The Battle Royale Begins

Thu, Feb 23, 2012 - 3:55pm

Let's get it on!!!


If you think that gold has come too far, too fast, check out these charts that I lifted from Trader Dan. If gold is almost back to the all-time highs in every other major currency, why would you think that it's not about to make the same move in dollar terms?

This next chart is a 15-minute March silver. I post it for instructional and educational purposes. I mention quite often the old adage of "what was support becomes resistance and vice versa". This chart shows a classic breakout pattern. Note that, overnight in London, silver surged and finally broke convincingly through $34.40. It then drifted lower until it fell back to 34.45. That proved to be a successful test of 34.40 as support and, from there, silver exploded to the upside.

And we absolutely have to talk about crude. Now that 103.50 and 105 are in the rearview mirror, $114-115 looks inevitable. Not only does this mean $4.00 gasoline in the U.S. but surging crude will continue to drag the PMs higher along with it.$175_-_$250.html

Lastly, a few words on the continuing surge in Open Interest on the Comex. Recall that yesterday gold had a massive, $25 late-day surge while silver struggled to move higher. After considering these moves, I expected OI to contract some in silver as positions were closed out ahead of first notice day but, not necessarily, put right back on in May12 or July12. For gold, I had convinced myself that yesterday's surge was a short-covering event. Therefore, I expected total gold OI to be flat to up just a little. Boy, was I wrong!

The March12 OI fell from 29,215 to 24,966, a drop of 4,249. However, the May12 rose from 36,491 to 41,618 for a gain of 5,127. The question (which we can't answer) is how many Marches were rolled into May? If the entire 4,249 was rolled, then we picked up about 900 new long and short positions for May. Interestingly, we also lost 1,200 contracts in Dec12 but gained 800 contracts in July12. What the heck is going on here???

Anyway, with all that movement, I find it impossible to believe that the 4,429 number was a gross number. It had to be net. What do I mean? In simplest terms, let's say that the real amount of "rolled" Marches was 5,249. This would mean we actually picked up 1,000 brand new March longs for a net reduction of 4,429 OI. See what I mean? OK, maybe it wasn't 1,000 new March longs but it might have been 500. For all we know, maybe it was 2,000? What I'm saying is: There seems to continue to be very odd and unusual activity around the Comex vaults and the delivery process. Importantly, though, whether there is or not is not my primary concern. The main thing is the continued growth of total OI, to levels not seen since pre-MFG. This activity and interest is just the spark silver will need to push it higher after the conclusion of The Battle Royale.

The gold OI is equally significant but not as thought-provoking since we are still 5 weeks away from first notice for the April12 contract. Yesterday, on the late session surge, we saw total OI grow by another 9,200 contracts and, within that number, the April12 grew by 6,100. This is powerful and very significant. For the two trading days of Tuesday and Wednesday, gold surged over $45 and OI grew by an amazing 26,000 contracts or about 6%! Remarkable!! This is liquidity and liquidity drives markets. Expect volatility but, right now, there is no reason NOT to expect gold to win its Battle Royale and then quickly surge to $1900+.

I want to post this again, too, just in case you haven't seen it yet. I saw this late last Friday on KWN and made note of it. The action so far this week has certainly given it added credence. Note that Egon states this:

“Short-term the consolidation is finishing here. We could see a move higher beginning next week. Looking at our proprietary cycle system, that move could continue until the end of March and this would be a strong move before we had any correction.”
I would also add that I expect the gold shares to move faster than gold to the upside.”

Lastly, our pal Mike Krieger has penned another great email newsletter. It's reprinted below for your convenience. You should read it when you have a moment or two. (Please be advised. The opinions listed below do not necessarily reflect those of The Turd or TurdMediaManagement. Reader discretion is advised.) TF

It's like a ride in an amusement park and when you go on it you think it's real, because that's how powerful our minds are. The ride goes up and down, round and round, it has thrills and chills, and it's very brightly colored and it's very loud. And it's fun for a while. Some have been on the ride a long time and they begin to question: Is this real, or is this just a ride? And others have remembered and they come back to us and they say: Hey, don't be afraid ever, because this is just a ride. And we kill those people.
Shut him up, I've got a lot invested in this ride, shut him up. Look at my furrows of worry, my big bank account, and my family. This has to be real. It's just a ride, but we always kill those good guys who try to tell us that and let the demons run amok. But it doesn't matter because it's just a ride and we can change it anytime we want. No job, no savings money, just a choice right now between fear and love.

- Bill Hicks 1961-1994 (great quick little clip here

The Playbook
It was always going to be a scary thing when the American Empire decided to turn its sights inward. Americans like to look at “shock and awe” and cheer. They think murder is fun and games. They think we are winning when we lose a little bit more with every new bomb we hurl. They think we are killing “the enemy” when in reality we are killing ourselves. The truth is that all the shadow government in the U.S. (you know the unelected guys that never leave and tell the elected guys what to do) has been doing is what corrupt elites have been doing since the beginning of time. Protecting their commercial interests. While many here in the United States have been lulled back into another complete coma state by the garbage that spews from the television set and a stock market that marches higher every day with no volatility, the shadow government is using this time wisely. They are passing laws such as the NDAA, which as we know allows for the indefinite detention of American citizens without trial. In case you haven’t seen some of the commentary by several Senators on the matter take a quick look for yourself Joseph Lieberman is one of the most despicable and downright evil Americans to have ever “served” this country.

Beyond the NDAA, TPTB are rushing to silence the thing they fear the most. The internet. As I have said for years now, the internet is the game changer and the reason I believe TPTB cannot win this fight using the same strategies that have been used by immoral control freak elites since the dawn of human civilization. This is because the “playbook” has been exposed. There are many plays in this book, and over the years I have outlined many of them, but the two that they like the most and the ones we need to be most aware of are. 1) Divide and conquer. 2) Problem, reaction, solution.

First to divide and conquer. This is employed mostly within the U.S. on geographic lines. These are represented by the “coasts” and the “heartland.” These different segments of the population are then divided into different political parties, the Republicans (red team) and the Democrats (blue team). As I have demonstrated time and time again, and as is readily apparent if you are paying any attention whatsoever, these particles are identical on all of the major issues although they talk a big game during the election season. As of late, people have started to realize that on the big issues they are the same so here is where the all important “social issues” come into play. TPTB could not be happier than Santorum is doing well in the Republican primaries. Why? He is a big government Republican just like that last thug we had in the White House before the current banker puppet. Santorum is extremely divisive. They LOVE that. He gets people riled up on social issues which then shoves the people reluctantly back into their respective teams like good little proles. Think about it. Santorum’s big issue is birth control. I mean really? Anyone that falls for this game gets what they deserve I suppose, but my role is to show you the game. Remember, it is Ron Paul that doesn’t fit into any mold. Ron Paul is someone that unites rather than divides. He reminds America that we are one culture based on one Constitution (remember Justice Ginsberg publicly stated her disdain for it recently This is why they hate him. This is all very intentional. Speaking of which, here is a great summary of politics in America today It is no surprise that shortly after he aired this segment his show was canceled. 1.2 million views already though. Not too shabby.

So now onto Problem, Reaction, Solution. This was employed in the U.S. in 2008 to consolidate power at the top by bailing out the elites and bankrupting the rest of us. People instinctively know this, hence the emergence of the Tea Party movement and then OWS this summer (notice how they used divide and conquer tactics on the population as soon as each of these movements came onto the scene). So as we know back in 2008 the “problem” was financial crisis, the “reaction” was plunging financial markets and total fear on behalf of the population, while the “solution” was bankster bailouts and the a further consolidation at the top. The Federal Reserve now has more power and the Too Big To Fail banks are a bigger part of the financial system than they were before. How’s that for a solution!

In any event, they are not done with this playbook by any means. We need to look to Europe now to see what TPTB have in store for us. This is the consummate problem, reaction, solution game being played for all the marbles. First, you get the problem “spiking interest rates for the peripheral countries.” Then the “reaction,” financial panic and fear. Finally the “solution.” The placement of unelected technocrats as the leaders of Greece and Italy with ties to all the power structure’s institution such as the Trilateral Commission, the Bilderberg group and of course Goldman Sachs. It is like a coup that takes the shadow government from the shadows and puts them in your face. The reason that this is so key is because we are next. They don’t want to roll up everything at once. If they can get Europe safely consolidated then they will move here. That is when interest rates in the U.S. will spike (problem), and we get panic (reaction) and then the solution (bankster technocratic committees in charge and the IMF to the rescue, ie loss of sovereignty). This is the plan and I see it as clear as day.

The Internet
So back to the internet. Just because what I outlined above is the plan it doesn’t mean it will succeed. Although many will disagree, I am 100% convinced that TPTB are way behind schedule and experiencing considerably more problems than they thought in implementing their agenda. I also think the internet is the main reason for their issues. The internet is the printing press on steroids. In fact, it may be the most significant event to have ever happened in the evolution of humanity as a species in the last 5,000 years. What has been done since the days of Babylon is tiny groups of elites have been able to control populations and dominate them via the “playbook.” The other thing they use is advanced technology that they do not share with the public, but that is another topic entirely. In any event, the internet allows us to connect like never before and expose their tactics and criminality in a way that was unimaginable in prior eras. Humanity is using it to connect with one another and we are saying to each other: “hey, my government tells me you are my enemy and I should hate you but you are just like me. You have fears and dreams and all you want is to be happy and live a good life. Maybe my government and your government are actually the problem. We shouldn’t hate each other. We should get rid of the bastards manipulating us.”

That is why they want to censor the internet, but it is too late. The cat is out of the bag and they have lost. However, they will keep trying until they kill themselves because they are not used to losing. Did you catch the recent article from the Wall Street Journal about how the UN is trying take over monitoring the internet. Yep, it’s all right here.

Coming to America: 30,000 Drones
Did you know that a bill passed two weeks ago that allocates $63 billion to the FAA to increase the existence of drones operating in U.S. airspace to 30,000 by the end of the decade. Here is an article on it To all those that say things are “getting better” I say watch what they do not what they say. What the shadow government is doing is scrambling like little rodents to get the police state fully in place for the inevitable unraveling of this sick world they have created and to protect the fruits of the theft they have committed. Watch what they do not what they say. Watch closely.

Quick Market Commentary
I actually can’t believe the nonsense I am hearing lately from people in the financial markets lately. People that know better. People are definitely drinking the kool-aid again in this business. Now I am not saying that means a stock market crash is imminent since they can create all the counterfeit fiat money they want and goose things further. What it does tell me is that something is coming. Could be a bond event. Could be a precious metals explosion. Could be a false flag terror attack followed by war with Iran. I don’t know, but something is coming that will wake people up violently and suddenly. Liquidity always makes people lose their heads because at the end of the day we are herd creatures. Take all of this how you want but I have noticed this change. Go back to sleep America.

31 inches in the last seven days up here in the mountains. I’ll be riding powder tomorrow.

Peace and wisdom,

About the Author

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Key Economic Events Week of 6/21

6/21 9:45 ET Goons Bullard and Kaplan
6/22 2:00 ET CGP on Capitol Hill
6/23 9:45 ET Markit flash PMIs for June
6/24 9:30 ET Durable Goods
6/24 9:30 ET Q1 GDP final guess
6/24 9:30 ET Goons Bostic and Harker
6/24 11:00 ET Goon Williams
6/24 1:00 ET Goon Bullard again
6/25 8:30 ET Personal Inc and Spending
6/25 8:30 ET Core PCE
6/25 10:00 ET UMich Consumer Sentiment

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