Sack of Nonsense Redux

It was with increasing incredulity that I file this update today.

I sit here in wonderment, considering how and why all of the current MOPE and SPIN can be so easily digested. Am I (are you) one of the few able to see this crap for what it is? Seriously, how is this not reported upon and/or credibly discussed? One day, the Fed rolls out Fisher or KosherDakota to talk down QE expectations and talk up the dollar. As soon as this causes a breakdown in the nearly perfect S&P advance since November, The Bernank or Evans or Yellen gets trotted out to "reassure" markets that ZIRP will continue indefinitely and/or that QE3 may be just around the corner.

Trader Dan summarized this quite well in a short post from earlier today.  Below is the chart I lifted from Dan's site which pretty well explains everything.


So, now there's talk again today of "Sterilized QE". Unfreakingbelievable. Santa chimed in first earlier today:

My Dear Extended Family,
The stock market takes a one day multi-hundred point drop and we hear a new round of sterilized QE is on the table from a Fed governor.
What kind of fools do they take us to be?
QE sterilized is a world class oxymoron similar to Jumbo Shrimp and the Great War.
Consider what will happen here and in Euroland as all of this foolishness hits the fan. The answer is good old debt monetization.
QE to infinity is as sure as death and taxes.

Many of you will recall that yours truly was already pushed to the edge of madness by this concept about a month ago. You can review the entire post by clicking the link but I'll reprint below the primary point.


OK, onto the news and there's really only one thing that I wish to discuss. It's this:

Now, I'm going to warn you. If you are easily offended and do not like the use of profanity, please look away from your screen for a moment.


For the sake of clarity, I'm going to rely again upon my old friend, Mr. Black Dot Chronology:

*All of this...all of the QE, all of the ZIRP, all of the's all about funding government debt.
*The only way The Great Ponzi can now be maintained is through low interest rates. Simple economic growth cannot and will not produce the tax revenue necessary to "grow our way out of it".
*If rates move higher, the economy will slow even further, exacerbating this problem.
*More importantly, if rates move higher, the interest on the accumulated debt will take up an accelerating portion of the U.S. federal budget.
*QE1 and QE2 was the method through which The Fed purchased U.S. bonds outright, thereby creating an artificial demand for U.S. government paper and keeping rates low.
*ZIRP and Operation Twist is the method through which the Fed continues to suppress long-term rates. It's been estimated that the Fed is currently soaking up as much as 90% of the 10-30 year auctions.
*ZIRP and Operation Twist require regular, "traditional" demand for short-term U.S. debt. This demand is managed through the creation of uncertainty regarding Europe, Iran, etc.
So, now, here we sit. Three years of this centrally-planned fiasco and The Fed is pressed back against the wall again. Their Primary Dealers have balance sheets that are completely chock-full of treasuries and a PD cannot raise funds to continue buying even more without a) selling some of their current holdings, OR, b) getting some fresh, new cash from The Fed to use. Option "A" is off the table because selling holdings will push down price and, as you know, lower prices means higher rates and, as you know, higher rates cannot be allowed. But Option "B" doesn't look too good, either. Calling something overt Quantitative Easing isn't going to fly in an election year and, additionally, much time and energy has been spent convincing The Sheep that the U.S. banks are completely healthy and recovered. Giving them billions of dollars to spend on treasuries might dispel that myth.

So, The Fed rolls out this idea yesterday. In this new program, The Fed is going to buy bonds directly from the PDs. In return, the PDs will get "digital credits"...CASH. The PDs will then use this CASH to buy more U.S. government bonds and we are supposed to believe that because these are "digital credits" and not CASH, none of this NEWLY-CREATED MONEY will ever make it into the system. WHAT?!?!?!?!?!?!?!? Let me see if I've got this straight. The PDs will take this new money and loan it to the U.S. government which will, in turn, use the funds to cover their deficit spending on items like transfer payments, social programs and military hardware. This NEW MONEY will move directly into the U.S. economy, further devaluing the U.S. dollar and create even more cost-push inflation. Period. End of story. Done deal.

But that's not what The Wall Street Journal and CNBS would have you believe. The Fed told them that this was a "sterile" process, a zero-sum event. The Fed will exchange "digital credits" for existing bonds and that's it. Move along, please. Nothing else to see here. Again, and I apologize for the profanity:


But don't just take my word for it. I've searched for other opinions on this. Let's try these two:

Anyway, it's quite clear that the lies, obfuscation, manipulation and MOPE will never, ever end. You must continue to buy and hold physical precious metal. It is your only financial protection and against the certain, impending disaster that your "leaders" have created.


There's not much more to say than what I said last month. QE is QE is money creation is currency debasement. The Fed can MOPE and SPIN all they want but it is what it is. Perhaps the knowledge of this impending program is what has awakened gold over the past five days. After the $58 drop last Tuesday (which led to a bit of Turd capitulation:, gold has rallied five consecutive days for a cumulative total of $67. Within that rally, we've seen at least two, massive surges which squeezed some shorts and popped price even further. Is this a sign that another QE announcement is actually coming later this month? Maybe, we'll see. For now, however, it is a sign that gold is continuing to firm and bottom here. We can't get overly excited until gold closes above 1685 and is once again back above its 200-day moving average...but...things are definitely looking better than they were last week. Tomorrow is a big day. To close the week over 1685 and the 200-day would be huge and would seem certain to trip the WOPRs back into "BUY" mode. Keep your fingers crossed.

Silver is looking better, too, of course. It's still too early to get carried away but, if price can be sustained above $32.50 and $32.60, the stage will be set for another assault on $33. Like gold, though today's move is fun, no one should get too carried away until silver is solidly back above $33.


Here are a couple of other charts I've been meaning to unload on you and today seems like as good a time as any. First, this doozy. This chart shows the total return of buying and holding gold over the past 11 years (the red line) and it also shows what your return would have been if you had been consistently able to buy on the Comex close, hold long until the next Comex open, go short at the Comex open and then cover and go long again at the next Comex close (the blue line). Quite a difference in return! And it goes to show you how horribly the Comex manipulates prices downward and the deleterious effect it has over time.


I lifted the next chart from a Forbes article I read this morning. Here's the link:

This chart shows the average monthly returns of gold since this current bull market began in 2000. Note that April and May are usually pretty good months.


And did anyone notice the Goldcore story yesterday about China's gold imports for February? 40 metric tonnes? Are you kidding me? And they only imported 3 tonnes in February of last year? Nah! Nothing to see here! I'm sure they're simply buying up the barbarous relic so that they can unload it on their gullible citizens at a profit. China couldn't possibly be executing a long-term plan to accumulate gold in order to use it to back the renminbi. And of course, a gold-backed renminbi would never be considered a possible reserve currency replacement after the demise of the dollar. Nah. No way. Again, nothing to see here. Move along, please.–-pboc-likely-buying-dip-again

Just a couple of other items. First, crude is rebounding after finding a solid floor near $101. The main level to watch now is $105. "What was support becomes resistance" is always going to be true and is the case again here in crude.


And The Pig has rather quietly reached another moment of significance. It once again finds itself perched upon the long-term trendline that has supported it since the advent of "Operation Twist" last summer. A breakdown here would turn the chart decidedly bearish so watch the next few days of action very closely.


Lastly, today is the 70th anniversary of the birth of The Turd's mother-in-law. To mark this blessed event, I thought I would include below a picture of her, in all her glory:


(Good thing she has such a fine sense of humor smiley)

That's all for today. Keep your fingers and toes crossed overnight. Tomorrow could be great fun.   TF


¤'s picture

Some Breaking News

Just heard on TV the North Korean rocket was launched and it was not successful.

Supposedly made it off the launch pad and not much further then that.

Stay tuned because something tells me they'll react like it was taken out. Maybe it was?

GoldMania3000's picture

CNBC interviewer

Hi stupid CNBC interviewer that interviewed Blythe. are you watching these boards too. you and your cnbc stupid people are really stupid. how stupid are they? so stupid that when they take a dump they take the toilet paper and wipe their eyes with it.

pforth's picture

Cool! @Xty

I live in Barbados and my last name is Forth.. but I've never heard of the "Accession of Lord Seaforth".   Where did you get that history of Barbados doc?

Dr G's picture

Who would take the rocket

Who would take the rocket out? Japan?

Margin requirements being lowered is just a "sale" to get people to shop at the CME store. Like I tell my wife, a sale doesn't mean you have to buy the product. If you don't buy you are saving more than buying an item that is on sale!

So buy phyzz instead!

exiledbear's picture

Hey, I think I'll be glad that gold won't close at 1660 tomorrow

Although now that I've said it, watch gold close exaclt at 1660 tomorrow.

El Gordo's picture

100 oz bar at $0.49 over spot

Monarch has a few assorted 100 oz bars available at $.49 over spot.  Too rich for my blood, but probably a good deal.

Xeno's picture

Lower Margins??

Hmmm... sounds like a set-up but we already know that. But hey, won't JPM and the short shorts be able to raise their stop loss to a higher price with lower margins?

The Turd Brigade is well positioned.

silverkid420's picture


DOES THIS MEAN A SALE IS COMING or were off to the races for a higher price???

silverkid420's picture

any advice turds?

any advice turds?

TomMack's picture


All I remember about it was that the passenger door was larger than the driver's.  Also every one I ever saw had a dent or two somewhere!

Dr Jerome's picture

cloak & dagger secrecy

Dr. G

If I recall, the triggering of the CDS contracts on Greece was hardly mentioned in the MSM. The whole event slipped by without alerting the masses.

Magpie's picture

Holy crap

I saw an ad on a site I was just reading and Apmex wants 1876.19 for a gold Eagle.  Sheesh, my LCS only charges Kitco ask + $87 for Eagles, and $57 for 1 oz. bullion.  24hgold has gold at 1675.71 right now.  What a bunch of crooks.

Fred Hayek's picture

@Xty re: Volatility

What you say fits *exactly* with the work of economist Hyman Minsky.  What he said was that eliminating normal volatility in markets will only create much greater risk of eventually suffering market destabilizing volatility events.    Minsky's work is being promoted anew by guys like Steve Keen, the economist who had a very public sort of debate with Krugman.  TPTB hate Minsky because an implicit corollary of his ideas is a puncturing of their belief that they can actually create a "great moderation" or purely stable era of good times.  Also, Minsky takes the idea of debt seriously.  Guys like Krugman think governments can push stimulus to the Nth degree deficit spend to the Nth degree with no repercussion.  They don't want to admit that you can't just ignore some of the facts of reality.  Minsky's far from a free market promoter but he was a hell of a lot more honest than fools like Krugman.

Tube's picture


I'm looking right now and seeing  1757.39

recaptureamerica's picture

Who in their right mind would

Who in their right mind would use CME after the MFG robbery? No wonder numbers are down. Maybe people are finally sick and tired of being defecated, urinated upon and robbed by touchscreen.

Magpie's picture

The Apmex price

was from an ad on a news site......I'll assume they're hoping they can catch some unsuspecting dupe who will just click through and hit the buy button.  The price in the ad just sorta made my eyes bug out, that's all. surprise

¤'s picture

Gimee Shelter

Full movie.  Some subtitling, but not during the concert.

Lots of vids and other fun stuff at this link...

TomMack's picture

mechanics of rolling JPM silver short?

I am just curious that if JPM has such a large percentage of the market, won't they have to eventually roll their futures out into the distance?  That would mean buying the front month and selling the back (backwardation?)  Since the market is so thin (Open Interest wise), this would probably have a big positive price effect, which would not be good for JPM short position.  Perhaps lowering the margin will get more volume and open interest for JPM to 'help' them with their roll.  this would get more sellers for them to roll their position against.  Big positions get unmanageable after a while.

Bobbejaan's picture

Vietnam goes nuclear on gold

Vietnam is frequently cited as an example of somewhere which acknowledges gold’s role as money; it is a medium of exchange and is used as such every day. Houses come with two prices in Vietnam; the price in dong and the price in gold – gold is most often the favoured form of payment (Thiers’ law in effect).

Up until last week, three forms of money circulated in Vietnam: the dong, the US dollar and gold. However, in an attempt to ‘stabilize’ the economy, the government and the central bank have announced a decree which will continue their mission to restrict the gold market by banning its use as a medium of exchange and issuing 7 ‘solutions’ in regard to bullion related activities.

The idea behind the 7 solutions, or measures, is for the government and central bank to gain more control over the gold market and reduce ‘goldization’, the practice of replacing the dong with gold in transactions.

... <SNIP>...

The actions of the government and the SBV beautifully demonstrate the fear authorities have of the threat of gold over a national currency. But even more so, it shows the power of individuals when they have the right to choose and how much this concerns politicians and central bankers.

In the US, Dr Ron Paul is famous for frequently asking Ben Bernanke to allow US citizens to spend in gold and silver. Unfortunately it is still not allowed, this can only be for the sole reason that it would demonstrate the lack of faith in the US dollar, as seen in Vietnam with the dong.

In the UK, Douglas Carswell MP is campaigning to repeal legal tender laws. At present UK citizens may spend in what they like, but realtors will only accept what the banks can legally accept – British pounds. In Vietnam they are heading down a similar path, in May last year it was announced that within 2 years it will become illegal for banks to accept gold on account. We are now looking at currencies which are no longer backed by confidence but by authority and the law of the land.

The actions of the Vietnamese citizens are evidence enough that gold is money. One does not need a government to tell us so. People are worried that the promises of governments and central bankers to be able to pay is something which they cannot manage; the debt burden is now so great worldwide that they may have to rely on further promises.


Tube's picture

Triumph @ OWS

Tube's picture

RE RE Apmex price

Made my eyes bug out too.  Has to check their website to get my eyes back in..

Luigi Draghi's picture

Gold may be affected by a

Gold may be affected by a global deflation due to counterparty risk aversion and the inflationary force of flight to safety. The last will ultimately win and supported by the hyperinflationary force of unlimited liquidity reaching the market and undermining the currency.

In the meantime, Spain is a mess. I encurage everybody to see the videos in my post about Spain. They paint a very worrying scenario than has not yet been unleased:

OC15's picture

How stupid do they think we are?

99% of America doesn't even know who Ben Bernanke is.

99% of the remaining 1% think he's trying to help us.  THE END

It's not that they think we're stupid.  It's that they think those of us who understand don't matter. 

Once again, in our own little world I think sometimes we start to believe that there are more people like us than there really are.  For every Dan Norcini, Ned Leyland, Ranting Andy, John Williams, etc. there's half a million smart phone gazing, facebookstalking, zynga playing, favorite TV show DVRing, barhopping, home and garden partying, working for the weekend, paycheck to paycheck living zombies.

How long does it take you to get a million hits on your site Turd?  Meanwhile, this clown Ray William Johnson gets 2 million hits within hours of uploading his latest dumbass video on youtube.  I rest my case.

WhyMeLord's picture

Understanding the $60 Trillion Shadow Banking System

There is an alternative source of money in our universe. It is used by the Zombie Banks.

You would be wise to learn about how it works...

Securitization - The Undead Heart of the Shadow Banking System

Here is a study of the shadow banking system, and what changed that helped to fuel the credit bubble and the financial collapse.
When Securitization was invented it soon wrested control of the money supply away from nations and gave it to the banks. Nations still printed and controlled their currency. But securitization gave banks the ability to print their own currency. And this new securitized currency, based on debt, was theirs to print, control, spend, and ultimately to debase. In short, it gave banks a power to rival nations. It is worth, therefore, understanding its outlines at least.
DavidSilverSwe's picture


so barhopping and watching tv shows are only for dumb people?

come on. and parties too?  what a view of humans that is.

Duke's picture


Eighty Fifth!!!!!!!!!!!!!!!!!!!



If yesterday was risk off on concerns Europe is sinking following last week's disastrous Spanish long-term auction, today is risk on after Italy managed to successfully place 91 and 361-Day bills, in line with expected amounts, if at much higher yields, and lower Bid To Covers. Specifically, Italy sold €3 billion in 91 day bills. The yield soared from 0.492% on March 13 to 1.249%, while the Bid to Cover plunged from 2.23 to 1.81. Same for the 361-Day Bill auction, where €8 billion in Bills (in line with target) were sold at 2.840%, double the yield of 1.405% from a month ago, and a Bid To Cover just modestly better: from 1.38 to 1.52. As usual the market continues to blatantly ignore the thin white line of bond issuance: every Bill and Bond auction that matures within the maturity (3 Years) of the LTRO will succeed: period. It is the ones maturity longer than 3 years - such as Spain's last week - that are the test. Comparing one to another is apples and oranges. But risk on don't care, and as a result futures are surging disproportionately, even as Spanish and Italian bonds are just modestly tighter following the bond results. But we will once again meander whack-a-mole style from auction to auction until the market is reminded of this little nuance. In other news, Iran just announced it is following its cut in Greek and Spanish exports, by halting exports to Germany next, while continuing the theme of 2011 Deja Vu, Indonesia's Aceh was struck two hours ago with a massive 8.7 Earthquake, with an 8.8 aftershock off Sumatra, coupled with a tsunami warning. Luckily, there are no initial reports of casualties or major damage.

For the rest of the overnight summary we go to BofA:

In focus

Global factors account for the lion's share of price variation in the major asset classes. Therefore, the importance of having a grip on global economic conditions in real time can hardly be overstated. In this context, the GLOBALcycle, our new global economic conditions index, is a significant boost to our toolkit. Besides closely tracking the ups and downs of the global economy, our indicator - unlike other global coincident indices - monitors the global economy in real time. To read more click here.

Market action

Asian equity markets finished mostly lower as Euro area worries caused the regions investors to go into risk off mode. The Hang Seng fell the most falling 1.1% while the Japanese Nikkei lost 0.8%. On the flip side, the Shanghai Composite finished 0.1% higher while the Indian Sensex finished flat. The Korean Kospi was closed today.

In Europe, equities are rebounding from their two month low as investors dive back into the market to pick up bargains. Leading today's advance are the region's automakers and banks. In the aggregate European shares are 0.6% higher. Blue chips are enjoying a 1.1% lift while German and French listed firms outperform the broader market as well, up 1.0% and 0.8% respectively. Shares trading in London are lagging behind the market aggregate up only 0.3%. At home, futures are pointing to a strong rebound from yesterday's sell off. The S&P 500 is set to open up 0.8% higher.

In bondland, Treasuries are backing up across the curve. The five, ten and thirty years issuances are all 3bps higher with the 10-year yield currently trading at 2.02%. In Europe, peripheral yields are rising. Spain's 10-year note is approaching 6% as the note's yield rose 16bp today to 5.78%. The Italian 10-year is up 21bp to 5.45%.

The dollar is weakening against a basket of other major currencies. The DXY index is 0.4% higher. Commodities are mixed with WTI crude oil up 67 cents to $101.70 while gold is down $3.85 an ounce to $1,656.05 a barrel.

Today's events

It will be a busy day for the US economics team. At 8:30 am, we will be sorting through two economic releases: import prices for March and the trade balance for February. Import prices are expected to rise 0.7% in March, stronger than the 0.4% increase in February for this non-seasonally series. However, as earlier jumps in imported crude oil prices disappear from the annual calculation, the year-on-year growth rate should decelerate to 3.2% from 5.5% in February. We expect little change in the trade balance in February, with a deficit of $52.5bn.

stealthbear's picture

Jim Willie article

New one over at  Sorry, don't know how to post a link.sad

Duke's picture

Eighty Sixth!!!!!!!!! My goal

Eighty Sixth!!!!!!!!! My goal is to be one of the first 10!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Be Prepared's picture

Golden Eye of Hurricane - Jim Willie (April 12, 2012)

Golden Eye of Hurricane

What an incredibly complex confusing and treacherous month. It can be safely said that 80% of the activity is almost totally kept from the public. The financial system is breaking in an accelerated fashion. Compare to some grisly horror movie where a man is strapped in a chair. The more he moves, the tighter the bindings pull on his gasping throat and pressed nether stones. The most significant two factors at work are the Iran sanctions and their powerful backfire, and the futile efforts in Europe to stem the banking center collapse. The anti-USDollar federation that spans widely across the globe is gathering strong momentum. Financial aggression is being met by financial alternative development. As Greece moved off the daily news fabrication factory, the reality of a collapse in Spain and Italy has moved to the front center of observations. Meanwhile, the American nitwits continue to argue over Quantitative Easing when it never stopped, and in fact, went global under their noses. The US news machine, dominated by the syndicate, churns out absurdities after more nonsensical bites on an economic recovery. The subprime loan machinery has ramped up. The retail factor does not tell of strength, but of weakness. Spending on consumption does not indicate strength, but a path to ruin still not well recognized. The gap between reality and reports is diverging.

Back at the gold desk, another cartel member kill is in progress. A string of UBS-type gold arena deaths is the biggest untold story of the new decade. The UBS rogue trader story was a total fabrication, written and staged to conceal the removal of all UBS gold from their reserves inventory. They are a dead gold player. The gold community, even LeMetropole Cafe and GATA, appears to be missing the coalition kills taken place in sequence with each paper gold ambush. If the cartel wishes to drive down the paper gold price, then they must deal with the consequences of having one more cartel member bank offered on the physical altar in a death sacrifice. They are vulnerable from sovereign bond positions and weak currency positions. In the margin call vise, they must forfeit their gold, but in a long slow process as truly enormous physical gold orders are being filled over a pyramid of prices lower than the cartel bank wishes. Details are scanty, but the trail can be followed to some extent by false stories to cover the damaging tracks. The press did a wretched job in checking the facts on the UBS rogue story. The loss was over $6 billion. The trades were all approved at VP level. The trap was laid and UBS entered with both feet, the consequence for which was being expelled from the gold arena, probably forever, in a total loss of its gold bullion. No wonder the press did not report the actual story. It would have been a monster bull story for gold. If Barclays or Royal Bank of Scotland or Bank of America were having their golden blood removed on a table, with straps in place for directors of their gold desks, and hot pokers applied by coalition forces to extract their gold, the outcome dictated by incredibly insolvency and margin call vulnerability, the effect on the gold market would be magnificent. Such events are in progress in my opinion, based on some juicy information feeds. Rather than divulge the entire details of the cartel kill, the coalition prefers to move to the next victim in the Wall Street & London cesspool of finance.

What follows will not be presented in great detail. That is saved for the Hat Trick Letter reports, where research has come across magnificent events in progress. As the calm spreads like a fog over the financial sphere, the level of risk rises. As the phony recovery stories propagate like a disease from the host, the level of risk rises. As the US political race takes center stage and the stakes increase, the level of risk rises. Events are catapulting in a loose coordination that is very difficult to observe, except for the quicksand in Spain. <Rest of the Article>... Here you go StealthBear

stealthbear's picture


Thanks B.P.!  smiley

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