Around mid morning on Friday Augsut 15, we heard news that the Ukraine had “destroyed part of a Russian convoy”. The stock market immediately dropped nearly 200 points, Treasury bonds were bid 10 basis points lower, oil was higher and gold which had been hammered $20 lower earlier ran back to unchanged.
I do want to mention that “the sale” which knocked gold down was some $2 billion worth of COMEX futures. $2 billion, this would amount to a little more than 1 week’s production from ALL mines in the ENTIRE world. Again, “who” would ever sell their product in this fashion where they receive THE worst price of the week? The real laughter is that this was not even “gold” which was sold, the sale was merely COMEX futures.
This game however will shortly end as the Shanghai exchange comes on line which will be a 100% physical exchange. China has a history of meting out harsh and should I say “physical” penalties for financial crimes, selling something that does not exist would fall into this category. This further display of naked short selling is not what I’d like to write about today.
The “announcement” of the destruction of a Russian convoy had all the makings of being the spark for WWIII. As soon as I heard the “news” and saw the markets react, my first thought was “this is the beginning”. Were it true, the situation would have already escalated in every fashion. The escalation would have certainly been militarily but also financially. What really happened? Anything?
Here it is more than a day(s) later and what do we really know?
Was there a Russian convoy destroyed?
Was there even a Russian convoy on Ukrainian soil?