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

Founder
turd [at] tfmetalsreport [dot] com ()

  481 Comments

reefman tobydaniel
Sep 22, 2012 - 6:50pm

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

@tobydaniel,

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."

johnnydow
Sep 22, 2012 - 6:57pm

BHEH

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

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SRSrocco
Sep 22, 2012 - 7:05pm

SHALE ENERGY & INACCURATE ANALYSIS...

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.

"DO U GOT YOUR PENCIL AND PAPER?"

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

foggyroad
Sep 22, 2012 - 7:07pm

@tobydaniel

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

Shakespeare wrote in Hamlet..

Polonius:
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.

https://www.enotes.com/shakespeare-quotes/neither-borrower-nor-lender

Mickey
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

https://www.financialsense.com/contributors/mark-obyrne/weidmann-warns-printing-money-work-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?

TexAsh
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

Funny!

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