Weekend Review

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.


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.


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.


About the Author

turd [at] tfmetalsreport [dot] com ()


Warren Peace
Sep 22, 2012 - 4:47pm

JPM Force Mejure Imminent!!! (Theory)

This is a theory that struck me as I was musing about many recent stories I read..... "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" Do we really believe that JPM et al are oblivious to their position? I seriously doubt that.
So I look at the following :
1) JPM seemed to reverse all their previous short covering in an attempt to keep price under $35. 2) Chilton says CFTC public announcement expected soon. Chilton 3) Rumors of damning evidence coming out against JPM by the end of September. JPM in trouble. 4) JPM's silver derivatives are rumored to have a critical trigger at $36 according to Wynter Brenton group. 5) The cartel uses the government to change the rules when they are pinned in a corner. Hunt Brothers.

Here we are at the end of fiat, and the silver shorts appear to be painted into a corner because they can no longer supply the physical into the market.
I theorize that as early as next week this "evidence" could break about JPM and their ridiculous positions (similar to the London whale).
JPM admits a small problem, but estimates losses that are 10% of reality. JPM soon after declares force majeure as it cannot supply physical.
The CFTC releases their findings in concert and to protect the viability of markets, changes the rules to cash settlement only, and no new buy orders. When the price of Comex silver collapses far enough, all the contracts are settled in cash, and the traders against JPM's derivative positions(written to key off of Comex silver price) are completely destroyed.
In the mean time, the physical is approaching escape velocity while the paper traders funds are tied up in the cash settlement process.

Just a theory....I need some review from the community. But it seems like a very dangerous time to be in paper anything...

Sep 22, 2012 - 4:47pm

The end game and Japan

Loving the analysis. Don't even care if it's right or wrong at this point - it just keeps me on an even keel. Question - is there a link to your subscription website - was looking around but couldn't see it?

btw You know Japan is on QE9 or 10 or something. The whole fiat death by inflation thing could take longer than you think.

Big Buffalo
Sep 22, 2012 - 4:52pm

Just looking at your Gold Chart

What if you draw your first line flat from Sep 7th to Sept 13th at 1742ish? It would look exactly like the current flat line from Sept 14 to Sept 21. Yesterday's "pop" would be identical to Sept 12th's pop. A tiny bit lower, then a big move up. Could it be, we all hope so.

Either way, looks nice. Thanks for your work

Louie Urban Roman
Sep 22, 2012 - 4:57pm

$ may not go to hyperinflation?

The dollar will go to hyperinflation. There is no other alternative. Too many people in the US receive a monthly check or benefits from the government. People on the payroll, on SS, on disability, SNAP, military suppliers, and on, and on, and on. When inflation begins to kick in, more government employees will strike and demand........more money!

The $400 per month of SNAP benefits will no longer buy peeled shrimp-cocktail platters and NY strip steaks. SNAP recipients will demand.....More Money!

When SS recipients begin to fall further and further behind, they will demand.......MORE MONEY! (Please don't be mad at me Katie! Not questioning if SS recipients "deserve" it, or if they "earned it". Just commenting on the economics and human nature)

Federal govt CAN'T cut spending. At they same time, they CAN'T raise taxes enough to cover the spending.

Only options are to borrow the money, or to print the money.

Nobody wants to lend us money at 2%, and if we let the interest rate rise, that also blows the budget.

The ONLY option available to the Federal govt is to print. And print they will. They will print to cover the spending, they will print to bail out the states, they will print, and print, and print, and print. There is no alternative.

Sep 22, 2012 - 4:58pm

BIS Qtrly review / IJCB.org

Quarterly Review September 2012

Results of the Basel III monitoring exercise as of 31 December 2011

September 2012

This report presents the results of the Basel Committee's Basel III monitoring exercise. The study is based on rigorous reporting processes set up by the Committee to periodically review the implications of the Basel III standards for financial markets; the first results of the exercise based on June 2011 data had been published in April 2012. A total of 209 banks participated in the study, including 102 Group 1 banks (ie those that have Tier 1 capital in excess of €3 billion and are internationally active) and 107 Group 2 banks (ie all other banks).

While the Basel III framework sets out transitional arrangements to implement the new standards, the monitoring exercise results assume full implementation of the final Basel III package based on data as of 31 December 2011 (ie they do not take account of the transitional arrangements such as the phase in of deductions). No assumptions were made about bank profitability or behavioural responses, such as changes in bank capital or balance sheet composition. For that reason the results of the study are not comparable to industry estimates.

The study finds that based on data as of 31 December 2011 and applying the changes to the definition of capital and risk-weighted assets, the average common equity Tier 1 capital ratio (CET1) of Group 1 banks was 7.7%, as compared with the Basel III minimum requirement of 4.5%. In order for all Group 1 banks to reach the 4.5% minimum, an increase of €11.9 billion CET1 would be required. The overall shortfall increases to €374.1 billion to achieve a...



Global Banking and the Balance Sheet Channel of Monetary Transmission

by Sami Alpandaa and Uluc Aysun b


The literature typically finds that the development of financial markets has decreased the ability of central banks to affect the real economy.

This paper shows that this negative relationship does not hold between the balance sheet channel of monetary transmission and bank globalization-one aspect of financial development. The reason is that global banks are more sensitive to their borrowers’ leverage. By affecting this leverage, monetary policy has a larger impact on global banks’ lending and aggregate economic activity. We use bank-level Call Report data to find this disparity between more and less global banks.

Full article


Estimated Impact of the Federal Reserve’s Mortgage-Backed Securities Purchase Program

by Johannes Stroebel and John B. Taylor
Stanford University


The largest credit or liquidity program created by the Federal Reserve during the financial crisis was the mortgage-backed securities (MBS) purchase program. In this paper, we examine the quantitative impact of this program on mortgage interest rate spreads. This is more difficult than frequently perceived because of simultaneous changes in prepayment risk and default risk. Our empirical results attribute a sizable portion of the decline in mortgage rates to such risks and a relatively small and uncertain portion to the program. For specifications where the existence or announcement of the program appears to have lowered spreads, we find no separate effect of the stock of MBS purchased by the Federal Reserve Full article


Swineflogger treefrog
Sep 22, 2012 - 4:59pm



Sep 22, 2012 - 5:00pm
Mr. Fix
Sep 22, 2012 - 5:05pm

@ Warren Peace

I really like your theory.

At this point, any theory that involves changing the rules in the middle of the game, is the only viable outcome.

In a system that has become completely lawless,

investing any thing based on the rule of law is foolish.

It is actually hard to know how the rules are going to change,

but it is an exceptionally safe assumption that they will be changing,

and they will be changing so that they can protect the powers that be,

meaning the government, and the banks.

The only thing we can be absolutely sure of

is your last statement that being in paper right now is a really dumb idea.

Just keep stacking, you'll be fine.

Big Buffalo
Sep 22, 2012 - 5:07pm

Interest Rates

If banks are getting 3.5% for mortgages, 5-6% for cars, and they are only paying out 0.02% for savings accounts, why the hell are they not lending more and getting more money cycling? I'm sure Uncle Benny is ripping out his hair asking the same question.

We'll be paying off our second car this week. Paying 2.9% interest on the loan seems crazy while earning literally nothing for my savings.

Sep 22, 2012 - 5:22pm

@ Big Buffalo

Banks are not lending because good credit risk customers don't want to borrow right now. People who actually intend to pay loans back and think about how much they are borrowing are not buying new houses and cars right now.

When real estate was going up 1.5% per month, the bank did not care if the customer paid the bank or not, they could foreclose and sell the house at a profit. People did not get "in the bucket" on houses. If they could not make the payments, they sold the house, paid off the note, and pocketed profit.

Housing bust took away the punchbowl.

foggyroad Big Buffalo
Sep 22, 2012 - 5:33pm

Thanks, TF!

Excellent analysis, Turd!

Something is up.

Big changes in trader positions in gold and silver: Got Gold Report Submitted by cpowell on Sat, 2012-09-22 03:20. Section: Daily Dispatches

11:18p ET Friday, September 21, 2012

Dear Friend of GATA and Gold:

Gene Arensberg of the Got Gold Report writes today that there are big changes in trader positions in the gold and silver futures markets. What do they mean? He expects to elaborate shortly. In the meantime the GGR's latest dispatch is posted here:


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

Gene writes..

That is all for now, except to mention that the table above masks very large changes in the positioning of the Producer Merchant and Swap Dealer commercials, which we will look at further - later this weekend. Below is the graph of just the Swap Dealer’s number of spreading contracts, which anyone can see exploded higher, offsetting a large reduction in the number of contracts held by the Producer Merchant commercials, including bullion banks.


Swap Dealers increased their spreading contracts by a staggering 33,561 lots or 108% in one week. We believe that to be a record increase in the number of spreads put on in one COT week. At the same time the Swap Dealers increased their pure short positions by 14,565 lots. Meanwhile, the Producer/Merchant commercials, including bullion banks reduced both long and short positions by just under 30,000 lots each. Below is a graph showing just the Producer/Merchant short positioning, which fell by a very large 29,930 lots to 236,273 contracts short gold. (Their long positions fell by a similar amount.)

read more click here...


Sep 22, 2012 - 5:47pm

A thought on JPM/CFTC/OBAMA

Maybe Obama is trying to time the JPM/CFTC announcement and use it as political leverage. The CFTC comes down publicly on JPM after 4 yrs of investigation conveniently right before the election. Obama is seen as reigning in the gluttonous, greedy banks and enforcing regulation against one of the Big Boys.

Maybe, maybe not. Romney would be up shit creek if he does though.

Sep 22, 2012 - 6:12pm

@reefman Thanks for the guidance with the Wedge

Well that was a little less painful than I thought it would be. This is the 4hr chart from Netdania.

Short Stack
Sep 22, 2012 - 6:24pm

If already posted my apologies for dupe.

I sent the picture of that green monstrosity looking cucumber thing to my daughter for identification. She says it's called a Gemsbok cucumber and they only tend to grow in arid regions. Given the dry hot summer I guess it's not surprising to see one grow so big.

Told her it reminded me of those old WWII under water mines you see in movies sometimes.

But, it's GREEN Captain. (Scotty, orig. Star Trek)

foggyroad Big Buffalo
Sep 22, 2012 - 6:26pm

@ Big Buffalo re.interest rates

Think about 19 to 21% on credit card debt!

How about the, 42% Bell Canada charges on overdue balances!

In Canada, it is considered usurious interest, and therefore illegal, at get this... 60%! .....59% is of course perfectly legal.

I think I read something, somewhere..

The Bible Condemns Usury Banking:

Deuteronomy 23:19 Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury.

Leviticus 25:36-37 Take thou no usury of him, or increase; but fear thy God; that thy brother may live with thee. Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase.


When the Babylonian civilization collapsed, three percent of the people owned all the wealth. When old Persia went down to destruction two percent of the people owned all the wealth. When ancient Greece went down to ruin one-half of one percent of the people owned all the wealth. When the Roman empire fell by the wayside, two thousand people owned the wealth of the civilized world...It is said at this time less than two percent (2%) of the people control ninety percent of the wealth of America. — Lincoln Money Martyred


Aristotle on Usury in 350 B.C. wrote:

The most hated sort of money-making, and with the greatest reason, is usury, which makes a gain out of money itself and not from the natural use of it-for money was intended merely for exchange, not for increase at interest. And this term interest, which implies the birth of money from money, is applied to the breeding of money, because the offspring resembles the parent. Wherefore of all modes of money-making, this is the most unnatural. — The Church and Usury, by Rev. P. Cleary

Credit for Quotes to.. https://www.sovereignfellowship.com/tos/16.3/
tobydaniel foggyroad
Sep 22, 2012 - 6:32pm


Thanks for that history lesson. I love history especially Scripture history. Its interesting how the Church decided that usury was good once they saw how much money could be made where prior to that, they were against it completely. What do you think about taking out loans? Scriptures talk against it from what I have read. However, I see those who lead congregations that rationalize their way to thinking that its fine to take out a loan. I know this is not about silver but its the weekend:)

BTW, fascinating about the percentage of people that owned the worlds wealth during different empires. One thing I guess you can pick up is the percentage of people owning all the wealth changes with each empire.

I Run Bartertown
Sep 22, 2012 - 6:47pm

John Butler


"Isn’t the price close to a record high? Well, looked at correctly, no it is not.

That said, I wouldn’t claim that gold is ‘cheap’ when compared to other real assets. It is the dollar, other fiat currencies, most bond markets and some stock and regional housing markets that are expensive. But does gold look a bit pricey relative to, say, silver? Perhaps. To platinum? Yes. To other metals? Maybe. What about non-metallic commodities such as energy? Or grains, or other agricultural products? A strong possibility.

... A wonderfully handy website for doing just this has been developed by Mr Charles Vollum, at www.pricedingold.com."



Sep 22, 2012 - 6:47pm

Hagarth, Glad it worked out


Glad it worked out for you. I did not notice that RSI wedge. Thanks for drawing it in! :)

Mr. Fix
Sep 22, 2012 - 6:48pm

My two cents worth:

For the past few years, I've been studying the Gold & Silver markets with far more interest than they deserve, but I guess everyone needs on obsession. Since I don't drink anymore, I don't smoke anymore, and I don't chase women anymore, and have gotten far too cynical to start a new business venture, gold and silver have won by default. Here's what I think is going on right now, and judging by the huge amounts of opinion on the subject, I suspect that my own opinion is by now just as valid as anyone else's. We have been watching the endgame for the past year. The vast majority of gold and silver that needed to go from West to East has already been moved. The vast majority of the legwork required to collapse the system has already been achieved. All of the laws, and all of the inter-structure required for a turnkey police state, or martial law if you would like, are already in place. The collapse of our system is 100% guaranteed, only the timing is now in question. And the only debate left, seems to be between before the election, or after the election. I suspect that this will hinge upon whether our want to be dictator in chief thinks he can win. If he thinks he can win, it will be advantageous for him to wait until after the election to instill his final plan, which is of course a totalitarian dictatorship, whereby he is the sole arbiter of everything. He is of course at odds with many of the powers that be that would prefer a one world government. For the one world government to be enacted, the United States needed to be destroyed as the world's sole superpower. By any objective standard, our current administration has successfully placed the final nail in that coffin. This is the culmination of the plan that has been in the works for decades. The one world government folks probably don't want our current leader as the ruler of the planet, so I can see that there will be just a little bit of a power struggle behind the scenes. This could very easily erupt into a global war. I have no doubt that our current administration was originally nothing more than a puppet government, however their arrogance, and sense of entitlement, seems to point out that they would like to at least pretend to be in charge of everything for a while. This brings me back to our metals. I appreciate what was just said, about Pres. Obama taking on J.P. Morgan, and trying to pretend that he standing up for the little guy. No sane person would attempt this strategy, since the likely fallout would be the complete destruction of the global financial system. However, it's entirely possible that president Obama does not particularly care whether the entire financial system of the planet implodes. He has willfully destroyed everything else he has touched. Either way, it is most certain that the entire global system of finance, and politics, will change dramatically by the end of this year. There are too many variables involved to say exactly what will happen, but all of the options are extraordinarily messy. We have already witnessed the largest theft in the history of mankind, and it has gone completely unchallenged. It is far from over! It is likely this trend will escalate to a point where a revolution is the only option to stop an iron clad dictatorship from taking hold. I have read many plausible scenarios on the past few pages, my mind keeps traveling towards the messiest possible outcome. That's just my two cents worth. Right now, I'm stacking metals, bullets, and food, I am currently working a three month plan to accumulate as much of these items as possible, and will reassess the situation in January. There is no way to know what the world will look like then.

I Run Bartertown
Sep 22, 2012 - 6:49pm


from the link, www.pricedingold.com in the Butler article.

reefman tobydaniel
Sep 22, 2012 - 6:50pm

"Owe no man any thing, but to love one another"


Here's the Biblical view:

Romans 13:8

"Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law."

Sep 22, 2012 - 6:57pm


Breathtaking = Romantic Bullshit
Hot = Not Really
Explosive = Not Really
Historic = Total Bullshit

GLD/SLV are safe. These end of the world hard money folks are laughing all the way to the bank.

Turd probably has several trading accounts. Open source transparency in real time is here. Active(I just bought 1k SLV, heres the trade confirmation) and not Passive(Its the end of the world, trust me).

You'll see soon.

Buy a tube of eagles and open a TOS account. Learn how to trade(not options or futures) and not stack.

Headed to Coronado beach tomorrow. Happy Fall.

Sep 22, 2012 - 7:04pm

Layla - Derek and the Dominos

Layla - Derek and the Dominos
Sep 22, 2012 - 7:05pm


Things are even more strange in the SHALE GAS INDUSTRY. I plan on getting into this within the week. Also, I have seen the link for Catherine Austin Fitts interview and the comments. I think Fitts does make some good points, however she is typical of those whose future collapse analysis is inaccurate.

Lastly, Lindsey Williams was the featured guest on Goldseek this weekend. Let me tell you, it was very difficult to listen to that one. If anyone else listened to it... please give me your comments. He stated after about 5-10 minutes of stammering about how no one else in the world but the elite know that... and that is the FED is going to buy MBS from the big banks.. and then BIG BANKS ARE GOING TO BUY TREASURIES from the procedes. I just sat there listening for 5 minutes waiting for him to get the words BUY TREASURIES out of him mouth.

I believe Turd stated this last week. Anyhow, someone needs to let Lindsey know we are no longer in kindergarten.


Please spell D-E-R-I-V-A-T-I-V-E for me...

Sep 22, 2012 - 7:07pm


"Never a borrower, nor a lender be.." was a favorite saying of my Dad.

Shakespeare wrote in Hamlet..

Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.

Hamlet Act 1, scene 3, 75–77

Old Polonius counsels his hotheaded son Laertes, who is about to embark for Paris for his gentleman's education [see THE PRIMROSE PATH]. While he still has the chance, Polonius wholesales a stockroom of aphorisms, the most famous of which is "Neither a borrower nor a lender be."

On Polonius's terms, there is little to argue with in his perhaps ungenerous advice. His logic is thus: lending money to friends is risky, because hitching debt onto personal relationships can cause resentment and, in the case of default, loses the lender both his money and his friend. Borrowing invites more private dangers: it supplants domestic thrift ("husbandry")—in Polonius's eyes, an important gentlemanly value.

Incidentally, in the days when Hamlet was first staged, borrowing was epidemic among the gentry, who sometimes neglected husbandry to the point where they were selling off their estates piece by piece to maintain an ostentatious lifestyle in London.

Dad was a clever man, who followed His own advice.

He saved and paid cash.

I wish I was more like him.


Sep 22, 2012 - 7:08pm

COT, smashes, volatility and perspectives

interesting perspectives in a changing world and landscape;

what if-sell offs are met by "spirited" buying on a regular basis. What if that's been happening recently. Throw in QE to infinity. What do the naked paper shorts do then. One way or another they will eventually need to close a good portion of those. What happens when they stop selling even from here and even if they do not close shorts. If demand keeps up the prices starts flying. Had they not added shorts over the past several weeks what would have already happened to price. The paper supply is coming from somewhere and we know whom. Unless the problem is fixed. I can;t fid a way we fix the problem unless everybody has pain

This is going to be an interesting period of time especially as we, who know-in varying degrees, more than the average person, more than financial media (or what its willing to let on) watch it unfold.

We are pretty much sure that while we do not like selloffs-if we have dry powder, down the road we get ahead (BTFD). And the dips should no longer be as deep or as long as we have seen, if for no other reason QE forever.

I just know all my friends sans one (and his family escaped Germany) have no real PM. and very little paper PM. We tend to think that the 98% of so will buy just physical--not necessarily true--as we know the easy way is the paper route. And that will create hype and demand. Most of the people are not stupid, just stubborn.

Still, Its all going to suck as society craps out.

BTW--when the PRESIDENT was on LETTERMAN the other night, did anyone catch (certainly the media did not) he said debt did not matter in the short term and the relationship to a 'CHENY-ISM"(boy-Cheny was widely criticized for saying debt does not matter) that he was rather critical of when he was a candidate? and Forget his omission that he did not know debt 4 years ago. More important is he said debt does not matter in the short term because rates are low because the US is held in high regard: oops--why did we need QE QE 1 QE2 QE3? Why are primary dealers buying a chunk of Treasuries (other than to avoid a failed auction).

Yepp: things are really FUBAR--amazing when nobody calling him out even here on that huge error.

Unless our expectations are so low for him nobody cares except the 47%.

And yes--Mitt was right to say the truth even though he will not fix the problem any more than Obama will. Both are relying on huge growth (ASAP, or yesterday) to get us out of this funk.

Have a good football sunday.

I Run Bartertown
Sep 22, 2012 - 7:10pm

Commerce With The Devil


"The most vocal critic of the ECB’s recent ultra loose monetary policy, Jens Weidmann, the influential head of the German Bundesbank, has again attacked current ECB monetary policy...Weidmann has been trenchant in his criticism of EBC policy but has gone further by analogizing recent monetary stimulus to "the scene in Faust, when the devil Mephistopheles, 'disguised as a fool,' convinces an emperor to issue large amounts of paper money."

His criticism has been picked up by media internationally (see news) and has been featured on the front page of the Financial Times (UK edition) today including an image of Mephistopheles and the caption Mephistopheles: Persuaded the Emperor to Print Paper Money.’
As the FT reports today “In early scenes from Goethe’s tragedy, Mephistopheles persuades the heavily indebted Holy Roman Emperor to print paper money – notionally backed by gold that had not yet been mined – to solve an economic crisis, with initially happy results until more and more money is printed and rampant inflation ensues.”

The classic play highlighted, Weidmann argued, “the core problem of today’s paper money-based monetary policy” and the “potentially dangerous correlation of paper money creation, state financing and inflation”...Weidmann is suggesting that the ECB’s current monetary policies are a Faustian pact or a pact with the Devil and that they secure short term gain but will end in the disaster of rampant inflation."

Fred Hayek
Sep 22, 2012 - 7:15pm

If there are 39 million ounces of silver in the comex vaults . .

They why will it be September 24th on Monday, the last week of the month and there will still be 495 contracts or 2,475,000 ounces of silver yet to be delivered to buyers?

If there are 39 million ounces of silver ready and waiting to go as the Comex folks claim, then why do they have such trouble forking over around 1/15 of that?

This doesn't make any sense unless the folks who run the Comex are complete fvcking liars, does it?

Sep 22, 2012 - 7:19pm

Text Book Chart Pattern

Anybody else spot the classic Turd hat chart pattern on Friday?
What does it portend?

Mr. Fix
Sep 22, 2012 - 7:23pm

@ Tex



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