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 20, 2013 - 7:46am

Just locked In

For five UK Sov's of mixed years at £217 each. Total weight of Au I reckon to be 1.176 Troys.

That if my sums are correct is £923 per Troy - Current Spot is £849 - 8.72% premium.

Haven't bought in what seems ages now but the evidence is overwhelming - if you aint got no gold you probably gonna end up with jack shit.

p.s. The price includes delivery and in the past I have had Queen Victoria heads, the oldest being 1880 and George heads too, woohoo. I bet this next lot will be snotty old Elizabeth heads - though this could be telling and will report back later Sir Turd.

Not buying silver as I just can not bear to cough up the VAT at 20%, it kills me.


Jul 20, 2013 - 7:46am

The British Open

Turd, next year it's at the Royal Liverpool, but in 2015 it's at St Andrews.

So, how about a trip to the home of golf and a party with UK and European Turdites?

Jul 20, 2013 - 7:53am
Jul 20, 2013 - 8:01am
Jul 20, 2013 - 8:05am

@ Northern Border

" Force Manure !!!

Get your rain coats on ! "

I hope you're not suggesting that bullion banksters are a shower of ****

Jul 20, 2013 - 8:20am


Anyone got thoughts on it?

Jul 20, 2013 - 8:33am

St. Andrews

Local ESPN commentary Thursday was about how windy and treeless Scotland is, and how it can't be real golf because of the wind. Not one mention of the history of golf and how golf courses cut from forests makes American golf nearly one-dimensional (distance and accuracy).

Top players are blowing off the Byron Nelson because they don't like the wind, lack of trees, and OK, the heat. That's what made Byron Nelson so good; being able to play the wind.

Jul 20, 2013 - 8:37am

On Andrew Mcguire

This gentleman has called a bottom for several times. He called a bottom at $1500+. But what we got was a crash. He also called a bottom at 1320. But 1320 was breached. Now he is calling a bottom again. Couldn't he be bearish for pity's sake? Then we can have the next leg up...

gold slut
Jul 20, 2013 - 8:40am


@TeaDrinker, I have sent a PM.

Jul 20, 2013 - 8:48am
Jakarta Expat Orange
Jul 20, 2013 - 8:58am

Interesting - Is This The Final Straw

Orange, I read the piece at the link below detailing why China and Russia are accumulating gold so fast the last 2 years. I wonder if once China backs their currency with gold will they and Russia follow through with PetroGold


gold slut Boggs
Jul 20, 2013 - 9:03am

@ Apathetic

Interesting article but no doubt if it is not good for the 'Big Guys' and good for us little guys, then nothing will come of it. No doubt a ploy to look as if they are doing something about all the dodgy goings on at the moment, nothing more.

Golden rule... he who has the gold makes the rules.

Jul 20, 2013 - 9:31am


So what happens next? I assume in August JPM won't have enough gold in it's vaults to meet deliveries? What happens to price then?

John Galt gold slut
Jul 20, 2013 - 9:31am

@ Apathetic @ Gold Slut

I wouldn't hold my breath either, especially if Gary Gensler is on the committee heading up the review.

John Galt Willy
Jul 20, 2013 - 9:32am

@ Willy

Tungsten prices will then soar.

Jul 20, 2013 - 9:40am

On Board

Murphy sees what we see.

Bill Murphy ‏@LeMetropole 12h

Set up for gold/silver to go bonkers is a ten.That said,The Gold Cartel lurks.The MONSTERS may be forced to retreat. https://www.LeMetopoleCafe.com

For you space time travelers, this will rock your boats.

Space-Time Event Horizon Detection

Bill OReilly Blames Congress

Mienen Furher, how possibly can TA be extremely useful, if JPM can paint any channel it wants?

Jul 20, 2013 - 9:48am

@john Galt

Will this cause gold to soar? Will it put any financial pressure on JPM or can they actually just settle futures in cash? I assumed gold futures had to be settled in gold if held till expiry and the one party demands delivery?

Jul 20, 2013 - 9:49am

I guess my thinking was this

I guess my thinking was this Friday night news dump is the precursor for the fed bailing out JPM. They make the banks unwind their gold positions and they settle in cash.

Jul 20, 2013 - 9:59am

@ Jakarta

I would say yes. Perhaps others who are more familiar with Middle East religions and politics can provide more insight.

Questions would be why does obummer back the muslim brotherhood in Egypt and Syria? These guys are very evil towards their ememies as well as the West and more interested in having a caliphate.


As far as I understand Saudi Arabia are controlled by a separate religious group. So, in effect, obummer is supporting the opposition. Why would he do that? What does SA do about it. I recently read they sent $8 b to Egypt to support the military.

It would seem to me, under obummer, SA would have an interest to get out of the petrodollar.

Here is a link from yesterday talking about a gold backed yaun, as reported from Russia.


Jul 20, 2013 - 10:03am


ON THE FREAKIN FLOOR!!! As will the price of tomatoes, Im sure. LOL

at wully bully billy. GOLD AND SILVER EXPLODE, history says last week of august.

Video unavailable

At roger doger rocketship, the bullion solution is a political one.


Jakarta Expat Boggs
Jul 20, 2013 - 10:21am


No doubt, as usual the FED will put in some quickly drawn up rules that let JPM get out of all of the worthless paper they are holding and they get to pay out it out in fiat.

Hopefully someone will challenge this, demand that they produce the physical at whatever price they have to pay and stop this paper scam once and for all.

John Galt
Jul 20, 2013 - 10:21am

@ Mad @ Willy

@ Mad - history may very well dictate the last week of August, but as you know history can be rewritten too. I do like Wooly Bully, though, so thanks for posting it.

@ Willy - in theory if JPM runs out of physical for delivery they can either settle in paper, or possibly declare a force majeure. In the case of gold I think the former would happen before the latter.

While many of us here anticipate a pending upward explosion in price very soon due to the perception that physical stocks are being rapidly depleted, I am not convinced that this move is imminent. Inevitable, yes; but not necessarily imminent.

The reason I say this is because I am convinced that in addition to living in a world of fraudulent fiat paper currency, we are also living in a world of fraudulent paper reporting on things such as COMEX inventories and COT reports.

Although I do pay attention to what those reports say, and greatly admire those who can read those reports and take the time to interpret them for the rest of us, I truly believe that this thing we call "markets" is a BS shitstorm of epic proportions. If we agree that our fiat paper system is fraudulent why are we accepting as verbatim fact the BS being reported by the same banksters via COT reports?

So, maybe the reports are accurate and maybe JPM really is on the verge of running out of physical for delivery. If and when that happens maybe we see PM prices explode higher, but then again maybe we don't.

My personal feeling is that a controlled upward price move will be allowed, if for no other reason than to shake some more physical supply into the market. IMHO this won't be THE big move finally happening, but merely the next step in that inevitable direction.

THE big move will eventually come, but that won't happen until after the reset or, as Santa says, until after the next great leveling has taken place.

Jul 20, 2013 - 10:35am

Thank you, judejin

Please keep us all posted with your on the ground reports. Much appreciated!

Jul 20, 2013 - 11:00am


Yes, your input is very much appreciated.

About the fact that the Chinese don't hold much physical silver:

I am in Beijing quite often and never miss out on checking out the large gold / precious metals shops. The intricate jewelry that Chinese workmanship can make out of 24K gold is just breathtaking. As you surely know, these shops also sell silver; either novelty items like silver chop sticks and baby bracelets, or silver bars and coins. The problem is that this silver in retail stores is priced at MORE than twice of spot price.

Hence there's almost no way that the large public can get access to physical silver easily. You need to be one of the "big players" and get delivery on your metal exchange contracts in order to acquire silver anywhere close to spot.

Jul 20, 2013 - 11:02am

Tiger in Lead

Tiger doesn't come from behind, but it is Saturday in the lead.

Jul 20, 2013 - 11:06am

Andy would be the first to

Andy would be the first to admit this, too. Very frustrating.

However, as close as he is to the true physical market, the fact that price has fallen this far is proof of the extraordinary level of paper shenanigans.

Everyone should be sure to read the brief yet excellent KWN interview.

Jul 20, 2013 - 11:07am

PBOC can't have 7000 tons of gold, more like 2000-3000 tons

china has 1.4 billion people. on average, chinese has about 5 grams of gold, but that's still far behind the world average, about half an ounce. 5 grams of gold per person, that's 7000 tons for the whole country.

in recent years, chinese import around 1000 tons and produce another 300-400 tons of gold internally, i believe that's mostly bought up by the consumers. so in recent years, every year, per capita, chinese gold holding increases by 1 gram.

we should also keep in mind that there are about 50 - 70 million chinese living outside of china. most of them love gold too.

russia has doubled its gold reserve since last time china announced its gold reserve. i guess china has doubled its gold reserve too. so i come up with 2000 tons, 3000 tons at most. even if PBOC did purchase much more but as long as the gold still reside in NYC or london, we should consider that as all paper not physical and doesn't really count.

but china's M0, M1, M2 are all bigger than US'.

chinese government is probably the most corrupt in the world. so do not put your faith in the hype of RMB backed by gold or china can ever become the role model for the world. china and russia buy gold, probably because one's enemy's enemy is one's friend. all the ruling elites hate gold because they want the sheeple to use fiat money forever.

china's M2 doubles every four years. this year it will increase by about 10 trillion RMB, which is roughly the total M2 in 2000. 1% of this incremental M2 can buy up the entire silver production of the world at current price.

Howard Roark
Jul 20, 2013 - 11:13am


@judejin - excellent info.

My wife visited a jewelry store yesterday (hopping to buy a gift for a relative) and told me today at lunch: that the store is selling silver bars (100 grams - german casting she couldn´t say which) at €120! And they have some kookaburra kilo coins at €1300. No more inventory.

Talking of silver as the new gold! It as started here!



judejin achmachat
Jul 20, 2013 - 11:19am


some gold shops in china also carry so-called silver investment bars, which is priced at the international price plus 10% surcharge. but local people have mostly forgotten about what silver is.

so in shanghai for example sales of these investment bars is less than gold bars in weight, not to mention in RMB.

every year, there's about 3000-5000 tons of silver available for investment. at current price, that's about 10-20 billion RMB, or 0.1-0.2% of china's incremental M2, or pocket change for a big city like shanghai.

in the old days, shanghai used to hold half of china's silver.

when i mention silver to rich people in shanghai, they all say that silver is too bulky and almost worthless. they prefer a 40 million RMB painting to 10 tons of silver.

how times have changed! only two generations ago, silver was money in china.

Jul 20, 2013 - 11:27am


He says a lot of stress is in the gold market at sub $1300, but wouldn't that change if the price went to $1500, so then what?

The biggest issue I have with his opinions is that, everyone in the gold community would know if what he says is true, this "shortage" would not be a secret.

So if this "shortage" is not a secret, where are the speculators on the long side? If this is a easy opportunity to make money, where are they? It doesn't make sense.

I don't think that many investors in the gold market believe in the "shortage" theory that Mr.Mcguire states, if they did, they would react to it in the market.

I guess the only thing that can be said is, Mcguire only has so much ammo left making this claim, we can't live in a "shortage" state for 6 more months by the way he describes it today. Like I said, maybe $1500 makes this whole "shortage" problem go away.

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