What A Week!

375
Sat, Dec 1, 2012 - 11:34am

First, I thought it'd be crazy. Then, by Tuesday, I thought it'd be dull. It turned out crazy. Just another week in the life of a Turd.

What did we see:

  • After the price surge of Black Friday, prices were pinned below $1750 in gold through option expiration on Tuesday.
  • Significant raids related to First Notice Day on both Wednesday and Friday.
  • Robust support appeared where we'd like to see it, namely $1705 in gold and $33.20 in silver.
  • On a personal note, I had a very successful week, after being notified that I was at once "retarded" and "dangerous". This comes just a few weeks after finding out that I am "morally bankrupt". Winner, winner, chicken dinner! That's the trifecta!

Before we look at the setup for next week, let's look back at yesterday so that we all can get on the same page regarding the mechanics of the selloff. Without doubt, the action of Wednesday and Friday was directly related to First Notice Day and contract expiration of the Dec12 gold and Dec12 silver. An overly-simplified way to explain this is:

  1. Bad Guy Bullion Bank builds up a very large position in the Dec12. BGBB is both long and short the Dec12 because the BGBB has taken turns, alternately buying and selling, in its attempt to pin price at a certain level for a minimally-damaging option expiration.
  2. Once Dec12 options expired at the close on Tuesday, BGBB needs to close all of its long and short futures positions in the Dec12.
  3. An entity without nefarious intent would simply liquidate both sides simultaneously and close the positions.
  4. Instead, the BGBB manipulates price for its own benefit by completely dumping the long side onto the market.
  5. This drives price sharply lower and initiates HFT-momo algo selling which drives price even lower.
  6. Into this HFT selling, the BGBB gradually covers the short side of its Dec12 position.

As it was happening yesterday, I printed these five charts. Note that the downward action was entirely contained within the metals. Other "risk" assets like crude or stocks or the euro were relatively stable and unchanged. Below are mid-day, five minute charts:

The resulting effect accomplished three, critical objectives for the BGBB.

  1. After all the selling, price is reset $20-30 lower and the chart looks unfriendly.
  2. Crushing price allows the BGBB to exit its entire position in a more profitable manner than if they had simply covered the thing at the market.
  3. All of the downside volatility frightens and coerces the longs, who might have considered delivery, into dumping, instead. This selling is also used as prey for the BGBB to cover the short side of its spread.

So, here we are. All of that nasty expiration and FND stuff is finally behind us and we're ready to roll into December. In the end, I expect this to be a very nice and positive month that will set us up for a big, exciting and explosive 2013. Getting there, though, will likely be volatile and challenging. To begin with, though the silver charts still look pretty good and silver remains above all of its moving averages, we'd be kidding ourselves if we thought the gold chart looked equally fine. It doesn't. So, first and foremost, we need to hold support early next week and begin a move back toward $34.20 and $1740.

Just a couple of "housekeeping" items before I knock off for the weekend.

First, yesterday's CoT was unremarkable as it once again showed that all the specs were buying and all of their buying was absorbed by the Cartels. Just once I'd like to see a nice, fair and even mix. Here's reprint of the comment I posted into yesterday's thread:

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).

Next, if you haven't yet signed up for the free webinar on Wednesday, you really should do so. It's scheduled for Noon EST and will be recorded for replay if you can't make it at Noon. Not only will Paul Coghlan be speaking and demonstrating his technical analysis, but our pal Andrew Maguire has promised to make an appearance, as well. Just click this link to register: https://www1.gotomeeting.com/register/240678176

And here's something on which I need your feedback. We have the opportunity to construct our own, "private label" bullion and coin store. It would be directly linked here but the guts of it (the infrastructure) would be an already-existing bullion and coin service. Call it the "TFMetalsMart" or something. My questions are: Is this a good idea? If the pricing was fair, would you buy from it? Would this seem a conflict of interest in that I'm such an active promoter of stacking physical metal? Please use the comments section of this thread to share your feedback.

Lastly, if you consider yourself an outstanding "prepper" or a "survivalist"....if you are prepared for anything, willing and capable of living off the land...and if you are competitive by nature, please send me an email at turdistheman at gmail dot com. I may have something for you to consider. Serious inquiries only please.

OK, that's it. We survived last week and, though we're damaged, we're still battling and expecting big things ahead. Go now and relax but return on Monday, ready to continue the fight.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  375 Comments

ClinkinKY
Dec 3, 2012 - 2:37am

Cloward-Piven Strategy

I've seen comments here claiming to "not be aware" of the Cloward-Piven strategy. Either you're being dishonest or you haven't been paying attention for the the last 40+ years.

Welcome to reality!

Chibster
Dec 3, 2012 - 2:40am

@Hawaii / Fed Guaranteed $9 Gas & $3800 Gold - Damon Geller

You can also claim you are carrying $15.00 ( for example: a $5 Gold Eagle plusa $10 Gold Eagle = Fifteen dollars) versus a 1/10 oz gold coin plus a 1/4 oz gold coin. I haven't tried it, but claim the face value of American Gold Eagles. That's what the 'face value' in dollars is for. Remember $10,000.00 is the magic number when you carry in or out of the country due to taxes.

The Fed Just Guaranteed $9 Gas & $3800 Gold - Damon Geller, 2 December 2012

The Fed Just Guaranteed $9 Gas & $3800 Gold - Damon Geller
Magpie
Dec 3, 2012 - 3:13am

@Puck

Just in case you haven't read it yet, here it is, straight from the horses' mouths:

https://www.scribd.com/doc/61004896/The-Cloward-Piven-Strategy-The-Weigh...

silverwood Chibster
Dec 3, 2012 - 3:13am

Dollar denominated Gold American Eagles

are legal tender and if you took them to a bank they would give you $5 for the 1/10 ounce and $10 for the 1/4 ounce. So going through airport you would want to carry 1/4 ounce GAEs as they are the least expense on a face value basis.

criscrossing
Dec 3, 2012 - 3:29am

Cloward-Piven Strategy

This article in the Shanandoah errily seems to be a stepping stone of the Cloward-Piven strategy. Very scary stuff........https://johngaltfla.com/wordpress/2012/11/29/goodbye-401k-goodbye-ira-hello-argentina/

ratioarbitrage
Dec 3, 2012 - 4:31am

This morning's prices

USD 18.09
GBP 29.04
EUR 23.58
Ag 19.54

All quoted in mg

Ag price is for 1 g

I will try to make a habit of this (call it self-education)

PS: the USD and Ag prices both resemble dates so you can watch one (guess which one) recede into the past as the other advances into the future. This amuses my tiny brain. The European currencies are still in the deep and distant future, but their time will come.

PPS: for added fun, any Turdites who wish to mention historical events on the relevant dates, please feel free to do so. Just for starters, USD is embroiled in the Napoleonic Wars while I am seeing Ag in the age of McCarthy / the afterglow of QEII's coronation (do correct if necesary - I am no historian).

Vermilion
Dec 3, 2012 - 4:34am

Did anyone spot this piece in

Did anyone spot this piece in the w/e FT - apologies if already posted. An extract:-

"The figures show Turkey exported $1.2bn of gold in October alone, bringing exports of the precious metal for the year so far to $11.9bn, 9.5 per cent of the country’s total exports – compared with 0.8 per cent for the same period a year before. Ankara recently acknowledged that Iran was buying gold with the receipts from its gas sales to Turkey and shipping bullion out of the country, a practice US legislators say should stop."

That's a lot of gold - where is Turkey getting it from? And this for just 1 month. Surely this must have a marked effect on gold inventory at Comex/LBMA (or wherever), and thus on price?

https://www.ft.com/cms/s/0/e1b320ba-3b16-11e2-b111-00144feabdc0.html#axzz2DyiAUYiU

Vermilion
Dec 3, 2012 - 4:35am

I understand China buys 3x as

I understand China buys 3x as much oil from Iran as Turkey - are they paying in gold too?

thatguy007
Dec 3, 2012 - 4:41am

SO which way is it going to break?

Going sideways in a hurry has to break sooner or later. My guess is up, but will we get a fake move first??

Boswell
Dec 3, 2012 - 4:57am

"which way is it going to break?"

Shhh... The monkeys are sleeping. ;-)

Wait till 9am NYT for the answer.

SIlverbee
Dec 3, 2012 - 5:09am
ratioarbitrage
Dec 3, 2012 - 5:20am

No other capital gains

Once a thinking investor has realized that gold is money and learned to hate counterparty risk, he will buy physical gold.

If he continues to think and at any point wishes not only to save but also to invest, he will then also buy physical silver.

Peoples Front of Judea
Dec 3, 2012 - 5:24am

@ Bollocks

MMMmm?????... Just what are we always being accused of?..there's Sooo many things.

Have we dried up the supply of AU/AG......Will Jan 1st be a red letter day for metals

Or have JPM/ Citybank been FUBAR'D.....Or is BM really a Lizard ?....should we be concerned for our stacks.

Excalibur
Dec 3, 2012 - 5:49am

Message SLbee

Just click on their name and follow. Sent you a PM.

boatman
Dec 3, 2012 - 6:03am

silbee

click on inbox......VERY VERY top left of a page.....next to: account sign out welcome silverbee

Just A Regular Guy
Dec 3, 2012 - 6:20am

Holy bond yields batman

The bond yields for 10-year notes in Italy/Spain/Greece are dropping like nothing else.

Looks EU positive, if they continue to drop bullish on the Euro/v-bearish on the USD.

I wonder what the central planners have in store......

tranquillity SIlverbee
Dec 3, 2012 - 6:24am

Page number on the top - YES please =)!

Would be really nice and save lots of scrolling when visiting this page by mobile phone.


Dec 3, 2012 - 6:26am

Music videos getting out of hand

Wow, I could have gone the rest of my life without being reminded of the "Green Tambourine" song.

Is there a song about PMs out there?

Harald
Dec 3, 2012 - 6:56am

Petula Clark's "Downtown" has

Petula Clark's "Downtown" has been running through my mind for the last couple of weeks. Driving me crazy. Some music seems like it's created for the sole purpose of annoying people. Maybe some Cloward-Piven thing. "Green Tambourine" definitely qualifies. I think there's a forum for music videos somewhere.

boatman
Dec 3, 2012 - 7:13am

greece has offered

to buy back bonds........many are taking the since-april-profit.......its euro positive n bond yield negative for PIIGS

Santa says they will print[are printing via dollar swap window] to keep PIIGS.............if they leave its longrun euro positive too............and world-bond vigillante positive.

west=japan has painted themselves in a debt corner............PMs the only asset left standing one day soon.

Blue Sky
Dec 3, 2012 - 7:21am

XTY- Bacon/Whiskey spread

Any chance of you re posting the recipe for the luscious spread. I'm going back to the ol' sod for Christmas and thought to make it for them over there.

Thanks,

Blue

ratioarbitrage
Dec 3, 2012 - 7:24am

The Upward Waterfall

Here it is again - that accelerating, upward-curving chart in the dollar as charts and commentators again point to raging, accelerating demand for dollars against gold. Lust for the one and loathing of the other peak just as the custodians of the system decide whether or not finally to abolish the last remaining restraints on the quantity of dollars and embark on the final descent into madness, while those in the know scramble in silence for the last scraps of physical wealth.

If were not for the bloodshed, the cries of hungry children and the annihilation of the hopes of honest citizens, such nonsense would be comical and entertaining to watch. No popcorn today.

murphy
Dec 3, 2012 - 7:27am

Boatman

re: J Buffett.. 1975 U of S. Fla. Every Friday afternoon was 10 cent draft beer. He played there for free.

boatman
Dec 3, 2012 - 7:30am

music vids

are the easiest thing to scroll past if one desires.

how can u get a song in your head if u don't hear it?

boatman
Dec 3, 2012 - 7:38am

murph..........well thats cool!

steve miller n quicksilver played for free at Univ. of Hawaii every year '67 to a longtime.......all friday afternoon....OUTSIDE.......only the dweebs went to class......back then there was little air conditioning[didn't need it] so windows where always open.

you could here it on the far side of the campus.

i got there early once on friday n had a 'puff' with steve [helped them set up]

AlexCojones
Dec 3, 2012 - 7:41am

Thanks for joining

I had them, too. Also had a $50 "to win the Big 10" bet I'd placed last summer. Nuts.

boatman
Dec 3, 2012 - 7:56am

SnP wave counters point to '09 lows revisited

something history also tells us

april or oct or april year or october year...................... is the only question.

https://www.safehaven.com/article/27899/weekly-technical-analysis

TD
Dec 3, 2012 - 7:59am

Hawaii

Anybody know where you can buy one of those "gold boats"?

TD

Hammer
Dec 3, 2012 - 8:07am

It is not a sovereign debt

It is not a sovereign debt bailout but a step in that direction.

ivars
Dec 3, 2012 - 8:08am

murphy- gold bubble

He meant secular bubble- long term.

can last another 10 years. Or only 4-5 as I think.

But I agree with him and gold bubble ina sense USD will not go bust yet. The bankers will not allow it. Nor will they cancel debts to people to relieve them from slavery. I would suggest, USA is no Weimar and QE is not printing as we understand it via consumer price inflation - it goes mostly into financial assets and military, and that is not quite the same as consumption. It barely matches the destruction of money by deleveraging of private and industrial debtors- I think in 3 years they have destroyed more than 2 trillion USD by paying off debt. New debt is not coming. So there is not much more money in the whole banking industry. That is why M3 is hidden. And Shadowstats.. who knows if they are right on M3. The guy also has an agenda, ideological, as has government statistics. His stats must match each other, but show worse picture than government.

If one could get rid of "antiestablishment" idea that due to their improper behavior USD must go bust, its putting ideology ahead of reality. Not good for clarity of thinking.

They are still the most powerful " industry" in the world, and especially the USA, heavily armed. They run the country, so why would they devaluate USD and forgive debts? Devaluation is for bankers the same as forgiveness.

Think like banker, if you can, and the power realities will put near term future in the right perspective.

Imagine Dimon going for Treasury secretary. He will devaluate USD? Why? For all the world private banks to go bust because the debts in USD will disappear? NEVER.

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