There's a general sentiment out there among stock polls that.
We're going to have a massive summer rally in the stock market.
Everything's oversold, sentiment stinks.
I refute those arguments in my short sellers Journal newsletter.
If we do get a violent down leg in the stock market, it could take
everything with it, including the precious metals sector.
But, at some point, I think we'll see the precious metal sector rally.
I'm first let's clarify something here.
This is this is like something that irritates the crap out of me in in
that what we're referencing is paper silver the banks are net long
comex contracts which means that they're gross.
Long position is higher than their gross net position.
I mean gross short position.
So that on a net basis, there there are long, but they're long coma.
Contracts.
That doesn't mean there are long silver mean sure.
They've got supposedly they've got silver sitting in the comex vaults
and some of it is probably their silver if we really believe the Vault
reports which I don't.
I'm not saying they're 100% wrong but so at any rate.
Yeah.
Why this is kind of strange or unusual is that most of the time
The swap dealer category, which is basically the bank's their net
short or really net short, paper, silver and paper gold.
And the argument is they're fulfilling, you know, liquidity
requirements, you know, from the long from the long side and it's
mainly the manage money.
And now the other reportable is category to some extent.
Are the are the big counterparties to the banks.
But I mean technically the way a real Market should work is that so
when a hedge fund comes in and sets a buys, 100 comex, silver
contracts.
And the bank's, if they're not long those silver contracts, they just
print more, so we're contracts and fulfill the order.
Really, the way the market should work is that the banks should be
calling around to find sellers of those contracts.
That's, that's how I mean, occasionally, like, when I traded junk
bonds, occasionally, you know, we would short bonds liquid bonds to
provide liquidity to the market or, you know, we put on large,
Dietary short positions in bonds that we thought were going to tank
over time as you know, the issuer became less creditworthy.
But for the most part, the way the market works is you got an
Institutional buyer tells the salesmen I'm looking for X amount of
bonds.
The salesman tells the trader and then the trader goes out and tries
to Source those bonds and comes back with where, where the trader can
offer those bonds to the institutional buyer, right?
So there's not, it's not like we could print up more bonds, Bond,
certificates, and sell just short of men to this into the cellar, but
that's not how it works on the comex instead of finding, you know,
instead of like a, the way a legitimate legitimate Market Works,
instead of finding a seller of those of those hundred
Racks, they just print up more contracts and fill the order.
And that's that's a big part of the problem with the paper market and
why it distorts the overall gold and silver market.
I mean, historically there's you can point two points in time.
When the bank's went from being net, short silver to being net long
silver, that happened in 2015.
And it's sometimes correlates or often correlates with an impending
move higher in the
Entire sector, silver actually, when gold started coming down in price
over lag, quite a bit, I mean, from when it hit its peak in at the end
of August, 20 20, we had that big run up after you know, the lockdown
was over and everything, ran up higher, but the stock market in
general.
So silver didn't really start coming down in price until May 20, 21
and gold had already started.
Its uptrend.
It was already too much.
Us into its uptrend.
So Silver's Silver's has been in a downtrend, but it's also been
holding a kind of a support area here since mid-may around.
Well, this is on SLV, the 19 level.
So I guess I guess that would roughly be the twenty twenty dollar 50,
Cent level in paper silver terms.
There's a there's a, there's a general sentiment out there.
Among stock polls that we're going to have a massive summer rally in
the stock market.
Everything's oversold sentiment stinks.
You know, and I refute those arguments in my short sellers Journal
newsletter.
But if we do get a violent down leg in the stock market, could take
everything with it, including the precious metals sector.
But, at some point, I think we'll see the precious metal sector rally.
Meanwhile rest of the stock market goes goes lower and we saw that
happen at the end of October early November 2008 the precious metals
had a vicious sell-off that summer and then started moving higher at
the end of October early November, while the rest of the stock Mall,
the SP went further lower the rest of the stock market didn't bottom
until late March 2009.
So and the Huey index, the MX go bug index,
Between early November 2008 and the end of 2008.
So I think that's the type of thing that we could see.
I don't want to like offer timing on when I think that's going to
happen.
You know, I do think
It may, it may happen in correlation with midterm elections, but I do
think at some point, the federal reserve's going to have to Blink on
its on its game at its interest rate game of chicken here with the
market because the economy as I'm sure you're aware, is it continues
to get worse quickly, especially the super cyclical sectors, like
housing and Automobiles, you know, the auto sector.
So,
If the Fed were to do that, that's what would trigger just, you know,
a moonshot in the precious metals sector but generically, I think
going forward absent, a real violent down leg in the in this General
stock market.
I think we're gonna start moving higher in the sector.
First of all, when people say the dollar is going up.
They're you they're referencing the dollar Index.
And the dollar Index has is measured.
That just so the dollar, well, the dollar Index is comprised of the
Yen, the Euro British pound Swiss franc and the Swedish krona.
So so it's being measured against those five currencies and we know
Japan has been printing the crap out of their money supply and buying
and buying government bonds like they're going out of style.
So you know the end has plunged quite a bit versus versus the dollar
over the last several months and the Euro has also declined
considerably versus the dollar over the last several months because
the arrows probably I mean the EU
Was in just as bad if not worse, fiscal condition than the United
States.
And I haven't really looked.
I mean, the the the pound in the Swiss city and the Crone are kind of
minor components of the dollar Index.
It's the most heavy weightings are for the Euro and the Yen.
So that's really what the dollar is going up.
Its going up versus the Yen and the Euro or the n in the ER or
declining which makes it look like the dollars going higher.
I mean, if you measure the dollar against the
In Ruble, the dogs been hammered, right?
So, I mean, it's some point.
I think, I think we're going to start to see a pretty major sell-off
in the dollar and it may be, you know, if and when the FED Moon walks
away from being a hawk, but we'll see.