The dollar, precious metals, and the 'other' invisible hand

[metalman]

Re: The dollar, precious metals, and the 'other' invisible hand

Are you taking someone's word for this, or is that a high confidence assessment of your own? I don't see it as at all clear that gold has clearly bottomed.

when did you buy into gold and silver? in 2006 or so? if so that explains why you can't see it. these corrections have happened over and over since 2001. as ej says, short term a function of funds, long term of gov'ts. it's just that simple.

I have nowhere seen EJ's meticulous deconstruction of these trades, only a brief dismissal of any collusive thesis.

and i think that's smart. no guarantee that these 'meticulous deconstructions' are looking at all of or even any of the relevant data that explains what happened. just because they supply a lot of data doesn't mean it's good/relevant data. sometimes less is more. pretending to understand what is going on inside a 1000 black boxes run by funds by watching a few inputs/outputs is like trying to figure out where a race car went on a course by measuring the gas consumption and exhaust out the tailpipe. ej's approach? as he's explained it... talk to the drivers and 'put it together'. if you don't have access to the fund managers and can't put it together you measure gas tanks and sniff tail pipes. nuff said.

when do we decide that 780 was the bottom for this latest of the series of corrections since 2001? when itulip made the claim some here said 'that's too low'... such as aaron krowne... and others too high. it's been holding for only 2 wks. when do we decide 'that was it'? that's what we ought to be debating. here's my take...



let's say it's a 2006-ish correction. price fell from a peak of 725 in may 2006 to 567 in june... a 20% correction.

then went up for a month, then traded down slightly below the post-correction low, to 560 in oct. and hasn't seen 560 since.

or maybe this is more like the 2004 correction...



peaked at 423 in march, fell to 375 in may, then never looked back.

similar deal in 2003...



nothing like that happened in 2007...



so it looks like what we just saw was the 2007 + 2008 'annual gold price corrections' bundled together into one big 30% plus decline this year...



now... if gold prices start to get reeeealy volatile, with $50 and $100 swings in a day and that goes on for a couple weeks... i'm getting off. that ain't funds trading, that's the market rolling over, just as the stock market is with its huge moves. but instead we're seeing physical demand outrun the spot price while spot prices gradually recover in muted trading... hardly a sign of a market rolling over.

my 2 cents.

[Charles Mackay]

Largest Gold Refiner Runs out

It looks like many people are "taking advantage" of the manipulation


Rand Refinery Ltd., the world's largest gold refinery, ran out of South African Krugerrands after an ``unusually large'' order from a buyer in Switzerland.

The order was for 5,000 ounces and it will take until Sept. 3 for inventories to be replenished, said Johan Botha, a spokesman for Rand Refinery in Germiston, east of Johannesburg. He declined to identify the buyer.

Coins and bars of precious metals are attracting investors as a haven against a sliding dollar and conflict between Russia and its neighbor Georgia. The U.S. Mint suspended sales of one- ounce ``American Eagle'' gold coins, Johnson Matthey Plc stopped taking orders for 100-ounce silver bars at its Salt Lake City refinery and Heraeus Holding GmbH has a delivery waiting list of as long as two weeks for orders of gold bars in Europe.

http://www.bloomberg.com/apps/news?p...er=commodities

[jtabeb]

Re: The dollar, precious metals, and the 'other' invisible hand

you made a good buy but for the wrong reasons, if your post is any indication.

silver bottomed with gold as the fund shorts pissed their pants.

the game goes on and on until the big shoot out.

so which one of these players folds first?



that is THE question!!!

figure that out and you're in the big money.

so... where is the russian or chinese central bank head in the picture?

If it goes up eventually, I did it for the right reason;)

[jtabeb]

Re: The dollar, precious metals, and the 'other' invisible hand

Sinclair, Turk, and Murphy say it's manipulated. Therefore, it is manipulated. But, why not use the manipulation to your favor for the extraordinary buying opportunities that it provides. Sinclair says the manipulators will ultimately be the ones that make the most money from the long side.

Do I know you? Or, are you just good at reading my mind?

[bart]

Re: Largest Gold Refiner Runs out

It looks like many people are "taking advantage" of the manipulation

Precisely the main actionable point of my dollar intervention and ECB gold intervention and Treasury TIO intervention, etc. fact based & posts.

Not only is my motto to ignore the real & proven men behind the various curtains quite perilous, but its also that the signals are extremely useful for trading and investing.

Just ignore the noise of folk like Mish and digger and most main stream media bozos... although I still like the concept of the real Bozo for President. ;)

[jtabeb]

Re: The dollar, precious metals, and the 'other' invisible hand

Like kicking the afterburners when you are already headed straight for the ground. Nuts!

Only IF you are BELOW CORNER VELOCITY! If you are above it, it's IDLE and SPEEDBRAKE till you get to corner, then power to maintain it.

FYI

JT

[Guest]

Re: The dollar, precious metals, and the 'other' invisible hand

Metalman -

You wrote:

when did you buy into gold and silver? in 2006 or so? if so that explains why you can't see it. these corrections have happened over and over since 2001. as ej says, short term a function of funds, long term of gov'ts. it's just that simple.

Regarding the potential manipulation of Gold and Silver, here's why I see it differently. I look at the mountain of derivatives which have sprung up over the past few years, it's multiplication without any restraining limit, and I have to conclude it would be highly improbable to expect that any one sector of the markets is immune to their influence while other sectors such as currencies can be freely influenced. Currency markets dwarf every other global market by orders of magnitude. And almost everyone here is 100% on board with the thesis of currency manipulation existing, right? Also we are all on board that speculation exists in the oil markets? Now compare the oil markets with the gold and silver markets.

There may be modest derivatives influences upon the massive global oil market, as well as forex markets, but take a look at the comparative size of the oil markets to the sizes of the tiny gold market, and the absolutely gnat sized, truly minute silver market, and you'll understand derivatives could have their premier manipulation candidate in gold and silver. There is unparalleled potential in these tiny markets. And curiously, the PM's have a big fat red target painted on their backs, as former currencies in their own right. Don't need any Sherlock Holmes to have gotten this far.

Your blanket denial of any manipulative influence in the PM's in agreement with iTulip, may instead be an exposed and difficult position to defend. These two tiny metals markets are by definition the "anti-fiat-money", and yet your view is that while derivatives can sway markets as massive as the currencies, they are miraculously not present in the monetary metals. The above article excerpt evidences that Szabo (in very workmanlike fashion) narrowed the massive short positions down to two money center banks, as the owners of 60+ percent of the COMEX short. And EJ asserts "it's all due to hedge funds deleveraging". Doubtless the hedge funds dumping the metals positions has had a huge effect. But to claim it's "all" due to them is an exposed argument.

Szabo supplies a bit of "agnostic" sleuthing at least, examining the potential here for collusive manipulation having contributed to the recent metals plunge. His diligence uncovers without too much work, a not irrelevant detail - two money center banks "owned" the entire short positions trade. EJ confines himself to making an "unequivocal assertion" to the contrary. You then observe: "Too much sleuthing obscures more than it clarifies". In this case to choose not to bother with identifying these two banks, does not give the impression of minimal diligence, as to contributing factors on these metals' recent price action. I think there are a number of us, people following the PM's, who maintain a healthy skepticism for conspiracy theorizing, but we also choose to apparise this picture overall (means beyond the hedge funds) for a sense of probability levels pro and con one or two money center banks involvement too.

It is not irrational to broaden one's scrutiny here.

When we see two money center banks piling on an obscene 60%+ of the COMEX short position in astonishing synchronicity with the largest plunge in the metals in 7 or 8 years, we conclude that this crcumstance is at very least, "highly anomalous". When we then note that an entirely similar operation occurred in the currencies, and this is even corroborated by news clips of central bank "memoranda of understanding" for concerted currency operations, we consider, not irrationally, that 3/4's of the "conundrum" may have just been resolved. A better and firmer understanding of what underlies the manipulation in metals AND currencies, requires A PRIORI, an undogmatic approach. I will take Bart's conclusions here any day, over the "categorical" assertions of Mishmash. Bart takes the tough position to argue. Mish? Well, let's just say we've caught him out on a few occasions making some truly whopper flawed assertions.

In case my point is not clear on what's interesting regarding "plausibility" here, I reiterate it - if we here at iTulip all do freely consent that currency manipulation exists, is it not odd that we draw off a "hermetic quarantine" area, in the Precious Metals, and claim "Oh no! The manipulation does not extend in there - not at all!". We go on to claim in explanation "The manipulation does not need to extend into there, because currency manipulation alone can swing the metals at will anyway!". This reasoning appears to me somewhat arbitrary.

With regard to EJ's consigning any trace of manipulation in the metals to the dustbin, my best guess is that he's climbed out on a limb on this one and it's a position that requires some work to defend. Mish's methodology elsewhere has been shown to be arbitrary and prone to build constructs on top of false premises. We have seen some examples that were inescapably so, and you are entirely familiar with that. You can read an article of Mish's and a great majority of what he (on occasion) may write will appear eminent common sense. Then you stumble across a whopper of a misconception and realise you have to be constantly on the lookout for them in his writing.

Szabo demonstrates that there have been only two money center banks involved in these short positions on gold and silver, which appeared suddenly and were very large. iTulip's assertion here is that it's been the "hedge funds deleveraging". You agree with this. So would you then explain to us why the hedge fund community's hasty flight from gold and silver has been the sole agent of this collapse, while these two money center banks who have snapped up such a massive quantity of short positions in the meantime, are considered to have been neutral to the bullion prices concomitantly? The burden of proof would appear by common sense here, to rest instead on those asserting that "the hedge funds are responsible for this", as the actual data Szabo has pulled out, is pointing to a very large quantity of gold and silver contracts (short), placed by a couple of money center banks instead?

Just my two cents.

[Guest]

Re: The dollar, precious metals, and the 'other' invisible hand

Yeah, well, I would not fly in one of those buckets with you even if I had a gun pointed at my head. No sir! I like feeling solid ground under my feet at all times! [ groundhog personality ].

Only IF you are BELOW CORNER VELOCITY! If you are above it, it's IDLE and SPEEDBRAKE till you get to corner, then power to maintain it. FYI JT

[jimmygu3]

Re: The dollar, precious metals, and the 'other' invisible hand

Only IF you are BELOW CORNER VELOCITY! If you are above it, it's IDLE and SPEEDBRAKE till you get to corner, then power to maintain it.

FYI

JT

Fire, Rotate, Thrust. And if the little saucer gets too close- hit Hyperspace!

[jtabeb]

Re: The dollar, precious metals, and the 'other' invisible hand

Fire, Rotate, Thrust. And if the little saucer gets too close- hit Hyperspace!

Now, what you are referring to is the F-22 ( I don't fly it, but we all drool over it)

http://www.youtube.com/watch?v=e_Q6Vb9xJM0

[Spartacus]

Re: The dollar, precious metals, and the 'other' invisible hand

This post does NOT mean I agree with Butler - it's to clear the air against what I see as unfair cricitism, sloganeering and name-calling (Mish is SO GOOD at some things). If you're going to claim you've refuted someone, there should actually be a refutation there.

All those words Mish has expended to "disprove" Butler, and not done it at all.

Disproving Butler would be "the shorts have access or have plans in place to access this metal (pointing to the metal, showing its location or planned mining or delivery) to be delivered against the short contracts in some reasonable time period, say 6 months or a year."

As I understand Butler, his position is, the function of the commodity market has been corrupted with respect to Silver.

Butler's position: shorts should have reason to believe they could deliver on their promises within some reasonable time period. A producer who can produce in 6 months to a year, or a company that has Silver in their vaults. That's the function of the commodities exchange, not to hedge 20 years of production or to hedge against other paper. The current short positions cannot be delivered against in any reasonable time frame using any publicly documented Silver supply or supplies or stockpile.

As I understand it, Butler has never written that there is any secret cabal controlling the price of Silver. The small number of players holding an enormous short position have unfair market power, but that's NOT a conspiracy theory. Calling Butler a conspiracy theorist is the lazy, easy way out.

To refute Butler one needs to point to the Silver or some way in which the shorts can reasonably expect to get their hands on Silver. This cannot be Silver already owned by others (for example, a short cannot point to some current mine supply which is contractually promised to industrial users and say they'll use that for delivery).

Calling Butler a "conspiracy theorist" does not answer his arguments.

Please read all of Mish's writings and judge for yourself if he actually answers Butler.

CEO of PAAS, who took on Butler's claims as well - that the large commercial shorts do in fact have offsetting positions in both physical and OTC derivatives markets, where they act as middlemen for a much larger group of customers

NOte very carefully what is NOT written: "the short positions can be delivered against in a reasonable time period, using Silver held in xxxx vault or to be mined & delivered in 1 year from yyyy mine"

he "took on" a figment of his imagination and called it Butler. He absolutely did not "take on" Butler, much less refute him.

if the COMEX paper is being used to hedge off-COMEX paper (that's my understanding of the ex-CEO's quote), that is REINFORCING what Butler wrote, NOT refuting it.

Time and time again Butler and others point out the "massive concentrated short position" as if that was proof of something in and of itself.

The COT reports are basically a measure of concentration. Look at the structure of those reports. That's the COMEX and CFTC telling you that CONCENTRATION ITSELF is bad (EDIT: I suppose that's my interpretation. Mish might say COMEX is measuring concentration just to employ a few people who might otherwise work at BLS, but when they work at COMEX/CFTC they are beyond reproach). Except in the case of Silver and Gold shorts - then concentration is fine, and anyone who criticizes it is a conspiracy theorist.

When Butler warns against concentration he's a "conspiracy theorist", when the regulators warn against it ... when the basic structure of the regulator's reports admits it's a bad thing ... when the regulators regularly move against much smaller concentrations on the long side ... what? No response, Mish?


Anyway ... I could go on - I noted tons of other extremely weak "arguments" (or rhetoric & slogans being passed of as arguments). Mish has NOT refuted Butler. There is a very specific thing that Butler claims[*], and nothing that Mish has written in the last few weeks comes close to refuting Butler.


I suppose one could write (if one wanted to be honest) "I suspect Butler's wrong, but I can't provide the specific proof that would prove him wrong - he's just asking for too much detail, for too much information that's not publicly available. Here are some indications that he's wrong ..." (this is my position) and proceed to list some sources of Silver that Butler doesn't know about. But again, this is NOT what Mish has done - he's gone in for the classical tactics of "sraw man", "name-calling" and "sloganeering".


[*] I have not read US commodity law, probably don't have the background to make sense of it, so I don't know if Butler's correct on that point ... but even if Butler's wrong on that point, that does not make Mish correct. If Mish wants to correct Butler that way, he needs to quote a commodities lawyer saying
"commodity law expects that shorts will never expect to have to deliver. There is no such rquirement or expectation."
(and even as I write this I know it must be wrong - I vaguely remember one of the futures markets tried to introduce a no-delivery contract a while back and no one was interested in it)

[bart]

Re: The dollar, precious metals, and the 'other' invisible hand

This post does NOT mean I agree with Butler - it's to clear the air against what I see as unfair cricitism, sloganeering and name-calling (Mish is SO GOOD at some things). If you're going to claim you've refuted someone, there should actually be a refutation there.

All those words Mish has expended to "disprove" Butler, and not done it at all.
...

Well said. And just for the record, I do agree with Butler on most items.

I also note that the CFTC did charge the Dutch company Optiver with oil manipulation. In other words, Mish's allegation about futures being zero sum and having balanced shorts & longs being reason enough that futures manipulation is not possible is completely bogus and not backed up by actual facts, and actually & provably ignores those actual facts.

Mish also quoted Jon Nadler:

"One can take any data and make it suit their argument," said Jon Nadler, senior analyst at Kitco Bullion Dealers.
"The theory that the market is somehow sinisterly manipulated, especially as it comes at a time when U.S. regulators are keeping a keen eye on the goings-on in the commodities and financial markets for just such type of evidence, is simply ludicrous and totally out of touch with market reality."

Note allegation of "sinister" and the use of "ludicrous", when the actual subject is manipulation and facts alone - more Mish style logic.


And again:

"What you have here is the footprints of hedge funds exiting the commodities markets en masse," said Kitco's Nadler.

Note that hedge funds are primarily trend & TA followers (as per "because investors, particularly short-term, technically-oriented funds, were selling." said Jeffery Christian, founder of commodities research firm CPM Group) amongst other actual facts.
Nadler's implication that they're the trigger covers less than the full & complete picture.

I await further attempts to muddy the water with partial facts and questionable logic.

Funny how Mish and others ridicule the area and spin the concepts and facts, even going so far as to pretend that Butler and others have no facts when the facts are actually there and clearly presented.

Maybe Mish will even attempt to spin that the PPT or CRMPG etc. don't exist and act too. After all, secrets like the Manhattan Project can't be hidden from the huge majority of people for many years. :rolleyes:

And again and just to be clear - manipulation and intervention are far from the only factors that influence prices. But they do provably exist.

"Only puny secrets need protection. Big discoveries are protected by public incredulity."
-- Marshall McLuhan


And just to establish a base definition:
Manipulate
To influence or manage shrewdly or deviously: He manipulated public opinion in his favor.
To tamper with or falsify for personal gain: tried to manipulate stock prices.

As an aside, I'm no longer publishing any of my ECB gold manipulation work - I'm tired of dealing with the hate mail, threats and other effects and factors. I've gotten more of it on my ECB work than anything else I've ever published, but at least a factor of 10.

[Spartacus]

Re: The dollar, precious metals, and the 'other' invisible hand

I await further attempts to muddy the water with partial facts and questionable logic

I have a sneaking suspicion that the next tool in the toolbox or arrow in the quiver is selective quoting.

Unfortunately this could be quite effective with Ted.

We'll see.


EDIT: to get a clear view of the difference between Mish & Butler, please read some Butler. Note how carefully he separates facts (various documents on the Silver industry) from his opinions. Note how careful he tries to be about telling his readers when he's going off into his own imagination. He's definitely not perfect at it, but compare with some of his opposition ... the difference will be stark.

[bart]

Re: The dollar, precious metals, and the 'other' invisible hand

I have a sneaking suspicion that the next tool in the quiver is selective quoting.

Unfortunately this could be quite effective with Ted.

We'll see.

Sad but likely true... and I've been on the receiving end of that crud too. Its takes very high efforts to counteract it, and is virtually impossible with the many who have fixed ideas.

What Mish and others likely don't see and realize about that "style" of tool though is that it always backfires eventually.
I hope he sees the current relative crash in his blog ranking and attributes it correctly to his dubious journalism, but I'm not holding my breath.

[Guest]

Re: The dollar, precious metals, and the 'other' invisible hand

Kitco's Nadler and Mishmash make very comely bed-fellows! [ pair of hacks, maybe that's the similarity. ] All tucked in and comfy under the blankys, are we? Just go perusing through a collection of Nadler's articles and see if you can spot where his "umbilical chord" is attached. ;)