Back From Break

You may have noticed that I was gone all day yesterday. Eleven, full hours with no phone and no internet and it WAS GREAT! So, what did I miss? Silver is all the way back to....where it was a month ago. Oh, no! The sky is falling!!

Seriously. I haven't even bothered to look over the comments to the previous thread as I'm sure they're full of despondent traders and gleeful trolls. Whatever. As I said yesterday, no one is going to stop me from doing what I do because I know, in the long term, that I am correct. Global central banks are going to print and print in their efforts to manage their way out of this debt crisis. They will fail and, with them, fiat currency will fail, too. In the end, a new international trade settlement system will emerge with a gold-backed unit of exchange at its heart. The only protection that I have against this wealth destruction is my stash of physical metal, which currently resides in a heavily-guarded vault at the bottom of the Marianas Trench.

So what do you do today? You buy the freaking dip, that's what you do. If The Bullion Bank Cartel is going to insist upon giving us all more time to accumulate metal at deeply-discounted prices, I strongly urge you to take them up on it. Lord knows the Chinese, the Russians, the Indians and the Turks are doing so. You should be doing the same. Namely, convert your rapidly-devaluing dollar reserves into hard assets, primarily gold and silver. Forget the goons in the media and the water-carrying shills for The Cartel, gold and silver are NOT in bubbles. That is complete nonsense! Since when does an asset that is currently owned by just 1% of global investors considered a "bubble"? Since The Cartel shills in the media declared it so, that's when. Ridiculous.

And while, we're at it...How come no one besides ole Turd can dare say that QE is all about funding the federal deficit? The "dots" are all there yet no one seems to want be able to make the connection. Countless articles have been written about The Fed essentially owning the entire Treasury issuance past 7 years. The fiscal 2013 deficit is already tracking 20% ahead of 2012 and on pace for $1.7T and suddenly the Fed announces that they're supplying $85B/month ($1T+/yr) in new money...yet no one can see that this is direct monetization of the deficit and debt? It's surreal. It's the real life equivalent of the old fable about the emperor having no clothes. I look around and its as if no one else can see what I see. Bizarre.

Oh, well, I for one choose NOT to bury my head in the sand and hope for the best. I will use my God-given observation and reasoning skills and think for myself, instead. This leads me to the financial protection of gold and silver and nothing The Cartels does can shake me from my positions.

To that end, yesterday was a classic. The lack of follow-through buying on the latest QE announcement emboldened The Bad Guys to raid price early Wednesday evening. Once they tripped some stops by moving price below 1705, it was on. The raid was particularly grotesque in silver where the OI remains dangerously high for JPM. In fact, on Wednesday, the total silver OI surged once again to 144,066. This long-standing and growing open interest undoubtedly frightens The Big Shorts and they knew a raid must be initiated. Thus, the pounding in gold wasn't nearly as substantial as the pounding silver took yesterday. I wait with great interest for yesterday's OI totals. They should be released, as usual, by about 2:00 EST today. In Harvey parlance, how many silver leaves were shaken from the tree yesterday? I can't wait to find out.

Along with the OI numbers, we'll also get another CoT later today. It won't be nearly as dramatic as last week simply because the reporting period saw very small changes in both OI and price. Nonetheless, you never know how the internals may change from week-to-week so be sure to check back later today. I'll have another podcast to release and we'll surely be discussing this latest CoT.

And, finally, just a few more words about price as we head into the final days of 2012. Let's summarize a few things:

  1. Though the inaction behind-the-scenes is infuriating, I still expect vindication for all of us in 2013.
  2. I had thought that gold and silver would finish the year at or near the top of their 2012 ranges with gold near 1800 and silver near 35. This is certainly looking less likely but I would remind all of the trolls that there are still quite a few trading days left in the year.
  3. And as recently as a week ago I laid out why I felt December would be a solid month. Namely, given the overriding fundamentals, there is no reason to think that the metals would close 2012 by trending downward toward the bottom of the ranges. This makes no sense. If you look at 2012 as a year of price consolidation during a time of little unsterilized Fed action, price should be trending higher into 2013, a year which is quite obviously going to see substantial unsterilized Fed action.

In 2012, Gold has traded in a range roughly bounded by 1550 at the bottom and 1800 at the top. The median line for this range is 1675. Note that the recent selloff has not broken price down below this level and I do not expect any further selling to breach this level, either. Instead, I expect gold to rally over the remainder of the year. Will me make it to 1780-1800? Who knows? Does it matter? Really? With all that's set to happen in 2013, a year-end close of 1730 vs 1780 matters very little.

The same could be said for silver. For 2012, it has also been rangebound in a trade between 26 and 36, with a median line of 31. Again, given the fiat currency situation for 2013, the continuance of extremely tight physical supplies...and...other factors..., why would we expect silver to break down through $31 and head toward the low end of the range? Exactly. There is no reason to expect this and, therefore, I don't. Silver should/will continue to consolidate here and finish the year somewhere between 33 and 35. Then....it's on. 2013 is going to be a doozy.

So, relax or, better yet, do what the LTs say to do: Chillax. This is a combination of "chill" and "relax". Take some time away like I did yesterday. Enjoy the season and search for joy in things unrelated to money and finance. Be at peace knowing that you are doing the right thing.

As I mentioned above, please check back later today or tomorrow for another exciting TFMR podcast as well as some commentary on the CoT.

Have a great day and a great weekend!

TF

492 Comments

Turd Ferguson's picture

Latest from Bill Murphy

MODERATOR

via our pal, Rahul, at alt-investors:

!

Mr. Fix's picture

Well, that was just ridiculously lucky.

I've been trying to log on for a while, but the site seems very, very slow.

I'm wondering if it's just me?

Anyway, by now I should at least get to the obligatory

I am first! smiley

Now that we've gotten that formality out of the way,

I would like to thank the gang at TF metals, and its fearless leader for the great service he is providing to humanity.

Secondly, I would like to thank everyone for a great time last night, I spent more time going to my "inbox" then doing my usual research and reading, but it was a blast.

I've still got a few notes to return, but alas, I am about to get in my car and go fix some stuff.

Have a great day everyone,

I for one am looking forward to a relaxing weekend,  since it seems like I am just about caught up

with the deluge of repair orders in the aftermath of Sandy.

I'm looking forward to getting back to “life as normal”.

(Although I'm still trying to figure out exactly what that's supposed to be).wink

prius_driver's picture

who broke the previous thread???

that sucked

achmachat's picture

ha

it was Blythe, of course

Silverman's picture

New thread

Thank god it's working. 

MrGuboci's picture

First !

Almost 1st !

Silverman's picture

(No subject)

Groaner's picture

I would have a Viagra moment if we see some short covering

today..

beat down and up, need a break.

Dr G's picture

 Silver is all the way back

 Silver is all the way back to....where it was a month ago. Oh, no! The sky is falling!!

I don't think the sky is falling, but I do think that it is okay to admit some emotional despondence as a result of the price movement.

Why not paint the whole picture? Silver is all the way back to...where it was a month ago...and this happened on a day when the FOMC announced an additional $45B/month printing and alluded to it occurring for the next 3 years.

Silver's movement alone is just normal for silver. Silver's movement after additional QE is a bummer. It is what it is. The Cartel at this point seems to have plenty of paper to throw around. Maybe it's their last dying gasp, maybe we are all idiots and this will go on for decades. I don't know. I just buy physical and put it away.

Gramp's picture

Dedicated Turd!

Family day, late night Pod cast over at Turd Talks Metals, http://www.turdtalksmetals.com/

You are a busy Turd! lol

  Hey TF posted this vid last week, and I linked it to a friend of mine . For some reason it resonated with him quite well.  have a look!

Urban Roman's picture

Re: Latest from Bill Murphy

Manipulation?

Why, I was almost convinced that somebody dredged up 10 or 15 Spanish Galleons full of Ag and Au, and just had to sell their entire contents at 8:00 PM on a Wednesday! All in the same 100 milliseconds Wednesday evening.

nice day to add to the stack

Just A Regular Guy's picture

From KWN

Hey boys and girls,

Obviously I am bullish on the metals (like a fair few of you). I listened to the Steve Leeb interview on KWN a few weeks back and did some follow up on the "Homesteak" mine in Dakota (as owned my Mr.George Hearst - please someone post a Deadwood clip! smiley).

Check it out http://www.gold-eagle.com/editorials/great_crash.html

Also http://en.wikipedia.org/wiki/Homestake_Mine_(South_Dakota)

I am bullish on the miners too obviously. Anyway take care boys and girls!

Peace

Groaner's picture

Again the PIG is going down even more and the metals

barely move.. makes you wonder.. 

tyberious's picture

Question of the day

Why defend the $35.00 line so hard? I get 1700-1800, because above that Au quickly moves to 1900+.

But Ag, is it about options, is it about cash settlements, is it some MIT grads maginot line

or as Max Kaiser and others have alluded to, $35.oo Ag is related to derivative contracts and IR swaps?

Anyone?

Rui's picture

GG and GDX Jan 2014 PUT option

FWIW, I notice the PUT volume on GG Jan2014 @30 and GDX Jan2014 @45 surged quite a bit yesterday. The stats is from "http://www.optionistics.com/f/option-prices".

binzer's picture

this whole

Bill Murphy big event and Turd's HEH.

It reminds me of kids playing games for attention and to get a reaction.

'I got a secret, but I can't tell you'....'oh please, what is it?'...'sorry, I just can't say'....and on and on

Maybe because there is nothing to tell......please prove me wrong.  

Xeno's picture

The Sky Is Falling The Sky Is...

This all just seems like the usual games pre-opex. This weekend will be filled with all the Christmas parties, party hardy dudes, and next week is...crying triple witch expiration week and... crying the EOTWAWKI. So, longs sell to finance parties this weekend and next week shorts cover and everyone else buys gold for EOTWAWKI.

I'm stacked and feel fine.

alert's picture

BTFD

I picked up 15 maple leaf yesterday.  Bring it on!  Drop some more, papa is waiting to buy another batch.

thurd aye's picture

oh yeh,he forgot

Did you notice in 50 minutes of talk Marc Faber didn't mention silver once.What's the significance of that? Ammo for someone no doubt.

Nana's picture

As Bill Murphy Said

There is no rule of law for the big banks. They are allowed to steal, manipulate  and do whatever they want to do with no consequences.  So much for equal protection under the law.......

Turd Ferguson's picture

Please go away

MODERATOR

Or simply be patient. It is not an exaggeration to say that there are lives at stake.

Response to: this whole
ballyale's picture

QE and the drop in PMs right after.

Everyone posits that with new QE then that increases the money supply and that, therefore, it dilutes the Dollar. Thus, the PM's must rise, only right after any new QE, mostly doesn't. Why is this?

Let's take a look at what QE really is? It is the Fed buying Bank bonds at full value, when they are worth about 30% of their original price. Though, it doesn't change their mark to "Fed" value, it does free up a huge amount of cash that was tied up in those mortgages.

Guess where that money could have gone. It wasn't into creating new loans and expanding the economy. My guess is that it was getting out of long equities and/or shorting the PM's and PM equities.

It then takes a number of weeks for this to consolidate on the downside before resuming the bull market in PM's.

FWIW, just my guess. It's just that I haven't heard this thesis on the board.

Bally.

the_circle's picture

Santa

Whenever QE infinity (I can't see the sideways-8 infinity symbol on my keyboard) was announced and silver went up 5% or whatever I was jubilant, and went out and bought my father a new dining table and chairs and gave him a thousand bucks out of my savings account as I though we were hitting $40+ for sure.

Is there any, ANY chance that if I write to santa he'll refund me for the dining set and money? 

treefrog's picture

"Why defend the $35.00 line so hard?"

i seem to remember some noise (from the wynter benton crew?) some time back that if silver stayed above $36.00 for a certain number of days, it would trigger some ugly derivative consequences for jpm.  if there was anything to that, $35 may be a first line of defense for $36.    ...or maybe the derivative threshold may have moved down in the interim?

since this line of speculation is based on wynter benton, it might be best to keep a grain or two of salt on hand.

Mickey's picture

ballyale

bet some goes into pockets of those running the banks for a job well done

Nigel Black's picture

@the_circle

You should have asked Santa 5 weeks, 6 days ago (when you joined) that question.

Turd - you have so many new people who have joined recently and it is great to see them participate in our discussions.  I am curious, however, why they've all decided to join the site and come out now?

Swineflogger's picture

Better Late Than Never

@Xty

My bride and I were so intrigued by your recipe (posted 12/3/2012) that we made our first batch a couple of days ago.  OMG!  There are no words to describe the wonder of your concoction.  We saved a couple of jars and gave the rest away as Christmas gifts.  You just can't beat putting two favorite things in the same jar.  Thanks again for the suggestion.  Merry Christmas to all.  In closing, I have been focusing lately on my blessings and trying to put the worries and frustrations at arms length.  It helps.

Swineflogger

EDIT:  WHISKEY BACON JAM :)

Xeno's picture

Bally

I think you may be correct. All we know is that the Fed is paying the banks for their reserve deposits and the Fed is buying the banks junk at full value and that the banks are not lending into the economy. So where's the money going? Probably a good chunk into the Fed so the banks can repair their balance sheets with risk free profits and if the mortgage mkt. is any indication, they have a long way to go. The rest prolly goes to the corps. and govt. as, um, donations and for insider dealing and lets not forget the massive funding the military and black ops needs too.

It looks like it will be a while before much funding will go to where it would do the greatest economic good.

jmho

edit: from http://www.goldmoney.com/gold-research/newsdesk/federal-reserve-policy-risks-catastrophic-loss-of-confidence-in-dollar.html

Does the concept of central bank accounting – as if they are just like any other bank – make any sense for institutions that can print as much new money as they see fit? And at what point does the shattering of this pretense lead to a dollar crisis?

Sooner than many people imagine we expect, but it depends on crowd psychology. Each time the Fed resorts to these ploys, it is slowly chipping away at the dollar “building’s” foundations. For a while, it may successfully be able to do this, without the building collapsing. But at some point, the building will collapse – and gold, silver, platinum and palladium and other hard asset prices will surge.

Wizard's picture

Every Once in Awhile

The Fundamentals are a good thing to bring to the top.

And No I do not Sell Precious Metals

  1. No purely fiat currency in all of human history

has ever survived…. EVER

2. The average life span of a purely fiat currency is between 10 and 30 years.

3. The U.S. Dollar has been a purely fiat currency since August 15th 1971…..41 Years.

And Fundamental 2.

http://i485.photobucket.com/albums/rr217/Stew_026/Silver%20Fundamental/SilverMarket.jpg

meegoreng1's picture

Turd says...

"With all that's set to happen in 2013, a year-end close of 1730 vs 1780 matters very little."

Turd, do you have any inside info into why you think that 2013 is going to be  another one of your explosive period which hasn't panned out yet in the past? If you do have some inside info, does it have anything to do with an entity outside the EE that is going to TAKE DELIVERY of their metals? Because you know that is the ONLY way this shenanigan is going to end!

If you do, GREAT! IF not please do not set our expectations high just like many others esp the KWNers.

I appreciate what you do for this community. I enjoy being here knowing that there is a family of people that do understand what is really going on in this world and you have created that environment through your site.

As I have written in my previous post, setting an expectation which fails to materialize, discourages PM buyers from buying more. In fact, many throw in the towel, esp the newbies.

I truly believe that this is a long term battle in price discovery. While we think in terms of months and years, the EE which has its tentacles in every aspect of our lives plans in terms of decades and centuries! If that last sentence is hard to believe and comprehend than I think we have no business investing in gold and silver. This rabbit hole goes down deeper than we want to believe. This manipulation has been going on for decades. I can see them kicking the can down the road for many trillions more in debt before it unravels. The DPM (Department of Perception Management) can 'manage' gold and silver prices to a small 10-20% a year ascent.

At the meantime, while we try to set our  expectations to a long term basis, we should enjoy everyday as each day is a blessing to us. We can also encourage others to also protect themselves from this inevitable event but without setting their expectations too high.

Had to get this off my chest.

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