Wrapping Up

364
Sat, Jul 21, 2012 - 12:23pm

The Turd is wrapping up his relaxation extravaganza this weekend and he'll be back at his post bright and early on Monday. Until then, here's some stuff for the weekend.

First of all, some charts. Let's start with the metals. Both have flat-lined, which is interesting because a flat-line usually precedes some type of dramatic move, either up or down. We see this sometimes on the short-term charts. We rarely see this play out over days on the hourly charts but here we are. My personal feeling is that we are very close to a significant break OUT and UP. We'll go into more detail on this on Monday.

And you should probably listen to this:

EXCLUSIVE- Bill Murphy's London Source: "Big Gold & Silver Moves Coming in August"

And the grains are, quite literally, ON FIRE. Though they are susceptible to a sharp pullback here, the forecast isn't getting any better. And it's still July. Yikes. Here's the latest forecast for Kansas City, Missouri. Right in the middle of corn and soybean country.

And here are your weekly charts showing new all-time highs in both corn and beans. The DAG, which we first discussed here a few weeks ago near $9, is closing in on $15, too.

The latest CoT was kind of a bummer. For the reporting week, gold rose $9 and silver rose 44c. In the face of that, The Gold Cartel added over 6000 new net shorts and The Evil Empire added just over 1000 new net short in silver. Not a disaster but not real encouraging, either. The only positive in the report is in the LargeSpecShortSheep category for silver where the LSSS added another 1,123 gross shorts. This brings their total up to over 20,000 at 20,775 and lowers the LargeSpec net long ratio to just 1.37:1. Again, for perspective, on 4/5/11, the LargeSpec net long ratio was 4.04:1 based upon 48,890 longs and just 12,105 shorts.

Three items of reading material for you. First, this interesting piece from John Aziz. It's worth considering. https://azizonomics.com/2012/07/21/why-is-the-fed-not-printing-like-crazy/

Next, Detlev Schlichter has written another excellent article: https://papermoneycollapse.com/2012/07/happy-interventionists-the-economists-attack-on-your-property/

And, finally, some interesting perspective from KWN's "London Trader". Note that there are no price targets or forecasts. Just a simple and concise analysis of demand fundamentals. https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/20_London_Trader_-_The_LBMA_Gold_Price_Fixing_Scheme_Is_Over.html

OK, that's all for now. I hope everyone has a safe and relaxing weekend and I look forward to getting back to "business as usual" on Monday.

TF

p.s. When I return, I expect the "Main St" thread comments to return to "normal", too. Main Street is where we discuss the metals, the economy and issues dealing with the end of The Great Keynesian Experiment. It is not the place for subjects like Zionist conspiracies and Chemtrails. All are certainly welcome to discuss those items here but it needs to be done in the forums. https://www.tfmetalsreport.com/forums/conspiracy-theories. Thank you in advance for your cooperation.

About the Author

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  364 Comments

The man who stole a leopard
Jul 21, 2012 - 4:12pm

Just saw Dark Knight

Some funny lines the movie...

<After bad guy Bane shoots up the stock exchange and takes everyone hostage>

TRADER: There is no money here! There's nothing to steal!

BANE: Then why are you here?

SRSrocco
Jul 21, 2012 - 4:16pm

REPLY & CORRECTION....

PHYSICAL_ONLY... yes the best thing to do is average in. I starting buying silver back in 2002 at $4.52 an ounce. Even though that price is now almost 6 times higher than what I paid, I see the price of silver north of $100 easy.

CORRECTION... in my previous post it should have been this:

1997-2011 Total World Gold Production = 1,328 million oz

not the 132.8 million ( I was off one decimal point)

agrock
Jul 21, 2012 - 4:50pm

miners

I mainly hold physical and a little fiat in some of PHSY and PSLV sort of looking to spread out a little into some miners.... I've looked at a lot of tickers but not sure what miners are better than others.

Can anyone recommend any good strong solid miners to research (not looking to flip trades but to hold long term)?

Disclaimer: Not seeking trading advice but a general direction to research with due diligence

Stackable
Jul 21, 2012 - 4:52pm
Dagney Taggart
Jul 21, 2012 - 5:03pm

@Cononish

Silver production in Khazaristan is fascinating. So is the use of occult symbolism around the widely unknown capital, A-satan:

ASTANA THE NEW CAPITAL FOR THE NEW WORLD ORDER

FYI: Condi Rice is an expert on Kazakhstan, made known from her time since she was with Exxon Mobil.

All bullish for silver.

dnlward Beez
Jul 21, 2012 - 5:22pm

Only 10%?

Beez: Since it's hard to find any source that says less than ~45% of Americans own stock, I'll just throw out the rest of that local radio baby with the bathwater.

And Daystar:

I can't find any proven record from GATA's London Trader. Throw me a link please to all of 'his' successful predictions.

And finally, it sure seems like a lot of crap gets hat-tipped around here for reasons I cannot discern. To that reasoning, please do not hat-tip this post. I'm interested how many HT without reading.

murphy
Jul 21, 2012 - 5:30pm

Adrock

Check out Eric and Sheeples mining forums

¤
Jul 21, 2012 - 5:36pm

Hey Man...

Video unavailable

Jul 21, 2012 - 5:39pm

Krugman attacks Estonia, Estonia bites back:

Interesting article, with a mention of Latvia (!), called Krugmenistan vs Estonia. And with a literary segue too:

After college, Ilves went to grad school for psychology until he read Thomas Pynchon’s Gravity’s Rainbow. He wasn’t sure what he wanted to do after finishing the book, but he knew he was done with grad school.

https://www.businessweek.com/articles/2012-07-19/krugmenistan-vs-dot-est...

Btw, I have read a Short History of Ukranian Tractors, and Gravity's Rainbow. I cannot pretend to have understood the latter.

I Run Bartertown
Jul 21, 2012 - 6:23pm

Bad Boys (Unless you're a hungry Greek)

"Greece has a corrupt political system. Those political parties elected to parliament can legally use public funds to finance their own operations and campaigns. In 2012, at a time when the country was in deep fiscal distress and people were starving on the streets, the ruling parties allotted around 15 Euros per voter to each party with seats in Parliament, amounting to tens of millions in payouts.... Despite this fact, the two major parties PASOK and ND are together almost 250 million euros in debt. This was one item in a long list of fiscal grievances which led PASOK and ND to lose much of their support in the May and June elections of this year to a number of newer, smaller parties on both the right and the left. One of these parties was the hardline Greek nationalist party Golden Dawn, which received just under 7% of the vote in both elections. The Golden Dawn wants Greece to remain Greek and has called for ethnically-based citizenship and the deportation of all immigrants. They have also vowed to fight governmental corruption, and as part of this have called for the end of state funding for political parties, saying in a party statement, “It is unacceptable for political parties to receive millions of euros when people are destitute.”8 Until that time, the Golden Dawn has announced that it will use its state funds to run programs which directly benefit the Greek people, such as soup kitchens andmedical aid, as a way to “‘return’ the Greek people the money they gave [Golden Dawn] with their vote.”9 These programs are only open to ethnic Greeks; immigrants are excluded. Even a liberal reporter had to admit that, “[the Golden Dawn's] actions should be acknowledged as a slap in the face of the established political world and particularly those claiming to be on the side of the poor and unemployed.”

https://faithandheritage.com/2012/07/minority-ebt-cards-vs-golden-dawn-soup-kitchens/

I know, I know, one of them slapped a commie lady on TV, and you're not supposed to do that. Ted Kennedy drowned one and was able to move on with life.

Good for them. And even better for the sick and hungry they help.

ivars
Jul 21, 2012 - 6:43pm

Krugman has no idea what and

Krugman has no idea what and how went on in reality, neither in Estonia, nor Latvia, after housing bubble was multiplied by crisis exported from the USA . E.g in Latvia, the total drop in GDP was 24%. But, as at least 15% of that came from bubble pushed by Nordic banks. I would have preferred devaluation in Latvia if the banks paid for it too. They engaged into predatory lending into countries where people did not even know what taking debt means, as in Soviet Union getting loan was difficult and rare, since loan then would come from the state, but in Soviet Union it was the government only that routinely forced long term bonds on population and then devaluated the currency in the middle, like in 1961, when 1 decimal point was removed from rouble, so the value of those bonds went down 10 times.

But suffice to say, without govt debt, Estonia is well prepared for the next wave of crisis, coming soon. The biggest risk still is and remains Russia's growing imperial ambitions in the time of weakening West.

Our countries have always historically been small change money between Russia and Germany. Wonder whom did we prefer, even if both were bloodsuckers?

LaMachinna
Jul 21, 2012 - 6:46pm
I Run Bartertown
Jul 21, 2012 - 6:55pm

Ivars

I was in Romania during the change from 'old Lei' to 'new Lei'.

1:10,000, both in circulation, similar looking

It was strange, and I can say now that I didn't understand all of the implications and causes. But I may have tipped a waitress enough to retire.

ivars
Jul 21, 2012 - 7:03pm

I Run Bartertown

The final devaluation of ruble, which took place already after regaining of independence, in 1993, reduced my relatives Soviet ruble debt in ratio 200:1.

In 1990, I went to Sweden to work as a cleaner for 2 months. My friend took all 2 month salary -living expenses back to Latvia (around 3000 USD), and bought a 1600 m2 land with a small house on it in Riga, the capital, in a place which is now over the street from the USA embassy. Dangerous place (think of all terrorists driving loaded trucks around) , but he does not live any more there. The value of the plot during housing bubble peak in 2007 was 200 000 USD, and it was very liquid.

Basically, in 1990, I made my monthly salary in Latvia every day I worked as a cleaner in Sweden. So in 2 months 40 month salary. If only we knew better than where to invest. I bought a car and successfully crashed it into oblivion within 2 years. Old car then cost half of what the land plot I mentioned did.

So, Your tip might have helped the lady a lot.

QE to infinity
Jul 21, 2012 - 7:03pm

@Ivars

Ivars, how is the economic situation in Latvia now? A couple of years ago people seemed to be getting out in droves (those who hadn't gotten out earlier :)), has it got better?

pbfurn
Jul 21, 2012 - 7:04pm

Miners @ adrock

I own each of these---all at underwater prices. You may wish to consider @ lower prices than currently trading as I believe general Market will tank this fall. However I think PM miners will be first to recover. But then again, if I am so smart, what am I doing here trying to learn. Good luck and good fortune!

Eldorado Gold Franco Nevada Endeavor Silver First Majestic Alexco Almaden

dudestacker
Jul 21, 2012 - 7:05pm

Take out your false teeth mama

I wanna suck on your gums. (J Geils)

It's the weekend-forget about the drought and heat for just a while.

Breaking new ground here, can't ever remember a J Geils vid here let alone a 3 Stooges one.

Buy the damn tractor!

The Three Stooges in ,"Whammer Jammer".
ivars
Jul 21, 2012 - 7:09pm

QE to infinity

About 100 000 ( 5% of population) have left and last year sent back home about 1/10th of state budget via official ways.

It is still tough compared with 2007, but if you have a job/business, things are improving slowly-export driven as internal devaluation was done, more severe than in Estonia. Last 12 month growth is around 6 %, inflation 4%. Nobody takes or gives loans any more, practically. Deleveraging by all who can afford it.

QE to infinity
Jul 21, 2012 - 7:14pm

Miners @ adrock

Casey Research recommend four miners as the safest bet: Frano Nevada, Yamana, Eldorado, First Majestic.

They also recommend Endeavor Silver, Silvercorp, Goldcorp, Royal Gold, Randgold, Alamos Gold, Agnico Eagle, Newmont. That's all large and mid-tier producers, don't know about their recommendation on juniors.

QE to infinity
Jul 21, 2012 - 7:17pm

Ivars

Glad it's getting better, even if slowly. Growth rate above inflation - that's good.

pbfurn
Jul 21, 2012 - 7:24pm
FleetFeet
Jul 21, 2012 - 7:50pm

Video de crapola

Talking fast with a tense voice, using Hollywood "dramatic" music, wiping the screen with color splashes -- all trying to excite the viewer/listener, instill fear and confusion rather than present facts and rational thought.

That kind of crap does not help anyone. Doesn't belong on ZH, nor on TFMR.

Bohemian ivars
Jul 21, 2012 - 7:56pm

@ivar

"They engaged into predatory lending into countries where people did not even know what taking debt means, as in Soviet Union getting loan was difficult and rare...."

Sure. However, the "push" didn't come just from the Nordic banks, but from banks in Austria and Switzerland too, pushing mortgages in Swiss Franks. They were using the carry trade, getting cheap money from Japan and USA and selling their expensive mortgages in the Central and Eastern Europe. They didn't explain to customers that there is a currency exchange risk. They told them that Swiss Frank is GOOD currency and that's why these mortgages are GOOD. As you know, Hungary is bankrupt, thanks to these mortgages too. Look at this advertising in Hungarian TV, produced by the Raiffeisen bank, Austria, selling a mortgage to customers in Hungary. The bank representative is clearly saying, that the bank doesn't care how much money the customers have, how much they make, what is their salary, because the only important thing is -- they will finance their apartment in 10 days. Nothing else matters.

Raiffeisen Bank TV-Ad: Easy (sub-prime) loans in Hungary, 2007

It's unbelievable that they have the guts to say, that the U.S. exported this bullshit to the EU.

El Gordo
Jul 21, 2012 - 8:50pm
SRSrocco
Jul 21, 2012 - 8:52pm

REPLY...MINERS

PRECIOUS METAL MINERS NOT PREPARED FOR THE FUTURE

Casey Research does a pretty good job in their analysis. However, there may be a few items they may be overlooking. It is ironic that you mentioned FIRST MAJESTIC. I am doing a comparison between a silver miner from the 1880-1900 period and First Majestic.

It is simply amazing just how much more energy goes into mining silver today. Because CEO's and most mining analysts focus on short term perspectives (less than say 5 years), they fail to realize just how much ore grades are falling... even from just a few years ago.

I also believe the mining of SILVER will be in more jeopardy than GOLD in the next 3-5 years. This is why silver will be more valuable in percentage than gold. Primary silver miners will be safer investments than large by-product base metal mines (that will be coming online in the next several years).

OPEN PIT MINING devours a great deal of liquid fuel compared to UNDERGROUND MINING. From the estimates I have seen its nearly 4 times the fuel. On the other hand, underground mining does consume more electric energy than does open pit.

Regardless... in the future, it will take much more detailed analysis to figure what mining companies and what kind of mines will be more profitable -- thus more successful.

QE to infinity SRSrocco
Jul 21, 2012 - 9:16pm

@SRSrocco

Do the miners have a choice between open pit and underground mining, or does it depend on conditions of deposits? Sorry if it seems obvious to you, I am just trying to get my head around all this.

Regarding First Majestic, Casey Research are ecstatic about it, they used to recommend Silver Wheaton but now changed that to "hold" because SW is being tax audited.

Torpedo Fish
Jul 21, 2012 - 9:17pm

Situation in Latvia

Actually Latvia has lost more than 100,000 workers, the real number is more like 300,000 or even 400,000 nobody knows the real number, 100,000 is the official one. We are turning into a country of pensioners.

Baltic boom busts as mass unemployment spurs brain drain

There is no real growth here, the only way we are getting those numbers good looking is by clear cutting our forests and selling euro bonds.

People & Power - Latvia's pulp fiction

Starting business here is almost impossible because of high (almost Russian style corruption) and lots of idiotic regulations from local government and Brussels. Also EURO peg is a killer for our local producers, that's why we don't produce anything except real bread which is impossible to buy anywhere else in the world. Everything else is imported even potatoes an carrots - from Poland, France and Italy, THIS IS F..KING crazy. At the same time our farmers are struggling to survive because they don't receive subsidies which other European farmers have.

Most folks like myself work in black market, we don't pay taxes and hate our government for making life of people miserable here. According to our government we have overcame the crisis and everything is great. They don't care about hospitals and schools closing and folks dying on the streets at winter time.

Torpedo Fish
Jul 21, 2012 - 9:37pm

@El Gordo

Why colloidal silver ? Try MMS/CDS it's much better. Colloidal silver is really great for treating eye infections, MMS is too aggressive for that.

Straight Talk on MMS - Guest: Andreas Kalcker
Louie
Jul 21, 2012 - 10:19pm

ZH Video- Deflation

I don’t see the US sliding into deflation, as much as I see us sliding into a government controlled command economy. GM is now owned by the government. We are on the path of having our entire health care system controlled by the government. All those baby boomers, now receive their monthly suckle from the government. All those on food stamps and disability are controlled by the government. When the student loan crisis hits, that will be taken over by the government. When farms fail this fall and winter because of the drought an lack of hedging (Thanks MF Global!), the government will be there to take control. Our president has openly stated that small business owners didn’t do it by themselves, implying that they are partly owned by society (the government).

When the government controls your food production, your manufacturing, and your health care, what else is there to control? I can’t think of any government controlled command economy that has not experienced massive inflation. It is just too easy to solve any problem by printing more money and handing it out. We may have to trade our PMs on the black markets, but they are one of the few assets that can make the transition to the “new economy”.

Hold on to your PMs.

Capt. Willard SRSrocco
Jul 21, 2012 - 10:21pm

@SRS Re: Miners Open Pit vs. Underground

Also, the operative and especially the capital costs to establish the infrastructure to go underground, setting up proper ventilation, hoisting systems, road heading operations to get to the ore are significant.

Citation from: Introductory Mining Engineering, Howard L Hartman 2002, p. 512 ff.

"Surface versus Underground

The choice between a surface or an underground mining method is another important decision in many mine development scenarios. In some cases, the deposit is so shallow that only a surface method need be considered. In others, the deposit is so deep that only an underground method would be chosen. It is, however, important to consider the choice that can or should be made for a deposit that is of modest depth, amenable to either surface or underground mining methods. In this case, the mine may be developed as a surface mine, an underground mine, or a mine that is initiated as a surface mine and continued as an underground mine.

Normally, we would assume that underground mining costs exceed surface mining costs for any deposit close to the surface. Hedberg (1981) cites reasons for the cost-effectiveness of surface mining, based on hypothetical deposits in the hard-rock industry: larger equipment, lower capital intensity, simpler development, higher energy efficiency, less expensive auxiliary operations, and better health and safety factors. His analysis of operating costs, capital costs, and overall costs was performed on a unit operations basis. The comparison shows that material and supply costs for underground mines are 50% more than those of surface mining, and that labor costs are five times higher.

Rule of thump:

1.

In a buried horizontal deposit, the deposit is normally optimally mined with either a surface method or an underground method, but not both.

2.

For a steeply dipping vein or massive deposit that outcrops on the surface and extends to depth, the optimum strategy is often to mine first using surface methods, then switch to an underground method.

3.

The point at which surface mining should be switched to underground mining is normally achieved when the surface mining cost reaches the underground mining cost, if ore production rates do not change at that point.

4.

If ore production changes upon the switch from surface to underground mining, the switch point must be obtained by maximizing the net present value (NPV) of the profit of the deposit.

(Note to students: The net present value, often abbreviated NPV, is a term representing the value of all income amounts, each discounted back to the present, minus the value of all annual costs, each of which is also discounted back to the present. The NPV thus tells the current value of all the potential costs and benefits accruing from an investment.)

Social and environmental considerations may also affect the decision to choose an underground mine in preference to a surface operation. With environmental problems causing higher costs for reclamation and public relations problems as well, many mining companies are now choosing underground operations in coal, aggregates, and certain minerals to reduce the public outcry and gain acceptance for their mineral operations. In this case, the reduced costs of surface mining may not be sufficient to overcome the social costs conducting the operation on the surface. This appears to be a trend that will increase in the future."

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