Bullion Banks flow metal around at this falsely fraudulently determine
price and they if as long as they can flow, some metal in at that
price, they discover through the trading of their unallocated contract
for now, confidence is maintained in the system and that's why it
perpetuates, but I just the end of the day.
I feel pretty comfortable that your risk reward skew ratio is 2.
Skewed toward reward at 20 year, 21 dollars an ounce.
That's for sure.
Well in general, when open interest is rising as prices falling,
that's a pretty good sign that the hedge funds are getting short.
Any of you.
Look at that from the bigger picture.
As long as I've done this and track this the bank's win and the hedge
funds Lou.
Okay, so as prices going up, oftentimes hedge funds are looking for
long exposure, in the bank's gleefully, sell it to them.
And then when momentum eventually Wayne's, you know, and there's I
mean, how many hedge funds are there in the world that buy silver
Futures?
There's not that many.
Okay.
So eventually, they're all long and positioned and all of a sudden
momentum runs out and the price tips over and then Banks, help give it
a shove.
And then they'll, same speculators and hedge funds that were buying
Buying silver, Futures all of a sudden start selling.
Start getting stopped out, you know technical factors start working
against them and the bank start covering and buying back all those
shorts.
And it's just this cycle, you know, the Andy McGuire used to, you
know, like a shampoo bottle, you know, the wash and then you rinse and
then you repeat, and then you wash and rinse and repeat, go back to
that, back to your question.
If open interest in is rising, while priced is falling.
It generally means that the
Large speculators and silver.
The hedge funds are getting short.
And in fact, you can actually see that in last week, Scott report, the
large Speculator category in silver, which is mainly hedge funds added
12050 one new gross shorts.
So they went from 28 thousand to forty thousand.
So what's that?
That's almost a 50% increase.
Okay.
So that's a pretty clear sign of, you know, bearish sentiment on the
Speculator side and that, of course,
the banks are just taking the other side.
They're taking along side the opposite trade, when the speculators
getting short.
And so it's just kind of an Evan flow until the system finally changes
with the speculators get overly long, you know, prices going to start
getting a little heavy that happened about six weeks ago, by my
measurements.
And now we're back to the point where the speculators are not quite
flat yet, but pretty close.
The, what are on the cftc.
Ford's they call him the swap dealing Banks, what our swaps, right
there.
Derivatives options, Futures, who deals the derivatives, the bank's,
the bullion Banks.
So, when you see the swap dealers on the cftc, reports are talking
about the bank positioning.
And after getting being about 20,000 contract, short, a month ago
there now, net long.
So there are a number of things that combine that were probably very
close to a low.
It actually Silver's responded pretty well, the last couple days and
one thing I'd add Chris.
When all this tipped over about a month ago and it was hot.
It was just a month ago.
The Monday after Easter, that silver was pushing toward 27 and gold
was briefly over 2,000 and everybody was all excited.
That was, I mean that was four weeks ago.
Like today, there was one previous time that I can ever remember that
being that bad in the last 12 years.
It was this time of the year in 2017.
And silver actually went down 8.
Days are 18, red candles in a row.
Now.
I mean, it was like, you and me and a handful of other masochist.
There were actually still paying attention in 2017 because it, you
know, we've been wandering in the wilderness for five or six years at
that point and, and price was already so low, I think I went from 1950
to 16 maybe over the course of 18 days, but I doubt 18 days in a row
and the daily momentum indicator.
The relative strength index got to an extremely oversold, level of 18,
and we always used to joke on my
Site that if you're losing streak, matches your RSI, it's probably a
good time to buy so late.
Last week.
I think there are a side bottom that like 20, I mean, it just get to a
point.
I mean, it's not a whole lot more complicated than you get to a point
where you've got more sellers and buyers or more buyers than Sellers.
And that's probably where we got to last week.
We'll see, you know, you mentioned getting above 30, you know, on the
anybody can look at a weekly chart in the consolidation that silver
has been in for a while.
Two years now between 22 and 28.
We've tried a couple times to break up above 28.
Look like kind of a false breakout.
We tried a couple times to break down below, 22 and look like a false
breakdown watch.
Let's watch silver, you know, as I said for how the shares and gold
might be doing, but let's watch silver this week in particular, to see
if it can get back above 22 and the Futures price really doesn't have
that much to do with the
Medals of physical supply and demand, and all that kind of stuff, at
least, not on a daily basis.
Okay.
So what really drives prices, the supply and the demand of those,
derivatives the Futures contracts.
And so, all right.
Well, let's think about that.
You know, I was talking about the hedge funds and the speculators the
trading funds in that kind of stuff that make up that category on all
those cftc reports.
Well, what do they do?
You know, they buy these Futures.
Well 90% of I think of all trade
Volume did the matter.
You know what you're talking about?
Anymore is high frequency trading machines.
Pre-programmed Algos that take their trading.
Cute.
Are these machines are for kids.
They're supposed to be watching like, for gold specifically.
They watch the bond market, watch the watch the dollar.
They got all these other cues that then make the algo decide whether
to buy or sell their gold contracts or their silver contracts on a
daily basis.
I mean, we've watched the dollar has
has gone from 190 to 105 in the last year, but it's particularly been
brutal in the last month been almost going straight up.
Well, why is the dollar going straight up?
Well, then you can start talking about inflation and the FED hiking
rates and how the Euro in the ecb's.
Not going to be hiking rates.
And the bank of Japan is trap and they can't hike rates.
All the sudden, the dollar looks pretty good versus the Euro and the
Yen.
I mean this it has its own set of fundamentals, but the dollar going
up, causes these
To sell their silver.
Futures don't have anything to do with that wall, a silver behind you.
It's just the machines just doing their thing.
So between the Dollar Rising and and rage Rising the bond market
selling off.
Has given this impression.
I guess kind of bigger picture that real interest rates are rising and
are going to sustainably, keep rising.
And therefore again machines or
A few handful of individuals actually do sell.
And that's where you get this.
Get these prices falling like this, what the stock market broke, it
fell 10% in October November and then it took out what had been those
lows in early December and fell.
Another 10% and that led ultimately to what now people call the Powell
pivot.
Well, when it took out started taking out that final 10% gold didn't
go down, gold went up three or four percent as it kind of caught a
safe haven bed, but then the bond market was rattling.
A safe haven bit as well.
And the machines were started buying gold physical Supply and the
demand.
I mean, all of us, silver Warriors, and Wall Street Silver, and
everybody that's buying silver.
That's wonderful.
But I, you cannot, you can clearly see the impact its had on price
because in day-to-day that doesn't matter that much.
Long-term.
Yes, but day-to-day, it's the machines selling, the Futures contracts
are buying the Futures contracts at determine price, you know, $100 an
ounce, $200, an ounce, whatever.
Sure.
I I don't know.
I really don't know.
I know it's not 20 probably isn't the right price, the maybe the
easiest math, in terms of how to figure out physical Demand versus
price.
Think of I think, the annual industrial demand for silver is about 600
million ounces a year, right?
So that's always pretty constant now, Mine Supply.
And, you know, I don't know if we're going to, if we should
count Chinese.
In Russian mind supply of and if we do, it's about 850 million ounces
a year.
And then if you want to just keep the math easy, think of recycling,
you know, and that kind of stuff at 150 million ounces a year.
So you've got an annual Supply between the two of.
I mean, again, I don't these numbers aren't necessarily accurate.
I guess you got it right.
There.
You what a billion ounces, right?
Okay.
So if the, if an industry is going to chew up and consume 600 million
that leaves about 400 million for investment demand.
So on years,
Like last year or maybe this year will be the same you exceed 400
million, then you actually do have a supply deficit.
Now.
Some will say well.
Yeah, but when price goes up you're going to recycle more because
people are bringing in Grandma's candlesticks and said well if price
is going to go after, I'll go a lot higher than 34 people to bring in
Grandma's candlesticks.
Okay, and what this our hope is for everybody that that still holds
their silver that has been buying silver relentlessly for 10 years or
whatever.
Is that you reach a point where the system breaks because the pricing
scheme relies on confidence?
No different from your local bank.
Okay, you go deposit your thousand dollars or make it bigger.
Number 100,000 dollars in your local bank, and then they're going to
load it out.
So if you show up a week later and watch a hundred thousand dollars
back, they may only have 10,000 in the vault, right?
And if you have enough people that
Up at that same moment wanting their hundred thousand dollars out of
the bank's got a problem.
That's how you had Bank runs back, you know, in the 30s.
Are you see it even today?
Well, the same thing is true about this Global pricing scheme, the
bullion Banks flow metal around at this falsely fraudulently determine
price and they if as long as they can flow, some metal in at that
price, they discover through the trading of their unallocated
contracts, you know, in London, and the Futures in New York, then it
has this are
See, everybody has confidence.
So I guess it really is $22 because I was able to get some if they run
out of metal.
If you get this crisis of confidence, then that leads to wait a
second.
You told me I could get my medal at a certain price and you don't have
it or you know, they're unable to fill orders.
Then the thing can unravel real quick and then we'll get a chance to
find out if Keith is right, you know, if $100 is the right price, but
for now confidence is maintained in the system and that's why it
perpetuates.
It's but I just the end of the day.
I feel pretty comfortable that your risk reward skew ratio is skewed
toward reward at 20 year, twenty one dollars an ounce.
That's for sure.