Central Bank Monkey Business [truthingold]
August 3, 2012 Leave a comment
The thing about the Fed non-action is that every meeting they don’t do something increases the likelihood they’ll HAVE to do something at a subsequent meeting. – Dave in Denver
We wouldn’t have the extreme volatility in the markets that surrounds Central Bank policy-decision meetings if analysts and traders bothered to think through the process of what happens if the Fed, ECB and Bank of England do not start the printing presses back up in a major way. I don’t know of anyone, who if asked point blank how the western world solves its debt problem without extreme currency devaluation either by printing or default – and printing is in fact a de facto default – doesn’t come to understand that the likely solution will be more printing. And a lot of it, quite frankly.
Hell, even yesterday it didn’t take a painstaking syllable by syllable dissection of the FOMC statement released to realize that the Fed is firmly on track to print a lot more if the economy doesn’t recover. Recover? LOL. On a real inflation-adjusted basis, the GDP never climbed out of a recession. Just ask the millions of people who have either gone on social security disability or took down student loans and went back to “school” since 2008.
At any rate, I wanted to share some thoughts on why many of us believe that the precious metals market is getting ready to take off again based on looking at the technical data embedded in the weekly Commitment of Traders report and daily open interest reports.
To review quickly, it is now well known and accepted by everyone who trades and analyzes the gold and silver trading on the Comex that a couple key large banks – JP Morgan and HSBC, primarily; Scotia, Barclays and Deutsche Bank secondarily – manipulate the trading in gold and silver by engaging in massive short-selling of futures on the Comex.
In fact, there has been no other market in history in which the ratio of the short interest position in the futures contract exceeds the available supply of the underlying commodity by the degree to which the short position in gold/silver futures exceeds the readily deliverable availability of physical gold and silver. In gold and silver the paper short positions on the Comex exceed not only the actual physical metal readily available for delivery in Comex vaults by several multiples, but it also exceeds any reasonable time measure of days of mining production globally of gold and silver. It’s actually become absurd to the point at which most of us who understand the truth of the situation now wonder if the CFTC, SEC and Justice Department are in reality staffed and run by a group of Helen Kellers (deaf, dumb, blind).