Santa Tried To Warn Us

As we watch the metals get savagely beaten this morning, I'm reminded of the warning that Santa posted last Friday and again yesterday. The Cartel is trying again to take down paper price. Will they succeed? Maybe...

Here are the two main components of his post. Remember, this was first posted last Friday so when he says "next week", he's talking about now

"Next week is the war between manipulation of gold by the West, and appetite for buying gold in the East, both from friendlies and enemies. Anyone that does not see today’s gold market as a rig is blind or brain dead. There is a full blown crisis in Western world banking today, right here and now. There is a full blown crisis in sovereign debt of some weaker nations as in a very short while certain government will be out of money. The Eurosnobs hate each other which does not make for a fast reconciliation of a crisis."

"Next week will be the time the cartel tries to break the gold price again. They have failed seven times, and will fail on the 8th. Gold is going to $3500 and above. All the lying and conniving only means the price will go higher. Just as Morgan’s whale could not fight the market, the cartel cannot fight gold as we have a flight away from all fiat currencies."

So, there you go. As you know I, too, have been concerned about a short-duration, Cartel-inspired plunge that would attempt to take out the plethora of sell stops below 1525 and 26. Can they pull this off? You know they want to. Can they? That is the question. Global physical demand remains extraordinarily strong ( http://www.zerohedge.com/news/china-imports-more-gold-hong-kong-five-months-all-uk-combined-gold-holdings) so driving down paper price will only increase the flow out of the LBMA member vaults. We'll justhave to see how this battle plays out.
 
For today's trip into the archives I offer you this: http://tfmetalsreport.blogspot.com/2010/12/preparing-accordingly.html. Written on 12/19/10, I still look back upon it as one of my favorites. Here's the summary paragraph:
 

"The end of US hegemony is near and with it, the end of the US dollar as "world reserve currency". This catastrophe and all in entails could have been avoided with responsible leadership and an educated/involved populace. However, selfishly, we in the US decided it was best to pursue a plan where we foolishly thought our recklessness was beneficial. This attitude was best summarized by republocrat and Keynesian legend, John Connally, who, as the coin was dropped in 1973, told the world that "the dollar is our currency but it is your problem". Sadly, we allowed Mr. Connally to be prescient for almost 40 years but the world is about to turn the tables. Soon...very soon...the coin will finally reach the narrow end of the funnel and the bottom will simply drop out. What happens next will not be fun and games."

​OK, that's all for now. I've got a full day of meetings ahead of me but I'll be watching this closely and I'll certainly update the blog if needed. Hang in there and be patient.

TF

 

349 Comments

azzatack's picture

Who wants to go first?

Not me

Hammer's picture

Me neither 

Me neither cool

p.s. Oh please let it go lower, pretty please :)

Nick Elway's picture

Thomas Paine

THESE are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as FREEDOM should not be highly rated.

Dec 1776

¤'s picture

Easy Credit Tsunami

Thanks for the update.

Santa Jim knows more then anyone of us what's going on and what he see's coming. He get's my benefit of the doubt due to his experience and knowledge and out of the box view.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I think Michael Pento is right. This EU flood will mostly make it's way over here but the US capital that gets offered up here at home to credit eligible consumers will be spent mostly here.

The wave of US money held by banks will be like a tsunami of easy credit at such super low rates that people will feel compelled to take on available and easy credit. And then spend it into the economy like people are prone to do. The Govt needs to have people spend/consume as much as possible to provide badly needed tax revenues in the end game.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

ECB Says Overnight Deposits Fall to Lowest in Seven Months

The European Central Bank said overnight deposits from financial institutions dropped by more than half to the lowest level in almost seven months after policy makers stopped paying interest for the funds.

Banks in the 17-nation euro region parked 324.9 billion euros ($397.2 billion) at the ECB yesterday, down from 808.5 billion euros the previous day, the Frankfurt-based institution said. That’s the least since Dec. 21.

Financial institutions are no longer remunerated for the money they deposit at the ECB overnight after last week’s interest-rate cuts took effect yesterday. Policy makers reduced the main refinancing rate on July 5 to a record low of 0.75 percent and cut the deposit rate to zero to stimulate credit supply and lending.

“It’s a miracle that banks used the facility at all,”Christoph Rieger, head of fixed-income strategy at Commerzbank AG in Frankfurt, said in an interview. “Most banks are putting their money into reserve accounts instead. There’s no reason to believe that excess liquidity is declining.”

The ECB has flooded financial markets with more than 1 trillion euros of cheap three-year loans to unlock credit. As a result, overnight deposits, a measure of excess liquidity in the system, surged and have hovered around 800 billion euros until earlier this week.

Liquidity Creation

“I would not make too much of the levels that these deposits are reaching, because it is just a mechanical consequence of the liquidity creation,” ECB President Mario Draghi said on March 8....

http://www.bloomberg.com/news/2012-07-12/ecb-says-overnight-deposits-fal...

StevenBHorse's picture

Peep this

The8thHabit's picture

PSLV

For those of us invested in PSLV this news made it a completely wonderful morning! frown

http://business.financialpost.com/2012/07/11/sprott-physical-silver-trust-set-to-wrap-up-second-financing-deal/

JimmyTheHand's picture

Sitting Tight

Sitting tight is the hardest thing to do for some folks.  Nows the time to buy some physical if you can or just sit on your stack. 

I had just gone over to Jim's blog just to see whats been going on lately when you posted this Turd.  The amount of gold and silver leaving these shores at these prices is already epic.  I can't imagine how much will leave if it goes even lower.  QE3 right around the corner.

Biochar's picture

rain barrels

We have 3 total now, plan on getting more, 50 gallons, one each for the snow peas & tomatoes, strawberries & blueberries, and asparagus planters. Got 'em at McLendons, also the curved black trellis you see, they are great for the snow peas (climb to 7 feet high here in the Pacific Northwest). The pavers we got off craigslist, all our raised beds are made from recycled free stuff

Be Prepared's picture

The Problem is...that They are...and Most Likely will again...

Be Prepared's picture

The One Party... has been outsourced...

steveo's picture

Volatility Ratios One of my

Volatility Ratios

One of my former "secret indicators"
This one deserves 5 minutes of study.
You don't want to be on the wrong side of  this spikes, however, trouble is we had a stealth combo spike up spike down that is clear on the candle charts.

http://oahutrading.blogspot.com/2012/07/volatility-ratios.html

The Watchman's picture

7,233,453 Million Ounces @ Current price

Sprott Physical Silver Trust Prices Follow-on Offering of Trust Units In an Aggregate Amount of US$200,005,000

July 12, 2012 9:26 AM ET

Maximillion's picture

Volumes seem low

Volumes seem real low on netdania for Silver, which seems strange given the price! Where's the big dump of paper, or are they getting a little concerned they won't be given the chance to cover?

Be Prepared's picture

Barclays LIBOR Scandal

Be Prepared's picture

OBummer's in the Driver's Seat alright...

but America, the car, ain't looking too good...

proformatrillionaire's picture

Question to the board

You have two choices to use 4,000 fiats today. Would you buy 10,000 shares of CZICF or 500 shares or EXK? Or I suppose a third option to buy some gold & silver coins? Thanks for your help.

DayStar's picture

New Sprott Physical Silver purchase

"Sprott Physical Silver Trust is expected to announce the results of its latest foray into the raising capital business. After the markets closed Wednesday, the issuer announced a follow on offering of trust units via a marketed deal. Accordingly no issue size was given: instead a book will be built and priced (in US$) in the context of the market. The units closed Wednesday at US$11.48."

Is this the game changer event of which TF knew?  Considering that his first purchase blew the silver market up to nearly $50/oz and the rumors that PFG was taken down because Comex could not deliver silver, this could be a biggie.

DayStar

Strongsidejedi's picture

USD vs. Gold price

With all the yammering and hand-wringing here, I'd like to point out that the last time the USDX was at this level (83.7- 84)was back around the end of June and early July of 2010.

In July of 2010, the spot gold price at that time was $1200 an ounce and spot silver was at $17 an ounce!

Today, we're at $1560 for gold and $26.85 for silver.

Do you seriously believe that the cartel can honestly convince enough WOPRs to drop prices to $17 an ounce for silver and $1200 per ounce for gold?

What would such a price do to the physical purchases of gold and silver in the LCS or Ebay or LBME?

Mickey's picture

support

silver seems to be supported at 26.50--gold 1550--and thats what Santa said give or take--a test--

and it would be a failed test.

Bottom line--unless this country follows the route of Erskine Bowles, gold and silver will be at higher multiples of what they are now.

If we do follow what he said, the next few years will be bleak economically.

Our genius leaders in giving the children  (and the banks are included in being children and playing with fire) what they wanted, have squeezed this country between the proverbial rock and hard spot.

Risk to downside on PM "should" be small except for  the the cartel which if they had any brains given the LIBOR fiasco, they would be cleaning their desks and running away with the bonuses they earned asap.

I am loading up on NUGT--at 8 bucks its a permanent option and if HUI triples like it did from 2008 NUGT would be a hell of an investment.

then use it to buy more physical even if prices are higher. Somewhere in here hui will triple while gold doubles and "professional" managers will realize its not perfect but a ton will fall to the bottom line.

Beastly Stack's picture

Today's Silver

Silver is looking and performing very well here today compared to gold!

If we don't get a pop b4 the NY close I would be concerned for trading purposes only!

Go to The WHIP

JavaJedi's picture

RE PSLV

I wondered why it gapped down 5% this morning.  It's recovering a bit now, but I wonder what caused the big drop.  I wouldn't think this offering would dilute the shares I have, but allow for more physical bullion to be acquired.  I guess it's a good in the long term, bad in the short term kind of thing.

¤'s picture

This will blow your mind...

...if you allow yourself to consider the possibilities and believe the technology mentioned is capable of what is described. 

I'm not sure what to think after reading it. Part of me admittedly out of fear wants/needs to think that it's paranoid BS and not possible in the U.S. but the other logical part has to admit that the tendencies and actions that are happening domestically would seem to point towards this actually happening as time and technology marches on. 

The U.S. is leading the way in drone technology and manufacturing and we use it extensively abroad so using it here seems like a logical next step.  I can see the day where a drone strike happens on US soil within 5 years.

Southern border? Idk, but it seems inevitable that it happens at some point in the future somewhere on US soil.

This would be like 1984 on steroids. 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


 

You might have heard that police are deploying scanners – not only in airports – but also on trains, buses, ferries, sporting events and on the streets. And see this.

You probably know that the National Security Agency is building a $2 billion dollar facility in Utah which will use the world’s most powerful supercomputer to monitor virtually all phone calls, emails, internet usage, purchases and rentals, break all encryption, and then store everyone’s data permanently.

And that the CIA is trying to tap your communications as well.

You may have heard that drones will soon be flown all over America to spy on us. For example, ABC News reported:

 
Drones can carry facial recognition cameras, license plate scanners, thermal imaging cameras, open WiFi sniffers, and other sensors.

And they can be armed.

***

Without privacy and transparency rules — these powerful surveillance tools … have strong potential for misuse.

The military is already using drones over the American homeland to gather information on Americans. See this and this.

AP notes that the American public is wary of drones...

http://www.zerohedge.com/contributed/2012-07-12/government-will-soon-be-able-know-your-adrenaline-level-what-you-ate-your-bre

bam's picture

Does anyone have a short,

Does anyone have a short, clear primer for the paper vs physical price dynamic (gold)?   I want to give it to a friend who knows nothing about this stuff.

I can type one up myself, but if someone has a good link, I can save myself the trouble.  

Thanks.

rl999's picture

so true

Floating Base Gives U.S. New Footing in the Persian Gulf

proton777's picture

Sprott Updated

TORONTO, July 12, 2012 /CNW/ - Sprott Physical Silver Trust.....announced today that it has priced its follow-on offering of 18,100,000 transferable, redeemable units of the Trust ("Units") at a price of US$11.05 per Unit (the "Offering"). As part of the Offering, the Trust has granted the underwriters an over-allotment option to purchase up to 2,715,000 additional Units. The gross proceeds from the Offering will be US$200,005,000 (US$230,005,750 if the underwriters exercise in full the over-allotment option).

The Trust will use the net proceeds of the Offering to acquire physical silver bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus......

So, with proceeds of $200 million and a silver price of $27 an ounce, that comes out to about 7.4 million ounces to be  purchased.  With the full over-allotment, that's about 8.52 million ounces. 

Substantial, yes, but the cartel could sell (and has sold in the past) multiples of that with a few keystrokes =)

Strongsidejedi's picture

@proformatrillionaire

$4000 fiat USD's would convert to

1 oz US American Eagle  = $1630 per ounce x 1 coin = $1630

1 oz Canadian Maple Leaf = $1620 per ounce x 1 coin = $1620

1 oz US Silver Eagle = $30 per ounce x 20 = $600

Total = $3250 (gold) + $600 = $3850

Such "investment" is free of the 9% sales tax.

Therefore, your purchase would have been $3850 + $350 = $4200 if taxes applied.

You would lose that money to either the government or the LCS guy's premium anyway.

The cost of conversion back to fiat is the issue.  When you convert the US Gold Eagle to fiat, there is no capital gains tax.  If you like, you can buy both gold coins in US AGE rather than diversifying to the CML.  The same applies to buying a PRC Panda, SoAf Krug, AUS phil, or other.  

The fiat that gets converted evaporates (monetary velocity ends up zero'd). 

The buy-sell spread on some of these coins is quite nice. 

Diamond's picture

Face It: The Cartel Is Invincible

Of course the Cartel can take out the plethora of sell stops below 1525 and 26.  There is no question about it.  

There is absolutely no need to even consider the precious metals sector any longer unless the pattern of lower lows and lower highs gets reversed in the mining sector.

Diamond's picture

Get Rich: Load Up and Go Long on DUST

That's right.  

All in on DUST forever = Exponential Wealth Accumulation Forever.

Mickey's picture

another pop on silver

legit and illlegit longs and shorts, HFT, Cartel/the boyz, hedgies, miners trading in metals

there are so many games and strategies being played it is amazing

we are down to the either or situation I first heard from Richard Russell.

Inflate or die

and unless they cut the deficit they have to inflate-its just a matter of who does the buying of treasuries. Not sure how it will sit with public to force them to put treasuries in 401k's which is why they will not end the 401k. Too much there to buy treasuries.

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