Monday Night Discussion

Mon, Apr 23, 2012 - 6:33pm

Hot on the heals of the Sunday Night Discussion, here comes the Monday version. If you have a few minutes, I'd really appreciate your feedback on the following items.

First, a quick update on the open interest changes for Friday. Recall, first, that it was a relatively flat day with gold up $1.50 and silver down 13 cents. The gold OI was quite curious in that the front-month June dropped by a scant 24 contracts and the next delivery month of August dropped by only 1. One! Now, with total volume for Friday coming in at 137,937, do you find it more than a little strange that the two most active months only saw a drop of 25 contracts, combined? Just another sign that almost all of the Comex volume these days is HFT WOPRs that open and close positions intraday. (It could also be another sign that the CME-supplied data is simply bogus.) In silver, the total OI rose to a new 2012 high of 121,702 with most of the gains coming in the OI of the Sep12 contract. I will be very interested to see the OI numbers tomorrow (basis today) after today's EE beatdown. I would suspect that the total OI will show another rise to new 2012 highs as brand new shorts were added today.

Next, an interesting note for Mike Krieger's new site. Lots of folks seem to incorrectly misinterpret the abundance of "WE BUY GOLD" stores as a sign of a gold bubble when, in fact, it's the opposite signal. Additionally, the willingness of regular people to unload their gold in exchange for much-needed fiat speaks volumes to the true state of the economy. Now comes this story about pawn shops seeing a dramatic dropoff in the amount of gold exchanges. Is this "supply" of gold from weak hands nearly exhausted? Maybe.

In world news, I thought this next piece neatly summarized the deteriorating situation in Europe where things are going from bad to worse to awful to crisis very quickly.’-weekly-market-forecast-here-comes-spain-edition

Lastly, please take five minutes and read this excellent new piece from Jim Quinn. As preparation for the FOMC nonsense this week and the BLSBS next, this article will strengthen your fortitude against the SPIN, MOPE and outright propaganda that is sure to come.

OK, off you go then. See you tomorrow. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


cliff 567
Apr 23, 2012 - 6:37pm



Apr 23, 2012 - 6:40pm

Always a bride's maid...

never a bride

Apr 23, 2012 - 6:42pm

Who says?

Just because a lot of businesses are willing to buy gold cheap, who says a lot of people are dumb enough to sell to them? Sure some jewelry gets sold for cheap, because people are either desperate or unaware of the true value, but I bet very little, if any bullion.

Silver Meddler
Apr 23, 2012 - 6:43pm

Cryogenically Freezing Myself

Wake me up when it goes under $1600/$30 so I can stack.

Apr 23, 2012 - 6:51pm

Turd, I always opined that

Turd, I always opined that our Cash For Gold stores were a sterilized & legalized method of modern day confiscation. Just when folks should hold tight, they trade their "golden ticket" for toilet paper.


Edit: I don't chime in often enough but thanks for all you do amigo

Apr 23, 2012 - 6:51pm


At the end of the day an open market functions on supply and demand. This is the premise I have based my investments on and it is also the premise that will one day prove to be the silver bullet that takes down some of the biggest banks. You can seemingly suppress this equation with "false" supply- but in the end the demand will not be satisfied with paper but with the end product. The economic outlook will be managed very precisely moving into the Nov elections. There will be need for a market sell off in order to make room for the buying run in the Fall when "all is well" and "recession ended" will be the headlines from coast to coast. The wild card events will take place over-seas where certain situations cannot simply be manipulated. There will be smoke coming from china as well as the middle east. This will not be propaganda but reality seeping in. Deals will be made in Asia and the US will be slowly dealt out of the game. This basing at 1600 for gold will be left behind for a new gold reality around 2000- that is the next level of manipulation. We should be very glad to take part in this game at these prices , bc folks if you are worried about a few hundred dollar drop in gold over the next 2 months, then you are not mentally prepared for trading or investing in these markets. PM's are for long horizons- the farther they push the beach ball under the water the higher it will bounce- take advantage of submerged beach ball prices in the PM's - cost average folks. I hear the buyers at 40 in pain and I understand- but I distinctly remember the buyers at 16 howling from the pain. 50% haircuts were the norm and a nice 70% was staring us in the face a few years ago. Guys it is all perception and point of view. Silver will catch up to gold , but it will be all at once . The problem with that will be the folks "waiting" for the big dumper to get in so that they can truly have a "good entry". Poor entries turn into fabulous values when you have the right time horizon. The pt made on the earlier thread on food prep- folks it is a good idea no matter what the world looks like next week-month-year. Tornadoes- blizzards- hurricanes- any disruption in normal life is made so much easier when one is prepared. Just my 2 cents- dollar cost average folks- it has worked for 10 years and will for awhile longer.


Apr 23, 2012 - 6:54pm

Two assholes (or, I looked up narcissist in dictionary...

....and found the second picture).

Sorry, I just couldn't wait for morning:)

Apr 23, 2012 - 6:56pm

Right now it feels like we are a fish on a line..

Right now it feels like we are a fish on a line. The line plays out to about $32 or so (or did until today). The cartel let us tire ourselves out fighting against the limit of the line, and then when we are tired enough they reel it in a little bit more and let the process repeat.

What we are waiting for is the hook to bend or the line to break. When the line breaks, it'll go without warning and the price will go zooming off into the great blue yonder without even a look back. This is why it's tough to sell now in the hopes of buying back in later. If that line breaks it'll be hard to get back in near the point you got out.

Apr 23, 2012 - 7:05pm

Danke Shane?

Danke Shane: what does it mean?

It means' Thank you' in German.

Apr 23, 2012 - 7:08pm

thoughts on a gold bubble

Last month I began visiting LCSs to get into buying in person to avoid shipping costs and to develop relationships with dealers. I have now narrowed my interest to a guy who owns a small shop near the university district. I made that decision because all the other shops in my metropolitan area appear to be these semi-chain shops that are only interested in transacting and not allowing people to just stand around and hang out and make connections. Booo to that.

Anyway, two observations come out of this:

1) I read many reviews of various coin shops in my area and the ONLY reviews I read were either people who were so happy to have gotten X fiat for their coins or jewelry or angry at being lowballed. There were NO reviews from buying customers.

2) After hanging out in several places in person I noticed significantly more sellers than buyers. That basically supported my impressions from my prior research online.

If this is a bubble, it sure doesn't feel like one. I think bubbles can be detected by psychology, as I recall back in the housing bubble I would attend dinner parties with my parents (I was in HS at the time ofc) where parents would invariably boast about how much their home was worth. On the other hand I ask various people how much they think gold is worth nowadays and half of them have no idea, with the other half being somewhat aware of it being over 1000/oz.

Ag Surfer
Apr 23, 2012 - 7:16pm

Cash for gold

Who is the end buyer of all the cash for gold places?? I've wondered for awhile if it isnt CBs and large buyers overseas? Does anyone know who is the end buyer of all that "scrap" gold? (lol, everytime I hear a commercial say, bring in your mismatched and scrap gold jewelry, I have to laugh!) When the PM craze culminated in 1980 people were lined up around the corner of their LCS to BUY silver and gold. I'm going to continue stacking while the line at my LCS is sellers. I will have to say that even in the last few months there have been fewer sellers, which I would agree means that the weak hands have sold already, but I think the next time there is a wave of sellers it will be when the price is climbing. The buyers I know that buy from individuals are doing less buying than they would like to right now. Be right and sit tight! Ag Surfer

Apr 23, 2012 - 7:19pm

CME Supplied Data

Turd said: "It could also be another sign that the CME-supplied data is simply bogus."

I'm glad you brought this topic up again - I 've been wondering about it for a while now. A quick 30 seconds on google found this:

Commitment to accuracy of CFTC data in doubt:

FCM fined for submitting inaccurate reports:

CFTC Orders Newedge To Pay $700,000 For Inaccurate Trader Reports:

So, if I was to venture a guess, I'd say the CME data is just as accurate as a Spanish bank's housing appraisal, Greek tax projections, or US unemployment numbers

Apr 23, 2012 - 7:32pm


Gold Stocks: Half Way?

Ned W Schmidt CFA 04/23/2012

With the calendar moving into the second third of the year, some of the popular delusions of the crowd seem increasingly remote possibilities. Have we been waiting a year for QE-3? But like a broken clock, those forecasting QE-3 to be imminent still have a shot at being correct. At the same time, some are chopping down the AAPL tree. Already down 10% from the high, the leading delusionist on that stock is still forecasting a $1,000 price. Gold seems well short of $2,000. Would that be still or again? And the pick up trucks loaded with Silver ready for the ride to $100? Well, seems most have broken down in the middle of the road. And the Gold stocks? Perhaps about half way to the bottom.

Second, for larger mining stocks set a price target roughly 30-40% below today’s price. Should the stock reach that level this Summer then consider purchasing it. However, do so without expecting immediate gratification. Third, for smaller mining stocks that actually have production, or production that is imminent, set a price target to consider the stock at 40-50% below today’s price.


Well, there you have it. Ned Schmidt thinks LARGE CAP GOLD STOCKS are a good price at 30-40% below present values and JUNIORS at 40-50% below current values.

Dennis Gartman says the GOLD BULL MARKET is over... so he is unloading all of his gold positions.

Jon Nadler states the following:

The Sydney Morning Herald’s Business Day contributor Matthew Kidman notes several interesting aspects of a gold market that now has everyone (and their cousins) suddenly turning into self-proclaimed analysts. First, Mr. Kidman correctly underlines the fact that “there is not an analyst on the face of the Earth who can accurately value gold” since it cannot be based on conventional metrics such as ROA or discounted cash flows. Score one for Warren Buffett.

He then punctures the myth of supply/demand tables being in favor of (higher) gold by noting that “gold bugs like to say that the demand for gold is strong, but the reality is the supply of bullion far outstrips demand that is going to be the case well into the future.”


I don't think I have ever seen JON NADLER write anything BULLISH about gold. It is always either sarcastic, negative or bearish. According to these FINE ANALYSTS, it looks like GOLD and SILVER BULL MARKET is over.

I can't wait until the day comes when GOLD and SILVER take out there HIGHS, I will beg TURD to allow me to write an article naming these analysts and how LOUSY their forecasts turned out to be.

Apr 23, 2012 - 7:40pm

Some observations

The US government will need to sell $1.3 trillion in new debt. This doesn't include another 3 trillion or so in debt that must be rolled over as it matures.

The US will hit its debt ceiling later this year. It is a certainty that it will be a public fiasco of EPIC proportions since the elections will be in play at the same time.

The Congress will need to determine whether or not its going to postpone the draconian tax increases that are slated to take effect this upcoming January 1, 2013. The Social Security tax cut, the Bush tax cuts and the extended unemployment all expire at the end of this year. The uncertainty of whether these will be postponed will deter many employers from hiring new employees, will cause many consumers to postpone major purchases and will cause a dramatic number of investors to book profits on investments to avoid paying higher taxes. This would have a MAJOR impact on the equity markets.

The situation with Israel/Iran will only continue to get hotter and hotter with each passing week. There is zero chance that Iran will give up its nuclear program and capitulate to Western demands.

At some point a new PM exchange will open in China creating another exchange for price discovery.

The paradigm shift of trading oil for gold will have significant negative repercussions on the US dollars hegemony.

The exponential function in US debt is in play.

The exponential function in gold is in play.

Silver is still up over 10% YTD.

PM miners are at generational lows when priced against gold. That portends 2 possibilities. Either the miners are signaling that gold and silver are on their way to being worthless; or, they represent the buying opportunity of a lifetime. While there is precedent for the miners leading the metals - I am going to opt for the latter option.

There are many that bad mouth Turd and company as being naive, apt to follow charlatans such as Harvey Organ, Andrew Macguire, etc... while they proclaim that they are the true bearers of truth. These people are always very well spoken, educated and have really persuasive arguments. Its hard to disagree with them until you take a step back and realize something. Turd, Macguire, Organ, et al are strong advocates of buying physical metal and holding it in your possession. Perhaps that is why they are lightning rods of opposition?

I am bleeding heavily in many of my miner positions (including JAG, MUX, PNPFF, AUMN, amongst others). I will NOT sell into this weakness. Instead, I have added USLV and recently NUGT. I am arranging a personal loan from a dear friend that I will collateralize if required with some physical metal so that I can purchase some LEAP options in silver in the next 2-3 weeks (unless we have a price explosion before then).

We are at war ladies and gentlemen. Gold and silver are objective standards of value. Nothing more - nothing less. Gold and silver are tools provided by God to allow people to trade with one another in a fair and honest fashion. It has been that way since time immemorial. The enemy is doing everything possible to obscure that truth.

Hold strong. If you have the ability to add to positions on price weakness - the risk/reward is heavily slanted in your favor currently.

Just sayin'

Apr 23, 2012 - 7:51pm

Surviving 'interesting times' + pawnshops

Repost from previous thread, with update:

In looking around for accounts of another episode of fiscal calamity, I stumbled upon this one instead. I remember if pretty well, insofar as it was one of the few (if not only) times the currency I used was 'hard commodity' -- at least in a relative sense, compared to the zloty, the dinar and the hrivnya. Ukrainians were a regular fixture of the town market, selling everything that was not nailed down (and a few things that were/should have been).

Worth a look, the gentleman is certainly a Turdite at heart, if not already in fact. Here he is talking about hyperinflation in Ukraine in the early '90s:

"People tried to buy something, anything, to convert useless paper into something real. A sack of sugar or flower were worth their weight in gold, although, surprisingly, no precious metals were ever involved in economic transactions."

"First, if you are convinced that it’s about to happen in the USA, you need to get out of the city, get out of the suburbia, and get into an area where you can have easy fresh water, farmland, and just a few people per square mile.

Second, hyper-inflation doesn’t just end by itself. It has to be stopped. Either governments stop creating money and deal with political and social consequences of gaping deficits, or social order as we know it collapses.

Third, there’s no reason for you to not buy laundry detergent, socks, toilet paper, grains, razors, light bulbs, canned goods IN BULK. Next time you get a little extra money, invest it into one or all of the aforementioned goods. You’re going to need them anyway. It’s an investment, not an expense. When was the last time you walked into a store and went, “huh, that’s weird, that canister of Tide just keeps getting cheaper!

Finally, anyone who learned the biggest lesson of the hyper-inflationary collapse in Ukraine understood how to live flexibly. Darwin often gets misquoted with this one, but it’s one of my favorites – “It’s not the strongest or the smartest who survives. It’s the one who’s most adaptable to change“."

Reason Silver - Ukraine 1993 Hyperinflation Lessons Learned

In other news, the proprietors of 2 out of the 3 pawnshops I called this afternoon (to ask if they had PMs for sale) said that they keep for themselves whatever coins they get in the store. I recommended they check out TFMR...


Turdland Jobs Forum

Apr 23, 2012 - 7:55pm


I have a scrap gold buying business and I can confirm the drop off in our gold purchases. We've been averaging about $15,000 to $20,000 in purchases over the past five months. This is down from our monthly average of $70,000 last year. I remember when Ben Davies came out on King World News and stated that silver looked toppy due to the large amount of scrap coming to market adding additional supply. We all know what happened in May to silver. We were buying silver hand over fist at the time and I could confirm what he was saying in the interview. If my business is a small sample, this means less scrap coming to market and thus less supply. I don't know how much scrap gold accounts for annual supply, but I know it's significant. There's only so many 14k gold chains out there. This could very well be the next catalyst gold needs to move higher...

Apr 23, 2012 - 8:00pm

I can't stand Nadler

It's like a CEO of a company saying, Don't invest here, we are a sham... he must be SO bought and paid for. What a joke.

Traffic to PM related sites appears to be bottoming out. All I can say is, BE RIGHT AND SIT TIGHT, don't ever lose conviction my friends, just do the math, it is obvious, we are in a finite world where the RETARDED economists (signal KRUGMAN) think that somehow exponential / infinite growth is both feasible and possible. Don't these guys even read a basic economics 101 text book? They sure don't appear to understand something as basic as the "Broken Window Fallacy" That Krugman character really has his head shoved deep up there... there are very few things in this world I despire more than a Keynesian "eCONomist" - its like an epic tidal wave of pleasure getting the best deal on the bullion stacks.

BTW, I picked up a ton of 1964 kennedies today, too bad I lost them in a boating accident on the way home..

Apr 23, 2012 - 8:01pm

Jim Sinclair had this to say today...

Dear CIGAs,

The implications of China paying for Iranian oil in gold is the most important event in the modern history of gold

1. It is reasonable to assume that China has been threatened with total or at least selective exclusion from the SWIFT system if it pays in any currency for Iranian oil.

2. Gold has been decided by China as the means of making payment for massive international purchases free of the SWIFT system.

3. Other Asian and Middle Eastern nations will now see the gold they hold as money free of Western economic interference.

4. Gold now is not only money free of liability, but also free from interference regarding settlement by the long arm of Western influence.

5. The SWIFT system is becoming ever more a weapon of Western international political will.

6. In case of war anywhere, it is now demonstrated for all to see that only gold will buy the materials required. Paper currencies are under the SWIFT system's control in settlement.

7. Far from being a barbaric relic, gold is now clearly the money of state survival in every sense.

8. It is reasonable and possible for the supply of physical gold to fall far behind the size of the massive short positions now common to algorithm and hedge fund paper shorts. That will make an effective cover at a reasonable price as compared to a certain day's close impossible the following day on an exogenous event.

9. It may not be possible to use TA of any nature to determine a price of overvaluation for gold. Should the USA decide to take on China in full out economic war with the physical market totally illiquid, such as through isolation from the SWIFT system, consider the gold price that might result.

Apr 23, 2012 - 8:15pm


WHen i see those pawn shops saying "we sell gold" then It will be a top. Thats when i plan on selling. as far as im concerned the "we buy gold" shows the exact opposite of a bull mania.

Apr 23, 2012 - 8:27pm

China's buying oil from Iran with gold?

@IndigoStar7 -> China's buying oil from Iran with gold? How did I miss that news piece? Or is that just a hypothetical guess from Sinclair?

Diamond bernard
Apr 23, 2012 - 8:29pm



Fritz ¤
Apr 23, 2012 - 8:43pm

China Gold for Iranian Oil

TF! Could you please use your new found connectivity to source the Forbes assertion ( that China will exchange their Gold for Iranian Oil!? The article draws a line, but does not cite sources - however, it IS Forbes, and I doubt that they would allow this to be posted without some tangible data points in their back pocket.

If true, this may be a contributing reason for the odd futures market internals you have been writing about . . . people in the know have been knowingly placing their bets.

Apr 23, 2012 - 8:43pm


Dear CIGAs,

Gold is officially replacing the US dollar June 28th. The cat is out of the bag.

Phil, you are booting any nation that dares to refuse to be legislated by any other body than themselves out of the SWIFT system.

You have officially made gold money. Now what are you going to do, declare economic war on China? They will fire dollars back at you.

You just might end the economic world as you knew it.

The Best Reason in the World to Buy Gold CIGA Eric

Have no doubt, emotions generated by short-term price action will be influencing investor decision-making a hundred years from now. We may have substituted iPad for the telegraph over the past hundred years, but we’re still fairly lousy traders as a species. The real world makes decision based on reality rather than perceptions generated by emotions. Well, at least the real world that stays in business. The Chinese are buying gold while the public panics and sells. Nuf said.

Headline: The Best Reason in the World to Buy Gold

"Beijing is planning to avoid U.S. financial sanctions on Iran by paying for oil with gold. China’s imports of the metal are already large, and you can guess what additional purchases are going to do to prices. On the last day of 2011, President Obama signed the National Defense Authorization Act for Fiscal Year 2012. The NDAA, as it is called, attempts to reduce Iran’s revenue from the sale of petroleum by imposing sanctions on foreign financial institutions conducting transactions with Iranian financial institutions in connection with those sales. This provision, which essentially cuts off sanctioned institutions from the U.S. financial system, takes effect on June 28."

Read more...Source:

Apr 23, 2012 - 8:46pm

Worth the Read....

Airgead posted this in the last thread..........definitely worth the time

ed ¤
Apr 23, 2012 - 8:52pm

Jim's comments

I'm not sure Jim's points really stack up. I question some of Jim's logic, but lets take his points number 1 and 2 at face value.

Another/FOA talk extensively about the US and others bartering oil for phyz gold (in the 1990's if not before). If Western interests realise that China can EASILY avoid financial isolation by using phyz gold, they may forget about the threat of sanctions? I realise the West does a lot of silly things, but I'm not sure they would allow gold to be further legitimised, and the USD marginalised, so easily.

Apr 23, 2012 - 8:56pm

Well I am interested in the

Well I am interested in the date that Santa refers to that Iran will be KOed from SWIFT system corresponding with whatever is supposed to happen with the new silver market that NNL was alluding to in the Turdcast awhile back and what time that comes online. Thought it was around the same time. 6/28/12 is the date that Santa refers to.

Apr 23, 2012 - 9:06pm

Hey Kurt...tell us how you really feel..

Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.” - Kurt Vonnegut

​well...........that's one way to put it, i guess....

Exbroker cliff 567
Apr 23, 2012 - 9:19pm

Why is it that everyone sits

Why is it that everyone sits around trying to figer every move in every minute on the Comex Have you ever heard of buy and hold? What the fuck......brain dead. I bought USG for 1 fucking buck. Never traded it. It's 60 now. Try being big boys and showing some patience. That's how real investors make money.

Apr 23, 2012 - 9:25pm

Grow  up boys and gals. It's

Grow up boys and gals. It's called investing! It happens over years! Many years. And anyone who gets on Turds shit will really have a hard time with me. Because you will really deserve it. I worked for the fuckers you thought you were going too screw. Smart asses you are.

Exbroker kingboo
Apr 23, 2012 - 9:28pm

NO clue

NO clue

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