Good morning Ladies and Gentlemen:
Gold rose by 10.00 to 887.00. Silver rose by 35 cents to close at 16.83. The silver OI again remains comatose as the commercials are fleeing this arena as fast as they can.
Gold’s OI contracted again on Thursday, dropping a further 7000 contracts and it rests at 416000. From my vantage point, it looks like 2.5 million oz will be eventually delivered upon:
- 1.9 million oz standing.
2. .5 million oz of gold from the May options delivery
3. a possible .1 million oz from June options and queque jumpers..
The total OI will come very close to this figure. This will reduce the OI by a further 25000 contracts. So the net OI is around 416000-25000 or 391000 which is extremely low as these are all in strong hands. As
Friday was first day notice, cartel members saw the extremely low OI and figured that they had better cover some of their shorts positions and they did.
On the oil front, we saw that the Brent Oil contract traded at a premium to West Texas Intermediate. When you see this you know the manipulation game is on. The bankers decided on Wednesday and Thursday to whack all commodities because these markets were getting too hot to handle. When the inventory levels of oil were announced , they showed a huge withdrawal of inventory. Oil shot up to 133.00 and then the cartel trotted out the CFTC to announce an investigation into the oil market. Oil fell on this news. This is nothing short of blatant manipulation. For what purpose did the CFTC serve by announcing the investigation into the pricing of oil, the investigation which got its start in Dec 2007? Clearly it was to imply there is an upward bias in the pricing of oil. Their goal: to force the longs to liquidate their holdings. It worked and oil fell by 4.00 dollars. The banks were the recipients (purchasers) of all the longs liquidated. The regulators just turn a blind eye.
Not only that, but the fall in the price oil was the cover for the cartel to rape the gold and silver holders of long contracts.
As the price of silver fell, managers at bullion banks were perplexed as many investors arrived at their doorstep to buy the precious metal as rumours are now widespread of its scarcity. Many left empty handed. One Vice President of a major Canadian bank could not understand why his allocated silver was not in the banks vault. He was paying storage costs and to his dismay, the silver was not present.
What we are witnessing is absolute fraud and theft. Silver is being used by bankers who know very well that ownership does not belong to them. The
The COT was released after the market closed on Friday and revealed some interesting aspects in the gold market. The large specs continue to pile into gold in that they added to their longs by
4600 contracts and reduced their shorts by 4700 contracts. The commercials (the smaller banks) reduced their longs by 16400 contracts but also reduced their shorts by 13500. It was the big banks that covered some of their short positions.
Strangely, the small specs entered the fray and they reduced their longs by 228 contracts and went short by 3200 contracts.
The small specs always get it wrong so we can now assume the price of gold is on its way up. Also our good friend Dennis Gartman had his entire long position in gold annihilated since his stop losses were triggered at 891.00. With gold falling on Wednesday and Thursday, he lost his entire position. He also lost his position in copper. Since Gartman announces to the world what he has done, the cartel does everything in their power to go after him and they always fleece him. And this guy gets invited on CNBC all the time as the guru of the precious metals and commodities. Give me a break. This guy is a total moron!!
In other news, the purchasers management report (
Any reading below 50 is a major contraction.
The city of
The state of
House prices continue to fall and the state of
The Fed, seeing that defaults are rising faster than a speeding bullet announced on Thursday that they were going to increase the TAF auction facility at the Fed to 75 billion dollars X 3 times a month or for a sum of 225 billion dollars in June.
The Fed on Thursday also announced 16.4 billion dollars of a separate auction. They rejoiced on the low 16.4 billion figure as they were set to auction off 25 billion.
Many banks are afraid to show their hand that they went to the window as this would cause their stock to fall. During the week, we heard that Lehman Brothers totally lied to the regulators and filed false statements to regulators and to the media. A top analytical firm addressed the Empire club in NY and showed that Lehman has billions of undisclosed losses from subprime, Alt A and other level 3 assets.
The losses if revealed would wipe out its entire retained earnings as they are basically bankrupt. Meridith Whitney disclosed to Bloomberg that Citibank will not get out of its mess for at least 3 years. It has massive level 3 assets. Not to be undone, Citibank disclosed that AIG will need greater than 20 billion dollars to mend its balance sheet. And the granddaddy of them all, Goldman Sachs has over 70 billion dollars of level 3 assets which are on their books at par. And the regulators turn a blind eye.
What is most amazing, is that the chairman of the CFTC and the chairman of the SEC are on the Presidents Plunge Protection Team (Working Committee on the Economy). They see manipulation, corruption and fraud everywhere and sanction it. How they can sleep at night is a mystery.
In perhaps, the most revealing events of the day, it was announced that Moody’s Investors Services had created a new unit: Moody’s Analytics whose function it is to investigate the credit health of various Wall Street firms by analyzing credit default swaps. Credit Default Swaps are bets on the survival on the companies in question. The higher the price, the worse shape these guys are in. They rate independent of Moodys itself. The implied ratings from Moody’s Analytics differed from the official ratings of Moodys Investors and generally the swap traders got it right. Moodys Analytics are rating MBIA and Ambac as junk. Moodys Investors, the parent, rate them as Triple A.
I can just see ligitation lawyers on this one!! The Moody’s Analytic division works in a corner of Moody’s new world headquarters in
On Friday, the Vice Chairman David Kohn announced that he was hoping that Wall Street Security firms will get permanent bailout funds from the Fed. He also said that foreign firms can apply for funds.
The printing press continues to roll in a similar fashion as the
The news from
The sovereign nation of
We are now heading for a total global economic collapse unprecedented in modern history. I urge you all to go and line up at bullion bank headquarters and obtain physical silver and gold if available.
My son Stephen informs me that the Willie radio broadcast is now on my website. I urge you all to hear it. My site is: www.harveyorgan.blogspot.com
Have a great weekend.