Silver to $44

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Tue, Aug 9, 2011 - 9:53pm

In the past 24 hours, we can now count four, separate attempts at the 1770 level by the December11 gold contract. We can also count four, immediate Cartel actions to hammer price back down. However, the lows are getting higher and the pressure is mounting. Will the Forces of Evil be able to contain gold through the night and into tomorrow or will they again be forced to retreat to higher ground? I suspect we will know very soon.

Take a look at these three December gold charts. I've tried to draw the same trendline on each. Note the savagery of the beatdowns as gold eclipses 1770. Santa warned us weeks ago that The Cartel also knows that 1764 is a very significant level and will thus defend it vigorously. They have and they are. Will they be successful? You'll know by following the trendline I've drawn and watching the triangle close. If I had to guess, our Asian friends also see this chart pattern and they will make a run at putting the EE into a submission hold later tonight. We'll see. It will be great theater.

paper_8-9latepmgold3.jpgpaper_8-9latepmgoldh.jpg

paper_8-9latepmgold15.jpg

Now, what I really wanted to talk about this evening is silver. I've scoured the internet for the most reliable and accurate analysis of today's events. I of course found it at Trader Dan's site. Please take a moment to read it and then come back. Go ahead, I'll wait.

https://traderdannorcini.blogspot.com/2011/08/s-500-update-us-dollar-sacrificed.html

Ahh, glad you're back. OK, where was I? Oh yea...silver. I've lifted the most important chart that Dan posted and re-printed it below. (Thanks, Dan!)

snapshot-831.jpg

Notice that the CCI has averaged one big drop per month for the past five months. Each drop has lasted from 4-7 trading days and has been followed by a rather significant rally. The current drop just finished its fifth day and, with all of the hubbub from The Fed today, is almost assuredly going to bottom tomorrow if it didn't already bottom today. Anyway, my point is...we're about to see another 2-4 week rally in all of the commodities. Yes, copper, crude and the grains are going to rally. More importantly, I think we can feel very confident that silver is not going much lower, if at all. In fact, I bet we saw the lows today, in the beatdown on the Globex. So, from here, what can we expect? Given that silver rallied almost 25% in July, during the last CCI rally, I think a reasonable target for silver is $44 before Labor Day.

Adding to the ammunition are the utterly amazing OI numbers in silver. The latest numbers are basis Monday and show a total open interest of just over 114,000 contracts. We almost certainly lost a few more today. For perspective, the last time OI was this low was late June...right about the time the CCI bottomed!

So, there you go. I may look like a complete fool by this time tomorrow. Rigged and manipulated markets can do that to you. But, I'm sticking with it. $44 silver by Labor Day.

Have a great evening!! TF

10:05 am EDT UPDATE:

I do not have a new post this morning for two reasons:

1) I want to leave this current post as the "main story" for most of the day.

2) I'm busy watching an epic and breathtaking battle in the Dec11 gold contract.

As I type, our side is winning but just barely. Watch the 1780 level very, very closely. Above there, The Cartel will be forced to give up and retreat to safer ground. It looks almost certain that this is going to happen. As I watch the order flow, the bids are very strong and unrelenting. The chart looks like it's about to squeeze them, too.

paper_8-10amgold15.jpg

I've got a last of 1777. Stay close and keep your fingers crossed! TF

11:50 EDT UPDATE:

The global stampede of investors rushing into the safety of a 6000-year old currency has completely overrun The Cartel's defensive positions between 1770 and 1780. I have a last of 1789 in the Dec11. If headlines don't change in the next six hours, expect explosive gains in the overnight Asian trade, too. Personally, I'm darn glad I took off my spreads yesterday and went "open-ended". Looks like lots of gains to come!

Speaking of which, isn't it great to see silver participating...FINALLY! The chart below was printed before the recent surge through $39. Keep the faith. Silver looks great!

paper_8-10amsilv.jpg

More as conditions dictate. TF

1:05 EDT UPDATE:

30 minutes to go on this historic day. Gold is $20 off its highs but I'm not at all concerned. In fact, the chart below might be one of my all-time favorites. All of the smarty-pant shorts who had faith that their evil Cartel buddies could hold the line at 1780 just got smoked! HAHAHA! Rather predictably, the "market" has given back the $20 it added on the back of the short's pain and that's OK. Nothing has fundamentally changed and its looking more and more likely that we'll head into the overnight session with " a lotta mo", just like Mr T!

Clubber Lang - Best Scenes! (From Rocky III, Mr. T)

paper_8-10amgold3.jpg

Full update soon. TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  460 Comments

¤ · Aug 10, 2011 - 12:43am

No Quarter

Led Zeppelin No Quarter 1973
¤ · Aug 10, 2011 - 12:48am

YardBirds

The Yardbirds - For Your Love (1965) (Full version)
¤ · Aug 10, 2011 - 12:52am

The White Knight is Talking Backwards

Jefferson Airplane -White Rabbit-
maravich44 TheGoodDoctor · Aug 10, 2011 - 12:53am

Wynter/JPM @The Good Doctor

Doc, this is just my take from earlier posted info on the Yahoo board. Apparently this group is angry and anxious to settle some scores. This guy Staley looks like the latest person that they want to FW, I don't think that he is a whistleblower(yet). To me the they are saying to BM and The Morgue, "come clean or else". P.S. his promo maybe just got f#$&ed.

Dr G · Aug 10, 2011 - 12:53am

You old guys and your stupid

You old guys and your stupid videos. cheeky Have the metals driven you mad?

Strongsidejedi maravich44 · Aug 10, 2011 - 12:59am

wynter benton discussion & the end of the Federal Reserve Bank?

Guys,

I followed this Wynter Benton thing back when we were on the other board.

My guess here is that the Wynter Benton thing is a public mirage of the fight between olde worlde money and new world money.

I reached the conclusion that Wynter Benton might be taunting the JPM Investment people under Jes Staley's leadership. Staley was looking like a possible replacement for Dimon in the event Dimon moved to Sec of the Treasury. Unfortunate for them, Tim Geithner is still at Treasury.

Bank of America is the cannon fodder for Chase.

I'm thinking that we're looking at different skirmish lines of the same battle for control.

One part of the battle is the skirmish over the former Countrywide Home Mortgage lousy sub-prime and no documents loans. Those loans were folded into BAC's portfolio when Ken Lewis made the mistake of acquiring Countrywide without having the FDIC first wash and filter the risk. Chase acquired WAMU AFTER FDIC closed WAMU first. So, FDIC and WAMU got stuck with their own junk loans and docs.

Since Fed Reserve Bank does not have the gold or silver, Chase does. Doesn't that mean that Chase is effectively the replacement FOR the FRB?

TheGoodDoctor · Aug 10, 2011 - 12:59am

Found the Rickards

Found the Rickards thing.

https://www.youtube.com/watch?feature=player_embedded&v=L-yST98PMkU

Well I can't get the link to expand but here is the link.

Mudsharkbytes · Aug 10, 2011 - 1:03am

$44 by Labor Day?

I hope Turd is right, but i'll believe it when I see it. I've gotten so used to the constant disappointmen of seeing silver repeatedly smacked down every time it rises that it'll take some time before I believe any of it's gains aren't transitory. If it really achieves $44 by Labor Day, then where might it be by the end of December?

Jasper Puddlemaker kliguy38 · Aug 10, 2011 - 1:07am

@ kliguy38

Re: miners

They look and feel different to me lately. They appear to be diverging from the general market in that they are showing more strength than before (a major point). JS recently said the big boys will soon be selling some physical in order to move into the shares. Public sentiment towards shares is low (a promising thing), and we know they are severely undervalued compared to where metals are.

Yes, it feels different to me. Something is changing. Hope I am right. I don't know about the timing, but I have been accumulating larger positions on this dip.

TheGoodDoctor · Aug 10, 2011 - 1:13am

@Strongsidejedi I don't think

@Strongsidejedi I don't think that would happen (Chase becoming new FRB). I think that BAC is doomed to fail. And I don't know how they fix that without it being another tax burden to the US citizens. Remember Dodd-Frank has about 4 trillion for bailouts written in the law.

Maybe JPM will only take BAC over after the risk is washed off. But let me tell you it looks like BAC has at least 40 billion worth of lawsuits on them right now. And that is minimum. 25 billion for robo signing (that is a minimum) and another 10 billion from AIG. So, I rounded up. But I don't know what other lawsuits are out there.

Well Lewis no doubt was the fall guy for the Countrywide thing. But what would Staley be the fall guy for? That is what I mean. Is there something else going on with the WAMU assets that we don't know about yet?

So, again. What is the question that Wynter Benton and her Leader wants Staley to answer before a fortnight this past Sunday?

PS It looks like Staley is not in the running for the CEO job now from this article here.

https://www.businessinsider.com/jes-staley-matt-zames-daniel-pinto-2011-6

And this is why I was wondering if he would be a whistleblower or burn a bridge. I thought this might be the answer to the question. I don't know. Interesting discussion though. laugh

Mudsharkbytes TheGoodDoctor · Aug 10, 2011 - 1:14am
Jasper Puddlemaker Dr G · Aug 10, 2011 - 1:14am

@ Dr G

"You old guys and your stupid videos. cheeky Have the metals driven you mad?"

No, this is the actual cause:

Video unavailable
maravich44 TheGoodDoctor · Aug 10, 2011 - 1:18am

BOFA @ The Good Doctor

BOFA failure. Doc, this would be an earth shift. Would it be allowed?

TheGoodDoctor · Aug 10, 2011 - 1:22am

@maravich44 I don't know. My

@maravich44 I don't know. My point is the stock has sure been acting like the banks in 2008. I'm basing this possible outcome on the Jim Rogers bank short. And then of course rumors that BAC could be split in two. One with the shit WAMU assets and one with the "good" assets.

But then I fear the shit bank will go the way of a Fannie/Freddie and end up a taxpayer burden anyway. That part is probably destined for failure or a taxpayer backstop. Hell look at Fannie/Freddie walking around with their hat out for another 5 billion! It never ends!

wallshot · Aug 10, 2011 - 1:31am

Dummies, Trends and Bullion

Dummies:

Here is a link to some data I started tracking out of curiosity a few months back, albeit not on any given on a specific cadence. It shows the sales rank of books on Amazon that might be attractive to new investors:

Trends:

Here is a link to all data in a database owned by a certain company that doesn't do "evil" things. This is very untraditional, but it is something that I looked at ahead of the comex induced tank a few months ago and searches definitely got close right beforehand. A zoomed in look at the last year trend is in the picture below.

https://www.google.com/trends?q=inflation%2C+buy+gold%2C+price+of+gold%2C+buy+silver%2C+price+of+silver&ctab=0&geo=all&date=all&sort=0

Bullion:

Some good bullion music

https://www.youtube.com/watch?v=4dDfNmzKpUg

Strongsidejedi · Aug 10, 2011 - 1:34am

WAMU and Countrywide implication on USD value? (Good Doctor)

Dear Good Doctor,

I've thought alot about this issue over the past 18 months.

Your question raises in my mind the question of the AIG litigation against BAC. I believe that AIG is suing BAC because BAC inherited the Countrywide contractual issues for the RMBS and CMBS notes. It seems that BAC must have been holding the risk associated with the Fannie Mae and Freddie Mac residential notes. So, BAC, logically, also must hold the Residential Mortgage Backed Securities from Countrywide. But, JPMChase does NOT hold crap from WAMU. That crap got spewed on Fannie Mae and Freddie Mac back in September 2008 when WAMU went down.

(For those uninformed, when these mortgage sharks were writing a loan to John Q. Public, the money came from somewhere. So, Citibank would go out to some investment fund and say "Hey fund, give us $10,000,000 and we'll get you back 6% for these bonds backed by AAA rated mortgages". The fund manager gives Citi the money and then Citi gets leverage 30:1 and turn 10 Million in to $300 Million from the Federal Reserve Bank, PLUS they get to turn the deal several more times. This is the bubble that popped in 2006)

Okay, so here's the thought experiment....let's say that Jes Staley's JPM Investment team has to deal with being a party on the RMBS derivative contracts. So, that means, Staley has to evaluate the new AA+ rated versus the AAA rated stuff. Well, Fannie Mae and Freddie Mac just got downgraded by S&P. Therefore, if Staley's team has a "conservative" fund and the contract language requires him to blow out AA in favor of AAA, then they would need to start liquidating the downgraded holdings. If they don't, then there must be some other move that the Wynter Benton people can make to blow more stuff up.

Max Keiser's website has been running the meme of a Suicide Banker for some time. I think this Wynter Benton message is the same thing....its like a threat against the stability of JPMC and BAC.

My guess is that the Wynter_Benton team (and this is purely conjecture because I have really no first hand knowledge who is really on that team) is telling Staley's remaining players that the jig is up and giving them a count down.

So, something has to give.

bbdgoco · Aug 10, 2011 - 1:39am

Great Music Great Vids

And when Silver makes its big move, it'll feel like this:

Led Zeppelin - Rock N' Roll
Strongsidejedi · Aug 10, 2011 - 1:43am

msg to Good Doctor re: WAMU and Countrywide

Doc,

WAMU failed around Sept 26, 2008. In the span of a few hours, FDIC took over the bank and then sold the assets to JPM Chase.

Countrywide was bought by Bank of America directly. Countrywide never failed formally and therefore FDIC did not get involved. I have never understood what happened in this transaction because you would think that Ken Lewis (BAC's CEO at the time) would have wanted to insure that FDIC got between BAC and Countrywide first.

Both WAMU and Countrywide had "no-doc's" loans and also home equity lines of credit. Both of those types of loans, especially when made to parties of dubious credit, had little to no stability and assurance of payment. However, when the contract for repayment was hooked to "AAA" rated corporations like WAMU and Countrywide were, then the AIG or Citi rep could sell the RMBS bond for AAA rating.

One wonders if JPMC "investment" people were selling this stuff to institutional investors. If AIG was buying Credit Default Swaps on those bonds and the counter parties were also the same banks, then the banks were buying hedges against their own loans.

I think this is what they were doing...plus they were hedging by pitting one city against another through the CME futures and options on Case-Shiller. When I figured this whole slimey mess out, it made me really angry for a long time.

maravich44 TheGoodDoctor · Aug 10, 2011 - 1:45am

Banksters @ The Good Doctor

All reward and no risk at our expense. I despised them all even before I knew all this, believe me I am angry as hell too. This is all bodies buried, and people wonder why nobody is prosecuted? Is "cahoots a word"? I'll agree, protection is in progress.

Strongsidejedi · Aug 10, 2011 - 1:47am

Some parting comments

So, what's with all my comments on WAMU and Countrywide tonight?

It's because if you blow up all the contracts, you end up with a stronger dollar.

Someone (Reggie Middleton?) total all those worthless bonds (RMBS and Commercial Mortgage Backed Securities).

How many trillions of dollars is it? 1.5 or 2 ? My guess is 2 Trillion USD's.

Anyways, if you evaporate the value of those bonds by "mark to market", you'd end up correcting this fiscal situation alot faster.

In fact, such a move, may also be sufficient to block the hyperinflationary pressure. By evaporating the stock markets in the last week, four trillion USD was removed in valuation from world markets.

TheGoodDoctor Strongsidejedi · Aug 10, 2011 - 2:01am

@Strongsidejedi If JPM was

@Strongsidejedi

If JPM was selling them to institutions that is the bad thing here. How can those be unwound?

I think it worse for the pensions. Not only in the US but globally. Not only underfunded but filled with crap.

Reminds me of the "guarantee on the box" clip from Tommy Boy. Well if you want me to take a dump in a box.....

Strongsidejedi · Aug 10, 2011 - 2:01am

BAC

@Maravich and @Good Doctor

The situation with BAC is, in my opinion, analogous to WAMU in 2008.

For those unfamiliar with the WAMU debacle, check : https://en.wikipedia.org/wiki/Washington_Mutual

QUOTING WIKI:

"All assets, but only some liabilities (including deposits, covered bonds, and other secured debt) of Washington Mutual Bank's liabilities were assumed by JPMorgan Chase.[41] Under the deal, JPMorgan Chase acquired all the banking operations of WaMu, including $307 billion in assets and $188 billion in deposits for only $1.9 billion from the FDIC.[42] Unsecured senior debt obligations of the bank were not assumed by the FDIC, leaving holders of those obligations with little meaningful source of recovery.[41] On Friday, Sep. 26, 2008, Washington Mutual Bank customers were informed that Deposits held by Washington Mutual became now liabilities of JPMorgan Chase.[43]"

WAMU was down around $2 or $3 per share when it failed in September 2008. WAMU stock fell to $4 range in the summer of 2008 as BAC was buying Countrywide.

A BAC failure would result in FDIC taking over BAC. The Assets would be eaten by JPM Chase and then balance any losses experienced by Staley's team over the past few years. The Countrywide detritus would then be eaten by the FDIC.

Since Fannie Mae and Freddie Mac are already suing BAC, the BAC holding corporation would have to settle the law suits. Meanwhile, the "good assets" would ride with the acquiring bank (in this case JPM Chase in my subjective conjecture).

TheGoodDoctor · Aug 10, 2011 - 2:09am

@Strongsidejedi So, just to

@Strongsidejedi So, just to clarify JPM got WAMU assets but just the good ones?

Next, that is interesting. So, JPM could blow up one of two ways. Either the scenario you put forth, or Wynter Benton's group via silver. It seems that she is trying to make them choose which way to slit their own throats. And on top of that says if $36 is breached to the downside they blow up the COMEX.

Yeah the whole suicide banker/GIABO thing cracks me up on Max's site. His rants can be epic. I love this photo.

maravich44 Strongsidejedi · Aug 10, 2011 - 2:09am

@Strongsidedi c.c. The Good Doctor.

O. K. subjective conjecture does not compute. What are you saying?

Strongsidejedi · Aug 10, 2011 - 2:12am

RBMS holdings..

Good doctor-
I have not been able to figure out who actually is holding RMBS and CMBS bond risk.

The whole financial system is so intermingled and conflicted that there does not seem to be any transparent way to evaluate the holdings of any particular fund or company. We're stuck reading a prospectus that does not show actual holding.

I am fairly certain that JPM Chase was NOT the only bank with people running around selling those bonds. In fact, I distinctly recall CNBS's Mark Faber doing a program ("House of Cards" might have been it) where Faber interviews a mayor in Finland who got suckered by European Citibank representatives who sold American Bonds to the European city's fund manager as "AAA". The city lost alot of money.

I can not help but view the Wynter Benton postings in the context of angry European oligarchs and aristocrats who are demanding compensation for the fraud. Well, they got that compensation through TARP and a variety of other vehicles.

My current view is that I need to insulate my own family and friends from this dirty rotten game.

Figuring how is the hard part.

TheGoodDoctor · Aug 10, 2011 - 2:14am

@Strongsidejedi Ok now that

@Strongsidejedi Ok now that we have all of this sorted out, back to your scenario of Jes Staley selling the AA+ rated securities in their "conservative" investment.

Who would be buying? At what price?

Isn't this kind of like robbing Peter to pay Paul?

Then what do they buy? Treasuries? Hmmmm, maybe that is it...........

TheGoodDoctor · Aug 10, 2011 - 2:15am

@maravich44 specifically what

@maravich44 specifically what bro?

TheGoodDoctor · Aug 10, 2011 - 2:17am

@Strongsidejedi Insulating

@Strongsidejedi Insulating family/friends.

Seems to me Wynter Benton is pretty much saying silver.

bullwhip29 · Aug 10, 2011 - 2:17am

QE3 = Operation Twist 2?

It would be interesting to see if some of the chatter (ZH, Rosie, Bill Gross etc...) regarding OT2 proves to be correct. Although Trader Dan doesn't mention this specifically, it does jive with what he is saying. Judging by the bizarre market response today, it is clear that the ship QE3 has indeed been launched. That $40 raid at 3:45pm this afternoon was a beauty, huh? The games appear to be continuing on as the night progresses too. In the coming days will we see more market ramps while the entire commodity complex remains down and out (with the exception of gold)? Anyway, who knows if this so called QE with a "twist" will work and what effect it will have on the markets going forward though. Even the folks at CNBS have had a say on this subject recently, which is disturbing to say the least. Folks, for us to simply blow through Santa's target of 1764 in the next day or two and never look back seems way too easy to me. I hope I am wrong, but I am thinking the fight this time around could be long and painful.

https://www.cnbc.com/id/44029585/Bernanke_May_Borrow_From_JFK_Use_QE3_to_Buy_Longer_Dated_Treasurys

Jive Dadson · Aug 10, 2011 - 2:18am

Magic numbers

What is the deal with Santa's magic numbers? Where does he get them? His last BMN was $1650. It turned out to be a big nothing. The price skipped over it as though stepping on it would break a mother's back. From 1620 to 1680, swoosh! Then a down-swoosh around it and back up to the 1700's.

I do not get it.

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12/11 8:30 ET Producer Price Index
12/12 8:30 ET Consumer Price Index
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11/28 8:30 ET Q3 GDP 2nd guess
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11/29 8:30 ET Personal Income and Spending
11/29 10:00 ET Pending home sales
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Key Economic Events week of 11/19

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11/21 10:00 ET UMich Sentiment
11/21 10:00 ET LEIII
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