Burning Down The House

266
Sat, Aug 25, 2012 - 3:36pm

We had an awesome week and the charts look great. More importantly, a fire has begun that will eventually consume the entire House of Lies.

At first glance yesterday, the CoT hit me like a punch to the gut. I was wrong about something and I hate being wrong. You see, as last week progressed, I became increasingly convinced that JPM's massive silver short position was coming under assault by the other "commercials". I likened this idea to a pack of hyenas sensing the weakness of the leader and turning upon him. Clearly the report, which shows positions as of last Tuesday, does not support this analogy.

Yet.

Instead of attacking the leader, the pack chose to support the leader, instead. All of the buying in the 8/15-8/21 timeframe came from the specs, both large and small. All of the selling (to the tune of net short 9000+) came from The Forces of Darkness. The Evil Ones unloaded 4651 of their longs (10%) and added 4424 brand new shorts. (For those keeping score at home, that's about 22,000,000 ounces of paper "silver" created out of thin air.) Never fear, Captain Metaphor is here with a new one for you to consider.

The action last week is akin to the actions of an arrogant and drunk homeowner who foolishly built his castle along a tinderbox-dry ridge, confident that his homemade firewall would always protect him. Through the years, his house has stood firm against the elements and the homeowner has grown complacent and comfortable. Last week, the homeowner started down his usual path of preparing for the winter. He has once again begun to stockpile gasoline, liquid propane, kerosene and other accelerants. He places them within his house, confident that he can safely use and remove them at his leisure and blind to the danger a fire would present to his fiefdom.

What he apparently doesn't realize is that a conflagration will soon jump the firewall. His castle, which he thought impervious, will soon be consumed in a fire of his own making.

So, upon further review, I am not the least bit concerned about the makeup of the latest CoT. The homeowner has simply placed himself in greater peril by his actions this week. His house is burning yet he slovenly continues his business. Fat, happy and blissfully unaware of the disaster at hand.

Video unavailable

As we prepare for next week, I thought it appropriate to give you these charts. Look very closely at them and they will tell you a lot. Let's take them one by one. First, an up-close look at a weekly silver. Note that the price has apparently closed right on top of the Battle Royale II line. Might a raid come from here? Of course. However, silver closed Friday above all of its moving averages. Every single one. This is very bullish from a technical perspective and will almost certainly lead to a rally on Monday as technical-based, momentum-chasing spec money comes charging in. The next resistance point that I see is near $31.50, which would be well above the BR2 line.

The weekly chart of gold shows that is is clearly above its Battle Royale line and, like silver, gold closed Friday above its 10-day, 20-day, 50-day, 100-day and 200-day moving averages. Once it surpasses 1680, gold will move effortlessly higher toward 1700. (More on that level in a minute.)

And these next two charts should be as reassuring as a hug from an old friend. Note that, after peaking in late April of last year, silver price declined into May of this year, where it began riding higher and consolidating along the long-term trendline. If silver could not be broken down last September, last December or even this May, it ain't gonna be broken down now. Soon, The Battle Royale will be won and silver will move on toward further fights at $33 and $36. For now, though, study this chart and smile.

And while you look at this gold chart, keep in mind that ole Turd very much likes to discover patterns that no one else has yet noticed. Look closely. Gold has followed this channel, this "managed ascent", for nearly four years as part of the larger bull market that began in 2001. Now, look even closer.

Recall that, just yesterday, we discussed the significance of 1665-1675 as it related to the S&P downgrade of the U.S. and The Panic which gripped The Gold Cartel in the weeks that followed. Beginning the following week, gold began to trade uncharacteristically above and outside of its long-term channel. If you count the total amount of time between the breakout UP and the final fall back WITHIN, you get a total of 17 weeks. Fast forward to today. In early May this year, gold fell DOWN and out of its long-term channel. If you count the total amount of time between the breakout DOWN and today, you get a total of 16 weeks. Does this mean that next week is the transition week where price straddles the lower line of the channel, currently near 1700? Will the first week of September bring price action that finally places gold squarely back within the channel? Who knows. But, would you be the least bit surprised by a "candle" this week that lies upon the channel line and a "candle" next week that lies within the channel? I wouldn't be.

Well, that's all for now. Go relax and enjoy your weekend. Do not let the CoT (or anything else for that matter) bother you. Over the past eight trading sessions, silver has rallied nearly 10% and The Evil Empire has not participated. In fact, the have only impeded the rally at their future cost and peril. What is coming will truly be explosive and historic. Like me, you should just remain patient and diligent, adding to your stack whenever possible.

TF

About the Author

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

  266 Comments

swampman
Aug 25, 2012 - 6:43pm

Thanks Jake

For the response and I've book-marked the site. Lots of good stuff there. I'll be checking it all out.

ReachWest
Aug 25, 2012 - 6:57pm

Banker Hubris

Thanks Turd for the Saturday update. I'll sleep a bit better tonight after reading this one.

I frankly don't understand these COT reports that well and have not bothered to take the time, or make the effort to delve into any of them, so the analysis here and over at TTM is much appreciated. I must admit , I'm not sure I would trust the integrity of the COT data to begin with. (Certainly given the unscrupulous system that the Futures market has become.)

The comparison of the EE to an irresponsible home-owner is a good one. (And, creates a nice visual - burn, baby, burn - no Firefighters are coming to assist.) If this analogy is correct it underscores the significant amount of "hubris" these bankers have - not a surprise.

@Jake: Thanks for your COT commentary above - I also bookmarked your site and read some of the commentary over there re the COT. Again - makes me feel we are on the winning side of things. Stacking and hanging tight.

¤
Aug 25, 2012 - 7:03pm

China calls for new-type military relationship with US

China calls for new-type military relationship with US

Updated: 2012-08-26 00:44

(Xinhua)

WASHINGTON -- A visiting high-ranking Chinese Army officer on Friday stressed the importance of developing a new type of military-to-military relationship with the United States, so to boost pragmatic cooperation in various spheres.

In an interview with Chinese media based in Washington, Cai Yingting, deputy chief of the General Staff of the Chinese People's Liberation Army, said that the two countries need to strive to implement the important consensus reached between Chinese President Hu Jintao and his US counterpart Barack Obama on constructing a new type of relationship between big powers, on the basis of mutual respect, equality, inclusiveness and win-win.

The Chinese officer said that the two sides have to make concrete efforts to overcome differences, increase mutual trust and deepen the China-US military relationship, which has been repeatedly interrupted by the US arms sales to Taiwan, including promoting exchange of visits by top officers, military professionals and students, and strengthening cooperation in conducting naval escort missions in the Gulf of Aden.

During meetings with senior US. military and government officials, Cai also expressed China's strong concerns and principled stand over issues related to China's vital or core interests, such as sovereignty and security.

Cai said that the delegation reiterated China's strong opposition to any application of the US-Japan security treaty to Diaoyu Islands, over which China has indisputable sovereignty.

He was commenting on the US stance that the Diaoyu Islands fall within the scope of the 1960 US-Japan Treaty of Mutual Cooperation and Security, under which Washington will provide assistance to Tokyo when the territories under Japan's administration come under armed attack.

Cai emphasized that the Diaoyu Islands and their affiliated islands have been part of China's inherent territory, and all the recent illegal activities by the Japanese, including the bid to "purchase" and the right-wing activists' landing on the islands, are completely invalid.

In this regard, the Chinese delegation urged the US side to do more to safeguard peace in the Asia-Pacific region and maintain the overall good China-US relations....

https://usa.chinadaily.com.cn/china/2012-08/26/content_15705813.htm

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

DPH: When you possess about 48% of the entire worlds naval assets, other countries ask you to consider letting them keep their own claimed islands and not to side with their neighbor/adversary who you have a security arrangement with.

This entire island issue in and around China will only grow more intense imho. Ultimately the issue of Taiwan will be the biggest one down the road but for now we are focused on a chain of tiny and seemingly obscure islands that stretch form the south of Japan towards China.

https://en.wikipedia.org/wiki/File:Senkaku-Diaoyu-Tiaoyu-Islan.jpg

Islands that were probably fought for viciously going back many, many centuries before WWII.

This has nothing to do with territorial integrity for security reasons but everything to do with oil or gas fields underneath it all for potential and future energy resources.

urout
Aug 25, 2012 - 7:35pm

Burn it to the Ground

Nickelback - Burn It To The Ground

Turn it up a notch...it's the weekend!

Strongsidejedi
Aug 25, 2012 - 7:38pm

@DPH : China - It's about the rare earth minerals

China is pragmatic.

They're saying "cut a deal" or we both lose.

Samsung and SoKor will be saying, "no deal". "Pass us more gold or we will dump more USTs tonight".

Gold 1900 is a lock. I say this thing moves in the next 2-4 weeks. and will cross Norcini's 1700+ target in that time span.


Aug 25, 2012 - 7:39pm

Long as we're burnin' stuff up....

The Crazy World Of Arthur Brown - Fire (1968 Stereo)
Harry Nilsson ~ Jump Into The Fire ~ Nilsson Schmilsson
¤
Aug 25, 2012 - 7:55pm

Jedi / Afghanistans Rare Earth Minerals

That's an interesting take on it and probably closer to the truth ultimately. Thanks

We're really hamstrung seemingly by China's dominance of those Rare Earths.

I've read that Afghanistan is thought o be loaded with them so I'd have to think we'll never really leave there and I'm sure a bunch of U.S. geologists are climbing all over the place with military protection.

Seems like a no-brainer and a story we won't hear about much. This is what they were willing to tell us. Can you imagine how much they've found in the meantime or will find?

https://www.usgs.gov/newsroom/article.asp?ID=2936&from=rss_home

LongGoldLongSilver
Aug 25, 2012 - 8:08pm

A Picture Says More Than...

Even though I think we should burst through the prior top/bottom in positions for the specs and commercials, it gives a good indication of the duration of rallies and reversals. Like Turd says, the commercials really added to their net short positions last week, but still we still have far to go before reaching elevated levels. It would be nice to once again see the commercials act like they did in the spike of early 2011 when they suddenly had to cover their shorts into rallies, instead of adding to their positions. Imagine where the price of silver would've been today if the cartel had added longs and covered shorts the past couple of weeks.

https://www.MiningStockValuator.com -portfolio tracker & analysis of gold and silver stocks

Fired
Aug 25, 2012 - 8:13pm

Coming to a bank near you...

https://goldinvestingnews.com/27650/gold-on-a-roll-as-fed-signals-qe3.html

Vietnamese panic-buy gold after tycoon arrested

The arrest of a banking tycoon this week was good for gold in Vietnam. Nguyen Duc Kien, who helped fund Asia Commercial Bank (ACB), was accused of running unlicensed businesses. His arrest Thursday led to a 9.2 percent slide in the Vietnamese stock market and a run on ACB by its depositors who rushed to withdraw cash. Many converted their dong notes to gold, leading to a 5 percent jump in the local gold price. Banks were also buying gold to repay depositors who were withdrawing the precious metal.

Over in Italy, in a telling sign of Europe’s economic malaise, some 28,000 gold outlets have sprung up, according to a politician lobbying the government to regulate the sector more strictly. Italians are selling jewelry to make ends meet and there have been reports of shootings in Rome involving owners of “cash for gold” stores.

Dyna mo hum ¤
Aug 25, 2012 - 8:22pm

DPH

Military relationship with China = Just another opportunity for the devils to gain intelligence from the US military. Our dear leaders will think its a great idea.

silverstool
Aug 25, 2012 - 8:32pm

Fire

This isn't the only fire that's just started;

https://www.telegraph.co.uk/finance/newsbysector/energy/9499324/Explosio...

Hmmm. Another gas leak? Venezuela either is unlucky, its oil industry run by incompetents or could the fact that it is run by a dictator who has recently taken delivery of the nations gold from The West?

Dyna mo hum
Aug 25, 2012 - 8:43pm

Fire

Stuxnet bugs ?

reefman
Aug 25, 2012 - 8:45pm

Beware...Silver in overbought territory

Just beware.... Silver is in overbought territory technically (ultimate oscilator and RSI). It is likely we will see a sharp pull back before advancing.

Advance Stops & Watch Gold 08-23-2012
bam
Aug 25, 2012 - 8:47pm

Have a listen to Dan Norcini's...

...weekly metals wrap up at KWN. This week's a good one, and the entire audio is worth tucking into. Discusses the miners a bit as well, if you are so inclined.

Audio Here: https://kingworldnews.com/kingworldnews/Broadcast/Entries/2012/8/25_KWN_Weekly_Metals_Wrap.html

Partial Transcription Here:

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/8/25_Absolutely_Stunning_Development_In_The_Gold_%26_Silver_Markets.html

¤
Aug 25, 2012 - 9:00pm

Dyna mo hum

You just never know in today's world.

Dental floss anyone?

Frank Zappa - Montana
foggyroad
Aug 25, 2012 - 9:07pm

Burning oil refinery-Venezuela today!

A large explosion has struck Venezuela’s largest oil refinery, killing 26 people and injuring more than 80. The blast did significant damage to the plant as well as nearby houses and is thought to have been caused by a gas leak.

Among the dead include a 10-year-old boy, though 17 of the 26 who lost their lives were National Guard troops stationed at the refinery, Vice President Elias Jaua said after traveling to the afflicted area. He said authorities were working “to save the greatest number of lives.” At least 80 more were reported injured, nine of them seriously. Health Minister Eugenia Sader the other 77 had suffered light injuries and were released from hospital after receiving treatment.

President Hugo Chavez declared there would be three days of mourning and gave his condolences to the victims' families.

"This affects all of us," Chavez said while speaking on state television by phone. "It's very sad, very painful." He ordered a "deep" investigation to determine the cause of the blast.

The explosion occurred at approximately 1:07am local time (6:07 GMT) on Saturday, producing a tremor that was felt in nearby communities, smashing windows and damaging buildings. Massive balls of fire were seen over the refinery, with black plumes of smoke filling the sky.

"There was a gas leak," Energy Minister Rafael Ramirez told state TV. "A cloud of gas exploded … it was a significant explosion, there is significant damage to infrastructure and houses opposite the refinery."

Local official Stella Lugo told Venezuelan state news that the situation was now under control.

“There is no risk of another explosion. At the moment we are concentrating our efforts on helping the injured," said Lugo.

Local authorities have restricted access to the refinery and the surrounding area in response to the blaze.

Ivan Freites, secretary of the United Federation of Oil Workers told state news that at 12:30am local time (05:30 GMT) a propane-butane leak was reported at the plant.

“The senior staff at the plant said they had used foam to control the leak and eliminate the risk of a fire,” said Freites. He added that the explosion could have been triggered by a problem with a gas valve that led to a pressure buildup.

The Amuay refinery produces955,000 barrels a day, making it one of the largest in the world. Despite the refineries economic importance, Venezuela‘s Oil Minister Rafael Ramirez said the country’s current fuel supplies were sufficient to guarantee there would be no major disruption in meeting domestic needs or continuing exports despite the blast.

Image from Twitter/@Anagabymakeup

https://rt.com/news/paraguana-venezuela-refinery-explosion-545/

--------> Venezuela has a type of crude difficult to refine.

---Some Gulf Coast refineries specialize in the Heavy crude.

---Back in 2002 there was a disruption of Venezuelan crude, the following report details results of that disruption ie. higher gas prices

---I'm not an expert, but I know Venezuela still sends a hefty chunk of crude to the U.S. Gulf Coast refineries. And a big chunk also to China.

READ MORE... note/-- date of data 2002 more up to date data is out there.. but this is still indicative to a point..

https://www.eia.gov/pub/oil_gas/petroleum/feature_articles/2003/venezuel...

Impacts of the Venezuelan Crude Oil Production Loss By Joanne Shore and John Hackworth1
Introduction

The loss of almost 3 million barrels per day of crude oil production in Venezuela following a strike in December 2002 resulted in an increase in the world price of crude oil. However, in the short term, the volume loss probably affected the United States more than most other areas. This country receives more than half of Venezuela's crude and product exports, and replacing the lost volumes proved difficult.

U.S. imports of Venezuelan crude oil dropped significantly in December 2002 relative to other years (Figure 1). Increases in imports from Mexico and the Middle East, particularly Iraq, helped to cushion the decline, but import volumes were down in general.

Figure 1. Crude Oil Imports by Source Country

Source: Energy Information Administration, Form EIA-814

Venezuela is only about 5 days away from the U.S. Gulf Coast by tanker. Most of the Venezuelan crude oil used in the United States is heavy, sour quality crude oil, 2 and other nearby sources of similar crude oil, such as Mexico, have little additional capacity to increase supply in the short term. Crude oils from sources somewhat farther away, such as West Africa or the North Sea, are mostly lighter and more expensive than the lost Venezuelan volumes. When the heavier Venezuelan supply was disrupted, these lighter crude oils may not have been economically attractive to refiners previously using the Venezuelan crude oils. While refineries using heavy Venezuelan crude oils theoretically can use some lighter crude oils from areas like West Africa, their refineries are designed to run most economically with the heavier crude oils.

The largest number of refineries in the United States can process light, sweet crude oils, while only the small fraction of refineries that have extensive desulfurization and bottoms-conversion units can use heavy, high sulfur crude oils such as that produced in Venezuela. Refineries that normally run intermediate sour crude oil could run a small quantity of heavy sour crude if they could blend it with light sweet crude oil, but if light sweet crude oil is in short supply, then that option is not available. When a heavy sour production source is disrupted, refiners can run a lighter mix of crude oils, but as in the recent Venezuelan production loss, refiners shift crude oils so that the heavy crude oil refiners still run a relatively heavier mix. Both acquisition of additional crude oils and the shifting takes time, and runs will generally be reduced for a short time.

Ultimately, OPEC was the only supplier capable of increasing production adequately to cover for the losses, and OPEC members like Saudi Arabia, Kuwait, and Iraq have crude oils similar in quality to the Venezuelan crude oils. But OPEC's Middle Eastern crude oils are 30-40 days away, leaving a regional short-term supply gap in the United States.

This assessment of the Venezuelan petroleum loss examines two areas. The first part of the analysis focuses on the impact of the loss of Venezuelan crude production on crude oil supply for U.S. refiners who normally run a significant fraction of Venezuelan crude oil. It explores the extent to which refineries normally using Venezuelan crude were able to acquire alternative supply and how these refineries were affected depending on their affiliation with Venezuela's national oil company, Petróleos de Venezuela, SA (PDVSA), and the quality of Venezuelan crude oils being used. The second part of the analysis looks at the impact of the Venezuelan production loss on crude markets in general, with particular emphasis on crude oil imports, refinery crude oil throughput levels, stock levels, and the changes in price differences between light and heavy crude oils.

Impact on Refineries Using Venezuelan Crude Oil

Aggregate Impact on Major Processors of Venezuelan Crude Oil

While a number of domestic refineries use Venezuelan crude oil, 11 accounted for 80 percent of Venezuelan crude oil used in the United States and the U.S. Virgin Islands in November 2002 before the strike. Table 1 compares the total amount of Venezuelan crude oil imported both to the United States and the Virgin Islands, as well as the share of that total these 11 refineries received. The table also displays the dominance of Venezuelan heavy crude oil imported, compared to Venezuelan intermediate and light crude oils. The percentage of Venezuelan crude oil used in each refinery varies, but Venezuelan crude oil was a significant feedstock in each of the 11 facilities.

The strike in Venezuela significantly reduced its crude oil production and exports during the entire month of January. For the 11 refineries of Table 1, imports of light and intermediate crude oils were 378 thousand barrels per day (MB/D) below their November level, and their heavy crude oil imports were down by 566 MB/D. Much of the energy media focused on the loss of Venezuela's heavy crude oil, but a significant volume of intermediate and light crude oil production was also lost. Concern over the loss of heavy crude oil was based on the assumption that refineries using heavy crude oils would have greater difficulty finding suitable replacement volumes and maintaining throughput levels than refineries using lighter crude oils. In the subsequent discussion these issues will be probed in depth.

Table 2 summarizes the aggregate changes in crude oil imports and refinery inputs for these 11 refineries. For December, when the strike began, their imports were 26 percent or 542 MB/D below their November level, and in January, were 19 percent or 396 MB/D below November's volumes. While imports from Venezuela were down in January compared to December, the 11 refineries had made some progress finding replacement crude oils. They were also getting a larger share of the Venezuelan crude oil that was available to the United States and Virgin Islands. The 11-refinery share of Venezuelan imports in Table 1 increased from under 80 percent in November and December to over 95 percent in January.

As shown in Table 2, total crude oil refinery inputs for the 11 refineries did not fall as much as crude oil imports, declining 11 percent in December and 17 percent in January from November's level. Inventories were used to keep refinery crude oil inputs from falling as much as imports. Refineries also increased the volumes of unfinished oils (e.g., heavy gas oil that is used as input to fluid catalytic cracking units) in December and January, which further helped to stem the decline in refinery output.

Table 3 shows where the 11 refineries turned to find replacement barrels. In November, the 11 refineries were importing 1,377 MB/D of Venezuelan crude oil, representing 68 percent of their total imports. In January, Venezuela represented only 26 percent of their imports. Mexico was the largest source of heavy replacement barrels, jumping from 7 percent in November to 22.5 percent in January. From November to February the replacement effort produced large import increases from a number of areas including: Other Latin American countries (3 to 11 percent), North Sea (6 to 11 percent) and the Middle East (4 to 16 percent). The crude oil shifts among source countries for these 11 refineries were not the same as the total U.S. shifts shown in Figure 1, which implies that other refineries were changing crude oil import sources as well to deal with the shortage.

In order to better understand what may have influenced the 11 refineries' crude oil acquisitions, the import data were analyzed from several dimensions. The first dimension was the different qualities of crude oil being used by the affected refineries. Table 4 displays the crude oil inputs in aggregate for the six refineries that process mainly heavy crude oils (i.e., API gravity of 25 degrees or less based on imports received) to refineries processing intermediate or light crude oils (API gravity greater than 25 degrees based on imports received). Contrary to initial concerns that heavy-crude-oil processors would experience larger run reductions, refineries processing light or intermediate crude oils experienced greater reductions in inputs during December and January that those processing heavy crude oils.

tyberious
Aug 25, 2012 - 9:11pm

Look at the date then look at the value

How much does a roll of silver dimes weigh? Cabhamme...

Best Answer - Chosen by Voters

There are 50 dimes in a roll. Silver dimes each weigh about 2.5 grams. Therefore a roll would weigh a smidgen more (for the wrapper) than 125gr. 125 grams is about 0.276 pounds or a little more than a quarter pound (4 oz). (BTW a non-silver dime is just about the same weight so a quarter pound works regardless of what dime type)

As an aside, a silver dime (1964 or earlier) is worth about 60 cents due to the value of silver (intrinsic) but may be ALOT more due to collectors value (expecially in nice condition).

I wish I still got them i my change....
Strongsidejedi
Aug 25, 2012 - 9:16pm

More on Asian gold buyers

During the run in the last few weeks, the London traders were saying that a major asian buyer was in the market.

I've been thinking about these "asian" buyers in the context of the Samsung v. Apple federal court jury verdict yesterday (awarding 1 billion dollars to Apple).

For some reason, everyone has their eye on the People's Republic of China. As we have been noting, the Chinese lightened on their holdings of UST's. It was softening of the USD (POSX in Turdville) to have the Chinese government and central bank liquidating hundreds of millions of dollars of UST's over the last 90 days.

But, it was assumed that the Chinese buyers were the main center actor. However, I am now of the opinion that the South Korean interests are a higher priority buyer of precious metals. We already know that as the Chinese were selling UST's, the Japanese were buying. This leaves the position of the South Korean interests a little more vague. South Korea has enterred tri party negotiations with the Japanese and Chinese regarding various economic and political interests.

Given the fact that the men of South Korea have forced military service (draft) and must serve these duties without excuse, the South Korean business men will have little patience for Bay Area Apple people complaining about intellectual property issues. In fact, I have to think the South Koreans are going to be not only preparing for this decision, but would have been taking action for a while.

Apple may have won this case, but I am now totally convinced that the PRC interests involved with manufacturing Apple products (i.e. Foxconn) would likely negotiate terms with Samsung (a South Korean international conglomerate) regarding manufacturing. Since rare earth elements are indeed rare, the Chinese and South Koreans can negotiate terms of manufacturing between the Samsung hardware and the Foxconn manufactured Apple products.

Apple may find that their manufacturing costs may increase substantially and that their margins may be under pressure for the next few years.

More importantly, the rare earth elements may become more pricey for their devices.

How, you may ask?

Because if the South Koreans have been storing up one billion dollars of physical gold, they could exchange that gold with China and PRC banks in exchange for rare earth elements used in the Samsung tablet.

If Apple is not in position owning gold and silver, they will be pinched in their position and manufacturing cost because Apple will be left without a bartering tool. Apple will be left exchanging USD's and UST's to the Chinese when the Chinese will prefer to be shipped gold bullion instead.

And, guess what I found?

https://www.reuters.com/article/2012/08/02/korea-economy-reserves-idUSL4E8J17JD20120802

SEOUL/SINGAPORE, Aug 2 (Reuters) - South Korea boosted its
gold holdings by nearly a third in July, buying 16 tonnes as
part of the central bank's efforts to diversify its massive
foreign exchange reserves.
South Korea is Asia's fourth largest economy and its central
bank said on Thursday that it now holds 70.4 tonnes of gold,
after paying $810 million last month for the purchase.
The increase barely lifted gold prices but supported
expectations that central banks will remain gold's key buyer as
increased volatility in global markets and waning confidence in
the U.S. dollar fuel a global drive to vary foreign reserves
away from the U.S. currency and government debt securities.

So, guess what T'ville citizens, that buying in London wasn't just China. It was South Korea.

Is it just me, or was that $810 million in bullion purchase ironic or what? It's close to the verdict in the Apple trial.

If the gold price moves from $1600 (price in July) to $3200, the Koreans can liquidate half of the gold and slowly trickle the payments to Apple. Meanwhile, they can cut a deal with China to push the price to $3200 per ounce over the same time frame and hold the gold for Samsung as "collateral" in Hong Kong. China will get to "hypothecate" the gold back to the west, hold the gold for security, and then raise the prices on Foxconn manufacturing of Apple products.

Apple may have won this battle, but they're in for heightened manufacturing costs through their existing channels.

So, say goodbye to the $400 iPhone. It's going to be $800 soon.

foggyroad
Aug 25, 2012 - 9:25pm

Chavez Elections China

I read last week Chavez is cancer free and running for reelection, He's deal making with China for big deals.

Caracas, Aug 14 (IANS/EFE): Venezuela has increased oil sales to China to 640,000 barrels a day, the Andean nation's energy minister said.

"Before, we never sold a single barrel of petroleum to China and now we sell them 640,000 (bpd) ... at a better price than ... in the US market," Rafael Ramirez said in an interview with El Correo del Orinoco newspaper.

Venezuela produces around 3 million bpd and exports more than two-thirds of its output, mainly to the US and China, the minister said.

Until 1999, when leftist Hugo Chavez became president, practically all of Venezuela's oil exports went to the US, but the new government took steps to diversify through sales of crude to China, India, Japan and other nations, Ramirez pointed out.

Thanks to that approach, he said, "we are not subject to the problems of the US and European economy, nor to the devaluation of the dollar".

Venezuela's petroleum relationship with China also includes investment by Beijing in the Andean nation's oil sector.

The Chinese government's 2012 budget includes more than $4 billion for state-owned China National Petroleum Corporation to enter joint ventures in Venezuela's oil-rich Orinoco Belt, Ramirez told the newspaper.

While Caracas estimates the Orinoco reserves at around 300 billion barrels of crude, a study by the US Geological Services says the area could hold as much 513 billion barrels of extractable crude.

Chavez, who has said he expects sales to China to reach 1 million bpd in the medium term, forecasts that Venezuelan oil production will climb to 4 million bpd next year.

Read more..

https://venezuelanalysis.com/news/7173

BillAuAg ¤
Aug 25, 2012 - 9:25pm

Afghanistan Riches

Muslims do not mine, manufacture, create, or build civilizations.

All you need to do is look around the Muslim landscape.

What you will see is poverty profound, ignorance beyond belief, and a hatred of all things non-Muslim.

If Afghanistan is to be developed, it will happen when Islam is driven out or a western or eastern interest digs it out.

Muslims have had these riches for 1400 years. Why should they dig them out now?

tyberious
Aug 25, 2012 - 9:44pm

WHAT!

Bill you are ignorant.

I lead you to water!

Islamic Golden Age

https://en.wikipedia.org/wiki/Islamic_Golden_Age

The Islamic Golden Age is a historical period lasting from c. 750 CE to c. 1257 CE[citation needed], during which philosophers, scientists and engineers of the Islamic world are credited with a period of contribution to scientific knowledge, cultural arts, civilization and architecture, both by developing earlier traditions and by a period of relatively rapid and marked innovation.[citation needed] A substantial degree of historic Islamic intellectual innovation occurred in the Golden age.

Strongsidejedi
Aug 25, 2012 - 9:49pm

Say good bye to Austerity talk

The talk about austerity is out the window.

1. Bernanke has no political interest in austerity.

2. FOMC committee has similarly no interest in austerity.

3. The only people talking austerity are the GOP ticket (specifically Ryan).

4. GOP convention is not going to happen. If it does happen, it will be a very small event in a different town. Tampa's water front and bay areas need to be evacuated and boarded up due to Isaac.

5. TV and media will be covering the devastation along the Florida coast from this hurricane starting 24 hours from now.

6. China and Korea will collaborate on buying tons more of gold and silver.

7. Paulson, Soros, and Gross all buying PM's.

8. Devastating analysis by Eric Sprott on public and private pensions and the financial environment of NIRP vs. ZIRP.

9. Obama and Biden - stay the course ...we're leading the comeback of the decade.

10. Clinton to headline DNC - LOL - media will talk about sex and women's gender issues instead of actual financial reality

Desert Fox
Aug 25, 2012 - 9:51pm

Hey Reefer

Isn't Silver generally considered "extremely" overbought on the second day of any advance?

My charting shows an extremely,,,,,,,,,,,,,,,

tmosley
Aug 25, 2012 - 9:53pm

Bill, your ignorance and

Bill, your ignorance and utterly pointless collectivist jab at all Muslims across all of history has lead you to reside with the other scum in my ignore list.

Good day, sir.

punchbowl
Aug 25, 2012 - 9:54pm

hey bill

not deleted

ignorant punk


Aug 25, 2012 - 9:59pm

@BillAuAg: Seriously?

"Muslims do not mine, manufacture, create, or build civilizations."

Seriously?

​Without going into a lot of detail, I will ask have you ever heard of Algebra? Of a place in Spain called Alhambra? Are you a aware that one of the contributing factors to Renaissance in Europe was because the Muslims preserved Hellenic literature that had been all but forgotten by the West?

You seem to think that because modern Islam has been almost completely taken over by Wahhabi fundamentalism--funded almost exclusively by a dynasty established by British foreign policy in the Arabian peninsula and surviving only because of support from the United States government--that it has always been that way. Islam was not the first civilization destroyed by religious fanatics, and if the present course of events is any indication, it won't be the last.

I don't know where you get your knowledge of history, but it could use a little improvement.

That's about as much as I will have to say here on Main Street. If you'd like to start a discussion in the forums I'll be happy to discuss this there.

https://www.youtube.com/watch?v=al5ZuZ6_b0I

benque Desert Fox
Aug 25, 2012 - 10:00pm

Desert Fox

Brilliant charting. I wish I had even a fraction of your skill.

I've saved your chart, so I can study it in detail and improve my technical analysis.

See you all next year.

foggyroad
Aug 25, 2012 - 10:02pm

Desert Fox

Now that's what I call A chart!!

Now if You could throw on a Bollinger band and a MACD, I could get a better feel for the short term trend, Thanks in advance

:)

¤
Aug 25, 2012 - 10:11pm

Naw, it couldn't be?

Venezuela has nothing to worry about in the future, right?

#15~ 365.8 tonnes

twippers foggyroad
Aug 25, 2012 - 10:28pm

Foggy road chart

Wow! That chart looks like the lighting on the stage at the climax of last night's Metallica concert in Vancouver last night!

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