*The large specs increased their longs by 16,885 contracts and increased shorts by 8,603.
*The commercials decreased longs by 3,345 contracts and increased shorts by 3,285. *NEVER seen this before. The small specs increased longs by an astonishing 14,710 contracts. Yet, in perhaps one of the more BULLISH stats I can ever recall, they increased shorts by a humongous 16,362. That is truly MINDBOGGLING. No wonder bullish sentiment is so mute.
end.
Please note the huge increase on the comex by the large specs (our bet the large specs are the Chinese). However the large commercials only increased their shorts by 3200 contracts
as the smaller commercials bailed. These lesser commercials have been covering their silver shorts for the past month and we are now witnessing the gold comex commercials
doing the same. However, they are leaving the bulk of the supplying of the paper to JPMorgan and HSBC. All others are seeking refuge!
Here are yesterdays trading numbers. Please note the huge increase in yield on the 10 yr treasury bond:
The yield on the 10 yr T note took off to 3.39%, still very low.
The dollar rose .57 to .7647. The dollar was strong across the board. The euro lost .0063 to 1.4710. The pound fell .0215 to 1.5831. The yen lost 1.06 to 89.81.
Crude oil advanced 8 cents to $71.77 per barrel.
The CRB lost 1.42 to 262.49.
The Muppets on CNBC seemed surprised the DOW put in a healthy, positive day while the dollar rose. Clearly they failed to take the market intervention into consideration. The DOW ended the day up 78 to 9864. The DOG rose 10 to 2134.
The volume on the gold comex was around 240000 at 10:40 when they stopped reporting their estimated numbers. I have now no confidence in the comex reported numbers.
OK lets go to economic news of the day:
First off we have the trade figures and it showed a decrease in the deficit. However the oil price used in the report was low and imports were down which means the consumer was not
spending as I have indicated to you on many previous commentaries. Here is the report:
U.S. economic news:
08:30 Aug Trade Balance reported ($30.7B) vs. consensus ($33.0B)
Jul revised slightly to ($31.9B) from ($32.0B).
* * * * *
US trade gaps narrows unexpectedly in August
WASHINGTON, Oct 9 (Reuters) - The U.S. trade gap narrowed unexpectedly in August as services trade pushed exports slightly higher and imports fell by a fractionally larger amount, a U.S. Commerce Department report showed on Friday.
The monthly deficit was $30.7 billion, down 3.6 percent from a revised estimate of $31.9 billion for July. That reflected a 0.2 percent increase in exports to the highest since December and a 0.6 percent decline for imports.
Analysts surveyed before the report had expected imports to get more of a boost from a combination of higher oil prices and U.S. businesses rebuilding their inventories, and increase the August trade gap to around $33 billion.
-END-
President Obama received news that he won the Nobel Peace Prize. He did not like the following news story where there is trouble at the Federal Housing Administration:
U.S. Mortgage Backer May Need Bailout, Experts SayBy DAVID STREITFELD and LOUISE STORY
A year after Fannie Mae and Freddie Mac teetered, industry executives and Washington policy makers are worrying that another government mortgage giant could be the next housing domino. Problems at the Federal Housing Administration, which guarantees mortgages with low down payments, are becoming so acute that some experts warn the agency might need a federal bailout. Running questions about the F.H.A.’s future — underscored by interviews with policy makers, analysts and home buyers — came to the fore on Thursday on Capitol Hill. In testimony before a House subcommittee, the F.H.A. commissioner, David H. Stevens, assured lawmakers that his agency would not need a bailout and that it was managing its risks. But he acknowledged that some 20 percent of F.H.A. loans insured last year — and as many as 24 percent of those from 2007 — faced serious problems including foreclosure, offering a preview of a forthcoming audit of the agency’s finances…
end.
The Chinese are taking over from Mumbai in physical purchases of gold. Here is a story by Chris Powell on a Reuters article written by David Stanway and Alfred Cang:
China is a large part of the gold demand scene (and The Gold Cartel’s worst nightmare). This story is well worth the full read…
China's gold investors undeterred by high prices
Submitted by cpowell on 09:10PM ET Thursday, October 8, 2009. Section: Daily Dispatches
By David Stanway and Alfred Cang
Reuters
Wednesday, October 7, 2009
http://www.reuters.com/article/reutersEdge/idUSTRE5960LI20091007
Gold might be a luxury most can live without when times are hard, but for cautious investors in China, the world's top producer and consumer of bullion, it has become a matter of necessity.
Jewelry sales might take a hit in China after prices hit a record high of $1,043.45 an ounce on Tuesday, but amid ongoing economic uncertainty, many in the financial community still prefer bullion to bonds, analysts said in comments made before the record was struck.
The government itself -- also looking for a safe haven for its foreign currency reserves -- is also likely to increase its gold holdings, which now officially stand at 1,054 metric tons.
"Consumption in China is expected to rise, as it is supported by expectations of inflation, and I also believe the government will increase its reserves," Yao Haiqiao, president of Longgold Asset Management, said.
Only around 1.6 percent of China's forex reserves is held in gold, and that figure is expected to rise, Sun Zhaoxue, chairman of the China Gold Association, said earlier this year.
World gold prices have broken the $1,020 per ounce barrier for the first time since March 2008 as investors seek a safe haven from uncertainty about the world economy and the dollar. While some have warned the price might not be sustainable, Chinese buyers are still expected to remain active.
"Consumers are sensitive about the prices, so rising gold prices will definitely hit purchases in India and China. We have seen a rapid drop in India's jewelry consumption in the first half so a similar story could be happening in China," said Zoe Wang, analyst with Shanghai CIFCO Futures.
"But in terms of investment, purchases are rising, as more people are using gold as a hedging tool. Such purchases will obviously increase in China."
China is already the world's biggest gold producer, and in the first half of this year, consumption of the precious metal also became the highest in the world, overtaking India.
Albert Cheng, Far East managing director at the World Gold Council, said Chinese gold purchases for investment reached a record high of 70 metric tons in 2008.
With jewelry sales expected to fall -- even in the biggest market of China, the only one to show any growth in 2008 -- it is investment purchases that continue to drive up prices.
"The Chinese buy more gold bars in banks while Indians buy more jewelry," said said Longgold's Yao.
While investors abroad warn $1,000 per ounce might not be sustainable, many in China are more confident.
"Just because the price is high they will not suddenly start selling," said China Gold Association vice-chairman Hou Huimin. "There haven't been any big changes in behavior in China."
With demand still considerably higher than supply, there is room for more price increases, said Ellison Chu with Standard Bank in Hong Kong.
"We will see how this price level will affect the market but I think it can go higher. If the market gets used to this price level, I think it has the potential to move higher."
Longgold's Yao said China's gold investors had already climbed on the bandwagon and, in the absence of attractive alternatives, were reluctant to jump off.
"The herd mentality plays a big role in the Chinese investment market," said Longgold's Yao. "I don't worry about rising gold prices hurting people because Chinese people pursue products whose prices are rising."
Further price support was likely to come from the Chinese government, which is expected to increase its gold reserves in the near future, Yao added.
Chinese investors have fought hard for the right to trade in new financial instruments and they are not likely to panic-sell their gold as a result of the price surge, Chu said.
"If you look at the stock market in the last few months, there has been volatility and rumors, and people are looking for something more stable. They can expect continuous growth in gold. I think it is a good way for them to invest."
Currency devaluations, dramatic cuts in interest rates and the threat of inflation have made gold one of the few attractions left in China, where investors have fewer options.
"I think as long as investment tools in China are fewer than in the western world, people will want to hold on to something."
* * *
end.
Many are seeing the demise of the usa dollar. The fiat money system is faltering. Here are 6 major points to consider if you are thinking of buying
usa dollars or investing in companies denominated in usa dollars:
The huge pillars that support the fiat money system and banking cabal are being removed as we speak...and have been removed!
Some of those can be seen and some not. Here are a few:
1) China stated they will default on derivatives. That alone will end the fraudulent derivative game the cabal uses to control gold, silver and interest rates.
2) The leak that Russia, China and Saudi Arabia are going to remove the dollar from pricing oil is the truth. That would add 2T+ US dollars to the US M2 money supply that won't be needed any longer for oil transactions.
3) The beginning of trade wars between the US and China has begun and will grow. This will continue to escalate ultimately ending Globalization when China stops selling goods to the US and Nationalizes all manufacturing owned by the Corporations who rely on cheap labor.
4) China and India have begun to promote SILVER as an investment to their citizens! That alone can end the cabal.
5) The FDIC is out of money and the banks are losing billions on residential/commercial loans and defaults. That realization will soon cause bank runs in the US and around the world.
6) The FED audit bill has enough votes to pass even though Bernanke has told congress that an audit would destroy the US Dollar. Barney Frank has stated that it will be voted on in Congress.
end.
I want to spend the last part on my commentary on the Kirby report just released. Here is the report for you in its entirety and I will add my 2 cents worth. Here is his commentary:
Central Banking: A Blight On Humanity
Rob Kirby
Impeccably reliable sources have informed me that as recently as Sept. 30, 2009 – the last possible day of trade in the Sept. 09 gold futures – a number of well-heeled market participants “bought” substantial tonnage worth of gold futures on the London Bullion Market [LBMA] and immediately told their counterparties they wanted to take instantaneous delivery of the underlying physical bullion.
The unexpected immediate demand for substantial tonnage of gold bullion created utter panic in at least two banks who were counterparties to this trade – J.P. Morgan Chase and Deutsche Bank – because they simply did not posses the gold bullion which they had sold short [an illegal act which in trading parlance is referred to as a “naked short”].
Because these banks did not have the bullion to honor their contracted commitments, one or both of them approached the counterparties and asked if there was any way they could settle this embarrassing matter quietly on a “cash basis” to absolve the banks from fulfilling their physical bullion delivery obligations. The purchasers were not interested in a ‘cash settlement’ and demanded delivery of physical bullion giving these banks 5 business days to resolve the situation. A premium of as much as spot plus 25 % [that would be 1,250 – 1,300 per ounce of gold] was offered to settle this matter in fiat money instead of the embarrassment of a very public “failure to deliver” on the part of the London Bullion Market Association.
Earlier this week, no less than two Central Banks became involved in effecting the physical settlement of this situation. One of these Central Banks was British [that would be the Bank of England] – and reportedly, even they were only capable of providing less than pure, non-compliant gold bars that did not meet good delivery standards stipulated by the LBMA. Like it or not, this is a testament to lack of physical gold available, folks.
To summarize: Banks like J.P. Morgan Chase and Deutsche Bk. - who sold endless amounts of gold futures at prices of 950 – 1025 and then tried to make “side deals” with the folks they sold the futures to – offering them spot + 25 % [let’s say 1,275 per ounce] to settle in fiat – only after their counter parties demanded substantial tonnage of physical gold bullion.
Stunningly, if accurate [and there is absolutely no doubt in my mind that this is not accurate], this means that gold is already in SEVERE backwardation and this fact is being hidden from the public.
Then, to protect the “integrity” of the futures market as a ‘price discovery mechanism’ – Central Banks – aiding and abetting - plunder the sovereign assets of their respective countries to bail out their agents / friends in an attempt to ‘sweep the whole bloody mess under the carpet’.
To think that anyone wonders why our financial system and fiat money will soon to beTOAST?
What a disgraceful insult to humanity.
