Outside Reversal Week

Sat, Nov 10, 2012 - 12:43pm

Longtime Turdites understand the significance of an "Outside Reversal" or "Engulfing" pattern. On the daily chart, an ORD has proven to be a very reliable indicator of a change of trend and momentum. When you get one on a weekly chart...

First, for the uninitiated, here's a definition from Investopedia:


As you might imagine, I have a good reason for bringing this to your attention. After all the dust settled yesterday, we are left with ORDs on both the gold and silver weekly charts. Taken by itself, of course, this is just one indicator of potential gains to come. Throw in the dynamic fundamentals as we close 2012 and head into 2013, and we've got plenty of reason to be excited. If you haven't yet bought this recent dip, you should probably consider doing so in the very near future.

And it's not just the weekly charts that look compelling, check out these daily charts:

As we break it down further, check out how pretty these 8-hour charts are. The sellstop-running plunges of 11/2, followed by the quick reversals and now the breakouts bode very well for next week and beyond.

And even the 2-hour charts look pretty salty. Let's see how long these short-term trends can continue next week:

All-in-all, confidence is extremely high that the month-long pullback in the metals is over. I expect a rally from here through the end of 2012 and I am anticipating an exciting, unprecedented and historic 2013.

From a news standpoint, I trust that most of you have already seen this. Just in case, though, here's a link. Add another log to the fire regarding the leased, hypothecated, gone for good German tungsten gold.


And I first published a link to this story on Thursday. Fortunately, in case you missed it, The Doc and DenverDave are all over it for you. https://www.silverdoctors.com/new-royal-canadian-mint-silver-etr-is-just-another-fractional-bullion-scam/

Lastly, we wrapped up our 2nd Anniversary Hat Contest yesterday and the winners are:


The Dec 12 settled at $1730.70 and "worldend666" edged out "mapleleaf" by a whopping 18 cents! Worldend guessed $1730.00 and Mapleleaf had $1731.58. WOW!!!


Here Mapleleaf got his/her revenge with a guess of $32.67. The actual close was $32.62. Very impressive!!


Crude settled at $86.07 and the winner, with a guess of $86.00, was "delric". Good job!

Congratulations to all three winners. Please email me your shipping information at tfmetalsreport at gmail dot com and I'll ship you your very own autographed, genuine and authentic Turd Hat.

I hope that everyone has a safe and restful weekend. Get ready for an exciting week next and a very fun end of the year!


About the Author

turd [at] tfmetalsreport [dot] com ()


Nov 11, 2012 - 3:58pm

Ok then think of this

Money has 3 parts: Unit of Exchange (UOE), Unit of Account (UOA) and Store of Value (SOV).

The UOE and UOA can both be soft money or dollars, the problem comes only when the same $ is used as a SOV also. That is where physical gold is what you want. Once that happens, central banks are meaningless as their printing becomes counter-productive, and stability will become in everyone's self interest. You are missing the forest for the trees.

"Hard Money" insists that SOV be the same as UOE/UOA (Hard, Physical things) which never works because it can be manipulated and results in other problems that the soft money people are correct on. It stymies growth when growth is needed for new innovations or opportunities.

"Soft Money" insists that the SOV be the same as well, only this time it is completely unlinked to hard assets, allowing it to be inflated and manipulated and getting us where we are today.

History is replete with Hard -> Soft -> hard and so on, each with terrible hardships endured by all.

The key is to have a SOV divorced from the UOE/UOA and this will happen when the dollar loses its reserve status. I don't have to convince anyone, and governments will be powerless to stop it. If they make laws against it they will economically die and it will be short lived.

Nov 11, 2012 - 4:11pm

You should read it and spend the time

It is worth your time. Try the last post and move along to different parts as need be. This post has particular importance as it relates to what you say above about hard money and banks and bad conclusions:


Here is an excerpt but it is not enough on its own:

Banks facilitate the fungible exercise and circulation of credit. If I have plenty of credit, I can walk into any bank and get a loan. Then I can spend that loan and my credit (money) will begin to circulate throughout the economy as a medium of exchange. But if I am to accept that money is actually some tangible wealth reserve item, then I have to be skeptical about the source of that bank loan.

If, on careful examination, the bank has less of these physical wealth items in reserve than it has in outstanding liabilities, I might craft the common description of fractional reserve banking to explain what I found. This would lead me to the cynical notion that banks are somehow cheating by counterfeiting the real money that they have on deposit or in reserve. It would probably just remain my theory until some sort of crisis happened, and then it could mature into an outright accusation of fraud.

Reserves, of course, have always been vital to the business of banking. They are how banks settle up amongst themselves, and in the case that a bank customer decides to transact in a distant land outside of his local system of bank settlement (or locally in a black market), reserves are what the bank gives the customer to take with him. But this idea that the reserves are the real money and the credit is some sort of counterfeit or fraudulent money leads to horribly wrong conclusions and destructive prescriptions whenever a banking crisis occurs.

There is a big hump to get over here if you are in the hard money camp. Simply, get over this idea that banks need to have something to lend. This is the faulty premise: that banks lend something to the borrower. They do not. The borrower already has the credibility, the credit, and the banks are simply facilitating the exercise of that credit so that it can be used in transactions, and so that the counter party to those transactions doesn't need to understand the borrower's credibility. The bank has already verified it and now stands behind it. This is the very the essence of money.

In fact, banks are not (and should not be) constrained by the amount of reserves or capital/equity they have. But that's not to say they are not constrained. They are, just not by reserves and capital as this faulty premise leads some to believe. Instead, they are profit constrained; they want to make a profit. And because of this, they are experts at verifying credit and managing their reserves.

I realize this is difficult to see given the current state of the modern banking and financial landscape, but worse, it is impossible to see without a proper perspective on money. Without a realistic view of money, a proper understanding of banking is impossible. And without that, if you happen to be one of the few with the drive to be heroic, you'll be spinning your wheels on "solutions" (prescriptions) that range from useless to disastrous.

I'm not describing the current state of banking. I am describing the timeless state of the emergent banking model. There is nothing wrong with it. You can hang bankers from lampposts and rage against "fraudulent thin air debt-based money" and "fractional reserve lending" all you want, but that will do nothing heroic. The solution to this crisis is already unfolding, and anything short of relaxing in your lawn chair and explaining the show to your neighbors while watching it unfold is the opposite of heroic.

Nov 11, 2012 - 4:13pm

We are not

the only ones noticing the west to east shift of precious metals:


If I had surplus dollars I'd be adding to the stack too...

Nov 11, 2012 - 4:16pm

Who will deny the governments

Who will deny the governments the right to debase gold based monetary system? The same story about compound interest, inflation. That has happened zillion times in history, will happen again, especially as the empire gets ineffective in its increased complexity but needs to fight for survival of elites. No stability guaranteed at all. Or? Probably you speak about Freegold, I have not been able to find a short definition of how that is supposed to work.

Ops, there was edit.

USD will not lose the reserve status without fierce fight, not only laws. It may not last for 300 years, but definitely will another 20 years. The military might that has been amassed by printing USD and paying with them for real stuff will not just stay there watching the demise of the USD. There are also ways that could lead to world paper currency once the empire is ONE- efficiency maximized when resources are dwindling. Logical outcome.

The power of markets are ... a bit of an exaggeration to my mind. Markets can be manipulated, taxed, fixed, skewed , monopolized , barriers made, liquidated etc, as long as needed. It is a vain hope that markets will put everything into right order NOW and fast. The invisible hand was visible for a short time in 19th century until the elites figured out how to control it.

القراع عصفورMr. Fix
Nov 11, 2012 - 4:16pm

no offense Mr. Fix, but I disagree totally.

the IU feature does not work. here's my logical rebuttal. Turd wants to grow his site. he needs readership for ad revenue. a person that just discovered this site, does not have the IU user feature yet. he is going to see all this fighting, racism, intolerance, politics, and just say, "no thanks".

and these trolls use multiple aliases to smother a site. they stage a lot of this conflict amongst themselves. they don't need any input from the good guys at all to ruin a site. it is their strategy to ruin TFMR. i want everybody to read the end of the Blythe thread, starting with my resurrection:-)

did i say anything over the top. would you consider the behavior of the trolls overkill? would you want your Mom to read some of that?

i might as well tell everybody that i have been exposing trolls for years on the YAHOO boards, which, by the way, they have purposefully destroyed. anything to hinder community, discovery, and human evolution, is what these bastards want. by the way, i am also an expert on sociopaths.

i can be a tremendous positive to TFMR, but you guys will need to wake up, and then ask the right questions. i can assist. again i implore you all to read up on sociopaths.

Nov 11, 2012 - 4:40pm

@silver66 FOFOA is advocating a paper system

Don't let the 'gold' in his Free Gold fool you. He's suggesting a paper plus gold system that can easily be abused into the same system we have right now. He's merely dancing on the string held by bankers.

Nov 11, 2012 - 5:30pm

wow, dryocopus,

we are so honored that you have blessed us with your presence.

Nov 11, 2012 - 5:35pm

I especially like the Royal Bank of Scotland model:

21 Economic Models Explained

You have 2 cows.
You give one to your neighbour.

You have 2 cows.
The State takes both and gives you some milk.

You have 2 cows.
The State takes both and sells you some milk.

You have 2 cows.
The State takes both and shoots you.

You have 2 cows.
The State takes both, shoots one, milks the other, and then throws the milk away.

You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy grows.
You sell them and retire on the income.

You have two giraffes.
The government requires you to take harmonica lessons.

You have two cows.
You sell one, and force the other to produce the milk of four cows.
Later, you hire a consultant to analyze why the cow has dropped dead.

You have two cows.
You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on one more.
You sell one cow to buy a new president of the United States, leaving you with nine cows.
No balance sheet provided with the release.
The public then buys your bull.

You have two cows.
You go on strike, organize a riot, and block the roads, because you want three cows.

You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk.
You then create a clever cow cartoon image called ‘Cowkimon’ and market it worldwide.

You have two cows.
You re-engineer them so they live for 100 years, eat once a month, and milk themselves.

You have two cows, but you don’t know where they are.
You decide to have lunch.


You have two cows.
You count them and learn you have five cows.
You count them again and learn you have 42 cows.
You count them again and learn you have 2 cows.
You stop counting cows and open another bottle of vodka.

You have 5000 cows. None of them belong to you.
You charge the owners for storing them.

You have two cows.
You have 300 people milking them.
You claim that you have full employment, and high bovine productivity.
You arrest the newsman who reported the real situation.

You have two cows.
You worship them.

You have two cows.
Both are mad.

Everyone thinks you have lots of cows.
You tell them that you have none.
No-one believes you, so they bomb the crap out of you and invade your country.
You still have no cows, but at least you are now a Democracy.

You have two cows.
Business seems pretty good.
You close the office and go for a few beers to celebrate.

You have two cows.
The one on the left looks very attractive.

Nov 11, 2012 - 5:49pm

from Malalysia. Gold sewn in hems, always fashionable:

Gold, That Fascinating Yellow Metal Posted on 12 November 2012 - 05:37am

By Pong Teng Siew

I DO NOT doubt gold's stature as an almost universal form of store of value. One incident related to me a long time ago by a friend underscored this.

Almost four decades ago, with the end of the Vietnam War came a small flood of Vietnamese refugees and some headed for our shores enroute to one developed country or another willing to accept them. When they landed here, some were able to purchase provisions to continue their journey. If they had to pay for purchases with something that was accepted here, what would that be? Certainly not with Vietnamese currency. Instead, sewn into the hem of their clothes was gold.

Its use in as money all through history has been helped along by this kind of universal acceptance. It does not rust and is thus durable. And most of all, it was a very good store of value all through history. So good that the token and fiat money that became more commonly used eventually had to be pegged to gold so as to buttress their role as store of value.

More recently, what had been a reasonably good internationally accepted store of value, the US dollar (and by inference, all national currencies currently in issue due to the US dollar's stature as the most important reserve currency against which all currencies are valued) has become increasingly inept in this role....


Nov 11, 2012 - 5:51pm

re FOFOA and Central Banks

Agree. I have had odd conversations with the FOFOA crowd - the belief in free gold denies the problem of taxation, which is why governments insist on a monopoly on the creation of 'money'. And it seemed that when I scratched the surface, I hit a banker.


edit: I should have said "I sniffed a banker".

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