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Welcome to the updated TF Metals Report! We hope you enjoy the new experience.

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Back From Break

492
Fri, Dec 14, 2012 - 10:09am

You may have noticed that I was gone all day yesterday. Eleven, full hours with no phone and no internet and it WAS GREAT! So, what did I miss? Silver is all the way back to....where it was a month ago. Oh, no! The sky is falling!!

Seriously. I haven't even bothered to look over the comments to the previous thread as I'm sure they're full of despondent traders and gleeful trolls. Whatever. As I said yesterday, no one is going to stop me from doing what I do because I know, in the long term, that I am correct. Global central banks are going to print and print in their efforts to manage their way out of this debt crisis. They will fail and, with them, fiat currency will fail, too. In the end, a new international trade settlement system will emerge with a gold-backed unit of exchange at its heart. The only protection that I have against this wealth destruction is my stash of physical metal, which currently resides in a heavily-guarded vault at the bottom of the Marianas Trench.

So what do you do today? You buy the freaking dip, that's what you do. If The Bullion Bank Cartel is going to insist upon giving us all more time to accumulate metal at deeply-discounted prices, I strongly urge you to take them up on it. Lord knows the Chinese, the Russians, the Indians and the Turks are doing so. You should be doing the same. Namely, convert your rapidly-devaluing dollar reserves into hard assets, primarily gold and silver. Forget the goons in the media and the water-carrying shills for The Cartel, gold and silver are NOT in bubbles. That is complete nonsense! Since when does an asset that is currently owned by just 1% of global investors considered a "bubble"? Since The Cartel shills in the media declared it so, that's when. Ridiculous.

And while, we're at it...How come no one besides ole Turd can dare say that QE is all about funding the federal deficit? The "dots" are all there yet no one seems to want be able to make the connection. Countless articles have been written about The Fed essentially owning the entire Treasury issuance past 7 years. The fiscal 2013 deficit is already tracking 20% ahead of 2012 and on pace for $1.7T and suddenly the Fed announces that they're supplying $85B/month ($1T+/yr) in new money...yet no one can see that this is direct monetization of the deficit and debt? It's surreal. It's the real life equivalent of the old fable about the emperor having no clothes. I look around and its as if no one else can see what I see. Bizarre.

Oh, well, I for one choose NOT to bury my head in the sand and hope for the best. I will use my God-given observation and reasoning skills and think for myself, instead. This leads me to the financial protection of gold and silver and nothing The Cartels does can shake me from my positions.

To that end, yesterday was a classic. The lack of follow-through buying on the latest QE announcement emboldened The Bad Guys to raid price early Wednesday evening. Once they tripped some stops by moving price below 1705, it was on. The raid was particularly grotesque in silver where the OI remains dangerously high for JPM. In fact, on Wednesday, the total silver OI surged once again to 144,066. This long-standing and growing open interest undoubtedly frightens The Big Shorts and they knew a raid must be initiated. Thus, the pounding in gold wasn't nearly as substantial as the pounding silver took yesterday. I wait with great interest for yesterday's OI totals. They should be released, as usual, by about 2:00 EST today. In Harvey parlance, how many silver leaves were shaken from the tree yesterday? I can't wait to find out.

Along with the OI numbers, we'll also get another CoT later today. It won't be nearly as dramatic as last week simply because the reporting period saw very small changes in both OI and price. Nonetheless, you never know how the internals may change from week-to-week so be sure to check back later today. I'll have another podcast to release and we'll surely be discussing this latest CoT.

And, finally, just a few more words about price as we head into the final days of 2012. Let's summarize a few things:

  1. Though the inaction behind-the-scenes is infuriating, I still expect vindication for all of us in 2013.
  2. I had thought that gold and silver would finish the year at or near the top of their 2012 ranges with gold near 1800 and silver near 35. This is certainly looking less likely but I would remind all of the trolls that there are still quite a few trading days left in the year.
  3. And as recently as a week ago I laid out why I felt December would be a solid month. Namely, given the overriding fundamentals, there is no reason to think that the metals would close 2012 by trending downward toward the bottom of the ranges. This makes no sense. If you look at 2012 as a year of price consolidation during a time of little unsterilized Fed action, price should be trending higher into 2013, a year which is quite obviously going to see substantial unsterilized Fed action.

In 2012, Gold has traded in a range roughly bounded by 1550 at the bottom and 1800 at the top. The median line for this range is 1675. Note that the recent selloff has not broken price down below this level and I do not expect any further selling to breach this level, either. Instead, I expect gold to rally over the remainder of the year. Will me make it to 1780-1800? Who knows? Does it matter? Really? With all that's set to happen in 2013, a year-end close of 1730 vs 1780 matters very little.

The same could be said for silver. For 2012, it has also been rangebound in a trade between 26 and 36, with a median line of 31. Again, given the fiat currency situation for 2013, the continuance of extremely tight physical supplies...and...other factors..., why would we expect silver to break down through $31 and head toward the low end of the range? Exactly. There is no reason to expect this and, therefore, I don't. Silver should/will continue to consolidate here and finish the year somewhere between 33 and 35. Then....it's on. 2013 is going to be a doozy.

So, relax or, better yet, do what the LTs say to do: Chillax. This is a combination of "chill" and "relax". Take some time away like I did yesterday. Enjoy the season and search for joy in things unrelated to money and finance. Be at peace knowing that you are doing the right thing.

As I mentioned above, please check back later today or tomorrow for another exciting TFMR podcast as well as some commentary on the CoT.

Have a great day and a great weekend!

TF

About the Author

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

  492 Comments

· Dec 14, 2012 - 10:10am

via our pal, Rahul, at alt-investors:

Video unavailable
prius_driver · Dec 14, 2012 - 10:10am

that sucked

achmachat · Dec 14, 2012 - 10:12am

it was Blythe, of course

Silverman · Dec 14, 2012 - 10:14am

Thank god it's working. 

Silverman · Dec 14, 2012 - 10:14am
The Collapse of The American Dream Explained in Animation
Craig Rogers · Dec 14, 2012 - 10:14am

today..

beat down and up, need a break.

Dr G · Dec 14, 2012 - 10:19am

 Silver is all the way back to....where it was a month ago. Oh, no! The sky is falling!!

I don't think the sky is falling, but I do think that it is okay to admit some emotional despondence as a result of the price movement.

Why not paint the whole picture? Silver is all the way back to...where it was a month ago...and this happened on a day when the FOMC announced an additional $45B/month printing and alluded to it occurring for the next 3 years.

Silver's movement alone is just normal for silver. Silver's movement after additional QE is a bummer. It is what it is. The Cartel at this point seems to have plenty of paper to throw around. Maybe it's their last dying gasp, maybe we are all idiots and this will go on for decades. I don't know. I just buy physical and put it away.

Gramp · Dec 14, 2012 - 10:22am

Family day, late night Pod cast over at Turd Talks Metals, https://www.turdtalksmetals.com/

You are a busy Turd! lol

Hey TF posted this vid last week, and I linked it to a friend of mine . For some reason it resonated with him quite well. have a look!

Gold Bullion or Cash
Jan Pier · Dec 14, 2012 - 10:26am

Almost 1st !

Urban Roman Turd Ferguson · Dec 14, 2012 - 10:27am

Manipulation?

Why, I was almost convinced that somebody dredged up 10 or 15 Spanish Galleons full of Ag and Au, and just had to sell their entire contents at 8:00 PM on a Wednesday! All in the same 100 milliseconds Wednesday evening.

nice day to add to the stack

Craig Rogers · Dec 14, 2012 - 10:29am

barely move.. makes you wonder.. 

Mr. Fix · Dec 14, 2012 - 10:31am

 I've been trying to log on for a while, but the site seems very, very slow.

 I'm wondering if it's just me?

 Anyway, by now I should at least get to the obligatory

 I am first! smiley

Now that we've gotten that formality out of the way,

I would like to thank the gang at TF metals, and its fearless leader for the great service he is providing to humanity.

 Secondly, I would like to thank everyone for a great time last night, I spent more time going to my "inbox" then doing my usual research and reading, but it was a blast.

 I've still got a few notes to return, but alas, I am about to get in my car and go fix some stuff.

 Have a great day everyone,

 I for one am looking forward to a relaxing weekend, since it seems like I am just about caught up

 with the deluge of repair orders in the aftermath of Sandy.

 I'm looking forward to getting back to “life as normal”.

(Although I'm still trying to figure out exactly what that's supposed to be).wink

tyberious · Dec 14, 2012 - 10:31am

Why defend the $35.00 line so hard? I get 1700-1800, because above that Au quickly moves to 1900+.

But Ag, is it about options, is it about cash settlements, is it some MIT grads maginot line

or as Max Kaiser and others have alluded to, $35.oo Ag is related to derivative contracts and IR swaps?

Anyone?

Rui · Dec 14, 2012 - 10:35am

FWIW, I notice the PUT volume on GG Jan2014 @30 and GDX Jan2014 @45 surged quite a bit yesterday. The stats is from "https://www.optionistics.com/f/option-prices".

danny matlock · Dec 14, 2012 - 10:39am

Bill Murphy big event and Turd's HEH.

It reminds me of kids playing games for attention and to get a reaction.

'I got a secret, but I can't tell you'....'oh please, what is it?'...'sorry, I just can't say'....and on and on

Maybe because there is nothing to tell......please prove me wrong.

Xeno · Dec 14, 2012 - 10:39am

This all just seems like the usual games pre-opex. This weekend will be filled with all the Christmas parties, party hardy dudes, and next week is...crying triple witch expiration week and... crying the EOTWAWKI. So, longs sell to finance parties this weekend and next week shorts cover and everyone else buys gold for EOTWAWKI.

I'm stacked and feel fine.

Video unavailable
Michael Wong · Dec 14, 2012 - 10:43am

I picked up 15 maple leaf yesterday. Bring it on! Drop some more, papa is waiting to buy another batch.

JC Thims · Dec 14, 2012 - 10:44am

Did you notice in 50 minutes of talk Marc Faber didn't mention silver once.What's the significance of that? Ammo for someone no doubt.

Nana · Dec 14, 2012 - 10:46am

There is no rule of law for the big banks. They are allowed to steal, manipulate and do whatever they want to do with no consequences. So much for equal protection under the law.......

danny matlock · Dec 14, 2012 - 10:47am

Or simply be patient. It is not an exaggeration to say that there are lives at stake.

ballyale · Dec 14, 2012 - 10:50am

Everyone posits that with new QE then that increases the money supply and that, therefore, it dilutes the Dollar. Thus, the PM's must rise, only right after any new QE, mostly doesn't. Why is this?

Let's take a look at what QE really is? It is the Fed buying Bank bonds at full value, when they are worth about 30% of their original price. Though, it doesn't change their mark to "Fed" value, it does free up a huge amount of cash that was tied up in those mortgages.

Guess where that money could have gone. It wasn't into creating new loans and expanding the economy. My guess is that it was getting out of long equities and/or shorting the PM's and PM equities.

It then takes a number of weeks for this to consolidate on the downside before resuming the bull market in PM's.

FWIW, just my guess. It's just that I haven't heard this thesis on the board.

Bally.

James Mc · Dec 14, 2012 - 10:52am

Whenever QE infinity (I can't see the sideways-8 infinity symbol on my keyboard) was announced and silver went up 5% or whatever I was jubilant, and went out and bought my father a new dining table and chairs and gave him a thousand bucks out of my savings account as I though we were hitting $40+ for sure.

Is there any, ANY chance that if I write to santa he'll refund me for the dining set and money? 

Mickey Silverstone · Dec 14, 2012 - 10:56am

bet some goes into pockets of those running the banks for a job well done

bob tyberious · Dec 14, 2012 - 10:57am

i seem to remember some noise (from the wynter benton crew?) some time back that if silver stayed above $36.00 for a certain number of days, it would trigger some ugly derivative consequences for jpm. if there was anything to that, $35 may be a first line of defense for $36. ...or maybe the derivative threshold may have moved down in the interim?

since this line of speculation is based on wynter benton, it might be best to keep a grain or two of salt on hand.

Nigel Black · Dec 14, 2012 - 10:58am

You should have asked Santa 5 weeks, 6 days ago (when you joined) that question.

Turd - you have so many new people who have joined recently and it is great to see them participate in our discussions. I am curious, however, why they've all decided to join the site and come out now?

Swineflogger · Dec 14, 2012 - 11:00am

@Xty

My bride and I were so intrigued by your recipe (posted 12/3/2012) that we made our first batch a couple of days ago. OMG! There are no words to describe the wonder of your concoction. We saved a couple of jars and gave the rest away as Christmas gifts. You just can't beat putting two favorite things in the same jar. Thanks again for the suggestion. Merry Christmas to all. In closing, I have been focusing lately on my blessings and trying to put the worries and frustrations at arms length. It helps.

Swineflogger

EDIT: WHISKEY BACON JAM :)

Just A Regular Guy · Dec 14, 2012 - 11:04am

Hey boys and girls,

Obviously I am bullish on the metals (like a fair few of you). I listened to the Steve Leeb interview on KWN a few weeks back and did some follow up on the "Homesteak" mine in Dakota (as owned my Mr.George Hearst - please someone post a Deadwood clip! smiley).

Check it out https://www.gold-eagle.com/editorials/great_crash.html

Also https://en.wikipedia.org/wiki/Homestake_Mine_(South_Dakota)

I am bullish on the miners too obviously. Anyway take care boys and girls!

Peace

Wizard · Dec 14, 2012 - 11:06am

The Fundamentals are a good thing to bring to the top.

And No I do not Sell Precious Metals

  1. No purely fiat currency in all of human history

has ever survived…. EVER

2. The average life span of a purely fiat currency is between 10 and 30 years.

3. The U.S. Dollar has been a purely fiat currency since August 15th 1971…..41 Years.

And Fundamental 2.

https://i485.photobucket.com/albums/rr217/Stew_026/Silver%20Fundamental/SilverMarket.jpg

rathernot Say · Dec 14, 2012 - 11:07am

Dan Norcini reckons there isn't much resistance between $35 and the low forties. Couple that with the fuel in place for the mother of all short squeezes, and you get the picture. Alistair Macleod also recently discussed the exceptional short interest in silver, that could get things 'disorderly to the upside' if triggered.

The problem with a silver surge of course, would be the risk of inspiring its bigger brother to surge too. 

JohnnyR · Dec 14, 2012 - 11:09am

This is off topic, but worth a mention, I think.

https://www.bbc.co.uk/news/science-environment-20595226

There was a story on the BBC News website a few days ago, regarding silver in clothes. The story was basically about whether silver posed any risk to humans when it was ‘washed’ into the water supply. That wasn’t the interesting part though. Right at the end of the piece was the following comment …

“Silver is rare - Some estimates suggest that our global resources may be depleted within 30 years.

It makes recycling silver a smart thing to do.”

I know the 30 year depletion estimate will be contentious here in Turdville, but look at the first three words of the quote … ‘Silver is rare’.

It was the first time that I had seen MSM pointing out that ‘there aint that much of it left’.

Notice: If you do not see your new comment immediately, do not be alarmed. We are currently refreshing new comments approximately every 2 minutes to better manage performance while working on other issues. Thank you for your patience.

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6/12 8:30 ET CPI
6/13 8:30 ET PPI
6/13 2:00 ET June Fedlines
6/13 2:30 ET CGP presser
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6/15 9:15 ET Ind. Prod

Key Economic Events week of 6/4:
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Key Economic Events week of 4/30:
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5/1 9:45 ET PMI and ISM Mau Idx.
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Key Economic Events week of 4/16:
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