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

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turd [at] tfmetalsreport [dot] com ()

  804 Comments

buzlightening
Apr 15, 2013 - 3:24pm

Just finished Willie interview.

Don't miss it and thx to whomever posted it. I LOL'd so many times my gut is splitting. Can Jim ever hit the bankstering BSing tail pipe and send'em a free jiffy lube back at'em. Now hold your own with physical metals and know these sites as turd's will be off line soon. I can't imagine the EE allowing this communication to go on much longer. We the people are more than the EE. Some big false flag coming very soon.

AlexCojones
Apr 15, 2013 - 3:26pm

No Bikini Atoll - Silver Eagle Roll

Saw this on da Bay. 16 bids with two hours to go and $32 for each coin.

Guess the paper / physical separation continues, and the MSM mantra of "Nobody buying PMs" is complete and utter BS.

John GaltDallasRichard
Apr 15, 2013 - 3:28pm

@ DallasRichard

You are absolutely correct in saying that people's lives are falling apart.

But to paraphrase another part of your reply I do not believe that the vague, hallucinogenic fluctuations of the prices of gold and silver alone is where any of us is going to find the answer.

There's an ignore button provided free of charge by the kind folks hosting this site.

Please feel welcome to use it.

JG

القراع عصفور
Apr 15, 2013 - 3:29pm

just bought at Goldmart

thank you for the link V.

what a day. now another bombing? wtf? if the world is heading straight for hell, let's get it the f. over with.

f you Bart. f,f,f,f! that doesn't seem to work any more. i still feel like crying. GLTA.

Northern Border
Apr 15, 2013 - 3:29pm

EXPLOSION AT BOSTON MARATHON !

So it begins !!!!!

Shits hitting the fan!

NB

Gold Five
Apr 15, 2013 - 3:30pm
Apr 15, 2013 - 3:30pm

Few more details re: Boston

2 Explosions At Boston Marathon Finish Line

By WBUR Newsroom April 15, 2013 Updated Apr 15, 3:23 am

Updated at 3:23 p.m.

The Associated Press reports:

BOSTON — Two explosions shattered the euphoria of the Boston Marathon finish line on Monday, sending authorities out on the course to carry off the injured while the stragglers in the 26.2-mile trek from Hopkinton were rerouted away from the smoking site of the blasts.

Competitors and race organizers were crying as they fled the chaos. Bloody spectators were being carried to the medical tent that had been set up to care for fatigued runners.

“There are a lot of people down,” said one man, whose bib No. 17528 identified him as Frank Deruyter of North Carolina. He was not injured, but marathon workers were carrying one woman, who did not appear to be a runner, to the medical area as blood gushed from her leg. A Boston police officer was wheeled from the course with a leg injury that was bleeding.

About three hours after the winners crossed the line, there was a loud explosion on the north side of Boylston Street, just before the photo bridge that marks the finish line. Another thunderous explosion could be heard a few seconds later.

Runner Laura McLean of Toronto said she heard two explosions outside the medical tent.

“There are people who are really, really bloody,” McLean said. “They were pulling them into the medical tent.”

Cherie Falgoust was waiting for her husband, who was running the race.

“I was expecting my husband any minute,” she said. “I don’t know what this building is … it just blew. Just a big bomb, a loud boom, and then glass everywhere. Something hit my head. I don’t know what it was. I just ducked.”

Original post 3:15 p.m.:

There have been explosions near the finish line of the Boston Marathon.

A Boston Police communications officer said the address of the explosion was 673 Boylston Street. There are possible injuries, but the number is not confirmed yet. EMS and the bomb squad are on the scene.

________________________________________________________

Three of my previous workplaces are on that street, either visible in or across the street from where the on-scene photos were taken. Extremely spooky.

I don't think it's nothing, but do not yet know WHAT. Will also try to call.

ctob
Apr 15, 2013 - 3:30pm

I didn't hit 23

I didn't hit 23 because I waited to se what would happen at 1:30. I could have but didn't.

Anyway although I think Maguire probably has it right and its dying down, anything could happen Tuesday. Might even get into mid 22 I dunno. But meh in the end I hit a time that was decent which is fine.

Darth Smokeragauinvest
Apr 15, 2013 - 3:30pm

I think you should get right

I think you should get right on it!

Probably a pain to do, but a thought

Submitted by agauinvest on April 15, 2013 - 10:30am. Hat Tip! 2

Can you imagine the composite view we'd have if we put all of our LCSs into one spreadsheet by state/country, or region, with their bid/asks, and actual (not online manipulations) statements of inventory levels by date and price movement? Seems like too much work, but it would be interesting.

question
Apr 15, 2013 - 3:31pm

Congratulations to Turd and the Web Monkeys ;-)

for the robust site these last few days You all done good

Thanks to John Galt and Katie Rose for sharing their tales of "the other side"; it's real, imho, and it's always timely to be reminded.

ScottJ, I've always appreciated your input, more so lately, succinct and relevant and with heart

"though my sea is dark, and my stars are gone, still I see the path through thy mercy"

re COT reports, all I've gotten from all the discussion is it's only good for producing headaches

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