YEEEEEEHAAAAAAAAAA!!!

So I'm watching this crazy volatility this morning and I'll I can think of is this old "Far Side" cartoon:

At first, I was simply thinking about the YeeeeeHaaaaaaa part, watching the steep drop followed by the even steeper rally. But the the metaphor developed further as I thought of The Bernank and His Royal Buttboy Hilsenrath. They are the pilots of the UFO, clearly enjoying themselves as they joyride above the terrorized masses.

In case you somehow missed it, here's your timeline:

And now the WSJ is confirming with a full article on The Bernank's next move: http://www.zerohedge.com/news/when-one-hilsenrath-just-not-enough-heres-another-bernanke-signals-readiness-do-more

Here's what it looked like, as it happened:

And here are 6-hour charts that show the full ranges which have contained the metals for the past week:

Crude made it all the way down to $94 yesterday. Did you buy some? Maybe you'll get another chance. Maybe not. If anything, it seems worth the risk. With September likely holding an increase in MENA tensions, the UPside certainly seems to outweigh the potential downside.

Lastly, did you see this yesterday? Was it widely proclaimed on air by on CNBS? Did it make the WSJ? How about Bloomberg? Hmmmm. Just more evidence of the coming changes. Don't ever say you didn't see it coming. http://www.cnbc.com/id/48838061

Alright, gotta go. Things are moving fast and I've got work to do. Expect The Cartel to still defend 1680 today. Lots of stops above there and, if tripped, gold should shoot toward 1700 and then 1720.

More later.

TF

p.s. Here are a few more favorites.

And, my alltime favorite:

248 Comments

sewfarsewgood's picture

Thank the Bernank!

Infrequent poster, but daily reader.  Turd you rock!  Great community. Great commentary. Great comments. Thank you all.

Playing with large triple edge swords this past week or so.  USLV. Up 14% today, +40% in the last 10 days.  Go Bennie. 

¤'s picture

50 years of space exploration

California Lawyer's picture

Apple Loses Patent Suit in Japan

Apple, is a huge component of the S&P.  See here.

So, when Apple won its patent suit locally, here in its backyard in California, naturally, all was good, for the S&P, for California, for all those hedge funds who hold tons of Apple stock.

But wait, there is more to this story it seems.

Apple just lost a patent suit in Japan.  Bummer for Apple.

So, how do these two things relate to PM's?

Apple is not an innovator any longer.  Apple is a monopoly.  Monopolies sue competitors, while innovators just make new markets.

Apple's market share will decline worldwide, as Samsung's products are more ubiquitous, and cheaper.  

As Apple's market share dwindles, and as Steve Jobs is no longer there as the company's messiah, who then will take the reins and launch Apple into a new area or innovate? 

So, the Apple share price will decline, but what will prop up the S&P 500? when the many hedge funds exit their positions in Apple, further driving the price of Apple shares downward and further depressing the S&P 500?

Will there be any push for more QE?

Or is this simply another data point on the way to the silver launch?

[p.s. I was way wrong on the implosion call of today.  I cannot believe that the metals are higher.  I sure hope this breakout holds.  Great call Turd, Ivars, and the rest!  I am damn glad I do not trade paper.]

OhOh's picture

Yep, China's President Hu

Re the allusions of grandeur of Bernanke. Yep, China's President Hu Jintao with the agreement to use the Yuan and Euro as there preferred mechanism of exchange has signaled yet another dump of the usefulness of the US$.

Can't you bring yourself to announce the the Chinese have taken another step, just a link? Or was this the information you had in your back pocket?

"Lastly, did you see this yesterday? Was it widely proclaimed on air by on CNBS? Did it make the WSJ? How about Bloomberg? Hmmmm. Just more evidence of the coming changes. Don't ever say you didn't see it coming. http://www.cnbc.com/id/48838061"

RunRunRun's picture

@sewfarsewgood

You are either stupid or crazy riding on 3x long silver ETFs on an unpredictable day like today

and now also rich!

well played, sir

SE's picture

@ eyeswideopen

56.25 is a possibility, by April 2013, but very unlikely before that.  I would not be surprised to not reach that until May 2014.  Nothing has been done about the shorting situation at COMEX that I can see.  Some very big black swans would have to be starved out while in the air to get them to land and eat around that time frame.

I get the feeling that either people like Jim Turk is completely off his rocker in seeing $50 silver by the end of the year, or he is ABSOLUTELY SURE that black swans are indeed going to land this year and not next year or the year after because of the depth of information I may not have at hand.  My bet is next year or after, with the hope that I'll be proven wrong.  For a change.  I'm tired of being right.

benny_bomb_boom's picture

@ SE

i do not know about you but being right helps me sleep @ night. lets kick this thing for all the G'z who hang here w/ the report. it feels good, support. i love to see others happy. enjoy this weekend. you all deserve this one. after all it was a long, hot summer w/ an explosive 4% friday move...who is not in a good mood? and we have yet to see september. oh what an historic month this will be. stay thirsty save the world

Colonel Angus's picture

Gold flirts with 1700....1700 likes it

I'm hoping to see this on Monday, but my guess is that gold just tears through 1700 instead. I'll be looking for a deal this weekend, but I'm almost all-in. Now if it is right that I can cash out my 403b, we might be talking a different story...I need to check into this ASAFP.

Rag2RichesFX's picture

Turd we need to watch

Turd we need to watch 1695-1705.

Honestly I see a test on 1800 happening easily, and even even 1920, but we need to take it one step at a time.

tpbeta's picture

Goddam

I sold my $26 silver at $28 because I thought this rally is irrational - and I still think that. Sucks but I can't bring myself to buy because I don't truly believe Benny will print till January, and front running the fed is just gambling.

I know I'm likely  wrong, but I can't bring myself to just chase the momentum without a strategy I believe in. Sucks to be me this week.

philipat's picture

Ore Grade

Just to add my 2 cents. It seems for certain that ore grades are declining and will continue to do so. However, it does not necessarily follow that stock prices of the miners will fall, if that is the contention. Firstly, P/E's of all mining stocks are at historical low levels. Second, if ore grade is lower, just mine more of the stuff. Of course this results in lower yield per unit of energy consumed, which would result in higher marginal production costs per unit (Lower gross margins). However, the latter assumes that the price remains the same. If prices continue to increase, despite the higher costs and lower yield, margins will increase and stock prices will also increase from artificially low levels. FYI, most aggregate PM mining indexes are up over 10% for the month.

In summary, ore grade is, and always was, an important factor but it is not the ONLY factor.

philipat's picture

Far Side

Thanks all for the great selection of Larson. It's not essential to be a Monty Python fan to appreciate the genre of humour, but they do kind of go together?

exiledbear's picture

I don't know how much clearer it can be said

17 handle, here we come.

¤'s picture

And now for something completely different...

ClinkinKY's picture

I can't believe you people are...

...going OT and posting cartoons.

wink

¤'s picture

A History of Gold

On a slow Friday night and a long weekend... a little history...

1. Ancient History and Classical Era

croesus history gold 1 History of Gold

5,000 years ago in Egypt and the Middle East: gold and other metals fulfilled the classical function of money (exchange, means of payment, and value storage). However gold coins were not yet widely used in economic transactions.
In 560 BC, Lydian king Croesus: He was the first to produce standardized gold coins which were of the same size and value. The minted coins guaranteed, besides its propaganda function, the value and quality of the precious metal.
In 225 BC, the Roman Empire used the first gold coins: This was a response to the devaluation of their silver currency, caused by the oversupply of silver coming from the new Roman colonies. Roman gold coins (Solidus) remained the dominant currency of Europe, northern Africa and Asia Minor until the beginning of the 12th century.

2. Medieval Times

medieval mining History of Gold

In the Middle Ages, silver as preferred coin metal: Gold was more and more used only as a value storage instead of a means of payment, as this metal was rarer and more valuable than silver. The crusades and the expanding long-distance trade helped to reintroduce gold as a means of payment. In Mediaeval Europe gold had a value of 10 to 12 times that of silver.
In 1300 hallmarking: A system to check and guarantee the quality of gold was established in London, creating a common standard for gold purity.
In the 14th and 15th century increase of gold value: The reasons were the decline of European mining, leading to a reduction in new gold supplies. During the same time, coin production decreased by 80%. This made gold in circulation rarer, increased the price for this precious metal, and lead to a continuous deflation.

3. Early Modern Times

spanish conquest of america1 History of Gold

Discovery, subjugation and plundering of America: The engagements in the New World brought large amounts of gold to Europe during the 16th century. The new gold supply first reversed deflation and later caused inflation in Spain, later in the rest of Europe, and even in Asia.
Second half of the 16th century, gold coins further lost their value: This is because gold coins were combined with other metals, such as copper, and lost its purity. More low-grade coins were brought into circulation due to the Seven Years War (1756–1763).
Fixed gold-silver conversion rate and gold standard: In the United Kingdom, Sir Isaac Newton, warden of the Royal Mint, determined the conversion rate of gold and silver. This helped to ease the big fluctuations of gold coins. In 1774 the British Parliament introduced the gold standard. Here, the strengths of the currency is determined by the national gold reserves.
Bimetallism of the 18th and early 19th century: Other European countries and the United States minted at the same time gold and silver coins. The basis was a fixed conversion rate between these two metals. In France, starting in 1795, the rate was 15:1, meaning that gold has a 15 times higher value than silver.

4. Classic Gold Standard (1816 – 1914)

black friday 1869 History of Gold

British Pound becomes reserve currency: On 22nd June 1816, Great Britain declared the gold currency as official national currency (Lord Liverpool’s Act). On 1st May 1821 the convertibility of Pound Sterling into gold was legally guaranteed. Other countries pegged their currencies to the British Pound, which made it a reserve currency. This happened while the British more and more dominated international finance and trade relations. At the end of the 19th century, the Pound was used for two thirds of world trade and most foreign exchange reserves were held in this currency.
American Civil War and Gold Speculation: Between 1810 and 1833 the United States pursuit de facto the silver standard. The gold price was at US$ 19,39 for one ounce of fine gold. In 1834 (Coinage Act of 1834), the government set the exchange gold-silver exchange rate to 16:1 which implemented a de facto gold standard. The American Civil War (1861 – 1865) and the Black Friday at the New York Stock Exchange (24. September 1869) lead to spikes in gold price of US$ 591.12 and US$ 33,49, resp. per ounce. In 1879 the United States set the gold price to US$ 20,67 and returned to the gold standard. With the “Gold Standard Act” of 1900, gold became an official means of payment.

5. Interwar Period (1918 – 1939)

young roosevelt History of Gold

Return to the Gold Standard: During wartime, central banks abolished the gold standard to be able to print more paper money which should help to finance the war. At the 1922 conference of Genoa central banks proposed to return to a partial gold standard to foster international trade and economic stability. This was only a partial gold standard, as gold stayed in the central banks’ vaults. The gold was represented by paper notes.

The uncoordinated return to the gold standard resulted in over- and undervaluation of important currencies and lead to the collapse of the new gold standard as a regulation of the international monetary system. Its collapse was prompted by the Bank of England’s decision in 1933 to suspend redeeming gold. This meant, that citizens were not to receive anymore gold in exchange for banknotes.

Prohibition of Gold in the United States: In 1933 Franklin D. Roosevelt prohibited the possession of gold by private citizens. Gold coins, bars and certificates had to be exchanged for a fixed price of US$ 20.67 per ounce. The only exception was gold for industrial or artistic purposes. The rationale was to prevent the circulation of privately owned gold which may have become a competing currency. A violation of this prohibition could result into a fine of US$ 100 (or US$ 1,708 at today’s value) or 10 years of prison. However, the biggest part of the population was not affected by this prohibition, as citizens still could keep up to five ounces of gold. Roosevelt’s prohibition was only abolished 40 years later. On 31st January 1934 the Exchange Stabilization Fund was established and the gold price was set to US$ 35.00 per ounce.

6. Bretton Woods System (1944 – 1971)

bretton woods conference History of Gold

Introduction of the Bretton Woods System: This monetary order established the rules for global commercial and financial relations, being named after the conference of Bretton Woods, which took place in 1944 in a New Hampshire hotel of the same name. Bretton Woods promoted the US dollar to the reserve currency with a fixed exchange rate of US$ 35 for one ounce of gold. The currencies of participating countries were tied to the US dollar.
Aim: As foreign currencies were pegged to the dollar, the gold rate could be set for a long time in advance. The Bretton Woods System also bound the United States to redeem the participating countries’ foreign dollar reserves for gold. The aim of Bretton Woods was a barrier-free word trade based on fixed exchange rates. Two new institutions were to oversee the system. These were the International Monetary Fund and the International Bank for Reconstruction.
Triffin Dilemma: In 1959, the Belgic-American economist Robert Triffin pointed out a flaw in the Bretton Woods System. Foreign governments held more dollar reserves as the US central bank had gold reserves. Thus, to maintain the liquidity for international trade, more US dollars had to be printed. This however would result in a deficit of the United States’ balance of payments. Therefore, Triffin suggested creating an artificial currency. This was eventually considered with the special drawing rights.
London Gold Pool: In 1960 US foreign liabilities exceeded their national gold reserves. This proved a danger to Bretton Woods. To sustain the system, the USA and seven European nations agreed to employ market interventions to keep the gold rate at a certain rate.
Crisis: In 1967 the French president Charles de Gaulle declared that the Vietnam War made it impossible for France to continue with the payments for the London Gold Pool. In the same year, the British government decided to devalue the British Pound. This resulted in a rush demand for gold.
Collapse: In 1969 several participants of Bretton Woods tried to redeem their dollar reserves for gold. However, the United States was not able to fulfill their contractual obligations. (Foreign US dollar reserves were at that time so large that the United States could not even have redeemed the dollar reserves of merely one participating country). In 1971 Nixon cancelled unilaterally the direct convertibility of the dollar to gold (Nixon shock). This led to a collapse of Bretton Woods and the fixed gold price of US$ 35 per ounce ceased to exist.

gold chart 71 present History of Gold

7. Bull Market: Upward Trend (1971 – 1980)

oil crisis gasoline rations History of Gold

Abolishment of Bretton Woods: On 1st May 1972 the gold price jumped to over US$ 50 per ounce (US$265 inflation adjusted) for the first time after the 1864’s Black Friday. In the first quarter of 1973 the currency markets had to be closed for fourteen days, after which the Bretton Woods System was succeeded by a system of flexible conversion rates, without any peg to gold and dollar.
The begin of gold trade: On 14th May 1973, the gold price broke through the threshold of US$ 100 per ounce (US$ 509 inflation-adjusted). On 14th November 1973, US President Gerald Ford legalized the possession of gold by private citizens. In the next years many other countries, such as Japan, allowed its citizens to own and trade gold. In 1975 the New York Commodities Exchange was established and trading in gold futures could begin.
Jamaica Agreement: In 1976, the International Monetary Fund agreed upon the future of the gold standard and the international currency system. With the Jamaica agreement the IMF eliminated the pegging of gold to the US dollar and accepted managed floating exchange rates. Since then, currencies are fiat money, not redeemable by gold and theoretically the money supply is infinitely expandable.
In the 1970s industrial countries experienced stagflation with strong inflation, weak economic development, low productivity and high unemployment. This decade was characterized by high uncertainty in the financial world, the oil crisis, a strong increase of US national debt, a strong increase of money supply and a flight of investors into material assets. During this time, the gold price increased 15-fold.
On 27th December 1979 the gold price reached a new high of over US$ 500 per ounce (US$ 1,552 considering inflation). On 21st January 1980 the gold rate at the New York Commodities Exchange stood at US$ 873 (US$ 2,346 inflation adjusted). The reasons were the Iran crisis and the attempted occupation of Afghanistan by the Soviet Union. This all-time high marked the end of an upward-trend and set a record for gold for 28 years.

8. Bear Market: Downward Trend (1980 – 2001)

In 1980, a 20 year-long gold bear market began. To end the economic stagnation, the US Treasury, among other things, limited the increase of money supply. In the short-term this resulted in a more severe recession and a higher unemployment rate. However, this policy gradually stabilized the economy and controlled inflation. In the 1990s, the United States experienced under Bill Clinton an extended economic upturn (New Economy). In 1994, the New York Commodities Exchange merged with the New York Mercantile Exchange (NYMEX). In 1999 the gold rate in London was at an all-time low of US$ 252,80 (US$ 336 inflation-adjusted).
After 1982 China allowed the possession of gold by its citizens. Further, the establishment of the Shanghai Gold Exchange in 2002 expanded considerably the gold trade und thus increased demand for this precious metal. Before that time, gold had to be sold to the Chinese Treasury. Within the next five years, China overtook the United States to become after India the second biggest gold buyer.
To regulate gold sales, and thus control the gold price, 15 European nations signed the Central Bank Gold Agreement, defining how much gold could be sold annually. The limitations were 400 per year or 2000 tons within five years (CBGA1 1999 – 2004). The second agreement, CBGA II (2004 – 2009), restricted gold sales to 500 tons annually. The third agreement, covering the years 2009 until 2014, set gold sales to a yearly 400 tons.

9. Bull Market: Upward Trend (2001 – )

Lehman Brothers1 History of Gold

Since 2001 the gold price has risen steadily. This increase has a clear correlation with the growth of US national debt and the weakening of the US dollar relative to other currencies. In 2005 the gold price reached US$ 500 for the first time since 1987.
Three years later, in 2008, the rate was at more than US$ 1,000. The financial crisis increased the demand for physical gold and exchange traded funds (ETF). The gold reserves of the biggest gold ETF, SPDR Gold Trust, reached 2010 a record of 1320 tons. Therefore, this gold fund controlled more gold than the Chinese National Bank.
In the same year, several central banks planned to ramp up their gold reserves, among others the Chinese National Bank, the Reserve Bank of India and the Central Bank of Russia.
December 2010, the gold price reached a new record of US$ 1431,60 per troy ounce. Compared to gold, the US$ experienced an all-time low. Reasons were uncertainties about a sustainable economic recovery, increasing inflation, possible corporate insolvencies and defaults of corporate bonds. Other drivers of demand for gold were growing national debt, low interest rates and an expansion of money supply. The decrease of gold production by 10 percent since 2001 and strong demand for jewelry and by institutional investors were to other factors that have been driving up the value of gold.
August 2011, more than US$ 1900 for one ounce of gold. Investors are seeing in gold again a save heaven thanks to the US national debt, financial crisis in Europe and the fear of a new recession.
What will be next?

http://goldratefortoday.org/history-gold/

TomMack's picture

keep stacking

plenty of work to go.  stick with your program do not over commit.  keep dry powder.  it will be easier stacking now  but unfortunately we will get less.  stack stack stack.        

TomMack's picture

more unrelated

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philipat's picture

Far Side

Anyone have my two personal far side favs:

The beaver in the woods carrying a shotgun and wearing a human scalp hat. And:

Sorry, have we caught you at a bad time.

Please post if you have, I lost the hard copies several years ago.

Turd Ferguson's picture

Sorry, man

MODERATOR

That sucks. I feel your pain because I've been there.

But this is exactly why I keep preaching to stack/hold, stack/hold. The upcoming rally is going to catch everyone by surprise and I fear that, without my constant cajoling, too many will sell too early.

Please buy the next dip.

Response to: Goddam
Turd Ferguson's picture

Lots of good, new stuff at

MODERATOR

Lots of good, new stuff at Trader Dan's

http://www.traderdannorcini.blogspot.com/

El Gordo's picture

Goddam

I feel your pain

sixdollarsilver's picture

Hey Turd

I don't think I thank you often enough for this space you've created here, it's awesome, just awesome. And man, the crap you've had to put up with sometimes...

So, a massive THANK YOU, Turd. Finger on the pulse, brain in gear and the perseverance of a monk (beatification can wait until silver hits 6 to the power of 3 ;)

I look forward to taking you and your family sailing in this corner of the world should you wish to visit our fair shores one day.

Thanks and thanks again, seek and ye shall find.

Calum's picture

conjecture and speculation

Until the author reveals their source, this article remains conjecture and speculation

Katie Rose's picture

AC_Doctor ~ dates of Morgan Stanley's demise

Which weekend in Oct is Morgan Stanley going to be sacrificed?

So which weekend in October is Morgan Stanley going to be held, carotid artery up,on the chopping block or are TPTB going to wait for them to bleed out after the November elections?

*************************************************

Since nobody has answered your inquiry, I will share with you my thoughts.

I am as certain that Morgan Stanley is going to be taken out on one of the dates below as I am that my little "Escape Artist" goat will find a way out of the pasture within the next three days. It doesn't seem to matter what I do, she outsmarts me every time. devil

The evil empire is as predictable as my little Escape Artist. She escapes. They commit evil acts against the rest of us.

They have certain dates that they strike on. These dates are:

September 21 - Mabon - one of the Illuminati's Human Sacrifice Nights

September 21 -22 - Autumnal Equinox

October 31 - Samhain, also known as Halloween, or All Hallows Eve. This date is the Illuminati's highest day of human sacrifice. (Note this is the day MF Global filed for bankruptcy, sacrificing/stealing billions of dollars from clients with impunity.)

December 21Yule

December 21-22 - Winter Solstice/Yule. One of the Illuminati's Human Sacrifice Nights

Mark these dates on your calendar. The EE loves to show they are in charge by doing lawless acts on these dates. 

 

ivars's picture

GSR- the move down continues.

GSR- the move down continues. 54 will not be a consolidation place, next stop at 52-51. Given yesterdays silver move, especially in Globex, I do not see any bottoms below 30 anymore, so be careful in waiting for dips. These dips might be higher than todays price. Or not much lower. There might be some hesitation around 33,5  USD but if its not there see below.

Bernanke in fact disappointed compared to 2010 Jackson Hole speech BUT silver had been so low priced during the summer that that was enough to wake it up. That means that reaction to next events will be similar- everything bar crash in EUR will be positive to silver, and, given the time line , also of events, coming, its hard to see EUR smack down in September. In October, one should look a bit more carefully, there could be a pullback/plateau but by then silver should be around 36-37 USD. Do not miss this breakout waiting for pullbacks.

Also, some buyers might get interested that silver is now above 200 day MA and 50 week MA. 50 week MA has served very well in the past to indicate regions where silver price is growing and decreasing, and was capping the region where it stagnated this summer from above.

philipat's picture

@Calum

You aren't another "California Lawyer"by any chance?

Stratajema's picture

WTH?

When the paper price of gold and silver decrease then you all blame the evil empire, the rigged Crimex, the wicked witch, and warn about the delusion of paper trades being used for price discovery.

When the paper price of gold and silver increase then you all somehow feel vindicated, you're on a roll and $2,000 is just around the corner.

LOL

Basically, the Bernak is going to keep markets aloft by constantly alluding to QE.  But somehow, the gold/silver bulls believe that this time he really means it! Oh sure.

sixdollarsilver's picture

I would like to be the first to thank you for your contribution

Stratagema

ivars's picture

@Stratajema-want to exclude myself from "all".

Stratajema - I never mentioned EE etc. in any posts. Its just a market as happens to be and paper price decides how much You can stack for your fiat. That's all there is.

Bernanke is just a pawn , catalyst, messenger, addition  in unstoppable , unsustainable increase of the USD debt, effectively a source of global money supply. If he would have avoided QEs, /USA economy would have receded / debt would have surged relative to GDP, USA downgraded with the same effects on silver gold prices as now when the money supply expansion path has been chosen. Also, QE is global preference.

Once on drugs, always on drugs (may be change the substance) , as politicians can not afford to have hangovers/rehabilitation periods.

Probably there are others not deserving to be generalized in a way You do.

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