Posts Categorized: Bill Holter

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In an effort to put the Martin Armstrong saga to bed, I post below quotes and links to two articles he put out in 2010 and 2011 just before being released from prison. Please read not just the quotes provided but his full articles as they are both excellent in content and logic. His 2010 article sounds a lot like “Bill Holter” as I have done this math and logic several times for readers over the years. Back then he said “$5,000 gold is “VERY CONSERVATIVE” …while he now says it will be as high as gold can go. In the second article he takes on “manipulation” which he has since changed his tune on.

I would simply ask “why”? Why has he done a 180 degree turn in his thought process? Why did his “change” of heart begin as soon as he was released from prison? Why do people even follow him now as his logic and reporting of history is flawed? I have no doubt he is a brilliant man as he was a pioneer of the derivatives industry, but how brilliant is it to claim that gold was devalued in 1934 …and then go on to explain “why” it happened?

“I have been conservative in what is possible for the years ahead. I have given a number for gold of $5,000 that is VERY CONSERVATIVE. If we take the US gold reserve 262 million ounces and we divide that into the national debt into $14 trillion ignoring the rest of the world, that yields a price of a staggering amount $53,639 per ounce. Even taking the world official gold reserves dividing that into $14 trillion ignoring the rest of the world, we still end up with $15,873 per ounce.” …Martin Armstrong, Nov. 21st 2010

“The sharp spike rally was in line with a Phase Transition in Silver – NOT gold. This has been distinguished by a virtual doubling in price since January. Anytime a market doubles like this in the last few months going into a high, it is the kiss of death. Silver, of course, has not broken out above its 1980 high as did gold. This is largely due to the fact that silver remains the most manipulated precious metal of the entire group. It is routinely played with by the NY crowd and anybody you says such things is immediately attacked with venom. Silver is the playground for the CLUB”…Martin Armstrong, May 2nd 2011

It is clear to me with the above writings, Mr. Armstrong had a full grasp of logic. I would love to hear from him now as to why his logic was wrong …before he saw the light of day as a free man?

Standing watch,

Bill Holter

Holter-Sinclair collaboration

Comments welcome bholter@hotmail.com

Posted by & filed under Bill Holter.

Jim and I have received many panicked calls and e-mails regarding Martin Armstrong’s latest article. In it he again claims gold will collapse to below $1,000 per ounce and thus the fearful communications.

In this very short article, Armstrong questions whether India will begin gold confiscation suggesting door to door searches for “tax evaders”.

We posted two articles late last year refuting his poor logic and efforts at rewriting history. In the first one, we refuted his claims that markets are not manipulated. Since then of course we have had many settlements by large banks for just that…MANIPULATING MARKETS. Last week saw Deutsche Bank admit to manipulating the gold market and agree to pay a $60 million fine (peanuts) and offer some seriously damaging evidence in the form of captured communications. As they have turned state’s evidence and squealed on others, this will become very interesting no doubt! we would simply ask, are banks in the business of handing out “free money” in the form of $billions if they’ve done nothing wrong? JP Morgan, Citi, DB and many others have coughed up large fines. Was this “largesse” or was it to head off the decapitating legal procedure called discovery?

Then a week or so after the first article, we were forced to pen another one,. Mr. Armstrong truly erred when he made the statement gold was “de”valued against the dollar in 1934. It was no slip of the pen or tongue, he actually tried to rationalize and “explain” how gold was devalued versus the dollar. The fact is, gold was REVALUED over 70% higher versus the dollar in 1934. The claim that “the dollar” was the best performing asset during the Great Depression is outright bogus and why we give zero credence to anything the man now says. We write this today because so many readers have again had the wits scared out of them.

The “timing” is peculiar. India’s (Modi’s) timing of their boondoggle by demonetizing 86% of their paper currency cannot be a coincidence. The action came right on top of India’s wedding season where their international gold purchases are seasonally strongest. It was our opinion right from the start, the action was directly taken to cut off and mute their physical demand and offtake from world markets. The only problem is that it backfired miserably as reports of physical gold changing hands internally within India at $3,000 per ounce and more.

Who couldn’t have seen this one coming? When you cut off supply …and autonomously tell people their “savings” in paper currency have been ostensibly wiped out, what would you expect to happen? Supply and demand still works, price rose as supply has been cut and true demand has had a fire lit under it. If you wanted proof that gold is still seen as a safe haven in the midst of turmoil, here it is! Meanwhile, India’s real economy has crashed unlike nearly anything seen in modern history. Giant Foxconn is eliminating 25% of their workforce due to the monetary insanity. Trucks are littering the sides of the road as the cash does not exist to purchase fuel. The disaster is just beginning, coming days and weeks will surely see “hunger riots”.

A similar question was raised about China over the weekend by Yra Harris regarding an article Kitco ran. What will happen if China decides to stop their importations of gold? Jim and I talked at length about this and then spoke with Yra to get his take on our conclusion should this happen. Wouldn’t the ban of imports cause a huge drop in paper gold prices but not necessarily cash price? The answer is yes, no, and we may well see the “mechanism” to reset global markets if we do.

Looking at China following India’s lead was an interesting thought process if you follow it through to the end. The fear of crashing price by “cutting off demand” is logical only if you stop the process before finishing the to the final answer. You see, were China to preclude gold imports, the immediate reactions by COMEX and LBMA would most probably be a crash …maybe even a $500 crash! Would that matter? Again, yes and no but stay with me to the end. “Price” in the West may crash, but “what” exactly is it the price “of”?

Paper prices may very well crash …while price for real gold within China goes to the moon. We are already seeing large spreads existing between Shanghai and COMEX, these would only get larger and expose one market as …not really a market. Will the Chinese look at COMEX prices and shun physical or in the ground gold? Or will they look at what real gold is changing hands at inside of China and decide to “arbitrage” it out of the ground (and from Western vaults) and into their own market?

This is the crux of what we theorized. Yes, it is certainly possible to see paper prices collapse from here and possibly sparked by China banning imports (temporarily). Set in motion would be paper prices dropping and physical markets rising (something I have written about since 2007 and spoke of since early 2000’s). China (official state) would then “purchase” and demand delivery of ridiculously cheap gold (while there is still inventory left to deliver). As Jim put it during our last weekend interview, “you could see COMEX gold at $10 offered and no bid with Chinese cash markets $5,000 bid and no offer”.

China (Russia and India) will ultimately “make price” as they are the physical markets and collectively have more gold than the West (please don’t reply with GFMS or World Gold Council numbers as they are laughable). A “reset” of global finance is certainly coming, the only questions are how, when and how much? We believe the event will be very rapid, probably over a weekend but China could force a reset via Mother Nature and arbitrage in a slower manner. Real gold will find its way into India (and China should they ban imports) simply due to the human characteristic of profit motive and black markets. Once Western vaults are emptied, who do think will “make price”? Those who don’t have it but suddenly want it, or those who have it and always wanted it? If we were running China, this is the exact mechanism we would use to remonetize gold and silver …and remonetizing metal is exactly what we believe they have wanted to do for many, many years!

To finish, Martin Armstrong was wrong about gold during the Great Depression even with the benefit of recorded history. Now, he could possibly be correct regarding the direction of his invention of derivative contracts … but we believe he is entirely wrong about the underlying physical product. One thing is certain, should the current paper versus physical pricing spread continue and expand, Netjets will become a great investment as a freight carrier for arbitrage!

Standing watch,

Bill Holter,

Holter-Sinclair collaboration

Comments welcome bholter@hotmail.com

Posted by & filed under Bill Holter.

Growing up in the 1960’s, I can still remember hearing and reading about Russian propaganda. While I am certain some of what the Western press reported was “spun”, even a 10-year-old could see through much of what Russia was trying to portray to its people.

Fast forward to present day, we seem to have switched places. The current mainstream media reports defy nearly any and all logic on a daily basis. Reporting has obviously been very poor for many years and it really did not matter what the subject was. Economics, finance, geopolitics, home grown politics, it has not mattered, logic has been turned on its head. I could go through example after example but would now require a book …or more likely a “series” of books. Using just one example to illustrate the lunacy, the U.S. now has 95 million OUT OF THE WORKFORCE and thus no longer counted as “unemployed”! Where is the logic here? Mainstream media reports it (under their breath) while cheerleading the lowest unemployment rate in decades. The White House and Wall Street both report “strong” employment with glee. The fact remains, our true unemployment number as calculated back in the day of “Russian propaganda” is somewhere around 20% …

We just had an election here in the U.S. that I’ve dubbed as a rejection “fake news”, fake polls, fake values, fake everything. My first thought was “hooray for the rule of law”! What is truly disturbing (especially after the election), the House quietly passing a bill targeting “Russian propaganda” websites .

I say “disturbing” because the lame duck House of Representatives was elected two years ago to eviscerate Obaminationcare along with many other “executive orders” …and did absolutely none of what they promised. Why would the House pass this now? Why would they not wait until the newly elected Reps and Senators (not to mention new President) arrive? What can they possibly be thinking other than a failed (thwarted) arrival to Washington of Mr. Trump?

Getting into the “meat” of what they are trying to pass, it is most obvious they are trying to legislate away TRUTH! In essence, they are trying to say and I paraphrase, if you disagree with the official story, you are Russian propaganda. Never mind that these “propaganda sites” document, footnote and use rock solid logic in their work …they are “fake news” and should be ignored or worse, JAILED! What a travesty Mr. Paul Ryan!

Reported today, the website http://www.nakedcapitalism.com is fighting back and is considering filing suit against and demanding retraction from the Washington Post. I find it beyond lame when the likes of WAPO and NY Times resort to labelling obvious truth as fake news. This is surreal on so many levels it is beyond words.

Shifting gears but in keeping with the subject of “truth”, let’s look at just one market, gold. For years it has been said central banks have no reason to and would never manipulate gold. GATA has over the years posted reams of hard and easily connectible evidence showing this is not true. In fact, Deutsche Bank agreed to a wrist slap $60 million fine for doing just this, manipulating the gold markets. This will be followed by other firms and most likely larger fines (as DB rolled over first).

The chart below is from an excellent article last week, which shows offtake from the Shanghai exchange.

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With just one month left in the year, Shanghai has withdrawn close to 2,200 tons (28 tons just this last Friday). If you take Chinese and Russian supply out of the equation as they do not export, total global production of gold is roughly 2,400 tons. Shanghai/China have been purchasing nearly all global production of gold over the past several years. This does not account for Indian demand which has historically been another 1,000 tons per year or thereabouts. Nor does it account for the rest of global demand which has been brisk from Europe, the U.S. and elsewhere. Where exactly is/has this excess demand being met with supply? From where is this gold coming from? The obvious answer, and one of common logic says it can only be coming from where it exists (existed), Western vaults!

We could look at other markets like the credit markets where interest rates went negative …at a time debt ratios were never worse. Or, we could look at equity valuations at a 98 percentile in historic valuation levels. The point is this, markets do not make any sense from the standpoint of any fundamental logic in all of history!

Many say that anyone claiming “manipulation” or “rigged markets” are just sore losers because they are wrong and need something to cover their errors. The tactic now by government/mainstream media/”official finance” is to label obvious truth as lies. MSM has become so desperate they start stories by claiming “fake news” as their proof and refutation of facts and logic. Government is apparently trying to legislate away “truth” if it does not agree with the official story by labeling websites as Russian propaganda. What proof has been offered showing any connection to any of these websites to Russia in any fashion? The answer of course there is none whatsoever other than being said “it is so”. This course of thought and action is no different than the child caught with his hand in the cookie jar asking “who are you going to believe, me or your own lying eyes”?

To finish, and to pre answer the legion of trolls sure to jump on this article, please answer these questions. Do you believe mainstream media is or has been reporting news truthfully or in any fair or balanced way? Do you believe the media is separate and autonomous from government? I would remind you of the 10’s of 1,000’s of e-mails hacked from John Podesta. The only response to date has been “these were illegally stolen”, NEVER have they been claimed to be false. If the e-mails then are not false (several people have already resigned because of the revelations), then we know for an absolute fact that polls, debates, and other news to “affect perception” are outright bogus and propaganda!

I would then ask, if there has been a coordinated effort to “shape” public consciousness, why would these people leave markets to their own to possibly discredit their desired stories? What good would it do to report economic growth, low interest rates, low unemployment and basically “economic and financial nirvana” if the Dow was trading at 6,000, interest rates at 7% or gold trading at $5,000 per ounce? I would suggest the “propaganda” was ramped up to unbelievable levels BECAUSE THEY HAD TO SUPPORT the picture of where markets were and are trading! I believe the “LIE” began in the markets and then had to be supported with the story, not the other way around.

So there you have it, please explain why markets must be free, fair and unfettered if we know for a fact that mainstream media and government have massaged, spun and outright lied to the public in so many documented instances? If you do answer this, please do so as an adult. Do not reply saying “because” or “because they say so”.

MSM, Washington and Wall Street have burned their credibility …yet people still ask why the Dow is 19,000, gold is $1,175 or the dollar still spends …? So simple a caveman could figure this one out!

Standing watch and not being fooled,

Bill Holter

Holter-Sinclair collaboration

Comments welcome bholter@hotmail.com

Posted by & filed under Bill Holter.

Here we are again, just six days away from a major COMEX gold (and silver) delivery month with a huge outsized amount of contracts outstanding versus deliverable inventory. For a background, COMEX holds 2,083,000 (nearly 65 tons) of registered gold. This amount is much higher than it was last December when it stood at a miniscule 152,000 ounces (4.7 tons).

Since May of this year, something has drastically changed in the monthly amounts delivered. For all of 2015, only 51 tons were delivered which amounted to about 4.25 tons per month. If you recall, many months would arrive at first notice day with a huge amount of contracts open, only to see the contracts evaporate before the close of the delivery period. I postulated then and still believe, contract holders were offered premiums to “just go away” and not take delivery. I cannot prove this but you must ask, why someone would FULLY FUND their account to take delivery and then not follow through. It makes no sense other than if they were enticed not to take delivery after placing the full amount of funds in their accounts to settle delivery.

So far this year, 191 tons have stood for delivery, 168 of those tons since May. The average delivery since May has been over 24 tons per month with only two of the seven months being a traditional delivery month. June and August amounted to nearly 93 tons alone. The change since May has been astonishing. Rather than contracts being “bled down” each month (enticed by premiums offered?), nearly every single month has had more standing by the end of the month than were at the beginning of the month (nearly double in some cases). Another big change is, previously, the bulk of deliveries would be withheld until just before the end of the delivery period. Now, massive deliveries are being made on the 2nd, 3rd and 4th delivery days of the month. Please remember, it makes no sense to “wait” to make a delivery as storage fees add up for each day …it seems to me that it is now known that many contract owners cannot be enticed with premiums!

So why has this begun to happen, why are more contracts demanding delivery and why are they jumping queue and opening more contracts during expiration? I believe it is simply because there is either a greater “need or desire” for gold. If I had to guess, I believe the new and different demand is in large part a function of the Shanghai Gold Exchange opening in September. Immediately after opening, we saw close to $4 premiums for gold (versus COMEX and LBMA pricing) and around .50 cent premiums for silver. These premiums are now recently much higher! For the last few weeks these premiums have grown to the $10-$12 range for gold and over $1 for silver. The premiums shot up on Monday to $20.33 for gold and $1.35 for silver. This is obviously more than generous enough to allow massive arbitrage to occur.

As a side note, I have been asked why we are not seeing arbitrage en masse? Simply put, I believe there is a great risk here where you sell something for delivery without knowing positively you will be delivered on the buy side. Should the game end, an arbitrager might be contracted to deliver something (sell side) they cannot attain in a runaway upside market (because of the failure to deliver on the buy side). Curious that these large premiums exist as they should never exist …unless the players do see risk in a supposedly risk free trade! The premiums are now getting to large to ignore and look more like the elephant in the room.

So where are we now for December expiration? Currently with only six trading days left before FND (first notice day), 217,000 contracts representing 21.7 million ounces versus 2.08 million registered to deliver. At the very same day last year, there were only 133,000 contracts outstanding or a difference of 84,000 contracts (8.4 million ounces).

While we certainly cannot say the COMEX will default and not be able to deliver for December, we can say the numbers are much larger …AND so is the pressure (via arbitrage)! To again put this in perspective for you, the entire registered category holds well less than $2.5 billion worth of gold. I would ask you this, “how many $2.5 billion events have occurred”? The answer of course is too many to count and they happen every single day in many markets, and all over the world. The spread in silver is getting close to a 10% number, how long will the spread be allowed? The problem of course is this, when the arbs do come in to close the gap it will create buying. The buying will require delivery as the sell side in Shanghai will demand metal for their purchase. This poses the problem, COMEX inventories cannot meet Chinese demand.

To finish, please keep in mind that the global credit markets are now experiencing extreme liquidity tightness. Previous “credit events” were ugly and all ended the same way …with more debt and more currency units issued. As we have seen in India, as gold has not been available since their recent kamikaze currency move, gold was changing hands at $2,900 per ounce on Friday and $3,600 over the weekend due to lack of supply. Ask yourself, at what dollar price will gold be available should someone (or collectively) put up $2.5 billion to clean out COMEX? Yes I know, COMEX is not the only market in the world. But a run on COMEX will be a run everywhere and will result in finding available gold nowhere. A “run” can start for any number of reasons. It can be “intentional” or not. The problem from a visual standpoint is this, the amount of physical gold behind the paper gold edifice is like a “BB” in relation to the financial Earth. If you don’t believe the global debt can ever be paid back in current currency values …dig into this one as it’s even more lopsided, paper gold can never be delivered by the real thing as the real gold simply does not exist!

That will do it for this holiday week as I plan to take a little time off. Unless something really big breaks, Jim and I do not plan on our weekly interview and will resume next week. We wish you and your families a Happy Thanksgiving!

Standing watch,

Bill Holter

Holter-Sinclair collaboration

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Bill Holter’s Commentary

This is an excellent read and very well done!

CIVIL WAR II – FOURTH TURNING INTENSIFYING (PART I)
November 16, 2016

As we enter the final stretch of this vitriolic, deplorable, venomous, propaganda saturated, deceitful, rigged presidential election spectacle, it becomes painfully obvious this Fourth Turning is careening toward bloodshed, bedlam, confrontation, and civil war. The linear fixated establishment, who fancy themselves intellectually superior to the irredemables, are too blinded by their sociopathic, increasingly audacious subversion of the Constitution, to grasp the level of rage and disillusionment of a white working class that has been screwed over for decades.

As the Wall Street shysters frantically accelerate their embezzlement of what remains of middle class wealth, with the Fed and the corporate media propagandists as their wing-men, the country devolves into a corporate fascist state. The disposition of the nation grows dark like the sky before an approaching deadly blizzard. As passions boil over and violence portends, this Fourth Turning hastens towards a bloody decade ahead with an uncertain climax.

If you think this is just hyperbole, you either haven’t studied history or your cognitive dissonance and normalcy bias prevent you from seeing the unavoidable societal altering clashes, which occur like clockwork on an eighty year cycle, when the portents are right in front of your eyes. Historian Arnold Toynbee’s great war cycle that arise every 80 years or so, aligns perfectly with the Fourth Turning generational theory. Great wars occur when the generation that doesn’t remember the last catastrophic war ascends to leadership of the country.

More…

Posted by & filed under Bill Holter.

In response to Federal Reserve & Clintons Doomed-Clif High
Posted November 14, 2016

Jim/Bill,

I can’t wrap my head around the housing call.

“In short, High says your home will go down in value while you are paying much more for supplies to live in it.”

If the cost of a front door or new siding approaches the cost of a home, wouldn’t the home price also rise?

Put another way, if the cost of a snickers bar approaches the cost of a home, wouldn’t that force the home price higher?

Unless, of course, the carry costs of the home (insurance, RE Taxes, utilities, etc.) become so onerous that home affordability drops.

Am I correct?

Another thing, the following flies above my head. No clue as to the reasoning.

“They are worried about the destruction of all of this debt by dollars pouring back into the U.S. The debt is actually being paid off by all this money coming back into the U.S. It’s not an actual increase of actual cash. It is a destruction of all the derivatives . . . It is debt destruction for sure. “

Any simplification?

Yours,

CIGA Wolfgang Rech

Wolfgang, I believe he speaks to the ability of others to purchase your home. It does not matter what it costs to build something if no one can afford to buy it…

Bill

Bill has explained it well. Might I add if your house is selling in dollars, what are they going to be worth?

Jim