New from Paul Mylchreest

Tue, Aug 27, 2013 - 5:00pm

Just wanted to be sure that this got a fair hearing on Main Street.

I met Paul through NN-L. He is an outstanding analyst and his research papers are always first rate. Below is a Scribd doc of his latest: "Collateral: Could the Post-Lehman Reflation Be Reaching Its Limits?"

Please take the time to read and consider the entire article but you'll want to pay particular attention from page 14 on as Paul discusses the current backwardation and negative forward rates in gold.


Thunder Road Report August by zerohedge

About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 27, 2013 - 5:04pm

Good read

Has some useful information, but seriously, just keep stacking. It's the only way forward....

And, first? bitchez?

Aug 27, 2013 - 5:26pm


My favorite number!

Aug 27, 2013 - 5:27pm

Yealp #2 it is

Thanks for the public post Turd!

I have been craving a Thunder Road Report for some time now.

Page 7 (and beyond) should be understood with regards to the OpEd from Saturday Titled:

The Institution of Money

By argentus maximus | Saturday, August 24, 2013 Both OpEd's are very prudent to understanding the relationship of all this and enjoyed both! Thank You!!!
Aug 27, 2013 - 5:29pm

Good read.

....and I read it BEFORE claiming top ten again. smiley


Aug 27, 2013 - 5:31pm

ZH been on about collateral

The tylers or at least one of them has been beating the collateral shortage issue for a while now especially in regards to repo and bonds. Rob Kirby disagress basically stating the fed can set interest rate to anything they need to through various mechanisms like swaps. But I think ZH position is on to something general.

In the end, when it comes down to everyday business, its all about collateral. Real businessmen need to feel somewhat assured they can get something for what they are doing. All sorts of financial instituitions have formal collateral definitions and many have been changing in recent years. But in the end that doesn't mean shit. Sure it lets banks and other parasites operate with more ease but in the end its the actual businesses that need to feel comfortable about what is going on. You offer your car up as collateral on the deal and it goes south I get a car. You offer up some bond backed bullshit derivitized three ways to sunday and I may say "How about your car instead?".

These formal "rules" are slowly erroding and being invalidated through lack of trust. Too many promises are going to be broken. Too many things redefined in desperation. Too many contracts abrogated through pure BS. And then we will be back to something we should never left: "Talk is cheap, but whiskey costs money", "Put up or shut up", "A bird in the hand is worth two in the bush".

The more nervous people get the less "collateral" there will be. This will not be linear. And the redefinitions of what is acceptable collateral from a pinhead economist's point of view seems like an easy win. In reality it is actually tightening the collateral situation as the savvy people who need to do real stuff smell desparation and become more stringent.

Aug 27, 2013 - 5:41pm

Numero Seven

From the cracks I see in the facade, Paul Mylchreest is probably right on in seeing problems emerging for the current debt bubble.


Aug 27, 2013 - 5:51pm

Yes, it's definitely war - BBC Newsnight - live - right now..

A UK Govt spokesperson in the studio just said "the key thing is that people are very keen for a punitive strike, something that involves cruise missiles fired from submarines and warships out in the Mediterranean... missiles should be fired into Syria and military targets"

"people are very keen for a punitive strike" What people? There is NO questioning about that.

The agenda is war. No doubt about it.

The forced message is that everyone in the UK is behind it. That's what they say, so it must be true.


Aug 27, 2013 - 6:22pm


Ethos, Pathos and Logos.

They use these three modes of communication to lie to us:

  • Ethos is an appeal to ethics, and it is a means of convincing someone of the character or credibility of the persuader.
  • Pathos is an appeal to emotion, and is a way of convincing an audience of an argument by creating an emotional response.
  • Logos is an appeal to logic, and is a way of persuading an audience by reason.

Aug 27, 2013 - 6:43pm

Ethos, Pathos and Logos ?

Ethos = Conservative Alpha Male approach .... Pathos = Socialist, Female, Pathetic .... Logos = My Libertarians and totally outnumbered .... sigh ! Monedas 1929 Comedy Jihad Cacophony Of Armchair Generals At Xero Edge Is Deafening World Tour devil PS: A Cutting Edge implies direction of the cut .... not a mixed bag of Conspiracy Breathing Socialists and Anarchists .... with a few sensible Libertarians mixed in !

Howard Roark
Aug 27, 2013 - 6:48pm


I´m following the Chuck Hagel on BBC, it´s just China, China, China... even when talking about the region. Well of course, but nothing of substance. Directly, I mean.

As to the dimensions of analizyng discourse (ethos, pathos, logos), I guess that gubs, politicians and MSM are only worried about the first two: ethos and pathos. That´s why the political struggle gives so much attention to character (ethos) assassinations and marketing the most mainstream ideas from socialism, gaining strength from from emotions/sentiments like envy (pathos).

The logos dimension, it´s another story. And that´s the way this community can make a difference: show through reason and logic the consequences of this great experiment we are living.

Kudos Bollocks!

Now reading the entire Thunder Road report.



Aug 27, 2013 - 7:09pm

The Sounds of Silence

Anything from anyone in Congress about whose job it is to declare war and that preemptive strikes are anti-American. Whose children are we committing to die for big oil. Shirley, Exxon could take the first born child of each employee and take on Syria or somebody. "For the good of the company and stock bonuses for the CEO"...where is the patriotism. BP should be at the front of the line to make amends for killing the Gulf. "UK leads the charge with 13 year old BP dependents armed with sludge..."

Aug 27, 2013 - 7:12pm
Aug 27, 2013 - 7:15pm



Aug 27, 2013 - 7:19pm

Why its not a good idea to metal detect in N Ireland

The Guardian, Tuesday 27 August 2013 13.21 EDT The largest haul of paramilitary weapons found in Northern Ireland for years was discovered by an amateur metal detector enthusiast, security sources have confirmed. Sixteen semi-automatic handguns and 800 rounds of ammunition were buried in woodland on the Lisnabreeny estate, a National Trust property on the south-east outskirts of Belfast. The guns and ammunition are believed to have been hidden there for several years and were in good condition. According to security sources in the province, the discovery was made by a man using a metal detector at the weekend rather than after a tip-off from informants. The guns, thought to be from eastern Europe, are being examined to see if they have ever been used. Jimmy Spratt, a Democratic Unionist member of the assembly and retired police officer, said he believed the cache had not been buried deep underground, which suggested an amateur operation. "It was a matter of inches from the surface. From my previous police experience, the situation looked quite amateurish. It looks like they were put into a five-gallon oil drum and buried. It was fresh digging that has taken place fairly recently.

Aug 27, 2013 - 7:25pm

Howard Roark

Yes, persuasion through logos is the most difficult one in that list. Unless the audience have lost, or haven't realised, their sense of logic.

"Logos is an appeal to logic, and is a way of persuading an audience by reason."

Of course, true logic needs no persuasion. However the gov't have injected, via the media, the idea that an individual can make their own decisions, which are not their own decisions - they are simply ghost 'decisions' that come from being fed one option and then a second option - both of which are controlled and fed by the gov't, via the media machine.

"persuading" is the key word. There is no need to persuade if you are speaking the truth, you just speak, you just say what you know to be true.

Persuasion means lying. So"Logos is an appeal to logic, and is a way of persuading an audience by reason." is true, but is a lie because logic cannot be appealed to or persuaded, assuming the truth of logic has been realised.

Which for the majority it hasn't. The gov't use this to confuse those that believe they are logical. Another level of belief is then under control.

Well, this fits for me.

Aug 27, 2013 - 7:32pm
Aug 27, 2013 - 7:45pm

Deacon Benjamin re: Jimmy Spratt and Arms Cache !

He says it looks amateurish .... because of recent digging and shallow burial .... there is nothing amateurish about an arsenal like that .... and if it had been buried several years and is still in good condition .... that is not amateurish .... if there was recent digging .... maybe some "terrist" made a withdrawal recently .... not too amateurish .... it was where they could get their hands on it in a hurry .... Jimmy Spratt .... retired police officer .... Democratic Unionist .... apologist .... sympathizer .... buried on a Government Trust estate .... under bureaucratic control .... I hope the "amateur" metal detector enthusiast .... probably a "coin collector" .... one of us .... is safe ? Monedas 1929 Comedy Jihad War On Terrists World Tour devil

Aug 27, 2013 - 7:49pm

Currency Spikes & Rigging In London? ~ click the graphic

Currency Spikes at 4 P.M. in London Provide Rigging Clues

By Liam Vaughan & Gavin Finch - Aug 27, 2013 7:01 PM ET

In the space of 20 minutes on the last Friday in June, the value of the U.S. dollar jumped 0.57 percent against its Canadian counterpart, the biggest move in a month. Within an hour, two-thirds of that gain had melted away.

The same pattern -- a sudden surge minutes before 4 p.m. in London on the last trading day of the month, followed by a quick reversal -- occurred 31 percent of the time across 14 currency pairs over two years, according to data compiled by Bloomberg. For the most frequently traded pairs, such as euro-dollar, it happened about half the time, the data show.

The recurring spikes take place at the same time financial benchmarks known as the WM/Reuters (TRI) rates are set based on those trades. Now fund managers and scholars say the patterns look like an attempt by currency dealers to manipulate the rates, distorting the value of trillions of dollars of investments in funds that track global indexes. Bloomberg News reported in June that dealers shared information and used client orders to move the rates to boost trading profit. The U.K. Financial Conduct Authority is reviewing the allegations, a spokesman said.

“We see enormous spikes,” said Michael DuCharme, head of foreign exchange at Seattle-based Russell Investments, which traded $420 billion of foreign currency last year for its own funds and institutional investors. “Then, shortly after 4 p.m., it just reverts back to what seems to have been the market rate. It adds to the suspicion that things aren’t right.”

Global Probes

Authorities around the world are investigating the abuse of financial benchmarks by large banks that play a central role in setting them.

Barclays Plc (BARC), Royal Bank of Scotland Group Plc and UBS AG (UBSN) were fined a combined $2.5 billion for rigging the London interbank offered rate, or Libor, used to price $300 trillion of securities from student loans to mortgages. More than a dozen banks have been subpoenaed by the U.S. Commodity Futures Trading Commission over allegations traders worked with brokers at ICAP Plc (IAP) to manipulate ISDAfix, a benchmark used in interest-rate derivatives. ICAP Chief Executive Officer Michael Spencer said in May that an internal probe found no evidence of wrongdoing.

Investors and consultants interviewed by Bloomberg News say dealers at banks, which dominate the $4.7 trillion-a-day currency market, may be executing a large number of trades over a short period to move the rate to their advantage, a practice known as banging the close. Because the 4 p.m. benchmark determines how much profit dealers make on the positions they’ve taken in the preceding hour, there’s an incentive to influence the rate, DuCharme said. Dealers say they have to trade during the window to meet client demand and minimize their own risk.

Currency Patterns

“There are some patterns in currencies that are very similar to what I have seen in other markets, such as the way the price-fixings’ effects disappear so often by the following day,” said Rosa Abrantes-Metz, a professor at New York University’s Stern School of Business, whose August 2008 paper, “Libor Manipulation?,” helped trigger the probe into the rigging of benchmark interest rates. “You also see large price moves at a time of day when volume of trading is high and hence the market is very liquid. If I were a regulator, it’s certainly something I would consider taking a look at.” (cont.)

Aug 27, 2013 - 8:39pm

Bail in video

I posted about how I believed that FDIC etc insurance is a fantasy some time ago.

This is a much watch short video.

Money Is Not Safe In The Big Banks

Even my credit union here in Canada has derivative exposure. Beware - your deposits are not as insured as you think.

Aug 27, 2013 - 8:49pm

2 fer

Doubled - deleted.

Aug 27, 2013 - 8:54pm

Synopsis of Grant Williams

Love me some Grant Williams

Williams touched on this in his latest offering and Lawrie Williams summarised it beautifully:


I mention this as the attempt to control the onset of the sea has its parallels in the machinations of the central and bullion banks and governments to try and control the gold price in the face of seemingly inexorable demand from points east, notably India and China. The gold tide may well be on the turn and will likely rise and wash all the paper gold merchants’ price control efforts away.

Grant Williams, in his latest Things that make you go hmm newsletter, says it plainly: You do NOT want to bet against a tide like this — not in a commodity [gold] with a very fixed existing supply and a very consistent, but small, annual supply increase of around 2,500 tons… Five of the ten most populous nations on earth are hungry buyers of gold, and each of them has a burgeoning middle class that has, over the years, embedded in its cultural psyche the idea that owning gold is just what you do when you can afford to.” He illustrates this with the following graphic showing the world’s ten most populous nations and pointing out those which are predominantly gold buyers:

Arguably, although Williams doesn’t do so, it could be worth mentioning that the U.S. itself was the sixth largest gold buying area in the second quarter of this year – After India, China, Europe, the Middle East and Turkey and although its buying was dwarfed by the gold outflows from the big ETFs there, as the tide turns, and these ETF liquidations fall away, it too will probably become a net buyer of the yellow metal – as may well the people of many other nations as well.

But, society in the West and East does have rather different attitudes towards gold. The West, for the most part, looks upon it as a short to medium term trade, while the East sees it primarily as a store of wealth and an inflation protector and puts it away against a rainy day – and given the growth that is occurring in the highly populated eastern nations, these rainy days are becoming few and far between, so this gold is just not coming back on the market.

It may also be worth looking at silver. As we forecast in our article of just over a month ago silver has maintained its historical movement advantage over gold when the latter is on the move upwards with the gold silver ratio falling. As I write the gold:silver ratio is sitting at around 58 – as opposed to around 65 when the above article was put together. In fact the silver price has risen by about 30% in the past two months while gold has risen 17% over the same period.

Over the weekend gold broke back up through the $1400 level and somehow the sentiment towards it seems to have changed. People are getting nervous about the general stock market, which has had a good run while gold had been falling. Now there is a realisation that the rising stock market may have vulnerabilities, despite the amount of money still being pumped into the economy through easing programmes – and talk of tapering now seems to be depressing the general stock market as much as gold – if not more so. How quickly attitudes can change in the markets. Momentum seems to be building in the gold and silver space. The East is still buying, and the West may have ceased its big gold ETF sell-off. Where is the gold and silver coming from to meet this big, and seemingly rapid, change in the market with demand for physical metal outstripping new supplies? Are the ‘wise men’ truly in the East still today? People at last seem to be coming to the realisation that paper gold is just paper and they need to get the real thing in their hands.

As Grant Williams says - You do NOT want to bet against a tide like this”. And if indeed the tide has turned and gold is on the up again, with demand seemingly exceeding supply, the movement could be prolonged, rapid and big. – And silver will likely do even better!

Aug 27, 2013 - 9:45pm

Harvey's Up!

  • John Rubino: One of the reasons that the developed world seems relatively stable while our debt, currency creation and unfunded liabilities go crazy is that we have a safety valve. When the Fed or ECB or Bank of Japan lowers interest rates to zero or buys up trillions of dollars of bonds with newly-created currency, a lot of that potentially-destabilizing liquidity flows elsewhere, mostly to emerging markets like Brazil
  • Harvey: Today was options expiry on the gold and silver contracts. Generally the bankers love to whack gold and silver prior to the expiry to prevent contracts on these precious metals from being purchased. In the wee hours of the morning, they did drive gold and silver down but tensions in Syria mounted. Today we saw a huge whack in the gold/silver equity shares and that is a good sign that the bankers are trying to mobilize forces and try another attack for tomorrow. We will see how this plays out.
  • Bloomberg: Technical analysts say that gold's break above $1,400 an ounce on Monday for the first time since June 7, in conjunction with its break above the 100 day moving average and a bullish "cup and handle" chart pattern, suggest more gains are in store for gold which may have bottomed out two months ago on June 28.
  • Reuters: Gold futures in India touch record high above 32,500 rupees, but are still expected to go higher. Silver for September delivery on the MCX was 2.54 percent higher at 55,155 rupees per kg.
  • Bengt Saelensminde: Over 700 tons have been shipped out of London over the first half of this year. Again, to put that into perspective, Gordon Brown’s much berated gold sales between 1999 and 2002 amounted to just under 400 tons. So, what we’ve witnessed is a massive outflow of private gold wealth, and remember, that’s just during the first half of this year!
  • Bill Holter (Miles Franklin): Investors are now wondering "where is the Gold?" and they don't like the answers they are getting. They are "voting" with their financial transactions. Investors are going to "cash and carry" on their own. They are buying physical metal and asking for delivery. Basically the recipe for a buying panic is evolving.
  • Bill Holter: If there was no Gold to be had at the mint or from refineries, if the mines just sat on and held their production, if your coin dealer could not source metal and no one was offering Gold for sale either privately or over the internet, what would an ounce of Gold be worth? The answer is "a lot".
  • Lawrence Williams (MineWeb): Over the weekend gold broke back up through the $1400 level and somehow the sentiment towards it seems to have changed. People are getting nervous about the general stock market, which has had a good run while gold had been falling. Now there is a realization that the rising stock market may have vulnerabilities, despite the amount of money still being pumped into the economy through easing programs.

All this and more on...

The Harvey Report!


Aug 27, 2013 - 10:16pm

Bugzy Thank You! Good video

Are you vulnerable to a bank failure? FDIC was designed for single bank failure, it was never designed for systemic failure. It is not capitalized for a systemic failure.

Aug 27, 2013 - 10:40pm

This guy seems to speak the right too

Re false flag chemical weapons Syria.

It is a video - pretty straight forward logic

Aug 27, 2013 - 10:42pm


Some basic truths.

Starve Monsanto - please.

See vid:

5 GMO Myths Busted
Gold Dog
Aug 27, 2013 - 11:01pm

Off Topic

I just posted at the end of Pining's article and would be interested in seeing if anyone has feedback.

Your friend,


EDIT- DPH, your maps are quite informative and this whole business scares the shit out of me. Pray for peace.

Aug 27, 2013 - 11:03pm

I see a vertical line of green

Try telling Indians not to own Gold? You are having a laugh.

Thinks Aussie was not for off green too.

Edit: and the Jap yen coming in a close third oh ho, what's this, an outsider the Brazilians...a complete outsider... Zimbabwe are disqualified for starting too early!

 And as for Argentina - complete thoroughbred.

night all

Aug 27, 2013 - 11:06pm


Basic Idea is fantastic. Build it right next door to Simon Black in Chile and I am interested. USA, not so much.

Yes,,,boo hiss.... My honest opinion.

Or Even as a Doug Casey type in Argentina.

Aug 28, 2013 - 1:32am

@Dog and @Bugzy

Dog, I think you idea is brilliant. Maybe you'd like to start a separate forum, e.g. Dog's Gulch, so that it can be an evolving discussion? Obviously, a thread on Main Street to kick the discussion off and get things going would be nice. 

What say you, Turd?

Bugzy, Have you any idea how many revolutions there have been in Argentina in the second half of the 20th century and what happened during those revolutions? Haven't you ever heard of los desaparecidos? I think Doug Casey is just un poquito loco on this point. What do you think, that during bad times Casey's luxury community is going to be left alone to sit it out in safety? This is totally delusional or totally stupid or both. To my mind, they're just a bunch of sitting ducks - and rich ones at that. Argentina is already in bad times. When things get worse, I wouldn't be surprised to see another military junta and major crackdowns. 

Aug 28, 2013 - 1:49am

A History Lesson...

Saw this article on

Lear Capital:

When Gold and Silver Owners Got Rich

By Roger Baettig

"So it was in the eight years of recession that followed the “Panic of 1837.” The gold and silver stores of those who would continue to honor the system of real money, blossomed into great wealth as the value of paper assets crashed and burned. You see, in the Panic of 1837, wealth was not destroyed, it was transferred. It was transferred from those who held printed paper wealth to those who held the hard assets that were intended to back the paper.

As those who held gold and silver began to realize their new-found fortunes, it was that wealth that began to disperse throughout the economy. There wasn’t less money after the banks’ Declaration of Financial Independence – just less debt. The money supply, (gold and silver being the money) remained constant. "

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