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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turd [at] tfmetalsreport [dot] com ()

  481 Comments

johnnydow
Sep 22, 2012 - 8:42pm

@tmosley

Don't shoot the messenger.

Of course you wont see this because you ignored me like TF ignores time cycles.

When time is up, prices change. W.D. Gann

1000 SLV for $10 or 2000-3000k premium.

MrSteed
Sep 22, 2012 - 8:55pm

GLD Holdings

There's no need to try and decipher Harvey Organ's report for GLD Holdings.

https://www.bloomberg.com/quote/GDTRGOLD:IND

Bookmark it.

Graphed is the metric tonnage of gold held in GLD over time. If you hold to the "GLD Puke" indicator theory for spot price movement, the chart appears to be saying "sell".

¤
Sep 22, 2012 - 9:02pm

It's a mad world after all...

Elmo busted!

A man, dressed as the Muppet character Elmo, is arrested in New York's Times Square September 18, 2012. The arrest took place after a loud verbal exchange between the man and tourists, witnesses said. The police at the scene did not give a reason for the arrest.

DayStar foggyroad
Sep 22, 2012 - 9:07pm

@FoggyRoad RE: Interest Rates

Deuteronomy 23:19 and Leviticus 25:36-37 have to do with an Israelite lending to a brother Israelite. The Law forbade them to charge interest to their brother. However, the Law permitted a Jew to charge interest to the nations.

Quote:
Deuteronomy 23:20 You may charge a foreigner interest, but not a brother Israelite, so that the LORD your God may bless you in everything you put your hand to in the land you are entering to possess.

Also, in the Bible the word "usury" simply to meant to charge interest whether great or small. In modern English it has come to mean an excessive interest rate, however "excessive" might be defined.

DayStar

johnnydow
Sep 22, 2012 - 9:10pm

Van Halen - Unchained

Van Halen - Unchained (HD)

You can check out Robottrader and Rassszzz at

https://wallstreetbear.com/board/index.php

foggyroad I Run Bartertown
Sep 22, 2012 - 9:11pm

@IRB John Prine-Memphisto

John Prine, a True American Treasure.

Enjoy.

John Prine - The Sins of Memphisto
philipat
Sep 22, 2012 - 9:16pm

@Big Buffalo

Because:

1. The Banks would rather use the free deposits to engage in potentially more profitable Casino Banking (The London Whale) etc. Subsequent to Dodd-Franks this is no longer referred to as "Proprietary Trading" but as "Protecting clients from imbalances in the Trading Book".
2. The most recent rape and pillage is not yet completed. The Banks still have all sorts of crap on (Or off) their balance sheets. Remember all those CDO's, CDO-squared etc? They are still there and, as a result of the suspension of Mark to Market accounting are valued at 100 Cents on the Dollar, whereas their true value is 40 Cents or less. The Fed will now kindly act in the best interests of its shareholders (Those same TBTF Banks) and buy the MBS from The Banks at their "Book Value" of 100 Cents on the Dollar.

The rape will then be complete as all the losses will have been "Socialized" and the next cycle can commence.

Admiral Ag Bar
Sep 22, 2012 - 9:17pm

johnnydow

I don't know whether to verbally abuse you for being such an ass or high five you for the sweet VH tune.

Very conflicted....

Edit: nice link to robottrader... he all but disappeared off of ZH.

Kcap
Sep 22, 2012 - 9:30pm

@ Jim Sinclair

Jim (Santa):

If you read this site or if someone wants to pass this along from little 'ol me, I have something to let you in on.

You are correct about a great many things. You are legendary in fact about most things and your predictions are almost spot on most of the time.

HOWEVER...

If you think this system is going to last until 2017, you have gone absolutely mad. There is no possible mathematical way. NONE. I would love to see how you arrive at that as a possibility. The beginning of 2015 is a SLIGHT possibility. But, it makes sense that THEY will bring down the system intentionally far in advance of when "natural" markets (tongue in cheek) would do so. In fact, it is possible, even close to probable this happens by next July-ish.

2017. Never happen.

2016. No way.

2015. Odds are not with you.

2014. Well, they could do it if they had to.

2013. Looks most probable due to many non-economic reasons.

Best,

Kcap

foggyroad DayStar
Sep 22, 2012 - 9:32pm

@ DayStar

Thank You.

I always thought it strange to allow charging foreigners interest, but You are absolutely right.

I stand corrected. :)

As a 'spiritual Israelite', and hopefully, a member of 'a great crowd', I believe someday interest and loans will become a thing not remembered.

Best Regards;

foggy

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