Saturday Stuff

Sat, Feb 23, 2013 - 12:28pm

Just a quick wrap up of some assorted stuff as we prepare for what will be an eventful week ahead.

First of all, the big news from late yesterday...Moody's downgraded Her Majesty's debt. Though this is once again a fundamentally gold-positive event, I wouldn't expect an immediate jump in price because of it. Remember that in the fiat world, Pound weakness inversely means Pig strength.

In the absence of a podcast here at TFMR, please take the time to listen through all three segments of Andy's visit with Eric King yesterday (once they're finally posted). When we spoke yesterday, Andy told me not to expect anything too earth-shattering but I'm confident that it's worth your time, nonetheless. He and I plan hope to record something either Monday or Tuesday so look for that early next week. In the meantime, here are the KWN links:

If you haven't already, you're going to be reading a lot this weekend about yesterday's Commitment of Traders report. As you know, I like to review it right when it comes out and then post a sort of "instant analysis". Here's a c&p of my thoughts from yesterday, in case you missed them:

GOLD: For the week, price fell about $45. While this was taking place, the LargeSpecs added 1900 longs and a jaw-dropping 25,000 shorts! The LS net long ratio falls to an very bullish 2.12:1. The SmallSpecs got in on the act, too. They dumped 400 longs and added nearly 5,000 new shorts. This is an extremely bullish, contrary signal.
But the real action was by The Cartel. They added 4,300 new longs and covered an incredible 24,200 shorts. Again, who was buying while the specs were busy shorting? And who do you think will, ultimately, profit??
The Cartel net short ratio now stands at an extremely bullish 1.83:1.

SILVER: Almost identical to gold. Simply astounding, amazing and incredible.
For the reporting week, the price of silver fell about $1.60. Look what was happening internally:
The LargeSpecs dumped 1,150 longs and added 4,450 shorts. After reaching an unheard of extreme of 6.5:1 just two week ago, the LSpec net long ratio is all the way back to a mildly bullish 3.1:1
The SmallSpecs added 500 longs and 3700 shorts. Again, as in gold, the specs are racing to get short.
The "commercials"...pretty much all big firms except JPM and their con-conspirators...added another 2,026 longs, bringing their total gross long position to a never-before-seen 54,208. Simply incredible! They've continued to add longs all the way down. What do they know? What are they expecting??
The Silver Cartel...namely JPM and their two or three pals...were finally able to cover 6,800 of their disgustingly large short position. It's still disturbingly high at 92,164 but the total commercial net short ratio, which last peaked in September of last year at 2.6:1 has now declined to a quite bullish 1.7:1 Nearly every drop in The Cartel net short ratio to near 1.5:1 has preceded a substantial rally. We are very close!
All in all, both CoTs are extraordinarily bullish and indicative of a bottom very soon. Hang in there, now. Your patience will soon be rewarded!

Now, let me just add a couple of things:

  1. Getting the Gold Cartel net short ratio all the way down to 1.83:1 is a very good sign. For perspective, at the lows of late December 2011 and summer 2012, the Cartel net short ratios were 1.98:1 and 2.01:1, respectively. And this week's data was surveyed on Tuesday, before the big drop on Wednesday. All in all, the gold CoT is very bullish.
  2. Please also consider the net short ratio of The Silver Cartel. After the last four price washouts, here are your net short ratios at the bottom: On 8/14/12 it was 1.49:1. On 12/27/11 it was 1.34:1. On 10/4/11 it was 1.48:1 and on 6/28/11 it was 1.79:1. As of last Tuesday, it had fallen 1.7:1.
  3. And, finally, this theory....note the emphasis on theory. Regular readers know how perplexed I am by the silver OI situation. The primary outlier is the Commercial Long position. It "should be" somewhere near 30,000-35,000 contracts by this point in the price cycle. Instead, it grew again last week to 54,208. Chew on this: What if the 20,000 contract difference is, in fact, JPM trying to square away their naked short position that Uncle Ted estimates to be around 30,000. Now, stick with me on this... They tried to lessen it by covering back in April 2011 and the result was a near-cataclysmic event for them that was only rectified by the Sunday Night Massacre and the collusive CME margin hikes. Since then, they've maintained their position as The Big Short but, beginning late last summer, they began to build an equally-large long position. Again, stay with me here... They've added shorts through the fall to keep a lid on prices until they're ready to let it go, either voluntarily or involuntarily. If this is the case...and that's a very big IF...JPM could be approaching the point where they would be short 25,000-30,000 contracts AND long 25,000-30,000 contracts. At that point, if forced to exit the shorts, they'd be fully hedged and even profiting on the UPside.

Anyway, just chew on the 3rd point over the weekend. The more I think about it, the more it explains the "commercial long anomaly" and it provides JPM an exit strategy should the toothless CFTC ever choose to call them out.

Here are your updated charts. Given the CoT structure, I feel very comfortable declaring that a bottom is near. (And obviously hope that, by doing so, my Google ad revenue will increase.)

And just a couple of other items that have found their way into my inbox. First, this interview from last fall that details the whys and hows of gold manipulation:

Gold Market Manipulation Explained

This fun article discusses the effects of the gold repatriation movement:

If you haven't read up on this subject yet, I strongly urge you to do so. Just like the German gold repatriation, we may look back on these events and recall them as clear warning signs of imminent events:

And our friends at Gold Bullion International do some excellent analytical work. Their latest was posted to ZH and you should definitely take the time to read it:

Speaking of GBI, for now they are still the only bullion and storage affiliation that this site has. Many of you have purchased from them and I am very grateful for their support. If you are buying coins and bullion, please be sure to check them out. You can link to them trough the ad on the right side of the page. I'll soon be adding affiliations with GoldMoney, SilverDoctors, Provident and JMBullion, too, so please be sure to always consider them when looking the BTFD. (Which I would strongly encourage you to consider doing this weekend.)

OK, I think I'll stop there. I hope that you have a safe and relaxing weekend. You certainly deserve some serenity after the madness of the past two weeks. But keep the faith as this, too, shall pass. The metals have simply been forced back to the bottom of their 18-month price ranges and will soon begin to rebound as physical demand and the glaringly obvious fundamentals begin to take over.


p.s. You've got to check this out. The trollololo song is going mainstream!! I sure hope that the dead Russian guy's estate is getting a little skin out of it...(Thanks to my pal, DocD, for passing it along!)

Video unavailable

About the Author

turd [at] tfmetalsreport [dot] com ()


Feb 25, 2013 - 11:13am
Feb 25, 2013 - 11:16am

Honestly, I can't believe

Honestly, I can't believe anyone is buying into Happy's nonsense. He seems to be under the impression that silver is some sort of perishable, and isn't something that is kept in huge quantity in vaults for hundreds or thousands of years, and that exhaustion of such vast hoards of material will apparently have no impact on the supply situation. Nor does the fact that those vast hoards were used up ring any bells for him (like the bell labeled "we've been using more silver than we have been able to mine for the last 60-odd years"), and what that ringing bell implies for price, disregarding all other factors impacting the supply and demand for silver.

Feb 25, 2013 - 11:32am

DPH and China

There is growing fear in the US over the expanding might, econ, military of China. Im no expert, of course, but my take is that CHINA is an inwardly looking country. THEY ARE NOT IMPERIALS. They want their country whole, without outside interference, read OPIUM WARS. China wants to be free of the US FRN, the external. They want their country whole, read FORMOSA, that the japanese conquered in what, 1931. They want their little islands back, in the 4000 year LONG TERM view.

The Russians, in general, want to be a global star. You can work them, if you allow them to think they are a big player, show respect. I do not see RUSSIAN imperialism also.

Over the many centuries, I see the continued ascent of man, and the global confluence of the core of interconnected countries, US RUSSIA CHINA JAPAN etc etc, trying to incorporate with civility, the rouges in the GAPs, mostly the middle east.,_glob...

and Particularly

We have finally come to a point, where the confluence is nearly perfected, using a fiat complex, the last GRAND money experienment, and we AS A GLOBAL people will learn that taxes-handouts are enslaving, and that fiat will not fund totalitarian rule, indefinitely. We as global people are not smart enough, but with the natural order of things, human DEVILS and ANGLES being the driving force, we will learn.

I am not buying FOR ONE MINUTE the WWIII. Not in this day of the global confluence. IT AINT GONNA HAPPEN.

What I do see though is INSURGENCIES playing out, civilizations mature, and the GAP rouges joining the core, as the confluence marches on, as

Insurgencies (internal hot wars) and fiat transit to trade wars and gold as the medium of exchange of choice, to keep all fair.

But we all need a little fun in life, so, I would ask the US military to start MOAB raids and take down the rouge newk facilities, and really get the gold price moving. ;)

Feb 25, 2013 - 11:36am

Switching from KWN to TFmetalsreport...

First time poster here -- Im not sure to what degree KWN has been discussed and/or discredited here. I have found to be trustworthy and quite honest, not to mention pretty accurate. I cant say the same for KWN. I used to be an avid listener to KWN a few years ago-- used to listen to all their regulars-- Eveillard, Schiff, Celente, Turk, Rickards (before he angered someone with some political comments maybe?), Sinclair. These are all pretty knowledgeable guys, and you can really learn something from them. I HAVE seen Turd refer to the KWN crew as being maybe too bullish on gold too much of the time, to the point of maybe pumping the metals somewhat. Nevertheless, Turd acknowledges the usefulness of KWN, and certainly the fact that KWN is long-term bullish on metals already makes me view KWN positively-- given that I feel being bullish of PMs is obviously the correct position to take (even laughably so). .. Or better said, I would say being long-term bearish of paper currency (esp the USD), is a laughably easy call to make. In any case, to my main point... I did not miss a KWN interview from 2009 - 2012, UNTIL in the spring of 2012, when Eric King repeated a number of times in interviews that his insider people in London knew of there being massive central bank buy orders for gold right around $1680/oz... he was implying, of course, that based on his information from industry insiders, there would be huge support for gold at $1680. He mustve repeated that point at least 3 or 4 times during the time span of late Jan 2012 through March 2012. Then, of course, in april may and june, gold fell through that supposed support at 1680, then went on to breach 1650, 1600, 1550. Lo and behold, Eric King then DELETED ALL OF HIS INTERVIEWS FROM THAT JAN - MARCH 2012 period. He stuck his neck out by strongly implying that he knew gold wouldnt drop below 1680 (for any substantial amount of time) and then gold spent much of the remainder of 2012 well below the $1680 level. To my mind, it was pretty easy to figure out why Eric King deleted all those interviews (even ones where the supposed 1680 support wasnt mentioned)-- because he felt it did inestimable damage to his reputation as being knowledgeable on the gold market. So he decided it was better to do inestimable damage to his reputation as a journalist with integrity. I strongly prefer Turd's style of making calls, then acknowledging when hes been right or wrong, and not getting too sanctimonious about it, because as we all know, its impossible or nearly impossible to be right even 80 - 90% of the time when calling bottoms and getting relatively short term or even medium term directions right. Anyway, I havent listened to a KWN interview in a year or so. Not saying it's not valuable at times... just saying that to my mind EK has shown himself to be very dishonest in the past, in spite of the fact that 50 - 80% of his guests' info might be very helpful. I now check TFMR with the same regularity that I used to check KWN. Also, I'll look at other sites like ZH and Screwtapefiles once in a while too.

Feb 25, 2013 - 11:43am
Feb 25, 2013 - 11:49am
Urban Roman
Feb 25, 2013 - 11:50am

Currently logged into the webinar

Waiting for Paul to arrive ...

Feb 25, 2013 - 11:51am

We have a winner

Grublux nails it!

Tazmanian Devil (or African wildman) cartoon I believe.

Feb 25, 2013 - 11:53am

Unga bunga bunga...

...unga binga banga bunga?

We'll see if anyone can source that abstract and obscure sequence of words. But what is even more obscure (and surreal) is the fact that Berlusconi even has a chance of leading Italy again.

The Italians have a strong tradition of weak or ineffective leaders and to the extent that Silvio has this much support is incredible to me. But given the line up of candidates of a former communist party member, a comedian or a slimy creep they are familiar with it seems they might choose that which they are comfortable with.

Which in of itself is troubling to this half Italian male to watch from afar and wonder why his ancestors always seem to elect someone who isn't a difference maker. (Somewhere within this the Vatican's presence in Italy has something to do with this and I don't mean it in a way that implies the Vatican is controlling Italy. But maybe its presence and status is what almost usurps the central govt.'s prominance and importance among the populace.)

All of this leads me to a couple soft conclusions....a.) Italian wine and life on the Mediterranean and Adriatic Sea must be incredible and enjoyable enough to the point of distraction and makes everything else unimportant or b.) the sense of stagnant hopelessness over many centuries has reduced the electorate to dart throwing when it comes to candidates and like so many other cultures it has succumbed to the 'entertainment' aspect of people as being a viable and desirable trait to have as their leader even if they border on the absurd in their beliefs or behavior.

I guess if you're going down the tubes and have the choice of it being either boring or entertaining/interesting then what direction might you head in this carnival like MSM political atmosphere in Italy and even abroad? It appears that Italy might start to resemble a fractious circus with the existence of the EU in its balance if Silvio is voted in to continue the clown act except that this time he'll be a bitter one.

We live in weird times and it's getting weirder.

Feb 25, 2013 - 12:01pm

We live in weird times and it's getting weirder.

amen. But nature will have last word, in the negative feedback loops ever present. Strong in character, fear not a lower standard of living, on its way. The great depression DID NOT destroy the American character, per se, but for the leftist totalitarian panderers that is clearly bankrupting the hearts and pockets of the 99 percenters .....

The DRIVING FORCE is alive and well in all of us, and can not be destroyed by totalitarian rule forever, and this natural order will eventually defeat fiat and that totalitarian socialistic fascist cesspool in DC. The unsustainable fascist rule will collapse along with fiat. In time, I see a rebirth of Americana. We just need a little more global education. :)


always love your stuff, DPH :)

Feb 25, 2013 - 12:02pm
Mr. Fix
Feb 25, 2013 - 12:04pm

unga binga banga bunga

@ 4:35 in

Buggs Bunny
Feb 25, 2013 - 12:06pm

Didn't even look that one up

Kinda scary what's floating around up there in the old database!

Feb 25, 2013 - 12:07pm

Interesting action today

The dollar is strengthening:

And just as expected, stocks are off mildly:

And typically, crude is selling off:

And yet...

Metals are holding steady against this. AND the miners are moving up strongly:

Market Vectors Gold Miners ETF (GDX) 38.74 0.81(2.14%)

Hmmmm..... Got Shiny?

Feb 25, 2013 - 12:10pm


It's the Aboriginee wildman 'toon! Kudos to both of you and thanks for posting it :-) A little levity is vital and will keep us all a little loose during these uncertain and trying times.

Feb 25, 2013 - 12:11pm

A Little Econ 101

I think a lot of the confusion over the term shortage stems from what someone means when they say they word. Most people seem to think that shortage means there is a limited physical supply. In economic terms that is not the case. A shortage occurs when sellers will not sell at a given price. This applies to other things beside silver. Our current level of unemployment might be thought of as a shortage of jobs. That is not the case. There are plenty of jobs, just not at the current wage structure. Eliminate the minimum wage and unemployment benefits--a government price fix and a subsidy--an the only people who will be out of a job will be those who do not want to work.

During the 1970s there was never a physical shortage of gasoline. There was shortage of sellers at the going price. Once prices were allowed to float the gas started to flow.

There is no physical shortage of silver, there is a shortage of sellers at the current price. Once the price is allowed to find its real level--not the one set by the EE--there will be plenty of silver for those who are willing to pay for it.

Until then I'm going to keep stacking on a regular basis and be grateful that I can.

Feb 25, 2013 - 12:13pm

more bunga

I just checked ZH for the first time this a.m. and they're all over it as might be expected.

The whole bunga /mockery thing at this point is surreal (and funny) only because the guy is still politically alive. A lengthy revote or gridlock like ZH suggests would be par for their course and normal in these times.

It's pretty sickening to me as a human citizen and one of billions who only want to see mature and honest political humans represent us so that all of us can have better lives if possible without the irresponsible greedy drama that seems attached to politics. Sadly, that doesn't seem possible nor does it seem possible that the modern political condition is compatible with the basic human ideals most of us simply hope for when we have our elections.

Most politicians suck and are almost sub-human the further they climb their own career ladder for themselves, not us.

Cue the clown cars in Italy to start revving their engines.

Feb 25, 2013 - 12:14pm

Inga Binga

supposedly a german spy who jfk had an affair. inga arvad

Feb 25, 2013 - 12:16pm

Thank you and welcome

It's not easy but I try very hard to make this place different. Thanks for noticing.

Feb 25, 2013 - 12:18pm

two points

1. The silver shortage is about perspective to me. With a billion or so above ground ounces(That is a common theory of current above ground supply), and seven billion or so people, that is 1/7 of an ounce of Ag per person.


For the conspiracy minded to ponder: It is 2 whole ounces per person when there are only 500 million of us left after the purge! In either scenario, that is a shortage if you ask me.

2. The talk about QE ending has got me to thinking. If I understand correctly, were QE to end, interest rates would skyrocket. The result of that being the collapse of the economy and the end of the US dollar. The debasement of the world's currencies has transitioned from a marathon to a sprint.

Here is my question: What if this is the plan? Stay with me, please.

There are an unprecedented number of longs that have been building, rumors of QE ending from the FMOC, every country in the world trying to kill their currency without panicking the population, and domestic infringement of liberty, the likes of which have not been seen in centuries. All of which are happening with the consent of our government. What if all of the pieces are now set?

Please feel free to punch this full of holes. It is looking dark, and I would love to have a little light shine in.

Fred Hayek
Feb 25, 2013 - 12:23pm

@DPH . . I don't think the Italians are quite as crazy

I don't think the Italians are quite as crazy as you made them seem with that brief post above.

Yes, Berlusconi is a creep, but mostly in low level ways. However, he had exquisite timing. He got pushed out of office just before the economy in Italy really started tanking hard. So, to the average Italian there's a bit of a perception that things went bad after getting rid of Silvio.

As to the *former* comedian, Grillo, I only know a little bit about him but he's not just the equivalent of writing "Mickey Mouse" in on your ballot. He's apparently a reasonably sharp guy and he explicitly wants to put the issue of staying in the eurozone to the voters in the form of a binding referendum.

ancientmoney Ten_of_Swords
Feb 25, 2013 - 12:32pm

@Ten_of_swords . . . a little light . . .

Sorry, I think you are getting close, and not much light at the end of the tunnel . . .

The debt-saturated world is closing in on the financiers. The government has been preparing for this for quite awhile, as we know too well. The government and the financiers work together.

I suspect bank closings, nationalization of them and strategic industries, a new financial system are all in the works, and military law to enforce it all is coming.

That is why the Dodd-Frank required position limits in metals, energy were ignored and the CFTC's almost 5 year silver investigation results were never announced.

The laws have been changed, the repression has worked, the people have no idea what is coming.

They may decide to default the entire system. Nationalizing the banks will mean that they can keep their cronies in positions of power and wealth after the reset.

Feb 25, 2013 - 12:33pm

thread anew

A new thread

القراع عصفور SilverSurfers
Feb 25, 2013 - 12:38pm


i really liked your linked article. everyone should read it. are we really all on the same side here? i think mostly so. also, read the article with the concept of freewill in the back of your mind. thanks.

The Vet Puck Smith
Feb 25, 2013 - 12:40pm

A Little Econ 101 - Puck

A good summation of the silver situation which is complicated by the fact that it has both industrial and investment demand. The industrial demand, like any commodity, reduces when the price rises, but the investment demand goes the other way and increases with rises of price.

Add in the complication that buyers of paper silver (which is "generated" at no cost by short sellers) do not add to the market liquidity because short sellers take the cash from the short sale and do not put it back into the silver market (at least not until they are forced to cover). Buyers of physical do add to liquidity because stock purchased from dealers has to be replaced by those dealers.

When you buy physical then the money you spend stays in the silver market place adding to liquidity. When you buy paper silver from short sellers, that liquidity is lost to the silver market.

ivars sengfarmer
Feb 25, 2013 - 1:35pm


Zero interest rates and QE to infinity say not. These policies must continue or the whole system collapses. The Fed must keep buying the debt because nobody else will at the zero interest rate and raising the rate will collapse the 267 trillion dollar Interest Rate Swap derivative book of the big 5 banks. There is no way out.

Could you please give me some example ot link which explains how that works? I simply have no clues.

Yes I use oficial data. Why would I trust someones else data more? If you work with one set of data, they are at least consistent, even if they are all flawed. When one picks out of data stream only the extremes that support his interpretation, that is even worse.

As for QE to infinity, it being the cause of inflation etc. I do not see it reflected in the price of gold recently, hence I am having doubts about it. As for inflation in the USA by practical methods ( gasoline, your favourite grocery) I doubt anyone can use that particular sample of data to generalize well enough.

As for fiscal deficit I understand that sequester will reduce financial year 2013 deficit, and its planned to be smaller than 2012, which was smaller than 2011, and if we take them in relation to GDP, the shrinking is even faster. What increasing deficit are you talking about- the total USG accumulated deficit? Well, if there is a trend into direction of reducing its share of GDP, it seems to placate the gold buyers, so that is meaningful, and is a fact , based on gold price developments over last 2 years despite the QEs in between , and slowing increase in debt as well.

As for unemployment, I understand its at least 15% , hence I say that fiscal spending INCREASE will be implemented to get it down, either in form of lower taxes, or higher spending, or both, rather sooner than later when it will be clear that QE does not work. The limit to fiscal spending increase in the USA case is not debt as such, as USD and USG treasuries are forced down the buyers throats to fund the USA military mostly, but inflation can limit it. From that viewpoint, before people get on barricades, there is quite big degree of freedom left - few years at least. But increase in fiscal spending will move gold price up regardless of manipulation, as it has done for the last 12 years.

Yeah, and I know its all manipulated so that no number reflects no data. Period. Thinking switched off, lets hear what some guru has to say who kmiraculously has access to CORRECT data but.. can not really share or formulate it or back it up - like the discussion above about silver shortage. Someome takes this information seriously from Sprott who has to keep the price of his fund up and investment in it active? Are we dumb? Sales pitch. I work in sales myself, no problem to create a sensation out of nothing given the auditory that is willing to hear that.

By the way, gurus on TV and blogs and podcasts with huge following are definitely NOT my sources.

Not to say that I know what will happen, but I want to understand not to digest easily food that has already been digested once, and which we are being fed from all sides. Shit goes in, shit comes out.

Feb 25, 2013 - 2:36pm

Treasury Silver Sources

Can someone please explain where the Treasury sources it's silver for coinage? Is it being squeezed as well? Ave, to all here as this is my first interchange with such a diverse group.

Feb 25, 2013 - 2:45pm


Most Transparent President In History Removes Press To Take Q&A From Governors

“And with that, what I want to do is clear out the press, so we can take some questions.”

Feb 25, 2013 - 5:11pm

Great Post - Gold Price

This will be an interesting week for the gold price, as a gold rally may have begun due to the recent buying opportunity. Investors looking to maximize profit and wealth preservation must invest wisely and closely track the gold price on websites like

Feb 27, 2013 - 5:21am


Ivars, here are a few links to broaden your understanding of derivatives and some links on the size of the problem. I have HUNDREDS more if these don't lift the veil of your misconceptions. I don't know where you are getting your info but there is a disconnect from reality in your conclusions.

Once you digest the info in this first link and understand the truly enormous load of bullshit coming from the MSM on the true size of the deficit, hopefully you will understand the size of the problem and the fact that it can't be solved with pitiful cuts in the size of the increase in the deficit, or more taxation.

Shit in shit out?? How do you defend your sources when what you are getting from them is so far off the mark?


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