January 19, 2021
* Is the dollar buying over?
* Chuck explains Gold manipulation… You don’t want to miss this!
Good Day… And a Tom Terrific Tuesday to you! How was your 3-day weekend, that is for those of you who got to have a 3-day weekend? It was a good thing that I had scheduled yesterday a day off last week, because I woke up in the middle of the night (Sunday night) with woeful stomach problems, that carried on into the morning… Chemo does this to me every now and then, and when it does, the only thing I can do is sleep… And so after being up for an hour yesterday morning, I went to my recliner and fell asleep for the next 5 hours… Woke up, got out of bed, ran a comb across my head (Beatles), and felt much better… My stomach is till shaky, but I’m better… The Final Four teams for the NFL will play this coming Sunday to determine who goes to the Super Bowl… One of my fave groups from the 70’s, Kansas, greets me this morning with their song: The Wall…
Well, Friday was another one of those days that we would all like to forget, as far as the currencies, metals, and Oil are concerned… Stocks didn’t do too well on Friday, either, but their loss was minimal compared to the $18 loss for Gold… Right now, it does appear that this a battle that Gold can’t win, as long as the Gov’t regulators continue to look the other way…. The Battle I’m talking about is between Gold & Bitcoin… Bitcoin is the new idol in town… And everyone out there is making sure they don’t have a FOMO (fear of missing out)… But I’ve got some news regarding Bitcoin that may take the daily major gains away, at least for a bit… I’ll get to that in a minute…
But first, have I got a treat for you today… Most of you will recall me recommending a book by Stuart Englert titled “Rigged”. For it explained the reasons why the price manipulators do what they do, and how they do it… Well, the good folks at GATA sent me this link and it’s a 23 minute interview with Stuart Englert… And it’s good! So, sit back, grab your coffee, tea, or Bailey’s and learn about price manipulation without having to buy and read the book! Here’s the link: Stuart Englert: Why Precious Metals Price Rigging Happens | INN (investingnews.com)
OK, back to what’s going on… So, if you’re like me (heaven help you!) and you wonder how in the hell Gold can lose ground last week, after the goings on in D.C., then we can go in this next direction… And that is to talk about how the price manipulators use futures contracts to manipulate the price of Gold & Silver… First of all the COMEX (Commodities exchange, is the clearing house for commodities trades, which includes futures contracts… The CFTC is the Commodities regulator, like the SEC is the regulator for stocks… And when I’m finished here, you’ll say, “Ahhh, now I see why Chuck thinks the CFTC is a bunch of dolts!”
Let’s go back in time to a time when the dollar was just removed from the Bretton Woods agreement, which had a Gold backing for the greenback… There’s a Wikileaks cable that quotes Henry Kissinger talking to Paul Volvker, explaining to him why they must keep the price of Gold suppressed, or else it could hurt the value of the dollar… There’s another Wikileaks cable that has other Senators talking about the same thing. So, now we know that the U.S. Gov’t is behind all this, for nothing has changed through the years, but got revisited in the early 2000’s because the Gold price began to rise again…
So, this is how I believe it all gets done… The U.S. Gov’t gives the wink and nod to the JPMorgans of the world, to manipulate the price of Gold, and for doing so, they won’t be prosecuted by the Gob’t. So, back in the 70’s when Gold was finally legal to be hold by U.S. Citizens, the bullion banks had lines of people wanting to buy physical Gold… And since there’s only a finite amount of Gold mined each year, these Bullion banks had to turn to the Central Banks (The Fed), and obtain a lease agreement. This lease agreement allowed the bullion bank to take delivery of the physical Gold and then the Bullion bank turned around and sold it to their clients… The clients now owned the physical Gold, and the Central Bank hled a worthless piece of paper… The only way the Bullion Bank could return the phsycial Gold was to buy it back from their clients… As Astro Says… Ruh-Ro!
So, in the meantime the COMEX allowed futures contracts on Gold & Silver… And Voila! The Bullion Banks figures that they could come to the COMEX trading window with arms full of short Gold contracts and drive the price down, maybe enough to get owners of Gold to give up and sell their metals, or if not, at least get the price low enough where they could buy some physical metals.
The problem with this is the fact that the Bullion Banks place futures contracts for many, many, many more ounces of Gold (of Silver) than is above the ground… So, shouldn’t they only be allowed to place short trades for the amount of metals they are long? These short contracts never, or rarely ever, get to maturity with the buyer demanding delivery… These contracts are settled in cash, or rolled over to new term contracts… That’s why I highlight every now and then how many days of production of Gold & Silver it would take to cover the number of ounces of each metal that is sold short… In Gold it’s presently about 95 days, and in Silver it’s been as high as 200 but right now it’s about 185 days…
So, I know I get a little rough on the Beaver, But June… it’s just not right! To me this process is immoral, and all the people involved in this fiasco should be taken out and flogged! And that’s that!
Recall I had a few readers ask me how this was all done, every time there’s a what I call an engineered takedown of the metals… If interest rates were rising, if the economy was hitting on all eight, and there was world peace, then I could see Gold getting sold at times, profit taking, etc. But not at this time in space, folks… not in this time and space…
I almost forgot to mention the overnight markets… I get writing about something and you never know where I’ll end up! Ok, so for the overnight markets, the dollar has been getting sold again, the currencies are all rallying this morning, along with Gold which is up $6.90, and Silver which is up 42-cents… It’s difficult to say whether all the dollar buying is over, but if it is, this could very well have been a correction, that exists in markets, to bring an asset back to the stratosphere, to form a new base before going higher…
Longtime readers know that I’m “old school” when it comes to trading patterns and movements and what causes them… but is “old school” of use to us any longer? We have the PPT manipulating the dollar, we have the boys in the band manipulating the metals, we have the cartel, I mean the Fed manipulating stocks and bonds… Well, even with these manipulations, I still feel that trading patterns are still Old School, until the manipulators show up…
OK… now for Bitcoin… I should tell you that a week ago I went all dissing on the former CFTC head, Gensler, for his apparent taking over the SEC head job… But there is word out that Gensler is no fan of Bitcoin, he views it as an unregulated investment that’s used by criminals and money launderers… So, I would expect to see, very shortly new regulations implemented for Bitcoin… Shoot Rudy, even European Central Bank (ECB) President, La Garde made comments last week about how there needs to be regulations for Bitcoin… Talk about just about all Gensler needs in his back pocket to get any new regulation done… And that’s all I have to say about that!
The U.S. Data Cupboard last week was not in any way dollar supportive, but… the dollar got bought anyway… First of all the Weekly Initial Jobless Claims rose to 965,000… That, my dear reader is trending in the wrong direction… And then on Friday, we saw Dec. Retail Sales print negative 0.7%, and when you take out auto sales, it was down -1.4%… In case you had forgotten, November Retail Sales were also negative -1.4%, and Rocktober’s were also negative! But the thing that’s worth pointing out here is that during the Christmas shopping season of Nov. and Dec. both month were negative… So, tell me again about the V-shaped recession that we were supposed to have seen by now!
This week will be a real “nothing going on” for economic data, with the Weekly Initial Jobless Claims the only real piece of data this week… There’ll be some housing data, and some services data, but those aren’t market movers, so the currencies VS the dollar are on their own this week… But having no real data won’t change the fact that this will be an interesting week… That is if the reports of what could happen are real…
To recap… Just about every asset class was down on Friday.. Even bonds were down a tiny bit… Chuck just doesn’t get why Gold is dropping in value like a rock lately… There’s some dark times ahead for Bitcoin… And Chuck treats his dear readers with first a video link to Stuart Englert, the author of “Rigged”, and then his explanation of short futures trades… The history, the winks and nods, etc.
Before we head to the Big Finish… I talked quite a bit last week about Freedom of Speech being taken away, by the social media folks… And then I came across this quote from Benjamin Franklin, that plays nicely in the sandbox with my thought… “Freedom of speech is a principal pillar of a free government, when this support is taken away, the constitution of a free society, is dissolved and tyranny is erected on its ruins” = Benjamin Franklin…
For What It’s Worth… Last week, my good friend, Dennis Miller of www.milleronthemoney.com , sent out his letter, and in it was an interview with me! So, that being the case, I looked past that, and thought that his letter needed to be highlighted here… And so here’s the link to that interview: What’s Going To Happen To The Dollar? – Miller on the Money
Or, here’s your snippet; “I was not surprised when the Wall Street Journal reported, “Senate Moves to Confirm Trump Fed Nominee Waller, but Shelton’s Candidacy Hits Likely Dead End.” Waller is an insider, currently working for the St. Louis Fed, while Shelton is an advocate of returning to the gold standard. Ms. Shelton was described by some senators as “radical.”
The deep state does not want anything close to the gold standard which would help reign in their reckless deficit spending. Quite the contrary, they are pushing for a cashless society, digital currency, total control over what is money and knowing how and where you spend every dime.
Subscriber Mike G. asks a great question:
“What happens when fiat currencies fail? Those of us who have precious metals will still need a value vehicle with which to buy and sell. Even digital currencies, backed by nothing, will fail. Digital debt is still debt. Do we go to a barter system in order to buy and sell? We need to think through our options.”
Mike’s concerns are genuine. How far away from digital currency are we?”
Chuck Again… I know that quite a few of you already subscribed to Dennis’ letter, but if you haven’t, you should! Just click on the link above and sign up, it’s free!
Market Prices 1/19/21: American Style: A$ .7714, kiwi .7126, C$ .7860, euro 1.2133, sterling 1.3519, Swiss $ 1.1269, European Style: rand 14.9620, krone 8.5263, SEK 8.3231, forint 295.65, zloty 3.7378, koruna 21.5522, RUB 73.95, yen 104.00, sing 1.3283, HKD 7.7521, INR 73.13, China 6.4886, peso 19.66, BRL 5.2873, Dollar Index 90.41, Oil $52.76, 1o-year 1.11%, Silver $25.42, Platinum $1,105.00, Palladium $2,414.00, Copper $3.63, and Gold… $1,834.30
That’s it for today… The sun rise this morning is absolutely beautiful, the sky is red, which is not a good sign for sailors… Red sky in the morning, sailors take warning, is the old saying… My next door neighbor back home, is a sailor at heart, has a big Sail boat, and spends most weekends on it… he’s the one that told me about that old saying, otherwise I would have no idea… My spring training buddies all have motor boats that they keep on lakes, different lakes! So, in the summertime they all head different directions… Times change.. in the winter, I’m gone, and in the summer they are gone, we used to spend just about every summer weekend together… OK, Vanilla Fudge takes us to the finish line today with their version of the song: You Keep Me Hanging On… I hope you have a Tom Terrific Tuesday, and will Be Good To Yourself!