Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20
Gold Mining Stocks Fundamentals - 18th May 20
Why the Largest Cyberattack in History Will Happen Within Six Months - 18th May 20
New AMD Ryzen 4900x and 4950x Zen3 4th Gen Processors Clock Speed and Cores Specs - 18th May 20
Learn How to Play the Violin, Kids Activities and Learning During Lockdown - 18th May 20
The Great Economy Reopening Gamble - 17th May 20
Powell Sends a Message With Love for Gold - 17th May 20
An Economic Renaissance Emerges – Stock Market Look Out Below - 17th May 20
Learn more about the UK Casino Self-exclusion - 17th May 20
Will Stocks Lead the Way Lower for Gold Miners? - 15th May 20
Are Small-Cap Stocks (Russell 2k) Headed For A Double Dip? - 15th May 20
Coronavirus Will Wipe Out These Three Industries for Good - 15th May 20
Gold and Silver: As We Go from Deflation to Hyperinflation - 15th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Mammoth Market Forces Prospects

Stock-Markets / Financial Markets 2013 Apr 20, 2013 - 08:00 PM GMT

By: DeepCaster_LLC

Stock-Markets

“[O]n Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. …

 

“…with naked shorts, no physical metal is actually sold…

 

Consider the 500 tons of paper gold sold on Friday. Begin with the question, how many ounces is 500 tons? There are 2,000 pounds to one ton. 500 tons equal 1,000,000 pounds. There are 16 ounces to one pound, which comes to 16 million ounces of short sales on Friday.


“Who has 16 million ounces of gold? At the beginning gold price that day of about $1,550, that comes to $24,800,000,000. Who has that kind of money?

“What happens when 500 tons of gold sales are dumped on the market at one time or on one day? Correct, it drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds. The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1,168,000,000.

“Who can afford to lose that kind of money? Only a central bank that can print it.

“Assault on Gold Update,” Paul Craig Roberts, frmr asst Treasury sect. Reagan Administration, PaulCraigRoberts.org

 

 

The recent dramatic Gold and Silver Price Takedown revealed the playing out of Mammoth Market Forces with Effects far beyond the Precious Metals Market. Monitoring these Forces is Essential for Investors going forward.

 

Among other Effects the Precious Metals Price Takedown demonstrated that the Prospects for certain Key Commodities Price launches soon are better than ever (but of course from lower levels).

 

It also demonstrated that even higher Price Targets sooner are now in store for these Key Commodities and Gold and Silver.

 

Why? The recent Cartel (Note 1) coordinated Takedown was effected by the selling of 500 tons ($25 billion) of paper Gold – representing 15% of all annual mine production. Total contracts traded represented about 3,000 tons. If all that were Physical, it would not be feasible, and probably not possible, to make delivery. Only The Cartel or a Major Catastrophe could have created such an 8 Standard Deviation Event!

 

But in the Real Market, the Physical Market, the Premiums for Physical (over the Paper Spot Price) have been increasing both before and after the Price Takedown. Indeed, Precious Metal Markets Professional Bill Haynes reports that Physical Gold at recent prices is flying off the shelves at a record clip – Buyers exceeded Sellers by 50 to 1. This report is consistent with others from around the World indicating that this Takedown has had the Unintended Consequence of dramatically increasing the demand for Physical.

 

Thus our recent forecast of “inevitable Takedowns” has been proven correct, although the magnitude of the Takedown surprised us a bit. But we should not be surprised and considering The Cartel’s Extraordinary motivation for the Takedowns. This Extraordinary Motivation reveals much about the Prospects for the Precious Metals and Commodities Markets, and, indeed for Markets in general.

 

London Bullion Dealer Andrew Maguire provides what is probably the Key Clue. He reports that, after Cyprus, the demand for Delivery of Physical Gold skyrocketed and the London Gold Market had nearly run out of Physical Metal and could not honor contracts for Physical Delivery. Thus Key Central Banks and Governments felt they had to undermine enthusiasm for the Metal (and wipe out speculative longs trading on Margin) by taking down the price. But instead of undermining enthusiasm for Physical, the Cartel Takedown has increased it.

 

One correspondent’s analysis is probably spot on.

 

“Andrew McGuire, hospitalized some time ago by a London hit-and-run driver after stating that the gold price was artificially suppressed by …, now says that the latest attack on gold occurred because the London metal market was short gold and unable to honor contracts that called for physical delivery. At around $1350/oz, it suddenly becomes much easier, of course, because many “long” speculators have been ruined.

 

“Another sender writes:

also, from another trusted source, there is no gold left in Turkey, sold out, coins, bars, etc

 

“Elsewhere, one hears that physical silver is hard to come by in the US; orders placed now, by best customers, cannot expect delivery for 2 to 4 weeks. The Comex paper price bears little relation to the price of physical metals, which sell at significant premiums.

 

India and China continue metal purchases.”

 

Private Communication, 4/17/2013

 

 

Clearly, the Fed’s (and other Central Bank’s) Promiscuous Printing of the $US (and other Fiat Currencies) has resulted in an obvious and continuing weakness in the $US  purchasing power in terms of Gold and Silver, were these Precious Metals (and Commodities prices in general) prices not suppressed.

 

And to a considerable degree the same motivations exist for other Central and allied Mega Banks. The Banking Cartel cannot afford weakness in the World’s Reserve Currency or indeed in other Major Fiat Currencies at this time because they know that the flight into Real Assets would turn into a Major Move toward abandoning their Fiat Currencies.

 

And if/when the $US (and/or other Fiat Currencies) falls they lose Power and Wealth. From their perspective, their suppression of Real Asset Prices must succeed at all costs. But the fact they acted so dramatically now, demonstrates they are increasingly desperate to prevent obvious commodities price inflation and especially a Gold and Silver Price Spike up. Thus, we still forecast Gold and Silver’s launch should occur no later than our earlier Forecast and quite possibly sooner.

 

The motivation behind the Precious Metals Takedown is clear. In addition to the usual one of not wanting competition for their Treasury Securities and Fiat Currencies, The Cartel clearly wants to hide the structural weakness in the $US, and in their other Fiat Currencies vis-à-vis Real Assets such as Gold and Silver.

 

Short-term, the Takedown has achieved its desired effect in the Paper Precious Metals Market, but has boosted Premiums for Physical. And the $US is bouncing around just under 83 basis USDX. We recently Forecast when its downtrend likely resumes.

 

That structural US$ weakness derives mainly from the Central Bank’s orgiastic QE and from the fact that the U.S., Eurozone, Japanese, Chinese, and indeed the International Economy is not recovering. Statistics revealing China’s slowdown are yet another indication of that.

 

The Falling Price of Dr. Copper, THE Main Economic Health Indicator, and Crude Oil along with weak employment and PPI numbers in major nations around the world, tell us that once again it behooves Investors to methodically begin to move out of $US and Euro denominated Assets and into Real Money (Gold and Silver), and the Aussie $ or Swiss Franc, and carefully selected Real Estate and Essential Food Commodities and related businesses (Stellar Price Prospects for these! -- See notes below re. Recommendations).

 

Longer term, U.S. Treasury Securities are The Great Bubble. We reiterate: the most telling feature of recent market action was not the recent weakness in the Equities Markets. Rather, it was the flight to the Ostensible Safety of U.S. Treasuries. Were one to short long-dated U.S. treasuries here and hold for the long term, one would almost surely profit. Perhaps the Greatest Mammoth Force in Months to come will be the Bursting of the U.S. Treasury Bubble.

 

The Bernanke Bond Bubble is not immortal. The current choppy almost imperceptible rise in the yields trend in recent months will accelerate as the months wear on. Thus another Key Signal has been sent recently. The beginning of the end of the $US as the World’s reserve currency is coming ever closer; a matter of months.

 

Australia and France have already agreed to deal directly with the Chinese in Yuan. And the Chinese have become the World’s largest Gold Importer and Producer.

 

Regarding Equities, until recently they have kept levitating in spite of weak overall Economic numbers.

 

It is old news that Fed and other Central Bank liquidity is doing the levitating. But Equities cannot stay pumped forever when the fundamentals do not support them.

 

Five out of every six S&P companies have issued Negative Guidance.

 

And the “China Slowdown” news was the catalyst for this week’s Takedown.

 

Indeed, our Four Wave Equities forecast for 2013, correct thus far, appears to be playing out. The first quarter’s Up (Wave 1) now appears to have topped and to be reversing down as we earlier forecast into Wave 2.

 

We reiterate, we forecast a (Wave #2) choppy down Move of 5% to 10% over the next few weeks, probably contemporaneous with U.S. Battles over the Budget and Debt Ceiling which are just beginning to heat up. Could it be that The Administration via the “President’s Working Group on Financial Markets” (which, per the 1987 Act, has legal Authority to Move Markets) has an interest in keeping Equities Prices boosted except when Takedowns are useful to pressure Congress? It would not surprise us to see sharp Takedowns as the Budget and Debt Ceiling battles heat up.

 

The Equities Market is “artificially” elevated as PIMCO CEO El-Erian said. And Chairman Bernanke recently said the QE would keep coming… That is a very Dangerous Situation which may well lead to a Stagflation-induced Crash likely beginning sometime late in 2013, or early 2014. The Fed and other Central Banks cannot keep money pumping as Inflation obviously intensifies.

 

From a technical perspective, the aforementioned Prospective Bull Rally Top coming later, would complete the Hindenburg Omen Pattern (and Monday’s Equities Drop generated another H.O. Observation by the way), and thus, likely beginning sometime later this year, to be followed by the Cataclysmic multi-leg Crash – the impending Mega-Move of which we speak, and which we think is highly probable. As we successfully did before the 2008 Crash, we will be looking to recommend leveraged shorts prior to that Crash.

 

In sum, the Economic Fundamentals of the USA, Eurozone, and Japan, collectively 53% of the Global Economy, including Debt HyperSaturation, ever higher Unemployment, and Economic Stagflation have not disappeared. And the Fiat Currency “war” among them has only just begun. And Cyprus Precedent and the Italian Election Stalemate and Portugal’s Continuing Decline remind us that Eurozone problems are still very much with us. Italy has the third largest economy in the Eurozone.

 

And Dr. Copper’s swoon is telling us the Equities Rally is built on Sand and Fed Paper. This is what the multi-year Hindenburg Omen Chart Pattern is also telling us.

 

In sum, the Equities Markets are treacherous and we counsel being very careful regarding long positions.  As we earlier indicated, a Sector by Sector analysis is best. Some will rise and some fall dramatically. (See Notes 2 and 3 below.)

 

One Final Caveat regarding the Equities Markets: Several Negative Events could cancel any further Monetary Inflation-induced Rally.

 

It appears ever more likely for example, that there could be a sudden flight away from the $US – could cancel any such Rally. And war with North Korea or intensified War in the Mideast could do it as well. The flight away from the U.S. Dollar could happen any time (see above).

 

Contrary to bemused opinion, Wars, especially Nuclear Wars, are not good for long-term Economic or Market Health – Skilled Workers and Valuable Capital are destroyed. Stay Tuned.

 

One other Key Mammoth Force to observe is the Crude Oil Price. We repeat that the Crude Oil price tells the truth (i.e., is harder to manipulate). And, along with Dr. Copper, (and contrary to the artificially (and until this past week) elevated equities Market) the truth it (and Dr. Copper) has been telling recently that the Economy is weakening.

 

One should ask: if the Economy is strengthening, why are Crude and Copper declining?

 

The Rush to buy Physical Gold, even after the Paper Price Takedown and the fact that the S&P recently broke down out of its Uptrend Channel, shows us that Fed Policy is, once again, failing to help the Real Economy, and is instead helping mainly their shareholders/owners, the Mega-Banks.

 

David Rosenberg capsulizes well one likely consequence of Failed Central Bank Policy.

 

“The central banks can try to provide as much liquidity as possible to the marketplace, but the problem is that liquidity is already in abundance. The central banks are now resorting to force-feeding an obese man (hence the ‘puking out’). The real risk is actually that investors begin to sense that the central banks are starting to lose their credibility…which is what happens when policy fails.”

 

David Rosenberg, Gluskin Sheff

 

It may well be that the Central Banks are boxing themselves into a Corner of their own making –their Excessive Saturation of Sovereigns and citizens with debt leaves Massive Debt Write-offs/Repudiation – the Icelandic Solution – as the increasingly likely Sole Option.

 

Mammoth Force analysis is immensely useful and indeed essential to Investors.

Best regards,

www.deepcaster.com

DEEPCASTER FORTRESS ASSETS LETTER

DEEPCASTER HIGH POTENTIAL SPECULATOR

Wealth Preservation         Wealth Enhancement

© 2013 Copyright DeepCaster LLC - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

DEEPCASTER LLC Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules