History In The Making

804
Mon, Apr 15, 2013 - 11:48am

I know that it's hard to watch your fiat-conversion price fluctuate so wildly but it's clear that we are on the verge of something major. There are two ways that this could go and, regardless of which outcome materializes, you're going to be glad you have physical metal in hand (or under water).

SCENARIO #1

This is what I've been warning was possible for about the past six weeks. Since the banks were seemingly caught flat-footed at the initiation of QE∞, the entire move from October to today has been contrived to extricate the banks from their naked short positions. Having succeeded in flipping the specs from long to short (The LargeSpecShorts in silver recently leapt from 6,500 contracts to 30,000 contracts in eight weeks!), why would The Cartels stop and let the metals bottom at the low end of their 18-month ranges? Why stop there when it was obvious to everyone that a plethora/cornucopia/boatload of sell-stops could easily be triggered if price could be hammered through. On Friday we saw this event take place and it was neatly chronicled by Ross Norman here: https://news.sharpspixley.com/article/ross-norman-gold-crushed-by-400-tonnes-or-usd20-billion-of-selling-on-comex/159239/

My expectations were this to happen was that we would likely see a very sharp, 2-4 day, 10% or so selloff. And where are we this instant? $1370 and $23.23.

$1525 - 10% = $1372.50

$26 -10% = $23.30

These numbers are not and cannot be absolutes. They are a guideline. We could, of course, go lower but this is what I thought was possible IF support was broken.

There's a lot of talk about $22 in silver and you may be wondering why. This chart shows you why:

But, I've got to tell you, I look at this chart and think: It's meaningless. Seriously. Do you really think price will bottom at the peak of price from back in March of 2008? Seriously? Look, if prices don't reverse in the next day or two, silver is more likely to fall to $18 than it is $22. I hope you're ready for that. (Regardless, if Scenario #2 is playing out, paper price is about to be insignificant anyway. More on that in a moment.)

Gold could fall farther, too. Maybe $1300-1310. (Did I really just type that? Whoa!). But, be on the lookout for a very sharp reversal.

And you know that, for quite some time, I've been telling you how awful the miners look. In the darkest recesses of my Turd-brain, I'd been thinking that maybe-just-maybe the HUI could fall to 250-300. And maybe-just-maybe, if it did, the miners would finally bottom. Well, here you go. FWIW...

So, anyway, as we wrap up Scenario #1...IF this scenario is correct, then you have an historic opportunity in both physical AND paper metal. In gold as of this moment, The Cartel is far less net short than they have ever been. Ever. And in silver, also as of this moment, the Specs are net short to an almost inconceivable level and The Commercials are likely net LONG. Nearly all of the risk of being short in the face of unlimited and infinite quantitative easing has now been transferred from the banks to the specs. Sort of like the end result of The Great Finanical Crisis of 2008, the risk willingly taken on by the banks has now been transferred to the public. As agents of the central banks and Western governments, why should this come as a surprise?

SCENARIO #2

This is the end of the fractional reserve bullion banking system. Consider this extraordinary decline, not from the perspective of technicals , quantitative easing or fundamentals. Consider these factors, instead:

  • Extraordinary physical deliveries, not just through London but also every other major global center including Shanghai.
  • The record Q1 depletion of Comex gold reserves.
  • The nearly 200 metric tonnes removed YTD from the GLD.
  • The record pace of demand for metal from the U.S. Mint.
  • The record premiums for bullion, even "junk" silver.
  • The "official' reported Chinese importation of 90 metric tonnes in February alone.
  • The destruction of the Kennecott mine in Utah, which in 2012, produced 25% of the U.S.'s copper, 5,000,000 ounces of silver and 500,000 ounces of gold.
  • And perhaps most significantly for this discussion: The DEFAULT of ABN Amro two weeks ago.

I call the ABN Amro move a DEFAULT because that's what it was, regardless of the SPIN. When a bullion bank declares that they cannot and will not deliver metal to clients who thought they held it in the bank's vaults, this is a DEFAULT. This is exactly what ABN did.

So given all of the physical fundamentals listed above AND the recent DEFAULT of a bullion bank, are we seeing the end of the fractional reserve bullion banking system? (And here I want to credit Bill Holter of MilesFranklin for connecting the dots in an email I received earlier today.) I have long suspected that the end of the silver manipulation would come as a Comex default, similar to the "Maine Potato Default" of the late 1970s. To avoid physical settlement (because there isn't any), the Comex simply halts paper metal trading and cash settles at some arbitary, closing price. To that end and to "save" as much money as possible, the days leading up to a default might actually be sharp DOWN days, as price is jammed lower, regardless of the fundamentals. Having achieved an "affordable" paper price, the markets are then closed and cash-settled.

The next day, physical trading resumes at a multiples-higher price level. Those with paper metal are left holding the bag and some paper money. Those who have been acquiring physical metal will finally see the value of that metal approach a measure of fair, supply/demand valuation.

This will happen eventually. It's ultimately what I've been expecting in some form as we end the Great Keynesian Experiment. What is important today, though, is that you comprehend the very real possibility that this is happening right now, in real time.

As I go to close, I see that gold is off almost exactly $100 at $1377. Silver is hanging in there, if you can say that, at $23.50. We are living through history. You should be proud and happy that you are at least alert and aware as this is happening. You have a ringside seat with an excellent view of The Fight. Have fun and enjoy. Most of all, do not be concerned about the short-term fluctuation of your fiat-conversion price. As I see it, only one of the two scenarios laid out in this post are possible and both scenarios point to a massive, history-making price appreciation in the days and weeks ahead.

Stay calm and be at peace. And, please, try to be a part of the solution, not part of the problem.

TF

About the Author

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

  804 Comments

¤
Apr 15, 2013 - 11:53pm
Picky Nicky freshiit
Apr 15, 2013 - 11:53pm

Re: Sprott American Eagle Monster Boxes

SPR-SML500-US appears to be available, but when I attempted to add SPR-SAE500-US to my cart, I received the message "We're sorry, item SPR-SAE500-US is out of stock.".

القراع عصفور
Apr 16, 2013 - 12:00am

old tradesman

its a known habit of sociopaths to clue in their intentions ahead of time. you see this time and time again, such as serial killers taunting with classified ads, or wall street telegraphing raids in chart formations.

Reachwest - there was a good debate on the shortage of metal tonight at Pailin's forum.

i have drank enough beer now that i think i might be able to sleep. hope tomorrow brings some relief. good night and good luck all.

Karankawa
Apr 16, 2013 - 12:02am

old tradesman on April 15, 2013

Great video! I can't believe how brazen people are. Did you make the video? How did you find it so quickly?

DeaconBenjamin
Apr 16, 2013 - 12:03am

Hesitant deposit

Deposited a couple checks at the credit union today. Took about 15 minutes. According to the branch manager, they had to call the issuing banks (out of state) and confirm that the funds were available before they would give me a deposit receipt. This is a branch where I have paid off several car loans and have banked for about 10 years. We have multiple accounts that receive direct deposit from our employers. 1) Are the banks that distrustful of each other? 2) Would a credit union not want the deposit?

Strongsidejedi Picky Nicky
Apr 16, 2013 - 12:03am

Silver Doctors is correct

I believe Silver Doctors is correct. There are no retail or wholesale US monster boxes available in the supply channels in the West Coast.

This is an unprecedented chain of events, which includes the biggest one day take down of the silver price in US history, the biggest mine collapse in recent US history, and the biggest USD-JPY exchange trade manipulation by BOJ in history.

Now, if anyone wants to argue with me, you go find the silver!

It will be on sale with at least a 12% premium.

The wholesaler was asking 12% premium and was putting limits on my volume of purchase.

LOL

There's no fricking supply.

There was a 15-20 person line outside the place when I walked out.

Even if I get back there tomorrow, there's no shipment arriving at least until mid-day.

So, the man's volume will be based upon silver sales from me, if I chose to replenish his supply at a higher premium.

Missiondweller
Apr 16, 2013 - 12:06am

Silverdoctors

*UPDATE: ALL US WHOLESALE SUPPLIERS ARE NOW SOLD OUT OF EVERY OUNCE OF PHYSICAL SILVER & HAVE SUSPENDED ALL SALES! SDBullion.com has closed due to lack of ANY AVAILABLE SILVER!

Two of the largest wholesale suppliers in the US, including Amark and CNT, who is the supplier of gold blanks to the US Mint for Gold Eagles, and is a registered COMEX depository, HAVE JUST SOLD OUT OF ALL PHYSICAL SILVER!!!

In the face of an EPIC TSUNAMI of gold and silver sales today as the cartel hammered the price of silver down over 12%, and off $6 from Friday’s open, we have just been informed at SDBullion upon trying to place a large inventory order that BOTH AMARK & CNT ARE SOLD OUT OF EVERY LAST OUNCE OF PHYSICAL SILVER!!!

Apparently the fact that one of the largest wholesale suppliers in the US is SOLD OUT, while simultaneously the 2nd largest silver mine in the US is offline perhaps permanently is of absolutely no consequence to the paper dumping cartel bullion banks.

The alleged silver shorts are going LONG HERE AND NOW, and will be NET LONG by 9pm Thursday evening when they must have exited their short positions.

AND……IT’S GONE!!!!!

Strongsidejedi DeaconBenjamin
Apr 16, 2013 - 12:07am

@Deacon Ben

1) Are the banks that distrustful of each other?

A: Yes. The issue is that every few hours some crook walks up to a teller window and gives a false check.

The checks are faked by people intercepting old checks, erasing the ink, and then rewriting the check to themselves. If the teller accepts the faked check and doesn't catch the forgery, they're fired by the bank.

So, yes, the teller is scared of you and yes the teller wants confirmation of the transaction from the other side's bank. Otherwise, those huge checks you are cashing ( just kidding!) might not clear and cause the branch to be punished by the big wigs.

2) Would a credit union not want the deposit?

Yes, the credit union wants the deposit, but they are in the same situation as the bank.

You'd be surprised how much banking fraud the tellers have to stop.

Louie
Apr 16, 2013 - 12:19am

@ ReachWest

I find it a bit perplexing to think that inventories could disappear so rapidly at the retail level. I'm more prone to believe that folks with supply are unwilling to part with the metal at these low prices. If I was a dealer, I would stick my Silver in the back room and put a SOLD OUT shingle on the front door, for the time being.

100+ hat tips to you. None for sale does not mean none in the back room.

RaulP
Apr 16, 2013 - 12:19am

Indian demand

All my Indian friends are buying gold like crazy!! Those who bought yesterday are still a bit disappointed but I don't think anyone is waiting for $1000.. anywhere in $1300s will be scooped away..Jewellery demand back home is overwhelming

Turdle GG
Apr 16, 2013 - 12:21am

Perth Mint

has anyone been able to access Perth Mint Bullion website? seems to have been down for most of the day

Turdle GG
Apr 16, 2013 - 12:23am

Aussies buying

Current market conditions

Due to the current fall in the gold and silver market, we are experiencing unprecedented demand for physical inventory. At this time all of our suppliers are able to provide us with stock, however lead times are increasing, and this is affecting order delivery times. Please expect 2-4 weeks on all deliveries during this busy time

https://www.goldstackers.com.au/store/

Turdle GG
Apr 16, 2013 - 12:25am

@Bron Sucheki

Bron, you seem to visit here sometimes. Do you have any updates from the Perth Mint regarding demand, availability, etc?

Animal Sacrifice
Apr 16, 2013 - 12:28am

@Question

Thank you for your kind words. I read here little and post less, mostly because I don't need the support and, as I wrote, trade so rarely that reports are few and far between. Naturally with the recent collapse, I thought I'd check in. I hope you fare well and make a good profit.

Ibú Ayé fun o ni opolopo owo!

AS

Karankawa
Apr 16, 2013 - 12:36am

Looks like Turd did it! Great Job!

Silver has broken out of the short term down chanel, for now.

That really doesn't MENA shit to ME, but it will to the 'traders'. (Misspelling intended), everybody that hasen't been aware is about to be face to face.

Turd has done a wonderful thing here. And I APPRECIATE the Turd.

Those that have been 'likin' Katies post get it.

I don't know it their are trolls here trying to destroy this site, but I know there are individuals posting crap and have been doing so for a long time.

This site is bringing people back to reality.

Turd, you should be proud as hell.

Karankawa

Nick Elway
Apr 16, 2013 - 12:37am
Mickey
Apr 16, 2013 - 12:39am

wow-silver up more than a buck since

Turd almost had to eat his hat.

The Watchman
Apr 16, 2013 - 12:42am

Catching A Bid-Hat Appears Safe

www.kitco.com

The World Spot Price - Asia/Europe/NY markets

MARKET IS OPEN
(Will close in 17 hrs. 3 mins.)
Metals Date Time (EST) Bid Ask Change from NY Close
GOLD 04/16/2013 00:13 1353.10 1355.30

+0.50

+0.04%

SILVER 04/16/2013 00:13 22.83 22.93

+0.14

+0.62%

PLATINUM

04/16/2013 00:13 1431.00 1439.00

+32.00

+2.29%

PALLADIUM 04/16/2013 00:12 672.00 678.00

+21.00

+3.23%

simjojim
Apr 16, 2013 - 12:50am

Volatility

As I type GOLD is up $40 from todays lows and Silver is up almost a buck. These moves were massive before last friday.

kingboo
Apr 16, 2013 - 12:54am

im still speechless.....

.........unreal........

Levon
Apr 16, 2013 - 12:55am
The Watchman
Apr 16, 2013 - 1:01am
Monedas
Apr 16, 2013 - 1:06am

I'm not buying it .... Green Lentil !

Hatte may be a veal and kidney pie .... so, I'll eat my hat .... translates .... into .... "If I'm wrong; I'll eat my dinner !" ? Take that, yee olde bitchez ! Monedas 1929 Comedy Jihad My Black Heart Bleeds Purple Piss For All The Goody Two Shoes Of The World Tour PS: Ex-wife #2 was planning to buy 10 rounds on Wednesday .... a fellow hoarder at work jested .... looks like silver's on sale .... she was a little discouraged .... I said to take the Monedas challenge .... and see how cheap you can actually get it at the LCS on Wednesday .... now she's all jazzed .... and will call them tomorrow from work !

tyberious
Apr 16, 2013 - 1:13am

RE:Citi guy that is bullish...

Baldy was as tool!

steveo
Apr 16, 2013 - 1:14am

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thesandbox
Apr 16, 2013 - 1:14am

Brent Crude...

now under $100

Karankawa
Apr 16, 2013 - 1:15am

I'm not buying it .... Green Lentil !

Monedas, you are funny. But Not anymore.

I put you on ignore once, and took you off. I will NEVER take you off again.

I've seen the such of you 'bathing' in maples and spreading propaganda.

It's officially done.

RaulP
Apr 16, 2013 - 1:17am

Provident Metals

NOTICE: We are experiencing extremely high order volumes and our servers are being strained. As a result, the website is slower than normal and we are unable to process orders over the phone. Please continue trying to place your order online. We are working to resolve the issue and appreciate your patience. Thank you for choosing Provident Metals!

Turdle GG
Apr 16, 2013 - 1:19am

Santa apologises, says banksters are now long

and that gold will perform as expected

see JSMineSet

AgAuthaChristie
Apr 16, 2013 - 1:27am

i am no longer in the fetal position

Note to self: should vacuum under the bed more often.

The worst is probably over. Will a return to the 1600's be quick or will it take a year?

Can anyone recommend a sober, non perma bull, non KWN shill factory assessment of what happened and what is likely to happen next?

I feel sorry for Sinclair. He seems like such a sweet old man, but man, did he blow it. People in their 70's shouldnt expose themselves to that much pressure.

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