Re: Tonight. I Have No Idea.

It's Sunday in the U.S., a little after 1:00 EDT. The Globex opens in about five hours. There seem to be quite a few people who are interested in my opinion regarding how the metals will trade tonight and tomorrow. Frankly, I have no idea.

First of all, I've been on the record saying that I didn't think a ratings downgrade was coming. Oops. Shows you what I know. I am still stunned that it happened. Of course it needed to happen and AA+ is still too generous. A or A- would seem to be more fitting. However, since there is no principal risk in U.S. government debt (the Fed can print all the money they need to pay off bondholders), AA+ is OK, I guess. Now on the other hand, if S&P started taking inflation risk into consideration and began to factor in that you're really only getting 50c on the dollar back in principal purchasing power...well, lets just say that U.S. debt would be relegated to junk status. Regardless, U.S. debt is now rated AA+ and the effects of this will be far-reaching. We'll go into this in greater detail later this week when I have more time and can think more clearly. (For now, I'm a little hung over and I need a nap.)

As it pertains to the PMs...There is NO WAY that this news is not bullish. Extremely bullish. In the intermediate and long term. What you don't know about is tonight and tomorrow. As we saw last week, when everything else is being sold, the PM "baby" often gets thrown out with the bathwater. Gold should open UP at least $50. It should trade UP $100 tomorrow. Will it? Again, who knows? Gold may open higher and then get instantly battered lower in a global rush for liquidity.

Just watch. U.S. debt gets downgraded but the POSX and the long bond will both probably trade higher in a flight to safety. Oh well, it doesn't really matter. Like I said, gold may be down tomorrow. Who knows? But what I do know is this: Gold will be higher a month from now. It will be higher six months from now and it will be higher still a year from now. In that context, what happens tonight is of no consequence. 

I'll try to have an update this evening, after things have been trading for a while. Until then sit back, relax and enjoy the fireworks. TF

11:55 pm EDT UPDATE:

Too tired to type but I wanted to give you this update with these levels to watch overnight and into Monday.

paper_8-7pmgold.jpgpaper_8-7pmsilv.jpg

Turd nite nite now.

495 Comments

Ojibwemowin's picture

No matter what happens it

No matter what happens it will be interesting!

esib100oz's picture

I got the popcorn ready. And

I got the popcorn ready.

And if silver goes low enough... the credit card !

Ford Rep's picture

How could one know.

I can only hope this might be a good opportunity to pick some discounted miners and trade a little gold for a little silver.

underwaterfrog's picture

Historic

Times we live in. Just overjoyed I'm not sitting on the sidelines with my mouth open and have prepared.  Thanks for everything you do Turd.  Very unfortunate however that alot of hard-woking, good intentioned people will get hurt no matter their ability (in) to comprehend or face the realities regarding the den of thieves that govern our financial world.  One can only hope that these offenders will (at the very least) endure the same amount of suffering  as the population at large.~

cpnscarlet's picture

Accuracy and Precision

New Here -

Engineers know very well the difference between accuracy and precision. Anyone in PMs is accurate that the prices will be higher in the future. But it takes a real expert (and luck?) to know precisely when things will occur. Even Jim S was not terribly precise about 1650 timing, but he sure has been accurate for many years.

TF - My opinion since I started reading the PM blogs many years ago is that you are the most imprecise PM big-blogger, but still thoroughly accurate AND entertaining. Me? I sold VXX Thursday AM to buy more SIVR. In due time, we'll see how imprecise I was/wasn't.

Rocket Scientist

beardeus's picture

I predict that gold hits

I predict that gold hits $1,700 tomorrow.

cris's picture

An interesting thought from Ted Butler

He has referred to this in the past as the Full Pants Down:

Invariably, at times when the price of silver sells off, commentary is issued that suggests that silver investors are selling to raise money to buy gold, or in order to put money into other assets. Aside from the fact that silver investors rarely sell collectively at all (except in the paper market), even if they did sell, the amount of money that could possibly be raised is so small as to have little meaning to other markets, like gold. Even if every investor holding the one billion ounces of silver bullion did sell at once, the potential $40 billion proceeds would amount to less than 1% of the gold bullion in existence. I’m also waiting for the stories that suggest that silver bullion investors are selling in order to buy recently-downgraded Treasury securities or stocks where the total value of silver is a small fraction of 1% of those markets. Even if silver investors did sell en masse, the proceeds would have little impact on other markets like gold, stocks or bonds.

 

But what about the reverse; what if a very small number of gold or stock or bond investors decided to buy silver for reasons of relative value or safety? One percent of gold’s $5 trillion bullion value is equal to $50 billion, more than all the silver bullion in the world. World stocks and bonds are measured in the many tens of trillions of dollars and the smallest fraction of one percent would swamp the silver market. My point is simple – there is such a small amount of silver in the world that this is a one-way street. Selling all the silver in the world wouldn’t amount to anything in terms it going into other markets; but the selling of the smallest percentage of any other market to put into silver would have a dramatic impact on the price of silver almost beyond comprehension. It is this basic dynamic that lies behind the greater relative returns favoring silver in the long run relative to gold and other asset choices.

 

Bay of Pigs's picture

Flight to safety?

We always hear that term and I guess as long as people have faith in the USD, it will apply.

I say times are changing and it won't apply before too long. Gold will soar as people begin to realize the implications of the "weak dollar policy" going forward.

Good riddance Greenspan, Rubin, Summers, Bernanke, Paulson and Geithner...your legacy will be one of being financial terrorists and traitors to your own country.

Basturd Toadflax's picture

as always

BTFD.   keep stacking.

cpnscarlet's picture

Gutsy

$1700? Gutsy Call. However, a wager over the internet is dubious at best, alas.

beardeus's picture

cpnscarlet

I stand by my prediction.

Interesting note from APMEX.

*Attention – Due to the uncertainty in the global precious metals markets, we will not be able to accept any additional orders until the global markets re-open in Asia. We expect to be accepting orders around 6:15 pm EST. Sunday August 7th, 2011, following the market open.

So It Goes's picture

A global view from Martin Armstrong

 
This is an interesting global view from Martin Armstrong's most recent note.  
 
"The Doom & Gloomers are cheering S&P’s downgrade,  but in reality, it will  have no real affect in the 
total mix. The dollar is the RESERVE CURRENCY and lowering the credit rating normally means higher 
borrowing costs for the debtor nation. However, as I have pointed out, about two-thirds of central bank 
reserves are in dollars thanks to the residual of Bretton Woods that is alive and well. The size of the US 
debt and economy along with its deep capital markets plays a crucial role as the cornerstone of global 
finance and this simply cannot change absent revising the entire world monetary system. S&P’s decision 
shows how unsophisticated they are and the decision was highly parochial. It cannot change the 
demand for dollars  since everything trades in dollars. So no matter how much China and Russia 
complain, oil, gold, wheat and just about everything else trades in DOLLARS because it is the RESERVE 
CURRENCY!"
 
This does not speak to the price of the precious metals - they are going higher for sure - but he does make a great point about how the whole system will have to change from a global point of view.
 
Keep stacking.
silverbleve's picture

more from that same Ted Butler Article

It is precisely for nervous times like now that precious metals investors bought gold and silver in the first place. Therefore, it is illogical to predict that gold or silver should sell-off. Yet, that is exactly what may occur, especially in silver. That’s not a prediction, mind you, as if silver does sell-off, it should represent a compelling buy and I do plan to personally buy speculative longs in that event (especially call options which I started buying Friday.)

He usually cautions against using any leverage, interesting!

 
Sgt.Iria's picture

Interesting Spreads on Gold

I use bullion vault. They trade 24/7 no down time. This weekends spreads are shocking http://www.bullionvault.com/

Its useful to get a heads up on how this niche marketplace is reading the open.

Prices in USD first = Sell NY | Buy NY | London sell | London buy | Swiss sell / Swiss buy

1,667 1,821

1,695

1,804 1,679 1,711

C&P sucked.

Red Pill's picture

It's ok Turd..

You don't have to know everything, nobody can know what's coming, this is absolutely uncharted territory. 

could be black monday, or a big anticlimax, a metals moonshot or a brutal caning. 

just keep doing what you do so well ;) 

Michael's picture

...paper is paper...

The Revolution has already begun in Europe...

I thought that WW III started in August 2002, and the global revolution started on February 15th, 2003 (peacefully, I might add) but then I turned on the TV, and realized that most Americans are barely aware that a global depression has begun.  As designed.

Ol' Michael

"...paper is paper and money is money..." - Thomas Paine

agNau's picture

ZH take on metals open, from the sellers point of view.......

Which I find intriguing.

http://www.zerohedge.com/news/apmex-hiatus-until-asia-open-or-why-you-better-already-have-your-physical

The S&P is the youngster that exclaimed "The Emporer has No Clothes!" for many the thought had never crossed their minds in our modern day version. But for a % of more well informed investors,(readers of this site) the thought process's follow along the lines of "I never thought they would do that!" My first thought was WHY? Wall Street ignores facts like this all the time, politicians both ignore and deny. The great masses of citizens(baaaa, baaaaa)do not even understand how this is a problem if they understand it at all. So, why was it done, and more specifically why was it done now? I have entertained the thought that the EE would create as much chaos and instability as possible with their money powers throughout the world to come out on top once again when the mess overwhelmed the world, and Then "reset" things so to speak from the catbirds seat.
If you think about the consequences to date, the Euro "competing" currency is on the ropes. Germany, the sugar daddy of Europe, is cutting the money off. How long before dissolution of the Euro, and chaos in the Eurozone. In the beauty Pageant of currencies, the ugly Dollar is the best "date" for now. (I know, Swiss, new Zealand) but Dollar still commands sizable market. It seems like the scene on the deck of the Titanic, as the passengers run to and fro seeking the high ground.
Any thoughts?

johnnydrama's picture

Stocks down PM up

This feels like another case of stocks (including PM stocks) down and PM up...

Shill's picture

I hear that TURD

(For now, I'm a little hung over and I need a nap.)

I am as well got trashed last night Turd lol relaxing big time.

Bay of Pigs's picture

Sinclair interview

For those who missed this on the last thread. My advice is to send it to everyone you know, especially your family.

beinki's picture

There dropping like flies

Prize Fighter's picture

Greenspan on MSNBC Meet the

Greenspan on MSNBC Meet the Press now.

"The US can pay any debt we have because we can just print more money." - Alan Greenspan

lol

Uh, what if your money is debt?

Yooper Rick's picture

Waiting for Asia open is high

Waiting for Asia open is high tension. I'm sitting on the edge of my seat like when the monster is about to make his entrance in a horror movie.

Goofy's picture

Greespans comments  25min out

stingbee30's picture

In these environments, you need to throw away the technicals

Today, it is all about fundamentals and what is happening around you.  You have global reckoning happening on both sides of the Atlantic.  You have the continued Arab spring which adds more stress and anxiety to the the world investor.  You have protest in Israel, and riots in the UK.  This Arab spring is the start of new movement to fight inflation, unemployment, bad leadership, greed, and injustice.  This is going to reach other shores, it is just a matter of time...

Smart money is telling you that smart investors are slowly losing interest in the global currency market.  You might have a few countries like Canada, Singapore, Australia who have better balance sheet, but there is not much liquidity.  For smart investors, Gold is becoming an alternative means to protect their falling assets and currency debasement.  In the US, we don't have the visionary leadership who will go behind their close-minded ideology, and start focusing what is good for America, not the lobbyist and special interest groups.  We are hijacked by oil companies, banks, wallstreet firms, the strongest lobbyist from Israel, two wars without a sound resolution, and war-mongering lobbyist who still wants to keep the defense spending.  We have to cut ties from our inflated egos and superficial claims to military dominance.  We have to start thinking about America first, and then military spending.  We need to cut defense spending by 40-50% just to survive.  We have 50 million Americans on Food stamp, and about 25% or so underemployed/unemployed/discouraged workers.  We have to understand the reality.  We are not a super power like we are believed to think.  It is just on paper.  We have expensive military toys, but not enough money to help states continue battle unemployment benefits and other social causes.  We were brains washed to think that Socialism is evil, and Capitalism is good.  Well, today we are seeing what happens when we allow Capitalism at the expense of Social Democracy.  Capitalism is only working for the few and at the expense of the masses. (btw, I'm not a proponent of Communism because it never works, sounds good on paper, but once again you give too much power to the government).  We have to focus on a path to social democracy.  It shouldn't be all about interest rates and how much i can leverage my investments.  The Futures market in Oil is clear indication of greed and leveraging, and it is not about real delivery.

Back to Gold and Silver Story: Today, stop looking at the charts (yes, it gives us numerical benchmarks to follow).  Today, it is all about what is happening around the world.  It is not just the US, but Europe, the Middle East, two wars.  I think you get the picture.  There is a lot of anxiety and stress in the world.  The classic safe-havens of US Treasury and dollar is  becoming a thing of the past.  Silver and Gold always had real value based on our history.  It is a real hard assets.  So, on Monday, we could easily see Gold passing the $1700 mark, and killing all the shorts with the buy-stops.  Silver is going to follow it's big brother lead because Silver was used as a currency a while back.  It really doesn't matter whether the dollar goes up or not.  The reality is that it is for traders to make a few bucks.  But, Silver and Gold will de-link or de-couple from what Oil is doing or Dollar.  The reality is that smart investors are not going to pile-up on more dollars because the currency is worthless because it is not backed by anything.   The idea of "Full Faith and Credit worthy" of the US has been challenged, and it is going to get worse.  The idea that America was the savior of the financial market or the place of last resort has come to a climatic phase.   There is always hope that as humans we will eventually learn from our mistakes and wake-up.  We are in dire need of visionary leadership who don't prescribe to ideologies that seem outdated.  The two party system is not working.  It was working back then because people still believed in compromise and crossed their ideological base for the common good.  

The Euro/European Union sounded good on paper, just like communism.  But in reality, it is a dysfunctional organization with so many different countries and ideologies.  Germany the most stable country in Europe is supposed to save all the other countries.  France (taking the lead) is another joke.  In summary, the World problems are far much bigger than our daily charts and daily resistance or weekly levels.  The Macro economic fundamentals are far more important.  So, do me a favor, stop looking too much at the charts.  You will be handsomely rewarded in the PM's area because of the global financial Tsunami, not because of charts.  The World Story is much bigger than my charts or your respective charts.  Good luck...

treefrog's picture

what is a "dollar?"

from the coinage act of 1792 (u.s.)

"DOLLARS OR UNITS--each to be of the value of

a Spanish milled dollar as the same is now

current, and to contain three hundred and

seventy-one grains and four sixteenth parts

of a grain of pure, or four hundred and

sixteen grains of standard silver."

...just so we remember what we're talking about, a dollar is 0.7734 troy oz of fine silver.

all that other stuff (fednotes etc) is just bankster paper and/or politicians' promises.

¤'s picture

Pretty exciting times...

...for a lot of bad reasons. We all did what we thought was best and we'll have to wait and see how the market reacts. Hopefully we profit from our wise investments and are way ahead of the curve.

Hopefully the PM's  go up steadily but not too fast.  I think were past the point of no return to lower prices for awhile unless we get a violent  market sell off on a temporary basis and a quick recovery from the BTFD. Just this week JPM came out and spoke of how gold was a great thing to invest in blah blah blah. I don't know what to think about that.

This could all turnaround very quickly if the EE was so hemmed in like we thought. What if actually needed to go bullish or long  and ease up on the short side. If that happens in even the slightest amount then ...whoooosh!... blast off!

We definitely have been living and watching the surreal political world and seeing things we almost can't believe. What if the EE just lightens up on their control a bit because they have to and things go pro- PM's from the investment bank side of it?

The turnaround in market sentiment could happen sooner and it will have to happen at some point if we get past the awareness phase to the manic phase like we all think it will someday.

Maybe it's sooner then later and the turning point for them to go pro-gold was the first US credit downgrade. The EE is in charge f this. They'll make a decision at some point to extoll the virtue's of gold for their profit and benefit when some event happens. Maybe it was the S&P downgrade? 

Paladex's picture

Re: $ as reserve currency

To Martin Armstrong's point about the reserve currency status of the dollar providing some marginal safety ... Somewhat under the radar, the IMF has begun making noise about creating a new "SDR" reserve currency, which will basically be a token that can be cashed in for any country's money.

http://money.cnn.com/2011/02/10/markets/dollar/index.htm

This is actually a BIG deal, because currently anyone with billions of dollars to stash buys US Treasury bonds (as Martin Armstrong says, "You can't put that kind of money in a bank.") If they suddenly have a less-volatile alternative, Uncle Sam is going to have a hard time peddling his wares.

Interestingly, the New World Order conspiracy folks have been predicting a global currency for a while, as a first step to global government. How long before the non-negotiable SDR tokens become the ONLY negotiable currency?

(originally posted in the forum  http://www.tfmetalsreport.com/forum/1926/here-comes-one-world-currency )

 
NOMAX's picture

My take on Silver Prices

Tomorrow, who knows.  It's anybody's guess what direction silver price will go.  In the real short run I'd hazard a guess that silver trend's higher, but with extreme swings due to extreme uncertainty and nervousness out there.  That means as silver investors you've got awhile here that will be totally manic & depressive, wild, and crazy.  Be ready for a ride!  Don't overanalize, panic, or try to make sense of it all, because it ain't all gonna make sense. 

I figure with most everyone forecasting some QE activity at some point, (even though the amount of QE and it's timing is unknown), plus the fact that Obama wants re-elected meaning he has to push to keep this economy afloat, we're going to have to expect a good dose of stimulus coming in.   That's inflationary for silver prices.  Take that into consideration along with the ever tightening supply situation, and strong long term good fundamentals re: supply vs. demand for silver, then I'd tell myself it's looking like silver holds as a lot better looking option than all our other options long term.  

I'm not a trader, because if I was I'd probably end up broke and never get any sleep in this volatile silver market.  I don't really worry about what the price of silver does in the morning.  I'm a 'buy and hold' guy trying to pick up a little physical anytime I see a big drop.  Seeing a top is hard, but anyone can see a big drop when it happens.  That's when you go to your powder and call in more physical.  Same goes for the miners.. they look sooo damn cheap right now.  If you believe silver prices are moving up over the long haul as I do, and it's got to be produced from somewhere, then the miners are the steady cash cows. But true, you still have to figure in some risks like nationalization movements spoiling the party, higher future production taxes, bad management decisions, etc..  But on the plus side when it's obvious silver prices are going much higher, you could have a lot of consolidation among the miners. Many will get bought up, so there's plenty forces to do well.  The recent sell off in miners was a panic sell and it was the speculators who didn't know the market as many here do.    Sticking with T-bills, bonds, and cash longterm that's loosing purchasing power,,, for safety?  Maybe to take a breather and decide where to go next with your money (hmmm.. mybe I see what's going on and I should put it in PM's?).  I'm a physical and pure play silver miner guy, but man .. my Broker absolutely hates it when he's calling me and telling me to diversify into 30% bonds, 20% cash and the rest in beaten down S&P equities.  Whatever.   Time will tell..  hopefully I'm right, but I ain't selling.

debtless's picture

In VXX since the big Thursday

In VXX since the big Thursday boost. Either way - i'm pretty sure volatility will be the play next few days.

BTW - i think the blank checks from the FED will be handed out to the dealer banks to keep it all well painted in the green.

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