Welcome to the updated TF Metals Report! We hope you enjoy the new experience.

We've changed payment processors, so any existing renewals will need to be re-subscribed after expiration. You will receive an email when this happens. If you have any questions, send a message through the Contact page.

Getting Real, Real Fast

258
Fri, Jun 1, 2012 - 10:29am

Your blissfully unaware family and friends notwithstanding, the global financial "situation" appears to be deteriorating rapidly. I hope you have prepared accordingly.

First this morning, I suppose we should address this month's BLSBS. As you know, the period between 8:25 EDT and 8:35 EDT on the first Friday of the month is the only time all month when I actually watch CNBS. Today, the usual crowd of misfits populated my screen. There was The Shill happily expecting glorious growth. The Coug was prowling and LIESman was stuttering, as usual. Then, the party ended when we went "Live to Hampton Pearson at the Labor Department". No real reason for me to rehash the dismal numbers with you as I'm sure you've had enough of that already. I don't wish to add some color, however.

  • The media will tell you today that gold is rallying on fresh "hopes" on more QE. Bunk. This is not true. Gold is rallying on fear. If gold was rallying on QE, why are stocks down? Why is crude down? Additionally, gold is rallying and extending gains because of a squeeze in the massive spec short position that has been built up over the past month or so.
  • The last commercial I saw before the numbers were released was a promo for a CNBS program that promises to "show you how you can profit from the declining euro". Looks like the bottom is close there.
  • The printed NFP was +69,000 but the "birth/death adjustment" was +204,000. This means that, without the BLS statistical make-believe, the actual number might be -135,000. I wonder how shiny LIESman's head will get as he attempts to spin that? Chances are he won't even try.
  • The 10-year note is now at 1.47%. This is incredible! Even using the nonsensical and worthless CPI, the 10-yr now has a -1.0% real (inflation-adjusted) annual return.
  • The 30-year Long Bond is at 2.55%. Never in my life did I think I would see the day when the Long Bond yield fell below the stated rate of inflation. Well, OK, maybe I thought it was possible that the Long Bond might yield 10% when the CPI was 12% but parity? At 2.5% Amazing!
  • And crude is now down over 20% in the past month alone. This in spite of the ongoing, geo-political risk in The Middle East.

Speaking of crude, anyone thinking of buying some had better take a long, hard look at the chart below.

(I just snuck a peek at gold here at 10:10 EDT. UP to $1610. Wow! Continuing to rally post the PM fix. Very surprising.)

As stated above, the metals soared on the BLSBS and are continuing to rally. Fear, short-squeezing and QE anticipation are driving things higher. For gold, a move through and close above $1610 would be very exciting. Your short-term target to watch in silver is $29.

I mentioned negative, real interest rates above. Remember, negative real rates are a hugely positive indicator for the precious metals. If you need a refresher on this, go here: https://www.tfmetalsreport.com/blog/3325/case-you-missed-it

Today's CoT is going to be very, very interesting when it is released at 3:30 EDT. I'll be sure to post some comments and analysis once I see the numbers.

Lastly, please take a few minutes to page through this scribd doc. It was written by Raoul Pal, one of the most successful hedge funds managers of all time. Doom? Gloom? Yes. Heed his warnings.

The End Game

https://www.zerohedge.com/news/big-reset-2012-and-2013-will-usher-end-scariest-presentation-ever

I cannot imagine that I won't have more for you later on this crazy, crazy day so please keep checking back. Gold is now 1617! WOW!

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  258 Comments

iceman321_2k2 · Jun 1, 2012 - 10:32am

The current situation is somewhat reminiscent of 2008, when investors rushed into dollars as gold fell from $1,000 to nearly $700 per ounce and silver plunged from $21 to $9 per ounce. Looking in the rear-view mirror, patience has clearly been a smart strategy for investing in precious metals. Gold and silver both skyrocketed off their lows made in 2008 as central banks turned to money printing as a band-aid for a bullet wound. The dollar is currently experiencing strength, but what happens when the Federal Reserve is forced to step in and apply more band-aids, as it did with QE1, QE2, Operation Twist and European swap lines?

https://wallstcheatsheet.com/stocks/patience-is-a-smart-strategy-with-gold-and-silver.html/

Mudsharkbytes · Jun 1, 2012 - 10:33am

In the top 10 two days in a row!

NoSurrender · Jun 1, 2012 - 10:34am

Rare disconnect between Stock markets and gold. US & Europe all red - Gold up ! For once as you would expect . Dare i say 'Inflection Point'?

Louie · Jun 1, 2012 - 10:34am

5th- 5th- 5th!

Feed the Turd!

Sign up for the monthly plan!

50sQuiff · Jun 1, 2012 - 10:35am

Hardly the most erudite thing I've ever posted on the internet, but it's f*cking sweet to see all the Chicken Little gold "bulls" get smoked. These ADD-addled traders, who actually believe in fiat currency deflation have been trying to outdo eachother on how low their gold price targets can go. Maybe a few of them will find their nutsack, having had their balls handed to them today.

Soon, perhaps all this garbage about "gold can only move on QE3", "the Euro is going to collapse" and my personal favourite, "the CoT doesn't matter!" will cease.

StevenBHorse · Jun 1, 2012 - 10:37am

Specs of all stripes in many markets are getting sent to the blast furnace today.

OC15 · Jun 1, 2012 - 10:37am

with mortgages that everyone is refi-ing with this collapse in rates? Below 3.5% for a 30 year? Do you think the gov't comes in and forces you to refi at a higher rate later? Been thinking about refi-ing my house down from 5%.

tmosley · Jun 1, 2012 - 10:38am

Gold is rallying because humans see what is going on, but fail to understand the difference between heavy metal and COMEX paper, and as such they are buying paper with the words "gold" and "silver" stamped all over it, because they know debasement is coming. Oil and stocks will rise when QE actually starts as the money flows into the banks, and the bankers use it for speculation.

People are acting like this rally happened on the back of a QE announcement, rather than dismal data that will almost certainly LEAD TO a QE announcement. Cause and effect are reversed in some minds here.

European American · Jun 1, 2012 - 10:39am

When Gold hits $2000 and Silver $50, then we'll be talking "WOW".

Big Buffalo · Jun 1, 2012 - 10:51am

One day at a time my friend. This is a happy day for Turdville. Let's enjoy it a bit.

Hawk · Jun 1, 2012 - 10:52am

Sorry but didn't I post something about shorts getting ripped a new one yesterday? Watch $1650 people this isnt exciting yet, June Fed meeting will be absolutely huge.

HAWK

Colonel Angus · Jun 1, 2012 - 10:53am

It's what I've tried to show all along. I went really really margined long on the PMs when I was able to buy gold at $1600 last time and silver at $29. I missed it by a little bit, but I think it will pay off. And yes, this is all physical...and the margin is from credit cards at 0% interest. I still had a little bit of dry powder and added more at the lows. I wish I had used up that last $10,000 or so of cc margin...oh well...there were days when I was worried, but the Turd and all of you helped me to keep the faith. And I still do.

It helps that I'm short the TBTF banks and long FAZ. This will all turn on a dime, and we need to be nimble on those stock calls. The day is coming when Uncle Sugar will bail out the TBTF again, and their prices will increase. BE CAREFUL!

Interesting piece by Raoul Paul. I seem to like a lot of guys who could be called R. Paul.

esentrik · Jun 1, 2012 - 10:54am

Gold climbs when real interest rates are low or falling, while high or rising real rates negatively impact it. This pattern was true in the 1970s and it's true today.

https://www.caseyresearch.com/articles/golds-critical-metric

Desert Fox · Jun 1, 2012 - 10:55am

Santa's Back!!!!!!cool

OC15 · Jun 1, 2012 - 10:57am

Gas prices only down a little more than 10%, and so we see how the game is played.

Mickey · Jun 1, 2012 - 10:57am

2.875 for 15 years-no tax escrow-no points

was in last year of ARM--we might see low rates for another short period of time but I think rates do go higher (how about credit risk) and I just locked myself in so I do not have to worry about that--if I have to I pull out a 1 oz eagle and pay my monthly mortgage--or maybe a 1/2 oz eagle. or a tube of silver eagles.

Pax Argentum · Jun 1, 2012 - 10:58am

While I'm somewhat pleased to see the jump in the PMs, it's tempered with the realization that we are damned close to the tipping point. Turd's commentary is dead-on that the bonds are telling the tale...and it doesn't have a happy ending.

As for me, I'm wondering if more Cu-jacketed Pb isn't a better purchase than more Au/Ag.

Pax

Feed the Turd.

ZILVERMAN European American · Jun 1, 2012 - 11:00am

yes but a bit to late to step in.

· Jun 1, 2012 - 11:01am

It may seem like 'garbage' to some that the euro might collapse, but others do take it seriously:

Bracing For A Euro Crash And Creating A Housing Bubble: The Swiss Caught In A 

Vice

TUESDAY, MAY 29, 2012 AT 9:02PM

As developments in the Eurozone veered from bad to awful, with Greece on the brink and Spain getting closer, Switzerland, a speck of land with 7.9 million people surrounded by Eurozone turmoil, has been bracing itself, according to the President of the Swiss National Bank and long-time euro-skeptic Thomas Jordan, for the collapse of the euro.

"We start with the thought that Greece will not exit the Eurozone," he said in an interview in the Sonntagszeitung, and then came the but—actually a whole slew of them.

"Our baseline scenario anticipates a protracted period of great difficulties," he said. "The situation will only calm down when budget cutting and reform efforts start working in the Eurozone, which could be a long time. We're preparing for very turbulent times." And Greece's exit, he said, "can't be excluded”—thus following in the footsteps of Jens Weidmann, President of the German Bundesbank, who’d ventured into a veritable lion’s den with a pungent interview in Le Monde. Read....The President of the Bundesbank Lashes Out.

And even if Greece remained in the Eurozone, “contagion could spread to other countries and escalate the debt crisis." Less worried about trade and banking relationships with Greece, he saw the greatest dangers in the indirect consequences: “It’s conceivable that the entire European banking system gets into trouble. It would pull down the economy of Europe. Other highly indebted countries could get in trouble as well. That would pose high risks for us."

...

https://www.testosteronepit.com/home/2012/5/29/bracing-for-a-euro-crash-...

ZILVERMAN European American · Jun 1, 2012 - 11:01am

yes,but a bit late to step in,right?

Mickey · Jun 1, 2012 - 11:02am

let's temper our emotions. keep it healthy and measured.

Now we need to a) keep 1600 and b) see follow thru early next week.

all markets are a mess right now and we will see frequent overreaction and of course volatility

For our pm--If you are not early to this party you will be late. And while the price of being early recently has been painful, it would be more painful being late to the party.

Eric Original · Jun 1, 2012 - 11:04am

Dow and S&P both giving up their 200 day MA's today. Metals and Miners holding big gains.

Sorry, I just can't help myself...

Looking Good Billy Ray
Hoping to learn · Jun 1, 2012 - 11:04am

When the SHTF everyone will flock to the US $ and the US market for safety, causing gold to be sold off to create the dry powder they all need to participate. Then as stocks soar along with the dollar, smart money will pour into commodities (Hopefully AU and AG) causing Gold and Silver to rise as most realize the US really isn't any safer than anyone else, just farther back in the collapse cycle. Do I have this correct, or am I missing something ? If I have this correct, how long do you think we have until they figure it out and start selling off the stock market ?

ragemachinest · Jun 1, 2012 - 11:06am

https://finance.yahoo.com/news/this-bright-eyed-young-man-was-utterly-demolished-by-student-loans.html

What a dumbass. The guy in the article and the way the sob story is portrayed by the author is what is wrong with our country. Everyone wants a way out for making poor decisions, wants us to feel sorry for him, and wants everyone else to pay for it. Let's just bail everyone one out of everything. Give ME a break (don't worry, giving me a break is costless).

Lanikai · Jun 1, 2012 - 11:08am

with soon to be $2.50 at the pump, refinance at 3.5%, and let's see, hum, what else will get Obama reelected? Food prices, new jobs....

For those who have prepared for a longer term future, you already hold the winning ticket.

Hoping to learn · Jun 1, 2012 - 11:10am

Where do you place a company like SLW Silver Wheaton ?

or it's counter part Sandstorm Gold SNDXD ?

Both deal only with the physical and don't have mining liability.

thecoloredsky · Jun 1, 2012 - 11:12am

Gold skyrocketing isn't good for the central planners. If gold can decouple with the current bear market and head higher, its going to be balls to the wall crazy gains when the next QE gets unveiled. At least thats my take.

silverstax · Jun 1, 2012 - 11:13am

Excellent read! Some takeaways:

  • We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses.
  • Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe.

It seems that a lot of people think the reset is coming AFTER the US elections, but who knows if the wheels will even stay on that long?! The events of the last couple of weeks have me convinced that it is very unlikely we will make to the end of the year - I think the wheels are coming off right now and the time we have left to prep is measured in weeks, not months.

Keep stacking - silver, gold, and tin (as in canned hams)!

Godspeed everyone.

BrentLawrence · Jun 1, 2012 - 11:18am

Nice little jump! On Edit: Well it looks like this is the end? https://www.zerohedge.com/news/big-reset-2012-and-2013-will-usher-end-sc... "We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses. Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe. After that…we put on our tin helmets and hide until the new system emerges And the punchline From a timing perspective, I think 2012 and 2013 will usher in the end." Raoul Pal

SV · Jun 1, 2012 - 11:19am

Looks like trendbreaking on Wednesday is carrying us through the week!

https://silvervigilante.com

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

Contribute

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 11/12

11/14 8:30 ET Consumer Price Index
11/15 8:30 ET Retail Sales
11/15 8:30 ET Philly Fed
11/15 8:30 ET Empire State Fed
11/15 10:00 ET Business Inventories
11/16 9:15 ET Industrial Prod and Cap Utilization

Key Economic Events week of 11/5

11/5 9:45 ET PMI Services
11/5 10:00 ET ISM Services
11/6 US Mid-term Election Day
11/8 2:00 ET FOMC Fedlines
11/9 8:30 ET Producer Price Index
11/9 10:00 ET Wholesale Inventories

Key Economic Events week of 10/29

10/31 8:15 ET ADP employment
10/31 8:30 ET Employment Cost Index
11/1 8:30 ET Productivity
11/1 10:00 ET ISM Manu Index
11/2 8:30 ET BLSBS
11/2 8:30 ET Balance of Trade
11/2 10:00 ET Factory Orders

Recent Comments

by pennywise, 32 min 4 sec ago
by AGXIIK, 4 hours 7 min ago
by NW VIEW, 5 hours 9 min ago
by NW VIEW, Nov 14, 2018 - 11:40pm
randomness