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 - 9:13pm
Dec 13, 2011 - 9:16pm

Shnoz too funny man...

Shnoz too funny man...

Dec 13, 2011 - 9:19pm

So here we are one year to

So here we are one year to the day if you will and we have an 80.30 DXY. We know TPTB hands are strong across all markets, the big question is how precious is the market to them, now that they have pilferaged the world and our National Treasury as well.

TPTB have lied, cheated, committed fraud in broad daylight, stole customer funds and then cannot explain with a strait face where the $ Billions are, yes Billions folks.

So this just goes away with a slap on the wrist? Is this what our America has come to where theft is legal if you have a rank and a double figure Billion dollar savings account, that our actual Laws are for the little people only? Really.

Our Politicians are accessories to these crimes, Congress then passes laws for you and I ( the little people )too abide by after the crimes have already been committed many from within.

The rot which is the global economy has reached what I call Maggot stage.

It will get worse, before it gets worse, either way its not going to be pretty or peaceful.


Dec 13, 2011 - 9:20pm

Aurum, TDV is wrong

Obama repealed that part of the bill back in April, TDV's link you have is from 2010.

aurum argentumsilverbonz
Dec 13, 2011 - 9:26pm

Thanks bonz

I just got an email update from TDV that their email from an hour ago was incorrect.

But I still worry how the govt. will begin policies to cut the knees out from under gold owners. But would those possible policies undercut BOS?

Dec 13, 2011 - 9:26pm

@GSFL: strange trades

What broker are you using, and what did you use to confirm trades were happening under your buy limits?

Google "ECNs" and "trade execution" and "order routing" and suchlike and you will get an education.

In summary: your buy order, when placed, first hits your broker. They may decide to do an "internal cross" against sell orders they have from other clients. They have any of several ECNs and exchanges they can send your order to if they don't do an internal cross. More sophisticated trading platforms will allow you to specify order routing explicitly. Once your order has been routed to a particular exchange, trades may occur on the same ticker on a different exchange/ECN at prices that you think should cause your bid to match an offer, but your order is sitting at an exchange with no liquidity, say. Lots of crap can happen. I have sat there with two different trading platforms open and seen myself get ripped off for a penny or two per trade. I know that some games were being played on TD today, because I saw the evidence on the one-minute candle charts (spikes up or down well outside trading ranges, lasting for milliseconds), and then you reload the chart and poof they are gone. No evidence of these spikes on Interactive Brokers, though. Someone on Scotttrade was complaining of the same thing, the "spikes".

I think they are "hypothecated orders" or some such thing.

Best answer is to go with a broker with good execution.

Dec 13, 2011 - 9:27pm

pforth and zenith

Very sorry to hear about your trading experiences. This is a repost of mine that you might consider. zenith for all intents and purposes PHYS and PSLV are trading vehicles even though they have bullion that backs them up, so the following I think applies.

Trading is a very active process, especially now, as one cannot rely only on fundamentals. Because as you have observed the losses over time will eat up whatever gains you have made. This is far less with holding bullion but even there the timing of one's purchases and exits matter. Mike Maloney refers to wealth cycles, the entry and exit of commodities/equities is very important. There will come time when even the precious metals will not be worth holding, though that is still some time away.

Jesse Livermore: wrt trading. First he said you must always return to fundamentals to stabilize your primary strategy ie. a bull or bear market. But then he went on to say that he attributed a good deal of his success to his ability to "read the tape".

The point is that depending on the fundamentals one has to take sharp and decisively different directions and then superimpose their ability to "read the tape" for short term calls.

David Rosenberg says that in a bear market, one must take profits on rallies every time. Buy and hold is profitable obviously in bull markets.

Now we all know that precious metals are in a bull market, but the general market is a bear. Currently pm equities are moving with the general market, so gains have to be taken every time. Until there is decoupling of not only precious metals, but their respective miners, one must trade in a bear market mode. The BIG question for those trading in metal markets is when the decoupling will take place. Of course, those like Turk, Embry, Sprott have been singing the praises of miners for months now, and have been wrong, because theirs is a chorus about physical, not miners and the bear market cycle.

My guess is that this decoupling will only happen when there has been a big market correction, which I believe will happen in the next few months, possibly calculated to influence 2012 elections. And that rests on whether Obama is scheduled to win or not. Decisions are made in advance and then events are digested accordingly through MSM to support the precalculated strategy.

Dr Durden
Dec 13, 2011 - 9:29pm

On days like today

Turd should go back and dig up old blog posts from the May 1 smackdown, those days in Aug and Sept when gold whipsawed back and forth by $100, and then the pre Halloween $300 waterfall. Why?

Just to remind everyone of the new "normal" that Santa and Armstrong told us would be coming.

To relive all those top and bottom calling failures.

To realize that, although algo's might be doing the trades, this is a human endeavor through and through.

If you haven't puked yet and are on the verge, go ahead. Purge. Sell it all. We should have a Classified section here. Hell, I'll buy every oz you got. Do you really think that it's going to be smooth as a baby's ass in 2012?? It's too late, the train has left the station...

Dec 13, 2011 - 9:33pm

Cheney Calls for Air Strike

Cheney Calls for Air Strike on Iran Over Captured Drone

It is the first ever call for an air strike over a captured drone, former Vice President Dick Cheney said on Monday that President Barack Obama should have ordered an “air strike” on Iran..

“The right response to that would have been to go in immediately after it had gone down and destroy it,” Cheney told CNN’s Erin Burnett. “You can do that from the air. You can do that with a quick air strike, and in effect make it impossible for them to benefit from having captured that drone.”

“I was told that the president had three options on his desk. He rejected all of them,” the former vice president added.

“They all involved sending somebody in to try to recover it, or if you can’t do that, admittedly that would be a difficult operation, you certainly could have gone in and destroyed it on the ground with an air strike.”

Dec 13, 2011 - 9:47pm

@Shaz RE: Taxes

The income tax collected is not used to pay for any government services, it's used to pay the interest on money we borrowed from the fed to fund those services. The IRS is merely the collections agency for the federal reserve.

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Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
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Key Economic Events Week of 11/4

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11/8 10:00 ET Consumer Sentiment
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Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
11/1 9:45 ET Markit Manu PMI
1/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
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10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
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9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
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9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

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