"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Saturday, March 12, 2011

Trader Dan on King World News Weekly Metals Wrap

Click on the following link to tune in to my regular weekly radio interview on the Weekly Metals Wrap with Eric King of King World News.



  1. It's cool how Eric's voice rises with excitement when he introduces you! Loved the WW2 retracement analogy he came up with and how you illustrated it further with respects to the shorts having to move the line back with their forced covering. Liked your point about the grumblings by a small group of US politicians about a higher yuan being the elixir that solves the economic woes and how if this were to happen, bottom line, you would be hard pressed to find buyers for US Treasuries at the end of it all. Very educational and informative show today, Dan. Want to add some silver, even though I took a bath in 2008 with it. Waiting for the next pullback and then I'm in like a dirty shirt, close my eyes tight and hold on.

  2. Dan,
    So you don't have much faith anymore in the COT data?

  3. roo -

    I do not understand this data of the last two weeks as in my mind it does not make clear where the buying that has been coming from; buyign of sufficient size and force to drive a market nearly 400 points higher over those two weeks. I am especially doubtful that hedge funds have been net sellers of silver during that time frame. I am hopeful that things might get cleared up next week - meanwhile I am waiting.

    As far as the COT data goes - this is the only market that has me concerned and only for the last two reporting periods. Other than that, the data has always been fairly reliable and made a lot of sense. Right now there is something that does not jive with what I view as the market action.

  4. hi Dan - Heard you mention the notion of the Chinese buying less Treasuries. WHat do you make of this Forbes article?:


    from the article:

    What they should be looking at is the recent surprise revelation that China’s readjusted US Treasury holdings; they have jumped from 32% of China;’s monetary reserves to 42% of its reserves– an increase in holdings of $262 billion. A major portion of this $262 billion was purchased for China in the UK, apparently by the Bank of England, in order to hide China’s hand.

    China is buying Treasuries- not selling them. It now owns about $1.160 trillion of US Treasuries. This is a major development– totally under-reported in the financial press except by the Financial Times, where I got my start in the 1960s while a Goldman Sachs risk arbitrageur.

    The bond market recognized the significance of China’s BUYING Treasuries instead of selling them. Hello!. Treasuries rallied the last 2 trading sessions as the yield on the 10 year declined from 3.53% to 3.43%, my top gfuru on bonds, Robert Smith of Smith Capital, reported to me today.

  5. the sailor;

    There is no conspiracy of silence here. As I have reported and written about this subject, once a year the Treasury adjusts its holdings of US Treasury data. they have been doing this for years and nearly every year they show a big move in the categories between the UK and China. The number of Treasuries held by the UK drops and the number held by China goes up. The bond market did not rally because the Treasury made this annual adjustment. that is sheer nonsense. It rallied because crude oil prices have convinced many that the global economy is going to slow. Not only that, the unrest and social upheaval in the MENA region had guys moving to bonds and out of equities because they fear that crude oil could rise even further. The long term affects of crude are inflationary but near term it acts as a tax on the economy and slows growth and thus money has rotated out of stocks and into bonds for the time being. Then throw in the fact that the FEd is buying nearly $25 billion worth of the stuff each week and there is your bond market rally. Some of these guys are ridiculous.
    one last thing - this data is dated and is old by at least two months. As such it is always backward looking. I maintain that if growth in China were to indeed slow somewhat (and i am not sure about that) and more importantly, if they let the yuan rise, they are not going to need to purchase as many US TREASURIES if the balance of trade surplus that they hold with the US actually decreases. that is a fact so what we have to now do is to just watch and see how things shape up on that front.

  6. Thanks for the detailed reply. Been reading your work on jsmineset.com for a while, and now here on your blog. Thanks so much for all that you do.

  7. Brilliant stuff Dan! Also, great to hear your friend Jim Sinclair on KWN.....what a wealth of knowledge you guys share. You have no idea how helpful this is for a small investor/speculator like myself. Nice to be able to keep an eye on the support/resistance levels you set.....it sure helps with entry points!
    Doug Casey is saying the same thing you are, with regards to the tsunami in the bond markets. I know you can't give investment advice, but do you have any general thoughts on inverse treasury ETF's (rising rates)?


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