Getting Ready

Sun, Jun 9, 2013 - 1:42pm

I suspect we are about to have a rather consequential week, therefore, here's a Sunday post to get you started.

There's certainly a lot of disgust and angst out there at the price action from Friday. Put me in that category, too. The U.S. unemployment rate rises from 7.5% to 7.6% and it's used as a rationale for a 2.5% selloff in the price of gold? Uhhhmm...yah...that makes a lot of sense. I guess what doesn't make sense is going over it all again as I made my frustration pretty clear in the previous post. In the end, the desperate scheme of The Bullion Banks to transfer as much short obligation onto the backs of the Specs continues unabated.

This week's CoT report showed next-to-nothing in terms of weekly changes to net bullishness or bearishness. The real action, though, sprang forth from the monthly Bank Participation Report. Again, it is this report that many analysts use to calculate the net long or short positions of the individual Bullion Banks...and this month's report is a doozy!

The report shows that not only are the major Bullion Banks no longer net short, they are actually NET LONG gold futures. I've seen one report that suggests this is the first time the Bullion Banks have been NET LONG since 2001. I've also seen a report suggesting that JPM itself is now net long as many as 50,000 contracts! IF this is true, and it's simply a matter of correctly interpreting the data (of course the DATA ITSELF has to be accurate), then there can be NO DOUBT that the precious metals are on the verge of a MAJOR BOTTOM followed by a ferocious rally.

The only thing I'd like to add to the discussion is the rationale for JPM's move into NET LONG territory. The shortages in their gold vaults has been well-documented and clearly this has much to do with it. But there seems to be a lot of curiosity this weekend as to how JPM can be net long so many gold contracts yet still be net short so many silver contracts. The answer likely lies in offshore and OTC positioning, but as this relates directly to The Comex, I think that part of the JPM gold position is actually a hedge against their remaining silver position. Huh? Let me explain.

As you know, I watch the OI and CoT levels pretty closely and I've been banging the drum pretty hard for months about the unusual and exceptionally large Comex Commercial GROSS LONG position. This gross level of Commercial long contracts has historically and consistently fluctuated between 30,000 and 45,000 for the past several years. At price peaks, the gross level would be close to 30,000 and, at price bottoms, the number would rise to somewhere near 45,000. Essentially, these "other commercials" added contracts at lows and then closed them out at highs, making a tidy profit from anticipating how JPM was going to once again fleece the Spec Sheep.

Well, something flipped with this last price cycle. At the lows of last August, the Commercials had again built up a large gross long base (47,797) and, by the time price was capped at the announcement of QE∞ in mid-September, this position had been trimmed back (32,206). During this entire Cartel operation in the nine months since, you would have expected that the Commercial gross long position would have grown again. But, would you have expected this?


8/14/12 $27.78 47,797

9/11/12 33.46 32,206

10/23/12 31.66 35,786

11/27/12 34.03 42,525

12/31/12 30.29 45,415

2/5/13 31.79 46,293

3/12/13 29.13 51,929

4/9/13 27.97 61,060

5/7/13 23.94 65,703

6/4/13 22.52 66,857

OK, so what the heck does all this mean? I'll try to bring it all together in some sort of coherent form:

  • Caught flatfooted and enormously short paper metal at the initiation of QE∞, a deliberate and calculated plan has been orchestrated by the major Bullion Banks, in particular JPMorgan.
  • By driving price the price of gold almost $400 lower, The Gold Cartel has been able to reduce their general liability by nearly 80% ( and, by virtue of the latest Bank Participation Report, some Bullion Banks have been able to move NET LONG for the first time in over a decade.
  • If reports are correct the JPM has flipped from 50,000 net short to 50,000 net long, we must conclude that the operation to smash gold is close to complete.
  • However, even though silver has been smashed a greater price percentage than gold, JPM has been been blunted in their attempts to completely cover their net short silver position as the "other commercials" (who at least on the surface don't appear to be JPM itself) have added at least 20,000 more longs than they have historically ever carried.
  • And notice that the gross long position shown above has continued to rise, even in the face of sharply lower prices over the past eight weeks. These are some very deep pockets that, clearly, are not being shaken out. Instead of selling on further weakness, they continue to add.
  • JPM could attempt to jam silver prices even lower in an increasingly desperate attempt to frighten these longs but at what cost? By doing so they lose big on their gold position and further exacerbate their already tenuous physical/deliverable gold position.
  • And it is this "juggling act" that leads me to think that this entire operation, which began a brutally-long nine months ago, is nearly finished.

You see, by moving so deeply long in gold futures, JPM has effectively hedged much of the remaining silver short position that they've been unable to cover. At its most basic level...if they are forced to cover silver into a rising price, the potential losses they'd incur will be more than equaled by the gains they'd show in gold. (Just for fun...If you're long 50,000 contracts and price rises $500 back to the August 2011 highs, you make $2.5B!)

Now, all of this is well and good and NO DOUBT foreshadows much higher prices for both metals in the weeks ahead. However, none of this is going to matter much to the Spec HFTs which are expected to pounce on the metals this evening, particularly in silver. The fact that China is "closed" through mid-week will only serve to exacerbate the paper price volatility. However, IF I'm right about the ideas laid out above, price should show surprising resilience this week. Gold has been very well bought each and every time that attempts have been made to drive it down through $1350. Let's see if this continues. Silver, too, has hung tough around $22 and has bounced back twice from "shock lows" near $21.

So, I'll close this post the way I began. This is going to be a very consequential week for the that will tell us a lot about the short-term and intermediate trend for price as we head into summer. Nearly every indicator that I've traditionally followed is indicating that a bottom is near and trend change is coming. Let's see where we go from here.


About the Author

turd [at] tfmetalsreport [dot] com ()


Jun 9, 2013 - 7:36pm

Bit random, but Brits beware ...


PUBLISHED: 21:09 GMT, 8 June 2013

N.P.writes: Recently I have had two cold calls, the first recommending an investment in coloured diamonds and the second an investment in silver.

Subsequently, I received a letter from Clarion Capital Limited, the company that called me, and with it was an investment document from Physical Silver Investment Limited.

I then received a further call in which I was strongly advised to invest a minimum of £10,000 in this silver fund.


As for Physical Silver Investment, it is a bit of a mystery. This Manchester-based company says it is raising £500,000 to buy silver bullion, which will be stored offshore for at least seven years. But it warns in the small print that investing ‘may expose the investor to a significant risk of losing all of the amounts so invested’.

I asked director Christine Adamson how it could be possible for her company to put £500,000 into silver and lose the lot. She went straight to her solicitors, who demanded that I promise not to publish your letter. Well, that didn’t work.


Read more:
Follow us: @MailOnline on Twitter | DailyMail on Facebook

How to lose the lot ... give it to us

they even say they are going to 'store' it offshore.

The Watchman
Jun 9, 2013 - 7:37pm
Jun 9, 2013 - 7:47pm

Edward Snowden is a hero

I just wish I saw more outrage by the sheeple to find out just how corrupt their government is. WTF?

Charles S. Hamlin TF
Jun 9, 2013 - 7:54pm

Re: Risky Business video clip

I was at Illinois when this movie came out and I've got to tell you, while it kind of dissed Illinois as compared to Harvard, et al. , many of us thought it was so funny! Thanks for sharing...


Jun 9, 2013 - 7:57pm

Here is Bullocks trying to get into Bilderberg

And no, he is not the one in the foreground. Bullocks is the one with horseknee up his arse! Ouch

Charles S. Hamlin
Jun 9, 2013 - 7:57pm
Jun 9, 2013 - 8:01pm
alan2102 Bollocks
Jun 9, 2013 - 8:01pm

bollocks - bilderberg

mark mcgowan, your irrepressible cabbie, at the bilderberg meeting:

Video unavailable
R man J
Jun 9, 2013 - 8:08pm

Edward Snowden

My hat is off to this young man. At 29 he gave up unbelievable money, a government gig in Hawaii, (paraphrased from his interview) He could not "put up his feet at the end of the day, flip on the TV and forget about the fact that enough data was being collected on anyone, that whenever the government wants, they can take a baseless accusation, delve into your past and find something you said, or an association and take away your life."

He said he could have made a fortune selling secrets to the Russians. He is not in it for the cash obviously.

Jun 9, 2013 - 8:09pm

The nonsense behind state intervention--Alistair MacLeod


Both Keynesians and monetarists believe that increased government spending, or more money injected into the economy, is sometimes necessary. The intervention is in the form of unfunded government spending, artificially low interest rates to boost demand for money and bank credit, or a drive to make the currency “competitive” by lowering it. These methods have been tried unsuccessfully time and again, and they must be denounced if we are to understand our true economic condition.

The reason they don’t work can be summarised as both an oversight and a fallacy. The oversight is to look at only one side of a government spending proposal: a new bridge, hospital or school is a visible benefit. What is easily ignored is the cost, which is spread between many individuals’ savings and earnings. If these resources were not redirected, they would be available to consumers to spend as they see fit. This is important, because it is consumer demand that drives innovation and economic progress, not government redistribution.

The basic fallacy is to subscribe to ideas that are consistent with the cost of production, or the labour theory of value, and to try to shoe-horn it into the reality of consumer price subjectivity. The list of economists who have made this mistake is far longer than those that understand the error, including Thomas Aquinas, Adam Smith, David Ricardo, John Stuart Mill and Karl Marx. It is the bedrock of socialist thought, which divides us pejoratively into the exploited and capitalist classes. The truth is very different: the consumer through his choices decides prices and what is made, and any producer that fails to respond goes out of business.

The nub of the problem is mainstream economists do not understand prices. They draw supply and demand curves that illustrate, other things being equal, lower prices stimulate demand. Putting to one side the fact that other things are never equal, that is a reasonable starting point. This is then contradicted by macro-economists who believe that falling prices defer and suppress demand, and moderately rising prices stimulate demand.

Therefore the contradictions start from the most basic level, and from there the errors multiply. Instead of abandoning cost-of-production theories, mainstream economists seek to subsidise producers, either directly or by monetary means. It amounts to a subsidy for businesses that would otherwise fail. Furthermore successful businesses are encouraged to seek subsidies and discouraged from redeploying their capital into genuinely profitable investment.

Through relentless government propaganda nearly everyone today believes that state intervention is a force for good, but the truth is very different. Government intervention amounts to reducing wages and destroying savings through monetary inflation, while putting prices up. Admittedly, there can be a short-term artificial boost from lower interest rates and monetary expansion, but this is quickly reversed when prices start to rise.

A reasoned analysis of the true effects of government intervention reveals the truth: it comes at considerable economic cost, disrupting economic progress and leaving us all worse off as a result. Is it any surprise that reflation has now finally ceased to even generate short-term benefits?

Double Bogey
Jun 9, 2013 - 8:11pm

LCS (Show) report

About 25 dealers. Saw plenty of gold and silver, but did not witness much bullion buying. I didn't have much to spend but bought 4 Canadian Cougars for a negotiated $26 each. I did take one of my few 1 oz AGE to hopefully make a good GSR swap. It was a 1986 proof that I bought a couple of years ago for $1600, a few % above spot. With GSR at 63.8, I received in trade 6 10 oz poured bars from Monarch and 2 ASE. 4 hours into the show, the dealer said he hadn't bought a thing all day, and the was discouraged by lack of sales. I've only done the GSR swap thingy once before last and thought I was making good when the GSR was about 50. How high can GSR get? I have to admit I'm getting weary of the beating we are continually taking. Thank you sir, can I have another? I've lost all credibility with family and friends, although my brother sees the writing on the wall and has been pretty good about buying regulary. Enough whining, thanks for the handholding.

Jun 9, 2013 - 8:21pm
Jun 9, 2013 - 8:30pm


An angle that may prove to be be a positive gold catalyst. One I hadn't considered. Imagine the rush into physical if a billion Chinese start to sniff higher inflation?

Jun 9, 2013 - 8:41pm

Letting go of "price".

It's not a bad idea to let go of the concept of "price" for the metals. They are literally PRICELESS.

FOFOA is right. Gold, Silver will crash and then there will be a period of pricelessness until the new system. The key is to survive long enough to make it through the hell of pricelessness....

If silver dropped to $21, then $20, $18, $14, $12.... and stayed there for about a year and a half.... could you survive without selling?

Jun 9, 2013 - 8:43pm


Out All the Stops

Commander in Chief: Totalitarian Socialistic Fascist Racist Golfing Vacationing Farcical-Habitual-Campaigner

Fascists: Campaign Contributing Banksters, Undue Influencing Greedsters, USSA Senate and USSA Commander in Chief

Enforcers: Totalitarian Henchmen, MSM Pundits, Press Secretaries, USSA Senate, Panzer Corps, Lock Down Wardens, USSA Police State and DHS

As any loyal dissenter would. Its our duty to the country. Play it again sam.

Go-Go's - Our Lips Are Sealed (Extended 12" Version) (Music Video)

Hey, is that Laura Ingraham on the drums? Must have been converted.

Neil Young - Rockin' In The Free World
JM--R.O.C.K. In The USA
The Watchman
Jun 9, 2013 - 9:22pm

Latest: Ron Paul

But I think we are going to go through the ringer. I think it's going to get much, much worse. It is bad enough already, but there is no way that we can step back.

The one thing I am convinced of, after having spent so much time in Washington, is that this will not be a gradual recovery from this disaster that we have. We are not going to elect enough people and have enough courage to vote the right way; there is too much demagoguing and too much misunderstanding. The people would revolt, but the collapse will come. It is going to hit the dollar, and then we are going to have our opportunity.

So, the more people who are protected intellectually as well as financially, the better off we will be in rebuilding what we will need to do in the near future.

Jun 9, 2013 - 9:32pm

LCS report, Fresno, California

I had just gotten through the door of my LCS yesterday, when I watched a guy buy up all of the 40 something silver bullion coins they had in stock. Their gold is still marked the same as it was weeks ago, at around $1500 - 1600/oz. Priced for collecting dust, IMO, when I can order it online for cheaper. Their silver bullion premium is up $.50 from $1.75 to $2.25 /oz. ASEs are spot+ $6.50.

I have been in and bought a few of their junk dimes over the last few weeks, and this time I asked why they haven't changed their prices with the change in silver price "I get tired of changing the prices back and forth," the dealer said. "Yea, but recently it's been going more back than forth," I replied. He said something to the effect of "It goes up and down", brushing off my comment like it wasn't true. If people will still buy at $30fiat for $1 junk silver, I guess that's a money making reason not to change the price. Their junk area/ inventory doesn't seem to go down much except for Morgans, which seem to be always coming and going.

I bought a couple numi Walkers and split. I can't do the bullion thing any more, in the near term. My gut keeps screaming out that silver price will go lower and I should wait to buy at lower prices. I want to catch the bottom, not continue to catch the knife all the way down. The guy buying all those bullion coins looked sad/resigned while doing so. I don't want to look like him and I felt pretty happy with my numi buys.

Jun 9, 2013 - 9:48pm / By / By Martin Armstrong /

June 9, 2013

The NSA is storing absolutely everything. Every time you type a search into Google, the NSA knows. This is what the storage in Utah is all about. If you would like to see our old site from 1999 just click here and enter There is an archive of the entire web year by year.

You can even see when the government shut down the site and redirected the address to other pages.

This presents an interesting issue. In prison, there are cameras everywhere except in the unit where people live. Why? The guards have to have someplace they can beat you up with no evidence.

Is this NSA database available for lawsuits? They can pull up anyone looking for child porn or searching for a place to hide their gold overseas. Whatever. Anyone with a foreign bank account – they got it. A foreign bank sending a email confirmation or statement – they got it! So legally, this entire database is there and could be subpoenaed for a lawsuit. Is there a phone conversation where someone intentionally planned to rob a company? Perhaps you have an employee who stole something and you need to know who he sold it to. What about a spouse cheating and money depends on that in a divorce case? Want the phone calls that PROVE the NY Bankers manipulate markets? It is all there!!!!!!


Jun 9, 2013 - 9:52pm

Colorado to split into two states!

6/6 10 pm — Weld County is leading the push to become the 51st state. Marc Stewart has details.

Officials in eight northern Colorado counties united in opposition to the state’s new gun control laws and oil and gas regulations are reportedly considering forming a 51st U.S. state called North Colorado.

The Denver Post reports that a proposal to separate Weld, Morgan, Logan, Sedgwick, Phillips, Washington, Yuma and Kit Carson counties from the rest of the state was hatched at a meeting of county commissioners last week.

Weld County commissioners Sean Conway, Mike Freeman and Doug Rademacher said they will conduct public meetings and decide whether to draft a ballot measure by Aug. 1., according to a report in The Greeley Tribune.

Weld County Commissioner Sean Conway told ABC News that his constituents feel “ignored and disenfranchised” by the state government and Colorado State Senate Bill 252 is the “last straw” in “threatening their way of life.” Conway and other county leaders plan of response proposes that willing Colorado plains counties form a new state and call it “North Colorado.”

Jun 9, 2013 - 9:57pm
Green Lantern
Jun 9, 2013 - 9:59pm

Re: Alistair

Let me give you a street view of government. Alistair is a good man, batting for the right team, with good interviews but his description is a little sanitized for my tastes. He needs to put a little more snot on his commentary.

Goverments prime directive is Power! Maintaining and expanding it's little sticky hands in places it doesn't belong. The only way an individual has power is through an institution. Immutable law #1. You must create institutions and corporations to serve your power interests for that is the venue in which you can yield your power.

Kensyian and socialist agenda's by it's very nature limits the power of the people and gives more power to government. It reinforces slave like behavior and throws scraps to those who can't and those who won't by taking from Peter and giving to Paul. It sets the bar low for society by telling people, this is the best you can expect. You need us for we are looking out for your best interests. Thank FDR for that with all his socialists reading.

Governments expand the money supply to support the prime directive. Power and expansion. Not service. If the only thing governments build were bridges, and hospitals we'd be ok. But even having their noses in hospitals and schools where they direct the agenda is a dangerous gambit. It brainwashes your children and creates closed markets. Again the rule is institutions are needed for power holders and schools become not a venue to create healthy thinking children but children who are brain washed on government agenda's

The Common Core Curriculum Your children on government books.

Indoctrination in Common Core ELA Texts

By far the #1 reason, governments expand money supply and feed money to banks who are insolvent is again, they need those institutions to serve their greater agenda-POWER! Power requires the end of a gun and lots of them. They need think tanks and high paid consultants to tell government how to use those guns, big PR firms to tell government what to tell the public.

During Hurricane Katrina when the city flooded because of old and ill taken care of flood walls, did anybody ask what happen to all the tax payer $ that was supposed to have been put into infrastructure? Of course the very same Mayor who cried that government didn't come to his aide quick enough was indicted on multiple charges of using his power to profit. Volumes of books could be filled on how governments all around the world give priority to the prime directive while ignoring the needs of their brain washed citizens.

The harvard economists are also brainwashed just like everybody else. They are all Keynesian because their teachers were kensyian and so when Obama picks up the phone to ask for advice, who does he get?? A Keynesian. My parents wasted their money sending me to college learning macro/micro economists with a bunch of marixst professors. I had to relearn everything.

Jun 9, 2013 - 10:31pm

Karen Hudes Update

This is an interview she did with Ernest Hancock last Thursday. Ernest is a self proclaimed anarcho capitalist. Ernest does a good job letting Karen get her message out until the on air show comes to an end. He then has an off air discussion with her that is really interesting. I think the whole interview is very well done, but I think the points Ernest makes in Pt 4 are GOLDEN.

KarenHudesErnieHancock130606 1 4
Fred Hayek
Jun 9, 2013 - 10:38pm

No understanding but belief and trust in some greater persona?!

Someone earlier softly sneered:

Especially given that most of your audience don't bother with understanding and invest based on belief and trust in some greater persona.

I can't find my dictionary. Is "some greater persona" a synonym for inescapable math? Just wondering. Because I see numbers like $16 trillion of debt, like $1.2 trillion more debt every year, like $60 trillion or more of unfunded liabilities and I see inescapable math. I see mathematical reality with the pull of a fvcking black hole yanking in and destroying whimsical, pixieish beliefs that things will all just work out and everyone with all their money in equities will be just fine, crushing to subatomic essence normalcy bias that things are like this now and goddam it, they'll always be like this. I need to get myself a thesaurus and look up this "greater persona" term. Must be new.

The Watchman
Jun 9, 2013 - 10:49pm
Jun 9, 2013 - 10:54pm

Edward Snowden-My Hero

First of all, I urge any who have not watched the video at the links provided by wouldyoubelieve or Turd to do so.

This young man gave up everything, including possibly his life, because he could no longer tolerate what his government was doing. Being an insider, he was only too well aware of the consequences he faced.

His statement, "I don't want to live in a society that does these sort of things," I think is a less dramatic equivalent of Patrick Henry's "Give me liberty, or give me death."

I found it saddening that his greatest fear was not what would happen to him, but that after putting his neck on the chopping block, nothing would change.

It is our duty as American citizens to make sure this doesn't happen. He deserves all the support we can give. How many more chances will we get before they flip the switch and we enter, in his words, "turn-key tyranny?"

Jun 9, 2013 - 10:55pm
Jun 9, 2013 - 10:56pm


Up on Globex!

Jun 9, 2013 - 11:22pm

BREAKING: US Embassy In Kabul


Explosions and gunfire heard near Kabul airport
Suspected militants have launched an attack close to the main airport in the Afghan capital, Kabul, security forces say.

Witnesses reported the sound of explosions and gunfire coming from the airport shortly after dawn.

It is not known if there are any casualties.

The airport is home to a large Nato-led military base. One report said the US embassy in Kabul had sounded its “duck and cover” alarm.

The embassy also announced on loudspeakers that the alarm was not a drill, AFP news agency said.

Large explosions heard coming from NATO headquarters at Kabul airport in Afghanistan


Weasel Tracker
Jun 9, 2013 - 11:23pm

Silver price vs. mining profitability chart and Volcan mining

Mining Costs of Silver Miner: Volcan Compañía Minera
Jun 9, 2013 - 11:30pm

another Embassy

how convenient (in my best churchlady voice), I know cynnical, but come on people, here's the big question, is this whistleblower evidence the Rubicon? or do the sheeple just go quietly back to DWTS and then sleep?


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Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)

Key Economic Events Week of 4/29

4/29 8:30 ET Pers Inc, Cons Spend, Core Infl
4/30 8:30 ET Employment Costs
4/30 9:45 ET Chicago PMI
5/1 8:15 ET ADP jobs report
5/1 9:45 & 10:00 ET Markit and ISM Manu PMIs
5/1 10:00 ET Construction Spending
5/1 2:00 ET FOMC Fedlines
5/1 2:30 ET CGP presser
5/2 8:30 ET Productivity and Unit Labor Costs
5/2 10:00 ET Factory Orders
5/3 8:30 ET BLSBS
5/3 9:45 & 10:00 ET Markit and ISMServices PMIs

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