Weekend Review

481
Sat, Sep 22, 2012 - 12:16pm

What an interesting week. Instead of volatility, we got containment and flatlines. Something tells me next week won't be the same.

Ponder this for a moment, QE∞ is announced as official Fed policy last Thursday. That day gold, the only alternative currency to steadily-debasing fiat, responds with a $38 move. Frankly, I would have expected more but, given the Cartel propensity for containing daily moves at either the +1% or +2% levels, $38 seemed about right. However, over the next five days, would you have expected this?

  • Friday, 9/14: net change +$0.60
  • Monday, 9/17: -$2.10
  • Tuesday, 9/18: +$0.60
  • Wednesday 9/19: +$0.50
  • Thursday 9/20: -$1.50

So, cumulatively over the next five days trading in gold, immediately following the long-awaited announcement of QE∞, the total change was down $1.90. Huh?? And, again, it's not like we saw the +$20, -$22, +$31 kind of volatility you would have expected. Very strange and, once again, subtle evidence of the outright blatant and ongoing manipulation and "managed ascent" of the paper price by The Gold Bullion Banking Cartel.

To no one's surprise, this week's CoT continued the trend of Cartel naked short issuance to contain price. Again, I'm not really sure who wrote the mandate that JPM, DB et al have to act as market makers in the metals but, for some reason, that is the role they allege to play. Spec money comes into the pit and the banks issue the highly-leveraged paper. Not content to see price bid up as the spec bids search for willing sellers of existing contracts, The Cartel, instead, simply issues brand new contracts to satisfy demand.

In doing so, The Gold Cartel added another 18,196 short contracts this week and brought their net short ratio back up to an astonishingly dangerous (to them) 2.68:1. Why is this so dangerous, you ask? Because they are continuing to play this game as if none of the fundamentals have changed. This is no longer 2002 or 2008. It's not even 2011. We are near The End Game for fiat currency and the "creditor nations" around the globe recognize this. The are readily exchanging their rapidly-devaluing fiat for hard assets, gold in particular. This insatiable physical demand underpins the paper market and makes precipitous, short-covering drops, like we've seen The Cartel execute in the past, all but impossible. Oh sure, there will still be selloffs and beatdowns...Heck, we saw one yesterday...but incessant physical demand forces The Cartel to quickly turn tail and buy in order to cover and secure the metal required to meet the allocations sought at every London fix.

So, again, look to buy the dips. Not every $5 dip, mind you, but any substantial dip the pushes price back to obvious support points. Right now, the obvious area is around $1755-1760. IF a dip develops early next week, I'll be all over it. Gold looks certain to soon blast through $1780 and then $1800. From there, I expect a rapid move toward the old all-time highs of $1920. At that point, gold could, once again, get disorderly to the upside, similar to what we saw in August of 2011. It will likely break out and UP through the long-term channel again and head toward and through $2000.

And here is a long-term chart of gold priced in euros. Recall that we've been discussing for weeks how euro/gold was getting well ahead of dollar/gold and that dollar gold would eventually catch up. A month ago, euro/gold was showing that $1800 gold was coming. Now, euro gold makes it look like $1920 gold is only about a month away. (Chart courtesy Trader Dan: https://www.traderdannorcini.blogspot.com/2012/09/euro-gold-on-track-for-all-time-high.html)

And JPM and their pals continue to play games with silver, blissfully unaware that their dynasty has ended. Just last week, they added another 2,880 short contracts in a vain attempt to pin price below $35 and protect the vulnerable buy-stops near $35.50 that, if tripped, would send silver quickly toward $37.50. Oh well, screw 'em. So they "won" this week. Whatever. They're just going to lose eventually so what's another week of waiting. Now at a total gross short position of 82,358 contracts and a net short ratio of 2.58:1, The Silver Cartel is sitting on a powderkeg of their making. Boy is it ever going to be fun to watch it explode right under them.

As The Doc pointed out yesterday, The Forces of Darkness expended a lot of ammunition yesterday in a desperate attempt to start a cascade and keep price under $35. ( https://www.silverdoctors.com/cartel-dumped-2x-annual-us-silver-production-on-market-in-15-min-to-smash-silver-under-35/) They now find themselves in a bit of a jam as we head into Tuesday. They'll need to cover quite a few contracts before the 1:25 EDT close that day or they risk showing their footprints on next week's CoT. What will they do? Cover, of course! Now the question is, will they gamble by raiding first and hoping for a steep enough selloff that they can cover the raid "material" and more on the way back up? Maybe but I doubt it. Physical demand will easily blunt the dip again just as it did yesterday. Their only logical choice, after being thwarted yesterday, is to begin to cover yesterday's new shorts as early as Monday, otherwise they risk a significantly "Happy Tuesday" that blows out those $35.50-area buy stops and send price toward $37+. What to do, what to do. A whole lot of choices, all of them bad. HAHAHAHAHA! You did this to yourselves, you arrogant bastards, and now you're stuck. You'll get no sympathy around here.

And in case the action in crude this week left you feeling that global peace and harmony were right around the corner, I give you this to ponder: https://www.zerohedge.com/news/2012-09-22/head-irans-revolutionary-guards-war-israel-will-occur

In that same vein, I was contacted this week by a nice guy who asked me to link a few of his prepping articles. I certainly hope you are using this time to full consider these topics: https://destinysurvival.com/2012/09/03/food-storage-how-to-calculate-for-your-needs/ & https://www.emergencyfoodstorage101.com/2012/08/07/being-prepared-for-power-outages/. Of course (shameless plug coming), you can find many of these items by visiting the Turdmart, a link to which is conveniently placed at the top of each page but copied below for your convenience.

https://www.tfmetalsreport.com/preparation-store

I hope that everyone has a safe, fun and relaxing weekend. Come back on Monday and be prepared for a week that is considerably more volatile and interesting than this past one was.

TF

11:00 pm (23:00) EDT Sunday UPDATE:

So, what the hell happened at 20:58? Anyone have a guess? I do but, first, let's look at the charts:

At exactly the same time, the POSX began an uptrend that carried it 20 ticks higher over the next hour.

So, what we likely have here is another HFT algo (WOPR) run amok. True Cartel hit jobs rarely impact so many markets across the board. On a light volume Sunday night, a brainless computer "saw" the uptick in The Pig and began program selling.

Regardless of instigator or intention, it is going to be very difficult to break down paper price much further. Difficult but not impossible. That said, I will be very surprised to see the metals considerably lower in the morning as there is no reason to expect a buyers strike in London on Monday. As mentioned Friday, gold should have considerable support near $1750. Silver will continue to find bids, just as it did two hours ago, near $33.50.

Hang in there and try not to panic. If protracted selling does come in, consider it a blessing. Please consider any and all bouts of price weakness as opportunities to add to your stack.

TF

About the Author

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  481 Comments

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thurd aye
Sep 24, 2012 - 10:30am

Turd?

Naylor link points back to this page and on and on.

Antrobus
Sep 24, 2012 - 10:30am

Detecting fake bars - easy low tech test

On detecting fake silver and gold, one simple test we use (no fancy equipment or good hearing required) is simply to drag a strong magnet across the suspect bar or coin. Get a four stack of those small circular neodymium magnets from Lee Valley. If the bar is 999 gold, or silver of 80% or better, the magnet will very clearly "drag" on the metal. Best way is to angle the bar at say 30 degrees, and let the magnet slide down. If it's good metal the magnet appears to "ooze" as it slides down. This is based on the electrical conductivity of the bar - small eddy currents are set up in the bar which retard the magnet. If you do this a few times you can get a feel for it. Caveat is that copper has a similar drag - but if there's no drag, or a weak one - it's not pure gold or 75% or better silver or copper. The thicker the metal the stronger the effect - you get a feel for it pretty quick.


Of course if the magnet clamps to, or is attracted to the metal, the metal is ferro magnetic (and contains iron or nickle or cobalt or gadolinium) and is very clearly not gold or silver.

The man who stole a leopard
Sep 24, 2012 - 10:25am
StrongsidejediTF
Sep 24, 2012 - 10:25am

MENA - Iran comments on preemptive strike

https://worldnews.nbcnews.com/_news/2012/09/24/14059635-report-iran-mull...

NBC is fanning the winds of war with an article that claims to have translated comments of an Iranian general. The comments include that the Iranian military reserves the right to "preemptively strike" other targets including Israel and US bases in the region in the event that the Iranian government becomes convinced that an Israeli strike is coming.

Note that this comes just after undiplomatic comments from Netanyahu in Israel.

It is interesting to see the wheels coming off the diplomatic hinges in many regions. Each major continent has various things occurring between nations. The biggest one for the US has to be the rift between Japan and China regarding the Senkaku Islands between Taiwan and Okinawa. China is challenging the Japanese government's claim by sending Chinese Naval ships to that area. There have already been physical altercations in that area between Japanese coast guard and Chinese naval assets. That corridor is also a chief route for China to exist the ports at Shanghai and cruise through the waters in those areas for US territory (shipping interest but also naval military interest as well).

One wonders if the absence of US 7th Fleet assets from the region (one month ago said to be deployed in MENA/Iran/Persian gulf area) has been noted by the unstable Chinese government.

Sep 24, 2012 - 9:43am

Just getting started on

Just getting started on typing a new post.

In the meantime, watch the action post-PM fix very closely. It's likely that last night's action has sown some doubt in the minds of weak-handed longs. IF The Cartels are going to try to jam things down, they'll likely start sometime after 10:00 EDT.

We'll see...

UnicycleJuggler
Sep 24, 2012 - 9:40am

@UraniumSprings: Very cheap way of identifying fake coins

Coins may be too thin for the cheap ultrasonic thickness gauge. Here's an alternative I've tried. You know how experienced buyers will flip a silver coin in the air and listen to the ring? The ringing frequency is affected by the same physical characteristics that the ultrasonic testers use. But if we are not experienced, how can we tell for sure? For $4.95 I bought a very professionally done app for my Android smartphone. It's called Speedy Spectrum Analyzer. It displays a continuous Fast Fourier Transform (FFT) of the sound coming in the microphone. It captures peaks and labels them with the exact numeric frequencies. Flicking the coin in the air with your thumb makes a very pure sound, but it goes past the phone very fast. OK, I guess. Suspending the coin in a baggie and hitting it with a piece of wood is so-so. The sound is pretty muffled. The easiest and best technique I've tried is to spin the coin on a hard surface. When it rattles to a stop, it makes a long, loud, clear sound. Simply dropping it on a hard surface is almost as good. I don't know any way to find out the correct frequencies other than to compare them with a known good coin of the same kind. Forget it if the coin is packaged tightly in plastic, because the high frequency peaks (around 7,000 to 10,000) are muted and smothered in noise. No doubt coins that have any significant wear will have their frequencies shifted. I haven't tried it. What if you don't have a smartphone? I Google'd "microsoft windows fft analyzer freeware" and got 147,000 hits. There must be something out there that uses the microphone input on the computer.

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

onealphaWhyMeLord
Sep 24, 2012 - 9:29am

@whyMeLord - Coffee

Nice to see another roaster here. I own a iRoast which i started with some years ago. I now have a Behmor which i like a lot but i still use the iRoast. I also use Sweetmarias.com. I have tried many different coffees over the years. I enjoy the sumatra and always have plenty on hand but my favorite daily roast is Ethiopian. I like to try a lot of stuff and usually keep some Kona on hand also. This years selection of Ethiopians has a couple that roast to Fc+ and have fantastic flavor with low acidity and nice chocolatey flavors.

opticsguy
Sep 24, 2012 - 9:23am

Petraeus is no Eisenhower

what I want to know are Pretraeus's ties to Monsanto.

withoutwax
Sep 24, 2012 - 9:20am

@Puck

I have an old 'post-it' on my office wall, predicting that the next US President will be Gen. Patraeus. Cannot now remember where I read it, but it was a prediction on one of the blogs I follow, talking years ago of martial law being introduced before the next US election, and Joe Six-Pack welcoming a military man as someone neutral...

Seems it's all going according to plan, then!

Maybe this was what I read, years ago?

https://petraeus2012.com/

silver foil hat
Sep 24, 2012 - 8:51am

So that's why metals are raided overnight...

https://news.yahoo.com/apple-supplier-halts-china-factory-violence-05571...

Apple supplier halts China factory after violence By JOE McDONALD | Associated Press – 1 hr 10 mins ago

BEIJING (AP) — The company that makes Apple's iPhones suspended production at a factory in China on Monday after a brawl by as many as 2,000 employees at a dormitory injured 40 people.....

AAPL will drop today and can't have the metals considered a safe haven with the market dropping.

Also I guess they won't need a day's worth of (physical) silver in the manufacturing..... so TPTB can sell 100 days of paper supply....

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Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 4/20

4/20 8:30 ET Chicago Fed
4/21 10:00 ET Existing home sales
4/23 8:30 ET Weekly jobless claims
4/23 9:45 ET Markit flash PMIs
4/24 8:30 ET Durable Goods

Key Economic Events Week of 4/6

4/8 2:00 ET March FOMC minutes
4/9 8:30 ET Producer Price Index
4/10 8:30 ET Consumer Price Index

Key Economic Events Week of 3/30

3/31 9:45 ET Chicago PMI
4/1 8:15 ET ADP Employment
4/1 9:45 ET Markit manu PMI
4/1 10:00 ET ISM manu PMI
4/2 10:00 ET Factory Orders
4/3 8:30 ET BLSBS
4/3 9:45 ET Market service PMI
4/3 10:00 ET ISM service PMI

Key Economic Events Week of 3/23

3/24 9:45 ET Markit flash PMIs
3/25 8:30 ET Durable Goods
3/26 8:30 ET Weekly jobless claims
3/27 8:30 ET Personal Inc and Spending

Key Economic Events Week of 3/9

(as if these actually matter)
3/11 8:30 ET CPI
3/12 8:30 ET weekly jobless claims
3/12 8:30 ET PPI
3/13 8:30 ET Import Price Index

Key Economic Events Week of 3/2

3/2 9:45 ET Markit Manu PMI
3/2 10:00 ET ISM Manu PMI
3/2 10:00 ET Construction Spending
3/4 8:15 ET ADP employment
3/4 9:45 ET Markit Service PMI
3/4 10:00 ET ISM Services PMI
3/5 8:30 ET Productivity & Unit Labor Costs
3/5 10:00 ET Factory Orders
3/6 8:30 ET BLSBS
3/6 10:00 ET Wholesale Inventories

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