The Fed Disappoints

222
Tue, Dec 13, 2011 - 3:48pm

HAHAHAHAHA! That's a good one! As if having the Fed overtly printing money would solve all the worlds ills.

Once again the media incorrectly spins today's FOMC minutes as a postponement or even a (gasp!) cancelation of further quantitative easing. Buy the dollar! Your evil Sith masters are such responsible stewards of the economy that they are prepared stop the presses and enforce credit discipline upon a spoiled, bloated populace.

What a joke. Up goes the dollar and down goes nearly everything else. Please, I hope you are able to see through the fog of this nonsense. Again I ask you, from where is this year's $1.5T U.S. budget deficit getting its funding? From where did the U.S. government get their funding last year? From where will they get it next year?

Oh, whatever. I'm not going to go through all this stuff again. QE to infinity is the only possible option, whether or not Maria Headiromo and Bob Pissonme agree makes no difference, whatsoever.

Anyway, back to important matters. I trust that the continued weakness in the metals is not catching anyone by surprise. Nothing has changed from yesterday or last week and the selling continues. Gold looks almost certain to head toward its 200 day moving average near 1615 and silver looks to be headed to 30. The big question is:

WILL THEY STOP THERE?

Maybe. However, I've got a sneaky feeling that they won't. I suspect that we will see a capitulation in paper selling when gold doesn't stop at 1610 and silver doesn't stop at 30. I've maintained for some time now that paper gold was vulnerable to a drop to 1550 and that paper silver could drop toward 25. Why change that forecast now?

I just saw the OI numbers for yesterday and they are very interesting to say the least. The Feb11 contract only saw its OI drop 1500 contracts. For a drop in price, this is an extremely surprising number. First of all, this nearly confirms for me that much of the front-month trading is done by WOPR. There seem to be very few, human holders of these contracts. Also, it's clear that much of the decline yesterday was due to the initiation of new short positions by The Cartel. Again, with lease rates at -0.5%, this shouldn't surprise anyone. The BIG story is the rise in Dec11 open interest by a net of nearly 500 contracts, from 1545 to 2034! The question is: Who is jumping the queue and why? Is global demand for physical metal this month finally going to be sufficient to explode the Death Star? Is this why The Cartel has desperately suppressed price over 0 in the past 3 months? I sure can't wait to see what tomorrow's numbers are.

As I wrap up, gold is 1633 and silver is 30.65. I sincerely hope that the discussions here over the past week have helped prepare you, financially and mentally, for this brutal selloff. Keep the faith. The only thing truly declining in value is paper gold and silver. I say this with confidence because thephysical gold and silver you have in your possession is invaluable and thus insulated from the day-to-day shenanigans of the paper market.

I'd like to type more but the LTs are planning a birthday party tonight for Taylor Swift and I have to go bake a cake. I hope to have more commentary this evening. TF

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LMR
Dec 14, 2011 - 8:19am
stoneeh
Dec 14, 2011 - 8:09am

With all the discussion about trading, losses etc

"Taking profits has never made anyone poor".

"Buy when there is blood in the street, even if the blood is your own"

If you know to interpret those two right, that's all you need to know in investing right there.

VinceBay of Pigs
Dec 14, 2011 - 7:57am

@Bay of Pigs

Just having some fun. Nothing personal Vince. I spent years over at Mish's debating gold trolls that used to take shots at me. I have a thick hide from all their abuse. LOL.

Don't worry, I do not take anything personally. I have no wish however, to join groups where all I can do is reward a confirmation bias. When I agreed with posters here I never felt the urge to post here, only when I began disagreeing.

I will console my unpopularity on this site with the knowledge that Europeans do not seem to like silver lately, and will sell it in favor of Euros. This results in nearly every morning being like Christmas to me, as I awake and look to see the European elves have stuffed into my stocking.

Shill
Dec 14, 2011 - 7:55am

Ben Bernanke Will Go Down In

Ben Bernanke Will Go Down In History As The Fed Chairman Who Destroyed The Country

https://goldsilver.com/video/ben-bernanke-will-go-down-in-history-as-the...

Dr Durden
Dec 14, 2011 - 7:55am

Miners

The best one to own is DUST. ;)

I've had this contention since day 1: if equities go, so will they. I hope I'm wrong, but nothing says otherwise to me other than maybe a few juniors catching fire (ie you're one lucky or really good mofo) or the HUI finally bumping out of it's big sideways grind in the mother of all divergences in the broad equity sectors.

Don't get me wrong, I've been tempted may times, but I've chosen to funnel any additional capital into fruits of the Earth rather than fruits of the algo's.

roadtoruin
Dec 14, 2011 - 7:35am

The D has been F'in B! come

The D has been F'in B!

come on silver, bounce!

boatmanGSFL
Dec 14, 2011 - 7:35am

@GSFL

look in your profile page in your trading account u don't have margin enabled

even if u don't use margin(don't) if u don't have margin enabled on your trading account u must wait 3 days for settlement on any stock you own, after u sold it to buy another.....w/enabled they ,in effect, loan u the money until things are settled.

they call that the t-3 rule.

call your trading co. n enable margin.,....its a formality.

**********************************************************************************

6AM BEATDOWN?....u can thank the blokes at the LBME for that......and the AM LBME morning gold price 'fix'

Senseosensei
Dec 14, 2011 - 7:10am

Thank you...

bankers for this great opportunity to buy more PM's at a discount price.

tpbetaaustrian12874
Dec 14, 2011 - 7:10am
Shill
Dec 14, 2011 - 7:07am

Euro @ 1.29 goodbye Euro we

Euro @ 1.29 goodbye Euro we hardly knew ye.

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