The Fed Disappoints

Tue, Dec 13, 2011 - 3:48pm

HAHAHAHAHA! That's a good one! As if having the Fed overtly printing money would solve all the worlds ills.

Once again the media incorrectly spins today's FOMC minutes as a postponement or even a (gasp!) cancelation of further quantitative easing. Buy the dollar! Your evil Sith masters are such responsible stewards of the economy that they are prepared stop the presses and enforce credit discipline upon a spoiled, bloated populace.

What a joke. Up goes the dollar and down goes nearly everything else. Please, I hope you are able to see through the fog of this nonsense. Again I ask you, from where is this year's $1.5T U.S. budget deficit getting its funding? From where did the U.S. government get their funding last year? From where will they get it next year?

Oh, whatever. I'm not going to go through all this stuff again. QE to infinity is the only possible option, whether or not Maria Headiromo and Bob Pissonme agree makes no difference, whatsoever.

Anyway, back to important matters. I trust that the continued weakness in the metals is not catching anyone by surprise. Nothing has changed from yesterday or last week and the selling continues. Gold looks almost certain to head toward its 200 day moving average near 1615 and silver looks to be headed to 30. The big question is:


Maybe. However, I've got a sneaky feeling that they won't. I suspect that we will see a capitulation in paper selling when gold doesn't stop at 1610 and silver doesn't stop at 30. I've maintained for some time now that paper gold was vulnerable to a drop to 1550 and that paper silver could drop toward 25. Why change that forecast now?

I just saw the OI numbers for yesterday and they are very interesting to say the least. The Feb11 contract only saw its OI drop 1500 contracts. For a $50 drop in price, this is an extremely surprising number. First of all, this nearly confirms for me that much of the front-month trading is done by WOPR. There seem to be very few, human holders of these contracts. Also, it's clear that much of the decline yesterday was due to the initiation of new short positions by The Cartel. Again, with lease rates at -0.5%, this shouldn't surprise anyone. The BIG story is the rise in Dec11 open interest by a net of nearly 500 contracts, from 1545 to 2034! The question is: Who is jumping the queue and why? Is global demand for physical metal this month finally going to be sufficient to explode the Death Star? Is this why The Cartel has desperately suppressed price over $300 in the past 3 months? I sure can't wait to see what tomorrow's numbers are.

As I wrap up, gold is 1633 and silver is 30.65. I sincerely hope that the discussions here over the past week have helped prepare you, financially and mentally, for this brutal selloff. Keep the faith. The only thing truly declining in value is paper gold and silver. I say this with confidence because thephysical gold and silver you have in your possession is invaluable and thus insulated from the day-to-day shenanigans of the paper market.

I'd like to type more but the LTs are planning a birthday party tonight for Taylor Swift and I have to go bake a cake. I hope to have more commentary this evening. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


NW VIEW ragandbone
Dec 14, 2011 - 12:34am


My view is not of the cost to find and drill nor is it about the amount that still is within the planet. My focus is upon the origin of the material itself. Shortages are always created in all arenas to boost pricing even if it is a tulip bulb. I hope you are successful in your exploration and find the "big one" and that would be a blessing for yourself and those who will use it. For me, the word "Fossil" is the Hoax and it is JMO. Thanks for your post.

Dec 14, 2011 - 12:34am

@California Lawyer

(Regarding your last post) It is all part of the snake eating their tail.

And could you please look at this. Just click on the link here for the court papers!!!

The PDF court papers are here:

The link to site here:

As CauseChange and I (reposted quotes) to the Dragons gold that is being held hostage? Please read the PDF file of the Law Suit papers and give us your opinion. We would all enjoy your thoughts on the legalese of the trial papers.

Thanks, Silvergunn

Dr Durden
Dec 14, 2011 - 12:36am

Gold, oil, QE3 @ FOMC

How was Benflation going to whip out the formal QE3 stick with oil at $100?

QE2 took oil up 20% from then till today and up 140% to the peak.

Any guess what it did for gold by similar measure?

Same damn thing: up 140% from $1325 to $1920. Up ~25% till today.

I'm using the beginning of Nov 2010 as a reference.

Why in the hell did the market even try to bake this in? I don't get it.

So Ben comes out today with QE3 and gold goes to $2300 and oil to $140 by Election Day 2012???


Louie CauseChange
Dec 14, 2011 - 12:39am

$134 billion in mystery bonds

I have followed this story since it broke. I am sure that there is more to it than meets the eye. The last official story that I heard was that the bonds were counterfeit. If that was true, Why was no one charged with the crime? If someone was dumping, who was it?

My bet is that it was the Chinese trying to turn their US bonds into physical gold.

Harvey Organ posted a great article from the FT tonight. From the article:

China imported 85.7 tonnes of gold via Hong Kong in October, up 50 per cent from the previous month and up more than 40 times (DID YOU READ THAT CORRECTLY? 40X THE IMPORTS!!!!!!! Not "up 40%", that says imports are up 40X!!!) from October last year. It is the fourth consecutive month that China’s gold flows through Hong Kong have hit new highs.

Silvergunn Louie
Dec 14, 2011 - 12:44am


That is only new gold, this what we are talking about is old gold!!! And not returned:

(b) Upon information and belief, between 1927 and 1938, as a
result of arrangements made between China and the United States,
the United States purchased some 50 million ounces of silver and
leased vast amounts of gold from the Nationalist Chinese
Government, known as Kuomintang. During this period, China
was partly occupied by Japanese troops and there was a fear of
China being overrun by the Japanese.
(c) Upon information and belief, in return for the precious
metals delivered by the Chinese, certificates were given pursuant .
to private agreement made between China and the United States.
These certificates became the underlying funds of the Kuomintang.
Louie SilverWealth
Dec 14, 2011 - 12:54am

@ SilverWealth- Correction

There is the possibility that there will be confiscation here in the US, and there is the possibility that the government will begin to impose confiscatory taxes on the sale of physical. That is why it is important to think about how you will sell your stack as you are buying it. Are you charging your purchases from APMEX to your credit card? Are you doing wire transfers to Tulving from your primary checking account? The paper trail leads right to your front door.

Huge advantages for PMs are that they are portable and easy to hide. If it becomes disadvantageous to sell PMs in America, why not bury your silver, keister out your gold, and then wait a few years?

Did anyone besides me read the allegedly first hand accounts of the man who survived through the Bosnia ordeal? DO you remember what he said would be the first thing that he would do to prepare for something like that again? He said he would get a plane ticket and get out.

Never forget that one of the biggest reasons that governments hate PMs is because if everyone conducted commerce in PMs there would be no records, no trail, and no way to collect taxes.

Santa's Elf Dr Durden
Dec 14, 2011 - 12:59am

@ Dr Durden

Great point. No way on earth QE3 is going to come in the face of 3-figure oil and a 12,000 pt. Dow. The ensuing inflation would have lynch mobs ready to hang Bernanke. Makes far more sense for the Fed to bring on QE3 in the face lower priced oil and an ailing stock market. Under those circumstances, the sting of rising prices at the pump is lessened and Joe investor is begging for QE relief for his 401(k) on life support. In this scenario, Bernanke is likely viewed a savior, whereas prematurely, overtly injecting more liquidity into the markets paints him as a goat. I have no doubt the Fed wants to keep the deflation in check and is planning to lay out the welcome mat to future inflation in a big way. But frankly, this is all one big posturing act leading up to the 2012 Election.

vamoose1 Yooper Rick
Dec 14, 2011 - 1:10am


not nadler............ nadless carry on.

Santa's Elf
Dec 14, 2011 - 1:20am

@ Louie

I like your line of thinking, Louie. Throwing in my two cents, I would add that if ENFORCEABLE confiscation/taxation ever takes hold in this country, you can probably expect to see grey/black markets coming to a neighborhood near you, amongst other things.

With respect to the first-hand Bosnian accounts, I read them and found them pretty enlightening. If I recall correctly, he didn't really speak much about the value of owning precious metals, as he exchanged all of his for ammo early on. However, if we have similar circumstances in the US, I'm not sure his recommendation of leaving the country is all that practical--if the US economy goes up in flames, so goes most of the economies of the civilized world, with only a few exceptions. At that point, PMs would take on a far more significant role than they would in an isolated economy like Bosnia--- we're dealing with global ramifications.

Dec 14, 2011 - 1:24am


I checked out the pdf, here.

First, the Plaintiff Neil F. Keenan, is an American, living in Bulgaria. Very interesting. His attorney is solid, been around since 1974, from a solid firm. The firm and atty bio are here.

I glanced at the complaint. I am not going to delve into the details, as I have not the time right now. I will say this: it is in all respects, properly plead and will survive an initial 12(b)(6) challenge. This complaint was well thought out, and is not the product of some loon.

The allegations are sensational. There are unbelievably detailed facts, events, dates and people, which frankly, seem at once believable from the detail, yet impossibly fanciful. I say it could all be true, because not even a script writer could conceive of this.

For example, read this:

"165. Dr. Soekanto has further agreed and has confirmed that he holds the "full secret Book of Codes (Maklumat Book) and Ledgers and all Records of the Accounts as delivered" to him and that, upon their request, he will "deliver or cause delivery of the originals of such books for presentment to any court determined to have such jurisdiction" and " for any other purpose" KEENAN may require or need the Books. KEENAN and others under his direction are presently in custody of certified copies of said Book of Codes (Maklumat Book) and Ledgers with the authorizations to use them when needed.

166. These Books and Ledgers define the information that is held in the Federal Reserve screen system. They contain the secret code cyphers and data on legal decisions, treaties and other arrangements. Upon information and belief, they provide information pertaining to all the accounts and sub-accounts that contain the gold and other assets, as well as information pertaining to the financial instruments issued against the gold. Further, they specify and provide the factual information as to what is in the Global Accounts, such as who owns the gold and the source of its ownership. The protection and security of these Books is, therefore, of the utmost importance and central to the authentication and verification process." Really? Understand that Rule 11 requires the Plaintiff attorney to make a good faith effort to state true facts. Fake allegations get the lawyer in serious hot water. Here is the rule: RULE 11. SIGNING PLEADINGS, MOTIONS, AND OTHER PAPERS; REPRESENTATIONS TO THE COURT; SANCTIONS

"b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper—whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: * * * (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery;"

"(c) Sanctions.

(1) In General. If, after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation. Absent exceptional circumstances, a law firm must be held jointly responsible for a violation committed by its partner, associate, or employee. * * * (4) Nature of a Sanction. A sanction imposed under this rule must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated. The sanction may include nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of part or all of the reasonable attorney's fees and other expenses directly resulting from the violation."

So, is the attorney going to stick his neck out on this one, like this, which the judge so easily could find the attorney to be subject to sanctions as to issue a crushing penalty? No way, unless the attorney had some truth beyond just what the client told the attorney, that is my guess.

But, if it is true, then how is Keenan alive, let alone how did the attorney survive long enough to file this thing? Man, I am puzzled about this, but thanks for opening up another fantastic can of worms!

Stay on top of this, share details here, and I will be happy to give you my $0.02 as things develop.

Dec 14, 2011 - 1:32am

Monthly MACD trying to cross

Monthly MACD trying to cross for the first time since 2009. Brutal waterfall coming?

CreditCrumbs ragandbone
Dec 14, 2011 - 1:37am

@ragandbone, Fossil Fuel

I agree on fossil fuel, and that peak cheap oil is here. I have taken two a geology course and learned how difficult it is to get oil in the form we use now. Expose it to Oxygen, oxidation happens and we don't get oil. Not having the right rock formation that traps fossil deposit also does not produce oil. Humans are very lucky to have found oil that took so long to make. Same with natural gas and to some extent coal.

Since you work in oil exploration, can you share your insights on what you see as the implications of peak cheap oil in the coming decade? One thing that seems to be a serious risk is oil producing nations hoard oil when oil becomes scarce, and the fact is more and more countries have nationalized their oil industry. So do you think we are at risk of a sudden plunge in access to oil imports?

vamoose1 Vince
Dec 14, 2011 - 1:38am


you said something good. not pro or anti silver , im pro me, those are wise words.

i spent 40 years in this business , not bragging, just a fact, i own most of my silver at 6, sorry but i do.

In my career i saw some trades, i even did some, and never in my 40 years have i seen s uch a setup as silver at 30 in 2011 dollars, and i will mention in passing that silver traded at 50 31 years ago in 1980, admittedly under duress. 31 years.

Thats 390 in 2012 dollars, having diluted the money supply 8 times in the intervening period.

In 1980 there were 11 billion ounces of above ground silver gathering dust in every central bank in the world, the main and virtually only customer was big yellow, eastman kodak. There is now no silver in in ANY BANK, and we now have 1000 industrial uses for silver rather than one.Its all gone.

Those 11 billion ounces of aboveground silver in 1980 have dwindled to one billion, down 92 percent, the annual deficit is about 300 million ounces annually meaning its gone in 36 months.

Wrong, there will be an industrial panic andhoarding within a year imho, the moment the market tightens they will move preemptively, companies like Boeing or Microsoft, or 50 thousand other manufacturers are not going to wait for it to get to zero, yhey will clean it up, crossing 50 will probably be the trigger. ,

. Silver is unrecoverable, maybe at 500 you could persuade some coolies with toothpicks to go into a landfill and pry 70 cents of silver out of every defunct cellphone they find among the tin cans, maybe, maybe not .Not this coolie.

Does Apple give a fuck if silver is 500, not really, they just add ten bucks to the price of the i pad.

Silver is triple digits. it might even be 4 digits.

But i respect your opinion, there is very little percentage in being the richest guy in the graveyard, and we forget that perhaps, so good luck.

Dec 14, 2011 - 1:43am
Dec 14, 2011 - 1:48am


PM Cameron has effectively announced to the world that the UK is not going to play any longer, and has taken it's ball and gone home. This is a MAJOR development, symbolically as well. This action truly marks the beginning of the end for the EU, at least as it was SUPPOSED to be. The Euro currency took a HUGE hit just today alone vs the US$, look at any currency chart, it is a swan dive! As the only real alternative currency to the US$, this development significantly strengthened the greenback, and we all know what happens to commodities when the dollar strengthens. This is why the metals are on the mat, pure and simple. With all of our political/budget problems, it is the ONLY reason why the dollar is catching a wave. Compared to that bald, toothless, 350 lbs, 4'8 girl in the room {the euro} the dollar is the best looking girl at the party right now {even if she looks like a crackwhore herself!}. This will pass in time, as the US is about to hit a wall, and something will have to give. Either there is a MASSIVE bailout of europe, or we go into a deflationary death spiral SOON, as simple as that. Right now, we need something to divert our attention away from all of this chaos. How about a BIG war. Not a little one, like Afghanistan, or even Iraq. We need WW3. The US,UK, India, Japan, South Korea and {get this one} VIETNAM, against China, Pakistan and North Korea. Once that gets going, throw in Israel and Iran. Could Iran count on as many allies as it could in the past, with all of the arab countries in complete disarray? Why would they give a shit about Shiites anyway? Got to hand it to the western intelligence agencies, they conducted these revolutionary operations about as good as it gets. It's all falling into view now. Once the tactical nukes get used {and they will for sure} there will be no stopping the theater nukes from being used. There goes half to 2/3 rds of the worlds population right there. Kind of solves ALLOT of their problems doesn't it? The deflation is done for them.

Louie Santa's Elf
Dec 14, 2011 - 2:10am

@ Santa's Elf- Enforceable Confiscation

Will give new meaning to the phrase, "Brother, can you spare a dime."

Grey/black markets are already here. How many of us pay our lawn care professional in cash? Ever had a contractor tell you, "OK the price is $11,000 if you pay cash or $17,000 if you write me a check." Ever make a purchase at a convenience store and notice that the person behind the counter figures the sale on a calculator, them makes change out of the open cash register drawer? Do you think that all of the illegal aliens in the US are being paid by check? Think the employers are withholding SS taxes? When they spend those earnings at an ethnic grocery store or flea market, do you think the merchants are paying state sales tax?

Correct- the report from Bosnia was that PMs were not used much. Guns and ammo as well as alcohol were the items to have.

Where to go if the US goes Mad Max is a good question. Can anyone name a country where they produce food, they have oil, beautiful beaches, awesome climate, and have pretty good doctors/hospitals?

Louie TheObsoleteMan
Dec 14, 2011 - 2:17am

@ TheObsoleteMan

I just don't understand this dance.

Available partners are the Euro (bald, toothless, 350 lbs, & 4'8)

The US Dollar (Crackwhore)

OR- .9999 FINE Canadian Maples & ASE. OK, so maybe you don't like the looks of the queen or the length of Lady Liberty's dress, but HOW is it even a contest?

Silvergunn TheObsoleteMan
Dec 14, 2011 - 2:21am


Are you spun out? Last I heard the UK is on the Pound, not the Euro! If I was them I would tell the Euro to pound sand also!!!

Maybe I am missing something and if that is true please correct me?

shaz silverbonz
Dec 14, 2011 - 2:23am

one who abides


Shaz YES laws work without "FORCED" Taxation

Submitted by silverbonz on December 13, 2011 - 8:39pm. funny i keep getting called a libertarian at work, rather just think of myself as a good citizen i suppose one who abides when i was younger i fancied myself anarchist also thought i would not make it to my 21st b-day with us and russia always ready to push that red button thanks for the links i will check em out P
Dec 14, 2011 - 2:28am


the UK == EE

they now isolated themselves further and the city will now pick at whats left of the english people

TheObsoleteMan Louie
Dec 14, 2011 - 2:43am


I was only referring to PAPER CURRENCIES. Gold/Silver are not currency, they are money. There is a difference.

vamoose1 redwood
Dec 14, 2011 - 2:47am


jesus christ i hope youre right. There has to be atransvaluation of values, and it better be these kids, these little lord fauntleroys are ponying up about 35 a year in these ivy league colleges, or, more to the point , their psychopath father at goldman is, and they kicked GS in the fucking teeth and ran them off, in the Ivy league? Wow, I was in uni in the late 60s, maybe not too dissimilar, and when things started to boil in about 66, we would get pissed (we wore a jacket and tie to university!!!) in our fraternity house and go out n mock the demonstrators.

Two years later i was in striped pants and a nehru jacket that had an uncomfortablre resemblance to a girls dress, with hair down to my ass, and we had joined them. 24 months. Thats all it took. They were on the side of right, and it crystallized , but privileged little ivy league kids? Running Goldman sachs off campus? Fuck is that great or what???

TheObsoleteMan Silvergunn
Dec 14, 2011 - 2:50am


Actually, the UK uses both the pound note AND the euro. They never went all in. Keeping the pound will buy them some time, but only a little. I never understood why the UK would ever want to join the EU, as the people, culture and traditions are completely different from the core zone of Europe. Funny what roughly 21 miles of water can do!

Dec 14, 2011 - 3:36am


"The obvious is obviously wrong". Joe Granville New york 1979 .

Joe got white hot, he owned the market from maybe 78 to liftoff in 82, and he came to Toronto and gave a lecture in the chi chi Imperial Room of the Royal York hotel, i swear 2000 brokers attended.Nor was it cheap, but this guy was zoning, it was scary he was so right. Mind you 3 years later he was playing piano in a strip joint in Fort lauderdale.

We sat expectantly for the great man, he hopped on stage , we got our notebooks out for the delivered wisdom, i was pretty young, pretty excited, this guy had made us money.

he dropped his pants immediately that he reached the dais. . wtf? Was he loaded, well, he was known to lift a few.

he was wearing these boxer shorts, covered in stock symbols, there is EK, thats Eastman kodak he informed us (we knew) , MMM triple , well thats Minnesota etc, N was International nickel, so we took a guided tour of his shorts, predominately dow stocks, Canadians, not the fastest, but it was kinda funny, he was tickling the ivories not long after sadly .

Then he pointed at his midsection, and it said,, HT, not a Dow stock, but one hell of a company, and he pointed and said, thats Hughes Tool. Indeed it was, he brought the house down still like him though, christ he was fun.And he was gracious enough not to show us the financials, thanks joe.

Leading me to 30 dollar silver. There are probably a wall of stops at 29.95, but its curiously stubborn.

That Kunta Kinte Blythe masters better get it and break it rather soon, or her tampon has competition.

hence the title of my post, the break is kinda obvious, and mybea she will, but thwarted shorts kick, and they kick violently, we will know by friday, or everyone will wonder wtf we are doing at 34. 50. on espere.

Dec 14, 2011 - 3:37am

My theory on the miners

The banksters have been going hammer and tongs by naked short selling on shares of miners.

My view is that they have not done this without prior thought.

With the TBTF banksters behind these sales, I would infer that when the collapse comes or thereabouts, the Governments concerned will nationalize all gold, silver, platinum and rare earth mines.

And not pay a darn cent out on these shares.

In my opinion it's safer to have the physical in our hands rather than a share of it in some deep hole which can get appropriated by the Government.

If you can trust the Government then you may believe in Santa Claus too.

shaz Velocity
Dec 14, 2011 - 3:44am


thanks for the reply

maybe ive just been conditioned

to think that all hell will break loose

if we dont pay em

werkin on finding that red pill in my medicine cabinet i am

still got alot to learn

ending up on a irs gestapo list right now might put me in that indefinite detention camp that is coming down the pike

so i dunno

but er cigs good?

i would prefer

sumthin more natural

and not in a package with additives

just a plain baggie



foxenburg TheObsoleteMan
Dec 14, 2011 - 3:47am

Obsolete Man

I don't wish to be argumentative but the UK does not in any way use Euros.

Dec 14, 2011 - 3:59am

JP Morgue

What a bunch of pussies at JP Morgue. They can't even get gold under $1,600 or silver under $30 even in the overnight market. Bring it on, I'm waiting for your big game without fear. Remember me? I was the newbie in 2008 that couldn't find an ounce of gold to purchase anywhere near the $875 paper price. There is no doubt in my mind that the BRIC nations are salivating at the thought of a $1,480 gold price.

The Green Manalishi foxenburg
Dec 14, 2011 - 4:57am
Dec 14, 2011 - 6:22am

Time for?

It's time for the 6 am beat down, what a surprise.


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