Rage Against The Machines

292
Fri, Nov 30, 2012 - 10:15am

In a world dominated by momo-chasing HFT computers, sometimes you've got to step back and use actual intelligence and not artificial.

As we've been discussing here for months, America is racing toward the dreaded "Fiscal Cliff". Earlier this year, the common term for this event was Taxmageddon but, apparently, Fiscal Cliff sounds more dramatic when accompanying the MSM "BREAKING NEWS" alert at the top of every hour. So, what the heck is this Fiscal Cliff stuff and why do the metals seem to trade up and down based upon whichever way the wind is currently blowing?

In its simplest terms, the Fiscal Cliff is this: If no legislative action is taken before January 1, 2013, a whole host of current tax breaks will expire. The resulting tax increase will dramatically slow the U.S. economy as tax-planning uncertainty will combine with this massive transference of wealth from the private to the public sector, making even 1% GDP growth unlikely in 2013. Additionally, Congress must once again to raise the debt ceiling from its current $16T+ level to something like $18T. Yikes!

So why is it that rumors of a "deal" tend to make gold go UP and rumors of "no deal" make gold go down? It's the WOPRs, silly. Many are programmed to buy and sell off of headlines, and for some reason, these computers are selling on every headline that suggests "no deal". But this is completely, 100% wrong and I need you to use actual, human intelligence for a moment. There are four, possible scenarios here. Let's take them one by one.

  1. No deal at all. America heads over the Fiscal Cliff. Massive tax hikes hit on 1/1/13 and, more importantly, the U.S. reaches the debt ceiling and is unable to borrow any additional funds at auction. This is wildly bullish for gold (and silver). The collapse of the U.S. economy guarantees huge, additional QE and the dollar will decline steeply in value. Lack of funding for government spending ramps up the requirement for even more dollar printing by The Fed. Gold demand also surges as countries, central banks and individuals around the world seek "safe haven" from the storm.
  2. A deal on the debt ceiling but no deal on Taxmageddon. This is also bullish for gold as The Fed will, undoubtedly, be standing by with massive QE liquidity injections in an attempt to blunt the economic slowdown brought forth by the tax hikes. Additionally, no deal on Taxmageddon means that no spending cuts were initiated. This lack of "austerity" combined with the $2T+ debt ceiling hike will almost certainly lead to another round of downgrades to the U.S. credit rating and, as we saw in August of 2011, downgrades of the U.S. are quite bullish for gold.
  3. A deal postponing Taxmageddon and no deal on the debt ceiling. This scenario plays out simply because The Congress decides to "punt" the issue and head home for the holidays, instead. They figure that Tiny Tim will figure out a way to cook the books until March or so, thereby leaving the problem for the new Congress to tackle in January. This complete disregard for the seriousness of the issue leaves S&P et al with no choice but to downgrade the credit rating of the U.S. which, as noted above, is a situation that has proven in the past to be extremely bullish for the metals.
  4. A complete deal where taxes are raised, real spending cuts initiated and the debt ceiling increased. Even this is bullish for the metals. Why, you ask? Once again, raising the debt ceiling by $2T+ is bullish. The link between U.S. debt and the price of gold is indisputable. And, again, from where will this money come? QE∞, of course. The tax increases with spending cuts is also a plan for higher gold prices as this will almost certainly slow the U.S. economy into recession and, as we know, the only monetary policy left to combat economic slowdown is the overt printing of new dollars.

So, do you see where I'm headed here? It doesn't matter! Next month, ignore the headlines and the endless MOPE and SPIN emanating from Washington and New York. Just buy gold (and silver, too). Physical precious metal continues to be your only financial protection from the true Economic Armageddon we are facing.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  292 Comments

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BagOfGoldEric Original
Nov 30, 2012 - 4:23pm

Eric O...

Sorry about that...It 'twas a "fat finger"...on the CTRL ALT!!!...

Bag Of Gold

Pegasus
Nov 30, 2012 - 4:19pm

Draw your own conclusions.

Draw your own conclusions.

Pegasus
Nov 30, 2012 - 4:17pm
Eric Original
Nov 30, 2012 - 4:12pm

BOG, you naughty girl

I thought we understood that our private email correspondence was...ahem...PRIVATE!!

tyberious
Nov 30, 2012 - 4:10pm

A Private Road Subscriber

A Private Road Subscriber send me a link to a HAARP watchdog site and it shows that there is significant activity over the West Coast with frequency magnitudes maxing out at 10... https://www.haarpstatus.com/status.html The last time HAARP was this active was during Hurricane Sandy. Experts have long warned that Central Northern California is at risk of levee failure due to bad storms and earthquakes...both can be enhanced by HAARP! https://youtu.be/_gp62RW6SbA Something is up. Bix Weir www.RoadtoRoota.com May the Road you choose be the Right Road.

BagOfGoldLouie
Nov 30, 2012 - 4:09pm

Louie...

It's not "a case of where"...Eric O has been hiding...but it's "a case of what"...he's been hiding!...

If it looks like bacon & smells like bacon...it's probably bacon!!!...

Bag Of Gold

Nov 30, 2012 - 4:03pm

More CoT BS

Look, if you've had a tough day/week and can't stand to look at this, I certainly understand. Take the weekend off and relax. Come back Monday, ready to rock and roll.

This week's CoT is just another sickening example of bullion bank control. Wait until you see the math.

GOLD

For the Tue-Tue reporting week, price rose by $19 and total OI expanded by 5,244.

Large Spec Net Long change = +12,927

Small Spec Net Long change = +3,056

Total Spec Net Long change = + +15,983

Cartel Net Short change = +15,983

Enough said.

SILVER

For the reporting week, price rose by $1.05 and total OI rose by just 392.

Same shit, different shiny metal.

Large Spec Net Long change = +772

Small Spec Net Long change = + 834

Total Spec Net Long change = +1,606

Cartel Net Short change = +1,606

The Cartel net short change was almost equally divided between covering longs and adding new shorts. The total Cartel gross short position is now 99,317. This is the highest level I can ever recall seeing. The last time total OI was this high on October 2010, the Cartel gross short position was 92,150.

And this is interesting...Back in October of 2010, the net short ratio of The Silver Cartel was 3.07:1, with price near $26. The Cartel was short 92,150 and long 30,023. As of last Tuesday, with price near $34, the gross Cartel short position was 99,317 but the long position was 40% higher at 42,525 for a ratio of 2.33:1. The only real difference, besdies price, between October of 2010 and today is this:

The Cartel gross short (+7000) and the Small Spec gross short (+4000) is nearly equal to the rise in Cartel gross longs (+12,000).

Louie
Nov 30, 2012 - 3:53pm

Bacon Dance of Joy

MMMMmmmmmmmmmmmmmmmmmmm

Bacon!

thurd aye
Nov 30, 2012 - 3:52pm

Look! No hands.

Artist fears £500,000 gold sculpture 'stolen' from Christie's auction house will be melted down for bollocks.(gotcha)

https://www.dailymail.co.uk/news/article-2240916/Turner-Prize-winning-artist-fears-500-000-solid-gold-sculpture-stolen-auction-house-Christies-melted-down.html#ixzz2Djp8w600

BYW:Notice how the shiny stuff is creeping ever more into the MSM?? :O))

The Watchman
Nov 30, 2012 - 3:45pm

Us Mint GOLD Sales-Another 12,500 oz SOLD Yesterday

2012 Gold Sales Totals
(in ounces / number of coins)
Month One
( oz. / #coins )
Half
( oz. / #coins )
Quarter
( oz. / #coins )
Tenth
( oz. / #coins )
Total
( oz. / #coins )
January 84,500
84,500
24,500
49,000
9,500
38,000
8,500
85,000
127,000
256,500
February 20,000
20,000
0
0
500
2,000
500
5,000
21,000
27,000
March 57,500
57,500
1,000
2,000
0
0
4,000
40,000
62,500
99,500
April 19,000
19,000
0
0
500
2,000
500
5,000
20,000
26,000
May 49,000
49,000
1,500
3,000
1,000
4,000
1,500
15,000
53,000
71,000
June 55,000
55,000
1,000
2,000
1,500
6,000
2,500
25,000
60,000
88,000
July 28,500
28,500
0
0
500
2,000
1,500
15,000
30,500
45,500
August 34,000
34,000
1,500
3,000
1,000
4,000
2,500
25,000
39,000
66,000
September 63,000
63,000
1,000
2,000
1,000
4,000
3,500
35,000
68,500
104,000
October 54,000
54,000
1,000
2,000
1,000
4,000
3,000
30,000
59,000
90,000
November 129,500
129,500
2,500
5,000
1,000
4,000
3,500
35,000
136,500
173,500
Total 594,000
594,000
34,000
68,000
17,500
70,000
31,500
315,000
677,000
1,047,000

Best Sales Month of The Year for Gold.

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Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
6/30 12:30 ET CGP and SSHW to Capitol Hill
7/1 8:15 ET ADP Employment
7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 2:00 ET June FOMC minutes
7/2 8:30 ET BLSBS
7/2 10:00 ET Factory Orders

Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
6/22 10:00 ET Existing home sales
6/23 9:45 ET Markit flash PMIs for June
6/23 10:00 ET New home sales
6/25 8:30 ET Q1 GDP final guess
6/25 8:30 ET Durable Goods
6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
6/16 8:30 ET Cap Ute and Ind Prod
6/16 10:00 ET Chief Goon Powell US Senate
6/16 4:00 pm ET Goon Chlamydia speech
6/17 8:30 ET Housing Starts
6/17 12:00 ET Chief Goon Powell US House
6/18 8:30 ET Initial Jobless Claims
6/18 8:30 ET Philly Fed
6/19 8:30 ET Current Account Deficit
6/19 1:00 pm ET CGP and Mester conference

Key Economic Events Week of 6/8

6/9 10:00 ET Job openings
6/9 10:00 ET Wholesale inventories
6/10 8:30 ET CPI for May
6/10 2:00 ET FOMC Fedlines
6/10 2:30 ET CGP presser
6/11 8:30 ET Initial jobless claims
6/11 8:30 ET PPI for May
6/12 8:30 ET Import price index
6/12 10:00 ET Consumer sentiment

Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

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