Back At It

Thu, Sep 20, 2012 - 10:46am

After a day out of "the office", I'm back at my post and just in time to see another blatant attempt to cap and drive price lower.

You know, The Bullion Bank Cartel never ceases to amaze me. Trapped short against QE~, they resort to they only trick they have in their bag...naked shorting. That the foolhardiness of this "strategy" seems entirely lost upon them is what baffles me. They have to see:

  • Open-ended quantitative easing is now the official policy of nearly every, major central bank in the world.
  • Demand for physical metal in size continues unabated, regardless of fluctuation in paper price.
  • Rehypothecated and unallocated gold has created untenable leveraged positions.
  • Gold they borrowed and sold in the market at much lower prices is in need of repayment.
  • Eventual imposition of a gold-backed international trade settlement system will reset price multiples higher.
  • Any logical person would look at the set of circumstances set out above and conclude that a "short the metals" strategy is not going to be a long-term winner. However, The Cartels seemingly continue with their business, as usual, bravely whistling past the graveyard, oblivious to their impending demise.

    As The Turd's Old Man would ask: "Do you know what 'motel' spelled backward is? Let om."

    By continuing to manipulate price lower, they are only increasing the magnitude of the eventual seismic event. Simple economics dictates that by suppressing and capping price over a period of time, the price reset that inevitably occurs when price is finally freed to find its own equilibrium is often dramatic. Look up the history of rent control in NYC or Nixon and Ford's wage-and-price controls of the 1970s.

    So, whatever. I could go on and on but what would be the point? You and I know what is truly going on and we know for certain that prices for precious metal are headed much, much higher from here. Why even bother to pay attention to $10 price drops that occur just as London is setting its afternoon fix? I don't know. Something to do I guess.

    Look at these charts, though. On this silver chart, particularly, you can see the aggressive capping technique of The Cartels. Why cap at these levels you ask? We must imagine that there are significant buy-stops positioned just above $1780 gold and $35 silver, where a decisive move through $35 and then $35.50 will send silver quickly soaring toward $37-37.50. Again, this is a battle that they cannot win. Tomorrow, Monday, next week...whenever. Price will break those levels and reset higher again. It's simply a matter of time.

    Also underpinning these markets from a technical perspective is this bullish development:

    And we must talk about crude today. Recall that I was expecting a move toward $101 before the next pullback toward $98. Well, we got to $100.50 or so but, suddenly, we've gotten this remarkable, 10% pullback. This is all very, very strange.

    It began back on Monday with this: which was followed up with this Then, yesterday, crude fell another $4 which got the attention of everyone, including our friends at ZH:

    So QE~ is announced in the face of the almost-eventual Israel v Iran war and crude falls $10??? This stinks to high heaven and is almost certainly a blatant U.S. government attempt to lower gasoline prices 50 days before the election. There can be no other serious explanation. Again, though, just as The Metals Cartel is offering you an amazing opportunity to accumulate more metal at "affordable" prices, this drop in crude is also presenting itself to you as a gift.

    Now, of course, maybe I'm wrong. Maybe peace, love and harmony will break out and usher in a new era of Middle Eastern Utopia. If you think this or if you're of the belief that dollar-denominated assets are going to plummet in price while the Fed conducts QE~, then perhaps you won't be buying crude, crude calls or the UCO here. If, instead, you don't believe that peaceful bliss is right around the corner...(

    That's all for now as I have a lot of catching up to do. It's funny how one day away can lead to literally piles of stuff you need to get caught up on. As usual, more later though if conditions warrant.


    About the Author

    turd [at] tfmetalsreport [dot] com ()


    The Green Manalishi · Sep 20, 2012 - 10:49am
    Lapp Nils · Sep 20, 2012 - 10:50am



    Bollocks · Sep 20, 2012 - 10:54am



    agNau · Sep 20, 2012 - 10:55am

    Nice consolidation.

    Think we resume soon. Logical spot to cap, as logical to take profits.

    indosil · Sep 20, 2012 - 10:56am

    Indian MCX Aspect


    Why not consider the Indian MCX manipulation angle to price rigging? I ain't an expert but I have been smelling a rat for the last 1 1/2 years.The Website claims to be the No 1 trading exchange in both Gold & Silver.No 2 in Natural Gas & No 3 in Crude Oil in terms of volume......

    MrGuboci · Sep 20, 2012 - 10:57am

    all day long chart painting

    Anyone noticed how they pushed the PM prices down 5 minutes before the $ dived below 79.6 ? Silver went from 34.55 to 34.15 for nanoseconds and then the dollar started falling BUT PM were kept capped .... I feel bad playing those manipulated markets , its just insane esp today with those swings ...

    Nana · Sep 20, 2012 - 10:57am

    And The Beat Goes On

    Same old control of the metals.....

    50Jim · Sep 20, 2012 - 10:58am

    question for Turd

    What if the Cartel is being told by the Fed. "You will never have to pay up..............keep naked shorting and you will not be responsible for the outcome. We will give you fiat or excuse you the debt.

    Cleburne61 · Sep 20, 2012 - 10:59am


    Do you have any comment on how silver and gold have held up in spite of the crude capping? Do you think this portends any decoupling on the horizon?

    Beastly Stack · Sep 20, 2012 - 11:05am

    Nice Turd

    Nice to have you back at the helm!

    Today is option expiration for Oct Crude,I believe alot of folks just got taken to the woodshed!

    Turd is right,we have been given a gift in oil-my strong opinion as well!

    I will wait to buy until the fishy close today.

    I'm back on corn now,no options though!

    Great Day to all.

    Short Stack · Sep 20, 2012 - 11:14am

    Ha !

    One week. One lousy week and then bam ! Right in the kisser. Thing is they couldn't do much in damage to silver price though.

    I take that as a good sign.

    Morning Mr. T. Glad to have you back indeed. Yes Sir !

    ancientmoney · Sep 20, 2012 - 11:16am

    John Embry of Sprott Asset Mgmt. has his latest . .

    "There’s an old adage that ‘gold goes where the wealth is being created.’ And the wealth is not being created in the West anymore. We’re consuming ourselves into bankruptcy. 

    The money and the wealth are being created in the East, and that’s where the gold is going. This is very historic what’s happening here. The West is losing more and more of their gold reserves to the East. We are about to publish a piece here at Sprott titled, ‘Do Western Central Banks have any gold left?’ I wonder how little they have left?

    People believe there are 30,000 or so tons of gold in the Western central bank vaults. I don’t think there is even a fraction of that left.”

    Embry also warned: “The world’s largest bond fund manager, Bill Gross, he’s finally come out and said, ‘Look, you’ve got to buy gold and real things.’ He said, ‘This thing is going down the path of the destruction of money.’ 

    If Bill Gross says something like that, people should pay attention. But I don’t think many people are listening. Before this is over, this end game concludes, this is going to be the greatest wealth transfer in the history of mankind.”

    JPM et al will simply naked short PMs until there is a default, and then the rules will change so that shorts can appease longs via cash settlement. 

     JPM will be saying to those longs: "You thought you owned gold/silver, but you only owned paper saying you owned gold/silver. So Sorry--no gold/silver for you!" And, it will be made perfectly legal for them to do so. That's when paper gold/silver approach ZERO.

    · Sep 20, 2012 - 11:16am

    Why do we come here every day?

    Everyday I rise before dawn with the same routine, cat, coffee, charts, and settle in to read Turd & company until its worktime. Several times per day, I break to catch up on reading here. When I don’t feel like working, I usually think of something to post. Being a professor has some perks.

    After first taking the red pill and having Morpheus show me around, I panicked, ramped up the stacking with borrowed money, purchased rice & beans, means of protection, a used generator, and found a 500 gallon aluminum gas tank.

    Time passed. No change. Metals were murdered and my capsized boat didn’t hurt as much, though I flagged the location. I was desperate to move back home, near my family. None of them were prepping and I figured they would need help when the black swan (Greek default) announced the collapse. Greece came and went with only one story in the WSJ and presumably a quiet haircut with under the table guarantees to repay silence. That’s when I began to think we were staring at a long downhill slide rather than a cliff.

    Americans are faced with an election choice. The good guy has been violently elbowed out of the race with dirty tricks. I see no hope for change from American politics, at the presidential or congressional level. The rest of the world is beholden to the FED for off balance sheet bailouts. Any chance for a softer landing evaporates daily. And I keep prepping. By the favor of God, against all odds, I have landed a job back home and will move there at the end of the school year. Our family (both sides) will have a door to come knock on someday. We will have trusted people to watch our backs if things ever get nasty.

    So I come here each day, not expecting to read about how we finally fell off the cliff, but to be informed and encouraged to “hold the course,” that we have chosen to do the right thing in prepping. I enjoy the cartoons, I read the latest conspiracy theories her that reaffirms our decision. I enjoy the debates, as long as they stay civil. And I enjoy reading the rationales of intelligent people confirming that I the red pill was indeed the correct choice.

    Honestly, my investment advice (beyond imperatives to stack) probably deserves the scroll button. As a person, I am creative, artistic, and a perfectionist. I pour myself into whatever I study—and it is a lot of stuff. I write books, academic journal articles, reviews, movie scripts, play several musical instruments, and can repair or build about anything pertaining to constructions and cars. But most of all I love to teach. I love to collect knowledge, boil it down to the essentials and find creative ways to present it. That’s what I have to offer the community.

    We have a plethora of stubborn know-it-all folks who post here regularly. They get in arguments, regularly engage in profanities, and raise the ire of others as well as the mods. I have concluded that this personality type is perpetually argumentative, contrarian, and ... usually right! These kinds of folks make the best bosses I’ve ever had—dependable, stable, attention to details, efficient, demanding excellence. I don’t want to lose their clear-headed input and recommendations for action. All I ask is civility.

    I am not sure why all of you keep returning to this site. I hope it’s not just to argue with others for personal stimulation. You have lots to offer and I want to hear it.

    I come here each day to survive emotionally, cause I suspect that the societal collapse we are facing is still a ways off and will be more like walking into a quagmire than falling off a cliff. Just knowing that a wide variety of people are staffing the watchtower and diligently calling out important items of notice is what keeps me returning.

    I need not mention Turd’s clear explanations, predictions and sense of humor as a primary attraction.

    Air Garcia · Sep 20, 2012 - 11:19am

    drop in crude

    seems to me to be blatant manipulation to keep the spec longs out - to try to keep the herd from buying in on the long side and pushing price up. 

    obvious suppression, obviously - but im an idiot, what do i know. 

    treefrog Short Stack · Sep 20, 2012 - 11:22am

    @short stack

    "One lousy week and then bam ! Right in the kisser."

    not to worry. go to netdania. pull up a silver (or gold) chart. select one day on the time frame. we're doing just fine.

    patience is an uncommon virtue. hindsight is wonderful, but it always comes way too late.

    kindspirited · Sep 20, 2012 - 11:23am

    gold coins

    How many Canadian Maple leaf 1 oz gold coins can you take into Canada from US without worry about going into a small room with hot lights? Currency has a limit of 10,000 which triggers a report filed which sound like no big deal, but I imagine filing the report would trigger lots of questions and be put on a government "list"-

    e.g., would taking 10 coins into Canada for safe keeping (like rent a safe deposit box with a good solid Canadian bank be cause for concern, and would it be a good idea? confiscation in the US is a real threat

    thanks for any input

    Big Buffalo · Sep 20, 2012 - 11:26am

    Daily Girations

    Silver capping at $34.50 today?

    Where are my pom poms?

    Eman Laer Short Stack · Sep 20, 2012 - 11:29am

    Not sure I understand

    Submitted by Short Stack on September 20, 2012 - 11:09am.

    "One week. One lousy week and then bam ! Right in the kisser."

    Are you bemoaning the price action of silver now? cheeky

    If so, must've been a tough summer for you! Tell me that I'm mistaken.

    Gramp · Sep 20, 2012 - 11:29am
    Marblesonac · Sep 20, 2012 - 11:30am

    Why they short...

    JPM has around $70T in derivatives, let's say even 1% settles in silver. That's $700B in silver they would have to come up with.

    They are short about 250 million ounces. At $35 oz, that is just under $9B.

    Turd, what would you do, defend $700B or pay up for $9B ?

    They won't let it get above $36 for 60 days until they are ready to implode the derivatives market, and by extension, most all of the financial markets.

    ancientmoney Doctor J · Sep 20, 2012 - 11:31am

    @Dr. J

    My thoughts are similar to yours, but my talents don't come close! Excellent essay.

    punchbowl · Sep 20, 2012 - 11:33am


    What are the face values of those coins?

    What if you have a hip sack with a bunch of international coins in it including 15 CGM?

    What if these goons working at border crossings and airports aren't very bright?

    random thoughts on current scenarios.

    and I would way rather go on a camping expedition with a shovel and a gps then venture into a CIBC for a safety deposit box -- but that is just me.

    Short Stack treefrog · Sep 20, 2012 - 11:35am


    Yeah, yeah I know. Just that I get mildly teed when the spot goes down right after I start seeing some wind in the sails.

    I got NetDania down pat. I know what I'm doing. I just hate what THEY are doing to MY investment.

    ¤ · Sep 20, 2012 - 11:36am

    Dr J

     Nicely doneyes

    Video unavailable
    snoochieboochies · Sep 20, 2012 - 11:39am

    Kitco's acting strange

    Kitco's acting strange today. Silver price has gone to the moon!

    Short Stack Eman Laer · Sep 20, 2012 - 11:39am

    @emaN laeR

    You are mistaken.

    I was simply decrying the drop in gold spot.

    Air Garcia · Sep 20, 2012 - 11:40am

    @ 50jim

    I think you're on to something there with that analysis - i mean, sounds crazy, but i thought that also - i'm sure if the comex crashes and defaults it's game over for us - not them. Take Corzine for instance - bastard walks free. The same will fancy Mr. Jamie and Mrs. Blythe. And we'll be left like those that trusted corzine to take their money and grow it. And the bastard at PFG who left a suicide note saying how he did it all - and failed at his suicide then recanted and called out innocent. Thankfully I didn't have much money in there at that time - just a few hundred bucks sitting in a dormant account. I was a lucky one. 

    i just hope my greed can see the end and get out to take profits instead of pushing for a few more dollars when the beast does collapse.

    Every oz of physical silver we can pull out of the system is helping our cause. It's like David vs. Goliath - Read it at I Samuel 17. Good stuff. 

    Missiondweller · Sep 20, 2012 - 11:42am


    I'd love to hear the answer to that too. If anyone has any idea or expertise to share I's love to know.

    Can a Yank open a safe deposit box in Canada?

    Eman Laer Short Stack · Sep 20, 2012 - 11:44am


    @emaN laeR

    Submitted by Short Stack on September 20, 2012 - 11:39am.

    "You are mistaken.

    I was simply decrying the drop in gold spot."


    Gold, silver; pick your favorite color I'm still amazed. 

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