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 ()


Turdle GG
Jul 22, 2011 - 1:21am


The key, of course, is the potential scale. This is what Maguire focuses on in the promo video. Who was it recently (Rickards?) on KWN who spoke about the fact that right now it's only the bigger cities that have gold and silver retail outlets, and that they are a little glitzy/shady.

If the major banks' million of clients who transact their banking via the internet are attracted to buying a few ounces of gold or silver through their banks' website (linked to Pan Asia exchange), that will be significant.

Turdle GGstoneeh
Jul 22, 2011 - 1:12am

Pan Asia


Another way of looking at it is that it's like buying physical direct from a mint.

Alternatively, they give you the ability to trade on margin and not take delivery - in that sense it's like trading XAU in the forex markets.

So, are the Chinese retail guys going to take physical or trade the price with leverage? No doubt they will do both, but with real estate now less attractive for them, and with the stock market down and with negative real interest rates, conditions are good for high PM demand.

My take on it is that it will only start to have an impact if/when physical purchases become substantial. As Ted Butler said in his latest commentary, there are about 1 billion oz of silver inventory in the world, and about 3 billion oz of gold inventory. After taking out the amount used for industrial purposes, there really is not much silver left over. So, I think it will be in silver rather than in gold that the Pan Asia exchange may have a bigger impact.

Jul 22, 2011 - 12:56am


There is a slight similarity between the last time SLV hit 40, and this time. Note on a daily chart the pullback is similar. Perhaps a rhyme?

Jul 22, 2011 - 12:54am

Pan Asia

Thank you very much for the links Turdle.

10.3 Traders may declare to the Exchange delivery and receipt of physical gold after traders pay in full at strike prices in accordance with directions of delivery and receipt.

11.2 Traders holding contracts of buying physical gold may apply to the Exchange to take delivery of the gold after they make the remaining payment for the gold


Article 2 Clearing and settlement refers to operations conducted by the Exchange based upon transaction results, publicized trading prices and relevant regulations of the Exchange to calculate, receive, pay, clear and transfer margins, losses or profits, handling fees, risk reserve funds and other funds between buyers and sellers .

So one is basically able to put up the full margin and take delivery. Frankly I don't see much of a difference to the fractional reserve schemes of all these other exchanges - except that delivery is possible constantly, instead of for example the respective delivery months at the COMEX.

I guess we have to see it in practice to judge it's impact, but so far sounds like another fractional reserve exchange that will draw some physical demand into paper, just like the London and American exchanges and the big ETFs are doing.

- Markus

Turdle GG
Jul 22, 2011 - 12:53am

HKMEx silver futures contract trading has begun

See this:

661 x 1,000oz contracts have traded. Price shown on the chart is 20min delayed.

Turdle GG
Jul 22, 2011 - 12:30am

Pan Asia Gold Exchange


see this:

Best information is on the page starting with "Our Characteristics - Trading Rules of the Exchange". They will actually deal in physical gold. Buyers can deposit 100%, 10% or 5% of the transaction amounts. So, physical gold, plus leverage. *Might* be a powerful combination.

Their website (where it's hard to find any better info than the above):

Jul 22, 2011 - 12:26am


In 2013 there will just be a... wait for it... wait for it....


boob it
Jul 22, 2011 - 12:16am

NIA Stock Hint

Hi, thanks to terri , & stockgumshoe I figured out the hint is Agria Corp GRO. Im putting that 1000$ on agria tomorow morning, HAHA NIA!

GRO went up 30% today. NIA seems to do good at pump and dump, I agree LARRY, but A little pumpy and dumpy could help the old boob. So who knows what will happen tomorrow when NIA release their hint to everyone. I just released it to Turds favorites early!

Jul 22, 2011 - 12:08am

Re: HKMEX and Pan Asia

Ok, just realized that the HKMEX is just another paper exchange. They offer paper futures with the option of physical delivery (an option which by experience the fewest will utilize).

Regarding the Pan Asia Exchange, I couldn't even find a homepage for that. But it's supposed to be a physical exchange, yes? Anybody got more detailed info (besides the Youtube promo video that has been circulating)?

- Markus

Jul 22, 2011 - 12:04am

CFTC to Consider Position Limits in Early Fall

They were required by law to enact position limits by January. They will continue to bend law & justice to exactly the degree they want it to. Right now they don't even make excuses, but if push comes to shove and people are demanding answers they will call it national security or something like that and continue to serve the banksters.

Gary Gensler is from Goldman Sachs - how stupid can people be?

- Markus

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