Beiträge von Schwabenpfeil

Fumes this morning from Café members came pouring through the computer as we all watched The Gold Cartel go into action following the very disappointing US jobs number. When you include the downward revisions in previous months, it could be called a bit of a shocker (see below).

Why gold did what it did the past two days becomes very clear. The Gold Cartel and Working Group on Financial Markets are in deep trouble because the dollar is in deep trouble and the US economy is far weaker than Wall Street/Washington is letting on. In addition to Caribbean-based market propping, this may be the reason the bonds maintained their strength for such an extended period of time.

What is ironic is the economic scenario in Europe is no better than it is here. However, their big-picture structural problems are not so dire, nor are they mired with a disastrous situation in Iraq, one with very negative financial market implications as we go into next year. Still, one currency after another has reasons to be weaker than the next one. The exception, of course, is GOLD – which is just WHY The Gold Cartel and allies are sitting all over it. As they have done for months, the bums are doing all they can to dampen gold fever and suppress excitement over it being the "go to" investment of choice during this dollar devaluation period.

By the close:

*The dollar, falling all day long, ended up down .99 to 80.98.
*The euro rallied 1.86 to 134.55.
*The pound leaped 2 to 194.16.
*The yen dropped to 102.08

Silver recovered well from its early bashing, but ran into heavy resistance right above $8. The commercial shorts are resolute and holding firm. However, the silver cash market is strong as can be. How long can the shorts hang in there might be answered very soon.

The silver open interest rose 1520 contracts to 125,104, a new high.

The gold open interest dropped 1219 contracts to 353,992.

Talk about turnaround, in my commentary too. This was my former lead and MIDAS opening, written soon after the gold bombing:

From a fellow European Café member this morning:

On JC Trichet:

Did you see his remarks yesterday!

"Market intervention is a weapon at the disposal of every central bank" according to Daily Telegraph 3/12/04 page 87 (Ambrose Evans Prichard in Brussels).

Take a look at the report. It’s amazing.

Market gossip says that German buying of physical gold – always high at Christmas – is at unprecedented high levels this year. DT article may have some bearing on this too. Also questions about a big gold bank with a customer caught short.

***

Some highlights:

*The price reversal on heavy volume.
*The Gold Cartel getting stuffed.
*A 16-year new high close.
*A new high close above the double top of $453.40 made twice earlier this week.
*A close above key $455 resistance, a level defended vigorously by the crooks all week long.
*Biggest move up in a single session in some time with gold making like the famous race horse, Silky Sullivan, coming from dead last to win the race today.
*At the moment every gold futures long is a winner. Every short a loser.

What is so incredible to me is how bearish, or out of long positions, the gold pundits are. Been this way before the New Orleans Investment Conference and ever since. Today Dennis Gartman actually told his followers to sell gold Feb gold futures between $455 to $456 with "IMPUNITY." FEB closed at $457.20, up $5.50

Jim Sinclair, John Embry, John Brimelow and I have held the fort all the way up. We have little company anywhere except the incessant cash buyers. GATA love that. What I keep going over with my colleagues is I’ve never seen so many gold bulls who are short-term bearish. The short-term bears outnumber the bulls by an enormous percentage. Having traded markets for 25 years, sometimes in substantial amounts, it would be a first for me to see so many so short-term bears (in a bull market) be accommodated, and then allowing them to get long to ride gold back up. Markets don’t work that way, not when the crowd is so one sided and fighting the trend.

So here we are now with gold comfortably above $450 and most of the visible pundits out of the move. When do they "CRY UNCLE" and get back in? Have not heard of one doing so yet.

Heard from my STALKER silver source. His London contact says demand for silver hasn’t been this strong in Europe since the late 1970’s. This conservative dealer sees silver at $8.50 before this year is out and $10 for next year. He also has some interesting input on silver demand in China. It is soaring there too. Yet, interestingly enough there is a tussle going on between those in China who want their available silver for industrial demand and those who want to mint coins for investment purposes. Sounds awfully bullish to me.

December 3 – Gold $455.40 up $5.50 – Silver $7.99 up 9 cents

Five O’clock Charlie Misfires Again/Gold Roars Back To Make Decisive New 16-Year Highs

"Market intervention is a weapon at the disposal of every central bank." Jean Claude Trichet

GO GATA!

What a turnaround! YES! Five O’clock Charlie showed up this morning and misfired completely. A fellow Café member saw it this way:

They sent poor Charlie out this morning with NO bombs! I couldn’t believe it when I saw USDX minus 0.5 and Charlie coming over the horizon! Looks like they have him signed up for Kamikaze ops now! Could it be that they have run out of ammo?

They had better put up a sign on Wall St "Beware of falling Gold Cabal personnel"…could make a real mess on the side-walk!
Cheers

Goldman Sachs led an all out attack this morning on gold in one of its most blatant assaults ever. Even before the jobs number was released, the bad guys were in action behind the scenes. The euro was up .40 and gold was 40 cents lower. As soon as the very weak and disappointing number was announced, gold shot up $3, playing some catch up, and the dollar went into free-fall. Then "ALL THE DEALERS" went into concerted action to stuff bullion. It wasn’t long before gold was down $2 on the day even as the dollar was battered. There is no other explanation for this sort of price action except BLATANT manipulation.

However, as John Brimelow and I keep bringing to your attention, the gold cash market is, and has been, on fire. The smart money BIG buyers know all about The Gold Cartel and what their agenda is. What has changed from past years is these buyers have caught on to what the cabal is up to and because there are so many of them these days, they lay in wait for attacks, like this morning, and scoop up the cheap gold. For months now it has been one, "Thank you very much cabal" after another.

This physical buying kicked in again. By mid-session gold was back to unchanged and then the uh-oh sounds were heard among the dealer camp and the locals who were short. Gradually, and in the most classic of bullish trading actions, gold made new high after new high, just like it did the other day. I would suggest this has never happened before in the same week over the past six years. Once gold took out its brief top made after the US jobs number release, it took off, going $456 bid at one point.

The United States has faced the same reality. It waged a full-scale war in Indochina, conducting the most brutal bombardment of a tiny peninsula in world history, and yet was forced to withdraw. In the headlines every day we see other instances of the failure of the presumably powerful over the presumably powerless, as in Brazil, where a grassroots movement of workers and the poor elected a new president pledged to fight destructive corporate power.

Looking at this catalogue of huge surprises, it's clear that the struggle for justice should never be abandoned because of the apparent overwhelming power of those who have the guns and the money and who seem invincible in their determination to hold on to it. That apparent power has, again and again, proved vulnerable to human qualities less measurable than bombs and dollars: moral fervor, determination, unity, organization, sacrifice, wit, ingenuity, courage, patience--whether by blacks in Alabama and South Africa, peasants in El Salvador, Nicaragua and Vietnam, or workers and intellectuals in Poland, Hungary and the Soviet Union itself. No cold calculation of the balance of power need deter people who are persuaded that their cause is just I have tried hard to match my friends in their pessimism about the world (is it just my friends?), but I keep encountering people who, in spite of all the evidence of terrible things happening everywhere, give me hope. Especially young people, in whom the future rests. Wherever I go, I find such people. And beyond the handful of activists there seem to be hundreds, thousands, more who are open to unorthodox ideas. But they tend not to know of one another's existence, and so, while they persist, they do so with the desperate patience of Sisyphus endlessly pushing that boulder up the mountain. I try to tell each group that it is not alone, and that the very people who are disheartened by the absence of a national movement are themselves proof of the potential for such a movement.

Revolutionary change does not come as one cataclysmic moment (beware of such moments!) but as an endless succession of surprises, moving zigzag toward a more decent society. We don't have to engage in grand, heroic actions to participate in the process of change. Small acts, when multiplied by millions of people, can transform the world. Even when we don't "win," there is fun and fulfillment in the fact that we have been involved, with other good people, in something worthwhile. We need hope.

An optimist isn't necessarily a blithe, slightly sappy whistler in the dark of our time. To be hopeful in bad times is not just foolishly romantic. It is based on the fact that human history is a history not only of cruelty but also of compassion, sacrifice, courage, kindness. What we choose to emphasize in this complex history will determine our lives. If we see only the worst, it destroys our capacity to do something. If we remember those times and places--and there are so many--where people have behaved magnificently, this gives us the energy to act, and at least the possibility of sending this spinning top of a world in a different direction. And if we do act, in however small a way, we don't have to wait for some grand utopian future. The future is an infinite succession of presents, and to live now as we think human beings should live, in defiance of all that is bad around us, is itself a marvelous victory.
Peace.

PETER STOCK PRESS, INC.
555 Fulton Street, Suite 209
San Francisco, CA 94102

THE OPTIMISM OF UNCERTAINTY by Howard Zinn

In this awful world where the efforts of caring people often pale in comparison to what is done by those who have power, how do I manage to stay involved and seemingly happy? I am totally confident not that the world will get better, but that we should not give up the game before all the cards have been played. The metaphor is deliberate; life is a gamble. Not to play is to foreclose any chance of winning. To play, to act, is to create at least a possibility of changing the world.

There is a tendency to think that what we see in the present moment will continue. We forget how often we have been astonished by the sudden crumbling of institutions, by extraordinary changes in people's thoughts, by unexpected eruptions of rebellion against tyrannies, by the quick collapse of systems of power that seemed invincible.

What leaps out from the history of the past hundred years is its utter unpredictability. A revolution to overthrow the czar of Russia, in that most sluggish of semi-feudal empires, not only startled the most advanced imperial powers but took Lenin himself by surprise and sent him rushing by train to Petrograd. Who would have predicted the bizarre shifts of World War II--the Nazi-Soviet pact (those embarrassing photos of von Ribbentrop and Molotov shaking hands), and the German Army rolling through Russia, apparently invincible, causing colossal casualties, being turned back at the gates of Leningrad, on the western edge of Moscow, in the streets of Stalingrad, followed by the defeat of the German army, with Hitler huddled in his Berlin bunker, waiting to die?

And then the postwar world, taking a shape no one could have drawn in advance: The Chinese Communist revolution, the tumultuous and violent Cultural Revolution, and then another turnabout, with post-Mao China renouncing its most fervently held ideas and institutions, making overtures to the West, cuddling up to capitalist enterprise, perplexing everyone. No one foresaw the disintegration of the old Western empires happening so quickly after the war, or the odd array of societies that would be created in the newly independent nations, from the benign village socialism of Nyerere's Tanzania to the madness of Idi Amin's adjacent Uganda. Spain became an astonishment. I recall a veteran of the Abraham Lincoln Brigade telling me that he could not imagine Spanish Fascism being overthrown without another bloody war. But after Franco was gone, a parliamentary democracy came into being, open to Socialists, Communists, anarchists, everyone.

The end of World War II left two superpowers with their respective spheres of influence and control, vying for military and political power. Yet they were unable to control events, even in those parts of the world considered to be their respective spheres of influence. The failure of the Soviet Union to have its way in Afghanistan, its decision to withdraw after almost a decade of ugly intervention, was the most striking evidence that even the possession of thermonuclear weapons does not guarantee domination over a determined population.

From a veteran Café member and GATA supporter – particularly appropriate today for those bummed out over the gold/silver share mess:

Heather,
I like and admire the quote below for several reasons, not the least of which is another "Howard Zinn" is a famous bicycle frame builder and you know my passion for cycling. Never EVER giving up is a golden rule of sports as well. It became my mantra after 15 years of bike racing, season in, season out, never finishing better than 6th, 15th or even 30th in a 60 to 100 man field, this dog finally had his day. One first place finish 3 minutes ahead of the chase group, 7 minutes ahead of the field, I know well the benefit of never giving up. Odds against me big time with 15 times national champion and 4 time Olympian in the field and many more who could drop me convincingly in a final sprint, my time did finally come.
I'll pass this along to Bill Murphy. I think he'll enjoy it as well. Ex-pro football player and contrarian (sp?) thinker extraordinaire. It seems quite appropriate for Midas at LeMetropoleCafe.com. We'll see.
Best as always,
Peter

Hey Bill,

I didn't think there was anyone left to sell out of their pm shares, but they're knocking down the exit doors. Maybe it's us that are insane? Doing the same thing over and over and expecting a different outcome from the cartel controlled market. Gold is about 7% higher than it was on April 1, 2004 (before that takedown) but I am down 15% in my portfolio from then. And, it's dropping as we speak. Today's simultaneous move lower in silver, gold, and the shares is no coincidence. The bullion started out strong, silver shares were moving up nicely, then suddenly turned down much sooner than the actual metal price did. Must be nice to have that kind of inside information, to sell after a nice bump up, knowing a takedown was coming. But, we have free markets... and I believe in the tooth fairy.
Rich

When I begin to receive emails such as this one, you know we are close to a gold share bottom:

"My friends have all sold their gold shares and bought the ETF. Why are you in denial?"

Meanwhile, the gold shares show no sign of recovery. The XAU lost 3.50 to 103.21, while the HUI gave up 9.63 to 226.89. It easily took out its chart uptrend.

One day in the near future this gold share selling madness will end. Just not there yet. Next year this will seem like a bad dream.

GATA BE IN IT TO WIN IT!

MIDAS

Anyone know the skinny on this:

BILL…WROTE YOU YESTERDAY WITH THE INFO THAT MY COIN DEALER SAID NO 1 OUNCE EAGLES COMING FROM MINT…FIRST TIME EVER! I SPOKE TO MINT THIS MORNING…JUST THE RUN AROUND AS TO IF THIS WAS TRUE. NOTE BELOW FROM MINT’S WEBSITE THAT EVEN PROOFS ARE ‘NOT AVALIABLE’!
PLEASE REPLY…HAVE YOU HEARD OF THIS? IS IT TRUE? IF SO, WHAT DO YOU MAKE OF THIS?
THANKS
BOBBY ELLERBEE

On Treasury Secretary Snow and cartels:

Bill:
Things are hurting today in the shares and elsewhere. An attempt to confirm that the shares lead the physical? Anyway, a real pita.

Apropros your frequent recitation of cartel instances and rants about the inadequacies of journalists, I thought you would be interested in the following quote from lead editorial in WSJ of 11/23/2004 (p.A18), made in the course of seeking to rein in Treas. Sec. Snow's talk about exchange rates:

"Mr. Snow is also fond of repeating the nonsense that exchange rates should be set by "market" forces. However, a currency isn't just another commodity, like wheat or copper; it is a store of value. And unlike other commodities, its supply is determined by a central bank, in the U.S. by the Federal Reserve, which has a monopoly on dollar creation. The global currency markets are dominated by a cartel of central banks, and currency values are a function of their relative monetary policies. Isn't a Treasury Secretary supposed to know that?"

There's much in this paragraph that astounds me to see spewing from the paper that I once thought prided itself on defending free markets, but clearly has long given up the fight against this kind of central planning to enrich itself by not kicking against these particular jerks. Yes, currencies are a special kind of commodity and should act like a store of value, but how is that possible when more of them (unlike the precious metals) can be created at will? And while one must applaud the candor and clarity of the second sentence's recognition that the dollar's "supply is determined by a central bank, which has a monopoly on its creation," I wold have thought such a statement deserved condemnation upon utterance rather than being passed without further comment. And finally the recognition of a global cartel. All of which is to say that if the central banks reflect in part the aims of its member banks and political patrons, and if the currency markets are "dominated" by cartel members, should it be any surprise to conclude that if gold is a shadow currency, the gold market is similarly "dominated?" I take hope, however, from "dominance" not implying 100%, and am hopeful that the very weight of the dollar's dominance in global foreign exchange will be its undoing.

Keep up the good work.
Peter Berry

Some musings from the SF Gold Show....

Hi Bill,
Some additional observations, impressions from the iiconf sponsored Gold Show in San Francisco this last weekend (I attended both days).

One of the presentations I caught was by a recently formed company with a mine scheduled to come online in late summer 2005. I was actually napping a little, but almost fell out of my chair when the speaker began discussing the hedge position they had established to placate the bank that was providing the financing. Not just a small hedge, they sold forward a decent fraction of their reserves. "Caveat Emptor" is the word for gold shareholders. The totals of ounces sold forward by the industry may be on the decline, but new hedging hasn't stopped all together!

On the lighter side, I brought along a beautiful proof Silver coin (0.999 pure) for some "show and tell". When I show coins to people "off the street", most all respond with a puzzled expression as if it were doggie duty or something. It was surprising how many industry people at the show responded in much the same way. I'll grant you that many exploration companies have only recently expanded enough to hire IR people, and many of those folks are new to the precious metals world.

On another occasion, there happened to be an elderly woman of Asian descent standing nearby. When I pulled out the coin, her tired looking face lit up like a search light in a blink of an eye. She immediately struck up a conversation wondering where I had bought it, price, etc. Her enthusiasm highlighted the east vs. west cultural attitudes towards the real thing vs. paper promises. With this sort of attitude literally a world away, it's easy to forget that this is one of the important dynamics behind the current move. As John Brimelow and others have pointed out, demand for the real thing from India and the east is what has put a floor under this market.

As others have reported, I don't recall meeting a single person at the show who was short term bullish, the skepticism of the current move was universal and predictable.
John P

The next gold ETF:

SEC REGISTRATION - Barclays Files with SEC New Gold ETF IPO on the AMEX ("iShares COMEX(R) Gold Trust") Symbol: IAU - "Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective"

***

Chuck checks in:

Bill:
I am just running out but I felt I should comment on the continuing weakness in the shares. To those who are very concerned about the underwhelming performance of the share market, I just want to refer you to a longer term view of the HUI. Please note that back in 2002 we had a large almost 14 month correction in the shares after they had had a fairly spectacular run. We had a series of sell offs before the HUI moved up almost 100%. The pattern of the past year has followed the other one very closely, which is a little unusual. Please look at this chart closely and notice the similarity.

[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/big.jpg]

We are obviously in some kind of shift here, most likely a shift to a stabilizing or perhaps even a rising dollar. The weakness of the dollar recently has not really benefited the gold shares because if they are Canadian or South African, the price in their currencies have not risen. One day, gold will rise against every currency as the pressure to depreciate all currencies to survive the disaster coming down the pike increases. This will probably be the backdrop of the next and most spectacular move in gold and the shares.

Please try to remember your feelings last year and back in 2002 as the shares swooned, and sometimes without having gold weakening. The same may be true right now. This too will pass. We are in the very infancy of a great cyclical bull market in precious metals, and as I believe, in an exponential or parabolic rate. Also, sooner or later we will have the benefit of a crash in all other assets, especially the stock market and the real estate sector. Unlike back in the early 1970's we have not seen this. But this also is certain. This require patience and understanding of the monetary mess and how markets behave. That is why so few people make money in the stock market. Chuck

Five O'clock Charlie

From MIDAS commentary on November 10 with gold at $433.70:

5 o'clock Charlie

I wonder how many of your subscribers remember "5 o'clock Charlie", the North Korean pilot, flying an old, misfiring, piston engined fighter in the MASH tv series. In one episode, he showed up regularly at 5 o'clock to try and bomb an ammo dump next to the MASH. He always missed!

Watching the gold cartel at work is just like watching 5 o'clock Charlie now

Good afternoon Bill
He's still flying, though despite oil trading at (only) $44.00 a barrel as I write, it would seem he can't afford a full tank these days.

Those who follow your work know that there are consistent and hard efforts to depress/cap the $gold price, especially after the London pm fix.

With gold dropping nearly $4 in the last 20 minutes after the pm fix, you don't have to be Dick Tracy to work out that Charlie is still flying. If you want proof that similar activity takes place in the gold stocks look at the attached one minute chart of Gold Fields. Did someone make a few 'phone calls?

On a different issue. Rick Santelli (one of the few decent commentators on CNBC) said that the WSJ would be carrying an article in tomorrow's issue on why the US trade deficit was important for Europe and it would be well worth reading. The anchorperson, Liz Klamen, said she wouldn't read it because she would be too busy Christmas shopping. Why do I get the strong feeling that the one and only qualification for a CNBC presenter is the ability to read a teleprompter?
Keep up the good work
Ian

[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/SharpChartv05.jpg]

CARTEL CAPITULATION WATCH

The DOW lost 5 to 10,585 and the DOG gained 5 to 2143.

The 30-year DEC T Bond broke down further, losing 12/32 to 110 19/32.

Oil was clocked again, falling another $2.24 per barrel to $43.25.

The dollar only rose .39 to 81.95, while the euro sank .52 to 132.69. Gold in euros continues to fade, dropping to 338.50.

US economic numbers:

08:30 Jobless claims for w/e 11/27 reported 349K vs. consensus 330K
Prior week revised to 324K from 323K.
* * * *

10:00 Oct. Factory Orders reported 0.5% vs. consensus 0.2%
Prior reading revised to 0.0% from (0.4%).
* * * * *

09:17 Same-store sales
Of the 49 companies on our page that have reported, only 15 beat consensus, while 32 missed and 2 were in line. The October tally was 30-20-2.
Reference Link
* * * * *

John Brimelow Report

Splattered by Oil: rescued by India?

Thursday, December 02, 2004

Indian ex-duty premiums: AM $6.81, PM $10.52, with world gold at $456.05 and $454.60. Adequate, and massively excessive, for legal imports. Ignoring the rally in the $US which began in the early Indian afternoon, the rupee surged to close at import-facilitating 7 month high of R44.05 = $1 despite intervention by the Reserve Bank. Besides the usual reasons (the Bombay Stock Exchange closed at an all time high today), India is a huge beneficiary of lower oil prices. Contrary to popular impressions, nowadays the immediate effect of lower oil is to help world gold by tending to improve the ability of the largest buyer of physical to bid in the world market.

This morning’s world gold price was the highest since gold imports into India were liberalized. Ex-duty premiums of over $10 are extremely unusual. They were last seen a few times in late April and early May as gold completed its $50+ drop from the March 31 high.

In other words, just like 6 months ago, extremely aggressive Indian buying is to be expected. Without the huge declines in Oil and other commodities today, gold would probably not have closed down. Quite apart from influencing the conventionally- minded US trader, falls like these (oil yesterday experienced the 6th largest drop since the Comex contract started) must have triggered margin calls of considerable size. Some point to the (quite modest) rally in the dollar as being important: but within the US speculative community, these commodity price moves probably had more effect.

Early in the day, of course, the dollar was making new lows and gold held 16 ½ year high ground above $456 for several hours. TOCOM was very mildly impressed: even though the yen made a yen-gold unfriendly 4 ½ year high, open interest rose the equivalent of 534 Comex lots on volume 27% higher, equal to 18,658 Comex. The active contract closed up 5 yen and world gold went out $2.50 above the NY close, at $456.10. It looks increasingly that the public in Japan is not in fact inclined to liquidate. (Yesterday NY traded 59,141 lots; open interest rose a steep 9,565 contracts – 29.8 tonnes – to 355,211 lots. The ETF was once again static.)

The size of the open increase yesterday suggests that either the breakdown effort involved a lot of shorting, or, perhaps more likely, that the traditional heavy seller was again defending $455.

It is possible that the large gold derivatives position (including futures) will now go into a liquidation phase, as in this past April. Some presume this will be the dominant force in world gold. This is a mistake. The physical market checked the decline this Spring far sooner than most expected. It is now postured as it was at the bottom of that slide.

As a source of amusement to gold’s friends, news broke today of a $500 Mm+ derivatives disaster involving a Chinese oil trader. Some say that the problem is far larger, and that it influenced oil’s surge this Fall. As I said in my essay on Nicholas Dunbar’s LTCM book, one can only wonder about the wisdom of allowing these financial nuclear weapons into the hands of children. See

http://www.vdare.com/jb/WallStChangingCulture.htm

JB

An explanation of the Indian premiums by John for Café newcomers:
http://www.lemetropolecafe.com/img2004/IndianPremiums.htm.

Take the emotion out that we are talking about gold. Look at their chart which screams BULLISH. The weeklies and monthly charts are even more bullish looking.

December gold
http://futures.tradingcharts.com/chart/GD/C4

Yet, the HUI chart is horrendous. This dichotomy can’t go on too much longer.

HUI
http://bigcharts.marketwatch.c…&o_symb=hui&freq=1&time=8

The Gold Cartel was huffing and puffing in an all out effort to break the back of the gold bull market. By day’s end they stared at another defeat. Gold roared back after a $7 shellacking mid-session, closing well off its lows and averting an outside key reversal to the downside.

Yesterday’s gold open interest rose 9565 contracts to 355,211. The cabal forces were aggressive sellers in preparation for today’s planned mugging.

Tomorrow’s early action will be dictated by the US employment report. The feeling is mixed as to what is coming. Some indicators show robust activity in the jobs sector, yet others, like today’s jobless claims, reveal a weakening picture.

Silver held up very well after yesterday’s surge. Talk about a bullish chart pattern:

December silver
http://futures.tradingcharts.com/chart/SV/C4

The silver open interest rose sharply on the advance, rising 6626 contracts to 123,584. A large open interest increase on heavy volume, with the price rising sharply, is a technicians dream for the bulls.

The story on silver in the real world from a fellow Café member:

Hello Bill.
I am a subscriber of your site since 2002 and I live in Guadalajara city, Mexico’s 2nd largest.

You might be interested to know that this is the 3rd week in a row that my precious metals wholesale provider, ‘Silver and Gold’, _the biggest in town’, has asked me, his client, to lend him silver bullion I’ve bought from him before (250 kilos), because so far, Peñoles, the world’s biggest silver producer, hasn’t delivered silver to the local market. My provider tells me that the shortage is national, not local.

Three weeks ago I agreed to lent him my silver for just one week, so he could face local demand and we are now in the third week and him still unable to give me back my silver.

Something big must be going on here Bill.
Gabriel

***

December 2 – Gold $449.90 down $3.50 – Silver $7.90 down 11 cents

Five O'clock Charlie

It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds." - Samuel Adams

Too good to be true. That’s what I thought to myself last night as gold took out $456 to the upside. Excitement was starting to build and that is a no-no as far as the heinous Gold Cartel is concerned. It didn’t take long for that concern to be reflected in the gold price.

What gets me is how obvious this charade of a free market is and none of the dolts who report on the gold market ever discuss the reality about what keeps happening. The modus operandi of the gold terrorists is plain as day. Once again the bums attacked after the PM Fix, after the physical buyers around the world had priced their orders.

AM: $454.35
PM: $454.20

You would think someone in the mainstream gold world would notice this frequent and consistent pattern. Nope, not a chance. Either that, or they have been told to keep quiet. Another example of our wonderful free press in the West.

What a tale of two worlds we have here. I’m referring to the gold share market versus the physical market. You would think gold just took out $400 on the downside by watching the share action. Depression and disbelief is everywhere. How can it not be? Yet, what can anyone expect? Almost every pundit out there is calling for a correction. No way the gold shares can go up with long-term gold bull commentators mostly short-term bearish and with the general public clueless thanks to the analysis coming from the gold bullion dealer pros on Wall Street. They are not only short-term bearish, but neutral to bearish for all of next year.

Meanwhile, the cash market is on fire (see JB again). AND a quick perusal of the gold chart reveals a market going straight up without any serious correction as of yet. All dips have been brief and shallow. Those who are long gold futures and gold coins have been cleaning up for months, with long positions established months ago not close to being threatened.

What does all this mean? Very little as far as the big picture is concerned. Mob psychology can do strange things to markets. Think back to the late 1990’s when the DOG made like the Energizer Bunny and kept going and going and going – finally taking out 5,000. For months and months my colleagues and I muttered to each other that it made no sense. It didn’t of course and the DOG collapsed to 1300 and change.

This is what we have going on with the gold and silver shares. This lousy action is completely irrational, yet there it is. Bottom line: patience is called for. Fortunes will be made next year.

Yesterday I cut off part of the stock commentary sent to us by Chris Harris because it was so long. Here is some follow up:

Bill,
DTC is the Depository Trust Corporation, the clearing house for all the equity trades of broker-dealers in the industry. These are the guys we all entrust with clearing our stock transactions and delivering real stock from the seller when we buy equities. What the article means is that you may get real stock for your purchases, or you may get a counterfeit manufactured by the DTC. Since all the transactions are all electronic you have no way of knowing which is true, and your broker or custodial agent ain't about to tell you.

This is like getting a receipt that physical gold is on deposit in your account when it is not. Imagine if the Comex could with impunity inflate their warehouse stocks by electronic entry (you don't think they would ever do anything like that, would they? I would be shocked... shocked!) Your custodian is supposed be holding gold bars in your name... instead they have a piece of paper which they say is a gold bar.

Well here we have stock certificates that aren't stock certificates. So while their members and their members elite customers can use this bogus DTC stock to force down the price of any equity without limit, never having to produce real stock or even buy in their failure to deliver, when your brokerage firm fails in a crisis, the stock you "own" may turn out not to even be real stock! Meanwhile the DTC executives make out for producing extra revenues... that is, the fees for creating bogus stock. Heads you lose, tails they win. That's trillions with a T. And by the way there is an industry proposal afoot to eliminate all delivery of physical stock certificates to customers.
Here's there own self-description from their website:

http://www.dtcc.com/AboutUs/affiliates.htm

http://www.dtc.org

The Depository Trust Company (DTC) is a member of the U.S. Federal Reserve System, a limited-purpose trust company under New York State banking law and a registered clearing agency with the Securities and Exchange Commission. The depository brings efficiency to the securities industry by retaining custody of some 2 million securities issues, effectively "dematerializing" most of them so that they exist only as electronic files rather than as countless pieces of paper. The depository also provides the services necessary for the maintenance of the securities it has in custody.

National Securities Clearing Corporation (NSCC) is the oldest and, in terms of the transaction volumes it processes, by far the largest of the clearing corporations. NSCC provides clearing and settlement, risk management, central counterparty services and a guarantee of completion for trades involving equities, corporate and municipal debt, money market instruments, American depositary receipts, exchange-traded funds, unit investment trusts, mutual funds, insurance products and other securities. NSCC also nets trades and payments among its participants, reducing the volume and securities and payment that need to be exchanged by an average of 97% each day. NSCC generally clears and settles trades on a T+3 basis.

By the way Bill, check out the DTC Board. Talk about rounding up the usual suspects.

Bradley Abelow, Managing Director, Goldman Sachs (GS); Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (LEH); Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (C); Michael C. Bodson, Managing Director, Morgan Stanley (MWD); Gary Bullock, Global Head of Logistics, Infrastructure, UBS Investment Bank (UBS); Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer Francis Trees & Watts, Inc.; Jill M. Considine,Chairman, President & Chief Executive Officer, The Depository Trust & Clearing Corporation (DTCC);

Also, Paul F. Costello, President, Business Services Group, Wachovia Securities (WB); John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (MER); Donald F. Donahue, Chief
Operating Officer, The Depository Trust & Clearing Corporation (DTCC); Norman Eaker, General Partner, Edward Jones; George Hrabovsky, President, Alliance Global Investors Service; Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange; Thomas J. McCrossan, Executive Vice President, State Street Corporation (STT); Eileen K. Murray, Managing Director, Credit Suisse First Boston (CSR); James P. Palermo, Vice Chairman, Mellon Financial Corporation (MEL); Thomas J. Perna, Senior Executive Vice President, Financial Companies Services Sector of The Bank of New York (BNY); Ronald Purpora, Chief Executive Officer, Garban LLC; Douglas Shulman, President, Regulatory Services and Operations, NASD; and Thompson M. Swayne, Executive Vice President, JPMorgan Chase (JPM).

Regards,
Çhris

link to analysis of SEC proposal to outlaw ownership of physical stock certificates
http://www.investigatethesec.com/FW9.html

"Amazing disconnects"

Obviously, something out of the ordinary here. Shares vs. the metal and oil vs. gold. Still seeing a lot of put buying vs. calls on the option futures, especially in silver from Monday. It looks exponential. All of the short-term calls for a correction might prove to be the fuel here for it.

I don't know what it will take to get the shares moving, probably a move in gold vs. the stronger currencies. We've had perhaps three or four good closes in about a month and a half. Patience. Chuck

How about them gold shares! Yep, we live on a different planet. Gold and silver are in the process of one of the grandest moves in market history and:

*Long term gold bulls are mostly all short-term bearish. Had you asked them this weekend whether gold would continue to go a good deal higher or put in a substantial correction, 90% would have gone with the correction.

*Investors can’t wait to sell their gold and silver shares. Each day gold and silver go up they sell more not wanting to get caught in the INEVITABLE correction.

*There is almost no understanding in the gold world, much less the general public, of what this gold move is all about, aside from the fact gold is going up because the dollar is going down.

*Almost every firm on Wall Street has been neutral to bearish on gold for the entire $200 move up. They remain that way. UNBELIEVABLE how clueless, and or corrupt, the lot of them are.

Good grief, both the XAU and HUI closed lower with gold making 16-year highs. The XAU lost .04 to 106.71 and the HUI gave up .42 to 236.52. The nightmare continues. No way could I dream the shares acting this way with gold and silver taking off like they are.

Is there hanky-panky going on? Don’t know. Many Café members think so. A common feeling is The Gold Cartel is losing control of the physical market so they are sitting on the gold shares to dampen gold fever excitement. I am told that Goldman Sachs and Morgan Stanley have been dressing down the Canadian gold shares, selling a 100 lot here and there on the closes.

Whatever is going on it has given impetus to growing depression among the gold and silver shareholders. All day long I was asked why these shares are stinking up the place. My take:

*Most of the gold camp is calling for a correction. Share buyers are waiting until we get one to step up to the plate.

*Most on Wall Street are neutral to bearish on gold. Why buy the shares at all? Based on their analyses, the gold and silver shares are better shorts than buys.

*Constant dissemination of gold disinformation (which is usually negative) by the US financial press has cooled investor interest.

*A number of hedge funds are long bullion and short the shares.

*The crummy price action is sending investors away in droves. The thinking is if the shares won’t go up when the prices of gold and silver are taking off, what will the shares do when both precious metals go through a normal correction?

*Probably some shorting by The Gold Cartel camp to gain this achieved effect.

*Who wants to be in the gold shares and miss out on the big DOW and DOG moves?

You are not alone either:

Hi Bill,
Just a note to let you know that you are not alone in your bewilderment. As I write this at 1240 PM e.s.t. silver is screaming up $00.35 and gold is up $3.80. However, the shares have been flushed to the sewer. Insanity! Me thinks the cartel has locked down the tiny share market through their many mutual fund holdings as retaliation for bullion breaking free of their grasp. These are horrible humans obsessed with power and getting their way. As the metals continue their rise, it won't take long for the shares to explode as even the cartel's efforts and a media obsessed with positive wall street spin can't overpower greed when it enters what remains of a free market.

The elitists have deceived the dumbed down masses so far, but when they wake up from this delusion and pursue the purchase of mining shares, it will be a sight to behold... Speaking of delusion, just turned off CNBC after about three minutes, which is all I can take, and heard that the DOW is rejoicing the lower oil price (up 126). What crap! The DOW only hears the good news and has a remarkable ability to ignore things such as auto sales down more than 7%, dismal holiday retail figures, dollar decline, etc, etc. Don't worry, be happy continues as the wall street mantra. Having been badly wounded with the decline in GSS because of their past quarter's loss, I continue to be amazed at the extreme over value of GOOG, SIRI, TASR, etc. Pundits report upon the mining shares being over valued, gold is always ready to correct, but the wall street darlings continue to soar with P/E's in the stratosphere. No one remembers the tech wreck of the recent past. Shame on them. This one is so over due it promises to be astronomical! I won't despair because I know the PMs will not be ignored, in spite of wall streets efforts to deceive, and when the metals right this wrong, it will be profoundly rewarding. Glad I found GATA, and know the truth, which is the most priceless commodity of all. All the Best Ten Horns!
Rich

Don’t know when this extraordinary apathy towards the gold shares will end. What I do know is it will and the resulting move will be nothing less than sensational. Gold producers are raking in the dough and the need to find gold and silver in the ground in a grand way will spur the explorations to great heights.

GATA BE IN IT TO WIN IT!

MIDAS