4 Signs A Financial Plumbing Clog Is Close

It's gonna be a big mess, whenever it happens. And whenever "whenever" is, it's close.

• Gold open interest at a two-year high.

• COT figures show record shorts for market maker bullion banks.

• Basis trade deepens further, record volume in repo markets yet again last night.

• 10Y yields break below 50WMA.

There are many signs suggesting we are nearing a crunch. Here they are, as I see them, in no particular order.

1) Gold Open Interest Reaches Two Year High

The current state of the gold market suggests to me that it's being set up for a smackdown in the short term, probably triggered of some rumbling in the financial plumbing. Either that or the dam is breaking. At some point it will be the latter, but I don’t see that right now. For stackers it makes little difference because premiums even out the actual price you pay and they are very low right now. I'm also hearing from others in my circles that coin sales are down and the physical market is sleepy, despite gold hitting all time highs yesterday. That suggests dollars are in demand right now, and tightness is increasing, despite record highs in gold.