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 ()


Dec 14, 2011 - 11:37am


maybe 1550..... depends on the chart.

if i see it rolling back up or it bull hammers for sure.

catching falling knives is tough work even if u can get it

Dec 14, 2011 - 11:41am

Anyone got a chart ...

...where one can see the relation between the silver spot price and the live price for e.g. a silver eagle from a coin dealer.

Or the same for the relation between the silver spot price and the premium for a bullion.

Would be interesting to see how that behaves on these violent price moves at the moment.

Any links would be much appreciated :-)

TheObsoleteMan foxenburg
Dec 14, 2011 - 12:33pm


They might not be OFFICIALLY on the euro, but when I was in the UK , the Euros I had from the continent were accepted almost everywhere I went. It was my understanding that it was at the discretion of the vendor whether to accept them or not. It was not my intention to confuse anyone, if i did, I am sorry.

Vince Boardwalk
Dec 14, 2011 - 2:12pm

@pforth and Boardwalk


You do not know the power of the short side. Join me, and we can rule this market as father and sons/daughters. Blythe Masters has foreseen this.

Dec 14, 2011 - 3:00pm


double bottom or more downside?

i see no news coming to give it- up

ben has talked n so has merkozy.

EE could short it somemore down.


vamoose1 sixdollarsilver
Dec 14, 2011 - 3:29pm

@six dollar silver

Thats very nice, thank you. Jesus what the fuck is going on. This is a serious character builder.

Dec 14, 2011 - 4:48pm


Do you believe that the CME is intact or is the market mechanism irreparably damaged?

vamoose1 austrian12874
Dec 14, 2011 - 5:07pm


we all do, this is unnerving , its intended to unnerve us. Consider the following numbers.And chill, we are going to eviscerate these thieves.

Ok.... silver traded at 50 in 1980, and this number has to be adjusted for the evaporation in the currency in the ensuing 31 years. Its 8 times, thats what happened to your buying power in constant dollars.

So thr real silver high, is 390 dollars. Its currently 29.

Its at 7 percent of its inflation adjusted 1980 high. 7 fucking percent at 30.

How much above ground silver was there in 1980, the answer is 11 billion ounces. How much is there now? 1 billion, down 92 percent in 31 years.

Where did it fucking go? Landfills, cellphones, and rather than Eastman kodak as the only user, it now has over 1000 industrial applications , even fucking bandaids.

So we will go recover it, in the landfills with a fucking toothpick. We will kick away the tin cans and recover it. No you wont, maybe its economic to put some coolies in the worlds garbge heaps, perhaps at a bout 500, since there is only 78 cents of silver in each obsolete cellphone in the garbage heap.

A billion ounces are left, and the annual deficit in supply is 300 million ounces.

lets do some grade 3 arithmetic, that means its all gone in 36 months. Wrong.No more than 12 months.

The market is inexorably tightening, Apple computer needs silver so they will jump the line, so will Boeing, so will Microsoft, THERE IS NO FUCKING SILVER ON THIS PRECIOUS PLANET there will be an industrial panic in 2012.

There is no intelligent number for silver, if its at 500 , then Apple adds ten bucks to its i pads. Big fucking deal. The amounts per Ipad are microscopic.

This is the trade of the century, if they want to fuck with it, blow me you bluffers.

vamoose1 Strongsidejedi
Dec 14, 2011 - 5:37pm

strongside jedi

flattered thanks.

The authority on this is ann barnhardt, who immediately closed her commodity company, and wrote a blistering letter, the likes of which i have not seen in my sixty odd years, odd emphasized.

This woman is only 35, she is beautiful but its about the fucking brains and the morals. is she wound a bit tight? yeah she is. She said fuck this. Its patently dishonest, i cease to participate, its menacingly clients come first. Farmers, cattlemen , solid people, hundreds of thousands of whom are completely fucked, their money stolen.

How else do you think they can smash gold for 200 and silver for 8. THERE IS NO COMPREHENSIVE BUY SIDE AT COMEX.

You would have to be out of your fucking cotton picking mind to even tickle it.

Would EE take advantage of an absent buy side? Does a bear shit in the woods?

Dec 14, 2011 - 5:46pm

Computer Virus

There is one place on this beautiful planet where you categorically do not fuck around, and its Rasputins Russia. You simply do not fuck aroun d there, or you get introduced to Boris in the basement of the Kremlin.he has pliers.

If anyone ever wondered about the power of the internet, well, look no further, they are marching in Moscow. Good God Almighty.

Strongsidejedi vamoose1
Dec 14, 2011 - 6:25pm

Multi Year spot gold price

I noticed TF posted Dan Norcini's analysis of the daily gold price movement over the past few months.

I would like to post this graph of the gold price movement over several years.

If my graph is correct, we are touching bottom this week.

I attempted to draw lines at the relative intermediate highs and lows.

If my low-line is right, we should see horizontal price action from here for the next few weeks.

Vince Astro_Phyz
Dec 14, 2011 - 7:56pm

@Astro_Phyz RE: Who would trade anything, especially silver, for

Who would trade anything, especially silver, for Euros

Here is an example of what is going on in Europe. In this case Euros are not involved, but they are involved in many loans. In this article, the borrower knew they had a choice of currencies, but if the Eurozone cracks up, there will be a brand new currency risk, just like in this artice, but in loans where it didn't exist before. If your loan is in Euros, then Euros are more valuable to you than silver or gold.


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