Inspired Defense

Mon, Oct 1, 2012 - 12:07pm

After the CNBS interview of Fed Goon Evans seemingly caught The Cartels off-guard, the coordinated response was swift and decisive.

It began this morning with this:

The reaction in the metals was almost instantaneous. Prices shot higher and were once again within a whisper of taking out critical Cartel resistance and triggering an even-more-massive short covering extravaganza. At precisely 9:00 am EDT, The Monkeys sprang into action.

The first mission was to blunt the move toward the all-important $35.50 level in silver, above which lays a tremendous amount of buy-stops. Once that was achieved and momentum halted, the real attack began and silver plunged 60c in just 4 minutes. Gold, too, was repulsed in a Gold Cartel counter-attack. After successfully holding gold under $1790 at 9:00 am and 10:00 am, the gold attack began once the London PM fix was in. Between 10:00 and 10:04, gold fell $5 but when it appeared to bottom for the third time at $1785, desperate measures were called for. An overt attack by The Forces of Darkness drove price down $12 in just two minutes at 10:39 and 10:40 EDT.

Below are 2-minute charts that show the action.

None of this should surprise anyone around here as we have been watching The Cartels aggressively defend these levels since the announcement of QE∞ nearly three weeks ago.

Despite all of this nonsense, please do not get discouraged. Gold priced in euro once again made a new all-time high today as demand to convert debasing fiat for hard assets is continuing unabated. Euro gold has led dollar gold higher this summer with a lag time of about 4-6 weeks. Just be patient and you will be rewarded. The Cartels are fighting a losing game.

Next up, The Bernank! As I type, it is 11:51 EDT, which means that The Bernank will begin a speech in Indianapolis in about 40 minutes. You can feel quite comfortable that volatility is about to ramp up again.

Speaking of volatility, you'd better get used to it. Have you seen the latest open interest numbers? Volume and liquidity have finally returned to the metals pits and this will undoubtedly lead to more volatility in the days ahead. The Dec12 gold contract ended Thursday with a total open interest of 353,966. As recently as mid-August, the entire gold complex open interest was just 385,000! And in silver, the Dec12 has an OI of 86,972. For comparison's sake, total silver OI fell under 100,000 late last year and was as low as 102,000 as recently as February.

In terms of news items, chew on this one for a moment as it doesn't seem to be getting much media play. ( If the Iranian currency continues to implode, things could get very dicey, very quickly in the region. The mullahs and rulers of Iran could very easily begin to feel threatened by an upheaval of their own population and desperate leaders often take desperate actions in their attempts to cling to power. Watch this story very carefully all week!

Lastly, we're finally ready to conduct our first interactive webinar over at TurdTalksMetals. The first event will be on Wednesday and the guest will be James Turk of GoldMoney. I would imagine that you might have a few questions for James but you have to be a member of the site to participate. All of the details can be found by clicking here: I sincerely hope you consider joining the site and participating in the fun.

That's all for now. The Bernank speaks in about half an hour so get ready!


About the Author

turd [at] tfmetalsreport [dot] com ()


Oct 1, 2012 - 12:41pm

Not sure if people saw this one or not

Don't kid yourself. If they lose control of the gold and silver prices they will just shut down the whole exchange system. If you are lucky you may get some fiat back. You won't be getting any gold and silver from these crooks.

Got a stack?


Oct 1, 2012 - 12:42pm


"It is important to keep politics out of monetary policy decisions, but it is equally important, in a democracy, for those decisions--and, indeed, all of the Federal Reserve's decisions and actions--to be undertaken in a strong framework of accountability and transparency. The American people have a right to know how the Federal Reserve is carrying out its responsibilities and how we are using taxpayer resources."

I always love that one...

Oct 1, 2012 - 12:46pm

Breathtaking audacity

This section is utterly amazing. Rarely am I left speechless but this does it:

Ultimately, the securities held by the Fed will mature or will be sold back into the market. So the odds are high that the purchase programs that the Fed has undertaken in support of the recovery will end up reducing, not increasing, the federal debt, both through the interest earnings we send the Treasury and because a stronger economy tends to lead to higher tax revenues and reduced government spending (on unemployment benefits, for example).

Even though our activities are likely to result in a lower national debt over the long term, I sometimes hear the complaint that the Federal Reserve is enabling bad fiscal policy by keeping interest rates very low and thereby making it cheaper for the federal government to borrow. I find this argument unpersuasive.

Oct 1, 2012 - 12:49pm

All time high in Euro

The 5 year graph is extremely predictable.

Very very bullish.

The high must be hitting the news - demand has to be going through the roof in Euro land - such a small market.

Singapore scraps tax on Gold (thanks Turd) - all very bullish.

This beach ball cannot be held under much longer - indeed I thought we had reached escape velocity this morning.

Can't wait to post my "thar she blows!"


Beastly Stack
Oct 1, 2012 - 12:50pm


If THEY can get the metals to fall from here,God Bless!

I am looking at silver just below 35 and 1780 in gold currently.I think these guys are up SHITS CrEEK!

Oct 1, 2012 - 12:54pm


Oh hell yes

Edit: Fail.

Oct 1, 2012 - 12:54pm

Smackdown Cost?

Turd, I don't want this to sound like a stupid question but what does it cost the fed or the ee to smackdown the metals like they did today?

Oct 1, 2012 - 1:08pm

I am confused

Ben's speech is essentially a point-for-point refutation of the libertarian / hard money critique of central banking- it is a shot across the bow to all Fed bashers. This is his "Damn the torpedoes and oh by the way, shut up" speech.

So if he is basically saying "This is our defense of our actions, and we are very very right to pursue our current policies" then why aren't metals rising & the dollar tanking (because he is basically saying QE infinity is outstanding & real smart policy)? Isn't this a strong and vigorous statement of support for unlimited QE as long as he deems it necessary? Isn't this a complete dismissal of any critique of his policies or concerns that QE could have negative and unintended consequences? Isn't he just saying damn the torpedoes here?

BTW, I stand by my months-earlier photoshop of Bernanke as the "Quint" character in Jaws... this guy is gonna lean on the throttle until the engine blows, an Ahab-like self destructive personality.

"Farewell and adieu to you fair Spanish ladies... "

Hi-Ho Silver
Oct 1, 2012 - 1:12pm

options expiration is tomorrow

options expiration is tomorrow -- and the 1800 area is where open interest is highest but OCT not a big expiration month.

Hi-Ho Silver
Oct 1, 2012 - 1:17pm


Option expiry was last week.

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Key Economic Events Week of 1/13

1/14 8:30 ET CPI
1/14 9:00 ET Goon Williams
1/15 8:30 ET PPI and Empire Fed
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