Just the latest round of class-action lawsuits on gold price fixing are being filed against investment bank JPMorganChase because of the confession by a former futures trader for the bank who has pleaded guilty to manipulating the monetary metals markets.
This brings the “Hall of Shame” to no fewer that SIX major banks accused of or fined for rigging the metals markets in recent years. Are regulators turning a blind eye? Why?
Who’s calling the shots, why does this all matter (a lot) in the grander scheme of things, and what’s next?
In this episode of the Keiser Report, Max and Stacy discuss the latest twist to the US-China trade war: tit for tat kidnappings.
Donald Trump openly claims he will release the CEO of Huawei, currently being detained in Canada on an American arrest warrant, should China make concessions on tariffs.
But what is the escalation really about? One opinion piece in the NY Times suggests this is really about controlling the resource of our modern age: data and the internet on which it is collected.
In the second half, Max interviews Mish Shedlock of MishTalk.com about whether or not the Fed is a graver threat to the US than the Federal Reserve Bank, as Donald Trump insists.
They also discuss the Red Queen syndrome in Japan where the Bank of Japan needs to print more and more money and buy more and more assets just to stay in the same place.
The economic roller-coaster of booms and busts, that we're all forced to ride, is a creation of the Socialistic institution called The Federal Reserve.
By manipulating interest rates and by generating money out-of-thin-air, the Fed creates an artificial boom. Everything artificial must ultimately return to reality. The sooner the return, the better.
Financial and precious metals expert Egon von Greyerz says, “Because of the artificial control of the system, the cycles becomes ten times or a hundred times bigger than they would have been by natural forces. We have had a hundred years of excesses in the world and artificial wealth creation.
Now, in the coming years, we will have a very long period of the opposite. Wealth will disappear. A lot of people will suffer, and, sadly, there will be famine. There will be misery. The world has gone through this before, but this will be bigger than it ever has been.
The world will survive this, but there will be a lot of suffering when this implodes. The fear hasn’t started yet, but it will, and then there will be a rush into gold and silver. Our clients are increasing their positions.
In my view, 25% of total net worth is the minimum (to invest in gold and silver), and, personally, I would not have any major assets in the bank because I don’t think the banking system will survive. If it survives, it will not be in its present form.
Stocks, in relation to gold, will go down 90% to 95%. They went down 90% in 1929 to 1932. There will be the most massive wealth destruction ever.”
Every recession since the 1950s has been preceded by a yield curve inversion. The yield curve is flattening and recently became partially inverted.
Former business manager Gary Christenson joins Silver Doctors to discuss. The five-year rate fell below the two-year rate. We’re headed toward recession and stock market correction, Christenson says.
He says even just looking at the stock market itself technically, it looks quite weak. Christenson sees gold and silver, especially silver, extremely undervalued.
He forecasts silver rising substantially from here, while there may be some short term weakness.
With fears of more volatility in stock markets ahead, investors could do well holding gold, which is still the reliable safe haven asset, said Phil Streible, senior market strategist at RJO Futures.
“Even if you look at bonds and interest rates, the volatility has been quite high in there. We’ve seen bonds tick up three, four, five handles within a short period of time.
I think that gold has been a much better, a much more stable investment asset for a safe haven,” Streible told Kitco News.
Below is today’s note from Jeffrey Saut, Chief Investment Strategist at Raymond James: Yesterday, someone sent us this tweet from stock market guru Ralph Acampora that read, “Monday’s intraday activity and its closes on the leading market indexes were impressive: it’s called a ‘key reversal-day’ on a bar chart and a ‘hammer’ pattern on a candlestick chart. They suggest that an important near-term low was made.” Now, for non- technical folks, a hammer formation in the candlestick charts is defined as follows:
“A hammer is a type of bullish reversal candlestick pattern, made up of just one candle, found in price charts of financial assets. The candle looks like a hammer, as it has a long lower wick and a short body at the top of the candlestick with little or no upper wick (see chart below).”
Ralph Block & The McClellan Oscillator
Also suggestive that a bottom was made on Monday was what our deceased friend Ralph Block used to term a multi-swinging session. To wit, “Ralph was a huge fan of a crater opening, multi-swinging session that ends near the high of the day. Looks like it was just what he would have wanted!” We would add that the McClellan Oscillator is pretty oversold on a short-term basis (see chart below).
McClellan Oscillator Is Very Oversold Short-Term
Russell 2000 Likewise, the Russell 2000 is some 10% below its 200-day moving average and, therefore, oversold (see chart below).
Russell 2000 10% Below It’s 200-Day Moving Average
Energy Complex And, don’t look now, but the energy complex is very oversold (also has a hammer chart formation – see chart below) with the anecdotal evidence that a bottom is near with three large energy-centric hedge funds closing their doors.
Energy Complex Also Very Oversold
About A Dow Theory “Sell Signal”
As for the questions about a Dow Theory “sell signal” that are being trumpeted by some on the Street of Dreams, by our method of interpreting Dow Theory, there has been no “sell signal.”
The problem is these folks are using the November closing low for the Industrials, which is the wrong reaction closing low to use. While it is true the D-J Transports notched a new reaction low last Friday, the D-J Industrials have not violated their March 2018 closing low (the right closing low to use).
As such, what we have, according to Dow Theory by our method of interpretation, is a downside non-confirmation, which should be interpreted bullishly…
Over the past week, the gold and silver prices have held up rather well compared to the overall markets. While precious metals investors still fear that a huge sell-off in the gold and silver prices will take place during the next market crash, it seems that the metals continue to be very resilient during large market corrections.
Now, I am not saying that the metals prices cannot fall any lower, but a lot of the leverage in the gold and silver market has already been removed and is now at a near all-time low. So, even though we could see weaker precious metals prices, the overwhelming leverage and bubble asset prices are in the stock and real estate markets.
Furthermore, one of the reasons precious metals investors still fear that a major selloff is imminent is that they are using the 2007-2008 economic market meltdown as a guideline. However, when gold and silver prices were plummeting from their highs in 2008, along with the rest of the market, speculators held huge long positions while the commercials controlled an enormous number of short contracts.
If we look at the following Gold Hedgers Chart, we can clearly see that the market setup today is the exact opposite of what it was in 2008:
When gold was trading near $1,000 in early 2008, the commercial banks held a record high of 252,000 net short contracts compared to the present gold price of $1,222 (time of chart), with the commercials only holding 16,000 net short contracts. The commercial short positions are shown by the blue line. Thus, the higher the commercial short positions, the lower the line goes and the lower the number, the higher the line moves. Currently, the gold price and commercial net short positions are both at the near lows. Also, the speculator net long positions are close to their lows as well
So, when PUSH COMES TO SHOVE, we won’t see a large number of speculators forced to cover their long gold positions if the gold price falls lower because there isn’t that much leverage in the market.
Join Mike Maloney as he reveals an important factor of the partial Yield Curve inversion that is being ignored by mainstream news and media. Then stick around to the end of the video to see yet another indicator that is suggesting a huge change in markets could be upon us...
Bubbles burst from the “outside in,” Chris Martenson says. And that’s what we’re seeing right now.
Cracks are appearing on the outside. Many junk rated debt and periphery country’s stock markets are in bear markets.
Watch out for the crisis to seek into the bigger sectors. The economy cannot grow exponentially in a finite world. An infinite model cannot run on a finite sphere.
By 2020 - 2022, a major energy crisis will hit in oil, Martenson says.
How can we move out of the current infinite growth financial paradigm? Stay tuned to find out!
Professor of Economics and Law, William Black, who was a top regulator in the S&L crisis, says, “Deutsche Bank is one of the potential sources of the next recession, and you can see lots of people warning that there are signs that a serious recession is pretty likely relatively soon.
The whole system weakens itself because it gets caught in this big lie that says we have to pretend that Deutsche Bank is a bank instead of a criminal enterprise.”
In closing, Professor Black says, “I am going to give you the advice you get after the recession before the recession. Pay off your debt, all that you can.
Do not keep borrowing except in certain circumstances like you are going to buy a home and it is prudent purchase.
Buy a car when you can buy it with cash whenever possible and always try to be a net saver.”
