With the continued focus on precious metals manipulation, I decided it was a good idea to provide my CONNECT THE DOT analysis on this subject matter. While most analysts and investors in the precious metals community focus a lot of their efforts on the “COMEX” and “Manipulation,” I believe we have much bigger problems ahead that deserve our attention.
However, even if people were open to my analysis, most would continue to believe in precious metals manipulation. I still receive a lot of emails, questions, and social media replies suggesting, “STEVE… you just don’t get it… LOL.” Believe me you; I GET IT.
The biggest proponent of Silver Market Manipulation is Ted Butler. Interestingly, I can thank Ted Butler’s early analysis that finally forced me to buy my first 100 oz silver bars at $4.52 an ounce back in 2002. Even up until 5-7 years ago, I continued to go along with the Manipulation Mantra, but no longer. Why? When I moved my focus to Energy and read a great deal of work from Keith Weiner on the trading mechanism behind gold and silver, I realized it was all BIG RED HERRING.
I now focus most of my time on how ENERGY will change everything, especially the value of most assets and the metals. But, this won’t be due to anything the Central Banks DO or DON’T DO, but rather… the ENERGY CLIFF.
DISCLAIMER: SRSrocco Report provides intelligent, well-researched information to those with interest in the economy and asset values. Neither SRSrocco Report nor any of its owners, officers, directors, employees, subsidiaries, affiliates, licensors, service and content providers, producers or agents provide financial advisement services. Neither do we work miracles. We provide our content and opinions to readers only so that they may make informed decisions on all types of assets. Under no circumstances should you interpret opinions which SRSrocco Report or Steve St. Angelo offers on this or any other website as financial advice.
Check back for new articles and updates at the SRSrocco Report. You can also follow us on Twitter and Youtube below:
Great presentation, Steve! In your presentation you advocated that investors be in physical precious metals. You didn’t mention precious metal stocks. Would that be because in the upcoming turbulent financial times with quadrillions of derivatives collapsing and setting off a domino effect causing stocks and brokerages that hold the stocks to be exposed to great risk?
As far as macro factors such as derivatives, etc….who knows? Not me.
Consider investing in miners as at least somewhat speculative. The reasons range from straightforward dilution of stocks by creating more shares to raise capital, to geopolitical risks, to mines’ declining ore grades resulting in a mine being shut down, or shut down due to environmental reasons, nationalization of mines, or spikes in diesel costs [or lack of availability of diesel], and other reasons.
Better study well and diligently before investing in miners.
stan,
Because I am not a financial advisor, I really can’t make recommendations. While I say it’s important to own physical metal, that is more of a GENERAL EDUCATIONAL STATEMENT. If someone wants to speculate in the Mining Stocks, we could see some BIG GAINS, but it’s more speculative now due to the ENERGY CLIFF. So, if it was ME, I can share what I would do, I would only invest a small percentage in the miners, the money I could lose, but keep most in physical metals.
steve
Thanks for the insights DC……much appreciated.
Steve, I’ve been a member from the beginning. If I were unable to access this site for months, I would still be a member. Just to support this work. It’s that important. Having said that…
With everything going down in the world and USA, we have unlimited disaster fundamentals to choose from. Emergency Use Authorization mass injections, police state, enveloping surveillance, supply chain disruptions, food supply destruction, captured regulatory institutions, rouge government agencies, corporate sponsored brown-shirts ad nauseum. Dragons be here.
You argue there is one main fundamental; energy. I contend there are two; energy AND money.
You’ve acknowledged LIBOR manipulation. Good enough. Because I have no desire to dredge decades of solid evidence from the Gold Anti Trust Association, or others. You either understand ERIO or you don’t. It’s the same with the effects, the relevance of dark-side economics. Manipulation is documented and exposed; enough. I’m writing to say that it matters.
For a civilization under a growth paradigm, energy had to peak. But it never had to destroy this republic. That specifically, was the function of unconstitutional money. From the petrol-dollar to the gold “leasing” augmented bond market, to the myriad manipulations of silver and gold, to monetizing debt – it was all to protect the fiat creature. This is what allowed the oil to flow and keep on flowing.
The ‘banks’ have allowed us to spend beyond our means? To keep this show going? Yep. And that’s a key. It was not energy that de-industrialized this Republic. It was not energy that misallocated capital. It was not energy that destroyed the rule-of-law. And it was not energy that destroyed this Republic. That was the corruption of money itself. Energy and fiat became a symbiotic relationship. That’s why manipulation of gold and silver matters as much as the energy itself.
Lastly, Craig Hemke is not an adversary, he’s an ally in the quest for understanding. Great analysis, honest, one of the good guys. You’ve also brought up Alasdair Macleod. Macleod (from the Clan Macleod) is on the level of Kurt Rickenbacker. His commentary on current events is yet another indicator, along with energy, of when. We need the insight of thinkers on the obverse of this oleaginous coin. It’s Energy AND Money.
dale,
Thanks for your comments.
Let’s do this. We can agree to disagree on Gold & Silver manipulation. Also, I like Craig Hemke from TF Metals. I don’t see him as an adversary. Rather, I see the MANIPULATION RHETORIC now as a complete waste of time because we have much BIGGER ENERGY FISH TO FRY.
Understand?
steve
The market manipulations are not part of your analysis. I appreciate that. It would be difficult to incorporate or to cover multiple disciplines.
We can certainly agree to disagree.
There is “trading” or manipulation of any and all markets the big players can make money at, while fines are just the cost of doing business:
https://www.justice.gov/opa/pr/jpmorgan-chase-co-agrees-pay-920-million-connection-schemes-defraud-precious-metals-and-us
https://www.justice.gov/opa/pr/current-and-former-precious-metals-traders-charged-multi-year-market-manipulation
And while some may not consider spoofing as real manipulation, apparently many legal authorities do.
https://www.straitstimes.com/business/banking/jpmorgan-fined-126-billion-for-manipulating-precious-metals-treasury-market
https://news.bloomberglaw.com/banking-law/deutsche-bank-reaches-100-million-deal-to-settle-u-s-charges
I could go on.
HOWEVER…any corruption or greed involving any market is not under the control of anyone reading this or posting here. As such it is a waste of time to get upset over; that which one has no control of.
In time the lowest common denominator [energy] kicks in. To me it is like a prime number [they only have two factors, 1 and the number itself. This means these numbers cannot be divided by any number other than 1 and the number itself without leaving a remainder].
In time it’s all about energy, the only common denominator, the “1” to a prime number.
dale,
Maybe the word ‘manipulation’ is the problem. It implies that were it not for these banks taking advantage of their positions and connections, everything would be dandy.
Well, let me ask you this, show me a point in human history when trading and markets were FAIR and NOT MANIPULATED according to your or GATA’s standards. As a student of financial history, I can save you a lot of research… there has never been such an era.
There is always an economic center. It grows thanks to abundant energy. Its growth leads to corruption because of human nature. The corruption necessarily leads to the downfall of the entire system. Interestingly, it always goes hand in hand with the diminishing of its main energy source.
So, yes, you are correct, it wouldn’t have to be this way… if only politicians and bankers were angels with true hearts. But they never were and never are. The question then becomes: why do you expect them to be angels? And, further, what value is in such analysis based in completely wishful thinking?
I will write up a more detailed post on this topic on the main website with some historical examples.
I concur with Steve, some manipulation is going on in the metals market as is with all the markets. With the knowledge of our energy predicament, it is a waste of time and energy to bicker over this. The current system will collapse rapidly once there is no longer enough net energy to power our complex global economy.
My 2 cents, back in 2013 when the price of metals fell drastically around April 15, Zerohedge published an article on the price change. The analysis in the article demonstrated that the amount the price fell was a 6 sigma derivation. Apply Occam’s Razor and then ask if this price change was natural.
Once the collapse hits, those wise enough to have moved their wealth to metals will become the 1%. We are better served reflecting on how this wealth can be used judiciously to help us through the transition phase to the new systems and ways of life than arguing over manipulation.
6 sigma deviation
atchafalaya,
100% Agreed. Will be in touch shortly.
steve
Steve, if oil were to go down to the 90s and stay there how does thta affect your gold and silver cost of prodn?
thomas rossmann,
We are seeing that today as the oil price declines, so have the gold and silver prices. However, I believe there will be a bottom in the silver price sooner rather then later because we are getting to a LOW in the Commerical Net Short Position. I will be providing more analysis on this for SRSrocco Report subscribers.
steve
The only thing keeping retailers from being cleaned out of silver right now at this price is the high premiums. If and when that happens, it puts pressure on the wholesalers.
But I suspect interest in silver, both ETF and physical savers/investors, is very low, as the price stays mired in the mud.
Somewhat similar dynamics are in gold, except wealthy individuals, central banks, and sovereign nations continue to buy. Indian seasonal buying should come in soon also.
If one can buy an ounce or more, premiums are a tiny fraction of silver’s premiums. As low as 3% on kilo bars from a retailer. That’s appealing to the wealthy. What else are they going to put their vast income streams into that doesn’t risk losses?
I agree, concentrating on metals manipulation is a waste of time..as long as the “market” can provide physical metal at the paper price….the manipulation will continue….which is why I went into the crypto market in early 2013….which has allowed me to accumulate far more physical metal those following years to the present than I would have been able to otherwise…while my fellow “metal heads” cried and wailed about the manipulation they could do nothing about…
Steve, im curious to get your thoughts on Kinesis Monetary System. Its a good way to own gold and silver but since it is blockchain technology it is using up energy even after the metal has been mined. Are you a fan of something like this, where your digital gold/silver is backed 1:1 by physical, or does this not jive well with the energy cliff thesis? Thanks a lot