Another FOMC Week

Mon, Jun 17, 2013 - 4:20pm

Not much happening today, which isn't surprising given that all of the action is slated for Wednesday.

So, Monday's over and Tuesday awaits. But the real action will come on Wednesday with the conclusion of the latest FOMC meeting. We'll get the usual "Fedlines" summary that will be issued shortly thereafter as well as the "press conference" hosted by The Bernank himself.

Everything will focus upon the Fed's plan to "taper" QE. Will they taper? Maybe they won't taper? If they do taper, how much will they taper? Blah, blah, blah, blah, blah.

If you wan't to to read about this nonsense again, please click this link from last Tuesday. It pretty well sums up where I stand.

To the extent that The Fed temporarily has wiggle room to taper, much of that line of thinking was tied to the misplaced assumption that someway, somehow the U.S. federal deficit for fiscal 2013 was going to come in much lower than originally thought.

(Remember: QE∞ is entirely about funding the ongoing deficit spending of the U.S. government. In the absence of any buyers {}, The Fed must purchase nearly all of the ongoing Treasury issuance. QE is $85B/month which equals just north of $1T over 12 months. If the 2013 deficit was going to be just $600B, then the Fed could possibly "taper" back to $50B/month.)

However, there is no way, no how that the 2013 federal deficit is going to come in at $600B. With four months to go in fiscal 2013, the current deficit already stands at $626.3 billion. Hmmm. I guess in order for the deficit to come in at $642B as the CBO had forecast a few months back, the government is going to run at a break even pace until the end of September. The likelihood of that is "slim to none and Slim just left town."

More likely is that the 2013 deficit will come in very close to the original projection of near $1T. Why? After a recording their usual, tax revenue inducing-surplus in April, the monthly deficit for May came in at $139B (for May alone!), the highest deficit for the month of May since 2009. (

Again, that $139B in deficit pending for May took the total for FY2012 up to $626B. If the U.S. just averages $100B/month in deficit spending for the next four months, we'll blow right through $1T again on our way toward $1.1T or even $1.2T.

With a deficit at $1T+, The Bernank no longer has any leverage at all and will be unable to "taper". Period. End of story. In fact, glossed over in the minutes of the late April FOMC meeting was this:

"The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes."

Obviously, I've added the emphasis in the sentence above but, clearly, it's worth noting. That "The Committee is prepared to increase or reduce" was new language, inserted just this past month. Yet no one seemed to care. All anyone wanted to discuss was the "taper".

Well, taper-schmaper, I say! Again, no way, no how. It's far more likely that the monthly QE figure will increase to $100B before it would be reduced to $60B. Watch the deficit numbers. They'll tell you all you need to know.

Similarly, watch these charts this week. They, too, will tell you all you need to know. Price will either break out and UP are down and out. We'll see...

Just a couple of more things...

I've had two, separate interviews over the past 24 hours. First, I was on with Kerry Lutz earlier today:

I was also on with Dr. Janda yesterday:

And Santa asked me if I would help him to promote his next three CIGA meetings. Of course I'm happy to oblige. I just wish that I was able to attend one of them but I can't make any of them. However, you should do everything in your power to make it to one. Every previous session has been met with rave reviews and I'm sure that each of these next three will be equally valuable.

The sessions will be in Chicago on July 8, Vancouver on July 10 (maybe that weasel, Christian, will show up?) and Scottsdale on July 12. You can read all about them and sign up here:

OK, that's all for today. I need to get to the gym in order to work off some stress. More tomorrow as we prepare for a volatile mid-week.


About the Author

turd [at] tfmetalsreport [dot] com ()


Jun 17, 2013 - 4:22pm



Jun 17, 2013 - 4:23pm
Jun 17, 2013 - 4:25pm

Interview with Sprott...

Interesting interview with Eric Sprott on Silver Doctors:


Jun 17, 2013 - 4:26pm

Thanks TF

Thanks TF

Jun 17, 2013 - 4:28pm

Taper just another distraction

Not what is “a” dollar, because there is only one answer to this and unfortunately “is” no longer. The legal definition of a dollar is 371.25 grains of silver. What we use today has no link to silver whatsoever, and is merely a promissory note issued by the Federal Reserve. “The” dollar on the other hand is the currency of the U.S. yes, but more importantly it is the “stock” of the U.S. It goes “up and down” versus other currencies, other monies (gold and silver) and against commodities. The dollar goes up and down based on many factors, supply and demand of course but “confidence” is the largest factor. In essence the “price” of the dollar is determined just as the price of any stock is determined. Global investors look at the current financial status and look into the future to whether it is bright or dim. They then place their bets, which will push the price up or down.

So why is any of this important? Because, if we had not done enough for years and years to piss off the rest of the world, we have now done so. We have bullied our way around the world “lending” to borrowers at terms that we knew could not be met. We then foreclosed and took possession of raw resources. We have toppled “unfriendly” governments and rigged or “helped” in foreign elections to those who would do our bidding. Everything was “priced” in dollars so before any trade could occur…dollars had to be bought. This has recently been changing as foreigners are making deals amongst themselves to settle trade without using dollars.

5th Amendment

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Jun 17, 2013 - 4:29pm

CBO Hucksters

Are gamed by the parties. They are beyond useless. 

Remember in 2009 the ACA (Obama Care) came out and said that it would be revenue neutral. Then lo and behold after the passing of the bill, it came out that the CBO was given the remainder of the variables, and magically they now calculated a cost of something like $10T in over the next 10 years.

I posted this awhile back when the CBO came up. 

Here is there accuracy for all to behold.

Budget and Economic Outlook 1999-2009 $B
  1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Revenue 1,815 1,870 1,930 2,015 2,091 2,184 2,288 2,393 2,500 2,611 2,727
Outlays 1,707 1,739 1,779 1,806 1,881 1,951 2,032 2,086 2,166 2,255 2,346
Deficit/Surplus 108 131 151 209 210 233 256 307 334 356 381
Gross Federal Debt 5,579 5,669 5,743 5,772 5,810 5,831 5,839 5,805 5,753 5,682 5,587
Actual Budget Results 1999-2009 $B
  1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Revenue 1,827 2,025 1,991 1,853 1,782 1,880 2,154 2,407 2,568 2,524 2,105
Outlays 1,703 1,789 1,864 2,011 2,158 2,292 2,472 2,654 2,731 2,978 3,518
Deficit/Surplus 124 236 127 (158) (376) (412) (318) (247) (163) (454) (1,413)
Gross Federal Debt 5,606 5,629 5,772 6,198 6,760 7,355 7,905 8,452 8,951 9,986 11,874
Average Projection Error % vs Actual 1999-2012
  P+1 P+2 P+3 P+4 P+5 P+6 P+7 P+8 P+9 P+10 P+11
Revenues  1.3% 6.1% 10.3% 13.2% 14.8% 15.1% 15.4% 16.7% 19.6% 24.4% 28.4%
Outlays -0.2% -3.8% -7.0% -10.2% -12.8% -15.8% -18.8% -22.8% -26.7% -32.8% -38.2%
Gross Federal Debt -1.1% -4.2% -9.7% -16.7% -24.2% -30.9% -37.5% -48.4% -64.7% -90.0% -114.3%
Projections from CBO Annual Report 2013-2024 ($B)
  2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenue 2,708 3,003 3,373 3,591 3,765 3,937 4,101 4,279 4,496 4,734 4,961
Outlays 3,553 3,618 3,803 4,067 4,300 4,542 4,811 5,078 5,350 5,691 5,939
Deficit/Surplus (845) (615) (430) (476) (535) (605) (710) (799) (854) (957) (978)
Gross Federal Debt 17,047 17,864 18,479 19,143 19,915 20,769 21,711 22,729 23,784 24,911 26,052
Projections using the average CBO error from 1998-2012 ($B)
  2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenue 2,673 2,820 3,024 3,115 3,206 3,343 3,469 3,563 3,617 3,581 3,552
Outlays 3,560 3,756 4,069 4,480 4,851 5,260 5,718 6,235 6,777 7,555 8,210
Deficit/Surplus (887) (936) (1,045) (1,365) (1,645) (1,918) (2,248) (2,672) (3,161) (3,974) (4,658)
Gross Federal Debt 17,228 18,613 20,274 22,344 24,728 27,185 29,849 33,725 39,171 47,328 55,828

The 10 year projection I used was from the beginning of the year. I didn't bother using the "updated" figures, as they will be proven usual. A cigarette smoking monkey could come up with better projections.

Charles S. Hamlin
Jun 17, 2013 - 4:35pm

US Mint Silver Sales Update

...still moving...on track for >4M+ for June...

2013 Silver Sales Totals
(in ounces / number of coins)
Month One
( oz. / #coins )
January 7,498,000
February 3,368,500
March 3,356,500
April 4,087,000
May 3,458,500
June 2,259,500
Total 24,028,000
Jun 17, 2013 - 4:38pm


Maybe he might consider a podcast with Turdville in return for your kindness Turd, where we post the Q's to you for him to respond to as part of it? Gotta ask - because if you don't ask you don't get ;)

Jun 17, 2013 - 4:41pm

Detroit follow up

Math is hard. Especially for government drones. Detroit is only the beginning. The math doesn’t work for every local and state municipality in this country. The only difference is timing. Detroit happens to be the shittiest of the shitholes. Government can only function and pay its obligations with the revenue they collect from the citizens. They can borrow to fend off the grim reaper for awhile, but in the end money does not grow on trees. The union government workers from the fine city of Detroit are going to be lucky to get 20 cents on the dollar in pension payouts promised to them by lying cocksucker politicians. I hope the union workers in Los Angeles, Philly, and thousands of other urban union strongholds are paying attention. The grim reaper is headed their way. They can protest, strike and scream bloody murder. Tough shit. The money isn’t there – only promises and worthless IOUs.

I can't attest to the accuracy of the following but this was a reply to the post.

Orr is the Detroit Emergency Manager.

card802 says:

Detroit is a funny story.
To keep the liberal black democrats off his moderate white ass the gov hired a black democrat to be the emergency manager of a black democrat shit hole.

What could go wrong?

Then we find out that the emergency manager had tax liens filed on his black ass. A guy that didn’t pay his “fair share” until he was caught.

”A lien for $7,022 in unemployment taxes for the 2008 tax year was entered on July 17, 2009, and satisfied on Aug. 20, 2010. Another for $9,409 in income taxes for the 2008 tax year against Orr and his wife, Dr. Donna Neale, was entered on Aug. 11, 2010, and satisfied on Oct. 3, 2011.

Two other liens over unemployment taxes — $6,985 for the 2010 tax year and $9,201 for the 2010-11 tax years — are outstanding, said Frost, who reviewed the records.”

Look what else they have in Michigan: (what could go wrong?)

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We even have a fairy to give out “free money”

Jun 17, 2013 - 4:47pm

Percival Sweetwater.

Percival Sweetwater.

Jun 17, 2013 - 4:54pm

Fed Talk; Just That - Talk

Turd, you are absolutely correct. Talk is talk. Until they start to walk the talk.

The Fed through the ongoing QE program has created a 'Monster'. Caught in a deflationary feed back loop, visible in lower wages and salaries, lower levels of consumption and lower standard of living. Despite their efforts to create inflation, the only things inflating are paper assets as can be seen in the recent new daily record highs in the stock markets. This feed back loop has led the Fed into the same liquidity trap that Japan has found itself.

Any talk of "tapering" or "paring down" the level of QE is just that - talk. Not just the Fed, but all central banks are caught in the same said trap, with just one "out" left to them - the race to debase. Gold and silver positive.

Sneed Hearn StevenBHorse
Jun 17, 2013 - 4:59pm

Cigarette smoking monkey

Why assume accuracy is even a minor element in CBO projections? Seems to me these things have a variety of political purposes and that accuracy is not a factor at all.

Hunt brother
Jun 17, 2013 - 5:00pm

First Majestic is shopping...

First Majestic was outbid earlier this year for Orko Silver by CDE.

First Majestic has the financial dry powder to make a strategic acquisition.

A junior miner in central Mexico is being evaluated by First Majestic on the merits of current production and economic feasibility of the development of a large prospect property .

Jun 17, 2013 - 5:03pm

Wake Me When...

These pathetic markets are about as interesting as watching paint dry!

Will the Dow marginally eclipse its all time highs?

Will Gold & Silver retest their recent lows?

Will the HUI ever again rise to meet its 100 DMA or will it continue downwards to zero?

What scintillating pearls of wisdom will the financial media garner from the lips of their beloved Bernank later this week?


Until then, Zzzzzzzzzzzz... ~pickaxe

Jun 17, 2013 - 5:15pm

15th Amendment - Citizens' Voting Rights

Section 1.

The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.

Section 2. The Congress shall have power to enforce this article by appropriate legislation.

Note: The 15th Amendment is the rights of CITIZENS of the united states to vote.

Quick, someone tell the supreme court!

Writing for the court, Justice Antonin Scalia said the federal government has broad authority to displace state election rules. He pointed to the U.S. Constitution’s elections clause, which says Congress may override states in establishing the “times, places and manner of holding elections.”

“The states’ role in regulating congressional elections -- while weighty and worthy of respect -- has always existed subject to the express qualification that it terminates according to federal law,” Scalia wrote.

Ah, they've already got it...

Jun 17, 2013 - 5:22pm

16th Amendment (Income Taxes!)

And my fave:

Sixteenth Amendment

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

(from Wikipedia)

Article I, Section 2, Clause 3:

Representatives and direct taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers...[1]

Article I, Section 8, Clause 1:

The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.

Article I, Section 9, Clause 4:

No Capitation, or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken.

This clause basically refers to a tax on property, such as a tax based on the value of land,[2] as well as a capitation.

Jun 17, 2013 - 5:24pm

Todays trading

Not much happened today indeed, but good to note that Gold traded pretty much in sync with TY/Treasuries. This already since a good two to three weeks (post 22th of May) and this market is a good break away from the vis-à-vis against Equities (Equities up, Gold down in the previous months).

I find some relative strength dripping into gold. Equity sold off post 22th May, Treasuries have posted a new low post 22th of May, Gold did not post a fresh low...

Maybe tomorrow/tuesday market may find a weak spot, pre-FOMC related selling.

On the other hand, so much is priced into this market and if Bernanke decides for a non-event on Wednesday, Comex might find itself positioned very wrong on the short side. Even stronger, in the less likely event that they will be bring tapering on the foreground, i would expect the gold sell off be very shortlived (hit target of $1220/1260) and rally afterwards on a short the rumor/buy the news


The Watchman
Jun 17, 2013 - 5:24pm

GLD Continues to be DRAINED-0.46 TONNES GONE



Value US$44,649,562,092.21

Jun 17, 2013 - 5:27pm

The other side of the proverbial coin ..

FWIW .. Who is speaking the truth?

I guess it is either in the middle or on the cemetery ..

Jun 17, 2013 - 5:27pm

May 2013 budget deficit

The reason the May deficit was so high is stated on the first page of the latest Monthly Treasury Statement (MTS). I pointed this out last week when the MTS was released. Here's the quote from the MTS.

"Since June 1, 2013, the normal date for these expenditures fell on a non-business day, outlays for military active duty and retirement, Veterans’ benefits, Supplemental Security Income and Medicare payments to Health Maintenance Organizations moved to May 31, 2013."

So it will be interesting to see how the month of June pans out.
Jun 17, 2013 - 6:02pm

Jun 17, 2013 - 6:11pm


I must insist you cease posting these horribly offensive, anti-parrot images. Some of my best friends are parrots. 

I may have to refer to you as erroneously as Bullocks from now on, just to prove how outraged I am. Now THESE bastards would be good barbecued... just sayin'.


Jun 17, 2013 - 6:12pm

May deficit

The deficit was 138 billion. Anybody know why US debt declines 90 billion in May? Or more funny accounting.

Jun 17, 2013 - 6:13pm

The wake-up is accelerating.

Tyler Durden's picture

For First Time Majority Finds President Untrustworthy: Obama Approval Plunges Among Young Americans

Submitted by Tyler Durden on 06/17/2013 - 17:49

Whatever the deteriorating economy could not achieve (courtesy of Ben Bernanke's relentless bubble blowing and pumping of the S&P 500-driven "wealth effect" distraction) for the past four years, one NSA whistleblower succeeded in a few short days, when earlier today, CNN - hardly a media known for its criticism of the administration - released a new poll according to which not only did Obama's approval rating drop by 8% in the past month, "one of the sharpest, fastest plunges in his presidency" to 45% from 53% (the first time the majority had a negative opinion of the president), not only did the majority find Obama to not be honest and trustworthy for the first time ever in his presidency, but Obama's support with one of his core constituencies - young Americans under 30 - imploded, plunging by 17 points. CNN adds: "That's particularly discouraging heading into 2014 because Democrats have felt they have a lock on the youth vote after the 2012 elections. "The drop in Obama's support is fueled by a dramatic 17-point decline over the past month among people under 30, who, along with black Americans, had been the most loyal part of the Obama coalition," CNN Polling Director Keating Holland said."

Jun 17, 2013 - 6:23pm

Ahhhh come on Pining...

You're just dying to tuck in aren't you. Everyone knows that.

Parrots. Yum Yum.

Jun 17, 2013 - 6:25pm

LCS Report (Winnipeg, Manitoba)

No large bars anymore but Maples at 27.50 (CDN) unless you want the wildlife series in the fancy box from the RCM cause then they are 70 to 80. Not a lot on display anymore (a few hundred ounces) but may be some in the back. Not very busy in there today.

Lease rates stayed down from last week. Check out this yoyo chart for the month.


Jun 17, 2013 - 6:31pm

Are silver coin sales

Are silver coin sales substantially up in America besides the ASE'S? does anyone have any info they can provide on this question.

Jun 17, 2013 - 6:33pm

Anybody have any experience with these options?

Probably a good idea...

take it one step at a time...

Opt out of PRISM, the NSA’s global data surveillance program. Stop reporting your online activities to the American government with these free alternatives to proprietary software.

Jun 17, 2013 - 6:33pm
Sad-descent daveyboy
Jun 17, 2013 - 6:38pm


"Are silver coin sales substantially up in America besides the ASE'S?"

I'm not sure you are going to find good data other than ASE's. That data comes from the mint, so there really isn't one source for other coins. Anecdotally though my local shop seems to be doing well turning over his inventory.

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Key Economic Events Week of 1/14

1/15 8:30 am ET Producer Price Index
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1/16 8:30 am ET Retail Sales
1/16 8:30 am ET Import Price Index
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Key Economic Events Week of 1/7

1/7 10:00 ET ISM Services Index
1/7 10:00 ET Factory Orders
1/9 2:00 ET December FOMC minutes 
1/10 Speeches from CGP, Goons Bullard and Evans
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Key Economic Events Week of 12/31

1/2 9:45 am ET Markit Manu PMI
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