Be Not Afraid

Fri, Sep 14, 2012 - 12:15pm

Not that there isn't plenty to be nervous about...

Let's begin with the MENA. As discussed here back on Wednesday, this type of event slowly builds regional momentum as word spreads of the "indignity". The furor will likely peak in the next few days but it remains to be seen if the global powers that be will let the crisis run its usual course. In the interim, crude continues to build a war premium and the declining dollar is shoving it forward, too. For now, I'm still looking for crude to run toward $101 before consolidating again but don't be surprised if it first reaches up toward $104, instead. The events this weekend and Monday will hold the key.

Open-ended and infinite QE is playing heck with The Pig and the bond market today as renewed inflation expectations are giving buyers pause. ("Wait a second. Hold on a minute. Did I really just buy a 30-year U.S. treasury with a yield of just 3%?") I printed off the long-term charts today so that you'd be aware of a few things.

  1. Note that both the 10-year note and the Long Bond recently topped with almost identical head-and-shoulder patterns.
  2. Though the 10-year has clearly broken down through its trendline from the end of QE2, the LB is desperately trying to hang on. Further weakness in the 10-year will break the LB, too, however.
  3. These are just the beginning stages of the next trend downward, though, as prices of both will undoubtedly regress back to their primary trendlines over time.
  4. In the 10-year, this means a fall toward 124-125. In the Long Bond, look for a drop toward 123-124.

And The Pig is truly living up (down) to its moniker today. All those calling for a rally to 90+ certainly have eggs on their faces as the trend from the end of QE2 has been decisively broken. Though there will be bounces and rallies from time to time, previous bouts of QE have led to a Pig bottom near 74 and there is no reason to expect a different result this time around. Again, though, this time appears to be different. This time, The Fed is planning QE to infinity. If so, if nothing comes along to slow this runaway train, 74 will fail as will 72. WHEN that happens...

So now would be the time to stick in a QE~ caveat. There is one fly in the ointment, one potential wrench in the works. The United States could suddenly "get religion". Post the election, perhaps dramatic austerity measures will be enforced. Maybe the president will replace The Bernank with a new, more hawkish Fed chairman. A decision could be made to raise rates and "take our medicine". We'll wring the monetary excesses out of the global system and deal forthrightly with the incumbent deflation.


OK, since all of the steps above are highly unlikely, to say the least, let not your heart be troubled by the price action of the metals today. Sure, it would have been nice if The Cartels had simply run up the white flag yesterday and joined us all on the long side. But never forget that their job has always been to manage the ascent. There are dynamic new forces coming to fore that will soon force their hands and leave them no choice but, in the meantime, please accept days like today just as you accepted the last 12 months: A gift of time for you to continue to prepare. Knowing what you know about QE~, you should be jumping for joy that silver is just $34.60/ounce this morning. You should feel blessed that you can purchase even more gold at just $1773/ounce. There is no way that The Cartels will be able to continue with their destructive ways. The extraordinary, global demand for physical metal continues unabated and will only increase with time as recognition grows that fiat debasement is not a temporary trend. Combine this physical demand with still-unrecognized, historic, vindicative imbroglio that is soon to wash upon their shores, and you get a Cartel that will be forced to recognize the flawed absurdity of "business as usual".

Just keep buying the dips.

And we've got some hats to send out again. Yesterday's contest was a lot of fun and I certainly saw some very insightful entries. I intended to pay out hats to the top 3 finishers but I couldn't decide on 3rd place so we had a dead heat for show. Keep in mind that the closing Globex prices yesterday were $1767.20 and $34.68.

In 3rd we have: "gearhead_24" and "Apathetic or Whatever".

Submitted by gearhead_24 on September 13, 2012 - 10:22am.
Extended QE announced as the Fed "deems" necessary in future intervals. Buys mortgage backed securities.
Not a chartist but I did see silver triple tap 32.95 ish on Kitco chart. Tells me going up BWTFDIK.
Silver $34.60 Gold $1770

Submitted by Apathetic or Whatever on September 13, 2012 - 10:06am.
Fed: announces $500b in mbs purchases along with an extension of twist into the 1st quarter of next year. Gold: 1770 Silver: 34.75

In 2nd place, we have the slightly more prescient "StevenBHorse" who chimed in with this gem:

Submitted by StevenBHorse on September 13, 2012 - 9:45am.
Inflation is transitory due to the recent weather, expected to moderate in further quarters. Formal QE 3 announced, open ended but with a minimum of $600B through MBS and Treasury purchases. Interest rates pegged at zero through mid 2015. Interest on reserves to remain at 50 bps. Au- 1756 Ag- 34.50

And the clear winner was this spookily-accurate entry from "Deeper":

Submitted by Deeper on September 13, 2012 - 9:22am.
With no definite start date or timeline, only specifying open ended MBS and bond purchases. Extend ZIRP policy through mid 2015.
Closing Price today $1769.50 Gold, $34.69 Silver

All four of you need to send me your shipping information at tfmetalsreport at gmail dot com.

As usual, I'll add thoughts later today, once I see the CoT. I'll also try to begin a new thread tomorrow for your weekend enjoyment, too. Speaking of the weekend...I hope yours is safe, fun and relaxing. Keep an eye on the headlines, though, as worldwide craziness could break out at any time. Then, be sure to come back on Monday as we begin another volatile, but fun, week.


About the Author

turd [at] tfmetalsreport [dot] com ()


Sep 14, 2012 - 12:18pm


I'm feeding the Turd today!!

Sep 14, 2012 - 12:19pm
Sep 14, 2012 - 12:20pm
Sep 14, 2012 - 12:20pm

Wynter Benton

Well, it should be good for some fall entertainment again, at least.

Fr. Bill
Sep 14, 2012 - 12:22pm



Edit: Drats! Fifth!!

Even the Mayor cut in line ahead of me!


Dagny Taggart
Sep 14, 2012 - 12:22pm

Thank you TF

Two tubes mint direct eagles waiting at the post office for me today. Buy the dips... hell, just buy anyway. One day we shall marvel that we could redeem the silly colored pieces of paper called the dollar for silver and gold. Thank you for your encouragement TF!

Sep 14, 2012 - 12:22pm


Deeper's entry sure was spookily-accurate. .

Sep 14, 2012 - 12:24pm

UBS trader Kweku Adoboli 'gambled away' £1.4bn

Silly boy. Not enough.
If he'd lost ten times that he'd have got his bonus and a promotion .

A City trader "gambled away" £1.4bn ($2.3bn) of his firm's money and caused "chaos and disaster", a jury has heard.

Kweku Adoboli, 32, of Whitechapel, east London, exceeded his trading limits at UBS in a bid to get a bigger bonus and boost his ego, the court was told.

He denies two charges each of false accounting and fraud between October 2008 and last September.

His actions saw the Swiss bank's share price fall 10%, around £2.8bn ($4.5bn), and also threatened their existence.

Sep 14, 2012 - 12:26pm



edit: No, I think I'll claim second. I mean Turd can't claim it can he? That would be horrifically unfair.


Sep 14, 2012 - 12:26pm
Sep 14, 2012 - 12:26pm

Who gives a "Puck" who made the film ?

I want to see 50 more just like it or worse .... until our President defends our right to free speech ! Monedas 1929 Comedy Jihad Encore Post From Last Thread

Sep 14, 2012 - 12:29pm
Sep 14, 2012 - 12:30pm


I was .18 off silver and 1.41 off gold and I told you he was going to lie

I am the Biggest Loser

Sep 14, 2012 - 12:30pm

And you might want to keep this link around

Maybe keep it open over the weekend. Just sayin...

Sep 14, 2012 - 12:32pm

Sorry, indio

You were very close. You made the initial cut down to 7 but you, RManJ and FrBill lost out on 3rd place.

Silver Alert
Sep 14, 2012 - 12:42pm

Where is the Asian market in

Where is the Asian market in all this? In the past any gains in the metals used to be extended in the early Asian trading hours. But after PM's popped because of the ECB announcement last week and yesterday with Bennie they have been totally AWOL.

Sep 14, 2012 - 12:42pm
Colonel Angus
Sep 14, 2012 - 12:43pm

Buying the shiny stuff

If you see a dip, you have to buy it. If you don't have a farm someplace, you might want to look into buying one. As a billionaire from Texas once told me, "If you don't have an oil well, get one."

Jens Parsson's book _The Dying of Money_ is highly recommended. People who got completely and totally leveraged right before Weimar inflation did the best, assuming they borrowed to put the marks into something of actual value. If you're just going to buy another iPhone, forget it. Buy food, bricks, factories, arable land, or the precious. All are correct choices. There is one bad choice, and that is leaving those FRNs under the mattress or in the freezer. Help BennieBoy get the velocity of money going.

And is going to be our responsibility to help out those around us who are willing to work with us. It will be hard to judge people when they are desperate, so we have to be thinking ahead of time. Who is going to help us and our families, and who is too sugar-addled because they lived outside of NYC and didn't have Bloomberg to tell them to put down the 32 ounce Coke? Who still wants everything to be a handout, and who will help? Important questions to be asking even now.

Colonel Angus
Sep 14, 2012 - 12:45pm

Buying the shiny stuff

Ooops. Duplicate post.

Go get some useful stuff already.

Edward G
Sep 14, 2012 - 12:45pm

Quiet on the morning after

Really enjoyed all the live comments yesterday, love this place to bits...

Deeper, dude, that was uncanny!

Re: Bond prices... It's interesting to see prices expressed in terms of price instead of yield...very educational...actual prices seem to only ever get referred to and not shown.

I am not personally feeling 'war', but extreme 'unrest'.... hope my instincts are good x

And I must say really liked former hat champ Tobin's photo's.... that's a junior I might be interested in... we're all with u bro!

Sep 14, 2012 - 12:52pm

Keep calm and carry on

No panic here - gibber, gibber.

Airplane panic attack
Urban Roman
Sep 14, 2012 - 12:58pm

So, umm,

there's no big hat for being in last place?

Sep 14, 2012 - 12:59pm


Regardless of what you think about Rush Limbaugh, he just stated that the collapse is now inevitable. His audience numbers in the millions, and his words are reported to millions more. Perhaps the Fed's actions accidentally wake up a fraction of the population?

Sep 14, 2012 - 1:02pm


This is so cool. I can't believe I am getting a hat! YIPPPPPEEEEE!!!!!

After looking how things transpired yesterday I thought I might have a chance. My son asked me why so happy and I told him. He said "sweet, I can wear it to school on crazy hat day". How could he not like gold and silver when a Turd is doing the talking. Boys just love saying Turd. He also loves your theme song on Turd Talks Metals, I think it is pretty cool too. I think someone else asked where that lead in song is from but I missed the answer. Could you please let me know. I need to get the MP3.

Thanks Turd for keeping everything going during these trials and tribulations. Here is to hoping the world does not go "Mad Max" but for preparing if it does.

Address is on the way.


Sep 14, 2012 - 1:10pm
Sep 14, 2012 - 1:14pm


I was in a hurry and keyed my gold price 1669.80 instead of 1769.80. Had QE down and silver at 34.29. would have been in the running. So Indio that hurts too.

Just A Regular Guy
Sep 14, 2012 - 1:20pm

Is anyone else worried?

I'm looking @ the US-10 year and UK-10 year and they're going up waaaaayyyy to quick for my comfort. I hope it slows down in the next week, but god, if it stays the same or picks up..... we're f**ked (and i'm in Australia)..... srsly getting concerned. I jsut hope the bond vigilantes are just punishing the Fed.

My feelings were almost spot on with Gerald's regarding sometime this month or next month. I've just got this really really really sick feeling that something big is coming, like F**KEN BIG. Sigh, I'm basically agnostic/atheist, but I want to either drink some booze to calm down a bit, cry, and/or go say a prayer. If the bond bubble.... wait who am I kidding with "IF"... WHEN the bond bubble breaks, my god it's over, and as I said I'm supposedly in a "safer" country.....


EDIT: Congrats to the hat winners! Wear with pride!

Sep 14, 2012 - 1:21pm

Very interesting

Not Faber doing his usual BUT what they obviously edited out. Have a listen:

Anyone got any ideas?


Dyna mo hum dnlward
Sep 14, 2012 - 1:22pm

@ dnlward Rush

I think that fuzzball is slowly beginning to get the message. I think most of his listeners see him changing his views. He seems to be often more critical of the republican party than in the past.

Sep 14, 2012 - 1:22pm

Apple Commits a Blunder??

In my mind Apples decision of changing it's power connector away from the connector they have been with for all these years is a huge blunder. I'm wondering if people are willing to buy a camera that turns itself off when military or police want it to? Who's running the joint?

This from ZD-net;

When the Pentium chip came out 1-meg of RAM was priced at $98.00 based on the rumor of a factory burning down. The smaller boutique computer shop would charge $30.00 for a printer cable to go along with that $300 dot-matrix printer. (Hahaha)


Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 4/15

4/16 9:15 ET Cap Util and Ind Prod
4/17 8:30 ET Trade Deficit (Feb)
4/17 10:00 ET Wholesale Inventories
4/18 8:30 ET Retail Sales (March)
4/18 8:30 ET Philly Fed
4/18 10:00 ET Business Inventories (Feb)
4/19 8:30 ET Housing Starts and Building Permits

Key Economic Events Week of 4/1

4/1 8:30 ET Retail Sales (Feb)
4/1 9:45 ET Markit & ISM Manu PMIs
4/1 10:00 ET Construction Spending (Feb)
4/1 10:00 ET Business Inventories (Jan)
4/2 8:30 ET Durable Goods (Feb)
4/3 9:45 ET Markit & ISM Services PMIs
4/5 8:30 ET BLSBS

Key Economic Events Week of 3/25

3/26 8:30 ET Housing Starts (Feb)
3/27 8:30 ET Trade Deficit (Jan)
3/28 8:30 ET Q4 GDP final guess
3/28 10:00 ET Pending Home Sales (Feb)
3/29 8:30 ET Personal Income (Feb)
3/29 8:30 ET Consumer Spending and Core Infl. (Jan)
3/29 9:45 ET Chicago PMI
3/29 10:00 ET New Home Sales (Feb)

Recent Comments

by NW VIEW, 2 hours 8 min ago
by cashonly, 4 hours 35 min ago
by canary, 4 hours 36 min ago