NIRP Negative For Gold?

Thu, Dec 18, 2014 - 12:00pm

So the Swiss National Bank announces a plan for negative interest rates and gold prices fall. Of course negative interest rates are negative for gold! Only a blockhead would think that NIRP should be gold bullish.

And if you don't think I'm being facetious, then you obviously haven't been hanging around Turdville for long....

If you ever needed an example of what a complete and total farce the current precious metal pricing structure is, you got it today. Perhaps you haven't seen the news:

So the idea of negative interest rates is now being institutionalized by the Swiss National Bank. Beginning on January 22, the SNB will actually charge 25 bps for the privilege of parking money...and the price of paper gold declines. OK. Whatever. Just more proof that a system where a small handful of computer algorithms actively trading against each other is simply an unsustainable method of producing a "price". Simply put, when the paper supply price is this disconnected from the physical demand reality, something is bound to give. I'm happy to report that we are nearing that breaking point.

Today in London, the GOFO rates have plunged once again. As noted here incessantly the past few weeks, the historic GOFO plunge of November was a clear indication of a fraying paper-physical connection at prices below $1180 and near $1150. When GOFO suddenly "normalized" in early December, it was very likely due to the magical appearance of a newly found but limited supply of readily-deliverable London gold. This gold was then used to meet delivery demands as well as create paper gold for driving price back down and away from the 100-day moving average.

As you can see below, The Forces of Darkness have now exhausted whatever supply they had found and GOFO is now sinking like a stone again. This clearly indicates that, as we strongly suspected, paper prices below $1200 are unsustainable. This ultimately puts The Evil Ones in a very tight box as we head into 2015 and it sets us up for an explosive and powerful Q1. Until then, do like I do and just laugh away at the silliness and perversion of it all. NIRP = lower gold. That's an alltime classic!

And here's why today's SNB announcement only raises my confidence level in expecting a January breakout. Did you notice the date which the SNB will institute NIRP? January 22, 2015. And what's the significance of this date? As John Butler informed us during today's A2A, January 22 is the date of the next ECB meeting. It is entirely logical to assume that the SNB already knows that "ECBQE" is going to be announced on January 22 and they are taking steps to prepare themselves. If the euro is going to decline after the ECBQE announcement, only NIRP is Switzerland will keep money from rushing into the Swiss Franc and putting extreme pressure on the beloved euro peg. Therefore, this is clearly a preemptive move by the SNB ahead of expected ECBQE in January.

Putting it all together:

  • NIRP now being institutionalized around the globe
  • ECBQE in January along with continued yen devaluation
  • Physical floor put under gold price at/near $1150

This makes it highly likely if not probable/inevitable that gold finally breaks out and UP, away from the Cartel-imposed, momentum-stifling pattern we've been forced to deal with since May of 2013:

Of course, in the meantime, we're left dealing with the current situation. Clearly, the movement that's been afoot all week has been to sell the rallies and cap prices as much as possible. However, as I've been telling you all week, gold has really nice support between $1180 and $1190 and anytime silver has neared $15.50 these past six weeks, it has almost immediately bounced. I expect this to continue and, frankly, would not be the least bit surprised if the selling finally relents soon and we instead rally into tomorrow's close.

And finally today, just a few words on crude. As discussed in yesterday's podcast, it has now failed multiple times to get back above $59 as, just this morning, it reversed again right at $59.01. I have a last of $55.66 and, if it begins breaking down again through $55, the bottom might drop out really fast as recent knife-catching longs quickly head the exits. WATCH THIS CLOSELY in the hours ahead for the short-term impact on equities, the miners and the metals.

Today's A2A with John Butler was simply fantastic and it is required listening for everyone. Therefore, I'll be posting it this afternoon instead of a podcast. Please look for the link in a few hours and then be sure to listen. Invaluable stuff from a brilliant guy.


About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 18, 2014 - 12:07pm

I hear that it is transitory

Must admit that I want to see gold and silver stay low for as long as's I can buy more for as long as possible.

Just realized that that is pretty selfish. What I really want is a return to 'normalcy' of the markets. What I want is not reality as I don't think it will ever return. Time to evolve and adapt and critically think and inform others.

Pass the popcorn.

Turd, thanks for your research, time and are helping lots of people get through it.

Dec 18, 2014 - 12:22pm

Can be moved to forums if necessary...

I missed the SD Bullion sale this week; $2.49 over spot for ASEs (incorrect info from their online helper)...

Any other web deals for ASEs out there this holiday season?

Dec 18, 2014 - 12:31pm

the Swiss

are Nirp Herders!

"Why, you stuck up, half-witted, scruffy-looking Nerfherder!"
Dec 18, 2014 - 12:34pm

The Fed & "The Grandest Con Job In The History Of The World"

Submitted by Thad Beversdorf via First Rebuttal blog,

I used to get a kick out of the cute little children waiting for the Fed Chair to come and deliver presents or coal. So giddy and excited from the anticipation of not knowing who Janet thinks were good boys and girls. Who’s going to be rewarded and who disappointed? And I don’t know how many people asked me today what the Fed will do. My answer was “The same f@#*ing thing they always do, nothing. So stop asking”.

You see if you read some of Stanley Fischer’s early work on the rational expectation model you find that the key to fixing the lack of long term effectiveness to monetary policy is by confusing the working man. The idea being, people will act rationally with the information they are provided and so what typically happens is that people change their behaviour which counters the impact of the policy being implemented. The solution is to keep us guessing. And so what they have done for essentially every meeting is nothing.

However, they use the media to talk about all the things they just might do. And the pundits on television go on and on about all the things that might happen and what the follow on implications will be given those alternatives and then the moment comes and ahhh nothing, damn they fooled me again! I really thought this time was it gosh golly dang it!. I guess it was just that this or that was just slightly out of place otherwise they said they were totally gonna do this or that. So close, but ultimately they are right. Yep they made the right choice based on all the variables. They are just swell.

At this point, I just get annoyed with the ridiculous foolishness of people. We’ve got to start using our own brains. The Fed stopped using any benchmarks because while the benchmarks were improving, the economy wasn’t and isn’t. And so they were being railroaded by the transparency that benchmarks provide. And now it is just a black box of various indicators that will be analyzed in real time to form justifiable actions, far too complex for you and I but trust them that there is a definite method and it’s very quantifiable at that, they just can’t tell us what it is because it would just confuse everyone.

Does anyone really not get it?? I mean I was under the impression that the pundits on television were just acting for the sake of good drama. Is that not the case? Are people really still confused by what’s happening in the market and broader economy? It’s been 6 years of the absolute same bullshit. How could anyone not clearly understand exactly what is behind the action or non action of the Fed??? Come on people wake up. Take a deep breath, grab some coffee, do whatever you need to do but please wake the hell up.

The economy is a wreck. Debt to GDP is at even higher all time record highs than the stock market. Demand is absolutely dead except for the flooding of debt that continues to bury the average consumer. None of that equates to economic growth. It’s just cash flowing today rather than tomorrow. And so there can be no rate hike. Not for, well ever. Perhaps in 2 years we see a token quarter point to make it seem like we’re not completely dead but we are. Our economy is dead. You take away the increases to household debt and you have negative GDP. If you want to keep it in the calculation well then you have to take it out of your forecasts because you can’t count those purchases twice. And what you buy today with money you don’t have means money you do have in the future will not be available to buy anything. Is that clear to all?

I might sound a bit frustrated but I am frustrated. It’s one thing to throw your hands up and say I get the system is a complete sham but I just don’t have a solution. But please do not sit there and pretend that there are any market forces behind the financial markets other than the Fed. And please do not pretend that the current policies are expected to generate economic growth. But please do acknowledge that you understand what is happening here. If you don’t, well then take a giant step back and have a good look around. For what is happening is the grandest con job in the history of the world, bigger than the Trojan Horse by at least a few hands. There is no coming economic growth. That jump in GDP that they’ve been promising each quarter for 20 quarters now is not coming. In fact, it only gets worse from here.

And those all time highs in the stock market, well until you cash out, those remain unrealized and I would suggest cashing out. The reality is the powers that be are out of the market and preparing for a big sweeping transfer of wealth from all those little retirees and soon to be retirees out there that believe the market is no longer a risky asset. Their assets will be picked up for pennies on the dollar. The point is folks play along for the entertainment of it. Play along because it’s tradition. But don’t play along because you think the market is still some random response to fundamental supply and demand relationship.

The market has not been a function of fundamentals for some time now and is not reacting to them in any way, shape or form. To wrap this up I think it’s fine to play make believe with the magical Fed Chair and wish upon a star that she will pick you the winner today. But do it with your eyes open. Like Christmas, I still enjoy playing along with the kids regarding Santa, but I’m not putting my hopes, dreams and future on him. Make sense?


Mr. Fix
Dec 18, 2014 - 12:45pm

Everything is negative for gold now!

Didn't you get the memo?

There is only one scenario that could be considered positive for gold, and that is a complete systemic implosion.

There are no other scenarios that are gold positive.

Don't worry, it's coming…

Dec 18, 2014 - 12:52pm

The markets - WTF

Lets see

The DOW is screaming up 1.69% today on a few FED words and is up 11.74% yoy

FTSE up 2.04% today 3.44% yoy

DAX up 2.79% today 6.85% yoy

even the Nikkei today up 2.32% today 12.27% yoy

Gold up .03% at the moment and down -3.26% yoy

Silver down -.02% at the moment and down -20.63% yoy

Crude down -45.11% yoy

It all makes perfect sense, right?

Dec 18, 2014 - 12:55pm

Interest Rates Are The Downfall

of everything especially the Derivatives and when you start to see the rates moving up, Then, Buy, Buy, Buy like there is no tomorrow, probably won't be though.

Hell the Elite must keep the Interest Rates down as that's their Achilles Heel. Even today the Real Estate Rates are going down again. Keep Stacking

Dec 18, 2014 - 12:59pm

"It's close to collapse...."

The UK's oil industry is in "crisis" as prices drop, a senior industry leader has told the BBC.

Oil companies and service providers are cutting staff and investment to save money.

Robin Allan, chairman of the independent explorers' association Brindex, told the BBC that the industry was "close to collapse".

Almost no new projects in the North Sea are profitable with oil below $60 a barrel, he claims.

'Everyone is retreating'

"It's almost impossible to make money at these oil prices", Mr Allan, who is a director of Premier Oil in addition to chairing Brindex, told the BBC. "It's a huge crisis."

"This has happened before, and the industry adapts, but the adaptation is one of slashing people, slashing projects and reducing costs wherever possible, and that's painful for our staff, painful for companies and painful for the country.

"It's close to collapse. In terms of new investments - there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks. Budgets for 2015 are being cut by everyone."

Mr Allan said many of the job cuts across the industry would not have been publicly announced. Oil workers are often employed as contractors, which are easier for employers to cut.

His remarks echo comments made by the veteran oil man and government adviser Sir Ian Wood, who last week predicted a wave of job losses in the North Sea over the next 18 months.

Robin Allan from Brindex says low oil prices are hampering North Sea oil field developments

The US-based oil giant ConocoPhillips is cutting 230 out of 1,650 jobs in the UK.

This month it announced a 20% reduction in its worldwide capital expenditure budget, in response to falling oil prices.

Other big oil firms are expected to make similar cuts to their drilling and exploration budgets. Research from the investment bank Goldman Sachs predicted that they would need to cut capital expenditure by 30% to restore their profitability at current prices.

Service providers to the industry have also been hit. Texas-based oilfield services company Schlumberger cut back its UK-based fleet of geological survey ships in December, taking an $800m loss and cutting an unspecified number of jobs.

On Wednesday Aberdeen-based Wood Group announced a pay freeze for staff, and cut rates for its contractors.

Apache, one of the North Sea's biggest producers, has followed suit and will impose a 10 percent reduction on its contractors' wages from January 1st.

Dec 18, 2014 - 1:12pm

All gaps

in the gold stock indices from this morning were filled, PM stocks 'hanging in there' in spite of gold being well off overnight highs, encouraging action to say the least, let's see how they close

Dec 18, 2014 - 1:18pm

Russia Selling Gold

Uh-oh. Maybe all of these purchases was just to maintain the fall.

If this was the Fed's game all along, BRILLIANT! Sell them gold from 2000 to 1150 and buy it back from them at sub-1000 and relaunch.

I say it again, "These guys are good."

Dec 18, 2014 - 1:19pm

Business Cycles

Last night, was talking to two teachers about "money". The lady wants to GOTS & asked what where to put 7K. I said AG & AU. The other guy said that was risky advice & told her to put the cash in a safe. I then asked if they had heard about Bail-Ins; the new Fed Budget changes; and just for fun, the COMEX trading collars? Both didn't have a clue & looked at me like I was a "Puking Camel". After some highlights about the banking industry, the guy (age 62) stated that he had always been in stocks & bonds, & is doing well. I asked how could the stock market go up while business & the economy are doing poorly? He quickly stated that was how business cycles worked. He must have been convincing, because the lady said she would put the Cash in her safe. Go figure??

Dec 18, 2014 - 1:24pm


is bullish for gold. I have not seen anything that could be classified as bullish for gold.

No matter what happens... gold goes down and silver falls faster.

Mr. Fix
Dec 18, 2014 - 1:29pm

I don't believe it… (Not at all):

Russia Has Begun Selling Its Gold, According To SocGen

Submitted by Tyler Durden on 12/18/2014 - 13:05

"It appears possible that the Central Bank of Russia has started to sell off some of its gold reserves in December, with some sources reporting that official gold reserves dropped by $4.3 billion in the first week of the month."

Pure disinformation

Dec 18, 2014 - 1:31pm

Russia Selling Gold

If true, they are most likely not selling into the open market.

Instead maybe selling to the Chinese? Or Germans? For stability.

IF true.

Boy, the Fertilizer is starting to get thick and stinky.

Maybe because this USG Econ 18 wheeler is now out of control

Careening down the Continental divide at 120 mph.


Dec 18, 2014 - 1:32pm

Re: Interest Rates Are The Downfall

If you analyze the BIS OTC derivatives data, 'hands down' the largest bets have been made in the interest rate area. If you think lower oil prices are presently a concern, rising interest rates (as Marchas45 points out) will ultimately bring the entire house of cards to its knees. Got gold?

Dec 18, 2014 - 1:32pm


I think the question is why hadn't the teachers read or heard about the bail-ins, budget changes, ('ll give them a pass on comex collars - that is not really wide public info)....but there a number of stories which we Americans are not told. How about the 155-3 UN condemnation of neo Nazi's? the 3 were US, Canada (US' mini-me), and the neo Nazi HQ-Ukraine. Or whatever happened to Malaysian airline shoot down? Or derivatives receiving superiority in the recent NDAA? American Propaganda and media singularity is at a high..... Propaganda? Media Control? Ya think??? And the US media has the balls to put out an article like this, today: I'll spare you the read: It states that Putin receives such high rankings because of media propaganda in Russia. Are Russians that stupid? Are Americans that stupid to think that Russians are portrayed as this gullible? We have blatant propaganda and O barely gets half Putins approval. Sheesh. Think how low O would be with truth. If you can't tell me who Victoria Nuland is, please don't even begin to argue about Russia. Just another example of American ignorance, willful or otherwise. Gotta go. My scheduled appointment with Fox is now so that I can know what I am supposed to think!!

Dec 18, 2014 - 1:35pm

Russia sold all its gold

and a teenager made $72 million trading stocks.

Mainstream media Journalism is a waste of time in the world today. Stories are not vetted, and others are complete propaganda fiction.

I'll state it again, quit supporting it with your wallet.

rdwong realitybiter
Dec 18, 2014 - 1:48pm

Russia sold all its gold

Ohhh! So that's why GOFO went more completely negative. That all makes sense now! Complete BS, unless they sold it to China for Funding needs. If that's the case, who cares.

Dec 18, 2014 - 1:49pm

sociopaths and looking forward

I have not posted for a while...but read most of what is.

That said ... the true nature of the markets and political landscape is a direct result of the sociopaths that are running everything.

Only people who care only about themselves without regard for the rest of the species can even exist today at the highest levels.

The great news is that the system that has been created is starting to go Chaotic and the best and brightest of the bunch are on borrowed time before something catastrophic occurs.

My biggest fear is not what is happening now...but what happens then. A situation the means that these folks get to write whatever new rules they think will keep them in power (confiscation, nationalization, obfuscation).

(War, famine, social unrest, disease warfare, cyber warfar etc ...are the tools of these fools and only when the system as it stands today is in a shambles can decent men and women stand up and try to create something better. If you stand up today...and actually became a realistic threat... you would die)

I had a rather interesting chat with my broker the other day and he genuinely feels that folks should pay the premium and stack coins rather than bars (I wouldn't mind a little group think on this). He feels that governments will implement windfall profits taxes on bullion and mining shares ...or at least restrict the trading and sales of bullion ...not to mention the fact that bar numbers are being assigned to purchasers. Coins are another matter since they are currency and are NOT will be more challenging to legislate taxes on currency itself.

He also feels that anyone who actually is keeping money in the banks any great degree is a fool and sitting holidays, bail-ins, and currency controls are allready baked into the cake - How many of us could eat tomorrow ...if our cards stopped working?!)

Anyway ...I started this post and got myself sidetracked. My point is this ... the system, its actions and NEW rules will become more and more desperate ...until it simply breaks due to unmanageable complexity and unforeseen events. Own things that are real, take possession of your metal and mining stock certificates. You won't need a lot when everyone else has none.

If you can look in the mirror and say that you have taken steps to prepare.... go pour something fun

If not... the hourglass is running out on you.



noun: sociopath; plural noun: sociopaths

  1. a person with a personality disorder manifesting itself in extreme antisocial attitudes and behavior and a lack of conscience.

Dec 18, 2014 - 1:50pm

Russia Selling Gold - BS Story

The mainstream media is so full of BS, where is the evidence that Russia is selling its Gold?

Dec 18, 2014 - 1:51pm

how come

sogen never said russia was buying gold, at least saying it in real time, and now IF russia is selling So Gen can say this week what happened last week?

just asking

James Crighton nadgeskaul
Dec 18, 2014 - 2:00pm

re: "these guys are good"

No nad - "these guys" are not good. They are psychopathic, low-life, amoral, cheats.



Dec 18, 2014 - 2:05pm


Great question; why haven't they heard about the changes?? I think you nailed it at the end "Gotta go. My scheduled appointment w/Fox is now so that I can know what I am supposed to think!" Unfortunately, that is reality for most folks. So sad.

Dec 18, 2014 - 2:07pm

I don't think that....

Russia is stupid enough to sell off any gold. U.S. $, yes, but not gold. I've seen the following link and others like it posted the last few days:

Putin's performance was good this morning and I think that they may put just as much bullshit out as our media does. However, he is serious about having all this go away in the next year, maybe two. He and China will bide their time and let us westerners blow ourselves up. At some point perhaps China could move things along with some U.S. Treasury sales.

I believe the trap is set.

Ruislip Ranger GoldenWizard
Dec 18, 2014 - 2:09pm

Russia selling gold BS story

Russia selling gold BS story smacks off desperation by the bullion banks. Only one direction that would go if it were true and that's China and let's be fair the Chinese are hardly forthcoming with info regarding their gold imports.

Got my first 2015 sovereign today...nice and shiny !

Dec 18, 2014 - 2:09pm

What really happened?

English speaking Soc Gen analyst question "So is there any truth to the rumor that Russia is planning to sell some of it's gold reserves to defend the ruble?"

Russian speaking official answer "Nyet"

Soc Gen analyst headline "Russia not yet selling gold but plans to do so in the not too distant future"

Dec 18, 2014 - 2:16pm

Questions for my relatives over the holidays

All y'all are inspiring me this morning.

Realitybiter, your handle is apt.

"If you can't tell me who Victoria Nuland is, please don't even begin to argue about Russia." I love it!

Well I only knew a few things about her so I looked her up. Wikipedia is not kind to her. Married to a CFR member, Jewish heritage (not that that is bad, but it does locate her in a TPTB circle). The other top hits were all negative. If someone were to take your advice and look her up, it sure would get the wheels turning.

We may have some interesting holiday conversations this year...

  • Why does congress pass lethal aid to Ukraine (that could lead to WW3) citing MH17 as Russia's fault, while Russia provided contrary evidence to the world and the US provided no evidence?
  • What is a "bail-in?"
  • What is a Bank Holiday?
  • Is your money safe in a bank?
  • Is your money safe in stocks at all time highs?
  • How many of us could eat tomorrow ...if our cards stopped working? (Thanks Exergy)
  • Why is silver 75 to 1 with gold, when the norm is closer to 30-1 and the out of ground ratio is 12-1?
  • Why don't you want to talk about this?

I can hear my step-mom now, "Jerry, what's wrong with you? You can't eat gold or silver!"

Hey? Who tries to eat gold. do you eat benjamins when you are hungry. I trade mine for whatever I need, like food.

And I hate being called "Jerry," mom.

Dec 18, 2014 - 2:28pm

Swiss NIRP

I gotta laugh at that one, just weeks ago the Swiss folks were induced into voting down the gold referendum and now they will have to pay to keep money in the bank. There were duped and hopefully feel lots of good old fashioned voter's remorse.

Dec 18, 2014 - 2:31pm

Putin's high polling @realitybiter

Fox Business had a panel on yesterday saying the same thing, that the Putin poll numbers had to be fake.

I have commented on a few articles on yahoo finance regarding Putin/Russia/Ukraine and the commenting there is much more negative about Putin than gold, so gold is doing better than Vlad with the endless negative articles toward gold and Putin with the comments.

Dec 18, 2014 - 2:32pm

I have been "Patient" for a "Considerable Amount of Time"

I listened to Peter Schiff's commentary last night and he mentioned that the FED in their statement yesterday replaced the phrase "Considerable Time" with "Patient" but in the next sentence they said that "Patient" was the same as "Considerable Time"... WTF...

After grand-ma Yellen's press confrence the markets took off... Now Zero Hedge is reporting what Mr. Schiff said last night

These fools trading these markets are being played like a cheap fiddle. When will they wise up and realize that rates will never rise and the only tools the FED has is Jon Hilsenrath and money printing. Its really sad to see grown men and women hanging on every word old grand-ma Yellen and the other FED heads say.

Stack on...


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