Getting Out of Hand

204
Thu, Dec 20, 2012 - 10:09am

Well, what are ya gonna do? I suppose you can be angry with me and everyone else because I certainly don't know of anyone who saw this coming. But the thing has taken on a life of its own now and there's really nothing anyone can do about it.

Would it be worth the time to sit here and bang out all of the reasons again why you own precious metal? Do I need to discuss the fundamentals again and all of the attendant rationale for doing what we do? Nah. Probably not. You've heard it so many times now I'm sure you could repeat everything in your sleep.

I could probably tell you about the short-term technicals and how oversold they are. Just a couple of days ago I mentioned that major selloffs typically don't begin from the oversold levels we were at then. And now look at things!

Maybe I should even waste a few moments going over the physical demand in London and how this will, inevitably, turn paper price around, lead to a stabilization and then a rebound. I could do that but why? You already know that.

In the end, this is nothing new. We saw this in May of 2011. We saw it in September of 2011 and again in December of last year. We saw it in February of this year, too. The metals rally. The Cartels sell all the way up by creating unlimited amounts of unbacked, paper shorts. Eventually, the rally runs out of steam. Some profit-taking ensues. The Cartels give things a shove and down she goes. Soon, the momo-chasing HFTs take over and really drive price down. Into this selling, The Cartels cover nearly all of the shorts they created on the way up until, presto/chango, we are right back to where we started.

Wash. Rinse. Repeat.

Only two things can possibly break this cycle:

  1. The toothless, hapless and corrupt commissioners of the CFTC will, one day, have to act upon the undeniable evidence before them. (Don't hold your breath.)
  2. Physical depletion continues until the market simply breaks. (And this is where we come in.)

Your job today is to relax. Yes, this manufactured event will likely continue but it will also end in the same way the other manufactured corrections have ended. Soon, there will be a very sharp, snap-back rally. It will emerge suddenly and catch traders by surprise. That rally will run out of steam and the shorts will attempt to re-assert themselves. Price will dive again but, ultimately, fail to make significant new lows. From there, a double or reverse H&S bottom will form and price will begin to recover.

In the meantime, head down to your local coin shop and add to your stack today (if they'll actually sell to you at these discounted prices). The only way we can be assured of victory is by taking action ourselves. The fraud that is the CFTC cannot be counted on to help us. Only we can help us.

Keep the faith. Persevere. Be strong and BTFD (again).

TF

About the Author

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

  204 Comments

DavidSilverSwe
Dec 20, 2012 - 10:38am

GOLDMONEY

perfect(?) timing on a semi-big purchase in goldmoney(Silver)

maybe add some minilongs for the hell of it too.

JimmyTheHand
Dec 20, 2012 - 10:39am

Same thing as last year - 2011

https://www.zerohedge.com/news/commodity-liquidation-accelerates-margin-...

Like Turd said, wash, rinse, repeat.....

Turd - The haters will be out in full force but there are plenty of folks here that got your back brother. Don't let the bastards get you down :)

tankerfirstofficer
Dec 20, 2012 - 10:39am

I've said this before and I

I've said this before and I will say it again: Any entity that is capable of providing this much liquidity to a market and that can keep interest rates pegged at zero or close to zero can do whatever they want to the paper price of metal.

Trading these markets or attempting to make any form of true price discovery from these markets is a flawed strategy. These markets are BROKEN. As such, risk assessment is impossible and the only course of action is to buy real metal at cheap prices until this system doesn't work any longer -- while keeping some cash on hand in order to make purchases.

That is it.

Please. Stop acting surprised every time this happens.

achmachat
Dec 20, 2012 - 10:40am

worst. christmas. ever.

the wife is going to make me sleep on the couch.

probably until we're back up over water.

ReachWest
Dec 20, 2012 - 10:40am

Bonus

Wow - Looks like Blythe and the monkeys will be getting nice Christmas bonuses this year - after all. Argh. Oh well - whatever.

balz
Dec 20, 2012 - 10:40am

binzer

Silver up 900% in a decade.

If you can't tolerate the heat, what do you do in the kitchen?

This is long term.

Nana
Dec 20, 2012 - 10:41am

Don't Worry

The Plunge Protection Team has everything under control......It's metal smashing day, they got to protect pigatha.

Anonymous
Dec 20, 2012 - 10:42am

Removed comment

Removed comment.

¤
Dec 20, 2012 - 10:42am

There outta be a law...

Fed’s $4 Trillion Rescue Helps Hedge Fund as Savers Hurt

By Bob Ivry - Dec 20, 2012 12:01 AM ET

Deepak Narula’s mortgage-bond fund is up 39 percent this year. George Sanchez’s monthly annuity payout is down 41 percent.

The near-zero interest rate the Federal Reserve charges financial firms, as well as securities purchases that will balloon the central bank’s balance sheet to almost $4 trillion next year, have made it easier for Narula’s $1.6 billion fund to thrive and more difficult for Sanchez, a former college library director, to enjoy retirement.

Chairman Ben S. Bernanke’s efforts to energize the U.S. economy since 2008 have been credited with rousing the housing market from a six-year funk, lowering the jobless rate and putting more money in the pockets of both mortgage lenders and borrowers. At the same time, Fed policy has been blamed for starving money-savers of income and boosting certain asset prices, widening the gap between the rich and the rest of the country, said Joseph E. Stiglitz, the Nobel Prize-winning Columbia University economist.

Monetary policy has been indirectly, surreptitiously helping the top and hurting the bottom,” Stiglitz said.

Fed officials declined to comment for this story on whether their policies exacerbated inequality, said Barbara Hagenbaugh, a spokeswoman for the U.S. central bank. Bernanke said last year that the Fed aims “strictly to do what’s in the interest of the broad public.”

He said last week that the policies are intended to “try and create a stronger economy, more jobs, so that folks across the country, including places like the one where I grew up, will have more opportunity to have better lives for themselves.” Bernanke was raised in Dillon, South Carolina, population 6,745.

Divergent Paths

Since the end of the 18-month recession in June 2009, people like Narula and Sanchez have followed divergent economic paths. Earnings rose 5.5 percent last year for the 1.2 million households whose incomes put them in the top 1 percent of the U.S., according to estimates from the U.S. Census Bureau. At the same time, income fell 1.7 percent for the 97 million households in the bottom 80 percent -- those making less than $101,583.

After two rounds of asset purchases totaling $2.3 trillion through June 2011, the central bank began so-called QE3 in September. QE stands for “quantitative easing,” in which the Fed buys securities to channel cash into the financial system.

The goal is to stimulate spending and boost lending, which is meant to generate more jobs. Bernanke said last week the central bank will purchase $85 billion of assets a month next year “to increase the near-term momentum of the economy.” That would bring its balance sheet to almost $4 trillion, up from $924 billion on Sept. 10, 2008, the week before the collapse of investment bank Lehman Brothers Holdings Inc. deepened the recession.

Commodity Speculation

The Fed’s mortgage-securities purchases have bolstered...

https://www.bloomberg.com/news/2012-12-20/fed-s-4-trillion-rescue-helps-...

__________________

B. Bernanke: "QE is necessary....the benefits outweigh the costs." Jackson Hole ~ 8/31/12
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
SpeakEasy,NewsTicker,iCandy-Vids https://www.tfmetalsreport.com/forums/frivolity-forum

zyx5432
Dec 20, 2012 - 10:42am

Unfortunately, this kind of

Unfortunately, this kind of looks just like the selloff into late December last year, after which we mounted a hell of a rebound. FWIW

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