Is The Cartel’s “Silver Waterloo” Looming?

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Published : April 03rd, 2017
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IS THE CARTEL’S “SILVER WATERLOO” LOOMING?

It’s very early Saturday morning – as I write this, the last of my abbreviated vacation week articles.  Perhaps I have a crazy inner goal of becoming the Cal Ripken of blogging; and perhaps, I publish so often simply because I enjoy it.  Irrespective, I am driven to help you do your due diligence, to make the correct investment decisions as history’s largest, most destructive fiat Ponzi scheme moves through its final, catastrophic phase.  Either way, do not for a second mistake abbreviated for relevant; as given the topics discussed, this is as far from irrelevant as one can get!

To that end, consider that mere minutes after I submitted yesterday’s article, Donald Trump prepared the world for what could be an historically inflectionary, and dramatically Precious Metal bullish, meeting with Chinese Premiere Xi Jinping this Thursday at Trump’s Mar-A-Largo resort in Florida; which I assure you, will not be mistaken for Camp David.  First, by ominously tweeting “the meeting with China will be a very difficult one, in that we can no longer have massive trade deficits

and job losses.  American companies must be prepared to look at other alternatives.”  And second, signing a pair of contentious “executive orders”; the first, directing the Commerce Department to conduct a major review of the causes of U.S. trade deficits; and the second, to halt the non-payment and under collection of anti-dumping and anti-subsidy duties on a broad array of foreign goods.

Unfortunately, the uncollected duties in question – a laughably immaterial $2.8 billion over the past 15 years; from not one, but 40 countries; won’t have any impact on America’s horrific finances or trade policies.  And as for said “major review” of the causes of U.S. deficits, the Commerce Department, led by billionaire crony capitalist Wilbur Ross, is going to be forced to report what he knows too well; i.e., U.S. trade deficits are principally caused by America’s massive labor cost disadvantage; and a globally destructive, soon-to-die fiat monetary system, in which the Federal Reserve exports massively overvalued “reserve currency” units to dozens of nations happy to take such “IOUs” in return for the ability to increase manufacturing market share.  Which in the big picture, only impoverishes their nations via inflation; whilst simultaneously, “stealing” U.S. jobs.

To that end, how sad pathetic amusing is it, that since the “make America great again” corporate propaganda blitz surrounding the Trump Administration’s opening weeks – epitomized by Jack Ma, CEO of the “Amazon.com of China,” Alibaba – lying through his teeth about his intention to create one million American jobs – not a single such announcement has been made, or action undertaken.  In fact, per this article published yesterday, the inexorable trend of Mexican outsourcing by U.S. manufacturing companies, following a brief (propagandistic) pause at the commencement of the Trump Administration, has returned with a vengeance.  Heck, if its cars Trump wants built in America so badly, perhaps he should read this horrifying article from Morgan Stanley – describing the potential for the ongoing collapse in used car prices, caused by years of overproducing and subprime lending into an inexorably weakening market, to morph into an all-out economic cataclysm.

And speaking of “unfortunately” for the powers that be, barely 12 hours after I published “the never-ending punch bowl” – about New York Fed President Bill Dudley’s comment, in response to investor “fears,” that “I don’t think we are removing the punch bowl yet… but instead, just adding a bit more fruit juice”; Dudley was at it again, claiming “the Fed is in no rush to hike,” as the “economy is clearly not overheating,” given that “sentiment (improvements) are not showing up in the hard data yet.”  This, on a day that the hard data U.S. savings rate plunged due to “unexpectedly” weak consumer spending, resulting in the Fed’s own estimate of 1Q GDP growth being trimmed to just 0.9%.  But don’t worry, the “soft data” Chicago PMI surged to a fresh two-year high; this, despite the hard data employment component crashing from 57.7 to a recessionary 49.9.

Anyhow, in a week that will feature countless potential “PiMBEEB” events – like FOMC and ECB “minutes” publications; March NFP payrolls; and the Trump/Jinping summit – the possibility of a major Cartel setback looms larger than ever.  And I haven’t even discussed the fact that the first round of the potentially “BrExit times 100” French election is just three weeks away; or that the Trump Administration appears to be shifting to a more Hillary Clinton-like anti-Russian stance – this, as new WikiLeaks disclosures show that the CIA regularly “disguises” its hacking activities as Russian; or that nations from Brazil to Italy are on the brink of financial collapse; whilst historic gluts in everything from crude oil to iron ore threaten to destroy countless thousands of commodity-producing nations and corporations.

The reason I say this, is that clearly the Cartel is “on the ropes” – amidst what appears to be the nuclear phase of their “200 day moving average war” with the physical gold and silver markets.  To start, Thursday’s heinous, blatantly obvious Cartel raids were swiftly reversed Friday – albeit, in prototypically capped fashion – with gold and silver closing the week at $1,249/oz and $18.23/oz, respectively; just below the 200 week moving averages the Cartel is so desperately defending, after having held prices below them for the past four years – at $1,252/oz and $18.34/oz, respectively.

Next, we have what may well be an unfolding physical run on the COMEX; where, following Tuesday’s withdrawal of 25% of the entire COMEX inventory of registered (i.e. available-for-delivery) gold, another 8% was withdrawn Friday.  In fact, as you can see below, more than half of the COMEX’s registered gold inventory has been withdrawn since Election Day, pushing the total down to a mere $1.1 billion worth.  Meanwhile, a whopping 4.6 million ounces was withdrawn yesterday from the COMEX’s silver registered inventory – representing 13% of the total, taking it perilously close to the all-time low levels of last summer, at just a measly $540 million worth.

However, the most damning evidence of all was in the COMEX “COT” report published late Friday afternoon – disclosing that, for the week ended Tuesday March 28th, COMEX “commercials (i.e. the government-run Cartel) shorted a massive 8,033 additional contracts; taking their net short position to nearly the all-time low from mid-July of last year, at the heart of the post-BrExit crisis.  Only this time, there’s no visible crisis to speak of – despite the fact that a Perfect Storm of global “PiMBEEB” events is heading our way!  Gold, too, has been massively shorted in recent weeks; however, clearly the Cartel is far more worried about silver, given how obviously tighter its physical market is, and always has been.

Is the Cartel’s “silver (and gold) Waterloo” as imminent as it is inevitable?  Perhaps, but either way, it mathematically must occur – likely, far sooner than most can imagine.  And when it does, if you haven’t already protected yourself from the ensuing political, economic, and monetary chaos, it will already be too late.

Data and Statistics for these countries : Brazil | China | Georgia | Italy | All
Gold and Silver Prices for these countries : Brazil | China | Georgia | Italy | All
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Andrew Hoffman was a buy-side and sell-side analyst in the United States (including six years as an II-ranked oilfield service analyst at Salomon Smith Barney), but since 2002 his focus has been entirely in the metals markets, principally gold and silver. He recently worked as a consultant to junior mining companies, head of Corporate Development, and VP of Investor Relations for different mining ventures, and is now the Director of Marketing for Miles Franklin, a U.S.-based bullion dealer.
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Fortuna - 4/3/2017 at 3:51 PM GMT
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