Burning Down The House

Sat, Aug 25, 2012 - 3:36pm

We had an awesome week and the charts look great. More importantly, a fire has begun that will eventually consume the entire House of Lies.

At first glance yesterday, the CoT hit me like a punch to the gut. I was wrong about something and I hate being wrong. You see, as last week progressed, I became increasingly convinced that JPM's massive silver short position was coming under assault by the other "commercials". I likened this idea to a pack of hyenas sensing the weakness of the leader and turning upon him. Clearly the report, which shows positions as of last Tuesday, does not support this analogy.


Instead of attacking the leader, the pack chose to support the leader, instead. All of the buying in the 8/15-8/21 timeframe came from the specs, both large and small. All of the selling (to the tune of net short 9000+) came from The Forces of Darkness. The Evil Ones unloaded 4651 of their longs (10%) and added 4424 brand new shorts. (For those keeping score at home, that's about 22,000,000 ounces of paper "silver" created out of thin air.) Never fear, Captain Metaphor is here with a new one for you to consider.

The action last week is akin to the actions of an arrogant and drunk homeowner who foolishly built his castle along a tinderbox-dry ridge, confident that his homemade firewall would always protect him. Through the years, his house has stood firm against the elements and the homeowner has grown complacent and comfortable. Last week, the homeowner started down his usual path of preparing for the winter. He has once again begun to stockpile gasoline, liquid propane, kerosene and other accelerants. He places them within his house, confident that he can safely use and remove them at his leisure and blind to the danger a fire would present to his fiefdom.

What he apparently doesn't realize is that a conflagration will soon jump the firewall. His castle, which he thought impervious, will soon be consumed in a fire of his own making.

So, upon further review, I am not the least bit concerned about the makeup of the latest CoT. The homeowner has simply placed himself in greater peril by his actions this week. His house is burning yet he slovenly continues his business. Fat, happy and blissfully unaware of the disaster at hand.

Video unavailable

As we prepare for next week, I thought it appropriate to give you these charts. Look very closely at them and they will tell you a lot. Let's take them one by one. First, an up-close look at a weekly silver. Note that the price has apparently closed right on top of the Battle Royale II line. Might a raid come from here? Of course. However, silver closed Friday above all of its moving averages. Every single one. This is very bullish from a technical perspective and will almost certainly lead to a rally on Monday as technical-based, momentum-chasing spec money comes charging in. The next resistance point that I see is near $31.50, which would be well above the BR2 line.

The weekly chart of gold shows that is is clearly above its Battle Royale line and, like silver, gold closed Friday above its 10-day, 20-day, 50-day, 100-day and 200-day moving averages. Once it surpasses 1680, gold will move effortlessly higher toward 1700. (More on that level in a minute.)

And these next two charts should be as reassuring as a hug from an old friend. Note that, after peaking in late April of last year, silver price declined into May of this year, where it began riding higher and consolidating along the long-term trendline. If silver could not be broken down last September, last December or even this May, it ain't gonna be broken down now. Soon, The Battle Royale will be won and silver will move on toward further fights at $33 and $36. For now, though, study this chart and smile.

And while you look at this gold chart, keep in mind that ole Turd very much likes to discover patterns that no one else has yet noticed. Look closely. Gold has followed this channel, this "managed ascent", for nearly four years as part of the larger bull market that began in 2001. Now, look even closer.

Recall that, just yesterday, we discussed the significance of 1665-1675 as it related to the S&P downgrade of the U.S. and The Panic which gripped The Gold Cartel in the weeks that followed. Beginning the following week, gold began to trade uncharacteristically above and outside of its long-term channel. If you count the total amount of time between the breakout UP and the final fall back WITHIN, you get a total of 17 weeks. Fast forward to today. In early May this year, gold fell DOWN and out of its long-term channel. If you count the total amount of time between the breakout DOWN and today, you get a total of 16 weeks. Does this mean that next week is the transition week where price straddles the lower line of the channel, currently near 1700? Will the first week of September bring price action that finally places gold squarely back within the channel? Who knows. But, would you be the least bit surprised by a "candle" this week that lies upon the channel line and a "candle" next week that lies within the channel? I wouldn't be.

Well, that's all for now. Go relax and enjoy your weekend. Do not let the CoT (or anything else for that matter) bother you. Over the past eight trading sessions, silver has rallied nearly 10% and The Evil Empire has not participated. In fact, the have only impeded the rally at their future cost and peril. What is coming will truly be explosive and historic. Like me, you should just remain patient and diligent, adding to your stack whenever possible.


About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 27, 2012 - 10:42am


Go Boom!

Aug 27, 2012 - 10:53am
Hellfish tmosley
Aug 27, 2012 - 10:55am


Keep up the good fight Boat. It's amazing some can see the subtleties of the economy but be so blind to obvious facts and statements made by the West's enemies.

Aug 27, 2012 - 10:57am

eh, people are politically cynical because they should be...

The Other Side: probably already posted, but it perfectly sums up politics in the US today.

From Reason.com via ZH.


The past several weeks have made one thing crystal-clear: Our country faces unmitigated disaster if the Other Side wins.

No reasonably intelligent person can deny this. All you have to do is look at the way the Other Side has been running its campaign. Instead of focusing on the big issues that are important to the American People, it has fired a relentlessly negative barrage of distortions, misrepresentations, and flat-out lies.

Just look at the Other Side’s latest commercial, which take a perfectly reasonable statement by the candidate for My Side completely out of context to make it seem as if he is saying something nefarious. This just shows you how desperate the Other Side is and how willing it is to mislead the American People.

The Other Side also has been hammering away at My Side to release certain documents that have nothing to do with anything, and making all sorts of outrageous accusations about what might be in them. Meanwhile, the Other Side has stonewalled perfectly reasonable requests to release its own documents that would expose some very embarrassing details if anybody ever found out what was in them. This just shows you what a bunch of hypocrites they are.

Naturally, the media won’t report any of this. Major newspapers and cable networks jump all over anything they think will make My Side look bad. Yet they completely ignore critically important and incredibly relevant information that would be devastating to the Other Side if it could ever be verified.

I will admit the candidates for My Side do make occasional blunders. These usually happen at the end of exhausting 19-hour days and are perfectly understandable. Our leaders are only human, after all. Nevertheless, the Other Side inevitably makes a big fat deal out of these trivial gaffes, while completely ignoring its own candidates’ incredibly thoughtless and stupid remarks – remarks that reveal the Other Side’s true nature, which is genuinely frightening.

My Side has produced a visionary program that will get the economy moving, put the American People back to work, strengthen national security, return fiscal integrity to Washington, and restore our standing in the international community. What does the Other Side have to offer? Nothing but the same old disproven, discredited policies that got us into our current mess in the first place.

Don’t take my word for it, though. I recently read about an analysis by an independent, nonpartisan organization that supports My Side. It proves beyond the shadow of a doubt that everything I have been saying about the Other Side was true all along. Of course, the Other Side refuses to acknowledge any of this. It is too busy cranking out so-called studies by so-called experts who are actually nothing but partisan hacks. This just shows you that the Other Side lives in its own little echo chamber and refuses to listen to anyone who has not already drunk its Kool-Aid.

Let’s face it: The Other Side is held hostage by a radical, failed ideology. I have been doing some research on the Internet, and I have learned this ideology was developed by a very obscure but nonetheless profoundly influential writer with a strange-sounding name who enjoyed brief celebrity several decades ago. If you look carefully, you can trace nearly all the Other Side’s policies for the past half-century back to the writings of this one person.

To be sure, the Other Side also has been influenced by its powerful supporters. These include a reclusive billionaire who has funded a number of organizations far outside the political mainstream; several politicians who have said outrageous things over the years; and an alarmingly large number of completely clueless ordinary Americans who are being used as tools and don’t even know it.

These people are really pathetic, too. The other day I saw a YouTube video in which My Side sent an investigator and a cameraman to a rally being held by the Other Side, where the investigator proceeded to ask some real zingers. It was hilarious! First off, the people at the rally wore T-shirts with all kinds of lame messages that they actually thought were really clever. Plus, many of the people who were interviewed were overweight, sweaty, flushed, and generally not very attractive. But what was really funny was how stupid they were. There is no way anyone could watch that video and not come away convinced the people on My Side are smarter, and that My Side is therefore right about everything.

Besides, it’s clear that the people on the Other Side are driven by mindless anger – unlike My Side, which is filled with passionate idealism and righteous indignation. That indignation, I hasten to add, is entirely justified. I have read several articles in publications that support My Side that expose what a truly dangerous group the Other Side is, and how thoroughly committed it is to imposing its radical, failed agenda on the rest of us.

That is why I believe 2012 is, without a doubt, the defining election of our lifetime. The difference between My Side and the Other Side could not be greater. That is why it absolutely must win on November 6.

TreeTop Dweller Swineflogger
Aug 27, 2012 - 10:59am

Preaching to the Choir

Swineflogger good eye!

Charles Hugh Smith gets to the core of all the evil!

The Rot Runs Deep 1: The Federal Reserve Is a Parasitic Wealth Transfer Machine

XXXXXXXXX (pasting a few teasers to this short piece)

We are constantly prompted to worship the Federal Reserve's supposedly god-like powers to rescue a corrupt and venal Status Quo from the black hole of recession and collapse, and this Big Lie masks its real nature: The Fed is nothing but a parastic wealth transfer machine, skimming wealth from the many and transferring it to the few.


Here's another: the Fed "loans" free money (0% interest) to the Financial Lords, who then buy low-risk long-term U.S. Treasury bonds paying 3%. When the Lords spot a better skimming opportunity, they sell the bonds to the Fed, who buys the bonds from the Lords as part of its "Operation Twist."

Peasants who have arduously saved up capital (cash) earn next to nothing as a result of Fed policy, but the Fed insures Feudal Lords earn a guaranteed return on money they obtained for free. The suppression of interest income to near-zero (a negative return once inflation is factored in) is a massive transfer of wealth from savers to Fed-backed speculator Lords and banks.

As a direct and intentional result of the Fed's quantitative easing, huge sums of "free money" slosh into the "risk-on" stock market, where the money provides liquidity for the Lords' high-frequency trading (HFT) skimming operations.

The losers are the peasants who have been locked into 401K plans that divert their earnings into the stock market, where the Lords' HFT can skim billions from the 401K plans.



Aug 27, 2012 - 11:01am


How did the West make these enemies? Is al Quida good or bad? Thanks

Bohemian tmosley
Aug 27, 2012 - 11:02am


tmosley, I don't know anything about you, your ethnic background or your religion, but -- there was NOTHING collectivistic in boatman's comment. Frankly, I don't buy your point of view as WE, not you, yet, are dealing with problems like this --

Video unavailable
Aug 27, 2012 - 11:07am


Lee Ermey was good at playing at DI because he was one, at the age of 21 no less. Stanley Kubrick hired him as a technical advisor for the film, Full Metal Jacket and he was so good in the instructional video showing how a DI was supposed to act that Kubrick decided to use him in the role. Turned out to be a decent actor. All he did was play himself but that’s what a lot of them do.

Kubrick was infamous for being a stickler for details and Full Metal Jacket was the most authentic of the Vietnam films. IMHO. The Marines singing the Mouse Club song at the end of the film was because Marines in the sixties called the Corps the Mickey Mouse Club. Tapping loaded clips against the helmet so the bullets were even…Etc. It made sense to very few people but it was authentic.

R. Lee Ermey

As Tim Robbins (Remember him?) can attest, insulting half your customer base is probably not wise for your career. I’m sure Geico would like to sell insurance to lefties and righties. Geico must have known he was conservative when they hired him, but they probably thought that this nasty old ex-Marine wouldn’t speak his mind. Miscalculation on their part I guess.

So, why did Kubrick change the furniture in different scenes in The Shining?

Dagney Taggart
Aug 27, 2012 - 11:07am


29 would be a Gift! The ataris need to fill that SLV 28 gap somehow. It would be swift. You may have to camp out in front of the LCS to get it.

On a side note, the Silver / SLV spread is now up to 95c! It has been 80-85c typically. Does this mean the SLV is bleeding physical? This is also why I'm in the "SLV goes to Zero" camp.

tmosley Hellfish
Aug 27, 2012 - 11:09am


You imply that the West has significant EXTERNAL enemies.

I'm not sure how you can claim to understand the economy and not realize that "the West" (collectivism again) has it's own worst enemies in its own halls of power.

Collectivism and racism destroy reason, and allow the corrupt to gain ever more power. Are you happy accepting the line pushed by Fox News, and finding yourself on the same side as people like Joe "Stalin" Lieberman?

What will your grandchildren think of you when they hear that you supported "the West" in the face of their genocidal actions around the world while they destroyed the economy and stole your own freedoms? Ask any native German today what he thinks about his grandparents, and you will get your answer. Did they participate blindly, or were they the best sort of people who not only saw what was going on, but spoke out against it, and worked to fight it when the time came?

Do any of your Muslim haters even KNOW any Muslims? I do. I also know Jews. None of them are bad people. Most PEOPLE aren't bad, it is the SOCIOPATHS in power who set us against one another, and attribute the actions of a few to all, and further encourage normal people to violently avenge those acts of violence upon anyone of the same race as their oppressors. This is collectivism at its absolute worst, and it has utterly destroyed the lives of millions. Are you happy with yourself for participating in and perpetuating the plans of the sociopaths?

Aug 27, 2012 - 11:11am

but politics TOTALLY cares about you!

That says it all. Hat tip and a thank you to the Vet.

tmosley Bohemian
Aug 27, 2012 - 11:17am


How is generalizing all Arabs and all Jews not collectivism?

Not only that, but the notion that oppressed people should lay down their arms for "peace" is utterly disgusting. Might as well say:

"If the American people were to lay down their arms, there would be no more crime,

If the American government were to lay down their arms, there would be no more America.

No thinking person can disagree with this."

Sharia law is aggressive, and not to be tolerated, nor are those who seek to impose it, but not all muslims are for Sharia, any more than all Christians (or all whites for that matter) are in favor of fundamentalism. Also funny that your little video there is from the CHRISTIAN BROADCASTING NETWORK, which is a propaganda arm of Israel.

You have been BRAINWASHED. It's time to think for ourselves here.

yangster Swift Boat Vet
Aug 27, 2012 - 11:19am


You say I don't care about politics? Actually I care DEEPLY about politics and democracy which is why I don't care who wins the US election, it has very little to do with democracy and much more to do with backroom deals, manipulation and corruption, but this is the main page of a precious metals site, so lets keep on topic or go to the forums.

Colonel Angus
Aug 27, 2012 - 11:21am

value of SLV

Doesn't the old Voltaire quote say it all???

We know that SLV will go to zero, but it will be at the time that the bigs cannot withdraw the physical metal for their massive claims. They will start to abandon, the price will go down, and small paper pushers will be left holding the (empty) bag.

It's all game theory. I highly recommend Luce and Raiffa for a thoroughly readable book that leaves the technical details to the appendices. You'll be glad you read it, and it will be incredibly easy to predict what comes...not next, but eventually.

Aug 27, 2012 - 11:26am

Speaking of logs & scales…

…this log will make your scale tip:

Bacon explosion donuts.


Local guys - have to check this out.

Hellfish Marblesonac
Aug 27, 2012 - 11:26am


The west did not make them. The enemy has hated apostates for 1500 years. They weren't made by the west they chose to be enemies of a west based on their rejection of principles of secular and religious freedom.

AQ is bad. And before you have to make the point I know AQ was leveraged and suppoerted by the US government during the cold war. Not all political moves work out in the long run. Leveraging AQ during the cold war filled the governments needs at the time. That monster has gotten loose.

I'll drop out of the political conversation now and leave you the last word. This is a site focused on PMs and I' like it better that way.

Aug 27, 2012 - 11:28am


Looks like quite a skirmish at 31 this morning. Looking for the breakout over 31 and a run to 31.50.

I am doing my best to stay focused on PMs and prepping on main street. I love to jump into political discussions, butt ... perhaps I shouldn't.

I can handle the political posts when they have a clear bearing on economic news, which in turns gives us clues about metal direction and the rapidity of the collapse; and I don't think it is healthy to push all political posts to the forums, but it isn't healthy to bring debate here unless its relevance to economics is clear and direct. Can we find middle ground here?


Hellfish tmosley
Aug 27, 2012 - 11:46am


I agree as well that the West also has significant INTERNAL enemies. I do not think believing the external enemies exist denies the internal ones exist as well. In the short run the internal enemies of the west who are destroying the economic and social freedoms and structures are a bigger threat than those who openly wish the West's destruction. But that does not discount there is a significant and obvious external threat as well.

I will also agree most people aren't bad but there are social constructs that are bad which are supported directly through action or indirectly through inaction by a large populations. I think I choose to draw a larger circle than you because the single sociopaths cannot have a great impact on society without the support of many. That many can be an industry of banker middle managers with no political thoughts or populations of uneducated fundamentalists who are taught hate from the nursery.

I reject the premise that the West - the US in particular - are genocidal. The West may have been more damaging in it's colonial times but still not to the degree that many of the West's enemies were - or still are.

I also reject your accusation of me participating in the plans of the sociopaths. I have removed as much financial support as I can from the banking industry and am politically active and support folks I think will do the best to preserve freedom and prosperity. I can do no more until the shooting starts. And if it does I will not be quiet.

I want to make one more point - I think your collectivism view has its flaws - as I said earlier single sociopaths are relatively powerless without the broad support of the folks you seem to be labelling as innocent - I'd submit that many of those folks (in general and on both sides) are more responsible for the problems we are discussing than you think.

Hellfish Hellfish
Aug 27, 2012 - 11:47am


Let's get back to them.

Aug 27, 2012 - 11:56am

And it's at thrityoneteen

Is that a number? LOL....

Magpie ClinkinKY
Aug 27, 2012 - 12:29pm

Message or memorial

A crescent moon and a single star? Maybe it's just me.........

Magpie ClinkinKY
Aug 27, 2012 - 12:31pm



Aug 27, 2012 - 12:57pm

@Dagney - SLV spread

Before the May Day Massacre, the spread between SLV and spot was $1.20 and higher. I don't think the current spread means much.

tmosley Hellfish
Aug 27, 2012 - 1:16pm

If you want to reject

If you want to reject reality, feel free. There are plenty of sheep out there waiting to be slaughtered. Get in line. If you want to close your eyes and cover your ears, then do so, but you must know that your opinions will thus be ill informed and likely wrong.

The US supplied the chemical weapons which were used to gas the Kurds and the Iranians (remember that Sadaam was installed by the CIA, and was best buddies with Rumsfeld and Co). From the Firebombing of Tokyo to the insane invasion of Iraq, the US has had its hands in a lot of murder. But the history books are written by the victors, so that was all "collateral damage" rather than "genocide".

But that isn't even what I was talking about. I was talking about the genocidal policies of the Federal Reserve and other central banks. The victims of those policies will include US, not just vague foreigners that we can't or choose not to sympathize with.

Your stirring of more hatred supports the sociopath's planned invasion of Syria and Iran. "Reject" that all you want, but that blood will be on your hands.

Go read "The Lucifer Effect". Good people turn evil due to poorly designed social institutions. That is exactly what is going on here. If you were a German citizen in 1935 you would have been chanting "Heil Hitler" with the rest of them, just like you would probably be lobbing rockets at Israel if you had been born in Palestine. At the very least, you would understand why others fight, when you have lost your job because of Israeli roadblocks, and your wife died in childbirth because you were denied access to medical facilities, or when your 1000 year old olive plantation was stolen from you by Israeli "settlers", or when the power is cut off because there is a blockade on, and your government has to preserve what little diesel it has for fire trucks and ambulances. Yes, I think if you bothered to put yourself in someone else's shoes for a little while, you might understand the difference between right and wrong, or self defense and aggression.

Hellfish tmosley
Aug 27, 2012 - 3:01pm


Are you an American? Just curious. I'm guessing not.

I think you're way off base interpreting what I've written. Implying I'd be supporting Hitler based on my current views makes the rest of your arguments seem much less serious.

Your view of the Paleo - Israeli conflict is just plain backwards. Sorry but there is no excuse for advocating Israeli/Jewish genocide on the part of the 'Palestinians' or the rest of the islamic world for that matter. You portray the Nazis as evil but seem to see the reasons behind the islamic supported next genocide of the Jews as reasonable. I'm having a hard time seeing how you would reconcile that.

As someone posted earlier if the muslims disarmed there would be peace - if the Israelis disarmed there would be genocide. It's as close to a truism as you will every find in politics.

I think we agree that there is a lot of evil going on in the central bankster world - but that seems to be about it.

I'm afraid we are so far apart there is no reason to take up more bandwidth.

(edited for spelling and a slight clarification)

Bohemian tmosley
Aug 28, 2012 - 9:00am


"How is generalizing all Arabs and all Jews not collectivism?"

Because that has nothing to do with collectivism, I told you already. We are talking about nations, ethnic groups, racial groups, religious groups, or -- peoples, in general, but COLLECTIVISM is a system of COLLECTIVE OWNERSHIP, the collective control of the means of production and distribution; see -- marxism or marx-leninism, or any dictionary in the U.S.. It came with and after the Bolshevik revolution; there was the process of collectivization, leading to the establishment of collectivism, right? Don't mix collective with collectivism, that's like mixing "national" with nationalistic or nationalism. Quite different meanings.

"Also funny that your little video there is from the CHRISTIAN BROADCASTING NETWORK, which is a propaganda arm of Israel."

What's wrong with the Christian Broadcasting Network? LOL

"You have been BRAINWASHED."

Yes, I know. And believe me, it feels great!


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Key Economic Events Week of 4/22

4/22 10:00 ET Existing Home Sales
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Key Economic Events Week of 4/1

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4/3 9:45 ET Markit & ISM Services PMIs
4/5 8:30 ET BLSBS