Late-day Levitation

Mon, Nov 21, 2011 - 4:13pm

After a particularly nasty global selloff this morning, everything from stocks to crude to the PMs are trying to bounce a bit this afternoon. I wouldn't get too excited, however.

We see this almost every day now...every down equity day, at least. Stocks decline and then, once the bad news flow ebbs a bit, stocks recover. This afternoon, it's not just stocks, it's almost everything. It's tempting to get a little optimistic. You might begin to feel that the storm has passed. Maybe it has. What do I know? I'm just saying...this has looked and felt really bad for about 3 or 4 days now and I feel like things are going to get a lot worse before they get any better.

On the bright side, we discussed this morning how buyers seemed to be emerging at $31 silver. Well, whaddayaknow...$31 continues to hold. In fact, the silver chart even has a little FUBM look to it. Again, caution must be observed here. Do not be surprised if $31 fails tomorrow or Wednesday. Stout and significant support does not look to be prevalent until we reach $30 and continue down toward $28.

Gold, on the other hand, looks terrible. Having decisively broken the trendline from the September lows, it looks almost certain to be headed even lower. I'd say 1650 is not far over the horizon and 1600 is likely. Sorry. I wish I had better news for you but I gotta call 'em like I see 'em.

There is absolutely no doubt in my mind that gold and silver are being deliberately jammed lower by the intervention of the U.S., Swiss and Japanese central banks, through their conduits, The Bullion Bank Cartel. Yes, some spec money is again flowing out of the pits as liquidity is raised worldwide. However, since September, central banks have played an active role in clipping over 10% from the price of gold, all during a time of extraordinary uncertainty and increasing fiat currency devaluation risk. Soon, the time will arrive when no more blood will be drawn from the stone...when all who can sell will have sold. This will be evident by CoT reports that show a stable spec position alongside an increasing commercial short position, all while price is dropping. Again, this day is coming but it's not here yet. Until then, stay cautious and bide your time.

Finally, late last week I promised "Dr Jerome" that I would publish on this main page a missive he included in the comments section of one of my posts. Nice work, Doc.

Before I go back to grading today...
Submitted by Dr Jerome on November 16, 2011 - 6:52am.
I have been ruminating ...

A close friend of mine was murdered last December 2. He was 70. Marched at gunpoint into his cellar and popped in the back of the head with a 22. All for a handful of silver coins. We know who the perp is! But the police have not made an arrest for a lack of evidence. They have a video of him selling the coins to a local dealer. No justice. and I have lost my trust in the police, in the whole system, and in the leadership ability of every politician I know of. And now, banks are ripping off people's trading accounts.

My employer will not allow Fidelity to release my 403b. I have to quit a good job to get the account. that is discouraging. My wife and I began investing real estate in 2006. today I am ready to walk away from 8 underwater properties as good renters are becoming scarce. I am disgusted and ready for a different life. I think I'll get what I want.

Given that Keynensian economics is is sinking and gasping for air, those who wish to defend it now have the burden of proof. Good luck with that. Yet our leaders still embrace it (publicly) and sing its praises to the citizens. But why did I swallow their Keynesian system, hook, line, and sinker, for most of my life? Why did I not start buying PMs years ago as many of you did?

At Harvard University in the mid 1700s, a student was expected to know Latin and Greek upon entry and develop a thorough mastery of logic and argumentation--what we call "critical thinking" today. Theology was a mainstay of education, providing a foundation of ethics. That means every educated person of the day could read legalese, argue effectively, and at least knew right from wrong. After the American civil war education began to change. Industry needed engineers and financiers. The casualties of education were Latin, rhetoric, and theology, as math, the hard sciences, and the social sciences elbowed their way into the curriculum. I don't need to mention what happened to philosophy as Neitchze pushed aside Plato, Benthem, and others. Don't even get me started on Derrida!

Another subject we absolutely do not teach in our school systems is money! People graduate from college with no grasp on credit, compounded interest, and certainly no ability to understand your typical zerohedge article. I wonder how many of you with degrees in economics did not really learn how money works until after you took a job in the financial industry or became a PM bug?
So our educational system turns out sheeple who lack the skills to evaluate arguments and evidence, who are unable to recognize sophism, and have no clue of how money works. Can you imagine a more docile population for the Banksters to fleece?

But the lack of an education in basic thinking skills puts one at a far greater risk than just losing your money to bankers and used car salesmen. You are unable to comprehend and judge the rhetoric of political wannabees at election time. Political rhetoric has degenerated into the shouting of slogans, presidential branding, and attack ads. Where is the honest debate of issues? I thought that was what the new mass media of radio and TV would bring us... Oh, I forgot, you have to have a ton of money to use those...hmmm, who has that kind of money? Only now are the changes wrought by the internet being felt. Look out, EE.

I ran for student council in the 6th grade. IN the polls we were neck and neck. I lost, but I learned a valuabe lesson. "Promise those who vote for me a bowl of ice cream at my house after school!" That is what my opponent did (his name was Clinton, really), and he won. My best friend even voted for him. And he never got his promised ice cream (true story). Aha, Plato was right! In democracy, politicians pander to the voters and get elected. Then they can legislate whatever they want, such as insider trading. And at election time, here come the promises of ice cream again. Why don't people see thorugh it? Oh yeah, they are not really educated. But I didn't need to tell you that.

But I will tell you this: At my large midwest, Big 10 university, where we do NOT teach you to read legal documents, how to argue, or what's right and wrong, we DO promote diversity. Diversity is everywhere! There is a diversity statement appended to almost every document we write--sometimes very awkwardly. So why do we promote this so religiously? It wouldn't have anything to do with a one world government, would it? (couldnt resist). If I were a conspiracy theorist, I would see one grand scheme to shape the minds of people to discount radicals like Turd and embrace a new world.

But silver could bring it all crashing down.
The financial world is precariously hanging by a Keynsian thread hoping for ... something... To to hold it together, to keep inflation in check, the EE manipulates the price of oil, gold, food--every commodity can be controlled by a heavy hitter in the futures market. But there is enough gold, oil and corn to deliver that there really is no risk of the store not being able to deliver the goods. As many people who want it can have it.
Except for silver!
The CME has a measly 32 million ounces of silver on the shelves. 6000 contracts! If the sellers cannot deliver, the CME will be shown to be a fraud--a store that takes your money but cannot deliver. Trust will be broken. The buyers will leave. How would the EE control the price of the big items then?

Nobody could defeat the mighty Achllies. He was invincible. No weaknesses. Divine protection. Dipped in the river Styx to make him unassailable, except for his heel, by which his mother held him as she dipped. A goddes told the wimpy Paris of his weakness, and a lucky shot with his bow, guided by the goddess, felled the hero.

Max Kieser was right! Silver is the cartel's "Achilles heel." If we all keep stacking bars, rounds, eagles, junk & jewelry, eventually the silver will all be hoarded away in holes, closets, safes, and lost in canoeing accidents (alas). And the CME may be exposed.

A default by Italy or France could freeze global liquidity much sooner. If Greece brought down MF Global, perhaps Italy or France can bring down the rest. And if their liquidity dries up, they may not have the fiat available to keep selling the paper silver in the CME. One can always hope. December may be very interesting. I'll be reading Harvey Organ's play by play every night. And I am going to buy some more silver.

Silver! Not an investment... a revolution!

OK, that's all for now. Keep an eye on things overnight. The craziness will continue. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Nov 21, 2011 - 4:48pm

How can it teach what it doesn't understand?

"Another subject we absolutely do not teach in our school systems is money!"

How can they teach what they do not understand?

A letter in today's WSJ:

Loan Amortization Eludes Secretary

In his letter on the new student-loan program (Letters, Nov. 14), Arne Duncan writes of student loans that "After 20 years, the average borrower will have paid 20% more than their original loan. At that point, the only thing we are forgiving is some of the remaining interest payments."

Exactly how much confidence are we to have in this new student-loan program when the secretary of education, the person in charge of the program, is clueless as to how loan amortization works? What next, a Treasury secretary who does not know how to complete his taxes? A president who believes he is commander of the Marine "Corpse"?

J.H. Colter

Lindon, Utah

Nov 21, 2011 - 4:49pm

How can it teach what it doesn't understand?

"Another subject we absolutely do not teach in our school systems is money!"

How can they teach what they do not understand?

A letter in today's WSJ:

Loan Amortization Eludes Secretary

In his letter on the new student-loan program (Letters, Nov. 14), Arne Duncan writes of student loans that "After 20 years, the average borrower will have paid 20% more than their original loan. At that point, the only thing we are forgiving is some of the remaining interest payments."

Exactly how much confidence are we to have in this new student-loan program when the secretary of education, the person in charge of the program, is clueless as to how loan amortization works? What next, a Treasury secretary who does not know how to complete his taxes? A president who believes he is commander of the Marine "Corpse"?

J.H. Colter

Lindon, Utah

Nov 21, 2011 - 4:51pm

GDX down -1.5% and GDXJ down

GDX down -1.5% and GDXJ down -4.9%, not a bad day for the senior names, I was expecting even larger losses, maybe miners are posed to outperform the metal now?

Nov 21, 2011 - 4:54pm

jcs - If I may

2turtledoves posted this on a previous thread, right before it was replaced with a new post from Turd. It didn't get much attention because of that and I think it's important. H/T's to both 2turtledoves and red-pill who is also a Turdite:

The Twenty Trillion Dollar Bank You Never Heard Of! – Ask Why!
Quote: order for him to legally be able to trade them for you, the stocks were placed under their “street name”. I.e. they’re in the name of the brokerage, but they’re just holding them in trust and trading them for you. And you’re in reality the beneficiary rather than the owner.

Which is all fine and dandy if everything goes right. Now, it appears the rules were then changed so the brokers are not allowed any longer to put the stocks in their own name.

Instead, what they typically do is to put the stocks into the name of “Cede and Company” or “Cede & Co” or some such variation. And the broker might tell you that it is just a fictitious name, and will explain why it is really more practical to do that than to put it in your name.

The problem with that is that it appears that Cede isn’t just some dummy name, but an actual corporation that DTCC controls. And, well, if you ask anybody about this, who actually knows about it, they will naturally tell you that it is all a formality.

To serve you better, of course. And, well, maybe it is. DTCC seems like a nice and friendly company. It is a private company, owned by the same people (major U.S. banks) who own the Federal Reserve Bank. And if they all stick to their job, and just keep the money and your stocks flowing smoothly, I’m sure that is all well and good. But if somebody at some point should decide otherwise, and there’s a national U.S. emergency and/or the U.S. government becomes unable to pay its debts, well, they might just not give you your stocks back. Because legally they own them. Something to think about.

The DTCC is not something I hear talked about much, but post MF Global it is critically imporant that those who choose to trade stocks be aware of this potentially massive risk factor.

This is not a direct answer to your question jcs, but it is certainly related. I'm going to post a short interpretation of the information but I hope it only whets your appetite to read and truly understand the whole article. And do some more digging too I hope.

DTCC is one of the best kept secrets of the financial rabbit hole. They don't trade per se. They own everything that is traded. I'll try to summarize what red-pill explains in the article just to pique your interest.

DTCC is the clearing house that clears just about everything traded in the US. The stocks YOU buy are listed in THEIR name. An account entry it placed in your broker's account giving your broker a "beneficial interest" in the asset/stock. Your broker then transfers that "beneficial interest" to you via another accounting entry in your personal account, giving you the distinct impression the stock is yours and you "own" it.

You don't. Cede and Co. LEGALLY owns the stock. In the event of a meltdown, you get to stand in line with other creditors holding a "beneficial interest" in assets Cede and Co (DTCC) legally own.

We'll see how that works out for us when this house of cards implodes.

Knowledge of this diabolical system is one reason I never got over my fear of investing in stocks...even gold and silver stocks which are almost guaranteed to skyrocket in value before this bull runs out of gas.

People poo-pooh the idea that the mechanism will ever be used and they may be right. But it's there. So, maybe you get satisfaction ten years down the road after the lawyers do their thing with the legal system. You might be dead by then and there's no guarantee any value will be left.

Edit: People would have sworn an MF Global couldn't happen too...just a few short days ago....

Nov 21, 2011 - 4:55pm


Doobie is lit! Wow, what a crazy last coupla weeks. Popped by the LCS today, was busy. A few there to sell, but, gold was wiped out and slim pickins on the silver too. Two huge orders for gold came in today (200+ ozs). Smack down will only last a short while, till after options expiry. BTFD!!! Buyers of size are.

Nov 21, 2011 - 5:01pm


Saw the link and the picture of the cover from Ellen Browns book, Web of Debt. Great post btw

"Typical of the thief–distracts you with one hand while picking your pocket with the other. Only this thing is a multi-tentacled monster, and it’s now going for the jugular.."

The DTCC is also involved with naked shorting, aka strategic fails to deliver.

Made me think of a song video i was watching this weekend from the Spiderman movie. makes me wish I had a Spiderman suit.

Nov 21, 2011 - 5:16pm

Financial Repression

There's a new Ben Davies interview on KWN today and he talks about his speech at the Australian conference where he discusses financial repression.

Everyone who isn't familiar with Financial Repression, head on over to our very own Eric O's forum on it here:

Eric O has done a terrific job putting together stellar material on this topic. Most Americans aren't familiar with either the term "Financial Repression" or what it consists of. And it's time to get the word out to our family and friends. Sometimes, you can have a feeling that something is just not right but, if you don't have the vocabulary or intellectual framework for it, it can be very hard to put into words. Eric did such a great job explaining this, so profit from his hard work!

Nov 21, 2011 - 5:17pm

Heads Up


Nov 21, 2011 - 5:21pm

The Frailties of Our Banking Sytem

**I'm reposting this from the last thread, just because.....

Have been engineered for some time now. There is no market that's not got a percentage of manipulation to it. I do believe in percentages, and while people want to call a bubble, or a double shoulder top, or whatever, the price of silver wont be going to zero. The price of paper representing an ownership of silver will go to zero.

I just made a purchase this morning of physical. (It'll help me to replace the sinking of the family life raft in Puget Sound. Shame shame shame.) Even if I get the home-boy discount, it's mathematically higher than the spot-charts represent. (Even calculations of premiums.) So anyone who's talking smack on the PMs show me a receipt that reflect the physical selling for the paper price.

Here's another thing that you will see during these smack-downs on the commodities. That the spot price dives, and you look at the online dealers, and their premiums go up to cover the change. Also there are some dealers that just stop taking orders. The Majestic Silver mines are represented by NW Terr. Mint, and we had one Turdite who went there, and none was available for immediate delivery.

Silver and Gold prices can't be allowed to keep setting record prices as the masses will pick up on the momentum and start buying. This also will betray the fact that we indeed have inflation. QE-2.5 AKA "we will hold interest rates for how ever long we wish" doesn't come without "printing". It is a continuous QE that's been going on since July. I've seen guesstimates that it would cost the Fed around 1.4 trillion to maintain.

Deflation is not defined by a broken market that hasn't been allowed to clear the bad debts that were created by a bubble. Housing is that market.

Deflation is not defined by market prices that continually have to be suppressed. All manner of commodities are that market. Labor could also be included, as there have been no increases there.

Interest rates are being engineered as well as inflation, unemployment, income, P/E ratios, and equities prices. The US government has sections to buy stocks when it's needed.

Laws being stripped off the books, or rule-changed as we go to dismantle the systems of the past will skew the measurment we are used to using. Therefore past performance do not represent future performance. If you change the rules, then the markets change fundamentally.

People think that their cash is ok in the banks, well read this;

"Last year America’s third largest bank Citibank notified its customers of a new policy reserving the right to block cash withdrawals for a period of 7 days.

“Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change,” stated the advisory."

Nov 21, 2011 - 5:29pm


If our illustrious leader is scheduled to make an announcement about the SuperlessCommittee at 5:45 then don't let it hold up your dinner, because he can't tell time. It will probably take place at 6:10pm or so= fashionably late and all that= let the sheeple know who's boss.

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Key Economic Events Week of 2/24

2/25 9:00 ET Case-Shiller home prices
2/26 10:00 ET New home sales
2/27 8:30 ET Q4 GDP second guess
2/27 8:30 ET Durable Goods
2/27 11:30 ET Goon Evans speech
2/28 8:30 ET Pers Income and Spending
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2/12 10:00 ET CGP Hump-Hawk Senate
2/13 8:30 ET CPI
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Key Economic Events Week of 2/3

2/4 10:00 ET Factory Orders
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Key Economic Events Week of 1/27

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1/29 2:00 pm ET FOMC Fedlines
1/29 2:30 pm ET Powell presser
1/30 8:30 ET Q4 GDP first guess
1/31 8:30 ET Pers Inc and Spending
1/31 9:45 ET Chicago PMI
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Key Economic Events Week of 1/13

1/14 8:30 ET CPI
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12/2 9:45 ET Markit Manu PMI
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12/4 9:45 ET Markit Services PMI
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12/5 8:30 ET Trade Deficit
12/5 10:00 ET Factory Orders
12/6 8:30 ET BLSBS
12/6 10:00 ET Wholesale Inventories

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