Wrapping Up

The Turd is wrapping up his relaxation extravaganza this weekend and he'll be back at his post bright and early on Monday. Until then, here's some stuff for the weekend.

First of all, some charts. Let's start with the metals. Both have flat-lined, which is interesting because a flat-line usually precedes some type of dramatic move, either up or down. We see this sometimes on the short-term charts. We rarely see this play out over days on the hourly charts but here we are. My personal feeling is that we are very close to a significant break OUT and UP. We'll go into more detail on this on Monday.

And you should probably listen to this:

Crude broke through $90 on Thursday and, despite giving some back on Friday, has managed to hold that position over the weekend. It looks strong here and geo-political events are certainly poised to continue to support it.

And the grains are, quite literally, ON FIRE. Though they are susceptible to a sharp pullback here, the forecast isn't getting any better. And it's still July. Yikes. Here's the latest forecast for Kansas City, Missouri. Right in the middle of corn and soybean country.

And here are your weekly charts showing new all-time highs in both corn and beans. The DAG, which we first discussed here a few weeks ago near $9, is closing in on $15, too.

The latest CoT was kind of a bummer. For the reporting week, gold rose $9 and silver rose 44c. In the face of that, The Gold Cartel added over 6000 new net shorts and The Evil Empire added just over 1000 new net short in silver. Not a disaster but not real encouraging, either. The only positive in the report is in the LargeSpecShortSheep category for silver where the LSSS added another 1,123 gross shorts. This brings their total up to over 20,000 at 20,775 and lowers the LargeSpec net long ratio to just 1.37:1. Again, for perspective, on 4/5/11, the LargeSpec net long ratio was 4.04:1 based upon 48,890 longs and just 12,105 shorts.

Three items of reading material for you. First, this interesting piece from John Aziz. It's worth considering. http://azizonomics.com/2012/07/21/why-is-the-fed-not-printing-like-crazy/

Next, Detlev Schlichter has written another excellent article: http://papermoneycollapse.com/2012/07/happy-interventionists-the-economists-attack-on-your-property/

And, finally, some interesting perspective from KWN's "London Trader". Note that there are no price targets or forecasts. Just a simple and concise analysis of demand fundamentals. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/20_London_Trader_-_The_LBMA_Gold_Price_Fixing_Scheme_Is_Over.html

OK, that's all for now. I hope everyone has a safe and relaxing weekend and I look forward to getting back to "business as usual" on Monday.

TF

p.s. When I return, I expect the "Main St" thread comments to return to "normal", too. Main Street is where we discuss the metals, the economy and issues dealing with the end of The Great Keynesian Experiment. It is not the place for subjects like Zionist conspiracies and Chemtrails. All are certainly welcome to discuss those items here but it needs to be done in the forums. http://www.tfmetalsreport.com/forums/conspiracy-theories. Thank you in advance for your cooperation.

365 Comments

Bongo Jim's picture

But

What about smores?

Silver Monkey's picture

I hate The Bernanke!

How the hell can he say no inflation!  Has he been to the super market or the gas station?  Oh that's right, someone else does that for him.  I spent nearly $500 at the grocery store last trip and that was with no booze!

iceman321_2k2's picture

Nice Wrap Up!

Check this out...

Companies such as Odyssey are willing to go to such great lengths to recover precious metals, because hard assets such as gold and silver tend to hold their value exceptionally well over the long-term. The SS Gairsoppa sank in 1941, a year in which the average silver price was 35 cents per ounce. However, in 2011 the average price of silver was $35 per ounce...

http://wallstcheatsheet.com/stocks/silver-the-metal-of-sunken-treasure-and-champions.html/

Colonel Angus's picture

Shorts...

...so, if it weren't the cartel, shorts would seem to be a good thing. Later we have more demand on the covering of said shorts. I'm still thinking with all the stuff going on in the world that we have to see the PMs move higher soon. The only fly in the ointment is the euro, against which everyone seems to measure Pigatha. Even though the dollar is in trouble, DXY looks to be in good shape because of the euro's weighting. Ideas? I'm still stacking and almost all in at this point. (Yes, I've seen the warnings that we might see 24 per ounce on silver, 1425 per on gold, but I'm not buying it. I'm not from the KC area or slightly east, but you'll still have to SHOW ME.)

Pining 4 the Fjords's picture

At some point...

All of this:

Is going to lead to this:

And it might just be sooner than you think  ;-)

    - 2012 Dead Parrot Guerilla Art Comedy Jihad

Beez's picture

My local financial/radio guy again...

on Bernanke, the markets, oil & corn...

Well we sit and wait for Sir Ben to speak. He speaks and says nothing so the markets stay flat. He DOES promise us he WILL act if jobs don't somehow pop up some day soon so its pretty much baked into the cake another round of drinks... ugh, I mean "stimulus" or should we just call it what it is, funny money from air to be paid to.... guess who........ the banks of course. That is all these programs are, no matter what they are called. "Asset purchases" just mean the FEDS print up money and buy US Treasury debt and bad mortgages from either the banks or Fannie and Freddie. (The mortgage giants now owned by the Feds.)

Its just money to buy debt. The buying of bank debt, Fannie and Freddie debt I hate the most as that is just bank bailout pure and simple. If you to want to know when that occurs, just look for term mortgage securities. Thats BAILOUT.

The markets know Ben will act sooner or later so a down market hard is probably not in the cards until he does act. That being said you can start looking into once again nibbling. (dividend payers is what I am considering). Only small amounts though.

I think it is sad we now depend on Bernanke to move markets. Keep in mind thats all he moves with these programs are stocks and interest rates. But only 10% of Americans own stocks, the rich 10 %. Most poor people don't own stocks so they only get stuck with the resulting inflation Ben generates. Thats the unfortunate part. Inflation is sure to pick up quickly if he doles out another program and look to gold to run heavy with the news when it comes. Refinance NOW with dirt cheap rates and contact me if you need a great loan guy! He was FANTASTIC!

Oil is rising again due to Iran issues once more and my UCO covered call position is doing nicely. I also sold calls on CORN (the fund with this symbol CORN). The drought now forces food costs up as well as Ben's printing presses so a double whammy for inflation. Looking to add more PM and AGNC for dividends. Both have done stellar but I am only adding a small amount and still fear a fall market crash if the Euro issue implodes which may happen at any time. GGN and NDRO are still being added for dividends as well as physical gold any time! Stay safe and look to savings, I BONDS, any new EVERBANK Market Safe stuff and similar no risk scenarios! I hate bonds and bond funds however except small amounts of foreign hi grade corporate and government funds, not individual issues though.

I opened up a Canadian Bank account. I might cover that in the show this week so tune in. If you want a contact up there, email me!

I am also looking to Everbank for a new Market Safe No Risk CD but no news yet. They do have a nice account for checking with guaranteed high rates.

Nana's picture

Thank you all

First time poster long time reader, watchtower days...

First, thank you Turd, second thanks to all the community.

Don't know if this will help you Katie but is worth a look.

http://www.scratchandpeck.com/

http://www.handhsoyfreechickenfeed.com/Home.html

Both are GMO free.

Big Rocks's picture

Bought some calls

Just couldn't resist laying in some au bull call spreads.  If a breakout is coming as it appears and Turd says, I figure it's most likely up. Add to that tensions in Syria and Iran, Israeli response to the bombing in Bulgaria and the potential for a terrorist attack during the Olympics and I just couldn't resist. Even if none of that plays out I expect the economic reports to be worsening and more calls for the fed to do something.  Bought sept, oct and dec.. Calls. AU, AG

¤'s picture

Left or right?

Which way do you lean in life?

The center is where you'll find balance.

http://www.onlinecollege.org/left-or-right-brain

Think~Puddle of Mudd

http://www.azlyrics.com/lyrics/puddleofmudd/think.html

Everyone have a great weekend!

Stoxxman's picture

Turd's Army versus the Cartel

ACM's picture

Summer of Our Discontent

   I never imagined how much this year would suck.  We are continuously ripped and stomped by the criminal cartels of Ivy League shitheads from Wall St. and   now we have had a murderous attack against us by a deranged Occupy Wall Streeter.  

   The wheels are coming off.  Stack what you can, metal and all other supplies.  We regular folks will be attacked from both sides with increasing intensity.

SRSrocco's picture

THE SLAUGHTER IN MINING

THE SLAUGHTER IN MINING PROFIT MARGINS BEGINS

Freeport just came out with their 1st half 2012 financial results and it was terrible. Even though they had a slowdown at their Indonesian Grasberg mine in the first quarter, the real damage was due to the prices paid for Copper and Moly. I knew that profit margins were going to get clobbered this second half, but Freeport’s net income declined nearly 50%.

Freeport McMoRan Copper & Gold is more a base metal company, but they do produce a substantial amount of gold. In 2011, Freeport produced 1.4 million oz of gold.

If we look at the chart below we can see just how horrible their YOY (year over year) financial results have been:

Total revenues for the first half of 2012 fell $2.4 billion compared to the same period in 2011…. or a 21% decline. You would think if production volumes decreased, so would the cost of sales. In the highlighted RED AREA, you will see that in Jan-Jun 2011 cost of sales were $5.43 billion on revenues of $11.52 billion. However, if we look at Jan-Jun 2012 we see that Freeport’s cost of sales actually increased to $5.6 billion on much lower revenues of $9.0b billion.

WHAT’S THE DEAL??

The next chart shows how lower metal prices on top of increased costs are killing profit margin by miners:

If we look at the data in more detail, we find out that the GOLD PORTION of Freeport’s first half financials actually helped buffer the losses. Overall copper production declined 10%, whereas gold production fell a staggering 38%. Moly did not change all that much. If we compare some of the data, we can see just how bad the base metal prices are destroying Freeport’s margins:

2011 Jan-Jun Copper Sales = 1,928 million lbs X $4.24 = $8.2 billion

2012 Jan-Jun Copper Sales = 1,754 million lbs X $3.61 =$6.3 billion

Difference in total Copper Revenue = $1.9 billion (this is the majority of Freeports losses)

However, if we take the same amount of 2012 Jan-Jun sales and multiply it by last years copper price per pound of $4.24 we get the following:

2012 Jan-Jun Copper Sales = 1,754 million lbs X $4.24 =$7.4 billion

Difference in total Copper Revenue (based on last year copper price) = $800 million

—————————————–

Here we can see that the price difference from $4.24 (1H 2011) to $3.61 (1H 2012) becomes the larger killer of revenue. Even though copper production fell 10% which was bad enough, the price of copper Freeport received fell 15%.

As I mentioned before, Gold actually helped buffer some of Freeport’s losses even though its gold production declined a whopping 38%. Here are the figures:

Jan-Jun 2011 Gold Sales = 836,000 oz X $1,466 = $1.2 billion

Jan-Jun 2012 Gold Sales = 554,000 oz X $1,639 = $908 million (-24%)

But, if we were to used last years price and applied to the large decline in gold production this would have been the result:

Jan-Jun 2012 Gold Sales = 554,000 oz X $1,466 = $812 million (-32%)

——————————————————-

The damage done to Freeport’s first half financials were mainly due to its copper and moly metals. The price Freeport received for both copper and moly fell 15% compared to the same period last year. However, the average gold price they received actually increased 12%.

I believe the large gold miners (Barrick, NewMont, Goldcorp, Newcrest, AngloGold and etc) will not suffer much damage to their profit margins first half year compared to last year. This is because the price of gold was much higher in the second half of 2011 than the first half.

On the other hand, the major silver companies will show a big decrease in profits due to the fact that silver hit its high in the first half of 2011.

Stay tuned for more analysis as the results come out….

QE to infinity's picture

Love these

Love these cartoons: 

http://didntbuildthat.com/

Cipher's picture

@Larry...initially @ Katie Rose

No problem, and your welcome. I am very pleased you got something out of it. Feels good to help out, if only through a video, and it sounds like it had the same effect on you as it did me.

I couldn't agree more with your assessment of it as well. I truly hope all the preppers that have an interest in gardening (experienced or novice) watched it because it really is that great of a documentary/educational video, and it might just save your life one day...who knows.

One last time here it is:http://backtoedenfilm.com/

Cipher

GM Jenkins's picture

Real yields

10 yr yields measured in various hard assets are at all time lows. I think this is important. Jim Rickards has said the Fed/Treasury *wants* gold to go up (they just don't want it to get disorderly, which would wake people up from their comfortable naps). I think he's right bec the government's #1 concern right now is finding a way to keep feeding itself as it grows bigger, uglier and more grotesque. It can't have gold go down for the same reason it can't have yields go up; the gov very much cares about how much it has to (theoretically) pay you in gold (i.e. ultimate currency) every year for the privilege of borrowing $1000. I have some graphics on how quickly and steadily that amount has been falling here http://screwtapefiles.blogspot.com/2012/07/weekly-metals-post-game-show-720.html

AgNovice's picture

Tractor vs. 250oz

This weekend's dilemma: small tractor with PTO and full set of implements (front end loader, backhoe, disk, cultivator, forklift, snowblower, etc.) on a trailer - or 250 shinies.

Colonel Angus's picture

didntbuildthis + TAKE THE TRACTOR!!!

I was looking for a picture of Obama having the Nobel Peace Prize with something like

World Peace: you definitely didn't build that

If the tractor is in good, usable condition I'll give you 250 oz. of silver for it.

SRSrocco's picture

More good news in the gold industry..

Gold discoveries not making the grade

The big worry faced by any investor in a mining company is reserve depletion. When the ore is all extracted, it’s the end of the road for shareholders, unless new reserves can be found.

A new report from Metals Economics Group, the mining research outfit based in Halifax, suggests investors in the gold mining industry should be concerned that their prime asset – metal in the ground – is being depleted.

The firm looked at all the significant gold discoveries (defined as deposits containing at least two million ounces) made from 1997 to 2011, and tallied up what miners have found, compared with what they hauled out of the ground during the same period. It isn’t a pretty picture for long term sustainability. There were 99 big discoveries containing a total of 743 million ounces. MEG estimates the discoveries only replaced 56 per cent of the estimated gold mined.

MEG isn’t worried that the world will run out of gold any time soon. The problem for the industry is that it is replacing current, high grade mines in stable locations, for development projects comprising of low-grade, riskier deposits. Long term, this isn’t a good thing for the industry.

------------------------------

Here we see that the Gold Mining Industry is having trouble replacing reserves to match their past and current production.  Not only is the problem of finding decent ore grades, but having the cheap and available energy to mine and produce the metal.  Again... no one is looking at this.

If we consider the following:

1997-2011 Total World Gold Production = 132.8 million oz.

1997-2011 New Large Gold Discoveries = 743 million oz

The remainder they did not include in the report were probably gold resources of lower amount and ore grade.  I believe most juniors with low ore grades and no forecast for commercial production until 2020, will never become mines....a few might but most not.

Roger Godberd's picture

Work in progress...?

Obama....still building!

Roger Godberd's picture

How 'bout them apples?

The previous record for most deficit spending during a presidency was set by President George W. Bush (see table 1.3 in the White House’s Historic Tables). During Bush’s 8-year administration, total deficit spending was $3.402 trillion. That’s a truly extraordinary and reckless sum. It’s also $1.768 trillion less than deficit spending in just four years under Obama. Per year, deficits under Bush averaged $425 billion. Per year, deficits under Obama (according to his own numbers) will average $1.293 trillion — or more than three times as much.

Because the gross domestic product (GDP) nearly always grows from year to year, the most favorable way to view Obama’s deficit spending is as a percentage of GDP. Surely he can’t look as bad in that light, right? 

Well, prior to Obama, our annual deficit spending had only exceeded 6.0 percent of GDP during the Civil War, World War I, and World War II. Except during those huge conflicts, our deficits had never exceeded 6.0 percent of GDP in any year — not during the Great Depression, not at the height of the Cold War defense buildup, not ever. But that’s no longer the case. During Obama’s four years in the White House (and, again, using his own numbers), annual deficit spending will average 8.4 percent of GDP.

That’s nearly double the average annual level of deficit spending under any other post-War president. As the following chart shows, this has truly been a historic presidency — more profligate than any other by far:

https://www.weeklystandard.com/blogs/painful-cost-obama_629745.html

DayStar's picture

Tractor V. Ag

GATA's London Trader who has an excellent track record says silver is due to explode in August.  I guess it depends on how desperate you are for a tractor.  You could buy it, and sell it to the guy who offered you 250 oz when the price of Ag goes up.  Sort of a futures contract. smiley

DayStar

single6's picture

jesses cafe american

What is with jessses love of Chris Hedges?  He post alot of videos of him talking.   Every now and then Jesses takes a bath with the liberal left.

El Gordo's picture

Tractor v shinies

Looks like a pretty good deal on a tractor to me, particularly with the PTO and implements included.  Assuming you have a use for it of course.

Pete's picture

Obamacare

single6's picture

Jeff Synder's book Nation of Cowards

Great book on Rights and guns.  I book floored me when I first read it.  Here is an older interview from lewrockwell.com

Interview With Jeff Snyder

by Carlo Stagnaro

Very often, anti-gun activists claim guns do kill people, while their opposers assure that guns, on the contrary, do save lives. Actually, real statistics and crude numbers seems to agree with the latter, as – among other – John Lott showed in his well known More Guns, Less Crime. Anyway, stats and numbers cannot answer the entire question; rights cannot lie on data books. One should also make a moral argument. Do people have the right to be free? In that case, do they have the right to protect themselves? Finally, do they have the right to use arms for self-defence? If so, it shouldn’t matter whether, according statistics, guns wither kill or save lives. The fact that one should be allowed to defend himself simply excludes that government disarm him.

We have talked of this, and much more, with Jeff Snyder, whose last book, Nation of Cowards (Accurate Press, 2001) is a strong case in defence of the individual right to keep and bear arms.

On September 11, 2001, the worst terrorist act in history was committed without any guns. The terrorists were armed only with knives and box-cutters. Some say that the hijackers found it quite easy to realize their plans; airplane passengers, in fact, can’t carry firearms. Even pilots and cabin stewards are unarmed. What about gun-free airplanes and airports?

The track record of gun-free zones is, how shall we say this, less than impressive: post offices, schools, and now, airplanes. The events of September 11 could not have occurred but for the fact that air travelers are disarmed, and airplanes are a Second Amendment free zone. In no other way could the terrorists have commandeered the planes with box cutters and pocket knives, turned them into flying bombs, and wrought such massive destruction of life, property, and our economy. This is not because the terrorists would have been afraid of being shot and killed by passengers, since they were obviously prepared to die. Instead, they would have known that they would not succeed in carrying out their mission against the World Trade Center and Pentagon, and so there would have been no point in trying that.

So it turns out that depriving people of freedom has its costs. It is hard to conceive of a more graphic illustration.

[...]

So, your rights, you do not need them! They cannot and will not help you, because no government wishes to recognize them (although it may make a show of doing so as long as it thinks it necessary, until most people can be brought around), and it is fine with the state if you spend your life attempting to compel the state to acknowledge and respect their existence. The question is whether you will act free or how you will use your freedom. But take care that you do not throw yourself away cheaply or needlessly, for such a one as the state; choose well how to create good in the world. Seek and speak the truth about what you know about the nature of the state, ignore the state as best you can, refuse its assistance, accept and fulfill your responsibilities instead of seeking ways to shift your burdens to others, and forge the social relationships you want or need to live as you would like without the state’s tender mercies.

[Read the rest here]

[Mod note: It IS an older interview, but please don't paste the whole thing.]

El Gordo's picture

Why post this here?

Well, this is another of life's little expenses we need to take into account when we do our planning.  Liberace in one of his best roles.

treefrog's picture

tractor

i've been looking at ads for tractors for quite a while.  i want one.

i want one, but, i don't need one.  my rototiller is enough for the amount of land i have to work.  a set of discs would be nice.  a front end loader would be nice.  a pto operated tiller would be super.  

...but not really needed on my present scale of things

... but a backhoe isn't something i really need  unless my neighbor sold me a few acres of scrubby woods.  backhoes are good at grubbing out stumps.

there are ads on craigslist from time to time with nice looking small tractors, and if i can talk my neighbor out of a few acres, maybe i'll take the plunge and start small scale farming instead of just large scale gardening. 

besides, if i wait, my AG is worth more, and i have noticed the tractor prices on craigslist are flat or maybe dropping a little.

the power of positive procrastination!

single6's picture

just another reason why I carry

Physical_only's picture

@SRSrocco

You are a wealth of knowledge on metals/mining; some really good info; even though I'm a stacker trying to buy/guess the dips here & there.

Been stacking since 05; a little late to the game; wish I would have paid more attention in 01; but NOW seems like a great time to add if your just starting or relatively new to stacking; a couple of $'s one way or the other in the long run won't matter much.

Just MAKE SURE your not looking for a QUICK $ , don't blow your fiat all at once,  have some fiat ready for any major dip & you'll do just fine.

Always appreciate your well researched reports.

Thanks for you efforts. Have a great weekend.

Cononish1314's picture

I can't help thinking

I can't help thinking of

http://www.amazon.com/Short-History-Tractors-Ukrainian-Novel/dp/1594200440

So, how about "A shorter history of silver production in Kazakhstan"? Has anyone ever written a novel satirising the commodities market [and its pundits]?

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