Tame, Tedious and Tiresome Tuesday

At least it's not "Terrible"...at least not yet. The only thing of interest, so far, was when gold had the audacity to approach 1620. The banks quickly beat it back and have seemingly decided to take the rest of the day off. Let's see if we can find something else to talk about.

First of all, the metals. We've had a couple of good days in a row and a nice little pop this morning. Apparently, that was all that would be allowed for now as gold was suddenly pressing up against 1620. There would appear to be quite a few stops between 1620 and the top of the range so The Cartel appears intent upon keeping a lid on things here. Silver is facing a similar issue. Having rallied over $1 from the Friday lows, it is now back into the very center of its 3-month range. It needs a propellant to shove it through 28.40 and on towards 29 and 30. Let's hope we see some propellant soon.

By far, the most interesting market right now is crude. The chart is compelling and the fundamentals are certainly heating up. For now, The Olympics have distracted the global press so everyone seems to be ignoring the major battles in Syria. For example, bubbling just below the surface is this: http://www.sltrib.com/sltrib/world/54635926-68/syrian-rebels-government-syria.html.csp. Of course, the Iranians aren't too excited about this development and have supposedly issued a warning to the U.S.: http://www.debka.com/article/22250/Iran-threatens-US-Turkey-after-Israel-with-spreading-Syrian-conflict.

You may be wondering why this is so important. Mainly, it's the geo-politics. We have the U.S., NATO, many Arab states and Israel on one side. The Assad Regime, Russia, Iran and even China on the other. First of all, the chances of a miscalculation or accidental escalation are high. All of those ships and aircraft in the same area can be very dangerous.

But, for me, the main thing to understand is this...once again brought to you by Admiral Painter:

Why is Russia so actively engaged in opposing NATO and supporting not only Syria but Iran? Can they be "talked into" standing down? Not likely. Why? Do you realize that crude oil and natural gas now account for 75% of the value of all Russian exports? Because of this, Russian industry and government (and political stability) is supported almost entirely by the revenue generated by energy exports. To mollify the masses, Putin has recently promised a new Keynesian-style stimulus program that increases government pensions and puts a freeze on domestic gas prices. The estimated "cost" of this is about $200B over the next 5 years. From where will this money come? Oil and gas exports! And it's estimated that the Russians need a crude oil price of at least $150/bbl to be able to meet these obligations. Clearly, the Russians have an interest in not only maintaining the current level of prices for oil and gas, they need to see higher prices, as well. Uh-oh.

So, here's your current daily chart. What was once resistance at $88 has now become stout support. A move through and close above $93.25 will set the stage for a run toward $98 and $100.

And here's a grain update for you. Things are sideways so far this week as the markets anticipate a major crop report on Friday. Soybeans, which still have time to be partially-rescued if decent rains can develop in the next 10 days, have been under significant pressure now for over two weeks and are close to completing a 50% retracement of the move from June 1 to July 20. This retracement will be complete near $15.50/bushel and that level would close the final gap on the chart, too. Let's see if we can get there. Corn, where most of the drought damage has already been done, is consolidating in a pennant ahead of the Friday report. It's poised to go either direction. Which direction will it be?

Finally, just a few random items. First, our pal Jim Quinn has typed out another, excellent two-parter. Both segments are well worth your time:

http://www.theburningplatform.com/?p=37087

http://www.theburningplatform.com/?p=38476

And because you likely have this stuck in your head now, I present this as a public service:

(Boyohboy, that takes me back. Maybe 1986 or 1987. A young Turd wooing a future girlfriend. Wow, where does the time go? Anyway, the Great Liberty Devito was on drums for Billy back then. He sure is fun to watch. Timeless music and timeless memories.)

OK, back to work. This story from ZH is well-written and, though it's a rehash of much of the same stuff we talk about daily here in Turdistan, I present it to you nonetheless:

http://www.zerohedge.com/news/guest-post-has-perfect-moment-kill-dollar-arrived

And lastly, my pal Big Red in Richmond sent along this chart yesterday. For me, it's a visual illustration of The End of The Great Keynesian Experiment. The accumulated debt is now so great that additional dollars of deficit spending are having a decreasing level of "effectiveness". If I were Romney (and I thank The Good Lord that I'm not), I'd publish this chart every day. I'd hand out pocket-sized versions at all my rallies and I'd make it the "poster child" for all of O'bottom's keynesian failures.

Alright, that's it. As I go to publish, I see that the metals are stable at 1612 and 28.15. That's OK. We'll live to play another day. Crude, though, is rolling and breaking out at $93.60. Again, IF it can close above $93.25 and not fall back below tomorrow, I would expect the next move to take it toward $98 and maybe even $100. Watch closely. Have a great day!

TF

p.s. Here's a little more Billy Joel for you. As a bonus, this video comes from the 100%-outstanding, 1980s television series "Moonlighting". Any Turdites too young to recall Moonlighting should check it out on Youtube or Hulu today!

142 Comments

G00dfella's picture

haha

First!

philly's picture

Still stacking...

Loving the site, loving the advice, loving the daily commentary from so many knowledgeable folks!

Short Stack's picture

SECOND ?

Nope, just another Thurd.

El Gordo's picture

Read it first

At least I read the post before commenting.

Fat Willie's picture

Thanks Turd

And a top 10. Whoopeee.
Almost as good as seeing silver up, and breaking a year long weekly downtrend.

Rock n roll

FW

tobydaniel's picture

Yep

The paint is drying just fine in the silver market. Up to the low 28's soon to be followed by the infamous 27.50. Don't let these small hamster moves get you excited. They are just exciting enough to keep you running in circles. Ahhh, cant wait till after the elections....then and mostly likely only then will we hit the 30's. Until then, save your energy on getting excited on every 20 cent move. lol. We have been there over 100 times now.

opticsguy's picture

Link to Forbes article

http://www.forbes.com/sites/realspin/2012/08/05/revenge-of-the-zeros-the-battle-between-ayn-rand-and-collectivism-reaches-a-climax/

They don't need to make parts 2 and 3 of the "Atlas Shrugged" move.  We are already living part 2.

Turd Ferguson's picture

Thank you

MODERATOR

And I lovingly accept donations in order to keep the site going smiley

Response to: Still stacking...
boatman's picture

2008-09

of course, US treasuries went UP as a safe haven play in o8-09.....

at some point soon........they will not be perceived as that........

wait til moody's n fitch joins SnP on their US downgrade last aug to AA+.

ALL pension funds must then exit, as they are mandated for AAA debt.

thats when the REAL fun starts.

Galearis's picture

fourth

Best yet pour moi!

G.

ClinkinKY's picture

@ TF-Moonlighting

Ah, that "up and coming" actor Bruce Willis. Good series, unlike 95% of the crap today. Wonder if he ever made it big in movies?   /s

dropout's picture

TE of TGKE

The End of The Great Keynesian Experiment

"additional dollars of deficit spending are having a decreasing level of 'effectiveness'."

Put into economic jargon;

The diminishing marginal productivity of debt. = The more you print, the more you must print, or die.  

It is now estimated that to gain a $1.00 rise in GDP the debt must grow by $2.63

The "Wall" is fast approaching! 

tread_w_care's picture

You know what is Tedious and Tiresome?

this crap:

http://www.ft.com/intl/cms/s/0/312bf416-d1a7-11e1-bb82-00144feabdc0.html#axzz22sXUjNnn

Google "Cash out of gold and send kids to college" to bypass the registration wall.

Another attempt to shear the sheep.  I still have a shred of normalcy bias left, and, due to rules of current employer 401K plan, cannot cash out even at penalty.  So I do the next best thing I can and heavily weight the portfolio toward physical bullion funds, Sprott's two, PSLV, PHYS, CEF, and GTU.  The article above causes that last little shred of normalcy bias/doubt to flare up. 

"What if we're wrong?  What if they really can find a way out of this and keep the music playing 10, 20, 50 more years?  What then?  What will my family and friends think of me?  How badly damaged will my long term financial plans/capabilities be?"

Be right and sit tight is easy to say . . . hard to do. 

Beastly Stack's picture

Painful Tuesday

I have to stop trading Gold,I have a great position but added to it today @1620.I want to puke watching evrything else go up especially Oil on the verge of blowing through 94-.

It is difficult fighting the Cartel but I think they are about to pay me in a big way!

I like to post here to vent at times,I apologize for sounding like a whiner!

Good Day.

ClinkinKY's picture

(60th Senate Dem in 2008) Al Franken Elected By...

...felon vote.  Yes, he's a comedian but this is NOT funny.Just a taste of what's  to come this year.

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

Campaign 2012

York: When 1,099 felons vote in race won by 312 ballots

In the eyes of the Obama administration, most Democratic lawmakers, and left-leaning editorial pages across the country, voter fraud is a problem that doesn't exist. Allegations of fraud, they say, are little more than pretexts conjured up by Republicans to justify voter ID laws designed to suppress Democratic turnout.

That argument becomes much harder to make after reading a discussion of the 2008 Minnesota Senate race in "Who's Counting?", a new book by conservative journalist John Fund and former Bush Justice Department official Hans von Spakovsky. Although the authors cover the whole range of voter fraud issues, their chapter on Minnesota is enough to convince any skeptic that there are times when voter fraud not only exists but can be critical to the outcome of a critical race.

Read more:http://washingtonexaminer.com/york-when-1099-felons-vote-in-race-won-by-312-ballots/article/2504163

Dr Jerome's picture

kids games

I recall a game I played with my best friend and our younger siblings--"Economy." We started out making counterfeit money--drawing as well as we could (both our dads were artists) and then started buying and selling our toys back and forth. It was a blast--for about an hour until our younger brothers figured out they could draw a $100 bill as easily as a $10. Not to be out done my friend and I started drawing $1000 bills. But that was ineffectual against our keynesian little brothers who began mass producing $1000 bills (I guess we didn't think there was anything bigger in 1969). The game just wasn't fun anymore and it collapsed as we threw everything in the trash and went outdoors to play in the pine forest of northern New Mexico. Those were the days! But who would have imagined that we learned all we needed to know about modern economics, collapses, and living off the land in an hour.

ClinkinKY's picture

@ Dr Jerome---Kids Games

You're eminently more qualified than Ben Bernanke, based on this anecdote.wink

Physical_only's picture

FYI.....interesting

http://www.caseyresearch.com/gsd/home

The U.S. Mint had a sales report. They sold another 1,000 ounces of gold eagles...and 585,000 silver eagles. Four business days do not a month make, but as of yesterday, the silver/gold sales ratio for August at the U.S. Mint was a bit over 117:1. I sure do hope you are getting your share, dear reader.

Turd Ferguson's picture

Updated gold chart

MODERATOR

Looks helpful.

Sisyphus's picture

Anyone remember the Philips Curve?

Which was supposed to be the tradeoff between unemployment and inflation. It was popular with economists in the 1960s, and they would merrily calculate how much deficit spending was required to reduce unemployment by (say) 1%, even if the cost was a rise in inflation of (say) 0.5%.

Then in the 1970s a given level of deficit caused higher inflation AND higher unemployment. At which point Milton Friedman and economic reality managed to kill it off.

Don't say idiot Keynesian economists have brought it back from the dead?

Zombietime!

StevenBHorse's picture

Answers to some questions

"What if we're wrong?  What if they really can find a way out of this and keep the music playing 10, 20, 50 more years?  What then?  What will my family and friends think of me?  How badly damaged will my long term financial plans/capabilities be?"

1)  We aren't

2)  Then US outstanding debt would be 10, 20, or 50 years would be $28T, $60T, and $572T (its an exponential function plotted against US debt outstanding .97 R^2 value)

3) What then with outstanding debt at the number above (gold correlates with debt at .96 R^2), gold will be higher not lower

4) Grow a pair

5) Not enough information (your age, health, profession, earning potential)

Be right and sit tight is easy.  If you can't sleep at night because of your position, then you have too much.

Nana's picture

Timing

Better a day to early than a day to late.

Nana's picture

Not Tame

SHADE the Motion Picture 'Official Trailer'

dropout's picture

Anyone Remember The 'Misery Index'?

Misery Index = add unemployment rate and inflation rate and you have the Misery Index. 

This index gained popularity in the early eighties. The long time (1948-2008) average is 9.97

Todays official rate using official stats;  8.3+1.7 = 10.0  How convenient is that! Very close to average!

Charles Bideman of TrimTabs pronounced on his blog yesterday, that the BLS jobs report is "It's nothing more than a wild assed guess!"

So lets use John William's shadowstats; 22.9+6.9 = 29.8  Little wonder that trust has been lost.

There has been NO recovery on Main street. According to the "honest" misery index above, things are ever increasingly going from bad to worse. With NO recovery on the horizon, other than political 'hopeium' and wishful thinking.   

Xeno's picture

OWTH!

From part 2 of The Burning Platform article, a quote from Jessie;

 

"

The Fed is now engaged in a control fraud, and what appears to be racketeering in conjunction with a few big investment banks. They may have entered into it with good intentions, but they seem to have been turned towards deceit and corruption. This is not an historical event, but an ongoing theft in conjunction with a number of Wall Street banks, and politicians whom they have paid off through a corrupt system of campaign financing and influence peddling."

"We are now in the cover-up stage of a scandal, similar to Watergate when the White House was stone-walling. The difference is that the corruption and capture of the government is much more pervasive now, and includes a significant portion of the mainstream media, so meaningful reform is difficult. Most of what has transpired so far has been designed to distract and placate the people in their righteous anger. The Fed deceives the Congress and the public, turns a blind eye to glaring conflicts of interest, and is essentially debasing the currency while transferring the wealth of the nation to their cronies. And still the regulators do not enforce the laws they have, and Washington drags its feet while accepting buckets of cash from the perpetrators." -Jessie

 

Couldn't have said it better.

A famous quote from The Red Queen; "Off with their heads!"

 

 

 

 

The Green Manalishi's picture

Gold Trade Has 10 Times As Much Upside As Downside

Jeff Clark has an interesting take on recent moves in gold. He recently wrote onGrowthStockWire.com

“Sometimes you just have to scream. ‘Come on!’ I yelled at my computer screen as the symbol “GOLD” streamed across it in bright green lettering. ‘Just a couple more bucks!’

Click Image to Enlarge

The precious yellow metal was breaking out of the chart pattern I showed you last week. If it could just close above $1,625 per ounce, it would set the stage for a much larger move higher. And we could finally buy it aggressively – which is what I’ve been waiting for since gold peaked above $1,900 last August.

 

But it didn’t happen. Instead of breaking out, gold “faked out” and stumbled back into the consolidation pattern that has trapped its price for the past three months. Here’s an updated chart…

Gold did manage to break out of its consolidating-triangle pattern (the blue lines) last week. That breakout ignited a move right up to resistance at $1,625. Remember… that’s the price I said gold had to get over to shift into “rally mode.”

more: http://preciousmetalsdigest.com/wordpress/2012/08/03/gold-trade-has-10-times-as-much-upside-as-downside/

G00dfella's picture

GSR

I'm paying very close attention to the GS ratio.

When we go under 57 I think the GS ratio will be going to 30 fast.

Swineflogger's picture

FWIW

http://www.latimes.com/business/la-fi-gold-bars-20120803,0,3466318.story

This story about the UST auditing the FRBNY alleged 530,000 gold bar inventory (including drilling bars to find salted inventory) was written and posted by the Los Angeles Times August 2nd.  I live in a tiny town in Southern Oregon.  This LAT story was reposted on the front page of our local paper August 6th.  My observation is that things we here in Turdville talk/write/think about daily are slowly bubbling  to the surface of this cesspool we call Contemporary America.  Maybe there is hope yet.

BagOfGold's picture

Jeffrey Christian...

on BNN...the "presstitutes" of the north...CFTC to drop silver pricing probe...

http://watch.bnn.ca/#clip735116

The guy's a dork!!!...

Bag Of Gold

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