The Wisdom of Uncle Ted

Mon, Mar 5, 2012 - 4:51pm

As many of you know or suspect, I am a subscriber to Ted Butler's newsletter service. Simply put, "Uncle Ted" has forgotten more than I'll likely ever know about the silver market and I find his perspective to be quite valuable. He usually puts out two newsletters per week and, last Monday, after reading his "Weekly Review" of 2/25/12, I asked him for his permission to re-print it here, in its entirety. It's nothing unusual, earth-shattering or out-of-the-ordinary. It is, however, a discussion of many of the issues we commonly mention here and it serves as a fine example of the value of his service.

Before we get to it, I feel compelled to give you a chart update. Gold is looking much better from both a technical and an OI standpoint. Technically, you can see below that it appears to be bottoming. As importantly, the 3-day drop in total OI last week was astounding. For the period Wednesday-Friday, paper gold price fell by $78 or 4.36%. Over the same period, total gold OI fell by 33,000 contracts or 6.89%. Talk about shaking some gold leaves from the tree. Wow! Total gold OI has now retraced back to where it was on 2/17/12 when gold was trading around $1725. How's that for a round trip? Gold was in strong hands at that level three weeks ago and it is in increasingly strong hands again now. Watch first for a break UP above the diagonal pink line on the hourly chart. A decisive move back above 1725 will signal that the bottom for this constructed "event" is in.

Silver (which I still contend was the true object of the raid in the metals) does not yet look to have bottomed but it is very close, too. It begins picking up real strong support below 33.80 and it gets stronger as you move toward 33.50. Below 33.50 is like pressing down on a spring. Anyone looking to take a stab at a paper trade should watch these levels very closely. The silver OI picture is quite interesting, too. While silver declined Wed-Fri by $2.66 or 7.15%, total silver OI only declined by 3250 contracts or 2.81% and is back to where it was on 2/22/12 when price was around $34.25. I should also point out that silver lease rates are reversing sharply and heading higher. This is good news but it does not signal that we've reached a bottom...yet. During the September and December "events", lease rates bottomed about a week before price. Taken in tandem, these signs clearly point to us being very close to a tradable bottom.

OK, back to Uncle Ted. (By the way, in case you're wondering, he's not my uncle. I just like calling him that. Makes me think of Ted Nugent.) Reprinted below is the Weekly Review from 2/25/12. Please take time to ponder it, especially in light of the events which followed it last week.

February 25, 2012 - Weekly Review
posted: 2/25/2012

Weekly Review

After chopping in price for the past several weeks, gold and silver advanced strongly in the past week. Gold surged $50 (2.9%) for the week, while silver jumped $2.15 (6.5%). The gains put gold and silver at multi-month price highs. As a result of silver’s outperformance, the gold/silver ratio tightened in to almost 50 to 1, a drop of an impressive 2 points in the ratio for the week. The ratio also closed at a multi-month extreme favoring silver. Since the end of the year, gold is up $210 (13.4%), while silver is up $7.50 (27%).

As a reminder, gold ended up outperforming silver last year, despite silver having had largely outperformed during much of the year. Therefore, you don’t want to read too much into week-to-week or even yearly price changes. Since this is a weekly review, I try to report the week’s events as objectively as possible. Please look at these reports as a type of mile marker on a long and, hopefully, profitable journey. It’s no secret that I favor silver over gold for a wide variety of reasons, but one reason is not the recent price performance of each. I try to guard against getting too bullish as prices rise and too bearish as prices fall because that can lead to trouble. If anything, that’s a premise behind the Commitment of Traders Report (COT).

I’ll discuss the COT for this week momentarily, but first I would note that the multi-month price highs in gold and silver coincide with multi-month extremes in the COT readings of each. But coincidental is not the same as accidental. This is more causal than anything else. This is not a question of which came first, as in the chicken or the egg. This is a case that prices went higher in gold and silver primarily because of changes in the market structure on the COMEX as recorded in the COT reports. The speculators bought and the commercials (in reality, merely other speculators) sold. On a short to intermediate term basis, it is usual for this to be the case. Prices of these two world commodities (and others) are set largely due to the trading of paper contracts. It is when the commercials rig prices to induce the speculators to buy or sell that we cross into manipulation. We cross into manipulation most of the time.

Conditions in the silver wholesale physical market continue to appear tight. I keep waiting for the frantic turnover or movement of metal into and out from the COMEX-approved silver warehouses to abate, but it hasn’t happened. This turnover pattern, which started about a year ago, is still confined to silver and is not present in any of the other metals traded on the NYMEX/COMEX. I also have not been able to uncover a more plausible explanation for the high turnover than silver is in a tight, hand-to-mouth physical circumstance.

Likewise, heavy physical turnover came this past week to the big silver ETF, SLV. Into the beginning of week, around 4 million ounces of metal were withdrawn from the Trust. As I reported last week, it appeared that the withdrawal was not due to plain vanilla investor liquidation, as price and volume data did not support that at all. Instead, it looked like the silver was removed because it was needed more urgently somewhere else. This is also supportive of the tight physical conditions suggested by COMEX movement.

Now, over the past two days, almost 4 million ounces has been deposited into the Trust. This does look very much like plain vanilla investment demand, as silver prices were strong and volume in SLV was heavy. This does not detract from the tight physical premise. This recent inflow of metal into the Trust has come quicker than has usually been the case in the past. I can’t help but think that this is also supportive of my hope that BlackRock, the Trust’s sponsor, has pressured the manipulative short sellers of SLV shares. This will not be reflected in the about to be released short position report, as that report will cover the short position as of Feb 15 and won’t include the trading activity from this past week. I don’t want to get my hopes up too much, but it will be very encouraging if BlackRock has done what we petitioned them to do, as it will remove a manipulative tool from the crooks’ toolbox.

On the retail front, physical demand looks as weak as I had feared over the past few weeks. Sales of Silver Eagles from the US Mint are slow. Ironically, I have read several recent commentaries that suggest Silver Eagle sales are soaring. Go figure. It is important to remember that retail demand for silver is important to the price on a long term and cumulative basis, not in the short term. We need look no further than the recent strong price action versus weak retail demand for confirmation of that premise. If silver prices do remain strong, however, I would expect retail demand to improve. In any event, sales of Silver Eagles are still beating the stuffing out of sales of Gold Eagles, although I would much prefer that both were strong.

The changes in this week’s COT report for gold and silver were expected, in that the total net commercial short position rose in each, largely due to buying on Tuesday, the cut-off day. Gold prices surged $32 and silver jumped $1.20 that day, as volume also surged and speculators bought and the commercials (dark speculators) sold. While there was an increase in the total net commercial short position in both gold and silver, I had a somewhat different take away in each. First, I’ll cover gold.

The total commercial net short position in COMEX gold futures increased by 19,900 contracts, to 229,300 contracts. This is the highest level of commercial shorts since Sep 13. All three commercial categories appeared to participate proportionately in the short selling this week, as speculators bought. It appeared to be a cohesive and coordinated commercial arrangement, with it being hard not to use the term collusive. The big 4 sold an additional almost 8,000 contracts, with the big 5 thru 8 adding 3000 contracts short. The gold raptors added almost 9,000 contracts to their short position. All for one, one for all.

Since the price lows of late December, we have added $250 to the price of gold on a 65,000 contract increase in the net speculative long/commercial short position on the COMEX. This is the equivalent of 6.5 million oz of gold. While these are paper ounces, from a quantity perspective it dwarfs any verifiable change in ownership in physical ounces, such as in ETFs. Simply put – we went up $250 in gold because speculators bought and commercials sold 65,000 net contracts on the COMEX and the speculators were more aggressive. Where does that leave us and where do we go from here?

Back in December, it was easy to call for higher prices in gold and silver because of the very bullish COT set up and I hoped I had conveyed that at the time. There was little additional speculative selling that the commercials could rig at that time. Now, it is different. There is enough potential speculative selling in place that the commercials could arrange for prices to decline enough to trigger off that selling. Does that mean that the commercials will definitely rig prices lower now? No, not necessarily. But they could. The commercials could also be forced to buy back shorts in gold, as happened to them this past August amid soaring prices. My point is that it is different now than it was in late December, when it looked like a sure trip north in price. We may be headed much higher from here; it’s just that I can’t say that with certainty. I wish I could, but I can’t. I can tell you if we go down big in the relative near term, it will be because of the dirty rotten commercials rigging prices lower. But they may not be able to pull that off, so we have to be prepared for that as well. I wish I could uncover way of being in and out of the market at the same time, but don’t hold your breath. Let’s go on to silver.

The total commercial net short position in silver did increase, but perhaps not as much as I feared this week. The commercial position did increase by 1900 contracts to 39,200 contracts (196 million oz), the highest level of commercial shorts since Sep 20. What set silver apart from gold was in the composition of which commercials sold by category. The big 4 (read JPMorgan) did all the selling, accounting for 1800 of the 1900 contracts sold, with the big 5 thru 8 and the raptors basically doing nothing. Unlike in gold, there appeared to be no cohesion, coordination or collusion among the silver commercials; it was all the big 4 and deeper than that, I would say it was all JPMorgan. If it wasn’t JPMorgan doing all the short selling this week (as I contend) and some other entities in the big 4 conspired and colluded with JPM in the selling, so what? Instead of one silver manipulator, we have two or three. That’s a difference without a distinction.

What the data suggest in this week’s silver COT is that there was likely one seller, or at the most two or three. I ask you a simple question – what would have happened to the price of silver if that one seller hadn’t sold? The answer must be that the price would have been higher, although no one can ascertain the exact amount higher. If that one seller, who I label as JPMorgan, hadn’t sold, then other sellers would have had to come to market, as there must be a seller for every buyer. Those other sellers, were they to replace JPMorgan, would have clearly had demanded a higher price; otherwise they would have already sold instead of JPMorgan.

While I contend that JPMorgan has been instrumental in the silver manipulation for the past four years, I am now presenting specific evidence, by way of this week’s COT, that JPMorgan had manipulated the price during the reporting week. Let me fine-tune that – JPMorgan manipulated the price of silver on Tuesday, Feb 21 (in addition to JPM manipulating silver all along). When one market participant controls the price, at any time or all the time, that market is manipulated. That the CFTC refuses to see or act against this is disgraceful.

Since the price lows of late December, silver has climbed $9 on a 25,000 contract net change in the COMEX market structure. That’s the equivalent of 125 million ounces changing hands in two months; equal to the entire world mine production in that time. This is not trading volume, which is much larger and includes all the phony HFT trading that a computer can spit out. The 125 million ounces represent a genuine change in ownership. These are paper ounces, to be sure, but the scale of the change in ownership boggles the mind. The equivalent of every single ounce of silver taken from the earth’s crust every day for the past two months changed ownership on the COMEX. I would guess that the world’s real miners had little to do, maybe nothing, with the change of ownership of that silver on the COMEX. This was strictly one group of speculators changing ownership with another group of speculators (called commercials). This is not true price discovery as intended by commodity law.

Of the 125 million paper ounces of silver that changed hands and caused the price to climb more than $9, the data indicate that the 4 big shorts on the COMEX were responsible for approximately 53.5 million oz or 42% of the sell side. JPMorgan, alone, accounted for 45 million oz of that (9,000 contracts) according to my calculations. Let me ask you the same question I asked above, with a different numbers set. If JPMorgan had not sold 9,000 contracts or 45 million ounces of silver over the past 2 two months, or 36% of all the commercial silver sold during that time, what would a reasonable person conclude would have been the effect on price? The answer must be that prices would have been higher as the market searched out alternative sellers.

Not only does JPMorgan hold a disproportionate and manipulative share of the market (a concentrated position), it has now resorted to being the dominant, if not exclusive seller on any big up days. It’s hard to imagine a more manipulative set of circumstances. It’s equally hard to imagine how the regulators can’t see it or react to it. More on that in a moment.

So where does that leave us in silver from a price expectation perspective? As in gold, we are nowhere near the favorable COT set up that existed in late December. We could go down, we could go up. Both price possibilities have occurred in the past from similar COT readings. If we go down, it will be solely due to commercial rigging, same as always. But there are some very compelling factors pointing to higher silver prices, including the previously mentioned tight physical situation. In fact, the obvious and outrageous short position of JPMorgan has become so extreme that it could serve as the catalyst for a price explosion.

I received a thoughtful email from a long-term subscriber this week that I thought I would publish here and respond to publicly, as I suspect it mirrors the thoughts of many. Normally, I would edit out the complimentary comments as my personality profile is not given to praise (probably due to DNA and upbringing) and I would never think of publishing testimonials. But sometimes you lose the true flavor of others’ thoughts if you tinker with their words.

After reading your post today I felt I needed to email you. In today's post you make momentary mention of those who, like me, believe the manipulation is a govt. run operation. With all respect I can manage, I honestly do not understand how you cannot come to the same conclusion.
Don't get me wrong, I first and foremost thank you to the heavens for bringing the manipulation to my attention and potentially saving my financial life by this opportunity. If I ever meet you I will probably have to hug you!
But after being in and studying the market intensely for 10 years and watching all that has happened and following your writings for the same period, I cannot escape the conclusion that the paper metals markets are not markets at all, but tools used by the Fed, Banking Cartel and Government to manipulate perception and the physical price of metals. It is a game as old as the Fed itself - a partnership between the government and the banks. The govt looks the other way from the criminal activity in exchange for the value given to them by the perpetrators - in this case, control of the price of precious metals. Without this control of the metals market the fiat money system begins to break down much more rapidly in the eyes of the populace. That is not in the best interest of the banking cartel or the federal government. I don't know if it was you who used the term "financial terrorism" to describe the violent price takedowns in silver. In any case, it was highly effective terrorism. It has effectively kept the big money out of the silver market.
While I continue to enjoy reading your posts, I have absolutely no faith that any amount of contact of elected representatives will accomplish anything. The manipulation will not end as long as the current financial system is still intact. I believe we are getting very close to the next major collapse. It will be bittersweet to see silver finally break free while everything is falling to pieces around us. I hope we all can survive it.
Thank you again so much for all you have done for me and so many others. I hope you feel a great sense of accomplishment that you have helped so many.
With gratitude,

First, I can understand why Tim feels the way he does, as it is logical and based upon a fair reading of the facts. Certainly, it would be ironic for me to argue with him about the possible involvement of the US Government in the silver manipulation. After all, ego aside, I think I have done more to expose the silver manipulation than any other person. I don’t want to position myself against a premise that may come to be true. I’ve further admitted that government involvement is a very plausible explanation for motivation.

The article that Tim was responding to was The Highest Level Possible, in which I tried to describe the high level of the silver manipulation debate. One thing I left out was that one reason for the high level of the silver manipulation discussion was that I’ve always tried to be as professional as possible in its presentation. I’ll speculate, of course, but I do try to stick to the verifiable facts as much as I can. Almost by definition, that means leaving aside theories of the crime and possible motivations as those can never be verified. Guessing motivation is like trying to read someone’s mind. I was always afraid of bringing discredit to the manipulation premise by introducing theories which I couldn’t prove beyond a doubt.

That all said, Tim’s letter (and many like it over the years) really got me to thinking. As a result, I can say that not only is the government-orchestrated motivation plausible, it is one of only two plausible motivations behind this running scheme that come to my mind. I’m still much more inclined to believe that this is a manipulation motivated originally by greed on the part of JPMorgan and other commercial speculators, because that is what the sum total of my experience in this life points to. But if it isn’t that, then I am stuck with the government-orchestrated version.

The most troubling aspect to the government-motivated version is that it would mean that the government is participating in activities that are not only illegal, but activities that knowingly cause many citizens to suffer and lose money to benefit other citizens or corporations. The deliberate and manipulative sell-offs of May and late-September come to mind. This silver manipulation is criminal and, as such, should conclude with people going to jail. Maybe I’m an idealist, but if someone does go to jail, I would much prefer it be some greedy silver traders finally uncovered and not high-ranking government officials. I’m just thinking about the greater good of the country and our institutions.

At the very least, the increase in concentrated short selling in silver is not only manipulative, but it also raises the risk of disorderly market conditions because a much larger concentrated short position needs to be resolved that much more. I hope it is incompetence or bureaucratic indecision that is preventing the CFTC from addressing the clear danger of an increased concentrated short position in silver and not willful intent. In due course, this too shall be answered.

Ted Butler
February 25, 2012
Silver - $35.40
Gold - $1775

I encourage you to strongly consider subscribing to Ted's valuable service. A link to do so is posted below:

Thank you, Ted, for allowing me the opportunity to share this newsletter with the Turdites!


p.s. Just because I know that DPH will do it if I don't, here's a little of the original Uncle Ted for you:

Ted Nugent - Free For All

About the Author

turd [at] tfmetalsreport [dot] com ()


Dead Canary
Mar 5, 2012 - 6:48pm

Yea baby, we are the"Priests

Yea baby, we are the"Priests of the Temples of Syrinx,"

Mar 5, 2012 - 6:51pm

Po Li

At this point DPH I'll go with;

Mar 5, 2012 - 6:54pm

The wisdom of Jim Sinclair

Repost from last thread:

For those of you who value the insights of a very fine man, listen in to this Q&A. It's well worth the time.

Obviously, I'm in the camp that values what JS has to say. ;)

On currency-induced, cost-push inflation: Sinclair has been warning about this for a while now and sometimes makes it seem a bit mysterious. It's not. It just means that imported factors begin to increase in cost as the dollar loses value, people begin to notice the price increases and in order to stay ahead of this inflation, their inflation expectations begin to rise. Even if inflation is 6%, they believe that to stay ahead prices have to be increased by a higher amount, say 8%. Then the inflation just starts feeding on itself as the price hikes work their way through the economy, which in turn only make expectations go higher and higher and it becomes a vicious cycle. We saw this in the 70s when the US had inflation at over 14% after we went off the gold standard. Nothing mysterious about it. Of course, those who are able to raise their prices first usually end up being winners in this game. Those who can't raise prices early on, or can't raise their income, end up losing big time.

Mar 5, 2012 - 6:58pm

I may be Autumn Bendum

I am a better bull shitter than Summer Benson/Benton (spelled both ways above...ooops) and I promise to make commitments I can't keep.

-Autumn Bendum

Dead Canary
Mar 5, 2012 - 7:05pm

I just went to my local

I just went to my local precinct caucus. There where 10 from my precinct. Three were RP supporters. Yet we walked away with two of the the three delegate spots. The Mitt for brains and Santorum people where there to vote in the straw poll (useless) and fill out the questionnaires about what should be discussed at the state convention (which I have on good authority are ignored by the Rep party) The didn't even apply for the delegate spots. These meat heads didn't realize that DELEGATES are where the power is. Ignore the straw polls you are seeing in the Lame Stream Media. I think the Rethuglicans are in for a rude awaking at the state conventions. This might still get interesting.

Ron Paul 2012

Turdle GG
Mar 5, 2012 - 7:10pm

GLOBEX trading volume during Asian trading hours?

Was a time when gold and silver were volatile during Asian trading hours. Not so much anymore. Actually very boring. MF Global fallout?

Does anyone have something showing GLOBEX trading volumes during Asian hours?

ClinkinKY TF Metals Admin
Mar 5, 2012 - 7:13pm

@ admin

Yeah like I said Clinkin, you may not agree with all of his philosophies of life, but have to respect some of the basic things. I believe he endorsed Palin last time around.

Same goes for Kid Rock, who I respect for choosing to live in Michigan and actively help make a difference in Detroit, yet decided to support Romney too.

Just because I agree with someone's political views doesn't mean I like everything about him or her, and just because I disagree with someone's political views doesn't mean I dislike everything about him or her too.

Don't get me wrong. I totally agree with your point and I'll love me some Nuge till the day I die. I was just a little surprised that he "went this route".

Dead Canary
Mar 5, 2012 - 7:16pm

Sh*ts on

You are ON Autumn! Bitch fight after school.

Summer Benson

Mar 5, 2012 - 7:24pm

Big Thanks Master Turd..

..for the charts, advise and guidance

..and mucho respecto for Ted Nugent

"Wham, Bham, Sweet Putang"

..what a refreshing blast of wild heavy metal that was during my student days ;)

Mar 5, 2012 - 7:26pm


I think Ted Butler needs someone who explains SLV (and GLD) to him. They don't work like the typical unit trusts that issue and redeem units and purchase or sell metal accordingly.

Their size is rather adjusted by an arbitrage mechanism. An Authorized Participant (AP) can, at any time, deposit a basket worth of metal in the trust and receive newly issued shares. Or they can redeem a basket of shares and take out the metal (basket = 100000 shares for GLD and 50000 for SLV).

If someone shorts SLV, nobody has any dealings with the issuer or the trust. It is the same as shorting shares of Microsoft. Nobody who shorts MSFT shares needs to contact Microsoft and to ask them to create 'virtual supply' or something like that.

In order to short SLV, he needs to borrow the shares first and can then sell them into the market. Whoever buys these shares can get their hands on the silver and, for example, redeem them for physical silver. This does not mess with the title to the silver in any way because the lender who lent shares to the short seller no longer has any shares. What he has is only a claim on the short seller who may or may not be able to return the shares. The lender knows that lending something does involve counterparty risk. Nobody else has any counterparty risk here.

Finally, what does creation and redemption of GLD and SLV shares tell us?

If the SLV inventory shrinks, this indicates that there is more buying pressure in the OTC market for silver than in SLV or, conversely, more selling pressure in SLV than in the OTC market. If SLV inventory grows, this indicates that there is more buying pressure in SLV than in the OTC market or, conversely, more selling pressure in the OTC market than in SLV.

How can you use this information? Well, if the OTC market is the strong hands and SLV the weak ones, then shrinking inventory should precede a price increase. This is because the OTC market is already buying while the retail investors in SLV are still selling.

PS: This is the true reason why SLV and GLD have been introduced. It gives the banks a reasonably good chance of getting their hands on physical gold and silver should they ever need it desperately.


Mar 5, 2012 - 7:29pm

Re: Breitbart and Bridges-"natural causes"

Did I ever mention how much I admire Barack Obama and would never think of saying anything bad about him?

Mar 5, 2012 - 7:32pm

Congresional hearings...

This CFTC hearing/investigation has gone nowhere, cant the names in PM's get Ron Paul to get a congressional hearing going. Today AU down 7 bucks .oo4%...PM stocks meanwhile down 2-5%...the Hedge funds, MM are getting a free pass lets get congress involved...

Turdle GG
Mar 5, 2012 - 7:42pm


Yes, I have tried to explain the stock lending situation to Ted Butler (in a series of e-mails), but he doesn't see it, or doesn't want to see it. He believes that new shares are "created" when a share of SLV is shorted.

The Green Manalishi
Mar 5, 2012 - 7:54pm

The Spanish rebellion has begun, sooner and more dramatically th

The Spanish rebellion has begun, sooner and more dramatically than I expected.

Nobody expects the Spanish Rebellion:

The Spanish Inquisition
Mar 5, 2012 - 8:03pm

You know I'm talkin about..

I remember seeing this madman one summer back in 1980..,

I think I was on something too..,

Ted Nugent - Wango Tango
waxybilldupp TF
Mar 5, 2012 - 8:23pm


I'm honored, Turd, that my brain dump would garner a response from the Mayor of Turdville. Your point is certainly on the mark. I take it to mean that to dollar will go the way of all fiat, "a track record unmarred by success." I agree; I get that.

My stress, however, derives from the daily onslaught to "information" strongly suggesting that at any moment, it will be, quite literally, be TEOTWAWKI. That everything we have come to understand about our lives will be altered in a matter of hours or days. Is that possible? Of course, but I'm having a real hard time seeing it as a result of the "routine" course we are on. My feeling, my argument, is that the big, huge, really extraordinary change many are expecting is going to happen, is already happening in small increments. Even fiat currency devaluation will probably climb the porch and sneak in thru a bedroom window rather than come crashing thru the front door. I've arrived at the point where I just don't believe the drama of an earthquake changing the landscape, and instead, see a decade of erosion by constant 20 -30 MPH winds. This is going to play out for a shockingly long time. JMHO.

Maybe I'm just fooling myself but I'm already seeing a difference. Started planning a trip to Lake Michigan in August for king salmon. Wheels are turning on a trip to Napa Valley next spring. No illusions of rainbows and unicorns, but the world isn't going completely in the crapper by then either.

Hold over
Mar 5, 2012 - 8:29pm

There is unrest in the

There is unrest in the forest,
There is trouble with the trees,
For the maples want more sunlight
And the oaks ignore their pleas.

The trouble with the maples,
(And they're quite convinced they're right)
They say the oaks are just too lofty
And they grab up all the light.
But the oaks can't help their feelings
If they like the way they're made.
And they wonder why the maples
Can't be happy in their shade.

There is trouble in the forest,
And the creatures all have fled,
As the maples scream "Oppression!"
And the oaks just shake their heads

So the maples formed a union
And demanded equal rights.
"The oaks are just too greedy;
We will make them give us light."
Now there's no more oak oppression,
For they passed a noble law,
And the trees are all kept equal
By hatchet, axe, and saw.


Mar 5, 2012 - 8:42pm


Getsures of ancient scrolls that accentuate the duality of the meaning behind them in ancient times and currently.

I'm not saying it has anything to do with might happen shortly, but the almost ritual exchange of goods between heads of state while discussing in-depth strategies about a common foe isn't lost on me. The meaning of the scrolls and the giving of them (albeit copies I assume) to another Chief from another more powerful tribe, while ramping up the rhetoric is high drama and importantly symbolic at this point.

Man and woman are far more primitive then we'd like to think imho. When some things get primal they aren't far away from being tribal in nature. Picture the ceremonies that went on long ago during man-kinds history that had all kinds of ritual symbolism behind them prior to war time. Primal stuff. Face painting and flag rallies etc. Documents and pacts and scrolls.

I'm not saying this is some monumental thing and it signifies any pact or hand shake agreement or what have you. What I'm saying is this...they had a choice to either do this publicly or privately and they chose to do it very publicly and make a statement so that the symbolism wouldn't or couldn't be lost on anyone who was paying attention. Especially Iran, Syria, Russia etc.

They could have chosen not to, but they did so for a reason.

Netanyahu Gave Obama Purim Scroll on Ancient Persian Plot
Turdle GG
Mar 5, 2012 - 8:47pm

Turdle: I asked Ted about

Turdle: I asked Ted about this when we did a podcast. His main thesis is that, by shorting, one creates two beneficial owners of the same shares. Guy A owns 100 SLV Bank A borrows GuyA's shares and sells them short to: Guy B who now also is long the same 100 shares that Guy A is long. So, now, what happens if both A and B move to redeem the shares? Must Bank A come up with the 100 ounces of silver at that time? If Bank A is only subject to supplying the metal if and when a redemption is requested, the effect is similar to the naked shorting of a Comex contract where the seller (bank) is never forced to deliver, either. You see, I think he has a point. Borrowing and shorting MSFT is not the same as borrowing and shorting an ETF which purports to have a 100% physical backing.

Mar 5, 2012 - 8:50pm

And what of Lebanon's gold...

It would seem to me that in an area of the world that might become highly unstable that Lebanon has an awful lot of gold in a country with a war torn past. I wonder if they actually have that much gold or how much longer they might retain it?

Rank Country Gold(tonnes)

1. United States 10,792.6
2. Germany 3,401.8
3. Italy 2,451.8
4. France 2,435.4
5. China 1,054.1
6. Switzerland 1,040.1
7. Russia 775.2
8. Japan 765.2
9. Netherlands 612.5
10. India 557.7
11. Taiwan 423.6
12. Portugal 382.5
13. Venezuela 363.9
14. Saudi Arabia 322.9
15. United Kingdom 310.3
16. Lebanon 286.8
17. Spain 281.6
18. Austria 280.0
19. Belgium 227.5
20. Philippines 175.9

Mar 5, 2012 - 9:03pm

(Very) Fuzzy

Math if ya ask me. Someone's been smokin' something. Can we atleast keep it real?

Carry on Comrades

Turdle GG
Mar 5, 2012 - 9:08pm


Guy A is not "lending" those shares to Bank A. He is transferring legal title to Bank A. Check the stock lending agreement. This is a common cause of confusion, because the word "lend" is always used, but in reality it's a transfer of title, with a promise by the "borrower" that he will return shares to the "lender" when the "lender" so demands.

So when Bank A sells those shares to Guy B, they are now owned by Guy B. Two shares have not been created. There are still the same number of shares overall that there was at the start.

Bank A can't redeem shares, because he doesn't own any; he sold them to Guy B. The only person who can redeem for metal is Guy B.

If Guy A wants to redeem, he asks Bank A to gives shares back to him. For Bank A to do so, it has to go into the market and buy some shares and transfer them to Guy A.

The above refers to covered shorts. The situation is different with naked shorting.

Mar 5, 2012 - 9:31pm

Greek Week Starts Thursday

Ok everyone get your Olive Racing Arses Ready !!

Will Greece Formally Default on Thursday March 5, 2012 • 12:42AM

Moody's downgraded Greece to its lowest level on March 2, because it expects the much ballyhooed "haircut" negotiations to end in a default this coming week. Thursday, March 8, is the deadline for Greece to announce what percentage of its bondholders have "voluntarily" agreed to the terms of their haircut. If it doesn't reach 95%, which it almost certainly will not, then Greece will invoke the so-called Collective Action Clause (CAC) of the deal, which imposes the "haircut" on everyone, like it or not. That in turn will lead the International Swaps and Derivatives Association (ISDA) to declare the whole proceeding to be a "credit event," i.e., a default, and thus activate untold billions in credit default swaps.

Video unavailable
Mar 5, 2012 - 9:50pm

Has anyone seen this?

I heard NBC news tonight while eating dinner and this pretty much killed my appetite.

Mar 5, 2012 - 10:20pm
Mar 5, 2012 - 10:33pm

Maybe a guy named Ezra

Maybe a guy named Ezra Levant could be a source for some additional Obamy angst, its definitely feeling like the republic is standing on pins and needles.

Mar 5, 2012 - 10:43pm


Maybe it'll hit the Bernanke, ..........hey, a guy can dream

victorthecleaner ¤
Mar 5, 2012 - 10:50pm

how much official gold in US?


can I ask you where you got the figure of more than 10000 metric tons for the US?


exiledbear TF
Mar 5, 2012 - 10:58pm

They're not, not really

U.S. Government debt: $15.6T and growing by 10% ($1.5T) per annum

U.S Total GDP: $15.2T and growing by 2% per annum.

The only solution: Fiat currency devaluation

Keep in mind that anything expressed as a percentage over time is exponential growth. That's what will make the hilarity ensue eventually. At some point things start doubling at silly rates, like every week or every day or every hour or every minute. Read your hyperinflation histories - they're all very similar to each other, pick one and start reading.

However, there is an initial linear phase of any exponential curve. Physicists use that trick to do all sorts of manipulation of what would be nonlinear equations. Remember the choice between getting $100 a day or getting a penny that doubled every day? I hope you picked the penny that doubled, but for a while you will look stupid, because for the first few weeks, your pile will grow linearly until the higher order terms kick in.

Where are we on things? Right on the edge of the linear region heading into the nonlinear region. It's why they're having trouble managing the price of gold these days and why we get these psycho spikes that come out of nowhere.

Mar 5, 2012 - 11:00pm


I'll try and backtrack and provide it. It looked high to me also.

I thought we were supposedly in the 8,000+ range.

I think it was a wiki link. Figures that it might be off.


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