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Nostradumbass

843
Fri, May 10, 2013 - 11:50am

I know what you're thinking. How can I guy who is dead wrong all the time have his own website? Good question! Maybe it has something to do with this:

But, seriously, it's a good question. How can I be so freaking wrong all of the time? I mean, it's not like I just fell off the turnip truck and began drawing lines on charts. I'd been pretty good at this stuff for quite a while. So what has happened, aside from the obvious Jack Daniels, methamphetamine, valium and glue-sniffing addictions?

I think the answer lies with three things:

  1. Fed/PD involvement in manipulating nearly all markets
  2. The predominance of High Frequency Trading in nearly all markets
  3. And the coordination of numbers 1 and 2 above

For example, many wonder at how the U.S. stock market can keep going up. That's easy! The Fed's Primary Dealers receive, on average, about $2,000,000,000 each business day, direct from The Fed. Now most of this gets reinvested into treasuries in order to prop up the bond market but a considerable amount is left over each day and the majority of that money gets plowed into S&P futures where the attendant leverage multiplies the buying effect as much as 20 to 30 times. As Ruprecht would say: "That's a lot."

So, of course, the stock market isn't going up because your neighbor just put $10,000 into The Growth Fund of America or some old lady just bought 200 shares of ConEd. It's going up because The Fed is giving free money to the banks in order to prop it up. From there, the HFTs which represent about 80% of the daily volume, take over and bada-bing, bada-boom, you're at Dow 15,000.

And with all this free money sloshing around and being driven by mindless computers, technicals and fundamentals get thrown out the window. Technical analysis only works if a group of relatively risk-averse human beings actually see the same formations and lines and then choose to act in those certain spots. When you're dealing with computers and risk-free cash, you can do anything you want!

Sure, two days ago the POSX looked like it was headed lower. It doesn't matter. The euro looked stable to higher then, too. So what? Crude, the grains, copper...all the same. All driven by momo-chasing HFT computer algos which haphazardly buy one day and sell the next.

So what does this mean? Well, I'm still going to tell you what I think and what I expect but I must warn you again: Attempting to profit by trading in this environment is suicidal. You will think you are doing the right thing and then, for example, a baseless rumor gets floated after the Comex close and gold is whacked for $40 before it can re-open. How's that stop order treating ya? Brutal, just brutal.

(Of course, none of this is new. For those die-hards that want to keep trading, I set up the service with Andrew Maguire over a year ago. You might think it's too expensive but in return I'll ask you how much money you've lost over the past 30 days alone? Considering Andy's performance, I'd say his fee is pretty cheap. If you want to learn more, just click the ad on the right side of this page.)

So here we are. The machines have pounded us all the way to $1425 and $23.30. Ugh. Never mind that The Bernank made no mention of "tapering" today. Never mind that Andy reported that today was the largest physical allocation month-to-date in London. Never mind the CoT reports. Never mind the 300 tonnes taken out of the GLD YTD. Never mind the 100 tonnes taken out of Comex vaults YTD. Just...never mind. The machines are in charge and they will continue to be in charge...until they're not.

And when might that happen? Lots of talk out there about imminent collapses and paper disconnects. Chatter galore on force majeure and cash settlement. Oh sure, this is going to happen one day. No doubt about it. But just don't go getting your hopes up that that day is going to be next Tuesday. If we've learned anything these past three years or so it's this: The main power possessed by The Powers That Be is the power to put off the inevitable. The music will keep playing and the party will continue until the day comes when it simply doesn't. That day is coming and it will likely be at a moment not of TPTB's choosing. Clinging to power and the Old Order, the bullion banks will likely create paper metal until there simply isn't an ounce left that they can steal hypothecate and leverage.

Your only winning move remains the acquisition and storage of physical precious metal. And I don't mean the CEF or the PHYS or a certificate from an LBMA vault. I mean metal that you hold in your own two hands. The real stuff. Period. I know there are production and delivery delays. Who cares. Acquire it and deliver it, while you still can. In order to make this easier, I've assembled a list of "affiliates" for you. They can be found here: https://www.tfmetalsreport.com/precious-metals-store and here: https://www.hardassetsalliance.com/cm/precious-metals-breakthrough. If you want to hasten the decline of TPTB, go to these businesses today and order some metal. 

Here are your mostly-worthless charts. Again, you and I can see where there should be support and buying pressure against the shorts. But that hardly matters when some goon no one has ever heard of can float a rumor and whack the global price of gold for $40.

And I know this is painful but I'm going to give you a CoT update later today, nonetheless. Cast it aside if you want. Claim that it's just fudged-up and manipulated, too, if you want. But...we are talking about levels of Spec shorting that we haven't seen since 2001 and, in some cases, even longer. This fundamental market structure will sometime soon show itself as a bullish indicator once again. It's just a matter of when. Now "when" might be when the banks are finally net long both gold and silver. We'll see. But for now, we'll just keep monitoring the levels in each category and discussing it every Friday.

Anyway, that's all for today. I hope you are able to have an enjoyable and relaxing weekend, regardless of all this nonsense. Keep calm and add to your stack.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  843 Comments

ink · May 10, 2013 - 12:53pm

So far it's all playing out like predicted on Sinclair's site (the mysterious Bo Polny). He has the dates exactly right: https://www.jsmineset.com/2013/05/10/an-update-on-gold-from-ciga-bo-polny/

Any thoughts on this?

القراع عصفور Redneck_Rampage · May 10, 2013 - 12:56pm

i like your handle

Colt Ford "Waste Some Time" Official Music Video
Hunt brother · May 10, 2013 - 12:58pm

The gold banks are desperately short physical gold.

The bankers have issued paper claims on metal that cannot be fulfilled.

Since last October the bankers have accelerated the paper gold issuance and sold the

limited supply of real gold to China. I am not Ivy League educated, but me thinks they screwed up.

ggnewmex · May 10, 2013 - 12:58pm

Yeah, we forget about these two SUPPLY disruptions.... LOL, and this has a NEGATIVE

effect on price. WOW, it is almost amazing.

One can almost see case studies about this in the USA... err whatever it will be called and people trying to figure out, "how could/ did this happen?"

Mickey · May 10, 2013 - 12:59pm

closed for weekend about 13 hours ago and London 2 hours -so their is no action there unless traded here in US.

actually the bond trading halt occurred while us north americans were in bed.

and the real selloff occurred on PM around 6:30 NYT. thats was a disconnect. But it was touted.

tread_w_care · May 10, 2013 - 1:02pm

So I have this quandary. Due to let's say, family driven normalcy inertia, I still contribute to my 401k. So far, cheaper than the divorce to continue rather than cease, eat the taxes and put it all in real goods. Oh and due to a quirk of ours, I can't deep six it, pay the penalty and run without terminating my employment. Another non-starter divorce catalyst. For right now this is a non-negotiable, stick with me.

I have the option to invest broadly, we're not limited to a basket of craptastic funds. For me, the majority of my 401k is invested, very painfully recently, in GTU, PHYS and PSLV. Because they actually hold the physical, or supposedly. I don't want to rehash the GLD/SLV vs. Sprott's funds debates, suffice it to say I did my own due diligence and was satisfied, at the time, Sprott really has what he says he has and does what he says he's going to do. 

And yet, the market does not recognize the superiority of PHYS and PSLV over the other paper driven etfs/instruments. Not surprising really, using Turd's definition of the 'market'.

Today I see Turd call out CEF (a former holding) and PHYS specifically, and I know why, but still, ouch!

Question for Turdistan: if not PHYS, PSLV, what? Cash? Just deal with the erosion of inflation and at least enjoy the tax break? For how long? On the one hand this dance can go on a lot longer than most of us can stay solvent, on the other, it could all blow up and evaporate into the ether tomorrow. Bye-bye 1's and 0's . . .

Terrible time to jump back into the S&P, duh. Bonds? Puh-lease. I hold my nose and contribute to the 401k playing the 'game' but even I have some moral lines that won't be crossed.

So, Turdites, in lieu of a physical bullion allocated trust, what the hell do I do with this money to minimize loss/preserve capital and not reward this evil system?

All opinions welcome, disclaimer: all investment decisions I make are my own and I bear full responsibility for those, just looking to read the zeitgeist of the board here. 

SilverSurfers · May 10, 2013 - 1:04pm

than one is, because we are with you all the way and like a good scrap.

Our Gang: Spanky, Alfalfa, & more.
Transformer · May 10, 2013 - 1:05pm

Turd, I think your job here is more of enlightenment than perhaps predicting prices.

From your post today, I think I finally got it, as to why TA doesn't work. Technical Analysis is built upon hundreds of years of experience where all players in the game are trying to make a profit. It's all about the actions of humans and when everybody wants to make money, our long established charting conventions work and can tell us what is likely to happen. When the biggest players in the market have a different goal other than making money, well.... anything can happen, and TA is not going tell us what that is.

Simple, really.

Galearis · May 10, 2013 - 1:06pm

Hi Turd,

 You already know this, but on a Friday we should expect more shenanigans...The sign for this is always an initial take down of the paper metals in the after market on Thursday - or on any day before an "event"...We saw that this week so there should be no surprise. The signal was given. We will be seeing a lot of this I think in the weeks ahead....Remember ANOTHER said that "in the end paper gold will be sold at a discount".

In the metal supply news area, I note that many of the smaller dealers are not recognizing the spot price (adding hefty premiums) on the sell side,,,,but are trying to buy in from walk in trade at or near the paper spot price....I think this is a transitional stage to see if they can get some dishoarded metal from those that are not paying attention - and outright greed....As you know it is not working very well....Even in Ontario, Canada where the public is not paying attention it is common to see silver maples at $40 and small gold under an ounce selling for $1800 per ounce rate....

Best,

G.

Howard Roark · May 10, 2013 - 1:07pm

Mainstream Professor gets it. Again.

Part 2 of his "reading" on the financial and political corruption.

At: https://www.youtube.com/watch?v=ovPefDfJDao

Salut,

HR

dropout · May 10, 2013 - 1:11pm

The big G20 meeting of the globes financial guru's, occurred last month in Washington under the auspices of the IMF. Now we learn that the G7 financial guru's, are meeting outside London for today and tomorrow, to discuss financial reform. One or more of the participants are upset over the summons to meet, put out by the Brit's, saying that 'they didn't know why this couldn't have been resolved at the Washington meeting and not to have "spoiled" their weekend!

 The G7 very rarely meets to discuss financial reform, yet this short notice/last minute meeting called by the Brit's smacks of desperation. Or, at best some emergency within the west's financial sector that requires immediate attention. When connecting all the 'dots' since the start of the year, one comes to the conclusion that this must have something to do with the unprecedented global demand for physical gold and silver. What else could it be?

Mickey · May 10, 2013 - 1:14pm

while its backed by the metal its still a paper investment. Taking delivery of the stock certificate is a leg up. But nothing is the same as physical in your very own possession.

I have a nice chunk of physical and also phys pslv cef and gtu. I do not know where to hide my stuff anymore as I am deathly afraid of bank safety boxes or even private depositories.

I have some in gold money-incase just the US and Europe and Japan crap out you can go to aisa and get it from their hong kong branch.

no easy answers.

and if in company 401k your choices are limited. My daughter borrowed from her plan and bought coins.

Mickey · May 10, 2013 - 1:15pm

"what difference does it make"

incompetence and greed and being corrupt drives everything.

thisismynewname · May 10, 2013 - 1:17pm

I bought my first phyz Jan 25th, 2001. The lightbulb started to get brighter for me, then it became clear to me by Jan 2005 - so clear that I maxed out my credit cards on low interest for the life of the loan and go all in on silver. At the time, I talked to family/friends about market interference (plunge protection team - later verified to be the Presidents Working Group on Finacial Markets), Govt. stat lies (GDP Deflator fudging back then), and other malevolent actors trying to steal my money. For the most part, I was laughed at. 

Over the years (12+ now), one or two of my close acquaintances have waken - the rest still laugh. But I don't talk about any of that anymore - considering what use to be a cloudy manipulation that could only be seen by inference, to what is now direct, in your face lies on a constant basis.

But to the meat of this post - before the blatent lies, TA would work to some degree because the PTB (otherwise known as A$$HOLE$) were trying to obfuscate their actions. But things have gotten so precarious, they no longer try to pretend to be working in a free market place. So I don't think TA is going to work again until the reset. Consider...

  • You can't invest in bonds, when the bond bubble blows, you'll get wiped out
  • You can't invest in the stock market, when the QE bubble blows, you'll get wiped out
  • You can't hold dollars, when the currency markets impload, you'll get wiped out
  • You can't hold other currencies, see above
  • You can't hold land (unless you're producing on it) - when the Govt. bubble blows, you'll get wiped out
  • You can't short the market - you don't know how long they can keep it up
  • You can't short bonds - see above
  • You can't invest in mines - see SRocco's excelent stuff

If you want to gamble - you can try to move in any of the areas above - but to a large degree it is a gamble, and your odds of losing significant capital is high.

It's easier for me - my basis is low - but I don't think there is anywhere else to go - other than stack. I have a low basis on lead too - but I don't think I have enough.

pforth · May 10, 2013 - 1:18pm

The pros:

  • Unlike GLD and SLV we know and trust the custodians. 
  • Unlike GLD and SLV we know the bullion is there and unencumbered.
  • It is stored in Canada, not the US. A marginally safer jurisdiction.
  • You can invest from your trading/retirement accounts.
  • Safe from home robberies.

The cons:

  • If they are in a brokerage account your brokerage could get Corzined. This risk can be partially offset by having a margin-free account. It can be completely offset if you take possession of your share certs.
  • The Canadian government could pass a law to confiscate the bullion.
  • The US government could pass a law to confiscate your share certificates.
  • Small yearly management fees.
  • Trackable for cap gains taxes.

I personally am heavily into these vehicles...but I live on a small Carribean island nation with no bullion dealers and huge import customs duties and limitations. Were I living in Canada or the US I would still have some but likely lean more to physical stacking than I do now.

mrneutron · May 10, 2013 - 1:24pm

Good interview.

https://www.zerohedge.com/news/2013-05-09/jim-grant-golds-recent-drop-confidence-bernanke-utterly-misplaced

"Inflation is a state of affairs in which there is too much money," Jim Grant notes in this Bloomberg TV interview, however, "It's not too much money chasing too few goods," he corrects the misnomer, "the thing this money chases is variable." Whether it is Iowa farmland, housing, stocks, or bonds, central banks are stuffing us with it. Yes, equities are high, but Grant explains, "beneath the surface of things or not so far beneath the surface of things," it is not at all good, adding that, "Central bank 'original sin'," is akin to Revolutionary France, and he shows no concerns over Gold's recent dip, noting "a general fatigue animus towards gold," that seems predicated on more confidence in central bankers; to Grant, "that confidence is utterly misplaced!"

On Gold:

Gold has been in a bull market for 12 years. Gold is this rare thing in which you can be bullish and yet contrary and also with the trend. There is I think a general fatigue animus towards gold. The gold prices are reciprocal of the world's view of the competence of central banks. The greater the world's confidence in the Ben Bernanke's of the world, the weaker the gold market. The less the world holds confidence in the institution of managed currencies, the stronger the gold market. And to me the confidence is utterly misplaced,

RationalMind · May 10, 2013 - 1:24pm

A question to Turdville.

Perth Mint allows one to own bullion via their depository program - both allocated and unallocated. Since they aren't affiliated to any banks, and are part of Western Australian state govt, there's no risk of bullion leasing. The other upside is the international storage.

However, if the emphasis is to hold physical, it seems one should take delivery of the allocated/unallocated bullion from Perth Mint. Is that preferable vs keeping it internationally?

Look forward to hearing the various viewpoints.

goldenbear · May 10, 2013 - 1:26pm

I'm almost speechless. I guess I can just expect to come here now, read a well written post by Turd... and then overly simplistic, asinine posts in contradiction. I don't mind hearing opposing views but at least pretend you're thinking when you post something people have to take time to look at. So its simple... confirmation bias. And clearly NOT the obvious misallocations of capital and blatant criminality in all these markets today? And coin premiums beginning to fall disproves record demand worldwide? Clearly...

· May 10, 2013 - 1:27pm

murphy's post in the last thread jogged what's left of my mind: just randomly poking around on Netdania I noticed that they added the Turkish Lira to the list of currencies in which you could watch gold in April or May of 2012, but they didn't add it to silver. 

Turkey occupies almost half of Cyprus. I only need a conspiracy theorist to tell me that there is an underground headquarters beneath the Mediterranean, with some entrance guarded by an ancient Minotaur, in which a descendant of King Midas sits, rubbing his hands with glee while ruling the world. So much for the Denver airport.

Something is up, and it isn't my net worth.

The Green Manalishi · May 10, 2013 - 1:35pm
Gross Says Bond Bull Market Probably Ended April 29 By Paul Cox & Alexis Leondi Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest fixed-income fund, said the 30-year bull market for bonds has probably ended as yields reached a low and prices peaked.

“You need to look at an amalgamation of Treasuries, mortgages and corporates, and not just Treasuries,” Gross, co-founder and co-chief investment officer of Newport Beach, California-based Pimco, said in an e-mailed statement. “Measured on that basis, 4/29/13 has been the price high and yield low, to this point.”

Gross, who earned the nickname “The Bond King” in media outlets and was awarded fixed-income manager of the decade in January 2010 by Morningstar Inc., said today on Twitter that the bond bull market has “likely ended” and that fixed-income returns will probably be in the range of 2 percent to 3 percent. Gross spoke about an end to the fixed-income market rally in 2010, saying in March of that year that bonds may have seen their best days and then eight months later that a renewal of asset purchases by the Federal Reserve would probably signify an end of the bond bull market.

The yield on Bank of America Merrill Lynch’s U.S. Broad Market Index, which includes Treasuries, corporate debt and mortgage bonds, fell below 1.58 percent on April 29, before rebounding to 1.67 as of yesterday. Yields on 10-year U.S. Treasury notes fell to 1.61 percent on May 1, the least since December. The yield dropped to a record low of 1.38 percent in July 2012. The yield climbed to 1.93 percent today, reaching the highest intraday level since March 26.

More: https://www.bloomberg.com/news/2013-05-10/gross-says-bull-market-in-bonds-likely-ended-april-29-1-.html

ENOUGH · May 10, 2013 - 1:35pm

It's data is accurate, not manipulated

It is meaningful gauge of the positioning of the large and small speculative classes and accurately reflects momentum driven "dumb money" sentiment/positioning. Therefore, the COT is very useful in this regard.

But in the case of the Commercial class, they are extremely sophisticated and there are just too many other avenues for them to offset Comex positions with other opaque markets to get a read on their true positioning.

This cuts both ways.....

The Commercials could be much more bullishly or bearishly positioned then the Comex COT indicates.

I would urge TF to continue to use the COT as a reliable indicator of mkt direction especially in relation to the speculative classes and to share his weekly COT thoughts with readers.

of course all, IMHO

GLTA

Bollocks · May 10, 2013 - 1:35pm
Video unavailable
SilverSurfers · May 10, 2013 - 1:38pm

as always, and note the evil one blew it out downward first thing, showing up for work, but the buyers came back, TBFDs, so, the fight is on, for reals, and at the stroke of 9, but then came spanky and our gang, and despite two blow outs, painting the tape in after hours, and this morning, in less than 24 hours, bugs closed at mondays low, a good sign. Just noticing, Just Saying.

NonoverlappingMagicCereal · May 10, 2013 - 1:45pm

And coin premiums beginning to fall disproves record demand worldwide? Clearly...

Nope, I never said that or even hinted at it. I'm not even trying to argue about what is going to happen to PM prices over any time window.

My only point is that the majority opinion here was that the paper/physical disconnect was real and here to stay, and ignored completely reasonable market-based explanations for temporary premium hikes.

If you disagree on that point, I would love to hear a counter-argument.

ctob · May 10, 2013 - 1:46pm

See your problem, Turd, is that, much like QE, you haven't been doing enough. That bottle needs to be rising up to your lips at least twice as fast. Kind of like the WKRP episode when Johnny Fever and Venus Flytrap had reaction speed test after taking shot after shot of whiskey while on the air and Johnny got faster and faster the more he drank.

Headswim · May 10, 2013 - 1:47pm

I'm in almost the identical situation with the exception that I've been blessed with a wife who is onboard with stacking and understands why. I can't take out my 401(k) without quitting either, so here's what I did:

Take proportionate parts from all vehicles and move 50% into a money market fund (cash). Ya you take the inflation hit but your balance won't go down at least. The rest is in a mix of us large and small cap funds, growth funds, and Asia since China is still showing some life. 

I figure if the market crashes, I protect half, and if it keeps going up I just miss out on half of my potential upside. My stack is almost as big as my 401(k) since I'm only 25. Another possibility is that your 401(k) may allow you to take out for "hardship" which can actually include the purchase of a primary residence. We're considering that as a way to get the money out, then refi and buy pms

· May 10, 2013 - 1:53pm

Here is a chart showing gold in Yen (green) and USD, going back to 2005ish. I think I am okay comparing the numbers (but I could be being a nitwit, and if so, please be so kind as to point it out politely). It looks like the price of gold in Yen (or Yen priced in gold) started to get away from the USD price, and then in the fall of 2008 they violently were brought back in line. Then in the summer of 2011, it all goes haywire again. It looks like increased volatility brought on by enforced control. What could go wrong?

But I am wearing my confirmation bias glasses. I am still waiting for my silver and gold pajamas, because it really isn't a cult without pajamas. 

The Watchman · May 10, 2013 - 1:54pm
  • Something appears very wrong with the availability of Gold-328 tons were delivered in March and total delivery for May is 0.3 tons.DOES NOT MAKE SENSE.

  • Current Month Delivery: 0.3 tons of gold as of 10 May 2013.

  • Peak One Month Delivery: 328 tons of gold, March 2013.

  • Gold Delivery Since 1 January 2013: Gold delivery (year to date): 1030.3 tons.

  • Shanghai Gold Exchange physical deliveries, past years:

    • 2012: 2,379.6 tons.

    • 2011: 1,897.8 tons.

  • Week of 26 April -- strange drop off in physical delivery? As of 25 April, physical deliveries on the SGE have been 1 ton (0 tons 22 April, 24 April and 25 April). The last time the SGE has a week of just limited deliveries as base in January 2011, a month that saw 21 days with less than 1 ton of gold delivered per day. Is this due to lack of inventory for delivery?

  • World Gold Production (year to date) estimate: 1055 tons.

Grublux · May 10, 2013 - 1:55pm

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