Monetary Metals Supply and Demand Report: 9 Nov, 2014

A continuing curse—nay, scorn even!—was heaped upon the gold and silver faithful this week. Those who cling still to faith, faith that gold and especially silver will go up, have been grievously injured. Gold fell far below $1140 on Wednesday. Silver got down to $15. At least that’s how gold speculators—those who bet on the [...]

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11 replies
  1. pherisse says:

    Gold is still in bearish compared with dollar so gold/silver ratio is increasing, and your analysis is giving about the same results.

    By the way, I think that most your “hate emails” are coming from the facts that you rejoice so much with each gold and especially silver fall compared with dollars and when the gold/silver ratio is rising.

    • Keith Weiner says:


      I am not really rejoicing. I am trying to make a point that a lot of people need to hear (and there are new people subscribing every day). Gold does not go up. It’s the dollar that moves.

      This touches on the quantity theory of money, which people feel shows that if the dollar supply increases then it must be worth less. And the price of gold “should” go down. If it goes up, there must be manipulation.

      • Greg Jaxon says:

        “…price” [of an over-printed dollar] /in/ “gold should go down.”

        Keith has already inverted his worldview by bookkeeping in gold.

        In trying to appreciate the “fundamental” valuation of the dollar, we Americans are stymied by our Legal Tender laws’ monopoly power. Elsewhere, US dollars are not obliged to trade at a 0 or infinitesimal “spread”. Is there a way we can measure how well the dollar is performing the “money function” (vs the monetary metals) by observing the spreads and currency futures markets?

        I.e. can we know the basis and the co-basis of dollars (stated as dimensionless percentages, of course)? You’ve already explained that the MM bases do not form an “interest rate” – but is it safe to translate USD interest rates into basis/co-basis numbers for the sake of comparison?

      • cmgde1 says:

        The evidence clearly shows that large scale manipulation is ongoing via JPM and many others. It is to everyone interested in gold accumulation to keep the price low. But look at what the price did earlier this week when the Comex shut down for a half an hour. Sorry, I won’t elaborate more on what everyone already knows. What JPM and others are doing is illegal, but I’m happy to let them keep doing it.:)

  2. JamesToronto says:

    If the junk spread narrows, it means price of junk moves closer to tbonds. If so, credit is easier. A wide spread suggests credit is tigher, or so I thought. So the junk spread falling in your chart suggests easier credit along with a lower silver price…. I must be missing something?

    • Keith Weiner says:

      James: I should have spelled it out more explicitly. I draw the spread the other way (it was JNK – TLT). So it’s the price of junk bonds minus the price of Treasurys (well, using ETFs). As the price of junk bonds falls relative to Treasurys, credit is tightening.

      • Greg Jaxon says:

        I shared Mr. Toronto’s curiosity about this.
        I’m not sure the JNK-TLT spread measures “scarcity” of credit.
        The convergence of junk and treasury debt seems to tell a host of other amusing stories. It could be that junk is simply becoming “monetized” (far more liquid), or it could be that dollars are becoming less money-like (junkier?).

        • petter_w says:

          I also wondered about this. Anyway – the chart is interesting because it looks like there is a short squeeze in the dollar is underway. Effectively, everyone who is borrowing dollars is short it. If this continues then the Central banks will start to print. Which will not work. At some point – the scheme collapses and with is all the funny Money currencies. This is when gold and silver according to John Exters liquidity pyramid will have rise. For now, gold and silver are falling into the toilet because no one expects inflation. This is a wrong belief – expect a collapse of the banking system and a currency crisis.

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