Random Musings (updated)

260
Mon, Jul 18, 2011 - 6:01pm

As we wrap a fun, fun day, just a couple of random items.

1) It appears that the latest winner of a "Turd Hat" is "dani" from the old site. "dani", if you're out there, please send me an email with your mailing address and I'll put it in the mail.

2) Silver just looks fantastic and there's still plenty of room to run. When silver was peaking in late April, the total open interest on the Comex was around 145,000 contracts. As of Friday, total open interest was only 115,000. That alone should leave you with the impression that silver is going to back to $48-50. Take a look at the chart below and your confidence will only increase.

3) The "debt ceiling talks" are an absolute joke. The House schedules a charade vote simply to get themselves "on the record" as trying to restrain spending. Of course, it would never, ever get past the Senate and/or the Regime. But that doesn't matter. What does matter is giving "political cover" to the worthless, first-term republocrats who rode into office last year on a Tea Party wave. In the end, President O'bottom will raise the debt ceiling by Executive Order. What? You don't think he can do that? Hmmm...Google "War Powers Act" and get back to me. The Regime doesn't care about the Rule of Law or The Constitution. Never forget that, with socialists, the ends always justify the means. The real question you need to answer is: "When the debt ceiling is raised by $2T or so, from where will the federal government get their $2T"? Answer that and you'll have your answer as to why the precious metals are soaring to new highs.

4) Do you remember this post from three weeks ago? https://www.tfmetalsreport.com/blog/1395/paging-dr-c If you missed it at the time, I highly suggest you take time to read it now. The copper chart below looks great and appears to be headed higher again very soon. This would have significant implications on future PM price. Watch ole Dr C very closely this week.

5) I love the PMs right now but I really wish I had some corn on. The chart is compelling and soon the USDA will certainly "revise" their BS acreage numbers from last month. Oh, and did I mention it's hot as hell with no end in sight throughout the Corn Belt?

6) Again, please refrain from "self hat-tipping". The hat tip is our only measure of poster competence and self-congratulation ruins its validity. Thanks for your help with this.

7) Also, please be careful about copy-and-pasting full text from other sites. Links are great and A-OK. Full text runs into copyright restrictions and causes other sites to get all bent out of shape. Again, thanks with this.

8) Later this week we'll be posting a survey of possible site improvements. It will offer you a choice of several, reader-suggested improvements we could make. I will then need to run a "pledge drive" thru the donate button to help defray the cost. In the meantime, please always remember to fully consider our "sponsors".

OK, that's all for now. Here are some very tasty charts for your enjoyment. See you tomorrow! TF

10:30 am EDT Tuesday UPDATE:

The Evil Empire is trying their hardest to raid today but with copper, crude, stocks and grains all up, they're just not having any success at all. IF everything else can hold onto their gains for another hour or so, the EE will be forced to retreat to another day and the PMS will roll back up toward their overnight highs. Don't get ahead of yourself, however. The Forces of Darkness have accidentally "tipped their hand" this morning with the ineffective raids. This only means they are certain to try again as soon when conditions seem more favorable on their end.

Just a word about copper. If you go up and zoom in on the chart above, you can clearly see that today's action is a breakout of the last 10 days of action. This is a very positive development for the future price of the PMs. Copper now looks to be headed next to the area around 456. You might give it a week or so but this should invariably confirm that gold is indeed headed to 1650 and silver to 42.50.

More after the close. TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  260 Comments

stoneeh
Jul 19, 2011 - 1:21am

"I wonder if he has ever

"I wonder if he has ever figured the price of gold with all of the country's unfunded liabilities factored in?"

I think we'd be much closer to Adrian Douglas' 56000$ number. Which he gets from a) M3 divided by the (supposed) 8000 tonnes in the US b) paper claims of gold sold via actual physical gold available to satisfy these claims, commonly estimated at 45:1, so 45x the gold price was 53000$ at that point (now of course higher, 72000$).

I can remember when Adrian was interviewed by Peter Schiff on the Peter Schiff Radio. He was ridiculed by Peter Schiff for his predictions. Peter laughed and said he would sell gold long before it reached that price. Well, I like Peter, and he was actually probably the one who got me into the whole PM vs debt/fiat money thing, but that just showed the difference between smart guys and geniuses. Peter just couldn't follow Adrian's logic, which is actually sound.

- Markus

I Am The Unknown Comic
Jul 19, 2011 - 1:31am

Reply to Tesla

@Tesla. Thank you for the compliment. You are actually one of my favourties. Hey, did you see my avatar (The Cat In The Tinfoil Hat)?

Please keep up the good deeds you are doing here. Cheers.

SilverSerf
Jul 19, 2011 - 1:40am

Stoneeh...

Yea, Peter Schift was the one who got me involved with all this too. I started buying gold and silver back in 07 because of a lot of the things he was saying. Glad I did, still long from then. It gold was trading over 50K I would hate to see what this country or economy looked like, I'd say it would be grim.

Irene
Jul 19, 2011 - 2:09am

Sinclair's Mathematics of Gold

Jim Sinclair posted how he arrived at his $900 gold figure back in '74.

https://www.jsmineset.com/2011/05/26/the-mathematics-of-gold/

Using Sinclair's formula a reader then calculated that gold should be at $12,455 per ounce today based on balancing the US balance sheet per Sinclair's formula.

https://www.jsmineset.com/2011/06/07/jims-mailbox-714/

It's a quick read, very straight forward.

Tesla
Jul 19, 2011 - 3:12am

@UnKnow

Yeah I did notice! It's got little Gurney bubbles for the ears Ahaha! - Cool! I didn't know they could read THEIR minds TOO...That...Means I'm gonna have to make DOZENS of those things. Damn!

Thanks for kind word / compliment. I'm no saint trust me, but I do have a soft spot for animals and abandoned/lost pets especially. I'm gonna effort to keep more on topic & listen more - speak less. Guys like you really do make more valuable contributions than my silly photos and occasional half educated guesses. The more valuable stuff speaks to the purpose of what this place is all about. Pretty much the info you were just posting there. Thanks for making me smarter!

Eric Original
Jul 19, 2011 - 3:40am

Wake up youse guys

1610 just minutes ago.

gold bug-ger since 2001
Jul 19, 2011 - 4:10am

smackdown coming ?

Personally I am very happy with the profits of the last 2 weeks and have reduced my investments by 25%. Comex options expiry date is July 26th and we usually get hit going into it. Also, we have had 10 up days in a row. Nothing goes straight up. My contrarian indicator, "the Turd" is when Turd readers get too bullish, I lighten up. When you are crying in your beer, I load up.

matthenue
Jul 19, 2011 - 4:20am
matthenue
Jul 19, 2011 - 5:21am

Remove self tipping 2

I said before but it would be a really simple fix to get rid of it.

just check the name of the tipper and tippee and make sure they are not the same.

bobby
Jul 19, 2011 - 5:30am

let the raid begin

WHEEEEEEE!!!!!

how far down will she drive it? how far back will it go?

stoneeh
Jul 19, 2011 - 5:53am

SilverSerf, that is what gold

SilverSerf,

that is what gold should be valued at TODAY, with current demand and supply. It's just that so many more paper claims on gold have been sold than the actual stuff, so supply is still quite ample (although every ounce of physical will be bought up, by China if not by someone else, you can be sure of that) and people don't have to compete for physical yet and bid prices up in the process. If no paper substitutes had been sold over the years and it was a 100% physical market, then we would have already seen these 5 figure numbers.

- Markus

bobby
Jul 19, 2011 - 6:22am

RE: why 1764 gold

we needn't wonder why, rest assured in the knowledge whish senses this to be sure and enjoy the ride

Tom L
Jul 19, 2011 - 7:43am

1601.00

This is looking like the level where the longs are making their stand today. This seems to be the level that has to hold for prices to move higher during the COMEX session.

I count no less than 7 attempts to push the price below 1601 on the 10 minute chart (https://www.forexpros.com/commodities/gold-advanced-chart) since yesterday. Another one just happened and the price rebounded back up to 1603, but the bounces are getting smaller....

Fasten your seatbelts, it's going to be a bumpy ride.

Ta,

snoochieboochies
Jul 19, 2011 - 7:51am

Looks like a raid is

Looks like a raid is underway, silver's just been pushed under $40.

Bay
Jul 19, 2011 - 8:13am

Decline In US Real Rates To Send Gold Past $1800

Very good informative read .... here's a snippet ....

One of main determinants of gold prices in the medium to long term is US real interest rates. US real rates are the rate of interest that can be earned on US Government bonds, minus the expected rate of inflation. One can monitor US real rates by watching the yields on Treasury Inflation Protected Securities (TIPS) and we watch them closely since they exhibit a negative relationship with gold. Currently when we analyse where US real rates are in relation to gold prices, we come to the conclusion that gold prices are low in relation to US real rates. However most importantly we think US real rates will likely head significantly lower, sending gold to $1800+ within a matter of months.

the rest of the article can be found here ....

https://www.skoptionstrading.com/updates/2011/7/18/decline-in-us-real-rates-to-send-gold-past-1800.html

Vypuero
Jul 19, 2011 - 8:22am

seems to be holding AGAIN

raid failed - silver bouncing back with a vengeance and gold is also staying over $1600

Bay
Jul 19, 2011 - 8:33am
33 and a turd
Jul 19, 2011 - 8:33am

gold volume

looking at the volume on netdania and there were 110K gold contracts yesterday. 424K so far today..

boil_in_the_bag_rice Vypuero
Jul 19, 2011 - 8:34am

Bouncebackability

Indeed, a very tidy bounce off $40 there. A little like a 1980s space hopper!


matthenue
Jul 19, 2011 - 8:39am

The New Pan Asian Gold Exchange

The New Pan Asian Gold Exchange : A GAME CHANGER?

was listening to this radio interview and wondered how you reckon the pan asian gold exchange is going to affect the comex?

looks like it's something we should keep an eye on.

brad_pitts_betterlooking_brother
Jul 19, 2011 - 9:05am

"What does matter is giving

"What does matter is giving "political cover" to the worthless, first-term republocrats who rode into office last year on a Tea Party wave. In the end, President O'bottom will raise the debt ceiling by Executive Order."

I am kind of surprised at that corrollary, TF. You're more astute than that, no?

What more can the people elected to office vowing to fight against that do but vote against it? Calling them "worthless" and claiming it's all just for "political cover?" What's that about? Obama might have the means to get the hike passed through by hook or by crook, but its just simpleton logic to then blame those who are standing against this exact thing of worthlessness and such.

Far too many people out there now who's first response is to blame everyone in both parties and say that "they're all crooks" in every instance. Yes - a lot of them are. But you just had a group elected that is trying to actually do what they were elected to do. Maybe its still too early - they don't have enough support yet - and they will fail in stopping it. But they are trying, no? Why start casting blame and dispersions on them already? If you don't feel anyone that's elected and stands up for the principles they were elected on are anything but worthless, that's what is even sadder. If in your closed mindset they are guilty of everyone else's past wrongdoings by the mere fact that they won an election - well then i guess there really is no hope.

There is a difference between the two parties. Yes, a few too many libs in the Repub branch at the moment, but don't throw the baby out with the bathwater.

Shill
Jul 19, 2011 - 9:24am

If Gold Closes Up Today...

If Gold Closes Up Today...

It will be the 12th consecutive up day for gold and the longest winning streak in at least nine decades.

A 12th day of gains would be the longest streak since at least 1920, according to Bloomberg. Gold rose this morning to $1,602 an ounce in the morning “fixing” in London.

HT: EPJ

ZZL Shill
Jul 19, 2011 - 9:34am

Hm, not too sure about

Hm, not too sure about 'consecutive'. Did gold not close down on the 14th July?

ZZL Shill
Jul 19, 2011 - 9:35am

Hm, not too sure about

Hm, not too sure about 'consecutive'. Did gold not close down on the 14th July?

Shill
Jul 19, 2011 - 9:36am
¤
Jul 19, 2011 - 9:38am

Chinese PM Market Influenece

I would have to think that if China eventually wants all the power and influence that goes with the international reserve currency like the U.S. has and still enjoys that someday it may try to peg the Yuan to it's natural resources as collateral. They are trying to obtain as much Au and Ag as possible and they are supposed to have a massive amount of silver and gold on their territory that is either completely unexplored or in various phases of exploration, development and production.

So the question of why the opening of the PM exchanges in Hong Kong under my scenario would be significant. China would no longer really be at the mercy of the London or New York bankers as far as PM's and commodities go. The Chinese PM markets would be a counter balance against the manipulation that Europe and the U.S. need to keep the prices low to give the impression that everything in the economy is ok because the PM are not being allowed to rise to their natural price level that wpould indicate otherwise.

It must reallyscare our bankers, politicians and their European counterparts also that if gold gets too high then the general public will have their eyes open to the fact that something is very, very wrong in the economy and the world per se'.

China knows full well at this point what the game is over here regarding PM's and our debt problems. They also know that if they can control the price somewhat of PM's that it directly puts the screws to us and to European banking and their economies.

I think China wants us weak and could care less what our outcome is here regardless of how much we supposedly owe them. I do think they care a great deal about Europe as a market and they want to be the influence in that market they we have been for so long. China fairly recently, (I think) has been selling treasury type notes and bonds etc like the U.S. has for a long time. IMO they would love to have everyone else buy their paper that is supposedly debt free instead of the U.S. Treasury note that is highly indebted. China is also openly bailing out these Euro countries and we aren't really hearing about it from our MSM that much at all. It's already starting to happen. Like a slow and steady Chinese version of the Marshall except they will bailout everyone who lets them. They will rebuild them financially (somewhat) and not like we did with infrastructure and trade agreements in order to have a larger market to export into.

The bottomline IMO on the Asian PM markets is essentially that if China gets the Yuan to be a world currency then the appreciation of PM prices is in their best interest and the interest of their citizens in the short and long term.

China is actively promoting citizen ownership of PM's after decades of being banned from doing so. They are making PM's available to their citizens as a way imo to enrich their citizens or to prepare them for the monetary change that will happen someday.

Most Chinese are fairly poor. What better way then to get them to buy PM's now and then inflate the price in the markets because as a country it's in your best interests also to have your monetary back stop worth as much as possible. Their citizens (the one's who bought any PM's now) would be increasingly wealthy and therefore eventually buy and consume more Chinese made goods and then from there I think their economy starts to become consumer oriented just like ours used to be after WWII when most of our manufacturing and industrialization (and the jobs that came with it) happened that made this country what it is today.

(Whew! That was some strong coffee this a.m.:-)

ZZL
Jul 19, 2011 - 9:42am

Wow, that's interesting. EE

Wow, that's interesting. EE just attacked in the middle of an FUBM. Quite unusual. However that does bring silver down to resistance.

¤
Jul 19, 2011 - 9:47am

Two Nasty Stab Wounds

Those were two nasty stab wounds that just took place.

Looks like the EE is around and is trying to extract blood today from the PM price action early.

gold bug-ger since 2001
Jul 19, 2011 - 9:47am

Comex options expiry Tuesday

Just think of all the 1600 and 40 calls that will get screwed if the EE can bring it down by Tuesday.


Jul 19, 2011 - 9:54am

silver attack

I find it interesting that yesterday and today the EE began a morning attack at $40.47 and pushed it down to 39.94. Almost the same pull down on two consecutive days! Anyone have a theory? Screwing the 40 calls seems like motivation!

Yesterday it seems they left it alone the rest of the day. I attribute the evening drop to some profit-taking. Perhaps they are done for the day... I just purchased some SLV 48 Sept calls yesterday afternoon. Should have waited until this morning.

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