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

Stock_CaninesDr G
Jun 1, 2012 - 12:23pm

http://jessescrossroadscafe.b

https://jessescrossroadscafe.blogspot.com/2012/06/net-asset-value-premiums-of-certain.html

That is Jesse's take as well. They could have made these numbers look better, but they didn't. Why?

In reading this, the thought crossed my mind, are they 'allowing' dumpster numbers now, so as to build off them heading into election. In other words, make it look horrible now, so that the trend is up as we enter election cycle? Or, are the numbers just simply horrible.

Jager06TF
Jun 1, 2012 - 12:24pm

Holy Smokes!

That dear Turd is a crazy timeline comparison. Gives me goosebumps.

Thanks for "resurrecting" it....haha!

Bongo JimTF
Jun 1, 2012 - 12:26pm

Foreshame

Damn, I missed tomb sweeping day.

I Wazere
Jun 1, 2012 - 12:28pm

It's quite funny in a perverse sort of way ...

... the saucer-like, wild-eyed looks of the blow drys today. Perhaps they're not as dumb as they look.

I think they realise that when gold/dow ratio hits 1 at 5,000 ; not only will their portfolios equal zero, but they will no longer be employable.

https://imgsrv.homes.com/imgsrv/d0/70/98799700.jpg

Doc Scurlock
Jun 1, 2012 - 12:28pm

Buy low

For several weeks/months, folks like Santa, Turd, Turk, Sprott,...etc. have been recommending that investors continue to accumulate physical metals and select mining shares. Days like today are why. Not just because price is going up, but the precious metals markets have a tendency to spike higher early in their moves up which puts the investor in the position to chase it. Don't let the down times discourage you. The thesis is intact, keep accumulating so you are prepared for days such as these. Keep stacking.

tpbeta
Jun 1, 2012 - 12:32pm

London is shut - s'true

Two day bank holiday for the Queen's Golden Jubilee. The irony is not lost.

R man JTF
Jun 1, 2012 - 12:32pm

Next major event after ascension

Pentecost...10 days later. The receiving of the Spirit and His gifts applied to believers lives ("the unsearchable riches of Christ", Eph. 3:8)

Not exactly sure how this would apply :)

SRSrocco
Jun 1, 2012 - 12:34pm

REPLY.....IVARS

IVARS.... I don't think silver is being held back by the "INDUSTRIAL SENTIMENT". From my chart below, we can see that Industrial demand during supposed global silver DEFICITS had no impact on the price from the 1990's-2004. When there were so-called DEFICITS the price of silver remained around $5 an ounce.

When we had the first so-called SURPLUSES in silver, then we started to see the price move higher. In 2011, the so-called SURPLUS according to GFMS was 260 million ounces... A RECORD. However bearish this looks, this was also the same year we had a RECORD SILVER AVERAGE PRICE of $35.12.

I don't think the INDUSTRIAL ELEMENT has anything to do with the price. I have seen in MARKET TURNS, once gold and silver bounce, silver does outperform..... but not in the beginning.

Looks like we are going to be in for an INTERESTING SUMMER...

ivars
Jun 1, 2012 - 12:38pm

@Irksome-backyard Blythe

Actually, she lives in a forest nearby. That is where I get my charts.

Xeno
Jun 1, 2012 - 12:38pm

WOW

Spanked by TF;

https://www.tfmetalsreport.com/comment/98282#comment-98282

No, I don't think you of all people make shit up. But there have been reports of a 5 day bank holiday in Europe before the SHTF big time. 2 days? What about the usual weeks of holidays in Asia?

It just seems not anything other than normal.

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