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 ()


aurum argentum
Jul 21, 2011 - 11:53pm

The Golden Ratio

@DPH...When dentists are trying to create the perfect smile, they follow the golden ratio..When smiles are evaluated, the perfect smile nails the golden ratio to a tee. The front two upper incisors- the golden ratio is 1 to 1.1618...

Check out this link and the nod to Fibonacci.

Jul 21, 2011 - 11:46pm

Boob It (Ok..that felt weird to type :D

I like the NIA for various reasons and think that they play a part in enlightening the still-asleep-masses to the economic dangers ahead. I have heeded some of the advice they have put forth and I have done well in doing so but I don't, however, pay for the stock suggestions that they charge for. Some companies pay them (NIA) to promote the stocks and some are stock suggestions that the NIA promotes free of charge after their own hard work and DD. I don't believe that NIA is up to anything nefarious as they fully disclose their position in every stock recco. But the truth of the matter is that whereas their stock idea that they are charging for could be (and probably is) a winning pick of an ag stock.. there are simply too many other good ones that you (and I) can find without paying a fee. It's like anything else. If you can afford it and are willing to pay them for the expertise and the convenience of not having to do the DD yourself... I totally have no problem with that ...go for it.. buy their report.

But since it sounds that you, like me, won't be paying that fee.. ..try out some of these: FEED, CHBU, CSGH, HOGS, GRO, DBA, SPVEF ....and there are many others. These are just a few that I have on my radar / watchlist that I hope to do more DD on soon.

Turdle GG
Jul 21, 2011 - 11:45pm

Bloomberg article on CFTC considering position limits


"The proposal spurred more than 13,000 comments..."

If I'm not mistaken, weren't >12,000 of those comments specifically about limiting concentrated bets in the silver futures market? I could go through Ted Butler's articles to find the exact number, but I'm too lazy.

Let's see what happens. I'm not as optimistic as Ted.

Jul 21, 2011 - 11:43pm

@thegoldenchild Welcome

@thegoldenchild Welcome aboard! Let me try to answer this question for you and let others weigh in. First any spending cuts or "revenue increases" are really only a farce. Cuts will be put out for like 10 years. So 3.7 trillion over 10 years let's say. So, it isn't much pain.

Revenue increases are taking away things like the cost of living increase for Social Security or getting rid of the minimum alternative tax or getting rid of the mortgage interest tax deduction. It's all smoke and mirrors.

They only want the debt cap increase. This is the end game. Without the debt cap increase there can be no QEIII. No QEIII = economy further tanks.

Long John
Jul 21, 2011 - 11:43pm

oh the streets of Rome....

Oh, the streets of Rome are filled with rubble Ancient footprints are everywhere You can almost think that you’re seein’ double On a cold, dark night on the Spanish Stairs Got to hurry on back to my hotel room Where I’ve got me a date with Botticelli’s niece She promised that she’d be right there with me When I paint my masterpiece.....BD

Jul 21, 2011 - 11:41pm


We all know what's coming. The battle of the next few days is theirs. I won't begrudge them a few days of respite...they know the best they can hope for...that has got to be tough. Time for the drunken ninja pose. We've been here so many times, and it always rolls off surprisingly to have the deck stacked against you....but it was their choice.

¤California Lawyer
Jul 21, 2011 - 11:39pm

Back at ya'

Thanks. Your thoughts on that were intense and now you've got me thinking about something I never considered in that way at all. H'mmm....

I looked at the golden ratio link and it just blasted my sensibilities to even try to comprehend any of it so I quickly closed the page

Seriously, that was just too much of a mathematical rush at this hour. I winced at it and laughed.

Everyone else be the judge... (anyone that understands this gets my admiration and a)

Golden ratio From Wikipedia, the free encyclopedia Jump to: navigation, search For the Ace of Base album, see The Golden Ratio (album). The golden section is a line segment divided according to the golden ratio: The total length a + b is to the length of the longer segment a as the length of a is to the length of the shorter segment b.

In mathematics and the arts, two quantities are in the golden ratio if the ratio of the sum of the quantities to the larger quantity is equal to the ratio of the larger quantity to the smaller one. The golden ratio is an irrational mathematical constant, approximately 1.6180339887.[1] Other names frequently used for the golden ratio are the golden section (Latin: sectio aurea) and golden mean.[2][3][4] Other terms encountered include extreme and mean ratio,[5] medial section, divine proportion, divine section (Latin: sectio divina), golden proportion, golden cut,[6] golden number, and mean of Phidias.[7][8][9] In this article the golden ratio is denoted by the Greek lowercase letter phi () , while its reciprocal, or , is denoted by the uppercase variant Phi ().

The figure on the right illustrates the geometric relationship that defines this constant. Expressed algebraically:

This equation has one positive solution in the set of algebraic irrational numbers:


At least since the Renaissance, many artists and architects have proportioned their works to approximate the golden ratio—especially in the form of the golden rectangle, in which the ratio of the longer side to the shorter is the golden ratio—believing this proportion to be aesthetically pleasing (see Applications and observations below). Mathematicians have studied the golden ratio because of its unique and interesting properties. The golden ratio is also used in the analysis of financial markets, in strategies such as Fibonacci retracement.

Jul 21, 2011 - 11:29pm


As peak oil raises the price of oil that might be another reason the price of gold rises (besides TEOTWAWKI)

Jul 21, 2011 - 11:26pm


This is my first post.

Turd, your price predictions in the past couple of weeks has been astounding!

My question:

Forgive me if I'm being a total noob - but if the debt ceiling is raised, and the plan is to pay for the additional debt via tax increases and spending cuts, then isn't it the tax increases and spending cuts that will be paying for the additional debt? And not "QE3"?

Jul 21, 2011 - 11:25pm

Eerily quiet

Dear Dr. Thompson,

Let's see, Euro crisis, US debt crisis, new HK silver contract opens, yada yada yada.

No one in the chat room. Gold and silver still suppressed under 1600/40.

In the whole fricken world only a few of us even notice.

Must be bullish.


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