Sunday, September 25, 2011

But but but...if it was liquidation why....

is the OI not falling off a cliff like on April 29th?

From Harvey today: "The total gold comex open interest fell by a tiny 8161 contracts despite the huge raid on Thursday. The new open interest rests at Friday night at 489,588 from Thursday's level of 497,749. The front options exercised month of September saw its OI fall from 123 to 73 for a loss of 50 contracts. We had 40 deliveries on Thursday so we finally had some minor cash settlements. The next front delivery month in gold is October and strangely the OI did not fall much, settling at 29,569 from Thursday's level of 30,297. It sure looks like some of the players here are anxious to obtain some physical metal.
The next big delivery month is December and this month took the brunt of the attack on Thursday. The OI fell from 317,182 to 307,786 for a loss of close to 10,000 contracts. The estimated volume on Friday was a monstrous 320,725 which followed Thursday's confirmed volume of 298,057. The banking heroes supplied most of the non backed paper hoping to see many gold leaves fall from the tree.

The total silver comex OI fell by only 768 contracts as these holders seem to be in strong hands. The new OI is a multi year low. Strange that bullion dealers and mints are running out of metal and OI which is a measure of demand is at these extreme lows. The silver comex has been nothing but a physical market for those that wish metal. The leverage is totally gone and after Monday night it will surely be gone from the silver market. The new OI rests this weekend at 110,785 falling from Thursday's level of 111,553. The front delivery month of September saw its OI fall from 228 to 213 for a loss of 15 contracts. We had 19 deliveries on Thursday so we lost zero contracts to cash settlements.
The front December month saw its OI fall slightly from 73,153 to 72,255. This is a minor fall in OI considering the massive wallop the price of silver endured on Thursday. The estimated volume at the silver comex was a monster, coming in at 104,984 with our banking cartel providing the short paper. The confirmed volume on Thursday was also high at 87,399."

Contrast that commentary from these figures:

1. April 29th: "The total open interest on the silver comex fell steeply by 6,132 contracts from 135,763 to 129,712. There is no doubt that the leverage for the longs suffered a bit but so did those shorts that have to pay margin requirements."

2. May 6th: "The total silver comex open interest shocked everyone with the announcement that the OI rose by 4279 contracts from 130,525 to 134,804."

So here's your clue: When the OI surges, we can say that we have found a short term bottom, and that would be a good entry point.

If anyone is willing to take the task and go through Harvey's archive and correlate both the front month and out months OI's to the price of silver, please throw on a excel spreadsheet and email me asap that would be fantastic.

Also, to any of my Asian listeners over there in Asia land. If you have any pictures of line ups at bullion shops email me at please thanks.

May was a speculating liquidation. This week was NOT-it was a green lights go ahead behind the closed doors of Gold diversion to kill silver. I've never seen anything more obvious.

This Weeks COT is useless as it doesn't show us the latter half of the week. I would be shocked not to see a major + figure in the silver and gold commercial new shorts added. I guess we have to wait another week and find out how bad the manipulation really is. If there isnt a huge surge in commercial shorts added, I will no longer be reporting on the COT report, as this may now be a tool of the EE.


  1. 5 Hrs til opening. Anyone taking bets on "higher" or "lower" prices during the next 48 hours? I'll go a head and bet a Maple that we go lower.

  2. who cares. My retirement, safty, and 'bet' is in the form of a precious metals. Let it go to zero. I'll sell everything I own and buy every last ounce of it.

  3. i'll put down 1.25 in junk silver that we're gonna go lower on monday, and see a short bounce of some sort on tuesday/wednesday...

    can't wait to wait in line for 2 hours to buy several fucking ounces of AG. yay!

  4. I wouldn't be surprised if the COT was a fictitious as every other stat provided by the gov. I think "anyone" even the analyist that are falling for that bullshit, hedge fund liquidation really need there heads examined. I mean where is if from Thursday or Friday, that shows 25% of contracts were pitched to equal the reduction in POS. The JPM/Comex/CME have shown a repeated pattern:

    Short on Comex expiry
    Shorting on low volume, on the Globex
    Raise margins when OI or those standing for deliver is too high
    Lower G&S prior to news that would increase price
    And JPM had to reset their derivatives bomb!

    I think some news will come out this week that, QE3 will start or Global QE, something that will send the PM's skyward, and TPTB had to punish G&S, because if nothing is done QE wise, the banks are toast!

  5. I care. I dont have $100k just lying around to spend on monster boxes. I hope it goes to zero as well. I want me a few monsters. I was just tryin to get a feel for the crowd after the past few days. Besides, why would anyone want silver to go higher? It only means we are that much closer to collapse.

  6. Well I bought the fucking dip anyway this weekend and if the price gets hammered down this week...well so the fuck what. My next batch of powder comes in about a week from now....and I´ll be buying again no matter what the paper price is.

    I´m doing my part every month to help sink the JP Morgue, and one day I´ll be cracking open my bottle of Bombay Sapphire in celebration.

  7. I love Blythe today because I'm gonna place another order for some 10 ounce silver bars. Thanks for the discount! The more blatant the manipulation, the more phyzz for the fiat!!!

  8. You have a bottle of Bombay that you're saving for a celebration?

    What do you drink when the day's been rough on you? Shit, that bottle of Bombay would've been gone!

  9. I am with you guys, I scored many monsters
    this week some before Blythe-fuckshop sale
    some after. I will continue


  10. @Paid

    I live in Bavaria. The beer is really fuckin´good over here. Like Richard Marcinko, I enjoy the Bombay after a successful mission. The mission isn´t over yet.

  11. The OI only fell a little on Thurs, maybe that was why they raided silver even harder on Friday, to shake off more OI. Maybe the delivery issue is really getting out of hand that they are desperate to shake all LONGs out in whatever ways. They certainly brought out all their guns. If it goes lower next week, I am going to buy more coins from Apmex, I just realized they shop to Canada. Boy I have lots to learn..

  12. curious: try they may be cheaper on product and shipping to canada and use my discount code of sgb-sgs for a small pathetic savings. lol.

  13. Wall Street Riots - Great video folks!


    I listen to interviews and read articles that predict where this or that commodity or stock will be heading for kicks and giggles. Clive Maund has been getting some exposure due to his call of a big correction in silver on Sep 18th.

    As I stated before, I no longer listen or read these people for advice. They still adhere to Technical Analysis (TA) like there is a free market. I would like to whisper in Clive's ear and say, "THEY PAINT THE CHARTS YOU NITWIT".

    Things are so out of control, I am surprised investors believe this stuff. This is a tactic called "CONTROLLING THE INFORMATION...or SUPPLYING MISINFORMATION" that molds the minds of those who are unable to do critical thinking. They fall victim to this BALONEY.

    In a prior post I showed just how many new COMMERCIAL SHORTS were added on the US DOLLAR last week. It was 17,000. But that was chump change compared to other futures on the COT.

    S&P 500 Stock Index (Chicago merc exchange)

    COMMERCIAL SHORTS = -159,451
    COMMERCIAL LONGS = -204,728
    OPEN INTEREST = declined 239,508 or 47% drop

    E-Mini S&P 500 Stock Index (Chic merc exc)

    COMMERCIAL SHORTS = -988,952
    COMMERCIAL LONGS = -909,458
    OPEN INTEREST = declined 1,168,985 or 29% drop


    COMMERCIAL LONGS = -30,093
    OPEN INTEREST = declined 46,770 or 37% drop


    COMMERCIAL LONGS = -22,338
    OPEN INTEREST = declined 43,065 or 36% drop

    There were plenty of other examples that I am not going to list. As a frame of reference the Mexican Peso only changed 7,900 contracts on its open interest the prior week.

    The E-Mini S&P only changed 326,000 contracts on its open interest the prior week and that was an ADDITION. This week it declined a staggering 1,168,985 contracts or a 29% decline in one fricken week...and this was before the big selloff at the end of the week.

    This is VOLATILITY at its finest. I didn't include the SWISS FRANC which dropped more than 55% in one week as we know the reason. The Commercials in the Swiss Franc just about cleared at the majority of their long and short positions.

    This is not the sign of a healthy global financial system. These kind of moves in open interest and commercial positions proves the market is tearing apart from the inside out.


    Stop reading the CLIVE MAUNDS, the HARRY S DENT JRS, the MARTIN ARMSTRONGS & the ELLIOT WAVE PRECHTERS...they are a complete waste of time as well as harmful to ones critical thinking.

    This is not 1930's anymore my friends. In the 1930's, the USA was tapping into some of its best oil fields ever discovered. We were able to pull ourselves out of the depression because we had all these wonderful resources to do it.

    That is no longer the case which makes the DEFLATION ARGUMENT A MOST INSANE ONE. Everytime I hear the word DEFLATION spoken, I want to grab one of my 10 pound spit wads and throw it at TV Screen showing some stoopid CNBC talking head.

    WAKE UP....

  15. For those of us still learning, here is a good discussion of OI: Thanks sgs and srs...certainly not healthy, my question is that if in fact the dollar continues to rise, does this imply deflation? Certainly there is deflation of assets this week...would appreciate help with the macro here.

  16. SISTER....OH SISTER...


    WAKE UP PEOPLE...fer pete fricken sakes.


    I am gonna start throwing 10 pound spit wads.

  18. I don't think anyone with a reasoning mind would argue deflation long term. I think maybe what sister means is in the short term before QE3 is announced?

  19. Thanks for coming to my aid, capitald, that is exactly what I meant. Of course I read your comments srs, just trying to clarify in my poor little blonde head! I was NOT arguing with you. I just thought dollar up, assets down meant deflation. This includes commods this week--food and oil.

  20. I noticed on Friday that Kitco no longer can ship most silver products to Canada, and had no more monster boxes anywhere.

    I wanted monster boxes but could not find any in quantity anywhere. Most people are too busy to line up for hours like the fuckin russians used to do for a roll of toilet paper. So I bought about $100k of PSLV as spot hit $30 and premium fell below 20%. I think PSLV might be overpriced but it is very convenient. Also Sprott lets you convert PSLV units to physical silver, which is unique I think.

  21. Folks in canada need to realize that while gold has fallen 13% since august, the loonie has fallen 11%. So you are almost flat even if you bought near the highs.
    If you are in euroland, you are possibly ahead for gold in euro terms.

  22. silver & capitald.....I didn't mean to be so damn cantankerous. Did you see Ron Paul at the last Republican Debate? He is starting to get a bit short and impatient with the questions and system.

    This has inpired me to write a guest post to try and get across what I mean....and that is this...there is no such thing as DEFLATION. That word has been ingrained in the minds of investors and the public to mean "FALLING PRICES". Their technique is similar to what PAVLOV did to train his dogs.

  23. SRS,

    You're a smart guy. When discussing the fiat side of inflation don't fall for the trap of quoting US only money supplied. I think people sem to think that just because their local banking systems currency is elevating because everyone elses is falling faster that assets are affected. IF that were the case, the whole world has deflated since 2008 because the AUD went up :) (From my POV).

    I think FOFOA has a good concept on fiat. He looks at is as a tradable good. When you look at it as a pure trading device, you can see how hyperinflation works. You stop thinking about X in dollars, but in the stock and flow dollars as an tradable object class (and by trade I mean trade for something else, not in the artificial long\short sense).

    Remember during the depression, bank notes were backed by gold. They -were- gold in the public eye as they were redemption notes for removing gold from a bank. So, can you see why dollars were hoarded? They represented gold in a secure location with no storage costs.

    Do you still think the dollar is rising because it represents gold? We're not in a situation like post WW1 where the US held most of Europes gold due to payment of war debts. We're in a situation where the US's gold is considered suspect and the window is closed. The dollar vs real goods is infinity and zero, as the dollar is no longer even representing a physical object. How can objects of value fall in value against computer bytes?

  24. I see what you are trying to say SRS - that deflation is about the supply of money only, and has nothing to do with the price of anything.
    Mike Maloney has shown with graphics that when the expansion of the money supply slows to a rate that dips below the rate that currency is extinguished through the payment of interest that in fact we see DEFLATION. This is likely the case in the absence of QE3.

  25. Thanks to you both and I will look forward to the guest post srs. Also thinking inflation/deflation have something to do with the velocity of money. Personally, I think we currently have deflation, but that could change in an instant.

  26. SRS, you should also consider the all-important consideration of liquidity in your analysis. As any corporate treasurer or other money manager would confirm.

  27. @sister Yes absolutely money velocity is part of the inflation/deflation equation.

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  29. SRS - surely there is plenty of deflation left in the US financial system, question if/when the fed will begin printing again.