Wild Wednesday

376
119
Wed, Aug 10, 2011 - 3:18pm

Well, that was fun, wasn't it? What a day! I hope that you, my dear reader, had as much fun following the PMs as I did today. Now, get ready for tomorrow and, especially, Friday. As we approach the weekend, there is no doubt that things will get even more volatile.

There is a lot going on in the world and the PMs are going a lot higher. Let me explain. No, there is too much. Let me sum up.

1) France is on the verge of losing their AAA rating.

2) Italian banks are on the verge of collapse.

3) In the U.S., Bank of America looks to also be on the edge of the abyss.

4) The Fed signaled yesterday that rates will stay at zero for the next two years.

5) Rioting and civil unrest seems to be on the increase globally.

We were all watching The Cartel vigorously defend the 1770 level since Monday. Many smartypant shorts were watching, too, hoping against hope that the Forces of Darkness would not let them down. To their surprise (not mine), The Cartel failed and, once gold tripped by 1782, it quickly surged almost $20 to $1801 as all the smartypant bootlickers got squeezed and stopped. Predictably, gold has pulled back from $1800 as profit-taking set in. Equally predictable, The Cartel used some equity strength to sell gold on the Globex, too. The resultant dip stopped right on schedule at 1770 and gold has since solidified. I have a last of 1777. Look for another night of fireworks in Asia. If you doubt me, ask yourself what happened today to lessen overnight Asian demand. Anything? Nope. Look for gold to trade back to and, probably, exceed 1800 overnight.

paper_8-10pmgold15.jpgpaper_8-10pmgold3.jpg

Silver is doing great, too. As discussed last evening, it appears that the bottom of the recent correction in the commodities was achieved yesterday. Looks for this rally to continue, in spurts, for the next 3-4 weeks. This will be a favorable environment for silver to return to an uptrend. The chart looks like a bottom was found yesterday and yesterday's OI was likely the low, too. All of this just makes me even more confident that silver will trade to $44 or higher before Labor Day in the U.S. (Monday, Sept 5).

paper_8-10pmsilvh.jpgpaper_8-10pmsilvd.jpg

I hope you are slowly making back some of the fiat lost back in May. My goal is to do a better job of helping navigate this latest bout of craziness. Be patient but be diligent. You now know that a desperate and wounded C/C/C can and will change the rules in their favor anytime they feel truly threatened. Be cautious but be brave. We are on the right side of the math, the facts and history. Now is not the time to be distracted by MSM pundits and shills who cling to the power that the status quo bestows upon them. Trust your instincts but do not get cute or get greedy. In the end, this is about survival, not profit.

More later if I can stand it. After today, I may need to shut the MacBook down for a few hours! TF

7:15 EDT UPDATE:

As expected, the criminal C/C/C just announced this evening a margin hike in gold, effective at the close of business tomorrow. Read more here:

https://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv11-279.pdf

As you might expect, gold has pulled back on the news. After a high of 1818, it has pulled back to 1804. I doubt that big money Asian and European investors give a rat's ass at this point about Comex margins but you never know. Watch carefully this evening as this is sure to heighten volatility.

Though we all remember the 5 consecutive silver margin hikes in May, don't forget about the first silver margin hike last November. Silver corrected from $29 to $25 in five days but, as you know, it went on to double from there over the next six months.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  376 Comments

· Aug 10, 2011 - 8:38pm

Good sign?

 In the past two hours, S&P futures have reversed from down 6 pints to up 6 points and news hit about the gold margin hike. However, Dec11 gold is unchanged at 1808. A good sign, indeed.

· Aug 10, 2011 - 8:40pm

Sorry, st

I've removed the golden calf. I didn't like it, either.

Harald · Aug 10, 2011 - 8:41pm

deleted

deleted

ewc58 · Aug 10, 2011 - 8:41pm

Living la Vita GA-TAH!!!

Friends, if we weren't already pumped up enough, Murph's got to go to this great JFK quote tonight. LOVE that guy... Here's what Bill had ro say about the day that was...

"Gold Rules

"Today, we need a nation of Minutemen, citizens who are not only prepared to take arms, but citizens who regard the preservation of freedom as the basic purpose of their daily life." … John F. Kennedy

GO GATA!

This commentary was the last thing I had planned on my vacation, but with so much going on what can I do? All good, having a great time in Cannes and on my way in the morning to hook up with Sir Harry Dobson, a good friend and chairman of mega-GATA supporter Kirkland Lake Gold. What a hoot Harry is, whom I last saw days ago at our conference in London!

Gold is going to go bonkers. Nothing new there. Silver is going to go more bonkers. So can anyone out there tell me how JP Morgan can publicly call a possibility of $2500 gold by year end and still be massively short silver? This is the joke of jokes and yet one more anecdotal example of how right we have been, and are, about what the prices of gold and silver are going to do.

Gold has gone up so much so fast, it is due for a rest. Silver is another matter. JP Morgan’s silver suppression scam has gone off the charts. The entire CFTC board ought to be thrown in jail in the years to come, with the exception of Bart Chilton.

If you have been a Café member for a long time, you know how much trouble The Gold Cartel is really in right now. James Mc…

Greetings

Bill,
I hope you are enjoying your stay in the S of F. I will be brief here, and let you have some peace and quiet.

* The 1% and 2% rules have obviously been smashed, at least for now. Amazing that it happened very next trading day after my presentation in London. As you know I think this can be a seminal event. There will no doubt be further attempts at getting back control, but this feels like the game changer. The fact that it closed on Monday at + $61.40, or + 3.72% sure looks like a failed control band. Today will be important, as we've seen isolated days the past decade where it violated the rule, only to quickly get back under control. The fact that it briefly rose overnight another $68 sure looked like a failed Working Group op. However at the moment it is up... you guessed it, 0.99% as I type.

* The leverage in gold is now approaching 30 - 1. The CME so far continues to give no indication they're in any mood to raise gold margins. They in fact went so far as to go on CNBC late last week to DENY the rumor they were going to raise margin. That alone was pretty extraordinary. I don't remember last time when gold leverage was 30 - 1, and this bears watching. If this is indeed the indirect consequence of a failed silver suppression then things will get interesting very soon in silver. Silver would have to be trading at $129.50 to have the same leverage being afforded gold. They have kept an iron clamp on silver margins for the past 3 months, and the results when this silver suppression ends should be quite spectacular.

* Treasury futures leverage is now 40.56 - 1. Whenever any leverage exceeds 40 - 1 there eventually comes a violent selloff. That would make sense in the context of its newly-crowned AA+ debt rating. I've never seen a 30-year AA+ debt instrument offering 4.3% yields. Yet another imbalance waiting to be rectified.
>James Mc

Behavioral Finance Report

*This is just what MIDAS said months ago was going to happen. This is what you know in advance when you live on Planet GATA:

In fairness to Bill, if you'd like to keep reading, just click here to get a free 2 week trial. Just think, you are just moments away from silverfoil hatter status, so GO FOR IT!!! GO GATA! GO TEAM TURD!

GO TEAM TURD, TO GATA!

Well, ya better GAT going then. Off you go

· Aug 10, 2011 - 8:43pm

one more thing

 The gold margin hike may be an inducement for traders to buy silver.

Silver's margin hikes are well-documented and clearly over since more were not announced, even after the volatility of this week. With the uncertainty of future margin hikes nagging at gold traders, will some flock to silver? Worth considering...

TexAsh · Aug 10, 2011 - 8:44pm

10% two days in a row; bring on tomorrow

Yeah, I took a big hit May 1st. So it was with trepidation that I put a toe in the water yesterday and today, pulling out as soon as I'd made 10% each day. But hey - if only I could make 10% every day, right? Thanks Turd.

Bring on tomorrow.

Larry · Aug 10, 2011 - 8:46pm

Paul's stocks

I've seen that but thanks for posting again. I own about half of the names Ron has on his list. I suppose that's a good thing. Somehow it gives me comfort. Mine have done better. Hopefully his will too... and he'll have to sell them after the primaries. 

bbdgoco · Aug 10, 2011 - 8:48pm

Dylan Right-on Ratigan

Dylan was inundated with emails after his right-on rant went viral.

So set up a special email to any who want to comment. I did.

Here it is: madashell[at]dylanratigan[dot]com

cpnscarlet TF · Aug 10, 2011 - 8:51pm

Thanks TF!

Worshipping the Golden Calf is way out of context.

We are seeking truth and liberty. Gold says nothing, but tells no lies. Owning Gold is being your own central bank.

Blight Master · Aug 10, 2011 - 8:54pm

Amazing how fast the talking

Amazing how fast the talking heads at CNBS turned onto gold... then turned right off....right as margin hikes are announced, but they didnt mention the margin hikes, they cut to Cramer yelling about how horrible miners are and then played continuous clips of Jamie Dimon talking about how awesome things are... lulz.

Gramp · Aug 10, 2011 - 8:56pm

Again, Thank you ALL for this

Again, Thank you ALL for this Platform. 

 ZH is informative, but comments can be a bit overboard.

A more goal oriented group here.yes

I am only a speck in this financial Tsunami ... Reached for a (PMs) "life jacket" while many around me were oblivious to the storm on the horizon... How fortunate I am to have swam to the "Lifeboat".... found here, and have the other "Survivors" help pull me from the Cold water! A hat tip To ALL!

GoldenTurds · Aug 10, 2011 - 8:57pm

Dylan Rocks.....

Dylan Ratigan (rightfully) loses it on air
Larry · Aug 10, 2011 - 9:00pm

Turd, good to see...

...you back in the short-term optimism mode in silver. 

Your post today was a classic on all fronts. Inspired. Well done. Spot on. Thanks.

¤ · Aug 10, 2011 - 9:01pm

@Russiamerica

Welcome!

Turdle GG · Aug 10, 2011 - 9:01pm

Dylan Ratigan

As a non-American, I've always been shocked that politics in the US runs on a pay-for-policy basis.

With lobbying (aka BRIBERY) at the heart of the legislative process, what hope is there?

Dylan Ratigan has expressed the problem the clearest way I've ever heard

redwood · Aug 10, 2011 - 9:08pm

Russiamerica

New as well, but welcome aboard.

UncleFester · Aug 10, 2011 - 9:11pm

Thoughts on Silver

Many speculate here about silver, even Sprott thinks silver is the play for the next decade. Maybe so, maybe so. But some double-edged thoughts to consider:

There is industrial demand for silver. This gives silver a base. If investment demand ignites and is added to the base, silver could indeed take orbit. However, one must take into consideration why the investment demand will explode. If the investor demand is a flight to quality in the midst of a currency collapse, understand that a currency collapse is a commercial collapse! Investor demand increases, but industrial demand falls and the base suffers. When its currency price rises, industrial overhead rises and commercial production slows. As more and more people buy and hold silver, it's at the expense of the industrials, no? How much will the investment demand fill in the cracks in the base? Will it overflow and if so, by how much? As currency price rises and industrial demand slackens, will saved silver liquidate and the price fall? This is the basis for the tight market in silver, this is the basis for the volatility. Everyone speculates. The same is true for oil, wheat, corn, etc. Silver's price movements are very much commodity price movements, EE raids notwithstanding. 

Gold is different, gold is unique. It is precisely because gold is not an industrial metal that gives it strength in a currency crises. Its primary function is not commercial! The basis for demand is investment, long timeline multi-generational investment. The basis is pure savings! Gold is the reserve for every sovereign. It has been said here before, act like a sovereign and become your own central bank. Gold's price movements are not as a commodity. When its currency price rises, its stock doesn't flow! Only new gold can be used to fill the demand, but new gold is dependent on commerce, dependent on a functioning currency. Buy and save gold and you hurt no one, buy and save wheat and you'll have hungry people raiding your pantry. Buy and save gold, commerce is unaffected! Gold is a liberator, and a libertarian metal.

PS. I still like silver, but I know I'm speculating. Know thy self.

Fester

Nick Elway · Aug 10, 2011 - 9:13pm

RE "gold has pulled back to 1804"

@Turd

I find poetry in your words!

"just announced this evening a margin hike in gold"

"After a high of 1818, it has pulled back to 1804."

Who'd a thunk it?

Larry · Aug 10, 2011 - 9:14pm

For Dark Purple Haze

This one is for our very own DPH, for all the great vids he finds to entertain us. Thanks Turdbro.

https://www.youtube.com/watch?v=-J4O2-nsFBA

redwood · Aug 10, 2011 - 9:15pm

http://seekingalpha.com/artic

https://seekingalpha.com/article/286379-why-precious-metal-stocks-will-o...

This is an average article imho, but I think more to the point one needs to distinguish between the physical metal as insurance vs. miners as investments. Of course both can act bilaterally, but a distinction that the author doesn't make. In the troubled times ahead it would be an advantage to have both if possible.

BagOfGold bobby · Aug 10, 2011 - 9:18pm

bobby...

You must be talking about Michael Smedely with Mogan Meighan & Associates!!!...

Bag Of Gold

Long John · Aug 10, 2011 - 9:18pm
redwood · Aug 10, 2011 - 9:19pm

p.s.  Of course the article

p.s. Of course the article acts as an advertisement for the big gold miners. While they've performed well today, the junior performers are right behind them.

cpnscarlet UncleFester · Aug 10, 2011 - 9:20pm

Well Done

Excellent Post. Sure, we've heard it before, but thoughts like these keep us sane in the midst of madness. I'm 70/30 Au/Ag and quite comfortable. I'm staying here.

MIDDIE · Aug 10, 2011 - 9:21pm

@ GoldenTurds

That was a great replay. Thank you; a short, sweet, direct message. That was good. Hat Tip to you.

stoneeh · Aug 10, 2011 - 9:27pm

Dylan Ratigan

Powerful stuff. Curious how long it takes now til he's off the air. But yes, every one in the western society needs to hear/see that video.

redwood · Aug 10, 2011 - 9:35pm

Dylan Ratigan

I'm assuming this has already gone viral? Thanks Golden Turds.

vamoose1 The Doc · Aug 10, 2011 - 9:36pm

Blythe

Blythe is pretty, a ballbuster but great teeth. British girls are hot, bone structure, and generally dirty, trampy snoots, a cute combination, i always liked them.

How to uncap silver??? Silver traded ( admittedly in a corner) at 50 in 1980, and here we are 31 years later at 39, well, wtf is this? How will we ever get a print in Area 51, launch country , as i call it, wistfully with CME and CFTC bot and paid for. HMMMM, and lets hope this margin lift on gold tonite, is not another drive by shooting as in Sunday night Mayday for silver. I digress.

An expert will correct me, but a cruise missile has either 28 or 48 pounds of silver in it, which i find delightful, since recovery is likely to be minimal. All silver recovery is minimal , as we know, the amounts are to0 miniscule and too expensive to bother, at least at 50.

How to uncap silver. Well, i have heard it argued that silver, while occurring somewhat more prolifically , could be described as a rare earth metal.

WEll, here I am thinking China, who clearly are pulling silver ito their country, but very carefully so as not to disturb price.

China has something like 95 percent of the worlds rare earth metals, a monopoly, which they have recently enforced, and the prices of many of these exotic metals are up 10 to 20 times in recent years, mostly beecaus they are needed for every military application imaginable. The Unite States would be rowing their carriers and operating on horseback without these goofy metals, its a very serious vulnerability. including silver.

Now the current policy, executed at arms length through JPM by Uncle, is to stand on the silver price buy the regulators, to make bloody sure nobody in the hoi polloi ever gets the idea that silver might be money, and piss on the paper.

But if silver inventories, (exbracelets and necklaces in India) have in fact fallen from 11 billion ounces during the Hunt Corner in 1980, to ballpark,, one billion, as credible sources aver, and we can all see what is going on as Comex inventories collapse, well, how clever is this.

China is very clearly encouraging their myriad mobs to buy silver, inhaling it discreetly worldwide ....if they need it for their military, well, they will just take it.

By contrast the United States is worried people might mistake it for money.People like us.

Were it I at the Pentagon, I would be a hell of a lot more worried about operating my weapons systems in the military, which do not work without any of these rare earth minerals, particularly including silver.

I might be very tempted to get off the silver offering a nd make those Chinese pay 500 bucks for their strategic silver, in other words a RADICAL POLICY CHANGE . The choice is admittedly awkward, until the first Chinese carrier steams into San Fran Harbour.

It would require a big PR campaign, blah blah , silver is nothing, its just an industrial metal, zzzzzz.

But any alert silver trader , knowing that the PR campaing to devalue the currency role of silver and condition public opinion that its just an industrial metal, would want to keep a weather eye out, it would be the trade of the century if such a policy choice was compelled.

Notice: If you do not see your new comment immediately, do not be alarmed. We are currently refreshing new comments approximately every 2 minutes to better manage performance while working on other issues. Thank you for your patience.

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