Because I Said So

Mon, Aug 8, 2011 - 3:34pm

 Just when world markets were seeking assurance, our esteemed and supremely qualified leader uttered this:

"Markets will rise and fall, but this is the United States of America. No matter what some agency may say, we have always been and always will be a triple-A country," Obama said.

Nothing quite like living in FantasyLand. I hear it's particularly beautiful at this time of year.

How are you feeling about your gold and silver today? Let's see...Dow is down 506. The S&P is down 66. Crude's at $80. Copper and the grains have been pummeled. I know that silver is pissing you off but, considering the absolute demolition of everything that isn't gold, you should actually feel pretty good about it.

Speaking of silver, here's a 2-hour chart. When the selling of everything finally relents, silver will rally sharply. It will carry through 40.40 and it will move rapidly toward the highs of last week near $42.


However, gold is your clear, hands-down winner on the day. I have a last of $1714, up an amazing $62. There's more to come, too. First up, here's your 2-hour chart. It shows another "stair" higher.


More significantly, I've tried to recreate Trader Dan's weekly chart. Notice the clear breakout of the three-year channel. If it can hold in this area and extend gains...and it's hard to see why it wouldn't...a breakout of this magnitude is extraordinarily bullish. I can see why JPM came out with their "$2500 gold by year end" prediction today.

Three years is an awful long time so we must be careful. Gold could easily fall back into the channel and give us a "false breakout". However, the fundos are so strong at present that it may very well stay up and begin a rapidly accelerating extension higher. Watch this very closely as we may be about to be given a once-in-a-decade opportunity to make big fiat, real fast.


Lastly, I did switch a few things around today in order to take maximum advantage of what I see coming. In silver, I eliminated my Sep spreads and am now simply long the $42 calls. In gold, I dumped my October 1700 vs 1800 spreads and went long just the straight 1800 calls. I'm still long my December 1700 vs 1800 spreads, though.

Thanks to all who entered the new contest. If you haven't entered yet, you must pick the Comex closing price for this coming Friday in the September11 gold contract. Use the previous thread to post your guess. No entries submitted later than 5:00 EDT today will be accepted. Btw, if someone has a few extra minutes, would you please help The Turd by compiling all of the entries onto a spreadsheet? Thanks in advance to anyone who can help.

That's it for now. Keep the faith! TF

5:10 pm EDT UPDATE:

As the Globex closes, gold is back to $1722. I can't imagine that it won't make new highs overnight, particularly when Asia is in full swing at around midnight to 2:00 am EDT. For your comic relief, I present below something I just received from a friend. It's the opening paragraph of a "SPECIAL BULLETIN", just released by MSSB. What absolute fools these people are. They can't even spell "committee" correctly! If you are currently working with a traditionally-trained "financial advisor"....well, you know what they say about a fool and his money.

Morgan Stanley Smith Barney

Latest Report from the Global Investment Policy Comittee: Downgrade .

GIC Special Bulletin: Impact of US Credit Downgrade on Markets

Applegate, Jeffrey – Morgan Stanley Smith Barney

August 8, 2011 6:37 PM GMT

The downgrade of US long-term debt by Standard and Poor’s, which is notable politically and historically, is having a prompt and negative short term effect on global financial markets. However, the next stop is not a recession—nor is it a drop in corporate profits. This a split decision on ratings, as the other two major ratings agencies, Moody’s and Fitch, have maintained their respective top-drawer ratings for US debt. As this latest sell-off abates, expect the markets to refocus on the fundamentals: an intact global business-cycle expansion that in our view, should deliver double-digit profit-growth into 2012. Our base case remains that a US economic rebound will occur in the second half of this year and that European policymakers will eventually be forced to take more decisive action to stabilize their debt markets and the euro. 

11:25 pm EDT UPDATE:

These late nights are wiping me out. Holy cow, gold is up another $42 as I type at $1755! The S&P is down 28. Crude is down another $4. The grains and copper are getting smoked. At least silver is hanging in there at 39.12.

Two things. Watch gold overnight. Santa's number of the final frontier is 1764. For whatever reason, his numbers usually pan out and he's maintained for weeks that 1764 would be defended by The Cartel. In silver, watch this triangle play out. Silver could collapse through 38.50 and head toward 37 but I doubt it. I expect silver to instead charge through the down-sloping line overnight and begin heading higher. We'll see. Anything can happen. Have a great overnight. See you in the a.m. TF


About the Author

turd [at] tfmetalsreport [dot] com ()


murphy · Aug 9, 2011 - 8:45am

@ Bigmark

Keep the faith brother. This gold run is big money flight to safety. What happens when the little people figure it out. The silver bull must run.

JamboMamboBill · Aug 9, 2011 - 8:48am

Hi bigmark99

Silver trading was restricted big time in the last couple months., which is having a drastic affect in it! However, silver in on sale IMO! Look at gold's price $1700 and silver is only $38 ?

When silver is going to get back some value I don't know, I have a feeling that by next year silver should bring you a least 50 to 100% return from current prices!

Maybe I am too optimistic on that... just my view.

Eric Original · Aug 9, 2011 - 8:49am


Yeah, score one of those Mexico 50 Pesos buddy. You'll never regret it!

ewc58 · Aug 9, 2011 - 8:49am
Shill · Aug 9, 2011 - 8:50am

Second-quarter U.S. productivity falls 0.3%

Take special notice to the revisions.

Productivity in the first quarter, meanwhile, was revised to a 0.6% decline instead of a previously reported increase of 1.8%, the Labor Department said Tuesday.


JamboMamboBill ewc58 · Aug 9, 2011 - 9:03am


The government uses the service folks to enforce their policies, but make no mistake, they will destroy them if they please. I left for that reason, there is not loyalty anymore ! It's all about hidden agenda and serving superiors interest. I am sorry for the brave falling ones. God bless them

But you right, a pay back is gona come.

Maybe this one was the biggest mistake of this administration...

Save_America1st · Aug 9, 2011 - 9:03am

@DPH and @EricO

Hey you guys, thanks mucho for the feedback on that. I'm on my way up to GVille here in a few minutes. Curious what the price will be from the time I leave the house to when I get to the shop 15 minutes could be up 20 or down 20, but of course in the grand scheme of it all those few zombie POSX's aren't going to matter at all will they! 

Seems like 38 on silver is pretty solid right now...yeah, it could get the rug ripped out from under it again in the next few minutes, days, or weeks...or this could be the solid bottom...either way, again, what will it matter in the end when 40, 45, and 50 are left in the dust as silver speeds towards 75+ in the next several months (or sooner?). 

I know I should buy all silver now since the GSR is so wide at this point and then trade silver for gold as the GSR gets towards 30:1 and below...but I still think getting another ounce of gold today is a good deal (especially when it's 1.2057 ounces!)

I thought that last 2 gold coins I picked up in the low 1500's seemed high, and now they're both over 200 more than what I gave for them just in the last few weeks! That ain't a bad return at all for little 'ol me and my few FRN's.

Thanks again you guys! 

ewc58 · Aug 9, 2011 - 9:09am

Exactly Larry

And thank you for the Lew Rockwell link. My earlier suspisions were confirmed upon hearing the account that you just relayed. The chopper had some RDX aboard and the stuff was detonated shortly after it lifted off the ground.

Taliban my Ass. And how Panetta's crocodile tears: did you cath that? Almost barfed when Obottom "addressed" this too at the end of his read the other night.

Our nation has never so thoroughly in the hands and control of Global Evil. Things keep going this way, you and I will be hanging out on some FEMA camp just for posting stories and thoughts like these.

But I'll be dipped in shit if I'm going to stop. I will sooner die on my feet than live on my knees.

pbreed JamboMamboBill · Aug 9, 2011 - 9:10am


Gold to the moon, miners down.

I see two possible explinations:

1)The market has become irrational/inefficent.

2)People expects commerce to break down such that one can not get your value out of the miners.

This could be due to:

Commerce breaks down and miners can't get the supplies they need to mine.

The stock market fails and your stock ownership is not honored or vanishes in a puff of smoke.

Most miners will be nationalized.

If one expected the markets to fail then one would expect a huge divergence between spot and futures and option prices. (I'm not seeing this yet).


My physical is 90% silver and 10% gold, why oh why can't silver catch a bid?

pbreed · Aug 9, 2011 - 9:16am

New Bumper Sticker

I want one of these!

debtless · Aug 9, 2011 - 9:22am

Personally, i hope silver

Personally, i hope silver would just take the big dump to $30 one more time, so we can all load back up -then it can play channel games again at 38-42 all it likes for a while.

Right now it seems like it's trying to bore volume down.

silver foil hat · Aug 9, 2011 - 9:23am
aurum argentum · Aug 9, 2011 - 9:24am

Listen to these mindless

Listen to these mindless idiots trying to refute Jim Rickards and gold. Silly children.

Larry · Aug 9, 2011 - 9:26am

Seal/OBL story

ewc58 - I'm with you on this. Stinks to high heaven. I've been railing on the whole sham of the OBL story ever since they supposedly "killed" him. Extremely credible sources say they saw his body and that he's been dead almost ten years - died from Marfan's disease. 

Seals kill and retrieve the body of the most wanted man in recent history and they unceremoniously dump him at sea. Right. Makes sense... to idiots. The EE is really slipping these days by underestimating the intelligence of a growing number of informed people throughout the world. They have underestimated the internet that questions "authority" and spreads the truth and uncovers the lies. This is one reason they invited all major ISP heads to the latest Bilderburg "meeting". Google, Microsoft, Facebook, etc. Their next push will be to hasten a crackdown on the net. Watch the Washington puppets ramp up these efforts as soon as this year.

This latest Seal "operation" is outrageous and sickening. It's like the mafia whacking everyone that was involved or knows anything about their murder (in this case, ruse, then murder, then murder again). Here's a clip to consider along with the ones you linked above. In short: The chopper that supposedly landed with the Seal team landed but blew up before taking off with OBL. Everything obliterated. No OBL and no witnesses... except a neighbor:

¤ · Aug 9, 2011 - 9:30am

What if this happened here?

South Korea Joins Greece In Banning Short Selling

Submitted by Tyler Durden on 08/09/2011 - 06:44

DPH: Allow yourself to consider the possibilities....

What if some or a lot of investors thought that might happen here at some point?

What if it does happen here? What if the EE knows it's going to happen?

What if the EE has been preparing and hammering away this whole time to create extreme value because of the extreme shorting on the PM's and miner's?

What if they have set the stage to run the opposite way and profit like never before? Isn't that what they do, herd the sheep going one way and then they make a sharp 180 turn?

Just putting that out there. We have been subject to and have witnessed many extreme and unusual market moves the last few years. Could this EE turnaround on gold be another example of that and a Golden Swan we were not expecting?

I ask this as a exercise to consider what might happen that we are not expecting or paying attention to as all of what I outlined seems very unlikely. That's what a swan is, right?

For all the attention we pay to all the news coming out and how it might effect us, we might have developed a blindspot within us despite our focus and fact gathering and analytical skills. It's safe to say that most of us have a strong belief system in what were doing and what we find acceptable and not etc. Our trust and suspicion could at some point lead us not to consider what we don't trust or think possible. The EE going long on PM's and miners would seem to fit that criteria.

Could our distrust and suspicion of the EE preclude us from even considering they may just do a about face because it's now the proper time for them to do so in their grand plan? Gold going much higher as part of their plan is what I think they need to have happen at some point.

Seems like we are fast approaching that point or just entering the awareness phase they need to provide to the general public to get back in the market asap. The EE etc. is going to create a new gold rush. It's merely marketing.

I'm pretty sure their marketing plan is under way. One thing I have noticed is none of the banks that mention gold going much higher never mention silver. H'mmm. 

Frontal Labottleme · Aug 9, 2011 - 9:37am

SLW Jan 21 2012 33.0 Call

Wow... BID: $3.45 ASK: $7.50

Gives meaning to the phrase " beyond there (here?) there be dragons". Time for a stinky bid me thinky.

¤ · Aug 9, 2011 - 9:38am

Oops...only 104%

194% on the month so far

¤ · Aug 9, 2011 - 9:39am

SLW options HOLY SHIT ALERT! SLW jan 12' $65 calls just went up 192%.

Something is up and I think a big short just capitualted somewhere.

Stay tuned. IDK if I should immediately sell it as I'm still underwater but this is unreal.

Something big is up!

ewc58 · Aug 9, 2011 - 9:40am

Rickards had to be patient with those knuckleheads

How 'bout Joe Kiernan? Wow. Uber dumb AGA. Gold could whack that guy in the head 3 times with a tire iron and he still wouldn't get it. laugh

¤ · Aug 9, 2011 - 9:42am

WTF just happened?

I went back to my account and just saw over $5000 in SLW this a.m. just go poof and go red. Either my options web site is totally screwed up or we are seeing the inner mechanics of the system starting to come apart.

I've never seen volatility like what I'm seeing this past week or so.

debtless · Aug 9, 2011 - 9:42am

Europe indexes just went red

Europe indexes just went red - she's coming around again! Duck!

edge · Aug 9, 2011 - 9:45am

The Silver condundrum.

Friends and fellow Turdites, I too have been frustrated by the lackluster show of silver in this last rally of gold. And I went back to some charts to check my history.

When gold broke through its 1980 Nominal High, silver was still trading under 20 per Oz. It took nearly 2 1/2 years for silver to catch back up with gold and hit its 1980 High/ 2.5 years whoa!

Now, gold is double its nominal 1980 highs... and silver is below its 1980 nominal High. Silver will catch up, but it is a matter of time. This may be a value play more than anything. Sit tight and be right.

jlee2027 · Aug 9, 2011 - 9:48am

Gravity is a bitch

The push that the PPT gave the DOW lasted 15 minutes. I hope they used all their powder.

s1lentslayer · Aug 9, 2011 - 9:49am

Silver's being treated like a

Silver's being treated like a commodity which are all dropping right now. People are liquidating it to catch the gold train. That's my theory at least. At some point when gold is too expensive they'll go back to silver.

Tesla · Aug 9, 2011 - 9:49am


The volume is INSANE ag/au right now... looks like they are having a serious paper war on the Comex right now...

Almost 10,000,000 au contracts in 15 minutes ..25,000 ag

FU Blythe Masters - Burn!!!! 

Silver Dan · Aug 9, 2011 - 9:51am

Silver Gold Ratio & Gold Margin Requirements

I have to start marking the articles I've been reading so I can give proper attribution, but I swear I've read at least two articles over the past two days in which big bank analysts have reiterated the "historical gold-silver ratio." Right now, the ratio is stretched.

I've also read where the margin requirements for gold will be raised.

It seems to me a depressed silver price relative to the historic gold-silver ratio + raised gold margin requirements = money moving into silver in a big way?

Anyone have any further opinions or thoughts?

Tom L Tesla · Aug 9, 2011 - 9:55am


And if Blythe et. al. can't contain the buying at this level the margin hike rumor will float. There's so much that can happen with the EE striking back today it's almost too much to comprehend.



sevin · Aug 9, 2011 - 10:06am

Did we hit bottom in equities

Did we hit bottom in equities and today is the announcement for QEIII?? AGQ looks tempting right now.

Violent Rhetoric · Aug 9, 2011 - 10:09am

Sold some paper gold & silver

Sold some paper gold & silver hoping to get back in cheaper later today. 

Just feels like a day to cash in some chips and see if we get a pullback.

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