Thursday, July 1, 2010

Zerohedge Shows Its Ignorance Twice Today

Earlier today Zerohedge announced in marquee lights that AIG manipulated the metals markets. They acted like they unveiled the splitting of the atom. Those of us who have been involved in this market for this past decade and who support GATA, have been aware since at least 2002 that AIG has been, was, one of the main manipulators in the silver market. All of the evidence has been there for those who cared to understand the facts.

Second, Zerohedge is blaming today's action in gold on "asset liquidations." Today was not about asset liquidations. Today was about Gary Gensler and the CFTC letting the bullion banks, who have manipulated the markets unfettered for the past 20 years, run riot with a paper selling avalanche that triggered black box hedge fund stop-loss orders.  Today was a classic drop in gold that was triggered by an avalanche of selling exactly at the open of Comex trading. This trading action has occurred almost every day over the past two weeks and 100's of times over the last 9 years that I've been trading this market. It is criminal and enabled by a Government that enables widespread fraud and corruption. Here's the chart:

(click on chart to enlarge)

I guess the pundits would say that today's action was coincidental to the fact that Comex is edging closer to a condition of defaulting on its physical gold/silver deliveries...

Zerohedge is a good source for intel on a lot subjects.  The precious metals market is not one of them.


  1. if these are indeed patterns in the market, manipulated or not, then one can make a killing trading them, no?

  2. ZH posts quite a bit of good material.

    Sometimes, and perhaps a little too frequently, the headlines and initial commentary are somewhat 'enthusiastic' about what it is they are really saying or have discovered. Its an overreach looking for that 'wow' factor.

    It works for clicks in the short run, but in the longer run it tends to undermine credibility.

    I don't think anyone at Zh has a background in journalism or experience in that industry. So its easy to replicate the kinds of mistakes common to journalism, things that look good on the surface, but tend to bite you in the long run.

    The other little things is this tendency to byline so many diverse sources as 'Tyler.'

    People have independent points of view, and different perspectives based on who they are, what they know, and where they have been.

    There is quite a bit of editorial content and personal perspective in almost every story. That is the nature of blogging which is infrequently 'straight news.'

    So it makes it difficult to assess what is being said without really knowing who is saying it and adjusting for it.

    Having said that, which I consider to be more 'preferences' than anything else, I like the site, and read it daily, and don't have much problem with what it is they do. I am glad to have them on the blogosphere and they bring a lot to the game.

  3. Why is it possible for a $50 drop in the price of gold to happen only during U.S. market hours? Why do we never see violent price changes during operating hours of other exchanges??

  4. I'm sitting on about 80% cash right now...Very small % in one miner, was going to hold off until late July/Early August. I'm leaning towards the bigger gold players and a smaller % in SVM, SLW and some gold juniors. Most likely will only commit about 25-30% of my capital to these guys as I mostly want to go the physical route. Right now, I have a 20% position in coins, mostly gold (75/25 gold to silver ratio).

    How would you recommend someone scaling into the bullion side who is a little late to the game? Also, do you have an opinion on Bullion Vault or If not, can you provide any other advice on taking possession/storing, etc.


  5. good call,Dave. Dan Ivandjiiski and Zerohedge are acquiring a cult status sometimes all out of proportion to the real significance of their/his actual contributions, which admittedly are mostly of considerable importance. I was not at all surprised by this paper sell off and indeed fully expected it. personally it just means a couple of more golden buffaloes for me. some of us have noticed there is a certain correlation between the G20 meetings and such Comex bullion bully bear raids, especially (believe it or not) if it coincides with full or new moons. some people scoff at these astronomical indices but I find them very indicative of large movements in the metals markets. Many of my friends were surprised when I called for a dump in gold down to 1170 when everybody else was looking only skyward for Au and Ag. Same thing happened back at 1190 when Au retraced all the way back to 1040. Big deal. Soon it'll be up up and away again and many of us will be a little bit better fortified. always appreciate your sometimes contrarian and always stimulating analysis.

  6. Jayhawk, I don't know what kind of dollars you're dealing with, but I would recommend not using bullionvault etc and buying 1 oz. sovereign minted gold/silver coins. If you can swing a minimum purchase of 20 ozs. of gold or 500 ozs. of silver, use Less than that use or CNI coins (you can google their website). There's another one out of Oklahoma and I can't remember their name and they have good pricing for odd lot buys.

    Get the bullion and hide it. Buy some every month or every other month.

  7. Agree Jess, and that's why at the end of my post I said that they post a lot of good stuff. Their pm material sux tho.

  8. Anonymous, you can trade the Comex opening smack but you have to be nimble and you have to have enough margin to weather an ambush like today. If you go into the game well-armed, you can make a lot of money. We just buy bullion for the fund on these "fishing line" b.s. days.

  9. The question is will they default silver at $16.00, $15.00, $11.00 or even $8.00 an oz?

  10. Agree with your assessment Dave. Pure market manipulation. The Bullion Banksters just gave me another chance to buy more PHYS, CEF, PAAS, etc. on the cheap. Will buy more physical if silver spot drops a bit more tomorrow morning.

    @ Jayhawk. Check out James Turk's if you want to store PM out of the country. Turk is as straight as they come. His fees are reasonable.

    Appreciate your writing Dave. I read you daily.
    -- JP

  11. Zero Hedge really do need to get someone with actual PM OTC market experience on their team to review the stuff they get and tell them when they are overreaching as Jesse says.

    And that is OTC experience, not COMEX because COMEX is half the story. Maybe its a US centric thing.

  12. Dave,
    was out fishing today and when I got back I was more excited about the downdraft in Au/Ag than anything. Why???? Paper monkeys just don't get that in the past they were causing paper selling and panic moves by day to day guy; now most of the real stuff is going to Russia, China and the gold holding ETF's as well as private wealth buyers. That is not coming back on the market. Keep dumping it paper boys, you are making the end of the games come that much faster clowns.

  13. Great comments and Spot on commentary Dave. I am privileged to be in such fine company.

    Hell of a recovery Gentlemen, Not need fret though, Main Street has not a clue.

  14. Dave,
    plenty of fish pics up if you like that stuff.

  15. Keep up the good work Dave.

    As for today's gift - I bought some more.

    What I can't understand is why they want Russia and China etc. to be able to buy on the cheap. It would seem that you would want a price spike to bring out the large sellers and make the large buyers of gold to pay more. In a way it seems not to make sense.

  16. Thanks for the feedback. Gold is the mortal enemy of Governments who control a fiat currency system. They don't care about maximizing profits, they care about price capping. It's insanity and will not end well for them.

  17. This is a tad OT, but here it is for your consideration.

  18. Gently, Dave, gently!

    ZeroHedge is an excellent source for information, as is your web site. I find errors on both web sites on occasion-but never never never anything as bad as what I'd find on the MSM. ZeroHedge has many many contributors, some of which are bankster trolls. I am certain that you have to weed out many such comments, correct? ZeroHedge also seems to attract those who wish to 'manage' how we perceive the world around us. Perhaps you have found such a post on ZeroHedge. Make it better if you can-but don't make it unfun. Ain't nobody figured out a way to make bucks using the internets-and some of us error-prone humans are doing it 'for the cause.' Redneckistanian

  19. LOL. Yes and I qualified my commentary in my last sentence. ZH has a lot of good aspects. But unfortunately it has started to shift in some sensationalism in order to attract readers.

    I don't appreciate their brash presentation of their pm material and thus they needed to be swatted down for that.

  20. I do have accounts with Turk's Goldmoney and Bullionvault. I've not funded them yet as I'm on the fence with the concept. I would go the GoldMoney route over BV if I did. If not, will just use CEF of PHYS instead.

    I like APMEX and have Tulving on my radar. I know a lot of folks like Gainesville Coins as well.

    I'm focused on the gold sovereigns for sure. Maples, Eagles, Buffs, Krugs, Phils...Which ones would you recommend Dave? Thanks for your time.

  21. Dude, if you go with a non-possession physical account, go with Turk.

    Let me say this. As long as I've been doing this, the hardcore goldbugs have ALWAYS said the only ultimate way to buy/invest in gold is to take possession of the physical and hide it.

    I now fully understand why that is the case. Unless you have the dough to invest in a fund that keeps the bullion on your behalf in a legitimate private commercial depository, just man-up and buy the damn stuff and keep it well-hidden on your premises. Anything short of that is rolling the dice.

    We tell ALL of our investors that in addition to investing in their fund, we will help them (at no charge) acquire the appropriate amount of bullion for personal possession.

    I like Phils because they have the lowest premium of the .9999 coins. Any of them are fine.

  22. Thanks Dave, I appreciate the help. Happy 4th to you and everyone else here who lives in the United STATES of America.

  23. Dave, I'm convinced you are exaggerating. ZH provides good source of informations, for free and with no ads. So what source do you suggest to masses to obtain news from?

    All considered, they are blessing and your insult is rather pointless; everyone deserves right to be not 100 % accurate, esp. when MSM release almost always propaganda, lies and brainwashing.

  24. stibot, ZH had engendered a cult-like following and I guess you are part of that. that's cool. but don't take everything they publish as gospel. Tyler couldn't trade his way out of a paper bag and he is mostly clueless about how the precious metals market operates. Everyone who has been following this market for as long as I have has known for many years that AIG was the chief manipulator in silver until they collapsed.

    I guess unfortunately you did not read my whole post because at the end I tipped my hat to ZH's reporting, in general.

    Be weary of the man who builds monuments to himself. To an extent, Durden has built ZH into a monument.