morning is breaking...

Good morning and welcome to another Top-Shelf Thursday! This evening, open the cabinet and pour a liberal amount of the best libation you have. In my case, it will be an inch and a half of 16 year Lagavulin. Cream greets me this morning with their 1968 hit, White Room.

So what on earth would get me to write an edition of Precious Metal Musings today? I mean, my last copy was November 15th! Actually, it's easy. For the past months we’ve sat back and watched spot prices moving in some of the tightest ranges ever. What I called in my last column - sleep mode. Well, yesterday, I began to see a light at the end of this proverbial tunnel. What I think I’m seeing is actually the end of the big banks shorting the market. Over the past five years I have, on many occasions, explained how the big banks (JPMorgan, Goldman Sachs, and others) have shorted both gold and silver on the Precious Metal Commodity Exchange to manipulate prices. They have been extremely effective in making billions since the demise of Bear Stearns when JP Morgan Chase purchased its assets at the behest of the U.S. Treasury and the Federal Reserve on March 16, 2008 and saved the U.S. economy.

Now before you dismiss me as a conspiracy nut, can I suggest you do an internet search on the market collapse of 2008? Yes, the sub-prime mortgage market was in distress, and many companies including Bear Stearns had a significant presence in this market, but based on my readings, the catalyst to the economic implosion was Bear Stearns concentrated short position of both gold and silver coupled with the highest prices of metals since 1980. As a side note, in February of that year, Bear Stearns stock was trading as high as $93 a share. Fifteen days later JPMorgan Chase acquired them for $2 a share. Bear Stearns had to come up with close to $2.7 billion because gold and silver prices had skyrocketed and they had bet the wrong way. They lost!

Okay, you say. Nice history lesson. But why do I think we are about to all of a sudden see a reversal in manipulation of the markets allowing precious metals to find their natural equilibrium? Have you ever just had a feeling that things are about to come together in a “Perfect-Storm” sort of way? I have written about China and their success with the Shanghai Commodity Exchange and the recent news that they are no longer buying U.S. Treasuries. I’ve talked about the gold buying patterns of Russia, India, Turkey, and Iran. Discussed the implications of Brexit on the London Metal Exchange (The first and largest precious metals exchange and where spot prices have historically been set.) and I can go on and on. In other words, as I see it, everything including the 10 year anniversary of the Bear Stearns-JP Morgan takeover is coming together in the Spring of 2018. I’ve followed and graphed the last three years of Commitment of Traders (COT) reports and there seems to be a correction occurring.

Oh, and before I forget to mention, there’s a new sheriff in town over at the Commodity Futures Trading Commission. The new director of the Enforcement Division is James McDonald and he has a long and distinguished background in public service including as the federal prosecutor in the Southern District of New York. This guy plans to kick ass and take names.

So what’s all of this mean? If I’m right, the natural equilibrium of silver and gold is significantly higher than what we are seeing at the moment. How much higher you ask? From my cheap seat I can see precious metal prices performing equally if not better than what we’ve seen from the stock market recently. If I said double today's price would you blink? Maybe 3x? I see this as a great time for me to buy and hold. Not to sell.

Well, I’ll let that be it for today. Go out there and make a difference! See ya later!

*Disclaimer: Precious Metal Musings™ is written for entertainment and news purposes only and should not be used in making purchases and/or sales of precious metals.