COT Silver Report - May 22, 2015
“If everyone is thinking alike, then somebody isn't thinking.”
―George S. Patton, Jr.
“The Deep Dark” is the definitive (and dramatic without being melodramatic) account of the May 2, 1972 Sunshine Mine Disaster here in the silver fields of northern Idaho. Ninety-one men died on the day shift after fire broke out deep underground, overcome by deadly gases. Eighty-six miners escaped that day, and another two were found alive beneath a fresh-air shaft a week later.
Despite weak economic data, new record highs continue to be set on Wall Street as the stock market bull is fueled by record stock buybacks now amounting to $337 Billion, 34% increase over last year. It has been years since there has been a true market correction and such resilience builds confidence into investors’ mindsets creating a surreal complacency.
Given how paper financial markets have been completely commandeered, I have in recent years spoken little, if at all, of “valuation”, “fundamentals”, and “technical analysis.” In my mind, all the financial community was taught for centuries has been rendered meaningless by government intervention – which is why it’s become futile to “invest” in stocks and bonds, particularly on the short side that governments attack as viciously as gold and silver longs. To wit, yesterday’s prototypical “dead ringer” algorithm on the “Dow Jones Propaganda Average“; whilst gold was attacked at the “key attack times” of 10 AM and 12 PM EST – and subsequently, “contained” with equally prototypical DLITG, or “don’t let it turn green” algorithms….
We know that war has been a nearly constant distraction since 9-11 and that a crisis is often used as a justification for economic insanity, such as borrowing more to address an excessive debt problem. It seems likely that weakening economies, deflationary forces, excessive debt, massive unemployment, riots, economic anxiety, consumer price inflation, and so much more, will require more distractions. We should “rig for stormy weather” and expect another crisis and more wars.
My point is that any reasonable big picture view of the political, financial, and economic trends show that virtually all of those changes will be very positive for gold—and aren’t that far off. It will be a new day for the gold market, one full of rising prices and profitable investment statements.
Many of the top precious metal analysts state that gold is the premium asset and insurance hedge during a financial collapse. We hear this time and time again. However, if we look at the data during the near collapse of the U.S. Banking and financial system in 2008, gold wasn’t the most sought after precious metal.
As an advocate for sound money, I am forever tormented by the egregious and overt growth of asset confiscation. The indirect tax from monetary inflation, bank bail outs and coming bail-ins, moral hazard, two tiers of justice accompanied by the gradual conditioning of the masses toward acceptance and true self denial.
Of all the moronic excuses I’ve heard in a 26-year Wall Street career – including seven as a sell-side equity analyst – this morning’s” management comments” from one the most hideous “hot IPOs” of today’s historic tech bubble, King.com, takes the cake. King, which produces free, mindless online games like “Candy Crush” blamed a variety of miscellaneous issues for the fact that its 15 minutes of fame are over – from foreign exchange losses (Really? Are they honestly trying to portray themselves as a multi-national firm?); to a lack of new product releases (quite the ugly admission from a company that went public last summer); to – get this – expected “seasonally softer” sales in the “mid-year period.”