Saturday Stuff

Sat, Jun 25, 2011 - 10:51am

Hello there. Sorry I was AWOL yesterday. I had lots and lots to do plus I needed a break. I didn't open my Lind-Waldock account all day. Also, I wanted to leave the last post from Thursday up all day so that as many as possible would read it. I guess it worked as the total is now approaching 10,000.

First of all, before we consider the events of this week, please go back and read this:

Of course, dumdumTurd didn't heed his own advice and instead bought some August 1550 gold calls on Tuesday. Turd dumdum gets no gumgum after getting squished like grape.

So, where do we stand now. Without question, we are now into the summer doldrums...a 6-8 week period of downward consolidation. Please don't despair. As predictable as the comings of the doldrums are, so, too, are the endings of the doldrums. As we go through the summer, the assertiveness of the top-callers and the shrillness of the trolls will only increase. Please ignore them. Their only goal is to get you to sell your insurance and protection at the time when you need it most. By mid to late August, the precious metals will be ready to resume their UPtrends, right on schedule. Please be ready. Do not waste your time, energy and money trying to call bottoms before then.

First up, here's an updated CRB. In the note from last weekend, we discussed how perilous the chart looked here and how it needed to rally. It didn't. The index now looks certain to test the 590 area, if not the 560 area, over the next few weeks.

Here is your weekly gold chart. Take note of two very important items.

1) The trendline from the beginning of QE in March 2009 is all the way down near 1400-1450, depending upon how accurately you draw it.

2) As discussed ad nauseam, gold reverts back to the trendline once every six months or so. Again, the pattern is clear: Four months of rally, two months of consolidation. Four months of rally, two months of consolidation. If you believe as I do that QE can't and won't ever end, then why would you expect this pattern to change?

And here is silver. It's catching a bid near the trendline from the August breakout but I don't think it will last. As described in the previous post, I expect silver to be rangebound, too, all summer long in an area bounded by 31.50 on the downside and 39.50 on the upside. Actually, it will spend far more time closer to the downside than the upside. That said, once the rally re-commences in the fall, I still expect silver to rebound to near $50 before the next consolidation phase begins in January 2012.

OK, onto a couple of housekeeping items. We are keeping a list of all the best ideas for site improvements. So far, we like the idea of private messaging and specific user searches the best. As we approach our one month anniversary next month, the plan is to submit the changes to a vote. We'll offer you 3-5 of the best "enhancements" and we'll implement the top vote-getter. Depending upon the cost, we may have to have a "fund drive" to pull it off but the goal is to make this site as user-friendly as possible.

Please allow me to respond to a couple of "troll-like" complaints:

1) The site has too many ads. Really? Really? The are three. That's it. Gimme a break. Have you ever run a website before? Do you know how much it costs every month for servers that don't crash? Do you think the "technical support and management" is free? Gotta make some revenue somewhere to cover these costs and the ads are how we do it.

2) Turd was too cheap to allow for "threaded" comments. Yes, I am cheap but that's not the reason. There are no threaded comments because I wanted to make it as hard as possible for two squabbling Turdites to hijack a thread with their arguments. Simple as that.

3) Turd's only been right once or twice so I'm outta here. Good, don't let the door hit you on the backside as you leave. I never promised anyone 100% accuracy and, if that's what you're here for, I don't want you here anyway. I try to provide my "guidance" on future price but this site is now about the collective knowledge and wisdom of the entire community. Sure, read my stuff but you must also sift through the forums from time to time. If you're not doing that, you're cheating yourself out of a lot of good info and fun.

Here is some light reading for your weekend. Don't worry, there won't be a test on Monday.

First, if you missed the latest from Mike Kreiger, here's a link. Pay particular attention to the quote from Larry Lindsey at the top. Sounds just like The Turd, doesn't it? (No, The Turd is not Larry Lindsey.)

Next, this writer does a pretty nice job of summing up why we are all preparing for "the end of the great keynesian experiment":

I do not agree with all that is stated in this next piece but that doesn't mean it's not worth reading:

I do, however, agree with most of what Mark Steyn writes:

Lastly, I received this email earlier this week. The author asked that I share it with you. I am really excited for him and his project looks really cool. Check it out!

Hey Turd,

I'm a computer games designer from Scotland, living in Hamburg Germany. I've been following your posts religiously since you used to be a frequent commenter at zerohedge. Thanks to you and others like you, I'm in Physical silver and gold (very easy to do here in Germany).

Since learning about the likely outcome of the Great Keynesian experiment, I left my job to start my own games studio (I made a really terrible wage-slave and was bored of making inane content), with the goal of making a highly accessible browser game that would help awaken people about where we are headed. Games are amazing at doing this, as instead of being told about 'it', you are actually doing and experiencing 'it' for yourself.

The teaser web page is here: it's a free-to-play game.

I hope that the game makes the people that play it a bit more open to hearing something other than the MSM crap. The game will have a forum and will link to tfmetalsreport and zerohedge. I am not sending you this message to try and get you to do the same, since your audience is already wide awake and likely not interested in playing games.

I just want to let you know what I'm doing, since you, Tyler and Alex Jones (he's a bit crazy, but his heart is in the right place) helped me to understand what is going on in the world and how best to prepare for when the SHTF.

Keep doing what you're doing. All the best,


I hope that everyone has a fun and restful weekend. See you on Monday! TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Jun 25, 2011 - 2:03pm

From Lisbon, with love,

I've been following Turd's insights for a while now, drinking from his knowledge and learning

every day with what he writes, the links and the discussions posted by everyone.

I'm from Portugal and i am a little bit scared because i was blind and now i can perfectly see

what is coming, the dreams of future that i had for my children have been shattered ,perhaps

someday the rulers of my country pay for their lies and their crimes , but that's not important

right now. What IS important is the amount of work and relevant information that Turd shares

with us all, giving us the chance to be prepared for what is coming, and this, to me, it is priceless.

Thank you very much, Turd ( please, keep up the excelent work and don't ever give up ).

P.S: I've made some Euros and there's a little "bonus" for you, brother. Peace

Jun 25, 2011 - 2:16pm

Wrong hyperlink

Hey Turd,

The hyperlink towards the end of your story,

Just links back to your story again.

Jun 25, 2011 - 2:22pm

Link fixed

Thanks for the catch on the greedion link - it's fixed now!

Jun 25, 2011 - 2:31pm

This market is difficult to

This market is difficult to predict.

Jun 25, 2011 - 2:45pm

@ GREEDION creator

just wanted to give a *shout out* and let you know I've bookmarked your site - I think it's a great idea to incorporate relevant "truths" into a gaming format, that's what the corporate game creators do, eh?

plenty of information gets funneled into the many games available, it's always good to steer players towards awareness of multi-layered realities, subverting the dominant narrative & all !!

Jun 25, 2011 - 2:45pm


I posted this on the corn thread, but I think the points are relevant to this discussion as well:

Ever notice that the future price of Corn follows the price Oil and does not necessarily trade on its own Supply and Demand merits? That said, Corn could be weak for awhile as US election cycles are 1.25 year away. Obama has already started releasing Oil from the US Strategic Oil Reserve in hopes of suppressing Oil prices. Such releases could go on for a long time under the guise that we need to make up for lost Lybian Oil.

Interesting to watch virtually all the commodity prices go down last week whether it be Gold, Silver, Oil or Corn. The FED announced that QE2 will be winding down with the exception of maturing bonds which will be "reinvested" in new debt issues. I was watching interest rates closely this past week because the added Demand from FED purchases of US bonds thru QE1 and QE2 has no doubt left interest rates artificially lower than they should be, especially on the long end the yield curve which have been especially targeted to keep housing mortgage rates lows. I thought that perhaps it was finally time short US Treasuries with the announced end of QE2. Well, interest rates barely moved at all over the past couple of days. On Thursday rates in fact went down quite a bit and went marginally back up on Friday.

All these matters are related to one another.

Traders are unwilling to short Treasuries because they know the markets are artificial. Even though the FED announced the end of QE2, they equally know that there are a few weeks of QE2 purchases left which represents more massive amounts of artificial demand for Treasuries until QE2 is completely over. And, even when QE2 is completely over, do you want to be the trader who shorted Treasuries only to find out that the FED or other CB's are working together to continue to suppress interest rates in some other manner or directly by stealth? I believe that is what Mr. Market is saying. These are not true markets and may not be for the foreseeable future.

Likewise, just by chance, when the end of QE2 is announced, there is another announcement that the Strategic Oil Reserve is be opened up to suppress Oil prices. Go figure. We know that Oil is followed by many commodities, including our beloved Corn and Silver. It is the grease of the economy. Smart move by the EE.

Trader Dan wrote this blog message about deflation:

I think I see what Turd is talking about when he refers to the Summer doldrums in PM's. Except they are not the typical Summer doldrums created by a lack of Demand. There very well may be a period of lower commodity prices for awhile. The CB's of the world need cover to do further QE's to support uncontrollable spending and budgets that desperately need to be parred back, but the politicians lack the intestinal fortitude to do so for the sake of election cycles. So, the powers that be will undoubted use whatever tools are at their disposal to continue to suppress commodity prices as they know QE3 is in fact inevitable and need cover to do so. This includes releases from the Strategic Oil Reserve and using their seemingly unlimited amount of fiat money to upset the normal supply and demand cycles of commodities. I am liberally including fiat money as a commodity in this sense as the price of money - interest - will continue to be suppressed as well.

The US is broke. No doubt about it. In that sense there should be deflation in terms of US assets due to a lack of Demand. One would expect that that value of housing and the US stock market will ebb lower as people lack the money to purchase these domestic items. However, commodities are a different asset class. They have a world-wide market, not subject to just broke US citizens for demand. As the population of the world continues to increase and developing countries such as Brazil, China and India continue to use greater amounts of these resources, the prices of commodities have to go higher in the long run no matter what tools the EE has its disposal. One only has to look at the long-term trend line of virtually every commodity to understand that the power of EE is temporal against the greater global laws of Supply and Demand.


Jun 25, 2011 - 2:47pm

Reality Check

Correct me if I'm wrong, but the whole premise to this website has been, "The end of the Keynesian experiment...." and to that end Turd has succeeded in warning everyone, "Wake up! Wake up! This isn't just another recession we will get out of intact - so prepare yourself."

So, like Paul Revere of yore, you've done an enormous service to us all. You've not only sent out the warning, you've provided a home base for us.

What you've done is beyond impressive and something we should all be thankful for. So THANK YOU!

As for all you whiners out there, grow up.

Jun 25, 2011 - 3:01pm

Need a Summer Doldrums

Need a Summer Doldrums Diversion?? .....I love puzzles and this site offers them for sale.. BUT.. there is a FREE puzzle-of-the-day posted on the home page that is driving me nuts. ....It is a ONE WORD (ubiquitous) word search puzzle. The puzzle is enormous and you have to find that one little word. I have spent too much time today trying to find it. I officially give up. ..........I think there should be a yellow hat for the first Turdite that can find the word and post here where you found it. ..But ..alas.. I am not the giver of yellow hats so I can only offer instead my amazement at your stunning powers of focus, insight, and diligence. I am not going back there. I need to be working today. LOL.

After this..... back to your regularly scheduled summer doldrums funk.

Jun 25, 2011 - 3:07pm

Turd, thanks for posting the

Turd, thanks for posting the greedion link, really appreciate the support. Currently enjoying a Balvenie with some whisky loving germans, everyone have a great weekend!

Apostle of the End Times
Jun 25, 2011 - 3:24pm

How to profit in the end times

If GLD and SLV are complete frauds and are going to zero at some point there is an interesting opportunity that exists to potentially profit and protect wealth. There exist funds that have actual audited and allocated physical silver and gold on hand. These are PHYS and CEF among others. The opportunity is this. Short 100k of SLV and use the proceeds to go long 100k of PHYS. If silver spot goes up or down, you are market neutral so that really can not hurt you. If SLV actually does blow up, PHYS in the words of our dear leader will "necessarily skyrocket" and SLV will approach zero. At that point you cover SLV and own the PHYS free and clear.

So what can go wrong?

SLV may never blow up

PHYS is a fraud and it blows up instead

Physical funds are forced to delist because the feds outlaw private ownership, so PHYS goes away and SLV is the only game left in town

It is a spread trade worth looking at if you believe the end times for SLV are approaching.

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