We Are SO Screwed

Thu, Apr 19, 2012 - 10:23am

Before we get into the usual metals discussion today, I thought I'd take a moment to discuss what is being called "Taxmageddon". Not for the fiscal or economic policy ramifications but as a perfect example of just how hopelessly broken the political system in the United States has become.

If you haven't heard of Taxmageddon, don't feel badly. It was a topic that ramped up in popularity into Tax Day back on Tuesday but now will surely drift back into obscurity in the weeks and months ahead. What Taxmageddon essentially is is this: Without Congressional action, almost all tax cuts and changes initiated within the past 10 years will expire on January 1, 2013. This includes changes to the Alternative Minimum Tax, the "marriage penalty", rates paid on dividends and interest, the "payroll tax deduction" and so on and so on. For a more detailed summary, here are links to a New York Times story and a Fox News story on the subject:



I bring up all of this NOT for a discussion about tax policy and "fairness". That's all bullshit and, frankly, anyone that falls into the trap of arguing about this stuff is simply playing into the politicians hands. What I want you to take away is this:

Congress knows that this is a MAJOR PROBLEM. Coming up with a plan and fixing this should be THEIR PRIMARY OBJECTIVE over the summer. BUT THEY WON'T DO IT.

Instead, everything out of Washington will be simple theater ahead of the November elections. The Republicans don't want to be seen as raising taxes ahead of the election and the Democrats don't want to be seen as lowering taxes. None of these freaking politicians will DO THEIR JOB because they are more concerned about KEEPING THEIR JOBS.

So, what will happen? After the election, Congress will be called in for a "lame duck" session in December. It's called that because, typically, nothing substantial gets done, primarily because a significant portion of the reps have just been voted out. This lame duck session, however, will be charged with fixing all of the Taxmageddon problems, in about 3 weeks, again using the votes of representatives and senators who have just been removed from office but whose terms don't expire until January. Ain't that great???!!! This also means that, for the rest of 2012, no individual and no corporation can make any concrete plans (including hiring) because of the utter uncertainty regarding the tax code for 2013. And these political deltabravos can't seem to figure out why the economy isn't "recovering"!

Do you see now why we are so helplessly screwed? It's all about politics and control. None of the Republocrats gives a rat's behind about you or me or anything. All they care about is getting re-elected. Period. And if there are any of you out there naive enough to believe that if we can just get O'Bomney (re)elected all will be well, I suggest you get up from your computer right now and go stick your head back into your kid's sandbox.

Next, I suggest you read this. I don't agree entirely with the author's opinions but I certainly share some of them: https://www.zerohedge.com/news/guest-post-fake-conservatives-dangerous-freedom-obama

Anyway, I don't mean to sound hopeless and defeated but it's always a fine line between realism and cynicism. As we plod forward, we all simply need to stay on the side of realism. Pay attention, think for yourself and trust your instincts. The current system is not fixable and the status quo will not be maintained. If you think you can affect change on a grand scale, please give it a try. We are counting on you and hoping you will be successful. However, in the interim, the only sensible option for everyone else is to continue to prepare accordingly for the end of the Great Keynesian Experiment and/or the end of the Great American Experiment, whichever comes first.

The metals are rebounding this morning after being savagely beaten during London trading. On the bright side, chart support continues to hold on the Comex. Gold is still stout above $1630 and silver keeps catching a bid every time it moves toward $31.30. I don't know about you but I'll take it! Of course we still run the risk of a brief, gun-the-stops drop but, as long as we continue to set a base here, the chances are increasing that bottoms are in and the next UP move will soon commence.

Following on with the technicals are the fundos. Below is a C&P of a comment I tucked into the last post regarding the latest OI numbers and the coming CoT. I thought I should reprint it here so that you were sure to see it.

This week's CoT is going to be extremely interesting!
For the reporting week, here's what we have:
GOLD down about $10 and total OI down about 5,400 contracts. Almost certain to show a bullish improvement.
SILVER down 15 cents and total OI was UP by 7,000 contracts. May show a significant improvement.
​So, anyway, you know that I think the stage is set for a massive silver short squeeze. The silver CoT on Friday should only add fuel to the fire. We'll see...
Lastly, tonight's OI numbers are also amazing. Again, this data is basis yesterday's Comex close:
Gold total OI fell about 2300 contracts yesterday to 398,526 while price rose a scant $1.60. Not only is this a new low for 2012, it's a new low for the last 2.5 years.
Silver OI rose yesterday by 3,200 contracts (while price rose just 30 cents). At 121,448, total OI is, by far, the highest it's been for all of 2012.
Something very unusual is taking place here. Very unusual. We'll look back, 6-8 weeks from now, and be able to say that "the clues were there, why didn't we see it coming?".

Here's one bit of commentary for you today from JS Kim. It seems the brutal, 6,000+ contract dump on Tuesday caught his attention, as well: https://www.zerohedge.com/contributed/2012-16-19/weekly-dose-gold-silver-market-manipulation

Lastly, just an additional THANK YOU to all who Fed The Turd over the past 24 hours. We have now successfully raised enough funds to pay any outstanding bills as well as make the adjustments necessary to hopefully stop the site from crashing so often. Your generosity continues to amaze me and I am truly humbled by the outpouring of support. It is my sincere hope that I can continue to provide insight that you deem worthy of your attention and interest.


About the Author

turd [at] tfmetalsreport [dot] com ()


Apr 19, 2012 - 10:25am


First first ever?

Apr 19, 2012 - 10:27am

Donation has been sent!

General Turd!

I have donated 15 Bennie Bucks to the cause this morning. Go Turd Army!!!

By the way, I started the #TurdArmy hashtag on Twitter nearly a year ago. Since there is now an official Turd Army, this can be used for updates and to bring in more recruits.

Wish I could partake in the actual Turd Army investing, but I’m just a stacker and have a good chunk of mining stocks waiting to take off (hoping is more like it!).

But good luck to all the soldiers fighting the paper war…I hope you guys kick some serious ass and stack a whole lotta of phyzz!!!

Thanks for everything General Turd!

Apr 19, 2012 - 10:28am


A trifecta? Guess not.

Big Dutch
Apr 19, 2012 - 10:31am


I’m just a muppet, but some things hit me as rather strange lately and I can’t make sense of them. 1) Recent trend of decreasing OI in gold, but Increasing OI in silver at the COMEX (Harvey’s Organ); 2) Recent trend of virtually zero price movement in gold and to lesser extent silver in overnight trading; and 4) While the brutal beat-down in PM mining stocks continues it is with extremely low volume. Again, just a muppet, could these be signals one way or the other.

Like most here I have high hopes we are at the end of a huge multi month reverse head and shoulders, but IF we are we need a catalyst for the next leg up in PMs. What could it be? Geopolitical event? Maybe. QE3? Maybe, but general consensus says not this month (ie next Wednesday). Pan Asian Gold Exchange? Which brings me to the whole point of this rambling post.

It was supposed to happen Q4 last year, but was delayed. Now set to open in June, but I just haven’t heard much about it lately and we’re getting down to the wire. Anyone have any info? If it is going to open, my mind can make sense of everything above.

All comments welcome.

Apr 19, 2012 - 10:32am


...and you're welcome.

Just wait until January 2013 for the real fun/pain to begin.

In the meantime, SpeakEasy, news, music, vids etc....


Dr G
Apr 19, 2012 - 10:33am

PAGE was scrapped and isn't

PAGE was scrapped and isn't opening, but I am quite interested about the replacement platform that we were told by Ned N-L that would be coming into place. Any updated info about that?

I'm ready for a short squeeze in silver, but I won't have that excitement in my bones until silver crosses the $40 mark.

Apr 19, 2012 - 10:34am


As in Pens will get to a game 7.

Apr 19, 2012 - 10:37am

Turd, please expect to hear from my attorney re...

...copyright infringement:)


@ Magpie-The same Sheila Jackson Lee who thinks...

Submitted by ClinkinKY on April 19, 2012 - 10:05am.

...that Vietnam is still separated by North and South. We're so screwed.

Congresswoman Sheila Jackson Lee on North and South Vietnam

Democratic Congresswoman Sheila Jackson Lee unveiled the program, labeled Bus Safe, during a press conference on Friday. According to a Metropolitan Transit Authority of Houston (METRO) press release, agencies involved in the scheme will, “ride buses, perform random bag checks, and conduct K-9 sweeps, as well as place uniformed and plainclothes officers at Transit Centers and rail platforms to detect, prevent and address latent criminal activity or behavior.”

Apr 19, 2012 - 10:37am

12er interview with Assange

Hi Turd, What's your take on Assange's interview?


Dr G
Apr 19, 2012 - 10:42am

Silver posting an ORD thus

Silver posting an ORD thus far. Gold needs to move $8 higher for close to get an ORD. I think it will happen.

Apr 19, 2012 - 10:43am

Just thought it might be

Just thought it might be worth mentioning that a close of 1657 or above for gold would make an outside reversal day. That coupled with a bounce of super strong support at 1631 would really be very bullish indeed.

Big Dutch
Apr 19, 2012 - 10:45am

Thanks Dr. G

Thanks Dr. G. I was under the impression it had some compliancy issues, but once corrected would be opened. The key is an exchange that allows Chinese Citizens to buy gold and silver at the click of a mouse through their bank accounts. Are all bets off on that happening by June?

Dr G
Apr 19, 2012 - 10:46am


I'll sniff around and see if I can come up with anything. It's been almost 60 days since Ned's update. Maybe he'll have something new for us.

Dr G
Apr 19, 2012 - 10:47am

@worldend, good comment

@worldend, good comment :)

Everybody, do you see what they did there with jobless claims? Please read this ZH article to understand just how silly this all is: https://www.zerohedge.com/news/inital-claims-soar-again-ninth-consecutiv...

In summary: jobless claims this week came in at 386k. Last week was 380k. That would mean an increase of 6k which looks bad. So they simply revised last weeks from 380 to 388k. That now means that initial claims FELL from 388k to 386k, which somehow looks wonderful. Sheesh, what a scam.

That also means that when initial claims next week are 395k, they will simply revise this week's from 386k to 397k :)

Apr 19, 2012 - 10:53am

Inability to Plan Ahead is Killing Us


You hit the nail on the head. Businesses need to know what the rules will be in order to plan ahead. If they do not know what their tax rate will be on January 1 or what rules will apply to them then they can not decide if a particular deal makes sense. The recent tax holidays do nothing to help growth, they are merely pandering for votes. This administration has constantly changed the rules to help who it wants to help, such as moving unsecured creditors, the unions, ahead of secured creditor in the car bailouts.

Until the elections are over the best we can do is muddle along. The inability to plan ahead is killing growth in this country.

Apr 19, 2012 - 10:54am


Both Gold and Silver are in Backwardation!

Big Buffalo
Apr 19, 2012 - 10:54am

Silver at $32

Is this the resistance level for silver, or are we looking at $33?

Apr 19, 2012 - 10:55am

Dr. G (repost from end of last thread)

If you have an interest I suggest you become a member of https://www.lef.org/

Their book, Disease Prevention and Treatment is about 1600 pages backed by all the science needed.

They also provide a monthly magazine. Their main theme is to follow Scientific Protocols that Integrate Mainstream and Alternative Medicine.

Also look into this: These people frequently became 100 years or more.

Probiotics was first conceptualized by the Russian Nobel Prize winner and father of modern immunology, Elie Metchnikoff, at the beginning of the 20th century. He believed that the fermenting bacteria in milk products consumed by Bulgarian peasants were responsible for their longevity and good health.

Unfortunately today, big pharma makes more money keeping people on medicine than curing them. If you are a medical doctor, you, I assume, have an interest to cure your patients. I think you will be impressed with the "Life Extensions" people, despite the fact that they also sell what they preach. Of course people can also buy it at their local vitamin store.

Apr 19, 2012 - 10:56am
Apr 19, 2012 - 10:58am

@ Big Dutch

Since last year or so, everybody in China can go to a branch of the Agricultural Bank of China and buy physical gold.

They've got everything from small rounds (very Chinese-looking with a square hole in the middle) to small and big bars.

You don't even need to have a bank account with them if I remember correctly.

When I went in and asked for the prices, they were actually a bit cheaper than the many many 24K gold and gold jewelry shops all over town.

Apr 19, 2012 - 10:58am

Can the COT and OI Numbers be Trusted?

Question for everyone - we all know the BLS numbers are a complete joke, so how do we know that the OI and COT numbers are legitimate? I've noticed that Harvey is constantly pointing out strange deposits and withdrawls, we all know there isn't nearly as much available silver available as reported, so why would the OI and COT numbers be accurate in this sea of fraud, scams and shams?

Dr G
Apr 19, 2012 - 10:59am

@orange, thanks for the post.

@orange, thanks for the post.

silvanus Big Dutch
Apr 19, 2012 - 11:00am


PAGE got axed allegedly via pressure from some "unamed" entity out of NY.

Nearly as soon as it was trying to take off.

Turd covered this topic earlier this year. You will have to search the feeds yourself.

But essentially a more regrouped effort is in the works. And under a different name.

Apr 19, 2012 - 11:06am

It's not sticking your head in your kid's sandbox

It's sticking your head in your cat's litterbox. Mmmm, homestyle and chunky...

Apr 19, 2012 - 11:07am

Could a few Turdites read this article


He argues that the number one reason investors buy gold is to protect against the
government policies that create inflation. However, the government
has "rigged the game" in such a way that the higher the rate of
inflation, the more of a gold investor's net worth ends up with the
government instead of the investor.

I understand his sentiment but disagree. Can someone smarter than me articulate a reason why I disagree? :)

Apr 19, 2012 - 11:10am


During the 60's when I obtained my first real job after college, my monthly fixed income was $531.00 and my wife's was $388.00. These were entry level jobs and we had never seen this kind of money before. Our rent was $65 per month, we ordered a new '68 Cougar on a 3 year note @ $100/mo., gas was 30 cents a gallon, hamburger was 40 cents a pound and the income and SS taxes were quite small. We had lots of bucks left over every month and moved into buying real estate. We looked to the future when we could make $10,000 a year and wondered what we could buy with that kind of income.

I have talked to two family members this week about the coming tax to death problems that are coming. Both of these relatives told me the same thing. They have come to a place in their lives where they are going to limit their incomes, not hire any more employees, downsize and spend their time on just living. These are the real producers in our land and the tax system has changed their direction. There will be lost jobs and lost future employment for thousands of job seekers and when we see the new B.O. healthcare costs to employers, there is be even a greater exit out of the employment doors.

Many will think that the opportunities lost by these employers will just be picked up by someone else, but they do not understand that the loss of small business is a major drain on bottom line taxes and employment.

Tax and spend??? Go ahead, we are headed for the hammock on the beach.

Apr 19, 2012 - 11:18am

we are screwed

The cesspool in DC creates their own reality. They believe they can determine reality by what they believe, so by changing what they believe, they can change reality.

There are no moral absolutes because there is no distinction between good and evil.


Apr 19, 2012 - 11:28am

Yes, we REALLY are (screwed that is)

States asked to apply for unemployment test plan

WASHINGTON (AP) — The Obama administration is looking for states that will experiment with unemployment insurance programs by letting people test a job while still receiving benefits.

The plan is a key feature of a payroll tax cut package that President Barack Obama negotiated with congressional Republicans in February.

The Labor Department will open the application process Thursday for 10 model projects across the country. Any state can apply for the "Bridge to Work" program.

The plan is modeled after a Georgia program called "Georgia Works." Under the plan, workers who have lost jobs can be placed in other temporary jobs as trainees for short periods to retain their skills or gain new ones while receiving jobless assistance. About a third of the time, those workers wind up getting hired full-time.

Read more:https://news.yahoo.com/states-asked-apply-unemployment-test-plan-125932074.html

Apr 19, 2012 - 11:32am

Just heard back from Ned

Nothing new on the silver exchange but keep in mind that he'd previously mentioned it'd be this summer, at the earliest.

Ned did pass along some silver miners observations and he mentioned that I could post them here. Remember, besides being a very visible mouthpiece for our cause, Ned's day-job is as a precious metal equity fund manager. So, it's safe to say that the guy knows a little bit about the miners.

Btw interestingly CIBC and BMO both put out sector notes on silver yesterday calling the silver price and related equities lower based on the 'interestingly collated' supply demand assumptions of GFMS who, as ever, say silver is in oversupply going forwards.
Amazing how the mainstream analytical community have consistently forecast flat to lower one year numbers in silver every year through the secular bull and then been wrong every time thanks to their reliance on the assumptions of industry 'bible' GFMS. At the gata conference last summer Eric Sprott showed how his firm alone had bought more physical than the entire global estimate of investment demand. This goes to show where we are with these 'statistics'!
Both banks (BMO and CIBC) now have every single silver equity they cover on hold or sell....no exceptions - another sign of capitulation and an exhaustion of bearish sentiment for my money. All the analysts and institutional guys at the denver gold show in zurich (am getting on plane to fly back to london now) have given up on silver (much to my delight!) Only hardcore retail investors, myself and Eric remain seemingly (apologies to any others!)
Again, have these generalist resource fund managers really not noticed that despite the consistently bearish data from gfms every year silver is still the star asset class over the last ten years?!
.... One wonders if someone has the ear of gfms....(!)

Feel free to pop this up if you see any merit in it. NN-L

Big Buffalo
Apr 19, 2012 - 11:33am

$33 is the Daddy of The

$33 is the Daddy of The Mac.

$32 is just a stepping stone.


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Key Economic Events Week of 4/15

4/16 9:15 ET Cap Util and Ind Prod
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4/18 8:30 ET Philly Fed
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Key Economic Events Week of 4/1

4/1 8:30 ET Retail Sales (Feb)
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Key Economic Events Week of 3/25

3/26 8:30 ET Housing Starts (Feb)
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3/28 8:30 ET Q4 GDP final guess
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