Despair at the metals broker looks like capitulation

Despite apparently record demand for gold and silver coins, the price of metals keeps falling and Bill Holter writing for Miles Franklin (a metals broker) wants to know why.  Look folk.   In the long run, the true fundamentals matter.  The problem is, you never know what the true fundamentals really are.  For example, despite the fact that buyers to sellers of silver coins are stated to be 50:1 in German markets, and despite that fact that US mint sales of silver have been particularly strong, silver is plunging like it needs to unstop a stuck up toilet.

It is in fact a bit arrogant to believe that someone knows the short or even medium term fundamentals of such a large and leveraged market place.  For all I know, some massive, undisclosed/unregulated (AKA OTC or Over The Counter) derivative is collapsing behind the scenes and whoever is getting screwed by it is selling massive amounts of gold and silver in order to make a margin call.  Again, the OTC derivatives market is stated to be between 700 trillion at the conservative end and 1.4 quadrillion at the high end.  In truth, there is nothing conservative AT ALL about 700 trillion dollars worth of shadow banking transactions!  It is the most liberal, leveraged kind of gambling ever to have infected this planet.  With that kind of notional value and, I'm sure, really shitty liquidity, all kinds of fat tail events are possible including the stupid selling of massive amounts of metals below the cost of production.

So again, the next time someone tells you that something can or cannot happen because of the fundamentals, tell them that there are no such thing as reliably knowable short to mid term fundamentals, at least not for Mark and Patsy (which in this case is me and everyone reading this blog).  Eventually the fundamentals of fake money will catch up with it as well,  but so far it has lived more than 100 years in the US, ever since the Federal Reserve was conjured up in 1913.

Still, Holter's despair is palpable and I see it as yet another sign that a significant bottom is very near for the M+M.  The key is to wait until the wave count says the herd is all run out because the wave count is the only thing that I know that works at all to help determine the timing of the turns (or the fact that your model is wrong and you need to exit the trade and re-think).