CONDITION RED: The Financial System Is Now Out Of Control

Precious Metals by SRSrocco

To get an idea just how broken the system has become, here is the Dow Jones chart of Monday’s trading activity from Zerohedge’s article Behold: Insanity:

After the Asian markets received a financial enema Sunday night as the Hang Seng fell more than 1,200 points and the Nikkei nearly 950 points (at their lows), the Dow Jones experienced one of the strangest trading days ever.  Of course, the Dow Jones suffered large single-day losses before, but never the sort of volatility as it experienced this Monday, August 24th.

I would imagine this type of volatility can be explained by the HFT – High Frequency Traders that have now taken over the majority of trading in the markets.  This type of stock market insanity wouldn’t have taken place 10 years ago as the system still had a great deal of retail traders.  Thus, human retail trading activity would move slower and take more time in mulling over information. 

The Dow Jones moved over 4,500 points (up & down) on Monday.  This should be a warning to investors that serious dislocations in the market are coming.

Beginning Stages Of A Run On The Retail Precious Metal Market??

Ever since the middle of June when Greece threatened to leave the European Union, sales of gold and silver bullion exploded.  Investors purchased a record 176,000 oz of Gold Eagles in July.  This was the highest monthly sales figures in several years. 

Even though the rate of Gold Eagle sales declined in August compared to July, they picked up significantly over the past few days surpassing 30,000+ oz to a total of 68,500 oz for the month.

While sales of Gold Eagles have been the strongest in several years, Silver Eagle sales continue to beat all records.  Not only are sales of Silver Eagles 12% higher at 31.5 million oz (Moz) compared to 28.2 Moz during the same period last year, total sales for June, July and August are a staggering 14.5 Moz.  If the U.S. Mint continued to sell Silver Eagles at the same rate over the past three months, total sales would reach an annual 58 Moz.

We also must remember, there is still another U.S. Mint update on August 31st.  Most of the time, the U.S. Mint updates its sales figures on Monday, but this week they waited until Tuesday.  If they update their sales figures on Monday, we could see total sales for August at 4.8-5 Moz.