The Week That Was

420
Sat, Sep 15, 2012 - 12:03pm

I tried to warn you that this week was going to be wild. I expected the pressure and intensity to ramp up with each successive day and it most certainly did. By Friday, everyone was ready for the weekend. That's fine but, come Monday, you'd better be ready.

What a fantastic week we had. Made even more special by the fact that we were set up for a disaster. Recall that I had been warning you for about 10 days that a Cartel Raid seemed on the horizon. They looked like they were once again setting everyone up for a massive beatdown. By the looks of the CoT yesterday, I was exactly right.

The situation, as it turned out, was eerily similar. Let's take a look:

December 2011: The price of gold bottomed late in December 2011 at $1525. The CoT also "bottomed" at a total gross Cartel short position of 325,960 and a net short ratio (gross shorts divided by gross longs) of 1.98:1. The price of silver bottomed at $26.40. The silver CoT bottomed with 55,356 gross shorts and a net short ratio of 1.34:1.

Jan-Feb 2012: The metals then took off on a two month rally, peaking on Tuesday, February 28. Gold reached $1790 (+17%) and silver made it to $37.50 (+34%). The CoT taken that afternoon showed a complete reversal from December. Now the total gross short position in gold was 390,412 with a net short ratio of 2.69:1. The total gross short position in silver had reached 78,395 and a net short ratio of 2.32:1.

And what happened the next day, 2/29/12? Using The Bernank's Capitol Hill testimony as cover, the bid side of the metals was overwhelmed by Cartel manipulation and a 3-month, short-covering beatdown ensued. https://www.tfmetalsreport.com/blog/3465/csi-comex-gold-and-silver-massacre

Gold bottomed again almost exactly three months later on Wednesday, May 30, 2012 at $1537. Two days later, the employment report for May was released and QE has been on everyone's lips since. On Tuesday, May 29, the CoT once again looked like this:

May 2012: On 5/29/12, the total gross short position of The Gold Cartel stood at 300,917 and the net short ratio had fallen all the way to 1.77:1. In silver, the gross short position was back to 60,151 and the net short ratio had fallen back to 1.31:1.

It had all been a set-up. From the lows in December, spec money flowed into the metals and The Cartels welcomed every dollar. At the peak, The Bernank was rolled out in front of the cameras to put off QE and The Cartels attacked. Over the next 90 days, they covered all of their fresh shorts and then waited all summer to play the game again.

August-September 2011: The final bottom for gold occurred on June 28 at $1552 and silver reached $26.21. The CoT on June 26 was once again at a "bottom", too. On Tuesday, July 10, the total gross short position of The Gold Cartel was 316,165 and the net short ratio was 1.93:1. The total gross silver short position was 62,478 and the ratio was 1.29:1.

As of this past Tuesday, September 11, look how things had changed again. Prices had risen considerably. Gold closed on Tuesday at $1735 (+12%) and silver closed at $33.56 (+28%). The total Gold Cartel gross short position was once again 380,239 and the net short ratio was 2.66:1. The total Cartel gross silver short position was 79,478 and the net short ratio was 2.47:1.

The Cartels had set us up again. The point is this: If the Fed had "disappointed, if The Bernank had put off all new QE until after the election, there can be zero doubt that we would have, once again, seen a massive, manipulative raid on gold and silver.

In hindsight, do you recall the very sharp and brief spike down that occurred about 10 minutes before the Fedlines were released on Thursday? This was almost certainly someone or something with foreknowledge of the raid, attempting to front-run The Cartels. By now, we all know what happened, instead. Rather than being "saved" by The Bernank and using "no QE" as cover to screw everyone once more, QE~ was announced and now The Cartels are trapped!

We'll use the days ahead to go into greater detail on the implications of this but rest assured for today that sharply higher prices are coming. QE~ only serves to increase the global demand for physical metal. This demand will underpin any attempts by The Cartels to start a selloff. Over time, they will be forced to cover at an accelerating pace, similar to April 2011 in silver and August 2011 in gold. There will be panics and you can count on every dirty trick imaginable being thrown at the "markets". This time, however, it's not going to work. With QE~ as a backdrop, every dip will be bought, each successive low will be higher. The overconfident and greedy fools could/should have used this time to draw flat and perhaps even go net long. Instead they arrogantly chose to play their games one more time. This time, however, they will lose. The game is over and the fireworks have begun, even if the players seemingly haven't yet heard the final whistle.

Only one reading assignment this weekend and it's this piece from Brandon Smith at Alt-Market. This is one that you need to read carefully and then print it off and keep for posterity.

https://www.alt-market.com/articles/1034-get-ready-for-an-epic-fiat-currency-avalanche

Lastly, once again I beg everyone to recognize that this main thread is for the discussion of precious metals and issues affecting such. It is OK to reference events in the MENA as the current situation there clearly has an impact on the global economy, the price of oil and the equity markets. It is not OK to get into pissing matches regarding "radical Islam", "Zionism", "American Imperialism" and the like. There are forums for that and I've even gone to the trouble of setting one up for you: https://www.tfmetalsreport.com/forum/4188/radical-islam. Going forward, I am simply going to delete and remove comments from this main thread that I feel are set to hijack the discussion and turn people away from the education that this site provides. No exceptions. Got it?

OK, with that, I wish everyone a fantastic and restful weekend. Come back on Monday prepared for another wild and crazy week.

TF

About the Author

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

  420 Comments

Jager06
Sep 15, 2012 - 12:08pm

Top Ten?

On a weekend too!

No number 2!

New all time record for me.

(Bows graciously)

dgstage
Sep 15, 2012 - 12:11pm

Thanks Turd

For all you do.

SilverFocker
Sep 15, 2012 - 12:16pm

OOps

Hello

I have really gotten interested in Colloidal Silver thanks to Beinki.........I have not seen him on here for some time, but I would like to set up a forum on this subject if there are others interested.

If we could get Beinki in on this or any one who has experience with it to Q&A, it would be an interesting topic.

El Gordo
Sep 15, 2012 - 12:24pm

Let's go shopping

I've got fiat ready to burn, so here we go. No waiting to see what happens tomorrow, just dive in head first.

Mickey
Sep 15, 2012 - 12:25pm

raids

I think we will see some more raids. We will view those raids as our opportunities. they should be brief and IMO brief could be measured in hours or even minutes.

When metals were in their uptrend 18-24 months ago there were raids. On almost every occasion I bought equity options as a short term trade and most were rather profitable--the losers were a ding.

When the sentiment or whatever you want to call it turned south, I went small on options and lost small (but losing is never fun especially when your core position is losing too).

So I think the current market dictates my strategy from 18-24 months ago-fundamentals could not be better. in the 2 years nothing has been fixed and indeed worsened. The Fed message is things are for the birds. The Obama message is give me time (aka I want to kick the can down the road some more and by the time I am out of office Obamacare will be as ingrained in society as medicare and social security regardless of the little detail of that all are unaffordable).

I keep on looking for how the hell we get out of this mess and I cannot find a reasonable answer.

Gold, silver, food, friends, guns, ammo and some sort of escape plan.

Sad, but true.

Hobo
Sep 15, 2012 - 12:31pm

Net Short

Hi. I'm new here. Could someone explain to me how the net short ratio is calculated? I am confused as to how this ratio could be anything except for 1.

¤
Sep 15, 2012 - 12:37pm

*7 ~ Calender moving forward...

https://www.zerohedge.com/sites/default/files/images/user3303/imageroot/...

Thanks for the update TF

Seven Mary Three Cumbersome Lyrics
Vasoline - Stone Temple Pilots ~ Lyrics
Nana
Sep 15, 2012 - 12:37pm

A Little Something

Moonlight In Vermont
Moonlight Serenade
Best B
Sep 15, 2012 - 12:41pm

Dont Forget

Quadruple Witching Day this coming Friday, most assuredly adding to the volatility.

Best B

¤
Sep 15, 2012 - 12:43pm

Obligatory No. 9

The Beatles-Number nine

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