first majestic silver

The "Call Of A Lifetime?"

June 15, 2016

It’s Wednesday morning – and let’s start with a little background, as we head into yet another episode of the Fed’s LOL “most important meeting ever.” To that end, recall that it was just seven weeks ago, on April 27th, when Yellen & Co published one of their most dovish statements yet, catalyzing a gold price surge from $1,235 to $1,300 in less than a week’s time. This forced the Cartel – errr, the COMEX “Commercials” – to extend their already near-record naked short positions further; which unfortunately for them, couldn’t even push gold below $1,270/oz, despite every imaginable manipulative effort.

Thus, the “FOMC minutes attack” was launched on May 18th – which I vehemently predicted would miserably fail in an epic, 42-minute Audioblog a day later, principally due to my belief that there was not a chance the Fed would raise rates in June or July – as if such an event, were they suicidal enough to attempt it, was “gold negative” in today’s economic and monetary environment. Sure, they got paper gold to fall to, LOL, $1,199.80 on Sunday night, May 29th; i.e., Memorial Day Eve, when not a single trader was working, in advance of the national holiday. And when one of the worst NFP jobs reports ever was published a week later, PMs rocketed higher anew – recovering nearly all their Cartel-orchestrated losses in just two weeks’ time.

Better yet, during this rip-roaring – yet, maniacally, blatantly capped – rally, said “Commercials” were barely able to dent their now all-time high naked short positions; particularly in gold, where they were stupid enough to “double down” last week, just before the price rocketed nearly $50/oz in the ensuing four trading days.

Not only that, but physical demand exploded as well, causing 15% of the entire remaining COMEX registered silver position to be withdrawn – to an all-time low level, below the April 2011 low, which occurred when silver surged to $50/oz. To the point that, as we speak, a mere $390 million of metal remains; which, to put it into context, is how much sovereign and corporate bonds the ECB is now “monetizing” – with freshly printed Euros – every three days!

And then there’s the “news” to consider – such as…

1. Catastrophic plunges of global economic data, such as the 15% plummet in Japanese machine orders; across-the-board declines in Chinese industrial activity to essentially, for all intents and purposes, modern era all-time lows; and egads, this morning’s horrific, “unexpected” 0.4% plunge in U.S. May industrial production.

2. The odds of a BrExit exploding higher, to the point that some polls now show the “leaves” as much as 20 percentage points ahead of the “remains.” Consequently, an “unnamed” EU official stated yesterday that should the referendum pass, the ECB would issue a statement the following morning that it would do, LOL, “whatever it takes” to maintain adequate market liquidity.

3. The “Lehman of Europe,” Deutschebank, has seen its stock plunged to an all-time low, down 8% in the past two days alone. Not to mention, Credit Suisse, whose stock “quietly” plunged to all-time lows as well.

4. The worst US “terror attack” since 9/11 occurred, whose “initial target” may well have been Disneyworld.

5. Western world sovereign yields plunged to all-time low levels – with nearly $11 trillion worth now trading at negative yields, and the benchmark 10-year US Treasury yield at 1.6%, a mere 15 basis points from its own all-time low.

6. Plunging global equities, commodities (even “oil PPT” supported crude) and currencies

7. Global Financial Stress surged to levels only witnessed in the past five years during the late 2011 US credit rating downgrade, and accompanying EU crisis; the August 2015 Yuan devaluation; and the December 2015 Fed rate hike

8. Last night, the PBOC devalued the Yuan below 6.6 to the dollar for the first time since January 2011! And oh yeah, that other competing currency, Bitcoin, principally due to explosive Chinese buying, rocketed from $450 in late May to $725 earlier this week.

9. Heck, there wasn’t even a prototypical “pre-FOMC drift” stock rally yesterday – principally due to the plunging prices of Deutsche Bank stock, “Dr. Copper,” and the British Pound, amongst others.

Consequently, going into today’s “all-important” FOMC meeting, the implied money market odds of a rate hike were not only ZERO, but there was actually a 2% chance of a rate cut; undoubtedly, due to fears that the “Big One” would actually unfold last night.

Which fortunately for the “powers that be,” it didn’t; unquestionably, due to some of the most maniacal market manipulation ever – such as the successful “Cartel Herald” capping of gold at $1,290/oz for the second time in less than 24 hours; including the 657th2:15 AM” EST raid of the past 754 trading days. Which, I might add, Zero Hedge finally acknowledged, if only partially, after I have been discussing this blatantly obvious “sixth sigma” manipulation for more than a decade.


All that said, let’s go back to how I started this article – by mockingly referring to today’s Fed statement as it “most important ever.” Which, as it turns out, it may well be, according to Jim Rickards. To that end, recall that yesterday’s article, “is it the Cartel’s ‘zero-hour’,” referred to Rickards’ “emergency” conference call from Zurich last night, the principal motivation of which, as I anticipated, was the promotion of his “mining stock speculator” service. That said, the reason I listened was not to hear about said service, but to see what exactly he was referring to in his pre-teased espousal that a “zero-hour” event was imminent, that would catalyze gold’s surge to $10,000 an ounce.

And do you know what? Rickards actually came through – with one of the boldest predictions I have heard in 14 years in the Precious Metals sector! A sector, I cautiously add, that has been littered with newsletter writers and “analysts” famous for failed “timely” calls. Then again, Rickards is more famous – and connected – than all of them combined, so he is really putting himself out on a limb – much like the guest on Peter Venkman (Bill Murray’s) talk show at the beginning of Ghostbusters II, who predicted the “end of the world” by New Year’s Eve.

Levity notwithstanding, there’s nothing comedic about his unequivocal belief – as espoused vehemently last night – that today’s FOMC statement, and subsequent Janet Yellen press conference – will be a, if not the, catalyst to drive gold above $1,300/oz, an route to its ultimate target of $10,000.

In his view, the most likely outcome – which I, too, anticipate – will be a level of “uber-dovishness” that will, once and for all, end the Fed’s three-year long propaganda scheme to falsely purport economic “recovery,” and a pending “exit strategy.” Alternatively, it is possible they’ll continue to pretend – BrExit, and the aforementioned litany of “horrible headlines” notwithstanding – that their upcoming July 27th meeting, in the middle of the most Westerners’ summer vacations, just three months before a potentially historic Presidential election, remains “live” for a potential rate hike. To which, in his view (and mine), financial markets would tank further – August 2015/January 2016 style – prompting equally explosive gold buying, under the suddenly universal realization that the Fed is a “paper tiger,” a bumbling group of Keystone Kops, or both. In other words, Jim Rickards, last night, made would could well be the “call of a lifetime” – of which, I sure hope he’s right. Not about the horrific state the world is about to enter, of course, but the gold Cartel’s imminent demise.

I guess we’ll see soon – and in the meantime, you can listen to my “pre-FOMC analysis” on my weekly Kerry Lutz podcast this morning, and my special “post-FOMC analysis” with Daniel Ameduri of Future Money Trends, which I’ll be taping this afternoon, 90 minutes after the FOMC statement.

Andrew ("Andy") Hoffman, CFA joined Miles Franklin, one of America's oldest, largest bullion dealers, as Media Director in October 2011. For a decade, he was a US-based buy-side and sell-side analyst, most notably as an II-ranked oil service analyst at Salomon Smith Barney from 1999 through 2005. Since 2002, his focus has been entirely on precious metals, and since 2006 has written free missives regarding gold, silver and macroeconomics. Prior to joining the company he spent five years working as an investor relations officer or consultant to numerous junior mining companies.

The periodic symbol for gold is AU which come from the Latin for gold aurum.
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