Waiting For The Fedlines

159
Wed, Aug 1, 2012 - 10:40am

Though it appears that the algos have decided NOT to wait, we humans eagerly await today's "Fedlines" to see what The Bernank has in store for us next.

First, for an overview of what was expected this week, please go back and review this:

https://www.tfmetalsreport.com/blog/4053/get-ready-next-week

Look, if you and I can discern the pattern that metal prices are allowed to rise before The Bernank speaks and then get thrashed after, is it not surprising that some HFT computer programmers could see the same thing. Beginning late yesterday and continuing this morning (with a shove from the ADP), the HFTs and SpecSheep have attempted to front-run the Fedlines and The Cartels. Silly computers. Don't they know that there is no "front-running The Cartel"? If the market is falling today, it's because The Cartel wants it to fall. Would anyone be surprised if prices now rise after the Fedlines as The Cartel squeezes the SpecShortSheep? I wouldn't be.

In the post referenced above, I speculated that we'd see an early week rally, followed by a Fedline dip and then a BLBBS rally. That pattern could easily play out by the end of today instead of Friday. What I mean is this:

  1. The rally last week and Monday drew in some longs.
  2. Instead of waiting for the Fedline release, front-running algos drop price now. Longs are scared out and new spec shorts are added.
  3. Price rallies on the Fedlines. New spec shorts are scared out.
  4. Price returns to 1600+ and awaits BLSBS Friday.

We'll see but, to me, that's the most likely series of events at this point.

Here are two daily charts for you. Note that gold has slipped back into its "pennant" but that silver has not. Also note that silver should have very strong support should price approach, or dip below, $27.

Lastly, my brother-in-law, sent me the email I've copied below. It's something for you to chew on as we kill time this morning. I'll have more later, of course, after the FOMC headlines are released and the markets assessed. TF

In 1887 Alexander Tytler, a Scottish history professor at the
University of Edinburgh, had this to say about the fall of the
Athenian Republic some 2,000 years prior: "A democracy is always
temporary in nature; it simply cannot exist as a permanent
form of government. A democracy will continue to exist up until
the time that voters discover that they can vote themselves generous
gifts from the public treasury. From that moment on, the majority
always votes for the candidates who promise the most benefits from
the public treasury, with the result that every democracy will finally
collapse over loose fiscal policy, (which is) always followed by a
dictatorship."


"The average age of the world's greatest civilizations from the
beginning of history, has been about 200 years. During those 200
years, these nations always progressed through the following sequence:


From bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy;
From apathy to dependence;
From dependence back into bondage."

About the Author

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

  159 Comments

Teach
Aug 1, 2012 - 10:43am

Good post Turd

And that sequence from your brother in law is familiar.....and a wee bit worrisome. The wheel turns and grinds evermore.

csquared13
Aug 1, 2012 - 10:43am

first!

first finally?!?!?! yes!

csquared13
Aug 1, 2012 - 10:44am

okay...never mind. dammit! :(

okay...never mind. dammit! :(

paulindoon
Aug 1, 2012 - 10:45am

Can I play the "FIRST" game

All in all: Thnx TF

Edit: Apparently, Not this time for I missed


Aug 1, 2012 - 10:50am

My brother-in-law...

...then concluded his email with this:

 Professor Joseph Olson of Hamline University School of Law in
St. Paul, Minnesota, points out some interesting facts concerning
the last Presidential election:

Number of States won by: Obama: 19 McCain: 29
Square miles of land won by: Obama: 580,000 McCain: 2,427,000
Population of counties won by: Obama: 127 million McCain: 143 million
Murder rate per 100,000 residents in counties won by: Obama: 13.2 McCain: 2.1

Professor Olson adds: "In aggregate, the map of the territory
McCain won was mostly the land owned by the taxpaying citizens
of the country.
Obama territory mostly encompassed those citizens living in low
income tenements and living off various forms of government
welfare..."
Olson believes the United States is now somewhere between the
"complacency and apathy" phase of Professor Tytler's definition of
democracy, with some forty percent of the nation's population
already having reached the "governmental dependency" phase.

DayStar
Aug 1, 2012 - 10:51am

Down Once Again

It looks like they are going to bomb us with paper until the real metal runs out and paper won't make much difference any more.

DayStar

Igiveup2
Aug 1, 2012 - 10:54am

Oil?

Turd: Thanks a ton for your heads up awhile ago on UCO . The rest of you might want to check out Debka.com to see what the Iranians are up to and then check out UCO again. TPTB can control gold and silver but they're going to have a hard time controlling the Ayatolla. I think this is getting very serious.

Just A Regular Guy
Aug 1, 2012 - 10:58am

Floating Rate Notes?

Anyone have any ideas? Am I incorrect in assuming that basically they'll not "insure" against inflation, people will buy the bonds, the US will have rampant inflation post -ve interest rates - bond holders of floating rates get real negative returns, debt held by external people is made worthless via inflation, and viola debt solved and currency destroyed?

Larry
Aug 1, 2012 - 11:00am

Red Pill or Red Button

As the market once again awaits another QE announcement from Bernanke, are we not looking at the magician's left hand when he is stuffing the white Dove in his right pocket? In other words, has QE ever stopped for longer than a few months? Santa makes good, common sense when he states that the Fed will not do anything when we expect it. I've begun to see these Fedline days as just opportunities for the bad guys to do bad things.

My understanding is that the Fed, the ESF, the PPT, Central Banks and their bosom buddy banks worldwide create, hide and slosh trillions of digital/paper Dollars around behind the curtain every chance they get while they manhandle all assets that they deem a threat to their Ponzi.

Yet it seems we all forget what we’ve already seen and read and heard about the lies and demonic trickery of those that control the markets, paint the charts, bleed investors, bloat the banks and terrorize bullion and mining investors. Time and again, so many market participants devolve along with the talking heads and back into Pavlovian QE dogs every time Bernanke has a meeting or steps in front of a microphone.

Could traders and market participants of all shapes and sizes be the very ones perpetuating the Wizard of Oz syndrome by assigning a man and his lever the power to control the market with a single announcement? Is this a self-fulfilling prophecy of "to be or not to be"?

Gold and silver did just fine before QE became such a buzz-acronym-tail wagging us dogs. Have we all fed on the Fed bait and conditioned ourselves to wait for the dark master to pause from his tinker, toy and destroy levers long enough to toss us another dog biscuit of a metals spike?

Sometimes I envision the ‘controllers’ and the monkeys sitting around chuckling at how the market continues to whine, pant and push the red QE button begging for and expecting treats… only to get shocked instead. Over and over again.

Bullion may rise or be on sale with or without any announcement from anyone. Woof.

TreeTop Dweller
Aug 1, 2012 - 11:00am

The Fall of the Athenian Republic

Turd,

The Fall of the Athenian Republic has been circulated for a number of years...

Q: What’s the deal with Prof. Joseph Olson’s "unreported stats" from the 2008 election?

A: This chain e-mail is a hoax. The "statistics" are grossly incorrect, and Prof. Olson says he didn’t write it.

I Run Bartertown
Aug 1, 2012 - 11:02am

TF

Very soon, someone will dispute the 'taxpaying' part of your email with stats about 'donor' states and 'recipient' states. They will ignore the fact that the South is heavily overrepresented in military spending - a hugely consequential factor.

They will also dispute the murder statistics by applying additional layers of math.

I'm a prophet.

Dr G
Aug 1, 2012 - 11:02am

The Bernank and the Fed have

The Bernank and the Fed have nothing in store for us. Zero % rates through 2014 and possibly into 2015. That's it.

Gold and silver continue to move lower until US debt downgrade or formal QE 3.

I Run Bartertown
Aug 1, 2012 - 11:03am

And that's fine

Frankly, I only posted it because I know that we'll only be in this thread for a short while.


Aug 1, 2012 - 11:05am
Igiveup2
Aug 1, 2012 - 11:08am

You're right

Dat no good:

https://www.debka.com/article/22229/Khamenei-Warns-Iran’s-Top-Leaders-WAR-IN-WEEKS

Remember, I believe debka to be an arm of The Mossad. Take that for what it's worth.

Crude $88.70 and holding above the technically important $88 level.

I Run Bartertown
Aug 1, 2012 - 11:13am

Weird

Couldn't edit that last post. The 'donor' State point is made even more starkly on a county by county basis:

The conversation could very well be 'donor' counties and 'recipient' cities.

I Run Bartertown
Aug 1, 2012 - 11:14am

OR

Red = primarily private sector employment

Blue = primarily public sector employment

Notice all the blue where state capitols and universities are!


Aug 1, 2012 - 11:15am

Nice bounce

I'd expect us now to hover in this area until the Fedlines.

paulindoon TF
Aug 1, 2012 - 11:22am

Do we have a Time for the Fed

Do we have a Time for the Fed to release it's summary - usual 2:00 PM or ????

SV
Aug 1, 2012 - 11:22am

dark pools beware

The dark pools don't wait!

https://silvervigilante.com

Patrancus
Aug 1, 2012 - 11:30am

more rigging

more rigging, report by SGT and Bill Murphy

EXCLUSIVE- Bill Murphy's London Source: "Big Gold & Silver Moves Coming in August"
ReachWest
Aug 1, 2012 - 11:34am

Oil - The Game Changer

War in MENA - I put the probability near 95% before year-end. [The latest Debka article, aside].

No matter how a "MENA event" unfolds (Iran, Syria or one of the others we're not watching) - crude price will move up significantly and there is the real possibility of a supply disruption for an extended period of time. I'm long North American Oil producers and have been so for some time.

I suspect this "MENA event" will be the game changer on many fronts. For example, (depending on timing) it could affect the outcome of the Presidential elections. It could seriously impair all economic activity worldwide to a much, much lower level. (It may be used as cover to divert attention away from the ongoing criminal activities of the big Banks). It will draw the big powers, China, Russia and the US into a major disagreement that could escalate into a further and larger conflict.

Bundle all of these possibilities up and I really don't care much what the Bernanke decides to do, today. PM's are going to rise significantly. Wealth will transfer to the ultimate safe haven.

Missiondweller
Aug 1, 2012 - 11:34am

@ regular guy

Yes, I think the inflation protection of floaters could be limited since they would pay based on "prior" inflation rather than present inflation. In a period of rising inflation, they would always be paying the lower rate.

Also, keep in mind too that they pay based on the CPI which is artificially low, excluding food and energy costs which would likely be going up much faster than core inflation.

I would think Treasury strips would provide better inflation hedging but maybe someone here who currently works in FI could provide a better answer.

SRSrocco
Aug 1, 2012 - 11:37am

POSSIBLE EXECUTION RISK???...LOL

Pascua-Lama woes prompt S&P to lower Barrick Gold's credit rating

Higher forecast capex spending, combined with delays and other risks at the Pascua Lama project, prompted Standard & Poor's to downgrade Barrick's credit ratings.

Standard & Poor's has downgraded Barrick Gold from "A-" to "BBB+" with a negative outlook, citing higher forecasted capital spending, as well as "execution risks surrounding Pascua-Lama".

S&P said its downgrade "follows the company's announcement of a capital cost increase of close to US$2.5 billion and a one-year delay to production start-up at its multi-billion-dollar Pascua-Lama gold-silver project."

The ratings agency's negative outlook on Barrick "reflects our view that the execution risks surrounding Pascua-Lama could potentially stretch the company's credit measures and free operating cash flow generation beyond the levels we have assumed within our base case scenario."

...."In this scenario, we expect Barrick to generate annual EBITDA of about US$6.5 billion through 2013, with annual FFO [funds from operations] of about $4 billion, which would be consumed by increased capital expenditures."

-------------------------------

What an interesting update with Barrick.... a DOWN GRADE?. Many investors believe that so-called cash costs which are $600-700 an ounce means these gold miners are making a great deal of money. However in Barrick's case (as well as the majority of gold miners), CAPITAL EXPENDITURES are consuming a great deal of their profits.

In reality, the marginal cost for producing gold is much higher as gold miners have to replace their production with new reserves.

murphy.... had a good post in yesterdays blog when he stated that the average ore grade for the gold miners was 1.3 g/t. I also showed that presently Barrick produced gold for the first half of 2012 at 1.46 g/t. Furthermore, the future resources of the gold miners average only 0.7 g/t. Thus, the future gold mining industry will be consuming twice as much (and probably more) energy to produce gold.

Many investors who hold mining stocks are banking on the BIG MOVE in gold and silver to shoot their stock prices to the moon. We must remember, when gold and silver finally get their big move, this may also be at the same time the US and parts of the world are experiencing a hyperinflationary event. At this time, energy, steel and all the costs that go into mining will explode along with the price of gold and silver. We may not see the big profits in the mining stocks that we are hoping for.

However, the good part of the story is the fact that as the PAPER PONZI FIAT MONETARY SCHEME collapses, there will be a mad rush into the precious metal stocks. Even though there may not be the huge profits,... there may be huge percentage moves due to being a safe haven status.

Nana
Aug 1, 2012 - 11:37am

Awake and Aware

Those who are awake and aware have decided to opt out of the bottom tiers of the list and propel themselves to the top tiers of the list. They have woke up and once awaken there is no turning back. 

The PTB want to corral everyone at the bottom of the list but more and more are waking up and the PTB know it, that's why the PTB are racing to jackboot the public.

The question is will enough wake up?

Innocent Bystander
Aug 1, 2012 - 11:39am

Nice quote, but it comes from

Nice quote, but it comes from one of those mythic email forwards, and little Googling would have shown that it's probably nothing Alexander Fraser Tytler (not Alexander Tyler) ever said. The rest of the email is equally specious.

https://www.snopes.com/politics/ballot/athenian.asp

Appreciate this post all the same, and I'm glad you decided to keep posting your TA, I find it a great help.

paulindoon paulindoon
Aug 1, 2012 - 11:40am

Do we have a Time for the Fed

Seems that the Fed decision is to be released @ 1:15 Chicago time which should make it 12:15 EST - another 35 mins to go!!!

OrangeAlert
Aug 1, 2012 - 11:42am

2:15 EST

Chicago is in central standard time.

edit: Unless of course you meant at 11:15. Then you would be correct.

paulindoon OrangeAlert
Aug 1, 2012 - 11:43am
Nick Elway
Aug 1, 2012 - 11:43am

Puck's Boetie post from previous thread

Thanks!

Quote:

The solution

Submitted by Puck T. Smith on August 1, 2012 - 8:57am. Hat Tip! 2

"The question is how does one...or a population...go about dismantling such an entrenched, parasitic elite?"

From all these indignities, such as the very beasts of the field would not endure, you can deliver yourselves if you try, not by taking action, but merely by willing to be free. Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces.

https://voluntaryboundaries.blogsome.com/2012/03/10/the-solution/

But as long as you think putting the right people in power is going to change things, you will be forever disappointed.

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