A surge in coronavirus cases, an expansion of economic lockdowns, and an explosion in unemployment claims hit markets this week. But this deluge of bad news didn’t seem to catch investors by surprise. Instead of crashing to new lows, the stock market held within a trading range and rallied yesterday following the release of a horrific jobs report. Full Story
Unequivocally, gold does not trade on the Comex. The Comex trades paper gold derivatives. It is a futures and options exchange on which a small amount of 100 oz. gold bars change ownership each contract month. The transfer of title is facilitated by the creation of an electronic record called a “warrant.” But even these “warrants” which assign title to specific bars are derivatives. Presumably gold is “delivered” to the parties who stand for delivery (the “stopper”). But that “delivery” most commonly is the electronic transfer of a warrant from the entity short a paper gold contract to the entity who is long the same. Full Story
Two weeks ago, during a March 17 address to the nation in response to the COVID-19 outbreak, President Donald Trump asked that Americans work from home, postpone unnecessary travel, and limit social gatherings to no more than 10 people. And last week, on March 27, Trump signed a stimulus package of over $2 trillion dollars to provide relief to an economy on the precipice of collapse. Full Story
Gold miners’ stocks have endured epic volatility in this past month, literally crashing before blasting back higher in a violent V-bounce. That preceding wicked capitulation flush savagely forced the weak hands out, paving the way for gold stocks’ next major upleg. The resulting fierce rebound signals it is already underway, with plenty of speculators and investors now chasing the huge gains this sector is famous for. Full Story
The banks that are begging for bailouts still cling to their bonuses. To terrorize us into letting them keep their bonuses, the banksters are threatening to release the button on their suicide vests and blow themselves up by not taking the bailouts if they can’t have their bonuses. Full Story
Turning to the stockmarket itself, we see on the latest 5-month chart for the S&P500 index that while the Fed’s big intervention stoked a massive short covering rally, it DID NOT break it out of our expanding downtrend channel, which now looks set to turn it down into a really severe downleg, made much more likely by the factors that we have considered above. Full Story
When it comes to the recession that is being created by the pandemic lockdowns - then the U.S. government and Federal Reserve have no intention of just letting the market forces play out. Instead, the intention is to contain a potential deeper round of crisis with the most extreme interventions yet. One very real possibility is for the Fed to follow the European Central Bank and the Bank of Japan, and to spend trillions of dollars to buy government (and corporate) debt while creating negative interest rates. Full Story
Silver is real money, not a debt-based fiat currency that will eventually fail. Silver bullion production requires capital and effort to mine and refine. We use it for solar panels, iPhones, cruise missiles and thousands of other items. Silver is monetary sanity. Full Story
As you might know, a plethora of mining companies around the world have announced they suspended part or all of their operations. It’s probably worse than we know, as I suspect other miners have curtailed activities even if they haven’t announced it. Full Story
With mines, mints, and refineries closed around the world due to coronavirus, the demand for physical gold has blown through the roof. This has led to some drastic measures by the CME Group, which in turn may have unwittingly sealed the fate of the COMEX and the entire fractional reserve and digital derivative pricing scheme.
This latest crisis began last Tuesday, when the spot market for gold appeared to seize up as the futures price roared ahead following the announcement of formalized QE∞ by the U.S. Federal Reserve. The event has been chronicled by many analysts and experts, with even Reuters and Bloomberg joining in the reporting. Full Story
By: Dave Kranzler, Investement Research Dynamic's Mining Stock Journal - 31 March, 2020
I truly thought I had seen all that was possible in the creation of paper gold when the Comex rolled out its “pledged gold” category which enabled technically insolvent banks like HSBC and JP Morgan – the only two Comex banks to have taken advantage of this new gold derivative product – to use paper gold to satisfy the performance bond requirement of CME clearing members.
But now the LBMA and CME operators have rolled yet another paper gold derivative productive in the hopes that the two entities can stave off defaulting on futures and forward contractual delivery requirements. The Accumulated Certificates of Exchange (“ACE”) facilitates the “fractional” delivery of a 400 oz gold bar. Full Story
The simple answer is that is what they are doing, inflating.
The slightly less simple answer is that they inflated in 2001 and it worked (for gold, silver, commodities and eventually stocks, roughly in that order). It also worked in 2008-2009 (for gold, silver, commodities and eventually stocks, roughly in that order).
The more complicated answer is that we are down a rabbit hole of debt and the hole appears bottomless. What’s a few more trillion on top of un-payable trillions? As long as confidence remains intact in our monetary and fiscal authorities – and COVID-19 or no COVID-19, stock mini-crash or not, confidence to my eye is intact, speaking of my country, anyway – they will inflate, and what’s more, they will be called upon to inflate. Full Story
As I’ve discussed plenty of times before, such massive levels of money printing has historically been supportive of gold. In September 2011, when the Fed was rapidly expanding its balance sheet, the precious metal’s price hit its all-time high of $1,900 an ounce.
With real rates already below 0 percent, the Fed has little choice right now than to jump directly to extreme measures. That means loading up on Treasuries and mortgage-backed securities (MBS) “in the amount needed,” as the central bank put it in a press release dated March 23.
I believe this policy will once again be constructive for gold, and so it may be prudent to consider buying not just physical gold, but also the gold miners. Full Story
All we know right now is that the 1987 and the 2020 crashes are very similar along with what the long term charts are showing. So is this massive fractal thats been developing for many years going to fail right at the moment of truth? It is what it is until it isn’t. Please everyone take care of yourselves and look after your loved ones. Full Story
By: Dave Kranzler, Mining Stock Journal - 30 March, 2020
I found it amusing that Zerohedge tried to take credit for reporting the problem of a physical gold shortage on the LBMA and Comex earlier last week. Several of we “gold bugs” have been discussing and reporting on this issue since before the virus crisis exploded. The Comex has been settling contracts that stand for deliver through EFT and PNT transactions by which the counterparty accepts cash payment or the transfer of the Comex obligation to London for several months.
GATA’s Chris Powell expounded on this in a must-read essay on Friday: “What the heck are those mysterious ‘exchange for physicals,’ the mechanisms by which contracts to buy gold on the New York Commodities Exchange are neither fulfilled by delivery on the Comex nor settled for cash there but transported for supposed delivery elsewhere? Full Story
September 17, 2019 was a significant day in American economic history. On that day, the New York Federal Reserve began emergency cash infusions into the repurchasing (repo) market. This is the market banks use to make short-term loans to each other. The New York Fed acted after interest rates in the repo market rose to almost 10 percent, well above the Fed’s target rate.
The New York Fed claimed its intervention was a temporary measure, but it has not stopped pumping money into the repo market since September. Also, the Federal Reserve has been expanding its balance sheet since September. Investment advisor Michael Pento called the balance sheet expansion quantitative easing (QE) “on steroids.” Full Story
By: Richard (Rick) Mills, Ahead of the herd - 29 March, 2020
The reason for this is simple, when real interest rates (interest rate minus inflation) are low, at, or below zero, cash and bonds fall out of favor because the real return is lower than inflation - if you’re earning 1.6% on your money from a government bond, but inflation is running 2.7%, the real rate you are earning is negative 1.1% - an investor is actually losing purchasing power. Gold is the most proven investment to offer a return greater than inflation, by its rising price, or at least not a loss of purchasing power.
The gold price is tied to low or negative real interest rates which are essentially the by-product of inflation - central banks drop interest rates when the economy is running too hot, demonstrated by an increase in the consumer price index. In the US, this means inflation greater than 2%. Full Story
Rob Goodman of StockPulse interviews Peter Spina on the quickly evolving situation in the gold markets:
"It’s a very unique time and period in history but it’s good to take some action right now and don’t wait. I don’t think this is a time to be waiting for everyone else to take action because when they do you see how supplies get raided very quickly and disappear.” – Peter Spina Full Story
While the coronavirus to be sure is the “black swan” that pricked the stock bubble, market forces eventually would have accomplished the same result. The Fed started bailing out the banking system in September, printing half a trillion dollars to save the banks well before anyone had ever heard of coronavirus or Covid-19. It knew back in September that a massive credit problem was starting to bubble up.
The Prepared Mind invited myself and TFMetals’ Craig Hemke to discuss the Catch-22 global debt problem facilitated by the Central Banks, the eventual monetary system reset and, of course, gold and silver. Full Story
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