COT Silver Report - July 29, 2016
It’s Friday morning, and the astounding long, massively broad list of “PM-bullish, everything-else-bearish” headlines since Wednesday afternoon’s post-FOMC Audioblog is incredible to behold. Which is why it’s never been more obvious that Precious Metals are the imploding fiat Ponzi’s “canary in the coal mine”; “Achilles’ Heel”; and all other similar analogies, metaphors, and comparisons combined. Or, for that matter, the “enemy” of all financial markets – which since 2011 in the West, and 2015 in the East, have been commandeered by desperate, dying governments.
Gold and silver drifted this week, continuing last Friday’s end-of-week profit-taking, until the FOMC announced on Wednesday afternoon EST that there was to be no change in the Fed Funds Rate. This was the signal for gold to gain some $20 and silver 75 cents. These moves represented an apparent break-out from the last month’s consolidation, and prices for both metals could now be on course to challenge the highs of early July.
Despite short-term memory loss affecting most investors, asset bubbles tend to crash with a vengeance. From over-valuation, risk ignorance, and reactionary sentiment, the current bubble-trifecta shows signs of turning over. The monetary powers that be have succeeded in creating serial asset bubbles. Each is extending from the great expansion of credit pivoting on the last official dollar default in 1971.
So where's the good news in all of this for you? First, physical metals have not risen nearly as much, proportionately, as have the underlying mining stocks. Indeed the miners are simply playing catch up, rising faster than gold and silver – as they should, because owning them comes with more risk. Second, the general public still has not placed precious metals on their "must have" list. Sure you hear radio advertisements to buy, but how many of your neighbors, friends, and family members hold any? I'm willing to bet the answer is very few – or none!
The worst part of the world’s ongoing financial crisis is still on the way: A crisis that has its roots in the debt-based monetary system. The debt-based monetary system has facilitated the growth of debt, to levels that will inevitably bring total collapse.
On this COMEX options expiration day – and last day of this week’s “COT Report cycle,” whose result will be published Friday afternoon – my guess is the “commercials” were yet again unsuccessful in covering their shorts. Which likely, will push them a giant step further toward their inevitable, spectacular demise. To wit, yesterday’s sharp key reversal, from the prototypical, blatantly orchestrated “Sunday Night Sentiment”; “2:15 AM”; and 8:20 AM COMEX open smashes, resulting in silver prices being higher as I write, than they were Friday afternoon.
What I will say comes with some reservation, mainly because the future is unwritten. However, based on the notion that markets will rhyme rather than repeat, I present a scenario in which a decision has to be made by silver investors in the near future. That decision is whether to hold onto silver, sell some of it or sell all of it.
Silver, primarily Mike I love it as the industrial metal, as something who's known ore grades are vanishing and deposits are depleting, and we know that it's being used increasingly for more and more industrial applications. Silver is my Rip Van Winkle metal. I love it. If somebody said, "I need to pick one of these two, 20 years I want to be happy when I wake up." Silver’s it. It's a volatile metal that goes up and down, I think it could have a run down if we hit a capital “R” recession or depression across the world… if China blows up or something like that. But barring that, I love silver because of its actual supply and demand characteristics going forward. I think it's heavily underpriced here.
This enabling allows to the banks agency to do what they like. With silver in particular, they enjoy 'market maker status' on the surface while building positions that cannot be resolved without inescapable and permanent damage -- with or without any amount of intervention including confiscation and taxation. The converging legacies of the state and money centers never fully merge. They serve each other in a bizarre symbiosis that ultimately drains both to death.