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

  Refresh
SilverSurfers
Apr 15, 2013 - 11:36pm

Out There, for something Totally Complete

Dont know if any read "channelling Deep" but dont bother, it only poses the question, which was touched on by Claude.

Now some refinement.

JS said: They do not care about the dollar or seek to please the Federal Reserve.

This not only makes sense but also suggest, Dimon et al, dont care, its money .... JPM-FED conspiracy falls, substantially so.

BUT, if the FRN goes to Zero, per the FED, zero times anything is still zero, JPM and kind end up losing (not considering the bonuses, personally made along the way)

OK, This make some sense, recalling that "in the old days" the FED would hall a miscreate on the carpet, and he would be moved out, and get the boys back on the same page. BEN is personally weak, or not of that kind of guy, but really a bankster wimp, to bow to those really in charge, at least the FED has not outsted the miscreate JPM GS et all, whom have something to do with puppeteering.

OK, so the bad guys must know the end game, (so keep stacking) with a zero value FRN, and hence, the dollar reboot and rebalance, and transfer of wealth, from paper (people and taxes on grandchildren) to bullion.

OK, It is expected that COT will flip, the moon shot for bullion, as this supports, (does it not), plyable weakling BB? Its about money, JPM-GS et al ruling the roost, with a kinder gentler FED, with BB in charge.

SO, using best mental limits:

the smake down in bullion allows JPM-GS to go long gold, at some point, until the COT flip, then moon shot, then JPM-GS accumulates gold in advance of the FRN reset, enabled by a nicer gentler FED, the enabler to print QE-Zirp until kaplop till reset and rebalance, after JPM-GS goes long gold, until the reset and rebalance, and JPM-GS holding the vast amount of gold, that is now tier one money, in a quasi-gold standard. Makes sense, and ends the mystery for at least one. To bad it anit about JoeSixPack, the economy, Americana or Freedom, but only stuffing the pockets of JPM-GS et al, and that really sucks. BB is not principle perp here, just a plyable enabler who wants out, and has been USED, as a puppet, JPM-GS are the real bad guys, while the western world burns and get screwed, BIG TIME.

Only one man's opinion, I could be right, way right, reactionary.

Libertarian-Greens, 2020!!!!

Sincerely Yours and Most Respectfully

It HAS BEEN truly an honor to be your obedient Servant.

DeaconBenjamin57Goldtop
Apr 15, 2013 - 11:35pm

Greenback dollar

Kingston Trio - Greenback Dollar
57Goldtop
Apr 15, 2013 - 11:34pm

Old Tradesman

Been a while. 'bout time you took over DJ duties in the Speak for a night my friend.

And about your video. Ugh. While not surprising, sickening.

When will people realize we're being taunted?

ReachWest
Apr 15, 2013 - 11:34pm

SilverDoctors

@Sandman: I noticed SilverDoctors down earlier today (No Connection to Database) - but - it's back up now.

EDIT TO ADD: This article on SilverDoctors would seem to be important - they claim wholesale supply of Silver is gone.

SilverDoctors.com wrote:
*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!

That's a pretty sensational headline - but - if true, we should see shortages cropping up all over the place. Personally, 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 ... unless I believed the price was going to continue falling at stay low. (I'm not saying that is what SDBullion is doing this - but - is it possible that their suppliers/wholesalers are?)

FriedEggs
Apr 15, 2013 - 11:30pm

Dark

Humor in almost everything... if life wasn't so tragic, it would be kinda funny.

Way Out West- Stan eats Ollies hat :)

.

God Bless...

Fried(e)

Prize Fighter
Apr 15, 2013 - 11:29pm

The End Game - SGTbull and

The End Game - SGTbull and Ranting Andy

THE END GAME - Andy Hoffman
The Watchman
Apr 15, 2013 - 11:29pm
question
Apr 15, 2013 - 11:27pm

@Animal Sacrifice

Been a while; good to hear you're still doing and doing well

Texas Sandman57Goldtop
Apr 15, 2013 - 11:21pm

anybody know what happened to the silverdoctors site???

Is it because they're out of business (can't get silver)???

57Goldtop
Apr 15, 2013 - 11:18pm

DeaconBenjamin

Nice price. All I know is that tomorrow I'm going back for one more silver dollar.

This from Saturday at MSG.

Midnight Rider - Haynes, Trucks and Gregg Allman - Crossroads Music Festival 2013

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 4/20

4/20 8:30 ET Chicago Fed
4/21 10:00 ET Existing home sales
4/23 8:30 ET Weekly jobless claims
4/23 9:45 ET Markit flash PMIs
4/24 8:30 ET Durable Goods

Key Economic Events Week of 4/6

4/8 2:00 ET March FOMC minutes
4/9 8:30 ET Producer Price Index
4/10 8:30 ET Consumer Price Index

Key Economic Events Week of 3/30

3/31 9:45 ET Chicago PMI
4/1 8:15 ET ADP Employment
4/1 9:45 ET Markit manu PMI
4/1 10:00 ET ISM manu PMI
4/2 10:00 ET Factory Orders
4/3 8:30 ET BLSBS
4/3 9:45 ET Market service PMI
4/3 10:00 ET ISM service PMI

Key Economic Events Week of 3/23

3/24 9:45 ET Markit flash PMIs
3/25 8:30 ET Durable Goods
3/26 8:30 ET Weekly jobless claims
3/27 8:30 ET Personal Inc and Spending

Key Economic Events Week of 3/9

(as if these actually matter)
3/11 8:30 ET CPI
3/12 8:30 ET weekly jobless claims
3/12 8:30 ET PPI
3/13 8:30 ET Import Price Index

Key Economic Events Week of 3/2

3/2 9:45 ET Markit Manu PMI
3/2 10:00 ET ISM Manu PMI
3/2 10:00 ET Construction Spending
3/4 8:15 ET ADP employment
3/4 9:45 ET Markit Service PMI
3/4 10:00 ET ISM Services PMI
3/5 8:30 ET Productivity & Unit Labor Costs
3/5 10:00 ET Factory Orders
3/6 8:30 ET BLSBS
3/6 10:00 ET Wholesale Inventories

Recent Comments

by robobrewer, May 24, 2020 - 11:35pm
by dangerkitty, May 24, 2020 - 11:19pm
by billhilly, May 24, 2020 - 9:58pm
by lakedweller2, May 24, 2020 - 9:47pm
by Noteriety, May 24, 2020 - 8:49pm