Another Parallel

Tue, Oct 23, 2012 - 10:40am

Continuing with the current theme, here's another reprint for you. Party like it's 2011!!

Just six, short days after calling "Turd's Bottom" and issuing a guarantee, ( all looked lost. It was January 27, 2011. Prices had peaked three weeks earlier in the post-QE2 euphoria and now nearly every "maven" was dumbfounded by the continuing weakness. Sound familiar?

So, for today, I invite everyone to go back to "The Watchtower" and review this post:

You'll find all sorts of parallels to today...even references to the sudden appearance of a shadowy "insider" who had begun posting cryptic messages on the Yahoo Finance boards.

Anyway, keep the faith and hang in there. This, too, shall pass.


About the Author

turd [at] tfmetalsreport [dot] com ()


Oct 23, 2012 - 1:59pm

Leeb on KWN now, new..

"sure gold may go down some more, 1680, $1660.. be happy you can buy more..I have been hearing that same line for a long time now. I say BS! I am maxed out on metals and have enough, lets start going up and get this over with

Oct 23, 2012 - 2:05pm

Not going to get involved

Not going to get involved with the recent spat over this, but I always wondered why TAs always contradicted other TAs. Aren't they looking at the same charts?

Yet at any point you can always find a TA to say:

1) It's going up.

2) It's going down.

3) It will break soon, but I dunno whether it will break up or down.

4) Erm...

Obviously a fine art, this TA business!

It's the art of poor people ;). You'll find no truly rich man who ever uses TA in his investment decisions. But you'll find a lot who went broke with it.

Oct 23, 2012 - 2:06pm


"I got a bus plan, can turn 5m$ into 3B$, say 5 years"

Hmmm, but 3B$ in 5 years will have about the same value as $3 has today ...

So you're proposing a loss of 3 dollars short of 5m then? lol.

department of truth
Oct 23, 2012 - 2:09pm

market drops, Treasuries go up

Interest rates must be kept down at all costs. Thus, the markets will be manipulated in order to create demand for Treasuries. This goes hand-in-hand with keeping gold/silver prices down.

QE to infinity means manipulation to infinity, corruption to infinity, fascism to infinity. Until the global reserve status for the US dollar ends, I expect the suppression of metal prices to continue, along with zero percent money. Ending 0% would end the carry trades that support the banks and make the interest on the monumental debt go exponential; it would allow $300 trillion worth of derivatives to crash the system.

When the breaking point arrives, I wouldn't be surprised to see it accompanied by another false flag operation of monumental proportions, say a city destroyed and martial law declared. Under such circumstances, the debt could be monetized, because protest would not be permitted. After all, it would be a matter of national security.

Oct 23, 2012 - 2:10pm

Halo 3

It's not Civilisation* 3.

* spelt the proper way

[said Brennus of the Celts]

Oct 23, 2012 - 2:11pm

Apple came out with all kinds of new stuff today..

Stock still down.. uh oh.. I have enough apple crap.. same with the metals.

big percentage at $730 and $16.50

Market didnt like what apple is doing, tanking now..

Oct 23, 2012 - 2:12pm


Sorry I can't give you any input, but I just wanted to say that


All of your articles so far were relevant for me, some or most of them even eye-opening. Determining the true cost of producing silver would be another step to determine where we are in this bull market. The silver price can not fall below production cost, at least not for a sustained period of time, I guess investors can all agree on that. So we could establish a "base price" for silver, which would not be possible through any other means of analysis.

Oct 23, 2012 - 2:16pm

I think banks have more than

I think banks have more than enough excess reserves-lowering requirements will not change anything. They are just not lending, as they get paid for these reserves 0,25%. But even if they would be forced to pay for these reserves , that would not change lending much, as research shows. These reserves were created in FED balance sheet liability side as Treasuries etc. landed on asset side. By digital balancing of FED balance sheet. Yes it means more money for banks, but banks did not ask for it. USG did. Same for MBS, because only if purchased from non-bank owners, purchases of Treasuries and MBS would add to money supply growth.If purchased from banks, they will become bank deposits in FED liability side, in the reserves, and money will go into bank assets instead. The value of bank reserves at FED would not change from such transaction, the content would. Its kind of a myth , these banks reserves. They were created because USG and Fanny Mae etc. needed money, not banks. FED balance sheet adjustment when it purchases securities from non-bank institutions, as the balance sheet has to be in balance. The only liability FED has is money supply in the form of bank reserves ( and excess reserves) +paper money (that has not grown much). Hence they appear, the reserves, but are not used much.

For comparison, these are required reserves - roughly 1/15th of bank reserves in FED:

When banks needed money in 2008-2011 it was lent to them.

Total loans by commercial banks has not increased much,hence no usage of reserves in increasing money supply more than CB itself has done has happened:

The increase in M2 (2,4 billion) since September 2008 roughly matches CB balance sheet increase (2 billion) , so in essence, there has been no fractional banking multiplication applied to the CB money supply to the Bank reserves :

El Gordo
Oct 23, 2012 - 2:20pm


I have an apple phone charger, and that's all the apple crap that I need - in fact, I don't even need that but someone left it here after a one nighter and for some reason never returned for it. I thought that apple stuff was expensive.

Oct 23, 2012 - 2:32pm

REPLY @ DR. G...

DR. G... thanks for the reply. Also, that is very interesting about your families previous business in mining equipment. I would like to send you a few questions... but would you mind shooting me an email at SRSrocco[at]gmail[dot]com so I can reply through that avenue?


Double Bogey
Oct 23, 2012 - 2:41pm

The melting point for gold

is 1948 degrees F. I wouldn't wish that heat on anybody. The melting point of silver is 1764 degrees F. That is the temp those involved with the EE will one day experience, IMHO

Oct 23, 2012 - 2:43pm

provident machine bearings

I was trying to buy on that little dip, but their website never updated the price and seems to be stuck at 31.71

Gee, isn't that surprising. Bums

Dr G
Oct 23, 2012 - 2:44pm

Waterfall today means a

Waterfall today means a set-up for a move higher tomorrow with the FOMC. EE also sucking in lots of shorts that think we are diving down to figures not seen in years. They are wrong.

Here comes gold with a $16 handle.

Tomorrow comes a new catalyst.

Oct 23, 2012 - 2:47pm

Here we go again

Remember, Globex raids are a sign of Bad Guy weakness, not strength.

VERY close to THE bottom. That said, though, I can't take any more today. Headed out to cut the grass.

Oct 23, 2012 - 2:49pm

well considering the action

well considering the action in the market last night I may just wait for the 'ole 3am smackdown.

I personally feel that whatever does/doesn't happen is/isn't insinuated tomorrow is just an excuse for another couple percent to be shaved off the silver.

Eric Original
Oct 23, 2012 - 2:49pm

Donna the Deer Lady

Sorry, just had to share. These are the people who are voting in a couple weeks....

Please Move The Deer Crossing
Oct 23, 2012 - 2:51pm

hope this is a triple bottom in silver.

they always hit it good from 2:20-2:40 comex closes.

Look at the volume in silver after comex closes... You cant tell me that the monkeys are out for the kill..

How do you explain the volume is huge after comex closes then when it was open.. doesn't trading slow down then? duhhh

No the metals are absolutely not manipulated. Same old crap.. Hey Bart stop combing your hair and SEND IN YOUR RESIGNATION BEFORE THE PEASANTS TAKE REVENGE..

At 2:30 the volume on silver was the highest all day.

Oct 23, 2012 - 2:51pm

@SRS Depreciation

You have what appears to be a simple accounting question. I will try and answer it for you. If I am off-base, my apologies.

When a company puts together its cash flow statement is starts with its GAAP net income. GAAP net income includes non-cash expenses such as depreciation. So to get the net cash flow, this non-cash expense needs to be added back. Cash flow statements are tricky for large companies, but later in the statement, the company will subtract any large capital purchases they may have had.

GAAP net income - 1000

Depreciation - 10

Net - 1010

Capital Outlays - (100) - *Note this would not have been included in net income, only the depreciation on it.

That's why you may here some people say....the only thing that matters is the cash flow statement. Companies often fail because when they purchase other companies, they buy them at a large premium. This premium is recorded as good will. They may be showing net income, but not have enough cash flow to cover their bills. Then comes bankruptcy to what was seemingly a company with a strong balance sheet. This would have happened to the banks in 2008. Their counter parties were failing and they had no cash flow. Hope this helped....if not, c'est la vie

Oct 23, 2012 - 2:52pm

@SRS Depreciation

Duplicate post...deleted

Chi-Town Deadhead
Oct 23, 2012 - 2:52pm

Good Day then Sadness

I just came back from my LCS where I had purchased 20 ASE’s and 1 GSE on this nice little dip. However on my way back to my car I was met in the alley by a 170 pound voracious looking Rottweiler. Teeth bared, he caught me off guard and backed me into a corner. I whimpered a cry for help but with all the traffic on the street no one could hear me.

The contents of my pockets consisted of my car keys, phone, wallet and my precious metals. This black and tan Satan’s hound was inching closer when I decided to try and get his attention off of me by throwing my phone. I tried to throw it like a Frisbee so it wouldn’t do too much damage to it. I figured he would chase it and I could make a break for it and come back for my phone later. With my unrepaired torn rotator cuff pitching arm, I sailed the phone down the alley. To my surprise, he took off after it as I made my break. Unfortunately, my thought of sneaky by him was a dream of how fast I used to run in High School. He sniffed the phone and turned back to see me trying to get by. This infuriated him even more.

What to do, what to do? I threw my wallet, which had a couple of c-notes in it still but the hound left it sitting in a puddle.

Now what? I figured ok, if I take 1 of my ASE’s that might get his attention. I know, I know, I’m wasting a brand new 2012 ASE. But if you had seen him you would understand. I figured I could bounce it off the buildings and this might give my slow ass some more time to get away. So I took my 1st ASE and again threw it the best I could but it hit too low on the building to bounce much. Unfortunately, the Rottweiler saw and heard it bounce off the building and with one swift leap caught my ASE out of mid air and swallowed it. I was dumbfounded!

By the way, this dog was amazing, the acrobatics it performed in catching every ASE I threw before it hit the ground. I thought I was watching The Matrix the way this dog flew off the walls of the buildings surrounding me. So after all my ASE’s had been gobbled up by this spawn of Satan, I was down to my AGE and keys. He turned after catching my last ASE and I could have sworn I saw the hint of Gold in his eyes. He lifted his black nose into the air as if he knew exactly what I had left on me. He actually started looking almost rabid as he came closer. This time I decided that I would roll the AGE down the alley. He took off after it but caught it before it was halfway down the alley.

With a look over his shoulder as if knowing that his job was done, he proceeded to run away like a playful puppy that hadn’t seen his master all day. But there was no one there on the street that he ran to. I was left, alone in the alley, picking up my cracked phone and soaking wet wallet.

I thought about going back into the LCS but didn’t know if this crazed man eater would be waiting for me again. The next time I go to that LCS I will be prepared with my .22. Not going to happen again!

So if any of you live in Chicago and have a trained Rottweiler, you owe me some coins you bastard. If not, you are on notice that there is a silver and gold eating Rottweiler on the North side of Chicago.

Have a wonderful day!

Oct 23, 2012 - 2:54pm

i bets it all

turd...dont let me down dis time... i bets my mortgage and rents on 1690 holding? you feel real goods bout it rite?

Oct 23, 2012 - 3:03pm

Well, the 23rd is generally a down day every month...

... the rest of the month looks pretty good!

Oct 23, 2012 - 3:04pm

Mauldin: The Perils of the Fiscal Cliff

The Perils of the Fiscal Cliff

OCTOBER 23, 2012

The Problem with Austerity
The Perils of the Fiscal Cliff
If Something Can’t Happen…
GDP = C + I + G + Net Exports
Economic Indicators for the Election – It’s the Economy, Stupid!
Brazil, Uruguay, Argentina, Chicago, New York, and North Dakota

“Spain is not Greece” – Elena Salgado, Spanish Finance Minister, February 2010

“Portugal is not Greece” – The Economist, April 2010

“Greece is not Ireland” – George Papaconstantinou, Greek Finance Minister, November 2010

“Spain is neither Ireland nor Portugal” – Elena Salgado, Spanish Finance Minister, Nov. 2010

“Ireland is not in ‘Greek Territory’” – Irish Finance Minister Brian Lenihan, November 2010

“Neither Spain nor Portugal is Ireland” – Angel Gurria, Secretary-General OECD, Nov. 2010

“Italy is not Spain” – Ed Parker, Fitch MD, June 12, 2012

“Spain is not Uganda” – Spanish PM Mariano Rajoy, June 2012

“Uganda does not want to be Spain” – Ugandan foreign minister, June 13, 2012

Having been to all the countries listed above, with the exception of Uganda (although I have been to 15 countries in Africa, several bordering Uganda), I am most happy to confirm that they are all different. Just as you would grant me the fact that the US is not the UK and that France is not Argentina. To paraphrase Tolstoy, dysfunctional countries come by their unhappy sets of circumstances in their own individual ways.

How does one go about comparing the financial crisis in one country to that of another? The International Monetary Fund tried to do just that, setting off a rather torrid debate in economic circles. And while we will look today at their analysis, the upshot is that the economic models used to guide monetary and fiscal policy may not be working as they did in the past. Last week in this letter, I postulated a condition I called the Economic Singularity. Just as the singularity at the center of a black hole creates a region where mathematical models break down, a large mass of debt will create its own Economic Singularity where economic models no longer work as expected.

Given that within a few weeks a very large debate will erupt in Congress about how to deal with the “Fiscal Cliff,” with both sides displaying economic models that demonstrate the clear superiority of their chosen solutions and the utter disaster that will ensue if the opposition’s plans are enacted, I think we will find it useful to look at some of the underlying assumptions. Given the fact that almost everyone, including your humble analyst, has concluded that if the tax increases and spending cuts were to be enacted as the legislation currently dictates, a rather serious recession would follow in short order, it might help us to look at some of the assumptions behind that assessment....

Oct 23, 2012 - 3:07pm


Your money. Your decision. Your responsibility.

Bohemian Chi-Town Deadhead
Oct 23, 2012 - 3:08pm

@Chi-Town deadhead

A black Rottweiler...? Oh yeah! Sorry to hear that. I hope you know that these black Rottweilers are well trained by FEMA and IRS officers, usually dropped from black helicopters in LCS areas, scaring locals and taking from unsuspected PM buyers mobile phones with phone numbers, wallets with their Driver's ID and all their shiny coins. And some can even take your car keys, if you have a nice car... :-)

Oct 23, 2012 - 3:20pm


Like the sound - hate the idea. Why? Besides what the petrodollar did to the dollar?

Because sooner or later a full blown oil for gold trade will develop, never mind a gold component to any new currency, and when it does the demand for gold will go vertical, just like the price.

Now don't get me wrong, I'm not complaining about a high value for my gold because of exponential demand, or because when gold balances that demand at a higher price it will not come down, no, it's that at such a high price the flow of gold would drop from hundreds of millions of ounces per transaction to tens of millions of ounces and therefore not enough to skim off the top.

Hey wait, someone remind me why that would be a bad thing. Less gold - same value exchanged or more value exchanged - same amt. of gold. Geeze, sounds like and old Miller Lite commercial.

Or since less gold - same value exchanged, wouldn't that mean the gold would last and last and last and last and last x100? Geeze, where did the energizer bunny come from?

But seriously, or semi so, sooner or later the dam is going to break and a flood of excess bank reserves is going to flow. Where is anyones guess but there is only one, okay maybe a couple, things where that flood of money and credit can flow without causing hyperinflation. And that is the great capacitor known affectionately as gold. It does have superior electrical qualities as well so if you think of money flows as a river or a flood, or electrically as many do, then gold is the only item in the known universe of finance and economics that can act as a resevoir or capacitor to keep the system from imploding and destroying the known world, and bleed all that inflation off ever so slowly (lower gold prices) over the coming decades so that if it doesn't blow itself up first, the world can pick itself up by the solar straps and move ahead.

Now what was I going to complain about? The inconvienience of having to carry less gold? I forget.

Gold Bond, it's not just for personal health and hygene.

Petrogold, less gold! - More value!

I need a drink. And I think I know who trained that damn dog.

Miller Lite commercial
Will Smith meets Frank the pug (Men In Black)
Oct 23, 2012 - 3:23pm

@ EO Deer Crossing


Tears on my cheeks from laughing!

Oct 23, 2012 - 3:24pm


This must be why it is down too.... Iran said on Tuesday it would stop oil exports if pressure from Western sanctions got any tighter and it had a "Plan B" contingency strategy to survive without oil revenues. "If sanctions intensify we will stop exporting oil," Iranian oil minister Rostam Qasemi told reporters in Dubai. Something ain't right these days....

Oct 23, 2012 - 3:26pm

Gotta love Nigel

'Bailouts' are a means for total subjugation of nation states - Nigel Farage
John Galt
Oct 23, 2012 - 3:27pm


Caution: Deer Crossing ahead. Wrap some reflective tape around your antlers.

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