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

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  258 Comments

  Refresh
tmosley
Jun 1, 2012 - 10:38am

Gold is rallying because

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.

OC15
Jun 1, 2012 - 10:37am

So what do you think they will do (repost)

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%.

StevenBHorse
Jun 1, 2012 - 10:37am

Ballerish action

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

50sQuiff
Jun 1, 2012 - 10:35am

Hardly the most erudite thing

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.

Louie
Jun 1, 2012 - 10:34am

I'll have a 5th!

5th- 5th- 5th!

Feed the Turd!

Sign up for the monthly plan!

NoSurrender
Jun 1, 2012 - 10:34am

Rare disconnect between Stock

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

Mudsharkbytes
Jun 1, 2012 - 10:33am

3rd

In the top 10 two days in a row!

iceman321_2k2
Jun 1, 2012 - 10:32am

Patience Really Does Pay in Gold and Silver...

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/

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Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
9/15 9:15 ET Cap Ute and Ind Prod
9/16 8:30 ET Retail Sales
9/16 10:00 ET Business Inventories
9/16 2:00 ET FOMC Fedlines
9/16 2:30 ET Powell Presser
9/17 8:30 ET Philly Fed
9/18 8:30 ET Current Acct Deficit

Key Economic Events Week of 9/7

9/9 10:00 ET JOLTS job openings
9/10 8:30 ET Initial jobless claims
9/10 8:30 ET PPI
9/10 10:00 ET Wholesale Inventories
9/11 8:30 ET CPI
9/11 9:45 ET Core CPI

Key Economic Events Week of 8/31

9/1 9:45 ET Markit Manu Index
9/1 10:00 ET ISM Manu Index
9/1 10:00 ET Construction Spending
9/2 8:15 ET ADP employment
9/2 10:00 ET Goon Williams
9/2 10:00 ET Factory Orders
9/3 8:30 ET Initial jobless claims
9/3 8:30 ET Trade Deficit
9/3 12:30 ET Goon Evans
9/4 8:30 ET BLSBS

Key Economic Events Week of 8/24

8/24 8:30 ET Chicago Fed Idx
8/25 10:00 ET Consumer Confidence
8/26 8:30 ET Durable Goods
8/27 8:30 ET Q2 GDP 2nd guess
8/27 9:10 ET Chief Goon Powell Jackson Hole
8/28 8:30 ET Pers Inc and Consumer Spend
8/28 8:30 ET Core Inflation
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Key Economic Events Week of 8/17

8/17 8:30 ET Empire State Manu Idx
8/17 Noon ET Goon Bostic
8/18 8:30 ET Housing Starts
8/19 2:00 pm ET July FOMC minutes
8/20 8:30 ET Jobless claims
8/20 8:30 ET Philly Fed
8/20 10:00 ET LEIII
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Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
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8/13 8:30 ET Initial jobless claims
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8/14 8:30 ET Cap Ute and Ind Prod
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8/3 9:45 ET Markit Manu PMI July
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8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
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8/7 8:30 ET BLSBS for July
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