Getting Real, Real Fast

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:

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

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!


About the Author

turd [at] tfmetalsreport [dot] com ()


Jun 1, 2012 - 11:40am

Disorderly to the Upside!

I love hearing disorderly to the Upside. It just sounds so great and it's extremely funny just to say it.

Jun 1, 2012 - 11:41am

re: Oil

Duly noted T, twould appear I need to get me some more fingers...

Jun 1, 2012 - 11:42am

My Friend

Some might remember, the friend I discussed a few day back who was debating his first foray into the Silver market (after finally coming to his senses). I suggested, after listening to those here, to buy a third of his planned purchase and to wait until Friday to benefit from BLBS sell off. I just got off the phone with him. He didn't take my advice. He bought 50% of his planned purchase yesterday morning during sell off. Now he thinks he's some sort of silver whiz . . . how annoying. He says he was certain this morning's report would be a disaster and that the PMs would rally as the world's financial decay became obvious to all. Smart move.

Jun 1, 2012 - 11:47am


Hmmns, maybe we could use your friend as sort of an 'idiot savant', who can interpret the shambles through new eyes. I hate smart asses. But at least he can buy the next round. (that was an inadvertent pun)

And do you stack canines? We are stuck at one, but I dream of multitudes - although they will be hard to fit on the boat.

Jun 1, 2012 - 11:49am

Yeah, something's up

Gold has finally separated from the stock market plunge. I figured it would, but wasn't sure when. Whatever started on 5/5 just keeps growing.

Hold on, we ain't seen nothing yet.

Jun 1, 2012 - 11:54am

Off to my favorite mortgage

Off to my favorite mortgage broker to refi this afternoon -- getting 30 years, zero points, 3.67. Never thought I'd see the day. At this rate I may be paying him another visit in a year.

bam Stock_Canines
Jun 1, 2012 - 11:54am


Be sure you are there to counsel him the next time the PMs get smacked.

There's no question it's possible to go back below yesterday's prices. How would he react?

First time PM investors have a steep learning curve in terms of stomach strength.

Jun 1, 2012 - 11:55am


On the 'turdisms' page, it's listed as 'LHSI', not 'LSHI'.

The "Liesmans Head Shine Index" works for me too.

Dyslexia maybe?

Jun 1, 2012 - 11:55am


The spread between FB and GDXJ is about 7.50 a few min. ago.

Hat tips to all those posts reigning in the exuberance. A wonderous one day pop, on Friday no less, means little when you look at where we should be. But it's a start.

Let's see the follow thru.

London closed Mon. & Tues.? Could be the start of a bank holiday there? Sorry, believe it when I see it.

QE? Isn't that like more ammo for the banksters?

Don't mean to sound negative but I don't see much reason to get overly excited at this point but the clouds do seem to be lifting.

Jaded bull.

Jun 1, 2012 - 11:55am

I have been reading lots

I have been reading lots about gold stocks being undervalued and in fact going up recently as the DOW goes down.

As I see it the risk is if the market tanks as a collapse happens.

Anybody buying here ? I think buying them is risky not due to fundamentals but due to the a possible entire crash of the DOW.

Am I wrong ?

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