[Blockierte Grafik: http://www.goldseek.com/news/LemetropoleCafe/lmpc.jpg]
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CARTEL CAPITULATION WATCH
Just as gold is never allowed to trade up like it should at times, the DOW is never allowed to tank. After a weak opening, it rallied very late in the day again to close at 10,432, up 41. The DOG gained 3 to 2023.
Wonder what the combined probability is of the DOW rallying so often late in the day combined with gold making its high for the day in the first hour or less? If someone were to compare what has transpired in recent times versus how they both traded many years ago, the difference would surely blow that someone away.
If Greenspan’s remarks on the potential of interest rates rising rapidly was bearish for gold (when his implications are really bullish), then why did the DOW respond so positively and rally on the news? It is the fear of sharply rising interest rates which should have stock market players spooked. Yet, even the bond market paid little attention to Greenspan. After a brief dip, even the 30-year bond closed HIGHER! By day’s end, only gold and silver were really affected by Greenspan’s remarks. The two markets which should have gone up, went down. The ones that should have gone down, went up.
Here we go:
SAN FRANCISCO (CBS.MW) -- Gold futures and shares of major metals companies traded lower Tuesday amid indications that the Federal Reserve may take a more aggressive stance on interest rates…
END
And here we go again, late entry from Sarge:
The single big buyer of DIAs today left these footprints on the tape:
09:40 200,000
10:40 100,000
11:40 150,000
12:04 150,000
12:24 100,000
13:54 100,000
14:28 100,000
15:18 200,000
15:28 200,000
15:38 200,000
Total DIAs bought by this single entity today = EXACTLY 1,500,000 units
At an average cost of lets say $104 that’s $156,000,000 they spent today to push the DOW up.
This also happened yesterday. ALL of the other trading periods were comparatively SMALL lots.
Today’s rally was engineered by one Wall Street firm. G-8 window dressing?? Even another American being murdered in Saudi Arabia had NO effect on this little engineered bull run.
Meanwhile yesterday was a head fake in the gold market. The big players stood aside and let the market drift. No prints of any magnitude were to be seen. Today however we have returned to the repeating pattern we saw last week. That is the market trades within a tight 1 or 2 dollar range as long as NY/Comex isn’t open. Once the Comex open and NY trade begins, we go down at a 45 degree angle until the close. Usually a 4 or 5 dollar move. It is flatline overseas, dive to hell in NY. Flatline overseas, dive to hell again in NY.
-END-
The Matrix lives!
GATA’s Mike Bolser:
Hi Bill:
The Fed added $6 Billion in temporary repos today June 8th 2004, an action that caused the repo pool to fall some to $42.85 Billion, but kept up the gently rising DOW support mechanism.
At my website you can see the Repos chart:
http://www.pbase.com/gmbolser/interventional_analysis
And the red repo 30-day moving average line. This line is the main battle metric for supporting the DOW. The Fed uses it like a fuel gauge. Up for,more support, down for less.
I have found over the years that the Fed has a practice of hiding their interventional tracks with at least three levels of opacity so if you want useful data one must expect to do a great deal of work to find it. In this regard notice the permanent open market operations shown in orange balls at the bottom of the chart.
Clusters of permanent open market DOW support
Recall that permanent open market operations never leave the market once they are created and as such carry far more interventional weight than temporary ops which must be returned within 28 days (at most).
Examine the red line down to up reversals and their correlation to clusters of orange balls. Each reversal has its own cluster of permanent open market operation so this is a major clue to the Fed's future DOW support intentions. When support is removed the temporary omos are reduced and the DOW falls back.
Knowing this fact we are forewarned as to approaching up trends in the Fed support mechanisms and to the absence of such support.
Mike
Follow up in The King Report:
We forgot to mention in yesterday’s missive some points re: Friday’s Employment Report. ‘Goods Producing Hourly Wages’ SA fell .01 to $17.20. But NSA the figure fell .04 to $17.08!!! ‘Manufacturing Hourly Wages’ fell .01 to $16.07 SA; but NSA they fell .04 to $16.02. ‘Information Service Hourly Wages’ SA increased .07 to $21.40; but NSA they fell .10 to $20.87. This is ludicrous!!! The BLS has Info Service Hourly wages increasing .07 but in reality they fell a dime. Plus there is a .57 discrepancy between the BLS’s seasonal adjustment fantasy and reality.
This clearly illustrates the mendacity of seasonal adjustments (SA). The BLS has a fictitious income figure; one that is at odds with the workers’ checkbooks. And that’s why consumer sentiment is at odds with all this wonderful economic data that some call a ‘boom’. PS – From 1982 to 1988, the US economy generated 20m jobs while inflation collapsed. That was a boom.
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A few thoughts from Jesse on today’s developments:
They want it all now, don't they?
Or perhaps more correctly, they need it all, and at the same time. A strong dollar, or at least a 'not-weakening' dollar to maintain the current balance of imbalance in the trades balances, not-weakening bonds to keep interest rates under control, and strong equities as a reliable sink for a wildly expanding money supply and the illusion of recovery.
Despite all the help one could expect from our client states, I am not sure even the American Republic can pull this one off. Greenspan is reminding me of one of those vaudevillian fellows who keeps an unbelievable number of plates spinning simultaneously on top of poles, excepting in this case I am not sure what the 'big finish' might be like.
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Two gold news story items worth commenting on:
*In the Swiss gold story below, note how the headline differs from the story. One would think by scanning the headline (I know because I received a phone call) the Swiss were planning to dump gold not already slated for sale:
SWITZERLAND - Parliament debates what to do with excess gold
SWISSINFO - Parliamentarians are making a new attempt to decide how to spend the proceeds from the sale of the Swiss National Bank’s excess gold reserves. Previous plans, including a proposal to spend the proceeds on humanitarian projects, were rejected by Swiss voters...
–END-
*This Aussie bank gold story reads as Commonwealth has someone in 7th grade writing their gold outlook - based on the bank’s trivial comments in the article:
Tuesday June 8, 4:51 PM
Gold Likely Nearing Last Gasp Of Current Bull Run - CBA
Sydney, June 8 (Dow Jones) - While gold could temporarily move higher again within the next three months, the yellow metal's bull run is likely over, the Commonwealth Bank of Australia (CBA.AU) said in a report issued late Tuesday.
Amid concerns about terrorism and high oil prices, as well as a favorable near-term technical outlook, gold could yet move back to US$410 a troy ounce, the bank said in its short-term "tactical" analysis.
But even if bullion does climb back above the psychologically significant US$400/oz mark, "how long it will stay there is another matter," the CBA said.
"Rate rises are on the way in a number of major economies, principally the United States," it said, adding that China has already moved to tighten monetary liquidity.
"Higher interest rates will raise contangos and improve the attractiveness of forward selling for the smaller high-cost mining operations," the CBA said. Rising interest rates will also diminish the relative attractiveness of investing in gold, it said.
Furthermore, the bank believes the U.S. dollar, which typically moves in the opposite direction to the gold price, "appears likely to strengthen," given the potential for the U.S. economy to outperform its peers.
While the CBA said supply side factors would remain "moderately supportive" for gold through 2004, it expects mine supply to rise in 2005.
"We suspect that gold's run has passed," the bank said. "US$430/oz could easily be revisited, but we suspect that new cycle highs are unlikely...and US$350/oz seems possible by (the second half of next year)," it added.
-END-
Well, it’s the likes of the Commonwealth Banks of the mainstream gold world versus the Mahendras and the MIDAS’ of the unconventional thinking world. The gauntlet has been laid out. Only time who prove which camp is correct. Meanwhile, Mahendra thought today would be negative for gold, bullish as he is, and doggone it was. Spoke with him today. He is ravingly bullish on the gold shares from here on in. His note this afternoon:
Dear Bill,
Please read it release and please put on MIDAS so now officially every will know that I am in USA. Now we are entering in major upward trend in metal and metals stocks from tomorrow. FINALLY A GREAT RISE IS STARTING IN METALS FROM TOMORROW FOR LONG RUN SO DON"T SELL EVEN IF YOU GAIN 5% in GOLD and 40% in stocks.
YEN IS READY TO GO BELWO 100 MARK.
Thanks & God Bless
Mahendra
Congrats Mahendra:
June 7, 2004, Santa Barbara, California – MRK Financial, Inc. (MRK) is pleased to announce the addition of Mahendra Sharma to its asset management team. A spokesman of MRK stated "As a native of India and most recently from Nairobi, Kenya, Mr. Sharma has perfected a unique methodology to invest in stocks and commodities. During a six month period ending March 31, 2004, in cooperation with Mr. Sharma and using his advice, MRK experienced an annual return in excess of 100% in one of its segregated funds. This outstanding result has prompted us to invite Mr. Sharma to come to the United States in order to provide his professional services to MRK. Subject to a continuation of similar performance, MRK is giving consideration to the creation of a specialized hedge fund in which Mr. Sharma would manage. Should this direction be pursued, an announcement pertaining to the creation of the fund would probably be made in late summer of 2004."
When in the United States, Mr. Sharma will have access to state-of-the-art communications, technology and information. It is felt that this will allow him to work and communicate more effectively to better demonstrate how he can improve upon his track record. As an established expert in the use of his methodology in investment management, Mr. Sharma has advised government officials, international bankers, investment managers, industry leaders and private individuals throughout the world. In addition, Mr. Sharma has previously studied commerce at the University of Maharastra in Mumbai India.
MRK has also pledged that a meaningful portion of the profits realized through the use of Mr. Sharma’s methodology will be contributed to an HIV/AIDS foundation for children in Africa. This commitment was one of the driving forces for Mr. Sharma in joining MRK.
Mr. Sharma officially joined MRK on May 5, 2004.
MRK Financial Inc.
19 E. Mission St., Suite A
Santa Barbara, CA 93101
(805) 569-6200
More oil concerns:
Asia May Boost Emergency Oil Reserves Amid Supply Concerns
June 8 (Bloomberg) -- Asia, which consumes almost a third of the world's oil, may boost imports for emergency reserves after prices surged to a record on concern terrorist attacks may disrupt supply from the Middle East….
An Asian emergency oil reserve, with a capacity of half a billion barrels, would require about $15 billion in investment alone to fill it with crude oil priced at $30 a barrel, said Damien Criddle, a lawyer at Baker & McKenzie in Hong Kong, who specializes in oil and gas.
Zitat
"It's a major capital undertaking,'' he said. Japan, China and South Korea may help fund the reserve because ``it's in their interest to see their neighbors stable.''
Officials from Japan, South Korea and China, and the 10-member Association of Southeast Asian Nations will hold talks this week on increasing stockpiles when they meet in Manila to discuss energy security.
The Middle East accounts for more than 80 percent of Asia's crude oil imports, according to a Bloomberg survey of 10 traders in the region.
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Here is a scary one:
Martin Armstrong was originally sentenced to 18 months for contempt of court... that was over 4 years ago!
As chief economic analyst at PEI he oversaw the development of PEI's economic models and computer systems and directs research into artificial intelligence. He is also the author of "The Greatest Bull Market in History", a definitive 3-volume study of the world economy and financial markets since 1900. He was voted "Americas Top Economist" in 1990 by Equity Magazine. Mr. Armstrong has been called on by the Joint Economic Council of Congress to testify on economic issues, as well as the Brady Commission, where he was invited to share his views on the 1987 market crash (which he predicted using his computer models far in advance of the crash).
Martin Armstrong has often been quoted by news organizations such as: NY Times, Wall Street Journal and Bloomberg. He has also appeared on CNBC and other financial broadcasts sharing his views. Mr. Armstrong has devoted his time to analyzing financial markets, studying the history of business cycles, market crashes and world monetary systems
http://www.armstrongdefensefund.org/contempt.htm
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Another one bites the GATA dust:
Release: 4935-04
For Release: June 7, 2004
CFTC Announces Resignation of Michael Gorham
Washington, D.C. -- The Commodity Futures Trading Commission (CFTC) today announced the resignation of Dr. Michael Gorham, effective June 30, 2004. Dr. Gorham is leaving the Commission to become the Director of the Center for Financial Markets at the Illinois Institute of Technology in Chicago, Illinois.
Dr. Gorham was recruited by CFTC Chairman James E. Newsome to become the first director of the Commission's Division of Market Oversight (DMO). The Division was created as part of a 2002 restructuring of the Commission to facilitate implementation of the Commodity Futures Modernization Act of 2000 (CFMA). The Division handles the designation of new markets, the review of new futures and option products, the monitoring for and detection of market manipulation, and the protection of customers from market abuses.
-END-
Sheesh, we take this guy on. Finally get response from someone in government. Then, we find out Gorham flees the coupe.
Golden Star wins a court battle
TORONTO, June 8 /PRNewswire-FirstCall/ - IAMGold Corporation announces that the Ontario Superior Court of Justice today granted the application of Golden Star Resources Ltd. and ordered that the annual and special meeting of the shareholders of IAMGold be delayed until June 29, 2004. The Court also held that the confidentiality agreement between GSR and IAMGold does not prevent GSR from proceeding with a formal take-over bid without the approval of the IAMGold Board of Directors. –END-
While the general stock market rose following Greenspan’s commentary, the gold shares found them troubling and fell. The HUI dropped 4.22 to 192.69 and the XAU sank 1.40 to 87.42. The smaller juniors and explorations can barely catch a bid anywhere.
As aggravating all the way around today was, it does nothing to change the big picture. The physical market is firm and the gold fundamentals remain "10+++."
Patience is often required to make the big bucks. This is certainly the case these days in gold and silver. What is important to keep in the front of our minds is we know how The Gold Cartel has backed itself into a corner. They WILL lose. When they do, the gold and silver shares are going to go bonkers. There will be a number in our camp who will make more money in a month than most investors make in a lifetime. In a few years, when we annualize out how we have done, it will dwarf how most others have made on an annualized basis in the general stock market.
Keep the faith. Stay the course.
GATA BE IN IT TO WIN IT!
The implication: the Fed cannot raise rates, because the real economy is on life support and can't take it; and that means it can't permit rates to rise due to market forces, either. The fake economy--i.e., the economy as depicted by government statistics--is of course booming, but that is quite irrelevant. It is reality, not fantasy, which dictates the flow of events.