and then (successfully) "trade the swings" is (in fact) one of the best ways for small investors to DESTROY themselves.
If we have all our money in bullion, and prices "collapse"; what happens? We watch bullion prices go down, and then we watch them go back up again (and then much, much higher).
If we're holding paper, and the paper collapses (while we're "waiting" for better bullion prices), what happens? The value of the paper goes down, but it NEVER comes up again. And instead of your stockpile of BULLION (i.e. real money); you have nothing but a stack of an inferior version of toilet paper.
Which do you think will protect you best from what lies ahead...???
It's Wednesday February 20th; and while readers are undoubtedly annoyed/dismayed to (once again) see more red ink in bullion prices today, at least none of you will be "surprised" -- at least not if you read yesterday's edition of The Grind.
Why did I write yesterday that "this is it" regarding some Final (all-out) Assault before the next, major rally; and even compare what's occurring now to the Crash of '08 (and the infamous take-down of bullion prices which accompanied it)?
Since I didn't explain that yesterday, I'll do so today. It's not just the price-action. We've seen short bursts of sharp, downward movements in bullion prices previously -- and I've never compared it to that preveious, ugly episode of manipulation. I do so now because the propaganda is virtually identical to what the Cabal did when the Crash of '08 take-down took place. Go to Basher Central (if you have strong stomachs) and just take a look at the headlines. The Chicken Littles are running amok.
"Abandon ship!" "The bull-market is over." "Bullion prices are about to crash."
Several points need to be made here other than the obvious one about the Banksters (and their media-friends) trying to create a "panic" in bullion markets. Virtually ALL of the pseudo-analysis which accompanies this discusses nothing but the price-action itself.
Understand that even if these markets were entirely un-manipulated that prices are not a "fundamental" of analysis. In (mythical) "free and open markets" price is a derivative of fundamentals -- an accurate derivative, but still only a derivative.
Thus since it takes much more time/effort/education/intellect to actually understand the fundamentals than to understand their derivative (prices); roughly 95% of all traders/analysts rely totally upon analyzing the derivative than the fundamentals themselves -- and they PRETEND that mere prices are somehow a "fundamental".
Indeed, most market "experts" are so oblivious to the actual theory (economics/statistics) upon which our markets are based that they themselves don't understand that prices are not a "fundamental" of any market.
This is bad enough. But it gets worse. With our markets extremely/obscenely/illegally manipulated; prices are a 100% inaccurate derivative of fundamentals -- absolutely meaningless. This is why I tell people to avoid drinking any of the Kool-aid of the "technical analysts". Garbage in, garbage out.
Thus most of the shrill fear-mongering you will see/read/hear in the days (and weeks?) to come has absolutely no basis in reality, since what these "analysts" pretend to use for data is thoroughly/absolutely flawed. The only quasi "fundamental" you will hear out of the mouths of the Chicken Littles is about a "strengthening U.S. recovery" -- which (as we know) is just as fictitious as the prices in these markets.
Once again (in case the fear-mongering has caused people to "forget"), here are the real "fundamentals":
1) Currency-dilution. We have two forms of money: bullion, and the paper pretend-money. Not only is the paper "backed" by nothing, but the SUPPLY of this paper is increasing at a DOUBLE-DIGIT rate; and because it's increasing at an exponential speed, soon this will be a TRIPLE-DIGIT rate.
The supply of bullion (on the other hand) has only been increasing by approximately a 2% rate (sometimes less). Paper is being diluted rapidly versus bullion. Thus I and other commentators don't say we "think" bullion prices will rise. We say bullion prices MUST rise (denominated in this paper), because the rules of arithmetic (i.e. supply and demand) are just as immutable as the Laws of Physics.
The difference is that when you have "markets" which are nothing but crime-scenes, the rules of arithmetic/supply-and-demand can be temporarily perverted.
2) Relative scarcity. Overall, the rate of global population growth multiplied by the rate of per capita income growth gives us a crude measurement of the increase in "global wealth". By any measurement, this rate is also significantly above the 2% level of the increase in bullion supply.
However with respect to the populations of the world's two biggest bullion-consumers (bullion-lovers) -- China and India -- their incomes are increasing at a double-digit rate. Meaning if you're a citizen of China or India looking at the global supply of bullion; your only thought is "there's not nearly enough to go around."
It gets better, informed readers know that the world's supply of silver is being "consumed" (literally) through industrial usage at a much greater rate than the 2% per year of new mine-supply (and minimal recycling). Thus as incomes rise (and rise rapidly in China/India) the supply of silver is falling. In relative terms, there has not been so little silver in the world in over 500 YEARS.
There are numerous other relevant fundamentals (most concerned with increasing demand), but I can't fit all of them into this column; and two reasons why bullion prices are absolutely, 100% certain to rise in the future should be enough for most people.
Ignore the Chicken Littles (unless you're one of those people who read them for cheap laughs). If the negative price-action still really bothers you, don't even bother to look at the markets.
Bullion HOLDERS have nothing to worry about. It is the PAPER holders who must continue to nervously watch the market day after day, because if they don't swap their paper for metal soon enough; that paper will be nothing but toilet-paper or a fire-starter.
As with the Crash of '08 take-down; as prices fall, supplies will also fall and bullion supplies will dry up. This means the "utility" (i.e. potential gain) of "waiting for better prices" diminishes rapidly each day that prices fall further. It does us no good at all (as buyers) if the "official" (i.e. fantasy) price for gold is $10/oz -- if there's no one in the world selling at that price.
For people simply uncertain about "strategy"; don't allow yourselves to be paralyzed by inaction. Dollar-cost averaging allows you to accumulate steadily, while taking advantage (at least somewhat) of falling prices. It will also help you monitor the supply situation better -- assuming you don't want to be checking with dealers personally on a regular basis.
The "clearance sale" on bullion continues. Get it while you can...
P.S. Anecdotally, I just checked with my local dealer here in Vancouver; and at this point they have seen no drop-off in their silver inventories. However, for those people who do their purchasing through local dealers; supply conditions will vary from market-to-market (and time to time).
If prices keep slipping inventories will decline, and supply bottle-necks will become more and more frequent. One day (as during the Crash of '08) you'll check with your local dealer about when they will be getting some new silver in stock, and their reply will be "I don't know."
For readers/Members who want to take the time to post their own, anecdotal reports about local supply; feel free to do so. However, please do it in our "Physical Bullion" section rather than on this particular thread.
It's Thursday February 21st, and just a quick/late edition of The Grind -- as I've been on-the-go all day.
Bullion prices bounced back modestly today from yesterday's particularly nasty session. However, this in no way indicates the "all clear".
At whatever price-level bullion bottoms at; we will know that we MIGHT have started the next rally when we see a strong/sharp bounce-back -- and likely two or three. Should selling continue for any length of time, such a one or two-day snap-back would not necessarily indicate the end of the selling -- as it could be the proverbial "dead-cat bounce."
It's Friday February 22nd, and I got so wrapped-up replying to stuff elsewhere on the Forum this morning that I almost forgot about the gold market. Thanks to everyone for that!
Meanwhile, back to "the real world" -- i.e. what the propaganda machine assures us is their accurate description of the real world.
Prices are more-or-less steady, so no news there. But good news from Basher Central!! We're told that a "survey" of the "experts" they rounded-up (i.e. the usual collection of slack-jawed shills) are expecting "steady to higher prices" next week. So this means we can look forward to a better week in bullion markets next week...right?
Shame on any who were actually thinking that. The first thing people must do here is to try to think like some evil Cartoon Villain -- who is always looking for ways to "crush his Enemies" (i.e. us). So why do you say something encouraging to the Enemy? So you can then shatter them psychologically with disappointment.
Thus when the good folks at Basher Central assure us we can look for "steady" or "higher" bullion prices next week, where is the smart money going? That's right: even lower prices next week.
I would have been more encouraged by today's dose of propaganda/disinformation if they had unequivocally been looking for "higher" or even "much higher" prices next week. Then they could have still "disappointed us" (and achieved their petty, psychological victory) with merely stable prices next week.
However, having lowered the bar here; only lower prices next week can give the Cartoon Villains the short-term satisfaction of "hurting their Enemies" (to which they are addicted).
Know your Enemy.
-- Sun Tzu
P.S. Look a little deeper into the propaganda below and you see the clear hint that prices could easily go (subtantially) lower. That way they can always be "right" about the market.
Survey Participants Look For Steady To Higher Gold Prices Next Week
Most participants in Kitco News’ weekly gold survey said they look for gold prices to either stabilize or bounce next week after hitting their lowest levels since last summer on Thursday.
In the Kitco News Gold Survey, out of 33 participants, 21 responded this week. Of those, 11 see prices up, seven see prices sideways and three look for the recent slide to resume next week. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
Many cite potential for a short-term technical bounce from “oversold” conditions and as major chart support holds. Some also caution that any soft U.S. economic data next week could revive gold on ideas that quantitative easing might not end as soon as some may fear, plus some see potential for safe-haven buying to re-emerge if it appears automatic U.S. budget cuts will go into effect if Congress remains deadlocked ahead of the March 1 deadline.
“Rally on at least a technical bounce back to $1,623,” said Mark Leibovit, editor of the VR Gold Letter, of his expectation. “We may have hit a bigger bottom, especially with bearish sentiment so great, but I don't as of yet have technical (volume) confirmation of that possibility.”...
It's Monday February 25th, and just like the propaganda machine suggested at the end of last week; bullion prices are higher to start this week.
Unfortunately, I'm still not encouraged. With the banksters hammering the sector to some absolute "bottom"; there will be some unmistakable signs when that bottom arrives -- and no way to predict precisely when that day will arrive until it's here.
We will see one of two things to signify the end of the banksters fun-and-games (for at least an extended period of time):
1) We will see a SPECTACULAR explosion in metals prices; meaning at least a 3% (one-day) gain in the price of gold and at least a 5% rise in the price of silver (likely more) -- and possibly two days in a row like that.
2) We will see several CONSECUTIVE days of moderate-to-strong price increases. The more "moderate" the increases, the more consecutive days we will need to see to signify the (down) trend has been broken.
In other words, for today to signify the beginning of that "bottom" we would have to see at least a half-dozen consecutive days of price increases of this magnitude. Until we see one or the other of those decisive, upward moves in metals markets; nothing changes.
At the moment (lol), gold is up about $9/oz to $1590; and the price of silver is up a little over 1%, once again above $29.
It's Tuesday February 26th, and an especially early edition of The Grind today. It's obviously another "nothing day" price-wise, meanwhile the propaganda continues to plummet to new, idiotic lows.
Only a couple of weeks ago I wrote a (separate) post entitled "The Stupidest Thing" ever written about gold. I now regret such an absolute characterization, as what can I then say today? I have to find a new word. Lol!
And so we come to today's drivel from Basher Central: the silliest thing ever written about gold.
...Comex gold futures have seen moderate price gains slip away in late-morning trading Tuesday, following some stronger-than-expected U.S. economic data and amid remarks from Fed Chairman Ben Bernanke...helping assuage fears the U.S. central bank could end its quantitative easing of monetary policy sooner rather than later. The overall risk appetite in the market place appeared to uptick just a bit Tuesday morning, from that seen late Monday and overnight, which is a mildly bearish development for the gold market...
In fact, for basically two, solid years (from early 2011 to the end of 2012) the propaganda machine told us that gold is a "risk asset" and so it's supposed to rise when "risk appetite" increases.
But that's only the moderately silly part. The really silly part is the implication that "quantitative easing" is (somehow) "bad" for gold -- as no one (not even the Shills at Basher Central) could be that stupid. "Quantitative easing" -- i.e. printing money out of thin air -- is THE most-bullish fundamental for the gold market (for obvious reasons).
Note that the Kitco Shill didn't even try to "explain" how quantitative easing is supposedly bearish for gold -- because there was nothing he could even make-up which would sound plausible. As infuriating as it is to see markets "guided" by such irredeemable bullshit, there is (as is often the case) some small point of analysis which we can derive when we see such crap -- day after day.
Obviously propagandists don't deliberately choose to utter totally ridiculous lies when they attempt to deceive the Sheep -- it undermines their own campaign of deception by causing some of these brainwashed minds to reject their propaganda. Rather, propagandists always use the most-convincing, most-plausible lies they can fabricate as they seek to deceive the Sheep.
So as we see this absolute drivel, day after day, remind yourself (as our intelligence is insulted over and over): this is the best they can do.
I regularly attempt to assuage peoples' fears/uncertainty over these manipulated markets by supplying the endless list of (positive) reasons why gold and silver prices must rise dramatically over the longer term. However, as I frequently remind readers; the other way to reassure yourselves about the validity of this position is by viewing the silly, juvenile, and often totally contradictory "reasons" we're give why bullion prices should supposedly go lower.
When your Enemies have ZERO AMMUNITION, this is a pretty good indication of who will ultimately win "the war"...
P.S. Obviously there was no "stronger U.S. economic data" (lol!), just the usual meaningless trivia -- mixed in with a sprinkling of open lies.
Gold Loses Gains on Stronger U.S. Economic Data, As-Expected Prepared Remarks from Bernanke
Comex gold futures have seen moderate price gains slip away in late-morning trading Tuesday, following some stronger-than-expected U.S. economic data and amid remarks from Fed Chairman Ben Bernanke that were pretty much what the market place expected. There were solid readings on U.S. housing starts, consumer confidence and from a Richmond Fed business survey released Tuesday morning. And in prepared remarks, Bernanke told a U.S. Senate committee that the benefits of a very accommodative monetary policy outweigh the potential risks of such, helping assuage fears the U.S. central bank could end its quantitative easing of monetary policy sooner rather than later. The overall risk appetite in the market place appeared to uptick just a bit Tuesday morning, from that seen late Monday and overnight, which is a mildly bearish development for the gold market.
It's still Tuesday February 26th, and we have a "first" here on The Grind: an intra-day "update". Having previously asserted that "nothing much" was happening in precious metals markets today; I see that I'm guilty of doing what I regularly warn others about -- assuming that mild price-action equates to the market being calm/stable/under control.
In fact, with the very interesting implications (across the West) arising from the election result in Italy; we should have seen metals prices spiking today. Gold's "safe haven" appeal -- implied in Kitco's own reporting today -- should have meant a large rise in price due to the "increased economic uncertainty" flowing from the Italian election.
There is too much to say on that topic to stick it all here inside The Grind. So readers who want to understand that subject more fully need to read the detailed post I just finished writing on the election:
As I always tell readers, on days when bullion prices SHOULD be rising dramatically -- but don't -- this indicates maximum desperation/fear on the part of the Cabal. They never used to be this fearful.
When very bullish developments arose they would LET bullion prices run for a couple of days, and then (attempt to) smack them back down. Why the change in strategy? Obviously the Cabal is afraid that ANY momentum at all in bullion markets at the present time could EASILY lead to a (LONG) runaway rally -- which they couldn't even slow down, let alone reverse.
Remember: when I say that I'm talking about them, not us...
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