Turd 2012

Monday, February 13, 2012 at 12:40 pm

Sorry for the late start this morning. The Turd is just a bit under the weather and moving somewhat slowly. I've noticed, however, that our "markets" don't seem to care. They always seem to go about their business whether or not I'm at my post.

The world is in turmoil but you'd never know it by looking at PM prices. Athens is burning. Civil War in Syria with Russia on one side and the U.S (and Al-Qaeda) on the other. Israel is killing Iranian nuclear scientists and Iran is attacking Israeli diplomats while the U.S prepares forces for the likely event of war. Stocks in America are up almost 20% over the past 6 weeks, all on the back of a falling unemployment rate that was statistically manufactured from whole cloth by bureaucrats at the BLS and a a surge in price by a company (Apple) which now constitutes about 25% of the NASDAQ. It's all so surreal that it's difficult to coherently comment so I'm going to keep this somewhat brief.

First up, the metals. To me, it's clear from the CoT numbers that the Cartels are not going to allow prices to continue much higher from here. There will still be rallies and silver, in particular, looks pretty sturdy above $33...but...with EE short interest growing and momentum slowing, it only appears to be a matter of time before we get a dip in price for both. As you can see on the charts below, if The Forces of Darkness can break some resistance levels, both metals have room to fall before finding rather obvious support zones. Let's see if it happens. For now, I'm not buying anything as I wait for a chance to BTFD.

I hope by now you've had a chance to read the post from Saturday regarding OI, the CoT and lease rates. I'll be watching the silver lease rates very closely this week for signs of an impending raid. As mentioned in that post, the magic level for raids seems to be -0.40%. After falling by a basis point of Friday, the 1-month rate currently stands at -0.31%. Turdite "margaritatime" dug into the internet to find a post written almost 10 years ago by Uncle Ted. If you've ever wondered about lease rates....what they are and how they work...I suggest you take a few minutes to read this excellent summary:

http://www.24hgold.com/english/news-gold-silver-silver-leasing-or-silver-fleecing.aspx?contributor=Theodore+Butler&article=481545130F8350&redirect=False

Our friend, Jeff Nielson, has written a brief, new article that seems to fit on well with this post. It's nothing earth-shattering but it's some quality reassurance at a time when everything seems so upside down:

http://www.bullionbullscanada.com/gold-commentary/24021-precious-metals-the-only-alternative

Lastly, more on the impending war with Iran. First, there's this:

http://rt.com/news/usa-suicide-iran-forces-147/

then there's this:

http://www.jpost.com/DiplomacyAndPolitics/Article.aspx?id=257628

And, finally, there's this.

http://www.businessweek.com/news/2012-02-13/u-s-would-block-iran-from-mining-hormuz-strait-commander-says.html

Not surprisingly, crude is UP on all of this at sitting right at $100 as I type. Be cautious out there and stay diligent. Something tells me that this is going to be a long week. TF

p.s. Turdite "cris" has decided that yours truly would make a much better president than any of the current crop of dorks and losers. In all candor, I have to agree. To that end, Cris has nominated "Turd Ferguson" for president on the website http://www.americanselect.org/ If you go there and sign up, you'll be able to search for my name and then add your support. My platform is:

Elimination of The Fed and a return to a gold standard
Dramatic cuts in federal spending
Significant reduction in overseas military presence
Flat tax of 15% on all individuals and corporations
Amend Constitution for term limits of six years for President, Senators and Congress.

Now I just have to find a veep. Maybe Rachel McAdams? No, she's Canadian. I suppose Charlize Theron is out, too, as she's South African. Nuts. Gonna have to give that one some thought.

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Comments

First

Submitted by DaddyO on February 13, 2012 - 12:42pm.

Wow... I'm not a virgin anymore!!

Ok, for all you out there who find the "First" post thing tiring, go ahead and trash me.

For all you others, woo hoo!!

DaddyO

LBMA Gold

Submitted by Juan Moment on February 13, 2012 - 12:44pm.

endlessmountain lays it out:

Thurd again

Submitted by murphy on February 13, 2012 - 12:45pm.

Check this story out. I think TPTB are laying the ground work for gold to be accepted in the west

http://www.cbsnews.com/8301-18560_162-57376057/precious-metal-indias-lov...

@TF - You've got more of a chance to get "Reach West McAdams" to join you on your platform

Turd for President!!

Submitted by ReachWest on February 13, 2012 - 12:48pm.

Thanks for the update - But, I thought there was already a big Turd in the White House!

Of course, I like our Turd's platform much better and his candidates for VP sound enticing.

Link to article on returning to the gold standard

Submitted by Kevin C on February 13, 2012 - 12:48pm.

Here is the link: http://spectator.org/archives/2012/02/13/lets-return-to-the-gold-standa I hope it works. Good article.

Congratulations Daddy-O on losing your virginity.

60 Minutes

Submitted by zigzagzz on February 13, 2012 - 12:49pm.

Don't know if anyone posted this but Indians are getting it and look like they have for centuries.

http://www.cbsnews.com/video/watch/?id=7398482n&tag=contentMain;contentAux

UGA & the Long Bond (TLT) Correlation

Submitted by Be Prepared on February 13, 2012 - 12:50pm.

The average American family will have spent around $4,155 this year on filling up their tanks or about 8.4% of their income. This is the highest amount spent since 1981 and more of the same could be on the horizon. According to the International Energy Agency, global demand for crude oil will climb more than 1.4% in 2012, with China requiring more than a 10th of that amount used. As emerging markets continue to expand at rapid paces, this demand will only get larger over the next few decades.

The second problem lies within the fact that the majority of American refineries use more expensive Brent benchmaked crude oil to produce gasoline. As protests in the Middle East and falling production from Europe has kept Brent prices high, refiners in the Gulf have had to pay more, in order to get access to feed stocks. This has ultimately driven prices for a variety of distillates upwards.

I have already predicted in an earlier post that we will see over $4 per gallon gas in May/June 2012... mainly due to seasonal highs. How though is this effecting the flow of money? Is the increased allocation of discretionary spending effecting the long bond. Both times below when UGA hit the 10% relative mark an increase in TLT by at least 25% relative to UGA followed within 6 months.

I always post in the old thread during a thread change....

So Obama wants to spend 3.8

Submitted by Dr G on February 13, 2012 - 12:51pm.

So Obama wants to spend 3.8 trillion $ in 2013. That's his plan?

http://money.cnn.com/2012/02/13/news/economy/obama_budget/index.htm?hpt=...

EDITED: I'm voting for Turd! Hands down. I do wish there was so frozen yogurt on Turd's campaign platform, however.

false flag?

Submitted by SilverWealth on February 13, 2012 - 12:53pm.

looks like another in a long line of false flags

http://www.washingtonpost.com/world/bombs-target-israeli-diplomats-in-in...

@Be Prepared, that gasoline

Submitted by Dr G on February 13, 2012 - 12:54pm.

@Be Prepared, that gasoline figure is astounding. 8.5% of their income spent on filling the cars. I was completely unaware of that. I'm in a bit of shock after thinking about it.

I thought we would see $4+ gas last summer. I've learned that the markets are so rigged that it's impossible to predict these things.

Great post.

Turd's Veep

Submitted by Colonel Angus on February 13, 2012 - 12:55pm.

I guess Daniela Cambone is out also...what about Ron Paul? I know he doesn't have the looks of the others, but he sure does have the ideals and the ideas.

Iran nukes Tel Aviv ?

Submitted by Monedas on February 13, 2012 - 12:57pm.

Gold unchanged to slightly lower in lack luster trading ? Monedas 2012 Fantasy Fatwa Headlines ! i.e. Keep on hoarding, my Truckers !

No flat tax

Submitted by balz on February 13, 2012 - 12:58pm.

I agree with everything you said, but tax-flat is plain stupid. Its nonsense to ask the poor guy to pay the same taxes as the ultra-rich. Any society should make the rich pay a little bit more. It does not mean it has to tax the rich to a point where there would be no incentive to become rich, but it's only fair to have Warren Buffet pay more percent of his income than average Joe. Flat tax is... flat stupid... sorry.

President Turd

Submitted by IndigoStar7 on February 13, 2012 - 12:59pm.

... and VP Andrew Napolitano! Sound good?

Thanks for the thread.

My thoughts on war are this...get ready for a suicide Iranian speedboat confrontation that we blow out of the water because we'll have to. I'm sure there are lots of itchy trigger fingers on both sides. There appear to be no shortage of Iranian speedboats either.

Turd's VP - Woody Harrelson

Submitted by Paladex on February 13, 2012 - 1:01pm.

Turd, if you're looking to Hollywood, you couldn't do better than Woody Harrelson. For those of you who haven't seen the documentary he hosted, "Ethos," he's 100% on board with almost everything discussed daily in Turdville. A bit to the left of many here, probably, but well within the Venn diagram overlap.

Sorry, can't vote Turd for pres...

Submitted by pourty on February 13, 2012 - 1:01pm.

Because I have to vote RP...

But Turd would make an excellent Treasury Secretary, or better yet, fed president. Send one of the good guys into the belly of the dark side to fix it from within... (and by fix, I mean dismantle...)

Re: So Obama wants to spend 3.8

Submitted by Silver_investor on February 13, 2012 - 1:06pm.

The White House budget office (OMB) is projecting a budget deficit for the current fiscal year of $1.33 trillion. That is higher than the deficit for the previous fiscal year, and higher than the deficit recently projected by the Congressional Budget Office. The current fiscal year will be the fourth straight year with a deficit in excess of $1 Trillion. This is quite a recovery!

@balz re: flat tax

Submitted by pourty on February 13, 2012 - 1:06pm.

A flat tax, by definition, taxes the same percentage from everyone. It levels the playing field. I have no love for banksters, but I don't support policies that punish you for being successful.

Of course, I would much rather repeal the 16th and go back to a constitutional tax scheme... But a flat ax would definitely be an improvement over the current confiscatory system...

Tax the rich...

Submitted by cpnscarlet on February 13, 2012 - 1:09pm.

@balz - The Framers would disagree. They believed in equal protection under the law. Therefore, any direct tax would be APPROTIONED to the states. If the states wanted to collect that tax with a progressive or regressive system, that was their choice. The Federal gov't could also levy excise taxes which would, obviously, be paid more by affluent people as they tended to consume more. But those taxes should be avoidable in a perfect world...sorry about that Whiskey Rebellion, but that's life.

Your view of society is so quaint, but just like shit, a little bit of collectivism ruins that whole meal. Time to empty your load pan there.

alternative to term limits

Submitted by opticsguy on February 13, 2012 - 1:12pm.

How a bout a "legislative jubilee" every 12 or 24 years? It means that every senate and house seat, plus the president, can not run for re-election in a jubilee year. All new faces. After sitting out 2 years (or 4 or 6 if you're a senator), you can run for your old seat back. How many people would spend $10 million for a senate seat 2 years before a jubilee? Think what kind of problems could be solved.

24 years works well, as it gives every generation it's own jubilee. Plus, nobody should be in the legislature for that long.

Please elaborate, Turd

Submitted by Air Garcia on February 13, 2012 - 1:13pm.

You state:

To me, it's clear from the CoT numbers that the Cartels are not going to allow prices to continue much higher from here.

Is this long term or short term?

I mean, is our big picture 'silver to the moon' hope losing it's luster?

Thanks!

CCI still hasn't recovered from Friday's selloff

Submitted by lairdwd on February 13, 2012 - 1:16pm.

Hit a high of 597, sitting today at 586. How long do you think this will last with the next LTRO (aka LMFAO) on deck to the tune of $1T fresh Euros being pumped into the system.

Flat tax

Submitted by Loud Noises on February 13, 2012 - 1:16pm.

In my opinion, a flat tax is the only way to make sure that you don't fudge the revenue side of the equation. 15%, or whatever number, of every dollar goes in the revenue bucket. Certain LIMITED benefit programs to help the truly needy would be able to offset the burden on lower income contributors, but they still have to pay 15% when generating income to receive these benefits. (I may regret saying this, but there would be situations where a person ends up net positive with gov't money... just WAY fewer would deserve that than currently qualify.) I work in entertainment and I see it functioning as an agent's fee. Its cut and dry. The gov't is my "agent" to provide for tasks that I am not fit to do alone. That makes way more sense than sliding tax scales, write-offs, deductions and loopholes. If benefits truly need to be provided, they are. But a no exceptions rule makes sure that the revenue side doesn't get screwed up. Then you can truly deal with expenditures; provide what is necessary and cut what isn't.

Of course, this approach only works with the government functioning as intended by our founders. I doubt this system could sustain our modern big brother.

I'd vote for you if you lived

Submitted by 71185208 on February 13, 2012 - 1:17pm.

I'd vote for you if you lived in my country Turd!

Malware

Submitted by Justin on February 13, 2012 - 1:19pm.

Got this message when trying to view the last page of comments on the previous post. Just a heads up to the mods and anyone else, guessing a link was submitted in one of the comments to viralswagger.net maybe?

Also, just came across this gem on Business Insider regarding Buffett and his view on gold. Anyone actually believe he truly feels this way or is now just a shill for those trying to save the Dollar. Some snippets:

In his excellent investing primer in Fortune (an excerpt of his forthcoming Annual Letter), Warren Buffett devotes a few paragraphs to gold and the fools who worship it.

He also explains why gold is generally a crappy investment, even if its price in dollars goes up from time to time (as it has over the past decade).

The cube of gold will produce nothing in the next hundred years (or, for that matter, thousands of years).

The cube of gold will not pay you interest or dividends, and it won't grow earnings.

You can fondle the cube, but it won't respond.

http://www.businessinsider.com/buffett-on-gold-2012-2#ixzz1mHc9SowV

Forget gold you fools, buy FACEBOOK!!!!

Will it ever end?

Submitted by Silver_investor on February 13, 2012 - 1:21pm.

Will the Cartel ever be broken? That is, will we ever see true price discovery in gold and silver?

My support for Turd is official

Submitted by Bsong on February 13, 2012 - 1:21pm.

Need a photo with your hat on Turd

While looking for something else, found this...

Submitted by ClinkinKY on February 13, 2012 - 1:22pm.

Conspiracy VS Reality

For those of you trying to convince difficult-to-budge people who are turned off by flowery language and aggressive accusations, I submit the following, brief summary of Precious Metals fundamentals and the nefarious forces aiming to undermine the natural forces of economic Mother Nature by suppressing their prices.

For the past 6,000 years, gold has been universally utilized as money, while all fiat currency systems have since failed. Few people realize the U.S. itself has already lost two currencies to hyperinflation: the Continental during the Revolutionary War and the Confederate dollar during the Civil War. Moreover, Abraham Lincoln’s “Greenback” dollar was on its way to hyperinflation when the Civil War ended – in other words, with another year or two of war, it, too, likely would have been destroyed.

If the Federal Reserve, ECB, BOE, BOJ, an

Sorry, Turd

Submitted by Ferd Torgerson on February 13, 2012 - 1:24pm.

As much as I admire and respect you, I can't see you in the top spot. To me, you will always be "number two".

I could be persuaded differently if you added one more plank to your platform - Mandatory Precious Metals Insurance. I'd gladly help you draft the law.

And here's a catchy campaign slogan for you taken from some of the politicians of the 1950's from my native Georgia: "Yew he'p me and ah'll he'p yew!!".

Ferd

Interesting stuff, Turd. Thanks

Submitted by Fred Hayek on February 13, 2012 - 1:28pm.

I wanted to also bring a piece from the Naked Capitalism site to folks' attention. It's an interview with a greek (I think) economist named Yanis Varoufakis. He says some very interesting things about the structure of global capital flows pre and post Nixon's completing of the decoupling of the dollar from gold in 1971.

http://www.nakedcapitalism.com/2012/02/the-global-minotaur-an-interview-with-yanis-varoufakis.html

I'm ambivalent about that site. The woman who runs it goes by Yves Smith (get it, not Adam Smith but . . . . alright, I'll stop) and she wrote a pretty good book called EConned. But some of the people who post in the comments section will drive you to tears. It's pretty good on arcane banking issues.

Feel better Turd!

Submitted by mendolover on February 13, 2012 - 1:28pm.

Give that liver a good flush and feel better Turd!

True equality flat tax !

Submitted by Monedas on February 13, 2012 - 1:29pm.

A true flat tax isn't a "flate rate" tax ! Monedas believes in a true, flat tax.....everyone pays the same !!! Monedas 2012 All government services are contracted and paid for like any other human activity !

Fondle the Cube!

Submitted by cpnscarlet on February 13, 2012 - 1:29pm.

I say we adopt that as a rallying cry to stick it to the "prophet of Omaha". To that elitist old codger, I say -

"Gold has nothing to say, but it tells no lies. Gold will never produce a dividend, but it will always have value. Any idiot can print a dollar, but only God can make gold."

True equality flat tax !

Submitted by Monedas on February 13, 2012 - 1:31pm.

Warren Buffett Trashes Gold, But What About Silver?

Submitted by iceman321_2k2 on February 13, 2012 - 1:31pm.

"In a recent Fortune article, Warren Buffett provided a glimpse into his upcoming annual shareholder letter. Buffett used this opportunity to once again remind everyone how much he dislikes gold. He cites gold’s limited industrial demand and places the precious metal in a category of assets that “will remain lifeless forever.” However, there are two precious metals that are considered to be monetary safe-havens. Sometimes referred to as gold’s little brother, silver has also acted as a hedge against uncertainty and fiat currencies. Furthermore, its industrial use is far from being lifeless."

http://wallstcheatsheet.com/stocks/warren-buffett-trashes-gold-but-what-...

By the way Turd, I took my wife to see The Vow with Rachel McAdams. Not a bad chick flick at all. ;)

Al Qaeda

Submitted by Tyler on February 13, 2012 - 1:31pm.

I think we should be giving more attention to the fact that the US is now officially funding and on the same side as Al-Qaeda. They're not even hiding it anymore. That is not good news.

You know I had to do this...

Submitted by Pining 4 the Fjords on February 13, 2012 - 1:31pm.

Gold to Debt aka Nerd Time

Submitted by StevenBHorse on February 13, 2012 - 1:33pm.

Debt Level ($T)	CBO Projection Year	Exp Debt Model Year	Model Gold Price
$ 17.00	2014	2013	$ 2,735.79
$ 18.00	2015	2013	$ 3,306.45
$ 19.00	2016	2014	$ 3,996.16
$ 20.00	2017	2014	$ 4,829.73
$ 21.00	2018	2015	$ 5,837.19
$ 22.00	2019	2016	$ 7,054.79

Total debt outstanding (TDO) correlates with gold very closely. If you plot the two series together and assume that the gold price is a function of the TDO, the resulting function approximates a exponential function. Namely GoldPrice = b*e^(m*x) where x is the TDO, and where b and m are the output from the regression analysis. The adjusted r squared for the exponential approximation is .935. The starting date for this analysis is September 28, 2001. There is no particular significance of this date as I believe this was the starting point of daily debt data which I pulled from the Treasury website. There were more than 2500 observations in this regression analysis, so I don't think that adding or removing 100 would have any meaningful change to the output of the data.

The second chart is showing what the modeled value of gold would have been compared to the actual observed gold price during the same periods. The green line is the observed error between actual and model. The third chart simply graphs the differences between actual and model prices, and shows periods where gold has been relatively overvalued/undervalued in regards to its expected model price.

The table is just saying what the model output is for various levels of debt. I included the CBO estimates for some giggles, since they are beyond incompetent. I added the column of "exp debt model year" to the table which should give a more realistic timeline of when we can expect certain debt levels to be attainted, assuming a similar trajectory in the growth of TDO.

Modeling has gotten many people into trouble in the past. The results I have showed you are simply what a series of mathematical equations tells us about looking into the past and trying to tell the future. I can't imagine a world in which the TDO hits $20T without the world losing its faith in the USD. Events like what we are facing are more of the discontinuous type whereby an event or series of events will happen that will change the perception of the marketplace overnight. Many others much smarter than I have written excellent pieces on the nature of discontinuous or asymptotic events, and there aftermath.

Pining

Submitted by Ferd Torgerson on February 13, 2012 - 1:34pm.

You are sooooo bad!!

Link to Lady Rothchild's opinion piece on American's Elect

Submitted by FISD on February 13, 2012 - 1:39pm.

See this article by Lady Rothschild herself promoting the American's Elect program.

Not really sure what to make of it, but if the Rothschild's are involved, I wonder...

I do think Turd has the makings for a very good President!

balz -- 15% would actually be a cut for everyone

Submitted by Fred Hayek on February 13, 2012 - 1:40pm.

Between a low wage employee's contribution to FICA shown on his pay stub and the money that the employer pays unseen by him, the typical low wage employee is already paying just over 15% in federal income tax because, as we know, that money is fungible. It's not actually kept separate. That was changed back in LBJ's corruptathon.

Turd 2012 Gear

Submitted by Moderator Jane on February 13, 2012 - 1:43pm.

MODERATOR

Just a reminder that we have Turd 2012 gear in the online store - hats, shirts and bumper stickers. :-)

http://www.tfmetalsreport.com/store

PS Great pic, Pining!

Warren Buffett

Submitted by FriedEggs on February 13, 2012 - 1:44pm.

doesn't give two sh*ts about us...

He is just another business Oligarch that doesn't care about the masses and can suck a fat walrus...tusk...

Warren Buffett disowned his son Peter's adopted daughter, Nicole, in 2006 after she participated in the Jamie Johnson documentary, The One Percent. Although his first wife had referred to Nicole as one of her "adored grandchildren",^[63] Buffett wrote her a letter stating, "I have not emotionally or legally adopted you as a grandchild, nor have the rest of my family adopted you as a niece or a cousin." He signed the letter "Warren

Fried(e)

@balz re: flat tax

Submitted by foxenburg on February 13, 2012 - 1:45pm.

"Its nonsense to ask the poor guy to pay the same taxes as the ultra-rich."

I don't understand what you mean by "pay the same taxes". If you're saying that a person pulling in a million a year should pay the same in taxes as one earning $100k, then I agree 100%. But that's not what a flat tax means. Under a 15% flat tax, one pays $150k a year in taxes and the other only $15k. What's unfair about that? The higher earner in this instance is paying ten times as much as the lower earner. It perverse to think this isn't enough and plain greedy of a government to want more!!

Pining, you stud! Made my day

Submitted by Dr G on February 13, 2012 - 1:45pm.

Pining, you stud! Made my day with that.

@Pining

Submitted by ReachWest on February 13, 2012 - 1:46pm.

Great work!

Official Turd for President Wallpaper - I bet that would be a big download item in the Turdmart!

False Deficit

Submitted by Stratajema on February 13, 2012 - 1:47pm.

""The White House budget office (OMB) is projecting a budget deficit for the current fiscal year of $1.33 trillion."

Ha! Not even close because of the crooked accounting used. The deficit is closer to $5 trillion when adding in Fannie Mae, Freddie Mac, FHA, Student Loans, and unfunded Medicare, Medicaid, and Social Security benefits.

@balz Please familiarize

Submitted by Hellfish on February 13, 2012 - 1:48pm.

@balz Please familiarize yourself with how percentages work.

Euro to revisit 1.33 this week

Submitted by lairdwd on February 13, 2012 - 1:49pm.

For this of you losing faith... Hang in there. Party time soon. I'm gonna disagree with Turd on this one. PM's seem to be tracking CCI. If there is a divergence when CCI starts pushing up, then I'll worry.

http://www.barchart.com/headlines/story.php?id=3171869

Turd I'll vote for you IF

Submitted by paulindoon on February 13, 2012 - 1:52pm.

Turd, I'll vote for you if upon gwtting elected you promise to pass some legislation that would make our boats safer. I have heard so many reports of incidents where some unfortunate Turdite, while trying to protect his stash, had a boating accident which always seems to conclude in the PMs going to the bottom of some lake or river.

So promise to pass some laws to getting a higher quality of boat building in place or maybe set up some regional crews to help these distraught - as they must be after losing their stacks - Turdites recover their PMs.

That will get my vote but pleasedo this before I also have a boating accident.