Wed, Nov 9, 2011 - 11:11am

Oooh, boy. Today is shaping up to be a real doozy. The rest of this week, too. It will be important to remain calm.

News of margin hikes on Italian debt and an Italian 10-year note trading above 7% has sent global markets reeling this morning. In response, gold and silver have traded off of their highs as the world spins into "risk off" mode. Now, while I can't say for sure when the world will flip back to "risk on", I do know this: The only way out is the creation of new, paper money. Defaults, bankruptcy, "haircuts"...all lead to the same conclusion. The only tool that central banks have to forestall disaster and collapse is the printing press. Though the day-to-day machinations of the PM markets can drive you crazy with their seemingly nonsensical price moves, your only protection through this storm is physical metal. Continue to acquire it...while you still can.

Let's start with silver. No change in my forecast from earlier this week. Even though its been washed back some today, I still ardently believe that a sharp upleg is coming that will take silver to and through 37 and, from there, up to our target area of 39-41.


Though gold has been pushed back, too, the resistance certainly wasn't unexpected. My initial target from 2 1/2 weeks ago was 1780-1840 and we split the difference to call it 1810. Here's the chart from 10/25:


And here is the chart from two days ago:


So the question is, where do we go from here? In a word...higher! Gold has built a terrific base of support below it and, very soon, it will charge through 1800 and hold. From there, the next major resistance should be somewhere around 1840 and, once it gets through there, it will head back to the September highs. My initial forecast from 2 weeks ago was for a 10% rally in five weeks to 1810. We can just about call that good as gold reached 1805 yesterday. However, I like these charts very much and they're telling me there is more room to run this month. As mentioned Monday, if we can hold the line this week and close above or near 1800, we should be very optimistic about the prospects for $1900 gold before the end of the month.


OK, that's all for now. Hang in there and try to enjoy the ride. TF

p.s. John Soltez has offered to be a part of an ongoing forum thread. You can find it here:

If you have any questions for John, he will respond directly to you in this forum.

About the Author

turd [at] tfmetalsreport [dot] com ()


Nov 9, 2011 - 11:13am

My first first

first !

Nov 9, 2011 - 11:16am


hey, ya gotta do it once,anyway.

Nov 9, 2011 - 11:17am

I wonder when the masses of

I wonder when the masses of investors will finally realize PMs are the only safe investment

Nov 9, 2011 - 11:19am

PaPa - Now making his resignation speech in Athens

I wonder if this time it's for real:

Now making his resignation speech in Athens, George Papandreou says a decision has been reached on a new consensus government and Greece will do all it can to stay in the euro. As of yet, he has yet to name the new PM, prompting one reporter to quip that he's using the speech to begin his re-election campaign.

Big L
Nov 9, 2011 - 11:19am

Love the TA, Thanks Turd, You

Love the TA,

Thanks Turd, You Rock!


Nov 9, 2011 - 11:19am
Nov 9, 2011 - 11:20am

A Mudraker is what is needed

If ever there was some difficult mud to rake, it would be the precious metals manipulation. 

Nov 9, 2011 - 11:31am

Thank you

Thanks for your effort TF!

RaRaRasputin paulindoon
Nov 9, 2011 - 11:33am

G Pap gone but no new PM as yet ....

In the meantime, L-Pap appears to be gone, and with it, the Fed and ECB annexation plans, and instead the speaker of the government Filippos Petsalnikos (or F-Paps) will most likely be named interim PM. What that means for the future of the country at this point is still unclear.

Silver Monkey
Nov 9, 2011 - 11:38am

Ongoing MF Global Discussion?

Do any Turdites know of a place with an ongoing MF Global discussion taking place? I sold all my miners and long PM positions concerned about the liquidations of MFG customer positions that were supposedly coming. I don't feel comfortable getting back in until I know WTF is going on with that. Thanks in Advance

Silver Monkey
Nov 9, 2011 - 11:47am
Nov 9, 2011 - 11:50am
Last Rebel
Nov 9, 2011 - 11:51am

@ Dr Jerome, I;m proceeding

@ Dr Jerome,

I;m proceeding on the assumption it can happen at any time. We all know what the EE can do. If they take metals way down to scare every one out how far might that cause miners to drop? Already lost a boatload waiting for everyone to "get it" in re: to miners and metals being real value and real money. Just gonna stack phyzz and other things until we get some enforcment and legitimacy in these markets. The risk of losing more is greater than the risk of missing the blastoff imho.

Mike Victory
Nov 9, 2011 - 11:56am

Kerber talks to Turkey

Markus Kerber talks to James Turk
Nov 9, 2011 - 11:57am



bancarotta (n.)

bankruptcy, crash, failure

see also

bancarotta (n.)

bancarottiera, bancarottiere, fallita, fallito

Silver Monkey
Nov 9, 2011 - 11:58am
Nov 9, 2011 - 11:58am

Correlation Between SLV and JPM

There was a post on Harvey's comments today that said:

> Every time SLV gets above JPM there is a margin Hike.
> 1) The 5 Hikes from early May (Everybody raised)
> 2) 8/03 Interactive Brokers
> 3) 9/23 China/ CME
> I'm sure there are more but I do not have access to the data or the
> ability to do a correlation study. I would appreciate it if you could
> find the time for this. Or better yet, forward to one of your contacts
> who could spend the necessary time to see if I am on to something or
> not.

I wondered if anybody had checked this out?


Nov 9, 2011 - 11:58am

MF Global Canada

Fortunately I don't have an account but Canadian clients are still frozen out of their accounts and can't close positions. I guess the bright side is that cash positions will be made whole.

"The Canadian Investor Protection Fund said MF Global Canada Co.’s bankruptcy affects “about $400-million” of client net equity"

"MF Global Canada’s clients have been frozen out of their accounts for a week, since Canada’s regulator, the Investment Industry Regulatory Organization of Canada (IIROC), suspended the firm’s trading privileges following the bankruptcy filing of its U.S. parent, MF Global Holdings Ltd."

"She said that if, due to accessibility issues, MF Global Canada is short of funds to fully cover client net equity, CIPF would make up the difference for each client account, up to a maximum of $1-million."

Nov 9, 2011 - 12:03pm

Nov 9, 2011 - 12:06pm

From Santa

November 9, 2011, at 10:53 am  by  in the category Jim's Mailbox | Print This Post Print This Post | Email This Post Email This Post

Jim Sinclair’s Commentary

Gold will re-enter the system, about that there is no question.

My conclusions is that a virtual reserve currency will be created that is tradable by central banks only. It will be a super virtual average of all major trading currencies with gold attached by a world sort of M3 against gold, as a price, held in the implied guarantee and/or currency.

The bullish outcome on gold as an end game is a cause of the intact gold trend fought so hard from $248 to present day by media MOPE.

Nov 9, 2011 - 12:07pm

Doesn't really matter what you accumulate

As long as it can be stored and not go bad, and you are pretty sure it's something that people will accept as payment or in trade, that's all that really matters. Gold and silver just happen to be concentrated forms of tangible wealth, that's all. You could say they're the ultimate symbols of tangible wealth.

But it doesn't have to be PMs. People snicker softly at those people and their canned hams, but not me. Not me.

Nov 9, 2011 - 12:07pm

My little Scrooge McCleburne

Thanks TF for the update, I know we're base-building for a huge move up, but I'm hoping the EE can buy me a few more days, as I wish to make a purchase, but don't have the capital ready yet. Grr.

Oh, I've also been trying to teach my little boy the value of sound money, as he recently went with me to the local coin shop, and got to hold silver dimes in those tiny hands. He's also been learning about the value of saving. Perhaps though, he's learned these lessons a bit too well. As I must admit, I was a little concerned when I saw him yesterday morning, dump the contents of his piggy bank onto the floor, and dance around atop the jingling coins, yelling, "Money, money, money!"

He's 2 by the way.

Nov 9, 2011 - 12:08pm
Nov 9, 2011 - 12:09pm

This from jesses blog:

As suspected, MF Global brazenly took liquid assets like Treasuries and warehouse receipts, but not cash which would have been more quickly missed, from customer accounts to post as illegal collateral for emergency funding with a lender who must have known that they were receiving stolen goods. When things fell apart, the lender simply took the collateral and liquidated it, and kept the money. And now they are refusing to even acknowledge this transaction, and apparently the management of MF Global is not yet talking. Why? Because it was an insider deal, and they don't want to give back the stolen money. When 'non-consequential' customers were requesting their funds, they were issued checks instead of wire transfers. The checks of course were not honored and bounced. But days later, and just hours before the bankruptcy filing, MF Global was paying BONUSES to its UK traders. Remarkable in light of how much dirty business the NY firms have been outsourcing to London. Follow the hush money. This is a scandal of the first order, and a severe test for the Obama Justice Department, the regulatory agencies, and the exchanges. This is a great crime, undeniably premeditated, and possibly the tip of an iceberg that would shake the public confidence in a deeply corrupt financial system. If a registered broker can simply take Treasuries and receipts for physical assets like gold and silver from customer accounts and give them to a complicit crony lender, and then look at the public with a straight face and say the money is missing and they do not know where it is, then no one's accounts are safe, anywhere, at any bank or broker, in the US financial system. This has every appearance of a legally sanctioned theft, pure and simple. Here is a synopsis of the likely events from Forbes: When did MF Global exploit the customer segregated accounts and why? How were the proceeds used to stem the firm’s deepening insolvency? Based on the sequence of events described above, I believe that MF Global transferred assets, not cash, from customer segregated accounts to a “house” account sometime late Wednesday or early Thursday. I’ve given those who executed the “nuclear option” to save MF Global the benefit of the doubt. I believe those executives used all available legitimate means to raise cash first, including trying to sell proprietary assets, as CNBC reported, and exhausting existing credit lines. When margin calls on the repurchase agreements and account closure demands from strategically important clients – not the bread and butter individual traders and smaller investors and money managers who got rubber checks – kept coming, they hit the wall. Why do I believe MF Global executives transferred customer assets not cash to “house” accounts? Because missing cash would be noticed immediately. Their clients were still trading and clearing and cash was required to settle. Securities such as U.S. Treasury Bills, blue-chip equities such as CME Group stock held by many exchange members, and physical assets such as gold, warehouse receipts, and other certificates of title are less active. They would not be missed Thursday through Monday... Any firm willing to lend $300-400 million for a week or so against approximately $700 million of customer assets was certainly wise enough to require recourse to those assets in the event of a bankruptcy. Some of the assets, like CME stock, were sure to drop in value if the bankruptcy occurred. When MF Global filed for bankruptcy midday on Monday October 31, 2011, the lender owned the customer assets. My guess is the pledged assets were immediately liquidated. No one is raising their hand to admit they’re the firm who lent MF Global several hundred million dollars, enough to get them through the weekend, based on collateral MF Global had no right to pledge. It’s not clear what the responsibility of a firm is in that situation to ask questions and confirm title. What is clear is that the arrangement, most likely a favor called in based on very strong relationships, must have been planned in advance. When all else failed to generate enough cash on Wednesday afternoon, someone at MF Global pressed the button and set the wheels in motion. The lender must have had the capacity to make such a loan and the ability to execute a strategy intended to leave few traces. But there are always trails to follow. (Like the traces of the enormous number of put options that were placed prior to 911.) Regulators can look for records at MF Global and at the DTC of transfers of assets between customer accounts and MF Global house accounts and, then, of those same assets between MF Global and a third party. I suspect there is only one lender, since there was not enough time to arrange for more than one and the potential for exposure would be greater with more counterparties. I don’t think the last inning lender is one of the banks with existing MF Global accounts. Everyone knew those organizations would be under immediate and heavy scrutiny...." Read the rest here. I beg to differ with the author. I do think it is a big, very well-connected name, and I think they are a party to a greater ongoing fraud that will never see the light of day, even if the money is eventually returned. And I have to wonder if anyone of consequence will ever be prosecuted for this, because they simply know too much about this and other things. This increasingly brazen theft is the consequence of moral hazard from a credibility trap. I am amazed at how so many people cannot wrap their minds around what is happening in the financial system, as a late stage fraud turns increasingly to blatant looting. Is this a classic case of cognitive dissonance? They simply will not see it, until it comes for them? What is it going to take, how far can this go? If this continues, then nothing you hold in this system is safe.

Nov 9, 2011 - 12:11pm

here's a chart

Daystar, a Turdite sent this to me yesterday:


Nov 9, 2011 - 12:14pm

Not that you need it from me, Turd, but wanted you to know

I respect the heck outta ya. nuff said. 

Carry On Comrade - Appreciate youcool

Nov 9, 2011 - 12:17pm

Contact Reps in mass?

So what can be done about the MFG theft? (Yes - I'm not waiting for a "verdict".) Thing only thing that comes to mind is that the MFG customers must in mass contact their Reps and Senators demanding that the SEC answer for why they were able to get away with this. Also, try to group local MFG customers (a tough job) and start contacting media starting at the local level. Aside from that - making a big stink - nothing will happen fast. Occupy MFG?

Nov 9, 2011 - 12:21pm

The end of gold bubble

Something I could not dare to post here-but its quite far away and good to know:

Nov 9, 2011 - 12:27pm

....and then I trade my gold

....and then I trade my gold for what?........

Nov 9, 2011 - 12:27pm
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