Dot Connecting

Tue, Jun 5, 2012 - 12:28pm

Even Helen Keller, Stevie Wonder and Ray Charles could see, hear, smell and feel this one coming from a mile away.

If we're going to be connecting dots, we might as well fall back upon my favorite organizational device, the dot chronology.

  • I'm just a Turd. I don't have an MBA or a PhD. I'm not a Global Financial Strategist or a Senior Economist. I live in Flyover Country USA, not New York, London or Singapore. However, even this Turd can plainly see that the current global financial/currency system is ending. We have reached the point where debt is unsustainable and, as we know, that which is unsustainable cannot be sustained. Now, if I can see this and you can see this, is it safe to assume that the leaders of China, Russia, India, Turkey et al can see it, too?
  • On Friday, ZeroHedge released a powerpoint presentation from Raoul Pal, one of the most successful hedge fund managers of this century. I found it so important that I included it in two, separate posts as I wanted to ensure that as many as possible saw and understood it. Here is one of the links: Yesterday, even Glenn Beck picked up on the story. I'm posting the video below because he does an excellent job of putting it into "english". (Please remember: It's the message, not the messenger.)

It's coming, everyone. It's coming very soon. The current global financial system that has existed for nearly 70 years is coming to a dramatic end. Preparations are clearly being made by those who will dictate the terms of the next system. That system will, undoubtedly, use gold as the basis for international trade settlement. You must prepare for this event. Those caught unprepared will see their life savings lost or depleted. Those with foresight and a willingness to prepare will be spared. They may, in fact, even prosper. The end of The Great Keynesian Experiment and, with it, the current global financial system is upon us. Continue to prepare accordingly.


p.s. Maybe Stevie Wonder could "see" it coming, after all?

Stevie Wonder - Stay Gold Lyrics

About the Author

turd [at] tfmetalsreport [dot] com ()


Jun 6, 2012 - 1:34pm


I love you too.

Jun 6, 2012 - 12:50pm

Thank you Steinbacken...

And I agree, accountability is important and we should always verify what others say. I just like to make sure the good guys get a fair shot.

Jun 6, 2012 - 12:25pm

@ Dr G

Great chart, thanks for posting. Good to see the re-coupling of the metals. Now its back to the same old - waiting...

Jun 6, 2012 - 12:24pm

Bullion Demand Soars; Avoid Bars

Bullion Demand Soars; Avoid Bars

By Patrick A. Heller
June 05, 2012

Other News & Articles

Suddenly, it seems like government and finance officials around the world are starting to parrot the words I have been saying for the past year or so. The financial news from almost every nation is scary. After the horrible U.S. non-farm jobs report last Friday, a groundswell of demand for physical gold and silver quickly developed and continued through Monday evening.

In response to the surge in demand, the price of gold jumped 4 percent last Friday, its highest percentage one-day gain since last summer. By Monday evening, dealers were starting to run out of inventory for immediate delivery. However, delivery delays are still short and premiums remain reasonable. If strong demand for physical metals continues for at least a few more days, however, you are likely to see delivery times extend into the future and premiums for live inventory start to rise.

Physical gold and silver sales had been in the doldrums in March and April. That time may be over. The U.S. Mint sold more than 2-1/2 times the ounces of gold Eagles in May than it did in April, while silver Eagle sales in May were 89 percent higher than the month before.

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If you are looking for some physical gold and silver, let me add a couple more cautions to the new one I mentioned in last week’s column. First, the fear among refiners of receiving tungsten-filled gold bars is so rampant that I urge you to avoid purchasing any gold ingots larger than the one troy ounce size.

Two weeks ago, one of my company’s long-term customers wanted to sell an approximate 100-ounce gold bar that he had acquired a few years earlier. The bar was struck by the highly reputable Royal Canadian Mint, which strikes the Maple Leaf series of gold, silver, platinum and palladium coins and many other products. Our customer had a copy of the paperwork where this specific bar was shipped from the Mint directly to a COMEX bonded warehouse and also the paperwork where the COMEX bonded warehouse shipped the bar to our customer. When we tried to find a trusted refinery to take the bar off our hands, at least one was unwilling to take it except for a meltdown and assay – out of fear that the bar may have been tampered with. We did find a refiner who was willing to take it at the stated weight and purity on the bar, but still the bar had to be melted before payment would be sent to us.

With the price of gold so high, I would not be surprised to see more crooks drilling larger gold bars to fill them with tungsten (which has a specific gravity close enough to gold to make it possible to pass a bar that is missing half of its gold content). If you have a larger gold ingot, 10 ounces, 1 kilo, 100 ounces, or 400 ounces that are in bonded warehouses I recommend that you sell them in place rather than taking delivery. Then use the proceeds to replace them with one-ounce (or approximate-size coins such as Austria 100 coronas and Mexico 50 pesos) gold coins and ingots that you have delivered directly to you or to a storage account that you set up in your own name. If you hold such larger gold bars personally, you may be forced to liquidate them through a refiner in order to dispose of them.

You will likely lose a few percent of the value for the discount you have to take on the larger gold bar and the higher premium it will cost you to take delivery of smaller physical product. The reason I advocate that you consider such a swap now is that I fear the discount on the larger gold bars could increase over time. If it does happen, you will be better off trading now. If the spread doesn’t change, a swap now or later would be neutral.

The other warning I want to share is to avoid U.S. 90 percent silver coins that are the older series such as Barber coins, Mercury Dimes, Standing Liberty quarters, and Walking Liberty half dollars. In years past buyers had to pay extra to acquire these older coins. However, just as we saw in 1980, higher silver prices means that silver content trumps age. At the peak in 1980, a specified quantity of 90 percent coin had to meet a certain weight to be accepted at the refineries. If there were too many of the older, more worn coins, the refiner deducted the shortage from the payment.

Because of high prices today, some wholesalers are already quite strict about the weight of $1,000 face value of U.S. 90 percent silver coins. One for instance, requires that $1,000 face value of coins weigh a minimum of 795 troy ounces (54.57 avoirdupois pounds), not counting the weight of any packaging. If the weight is short, the wholesaler will demand either more coins or will issue a smaller payment. I expect this requirement for a minimum weight to become more of a problem in the future. So, if you are offered sorted bags of these older coins, don’t pay a premium to acquire them. In fact, you probably want a discounted price. It’s alright to have some quantity of well-worn coins in an average bag of circulated 90 percent coins, but there should not even be 10 percent of the total that are “slicks.”

If you already have sorted bags of older 90 percent coins, I don’t recommend taking any immediate action. Just be aware that if you try to sell them in the future, you have some possibility that they will be worth slightly less than a normal bag.

By the way, I would be leery of paying much extra as some dealers want to charge for a bag of half dollars that include only 1964 Kennedys, for instance. Although such coins have a higher than average silver content, I’m not sure that you will receive a premium at the time to sell to make up for the extra high price you have to pay to acquire them today.

At the end of 2011, among the predictions I made were that gold would surpass $2,000 and silver would top $60 by the end of May 2012. Obviously, neither forecast came close. These two projections stank. In fact, silver ended May 14 cents lower than at the end of last December. Relatively short-term forecasts such as these are treacherous. Was I completely off in my conceptual thinking? In my timing? Or both? I will be analyzing what happened in more depth in my company’s monthly issue of Liberty’s Outlook that I will be writing later this week. It should be posted online at by the close on June 11. You are invited to peruse further discussion there.

Dr G
Jun 6, 2012 - 12:16pm

@OutLookingIn, fully agree,

@OutLookingIn, fully agree, especially with silver. It has tough battles ahead. I think it will overcome those resistance and break-out points with QE.

Great chart (from ZH) that shows the move in gold and now the later move in silver that puts it in line with the move in gold. Credit to SRS who posted that silver's big move usually comes later in the cycle (and I didn't quite agree with that but in this case it is certainly true):

Jun 6, 2012 - 12:15pm

Hey! There is something wrong with my

Hey! There is something wrong with my 1963 US quarter! I don't think it is 100% silver!

:-) :-)

Jun 6, 2012 - 12:10pm

Thanks achmachat!

Thanks Mr. Buzzkill. There's always alloy metallurgy with multiple elements mixed, but you don't hear me helping out the PM manipulators, buddy.

Jun 6, 2012 - 12:09pm


just want you to stay vigilant!

i have developed my own pocket-able system to verify silver and gold coins/rounds.

It's the only non-invasive system I know of that's 100% accurate. (it uses the material's specific resonance frequency). One of these days I shall market it... I guess as soon as the population gets more interested in precious metal rounds and coins ;-)

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Jun 6, 2012 - 12:08pm
Jun 6, 2012 - 11:59am


The rough averages for gold and silver during the past month of May;

Gold $1,596.96

Silver $29.16

Rough gold average for the past 1 year; $1,664.58

Don't break out the 'bubbly' just yet. Both metals are well contained.

Break out points;

Gold $1,710.00

Silver #1 $33.10 & #2 $34.50

Once the metals proceed past the above break out points and maintain that level into closing on a Friday, then that will be the time to break out the 'bubbly.' Until such time, I forcefully contain any excitement and think with what's between my ears and not with my impulses. Just my HO

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Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 4/20

4/20 8:30 ET Chicago Fed
4/21 10:00 ET Existing home sales
4/23 8:30 ET Weekly jobless claims
4/23 9:45 ET Markit flash PMIs
4/24 8:30 ET Durable Goods

Key Economic Events Week of 4/6

4/8 2:00 ET March FOMC minutes
4/9 8:30 ET Producer Price Index
4/10 8:30 ET Consumer Price Index

Key Economic Events Week of 3/30

3/31 9:45 ET Chicago PMI
4/1 8:15 ET ADP Employment
4/1 9:45 ET Markit manu PMI
4/1 10:00 ET ISM manu PMI
4/2 10:00 ET Factory Orders
4/3 8:30 ET BLSBS
4/3 9:45 ET Market service PMI
4/3 10:00 ET ISM service PMI

Key Economic Events Week of 3/23

3/24 9:45 ET Markit flash PMIs
3/25 8:30 ET Durable Goods
3/26 8:30 ET Weekly jobless claims
3/27 8:30 ET Personal Inc and Spending

Key Economic Events Week of 3/9

(as if these actually matter)
3/11 8:30 ET CPI
3/12 8:30 ET weekly jobless claims
3/12 8:30 ET PPI
3/13 8:30 ET Import Price Index

Key Economic Events Week of 3/2

3/2 9:45 ET Markit Manu PMI
3/2 10:00 ET ISM Manu PMI
3/2 10:00 ET Construction Spending
3/4 8:15 ET ADP employment
3/4 9:45 ET Markit Service PMI
3/4 10:00 ET ISM Services PMI
3/5 8:30 ET Productivity & Unit Labor Costs
3/5 10:00 ET Factory Orders
3/6 8:30 ET BLSBS
3/6 10:00 ET Wholesale Inventories

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