The Increasing Likelihood

Wed, Apr 3, 2013 - 12:59pm

We must admit that it is looking increasingly likely that a washout is coming. Previously, I had only put this at one chance in four. After these past three days, we must now consider this a 50/50 probability, at a minimum.

Remember, this selloff isn't totally unexpected. This is from Monday:

"As predicted on Thursday, we are seeing quite a bit of price shenanigans today. Expect this to continue. In fact, even though I just laid out for you the extraordinary case for buying silver, I will not be surprised one bit if price falls toward $27 sometime this week. If silver can be jammed down and closed below the $27.92 low of March 1, more weakness will materialize as a new crop of even greater fools parade into the short side. Given the near certainty of the impending, sharp rally, perhaps we should all be rooting for this to happen. I mean, buying at $27 is even better than buying at $28, right?"

And this is from last Wednesday:

The Forces of Darkness were finally able to break silver down through $28.60 overnight after successfully raiding price at about 2:00 am NY time. Stops were triggered and price fell all the way to near $28.20 before recovering and I have $28.62 as I type. Clearly, this recovery needs to hold. At a minimum, silver needs to stay above $28.40 because if it falls again and The Bad Guys are able to take out the March 1 lows of $27.92, we'll then see a drop all the way to the bottom of its 18-month range, near $27. Yikes!

Now, that said, it is looking increasingly likely that the goal of all of this is to drop gold through $1525-1535. This would:

  1. Trigger all sorts of long-term sell stops for The Cartels to cover into.
  2. Allow Maria Headiromo to proclaim that "gold is officially in a bear market", down over 20% from its alltime highs of August 2011.

I've used Thomas Paine's "Common Sense" metaphorically several times over the past 18 months and here we are again. Perhaps you would be well-served by going back and reading this post from last November: 

Perhaps all you really need to review is the closing paragraph:

"Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph...

So, again, I implore you: Do not lose faith and do not suffer from doubt. The end of The Great Keynesian Experiment is indeed upon us and you must continue to prepare accordingly. Do not be swayed by the day-to-day trading of the Comex nor the incessant noise and disinformation supplied by the financial media. Think for yourself. Study the past and the present, then consider the future. Trust your instincts. Believe in yourself and your ability to lead and inspire. Your family needs you. Your friends need you and Turdville needs you. The future demands leadership at every level and we all have a role to play. I will continue to do my part. Will you?"

No time for summer soldiers and sunshine patriots around here. Your faith is about to be severely tested. Do you have the courage of your convictions or are you easily swayed? Will you succumb to pressure and follow the crowd off the cliff or will you stand tall?

IF the Large Specs run price through $1525, what will you do? Do you have a plan? If silver falls through $26, will you be ready? Again, today's action dramatically increases the likelihood of The Final Washout. You have been warned. Prepare accordingly.


About the Author

turd [at] tfmetalsreport [dot] com ()


Apr 3, 2013 - 1:47pm


Some consolation on a day when silver gets taken to the wood shed.


Apr 3, 2013 - 1:48pm

missed it!!!

4 reads

Apr 3, 2013 - 1:49pm


gotchya Z! lol

My first time being first at the old library and here both on the same day! Try and break that record! I need to get out of work and score me some must be my lucky day! cool

Apr 3, 2013 - 1:51pm

so many...

..threads today... Turd's on fire!!!

Apr 3, 2013 - 1:56pm


YEah, whatever I not lost to the house fire, is not going to be sold at these prices, Why would anyone. I just wish I had dry powder to buy more, but, already, the "house fire" got that too!

Record demand, system can be easily seen to be falling apart, and metals go down?

Yeah, right!!!

Keep up the good work TF

Apr 3, 2013 - 1:57pm


Fif again...this never gets old.


I guess not...6th. Waited that extra second.

Apr 3, 2013 - 1:57pm

I'm in it to win it Turd

You are right Turd, and we all must continue to stand up to the EE banksters, scumbag politicians, authoritarian NWO Marxist filth, and anyone else who threatens our freedom and American way of life, and show them the courage of our conviction! 

Apr 3, 2013 - 1:59pm


Dont negatively influence the worlds silver morale please. You have enough readers now that what you say can actually influence the markets id think.....

Apr 3, 2013 - 2:00pm

in somewhere here

in somewhere here - ooooo - number nine

edit -

pulled the trigger on small amounts over the past week, but if the dam breaks, I'm so ready

Urban Roman
Apr 3, 2013 - 2:00pm

So Turd,

Shall we be making arrangements with a confectioner for that sponge cake and fondant hat? 

Apr 3, 2013 - 2:02pm

My plan

My plan is to sit tight and do nothing (well, maybe buy a little more).

Apr 3, 2013 - 2:04pm

Getting ready to back up the truck

I've been reading this site for the past few years and have been making periodic purchases to get a low average price per ounce. For many of us here we remember spending large amounts with the prices much higher then these. Now that prices are on sale, we should be considering backing up the truck and getting out of the banks as much as we can. Listen to Sprott's advice about "caveat depositors", afterall can you really trust your banker to pay you back for all your years of scrimping and saving?

Stay strong everyone!


Apr 3, 2013 - 2:11pm
Apr 3, 2013 - 2:12pm

It Boils Down To

Paper, plastic or physical.

What would you rather hold?

Urban Roman
Apr 3, 2013 - 2:13pm

Not yet

I'd be completely stunned and flabbergasted to see silver reach all the way down to $22. That said, I'd have been equally flabbergasted if you'd told me on 10/1/12, when QE∞ was announced, that silver would trade down to $27 by 4/3/13.

Mr. Fix
Apr 3, 2013 - 2:13pm

and I missed the top 10 by that much.

 Maybe I should go out and try to earn some fiat,

 doesn't look like my “investments” are doing much for me today,

 on a brighter note, I still have them.

 My wife just announced this morning, that she wants me to spend another $500 on “provisions”.

 She does not usually talk about “prepping”, but she announced out of the blue this morning, that according to the stocks that she watches, and the housing markets that she watches, it is all coming off the rails now.

 By the way, that was unsolicited. I was told a long time ago to stop talking about my "end of the world as we know it" scenarios.

 Fair enough, that's why am here. But now she's bringing them up to me.

 Must be a tear in the space time continuum or something.wink

Preparations for “the final wash out” need to be taken seriously. Maybe the final washout will unfold in the next few days, and then again, it might take a few weeks, but it is undeniably here.

 Arguing about it is not going to change that fact.

Apr 3, 2013 - 2:16pm


News Headline Summary

Fed's Bullard says FOMC has come around to need for QE flexibility and reiterates QE is best policy for Fed now


- FOMC should alter policy based on economic data. 
- Policy stance is appropriate at this time. 
- Fed is full steam ahead of easing.

Apr 3, 2013 - 2:17pm

Silver/Gold or What?

Right else would you want to own? Bonds (at a 33-yr high), Stocks (all-time highs)? Both are at tops. Not a good time to buy. Real Estate? Perhaps, but once interest rates rise, real estate is in trouble and it isn't very liquid if you want to sell. Really, the only other option is $USD's. Would you rather own dollars or silver/gold at these prices? To me it is a no brainer.

Apr 3, 2013 - 2:19pm

Also fwiw

Santa on Silver:

Eric King: “Jim, I wanted to ask you about silver and what is happening in that market?”

Sinclair: “You can clearly see that from the day the JP Morgan suit on silver manipulation was basically thrown out for the second time, the silver market has seen an explosion of selling and it has been trading very heavy.

So the volume of selling has risen constantly since the plaintiffs against JP Morgan attempted to have the suit reinstated, but it was thrown out for a second time. People have to remember it is easier to push the gold market around if you can make silver look weak. But I still believe we have seen the lows already in the silver market.

Dagney Taggart
Apr 3, 2013 - 2:20pm

Apmex Update

I watch the inventory of 100 oz JM new bars as sort of a gauge of current buying. It is typically in the 120-200 range. Guess what?

100 oz JM bars (new) - 28 left

100 oz JM bars (secondary) - some soon-t0-regret-this lemming sold 10 this morning

My Vancouver LCS, where I get the benefit of size and anonymity, is not selling anything until Ag is back over 30 and confirmation that the Comex will still be alive for actual delivery in a month. I asked for another 2000 yesterday. No way Jose.

Oh well. I grabbed a handful of circulated maple skipping stones from the junk bucket at the LLCS yesterday.

Apr 3, 2013 - 2:21pm



Looks like its getting impossible to figure out where the short term paper price of silver is heading. Even the PROS at GFMS got it wrong:

Thomson Reuters GFMS Silver Outlook for Next Three Months:

Date of Release: 8th March 2013

 We believe that the scope for further downside should be fairly limited, as good bargain hunting interest should appear if prices drop again below $28/oz. On the other hand, however, even assuming a short-covering rally, it is probable that silver will struggle to regain much upward momentum, with the $32-32.50/oz likely to be the ceiling before May. Key to this is our cautious view about the gold price, which will remain a handicap on the white metal. In addition, the economic situation is set to remain fragile in the key advanced economies in the short term and the ongoing uncertainty about the fiscal problems on both sides of the Atlantic will continue to weigh on investor sentiment towards the broad commodity sector. As such, the silver price is likely to continue its consolidation phase around $30/oz in coming weeks.

Well, a couple of things can be said... forecasting short term paper moves in silver are becoming increasingly worthless. Here we can see that GFMS got it wrong by about $3.50 an ounce, or 10-12%. Furthermore, this recent price move should do wonders for silver sentiment.

That being said, you will notice that global silver production increased about 40 million oz in 2012 over 2011:

2011 = 761 million oz

2012 = 802 million oz

2013F = 805 million oz

But, it looks like GFMS forecast for 2013 will only be a about a 3 million oz growth.


There seems to be a bit of concern about the supposed GLUT or SURPLUS of silver in 2013. I believe ole David Morgan tweeted about Standard Bank stating the Chinese have about 18 months worth of silver fabrication demand sitting in warehouses.

Even though sounds like a great deal... it's peanuts when you figure they have $1.26 Trillion in U.S. Treasury holdings (Jan 2013). This is up from $1.15 Trillion back in Sept 2012. Yeah... looks like the Chinese have been adding to their U.S. Treasury holdings.

Anyhow, the CAT & MOUSE GAME continues. 

The world holds so many PAPER ENERGY DEBT assets its not even funny. While the Chinese holds 18 months of silver fabrication demand in warehouses... its BOUGHT AND PAID FOR SILVER. Furthermore, it is bought and paid for TRADE-ABLE ENERGY.

The world is AWASH in PAPER ENERGY DEBTS while precious metal sentiment is in the toilet.


Apr 3, 2013 - 2:21pm


The chances of getting the right outcome despite using a flawed analysis is fairly high if you are a bull and there is a bull market in operation, irrespective of the qualities of your argument. That leads to confirmation bias which can kill you when the market turns.

Still $26 has been a good buy every other time, and it always feels like this.

Apr 3, 2013 - 2:22pm


Wish I had some cash on hand. Er, extra cash. I got a ton of 1's and 0's in some banks, but they be on the debit side, not the credit ;). 

Might have to divert some debt service over to some long-term survival service.

Apr 3, 2013 - 2:23pm

So according to Santa

So according to Santa, the silver manipulation is going into hyperdrive. Seems about right.

Apr 3, 2013 - 2:24pm

Like clockwork . . .

Check this out on Seeking Alpha's news feed:

2:19 PM Precious metals (GLD -1.4%), SLV -1.3%) tumble to new multi-month lows, with gold at $1,552/oz. the weakest since last summer and right near what technicians like to call long-term support going back to mid-2011. At $26.87, silver also threatens key chart levels. Comment! [Commodities, On the Move]

Any questions on what is going on? 

Apr 3, 2013 - 2:26pm


I stopped out today on the 200 AGQ I bought yesterday.

I'm going to buy back in near silver $26, if it gets there.

Apr 3, 2013 - 2:27pm


It's been a remarkably deep line in the gold for awhile and it held once again. If it gets breached I'll be a bit surprised but not shocked. Somebody (a CB?) has both hands buying at that number. If it gets broken in a significant or sustained way we'll get real close to $1500 imho.

Apr 3, 2013 - 2:27pm

Sinclair at KWN

Smells like central bank desperation.

There was nothing happening in any related market which would justify such a move. This type of operation was very reminiscent of the ‘Hail Mary’ play such as the one just seen in Cyprus. But the truly disturbing thing we are witnessing at this time is the sheer amount of effort being put into making everything appear just fine. 

A contrarian would have to come to the conclusion that there are some very frightening and serious problems being hidden from the general public. Regardless, what we have seen in the recent takedown in gold is without any doubt a coordinated operation, and all of this in an effort to make the US dollar look better.”

csquared13 TF
Apr 3, 2013 - 2:32pm

got stopped out of NUGT

got stopped out of NUGT already. would be pretty pissed, but i bought ZNGA on Monday so that helps alleviate some of today's pain.

i'll be loading up AGQ there as well..i'm on a buying strike 'till then. smiley

Apr 3, 2013 - 2:37pm
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