Santa Week

Mon, Dec 19, 2011 - 10:20am

And this time I'm talking about the real thing, not General Jim in Connecticut. Let's get the week started on the right foot by sending a little cheer to our Canadian turdites.

Bob and Doug McKenzie - 12 Days of (Canadian) Christmas

Just a quick update this morning as not much has changed since Friday. In gold, it's quite clear that The Forces of Darkness and Evil would like to see gold stay under $1600 for a while longer. The CoT survey is tomorrow and it covers the period that begins with the beatdown day of last Wednesday. Though we clearly saw some bank short-covering late last week, something tells me that they'll want to cover more of their tracks before the close tomorrow. Therefore, let's see if they hold gold down for most of the day today before relenting. Tomorrow could/should be a "Happy Tuesday" as the EE covers and new spec buyers join the fray.

Silver seems to be fighting a different battle. It seems to me that margins are now so high that a great deal of spec long buying has been removed from the market. Well, maybe not "removed". Let's just say that with margins so high, you can get a much bigger bang for your buck by playing in other sandboxes. This lack of spec buyers is affecting momentum and is making it very difficult for silver to sustain a rally. Uncle Ted is almost screaming about how bullish the CoT picture is in silver and I'm sure he's right. He's studied the silver market a lot longer than I have. However, without buyers, silver isn't going to be heading anywhere very quickly. I fear that silver is simply going to churn along with a negative bias for a while as JPM attempts to extricate themselves from their short position that, sooner or later, the CFTC might actually force them to lessen. I still like the idea that silver found a pretty good bottom last week but, at the end of the day, that doesn't mean much. Silver must be watched closely for further weakness. Hopefully, it holds the 28.60-80 area today and then finally rebounds through $30 tomorrow or later this week.

ZH has a couple of stories that merit your attention. First, this article has some interesting technical information:

Next, you should probably read this but I have to admit, I saw the title and thought: Well, duh. What's next, a TungstenmanSachs research report verifying that the iphone has killed the Blackberry? How about a lengthy missive on whether or not asparagus makes your piss stink?

And lastly, a moment of silence for one of the world's last, remaining Stalinist dictators. Nah, screw that. The little dwarf tyrant is dead and the world is better off without him. There will be, however, some geo-political repercussions, summarized here by the media arm of The Mossad:

By the way, debka also reported over the weekend that Turkish leader, Erdogan, is suffering from colorectal cancer. Not sure how that might affect the MENA calculus but, if true, it's certainly an interesting development.

OK, that's all for now. I'll have more for you later today. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 20, 2011 - 12:28pm

RE: The Hoarder's Oath

Revaluation of currencies throws a wrench into the equation. Another thought to chew on...

The book Aftershock predicts that after the last two bubbles of our bubble economy burst, the USD and treasuries (the loss of confidence mentioned above), folks will flee to gold, creating the biggest, baddest bubble ever. Take your wildest bubble induced gold price and multiply it times hyperinflation or revaluation. Wooo, its gonna be a doozy. I'm glad I'm part of the minority, buying PMs now. Who said, If you don't buy gold at 1,500, you will at 3,000.

I am stacking PMs to get my family through the crisis, along with any other tangible assets we may need (food, water, tools, seeds...). IF I have any PMs to sell into the bubble, I will call bubble when 1) they list gold prices on the news along with the Dow, and 2) everyone in the lunch room at work is talking about the coins they bought that week.

Dec 20, 2011 - 12:22pm

Hypothecation and shorting

Hypothecation and shorting. As investors reduce positions for the holidays they are reducing or eliminating margin. As we have learned from MF Global, reduced margin means reduced funds available for things like borrowing and lending shares. Then other hedgies decide to chase away even more shorts by squeezing them

So therefore shorting over the holidays have been a losing trade. The things you learn about how the real game is played.

Dec 20, 2011 - 11:28am

The Hoarder's Oath

" I, Monedas (fill in your own name here, Shill !), hereby oath to not sell any physical silver until the LCS spot price reaches $200 per trounce ! Furthermore, I will only sell one or two trounces at that time to party a little and donate ! Monedas 2011 Comedy Jihad Travel Day Ciao 4 Niao !

I'd be careful of a hold forever approach. PMs are clearly the way to go up to a collapse and a revaluation of gold and devaluation of the currency, but then what? Two of the best years in stock market history occurred after they devalued in 1933 and 1934. Should we switch out to stocks at that time and ride the wave?

I counsel caution. Devaluations don't usually occur all at once. If you swap out to paper, you are likely to get swept up in subsequent bouts of devaluations, because that's what they have done in the past (1930s) and there's no precedent for a collapse that is this big. Bernanke and company are likely to feel their way along and drive gold higher and print more paper as needed. That being said, a devaluation and the printing that will accompany it will literally rocket the stock market to the sky (Weimar Oct. 1922-Oct. 1923, stock market appreciation 27x).

The question is, will gold price appreciation be all front loaded at the time of the announcement of the revaluation and the printing? If so, switching into stocks is wise, but only if you ignore the chances of a systemic collapse or the probability that the paper stock appreciation will still constitute a loss in buying power. Those are very big risks.

All in all, the smart move seems to be to keep most of my PMs throughout the duration of the crisis and only put a small portion of my hoard towards picking up bargains after the crisis.

Dec 20, 2011 - 11:22am


Dying of Money

Lessons of the Great German and American Inflations

@ Daystar,Breaks Loose. Yep, all of your predictions are in the Thunder Road report. All of you favorite conspiracy theories tied together: war, PM price suppresion, financial Armageddon, WOCU (World Currency), FEMA camps, Patriot act, NDAA, you name it.

Eric Original
Dec 20, 2011 - 10:42am

new thread

new thread

Dec 20, 2011 - 10:23am
Dec 20, 2011 - 10:22am
Dec 20, 2011 - 10:07am

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

Dec 20, 2011 - 10:00am
Dec 20, 2011 - 9:32am

3 year LTRO pushes up PMs

Looks like Europe's latest back door QE wheeze, the 3 year LTRO (don't ask) is going down better than expected. Euro spiking, $ dipping, PMs rising.

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8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
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Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
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Key Economic Events Week of 7/27

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Key Economic Events Week of 7/13

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7/16 8:30 ET Retail Sales and Philly Fed
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Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
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