Ted Butler alluded to the fact that the Central Fund of Canada (CEF), which just did a huge stock deal and purchased a massive amount of gold and silver, has to wait 5-6 months for the silver to be delivered. Anyone see the problem there? A friend and colleague of mine with a good call into the managers of the fund confirmed this. If silver was in bounteous supplies, how come CEF can't get its silver delivered right away?
While I differ with Mr. Butler on his view that the CFTC will ultimately do the right thing and clean up the corruption in the gold/silver futures market, I have to say - in following his work for over 8 years - that he knows more about the dynamics of the silver market than ANY market professional I've ever been exposed to knows about any market, and that includes the Nobel professors I had at U of Chicago. His "bullish" meter for silver right now is 90%. If JPM takes silver below its 200 dma this week (around the $17.40 area), his meter will hit 100%. Historically his bullish meter is remarkably accurate.
The Denver Post ran an article on the front page of its business section about gold being in a bubble. I have never in 9 years of doing this sector of the market, exclusively, ever read anything so factually devoid and lacking any real analysis. I was absolutely stunned that the business editor permitted the article to run. Seriously, the article contained almost nothing factual, lacked any kind of real analysis and thought and didn't even really make a case for gold being in a bubble. Just one question: In the context of any market bubble being defined as when every single market participate is buying as much of that investment as they can get and is willing to pay any price, how can gold possibly be in a bubble when only about 2% of the U.S. population owns gold, very few insitutional funds are buying gold and "sell your gold for cash" ads are permeating every possible media outlet? Shouldn't all these sellers be buying gold to fit the most basic characteristic of a bubble? I can come up with many other reasons as to why it's a waste of time to mention "gold" and "bubble" in the same article. But I will note for the record that the Denver Post article featured the George Soros comment about gold being the next big bubble. Yet, it failed to report the fact that within two weeks of Soros making that comment, it was revealed that his hedge fund had quietly become one of the largest holders of the GLD trust. If George bothered to read my work on GLD, maybe he would have been busy accumulating actual physical gold and had it delivered to a private depository where he could verify that it really exists.
And let me end with this quote from Mark Lundeen, posted by "Joe" in the comment section:
Monetary Policy is being managed by a moron. What else should I call someone who is trying to save a financial system by destroying its unit of trade?