It’s 3:30 AM MST on Thursday morning (“Twas’ the night before Janet”), and
I wasn’t planning to write until her Royal Printing Press-ness delivered her
latest “most important announcement ever.” However, given how the
Precious Metal community has been besieged this week with the same
misdirection, cluelessness, and borderline Cartel-produced propaganda that
has characterized newsletter writer “analysis” for the past 15 years, I
thought it would be a good time to throw my ring into the hat – in light of
the, yet again, paralyzing fear today’s FOMC statement has engendered,
amidst one of the most vicious Cartel raids to date. Particularly
appropriate, I might add, on a day when we learned JP Morgan has been
serially manipulating the aluminum market for years. But no, the far
tinier, far more “systemically important” Precious Metal markets couldn’t
possibly be manipulated, too. Right?
Before I “update” what I first wrote of the COMEX “COTs” four years ago,
let’s just put the past 24 hours’ news flow into perspective, heading into
yet another sure to be another pathetic – but likely, market moving – FOMC
word cloud; so you’ll understand, recent equity and commodity “short squeeze”
notwithstanding, how wildly bearish global economic trends continue to be for
financial assets, and bullish for real money.
1 In yesterday’s
Audioblog, I spoke at length at my incredulity at the Bank of Japan, just
six weeks after “unexpectedly” commencing a NIRP policy (after having, just
ten day prior, saying it would not do so), in removing the language that it
would “take rates further into negative territory if necessary” from its latest
policy statement. Well, just one day, and one Nikkei decline
later, have a gander at what the BOJ’s clueless Chief, Haruhiko Kuroda, had
to say. Seriously, you can’t make this stuff up…
*KURODA: THEORETICALLY QUITE SOME ROOM TO CUT NEG. RATE FURTHER
*KURODA: THEORETICALLY, IS ROOM TO CUT RATE TO MINUS 0.5%
*KURODA: EFFECT OF NEG. RATE TO TAKE QUITE SOME TIME TO APPEAR
2. The Chinese Containerized Freight Index hit a new all-time low
yesterday; and as the PBOC commenced yet another Yuan devaluation cycle, the
Chinese government initiated yet another capital control on the currency
market, instituting a draconian tax on all currency transactions
3. U.S. retail sales not only fell 0.1% in February, but January’s initial
lie print of a 0.2% gain was “revised” to a 0.4% decline
4. Said commodity “short squeeze” decidedly ended, with commodities
plunging for the second straight day across the board – typified by iron ore,
whose one-day, 19% surge last week has now been completely reversed
5. The U.S. business inventory-to-sales ratio “unexpectedly” hit a new
seven-year high; i.e., the worst since the height of the 2008-09 financial
crisis
6. India’s non-performing loan percentage surged to an astonishing 18%,
catalyzing yet another plunge in BRICs currencies
7. Former U.S. “market darling” Valeant Pharmaceuticals officially
commenced its road to fraud-induced bankruptcy – taking with it, one of the
symbols of today’s vile, “shareholder activist” environment, Bill Ackman
8. Last but not least, subprime auto loan
delinquencies surged to a two decade high
In that context, no less than a half dozen Precious Metal “analysts” are
out with their tried-and-true fear-mongering. Yet again, predicting PM
prices will crash because the COT report shows “commercials” like JP Morgan
have built large short positions in paper futures contracts. I’ve seen
it dozens of times before, as these broken clocks utilized blatantly rigged
data, in blatantly rigged markets, to try and guess what the Cartel wants
them to guess will happen next.
“The information in this report is taken from sources believed to be
reliable; however, the (COMEX) Commodity Exchange, Inc. disclaims all
liability whatsoever with regard to its accuracy or completeness. This
report is produced for information purposes only.”
To that end, here are the supposedly “damning” charts of the
“commercials’” short position buildup over the past four months – to levels
roughly in the middle of their averages since the Precious Metal bull market
commenced at the turn of the century. Not particularly telling, or
anomalous – other than the urgency of the Cartel’s recent capping of gold –
amidst exploding physical demand – which has occurred as prices have risen by
more than $200/oz. I mean, what “logic” tells you that after the
short position has been built, prices are in danger of falling? To the
contrary, if this was the stock market, analysts would be calling for a short
squeeze, given how such massive shorting has already occurred – and at
some point, needs to be covered.
But alas, cry the “newsletter writers,” the “Ides of March” are upon
Precious Metal bulls; as clearly, deep-pocketed “commercials” are always
right – just as the “speculators” are always wrong, as if there are any
materially-sized “speculators” left, after having been fleeced by the Cartel
– er, “commercials” – for the past 15 years.
I mean, the Fed is speaking, so how could they possibly lose?
You know, like in December, when they finally raised rates as Precious
Metal investors were conditioned to fear for three years – yielding said
$200/oz surge in gold, and $2/oz in silver. Or in Whirlybird Janet’s
February “Humphrey Hawkins” testimony – when again, PM prices “unexpectedly”
surged – highlighting how, with each passing day, markets are growing more
and more mistrustful of Central bank claptrap; including that of the head
money printers themselves.
Look, I’m not saying paper gold and silver will plunge, surge, or
otherwise in the near-term; let alone, in response to what will likely be a
meaningless FOMC statement – at the least, far more “dovish” than what just a
few months ago was predicted to be a “guaranteed” March rate hike.
However, I must reiterate the conclusion of my “COTs no longer
matter” article of February 2012 – yes, four years ago – in which
I discussed how even then, said “COT reports” had lost their predictive
value. As opposed to, say, 2002-2007, when it was guaranteed that
a significant “commercial” short buildup would yield a price smash; and
conversely, a significant commercial long buildup would yield a price
surge. To that end, my good friend Craig Hemke was the sole “voice of
reality” yesterday, in pointing out that
whilst such “data” may suggest a price smash is coming – again, amidst
exploding physical demand, and exploding reasons for such demand to continue
– there is no inherent “guarantee” of such, particularly given the likely
fraudulent nature of such data in the first place.
Last but not least, what said “newsletter writers” fail to point out –
which is particularly sad, given as many purport to be friends of the PM
community – is that the reason we own physical gold, silver, and
platinum is NOT to trade it in rigged paper markets; but instead,
PROTECT our hard-earned savings from the ravages of Central bank
inflation. And given the monstrous forces of money printing being
unleashed on the world as we speak – does anyone remember the ECB’s
hyper-inflationary money printing announcement just one week ago –
this may be the absolutely worst time in history to “second guess” one’s PM
ownership. Of course, if you’re wise enough to avoid said paper dens
of thievery – in lieu of the real money physical PMs represent – none
of this applies to you, so you can continue sleeping the “sleep of the just,”
as I do.
