Another Monday

Mon, Jul 15, 2013 - 11:17am

A new week begins and it's going to be another wild one.

The dominant event of the week will, no doubt, be the congressional testimony of The Bernank on Wednesday and Thursday. Even though the two biggest and ugliest TBTF/PD banks are now on record slashing their "growth" estimates for the just-completed 2nd quarter (, I'd expect The Bernank to take an opposite tack to last week. He'll likely talk down QE and talk up taper, following along with his Goons who alternate daily from "more QE" to "less QE". Again, in the end, this is all of zero long-term significance...QE cannot and will not ever end...but for the price of paper metal, it's going to be a volatile week.

Both metals have room to run without disrupting the current downtrend. Silver could stretch toward $21 and gold could mover $50 but, from a technical perspective, no damage would be done to the bears' case. The key levels to watch are the downtrend lines from the April smashes and the old lows that immediately followed. I've drawn both on the charts below. IF we can get price to move through these areas, the charts will begin to look more favorable to us bulls and the spec shorts will begin to feel some squeezing as the potential for a longer-term, reverse head-and-shoulder pattern would begin to appear on the daily chart. That's still a long ways away however so don't go getting all excited just yet. For now, just wait and watch to see what happens when price encounters the red lines.

Crude remains volatile, too, and we should expect some of that to spill over to the metals. After peaking at $107.50 last week, we are currently near $106. (Higher gas prices hinder economic "growth", too.) The main thing I'm following is the fallout from the latest Israeli raid into Syria back on July 5. Whether the attack came by air ( or by sea ( matters little. What does matter is that this particular attack came after an explicit warning from Syria and its allies that attacks will no longer be tolerated. All talk, no action from Syria, Russia, Iran, Hezbollah et al OR will things really begin to heat up in the days ahead? We'll see. Again, crude is your tell. Over the last three weeks, crude has only seen three down days. Watch it closely.

After I wrote about "JPM hoarding silver" last week, it seems that many folks have begun paying attention to the July deliveries. Uncle Ted's noticed it first and he passed along this latest update over the weekend. So far for July, 2416 deliveries have been made at 5,000 ounces each. Of the 2416, 2192 have gone to JPM and, of the 2192, 2004 have gone specifically into the JPM house account. This means that JPM has taken down just over 10MM ounces of real metal and has personally swallowed 82.95% of all the Comex deliveries this month. Again, what is their motive? Building inventory to deliver against their remaining short position (which Ted still estimates at 12,000 naked)? Using this metal to cover some SLV shorts (recall that SLV gained 3MM ounces in "inventory" last Thursday)? WTFK. All I know is that JPM taking physical delivery of silver at these prices is a good sign for the long-term price.

OK, for your reading list today, we have these three items. First, this great article and interview of Bill Black, the Kansas City professor who has been and remains all over the fraudulent and criminal banks.

Next, we have this great article from Jeff Nielson about bullion leasing. If you're, two and three month GOFO rates remain negative for a record sixth, straight day. In fact, they actually worsened considerably today versus Friday. You can see them here:

And finally, our pal Alasdair is out with another terrific piece discussing gold vs the supply of paper money, which is a very interesting metric, indeed.

Finally, today, I'd like to commend everyone for the overall quality of the discussions here over the weekend. You may think it was a bit rough but, when compared to the rest of the internet cesspool, it was actually quite civilized. Of course, anytime there are divisive issues in play, we always see some folks storm off in a huff, mumbling about cults and cliques. This happens. But, in general, the conversation regarding the Zimm Trial was measured and thoughtful. I am proud of everyone. Now...that's back to business here on the main thread. If you want to further discuss race and race relations, please do so in the forums. You can do so by starting your own thread here:

That's it for today. Keep the faith and keep adding to your stack.


About the Author

turd [at] tfmetalsreport [dot] com ()


Jul 15, 2013 - 11:22am

2nd will dooo

ya just waiting for that push over 1300 and then 1350

US dollar is looking weak and with some more bad data and Berni screw up we could be good to go

gold knows we all need it

Jul 15, 2013 - 11:22am


Yes, third! But 2nd to accurately call my position. :-)

Jul 15, 2013 - 11:22am

Thanks Turd.

Thanks Turd.

Jul 15, 2013 - 11:25am

Gold Deliveries From Shanghai Bourse Jump on Physical Demand

By Bloomberg News - 2013-07-15T10:43:42Z

Physical gold delivered to buyers by China’s largest bullion bourse in the first half of this year almost matched the entire amount taken from its vaults in 2012, and was more than double the country’s annual production.

The Shanghai Gold Exchange supplied 1,098 metric tons in the six months through June, compared with 1,139 tons for the whole of last year, according to data from the bourse today. Output in China, the world’s largest gold producer, reached a record 403 tons last year, according to the China Gold Association.

The surge in deliveries underscores buying interest in China, which may pass India as the largest bullion consumer as early as this year after the government in New Delhi raised import taxes while regulators in Beijing made investing in the metal easier. Miners, smelters and refineries are required to sell gold via the Shanghai bourse, the only state-sanctioned marketplace for spot bullion in China.

Jul 15, 2013 - 11:27am


First? Great. Will dedicate this first to Turd and all his dedication and hard work. It's been an incredibly frustrating 3 years. Hopefully the sun will shine one day soon.

Jul 15, 2013 - 11:28am

Level of MOPE manipulation suggests desperation is seeping in


As even the stunned FT explains, a week ago Xinhua reported that China's minister Lou Jiwei said at a news conference that China was aiming for 7% growth this year...............The original article was changed to show that he had said 7.5 per cent, exactly consistent with the target announced at the national parliament back in March

Lucky 7th

Jul 15, 2013 - 11:29am


alright silver, enough of this f*cking around! get off your ass and run, dammit!

Jul 15, 2013 - 11:29am

China's Surging Demand “Supporting Gold”

By Adrian Ash 07/15/2013

"There's support from Asian interest in gold," says Standard Bank's weekly market positioning note, citing reports of "strong physical buying in China.

"Reportedly, some retailers ran out of gold bars and gold jewellery. Confirming this are the physical flows we have seen in Asia."

"Investors here remained big buyers this year," says strategist Fu Peng at the state-owned Galaxy Futures Co. brokerage in Beijing, commenting to Bloomberg on strong deliveries of physical gold from the Shanghai Gold Exchange.

New data Monday showed the SGE supplying 1,098 tonnes of gold in the first half of 2013, more than 94% of last year's entire total.

Jul 15, 2013 - 11:29am
القراع عصفور
Jul 15, 2013 - 11:30am


KR and Bugsy didn't deserve what they got. they have contributed so much to the site. their views were not extreme, just not consensus here. another senseless waste of brain power and perspective if they are gone.

القراع عصفور
Jul 15, 2013 - 11:34am

Let's hope they're not... they would be missed.

But you simply can't storm off in a huff if you feel berated. Take a breath and walk away. It will soon pass and the topic will change back to metals, as it has today.

القراع عصفور
Jul 15, 2013 - 11:40am

fair enough TF

i hope too that they return. i disagree with the mob behavior here, and you know that. but after all, it is your site. i won't hijack any more thread. thanks for the response.

SE treefrog
Jul 15, 2013 - 11:48am

@ Treefrog

I'm going to say it again... THIS IS SUMMER!!! Please look at a 34-year silver chart to understand its seasonal behavior. What silver is doing now in a seasonal context as well as a "big picture" context is doing EXACTLY what I expect it to do now. It might start its run in late August/early September. The Indian holiday season hasn't started yet. Wait for it... I don't expect silver to clear $50 until May of next year.

Did you screw up, buy high, and now you're having to sell at these prices? Fortunately, I didn't. In fact, I started over eight years ago, when it was still around $6.50-7. In the meantime, I stack very, VERY small amounts so that I can continue to pay bills while buying some silver so I don't feel like I have stood back entirely. I don't like not being able to participate in the dips.

Jul 15, 2013 - 11:48am

Silver flash crash(es)

Any thoughts on the virtually identical down spikes in silver Friday and today? Someone trying to start a waterfall?

Jul 15, 2013 - 11:50am

Re Jeff Nielson article

I thought I would share this with the group – a series of emails to Jeff Nielson on the subject of leasing…Sorry in advance, but I edited out Jeff’s responses and it will show in an awkward flow…

Good article, Jeff. I agree with every word.

But what about the leasing of private gold accounts? I remember a letter sent out *********** brokerage firm, Toronto, in the late 1990s that informed its clients that their gold holdings would be subject to leasing and if this was not acceptable to the reader of the letter that they should remove their gold (and silver) metal from their account....I suppose a lot (some?) of this leased metal may have been returned - many like Ed Steer do not consider that very much leasing is going on at all for some years - but I think a lot of this metal over the years has not been returned, and should be considered hypothecated by the bullion banks. I never really agreed with Ed on this, and I think in a few years a lot of these private citizens are going to realize they have been robbed and that unlike central banks who have lost their metal (cost of doing "god's work), these private citizens really ARE going to care! I think we will find that ABN AMBRO default was a perfect example of this and a lot of this defaulted gold was simply stolen via leasing....


Yes, the whole thing is so murky as to render most of our point of view speculative in nature...

We had a difficult time with a large brokerage in Toronto (who shall remain un-named)...Even back in 2003 we bought on the "spot market" (whatever that is in Toronto) and told them we would (as usual) be taking delivery...They made the buy (on the spot market, remember) and we told them we would be down to pick it up...Well, what happened is that the broker told us it was a pool account (cosy deal with ScotiaMocatta) and we couldn't have it..We insisted, as was our right. Well, the broker's son wrote us a lot of threatening letters with LOTS of swearing until the old man told him to let us have the metal....ScotiaMocatta was furious at both parties as there must have been an "understanding" that the bank would not face delivery obligations...We cost them (based on paper metal that could no longer be backed by their smaller vault supplies) some three million dollars estimated (leverage, yes?)....So it was a surly bunch of bank officials that looked on as we staggered out the door with that metal....In a fractional reserve certificate business, leveraged as it was, our metal purchase and removal cost them a packet in certificate sales that they (in theory) were denied in making….

So we would have had a paper position only - covered by a silver certificate - had we not demanded delivery. But this was clearly a unallocated account and we got away with the metal anyway...I would doubt if one could repeat this event now with that favourable outcome... But I always assumed that any metal held in ANY account in the banking system is in constant movement - "borrowing" has many meanings and forms including using the metal loans as metal credit deals. What kind of lunk head investor would be satisfied with a perpetual paper position of a so-called spot market metal buy? And the answer to this was (we later found out) 90%...Yep, the metal, 90% of it, never left the bankster system.....Can there be any doubt why the paper metal scam has gone on so long!?

The only thing I am sure of is that private bullion accounts are available for leasing by the brokerage system as described in that earlier email. I think that given the stories that allocated bullion is missing from the system shows that this is borrowing whereby the client is unaware of the process...The negative lease rates seen recently is incentive for clients or banks with bullion accounts to take advantage of more lucrative metal lending at these levels. The bullion banks are willing to take a loss in order to entice metal out of the system....This is the only explanation for the negative rates since central banks have probably written the bullion off long ago...So when the private sources become more important and the shortages show up, we have the falling lease rate response of the banking sector to show the symptoms of shortage and rising demand....All speculation, of course on my part - but logical, I think...Private holders of bullion, however, never talk about their leasing of their metal in the accounts and (as in the earlier email) I assumed the brokerage did it without permission...But I have yet to hear about a complaint...On any of it - how about all the defaulting on metal certificates that can be cashed out instead of delivered into? The whole PM certificate short fraud is huge, even in Canada, and yet they still sell certificates thru the local banking system.....STILL - even with the hypothecation news mounting for the past few years! And we hear of no complaints! What the hell is THAT!!!????

Buying on the spot market for brokers specializing, even back in the early years of the bull in silver (and gold) was as described...Allocated or unallocated was never mentioned. And we never will see any figures about these short positions...It would reveal another layer of fraud, of course.

And the less anyone can find out about this stuff, the easier for a lot of things to disappear....

Yep, we live in interesting times.

Not a large investor, Jeff. But we have been doing this for some fifteen years and have accumulated some stories along the way....We used to regularly go down to ScotiaMocatta and buy one or two 100ozer silver bars...On one occasion about 2001 or 2002, when certificates were offered instead of metal (they do this every time - and at ones own local bank too), we were astounded to hear the teller at the wicket try to talk us out of taking the metal. She asked us "if we knew how much LESS the bank would give us for the bar when we brought it back to the bank to sell?" We did not say a word in comment but thought: "Why would we EVER bring any metal back to ScotiaMocatta?"

And to this day I cannot figure out what spot price they use for selling OTC metal on King. It is always higher - and once when we queried what the sport price was we were told it was an "after market bid". But please note that if you broker a deal thru your own local bank, the prices used by SM conform to the spot price at the time...Go figure! If one uses SM, it is useful to be aware that the shenanigans do not stop in the paper markets!

LOL., indeed.

I hope this was informative. It represents three emails sent yesterday to Jeff Nielson…If I had his permission, I would insert his responses…Sorry, perhaps next time.



Jul 15, 2013 - 11:50am


If it helps, one of the reasons I don't let any of the flak get to me is I see how they treat each other at the slightest difference of opinion :(

Jul 15, 2013 - 11:56am

In it to Win it!!!

Happy Monday! Keep stacking! I can't wait til Friday payday

Jul 15, 2013 - 12:02pm

top 10

Welcome back, Turd! Hope you had a GREAT vacation!

Jul 15, 2013 - 12:10pm

Buy PMs and rent the other stuff...

Save your fiat to buy the ONLY thing that will last!

Jul 15, 2013 - 12:11pm

U.S. banks eye metal storage exit

Anybody remember this when we first got wind of this?

Jul 15, 2013 - 12:30pm

Turd re: Jeff Nielson article

That article is great. As a salesman, I have always found the best way to "close" someone was to overwhelm them with truth and common sense. That article was replete with overwhelming common sense, proving again what we already knew. Unfortunately, I am sure the braindead CFTC will not be able ..... to ....... grasp ..... this ... simple concept. By the time stuff like this gets to them, it sure is some sort of confusin', it takes years to figure out common sense!

Jul 15, 2013 - 12:33pm

@ ag1969

What if the reason that the CFTC doesn't seem able ..... to ....... grasp ..... this ... simple concept is because they are stalling ON PURPOSE? They probably told Bart to put on a front just to make the CFTC look better (though I don't see how that would work, but apparently it tricked a few people).

Jul 15, 2013 - 12:37pm

Turd is the shit!

patience folks, a rally is coming. If you have survive through all this then you will survive everything in life.

Jul 15, 2013 - 12:42pm

Talking of Alasdair...

he just published this interview with Ned!

I'm half-way through and it's quite informative!

Ned Naylor-Leyland: we know that the monetary system is broken
Jul 15, 2013 - 12:43pm

Hi Turd, Always appreciate

Hi Turd,

Always appreciate your insight! Question for you regarding "I'd expect The Bernank to take an opposite tack to last week". The same thought you have mentioned last week. Why? I would think BB got disturbed by the rise in interest rates after the last post-FOMC press conference and therefore changed his tone in his speech last Wednesday. Why would he take an opposite track again risking to further deteriorate the interest rate market and completely ruin his credibility? Just curious. Thank you!

Jul 15, 2013 - 12:49pm

I thought I saw this meg forming with recent top....

and Bernanke looks like a nice setup. Interesting comparison with CRB As well. *the gap I mentioned earlier may have filled this am.

Jul 15, 2013 - 12:51pm

Sensible Thought

If "common sense" were so "common", most everyone would 'see' through what the main stream media force feeds the masses every day, day in, day out!

Whether it be the recently concluded trial, or the continuing smack down of precious metals, or the vilification of whistleblower's, rather than investigating what their whistle blowing has uncovered. The main stream media gives the masses the illusion of choice.

The media has never been more consolidated. Six media giants now control a staggering 90% of what we read, watch, or listen to. These six mega corporations are;

1/ General Electric


3/ Disney

4/ Viacom

5/ Time Warner

6/ CBS

Thats 232 media executives who control 90% of the information diet of 300+ million North Americans, on a 24/7 basis. Using some "common sense" tells us, that theres a motive for them to do so. Money. Cash. Power. Provided by the corporate, politico, financial, elites who have a vested interest in keeping the masses misinformed and therefore maintaining control over them. Don't be fooled.

Jul 15, 2013 - 12:52pm

Whats this crap?

Gold supply surplus could send prices plummeting–Natixis

The negative momentum being generated by investor gold sales is a natural market stabilizing mechanism, which could send gold to below $1,000 oz., says Natixis Economic Research.

by Dorothy Kosich,

From net gold demand of around 1,300 tonnes in 2012, investment demand has turned into a source of net supply this year and could reach as much as 400 tonnes or more as ETP sales far outweigh new investment in gold bars, Natixis Economic Research suggests.

“Even if ETP investors stop selling, it will be difficult to see net demand turning positive for the year as a whole,” said precious metals analysts.

At current prices, jewelry demand is rising strongly and scrap supply is diminishing, but even alongside solid demand from central banks the overall effect is insufficient to redress the enormous decrease in net investment demand,” the analysts observed. “The market therefore requires a fall in mined gold output, which implies that prices should drop to the point at which mining companies close their more marginally profitable operations.”

Read More @

argent rampant
Jul 15, 2013 - 12:54pm



argent rampant
Jul 15, 2013 - 1:04pm


Uh-oh. Do you think the Chinese and Russian governments know about this?


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