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Economy
by
JW
by
Adam Taggart
Executive Summary
- Large players (and likely price manipulators) now have incentive for precious metals prices to rise
- Investor demand for bullion remains at record highs
- Competition for bullion from the East continues to heat up
- Central banks buy more bullion as Comex inventories deplete
- The key signs to know when it will be time to sell your gold & silver
If you have not yet read Part I: Is Gold at a Turning Point? available free to all readers, please click here to read it first.
Manipulation
Much has been written across the Web (including here at PeakProsperity.com) about whether or not the precious metals markets are manipulated in price by big players (major multi-national banks such as JP Morgan). Without delving into the many arguments on both the pro and con sides, Chris and I are of the opinion that sufficient data exists to convince a reasonable observer that price manipulation in the PM markets is indeed real, or, at the very least, highly probable. (For those remaining doubters out there, have a look at the evidence here, here, and here, and let us know if you have a rational, non-manipulative explanation.)
One of the most glaring signs of likely manipulation has been the massive short positions that a small number of large banks (JP Morgan being the most prominent among them) have held for many years, particularly in the silver market [measure positions as % of world silver production]. And not only were these unlimited positions allowed, but this cabal of banks was allowed to naked-sell PMs short (i.e., sell metal without actually owning it first). On the other side of the coin, the long side, position limits were enforced, and there was no similar ability to buy more metal than one could pay for. This imbalance of rules certainly provides the mechanism by which PM prices could be artificially jockeyed more easily to the downside. In this context, a decline from the high $40s to the low $20s looks more understandable.
Well, a very important part of this story has just shifted. The CFTC (Commodities Futures Trading Commission) publishes a monthly report illustrating the positions taken in Comex Futures Contracts
After nearly ten years of being net short in Comex gold futures, U.S. banks have been recently decreasing those short positions, and – for the first time since 2004 (with the exception of a single month in 2008) – they have flipped to become net long gold in May (see bottom chart below)…
The New Game-Changers for Gold & Silver
PREVIEW by Adam TaggartExecutive Summary
- Large players (and likely price manipulators) now have incentive for precious metals prices to rise
- Investor demand for bullion remains at record highs
- Competition for bullion from the East continues to heat up
- Central banks buy more bullion as Comex inventories deplete
- The key signs to know when it will be time to sell your gold & silver
If you have not yet read Part I: Is Gold at a Turning Point? available free to all readers, please click here to read it first.
Manipulation
Much has been written across the Web (including here at PeakProsperity.com) about whether or not the precious metals markets are manipulated in price by big players (major multi-national banks such as JP Morgan). Without delving into the many arguments on both the pro and con sides, Chris and I are of the opinion that sufficient data exists to convince a reasonable observer that price manipulation in the PM markets is indeed real, or, at the very least, highly probable. (For those remaining doubters out there, have a look at the evidence here, here, and here, and let us know if you have a rational, non-manipulative explanation.)
One of the most glaring signs of likely manipulation has been the massive short positions that a small number of large banks (JP Morgan being the most prominent among them) have held for many years, particularly in the silver market [measure positions as % of world silver production]. And not only were these unlimited positions allowed, but this cabal of banks was allowed to naked-sell PMs short (i.e., sell metal without actually owning it first). On the other side of the coin, the long side, position limits were enforced, and there was no similar ability to buy more metal than one could pay for. This imbalance of rules certainly provides the mechanism by which PM prices could be artificially jockeyed more easily to the downside. In this context, a decline from the high $40s to the low $20s looks more understandable.
Well, a very important part of this story has just shifted. The CFTC (Commodities Futures Trading Commission) publishes a monthly report illustrating the positions taken in Comex Futures Contracts
After nearly ten years of being net short in Comex gold futures, U.S. banks have been recently decreasing those short positions, and – for the first time since 2004 (with the exception of a single month in 2008) – they have flipped to become net long gold in May (see bottom chart below)…
by
Adam Taggart
by
Adam Taggart
by
Chris Martenson
Executive Summary
- The data shows first-time home buyers already beginning to throw in the towel
- But house "flipping" by amateur investors is coming back into vogue
- Why we're back in a housing bubble
- Big funds are beginning to exit retail housing due to too much "stupid money"
- The risks every home buyer (and homeowner) needs to be aware of right now
If you have not yet read Part I: Housing Prices are Being Dangerously Distorted by Big Institutional Money available free to all readers, please click here to read it first.
The Impacts
As noted in the Salt Lake City anecdote above, one obvious impact of all this institutional money is that it is preventing ordinary people from buying a home because they cannot compete with the big money firms:
Blackstone, other investors snap up thousands of Tampa Bay rental homes
Ken and Susan Beran embodied that old idea of the American dream. They married. Built a house. Raised a daughter within its walls. But after 30 years, as Ken eyed retirement, the Berans envisioned a different dream.
In December, they moved to a new home — this time, to rent. Ken said he can't imagine ever buying a home again. Susan, a first-grade teacher, hasn't felt so calm in years. "I'm leaving a building I had to maintain, had to stress over," Susan said. "I'm taking all of my memories with me."
Bad credit, ravaged savings and evolving attitudes are driving more Americans to rent houses, and big-money investors are waging war to win their business. Few are mightier than the Blackstone Group, which dropped $150 million to buy 1,000 Tampa Bay homes — in just the last six months.
The New York-based private equity giant has already bet $3.5 billion across the country that the housing crisis has fundamentally changed the way many families live. Once-proud homeowners like the Berans, they believe, are beginning to reject home ownership altogether.
It seems entirely wrong to me that the Fed bailed out big banks and made money excessively cheap for institutions, and that this is being used to price ordinary people out of the housing market. Said another way, the Fed prints fake money out of thin air and some companies use that same money to buy real things like houses and then rent them out to real people trying to live real lives.
Recently it was shown that the number of first-time homebuyers has fallen by 25% as these typically low-end buyers have retreated in the face of higher prices.
Not exactly the sort of 'spin' you usually read on that story, but it's more honest than trying to claim that the recent price hikes are due to improving consumer confidence and an economic recovery…
And the Smart Money Is Already Withdrawing
PREVIEW by Chris MartensonExecutive Summary
- The data shows first-time home buyers already beginning to throw in the towel
- But house "flipping" by amateur investors is coming back into vogue
- Why we're back in a housing bubble
- Big funds are beginning to exit retail housing due to too much "stupid money"
- The risks every home buyer (and homeowner) needs to be aware of right now
If you have not yet read Part I: Housing Prices are Being Dangerously Distorted by Big Institutional Money available free to all readers, please click here to read it first.
The Impacts
As noted in the Salt Lake City anecdote above, one obvious impact of all this institutional money is that it is preventing ordinary people from buying a home because they cannot compete with the big money firms:
Blackstone, other investors snap up thousands of Tampa Bay rental homes
Ken and Susan Beran embodied that old idea of the American dream. They married. Built a house. Raised a daughter within its walls. But after 30 years, as Ken eyed retirement, the Berans envisioned a different dream.
In December, they moved to a new home — this time, to rent. Ken said he can't imagine ever buying a home again. Susan, a first-grade teacher, hasn't felt so calm in years. "I'm leaving a building I had to maintain, had to stress over," Susan said. "I'm taking all of my memories with me."
Bad credit, ravaged savings and evolving attitudes are driving more Americans to rent houses, and big-money investors are waging war to win their business. Few are mightier than the Blackstone Group, which dropped $150 million to buy 1,000 Tampa Bay homes — in just the last six months.
The New York-based private equity giant has already bet $3.5 billion across the country that the housing crisis has fundamentally changed the way many families live. Once-proud homeowners like the Berans, they believe, are beginning to reject home ownership altogether.
It seems entirely wrong to me that the Fed bailed out big banks and made money excessively cheap for institutions, and that this is being used to price ordinary people out of the housing market. Said another way, the Fed prints fake money out of thin air and some companies use that same money to buy real things like houses and then rent them out to real people trying to live real lives.
Recently it was shown that the number of first-time homebuyers has fallen by 25% as these typically low-end buyers have retreated in the face of higher prices.
Not exactly the sort of 'spin' you usually read on that story, but it's more honest than trying to claim that the recent price hikes are due to improving consumer confidence and an economic recovery…
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