Patiently Awaiting The Drama

Wed, Sep 5, 2012 - 11:14am

The fun starts tomorrow with ECB news and the ADP numbers. Then it really gets going with the BLSBS on Friday. For today, however, it's a narcoleptic paradise.

It seems no one, including The Bad Guys, is ready to make any substantial bets ahead of The Drama. So, here we sit. As you can see below, both metals are trading in a pretty tight range. I would expect this to continue today with any rallies being capped and any selloffs being bought.

The Pig squealed a bit yesterday bit has since fallen right back toward the 81.20 support/resistance line. Like the metals, I wouldn't expect much substantial movement until tomorrow.

Lots of talk recently about the declining lease rates for silver. Today is such a dull day that it seems a good time to discuss them. There are a couple of things you need to know:

  • I feel that gold lease rates plunges are a more reliable "raid predictor" than silver lease rates.
  • Short-term gold lease rates remain steady around -0.10%, where they've been for the past 5 months.
  • However, on three separate occasions over the past 12 months, you can clearly see where a bottom in lease rates below -0.40% has preceded a short-term top in silver.

Taking this into account, lease rates by themselves are not a reason to lighten positions but they are definitely something you should be checking from time to time.

And I think I finally understand why Nadler is such a first class deltabravo all of the time. It's pent-up, sexual frustration. He knows that a FOAD such as himself has zero chance with hot chicks and, consequently, seeing the Sensual Temptress Daniela roaming the halls every day must drive him crazy! Below is a link where the sultry Ms. Cambone interviews The Great Bill Murphy. Not a lot of new material here. Just a very nice distraction on this very dull day.

Not nearly as exciting but worth the two minutes is this CNBS sketch with Jimmy Rogers:

Here's your daily debka update on the impending MENA disaster:

And, lastly, have you checked out the Baltic Dry Index lately? We were watching it closely earlier this year as it collapsed to multi-year lows near 650. Surprisingly, it then surged back to 1100+ in May and July. Since then, it has collapsed again and currently sits at 698. Sort of like lease rates, the BDI is not some kind of be-all-end-all predictor of future events. It does, however, have significance and it needs to be monitored.

That's it. That's all for now. I'll update later if anything exciting happens. Until then, I'll just be sitting here, watching that kitco clip over and over.


About the Author

turd [at] tfmetalsreport [dot] com ()


Sep 5, 2012 - 11:15am


Silver spike pleaseee!

Sep 5, 2012 - 11:16am

Finally! I can stop

refreshing the page...

Sep 5, 2012 - 11:16am

The end

It's the end of the world as we know it and I feel fine.

Sep 5, 2012 - 11:18am

It Sure Feels Like Something is Ready to SNAP .....

* Fire breaks out at French Nuclear Power Plant

* 7.9 Magnitude Earthquake off Costa Rica Triggers Caribbean Tsunami Warning

* MSM stating Gold going to 1500

* MSM stating Gold going to 2500

Yada, Yada, Yada!

TreeTop Dweller
Sep 5, 2012 - 11:26am

Drinking and Driving

A Top 10 listing?!!!

I would like to share an experience with you, about drinking and driving.

As you well know, some of us have been known to have had brushes with the authorities on our way home from the odd social session over the years. A couple of nights ago, I was out for a few drinks with some friends at the Marriott Hotel and had a few too many beers and some rather nice red wine.

Knowing full well I may have been slightly over the limit, I did something I've never done before: I took a bus home. Sure enough I passed a police road block but as it was a bus, they waved it past. I arrived home safely without incident, which was a real surprise, as I have never driven a bus before and am not sure where I got it.

Sep 5, 2012 - 11:29am

Jim "Big Head" Willie makes an important point

Repost; I was hoping for some feedback on an important point

J-Big Head-W makes what I think is an excellent point
right at the start of this interview.
I have said this before. And now it's more true than ever.
He says; (incredulously and sarcastically~!)
"Are you making the ass-umption that
the public has lots of money to spend on PM's,
OR, that they ever would?"
Precisely my take Jimbo.
The sheeple are slowly or quickly being drained of all their money
- just to maintain their life style or in some cases
just get food and shelter.

Additionally, Sgt. 'Pea Brain -Schultz goes on to say:
And if the market drops- do you think they will take their tiny remains, and go buy the one thing that the MSM has them totally scared of?????????????????????
Now, there are still people with piles of spare cash,
but I maintain that they have been thoroughly dissuaded from any PM investments.
How about both my relatives - rich retired jewelers - who made their fortunes on PMs (!)
BUT who have nothing invested in them?????????????
We must admit, TPTB have spent billions on anti-PM propaganda.
And the sheeple, being good sheeple, are convinced;
''PMs are firstly archaic, and secondly go up an down WORSE than the market.
Besides, are you gonna eat yur silver?''
Let me tell ya, you mention food, and you have the sheeple's UN-divided attention.

"What~!??? McD's won't take Ag for Big Macs? I'm outta there~!"
Sep 5, 2012 - 11:31am

The paper game....

arrrrghhhh.....Now don't get me wrong as I only mess with some of my employers 401k match in my trading account but as of yesterday the miners were doing pretty well this past week making up about 10% of the 30% originally lost this past year. Well yesterday afternoon I decided to take some profit on EXK and GPL but held onto a chunk of AUQ as the technicals looked like it could go a little further....welllll...I wake up this morning and have all of the past week or twos gains gone as AUQ took a 20% dive at the open due to updated guidance it seems.......did I say arrrrggghhhhh.

Sep 5, 2012 - 11:35am
Sep 5, 2012 - 11:37am

The American Dream

patiently awaiting the drama indeed

Sep 5, 2012 - 11:37am

Sensual Temptress?

Different strokes for different folks, and all that... But I vote for Patty Ann Brown.

Yowsa! That's a nice sense of humor!

Patti Ann Browne's Red Eye Intros
Sep 5, 2012 - 11:40am

For those who missed this on the last thread, please please read

This is some powerful stuff, really think about what this man is saying...

Goodbye, America.

For as long as I’ve lived you’ve been my only home. I’ve had a wonderful life here. Your inhabitants are almost universally kind, and I’ve become lifelong friends with many of your citizens. All of my family lives here, everyone I have ever known or loved, and I will miss them all a lot. But after 22 years, I feel impelled to leave.

According to your founders, “When in the Course of human events it becomes necessary for one [person] to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.” Well, I certainly wouldn’t want to be disrespectful.

At first glance, you look like the greatest of all social systems. You seem like a stable and sturdy structure. People look at you and see strength. They see freedom and opportunity, democracy and unity. But a peak behind the curtain reveals a scared old man, desperately trying to maintain an illusion. Your size and complexity hide a simple truth: that you don’t physically exist. You are nothing more than a system of human interaction; not a thing in and of itself, but the result of a widespread pattern of behavior. You emerge from our beliefs, and the actions they compel us to take.

We learn our roles and play them well. The guards act like guards, the judges act like judges, the cops act like cops, and we all pay our taxes. You exist because individuals behave as if you did. Of course this seems patently obvious, but it has some frequently overlooked implications. There is an inherent problem with this sort of system, a cancer written in your genetic code, an inoperable tumor that spells your demise.

The mistake is so subtle that generations have failed to identify it. Your creators devised a way to hide it for centuries. They separated your powers, pitted ambition against ambition to mask your fatal flaw. As long as people were content, as long as your tyranny was well hidden, the problem went unnoticed. But it was there all along, metastasizing beneath the stars and stripes.

The problem is choice. I alone control my actions. Your system depends on us adhering to a certain pattern of behavior, but we each have the power to reject it. You will only survive as long as individuals believe you exist and act accordingly, but you cannot compel the choice. You can never take away my ability to choose life without you, to ignore your behavioral suggestions, to act on my own.

Oh but of course, you tried your best to conceal this fact, to convince me I needed you, to give me faith in your existence, to make me fall in love with you, to count you as my own. You started young, indirectly at first and then directly through my “education”.

For thirteen years I was forced into your indoctrination facilities, and social pressure pushed me into another three and a half. Without a doubt I learned many useful things. I had many wonderful teachers who only wanted what was best for me. I am grateful for their wisdom.

Far more sinister were the unspoken lessons. Structure matters more than content; your hidden messages are far more powerful than what is said aloud in lecture. For more than a decade you required my direct submission to your representative at the front of the class, using all the silly threats that work on a child. You taught me that knowledge is obtained from authority, that all problems have answers in the back of the book. You judged me constantly, trying to teach me to look to others for approval, trying to make me conform. You lead me in the pledge of allegiance over 2,000 times. But worst of all, you tried to parent me. You tried to make me realize a familial bond with you, to make me believe you had my own interests at heart. You tried your best to make me choose you, but it didn’t work.

The more you try to coerce my affection, the more obvious the ploy becomes. All the ridiculous forms of manipulation that go unseen by the masses are the red flags of malicious intent. My obedience isn’t for my protection, but for yours. You don’t want me to see the choice because that leads directly to an investigation of merit. No longer are you a parent that must be respected, but a business transaction that must be evaluated. Well America, your benefits don’t outweigh your costs. You do more harm than good.

I recognize your advantages. I understand you have rivals who treat their citizenry far worse. Raised in another land, it’s possible I would have never received enough information to understand my situation. And for that, I thank you. But it’s not enough. Your existence relies on a mortal sin, and no amount of bribery will sway me to forgive you for it. No number of schools, hospitals, roads or defense networks could ever justify your systematic use of aggressive coercion.

Coercion is “the practice of forcing another party to behave in an involuntary manner by use of threats, intimidation, fraud, or some other form of pressure or force.” Making someone do something they wouldn’t out of their own free will. Aggressive coercion means the initiation of such action. Threatening someone who hasn’t threatened you, defrauding the trusting, harming an innocent; the initiation of force.

Coercion is your single purpose, your only weapon and your only form of control. A government IS a monopoly of the “legitimate” use of aggressive coercion; a monopoly over the initiation of force IS a government. Hear it straight from the horse’s mouth. When all you have is a hammer, every problem looks like a nail.

It’s not your fault. You were created with one lever, so every time the people wanted change you pulled it. When people got scared about retirement, you gave them Social Security. The price: enslaving the next generation. You put the bill on the backs of their children before they were old enough to vote, and the only choice you provided was pay up, leave or live in a metal cage. When people got scared about flying or drugs or pornography, you pulled the lever and made more threats. All of your rules are coercive. Every single piece of legislation is ultimately backed up by a threat of physical violence. Every law is a gun under the table, and I don’t negotiate with terrorists.

I will not support the use of aggressive coercion as a solution to social problems, even implicitly by voting or paying taxes. It causes far more problems than it solves. This isn’t a belief that was handed down to me as many of your citizens obtained their ethics. My belief that that coercion is undesirable and ineffective isn’t based on faith, and I’m open to the possibility that I’m wrong. But this is the conclusion of my sincerest attempt at an objective search for truth. It is a conviction forged with evidence and reason. I don’t believe aggressive coercion is wrong because anyone says so; I won’t support its use because of the way it affects humans as individuals and societies.

This probably seems like a radical and unsubstantiated belief to you. It’s certainly an uncommon principle within your borders. It might be unusual, but popularity has no bearing on truth. On the scale of individual interactions, it’s clear that receiving threats is not desirable. Nobody wants to be coerced, by definition. But what if threats can be used for the common good? What if the negative effects of coercion to a society are outweighed by its benefits? The more I learn about the world, the more I realize that this is not the case. Coercion inhibits the evolutionary search of the free market, it prevents us from trying out new solutions to social problems and from recognizing failures. I’m convinced it’s the cause of almost every problem you purportedly use coercion to solve.

Of course, your greatest supposed benefit is the defense you provide. But what noble defender extorts payment from its clients? How could you possibly be defending us when YOU are our greatest threat? Like the Mafia’s protection racket, our greatest danger presents itself when we refuse to pay. There is only one entity that has ever threatened me with death or imprisonment, and that is YOU. No foreign government, terrorist organization or even a criminal on the street has ever threatened my life or freedom, only you America.

Granted, you provide defense from some of your smaller competitors. You imprison lesser thieves and murderers, a charade to prove your worth. Clearly these are problems that any society must deal with, but ceding the power of legitimate defense to a single entity only exacerbates them. Without feedback such as prices and profit, no one has any idea what methods are effective or desirable. Granting a monopoly of defense is like giving all the guns to an army of deaf men and acting surprised when they don’t respond to our shouts. People deserve a distributed, voluntarily-funded defense network that utilizes free exchange to find the cheapest, most desirable and most effective methods of preventing the initiation of force. Imprisoning tax evaders and drug users while bombing innocent civilians in the Middle East is NOT defense, and I will not allow you to fund your crimes with any portion of the fruits of my labor.

Almost every social problem can be traced back to your gun in the room, pointed at us under layers of abstraction and legalese. The most subtle, and most deadly, was the corruption of the price system. You enslaved us with the strongest chains known to man: a debt-based monetary system. You deprived us of accurate value measurements. You prevented us from equilibrating supply and demand. You tilted the scales in the market, and threw off all our transactions. You prevented us from acting rationally by quietly replacing our money with a cheap replica, and forcing us to use it.

But your tyrannical nature isn’t the only reason I’m leaving, especially not why I’m leaving right now. I’m not only fleeing your coercion, but the inevitable economic collapse your inhabitants are only beginning to appreciate.

I better explain that phrase. “Economic collapse” means a reduction is economic complexity: a decrease in specialization, a slow down in trade, brought about by a loss of confidence. It’s not a fantastical, delusional prediction. Your economy is based on a con game that cannot be sustained.

Your monetary and fiscal problems are rivaled only by the artificial complexity of your financial system. But at its heart, the problem is simple: Everything is based on the assumption of infinite exponential growth. For a long time, that assumption was never tested. We could stick straws in the ground and produce energy for pennies on the dollar. The underlying economy actually grew exponentially. This allowed the Ponzi scheme of your fiat currency to survive a little longer than usual. For a while, the growth of the money supply reflected the productive capacity of your people, enabling an astounding degree of complex specialization and trade. But the era of cheap energy has come to an end. Like any population that finds an untapped resource, we went for the easiest parts first. Now all the low hanging fruit has been eaten, and we can no longer increase annual global oil production. We have generations of social arrangements built on assumptions that are no longer valid. Your money supply is expanding faster than ever, but it no longer mirrors the productivity of your citizens. It is being artificially expanded to paper over the cracks in the dam. Your puppeteers have made more promises than could ever be fulfilled, and they are printing money to pay off their debts. This never ends well. Regardless of whether you print your way into hyperinflation and currency collapse, or default on your debt, it’s clear your path is unsustainable. Collapse is mathematically guaranteed, and it’s not something to play chicken with. I’d rather be ready a decade early than a day late.

Some might think I should work to save you instead of leaving you to crumble. The ship is sinking, and we either need to make repairs or head for the lifeboats. But I took a look at your blueprints, and you were never structurally sound to begin with. You were constructed with fundamental flaws. Moreover, I believe we’re passed the point of no return with this monetary system, and the dollar isn’t worth saving. The mainstream media is the band playing on the Titanic.

“There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved.” Ludwig von Mises

I don’t want to be here to witness your darkest hour. We will all have to face this paradigm shift, but I want to confront it on my own terms. I want to meet it with consciousness, integrity, and a sense of purpose. I don’t want to wake up one day and have a rough transition thrust upon me. I want to make that transition now, and sleep through your collapse.

America, I never signed your social contract. I never agreed to taxation, even with “representation”. I refuse to recognize the legitimacy of an organization founded upon aggressive coercion. I don’t recognize your laws and I don’t recognize your property claims. I’m not leaving because I can’t live here with my principles, I’m leaving because you physically overpower me. I stand a much better chance fighting for my freedom outside your territory, and I don’t believe it’s cowardly to admit that. I see no value in your Federal Reserve Notes, and I sure as hell don’t owe you any. Your debts are not my own. Your battles are not mine to fight. I will not allow you to enslave me any longer.

I don’t know what the future holds. I may be underestimating the difficulty of life without you, or your vengeance towards dissidents and deserters. I could’ve very well come to regret leaving your borders, but right now I highly doubt it. All I can do is make the best decision with the information I have, and the only logical conclusion is that life will be better without you. Like your people are so fond of saying: freedom isn’t free; but I’m more than willing to pay the costs, no matter how high they might prove to be.PS. I don’t believe information can be legitimately owned. I don’t own these paragraphs anymore than I own the words they’re composed with, or the letters forming the words. Nothing here is copyrighted. Feel free to copy and distribute this however you wish.

Michael Fielding recently graduated from the University of Texas with a BS in Computer Science. After which he headed to the Caribbean aboard his boat, Sovereignty. As of this update, he is in Miami preparing for the journey across the Gulf Stream to the Bahamas. He describes himself as a full-time thinker and adventurer.

Sep 5, 2012 - 11:43am

Greek protests....

hmmmm....judges and police now on the other side? People are people you know wherever they may be so could we start seeing this happen in other places next? "Of course it's not common to see judges protesting but we were obliged to gather today to express our opposition to the planned new cuts," Vassiliki Thanou-Christofilou, head of the Association of Judges and Public Prosecutors, told the AP as about 200 people _ including senior judges _ took part in the protest. Police, Fire Service and Coast Guard associations are planning a protest in central Athens with officers in uniform on Thursday. Earlier this week, pharmacists and doctors stopped extending credit to the state EOPPY health fund, with whom more than 9 in 11 Greeks are insured. As a result, people registered with EOPPY have to pay the full price of medicine and health services.

Sep 5, 2012 - 11:44am


Bought some crude at 94.50, hopefully it's a steal like Turd said

Sep 5, 2012 - 11:49am

As we are waiting, feats from the paralympics

David Wetherill with a fantastic shot at the London 2012 Paralympic Games for GB (with replay)
Richard Whitehead London 2012 Paralympic 200m Gold
Sep 5, 2012 - 11:50am

First and Last !

First of the lasts .... and last of the firsts .... and everything in between ! Although I don't play the first and last game (because mainly I don't know how to) .... I'm always amused by the playfulness of our fellow Turders ! I'm Monedas 1929 and I, Comedy Jihad, approve this message !

Sep 5, 2012 - 11:57am

Iran liquidating dollars

And getting gold in return!

$6.2 b worth so far this year. In my opinion, it does not seem that the SWIFT system sanctions are having much of an effect.

btw- that is approximately 250,000 lbs of gold!

Sep 5, 2012 - 12:00pm

MOPE in action

Management of Perception Economics

Several people have said that one should do just the opposite as the economic analysts in teh mainstream media. As a professor of mass communication, I agree. I posted this image last spring, but I think we have enough new colleagues here that is worth re-posting. I will also be sharing this with two of my college classes. I actually corresponded with Bloomberg and called them out on the graphic. They said they would look into it, responded later that they found nothing amiss, but have since removed the video from youtube.

Sep 5, 2012 - 12:06pm

EU Asked to Stay Together Until After US Election

Perhaps this has already been posted here someplace in Turdville (I have not seen it, so apologies if this is a rehash).

In late August "The Independent" ran an article that indicated the Obama administration has asked European leaders to hold off on any action that might see Greece exit the EU, until after the November election. That's right. The fear is not that the EU will fall apart, but rather that it might happen before the election and damage the incumbents chances of being re-elected.

Full Article is Here.

Sep 5, 2012 - 12:07pm

Dominos Are all Set Up

the New York Times wrote:
Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable.

According to the full article US Banks and Corporations are making contingency plans for an exit from the Euro by Greece.

Here is a link to the Full Article

But - don't worry - everything is great in Europe. And - oh right, the rest of us are next, right after the dominos start falling.

Sep 5, 2012 - 12:20pm

Constitution. Britain (UK)

Constitution. Britain (UK) does not have one.

Am reading Caroll Quigley's "Tragedy and hope" full edition. 1500 pages, but it is a very interesting and broad take on history, including banker etc cartels and their influences as they were, without much cover. Am only about 1/3 in the book and just learned that UK does not have a written constitution. So e.g US has a constitution, and bar Mr. Puck, many here ( I am outsider) try to invoke observing constitution to the point of absurdity as the way out. That to me seems a bit dogmatic, but OK.

Now I find that UK does not have a constitution at all, just conventions , some of whom are written in laws, some are not. Nothing about separation of executive branch from others etc. in a prime document. Well, I guess most here would say its also governed badly. Is not an anarchy, it has a state, but has no constitution. So, constitution may be not necessarily needs a state, as state not necessarily needs a constitution. At least, in both cases, with or without, its not the existence of constitution that decides how the country is governed. I would say that it basically does not depend on the constitution at all if we take the outcome as whole society . With or without, its ruled by powerful interests, that change with epochs and times.

So, its much more complex issue than observation or giving divine powers to constitution which exists or not. That is not the way out. That does not reveal the true power holders today, their policies and actions , nor possible counteractions etc. etc. Rather, it stops person from searching true interests and power structures, and their drivers, and methods. We had a constitution in the SU, quite democratic, since 1936, written by Stalin. SO WHAT? No relation to reality, 0.

If You think that I have overstepped into a zone I have no idea about as it might be radically different in the USA ( though i think only grades differ, not the principle that constitution is more like veil over peoples eyes, disturbing their critical reasoning. ),


I already accept that I am wrong. It is just the book, Quigley's " Tragedy and Hope" , which I truly recommend for its depth of investigation in power structures of each period, many countries, and open presentation of them.

The Green Manalishi
Sep 5, 2012 - 12:21pm

Latest from Silverdoctors


Kitco’s Daniela Cambone interviews GATA’s Bill Murphy, who repeats his claim that JP Morgan has a MASSIVE PROBLEM with it’s silver short position (a problem that appears to be larger now with recent massive increases in the commercial short position, and silver $5 higher than Murphy originally made this call a month ago).
The GATA icon states that the JP Morgan silver scandal may break THIS MONTH, and that he expects silver to break above $50 and make new nominal all-time highs in the very near future!


Sep 5, 2012 - 12:30pm


In previous thread you said,

"We on this board are in such an amazing place and time in history that we have the opportunity to accumulate such wealth so easily. That I think we take it for granted sometimes.

I for one do not, For every Silver Dime I can purchase I feel I am giving my family a buffer of 1 days hard human labor"

Me too. I went to a local flea market this past Sunday, and a guy there was selling a few silver dimes, quarters, and war-year nickels. Dimes were $2 and quarters were $5 and nickels $1. Spent $44. I've done this many times over the years. I just stack em away. Hopefully, if I don't live to use them, my kids and grandkids will.

alberta silver t4rd
Sep 5, 2012 - 12:31pm

That chick from Kitco is easy

That chick from Kitco is easy enough on the eyes... but in my opinion she was somewhere between condescending / baiting / ignorant to Mr. Murphy. Singularly this would be less of s big deal, but I personally think he was not well treated at the kitco debate against Jeff "the atomic dildo" Christian in a similar fashion..

Sep 5, 2012 - 12:36pm
Sep 5, 2012 - 12:37pm

@ Green re: Bill Murphy interview

Green, did you happen to read Turd's writeup before you posted?

Interesting that Bill is making no predictions on gold but he does have a prediction for silver price. Sounds like the silver situation is more dire at least in his observations.

Sep 5, 2012 - 12:37pm

I agree...


I agree and am getting tired of all the critical moments and black swans that keep landing and quietly hidden. I am concluding that the "end game" will be a long steady decline rather than a collapse, al the while keeping the sheep in the dark.

ancientmoney babaganoush2307
Sep 5, 2012 - 12:38pm

@baba-g, sandbox

Sandbox said, "hmmmm....judges and police now on the other side? People are people you know wherever they may be so could we start seeing this happen in other places next?"

Baba-g, the letter you posted is indeed well-thought out, and darned accurate. It expressed my jumbled feelings in definition. I, too have thought of leaving, but my family is all here. Besides, where can one go? The whole world is caught up in a similar, myasmic set of lies.

Another way to "leave" is to stay, as people one-by-one change their understanding of what government is. There is a tipping point. Ron Paul has legions of young people who question the system, the Federal Reserve. That tipping point will be reached. I think, soon.

Sep 5, 2012 - 12:41pm

Feels like coming home

What a good week I am having:

I started off the week listening to an interview with Frank Giustra which I found on the Mike Maloney site. That put me on to this;

Video unavailable

I watched every part, back to back in awe. It was as if everything I had spent the last 20 years unfolding experientially was contained in that series. Incredible!

Today babaganoush2307 posted a superb piece from a free thinker. The previous thread, it was called "Goodbye America" and thankfully baba reposted it on this thread. See above - "For those who missed.............." (I was going to copy and paste myself - it is so good)

These ideas formed in me in the last 6 six years. I call it my red pill moment. They were all there, like gossamer threads floating in and out of of consciousness - sometimes striking home hard and then fading; this guys nails another big chunk of who/what I am about.

It is entirely comforting, when one embarks on the often very lonely journey of thought and reflection, to arrive at some meeting place, and find other independent travelers, who have arrived at the exact same conclusions/destination. (confirmation bias perhaps. I think not).

Not to forget the precious - perhaps arising from their slumber?

In freedom in all things.


Sep 5, 2012 - 12:42pm


Gold mine cash costs jumped 19% in H1 2012- GFMS

According to the metals consultancy, while gold production was roughly flat during the period average total cash costs rose to $727 per ounce

Author: Geoff Candy
Posted: Tuesday , 04 Sep 2012


While global gold mine production was at best flat in the first half of 2012, average total cash costs jumped 19% to a new high of $727 per ounce.

According to Thomson Reuters GFMS's Gold Survey 2012 Update 1, some of the reasons behind the hiatus in production are declining grades across the industry, construction and commissioning delays and slower than expected ramp-ups of output at a number of properties. Added to this, the group said, were exogenous factors like geotechnical problems, extreme weather and labour strikes.


The problem with the gold mining industry is the same with the oil industry -- that is -- they have to increase production every year to offset depletion rates. According to Nick Holland's (CEO of Gold Fields) recent presentation on the top 8 gold miners, average ore grades have fallen 5% per year in the past five years. This means that the gold mining companies have to either increase total processed ore or bring on new projects to offset this 5% decline on ore grades.

In 2011, the world produced about 87 million ounces of gold. If we apply some simple math:

87 million oz X 5% average ore grade decline = 4.35 million oz annual depletion rate

So, the world has to increase gold production approximately 4.3-4.4 million oz a year, just to keep global gold production flat. Again, they can do this by increasing the amount of ore processed or by bringing on new projects. I believe it is a combination of the two.

More of the article:

But, the consultancy says, "These are not the only headwinds producers have to face. The relative stagnation of the gold price, coupled with further rises in production costs, has seen producers' cash margins eroded by 16% over the past nine months, while upward revisions to capital expenditure forecasts will place additional pressure on free cash flow going forward."

If one adds to this the 6% jump in depreciation and amortisation costs to $203/oz then GFMS's proprietary 'all-in cost' metric which is designed to reflect the full marginal cost of mine production rose to $1,050/oz during the period.


Here we can see that the gold miners are facing several challenges. Not only are costs increasing, but the Investment or CAPEX spending is increasing higher than most had forecasted. According to GFMS, the ALL-IN-COSTS are now $1,050 an oz if we include depreciation and amortization. However, this does not include CAPEX spending, Royalties or Taxes.

The reason why gold ore grades are falling more in the recent years is due to the fact the world is producing a great deal more gold per year. When the world was only producing 1,000 metric tonnes a year back in the 1950's, it was nearly a third less than today. So, the more gold that needs to be mined (such as 2,700 metric tonnes in 2011), the faster we go through these reserves... the faster the ore grades decline.

Thus, we will also see faster and faster increases in costs. I have more data to follow.

The price of gold is not in a BUBBLE. It can't be. If gold fell considerably from here, mine supply would dry up and blow away. Those nitwits on CNBC, can't do simple 4th grade math.

Sep 5, 2012 - 12:43pm

wait for J-hole, wait for ECB, wait for German Court...

There's always another "critical" moment just around the corner. It's tiring. It's also frustrating to attempt to invest in this market, as nothing is based on fundamentals. Sit in cash/mm and wait for it to get vaporized. Sit in stocks/etfs and wait for the bottom to fall out (fundamentals to matter, again). Go with bonds knowing the rates can't go much lower than zero, but have lots of room to go up. Horde the phyz and worry about storage/theft/whether my floor will cave in. I'd love to seen an annon poll of turdville re %'s of stock/bond/cash/phyz/paper metal/real estate (not your house).

edit: I created one. Just for fun. I will leave it open until Friday, then post results.


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Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)

Key Economic Events Week of 4/29

4/29 8:30 ET Pers Inc, Cons Spend, Core Infl
4/30 8:30 ET Employment Costs
4/30 9:45 ET Chicago PMI
5/1 8:15 ET ADP jobs report
5/1 9:45 & 10:00 ET Markit and ISM Manu PMIs
5/1 10:00 ET Construction Spending
5/1 2:00 ET FOMC Fedlines
5/1 2:30 ET CGP presser
5/2 8:30 ET Productivity and Unit Labor Costs
5/2 10:00 ET Factory Orders
5/3 8:30 ET BLSBS
5/3 9:45 & 10:00 ET Markit and ISMServices PMIs

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