Message: Ed Steer
Ed Steer today. If you look at nothing else, check th etwo interviews by Eric King with Embry and Sprott. Good reminders as to why we are holding here.
Deno G.
Sprott Silver Trust IPO to Raise $500 Million
"
SLV shows 2.7 million ounce withdrawal since Thursday. IMF sold 1.04 million ounces of gold in September. Interviews with Eric Sprott and John Embry. Consumer sentiment hits new low. Why capital controls aren't all bad!!! 'Pieces of Eight'... and much more.
"
Yesterday in Gold and Silver
The gold price fell about seven dollars from the beginning of Far East trading, right up until 11:00 a.m. in London, when the dollar hit its zenith. From that moment onwards, the price began to rise as the dollar began its decline. A couple of times [around 8:00 a.m. and 12:30 p.m. Eastern] the price began to go parabolic, but a not-for-profit seller was waiting to make sure that things did not get out of hand. Gold finished close to its high of the day... which was $1,360.80 spot.
The silver price graph was pretty much a carbon copy of gold's on Friday. The price declined two bits up until the 11:00 a.m. London dollar high... and then headed higher and, like gold, closed almost on its high of the day... which was $24.78 spot.
From the Far East open, right up until moments before 11:00 a.m. in London, the dollar rose about 45 basis point to 77.76... its high of the day. From there it was, as they say, all down hill. But it wasn't a smooth decline... and the two parabolic gold price moves I mentioned in the first paragraph were totally unrelated to the dollar moves going on at the time. Also note the dollar decline [35 basis points] between 8:20 a.m. [the Comex open] and 10:00 a.m. New York time. The gold price dropped $10 during that time period. Anyway, by the time the smoke cleared at 5:15 p.m. in New York, the dollar had fallen 75 basis points from its high of the day.
The gold stocks also had a different sort of day. Although the HUI finished up 1.58%... the precious metals stocks got sold off a bit once the big gains were in at 1:00 p.m. Eastern time. The saw-tooth pattern makes it look like every tiny rally got sold off... as if someone was carefully selling into this rally. Here's the HUI for yesterday. The silver shares and the juniors had a much better time of it on Friday.
And here's the HUI for the week that was.
The CME's Daily Delivery report showed that 21 gold and 17 silver contracts were posted for delivery on Tuesday, November 2nd.
There were no reported changes in GLD yesterday... but over at SLV there was another big withdrawal. This time it was 1,271,327 ounces. Ted Butler feels that the 2.7 million ounces that have come out of SLV in the last two days has to do with Sprott's big purchase for their new silver ETF... which is rumoured to be buying around 15 million ounces. Ted also felt that the big chunks of silver that were stopped [received] by the Bank of Nova Scotia in Thursday's Daily Delivery report fits into the same category. We'll find out soon enough if there's any truth in that.
The U.S. Mint didn't have a sales report on Friday, so gold eagle sales for October ended the month at 91,000 ounces sold... along with 2.6 million silver eagles. The mint hasn't had a sales report in silver eagles for about four days now... and it would come as no surprise to me if they had a big 'sale' on November 1st that they stole from October. We'll see.
For the second day in a row there was no in or out activity at the Comex-approved warehouses that is worth mentioning here. Ted pointed out that some of the silver that was posted for delivery on Monday may be for Sprott, so we'll see if there's a big withdrawal coming next week from Scotia Mocatta.
Yesterday's Commitment of Traders report didn't show much change in the bullion banks' grotesque short position in silver... although they did reduce their net short position by a smallish 284 contracts. The Commercial net short position sits at 289.3 million ounces. The '4 or less' bullion banks [which includes JPMorgan and HSBC USA] are short 237.1 million ounces... and the '8 or less' bullion banks are short 315.1 million ounces.
In gold, there was a larger reduction in the bullion banks' net short position. For the week that was, the bullion banks decreased their short position by 10,647 contracts... 1.06 million ounces. The Commercial net short position in gold is now down to 'only' 28.2 million ounces. Of that amount, the '4 or less' bullion banks [which includes both JPMorgan and HSBC USA] are short 21.3 million ounces of gold... and the '8 or less' bullion banks [which includes the '4 or less'] are short 29.6 million ounces.
Here is Ted Butler's "Days to Cover" graph courtesy of Nick Laird over at sharelynx.com. As I've stated before in this column, this chart will be "Exhibit A" at the trial of JPMorgan and HSBC USA. As of Tuesday's COT cut-off, the '4 or less' bullion banks require 124 day of world production to cover all their short positions in silver... and the '8 or less' bullion banks require 162 days of world silver production to cover their entire silver short position. The prosecution rests.
| Sponsor Advertisement |
|
Tiny Canadian Company Makes Massive GOLD Discovery A junior mining company has struck a HUGE gold deposit buried in Northwestern Australia… Early investors could turn every $1,000 invested into $17,000. |
¤ Critical Reads
SubscribeSprott silver trust IPO to raise $500 million
Since this is my last column until Monday, November 8th, I'm going to be cleaning out my in-box and dumping it into today's column, as I've been saving articles all week just for this particular column. Right out of the gate is the story about Sprott's Physical Silver Trust which is now listed in both New York and Toronto. The Reuters story about this is headlined "Sprott silver trust IPO to raise $500 million". We probably won't know exactly how much money they raised, or silver they bought, until around November 10th. The story is only a handful of short paragraphs... and the link is here.
IMF sold 1.04 million ounces of gold in September
Here's another Reuters story. This one was sent to me by reader 'David in California'. The headline reads "IMF sold 1.04 million ounces of gold in September". Was real gold sold... or was it just a paper transaction to cover gold that was leased and sold years ago? We'll never know. This story is three paragraphs long and will take thirty seconds of your time... and the link is here.
Vietnam Stops Banks from Using Gold Deposits to Fund Loans
The next story is stolen from a GATA release yesterday. This one bears the GATA headline "Vietnam orders banks to stop acting like LBMA members". The Reuters story to which the GATA headline refers is entitled "Vietnam Stops Banks from Using Gold Deposits to Fund Loans". This is definitely worth the read... and the link is here.
Interviews With Eric Sprott and John Embry of Sprott Asset Management
VMS Ventures Inc Press Release
Before I get into the rest of my reading material, I want to bring your attention to some news from the copper world. This is NOT an endorsement... just a news item. It's a press release from a company called VMS Ventures Inc. They drilled some pretty impressive holes at their Reed Lake Deposit near Snow Lake in Manitoba... which is my home province. The headline to their Thursday press release reads "VMS Reports 6.69% Copper Over 71.69 Metres and 3.74% Copper Over 21.77 Metres from In-Fill Diamond Drill holes Three and Four at the Reed Lake Joint Venture Property". Apparently they hit 6.7% copper over 71 metres [232 ft.] in one of their drill holes. If copper floats you boat, you can check out the press release linked here.
EU bows to Merkel over euro crisis rules
Well, Germany got its way in Brussels yesterday, as EU leaders agreed to tough spending rules for the eurozone in a bid to avert another financial crisis. It's a UPI story filed from Brussels... and the headline reads "EU bows to Merkel over euro crisis rules". I thank reader Roy Stephens for sending me the story... and the link is here.
Consumer Sentiment Hits a New Low for the Year
The next item is also courtesy of 'David in California'. It's a piece posted over at businessinsider.com which is headlined "Consumer Sentiment Hits a New Low for the Year". It's only a couple of paragraphs... and the link is here.
Why capital controls are not all bad
Today's next story comes from Casey Research's own in-house economist, Bud Conrad. It's a piece out of the October 25th edition of the Financial Times in London. The disturbing headline reads "Why capital controls are not all bad". Here are Bud's comments on that... "This article reviews the actions of governments in manipulating currencies. His evaluation is that they are beneficial in many cases. This is the kind of justifying propaganda that is produced before actions are taken by leaders to do what they want. I consider this a warning. It's hard to prop up a financial system that has no basis in reality for its paper fiat currencies... and it's my view that we are moving [into] a new financial regime." [I couldn't agree more... so you have been officially put on notice, dear reader! - Ed] The link to this must read story is here.
Solar Shield -- Protecting the North American Power Grid
The next five items are articles/essays that were sent to me during the last week... which I've been saving for this last column. Hopefully you will have the time to read them all while I'm gone next week.
The first piece is the shortest... and to me, the most interesting. I have a past history in the earth sciences... and this piece is particularly fascinating, at least to me. It's an article posted over at science.nasa.gov... so it certainly isn't science fiction, it's science fact. The headline reads "Solar Shield -- Protecting the North American Power Grid". The first paragraph speaks of the Carrington Event of 1859... but only touches on it lightly... and you can read more about that event here, which will give you an idea of just how dangerous this phenomena is. And it's not a matter of if it will happen, but when it will happen... and how bad will it be when it does. In our modern electronic world, it will be a planetary disaster of biblical proportions. The entire NASA article is linked here.
Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
The next essay is from Rolling Stone magazine and is an excerpt from Matt Taibbi's new book entitled "Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America"... which is due out on November 2nd. In this exclusive excerpt, he describes how our [meaning the U.S.A.] cash-strapped country is auctioning off its highways, ports and even parking meters at fire sale prices — and finding eager buyers in the unregulated sovereign wealth funds of oil-rich Middle Eastern countries. This 5-page essay is worth your time... and I thank reader Roy Stephens for sending it along... and the link is here.
The Blundering Herd
The next big read is courtesy of Washington state reader S.A. It's from the business section of the November issue of Vanity Fair. In it, authors Behany McLean and Joe Nocera give a blow-by-blow description of the evisceration of Wall Street giant, Merrill Lynch... as CEO Stanley O'Neal developed a raging case of Goldman Sachs envy... which began a blind stampede into unprecedented risk. This, too, is a 5-page tome... and it's an education. It, too, is an excerpt from a book entitled All the Devils Are Here. The headline to this essay reads "The Blundering Herd"... and the link is here.
A Cross of Gold
Lastly today, is commentary I stole from a GATA release that contains the speech by Edwin Vieira that he gave at the fall dinner meeting of the Committee for Monetary Research and Education. Vieira is a constitutional lawyer, historian, scholar, and GATA consultant. He's also the author of the magisterial history of the monetary system of the United States... "Pieces of Eight". He made a stirring appeal for the replacing the authoritarianism, corruption, and dysfunction of that system with a gold-based system. I've heard Edwin speak on this issue before... and he's a stunning public speaker.
The paper from which Vieira's address was drawn is titled "A Cross of Gold". This 23-page essay is your very long read of the day/weekend... and is a must read from one end to the other... and the link to the pdf file is here.
¤ The Wrap
The present domestic and international monetary and banking systems have slipped into the initial stages of terminal dissolution. In their present forms, they cannot long survive.- Edwin Vieira
My 'blast from the past' today takes me back about 40 years. When I was growing up on the prairies of Canada back in the late 1960s... this was the only Canadian female singer that anyone had ever heard of. Turn up your speakers... and then click here.
Since this is my last column until Monday, November 8th... I thought I'd throw a couple of other things in here as well. Here's a comedy classic from one of the Dean Martin Celebrity Roasts back in the 1970s. It's comedian Foster Brooks roasting another famous comedian... Don Rickles. And look at the celebrities sitting at the head table along with them! This a classic... and is a must watch/listen... and the link is here.
Well, the precious metals did well for themselves on Friday. It's been many a moon since both gold and silver closed on their weekly highs at the end of the Friday trading day. The price action in silver was particularly encouraging. Volume in gold was very heavy... and silver's volume wasn't far behind. I would expect that the open interest numbers for Friday's trading, when they become available on Monday morning, will show an increase in open interest... because, without doubt, the bullion banks were going short against all the new longs that were being placed. It only remains to be seen how big those numbers will be, as nothing in yesterday's price action for both metal indicated that there was much short covering going on.
With the elections in the U.S.A. only days away... along with the FOMC meeting happening concurrently... it's a tough read as to how gold and silver will perform next week... or be allowed to perform. It will be interesting to see how big the first QE2 installment is going to be... and what assets the Fed is going to buy.
We'll just have to wait it out.
As I've mentioned a few times over the last couple of day, I'm out of town all of next week... and my next commentary will be on Monday morning, November 8th... as I certainly want to write about the week that was, before the new week begins. And, as I said yesterday, if something does go bump in the night, I'll certainly interrupt what I'm doing to write a short commentary.
I hope you enjoy the rest of your weekend. Watch out for the little 'trick or treaters'... and I'll see you on the 8th. Please click here for your own personal Hallowe'en surprise from me to you.
New Message
Please
login
to post a reply