History Is Written By The Victors

Thu, Mar 15, 2012 - 11:51am

Yardwork can be cathartic. The sunshine, fresh air and freedom to think can provide you the necessary clarity.

We've been at this now for nearly a year and a half. My simple intention has always been to thwart the evil intent of The Cartels. When they manipulate and suppress price, it's easy to get discouraged and frightened. They want you to sell. They want you in paper. They want to perpetuate the system that grants them their power. I will not allow it. As long as I have this platform, I'm going to use it. And now is not the time for weakness, nor is it the time for obfuscation. We must be resolute and confident of our fate for we are on the right side of history.

First, you must understand that the Comex paper markets are now singularly populated with Cartel traders and HFT algos (WOPRs). Since the Comex is no longer a trusted and viable metal delivery platform, it has been reduced to a simple shell game where The Cartel hides the bean and shuffles it right before your eyes, occasionally letting you "win" but, ultimately, deceiving you into a big enough bet that, when they finally decide to end the game, you lose more than the winnings you'd previously accumulated. Only chumps and tourists are tricked into playing this "game" on the street. Don't be a chump. Your only "winning move" is to buy physical on every bout of paper price weakness. Take delivery and store it.

However, I recognize that we live in a world where, to a great extent, paper still sets the price of physical. So if we are to forecast impending floors, tops and surges in physical price, we must be able to anticipate when and where paper price will react. My first inclination, of course, is to check the charts. I thought I'd keep it simple today and just give you daily charts with RSIs. Note that in both cases, the metals are within the zone I have predicted for a bottom and the RSIs are close to a bottom, too. Combining the two, it is clear that we are very close to a bottom of this manufactured "correction", likely within a couple of days.

However, the charts alone cannot provide us with a high enough level of confidence to march forward with full confidence. As we go forward, the disconnect between the paper illusion and the physical reality will become more stark. Though paper metal will still be quoted by various media and other agents of disinformation, underlying demand for physical will continue to be the primary determinant of trend.

To that end, I've recently uncovered a valuable new source of information. You see, being "Turd" has its privileges. Chief among them is the truly global list of contacts I have made. (Frankly it's astonishing and somewhat surreal. I'm even chuckling to myself as I type this.) In reaching out to these contacts, one connection led me to another, which led me to another, which led me someone whose insight and experience in the physical arena is invaluable. Let me assure you: He is not a figment of my considerable imagination nor is he himself an agent of disinformation. He is a real person and someone I feel that we all can trust. Let's simply call him "Winston".

In getting to know Winston, I feel that he has some great, extra perspective to add to the analysis here. I'm sure that he won't chime in all that often...frankly I wouldn't presume to bother him that frequently. However, from time to time, I hope to tap his vast knowledge of the international spot and physical markets so that all of us in Turdville can benefit from his unique perspective.

As this relates to the current Cartel shenanigans, Winston has passed along the following:

  • He, like us, observed the nearly 600 tonnes of paper gold that was unloaded upon the paper gold "market" at the initiation of this manufactured event. A clear sign that another Cartel attack had begun.
  • The selling has now progressed to the point that new spec shorts are being added daily. As noted here, this can be seen in the daily OI reports and indicate that the end of the decline is near, probably within the next 2-3 days.
  • Strong demand for physical gold at current price levels prevents any significant, further decline and sets the stage for a rapid, short-covering rally to begin once the trend shifts back to short-term bullish.
  • Because, post MFG, The Comex is no longer seen as a safe conduit for physical delivery, almost all new open interest there is paper-based, HFT and Cartel trading. (Confirming what I mentioned above.)
  • The HFTs that are currently short will be "tripped" back into "long mode" when gold recrosses and closes above the 200-day moving average, currently near 1680. Therefore, above that point, we should see an acceleration to the upside.

So, let's relate all of this to everyone here in Turdville. If you're trading, the possibility for additional downside still exists, however, we are very close to a bottom and there is likely some fiat to be made during the early stages of the recovery. If you're stacking, take advantage of this temporary, paper-induced drop in price to add to your stack. It is unlikely that you'll see gold and silver at these levels again soon, if ever.

Have a great day and keep the faith. We will be the winners in this fight for we are on the right side of freedom. We will write the history when the new era dawns.


About the Author

turd [at] tfmetalsreport [dot] com ()


Dr G
Mar 15, 2012 - 11:54am


From the last thread:

Per ZH, the US (and UK) have agreed to release emergency oil reserves. Doesn't O'Bummer remember what happened last time he tried this? Prices back to where they were originally in less than 2 weeks.

Obvious that he is trying to win the election, oil prices be damned. I don't think he understands that PRICE is not a valid reason to use EMERGENCY oil supplies, which only TEMPORARILY change the price.


Turd, thanks for the post. Glad to hear Winston's knowledge will now in part be your knowledge.

Mar 15, 2012 - 11:54am


Sounds like Britain's wartime prime minister is saying buy. Might have to agree.

Mar 15, 2012 - 11:56am

thurd time thurd!

I only know one guy called Victor, but he is not a historian!

Be Prepared
Mar 15, 2012 - 12:00pm

Gold Investment Explosion - Ranting Andy....

Gold Investment Explosion

Many erroneously view gains in absolute terms, forgetting one’s financial standing is more relevant in relative terms to “competing” investors. For example, even when gold fell 30% in late 2008 (entirely due to the Cartel, I might add), it dramatically outperformed stocks, real estate, and ALL commodities. Not that investors strive for “less losses” – as opposed to “more gains” – but markets cannot be controlled, particularly whengovernment intervention is a key systemic factor.

PM investors have been put through sheer agony over the past decade, with manydestroyed by the Cartel and others – like myself –scarred but better for the experience. However, gold and silver prices have risen more than any asset class over this period, doing so while others – residential real estate, for example – actually declined. Thus, PM holders were rewarded for their mettle with the double jackpot of superior absoluteand relative returns.

Better yet, after twelve years of rising prices, PM fundamentals are stronger than ever, thanks to GLOBAL MONEY PRINTING rising faster than gold production AND a Cartel that has suppressed prices below market-clearing levels. Not to mention, those who survived this long have become STRONG HANDS – i.e., unlikely to sell under anycircumstance – particularly if they were wise enough to convert a significant portion of their PM “investments” into PHYSICAL gold and silver. Remember, PAPER gold and silver (GLD, SLV, futures, mining shares) are “investments” that fluctuate in value, while PHYSICAL bullion is “savings” that CANNOT be lost unless required to be sold for near-term financial obligations.

Once again, I want to note the secular nature of most investors’ thought processes, focusing solely on absolute price levels, ignoring countless, equally important factors. The first is the aforementioned relative returns, the second is real returns (adjusting for inflation), and finally, “seismic shifts” in global investment trends such as the movement out of PAPER assets and into REAL ITEMS OF VALUE – PHYSICAL gold and silver, ENERGY, and AGRICULTURAL PRODUCTS, to name a few.

Throughout history, politicians have always succumbed to the temptation of fiat currency, lured by rich, charismatic bankers that bribe them with campaign contributions and other perks in exchange for the monetary reigns. This is why we have seen a series of debt-fueled booms over the centuries, with the same inevitable result – exponential MONEY PRINTING, financial collapse, and hyperinflation.

Such busts occurred “microcosmically” in the 1930s and 1970s due to loose monetary policy (i.e., isolated to certain nations), but in both cases yielded dramatic increases in gold as a percentage of global assets, per the chart below. In 1932, gold prices were fixed at $20.67/oz, so its growth to 20% of ALL GLOBAL ASSETS was due to the aforementioned “relative effect” – i.e., gold stood still while everything else crashed; while in the late 1970s, gold and mining shares surged while other assets stagnated, particularly in real terms as inflation was a major factor. Remember, in the 1930s, the U.S. and other nations were still on gold standards – thus, inflation was not an issue – as opposed to the 1970s, when all gold standards had been effectively abandoned.

<Rest of the Article>

Be Prepared
Mar 15, 2012 - 12:02pm

Events Moving at an Accelerating Pace

Events Moving at an Accelerating Pace Towards the Great Collapse

Little has changed in the basic outlook. The U.S. economic and systemic-solvency crises of the last five years continue to deteriorate. Yet they remain just the precursors to the coming Great Collapse: a hyperinflationary great depression. The unfolding circumstance will encompass a complete loss in the purchasing power of the U.S. dollar; a collapse in the normal stream of U.S. commercial and economic activity; a collapse in the U.S. financial system, as we know it; and a likely realignment of the U.S. political environment. Outside timing on the hyperinflation remains 2014, but events of the last year have accelerated the movement towards this ultimate dollar catastrophe. Following Mr. Bernanke’s extraordinary efforts to debase the U.S. currency in late-2010, the dollar had lost its traditional safe-haven status by early-2011. Whatever global confidence had remained behind the U.S dollar was lost in July and August. That was in response to the lack of political will—shown by those who control the White House and Congress—to address the long-range insolvency of the U.S. government, and as a result of the later credit-rating downgrade to U.S. Treasury debt.

Those latter circumstances triggered something of dollar selling panic, particularly as reflected in the corresponding buying of gold and Swiss francs, but various interventions, misdirection and manipulations helped to quell the currency disorders. Still, many financial markets were left rocking with the aftershocks of a major shift in the global view of the U.S. dollar.

The economy has underperformed and likely will continue to underperform consensus forecasts by a significant margin. In turn, weaker-than-expected economic growth will mean significantly worse-than-expected federal budget deficits, Treasury funding needs and banking-system solvency conditions.

With the U.S. election just nine months off, political pressures will mount to favor fiscal stimulus measures instead of restraint. The Fed should be forced to provide new “easing” in an effort to continue propping the banking system (the explanation will be an effort to boost the economy). Given the Treasury’s funding needs, the easing likely will in the form of renewed buying of U.S. Treasuries, with the Fed remaining lender of last resort there. Consistent with the precedent set in 2008, the Fed, and likely the Treasury, also will remain in place to do whatever is needed, at whatever cost, to prevent systemic collapse in the United States. All of these actions, though, have costs in terms of higher domestic inflation and intensified dollar debasement

The U.S. dollar remains highly vulnerable to massive, panicked selling, at any time, with little or no warning. The next round of Federal Reserve or U.S. government easing or stimulus could be the proximal trigger for such a currency panic and/or for strong efforts to strip the U.S. currency of its global reserve currency status.

As the advance squalls from this great financial tempest come ashore, the government could be expected to launch a variety of efforts at forestalling the hyperinflation’s landfall, but such efforts will buy little time and ultimately will fail in preventing the dollar’s collapse. The timing of the early days—the onset—of full-blown hyperinflation likely will be coincident with a broad global rejection of the U.S. dollar, which, again, could happen at any time.

With no viable or politically-practical way of balancing U.S. fiscal conditions and avoiding this financial economic Armageddon, the best action that individuals can take at this point remains to protect themselves, both as to meeting short-range survival needs as well as to preserving current wealth and assets over the longer term. Efforts there, respectively, would encompass building a store of key consumables, such as food and water, and moving assets into physical precious metals and outside of the U.S. dollar.

<Rest of the Article>
Mar 15, 2012 - 12:06pm

Economic Hard-Drive Erased

Thank-you Mr Turd.

The true laws of "sound money" will ultimately prevail. It is imperative that we all continue with the physical stacking plan. The digital finance world can be wiped out as rapidly as a hard-drive is erased.

Mar 15, 2012 - 12:07pm
Mar 15, 2012 - 12:13pm

Thanks Turd

Very intriguing indeed. I look forward to what "Winston" might have to say.

My gut feeling is that there are more then a few "names" on here who know exactly what's going on in certain segments of the market and speak from experience and with honorable intentions.

Stay tuned.

Mar 15, 2012 - 12:16pm

Greece / IMF

I'm thinking along the lines of what TF had to say recently....Greece is not out of the woods by any stretch. An emergency IMF loan???

IMF Approves 28 Billion-Euro Loan for Greece

By Sandrine Rastello - Mar 15, 2012 11:59 AM ET

The International Monetary Fund approved a four-year, 28 billion-euro ($36.6 billion) loan for Greece as part of a second bailout with euro-area countries.

The Washington-based IMF said 1.65 billion euros will immediately be disbursed under the new arrangement.


Animal Sacrifice
Mar 15, 2012 - 12:17pm



Mar 15, 2012 - 12:19pm




I realize this is Turd's Metal Report, but this information is extremely important as the SHALE GAS INDUSTRY is GROSSLY OVER-ESTIMATED its value and abundance. This is the perfect subject to discuss at a time when Gold & Silver are being manipulated lower while the majority of stocks and bonds are kept afloat in the biggest Ponzi Scheme ever. Every day I turn on the computer, I see another example of what I term THE GREAT SHALE GAS SCAM. Before I get into the negative aspects of the Grand Hype of Shale Gas, I would like to state some positives.

Shale gas is a good source of natural gas and another source of energy for the United States and the rest of the world. It is cleaner burning than oil and coal. Shale gas will continue to supply a form of needed energy to the market. That being said… let’s get to the BAD side of Shale Gas. Most of the information below comes from several engineers and geologists work on THEOILDRUM.com.


For some reason, there is a belief that the United States has over 100 years worth of Shale Gas. This is an accounting trick. When the US Govt stated that there were 100 years of natural gas reserves they were taking the total 2,170 Trillion cubic feet (Tcf) of all three categories of technically recoverable resources. These three are identified as probable, possible and speculative. If we take this total figure of 2,170 Tcf and divide it by the total annual usage of 24 Tcf we get about 90-100 years.

Unfortunately, this is pure hype at its finest. The more realistic amount of reserves are found in the Committee’s probable mean resource:

Here we can see that the probable reserve is half the 550 Tcf or 275 Tcf. This turns out to be an 11.5 year supply. When we add the 273 Tcf of proved dry gas reserves we have an additional 11.5 years… or a total of 23 year supply. Furthermore these proved reserves also include undeveloped reserves that have not been drilled yet. We are seeing that as Shale Gas fields are drilled, the best fields are found in the beginning. There are SWEET SPOTS and there are also DRY SPOTS found in places that should have been reserves. So… at the most we have 23 years – but realistically it may be more like 15-18 years.


The Barnett Shale field (one of the first drilled to such a large extent) is already showing signs of peaking even though 1,403 new wells were drilled last year. If we look at the graph above we can see that a total of 10.7 Tcf of cumulative gas production has already been extracted.

Another example of a typical decline of a shale gas field is the Woodford Shale. The Woodford Shale Field has declined 27% in shale gas production even though 42 wells were added in the last year. Here we can see that the Woodford Shale Field produced a total of 1.1 Tcf of gas production to date.


As I mentioned, Porter Stansberry as well as many others have stated that Shale Gas will be the new ENERGY PARADIGM. This investment propaganda has brought a great deal of money into shale gas industry. In a Ponzi scheme, it takes more and more money to keep the system going. In the beginning of this new shale gas revolution we had high gas production and decent gas prices. But, as time went by the price of natural gas fell and the high depletion rates of these wells became apparent. More wells had to be drilled faster and faster to keep production increasing.

I have mentioned the average decline rate in Shale Gas wells is upwards of 80% by the second year. This has had a negative effect on the change in annual decline rates. In 2000, the annual decline rate in the natural gas industry was 23%, but by 2011 it has increased to 32%. That means each year the industry has to find an additional 32% more gas just to keep production flat.

Below, we can see that the U.S. Natural Gas Industry has to replace 22 billion cubic feet per day (bcf/d) today, whereas it only had to find 12 bcf/d in 2001:

What is taking place in the Shale Gas Industry is typical of what occurs in a Ponzi scheme. Because of the high depletion rates of shale gas wells, more and more drilling has to take place just to keep production flat. We are witnessing a big increase in natural gas production in the United States, but this is not a sign of a long-term sustainable trend, but more like what a takes place during a GOLD RUSH – a great deal of initial productivity but a big drop off in just a few years.

The only way an industry can sustain itself is if it has continued POSITIVE CASH FLOW. This is taken from aeberman’s article from THEOILDRUM:

According to ARC Financial Research, $22 billion per quarter is needed to maintain domestic gas supply based on analysis of the 34 top U.S. publicly traded producers. Cash flow for those companies is $12 billion per quarter so there is a $10 billion quarterly cash flow deficit (Exhibit 3). The important factor here is that on a whole there are no retained earnings, and historically growth stems from retained earnings. Without retained earnings, companies must borrow money or sell assets into joint venture agreements to raise cash in order to drill.

With the low price of natural gas, the Shale Gas Industry is losing $10 billion a quarter. This is not a sustainable business model. The industry is going to have to curtail drilling to allow gas prices to rise. Unfortunately, a great deal of shareholders and investors have lost a great deal and it may be interesting to see if they come back into an industry that has screwed over many.

This will be discussed in PART 2 in the post below.

Larry L Dr G
Mar 15, 2012 - 12:22pm


Obvious that he is trying to win the election, oil prices be damned. I don't think he understands that PRICE is not a valid reason to use EMERGENCY oil supplies, which only TEMPORARILY change the price.

Obottom does understand, he is doing his best to destroy our country's fundamentals plain and simple. Any questions?

He and his goons are are a search and destroy mission. This is so the US Government looks like the one where salvation will come from to save us all from this destruction...circle reasoning.

Mar 15, 2012 - 12:29pm

GS and JPM whistleblower

I was hoping to follow up on last nights postings on the whistleblowers from page 6 comments. I was not able to bring it up all morning. Perhaps someone doesn't want discussions on such explosive topics. All the more reason to keep up the discussion.

Mar 15, 2012 - 12:29pm

Any Indian Connection Turd?

Hi Turd,

This Indian Follower of yours has been a Loyal Turdite for the past 1 year...hmm..let's say since May 1st 2011..the Great Raid......before that i was a dumbass trader..i ain't ashamed to admit it who believed that he knew everything..infact i hardly new anything...the raid compelled me to scour the net for answers ..i always believed that every movement has got a reason be it on the +ve or -ve.That was the day i got hold of all you guys including SANTA,TRADER DAN..GOD IS MERCIFUL....after reading your posts i feel satiated to the hilt...many a times you have answered my questions..including the "Debit Card stuff"...THANKS A LOT for your valuable insights TURD.

By the way do you have any Indian connections..i mean to get a viewpoint on Indian Bullion scenario??

Eric Original
Mar 15, 2012 - 12:30pm

Hello Animal Sac

LOng time no see, old friend.

Nice call on the platinum, BTW.

The Body
Mar 15, 2012 - 12:33pm

Various Atlas Shruggings


“People of means will keep exchanging the fake dollar for real money as long as they can. This is what resourceful individuals have always done when a national currency becomes so debased that its extinction becomes inevitable… the dollar is but a transient vapor that was born real money but after the creation of the FED became just another tool for creating money illusion and perverting resource allocation.”

- Distinguished Seeking Alpha Contributor: User353732

Either – Or

"It does not require a majority of the people to prevail, but rather an irate, tireless minority keen to set brush fires in people’s minds."

- Samuel Adams

A is A

"3 years ago, I swam down to the bottom of the Pacific Ocean where my store of wealth lay. I looked at the USD blankly. I puzzled over the fiat. I tilted my head at the fiat. I grimaced at it. I realized at that moment that the stack of USD had absolutely no meaning to me anymore."

- The Body

Air Garcia
Mar 15, 2012 - 12:36pm

I'm out of ammo.

It is unlikely that you'll see gold and silver at these levels again soon, if ever.

Heard that at 49, 45, 40, 38, 37, 36, 35, 34, 33, 32.80, 32.20.

I'm out of ammo.

-Jerry G.

Mar 15, 2012 - 12:36pm

more energy

Turd you used to post crude charts more often, reading the comments here I see I am not the only one to draw a parallel between energy prices and metals, specifically gold. Oil is one of the few things in the world you can actually buy directly with Gold. The price of oil cannot be allowed to rise during an election year, therefore the price of gold must be suppressed.

Human population continues to increase at an exponential rate, but energy increases at a linear rate. I just keep coming back to oil as the catalyst for price moves in metals, more so than cartel short positions. Perhaps in a future post you might delve back into the energy sector once more if just for kicks? Does anyone doubt $5 a gallon gas is not coming soon? Not because of inflation, but increasing demand for energy.

Thanks Turd for all the energy you put into this site, I think I speak for many others that you are an insightful person with a good heart. You are still hall of fame material as far as I'm concerned.

Eric Original
Mar 15, 2012 - 12:37pm

Turd Said..

" Your only "winning move" is to buy physical on every bout of paper price weakness. Take delivery and store it."

Yes, lots of physical here, and more in recent days, but I'm also basically treating select miner shares the same way.

Eric Original
Mar 15, 2012 - 12:44pm

The Only Losing Move

The only losing move is to sell out on a beatdown.

All other moves, sell on a rally, buy on a rally, buy on a beatdown, all win. Either sooner or later, but they all win in the end.

The only way you screw yourself is to panic out on a beatdown.

Dr G
Mar 15, 2012 - 12:46pm

@AirGarcia, LOL, and true.

@AirGarcia, LOL, and true.

Mickey Larry L
Mar 15, 2012 - 12:46pm

@ Larry L re: Obama and adm

here is an alternative view.

perhaps Obama and his adm think they are smarter than they really are. They may be trying to do the "right" thing (right being subjective) but always reacting with the simple answer/solution. Oil price hi-drain spr (was it replenished after the last use of it).

The Obamacare cost issue might or might not be the same thing--a stupid mistake or not. They somehow kept the cost under the 1 tril milestone to get it thru congress--now what if they side 1.8 tril back then--how close would that have been then

simple rookie mistake or disingenuous?

IMO there have already been too many issues or problems to be coincidental.

But regardless , just look at the trend of debt growth her ein US, understand deficits are understated for many reasons and we just added 100 bil a month to deficits on obamacare, and what if interest rates saty up and go up further--how much more interest wil be paid.

Fortunately we can tax the hi income folks into oblivion. Or out of the country.

Mar 15, 2012 - 12:51pm

Stay tuned ~ Greece ~ More Breaking News

No story yet.

Breaking News

GREECE REMAINS IN SELECTIVE DEFAULT BY S&P It's getting interesting after the fact. That slow fuse appears to have lots of spark to it the longer it burns. How could a credit event and default happen and then Fitch upgrades Greece (after downgrading them days earlier) while the EU quickly approves a second bailout and then the IMF gives another emergency loan on top of it while at the same time S&P comes out and reaffirms their negative stance??? Clash of some financial titans behind the scene's sounds like it's underway. I wouldn't be surprised if it unravels once that fuse burns a little longer. Greece is a Euro money pit and they should probably just adopt the USD if they want a way out of it to some extent. It seems kind of obvious and it never gets mentioned. Why? Good call on all of this TF.
Mar 15, 2012 - 12:53pm

Ewww, likely untrue

>>It is unlikely that you'll see gold and silver at these levels again soon, if ever.<<

That is very funny and likely untrue. To get out of this price range on a more permanent basis, the physical gold and silver market participants need to show that the metals are underpriced by depleting inventories.

Mickey Dr G
Mar 15, 2012 - 12:55pm

@air garcia

also true is that I made nice bucks buying uslv in the dec low

Sold them early this week nice profit-just wish I would have sold just before ben spoke 2/29

now thinking abt getting back in

Mar 15, 2012 - 12:58pm




Shale gas has given the United States a great deal of supply the past several years. The winners are the drillers who get paid $5+ million to drill each well and the market that gets cheap gas. The Losers are the companies and the investors. This is not a business model that can go on for long.

Again, aeberman has done another excellent article which he states the following:

Shale gas plays in the United States are commercial failures and shareholders in public exploration and production (E&P) companies are the losers. Operators have maintained the illusion of success through production and reserve growth subsidized by debt with a corresponding destruction of shareholder equity. Many believe that the high initial rates and cumulative production of shale plays prove their success. What they miss is that production decline rates are so high that, without continuous drilling, overall production would plummet. There is no doubt that the shale gas resource is very large. The concern is that much of it is non-commercial even at price levels that are considerably higher than they are today.

This information above came from his article written in Oct, 2010 when the price of natural gas was $4.00 mmBtu. Today it is trading below $2.30 mmBtu (million British thermal units). According to aeberman, (Oct 2010) a multi-year evaluation of ten shale gas operators indicated a $7.00/mmBtu break-even cost of shale gas plays even taking consideration of hedging. Below we can see the breakdown of each operator:

Again, this was back in the fall of 2010 when prices of natural gas were much higher. To keep the SHALE GAS PONZI SCHEME going, more and more investment money needed to keep coming into the industry. Unfortunately, shareholder value started to plummet early on. The graph below shows just how bad shareholder equity was destroyed going back to 2009:

As investment money dried up, shale gas operators had to resort to adding more debt, selling assets or forgoing paying lease payments to the landowners of these shale gas fields. I have read countless stories of individuals and corporations who did not get paid their royalties or lease payments from these shale gas play operators.

Here is a typical example of SHALE GAS HYPE in action. Jeffrey Brown (developer of the Land Export Model as it pertains to Net Oil Exports) wrote this in a post back in Aug 2011:

Chesapeake paid $185 million for this DFW Airport (Dallas-Fort Worth) 18,000 acre lease in the Barnett Shale Play, and they predicted that they would be producing 250 MMCFPD by the end of 2011, with an EUR upper end estimate of one TCFE (including some allocation for liquids) from the lease.

Production peaked in October, 2009 at 77 MMCFPD (from 93 wells), and they were down to 32 MMCFPD in May, 2011. What is interesting is that the decline rate accelerated in the first five months of 2011.

The overall annualized decline rate from October, 2009 to May, 2011 was 55%/year.

From October, 2009 to December, 2010 the annualized decline rate was 46%/year.

From December, 2010 to May, 2011 the annualized decline rate accelerated to 81%/year.

In any case, at the 55%/year decline rate, the DFW Airport Lease would be down to 23 MMCFPD in December, 2011, versus Chesapeake's projection of 250 MMCFPD.

Brown is referring to Chesapeake Energy in the example above. The investing community and the public have been hoodwinked into believing that shale gas will supply the country with 100 years of gas at extremely cheap prices. In what I have summarized above we can see that shale gas industry is more like a Ponzi scheme and or Gold Rush than a sustainable energy business model.

Let me tell you, I could add 50 more pages of data and 100 more charts and graphs on the GREAT SHALE GAS SCAM. I wanted to provide a basic and clear view into shale gas so the readers here on Turds blog can understand just how bad the Shale Gas Industry has become.

Currently, Chesapeake Energy as well as many other shale gas operators have decided to cut back on drilling. After the investment money started to dry up, these companies had to resort to selling assets to be able to fund continued drilling. We are getting to the point that this SHALE GAS FAÇADE is about to disintegrate.

The Shale Gas Industry is losing over $10 billion a quarter. Even if the price of natural gas doubled from here, the break-even price for shale gas operators is over $7 mmBtu. I see big problems for the shale gas industry going forward. We are witnessing several fields already peaking and heading into decline. As I have mentioned before, the best part of the field is exploited first and the majority of the shale gas is extracted early on.

The United States will not be able to RUN THE INTERSTATE HIGHWAY SYSTEM ON NATGAS. The so-called glut of natural gas the country is currently enjoying will dry up and blow away. Furthermore, the United States will not be a MAJOR EXPORTER of natural gas because we will need to utilize all that we can produce. Up until just the past few months, the United States was still a NET IMPORTER of natural gas (from Canada).

The true amount of Shale Gas Reserves are grossly overstated. As the shale gas well ages, a good percentage of its remaining reserves may not be extracted as continued FRACKING is more expensive than the small amount of daily production.

The Great Shale Gas Scam is about to hit a brick wall. The HYPE is about to hit REALITY. Unfortunately, this will occur at the same time the whole U.S. economy is about to get the enema of its life. The fear I have is when the dollar dies, where will the capital come to invest in drilling for gas or oil? We must not forget when a currency collapses, so does the presumed wealth and capital.

At this time… it will be extremely wise holding GOLD & SILVER.

HERE are links to the articles I used in this post:



tmosley Air Garcia
Mar 15, 2012 - 12:59pm

I haven't seen $20 or $25,

I haven't seen $20 or $25, and certainly not $5, $10, or $15.

How about you wait a year and see where things are at that point.

You should be cost averaging anyways. You don't run out of bullets unless you lose your regular incomse source.

Blue Sky
Mar 15, 2012 - 1:02pm

We have lift Off

I just knew it when I saw the miners reversing.

Mar 15, 2012 - 1:04pm


Thanks for all of that

Mar 15, 2012 - 1:04pm

I wonder how many stackers

I wonder how many stackers miss the bottoms of these corrections only to buy again after another 5-10% price rise? nibble nibble

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Key Economic Events Week of 6/17

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