MONDAY AFTERNOON MARKET ALERT
Way to go, ADMIRAL SPROTT! Less than two weeks ago, our fearless leader announced a $349 million offering of PSLV, the Sprott Physical Silver Trust, and since then gold rocked $5.00/oz higher, Cartel suppression and all. This afternoon, post market close, the Sprott Physical Gold Trust, or PHYS, announced an overnight offering of up to $200 million, to purchase PHYSICAL gold tomorrow morning.
Unlike the PSLV offering, which was open-ended as to pricing, the PHYS offering memorandum states the deal will be priced at $15.19-$15.24/share, slightly below today’s closing price of $15.34/share, which would push its market cap up to $2.3 billion. Today’s closing price represented a 5.0% premium to Net Asset Value, so the deal (as has been the case for EVERY offering of the five closed-end bullion funds PHYS, PSLV, CEF, GTU, and SVRZF) will be accretive to current shareholders. Last year, PHYS also closed an offering very near the previous day’s closing price, so I am highly confident this deal, too, will be a smashing success.
As I described in last week’s RANT, Eric Sprott is a man on a mission to destroy the Cartel, much like myself but with the financial firepower to back up his knowledge and passion. Do not underestimate the extent of damage he can cause the Cartel, which in my view is on the verge of breaking down to start with.
MONDAY MARKET WRAP-UP
Per the title of today’s RANT topic, in line with what most people anticipated, the Cartel started yet another week off by attacking PMs at the open of the thinly-traded Asian markets on Sunday night, a long-standing tactic utilized to wilt SENTIMENT during a time of the day gold and silver investors have been conditioned to fear following a decade of systematic, manipulative abuse. To which I respond, “Is that all you got?”
As you can see below, all KEY ATTACK TIMES were utilized today in varying degrees, starting with the pre-emptive Sunday night walk down, followed by the WATERFALL DECLINE at EXACTLY 3:00 AM EST, a hard cap of gold’s rebound rally at EXACTLY the 8:20 AM EST COMEX open, a second WATERFALL DECLINE when gold attempted to go positive at EXACTLY the PM FIX at 10:00 AM EST, and of course the high tick of the day at EXACTLY 12:00 PM EST, the “cap of last resort.” So for those of you that think gold was “resting” or “consolidating” last week’s sharp gains, I say BALDERDASH! Show me a decline that does not occur at the same times of day as ALWAYS, and I’ll agree with you. But until then, give me a break, particularly when that same KEY ROUND NUMBER of $1,750/ounce is again being heavily defended.
EACH and EVERY Cartel “supplemental tool” was utilized today, starting with the Dow / Gold x 2 ALGORITHM we saw all morning when the Dow had the nerve to actually open down 100 points. You see, a 100 point Dow decline is the PPT equivalent of the Cartel’s 2% rule. In other words, while PAPER gold is essentially NEVER allowed to rise more than 2% in a single day (let alone 1%), the Dow is no longer allowed triple-digit declines, even though 100 points only equates to a measly 0.75% at current prices.
READ THE FULL NEWSLETTER
MONDAY EVENING REPORT
Late this evening, Jim Sinclair sent an urgent email about an impending event of great importance that MUST be heeded, on which he completed a special interview with the Ellis Martin Report about. The event involves the potential treatment of the impending Greek default by the ISDA, or International Swaps and Derivatives Association, the trade group responsible for deciding whether or not a “credit event” is considered a “default” under the terms of myriad credit default swap, or CDS, agreements.
If you remember the late October “Greek 50% haircut” deal – which triggered a huge equity rally, but NEVER happened, the ISDA determined a 50% debt write-down to NOT be a “default,” in perhaps the biggest farce in market history. Of course, the ISDA is a trade association managed by the very firms that create derivatives and swaps – namely, the five banks responsible for writing 97% of ALL CDS swaps – JP Morgan, Goldman Sachs, Citibank, Morgan Stanley, and Bank of America. I know, you really can’t make this up, a trade organization with the power to declare its mistakes “non-events,” but that’s the world of criminality we live in.
READ THE FULL NEWSLETTER
TUESDAY MORNING COMMENTARY
After all that occurred last night, this morning is a bit anti-climactic. As noted above, the mantra of the day remains PRINT MONEY and MANIPULATE MARKETS, and as usual the Dow futures are higher. Overnight news is relatively thin, as has been the case during the recent period of market “LOCKDOWN” by TPTB, unless you believe Israel warning Iran of an imminent invasion, i.e. the potential commencement of World War III, is not newsworthy.
I also see Venezuela finally took delivery of its 160 tons of gold, formerly stored in London. I can only imagine the hoops the thieving BOE had to jump through to secure such metal, which I’d bet dollars to doughnuts was sold or leased years ago to illicitly hold gold prices down. Better yet, will they be able to honor the next batch of gold repatriation demand, such as the imminent summons of Holland’s 613 tonnes? And, for that matter, will the New York Fed be able to do same when they, too, are demanded gold from supposed custodial accounts of foreign central banks?
According to this article, markets are somehow “juiced” by the idea of a Greek default – er, 70% write-down – as if no one, such as the BANKS that own this debt, will be impacted. Oh wait, I see, “LTRO 2” is coming on February 29th to save the day, with the current consensus that an additional €1+ TRILLION will be PRINTED by the ECB – aside from non-stop, “off balance sheet” funding from the Fed “swap facility” to cover up these bank losses and enable carry trade “profits” to pay BONUSES with. No, this won’t end badly.
TUESDAY MORNING BREAKING NEWS
The PHYS press release just emerged while proofreading, and it was a BLOW OUT deal, of $303.8 million priced at $15.19/share, compared to the initial offering range of “up to $200 million, including overallotment, at $15.19-$15.24/share.” As it turns out, the deal will be $349 million if the overallotment is exercised, EXACTLY the same amount of Sprott’s PSLV silver offering last week. As Eric Sprott has emphasized for some time now, silver sales continue to be 1:1 on a dollar basis with gold sales, and thus the current 51:1 gold: silver ratio will not last much longer. I agree whole-heartedly, as both ADMIRAL SPROTT and myself believe the gold:silver ratio will fall to AT LEAST the historic ratio of 15:1, perhaps significantly lower.
PROTECT YOURSELF, and do it NOW!
SUNDAY NIGHT SENTIMENT
Sunday afternoon, when the world’s working classes are finally relaxed at the tail end of their weekly “48-hour vacation.” During summertime, the barbecue is smoking, and in the winter the TV blaring with the mesmerizing sounds of pro football. For most, the last thing on one’s mind is financial markets, unless of course you’re a die-hard Precious Metals investor. Gold’s 24 hour per day trading liquidity is a comforting thought, but as all “goldbugs” know, the Cartel does its best handiwork in the wee hours of the night, particularly 3:00 AM EST when no markets are actively traded.
On average, gold trades higher during the Asian trading hours, excepting the SUNDAY NIGHT OPEN, when the Cartel often aims to “set the tone” for the day by smacking the market lower. Here in Denver, it is roughly 4:00 PM when Asian gold starts trading, so I can see quite early if a Cartel scheme is in action, such as the SUNDAY NIGHT PAPER SILVER MASSACRE on May 2nd, 2011, below.
I have not pored through all the Sunday night charts as in past RANTS, particularly the three COMEX GOLD MANIPULATION PICTORIALS published in 2011, links below. However, I can tell you – from a decade of experience – that the ONLY time in the overnight session (pre- 3:00 AM EST, of course) that gold typically falls is the Sunday night open, and I’d venture gold rises more than 0.5% at the Sunday night opening less than 2% of the time.
That said, there have been extended periods of “Sunday night excitement,” such as when gold is an extended up move based on news the Cartel has trouble “managing,” such as S&P’s downgrade of the U.S.’s AAA rating on August 6th, 2011.
When such periods occur, the Cartel still attempts to start most weeks with a “negative bang,” in this case below at that same pesky, KEY ROUND NUMBER of $1,750/ounce! However, under such circumstances Asian buying often overcomes these attacks quickly, as we saw the Sunday following the U.S. debt downgrade, below.