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Forget Prayer, It's Lamb Slaughter Time: A Rational Man's Response To All Time High Gold Shorts
Two days ago we suggested that "they better pray there is no short squeeze." Today, following the just released latest CFTC Commitment of Traders data which showed that the Comex gold short position grew once again to a new all time high of 79,416 shorts, all prayers are now off. If we may be so bold as to we suggest, the time has come to upgrade to the sacrificial slaughtering of at least a lamb on the altar of Saint Ben, because even the tiniest hint of a forced cover will now result in the biggest rip your face off levered short squeeze seen in the history of the yellow metal. Maybe throw in an ink cartridge or two for good measure...
Short positions in gold have risen 25% in the last 3 weeks
Chart: Bloomberg
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Its a sad day(admit it give up) when bulls are relying on short covering for price increase. 70,000 contracts is 1-2 days volume. Won't be that big of a squeeze if it happens. Considering a large amount of these contracts are probably miners, producers, wholesales etc hedging their inventory or production it's even less of an event.
Gold will hit $1100 very soon.
We are in a deflationary environment I don't know why ZHers can't see it.
M3 can barely stay positive. Shadow credit shrinking like crazy.
Anyone who is dumb enough to say " but the fed is printing $85b a month" is too stupid to realize that there is another side of the equation. Dollar destruction is happening in the credit market at about $85B a month. You think the fed randomly came up with that number ?? Lol.
Sell gold. Buy dollars.
If things get so bad that faith in the dollar starts to fade then we are in the next stage of a collapse. IMO we are far off from that point. Good luck staying solvent until then.
When you need to get out of those dollars and get into phyzz because it's endgame there won't be any available for you to buy. That's when they carry you out.
No, miners/producers are in a different category, and are net short as you would expect, since they produce the stuff.
Yes, ZHers are betting on deflationary environment, in terms of gold.
Why would anyone invested in gold care if USD inflates or deflates? It's not even money to begin with.
This'll be fun to watch. Got volatility?
http://www.zerohedge.com/news/2013-04-08/80-chance-40-silver-short-squeeze
We all know what happened to silver after April 8...
It's called desperation. At some point soon they'll have to either do another major smackdown, or let the price go up, burning all the shorts.
Fortunately, I'm holding physical so whatever they do, it has no effect on my holdings. It only affects my ability to purchase more of it in the future.
read any of the old ZH comments (mine included). years back this exact scenario was talked about....that PMs would decline even though there is still printing happening....it was concluded that this may well be the last buying opportunity before the BIG REVEAL!!
for me, i have plenty of dry powder and am anxiously awaiting another buying point. hopefully it will be near one of my past points in the $1100 range....then I will wait again. why? hopefully, i have time on my side. i am young, have a great education, great job, awesome family, hard assets (PMs, property, guns/ammo, food, water, shelter) that are all paid for...i have debts too, but it is all debts i can walk away from thanks to the .fed.
alll of this other 'stuff' is just chatter and the means to the end.....that is all, the end will still be the same.
i suggest that if you have any doubts, please read some old articles and comments, realize what is happening and what will happen, and prepare accordingly. God Bless Us.
Didn't this happen in 2008 already?
Perhaps we'll just see another upward leg.
I would prefer another leg in fact. It's been a short time since I started saving in gold. Another leg would give me a chance to short paper gold, and prepare some dry powder for the final event.
Right now I don't feel confident to short paper gold. I think FOFOA is right in his fundamental analisys, but when it comes to timing he admits to be just guessing.
... because they read ZH
"biggest rip your face off levered short squeeze seen in the history of the yellow metal" I for one, can't wait. And after they get their faces ripped off, I'll piss on them. F'n criminals.
My personal opinion is that gold is going down in price as measured by FRNs. But I'm not going to play the shorts game; that's for muppets. And I'll be perfectly happy to be wrong about the price trend while watching the shorts howl.
How do you know the price of gold? I'm still waiting for a gold market to emerge in order to find out.
are you just naive?
Yeah, I'm with ya - too bad that when the shitheels on the naked short side of this equation get their fucking heads ripped off its going to be to the benefit of the shitheel bankers who've used this opportunity (and so many, many others) to loot the system to their benefit, without consequence, just the undying admiration of the toady fucks at CNBC and, thanks to the 'aw shucks, nothin we can do' fucking SEC and CFTC, always seem to escape any fucking penalties, rotten fuckhead criminals that they are.
T here is no naked short side of this equation. You really should try to remember this simple concept; there are no naked shorts in the futures markets; it's a term that comes from the stock market.
Really, so if I'm a hedge fund and I sell futures contracts and I don't hold the underlying, I'm not naked short? There's a difference between having somebody else taking the long side of a paper contract, and the seller actually having the means to deliver. And it's exactly the same as in the stock market - I'm naked short if I sell call options on an equity without holding a position in the underlying equity.
And to reiterate the point above, what matters is WHO's SHORT, as well as HOW MANY short positions there are. It's a concentrated short commitment by the hedge funds, with the RULE-MAKING, EXCHANGE-OWNING BULLION BANKS getting damn-near net long that matters. And again, do you really think those hedge funds have the gold, if the Bullion Banks who have a history of changing the rules to suit there purposes, get net long and then change it to a 'must-deliver, or we take your house, your car, your wife and your kids as collateral' exchange?
The net position of the four largest traders, which we can assume are all bullion banks, on 14 May was long for the first time for as long as records are available, shown in the chart below.
oppss. cant post chart - however it is exact opposite of tylers - i presume it reflects the fact that while hedgies are making a short bet, others are providing liquidity to the market and taking the other side ... well so far hedgies have been able to pick up pennies in front of the steamroller , even a nickle once in awhile ... will see what happens next; one thing seems certain, exit doors are closed. Couple this with Soros bet on junior miners, Hong Kong Commodity exchange closing, ABN AMRO not delivering on contracts and one get the picture ... good luck to the suckers they might need it :)
Although contracts call for physical delivery, under the law, contracts can be breached and the remedy is monetary damages (payable in FIAT). Therefore, the futures market is effectively a cash-settled market. If too many longs hold out for physical delivery, and the warehouse doesn't have enough to effect settlement, the first resort is for the shorts (who get to keep the cash) to purchase physical in the spot market for delivery. If, for some freakish reason, spot gold isn't available, a default results (eventually) in the long party receiving FIAT cash in the form of money damages.
if your gambling with a bank youre a sheep. If the bank gets enough sheep together in a direction its a roundup. roundups will find their way to the slaughterhouse. The sheep are in the coral now and the path is getting tight and there is a thumpung sound ahead.
Gold finished down marginally today, but was healthy on the week.
http://bullandbearmash.com/chart/spot-gold-daily-shows-sold-wave-4-move/
Recent double bottom around 1320 should hold until wave 4 up completes - should see move back up to 1475 - and it may be a slow process.
Short squeeze - sure looks like it - guess we'll find out soon.
Elliot-wave nonsense has no descriptive value of the past or future of price charts.
Elliott wave sure helped identify the recent fall. Just saying.
Did notice there were no dollar numbers attached to this as well. We know the AMOUNT of gold (paltry) so any info on "liquidity at play" strikes me as a big deal. Is the CASH at ten to one short?
no it didn't. The giant drop in price told you about the fall. Otherwise Elliot waves had nothing to say if it would be up or down or how far up or down or when to you or anyone else.
Why talk about technicals? They mean absolutely nothing in a rigged casino. The price won't go up until all vaulted gold is gone. When this happens, the true rip-your-face-off moment will have arrived. What's the location of Jamie's bugout island?
Time will tell. Price move up process (as opposed to an event) should unfold over the next few months.
I'm confused about what the chart is showing. For every short contract isn't there a corresponding long?
depends on trade vs initial contracts (open interest). if you and I each write 10 contracts and that's all there is, open interest is 20, but if it's traded a million times a day that will reflect in volume instead of open interest.
NO. for every short contract there's a long contract. period. you can actually educate yourself on this issue if you want to. there are books about the futures market, etc.
Then I guess the cot is always at an even zero line no matter who trades what.
Seriously, your dumbfuck name is so far off from what you write it's hiliarious.
Precious metals are like nudist colonies, being naked is normal. Sadly, only the fattest (JPM, et al) go that way.
TPTB use naked shorting to manipulate the PM markets. They're selling paper with no backing into the market. Andrew McGuire explains it, excerpted here: http://www.deepcapture.com/tag/commodity-futures-trading-commission/
Basically, they naked short into the market. If longs don't buy, then the price goes down, and down until it catches a bid. At that point, a long buys a contract that has zero backing by real PM, so god forbid that he stand for delivery with more than 1% of the other longs, or COMEX implodes.
There are likely some smaller players, having seen the downward momentum in gold, piling in, hoping to pick up a few pennies from the manipulation of JPM et al. When it gets this lopsided, though, the data is sending you a couple messages: one, someone really, really wants the price of gold down and has been writing shorts like crazy to make it happen, and two, to keep that happening, they'll have to do even more shorting. Given that we're already at a record level, that's going to look strange. Finally, eventually someone will start buying, putting upward pressure on pricing, and suddenly those naked shorts start costing the short-er real money, so they cover, which drives the price up more, and triggers a feedback loop. Hence insane volatility and face-ripping.
Of course JPM has pockets backed by the Fed, but each PM takedown via shorts makes the manipulation more and more apparent, and you get the point where no one plays and the phys/paper price diverges. It's doubtful they can play this game much longer, and one surprise move (say, triggered by a Japanese crisis) could launch gold and implode the shorts in a major way.
Thank you.
So it does look like we're very close to a point of no return similar to the mid-april smackdown. I.e. a point at which the only way to prevent a short squeeze is doing a major smackdown that breaks technical levels below previous major support.
That's a good possibility. If that happens, Ill be ready to add to my long physical position.
not this time amigo - it has been invested too much time, effort and capital to reach this point - the fruit is ripe!
the hedgies might wish for another chance but from the looks of it i doubt it - will see ...
Are Benny boy and his friends really conscious that withdrawing support from the paper market will lead to hyperinflation?
If they're delluded into thinking they're saving the world, perhaps they're delluded into thinking gold will just go away and stop exposing their scam.
Interesting. Ran into this as I began research on this allegation.
http://thefundamentalview.blogspot.com/2012/04/who-is-andrew-maguire-i-m...
Still digging...
Won't implosion of the COMEX require longs to take delivery in such volumes that the COMEX runs short of physical? What percentage of longs are trading on margin and hence won't take delivery?
the thing about this country is the vast pool of fools with saved up money with a gamblers streak in them. There is alway fresh meat walking into the casino.
seek, above, hits on some very salient points, but, one must take into account what is really happening, not what appears to be ripe for a short squeeze.
Forget about price for a moment, and think more in terms of spread, and Professor Fekete's brilliant analysis of permanent gold backwardation, entirely postulated on a negative gold basis (which we currently are experiencing, i.e., the difference between cash gold and the nearest futures price is negative, and, if Jim willie is correct, that cash gold price being a lot closer to $1500 to $1800 and possibly higher, the backwardation is already severe) and the ultimate implosion of not just the paper gold market but the entire, global financial system of payments.
See here: http://www.professorfekete.com/articles/AEFWhoSaidDragon.pdf
and more, here: http://www.professorfekete.com/articles/AEFTheDailyBellinterview2013.pdf
I've been trying to wrap my head around economics for a long time, but mostly the past six years and Professor Fekete and his New Austrian School has provided the ultimate answers. It gets very deep and far too long for this post, but Adam Smith was ultimately correct in his real bills expostulation, one which we are eventually bound to revisit.
Forget the inflationists; they simply don't see the larger picture, even as Bernanke and the Fed - neo-Keynesians at best, and fatally-flawed at worst are leading the world down a path of capital destruction, either by plan, or, more likely, due to ignorance.
Once one begins to understand the nuanced differences between price and spread, and their miplacements, the resultant capital destruction and devolution into a bottomless pit of deflation, ending in barter, is the logical conclusion of QE, ZIRP and the entirety of flawed Keynesian doctrines.
I may not be able to explain this all in as precise a way as Professor Fekete (who is 80 and we should all wish him good health and a long life), but I do believe he has it knocked and thus has provided a blueprint for everyone to follow if eventual ruination of the global financial system is in the cards, which, almost everyone around these parts - the ZH threads - agrees is an eventuality.
Education is our best defense and offense against not only the banksters, but the politicians and their corrupt government as well. Knowledge of economics will trump consumerism, reflation attempts and all the noise promulgated by the elites and their bogus financial news media, every time.
Good luck to all. Semper fidelis.
FreeNew Energy:
Kudos for highlighting the work of Dr. Fekete and the New Austrian School, I believe the answer does lie in Gold/Silver coupled with the use of Adam Smith's Real Bills. Simply returning to a Gold-only economic standard wouldn't provide enough market liquidity/elasticity.
Time for us to cut out the parasitic cancer intermediary central bankers that suck the life out of humanity.
SHould be required reading for all ZHer's - check out the links above.
HIGHLY RECOMMENDED
Yes there is. But Tyler writes for an audience that contains a large number of people who know nothing about the futures market so he can make exciting headlines like this and get people all wound up; it's called jounalism. you get more page views; etc. etc.
Eh, I think the point being that it's the "Managed Money" that they're talking about who've increased their short positions.
Some animated weekend humor... http://www.youtube.com/watch?v=yc00tDqAJO4&feature=player_embedded
I laughed.
I thought it was good, but it won't make anyone angry.
thought it was funny as well. Sent it earlier to the tips address here for friday humor.
This all begs the following questions:
1.) Who holds the short positions?
2.) What do they know is coming down the pike?
Could it be that they see the writing on the wall with JGBs? When those blow up, institutional money will be high tailing it for the temporary safety of the USD, thus pushing gold prices down?
Wait for Buffet to say something, he's usually the one that the media uses to spread the buy/sell message to the masses.
Did you mean Soros? He's saying buy/sell turning around all the time, looks like schizo to me.
not in good ol merica. They listen to Buffett cause it reminds them of home town buffett and they got lots of gravy. They like them some gravy n investin!
Not schizo. Just trading.
He trades some, but he's obviously not doing everything he's talking.
For example, I doubt he's sold a single ounce of gold. Ever.
An earlier article shows gold slams up when they're forced to cover, slams up a lot, so historically this is a mistaken extreme to be a part of.
I'm positioned well for the upswing and if it goes down I'll buy more metals in hand.
If you can get them. Banks are low in stock for physical.
By now it looks like I'm shilling for silvergoldbull.com but to be honest while some items went out of stock and STAYED that way, I got a fill of silver maples in under 24 hr to clear payment & have a tracking number for my box. I expect it within 2 business days. I don't even bother with my bank: they'll do it but they will charge too much. For gold back at 1200/oz it was only 8% premium but at this time I wouldn't push my luck.
I may be totally wrong since I don't follow forex/carry trades closely, but my suspicion would be that the institutional money will be more worried about carry trades blowing up -- and when that happens they have to liquidate the asset they bought with the carry-trade Yen and repurchase Yen to cover the trade. I don't think USD is guaranteed to go up in this scenario, and if fact it could blow up plenty of non-Yen denominated markets.
Hopefully Yen Cross or someone more knowledgable will chime in on this, I think it's a critical question.
Whoever they are, do you REALLY fucking think they're more in the know than the fucking FED and their shitheel 'I'm richer than you' bullion bank proxies? Fuck, what planet have you been living on?
Hedge funds haven't even beat an index fund of late - and are charging their rich muppets handily - don't presume the hedge fund managers know what they're doing.
Either that or it's permabear slaughter time, then an old fashioned blow off top for US equities ala Japan, then a real bear can begin. I'm out of gold entirely for now. Silver is looking extremely vulnerable, it will be interesting to see what happens if/when it tests the $20 support.
It already has tested $20.
The true value is approx $5 per ounce. If it goes below that, I will stop digging it out of my backyard.
Haha, it appears you should have explained the joke- although if you explain it, I suppose it won't be funny anymore.
Known to some as the "Short and Curly Squeeze"
One thing that comes to mind is that should the squeeze take place then associated turmoil both economically and socially may not necessarily result in huge profits. It is not certain that prices would rise initially and continue to rise.
Long term prices will rise assuming you are still able to trade Gold.
I can't fathom why you're carrying three downvotes. I completely agree, when things break, in fact, it's likely we'll see (as we have several other times in the past five years) a steep drop in prices as liquidations to cover margin calls, etc, happen, and as free cash dries up and there's too little cash chasing too many assets.
Anyone in AU really needs to be prepared to see some crazy, crazy pricing in both directions during the "main event" and have strong enough hands to not panic and sell (high or low!) when this happens.
seek, you of course are completely correct.
NO ONE will get my gold, except our kid...
Are these shorts of physical gold or shorts of pieces of paper claiming to represent gold? With the paper and phys markets totally disconnected, this is not a nitpicky question.
I don't think anybody gives a shit anymore about COMEX price. In fact, I'd even make the conjecture that those shorts are the government's. An effort to push people away from gold in the event of an economic calamity such as a bank or vault run. And since the miners are selling direct to bullion banks, does COMEX even matter? In my opinion, its not that gold isn't worth anything in terms of willingness to pay that explains the short position accumulating. Rather its that no country (government) can afford to have the illusion of value in currency revealed. And they'll just keep rolling those front month positions over and over and over, like its the price they have to pay to keep the illusion cloaked. As solvency (public and private) continue to deteriorate under a depreciating currency, the tail risks offering enormous impacts rise. The short position, is the government's and banker's protection against their own economic ruin. For if gold were to spike, just say, even $400 and for whatever reason, the illusion is exposed, and the truth is revealed and human action quickly takes over - to "shoot first and ask questions later".
The COMEX price is irrelevant, Its irrelevant because if the market has to put gold it doesn't have to the market, it will pay its short position in cash - just...like...the Dutch. And nobody would really care which way its reads on COT. Besides. I'm almost certain the Turks, the Saudi's the Chinese, the Indians throughout the course of their real exchanges in commodities and finished goods, couldn't care less what COMEX posts, because, in the end, the real exchange (gold for other stuff) is the only exchange that matters.
I'm finding it very difficult to get my head around the concept of naked short-sellers of gold never (apparently) having to cover their sales. It seems they are rolling their contracts over indefinitely. Surely that can only be possible if they believe they have access to unlimited funds from the Federal Reserve (in the US). Because if they don't have such access they will assuredly go broke when they eventually do have to cover. When that time comes, the price will go up vertically. (I'm mindful of the rule about short-selling - from Jesse Livermore, it might have been - "He who sells what isn't his'n, must buy it back or go to prison." The present gold-sellers are acting as though the rule has been repealed. And who knows? Maybe it has, for them.)
For me, gold is either a permanent store of value or it's not. When the users of paper currencies have faith that they (the currencies) will hold their values, then there is no need for gold, and its market value will logically fall towards zero. When the users of paper currencies lose their faith in them as a store of value, and turn to gold (because of its relative rarity) as the most practical alternative, then its market value will logically rise exponentially. Read one of Wikipedia's reports on historical hyper-inflation. If my logic holds, then gold's market value at any specific moment is a matter of chance, and to predict it is meaningless.
I choose to buy Gold because it is an act of rebellion against deficit spending, debt, and bailing out Wall Street.
The sooner I get all my assets into cash under the matterss (fire safe) and precious metals (fire safe again quarded by a .45 and a 17 round 9 mm and Mossberg loaded with alternate pellet and slug ammo) the sooner I defeat their bullshit, BITCHEZ!
I don't care if the price goes to Zero; it won't stay there for long, and I will milk the milk out of the teat to KILL THE BEAST!
gold is a vote agoint the banks for sure. It's not really a rebellion but more the way people on this planet are suppose to save their money. For whatever reason it is truth and freedom emanating from that shiny metal. Fredom from bankers lies and opression.
Here it comes. This is THE going out of business liquidation sale of a lifetime. EVERYTHING MUST GO! I don't know about the shorts' prayers, and don't give much of a shit really. My prayers are being answered though.
What is interesting is that the shorts are growing but the price is holding.
Also, hedge funds short, commercials getting longer.
I wonder....
From what I have read re COT, the hedge fund guys usually go the wrong way...it is the commercials that get it right..so going long might be the smart play now....that said I think the $US will go up some more due to the Yen carry trade. This will result, of course, in downard pressure on the p.o.g. Gold miners seem to have bottomed however and should be a good bet going forward imho. If the dire predictions regarding the derivatives market in Europe come true then gold could go through the roof and the markets could collapse...I doubt that the EU will let this happen but, looking at what just happened in Japan, I am not sure they are as in control of the situation as they should be......could be an interesting week next week...some opportunities may arise with the TSX being open (I think) on Monday while the American exchanges are closed........all imho.
You are right, gold miners look relatively stronger, so if there is another washout in gold futures, I'll buy some leveraged miner's etf's when it stabilizes.
'From what I have read re COT, the hedge fund guys usually go the wrong way...it is the commercials that get it right.'
Quite right. And the COT report shows that commercials are long 133,276 and short 165,513 contracts ... for a NET SHORT position of 32,237 contracts by the 'smart money.'
http://www.cftc.gov/dea/options/other_sof.htm
DOH ... two weeks ago, I couldn't spell speculator. Now I are one!
If the comex, et al, doesn't shift to a cash & carry market then we may well see this phony price signal crash. That will be the worst time to part with the real metal. When the cash price for physical re-emerges it will be multiples higher than today. Many multiples.
I was at the waste show in New Orleans this week...at the Hilton on Poydras it dawned on me who your Ignatius was...
No luckydogs from paradise or scenic cruisers for me...LOL
"Hotdogs, Ladies? 12" of Paradise!"
You're on to me. A Confederacy of Dunces may be the funniest book in the English language.
Re-read it all the time -- still waiting for the leading man to survive the role on screen.
And the stock market is the POLAR OPPOSITE of this where every man and his dog is long.
Long Dog ... great pic
We all saw this coming, as for the outcome it is no surprise. Expect volatility, expect bulls to make money, expect bears to make money, expect pigs to be slaughtered, expect a measured response from the rational.
This shit wont stain.
Next stop: Just close all Gold markets. "we can't short it anymore Jamie. we're short more than has ever been in existence or ever will!" "Doh...ok, tell bitch ben to close the damn thing!" "but but the Chinese!!!" "DID you hear anything to the contrary!"
....and scene.
I know, the institutions are long...etc etc. my point is, is this is all bullshit, ad nauseum, and as much as this article feels like 2+2=4. I'm room 101'nd. It equals 5...forever...see you in 2022 where gold gets a fucking bid. even getting sick of "Fuck You B...." it no longer has that same panache. Used to be able to "feel" when a market was near the end of a correction because I was almost physically ill. That was four months ago. 40 years in the "markets". Gold could go up $200 tuesday, and the S/P down 200 and I don't give shit. It's like caring what bitch ben's grocery bill is every week and betting on that. Life is whatever he and his fucks want it to be. I will always, though, always, ask this: How did America let it get this way. The United Discrace. pissing in the wind for over 100 years....
I'm with you, I know that same feeling. It's not a market, is a manipulation upon a manipulation. However, you can not give up, just stay long physical gold and be patient.
+1368 . Sweet rant ....best one i've seen anywhere today ! u had me at '...he and his fucks...' !
Just say the magic words: "Tiocfaidh ar la, bitchez!"
O.K., I'm ready, just waiting for the short positions to dump the physical price down to $1,300 or so - so I can buy four more ounces at a discounted price and kick those assholes in the nuts. $2,000/ounce here we come!
I wonder if some of these short "hedge funds" are dummy muppets whose purpose is to absorb the shorts of the commercials. When they blow up, whose money will be lost? Who is providing them the leverage?
And how have hedge funds performed over the past year???
The shorts have got to be hurting. Gold is up about $50.00 off it's May 20th low. (also had that nasty spike up 1413.83)
Those bozos are all levered up to. hehe.
Should I laugh or cry? I'm not that emotionally comitted either way. One thing I am sure of is I'm not naive enough to think they're betting with their own money.
COG - Moshiach - The New Normal - Youtube audio track http://youtu.be/4tpisLP6GDE
Lyrics:
I’ve been waiting and watching and it won’t be long
I’ve been living and learning and it won’t be long
I have come to my senses and it won’t be long
Brace yourself companeiro’s the road is long
I’ve been waiting and watching and it won’t be long
I’ve been living and learning and it won’t be long
I have come to my senses and it won’t be long
Brace yourself companeiro’s the road is long,
We must be strong
Time has come for those to pay
I’ve been waiting and watching and it won’t be long
I’ve been living and learning and it won’t be long
I have come to my senses and it won’t be long
Brace yourself companeiro’s the road is long
Softly, I’m empty
Softly, I’m fading away
The recent paper gold market manipulation is a huge gift to the "connected rich". The predators-that-be create fiat at zero cost and short the paper market in spades to lower the price so they and their connected buddies can load up on physical at bargain basement prices. Of course they know their buddies are not the only buyers, so are residents of India and China, plus a tiny minority of wise westerners.
Some here in ZH make the mistake of assuming the manipulators lose money by holding all these short positions. The truth is, so far, their powers of manipulation let them earn profit by crashing the paper gold price, then liquidating their positions for a profit, then loading up and replaying the game over and over again.
What this article and other wise people know is... "so far" is not equal to "indefinitely". The recent action has the smell of a setup for a phase change of some kind in the gold or precious metals market. It could be as simple as giving a huge gift (cheap physical) to the manipulators themselves and their connected rich buddies. But it also could very well be a setup for repeating the theft of physical gold from westerners as practiced in the 1930s. Or it could well be a setup for a collapse in paper currencies (watch the yen for possibly the leading example) and replacement by [probably partial] gold backing. Or it could be something even more diabolical that we haven't figured out yet. They certainly are diabolical, those predators.
One important fact to remember is this. There is nobody monitoring the creators of fiat. Nobody is keeping them "honest" (as if that term can even apply to fiat pushers). They can create trillions of fiat that are not loans, that do not ever need to be paid back, not even at 0% interest. And nobody will know either, because everyone pretending to be responsible for such things is part of the scam.
We all know some huge event is coming, and not only the certain financial collapse. They're working it, and this is part of their plan. Too bad we don't know exactly what they have in mind yet.
Levered shorts have to cover at some point. Any trade is profitable if you hold it long enough.
I guess, if I was sociopatic(sociopathic) Bitchez> enough, pounding down paper for a better physical buy-in, could be feasable.
The whole point of trading, even if you're using a hedging strategy, is to maximize profits within your risk profile. Then again, if *I was a billionaire, I would be leasing gold to the hedgies at astronomical rates for the insurance/vaulting fees.
* I being Nostradamus
And yet ANOTHER reason why 9/11 was funny....
I know what they have in mind.
Their interests, their survival, at the expense of others, at all cost.
+1000...... @ honestann..."The truth is, so far, their powers of manipulation let them earn profit by crashing the paper gold price, then liquidating their positions for a profit, then loading up and replaying the game over and over again." Thank you. This is exactly what the fuck the are doing, have been doing, and will continue to do with unlimited funds from the fed.
Up another 1000. Who is to say those shorting paper are not buying bullion. And once they have it all, will they sell it. Some worls of art are worth millions but won't be sold. They will be looked at a admired for their rarity.
+1000
So long as leveraged paper rules price of physical -it is difficult to see what will lead to covering and a short squeeze. When you can create more paper gold out of thin air - where will the pressure come from.
what did i do?
i bought more metal.
even a not-savvy economic idiot like myself can see this economic system is going to crash and burn.
Manipulation? GATA lost, as they could not offer proof as far as "manipulation". Does anyone on ZH have some evidence? If you do, it's too late for GATA short of a Rule of Law (for appeal) issue and you're a jackass for not submitting amicus curiae.
We're living through an incredible time period, some ex-ZH'ers made some really bad calls years ago, and thankfully they're gone (confirmation bias). Technicals no longer matter in this era of monetary experimentation.
Those who got in in 2009 made a truckload of money, if you missed it, oh well (you should have read ZH disclaimer). If you were in before the crash, you're even (kind of). The RISK is on now, as no one for certainty can say "when", as the ride is certainly not going to last forever thanks to an FASB-157 rally of epic proprtions. Is gold the answer? Anyone claiming they know is full of shit.
The Fed, Japan, China, The U.S. and Europe all have issues, but for YEARS, ZH crew have underestimated time and again how long this can go on, but I'm sure "this time it's different" right?
I buy gold out of HATRED and SPITE. I don't care if it goes to zero, and I don't care if I lose money. Plus, do you really think anyone here wants to listen to you suck Ben Bernanke's cock? Do you? I mean, it's technically a free country, so it's your choice and your business, but you should probably know that it just makes you look like a standard-issue, tasseled-loafer-wearing, Saturday-morning-tee-time-loving douchebag and coward. Now, why don't you just run outside and lead your fellow McMansionites in a rousing cheer of "USA! USA!"? You know you want to...
All I know is:
Holding PM in hand=Good
No PM in hand= Not Good
Keep Stackin!!
I regret buying that time share condo. I regret putting money into my 401K. I regret holding on to INTC. I have yet to regret buying and holding physical PM though I guess it could happen.
Which is a good political stance but lousy ivestment reasoning. I am a very big supporter of Zero Hedge. Been reading it for years prior to signing on the dotted line. But Northeaster makes a valid comment and get bashed to hell for it. Critical thinking would dictate that one weigh what he is saying giving it due consideration. It is the differentiating opinins through which finds the answer that best fits their own objectives/path.
IF you bought gold in 2009 you have done exceedingly well. IF you sold at the top you did wonderful. Now you are a faced with the question, "Do you have a buying oppourtunity or are you chasing a falling knife."
I personally think some silver miners could be a good "investment" here. But remember, when the market took the big dump, gold went right along with it. I am currently holding some small short positions that I am losing on because if I look I look at a most charts dating back to 1974 I see parabola and triple tops everywhere and I have to ask myself, how long can the gravity be ignored.
The only future I can predict is that there is very big money out there, money we can not comprehend that fixes the price of everything, libor, oil, gold. I can't second guess what they will do. But I do understand greed. And someone is either gonna crash the system through greed or through making a very simple mistake.
I believe Zero Hedges posts are very educational and for the most part spot on. But they are fighting the fed and other central banks whom we can not predict ability to continue the ponzi. So as with everything timing is everything. And with engaging in criminal activity I know no one that can do that with a consistent degree of accuracy.
Thank you NOrthEaster for your thoughts. I will weight them carefully.
Which is a good political stance but lousy ivestment reasoning. I am a very big supporter of Zero Hedge. Been reading it for years prior to signing on the dotted line. But Northeaster makes a valid comment and get bashed to hell for it. Critical thinking would dictate that one weigh what he is saying giving it due consideration. It is the differentiating opinions through which one finds the answer that best fits their own objectives/path.
IF you bought gold in 2009 you have done exceedingly well. IF you sold at the top you did wonderful. Now you are a faced with the question, "Do you have a buying oppourtunity or are you chasing a falling knife."
I personally think some silver miners could be a good "investment" here. But remember, when the market took the big dump, gold went right along with it. I am currently holding some small short positions that I am losing on because if I look at most charts dating back to 1974 I see parabola and triple tops everywhere and I have to ask myself, how long can the gravity be ignored.
The only future I can predict is that there is very big money out there, money we can not comprehend that fixes the price of everything, libor, oil, gold. I can't second guess what they will do. But I do understand greed. And someone is either gonna crash the system through greed or through making a very simple mistake.
I believe Zero Hedges posts are very educational and for the most part spot on. But they are fighting the fed and other central banks whom we can not predict ability to continue the ponzi. So as with everything timing is everything. And without engaging in criminal activity I know no one that can do that with a consistent degree of accuracy.
Thank you NOrthEaster for your thoughts. I will weight them carefully.
So. Stay long stocks, bonds? Since 1974 you continue to lose at a game that you self admit you can't ever win at!! If stocks, bonds, commodities are all going up everybody wins AND loses since in real terms, nothings changed. just the supply of money. Gold is not an investment (tired of hearing how wonderful people did if they were long or short at such and such time of the fucking century). ITS A HEDGE. GOLD IS A HEDGE against price inflation!! It can never be an investment becuase it doesn't pay you to wait! So, why even mention the word? Gold never changes EVER in value, only price as measured by fiat, and it is now becoming clear to me that there are two groups of ZH'ers - 1 group understands this, and the other group, such as yourself, do not understand the difference between value in exchange, and price (as an ascription by fiat denominattion - $900, $100, $2000, whatever). Lastly, lets say northeaster is right, and gold price (as defined by COMEX), falls to $200. Does that mean those of us who bought at 1500 are losers? Dying to know the answer to that. And second, do you really think gold will be accessible at $200 - that is, do you think you will actually be able to purchase any? How you answer those questions will determine whether you are ZH1, or ZH2.
This is not correct. Gold has been a horrible hedge against inflation. Rather, gold is money. Gold does well during deflation. Moreover, it's incorrect to say that gold is not an investement because "it doesn't pay you to wait!" Gold, like any asset, can indeed generate a yield. Look at what the large holders of gold do: they lease it out. If you hold gold, you can lend it out and earn a yield. Or you can sell it, lend the cash out, collect a yield, and buy the gold back. Or you can write calls against your gold. There are a number of ways to squeeze a yield out of gold, if you wish to do so.
If you were in before the crash, you're even (kind of). "kind of"? wtf does that mean? and relative to what? SnP, Price of property? if you're going to make a quantity claim of any kind (especially the price of fucking gold you dip shit), then you have to have something real to compare it to in exchange. At least a Zh'er knows and understands that much! Ya know, I can't stand you douche bags that come on here that lean on hind sight and claim emphatically "see look all you gold bugs are fucked again, and still....". I mean, fuck you're brilliant aren't you? IN all these gold posts over the last year I have seen few ZH'ers prophesizing "gold to the moon". I see infinitely more $USD going to zero", or, massive price deflation, or, hyper inflation. Better still, I've seen some try to peg the current price of silver against a carton of eggs, or, the relatively constant exchange rate gold has to an acre of arable land, etc. You don't measure you're gold in dollars, you measure it in ounces, and what those ounces fetch you in exchange (in a fere and unfettered market). And finally the statement: The Fed, Japan, China, The U.S. and Europe all have issues (fuck really!! Issues! - they got issues - fuck i'm so enlightened), but for YEARS, ZH crew have underestimated time and again how long this can go on, but I'm sure "this time it's different" right?, only serves to demonstrate one thing and only one - just how much more ZH'ers are informed and how fucking ignorant and retarded you are - but, this time its different right? FOULLPOS
Ah, I see, the risk is on so I should do what Ben and Obama want.
I'm sorry but I'll do exactly the opposite: keep stacking and do my part to help create a drop in consumption and credit growth (unless I can buy PMs on credit).
just like the banksters finance both sides in a war. the manipulators play both sides of the market. buying and selling to affiliates, where no delivery will need to occur, and the fiat gains and losses are in house. the sheer volume of this phony paper trading skews the price signal that determines the physical market spot. and the real traders get suckerpunched.
Thats why the game is up when holders of long contracts start taking delivery... this is happening now.. and marks the end game for Comex and the beginning of the new phase of the gold bull... final target ? anyone's guess but multiples of the current price.
I think the squeeze will take gold to $1530-1640 range.
I'm thinking the market collapses at the 1375 to 1390 range...say...soon..but I'm just guessing..
Do all the xau shorts work for the U.S.Treasury? The only way they're getting out alive, is if they're printing 'Monopoly Money'.
Just thinking aloud...massive paper shorts to cover massive physical buys?
indeed. No way to track the physical sources, amounts, either. Isn't that what big bullion dealers do anyhow? We call that 'hedging' don't we?
The manipulators will always win the card game but when their casino burns down that will be the end of them.
Tricks work and then one day they cease to work or impress.
If the Hunt Brothers cornered the market then JPM controls, spanks and outright manipulates the market.
It was a short squeeze and the exchange changed the rules when the shorts got caught with their pants down.
Amen I was long silver when the Hunt brother got screwed. Big lesson there. Never, never, never, underestimate the lengths the government will go to fuck you up! Everyday Banks and congressmen are breaking the law and it means absolutely nothing. When the time comes they will come get your gold, your ira's, you savings accounts, your children. they will own the farms and we will all be debt slaves feeding at the trough of food kitchens. And who is to blame? We are!
There's a lot of gold in the world, more than you think.
A quick google search finds this: A total of 171,300 tonnes of gold have been mined in human history, according to GFMS as of 2011.[2] This is roughly equivalent to 5.5 billion troy ounces or, in terms of volume, about 8876 m3, or a cube 20.7 m on a side. The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry. So, I call bullshit on your claim that "there is a lot of gold around." There aint even an ounce for every man woman and child on the planet. So, that don't amount to fuck.....all.
It doesn't matter how much gold there is. Any quantity of gold is sufficient for our monetary needs.
The law will be invoked to confiscate the physical from "hoarders" so that favored cronies can cover their shorts. Nobody should surrender a single ounce...
Not enough PMs in the US to bother. Different times then the 1930's: no one would surrender a gram if it were demanded and TPTB know it.
A bullion storage story to share with my ZH friends:
Decided to visit my storage facility (somewhere in N.Am.). Was amazed at the world map of clients. Besides the obvious ones, I was amazed at the pushpins of unlikely places:
Singapore, China, Russia, Israel, S.Afr., Chile, Panama, UK, Germany, Austria, Australia, Switzerland, M.E. oil giants, Greece, Holland...
It seems that the rich and bullion lovers are gearing up with ever more bullion.
Given the gubmint fuck-trolls on here, you'll forgive me if I'm not more specific on the location, since the point is that (a) you don't have to go offshore, and (b) the smart ones are hedging their bets in diverse global localles. Since NO single place is 100% safe for every scenario.
Fears of confiscation in the US are overblown. Too much squeeze for too little juice. There are far easier targets like 401ks and in any case, the PMs are on a different continent.
You make an excellent point Room 101. I think it's about moar taxation on self preservation.( the tax rate on collectibles is higher than capital gains) 28-9%? I'm rusty
.gov is a leech. It want's you productive, just enough to feed your spawn. >
Living in Asia, I am lucky to have ours stored in a safety deposit box in Singapore.
The motherfuckers can come pry it out of my cold, dead hands down there, if they want.
Hold and defend if you are in the USSA, this boy will come to the patriots side if and when necessary......
Safety deposit boxes aren't safe at all. California confiscates contents of safety deposit boxes as abandonned property if the box hasn't been accessed in a mere three years:
http://abcnews.go.com/GMA/story?id=4832471&page=1
no +1 or -1 from me - only the obvious and oft-repeated warning that you own what's in your hands. If you take possession of gold then unhand it into another facility not under your control & supervision you take your risks. That's your choice.
Calling on China. If you ever wanted to screw the vampires of Wall Street for fun then place your $150 billion gold long now.
I dont think so.
That's the last thing I need now. I want the Chinese to join the shorts.
I prefer that the low prices continue until I'm done with my own shopping.
And George Soros is reportedly to have purchased $25M in junior miners' options, which would equate to a massive levered bet on any short squeeze.
Time will tell.
George Soros and-vs Warren Buffet/ "War of the G eriatriacs" Prequels available<
I'm not making fun of the Elderly. I'm jealous of the Elderly. They lived in a better time...
If you are in the group that puts out $100,000 on contracts on Gold, I guess the paper price means something.
It doesn't mean squat to me. I buy a few coins when I can. What the guy on the other side of the counter says the price is the only thing that matters.
The physical price for buying coins is ALWAYS higher than the paper price. That is the ONLY price that matters to alot of us.
I don't own stocks or 401s etc, so the paper price of Au/Ag means as much to me as what the DOW is doing.
You traders etc. Good luck.
Au/Ag is what you use AFTER the fall to convert to what ever comes next.
circa 2015.75 -2017ish
Junior Miners Bitchez!
http://www.youtube.com/watch?feature=player_detailpage&v=4pjSlIkNxXg#t=511s
For an explanation of what is happening, that was written months before the gold market dropped see this:
http://fofoa.blogspot.com/2012/07/fallacies-1-paper-gold-is-just-like.html
In the piece fofoa explains how the paper gold market has a natural tendency to fall and the only reason it has gone up at all can be found here:
http://fofoa.blogspot.com/2013/01/legs.html also written WAY before April 12 and 15.
You may not like fofoa because he does not think silver or miners will do well but if you are looking for explanations from an unbiased source from a guy who does not charge for his work and who never sends his blog pieces out...read these two articles. When you are done I'm guessing you will be more likely to buy DGLD than GLD.
If all this bores you just buy physical gold, that is really all he is saying...in his now 400 articles.
and no, I am not fofoa
I am not FOFOA either. But he writes very logical pieces and is arguably the top gold analyst in the world. He has long said that you do not have to understand or even agree with his Freegold thesis to benefit from the price reset of gold.
You will do very well no matter what you believe as long as you have physical gold in your own possession.
Very well.
> When you are done I'm guessing you will be more likely to buy DGLD than GLD.
By the time I'm done I'm sure gold will recover because each post has 24,528 words :-)
Executive summary: keep stacking.
Haha, go ahead, drop it under $1000. Hell, drop it to $400 again. See what happens. The end result will be China buys the entire hoarde in one fell swoop.
Cuff Link/style China wa(was)s projected to overtake the United Stated <GDP> in 2016.
China has mis'reported in a (ghost like) style. China is sitting on empty ships, cities, ghost cities,
How will china(RussiaStyle) manage that infrastructure> I'm all Ears
The Australian $ looks good to me. 2.75% .
Baltic Dry
First, they do not actually have the wealth to do that (as their supposed reserves serve as backing for their current currency), but even assuming they do, what's after that? They issue a gold-backed currency, allowing anyone to exchange goldyuan for what they tried so hard to accumulate? Or all of us should just trust that their currency is really exactly backed by what they claim to possess, because traditionally they are just so trustworthy? Or does the rest of the world just applaud them for having achieved what China wants, then the rest of the world just goes about business as usual without giving China or its gold a second thought? It's not like future scientists or inventors are going to be saying, "Gee, I have this great productive idea but I can't do anything because China has all the gold." Gold is irrelevant to most people, so that China might possess it all doesn't mean those who couldn't care less now will suddenly kowtow to the Commie Black dyed-hair crowd (ZH's resident astrophysicist Honestann can probably confirm that more light escapes from a Black Hole than from the scalp of a senior Chinese Communist Party Official.).
For China to "win" in the way you suggest seems a rather Pyrrhic Victory, or one of those Shakespearean "full of sound and fury, signifying nothing" things. Germany could probably buy all the gold in the world, too, but they don't because it would serve no practical purpose. India has more combined private and public gold than anyone. And that has done exactly what for them? They have one of the most corrupt governments in the world, a poor current account, one of the highest Qini coefficients in the world, 8% 10-year rates, and modern sanitation for only about one sixth of the populace.
I sense a kind of silly neo-patriotism or Sinophile streak.
I appreciate your vigor. You have some awesome stories to tell.
Silence chindit13 You made your point.
Nobody can buy all the gold in the world, not even Germany or China. This is because the vast majority of gold in the world is not for sale in exchange for any amount of FIAT. And it turns out the higher the bid, the less likely are sellers to part with it.
But the gold in Fort Knox is always available for sale. They sell it on the cheap because they're so generous.
Once China has all the gold from Fort Knox, interesting things will happen. To begin with, they don't give us their labor force anymore, since we can't pay them back. Think about a totally screwed West only by this account.
The USD reserves in China become worthless instantly. Think about what happens in the US at that point. But regardless, think about what is the new medium of exchange to obtain oil. It's not USD anymore. Now, who will obtain oil and who won't?