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Image | How To Protect Yourself & Profit From This Manipulation
How To Protect Yourself & Profit From This Manipulation
 PREVIEW
by davefairtex

Executive Summary

  • What the Great Gold Smash of 2013 tells us
  • Was $1,075/oz gold the bottom? Is the bottom indeed in?
  • Is a new bull trend ahead for precious metals?
  • How to hedge against — and speculate on, for those who dare —  future manipulation attempts

If you have not yet read Part 1: EXCLUSIVE: The Smoking Gun Proving Silver & Gold Manipulation available free to all readers, please click here to read it first.

Now let's look at the great gold smash of 2013.

There were three separate operations I saw on or around the gold smash of 2013:

Operation #1: On April 12, gold had already broken below the 1525 support level to close at 1501 after dropping $100 over the two preceding months.  After a long decline followed by a support break, the market was in a very fragile state.  Sunday rolled around, and “someone” chose this moment to unload $95 in 13 volatility events over the course of just 13 hours.  This avalanche decisively drove gold down $150 in just one day.  This engineered follow-through using volatility events coming immediately after the support break resulted in the total annihilation of the longs.  Price still has not recovered from that move.

Operation #2: two days after the $150 drop, another 3-event $23 assault completely failed.  Price did not move at all.  In fact, it rallied on the day.  Why?  Why didn't we get another $150 drop?  Well, 1325 turned out to be strong support.  Buyers came out in droves to pick up the lower-priced gold.  And so when gold dropped $23 due to the volatility events, COMEX buyers snapped up the lower priced gold, and as a result the assault completely failed.

Operation #3: two months later, another 1-event $24 assault had only a very minor effect.  Price fell that day a few bucks, which was regained the day following.  Support was not quite as strong, but the market was clearly not in a fragile state at that point either.  This assault failed as well, since there was no support break and no price reset lower.

Here are three events, in relatively close proximity to one another, but under three different sets of “chart circumstances” which provided three different outcomes.  One worked, two others didn't.  The difference, I maintain, was where the market was at each point.  Fragile markets appear vulnerable to volatility events.  Strong markets are not.

Now let's look at the most recent event: July 20, 2015…

How To Protect Yourself & Profit From This Manipulation
 PREVIEW by davefairtex

Executive Summary

  • What the Great Gold Smash of 2013 tells us
  • Was $1,075/oz gold the bottom? Is the bottom indeed in?
  • Is a new bull trend ahead for precious metals?
  • How to hedge against — and speculate on, for those who dare —  future manipulation attempts

If you have not yet read Part 1: EXCLUSIVE: The Smoking Gun Proving Silver & Gold Manipulation available free to all readers, please click here to read it first.

Now let's look at the great gold smash of 2013.

There were three separate operations I saw on or around the gold smash of 2013:

Operation #1: On April 12, gold had already broken below the 1525 support level to close at 1501 after dropping $100 over the two preceding months.  After a long decline followed by a support break, the market was in a very fragile state.  Sunday rolled around, and “someone” chose this moment to unload $95 in 13 volatility events over the course of just 13 hours.  This avalanche decisively drove gold down $150 in just one day.  This engineered follow-through using volatility events coming immediately after the support break resulted in the total annihilation of the longs.  Price still has not recovered from that move.

Operation #2: two days after the $150 drop, another 3-event $23 assault completely failed.  Price did not move at all.  In fact, it rallied on the day.  Why?  Why didn't we get another $150 drop?  Well, 1325 turned out to be strong support.  Buyers came out in droves to pick up the lower-priced gold.  And so when gold dropped $23 due to the volatility events, COMEX buyers snapped up the lower priced gold, and as a result the assault completely failed.

Operation #3: two months later, another 1-event $24 assault had only a very minor effect.  Price fell that day a few bucks, which was regained the day following.  Support was not quite as strong, but the market was clearly not in a fragile state at that point either.  This assault failed as well, since there was no support break and no price reset lower.

Here are three events, in relatively close proximity to one another, but under three different sets of “chart circumstances” which provided three different outcomes.  One worked, two others didn't.  The difference, I maintain, was where the market was at each point.  Fragile markets appear vulnerable to volatility events.  Strong markets are not.

Now let's look at the most recent event: July 20, 2015…

Image | Off The Cuff: Prosper!
Off The Cuff: Prosper!
 PREVIEW
by Chris Martenson

In this week's Off The Cuff podcast, Chris and Adam discuss: Announcing our new book: Prosper! Releasing publicly on Nov 17th Destroying The Public's Trust Another valuable fast-depleting resource Eroding Sentiment It's what causes bubble to pop. And we're seeing a lot of it. US Intervention In The Middle East The worst topic for wrapping…
Off The Cuff: Prosper!
 PREVIEW by Chris Martenson

In this week's Off The Cuff podcast, Chris and Adam discuss: Announcing our new book: Prosper! Releasing publicly on Nov 17th Destroying The Public's Trust Another valuable fast-depleting resource Eroding Sentiment It's what causes bubble to pop. And we're seeing a lot of it. US Intervention In The Middle East The worst topic for wrapping…
Image | How A Major Housing Correction Can Happen Over The Next 1.5 Years
How A Major Housing Correction Can Happen Over The Next 1.5 Years
 PREVIEW
by charleshughsmith

Executive Summary

  • The Fed Won't Be Able To Soak Up Bad Mortgages Like It Once Did
  • Chinese Capital Will Dry Up After Capital Controls Are Imposed
  • The weakening petro-dollar will weaken demand for high-end housing
  • The inevitable symmetry of bubbles will force a price mean-reversion

If you have not yet read Part 1: How Much Longer Can Our Unaffordable Housing Prices Last? available free to all readers, please click here to read it first.

In Part 1, we looked at factors that limit further home price appreciation—mortgage rates that can’t go much lower and stagnant household incomes—and factors that could continue to push prices higher in islands of strong job growth and global demand.

Here in Part II, we’ll look at several dynamics that could deflate the current Housing Bubble #2, even in areas currently experiencing high demand for housing such as New York City and San Francisco.

The Fed Will Encounter Political Headwinds in Pushing Money to the Wealthy

Setting aside cash buyers from overseas, a major factor in the inflation of Housing Bubble #2 was the Federal Reserve’s quantitative easing programs that expanded the pool of money available to the already-wealthy while prompting very little “trickling down” of this new money to the bottom 90% of households.

The one Fed policy that aided the bottom 90% was buying $1.75 trillion of home mortgages. This unprecedented buying spree helped push mortgage rates down to equally unprecedented lows.

 

But as this chart shows, the Fed is…

How A Major Housing Correction Can Happen Over The Next 1.5 Years
 PREVIEW by charleshughsmith

Executive Summary

  • The Fed Won't Be Able To Soak Up Bad Mortgages Like It Once Did
  • Chinese Capital Will Dry Up After Capital Controls Are Imposed
  • The weakening petro-dollar will weaken demand for high-end housing
  • The inevitable symmetry of bubbles will force a price mean-reversion

If you have not yet read Part 1: How Much Longer Can Our Unaffordable Housing Prices Last? available free to all readers, please click here to read it first.

In Part 1, we looked at factors that limit further home price appreciation—mortgage rates that can’t go much lower and stagnant household incomes—and factors that could continue to push prices higher in islands of strong job growth and global demand.

Here in Part II, we’ll look at several dynamics that could deflate the current Housing Bubble #2, even in areas currently experiencing high demand for housing such as New York City and San Francisco.

The Fed Will Encounter Political Headwinds in Pushing Money to the Wealthy

Setting aside cash buyers from overseas, a major factor in the inflation of Housing Bubble #2 was the Federal Reserve’s quantitative easing programs that expanded the pool of money available to the already-wealthy while prompting very little “trickling down” of this new money to the bottom 90% of households.

The one Fed policy that aided the bottom 90% was buying $1.75 trillion of home mortgages. This unprecedented buying spree helped push mortgage rates down to equally unprecedented lows.

 

But as this chart shows, the Fed is…

Image | Off The Cuff: Signs Of A Roll-Over
Off The Cuff: Signs Of A Roll-Over
 PREVIEW
by Chris Martenson

In this week's Off The Cuff podcast, Chris and John Rubino discuss: A Lack Of Logic Markets today no longer trade on sense Signs Of A Roll-Over It increasingly looks like we're past the market peak Black Swans Are Landing Volkswagen, Glencore & Deutche Bank What Separates The Rich From The Poor? The Fed This week John…
Off The Cuff: Signs Of A Roll-Over
 PREVIEW by Chris Martenson

In this week's Off The Cuff podcast, Chris and John Rubino discuss: A Lack Of Logic Markets today no longer trade on sense Signs Of A Roll-Over It increasingly looks like we're past the market peak Black Swans Are Landing Volkswagen, Glencore & Deutche Bank What Separates The Rich From The Poor? The Fed This week John…
Image | Off The Cuff: The Betrayal Of Capital
Off The Cuff: The Betrayal Of Capital
 PREVIEW
by Chris Martenson

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss: Growing Weakness At The Periphery A reminder that collapse happens from the outside in The Betrayal Of Capital We are watching the predictable result of too much mal-investment Natural Limits Will Be The Ones That Matter The ones that can't be addressed…
Off The Cuff: The Betrayal Of Capital
 PREVIEW by Chris Martenson

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss: Growing Weakness At The Periphery A reminder that collapse happens from the outside in The Betrayal Of Capital We are watching the predictable result of too much mal-investment Natural Limits Will Be The Ones That Matter The ones that can't be addressed…
Image | From Deflation To Hyperinflation
From Deflation To Hyperinflation
 PREVIEW
by Chris Martenson

Executive Summary

  • China is rolling over
  • Contagion will eventually take down the core economies, including the US
  • We are witnessing a full-blown collapse of the commodity complex
  • Deflation will win the day over the next year, but then get ready for helicopter money hyperinflation

If you have not yet read Part 1: Deflation Warning: The Next Wave available free to all readers, please click here to read it first.

The Chinese GDP Lie

Right off the top, China is not growing anywhere near the 7% it claims.  That’s just a politically useful lie that the Chinese tell to the world as much as they tell to themselves.

Fortunately, hardly anyone is falling for that particular fib any longer.  Let’s start with the completely obvious manufacturing slump that has hit China:

Chinese Factory Gauge Slumps to Lowest Level Since March 2009

Sept 22, 2015

A private Chinese manufacturing gauge fell to the lowest in 6 1/2 years, underscoring challenges facing the economy as its old growth engines splutter.

A global sell off in riskier assets gained pace after the preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics dropped to 47.0 in September. That missed the median estimate of 47.5 in a Bloomberg survey and fell from the final reading of 47.3 in the previous month. Readings have remained below 50 since March, indicating contraction.

Premier Li Keqiang’s growth target of about 7 percent for this year is being challenged by a slowdown in manufacturing and exports even as services and consumption show resilience.

(Source)

The way a PMI reading works is anything over 50 indicates expansions and anything under 50 indicates contraction.  Anybody care to explain to me how China can be sporting sub-50 readings every month since March — that’s five full months — and still be claiming to be aiming for a 7% annual growth target?  You know, because China is…

From Deflation To Hyperinflation
 PREVIEW by Chris Martenson

Executive Summary

  • China is rolling over
  • Contagion will eventually take down the core economies, including the US
  • We are witnessing a full-blown collapse of the commodity complex
  • Deflation will win the day over the next year, but then get ready for helicopter money hyperinflation

If you have not yet read Part 1: Deflation Warning: The Next Wave available free to all readers, please click here to read it first.

The Chinese GDP Lie

Right off the top, China is not growing anywhere near the 7% it claims.  That’s just a politically useful lie that the Chinese tell to the world as much as they tell to themselves.

Fortunately, hardly anyone is falling for that particular fib any longer.  Let’s start with the completely obvious manufacturing slump that has hit China:

Chinese Factory Gauge Slumps to Lowest Level Since March 2009

Sept 22, 2015

A private Chinese manufacturing gauge fell to the lowest in 6 1/2 years, underscoring challenges facing the economy as its old growth engines splutter.

A global sell off in riskier assets gained pace after the preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics dropped to 47.0 in September. That missed the median estimate of 47.5 in a Bloomberg survey and fell from the final reading of 47.3 in the previous month. Readings have remained below 50 since March, indicating contraction.

Premier Li Keqiang’s growth target of about 7 percent for this year is being challenged by a slowdown in manufacturing and exports even as services and consumption show resilience.

(Source)

The way a PMI reading works is anything over 50 indicates expansions and anything under 50 indicates contraction.  Anybody care to explain to me how China can be sporting sub-50 readings every month since March — that’s five full months — and still be claiming to be aiming for a 7% annual growth target?  You know, because China is…

Image | Why Gold Is Headed Higher & May Become Unavailable At Any Price
Why Gold Is Headed Higher & May Become Unavailable At Any Price
 PREVIEW
by Chris Martenson

Executive Summary

  • The amount of gold in London's vaults dropped by 1/3 in the past year(!)
  • Activity at the COMEX is flashing warning signs
  • When to worry about physical defaults
  • Simple math will win out: the West is fast running out of its bullion

If you have not yet read Part 1: Buy Gold While You Still Can! available free to all readers, please click here to read it first.

An interesting piece of detective work was done by Ronan Manly at Bullionstar.com where he noted that the LBMA reported pronounced drops in the amount of gold stored in London vaults, which includes both gold held at the Bank of England as well as non-official vaults within the LBMA system.

To summarize his report, here’s the amount of gold reportedly held in London:

  • April 2014 – 9,000 tonnes
  • Early 2015 – 7,500 tonnes
  • June 2015 – 6,250 tonnes

That means that 2,750 tonnes left London over the past 1+ year.

Does such a large number even make sense?

Well, sure, if we consider that just four countries cumulatively imported (or increased reserves) by ~4,500 tonnes since the beginning of 2014.

Confirming this is the handy chart below of gold flows as compared to…

Why Gold Is Headed Higher & May Become Unavailable At Any Price
 PREVIEW by Chris Martenson

Executive Summary

  • The amount of gold in London's vaults dropped by 1/3 in the past year(!)
  • Activity at the COMEX is flashing warning signs
  • When to worry about physical defaults
  • Simple math will win out: the West is fast running out of its bullion

If you have not yet read Part 1: Buy Gold While You Still Can! available free to all readers, please click here to read it first.

An interesting piece of detective work was done by Ronan Manly at Bullionstar.com where he noted that the LBMA reported pronounced drops in the amount of gold stored in London vaults, which includes both gold held at the Bank of England as well as non-official vaults within the LBMA system.

To summarize his report, here’s the amount of gold reportedly held in London:

  • April 2014 – 9,000 tonnes
  • Early 2015 – 7,500 tonnes
  • June 2015 – 6,250 tonnes

That means that 2,750 tonnes left London over the past 1+ year.

Does such a large number even make sense?

Well, sure, if we consider that just four countries cumulatively imported (or increased reserves) by ~4,500 tonnes since the beginning of 2014.

Confirming this is the handy chart below of gold flows as compared to…

Image | Off The Cuff: Look Out Below!
Off The Cuff: Look Out Below!
 PREVIEW
by Chris Martenson

In this week's Off The Cuff podcast, Chris and Mish Shedlock discuss:

  • The Periphery Is Collapsing Fast
    • Emerging market currencies are falling hard vs the US dollar
  • China Is Running Off The Rails
    • We're witnessing a bust in progress
  • Europe's Black Swan Has Landed
    • A migrant crisis no one saw coming this quickly
  • The US Is Sliding Back Into Recession
    • The data is bad and getting worse

 

 
Off The Cuff: Look Out Below!
 PREVIEW by Chris Martenson

In this week's Off The Cuff podcast, Chris and Mish Shedlock discuss:

  • The Periphery Is Collapsing Fast
    • Emerging market currencies are falling hard vs the US dollar
  • China Is Running Off The Rails
    • We're witnessing a bust in progress
  • Europe's Black Swan Has Landed
    • A migrant crisis no one saw coming this quickly
  • The US Is Sliding Back Into Recession
    • The data is bad and getting worse

 

 
Image | The War On Cash Intensifies
The War On Cash Intensifies
 PREVIEW
by Chris Martenson

The central planners are setting the stage for the next round of officially sanctioned theft and this time they mean to assure that you have no way(s) of escaping.

They’re coming for your cash. This is a risk that Charles Hughes Smith explored for us back in June in a very well-received analysis.

Once a fringe idea, this concept is now being openly discussed and debated at the highest levels publicly. Which means it is being hotly discussed behind closed doors, and likely has been for a long time.

The War On Cash Intensifies
 PREVIEW by Chris Martenson

The central planners are setting the stage for the next round of officially sanctioned theft and this time they mean to assure that you have no way(s) of escaping.

They’re coming for your cash. This is a risk that Charles Hughes Smith explored for us back in June in a very well-received analysis.

Once a fringe idea, this concept is now being openly discussed and debated at the highest levels publicly. Which means it is being hotly discussed behind closed doors, and likely has been for a long time.

Image | Off The Cuff: The Future Of The Fed
Off The Cuff: The Future Of The Fed
 PREVIEW
by Chris Martenson

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • The Future Of The Fed
    • Further easing seems assured for 2016
  • The Worlds Central Banks Are Cornered
    • They have no good options if crisis hits
  • The Debt Time-Bomb
    • No matter what the Fed engineers, our debt will kill the economy in the end
  • Politics As The Newest Black Swan
    • The populace is becoming unrestful

 

 
Off The Cuff: The Future Of The Fed
 PREVIEW by Chris Martenson

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • The Future Of The Fed
    • Further easing seems assured for 2016
  • The Worlds Central Banks Are Cornered
    • They have no good options if crisis hits
  • The Debt Time-Bomb
    • No matter what the Fed engineers, our debt will kill the economy in the end
  • Politics As The Newest Black Swan
    • The populace is becoming unrestful

 

 
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