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

Sep 23, 2012 - 7:28am

Before anyone calls me a hypocrite

After my little tirade about military aviators a while back, almost as soon as I said it, I realized I was making a broad generalization, but my pride kept me from owning up to it. It comes from being human. As I said to someone in a PM about it, I realized it also detracted from the main point of my post which was the US can no longer afford the luxury of debt funded multimillion dollar fighters and a military budget larger than the rest of the world combined.

I wonder how many people missed or ignored all that cause I called pilots a-holes.

Live and learn.

thecoloredsky
Sep 23, 2012 - 7:29am
Sep 23, 2012 - 7:35am

re Form follows function

If form follows function, then what is the function of the swear words? They must have some - you cannot just claim they are irrelevant to the sentence, given that they give it its form.

The question of form following function is basically an argument over ornamentation - which can nearly always be justified by its function - so what is the function of the ornamentation in one's language?. Worth contemplating.

benque
Sep 23, 2012 - 7:40am

From GATA - "Yikes" isn't a strong enough word!

Yikes! Deutsche Bank recommends gold -- even a gold standard

Submitted by cpowell on 12:14PM ET Saturday, September 22, 2012. Section: Daily Dispatches

3:18p ET Saturday, September 22, 2012

Dear Friend of GATA and Gold:

In its editorial today the New York Sun expresses amazement at the gold-friendly report published this week by Deutsche Bank, one of the world's major banks. As the Sun notes, that report, written by Deustche Bank analysts Daniel Brebner and Xiao Fu, doesn't just recommend gold as a currency and investment, a form of "good money" far superior to the "bad money" issued by governments -- it also muses sympathetically about restoration of a gold standard for money.

The Sun's editorial, "Germany Eyes Gold Standard," is posted at the newspaper's Internet site here:

https://www.nysun.com/editorials/germany-eyes-gold-standard/87997/

The Deutsche Bank report itself quickly dismisses with contempt the "spurious" objection that "there isn't enough gold" to back currencies with. "The volume of gold is not important," the report says. "Instead it is the value that is ascribed to this gold that is important. A zero can easily be added to a paper bill to change its value; similarly it can be added to the value of an ounce of gold. Absolute values are in fact unimportant. ... Gold is infinitely divisible. Does it matter that a paper bill is backed by a gram or a kilogram of gold? Theoretically it shouldn't matter, in our view."

As do so many of gold's friends, Brebner and Fu expect Western debt repudiation through inflation. "When one has accumulated too much debt," they write, "while the right thing to do is pay it back, the easiest thing to do is default and hope your creditor has a short memory. We believe the Western economies in general are biased toward the latter, whether they will admit it or not. We expect a soft default will likely be the preferable course of action -- a managed form of currency depreciation through various stages of 'quantitative easing' or successive bailouts by central banks of the banking system."

While it doesn't mention the logical consequence of a surreptitious devaluation policy -- manipulation of the gold market to help disguise the policy -- the Deutsche Bank report on gold may be more intelligent and candid than anything yet produced about gold by any major bank. So you might want to read it before Brebner and Fu are fired or demoted to the bank's mail room and the bank demands return of all copies or, signifying the prescience of the authors, Deutsche Bank itself crumbles under bad debts repaid in bad money and is acquired by the Musical Heritage Surplus Club of Hong Kong, a subsidiary of the People's Bank of China. For the time being the report is posted at GATA's Internet site here:

https://www.gata.org/files/DeutscheBankReport-09-18-2012.pdf

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

benque
Sep 23, 2012 - 8:08am

Invest in tin

My sheep friend has been listening to the banks again. He sold all his SLW just before QE3, after first asking my advice.......which was HOLD!!!

After an expletive filled, and beer lubricated discussion of sound money this past Friday, I finally advised him to invest in tin. Surely the vast number of tin-foil hat sporting "sound money" crazies must be putting significant pressure upon worldwide tin stockpiles.

He tells me he "gets it", just to shut me up........baaaaaaaa...yes sir, yes sir, three bags full.

Admiral Ag Bar
Sep 23, 2012 - 8:18am

on fruit tree pollination...

You will also need to consider the bloom timing of your companion fruit tree pollinator. If one pear blooms a month before the other, you will not achieve cross pollination.

I really like Asian Pears. I am growing three different types which all pollinate each other. The info below is from raintree nursery: https://www.raintreenursery.com/Pollination_Asian_Pears.html

Asian pear pollination chart

Bloom order indicated in the chart below is based on data taken over several years at W.S.U. Mt. Vernon Research Station. If you don't know the bloom time of a variety, it is safest to select a mid-season pollinizer.

How to use our pollination chart

  1. Potential pollen parents are listed at the top and fruit bearers are listed to the left
  2. Select the variety that you want to bear fruit from the left side
  3. If the intersecting square is green, it will pollinize
  4. If the intersecting square is red, it will not pollinize
  5. If the intersecting square is orange, it will be partially self-fertile

Asian pear ripening order

  1. Shinsui
  2. Hamese
  3. Ichiban
  4. Shinseiki
  5. Kikisui
  6. Kosui
  7. Chojuro
  8. Yongi
  9. Yoinashi
  10. Mishirasu
  11. Atago
  12. Seuri
  13. Korean Giant
  14. Tsu Li
Sep 23, 2012 - 8:41am

To cuss or not to cuss

I’ll chime in on the issue of swearing as it relates to rhetorical impact.

<professor>

One idea to consider is what is called by psychologists the “emotional contagion.” As one person feels an emotion, then speaks from that emotion, encoding emotion into the sound waves of their voice in ways too complex for me to understand, the person hearing that voice recognizes that emotion and actually begins to feel it themselves. Profanities often convey anger and through generations of refinement, English speakers have found that certain words more effectively convey that emotion, words like #$%^, &*$! and of course, &%$@--one-syllable words that you don’t need teeth to pronounce properly.

The ancient Greeks understood this principle perfectly. A speaker could charm the hearers by the sound of the voice, among other things.

Form and function? We teach in rhetoric that we are persuaded logically by the reasonable arguments, but that logic is a lousy motivator. Humans are motivated by emotion! Thus, adding the emotional factor to a logical argument is what it takes to get people off their @$$ and do something about it. Whe we act upon emotion without a rationale, we suffer from buyer’s remorse.

So the popular phrase “BTFD” succinctly employs a rationale—buy something when it is on sale and save money, combined with a motivator term to goad a person to action.

But frankly, unless the words are spoken out loud, I teach that the motivator terms lose their effect –it's not like when a person says them with feeling.

ALL CAPS just isn’t the same.

<professor/>

This leads us to those George Carlin videos... The guy is smart, argues well, betrays your agreement with your laughter, and rubs in his point with F-bombs.

boatman
Sep 23, 2012 - 8:45am

yes, ivars

that WAS astunning and appreciated reply.

you are a gentlemen and a scholar sir.

Sep 23, 2012 - 8:55am

Admiral

That is a wonderful chart on Pear trees. I am planning to plant a small orchard and have much to learn to avert wasted time. A little knowledge can go a long way. More is even better. Thank you.

Best B
Sep 23, 2012 - 9:18am

A Parable~May we all be like coffee

Carrots, Eggs, and Coffee

A carrot, an egg, and a cup of coffee . . . You will never look at a
cup of coffee the same way again.

A young woman went to her mother and told her about her life and how
things were so hard for her. She did not know how she was going to make
it and wanted to give up. She was tired of fighting and struggling. It
seemed as one problem was solved, a new one arose.

Her mother took her to the kitchen. She filled three pots with water
and placed each on a high fire. Soon the pots came to boil. In the
first she placed carrots, in the second she placed eggs, and in the
last she placed ground coffee beans. She let them sit and boil; without
saying a word.

In about twenty minutes she turned off the burners. She fished the
carrots out and placed them in a bowl. She pulled the eggs out and
placed them in a bowl.

Then she ladled the coffee out and placed it in a bowl. Turning to her
daughter, she asked, “Tell me what you see.”

“Carrots, eggs, and coffee,” she replied.

Her mother brought her closer and asked her to feel the carrots. She
did and noted that they were soft. The mother then asked the daughter
to take an egg and break it. After pulling off the shell, she observed
the hard-boiled egg.

Finally, the mother asked the daughter to sip the coffee. The daughter
smiled, as she tasted its rich aroma the daughter then asked, “What
does it mean, mother?”

Her mother explained that each of these objects had faced the same
adversity: boiling water. Each reacted differently. The carrot went in
strong, hard, and unrelenting. However, after being subjected to the
boiling water, it softened and became weak. The egg had been fragile.
Its thin outer shell had protected its liquid interior, but after
sitting through the boiling water, its insides became hardened. The
ground coffee beans were unique, however. After they were in the
boiling water, they had changed the water.

“Which are you?” she asked her daughter. “When adversity knocks on your
door, how do you respond? Are you a carrot, an egg or a coffee bean?

Think of this: Which am I?

Am I the carrot that seems strong, but with pain and adversity do I
wilt and become soft and lose my strength?

Am I the egg that starts with a malleable heart, but changes with the
heat? Did I have a fluid spirit, but after a death, a breakup, a
financial hardship or some other trial, have I become hardened and
stiff? Does my shell look the same, but on the inside am I bitter and
tough with a stiff spirit and hardened heart?

Or am I like the coffee bean? The bean actually changes the hot water,
the very circumstance that brings the pain. When the water gets hot, it
releases the fragrance and flavor. If you are like the bean, when
things are at their worst, you get better and change the situation
around you. When the hour is the darkest and trials are their greatest,
do you elevate yourself to another level? How do you handle adversity?
Are you a carrot, an egg or a coffee bean?

May you have enough happiness to make you sweet, enough trials to make
you strong, enough sorrow to keep you human and enough hope to make you
happy.

The happiest of people don’t necessarily have the best of everything;
they just make the best of everything that comes along their way. The
brightest future will always be based on a forgotten past; you can’t go
forward in life until you let go of your past failures and heartaches.

When you were born, you were crying and everyone around you was
smiling.

Live your life so at the end, you’re the one who is smiling and
everyone around you is crying.

May we all be COFFEE!!!!!! !!

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
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Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
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8/13 8:30 ET Consumer Price Index
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8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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