"The world is ours, we are its lords, and ours it shall remain. As for the host of labor, it has been in the dirt since history began, and I read history aright. And in the dirt it shall remain so long as I and mine and those that come after us have the power.
There is the word. It is the king of words— Power. Not God, not Mammon, but Power. Pour it over your tongue till it tingles with it. Power.”
Jack London, The Iron Heel
The Comex had an options expiration today for the precious metals, and they certainly rose to the occasion.
If you wondered why such an unusual thing happened, it is because the October contract is not all that important, but it has some technical attractions given the option 'hook' which it offers.
There was some intraday commentary about why it happened as it did here.
I admit that it went much higher than I thought it would, but it was well worth it as a bet. Sorry, but even in my old age I cannot resist the occasional wager, the call of the wild. lol.
Much more importantly, the physical bullion situation, or what some have been calling 'the float,' seems to be approaching some sort of crossroads, or even the elusive denouement that many of us have been long awaiting.
Gold is a bit easier to understand. The underpricing of gold and the stubbornly high demand from Asia is sucking the paper markets dry of their underlying bullion.
Stated a bit flippantly but generally correcly, you underprice something that people want, and they ignore your clumsy PR campaigns and assorted devices, and empty your shelves of it. Wow, what a concept.
I keep wondering why so many people are missing this, even among the 'pros.' I am sure quite a few are parroting whatever they are instructed, but I do think that that quite a few are being misguided by the familiar. These are the ones who were deeply into the paper trade, knowing all its jargon, its nooks and crannies. They see the same old rubbish going on, but cannot being to imagine that incredible changes are taking places in other parts of the world of which they know relatively little.
So ignoring or deriding the great sea change in global monetery exchange that some call the currency war, they are fooled by the familiar.
"In times of change learners inherit the earth; while the learned find themselves beautifully equipped to deal with a world that no longer exists."
Eric Hoffer
Silver has a tightness of its own, but it is manifesting differently. The Bucket Shop is well supplied of silver, but other places of refuge for the bullion bullies, the central banks, are out of that inventory altogether.
The first chart below is one of the most important I can imagine for you to understand. What it is basically telling us is that the demand for physical bullion from Asia has been overrunning the highly leveraged paper markets of NY and London, having taken all that the scrap and new mining outputs can produce.
This is resulting in abnormally high leverage in paper claims and a relative scarcity of gold for immediate delivery.
I am sometimes stunned by how many other sites refuse to even link to this sort of thing, how many are made so insecure by the thought of something different. I have been shut out of some of the finest places, although they usual make up some lame excuse for it, lol. Most do not want to leave their comfortable harbors of the familiar, and put out upon the troubled seas of thought. That is what these kinds of generational change are all about.
So the option expiration is over. Let's see what the follow through, if any, looks like into the weekend and next week.
Slowly, but surely, the times, they are a-changin'.
Have a pleasant evening.
Related: Shrinking Supply of Physical Gold In London For World Demand
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