Coming up Craig Hemke of the TF Metals Report joins me. Craig speaks out on the technical situation for the metals, whether or not the economy his headed towards a recession and reveals something that could ultimately break the paper markets for gold and silver and get us back to free and fair pricing for the precious metals. Make sure you stick around for a tremendous interview with Craig Hemke, coming up after this week’s market update.
Q&A with Craig Hemke
Mike Gleason: It is my privilege now to welcome in Craig Hemke of the TF Metals Report. Craig runs one of the most highly respected and well known blogs in the industry and has been covering the precious metals for close to a decade now, and he puts out some of the best analysis on banking schemes, the flaws of Keynesian economics and evidence of manipulation in the gold and silver markets.
Craig, it’s great to have you back and thanks for joining us again today and, how are you?
Craig Hemke: Mike, I’m fine thank you. It’s always a pleasure and I appreciate the invitation.
Mike Gleason: Well, I know time is short here so we’ll get right into it. First off, we’ve been seeing a decent little correction in the metals over the last few weeks although they’re rallying a bit here today and now that the Fed decision is out, as we’re talking on Wednesday afternoon. Gold and silver were probably due for a pullback after a very strong first eight or nine weeks of the year. So how do things look technically speaking here, Craig, after this recent pause and the uptrend? Do you think we’re still in the midst of a bull run and has this just been a healthy correction? How do you see things here?
Craig Hemke: Well, I guess the biggest picture possible we pulled back these couple last weeks, once it became obvious that the Fed was going to hike rates again, and we pulled back in a manner, very similar to what we saw in November of 2015 and November of 2016 before the previous two rate hikes, and now here we are in the hours immediately following the hike, we’re rallying. Now, the last two rate hikes that came in December of ’15 and December of ’16, gold bottomed the very next day and began to rally quite strongly. Now, here we apparently bottomed earlier today, and are rallying quite strongly this afternoon as Mother (Fed Chair Janet Yellen) is just slaughtering the dollar bowls with all of her press conference and everything else.
Well, I guess the biggest picture possible we pulled back these couple last weeks, once it became obvious that the Fed was going to hike rates again, and we pulled back in a manner, very similar to what we saw in November of 2015 and November of 2016 before the previous two rate hikes, and now here we are in the hours immediately following the hike, we’re rallying. Now, the last two rate hikes that came in December of ’15 and December of ’16, gold bottomed the very next day and began to rally quite strongly. Now, here we apparently bottomed earlier today, and are rallying quite strongly this afternoon as Mother (Fed Chair Janet Yellen) is just slaughtering the dollar bowls with all of her press conference and everything else.
From a technical standpoint, both gold and silver have recently seen a bullish cross of moving their 50-day moving averages up through their 100-day moving averages, so that’s pretty important. And if price can now get above that 50-day – and we’re making a run at it here on Wednesday – if we can get above there and close there on Friday, there’s going to be a lot of folks who will start getting very interested in the metals from a technical standpoint.
Mike Gleason: Craig, you regularly discuss just how manipulated and phony the gold and silver future markets are. You’ve been doing that for years, people called you out as a conspiracy theorist for it. For some reason, lots of folks couldn’t accept the notion that banks employ a combination of crooked traders and high frequency trading machines to dominate these exchanges. Now, in recent months however we’ve seen smoking gun evidence in the form of documents and recordings from Deutsche Bank where traders working at various banks colluded with one another to rig markets and cheat their own clients. WikiLeaks published a memo sent to the Treasury Department for the future exchanges were launched in the early ’70s.
Officials were clear regarding their intent for those exchanges. They sought to create enormous price volatility and to discourage physical ownership of the metal and they’ve succeeded. We can be pretty sure that the bought and paid for regulators will manage somehow to ignore the evidence and fail once again to hold any bank to account, but Deutsche Bank has agreed to pay roughly 100 million dollars in damages and other banks involved could be in even bigger trouble. So, my question is whether you have gotten any apologies from the people who labeled you as crazy for talking about manipulation? And then give us your thoughts on these revelations… can the civil courts help us get to more honest markets and is there any fixing this broken and rigged system, Craig?
Craig Hemke: Yeah, I tell you, no I haven’t gotten any apologies, Mike. I guess we should start there and I’m not expecting any, but that doesn’t matter. Most of those folks that always claim that the gold and silver paper markets were free and fair were just simply trolls for the establishment. I remember one guy in particular was a particularly virulent troll and he admitted to be a former Deutsche Bank trader. Okay, well you can connect the dots there, right? Look, none of this is surprising and obviously, it’s nice to know as we’ve always said, it’s conspiracy fact, historical fact, not some kind of whacked out conspiracy theory.
But nonetheless, it’s the market that we have to deal with for now, where this trading of these paper derivatives is somehow allowed to discover a physical price. I mean, it’s nonsense. It’s a fraud, it’s a sham, and until those paper markets break because they don’t have the physical to deliver into the demand, it’s pretty much what we’re stuck with. Where this all goes from here in terms of the manipulation is – we have to let the process play out. When this news first broke, heck, it’s almost a whole year ago, Mike. This was back in what? April or May last year when we learned that Deutsche Bank was being pressured by the German regulators to settle. A lot of folks thought that was going to change things overnight.
No, it’s not going to change things overnight but it is a huge change because in all of the history of class action lawsuits, alleging price manipulation and seeking damages, they’ve all been thrown out by the courts before we could ever get to the process of legal discovery. Well, not only are we moving