By All Means, Sell Your PMs!

Thu, Jul 21, 2011 - 3:04pm

Word of a pending "deal" between The Regime and The House sent the metals reeling this morning. This once again proves that WOPR does not have actual, human least, not yet.

Of course the debt ceiling is going to be raised in a package with some phased-in spending cuts and tax increases. That was never in question. The only question has been whether there would be a "plan" such as this or whether O'bottom would simply raise the ceiling by executive order. It's quite clear now what will happen. As partially discussed back on Monday, here's how this will play out:

1) The House cast a vote last night on a "Tea Party" package. It passes overwhelmingly but has zero chance of passing the Senate or receiving O'bottom's signature. No matter. It's all about "political cover". More on that later in point #4.

2) A "plan" emerges, brokered by The Regime and the Republican "leadership". 50 or so "safe seat" Repubs will vote for the plan in the House. Those 40-50 votes plus all of the Dem votes will be enough to pass the plan. All of the Senate Dems plus one or two Repubs will approve the plan in the Senate and O'bottom will sign it.

3) Problem solved.

4) "Tea Party" Repubs are able to claim that they did their best. They'll be "on the record" as having voted against O'bottom but voting for their own plan. This is known as "having your cake and eating it, too". On balance, they will be safely re-elected next year and Boehner will keep his job as SOTH.

5) Every politician wins! You lose. Again.

So with that behind us, let's cut to the chase. The debt ceiling is going to be raised again by another $2T or so... (Don't forget about this chart!)

...And it will only take about a year and a half to hit the ceiling again. With the passage of this "deal", all that will have happened is a kicking of the can down the road until early 2013. Hmmm. Early 2013. Why would that be significant?? Let's see, what happens in late 2012? I know it's something but I can't put my finger on it. Let me get back to you on that.

At any rate, the question you need to ask yourself right now is: "From where will this $2T be coming?".

I know! China! (Nope.)

Russia? (Nope.)

Japan? (Sorry.)

The EU and ECB! That's it! The owe us a few favors! (Negative.)

We'll raid pension plans and IRAs! (Someday soon but not yet.)


So, by all means, today's news means you should sell your gold and sell your silver. NOT! I sincerely hope all of you are wise enough now to not continue falling for the manufactured SPIN and MOPE of Washington politics.


About the Author

turd [at] tfmetalsreport [dot] com ()


Jul 21, 2011 - 3:48pm

lol...'Up in Smoke'...Don't

lol...'Up in Smoke'...Don't Bogart that friend...lalala

Our friend Chuck Butler re Debt Ceiling...

Jim Sinclair had a great line about raising the debt ceiling…

“The idea that an increase in the debt ceiling is a solution to anything is nonsense. Calling increasing the debt ceiling a solution to a debt problem is too stupid to be stupid.”



Jul 21, 2011 - 3:49pm

You know

You know what is even funnier than our so called Debt Ceiling raise..... The ECB accepting defaulted bonds.

Ya the world has gone full Charlie Sheen. The best part of this entire mess for me personally is knowing how fake it all really is.

Jul 21, 2011 - 3:56pm

Raid today was less intense

Maybe the EE is indeed becoming more and more inept? Mild (but encouraging) rally into the close, which we didn't see following the shake down on Tuesday. In light of this, perhaps we can start the day off tomorrow guns blazing, chew through resistance at $1600 and close above that level going into the weekend (which would also give us a positive close for the week).

Jul 21, 2011 - 3:57pm

With options expirations next week...

and a plan in hand....that lowers tax rates to raise taxes (you know you are about to get screwed when they start out with 'lower marginal rates') and doesn't cut anything but future profligation to reduce spending, the PMs are going to have a rough week ahead. Woo Hoo, what to buy, what to buy next week

Jul 21, 2011 - 3:58pm

With headlines like

With headlines like this:

Wall Street climbs on financials, debt progress

(Reuters) - Stocks advanced on Thursday, powered by financials after Morgan Stanley reported better-than-expected results and on apparent progress on debt deals in Europe and the United States.

You want to buy more silver fast lol..

Jul 21, 2011 - 3:59pm

EE may be pacing themselves....

They know they'll have cover next week, no need to blow their last supplies of powder all at once.

Jul 21, 2011 - 4:01pm


Press conference has started. And now finished

We saved the world

Video unavailable
Jul 21, 2011 - 4:04pm

sell PMs for the short term

so i guess we will see a huge drop tomorrow (and short term)? then we should all position with buying put options ? can make quite some money then i guess.

Jul 21, 2011 - 4:11pm

@WYO Silver

Thanks for the reply and opinion on Edelson's new vid/outlook. I'm in complete agreement with your opinion but wanted to get feedback in case I was just missing something. I've been following (not closely and not buying his reccos) for several years now - not nearly as long as you have.

He seems like a good chap, has a deep knowledge of the markets, spot on with political rants, correct on the major trends and such, but for the last year or so he seems to have gotten himself out of kilter with his short and mid-term timing, interpretation of the charts or something. Maybe softened up living the good life in Thailand?

It was downright painful to watch him over the few months of the big run up last summer/fall into April. He seemed shell shocked. I also thought that he should've been more upfront and timely with admitting a missed call, or just admit confusion with his TA or whatever. It happens to the best, so IMO it's best to admit mistakes quickly, reset the course and move on. If one has to eat a turd, best not to nibble. Anyway, that would've been appreciated by all except for those that want crystal ball analysis and zero tolerance for mistakes.

Hopefully he'll sort it out, tighten it up, shake it off and get back on top of the bull that threw him.

Jul 21, 2011 - 4:12pm

@ metcoalfan

Re: EE may be pacing themselves...

This wouldn't surprise me the least bit. For all we know, they could be gearing up for Sunday night once again. Whether by design or not, the EE does appear to have lost its grip somewhat (well, at least for the time being). Anyway, it's pretty much crunch time now...should be fun over the next several days.

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