Saturday Stuff

Sat, Feb 23, 2013 - 12:28pm

Just a quick wrap up of some assorted stuff as we prepare for what will be an eventful week ahead.

First of all, the big news from late yesterday...Moody's downgraded Her Majesty's debt. Though this is once again a fundamentally gold-positive event, I wouldn't expect an immediate jump in price because of it. Remember that in the fiat world, Pound weakness inversely means Pig strength.

In the absence of a podcast here at TFMR, please take the time to listen through all three segments of Andy's visit with Eric King yesterday (once they're finally posted). When we spoke yesterday, Andy told me not to expect anything too earth-shattering but I'm confident that it's worth your time, nonetheless. He and I plan hope to record something either Monday or Tuesday so look for that early next week. In the meantime, here are the KWN links:

If you haven't already, you're going to be reading a lot this weekend about yesterday's Commitment of Traders report. As you know, I like to review it right when it comes out and then post a sort of "instant analysis". Here's a c&p of my thoughts from yesterday, in case you missed them:

GOLD: For the week, price fell about $45. While this was taking place, the LargeSpecs added 1900 longs and a jaw-dropping 25,000 shorts! The LS net long ratio falls to an very bullish 2.12:1. The SmallSpecs got in on the act, too. They dumped 400 longs and added nearly 5,000 new shorts. This is an extremely bullish, contrary signal.
But the real action was by The Cartel. They added 4,300 new longs and covered an incredible 24,200 shorts. Again, who was buying while the specs were busy shorting? And who do you think will, ultimately, profit??
The Cartel net short ratio now stands at an extremely bullish 1.83:1.

SILVER: Almost identical to gold. Simply astounding, amazing and incredible.
For the reporting week, the price of silver fell about $1.60. Look what was happening internally:
The LargeSpecs dumped 1,150 longs and added 4,450 shorts. After reaching an unheard of extreme of 6.5:1 just two week ago, the LSpec net long ratio is all the way back to a mildly bullish 3.1:1
The SmallSpecs added 500 longs and 3700 shorts. Again, as in gold, the specs are racing to get short.
The "commercials"...pretty much all big firms except JPM and their con-conspirators...added another 2,026 longs, bringing their total gross long position to a never-before-seen 54,208. Simply incredible! They've continued to add longs all the way down. What do they know? What are they expecting??
The Silver Cartel...namely JPM and their two or three pals...were finally able to cover 6,800 of their disgustingly large short position. It's still disturbingly high at 92,164 but the total commercial net short ratio, which last peaked in September of last year at 2.6:1 has now declined to a quite bullish 1.7:1 Nearly every drop in The Cartel net short ratio to near 1.5:1 has preceded a substantial rally. We are very close!
All in all, both CoTs are extraordinarily bullish and indicative of a bottom very soon. Hang in there, now. Your patience will soon be rewarded!

Now, let me just add a couple of things:

  1. Getting the Gold Cartel net short ratio all the way down to 1.83:1 is a very good sign. For perspective, at the lows of late December 2011 and summer 2012, the Cartel net short ratios were 1.98:1 and 2.01:1, respectively. And this week's data was surveyed on Tuesday, before the big drop on Wednesday. All in all, the gold CoT is very bullish.
  2. Please also consider the net short ratio of The Silver Cartel. After the last four price washouts, here are your net short ratios at the bottom: On 8/14/12 it was 1.49:1. On 12/27/11 it was 1.34:1. On 10/4/11 it was 1.48:1 and on 6/28/11 it was 1.79:1. As of last Tuesday, it had fallen 1.7:1.
  3. And, finally, this theory....note the emphasis on theory. Regular readers know how perplexed I am by the silver OI situation. The primary outlier is the Commercial Long position. It "should be" somewhere near 30,000-35,000 contracts by this point in the price cycle. Instead, it grew again last week to 54,208. Chew on this: What if the 20,000 contract difference is, in fact, JPM trying to square away their naked short position that Uncle Ted estimates to be around 30,000. Now, stick with me on this... They tried to lessen it by covering back in April 2011 and the result was a near-cataclysmic event for them that was only rectified by the Sunday Night Massacre and the collusive CME margin hikes. Since then, they've maintained their position as The Big Short but, beginning late last summer, they began to build an equally-large long position. Again, stay with me here... They've added shorts through the fall to keep a lid on prices until they're ready to let it go, either voluntarily or involuntarily. If this is the case...and that's a very big IF...JPM could be approaching the point where they would be short 25,000-30,000 contracts AND long 25,000-30,000 contracts. At that point, if forced to exit the shorts, they'd be fully hedged and even profiting on the UPside.

Anyway, just chew on the 3rd point over the weekend. The more I think about it, the more it explains the "commercial long anomaly" and it provides JPM an exit strategy should the toothless CFTC ever choose to call them out.

Here are your updated charts. Given the CoT structure, I feel very comfortable declaring that a bottom is near. (And obviously hope that, by doing so, my Google ad revenue will increase.)

And just a couple of other items that have found their way into my inbox. First, this interview from last fall that details the whys and hows of gold manipulation:

Gold Market Manipulation Explained

This fun article discusses the effects of the gold repatriation movement:

If you haven't read up on this subject yet, I strongly urge you to do so. Just like the German gold repatriation, we may look back on these events and recall them as clear warning signs of imminent events:

And our friends at Gold Bullion International do some excellent analytical work. Their latest was posted to ZH and you should definitely take the time to read it:

Speaking of GBI, for now they are still the only bullion and storage affiliation that this site has. Many of you have purchased from them and I am very grateful for their support. If you are buying coins and bullion, please be sure to check them out. You can link to them trough the ad on the right side of the page. I'll soon be adding affiliations with GoldMoney, SilverDoctors, Provident and JMBullion, too, so please be sure to always consider them when looking the BTFD. (Which I would strongly encourage you to consider doing this weekend.)

OK, I think I'll stop there. I hope that you have a safe and relaxing weekend. You certainly deserve some serenity after the madness of the past two weeks. But keep the faith as this, too, shall pass. The metals have simply been forced back to the bottom of their 18-month price ranges and will soon begin to rebound as physical demand and the glaringly obvious fundamentals begin to take over.


p.s. You've got to check this out. The trollololo song is going mainstream!! I sure hope that the dead Russian guy's estate is getting a little skin out of it...(Thanks to my pal, DocD, for passing it along!)

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About the Author

turd [at] tfmetalsreport [dot] com ()


Gold Buffalo
Feb 23, 2013 - 9:00pm

Dollar Rising

I think people should pay more attention to this guy. As much as I like thinking that the gold/silver will break the downtrend soon, it just doesn't look that way if you follow Erik Swarts, and when has he been wrong? Says it is the U.S. Dollar that has bottomed, not precious metals. Much more pain ahead.

Feb 23, 2013 - 9:28pm


Was in Bullion exchange in Vancouver today buying Silver coins. Sign on wall says out of 1 ounce gold coins.

Will read posts later.


Feb 23, 2013 - 9:32pm

First video posted by Turd:

I was waiting for one of the German guys to get up and say,

"And now's the time on Sprockets when we dance!"

Sprockets Dance
Urban Roman
Feb 23, 2013 - 9:43pm
Feb 23, 2013 - 9:57pm

Has anyone ever bought from

Has anyone ever bought from Colorado Gold? How were you treated?

Feb 23, 2013 - 10:06pm

Gold & Silver Bars

South African Gold Refinery
SILVER MINING / Making Doré Bars - Discovery Channel

16 to 1

Feb 23, 2013 - 10:25pm


Yes, I made my first purchase of a green box and then several other purchases of both gold and silver from Colorado Gold.

At that time I dealt with Don. In more recent times I dealt with other family members. Always an enjoyable experience. Highly recommended.

By the way that first buy price was $6.41 including premium of 18 cents an ounce.

Beastly Stack
Feb 23, 2013 - 10:26pm

Love that VW

Commercial- that is a great one! I hope everyone is enjoying the weekend. A few more things to watch and keep a close eye on this week. PLEASE READ

Feb 23, 2013 - 10:36pm

Problematic Development

Iran says it has brought down a foreign spy drone

LONDON | Sat Feb 23, 2013 7:12pm EST

LONDON (Reuters) - Iran's Revolutionary Guards have brought down a foreign surveillance drone during a military exercise, the official Islamic Republic News Agency said on Saturday.

"We have managed to bring down a drone of the enemy. This has happened before in our country," the agency quoted war games spokesman General Hamid Sarkheli as saying in Kerman, southeast Iran, where the military exercise is taking place.

The agency gave no details on who the drone belonged to.

In Washington, a Pentagon spokesman said he had seen the reports. He noted that the Iranians did not specifically claim that the drone was American.

In the past, there have been incidents of Iran claiming to have seized U.S. drones.

In early January Iranian media said Iran had captured two miniature U.S.-made surveillance drones over the past 17 months.

Several drone incidents over the past year or so have highlighted tension in the Gulf as Iran and the United States flex their military capabilities in a standoff over Iran's disputed nuclear program.

Iran said in January that lightweight RQ11 Raven drones were brought down by Iranian air defense units in separate incidents in August 2011 and November 2012.

Feb 23, 2013 - 10:48pm

nickin on a sat nite

Hi like-minded friends,

Was stackin nickels tonite (I know lame sat nite activity) and wondered why so many from 1964. Then i remembered LBJ comments at the signing of the coinage act. The suppression of the peoples money has been going on for a long time as we all know (William Jennings Bryan anyone?). The elite have all the gold and could not allow the Comstock silver to diminish their golden influence. It seems to me they are subtly (yet desperately!) trying to impose a > 50:1 ratio (they print these denominations on AGE and ASE) even though this doesn't reflect physical reality. BTFD maybe silver bullets do kill vamps. Also, my Gresham's law mates HORDE nickels and pre 1982 pennies! I find sorting coins to be a relaxing stress reliever after slaving away at work (wages!?! they scoff). But I am just a simple family man. Continue to passively resist. A new paradigm awaits. Oh and thanks turd.

Quote from LBJ:

"Some have asked whether our silver coins will disappear. The answer is very definitely-no.

Our present silver coins won't disappear and they won't even become rarities. We estimate that there are now 12 billion--I repeat, more than 12 billion silver dimes and quarters and half dollars that are now outstanding. We will make another billion before we halt production. And they will be used side-by-side with our new coins.

Since the life of a silver coin is about 25 years, we expect our traditional silver coins to be with us in large numbers for a long, long time.

If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content."

Also, I lifted this from treasure hunters site comment section. Feb 23, 2006, 04:40 PM #7 Klaatu

Re: Why so many 1964 nickles?

1964 nickel production totals are:

Philadelphia - 1,028,622,762
Denver - 1,787,297,160
Total - 2,815,919,922 That's a LOT of nickels!!

Compare that to other years in the 1960s:
1960 - 57,107,602
1960D - 192,582,180
1961 - 76,668,244
1961D - 229,342,760
1962 - 100,602,019
1962D - 280,195,720
1963 - 178,851,645
1963D - 276,829,460
1965 - 136,131,380
1966 - 156,208,283
1967 - 107,325,800
1968D - 91,227,880
1968S - 103,437,510
1969D - 202,807,500
1969S - 123,099,631

The 1960s were chaotic for the Mint. Silver coins were replaced with clad coinage in 1965. There was a coin shortage that the Mint worked hard to overcome. The Mint discontinued mintmarks on coins in 1965 on the mistaken belief that would discourage coin collectors whom they blamed for the coin shortage; so coins minted in Denver or San Francisco were indistinguishable from coins minted in Philadelphia. The Mint resumed mintmarks in 1968.

When the production totals for the 1964 nickels was low late in 1964 concerns arose that the 1964 nickels would be hoarded by collectors increasing the coin shortage. Congress authorized the Mint to continue producing 1964 nickels in 1965. The Mint ended up producing over 2.8 Billion 1964 nickels.

Silver Alert
Feb 23, 2013 - 10:51pm

I do not know about all the

I do not know about all the machinations that will happen between now and then nor how JPM's shorts & longs tie into the end game, but I believe the treasury market will be the last to implode.

Treasury purchases come mostly from 3 sources:

1. Foreign sovereigns (primarily Japanese & Chinese)

2. The FED via Primary Dealers (ie QE)

3. other

As foreign purchasers scale back and soon switch to becoming net sellers it rests more and more on the FED to pick up the slack. The FED will have to make ever larger purchases and it's balance sheet will become increasingly bloated. At some point it will be decided this state of affairs is untenable and can not continue.

Sinclair and others are right in that the treasury market can not and will not be allowed to collapse (until it can't be prevented that is.)

This is where #3 (other ) comes into play. That other is us. The stock markets will be allowed, or made, to collapse. All that money will be funneled into the treasury market. Then when people start screaming about the demise of their pensions, IRA's & 401K's, Congress will move to "protect" retirement accounts.

So will end the greatest wealth transfer in history as Americans' final bit of wealth is nationalized and converted into "safe" treasuries. Who knows how long these trillions will keep the treasury market propped up? Be it months or years, it will only be temporary. And when the juice runs out, the great, final collapse will enter it's terminal phase.

S Roche
Feb 23, 2013 - 11:07pm

Adam Hamilton calling the bottom...

worth a read if you are doubtful, he has a good track record

Feb 23, 2013 - 11:08pm
Doc1800 sengfarmer
Feb 23, 2013 - 11:11pm

Thanks for the information,

Thanks for the information, glad to hear they do a good job. BTW- very nice on your first monster box , that 5 bagger has to look good right about now as the price gets hit.

BIGNASTY dropout
Feb 23, 2013 - 11:22pm
tobydaniel joehappen
Feb 23, 2013 - 11:27pm


I have a perfect coin for you. The Slave Queen. Because once your married, she will be your slave queen. But then again, hopefully not and she will be your Freedom Girl. Yeah, that's the one you should get! haha

Feb 23, 2013 - 11:29pm

Side track to prepping thoughts - Archery

Over the past few months I obtained two long bows, really nice, both used, at a decent price. One is 45 lbs and the other 55 lbs. I got some practice arrows, some broadheads, an arm guard, a glove, targets and some bales of hay. One bow knocks-down into a packable 3 piece set. I re-strung them both, and now I am starting to practice, close in, at about 5 yards distance. I'll just keep moving out farther as my accuracy & strength increases.

Let's say (in SHTF) you are out hunting -- you may prefer not to have others know where you are. A shot from a gun can not only give away your position, but also let some one know you have a firearm, and possibly food. If you're trying to be discreet about any of that, and the bow serves your purpose, it may well serve you to add some feathers to your stack.

Not a great shot yet, not even good, but at least now I'm hitting the hay consistently.

Feb 24, 2013 - 12:12am

@ maximilliom, soros dumped

@ maximillion, soros dumped shares of gld

Feb 24, 2013 - 12:20am

Trader Dan Bearish

Listening to Trader Dan's Podcast on KWN..he seems to have an entirely different view of this week's COT

He considers it to be very bearish that Large Speculators(Hedge Funds) have been jettisoning gold & infact have the largest short position since 2006.He has always been of the view that in order for Gold & Silver to move speculative money is needed....which right now sits on the Short side..hmm

What i found that while it's pretty obvious that Speculators added a massive amount of Short .....he has conveniently missed the fact regarding the no of Shorts covered by the it because of his view of Speculators being the Only Market Movers??

Don't know....probably Trader Dan has forgot more than I Know..but it seems he is forgetting a lot more these days.....

delacroix Pegasus
Feb 24, 2013 - 12:36am


oops, time for me to hit the hay

Colonel Angus
Feb 24, 2013 - 12:36am

pensacolawindham on AR-15s

My Wal-Mart has had nothing above single shot for the past couple of months. I was in a Wal-Mart in another state when out on business, and they had a sign up saying they expected the AR-15 platforms to arrive sometime in March. Until then you cannot buy them under $1200 around here. And most people want more like $1600 for them. Really, the mini-14 is a good alternative. I actually prefer it because it is a heavier gun. Both shoot .223.

Speaking of Wal-Mart and their worst beginning of a month ever...if they actually had any ammo in 22LR, 9mm, .223, or 7.62 x 39mm, they would probably be in much better financial shape. I haven't seen anything except odd sizes at Wal-Mart since the beginning of the year. If AR-15s or ammo are available at retail price down in Pensacola, you can stock up and sell on so that you can have some extra fiat to buy silver. I'd highly recommend it as a way to add to your stack. The prices are ridiculous on that site.

Nick Elway
Feb 24, 2013 - 1:09am

LCD report

I visited my Local Coin Dealer this evening, he sets up his table at gun shows and coin shows.

Almost all of his 90 per cent inventory comes from people at the shows (and an occasional estate), his regular suppliers have been unable to supply him 90 per cent at near-melt prices since the election. I relieved him (at melt on the face value ) of a small stash (most good, a couple of smoothies) that he had picked up at the end of the day for a few per cent under melt. Any 90 per cent on his table at a show disappears quickly. This state does not have a sales tax on these transactions.

His dealers will buy 90 per cent dimes and quarters from my local guy at 1 per cent over melt and half-dollars at 1.25 per cent over melt (plus shipping). He doesn't know to whom his dealers are selling, and now only ships his dealers sterling and hard-to-move items likely to be melted down.

This sounds like a (small) premium for physical is a reality.

Katie Rose
Feb 24, 2013 - 2:25am


I asked a friend who is an aeronautical engineer how could someone(s) bring down a drone? I was curious as drones seem to be the latest military weapon, and many countries are using them or planning to use them.

The answer was surprising:

"Do what the Iranians did. Hack into the operating system. That is by far the easiest way."

That caused me to chuckle. Can you imagine a new craze among young kids? Rather than playing video games, why not bring down a drone in real time???

Just wait. It will happen.

I wonder if the world governments took into consideration millions of kids honing their hacking skills on their drones???

Feb 24, 2013 - 2:27am

@pegasus Archery

You may want to go to Cabelas and say "I'm interested in archery. Can you recommend a couple models and let me try them out?" I did this recently, and got to spend a few hours (it helped that I went mid-morning on a Monday) getting an overview of stance & technique, as well as a run-through of all the parts and how to adjust / maintain them. They had an indoor range, and let me try out a few different compound bows. They even showed me how to sight them in. I ended up hitting a target the size of a nickel at 40 feet by the end of the day. You may not need this, but I too probably would have missed the hay bale at first. The quick lesson I got made a HUGE difference. Of course they are motivated to make a sale more than to be archery instructors, but I think they would have done all this even if I hadn't bought a bow. Nice people.

Feb 24, 2013 - 3:20am
Feb 24, 2013 - 8:15am

Trader Dan

People need to show some respect towards someone who puts out good information for no profit. He has been consistently right in the last 6 months. The permabulls have been consistently wrong. That's not an attack on anyone - it's just a statement of what happened. A little humility might be appropriate.

Feb 24, 2013 - 8:45am

........and the winner is

........and the winner appears to be Haruhiko Kuroda who is known as an advocate of Abe's monetary policy.

Feb 24, 2013 - 9:09am

There have been a few comments about my vid

Early with the lady showing her shiny coin collection. I could not understand what posters were referring to so I went back and watched it again. Wow I never saw those! It reminded me of this vid

gold slut
Feb 24, 2013 - 9:09am

silver lining

I have only recently become a stacker after paying into a pension fund for several decades and realized that I had been screwed-over well and truly. Having looked into PMs, I decided that the only way to protect against inflation (and the evil tax man) was to play TPTB at their own game and diversify into Phyz. As my stack is puny at the moment, the longer the prices are kept low the better for me (another 5 years would be nice, but I don't see that happening - sigh). I view my stack as an alternative pension fund. If the price rockets, well that is great, but in the meantime I am more than happy to keep turning what little spare Fiat I have into cheap PMs - win win! For me, no matter what happens in the world of PMs it is good by me.

Feb 24, 2013 - 9:09am

Forecasts using TA or not

I am getting tired of seeing the forecasts by anybody.

In my opinion only a couple things matter. The debasing of dollar and the manipulation.

not sure the problems can be fixed without social upheaval.

pick your poison.


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Key Economic Events Week of 5/20

5/20 7:00 pm ET CGP speech
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TWELVE Goon speeches through the week
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5/9 8:30 ET US Trade Deficit
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