Back From Break

You may have noticed that I was gone all day yesterday. Eleven, full hours with no phone and no internet and it WAS GREAT! So, what did I miss? Silver is all the way back to....where it was a month ago. Oh, no! The sky is falling!!

Seriously. I haven't even bothered to look over the comments to the previous thread as I'm sure they're full of despondent traders and gleeful trolls. Whatever. As I said yesterday, no one is going to stop me from doing what I do because I know, in the long term, that I am correct. Global central banks are going to print and print in their efforts to manage their way out of this debt crisis. They will fail and, with them, fiat currency will fail, too. In the end, a new international trade settlement system will emerge with a gold-backed unit of exchange at its heart. The only protection that I have against this wealth destruction is my stash of physical metal, which currently resides in a heavily-guarded vault at the bottom of the Marianas Trench.

So what do you do today? You buy the freaking dip, that's what you do. If The Bullion Bank Cartel is going to insist upon giving us all more time to accumulate metal at deeply-discounted prices, I strongly urge you to take them up on it. Lord knows the Chinese, the Russians, the Indians and the Turks are doing so. You should be doing the same. Namely, convert your rapidly-devaluing dollar reserves into hard assets, primarily gold and silver. Forget the goons in the media and the water-carrying shills for The Cartel, gold and silver are NOT in bubbles. That is complete nonsense! Since when does an asset that is currently owned by just 1% of global investors considered a "bubble"? Since The Cartel shills in the media declared it so, that's when. Ridiculous.

And while, we're at it...How come no one besides ole Turd can dare say that QE is all about funding the federal deficit? The "dots" are all there yet no one seems to want be able to make the connection. Countless articles have been written about The Fed essentially owning the entire Treasury issuance past 7 years. The fiscal 2013 deficit is already tracking 20% ahead of 2012 and on pace for $1.7T and suddenly the Fed announces that they're supplying $85B/month ($1T+/yr) in new money...yet no one can see that this is direct monetization of the deficit and debt? It's surreal. It's the real life equivalent of the old fable about the emperor having no clothes. I look around and its as if no one else can see what I see. Bizarre.

Oh, well, I for one choose NOT to bury my head in the sand and hope for the best. I will use my God-given observation and reasoning skills and think for myself, instead. This leads me to the financial protection of gold and silver and nothing The Cartels does can shake me from my positions.

To that end, yesterday was a classic. The lack of follow-through buying on the latest QE announcement emboldened The Bad Guys to raid price early Wednesday evening. Once they tripped some stops by moving price below 1705, it was on. The raid was particularly grotesque in silver where the OI remains dangerously high for JPM. In fact, on Wednesday, the total silver OI surged once again to 144,066. This long-standing and growing open interest undoubtedly frightens The Big Shorts and they knew a raid must be initiated. Thus, the pounding in gold wasn't nearly as substantial as the pounding silver took yesterday. I wait with great interest for yesterday's OI totals. They should be released, as usual, by about 2:00 EST today. In Harvey parlance, how many silver leaves were shaken from the tree yesterday? I can't wait to find out.

Along with the OI numbers, we'll also get another CoT later today. It won't be nearly as dramatic as last week simply because the reporting period saw very small changes in both OI and price. Nonetheless, you never know how the internals may change from week-to-week so be sure to check back later today. I'll have another podcast to release and we'll surely be discussing this latest CoT.

And, finally, just a few more words about price as we head into the final days of 2012. Let's summarize a few things:

  1. Though the inaction behind-the-scenes is infuriating, I still expect vindication for all of us in 2013.
  2. I had thought that gold and silver would finish the year at or near the top of their 2012 ranges with gold near 1800 and silver near 35. This is certainly looking less likely but I would remind all of the trolls that there are still quite a few trading days left in the year.
  3. And as recently as a week ago I laid out why I felt December would be a solid month. Namely, given the overriding fundamentals, there is no reason to think that the metals would close 2012 by trending downward toward the bottom of the ranges. This makes no sense. If you look at 2012 as a year of price consolidation during a time of little unsterilized Fed action, price should be trending higher into 2013, a year which is quite obviously going to see substantial unsterilized Fed action.

In 2012, Gold has traded in a range roughly bounded by 1550 at the bottom and 1800 at the top. The median line for this range is 1675. Note that the recent selloff has not broken price down below this level and I do not expect any further selling to breach this level, either. Instead, I expect gold to rally over the remainder of the year. Will me make it to 1780-1800? Who knows? Does it matter? Really? With all that's set to happen in 2013, a year-end close of 1730 vs 1780 matters very little.

The same could be said for silver. For 2012, it has also been rangebound in a trade between 26 and 36, with a median line of 31. Again, given the fiat currency situation for 2013, the continuance of extremely tight physical supplies...and...other factors..., why would we expect silver to break down through $31 and head toward the low end of the range? Exactly. There is no reason to expect this and, therefore, I don't. Silver should/will continue to consolidate here and finish the year somewhere between 33 and 35. Then....it's on. 2013 is going to be a doozy.

So, relax or, better yet, do what the LTs say to do: Chillax. This is a combination of "chill" and "relax". Take some time away like I did yesterday. Enjoy the season and search for joy in things unrelated to money and finance. Be at peace knowing that you are doing the right thing.

As I mentioned above, please check back later today or tomorrow for another exciting TFMR podcast as well as some commentary on the CoT.

Have a great day and a great weekend!

TF

492 Comments

Byzantium's picture

@ tyberious re $35

Dan Norcini reckons there isn't much resistance between $35 and the low forties. Couple that with the fuel in place for the mother of all short squeezes, and you get the picture. Alistair Macleod also recently discussed the exceptional short interest in silver, that could get things 'disorderly to the upside' if triggered.

The problem with a silver surge of course, would be the risk of inspiring its bigger brother to surge too. 

JohnnyR's picture

BBC thinks we should keep our old socks

This is off topic, but worth a mention, I think.

http://www.bbc.co.uk/news/science-environment-20595226

There was a story on the BBC News website a few days ago, regarding silver in clothes. The story was basically about whether silver posed any risk to humans when it was ‘washed’ into the water supply. That wasn’t the interesting part though. Right at the end of the piece was the following comment …

“Silver is rare - Some estimates suggest that our global resources may be depleted within 30 years.

It makes recycling silver a smart thing to do.”

I know the 30 year depletion estimate will be contentious here in Turdville, but look at the first three words of the quote … ‘Silver is rare’.

It was the first time that I had seen MSM pointing out that ‘there aint that much of it left’.

Groaner's picture

USD really dropping now.

ah yes, the good old days when the metals traded inverse to the PIG.. We should be up a lot right now!

Big Buffalo's picture

awe man

my butt hurts

Turd Ferguson's picture

I disagree (EVERYONE PLEASE READ)

MODERATOR

The Fed is buying $45B in treasuries directly from The Treasury Department. This is direct monetization of the debt and money that is put into circulation by federal government spending, transfer payments etc.

The Fed is also buying $40B/month in MBS from the Primary Dealers. This does two things:

  1. "Cleans up" the PD balance sheets by allowing them to exchange the near-worthless CDS for cash which the PDs then, in turn, use to purchase treasuries.
  2. By purchasing $40B/month in treasuries, the PDs artificially create demand for treasuries at auction. This demand, when combined with Fed demand, creates $85B/month in buying pressure at auction. This continues the illusion of a healthy bond market, keeps auctions from failing and holds interest rates at extraordinarily low levels.

IT IS CRITICAL THAT EVERYONE HERE UNDERSTANDS THIS. THE FED IS, EITHER DIRECTLY OR INDIRECTLY, MONETIZING AT LEAST $85 BILLION DOLLARS PER MONTH OF U.S. GOVERNMENT DEBT. PERIOD. END OF STORY. 

AlexCojones's picture

We Deal with Shills & Sheep Everyday

"There are none so blind as those who will not see."

We deal with shills, trolls, woefully ignorant, sadly stupid and laughingly blind every day. WE STACK. To the masses, we are insane -- until such time that we aren't. Mister T is right. We may look deluded now, but one day we'll look like Nostradamus with a crystal ball.

So spoof the shills, satirize the trolls, and deride the so-called "Experts" as this fellow did. http://Mythbusters Tackle 911

Turd Ferguson's picture

In truth...

MODERATOR

....I should never have mentioned my HEH stuff in the first place. I only did so because I expected events to move rapidly last summer and, with price so low, I was afraid that many would panic/give up at the most inopportune time. Never (though maybe I should have) did I expect this egregious inaction and delay.

I only mention it again from time to time because so many now seem to think I'm full of shit...some kind of charlatan looking for pageviews. Let me assure you, I'm not. Events will be forced into action in 2013, of this I am certain. Be patient.

Regarding those who give up and sell because they think I'm just another KWN-style pumper...secrew em. I couldn't care less. Can't save everybody.

Response to: Turd says...
old tradesman's picture

From william banzii in pictures

http://www.flickr.com/photos/expd/8268025737 

visual aid for what turd is trying to expand on

Groaner's picture

could someone buy another silver coin

to give it a kick in the butt. silver is the sick poster boy today..

Schmittchen72's picture

Bread and Circuses

This is all a matter of suspend you disbelief:  The U.S. $ the Euro obviously manipulated through QE; the invisible hand has been slapped around by banking, derivatives, high-speed micro triads etc. The dollar looks stronger than the Euro, Paper silver is being pumped and dumped to keep hedge funds working.  The sheeple are happy the elitists are happy because they are in control.  The fear of the fiscal cliff my cause people the average Joe to buy physical silver from Apmax or NWTM, or some other online seller this Christmas.  When these prices stay low for spring, that will be good for India to buy some PM. Maybe the invisible hand will finally reach up and grab COMEX by the Nuts in April 2013 J

achmachat's picture

groaner

I actually would if my dealer was to lower the price to reflect the current spot price.

If the price stays this low until Tuesday, that might happen.

ag1969's picture

@ the circle

I think you may have a more successful outcome if you ask Obama for the money.  You can get your Dad's shit for free if you got the EBT.  I need to teach you newbies everything!  Obama money man!  It's where it's at.

The phone number to the White House is 202-456-1111.  And don't come back on here saying that nobody was willing to help you.  There is a high probability that this will work for you because it worked just fine for 47 million of your fellow countrymen who asked before you.

Best of luck to you circle, and Merry Christmas to you  and your very lucky Dad,  from all of us here in Turdville.  Cheers!

Pining 4 the Fjords's picture

For those who took TF's advice on HEH

And bought in August, either trading or stacking, here is a little something to chew on.  Honestly, what the hell are you crying about?  Seriously...  if the advice of a broker or a 2 and 20 hedge fund manager brought you these returns FOR THE YEAR, you would be lionizing the guy.  These are 4 month returns, the dude does this for free, and you bust his balls?  Really? 

.

Just FYI, I was already working on this chart for my own use, I wanted to look at the decay of various instruments over a typical swing-trade period, and see how it stacked up (so to speak) against straight physical silver...  was just interested so I ran this.  PHYS sure has been a dog, comparatively at least, hasn't it?

indosil's picture

@ Turd

As far as i know entire Europe & USA will be enjoyin an extended Christmas beginning on the 22nd.

Traders square off their position before christmas...so don't you think it gives them a perfect setup to knock down the Metals even lower...just like last year??A perfect garb for another massacre??

I am just airing my thought.....just wondering. 

Bulk Pogan's picture

Nigel-I'm a long-time lurker & new member

I cannot speak for others (obviously) but, in my own case, I've been reading TFMR for about a year now and putting any and all extra fiat into silver (mostly) and gold every chance I get. I *SO* appreciate all that I've learned from all of you and especially Turd that I simply believed that, at this "low point," it was time to join up and do what I might to bolster this community as best I can. My wife and are sure are not wealthy and we are trying to get a pair of daughters through college, but if we've learned nothing else; our currency is moving toward zero value and we've got to do *something* to protect ourselves. We've managed in a year to squirrel away a couple hundred ounces of Ag and a few fractional pieces of Au. I've even managed to get one daughter stacking as well and she's put away a few dozen ounces of Ag.

My own perspective mirrors to a large degree Katie Rose's. With degrees in agriculture and living where I do, I simply see how vulnerable our entire economy is to cheap, abundant diesel fuel. My concern is for when the $US fails to be the world's reserve currency/petrodollar and how that is going to affect food production and especially food distribution. Virtually everything that my community consumes is currently trucked in from hundreds of miles away. It wouldn't be necessary but it is. What will happen in this end of the great Keynesian experiment when we no longer can afford to produce and distribute food as cheaply as we have? I think a lot of folks (free *hit people, especially) are going to be up in arms and very hungry.

Obviously we are "prepping"...big time. 

Consequently, for me, Ag/Au in hand is merely our hedge against our vulnerability to higher fuel prices. Forget wealth protection, we have no wealth to protect...besides our love and support for one another. A great day for us is when we see green for our metals and red for WTI or Brent prices. For us, metals are our survival hedge!

Bottom line? I don't think this is going to continue much longer. I suspect that it will heavily involve China, Russia and the many other BRIC nations that are currently signing bilateral trade agreements to get out from under our worthless and fraudulent system and currency. Maybe it will take a few more years, I don't know. But when all that $US begins to flood back home to our shores, look out! Actually, I hope it hold together until at least 2015 as we'd like more time yet for the sheeple to wake up and stack/prep themselves. But it *IS* failing and it *WILL* ultimately fall. All my wife and I can continue to do is buy as much as we can when we can and pray.

Now back into lurker/learner mode! Thanks everyone.

El Gordo's picture

Monarch still has...

...some of its "Buck for a buck over spot" rounds available.  Might be a good time to stack a few if all you are interested in is the silver and not having to have ASE or the like.  I'm considering it - pricing looks pretty good right now. 

http://www.monarchpreciousmetals.com/index.php?option=com_virtuemart&page=shop.browse&category_id=30&Itemid=53

hammerman's picture

u do a good job as always turd

dont let em get you down.... did you get with your people yesterday and confirm the major sell off i been telling you bout for last 6 weeks?  SPX 1317 IN NEXT 10 DAYS...    dont be last on or off the bus....  crushed turds under the bus wheels still stinky like chit bomb...

Nana's picture

Do You Have a "Mental Disorder"

http://www.pakalertpress.com/2012/12/14/psychiatry-goes-insane-every-human-emotion-now-classified-as-a-mental-disorder-in-new-psychiatric-manual-dsm-5/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+pakalert+%28Pak+Alert+Press%29

Psychiatry goes insane: Every human emotion now classified as a mental disorder in new psychiatric manual DSM-5

The industry of modern psychiatry has officially gone insane. Virtually every emotion experienced by a human being — sadness, grief, anxiety, frustration, impatience, excitement — is now being classified as a “mental disorder” demanding chemical treatment (with prescription medications, of course).

The new, upcoming DSM-5 “psychiatry bible,” expected to be released in a few months, has transformed itself from a medical reference manual to a testament to the insanity of the industry itself............

............You can also get diagnosed with “Hoarding Disorder” if you happen to stockpile food, water and ammunition, among other things. Yep, being prepared for possible natural disasters now makes you a mental patient in the eyes of modern psychiatry (and the government, too).

-----------

Wow! Think of the implications of this. Just because you prepare you now can be classified with a "mental disorder". They could use the DSM-5 "psychiatry bible" to take away peoples guns, peoples food, peoples metals, put them on drugs or lock them away......

brokerk22's picture

Just keep doing what you are doing

Turd,  just keep doing what you are doing.  Screw the trolls.  We need you.  Please dont be afraid to keep us informed because of the trolls either.  Just screw them and forget em.

dgstage's picture

Response to In Truth

Turd, do not be so hard on yourself. I think the majority understand what you are trying to do. For those that are so blind, and cannot see how this is going to end, there is no help. 

This power that has been in place for so long cannot be toppled easily, but I agree with you it will happen.

So the weak I would say F off.

Silverman's picture

Don't worry Turd

We are battle tested veterans. We will still stack no matter what. I'm following you since your blogger days. Even my friends started stacking. 

Road_Scholar's picture

Circle Jerk and the other chicken littles...

you're right.  Please be "patriotic" and buy 30 year $US Treasury Bonds.  They yield a return of almost 3% and you can sit back collect your dough worry-free!

For being a good citizen, you also get to join the food-for-free-club:

http://www.fns.usda.gov/snap/

indosil's picture

Gold Untouched but but Silver

Gold Untouched but but Silver...............i dunno why but Gold seems to be completely ignored in today's action....

As i posted in the last thread.https://www.tfmetalsreport.com/comment/247405#comment-247405

All Gold did the entire dya was to knock at $1700....min 30 times i guess.....but Silver is getting special attention....why are they so desperate???

US downgrade on the Card???

But WTFDIK

Groaner's picture

sign of the times.

CHICAGO (MarketWatch) -- An alleged gunman who opened fire in a Newtown, Conn., school Friday morning is dead and three others have been hospitalized with injuries, NBC News is reporting. Danbury Hospital, where the victims were taken, would not give their ages or conditions, the network said. Students were evacuated from the school and were being reunited with parents at a nearby staging area. About 600 children in kindergarten through fourth grade attend the school. 

kn33bar's picture

Hello Turd

Thank you for all you do.

Do you have any updates on NASE I'm afraid it has gone the way of PAGE.

Hope I'm wrong on that.

Thanks

opalboy's picture

gold and silver

are the price of safety,

that's why they have been going up over the years.

And I read a report where they are saying it might be the chinese and russians manipulating the metals markets.

Well it is still manipultion, regulators! Do you people do anything?

Silverman's picture

Watching gold charts

Looks like gold is also ready to follow silver. Daily stochastics nearly crossing for downside. 

Fr. Bill's picture

Turd: "Can't save everybody."

Turd Ferguson wrote:
Regarding those who give up and sell because they think I'm just another KWN-style pumper...secrew em. I couldn't care less. Can't save everybody.

I've been reading this site since early in 2011 (found it at a link at ZH).  I learned a lot.  Lots and lots.  From Turd and also from regular Turdites.  I made my own Turdite enrollment in November 2011 (it lets me ask questions, and I've gotten helpful answers/interactions).

Result?

1.  Excepting for real estate, I'm "all in" as far as other assets are concerned.

2.  PMs are now my "bank" -- the way I store non-real estate assets.  The business down the street that also calls itself my bank is a kind of monetary utility, a place from which to wire fiat to BV, where it goes into PMs, or occasionally to receive funds from the BV account, such as at tax time, or to pay a tuition for the last kid in college,. 

3. With about 20 percent of those non-real estate assets, I've been hopping in and out of the silver market (well, BV's circumscribed market, which sluggishly mimicks the ordinary paper market).  This has generated a tax liability (!) because I've made money (!!), an amount that freaked out my tax preparer when he did my 2011 tax return (!!!). He thinks I'm some sort of PM trading guru.  I told him I just read and benefit from a community of folks called Turdites, headed up by a fellow named Turd Ferguson. He thinks I'm just joshing him, funnin' with him instead of letting him know my secret.  

So, Mayor Turd, I expect there are quite a few others who have done something similar, probably some of them much earlier than I did.  

Thanks, till sparrows weigh a ton.

Byzantium's picture

China as the big short.....

Following on from the discussion on the previous thread, another intriguing aspect of this speculation occurred to me.

There has been much talk of China encouraging its citizens to but PMs. Some say that this encouragement, is nothing more than the quiet legalisation of owning PMs there. I don't myself know the truth.

Nonetheless, the theory goes, that if China is planning a gold backed currency, then it wants not only to acquire sovereign gold, but wants its citizens to acquire PMs too, so that China's punching power on the world stage is bolstered by public and private gold & silver. Some who have made this connection, theorise that China is setting a floor under the PM prices, so as not to discourage its citizens from their migration to PMs. This makes logical sense, but is just a theory of course.

If true, it has all sorts of new implications, and raises new questions. How to encourage its citizens through such price signals, without encouraging everybody else?

Anticipating PM prices, under the assumption that China is the big short, needs to consider this connected line of thinking too. There  is anecdotal evidence of a cap, but also of a floor.

Turd Ferguson's picture

No it has NOT gone the way of

MODERATOR

No it has NOT gone the way of the PAGE. It has simply been a cumbersome process of bringing it online within the greater Chinese bureaucratic changes in 2012.

"NASE" will begin operating in 2013 and it is one of the fundamental and monumental changes that is just over the horizon.

Response to: Hello Turd
Syndicate contentComments for "Back From Break"