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Sprott: "Manipulation Of Gold By Central Banks Cannot Continue In 2014"

Tyler Durden's picture




 

With Deutsche Bank quitting the price-setting panel for gold and Bafin bearing down on the manipulators, Eric Sprott provides some more color on where the manipulation in the precious metals markets is underway (and when it will end)...

Submitted by Eric Sprott of Sprott Global Resource Investments,

Introduction

As we very well know, 2013 was a difficult but also puzzling year for precious metals investors. The price of gold, silver and their related equities declined by a significant amount while demand for physical bullion from emerging markets and their Central Banks was exceptionally strong.

A common argument that has been made to explain the precipitous decline of the price of precious metals in 2013 is of investors’ disenchantment with precious metals, which had been piling up in exchange traded products as a way for investors to gain exposure to the metals. Proponents of this theory point to the large declines in the total holdings of those ETFs as evidence of investors fleeing the precious metal trade. As shown in Figure 1, the price of both gold and silver suffered very significant declines throughout 2013. Therefore, if this explanation is correct, one would expect the total ETF holdings of both metals to be lower as well.

However, this is not the case. As shown in Figure 2 gold ETFs suffered large redemptions whereas silver ETFs saw their holdings remain more or less constant throughout the year, and this without any observable change in trading patterns in the two largest ETFs; GLD and SLV (Figure 3 shows the ratio of the trading values in the ETFs over time). If redemptions are a symptom of investors’ disenchantment with precious metals as an investment, shouldn’t silver have suffered the same fate as gold? Indeed it should have, but we think the reason silver ETFs were not raided like gold was that Central Banks do not have a silver supply problem, they have a gold problem. As we have argued before, the raiding of gold ETFs is bullish for gold because it reflects an imbalance in the physical market.1

Figure 1: Gold and Silver prices declined significantly in 2013
maag-01-2014-1.gif
 Source: Bloomberg

Figure 2: ETF Holdings - Troy oz (millions)
maag-01-2014-2.gif
Source: Bloomberg, tickers ETSITOTL & ETFGTOTL

In this article, we further argue that the April raid on gold and gold ETFs almost backfired by creating a tsunami of buying in India and increased demand to unsustainable levels. In May 2013 alone, Indians imported 162 tonnes2 of gold in a market where monthly global mine production is about 182 tonnes. A continuation of this trend, coupled with strong buying from other Emerging Markets and their Central Banks, would have been overwhelming. But, the response was swift. We suspect that, at the behest of Western Central Banks, the Reserve Bank of India reacted by enacting, in incremental steps, restrictive measures to prevent gold imports (See Figure 4 for a timeline of the major changes made by the Indian Government).3

Figure 3: Traded Value - Ratio of SLV to GLD
maag-01-2014-3.gif
Source: Bloomberg. Traded Value is calculated by taking the total trading volume for a quarter and multiplying it by the average price over that quarter. A ratio of 1 indicates that SLV traded as much, in $ terms, as GLD.

Figure 4: Efforts to Curb Indian Gold Imports
maag-01-2014-4.gif
Source: Bloomberg, Economic Times 

 

Supply and Demand Imbalances: The Indian Effect 

We have already discussed at length the supply and demand imbalance in an Open Letter to the World Gold Council, asking them to revise their methodology because it grossly understates the amount of demand coming from emerging markets.4 Our gold supply and demand table (Table 1) reflects the latest available data (2013 Q3 in most cases). World mine production, excluding Chinese and Russian production still stands at about 2,100 tonnes a year. Chinese net imports most likely exceeded 1,700 tonnes for 2013 (81% of world mine production) and demand from the rest of the world is rather stable.5

The overall picture has not changed much since our last article, with the exception of Indian imports. As of the second quarter of 2013, India had cumulative net gold imports of 551 tonnes, which annualizes to 1,102 tonnes.6 However, Q3 data shows net imports of only 31 tonnes (for a total of 582 tonnes YTD), which annualizes to 776 tonnes. 

This incredible loss of momentum for “official” gold imports was the result of concerted actions by the Reserve Bank of India and the Indian Government. While the “official” justification for those restrictions is the large Indian current account deficit, this argument makes little sense. According to government officials, Indian’s taste for gold and the corresponding imports worsens the country’s trade balance, worsens its current account deficit and puts downward pressure on their currency, the Rupee. 

But, without going into too many details, the classification of gold as a “good” in the trade balance is at best misleading. Since gold is more of an investment vehicle and is not “consumable” per se, it should instead be accounted for in the capital account of the balance of payments instead of the current account. Indeed, Switzerland, which is a large net importer of gold, reports its trade balance “without precious metals, precious stones and gems as well as art and antiques” to reflect fact that those are “investments” rather than consumption goods.9 In this case, why should India be any different and report their trade data excluding gold? To us, all the fuss about gold imports by the Indian Government is a red herring.

So, without the intervention in the Indian gold market, the shortage of gold would have wreaked havoc in the market, a situation that Western Central Banks could not tolerate.

 Table 1: World Gold Supply and Demand 2013, in Tonnes
maag-01-2014-5.gif 
Sources: GFMS data comes from the WGC’s “Gold Demand Trends” publications for 2013 Q1, Q2 & Q3. Chinese mine supply comes from the China Gold Association and is up to October 2013, the annualized number is a Sprott estimate.8 Russian mine supply comes from the Union of Gold Producers and is up to 2013 Q3. Chinese data is taken from the Hong Kong Census and Statistics Department and covers the period Jan.-Nov. 2013 and is annualized to account for the missing month. Changes in Central Bank gold reserves are taken from the IMF’s International Financial Statistics, as published on the World Gold Council’s website for 2013 Q1, Q2 & Q3 and include all international organizations as well as all central banks. Net imports for Thailand, Turkey and India come from the UN Comtrade database and include gold coins, scrap, powder, jewellery and other items made of gold. The data is for 2013 Q1, Q2 & Q3. ETFs data comes from GFMS as well.

 

Conclusion and Outlook for 2014

As demonstrated in our Open Letter to the World Gold Council, there was a large supply-demand imbalance in 2013. The evidence presented here suggests that the decline in the price of gold in mid-2013 and the subsequent raid of gold ETFs (but not silver ETFs) was engineered by Western Central Banks to help solve their physical gold supply problem. However, the resulting increase in Indian gold demand exacerbated the problem. The solution was to restrict Indians from importing gold by all means possible in order to help the Western Central Banks regain control of the gold market.

However, the rate of drain in gold ETFs cannot continue forever; at the current pace of 930 tonnes/year, there are less than two years of gold left in ETFs. Moreover, Indians have proved highly creative at finding ways around import restrictions.10 Smuggling is on the rise and will most likely increase as smugglers become more sophisticated. Overall, we believe that interest in physical gold from emerging markets will remain a driving force.

Besides, mine production is unlikely to grow, as reflected by the significant decrease in capital expenditures expected for the major gold producers (Figure 5).

Accordingly, we believe that the manipulation of gold prices by central banks, as demonstrated by the above analysis, cannot continue in 2014. Therefore, we expect substantial increases in the price of precious metals as the true shortages become obvious.

Figure 5: Capital Expenditures ($mm) - XAU Index Members
maag-01-2014-6.gif 
 Source: Bloomberg. Consensus analyst estimates are used for years 2013-2015.

 

P.S. Due to recent developments, we would also like to highlight some related media stories

Jan. 17, 2014: Germany’s top financial regulator said possible manipulation of currency rates and prices for precious metals is worse than the Libor-rigging scandal

Jan. 17, 2014: Deutsche quits gold price-setting as regulators investigate fix (Did the regulators ask them to?)

Dec. 13, 2013: Bafin Said to Interview Deutsche Bank Staff in Gold Probe

Nov. 26, 2013: U.K., German Regulators Scrutinize Gold, Silver Pricing

Sept. 9, 2013: Sprott Thoughts: A Leaky Fix

 

1 See, for example, “Redemptions in the GLD are, oddly enough, Bullish for Gold”.
2 http://in.reuters.com/article/2013/06/03/gold-india-imports-idINDEE95207H20130603
3 See “Do the Western Central Banks have any gold left?”. Sprott Asset Management LP, Markets at a Glance May 2013.
4 See the full article at: http://www.sprott.com/markets-at-a-glance/open-letter-to-the-world-gold-council/
5 As a reminder, because of our methodology which uses net imports as a proxy for total demand in countries that do not re-export gold, we exclude the “total industrial demand” estimate from the GFMS to avoid double counting. Thus, we underestimate total gold demand because we do not include industrial demand from the countries other than China, India, Turkey and Thailand.
6 As reported by the UN Comtrade Statistics. We use the total dollar amount reported and average quarterly prices to infer the total amount of gold imported and exported.
7 This is calculated by taking the total consumer demand for jewellery, coins and bars for 2013 Q1 & Q2 from table 10 of the WGC’s “Gold Demand Trends” and subtracting from it demand from the individual countries we have listed in the table (China/Hong Kong, India, Turkey, Russia and Thailand).
8 http://translate.google.ca/translate?hl=en&sl=zh-CN&u=http://www.cngold.org/&prev=/search%3Fq%3Dcngold.%26client%3Dsafari%26rls%3Den
9 See the Swiss Customs Administration website: http://www.ezv.admin.ch/themen/04096/04101/index.html?lang=en
10 See, for example: http://www.thestar.com/business/economy/2013/12/27/insatiable_appetite_for_gold_fuels_indias_smuggling_industry.html http://in.reuters.com/article/2013/12/03/india-gold-smuggling-idINDEE9B20HY20131203 http://articles.timesofindia.indiatimes.com/2013-12-29/chennai/45674552_1_airline-staff-gold-smuggling-flight-attendant

 

 

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Fri, 01/17/2014 - 22:42 | 4343074 fonzannoon
fonzannoon's picture

Another meh.

Fri, 01/17/2014 - 22:54 | 4343097 DoChenRollingBearing
DoChenRollingBearing's picture

I have a LOT of respect for Eric Sprott, but I think that the central banks can indeed continue the priice manipulation of gold.  Until they can't.  And when would that be?  I contend that no one knows.

Fri, 01/17/2014 - 23:09 | 4343126 seek
seek's picture

I think he does make a compelling argument -- the same one we see related to COMEX -- that the supplies are getting sucked dry. They can manipulate up until the point where there's no delivery.

Once again FOFOA is prescient in how this is playing out -- they'll keep the price suppressed until there is none available to buy. At that point they have the devil's choice: let gold rise to reflect its true value, or sell physical to manipulate the market.

Remember that the masters of central planning are masters at painting themselves into a corner. Gold is just another corner for them to get stuck in.

The last factor to consider is that there will be no New World Order, with a single global central bank. Both China and Russia are seeing to that. Without absolute control TPTB can't prevent the true market from re-emerging. Their plans are crumbling -- they crumbled in 2008 -- and they've just been trying to make the impossible happen since. It ain't happening.

I think two years is a pretty good prediction -- supplies run out around then, and it's doubtful much new mining capacity will come online -- definitely not if the price is suppressed the entire time.

2016. Right in the 2015-2018 window, election year. It also lines up the with template of the 1930s pretty well too.

So, we have 24-36 months before gold becomes very valuable, and life becomes very hellish. I would imagine we'll be seeing some pretty draconian measures put into place before then.

Fri, 01/17/2014 - 23:16 | 4343139 fonzannoon
fonzannoon's picture

I hear you Seek but I feel like the end is always a year or two away. This has dragged out too long. Yen is right i'm a broken man. I need to go to the Cheesecake factory and put my name down and get one of those buzzers. then ride around the mall on my scooter until my table is ready and they buzz me. The superbowl is coming. I hope the giants of new york defeat the packers of green bay by kicking an oblong ball through a giant H! In the face!

(I've lost it) 

Fri, 01/17/2014 - 23:43 | 4343189 Pinto Currency
Pinto Currency's picture

 

Koos Jansen's work estimates China's gold import at 1,436 tonnes of gold (delivered through the  SGE) + another estimated 500 tonnes imported by the Chinese central bank.

That gives total estimated Chinese imports and delivery through these two channels 1,946 tonnes plus any other smuggled amounts and amounts received from African nations in return for delivery of Chinese manufactured goods.

In general, GFMS numbers appear to be confused and should probably be taken with a bag of salt.

http://www.ingoldwetrust.ch/shanghai-gold-exchange-physical-delivery-equals-chinese-demand-part2

Sat, 01/18/2014 - 02:15 | 4343294 CognacAndMencken
CognacAndMencken's picture

 

 

I haven't listened to anything Sprott has said since he went around on a media blitz in early 2011 pumping his PSLV with all sorts of hyperbolic fear-mongering nonsense, while quietly dumping his shares at the same time. Has anyone other than Sprott made a buck on PSLV? From its inception, it's been a loser except for a few months in early 2011 when all the silver pumpers were humping PSLV like a dog. It's gotta be one of the worst performing IPO's of the past several years.

Just out of curiosity, how did the silver pumpers back-peddle from all their bullshit like: "silver to the moon!....$60 by next week!... The silver industrial panic is imminent!.... Comex silver inventories are being raided!....Silver shortage will destroy JPM! .....Silver will reach parity with gold by next month!" ????? How did Sprott and all the hillbilly silver pumpers excuse themselves for being so utterly, laughably WRONG? Sprott was front and center in all that silver-hyping garbage, and yet here he is in this article saying the exact opposite - 2013 was totally uneventful regarding physical silver demand. What happened to the physical supply of silver being so dire that Sprott could barely find any for PSLV?

Last I heard, physical silver inventories were going to destroy the modern banking system (at the very least, JPM) and all the Coin Shop Rambos were preparing for world domination. Now Sprott is saying that physical silver demand was a big nothing for 2013.....What the hell happened? What about the shortage?? I thought if I bought some silver coins I'd destroy JPM? WTF? Did everyone finally realize that the "Farting Silver Bears" was just a YouTube cartoon? What happened to all the silver pumpers who based their retirement savings on those Farting Bears?

I know this post sounds a little antagonistic, but all the shameful silver pumpers need to be called out for their lunacy and bullshit, and there's no better place to do it than an article about Sprott - the godfather of the silver pumping mafia.  How many bagholders did the "Crash JPM, Buy Silver" create?  How many good, innocent people got hooked in the mouth with all sorts of silver-pumping propaganda and lost half their wealth in the past two years while nearly every asset soared?  You could have bought Herbalife.... Fuck, you could have bought the shittiest stocks on Earth and made a fortune, but instead all the shameful silver pumpers puked up a bunch of hyperbolic nonsense and REAL people lost significant wealth.  You could have made NO investments in anything and asked your boss for a 40% deduct in your salary and you would have been better off than buying silver around the time of Sprott's PSLV IPO.  

And what's even MORE ridiculous about all the goofball silver pumpers is that they were so unbelievably intolerant of anyone questioning them.  Precious metals investing was/is a cult, and unless you pledge allegiance to all the carnival barking bullshit, you're ridiculed, mocked and basically told to fuck off.  What a joke...  I don't think I've ever seen such investment lunacy in all my life.  

So now it's 2014 and Sprott has done a complete reversal - apparently demand for physical silver is now flat... no dire shortages anymore. How convenient.... it's almost like he doesn't have a new IPO anchored to physical silver to pump anymore.  Is he trying to rebuild credibility since he got fired from his own fund?  Are you guys giving him and all the other silver pumpers a mulligan on all the hornswoggling carnival barking that ultimately screwed everyone? Don't you guys see the hypocrisy in this new article by Sprott?  

Sat, 01/18/2014 - 03:24 | 4343457 SRSrocco
Sat, 01/18/2014 - 04:47 | 4343529 Rock On Roger
Rock On Roger's picture

I read that earlier this evening.

Could it be the 37 tonnes of 22 carat gold sent to Germany?

 

Stack On

Sat, 01/18/2014 - 05:14 | 4343547 Squid-puppets a...
Squid-puppets a-go-go's picture

and this disproves fonzanoon's assertion that the central banks can manipulate it forever: they can, but only when in unison - but germany aint playing no more

and one by one other CB's will 'sit on an available chair'.  China has said to the world it is about to sit down. Even if the game appears in slo mo, the music stopped when the US said it wont hand over germany's gold until 2020.

Sat, 01/18/2014 - 07:03 | 4343608 negative rates
negative rates's picture

Were going to hit the glory hole any second now!

Sat, 01/18/2014 - 08:10 | 4343648 GetZeeGold
GetZeeGold's picture

 

 

I'm sure Germany will be pleased to hear that.....

Sat, 01/18/2014 - 10:03 | 4343736 Keyser
Keyser's picture

The real question is what retribution will be heaped upon Deutsche Bank and Bafin for allowing the truth to come out. 

Sat, 01/18/2014 - 10:22 | 4343765 GetZeeGold
GetZeeGold's picture

 

 

The way I see it the only thing for Deutsche Bank to do at this point is to go on offense.....those guys have some pretty good experience at blitzkriegs.

Sat, 01/18/2014 - 11:18 | 4343829 AL_SWEARENGEN
AL_SWEARENGEN's picture

I say 2014 will be different.  Watch for Germany to get fed up with the Fed's non delivery of "their" Gold.  Watch for Germany to lose patience with the crumbling Euro block in general.  Germany being one of the last manufacturing powerhouses in Europe may well lift it's skirt to the BRIC's.  Russia and China realizing the potential of Germany joining the BRIC club may well be enough to with stiff-pricks court Germany with an offer so desirable to Germany (Gold) that Deutschland might say YES YES and yield the virtue of the country on the spot.  Sound far fetched?  We'll see.

Sat, 01/18/2014 - 13:36 | 4344073 boogerbently
boogerbently's picture

At SOME point the LAW of supply/demand has to kick in.

There is a high demand, and a low supply.

Prices WILL rise.

Sat, 01/18/2014 - 17:38 | 4343835 funthea
funthea's picture

Nothing to see here.

Sat, 01/18/2014 - 11:24 | 4343836 funthea
funthea's picture

double post

Sat, 01/18/2014 - 03:53 | 4343482 debtor of last ...
debtor of last resort's picture

CAM, you can follow the manipulation until the crash, or you can stack real money. When markets turn and paper starts to burn, it's too late to get you some real money.

Sat, 01/18/2014 - 10:33 | 4343771 GetZeeGold
GetZeeGold's picture

 

 

Kinda like Harvey Weinstein saying last week had he been in Nazi Germany during the Holocaust he would have found a gun.......yeah......don't think so Harvey.

Sat, 01/18/2014 - 15:44 | 4344337 Winston Churchill
Winston Churchill's picture

Supply is limited.

I cleared out Kitco of gold sovereigns this morning.

Had to keep changing orders to complete my purchase  as I emptied stocks on items.

Finally burned some dry powder.The time seemed right.

Sat, 01/18/2014 - 06:22 | 4343585 SilverSavant
SilverSavant's picture

Crawl back in your cave and stay there please.

Sat, 01/18/2014 - 06:37 | 4343594 greatbeard
greatbeard's picture

Nice rant dude.  Other than the occasional delving into hyperbole, pretty spot on.  Hearing Sprott schlepping his snake oil makes me want to cash out and run.  If there were anywhere to run, that I felt safe in, I'd go.  But there's not, so I'll just ignore it all and continue to enjoy the hobby farm life.

Sat, 01/18/2014 - 08:25 | 4343651 GetZeeGold
GetZeeGold's picture

 

 

Stickin a shovel in the ground doesn't make you a farmer city slicker. I should know.....I grew up on a farm.

 

If you want to do some real farming....I know a place I can take you....if you survive half the day....I'll feed you lunch.

Sat, 01/18/2014 - 08:42 | 4343671 greatbeard
greatbeard's picture

>> Stickin a shovel in the ground doesn't make you a farmer

No more than running your mouth makes you an authority, shit stick.

Sat, 01/18/2014 - 09:13 | 4343692 GetZeeGold
GetZeeGold's picture

 

 

That's a dollar in the swear jar for you Amigo.

 

It's early morning, what are even doing here......don't your have chores to do? Elsie ain't gonna milk herself.

Sat, 01/18/2014 - 10:54 | 4343799 new game
new game's picture

so if i got a forty and wasn't a farmer i'm still a city slicker? hey, i met you at the corner store and as i recall you were not the friendly type and rejected me cause i wasn't local and like you.  i left feeling sorry for you. i met another person and he was helpfull and offered to show me a better way. we became friends...

Sat, 01/18/2014 - 10:08 | 4343739 whatthecurtains
whatthecurtains's picture

 

>>Stickin a shovel in the ground doesn't make you a farmer city slicker.

Yeah it might make you a grave robber.

Sat, 01/18/2014 - 11:23 | 4343833 HamFistedIdiot
HamFistedIdiot's picture

The case against the Fed is part political, part economic, and part moral. I went long silver in Nov. 2008 after Congress gave a blank check to shareholders of the Fed; but as it is said, markets can remain irrational longer than participants can remain solvent. It depresses me to hear that silver demand was flat at valuation levels 50% of what some of my family members bought the metal at. How long before silver reaches a new nominal high? 10 years? How long can the ranks of the FSA swell till 80% of Americans are on the dole? Is any of this sustainable let alone moral? I don't want to benefit from money printing, so I am out of stocks. But betting against the house/the central planners is a dangerous game. I know there are all sorts of Black Swans flitting about. But with the shadow state's tens of trillions of dollars, I find it hard to believe that the controllers don't have a plan for gold's being reset to $10K and the West having none. I don't see the Rothschilds playing this game to lose. They own the large mining companies like Barrick. Will us plebian bitter clingers and stackers do okay? I am not sure, but I think so, and I know it's the right thing to do.

Sat, 01/18/2014 - 07:13 | 4343610 Crash N. Burn
Crash N. Burn's picture

"So now it's 2014 and Sprott has done a complete reversal - apparently demand for physical silver is now flat... no dire shortages anymore."

 

 Don't believe a word of it:

"Price-fixing by the One Bank in the silver market during the 1980’s and 90’s (and the 600-year low in the real-dollar price of silver which resulted) led to a 90% collapse in silver inventories from 1990 – 2005 alone. What happened after 2005, as this collapse seemingly began to reverse?

This was when the One Bank instructed its minions to begin falsifying the numbers on global silver inventories. This was accomplished in an absurdly clumsy manner: through adding silver sales receipts into total inventories. Specifically, every ounce of “silver” purchased in the bankers’ paper-called-silver market was added into total inventories. This has produced the totally farcical scenario in this quasi-official “record-keeping” where the more (paper) silver which is purchased, the larger the phony, official inventory numbers grow.

In short; we have absolutely no idea whether there are only two days of supply remaining for global demand for silver or two years. We only know that by 2005 the One Bank was already so alarmed by the complete collapse in global silver inventories that it began falsifying the reporting of this data – and this inventory-fraud persists to this day."

Silver Bells

 

 

Sat, 01/18/2014 - 10:12 | 4343747 unrulian
unrulian's picture

@CognacAndMencken ...

+1....i'm a bag holder like probably a lot of people here, hindsight is 20/20 and i feel a bit sick what i have lost holding the bag. i do however feel less sick that is hasn't vanished into thin air like some paper investments, it's still in that lake. I think in the end the farting bears will get some redemption but right now they look foolish (i never bought into the crash JPM BS, its about like trying to crash PFE by running for the cure)

Sat, 01/18/2014 - 11:03 | 4343815 Gordon Freeman
Gordon Freeman's picture

CAM:  Thanks for the excellent summary--but why are you apologizing for being "antagonistic"?  You, and everyone else, should be homicidally angry at the PM shills like Eric Sprott and his enablers.  They are the lowest of the low, preying on the most naive and paranoid in the investing public, leading them around by the nose, and picking their pockets.

Sat, 01/18/2014 - 12:34 | 4343926 Kirk2NCC1701
Kirk2NCC1701's picture

1. There's a reason Sprott is a billionaire: he knows how to position himself and leverage well, and he knows how to front run. Don't know if does a "GS": Pump & Dump and Short while telling his clients to go Long. But it wouldn't surprise me, as he wouldn't be the first and he won't be the last.

2. "Figures lie and liars do a lot of figuring." is an old saying

3. "A gold mine is a hole in the ground, with a liar on top." It is said. Case in point: Bre-X.

4. I share your sentiment about the fanaticism and goon-like personal attacks by a subset of extremist PM players.  Judging by the Up arrows, many others agree.

I'd go so far as to say that extremists of ANY kind are beyond rational... When such people stop being reasonable (able to reason), they become dangerous to themselves and probably to others.  The worst ones are the religious fanatics, who operate at almost a purely primal level and go back many, many centuries.  They are present in all three monotheistic religions, and all have recent examples of their dangers.

Sat, 01/18/2014 - 12:46 | 4343977 CoonT
CoonT's picture

+1 Exactly! I'll never forgive Sprott for that shameless silver pump, not so long ago. DoChen is right, in that he is "one of the good ones" but the fact is that he's been playing the game, just like all the rest of the pumpers.

Obie says: "Don't sell a nigga dreams" and "No hos in tha spot where tha dough grow" Sprott should listen to Obie..

Sat, 01/18/2014 - 17:29 | 4344549 fockewulf190
fockewulf190's picture

@Cognac

Remember this?

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/bern...

Silver was artificially manipulated and crushed by TPTB because it was becoming a huge problem.  Demand for physical silver, even now, continues to be very high, but, as you well know,  the price is determined in the paper markets.  How many times have we seen massive amounts of paper silver equalling to a third, half, or even an entire years supply of the world´s silver production traded in a single day? How about the senseless smashdowns that happen in the dead of night, often with thousands of contracts being traded within seconds at most, and profit means nothing?   Not to mention, NO intervention by the CFTC or anyone else, EVER, besides the occasional lip service by the likes of Bart Chilton?

I understand your frustration, but I feel your anger towards Sprott is misdirected.  He for one is having to fight the biggest manipulation campaign ever wrought, yet stocks have been POMOéd tirelessly with untold billions in out of thin air created dollars.    If anything, you should embrace the fire sale in hard assets, because one day, this bitch of a market is going to blow, and fiat currencies the world over will vaporize.

Sat, 01/18/2014 - 19:15 | 4344758 Papasmurf
Papasmurf's picture

I haven't listened to anything Sprott has said since he went around on a media blitz in early 2011 pumping his PSLV with all sorts of hyperbolic fear-mongering nonsense, while quietly dumping his shares at the same time.

Exactly!  I take his pumping with a grain of salt after that.

Sat, 01/18/2014 - 23:12 | 4345202 moonshadow
moonshadow's picture

@cognac- help me out here-you said sprott got fired by his fund? i searched for that info and came up with nothing. could you give me a bit more info? or a link to info about his firing?

Sun, 01/19/2014 - 01:12 | 4345349 jonjon831983
jonjon831983's picture

I think what put off a lot of people was when he dumped a load of PSLV pretty much when silver was starting to get hammered.

 

He reasoned that it was so he could buy mining shares or whatever which is probably valid, but the optics were pretty bad.

Sat, 01/18/2014 - 00:18 | 4343273 Tall Tom
Tall Tom's picture

Why so glum, chum? When this blows up life becomes Hell on Earth.

 

Every financial market will unravel as a result of the continual, and multiple, rehypothecation of Physical Gold because when it comes right down to it Gold is at the apex of Exter's Inverted Pyramid.

 

THERE WILL BE NO TRUST WHATSOEVER.

 

What is the claims against deliverable Gold on Comex right now? Hmmmm.... I read this morning here on ZH that it was at a historic high of 117 to 1.

 

So if it blows up TWO YEARS FROM NOW, rather than right now, it means that you have two more years to prepare for Life in Hell.

 

Think of it as a REPRIEVE from the Execution which the Nation of Massive Financial Swindle and Fraud, yes, the United States, so rightfully deserves.

 

If you have Gold then you are not broken...not yet at least. I am enjoying the feel of one on my One Ounce Maple Leafs as I write.

 

Just owning one coin means that I own more than my "fair share" if all of the Gold in the World were evenly distributed.

 

You are whining because you are richer than most of the inhabitants on this Planet???

 

Shit!!! Crocodile Tears!!!

Sat, 01/18/2014 - 05:19 | 4343552 Squid-puppets a...
Squid-puppets a-go-go's picture

i'm doing something similar. I nestle a gold coin between my foreskin and helmet, and i purport its unparallelled health benefits.

I tried the same with a bitcoin but got a nasty shock to me oldfeller

Sat, 01/18/2014 - 08:17 | 4343655 new game
new game's picture

gold in one hand cock in the other-getting the picture...

Sat, 01/18/2014 - 14:47 | 4344228 nightshiftsucks
nightshiftsucks's picture

Just don't get carried away and use the gold as a suppository,that would give a new meaning to "burried nugget".

Sat, 01/18/2014 - 13:15 | 4344033 Tall Tom
Tall Tom's picture

Well I am not shocked...

Sat, 01/18/2014 - 06:14 | 4343580 samcontrol
samcontrol's picture

@fonz.
super bowl prediction.

seahawks defense retire broncos quaterback.

Sat, 01/18/2014 - 11:19 | 4343832 RobD
RobD's picture

Point of order! SeaChickins have to get past the niners first but if they do I don't think they can win in NJ, terrible road team that they are.

Sat, 01/18/2014 - 13:16 | 4344037 Tall Tom
Tall Tom's picture

Unless they have Crucifixtions of  Banksters and Politicians at Halftime then why bother watching?

Sat, 01/18/2014 - 14:58 | 4344251 logicalman
logicalman's picture

Take a leaf from the Romans.....

Banksters & Lions.

The queue for tickets would be huge!

Sod throwing a ball about and calling it 'foot'ball. Never understood that.

Sat, 01/18/2014 - 08:14 | 4343617 new game
new game's picture

on principle, i ignore billionairs with a book to sell. fuck sproot. next if anyone here thinks the world dominated by central banks has changed - place your hopium vote for gold and take a ride on the manipulation express. after carefull and long anxiety of placing my money into the gold space-phyz, i became aware that it is a joke and the rule of law and markets just aint gonna happen. no martre here. all i here is whiners, wish think and see myself falling into the trap of being just another whiner.

fuck it. better plays. now i look listen and laugh as i am not one of the gold buggers mad at the world.

investing is usable physical assets with utility-plain simple and much better use of time energy and the return is off the charts in comparison.

sorry, but it aint where its at even if it goes to da moon.

also if it becomes a double in value, we got much bigger problems and your gold aint worth shit when the zombies or goverment come looking for anything of value, which probably won't happen either.

no mater how you figure there is much better place to hide your wealth in plain view.

tractors, real estate, land, tools, copper, aluminum, junk cars, bullets, collectables(road show), art ect. on and on. all a better utility that is a way better reason to wake up and live another day.

fight club open for business today down arrow are opinions i do respect-remember to post a logical response and don't shoot the mesanger. keep the gloves on as we are still trying to have some fun-right?

Sat, 01/18/2014 - 09:38 | 4343712 ArmyofOne
ArmyofOne's picture

"tractors, real estate, land, tools, copper, aluminum, junk cars, bullets, collectables(road show), art ect. on and on. all a better utility that is a way better reason to wake up and live another day."

 

That's a lot of stuff hanging around waiting for a fire to wipe them out or get looted.  I'll think I just stay with what has been a store of wealth for 5000 years.  Canning jars loaded and dug deep in the ground. 

Sat, 01/18/2014 - 10:48 | 4343791 new game
new game's picture

i respect that! just a list of stuff i can get much more utility out of while i exist. many more items could be added and i am not a junk collector, unless it can be USED AT greater value in the future...

i keep a few coins though, just 90 percent less...

they are cool, i must say.

Sat, 01/18/2014 - 11:40 | 4343854 greatbeard
greatbeard's picture

>> has been a store of wealth for 5000 years. 

Has been a store of value for 4,998 years.  Since it's been in the Fed's cross hairs it's been a disaster and anything but a store of value.  Nobody, well some, but none of us, knows what the future holds, but fighting the Fed is still a losing battle, as the gold chart clearly shows.

Sat, 01/18/2014 - 17:22 | 4344538 ArrestBobRubin
ArrestBobRubin's picture

In my experience, the best approach is to remain open-minded about how best to make "money" (actually just fiat currency) while not losing sight of reality and fundamentals. Unless you're saying that anything has really been fixed (or even substantially addressed) since 08/09, the role of PM as the best form of wealth insurance and diversity is very much alive and well. And as things have actually gotten much, much worse, its role is more important than ever. For what one pays for that insurance right now, it's a screaming bargain.

PM's have been dirtied up in the marketplace by the UST/Fed/Wall Street and a Stalinistic "news media" at the same time they've snookered the dumbed down masses with one paper scam after another. Many so-called investors are "all in" equities right now as if they'd never been burned by the dot bomb, tech wreck, housing slide, or a dozen other scams over the past 25 years. It's hard to fathom this lack of memory- - what, do people really think "it's different this time" with the likes of Obama and Bernanke / Yellen / Fisher at the helm? Yeesh. I can only imagine what's in our food, water and air anymore.

In reality, nothing has changed. It's just that the Man Behind the Curtain has been working the levers furiously to maintain an illusion of recovery and prosperity. Over the past 2 years, those who can see through it have let the Enemy (the Fed & Wall St.) subsidize the slow but steady growth of their PM stacks.  They've made lots of easy fiat in a steroid-fueled stock market bubble and then transformed some of this unbacked "sucker paper" into some of that 4,998 year old real money stuff.

You take what the Defense gives you and let them help you win the game. Welcome to the NFL.

Sat, 01/18/2014 - 11:17 | 4343828 newdoobie
newdoobie's picture

+1000 If you love AU collect it, I for one have a nice little stack, but I also have other intrests. Go off grid, build sell and install solar water heaters. Wood fired electrical generators, floating Stirling engine powered generator (temp difference on lake and solar heated water works great). Install PV collectors. If it's mechanical and usefull I build sell and install. Usefull machines are my hobbie and my job!

Sat, 01/18/2014 - 19:20 | 4344773 Papasmurf
Papasmurf's picture

Gold has headed downwards ever since Sprott starting pumping it in earnest.   When he stops pumping, I'll know he's accumulating for his own account.  That will be the signal to buy more.

Sat, 01/18/2014 - 11:31 | 4343843 therover
therover's picture

Thanks for the laugh.

Fri, 01/17/2014 - 23:27 | 4343157 Tinky
Tinky's picture

Good summary. My only quibble is that I expect the action to occur sooner rather than later. Too much complexity; too many potential Black Swans; efforts to manipulate are becoming increasingly ineffectual; rats beginning to abandon ship; the dark truth about various economies is becoming increasingly difficult to obfuscate; those who exit first, exit best, etc.

Fri, 01/17/2014 - 23:50 | 4343213 seek
seek's picture

The biggest mistake I've made in the past 5 years is underestimating the ability of TPTB at pulling rabbits from hats. I think rabbits run out in 2016, but at this point wouldn't be shocked if it ended up being 2018.

I have no doubt things will become broken-er prior to 2016, but I don't think we see the big fireworks until then; maybe late 2015 at the earliest.

Fri, 01/17/2014 - 23:57 | 4343228 Tinky
Tinky's picture

I understand completely, and left money on the table myself by getting out of the "market" early. But I see more and more fissures appearing, and remain convinced that TPTB will not be choosing when the gig is up – it will be forced on them, and they won't be prepared.

Sat, 01/18/2014 - 00:06 | 4343247 DoChenRollingBearing
DoChenRollingBearing's picture

Yes, Tinky and seek.  I started backing out of stocks decades ago.  Closed my IRA, paid the penalties & taxes.  I do not kow when TSHTF, but I am trying to prepare.

For the Good, the Bad and the Very Ugly...

Sat, 01/18/2014 - 11:36 | 4343849 therover
therover's picture

Tinky,

Just remember walking away and leaving money on the table means there is less money in your pocket when you walked away.  As long as you made out, good for you. Don't look back, only forward.

 

Sat, 01/18/2014 - 00:03 | 4343241 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

seek (4343126) wrote:

"Remember that the masters of central planning are masters at painting themselves into a corner. Gold is just another corner for them to get stuck in.

The last factor to consider is that there will be no New World Order, with a single global central bank. Both China and Russia are seeing to that. Without absolute control TPTB can't prevent the true market from re-emerging. Their plans are crumbling -- they crumbled in 2008 -- and they've just been trying to make the impossible happen since. It ain't happening."

***

Two very interesting observations, I always pay attention to your stuff.

Sat, 01/18/2014 - 00:21 | 4343280 Seize Mars
Seize Mars's picture

seek

I don't see things the same way as you do.

Regarding the "New World Order" and a single worldwide central bank - I mean I don't really see the big deal - they've already got it. How do you think the US has avoided hyperinflation so far? It's beacause the USD is a mechanism to export inflation. That export gets sent into some pretty big economies; China, India, et cetera.

Now, as far as Russia and China being roadblocks to world domination, you've got to be kidding me. Soviet power was financed by Wall Street. China is using paper money. Come on, it's already in the bag. Syria and Iran are the ones who are not on board, that's why they are in the principal's office.

I think the whole "the whole system will break in 36 months" is a meme, that gets extended on a regular basis. This is intended to keep people in check, waiting for the "the big kaboom" and not doing anything. Only the big kaboom never comes. Time is on their side, at least in the sense that time grinds us down more every day.

They want us poor, dumb, hungry and unarmed. And it's working.

Sat, 01/18/2014 - 05:33 | 4343556 Squid-puppets a...
Squid-puppets a-go-go's picture

re USD exporting inflation: spot on.

when weimar and zimbabwe started printing like no tomorrow, that no tomorrow still took a few years to arrive - But these are isolateable economies.

When you have the entire world as a sponge for the fed's liquidity, hyperinflation can take a lot longer to take hold. $85 billion a month isnt gonna end up in $100 trillion dollar notes for quite some time

But there are other issues that can cause a drop of ice 9 to fall into the ocean: comex cracking, shadow banking trust evaporating, baldry cratering, major player returning to gold standard. When so many of these are on the cusp of occurring, the OLIGARCHY WILL SPLIT, turn on each other, and end the game before it was agreed between them. This temptation to break rank grows each day the agreed deadline draws near - or else other influential parties who have modest clout but arent in the inner-inner circle - and who arent being told clearly the date or conditions for the endgame - will break rank in self preservation

they COULD hold the charade together for years, but some members of the oligarchy will betray the others before then, and its game off, and new game on

Sat, 01/18/2014 - 14:06 | 4344135 Stuck on Zero
Stuck on Zero's picture

What keeps the oligarchy working is the thought that there are another 2-4 billion people to fleece, bamaboozle, and impoverish.  Oooh the opportunities.

 

Sat, 01/18/2014 - 14:06 | 4344139 Stuck on Zero
Stuck on Zero's picture

Hiccup.

Sat, 01/18/2014 - 12:25 | 4343927 Drachma
Drachma's picture

"Soviet power was financed by Wall Street."

 

Interesting read -  "Wall Street and the Bolshevik Revolution" by Anthony C. Sutton

Sat, 01/18/2014 - 00:31 | 4343303 kito
kito's picture

"The last factor to consider is that there will be no New World Order, with a single global central bank. Both China and Russia are seeing to that"

Sorry seek but both Russia and China continue to prop up the status quo by buying u.s. paper. Nearly every cb is doing the same. So the short of it is that there already is a single global bank, with branches in nearly every country.

Sat, 01/18/2014 - 04:10 | 4343495 Transformer
Transformer's picture

uhh, Kito, where have you been?  The FED is buying US paper.  China is buying things like the JPM building on Wall Street, for half of what it's worth.  Willie says that is a default, that building was collateral for something and somebody defaulted.  There's a lot more going on here than meets the eye.

Sat, 01/18/2014 - 10:54 | 4343801 kito
kito's picture

Bullshit. China and Russia reserves are UP.

Sat, 01/18/2014 - 16:19 | 4344406 greatbeard
greatbeard's picture

>> Willie says

Come on man, Willie is a good, entertaining read, but Willie is Willie.  That's like watching Fox News to get news.  It's all entertainment.

 

 

Sat, 01/18/2014 - 00:51 | 4343332 vie
vie's picture

Anyone taking odds on Gold confiscation?

Sat, 01/18/2014 - 00:41 | 4343316 honestann
honestann's picture

If the predators were willing to literally rid themselves of ALL gold they have, they could indeed keep the lid on gold for several more years.  So the question is, do they consider holding gold important [to themselves] or not?  Or rather, how important do they believe holding gold is.

Now, I think a reasonable person could conclude that the predators-that-be already own no gold.  However, I must qualify this, because the qualification is incredibly important.

The predators-that-be are probably holding 10, 20, maybe even 30 thousand tons of physical gold.  So in that sense, they have a lot of gold and could keep feeding that into the market for somewhere like 5 to 15 years before they literally run dry.

HOWEVER... and this may be a crucial however... of that 10 to 30 thousand tons of physical gold they hold, they may own 0 tons, -10 tons, -20 tons, -50 tons, perhaps even -100 tons of gold.  In other words, we suspect the predators-that-be physical hold quite a lot of physical gold, but they already sold ownership of every ton of gold they hold to multiple parties, and/or pretend to hold the physical gold, but actually handed it over to others on a lease basis, who then sold the gold into the markets (with their blessings).

In that case, the predators-that-be hold tens of tons of gold, but own no gold.

However, as long as most of the "owners" of the gold allow the predators-that-be to continue holding the gold, the predators-that-be can continue to play these games, manipulate these markets, and shift the consequences of their frauds to their successors and the next generation of suckers (citizens).

So the question is... who blinks?

If humans (including predators-that-be in other nations) had ANY brains whatsoever, they would demand their physical gold be returned immediately.  Anyone with half a brain understands what the Germany events mean.  They asked for ~20% of their gold back, were told they had to wait 7 years (when it should have been 7 days to 7 weeks), and the gold they have been receiving is not the gold they put on deposit, and the bars are not even close to the same purity or form.  Which means (to any sane individual), the German gold (and gold owned by many others) was sold into the market to manipulate prices.

In other words, you are correct.  None of us know for sure when this game of musical chairs ends, partly because nobody knows when other predators-that-be demand their gold back in increasing quantities, and partly because we do not know how thoroughly the predators-that-be are willing to screw their successors, and partly because we do not know how long before the smarter governments, corporations and individuals in this world decide they better get their gold while the getting is good --- and possible.

I tend to believe Sprott is correct, that the primary mission of the predators-that-be was to give gold in particular, and precious metals in general, a big fat black eye in the minds of investors and regular folks.  They have achieved this goal... at what some of us believe is a tolerable but significant cost to them.  I think they can afford to let gold and silver rise now, at least for two or three years.

On the flip side, very few actions screws over their most serious philosophical enemies (liberty advocates) more directly and thoroughly than trashing the price of gold and silver.  Of course they also know that trashing the price of gold and silver also greatly aids their potential future enemy, namely China.  So there is a balance.  Right now jerks like Obama hate individualists and liberty advocates more than China.  That too could change, depending on what happens next, and the predators-that-be in the west know this quite clearly.  They know very clearly that gold soaring into outer space over the next few years would put a huge crimp in the Chinese plan to back their currency with gold by making them pay enormously more to accumulate enough physical gold to pull this off.

So like you say, we just can't know how the western predators-that-be will play.  They are the masters of manipulation and misdirection, and are thus very difficult to predict.

My guess is, they tell their agents to gradually reduce or end manipulation in 2014 now that they've painted a big ugly black eye on gold in the eyes of the public.  My guess.

Sat, 01/18/2014 - 01:00 | 4343345 SWCroaker
SWCroaker's picture

Good post.   But prehaps the years-upon-years of waiting for the other shoe to drop have made us all overly respectful and weary.  It is possible that these guys have trick after trick up their sleeves; but I can just as easily see them ending their terms, retiring in luxury to some distant paradise, and in the process handing a bag of exploding poo to those that assume the reins.   Winning is best; having the loss happen after you're gone is almost as good.   Working hard to perpetuate the system for those that follow just seems too...  nice... for the Bens, Jamies and Timmys of the world.

Sat, 01/18/2014 - 05:47 | 4343561 Squid-puppets a...
Squid-puppets a-go-go's picture

+ anutha 1, good post.

But remember this: The same parties who manipulate gold down (for now) WANT it to skyrocket up in price - at a time, if they can manage, of their choosing. this has been the multi-decade game of the oligarchy for the last millennium

its easy to lead the current generation of new money to lose faith in gold, but if anyone thinks that the 'old money' - the families that have had the ear of kings and presidents for centuries - have suddenly in this generation lost their faith in gold, they are naive in the extreme

im just lucky to be living and liquid at one of those points in history that only come a few times each century to take advantage of the (paper) bait and (phyz gold) switch.

and, not living in america, im additionally thankful and lucky in not having to experience the same level of violent dislocation that seems so inevitable for you poor yankee bastards.

i hope the little people of america, and not the oligarchs, are the ones to emerge from the rubble

Sat, 01/18/2014 - 11:11 | 4343824 Gordon Freeman
Gordon Freeman's picture

Right--much better to live in your little shithole.  Fuck you.

Sat, 01/18/2014 - 07:58 | 4343635 new game
new game's picture

simple questions? we are standing as the last two on earth and i have an ar 15 and you have an once of gold (equal value), now what happens?

we make love and join forces?

i take your gold(i have the ar 15...)?

which has more value asuming i have some bullets?

do you think maybe the ptb have a few bullets in their lockers?

they don't seem to be making love either-drones at wedding parties-hmmm.

humans are violent muther fuckers, just the way we are.

ps. id make love if you could be trusted, as i value who you are most.

if you are another human suck, bye bye...

jmfo

Sat, 01/18/2014 - 11:40 | 4343855 The Wisp
The Wisp's picture

If Gold Has no Value to You at that Time, Why would you Take it ? sounds like it is something else you want.

Sat, 01/18/2014 - 11:55 | 4343871 OceanX
OceanX's picture

Humans are far above and beyond anything else SOCIAL, they need contact with their species  ...even Friday did not eat Crusoe.

 

 

Sat, 01/18/2014 - 17:52 | 4344601 fockewulf190
fockewulf190's picture

They may have given gold and silver a black eye, but it has been the western eye that has been blackened.  The asian eye was missed, hence the unprecedented hunger for phyzz. 

Sat, 01/18/2014 - 00:44 | 4343325 holdbuysell
holdbuysell's picture

DoChen: I think that the central banks can indeed continue the priice manipulation of gold.  Until they can't.

I agree. 2014 may or may not be the year as Sprott points out, but what I do know is that, as with all changes in status quo related to the markets, they happen very quickly.

 

“How did you go bankrupt?"

Two ways. Gradually, then suddenly.”

- Ernest Hemingway, The Sun Also Rises

 

Fri, 01/17/2014 - 23:02 | 4343114 Yen Cross
Yen Cross's picture

  Are you really that "jaded" Fonz?

Fri, 01/17/2014 - 23:07 | 4343122 fonzannoon
fonzannoon's picture

well it's tough Yen....while I sympathize with Sprott, did he really make a good case that manipulation would end in 2014?  I don't see it. I see Gundlach pitching me bawnds...Sprott pitching me gold...Citi hoping to create a chance to btfd...

what am I missing?

Fri, 01/17/2014 - 23:11 | 4343128 seek
seek's picture

I think he made a better case for 2016 than he did 2014. I think he's being an optimist in thinking the manipulation will end so long before supplies dry up.

Fri, 01/17/2014 - 23:28 | 4343160 Yen Cross
Yen Cross's picture

 I think "who" made a better case in '2014' ?

  Back up your accusations with> " FACT"

Fri, 01/17/2014 - 23:44 | 4343196 disabledvet
disabledvet's picture

You can't get coal in space...silver might be a problem too...but you never know with likes of who we're up against here. Those silver equities had a huge move today.

http://seekingalpha.com/symbol/PSLV?source=search_general&s=pslv

makes for a good proxy. The didn't care about Detroit...these same folks won't care about Chicago either.

http://www.youtube.com/watch?v=Nb13I34J8K4 Well, they'll still have the band Chicago at least.

http://www.straightdope.com/columns/read/1842/what-does-the-chicago-lyri...

http://authors.library.caltech.edu/42106/
http://en.wikipedia.org/wiki/Stardust_(spacecraft)

I like the whole "better understanding of fuel levels" as a final mission statement part. I did note "the communication button was then switched to off."

Sat, 01/18/2014 - 01:28 | 4343376 dmger14
dmger14's picture

At some point won't there be a critical mass, a hundredth monkey that will take the clamor for physical  exponential?  I wonder, if the fed has rehypothecated gold stocks, why not give 100% to Germany pronto to keep other countries confident that THEIR gold is there?  What they've done is destroy confidence and increase the likelihood of other redemptions that will destroy the facade and bring the ponzi to its knees fumbling for a zipper.

Sat, 01/18/2014 - 05:52 | 4343564 Squid-puppets a...
Squid-puppets a-go-go's picture

one has to imagine if today's report of comex being over 112 : 1 claims to inventory is correct, there will be serious movement.

lehman and bear sterns were 35 and 42 to 1 leveraged. Can comex survive 3 x the leverage that caused the GFC ? discuss.

Fri, 01/17/2014 - 23:19 | 4343144 Yen Cross
Yen Cross's picture

    Short the short end of the curve Fonz. The first thing to be liquidated will be liquid assets pegged to short term notes.

 

 

 

Fri, 01/17/2014 - 23:30 | 4343166 fonzannoon
fonzannoon's picture

well if we are talking shop now Yen I will slap myself awake. That's interesting about the short end. If you see the short end going you must be seeing something really bad on the horizon, no?

I am looking to get short the long end myself. I think we are going to churn here for a bit and then Yellen comes with some goodies and we get a breakout in the S&P and the 10yr finally holds the close over 3% and eventually we get 3.25%. 

I am not saying we see 30% like last year but i see moar of the same. I have no idea about FX but I would be staying long stawks, short bawnds and i'd be looking to short Sprotts wonderful miners. 

Fri, 01/17/2014 - 23:46 | 4343199 Yen Cross
Yen Cross's picture

 No Shop. Absolutely no shop.

  I think Gundlach is correct on the 2.5% treasury call. I think you can make a tremendous amount of money on the spread.

   The next Fed. meeting March 18th, 2014. (after the 28 Jan meeting)

 From an F/X perspective/ usd-jpy on the 102,00 handle at best.

Fri, 01/17/2014 - 23:46 | 4343203 disabledvet
disabledvet's picture

I'm looking for a HUGE "spaceship arrival." I really am. I'm sure "it's only there to protect us."

Fri, 01/17/2014 - 23:48 | 4343206 Yen Cross
Yen Cross's picture

 Arrival times would be appreciated?

Sat, 01/18/2014 - 05:42 | 4343557 StychoKiller
StychoKiller's picture

The bigger question is WHO/WHAT is gonna step out of it?

Sat, 01/18/2014 - 12:24 | 4343925 OceanX
OceanX's picture

Without a doubt, it will be very hungry...

Fri, 01/17/2014 - 23:57 | 4343218 NoDebt
NoDebt's picture

I'm with you as far as this:  what's going on has damned little to do with how much is being dug out of the ground right now.

Also, none of these big shifts in physical demand seem to be happening on the "public market."  India is importing illegally via the black market (I doubt the price is as spot).  Nationals and central banks aren't moving around their forklift pallets through the public gold market, either.  Maybe at a price that REFERENCES spot or some moving average of spot plus a premium/discount, but they're not moving it around via the public markets (and both sides have a reason not to disturb market price too much in pegging that transaction's value, as you can imagine, because they would quickly BECOME the market for a period of time).

Here's what I DO know is happening:  1. Gold is moving west to east.  2. Every form of manipulation known to man will take place while that's happening or wild price swings and private sector arbitrage will eat up any value in those transations for BOTH parties.

This is the ultimate "dark pool".  And no, you can't trade on it.  Search your feelings, Fonz.  You know this to be true.

Sat, 01/18/2014 - 05:59 | 4343565 Squid-puppets a...
Squid-puppets a-go-go's picture

you dont think there will be a point soon where the west will pull up and go 'holy fuck we cant let china have it ALL FUVK STOP THE BLEED!!'

like, are the central banks of the whole west that united and convinced that managing the money supply in the digital age means they can safely dispense with 5000 years of gold's central role? 

Sat, 01/18/2014 - 08:06 | 4343646 new game
new game's picture

yup 2.5 handle because they can and real estate wanning. repeat to get desired effect. not only that but tptb have a vested interest-think blackcock. and japan bawnds went where? over last twenty years?

big tyme rotation a cuming blackcock style...

Fri, 01/17/2014 - 23:05 | 4343118 kito
kito's picture

Man if I had a gold coin for every time sprott spouted this, id be........down 30 percent..

Fri, 01/17/2014 - 23:17 | 4343141 Papasmurf
Papasmurf's picture

Sprott was promoting his silver etf the same time he was liquidating from his own account.  He is not to be trusted for any promotional remarks.

http://seekingalpha.com/article/295093-sprott-insiders-are-selling-pslv-...

Fri, 01/17/2014 - 23:46 | 4343202 DirkDiggler11
DirkDiggler11's picture

That was a BS Moron on a crap site posting shit. Don't be like the dog that eats it's own vomit and further propigate this shit.

Sat, 01/18/2014 - 09:28 | 4343705 Papasmurf
Papasmurf's picture

D^2, I watched an interview with Eric Sprott where someone asked him why he was selling his funds while he was promoting them.  Eric said he was moving his investment into the miners.  I lost all respect for his opinions after this revelation.  When he speaks, he's talking his book. Bottom line, think for yourself.

Fri, 01/17/2014 - 22:54 | 4343099 y3maxx
y3maxx's picture

Silver has utility.....what does Gold do?

Fri, 01/17/2014 - 22:56 | 4343102 matrix2012
matrix2012's picture

"Gold is the money of kings;

silver is the money of gentlemen;

barter is the money of peasants;

but debt is the money of slaves."

~ Norm Franz

Sat, 01/18/2014 - 12:53 | 4343991 Kirk2NCC1701
Kirk2NCC1701's picture

I agree with this saying so much with this, that I posted this on ZH a year ago.  Am looking for said post.  Stay tuned.

I'd like to know when Norm Franz said this, and if this the same guy who had the "epiphany" of this saying also had the "epiphany" to do a Christian ministry from a Jewish/Torah perspective (http://ascensionministries.net/)

Skeptically yours,

Kirk

Fri, 01/17/2014 - 23:15 | 4343138 Carpenter1
Carpenter1's picture

Something broke a week ago or so. A tide shifted, like when something that needed to happen happened and reached the point where everybody witnessing it agrees it's done and enough. No charts, no stats, I didn't believe this until just recently.

 

The time is now.

Sat, 01/18/2014 - 01:17 | 4343364 JustUsChickensHere
JustUsChickensHere's picture

I agree ... I dont know what has happened but the daily smackdown I see around 2:00am NY time went missing for a couple of days a week or so ago, and the bounce back has been stronger each day as well.

Something changed.

 

Sat, 01/18/2014 - 03:33 | 4343464 Mercuryquicksilver
Mercuryquicksilver's picture

Exact time: January 10 8:20-8:40 NYMEX.

 

Another player entered the game and has been there since.

Sat, 01/18/2014 - 07:17 | 4343612 Poor Grogman
Poor Grogman's picture

A disturbance in the force, I felt it too.

The wait feels like its over, now seems a fine time to convert some useless fiat.

The PTB have a not inconsequential problem with manipulation, in that it costs real gold to carry it out convincingly. Thus the solution is not to do it, but that would mean their pet fiat currencys revert to toilet paper. The PTB continue using/rehypothecating, sovereign (our) gold to trick us into thinking that our gold is worthless, so that we borrow paper from them at interest, pledging our real assets (therefore our labour) as collateral. Hoping for a nominal gain in asset prices that will be overstated ( and taxed accordingly) due to fraudulent and deliberately misleading inflation methodology

Who or what evil genius came up with this unbelievable scheme?

Evil walks among us, largely unnoticed by the poor but honest sheeple of this planet.

Sat, 01/18/2014 - 08:12 | 4343652 Bioscale
Bioscale's picture

Who? Gary North has several good articles about them, but still I think that even these are just public faces of those evil ones in the backround of whom there is no single word in any history book, be it Rotschilds or other banking cabals.

http://www.garynorth.com/public/department141.cfm

Sat, 01/18/2014 - 11:27 | 4343841 AllWorkedUp
AllWorkedUp's picture

Sure kinda feels that way. The last $30 flash crash was immediately bought or covered minutes later. Pretty unusual considering how things have been for the last couple of years.

Yesterday gold managed a 1% gain despite a pretty good rally in the USD. that's a rarity.

What I find most interesting is that in the last few weeks gold has seemed to trade inverse of the SM, couple that with a surprising rally in bonds since the beginning of the year, and I'm wondering if there might be something rotting under the SM.

Sat, 01/18/2014 - 00:10 | 4343255 grekko
grekko's picture

Store of value?  Divisible? Durable? Worth the same everywhere? In limited supply (you can't print it!) Pretty! ...and worth way more than it's weight in politicians and bankers.

 

Sat, 01/18/2014 - 00:32 | 4343304 Tall Tom
Tall Tom's picture

Silver has utility.....what does Gold do?

 

Gold is an INDUSTRIAL METAL. Its utility lies within the fact that it serves the FINANCIAL INDUSTRY and is utilized as MONEY.

 

Perhaps you do not see that. Perhaps you do not value that. Perhaps you are as most in the United States and are oblivious to that FACT.

 

But the United States, with its 320 Million people population, is representative of 5% of the World.

 

The rest of the 7 BILLION other people who are on the face of the Planet, 95% of the people in the World, VALUE GOLD.

 

DO YOU UNDERSTAND THE UTILITY THAT GOLD HAS WHICH SERVES 95% of THE WORLD'S POPULATION???

 

Or are you obtuse and dense? 

Sat, 01/18/2014 - 12:29 | 4343938 OceanX
OceanX's picture

You can make a nice gold suit to protect you from radiation.

Sat, 01/18/2014 - 13:28 | 4344057 Tall Tom
Tall Tom's picture

Yeah. I wear my Gold Foil Hat.

 

It works much better than those crummy Aluminum Foil ones...

 

I do not know why that people call them Crowns...

Fri, 01/17/2014 - 22:55 | 4343100 matrix2012
matrix2012's picture

Should I buy NOW or wait for another significant drop?

I have great concens that the great overlords will further fix its prices to some record lows.

Fri, 01/17/2014 - 22:58 | 4343105 Schlomo Bergstein
Schlomo Bergstein's picture

They may be another drop but why wait? You can already buy precious metals under the cost of production. This is an historic buying opportunity any way you cut it.

Sat, 01/18/2014 - 00:42 | 4343320 vie
vie's picture

Dollar cost average, BITCHEZ.

Sat, 01/18/2014 - 02:34 | 4343431 Kirk2NCC1701
Kirk2NCC1701's picture

If you get any other answer than "it depends", you have to question their competence and integrity.

It depends on what % of your total assets/portfolio is allocated to PM, what your % target is, and what % of your disposable income should be earmarked for PM, as opposed to other assets/investments.

It comes down to having a rational and sound plan and sticking to it, rather than chasing every flash-bang like an ADD kid.

Trust neither bulls nor bears, as both make a living on activities. Keep your perspective and balance. Proceed on Principles, not on Promotions.

Sat, 01/18/2014 - 07:55 | 4343638 Doña K
Doña K's picture

My golden ratio is very close to the golden ratio of the ancient Greek mathematicians which was discovered while exploring a pentagon and which creates visual harmony. (Used by Michelangelo, Da Vinci, Salvator Dali and many others.)

http://en.wikipedia.org/wiki/Golden_ratio

Simply: 3/5, 5/8, 8/13, 13/21, 21/34 etc.

More simply: Out of a $1,000 of investable sum 38% gold 62% cash, 0 stocks, 0 bonds

What happens however, due to price fluctuation when gold price goes up, you end up with higher % of gold than before and the opposite if the price goes down, in which case you buy more gold to adjsut back to you ratio.

In reality, when things go wrong and the dollar goes way down you lose dollar value but gold overcompensates and your 38% gold maintains your orginal worth plus more.   

Nature does not lie. BTW: The annual production of gold is roughly equal to the population growth. There is something magical about gold.

Just MHO. 

Sat, 01/18/2014 - 13:50 | 4344108 Tall Tom
Tall Tom's picture

Should I buy NOW or wait for another significant drop?

I have great concens that the great overlords will further fix its prices to some record lows.

 

You have got to be joking.

 

Let's see...Record lows??? Do you think that the Great Overlords will fix the price of Gold below $20/oz troy? Anything under TWENTY DOLLARS is a record low. I am not writing that it cannot happen.. But that is extremely improbable.

 

I do not believe that you own Gold. I do not believe that your EVER WILL.

 

Personally I have been buying all throughout the decline from $1920. I also was buying throughout the advance from $255 to $1920.

 

My suggestion to you is  STAY OUT OF THE GOLD MARKET BY ALL MEANS.

 

Seriously. I mean that.

 

You have no clue about Gold or the purpose which it serves.

 

If you did you would not even ask such a question.

 

Or if you are really interested then READ BOOKS about the History of Money and the History of Gold.

Fri, 01/17/2014 - 23:08 | 4343125 fijisailor
fijisailor's picture

As long as there is widespread faith in fiat money the manipulation can continue.  Creating trillions out of thin air can overwhelm the physical market.  

Sat, 01/18/2014 - 00:29 | 4343150 Yen Cross
Yen Cross's picture

   So you have faith in "port of call" trade? I like your idea.

Sat, 01/18/2014 - 07:06 | 4343609 fijisailor
fijisailor's picture

Port of call trade is awesome.  For example: $1 bottles of rum in Panama go for $50 in Tahiti.  .22 shells go for $20 for 50 in the Marquesas Islands.

Sat, 01/18/2014 - 00:07 | 4343252 grekko
grekko's picture

Like Highlander...there can be only one! ...GOLD!

Sat, 01/18/2014 - 02:25 | 4343425 Yen Cross
Yen Cross's picture

 As a fellow sailer/ never get cockie in "port of call"

Fri, 01/17/2014 - 23:22 | 4343146 Magnum
Magnum's picture

OK I think I will listen to Eric Sprott for unbiased current advice on buying gold LOL.

Sat, 01/18/2014 - 00:07 | 4343249 grekko
grekko's picture

Mag, great decision!

Sat, 01/18/2014 - 01:23 | 4343372 Magnum
Magnum's picture

Eric Sprott on gold is as close as it gets to a real estate agent's opinion on when to buy real estate.

Not a single day in years this guy wasn't talking about the virtues of buying gold. And guess what, he owns mines.

Sat, 01/18/2014 - 06:06 | 4343572 Squid-puppets a...
Squid-puppets a-go-go's picture

if you lived for 5000 years and talked up gold every day, you'd be right everyday for 5000 years. whether you had a position or not.

 

Sat, 01/18/2014 - 09:23 | 4343704 eddiebe
eddiebe's picture

Granted, Magnum, but so what, we all talk our book, and at least he puts his money where his mouth is.

Sat, 01/18/2014 - 03:10 | 4343451 dognamedabu
dognamedabu's picture

Yeah I know how you feel. When the MSM and central banks try to sell me on their debt fiat currency I feel the same way. 

Sat, 01/18/2014 - 04:39 | 4343523 enloe creek
enloe creek's picture

sprott's got it you don't $$$$$$$$$$$$$$$$$$

Fri, 01/17/2014 - 23:24 | 4343154 andrewp111
andrewp111's picture

Right now China is buying, but if the Shadow Bank economy over there implodes who knows what might happen. They might be forced to dump gold. The same is true with Europe, if their exports to China suddenly dry up. The author might be right that manipulation can't last too long, but that does not mean that the price of Au will go up.  People are often surprised by the actions of markets.

Fri, 01/17/2014 - 23:50 | 4343211 DirkDiggler11
DirkDiggler11's picture

I agree 100%. The only headwind I see for gold that would make me pause my stacking would be an implosion in China. You are correct, business, citizens, and even the Chinese govt would be forced to dump gold.

Sat, 01/18/2014 - 00:06 | 4343248 grekko
grekko's picture

You got to be kidding me.  The Chinese gov will never dump gold.

They are in it for the long haul.

Sat, 01/18/2014 - 01:49 | 4343392 RaceToTheBottom
RaceToTheBottom's picture

Since the Chinese have been printing more than the US (as reported here by ZH), do you think that they could begin to act like the FED, once they get enough Gold gathered to be treated like a world currency?

Sat, 01/18/2014 - 00:46 | 4343324 Tall Tom
Tall Tom's picture

Come on China collapse...

 

Let me tell you that I will be more than happy to watch China implode. They will not dump their Gold.

 

But what they will do is dump their $2 Trillion in US 10Yr. Bonds and US Dollars.

 

That Tsunami of Debt being repatriated to American Shores will cause one hellacious spike in Monetary Velocity.

 

Can you spell H Y P E R I N F L A T I O N and the DESTRUCTION OF THE US DOLLAR???

 

Nothing would make me more happier than to witness that. Nothing. This is much more of a pleasurable thought than getting laid.

 

It sends Endorphins throughout my Brain.

 

Man I am praying for a Chinese Financial Collapse to end the FRAUD and to make Trolls like you understand the meaning of FAMINE and SUFFERING.

 

Collapse baby collapse.

Sat, 01/18/2014 - 03:26 | 4343458 sandiegoman
sandiegoman's picture

It is the ones who beg for it that are the first to cry when it comes.

Sat, 01/18/2014 - 13:58 | 4344120 Tall Tom
Tall Tom's picture

One has no aptitude for understanding satire???

 

China will dump US Treasuries. That is what will transpire as their Credit Bubble is popping. The East values Gold...unlike that of the West.

 

People in the West see it as a Trade and not for what Gold is...MONEY.

 

Since Gold is at the arex of Exter's Inverted Pyramid it is the last asset that I would divest. I get rid of the "Bad Money" first.

 

The asians are not stupid people.

 

You live in San Diego. Visit Clairemont Mesa Garage Sales and tell me how many Asians sell Gold.

Sat, 01/18/2014 - 04:37 | 4343519 enloe creek
enloe creek's picture

china dump Treasuries? naw, they will deposit them at the fed and use them as reserves, then lever up 100 to one and buy american farmland and producers so we can work for them at slave wages they are not rivaling the worlds superpower because they are sort sighted right?

Sat, 01/18/2014 - 14:09 | 4344143 Tall Tom
Tall Tom's picture

There are cracks appearing in the Chinese Credit Bubble Market as I write.

 

Remember back in the late 1980s when Japan was buying up America and then they had a Housing Bubble which burst?

 

The same is being played out in China.

 

The USA exports its inflation and the Hot Money feeds into the Foreign Property Markets.

 

The large difference between Japan and China is that Japan did not buy Gold.

 

China has tapered from purchasing US Treasuries at this point. There are Grave Structural Problems with their Markets and they are on the precipice of Collapse.

 

The money is headed toward American Shores as you write. And they are heavily levered.  But China will be forced to liquidate those levered assets and that will further depress American Real Estate Markets.

 

When Japan did the same thing back in 1989-1991 it triggered a very deep recession in 1991-1992 in the USA. Japan was liquidating American Holdings.

 

The same thing will happen with China.

Sat, 01/18/2014 - 00:47 | 4343330 vie
vie's picture

I see an implosion coming.  How else is everyone else going to be able to load up on all their missing Gold for cheap?

Sat, 01/18/2014 - 03:30 | 4343462 sandiegoman
sandiegoman's picture

Check out the last Asian financial crisis. They wet selling everything to get their hands on dollars. Gold will go with it.

Sat, 01/18/2014 - 14:43 | 4344220 Tall Tom
Tall Tom's picture

Maybe you will understand just what set the Asian Crisis off when you put it into this perspective...

 

SOURCE: http://www.usagold.com/gildedopinion/corriganbubble.html

 

It seems hard to believe that in June 1997, then-PM Hashimoto of Japan caused a furor (not to mention a sharp decline in the Greenback's value) when he expressed his frustration with the usual US hectoring of his country's main creditor, saying:-

'Our American friends were paying little attention to maintaining the value of the U.S. dollar as an international key currency, and we were tempted to sell off (bond holdings). In terms of funds, it is true that we have not really made the right choice, shall I say, or advantageous choice. By selling Treasury bonds, we might increase our gold holdings. That is an option we had. Among countries around the world, there are many who hold their foreign currency reserves in the form of U.S. Treasury bonds. As long as they continue to maintain the U.S. government bonds -- even when the U.S. dollar is weakening relatively -- it is because these countries are holding onto these government bonds that the U.S. economy is being maintained. Many people, in fact, don't realize this.'

`I hope the U.S. will engage in efforts and cooperation to maintain exchange stability so that we will not succumb to this temptation to sell off government bonds and switch our foreign reserves to gold.'

 

 

Sat, 01/18/2014 - 05:15 | 4343548 Wile-E-Coyote
Wile-E-Coyote's picture

Has it crossed your mind that China is buying Gold because it knows the system is going to collapse? When everything blows up and they have their 20k tonnes they will be in a position to wipe the slate clean and introduce a new currency backed by Gold. The Chinese are not daft.

Sat, 01/18/2014 - 00:05 | 4343246 grekko
grekko's picture

I disagree.  No matter what happens with the shadow banks, the Chinese gov has gold as a hedge.  They'll be hurt if the shadow banks dissolve into the mist, but the gov over there will still have their gold to fall back on.  Like James bond, they'll be shaken, but not stirred.

Sat, 01/18/2014 - 00:12 | 4343260 ms8172
ms8172's picture

I disagree somewhat.  If China implodes you can guarantee that GOLD  & SILVER will sky-rocket on global uncertainty.  Example, could you imagine what would happen to US equity markets if China imploded tomorrow?  Everyone would run to supressed assets. Especially GOLD & Silver because the type of implosion you are talking about will have something to do with currency debt.  However, there will be an immediate shortage of physical and people calling for their precious metals in the paper markets.  It's only after CHina or Europe announces they need to unload their GOLD that prices will come down.  By that time, the "proper" accounting affect which would have taken place for the price of GOLD & SILVER.... much! much! higher than it is today.  Could be 10,000 an ounce in this scenario.. who knows. 

Sat, 01/18/2014 - 11:03 | 4343817 FLHRS
FLHRS's picture

It is not China that you need to watch, it's Europe.  PMs should be insurance.  And like other insurance, some people are under insured and others are over insured.

Sat, 01/18/2014 - 15:26 | 4344286 nightshiftsucks
nightshiftsucks's picture

Unload gold ? For what,dollars ?

Fri, 01/17/2014 - 23:29 | 4343163 horot
horot's picture

Now I want to see what Paulson's response will be.

Fri, 01/17/2014 - 23:57 | 4343173 ms8172
ms8172's picture

I hope the manipulation continues so that I can build my inventories.  It's not hard to figure out that the equity market and the FED printing will end badly.

 

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