ChartDaddy Is In The House

Wed, Feb 6, 2013 - 11:53am

A full baker's dozen. Come on in and get 'em while they're hot!

The biggest challenge with this kind of thread is in determining a logical order for posting all of these charts. Forgoing that, let's just roll with it.

First, you know we've been watching our friend, Sylvia Platinum, for some time now. First, she turned higher late last year when gold and silver didn't. Then she extended in January while gold and silver began to recover. And after two weeks of battling psychological resistance at $1700, she finally broke through this week and, after consolidating, has charged to the top of her year-long range, near $1730. What happens next? Will she burst through and head toward the 2011 highs above $1900? IF she does, it is almost unimaginable that gold and silver won't follow along to some extent.

And now take a look at copper. Ole DrC has been rallying since November, within a broader pennant. Just last week, it broke UP and out of the pennant. Now, can it hold? IF it does, a continuing rally here will also underpin strength in gold and silver.

Of course, one of the biggest (if not THE biggest) determinants of inflation is fuel prices and crude has been rallying since early November, too. Many bears claim manipulation and over-supply. Who knows, maybe they're right. All I know is that crude (for now) is primarily denominated in dollars. Once QE∞ kicked in, the Black Gooey has done nothing but rally. It met resistance exactly where we'd predicted near $98 but it is now tracing out a very bullish cup-and-handle. Just be patient, there's no way this current move is over.

Of course, we need to talk about food prices, too. Protein is also denominated in dollars and, since the intro of QE back in 2009, both beef and soybean costs are UP over 50%. Absolutely brutal, particularly for those "third world" countries where most exist on, quite literally, just a few dollars per day. Do not underestimate the destabilizing, geo-political consequences of this. Hungry people are desperate people.

While on the subject of declining currencies, here would be a good place to insert a very interesting chart of The POSX. This looks nasty and it's going to take an enormous amount of SPIN and MOPE in order to keep it from breaking down and through the "neck-line" at 79. Watch very closely.

And I know I've been posting this next chart quite frequently lately but I'm doing so again today because it is truly breathtaking. We're talking about the national currency of Japan, allegedly the world's 3rd-largest economy, and it's down over 25% in just the last 4 months!! Amazing and incredibly destabilizing to the existing order and paradigm. Please do not ignore this. The long-term ramifications of this are utterly unpredictable.

OK, finally, the metals. I think you can tell that I'm extremely bullish here. Ignore all the nonsense and ignorance that attempts to convince you that gold and silver are headed lower. Not gonna happen. Though these charts indicate that breakouts and sharp rallies may still be a few days and/or weeks away, fear not and be patient. Continue to accumulate on every dip (just like the Chinese, the Russians, the Indians, the Turks and just about every other "creditor" nation).

Here is the current situation for silver. It is currently battling its 50-day MA near $31.75. Once it wins that battle, it will move toward the 100-day Big Test, near $32.50. Through there, it's game on!

And they won't keep gold in check much longer, either. Though it is currently being held back by chart resistance and the 50-day MA near $1685, that level will soon fall. It will then tackle $1695 and psychological resistance near $1700. Once above there, a plethora of buy-stops will get tripped and gold will surge toward its 100-day MA, currently near $1716, and beyond.

What's the point of all this:

  • Fiat currencies and collapsing in an accelerating "race to debase".
  • This and other factors are driving higher the prices of platinum and copper.
  • Inflation, particularly food inflation, is accelerating too. See crude and protein.
  • And under these conditions, there is now way that the naysayers, prechterites and top-callers are going to be correct when they call for lower gold and silver prices. No Freaking Way. Period.

Have a great day and btfd.


About the Author

turd [at] tfmetalsreport [dot] com ()


Feb 6, 2013 - 11:54am



Feb 6, 2013 - 11:55am



Feb 6, 2013 - 11:55am

now back to the thread

now back to the thread

Wallace Hartley
Feb 6, 2013 - 11:56am

@ Al Huxley re: Shanghai Premium (from Jim Willie Thread)

Wanted to re-post this because I think it's a very important piece to the Big Picture puzzle....

The arbitrage opportunity you speak of is a tool designed by Central Banks to move gold reserves to safe havens from potentially volatile areas of the world. By creating the arbitrage, the CBs can hide their true intentions to shift gold stockpiles by claiming "market forces" were responsible for the exodus (and if global commercial banks make billions by acting on the arbitrage, then all the better!). Major shifts of gold reserves have occurred in our recent history and in both instances, the shifts took place prior to World Wars. I've pasted a section of an article written by Julian D.W. Phillips entitled, "The Big Picture Behind Germany Taking Half of Its Gold Home" that explains the process and the historical context better than I could. The implications of the current shift are not favorable for the United States or for liberty loving peoples around the world...hopefully this will help some to connect the dots....

"Are the nations where the gold is held the right places to store it? What if they face crises themselves? Is the move being made because of expectations of crises in those countries? What future monetary scene did Germany see that prompted the moves we see now? Nearly all the world’s nations are acknowledging that China is headed to the top of the wealthy nations pile and is going to take the Yuan to a major global reserve currency, but the prospect of holding German or any other developed nation’s gold in the People’s Bank of China takes a leap of faith and an admission that power and wealth has moved East into politically unknown waters that is just too much at this time.

As we said above, the move of this gold to Frankfurt will allow time to ensure the central banks where the gold is held, to get hold of the gold if they do not have it at the moment. The prospect of developed world central banks now competing with those of the emerging world in the gold market may well start the next leg of the gold bull market because this new, persistent, price-insensitive buying has the power to take gold to a whole new level! We watch to see. If this does happen, then the whole nature of gold in the money system will change even before the changes are officially accepted. Gold will be in a de facto pivotal position in the monetary system again. It will be a short time from that point before it is officially accepted then. The way will have been paved for China to arrive on the scene and gold to have a vital function in the monetary system between two very different and unconnected, politically and economically, power blocs, the developed world and the emerging world with China as its hub.

The last time the world was divided on this basis was at the start of both world wars. The consequences to the monetary world then were so devastating and saw the destruction of national currencies on both sides, in Europe.

History teaches us another lesson. Ahead of the second war, when it became apparent that extremists had taken power in Germany and war became a probability again, gold came into the picture very forcefully. We are all aware of the 1933 Confiscation of gold then, with the stated objective of expanding the money supply through the devaluation of the dollar in the U.S. but one side of that event has not been the subject of full public examination.

What happened to European Gold from 1935+?

Is the fear of future crises in those countries a motive for the move of Germany’s gold back home? It certainly was so in Venezuela’s case, fearful of the U.S.’s power over its gold and reserves. We don’t expect any further statement on the reasons from Germany because that’s the nature of central banks. But history tells us that there are other reasons which discount the future. These confirm the move of gold back to the monetary system and why Confiscation of private gold has become a probability in the future too.

When the U.S. dollar was devalued in 1935, it was done so only in terms of gold. It was not devalued against foreign currencies. Exchange rates were then fixed against each other. Other governments did not devalue their currencies against gold. The result was that while gold was trading outside of the U.S. in the foreign currency equivalent of $20 there, it was trading at $35 in the U.S.

With markets relatively unsophisticated in those days, alongside limited communication abilities the original arbitrageurs [dealers between two markets] found they could buy gold at the foreign currency equivalent of $20 and sell it into the U.S. for $35. Is it any wonder that the U.S. gold stocks roared up to 26,000+ tonnes?

Was this a financial error in an undeveloped world? We have no doubt it was not. It was the ideal quick way to shift the gold reserves of Europe away from the war zone to the relative safety of the U.S. The war arrived in Europe four years later.

But foreign governments weren’t stupid. European governments permitted this move, even though it was seen as a market event. Remember that gold was the basis of money then so such a shift had to happen with government approval. This had to happen within the monetary system in force at the time. The fact that it happened so smoothly implied total government cooperation.

We see it also as an example of how the banks work completely with monetary authorities to ensure complete control over the monetary system. The same is true today as we see the efforts of governments primarily directed at repairing the banking system and government finances with scant attention to the national economies below them.

With a war on the way Europe sent its gold to the U.S. without governments being seen to do it. The move came about as a result of ‘market forces’.

But you may rightly say that surely that wasn’t the end of the story? Of course not!

With a huge U.S. army based in Europe after the war, the flood of dollars from the U.S. to Europe happened from the forties right through to the sixties [Eurodollars] continued. European nations, including France, Italy, Switzerland and Germany led by President de Gaulle, kept selling their U.S. dollars for gold. Once Europe’s gold returned to it [as the war was out of the way and reconstruction just about complete], Europe had its gold back. Then the change in the monetary system occurred and the dollar (the exclusive currency in which nations could buy their oil to run their economies with) closed the gold window and excluded gold from the day-to-day system but remained in national vaults. It was then that the experiment, now 42 years old, in un-backed paper currencies began. European central banks were then rewarded by the extraordinary rise in the gold price in the seventies and eighties.

This two-way process of gold to and from the U.S. only became visible with hindsight."

Feb 6, 2013 - 11:58am


thank you... thank you!

I think these charts are telling us to never forget!

(never forget to stack, that is)

Feb 6, 2013 - 11:58am

Japan looks like the 1st domino

to start all things FIAT collapsing. 

Mr. Fix
Feb 6, 2013 - 11:59am


It is definitely getting harder to win this competition.

 Thanks Turd.

 Have a nice day.smiley

(worth a look)yes

Feb 6, 2013 - 12:02pm
Feb 6, 2013 - 12:04pm

Great info Turd

This is great trading info, thank you! smiley

Feb 6, 2013 - 12:08pm


Is the same price it was 2 years ago. We've essentially gone sideways for 2 years.

Feb 6, 2013 - 12:13pm

Silver Lease Rates

Silver Lease Rates
Feb 6 2013 Change
1M 0.0192% +0.0000
2M 0.0560% +0.0005
3M 0.0930% -0.0025
6M -0.0621% -0.3110
1Y 0.2395% -0.3310

Nice little spike in the longer term lease rates. The 6th of the month was the date for spikes in the past. Are these leases now being rolled over? Someone sure gets a sweet deal on a regular basis.


Feb 6, 2013 - 12:13pm

yes silver has gone sideways

but I sleep better having some, and I am not looking to profit at this time, I mean look what is going on! Are you not glad you have some metal!

Sometime I think the whiners really don't know what they are doing.

Feb 6, 2013 - 12:14pm

Quote:Ian Bremmer: All this

Ian Bremmer: All this is related to what leaders can actually do. You have three areas of the world that are going to be experiencing very significant geopolitical conflict, but only one of them has institutions which I believe are up to the task – though those institutions need to change – and that’s Europe. Are the institutions up to the task in the Middle East? No. Then you go to Asia where not only are the regional institutions not strong enough, but the interests of the actors are fundamentally different. The US wants to work in multilateral institutions with its friends – let’s get ASEAN together and take a view. The Japanese say, “We’ve got problems in the East China Sea, let’s go to the International Court of Justice”. Meanwhile, the Chinese only want bilateral negotiations because they are bigger than every other country bilaterally and they get the outcomes they want. You’ve got a radically changing geopolitical environment in Asia, and I think that the single conflict that is most problematic for 2013 in the world is probably that between China and Japan.
And that to my mind is not unintentional from Japanese side backed by the I have tried to express many times here. Tensions between big powers are good for USA military assets and thus good for the USD status as reserve currency.
El Gordo
Feb 6, 2013 - 12:15pm

Could have done better, buttttt

decided to read all of the article first. You snooze, you miss.

Feb 6, 2013 - 12:21pm

Can someone please explain "arbitrage" to me......

In layman's terms. I am not sure I get it. As a matter of fact, I am sure I don't get it. Thank you. Sorry in advance if it is a stupid question.

Feb 6, 2013 - 12:24pm

I had to sell some silver...

...early this week to catch up on some bills that were behind. sad

But I feel better knowing that we indeed have been going sideways for 2 years so I at least feel like I have time to get it back before the next leg up. yes

Now had my juniors not been so deep in the hole I woulda sold those off before the phyzz but nooooooo.........

Feb 6, 2013 - 12:25pm

Remember food is a weapon .....

to compel submission. As inflation parades across the world....choices will be made......increasingly those choices will become urgent. Solutions will be offered. Very predictable solutions.

Feb 6, 2013 - 12:27pm

Arbitrage= profit without risk

rare with computers now...

(i.e. buying and selling at the same time and keeping the spread)

Feb 6, 2013 - 12:29pm


Somebody is selling something cheaper than a buyer elsewhere is prepared to pay, i.e. the buyer is prepared to pay even higher than that.

But, the seller & buyer don't know of each other, or can't transact easily.

So, the arbitrageur, buys cheap from the seller, and sells to the buyer, making a nice profit along the way.


Feb 6, 2013 - 12:30pm

Strange chart on gold reserves

Can anyone correlate this chart to actual reporting?

I'm not sure what they mean by "total reserves" but if this chart is correct, national governments are moving TO gold and not AWAY from gold.

Is the source GATA or where does it come from?

Feb 6, 2013 - 12:31pm

repost from end of last thread

USPS and common law

Submitted by silver66 on February 6, 2013 - 11:58am.

Before you are quick to pull the plug on the USPS, think about its role in the rule of law(yeah I know many will say that is currently not present). If the rule of law calls for a registered letter to be sent for notification by USPS, then what happens if USPS can't deliver because it no longer exists.???

Look at who its trying to do away with it


Feb 6, 2013 - 12:32pm

I found a childhood photo of the Turd.........

And apparently he and the Jackass go way back.

Feb 6, 2013 - 12:32pm

@Wallace Hartley

Thanks for sharing that piece, I missed it previously and it was very interesting to read a piece from that point of view. That one totally flew over my head but I can see how that makes perfect sense for TPTB to stay in control.

fast mover
Feb 6, 2013 - 12:32pm

Real world arbitrage

Buying silver futures contracts on CME and selling silver in Shanghai for 100 basis points higher is a PM arbitrage.

Katie Rose
Feb 6, 2013 - 12:40pm

USPS rant (small)

The last thread had lots of comments about the USPS's inability to make a profit delivering mail. Many were essentially saying, "Just close it down..."

Are you %$*## crazy?????

Live in rural America, where there are long distances between small towns, and see how much you like having no working PO or mail delivery!

Sometimes I think some of you spoiled city folk need to move to a farm, try growing your own food, and get a grip on how much the city dwellers owe the few who bring them their daily meals.

If a nation can not even provide daily mail service to all its' rural citizens, it is worse than a Banana Republic.

There are looooong distances between many rural Post Offices. To close them down would be horrific for the rural citizens who rely on them.

edit to add:

Thanks Turd for the charts.

What I have learned from all of you is very simple. The game is rigged. There is no rule of law concerning metals trading. Just buy consistently, every month, and get on with living. It will all implode sometime.

In the meantime, enjoy life, gather new survival skills, and Beware of Welfare Deer! wink

Bill of Rights
Feb 6, 2013 - 12:40pm
letey petey
Feb 6, 2013 - 12:43pm

Feb 6, 2013 - 12:47pm

Chinese solar demand

This Chinese demand for silver to empower their solar plans is important. An additional burden of 25 million ounces taken out of the market will make a difference. 2.5...not so much. I'd like to see some data or a good analysis on that. I'll give it my best shot--and remember my expertise is in the humanities, not the sciences.

China wants to increse production from 21 to 35 gigawatts by 2015: that means an increase of 14 gigawatts

According to Casey Research, "A typical solar panel uses a fair amount of the metal – roughly two-thirds of an ounce (20 grams)." A couple of sources cited 0.1 gram per watt... that's a gram per 10 watts.

Lets do some math

1 gigawatt (a billion watts) means 1 billion times 1/10th of a gram, equals a hundred million grams of silver.

Divide that by 31.1 and we get about 3.2 million ounces of silver per gigawatt.

Lets multiply that by the China article linked above and we get (drum roll...................) 

45 million new ounces needed in China by 2015.

Surely China isn't the only nation pushing solar. I think I ought to buy those panels I have been planning to get before the spike hits us, while they are still on sale.

Lights out for China Not everyone thinks the demand will continue--depends on the economy.

Strongsidejedi Katie Rose
Feb 6, 2013 - 12:48pm


Glad to see you on here.

USPS shutting down ops might be a political strategy to isolate the urban from rural.

When you look at the electoral map of Obama's victories, it definitely favors urban voters.

The rural voters are largely independent and vote GOP.

Feb 6, 2013 - 12:50pm

Arbitrage- my simpletons' version

This is my simple, non technical way to understand this concept (it may not be quite right, but it works for me)- For two assets whose price should have X relationship but instead have shown Y relationship, an arbitrage is a low-risk bet on a return towards normalcy- i.e., that X relationship will reassert itself. 

Example- Company A and Company B are perfectly equal in earnings, growth potential, assets owned, etc. They should be valued at the same price. But company A is trading for $25 per share, and Company B is trading at $19 per share. The arbitrage here would be to go long Company B and go short an equal amount of Company A... no matter what overall market does, (i.e., goes up or down) over time you are betting that the difference between share price of the companies will return to normal and you will make money on overall trade, based on a return to that normal relationship (in this case, an equal share price). You can do this with any two investment vehicles where you believe that the relational true market value is out of whack- go long the undervalued one, and go short the overvalued one.

If you are right about the relationship between the two, you will make money. Simple!!! 

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