The Cartel’s Upcoming Silver Waterloo? – Updated (in a Big Way)!

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Published : April 09th, 2017
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Category : Gold and Silver

The reason I know Bitcoin is so early in its bull market is that there is literally no one employed to write about it on a full-time basis.  Thus, to get information on the topic, I largely have to seek out the tiny handful of “good, smart” Bitcoin people on Twitter and You-Tube.  For Precious Metals, you’d think that after a 17-year bull market – in varying degrees, depending on which currency you price them in – there’s be dozens, if not hundreds of commentators to follow; like, in say, the stock market, where thousands of commentators discuss it, in real-time, on a daily basis.

Yet, I’d count the amount of established PM commentators as no more than 20 – of which, roughly 15 discuss only the meaningless “technicals” that mean NOTHING in the unprecedentedly rigged PM markets.  Of the five or so others, NONE write regularly – as in, more than once or twice a week; let alone, of the myriad political, economic, and market-based topics the Miles Franklin Blog discusses.  Proof positive, that the Precious Metal bull market that started at the turn of the century; and “paused” when terrified “powers that be” passed their “point of no return” in 2011 – and thus, started manipulating on a 24/7 basis; is still in its formative stages.  We couldn’t be more pleased to serve you in this critical role, at such a critical time in global monetary history; and in turn, simply ask you to consider us for your future Precious Metal buying, selling, or storage demands – as all we seek is a chance to earn your business.

I wasn’t planning on writing this weekend, but after yesterday’s “trading” – which in my view, represented on the most blatant, egregious market manipulation days ever, I deemed it necessary; particularly in light of the vital information I intend to share.  I mean, yesterday alone, we experienced two of the most “PiMBEEB” – i.e, Precious Metal bullish, everything-else-bearish” events imaginable.  This, aside from the following “second tier” PiMBEEB headlines; which, in freely-traded markets, would themselves have caused gold and silver prices to surge.

  • Americans are taking out the largest mortgages on record
  • IMF warns low interest rates put global financials at risk
  • Iron Ore prices plunge, amid record China glut
  • S. credit card debt rises above $1 trillion for first time in a decade
  • Stores closing at a record pace, as Amazon chews up retailers
  • Susan Rice’s White House unmasking – a Watergate-style scandal
  • Oil rigs rise 12 straight weeks, crude inventories hit new record high
  • Atlanta Fed slashes Q1 GDP growth estimate to just 0.6%, lowest in three years
  • Italy’s Target 2 deficit hits fresh all-time high, above 25% of Italian GDP
  • Half of U.S. working families are living paycheck to paycheck

Of course, these headlines were dwarfed in importance by the two “Super PiMBEEB” stories of the day; starting with Thursday night’s U.S. attack on Syria – which, given the circumstances, and Russia’s stark opposition, may well catalyze a major Middle Eastern war.  In my view, Trump’s 180-degree turnaround about Assad and Syria, in mere days, is barely different than what it took months for George Bush to perpetrate in Iraq 15 years ago; i.e, starting a war based on flimsy “evidence” of Iraq’s possession of weapons of mass destruction – which in hindsight turned out to be at best a red herring, and at worst a flat-out lie.  Choose your own reason for why Trump decided to do this; but whatever the reason, this was the markets’ initial reaction; until of course, the Cartel stopped it with a patented “Cartel Herald” algo when the gold price rose just above its “daily limit up” level of roughly 1.0%.

The ramifications of invading Syria are potentially horrifying – and the fact that a Congress that despises its leader universally supported it tells you all you should know about how dysfunctional America has become; to the point that even CNN – which literally, will not cover the Susan Rice story – claimed Trump “became the President last night.”  Heck, top MSM lackey Yahoo Finance actually had the temerity to publish an article claiming that Trump gained “valuable political capital” by bombing Syria; and thus, could “leverage” it into getting his domestic economic agenda pushed through Congress.  I mean, has the world truly gone mad?

Of course, that was just “Act I” of the day’s “PiMBEEB-a-looza”; as if there’s one thing we’ve learned after 15 years of price suppression, the only event guaranteed to inspire a strong Precious Metals rally is a horrifyingly weaker-then-expected NFP employment report.  Which, given the dramatically “better than expected” ADP employment report just two days earlier – which I eviscerated at the end of yesterday’s Audioblog – couldn’t have been more “unexpected” if it tried.  And as for its degree of “PM bullishness,” said NFP report came after the Atlanta Fed had lowered its 1Q GDP growth estimate to just 0.6%, on the heels of Thursday’s plunging ISM and PMI non-manufacturing indices.

To wit, just 98,000 “jobs” were created in March – including 32,000 from the BLS’ fraudulent “birth/death model,” barely half the consensus estimate of 180,000.  Worse yet, just like Wednesday’s sham ADP employment report, both January and February’s “better than expected” jobs numbers were revised significantly lower – cumulatively, by 38,000 jobs.  Incredibly, the “unemployment rate” plunged from 4.7% to 4.5%, despite the Labor Participation rate remaining unchanged, barely above its four-decade low.  I mean, if it was estimated that 180,000 jobs would be produced with an unchanged Labor Participation Rate, yielding an unchanged unemployment rate of 4.7%; how can just 98,000 jobs, with an unchanged Labor Participation Rate, cause the unemployment rate to plunge to 4.5%?

Topping off one of the worst jobs reports in years – particularly, when considering the relentless propaganda about how employers are so excited about Trump, they are hiring workers hand over fist – average hourly earnings rose less than expected, and average workweek hours declined.  Following which, Precious Metal prices again surged – until again, the Cartel stopped the rally cold with a prototypical “Cartel Herald” algorithm; this time, when gold rose by exactly 1.5% for the day, as silver came within a few cents of $18.50/oz.

Incredibly, the PPT-supported stock market wasn’t allowed to materially decline, even as the benchmark 10-year Treasury yield briefly fell below major support at 2.31%; whilst Eurodollar spreads plunged, in yet another signal that actual market participants don’t believe interest rates have anywhere to go but down.  Heck, Wall Street’s proprietary trading desks’ cumulative holdings of long-duration Treasury bonds hit an all-time high yesterday, of more than $25 billion, despite the Fed’s comical insistence it will be “raising rates.”

Following the post-NFP “Cartel Herald,” gold and silver’s gains consolidated for nearly four hours at roughly +$12.50/oz (yep, exactly 1.0%) and $0.12/oz, respectively.  Thus, at roughly $1,266/oz and $18.30/oz, respectively, both metals were on a course to close the week well above their 200 week moving averages – of $1,246/oz and $18.13/oz, respectively – for perhaps the first time in four years.  Which is exactly why, barely a half-hour before the 1:30 PM EST COMEX close, a Cartel blitzkrieg paper raid was launched, taking silver down nearly $0.30/oz. in minutes; and gold $15/oz, despite no other market materially budging.

Sure, interest rates had bled off their early losses throughout the morning; whilst the dollar index had steadily gained (clearly, NOT due to U.S. economic strength, but safe haven buying in light of the potential for a major military conflict) – not that either of these markets have any real correlation with Precious Metal prices, of course.  However, to emphasize just how egregious this obviously orchestrated raid was, the 10-year Treasury-yield had already risen to 2.33% when it occurred, whilst the dollar had already risen above 100.9.  Zero Hedge published some frivolous commentary suggesting some meaningless, ambiguous comments from Bill Dudley about potential policy tightening actions had something to do with the sudden PM plunge.  However, said comments occurred nearly an hour before the Cartel’s raid.  Let alone, as we are just two days past the release of the March FOMC “minutes,” which exposed Fed governors like “unlimited punch bowl” Dudley as the “naked emperors” they are.  Let alone, two hours after the worst NFP job report in years; and 12 hours after a major Middle Eastern military initiative.

And by the way, if there’s anyone that still doesn’t believe PM prices are suppressed, please compare yesterday’s gold “trading” with that of Tuesday’s and Thursday’s.  I mean, talk about “dead ringers” – Cartel Heralds and all.

No, my friends, yesterday attack had nothing to do with Bill Dudley’s comments, and everything to do with the following…1) attempting, as always following major geo-political events, including 9/11, to prevent Precious Metals as being viewed as the safe haven assets they have always been; and 2) preventing them, on a day featuring two of the most PiMBEEB events imaginable – let alone, heading into the weekend – from closing above the 200 week moving averages they have been so violently defending, via “nuclear” manipulation tactics.

Yes, they succeeded in closing silver marginally below that level, whilst (equally temporarily) “defending” support for the benchmark 10-year Treasury yield at 2.31%.  However, silver is barely a stone’s throw from re-capturing its 200 WMA; whilst gold, in closing at $1,254/oz, bounced strongly before it even touched its 200 WMA.  And I assure you, the violently PiMBEEB trends revealed yesterday won’t suddenly disappear next week; or, for that matter, any time in the foreseeable future.

Of course, it wasn’t until I saw the COMEX’s weekly COT, or “Commitment of Traders” report – released each Friday at 3:30 PM EST, that I truly understand why the day’s massive Cartel raid occurred.  Following up last weekend’s must read “the Cartel’s looming Silver Waterloo?” article, the COMEX “commercials” (i.e., government-partnered “bullion banks” like JP Morgan) took last week’s maniacal silver naked shorting to a whole new level.

Last Friday, said “commercials” were reported to have shorted 8,033 paper silver contracts in the week ending Tuesday, March 28th, taking the total to 101,767 contracts, representing more than half a year of total global production.  This week, however, they went even more berserk; shorting an additional 10,579 contracts – and thus, taking their total short position, as of Tuesday, April 4th, to an all-time high of 112,346 contracts.  Yes, they significantly increased their gold shorts, too.  However, it couldn’t be more obvious that it’s the tiny, significantly tighter silver market they are more worried about.

Putting such Cartel fear into perspective, the commercials’ previous record-high silver short position was in early August 2016.  When, at the height of a post-BrExit, pre-Trump environment that saw gold surge to $1,375/oz, silver had risen to more than $20.50/oz; in both cases, above their respective 200 week moving averages.  It took a gargantuan amount of manipulation to push prices back down in the ensuing four months – only to see them surge back above their 200 week moving averages this week, despite a so-called “hawkish” Fed having just raised interest rates not once, but twice.   In other words, with prices much lower than in August 2016; at a time, unlike August 2016, when no material crisis is present; the Cartel felt it necessary to not only take their paper silver short position to a record high level, but engage in such a blatantly obvious blitzkrieg attack on a day when not one, but two major PiMBEEB events occurred.  This, as COMEX physical silver inventories hover near their all-time lows, of barely $500 million worth of metal; not billon, but million.

Obviously, no one has a crystal ball – but clearly, the Cartel has never been so fearful of the Precious Metal “re-birth” that must mathematically arrive, particularly in light of the relentless PiMBEEB headlines that promise to swamp it, and the dollar’s waning “reserve currency” status, in favor of real money.  Quantitatively, gold and silver have never been more undervalued; nor qualitatively, more “needed” to insure against the monetary hyperinflation guaranteed to be perpetrated by the world’s dying Central banks, as history’s largest, most destructive fiat Ponzi scheme implodes.  As I wrote earlier this week, China and Russia’s soon-to-be-finalized gold trade agreement literally screams of gold’s imminent return to the global monetary scene – producing “writing on the wall” as visible, and legible, as any communications imaginable.

Data and Statistics for these countries : China | Georgia | Iraq | Italy | Russia | Syria | All
Gold and Silver Prices for these countries : China | Georgia | Iraq | Italy | Russia | Syria | 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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