Here Comes Turd, Hat In Hand

346
Wed, Apr 18, 2012 - 10:27am

I must be a glutton for punishment.

In order to give all the Turdhaters some additional ammunition, I come to you today with another request for funding. The site needs improvements to keep it from crashing so often but the bills have stacked high while "revenue enhancement" plans have taken longer than expected to implement. Therefore, I need some help. More on that in a minute. First, the charts.

Longtime Turdites will recall how much of what I do is based upon "feel" and pattern recognition. When fighting within wholly-manipulated markets, these two traits allow you to survive. However, man does not exist on "feel" alone. Fundamentals such as simple supply/demand, the changes to Open Interest, the bullishness/bearishness of the CoT etc, all must be taken into consideration, as well. And currently, the fundos look great so why am I so uneasy?

Do you recall this chart from 3/28?

The crude fundos were, and continue to be, very strong. Very few doubt that crude will continue higher long-term based upon dollar devaluation and geo-political risk. However, a clear "line in the sand" had been drawn at 104.50-105.00 and all sorts of sell stops had been placed below that line. Then, even though the global crude oil market is enormous and dwarfs the gold and silver markets, the stops got "gunned". Here's the chart from two days later:

How did this happen? Was it manipulation? In this case, no. The crude oil market is too large and diverse to be openly manipulated like gold and silver. What happened was that a delicate balance of buyers and sellers was broken when buyers temporarily stepped away. With more sellers than buyers left in the arena, down went price, through 104.50. The sell stops were then triggered and price fell very sharply to $102. Though it has since recovered and even traded back above $105 yesterday, that fact is small consolation to those who got their guts ripped out on 3/30.

OK, so what's the point, you ask? I fear that we are in the verge of a similar event in the metals, particularly silver.

As discussed here extensively, interest and activity on the Comex is waning. Post-MFG, the primary participants left are the Cartel monkeys and the HFT WOPRs. There are times when they balance each other out but, since the WOPRs are mainly programmed to follow technicals, and, since the current technicals aren't overly friendly, we end up with an unbalanced paper market where sellers outnumber buyers. The balance to this is the physical demand we continue to see in London and other venues. Simply put, paper price declines to the point where physical demand appears, which forces paper price back up. A sort of equilibrium and the primary reason why gold and silver have been mostly rangebound for the past month.

My concern is this: If you were one of these sovereign or big money buyers in London, why wouldn't you simply step back for a few days and see just how low the Cartels are willing to push? Seriously, why the heck wouldn't you? You might be content to "scale in" with your purchases for a while but if the stupid, arrogant Western bankers are willing to jam paper price lower for you, why not let them? And, like the crude market of late March, all it will take is a day or two of no big physical buying and paper price will tank. You, the big buyer, then can come back in a week later or so and buy a whole bunch of physical at a steeply discounted price.

Now, look at the charts below for silver. Do they not resemble the crude charts for late March? There's a clear point where buyers have continually emerged around $31 to $31.35. Even if I were a "resolute long", prudence would demand that I have at least a few stops right under $31 because if $31 were to fail, silver is headed to $30 or perhaps even a little lower.

As you know, silver and gold are about 95% correlated so let's just say the scenario described above plays out. The big money buyers in London take a few days off and gold falls down through $1635 and toward $1615. What do you think would happen to silver? It would be 30 and change in a heartbeat! In the end, I'm not saying that silver is going to collapse within the next hour. I'm simply warning you that, like crude in late March, this type of event is possible. On the bright side, like crude, silver will base and quickly recover. Like crude, the fundamentals are too strong to keep it down for long and any drop toward $30 in silver would be an excellent opportunity to BTFD.

OK, back to the problem at hand with the site. I'm sure that most of you have noticed that the site has a tendency to lock up and crash during traffic spikes. I've had the Tech Team looking into it and they've concluded that it's primarily due to all the fancy, little fun stuff that I wanted built into it...the HatTips, the titles for each member like Muckman and Stomachlobber, even the liberty to post and store any video or picture you wish to post slows down the site. Most of the time, everything is fine but, when hundreds of folks try to refresh pages at once, the resulting traffic "bottleneck" is giving us fits. The good news is that this can be fixed. The bad news is that it will cost me a few bucks to do it.

So, I must ask you to consider helping out. The idea behind the subscription component of the site was to generate consistent monthly revenue. I had planned for the monthly fee to be under $5. Please ask yourself if this is reasonable. Do you get 17 cents per day worth of enjoyment, camraderie and knowledge from the site. If so, please consider enrolling for an ongoing donation. By clicking the "Feed The Turd" button to the right, you'll be directed to a PayPal screen where you can donate once or set yourself up for an ongoing, $5/month (or more) donation. Even simple, one-time donations can make a big difference. If the 25,000 or so individuals who visit this site daily all donated just a dollar, we'd be cooking. Anyway...as anyone who has donated in the past knows, each and every contribution is valued and important to me. I don't take this responsibility lightly and I don't take you for granted. However, the site is running on fumes financially so I feel I must make this request. Thank you for your consideration.

Hopefully, sometime soon, site revenues will increase. Once we are turning a profit, I still hope to schedule Turdapalooza, complete with open bar. Maybe that's just a silly dream but I hope not. The image in my head of 1000 big yellow hats "protesting" in front of 33 Liberty Street is too compelling to ignore.

Thank you all for your support, financial and otherwise. Keep the faith and keep stacking. TF

About the Author

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

  346 Comments

Odin
Apr 18, 2012 - 10:32am

Thurd

Just gotta hold out a little longer...

achmachat
Apr 18, 2012 - 10:39am

sounds like a fun

sounds like a fun time!

hey... at least we'll have fun together!


Apr 18, 2012 - 10:40am

I meant to include this

Someone posted this to the previous thread. Interesting.

https://www.321gold.com/editorials/moriarty/moriarty041712.html

ClinkinKY
Apr 18, 2012 - 10:42am

Donate

Done.

Strongsidejedi
Apr 18, 2012 - 10:43am

TF - Thank you

Thanks for all your work.

The "extras" on the website are what separate your website from the others.

As I have stated before, opening a PM trading store which would set physical price is the way to go.

Ircsum
Apr 18, 2012 - 10:43am

2th?

Yep, 2th (or tooth)......moving up steadily, a definite sign of a misspent youth.

Turd - as your weighting in the TITS Index is similar to AAPL in the Nasdaq, I reckon the index is scraping along the bottom right now, so maybe we're due to move up real soon? Much thanks for your latest offering.

cliff 567
Apr 18, 2012 - 10:43am

yes

1

ps,

I fed the turd.

achmachat
Apr 18, 2012 - 10:45am

to remind us all how easy it is...

presenting:

the Silver-Keiser Crash Banksters Baby!

EBR Mod 0
Apr 18, 2012 - 10:46am

site funds

Turd;

I have no problem sending you funds to help cover the site. BUT because of Paypals anti-gun positions, I will not use that mechanism. I do understand you need to have secure funds, so If you want to contact me by email, and provide me with a snail mail address or tell me how to, I'll get you a MO out. I hope you will understand my lack of support for Paypal but I will not support any firm that is not 100% constitutionally 2nd Amendment based.

Stickin' to my guns

thank you for your work.

tanjr364
Apr 18, 2012 - 10:48am

My 2cents worth

Dear Turd and Turdites, I have been thinking of the GSR which is at 52 at the moment. There was a gap at 54 to 52 when we bottomed and started moving up in Dec. If we were to fill the gap and retest 54 the possibilities are Ag to Au 31 to 1674 30.5 to 1647 30 to 1620 So on and so forth With FOMC and silver OPEX next week, I suspect we'll get to fill that gap in the GSR with silver at 30 and gold at 1620. Is there any merit to this prognostication?

iceman321_2k2
Apr 18, 2012 - 10:49am

Are Taxi Drivers Buying Gold or Apple?

"Despite being called a bubble numerous times in the past few years, very few respondents picked the gold coin. In fact, only one man chose the gold coin and when asked why, he responded, “because gold’s going to $3,000.” The one share of Apple or the iPad 2 was the more popular choice. This simple yet eye-opening segment portrays the typical investment mindset in America. After an 11-year bull market run, the average Joe is still unaware of the benefits that gold offers. To call gold a bubble is not only short-sided, but wrong."

https://wallstcheatsheet.com/investing/are-taxi-drivers-buying-gold-or-apple.html/

SaratogaPrepper
Apr 18, 2012 - 10:49am

No idea where 33 Liberty St

I have no idea where 33 Liberty St is, but I ain't missing 1000 Big Yellow Hats fer nuttin'! Heading to "Feed The Turd" right now. I have 6 weeks of vacation to blow looking for that address.

Edit : Done! Monthly Level 1. One less mochafrappachocabellyexpandingchino a month.

Irksome EBR Mod 0
Apr 18, 2012 - 10:52am

@EBR Mod o - snail mail address

Click on the Feed The Turd 'Donate' button, and you will find instructions for snail mail donations.

I tossed a few non-2nd-ammendment-supporting electronic dollars your way, Turd.

Excalibur
Apr 18, 2012 - 10:54am

Donation done

Turd, glad you feel you can just ask when you need it.

Strongsidejedi
Apr 18, 2012 - 10:56am

Russian gold selling

Guys,

Do not forget to check in on the forum thread that we started on reports that the Russians were selling Gold.

My geopolitical view is that India is using Russian gold to trade for Iranian crude.

It's a three part deal.

Russia and India trade, Russia and China trade. Russia is willing to part with some of its massive gold reserve in return for Rupees and Yuan.

Russia trades with Iran - frankly, I don't know what Iran gives Russia in exchange for Russian gold, but they can certainly receive Rupees/Yuan and gold in return for delivery of crude oil to other destinations of Russia's selection.

Iran gets to separate a substantial amount of crude oil sales from international markets denominated in USD's.

India gets its crude oil delivery.

The only way to affirm or test this theory is to send a reporter to the Indian harbors and oil refiners to see what is being delivered and where it is coming from.

If this theory is right, then the Russians are selling gold and silver and this is the reason the price is going down during European hours.

redwings103149
Apr 18, 2012 - 10:56am

Crude Fundis

Turd,

I will have to completely disagree on the crude fundamentals on this one. A. China is Slowing B. Europe is going into a recession C. Gasoline Demand down 4% ytd D. Election Year and Obama cant afford $4 gas E. The "news" on Israel/Iran is starting to lull for the time being as the Israeli's wait till post election to do anything

Crude has failed to breakout and using gap theory we could test as low as 80-85 easily which would drag down metals as well. Also, even though the inflation #s are questionable at best it has declined for 6 straight months from 3.85 to 2.65. This means the velocity of money is starting to seize hence why libor is starting to creep up. That spells liquidity problems and comms will be subject to a hard hit as this mini 2-3month cycle hits probably starting today.

-JP

The8thHabit
Apr 18, 2012 - 10:56am

Great article by Rick Rule

Thank you Turd! For all Turdites, I found this great article by Rick Rule on sprott.com this morning.

https://www.sprott.com/news-centre/why-i%27m-excited-about-this-market/

redwings103149
Apr 18, 2012 - 10:56am

Crude Fundis

Turd,

I will have to completely disagree on the crude fundamentals on this one. A. China is Slowing B. Europe is going into a recession C. Gasoline Demand down 4% ytd D. Election Year and Obama cant afford $4 gas E. The "news" on Israel/Iran is starting to lull for the time being as the Israeli's wait till post election to do anything

Crude has failed to breakout and using gap theory we could test as low as 80-85 easily which would drag down metals as well. Also, even though the inflation #s are questionable at best it has declined for 6 straight months from 3.85 to 2.65. This means the velocity of money is starting to seize hence why libor is starting to creep up. That spells liquidity problems and comms will be subject to a hard hit as this mini 2-3month cycle hits probably starting today.

-JP

Number 47
Apr 18, 2012 - 10:58am

Threw a few euros your way.

While they are still good for something.

Small donation but I'll be making it regular.

redwings103149
Apr 18, 2012 - 10:59am

Gold

Turd,

I would also ask you to look at the unexpected rate decrease by the Indians. A lower rupee does not bode well for gold in the short term as a quick comparison chart shows the striking correlation. Again it will be a buying opportunity, but I think you are having a hard time using a dynamic analysis of the metals. Its not always about manipulation. The short term moves sure, but there are a lot of moving pieces that you are oversimplifying.

Vypuero
Apr 18, 2012 - 10:59am

subscribed - hope it helps

keep up the good work

miscreanity
Apr 18, 2012 - 11:10am

Paypal is as bad as the Cartel!

Accept donations in Bitcoins. All you need is a wallet and a QR code on the page - transaction fees are <1% if any (most of the time there's no fee). Bitcoins can be withdrawn via Dwolla (only $0.25 per transaction fee).

https://www.weusecoins.com/

https://en.bitcoin.it/wiki/Myths

Set up a wallet at an exchange or community-friendly service just to get started - you can always manage your own wallet (like having physical gold in hand) later.

https://mtgox.com/

https://blockchain.info/wallet/

Then create a QR code to be displayed on the site (above Paypal!) using a key from your wallet.

https://qr.ma.eatgold.com/

Do it.

50sQuiff Strongsidejedi
Apr 18, 2012 - 11:10am

Russian gold selling

@Strongsidejedi, The latest small-scale Russian CB gold sale was almost certainly to its own mint for internal consumption. The analysts who trumpeted this story as a signal of Russia's newfound "tactical approach to the gold market" are laughable as far as I'm concerned.

AugmentedFourth
Apr 18, 2012 - 11:15am

Bitcoin

I second the idea of accepting Bitcoin.

Marblesonac
Apr 18, 2012 - 11:20am

fed

Just used paypal to feed the turd.

Every company has the right to their thoughts on guns, as long as they don't infringe upon my rights...

I donated to Turd because I like the content that members post here. I would hate to lose this resource because I didn't make a small contribution.

Fulgurite
Apr 18, 2012 - 11:23am

EE selling versus sovereign buying

My concern is this: If you were one of these sovereign or big money buyers in London, why wouldn't you simply step back for a few days and see just how low the Cartels are willing to push? Seriously, why the heck wouldn't you?

Hi Turd, this was the point I was trying to make yesterday in my post, but perhaps it got lost in the usual clutter of "first," gun nut and YouTube music video posts...

Loud Noises
Apr 18, 2012 - 11:23am

Budget is tight, but I can

Budget is tight, but I can certainly send a $5 Footlong or two your way.

Anyone ever think about the fact that a few years down the road, we'll be seeing ads for $20 Footlongs at Subway and think its a great deal? Keep on stackin'.

SRSrocco
Apr 18, 2012 - 11:24am

FRESNILLO SILVER PRODUCTION DROPS 21%

FRESNILLO SILVER PRODUCTION DECLINES 21% FIRST QUARTER 2012

Fresnillo mine production (largest primary silver mine in the world)

1Q 12

1Q 11

% change

4Q 11

Silver (kOz)

6,748

8,532

-20.9

7,014

Gold (Oz)

8,731

6,134

42.3

7,678

Lead (t)

4,277

3,365

27.1

3,475

Zinc (t)

4,125

3,221

28.1

3,076

There have been some interesting things happening in the silver mining industry. I had planned to release my article CRITICAL FACTORS THAT WILL IMPACT SILVER already this week, but I came across some snafus that have made me postpone it until next week.

First of all, Peru has announced their 2011 silver production (down 6.5%) from last year as well as their first quarter 2012 production. I still have not seen anything on Mexico's 2011 total silver production and I have combed the internet.

Secondly, GFMS will come out with their 2012 World Silver Survey tomorow which will announce the top 20 silver countries, company producers and top primary mines. It has taken several email exchanges, but I finally know who was the largest silver producing country in the world in 2011. It was KGHM POLSKA MIEDZ.... a Polish copper mining company. They beat out BHP Billiton by just a few 100,000 ounces. Ain't that amazing.... KGHM Polska the 9th largest copper miner in the world beat out BHP Billiton the third largest copper miner in global silver production.

It will be interesting to see what the GFMS lists as total silver for KGHM Polska. I have had an email exchange with Stephen Marks Investor Relations at KGHM, and he stated that GFMS understates their silver production because of a lower calculation of converting concentrate to actual metal.

Supposedly, the world produced approximately 770 million ounce of silver in 2011 up from 740 million in 2010. I have a strange feeling that overall production did not increase that much. When GFMS released their preliminary report for 2010 silver production it was off by about 15 million ounces. I think the world only produced about 755-760 million ounces in 2011. We will see.

Anyhow, Fresnillo's drop in silver production is due to their expected drop in ORE GRADE. They will have to mine more ore to make up the loss. This will cost more money as well as consume more of that DIESEL, which is in tight supply currently.

Forecasts for increased silver production until 2020 may never be reached due to a shortage of available diesel.

The8thHabit
Apr 18, 2012 - 11:29am

Thank you from... no... TO Turd!

Just got a "Thank you..." email from Turd. No, Turd, Thank YOU! Privileged to be a subscriber!

Haole Guy
Apr 18, 2012 - 11:30am

Great Post

Turd this sceneario seems to be playing out right now in real time. Bad news for my June call options @ $33 strike. This is what I get for catching a falling knife when I bought those options. I still have about a month for it to turn around, but I probably bought myself a loss. Good thing I only gambled on 2 contracts

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Key Economic Events Week of 4/15

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