I came across these sentences in St. Augustine's On Christian Doctrine in which he denounces fortune-tellers and soothsayers. I had to think of all the media and market prognosticators who read the Federal Open Market Committee minutes & the words that dribble from the mouths of Janet Yellen & other Fed bloodsuckers, then interpret them as if they were Roman augurs reading sheep guts.
"(All such errors) imply a pestiferous curiosity, an excruciating solicitude, and a mortal slavery. They were not noticed because of any innate validity, but were made to have validity through being noticed and pointed out." (Book 2, XXIV, 37)
The physical silver supply shortage is running wild. One large mint is backlogged 3.8 million ounces. Two other mints are so backlogged they are not selling. One other is quoting twelve week delivery even for 100 oz. bars, and not quoting delivery for one ounce rounds at all. Twelve weeks equals 27 November.
Eventually they will sort it out and all that silver will be delivered. In the meantime very little physical silver is available. Some US 90% can be had, but at $4.70 an ounce over spot. We managed to find some one ounce Brittannias, an official coin minted by the British mint, but not many and they cost about $1.50 more than privately minted silver rounds. We have them live, at least.
Ponder what this backwardation means: The futures price for spot silver is 1454.4 cents, but US 90% silver coin, when you can find it, costs 1924.4 cents an ounce AT WHOLESALE, 32.3% above spot silver.
This is worse than the silver supply situation in the 2008 Financial panic. And while our little corner of the world silver market is small, the supply dearth still argues that the public has HUGE monetary demand for silver.
And look, this is not the wild, raving imaginings of some anonymous internet guru. These are the numbers & realities I am dealing with daily.
NOW TO THE WEEK IN MARKETS:
The week was not kind to stocks. Dow lost 3.2%, S&P500 lost 3.4%, & they're beginning to install wrought iron grates over the windows in stock brokerage high rises. Somebody's a-feared it's gonna start raining stock brokers. Dollar index tried but failed to reach escape velocity. Gold took a correctional whipping this week while silver held on. Better days coming for metals.
Law, it's times like this the Nice Government Men have to earn their money. That stock market plunges 470 points in a day but all they can push back is 129, then it drops off another 272.
Today the Dow looked like a lazy man trying to get out of bed after a long night of drinking bustskull whiskey. Just couldn't do anything but lie back down. Dow dove 272.38 (1.66%) to 16,102.38 & the S&P500 sank 29.91 (1.53%) to 1,921.22. It warn't their shiningest day ever.
Stocks have likely sketched out a flag or pennant, which gives us a measuring stick for the depth of this move: 13,904.
I keep telling y'all this, piling my little grain of corrective sand on the scales against the tons of hogwash pouring out of Washington and New York: It ain't over yit. Stocks will sink, sink, sink for lo, five to seven years, for the trend hath turned from up to down.
Look here at this, if you doubt: http://schrts.co/hsPQGx It's the Dow in Gold chart. It has broken down, down, down, and now is coiling up for yet another nosedive. Closed today down 1.47% at G$296.64 gold dollars (14.35 oz). Not coming back.
Dow in silver fell 0.68% to S$1,430.87 (1,106.69 ounces). It's playing at the 200 day moving average, but will soon enough crash through. Floor's rotten. Chart is right here, http://schrts.co/btkUWX
US Dollar index looked mighty brave yesterday, but today like a plucked chicken. Day's trading undid all yesterday's gains and then some. Dollar lost 18 basis points to close at 96.24. Today looked an awful lot like the first half of a key reversal, but let's see what Tuesday brings. 'Pears that the dollar is following stocks.
Euro is going nowhere but the yen has itself a little ol' rally going. Rose 0.91% today to 84.00 and will go higher.
I saw some media clowns talking today about how the low unemployment report today might lead the Fed to raise interest rates next month. Listen to me, hear what I'm saying and I'll stick to it: the Fed is as likely to raise rates this month, next month, or this year, as Hillary Clinton is to win the Most Charming Woman contest. Ain't no chance they'll raise rates. They're scairt to death of the stock market.
All the gentlemen prognosticators forecasting deflation better take another look. Oil had a great two weeks, as did Copper and the CRB commodity index. Oil came up out of the hole 27 August and has been blowing a gusher ever since. Chart's here, don't take my word for it: http://schrts.co/19yCYE
Gold shaved off $3.10 (0.3%) to close Comex at $1,120.60. Silver gave up 15.8 cents (1.1%) to 1454.4c.
Today's close took gold firmly below its 50 day moving average ($1,127.08) but even at today's $1,115.70 low it didn't quite reach my $1,110 target for this move. Anyway, it ought to turn up next week, maybe after one last dip. Chart's here, http://schrts.co/t7sauu
Oddly enough, there's no shortage of physical gold, at least not in the one ounce and larger sizes. Europe long ago bought up most of the fractional coins. Oh, there are a few small gold out there but not cheap. In 2008 before the silver situation got this scarce gold had become tight, too. The premiums never rose as high but deliveries stretched out six to eight weeks.
I reckon silver's like a mercilessly beautiful but mysterious woman. You can't ever exactly figure her out. Silver's low today reached 1448 cents, and strong support rests under that at 1435c. Truth is, my betting that silver's already bottomed back in August rests on the seasonal window, an 11 and 7 year cycle due to bottom in July, & the great length of the bear phase since 2011. Right now, though, silver remains below its 20 and 50 DMAs and needs to step out & strut its stuff.
Another thing that rests on my mind is that premium on US 90% silver coin. It has now reached the same dollar level that it reached in 2008 and 2013, at the highs. In 2008 that premium high marked the price low, too.
Next week I'll be vacationing with my family, so I won't be sending any commentaries, unless I just get itchy and take a notion. Anyway, y'all all know what I think: stocks will drop way more and probably take the US dollar with 'em. Silver & gold (I believe) have already bottomed, so it's the time to buy 'em.
Our crew next week will be right skinny, so be patient & somebody'll call back.
On 3 September 1862 General Robert E. Lee moved north into Maryland with his Army of Northern Virginia. Some fool who had received a copy of Lee's detailed battle plans -- Special Order 191 -- wrapped them around three cigars, then lost the cigars. Union soldiers found them and passed them up the chain of command, that ended at General McClellan. He waited 18 hours before taking advantage of his information, very effectively squandering his advantage.
The campaign climaxed on 17 September at the Battle of Sharpsburg or Antietam. It was the bloodiest single-day battle in American History with casualties & missing at 22,717. With only 38,000 engaged, the Army of No. Virginia beat McClellan's army of 75,500, in part because McClellan never brought them to bear. The lesson? Don't wrap your cigars in special orders, and if you do, don't lose 'em.
Y'all enjoy your weekend.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger