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 22, 2011 - 2:17am

Just keep stacking/accumulating

Brothers and Sisters

Gold and Silver are cheap today compared to where they are ultimately going. Cost average in, get yours while the getting is good! Our government (makes me sick thinking I actually was engaged and doing what I thought was right - exercising my right? to vote) will never do the right thing, they are too far down the road to hell paved by their arrogance and ignorance!

Jul 22, 2011 - 2:06am

@thegoldenchild I don't know

@thegoldenchild I don't know if you can come up with a formula. Maybe tax increases + spending cuts < increased spending due to raising the debt ceiling. Because they will go through that 2 trillion pretty quick up until the election or early 2013 when the President gets sworn in.

Then they revisit the debt ceiling/taxes/spending cuts again depending on what the Senate/House looks like politically. It's all really about the elections. Everybody wants to get reelected they could give a rats ass about the debt right now. They all just want to look good to those that might be voting for them.

Bottom line is you don't cut spending by adding more debt - which is what they are doing. It's the Federal Reserve that does the money creation to buy the treasuries from the US. So, it is money printing by the Fed. But more debt issued by our Treasury Dept. Thusly burdening the current/future tax payers of America.

Economical Disaster
Jul 22, 2011 - 1:55am


You've probably heard that Aug. 2nd is the drop-dead date for a debt-ceiling deal. Nuh-uh, the White House tells Damian Paletta. It's actually July 22nd. Writing and passing the legislation takes some time, as does working the money through the Treasury Department. This can't be left until the last moment.

But why are they telling us this now? Debt talks have completely broken down. The two parties's negotiating positions are spinning further apart, not coming closer together. Republicans are now pushing a balanced budget amendment they've specifically designed to repel even conservative Democrats. The GOP increasingly doubts that the debt ceiling matters and needs to be raised with any real expediency, while Democrats -- potentially including Treasury Secretary Tim Geithner -- increasingly doubt that the debt ceiling is constitutional and Republican demands ultimately need to be met. This doesn't seem like an environment in which moving the date of doomsday up by two weeks is going to have much effect.

Jul 22, 2011 - 1:49am

Sell my PM's ?? I don't THINK SO

In fact, we just ordered 100 more ounces of silver and assorted gold fractional this afternoon to fill out our stash. BRING IT jpmorgue et al you pathetic excuses for humanity.

Turdle GG
Jul 22, 2011 - 1:47am


Nothing happens without government backing. The exchange is therefore 100% supported by the government.

It was Jim Rickards who spoke to your very questions about it not being in China's interest to push up the price of PMs. As he's more intelligent than me, I'd recommend listening to that interview. I think it was the most recent one, or the one before.

Jul 22, 2011 - 1:42am

Good points Turdle.Another

Good points Turdle.

Another thing - PAGE is state approved/supported, isn't it? I don't think though is that China right at the moment is especially keen on seeing substantially higher PM prices. I mean, it might be that they wouldn't care about PMs (especially silver, as you also remarked) trading 10x higher because with their 3 trillion $ reserves they could still buy up the whole market a couple of times.. I just don't see a reason why they'd support something like that though.

I mean, we are not foolish enough to believe that government want to be fair, are we. Of course one reason could be because substantially higher PM prices would break the western economy. Point though is they don't want that either, because that would also cripple their own economy and that historically has led to revolutions and the last thing the Chinese dictatorship wants is a revolution.

- Markus

Jul 22, 2011 - 1:37am

Thanks Turdle, I am tired,

Thanks Turdle, I am tired, not thinking. So it's been trading for a few hours already? Nothing ground shaking happening there. I can go to bed now? Oops, shoulda looked a few comments earlier. See everything I needed there. Guess I will go to bed, I am not functioning anymore!

Jul 22, 2011 - 1:30am


Thanks for the welcome. This is without doubt the best PM site I've seen...

Re: my question.

So the soundbite = tax increases / spending cuts

The real means of paying for the increased debt = PRINT MORE $$$!

Turdle GGsilvermedusa
Jul 22, 2011 - 1:27am
Jul 22, 2011 - 1:24am

Does anyone know what time

Does anyone know what time the HK exchange opens? Been watching like a hawk to see if it effects PM markets when it does. Have been neglecting work and other things trying to see what is going to happen with all that is reaching deadlines here: debt ceiling, budgets, Eurotrashcrash, et al. Don't know if I should spend the last of my dry powder to buy now, or be more patient. I keep getting this nagging feeling that if I don't buy now, it's all going to go to shit and I won't be able to later. Of course, that will happen when I am working or on the toilet so I will have no time to react. : )

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