What Hath Mother Wrought?

Thu, Dec 17, 2015 - 10:52am

Keynes, himself, is credited with line line "the market can stay irrational longer than you can stay solvent". Boy, isn't that the case today as the metals react as if yesterday's Fed rate hike was somehow surprising or unexpected.

We led off yesterday's podcast note by admitting that we had no idea of what to expect today...and we certainly didn't expect this!

Ridiculous! Again, it's as if no one saw this coming! Hasn't the Fed been telegraphing this since October 28? Wasn't the certainty of this rate hike the reason gold was smashed from $1180 to $1050 in the five weeks that followed? Didn't all of the Spec selling and shorting already drive the gold CoT structure to historic levels? And yet, here we are...gold is down $29 as I type at $1048. Well, whatever. Not much I can do about it except try to remain rational...if not solvent.

Here's a chart that I first published two weeks ago when gold last sunk to these levels. Are we finally seeing the washout that drops price to that 1035-1045 level? I guess we are, though we still haven't made a new low below what was seen on Dec 3 at $1045.40.

All I know is that it's a shame there isn't a CoT survey today as I would love to have seen the results if there was. The amount of old Spec long liquidation and new Spec shorting has to be overwhelming. How else could price be down 3%? Are we back to where we were on Dec 2, when we speculated that the CoT actually went Commercial net long? Probably! Perhaps even more so. (Is that the foot long? And then some!)

<...Sorry. Gotta throw those references in there to help me keep my sanity...>

Does it matter that The Specs are likely NET SHORT and The Commercials are NET LONG as I type? I think so. Does it matter that price is near what we anticipated as a bottom and have discussed for weeks? I think so? Does it matter that sentiment is terrible and now virtually everyone thinks that gold is going lower, lower, lower? I think so. And, so, I still expect a gradual rally into year end, an extended rally in January and a positive year in 2016 that breaks the 3-year losing streak.

In the end...since my stack of gold and silver is just as shiny as yesterday...my only frustration today is that I haven't gotten the hoped for opportunity to short the S&P. It hasn't been up so far today and it certainly hasn't approached the 2090 level where I would look to get short. So, I have nothing. And the S&P is down 12 points as I type at 2061. Nuts.

The miners are getting the snot kicked out of them today but, so far, the HUI remains above that critical 105 level.

The long end of the yield curve is rallying with the 10-yr down 3 bps to 2.26% and the 30-yr down 4 to 2.97%. With Mother's 2-yr at straight up 1.00%, this further flattens the 2-10 yield curve to just 1.26% or 126 basis points. And the "economic news"...which obviously doesn't make the slightest bit of difference to anyone...continues to be all bad.

Some analysis of yesterday's "news" from Denver Dave and his pal PCR:

And besides the metals, crude is smashing toward new lows, too. Again, if we see $33-34, I might consider taking a grab at "the knife". I'll let you know.

So, that's all I have for now. I still own my UGL calls which expire in four weeks and I still own my Feb16 gold call which expires at the end of January...though all of them are worth considerably less than yesterday. angry Let's just see how the "market" reacts once today is over and we head into year end with all of the trade loaded onto the short side of the boat. For now, just try to keep your sanity while staying focused upon why you hold precious metal in the first place.


About the Author

turd [at] tfmetalsreport [dot] com ()


CPE · Dec 17, 2015 - 10:54am



matt_ · Dec 17, 2015 - 10:54am
· Dec 17, 2015 - 10:55am

More so than gold and silver,

More so than gold and silver, it's the stock market that's pissing me off today as I never got the chance to get short and now the S&P is down 20 points.


nadgeskaul · Dec 17, 2015 - 11:04am


Hey Turd, are you dumping your miners yet?

Welcome to the bloodbath. Nice and warm, ain't it?

infometron · Dec 17, 2015 - 11:04am

@Turd Re: Shorting the S&P

There is still a mighty long way for it to (potentially) drop...

Mr. Fix · Dec 17, 2015 - 11:11am

Same as it ever was

There sure is a lot going on behind the scenes, but on the surface, it's all more of the same.

The manipulation hasn't ended, but the damage it's causing has increased.

The death of the dollar is accelerating.

As we say, keep stacking.

I'm taking a ride to my local coin shop, it looks like a good day to stack. cheeky

freemarkettrader TF · Dec 17, 2015 - 11:15am

@TF - History of gold and silver in this bear market

I think you are spot on saying that the COT/sentiment/fundamentals (not that they matter) all point to a sizeable rally in the metals and miners. That being said, if you look at what gold and silver have done every December since the concerted effort in fall of 2011 was put on to smash the metals they have not really put on a good rally until after the new year started. 2013 was a minor exception, but one can definitely say that December sees a seasonal bottom.

I think we see $1035 (maybe even slightly lower to freak everyone out), and perhaps the last week or so of December we get a rally up to $1060, but I think that the cartel wants to have gold be down double digits this year so that everyone at the end of the year says, stocks were up slightly and gold was down double digits. Just like last year, when gold was capped despite good COTs and terrible sentiment so that the pundits could say gold was down on the year.

infometron · Dec 17, 2015 - 11:21am

Don' even think abaou tit...


catching the falling knife, that is... imho

I think there's a lot more pain to come... kinda like when Au broke $1500, eh?

joeblack · Dec 17, 2015 - 11:22am

The Cartel's first job is to paint the charts...

....making money is secondary.

I don't think they want a rally until the calendar flips. 

canary · Dec 17, 2015 - 11:22am

@Keg...I think so

The purpose of this smash is to keep gold and silver down for the year-end.

Texas Sandman · Dec 17, 2015 - 11:23am

Flying blind into the storm...

Just pulled down another 4 aussie gold kangaroos this morning. I am betting the swaps won't kick themselves in the shins for too much longer...

· Dec 17, 2015 - 11:23am

Forgot to add

For those keeping score at home...

Another 183 Dec15 gold "deliveries" yesterday with JPM House stopping each and every last one of them and 181 being issued again by HSBC and The Scoshe.

The House (proprietary) account of JPM has now stopped 910 of 944 total deliveries this month for 96.4%.

nadgeskaul · Dec 17, 2015 - 11:25am

Not dumping miners

Until/unless the HUI closes decisively below 105. I'll let you know.

Markedtofuture · Dec 17, 2015 - 11:25am

Failing to support his charge against GATA, financial letter

Failing to support his charge against GATA, financial letter writer changes subject

Submitted by cpowell on Thu, 2015-12-17 13:54. Section: Daily Dispatches

9a ET Thursday, December 17, 2015

Dear Friend of GATA and Gold:

Financial letter writer Avi Gilburt today offers a rebuttal to your secretary/treasurer's response Tuesday (https://www.gata.org/node/16034) to his charge Monday (https://www.kitco.com/commentaries/2015-12-14/Confessions-of-a-Gold-Analy...) that GATA has taken out of context its documentation of largely surreptitious intervention in the gold market by central banks.

Rather than defend his charge by reviewing any of the supposedly misconstrued documents, which would require a little effort, Gilburt changes the subject and himself misconstrues GATA in several respects:

-- Gilburt criticizes GATA for not being an investment adviser when your secretary/treasurer, rebutting him, proclaimed that GATA is not an investment adviser but an organization advocating free, transparent, and fair markets.

-- Gilburt says GATA is mistaken to assert that fundamentals should control markets. But GATA has not asserted that. While fundamentals often do control markets, as when a commodity is exhausted and higher prices are necessary to spur supply, of course there may be other factors. GATA strives to identify another factor in the gold market, intervention by central banks.

-- Gilburt charges that GATA maintains that there is no manipulation of the gold market when gold prices are rising. This charge discloses that Gilburt really pays no attention at all to what GATA says. As recently as Monday your secretary/treasurer again called attention to a study speculating that central banks mean to push the gold price way up eventually to help monetize assets and devalue debt:


canary · Dec 17, 2015 - 11:29am

Spot the difference

My trading desk.....and Goldman's floor.....................................Do I still have a chance?

gldslv freemarkettrader · Dec 17, 2015 - 11:31am

fremarkettrader: Perception is their only interest

It looks like they have accomplished the objective of destroying the concept of gold or silver as money in USAA, Europe, Japan, South America. They basically pulled it off... . How do you dislodge the fiat money mindset from the masses if after generations of no discussions on gold the mystery of why gold is real money dies? We are down to simple hyperinflation and NIRP as the only reasons to abandon the system and you'll be eating dog food, told its steak and the serfs next to you won't know any different..

Back to rooting for a reset and a wake up call to the Sh*t dollar.

Bohemian · Dec 17, 2015 - 11:38am

JM Bullion

100 oz RCM Silver Bar (New) Any Qty Available for Only $0.65/oz Over Spot!

I think, I might buy one, today or tomorrow. Currently, it is $1,445.00

Verus nemo · Dec 17, 2015 - 11:51am

Man, tomorrow's $1.1T options expiry is going to be

something to behold, I think! Policy error? Yeah, I think so.

Yesterday's strength in the metals market was odd, I thought, but today's weakness (mostly due to the USD$ strength?) is pretty much in line with what I was expecting. I'm soon on my way to a store locally where I can exchange pretty pieces of cotton for real money again.

Is anyone else watching those implied lease rates on gold and silver that are published on the sharelynx.com website here?


I've got mine set to six months so I can better see what's going on each day. They seem to me to be mimicking what Craig is reporting from the COT reports and the occasional GOFO report from London, i.e., that gold is increasingly tight and the commercials are increasingly less net short and more long but that the silver COT still has a ways to go before suggesting a rally.

I don't know but it looks more and more like the world has every reason to abandon our fraudulent WRC and try their best to extricate themselves as best they can from it. We're heading here into a flat yield-curve deflationary depression but exporting our inflation everywhere else with reckless abandon. How much longer can we expect the ROW to put up with our hubris? Those USD denominated carry trades must be a nightmare to unwind.

I always thought that we'd see our USD$ depreciate into the toilet but am increasingly seeing Jim Willie's assertion that our USD$ would just rise, rise, rise and then disappear as the ROW abandons it. BTW, others earlier pleaded for more Jackass over the Christmas break; personally, I've had enough. There is rarely anything new added by Jim each time and I'm weary of the abundant arrogance displayed each time he emphasizes how moronic the MORONS are. Good grief. I'm tired of the schoolyard name-calling that accomplishes nothing. How about trying to attract someone of Jim Grant's caliber to an A2A soon?

Keg (I believe it was), earlier today wrote about expected weakness continuing into year-end so that YTD numbers would look awful. Keg: do you mean more awful than the YTD -11.4% in Au and -12.9% in Ag? The USD$ is up YTD nearly 8%, how much more of a contrast do you imagine is needed to scare the investing public off from the true remedy to this nonsense? winkI too have typically waited until late December to buy physical and take advantage of that weakness but I'm not waiting this year. Perhaps the paper price will be lower, significantly even, but I've noticed that the price I have to pay locally isn't declining much with each drop. I recognize that I could acquire it cheaper online but I've chosen in recent years to quietly and discretely add where I can locally, exchanging trash/cash/fiatscoes for the real thing.

I too miss Pining-for-the-Fjords; where is he? And Mickey...I am increasingly coming to appreciate the wisdom shown in your posts, Sir. Thank you!

CPE · Dec 17, 2015 - 11:52am

This one's for you Libero


A Majority Of Americans Oppose "Assault Weapons Ban" – Highest Number On Record

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

The person who bothers me the most on this entire topic is Mayor Michael Bloomberg, of my hometown NYC. You can tell when someone is disingenuous if they freak out over gun violence like it is the biggest issue in America today and at the same time protect the banksters and their “too big to fail” culture, which has and continues to systemically steal trillions of dollars from the poor. This is Michael Bloomberg to a tee, so this man should have no credibility on any moral subject when he protects and coddles the most dangerous criminal organizations on this planet. I guess there is something “liberal” about white collar crime.

The other way to spot a hypocrite is to see whether they ever speak out about other acts of violence, or if they only open their mouths when it comes to gun incidents. I see this attitude all over the “fake left” landscape. If someone you know, or someone in the media never decries American drones strikes that kill children regularly in the forgotten parts of the globe, yet jumps at every gun incident like it is the end of the world, that person has an agenda. That person hates guns, not necessarily violence. They do not have a clear head in this argument.

– From the post: How to Spot a Hypocrite in the Gun Debate and Other Reflections on Newtown

U.S. President Barack Obama is not just the world’s best gun salesman, he’s also the world’s worst gun control spokesperson.

Despite immediately politicizing every single shooting event in recent years by using his bully pulpit to lecture the American public on why citizens must give up their rights to feel safe, his message has fallen on deaf ears. Why?

Mainly because a man who consistently orders drone strikes on women and children all over the world, intentionally bombs a Doctors Without Borders hospital into oblivion, and who launched more shady wars across the globe than George W. Bush, doesn’t exactly hold much credibility as a humanitarian pacifist looking to “save the children.”

Beyond this obvious hypocrisy, his gun control “sales pitch” is generally void of any logic whatsoever. For the perfect example, read the post: How Obama is Using the Grossly Unconstitutional “No Fly List” to Push Gun Control.

Meanwhile, countless Americans have no doubt watched the following video, in which the White House Press Secretary stumbles and stutters in a embarrassing attempt to answer a reporter’s simple questions on the potential effectiveness of Obama’s “common sense” gun control measures.

White House Can't Give Answers to Gun Questions

Put all of this together, and you get the following. From ABC News:

A majority of Americans oppose banning assault weapons for the first time in more than 20 years of ABC News/Washington Post polls, with the public expressing vast doubt that the authorities can prevent “lone wolf” terrorist attacks and a substantial sense that armed citizens can help.

Just 45 percent in this national survey favor an assault weapons ban, down 11 percentage points from an ABC/Post poll in 2013 and down from a peak of 80 percent in 1994. Fifty-three percent oppose such a ban, the most on record.

To see just how dramatically public perception has changed, take a look at this chart:

Screen Shot 2015-12-16 at 10.16.54 AM

Indeed, while the division is a close one, Americans by 47-42 percent think that encouraging more people to carry guns legally is a better response to terrorism than enacting stricter gun control laws. Divisions across groups are vast, underscoring the nation’s gulf on gun issues.

There’s lopsided agreement on another concern: Just 22 percent express confidence in the government’s ability to prevent lone-wolf terrorist attacks, with 77 percent skeptical about it. Confidence in the government’s ability to stop a large-scale organized terrorist attack is much higher, albeit still well short of a majority -– 43 percent.

The results of this survey, produced for ABC by Langer Research Associates, point to a shift away from the position favored by Barack Obama and others who responded to the recent attack in San Bernadino, California, by calling for stricter gun control measures. Notably, in a statistical analysis, Obama’s overall job approval rating is the single strongest factor in views on an assault weapons ban.

The increase in opposition to banning assault weapons since 2013 peaks in some groups -– up 18 points among strong conservatives, 17 points among higher-income earners and 16 points in the generally more liberal Northeast. But it’s a broadly based trend. Many groups have moved from majority support for an assault weapons ban two years ago to majority opposition now: whites, 30- to 64-year-olds, suburbanites, political independents, moderates, residents of the West and Midwest, anyone without a post-graduate degree and those in $100,000-plus households.

No wonder he’s attempting to push gun control via executive action. Before trying to “spread democracy around the world,” I think Obama should take a long hard look in the mirror.

CPE · Dec 17, 2015 - 11:59am

Sell the rumor, sell the news

I have a free bridge in Brooklyn to give anyone that believes this story was anything but MOPE


CPE · Dec 17, 2015 - 12:02pm

People all over the World are PISSED!

Still don't understand the Trump phenomena?

17year old, probably unemployed, youth in Spain gives the Prime Minister a punch in the face:


Libero CPE · Dec 17, 2015 - 12:03pm

CPE- I'm glad to be in your thoughts

Merry Christmas to all Turdites. smiley

· Dec 17, 2015 - 12:06pm

Here you go

As we've been discussing...

Mother raises short rates yet global demand for long end through ECBQE, BoJQE and anyone seeking "yield" keeps driving the long end lower. This "flatenning of the yield curve" is almost always a precursor of recession. Therefore, unless MOther is hell-bent upon continually increasing subsidies to her banks (and she might be), the next move is back down to ZIRP and NIRP, not "normalization".


Bohemian · Dec 17, 2015 - 12:09pm

I just got that email too

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SS121 · Dec 17, 2015 - 12:10pm

-Warning- System's cloaking ability is failing.

i'm not a Trekkie(sp?) but i've seen enough episodes to throw together this analogy.

One of the weapons (functions?) of the system is it's cloaking ability. It controls the people with charts and media stories that are right out in the open, but as for what is really going on, they can't see it.

now it seems people are starting to see occasional glimpses of reality as the systems cloaking device flickers on and off in various areas. some quickly look away "no, that can't be" and are probably afraid to mention it out loud. maybe others have been seeing occasional flashes for some time now.

we've seen a big shift in the attitude of almost everyone that is hard to describe. it's like they have been burned so many times by the system failing to follow even it's own projected logic, that now their analysis of "markets" and such has been reduced down to a handful of universally applied sayings or nebulous unprovable 'boogie men' Like the cults who blame every occurrence on "the gods". All while the reality of the system becomes more and more obvious. whether in flashes, or specific areas or just the slow fading in of the giant ugly reality of the whole thing.

some folks are panicking, some are 'checking out', some double down on their belief that it's real and will keep tightening and intensifying their tunnel vision all the way to the last pixel of the last dying chart.

The natural Monetary force of Silver and Gold is a constant force. The system is crumbling under this extreme and increasing pressure of this force. the charts, the stories, the cloaking device, all failing.

Silver and Gold are returning to their monetary role. Where is this all taking place? behind the curtain? in the markets? Nope, in the hearts and minds of the people.

Keep Stacking, ....or maybe the more analogous - "May the Silver and Gold be with you" 

Barfly · Dec 17, 2015 - 12:11pm

A Rare Thursday Musing on the Zietgiest

So, I gave the rate hike one chance in three of being executed. Looks like I was wrong two times out of three. The only thing that I can conclude is that the Fed must have the control of the markets in such a non-skid covered vice grip that they can make the cost of money more expensive into a rising cost structure brought on by their own money printing without any fear of systemic collapse. The brainwashing of the sheeple (including the "investor" class) must be so deeply engrained that they are incapable of questioning their conditioning or thinking objectively. I feel this is evidenced by the testimony of the neighbor of the San Bernadino shooters who saw middle eastern looking men late at night in a garage packed with rifles and didn't want to report it for fear of being labeled an islamaphobe.


The evidence of a glut of commodities is everywhere, which means, by extension, that the consumption of commodities has slowed down. I'm not telling anyone hear what they don't already know. What to do with such a glut of material? I know, let's have a war?

The banks have an amazing amount of capital in the form of excess reserves sitting in the fed. This is in the face of a deflationary wave where all of those dollars are going to be worth more and more. To say that this is the opportunity of the century for them to buy up everything is an understatement. The inflation doesn't happen until after they've put all those dollars out there in the economy buying up all those productive assets, doubly screwing those who they bought them from (leaving them with greatly devalued paper). This is a sick, sick game and it is rigged in their favor. The stage is set. The game's afoot.

There are going to be two kinds of people after this is all over. Owners and serfs. I'm going to be on the right side of that trade.

Keep stacking. Buy every stupidly devalued ounce you can with every absurdly valued dollar you can come up with.

· Dec 17, 2015 - 12:16pm

Well, this is certainly interesting re 2016

Sort of along the lines of what The Jackass predicts, too: https://news.goldseek.com/GoldSeek/1450371024.php

CPE · Dec 17, 2015 - 12:25pm


Dude, conflating Star Trek and Star Wars can get you killed these days...

· Dec 17, 2015 - 12:27pm

Lost in the shuffle

A guy sent me this earlier today. Might be noteworthy.


"The reforms represent the biggest change in the Fund's governance since it was established after World War II, and are a recognition of the increasing role that emerging markets play in the global economy."

Joseph Warren · Dec 17, 2015 - 12:34pm

" The market can stay irrational longer than you can . .

stay solvent" --That's one of the few things Keynes got right.

This is the ultimate question for people in PMs, isn't it. Especially if you're retired. You know the fiat paper system is a criminal fraud. You know the stawks are manipulated in a bubble that's gonna crash. What cannot go on, will not go on. You know gold & silver's role throughout history.

But how long can you hang in there ?

Notice: If you do not see your new comment immediately, do not be alarmed. We are currently refreshing new comments approximately every 2 minutes to better manage performance while working on other issues. Thank you for your patience.

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Key Economic Events week of 12/10

12/11 8:30 ET Producer Price Index
12/12 8:30 ET Consumer Price Index
12/13 8:30 ET Import Price Index
12/14 8:30 ET Retail Sales
12/14 9:15 ET Industrial Prod. and Cap. Utilization
12/14 10:00 ET Business Inventories

Key Economic Events week of 11/26

11/27 9:00 ET Case-Schiller home prices
11/27 10:00 ET Consumer Confidence
11/28 8:30 ET Q3 GDP 2nd guess
11/28 10:00 ET New home sales
11/29 8:30 ET Personal Income and Spending
11/29 10:00 ET Pending home sales
11/29 2:00 ET November FOMC minutes

Key Economic Events week of 11/19

11/20 8:30 ET Housing Starts
11/21 8:30 ET Durable Goods
11/21 10:00 ET UMich Sentiment
11/21 10:00 ET LEIII
11/21 10:00 ET Existing Home Sales

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