Getting Out of Hand

Thu, Dec 20, 2012 - 10:09am

Well, what are ya gonna do? I suppose you can be angry with me and everyone else because I certainly don't know of anyone who saw this coming. But the thing has taken on a life of its own now and there's really nothing anyone can do about it.

Would it be worth the time to sit here and bang out all of the reasons again why you own precious metal? Do I need to discuss the fundamentals again and all of the attendant rationale for doing what we do? Nah. Probably not. You've heard it so many times now I'm sure you could repeat everything in your sleep.

I could probably tell you about the short-term technicals and how oversold they are. Just a couple of days ago I mentioned that major selloffs typically don't begin from the oversold levels we were at then. And now look at things!

Maybe I should even waste a few moments going over the physical demand in London and how this will, inevitably, turn paper price around, lead to a stabilization and then a rebound. I could do that but why? You already know that.

In the end, this is nothing new. We saw this in May of 2011. We saw it in September of 2011 and again in December of last year. We saw it in February of this year, too. The metals rally. The Cartels sell all the way up by creating unlimited amounts of unbacked, paper shorts. Eventually, the rally runs out of steam. Some profit-taking ensues. The Cartels give things a shove and down she goes. Soon, the momo-chasing HFTs take over and really drive price down. Into this selling, The Cartels cover nearly all of the shorts they created on the way up until, presto/chango, we are right back to where we started.

Wash. Rinse. Repeat.

Only two things can possibly break this cycle:

  1. The toothless, hapless and corrupt commissioners of the CFTC will, one day, have to act upon the undeniable evidence before them. (Don't hold your breath.)
  2. Physical depletion continues until the market simply breaks. (And this is where we come in.)

Your job today is to relax. Yes, this manufactured event will likely continue but it will also end in the same way the other manufactured corrections have ended. Soon, there will be a very sharp, snap-back rally. It will emerge suddenly and catch traders by surprise. That rally will run out of steam and the shorts will attempt to re-assert themselves. Price will dive again but, ultimately, fail to make significant new lows. From there, a double or reverse H&S bottom will form and price will begin to recover.

In the meantime, head down to your local coin shop and add to your stack today (if they'll actually sell to you at these discounted prices). The only way we can be assured of victory is by taking action ourselves. The fraud that is the CFTC cannot be counted on to help us. Only we can help us.

Keep the faith. Persevere. Be strong and BTFD (again).


About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 20, 2012 - 10:38am


perfect(?) timing on a semi-big purchase in goldmoney(Silver)

maybe add some minilongs for the hell of it too.

Dec 20, 2012 - 10:39am

Same thing as last year - 2011

Like Turd said, wash, rinse, repeat.....

Turd - The haters will be out in full force but there are plenty of folks here that got your back brother. Don't let the bastards get you down :)

Dec 20, 2012 - 10:39am

I've said this before and I

I've said this before and I will say it again: Any entity that is capable of providing this much liquidity to a market and that can keep interest rates pegged at zero or close to zero can do whatever they want to the paper price of metal.

Trading these markets or attempting to make any form of true price discovery from these markets is a flawed strategy. These markets are BROKEN. As such, risk assessment is impossible and the only course of action is to buy real metal at cheap prices until this system doesn't work any longer -- while keeping some cash on hand in order to make purchases.

That is it.

Please. Stop acting surprised every time this happens.

Dec 20, 2012 - 10:40am

worst. christmas. ever.

the wife is going to make me sleep on the couch.

probably until we're back up over water.

Dec 20, 2012 - 10:40am


Wow - Looks like Blythe and the monkeys will be getting nice Christmas bonuses this year - after all. Argh. Oh well - whatever.

Dec 20, 2012 - 10:40am


Silver up 900% in a decade.

If you can't tolerate the heat, what do you do in the kitchen?

This is long term.

Dec 20, 2012 - 10:41am

Don't Worry

The Plunge Protection Team has everything under control......It's metal smashing day, they got to protect pigatha.

Dec 20, 2012 - 10:42am

Removed comment

Removed comment.

Dec 20, 2012 - 10:42am

There outta be a law...

Fed’s $4 Trillion Rescue Helps Hedge Fund as Savers Hurt

By Bob Ivry - Dec 20, 2012 12:01 AM ET

Deepak Narula’s mortgage-bond fund is up 39 percent this year. George Sanchez’s monthly annuity payout is down 41 percent.

The near-zero interest rate the Federal Reserve charges financial firms, as well as securities purchases that will balloon the central bank’s balance sheet to almost $4 trillion next year, have made it easier for Narula’s $1.6 billion fund to thrive and more difficult for Sanchez, a former college library director, to enjoy retirement.

Chairman Ben S. Bernanke’s efforts to energize the U.S. economy since 2008 have been credited with rousing the housing market from a six-year funk, lowering the jobless rate and putting more money in the pockets of both mortgage lenders and borrowers. At the same time, Fed policy has been blamed for starving money-savers of income and boosting certain asset prices, widening the gap between the rich and the rest of the country, said Joseph E. Stiglitz, the Nobel Prize-winning Columbia University economist.

Monetary policy has been indirectly, surreptitiously helping the top and hurting the bottom,” Stiglitz said.

Fed officials declined to comment for this story on whether their policies exacerbated inequality, said Barbara Hagenbaugh, a spokeswoman for the U.S. central bank. Bernanke said last year that the Fed aims “strictly to do what’s in the interest of the broad public.”

He said last week that the policies are intended to “try and create a stronger economy, more jobs, so that folks across the country, including places like the one where I grew up, will have more opportunity to have better lives for themselves.” Bernanke was raised in Dillon, South Carolina, population 6,745.

Divergent Paths

Since the end of the 18-month recession in June 2009, people like Narula and Sanchez have followed divergent economic paths. Earnings rose 5.5 percent last year for the 1.2 million households whose incomes put them in the top 1 percent of the U.S., according to estimates from the U.S. Census Bureau. At the same time, income fell 1.7 percent for the 97 million households in the bottom 80 percent -- those making less than $101,583.

After two rounds of asset purchases totaling $2.3 trillion through June 2011, the central bank began so-called QE3 in September. QE stands for “quantitative easing,” in which the Fed buys securities to channel cash into the financial system.

The goal is to stimulate spending and boost lending, which is meant to generate more jobs. Bernanke said last week the central bank will purchase $85 billion of assets a month next year “to increase the near-term momentum of the economy.” That would bring its balance sheet to almost $4 trillion, up from $924 billion on Sept. 10, 2008, the week before the collapse of investment bank Lehman Brothers Holdings Inc. deepened the recession.

Commodity Speculation

The Fed’s mortgage-securities purchases have bolstered...


B. Bernanke: "QE is necessary....the benefits outweigh the costs." Jackson Hole ~ 8/31/12

Dec 20, 2012 - 10:42am

Unfortunately, this kind of

Unfortunately, this kind of looks just like the selloff into late December last year, after which we mounted a hell of a rebound. FWIW

Dec 20, 2012 - 10:42am
Mr. Fix
Dec 20, 2012 - 10:43am

Here's what's really going on, can you afford to doubt me?

I know that some of you think that I am “bat shit crazy” and more than a few of you think that I am just a troll, because what I have been saying is often way outside of what would be considered the “normal point of view” here at TF Metals. Admittedly, I often overlook some of my “best evidence” to support what I am saying, but at least I can referred you right now to other sources that have done a phenomenal amount of research on this subject for me. And, if I do not have the evidence to back up my assertion, or, even if I think that the evidence is “circumstantial” I will often just say so. After yesterdays thread, I realized that by some definitions I fit the description of a classic troll to a T. I have been saying now for a while that the COMEX price of gold and silver can at least in theory, will approach zero, as we reached the end of the “endgame”. To the best of my knowledge, the only other resident of "Turdville" to consistently make this assertion, is tmosley, and I am actually surprised that it is not a more broadly accepted point of view. I read many posts this morning stating that there is “plenty of silver available for sale” and that we have nothing to worry about anytime soon. So I ask you, how do you know that? Have you been to your local coins store lately? Many of those have been cleaned out. If you are shopping online, how do you know how much inventory is actually there, other than what they say it is? And how long do you think they will continue selling to you at these obscenely low prices? Let's look at it this way, when we decide how much gold and silver is actually at the COMEX: Many of us already are well aware that futures contracts are issued, with about 1/100 of the actual metal to back it up. Now with a little bit of math, in the real world, that would make the payout on a futures contract for gold, somewhere near $16.50 per oz. right now, since they do not have the metal to back it up, and they would not give it to you anyway even if they did. Has anyone used that argument here? (Okay, I made that one up out of my head, but you get the point). To make the assertion that the powers that be can drive the market price of our metals to near zero is not that far-fetched, and I believe that is what we are witnessing right now. For those of you that are trying to call a bottom in this waterfall, how do you know? What evidence can you present that there is any bottom in these markets whatsoever? Then there are those that say the price can be manipulated for as long as they want to. I disagree, a law of physics clearly states that “you can't get something from nothing”. Obviously, that only applies to paper futures contracts, and Fiat cash. The real physical can not be created out of thin air, and running out of it is an absolute certainty when demand stays consistently above supply. Setting aside all the conspiracy theories of theft on a major scale, goldplated tungsten bars for delivery, or nothing but nerve gas in Fort Knox, there is no denying that at some point there will not be any metal to deliver. If you go to Day Star's forum on Harvey Organ, not only will you find years of research to support this assertion, observations of the numbers that they present us on a daily basis, with commentary on the obvious contradictions, but anyone with a brain should be able to conclude that there is a lot of validity to the assertion “this game is nearly over”. I don't want to drag a lot of other conspiracy theories down “Main Street” I realize that would only seriously undermine my own credibility, and I already know Turd does not find any substance to many of them, but all I will say, is that with a little bit of careful research, and an open mind, anyone can quickly conclude that many of these theories make far more sense than the cover story issued by the mainstream press. That is not even arguable. Jim Willie, which many of you has labeled as “way out there” has been scary accurate on his predictions in the past, I know that to be true, because I have been reading him for quite a few years. He has concluded that this game is over, and that we will not see the price of our metals rise until there is a systemic collapse. I believe that is what we are witnessing right now. So what I am telling you, is to put away your charts and graphs, take every dime you have earned, rent a U-Haul truck if you do not have one available, go to your local coin store, and remove as much inventory as you possibly can get your hands on. If you shop online, go ahead and place an order, but I personally would be worried about ever seeing deliveries. There has been a long time saying with the people that study this, "if you can't put your hands on it you don't own it". That statement has never been truer than it is right now. We will be seeing a bank holiday within the next couple of weeks. Our precious gold and silver markets will be closed to us, and possibly for an extraordinarily long time, when I say this is your last chance, don't doubt me. I can't say with certainty how low these prices can go before you will not be able to buy the metal at them. Just this morning, several of our members have already said that the online prices are not reflecting what is on the charts right now. Does that surprise anyone? Do you really expect the dealers with actual physical on hand to sell it for less than they paid for it? Would you? The endgame means just that, game over. This is what it looks like, and your time to prepare for it has likely already passed. Just my two cents worth, but what the fuck do I know? Now I must go to work, have a nice day. I shall see you all tonight.

Dec 20, 2012 - 10:43am

@ binzer

Thanks 'binzer', nice to hear confirmation of our beliefs.

I read somewhere 'money's just a recorded number of objectively valued credits, with the number representing the perceived credit worthiness of the issuer'. Wealth on the other hand 'consists of the tangible assets actually possessed by the beholder, including such things as time and physical metals'. As such the value of wealth assets can only be valued subjectively (ie in the eye of the beholder).

So we've got the time and the assets, which we each, alone, get to decide the value of, unlike the bankers, who've only got a bed for as long as others put a value on the paper they print.

I know which camp I prefer to reside in:)

Dec 20, 2012 - 10:44am

Good point

Good point.

It was a serious question, though.

Dec 20, 2012 - 10:44am

@Dr G

I hear ya. I was really hoping that silver would finish 2012 in the high $30s. I made one purchase in 2011 when silver was $47! Needless to say, that purchase is under water and likely will be for some time. What a world we live in. The criminals are preventing us from protecting ourselves while they flush the economy down the toilet.

Dec 20, 2012 - 10:44am

@ turd

You said "Soon, there will be a very sharp, snap-back rally."

Really? What evidence do you have that it is going to be soon? You have been saying that since the blog started. This is a marathon, my friend.

Only those that stick around and not lose faith by not expecting a continuous explosive move SOON will benefit from this.

By the way, the primary reason why metals are being thrashed is because there are many longs that need to be fleeced by the EE. When most of those longs become shorts, it will turn around. Sorry, but us peons, incl. you Turd, do not have that information when that will happen. The COTS are a good indicator but unfortunately, they are not updated to us on a daily basis and are always 3-7 business days old.


Dec 20, 2012 - 10:45am

I will never trade paper again

I will never trade paper again.

I will never trade paper again.

I will never trade paper again. X 100

However, I will take this year's bonus and buy as much metal as I can!

What a great opportunity.

Dec 20, 2012 - 10:46am
prius_driver Silver_investor
Dec 20, 2012 - 10:48am

"The criminals are preventing

"The criminals are preventing us from protecting ourselves while they flush the economy down the toilet. "

No way. The criminals are allowing you to buy silver at $30/oz.

Imagine if the true market price were known all over the world. The silver sellers would ask for much more than $30/oz.

Dec 20, 2012 - 10:48am

Like I said in previous

Like I said in previous posts, "the cartel is a creature of habit. What has worked for them in the past - they WILL repeat."

Look at charts from last Christmas/New Years - Total beat down in price. Now, look at the charts from this past late Winter/early Spring.

TA - DAH! Same , same, happening now and right before our eyes. Don't sweat it. Personally, I'm going to wait until after the New Year to buy. That's just IMHO. For what its worth.

Dec 20, 2012 - 10:49am

Mr. Fix

"After yesterdays thread, I realized that by some definitions I fit the description of a classic troll to a T."

Don't be too hard on yourself.

Dec 20, 2012 - 10:49am

"I certainly don't know of

"I certainly don't know of anyone who saw this coming"

Let me help you with that Turd:

Want more?

Nigel Black
Dec 20, 2012 - 10:49am

mr fix

brilliant post ... you nailed it

Dec 20, 2012 - 10:49am

I think the cartel wears hooded black robes

Never thought I would see a 2 handle on silver again.

Kevin Bacon - Fraternity Paddle
Loud Noises
Dec 20, 2012 - 10:50am

Would love to buy

I would love to buy here, or lower. But my only fiat is stuff that I may need in a few months time. I would have to be positive that silver will be up from here by the spring. Sadly, I don't feel comfortable enough to make a move. This is the first time I've felt this way. For the first time, my brain is willing over my emotions on a dramatic sell off. I have no doubts about the fundamentals, I just have some very serious uncertainty about the timeline in which they will assert themselves. The TPTB are firmly in control and it will apparently take a divine amount of endurance to beat them in the end.

I do wish the jerk offs would lay off TF. Attacking a man who does great things and tries to fulfill a purpose when he gets a prediction wrong about the price of silver is so ridiculous. Why the hell would you waste part of your day choosing to come to a site that you hate everything about? That'd be like me going to an atheist forum just to argue with people. I have never been in such a douche-baggy mood to even consider wasting time that way.

Dec 20, 2012 - 10:50am


"Get ready for more of the same woes in 2013 folks."

What are your predictions for silver in 2013 ? What is the trading range ?

I'm listening !!


Urban Roman
Dec 20, 2012 - 10:51am

As I mentioned a few days ago,

... there is still a very bearish case to be made. Economy is in a depression, the paper markets are ridiculously larger than the physical, blatant manipulation, people are capitulating, yada yada yada.

Really, the PMs should be only a smallish part of your life -- you also might need a career, or at least a job, and some FRNs (please note that it isn't all that easy to buy a hamburger with an Apmex silver round ... might be a little easier with an ASE or a Libtard, since they have the stamp of a money-issuing government on them). You need friends, family, community, and crap like that.

Jesse has an excellent essay today on the dynamics of this thing. But one of the things I like about PMs in my retirement account is that they are less likely to go to zero and disappear than stawks. I trust PSLV will still be worth something at the end of the day. Those old Braniff Airline shares, not so much.

So there ya go, Turdites. That's all I have to add to the discussion. I might see some of y'all down at the LCS later this morning expending more of our small remaining stock of dry powder. If the LCS has anything left to sell.

Dec 20, 2012 - 10:52am

The streets of gold?

I lived and worked in Brazil in the 1980's. The inflation was so bad that the government kept issuing new currencies. I remember when the largest bill they printed was worth only $5.00.

The value of the coins kept getting smaller and smaller and they switched their coinage to some cheap pot metal and made the coins smaller and smaller. Eventually folks just started throwing these coins into the streets when they got them in change because they were literally worthless. Not even the street urchins wouldn't pick them up cause no-one would accept them. The coins stuck to the asphalt and the streets became paved with money.

However, I never saw copper, nickel, or silver coins tossed into the street.

Keep stacking. Stack your pennies and nickels too!

Mr. Fix Nigel Black
Dec 20, 2012 - 10:55am

@ Nigel Black

Somebody had to do it, why not me?

Dec 20, 2012 - 10:55am


...and just BTFD when your able to. It's that simple...otherwise just relax and learn from this sell-off.

Video unavailable


Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)

Key Economic Events Week of 4/29

4/29 8:30 ET Pers Inc, Cons Spend, Core Infl
4/30 8:30 ET Employment Costs
4/30 9:45 ET Chicago PMI
5/1 8:15 ET ADP jobs report
5/1 9:45 & 10:00 ET Markit and ISM Manu PMIs
5/1 10:00 ET Construction Spending
5/1 2:00 ET FOMC Fedlines
5/1 2:30 ET CGP presser
5/2 8:30 ET Productivity and Unit Labor Costs
5/2 10:00 ET Factory Orders
5/3 8:30 ET BLSBS
5/3 9:45 & 10:00 ET Markit and ISMServices PMIs

Recent Comments

by Bard the Bowman, 4 hours 49 min ago
by Phoenix79, May 18, 2019 - 9:46pm
by MrOnline, May 18, 2019 - 7:02pm
by Blackwatersailor, May 18, 2019 - 5:11pm