Weekend Review

What an interesting week. Instead of volatility, we got containment and flatlines. Something tells me next week won't be the same.

Ponder this for a moment, QE∞ is announced as official Fed policy last Thursday. That day gold, the only alternative currency to steadily-debasing fiat, responds with a $38 move. Frankly, I would have expected more but, given the Cartel propensity for containing daily moves at either the +1% or +2% levels, $38 seemed about right. However, over the next five days, would you have expected this?

  • Friday, 9/14: net change +$0.60
  • Monday, 9/17: -$2.10
  • Tuesday, 9/18: +$0.60
  • Wednesday 9/19: +$0.50
  • Thursday 9/20: -$1.50

So, cumulatively over the next five days trading in gold, immediately following the long-awaited announcement of QE∞, the total change was down $1.90. Huh?? And, again, it's not like we saw the +$20, -$22, +$31 kind of volatility you would have expected. Very strange and, once again, subtle evidence of the outright blatant and ongoing manipulation and "managed ascent" of the paper price by The Gold Bullion Banking Cartel.

To no one's surprise, this week's CoT continued the trend of Cartel naked short issuance to contain price. Again, I'm not really sure who wrote the mandate that JPM, DB et al have to act as market makers in the metals but, for some reason, that is the role they allege to play. Spec money comes into the pit and the banks issue the highly-leveraged paper. Not content to see price bid up as the spec bids search for willing sellers of existing contracts, The Cartel, instead, simply issues brand new contracts to satisfy demand.

In doing so, The Gold Cartel added another 18,196 short contracts this week and brought their net short ratio back up to an astonishingly dangerous (to them) 2.68:1. Why is this so dangerous, you ask? Because they are continuing to play this game as if none of the fundamentals have changed. This is no longer 2002 or 2008. It's not even 2011. We are near The End Game for fiat currency and the "creditor nations" around the globe recognize this. The are readily exchanging their rapidly-devaluing fiat for hard assets, gold in particular. This insatiable physical demand underpins the paper market and makes precipitous, short-covering drops, like we've seen The Cartel execute in the past, all but impossible. Oh sure, there will still be selloffs and beatdowns...Heck, we saw one yesterday...but incessant physical demand forces The Cartel to quickly turn tail and buy in order to cover and secure the metal required to meet the allocations sought at every London fix.

So, again, look to buy the dips. Not every $5 dip, mind you, but any substantial dip the pushes price back to obvious support points. Right now, the obvious area is around $1755-1760. IF a dip develops early next week, I'll be all over it. Gold looks certain to soon blast through $1780 and then $1800. From there, I expect a rapid move toward the old all-time highs of $1920. At that point, gold could, once again, get disorderly to the upside, similar to what we saw in August of 2011. It will likely break out and UP through the long-term channel again and head toward and through $2000.

And here is a long-term chart of gold priced in euros. Recall that we've been discussing for weeks how euro/gold was getting well ahead of dollar/gold and that dollar gold would eventually catch up. A month ago, euro/gold was showing that $1800 gold was coming. Now, euro gold makes it look like $1920 gold is only about a month away. (Chart courtesy Trader Dan: http://www.traderdannorcini.blogspot.com/2012/09/euro-gold-on-track-for-all-time-high.html)

And JPM and their pals continue to play games with silver, blissfully unaware that their dynasty has ended. Just last week, they added another 2,880 short contracts in a vain attempt to pin price below $35 and protect the vulnerable buy-stops near $35.50 that, if tripped, would send silver quickly toward $37.50. Oh well, screw 'em. So they "won" this week. Whatever. They're just going to lose eventually so what's another week of waiting. Now at a total gross short position of 82,358 contracts and a net short ratio of 2.58:1, The Silver Cartel is sitting on a powderkeg of their making. Boy is it ever going to be fun to watch it explode right under them.

As The Doc pointed out yesterday, The Forces of Darkness expended a lot of ammunition yesterday in a desperate attempt to start a cascade and keep price under $35. ( http://www.silverdoctors.com/cartel-dumped-2x-annual-us-silver-production-on-market-in-15-min-to-smash-silver-under-35/) They now find themselves in a bit of a jam as we head into Tuesday. They'll need to cover quite a few contracts before the 1:25 EDT close that day or they risk showing their footprints on next week's CoT. What will they do? Cover, of course! Now the question is, will they gamble by raiding first and hoping for a steep enough selloff that they can cover the raid "material" and more on the way back up? Maybe but I doubt it. Physical demand will easily blunt the dip again just as it did yesterday. Their only logical choice, after being thwarted yesterday, is to begin to cover yesterday's new shorts as early as Monday, otherwise they risk a significantly "Happy Tuesday" that blows out those $35.50-area buy stops and send price toward $37+. What to do, what to do. A whole lot of choices, all of them bad. HAHAHAHAHA! You did this to yourselves, you arrogant bastards, and now you're stuck. You'll get no sympathy around here.

And in case the action in crude this week left you feeling that global peace and harmony were right around the corner, I give you this to ponder: http://www.zerohedge.com/news/2012-09-22/head-irans-revolutionary-guards-war-israel-will-occur

In that same vein, I was contacted this week by a nice guy who asked me to link a few of his prepping articles. I certainly hope you are using this time to full consider these topics: http://destinysurvival.com/2012/09/03/food-storage-how-to-calculate-for-your-needs/ & http://www.emergencyfoodstorage101.com/2012/08/07/being-prepared-for-power-outages/. Of course (shameless plug coming), you can find many of these items by visiting the Turdmart, a link to which is conveniently placed at the top of each page but copied below for your convenience.

http://www.tfmetalsreport.com/preparation-store

I hope that everyone has a safe, fun and relaxing weekend. Come back on Monday and be prepared for a week that is considerably more volatile and interesting than this past one was.

TF

11:00 pm (23:00) EDT Sunday UPDATE:

So, what the hell happened at 20:58? Anyone have a guess? I do but, first, let's look at the charts:

At exactly the same time, the POSX began an uptrend that carried it 20 ticks higher over the next hour.

So, what we likely have here is another HFT algo (WOPR) run amok. True Cartel hit jobs rarely impact so many markets across the board. On a light volume Sunday night, a brainless computer "saw" the uptick in The Pig and began program selling.

Regardless of instigator or intention, it is going to be very difficult to break down paper price much further. Difficult but not impossible. That said, I will be very surprised to see the metals considerably lower in the morning as there is no reason to expect a buyers strike in London on Monday. As mentioned Friday, gold should have considerable support near $1750. Silver will continue to find bids, just as it did two hours ago, near $33.50.

Hang in there and try not to panic. If protracted selling does come in, consider it a blessing. Please consider any and all bouts of price weakness as opportunities to add to your stack.

TF

481 Comments

Dr Jerome's picture

Krugman

Paul Krugman winning a Nobel prize in economics is like Barak Obama winning a Nobel peace prize.

What is wrong with this world?

It is Saturday morning and I am sitting downstairs (yes—the basement) in my office where we store our prep food and other items. The markets were encouraging this week for a short-time stacker. But my concerns are weighing on me—concerns about the presidential election, the future of the US and world economies, careers for my kids, and the scary reality of a possible life where one has to physically protect your possessions. I am comforted by the buckets filled with rice & beans, the shelves stacked with other canned goods. I am also strangely comforted by this 100 ounce bar of silver I keep on my desk. I pick it up and feel the heft. I rub it and feel the smooth surface, I see the glimmer…and suddenly I know why this stuff is valuable. Someday, someone will trade what I need for this bar of silver. Perhaps an acre of land where I can grow food. Perhaps a house for my daughter. But it is worth something! 3000 years of written human history affirms the universal value of precious metals. One man, calling gold a “barbarous relic” will not change all that.

<rant>

Oh! Also, if you had not noticed, I am really irritated by anything Paul Krugman says. I wish no ill upon any other human being, but I really wish he would keep his mouth shut and retire. Perhaps, as an academic, I am particularly goaded to anger when another academic prostitutes himself for money to serve psychopathic world rulers, contriving “scholarly” theories to justify their asinine policies that impoverish the citizens of the world.

<rant/>

I got lucky on being first. Must be "pay back" for feeding Turd this morning.

ferretflat's picture

Win,Place,Show

I am still prepping, stacking, and long on calls for GPL!

Pegasus's picture

Third

For Turd!

balz's picture

Silver COT

What about silver COT, Turd?

Dagney Taggart's picture

5th

is so dull.

Edward G's picture

Nice one TF !

Nice to hear a clear summary of the predicament of these buffoons,

Good w/e to all !!

...for the sake of chat, and at the risk of advertizing my ignorance up this high... I was wondering how many ETF investors actually care if they end up getting cash settlement... if they are just speculating on the price then maybe they don't really want any metals...

e.g. 1) If it was oil, you wouldn't want to take delivery of that would you?

      2) If I was invested in Kellogg's, I wouldn't want them to redeem my shares in cornflakes, I'd prefer the money.

Dr Jerome's picture

Balz

Turd says above that the EE added 2880 shorts last week keeping price under 35. To me, that short count is the critical number.

Dagney--glad to see you back!

worldend666's picture

@Dr Jerome

The amazing thing  about Krugman is that underneath his articles the comments are all from the same mindset. People really believe this stuff. As they say you only hear what you want to.

I was in another discussion this morning and one poster commented that Krugman is akin to a porter rearranging deck chairs in the titanic and that whilst futile his activity is harmless. 

Nothing could be further from the truth. Krugman would like to extend the current situation out as far as possible by printing cash. This cash will be spent indiscriminately and will inevitably mis-allocate physical capital. The longer this goes on the more capital will be wasted. Where would you rather live - in the USA in 2008 immediately following a default and where assets were still in decent condition, or in a USA of 2020 following hyperinflation during which assets were left to rot or mis-used? I live in Eastern Europe and I can tell you the aftermath of communism was not pretty.

Hagarth's picture

Cat out of the Bag?

"Ladies and Gentlemen: It looks like we are going to have a "nuclear reaction" with respect to GLD and SLV especially if their inventories are not real but owning nothing but hypothecated and rehypothecated paper!!"

http://harveyorgan.blogspot.ca/

Is a 3rd party verification process going on in SLV/GLD going on right now in regards to their vaulted holdings?  Or is this just another warning from harvey to stay away from these products?

Marblesonac's picture

Timeline for events and No Gold backing for the USD

High inflation hits the US 1Q13

Hyperinflation hits midsummer 2014

Hyperinflation ends Sept or Oct 2015

If you wonder why the FED is now buying MBS's, it's to bail out the banks at 100cents on the dollar, PLUS:

The "New Dollar" will not backed by gold, or even a basket of currencies.

The "New Dollar" will be backed with the $3T of mortgages that the Fed will have bought plus the $7 that Fannie Mae/Freddie Mac (will) have.

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."

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

China WILL back their currency with either gold or a basket.

Dagney Taggart's picture

@Dr J

I come up for air once in a while. Whenever I do though, I get these kinks in my neck. Just kidding. Nice to have some free time this morning.

If anybody cares, the mini will by raiding V-town again at $16xx and $30.

One of my techs sent me this link: http://stockcharts.com/public/1178409/chartbook/260567602;

Dr G's picture

What a great post! One of my

What a great post! One of my favorites in a long time. It is becoming apparent that those who conspire against silver have painted themselves further into a corner. Should be fun to watch it unravel. 

Of course, I'm increasing my physical positions at every turn. 

I Run Bartertown's picture

Mexico/China trade without $?

Anyone familiar with this source? Looks iffy, and a few sites I see confirming it with a quick google search also look iffy. Anyone seeing this anywhere else?

http://www.indymedia.co.uk/en/2012/09/500358.html

"Sources inside the Mexican government refuse to confirm that the Mexico government has been in secret negotiations with China over possible crude oil sales to China without using the US dollar. "

145Bluesman's picture

"managed ascent"

Hey, give the cartel some credit.

At least they are trying to let the sheep get in at a low price.!

(sarc)

=====================

"What to do, what to do. A whole lot of choices, all of them bad. HAHAHAHAHA! You did this to yourselves, you arrogant bastards, and now you're stuck. You'll get no sympathy around here."

LOL

I Run Bartertown's picture

"...just what they do..."

But if you're reading this you've already fled the "everything's going to be okay" crowd. Next up will be the "everything's going to be okay in six to eight weeks" crowd. They'll matter even less then than now, come a real catastrophe there are more dangerous crowds to stay away from. Chief among them is the "Official crowd". More crowds to avoid are upcoming but this crowd is well positioned to dominate at the outset so it deserves the first look.

The improvident by choice, whose only plan is, and always has been, for someone else to take care of them, have a powerful ally you can't afford to ignore: federal and state officialdom. Not only will their agents forcibly take your stuff for 'redistribution' to them—they call it "social justice", and not only will they commit other real injustices, they'll publicize them to be seen as doing so. They've sourced the care and feeding of hostile parasites to you for so long they believe it's your lawful duty to be picked totally clean on their behalf. Self-sufficiency smells like evasion to them, and evasion is actionable.

Federal and state officialdom will mismanage any emergency, lie to you and work against you. It's useless to get all indignant about it, it's just what they do. Treat them as another aspect of the calamity, the only predictable one, fortunately. Don't poke the bear in the eye. When interaction is unavoidable be civil and courteous. Comply to the extent you must. Take the instructions and list of no-nos and such they, ahem, offer. ...Give them no reason to notice or remember you, then be rid of them lest they decide decent people need protection from you in particular.

Take special note of the Department of Homeland Security. It very nearly stands apart from government proper. The 'best fit' is the Sicherheitsdienst art-link-symbol-tiny-grey-arrow-only-rev01.gif, with a touch of Red Cross for cover.The DHS repeatedly reveals itself as malevolent, incompetent, devious art-link-symbol-tiny-grey-arrow-only-rev01.gif and gratuitously violent. It's beyond libel, no surprise, the place is a honeypot for ambitious political preeners, affirmative action incompetents and time-serving misfits, in short, a settling pond for overachieving sociopaths and their sycophants. You'll have no difficulty so bad they won't make it worse and feel good doing it. You have no rights DHS is bound to respect and it has a talent for inventing new forms of terrorism to discover. Also be aware the upper reaches of DHS have a reputation for preferring aggressive sexual deviants, currently displayed most overtly in the weird bullying and outright molestation of innocents by the TSA. With the absolute power a national calamity would confer on them, and assuming continued support from a reportedly compromised White House art-link-symbol-tiny-grey-arrow-only-rev01.gif, the entire DHS is poised to become an armed pimpocracy.

Skepticism isn't enough, the rule is: no voluntary contact with the DHS.

http://www.woodpilereport.com/

Dagney Taggart's picture

@Dr G

Careful what you wish for. Criminals acting like cornered animals orchestrate chaos and war, create false flags, run false propaganda campaigns, and murder innocent people.

It's happened before and it's happening now.

balz's picture

Dr Jerome

Yes, saw that, but was hoping to read more about the COT, which looks extreme.

SteveW's picture

SLV/GLD

I think it's part of Harvey's regular warning. I don't expect these entities to collapse for a long time, at least not until after there are several lawsuits/enquiries brought concerning missing allocated gold. I have stopped selling puts in these ETFs but use SLV for buying calls. I'm in a quandry as to whether it's better to use SLV or SLW for options. The problem is the leverage with SLW and the likelihood of the SLW/SLV ratio running way ahead of the silver price and then dropping. What I mean is that SLV is 100% correlated with the silver price whereas SLW is indirectly related to the price of silver and its correlation is lower, sometimes this helps and sometimes it hurts.

Swineflogger's picture

I wish this patriot was President rather than N*mb N*ts

Dagney Taggart's picture

Wow IRB

Great excerpt. The part about playing ordinary joe sounds especially important. Eventually the narcissists and parasites will run out of victims, be forced into overt criminal acts, and be dealt with in turn. If anybody hasn't read into it, find a history of the Soviet Union from 1985 until 1991 and the social reorganization dynamics until about 1995.

On a side note, dad was mentioning last night how the Afghanis leveled the playing field against the Russians with US stinger missiles and won. Now think of the similarity of the situation with Iran and China and their sunburn missiles against all these slow steel islands sitting off their coasts. Talk about history repeating. I feel so bad for the EE's unwitting sheepburger about to be served up.

reefman's picture

@Turd,> Ponder this for a

@Turd,

> Ponder this for a moment, QE∞ is announced as official Fed policy last Thursday. That day gold, the only alternative currency to steadily-debasing fiat, responds with a $38 move. Frankly, I would have expected more 

Why the long face?

August 14, Gold was $1,590

September 12, Gold was at $1,770

That's nearly a $200 move in less than a month! (Don't even get me started on the mega-bubble called Platinum!)

Gold already PRICED IN the QEternity move, starting in August. 

Gold and Silver especially need to take a rest after this huge sprint up. Both metals are seriously overbought at this point and a correction back down to something much more reasonable, like $1,620 and $31.40 is in order I think. They took off too fast, too soon, too far, and with too much exuberance. 

Like Marc Faber says, I hope the metals don't run too far, too fast or they are going to make it illegal to own gold. Same here.... let's have a 4 month consolidation, followed by a slower move up, or else let's have a week of smashes like what happened last year and get the pain over with sooner. 

I expect a rush to the SAFE HAVEN of the US Dollar and Bonds - again. The USDX is OVERSOLD imho. It is going to BOUNCE UP, and the metals are going to be pushed down.

Keep in mind this is all SHORT TERM. 

Long term, I expect silver to take out it's high some time.... but not just now. 

Swineflogger's picture

Tell me how you really feel Turd?

Swineflogger's picture

Anyone know WTF this is?

Found this in the garden.  Don't remember planting it.  Did not know whether to net it, trap it or shoot it. surprise

Dr Jerome's picture

COT Harvey is bearish and expecting a raid in silver next week

I am reading Turd's tone on the COT as bullish, in contrast to Harvey who is bearish. Is Turd just takaing the longer view. The week to come should be interesting.

Harvey Organ's comments on the COT  http://harveyorgan.blogspot.com/
 
Silver COT Report: Futures
Large Speculators
Commercial
Long
Short
Spreading
Long
Short
43,205
10,650
23,977
31,884
82,358
1,834
761
1,765
-322
2,880
Traders
80
39
42
34
40
Small Speculators
Open Interest
Total
Long
Short
127,032
Long
Short
27,966
10,047
99,066
116,985
2,705
576
5,982
3,277
5,406
non reportable positions
Positions as of:
136
104
 
Tuesday, September 18, 2012
  © SilverSeek.com  
First let us have a look at our large speculators:
 
Our large specs that have been long in silver realized that silver was about to pierce the 32.00 level and thus they added another 1834 contracts to their long side.
 
Those small specs that have been short in silver thought that silver was advancing too fast so they added another 761 contracts to their short side and these guys are not happy campers this weekend.
 
Our commercials;
 
Those commercials that are long in silver and are close to the physical scene pitched a small 322 contracts from their long side.
 
And now for our famous commercials shorts i.e. JPMorgan et al:
 

These guys reluctantly added another 2880 contracts to their already burgeoning short position.

They have decided to regroup and call for one of those weekend meetings trying to stop silver's advance.


Our small specs;

Our small specs that have been long in silver liked what they saw and they added a rather large 2705 contracts to their long side.

Our small specs that have been short in silver, added another 576 contracts to their short side and they too are not happy this weekend.


Conclusion: Only with respect to the commercials who basically decide where the price of silver will be heading, went net short another 3202 contracts and you must say that this is terribly bearish.

You can count on a gold and silver raid sometime next week.   

 
treefrog's picture

@swineflogger

looks like a horned melon seed got mixed in with one of your other seed packets.

https://www.google.com/search?q=horned+melon&hl=en&client=firefox-a&hs=z3&rls=org.mozilla:en-US:official&prmd=imvnse&tbm=isch&tbo=u&source=univ&sa=X&ei=lANeUJugFJOg8gTo14CoCg&ved=0CCYQsAQ&biw=800&bih=386

looks like yours isn't ripe yet.

Horned Melon
Cucumis metuliferus  
a.k.a. Kiwano (trademarked name by New Zealand growers), African Horned Cucumber  

horned_melon.jpg

Bright orange, ovaloid fruit to 6-9", with numerous prominent spines. Flesh is bright green, watery, and with a slight sweetness.

Turd Ferguson's picture

No, Doc

MODERATOR

I am NOT reading the CoT as bullish. By any traditional measurement, the CoT is decidedly bearish. Maybe even scary. Anyone that thinks I'm full of crap should be unloading and selling paper before the inevitable smash.

However, this time around, the CoT doesn't scare me. I know what they are up against and I know what is in store for them. So, adding shorts like they are only digs their hole deeper.

Btw, this is an interesting read: http://www.debka.com/article/22376/Washington’s-Iran-war-game-vs-real-Iranian-Israeli-war-preparations

Swineflogger's picture

@treefrog

Thank you for the edification.  Wonder how it got in my garden?

SilverWealth's picture

questions

Turd, I don't understand why these criminals care about what is posted on the COT. Since they have the power why should they care what their short position reveals?

Secondly the taxpayer is the one at risk it seems to me, never a bank like JPM. If they do get in actual trouble with their short position in Silver any historian knows they will be fully made right by the FED. So why place so much emphasis on the forensic drama of these various levels? It assumes that a fully criminal enterprise will suddenly abide by rules of the market place. Even if physical buyers call in their silver which so many believes will mark the end game, why can't they just default on payment and make random claims and excuses? All the precedents are there. John Corzine is clear precedent for grand larceny of the most obvious kind.

Nothing short of plebs marching down to JPM with pitchforks will put actual pressure on them and since they own the NYPD how would that work anyway. Silver can go to 100 and I can't see but that JPM will simply off load their liabilities onto innocent parties, control the financial media propaganda around the event and end up bearing zero responsibility in the end.

treefrog's picture

swineflogger

did you plant some other melon/cucumber or such near there?  did somebody who furnished your seeds get a wild card in the wrong envelope? 

kingboo's picture

@Swineflogger

ofcourse i know what it is!  It's a waterpinemelonapple......     jees! everybody knows that ...

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