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

tfmetalsreport [at] gmail [dot] com ()


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 - 3:45pm

Removed comment

Removed comment.

Jun 1, 2012 - 3:44pm

Rollover movie= today's

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

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 - 3:34pm

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.

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.

Jun 1, 2012 - 3:28pm


  • Recent Quotes
    Symbol Price Change % Chg Chart
    KAM.V 2.10 0.12 +6.06% Kaminak Gold Corp.
    PRU.TO 2.80 0.22 +8.53% Perseus Mining Ltd.
    KGN 3.57 0.29 +8.84% Keegan Resources Inc.
    LYD.TO 2.28 0.16 +7.55% Lydian International Limited
    PVG 13.5914 0.52 +3.99%
Jun 1, 2012 - 3:27pm
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 - 3:25pm


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.

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

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
8/28 9:45 ET Chicago PMI

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
8/21 9:45 ET Markit flash PMIs July

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
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
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

Forum Discussion

by 11IMIX, 6 hours 6 min ago
by Titus Andronicus, 6 hours 8 min ago
by 11IMIX, 6 hours 16 min ago
by JasonMcMilan, 7 hours 31 min ago