At the corner of Copperfield and Blaine

Mon, Oct 8, 2012 - 11:31am

What a joke all of this is. It's all just an illusion. A manufactured theater of disbelief where the magicians convince you ignore your senses, distrust your eyes and rein in your sensibility. The current performance includes such mind-blowing feats as:

  • The U.S. stock market is fast approaching a return to all-time high levels. Not because of corporate profits or any other, fundamental driver. Nope. In a market where over 80% of all trading volume is simple High Frequency Trading and "regular" investors have fled for the "safety" of cash, the stock market has become nothing but The Greater Fool Theory, writ large. One computer buys an issue in the hope that some other computer will buy it next, at a slightly higher price. What was once the greatest, most fair market in the world has been reduced to this: No price discovery, no efficient allocation of capital. Just bullshit computer gaming.
  • For decades, the U.S treasury market rose and rallied because of a circular pattern of capital. The U.S. consumed nearly everything the world could produce and sent dollars careening around the globe in purchasing those items. Those dollars then returned to the U.S. when the producing nations purchased treasuries and were then used to finance the next subsequent, higher level of debt. It was all well and good until the music stopped. As it became clear that this couldn't go on forever, the "creditor" nations stopped buying treasuries. Faced with the prospect of rising rates and increased interest costs, official U.S. policy has become one of self-monetization. In 2013, The Fed will issue over 1,000,000,000,000 in dollar credits to the Primary Dealer banks. Those banks, in turn, will purchase treasuries at auction, thereby funding about 80% of the projected 2013 federal budget deficit.
  • How about the appearance of currency stability through relative valuation and pegging? Is the dollar getting stronger or is the euro getting weaker? Conversely, if Fed policies lead to dollar weakness, shine the media spotlight on the euro in order to help the USDX find a bid. If your currency rises against your wishes, print a bunch of it like the BOJ or maybe peg it to some other fiat like the SNB.

The key to the game is to win the day and maintain the illusion a little longer. Future consequences be damned. All that matters is today and this week.

And this leads us to gold and silver. The prices of these metals have been manipulated and controlled for decades. Why, you ask? Again, it's all part of the illusion. What would the metals be telling you if gold was priced at $6,000/ounce, up from $3000 two years ago? And what would this signal about inflation and the relative quality of "establishment" money? If gold was shown to be more valuable that U.S. treasuries, would the 10-year bond still be yielding under 2%? If general inflation was accurately being reported at 10%, who in their right mind would lock up funds in a 30-year treasury at 3%?

So, here we are on this beautiful, early autumn Monday. Back on Friday, we were told that The Gold Cartel has shamelessly been allowed to create 2,500,000 ounce of gold from thin air in the time since the announcement of QE∞. Even more grotesque is the acknowledgment that, over the same time period, The Silver Cartel has created 70,000,000 ounces of paper silver. Our regulators, those arbiters of free and fair markets, simply avert their eyes to this crime in progress.

After reviewing Friday's CoT and the latest Bank Participation Report, Ted Butler has concluded that JPMorgan alone now holds short 34,000 contracts of Comex silver. If forced to deliver, this is the equivalent of 170,000,000 ounces or about 20% of the world's production for 2012. Additionally, after excluding the amount of open interest that comes from spreads, JPM now controls (on the short side) over 33% of the entire Comex silver market. If you add in the positions of their three largest partners in crime, the size of their position rises to over 50%! Think about this for a minute...Four banks control, on the short side, over 50% of all open contracts for a globally-important, industrial and monetary metal.

Again, the hopelessly-inept and likely-corrupt CFTC dawdles and does nothing. Can you imagine the outcry if four hedge funds managed to accumulate a 50%+ position in S&P futures? Or how would it play out if four countries had control over 50% or the crude oil market? But the CFTC turns a blind eye and does nothing.

But allow me to wrap this up on an optimistic note. Though all of the conditions exist for a sustained and coordinated price collapse, it hasn't yet happened. Why? I see two reasons:

  1. The two, separate 30%+ price drops in silver last year both occurred when QE was ending or had ended. At this particular moment in time, The Fed has thrown the banks a curveball by the initiation of QE∞. This is about priorities and, trust me, levitating the bond market is an almost infinitely larger and more pressing concern for The Fed than assisting JPM in their ongoing manipulation of the puny, little silver market.
  2. Because of the open-ended and infinite quality to this latest QE program, demand to exchange fiat for metal in London is unwavering. Every selloff in paper has been met with increased demand for physical. As long as this continues, sustained beatdowns in price are extremely difficult to accomplish.

So remain patient and buy the dip. Keep stacking and continue preparing. Though any quality magician can temporarily suspend your belief in reality, in the end it's all just an illusion. The laws of physics eventually trump the magicians skills just as the laws of economics will, one day soon, blunt the accumulated efforts of The Fed, the banks and their willing accomplices in government and the media.


About the Author

turd [at] tfmetalsreport [dot] com ()


Oct 8, 2012 - 2:37pm


10-08 11:32: OIL FUTURES: Brent-WTI Spread Is Widest in a Year

Oct 8, 2012 - 2:39pm

Green Lantern, Tyler Matheson

Green Lantern, Tyler Matheson doth protest too much! Love the part... " i dont mean to be disrespectful, but, ..."

Oct 8, 2012 - 2:41pm
GoldRush TJeffson
Oct 8, 2012 - 2:44pm

Thank you!

Oh geez. MY bad. Thank you. We were having network issues here as I was posting it. Glad to see Turd has not turned to the dark side! :)

Gold Rush

Oct 8, 2012 - 2:48pm
Oct 8, 2012 - 2:49pm
Oct 8, 2012 - 2:52pm

Innovative and creative presstitution

THINK TANK: PATH TO IRAN NUKE WARHEAD 2-4 MONTHS ....because everything up to now has been, and still is, BS!

Oct 8, 2012 - 2:55pm
Oct 8, 2012 - 2:58pm

Allen West - best political ad of the year

A lot to like about West. If I had to march into battle I would want him leading the charge. I showed a clip of him talking to a Frank Luntz focus group to my wife and she wanted to know why he was not running for president. That said, I wonder if he would ever support cutting back on our military presence around the world. At least if he did start a war, he would fight to win and get it over with.

His opponent put out an ad showing him with a gold tooth, beating up elderly white women and stealing money from poor families. Here is his response:

Oct 8, 2012 - 2:59pm
Oct 8, 2012 - 3:06pm
Oct 8, 2012 - 3:08pm

Allen West

WOW. Thanks for those posts. I am a new fan. We need more just like him. He is articulate, intelligent and what I consider a true patriot to his country and not just thinking of himself.

I think I will try to read more about him. I would love to have seen him debate Obummer.

Oct 8, 2012 - 3:10pm

The rumored "massive cyberheist operation"

The Ticker Guy's "Caution: Do You Bank Online?"

There are reports circulating of an "impending" massive cyberheist operation that is targeted at consumers who use online banking services -- which is, unfortunately, a huge percentage of people...

The gist of the attack is that most US banks do not require "two factor" authentication before initiating a wire transfer. This is especially important because once a wire transfer is confirmed it is really gone, and in general cannot be recalled. It appears that they intend to deploy (or may have already deployed!) trojan horse programs that capture keystrokes, obtain login information and thenen-masse initiate wire transfers out of the United States from the victims' accounts before the banks can react, effectively draining huge sums of money and distributing the proceeds among the crooks.

If millions were simple stolen overnight from many bank accounts, I would imagine people would quickly learn to keep value out of banks until the banks got their security in order. Hmmm.. what might they put the value in?? :-)

Oct 8, 2012 - 3:18pm

@onealpha re: Allen West

He's a bit of a fire-breathing, mooslims under every bed, kill-em all kind of guy for my tastes. Other than that he's OK.

Oct 8, 2012 - 3:20pm

Egon von Greyers:

They are printing worthless pieces of paper, they call it ‘money,’ and with that ‘money’ they are buying another worthless piece of paper which they call an ‘asset.’

Oct 8, 2012 - 3:20pm

Kitco's reply about the missing spike down.

Thank you for your email. Please note that our chart compresses the price data after few hours from the opening time of market in order to fit in the format that it is. Since that dip only lasted approximately a minute from drop to rise, it will not show on the chart later that day because the data has been compressed. However it was taken into account in the overall numbers. As consequence, the low for the 5 October shows at 34.19, as it took that drop into account. It is the only instance in the day where the price was that low.

This is applicable for all such future situations, during which a very strong fluctuation happens in a very short period of time. The chart may not show the dip or spike later on the day if it does not last long enough to be drawn.

I politely suggested the compression algorithm be changed. After all, silver does tend to fluctuate! :-)

Oct 8, 2012 - 3:21pm

@GoldRush: Oh, I get it now...

"The entire process from beginning to end requires more gold at the input than you receive at the output."

Keynesian gold!

Oct 8, 2012 - 3:28pm


not sure if this has been posted yet but a good read....

Are the Wars in the Middle East and North Africa Really About Oil?

The Iraq war was really about oil, according to Alan Greenspan, John McCain, George W. Bush, Sarah Palin, a high-level National Security Council officer and others.

Dick Cheney made Iraqi’s oil fields a national security priority before 9/11.

The Sunday Herald reported:

Five months before September 11, the US advocated using force against Iraq … to secure control of its oil.

The Afghanistan war was planned before 9/11 (see this and this). According to French intelligence officers, the U.S. wanted to run an oil pipeline through Afghanistan to transport Central Asian oil more easily and cheaply. And so the U.S. told the Taliban shortly before 9/11 that they would either get “a carpet of gold or a carpet of bombs”, the former if they greenlighted the pipeline, the second if they didn’t. See this, this and this.

Congressman Ed Markey said:

Well, we’re in Libya because of oil.

Senator Graham agreed.

And the U.S. and UK overthrew the democratically-elected leader of Iran because he announced that he would nationalize the oil industry in that country.

It's a War for GAS

But it's about gas as much as oil ...

As key war architect John Bolton said last year:

The critical oil and natural gas producing region that we fought so many wars to try and protect our economy from the adverse impact of losing that supply or having it available only at very high prices.

Green Lantern
Oct 8, 2012 - 3:36pm


Before you start calling Allen West "the new face for liberty" in lieu of Ron Paul, find out where he stands on foreign policy and economics.

In my opinion there will never be another Ron Paul. It is his ideas that galvanized people, not his personality, and there is no one in politics today who even has a clue when it comes to those ideas. Find out about West's ideas first. I'm not saying he is not a good guy, but his military experience is a big red flag for me. He is also a staunch supporter of the war on terror--only he is very explicit that it should be a war on Islam.

For many people that's a plus, but I for one am getting sick of giving up almost half my income to make more enemies. If they are so bad--and I believe some of them are--we should just get out of all their countries--and all the non-Muslim countries as well. If they are as uncivilized as everyone claims, they will destroy themselves with no help for the outside. Making a bunch of martyrs for a religion that thrives on martyrdom is not the solution.

Nico Romanov
Oct 8, 2012 - 3:38pm

VR Trader alert-bullish gold

Keeping interest rates at zero to aid the Federal Reserve partners (shareholders) and to minimize interest payments on a huge U.S. debt are criminal acts enough. But, upholding an institution who acts and conducts itself beyond the law is intolerable in a free society. The 'rule of law' must be upheld and, as we know, we see it slowly crumbling around us.

ClinkinKY Puck Smith
Oct 8, 2012 - 3:39pm

@ Puck re Allen West

He's a bit of a fire-breathing, mooslims under every bed, kill-em all kind of guy for my tastes. Other than that he's OK.


Or maybe it's just the ones who were trying to kill his men when he served. You can Google the story of his interrogation of the person(s) who were planning an ambush. The fact that the majority of the "top" Google citations on this story are from "liberal sites" tells me that this man scares liberals as much as he scared the enemy in Iraq. They don't care that his actions saved lives.

Just my 2 cents.

SilverSurfers Puck Smith
Oct 8, 2012 - 3:58pm

Tier 1

ut, oh, increase liquidity and solvency of the CBs?

This tier 1 thing, could be the silver bullet, in the foot.

Danny and The Juniors - At The Hop (1958)

This whole GATA thing blowing up is physical over running paper for the commercial failure, backed up by the KWN yodelers, and by Tier 1 status, it means, banks can pile in, and not only retain, but improve their balance sheet over time, by just STACKING. Then I think how FRN default will be necessary to get at least the Fed Gov solvent again, and think maybe they found a way. If the FED is a liar, maybe they do believe in gold as the ultimate debt extinguisher, and can devalue the FRN, and get the bang of bank gold.

STERILIZATION will take on a WHOLE other meaning ....

Just up the debt limit to 100T$, go stealth into the market and start buy bullion, and shares, then send SS folks the net contributed, discount student loans to state chartered banks, etc etc, and shut it down, all fed social programs, official exchange rate to 1B$/oz, switch to a consumption based national sales tax and we are off to the races ....

libertarian greens ....

Unless you show me RP holding a bazooka, hes just a puss .... unworthy but for hunker down Fortress USSA. Would rather go with someone I really dont trust for sure.

Oct 8, 2012 - 4:15pm

I guess really is money, and people are starting to admit it and use it as such:

Wishing I had some paper to trade for more metal, but I only get paid once a month.

Happy Thanksgiving Canadian Turdites!!!

Oct 8, 2012 - 4:26pm


Bedford couple unwittingly grow cannabis

An elderly couple have unwittingly grown the "biggest cannabis plant" police officers had seen after buying what they thought was an innocuous shrub from a car boot sale.

The couple, who live in Bedford, had planted the drug in their garden.

Police officers were astounded when they spotted the plant. They have collected it and a spokesperson said it would be disposed of.

The couple will face no action from the police.

The officers took to their @bedfordlpt Twitter account to express their surprise at the find, saying: "Seized today. Elderly couple bought shrub at car boot sale, tended carefully - biggest cannabis plant we had seen!!"

Oct 8, 2012 - 4:29pm


"I saw that piece on Wikipedia. That's not what my comment was based on. In fact I respect him a bit for that. He was trying to protect his men in a bad situation. That's what good officers do. >>>But does he question why his men were in that bad situation?<<<"

why his men were in a bad situation is/was a political question. as long as he was in uniform, he had no business questioning policy. a soldier's job is to carry out policy,not make it. west is savvy enough to know this. as to whether or not he has questioned the policy now that he is no longer wearing the unform? we'll have to wait and see.

Oct 8, 2012 - 4:30pm

@ClinkinKY Re: Allen West

I saw that piece on Wikipedia. That's not what my comment was based on. In fact I respect him a bit for that. He was trying to protect his men in a bad situation. That's what good officers do. But does he question why his men were in that bad situation?

I've been aware of West for quite a while. When he first ran for congress a lot of Ron Paul folks thought West was an up-and-comer--and I count myself a Ron Paul guy even if I have given up on electoral politics. They too were saying stuff like "the like new face of liberty." So I looked into him then. He is a champion of American Empire and Full Spectrum Dominance--the exact opposite of Ron Paul in the realm of foreign policy. Also I would like to know about his position on economics and civil liberties. I'm sure he gives lip service to "free markets," but does he even know what that means? Where does he stand on the NDAA and posse comitatus? What does he think about domestic drones? What about the war on drugs? Those things matter.

Has he ever written a book or had anything published. All I've ever seen are youtube videos of him giving speeches that toss out red meat to the Republican base. Point me to something substantial that he's written where he spells out a rational, considered position on economics, foreign policy and civil liberties. I'll be happy to read it, and I'm never adverse to changing my mind given new information. Up till now, though, all I'm seeing is a first class "conservative" politician. They are dime a dozen. Those "conservatives" have been coming and going since Reagan was president and nothing has changed.

Oct 8, 2012 - 4:32pm

Bollocks - sure they didn't know what it was.

The good thing about being old is what you can get away with. "Officer, we had no idea it was pot." Who is going to question an old person? Look inside their house and I bet you find a bong.

Oct 8, 2012 - 4:39pm


Like when the old guy doesn't know his balls are hanging out (-sarc)

Be Prepared
Oct 8, 2012 - 4:39pm
Oct 8, 2012 - 4:41pm

For the "All are the Same" crowd (warning: data ahead)

If all the candidates are the same, how did I get this result?


I answered these questions honestly. If the presidential candidates are "all the same", how come I'm not 50% with O, 50% with Romney? Also, notice that I'm with Romney, Johnson (Libertarian) and Goode (Constitution) in a very tight group. Anyone notice that the democrat and green party candidate are striking outliers?

As discussed many times, if you claim to be critical thinkers, you should strive to be data-driven. 'Feelings' are often wrong. (And can get you killed or extremely hurt in consequential situations). FWIW, I don't discount fear as in the sixth sense of the "Gift of Fear", that's simply another data set coming in.

Thanks T and Big Red for the interesting link.

Edit: Just realized how scarily close to CA voters I am. I may have to re-analyze my data.


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