Too Surreal To Comprehend

There are days when I sit back in wonderment at the position in which "Jimmy Stewart" finds himself. To go from regular dope to regular-dope-with-amazing-contacts is sometimes difficult to deal with in that it's so surreal. Anyway, there's just a lot of interesting stuff going on in the world, 99% of which is never discussed in the media, financial or otherwise.

So, I try to make sense of it all and then pass it along to you. The hard part is deciphering what is worthwhile and what is not. And I'm not just talking about the PM-positive, "pumper" information out there. I get a lot of anti-PM, you're-all-batshit-crazy stuff, too, which, frankly, sometimes has merit. As an example, I give you this:

Over the past year or so, I've gotten to know Jim Willie a little bit. I've never actually met him and we probably wouldn't even recognize each other if we passed on the street. That fact, however, doesn't mean that I can't make a conclusion regarding his validity as a PM opinion maker and editorialist. Therefore, though he's got few ideas that I don't necessarily agree with, I think he's one of the good guys who is doing his level best to inform and warn as many folks as possible about what lies ahead.

In his update of 4/12/12, Jim included some rather juicy information regarding the link between current paper price swings and behind-the-scenes physical delivery. Now, you can write this off as the lunatic ramblings of a madman if you'd like (someone in the previous thread called him "the National Enquirer of newsletters"), but I personally think that this information is valid. Jim has an extensive list of contacts within the global financial system and, from time to time, these folks pass this type of quality information to him. Should you choose to dismiss it and slander him instead, ask yourself first "what kind of contacts do I have?". If you, as a detractor, have no contacts within the international gold trader community, maybe you should be willing to openly consider that the information Jim provides is accurate, knowledgeable and helpful, not simply tabloid-level heresay.

Here are the first, two paragraphs of the piece, followed by a link to the rest:

"What an incredibly complex confusing and treacherous month. It can be safely said that 80% of the activity is almost totally kept from the public. The financial system is breaking in an accelerated fashion. Compare to some grisly horror movie where a man is strapped in a chair. The more he moves, the tighter the bindings pull on his gasping throat and pressed nether stones. The most significant two factors at work are the Iran sanctions and their powerful backfire, and the futile efforts in Europe to stem the banking center collapse. The anti-USDollar federation that spans widely across the globe is gathering strong momentum. Financial aggression is being met by financial alternative development. As Greece moved off the daily news fabrication factory, the reality of a collapse in Spain and Italy has moved to the front center of observations. Meanwhile, the American nitwits continue to argue over Quantitative Easing when it never stopped, and in fact, went global under their noses. The US news machine, dominated by the syndicate, churns out absurdities after more nonsensical bites on an economic recovery. The subprime loan machinery has ramped up. The retail factor does not tell of strength, but of weakness. Spending on consumption does not indicate strength, but a path to ruin still not well recognized. The gap between reality and reports is diverging.

Back at the gold desk, another cartel member kill is in progress. A string of UBS-type gold arena deaths is the biggest untold story of the new decade. The UBS rogue trader story was a total fabrication, written and staged to conceal the removal of all UBS gold from their reserves inventory. They are a dead gold player. The gold community, even LeMetropole Cafe and GATA, appears to be missing the coalition kills taken place in sequence with each paper gold ambush. If the cartel wishes to drive down the paper gold price, then they must deal with the consequences of having one more cartel member bank offered on the physical altar in a death sacrifice. They are vulnerable from sovereign bond positions and weak currency positions. In the margin call vise, they must forfeit their gold, but in a long slow process as truly enormous physical gold orders are being filled over a pyramid of prices lower than the cartel bank wishes. Details are scanty, but the trail can be followed to some extent by false stories to cover the damaging tracks. The press did a wretched job in checking the facts on the UBS rogue story. The loss was over $6 billion. The trades were all approved at VP level. The trap was laid and UBS entered with both feet, the consequence for which was being expelled from the gold arena, probably forever, in a total loss of its gold bullion. No wonder the press did not report the actual story. It would have been a monster bull story for gold. If Barclays or Royal Bank of Scotland or Bank of America were having their golden blood removed on a table, with straps in place for directors of their gold desks, and hot pokers applied by coalition forces to extract their gold, the outcome dictated by incredibly insolvency and margin call vulnerability, the effect on the gold market would be magnificent. Such events are in progress in my opinion, based on some juicy information feeds. Rather than divulge the entire details of the cartel kill, the coalition prefers to move to the next victim in the Wall Street & London cesspool of finance."

http://www.gold-eagle.com/editorials_12/willie041212.html

As you know, another guy with whom I'm now able to communicate directly is Uncle Ted. The statement below isn't anything earth-shattering but I've been meaning to re-print it. It's taken from his mid-week update last week and it simply speaks volumes about where we are currently in the silver charade.

"I realize that we are currently in a period of doldrums in the price and this has blunted investment demand, the silver price driver with the most kick. Prices are down sharply from the peaks of a year ago and there is a self-fulfilling nature in all investment assets where lower prices discourage new investment. More than ever, the short-term control of High Frequency Trading (HFT) is exerting greater daily pressure to the price as real volume dwindles. I’ve noticed a clear pattern where most days we start out under price pressure. This makes it easier to for the COMEX commercials to contain the price. No one can guarantee that the COMEX commercials can’t rig another sharp sell-off. It’s enough to sap the resolve of even the most ardent bull.
 
But I would remind you that these conditions have been a regular feature of the silver market over the past ten year (excepting the presence of HFT). While we have climbed sharply over the past ten years, that extraordinary price rise witnessed its share of sharp takedowns and prolonged periods of price stagnation. For example, the price high at $8 in 2004 wasn’t exceeded for almost two years, as was the price high of $15 in 2006 which wasn’t exceeded for almost as long. It took more than two years for silver to exceed the price highs of March 2008 of $21 (when JPMorgan took over Bear Stearns). Yet anyone who bought at the former highs and held on was rewarded, as will those who bought at last year’s highs. (Going back even further, the decade or more that silver traded between $4 and $5 was the biggest price doldrums of all; along with being a great time to accumulate). My point is that during the last three silver price doldrums, the gloom and negative talk was almost thick enough to cut with a knife, almost the same as now. Yet history shows us that the very best time to buy was during past price doldrums as was it also the very worst time to sell."
 

I reached out to our pal "Winston" over the weekend to get some thoughts from him, too. He sent me a lengthy email which I will try to summarize. He is quite confident that there are some very large, sovereign buyers underpinning the physical market in London. (Note that this jibes with Jim Willie's assertations.) These buyers halted the paper selling on a couple of occasions last week and they continued to do so all the way into this morning. Did anyone notice that gold rallied at 3:00 am EDT today instead of selling off? This was due to the same sovereigns buying into, and post, the AM London fix. Winston expects this to continue to provide a floor for paper price. The key level to watch going forward is 1680-1685 as, apparently, there are all kinds of buy-stops at that level. Any move through there will trigger a quick rally toward 1700+. Above 1700 and the WOPRs will flip to "BUY" again and we'll head back off to another test of the critical 1800 level.

Interestingly, Winston's analysis fits in quite well with my charts, too. (Makes me feel a little less dopey.) As you can see on the charts below, gold is still struggling to make a permanent turning point. It's close, however. There should continue to be strong paper price support between 1630-40 and this makes another attempt at 1680 a simple eventuality. Once 1680 is finally bested, 1705 should be the final hurdle before another run at 1800.

paper_4-16amgold18.jpgpaper_4-16amgoldh.jpg

paper_4-16amgoldd.jpgpaper_4-16amgoldw.jpg

Silver, as you might imagine, has a similar picture. In the short term, it is still penned in a range between $31 and $33. However, very strong buying support continues to emerge between $31.00 and $31.25. The longer this support holds, the lower the trendlines "hurdles" get for the next rally. For now, all we can do is wait for a breakout through $33 before we can get really excited. Also, pay very close attention to the weekly chart below. We are nearing a resolution to the current pattern but it may still be 6-8 weeks away. Please try to remain patient. The next move in silver is going to catch a lot of people by surprise but not us.

paper_4-16amsilv18.jpgpaper_4-16amsilvh.jpg

paper_4-16amgoldd_0.jpgpaper_4-16amsilvw.jpg

Ok, I'm going to stop at this point because I've been in my office for about three hours now. I need a break and you need a new thread. More later today. TF

284 Comments

TheFool's picture

@Pegasus - R U A CONSPIRACY THEORIST?

Well, damn.... apparently I'm a conspiracy theorist. /sigh

TheFool's picture

@justin99975 - Mr. F

You know this is interesting. I recall reading about Jim Comiskey talking about how those oil refineries in Pennsylvania  closed down due to their unwillingness to comply with EPA regulations and the costs involved. I did a bit more digging and found Senator Bob Casey (D-PA) had been pushing for legislation to boost PA's natural gas industry.

http://www.casey.senate.gov/newsroom/press/release/?id=ff43d3bb-e42d-42b7-81a0-0fd1b08f4fd3

So, while the EPA, with environmental and other regulations, is forcing refineries to shutdown, they are trying to pass legislation to give incentives to the natural gas industry. Gov't influence of energy markets. There has to be a bigger story here. Maybe I'll poke around a bit more.

Loud Noises's picture

Its funny that today is the

Its funny that today is the day that guns come up so much on Main Street... I was planning to head to my LCS with some fiat but instead decided to pull the trigger on a purchase that's been brewing in the back of my mind.  A Saiga in 7.62x39... Russian built and I'll convert it back to a semi-original AK configuration myself.  It'll be my second precisely because of the caliber concerns that were mentioned.  Also, I expect the window to purchase ideal Post Keynesian Lead Delivery Systems will close in the not too distant future, causing this one to rise to the top of my priority list.

Back to stacking next time though!!

goldenbear's picture

QE?

Weaker Yuan could be the trigger for the next round of QE... I'm looking for it soon. The weaker commodity space would also indicate to me the timing may be right this May. And sentiment is pretty bad everywhere. Tells me that they may start hinting in April.

I wish it were not so, but it sure seems like the path of least resistance.

http://www.bloomberg.com/news/2012-04-16/pboc-weakens-yuan-fixing-by-0-13-after-widening-trading-band.html

and some related commentary by Jim Rickards in case Turdland missed it.

http://www.bloomberg.com/video/90738469/

ed's picture

gold short covering on drop in INR reference rate

http://www.marketwatch.com/story/india-to-start-lowering-rates-to-spur-growth-2012-04-16

Actual rate cut was 0.5% more than the expected 0.25%,

Possibility of a decent gold rally on this news.

ed's picture

gold short covering on drop in INR reference rate

http://www.marketwatch.com/story/india-to-start-lowering-rates-to-spur-growth-2012-04-16

Actual rate cut was 0.5% more than the expected 0.25%,

Possibility of a decent gold rally on this news.

JY896's picture

Reliable news sources

Well, there is a quote attributed to Thomas Jefferson that comes to mind -- it never ceases to amaze me how little things have changed over the centuries/millennia:

"Advertisements contain the only truths to be relied on in a newspaper."

Obviously,  one can substitute modern forms of mass media to complement 'newspapers'. In the years I've spent studying/measuring/manipulating data on the media, the single central conclusion I've come to is that it exists solely to serve the purposes of those who own and/or pay for it (hint: not you or me). Which makes it a very difficult (not to mention time-consuming) exercise to find reliable sources. This is an age where the availability and speed of information has become (uniquely?) ubiquitous. Since 'they' can't stop it, all that can be done is to overwhelm / dilute / corrupt it - cacophony of fake and real is nearly as useless as dead silence, from an information gathering perspective.

Turdites have done a yeoman's job in compiling a list of sources, you can have a look here:

Favorite/Best Alternative Information Sites

There are also some interesting pieces there about misinformation (Russian or otherwise), the history/role of media, etc.

"I expect just what I've always expected -- For you to make up your own damn mind"

Non sequitur: An interesting (and to me new) piece of trivia: the character of the Trainman in the Matrix was played by none other than Bruce Spence -- who in turn also enacted Jedediah the Pilot in Mad Max II and III. As it turns out, Mr. Spence also played in the final installations of a whole range of big film franchises.

goldenbear's picture

guns...

Can't tell if this is a metals forum or a NRA site... wink But I think it shows how low sentiment has gotten. I think people want to get their minds off of the pain and just blow something up. Not to mention the miners... But that's always a pretty good sign that things have run their course on the downside. Or nearly so...

I apologize in advance... couldn't resist.

Marc Grail's picture

Are guns the new "religion"?

Just so my cards are on the table at the outset, I own a small arsenal and have a concealed carry permit in a California county where it is near impossible to get one.

Yet as I consider the perspective of those in Turdville who may be less enamored with weapons than I am, I am impressed with their apparently greater ability to scroll on by than exhibited by those who objected to the "religious" conversation of yesterday.

Sometimes it seems more helpful to just say nothing than to assume a stance of resistance.

Juss sayin'

Magpie's picture

Barnhardt on Corzine and the government

Basil's picture

Turd's Army

Just wondering if there has been any update on the success (or otherwise) of Andrew Maguire's service ?  Any turdites actually making money out of Andrew's recommendations ?

Personally I'm tempted to have a crack at it, but I have this  ".... if it's too good to be true , it probably is ...."  feeling eating away at me.  

Is it really as simply as following his instructions (albeit very promptly) and watch the cash flow in ????

koan's picture

Guns eh

Doesn't seem an option over here in blighty. To be honest, not sure I would even if it were more viable.

I guess, if the time comes, that leaves me hoping I acquire this skill pretty darn fast...

achmachat's picture

guns....

I think that the closest thing to a gun that we're allowed to own over here is a compound bow and arrows.

ClinkinKY's picture

Morning Toons

Tabberto's picture

Agreed! Guns are an anathema over here in UK

UK self-defence is restricted to Golden Knuckle-Dusters

although not sure you wouldn't get arrested for having these in your pocket either!!

12_dsc9785web.jpg

ClinkinKY's picture

Explains Quite A Bit

ClinkinKY's picture

New Plan

ClinkinKY's picture

And finally...

Dr Jerome's picture

Magpie said, "What's to stop

Magpie said, "What's to stop the federal government from walking into Provident, Gainsville, or any other coin dealer, with no warrant, lots of guns and take the client lists, then come marching into our homes to seize PM's? "

Technically, nothing would stop them--certainly not the law, except it costs money to do that and the feds as well as most local governments are mostly broke. I suppose that is my central consolation: the price of confiscation of metals from 350mm Americans is too high. They would have to bring our military home to accomplish it.

I Run Bartertown's picture

Nephi and Magpie

Nephi Re: RT. Speaking for myself, it's not that I trust them implicitly, it's just that I trust them at least equally to our own media. But they're in a position to do much less damage.

Putin is not worried about us. He's busy stealing from his own people and giving it to his cronies, just like our pols do here.

The only existential threat to the "American Spirit" is the same one it has always been - 

The Federal .gov.

Magpie - "What's to stop the federal government from walking into Provident, Gainsville, or any other coin dealer, with no warrant, lots of guns and take the client lists, then come marching into our homes to seize PM's?"

The first part, there's nothing to stop them. The second part will get progressively less popular as the life expectancy for the 'Door Knocking Thug First Class" positions drops.

Be Prepared's picture

The Party never stops when the Taxpayer is Paying...

Be Prepared's picture

The Congress & Senate keep making us the Sacrifice...

zilverreiger's picture

dutch legal license free gun options

PCP airguns, bigbore 9mm go up to 800J   (~5x .22LR) muzzle energy nowadays, But more typical is 50-100J which is lethal enough for pigs and deer, so also for humans. Hunting with them is forbidden though, as is brandishing or transporting outside closed case, and they may not "look like" firearms.

Be Prepared's picture

Maybe the GSA & the Secret Service should pay Us back....

Xty's picture

Starlight

Guns don't elicit the same kind of arguments.  I can own (well not me, but I am getting closer) a gun or not, and you can think me a fool.  You might even briefly try to persuade me to get one, and then give up.  And you could always shoot me if necessary, so you don't need to win the argument.  But for some reason when people disagree about god, it just comes to ugly blows, with the believers saying you'll be sorry, the atheists saying you have no reason, and the agnostics and Buddhists sit around wondering what all the fuss is about.

The separation of church and state is incredibly important, and it works for websites too.

And there was no banning - just asked to take it to a forum.  And guns would also make a good forum.

FMOTL's picture

Gun rights Gone

So jealous of you Amerikans and your gun rights . Here in Orwellian Big Brother Corportocracy UK we have long ago been disarmed by the Zionist central bank cartel who run the show over here . Check out the logo for our Olympics , does that say 2012 or Zion ?

Be Prepared's picture

Don't Forget April 17th... Your Labor & Money are due to the PIG

ClinkinKY's picture

@ FMOTL----Hmmmm

Gun rights Gone

So jealous of you Amerikans and your gun rights . Here in Orwellian Big Brother Corportocracy UK we have long ago been disarmed by the Zionist central bank cartel who run the show over here . Check out the logo for our Olympics , does that say 2012 or Zion ?

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

I barely see the 2012, but I certainly don't see the word ZION. Your use of the letter "K" in Americans is a nice touch too.

Other than that, I agree with your  jealousy.

koan's picture

QE trigger level

Been musing on how bad things have to get in the masses eyes (i.e. how far stocks drop) for them to feel they can roll out overt QE. 2008 required (or they allowed/instigated) a rather severe one before they rode in to 'rescue' us all with their printing presses and so have been expecting similar.

But with this Keynesian-disaster-in-waiting moving up the food chain (corp to sov) then this behemoth is maybe at the size that they're scared they're losing control of their monster.

Got a vision of an ever growing snowball atop a hill and previously they could shove it around at will, faking out the market etc but now even if it tips just a little bit the effort to restrain/reverse it's course is considerable.

Anyhoo, long musing short, maybe there won't be such a (large) correction on the horizon before next overt QE? ...or a total fricking collapse, or somewhere in between - wadoino!?!

boatman's picture

i just SAW the space shuttle flyby

piggy back on the 747 going to the smithstonian........with one of those  little nasa jets on the wing.

some will argue about what we got for our billions, n i can see that side.

cost of the shuttle program?.......1/6 of the war on drugs......1/50 of the war on poverty......both of those miserable failures.

but its still cool for a voyaging kinda guy who's a trekkie.

and wayyy better money spent than 'fo da po' n lazy' to sit on street corners

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