Categories
Gold & Silver

Eric Sprott: “Why I got into gold in the first place.” (Podcast)

Eric Sprott: “Why I got into gold in the first place.” Podcast – Sprott Money

It’s Black Friday, the biggest shopping day of the year. But while you’re out picking up great deals, don’t miss Eric Sprott’s breakdown of the latest gold and silver news. What he has to say may convince you to add some gold bullion to your shopping cart…

On this edition of the Wrap-Up, you’ll hear:

• What low oil prices mean for inflation—and, therefore, precious metals

• Why December could mean “fireworks” for gold and silver

• Plus: the “eureka” moment that got Eric Sprott into gold in the first place

“Anecdotally, I’ve heard that there’s been some major institutional accounts asking various gold companies to come and present their case. Because why wouldn’t they be looking around for something that could survive in a crash? … You start bringing in that institutional demand, if nothing’s working and then all of a sudden people see one thing working? That’s way more money than our sector can deal with… It could be very exciting.”

Categories
Crypto Currencies

Bitcoin, One Year After the Historic Bubble

Bitcoin, One Year After the Historic Bubble by Nathan McDonald – Sprott Money

We are rapidly approaching the one year anniversary of Bitcoins all time, mind blowing, historic high of $19,140.70 USD that occurred on December 19th 2017.

Just as predicted, the price of Bitcoin has suffered a staggering, absolute collapse in price since that period of time, falling to a low of $4,246.31, just a few short days ago.

As of today’s writing, Bitcoin has tested its low multiple times, perhaps foreshadowing a move higher as the crypto bulls attempt to rally higher into the close of the year.

Sadly, for many, this is a time period of abysmal reflection, as there were countless examples of perma bulls making irrational calls during this time period last year, some even going as far as to put their money where their mouth was, selling everything they owned and doubling down on the crypto bull market rally.

Unfortunately, the hype has died and so too has many of these people’s dreams of “making it rich quick”, as they learned the harsh lesson that has been repeated time and time again throughout financial history. Nothing goes up forever.

For those who think for a moment that I am a “Bitcoin”, or crypto hater, quite the contrary, I was there early, participating in the Bitcoin economy when it was young, partaking in the movement on Bitcoin Talk, the central hub for the crypto sphere. I was there when it was a true community.

The alarms bells started ringing for me as I noticed the continued deterioration of the Bitcoin community, as it was rapidly and steadily devoured by the “HODLERS”.

These “perma” holders of Bitcoin rapidly destroyed the foundation of Bitcoin, as the economy that surrounded Bitcoin and other crypto currencies was rapidly destroyed, eroding the foundation that led to the historic moves higher.

I watched as long term supporters of Bitcoin, many of whom were staples of the community began to leave in droves, either cashing out, or throwing their hands up in frustration as they watched what once was a thriving alternative currency, devolve into a “get rich quick scheme”.

A madness then erupted, that put the “Tulip Mania” to shame, as the MSM media and a swarm of ill informed “investors” began to draw an ever increasing amount of attention to the crypto marketplace, many of whom claimed “it could never go down”.

People who couldn’t even pronounce Bitcoin began to discuss its daily movements, and it was the hottest “cooler talk” at many workplaces.

To any contrarian based investor, this was like a flashing red light, and blaring siren going off all at once. The writing was on the wall, and this massive bubble was about to explode, wiping out thousands of lemmings in the process.

The rest is history.

Fortunately, Bitcoin has survived and is still here, with many positive indications on the horizon, even as it continues to trend lower in the short term.

Hope remains for those who still wish to see it, and the community that once surrounded it, return to prosperity, hopefully avoiding some of the mistakes of the past.

As the year rapidly approaches a close, take a moment to reflect, think of the current stock market rally and the gyrations that it has been experiencing as of recently, and remember this. Nothing, absolutely nothing goes up forever. Prepare accordingly.

Categories
Banksters Corruption Gold & Silver Manipulation

Risk of lower lows in Gold remains prior to spectacular rally to follow – David Brady

Risk of lower lows in Gold remains prior to spectacular rally to follow – David Brady from Sprott Money

Last week, I provided the fundamental background for why I believe the risk of lower lows in Gold remains based primarily on USD/CNY breaking the critical 7 threshold. I also provided the rationale for the enormous rally to follow driven by a reversal in policy by the Fed following a stock market crash and the subsequent ultimate peak in the dollar, including USD/CNY.

This week, let’s take a look at the technicals, sentiment, and positioning in Gold to see if it counters or complements the fundamental thesis. T

TECHNICALS

Gold is currently heading higher in a bearish flag pattern. It could continue higher to resistance between 1251-1255 before heading lower again. Support is at 1200, also the previous closing low. A break down could open up a move down to 1184, 1160, or even 1124 next.

1251 is the key resistance area on the upside. It is the 38.2% retracement of the closing peak at 1360 in April and the closing low of 1184 in August. It is also the 50% retracement of the decline from the peak at 1377 in July, 2016 and the December 2016 low of 1124. We have to take out 1251 out in order to become anyway bullish.

Then there is the 200 day moving average at 1266 currently. A level watched closely by the Bullion Banks and the Algos. Through there and the path back to new highs since 2016 becomes clearer.

I am already long “physical” Gold (and Silver bullion) since August 2015 and have been adding ever since. I’m waiting to add more on a break of key resistance or at lower lows. However, if you don’t hold any Gold (or Silver), I recommend you buy “some” now because it is only a matter of time before Gold heads multiples higher in my humble opinion. By time I mean within the next 1-3 years but I believe it will start rallying in earnest in 2019, perhaps as early as next month.

SENTIMENT

The spot DSI (Daily Sentiment Index) hit a low of 6 in August, the same day it reached a low of 1167 on an intraday basis. It has since hit a double low of 7 on November 12 and 13 when Gold tested 1200 support and held. It has been rising since and now sits at 25.

The 21 day moving average (“21D MA”) is also trending higher, setting higher highs and higher lows since August. It is currently at 22.5. The low in August was 10.9, its lowest level since December 2016 when the price reached 1124.

In order to feel comfortable that Gold has truly bottomed from a sentiment perspective, I would ideally like to see a positively divergent lower low in price. Put simply, a lower closing low below the 1184 close in August at the same time that the 21D MA is above 10.9, somewhere in the teens. This would be ideal for a truly sustainable bottom in Gold from which we see a significant rally higher.

We saw the same scenario play out between August 2015 (21D MA = 12) and early January 2016 (14), from which it rallied to the July 2016 highs. Should this occur again, I believe we rally to new highs above the 1377 high. This doesn’t have to happen for Gold to rally, but until then, there is still a risk of lower lows in Gold in my opinion.

POSITIONING

Money Managers (“Funds”) are what I call “price chasers”. When the price is falling, they load up short. When it is rising, they race to add long positions. In other words, they are extreme short at the lows and extreme long at the peaks. This is why they are commonly called the “dumb money”, extremely wrong at peaks and troughs.

Funds raced to get short again as Gold fell to 1200 recently only to get taken to the cleaners again by the smart money Commercials, specifically the Bullion Banks, which slashed their shorts prior to the ensuing rally. The data above is dated as of Tuesday, Nov 13. Given the rally since, Funds are likely less short now but still at historical high levels, as can be seen in the chart below going back to 2006 when this data first became available.

Meanwhile the Commercials have likely increased their long position again, but remain at historically low levels.

So the big question is why isn’t Gold rallying to a greater degree already given such extreme positions held by both the Funds and Commercials? The influence of China on Gold since April is the primary reason but considering this solely from a positioning perspective, I still believe we may be seeing a repeat of late 2015.

What I mean by this is that Funds were record short in July that year when the price hit a low of 1072, its lowest price since February 2010. This was followed by a sizeable rally to 1191 in October that year only to fall to a lower and final low in December when the price reached 1045. Funds were holding even greater shorts at this point, a new record low. The dumb money was wrong at the worst time yet again and Gold proceeded to have one of its biggest rallies in history over the next 7 months. What if this is now playing out again?

Funds held a new record net short position on Oct 9 when Gold retested its closing low of 1184 in August. Then Gold rallied to 1246 as that short position was cut by 65% in 2 weeks, similarly to October 2015. We may need to see another record short position this time around before the final low is in place, just as in December 2015. Given the size of the short position on Oct 9, this would have to be a truly gargantuan level of shorts. This scenario also means lower lows for Gold prices, just as December 2015.

This makes sense given that it sets us up for a massive rally to follow. It also marries well with the ideal scenario for a bottom based on sentiment, specifically the 21D MA, and a positively divergent lower low. Taken together with likely oversold yet positively divergent technicals, this also matches the fundamental thesis provided last week and would provide the perfect combination for what I believe will be the most spectacular rally in Gold ever seen, eclipsing that in the first half of 2016.

Source – Sprott Money

Categories
Banksters Economy Manipulation

Planned Demolition

Planned Demolition by Jeff Thomas – Sprott Money

Let’s say that you and several other shareholders owned a large building and you had reason to believe that its structure were faulty. Possibly you’d not maintained the building properly and you now realized that, if it were to fall down, you’d be liable for any damage caused.

If that were the case, once you’d decided that collapse was a near-certainty, your greatest concern, would be that it collapse in such a way that would minimize the economic damage to you and your fellow owners.

This reasoning is the basis for “planned demolition.”

No owner wants to lose his asset, but once collapse is certain to occur, it’s best to call in the engineers and have them dynamite the building. This assures three things:

  • It collapses in as short a period as possible, not piecemeal
  • It collapses in as controlled a manner as possible
  • The owners can plan to have made their exit from the building prior to the collapse, so that they are as minimally affected as possible

So, what, then, might we expect if a given economy had outlived its usefulness? What if its “owners” – the government and large corporations who actually control the economy – had milked the economy to such a degree that it had passed the tipping point of repair and it was now more cost-effective to do away with it?

Well, the same three considerations would apply, wouldn’t they? First, it would be counter-productive (from their point of view) to have it collapse piecemeal. It would be better to engineer a crash and get it over with, then move on.

Second, it would also be important to control the manner of collapse. An uncontrolled collapse might be costly to the owners. Consequently, the major banks and large corporations would arrange for the government to provide them with bail-outs, bail-ins and other gifts that, instead of them losing money from the crash, they’d actually profit from it. Likewise, those key people in the government that would continue to be needed after the crash, could count on the major banks and corporations to kick back a share of the money so that they, too, benefitted more from the crash than from the paltry six-figure salaries that their official jobs provide.

And, finally, if a date for the collapse could be planned in advance, the owners would have the opportunity to sell off those assets that would be casualties in an economic crash.

For example, the owners could encourage the public to invest primarily in stocks, bonds and other investments that they know would not survive a crash. If they did a good job of convincing the public, they might even create a bull market – a feeding frenzy in which investors paid far beyond the worth of these investments, having been made to believe that such investments were “going to the moon.”

Of course, there would be those investors who would choose to put money in traditional forms of wealth storage, such as precious metals. The owners would see this trend as a threat and would need to go out of their way to convince investors that precious metals were a “barbarous relic” of another age and only a fool would put his money in them.

But, of course, the owners would know that, in order to minimize their own losses in a crash, they’d want to dump the very investments that they’d touted so fervently and move their money into the safer investments such as precious metals.

And they’d want to do this just before the collapse, so that other investors didn’t twig onto the fact that the owners had abandoned the very forms of investment that they’d been promoting for years, and switched their money to the investments that they’d derided in the previous years.

In order for all the owners to accomplish this, they’d have to agree on a collapse date, then make the switch in a relatively short period of time. Otherwise, the average investor might figure out that he’d been hoodwinked.

Today, all three of the above considerations have been playing out, in order, and we’re now ready for the main event – the collapse.

What will this look like? How is a “planned demolition” carried out, when the edifice in question is not a mere building, but an entire economy?

Well, we might want to examine historical economic collapses and see what happened back then, and the most obvious choice would be the Crash of 1929.

On 29th October of that year, the stock market crashed and went into freefall, dropping 12% on its first day.

This was a planned demolition. The “owners” had pulled out in the months prior to the crash.

And the detonator that triggered the crash? Well, actually, that was quite simple.

At one time, it was common for investors to invest only that money that they could spare to buy stocks. But, in the 1920’s, stockbrokers had made it possible for investors to buy “on margin,” paying only a small percentage up front and owing the remainder. This made it possible to inflate sales dramatically, creating a boom.

And banks did their part, by loaning money to investors to buy on margin. As a result, a boom of historic proportions was created.

But since it was all based on money that didn’t actually exist, all that was necessary was for the Fed to raise interests rates and the ability of the investor to meet his payments was exceeded. He was already up to his teeth in debt and only a small rise was necessary to put his nose under water. He would now drown if he didn’t sell – and sell quickly.

Of course, his fellow investors did the same and the crash was understandably dramatic.

So… today, we’ve already seen the three considerations above come in to play. We can’t be certain that, this time around, the Fed will do exactly what it did in 1929, but it worked like a charm back then and no one in the present day is old enough to remember what happened in 1929, so it would certainly be a proven method and might well serve as the detonator this time around.

At this point in the narrative, the reader may well be saying to himself, “The Fed has already raised the interest rate several times in the last year and has announced that they intend to do so again, probably every quarter… Uh-oh.”

But, if we were on the verge of a crash, wouldn’t our leaders say something? Well, if history repeats, this time out, no. In late 1929, some economists were warning that a crisis was imminent, but the “owners” stated that this was a ridiculous false claim. The world’s most respected financier, Bernard Baruch, famously cabled Winston Churchill, saying, “There may be a recession in stock prices, but not anything in the nature of a crash.” Even President Herbert Hoover assured Americans that the market was sound.

So, not surprisingly, the average investor remained in the doomed building in 1929, and did so with confidence.

The question only remains as to how many of today’s investors will figure out that the hand is on the detonator and it’s time to exit the system.

Categories
Banksters Corruption Gold & Silver Manipulation

Another Great Oxymoron: “LBMA Transparency”

Another Great Oxymoron: “LBMA Transparency” by Craig Hemke – Sprott Money

On Tuesday, significant gold news was made when the London Bullion Market Association finally began its long-awaited disclosure of gold market size and trading volume. If anything, all their first report revealed was the sheer magnitude of the scam and the fraud that persists in the current system.

A summary of the report, along with a brief interview of LBMA CEO Ruth Crowell, can be found at this link:https://www.bloomberg.com/news/articles/2018-11-20…

Here are the three main takeaways from the LBMA’s “disclosure”:

1. An average of $36.9 billion of gold and $5.2 billion of silver change hands each day in London’s over-the-counter market.

2. The average daily dollar volume of LBMA OTC gold trading exceeds the combined daily dollar volume of the FANG stocks in New York.

3. Total LBMA digital derivative daily trading volume is actually less than the digital trading volume on the COMEX in New York.

Let’s tackle these one-by-one, in an attempt to display once again the sheer magnitude of the fraud and scam being enforced upon the world by this current LBMA/COMEX Fractional Reserve and Digital Derivative Pricing Scheme.

First, how many ounces of digital metal are changing hands over the course of an average day, when $37B worth of “gold” and $5.2B worth of “silver” are traded? At $1200/ounce for gold, that’s about 31,000,000 ounces. At $14, that’s about 372,000,000 ounces of silver.

For gold, those 31,000,000 ounces equate to nearly 1,000 metric tonnes. The entire world mines only about 2,800 metric tonnes of gold per year, so your average day in London sees trading volume of over 1/3 of TOTAL annual mine supply. For silver, the world mines about 880,000,000 ounces annually, so total daily LBMA silver volume is closer to 42% of annual mine supply. Traded. In one day.

Next, the daily dollar volume of this LBMA gold trade is listed at $37B. This exceeds the combined daily dollar volume of the FANG stocks (which some argue drive the entire U.S. stock market) by a whopping 43%! Think about that particular statistic for a moment, and then file it away for the next time some fiat-pusher tries to claim that gold is “antiquated” or a “pet rock”. The dollar-volume of the daily trade clearly suggests something completely different.

Lastly, note that the daily trading volume of digital ounces is actually reported to be greater on the COMEX in New York, where total volume regularly exceeds 50% of total mine supply. As you know by now, the COMEX simply trades digital derivatives of gold, and the bi-monthly physical delivery charade is miniscule. In fact, the entire current COMEX system of 525,000 contracts of open interest (52,500,000 digital ounces) is supported by a foundation of just 8,025,418 ounces, of which only 128,451 ounces are marked as “registered” and immediately deliverable.

What have we learned from all of this “transparency”? Nothing new, of course. But hopefully this helps shed light upon what a scam this all is. This is not gold bullion or silver bullion that’s being traded. The numbers alone make it a physical impossibility.

So think about it. The prices of gold and silver are currently determined by the trading of digital derivatives,which have next-to-zero connection to the physical metal. The price that is discovered is the price of the digital derivative itself and not the physical commodity. And the supply of the digital derivative is nearly endless, as The Banks have a monopolistic ability to create a nearly infinite amount.

Traders of digital gold in London and New York have zero claim to any physical metal. They simply have “exposure to the gold price”. Thus, when this fraudulent system eventually collapses (as all systems built upon a foundation of lies and deceit ultimately do), the rush to claim actual physical metal with clear title will be historic, and the resulting conflagration will be spectacular to behold.

When the London Gold Pool failed in 1968, the Bankers conspired to create a new system, one which relied upon the alchemy of unallocated accounts, promissory notes, counter-party risk and unlimited derivatives. However, just as all previous attempts to manage and manipulate the gold price have failed, this current scheme will fail, too. All that these latest “disclosures” from the LBMA accomplish is to shed some light upon the sheer magnitude and scope of the current, fraudulent system.

Since 2010, we have warned that you must take action to prepare for the time when this current system fails. My hope is that as you learn more about the confidence scheme/game that is the current pricing system, you’ll understand better the need to “prepare accordingly” through the acquisition of your own personal hoard of physical precious metal. You can hold it at a trusted gold bullion storage company or in your personal safe. You can hold it in gold bullion coins or silver bullion bars. Take your pick. Just be sure you own some before the LBMA/COMEX system meets its inevitable demise.

Categories
Banksters Economy Manipulation Stock Market

Jim Rogers: “Watch Out For Washington D.C.” (Video)

Jim Rogers: “Watch Out For Washington D.C.” Video – Sprott Media

Jim Rogers, author of “Street Smarts” joins Sprott Media’s Remy Blaire at the NASDAQ MarketSite to consider risks and opportunities on the horizon. Rogers offers his take on geopolitical and political risk around the globe and discusses the implications of potential scenarios for the retail investor.


Video Source

Categories
Gold & Silver

Metals Moving In Unison For a Massive Price Advance

Metals Moving In Unison For a Massive Price Advance by Chris Vermeulen – Sprott Money

Are the metals markets ending a price correction in unison and preparing for a massive price advance? This is the question we asked our research team to investigate and their findings may help skilled traders identify great opportunities in the future. This multi-part research article will share our most recent opinion about the metals markets as well as share some critical new data that can shed some light into what we believe will become a massive upside price rally in the metals markets. Let’s get into the data.

When one considers the global demand for Gold as a hedge against economic crisis events and the continued advancement in gold reserves for China and Russia, one has to consider the supply side issues that are a result of central banks global demand. Even though global production of Gold is near an all-time high, the demand from foreign nations and central banks are also near all-time highs. This correlation creates a demand-side consumption that offsets supply and, in some ways limits, consumer, retail and technology suppliers.

Our researchers focused on this aspect of the supply/demand equation when trying to analyze recent metals price action in correlation to disruptions that could occur in the markets. For example, increased central bank buying/hoarding of gold could dramatically result in prices spiking. Foreign market disruptions in supply could also send prices spiking. Global conflicts and or continued trade issues could send metals prices skyrocketing. Anything to do with the supply side for Gold could send prices higher. At least this is the conclusion of our research team at this time.

Russia has continued to build its gold reserves throughout the past 10+ years. Should Russia and other nations continue to absorb supply at these levels, one could easily argue that price declines in the metals markets are unusual.

Demand for gold is varied and includes Jewelry, Technology, Investment, and Central Banks. We can see from this data that Jewelry and Investment make up nearly 65~70% of total demand every quarter. Jewelry, in many nations, is a secondary form of investment for many people. Unlike in the US, gold is typically sold at 22K levels in much of Asia and at 24K levels throughout much of the Arab world. Individuals can purchase these high-quality jewelry items not only to wear but also as a capital investment. People in these countries are able to resell this high-quality gold to jewelers and others at near spot price whenever they need extra cash.

We can see from the chart, below, that demand is moderately weaker over the past 2 years, but still near all-time highs. Consider, for a moment, what a moderate supply-side disruption or pricing advance would do to the demand side of these levels?

Take a look at the increase in Investment demand in 2010 through 2012 in relation to today. Also, pay attention to the huge Investment increase in demand in Q1 of 2016 and the correlative price advance that occurred as demand shot higher. One key factor for price advance is that Investment demand increases dramatically as a driving force for price increases. Because of this, we would watch for investment demand to increase dramatically over the next 4~6+ months which would indicate that a continued price advancement is expected.

Our researchers dug further into price history with a dynamic new tool that allows us to measure and gauge price rotation in comparison to a number of key factors. The purpose of this exercise was to identify the price and relationship boundaries of Gold, Silver and the US Dollar as these price variances correlate to the price advance and decline of Gold. Our hope was that we would identify some very important new aspect to the relationships of these markets as related to the future movement of the metals markets. Our researchers focused on these key relationship and found the following.

This first chart highlighting our custom Gold/Silver/US Dollar ratio (the blue area chart) in comparison to the historical price of Gold is actually very interesting. First, we highlighted the general trend direction of the US Dollar – showing Strengthening, Weakening and Rotating trends. Next, we highlighted the Upper and Lower boundaries of our custom price ratio to highlight key areas where the ratio changed direction or where prices initiated new or reversed price trends. It is fairly easy to see the price of Gold either initiated new trends or changed price trend at or near these Upper and Lower boundary levels. It is also fairly easy to see the huge price advancement between 2004 and 2011 occurred within a Weak and Rotating US Dollar environment. Additionally, within this same time span, we were able to witness multiple boundary rotations and different Gold price activity types as the US Dollar shifted from a downward price trend to a very volatile/rotating price trend (2009~2015).

In all reality, the biggest Gold price rally and decline happened between 2009~2015 at a time when the US Dollar was rotating and at a time when the global markets were experiencing a massive credit/market event; including much of the subsequent market recovery event. The massive ratio trough occurred in April 2011; at a time when the US Dollar reached a fresh new low and when the US stock markets were recovering quite well.

Taking a look at the most recent 4~5 years on this chart, two critical items came to our attention; first, the lows reached in 2015 and the recent lows in 2018 both occurred while the custom ratio levels were within the Upper Boundary area. We have not seen the ratio move into the Lower Boundary since 2011. What causes the ratio to move toward this level and what are the correlations that we can ascertain from further research using this new tool? Could this new tool provide any real insight into the future price of Gold, Silver, and other metals?

We’ll continue our research in the second part of this article to show you why we believe the metals markets are set for a massive price rally and why we believe this one will be completely different than anything we’ve seen in the past 20 years.

Categories
Economy Gold & Silver Manipulation

Eric Sprott: What “housing Armageddon” means for gold and silver (Podcast)

Eric Sprott: What “housing Armageddon” means for gold and silver Podcast – Sprott Money

It may be the kickoff of a U.S. holiday week, but there’s no shortage of gold and silver news to sift through. Eric Sprott stops by once again to help us sort the signal from the noise.

On this edition of the Wrap-Up, you’ll hear:

• Is a December rally in gold and silver just around the corner?

• Why lower interest rates would be good news for gold

• Plus: The health crisis that could wreak havoc on the economy

“We’re seeing signs of stress in the bond market. Some of the best commentators are suggesting there are fundamental weaknesses. In fact, one of the best says, ‘You know, we all knew it was phony. Zero interest rates and the printing of money.’ The whole nine-year rally from ’09 to today, we knew it was phony. It was the elephant in the room. But because the markets kept going up, we didn’t worry about it. Well, you know what? Now that we’ve reversed things, we SEE the elephant in the room. Which is: higher interest rates and restricting money growth.”

Categories
Banksters Economy Gold & Silver Manipulation

Have we seen the bottom in Gold? – David Brady

Have we seen the bottom in Gold? – David Brady from Sprott Money

Gold initially began its bounce on Wednesday on the back of news that China hawk Peter Navarro had been muzzled by the White House and there were ongoing trade discussions between China and the U.S. at all levels of government. The same evening, Fed Chair Powell made some statements that were supposedly hawkish, but were dovish, in my opinion. Specifically: his references to global growth concerns and housing market weakness in the U.S.

The bounce continued on Thursday on the back of rumors that U.S. Trade Representative Robert Lighthizer had told industry executives that future tariffs had been put on hold, another sign of softening relations between the U.S. and China on trade. However, yet again, hopes were disappointed by firm denials from Lighthizer himself and U.S. Commerce Secretary Wilbur Ross. Gold did not reverse, though, as the rumors did raise hope that although the G20 meeting would likely not provide a definitive agreement, it could produce at least a delay in the implementation of 25% tariffs. Something which would likely lead to further devaluation of the CNY and lower Gold prices.

Then today two Fed members, Kaplan and Clarida, both cite concerns about slowing global growth and its potential impact on the U.S. economy. The Wall Street Journal also published an article stating that “the Fed should rethink its December rate increase.” The market interpreted this as being dovish for monetary policy, and expectations for a further rate hike in December receded. The dollar fell across the board as a result, and the USD/CNH (offshore USD/CNY) dumped to 6.91, its lowest level since November 7. Gold continued higher.

Over the course of those three days, Gold has risen from a key Fibonacci support level at 1197 and is now approaching another one at 1224 on a closing basis, its 61.8% retrace of the decline from 1239.

As usual, everyone desperate for Gold to rally is jumping on the bullish bandwagon. They may be right this time, but there are several caveats.

First, let’s review my scenario for “the” bottom in Gold from which we will see a historic rally, in my opinion.

Developments in the U.S.-China trade dispute have been the sole driver of Gold since April 11, via their effect on the Chinese yuan and its direct impact on Gold priced in dollar terms. Put simply, the risk of higher tariffs has meant a weaker yuan and therefore lower gold prices.

For this reason, I have repeatedly stated that Gold cannot rally sustainably until the USD/CNY has finally peaked and falls. This is unlikely to occur until the trade war between the U.S. and China ends and/or the dollar peaks and drops, particular against the yuan.

Given that I strongly believe there can be no voluntary agreement between the U.S. and China on trade—China cannot accept U.S. demands, and the U.S. is not willing to back down—then one side or the other will have to be forced to agree, or the issue of the U.S.-China trade deficit is resolved by a far weaker dollar and tariffs are no longer required. In my opinion, a U.S. stock market crash followed by a Fed reversal in policy would do just that. This would cause the dollar to slide in general, including against the CNY. A peak in USD/CNY equates to a bottom in Gold. This is my primary scenario for a sustainable low in Gold and the massive rally to follow.

There are numerous potential triggers for the coming crash in the U.S. stock market. A complete breakdown in relations between both sides at the G20 summit and the imposition of 25% tariffs on all Chinese exports to the U.S. would likely lead to USD/CNY breaking the critical 7 level and the yuan undergoing another 10% devaluation. This would undoubtedly cause global turmoil, including a U.S. stock market crash, and force the Fed to reverse policy.

However, should the Fed decide to signal a reversal in policy ahead of a crash by pausing its program of rate hikes or balance sheet reduction, this could have the same effect on USD/CNY and Gold. We’re getting a glimpse of that today. Everyone is excited by this possibility, but let’s consider it objectively.

First, will the Fed pause raising rates in December? I don’t think so. The Fed has done the following time and again: The Fed Chair pays a dovish nod to global and domestic concerns, but says that the economy remains strong and that gradual rate hikes will continue. Then soon afterwards, several members of the Fed come out and focus solely on those concerns. The Wall Street Journal too. Markets get excited that the Fed may pause its monetary tightening, the dollar falls, liquidity returns to the markets, and one market in particular gets a reprieve from a potential crash scenario: the stock market. If the stock market rallies back up to near its highs, will the Fed raise rates again? Of course they will.

The S&P has been extremely weak recently with the risk of further lows to come. There are few, if any, catalysts left to drive stocks higher from a narrative perspective other than a deal with China on trade or pause in the Fed’s quantitative tightening or “QT”. So what happens next? We get tentatively positive news on the trade front, and Fed members suddenly become dovish. Hey, presto, stocks rise.

But will we get anything of substance from the G20 on November 30? Highly unlikely, in my opinion. Will the Fed pause in December? Even more unlikely, if stocks rally from here.

The Fed will continue to raise rates until something breaks, and that something is the stock market. There will be no voluntary agreement between the U.S. and China. The trade war will only be resolved by one side or the other being forced to back down by an event such as a global market crash, including the U.S. stock market in particular. This is just my opinion, but please keep this in mind to avoid the risk of euphoria on the back of headlines designed to boost stocks, not Gold.

Gold will soar soon. I am not convinced we have seen the bottom just yet, but I could be wrong. I hope so.

Source – Sprott Money

Categories
Banksters Economy Manipulation

Years of Recklessly Low Interest Rates Causes Inflation to Soar

Years of Recklessly Low Interest Rates Causes Inflation to Soar by Nathan McDonald – Sprott Money

The stock market has been rising, GDP has been rising, and the rate of unemployment has been steadily dropping since the Republicans took office, however, as good as news as this is, something sinister has been continuing to unfold behind the scenes.

In all likelihood, you are intensely aware of what I am referring to, especially if you are the one who does, or participates in the majority of the shopping for your household.

Inflation continues to soar higher and in a meaningful way.

The increased cost of many commodities has caused a rippling effect across the broad general market, as both staple goods such as food and luxury goods such as computes, cars, etc, have risen significantly.

Two commodities that have been hit especially hard are aluminium and steel, the former of which has risen by 8%, and the latter of which has drastically increased by 38% year over year.

Household staples, such as soap, shampoo, toothpaste, you name it, have increased year over year as well, with most companies disclosing in their recent quarterly earnings, that they have had to pass their increase in production cost, directly onto the consumer.

Luxury goods, such as those produced by Apple, have increased by 20-25%, while autos, such as those produced by GM, have had to raise their sticker prices by $800.

Years of recklessly low interest rates have caused this situation in large part, and we are just witnessing the beginning trickling out of “easy money”, reentering the system for the first time in a meaningful way since the 2008 crisis began.

Before this point, money has been flowing endlessly back into the stock market, causing historic runs higher, as fast money chased new monthly highs, however, as we have seen recently, investors are becoming increasingly skittish of this artificially high stock market.

In addition to this, the actions of the recent trade wars between both the United States and China are having a rippling effect across the markets, with many companies having an increasingly harder time sourcing the items they need.

This powder keg is set to blow, and now the FED is stuck between a rock and a hard place.

They know that interest rates have remained too low, for too long, but they also know that if they raise rates in the continued progression that they have been, that the market will undoubtedly nose dive. Some have speculated, myself included, that this may be their plan.

Fortunately, the one saving grace in this whole scenario, is that consumer confidence remains high, which is translating into slightly higher wages, something we have not seen for decades within the United States.

Will President Trumps America first policy pay off as many market experts are hoping, or will the FED steal the GOP’s thunder by administering the medicine that these markets have desperately needed for years, crashing the markets in the process?

Regardless of what actions are done in the short term, I see no way out of this situation without some pain and suffering. Markets never go up forever, and a correction is always looming just around the corner.

The setbacks we have seen of recently are nothing and are just a small sample of what is to come. Get ready and prepare accordingly. Whether you like it or not, the free market cares little.

Categories
Gold & Silver

Another Gold Spec Short Squeeze Pending

Another Gold Spec Short Squeeze Pending by Craig Hemke – Sprott Money

It may not be enough to reverse the momentum or flip the downtrend, but another Spec short squeeze is coming. Of that, you can be certain.

And how do we know this? Because the COMEX is a rigged casino! The market-making Banks have monopolistic control of the proceedings, and this grants them almost unlimited power to rig results in their favor. To the point, Speculators (primarily managed money, hedge funds and trading funds) are often led into extreme positions only to be routinely wrong-footed and fleeced by The Banks.

In the past, the ruling paradigm was that The Specs were NET LONG and The Banks were NET SHORT. From time to time, these positions would reach extremes, and the resulting price flush would lead to Spec liquidation and Bank short-covering… resulting in massive losses for The Specs and huge profits for The Banks.

One most recent example occurred back in March of this year. At the time, sentiment was extremely positive for COMEX gold. Price had rallied in Q1 and was sitting near $1370 when a Commitment of Traders survey was taken on March 27. What did that report reveal?

The Large Speculators were NET LONG 203,354 contracts

The Commercials were NET SHORT 226,360 contracts

Specifically, the “Managed Money” category of the Large Speculators were NET LONG 162,163 contracts. See below:

By now, you know what happened next. COMEX gold began to fall in April, breaking below its 50-day moving average on April 26. The Large Speculators gradually liquidated their longs and added shorts, with their position peaking on October 9, when they reached a whopping 109,454 contracts NET SHORT, as you can see below.

What happened next was utterly predictable. Price blasted higher on Thursday, October 11. It surged back up through the 50-day and posted the largest one-day move since Brexit in June of 2016. Why did this occur? When price moved up through 50-day, the pre-programmed computers of the “Managed Money” category began to buy back and cover their accumulated short positions. They did this en masse, and the result was a classic short-squeeze price spike. The next week’s CoT survey proved this to be the case by revealing that the Managed Money NET short position had been more than cut in half.

On October 31, we wrote about what we should expect to happen next. You can read it here:https://www.sprottmoney.com/Blog/the-same-old-come… Below is the important point of the article.

And now you are seeing this all play out in real time. Last Friday, price was indeed rigged lower, down and through the 50-day moving average again. Beginning that day and including the two days that followed, price fell $24. Over those same three days, total COMEX gold open interest rose by 39,615 contracts, or nearly 8%, to 539,520. This is the highest total COMEX gold open interest since March 27. (Be sure to scroll back up and check the date of the first CoT report reference in this post.)

So, what is happening? The very same hedge funds that created the record Managed Money NET short position on October 9–and were subsequently squeezed to the tune of $40–are now flooding right back into the short side of COMEX gold due to its position below the 50-day moving average again. And so what do you think is going to happen next?

This isn’t freaking complicated! Though price may not immediately zoom back up and through the 50-day (note below how it took a while back in late September and early October), you can be almost certain that another Spec-squeezing move is coming. Perhaps this next squeeze will be timed around the December 18 contract rolls, as this current front month moves into its “delivery” phase in two weeks? That would seem to be the most logical assumption.

As with each of the past four years, we expect a year-end rally in COMEX gold that extends into January. Whether or not this next Spec short squeeze sets off that rally will be a function of timing. We’ll wait to see how it plays out. In the meantime, what’s important is that you know it’s coming and can take action to plan and prepare before it occurs.

Categories
Economy Gold & Silver

Ask the Expert – David Morgan 111418 (Video)

Ask the Expert – David Morgan 111418 Video – Sprott Money

Precious metals expert David Morgan fields multiple questions pertaining to silver, gold and the global markets.


Video Source

Categories
Banksters Gold & Silver Manipulation

Bill Murphy: Don’t Give Up – Gold Is Headed For A BIG MOVE HIGHER

Bill Murphy: Don’t Give Up – Gold Is Headed For A BIG MOVE HIGHER

Bill Murphy of the Gold Anti-Trust Action Committee (GATA) interviewed by Investing News

Bill Murphy, chairman of the Gold Anti-trust Action Committee (GATA), believes an explosive move in gold and silver prices is in the cards — but not before manipulation comes to an end.

“This past year and years have been so frustrating because other assets have soared … the stock market, the cryptocurrencies, art, real estate. And gold and silver have just been in the weeds,” he said on the sidelines of the recent New Orleans Investment Conference.

“From our standpoint … it’s all because of the gold cartel,” Murphy continued. “The government’s going to use all this quantitative easing, they’re going to budget deficits, debt’s going to go like crazy, interest rates are going to go to zero — and gold and silver will go back to where they are now?”

When asked what investors should do in the face of these circumstances, Murphy encouraged them not to give up. “I write a commentary every day, and go out and try to keep people in the game,” he said. “It’s no fun writing about what the gold cartel is doing to keep the prices in the dumpster. A lot of people have left and they’ve given up, it’s just human nature.”

However, he emphasized, “this has created a big-picture sentiment that’s going to lead to one of the big moves of all time.” And, Murphy added, “when it goes this time I don’t think we’re going to have the gradual moves like we saw at the early part of the decade — it’s going to be explosive.”

Listen to the interview above for insight from Murphy on gold market manipulation. You can also click hereto see the full New Orleans Investment Conference playlist on YouTube.

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Categories
Economy Gold & Silver Manipulation

Eric Sprott: Sprott Weekly Update 110918 (Podcast)

Eric Sprott: Sprott Weekly Update 110918 Podcast – Sprott Money

The market rallied this week on… gridlock? As the United States welcomes divided government, Eric Sprott joins us again for another wide-ranging discussion about the week in precious metals.

Tune in to this edition of the Wrap-Up to find out:

• The real meaning of the U.S. midterms

• Which bank’s ex-VP is charged with precious metals “spoofing”

• Plus: Drama in Venezuela

“You don’t want anyone to think anything’s bad, you know? You don’t want them to think gridlock’s bad. So you run the market up. And we all forget about it, and we move on to the next issue. Whatever that’s going to be. And there’s a lot of issues out there. The trade issue hasn’t gone away… There should be lots in the news to have people concerned about things.”