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 - 3:16pm

refi at all time low

You can refi every six months so with no points no cost it might make sense to do it now and see where rates are in 6 mos. Some will pay fees in order to get a lower rate and then not worry about it. Consider a 10 year fix if you can pay it off in that time period and also compare a 20 year amortization with lower rates than 30 yr.

csquared13 opticsguy
Jun 1, 2012 - 3:17pm

just making sure..nice trade

just making sure..nice trade otherwise. i was looking at NUGT last week and earlier this week, but trading restrictions had me watching from the sideline most of this week.

Jun 1, 2012 - 3:18pm

@ivars said: Who is it?

Scientific name: Amanita muscaria Amanita muscaria, commonly known as the fly agaric or fly amanita, is a poisonous and psychoactive basidiomycete fungus, one of many in the genus Amanita. Wikipedia Although it is generally considered poisonous, deaths from its consumption are extremely rare, and it is eaten as a food in parts of Europe, Asia, and North America after parboiling. Amanita muscaria is now primarily famed for its hallucinogenic properties, with its main psychoactive constituent being the compound muscimol. It was used as an intoxicant and entheogen by the peoples of Siberia and has a religious significance in these cultures. There has been much speculation on traditional use of this mushroom as an intoxicant in places other than Siberia; however, such traditions are far less well documented. The American banker and amateur ethnomycologist R. Gordon Wasson proposed that the fly agaric was in fact the soma of the ancient Rig Veda texts of India; since its introduction in 1968 this theory has gained both followers and detractors in anthropological literature.[1] On October 18th 2011 Author Shamans Odin Hawk and Venus presented historic Vedic evidence before the MSSF (Mycological Society of San Francisco), identifying Amanita as ancient Soma. [2]

bam ivars
Jun 1, 2012 - 3:19pm


The important part of the link was the bottom.

CAUTION There are many species of mushrooms in the Amanita genus which are not psychoactive. Some are deadly poisonous while others are edible.

Unless you really know your stuff, 'buyer beware' is highly recommended.

Jun 1, 2012 - 3:20pm


Tried that a week ago, but the mortgage broker said there was an interest rate differential penalty where I would have to pay ALL of the interest the bank lost by my refinancing before I could remortgage..along with a new real property report so it was a big net loss. Have to keep my fingers crossed for 18 more months.

Jun 1, 2012 - 3:22pm

Amanita Mushrooms: Death Angel

This is the one you have to really watch out for:

Amanita ocreata, commonly known as the death angel, destroying angel, angel of death or more precisely Western North American destroying angel, is a deadly poisonous basidiomycete fungus, one of many in the genus Amanita. Occurring in the Pacific Northwest and California floristic provinces of North America, A. ocreata associates with oak trees. The large fruiting bodies (the mushrooms) generally appear in spring; the cap may be white or ochre and often develops a brownish centre, while the stipe, ring, gill and volva are all white.

Jun 1, 2012 - 3:22pm


I just refinanced today, as a matter of fact.

Went from 30 years at 4.75% to 15 years at 3.5% with no points. My term is reduced and my monthly mortgage payment is lower.

Probably could have found a lower rate somewhere but I just did it through the HARP program with my current lender. It took 15 minutes over the phone and now I have some electronic docs to sign. Piece of cake!

Jun 1, 2012 - 3:22pm

Hey Turd - Just sent you

Hey Turd -

Just sent you a little sumthin sumthin. I could listen to Jim Willie all day! Those interviews kicked ass!

Jun 1, 2012 - 3:25pm


Ok, I agree. Since our language together with Lithuanian are the closest ones of living languages to Sanskrit, we must have been using this stuff for thousands of years to get high. My mother just hid it from me successfully for...years. Now I know the truth!

@bam- I will boil one and eat or give to my dog and drink his pee ONLY when TSHTF, and I will be hiding in my country house in a land destroyed by what comes after financial collapses and defaults.

bam exiledbear
Jun 1, 2012 - 3:25pm


I hear you. You are preaching to the congregation here! :D

I've put a bunch of people into physical PMs lately, and all of them started to fret once they bought and PMs suddenly dropped hard.

I told them it was a rule of thumb for the PM market. If you buy it goes down. Just the way it is. :D Be patient.

Jun 1, 2012 - 3:27pm
Jun 1, 2012 - 3:28pm


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Dr G
Jun 1, 2012 - 3:30pm

Does everybody see how this

Does everybody see how this rigged system goes? USD goes up and metals go down a lot. Metals go up a lot and USD goes down a bit.

Gold up 4.11% right now. Silver up 2.85%. USD down 0.28%. Sheesh.

Also note that the USD has a massive run up before the BLS numbers to compensate for the imminent drop.

obiwan Lanikai
Jun 1, 2012 - 3:34pm

You raise a good point. But

You raise a good point. But my thinking is the SHTF and there will be a reset on all debt.

My strategy is to pay a 30 yr mortgage with ever decreasing fiat.

Fat Willie
Jun 1, 2012 - 3:41pm

Silver COT

11.6% LCNS vs open interest. 11.0% last week. Still bullish and relatively low by historical standards. Definitely looks like the bottom is in. If 26 holds, and it looks more and more likely, we should see 40's by october and 60's by march. But WTFDIK. Rock n roll. FW.

Jun 1, 2012 - 3:44pm

Rollover movie= today's

Rollover movie= today's controlled financial demolition On YouTube in its entirety..

Jun 1, 2012 - 3:45pm

Removed comment

Removed comment.

Jun 1, 2012 - 3:48pm

Another great CoT!

Granted, we've already worked off some of this. Regardless, nearly historic numbers.

In gold, the Cartel net short ratio fell to 1.76:1. The lowest I've ever seen it. Again, for the sake of comparison, the 4/5/11 net short ratio was 2.64:1 and the 2/28/12 net short ratio was 2.69:1, so the Gold Cartel net short position has now been cut in half from those peaks. Additionally, LargeSpecShorts added 5281 contracts (10%). This is exactly what I've been telling you for weeks and is, in large part, the cause of the explosive rally today.

In silver, the Cartel net short fell to 1.31:1 and a total, aggregate number of just 14,334. This likely means that JPM is now under 10,000 in net short. By far, the lowest I've ever seen. For the sake of comparison, the 4/5/11 ratio was 2.69:1 and the 2/28/12 ratio was 2.32:1. This means that the net short ratio of The Silver Cartel has been trimmed by 75% since 2/28/12. Additionally, the total long position of The Cartel is 45,817 contracts. On 4/5/11, it was 33,413 and on 2/28/12 it was 33,802. So, the total Cartel long position is up almost 36% in just 3 months. Large specs went short silver, too. Spec longs shed 1519 and spec shorts added 720. Ooops. Dummies.

All in all, another great CoT.

Jun 1, 2012 - 3:53pm

London Jubilee Mon + Tues

Isn't the whole point of a 'Jubilee' to cancel debts and start over? Hmm....

Guess this is going to be some kind of sick joke by the cabal. (I mean for all the sheep, stackers may do well.)

Jun 1, 2012 - 3:55pm

The Banking Cartels think

The Banking Cartels think they are going to take our Social Security

Jun 1, 2012 - 3:56pm

Not ready to celebrate yet

Frankly, although I'm enjoying todays action, in no way am I allowing myself to become sucked into the mindset that the bottom is in and things are ready to turn around.

I'm WAY too gunshy at this point from the near year long beat down to be anywhere near feeling comfortable, and frankly, I am just waiting, anticipating really, another waterfall any moment, illogical as that seems.

It'll be a long time before I feel the same confidence I had last year - a LONG time.

Torpedo Fish
Jun 1, 2012 - 3:57pm

all mushrooms are eadible

all mushrooms are edible ... some only once

Jun 1, 2012 - 4:02pm

I'm probably one of the few guys who is pissed off here...

...I've been waiting for one more strong leg down in the Miners before making some big purchases.

I'm hoping for another pullback, but I don't expect it to be as strong.

Ahh well, so it goes.

Jun 1, 2012 - 4:06pm

Need to see a lot more than this....

With the severity of all the known economic, financial and political problems across the world, you still have to wonder about todays movements in PMs. With talk on here of gold getting to 12,000/oz "sooner rather than later", you have to wonder what kind of world we would be living in to reach those kind of numbers. In that world, lead would have as much value as gold. Food will have more value than gold. We still have a ways to go for PMs to be where they were a couple of months ago so I'm trying to understand all the "in your face" posts.

Nico Romanov
Jun 1, 2012 - 4:08pm

Romanov buy signal @1532.10

From May 30, the exact low:

Gold bottom

Submitted by Nico Romanov on May 30, 2012 - 11:58am.

Posted on last thread gold bottom this morning at 1532.10 basis Aug. CMX. Romanov quadruple buy signal.

Jun 1, 2012 - 4:09pm

Unicorns and gumdrops for all!

Friday’s Economic Data Dump Wasn’t All Bad News Can you say rectal orifice giganticus?

Santa's Elf
Jun 1, 2012 - 4:13pm

Yep, we've got one....

Made in the USA

Jun 1, 2012 - 4:14pm


Been watching the last hour. They just cannot bring themselves to discuss gold.

highway Dr G
Jun 1, 2012 - 4:15pm

Dr G

re USD down 0.28% -

The US Dollar Index is an index that measures the value of the US dollar compared to other major currencies (euro, yen, pound etc) When market goes down, and people are fearful, money denominated in other currencies run to so called safe heaven currency USD. and I think that's why it is only down 0.28%.. Compared to gold, USD is down 4% however..

Jun 1, 2012 - 4:26pm


From the top tick yearly high on 5/16/2012, DUST is an astounding -45% down in 2.5 weeks.

Is that the odor of scorched Bears rolling around in their own Poo that I detect?

Seriously (and I know we're all adults), please be careful out there when playing with leveraged ETFs.



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