Well, Here We Go

Mon, Sep 14, 2015 - 11:29am

We're off and running in what will surely be a week not for the faint of heart. If you like volatility and uncertainty, this week is right up your alley. Fortunes will be made and lost while my cute little stack of gold shines in the sun, indifferent to all of the Keynesian madness.

As this pertains to gold and silver, here's what you must remember. The only reason there is a TFMR is because of our recognition that the precious metal "markets" are wholly manipulated by the trading desks of The Bullion Banks, often acting as agents for the devious Central Banks. So, as you look at the charts, you must always remember to look at them through this prism. Ask yourself, what kind of picture is being painted in order to "trick" the other market participants (Specs) into taking the position that the Bullion Bank desks would like them to be in?

With this in mind, let's examine the charts below....and let's be clear about this...they are undeniably bearish. Though gold is up a couple of bucks today and clinging above $1105, this is mainly due to a mildly strong yen. Nothing more. As sentiment ebbs and flows through the week, gold will slip back below $1100 as the yen trades back lower. The intraday breakdown below $1100 back on Friday nearly assures this. Below $1100 and only gold almost certainly tests the $1080 area where it had found support back in July. It is very hard to imagine that gold won't come close to testing $1080 sometime before Friday morning.

And silver's no picnic, either. The action Friday and today almost certainly projects a test of the 8/26 lows of .95:

So, again, here's what I'm driving at...

Think of how many times just this year that gold (and silver) were set up right at key technical levels just before some major economic news (like the BLSBS or GDP) was due to be released. And here we are, three days from the "most important FOMC Fedlines in years" and gold (and silver) is being walked down toward critical support again. The undeniable conclusion is the the BB desks are positioning gold (and silver) for a major smash at 2:00 pm EDT on Thursday.

And what kind of Fedlines would cause a sharp gold and silver smash (into which the BBs would be buying and covering)? A rate hike.

Again, this makes no sense from a traditional, Keynesian point of view. The U.S. economy is in shambles so there's no need to "tap the brakes" and try to achieve a "soft landing". That's all bullshit. Instead, the primary reason that The Fed might hike rates can be seen below:

As we've discussed for weeks, the fate of the U.S. stock market is now inexorably tied to the USDJPY. Knowing this, The Fed must realized that the only way to keep the stock market afloat is to raise rates. Why? Higher rates make the HFTs buy the dollar. A higher dollar weakens the yen. And a weaker yen pushes the stock market back up.

Look, I hope I'm wrong about this. The day is coming when the Central Bankers will finally be exposed as the liars, bluffers, spinners and mopers that they are...AND I'D LIKE THAT DAY TO BE THURSDAY. However, in their arrogance and their desperate attempts to keep the plates spinning as long as possible, here's how I expect this to play out:

Option 1

The FOMC does nothing. The market assumes that rate hikes are indefinitely postponed due to market volatility, deflation, China devaluation, etc etc etc. The dollar weakens vs the yen despite all of the BoJ efforts to beat the yen back. The stock market declines on the news as HFTs sell index futures vs the falling USDJPY. Gold rallies with the rising yen.

Option 2

And this is what I think is going to happen. The FOMC raise the fed funds rate by 15 or 25 basis points. The stock market soars as the USDJPY ralliess with the dollar strengthening against the yen (a happy BoJ, too.) Gold, silver and all commodities get taken to the woodshed. However, all of the market hysteria soon fades as we move into late September and October due to:

  1. The rising dollar forces even more yuan devaluation from China
  2. This intensifies global currency wars
  3. Fed rate hike exacerbating commodity plunge deepens fears of global deflation/disinflation
  4. Serious stress in companies like Glencore and nearly all emerging markets
  5. Global liquidity crisis resumes/deepens causing liquidations and global margin calls
  6. Fed forced to quickly react and "dovish" talk begins about FOMC cuts and even renewed QE to stem #5 above
  7. After re-testing 80ish bottom, yen begins to soar as dollar melts down in anticipation of renewed QE etc to "save the global financial system"
  8. After failing from somewhere back near S&P 2050, S&P begins collapsing just as "Death Candle" predicted it would
  9. Chaos and panic set in
  10. FOMC cuts rates and promises QE or "whatever measures necessary to restore calm and order to markets".

And the world finally sees that the emperors have no clothes.

Sounds like it's going to be an interesting couple of weeks, doesn't it? The point is...The Fed, the ECB, the SNB and the BoJ are doomed either way. All remaining credibility will be lost as the world finally recognizes that there is no plan and there is no normalcy. Quantitative Easing and unlimited currency creation and devaluation is all that they have.

As this pertains to the metals, any new paper price low found over the next few days or weeks will be The Final Low. What that price will be and when it occurs hardly matters. What does matter is that...if this all plays out as outlined above...you're about to live through some unprecedented and historic times. I hope you're ready. It all begins on Thursday at 2:00 p.m. EDT.


About the Author

tfmetalsreport [at] gmail [dot] com ()


Sep 15, 2015 - 10:20am

watch out Jeff Christian

a rebuttal of your 'no london backwardation' gibberish is being developed as we speak

Sep 15, 2015 - 6:53am


nice work TF this is NOT what the average asset manager thinks is going on. Safe to say the expectation is for nothing from yellen and then business as usual (ie equity markets back to the highs). Your crystal ball is glowing.

Sep 14, 2015 - 10:22pm

re: Fred, we've discussed this quite a bit over the years

What Fred was asking about was the percentage of total contracts that took delivery, not the number. I'm interested too, if you'd be so kind.



Sep 14, 2015 - 4:53pm

Here is a contrarian thought...

FED does the opposite of what is best for everyone but themselves?!?!

I mean, if we are intellectually honest, would we not stop all of this mindserbation and just come to grips with and ask the real question? What is best for the FED and its cartel?

What is best for them? Can we get some real dialog on that one? If we could honestly answer this one, then perhaps we really would know where they are headed.

Me personally, I resigned myself to knowing they plan to steal everything not tied down. That means give all the credit junkies their credit dope then start jacking prices on the debt/crack till the junkie either dies or gets clean. If the junkie starts getting clean, the dope dealer just lowers the price again until the junkie gets real hooked... Once the junkie is about destitute and can't pay, then the dealer just comes into the house and steals them blind.

I see all major hard assets on the auction block with this next crash. If I'm right, what would cause the junkies to crash the hardest? More debt? Higher rates? More liquidity? Less liquidity? We have miners in the dark alleys, strung out like meth heads and no one can save them. They are disgusting to the majority of equity holders, so it will be the dealers who come in and steal them. Any other hard assets you guys see?

If this really is about gold and silver, then what would you really want to corner? The stuff in the vault that you no longer control, or the mines that have the rest?

James Crighton
Sep 14, 2015 - 4:53pm

Janet Yellen's absence from Jackson Hole

One still has to explain Yellen's absence from Jackson Hole.

Could this be because they plan a change in policy - an about turn: no rate hike (I mean, reasonably, how can they raise rates in the present environment) and then QE4 (or some such similar stimulus)?

Perhaps "no change" this Thursday - followed by QE4 announced in October; or stimulus this Thursday? If rates are raised on Thursday, the Fed will look really stupid when the crash is precipitated.

All so stupid innit - the World hanging on every word of a corrupt organisation, serving the interests of a super-corrupt few. One has to ask, how long can it last?


Sep 14, 2015 - 4:45pm

QE3 vs QE4


I get your supposition on why they might raise rates this Thursday, but why change tactics? When the Fed wanted to raise rates for QE3, they just let the market correct until there was an outcry to save the IRA's/401K's and so they obliged with QE3 and all was good with the world and the markets hit new highs. So when the market was falling a few weeks back, why not let it correct so QE4 could be implemented? The whole world is saying not to raise rates and if the Fed does then everyone will scapegoat them as the cause of the implosion. On the other hand if the markets fall and the outcry begins again they have the perfect excuse to do QE4, which you know is their ultimate goal.

Like you said, none of it makes sense anymore... it's just all one big game and there are a few ways to play it to get the same outcome. It's just curious that a fed hike will cause huge waves of anger and then they will have to QE4... why not just avoid the international outrage?

Edit: based on the comment below, perhaps there is already enough Stealth QE and they don't need QE4 and that is the answer to my question... H/T auagforever for this thought.

According to Jim Willie, the FED is conducting "Stealth QE Infinity Squared" using the Reverse Repo Window of approximately 1 Trillion Dollars a Month to cover the derivative black hole. Logically, if the FED can create that much liquidity, why would they need to manipulate the usd / jpy to control the stock market? This ends only if and when the global players refuse to accept treasures in exchange for goods like Jim has stated.

Sep 14, 2015 - 4:36pm

I veiw COMEX like ENRON

That they are trading and shuffling back and forth numbers to benefit them. The only thing that's going to break it out to the open as a manipulation are the regulators or the currency failure.

We already know how useful the regulators are in this matter. The DOJ is starting to spout the "Weez gonna take a bit outta crime." for perceptions.

That's enough for now. My cynicism was about to carry me away. What I need is to go get some things done.

Sep 14, 2015 - 4:17pm

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4 oz
Sep 14, 2015 - 4:13pm


Sep 14, 2015 - 4:08pm

As an aside ...

No Shemitah hitting the fan today (so far). I'm sure there is an over/under allowed on such prophecies. After all, after wandering the desert for 40 years, one day looks pretty much like the other.

wax off

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