The Week That Was

420
Sat, Sep 15, 2012 - 12:03pm

I tried to warn you that this week was going to be wild. I expected the pressure and intensity to ramp up with each successive day and it most certainly did. By Friday, everyone was ready for the weekend. That's fine but, come Monday, you'd better be ready.

What a fantastic week we had. Made even more special by the fact that we were set up for a disaster. Recall that I had been warning you for about 10 days that a Cartel Raid seemed on the horizon. They looked like they were once again setting everyone up for a massive beatdown. By the looks of the CoT yesterday, I was exactly right.

The situation, as it turned out, was eerily similar. Let's take a look:

December 2011: The price of gold bottomed late in December 2011 at $1525. The CoT also "bottomed" at a total gross Cartel short position of 325,960 and a net short ratio (gross shorts divided by gross longs) of 1.98:1. The price of silver bottomed at $26.40. The silver CoT bottomed with 55,356 gross shorts and a net short ratio of 1.34:1.

Jan-Feb 2012: The metals then took off on a two month rally, peaking on Tuesday, February 28. Gold reached $1790 (+17%) and silver made it to $37.50 (+34%). The CoT taken that afternoon showed a complete reversal from December. Now the total gross short position in gold was 390,412 with a net short ratio of 2.69:1. The total gross short position in silver had reached 78,395 and a net short ratio of 2.32:1.

And what happened the next day, 2/29/12? Using The Bernank's Capitol Hill testimony as cover, the bid side of the metals was overwhelmed by Cartel manipulation and a 3-month, short-covering beatdown ensued. https://www.tfmetalsreport.com/blog/3465/csi-comex-gold-and-silver-massacre

Gold bottomed again almost exactly three months later on Wednesday, May 30, 2012 at $1537. Two days later, the employment report for May was released and QE has been on everyone's lips since. On Tuesday, May 29, the CoT once again looked like this:

May 2012: On 5/29/12, the total gross short position of The Gold Cartel stood at 300,917 and the net short ratio had fallen all the way to 1.77:1. In silver, the gross short position was back to 60,151 and the net short ratio had fallen back to 1.31:1.

It had all been a set-up. From the lows in December, spec money flowed into the metals and The Cartels welcomed every dollar. At the peak, The Bernank was rolled out in front of the cameras to put off QE and The Cartels attacked. Over the next 90 days, they covered all of their fresh shorts and then waited all summer to play the game again.

August-September 2011: The final bottom for gold occurred on June 28 at $1552 and silver reached $26.21. The CoT on June 26 was once again at a "bottom", too. On Tuesday, July 10, the total gross short position of The Gold Cartel was 316,165 and the net short ratio was 1.93:1. The total gross silver short position was 62,478 and the ratio was 1.29:1.

As of this past Tuesday, September 11, look how things had changed again. Prices had risen considerably. Gold closed on Tuesday at $1735 (+12%) and silver closed at $33.56 (+28%). The total Gold Cartel gross short position was once again 380,239 and the net short ratio was 2.66:1. The total Cartel gross silver short position was 79,478 and the net short ratio was 2.47:1.

The Cartels had set us up again. The point is this: If the Fed had "disappointed, if The Bernank had put off all new QE until after the election, there can be zero doubt that we would have, once again, seen a massive, manipulative raid on gold and silver.

In hindsight, do you recall the very sharp and brief spike down that occurred about 10 minutes before the Fedlines were released on Thursday? This was almost certainly someone or something with foreknowledge of the raid, attempting to front-run The Cartels. By now, we all know what happened, instead. Rather than being "saved" by The Bernank and using "no QE" as cover to screw everyone once more, QE~ was announced and now The Cartels are trapped!

We'll use the days ahead to go into greater detail on the implications of this but rest assured for today that sharply higher prices are coming. QE~ only serves to increase the global demand for physical metal. This demand will underpin any attempts by The Cartels to start a selloff. Over time, they will be forced to cover at an accelerating pace, similar to April 2011 in silver and August 2011 in gold. There will be panics and you can count on every dirty trick imaginable being thrown at the "markets". This time, however, it's not going to work. With QE~ as a backdrop, every dip will be bought, each successive low will be higher. The overconfident and greedy fools could/should have used this time to draw flat and perhaps even go net long. Instead they arrogantly chose to play their games one more time. This time, however, they will lose. The game is over and the fireworks have begun, even if the players seemingly haven't yet heard the final whistle.

Only one reading assignment this weekend and it's this piece from Brandon Smith at Alt-Market. This is one that you need to read carefully and then print it off and keep for posterity.

https://www.alt-market.com/articles/1034-get-ready-for-an-epic-fiat-currency-avalanche

Lastly, once again I beg everyone to recognize that this main thread is for the discussion of precious metals and issues affecting such. It is OK to reference events in the MENA as the current situation there clearly has an impact on the global economy, the price of oil and the equity markets. It is not OK to get into pissing matches regarding "radical Islam", "Zionism", "American Imperialism" and the like. There are forums for that and I've even gone to the trouble of setting one up for you: https://www.tfmetalsreport.com/forum/4188/radical-islam. Going forward, I am simply going to delete and remove comments from this main thread that I feel are set to hijack the discussion and turn people away from the education that this site provides. No exceptions. Got it?

OK, with that, I wish everyone a fantastic and restful weekend. Come back on Monday prepared for another wild and crazy week.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  420 Comments

kingboo
Sep 15, 2012 - 1:35pm
question
Sep 15, 2012 - 1:37pm

So....

Bernanke just decided to surprise everyone with the QE~ announcement all on his own?

I was under the impression that the EE/Fed/Cartel/JPM were the enemy of all us fringers and stackers and metal heads.

How could the enemy be caught by surprise with their shorts down by their teammates? Now there's them and us and a third faction playing? How about a fourth?

I only thought it was convoluted before. Now what? At least my underwater life is getting closer to the surface lately and if this keeps up I might even see daylight but the actors in this drama are beyond my ken.

Ned Braden question
Sep 15, 2012 - 1:43pm
Silver Alert
Sep 15, 2012 - 1:51pm

What doesn't make sense is

What doesn't make sense is that if JPM is the commercial arm of the FED, why wouldn't they know about the QE3? Did the Bernanke just hang them out to dry?

Either too much has been made of this relationship, or the theories that the real PTB are just using the banks to suck the economy dry and will cut them loose towards the end are true.

csquared13 Thieving Corp.
Sep 15, 2012 - 1:52pm

love love love the "El

love love love the "El Yunque" ATB. being half puerto rican, i've had the pleasure of hearing the beautiful sound of the coqui. (the small frog on the coin) google "coqui sound" if you'd like to hear...

csquared13
Sep 15, 2012 - 1:59pm

i'll just embed the video for

i'll just embed the video for those that are interested:

https://www.youtube.com/embed/54-FzuE-w0U

GLTA over the weekend.

Thieving Corp. csquared13
Sep 15, 2012 - 2:04pm

I love them too

Saludos Bori!

I love the El Yunques too. I bought several extras beyond the gift ones to keep for myself.

thisismynewname
Sep 15, 2012 - 2:05pm

Question for the Pro Options traders

Can any of the pros on this board give me some ideas for the pros/cons of trading options in leveraged ETFs (AGQ for example) and non leveraged ETFs (SLV for example)?

Hobo
Sep 15, 2012 - 2:13pm

Net Short

Still looking for answers about how the net short ratio is calculated. For example, where do you specifically find the data for gross shorts and gross longs. What exactly do these data mean? How could there be more longs than shorts or vice versa? I know you guys all know this as second nature and I would really appreciate a somewhat detailed answer or some direction on where I could find out on my own. Thanks Again.

twippers
Sep 15, 2012 - 2:15pm

Confused

Turd, excellent summary. I love the fact that the EE could potentially be trapped. But there is one thing that has me questioning your thoughts... Wouldn't the dirty scumbags have known what bernanke was going to announce? That's the only thing that has me really worried

ScottJ
Sep 15, 2012 - 2:36pm

Re: Cartel & "Bernanke Surprise"

The Cartels had set us up again. The point is this: If the Fed had "disappointed, if The Bernank had put off all new QE until after the election, there can be zero doubt that we would have, once again, seen a massive, manipulative raid on gold and silver.

There are no if's when it comes to banking institutions/cartel's inside knowledge of a "stimulus"/exotic central bank action (only who knows and who does not)... These "financial engineers" are well-tested professionals (within their respected objective(s)) in damage control/controlled sentiment. Even as they are "losing control" they are massaging key contra-indicators such as gold/silver/crude/energy markets in a manner in which suits them to the best of their ability. I don't think they can be "caught off guard" very often, instead we are seeing merely calculated decisions in which affect all of the greater western world central banking institutions (the cartel)... as confidence in fiat is the upmost priority and nothing signals fear like gold hitting all time highs on such announcements....

All time highs in gold are to be blamed on other things that are "tail-risk" and "geo-political" event related... things that can be used to push out "reasonable" excuses to the masses while the ship sinks.

I for one think it would be foolish to believe that there is not a plan in place that has been derived for many years in regards to the devaluation of the dollar and the ushering in of whatever new scheme will surely be presented on the horizon. There may be speedbumps that the cartel may be unknowing of... but for the most part we are traveling down the road they are laying for us... we are merely the passengers trying to figure out where it it heading.

Nana
Sep 15, 2012 - 2:36pm

Where In The Constitution

Does it say the people are responsible for supporting the banking system and bailing out businesses? Isn't that what QE is doing?

meegoreng1
Sep 15, 2012 - 2:37pm

Turd, It just doen't make sense.

It doesn't make sense that the Cartels aka "TPTB" aka "EE" aka 'Bermonkey's masters" would be caught surprised by the QE3. And that they will be buried because of their shorts.

It seems you have ruled out the possibility that the Cartels can also go long as speculators or small commercials. Or that the COT report is not reported correctly to us peons. Or they can keep playing this game for much longer.

PMs will go up but not at the expense of burying JPM and other big banks. Even if they 'lose their shorts' it will be passed on to the taxpayers. These scumbags also have total control of every market, commodities, currency, equities, bonds, interst rates etc.

The only thing that they don't have have control is the supply side of precious metals esp silver. I see that as the only reason why we may have a HEH going forward. Are we there yet? I don't know.

But until then they will be in control with their unlimited paper shorts.

BTW, I think you are an American patriot. What you do for this us is immensely appreciated. This is the first website I open up whenever I get online. You have created a community who understand and can relate to each other, unlike the sheeple that we see everyday in our lives. Thank you again.

ScottJ ScottJ
Sep 15, 2012 - 2:43pm

With that said...

We are all humans and so are they... and shit happens.

Bring on the aliens! (As long as it isn't project bluebeam hehe).


Sep 15, 2012 - 2:46pm

Turd, I Beg to Differ and Be Confused

Thank you profusely for all you do. I have not said this enough lately. Now with that said, I must say some more, because I just cannot wrap my head around your reasoning.

How can the cartel be trapped? They STILL have their massive short position. Your thesis, that the shorts are trapped, PRESUMES that silver/gold will ONLY go higher, thus forcing them to liquidate their shorts at a loss. But why do they have to sell at all? Why cannot they close out positions with fiat?

There will be no signal failure, unless there is a demand for physical delivery. But, who will do such thing, and actually demand physical delivery when the cartel will simply pay a premium, in fiat, for the buyer to accept fiat and not silver/gold?

I see this current set up as just that, a set-up. Nothing has changed with the short position of the cartel. They are just drawing in the sheeple, prepping for a massive beat down, that is surely coming just as sure as day follows night.

What would trigger the beat down? Ummm, something massive, scary, frightening and unpredictable, causing the world's economy to grind to a halt or at minimum suffer a severe disruption, hmmm, what could that be?

War.

Duh.

So, I do not at all see the cartel as being trapped.

Second, as others have said, since they are the cartel, and privileged with insider info, including the premise that the cartel is doing the Fed's bidding, then why would they not know of the latest QE?

Logical disconnect for me.

I still stack and prep, no worries.

Just it nags me with the logical inconsistencies is all.

Bongo Jim
Sep 15, 2012 - 2:46pm

I tend to agree

With CA Lawyer and meego. The cartel/EE owns the Fed, how would they be surprised by this? They tell Benny what to say/do. They're running the show. To quote Col Kurtz from Apocalypse Now...Benny is "an errand boy sent by grocery clerks to collect the bill."

Big Dutch
Sep 15, 2012 - 2:47pm

@ watchingdoma

I’ll give it a shot, but I won’t consider myself a pro until options trading pays for a beach house. Anyhow, with regards to trading options on leveraged ETF’s:

Pros: You can make a boat-load
Cons: You can have your face ripped off.

Easy enough, but here is what you have to look for:

This is huge. Most leveraged ETF’s have “time decay.” For example, you may be thinking now is a good time to short long bonds. Why not buy some calls on TBT, but you're nervous and decide to buy some 2014 calls for the extra time. How could you go wrong... They look so sexy and you know you’ll be right by then... The problem is TBT has some wicked time decay so going that far out you might be right but still get hosed.

If you want to fuss with options on leveraged ETFs I really would recommend shorter time frames and starting out small. Small is a relative term, for you it may be $500, $5,000 , etc. But start out small and if you make some good calls start playing with the casino’s money.

By shorter time frame, I mean only place bets when you feel movement is going to occur. Again, using TBT maybe you have some technical indicator telling you now is the time to move, or it could be as simple as you feel an auction the next day is going to go poorly. Regardless, I would really recommend you think in terms of days or maybe a week or two rather than anything longer term with any leveraged ETF. Certainly at the beginning. I know there are guys that claim to make a killing by betting on the time decay and knowing when they flip their holdings and all that jazz, but I don’t know enough about that angle to give any pointers.

Hope this helped a little.

Watcher
Sep 15, 2012 - 2:57pm

Gold Chart: The 'Cup' Has

Gold Chart: The 'Cup' Has Formed

Gold has completed a 'cup' on the daily chart.

Now we would need to see a nice 'handle' to go with it.

There certainly remains the possibility that the 'cup' could fail, and gold could fall back into its broad trading range. That would be manipulation, and it could continue to work for the time being. Modern money is a funny little magician that way. I don't think we have seen anything quite like it, even in some of the more famous manias.
https://jessescrossroadscafe.blogspot.com/2012/09/gold-chart-cup-has-for...

humbleprofits
Sep 15, 2012 - 3:11pm

Maybe they are being punished

I would also think that the big bankeroos would also get a heads up on what ben's move would be pre announcement. However, maybe Ben was told by the REAL higher ups to send a message to get the bankers to behave a bit better, or at least not get caught.

https://www.cnbc.com/id/49043106

"Money-Laundering Inquiry Said to Aim at US Banks"

"Federal and state authorities are investigating a handful of major American banks for failing to monitor cash transactions in and out of their branches, a lapse that may have enabled drug dealers and terrorists to launder tainted money, according to officials who spoke on the condition of anonymity."

First two banks mentioned are JPM and BofA.

I think he can be a bit kooky, but this was postulated by the Golden Jackass not to long ago.

Byzantium
Sep 15, 2012 - 3:16pm

JPM's status

I'm with the skeptics on this one.

JPM are both above the law, and financially underwritten by the Fed, the Gubmint, and unwittingly by the hapless taxpayer. They are the system. Shorting PMs for them is not a commercial exercise, but strategic government business. They could give a damn about the commercial aspect.

Bill Murphy thinks that a silver manipulation scandal will go mainstream and bury them. My take on this thesis, is not that of such events politically or legally burying them.... but by tipping off the majority investing community that the silver price is artificially low, and a screaming buy. JPM cannot fight the world, even when backed by the Fed.

The other scenario I considered, was that though JPM is unassailable within the US bubble, that the Fed/JPM axis could still be attacked from outside, e.g. by China or other state players. This is geopolitical territory, possibly Jim Willie territory, or warning shots inspired by US meddling in Syria and Iran.

Finally, is the as yet unknown ingredients for HEH that Turd is keeping close to his chest.

In the absence of these things, JPM is rock-solid secure, as it has always been. JPM is the injustice of Corzine writ large, in neon lights and a big middle finger to humanity at large.

No 'HEH' has turned up yet in my mind; the recent run ups are welcome, but we are still so far, in familiar territory.

alphamorph
Sep 15, 2012 - 3:31pm

Turd - jitters or jubilation?

Turd, you were so certain that the Fed was going to disappoint and that the Cartel was going to do it to us again that a lot of people got scared off.
I don't think the shorting hedgefunds (as per Norcini) or the Cartel (as per almost everybody here) are quite so naive that they were totally taken unawares of the impending Fed decision. James Rickards flat out declared the day before (or more) that the Fed was going to ease. Several other notables hinted something similar. Even I commented during the morning prior to the announcement (when PM prices were plunging), that the action was akin to a Rothschild headfake (supporting rumors that Napoleon had been victorious at Waterloo). I was busy buying and believe me, I'm not great at timing this or any other market!
My point, there is no way that the bullion banks were unaware of the possibility of Fed easing and its consequences to them. But seemingly, their response.... SO WHAT - just pile on more shorts!
Clearly, these guys aren't done yet and this wild ride is far from done.

TexasStacker
Sep 15, 2012 - 3:37pm

mod request

please move dagney's offensive and profane opinion to the forum turd set up for that topic. thanks.

¤
Sep 15, 2012 - 3:44pm

Stuck In The Middle With You

Video unavailable
SIlverbee
Sep 15, 2012 - 3:45pm

I think JPM's entrapment was unintended consequences

The banks will benefit in many ways, it would be hard to find a binary decision that would have been a win win in all circumstances for the banks. Overall they gain; downside JPM is trapped by the short and curlies.

Collateral damage!

Swineflogger
Sep 15, 2012 - 3:47pm
TruthBuster
Sep 15, 2012 - 3:53pm

Petrodollar and WW3 - interesting video

I think the only way Russia and China can stop the US petrodollar is to prevent Iran being attacked, and to convert their USD into tangible assets such gold, silver, commodities, mines, oil fields in Africa and elsewhere. Then once they have enough gold, they will float an international settlement currency backed by gold. This will eventually unseat the USD.

Video:

https://www.crisishq.com/why-prepare/world-war-3-preserving-petrodollar/

Dagney Taggart
Sep 15, 2012 - 3:54pm

@Swineflogger

That's offensive to Mormons.

Swineflogger
Sep 15, 2012 - 3:56pm

One more for the road

Any Turdite that is not a member of Turd Talks Metals is really missing something special. It is not just the keen insight based upon years of experience and a priceless stable of investment community connections that is valuable, it is the passion and intensity with which that information is shared. Anyone wondering WTF I am talking about should just join up and listen to Friday's podcast. It was nothing short of EPIC.

EDIT: Turd I tried to find a YT embed of the stuttering grandpa in the bar with Tourettes Syndrome from the first Boondock Saints movie to assuage your potty mouth concerns but was not able to find one. Rat Puke!

Jager06 TexasStacker
Sep 15, 2012 - 4:01pm

Boo Hoo!

I can't stand to look away when someone posts something I disagree with!

Please someone, save me! Someone with some authority, someone with some real power!

Save me from my inability to tolerate others and leave them alone to their ideas!

Save me from the potential of having to use logic to justify my opinions!

Please save me from having to listen to others express themselves! Only I should be able to do that, cause only MY ideas are the really reallly REALLLLLLLYYYY good ones!

Somebody?

<crybaby/off>

Teach
Sep 15, 2012 - 4:03pm

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