Fri, May 10, 2013 - 11:50am

I know what you're thinking. How can I guy who is dead wrong all the time have his own website? Good question! Maybe it has something to do with this:

But, seriously, it's a good question. How can I be so freaking wrong all of the time? I mean, it's not like I just fell off the turnip truck and began drawing lines on charts. I'd been pretty good at this stuff for quite a while. So what has happened, aside from the obvious Jack Daniels, methamphetamine, valium and glue-sniffing addictions?

I think the answer lies with three things:

  1. Fed/PD involvement in manipulating nearly all markets
  2. The predominance of High Frequency Trading in nearly all markets
  3. And the coordination of numbers 1 and 2 above

For example, many wonder at how the U.S. stock market can keep going up. That's easy! The Fed's Primary Dealers receive, on average, about $2,000,000,000 each business day, direct from The Fed. Now most of this gets reinvested into treasuries in order to prop up the bond market but a considerable amount is left over each day and the majority of that money gets plowed into S&P futures where the attendant leverage multiplies the buying effect as much as 20 to 30 times. As Ruprecht would say: "That's a lot."

So, of course, the stock market isn't going up because your neighbor just put $10,000 into The Growth Fund of America or some old lady just bought 200 shares of ConEd. It's going up because The Fed is giving free money to the banks in order to prop it up. From there, the HFTs which represent about 80% of the daily volume, take over and bada-bing, bada-boom, you're at Dow 15,000.

And with all this free money sloshing around and being driven by mindless computers, technicals and fundamentals get thrown out the window. Technical analysis only works if a group of relatively risk-averse human beings actually see the same formations and lines and then choose to act in those certain spots. When you're dealing with computers and risk-free cash, you can do anything you want!

Sure, two days ago the POSX looked like it was headed lower. It doesn't matter. The euro looked stable to higher then, too. So what? Crude, the grains, copper...all the same. All driven by momo-chasing HFT computer algos which haphazardly buy one day and sell the next.

So what does this mean? Well, I'm still going to tell you what I think and what I expect but I must warn you again: Attempting to profit by trading in this environment is suicidal. You will think you are doing the right thing and then, for example, a baseless rumor gets floated after the Comex close and gold is whacked for $40 before it can re-open. How's that stop order treating ya? Brutal, just brutal.

(Of course, none of this is new. For those die-hards that want to keep trading, I set up the service with Andrew Maguire over a year ago. You might think it's too expensive but in return I'll ask you how much money you've lost over the past 30 days alone? Considering Andy's performance, I'd say his fee is pretty cheap. If you want to learn more, just click the ad on the right side of this page.)

So here we are. The machines have pounded us all the way to $1425 and $23.30. Ugh. Never mind that The Bernank made no mention of "tapering" today. Never mind that Andy reported that today was the largest physical allocation month-to-date in London. Never mind the CoT reports. Never mind the 300 tonnes taken out of the GLD YTD. Never mind the 100 tonnes taken out of Comex vaults YTD. Just...never mind. The machines are in charge and they will continue to be in charge...until they're not.

And when might that happen? Lots of talk out there about imminent collapses and paper disconnects. Chatter galore on force majeure and cash settlement. Oh sure, this is going to happen one day. No doubt about it. But just don't go getting your hopes up that that day is going to be next Tuesday. If we've learned anything these past three years or so it's this: The main power possessed by The Powers That Be is the power to put off the inevitable. The music will keep playing and the party will continue until the day comes when it simply doesn't. That day is coming and it will likely be at a moment not of TPTB's choosing. Clinging to power and the Old Order, the bullion banks will likely create paper metal until there simply isn't an ounce left that they can steal hypothecate and leverage.

Your only winning move remains the acquisition and storage of physical precious metal. And I don't mean the CEF or the PHYS or a certificate from an LBMA vault. I mean metal that you hold in your own two hands. The real stuff. Period. I know there are production and delivery delays. Who cares. Acquire it and deliver it, while you still can. In order to make this easier, I've assembled a list of "affiliates" for you. They can be found here: and here: If you want to hasten the decline of TPTB, go to these businesses today and order some metal.

Here are your mostly-worthless charts. Again, you and I can see where there should be support and buying pressure against the shorts. But that hardly matters when some goon no one has ever heard of can float a rumor and whack the global price of gold for $40.

And I know this is painful but I'm going to give you a CoT update later today, nonetheless. Cast it aside if you want. Claim that it's just fudged-up and manipulated, too, if you want. But...we are talking about levels of Spec shorting that we haven't seen since 2001 and, in some cases, even longer. This fundamental market structure will sometime soon show itself as a bullish indicator once again. It's just a matter of when. Now "when" might be when the banks are finally net long both gold and silver. We'll see. But for now, we'll just keep monitoring the levels in each category and discussing it every Friday.

Anyway, that's all for today. I hope you are able to have an enjoyable and relaxing weekend, regardless of all this nonsense. Keep calm and add to your stack.


About the Author

turd [at] tfmetalsreport [dot] com ()


May 10, 2013 - 1:11pm

Something Stinks!

The big G20 meeting of the globes financial guru's, occurred last month in Washington under the auspices of the IMF. Now we learn that the G7 financial guru's, are meeting outside London for today and tomorrow, to discuss financial reform. One or more of the participants are upset over the summons to meet, put out by the Brit's, saying that 'they didn't know why this couldn't have been resolved at the Washington meeting and not to have "spoiled" their weekend!

The G7 very rarely meets to discuss financial reform, yet this short notice/last minute meeting called by the Brit's smacks of desperation. Or, at best some emergency within the west's financial sector that requires immediate attention. When connecting all the 'dots' since the start of the year, one comes to the conclusion that this must have something to do with the unprecedented global demand for physical gold and silver. What else could it be?

May 10, 2013 - 1:14pm

PHYS etc

while its backed by the metal its still a paper investment. Taking delivery of the stock certificate is a leg up. But nothing is the same as physical in your very own possession.

I have a nice chunk of physical and also phys pslv cef and gtu. I do not know where to hide my stuff anymore as I am deathly afraid of bank safety boxes or even private depositories.

I have some in gold money-incase just the US and Europe and Japan crap out you can go to aisa and get it from their hong kong branch.

no easy answers.

and if in company 401k your choices are limited. My daughter borrowed from her plan and bought coins.

May 10, 2013 - 1:15pm

g7 g20, WH, Enron

"what difference does it make"

incompetence and greed and being corrupt drives everything.

May 10, 2013 - 1:17pm

The time for predicting is over

I bought my first phyz Jan 25th, 2001. The lightbulb started to get brighter for me, then it became clear to me by Jan 2005 - so clear that I maxed out my credit cards on low interest for the life of the loan and go all in on silver. At the time, I talked to family/friends about market interference (plunge protection team - later verified to be the Presidents Working Group on Finacial Markets), Govt. stat lies (GDP Deflator fudging back then), and other malevolent actors trying to steal my money. For the most part, I was laughed at.

Over the years (12+ now), one or two of my close acquaintances have waken - the rest still laugh. But I don't talk about any of that anymore - considering what use to be a cloudy manipulation that could only be seen by inference, to what is now direct, in your face lies on a constant basis.

But to the meat of this post - before the blatent lies, TA would work to some degree because the PTB (otherwise known as A$$HOLE$) were trying to obfuscate their actions. But things have gotten so precarious, they no longer try to pretend to be working in a free market place. So I don't think TA is going to work again until the reset. Consider...

  • You can't invest in bonds, when the bond bubble blows, you'll get wiped out
  • You can't invest in the stock market, when the QE bubble blows, you'll get wiped out
  • You can't hold dollars, when the currency markets impload, you'll get wiped out
  • You can't hold other currencies, see above
  • You can't hold land (unless you're producing on it) - when the Govt. bubble blows, you'll get wiped out
  • You can't short the market - you don't know how long they can keep it up
  • You can't short bonds - see above
  • You can't invest in mines - see SRocco's excelent stuff

If you want to gamble - you can try to move in any of the areas above - but to a large degree it is a gamble, and your odds of losing significant capital is high.

It's easier for me - my basis is low - but I don't think there is anywhere else to go - other than stack. I have a low basis on lead too - but I don't think I have enough.

May 10, 2013 - 1:18pm

CEF and Sprott Funds...

The pros:

  • Unlike GLD and SLV we know and trust the custodians.
  • Unlike GLD and SLV we know the bullion is there and unencumbered.
  • It is stored in Canada, not the US. A marginally safer jurisdiction.
  • You can invest from your trading/retirement accounts.
  • Safe from home robberies.

The cons:

  • If they are in a brokerage account your brokerage could get Corzined. This risk can be partially offset by having a margin-free account. It can be completely offset if you take possession of your share certs.
  • The Canadian government could pass a law to confiscate the bullion.
  • The US government could pass a law to confiscate your share certificates.
  • Small yearly management fees.
  • Trackable for cap gains taxes.

I personally am heavily into these vehicles...but I live on a small Carribean island nation with no bullion dealers and huge import customs duties and limitations. Were I living in Canada or the US I would still have some but likely lean more to physical stacking than I do now.

May 10, 2013 - 1:24pm

Jim Grant On Gold's Recent Drop: Misplaced Confidence in Ben B.

Good interview.

"Inflation is a state of affairs in which there is too much money," Jim Grant notes in this Bloomberg TV interview, however, "It's not too much money chasing too few goods," he corrects the misnomer, "the thing this money chases is variable." Whether it is Iowa farmland, housing, stocks, or bonds, central banks are stuffing us with it. Yes, equities are high, but Grant explains, "beneath the surface of things or not so far beneath the surface of things," it is not at all good, adding that, "Central bank 'original sin'," is akin to Revolutionary France, and he shows no concerns over Gold's recent dip, noting "a general fatigue animus towards gold," that seems predicated on more confidence in central bankers; to Grant, "that confidence is utterly misplaced!"

On Gold:

Gold has been in a bull market for 12 years. Gold is this rare thing in which you can be bullish and yet contrary and also with the trend. There is I think a general fatigue animus towards gold. The gold prices are reciprocal of the world's view of the competence of central banks. The greater the world's confidence in the Ben Bernanke's of the world, the weaker the gold market. The less the world holds confidence in the institution of managed currencies, the stronger the gold market. And to me the confidence is utterly misplaced,

May 10, 2013 - 1:24pm

Perth Mint Depository program

A question to Turdville.

Perth Mint allows one to own bullion via their depository program - both allocated and unallocated. Since they aren't affiliated to any banks, and are part of Western Australian state govt, there's no risk of bullion leasing. The other upside is the international storage.

However, if the emphasis is to hold physical, it seems one should take delivery of the allocated/unallocated bullion from Perth Mint. Is that preferable vs keeping it internationally?

Look forward to hearing the various viewpoints.

May 10, 2013 - 1:26pm


I'm almost speechless. I guess I can just expect to come here now, read a well written post by Turd... and then overly simplistic, asinine posts in contradiction. I don't mind hearing opposing views but at least pretend you're thinking when you post something people have to take time to look at. So its simple... confirmation bias. And clearly NOT the obvious misallocations of capital and blatant criminality in all these markets today? And coin premiums beginning to fall disproves record demand worldwide? Clearly...

May 10, 2013 - 1:27pm

speaking of Turkey

murphy's post in the last thread jogged what's left of my mind: just randomly poking around on Netdania I noticed that they added the Turkish Lira to the list of currencies in which you could watch gold in April or May of 2012, but they didn't add it to silver.

Turkey occupies almost half of Cyprus. I only need a conspiracy theorist to tell me that there is an underground headquarters beneath the Mediterranean, with some entrance guarded by an ancient Minotaur, in which a descendant of King Midas sits, rubbing his hands with glee while ruling the world. So much for the Denver airport.

Something is up, and it isn't my net worth.

The Green Manalishi
May 10, 2013 - 1:35pm

Gross Says Bond Bull Market

Gross Says Bond Bull Market Probably Ended April 29 By Paul Cox & Alexis Leondi Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest fixed-income fund, said the 30-year bull market for bonds has probably ended as yields reached a low and prices peaked.

“You need to look at an amalgamation of Treasuries, mortgages and corporates, and not just Treasuries,” Gross, co-founder and co-chief investment officer of Newport Beach, California-based Pimco, said in an e-mailed statement. “Measured on that basis, 4/29/13 has been the price high and yield low, to this point.”

Gross, who earned the nickname “The Bond King” in media outlets and was awarded fixed-income manager of the decade in January 2010 by Morningstar Inc., said today on Twitter that the bond bull market has “likely ended” and that fixed-income returns will probably be in the range of 2 percent to 3 percent. Gross spoke about an end to the fixed-income market rally in 2010, saying in March of that year that bonds may have seen their best days and then eight months later that a renewal of asset purchases by the Federal Reserve would probably signify an end of the bond bull market.

The yield on Bank of America Merrill Lynch’s U.S. Broad Market Index, which includes Treasuries, corporate debt and mortgage bonds, fell below 1.58 percent on April 29, before rebounding to 1.67 as of yesterday. Yields on 10-year U.S. Treasury notes fell to 1.61 percent on May 1, the least since December. The yield dropped to a record low of 1.38 percent in July 2012. The yield climbed to 1.93 percent today, reaching the highest intraday level since March 26.


Subscribe or login to read all comments.


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 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

Key Economic Events Week of 8/5

8/5 9:45 ET Markit services PMI
8/5 10:00 ET ISM services PMI
8/6 10:00 ET Job Openings
8/8 10:00 ET Wholesale Inventories
8/9 8:30 ET Producer Price Index

Key Economic Events Week of 7/29

7/30 8:30 ET Personal Inc/Spending & Core Inflation
7/30 10:00 ET Consumer Confidence
7/31 8:15 ET ADP employment
7/31 2:00 pm ET FOMC Fedlines
7/31 2:30 pm ET CGP presser
8/1 9:45 ET Markit Manu PMI
8/1 10:00 ET ISM Manu PMI
8/2 8:30 ET BLSBS
8/2 10:00 ET Factory Orders

Key Economic Events Week of 7/22

7/23 10:00 ET Existing home sales
7/23 10:00 ET Richmond Fed Manu Idx
7/24 9:45 ET flash Markit PMIs
7/25 8:00 ET Count Draghi/ECB policy meeting
7/25 8:30 ET Durable Goods
7/25 8:30 ET Wholesale Inventories
7/26 8:30 ET Q2 GDP first guess

Key Economic Events Week of 7/15

7/15 8:30 ET Empire State Fed Index
7/16 8:30 ET Retail Sales and Import Price Index
7/16 9:15 ET Cap Ute and Ind Prod
7/16 10:00 ET Business Inventories
7/17 8:30 ET Housing Starts and Building Permits
7/18 8:30 ET Philly Fed
7/19 10:00 ET Consumer Sentiment

Key Economic Events Week of 7/8

7/9 8:45 ET Fed Stress Conference, three Goon speeches
7/10 8:30 ET CGP Hump-Hawk prepared remarks
7/10 10:00 ET CGP Hump-Hawk House
7/10 10:00 ET Wholesale Inventories
7/10 2:00 ET June FOMC minutes
7/11 8:30 ET CPI
7/11 10:00 ET CGP Hump-Hawk Senate
7/11 12:30 ET Goon Williams
7/12 8:30 ET PPI

Key Economic Events Week of 7/1

7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 10:00 ET Construction Spending
7/2 6:35 ET Goon Williams
7/3 8:15 ET ADP June employment
7/3 8:30 ET Trade Deficit
7/3 9:45 ET Markit Services PMI
7/3 10:00 ET ISM Services PMI
7/3 10:00 ET Factory Orders
7/4 US Market Holiday
7/5 8:30 ET BLSBS

Key Economic Events Week of 6/24

6/25 10:00 ET New Home Sales
6/25 1:00 pm ET Chief Goon Powell
6/25 5:30 pm ET Goon Bullard
6/26 8:30 ET Durable Goods
6/27 8:30 ET Q1 GDP final guess
6/28 8:30 ET Personal Income and Consumer Spending
6/28 8:30 ET Core Inflation
6/28 9:45 ET Chicago PMI

Key Economic Events Week of 6/17

6/18 8:30 ET Housing Starts and Building Permits
6/19 2:00 ET FOMC Fedlines
6/19 2:30 ET CGP presser
6/20 8:30 ET Philly Fed
6/21 9:45 ET Markit flash June PMIs

Forum Discussion