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Redrawing The Exter Pyramid: Paul Mylchreest's Latest Observations On The Flow Of Funds And More

Tyler Durden's picture




 

From Paul Mylchreest's latest Thunder Road Report:

I’ve redrawn Exter’s pyramid to show how I see the flow of funds out of all kinds of “paper” assets, like cash and deposits, all varieties of debt obligations, and derivatives into real money, i.e. physical gold and silver (and the related equities – although that is a source of great pain for me at the moment). Even gold and silver ETFs which are either un-backed or where the backing is questionable (and we all know which ones) could come to grief. Look at Eric Sprott’s gold and silver ETFs which are  trading at premiums of 2.1% and 19.4%, respectively. Investors believe that Eric Sprott is an honest man and his funds really do own the gold and silver bullion they claim. Other funds trade at a discount. While Bernanke may not be quite as stupid as he sounds, it’s important to realize that many powerful bankers and politicians, and the more powerful people behind them, are far from stupid. You would be naïve if you didn’t believe that the end game is as obvious to them as it is to us. The most powerful of these people are long-term planners and skilled at turning crises to their own advantage. Indeed, the modus operandi, used time and time again, is best summarized as: PROBLEM, REACTION, SOLUTION.

Much more in the full report:

TRReport24

 

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Tue, 08/09/2011 - 12:52 | 1542930 Frog-And-Toad
Frog-And-Toad's picture

I am in heavily with silver, and I am wondering if this is a hit-job by the TBTFs.  When is silver going to spike?

Tue, 08/09/2011 - 12:55 | 1542938 hack3434
hack3434's picture

When the correlation to oil breaks. 

Tue, 08/09/2011 - 13:17 | 1543036 Motley Fool
Motley Fool's picture

My sympathies to the BTFD silver crowd. So close, but chose the wrong metal.

Tue, 08/09/2011 - 13:25 | 1543065 hack3434
hack3434's picture

900% or so over 11 years is not too bad. 

Tue, 08/09/2011 - 13:25 | 1543066 Manthong
Manthong's picture

Come back and talk to us in a year about that.

Tue, 08/09/2011 - 14:00 | 1543196 lawrence1
lawrence1's picture

You are just a plain fool to base an opinion on so short a time period.

Tue, 08/09/2011 - 14:00 | 1543197 Spirit Of Truth
Spirit Of Truth's picture

I know this will leave some puzzled, but it seems to me that on the other side of that pyramid should be "God".

This is the struggle between man's love of money (Mammon) versus God IMHO: http://spiritoftruth.org/Thesis/Intro/#5

Right now money and wealth is what everyone apparently loves, but I think this is a catastrophic mistake now being realized.

JMHO

Tue, 08/09/2011 - 14:03 | 1543209 Clorox Cowboy
Clorox Cowboy's picture

+1

Tue, 08/09/2011 - 16:08 | 1543674 False_Profit
False_Profit's picture

what does it profit a man if he gains the entire world, but loses his soul...

Gott mit uns...

Tue, 08/09/2011 - 16:42 | 1543870 Temporalist
Temporalist's picture

Go tell it to your preist...after he get's off that little boy.

Tue, 08/09/2011 - 21:10 | 1544828 knowless
knowless's picture

Religion must be separated from the church for it to be of any merit, churches divide people, they are a governmental structure, spirituality, when actualized in a manner as to bestow an understanding of the workings of humanity, and to provide a framework of working within their structures peaceably is indispensable. This does not require a god, but many people in their understanding do, and so I don't hold their belief against them, as long as this facet of their thinking leads them to be more conscientious individuals.

 

fuck the baby raping, gold hoarding, war funding catholic church, and any other like it. may they burn in the hell they created.

Tue, 08/09/2011 - 14:11 | 1543242 fiddler_on_the_roof
fiddler_on_the_roof's picture

+100. disliking silver in ZH is yelling "n*gger" in south LA.

you are now marked. tread carefully here.

Wed, 08/10/2011 - 11:02 | 1546386 Motley Fool
Motley Fool's picture

Silver is pretty and all, but it's just an industrial metal now. Years of price suppression has accomplished that much.

Tue, 08/09/2011 - 12:59 | 1542947 Cole Younger
Cole Younger's picture

Silver is tied to industrial production. With the current economic contraction, the industrial demand will be less so it wouldn't surprise me if it trends down for awhile. Long term, it will go up as the global monetary destruction continues.

Tue, 08/09/2011 - 13:03 | 1542968 trav7777
trav7777's picture

Silver doesn't belong at the bottom of that pyramid if Platinum and Palladium aren't there.  Hell, may as well add Rhodium and Ruthenium too

Tue, 08/09/2011 - 13:14 | 1543019 Manthong
Manthong's picture

I like Maloney's take on it ...  more or less:

Platinum and the PGM's are too rare and hard to mint, melt, divide, etc.

Platinum is a commodity.. always was and always will be.

Silver is a monetary metal.. always was, always will be.

 

Tue, 08/09/2011 - 14:00 | 1543199 InconvenientCou...
InconvenientCounterParty's picture

platinum and palladium are near inert and they are both refined by melting. Very energy intensive. These two should correlate nicely with crude and the auto industry. When they don't, it's an opportunity.

If QEx.x is announced, they should both rip.

Tue, 08/09/2011 - 14:04 | 1543218 lawrence1
lawrence1's picture

Think again. Silver has a long history of being money, and just because it hasnt been recognized as such in the

little ole USA in the last 40 years only means we have a few totally ignorant ahistorical generations.  Those other rare metals have not, to my knowledge at least, served as money ...and the pyramid is about money, buddy.  So read some history to spice up your ignorance.

Tue, 08/09/2011 - 14:37 | 1543333 FreeMartinArmstrong
FreeMartinArmstrong's picture

how many central banks own stockpiles of silver ?

zilch

thats wright

Tue, 08/09/2011 - 18:59 | 1544455 Manthong
Manthong's picture

None anymore.. or at least yet..  until the great remonetization occurs.

It is not out of the realm of possibility to see silver flowing back into banks in exchange of newly valued units of exchange.

I might flow some of mine back when a couple hundred ounces or so  of Ag is equal to a new SUV.   

Tue, 08/09/2011 - 13:06 | 1542984 gmak
gmak's picture

IF you look at the price ratio of physical gold to silver, it has spent the most time in the band of  50 - 60, followed by 60 - 70. occasionally it has been in the band of 40 - 50. Rarelly (only when silver hit near 50 earlier this year) has it been below 40 times (gold / silver).

The odds are that silver will spike only when gold does - and less so - unless a new band of gold / silver prices is to become dominant = a paradigm shift.

Silver outperformed gold over the 1995Q1 - 1997Q4, 2003Q4 - 2008Q1, and 2009Q1 - 2011Q1 periods.  This outperformance appears to begin when the gold / silver price ratio  gets above the 70 times area (usually when it approaches 80).

The ratio is presently at 40 - 41 ish. History indicates that gold should outperform now until the price ratio gets higher - especially since it recently touched a 20 year low (It may be a longer time period but my data doens't go back before March 1995).

Cheers.

Tue, 08/09/2011 - 13:38 | 1543109 Oracle of Kypseli
Oracle of Kypseli's picture

Safest bet: gold cals silver puts at 10/7 in value.

Tue, 08/09/2011 - 16:52 | 1543919 Temporalist
Temporalist's picture

That is not "history" that is the past 40 years of manipulation.  There is now much less silver above ground than 40, 20, 10, 5 years ago because it is being consumed. 

If you go back to real history, not Central Bank history, there is a 17:1 ratio.  Why would anything change from that if that same ratio exists in the earth's crust?

Tue, 08/09/2011 - 13:10 | 1543004 exi1ed0ne
exi1ed0ne's picture

I'm thinking that at least some of the cause is funds flowing out of silver into gold.  Even so - they both have held up remarkably well all things considered.  Gold gives me confidence, while silver has always taught me patience.  (Although I've been with silver since it was $7ish/oz, so I may have a little different perspective)

Tue, 08/09/2011 - 14:03 | 1543210 mick_richfield
mick_richfield's picture

No -- silver doesn't have enough market cap to put a dent in gold.

Tue, 08/09/2011 - 13:18 | 1543039 Manthong
Manthong's picture

Oh, and to the anurans...

Hang in there with the Ag.. they can't keep it down forever.

http://etfdailynews.com/2011/08/06/250-silver-price-target-why-silver-is-poised-to-be-the-greatest-trade-ever-slv-pslv-agq-zsl-gld/

 

Tue, 08/09/2011 - 13:49 | 1543145 Ag Star
Ag Star's picture

Yes it's a hit job, now settle down and have patience. Buy more if you can and your reward will be even greater.

 

Tue, 08/09/2011 - 14:10 | 1543240 lawrence1
lawrence1's picture

Exactlly.  As Sprott remarked, the thugs are attacking silver to try to keep gold down ... and silver is their great vulnearability .... so Im buying and trading gold for silver now.  Choosing between fiat currencies is like trying to select the least ugly .... choosing between gold and silver is like trying to select Miss Universe .... you cant go wrong... and you can have both ... what a fucking dilimena!

Tue, 08/09/2011 - 12:53 | 1542932 anynonmous
anynonmous's picture

redrawing summer vacation

President Barack Obama and the First Family are expected to return to the Vineyard in a little over a week for their third consecutive summer vacation on the Island.

 

but

The fire chief said the incident serves as a reminder to homeowners about attentive use of gas grills.

http://mvgazette.com/article.php?31453

Tue, 08/09/2011 - 12:56 | 1542937 kito
kito's picture

While Bernanke may not be quite as stupid as he sounds, it’s important to realize that many powerful bankers and politicians, and the more powerful people behind them, are far from stupid. You would be naïve if you didn’t believe that the end game is as obvious to them as it is to us

that little thing called "ego" trumps reason in the smartest of men

 


Tue, 08/09/2011 - 13:13 | 1543016 brodix
brodix's picture

They are running a classic feedback loop of consolidation. There is a tipping point though, where all that accumulation of energy ignites and radiates back out again.

Tue, 08/09/2011 - 13:23 | 1543060 Calculated_Risk
Calculated_Risk's picture

supernova?

Tue, 08/09/2011 - 12:56 | 1542941 sunnydays
sunnydays's picture

Look at the relationships of S&P and wonder what was really behind the downgrade, due to the players of the company.  Mcgraw Hill owns S&P. 

 

I have been playing with the interactive maps of relationships on it.  There is a rabbit hole that seems to be going deep.

http://sherriequestioningall.blogspot.com/2011/08/was-s-downgrade-of-us-...

Tue, 08/09/2011 - 13:03 | 1542971 fuu
fuu's picture

First it was S&P was wrong.

Second it was the Tea Party's fault.

Now we are on to Revenge, Soros, and the victimization of the US at the hands of evil short selling speculators.

Tue, 08/09/2011 - 13:11 | 1543007 Silver Dreamer
Silver Dreamer's picture

Well, it certainly isn't the massive debt or out of control spending!  ;-)

Tue, 08/09/2011 - 23:41 | 1545150 StychoKiller
StychoKiller's picture

The Creature (from Jekyll Island!) STILL walks among us -- where is the mob with torches and pitchforks??

Wed, 08/10/2011 - 09:12 | 1545777 fuu
fuu's picture

Exactly my point.

Tue, 08/09/2011 - 13:18 | 1543029 sunnydays
sunnydays's picture

Fuu - That is not what it is saying.  Considering the ratings agency are all fraud and simply protect Wall Street and the elite, who pissed off who?

I think looking at the relationships is enlightening, because those people would not hurt themselves or their own financial situations for no reason at all. 

So the article questions and shows who the power players are behind S&P and why did they step out of line from the fraud of ratings?

Tue, 08/09/2011 - 13:14 | 1543021 gangland
gangland's picture

 

Great job on the research. Rabbit hole indeed, tangled web. Bookmarked. look forward to more.

I wonder on what date did spooz really begin to hammer away at the rating? maybe this thing predated a murdoch response.  this is just elite secret wars behind the scenes. 

when elephants fuck, little people get stomped.

 

 

Tue, 08/09/2011 - 21:44 | 1544921 WmMcK
WmMcK's picture

Three more rules regarding elephant breeding:

1) It's done at a high level.

2) It involves a lot of squawking.

3) It takes a couple of years to get results.

Tue, 08/09/2011 - 15:07 | 1543455 sgt_doom
sgt_doom's picture

Oh puuuhlease, already!

S&P (as well as Moody's and Fitch) have been in the crime corp matrix since before 1900!

S&P colluded with the Office of the Comptroller for the Currency (when it still existed) back in the Bush administration when the OCC cited that recondite National Bank Act of 1863 to nullify, or interdict, the individual state governments from going after the banksters for their predatory lending practices (remember a guy called Spitzer, whom they took down?).

S&P threatened to lower the bond ratings for the states and their local municipalities should they go after them legally.

Perhaps you may wish to read the classic by a stooge named Moody (the original Moody clown, I believe), titled, The Truth About Trusts -- not only most informative with with outstanding diagrams in it, but explains the ownership of AT&T (Hint: Rockefeller...Rockefeller....Rockefeller.... and still owns it via foundations, trusts and holding companies).

Nice dot connection diagrams, though......

Tue, 08/09/2011 - 12:58 | 1542943 Cone of Uncertainty
Cone of Uncertainty's picture

Man when the nod is given and the order comes down the chain of command to flip the script on trying to save these insolvent banks, watch the fuck out.

It will be as bad as many have predicted.

The elites already have their gold, but they are just simply trying to extract as much wealth from the sheep now while they have a little more time left.

In the end--death and destruction, pain and misery for the common serf.

Tue, 08/09/2011 - 13:04 | 1542975 Cole Younger
Cole Younger's picture

"In the end--death and destruction, pain and misery for the common serf." I have to disagree because in the end, the common serf will be executing the elites. History does not change when it comes to peasants vs. royalty. Class warfare does exist and the peasants in the U.S. out number and out gun the elites. Mathmatically, the elites do not have a chance.

Tue, 08/09/2011 - 13:13 | 1543015 Silver Dreamer
Silver Dreamer's picture

Run the numbers through that equation again, and be sure to include nuclear weapons use as a variable.

Tue, 08/09/2011 - 13:21 | 1543047 robobbob
robobbob's picture

I would suggest reading up on some alternative accounts of history.

The French Revolution, the Bolshevik Revoltuion, and the rise of fascism. When you see who had a hand in those events, you'll find its not rich verses poor, some sort of cleansing of society by the down trodden, but a clash of who thinks they are on the inside with the elites, and who really is.

Some higher ups will be thrown to the dogs, but the real in-insiders will be safe in their enclaves, still calling the shots.

Just remember to question who someone is really working for when they wave a flag in your face and yells "get'em."

Tue, 08/09/2011 - 13:09 | 1542997 Man Bear Pig
Man Bear Pig's picture

Indeed. It's hard to beat FOFOA's analysis

Tue, 08/09/2011 - 13:06 | 1542985 Dr. No
Dr. No's picture

ETFs? Does he work for sprott? In all seriousness, please provide cited reference showing deflationary forces when cash supply is under central bank control.

Tue, 08/09/2011 - 13:09 | 1542995 TradingJoe
TradingJoe's picture

All in All, Can Kicking IS Slowing DOWN!

Tue, 08/09/2011 - 13:27 | 1543072 brodix
brodix's picture

I think they are to the point of kicking the dead cat down the road, to see if it will bounce one more time.

Tue, 08/09/2011 - 13:18 | 1543038 buzlightening
buzlightening's picture

Oh yes, the collpse of the fiat paper monetary system.  The end game.  I illusion that paper money has more than percieved value. They don't call gold/silver the go to monetary store of value, when paper goes bad.  The substantial assets, those with substance can never go to zero as paper fiat monies with bond; debt obligations circling the milky way.  When will the end game; plug be pulled on the monetary freak show.  Don't know but I sure as hell won't be a zero paper money/bond holder when it happens.  

Tue, 08/09/2011 - 13:28 | 1543075 gmrpeabody
gmrpeabody's picture

What?

Tue, 08/09/2011 - 13:23 | 1543057 Sudden Debt
Sudden Debt's picture

I think the yellow triangle at the bottom need to be about 100 times smaller. But for the rest I like it :)

About 0,01% of all funds have 0,1% of gold & silver reserves. That's as good as nothing.

And if you're handling hundreds of billions and billions of dollars, it isn't easy to move that into PM's.

And that movement hasn't happened AT ALL yet!

£And according to theexter pyramid, gold should be at 60.000$ and silver at 4000$

That will take a few years, but TIME FLIES WHEN YOU'RE HAVING FUN!

 

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