Patiently Waiting

Wed, Nov 21, 2012 - 10:27am

I'm expecting a big December and an historic 2013. First things first, though, as we wait out December option expiration and the concurrent "Iron Dome" capping.

So, we sit. And wait. And wait some more. Who knows, maybe your Local Coin Shop will offer some Black Friday premium discounts? If so, take him up on it. Keep stacking and accumulating as much, much fun lies ahead.

For now, it's all about capping and controlling price through December option expiration day next Tuesday. Here are the two, major forces in play:

  1. Open interest in the Dec12 call options is enormous. As "StevenBHorse" kindly pointed out for us yesterday, there are currently 61,523 open contracts between 1735 and 1800. As Ruprecht would say: That's a lot. Of particular interest to The Gold Cartel is the startling 32,537 calls at the $1800 level. I would venture a guess that most of these positions were opened back in late September as nearly everyone (including yours truly) felt assured that, with the onset of QE∞, gold would be somewhere north of $1800 by Thanksgiving. Considering that every dollar above $1800 means $3,250,000 in option payout, the October beatdown from $1795 to $1690 seems rather predictable in hindsight.
  2. Both gold and silver are currently trading above every single one of their moving averages except one...the critical 50-day. The 5-day and 10-day are important, don't get me wrong. And the 200-day will almost always provide predictable support or resistance. The 50-day, however, is the biggie. Having price above or below the 50-day is one of the major determining factors as to whether or not the momo-chasing, HFT algos will be in buy mode or sell mode. At this juncture, a move UP and through the 50-day MAs will provide the final impetus for rallies back to $35-36 in silver and $1800 in gold. As I type, the 50-day MA in the Dec12 gold contract is at $1743.30 and the 50-day in the Dec12 silver is at $33.24.

So, what happens the rest of today and Friday? Probably not much. Just more of the same. HFTs are trolling for stops to harvest on either side so we'll likely continue to see trading in a very tight range.

The only possibility for "fun" might come early next week. Recall how those who are short calls or puts are often manipulated and gamed ahead of option expiry. For next week, the most likely possibility would be a squeeze of those who are short the $1750 calls...if there are a significant amount...and it's impossible to tell. If this happens, though, we'd see a quick spike toward $1750, followed by a further rally through $1750 as those who are short the 1750 calls panic and are forced to buy a futures contract in order to hedge. After a move to $1755 or so, gold would then revert back toward $1740-45 with the sheep having been successfully shorn. The open interest at 1750 may not be sufficient enough for this happen but we'll see. Keep an eye out, anyway.

Here are two current charts. Outside of another "Swiss Stair" accumulation pattern in silver, there's not a lot going on. That will soon change.

And, finally, it's the day before the Thanksgiving holiday here in the U.S. This means it is once again time to reprint one of my favorite posts, "Absolute Advice For Relatives". I wrote this two years ago, right after the onset of QE2. Though we've yet to see the extreme price inflation I was expecting, there can be no argument that the advice is still solid. (I mean, seriously, have you done your Thanksgiving grocery shopping yet? Sheesh!!)

Happy Thanksgiving, everyone. Be sure to check back later today for a very important guest post update.


Absolute Advice For Relatives
If you're like The Turd, you will most likely get peppered tomorrow with questions from pseudo-intellectual relatives regarding the current world/market environment. Your over-educated yet under-informed cousin or brother-in-law will seek out your current "wisdom" on investing, politics, etc. He or she will then feign interest while you speak but you will feel certain that, in the end, they just don't "get it" as your absolute conviction overwhelms their status quo mindset. You could probably talk for hours about the failure of Keynesianism, Quantitative Easing, the criminal political class, the fallacy of TBTF, POMO and the PDs, the infallibility of gold, etc...but why even try? Your cousin's husband doesn't understand any of this anyway and your show of intellect will only make him feel threatened. He'll quickly tune you out and run off to the family room to watch the Cowboys.

So what do you talk about tomorrow when someone asks? What kind of simple advice can give someone to prepare them for what is certain to be a very challenging year ahead? I plan to dial it back a bit and talk about one thing...inflation. And not just any old, run-of-the mill 3% inflation but serious inflation. I'm talking 20-30% inflation. Milk to $5/gallon kind of stuff. That is what's coming and its a topic most folks can actually get their arms around. Even the fuzzy-headed new boyfriend of your divorcee sister understands inflation and he might even be able to understand why its coming if you explain it well. (This is a chance for you to show off some of your worldly knowledge, too.)

Most folks with a high school-level understanding of economics (this includes your Fed governors) only understand and recognize demand-pull inflation. This is the classic demand side, Phillips Curve inflation that says rising wages, employment and wealth cause economic expansion which leads to more money chasing a static amount of goods. New, excess demand "pulls" prices up and the result is price inflation. Pretty simple stuff. What is coming in 2011, however, is the forgotten beast of cost-push inflation. This type of price inflation is caused by producers and merchants being forced to pass along through higher prices the rising cost of inputs to their products. Consumers, particularly the lower-and-middle income, bear the brunt of the pain. Your income isn't rising to keep pace with rising expenses and you get squeezed. Hard. And its not luxury items that are going up in price, its the staples. Bread, milk, gasoline, clothes, eggs, meat...the basics that no one can realistically live without. It's going to hurt and 2011 is going to be a mean year.

Why will input costs go up? Simple, they are all dollar-dominated and with our Fed now engaging in their final policy option, "QE to Infinity", all dollar-dominated assets are going up in price. Significantly. Your crazy uncle Henry may never take your advice to sell his stocks and buy precious metals but he just might take your advice to stock up now on essentials, before the prices skyrocket. Tell him that if he's going out to buy a new pair of pants, he should buy two. Tell your sister that instead of just buying her kids' winter coats for this year, she should buy coats for next year, too. Tell your cousin that instead of buying groceries every week to, instead, buy a whole dressed-out cow and put it in the freezer along with all the other dried and canned goods she can store.

Still, most crazy relatives won't listen but at least, come next Thanksgiving, they'll remember that you were right. One down side, however. Because you'll end up being the only member of the family that will have prepared and, most likely, the only one with affordable food to eat, you'll probably have to host everyone at your house next Thanksgiving. Oh well, there's a cure for that, too. Wine. Lots and lots of wine. Keep a couple of good Pinots on reserve and you'll be able to handle just about anybody.

About the Author

turd [at] tfmetalsreport [dot] com ()


Nov 23, 2012 - 12:47pm

Bad day to be short

Ouchy those shorts must be hurting... must be running a few stops on their side

Nov 23, 2012 - 12:48pm

Black Friday

Is aptly named... Its a dark time on the American landscape...

For those celebrating today's exciting chart moves, I refer you to Turd's post above. Looks to me like a setup for exactly what he describes with the spark being another high correlation day. Calm heads prevail. Then again I may just be pessimistic because some jerk decided he needed my flatbed trailer more than I did last night.

Nov 23, 2012 - 12:52pm

What In The...

...Wide Wide World of Sports Is'a Goin' On Here!?

What in the Wide, Wide World of Sports?.mp4
I wake up a little late today w/ a severe turkey and gravy hangover and the Phyzz is off to the races! Happy Friday all...keep'a stackin' no matter what!
Nov 23, 2012 - 1:05pm

Thursday, November 22,

Thursday, November 22, 2012

How 6 International Private Banks Control The World

All the Roads end up leading to one family and one family only : The Rothschild , The Rothschild have obtained their position through lies, manipulation and murder. Their bloodline also extends into the Royal Families of Europe, and the following family names: Astor; Bundy; Collins; duPont; Freeman; Kennedy; Morgan; Oppenheimer; Rockefeller; Sassoon; Schiff; Taft; and Van Duyn. The ouroboros of incorporated robbery integrates within the compartmentalized social pyramids, as the archaeology of banking, etc. It IS IMPORTANT to remember that the shares of the biggest banks are now mostly owned by the collective government mandated groups. Walter Burien's, et alia, CAFR research reveals that the Biggest Banks, that ARE so powerful, ARE owned mostly by the hordes of various "funds" that gained their power from governmental mandates! Sheeple are more the problem than wolves.

A look at the International Banking Cartel led by the Bank for International Settlement (in Basel, Switzerland) known as the bank of central banks (58 central banks) and The US Federal reserve System. Also a look at banking tycoons: from the Rothschild family in Europe to JP Morgan and others in the US. How banks not only control governments but also appoint politicians through huge campaign donations. Governments at the service of the major banks, the best example: the Obama administration and the history's biggest bail out of the same institutions that caused the Great Recession.

Nov 23, 2012 - 1:07pm

And closing out the weekly chart

Looking positive to me...

Nov 23, 2012 - 1:35pm

Why pay taxes?? / Huge increase in circulating $100 bills

Two articles, too good not to share. Apologies if either were already posted...

Economic IQ test: If the national debt doesn't matter, then why are we still paying federal income taxes?

( ) Be sure to follow the "tax farm" link therein, as it leads to an light Roman history lesson.

The author's conclusion won't surprise anyone here at TFMR.

$100 Bills Make Up 80% of All U.S. Currency—but Why?


An increase from 50% in 1990 to >80% now. Where is this mountain of money?!?

Nov 23, 2012 - 1:42pm

"Patiently Waiting"...for delivery of bullion

Hmmm, can't imagine why.../s



Delays in Bullion Delivery

By Patrick A. Heller
November 19, 2012

In the past week, I have seen postings and received a growing number of reports of coin dealers selling out of physical gold and silver coins and ingots and having trouble getting in quick replacements. At the most extreme, a buyer in a western state was told by two local dealers from whom he has made purchases that Canada gold Maple Leaves and South Africa Krugerrands are now at least two weeks delivery after payment and that U.S. 90 percent silver coin could take as long as 4-5 weeks to get.

My company has fairly deep inventories on hand, so have been able to deliver pretty much all product immediately or only after a short delay thus far. However, September was our highest sales volume month so far in 2012, which record was then surpassed in October. November sales thus far are well ahead of October’s pace. Combining this information with what other dealers and would-be purchasers are reporting, it seems that there is a definite uptick in customer demand in the United States.

read more:

Nov 23, 2012 - 1:51pm

Falling USD PMs Up

Most of this action today looks like a loss of USD strength rather than anything else in regards to silver. Gold on the other hand is outpacing silvers rise by .007% so there is a bit of extra buying taking place.

Surfing through the news this prompted a physical response, in the past I have done this and from now on I amy have to lie about what the loan is for.

Indian Banks Banned from Lending for Gold Purchases

India's central bank meantime has banned banks from lending money for the purposes of buying gold.

"It is advised that no advances should be granted by banks for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold Exchange Traded Funds (ETF) and units of gold mutual funds" said a statement issued by the Reserve Bank of India Monday.

Katie Rose
Nov 23, 2012 - 2:11pm

A Thanksgiving Surprise

I stay out of the kitchen on Thanksgiving. It is not my domain. It is not a safe place for me to be when major cooking is happening. My sister used to have a gourmet food business, and on Thanksgiving I run for cover. So imagine my surprise when I sat down to eat and noticed that the menu was different this year.

- turkey - home grown and beyond delicious. He provided 50 pounds of meat, more than my Icelandic lamb! He was one ugly boy...

- squash - home grown and mouth watering good

- potatoes - from our garden. Yum! Yum!

- green beans - so tender, I planted and harvested them myself

- cherry/berry jelly - a substitute for cranberry sauce, home canned, and home grown

- fancy raspberry jell-o - our berries

- apple pie - apples from our 80 year old tree

- cheddar cheese spread - from my goat's milk, just too tangy for me, but everyone else loved it.

This is the very first year that nearly everything we ate came from our land. Our attempt at perma-culture with wheat was a terrible flop. The quail found and ate all the wheat seed. That's why I said "nearly everything" we ate came from our land.

I'm thinking that is pretty darn cool! This old hippy is back in the garden and loving it very much.

Now if the Feds would just leave WA State alone so I can legally grow some marijuana, I will be one very, very happy/thankful woman!

Nov 23, 2012 - 2:16pm

$100 Bills Make Up 80% of All U.S. Currency—but Why?

So, if you had $1000 in your wallet, it could be 8*100, 2*50, 2*20, 5*10 and 10*1 - total 27 bills, 80% of the value being 100s, but only 30% of the bills are 100s, so what exactly is the headline saying? 80% of the bills out there are 100s, or 80% of the value is in 100s?

Nov 23, 2012 - 2:30pm

I am rolling a donner kebab joint at the moment

One of life's little pleasures.

Why though so much meat and skimp on the salad!

Oh well off for some more chilli sauce.

PS is the US markets closed on Monday? and option expiry Tuesday?

Nov 23, 2012 - 2:34pm

Steve Keen on private money creation...

... and the myth of fractional reserve lending.

Video unavailable
Torpedo Fish
Nov 23, 2012 - 3:00pm

PM sale next week?

I am going to open some shorts here at $34.05 - 20% of all the longs I currently have.
My reasoning for that is just my gut feeling about EUR/USD 1.2974, it just feels too high. I hope Harvey is right and we get a smack down next week. I will load 50% more longs if silver goes below 33.50

Norman Finkelstein is da man:

Nov 23, 2012 - 3:03pm

@Katie Rose

50 pound turkey???

Please post a photo! I didn't even realize such a thing was possible until I read your post and googled it!

I wanted to thank you, by the way, for your great questions to Lindsey Williams on the radio show the other day. You got him to answer questions I've had for a very long time. You are a gem!

Nov 23, 2012 - 3:21pm

Free Range turkey

we bought one from a local co-op. We've been making turkey with the same recipe for 15 years, and this one was by far the best. Since it hadn't been soaked in water/brine to make it heavier, it cooked in little over half the time. The lack of hormones and antibiotics made the breast meat quite moist and tasty.

Nov 23, 2012 - 3:52pm

well done Katie Rose.  Up

well done Katie Rose. Up here on the west coast, we have been able to have a "100 mile diet" The garden is only steps away, but it is the natural organic seafood harvesting that ups the mileage. :)

JackT Antrobus
Nov 23, 2012 - 4:14pm

@Antrobus re: % of bills or % of value

Going back to the source docs @, it's the latter. The value of the currency in circulation. But the fuscha line on the other chart shows a steady decline in the printing of 10s and 20s offset by an increased volume of hundreds. So I guess the answer is "both".

The most interesting chart is the reserve bank inventory of dollar coins @ 1.42 Billion $ (a steady 10X increase from 2007!) while mint orders for the coin have fallen from steadily from 100 million-per-year to ZERO for all of 2012.

R man J
Nov 23, 2012 - 4:22pm

@achmachat re:Silverfuturist

Yes I remember his excited you tube vids every time silver went up $1 in a day. Haven't seen anything lately. I hope Jackie O didn't change his mind about silver. He was at his best when his hair was long and shaggy and he could barely contain his excitement. Maybe he'll be back when we hit triple digits.

Nov 23, 2012 - 4:51pm

Will Silver push forward in India?

Will silver push forward in India as the Reserve Bank of India closes the window to leveraged gold investments?

From The Indian Express, New Delhi
Monday, November 19, 2012

The Reserve Bank today directed banks not to give loans for purchase of gold in any form, including primary gold, bullion, and jewellery, to dissuade people from indulging in speculative activity.

"It is advised that no advances should be granted by banks for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold exchange-traded funds, and units of gold mutual funds," the RBI said in a notification."

No advances should be granted by banks against gold bullion to dealers or traders in gold if, in their assessment, such advances are likely to be used for purposes of financing gold purchase at auctions or speculative holding of stocks and bullion, it said.

However, it said banks can provide finance for genuine working capital requirements of jewellers.

Certainly this will affect the Gold market but the question arises what are the alternatives. Platinum is increasing as a favorable wedding metal due to its lower premium against gold and its relative scarcity. Palladium is another choice currently both metals have a surplus of supply extending out to September/October 2013. Silver of course must be included but for wealthier Indians that can borrow to buy Gold the likelihood is they will choose Pd or Pl over Ag due to its price.

Indians believe in showing off their wealth which is easier with the more expensive metals, show me how many people buy a $8000 necklace for their daughters wedding and pay cash for it. This is going to force buying habits to move out of Gold in a big way.

Katie Rose
Nov 23, 2012 - 4:59pm

50 lb turkey

I don't have a photo of our big, bad boy. He really was over 50 lbs! and looked like a space alien - blue face, pink gooky stuff hanging down. And he was mean.

We had 3 male turkeys and two large stalls for them. We kept the two mild mannered boys together killed the other. So gross!!! So sad!!! So unexpected!!!

We don't let the male turkeys out to free range as their behavior is so unpredictable. I do not want to be attacked by a 50 lb. turkey.

So we have learned that you never, under any circumstances, have two male animals together in the same pen or pasture, unless they have been neutered.

One of the turkeys we traded for use of a log splitter. The other we ate. If you buy one to raise, get the Broad Breasted Bronze turkey. They are sooo good and moist.

Which leads me to a total thread hi-jacker... Sorry!

I've been attempting to farm now for four years. And one thing I have learned is that male animals are monsters unless neutered. Once they are neutered they become sweet, little angels.

So I have found myself wondering many times why we, as a society, don't neuter males who commit sexual or violent crimes, or are career criminals? Seriously, we spend so much time and money prosecuting and locking them up, and then upon release, they are very often at it again.

Being around farm animals has given this city raised girl a whole new perspective on life. It sure seems to me that society would be a whole lot safer if we just sent the convicted sex offenders and those who commit violent crimes into surgery upon conviction....

My suspicion is that their behavior would change as radically as the neutered male animals on the farm do....

Nov 23, 2012 - 5:25pm


I would agree that it is much easier (and lighter) to show off gold/platinum vs silver necklaces.

As far as Indians taking out loans for an $8000 necklace... not so much. The Indians I am familiar with in the US have weddings hosting anywhere from 200 to 8oo guests. One told that he and his wife just got back from a wedding in Florence Italy. The couple who got married lived in India but wanted to be married in Italy. Not only did they host a very fancy/expensive affair, they paid for the 200 guests air and hotel for the weekend. I don't think a lot of Indians are borrowing money for wedding jewelry or the Diwali Festival of Lights.

The Death Ceiling Cononish1314
Nov 23, 2012 - 5:46pm

VAT (@Cononish1314)

If you buy from the continent the VAT is much less, have been fine, they charge 7% on silver coinage, all completely legal so you don't get hit with import duty, and postage is perfectly reasonable too. Better than our bend you over 20%. Ends up meaning you can get quality sovereign coins cheaper than generic rounds cost in the UK.

(No, I don't work for them!)

Nov 23, 2012 - 5:50pm

TGIF ~ Led 'Zep

Led Zeppelin - The Rain Song Live (HD)
Led Zeppelin - The Song Remains The Same Live (HD)

Nov 23, 2012 - 5:50pm

World's Largest Turkey's

It's a toss-up:

The biggest turkey on record was found in 1989 in Britain. Raised by Phillip Cook, he was 86 pounds, and his name was "Tyson" possibly named after Mike Tyson the boxer who was in his prime at that time. "Tyson" the turkey was sold at a charity auction for $6692 which made him also the most expensive turkey ever.

edit: I would have included Katie's, but she ate the evidence. Here's how I am sure she looked, before dinner:

Nov 23, 2012 - 5:58pm

And of course, because people are wonderfully crazy

the World's Largest Turkey Statue:

Big Tom, the World's Largest Turkey, Frazee, MN

Nov 23, 2012 - 6:09pm
Nov 23, 2012 - 6:11pm

Talking Turkey

Now, to help reign in these turkey-rustling thread-jacking Silverbugs, let me point out that Benjamin Franklin had great respect for the turkey and preferred that it become America's national bird, rather than the bald eagle.

The designer of the Franklin Half Dollar paid respect to his viewpoint and that is why the eagle on the reverse of the Franklin Half is so tiny and diminished.

Nov 23, 2012 - 6:17pm

re Ben Franklin and the Turkey

The Eagle, Ben Franklin, and the Turkey

Perhaps he was wrong, and the Bald Eagle, of "bad moral Character", who lives be "Sharping & Robbing", was well chosen:

Franklin’s Letter to His Daughter (excerpt)

“For my own part I wish the Bald Eagle had not been chosen the Representative of our Country. He is a Bird of bad moral Character. He does not get his Living honestly. You may have seen him perched on some dead Tree near the River, where, too lazy to fish for himself, he watches the Labour of the Fishing Hawk; and when that diligent Bird has at length taken a Fish, and is bearing it to his Nest for the Support of his Mate and young Ones, the Bald Eagle pursues him and takes it from him.

“With all this Injustice, he is never in good Case but like those among Men who live by Sharping & Robbing he is generally poor and often very lousy. Besides he is a rank Coward: The little King Bird not bigger than a Sparrow attacks him boldly and drives him out of the District. He is therefore by no means a proper Emblem for the brave and honest Cincinnati of America who have driven all the King birds from our Country . . .

“I am on this account not displeased that the Figure is not known as a Bald Eagle, but looks more like a Turkey. For the Truth the Turkey is in Comparison a much more respectable Bird, and withal a true original Native of America . . . He is besides, though a little vain & silly, a Bird of Courage, and would not hesitate to attack a Grenadier of the British Guards who should presume to invade his Farm Yard with a red Coat on.”
Nov 23, 2012 - 6:18pm

You're right Mammoth

and if Ben had gotten his way...... Philly would have a more appropriately named football team!

Nov 23, 2012 - 6:21pm

tough old birds

in pictures here lately.

man i am i likin our PM runup.

my PM lovin Ph.D. wave countin TA guy with an amazing record is looking for a GOOD run here or soon.

when he flashes the green light its like a done deal....he was RIGHT ON the edge this morning........i will be announcing it.

me, i'm more of a stacker.

but he is up 40% in silver in one year.....on mostly UP trades and only 6 or 8 of them



Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 3/18

3/19 10:00 ET Factory Orders (Jan)
3/20 2:00 ET FOMC Fedlines
3/20 2:30 ET CGP presser
3/21 8:30 ET Philly Fed
3/22 9:45 ET Markit PMIs
3/22 10:00 ET Existing Home Sales
3/22 10:00 ET Wholesale Inventories (Jan)

Key Economic Events Week of 3/11

3/11 8:30 ET Retail Sales (Jan)
3/11 10:00 ET Business Inventories (Dec)
3/12 8:30 ET CPI (Feb)
3/13 8:30 ET Durable Goods (Jan)
3/13 8:30 ET PPI (Feb)
3/14 8:30 ET Import Prices (Feb)
3/14 10:00 ET New Home Sales (Jan)
3/15 8:30 ET Empire State Manu Index
3/15 9:15 ET Cap. Util. & Ind. Prod.

Key Economic Events Week of 3/4

3/5 9:45 ET Markit and ISM services PMIs
3/5 10:00 ET New home sales (Dec)
3/6 8:30 ET Trade Balance (Dec)
3/7 8:30 ET Productivity and Unit Labor Costs
3/8 8:30 ET BLSBS
3/8 8:30 ET Housing starts (Jan)

Recent Comments

by braincramps, 1 hour 4 min ago
by braincramps, 1 hour 13 min ago
by scoremore, 5 hours 26 min ago
by Montross515, 5 hours 30 min ago
by streber, 7 hours 44 min ago