Posts Categorized: Bill Holter

Posted by & filed under Bill Holter.

Zerohedge put out an interesting article yesterday: Why “Nothing Matters”: Central Banks Have Bought A Record $1 Trillion In Assets In 2017. Please note this is $3.6 trillion annualized rate so far this year.

Of particular note is this chart:

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What jumps out at you should be the quadrupling of the their balance sheets since 2007 from $3.5 trillion to over $14 trillion.

So what exactly does this mean? Basically, to keep the system from imploding upon itself the world’s central banks had to “create” over $10 trillion of liquidity by purchasing assets onto their balance sheets. This is puts forth a “chicken or the egg” question, or actually two as you will soon see.

First, central banks have been buying everything …including stocks, to prevent the markets from turning down. It is safe to say they understand that with the leverage and derivatives outstanding they cannot allow markets to correct (or God forbid actually enter bear markets). They understand the “size” of the derivatives markets is so large, NO ONE can withstand a downturn and actually be called upon to perform their “insurance payments”.

So the central banks have a problem here, they are now “forced” to purchase assets to prevent market downturns but one should ask the question “who will they eventually sell to”? The answer of course is “no one” because there is no one large enough to take these assets off their books. Chicken or the egg question number one; did the central banks create the bubble going in to 2008 or did the bubble of 2008 create the current central bank balance sheet bubble?

While you are pondering that question, let’s look at another, much more important chicken or the egg question. Central banks “create money” via credit. They are now buying all sorts of assets from “pristine” (sovereign debt) to “ugly” (junk debt to get it off of bank balance sheets) to truly “stupid” (stocks). Also, please keep in mind central banks for the most part are the issuers of currencies, their balance sheets and what they are comprised of “backs” the currency. They have put themselves in the position of buying assets they know they can never sell. They can never sell because there are no buyers large enough to buy, AND, they would then be creating the downturn in markets they originally denied if they ever stopped buying let alone selling assets.

With the above in mind, what does this mean for the currencies they issue? Won’t they be forced to continually purchase ever more assets to prevent markets from collapsing? And doesn’t an ever larger balance sheet mean money supplies expanding and thus more currency units outstanding versus basically static amounts of real goods available? Do you see where this is going?

OK, chicken or the egg question number two; the central banks by definition create inflation (via currency and credit), does the continual creation of their “product” (fiat) in order to prevent the destruction (deflation) of their product …actually destroy their product? Simplified, because “money” MUST be created at ever greater amounts to avoid deflation, are the central banks forced to ultimately destroy their currency? The answer of course is YES. Central banks are forced in the exact same mathematical manner as any Ponzi scheme …to issue currency in an exponential manner.

What has actually happened was entirely predicable since 1913. At some point the U.S. (and thus the entire world as the dollar is the reserve currency) would reach debt saturation by definition. We did so in the 2006-2007 era. The only balance sheets left to “reflate” at that point were the sovereign treasuries/central banks themselves. They by result have destroyed their own balance sheets over the last 10 years. It is only a matter of time until this is fully recognized by the investing/consuming public and thus lose confidence in the central banks themselves. At this point, central banks will destroy their own currency by doing what they do …creating currency and credit. From here, the faster they run, the faster the boogeyman catches them!

Standing watch,

Bill Holter

Holter-Sinclair collaboration

Comments welcome bholter@hotmail.com

Posted by & filed under Bill Holter.

I started my summer hours this week and rode early to beat the heat of the day. When I left at 7:00 am gold was up $1.20. When I returned I saw silver down .28 cents and gold off $4 so I figured some sort of shenanigans. The dollar was weak when I left and weaker upon return so it had nothing to do with the dollar. Then I read this…$3billion worth of gold sold …again for perspective, this is nearly 4% of global production or almost two weeks worth. And again, who would sell like this if they wanted the best price for their gold?

Fast forward 30 minutes and gold is now positive for the day. Over the last few weeks we have seen weakness early in gold and strength toward the close. This is a big change. A much BIGGER change will be if gold can hold positive for the day and maybe even close stronger. This would be if my memory serves correctly, the first time a massive amount of paper raided the market which then closed the day positive. Also keep in mind how many “new” contracts (fake supply) it has taken to keep gold’s rise in check.

As Jim and I have said, we are at major inflection points in many (all) markets, a strong gold close today followed by a breakout from here would be a very bad signal for paper markets. An out of control gold market will spell doom for paper markets and lead to the plug being pulled! Monitor this closely!

Standing watch,

Bill Holter

Holter-Sinclair collaboration

Posted by & filed under Bill Holter.

I thought I would put today in perspective for those throwing in the towel on gold and silver. 23,000 silver contracts were sold in just a few minutes this morning. This equates to 115 million ounces. For perspective, there are only two countries in the world that produce this much in one year, Mexico and Peru. China roughly produces 115 million ounces but the production is not normally sold onto world markets.

Looking at this from a “company” perspective, no single company even comes close to producing 115 million ounces. In fact, the three largest silver producing companies in the world, Fresnillo, KGHM Polska, and Goldcorp only produce about 125 million ounces combined over a year’s time.

Today’s action, selling 115 million ounces of silver is an impossibility in any “real world” governed by any real rule of law because of the above production numbers. As I have said for years when these raids occur, “no one has this much silver to sell, and no one would be stupid enough to sell in this fashion if they were trying to get the best price possible for themselves or their client”.

What you witnessed today was an act of total desperation not to mention stupidity. “They” have absolutely tipped their hand and done something so obvious and egregious that they have probably ended their own “game”. You should understand one thing and one thing only from today, buy as much physical silver as you can possibly afford and have it delivered out to you or a non bank vault.

I say this because “game over” has arrived and the day is quite near when gold and silver will not be attainable at any fiat price. They will be bid with no offer. Ask yourself a couple of very simple questions. Could anyone enter an order to purchase 100 million ounces of silver and actually have it filled and real silver delivered? During a time of stress in the financial system, how many different individuals/corporations/money managers/countries have the ability to swing a $2 billion trade? 1,000? 10,000? More? Money is sloshing around a system with no foundation and stumbling like a drunk with a .3 blood alcohol level, all that is needed to completely wipe out and default these paper markets is “pocket change” to many, many entities. “Fear” will be the initial trigger, what do you suppose the emotion will be when it is understood gold nor silver is available for purchase? Please use your God given common sense, what was done today is not a possibility if the market was real, it is not!

Standing watch and calling bullshit on this one!

Bill Holter

Holter-Sinclair collaboration

Posted by & filed under Bill Holter.

Bill Holter’s Commentary

Now they call for Jeff Sessions to resign …significantly upping the ante. As I wrote yesterday, a race is on between either trashing the Trump administration or indictments and perp walks. My money is on truth bombs that shock the world to its core!

Key G.O.P. Lawmakers Say Jeff Sessions Should Recuse Himself From Russia Inquiry
March 2, 2017

WASHINGTON — Congressional Republicans began breaking ranks on Thursday to join Democrats in demanding that Attorney General Jeff Sessions recuse himself from overseeing an investigation into contacts between the Trump campaign and the Russian government. Those calls came after the disclosure that Mr. Sessions himself spoke with the Russian ambassador last year, in seeming contradiction to his testimony at his confirmation hearing.

The partisan furor that broke out with the Justice Department’s acknowledgment of the contacts late Wednesday began to take on a bipartisan sheen as the controversy spilled into Thursday morning.

The House majority leader, Kevin McCarthy, Republican of California, said on MSNBC’s “Morning Joe” that Mr. Sessions “needs to clarify” his testimony and that he also thought Mr. Sessions should recuse himself from Russia-linked investigations.

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Bill Holter’s Commentary

The last of the rough riders… and maybe the end of “Bundy standoffs” for at least the next four years?

New Interior Secretary Zinke Rides Horse To Work On First Day
March 2, 2017

As Politico’s John Bresnahan first noted, anyone scoping out the Dept of the Interior today was greeted with an odd sight:Trump’s new Secretary of the Interior, Ryan Zinke, rode a horse to his first day of work at the department’s Washington, D.C., headquarters, Thursday morning. Zinke wore a cowboy hat, boots and jeans for the Thursday morning ride, which preceded a welcoming event in the lobby of the building.

Photos tweeted by Zinke and by Interior’s Bureau of Safety and Environmental Enforcement show the former Navy SEAL riding with U.S. Park Police officers. “Honored to stand with the brave officers of @USParkPolice – these professionals put their lives on the line for us,” Zinke tweeted.

Why a horse? The transportation choice aligns with Zinke’s choice to brand himself as a conservative and conservationist in the mold of President Teddy Roosevelt, a strong advocate for outdoor recreation who established numerous national parks. As The Hill adds, Zinke was Montana’s sole House representative before the Senate confirmed him to the Interior post Wednesday. Vice President Pence swore him in Wednesday night.

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Bill Holter’s Commentary

$2 billion worth of silver sold? …if I’m not mistaken, total global silver production in a year is about $15 billion. In layman’s terms, almost two months of global silver production was sold in minutes. Again, “who” actually has this amount of silver and “who” (what idiot?) would ever sell in this fashion and not be fired for destroying their own price to sell at? Clearly an effort to keep silver from crossing its 200 day moving average just over $18 but nothing to see here, especially by the CFTC. The day will come when gold and silver cannot be had for ANY amount of fiat, make sure you are sitting on your stack when that day arrives!

Silver Is Collapsing On Massive Volume
March 2, 2017

At exactly 1130ET (as Europe closed), someone decided to unload over $2 billion notional of silver into the futures pits…

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Over 23,000 Silver futures contracts suddenly puked into the market as soon as Europe closed…

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