Aug 28, 2014

theunhivedmind

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Marshall Swing: DOW to Break 30,000 Ahead of Hyperinflationary Collapse?

Posted on August 27, 2014 by The Doc

http://www.silverdoctors.com/marshall-swing-dow-to-break-30000-ahead-of-hyperinflationary-collapse/

Silver and gold prices continue to deteriorate as the speculators continue to buy up shorts and the commercials were able to wrest all higher priced longs from them in short covering, depressive episodes which, repeated in nature, have convinced the speculators prices are going much further South, and soon.

The important thing for the powers that be to do now is to reinforce the negative thinking on the part of speculators and anyone with interest in physical metal as they want it all for their one world currency backing, and they want it at low prices.

When prices do go below $17 we are going to begin to see foreign governments coughing up physical into the market as they will embrace all things paper and the promise of far greater returns on investment and protection from inflation for their people while watching the DOW eclipse 18,000, then 19,000 then…20,000.

If you believe Martin Armstrong, we will see DOW in the high 20,000s maybe even break 30,000.

All will seem well in the world of paper until merely days before the planned economic collapse of the world’s derivatives and bonds, and lastly all currencies.

Submitted by Marshall Swing:

This past week I traveled to my home state of North Carolina to meet with some old friends at a class reunion this past weekend and to visit with family. It is always nice to come back here to familiar landscape in the Piedmont (middle) of the state where the trees, particularly pine trees thrive and there is no shortage of water on this side of the country as there is in California.

Everything is green here just like as in the Wilderness of Southern Illinois where I live. It is so shocking to see everything green as if it is April or May whereas the last few years, particularly 2012, where I live were disaster drought years for the farmers and city people’s lawn took on weeds because the grass dried up and weed seeds thrive in those conditions.

However, the drought in silver and gold paper futures continues…

Silver and gold prices continue to deteriorate as the speculators continue to buy up shorts and the commercials were able to wrest all higher priced longs from them in short covering, depressive episodes which, repeated in nature, have convinced the speculators prices are going much further South, and soon. I believe that is faulty thinking on the part of the speculators who should take profits NOW on their shorts and regroup for another day in the sun.

Much further South would be sub $18 but I think it is too early in this play or thriller novel/movie to embrace those levels as we have at least 14 months before the planned world wide economic collapse.

The important thing for the powers that be to do now is to reinforce the negative thinking on the part of speculators and anyone who would have any interest in physical metal as they want it all for their one world currency backing and they want it at low prices.

When prices do go below $17 we are going to begin to see foreign governments coughing up physical into the market as they will embrace all things paper and the promise of far greater returns on investment and protection from inflation for their people while watching the DOW eclipse 18,000, then 19,000 then… And if you believe Martin Armstrong, possibly we will see DOW in the high 20,000s maybe even break 30,000. All will seem well in the world of paper until days, maybe a week before the planned economic collapse of the world’s derivatives and bonds, and lastly all currencies right into the Revelation 18 scenario.

Recently, I showed a long term graph which proves beyond doubt we are in a trend of lower highs and lower lows so it is very reasonable to expect another lower high soon, especially with the speculators scarfing up shorts. Speculator shorts represent easy money for HFTing commercials to jack up price suddenly before those speculators can sell at their stop levels and are left with thousands of contracts at high losses.

Since we know the speculators have, for a few weeks, been buying up shorts we know the commercials are primarily buying longs and first glance would make one think those longs are in the red and indeed they are. The commercials literally do not care if their longs are in the red or by how much while they artfully execute a temporary mission to entice speculator short buying. This is no different than the run up in price to nearly $50, in 2011, where many thought the commercial shorts were horribly in the red and they were not.

What happens regularly is positions are repositioned.

If you enter all contracts into a database or a spreadsheet and do a little math, one will come to the realization, based solely on the math, that it is mathematically impossible for there to be a huge number of contracts far away from the spot price of a metal. For instance, if there is a huge number of shorts held by commercials and price goes way up then there necessarily has to be a declining number of them because as price goes higher they have less and less impact in determining price. If most of the contracts in the market are within $1 of whatever spot price is there is, mathematically, a very limited number of shorts that can be at a lower number and those shorts would have to have a corresponding number of longs at much higher values to offset the shorts at the particular spot price.

Most people cannot mathematically conceptualize what I just described. That is not strange because most people do not like math.

I have referred to the futures market many times like a puppet on strings from both above and below and what the commercials have done is develop a mathematical model that keeps up with all their contracts, all price levels of those contracts whether long or short and each individual contract’s relationship to price and to each other.

When they desire to move price lower, it is an easy query to determine the individual contracts that are candidates for removal from their portfolio profit ratios, and what types of shorts and longs then need to add in order to achieve the price point they desire for the operation they are carrying out and the result they want to achieve several days or weeks down the road.

Of course, these contracts present an absolute maze to the average or above average auditor who might be searching for manipulation while investigating at the behest of the CFTC. I wonder how good Bart Chilton was at math?

He may have finally seen evidence of manipulation and how it is done, I do not know, but it seemed he was absolutely clear than manipulation was going on and who was doing it, although he got outvoted by the Commissioners. I would one day like to know if it was merely that he could see it happening like the Supreme Court Justices who were “remarkably brilliant” in knowing pornography when they saw it or if there was some geek at the CFTC who actually began to understand these commercial’s mathematical models and how they worked.

The geeky analysts at the CFTC probably read one of my articles a couple of years ago and had an eureka moment and told Chilton they could see it but in order to duplicate it to prove it they would need a programming staff and design staff and three years or more to duplicate the manipulation to finally prove those at the House of Morgan and others were doing what they do do.

We were told what they do is bona fide hedging which is a great cover but when we see magnificent operations like on the gold chart below on a Sunday night in Asia we are left to wonder.

We already know there are no large speculator operations in those markets and for years see saw almost no volume of trading in Asia even though Asia, China in particular, was buying up metals right and left, but now and then there is a great operation like this one, obviously done by one class of trader (because of the sheer volumes involved), the commercials, and their unrighteous indignation is without equal as they literally do not care who sees them do what they do as almost no one can figure it out but even with the goods there is no Justice Department that is going to prosecute them as this is pretty much suspected to be an operation ultimately of the U.S. Government via the Federal Reserve to manipulate metal’s prices so that metal prices do not accurately point the finger at the corrupt paper game.

I frequently run into friends and acquaintances who think they know something about the future’s markets and when I tell them that price has virtually no relationship to demand in gold and silver some even go ballistic in defending the markets and can stare at statistics showing shortages or all mined ounces being sold and ignore the facts and insist there is something I have left out of the equation because if a billion ounces were mined and a billion or more ounces were sold then product is in high demand and therefore price has to go up!

Not so in the gold and silver markets I tell them, then I get crucified…

People tend to revel in their ignorance until you expose it without doubt but then they are offended by guilt by association with a false belief.

People believe the things they want to believe, ultimately, whether what they believe is based on the facts or not and most people do not want to search too deeply to question what they feel comfortable with is the facts or not the facts. Such a search can be time consuming and mentally demanding and most people would rather watch football, baseball, basketball, golf, and other more mindless TV. And, it is hard to blame people for wanting some leisure activity in a busy rat race world like this but most people in this world are controlled by and build their lives around what their leisure activities are.

One thing I have found True in life is that Truth comes at a premium. It does not matter what the subject is, whether history, economics, religion, politics whatever Truth comes at a premium and the Truth is not easily found because there are those in every area of life that want to control others to profit off them either because of the love of money or the love of control and power over others and they frequently use disinformation to do it.

Whatever happened to loving your neighbor as yourself?

We, the people, have allowed the setting up of a financial world that supports the rape, pillage, and sack of the people and now the people feel powerless to do anything about it. The people have great power but who will lead them in defiance of oppressive regulation and massive corporatocracy (sounds like Democrats and Republicans, huh) ?

Just like Democrats and Republicans, these commercials have learned how to play both ends against the middle (the people). Simple.

In silver, much like last week, we see the large speculators doubling down on shorts adding well over 26 million new short ounces. The small specs added another 1,627 short contracts to bring the total speculator short ounces added to their totals to almost 35,000,000 short ounces in just one week! The commercials produced an obvious short covering price depression to flesh out speculator longs but also added over 3,500 new long contracts. The disaggregated silver COT numbers reveal nothing further.

In gold, we see the commercials picking up 8,515 new longs to their previous total while the speculators lost longs as if their carotid artery was cut but unlike their silver counterparts they did not pick up a like percentage of shorts but did pick up some and presumably when this Friday’s COT number are out we will see they picked up more. If price remains about the same through Tuesday afternoon, we will get to see some real representative numbers.

The gold disaggregated COT is startling, however, as portraying the producer merchant as virtually silent while all the commercial action appears to be on the part of the swap dealers.

The managed money category shows those speculators losing almost 10,000 long contracts!

Do the math! 10,000 longs lost in the red, that’s 50 MILLION speculator long ounces gone in 5 business day’s time!!

Notice the gold chart and the oval in the middle and what I call a repositioning exercise. During an operation like this when price goes wildly down then quickly up many positions can change hands and those numbers are not always reflected in the COT because they are covered up since the COT is nothing but totals of long and short positions at the end of the period, so we do not know the totals prior to the repositioning or after but only at the end of the COT week and the start of the COT week.

Taking into account the loss of over 1,700 contracts off total open interest, we know the producer merchant action can be hidden partially in those numbers.

This is clearly an HFT exercise to drop price very quickly while reaping the maximum profit through automatic tripping of preset speculator short positions while those speculators sleep only to wake up finding themselves holding huge losses and scratching their heads while the commercials reloaded with longs at the bottom and speculator programs were triggered to purchase shorts into declining price.

Such massive long accumulation by the commercials demands that price go up, but when?

My gut tells me soon but they can easily sustain their longs with losses all the way to $18 and recoup when they drive price higher to collapse the speculator shorts in the HFT price rally.

Reporting from the wilds of North Carolina,

Marshall

https://www.facebook.com/marshall.swing.9

http://www.cftc.gov/dea/futures/deacmxlf.htm

http://www.cftc.gov/dea/futures/other_lf.htm

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