Reality Bites

Wed, Jan 2, 2013 - 11:02am

So, let's see. The fiscal cliff "deal" involves massive tax increases and no spending cuts. NO! Really? You don't say. And now, all those who were selling and shorting the metals are getting squeezed. Welcome to 2013.

I'm still on vacation and won't officially be back "on the throne" until Friday morning...just in time for the latest BLSBS. For now, we should all be pleased with this rally in the metals. I'd mentioned last evening that I wanted to see $1690+ and $31+ and, this morning, we've got it. This doesn't mean it's time to sound the All Clear yet but it is definitely an encouraging development, as you can plainly see on these hourly charts.

Regardless of the very short term movements, I still expect vigorous rallies from here as reality sets in for 2013:

  • The U.S. fiscal and economic picture has worsened.
  • No doubt another debt downgrade is coming.
  • Spec long money, which was squared up and exited the market in December, is already coming back in.
  • QE∞ is now guaranteed to last through 2015 and beyond and $85B/month will be proven to be insufficient. Watch out for the BLSBS. A surprisingly lousy number will give the smartypant shorts a true religious experience on Friday.

For now, let's just hold and consolidate these gains and then make runs to and through $1700 and $32. I'll be able to give more specific targets once I'm back in the office.

Lastly, this article was posted to ZH yesterday so you might have missed it. Very interesting with some particularly telling charts. (I'll tell you what's "afoot". Massive price suppression, that's what!)

Have a great day!


About the Author

turd [at] tfmetalsreport [dot] com ()


Jan 2, 2013 - 11:03am


First?? Must be my good day.

Jan 2, 2013 - 11:04am


Good to have you with us We missed you, Turd!

Ned Braden huiaid
Jan 2, 2013 - 11:07am



Jan 2, 2013 - 11:10am

Palladium an indicator?

Seems to be pretty well correlated (mirrored) except for exaggeration moves in gold/silver. If so, nice indications afoot.


Jan 2, 2013 - 11:11am



Edit...Fourth is nice for such a newbie.

Thanks Turd. Enjoy the rest of your vacation.

Happy New Year to all.

Big L
Jan 2, 2013 - 11:11am

The year of personal honesty

My New Years resolution.

Edit, I'd like to thank Turd for his years of personal honesty, up front and out in the open, he's been a role model for me. I hope to follow his lead in a way that makes me proud of myself.

Jan 2, 2013 - 11:11am

Happy New Year

Stack with increased intensity. God Bless all. We surely will need it as this year is going to be a heck of a ride

Nick Elway
Jan 2, 2013 - 11:13am

Ron Paul Dec 31

Video unavailable
Jan 2, 2013 - 11:19am

To Rally or Not to Rally

Here's hoping for early 2011esq rally in silver, been waiting long enough!

...In other news:

Jan 2, 2013 - 11:20am

Yeah, some squeeze

Is happening.

Jan 2, 2013 - 11:20am

The silver graph posted by ScottJ

It seems to be a bowl formation from the April 2011 high, and we are on the uptrend now.

What is not shown on the silver chart, would require adding a few more decades of data. The biggest cup & handle formation that we are ever likely to find, going back to the peak of 1980/81. Just a tad bullish ;-)

Jan 2, 2013 - 11:22am

Removed comment

Removed comment.

Mr. Fix
Jan 2, 2013 - 11:32am

Thanks for the new post,

I'm thinking that last thread got a record number of views, congratulations Turd

Your site continues to grow, I commend you on your efforts.

Two Gun Tobin
Jan 2, 2013 - 11:35am

Two Gun pans some gold

I haven't been out to my claim since summer, so I decided to go out and pan a bit. The winter rains in the Sierra Nevada's changed everything. all the old holes and rock piles were gone. So I moved one rock, dug out four 3 gallon buckets of gravel, and panned it out. First picture is the hole, next is the black sand with gold flecks and the final is the results. I usually will move 15 to 20 buckets thru the slice in a day. I was just out for a stroll this day.

Jan 2, 2013 - 11:42am

What's Up Doc?

Gold and silver that's what!

But what's up with the US dollar versus the Canadian dollar pairing?

Gold close 2011;

USD $1,565.31 CAD $1,598.89

Gold close 2012;

USD $1,675.87 CAD $1,662.64

Why the big difference when the currency pair are trading at essentially parity?

Which one is over valued/under valued? What we are seeing is a manifestation of devalued currency induced cost/push inflation, as shown by the gold price currency valuation. It will cost you more to buy gold and silver with US dollars.

This is the insidiously hidden, stealthy, theft of your wealth. The only protection from, which is ownership of physical gold silver, held outside the system. Maybe preaching to the choir here, but some folks are new to the site, seeking some kind of direction. Good luck all in 2013. We're going to need it!

Jan 2, 2013 - 11:46am

Silver trade

Bought silver at 30.10

Jan 2, 2013 - 11:56am

zero hedge article - Turd

Some turdites in last post did discuss their understanding; and we had few open questions interpretation. Can few members state their view points. I am of the understanding that a correction and then a rise. Please clarify if my understanding is ok.

Jan 2, 2013 - 11:58am

More Martin Armstrong - be careful out there

not trying to be a downer. It just seems like this guy has a pretty good track record though I just began reading him about a year ago? anyone else have thoughts on this guy.

We have a very serious problem. In gold, everyone is loaded to the gills expecting hyperinflation that will never materialize and governments are getting outright nasty. We have THREE Monthly Bearish Reversals that have now lined up in gold at 15470, 15413, and 15323. We have a huge gap from there to 11589 and this is not real good. Gold closed 2012 higher than it did for 2011 on the 13th year up. That is by no means good at all. If these reversals are elected, look out below. We may have to clean house before gold can resume the uptrend.

see above link for rest of his thoughts. it sounds like he is not sure Gold is going down - he is just saying be careful.

Jan 2, 2013 - 12:05pm


If it's anything like last year, it won't be a bad report...and you have to love words like "artificially".

From ShadowStats...

No. 411: December Employment and Unemployment January, 6th, 2012 • Seasonal-Adjustment Problems Spiked Jobs Growth, Seasonal-Adjustment Revisions Artificially Lowered Unemployment Rates
• December Jobs Reading Remained Well Below Pre-2007 and Pre-2001 Recession Levels
• December Unemployment: 8.5% (U.3), 15.2% (U.6), 22.4% (SGS)
• Money Supply M3 Annual Growth Tops 3.0% for First Time in 28 Months

FLASH UPDATE: December Payroll Seasonal-Adjustment Problem January, 6th, 2012 • Seasonal-Adjustment Problem Inflated December’s 200,000 Payroll Gain by 42,000
ScottJ Byzantium
Jan 2, 2013 - 12:06pm

Re: Byzantium - 40 Year Cup and Handle

You mean this chart? I agree.. Target 100-120 once the handle breaks right? However, when that happens it will create different psychological effects based on the true meaning (dollar losing reserve status), so all bets are off to where it could go... especially paper price.

This website has great charts/ratios/data:

Jan 2, 2013 - 12:16pm

DOW GOLD ratio heading wrong way Mr. Schiff

1 to 1 is not going to happen

Juan Moment
Jan 2, 2013 - 12:25pm

We have the power

As the court ruling in favor of JPM clearly demonstrates, we are on our own. But hey, look at the bright side, we are on our own. Since we know there is no way politicians or judges will put an end to this blatant daylight robbery of investors, savers, pensioners, municipalities, taxpayers, we the people would be stupid to expend anymore time and effort pursuing those useless avenues.

Instead me thinks, its time for some direct action, and I don't mean senseless protesting and sit-ins. How many are there of us? Fed up with the farce to the point that we are ready to put our money where our mouth is? Imagine we joined forces!

If we had every media pundit out there on our side of the fence, the Peter Schiff's, Max Keisers, KWN, the precious metals blogosphere and youtube silver community at large, encouraging their listeners and readers to join the club, would we get one million? My bet is we could.

Start with a million of us, each throwing one ounce of silver in the hat. That's a $30 million fighting fund right there. Our arguments for why the time has come to make a stand against the machine that is designed to fleece the sheep, are too persuasive for intelligent people to deny. All we need is a means to bring them across to a wider audience. A full page add in the NYT Sunday edition costs about $200'000, meaning if we picked five of the largest news papers in the Europe and the US, we could take out at least 30 weeks worth of full page ad space, and with our collective effort energize another million into joining us in taking action, making that now two million of us, who then together fire up another two million, and so on. I am sure Eric Sprott, Hugo Salinas Price and other friends with deeper pockets would add a few bucks to the war chest.

The movement would snowball, especially if all that is required for people to join is to for them to go out and buy five ounces of silver, and donate the cash for a sixth ounce to the cause. The fighting fund would grow, allowing for more advertising across the world, while at the same time the increased retail demand for silver coupled with a very public call to silver arms would let the price of the metals go through the roof. Let's see how JPM feels about this kind of price manipulation, organic demand eating their short positions alive.

Am I dreaming? Or is it possible? I think the latter. People united, can never be defeated.

On that note, best wishes for the new year to all you mob out there in the big wide world, may the vibes be positive, our spirits high, strong enough to change what allegedly can't be changed, patient enough to not lose heart in those sure to come times when the world seems to have conspired against us.

If I had my life to live over, I would start barefoot earlier in the spring and stay that way later in the fall. - Nadine Stair

Jan 2, 2013 - 12:28pm


2/1 is good enough for me.

Jan 2, 2013 - 12:31pm



am THE Realitybiter.

You can deny reality, but not its effect. Or so.

It bites hard.

I'm just glad that Chris Dodd got tax law and the movie expense straightened out (he's their new lobbyist)....they expired the tax expense rule at the end of 2011 and then made it effective for 2012, but did not codify this until 2013, yesterday. Great. I'll just get in my time machine and make a movie last year. Genius. not.

Good luck to all in 2013

At dinner last night my straight-shootin' (figuratively) young daughter, who would not harm a fly (literally) said, out of nowhere:

"I heard President Obama wants to take away everyone's guns. are people supposed to stop bad guys, then?"

good point.

Jan 2, 2013 - 12:41pm

"massive tax increases"  Yes,

"massive tax increases" Yes, the rates went up, but in my opinion the net result will be tax revenue neutral, or we could even see tax revenue declines!

What will the political parties do when higher tax rates do nothing to bring in more tax revenue? We enter the "end game".

Jan 2, 2013 - 12:44pm

Had a great Holiday, but we're doomed...

Happy New Year, Turdites!

While the Turd is still on vacation, I’m back. I spent last week with family and friends, and after a week of hanging out on the beach, talking, eating and drinking, all I can say is “we’re doomed.”

Don’t get me wrong. I enjoyed the social aspect of the vacation, but after engaging in conversations ranging from the “fiscal cliff” to the CT shootings, I’m more certain than ever that as a group, Americans have lost the ability to think critically and question authority (George Carlin was right). A once proud heritage as skeptics (with Missouri even being known as the “show me” state) of media and government is long gone. No one has their “bullshit meters” plugged in any more – either because they don’t know how to think, or don’t care to understand what’s going on around them. Pitiful. They rely on whatever the MSM is broadcasting. We had a lot of fun, but I’m concerned that no one is preparing for the end of the Keynesian experiment.

By way of background, and to prove that IQ scores aren’t the primary requirement for independence of thinking, let me just state that all of my immediate family possess graduate level degrees (medical doctors, professors, etc.). I even had a stint as a bit of a rocket scientist in the space shuttle program many years ago. The inability to apply all of their mental horsepower in any manner approaching critical, linear thinking left me somewhat stunned.

I ended up being the odd man out most of the week.

Since the “fiscal cliff” was front page news the whole time, it came up in conversation. The Prez didn’t help by solemnly proclaiming that there would be a “plunge” back into recession if no deal was struck. I asked a simple question over breakfast one morning when the various Dems and Repubs were browbeating each other as to which group was at fault for the impasse. I said, “it really doesn’t matter, because the debt situation has passed the point of no return – all you have to do is look at how much Bernanke is printing to know it will end badly.” Silence. So I asked what I thought was a simple question, hoping to illustrate that all the fiscal cliff nonsense was a rounding error in relation to the annual deficit, which pales in comparison to the official national debt and is positively dwarfed by our unfunded liabilities. “How big is the national debt?” Closest answer was $10 trillion. Ruh Roh. I ran them all through the math pointing out that taxing all of the “rich” at 100% (or everyone at 40% above current rates) and cutting entitlements still wouldn’t close the annual deficit, much less make a dent in the outstanding mountain of debt. So, Benny is left to print, which is going to hobble the economy and reduce purchasing power until Mr. Market shows up and imposes some painful discipline, complete with the social fallout. I pointed to Greece and the Middle East as the ghost of Christmas future when Mr. Market imposes some heavy austerity, and was told “that won’t happen here.” Uhmmm. OK.

Some other topics included the CT shooting, and not to make light of it being a tragic event, I had some fun with the ensuing discussion at dinner one night. The general consensus was that “assault weapons” should be banned. “Nobody except the police or military needs guns like that.” “Civilians shouldn’t have access to automatic weapons (I know, they are technically semi-auto’s, but roll with me on this).” “They need to outlaw gun shows.” “They should give tax credits for people who turn their guns in.” Etc. Etc. You get the picture. I just sat there while everyone got worked up and indignant, waiting for the right time to weigh in on the other side of the debate, but my young daughter beat me to it. “Daddy, don’t you have an AR-15? That’s the one I learned to shoot, right?” Everyone looked directly at me. “As a matter of fact, I do. And I have its big brother, the M1A too.” Hee Hee.

I won’t go in to specifics, but some other things I brought up with the crew, which they had either never heard of, or just parroted back what the MSM puts out:

  • MF Global (run by who? Corzine, bundler extraordinaire, Goldman alum, etc.)
  • Unemployment rate (no one had heard of Mr. Williams at Shadow-stats, or ZeroHedge)
  • CPI (“oh, it’s low”)
  • Quantitative Easing (“isn’t that where the Government borrows money from China?”)
  • Physical gold ownership – the only one who has phyzz was the family friend who is 85 years old and grew up in Germany during WW2 (imagine that)

Bottom line?

  • I’ll keep pushing to educate those closest to me because I care about them, but I still have some work to do, apparently. My first recommendation was to check out TFMetalsReport!
  • I thoroughly enjoyed the time spent with them in spite of our different views
  • Holiday memories are priceless

Just to round out the week, on the way back home I was “randomly selected” to have my hands and bag swabbed for “explosives residue” by the TSA at the airport. I don’t believe in coincidences, so I’m guessing that wearing my Freedom Munitions baseball cap probably had something to do with it!

Jan 2, 2013 - 12:45pm

Dow/Gold ratio, never talked

Dow/Gold ratio, never talked about on CNBC or anywhere else, this ratio is going to 1 or even lower before it's all done, it's got many years to go.

The Watchman
Jan 2, 2013 - 12:45pm
Jan 2, 2013 - 12:46pm

Dow to Gold ratio


If you look at the most recent, full cycle contraction of the ratio, starting in the 60's and ending in 1980, there were many counter rallies on the way to the bottom. That two year period in the mid-70's was brutal....and then gold exploded, sending the ratio crashing.

1:1 may not happen. It might be 1:5. Or 2 or 3. Who knows? This is not the 70's. We are likely more like Britain in the early 20th century....the pound never recovered its status as reserve currency....All this represents is the destruction of paper assets, contracts, debts and the indestructible hard asset. Do you really think the 100 trillion dollar unfunded medicare bill is going to be paid? Not a chance. Never. It cannot. The only possible way would be if the dollar were devalued somewhere around 80%....but even that would not fix the problem. The problem is healthcare being monopolized by the industry and regulations meant to protect the monopoly. Ditto for banking, education, defense....etc,etc,etc


Jan 2, 2013 - 12:50pm

Will 2013 be the year of the "flash crash" ?

Another "Algo Gone Wild" Bailed Out By Nasdaq After Mini Flash Crash

Submitted by Tyler Durden on 01/02/2013 - 12:39

2013 has begun just as 2012 progressed as Granite Construction just plunged 12.6% in under one second. As Nanex shows below, it is simply ludicrous. Of course, the algos (like every entity that comes close to 'failing' in the new normal) will never learn since, as usual, NASDAQ has decided to cancel the trades... *NASDAQ TO CANCEL SOME TRADES IN 'GVA' FROM 11:45-11:46ET AT/BELOW $32.72 11:45AM-11:46AM S.S.D.Y.


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 4/15

4/16 9:15 ET Cap Util and Ind Prod
4/17 8:30 ET Trade Deficit (Feb)
4/17 10:00 ET Wholesale Inventories
4/18 8:30 ET Retail Sales (March)
4/18 8:30 ET Philly Fed
4/18 10:00 ET Business Inventories (Feb)
4/19 8:30 ET Housing Starts and Building Permits

Key Economic Events Week of 4/1

4/1 8:30 ET Retail Sales (Feb)
4/1 9:45 ET Markit & ISM Manu PMIs
4/1 10:00 ET Construction Spending (Feb)
4/1 10:00 ET Business Inventories (Jan)
4/2 8:30 ET Durable Goods (Feb)
4/3 9:45 ET Markit & ISM Services PMIs
4/5 8:30 ET BLSBS

Key Economic Events Week of 3/25

3/26 8:30 ET Housing Starts (Feb)
3/27 8:30 ET Trade Deficit (Jan)
3/28 8:30 ET Q4 GDP final guess
3/28 10:00 ET Pending Home Sales (Feb)
3/29 8:30 ET Personal Income (Feb)
3/29 8:30 ET Consumer Spending and Core Infl. (Jan)
3/29 9:45 ET Chicago PMI
3/29 10:00 ET New Home Sales (Feb)

Recent Comments

by Nijle, 2 hours 35 min ago
by J Siefert, 6 hours 52 min ago
by scoremore, 7 hours 30 min ago
by scoremore, 8 hours 20 min ago
by Wizdum, Apr 19, 2019 - 11:44pm