Passing The Time

Mon, Aug 1, 2011 - 3:07pm

I must admit that days like today are really tough. The PMs are not trading on any rational fundos. They are simply reacting to headlines and the algo gyrations they cause. Yuck.

As mentioned this morning, we should all be prepared to buy any significant dip that develops. IF you get a chance to buy gold close to $1600, consider yourself fortunate. IF gold were to fall through 1600 and approach the significant support near 1585, consider yourself blessed. Silver, on the other hand, is just no fun at all. I'm now firmly in the camp that considers the margin hikes of May to have been so significant that silver can't seem to muster the open interest necessary to sustain a consequential move to the upside. The rallies are real but they don't have the depth necessary to sustain their gains. Once the buying pressure is exhausted, JPM steps in and pushes it back down. Earlier this year, rallies in silver were two-steps-forward-and-one-step-back. Now, it's more like 1:1. We had a very nice run from $34 to $41 but $42 is beginning to look like a real stretch. At this point, a pullback to $38 looks more likely in the short term. IF, by the grace of God we do see $42 this week, I plan to unwind my December call spreads and move to the sideline for a while.

Wrapping up for today, here's some user-inspired content for you to chew on. First up, ScottJ recommended this video series to me last week. Though it appears to be about a year old, you'll likely find it interesting.

Mike Maloney Schools Bankers on Deflation, Oil Price Crash, Gold and Silver (Part 1 of 2)
(PART 2!) Mike Maloney Schools Bankers on Deflation, Oil Price Crash, Gold and Silver


Preparing Accordingly

Lately, I spent a lot of time fashioning posts about the daily machinations of the gold and silver markets. I will, no doubt, continue this practice as it is a hobby/passion of mine. However, the subtitle of this blog refers to the end of The Great Keynesian Experiment and its implications so I feel I need to "get back to basics", so to speak, as it is the "prepare accordingly" part that we all need to practice.

I found this image on Google and it seems to sum up my point of view. We are but children, at once hopeful and optimistic, yet watching our future drain away. The arcade coin drop is a metaphor I've used often in the past and I think it provides a decent visual. In the immortal words of Inigo Montoya: Let me explain. No, there is too much. Let me sum up.

Our "coin" was dropped by the great Texas slimeball politician, LBJ, when he created The Great Society in the 1960s. A new, expanded role of the US federal government was created and politicians learned that they could manipulate government largesse to their own political gain. In 1971, the coin began sinking into the funnel and spinning faster when republocrat President R. Milhous Nixon, realizing that the gold-sponsored money supply of the US could never grow at a pace sufficient to support this ever-expanding government, removed the US from the "gold standard" and the US dollar has been backed by nothing but the full faith and credit of the US government ever since.

Republocrat Jimmy Carter presided over the initial wave of stagflation brought upon by Nixon's decision. The "coin" kept dropping and circling faster and faster during his four years in office. In 1980, suddenly there was hope. Conservative Ronald Wilson Reagan was elected and through a policy of tax-cutting and higher interest rates, the conservative Reagan defied the laws of physics as the coin actually moved up the funnel and slowed. However, having succumbed to old age and senility, even Reagan suffered a "death-bed conversion" to Republocratism and the coin began dropping again in 1986. Republocrat giant, G. H. Walker Bush took the reins of government in 1988 and, by 1992, our coin was spinning faster than ever and dropping at an alarming pace.

With the election of hick republocrat Billy Jeff Clinton in 1992, things began to get out of control. Soon, faced with a rapidly approaching end game, all republocrats in Congress and the Federal Reserve decided to go for broke. By massively inflating the US money supply, an illusion of prosperity took over, not just in the US but globally, too. This mirage held our collective imagination until the year 2000 when, suddenly, we began to realize that all was not well and that the coin was actually spinning faster and was much closer to the bottom than we'd thought.

"Good heavens. We can't have that!" exclaimed the new republocrat president Dubya Bush. With his partners in crime in Congress and the Federal Reserve, Little B reached into the funnel, grabbed the already speeding/dropping coin and actually gave it a push faster. By 2008, the coin was nearing the bottom of the funnel.

Just then, a dangerously under-qualified former street radical republocrat was elected president. President B'rock O'bottom is now presiding over the end of the game. At the end, the "coin" spins faster and faster until the bottom simply drops out. This is where we stand today. Are not events spinning faster and faster? Are your politicians and policymakers not making more rash and spurious decisions with each passing day? Are global leaders not positioning themselves for the next World Order?

The end of US hegemony is near and with it, the end of the US dollar as "world reserve currency". This catastrophe and all in entails could have been avoided with responsible leadership and an educated/involved populace. However, selfishly, we in the US decided it was best to pursue a plan where we foolishly thought our recklessness was beneficial. This attitude was best summarized by republocrat and Keynesian legend, John Connally, who, as the coin was dropped in 1973, told the world that "the dollar is our currency but it is your problem". Sadly, we allowed Mr. Connally to be prescient for almost 40 years but the world is about to turn the tables. Soon...very soon...the coin will finally reach the narrow end of the funnel and the bottom will simply drop out. What happens next will not be fun and games.

F**K The Fed - From the Award-Winning "The CONSPIRACY Project"
High School musical - We're all in this together

About the Author

turd [at] tfmetalsreport [dot] com ()


Dr Durden
Aug 1, 2011 - 3:15pm
Aug 1, 2011 - 3:17pm

They love to spend!

The love to spend our money! Only in the world of politics is an increase in debt considered a "spending cut."

silver foil hat
Aug 1, 2011 - 3:24pm

If I were to hold "cash"

I'd rather do it in rolled coins....

at least the nickel and copper will be worth something.

If hyperinflation really takes off, I bet the quarter and dime (and half dollar) will actually represent their respective values.

Paper FRNs (actually cotton) will be worth only pennies to the dollar... even after cotton futures go up.

The penny is already worth nearly 3 cents (1982 and earlier.... if you can find a significant amount of them still circulating) and the 1982-2011 penny is almost worth 1 cent in zinc.

The nickel..... well that's already worth nearly 7 cents in nickel and copper.

Just wait... soon we will have aluminum cons, if there are coins at all.

Since the treasury actually produces coins (the FED produces the paper FRNs) watch Sotero issue an EO recalling all coins.

That's my prediction.

Aug 1, 2011 - 3:30pm

The Social Security Cut Washington

The Social Security Cut Washington Does Not Want You to Understand

In response to your post above Silver Foil Hat

Is it Already Too Late for U.S. Coins?

Aug 1, 2011 - 3:35pm

What Mike Maloney gets wrong.... that he actually thinks someone will allow oil to go to $10. No matter how enormous the deflationary pressures become, Ben Bernanke can always counter it with more QE. Screw the fictional "money multiplier", does anyone think that the Bernank WON'T basically print physical cash and hand out if necessary? The man and the system is so vested in their neo-keynesian-monetarist bullcrap synthesis that stepping aside and letting deflation happen would be admitting that the entire system, their entire careers and life work has not only been worthless, but about as destructive as a major war.

Again, I ask you - where is this deflation going to come from? Balance sheet fraud is publicly accepted - so no bank goes under until it gets a cash flow problem. You can have a mega-bank with assets worth $0, as long as it takes in an equal amount of money that goes out, according to FASB its solvent! Just mark some dog-poo to unicorn valuations and voíla!

Debt-deflation can only happen when banks have to cover defaulting loans. They aren't doing it, they keep the loans and pretend they are worth face value. Besides, once QE3 gets rolling, the Bernank will probably buy every outstanding Treasury Bond, Note and Bill, followed by half the S&P500, and then moving on to any asset that isn't nailed down including wooden ponies.

Deflation? Where? When? How?

The deflation can always be solved with a decent dosis of hyperinflation. Thus, I think oil $1000 is more likely than oil $10. But then again, I'm just a mad-hatter.

Aug 1, 2011 - 3:40pm

Good Video to complement your videos!

$ 1500.00 SILVER - Mike Maloney on Gold & Silver Bullion Investing
Aug 1, 2011 - 3:41pm
Aug 1, 2011 - 3:46pm

Todays market swings

Whoever (EE) was positioned on the other sides of all the swings today in all of the markets mad must have made a killing.

That was some crazy action. Looking at the Dow and other indexes. It almost looks like they are trying to get the market back to "zero" or close to it so that it was mostly a neutral trading day by days end.

Tell me the markets are not steered to a conclusion most of the time or for vast stretches during the day. Crazy!

Aug 1, 2011 - 3:53pm

Mike Maloney can get off on tangents...

I've known Mike Maloney for years and have watched him slice an dice many people and organizations to ribbons. A lot of his shtick is to say outrageous and some what true statements to get a rise from his victims. Mike has a grasp of the overall facts of the great Keynesian ponzi scheme that few will ever have. I have put together several video conferences with Mike over the years and always marvel at his deep understanding of the difference between money and currency. If you happen to call currency, money with Mike in the room or on the phone, he will promptly correct you in a most unceremoniously harsh fashion.

Always great theater and well worth the time to watch...


Aug 1, 2011 - 4:03pm
Key Economic Events Week of 11/18

11/19 8:30 ET Housing Starts & Bldg Perms
11/20 2:00 ET October FOMC minutes
11/21 8:30 ET Philly Fed
11/21 10:00 ET Existing Home Sales
11/22 9:45 ET Markit November Flash PMIs

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Key Economic Events Week of 11/18

11/19 8:30 ET Housing Starts & Bldg Perms
11/20 2:00 ET October FOMC minutes
11/21 8:30 ET Philly Fed
11/21 10:00 ET Existing Home Sales
11/22 9:45 ET Markit November Flash PMIs

Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Key Economic Events Week of 11/4

11/4 10:00 ET Factory Orders
11/5 9:45 ET Markit Services PMI
11/5 10:00 ET ISM Services PMI
11/6 8:30 ET Productivity & Labor Costs
11/6 Speeches by Goons Williams, Harker and Evans
11/8 10:00 ET Consumer Sentiment
11/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
11/1 9:45 ET Markit Manu PMI
1/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

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