1650 and 42

Thu, Jul 28, 2011 - 4:25pm

I'm still confident we're headed there as soon as next week. Here's why.

The Turd is no civics professor but, as I understand it, there's a process which must be followed on Capitol Hill. As a refresher, I offer you this:

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IF The Republocrats in The House pass their bill tonight and IF The Republocrats in The Senate approve their's over the weekend, the differences must then be reconciled in a conference committee. Then, IF reconciled, both chambers MUST pass the new, singular version. By Tuesday. Our esteemed, illustrious and supremely qualified President must then sign the bill into law.

Hmmm. When you look at it that way, it sure doesn't seem likely that they're going to get it done. I'd say that the chances are now greater than 50/50 that The Regime raises the debt limit by Executive Order. If O'bottom goes this direction, you can bet your arse that he won't just piddle around with a puny increase. He'll raise that baby by at least $2T, enough to last through the 2012 election. This will result in two things:

1) A complete loss of confidence in the ability and desire of the U.S. government to address their disastrous fiscal "situation".

2) An inevitable downgrade of U.S. debt by the major credit rating agencies to AA+, at a minimum.

Both of these developments are extremely bullish for the PMs. Extremely bullish. They also signify a major signpost on the road to economic disaster. Remember, quantitative easing is, at its core, simply about buying time. The idea was that if, by buying treasuries, The Fed could keep rates down long enough, the economy would recover and tax revenues would increase sufficiently to sustain The Great Ponzi. To no one's surprise, it didn't work, and now Fed/Govt/TBTF Complex faces their end game.

In order to survive, The Fed MUST now continue QE at an even greater pace. The PMs and all commodities will see their multi-year rallies accelerate. Economic conditions will continue to worsen. Tax revenues will remain stagnant or decline. The annual U.S. budget deficit will widen. The dollar index will break down through the March 2008 lows of around 71. The ratings agencies will be forced to downgrade U.S. debt once again. To keep rates on current and past debt low, The Fed will have to engage in even more QE. The entire U.S. ponzi scheme will continue circling the drain faster and faster until the bottom finally falls out.


And this is all going to happen a lot sooner than what you might think. Some say 2030. Some say 2025. I think we'll be lucky to make it through 2013. Oh, and don't ever forget, the favorite tools of distraction for the Fed/Govt/TPTB Complex are wars and insurrections. Plenty of that on the way, too. As we like to say around here, prepare accordingly.

Onto the charts. Both of our metals ran into a double whammy today. First, there's a general reluctance to bid them higher in that everyone is now convinced that a debt ceiling deal will cause price to drop sharply. Second, The Cartel has clearly decided they'd like to keep a lid on things near 1625 and 41. However, it is very important to note that, even under these conditions, the metals never did truly roll over. Gold rebounded off of firm support below 1610 to close near 1615. Silver held support near 39.50 and is now back just under 40 at 39.80.

For tomorrow, there are more reasons to be long than short over the weekend so I expect an UP day. Ideally, gold will trade up and finish the day near the crucial 1625 level. Silver will rebound and finish somewhere in the neighborhood of 40.50. When the markets re-open Sunday evening and the "deal" has still not been reached, expect both metals to blast through the Cartel-induced resistance levels mentioned above.



That's all for now. I'd like to end this on a happy, upbeat note but I'm afraid I can't. I can give you this, however. My favorite schoolhouse rock. "Yow! That's unfair! Givin a guy a shot down there!" See you tomorrow. TF

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LongGoldLongSilver · Jul 28, 2011 - 4:26pm

My second first! Or?

My second first! Or?

bernard · Jul 28, 2011 - 4:40pm

As I stated previously,

As I stated previously, todays action of was an attempt to shake out weak hands. Silver is now primed (after a brief, healthy, 2-day sell off to a major triple line of support) for its next leg up towards $45.


worldend666 · Jul 28, 2011 - 4:45pm

So when to trade out of paper

So when to trade out of paper metals and into the real thing? I have to admit I like the leverage and switching will make my gains/losses 1/3 what they are now.

I have about 25% of my money in bullion, 30% in miners and another position 5 times larger in XAU which I would like to keep in paper as long as possible.

FOFOA reckons the event will be binary with no time to switch. I'd say that's quite likely, but it's possible there will be a nice run-up before then as we are not at crunch time just yet.

robov · Jul 28, 2011 - 4:46pm

What Does One ,Make of This?

Hope your right Turd as I have started scaling in on the recent drops in some of the miners, yet I came across this today which if true is bearish for gold and silver.

In an attempt to cash in on an anticipated move lower for the Euro, options traders are buying puts (bearish bets on a drop in price) in both gold and silver. This can be seen both through the volume of the put contracts and the volatility, or premium over intrinsic value, options traders are willing to pay. This activity is more run of the mill for silver, which has become a trading vehicle in addition to a semi-precious metal than it is for pure, precious Gold


duckwomanloulou LongGoldLongSilver · Jul 28, 2011 - 4:47pm

Hell in a handbasket

Only one of my 15 miners is in the green - sheesh it's a painful day even tho' Gold has recovered splendidly from the EE raids. Total insanity

One flew over the cuckoo's nest

"You will believe the MOPE!!"


atlee robov · Jul 28, 2011 - 4:49pm

option buyers

More interested in who was writing (selling) the options. Buyers are historically wrong the market.

sevin · Jul 28, 2011 - 4:52pm

Man i miss those days of the

Man i miss those days of the Schoolhouse Rock videos. I think the conjunction junction one was my favorite. I'm starting to think maybe the Bernanke wants the U.S. to get downgraded and a default would help this to rush along QE3 as others have pointed out. These next couple days should get interesting.

RockinJohnnyT · Jul 28, 2011 - 4:59pm

I think the Cartel

I think the Cartel has Models that run every possible problem they could run into, so they know exactly what is going to work to beat us down the most. I agree Obum-a will raise the ceiling to last until the 2012 elections are over, but i still see the EE killing the metals when he does that. They still have to much "Cheat" on there side to have what should be going on happen (metals should be sky high). I have been watching SLW and GPL (miners) they seem to tell you what is going to happen for the day - don't know why but they do. 

Have a great evening.....

ewc58 - Have to laugh - but its the truth - he is destroying it all - I still do know he is just a puppet.

@DPH - https://www.tfmetalsreport.com/forum/guns-people-who-want-one-protection-arent-them/449

lots of gun info here. Good luck

C F · Jul 28, 2011 - 5:03pm
Dr Durden · Jul 28, 2011 - 5:06pm

I love the smell of freshly

I love the smell of freshly printed FRN's in the morning. 

I also love buying gold today and having it gain $50 in transit.

kliguy38 · Jul 28, 2011 - 5:07pm


Your miners have had a nice pullback that was both welcomed and necessary. You can try to trade them (which i do) or you can buy and hold here for a VERY nice swing this year. These pullbacks will NOT be the same pullbacks as the past 6 months......The trade is now being driven by the boyz UP....not shorted as before as they accumulated. BE AWARE of the game or GET OUT. You need to know why you are referred to as sheep. There are several good traders on here on the miners.....they are target ON.

stoneeh · Jul 28, 2011 - 5:09pm

Excellent article Mr. T. Cute

Excellent article Mr. T. Cute vids. The way you put it, it indeed is unlikely that they'll reach an agreement by Aug 2... weird, I've never thought they'd let it come this far. Seems they really really want it to come across that there indeed is a choice and they are indeed debating over it, instead of the truth, that QE to infinity is baked in the cake.

It's also funny that some smart people have clearly calculated that the deadline, when the treasury's funds are running out, is actually really August 15. The Treasury is now violently denying that. Yeah, let's deny a simple mathematical conclusion :). Way to go EE.

- Markus

OC15 · Jul 28, 2011 - 5:13pm

My take

I think the PMs temporarily dive on a debt ceiling raise simply because this is bizarro world and a raising of the ceiling means the full faith and credit of U.S. of A. will be successfully restored and the dollar will get a temporary boost.

Either that or there is a "crisis" that takes our attention off these debt talks and they hurriedly pass something out of necessity to allow the country to continue spending.

LongGoldLongSilver · Jul 28, 2011 - 5:13pm
Adam Smith · Jul 28, 2011 - 5:16pm

Another very appropriate Schoolhouse Rock Episode

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Watch to the end to see what happens to "Bill."

atlee · Jul 28, 2011 - 5:16pm


YES I couldn't agree more!!!

Thank you Turd for the clarity!

The powerful few who really control things are at least 5 steps ahead in this game. They want a lower dollar, they want a downgrade they want more QE they want entitlements curtailed they want more wars.

This was all planned.

stoneeh RockinJohnnyT · Jul 28, 2011 - 5:16pm

Good post RockinJohnnyT

And fully agreed. I can remember a Nigel Farage interview on KWN when he told Eric that he was sitting with his colleagues to celebrate after they defeated a bill in the EU parlament, and coincidentally one of the constructors of the bill (basically an EE guy) came by and the yelled to him if he won't like to join them for a drink to celebrate, and this guy smiled and replied "enjoy your little victory today - we have 50 ways to win". Nigel said that sent a chill down his spine, because he knew it was true.

- Markus

Northern Border · Jul 28, 2011 - 5:25pm

Got two more people into the life boat today

Keep stacking.

I just got two more people into the life boat today (physical buyers).

Turd, next time your in Minneapolis give me a heads up. We will go boating on Lake Minnetonka and I will take you out to Big Island where its like spring break every weekend, very similar to Lake Havasue. 

NB, going north.

ewc58 · Jul 28, 2011 - 5:28pm

Great points Turd

and that picture by Rockin' Johnny is looking more timely by the minute.

DPH: check the end of the last thread, I wrote you a How To on your question about what guns to buy. Don't know how much you do/don't know about the space so I hope it's about right. Happy to help.

Darth: you always keep it real. Let Them Not Forget: this kitchen is the hottest. Outside of the one where the EE creeps will spend eternity that is.

ewc58 · Jul 28, 2011 - 5:34pm

@Adam Smith

Adam, like you I put my money where my mouth was earlier, bought 10 AEM 1/21/12 $85 Calls, got them at $39 per.

Giddyup gold!

GoldenTurds · Jul 28, 2011 - 5:48pm

If Obottom signs...

Don't think he will sign Exc Order. 

If he signs that Exc Order...............he will own this whole mess.

Tea Party wants him to sign his own death warrant. don't think he will do it. He might burn down the building with his finger pointing to the republicans.

A joint deal is the only way to keep this bullshit dance going 2-3 more years. Dem's and Rep's must keep pointing the finger at each other.

NC Fred ewc58 · Jul 28, 2011 - 5:49pm

@ Adam Smith

Why do you prefer the way out of the money calls?

What do you think about the Jan 60 calls @ $4.30

¤ · Jul 28, 2011 - 5:51pm

Thanks everyone...

...for your help on the last thread regarding my shotgun questions.

@ewc58...that was very helpful and gave me a lot to consider regarding other options. 

NC Fred · Jul 28, 2011 - 5:51pm


That question should have been for ewc58.

Dr Durden Northern Border · Jul 28, 2011 - 5:53pm

I told Turd to watch for the

I told Turd to watch for the funny hat signal at the U2 concert but apparently it was missed in the rain.

Turd, I think you mentioned "homecoming" in that blog. But I swear you had a bit of a southern slang/draw in your intro vid, so you can't be a Minnesoooota boy. Hmmmmm....

ewc58 · Jul 28, 2011 - 5:54pm

Get a deep hit 'o GATA bud

Here's a peek at Bill's report tonight. As I say, if you like the info, please consider subscribing to LeMetropole Cafe. Bill Murphy offers a 2 week free trial, after that he sends me looking for you if you don't sign up frown

With the London GATA-fest set for next week (Santa will make his first public preso in a long time there), it will be a great time to have full access:


"The US financial markets are beyond farce. They are a joke. To think we were on the Chinese Communists' case all those years, only to end up with a government that manipulates markets as much as they ever did … only to have them end up with more of a free market than we have. Can’t wait to deliver the Planet GATA point of view on our markets at Gold Rush 2011 next week.

When I woke up gold was up $2, but silver was in the tank, down 35 cents or so. How bizarre, because the DOW was higher and most commodity prices were steady to higher. It made no sense, UNLESS you live on Planet GATA. Often, before the sinister Gold Cartel bums hit gold, they attack the shares, like yesterday, and silver RIGHT BEFORE gold is to be nailed. It is somewhat akin to what Andrew Maguire told the CFTC about JP Morgan having certain disguised, and untraceable, signals to their allies about what is coming and how to make money. It happens over and over and over again, just like today. All of a sudden look what gold did:

Gold fell to $1602 and silver was crushed, falling to $39.24 at one point. ONCE AGAIN, it was a PLAN B Gold Cartel attack following the PM Fix of $1613.50 … which followed an AM Fix of $1617.50.

What a drill! In the end though, today was a big winner for gold. The Gold Cartel is going all out to bury the price and it is not paying off. With the silver margins being what they are, it is easier for them to bury silver in the short term, and they are getting away with it for the moment.

What a plus for gold to hold $1600 like it did and make such a comeback!

How about this! The gold open interest fell 18,408 contracts to 518,046, a very steep drop. This is bullish, any way you look at it. Spec longs are liquidating going into first notice day and perhaps a number of converted option longs in to futures also sold.

Meanwhile, the silver open interest rose 635 contracts to 120,198. Typical, the silver open interest is finally rising, as it has the past week, only to have the crooks at JP Morgan go after them to take them out.

One aspect about the US stock market and gold REALLY stands out. 100% of the stock traders believe there will be a debt deal before the deadline on August 2. AND, almost as many believe gold will sell off sharply on any deal. Rarely is there such unanimity of opinion on trades. This sets up the likely scenario that the DOW will sell off after any kind of rally. But, more importantly, I believe there are a horde of buyers waiting to buy physical gold on any sort of decent dip. You can almost feel it, especially the way gold traded today."

CauseChange · Jul 28, 2011 - 5:57pm

No major overhead resistance now, Gold Free to fly!

Lots Of support for gold now. 1610 is solid, 1600 Is very solid, 1580 is the bedrock now. Nothing short of a nuke would break 1580 intersecting support lines. so where is the over head resistance? There is none!!! Well nothing like what we have seen in the past any way..... except for the odd round numbers maybe for gold and $50 silver, we are free to fly........

Next jump is to upper channel line in from Aug 2007. This is where we should have been trading all along really but lets call it the "new paradigm" = Public realization of gov debt/hyperinflation Ponzi, should take gold vaulting to $1850 or the top of the next channel before any major over head resistance is found. Happy $200 move in gold!!

¤ · Jul 28, 2011 - 6:05pm

I think Obama goes the 14th route

I can see where the Repubs pretty much dare him to and he goes right ahead and does it.

The Repubs at this point don't seem to have a plan that is passable. Spokesman William Daley just said on CNN that "...Obama would veto any short term debt measure, not because it's a political move, but because it wouldn't be helpful in the long run..." to para-phrase a bit. (i almost choked on my dinner laughing)

I think of it like this. Obama all along has said he does not want to go the 14th route because he's not sure of it's legality. He's supposedly a constitutional lawyer so I think he definitely has a opinion that he just hasn't given lately. He's been asking and seeking a "grand plan" this whole time. Nothing boring or pedestrian for this president. He wants the blockbuster deal etc.

That much is clear about him. So why wouldn't he want to do something that has never been done before, especially during a crisis in debt and confidence in our country, and do something really big like evoking the 14th? That seems to fit his criteria of a grand plan or manuever.

I'm pretty sure they would all sign onto to it eventually just to relieve themselves of having to do it themselves every 2 years or so. They just don't want to do it themselves for political reasons.

Which is why I think they are seeking to force Obama's hand to do so.

And he will do it and be seen as a "savior" to those who have no clue what's going on and are listening to the MSM for everything during this debt drama.

· Jul 28, 2011 - 6:11pm

Just Don't See Default Occurring

Turd: I dearly love your prescient outlooks, but I have a different take. Each of the statements below is my opinion, from which I build my conclusion:

(1) BO is a TOOL of the bankers.

(2) BO is ignorant relative to those running all the TBTF banks.

(3) BO's white house advisors are all extremely sophisticated, insider bankers.

(4) BO realizes he is falling in the polls.

(5) BO has become accustomed to the perks and prestige as POTUS, and hence wants to be reelected.

(5a) BO is narcissistic.

(5b) BO thinks in terms of himself first, hence, any solution to whatever crisis is at hand requires that he first deal with the issue of "what's in it for him."

(5c) BO believes that he wins if he can receive praise for whatever "solution" results.

(5d) BO cares not at all about the outcome of this present crisis, so long as he can claim a victory, and demonize his opponents.

(5e) BO is clueless about private sector economics, small business, the work ethic, or that a smaller government is a better government.

(6) BO hates republicans, as in BO's mind, they are actively seeking to destroy him.

(7) BO realizes he needs to rile up his base, that is, leftists and those who rely upon government handouts.

(8) Boehner is a consummate insider, and is trying to play both sides, that is, the electorate, and the bankers;

(9) Reid is better at the game than Boehner, and everyone on capital hill knows it.

(10) TBTF banks want QE3, regulatory freedom, and a placated electorate.

(11) TBTF bankers own ALL politicians at the national level, and can destroy anyone who fails to toe the line or is seen or could even potentially be seen as being an impediment (Weiner, anyone?).

(12) The electorate is COMPLETELY CLUELESS about what the debt ceiling means, or what the Federal Reserve is, or that debt is money.


The bankers win, like usual. All of the publicly known decision-makers have NO incentive to let USA default, as they all will get the blame politically. None of those elected officials have the courage to actually do something positive for the USA, as doing so will certainly result in some form of retribution by the EE, or the electorate. It is a no win for any of them. Meanwhile, the real decision makers in the shadows, have already orchestrated the outcome. A default will in all likelihood ruin their plan, and bring unwanted scrutiny to the shadows. Under no circumstances will this be allowed to happen.

So, how will this play out?

No default. Magical last-minute solution suddenly presented. Bet on it. Cheers all around. PM's drop temporarily. Then, all of this falls off the news pages while another "crisis" arises in the MENA.

PM's resume their gradual upward climb, with the occasional EE beat down. QE3 is announced, PM's continue to climb.

No downgrade, no default, all is forgotten by the masses.

Watch and see.

The system will not end yet, because the banksters have not stolen enough. Look at Argentina. It took two defaults for the banksters to get what they wanted. The banksters do not want that to happen in the USA. They will instead let uncle sam keep borrowing, and borrowing. Until one day, assets will be transferred to the elite, and the populace will get to pay debt through higher taxes. Count on it.

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