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Message: Ed Steer this morning
Buy A Silver Coin - Destroy J.P. Morgan
bad day for the precious metals, but the HUI takes it in stride. Ireland's financial woes go supernova. No inflation? Tell it to your Thanksgiving turkey. Richard Russell: Speculative Phase of Gold Bull Lies Ahead... and much more."
Yesterday in Gold and Silver
Well, the big sell-off that started in Asia on Friday morning found an intermediate bottom shortly after London opened for trading yesterday morning. Then shortly before the London p.m. gold fix rolled around at 10:00 a.m. Eastern time, gold had recovered about eight bucks from the London opening low.
But that was it for the day, as the selling began anew... and by 12:35 p.m. Eastern time, another $35 had been shaved off the gold price. This was its low of the day [$1,359.00 spot]... and the price recovered a few dollars doing into the close, but still finished the day down $40.10... 2.85%.
Silver, which is the center of the universe for JPMorgan et al, really got it in the neck. The price pattern was virtually the same as gold's... and by the end of trading in New York yesterday, the silver price was down $1.64 from Thursday's close... 5.92%.
In all fairness, however... both platinum and palladium were down just as much as silver. Platinum was down 5.02%... and palladium was down 4.92%.
The dollar, which had risen about 20 basis points during early Far East trading, began to roll over at 3:00 a.m. Eastern time... which happened to be 8:00 a.m. in London... which just happened to be the interim low for both gold and silver on Friday. Then the dollar fell almost 70 basis points to its low of the day around the London p.m. fix at 10:00 a.m. Eastern time [3:00 p.m. in London]. This seven hour long drop in the dollar corresponded to the $8 rise in gold between the London open and the high of the day at 10:00 a.m in New York. Then, as the dollar rose about 50 basis points between 10:00 a.m. and 1:00 p.m... gold got creamed for $35.
The dollar then traded sideways into the close... and ended up basically unchanged on the trading day... which I always peg as 6:00 p.m. Eastern time the previous evening... which is when trading starts for the new business day in the Far East... in this case, Friday. The ino.com chart I use reflects that below [down 0.11%]... even though the chart starts at midnight Eastern time... and shows the dollar down about 30 basis points from that point.
Was the dollar a factor in yesterday's price action? Not really... although it followed the gold and silver prices almost to the tick. To tell you the truth, I consider the currency markets be just as manipulated as every other market. As GATA's Chris Powell keeps saying... "There are no markets anymore... only interventions."
The HUI peaked at the usual 10:00 a.m time... the top of the gold and silver market... and the low of the dollar's move on Friday. The gold stocks declined until gold and silver bottomed around 12:30 p.m. in New York... and then recovered a bit of their losses. The HUI finished down 2.81% on the day.
But, considering the fact that gold fell 2.85% on the day... this is a big win in my books, as a gold price decline of this size in the past would have seen a loss in stock value of two or three times this amount.
Here's the 5-day HUI graph. It was a rollercoaster kind of week... with the gold stocks basically finishing unchanged. Considering the fact that gold lost about $40 on the week, just count your blessings, as this isn't the end of the world... although some act like it is.
The CME Delivery report showed that 151 gold and 21 silver contracts were posted for delivery on Tuesday. For the first time I can remember, JPMorgan traded from its clients account only in both metals. Maybe there's hope for them yet.
And, for a change, there were no changes reported for either GLD or SLV yesterday.
But the U.S. Mint had report yesterday. They showed that another 6,500 ounces of gold eagles were sold, along with another 350,000 silver eagles. Month-to-date, sales are up to 39,500 and 1,940,000 respectively.
There was a fair amount of activity reported at the Comex-approved depositories on Thursday... but by the time the dust had settled, they only showed a net withdrawal of 3,181 ounces of silver. The link to the action is here.
Because of the Remembrance Day holiday on Thursday, the Commitment of Traders report will not be out until Monday... and I'll post Ted Butler's updated "Day of Production" graph in my Tuesday column.
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¤ Critical Reads
SubscribeStupidest Lawsuit Ever Has Us Suing Ourselves
I have a reasonable number of stories today, but only a couple that are gold related... and I'll post them in the middle of today's sequence of articles.
Reader Martin Arnest is responsible for today's first story. It's an op-ed piece by Jonathan Weil over at Bloomberg that was posted on their website on Thursday. The headline reads "Stupidest Lawsuit Ever Has Us Suing Ourselves". You just know that the U.S. government is out of control when you read something like this. Even the boys over at Britain's Monty Python's Flying Circus couldn't have dreamed up a scenario as bizarre as this one. It's not an overly long piece... and the link is here.
The 20 Cities With The Most Underwater Homes
The next story is a real estate offering from reader Julius Adams. It's a posting over at businessinsider.com that bears the headline "The 20 Cities With The Most Underwater Homes". In Las Vegas, for instance, four out of five mortgages are now under water. The U.S. real estate market is in a world of hurt with absolutely no bottom in sight for years to come. Back in January of 2007, when the sub-prime mortgage problem first surfaced, I made the prediction that the U.S. real estate market would bottom sometime in 2013. I can tell already that this prediction has now become wildly optimistic. This is a quick read... and the link is here.
Irish Bank Borrowings From ECB Jump To €130 Billion, Or €100,000 For Every bp In Anglo Irish Sub CDS
Reader 'David in California' provides the following post from zerohedge.com. The financial situation that Irish banks [and the Irish government] find themselves in, has now gone supernova. The headline reads "Irish Bank Borrowings From ECB Jump To €130 Billion, Or €100,000 For Every bp In Anglo Irish Sub CDS". The story is one paragraph... and one very ugly chart... which you have to click on to see the whole thing. The graph is worth the trip all by itself... and the link to this must read article is here.
California Muni Bond Fund Shellacking
David has another piece today that's very much related to the last story on Ireland. It's a posting over at ritholtz.com that's headlined "California Muni Bond Fund Shellacking". There are two lines of text and three scary looking graphs that are current as of the close trading on Friday. It's well worth the look... and the link is here.
U.S. of "Irony and Hypocrisy": We're No. 1 on the Planet... At Currency Manipulation, Pento Says
The next story showed up as a GATA release yesterday. It's a story posted over at finance.yahoo.com and bears the headline "U.S. of "Irony and Hypocrisy": We're No. 1 on the Planet... At Currency Manipulation, Pento Says". Michael Pento, senior economist at Euro Pacific Capital, also said that "The credibility of this country is falling faster than the dollar... One day you'll have a Treasury auction without indirect bidders and only Ben Bernanke will want to buy U.S. debt." The story is very short and very much worth the read... and the link is here.
Richard Russell: Speculative Phase of Gold Bull Lies Ahead
My next three stories are all gold or silver related. The first is from reader Peter Handley and is all about Richard Russell and the current bull market in both gold and silver that we are in the early stages of. It's posted over at the tradersnarrative.com website and is headlined "Richard Russell: Speculative Phase of Gold Bull Lies Ahead". For all of you that are having a hard time with the current correction... and need a little hand-holding, this is a must read... and the link is here.
Kamikaze Attacks in the Silver Market
Interviewed by King World News, GoldMoney founder and GATA consultant James Turk wasn't much impressed by yesterday's attack on gold and silver. The silver supply, Turk says, is in fact tighter than ever... and Friday's attack will only remove more real metal from the market. Excerpts from Turk's interview are headlined "Kamikaze Attacks in the Silver Market" and the link is here.
Max Keiser: Buy A Silver Coin, Destroy JP Morgan
My last precious metals-related story is about silver... and is another story courtesy of 'David in California'. It's also another piece from the zerohedge.com website... and it's headlined "Max Keiser: Buy A Silver Coin, Destroy JP Morgan". As long-time readers may be aware, I'm not much of fan of Max Keiser... nor Alex Jones, who is interviewing Keiser... but it's a wonderful idea whose time has come. It's a one-paragraph read... and a 3-minute interview... and the link is here.
No Inflation? Tell it to your Thanksgiving turkey
The next story is a GATA release that Chris Powell has headlined "No Inflation? Tell it to your Thanksgiving turkey". It's a Bloomberg piece that talks about the record-high turkey prices that face consumers as they go to buy their traditional Thanksgiving meal... and the link is here.
Courts Helping Banks Screw Over Homeowners
My last story is your big read of the day. It's an essay by Matt Taibbi from the November 25th issue of Rolling Stone magazine. The headline reads "Courts Helping Banks Screw Over Homeowners". Retired judges are rushing through complex cases to speed foreclosures in Florida. Because of reporting like this, the entire foreclosure process in the United States has basically ground to a halt. This 8-page article, in Taibbi's usual pithy prose, takes you deep inside the process. I thank Nick Laird for sharing it with us... and the link is here.
¤ The Wrap
There are no markets anymore... only interventions. - Chris Powell, GATA
Today's blast from the past was written in 1866... and the first performance was given on 24 April 1866 by Otto von Königslow with the composer himself conducting. The concerto was then considerably revised with help from celebrated violinist Joseph Joachim and completed in its present form in 1867. Here is world-renowned violinist Joshua Bell playing the stunningly beautiful Adagio from Max Bruch's First Violin Concerto in G Minor, op. 26. It's nine minutes of pure heaven on earth, as the audio quality on this youtube.com video is divine... and the link is here.
Well, it wasn't a pleasant day yesterday... but it's not the end of the world, either. We've been here before, survived it... and moved higher every time. This episode will prove no different.
Yesterday's volume in gold was monstrous once again... well in excess of 300,000 contracts, even with the roll-overs removed. In silver, the net volume was north of 100,000. More longs were forced to dump their positions as the bullion banks covered shorts... and/or went long themselves.
This is all highly illegal, of course. But the CME [which would be a proxy for all the bullion banks] has told Gensler at the CFTC to drop dead over position limits... so it will be interesting to see how this turns out. But Bart Chilton let the proverbial cat out of the bag with his comments on the silver market... and we'll have to see what the market forces do with that. Ted Butler now says that it almost doesn't matter if these lawsuits succeed or not, as the publicity for JPMorgan and their ilk has put a big bull's-eye on their back if anyone should try to take a run at the silver market... and it wouldn't take many people or much money.
My bullion dealer here in Edmonton had his biggest silver sales day in his company's history on Friday, so if the product is flying out the door here, I can only imagine what it's like south of the 49th. My dealer says that deliveries for new orders are now into January for a lot of bullion products that he sells.
By the way... and one last time... in case you missed my e-mail on Tuesday, you might want to check out "The Case for $60 Silver"... and the link to that report is here.
To put yesterday's [and this week's] action into some historical perspective, here's a chart that I asked Nick Laird over at sharelynx.com to send along. It shows the Dow/Gold ratio for the last 200 years... and what's happened to it since the "Creature From Jekyll Island" showed up on Christmas eve of 1913. When priced in gold, the Dow is currently down 82% from its 1999 peak.
Just over three years ago when I started writing for Casey Research, gold was under $800... and silver was under $14. Three years from now we'll have prices for these metals that, quite frankly, you just won't believe. So take a pill, put your feet up, close your eyes... and listen to that violin piece one more time to clear your mind.
Then enjoy what's left of your weekend... and I'll see you here on Tuesday.
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