Quick Monday Morning Update

75
Mon, Jul 30, 2012 - 11:27am

Just a quick update. I'll try to come back with something more substantive later today.

As we begin what will certainly be a wild week, gold is coming back from its European lows while silver has surged higher for the fourth, straight day. With gold already near the top of its now 3-month range, there's not much to talk about. It will either break out soon or it won't. Silver, on the other hand, is quite interesting.

Take a look at these charts. All signs point toward silver heading back to the top of its range, as well. The first step is clearing the highs set in early July, near $28.50. Once that level is bested, it should head straight back toward $29 and the top of the range. From there, the key level will be 29.80-30.00. If there is going to be a Cartel line of defense, that is where you will find it. I for one, can't wait to see what happens!

"Turd's Army", led by Brigadier General Maguire, is having another outstanding month. Those able to precisely follow Andy's trades have pocketed another 5 AGEs and a tube or two of ASEs. I've mentioned before that plenty of very big dollar hedge funds, sovereigns and HNW individuals subscribe to Andy's services simply to get his weekly commentary. As a member of "The Army", you are privy to that information, too. This past weekend's commentary was fantastic but, of course, I can't c&p it in entirety here. I asked Andy, though, if I could copy the passage below and he obliged.

In this section of his commentary, Andy discusses the decline of The Comex and the rise of bullion banking in China and he references a note he wrote on 1/8/12. Great stuff.

"Another important aspect. We have noted some of the many ways China is moving to become the global centre for bullion trading, the latest factors being the upcoming introduction of international facing fully backed rolling spot contracts purposefully designed to compete directly with the LBMA bullion banks and soon the introduction of a Beijing gold and silver fix. This is all part of China’s bigger plan to move the RMB into the world stage on its way to being the world’s reserve currency. Since 2010, we have been reporting an accelerated move by China to purchase gold in order to facilitate the RMB becoming an internationally respected currency. This has been far above the quantities reported in the media. The reason for this accelerated move to purchase gold reflects Chinas biggest concern, not just the rate that the US is devaluing its currency but worst case, what if it is forced to devalue? For this devaluation to be sufficient (for the USA), it would likely be affected at a rate of $10 for $1 in order to front run a move to back the $ ahead of China as a global gold backed currency. It is no coincidence that in 2010 the China Business news wrote and expressed concerns on exactly this subject.
Another bullish piece of the bigger picture. After the MFG collapse we started to see an exodus of money leaving the CME exchanges. To save time I copied this form my Jan 8th Commentary...


"This change remains unnoticed and as I reported directly after my UK hedge fund meetings on the 3rd January, the bulk of the true ‘International investment’ funds that traditionally populated the Comex futures and options markets were, and now have, moved their very sizable flows into the spot and international markets. This continues to fly under the radar for most US centric participants. Spot, although somewhat opaque and difficult to discern, provides a much better read than Comex which is increasingly less reflective of wholesale activity. What is also missed by commentators is that it is for risk/compliance reasons a lot of prior fund demand has now migrated from the CME exchanges directly to the spot markets but what is particularly unnoticed, into EUR Gold and Silver. This has had and continues to have the effect of drawing down a lot of physical supplies and leaves Comex analysts scratching their heads as to why, without apparent long open interest, prices have risen, when in January they were forecasting prices $100’s below the December closing levels….”

Again, if you are an experienced trader or if you are interested in receiving Andy's insights on a weekly basis, just click the link below and we'll get you started.

https://www.coghlancapital.com/daytrades-application?ak=turd_army

A couple of other items...For those that missed it, I was interviewed back on Thursday by Kerry Lutz. I met Kerry at FreedomFest and he seems like a decent fellow. I apologize for the quality of the audio on my end. We'll work on that for next time.

The Giant Sucking Sound In The Paper Gold-Silver Markets-Turd Ferguson--26.July.12

And if you haven't yet, I encourage you to have a listen to my Friday podcast at TTM. So much stuff going on that I thought I'd make it a freebie. (Obviously, I hope it inspires some to join, too)

https://www.turdtalksmetals.com/736-2/

And that's all for now. I see that silver is still hanging around $28 and gold is nearly unchanged while the grains are kicking some serious butt. I'll be watching the grains closely this week to see if they double-top or charge to new highs. Just another compelling issue for this very exciting and consequential week.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  75 Comments

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El GordoIcarus
Jul 31, 2012 - 1:08am

Icarus

I believe that the Fed will come forward with a massive QE3 in some form or fashion for the very reasons you think they will wait until the last minute. The Dems are already pressing them hard for more QE since it's election time, and further, the Dems want to destroy our currency as well - therefore, they can get a two-fer by moving sooner rather than later. It might enhance Zeros reelection chances, and if not, it sets the stage to blame his successor for all the overseas unrest and inflationary pressures which are bound to follow. Therefore, the Fed will print, whether it supposedly be for the benefit of the Euros or whatever other form it might take. Food stamps will take care of rising food costs, and I wouldn't be surprised to see them issued overseas for humanitarian reasons of course. Keep your eye on the donut and not on the hole.

Icaruswaxybilldupp
Jul 31, 2012 - 12:20am

Waxybuildupp asks:  "What is

Waxybuildupp asks: "What is the thought here in Turdville about some massive FED intervention in the European banking system that somehow twists and turns it's way into some form of QE that feeds the US banking system as well?"

You need two giant crystal balls to answer this one. My uninformed opinion is that they are going to wait until the last possible minute to initiate any type of QE. The last time they launched QE, it resulted in massive worldwide inflation in foodstuffs, and precipitated the Arab Spring where thousands lost their lives. Because of this, the recent drought in the midwest, the drought in southern Europe, and the 21% decline in monsoon rains in India, which will by itself cause food prices to rise this winter, the FED is going to be VERY RELUCTANT to take the blame for worldwide food inflation down the road. It's going to have to get pretty bad for them to act now with another round of QE. They might jawbone it to death with leaks but they aren't going to do anything for now. IT has to get so bad that the politicians will be begging them to do it. That way they can absolve themselves of any responsibility for the blowback that results from another round of QE.

Throw in a very contentious election where they want to appear to be apolitical and I just don't see it in the cards until at least the end of the year.

Regards,

Icarus

Ruinotmessenger
Jul 30, 2012 - 11:45pm

RMB is a piece of paper

I don't think the Chinese politicians are necessarily more trustworthy than Obamneys on this side of Pacific.

notmessenger
Jul 30, 2012 - 11:16pm

Is there "money" (value) to be made buying RMBs?

Given the content of Turd's posting, do you see any upside to buying RMBs today when they are not gold-backed? I do not know a whole lot about this area, but to my uninitiated and uninformed mind it seems that the value of the RMBs will increase in the future, especially against US dollars. Don't get me wrong - I'm all about stacking the physical metal. I ask whether it's worth getting a few thousand (in US dollars) worth of RMBs as well?

tyberious
Jul 30, 2012 - 11:05pm

Excellent!

GOLD MANIPULATION ENDING SOON? EUROZONE to SPLIT? WHO’S LEAVING?? – Alasdair Macleod Interview Parts 1 & 2

<iframe width="640" height="360" src="https://www.youtube.com/embed/2ppFfy_Gp7Y?feature=player_embedded" frameborder="0" allowfullscreen></iframe>
GOLD MANIPULATION ENDING SOON? - Alasdair Macleod Interview Part 1
The Watchman
Jul 30, 2012 - 10:34pm

Fed is dirty-they are also playing with the gold and silver

miners stock price. They are attempting to discourage any interest by the general populace in investing in ANYTHING precious metals related.They are playing the manipulation game across the entire sector-it is so obvious-they are getting more desperate-the end of that game is FAST approaching.

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Zoltan
Jul 30, 2012 - 9:47pm

Excellent Link Turd

Nice to see the "official" documents from the past. I kind of remember the original article from a few years ago (wow, no wonder I am cynical).

I think the sovereign gold entrusted to the banks is long gone. Their holdings on behalf of clients in futures markets and ETF's are smoke and mirrors. You can't even trust the brokers and banks with the sanctity of the money in your financial accounts.

When will the cracks really start to show? Hope you're right Turd about the explosive month upcoming. The bad guys already vaporized the small investor longs with the MFG scandal (and now PFG). Who is left playing on the Crimex?

I still think the lease rate story is a huge red flag. Would love to know what percent of gold "holdings" are "leased". Any guesses anyone? Certainly the unallocated is gone, probably most of the allocated as well. I don't think a lot of the ETF PM ever existed (just paper entries) Even if they are only leveraged twenty to one that is still 95 percent gone.

Z

I Run Bartertown
Jul 30, 2012 - 9:28pm

Can we extradite our bankers and pols?

From the comments in the ZH link:

https://www.aljazeera.com/news/middleeast/2012/07/2012730141942976671.html

An Iranian court has sentenced four people to death for a billion-dollar bank fraud that tainted the government of President Mahmoud Ahmadinejad, state media has reported.

Iranians, hit by sanctions and soaring inflation, were shocked by the scale of the $2.6bn bank loan embezzlement that was exposed last year and by allegations it was carried out by people close to the political elite or with their assent.

Of the thirty-nine people tried for the fraud, the biggest in the country's history, four were sentenced to hang...

QE to infinity
Jul 30, 2012 - 9:28pm

@ Urban Roman

Many Turdites like to refer to this as "socialism", but in reality it is kleptocracy. Doesn't really have that much of a political left-right slant.

​I agree, I know what socialism is, and this is not it. It's kleptocracy mixed with nanny state petty micromanagement of people's lives. And just a gigantic out of control bureaucracy - ever more and more regulation to provide more jobs for bureaucrats.

Urban RomanQE to infinity
Jul 30, 2012 - 9:19pm

Property rights?

QE,

More significantly, when the DOJ "settled" with the big banks over "robosigning", they just abandoned four or five hundred years' worth of property rights law. You don't own your house any more.

Many Turdites like to refer to this as "socialism", but in reality it is kleptocracy. Doesn't really have that much of a political left-right slant.

This frivolous claim on your rainwater is also kleptocracy.. interestingly, they don't do it in Texas where rainwater is more precious.

Response to: What is happening to property rights in America

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Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

Key Economic Events Week of 7/13

7/13 11:30 ET Goon Williams speech
7/13 1:00 ET Goon Kaplan speech
7/14 8:30 ET CPI for June
7/14 2:30 ET Goon Bullard speech
7/15 8:30 ET Empire State and Import Price Idx
7/15 9:15 ET Cap Ute and Ind Prod
7/16 8:30 ET Retail Sales and Philly Fed
7/16 11:00 ET Goon Williams again
7/17 8:30 ET Housing Starts and Permits

Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
6/30 12:30 ET CGP and SSHW to Capitol Hill
7/1 8:15 ET ADP Employment
7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 2:00 ET June FOMC minutes
7/2 8:30 ET BLSBS
7/2 10:00 ET Factory Orders

Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
6/22 10:00 ET Existing home sales
6/23 9:45 ET Markit flash PMIs for June
6/23 10:00 ET New home sales
6/25 8:30 ET Q1 GDP final guess
6/25 8:30 ET Durable Goods
6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
6/16 8:30 ET Cap Ute and Ind Prod
6/16 10:00 ET Chief Goon Powell US Senate
6/16 4:00 pm ET Goon Chlamydia speech
6/17 8:30 ET Housing Starts
6/17 12:00 ET Chief Goon Powell US House
6/18 8:30 ET Initial Jobless Claims
6/18 8:30 ET Philly Fed
6/19 8:30 ET Current Account Deficit
6/19 1:00 pm ET CGP and Mester conference

Key Economic Events Week of 6/8

6/9 10:00 ET Job openings
6/9 10:00 ET Wholesale inventories
6/10 8:30 ET CPI for May
6/10 2:00 ET FOMC Fedlines
6/10 2:30 ET CGP presser
6/11 8:30 ET Initial jobless claims
6/11 8:30 ET PPI for May
6/12 8:30 ET Import price index
6/12 10:00 ET Consumer sentiment