Fri, Jul 19, 2013 - 12:34pm

I keep trying to type up this post while at the same time watching The British Open. It's now 10:45 EDT. The British Open is winning.

I don't know why I enjoy watching links golf so much. I think it dates back to when I was a Teenage Turd, ESPN was in its infancy and they used to show old British Open highlights for programming. As an aspiring, young golfer, I found it fascinating. But now it just frustrates me. Why? Eight years ago this fall, my good friend BucketHead (and helluva golfer) died of a brain tumor that I will always blame on his incessant cellphone use. I pledged then that I would soon cross "Golf in Scotland" off of my bucket list. Eight years on and I still haven't pulled it off. Fortunately, I'm still healthy and fit so perhaps next year will be the year. However, the state of the global financial system is far from "healthy". Will The End of The Great Keynesian Experiment continue for another year or is massive change right around the corner? I wish I could say with certainty but I can't. All I can do is prepare...and twist Sweetness' arm for 2014. I need him to come with me so that I can fund my trip with a daily nassau.

I have hope that we are beginning to see a bit of a sea change in gold. Does anyone else sense a "buy the dip" mentality emerging? Since the snapback bounce off of the lows of July 5, gold has been beaten back from $1300 and toward $1270 on three occasions and each of those dips have been bought.

So now here we are, two hours away from closing out our second, consecutive UP week in gold. IF we can hold on...and it looks like we will as we're up about $12 on the week right now...it will set up an interesting week next. Why? As you can see below, since this brutal smashdown scheme began last autumn, gold has never had three, consecutive UP weeks. Would a third week next be a conclusive sign of a bottom? Of course not! It would, however, be another positive signal that we are getting very close. With August13 option expiry next Thursday, anything is possible. Given the overall bearish sentiment and Spec Short market control, there exists a pretty good opportunity for The Cartel to squeeze some of those who have sold the $1300+ calls. We'll see...

There's not much to discuss in silver at this moment. It's still being held below $20 and its chart doesn't look as interesting as gold's. The next bit of excitement will come when price finally encounters the top of the channel again. Can/will it break out or will it simply drop lower again? WTFK but we should get an answer in a week or two.

GOFO rates were stable today but still deeply negative for a record-shattering tenth day in a row. As mentioned above, Aug13 option expiry is next Thursday and FND is on the 31st. The negative GOFO rates and the sharply declining Comex stocks would seem to indicate that the next few weeks are going to be interesting, to say the least. Jesse offers an excellent summation here. I suggest you read it. https://jessescrossroadscafe.blogspot.com/2013/07/comex-registered-gold-fall-to-another.html

(Remember, "eligible" or "total" gold is simply the unallocated gold held in the vaults. To be deliverable, the gold must be classified as "registered". As of last evening, total Registered gold at the Comex fell to 29.56 metric tonnes. This is enough gold to physically deliver just 9,504 contracts in August.)

A few words on crude here, which is kickin-ass-and-takin-names, much to the bewilderment of many. For example, there's this complete idiot who somehow achieved contributor status at ZeroHedge. I'm not sure this guy could find his ass with both hands and the recent movement in crude has him all aflutter. https://www.zerohedge.com/contributed/2013-07-18/gasoline-supplies-highest-july-period-1992

Look, this isn't complicated. Since the overthrow of the Egyptian government two weeks ago, crude has risen over $10. Why? The Muslim Brotherhood is the parent organization of nearly every terrorist group in the MENA. Taking power in Egypt was the culmination of 80+ years of effort. They ain't gonna take their forced removal quietly. Already, a completely overlooked and unreported WAR is taking place in the Sinai Peninsula. If you failed World Geography back in school, you might want to take a look at this map:

Crude is rallying because of realistic fears of supply disruption. Remember, what does one do in a futures market if one is concerned about future supply issues? You hedge and lock in price and delivery today by buying a futures contract. More buyers than sellers mean higher prices. Period. And here we are.

The Big Question is: What happens next? We're already seeing some downside volatility today:

Did President Milhous send out some cronies to plant the predictable rumors of Strategic Petroleum Reserve releases in a pathetic attempt to talk down price? If not today, they'll try that oft-repeated trick soon, of that you can be certain. Regardless, I've told you for months that there need be no concern over Hot War in the MENA until and unless crude makes a sustained move through $100. Well, here we are. What happens next is anyone's guess but, if crude bursts through the early 2011 highs of $114, watch out! And get your ass out of The Middle East!!

Finally, today, we've got to talk about this: https://www.zerohedge.com/news/2013-07-18/jobs-number-bs-says-former-head-bls.

And here's the source link to read, too: https://www.nypost.com/p/news/business/bls_number_is_bs_jaKS2Nc8Yu2TrnETK2bXEM

We talk about LIES and MOPE and SPIN all the time here. Maybe you, my dear reader, think that I'm the one who is full of it. That I'm the one who lies and spins. Well, I submit to you the information above.

Understand this: Keith Hall was, from 2008 to 2012, the head of the Bureau of Labor Statistics, the BLS. The Head Honcho. The Big Cheese. If anybody is going to know the inner working of the BLS, it's this guy. And what does he say in the article above? That's it's all bullshit. (Thus the justification for our term "BLSBS".) Hall explains as much right here:

“Right now [it’s] misleadingly low,” says Hall, who believes a truer reading of those now wanting a job but without one to be more than 10 percent.
The fly in the ointment is the BLS employment-to-population ratio, which is currently at 58.7 percent. “It’s lower than it was when the recession ended. I think that’s a remarkable statistic,” says Hall, a senior research fellow at the Mercatus Center at George Mason University in Fairfax, Va.
That level tells Hall the real unemployment rate is actually about 3 percentage points higher than the BLS number. If the jobless rate is unacceptable at 7.6 percent, it’d be shockingly bad if he is right and the true rate is 10.6 percent."

If the "unemployment rate" was actually reported at 10.6% instead of 7.6%, what would be the status of:

  • The treasury market and interest rates
  • The stock market
  • QE "taper"
  • Milhous' approval rating
  • Congress' approval rating

You see, it's all lies! The actual data doesn't matter, just make up a number and have CNBS report it. It's all good and the music plays a little bit longer. But the Day of Reckoning is coming. Like any other human endeavor, you can lie and cheat your way through life for a while...but eventually it catches up with you and it all comes crashing down. Will The End come next week or next month? Hell, I don't know. If I've learned anything these past four years it's that I should never underestimate the power of TPTB to extend and pretend their way to a maintenance of their power. With the politicians, bureaucrats and media in your corner, you're bound to have temporary success in avoiding reality. But this will end and, when it does, you're going to be grateful for every ounce of physical gold and silver you have in your possession. These last nine months of contrived Bullion Bank scheming will be a long-forgotten memory.

Have a great weekend.


About the Author

turd [at] tfmetalsreport [dot] com ()


Jul 19, 2013 - 2:09pm

HUI Weekly MACD positive cross

And to top things off for the week the WEEKLY HUI MACD just made a positive cross. GO HUI GO :)

Jul 19, 2013 - 2:12pm

Getting F'ing tired

of this $1295 and $19.50 bullshit. Icarus has hit many nails on the head, and with the latest from the Motor city it pisses me off to no end that TPTB are having no problem holding their line in the sand. What a bunch of crap. Add to that the official non ascending federal debt graph, and the continuing Middle east shit show...it is enough to drive me over an edge. Screw it. I'm going camping.

Jul 19, 2013 - 2:22pm
Jul 19, 2013 - 2:24pm


I hear ya Teach. Silver's been hovering at $19.50 all day. Weird and suspiciously obvious.

Jul 19, 2013 - 2:26pm
Just A Regular Guy
Jul 19, 2013 - 2:30pm

Oil and some other stuff

Hey boys and girls, i'll post an update on the Australia GXD (Gold miners index) in a few days for you all. For the moment I feel like a genius selling my crude warrants today and reinvesting all prophets into a gold miner on the ASX (probably one of the best ones in my humble opinion).

On to oil, and yes ladies and gentlemen, the petro-dollar. Here is a BIG NAIL in the coffin on the petro-dollar (one that is not really seen nor appreciated).

See here https://hotcopper.com.au/post_single.asp?fid=1&tid=2045785&msgid=12027462

(check out a lot of "moosey's" posts, he seems to be in the know) (https://www.hotcopper.com.au/slx)

So the solar panels you see are now operational in Mildura Australia. I'll give you a guess (as this relates to oil) who is next on the list to "Go Live" with these babies.... Anyone? Bueller? Yes you guessed right, Saudi Arabia. Ok so wtf does this have to do with oil? Well the Saudi's use their drilled oil to provide electricity in their own country. If you reduce the need to burn said oil, and you have excess supply, where's that extra oil going to go? The market perhaps? What will that do to oil prices and hence the dollar??? As bad as that sounds, however, you American's are in line for one of the first uranium re-enrichment plants in, wait for it.... Yes Rand Paul's state of Kentucky! I'm super-dooper bullish on this company (although I have no position yet, but will be buying some shares shortly - they do a number of new technologies [solar/uranium/superconductors]).
On a similar note check out Dyesol (listed on the ASX and on the German stock exchange). Guess who's interested in their commercial use solar cells??? Hmmmm, place with lots of sun, has oil... Yes, Saudi Arabia again! So, again, less energy (oil) burnt via subsidies for their local electricity generation, more oil for the market... down goes the oil price (or up goes demand to meet the lower price etc...)

For the single malt buffs, i'll post a piccie in a few days of my newly acquired epic whisky collection :)

Take care all,


Jul 19, 2013 - 2:31pm


The irony of this is just too much so I thought I would share.....why not?

If y'all have read the Peter Schiff article today posted at SD, then you'll understand the irony.

I have this very serendipitous and timely conversation (not going to mention who or where, and thats fine if you want to ruin the street cred of it)...but this particular conversation came out of the blue and it was as shocking to me as it was unexpected.

The gist was that this gent explained that the equity market being elevated is a pure trap. (ok, nothing new here)

But, the trap is not a traditional trap. It isn't, hey, the suckers who are all buying in now, will soon be headed over the waterfall...no...its that they will be buying in now, the market will remain rangebound, keeping those in the trap, while contemporaneously the $$ falls into oblivion. Most of the "trapees" will think they are just fine, all the while not knowing that their dollar based equity investments are being smoked as the dollar crumbles and G/S soar. This will not be recognized by the majority of market participants and they will lose out big.

So...the irony is Peter Schiff comes out with his article today, mere days after I have this very enlightening conversation. Bernanke will look like a hero because he did what was needed to be done and this next crisis, "no one will have seen coming".....well, almost no one. ;-)


Jul 19, 2013 - 2:32pm
Jul 19, 2013 - 2:34pm

Benny and His Inkjets

Santa said it, "selected the exact right date to retire."

Once you embark on the currency printing path, you are doomed, as is the currency that is being printed. The central bankers have tried to take the easy road out. There is no easy way to deal with a big debt overhang.

Inflating it away via the printing press was doomed from the start. Defaulting seems to be out of the question, and using austerity to work your way out is self defeating. Ask Greece, Ireland, Portugal, or Spain how that's working!

Central bankers dream of getting back to normal - normal interest rates and a normal balance sheet. Instaed they are stuck on the printing feed back loop of QE with no way to stop. They are damned if they do and damned if they don't!

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.

Jul 19, 2013 - 2:42pm

Don't fight the FED...

But I wanna fight the Fed...they piss me off with their manipulation of our entire world. I am sitting here looking at a chart of the Russell 2000 at 1045 and feeling disgusted. I used to trade RUT options (2007-2009) before I gave up and found true religion and I was totally immersed in the chart patterns. After the crisis, I just could not bring myself to put any more fiat into stock. So I went with PMs and put my retirement in a bond fund. The economy has been on life support ever since. I'd be a fool to keep my fiat and retirement in stocks. But my foolish friends all did and today I look like the fool, hanging onto faith in PMs and having to explain that my hot PM investments have now turned into an insurance policy. Meanwhile they are proud of their investment brilliance as their retirement accounts have doubled since 08. I still can't bear the thought of buying anything but mining stocks with my new mandatory retirement fund.

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
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Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
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10/9 2:00 ET September FOMC minutes
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Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
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10/4 8:30 ET BLSBS
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Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
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Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
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9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
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9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
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Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
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8/14 10:00 ET Business Inventories
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