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

onealpha
Sep 23, 2012 - 9:29am

@Best B Coffee

I salute your parable on coffee as I enjoy a cup of french pressed Ethiopia Dry Processed Saria Abaya which i roasted yesterday. A Great life lesson.

benque
Sep 23, 2012 - 9:46am

@benque: "Yikes!" I just kind

@benque: "Yikes!"

I just kind of skimmed over the Deutsche Bank Report. This caught my eye...

...if the Fed were to announce a QE of a magnitude of USD1 trillion then the gold price would likely move to USD1,900/oz ±100/oz; assuming perceptions of inflation remained the same. If however inflationary fears escalated, a price of USD2,500/oz could be justified in our view

Keep stacking.

¤
Sep 23, 2012 - 10:04am

Morning Joe...

....here's a strong cup of one for everyone to visually digest this beautiful a.m.

Nice post and thoughts last night Ivars (and everyone else)

redwood
Sep 23, 2012 - 10:06am

foggy road

Your post on HFT is very good. Hope the guys from the corner read it as it clarifies nicely what happens on a daily basis. Thanks.

Eric Original
Sep 23, 2012 - 10:09am

Sharon Astyk talking food preservation

Here's Sharon's latest. Not so much about practical nuts and bolts of canning procedures, but more about simply acquiring the mind set of routinely saving and not wasting food.

Here's a snip:

As food prices rise and hunger rises world wide, as the population grows and food prices are increasingly tied to the rapidly rising price of oil, reducing food waste becomes absolutely critical to making sure everyone gets fed. In a recent post, I focused on parts of plants in your garden that you may not realize can be eaten and enjoyed. Again, thinking about how to maximize access to food, let’s talk about how to make the most of the food you have by using food preservation to minimize waste – that way you save money and don’t have to buy as much, moreover, you reduce marketplace competition for food and waste – like so many of the things we do, this is a win-win thing. You get yummy food, lower bills, less guilt, less slime in the fridge and less time in the stores – how often do you get so much good stuff out of something so simple?

And here's the rest:

https://scienceblogs.com/casaubonsbook/2012/09/19/the-no-waste-food-pres...

Lumpy
Sep 23, 2012 - 10:11am

I had to ask.

And JPM and their pals continue to play games with silver, blissfully unaware that their dynasty has ended.

The EE: Is, of course, The Evil Empire. The EE consists of the evil, colluding consortium of "bullion banks" that, at the behest of the Federal Reserve, actively suppress the prices of gold and silver through methods such as the seemingly endless creation of paper metal and "offer bunching". The primary, co-conspirators are HSBC and JPM.

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.

The C/C/C: The coalition of the CME Group, The Comex and The Bullion Banking Cartel.

Turd, you and others I've read over the years have convinced me of the Evil Empire and the Cartel. Your Turdisms sum it up pretty good. It seems to me like some of the reasons you've given for further upside price movement in silver don't really go with the Evil Empire definition.

I just don't see how JPM and their pals can be unaware about anything financial. To me it's like Ford buying car parts and not knowing how to put a car together. It seems impossible for JPM to be "caught" on the wrong side of a large trade. I mean if they are caught it's only because they were acting on behalf of the FED and the FED will backstop their losses......right???

Same thing with the Cartel. What's the difference between them and any other too big to fail banks? I'm just having a hard time seeing how the EE team can fragment. How can one part of the team go down without bringing it all down?

Not criticizing, just asking.

Eric Original
Sep 23, 2012 - 10:17am

Here's another excellent recent post from Sharon Astyk

Here's the snip:

End of summer is a really good time to sit down and look at your preparations and your food storage and take inventory. What have you put by? What do you still need more of? What did you use over the last year? What did you have too much of? Whither from here? September is National Emergency Preparedness month, so now is the time to think – am I ready for the next crisis (do you even have to ask whether there will be one?)

If you’ve been working on this, but you don’t feel you are ready, here are some questions to ask yourself, and some possible remedies if things aren’t where you want them to be yet.

And here's the rest:

https://scienceblogs.com/casaubonsbook/2012/09/06/time-to-take-inventory/

Eric Original
Sep 23, 2012 - 10:25am

One more for a lazy Sunday morning

Sharon talks about how to get your family on board with healthier eating.

Here's the snip:

I think I get more requests for ideas for helping people who are on-board with the idea of sustainable eating get the rest of their families on-board than on any other food storage topic. So let’s talk about that. I actually wrote this post back in 2008, before our fostering adventures, so I’ve added some suggestions since then, based on my experience of getting traumatized kids who have lived on not enough food and all processed to eat good, real food.

And here's the rest:

https://sharonastyk.com/2012/09/06/getting-the-people-in-your-home-to-ea...

Nana
Sep 23, 2012 - 10:30am

Flux Capacitor-Just 19.95 +S&H

Back to the future Infomercial - Flux Capacitor
Sep 23, 2012 - 10:31am

Interview with Rick Rule at the Daily Bell

Being a recent convert to stacking--late 2010--and a non-trader, I still don't know who is who among all the big name guys, but I know I've heard Rick Rule's name thrown around a bit. He is talking about his relationship to Eric Sprot and sharing his thoughts on junior miners. I'm sure there are folks here who might enjoy it.

https://www.thedailybell.com/4334/Anthony-Wile-Rick-Rule-on-Gold-Silver-and-Why-Junior-Mining-Stocks-Have-Languished

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