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Sunday, November 18, 2018

SUNDAY UPDATE: DOWN THE RABBIT HOLE

“A gold trader takes a walk!”

Almost the entirety of  last week, I felt like I was with Alice, as she was flying 
down the rabbit hole to meet the Queen of Hearts … nothing made any sense, 
& correlations came and went like blown kisses in a dream … first something 
matters then it doesn’t … oh wait, the market has changed its mind again, and 
then it’s on to something else … from totally dead trading conditions one 
second, to screaming higher the next, like there’s never gonna be another 
down tick ever again … until there is, and now it’s an “oh shit moment”, and 
you’re transported to the back seat of the “Thelma & Louise” cadillac over the 
cliff … “enjoy the ride, it only hurts when you hit the bottom”.

I’m posting 2 charts today, the first the 20 Day MA [both day and New York 
session] for the SP500 for 2018, and directly below that, the second chart of 
our weekly gold stats.


click to enlarge both

And it becomes quite evident from looking at both above, that gold has 
severely lagged in volatility compared to the February/March debacle in 
stocks, and very little has carried over to the most recent bloodbath on Wall 
Street, these last 6 weeks or so … “WTF is wrong with gold? … cuz quite 
frankly, we should be seeing $20+ daily ranges and we’re not … it’s simply the 
same old shit, different day routine … so why no reaction from out favorite 
yellow pet rock”?

In my book, it’s not the FED and/or the BIS holding gold volatility down 
anymore, it’s the frickin’ ChiComs … consider two [2] very important facts 
regarding our buds over in dictator “Xi land”; 1) they receive about 1 ½ 
billion dollars a day from the U.S., over and above what they import from the 
U.S. … that’s a helluva lot of money … in prior years, most of it went into 
Treasury bills, notes, bonds … not any longer, and 2) the ChiComs are buying 
massive amounts of physical gold from refiners everywhere, particularly 
Switzerland.

So, why not use some of that useless fiat, a/k/a the U.S. Dollar, and sell gold 
futures lower every chance they get … turn around and buy the shit out of it in 
the Pacific Rim on futures exchanges from Korea to Australia, and then take 
delivery? … so what you lose hundreds of millions in “paper losses”, cuz you’re 
buying billions in physical at stable or cheaper prices … it’s simply a cost of 
doing business to get the physical you need, without causing a panic in the 
market of a price melt up … cuz you need thousands of tonnes of physical gold 
… and what better way of getting the West to give it to you than letting the 
scumbag TBTF & TBTJ international banks act as your agents for a few coins 
in their pockets?

So, they buy in Asia to take delivery, sell in New York to keep the price stable 
or lower … they don’t care about “paper losses”“you wouldn’t either if 
someone was giving you approximately $500 billion dollars a year from trade 
… give the banks their “nickels and dimes”, but “mission accomplished” cuz you 
get the physical you really want … “and that “physical” ain’t ever leaving China 
Skippy”!

Cuz it all fits nicely into their plans of ruining U.S. hegemony [political, 
economic, financial, & social], without ever firing a shot … cuz some morning 
you’re gonna wake up to find crude oil is no longer priced in dollars, but Yuan, 
and the realization that they have announced that the Yuan is now backed by 
gold bullion … where does world commerce flow now? … and without the need 
for dollars from crude oil, where does the U.S. borrow trillions to finance the 
“free shit army”, from food stamps to grant giveaways to beyond worthless 
bullshit studies of the sex lives of frogs? “Do you seriously think they don’t care 
what price they pay for all the gold they’re buying [along with Russia & India]? 
… in a free market, their demand for physical would be far worse than soybeans 
skyrocketing in the worst drought the midwest has ever seen … price would be 
skyrocketing beyond belief … but it hasn’t has it, and why not? … cuz they’re not 
that fucking stupid to pay anything for it, when they know they can manipulate it 
to their benefit, with the help of western bankers”.

Stock market crash? … so what? … for the ChiComs, it’s all about gold priced 
in USDCNH, and if that’s stable, nobody in China is gonna get their “big girl 
panties” bunched up … however, at some point, when the world wakes the hell 
up, gold is the world’s most under priced, under allocated, asset class going 
… it most assuredly won’t stay that way in the future.

At least now you know, IMHO, why gold seems so screwed up in its trading, 
and why it goes “TNT & Crickets” so quickly … their point isn’t to make 
money, their point is to get the dealers to offer them physical at favorable 
prices, without the price going northward in a big way … in the process, of 
course, specs get crushed, simply cuz nothing makes any sense … one second 
gold goes for days and can’t hold $1 gains to save its life … and then in seconds 
it turns, and for days it can’t go down a $1, no matter the news or order flow 
… it’s the ChiComs folks, right along with their BFF’s JPM, Vampire Squid, 
HSBC, Barclays, etc., acting as middlemen and taking their ounce of flesh 
… to the Chicoms, it’s simply a cost of doing business that is immaterial for 
their ultimate purpose and goal, which is to eventually control the world’s gold 
supply and back the Yuan … and if that happens, you can kiss the U.S. goodbye 
… we’ll turn into Britain, which in a little over 70 years [1900 - 1970’s], went 
from world superpower to banana republic so fast it’s simply incredible 
… somewhere Queen Victoria is not happy!

This is Thanksgiving week, so we’ll see how things “shake out” … of course, 
Wednesday, Thursday, & Friday will most likely be a wasteland, but these 
times are anything but normal, so it remains to be seen what awaits us. In any 
event, I’ll be there and attempt to make sense of it … and yes, the PAMM will 
trade … onto the week!

Have a great rest of your weekend everybody!!

-vegas

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