Courtesy of Peak Prosperity:
Gold has been boring for years, lurking in what a friend calls “the Collum range . . . oh, about $1,200." (Figure 19). It will be tested during the next downturn and consequent stimulus effort, but until then I’ve largely stopped reading articles about why gold will tank or soar. If it hedged against monetary idiocy, I would be living on my own Island in the Caribbean.
Occasionally, however, I stumble across a nugget. Gold dropped linearly from April to August (Figure 20). Maybe that's normal or maybe Bernie Madoff whistleblower Harry Markopolos is right: Linearity in finance is fraud. (A 21-day linear drop in silver was even more awesome.)
Hedge funds went net short, suggesting correlation if not causation, possibly fueling the brief dip below $1,200. Evidence of horseplay appeared in the form of 260,000 futures contracts—$34 billion notional value—monkey-hammering gold in 4 hours in June. Nobody even blinks at these anymore, especially not the regulators. Of course, a couple of gold-rigging charges were made—one guy even admitted that it had been happening at the industrial scale for years—but they were disposable traders and got acquitted anyway.
Canada’s Scotiabank will pay $800,000 to settle charges of “spoofing” (fake bidding). Wow. $800,000. HSBC has been caught four times rigging the price of gold, promising four times to never do it again.
Reset?Occasionally, however, I stumble across a nugget. Gold dropped linearly from April to August (Figure 20). Maybe that's normal or maybe Bernie Madoff whistleblower Harry Markopolos is right: Linearity in finance is fraud. (A 21-day linear drop in silver was even more awesome.)
Hedge funds went net short, suggesting correlation if not causation, possibly fueling the brief dip below $1,200. Evidence of horseplay appeared in the form of 260,000 futures contracts—$34 billion notional value—monkey-hammering gold in 4 hours in June. Nobody even blinks at these anymore, especially not the regulators. Of course, a couple of gold-rigging charges were made—one guy even admitted that it had been happening at the industrial scale for years—but they were disposable traders and got acquitted anyway.
Canada’s Scotiabank will pay $800,000 to settle charges of “spoofing” (fake bidding). Wow. $800,000. HSBC has been caught four times rigging the price of gold, promising four times to never do it again.
The debate about the future of gold in the global monetary system rages on among the 10 people who care. Craig Hemke (TF Metals Report) was early to notice an apparent pegging of the yuan to gold Could be true or just goldbug pareidolia; regardless, it seemed to end this fall. Canada sold every last ounce of sovereign gold by 2016, putting their holdings below those at the Bank of Dave.
China, Russia, Poland, Hungary, Pakistan, Egypt, and Mongolia kept accruing the Bar-B-Qued relic. Hungary cranked its inventories 10-fold with an affiliated repatriation from foreign vaults. Turkey decided its gold was safer at the Istanbul Exchange than in JPM's vaults in New York.
Rumors that Russia and China have outlined plans to create a 100% gold-backed currency system to replace the U.S. dollar as the world’s dominant currency are wild speculation and provocative. They certainly trust gold more than the dollar-denominated global banking cartel.
You really can’t put a value on gold (or eat it), but there are technical indicators suggestive of future price movements. The so-called speculators—the dumb money, whatever that means—went net short for the first time since the 2001 bottom, while the banks—the smart money (?)—went net long for the first time in history. We are parked at an all-time high of >500 claims against each ounce of gold at the COMEX vaults, which could leave some wondering who Madoff with their gold.
Silver:China, Russia, Poland, Hungary, Pakistan, Egypt, and Mongolia kept accruing the Bar-B-Qued relic. Hungary cranked its inventories 10-fold with an affiliated repatriation from foreign vaults. Turkey decided its gold was safer at the Istanbul Exchange than in JPM's vaults in New York.
Rumors that Russia and China have outlined plans to create a 100% gold-backed currency system to replace the U.S. dollar as the world’s dominant currency are wild speculation and provocative. They certainly trust gold more than the dollar-denominated global banking cartel.
You really can’t put a value on gold (or eat it), but there are technical indicators suggestive of future price movements. The so-called speculators—the dumb money, whatever that means—went net short for the first time since the 2001 bottom, while the banks—the smart money (?)—went net long for the first time in history. We are parked at an all-time high of >500 claims against each ounce of gold at the COMEX vaults, which could leave some wondering who Madoff with their gold.
Silver got pummeled a bit but, fortunately, nobody owns any (except me). The industrial demand keeps my relatively small position intact. Solar now consumes about 10% of annual silver production,ref 181 and silver is found in non-recoverable form in every electronic device. The gold–silver ratio has soared from 16:1 by weight in the ground to 80:1 by price in the market.ref 182 The notion that it should somehow price in proportion to supply is hotly debated, although the consumption of silver but not gold would logically give silver the relative boost in my opinion. JPM is said to control over 50% of the COMEX silver inventories—new-era Bunker Hunts or simply their clients’ silver.ref 183 For now, I watch with bemusement.
https://www.peakprosperity.com/blog/114635/2018-year-review#gold
https://www.peakprosperity.com/blog/114635/2018-year-review#gold
