Liquid Gold

     While on vacation in the middle of the eastern Oregon checking in now and then to see spot prices.  I was not too shocked to return to the same thing that took place last week.  Gold is moving quickly, oil is the main initiator here, as I wrote last week, that TPTB would not let it get lower than $75.  Thursday it was $74.42 if the prices remained low it could cause a major problem for the Keystone pipeline and make it financially undo-able, the break even price for the new Canadian oil production is around $85, already up and running producers can do it for much less but this affects all the new projects.
     Is it really a surprise when it came down to the release of this passing, that we see oil rising.  The Democrats are now standing behind the approval for the Keystone XL pipeline.  All we have to do is sit back and wait for the president to sign it, since he is in Asia he will get to it sometime in the next week.  Even though Congress might try to take the responsibility away from Obama, he is the only one who can approve it because it crosses international borders.  The question every broker and oil executive is wondering, will he pass it?  Legislation's like this in the past have been vetoed and frowned upon by the White house administration.  The pipeline is a major concern for the environmentalists that the Canadian extraction could worsen global climate changes and threaten the U.S. waterways.  On the other side, this is huge for the U.S. to become energy independent, creating mass amounts of job growth that can lead to a strong U.S. economy and we are in extremely different circumstances than when this bill was pushed in 2008.
      We know that gold tends to follow oil in the market and the indicators to make calls happen fast.  With the rise of the Euro and the dollar longer than it should have been we have to add in all the factors that sway PMs for instance we have the Swiss Gold Initiative coming and traders on high alert waiting the vote, but many already assume it will be a no.  The physical gold moves the market way less than the digital kind.  Let us add GOFO Gold Forward Offered Rate, kind of a way to swap gold in return for USD a lease to own dollar rate.  However, there is not an interest like on a lease with a borrower and lender where the lender gains it is more of a swap because the lender is the one paying a rate of interest.  It is not the spot price of gold; it is a subtraction of LIBOR corresponding values.  These swaps are made from one up to 12-month periods.  Shorting mass amounts of gold drives up the lease demand and that GOFO then is lower.  There are no supply problems for contract and the idea of leasing metals appeals to many especially when they see the contracts lower than spot price like we have.  A negative GOFO shows that demand for the swap is high; this could be for lack of inventory by COMEX or the futures offered by the SGE.  These indicators with the GOFO could be that big changes in the PMs could be on the horizon, even if the demand is just so traders can short gold the GOFO has shown the bottom price before could it again?

Bought Nov. 14
SLV April 17, 2015 calls strike $15.50
paid $1.23

Red Pill, Blue Pill = Bad Trip

If you want to believe the surge in oil prices today are a direct reflection of a strong economy, you are sadly mistaken.  A huge pipeline exploded in Saudi Arabia.  Prices fell under $76, possibly the U.S., Israel, Iran, Russia, or ISIS blew up a pipeline to increase the value of oil.  Yet the government stands firm that it is the increasing deflation in our economy.  Most likely, it was someone like Goldman amping up their Christmas bonuses.  This could be the most transparent administration we have even seen; the GOP could not even wait twenty-four hours to move the price of oil.  When oil prices fall, it hurts the GDP, and that the new senate just could not have that.  Our world is looking like some mainstream action movie with conspiracy, shooting down planes, deadly viruses, and terrorists, domestic and foreign.  I mean ok, the elections are over let the destruction begin, first up red team raise oil, bomb something!  Now increase the price of health Insurance and monopolize it ASAP.

 Seems there are no repercussions for all of the bold ringleaders, blatantly unleashing these catastrophes on the world, why are the people so blind to facts and numbers.  It is no wonder they want to legalize marijuana, it is not just the tax that states make millions on each month, really it is the only true hope we have for the economy.  It has to keep us blind to the obvious conspiracies and manipulation generated by the Administration and their Central Bank club.  The market was down, oil was down, oil goes up market is at an all time high, not really rocket science. Now with McCain head of senate let the chaos of military spending begin. What do we need now? A war with Russia would be great, they do not buy many bonds, and we are already liquefying the Ruble, making Putin unappealing for China and Iran to align with.  Higher defense spending is about to be the new normal, most of the GOP is ready and waiting.

We could just be so naive that there may not have even been a pipeline explosion at all, they could have just closed it off to shift the demand.  Oil manipulation is an odd one, you would think that with everyone having a phone and how into our “live” media and You Tube coverage that we are in touch with all of it.  I have been on the set of movies and helped with digital imaging and voice-overs.  I have seen what people can manipulate with technology, even if you see it and hear it; the simple fact is it may not be real.  How many times do you think “they” have gone into a country or village to gain information or resources and said it was for something very different?  Need more money with oil, bomb, or close a pipeline then buy or sell.  Need more military spending create a war?  Need to know what China’s technology is capable of, poof make a plane disappear.  It goes on and on. What we are seeing with metals is just another fine example of mass manipulation.  

The Lesser of Two Evils

As Americans today is a very important day, as midterm elections come to an end, so do many politicians dreams for change.  The social issues that most Americans vote on, or are concerned about are the least important to the masses.  I am not saying that gay rights and abortion are not worth campaigning and voting for.  This year you may want to hold back your own personal donkey vs. elephant emotions, because how the FED is run, is on our table for a vote, this could be the most important issue we face historically.  Could the FED and its interest rates be run by congress for the first time in history?

 This is what people should be worried about, if you have money in a bank, these issues should be what your main focus is on.  That the interest rate polices would no longer be controlled by the FED.  These issues are huge; in fact, this election is the first time we have seen members of the GOP issue bills like this.  Even when a bill to audit the FED was introduced 2012.  We saw what challenging the FED did to Ron Paul.  The FED is running our economy, so lets put aside our emotions about these social issues and understand what is really on the ballot here, the less active the FED is the much stronger the USD is.  We are seeing this now, the USD is on a four year high, this is because of many factors. A few of those factors are the announcements about what is happening with the FED and its decisions to end QE.  The negative interest in Europe and now this legislation challenging the FED, we see the USD rising with people’s new sense of security in the market and economy.

            The outcome of this election, which if the GOP takes the office, the FED will have to answer to someone, means its days of control will be limited.  The GOP has yet to control the senate since the 2008 crash.  That does not say too much, since the democrats have been in control we are also massively in debt, even though we also have not seen a crash like that since.  For any group to change the position of the fed, it could be a potentially suicidal situation.  If the FED raises the Federal funds rate this would destabilize the economy all the leverage and carry trades unwind, the stock marked sells off, because of leverage the prices would crash.  On the other hand, spending money is the power congress has.  Lowering interest expanse, congress is empowered to spend more created and taxed dollars by the trillions.  It is kind of a lose-lose situation.

Elections should be a way to win and make changes without a fight or war, yet who can win when our leaders are lawless and we can only choose between the lesser evil. If you look at past elections and the puppets that America has, all of our presidents since Kennedy have been CIA run.  Regan just read the teleprompter, Bush… need I even comment, even Obama who I was all for until I looked at the facts.  Throw an election where we have someone like Putin up on the stage, no writers or hands in his pockets, just someone fighting and believing in us, in our country, not for all the corrupt aspects of money.

As an American, I do pride myself on freedoms that we have, everything from choice to ability.  However, there is a major price in this delusion, because we are brainwashed daily, media forces our belief system and desensitizes our souls.  Hear no evil, see no evil is how we view the world.  Even though we think we are free and that our votes are worth something, it is all a dream in a very corrupt world. Once we all wake up and see what is really happening, I do not mean your status on face book, we may really make a change for ourselves and nation.  

Next show on the Silver Screen

Is m2 the ultimate denomination of wealth?

A decade ago in 2004 silver was only $6 an ounce then in 2008 $9 now in 2014 you are looking at almost double what it was six years ago.  Even the epic loss in 2011 did not seem to tarnish SLV as an investment.  I would look at these numbers and agree that investing in silver is a sure bet.  Floating rate notes (FRNs) cannot compare to silver trading, when buying silver it’s more of a stack and hold type of investment.  The metals market cannot keep up the lows we see, the production in mining is well above the low numbers that we are trading at currently.  Are industrial buyers just locking in a supply?  We are seeing mass rollover of long contracts, unusual for industrial buyer’s positions.  These seem to be a “deeper pocket” strategy, possibly metal manipulation.  Silver is oversold when looking at a technical picture, last year looking at the RSI you see silver bottoming with lows right before it hit the lows June of last year.  Has the spike in SLV just begun?  We saw record sales last month, with the most volume ever seen in SLV COMEX futures, even shortages in the physical metal.

Could silver go lower?  Some traders predict $15 others see the lows just a way for the SGE to buy discounted metals and horde them until they can control the new fix price.  Who can really predict the drop or rise with all the global entities corrupting the market.  We never thought we would see interest rates at zero, how do we know what is to come?  Well look at history, look at human and market predictability, in no way will they just let metals go lower than we see now.  This is why trading metals is really the way to go; yes holding the physical PMs is a great insurance for your own personal assets.  Trading metal options is a true and complete strategy.  While the cost of silver is so low I personally would stack and hold, however as it gets higher lets say over $49 I would switch to lead.

Controlled Information FED to us

We will control the horizontal. We will control the vertical.  You are about to experience the awe and mystery of:  The Outer Limits.

As the stock market rises, we have to ask ourselves how many stock buybacks are taking place to artificially raise the market. The FED loans and funds these buybacks for a 1% rate and the bankers get their cut.  The FED doesn’t benefit from the halt on QE that’s why we wont see it end. We should look at Germany and see our very own future, since Germany is the only one who has experienced inflation to the extreme. Japan is experiencing the same fate with the illusion that funds are being printed out of thin air. The market is by far not a fixed market, but a central institutionally owned one. The information that we receive about unemployment and inflation is totally impossible “they” report that we are near full employment yet the public is out of work, job fairs overflowing, and students with masters degrees searching for any job to get hired. Other statistics show 93 million are jobless, so how do their numbers match up?

Does anyone remember The Plunge Protection team, the presidents working group on financial markets. This is not the FED or QE, none of that, this is a whole other entity in fact after “Black Monday” in 1987 Regan put together a team to prevent the market from having major downturns. The group was charged and accused of going way beyond their legal mandate in attempts to manipulate the stock market by using government funds to buy stock index futures and stocks or using moral suasion to have banks do their dirty work. The only way they really could don this is through the US treasury, the FED or the cooperation of banks. Quite possibly all of the above were done and still are, on OCT 2008 the Working group did issue a statement saying that the government may own certain shares in the firms that which it provided loans. Knowledge truly is the most powerful thing we have as humans we can not just rely on the numbers, the reports that are fed to us (no pun intended), knowing all aspects is the only way we will keep up with the TPTB.

Follow the yellow brick road

Experiences in Asian culture concerning paper money has not been so good, historically they have more tangible assets than we Americans do.  With the economy in such disarray, it looks like our own negative fiat experience is just beginning with the monetary challenges that we face in the East and West.  China and India combined make about one third of the global population, this is not including Russia and Iran who both seem to be on the same page as China and India.  Historically having and buying bullion has been a strong cultural way to secure their disposable income for centuries. Gold has not just been a social standard for these countries but a necessity, an insurance.

 The SGE is pushing to provide gold options; this could change the London fix price, something that they have been working on for some time now.  So will we see a mass selling spree of bullion?  I think not, not when it comes to physical gold.  We are not seeing just a trend in the buying of gold; we are experiencing a major shift in structure as a whole.  Russia and Asia are acting like their own CB by veering from the flood of QE and securing their own currency truly diversifying their own wealth backed by gold not oil.

For instance, Russia bought 37.3 tonnes of metal during a time when political tensions are at a high and Putin’s own currency is falling hard, they buy gold.  Putin does not seem concerned with much but the buying of metal, since this was the largest amount by the CB in the last fifteen years.  Putin’s battle with the bankers seems to be reminiscent of the Battle of Stalingrad or Napoleons invasion, he is finding a way to defeat the fall of his currency by investing in gold.  We are seeing this with China and India showing high numbers from the SGE surpassing last years.  The festivities this week in India caused gold to reach a high, during this week 20% of gold purchased annually happens during this festival.  In India, half of the jewelry bought in a year is for the some 10 million lavish weddings that take place, some lasting days.  Where the gold that is bought and passed down to the new families is considered more important than the bride and groom.  Since they are the second largest buyers of physical gold India makes up about 32% of the worlds gold buyers, we see a lot of volatility with the price as the puppetries try to keep it below a reverse level.

Fear of the FED and higher rates cause traders to get cold feet when it comes to gold, and you see more and more of the fluctuation in price and stocks as the market swings. All this year we have been seeing an anti gold campaign in the two largest buyers of the precious bullion with luxury bans.  We have to remember that India’s Reserve Bank is a branch of England’s (Rothschild’s).  These countries seem resistant to the ban and gold and metals are still in high demand, so why is it still low?  That way they can buy it up at a low cost.

The Swiss may have the Cheese

Little discussion has been on the important news prior to the referendum on November 30^th regarding the Swiss campaign to “save our gold”

            One of the largest groups of political representatives in the Swiss parliament are considered to be the national conservative members of the SVP Swiss People’s Party.  The SVP filed a initiative on August 26, 2011 with the Swiss government, Titled “Gold Initiative: A Swiss Initiative to Secure the Swiss National Bank’s Gold Reserves”, later changed to “save our Swiss gold initiative” This campaign is to retrieve the Swiss family’s gold and considered to be the peoples gold. The gold was sold off by The Swiss National Bank and the Bank for International Settlements. The initiative states that the physical gold must be stored in Switzerland, and total assets of the SNB must have 20% of assets backed by physical gold and can not sell the reserves. Gold of the Swiss National Bank must be stored physically in Switzerland. The Swiss frank now backed by 25% instead of the 40% that was required back in 1997. SVP blame the devaluation of the CHF on the lack of gold backing. The SVP argue that the FED and CB increasing their money supply has devalued not only the CHF but also the USD and EUR. The SVP say that if they hold gold to back the CHF it would stop the devaluation. This vote will not only would make other countries view gold as a huge monetary and safe asset, we would also see a huge increase on the EUR itself. A few other Countries seem like they are swaying the same way, we see China, Russia and others stocking up on the precious bullion. This could be the biggest global move for gold, as it would drive the gold prices sky high.