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



    Sep 20, 2012 - 10:54am



    Sep 20, 2012 - 10:55am

    Nice consolidation.

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

    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......

    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 ...

    Sep 20, 2012 - 10:57am

    And The Beat Goes On

    Same old control of the metals.....

    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.

    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.

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