At some point, the market will correct this in the market and what
will happen is there's going to be a notice of a default to a big boy
that is made public, and then it's game over.
I tend to look at the markets more from a fundamental standpoint and
in my opinion, the fundamentals are lined up fairly similar to the
way.
They were lined up in late, 2007, and into, you know, and in 2008 only
this time, I think the fundamentals are much stronger than they were
about the, you know, the same fundamentals.
Support a big move in the precious metals sector.
Much, much more powerful this time around now.
Yeah, absolutely.
The price of gold can go much lower from here but on a technical basis
by you know again just I say this over and over and the precious
metal, the gold and silver market is a bifurcated Market.
You have a paper, derivatives Market on one side and you have a actual
physical
Well, Market, or physical deliveries off of the exchanges and out of
the custodial Vault into the end-users occurs.
That's that's where the physical, that's where the real gold market
is.
And right now, the paper, derivatives Market, primarily, the comex is,
is what's driving the price, and it's what's driving, the price lower
and you can see, you can see that in the weekly commitment of Trader
reports, where the hedge funds have been
And they're now net short, paper silver there, in other words, their
gross short succeed, their gross Lawns.
And it's been that way for a couple months now and that the comex
market-making banks aren't that long paper, silver, and they've been
aggressively covered.
Now they, you know, they the banks have been aggressively covering
their grow short positions over the last several weeks.
Now, last week, it kind of reversed a little bit but
but I wouldn't be surprised if when the commitment of Traders report
comes out today that that it shows that the hedge funds were shorting
paper paper, silver, and gold again.
And the banks were using that shorting to cover their shorts.
So you know, and it might not show up until next Friday because the
cutoff date for the commitment of Traders report is Tuesday, even
though it's something that they could publish every day, the CM me
couldn't, it wouldn't be much more expensive than it is to publish it
weekly with a three.
Away.
But, you know, their intent is to try and keep the market as opaque as
possible.
If you look at the physical side of the market,
Ronan Manley's been doing fantastic work.
Detailing, how silver is just, I mean, it's flying out of the London.
V.
It's just there's just been an extraordinary decline in the level of
physical silver out of the London Vault, and a lot of that silver is
actually going to India.
India's India's in the import numbers from India show.
This India has been a rabbit importer of silver this year.
It's also going you know to mince retail or big buyers of physical
gold and silver right now, you know, minted bullion coins and small
sized bars and there's also been a
decline of the gold and silver Vault inventories on the comex.
Not not quite as dramatic as we're seeing on the lbma, but it's there.
I mean, the, the silver Vault, the silver Vault Warehouse stock is
down, and I haven't looked at the numbers in the last couple days, but
it's probably down about
14 or 15 million ounces from the middle of the summer from July and
the the kind of percentage basis the gold inventories down even more.
So, in my opinion at some point, this is what we're seeing here.
Is gresham's law in action, right?
Bad money, chases, good money out of the system.
So, essentially all this paper, fiat currency, that's been printed, is
your bad money and and smart.
Art actors.
Smart, economic actors are taking their Fiat paper currency and as
much of it as they can afford to and converting it into physical gold
and silver and taking it out of custodial safekeeping.
Because if you leave it in custodial vaults, technically you don't
really own it.
So that that's that's just one factor that I think is going to drive
the price of gold and silver at some point, at some point, the
physical Market will
Provide an upward thrust that prevents the paper Market manipulators
from from shorting a lot more gold and silver derivatives.
And it's not just on the comex.
It's on the lbma.
And then there's also OTC lightly regulated OTC.
Derivatives, which I mean, that, that's probably the most opaque part
of the paper, gold and silver markets.
Oh, and then, I don't know that I
To review the fundamentals on the economic and monetary fundamentals
on why the price of gold and silver are going to go higher.
But it's I think it's going to happen.
Very similar to the way it happened starting in late October 2008,
where all of a sudden
As the stock market was, with was heading south, and the credit Market
was imploding globally.
All of a sudden, gold and silver took off and, I mean, the AmEx gold
bug index doubled in the in the last two months of the year in
Made and the GDX ETF more than doubled in the last two months of the
year.
I do think we'll see something like that happen eventually.
Who knows what the timing is on.
That one other point about that because obviously the massive run
higher in the dollar has been getting a lot of attention and that's
part of what has been stimulating.
Hedge funds to short go.
Old and silver, Futures.
What they're doing is they're chasing the dollar higher in the Futures
market and their their offsetting that by shorting gold and silver,
right?
Because the dollar goes up, gold supposed to go down, right?
Well, it's not always true but at any rate, the same thing happened in
2008.
If you look at a chart of the u.s.
dollar back, then during the summer, the US dollar went straight up
right before everything, imploded that fall.
And you know again I think the dollar sending
The same type of signal right now as it was back then.
And again, I think it's going to be more extreme this time.
You know.
I haven't gone back to look at the charts.
But yeah, we've seen the same thing.
When there's periods of turmoil.
I mean, you know, at some point, there's, there's enough entities
globally that are demanding physical, gold, and silver for delivery.
And I mean, it's the vaults in London, in New York, that have to
supply it over and above what gets produced by gold and silver miners
every month, right?
Or every week.
So I mean I can't prove this but enough people have alluded to it but
Banks big banks that are the major, you know.
They're one of the biggest market makers in London and New York for
derivative gold and silver.
They have
With Barrack where they just you know they buy gold as its produced
from Barrack.
It gets drop ship to Switzerland refined and it goes into Asia, you
know, in kilo bar form which is what the Asians prefer as do the
Indians.
So when at the margin, when there's not enough gold and silver to
supply what's being produced on a weekly basis by the major goal
producers.
And that's when you start to see the Vault levels, go down,
and that's what we're seeing right now.
And I will say this part of the reason that the premiums especially
for silver eagles and silver minted.
Silver products is so high is because there's massive retail demand
for those products.
But the that's, the mints are constricted in the supply of silver
blanks that are sent to the mints so that they can produce enough to
meet the supply if they could produce enough.
I mean, to meet the demand they can produce enough day.
We basis to meet the demand, the premiums wouldn't be this high and
it's not the coin dealers fault.
This, I they're not, they're not gorging, the end-user it happens at
the wholesale level.
So
What I believe and again I, you know, I can't prove it but it's we've
seen the same pattern on it enough times over the last 20 years.
When when there is a growing shortage of physical gold and silver that
needs to be delivered by the Banks into the big boys, meaning, you
know, China India, Etc.
Turkeys been a big buyer of gold this year.
That those are deliveries that these Banks can't default on.
And so if they if they need extra Supply,
Of gold and silver that gets produced and refined.
They're going to cut off the supply to the mints.
And I think that's what we've been seeing since since probably early
this past summer.
Because that's when the premiums really started to shoot up.
Let's put it this way.
I bet if, if the mints were allocated as much silver as they need into
to produce as many minted products,
To meet the demand that they have, the, the premiums would shrink
quickly and the amount of Supply that would be distributed through the
men's would double overnight.
And your order book would go to the Moon because the price, the
overall price would fall and that would increase the demand for
silver.
I mean, at some point, you're going to have a delivery to fault, and
there may have already been delivery, default, but it, you know, it
doesn't mean it doesn't.
We had delivery defaults in March, 20, 20 and they paper,
Over it with the goofy, you know, new contract, that that shares that
shares the allocation of gold between the comex.
And the lbma is called the ace contract.
I don't know if you remember that, but there were, there were on the
precipice of a defaults that would have been devastating to the banks
that are short derivatives.
So, I mean, at some point, you know, again, I believe that over time,
not necessarily in
In the time frame that we would like it to have happen, but overtime.
At some point, the market will correct this in the market.
And what will happen is there's going to be a notice of a default to a
big boy that is made public, and then it's game over and then you're
going to see the price of gold and silver shoot up very quickly in a
very short period of time.
You're going to hear about tongues of your ear about Banks blowing up
on their derivatives shorts and it's going to be chaos.
Chaos for a while.
In the precious metals markets is, that's when you're going to have a
real bona, fide gold and silver Rush.