Off And Running

91
Mon, Jun 25, 2012 - 4:04pm

Not only is the new week off to a good start for gold and silver, TurdTalksMetals is off to a good start, too. I, for one, am relieved on both counts.

Before we begin, just a few more words on the new site and this is very important:

The new site is designed for greater access. Greater access to my opinions and, perhaps more importantly, greater access to some of the biggest "names" in metals. As I've stated often, because you've made this site so popular, I now have access to people who I never could have contacted otherwise. The new site will give you a greater level of access to them, too, through conference calls and webinars. I really think it's going to be great fun and well worth the subscription cost. That said, please understand this: Nothing about TFMR will be changing. I'll still be here every day, posting new threads and I'll still offer bi-weekly podcast interviews. There should be no noticeable change. In fact, because of the PR associated with promoting the new site, TFMR should grow and become even more vibrant. Anyway, the main points are these:

  • I recognize that only a small percentage of you will likely join the new site.
  • That's perfectly fine but the more, the merrier.
  • The new site will offer a higher level of interaction and access.
  • TFMR will not suffer because of this. It will, instead, grow stronger.

Just a couple of observations today. I played 36 holes of golf yesterday in a heat index of about 110. As you might imagine, I'm a little worn out.

First, very nice action in the metals today, especially in the face of terrible action in European and U.S. equities. That said, look where we are. The metals plunged last week when The Bernank opened his mouth (BIG surprise) but they recovered some today and...lo and behold...they are still rangebound and stuck in the same pattern that has contained them for the past eight weeks. All the wailing and grinding of teeth yet nothing has changed. Why? Why were all the naysayers and AGAs out over the weekend trying to convince you that the metals were doomed? You got me on that one. Gold has been stuck between 1530 and 1630 for nearly 2 months. At this moment, it's 1585...right in the middle. Silver has been stuck primarily between 27 and 29 with occasional forays above 29 and under 27. This afternoon it is 27.60. Yawn.

And, again, please don't misinterpret the post I made back on Saturday. (If you haven't read it yet, please do so. It's very important.) I firmly believe that physical demand is providing a solid floor under paper price. That said, The Cartels have to be salivating at the potential trading profits of dropping price through the expected sell stops under 1525 and 26. I've got to believe that would do anything to break price down and fleece the sheep once more. The problem is that darn physical demand. Can they break paper price down, even for just a few days or weeks, without getting seriously drained of metal? I don't know. All I'm saying though is this: IF this happens, do not be afraid. Instead, be prepared to take advantage of the final "sale" in price.

Next, the growing conflagration in Syria. You know that I'm not one for conspiracy theories regarding military and terrorist actions. However, the "Syria shooting down Turkish jets" thing I find quite odd. There was even a report over the weekend that, to pull this off, the Syrians were using their new Russian SAMs with direct Russian help. What the heck? Are they simply brazenly over-confident that their Russian benefactors will protect them or is something else in play here? And what about the timing of it all? Here we are on June 25...three days before the SWIFT system is closed to anyone transacting business with Iran. Is it just a coincidence that this is happening right now? I don't know but this sure doesn't seem to pass the smell test. ( https://www.zerohedge.com/news/turkey-claims-syria-fired-second-turkish-jet-says-act-wont-go-unpunished-has-invoked-nato-artic)

Lastly, in his latest newsletter, our pal John Butler has written about something that, heretofore has managed to escape our attention. It seems that back on June 4, the Fed, the OCC and the FDIC circulated a memo asking for comment on some proposed changes to the "regulatory capital risk-weighting framework". The big news is this: Perhaps by January 1, 2013, gold bullion will be reclassified as a "zero-risk" asset, similar in stature and safety to U.S. government bonds. Below is a C&P of John's salient points as well as an uploaded copy of the full report and a link to view it and download it yourself:

""Well, on 4th June the Federal Reserve, OCC (Office of the Comptroller of the Currency) and FDIC (Federal Deposit Insurance Corporation) collectively circulated a memo asking for comment on their proposed changes to the regulatory capital risk- weighting framework. Section 11, ‘Other Assets’, specifies that a “zero risk weight” is to be applied to “gold bullion held in the banking organization’s own vaults, or held in another depository institution’s vaults on an allocated basis...” Whoa. There you have it. As it stands now it would appear that, in the near future, banks will not have their regulatory capital ratios penalised for holding gold instead of government bonds as a safe- haven, zero-risk asset.
While the fundamental backdrop for gold is highly favourable and has been for some years, as the supply of money, credit and government bonds has grown dramatically, this technical aspect of the gold market is also clearly bullish. Indeed, as I wrote in The Canary in the Gold Mine, if gold is re-classified as a zero-risk-weighted asset, “the price is likely to soar to a new, all-time high.” I stand by that statement. In about six months we will know whether I am right, or whether I have misread this one.
Given the potential importance for gold, I’m surprised that this announcement has not been widely reported in the financial press, alternative or even mainstream. Perhaps this is due to the fact that, at this point, the re-classification of gold has only been proposed, not implemented. The change is not due to take effect until 1st January 2013.
With interest rates near zero, however, the opportunity cost of sitting on a non-interest-bearing gold position for six months is close to zero. Yes, gold may appear to be in a downtrend and, yes, it might have been unusually volatile of late, but unless the regulators backtrack, I see this as clearly bullish for gold, enabling much catch-up to Treasuries.
It remains to say something about why, perhaps, US regulators are poised to change bank regulatory risk weightings in favour of gold in this way. I do have some ideas about that. However, those will have to wait for a future Amphora Report.""

https://docs.google.com/file/d/131_n8V-zn4RP0hwWJw8uRKgaNl0DZyBvCDGjEbTA...

Alright, that's it for now. I'm going to go take a nap. Have a great rest of your day!

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  91 Comments

tobydaniel
Jun 25, 2012 - 4:07pm

Second!

Finally!

rocoach
Jun 25, 2012 - 4:08pm

Good Luck

Good Luck to everyone - here's hoping we're off to a good start. (was hoping for a third 1st in one week...)

Big L
Jun 25, 2012 - 4:09pm

First

Thanks Turd. I just signed up for the new site. Thanks and I'm proud to be able to help support the Turdville family and appreciate everything you do to help all of us each and every day.

Gramp
Jun 25, 2012 - 4:14pm

Just Read the new post... let's see what #...

Glad to hear the new site is off and running!

Now to cover the fire wood pile before the big rain... So we need to buy less oil next winter! We heat entirely from wood from our land... Don't need no stinkin' Oil.

Kevin C
Jun 25, 2012 - 4:22pm

Nap time

21 minutes since Turd posted and only 4 comments. Turd can't be the only one napping.

Dr G
Jun 25, 2012 - 4:33pm

Nice moves for both metals

Nice moves for both metals today. I won't be really excited until silver clears $30 again, and then $35, and then...well, you know.

If they are indeed salivating at dropping it below $26 to trigger stops, then they must also be pulling their hair out at the multiple attempts they've made to no avail.

I'm almost convinced from a logical perspective that they won't drop it below $26 because if they want to and could they wouldn't they have done it already? Maybe that's just foolish. The charts certainly say that it could happen from a technical perspective. A chart of the past year shows that silver looks very ill.

In any event, if they can't drop it maybe they'll just beat the tar out of us by having the price move sideways for months on end (interspersed with days like today where it goes up to get us feeling a little happy only to drop the hammer the following day).

I'm also curious to see what happens with SWIFT and the 28th and all the info that Turd and Sinclair have given to us regarding that. Santa was sure it would be a huge event. I think it has potential, but like most things there may not be any immediate consequences from it.

sevin
Jun 25, 2012 - 4:35pm

Observations

From what I have noticed, when the price of PM's is down the traffic is down and less people comment and interact on the website. As price begins to rise, people begin to comment more. Turd what is the T.I.T.S. looking like these days. Good luck with the new website! I haven't decided if I am going to join, but most likely will as I have enjoyed all of the podcasts to date. Thanks for providing this wonderful service!

croc987
Jun 25, 2012 - 4:39pm

Silver up?

The EE actually took the boot off our neck for a day. Hey I feel your pain Turd, I played 18 yesterday and almost melted. Be sure and rehydrate!

tpbeta
Jun 25, 2012 - 4:42pm

Silver range

I would have said the silver range is $28 to $34, with forays to $26 and $36. That's still quite a lot of scope for traders and the cartel to make a lot of money. Blythe might just be happy to keep that model stable?

¤
Jun 25, 2012 - 4:47pm

Lull before...

...the storm is what it seems to be on many fronts right now. The outcome of the battle of wills and forces in Syria will either strengthen or change the balance of power going forward in many ways. Big power play going on and I see no one backing down. Quite the contrary. Thanks for the update.

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