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

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turd [at] tfmetalsreport [dot] com ()

  258 Comments

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mendolover
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!

winemaker
Jun 1, 2012 - 3:22pm

@obiwan

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!

Pegasus
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.

Teach
Jun 1, 2012 - 3:20pm

Refinancing...

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.

bamivars
Jun 1, 2012 - 3:19pm

@Ivars

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.

Pegasus
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]

csquared13opticsguy
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.

Lanikai
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.

opticsguycsquared13
Jun 1, 2012 - 3:14pm

NUGT

well aware of the 3x aspect. In fact, a slow steady climb is better than a few big up days. I'm eyeing either 48 or 50 for GDX to get out.

Mickey
Jun 1, 2012 - 3:11pm

NUGT

over weekend I'll sell itm or otm calls--gives me a hedge and stil keep upside.

a 2 month atm call roughly 100% per year--but more important would cover a chunk of downside.

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