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Let's Play "Who Said It?"

Wed, May 23, 2012 - 10:21am

As you've probably figured out, I recently received another shipment of hats, so we might as well give away another one.

So we begin today with a game of "Who Said It?" The first person to correctly identify the author of these thoughts will win a genuine, authentic and autographed Turd Ferguson hat. Of course, with google and the like, this contest may end fairly quickly but so be it. All I ask is that you read the entire passage before entering your guess.

"Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which - through a complex series of steps - the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss of value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

​In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its illegal, as was done in the case of gold (in the 1930s). If everyone decided, for example, to convert all of his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payments for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. Therefore, the financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

​This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

​OK, have at it. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


tmosley · May 23, 2012 - 10:45am

Now there is no Greenspan, there is only ZUUL!

proton777 · May 23, 2012 - 10:46am

...the algos playing off the USD. It's on another rocket ship ride today.

Eric King · May 23, 2012 - 10:46am

He must have had hair when he said that.

OrangeAlert · May 23, 2012 - 10:48am

Love that part of the book. I actually sent that quote to a friend a couple months ago.

...market knows that 82 was just broken on the USD? What happened in Europe?

Grigeo onealpha · May 23, 2012 - 10:50am

IMHO, the price action today is just your typical beat down prior to gold futures or options expiry dates.


stealthbear · May 23, 2012 - 10:51am

He lost the hair but wore the same pair of grasshopper eyeglasses for the next 40 years.

Groaner Basil · May 23, 2012 - 10:52am

but how about this huge turn around, up .07 on silver from the bottom

Prize Fighter · May 23, 2012 - 10:55am

I don't know if that was the bottom but I just bought it at 27.21. Hanging on for keeps now. 

Anonymous · May 23, 2012 - 10:56am

Removed comment.

silverstax · May 23, 2012 - 10:57am

....I didn't even realize that my MT4 terminal had frozen. Just refreshed and WOW - the EUR is falling like a stone.

The EUR now has a 1.25 handle - I believe this is a level that they have shown to desperately defend...

Hard Rain · May 23, 2012 - 10:58am

PM's are getting beaten like a red headed step child today.

Turd, your calls the past week re: short squeeze have been magnificent. To all the naysayers - you are all like soccer moms and dads who add no value, but are usually the first ones to complain. I saw it all the time when I coached my son's soccer team and when I was his Tiger Cubs den master.

Do you now have the intestinal fortitude to now stand up and give Turd his due - for this forum and for his calls?

I didn't think so.


boatman · May 23, 2012 - 10:58am

on the dollar pop.

solid double bottom at 1521 would make a strong foundation.

i said.

the 10YR US is at 1.71!!!

you will see a forward 30 yr. US bond top in the next 2 weeks sometime.

maybe today.

boatman · May 23, 2012 - 11:00am

said it would take 1.25 EUfor qe3.

as i remember.

Groaner · May 23, 2012 - 11:01am

it getter drop quick or I think our metals will not be as shiny as we thought

Explain why the metals were up against everything last week,, but now they are locked step with the market and dollar???

tmosley · May 23, 2012 - 11:01am

Once again, it isn't PMs that are being beaten, it is paper that is being crushed.

This will continue until a new pricing mechanism is in place, or until Jamie sprouts wings and a halo. That is all there is to it.

foxenburg · May 23, 2012 - 11:02am

damn you silverstax!! but very pretty drawing. what about that $25 thumping gold took a few minutes ago, hey?

Big Buffalo · May 23, 2012 - 11:04am

have gone from. . . . . wow -> sheesh -> wtf -> i give up -> fu*k it, lets buy some more

Oil: may get at 89 handle

Gold: lets see if it holds 1525

Silver: may get a 26 handle

TZA: looking good though (bear small caps)

pforth · May 23, 2012 - 11:05am

Would you let silver double bottom here, or would you find a way to push it down another 80 cents or so to trigger more algo selling to continue to suppress the price?

opticsguy · May 23, 2012 - 11:07am

for once the miners didn't crash 3x as much as gold. A leading indicator?

onealpha · May 23, 2012 - 11:08am

Do you remember that feeling you had when silver was at $45+. That feeling that you were pretty darn smart. All those friends who had ignored your advice at $15, $20, $25, were now telling you what a genius you were. They all told you how they should have listened to you back then. When you watched the Dos Equis commercial and thought that you may actually be, "The Most Interesting Man In The World". Well if you remember that feeling, hold on to it, attach a note to it that reads, "This is the time to sell". That is all.

ivars · May 23, 2012 - 11:09am

Did we see todays bottom around 27,10? That would be very nice, at USDx 82,13. Silver is struggling but slowly gaining against the USD.

Groaner pforth · May 23, 2012 - 11:10am

Those are very harsh words..

it should be ,, Vampire blood sucking leaches bankers.

gatortrader · May 23, 2012 - 11:10am

For some fireworks kids. Looking for +$30 here

Groaner gatortrader · May 23, 2012 - 11:11am

will do it.

tmosley onealpha · May 23, 2012 - 11:13am


If you are selling for dollars, then you have learned nothing.

Tube · May 23, 2012 - 11:18am

DELL down 16%...shorts being restricted

Groaner · May 23, 2012 - 11:20am

What a hole! as Stern said we he walked through the door in Home alone 2

onealpha · May 23, 2012 - 11:21am

Just my attempt at some levity. I should have added the disclaimer at the bottom of my post. I am in it to win it. Bankers be damned. Long term owner. I do regret not swapping some silver at the GSR 30;1 but that is another story.

rl999 · May 23, 2012 - 11:24am

"Hewlett-Packard will announce another round of substantial job cuts Wednesday afternoon in an effort to streamline its teetering PC and services businesses, a source familiar with the plans told Fortune.

The layoffs will be "in the ballpark" of 25,000 workers, the source said, which would amount to about 7% of HP's global workforce."

Link to CNN article


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