Looking Good, Billy Ray!

Oh boy, where do we start? By now, I'm sure nearly everyone has had time to ponder the long-term implications of the FOMC minutes from yesterday. To sum things up from a TFMR perspective: What we got yesterday was the institutionalization of QE to infinity, for the reasons we've covered here at great length. Namely, the Fed cannot allow rates to rise, regardless of the economic circumstances. To do so would be to accelerate the demise of The Great Ponzi and they will never, ever allow that. The amazingly short-sighted nature of this policy is what kills me. TPTB must protect their power, everyone else be damned.

  • By suppressing rates and printing money, the Fed and other central banks create significant inflation.
  • Significant inflation decreases the demand for low-yielding government debt.
  • This causes the Fed and other central banks to print additional money which will be used to purchase low-yielding government debt, thereby keeping rates suppressed.
  • Continued low rates and money printing causes even greater inflation and less demand for low-yielding government debt.
  • Around and around we go until our proverbial coin finally drops through the funnel.

images_1.jpeg

For more on this death spiral, please go back to the old site and read this:

http://tfmetalsreport.blogspot.com/2010/12/preparing-accordingly.html

At any rate, the next few months are, undoubtedly, going to be quite fun around here. I'm glad to be finally "getting back to business" because calling tradable tops and bottoms in a bull market is certainly what I'm best at and it's a heck of a lot more fun than watching The Cartel beat the snot out of us each day. There will, of course, be points of resistance along the way where The Cartel and the EE try to slow things down so that they can cover at lower prices, but the trend is up and the bottoms are in. Let's go get 'em!

First up, here are your PM charts. We look to be good here for a little while. Gold looks like it wants to trade to 1750 or so before slowing. Silver, though it will encounter some challenges around 34, looks to be headed in the general direction of 35-35.50, where it will encounter some reasonably stout resistance.

paper_1-26amgold.jpgpaper_1-26amsilv.jpg

As we march higher, we'll of course be watching The Pig and DrC for clues. Right now, the POSX is in a definite, down-sloping channel. The channel looks to take it through 79 and toward 78. DrC looks like it still has room to run higher but it will almost certainly run into some selling at 400. Can you envision a scenario where gold rallies to 1755, silver to 35 and copper to 400 before The Pig puts on the brakes by bouncing somewhere between 78 and 79? I can.

paper_1-26amcop.jpgpaper_1-26ampig.jpg

Here are a couple of extra charts, for good measure. First, here is a CRB index chart. Note that it, too, looks to have room to run here.

paper_1-26amcrb.jpg

And here's a chart for Mister Hyde, who has found himself battling with UCO for weeks now. (UCO is a 2X long crude oil ETF.) Note that crude has a very strong floor under it near $98. With yesterday's Fed pronouncements, it's doubtful that, in the absence of nirvana and utopia taking over in the MENA, we're going to see crude fall below $98 again anytime soon.

paper_1-26amcrude.jpg

Lastly, a brief note regarding the economic implications of all this. The link below takes you to KWN, where Eric visited with John Williams of ShadowStats yesterday. I'm trying to track down Mr. Williams in the hopes of getting him on a podcast. In the meantime, this will have to do. Please read:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/1/26_John_Williams_-_Accelerating_Great_Collapse_%26_Hyperinflation.html

That's all for now. Have a fun day. Try to live your life with joy.  TF

109 Comments

bellyacre's picture

FIRST???

FIRST???

murphy's picture

numero 2?

numero 2?

Ferd Torgerson's picture

Better than Last Thursday

When I was Fourth.

Third.

Old Ferd's climbing up in the world.

And so are them metals and miners!!

Ubergrinch's picture

I'm Just Going to Leave This Here...

I'm just going to leave this here because I want to know everyone's opinions on Bix Weir.

JP Morgan: Operation Silver Slam

http://www.roadtoroota.com/public/592print.cfm

Senseosensei's picture

John Williams

Strongsidejedi's picture

Is this disorderly yet?

Message to Eric King for KWN Weekly Metals Wrap -

Please ask guests - Is this disorderly yet?

Edward G's picture

cool

you write so beautifully, even when you're peeved, always make me laugh

we remain undeterred !

Eric Original's picture

Been a long time waiting for

Been a long time waiting for that video to come back!   Whew!

Be Prepared's picture

QE to Infinity and Beyond!

Bernank Lightyear....

Dr G's picture

LOL, a chuckle at picturing

LOL, a chuckle at picturing Eric "leading the witness" King asking "For our listeners globally, is this disorderly yet?"

Dr Jerome's picture

Ubergrinch and Bix Weir

Others here are more qualified than I to comment on the silver slam, but I hate meetings and I have a laptop!

I agree with most of Weir's article. He uses a solid analogical argument, and argument by precedence. No sophism here. But it is a probable argument, not a certain one, as are every argument you ever hear. Right up to the last section, I am with him 100%. It is possible, though, that the choke-out occurred with the pushes down to 26. The difference is QE1,QElite, QE2, and the hidden QE going on now, all of which had not been in process during the time of his examples of the JPM strategy in early silver and Nat gas.

Nevertheless, we could still see a beat-down. Perhaps the double bottom at 26 was painted.We may be experiencing another trap. But I have strong hands and will buy more if it happens. If not for me, then for my grandkids' inheritance.

Puck T. Smith's picture

Am I the only one?

I have an odd feeling of regret to be leaving the current lows behind.  The past few months have let me cost average down over a dollar/oz.  Going forward it's going to start creeping up again and I'm still as few ounces short of my current target for my stack.

On balance, it's kind of a good "problem," though.

SILVER, BIATCHEZ!

beardeus's picture

Double post

...

beardeus's picture

Can anyone tell me if a low

Can anyone tell me if a low EPS means a low price earnings ratio?

Sorry, took a finance test last night and trying to figure out this answer.

cpnscarlet's picture

@PTS - Looks right now that

@PTS - Looks right now that the cartel is trying their best to relieve your melancholy in Ag. We'll see how long THIS raid lasts.

TheSilverJournal.com's picture

Is Flight to Safety Still in USD?

The pressure for silver to rise is enormous and should hit min. $1,000 before all is said and done. However, in the short term, it's tough to tell whether it will rise or fall, so my play is to bet on the long term rise, but to hold a bit on the sidelines in case there's a sharp drop.

The key reason that it may fall here is Greece. The D-day that's being thrown around for Greece is March 20 when a $16.5B payment is due that they will be unlikely to make. When Greece falls it may cause a rush into the USD in a rush to safety. At some point, gold and silver will also be joining into the flight to safety spurts, but I haven't seen any evidence of that yet. After Greece goes, though, Europe is going to have to explicitly fully backstop Spain and Italy and that will surely be a green light to pile into silver.

Here's my bullet points on David Morgan's latest interview vid on silver fundamentals.

TheSilverJournal.com

geminiRX's picture

Don't get too crazy

I hate to rain on people's parade here, but I think the celebration needs to have a more muted tone until gold breaks above 1750.  Martin Armstrong's article brings up a balanced opinion:

http://www.martinarmstrong.org/files/Gold%20Rally%20Within%2001-23-2012.pdf

PS: Armstrong is no soothsayer, but does offer some good insight from time to time.

Dr G's picture

@beardus, well, P/E is

@beardus, well, P/E is defined by the market price per share / annual earnings per share.

Therefore, EPS is in the denominator. So if the denominator decreases (or there is a lower EPS), the P/E will increase.

For example 4/1 = 4, but 4/16 = 0.25. The lower denominator (1 in this example as compared to 16) yields a higher P/E (4 in this example as compared to .25).

So, no, a lower EPS yields a higher P/E given that the market price per share is the same.

ReachWest's picture

Upward to Oblivion

Thanks for the update and charts. Death spiral it is.

I remain bullish on crude, given the unfortunate state of affairs in MENA. Although, I see, that Ahmadinejad has issued a statement indicating that Iran is now ready to talk. Yup - I'm sure that's going to result in a complete resolution of everything. (Not).

I found Jim Sinclair's interview on KWN, late yesterday of interest. He claims that big institutional money is now likely to enter the PM arena (as they have no other place to go). I suppose we are entering phase 3 (the euphoria stage for metals).

While it's nice to see the metals moving back in an upward direction, it all fore-shadows the end of the economy, as we know it - and - despite the fact that many of us here have been talking about and preparing for it - what we may be moving forward into, still scares the crap out of me

Puck T. Smith's picture

I like Bix Wier, but..

His conspiracy within a conspiracy is a little difficult to swallow.  I'm not ruling it out completely, but it sure sounds like he's describing Gods in the sky fighting a war while we mere mortals can only try to interpret all the signs from on high.

I have a different view.  When enough people wake up and take their lives and futures into their own hands--I'm seeing more every day--the sheer weight of humans acting in their own enlightened interests will overwhelm any attempt to "guide" the future by either the supposed angels or demons.

Bix knows silver, his technical expertise is invaluable, but his mythologising sometimes just confuses things.

edited a typo: angels, no angles

Turd Ferguson's picture

Part II

MODERATOR
Dr G's picture

@geminiRX, no raining needed

@geminiRX, no raining needed or called for. All things in moderation. It is a fact, however, that on the last day of trading in 2011 gold was at 1530 and now is at 1725. That's a nice increase in the past 3 weeks.

Nobody has stated that there aren't further battles. There are, but a nice one has just been won. The war wages on.

AND, the Fed announcement has merely confirmed that we all know what the final outcome of the war will be. There is no question about it.

tmosley's picture

My prediction is that this is

My prediction is that this is merely a bit of upward volatility.  It will be matched and surpassed by downward volatility at a later date as paper silver continues its drunken march toward oblivion.

Unless paper suppression elements in the "market" give up and allow a drastic increase in paper PM prices, bringing enough PMs onto the market to meet their delivery requirements, of course.  But I somehow find that unlikely.  No real reason to give up the lie at this point.

ReachWest's picture

@Puck T Smith

I'm on the same page as you, with respect to Bix's hypothesizing.

beardeus's picture

@ Dr G.

Thank you.

Dr G's picture

@ReachWest, I disagree. We

@ReachWest, I disagree. We are nowhere near euphoria. That will be reached when corporations see the value in gold and purchase gold. It will be reached when our neighbors are no longer selling their gold to pay the bills but our purchasing gold.

We are nowhere near either of those things. I think gold will possibly see the entrance of that AFTER it has cleared 2100 (and probably had the subsequent necessary retracements) and then attacked 2100 again. Then perhaps we will see money flow into gold.

Diamond's picture

suppression elements

TMosley,

​I tend to agree with what you're saying.  That this is just volatility on the upside, and the ensuing downward volality will exceed this present move up with a vengeance.  The question is, how long would that downdraft stay down?  I can't see how it would be for long.  The weak hands have all been shaken out.  

For sure, the EE will not give up their suppression efforts, but I think, as the new Blythe cartoon illustrates, that they know the are going to lose the game.

​Don't let them think differently.  Because for them, that's a small win.  

GoldMania3000's picture

$40 Silver

By March

SuperLeggera's picture

Bix Weir-do

I don't no how I managed to get on Bix Weir's email list.  I suppose someone else managed to do that (I have too many friends that want to believe many far-fetched ideas).  I think he wants to sell memberships to his pay-for members only site.  True, he's a former member of GATA and his expertise in the silver arena is certainly worthy of respect and he is exuberantly positive about the future.  Nothing wrong with that...I rather like it.

Unfortunately, Bix seems to think people like Benjamin "They offered me GE to keep my mouth shut" Fulford are credible.  He loses me there along with claiming Ron Paul will choose Sarah Palin as his Veep.  Then he posts those "conference calls"... you know, the one's that all the Dinar scamming websites and Nesara believers utilize to keep their observers enthralled with the "We're all gonna be filthy rich" dilemma based on this idea of trillions (in fiat, no less) of "global settlements".  There is no legitimate proof of any of it, save for these hypothesis from very obscure sources.  I don't know what others may think about it but, boy, I would love for what he claims to become true and prove me wrong (something I am often good at).

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