Going Nowhere Fast

Tuesday, July 31, 2012 at 10:23 am

I had hoped that Tuesday would provide some excitement. Nope. We are in Dullsville while everyone awaits the FOMC tomorrow. To kill the time, I found something we definitely need to discuss.

Last night, ZeroHedge decided to dip into their archives and recycle a post from September of 2009. In case you missed it, I thought I should focus on it here, while we wait for a tomorrow that will be about 1000% more interesting.

Here is the link to the story from last evening which begins with the following paragraph:

"Lately various media outlets have been swamped with stories and allegations of precious metal manipulation ranging from the arcane, to the bizarre to the outright ridiculous. At issue is not that these claims of price fraud are unfounded - they very well may be completely true - but without a notarized facsimile of an actual trade ticket signed by Brian Sack, or his replacement Simon Potter, or any of the BIS traders confirming they are indeed selling gold on behalf of the Fed, BOE, ECB, SNB or BOJ simply to keep the price of the metal down, what such constant factless accusations (and no, sorry, a chart showing that the price of gold may go up or go down sharply indicates merely that and nothing about the underlying factors for such a move) do is to habituate the broader public to the real issues surrounding precious metal, and other asset class, manipulation. So instead of searching for circumstantial evidence which one can easily find everywhere, we decided to go straight to the source. To do that we go back to a post we wrote back in September of 2009, based on an internal previously confidential Fed document, which conveniently enough explains everything vis-a-vis gold manipulation and leaves nothing to speculation or misinterpretation. Zero Hedge presents the smoking gun that may provide responses to all the various open questions regarding the Fed's Modus Operandi in the gold arena which answer the core question - motive - courtesy of a declassified memorandum, written by none other than the then Fed Chairman, and addressed to the president of the United States."

http://www.zerohedge.com/news/fed-gold-price-manipulation

And here is the link to the original piece from three years ago which concludes with the following:

"So to all conspiracy theorists claiming that gold is being manipulated on a daily basis by the Federal Reserve: when it occurs over and over, and is so well documented, it is no longer a theory, it is merely sad. And the fact that the US government goes to great lengths to hide the illicit dealings of the Federal Reserve, which through its monetary tentacles, has prima facie control over not just US policy but also over sovereign governments, is an unprecedented failure in the checks and balances system that the founding fathers had planned when they created the United States of America. Yet saddest is that the United States no longer pursues strategic goals that are in the best interest of the majority of its citizens, but merely manipulates other, less powerful nations into a servile existence that only provides gain to a very limited subset of the American financial oligarchy. It is time for the Fed's unprecedented control over affairs, both global and domestic, to end."

http://www.zerohedge.com/article/smoking-gun-fed-controlling-gold

Please take time to read the entire article and the 1975-era document which is attached in Scribd form. Lots and lots of juice discussion points here. Have at it.

I'll update later today if conditions warrant. I'm not expecting much, though, as both metals will likely remain in a tight range for most of the day.

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Comments

i just got this from a friend

Submitted by treefrog on July 31, 2012 - 1:50pm.

IRS audit:

I just received my tax return for 2011 back from the IRS. It puzzles me!!! They are questioning how many dependents I claimed. I guess it was because of my response to their question: " List all dependents or people that are supported by you ? " I replied: 12 million illegal immigrants; 3 million crack heads; 42 million unemployed people on food stamps, 2 million people in over 243 prisons; Half of Mexico; and 535 persons in the U.S. House and Senate." 1 useless President and his family and their 18 vacations.

Evidently, this was NOT an acceptable answer cause I must have missed someone, Hummmm.

I KEEP ASKING MYSELF, WHO DID I MISS?

Tungsten Gold from Ft. Knox

Submitted by maravich44 on July 31, 2012 - 1:53pm.

I posted story and link a couple of nights ago but accidentally put it in the forums instead of on the main thread. This story is not new news for many here, but may be for some that do not know the full story. Be sure to click the link that is incl on the link, good info from GATA included on the 2nd link.http://www.rumormillnews.com/cgi-bin/forum.cgi?read=247447

Are you buying gold with that wire transfer ?

Submitted by Short Stack on July 31, 2012 - 1:53pm.

Hah ! TPTB must know the jig is up !

Not too big of a difference but...

Submitted by tobydaniel on July 31, 2012 - 1:54pm.

We have till November 22 to make money from 27.50 to 28 something back down to 27.5. I dont trade with my long term phyzz but I have a short term that I do this with. That way, if Turd is correct and we do have an explosive summer, you win either way. I mean why not? Its obvious that the cartel has full control with the preciseness of the silver moves and you know what they like to keep it at, ie 27.5, so if it breaks out to 28 once in a while, sell and then buy back at 27.5... which is likely where we are headed now.

On another note, dont wait till QE. QE is already in effect. Silver has risen for many years without QE. When people talk about QE, ignore them. Who really cares if overt QE comes or not? They took silver from the 20's to almost 50 and back down to the 20's so anyone expecting a grand move from an overt QE has their head up their butt. And yes, I used to have my head up my butt because I was actually interested in QE. In the meantime, enjoy our manipulated moves. They are a blessing because they are so predictable, its laughable.

Eurozone break-up would trigger £1 trillion of QE

Submitted by The Green Manalishi on July 31, 2012 - 1:55pm.

Eurozone break-up would trigger £1 trillion of QE, see banks nationalised and deep recession, warns Fathom

A Eurozone break-up would plunge the UK into an even deeper recession than the last one, force the Government to nationalise the banks, and trigger a £1 trillion bout of money printing, leading economic consultancy Fathom has warned.

Deanne Julius, a former member of the MPC, said companies have already begun preparations for a break-up but she warned that the markets are not prepared and could inflict enormous damage.

The economy would shrink by 5.2pc in 2013 if the euro collapsed, according to Fathom Consulting – a projection that former Bank of England deputy governor Sir John Gieve described as “modest”. In 2009, the worst year of the recent recession, the economy shrank by just 4pc.

Sir John added that the Government will have prepared contingency plans “to nationalise the banking system, for example” and warned that a euro collapse would leave Britain vulnerable to an attack from the markets. Speaking about the UK at Fathom’s quarterly Monetary Policy Forum, he asked rhetorically: “If you [traders] think Europe’s going down the plughole, who’s next?”

Fathom’s Danny Gabay said the UK would be hit hard by a euro break-up because “the policy cupboard this time is nearly empty”. To prevent the pound strengthening as investors ploughed into the relative safety of the UK, he reckoned the Bank would have to launch £1 trillion round of quantitative easing.

http://www.telegraph.co.uk/finance/financialcrisis/9441120/Eurozone-break-up-would-trigger-1-trillion-of-QE-see-banks-nationalised-and-deep-recession-warns-Fathom.html

I am more naive than I thought

Submitted by Dr Jerome on July 31, 2012 - 1:58pm.

When did this start?

I am currently filling out forms (online) for my new teaching position and I had to sign an oath of allegiance to the State government (actual oath included the USG) !

Any officer or employee having taken the form of oath or affirmation prescribed by this section, and knowingly at the time of subscribing to the oath or affirmation, or at any time thereafter during the officer's or employee's term of office or employment, does commit or aid in the commission of any act to overthrow by force, violence or terrorism as defined in section 13-2301 the government of this state or of any of its political subdivisions, or advocates the overthrow by force, violence or terrorism as defined in section 13-2301 of the government of this state or of any of its political subdivisions, is guilty of a class 4 felony and, on conviction under this section, the officer or employee is deemed discharged from the office or employment and is not entitled to any additional compensation or any other emoluments or benefits which may have been incident or appurtenant to the office or employment.

I suppose I better guard my mouth here when criticizing our <sarc> fine government </sarc> and the extremely fine government of the state where I am employed, lest my snarky comments be interpreted as "aiding" any effort to set things right. (actually, I like Sheriff Arpaio of AZ)

http://dailybail.com/home/aig

Submitted by Nana on July 31, 2012 - 1:59pm.

http://dailybail.com/home/aig-emails-dont-lie-just-ask-tim-geithner-and-...

AIG Emails Don't Lie, Just Ask Tim Geithner And The New York Fed Officials Who Tried To Keep Them Secret

http://dailybail.com/home/how-goldman-sachs-created-shitty-cdos-sold-them-to-aig-force.html

How Goldman Sachs Created 'Shitty' CDOs, Sold Them To AIG, Forced AIG Into Bankruptcy, Got A $20 Billion Bailout, Paid Themselves Billions In Bonuses, And Watched As Tim Geithner Covered It All Up

One Hundred Million Dollar Penny

@goldspot

Submitted by Mr.Grey on July 31, 2012 - 1:59pm.

You ask why would the gold "bubble" burst? Let me the FIRST to answer. I don't know!

collapse? NIET!

Submitted by Galearis on July 31, 2012 - 2:02pm.

YES, Exactly!

Hmmmm, this topic enters the realm of the very subjective reality around the topic basically that if there is a GLOBAL currency collapse that stimulates a bubble (which will be a panic bubble, not a speculative bubble), it begs the question: how can a bubble collapse when what it is exchanged for has collapsed already? A trading mentality world view doesn’t necessarily grasp the situation that is devolving…

And therein lies the reasoning from Sinclair’s rather cryptic interpretations (and those of only a few others) that gold (and silver, and platinum and rhodium and palladium and all other things that remotely can be considered tangible assets) will not decline in price. How can they? The paper money is worthless. Gold and silver will only retrace IF there is a worthy currency to retrace against…If the USD does not go to zero in purchasing power, the gold and silver prices will only retrace to the fair exchange rate with it and that will still likely be many (hundreds of?) thousands of dollars per ounce….When the dust settles from this catastrophe, there will likely be a long period of “avoidance of confidence” in the dollar (and other currencies) that will likely not see a gold dollar bubble “pop” as much as a slow subsidence…..

This is so CONfounded obvious!

And on a gloomy day I look at our paper metal markets and think to myself that investment in those shams are also a measure of where we are on the “creditbility” (poor pun that) charts for the global monetary system….When the paper markets collapse, we can safely say that everyone will understand it - and for those who own no gold or silver, or have a hedge tangible in hand, they will understand and be hungry at the same time….And a lot of those will be ex-players in the paper markets who never understood what “stacking” was all about.

Cheers,

Galearis

There is no gold bubble.

Submitted by Short Stack on July 31, 2012 - 2:05pm.

It's a lie. It's all a lie. For crying out loud, how can anything be as under-valued as gold or even silver and be in a bubble ??????????????

alf fields anaylsis

Submitted by agrock on July 31, 2012 - 2:06pm.

so did he ever put a 'timeframe' on $3500-$4500 AU - from the charts?

I'm not too savvy on the elliot wave theory.

I'm betting

Submitted by Urban Roman on July 31, 2012 - 2:11pm.

... that the Fed disappoints this week. In my all-paper retirement accounts, I've unloaded some AGQ at a small profit, and added some SDS. The PSLV is untouched at this time, might buy some more if there's a significant dip later this week.

That is all; carry on.

[edit]
If this works out for me, I just might feed the Turd again ... although I am not yet signing up for the TTM site.

@Ivars

Submitted by bardian on July 31, 2012 - 2:14pm.

What will take place after this gold bubble collapses is also interesting.

1) Real estate backed money?

2) Phasing out of USD so the price of gold in USD will fall as USD will become more rare ( contracting money supply =deflating US economy- by the way, one of suggested outcomes in E.Griffins book "The Creature from the Jekyll Island" -which I HIGHLY recommend for anyone like me who wants to get fast general understanding of debt based monetary system in a simple and concise way with interesting narrative)

3) else way?

Ivars, why couldn't the model be a paradigm shift instead of a bubble. I think its safe to say there will definitely be an overshoot, but why not a new mean based on the remerging monetization of gold and the new free market pshycholgy paradigm.

So, the end of your charts would look more like a step instead of a peak.

Real Estate Backed Money

Submitted by agrock on July 31, 2012 - 2:25pm.

I've heard this term mentioned a lot over the last 4-6 months....

How the hell can a currency be backed in Real Estate - just thinking there are way too many variables such as maintenance, additions, location, size etc...

Adrock

Submitted by Marblesonac on July 31, 2012 - 2:27pm.

Look up how the Weimar Republic solved (?) their hyperinflation.

They used mortgages to back the new Rentenmark. In other words, they used real estate.

@bardian

Submitted by ivars on July 31, 2012 - 2:28pm.

That is why I am asking. I have not delved deep into these matters as I am new to this , lack knowledge and expertise, but so far somehow that what You suggest sounds idealistic... which I doubt is possible not because of theoretical monetary reasons, but because I so far I have a gut feeling that its not what is going to happen. No one gives power away by kindness, only if forced by all circumstances including force, of course.And then there has to be someone willing to take it. Democracy in its present form can not secure it either. Ancient Greeks used to switch freely between different forms of governing as circumstances required. Despotism, democracy, autocracy, republic etc.

However, I am only on my way to find this out. There are still 4-5 years of time.

@adrock

Submitted by treefrog on July 31, 2012 - 2:30pm.

you ask "How the hell can a currency be backed in Real Estate?"

makes more sense than a currency backed by the full faith and credit of a bankrupt entity like the u.s. govvy.

...there's crazy and then there's insane.

No, not at all

Submitted by Turd Ferguson on July 31, 2012 - 2:30pm.

MODERATOR

My schedule in July made it difficult. Having so many possible subjects on vacation doesn't make it any easier.

The regular podcast "schedule" will resume shortly.

Response to: podcast's

@ Marblesonac

Submitted by agrock on July 31, 2012 - 2:32pm.

thx - i'll do some research on this topic .... just thought that there would be too many 'variables' to back a currency with real estate.

gold and silver are consistent with 'ounces'

@ treefrog

yeah makes sense - good faith is only good in a 'perfect' world free of corruption and manipulation I see how dysfunctional the currency is now with just 'good faith'

Trader Dan excellent as always

Submitted by tpbeta on July 31, 2012 - 2:42pm.

http://www.traderdannorcini.blogspot.co.uk/

"...gold traders and silver traders for that matter, be careful out there. It is not the time to play reckless. The market will always be there tomorrow should you miss a move today. Remember that."

Turd - You owe us Podcasts

Submitted by punchbowl on July 31, 2012 - 2:43pm.

just kidding

note: I thought you had a freebie up this last week

Adrock

Submitted by Marblesonac on July 31, 2012 - 2:43pm.

This is a link to some info on the German hyperinflation:

http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhype...

Obviously, though the currency was worthless, Germany was still a rich country -- with mines, farms, factories, forests. The backing for the Rentenmark was mortgages on the land and bonds on the factories, but that backing was a fiction; the factories and land couldn't be turned into cash or used abroad. Nine zeros were struck from the currency; that is, one Rentenmark was equal to one billion old Marks. The Germans wanted desperately to believe in the Rentenmark, and so they did. "I remember," said one Frau Barten of East Prussia, "the feeling of having just one Rentenmark to spend. I bought a small tin bread bin. Just to buy something that had a price tag for one Mark was so exciting."

My folks now have a stack

Submitted by Istack on July 31, 2012 - 2:45pm.

convinced my folks to start a silver stack. my ma is worried about here retirement at the end of the year. seven rolls of ASE's will arrive next week. something is better than nothing

Dr jerome, say goodbye to the

Submitted by recaptureamerica on July 31, 2012 - 2:45pm.

Dr jerome, say goodbye to the constitution...

Low Volumes in Silver

Submitted by Maximillion on July 31, 2012 - 2:51pm.

I don't think I've seen an explanation yet as to the reason why the daily activity in the Silver market abruptly collapsed by 50% on June 14th 2012 and has stayed at the 50% lower level ever since. Mobile at the moment so can't cut & paste but go to netdania and look at the volumes on the daily chart. Is the data is wrong, are TPTB colluding as per liborgate, by agreeing to simply stay out of the market, or has a big player left the field??

Or is the big player saving his /her fiat for one big last smashdown? Guess we'll find out soon!

CIBC

Submitted by Teach on July 31, 2012 - 2:54pm.

is a nosy bank. I hate to admit it, but about 90% of my Au purchases have been dutifully recorded with picture identification required at the LCS. A large cash transaction form is required for any deposit of over 3k in cash, and for any purchase of gold in cash over 2 oz. I really have a problem with the gov't / banks' "we're the rancher and you're the cow" attitude. If anyone asks, I lost it all paying my gambling debts.

Re: Treefrog I just got this from a friend

Submitted by JML-2012 on July 31, 2012 - 2:55pm.

"I just received my tax return for 2011 back from the IRS. It puzzles me!!! They are questioning how many dependents I claimed. I guess it was because of my response to their question: " List all dependents or people that are supported by you ? " I replied: 12 million illegal immigrants; 3 million crack heads; 42 million unemployed people on food stamps, 2 million people in over 243 prisons; Half of Mexico; and 535 persons in the U.S. House and Senate." 1 useless President and his family and their 18 vacations.

Evidently, this was NOT an acceptable answer cause I must have missed someone, Hummmm.

I KEEP ASKING MYSELF, WHO DID I MISS?"

Just thought I'd have a go at answering this one- how about 7.8 million Israelis and their entire military industrial complex at the tune of $3 billion a year?

There something in the news about Govt buying up mortgages.

Submitted by Short Stack on July 31, 2012 - 2:56pm.

A few days back I read something about our Gov. buying up mortgages. Didn't make much sense then but now....

So I guess we are following in Pre- WWI Germany's foot-steps. So what's next, an American Hitler ?

Edit added: You know, now that I think about it, if the Gov does create a currency based on Real Estate, it certainly would give much more credibility to the accusations of no gold in Ft. Knox !

low volume

Submitted by SIlverbee on July 31, 2012 - 2:59pm.

Is it that you are looking at a contract period. I.e. Traders started buying the next contract month? Check other contract periods to see if the volume peaks or stops at a similar time. Come back to confirm.