Travel Day

386
Thu, Jan 3, 2013 - 12:06pm

Between packing and heading to the airport, I thought I'd squeeze in this post.

Not much happening today ahead of the FOMC minutes and the BLSBS tomorrow. The metals are consolidating their recent rebound gains and poised to add another leg higher if we can get the headlines we're looking for.

The FOMC minutes will be interesting in that they will be from the meeting back in December when QE∞ was formalized. They'll be released later today so be sure to check ZH or some other news source for the stories.

For now, the metals are hanging around some moving average levels that need to be watched, particularly in silver. I've got the 200-day MA at 30.85 and, so far, that level has acted as support. Let's hope that it holds above there and begins to move higher after all of the news. The 20-day, 50-day and 100-day are all in the 31.50-32.50 area and that is where the next level of resistance will be found if the rally can extend higher.

Lastly, everyone needs to watch the 10-year and the Long Bond over the next few days. Both are sitting at critical support levels which, if broken, will lead to lower prices (higher rates). As you know, QE is all about providing buying support for the treasury market and, if the bond market begins to break down, it would be a sign that the current $85B/month isn't sufficient for this purpose. I have no doubt that the $85B/month level will need to be increased in 2013 given the current run rate of a $1.7T+ federal deficit. A falling bond market might make this happen sooner rather than later.

Have a great day. Tomorrow it's back to business as usual and there will be a full, new post sometime after the BLSBS at 8:30 EST.

TF

About the Author

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

  386 Comments

rl999
Jan 4, 2013 - 11:15am

Lib / Progressive / Dem 'logic'

Feinstein Admits New Federal Gun Control Laws Would Be Based On Picture Books

New Jersey --(Ammoland.com)- On December 21st , gun grabbing elitist Dianne Feinstein held a press conference broadcast on C-SPAN to offer her response to the NRA press conference on the Sandy Hook Massacre.

The press conference was shocking, Feinstein openly and publicly admitted that the basis for her new, confiscatory gun banning proposal amounted to looking through a stack of magazines or fine books like the The Illustrated World Encyclopedia of Guns,as opposed to anything approximating actual , fact based research. Fortunately for Feinstein, books and magazines have lots of pictures, as apparently big words like those that are used in drafting new laws or reading and correctly interpreting existing ones are to much for her to grasp.

napa698
Jan 4, 2013 - 11:17am

They won't give up

BREAKING: Illinois Modern Firearms Ban Bill Back in Play on Sunday

Posted on January 4, 2013 by Robert Farago

TTAG’s sources in Illinois tell us that Governor Quinn (aided by the Chicago Mayor and former White House Chief of Staff Rahm Emmanuel) will lead the charge to revive and pass the gun and magazine ban and shooting range regulations bills when the House reconvenes for the lame duck session on Sunday at 5pm. Watch this space. Meanwhile, if you want to know exactly what’s in play, make the jump for the Illinois State Rifle Association’s summary of the week’s battles . . .

Continue rea

Mr. Fix
Jan 4, 2013 - 11:18am

@ Byzantium

There is no point in trying to correct what is already correct.

The analysis that all of the numbers are contrived and designed to steer everyone in the wrong direction

is the only possible correct conclusion at this point.

How they arrive at the numbers is irrelevant.

It would imply that there is still some integrity in the system.

There is not.

4406PACK
Jan 4, 2013 - 11:20am

Peter SCHIFF

Congress Sells America Down the River to Avoid the Fiscal Cliff

PETER SCHIFF ENJOY!

ancientmoney Byzantium
Jan 4, 2013 - 11:23am

@Byzantium re: capitulation by longs

This makes sense in light of my earlier post wherein I postulated that JPM runs both sides of the COMEX; they are both long and short, so can run things any way they please.

Of course, there are straw-men involved, as doing so straight-up would definitely be "illegal" and the CFTC would be all over their a$$es (yeah, right).

As said by many here, prepare, and stack. We, as ants, are being handed a gift to be able to still buy silver and gold at COMEX-derived prices.

Everything, all markets are contrived to keep people in their traces. Gold and silver are Triffin goods--as their price rises, more people want to own them. The PTB know this! That is why we here have this opportunity. It will end, and if you don't have your preps done, and PMs stacked when it happens, you will be SOOL.

Byzantium
Jan 4, 2013 - 11:27am

@ Mr Fix re data designed to deceive

It only deceives if you believe in it.

It is still interesting to track. Such that many still do, I was responding to Orange's comment in light of Dan Norcini's interview.

I know what you are trying to say, but my post did have a context.

cheers

El Gordo
Jan 4, 2013 - 11:27am

A recent addition to the JPM staff (H/T Instapundit)

A few years ago, at a Las Vegas convention for magicians, Penn Jillette, of the act Penn and Teller, was introduced to a soft-spoken young man named Apollo Robbins, who has a reputation as a pickpocket of almost supernatural ability. Jillette, who ranks pickpockets, he says, “a few notches below hypnotists on the show-biz totem pole,” was holding court at a table of colleagues, and he asked Robbins for a demonstration, ready to be unimpressed. Robbins demurred, claiming that he felt uncomfortable working in front of other magicians. He pointed out that, since Jillette was wearing only shorts and a sports shirt, he wouldn’t have much to work with.

“Come on,” Jillette said. “Steal something from me.”

Again, Robbins begged off, but he offered to do a trick instead. He instructed Jillette to place a ring that he was wearing on a piece of paper and trace its outline with a pen. By now, a small crowd had gathered. Jillette removed his ring, put it down on the paper, unclipped a pen from his shirt, and leaned forward, preparing to draw. After a moment, he froze and looked up. His face was pale.

“Fuck. You,” he said, and slumped into a chair.

Robbins held up a thin, cylindrical object: the cartridge from Jillette’s pen.

Byzantium
Jan 4, 2013 - 11:30am

How I've been trading this waterfall

If you've got this far, then hooray, somebody is interested.

I sold 5% of my tradable portion, to hell with the paper loss. This is in principle added to my dry powder.

The metal sold was all gold. The charts look ugly, so it is my hedge against a price crash.

I have put buy orders into silver, from the proceeds. Since the gold proceeds per ounce are now a done deal and at known rates, silver purchases will be triggered starting at a GSR ratio of 60.

If they never get triggered, then the proceeds will remain as an increment to my dry powder. But at the expense of some marginal losses, my strategic position is stronger, in terms of risk management. Upside action will benefit the 95% of my tradable portion that remains.

Having dry powder makes these smack-downs become opportunities rather than traumas. I was running low on powder, and now less so. If we get another waterfall, then I have a horse still in the race. I'll not use most of it unless we see sub $26 and sub $1500.

Good luck to all!

Mr. Fix
Jan 4, 2013 - 11:31am
treefrog
Jan 4, 2013 - 11:32am

tkrff

tinka! still kicking myself for not buying more when it was under half a buck.

Mr. Fix
Jan 4, 2013 - 11:36am

Good trades require lots of volatility.

Byzantium :

There is no denying that there is lots of opportunity here, the challenge is that it is so unpredictable.

tyberious
Jan 4, 2013 - 11:43am

The Other "Mint" Campaign

The Other "Mint" Campaign Starts Off With A Bang: US Mint Sells 50,000 Ounces Of Gold On First Day Of Year

Submitted by Tyler Durden on 01/04/2013 - 10:55

And we're off to the races. Despite, or maybe thanks to, the relentless collapse in paper gold prices, US retail continues to ignore the day to day fluctuations in the stated value of the shiny metal (most of it driven by the BIS' Benoit Gilson), and instead has learned to take advantage of every drop to BTFD. As the US mint website reports, the very first day of 2013 saw a whopping 50,000 gold ounce sales, and another 7,000 on the second, which is nearly the entire amount sold by the mint in December, and just shy of half in all of January 2012. Which in turn means that gold raids are now becoming counterproductive: instead of disincentivizing retail purchases, they are merely accelerating them, in the process leading to ever more paper to physical currency conversion. The "trillion dollar platinum coin" may well be the dumbest idea around, but the "one ounce gold coin" idea is rapidly becoming the most popular one, shared by all who see that the only possible outcome for the "developed world" is more ceaseless devaluation of every paper currency in the world.

Rui
Jan 4, 2013 - 11:56am

Not reading too much into Silver OI yet

The OI published today was before the FOMC announcement I believe so it does not show the market reaction yet. Probably have to wait til Monday and next Friday's COT to evaluate the situation.

thurd aye
Jan 4, 2013 - 11:59am

Could someone put that

Could someone put that Netflix 'forks over knives' up on here,or in Speakeasy?

I can't get Netflix in South Africa((( Thanks.

ancientmoney
Jan 4, 2013 - 12:15pm

Snippet from ZH article on mint gold sales:

"As the US mint website reports, the very first day of 2013 saw a whopping 50,000 gold ounce sales, and another 7,000 on the second, which is nearly the entire amount sold by the mint in December, and just shy of half in all of January 2012. Which in turn means that gold raids are now becoming counterproductive: instead of disincentivizing retail purchases, they are merely accelerating them, in the process leading to ever more paper to physical currency conversion. The "trillion dollar platinum coin" may well be the dumbest idea around, but the "one ounce gold coin" idea is rapidly becoming the most popular one, shared by all who see that the only possible outcome for the "developed world" is more ceaseless devaluation of every paper currency in the world."

--------------------------------------------------------------------------------------------

My guess is that they delayed reporting a lot of December sales, to keep it looking dull. Either way, a lot of people want physical.

RunRunRun
Jan 4, 2013 - 12:18pm

@byzantium

Thanks for the notes on dealing with the waterfall. Given the trends and lack of dry powder, I also sold about 20% of my physical gold stack a few days back at ~1660 and have now started layering into physical silver purchases to take advantage of the gold-silver ratio.

You said you had buy orders for gs ratio of 60. Guess you are doing that in Bullionvault but I wasn't aware that you could make an order for a particular ratio. Can you clarify that is what you are doing and how?

Cheers

Operator 14
Jan 4, 2013 - 12:26pm

thurd aye

it is on youtube, but they want US$3.99

not sure how all that works, never having bought a movie thru youtube

it brought up something called "Google Wallet", i stopped there

Byzantium
Jan 4, 2013 - 12:51pm

@ RunRunRun

Hi RunRunRun,

thanks for the interest.

yes, Bullionvault.

I know what price I sold my gold for, and I calculate the silver price required to get a particular GSR. I then use those calculated silver prices to set up my buy orders.

Either my cash will remain dry powder, else it will buy me silver at a GSR of at least 60. I don't mind in this instance, which it is.

Cheers

Byz

thurd aye
Jan 4, 2013 - 1:06pm

Op14...thanks.

Op14...thanks.

RunRunRun
Jan 4, 2013 - 1:33pm

GSR

Thanks for the feedback Byz. Got it now. Had thought you meant your BV buy order would automatically purchase silver when the actual realtime GSR reached a particular level. Was confused by that, but the method you describe makes perfect sense.

Hope it works out for you - you should make some coin out of that if silver drops sufficiently, which could happen.

My first purchase was G to S at 56.3:1 which isn't particularly good but would increase my gold stack for free if we start swinging up from here till Feb (also not impossible).

Rui
Jan 4, 2013 - 2:16pm

NEM looks strong

It spent most of today in green while gold was down 1%. The money flow is building up since late December with strong buying volume in the 44 zone.

Byzantium
Jan 4, 2013 - 3:24pm

@ RunRunRun

I'd have replied sooner, but the site was down.

The good thing about the GSR trade, notwithstanding the patience required, is that it sometimes gives a trading option to our existing stake, even when both metals are plunging, so long as they don't move at the same rate. Ditto when they are rising, but not at the same rate.

In conjunction with the traditional buy with cash /sell for cash trade, it adds to the pool of trading possibilities.

I consider gold, silver, Dollars, Euro and UK pounds, as five currencies to play off against each other. I use Bullionvault. I switch whichever is strong, for whatever is weak. Rinse, repeat.

The PM volatility these last few days, was most pronounced in dollars. I sold the highs, in dollars, and bought the dips, in dollars. Through BV, you choose which fiat to exchange your metal for. I keep a stock of all currencies.

If metals rise in perfect syncronicity, I sell for fiat. If one rises before the other, and triggers a GSR threshold relevant to my past decisions, I trade metal for metal. Trading to fiat risks missing a big PM up move (e.g. HEH). Metal to metal, keeps you in the game. Sometimes though, it is time to veer more towards cash.

If I trade for cash, I note at what price the other metal needs to be, to set a nice GSR trade, and set up a buy order at that level.

It sounds lucrative, but there is so much waiting involved, and critically, one is hostage to past decisions. If you swap gold for silver at a GSR of 56, and then the GSR stays above 60 for the next two years, then the only available GSR trade is to keep swapping gold for silver; it makes no sense to go the other way till it falls below 56 again.

At some point, separate activities collide, e.g GSR trade says sell gold & buy silver, but low prices say stock up on gold. That's a whole different topic; keep playing and you will hit it. Then ping me.

babaganoush2307
Jan 4, 2013 - 6:24pm

Has anyone ever heard of this?

Very interesting stuff, the banks even shut the shit down back in 1933. They hate Austrian economics because it doesn't allow them to control everybody through debt...

https://en.wikipedia.org/wiki/W%C3%B6rgl

Wörgl From Wikipedia, the free encyclopedia Jump to: navigation, search
Wörgl
Coat of arms
Wörgl Location within Austria
Location within Kufstein district [show]

Coordinates: 47°29′N 12°04′E / 47.483°N 12.067°E / 47.483; 12.067Coordinates: Click the blue globe to open an interactive map. 47°29′N 12°04′E / 47.483°N 12.067°E / 47.483; 12.067
Country Austria
State Tyrol
District Kufstein
Government
Mayor Hedi Wechner (SPÖ)
Area
• Total 19.68 km2 (7.60 sq mi)
Elevation 511 m (1,677 ft)
Population (1 January 2012)[2]
• Total 12,723
• Density 650/km2 (1,700/sq mi)
Time zone CET (UTC+1)
• Summer (DST) CEST (UTC+2)
Postal codes 6300-6302
Area codes 043-5332
Vehicle registration KU
Website www.woergl.at

Wörgl is a town in Tyrol, Austria, in the Kufstein district. It is 20 km from the state border with Bavaria

The Wörgl Experiment

One Schilling note with demurrage stamps from Wörgl

Wörgl was the site of the "Miracle of Wörgl" during the Great Depression. It was started on the 31st of July 1932 with the issuing of "Certified Compensation Bills", a form of currency commonly known as Stamp Scrip, or Freigeld. This was an application of the monetary theories of the economist Silvio Gesell by the town's then mayor, Michael Unterguggenberger.

The experiment resulted in a growth in employment and meant that local government projects such as new houses, a reservoir, a ski jump and a bridge could all be completed, seeming to defy the depression in the rest of the country. Inflation and deflation are also reputed to have been non-existent for the duration of the experiment.[citation needed]

Despite attracting great interest at the time, including from French Premier Edouard Daladier and the economist Irving Fisher,[3] the "experiment" was terminated by the Austrian National Bank on the 1st September 1933[4][5]

In 2006 milestones were placed, beginning from the railroad station through the downtown, to show this history.

babaganoush2307
Jan 4, 2013 - 6:31pm

More on the very interesting worgl experiment!

The Wörgl Experiment: Austria (1932-1933)

Submitted by blietaer on March 27, 2010 – 7:34 amNo Comment

In 1932, in the midst of the Great Depression, the small town of Wörgl in Austria successfully experimented with its own local currency (in the form of a stamp scrip). Based on the thinking of Silvio Gesell, an early 20th-century economist, and designed to stimulate the local economy, the new currency helped put the population back to work, and inspired many other communities to want to follow its example, until the experiment was abruptly terminated by Austria’s Central Bank in 1933. The following is the story of the “miracle of Wörgl” as told in The Future of Money (pp. 153-155).

——————————————————————————————————————-

One of the best-known applications of the stamp scrip idea was applied in the small town of Wörgl in Austria in 1932 and 1933. When Michael Unterguggenberger (1884-1936) was elected mayor of Wörgl, the city had 500 jobless people and another 1,000 in the immediate vicinity. Furthermore, 200 families were absolutely penniless. The mayor-with-the-long-name (as Professor Irving Fisher from Yale would call him) was familiar with Silvio Gesell‘s work and decided to put it to the test.

Michael Unterguggenberge

He had a long list of projects he wanted to accomplish (re-paving the streets, making the water distribution system available for the entire town, planting trees along the streets and other needed repairs.) Many people were willing and able to do all of those things, but he had only 40,000 Austrian schillings in the bank, a pittance compared to what needed to be done.

Instead of spending the 40,000 schillings on starting the first of his long list of projects, he decided to put the money on deposit with a local savings bank as a guarantee for issuing Wörgl’s own 40,000 schilling’s worth of stamp scrip. He then used the stamp scrip to pay for his first project. Because a stamp needed to be applied each month (at 1% of face value), everybody who was paid with the stamp scrip made sure he or she was spending it quickly, automatically providing work for others. When peoople had run out of ideas of what to spend their stamp scrip on, they even decided to pay their taxes, early.

Wörgl was the first town in Austria which effectively managed to redress the extreme levels of unemployment. They not only re-paved the streets and rebuilt the water system and all of the other projects on Mayor Unterguggenberger’s long list, they even built new houses, a ski jump and a bridge with a plaque proudly reminding us that ‘This bridge was built with our own Free Money’ (see photographs). Six villages in the neighborhood copied the system, one of which built the municipal swimming pool with the proceeds. Even the French Prime Minister, Édouard Dalladier, made a special visit to see first hand the “miracle of Wörgl.”

It is essential to understand that the majority of this additional employment was not due directly to the mayor’s projects as would be the case, for example, in Roosevelt’s contract work programmes described below. The bulk of the work was provided by the circulation of the stamp scrip after the first people contracted by the mayor spent it. In fact, every one of the schillings in stamp scrip created between 12 and 14 times more employment than the normal schillings circulating in parallel. The anti-hoarding device proved extremely effective as a spontaneous work-generating device.

Wörgl’s demonstration was so successful that it was replicated, first in the neighboring city of Kirchbichl in January of 1933. In June of that year, Unterguggenberger addressed a meeting with representatives of 170 other towns and villages. Soon afterwards 200 townships in Austria wanted to copy it. It was at that point that the central bank panicked and decided to assert its monopoly rights. The people sued the central bank, but lost the case in November 1933. The case went to the Austrian Supreme Court, but was lost again. After that it became a criminal offence in Austria to issue “emergency currency.”

… does it sound familiar? Only a central authority saviour can help people who are not allowed to help themselves locally. Ans as all economists will point out, when there is enough demand, supply always manifests in some way. Even if you have to import it. During the Anschluss of 1938, a large percentage of the population of Austria welcomed Adolf Hitler as their economic and political saviour. The rest is well known history.

Kenscott achmachat
Jan 5, 2013 - 12:01am

Re: Ebay Experiment

Were they coins or just pure rounds? Also, you can often cut your selling loss by doing a Buy-It-Now if the total amount is a good bit over $50.

Sorry they went so low. If I am not selling in lots, I normally sell an Auction item with a starting bid which is the lowest I am willing to take. If that is not met, I simply do not sell.

Bobbejaan thurd aye
Jan 5, 2013 - 9:00am

RE :- Celtic blessing on you all

Quote:
Celtic blessing on you all.
Submitted by thurd aye on January 4, 2013 - 8:03am.

May the road rise to meet you,
May the wind be always at your back.
May the sun shine warm upon your face,
The rains fall soft upon your fields.
And until we meet again,
May God hold you in the palm of his hand.

May God be with you and bless you:
May you see your children's children.
May you be poor in misfortune,
Rich in blessings.
May you know nothing but happiness
From this day forward.

May the road rise up to meet you
May the wind be always at your back
May the warm rays of sun fall upon your home
And may the hand of a friend always be near.

May green be the grass you walk on,
May blue be the skies above you,
May pure be the joys that surround you,
May true be the hearts that love you.

That's the "tourist" version .... Which doesn't mention the most important punchline often used in Ireland :-]

"And may you arrive in Heaven five minutes before The Devil realises you're dead."

Contribute

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 3/18

3/19 10:00 ET Factory Orders (Jan)
3/20 2:00 ET FOMC Fedlines
3/20 2:30 ET CGP presser
3/21 8:30 ET Philly Fed
3/22 9:45 ET Markit PMIs
3/22 10:00 ET Existing Home Sales
3/22 10:00 ET Wholesale Inventories (Jan)

Key Economic Events Week of 3/11

3/11 8:30 ET Retail Sales (Jan)
3/11 10:00 ET Business Inventories (Dec)
3/12 8:30 ET CPI (Feb)
3/13 8:30 ET Durable Goods (Jan)
3/13 8:30 ET PPI (Feb)
3/14 8:30 ET Import Prices (Feb)
3/14 10:00 ET New Home Sales (Jan)
3/15 8:30 ET Empire State Manu Index
3/15 9:15 ET Cap. Util. & Ind. Prod.

Key Economic Events Week of 3/4

3/5 9:45 ET Markit and ISM services PMIs
3/5 10:00 ET New home sales (Dec)
3/6 8:30 ET Trade Balance (Dec)
3/7 8:30 ET Productivity and Unit Labor Costs
3/8 8:30 ET BLSBS
3/8 8:30 ET Housing starts (Jan)

Recent Comments

by RonUK, 56 min 5 sec ago
by lakedweller2, 1 hour 18 min ago
by Turd Ferguson, 1 hour 26 min ago
by Turd Ferguson, 1 hour 34 min ago
by canary, 1 hour 35 min ago
randomness