Post-Bernank Post

Sure. Fine. Whatever. Taper this, you lying sack of MOPE!

I think it's pretty funny that in The Bernank's "prepared remarks", there was language that caused the  metals to rally...all the way up to a London PM fix of $1408.50. Then, because of some political posturing Q&A, the metals immediately turned around and headed back to unchanged. And then went lower. And lower still. And when the FOMC minutes were released at 2:00, you'd have thought that The Bernank had personally reneged and decided to in fact sell $85B in bonds every month going forward.

The only "tapering" I saw today was the shiny point on the top of LIESman's head. Other than that, nothing has changed. But, of course, that doesn't matter. What matters is that the HFTs and the EE are in charge and the paper price of metal is all over the place. What's next? Well, as posited yesterday, there remains a possibility for a stop-running drop through the $1320 lows of April 15. IF that can be pulled off, we'll see $1280-1290 real quick. The key level to watch is $1350. Price has rebounded from there several times in the past 5 weeks as it seems to be a level of considerable physical demand. Watch $22 in silver, too. It was support, then resistance and now it is support again. If it falls, we'll see $21 again before you can say "unallocated ponzi scheme".

Providing some hope is copper but, in this age of total reality disconnect, who can say for sure that a rally from DrC really means anything at all?

We have another CoT report due on Friday and we now have the numbers upon which the report will be based. For the reporting week, gold was down $47 and, though open interest fell by 7,000 just yesterday, total OI still managed to grow by about 2,300 contracts. In silver, though price fell about 93¢ for the week, OI also rose by nearly 4,000. It certainly would appear that this week's CoT will once again paint an increasingly bullish picture. We'll see.

Speaking of the CoT, one of our resident experts on the subject is JakeBlues. Jake posted a different sort of comment to the earlier thread and I thought it deserved attention here. Read this and note the very interesting correlation Jake discovered between the yield of the 10-year note and silver prices. http://www.tfmetalsreport.com/comment/314580#comment-314580

Lastly, just a few words about this "tapering" nonsense. First of all, as you know, the Fed cannot and will not end QE. They can't do it without driving interest rates well beyond untenable levels and, by doing so, they would bring about the rapid downfall of the current political/government and banking system. For example, if the current interest on the national debt is $445B/year at 3% interest and a 5-year average maturity, what would be the interest cost at 6%? Or 8%? And how much additional borrowing would be needed to carry these costs and offset the drop in tax revenues that would come with the slowing economy that higher rates would bring?

Furthermore, all of the "tapering" discussion centers upon the overall QE number of $85B/month. It must be noted, however, that the current QE plan is divided into two parts:

  • $40B/month directly funneled to Primary Dealer banks through the 100¢ on the $1 purchase of near-worthless Mortgage Backed Securities, left dying on their balance sheets from the Great Financial Crisis of 2008.
  • $45B/month of direct monetization of U.S. Treasury debt.

What if the "tapering" that is being mentioned only applies to the corporate welfare MBS purchases? What if the Fed were to scale these back a little? They could cut the MBS purchases in half and claim "monetary prudence", all the while the direct monetization effort would continue unabated. Sure, there'd be less money left over each day to pump into the ES but there would still be $65B/month or almost $800B/year to prop up the treasury market. That sure sounds precious metal-negative, doesn't it?

Anyway, the moral of the story is: DON'T FALL FOR THE SPIN AND MOPE. Use your brain and your God-given gift of good sense. The End of The Great Keynesian Experiment continues to unfold in front of us. Keep using this time to prepare accordingly.

TF

310 Comments

Turd Ferguson's picture

Riff-Raffle update

MODERATOR

We are now up to an impressive list of over 30 prizes, including not one but two 1-ounce gold coins. Pretty cool stuff.

AgNovice's picture

2nd? or is it 1st

Turd is always first. I'll take the second.

"A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed."

Don't forget to stack base metals as well as precious ones.

That_1_Guy's picture

3rd

Thanks Turd!!!

Sweet...just dropped in to say hello...and lookie here.

Great one Sean. Shout out for the raffle?

Harvey... great piece.

GUY

2x gold 1 oz coins....High rolling...

AlienEyes's picture

5 ?

#5?

NO!

Four!  smiley

Libero's picture

Oh my God Oh my God!!!

I made the top ten. Quick!!  I can't believe it!  My life is complete.

¤'s picture

Regarding Tapering /TF

Edit: Just posted this in previous thread before this one. (figures)

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

Couldn't agree more regarding your comments yes

It wouldn't take much to spin and satisfy the markets/ politicians/ citizens and the MSM with MOPE about billons in reductions in Fed spending even if it wasn't a significant or a vital reduction.

It's all about MOPE. 

The flip side of that is the USD will get stronger if the perception is US belt tightening and budget/deficit reduction etc.

They might reduce and gradually taper QE/MBS with one hand while doing something different or unnoticed with the other hand.

Like reducing the MBS by $15-20 Bln yet increase the UST monetization by $5-10 bln for a net overall MOPE reduction of approx $120 annually if the MBS reduction nets out to $10 bln/month.

They'll spin the big number hard one way while giving quiet reasoning on the other hand for the UST purchases.

MOPE magicians.

The Watchman's picture

True

6526640693_407ffa5b45_b.jpg

ag1969's picture

Libero

It's your lucky day!  You might want to consider some raffle tickets!

8th amendment:  Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.

sengfarmer's picture

top ten!!

Yeah baby.

Howard Roark's picture

Uuuuppppsss 11th

Just 11th...

Salut,

HR

p.s. - 10th good heavens!!! nice

ctob's picture

Tell me lies

tell me sweet little lies ...

sengfarmer's picture

prize

Turd, I'll donate 200 ginseng capsules.  This is 5 year old ginseng , high quality, high potency from my own ginseng gardens :).

This is a one year supply. The standard dosage is one a day for the first two weeks and then one every other day, or a week on and a week off.

argentus maximus's picture

It is all waffle and smoke.

It is all waffle and smoke. I won't even read what he said, I never do, because I learned long ago the disinformation will reduce my performance, rather than add to it.

Though over the following days the message  still gets to me anyway rather like a contagious infection of thinking.

Here is what I see looking ONLY at the charts: 30 yr bond topped a long time ago, rates are rising, stocks are at new highs in a classic non-confirmed top though will rise a bit more, gold is bottoming/has bottomed, these asset classes will consolidate and retrace in Q3-Q4, and next year will begin to demonstrate with clarity what has really been or not been fixed in the world economy, ...... and Ben is resigning before it all gets really bad. 

JackPutter's picture

Repost from last thread with a little edit

That the "spot price for gold" is actually the spot price of promises made on the futures market.  The futures are themselves derivatives of the underlying assets they are supposed to represent.  It is blatantly selling what you don't have. 

The prices of these futures (paper promises are the Kitco price) are a little high when taken into consideration the risks of MFGlobal and PFGbest, which are extraordinary events of loss.  Especially since the COMEX has shown that it will not step forward and warranty the deals. 

Hence the promises were broken.  That is a HUGE risk in my book.  That for every price rip down it further separates itself from the actuality of getting metals-to-hand.  This is why the premiums continue to grow.  

There are real sales of ounces of gold happening above FRN-$1500.  The price limits can be seen on Ebay with the buy-it-now options available.  If you see a buy-it-now this means you are the first to see it, or everyone else who has have already passed on it.  There are bidders who are bidding for actual delivery. 

The Ebay buy it now sales are your Ask, and the bidding sales ongoing are your Bid.

We must separate our thinking (A challenging thing to accomplish.) from the expectation of fiat-price (A paper promise of value with the specified loss of %2 per year) for the promise of assets. 

Wallace Hartley's picture

Timing of Silver Purchase

I realize that 'today' is always the best time to buy PMs, but I was considering making a sizable purchase (for me anyway) sometime around this week's option expiry.  It has been tradition for me to buy on expiry day at around the time the COMEX closes (I live in AZ so it's around 10-10:30 AM for me).  There's a large POMO scheduled for tomorrow, nothing scheduled for Friday, and a 3-day weekend coming up.  My question to Turd and Turdville (Turdvillains?) is when (besides today) would be the ideal time to buy?  Any advice is much appreciated by myself and my family...

dumpster's picture

taper

since q-1  the word taper has been used and the folks fall for like bees to honey

the only taper we see here is the taper of bernackeeees  head so it fits way up his assssss

ancientmoney's picture

Gold and silver will continue to be suppressed . . .

until the bankers have drained all phyzz from the ETFs and anywhere else they can pull it from.

They seem well on their way. 25% of "inventory" is gone already. That could mean 75% of the real PMs is gone . . .

This must happen so that the wealth, power, and control of the financial system can continue as at present, after the absolutely essential devaluation of currencies vs gold and silver occurs.

The bankers have changed bankruptcy laws to their favor, inserted their ilk as judges, and recently made changes that puts their derivatives exposure onto the backs of people within the western banking system, via bail-ins ala Cyprus Steal.

They have set their legal ducks in a row.

They are now busy cleaning out the ETFs. The MSM reports that people are selling their gold when what's happening is that the banks are becoming the biggest stackers ever.

Once these ETFs are cleaned out, the paper system will be allowed to fail, though the cause will be blamed on evil "hoarders" when in actuality, the bankers who control the ETFs are the biggest private hoarders in history.

ctob's picture

Tuesday after memorial day?

Best time to buy?  At guess Tuesday or wednesday after memorial day maybe.  I have no idea really, just seems like a good time for an attack.

Xty's picture

Waffle and smoke? Then there is no pleeeezing you!

(but it really should have been a pancake)

And here's a tapir that really does exist:

or did, until I was accused of stealing bandwidth.  Geez, it really was unintentional.

The Watchman's picture

GLD Continues to be DRAINED-3.01 TONNES GONE

Tonnes1,020.07

Ounces32,796,277.52

Value US$46,177,588,348.63

Same tonnage as 5/17

foscotanner's picture

wallace hartley

I suggest you go to forums, gold, the set up for the big trade.

The entire thread is filled with some amazing stuff on timing.

enjoy it.

It really is sensational. Start at post 1 and trawl through them all. You will quickly see what was predicted, has happened and this adds weight to current timings.

Cry Me A River's picture

New GLD Depletion Chart Based On Recent Depletion Rates

POSTED FROM LAST THREAD-

Using The Depletion Rate That Was Derived From Turd's 200 Tonne Depletion Target, I Zoomed Into The Chart For This Month And Added Today's New GLD Total Of 32,796,278 oz. which is another daily drop of 96,682 oz.---this is close to that estimated -144,000 oz/day line and has accelerated from that last rate of 66,000/day.

dumpster's picture

best time to buy silver

please this focusing on some mystical silver low to buy ... The paper can go up and down and if you buy paper it is not silver . it is paper for hell sakes

the paper falls because no one really wants to buy as they are afraid that promise will not be kept .

so if you buy silver walk on down to coin shop plunk the dough down . get silver

all this other whissy whassy posting to buy silver on some day in the future is made by diaper glad youngsters lol

dumpster's picture

(No subject)

dumpster's picture

best time to buy silver

repeat

dumpster's picture

best time to buy silver

repeat

Wallace Hartley's picture

@ dumpster...

Geeesh, you really drive home your point!  BTW, my purchase will be executed like all the others...I hand them cash, they hand me physical metal (and a receipt).  Complete anonymity is the only way to go in my opinion.  I then plan to take my new shiny with me on a spectacular Memorial Day white water rafting trip down the mighty Colorado!  (Deeeeep riverrrr, my home is over Jordan....)

The Watchman's picture

From Jesse:

"Gold and silver are flowing from West to East. With each purchase, the Banks are being stripped of their bullion.

They can keep this up, until the people, in their increasing confusion and misery, finally realize that the emperor has no clothes. And then comes change, and one would hope, reform. A generation forgets, and the next remembers and relearns the lessons from the past.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

 

julysilver.PNG

This is what happens when an artificial tyranny finally falls. First it is the actions of individuals, then a movement, and finally a swiftly moving avalanche.

Freedom is not an objective or a prize to be won and kept at last; freedom is a way of life, a continuing commitment to truth, and to equal justice for all.

Revolutions decay into tyrannies, and over slow time are renewed again. The human spirit is resilient, as long as at least one person can stand for the truth and with peaceful but determined resolve say, 'You may own the world, but you don't own me.'"
 

NonoverlappingMagicCereal's picture

'Untenable levels'

I'm curious what the rationale is for thinking that an end to QE would elevate interest rates to 'untenable' levels.  I agree that if rates snapped up to historic levels, that would be very disruptive, but remember that QE was a trick invented to get rates even lower than we get with ZIRP.  If we tapered QE, but left ZIRP in place, would rates really go up all that much?  Did QE even bring them down more than a point?

Or does 'end of QE' also imply 'end of ZIRP' in everyone's minds?

abguy4's picture

Oh What da Hell...

Oh What da Hell...

This makes as much sense as the 'news' today

monday-dar-241.jpg?w=500&h=887

MAYBE A LITTLE TOO MUCH “B” IN THE BLT?

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