Macro

520
Fri, Sep 16, 2011 - 9:46am

Gold is recovering today and is actually green on my screen. Wow! How unusual! Let's see if we can rally today and crawl back above 1800 before we call it a week. There's been some very interesting "news" rolling around for the last 24 hours and I wanted to take a minute to give you my non-educated opinion.

The crux of the matter is summarized quite well below:

https://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100011987/china-to-liquidate-us-treasuries-not-dollars/

Between these comments and the wikileaks cables, one can quickly conclude that the Chinese are considering (if not already actively engaging in) further "diversification" of their vast U.S. treasury holdings. In the article above, Mr. Pritchard makes this sound as if there will be some happy and pleasant side effects of these moves. "Don't worry", he seems to say, "those dollars will flow into hard assets like stocks, land and gold". As if it's a zero-sum, no-big-deal event. On this point, he is dreadfully wrong.

As you know, I have long maintained that the real purpose of Quantitative Easing is not to promote economic growth. It is to promote low interest rates. Remember how rates on U.S. treausries are set...through auctions. Simply stated, if you need to borrow $50B and there are no takers at 2%, then you have to try 3%. If no one wants your bonds at 3%, then maybe they'll take them at 4%. Low or no demand means higher interest rates. Period.

With U.S. borrowing needs at all-time high levels, the rest of the world must be induced to buy treasuries. But, rates cannot be allowed to rise. As Mark Steyn points out in his new book, if long-term rates were to return to 5.7% (the average for the period 1990-2010), debt service projections for 2015 would increase from $290B to $850B! Additionally, the only "way out" of our current fiscal disaster is to magically increase tax revenues through economic growth. A return to higher rates would stifle and crush any potential "recovery".

So, what's a Boy Wonder to do? The answer: MORE QE MORE QE MORE QE.

The U.S. has managed to cover its necessary funding needs since June by managing the headlines. Have you noticed that nearly every time a treasury auction arises or the POSX moves down toward critical support, some type of intervention takes place. Whether it's a foreign central bank devaluing their currency or a rash of suddenly scary headlines out of Europe, events seem perfectly timed to keep money flowing into treasuries. This can work in the short-term and it obviously has. The yield on the 10-year note has actually declined since the end of QE2 in June. This won't and can't continue. A recent study from the University of Wisconsin showed that, by 2020, U.S. funding needs will soak up nearly 20% of the total annual global GDP! Do you really think that that is possible? There can be no world GDP when world economic growth is crushed under that type of debt burden.

But, that's in the future. What about the near term? Eventually, rates will rise when buyers (like China) disappear. Faced with an immediate funding crisis, QE will resume with vigor. Left with no other government funding option, the Federal Reserve will be forced into creating trillions of new greenback, simply to keep the social security checks flowing, the doctors paid and the military shooting. The dollar will resume its long-term decline into obscurity.

In the end, all of the central bank intervention in the world will not be able to suppress the global demand for true safe haven financial protection. Gold will rise to heights that even you, my dear reader, may currently think are unattainable. Silver will most certainly come along for the ride. Therefore, do not be fearful. If you use the time left to prepare...mentally, financially and spiritually...you will survive, and even prosper, in the days ahead.

Here are your updated charts. Unfortunately, both have taken on the appearance of range-bound markets. This can be managed as it affords us the clear opportunity to buy at the bottom of the range and sell at the top but it certainly isn't as much fun as runaway efforts to the upside. For today, don't get too excited until/unless either metal is able to firmly trade through the blue trendlines I've drawn inside the ranges.

I'm going to be away and unavailable for most of the day today so, just as John said to Yoko, "looks like you're on your Ono". I will be monitoring things from afar, however, and will attempt to update if conditions warrant. Have a great day and a relaxing weekend! TF

p.s. Another preparatory move for the opening of PAGE:

https://www.reuters.com/article/2011/09/16/cjina-gold-idUSL3E7KG1IG20110916

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  520 Comments

AinT
Sep 18, 2011 - 2:24am

Back from the coin shop

Just got back from the coin shop where I picked up this beauty, the 1Oz Lunar 2 dragon. I know at ¥6000, 100% (I kid you not) over spot it's not exactly the most economical investment but it sure is pretty. They were rationing them to 1 per person and there was a good 10 or so people waiting to buy them. No matter how much the paper price of silver is pushed down the demand for physical in Japan, and in particular these coins from the looks of it, is very strong.

Kenscott Stormdancer
Sep 18, 2011 - 4:21am

Excellent Information - Thank You

The information you provided is quite diverse and informative. I will have to take some time and digest all the different aspects of silver and industrial demand you have provided.

I hope you are correct in that investor demand will likely compensate for a possible decrease in industrial demand due to a more sluggish world economy.

Presently, I think silver will increase in value and investors do move to hard assets to preserve investments. Long term, I feel silver will increase in value unless certain things take place. If overall world demand for silver related goods does decrease, and the world economy goes completely digital, I think silver will decrease. Hopefully, these two possible outcomes do not take place soon though I do eventually believe one of the two is going to happen.

As for my current status, I have physical silver and plan on holding until silver hits a point I am looking for fairly soon. If I were to invest in indexes or the like, I would play it short with buying short-term on the low points and selling short-term on the high points. Also, I would be selling on percentages at this point in time.

Once again, I thank you for your informative response. I look forward to breaking it down and learning more than I current understand.

Kenscott

Gramp
Sep 18, 2011 - 6:02am

Some a.m. Reading.

China charms Europe, but Beijing has own agenda

By BARRY HATTON - Associated Press

https://news.yahoo.com/china-charms-europe-beijing-own-agenda-063837797....

Crisis-hit European countries are swooning over China's $3.2 trillion cash pile — the world's biggest foreign exchange reserves — even though many are angry about what they view as unfair Chinese practices.

"China is increasingly trying to diversify its foreign policy relationships ... trying to find the right ways to use its new-found influence, to gain from it," says Nicholas Consonery, an Asia analyst at Eurasia Group in Washington DC.

Join the dots, Beijing-watchers say, and China's strategy becomes clear: It wants to use its economic leverage to make friends who may be more forgiving in disputes over trade and human rights, and ensure doors are open for its goods and corporate investments in the European Union, its main export market.

Most immediately, many European countries are looking for a lifeline to extricate themselves from the continent's severe sovereign debt crisis, which threatens to collapse the continent's financial system.

She cites Greece as an example. As China promised to acquire that country's bonds, state transport giant China Ocean Shipping Co. snared a $1 billion concession deal in 2009 for the country's largest container-terminal port near Athens. That gives COSCO's growing port management business a foothold in Europe and positions it to prosper as Chinese trade with the Balkans and Central Europe grows. China also pledged to help double the trade volume with Greece to nearly euro6 billion by 2015.

In Italy, Chinese businesses have been buying up textile factories and producing the "made in Italy" label under Chinese conditions. That has undercut the prices of the finished goods and wages of Italian workers, causing tension.

When Greece announced its Piraeus privatization plan the Federation of Greek Port Employees went on strike, saying that "the government and the Chinese leadership should realize that we will not allow our ports ... to become Chinatowns."

Boardwalk
Sep 18, 2011 - 7:08am

New Recruits

Our farm was host to an edible/medicinal wild plant identification workshop yesterday. The reporter from the local newspaper who came to cover the event was a self professed "preparer". Two of the attendees were a young couple trying to transition from a life of wage slavery to one of self sufficiency.

The young couple are fairly close neighbors so we are looking forward to helping them get up and running. They're already well on their way, as they've just built a chicken coop and bought a few Silkies. Veggie garden is in planning stages for next year.

All three are now new recruits to the Turd Herd.

RaRaRasputin
Sep 18, 2011 - 7:10am

UK Trading platforms

Deleted and moved to appropriate forum

Sim
Sep 18, 2011 - 7:48am

Gold and Silver

I think we are headed up. There will be volatility the coming weak because of Big Ben's performance but both precious metals have no where to go but up. Dollar is doomed until the Fed stops printing money so we are headed up. Next week's outlook updated at https://mcx-advisory.blogspot.com

zilverreiger
Sep 18, 2011 - 7:53am

UK Trading platforms

Interactive brokers is nice

Red Pill rowdyboy
Sep 18, 2011 - 8:20am

@Rowdyboy

DPH, thanks for the spotlight on the ESF. Very few people understand the power and control held by the ESF. This does not fit in with what the country's founders intended. It is a black op that works outside the government, with no overview of any of its activities.

I will definitely review this material. Did you set up a forum topic for this?

Forum topic here https://www.tfmetalsreport.com/forum/esf-americas-secret-weapon/550

Red Pill ¤
Sep 18, 2011 - 8:23am

@DPH

more Matrix meaning and philosophy vids here

https://red-pill.org/the-matrix/meaning-philosophy/

murphy
Sep 18, 2011 - 9:08am

Third Party article

What a third party will accomplish even if they don't win. Have not the time to watch the movie he talks about.

https://www.thedailybell.com/2957/Anthony-Wile-Nelson-Hultberg-on-the-De...

On another note. Is seems I picked an unfortunate week to travel and miss an immense amount of tremendous posts from so many.

@Scott- glad to see you returning to more postings. I always wondered why you slowed down from the amount you used to write on the old blog. As many have said you are wise beyond your years. What you may lack in your confidence of your writing skills, you more than make up for in content. I think it is time you start a local third party in your district and take a state or congressional seat.

@ BenRoberts- I really am at a loss worse words. Your wide ranging knowledge and the ability to communicate it are really outstanding. I don't know what you do with the rest of your time but I hope it is teaching political science to the masses. As a matter of fact it might be an idea for you to start a forum on the topic.

@ DPH- I didn't even know there was a Tycoon in the TFM mining business. Fantastic posting as usual, ALL of them, both the serious and DPH 24/7. You are a machine!

Here's to a good week coming up.

Frontal Labottleme
Sep 18, 2011 - 9:11am
¤
Sep 18, 2011 - 9:32am

Can the euro hope to survive? ( & some Merkel caption fun?)

Financial Crisis: can the euro hope to survive?

As the Greek sovereign debt crisis bears down on the eurozone - and financial leaders bury their heads over the inevitable bailout - Martin Vander Weyer suggests how the euro's endgame will play out

By Martin Vander Weyer

7:00AM BST 18 Sep 2011

If you look at how the markets reacted, you might think the past week was one of positive progress towards a resolution of Europe’s financial crisis.There was, after all, plenty of talking – from last weekend’s G7 get-together in Marseille to Friday’s ‘‘Eurogroup’’ finance ministers’ conclave in Wroclaw, with some multi-national conference calls in between.

Angela Merkel of Germany and Nicolas Sarkozy of France reassured Greek prime minister George Papandreou that his country had a future in the eurozone, while EU and IMF officials felt able to give Greece breathing space by deferring until next month a decision on whether to release an €8 billion tranche of bail-out money that is conditional on progress in spending cuts.

The Eurogroup, with US Treasury secretary Timothy Geithner in attendance, agreed a so-called “six-pack” of tougher budget rules for member countries. And the European Central Bank was joined by the Bank of England, the US Federal Reserve and the central banks of Switzerland and Japan in a co-ordinated exercise to provide sufficient dollar liquidity for European banks to see them through to the end of the year.

The key people behind these moves also agreed that one topic was off the agenda: the possibility of a break-up of the euro and, more immediately,....

https://www.telegraph.co.uk/finance/financialcrisis/8771135/Financial-Cr...

Gramp
Sep 18, 2011 - 9:32am

WTG Boardwalk!

That is great you have been able to start networking!

I would like to encourage any one who has even considered having Chickens to, GO FOR IT! Very simple to care for. Just do a few minutes reading.

Would you rather have your kids/ grandkids sitting inside watching tv, playing vidiot games, or have them harvesting fresh eggs right from the chicken coop?

Kids LOVE that type experience! Young families from "Urbania" have visited my parents "Shoe String" small business, and returned a year later to say their child talked about it non stop.

The chickens were free ranging @ my parents. A young Asian man looked at the yard and said "This reminds me of home..."

I asked "Where is that?"

He replied "Thailand"

There was a massive cultural Barrier that was removed by something as simple as the chickens. Otherwise, that fellow and I would NEVER had an in depth conversation about each other's culture.

Oh, not to mention once u have tried FRESH eggs, there is no comparison!

¤
Sep 18, 2011 - 9:36am

Merkel commenting on Sarkozy's "plan"

Merkel: "Nicholas got a little drunk and showed me his "plan" but I didn't have any tweezers with me at the time."

redwood
Sep 18, 2011 - 9:45am

DPH, do you ever sleep? 

DPH, do you ever sleep? Thankyou for all your very informative posts.

¤
Sep 18, 2011 - 10:08am

lol

Your welcome.

Yeah, just not very well. Caught a rare nap last night at 8:00 or so and woke up at 11:30 p.m. I was wide awake last night at midnight as you can see.

Outfitter
Sep 18, 2011 - 10:11am

Contest?

Is there a contest for who can post the most YouTube posts on the main thread?

Some people might try creating something real and tangible with some of their time.

Just a thought.

Gramp
Sep 18, 2011 - 10:19am

I found many of the You tube

I found many of the You tube posts VERY informative.

On a Saturday night, what would be better to post? nothing?

no one is on my ignore list... I am able to filter out the good from the bad, so let it fly.

RedRover
Sep 18, 2011 - 11:01am

Street Money (theory)

thoughts? I'm all about being a silver/ gold bull.
I just listened to this theory though & wanted
to see what consensus on here is?

https://www.youtube.com/watch?v=b9nPw6pG8I8&feature=feedu

Long John
Sep 18, 2011 - 11:01am
The Doc
Sep 18, 2011 - 11:10am

JPM Telegraphed Silver Prices Smashes Using Fake Trades

Points 8-12 of the JP Morgan class action suit allege that JP Morgan Telegraphed silver price smashes using FAKE TRADES on the Saxo Bank trade platform.

Interested in your take on this Turd- would massive fake trades appearing for seconds on the Saxo Bank platform for several seconds, then being subsequently withdrawn technically be fraudulent?

Also very interesting are points 44-47, which allege that the well known option-expiry day silver smashes were executed for the express purpose of blowing up the "delta" risk of holders of short, far-out-of-the money options, suddenly forcing them to cover their positions, thus handing JPM silver futures positions at prices far below market prices only minutes prior.

Agree that everyone needs to take time to read this in its entirety- it contains much excellent information.

Haole
Sep 18, 2011 - 11:27am

Thanks DPH

For

Philosophy and the Matrix: Return to the Source

Here's one some may not have seen.

https://video.google.com/videoplay?docid=7583894250854515095

Just watched Kubrick's Odyssey: Secrets Hidden in the Films of Stanley Kubrick for the first time this weekend which is very interesting also. Especially for those who find no sense in the notion men went to the Moon numerous times in tin cans with the computing power of Casio wristwatches...

cpnscarlet ¤
Sep 18, 2011 - 11:35am

The Awakening *1/2

DPH - Watched this and found it to be the same old "New Age" stuff in a YouTube package. Many little truisms surrounded by extrapolated garbage. And along with that, big glaring lies (or unprovable conjecture). Many quotes attributed to great people (Einstein) taken way out of context. Statements about theology, and particularly Christ, are simply not based on anything than some 6-sigma belief system and certainly not palatable to anyone well versed is scripture - "Go screw around with your own god, buddy".

Statements about the physical realm are also wild guesses. The usual argument is "everyone, even the ancients, always knew this", is IMHO a simple BIG LIE that Hitler would have admired. Ancient knowledge about singularities and high technology? Show me the ancient engineering drawings, and you might have my interest.

One thing I will agree with - there is a battle of good and evil going on at all levels of existence (physical and spiritual). But I don't think the people who made this video are on my side of that battle. They are on the enemy's side in a counter-intelligence battalion.

Ferd Torgerson Long John
Sep 18, 2011 - 11:52am

@ Ben Roberts

Although you did not ask my feedback directly, with all due respect, I don't think I've ever seen anything like the Fulford interview throw out so many wild claims in one piece. Just trying to keep up gives me a headache.

About the only thing he didn't posit was the idea of population mind control by the government through the cheap availability of chemically-altered canned hams. I guess that means my little stash of those beauties is safe, for now. We're going to pop open one today for Sunday dinner to see if we think we can rely on those if TSHTF.

MrSteed
Sep 18, 2011 - 11:55am

More info in the infowar...

I have been exploring this site, https://tragedyandhope.com/ , and have found it to contain an interesting number of videos, documents, articles, etc....

It's titled from Carrol Quigley's "Tragedy and Hope" book (the book is in it's entirety linked there), which is in itself a very interesting read. But, the site is less about the content of the book per se, and more about critical thinking in general.

¤
Sep 18, 2011 - 11:58am
cpnscarlet ¤
Sep 18, 2011 - 12:01pm

Other Vids

DPH - Most of the other videos you posted are ones I've seen before and deal with subjects that are far more concrete. Thanks. In my internet presence, I've found that realm of metaphysics (The Awakening et al) contains those concepts which are the most difficult to transport as data packets - they are best left for face-to-face encounters.

¤
Sep 18, 2011 - 12:03pm

Haole

Thanking you for the link

cpnscarlet Ferd Torgerson
Sep 18, 2011 - 12:07pm

@Ferd - "Chemically-altered

@Ferd -

"Chemically-altered canned hams"? That's it! That's the answer! Now I can rule the world like M.I.T. wanted me to.

¤
Sep 18, 2011 - 12:07pm

H'mmm

Pretty heavy, but in a light dose. Like it.

Thinking out of the MSM box is what maybe some people need. Most of the regular Turdites and others who follow the market and the PM's realize a lot of what's contained in the vids.

But if your a newbie to what's going on and your just recognizing that all is not right, then the vids might just provide that slight moment of epiphany.

Just maybe.

Contribute

Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 5/20

5/20 7:00 pm ET CGP speech
5/21 10:00 ET Existing Home Sales
5/22 2:00 ET FOMC minutes
5/23 9:45 ET Markit PMIs
5/24 8:30 ET Durable Goods

Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)

Recent Comments

by lakedweller2, 3 hours 38 min ago
by chudson, 3 hours 46 min ago
by Clarki Stomias, 4 hours 18 min ago
by indiana rod, 4 hours 26 min ago
by Curtissandoval@att.net, 4 hours 37 min ago
randomness