Well, it's BLSBS Friday once again. I could write another snappy missive regarding the bs and nonsense that is the latest monthly, wholly-manipulated government statistic but what would be the point? Instead, I thought you'd enjoy a video of Mrs F and I enjoying our coffee while listening to LIESman et al wax philosophic about the joys and wonders of delayed-reaction keynesianism.
Anyway, just read this and you'll get the real story:
The "market" for paper precious metal continues to be a joke. After having the audacity to trade up and through 1630 in the first hour of trading, gold was summarily crushed by the Forces of Darkness in the last 45 minutes or so. Whatever. The bad part is that I printed these charts an hour ago and now they're sort of obsolete. Sorry. I'd re-print them but my freaking printer just broke. UGH. It's going to be one of those days. Anyway, here are your charts.
First, here's an hourly gold. Again, gold rallied almost exactly to this line about an hour ago, only to be savagely attacked by the awaiting monkeys.
More significant are the daily and weekly charts. Here you can see that we are slowly making progress but now is still not the time to be extraordinarily bullish. When gold is finally allowed to clear 1640, I'll get interested. When gold then breaks back above 1700, I'll get wildly bullish.
At the risk of sounding like a broken record, silver continues to be actively suppressed. That said, let me state this clearly:
I am of the firm belief that the spike in April put the fear of God into the EE. They have manipulated the takedown ever since simply so that they can cover their massive short position and eventually transform it into a net long position. They are not yet finished with this project. We will be able to decipher when they are done by looking at the CoT reports and the charts.
Regarding the silver charts, you can clearly see a continuing desire to keep silver under $30. Why is $30 so important? A glance at these charts should tell you all you need to know.
Once silver breaks above the first downtrend line, confidence will rise that the forced "correction" is over and some spec money will begin returning to the pit. Breaking 30 will also set up the next stage, which would be a run toward $35 and the main, downtrend line that connects the highs of April with the highs of September. WHEN silver breaks back above that line, it's on! Until then, we can't be sure that the EE is ready to let it happen.
I must take a moment to update Pigatha, too. She is right back to the all-important 81.50 level this morning. Again, this level served to contain the rally last January. Will it do so again this January? Maybe. Since the euro makes up something like 55% of the POSX, further euro weakness will propel this index higher. As you can see, once through, 81.50, the next stop might be as high as 84.
Here are some items to add to your weekend reading list. First up, a 2012 look-ahead from Patrick Heller:
Next up, please take time to read this article from Jeff Nielsen. He covers in great detail one of the central theses of this site. Namely, that the Fed is actively stimulating the purchase of treasuries, through their primary dealers. The idea that there is currently no QE is absolute nonsense. The PDs are simply doing the covert dirty work of the Fed. Again, without the PD buying, where would rates be? Rates would have to rise dramatically from current levels to attract actual, organic, free market buying. The U.S. government debt service cost for fiscal 2011 was $454B. What would it cost to service service the debt if the 10-year rate was 5% instead of 2%? Would would it cost at 8%? Rates, therefore, cannot be allowed to rise as higher rates would only serve to accelerate the unraveling of The Great Ponzi.
Mr. Turk has weighed in on silver. He compares it to AAPL. I hate this comparison as it makes silver sound like some kind of fiat-based, wealth accumulation scam. However, his rationale and price targets jibe with mine, so, here you go:
I spoke with The Tech Team this week and we are beginning to build the site changes that I mentioned in the video earlier this week. The changes are designed to enhance the revenue of the site which will, in turn, allow me to offer significant new levels of content. I hope to have these changes in place by the end of the month and I will keep you posted in the progress and what I am thinking. In the meantime, do not forget that the only revenue that this site receives is from the advertisements. The generous Turdite donations help considerably and I am extremely grateful for them. However, please continue to give our sponsors your occasional attention.
Lastly, I discovered a few days ago that one of my all-time favorite bands had called it quits. (Well, actually, they're going to try to continue without one of the founders but it won't be the same.) I first discovered the BoDeans back when I was in college. They wrote rock-and-roll songs about love and angst and longing. I was immediately hooked. The guys tried for almost 30 years to gain a national following and they actually came close a couple of times. Now, they're just beaten down old farts like me. God bless you Kurt and Sammy. A heartfelt hank you for providing part of the soundtrack to my life.
Here are the boys back in 1989, almost making it to the big time:
And here they are toward the end. First, with Kenny Aronoff, the world's finest living rock drummer:
And, finally, here they are performing the closest thing they ever had to a "hit":
As I close, I see that The Cartel counter-attacks have stopped and the metals are rebounding. Good. They'll probably be rangebound for the rest of the day. Enjoy your weekend. Check back tomorrow for release of the latest TFMR podcast. I had some technical difficulties in recording it but I think you'll enjoy it regardless.