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

  Refresh
syk
Sep 17, 2012 - 2:14am

Looking for Miners Index Fund

I would like more returns than a typical SLV or PSLV ETF. Although I own plenty of PSLV, I want to diversify into the miners. However, I'm not very good at picking individual miners. Are there any ETFs out there that can do this for me?

Silverman
Sep 17, 2012 - 2:09am

Look at this monthly gold

Look at this monthly gold chart. Looks like another upside breakout is coming today or tomorrow. MACD, slow stochastics, Williams R pointing up nicely.

RunRunRunredwood
Sep 17, 2012 - 1:44am

@silverman

I think Schiff does not explicitly state the political implications of QE3 because they are so obvious. QE3 = obama wins, No QE3 = romney wins.

The implication is that there was a reasonable risk of deflation and market crash before the election, a risk removed by the qe3 announcement, thus helping obama.

It can be argued that the Republicans, in stating that they would remove Bernanke if they win, made qe3 much more likely.

That's my take on it anyhow.

redwood
Sep 17, 2012 - 12:34am

Silverman

Appreciate the Schiff tape. I have listened to this guy, whom Ihave liked for some time. But there are some elements about his slant that bother me.

1. He refers to Bernanke as unenlightened. Really? He doesn't think that Bernanke has a grasp of the basics of economics and knows exactly what he is doing? That misdirection is highly suspicious and makes me wonder about whose side Schiff is really on.

2. He comments that this QE3 is not economically driven, but politically driven. Well Peter why don't you tell us what the political angle is. I don't think I've ever heard/read him really discuss the political implication of all this nonsense spouted by the Fed.

3. We all know that the Schiff family belongs to the original family of the elite. I've never heard why Peter has parted ways.

These incongruities have been blatant for some time. I'm not trying to undercut Peter, but if he made his arguments more realistically it would help. If anyone can enlighten I'd appreciate.

145Bluesman
Sep 17, 2012 - 12:20am

Silverman

I wasn.t sure if you were in the hat tip club so I gave you one anyway.

And thanks for the video.....

Missiondweller
Sep 16, 2012 - 11:35pm

Turd: regarding China

Doesn't it just seem a little odd there are crap loads of pre-printed signs? including posters of Mao??

redwoodredwood
Sep 16, 2012 - 11:29pm

I just realized.  Of course

I just realized. Of course Netanyahu is saying Obama is "throwing Israel under the bus". This allows the electorate to feel good about Obama's anti-war stance. Ensures a smoother victory (not that it isn't preordained, but makes it less messy). Then when O is officially elected he'll be called upon like a good little boy to do what he was chosen for all along. God that is so obvious its painful.

IrksomeWhyMeLord
Sep 16, 2012 - 11:28pm

@WhyMeLord

Change your date range and you'll realize you're just sayin' is just crap. Look at it from the beginning of USLV (the 'youngest' fund), and then look at it since August 15.

Clearly shows that USLV is 3x, AGQ is 2x. If you are looking for leverage in a liquid vehicle, USLV kicks AGQ's ass all day and twice on Sunday. And USLV does not suffer from massive drift over time.

I'm just sayin', and I mean that more than your just sayin'.

Silverman
Sep 16, 2012 - 11:22pm

(No subject)

Operation Screw: The Fed goes all-in on QE
Sep 16, 2012 - 11:22pm

OK, how did I miss this?

I realize it is a couple of weeks old, but...

Soldiers allegedly plotted to kill Obama, oust government By Jeremy Herb - 08/27/12 04:08 PM ET Army soldiers formed a militia group in Georgia that plotted to overthrow the U.S. government — and they killed a fellow soldier and his girlfriend to keep the plot secret, prosecutors alleged Monday, according to the Associated Press.

https://thehill.com/blogs/defcon-hill/army/245747-soldiers-alleged-plot-to-assassinate-president-overthrow-government-emerges-in-murder-trial

Prosecutor: Ga. murder case uncovers terror plot

LUDOWICI, Ga. (AP) — Four Army soldiers based in southeast Georgia killed a former comrade and his girlfriend to protect an anarchist militia group they formed that stockpiled assault weapons and plotted a range of anti-government attacks, prosecutors told a judge Monday.

https://www.google.com/hostednews/ap/article/ALeqM5hYPyYH7SCCTj2nuq4gxSAfdwtUnQ?docId=bb5686042d4e40d9a1d07cfffab3d0a7

They had to use the word anarchist. Sigh.



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