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 ()


Steinbacken · May 23, 2012 - 3:23pm

29% Inventory index drop since 5/8

My little inventory market-tracking (Silver! bullion) index is down over 29% from a high of 121+ on 5/8/12. Today the Backenstein Index was just recorded below 86.

This is by far the largest drop since I started quantitatively tracking this with 2/3/12 as the basis, but also occurred over the longest period so far described. Much of the buying during the period (I assume) appears to be from larger commercial or whale private purchasers, as they are the larger species {100's, 10's in lots, etc.} or lot or large purchases of the the two 1-oz classes. This indicates to me that the little guys (like me) still aren't in the market for the most part (as purchasers.)

The index numbers are not absolute inventory numbers for complex reasons, so they don't necessarily mean all that much, except relative to each other. Therefore, that the Index is finally below 90 today, and spectacularly (at sub-86), is significant to me and the whole reason I'm doing this. It doesn't at all indicate shortage, IMHO, but does indicate a potential progression in that direction, so future measurements will be interesting....


Alternatively, and not likely IMHO, is the possibility that this major retailer is just taking stock off the shelves.

recaptureamerica · May 23, 2012 - 3:23pm

Oh, mortgage amortization? It

Oh, mortgage amortization? It takes almost 23 + years of a 30 year mortgage to pay down 50 % of the principal. That means the last 7 or so years you get to pay for the other 50% of the house. Your interest is paid up front.. Used to be a profitable investment. Yes there are plenty of ways to accelerate and decrease the payment total, like making just one extra payment a year spread out over 12 payments ..done so over the life of the mortgage, will decrease your mortgage to about 19 years instead of 30. TPTB took care of the one investment the average person could count on as a nest egg...now it's like many Turdonians Stash... Under water..

opticsguy · May 23, 2012 - 3:32pm


Another number to remember, 240 (or 235). Divide that by the percentage and you get the number of periods for a 10x multiple.

e.g., 5% monthly inflation for 48 months = 10x (approx). 4% yearly inflation for 60 years = about 10x.

More useful where we're headed.

JML-2012 · May 23, 2012 - 3:34pm

Cheers Ivars!

Btw, I bought the dip this morning at $27.17 and added some Maples to the collection. Watched the 1-minute red candles fall for over an hour then locked in the order when it looked ready to bounce. Cant help but love catching those falling knives! Thanks Citibank (u crooks)! Have to admit there's a part of me that relishes the irony of purchasing silver at 0% with my JPMChase card. devil

I Run Bartertown · May 23, 2012 - 3:34pm


'They should deliberately force some places that don’t want immigrants to take them, because that’s the only solution for these big hollowed-out cities.' — Mayor Bloomberg AFP/Getty Images 'They should deliberately force some places that don’t want immigrants to take them, because that’s the only solution for these big hollowed-out cities.' — Mayor Bloomberg

“I would argue the federal government should go one step further. They should deliberately force some places that don’t want immigrants to take them, because that’s the only solution for these big, hollowed-out cities where industry has left and is never going to come back unless you get some people to move there.”




“If Europe wants to remain true to its ethical and spiritual foundations, it must embrace people from different cultures, religions and ways of life. If not, it will not only fail as a concept, it will lose its soul,” said FFEU President and World Jewish Congress Vice President Rabbi Marc Schneier.



"Israel PM: illegal African immigrants threaten identity of Jewish State..."If we don't stop their entry, the problem that currently stands at 60,000 could grow to 600,000, and that threatens our existence as a Jewish and democratic state," Binyamin Netanyahu said at Sunday's cabinet meeting. "This phenomenon is very grave and threatens the social fabric of society, our national security and our national identity."


Somebody wants to save a society and keep its character. Oh, but not us. That would be Xenophobic and Evil. That's only OK for Religious Supremacists.

Stock_Canines · May 23, 2012 - 3:35pm

Just Curious

Does anyone (Turd, others) care to provide some fodder for the trolls by throwing out their best estimate for high price of silver over the next 12 months? Promise not to use it 12 months from now against those who are brave enough to speculate. Just curious as to people's expectations. Cheers 

recaptureamerica · May 23, 2012 - 3:37pm

Optics guy, Ty.. I know that

Optics guy, Ty.. I know that one too. :)

foggyroad · May 23, 2012 - 3:37pm

End game

Silver traded for Gold at 15 to 20 GSR , gold traded for post reset currency or farm, art, collectables of some sort. But sell at 49 USD/FRN,s @ 50 percent of 1980's buying power, thats the whole point behind investing in Pm's and Mining stocks.

Mining stocks are Money trees, you are buying ounces in the ground, dividends and huge potential cash flow.

In future, Mining stocks will ride the bull as they did during The Great Depression ie. Homestake mines.

What Happened to Gold Stocks in the Great Crash Era (1929 - 1935)?

In October 1929 equities had reached unprecedently high levels of valuation. Although there were several causes of the 1929 crash, much of the blame may be attributed to the abuses of the infamous investment trusts - which enjoyed wildly accelerated growth from 1924 to 1929.

It is interesting to recall that the investment trusts of the 20s were the forerunners of what we refer to today as mutual funds. It was primarily through the channeling of the public's savings via the investment trusts that drove stock valuation ratios to astronomical - indeed unrealistic - levels in late 1929. Unfortunately, there was no securities' law nor S.E.C. at that time to curtail market abuses, manipulations and/or excesses leading to the bear market 


"Gold has worked down from Alexander's time.....
When something holds good for two thousand years,
I do not believe it can be so because of 
prejudice or mistaken theory."

Thoughts ?

printmemoney · May 23, 2012 - 3:37pm

looks like the EE didn't wait

Tostick it it in the spec shorts tomorrow.............so they just did it today

recaptureamerica · May 23, 2012 - 3:38pm

Off topic. Coke reveals its

Off topic. Coke reveals its secret: It may need to carry a cancer warning https://www.independent.co.uk/life-style/health-and-families/health-news...

R man J tpbeta · May 23, 2012 - 3:39pm

It would not be suicidal

It would not be suicidal to KEEP my stack at $28 if I knew it was going to $14 if it was due to:

Deflation. (i.e., homes, land, autos, stock market drop by 70%+)

Paper price drops to $14 but I could not replenish my stack. (Due to silver shortage, or lack of money in my bank account.)

To be trapped without my stack is a worse fate than losing 50%

· May 23, 2012 - 3:40pm

thought experiment for what purpose?

"suicidally irrational' is not an improvement on 'idiot'. 

recaptureamerica · May 23, 2012 - 3:42pm

Sooprise sooprise

Sooprise sooprise sooprise!... Golly.. Look at the Dow..shazammm

gatortrader · May 23, 2012 - 3:42pm


Is steaming, just as suspected. My $30 are in, lets see where we end up tomorrow. Still see 1600 by friday

HeNateMe · May 23, 2012 - 3:42pm

Seeing Hindly

The future and past would both have to exist objectively in order to even raise the question of hindsight.

But since time is only a figment of our imagination questions of hindsight are best left unanswered.

Now, if you want to play Let's Pretend, we could imagine the following: if the future did exist, and I could know the intimate details of said future, I would make sure to take full advantage of that knowledge. I would buy and sell with complete abandon and make as much fiat as I possibly could. Peering into the future, I would buy every undervalued asset just at the point where they begin their mega-bull runs. Then, knowing their tops, I would sell for more fiat. I would be be filthy sticking rich. All of my wildest dreams would come true.

But probably, in the end, I would get tired of this "cheat code" and refuse to play the game anymore. I would more than likely become some sort of philosophical seeker. I would then follow dogmas, religions, and philosophies for 7 - 10 years - after which I would come to the conclusion that everything we hold to be existing is just a figment of the One True Self's imagination. I would then realize that I am The One True Self. 

And then I would respond to a comment on www.tfmetalsreport.com. Within my reply I would state that, "The future and past would both have to exist objectively in order to even raise the question of hindsight. But since time is only a figment of our imagination questions of hindsight are best left unanswered."


recaptureamerica · May 23, 2012 - 3:45pm

I guess the hamptonite

I guess the hamptonite shyster banksters need some cash for their massage therapists, tennis lessons, new coke, and catering this weekend?

recaptureamerica · May 23, 2012 - 3:48pm

Not too shabby..a 340pt

Not too shabby..a 340pt swing..From open to close... Dow Jones Industrial Average (^DJI) -DJI 12,487.67 15.14(0.12%) 3:46PM EDT Add to Portfolio Prev Close:12,502.81 Open:12,501.52 Day's Range:12,311.56 - 12,508.30 52wk Range:10,362.30 - 13,359.60 Go PPT! You still got chutzpah!

SilverWealth · May 23, 2012 - 3:51pm

bear bounce

classic bear market bounce in gold. Who knows where it goes? It is in a downtrend. Until it crosses over 1600 I won't be getting excited and it will need to break its trendline. Its good for daytrading I suppose if you are into picking bottoms.

What was M. Armstrongs target from today's article? I have no idea.

I like all of you regardless. I would love to see Gold break out of its funk. I am not seeing a lot of volume on this bounce. If you compare the volume of selling in the morning to the volume of buying now its not bullish imo. Buying is considerably lighter in Gld.

Concerning the criminal sociopath A. Greenspan. It has already been predetermined in Heaven that Alan will descend into the lower realms and serve as new Groom of the Stool for Hitler,Stalin,Mao and Mr Khan. He will work 20 hrs a day directly beneath the royal hole wiping and cleaning and collecting tyrant feces in a bucket and then dining on it at day's 'end'. For someone who spent his entire life robbing and lying and ruining world economies of scale this is small punishment but it will be for eternity so maybe that will suffice.

tpbeta George Clooney · May 23, 2012 - 3:53pm


Are you seriously saying that if you were given the opportunity to see the future and you knew that your stack would halve in value in the next 12 months, the alternative being you could sell it and buy it back at half the price a year later, you would refuse to do so?

If that's the case (and I find it impossible to believe that it is) then suicidally irrational seems fair comment.

I Run Bartertown · May 23, 2012 - 4:04pm


"Are you seriously saying that if you were given the opportunity to see the future and you knew that your stack would halve in value in the next 12 months, the alternative being you could sell it and buy it back at half the price a year later, you would refuse to do so?

If that's the case (and I find it impossible to believe that it is) then suicidally irrational seems fair comment."

Setting aside that it's along the lines of a 'superman could beat up wolverine' argument, 

if you have a core mistrust of the pricing mechanism (and the fiat you would get), why would you play that game? The concept of price being driven down as TPTB scoop up assets cheap is central to much of the discussion here. It seems more irrational to me to think people WOULD buy into such a 'sure thing'.

Mudsharkbytes · May 23, 2012 - 4:05pm

Not 'suicidally'

perhaps a bit irrational, but the entire discussion is irrational since this is an impossible scenario absent a time machine or precognitive abilities.

Why would somebody who knows without a doubt silver, or any commodity is going to drop by 50% in a year not sell and wait? Maybe they're worried there won't be any available for them to buy back in later - the old 'bird-in-a-hand' analogy.

Yes, had I known what a kick-in-the-nads was over the horizon last April, I would have sold and bought back in on this latest dip, but you simply can't 'know' and anything else is gambling.

Grigeo tpbeta · May 23, 2012 - 4:06pm

to see the future

"Are you seriously saying that if you were given the opportunity to see the future...."

All I can say is.... Ignore User

thesandbox · May 23, 2012 - 4:07pm

new thread

new thread

foggyroad · May 23, 2012 - 4:09pm

Welcome JML

You are not alone in Your Dilemma, I would say.

Jan 2011 Pm market was entirely different than todays, Bullion banks were much more reluctant to leave there intervention footprints in 2011, now their blatant, and don't care who knows it.

HFT algos are used extensively now.

I suppose it depends on Your viewpoint on QE before the election, Black swans on the horizon, some sort of Regulatory action that prevents oversized short position limits on the Comex, and Comex relevancy.

Really, what causes the Range trade to break is anyones guess, will it happen? Yes, when?

Thats the 100 dollar question!

Thoughts from Fellow Turdites?

Submitted by JML-2012 on May 23, 2012 - 3:14pm. 4

First post, long time daily reader. I have my own take on the argument regarding the importance of the fiat value of PMs. After waking up to the dire economic realities back in Jan. 2011 I watched on the sidelines as PM's soared into the spring, still too new to the idea and leary of jumping in with little cash savings I and my family had stashed away. But after the initial May beat down and months of scouring the net day and night reading all the familiar PM and collapse-related blogs, by late summer increasingly convinced that PMs were the only true financial safe haven, I decided to go with my guts and began purchasing PMs on the dips. But with little cash savings that I didn't want to exhaust completely, I was extremely limited in what I could buy. So about 6 months ago, I was receiving multiple credit card offers at 0% for 12 and 18 month periods. After much thought, I decided it was a risk worth taking. I've since maxed two cards up to about $20k, have cost averaged my silver at a bit over $35/oz and I still have a year of 0% on those loans to go. Several small gold bars purchased too for diversification. Little by little each month I pay these debts down (abt $400/month), but there's no way I'll have them paid off entirely by the time the 0% rate expires. So basically I'm counting on there being a large enough fiat-price increase in silver between now and then that I can sell off a portion (40% or so) of my stack to pay down all of the remaining balance of this borrowed money before interest kicks in. I'm stacking for a means of not only financial protection, but also debt reduction. Any thoughts on this strategy? I mean if silver hits $60 or $80 by next summer I can pay down the debt and retain a decent stack to help safeguard my family thru the shitstorm on the horizon. But if it keeps in this downward spiral for too long, I may be a bit fcked! The point is, this is a gamble for some of us who don't have the financial means to convert thousands of $'s into PMs but also understand the fundamentals and don't want to be on the shit end of the stick through this major global shift occurring. So there it is. That's my reasoning for wanting to see prices spike before too long, and not eternally celebrating beat downs as stacking opportunities. May good fortune smile upon us all who seek and yearn for truth.

foxenburg · May 23, 2012 - 4:09pm

yes, i am afraid that those

yes, i am afraid that those who bought, like i, in late 2011, are trapped on a train that has entered a very long tunnel, and we just have to trust in our own common sense to see this thing through. 

it seems i have taken off in foul weather with a full load of 500 ounces, and damn me if one of my two engines didn't fail just as i pulled up the gear, but i am still spiritually climbing and keeping the faith, and that sole remaining Pratt & Whitney is pulling 40 inches of mercury, so let's keep fingers crossed that i will eventually break though the cloud into safety and sunshine, absent crashing into a mountain, at 2000 an ounce. so i can sell my stash and i vow never again to dip my toe into something i know nothing about. amen.

Prize Fighter · May 23, 2012 - 4:11pm

Jackass sounds the alarm

USTBond Tower of Babel Teeters

By: Jim Willie CB, GoldenJackass.com
-- Posted Wednesday, 23 May 2012



A great urgent need has come for a rally to 1.5% in the TNX (10-year USTreasury yield) in order to save the IRSwaps from implosion. The Tower of Babel is teetering. A bond rally would thus render the tower wider at the base. The final losses will be in the hundreds of $billions in the next several months, eventually possibly to top the $1 trillion mark by next year. My source from Europe wrote, "An event driven chain reaction has been triggered deep inside the system, with Interest Rate Swaps at the center. This has already gone viral. They will have to trigger some mega-crises, most likely in Europe & Greece, as a diversionary tactic. They need to have something to blame things on. Once Greece implodes, so will the big French banks and likely some Italian banks. It is all so obvious and predictable."

Look also for losses to London banks, enough to topple one or more. Hats off to Rob Kirby for correctly concluding the Interest Rate Swaps were at the center of the mega mushrooming JPM losses. It is coming to light slowly. Many analysts naively believe the USFed can monetize whatever ails the system. Not so, when the biggest credit market in the world (USTBonds) is involved. They can use the 0% money to paper over the hurricane for a while. In the May Hat Trick Letter report, several times it was repeated that the central problem is 0% rate with annual $1.5 trillion deficits, held together by hyper monetary inflation at the hands of the USFed central bank. The report contains a full 12-page chapter on JPMorgan alone and its events, traps, and basis for future loss. The USTBond Tower of Babel is very narrow and tall, like a tower that grows higher and higher each year, subject to the heavy winds. The recent bond market volatility has acted like slamming a hedge hammer into the Babel Tower base when strong winds from Europe hit the sides. The vagaries and complexity and wreckage of the sovereign bond market have begun to topple the tower. The tower will fall, and fall in a heavily populated urban area. It is going to be the most dangerous and exciting event in modern financial history, that climaxes with the death of the USDollar and announcement of the USGovt debt default. The main tough questions are timing of events. But as usual, the sequence will be from an event schedule. It has begun, and cannot stop.

When the USTBond tower topples, it will lead to the great release upward in the Gold price. A grand Gold bull market is near. As the safety and security of the USTreasury Bond market is unmasked (an asset bubble), enduring a devastating wreck, the global funds will flock into Gold. The timing will be simultaneous with the rejection of the USDollar in trade settlement, and the end of the famed Petro-Dollar. The Gold cartel cannot stop the price rise, because they will have no physical gold. They are being raided of their gold bullion by the East, to the tune of 5000 (five thousand) metric tons since the end of February. That figure was confirmed by my source, who also claims that the major banks are short well over 20,000 metric tons after illegally grabbing the Allocated gold accounts held in their custody. Law suits are occurring in Switzerland to this effect."

Be Prepared · May 23, 2012 - 4:20pm

A Future Unknown...a Past Understood....

The future.... is exactly that.... the future. If I knew a lot of things for certain, I would most definitely play my hand deftly to ensure the best and brightest outcome. Unfortunately, that's not my reality. I stack because I realize that most everything I see is going deeper into the abyss at a break neck speed. Everyone who is "stacking" should have a long term time horizon... hopefully, at least, a couple of years because TPTB can quite literally keep the wheels on this mess for longer than we want to endure it. We are not in control... the "We, The People" have very little influence on how things will unfold... that, though, shouldn't stop us from trying.

General Rules of Stacking:

(1) Buy when you can, a little at a time. Put some fiat aside so that you can take advantage of low dips, but, even then, in moderation with thoughts towards consistency. You still need to pay bills in fiat and have a fiat cushion while the system is in play.

(2) Don't stretch yourself in a position to where your buying PMs with the idea of selling them 6 months later. This irrational market will try to burn you against you with timing. Avoid debt as much as possible. If you do, understand how quickly the power curve of debt can reverse on the most well meaning of people.

(3) Don't watch the daily Comex or London fix as if your life depended on it. It's a measuring stick for your next purchase. When it's time to sell or convert, those measurements may have very little meaning.

(4) It's o.k. to sell. It's your hedge and, if your situation changes, do what you must. Always keep one silver coin to remind you to get back to creating a hedge when your financial circumstances change for the better.

There's a million other "rules", but common sense is always the play. If you want to play the GSR, you should. Everyone's plans will be different... there is no "one" size fits "all"... so it's great to exchange our ideas and perspectives. As I always say, do you have a written plan that you and your family have shared and agreed upon? If so, work your plan every day... even if it's just working towards the moment you can take the next step in the plan. Stacking without a plan puts you at a severe disadvantage because it's only part of a solution... not the solution. :-)

Lanikai · May 23, 2012 - 4:24pm

Collateral damage, Fed and JPM share 93 trillion balance sheet

Watch, it's very educational starting at at 14:45 with Francine McKenna https://maxkeiser.com/2012/05/22/keiser-report-scatological-finance/

JP Morgan losing money on hedges every time the Fed dumps money into the market causing them to take on more hedges....

Great irony, the collateral damage: due to JPM's lies and their destruction of global economy we have QE which has now trapped JPM. The end game is speeding up; 'the game' is not fooling anyone like it was in '08. A few months, a year, maybe two... be prepared.

· May 23, 2012 - 4:32pm

last thought

if I had sold it, I would not be able to get 'it' back. I like it. And I am still alive.

Groaner · May 23, 2012 - 4:32pm

Why do I think the whole market action today was

a setup? Especially the smack down in the metals.. How do you explain the markets coming all the way back from way down to flat?

The stinkers are stinking up the place with their foot prints.

Notice: If you do not see your new comment immediately, do not be alarmed. We are currently refreshing new comments approximately every 2 minutes to better manage performance while working on other issues. Thank you for your patience.

Become a gold member and subscribe to Turd's Vault


Donate  Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events week of 12/10

12/11 8:30 ET Producer Price Index
12/12 8:30 ET Consumer Price Index
12/13 8:30 ET Import Price Index
12/14 8:30 ET Retail Sales
12/14 9:15 ET Industrial Prod. and Cap. Utilization
12/14 10:00 ET Business Inventories

Key Economic Events week of 11/26

11/27 9:00 ET Case-Schiller home prices
11/27 10:00 ET Consumer Confidence
11/28 8:30 ET Q3 GDP 2nd guess
11/28 10:00 ET New home sales
11/29 8:30 ET Personal Income and Spending
11/29 10:00 ET Pending home sales
11/29 2:00 ET November FOMC minutes

Key Economic Events week of 11/19

11/20 8:30 ET Housing Starts
11/21 8:30 ET Durable Goods
11/21 10:00 ET UMich Sentiment
11/21 10:00 ET LEIII
11/21 10:00 ET Existing Home Sales