Reposting This Excellent Video

Wed, Dec 16, 2015 - 10:21am

We first posted this video from John Titus back on September 16, just days before the most recent FOMC when The Fed was expected to "raise interest rates". No time like the present to post it again and we implore you to take the time to watch it.

In the 90 days since, we've gotten to know John a little bit and we've even had him in for an A2A webinar. That show is public, too, and I encourage you to listen when you have the time:

Financial media seem certain that Mother Fellen is going to raise the Fed Funds rate later today, perhaps by 25 basis points. So why is Mother so hell-bent on raising rates RIGHT NOW, even though all of the economic data is still awful? After all, we've stated for years that The Fed can't and won't raise rates. Remember, though, we've also told you countless times that "the FOMC/Fed will do whatever they deem is in the best interest of their (TBTF) member banks"? In this case, it's all about the excess reserves as described in John's video.

  • Mother can't eliminate the interest on excess reserves that The Bernank started paying in 2009. Recall the hissy fit Jamie Dimon threw at the mere mention of an excess reserve interest rate cut a few months back?
  • But Mother also can't force The Banks to lend nor can she force the banks to reverse repo the cash back to The Fed.

Therefore, she's considering raising rates by 25 bps. Why?

All of this is sort of what David Stockman discusses here:

The bet is that the "economy" can withstand higher rates and the flattened yield curve that usually foreshadows recession. Again, this is all uncharted territory, thanks to the criminal Bernank. Mother has NO IDEA of whether this will work. Perhaps, she'll hesitate again later today out of fear and uncertainty. We'll know soon enough.

Regardless of whether she does or doesn't, my plans aren't changing as I continue to add and stack physical precious metal. 2016 looms as a volatile and uncertain year. The news later today will only serve to raise the stakes.


About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 16, 2015 - 10:22am


first finally again today

Dec 16, 2015 - 10:25am

lol @ Janet

Before the rate hike:

after the rate hike:

Dec 16, 2015 - 10:35am
Dec 16, 2015 - 10:41am


I listened to DS' presentation on Monday night and he is the most vitriolic bear I have ever heard in 38 years in this business. The major problem lies in the following statement: "NEVER underestimate the replacement value of stocks within an inflationary spiral". If this rate hike pushes those reserves into the lending arena, money velocity will accelerate by way of added lending and subsequent transactional activity. If this Zimbabwe-esque scenario plays out, that gargantuan $4.5 trillion of printed money sitting in excess reserves will cause an inflationary firestorm the likes of which will propel stock values into the ionosphere. The charts will be rendered meaningless as cash is jettisoned in favour of anything "non-cash" and short positions/put options will wind up worthless. In contrast, heard assets like gold and silver and the outrageously-undervalued gold and silver miners will soar as a replacement for deteriorating purchasing power of cash.

Furthermore, despite the recent rally, sentiment amongst the pro's is black-bearish and the COT for the S&P E-Mini contract shows that the Commercials are massively short.

Whether or not to short this move is a tough call so I am waiting it out on the sidelines simply long gold and the miners based on valuation.

Sherpa Bill
Dec 16, 2015 - 10:41am

Video Link

Hi Turd. Where is the link to the September 16 video? Don't see it in this post. Too much coffee will do strange things. I hope that you have a seat belt on the TFMR studio swivel chair today.

indiana rod
Dec 16, 2015 - 10:42am

Little Janet Yellen

Little Jack Horner

Sat in a corner

Eating his Christmas pie;

He put in his thumb

And pulled out a plum

And said, "What a good boy am I."

Little Janet Yellen

Sat in a corner

Looking up at the sky;

She said, with a straight face

Our rate we must retrace

And said, "What a good girl am I."

Dec 16, 2015 - 10:44am

Today's charts

In gold, for a breakout and bottom, the key level remains the area between $1080 and $1090. Should gold push through there, stout resistance will be found at $1105 and then the 50-day moving average, currently near $1110. If you want to get excited about a year end rally that extends into January, you need a close above those levels.

In silver, we were worried earlier this week that the breakdown through foreshadowed a pre-fedline drop toward . Thankfully, for our collective sanity, that did NOT happen and I have a last of .15 instead.

The key level to gain and hold remains .40 and, above there, silver can begin a move toward the 50-day MA near .90.

Sherpa Bill
Dec 16, 2015 - 10:45am

Try reloading the page

Hopefully some of the software updates we're installing will help things run more smoothly.

Dec 16, 2015 - 10:54am

The last time...

Last October 28, metals spiked upward just before the FOMC announcement and then viciously reversed leading into a two week smackdown. They were suckering in the longs...

So I am wary of this nice spike this morning.

Dec 16, 2015 - 10:55am

I'm wary too

We've been burned so many times...

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