The Fed Disappoints

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:


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

About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 13, 2011 - 8:39pm

Shaz YES laws work without "FORCED" Taxation

Commenting here is too short to do any justice, but yes it has and does work. When you take away the implied or direct force from people claiming authority over you, then we are free to contract as individuals AND for multiples of individuals to come together in contracts.

I would recommend two authors that are essential in learning liberty. Murray N. Rothbard "The Ethics of Liberty" and Mary J. Ruwart, "Healing Our World". is a link to free download of her book.

I should also note The Free State Project, of which I am a pledger, check them out as well,

Peaceful Anarchists are libertarians, not brick throwing commies!

I put more trust in contracting individuals and businesses than I ever will with gov't "Authorities"

vamoose1 Bay of Pigs
Dec 13, 2011 - 8:43pm


gartman is bought, he is on the ee payroll and has been for years that fat faced fuck, as is jeff christian and as is nadless at kitco, not to mention kitco proper

aurum argentum
Dec 13, 2011 - 8:45pm

IRS 1099 forms on all gold sales in 2012 and beyond

I thought that this was voted to be cut out of The Patient Protection and Affordable Act but according to the newsletter "Dollar Vigilante", it has not. If so, bye bye anonymous cash purchases. Is this right? This will cost businesses a fortune...

If you thought the only mandate included in this law was the one that orders all Americans to buy health insurance by 2014, you would be wrong. In less than a month, all businesses will be mandated to issue an IRS 1099 form to all individuals and companies from which they buy more than $600 in goods and services every tax year. That's according to section 9006 buried in the monstrosity praised as "the first universal, comprehensive healthcare law passed in the USA."

If you own that barbarous relic, gold, or you're thinking about investing in some in the future, be aware of the fact that every single gold retail company in the US will now be forced to report a sweeping amount of info on each sale of gold in excess of 0.43 ounces to the IRS. Whether you still reside in the "land of the free" or have taken TDV's consistent advice by moving abroad, gold companies will soon have to report the source country of the gold they sell to Americans. In other words, the government will now have the knowledge and muscle to track every single one of your investments - foreign and domestic.

Dec 13, 2011 - 8:45pm

Response to SilverWealth

While, like most here, I remain a strong believer in holding Physical PMs, the concern SilverWealth brings up has always been in the dark recesses of my mind, especially as the world spins more and more out of control.

In this game where the rules are always changing, who's to say the Govt won't impose a major tax on the future sales of PM's, as SilverWealth mentioned, or declares Ag to be so precious for National Defense that all must be confiscated (eg. Cruise Missiles, etc.) for our own "protection"...for the value printed on the ASE?

Paranoia is a fine line I know, but the world has gone nuts and I'm just curious what the smart people here in Turd Town have to say about this kind of scenario?

Thanks Turd and all Turdites...this has become my favorite site!


Economical Disaster
Dec 13, 2011 - 8:46pm

Was The "Collapse" Of MF

Was The "Collapse" Of MF Global Premeditated? A Conspiracy Theory

Dec 13, 2011 - 8:52pm

Maybe the Missing Customer Funds Were Used to Short?

This just crossed my mind.

Since it is nothing but a daisy chain sequence anyway [hypothecation], that is, any asset deposited at a brokerage is used as collateral to borrow from some other bank, then the bank that lends the money, uses the promissory note as collateral to borrow from some other bank, etc., then watch this:

(1) Customer invests $100,000 with MFing Global. Money is put in segregated customer account.

(2) Customer instructs broker to buy $50,000 long silver on the CME. Broker initiates long position.

(3) $50,000 sits in account, with interest accruing to broker.

(4) Delivery is not taken, and instead, the future position is closed out by customer, with shortfall or gain being credited or debited from customer account. Customer, if a gain, shows gain on paper account; if loss, shows loss on paper account.

So far so good, right?

But what is stopping the broker from hypothecating the customer funds and using all of it to go short at the opportune time, all at once, in other words, a smash down?

Would that not be free money from the perspective of the broker? Would this not also explain the huge beatdowns at options expiry? Would this not also explain how the broker can make huge money with no balance sheet questions from regulators (since the customer funds that the broker hypothecated would be treated like a customer investment, and thus, not on the balance sheet). Would this allow for the broker to clean up, since there would be huge selling pressure applied at once, when the broker places the huge sell order, thus cratering the market, and making the long position a loser? So, the broker cleans up, but the customer gets screwed. Am I missing something?

Bay of Pigs
Dec 13, 2011 - 8:52pm


Why the fuck would you sell now? Have you not learned a thing around here? Never sell into a down draft like this. Worse thing you could ever do.

Gold and silver will rise above $1920 and $48, and go much higher than that in due time. Hang on to everything you have. Don't sell your insurance.

Bay of Pigs
Dec 13, 2011 - 9:00pm


As usual, you raise a very good question. They could have done that. Bear Stearns comes to mind.

I thought the SEC and CFTC were supposed to keep an eye on this sort of thing?

Dec 13, 2011 - 9:03pm


Sounds like a logical paper trail. But they could make more if they just spent the $100,000 on the day they received it. Bet the whole amount at 100X on the way that they will drive the markets. Lots of float and a public thinking that the numbers on their quarterly is safe as gold.

Dec 13, 2011 - 9:12pm

Riddle me this... When faced

Riddle me this...

When faced with a situation like this, where central bankers usually need to print to inflate their way out or face the collapse, they always print.

But in a global systemic failure of the debt based economy and monetary system, where they know the GLOBAL system will collapse no matter what they do, won't they just do whatever they can to salvage what is salvageable? Won't they burn as much fiat and as many mom and pop accounts as possible to stall the inevitable collapse and buy gold?

I think they will print if they have to, but otherwise, all they really care about is getting through one more day so central banks can buy gold. Fixing things isn't their focus. Printing our way out of this isn't their focus. Just buying one more day to stack cheap gold is everything and they will impoverish anyone and any nation to do so.

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