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 - 9:11pm

WOW just what Turd and Jim Willie were saying

It's all fairy tales and fantasy anyway, but when the fairy tale turns into a horror story - for real - you have problems. And we have big problems right now. The economy is collapsing - GM and Chrysler badly missed sales estimates, all the manufacturing data is coming in substantially weaker than expected by our resident TV Einsteins, like Zandi, and housing is doing another el cliffo.

But what really should be jerking people from Lego Land and into Friday the 13th is the Treasury bond market. The yield on the 10-yr Treasury is at a record all-time low and the yield on the 30-yr Treasury - the Big Daddy - is below it's lowest point during the Lehman crisis. That's not just warning signals flashing, that's the equivalent of financial nuclear air raid sirens going off.

What this means is that all liquidity is being sucked out of the global financial engine and it's going into Treasuries and precious metals. I suspect today's big move in both reflects the expectation that we may get a heavy dose of QE3 in some form - likely not an obvious, overt form - at the June FOMC meeting. Just like everything else going on in our system - of which the Obama farce and fraud is supremely emblematic - I'm sure our resident Talmudic scholar at the Fed, who masquerades as an economic expert, will do his best to inject as much electronically created currency into the system but disguise it in a way that the public will accept as nothing more than some temporary, "sterlized" lines of credit.

Trust me, that's a loan NO ONE wants to take unless they have a lot of physical gold and silver on the side...

I can't wait for the subscription Podcasts

Jun 1, 2012 - 9:21pm

Silver Update 5/31/12 Doom and Gloom

Brother JohnF

Silver Update 5/31/12 Doom and Gloom
Jun 1, 2012 - 9:39pm

CME's Daily Delivery Report

Well, the CME's Daily Delivery Report was a monster yesterday as 3,281 gold contracts and 16 silver contracts were posted for delivery on Monday. The big short/issuer in gold was JPMorgan out of its in-house/proprietary trading account with 2,263 contracts...and in distant second place was the Bank of Nova Scotia with 804 contracts. The biggest long/stoppers were HSBC with 1,765 contracts...followed close behind by JPMorgan in its client account with 1,037 contracts. And taking up distant third place was Deutsche Bank with 404 contracts.

If I were placing a bet, I'd say that I've just named the four largest short holders in both gold and silver on the Comex...with the lion's share held by JPMorgan and HSBC. If there was every any's some more proof for you.

There were lots of other issuers and stoppers...a few of which you've never heard of before...and the report is definitely worth looking at. The link is here.

By Ed Steer Gold& Silver Daily

Jun 1, 2012 - 9:43pm

Truth about the global economy

Thousands of companies around the world reveal the truth about the global economy

We are in the middle of the busiest 48 hours in the history of economics. And ahead of tomorrow's big US employment situation report, we're getting tons of leading economic data from all over the world.

At the beginning of each month, Markit, HSBC, RBC, JP Morgan, and several other major data gathering institutions publish the latest local readings of the purchasing managers index (PMI). Each reading is based on surveys of hundreds of companies in each country. From Markit:

PMIs are based on monthly surveys of carefully selected companies. These provide an advance indication of what is really happening in the private sector economy by tracking variables such as output, new orders, stock levels, employment and prices across the manufacturing, construction, retail and service sectors.

The PMI surveys are based on fact, not opinion, and are among the first indicators of economic conditions published each month. The data are collected using identical methods in all countries so that international comparisons may be made.

These are not the most closely followed data points. However, the power of the insights is unparalleled.

Jim O'Neill, Chairman of Goldman Sachs Asset Management, believes the PMI numbers are among the most reliable economic indicators in the world.

Posted on website

The link is here.

Jun 1, 2012 - 9:45pm

"I can't wait for

"I can't wait for the subscription Podcasts"

Thanks. Me, too. Maybe Monday. Likely Tuesday.

Jun 1, 2012 - 9:46pm

Spain moves to centre of eurozone crisis

The fear that Spain is trapped in a cycle of decline is evident in Brussels. Yesterday the EU's top economics official Olli Rehn offered Spain an extra year to cut its deficit to 3% if it came up with a convincing plan for its budget. Madrid said it did not need the extra time, sensitive about appearing to need outside help.

But the reality is grim. Unemployment, at 24%, is still rising. The country is in recession. The banks have a mountain of debt and real estate prices are still falling.

Spain insists that neither the government nor the banking sector needs a bailout, but elsewhere in Europe that is openly being discussed. And the question is where the funds will come from.

Spain is the eurozone's fourth largest economy. From 1 July the eurozone will have a permanent rescue fund, in the European Stability Mechanism. It can draw on 700bn euros. Even if that were enough to save Spain it could not help Italy, which is being buffeted by the Spanish crisis. Its borrowing costs have gone above 6%.

It potentially raises the question that has hovered over the eurozone for two years. What actually stands behind the single currency? Where is the lender of last resort?

Posted on the website

The link is here.

Jun 1, 2012 - 9:48pm

$GOLD:$CRB Indicator?

31st may 2012 5.72 closed above last high, december 2011 5.43 +US$70 in the bag

1st June 2012 6.05 closed above previous high September 2011 5.51 +US$100 possible!

Jun 1, 2012 - 9:48pm

Santa got it goin on

June 1, 2012, at 7:04 pm by in the category General Editorial

Dear CIGAs,

QE to infinity is for certain. About that there is no question whatsoever. It cannot be avoided.

Operation twist is a damn joke stimulation wise. At this point in time it is a dark joke.

The Fed is playing with something worse than fire. That fire is posted in a video today on This video references a worldwide financial crisis that if it starts cannot be stopped by any power on the planet.

They are already easing up on the rhetoric. The Fed will downright panic as the world’s economies go from slow to dropping out of sight. That is what is on the plate tonight, this night, right here and now.

Safety only exists in gold bullion and in the outrageously depressed good gold shares now shorted out of sight.

S Roche
Jun 1, 2012 - 9:50pm
Jun 1, 2012 - 10:50pm


Oh, excuse me. Last!

Jun 1, 2012 - 10:57pm

TF wrote : "The media will

TF wrote : "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?"

Until I read that, I thought I had today's action figured out. Now, not so much.

I thought more QE was now an absolutely necessity, not a "hope".....thereby making a larger bout of inflation a sure thing at some time in the not to distance future.

Stocks were down because consumer confidence was almost nonexistent and there was nothing positive whatsoever to tout.

Since the stock market reflects the future of oil and energy use, both went south because the stock market ( industrials, financials and transportation, et al ) is going to hell in a hand basket and to a large extent are already reflecting the coming landslide of inflation of the USD and the Euro. With the stock market headed for an extended stay in the latrine, oil and natgas demand is also on the way to lower prices.

I agree that fear is the blanket term and results for "all fooked up". Sometimes, give me a cat. 5 headache.

Apache European American
Jun 2, 2012 - 12:49am

Gold will never hit $2000,

Gold will never hit $2000, according to tMosely. We will hit $0-$1 in spot gold, apparently, and gold will never be able to have a price attached to it.

Jun 2, 2012 - 1:20am
Jun 2, 2012 - 2:31am
Jun 2, 2012 - 5:33am

@ivars, re: Mushroom

Amanita Muscaria is not necessarily poisonous, just don't eat too many of them at once (then call yer travel agent for a psychedelic trip!) :>D

Torpedo Fish
Jun 2, 2012 - 12:25pm


Not sure about eating it, but it surely helps against arthritis and other bone & joint diseases.

Jun 2, 2012 - 6:49pm

Federal Reserve Can't Afford $250

Hit the Fed’s tip jar

Posted by William A. Jacobson Saturday, June 2, 2012 at 9:45am 1 2

From a reader known to me but who asked to stay anonymous:

Not even sure what kind of subject line to give this one:

One of the pieces of our business involves providing media research to the general public. We strive to provide a very affordable service using the latest toys and technology… not an easy trick.

Last week, we got a request from the local branch of the Federal Reserve to review and document a recent PR event they held. I quoted them a total price under $250 including delivery and sent them the work order for approval. We finally heard back this morning. They cancelled the order - “They just can’t afford it right now”.

Don’t get me wrong – I completely understand and respect a client that is conscientious about observing a budget, but when the Federal Reserve tells you they can’t afford something it’s time to start worrying.

You’re welcome to use that story – please withhold name and city - several of my clients read your blog!

And I’ve got to get back to work – I have a $250 shortfall in this week’s budget to make up before the end of the day.


Jun 3, 2012 - 10:17pm

Internet Advice

I liked the comment that anything is edible, once.

For God's sake don't base any decision on internet advice from anonymous strangers. DYODD



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Key Economic Events Week of 5/20

5/20 7:00 pm ET CGP speech
5/21 10:00 ET Existing Home Sales
5/22 2:00 ET FOMC minutes
5/23 9:45 ET Markit PMIs
5/24 8:30 ET Durable Goods

Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)

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