From Ed Steer: GATA Correspondant
Another day...and another Comex hammering in gold and silver by the '2 or 3' U.S. bullion banks. I'm beyond pain here...and neither the blue pill or the red pill is working...either individually or collectively. Even the new tinfoil hat that the Mogambo Guru sent me isn't cheering me up.
But there is a silver lining to all this. First, the HUI put in a very impressive day despite the horrendous price drops in both metals. When I see this sort of counterintuitive action (either at the top...like in March, or at the bottom...like about now) in the shares, it's my opinion that this is not the 'smart money' investing...it's the insiders buying...the guys who really know what's going to happen next. Let's see if this turns out to be the case in the next few days.
Secondly, in a couple of e-mails from Ted Butler, he advised me that "sometime in the past week, the Swiss silver ETF added close to 600,000 oz. and the London silver ETF added close to 400,000 oz." In the second e-mail he had this to say..."GLD dropped another 17 tonnes yesterday (542,000 ounces). That's 27 tonnes in last two days, 37 tonnes in last 6 days. 90 tonnes from the top in latter part of July, or 2.9 million ounces ($2.5 billion) and 12.75% of total holdings. There was no liquidation in SLV yesterday, but some liquidation might be reported today especially after yesterday's 18.4 million share volume." I await that SLV number with great interest, because despite the almost 50% haircut silver has had since March, the SLV inventory just keeps climbing higher.
I see that the usual NY commentator had an interesting tidbit yesterday..."These premiums are completely unprecedented in the 11 years of so I have been tracking them. India’s imports of gold in September will be stunning."
In a Bloomberg story yesterday..."The cost of hedging against losses on US treasuries rose to a record on concern the U.S. government faces higher liabilities because of its rescue of mortgage companies Fannie Mae and Freddie Mac, credit default swaps show. The bailout of Freddie Mac and Fannie Mae is weakening the balance sheet of the U.S. and that is causing a deterioration of creditworthiness. The market is anticipating there might be more bailouts." More bailouts??? Really??? Count on it.
The first story today is a follow-up to a story that I brought to you attention in my Saturday morning commentary. It was about Donald Coxe's audio comments about "the biggest political intervention in the financial markets since Roosevelt in 1933." I note an error from Saturday...he's not with the Bank of Montreal...he's with Harris Investment Management in Chicago. This story was in the Toronto Globe and Mail's Report on Business yesterday and is entitled "The real reason commodities are tumbling". The link is here.
The second story is about a debate that occurred yesterday at the Hard Assets Investment Conference in Las Vegas between the non-believers represented by Tim Wood of Resource Investor...and the Grand Poo-bah of the Gold Anti-Trust Action Committee, Inc....Mr. Bill Murphy. The GATA release of the results of that debate is linked here.
As I put the finishing touches on this report, I see that the US$ is now sitting over the 80 cent mark. Maybe it's time to cash in our precious metals and buy the greenback? Not bloody likely! But having said that, despite the pain and the blood in the streets, these are the bottoms that should be bought. I think the HUI gave us a sign yesterday.
See you tomorrow.
Casey Research correspondent-at-large Ed Steer is a keen observer of the financial scene and a board member of GATA.org.
