ChartDaddy Returns

203
Tue, Jan 8, 2013 - 1:36pm

This is way more charts than I've ever given you in one post. I hope you're ready.

For now, the metals are both being contained below their 200-day moving averages of gold at $1667 and silver at $30.82. So, while the metals continue in a holding pattern, I thought that today would be an excellent day to give you this massive update and, perhaps, make some general assumptions about 2013.

The problem with doing this is knowing where to start and how to put these into an order that makes some sort of logical sense. Since "logical sense" eludes me at this moment, I'm just going to dump them on you, instead.

First up, here are daily charts of the euro and copper. Note how closely they tracked each other through 2012. Actually, it would probably be more accurate to say "look how closely copper tracked the euro". Also notice how both declined in mid-December but recovered in late December.

Now look how closely silver has also tracked the euro in 2012. Note that silver fell in mid-December, too, but did not see the rebound that copper did. Hmmm. Is paper silver undervalued by 10%?

Next, let's look at the bond market. I've suggested to you that QE of $85B/month is not enough to fund the 2013 deficit, which looks to be in the $1.6-1.7T range. Falling prices/rising rates would also suggest that more Fed "support" is needed in the bond market. My guess is we'll see it soon...probably when the 10-year approaches the 127-128 level and the Long Bond is threatening to break down through 140.

Let's begin the currency discussion with the POSX. Remember and never forget that the POSX is simply a reflection of The Pig versus other rapidly-devaluing fiat currencies. The fact that the POSX is flat over the past five years only means that other global fiat have declined in value by an equivalent amount.

So, in that context, look at The Pig vs the yen. Yikes! Were you aware of this? We'll definitely need to watch this relationship over the next few weeks and months.

Another very interesting currency chart is the Swissie. From mid-2010 through mid-2011, the Swiss franc rallied almost 40% as it was perceived to be the final and only "safe haven" fiat currency. Well, the Swiss didn't like that too much as they keynesian-foolishly feared that a strong franc would wreck their economy. So, they did what all centrally-planning keynesians do, they devalued by pegging the swissie to the euro in early September of 2011. (Recall, too, that this left gold as the only remaining "safe haven" currency and it was carpet-bombed a full five minutes before the announcement was made and has been firmly held in check ever since.) Well, now, the swissie (and, by extension, the euro) has begun to form a massive, bowl-shaped bottom on this weekly chart. Hmmmm....could this foretell a POSX breakdown in 2013?

Let's now switch to crude, where a trading opportunity may be developing. (Full disclosure: Like most everything else, I missed the boat quite often in crude in 2012.) Look at these charts. A pullback to 91-92 would sure seem to present a buying opportunity for a move to 98-100. From there, a consolidation would paint the chart with a massive, cup-and-handle formation and would make the chart look like 115+ by mid year.

The old adage among grain traders is "buy on Valentine's Day and sell on Mother's Day". That strategy certainly looks like a good idea in 2013, too. The drought in the U.S. Midwest has not lessened at all this winter ( https://droughtmonitor.unl.edu/12_week.gif) so you can rightly expect some rapid gains this spring if the next growing season begins dry, too. I'll definitely be looking to dabble in beans next month, especially if price can fall a bit further, toward $13.

And this is interesting. Have you been to the market lately and thought, "Damn, that shit's expensive" when looking at steaks and burgers? If so, this next chart will show you why. It's a weekly chart of Live Cattle and note that since the advent of Quantitative Easing in 2009, beef prices have risen over 60%. Is your salary up by 60%, too? No? Hmmm...the major problem here is that soaring "protein" prices will ultimately lead to civil unrest, first in the 3rd world but, eventually, here in The West, as well. Watch this closely in 2013 as it has the potential to develop into a real problem.

And get a load of this next chart...Lumber. Apparently lumber didn't get the memo post-QE∞. Since mid-September, it's up over 40%. Permanently low rates means a housing recovery? I don't think so but clearly the lumber market does! Either this sucker rolls over soon or, eventually, a lot of other commodities are going to have to play catch up. Another chart to watch closely in the weeks and months ahead.

And, finally, here's the S&P. I guess we're all just dumb-as-a-box-0f-rocks for buying metal over the past four years when we could have been buying and holding stocks, instead. UP over 100% since the initiation of Quantitative Easing in March of 2009, more than just about any other paper "asset" and you get a dividend! Isn't it interesting that all of this money printing leads stocks higher than everything else? Gee, I wonder why that could be?

Perhaps THIS has a little something to do with it. Please take the time to read this very important and informative article from ZH. It's one of the most important things they've written in quite a while. https://www.zerohedge.com/news/2013-01-07/dear-steve-liesman-here-how-us-financial-system-really-works

And buried within that article is the paragraph near-and-dear to my heart and the hearts of all of Turdville. This is the mechanism through which JPM conceals their manipulative actions from the CFTC and everyone else:

"Now the JPM spin is well-known: the CIO was merely there to "hedge" exposure, as a direct prop bet would be illegal as per the Volcker Rule, not to mention the avalanche of lawsuits and the regulatory nightmare that would ensue if it became clear that the firm was risking what amounts to deposit capital to fund massive, highly risky prop trading bets. Which, when one cuts out the noise, is precisely what JPM did of course, especially since the "hedge" trade blew up just as the market tumbled in the spring of 2012, a time when it should have otherwise hedged the balance of the firm's otherwise bullish posture. That it did not do this refutes the logic that this was a hedge, and confirms that what JPM was doing was nothing short of using an internal, heavily shielded hedge fund, which had $323 billion in collateral as investable equity, to trade away, knowing very well no regulator would dare touch JPM."

OK, that's all for today. I look forward to reading your comments.

TF

About the Author

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tfmetalsreport [at] gmail [dot] com ()

  203 Comments

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Mr. Fix
Jan 8, 2013 - 11:05pm

@Mr.Fix

I had not even thought they might debase bullion coins.

I'm glad I've recently switched to stacking 90%. They can't debase Mercury dimes or Franklin halves.

Mr. Fix
Jan 8, 2013 - 11:02pm

Reply to MANDATORY READING!!!!!! by Revelation

Okay, I read it.

https://dont-tread-on.me/wp-content/uploads/2013/01/ASilverNightmare01021...

When you comment by saying “don't think they won't...”, all I can think of is,

that is exactly what they will do.

more specifically stated, I think that is what they will try to do. I know we often joke about our precious metals being on the bottom of the local reservoir, Lake, River, or local fishing hole, but when it comes right down to it,

there is really quite a terrifying scenario unfolding right before our eyes, and it is going to be a mess.

The article that you cited in your post, seems just a little bit contrived, but at the same time, it also seems exactly how I would expect such conversations to unfold. People that are completely on restrained by a moral code are capable of some amazingly evil deeds. We will know pretty quickly how much support they actually have, and I will have to adjust my strategy accordingly.

If a large percentage of the military backs the American people, and fights against the Evil Empire and their lawless government agencies, then they will have overreached, and will be slaughtered.

If however the majority of the American military turns upon its own citizens,

it will be time to bug out and prepare to fight another day.

Either way, I will fight for freedom, I just don't know what strategy to use until I see it unfold.

I am working to prepare for either outcome.

Heck, if I have to be, I could even be my own local warlord.

Edit:

Thanks Puck,

I was just looking for a good bedtime story, and there it is!

Looks like something I will enjoy too,

good night.

TomMack
Jan 8, 2013 - 11:01pm

what's cooking swedish chef

is it up or down? and what of the wti to brent spread ?

Jan 8, 2013 - 10:51pm

@Mr.Fix: Speaking of “the end

@Mr.Fix: Speaking of “the end of the great Keynesian experiment”

https://www.youtube.com/watch?v=bYkl3XlEneA

ancientmoneyAnonymous
Jan 8, 2013 - 10:50pm

@Revelation

Savoie is really good at connecting dots. I think he may give them credit for being even more sinister than they actually are.

But I do think they'll shut down COMEX silver and gold trading, SLV will be shut down, and silver declared a strategic metal, with some nationalization of silver production. This will all be done before any serious rise in the PMs is allowed.

That will herald the end of paper PMs (approach zero), and the one-time reset of physical.

The Swedish Chef
Jan 8, 2013 - 10:39pm

Brent, which is all I ever

Brent, which is all I ever traded, seems to be forming a massive flag formation and has a nice, firm bottom (yeah, I went there...) around $106 which has been a money-in-the-bank entry point for the last two years. I fully expect it to pull back and break out before summer. Macro doesn´t look good either so I guess this is where your digital TP should be at.

Mr. Fix
Jan 8, 2013 - 10:35pm

@ Puck T. Smith

The thank you for posting that article, I do not find it at all off-topic, “the end of the great Keynesian experiment” seems to be described perfectly in that article.

It's probably too late to do anything about it, but the conclusion at the end that people who are being supported by the government should voluntarily not vote, seems just a bit pointless.

I guess all hope is lost that our government somehow would refuse the right to vote to our nations parasitical class.

The entire system is collapsing, and there isn't a damn thing anybody is going to be able to do about it.

Anyway Puck, it's articles like that that I come to TF Metals Report for, they give me an insight into what's really been going on, and what to expect in the future.

Besides, there's really not much to talk about on the charts.

Save_America1st
Jan 8, 2013 - 10:27pm

great statement right here...

Video unavailable

obviously it wasn't directed at Ron Paul...I think Ron facilitated Mr. Gray's appearance in front of the committee at the time. Great job!!! I bet he was freakin' loving it afterwards getting to throw some serious jabs at the fed and the CON-gress-critters like that! High 5 dude!

Jan 8, 2013 - 10:11pm

Kind of off topic.

I just posted a link to this article on my Facebook wall.

https://www.thedailybell.com/28552/Bill-Bonner-Zombie-Nation

It's a good article that I'm sure many here will appreciate.

The opening paragraph says...

Large sections of the US population have been turned into zombies. Retirees. Medicare dependents. Food stamp recipients. Disabled people. They are not necessarily bad people. They are not necessarily dishonest or lazy. But rather than add to wealth, they consume it. And when you have too many of them, your society consumes more wealth than it produces and you are on the road to The Downside.

My brother-in-law left the following comment:

Man, it's great here in Zombieville, living high on SS and Medicare. Hope you keep working and paying your taxes.We couldn't make it without you.

The really sad part is back in 2008 he had a Ron Paul sign in his yard. Obviously, he never really got it.

unfashtandichKatie Rose
Jan 8, 2013 - 10:08pm

two monsters

I always love your posts. I have goats too. What you have done with the deer is created the American welfare system. Whenever there are free groceries there will always be someone that is entitled to them. The goats are the producers, and they are saying no way, you don't give any milk,, get out! Goooo silver!

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