Sat, Nov 3, 2012 - 11:24am

Well, you can either give up or carry on with renewed determination. I choose the latter.

These are the times that try men's souls...

Let's see, what do we know for certain?

  • Quantitative Easing is now a permanent fixture of the financial markets for, without it, the U.S. bond market would collapse and interest rates would reset multiples higher.
  • The U.S. federal deficit will continue to be greater than $1T/year, regardless of the outcome of the election.
  • Later this month and into December, a "lame duck" session of Congress must come to terms with the looming fiscal cliff and well as an imminent breach of the debt ceiling.
  • Further downgrades of the credit rating of the U.S. are likely.
  • The European Union, already tattered at the edges, remains on the brink of crisis and dissolution.
  • Dollar creditor nations, led by China, are rapidly accumulating gold and silver as they exchange their devaluing fiat reserves for hard assets.
  • Dollar hegemony and reserve currency status will, one day in not-too-distant future, come to an end.

I could continue but I think you get the idea. Regardless of the paper machinations of the Comex, physical precious metal remains your best defense against the tumultuous times ahead.

The summer soldier and sunshine patriot will, in this crisis, shrink from the service of Turdville...

I think you know where I stand but where do you stand? Will you now become bitter? Will you be easily swayed by the uninformed and the disinformation agents? Do you have the courage of your convictions to not only find your way but guide others through the darkness?

Yesterday was tough and, worse, unexpected. But don't think for a minute that it was a selloff directed specifically at the precious metals. Look at the Dow and crude:

Look at the grains:

In fact, about the only things catching a bid yesterday were bonds and the dollar:

So understand that there may be more going on here than you think. The situation in Europe is tenuous, at best, and things on the ground in the U.S. aren't much better. For now, the precious metal "baby" is being thrown out with the proverbial "bath water". You should seize this opportunity to add to your stack.

  • With all of the selling in gold and silver yesterday, just whom do you think was taking the other side of that trade? Let give you a wasn't the specs.
  • Backwardation, as measured by the difference between the futures "offer" and the spot "bid", has reached a level of such extreme that it makes further significant declines highly unlikely.
  • Our friend, Andrew, reports that demand in London yesterday remained "exceptional" and "unprecedented". Though the effects of this physical demand can often by muted on an intraday basis, it nonetheless precludes the bullion banks from exacerbating the moves to the downside.

But he that stands by it now, deserves the love and thanks of man and woman...

I personally promised you a "hot, explosive and historic" summer. It, obviously, did not come to pass and, so far, it has not materialized this autumn. Do not be dismayed. I personally know of several extraordinarily brave and courageous people who are actively working to bring about an end to the blatant manipulation of precious metal price by the Bullion Bank Cartel. With firm reliance upon the protection of Divine providence, I am extremely confident that they will be successful. When they are, not only will the manipulation end but, perhaps, the plundering of Western reserves will slow, as well.

Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph...

So, again, I implore you: Do not lose faith and do not suffer from doubt. The end of The Great Keynesian Experiment is indeed upon us and you must continue to prepare accordingly. Do not be swayed by the day-to-day trading of the Comex nor the incessant noise and disinformation supplied by the financial media. Think for yourself. Study the past and the present, then consider the future. Trust your instincts. Believe in yourself and your ability to lead and inspire. Your family needs you. Your friends need you and Turdville needs you. The future demands leadership at every level and we all have a role to play. I will continue to do my part. Will you?


About the Author

turd [at] tfmetalsreport [dot] com ()


Nov 3, 2012 - 1:53pm


CASH COSTS ARE COMPLETELY BOGUS... They Have Misled The Precious Metal Investor

I have been spending a great deal of time going over the balance sheets of mining companies to get a better TRUE COST of SILVER PRODUCTION. I have put out a request for anyone in the accounting profession to assist me in this matter. After the initial interest, it seems as if these folks have backed off... for whatever reason.

I don't plan on stopping before I can figure out a BETTER WAY to cost out gold and silver and not the pathetic industry standard of "CASH COSTS". I have had some of SilverDoctors members reply to my previous post on Alexco Resources. One member told me about another so-called extremely LOW COST SILVER PRODUCER named Dia Bras Exploration.

So, I took on the challenge and researched Dia Bras. According to their Q2 2012 report, this is what they stated for their 1H 2012 SILVER CASH COST:

Isn't that amazing... a NEGATIVE $21.70 per ounce silver cash cost. For Pete sakes, Dia Bras should be rolling in the DOUGH... correct? I mean, they aren't mining silver at a ZERO CASH COST... they are mining it for $21 less than FREE...LOL.

If we look at their Consolidated Balance Sheet Q2 2012, we can see that on the bottom row, they had a NEGATIVE $6.7 million net income loss for the first half of 2012. How in the living hell can a company state a negative $21 cash cost and lose money?

It's simple.... ACCOUNTING 101.

The member on SilverDoctors website thought that Dia Bras was an extremely low cost silver producer.... they are not. They are still showing a negative net income.

Furthermore, you can see that Dia Bras has acquired $9.137 million in deferred taxes in just the first 6 months alone. At some point in time they will have to pay these taxes won't they? Hell, I stated in yesterday's post on Barrick that it had something like $4.3 billion in deferred taxes.


I have also posted this from Coeur de' Alene's Q2 2012 report on cash costs:

Cash costs exclude depreciation, depletion and amortization, accretion, corporate general and administrative expenses, exploration, interest, and pre-feasibility costs.

I am repeating myself to make an important point. How can a mining company or the industry as a whole use CASH COST figures to show the investing public true costs of mining silver? They do it to MISLEAD the public.

I would imagine there are a great deal of investors who really think Dia Bras Exploration is a VERY LOW COST SILVER PRODUCER. However, I will show you from Dia Bras recent presentation their breakdown in metal revenue:

If they are getting 40% from their gold and silver revenue, I would imagine that we can safely state that they receive 10% of that 40% from gold. That means they are taking 70% of their revenues and throwing it against their silver. This is totally ridiculous. I am surprised this is allowed in the industry.


It is due to this very reason, I am researching and putting together a better method of determining the TRUE COST of mining silver (and soon... gold). It is painstaking... but I will get there soon enough.

I am still trying to contact anyone in the MINING INDUSTRY who works as an ACCOUNTANT to assist me in this matter. Please contact me at SRSrocco[at]gmail[dot]com if you would like to contribute some information in this regard.



Nov 3, 2012 - 1:58pm

Random Predictor?

I'm sure most of you do this. Check-in with TFM several times a day, and then get on with RealWorld work but with part of your biological CPU dedicated to thinking about what you read.

This morning was no exception for me. I read TF and went outside and did some HunnyDoos. But one thought kept pestering me. Remember in the earlier thread the post by Puck (hat tip to ya, Bro!) with the tarot cards? Yeah, I know he meant it as a joke but it got me thinking. Wouldn't it be interesting if we compared the actual market actions to a completely extraneous (and random) predictor?

Seriously. I'm thinking of writing a bit of code that will cook-up a "predictor" of the silver market. If I do, I will publish the code once it's stable, and then challenge Turd, Ivars, and anyone else who wants to play to a datafest. :) They make daily predictions, and I post the results of my "predictors" data-runs. Compare the result. (And of course I'll take it to the side-forums so as not to pollute the main thread).

WHAT IF, and I know it's a long-shot, this sort of random "predictor" did as good or better than skilled technical analysis? Impossible? Probably.

For the record, I'm 99% sure I'll get my ass kicked (and very badly too), but it would also demonstrate something else as a side effect, ie, that technical analysis is NOT dead and the markets are still responding in part to reasonable forces.

Dunn0. Just thinking out loud. Maybe I've had too much caffeine. :)

Mr. Fix
Nov 3, 2012 - 2:09pm


I think to much caffeine

But then again, maybe that is just me.

Nov 3, 2012 - 2:19pm

@Mr. Fix - Likely so

After spending years looking at the Kitco charts maybe it's natural to wonder if the control algos for the flying monkeys isn't based on the hormonal swings in Blythes bloodstream... ie, a general overall pattern but completely random as to the smaller timeline granularities.

I also think we set way too high a bar for the TA guys. In any complex system you're going to have instances where the system doesn't perform in a pre-predictable way, and the stimulus/response triggers are only evident in hindsight.

No more caffeine for me, but I am eyeing my development tools with a gleam in my eyes! :)

Nov 3, 2012 - 2:23pm


It would be an interesting experiment. However I wonder if TA is actually read in a vacuum? Or does a certain amount of "cold reading" take place (consciously or subconsciously)?


Nov 3, 2012 - 2:24pm


I like the idea. Is TA is more accurate than simply making random picks. magnitude AND direction? We could just flip a coin each day for a random predictor of direction only.

Ivars, Do I recall that you once said you were a statistician?

Isn't one of our other regulars a mathematician?

Nov 3, 2012 - 2:25pm

Thomas Paine

Turd is so right to frame today's post in Thomas Paine's words and bind what is happening today to the men and the Revolution that created America. Sound money is freedom and freedom's erosion in our country began on Jekyll Island with the creation of the Federal Reserve. My Great(X7)grandfather was at Valley Forge and buried his brother there. He served with Washington to the end and I think about their sacrifice and what they left for me and my family all the time as I wage my private war against the Fed and its master, the banksters. I regard Turd and many in this community as comrades in arms. Sound money always wins out. Come Wednesday, no matter who wins, I am renewing my efforts and committing the modest cash position I have held during this correction to sound money trades. I've never felt more positive and bullish.

Prize Fighter
Nov 3, 2012 - 2:30pm

Roark, this may be

Roark, this may be timely...

Food for Thought: Why Correlation Better Not Be Causation

We can only hope that the chart below, which shows a rather disturbing linkage between consumption of chocolate (in kg/yr/capita) and Nobel prize laureates per 10 million of population, is simply a good confirmation of the old adage which everyone these days seems to forget (especially those who look at "black box" models and predict the outcome of the presidential election with 75.304% accuracy in hopes of signing even better book deals) that correlation most certainly is not causation. Of course, for the vast majority of people who have no idea where statistics ends and heuristics begins, there is nothing greater in life than a high R-squared, which is why we expect that the next generation of Americans will be even fatter (if that is even possible) for one simple reason: their proud parents will fed them intravenous chocolate in hopes of creating the next Economics Nobel prize winner.


Remember this when someone accuses you of being a dirty speculator and metal hoarder. (Actually, if they accuse you of this you've failed OpSec so you'll have other things on your mind.)

Nov 3, 2012 - 2:32pm

Sorry for my lack of chart skills

but here are a couple of links to keep things in perspective.

10 year silver chart:

10 year gold:

Nov 3, 2012 - 2:37pm

A quarter can't buy a gallon

A quarter can't buy a gallon of gas like it did 100 years ago (silver). The dollar gets stronger after each frankenhurricane disaster. Bernanke is solving the national deficit and the fiscal cliff problem. JPMorgan was wrong when he said in 1912 that gold was money and everything else _was credit.

Nov 3, 2012 - 2:40pm

Sarc off

Sarc off

Nov 3, 2012 - 2:47pm

a very small poll sample

one poll datum:
i just returned from early voting, and i noticed a couple of things.
1) although in this small, rural north florida county whites outnumber blacks by about 60/40, the lines of people waiting to vote at the elections office were over ninety percent white. is the acorn effect missing this year?
2) yard signs. counting yard signs, republicans are ahead of democrats about five to one. this holds true for both local and national campaigns. this is one of the few panhandle counties that traditionally favors democrats. is the local democratic party apparatus just sitting this one out?

are the power bases of the democrats here suffering from a lack of enthusiasm?

sure seems so. but this is only one observation, saturday nov 3rd, jefferson county, florida. if this is part of a larger pattern, hawaii may have a new retiree, and 1600 pennsylvania ave may have a new tenant.
Nov 3, 2012 - 2:54pm


Thank you. That answers my question indirectly. I would send an email to Dave Merrill but I've no idea how to contact him. Considering the exhaustive nature of his research he is probably aware of this anyway.

I'll go back to that website and do some more searching generally.

Nov 3, 2012 - 3:04pm

Isn't belief in Divine

Isn't belief in Divine providence simply putting your future in the hands of just another faceless, more powerful "cartel"? Not for nothing did that guy describe himself as the Shepherd of Men. The origin of the term "sheeple."

Nov 3, 2012 - 3:04pm

This last weeks market action

Had the flavor of the sell, sell, sell of 2008. I don't know where to look if the interbank credit market is freezing up, but the BMO ATM blackout is an ominous sign.

Genesis Land of Confusion
Nov 3, 2012 - 3:08pm


The disaster got me thinking..

If I happened to be involved in such I would be a 'homebody' if possible due to my level of preps, staying in my neighborhood trying to help others. (If they are safe and secure my security increases.) It's possible I could stumble on someone else that is prepared as well. A conversation ensues and we attempt to engage in some good 'ol barter. Silver for gas seems fitting, but he wants to trade a coin I've never seen before. I can't use my cell or the internet, so does that mean no trade?

Have those of us who envision trading/bartering compiled a list of needs for their phyz assets? How will you detect/defeat counterfeits? Can you recognize the coins used in the US?

I was going to compile something for the community here, but stumbled on this website in the process. I dare say it would be wise to print and laminate the things you find there and add it to your stack.

It probably wouldn't hurt to buy a decent magnet, loupe, and calipers either. The price should be under that of 1ozt, and could prove invaluable.

Just because we have the phyz doesn't mean we are done, we have to be able to employ it and protect it as well.

Frankenstein Government
Nov 3, 2012 - 3:13pm

Metal Miners

Turd...I put together a list of miners and some random thoughts on PM. I plugged your site as well as a couple of others.

Nov 3, 2012 - 3:14pm

First! Damn, not again - you


Damn, not again - you guys are too good:)

Nov 3, 2012 - 3:14pm


A family member is a cross-country trucker. He keeps us posted on signage and bumper stickers across the country. There are days where he sees nothing but Romney campaign materials. Obama's have apparently disappeared from the landscape in certain parts of the country. In some urban areas the bumper stickers run about 5:1 for Romney, according to him.

I drove through the Central Valley a few weeks ago, and just south of Sacramento a farmer with property on both sides of I-5 had made his own political version of the old Burma Shave signs...very clever! I noticed a distinct lack of Obama bumper stickers.

Nov 3, 2012 - 3:16pm


The site contains a complete physical description of many coins, as well as pictures.

Barber Dime:

Mint Date Range: 1892-1916

Weight: 2.50 Grams

Composition: 90% Silver / 10% Copper

Silver Content: 0.07234 troy oz.

Diameter: 17.91 millimeters / Edge: Reeded

Frankenstein Government Louie
Nov 3, 2012 - 3:17pm


I often view the ten year silver chart and the first rise as the right shoulder of a head and shoulders top. I believe the next leg up will absolutely eclipse the right shoulder; I just don't know when that will occur.

Nov 3, 2012 - 3:31pm

@ Turd -- HEH moment

Hi Turd,

Thanks for this site. I learn so much.

I hope fervently that the HEH moment happens. I’m sure there are people working very hard to make it a reality. I just wonder how realistic it is to think that the criminal activity done by the cartels can be exposed. Brooksly Born, as head of the CFTC, tried to regulate the derivatives market but was not only opposed but marginalized by those more powerful. It was only a market event that later proved her right. Harry Markopolos handed the SEC and the press the proof of Madoff’s Ponzi scheme on a silver platter for ten years, yet nothing was done. It was only a market event that brought Madoff down. Many people have given the CFTC information on the silver market manipulation, and yet the years go by with no action.

What makes your contacts think that they will have any better luck exposing the cartel? Can they bring about a black swan market event big enough to expose their criminal activity? Or are they just trying to bring enough evidence together for the regulatory agencies or criminal investigation agencies or the press? The cynical part of me says that just isn’t going to work.

Would love to get your insight on this.

Prize Fighter
Nov 3, 2012 - 3:31pm

rl999, IMO you can exchange

rl999, IMO you can exchange your FRNs for public credit right now just by asking for a box of pennies, nickels, dimes, quarters etc. BUT that does not redeem them because your FRNs are still on the Federal debt balance sheet. Real redemption would require you to explicitly direct your bank account or the Fed to transfer that amount from private to public credit balance sheets thus lowing the Federal debt.

They don't want that to happen so you can exchange and use all the coins you like. As long as you merely exchanged FRNs for them you still utilized the FRNs and thusly still pay the fee. But as I said earlier this will just land you in smartass jail because loopholes are to be seen and not acted upon. The line in the sand is where the punishment is less severe than the alternative slave state. That's a philosophical rock and hard place for TPTB IMO.

Nov 3, 2012 - 3:35pm

Harvey's view on the cot report

On Thursday it was very bullish on gold. Friday , well you know what hAppened.

today he is very bullish on both metals based on the cot report.

So he feels in the near future they will take off.

Be Prepared
Nov 3, 2012 - 3:39pm

I have not yet begun to fight...

Defiance comes from the will power that you know what you believe... is the "truth" with all your might. We act to hold fast to an idea that we are free, as individuals, to pursue our lives to the best of our abilities untethered by the shackles of an overlord government. There are no promises of great wealth at the end of this road.... there is not even a glimmer of hope that what we once knew as the norm will remain when the implosion begins....

The thieves of our labor don't even bother to hide under the cover of night, but are now sheathed in the strength of law and look to rob us, our children and our grandchildren without even a blink in full view of our neighbors, our community and the nation. Too many of our fellow citizens call out to their paternal government to solve all their ills and, in so doing, have granted them inordinate power while abdicating their rights and responsibilities. There is a growing belief that life should be fair and all should have the same regardless of effort or labor, but freedom is the ability to gather the fruit from your successes and is the requirement to stand up to your failures. Any system means "winners" and "losers".... we all just hope that there is a reasonable chance to strive and be self determined in those pursuits.

I will defy.... and I will walk.... and I will talk... in hopes and efforts that we may find our way back to a place where the government bows to its people and not the other way. :-)

Silverbugs Fade2Black
Nov 3, 2012 - 3:44pm

Carry on! We know how this is

Carry on! We know how this is all going to end, in a giant explosion of fiat disaster.

S Roche corysea
Nov 3, 2012 - 3:45pm

@Corysea re Silver Doctors Information.

Silver Doctors think that Netdania reports futures contract volume...everytime I have asked Netdania they tell me the data feed is from the OTC spot market in ounces...unless they changed recently that is just a silly error from Silver Doctors. They have done this nonsense before so I don't think they are an accurate source of information as they do not correct errors when they are pointed out.

Nov 3, 2012 - 3:49pm

Sandy, Bernanke and Money

A lot of good info. Speaks to TF's big picture stuff from the thread starting with the Sandy storm

I would further argue that exorbitant costs are an important reason why more was not done to protect against a major Atlantic storm. The piper will now require payment. Our economy’s entire resource allocation system has been so distorted for too long. Finance flowed way too easily into home building, recreation and consumption. Our nation’s infrastructure has been badly underfinanced and neglected. This was made sadly clear with Katrina and again with Sandy. Our nation’s power grid is a bad joke........

After beginning 1990 at $12.8 TN, Total System Marketable Debt ended June 2012 at $55.0 TN. And Washington politicians and central bankers are doing everything they can to sustain the Credit boom and avert the downside of an historic Credit cycle. Similar efforts are afoot globally. In Europe, we are witnessing the dire consequences unleashed when the markets resist buying suspect Credit instruments. And, importantly, when the Credit spigot is inevitably tightened, economic revelations soon follow. Suddenly, economic structure matters. Is the system generally robust or fragile? And if the economy proves fragile, the systemic predicament will soon be compounded by huge debt and confidence issues.

For the Week:

The S&P500 increased 0.2% (up 12.5% y-t-d), while the Dow slipped 0.1% (up 7.2%). The Morgan Stanley Cyclicals jumped 2.4% (up 15.0%), and the Transports gained 1.1% (up 1.8 %). The Morgan Stanley Consumer index was unchanged (up 9.6%), while the Utilities fell 1.1% (down 0.8%). The Banks were up 1.7% (up 27.2%), and the Broker/Dealers rose 2.0% (up 3.3%). The S&P 400 Mid-Caps gained 1.3% (up 12.4%), and the small cap Russell 2000 added 0.1% (up 9.9%). The Nasdaq100 was down 0.4% (up 16.6%), while the Morgan Stanley High Tech index gained 0.8% (up 10.4%). The Semiconductors rallied 1.4% (up 2.2%). The InteractiveWeek Internet index rose 1.0% (up 9.3%). The Biotechs declined 1.1% (up 29.4%). With bullion down $33, the HUI gold index sank 3.4% (down 4.9%).

Currency Watch:

The U.S. dollar index gained 0.7% to 80.59 (up 0.5% y-t-d). For the week on the upside, the Norwegian krone increased 0.6%, the South Korean won 0.6%, the New Zealand dollar 0.3%, the Canadian dollar 0.1%, and the Taiwanese dollar 0.1%. For the week on the downside, the South African rand declined 1.5%, the Japanese yen 1.0%, the Danish krone 0.8%, the euro 0.8%, the Swiss franc 0.6%, the British pound 0.5%, the Mexican peso 0.4%, the Australian dollar 0.4%, the Singapore dollar 0.3%, the Brazilian real 0.2%, and the Swedish krona 0.1%.

Commodities Watch:

The CRB index declined 1.5% this week (down 4.3% y-t-d). The Goldman Sachs Commodities Index fell 2.0% (down 2.9%). Spot Gold was hit for 1.9% to $1,678 (up 7.3%). Silver sank 3.7% to $30.86 (up 11%). December Crude declined $1.42 to $84.86 (down 14%). December Gasoline dropped 2.6% (down 3%), and December Natural Gas sank 4.6% (up 19%). December Copper fell 1.9% (up 1%). December Wheat was little changed (up 32%), while December Corn added 0.2% (up 14%).

Global Credit Watch:

October 31 – Bloomberg (Jeff Black): “The European Central Bank said euro-area banks increased tightening of credit standards to businesses in the third quarter and expect a similar degree of tightening in the fourth. ‘The impact of risk perceptions on the net tightening of credit standards increased in the third quarter of 2012 compared with the previous quarter,’ the… ECB said… For the fourth quarter, ‘banks expect a similar degree of net tightening in credit standards for loans to enterprises and households,’ it said. Lending to households and companies in the euro area contracted at the fastest pace in almost three years in September as the 17-nation currency bloc teetered on the edge of recession.”

November 1 – Financial Times (Peter Spiegel and Kerin Hope): “The magnitude of Greece’s fiscal challenge was painted in sharp relief on Wednesday as Athens unveiled new budget projections exceeding the worst-case scenarios envisioned by international lenders when they agreed a €174bn rescue eight months ago. Instead of Greece’s debt peaking at 167% of economic output next year, as predicted in the March bailout agreement, it will hit 189% and climb to 192% in 2014… The new projections all but dash hopes that Greek debt will come down to 120% of GDP by 2020 – once held out as the standard for a manageable debt load… The scale of the faltering has yet again put Germany and other eurozone creditors in a political quandary, forced to come up with as much as €30bn in new funding to meet Greece’s needs…”

November 1 – Bloomberg (Ben Sills): “Prime Minister Mariano Rajoy’s hesitation in triggering European Central Bank bond purchases may cost Spain its investment-grade credit rating. Rajoy, who yesterday portrayed indecision as a virtue, risks seeing Spain downgraded to junk unless he requests European support, Moody’s… said… The nation’s bonds, which yield 5.61% for 10 years, are graded one step above junk with a negative outlook. A junk credit rating would cut Spain’s access to funds from investment managers who avoid riskier credits, making it more difficult for Rajoy to haul the nation out of its financial hole. It also may undermine his resistance to a rescue, forcing Spain to negotiate a deal from a weaker position. ‘The longer Rajoy waits to ask, the more likely it becomes that Spain gets downgraded to junk and all of the economic problems that go along with that,’ Dominic White, chief European economist at Absolute Strategy Research Ltd. in London, said…”

Germany Watch:

November 2 – Bloomberg (Nicholas Comfort): “Charging the European Central Bank with overseeing German savings and cooperative banks won’t serve financial stability in Europe, according to a leading member of Chancellor Angela Merkel’s Christian Democratic Union. The European Commission’s plan for the ECB to supervise all of the more than 6,000 euro-area banks isn’t appropriate, David McAllister, prime minister of the state of Lower Saxony, said… Germany’s upper house of parliament, the Bundesrat, adopted a critical position toward the plan… European leaders are wrangling over how to set up a joint bank regulator as they seek to break the link between governments and lenders to ease the sovereign debt crisis. Germany’s more than 420 savings banks are pressing for only Europe’s largest banks to be subject to ECB oversight.”

October 30 – Bloomberg (Brian Parkin and Tony Czuczka): “German Chancellor Angela Merkel’s government said it is willing to consider a European Central Bank proposal for a buyback of Greek debt, as it stepped up opposition to imposing more losses on Greece’s creditors. A restructuring of Greek sovereign debt held by its public sector partners ‘is out of the question’ for Germany and ‘not in Greece’s interests,’ Steffen Seibert, Merkel’s chief spokesman, told reporters…”

Global Bubble Watch:

October 30 – Bloomberg (Matt Robinson): “Federal Reserve Chairman Ben S. Bernanke is fueling a record-long winning streak in corporate debt as the money he pumps into the economy spurs investors to seek riskier assets to generate returns. Bonds sold by companies around the world, from the neediest to the most creditworthy, are on pace to generate 11 straight months of positive returns, bringing gains over the period to 12.9% through Oct. 26… After four years of holding its main interest rate at about zero, Bernanke said in September he expects no change in policy through mid-2015 to complement $40 billion of monthly mortgage-bond purchases… With central banks across the world using similar strategies, investors have turned to corporate debt…”

November 2 – Bloomberg (Krista Giovacco): “Loans obtained in the U.S. by speculative-grade borrowers have risen to $233 billion, surpassing 2011 levels as investor demand for debt with the highest claims on a company’s assets grew amid fiscal uncertainty and a struggling global economy. Companies… in October got more than $47 billion of the debt that was sold to non-bank lenders, such as collateralized loan obligations and hedge funds, the most in 20 months, according to JPMorgan… Issuance for the year is now within 40% of the records set in 2007 and 2006…”

China Bubble Watch:

November 1 – Financial Times (Simon Rabinovitch): “China’s central bank pumped a record $60bn into the country’s money markets this week in an attempt to ensure that there will be ample cash in the economy to support the government’s push for more infrastructure investment. The People’s Bank of China was continuing its pattern in recent weeks of injecting a large amount of short-term liquidity into the financial system… The previous record was set in late September, just before a weeklong national holiday when demand for cash spiked. This time, however, there was no immediate prompt for the massive injection, apart from the central bank’s determination to keep monetary conditions relatively loose.”

Japan Watch:

October 30 – Bloomberg (Andy Sharp): “Japan’s central bank said it will offer unlimited loans at low interest rates to lenders to try to boost credit demand among companies and households. The money will be for terms of up to four years… The move was alongside an 11 trillion yen ($138bn) expansion of the central bank’s main easing tool, its asset-purchase program. Japan is turning to a wider array of unconventional tools for monetary easing as the global slowdown, waning auto sales and a dispute with China set back an economy that remains mired in deflation.”

November 1 – Bloomberg (Anna Mukai): “Toyota Motor Corp., which saw September sales in China tumble the most in a decade, reported deliveries slumped for a second straight month in the world’s biggest car market as Chinese consumers shunned Japanese cars. October deliveries declined 44% from a year earlier to 45,600 vehicles, Asia’s largest automaker said… That follows the 49% drop in September…”

European Economy Watch:

October 31 – Bloomberg (Simone Meier): “The euro-area jobless rate climbed to a record in September as the fiscal crisis and tougher austerity measures threatened to deepen the economy’s slump. Unemployment in the 17-nation region rose to 11.6% from 11.5% in August… The data also showed that youth unemployment is at 23.3%, with Spain’s rate more than double that, at 54.2%... Economic confidence in the region fell in October, according to a report yesterday, while data today French consumer spending rose less than economists forecast in September.”

October 30 – Bloomberg (Rudy Ruitenberg): “World wine production is forecast to fall 6.1% in 2012 with output down in France, Argentina, Hungary and New Zealand, the International Organisation of Vine and Wine said… Wine production in France, the biggest supplier, may slump 20% this year to the lowest in at least four decades after winter drought, cold and wet weather, hailstorms, a heat wave, and summer dryness damaged vineyards, according to the country’s Agriculture Ministry.”

U.S. Bubble Economy Watch:

October 30 – Bloomberg (Simon Kennedy): “The U.S. slid from the top ten most prosperous nations for the first time in a league table which ranked three Scandinavian nations the best for wealth and wellbeing. The U.S. fell to 12th position from 10th in the Legatum Institute’s annual prosperity index amid increased doubts about the health of its economy and ability of politicians. Norway, Denmark and Sweden were declared the most prosperous in the index… With the presidential election just a week away, the research group said the standing of the U.S. economy has deteriorated to beneath that of 19 rivals. The report also showed that respect for the government has fallen, fewer Americans perceive working hard gets you ahead, while companies face higher startup costs and the export of high-technology products is dropping.”

November 1 – Bloomberg (Noah Buhayar): “Sandy, the Atlantic superstorm that caused flooding, damage and blackouts throughout the U.S. Northeast this week, may lead to higher insurance rates and tighter terms in the affected areas. Carriers that underwrite business property may be ‘pushing rates’ in the aftermath of Sandy, said Al Tobin, managing principal of the property practice at Aon Risk Solutions… ‘I also suspect they’re going to be looking hard at deductibles’ and limiting the amount of flood coverage they write, Tobin said…”

November 1 – Bloomberg (Susanne Walker): “Bill Gross, who runs the world’s biggest mutual fund at Pacific Investment Management Co., said there is no evidence that investments is being incented by the Federal Reserve’s quantitative easing program. ‘All of the money being created and freed up is elevating asset prices, but those prices are not causing corporations to invest in future production,’ Gross wrote in a monthly investment outlook… Lower interest rates are being used ‘to consume as opposed to invest,’ he said.”

Central Bank Watch:

November 2 – Financial Times (Jeff Kearns): “Federal Reserve Bank of San Francisco President John Williams said the central bank should extend its program of bond purchases into next year by buying both mortgage-backed securities and Treasuries. ‘We should continue the MBS purchases into next year and continue the Treasury purchases,’ Williams said… ‘I haven’t seen the kind of improvement in labor-market conditions that would call for ending the MBS purchases.”

Muni Watch:

November 2 – Bloomberg (Darrell Preston): “Local-debt investors absorbing the steepest annual issuance jump in almost a decade are bracing for added sales to pay for damage that Hurricane Sandy caused to the New York metropolitan region. From New Jersey coastal towns where the storm hit Oct. 29 to the area’s transit network, investors are tallying the costs. The New York vicinity’s public-transportation infrastructure, including the city’s 108-year-old subway system, may suffer $10 billion in physical losses from a storm such as Sandy, and the transit tab may reach eight times that amount when including the economic impact, according to a 2011 state study. That compares with a $100 billion loss for Hurricane Katrina in 2005.”

Silver Alert
Nov 3, 2012 - 3:52pm

The difference between the parties

If the Republicans win, liberals will riot because they lost.

If the Democrats win, liberals will riot anyway.

Keep prepping.

Nov 3, 2012 - 3:54pm

my paid phD guy who is good

"What mattered yesterday was that immediately after the jobs number was announced, practically all of the gold traders turned cautious, pulled their orders and moved to the sidelines. This caused the price of gold (the metal) to drop below 1700 which started to trigger the massive stops that were placed just below the 1700 level. Once 1696 was breached, the market went into free fall as stops continued to trigger until the market found support at 1678. There is solid support at 1650, but because of what happened on Friday, I don’t believe the market will drop to those levels. I believe what happened on Friday was an anomaly, and will soon change, with asian buying monday and surely before end of week.So, because I don’t see anything in the election process that will stop the printing presses, and because of huge foreign demand, I continue to believe that gold prices will be pushing the 1800 level before long, with a good possibility that this will occur before years end. And once this happens, I believe we will be looking at $2,000 gold fairly quickly"

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