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

Hawk
Jun 1, 2012 - 10:52am

Shorts getting ripped a new one, hate to say I told you so....

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

Patience, grasshopper

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

Speaking of Negative Real Interest Rates...

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

How U Like Me Now??????

Santa's Back!!!!!!

OC15
Jun 1, 2012 - 10:57am

Crude down 20%

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

Mickey
Jun 1, 2012 - 10:57am

I refied yesterday

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

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

yes but a bit to late to step in.

Jun 1, 2012 - 11:01am

re euro collapse

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

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

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