Another Parallel

Tue, Oct 23, 2012 - 10:40am

Continuing with the current theme, here's another reprint for you. Party like it's 2011!!

Just six, short days after calling "Turd's Bottom" and issuing a guarantee, ( all looked lost. It was January 27, 2011. Prices had peaked three weeks earlier in the post-QE2 euphoria and now nearly every "maven" was dumbfounded by the continuing weakness. Sound familiar?

So, for today, I invite everyone to go back to "The Watchtower" and review this post:

You'll find all sorts of parallels to today...even references to the sudden appearance of a shadowy "insider" who had begun posting cryptic messages on the Yahoo Finance boards.

Anyway, keep the faith and hang in there. This, too, shall pass.


About the Author

turd [at] tfmetalsreport [dot] com ()


Lady Gaugau
Oct 23, 2012 - 10:42am

Thanks Turd

This is pretty wild.

Oct 23, 2012 - 10:42am


I want it to pass

Oct 23, 2012 - 10:43am

First, perhaps?

First, perhaps? My first. Perhaps the waning interest is due to the morose attitude of the price drop today.

Oct 23, 2012 - 10:44am



Oct 23, 2012 - 10:47am

Oil getting spanked down. $2.73

deleveraging every where.

Double Bogey
Oct 23, 2012 - 10:48am

Risking a couple more fingers

by trying to catch the knife; just bought some NOV 29 UCO calls and more USLV. I'll probably have to use my toes pretty soon. Isn't the saying "A fool and his money are soon partying?" My wife can't figure out how a fool got the money in the first place. 'sigh'

Oct 23, 2012 - 10:49am

Bugger 3rd

I swear I would have been first if I had been logged in!

Anyway I think HEH is a cartel of silver mine suppliers and refiners. Why not OPEC do it! Agree not to supply the COMEX and LBMA, move all new future contracts temporarily to SHFE then to NASE. The only way to get true price discovery is to take away the supply to the poor pricing mechanism and create a new one where the dog wags the tail. This will also starve the COMEX and it will die. Sure they will miss out on some sales for a couple of months but then after $200 plus is easy.

Fight fire with fire! Bet I am right Turd!

Oct 23, 2012 - 10:51am

Can you imagine if they let it fly now.. How many

spec shorts just piled in? squeeeeeze me baby..

Oct 23, 2012 - 10:55am

Deja not quite vu

Just noticed the Dow was down by around 250. Checking the last time this happened (June 21):

The Dow Jones -250.82 points, or 1.96%.

Oil down 3.99%.

Gold down 3.11%.

So todays drop in PMs doesn't look too bad by comparison. Maybe this means we're approaching the bottom?

Oct 23, 2012 - 10:57am

Oct 23, 2012 - 10:59am
Oct 23, 2012 - 11:04am

If Turd was correct about gold moving out of US and UK

Then the momentum must have ratcheted up today. Interesting ZH article about massive amounts of gold being bought by Iranians in Turkey with Italian Lira then shipped to Dubai to ultimately end up in Iran so Iran can pay for imports.


P.S. Sucky day. Nobody said this was going to be easy. It's quite possible that we may have an intraday turn around. I've seen it before. Nothings changed. Fundos still in place. Patience is the most difficult of virtues. Great entry point with Fiat to spare.


Oct 23, 2012 - 11:06am


I am trying to put together a REALISTIC TOTAL OVERALL COST for mining silver. I can't remember the members in this blog who told me that my calculations in my article THE COMPLETE COST OF MINING SILVER (back in July 2011) were incorrect.

This is a chart from that article based on this formula:

I do realize this is not the typical way to figure out costs for mining silver. However, I believe cash costs are completely worthless in determining 'THE PROFITABILITY OF A COMPANY."

For instance, SilverCorps Q2 2012 (or their fiscal Q1 2013) results show the following:

Net Income = $44.5 million

Cost of Sales = $19 million

Income before taxes = $17.4 million

Net Income after taxes = $9.5 million

Ying Mine District Cash Cost of Silver = $0.16 oz

Ying Mine District Total Production Cost = $2.49


Now, if we go by their total income before taxes of $17.4 million, this is 39% of their total revenue. If they received $30 an ounce for their silver during this quarter, they had to pay 61% cost (that is net of by-product credits). I get the following:

61% X $30 = $18.3 actual cost per oz

Of course this is not the typical accounting method of figuring costs, but it seems a great deal more realistic than $2.49.

Anyhow... I wanted to converse or have an email exchange with anyone here that might be in the mining industry as an accountant... or who understands accounting as it pertains to the balance sheets of mining companies.

Please send me a message through this website, or an email at SRSrocco[at]gmail[dot]com if you interested in throwing some ideas around in obtaining a better method of figuring actual costs for mining silver or gold for that matter.


Groaner TF
Oct 23, 2012 - 11:06am

It looks like Custard's last stand.. ice cream stand?

got a turn around going here, maybe?

a double bottom put in for today?

Oct 23, 2012 - 11:07am

Winnipeg LCS Report

Paid $38 cash for a new antelope (with plastic cover). Lots of inventory in silver and gold. Only other people were sellers. Gold gram wafers for $80 cash.


Oct 23, 2012 - 11:11am

At least Harleys are selling.. stock is up...

Where do they make those bikes, China??

Too bad Apple doesnt show some good will and create manufacturing here.. I know, they dont have much money to play around with.

Fritz SRSrocco
Oct 23, 2012 - 11:16am

SRS Input

Just give the folks at Silver Wheaton a call . . . They probably will be delighted to speak with you about accountingn approaches.

Eric Original
Oct 23, 2012 - 11:16am

Thanks for the trip in the Way Back Machine, Turd

I love scrolling through the comments on those old blogspot posts. I sure was busy on that one! Of course, I was busy on all of them back in those days.

Here's one of mine that I like:

EricJanuary 27, 2011 11:00 PM

Besides, if it turned right now, the lows would turn out to be something like 1308 and 26.40. So you had 1320 and 26.50. Big deal. Now come down off the ledge.

Oct 23, 2012 - 11:18am

Double Bottom?


IF a consolidation can begin here AND we get a shove from the Fedlines tomorrow, a squeeze from this double bottom could really put some nervousness into the shorts.

Oct 23, 2012 - 11:22am

I went into the LCS yesterday too

I picked up 11 ASE's. There were two young 20 year old kids with their pants hanging on for dear life. I think they were trying to sell grandma's old coin collection. I wonder how many people pass off stolen merchandise there at the coin shop. There was another guy who was trying to sell some fake gold. Shady lookin character. He probably could have taught me some new gang signs. I didn't make eye contact though. Gotta lay low when your stackin. Edit: LOL.. how's that for a double bottom.

Oct 23, 2012 - 11:23am

Pigatha... ruling the day so far and exhibiting enough strength to skew everything.

We're still in that pretty tight band between 80 and the low 78's and we've tapped that 80 level twice or thrice so we might see it backing down a little with the EU markets closing.

Something tells me we'll see it go a bit higher in that range as today seems a bit different.

SIlverbee ¤
Oct 23, 2012 - 11:26am

Ahh! rare bacon

That's some weird porn for some on this site

Groaner Istack
Oct 23, 2012 - 11:26am

I see there it is! a double bottom

7 more and it would be Ass a Nine

Oct 23, 2012 - 11:28am


Fritz... actually I want to stay away from the mining companies. They tend to have an INDOCTRINATED way of looking at things. Cash Cost is a perfect example. Recently, Nick Holland CEO of GoldFields did a 35 page presentation basically stating that the large gold miners were completely FOS- FULL OF SHEET as it pertains to their results vs their bullish rhetoric.

He went on to say that CASH COSTS are completely useless in determining the actual profitability of a mining company. I agree and couldn't believe a CEO of a major gold company finally came out and admitted it.

You see all mining companies sell their BY-PRODUCT METALS at market prices... or should I say the majority d0 except those who have contracts such as with Silver Wheaton. Who cares if a company sells a great deal of zinc, lead and copper to show a very LOW CASH COST FOR SILVER, if their actual profit is very small.

I am sick of the HECLA's of the world who brag that they have either a negative or slightly positive silver cash cost, but their overall profit is peanuts. This does not compute to me at all.

Again.. that is why I would like to throw some ideas on how to get a better method of determining a true METRIC for calculating costs of mining silver.

clueless one TF
Oct 23, 2012 - 11:28am

@ Turd's double bottom...

just back from the army/navy store... I love that place.

anyway...good call TF. It looks really strong on the daily RSI as well. Drew some lines from the monthly/weekly setup, she's looking strong.

This could be a really good buy op on phyz...fundies are getting stronger everyday and Apmex is still above spot on buyback of generic rounds.

ballyale Groaner
Oct 23, 2012 - 11:30am

It's getting more depressing everyday reading ZH these days.

I sometimes think that they take a certain amount of Glee in their doomsday predictions.

Oct 23, 2012 - 11:34am

Every so often bullion goes up against a down market...

Not sure why they let it do it. but they can try again today, that would be nice.

Oct 23, 2012 - 11:36am

when this baby hits

when this baby hits 88mph....your gonna see some serious X%^*

Some Serious Shit
Oct 23, 2012 - 11:37am

Re: The bottom

This has to be the bottom....We are seeing an oversold RSI on key technical levels...Perhaps, this is a good sign....We are down before the FOMC meeting (press release tomorrow) for some action...Even Paper shorts have to realize that it is time to cover....

I think most of us didn't expected a correction of this type (a Paper correction) during a strong seasonal months for GOLD/Silver...I think someone stated a while back that GOLD/Silver tend to be weak during the month of October, and then it pick-up steam in late October and leading to November...I think worst case scenario will be a quick drop to $31.50 area for Silver...Almost a "washout" selling point...

Oct 23, 2012 - 11:38am

what can the fed do to help?

is 85 billion a month into perpetuity not enough? (probably not)


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