first majestic silver

Desperation Tutorial

December 11, 2014

It’s Wednesday afternoon, an hour after the NYSE close.  I wasn’t planning on writing tomorrow – like last week, in lieu of an extended Audioblog.  However, given how close the “end game” appears to be, I felt compelled to keep you a step ahead of the evil “powers that be” – whose market manipulations have become so egregious, it’s difficult to believe anyone can’t see them.  Then again, if I’ve learned one thing in recent years, it’s that far fewer people than I imagined are “smart”; and far less smart and unbiased.  And by “biased,” I don’t necessarily mean everyone is part of the “the system”; but instead, that even many “smart” people simply tune out ugliness seeking the relative tranquility of denial.

That said, recall yesterday’s article – as I wrote– titled “the unstoppable tsunami of reality.”  In it, I dedicated more space to describing a single day’s manipulation than any time I can remember.  And this is on a day where gold and silver ended up $24/oz. and $0.61/oz., respectively – whilst the 10-year Treasury yield declined a modest four basis points and the “Dow Jones Propaganda Average” 51 points.  The reason I expended so much effort on “manipulation forensics” was the blatantly obvious desperation the PPT demonstrated in preventing further stock losses; whilst the Fed worked equally manically to avert a downside breach of the 2.2% yield on the 10-year Treasury bond they have been maniacally defending; and, of course, the Cartel’s utilized their usual, unrelenting determination to prevent precious metal prices from rising.  To that end, they utilized every imaginable weapon in their “manipulation arsenal” – and then some.  By day’s end, “panic” was yet again averted, if only due to some “fancy footwork” in the trading day’s waning hours.  I mean, with the Chinese and Greek stock markets crashing, just preventing a significant plunge in stocks and Treasury yields was a moral victory – and for that matter, capping gold’s rise at the usual 2.0%.

However, even yesterday’s manipulation farce doesn’t hold a candle to what we saw today – which clearly ended horribly but could have been far more so.  Then again, there’s always tomorrow, and the day after that – although ominously, there are just two trading days until Japan’s snap election and five before Wednesday’s FOMC meeting (and Greek snap elections).  If TPTB can’t “right the ship” of sentiment by then, the Fed may be forced to abandon whatever hawkish tones they hoped to purport, in lieu of outright panic.

As for today, let’s start with the Treasury market; as in my view, no market on Earth is more indicative of whether or not TPTB are losing control than the benchmark 10-year bond.  The entire world is watching it to see if indeed the U.S. is “recovering”; and with its yield in freefall, it’s difficult to believe anyone believes the FOMC will aver anything other than its dread fear of “deflation” – which subsequently, must be fought with “QE to Infinity.”

This morning, Greek sovereign bonds were again imploding, but global stock markets were relatively stable in the day’s early hours.  Oil was down from yesterday’s close around $63.50/bbl. to the high $62s, but no one was panicking.  That is until Saudi Arabia’s oil minister stated, loudly and clearly, not the slightest intention of cutting production, despite the post-OPEC price plunge from the mid-$70s.  This was nearly 11:00 AM EST, at which point the Dow was being held tightly at the same 100 point decline level as yesterday – i.e., “PPT down limit #2.”  As for Treasuries, recall what I wrote about yesterday’s trading action in TLT, an ETF that tracks the price of 20-year Treasury bonds.

The “footprints” of such ‘confidence protecting’ algorithms were so obvious, I pegged 123.73 on TLT (as the Fed’s “line in the sand”).  Take a guess what level that represented?  Yep; the 2.20% yield on the 10-year Treasury bond that the Fed has been ravenously defending all month. 

Per that commentary, take a look at today’s TLT trading this morning – and specifically, it’s high of the day through the day’s first five hours.  Coincidence, you ask?  Don’t make me laugh!

Even more comical was that fact that at 1:00 PM EST, the Treasury conducted an absolutely blowout 10-year Treasury auction, with massive demand and the lowest yield since – wait for it – June 2013, when the Fed’s “tapering” scam commenced.  As you can see below, the Fed actually had the gall to take TLT’s price down after the auction, although the aforementioned “tsunami of reality” shortly pushed it back up again.  Yet, a full three hours after the Saudi minister’s comments caused oil prices to plunge from $62.50/bbl. to as low as $60.50/bbl., the Fed was still defending 2.2%.  It wasn’t until the Dow finally broke below the PPT’s daily “ultimate limit down” level of minus 1% at around 2:30 PM EST, that the Fed lost control of TLT – which subsequently rocketed higher for the rest of the day.  Comically, the Fed tried to push TLT down in the trading day’s waning seconds, using the same strategy it has deployed against precious metals for years.  In other words, as the Fed clearly wants to push rates back up ahead of their meeting next Wednesday, they figured that “painting the tape would make their efforts easier tomorrow morning.  Unfortunately, the Dow still closed down 268 points (comically, at EXACTLY minus 1.5%), whilst the 10-year yield closed at 2.17%.

As for precious metals, what more can we say?  About manipulation, not much, I guess.  However, given they are clearly decoupling from other commodities – as we said they would – it’s truly been remarkable watching the Cartel try to cap their post-Swiss referendum surge.  Today was an absolute masterpiece of blatancy, with the Cartel incessantly utilizing DLITG or “Don’t Let it Turn Green” algorithms all day on gold, whilst preventing silver’s modest gains from turning “immodest.”  Just like the past two days, gold would rise with TLT – only to be “stopped cold” when TLT finally broke out; first with the usual 2:00 PM EST “crybaby attack”; and thereafter, with pure, unadulterated naked shorting.

In today’s case, the upward pressure on PMs was so strong – as oil, stocks and Treasury yields plunged – that the Cartel was forced to utilize their oldest most tried-and-true trick of all.  Which is of course, BRUTALLY SMASHING mining shares – to not only “signal” its naked shorting minions, but scare away anyone that might be thinking of profiting from “Paper PM Investments.”  And thus, the chart below of the HUI – which is why I sold my last mining share 3½ years ago, never to return.  Yes, at 2:00 PM, with gold up $1/oz., silver up $0.15/oz., the Dow down 200 points, the 10-year Treasury yield at 2.18% and oil at $61.25/bbl., the HUI was unchanged.  And yet, an hour later, with not a heck of a lot changed, the HUI was down six points or 3.5%, making it the worst performing sector on Earth.  For the record, for those that still believe mining shares are worth holding, here’s the year’s scorecard – in which yet again, mining shares are the best way to lose one’s shirt.  Heck, today alone, Anglogold – the world’s third largest gold miner – was down 6.8%, with gold essentially unchanged.

Of course, no “desperation tutorial” would be complete without showing the “sixth sigma Precious Metals manipulation proof” we wrote of four months ago – of how essentially every day now, gold and silver are attacked the second the NYSE closes at 4:00 PM EST (“16:00” below) – so the Cartel can demoralize PM investors and set the stage for the following day’s attacks.

Well, that’s enough for now.  I have to wake up Sylvie and finish my day, but it was very important to me that you saw just how terrified TPTB are becoming of the “unstoppable tsunami of reality” – which, if they can’t arrest by Wednesday’s FOMC meeting, may well shatter whatever is left of the delicate veneer of perception alteration that still remains.  Look for today’s Audio blog in which I will expand on these topics further – and PROTECT YOURSELF and do it NOW!


Courtesy of www.milesfranklin.

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.

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