The View From 37,000 Feet

In-plane wifi allows The Turd to end his vacation and get back to work.

Well, that was a whirlwind. It was good to get away for a few days but, sheesh, I almost feel like I have a better chance in the Comex casino than I did at the MGM Grand. If it wasn't for Sweetness being such a lousy golfer, I wouldn't have won anything over the weekend! Oh well, back to work and there's certainly no shortage of things to discuss.

I've got to start with The Pig this morning as the level of sustained BS in the markets these days is simply amazing. Back on Friday, little Ole Turd was able to predict that the POSX, rest precariously upon some critical support near 79, would soon need to be rescued via some Fed Goon-speak or negative Euro headlines. Whaddayaknow, we got both. There's a big surprise! Oh well, as you can see on this daily chart, the drama is slowly building to a climax. Look for the decisive breakdown by the end of this month and, once through 79 and 78, the next target is 73.

<Unfortunately, the airplane wifi is so slow that I'm unable to add chartsangry>

Speaking of lousy fiat, it looks like Abe is going to get his wish. The Yen is continuing its historic puke-job this morning and is now just above 108. Next support on the weekly chart doesn't look to come in until 105 or so but Abe's goal of 100 certainly looks within reach. Please don't underestimate the long-reaching geo-political effects of this.

Crude is selling off after failing three times to get through the $98 level, which we had been watching here for the past several weeks. I'm hoping to watch it fall even farther so that I can re-establish a position somewhere near $93.

And Sylvia finally broke through $1700 overnight. Once it did, it tripped some buy-stops and sprurted all the way to 1710 before pulling back and establishing 1700 as support. Let's hope it can draw clear now as a continued move higher will, undoubtedly, add some spillover strength for gold and silver.

Speaking of which, both are rallying smartly as I type on the backs of reported very strong physical demand in London today on the earlier price drops. Let's see if we can keep this up as we go trhough the day and the week. Gold needs to exceed last weeks highs of 1685 or so before it can begin a run on 1695 and then the all-important 1700-1705. Silver will see continued resistance at 32.20-32.50 and we're going to need to plow through there before we can get excited.

Finally, just a few words no last week's CoT. It was simply remarkable, not only for the size of the moves but the divergence in structure between the metals.

In gold, The Cartels covered a net short of 28,900 contracts, a truly remarkable amount. This brings their net short ratio all the way down to 2.04:1. This has likely fallen even farther in the three days since the survey as total OI contracted Wed-Fri by another 6,600 contracts and stoof Friday evening at just 424,150. This is the lowest OI number since the price lows of 12/27/12 and, before that, late August of last year. Additionally, the large specs reduced their net long by 25,000. Between the OI numbers, the CoT structure, the charts and the physical demand, there is simply very little chance that gold is going to decline much father from here.

In silver, The Civil War continues and The Monkeys on the JPM silver desk have apparently decided to adopt the ultra-successful, Bruno Iksil-model of doubling down while praying for salvation. Like Iksil, they will ultimately fail in spectacular fashion.

For the CoT week, while price was falling by over a dollar, JPM was forced to add shorts. This never happens. As you know, JPM always rigs declines on order to ring the register on the LargeSpecSheep. However last week while price was falling, the LSS were covering shorts and adding longs, to the tune of net +3,700 contracts and the other commercials added 600+, too. This forced The Forces of Darkness to create 3,483 fresh, paper shorts when the would otherwise have been able to cover, instead. In fact, Uncle Ted estimates that JPM alone added another 2,500 nakes shorts last week, bringing their total Comex short position to over 33,000 contracts. When you take out the 47,000 spread contracts, JPM is short over 33% of the entire open interest!! This is brazenly unfair and manipulative yet Thunderlips and Cueball continue to look the other way and allow this criminal concentration to continue. Simply disgusting.

On the bright side, JPM has built themselves a funeral pyre of epic proportions. It's made of kindling, fireworks, TNT, gasoline and gunpowder and it could literally explode at any moment. When it does, the spectacle will be truly breathtaking.

OK, that's all for now. This old MacBook can barely carry a charge anymore so I'd better sign off before it cuts out. Back to work with a full post and lots of pretty charts tomorrow. Have a great day!

TF

222 Comments

Be Prepared's picture

@DPH & Dr. Jerome - Hersey Chocolate Bar Analysis

My analytical brain wouldn't let me pass this up, so I decided to put DPH's post into a spreadsheet to see how the numbers really stack up.  One of the first things I did was put the price in terms of a Price per Ounce in order to ensure that we were getting a true apples to apples comparison.  The last column was the percent change from the first data point, which is 1908.  

What is interesting is that it confirms what we already know.... that the U.S. Dollar has been systematically debased approximately 95%.  Now, I could have put this analysis through a more comprehensive run through using inflation adjusted dollars, blah, blah, etc., but this is the down and dirty.

Be Prepared's picture

President skeet shooting....

Save_America1st's picture

Stephen Leeb via KingWorldNews

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/4_Gold_Flow_East_%26_Silver_Squeeze_To_Create_Surge_In_Metals.html

Leeb had this to say regarding silver: 

“Silver is a little bit different because it has suddenly dawned on a bunch of people that China is serious about photovoltaics, and they need a tremendous amount of silver.  So silver may outperform gold.

In fact, silver may very well take out its $50 high before gold takes out its $1,925 high because of the industrial and investment squeeze which is taking place in silver.  You are seeing the last period of accumulation before the price explodes.  The coming move in gold and silver will mark a major turning point in what will probably be the greatest bull market people will ever see in their lifetimes.”

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

That's a 60% increase in silver to hit 50 from right now compared to gold only increasing 15% from now to hit 1925.  That would drop the GSR from 52.7:1 down to 38:1

Wow...well, who knows when that's going to kick off, but when it does look out!  In 2011 I feel that I really screwed up and didn't trade any silver for gold when the GSR went below 40:1 and nearly hit 30:1.  when it suddenly rebounded and started shooting back up towards 50:1 again I realized I got caught with my pants down.  It would have been nice to have gotten some cheap gold for silver in the 30's to 1 ratio area so that I could have traded back some gold for silver when the GSR went back into the 50's to 1 ratios.

My guess is this next time when the ratio gets down into the 30's to 1 it will not rebound again to those higher ratios...it will keep going lower; 20's to 1 and maybe even lower than that.  But that's just my guess...and if I'm wrong and it does go back up that high then I will trade gold for silver.

My plan (and please...anyone feel free to chime in if you have a constructive opinion about this to set me straight...I don't mind at all)...but my plan since I'm basically 99% silver to gold phyzz right now, is that once we hit 40:1 I'd like to trade for an ounce or two of gold.  If we keep going down further into the 30's to 1 ratios I will trade average some more silver for a few more ounces of gold. 

Same thing if/when we hit 30:1...I'll trade for another few ounces of gold and wait to see what the GSR does from there...if it goes down further then I'll make a couple more GSR trades, and maybe the same thing if it goes back up towards the 40's to 1 areas. 

Then if for some reason gold explodes and leaves silver behind (or silver gets monkey hammered lower in price) which causes another GSR in the 50's to 1 ratios then I would trades some gold back for silver to increase my stack of phyzz ounces in silver again.

I already traded 2 ounces of gold in for silver when the GSR was around 57/58:1 a while back.  But I'd like to be able to do this more with silver for gold and maybe back again if the opportunity comes up.  That way I can increase phyzz ounces w/ using little cash so that I can concentrate cash towards other types of supplies, etc.

Any recommendations or thoughts on this plan are always welcomed!

Complete And Utter Bollocks's picture

UK legal-tender copper coins

I just thought - if I am right in my calculations regarding the post I made a page back about the value of the copper in 1p and 2p uk coins (http://www.tfmetalsreport.com/comment/267330#comment-267330) then we have perhaps a rare example of a fiat currency (only appearing in the lowest-value coins) actually being backed by something that has real value.

Well, not "backed". They are worth what they have stamped on them. Actually, more than that, it seems.

Must. Have. Got. Something. Wrong. Here.

Or have I?

I would welcome any input before I buy a smelting furnace and get to work wink.

EDIT: I've just found that post-1992 1p and 2p coins are made of STEEL with a copper plate.

Well well, that's news to me.

Makes sense though. TPTB will always make sure they have the upperhand.
Well, as long as they can.

 

Monedas's picture

Chris Hedges ?

Hedges the truth !  Also, did you see the pukey liberals in his audience .... their vacant, concerned expressions .... that's probably what Xeno and Sharkshit look like !  Old men and their dogs tend to look and walk alike .... over time !  Over time .... liberals tend to look as geeky and stupid as their ideas !  I'm gonna take my jack boot off of Katie Roses throat .... Monedas has a new toy .... Chris Hedges .... my common sense will trump his "studied stupidity" !     Monedas      1929      Comedy Jihad For The Common Man World Tour   devil

treefrog's picture

no comparison

 

 


 

 

1944: From left to right: American General Dwight D Eisenhower (1890 - 1969, later the 34th President of the United States), British Prime Minister Winston Churchill (1874 - 1965) and Lt-Gen Omar Bradley (1893-1981), shooting with the American Army's new carbine at an American armoured troops camp in England. The Allied war chiefs are escorting the British prime minister on a tour of inspection. (Photo by Keystone/Getty Images)

this one won't cut and paste

http://www.theblaze.com/wp-content/uploads/2012/05...

TheYeomanFarmer's picture

Sylvia

Jack - "Sylvia" is Turd's term for Platinum. Ties back to "Sylvia Plath." He's given a longer explanation in another post.

The "Turdisms" page does need to be updated with some of these new terms.

Urban Roman's picture

Sylvia

It's the hourly platinum chart. Abbreviated PLAT-H ... Turd has adopted the name of the suicidal poet for it. 

¤'s picture

Inflation 1899

28610v.jpg

Title: Deserting the old idol

  • Creator(s): , Louis, 1866-1905, artist
  • Date Created/Published: N.Y. : Published by Keppler & Schwarzmann, 1899 July 5.
  •  
  • Summary: Print shows William Jennings Bryan kneeling on steps labeled "Socialism, Inflation, [and] Paternalism" with his back to a statue of an old man labeled "Populism" sitting in a chair labeled "Free Silver" that is covered with cobwebs; he is appealing to a crowd of men, some of whom are labeled "Voter", and a female figure labeled "Prosperity" skipping or running along a road that leads to a building labeled "Regular Party Politics".

http://www.loc.gov/pictures/item/2012647438/

¤'s picture

Inflation Concerns: The 'Modern' Horn Of Plenty 1907

26144v.jpg

Title: The modern horn of plenty

  • Creator(s): , J. S. (John S.), 1870-1909, artist
  • Date Created/Published: N.Y. : J. Ottmann Lith. Co., Puck Bldg., 1907 February 27.
  •  
  • Summary: Illustration shows a large cornucopia labeled "Cold Storage Warehouse" where farm produce is being stored, creating an artificial shortage, in an effort to drive up the price of food in the marketplace. A group of people are standing outside the locked door labeled "Closed for Higher Prices", while in the background farm produce is being delivered from both sides for cold storage.
Gent's picture

@Bollocks

I'm not going to list any specifics or even point to a link that shows actuals but ...

Here in the US, both pennies and nickels cost more to make than face value. The gov't is throwing money away by still producing them

There's been talk about just changes the metals that are used or, like Canada, discontinuing the penny .. maybe the nickel .. which would be prudent

As you've surmised, at current prices and, expect higher, the metal content IS more valuable than the coin itself

Admiral Ag Bar's picture

Save America 1st - GSR swap

Good plan.  I didn't know enough back in 2011 to make the swap.  I am ready this time!

I am scaling in at:

40 to 1

37.5 to 1

35 to 1

32.5 to 1

etc...

Making bigger and bigger swaps as the GSR becomes more favorable.  You might want to consider writing down your goals (how many ounces at what ratio) to keep you focused when the time comes.

Keep in mind... you always want to have some dry powder available (be it silver, gold, cash, guns, ammo, etc) to take advantage of good swapping opportunities when the present themselves.

I wrote out a few different scenarios to see how many ounces of silver I would have if the ratio got to a certain low point.  I don't ever want to not have a solid stake in either position.  After trial and error, I found one that works for me.

ag1969's picture

Gent

Isn't it funny that the only time the U.S. Government will do anything about throwing the peoples money away is when it is debasing the people's money itself.  Sure is interesting to watch the government of, by, and for the people in action.  It is precisely because of the government that they can't make a nickel for a nickel.  As a matter of fact, they are so criminal, that they can't even make a zinc penny for less than a penny, never mind a copper one.

Relax everyone, the government has it all under control.  They will fix the coinage issue by making it even shittier.

Sad-descent's picture

@DPH

I hat tipped you, but wanted to also tell you I love seeing these old political cartoons.

Thanks!

Cobalt Silver's picture

Sweetness

I think Turd referred to the drummer on this Billy Joel vid as Sweetness last summer.

Enjoy a young Ms. Brinkley.

¤'s picture

Stabbing Westward

@Sad-descent...you're welcome :-)

Stagecoach-Western.jpg

SteveW's picture

@Byzantium: UK currency

I remember my father showing me a note, similar to below but 1 GBP, during the late 40's. I also remember asking what the promise to pay meant but he said you could just change it for another note. I don't know if he ever knew the original promise was to pay a pound weight of sterling silver. You could still find silver crowns in circulation many from the Victorian era.

Also I recall being able to buy a freshly baked loaf of bread (probably 16 oz) for one penny and one farthing!

111006591542_1_0_1.jpg

Now when I first started drinking ale you could get 12 pints for 1 pound. Visiting more recently and paying 3 pounds for 1 pint I recall talking to an old timer who said it was 80 pints for 1 pound in his day. Thruppence a pint!

So the bottom line is to keep stacking the silver that retains its purchasing power. BTW do people still refer to those cupro-nickel monstrosities as silver?

¤'s picture

Found this kind of interesting...

The government has declared it can lock anyone up forever or kill them without any proof or due process. DHS has placed an order for 450 million rounds of Hollow Point ammo. Obama can now declare martial law during peace time. I think that just about says it all.

"We are Preparing for Massive Civil War," Says DHS Informant
http://current.com/community/93765251_we-are-preparing-for-massive-civil-war-...

"If you don't fight for your rights, they don't exist. Our constitution doesn't mean a damn thing if we the people don't stand up for it." Or just go back to sleep. Maybe we'll get adjoining cells one day if we're still alive anyway.

Save_America1st's picture

Thanks Admiral

Now that we're mentally prepared for it this time I just hope the opportunity presents itself to take advantage of.  I'll be waiting!cool

Gent's picture

@ag1969

Talk about shitty coinage ...

They/gov't want to put out a $1 coin .. Susan Anthony then Sacagawea

The make both too close to the size of a quarter and no one/few want them

As I understand it, there are billions .. yes billions .. of Presidential Dollars .. again .. about the size of a quarter .. just sitting in the vaults cause they can't sell them and are too dumb to force them on the people .. by, maybe, discontinuing folding dollars

It might be more worth it to melt down the existing dollar coins and design a new one .. bigger than the quarter but smaller than the half .. Too sensible??

¤'s picture

And then there's N. Korea...

North Korea 'preparing for two nuclear tests'

North Korea is preparing to carry out two nuclear tests, either simultaneously or in rapid succession, to demonstrate to the world the advances it has made in its weapons programme, according to intelligence reports.

The Punggye-ri nuclear test facility in North Korea
The Punggye-ri nuclear test facility in North Korea Photo: AFP
 

Analysis of recent satellite images has shown new activity on the southern edge of the Punggye-ri nuclear test site, while preparations at a second tunnel to the west were apparently completed earlier, a South Korean government source told the Chosun Ilbo newspaper.

The paper quoted a military official as saying, "There is a chance that the southern tunnel is a decoy, but we are not ruling out that the regime will conduct nuclear tests simultaneously at both tunnels."

There is a widespread belief that North Korea will go ahead with what would be its third nuclear test in the near future, with the regime still angrily denouncing criticism by the United Nations Security Council for the launch in December of what Pyongyang claims was a rocket to put a satellite into orbit.

That protestation has been undermined by North Korea putting on display in Pyongyang a section of fuselage from an identical vehicle and labelling it as a ballistic missile.

The South Korean military and international intelligence agencies have prepared for the North's anticipated nuclear test and hope that data they can retrieve will provide new pointers on just how far Pyongyang has advanced in its efforts to develop a nuclear warhead that is small enough to be attached to a ballistic missile.

http://www.telegraph.co.uk/news/worldnews/asia/northkorea/9846447/North-Korea-preparing-for-two-nuclear-tests.html

Quisp's picture

@SaveAmerica, and Admiral

How exactly, do you swap silver for gold, and then back again as it swings the other way?   Do you walk into your LCS and swap phyz? Or do you place a buy from Provident; sell to Provident, at the same time? Just curious. Thanks.

Puck T. Smith's picture

@ClinkinKY: Fake ASEs

Thanks for posting that.  When I read the whole article I was surprised that such obvious fakes would have passed so easily.

For those who didn't read it, here are the points of difference.

Among the general differences, the weight of the counterfeit is 32.608 grams compared with the statutory weight of 31.101 grams for a genuine American Eagle silver bullion coin. The fake is thicker than the genuine coin, by as much as 20 to 25 percent, but the diameter of the fake is slightly smaller than the standard 40.6 millimeters.
 
The die orientation of obverse to reverse on the counterfeit is medal turn, not coin turn. For a U.S. coin, when its obverse is right side up, turning the coin on its vertical axis will reveal an upside-down view of the reverse.
 
In medal turn, which is what appears on the fake silver American Eagle, the obverse and reverse both face right side up at the same time.
 
Some differences noted on the obverse of the counterfeit, compared against the genuine coin’s obverse, are these:
 
➤ Liberty’s jawline on the counterfeit American Eagle silver bullion coin is more masculine, almost appearing bearded.
➤ On the counterfeit American Eagle, the lettering is thinner and not as defined as on a genuine example.
➤ The date digits are larger on the fake American Eagle and spaced farther apart.
➤ The length of the first ray to the left of the sun is shorter on the fake silver American Eagle coin.
➤ The top of the L in LIBERTY on the fake extends farther left of the third ray.
➤ The E in LIBERTY on the counterfeit version is almost completely exposed, while on a genuine American Eagle silver bullion coin the bottom bar of the E is almost completely covered.
When comparing the reverse of the counterfeit 2011 American Eagle silver bullion coin to a genuine example, note among the differences:
➤ The lettering is thinner on the counterfeit; the tail of the U in UNITED is also longer. The tail was added to the genuine American Eagle design in 2008.
➤ The stars above the eagle’s head are slighter smaller and not as sharp in detail on the fake as on the genuine American Eagle silver bullion coin.
➤ The eagle’s beak on the fake American Eagle is larger than on the genuine coin, almost parrotlike in shape.
➤ The feathers on the eagle’s head and neck on the counterfeit coin are not clearly defined as they can be found on the genuine silver American Eagle.
 
 
DayStar's picture

Harvey's Up!

Gold is 33% below the 1980 high in the yen, but it is higher today in yen than it has been in 33 years.  The Swiss may be moving clients to allocated gold accounts, because of the Draconian US FATCA financial regulations.  The US can seize foreign gold without the Swiss banks being in the way.  Alasdair Macleod:  The next one-off shift of capital will be away from fiat.  John Embry:  The failure of the big commercial shorts to pound down the open interest in the silver futures market and scare off buyers leads John Embry to suspect that the collapse of silver futures market rigging may be near.  All this and more on...

The Harvey Report!

http://www.tfmetalsreport.com/comment/267366#comment-267366

DayStar

Bobbejaan's picture

A minor flaw in your cunning plan [wink]

Quote:
Bollocks said :-

I just did some weighing and some quick calculations.
a 1p coin weighs 3.5g
a 2p coin weighs 7.15g

Each are 75% copper, so
a 1p coin contains 2.6g copper
a 2p coin contains 5.3g copper

Copper is currently around £5 per kilo. which is 0.5p per gram.

So a 1p coin contains 0.5 x 2.6 = 1.3 p's worth of copper.
A 2p coin contains 2.6 p's worth of copper.
.

Hmmm, am I onto something?

Unfortunately NOT! ... The minor flaw in your Baldrickly-Cunning plan is that both coins are BRONZE from 1971-1991 ..and.. Copper-Plated-Steel from 1992 onwards :-

http://en.wikipedia.org/wiki/1p_coin

&

http://en.wikipedia.org/wiki/Two_pence_(British_decimal_coin)

Save_America1st's picture

@Quisp

I have two places near me here in Tampa, FL that I buy from.  A small LCS owned and run by one guy who after the last year and a half or so I've bought a good amount of silver from and gotten to know pretty well.  I swapped a 1 oz gold kangaroo with him straight up for silver buffalo rounds.  He doesn't bother with paperwork or sales tax or any of that, so it's cool.  I just traded with him and that was that.

I also happen to live very close to the Gainesville Coins showroom where the website is based out of.  I go in there a lot and even though I have a good rapport with them as kind of a "regular", they have to play things exactly by the book.

When I went in to trade a gold Mexican 50 peso they had to document everything in their computer.  They physically cut me a check right there for the value of the gold coin.  I then had to endorse the check back to them to buy as many silver buffalos with it as the check was good for.  I think that got me 66 rounds and then I added cash at that time to get 34 more for an even 100 rounds which lowered the premium to like .79 cents per round or something like that.

They also photo copy your drivers license for every transaction.  So going through them is more strict by far compared to my smaller LCS guy but still fairly easy to do. 

Quisp's picture

@SaveAmerica

Thanks. That's the answer I expected. Unfortunately, I don't have a LCS within a reasonable distance. 

ag1969's picture

JPM's "Secret Money Room"

Jamie Dimon: We Have A Secret Money Room Somewhere In Florida That Moves $2-$5 Trillion Every Day

Jamie Dimon is speaking at the South Florida Economic Summit right now and Bloomberg TV is airing his talk.

The JP Morgan CEO hasn't said anything super surprising —he got to the "widest, deepest, most liquid capital markets" quote and also reiterated his bank's commitment to Europe — but he did say something in passing that piqued Business Insider's interest.

It was about a "secret money room" JP Morgan. Here's what he said:

"We have a great room, I forget the name of it, it's a money room, at an undisclosed location. It's in Florida, but it moves, every day, $2-5 trillion around the world. JP Morgan moves a lot of money for corporations and individuals and that room which I took my Board of Directors to, is just very impressive."

Read more: http://www.businessinsider.com/jp-morgan-has-a-secret-money-room-2013-2#ixzz2Jzj1jFDT

Puck T. Smith's picture

@Be Prepared: Chocolate Inflation

If you presented your table to most people the response would be that Hersheys is an evil corporation and that they have shamelessly be raising their prices all these years because they are greedy capitalists.

treefrog's picture

q/a

question:

    how many liberals does it take to change a light bulb?

answer:

    that's racist!

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