At the corner of Copperfield and Blaine

Mon, Oct 8, 2012 - 11:31am

What a joke all of this is. It's all just an illusion. A manufactured theater of disbelief where the magicians convince you ignore your senses, distrust your eyes and rein in your sensibility. The current performance includes such mind-blowing feats as:

  • The U.S. stock market is fast approaching a return to all-time high levels. Not because of corporate profits or any other, fundamental driver. Nope. In a market where over 80% of all trading volume is simple High Frequency Trading and "regular" investors have fled for the "safety" of cash, the stock market has become nothing but The Greater Fool Theory, writ large. One computer buys an issue in the hope that some other computer will buy it next, at a slightly higher price. What was once the greatest, most fair market in the world has been reduced to this: No price discovery, no efficient allocation of capital. Just bullshit computer gaming.
  • For decades, the U.S treasury market rose and rallied because of a circular pattern of capital. The U.S. consumed nearly everything the world could produce and sent dollars careening around the globe in purchasing those items. Those dollars then returned to the U.S. when the producing nations purchased treasuries and were then used to finance the next subsequent, higher level of debt. It was all well and good until the music stopped. As it became clear that this couldn't go on forever, the "creditor" nations stopped buying treasuries. Faced with the prospect of rising rates and increased interest costs, official U.S. policy has become one of self-monetization. In 2013, The Fed will issue over 1,000,000,000,000 in dollar credits to the Primary Dealer banks. Those banks, in turn, will purchase treasuries at auction, thereby funding about 80% of the projected 2013 federal budget deficit.
  • How about the appearance of currency stability through relative valuation and pegging? Is the dollar getting stronger or is the euro getting weaker? Conversely, if Fed policies lead to dollar weakness, shine the media spotlight on the euro in order to help the USDX find a bid. If your currency rises against your wishes, print a bunch of it like the BOJ or maybe peg it to some other fiat like the SNB.

The key to the game is to win the day and maintain the illusion a little longer. Future consequences be damned. All that matters is today and this week.

And this leads us to gold and silver. The prices of these metals have been manipulated and controlled for decades. Why, you ask? Again, it's all part of the illusion. What would the metals be telling you if gold was priced at $6,000/ounce, up from $3000 two years ago? And what would this signal about inflation and the relative quality of "establishment" money? If gold was shown to be more valuable that U.S. treasuries, would the 10-year bond still be yielding under 2%? If general inflation was accurately being reported at 10%, who in their right mind would lock up funds in a 30-year treasury at 3%?

So, here we are on this beautiful, early autumn Monday. Back on Friday, we were told that The Gold Cartel has shamelessly been allowed to create 2,500,000 ounce of gold from thin air in the time since the announcement of QE∞. Even more grotesque is the acknowledgment that, over the same time period, The Silver Cartel has created 70,000,000 ounces of paper silver. Our regulators, those arbiters of free and fair markets, simply avert their eyes to this crime in progress.

After reviewing Friday's CoT and the latest Bank Participation Report, Ted Butler has concluded that JPMorgan alone now holds short 34,000 contracts of Comex silver. If forced to deliver, this is the equivalent of 170,000,000 ounces or about 20% of the world's production for 2012. Additionally, after excluding the amount of open interest that comes from spreads, JPM now controls (on the short side) over 33% of the entire Comex silver market. If you add in the positions of their three largest partners in crime, the size of their position rises to over 50%! Think about this for a minute...Four banks control, on the short side, over 50% of all open contracts for a globally-important, industrial and monetary metal.

Again, the hopelessly-inept and likely-corrupt CFTC dawdles and does nothing. Can you imagine the outcry if four hedge funds managed to accumulate a 50%+ position in S&P futures? Or how would it play out if four countries had control over 50% or the crude oil market? But the CFTC turns a blind eye and does nothing.

But allow me to wrap this up on an optimistic note. Though all of the conditions exist for a sustained and coordinated price collapse, it hasn't yet happened. Why? I see two reasons:

  1. The two, separate 30%+ price drops in silver last year both occurred when QE was ending or had ended. At this particular moment in time, The Fed has thrown the banks a curveball by the initiation of QE∞. This is about priorities and, trust me, levitating the bond market is an almost infinitely larger and more pressing concern for The Fed than assisting JPM in their ongoing manipulation of the puny, little silver market.
  2. Because of the open-ended and infinite quality to this latest QE program, demand to exchange fiat for metal in London is unwavering. Every selloff in paper has been met with increased demand for physical. As long as this continues, sustained beatdowns in price are extremely difficult to accomplish.

So remain patient and buy the dip. Keep stacking and continue preparing. Though any quality magician can temporarily suspend your belief in reality, in the end it's all just an illusion. The laws of physics eventually trump the magicians skills just as the laws of economics will, one day soon, blunt the accumulated efforts of The Fed, the banks and their willing accomplices in government and the media.


About the Author

turd [at] tfmetalsreport [dot] com ()


Oct 9, 2012 - 11:43am

Last (perhaps:)

Can you imagine the outrage if a white commentator wrote an article with the headline "The 15 Most Overrated Black People?"

On Monday, African American Studies professor and political commentator Marc Lamont Hill published a piece at the Huffington Post entitled "The 15 Most Overrated White People."

Read more:
Lady Gaugau theskier
Oct 9, 2012 - 11:51am

A friend of mine had a nearly

A friend of mine had a nearly identical response when he called Ann Barnhardt, just to discuss a theology point she brought up in her blog. Why does she even answer the phone? Makes no sense to me at all. I guess she can really yell, too.


Oct 9, 2012 - 12:09pm

Ann Barnhardt

while correct on many levels................its obvious she has a loose wire somewhere.

outspoken is a grave understatement

Oct 9, 2012 - 12:31pm

If you've lost Sesame Street... (Too funny...and sad)

October 09, 2012

By Sesame Workshop

Sesame Workshop Response to Campaign Ads

"Sesame Workshop is a nonpartisan, nonprofit organization and we do not endorse candidates or participate in political campaigns. We have approved no campaign ads, and as is our general practice, have requested that the ad be taken down".


Big Bird - Obama for America TV Ad


Oscar's response to Obama campaign

Classic Sesame Street - Oscar sings "I Love Trash" (1970)
Oct 9, 2012 - 12:42pm

@ivars and GL

You can also specify who you are quoting by using quote=user

For example

Puck T. Smith wrote:
ivars' charts are outstanding!
Oct 9, 2012 - 12:49pm


"It is strange the way the scientific community is ignorning it despite hugely convincing evidence that it is real"

As Thomas Kuhn observed, science does not change because of new evidence, it changes when the old guard dies and a new generation arises.

Or, as Arthur C. Clarke once said: "When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong."

Oct 9, 2012 - 1:01pm


In my opinion Ann Barnhardt is an expert on commodities and commodities trading. When she talks about those things I listen and listen good. Outside of those areas she is a raving wackjob and worthy of ignoring, if she weren't so damned entertaining.

Oct 9, 2012 - 1:03pm

The most effective ad ever made without a word being spoken... and contrast to the Big Bird ad.

The Dinner Table

Obligatory disclaimer: Not saying things are going to "get better" if Obama is booted, but G.D., they can't get worse.

The difference in ads alone tells me who the adults are:)

Oct 9, 2012 - 2:03pm

@ Lady Gaugau

You have to make sure that your cookies are fully enabled for the site. Also, if your computer has a system failure it wipes all your cookie settings and returns to default, which may be 'guest'.

This has also happened to me numerous times and cookies being blocked was the problem.

Hope this helps.

Oct 9, 2012 - 3:24pm


"they can't get worse." Got no concept of what devastation really is, must be under 50, stay tuned .......

So the bear raid flopped again. after hours 33.97 capping though


BREAKING: U.S. files civil mortgage fraud suit against Wells Fargo

oh man, mad max is going to lose it with the inflationary chicken and wall street rat.

and Big bird thought he was in a tight spot, being a top 1%er, .... LOL

Lady Gaugau sprite
Oct 10, 2012 - 12:22am

Thanks, Sprite. I'll check it

Thanks, Sprite. I'll check it out.

Oct 11, 2012 - 11:42am


I think so...

Oct 14, 2012 - 10:30pm


I think not...

Oct 14, 2012 - 10:44pm


Opps, wrong place...


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