1650 and 42

Thu, Jul 28, 2011 - 4:25pm

I'm still confident we're headed there as soon as next week. Here's why.

The Turd is no civics professor but, as I understand it, there's a process which must be followed on Capitol Hill. As a refresher, I offer you this:

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IF The Republocrats in The House pass their bill tonight and IF The Republocrats in The Senate approve their's over the weekend, the differences must then be reconciled in a conference committee. Then, IF reconciled, both chambers MUST pass the new, singular version. By Tuesday. Our esteemed, illustrious and supremely qualified President must then sign the bill into law.

Hmmm. When you look at it that way, it sure doesn't seem likely that they're going to get it done. I'd say that the chances are now greater than 50/50 that The Regime raises the debt limit by Executive Order. If O'bottom goes this direction, you can bet your arse that he won't just piddle around with a puny increase. He'll raise that baby by at least $2T, enough to last through the 2012 election. This will result in two things:

1) A complete loss of confidence in the ability and desire of the U.S. government to address their disastrous fiscal "situation".

2) An inevitable downgrade of U.S. debt by the major credit rating agencies to AA+, at a minimum.

Both of these developments are extremely bullish for the PMs. Extremely bullish. They also signify a major signpost on the road to economic disaster. Remember, quantitative easing is, at its core, simply about buying time. The idea was that if, by buying treasuries, The Fed could keep rates down long enough, the economy would recover and tax revenues would increase sufficiently to sustain The Great Ponzi. To no one's surprise, it didn't work, and now Fed/Govt/TBTF Complex faces their end game.

In order to survive, The Fed MUST now continue QE at an even greater pace. The PMs and all commodities will see their multi-year rallies accelerate. Economic conditions will continue to worsen. Tax revenues will remain stagnant or decline. The annual U.S. budget deficit will widen. The dollar index will break down through the March 2008 lows of around 71. The ratings agencies will be forced to downgrade U.S. debt once again. To keep rates on current and past debt low, The Fed will have to engage in even more QE. The entire U.S. ponzi scheme will continue circling the drain faster and faster until the bottom finally falls out.

And this is all going to happen a lot sooner than what you might think. Some say 2030. Some say 2025. I think we'll be lucky to make it through 2013. Oh, and don't ever forget, the favorite tools of distraction for the Fed/Govt/TPTB Complex are wars and insurrections. Plenty of that on the way, too. As we like to say around here, prepare accordingly.

Onto the charts. Both of our metals ran into a double whammy today. First, there's a general reluctance to bid them higher in that everyone is now convinced that a debt ceiling deal will cause price to drop sharply. Second, The Cartel has clearly decided they'd like to keep a lid on things near 1625 and 41. However, it is very important to note that, even under these conditions, the metals never did truly roll over. Gold rebounded off of firm support below 1610 to close near 1615. Silver held support near 39.50 and is now back just under 40 at 39.80.

For tomorrow, there are more reasons to be long than short over the weekend so I expect an UP day. Ideally, gold will trade up and finish the day near the crucial 1625 level. Silver will rebound and finish somewhere in the neighborhood of 40.50. When the markets re-open Sunday evening and the "deal" has still not been reached, expect both metals to blast through the Cartel-induced resistance levels mentioned above.

That's all for now. I'd like to end this on a happy, upbeat note but I'm afraid I can't. I can give you this, however. My favorite schoolhouse rock. "Yow! That's unfair! Givin a guy a shot down there!" See you tomorrow. TF

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About the Author

turd [at] tfmetalsreport [dot] com ()


Jul 28, 2011 - 8:56pm


Hendrix was a man of refined taste. Dig the gold bracelet. That is some kind of solid. ;)

Jul 28, 2011 - 8:56pm


I've been wondering about that for several days and my hubby heard it on radio as well. Why would anyone ever want to buy again?? Or, is that what they want? Maybe it will soon be like Mexico, where everyone rents their home from the gov. My understanding is it is nearly impossible to own property or your own home there, you have to rent from TPTB.

What would be an incentive? Well, of course, unless the property is next to free, then maybe. Again, maybe that's what they want.


Jul 28, 2011 - 8:59pm

I'm 48 just for the record and...

...look nothing like Mr. Hendrix (who was a awesome lefthanded guitarist who played a right handed guitar upside down... btw...)

It seems like a lot of us are in the early 40's-50's bracket just by some of the references.

Enjoy the Woodstock clip :-P

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Jul 28, 2011 - 9:02pm

Just changed woodstock vid...

...if you want the other one let me know. This new one is high quality.

@Irene...I saw the bracelet and his entire garb just checking him out. He was unique.

Way too early but he played hard in a lot of ways.

Jul 28, 2011 - 9:08pm

Good gun post from Pocatello a few weeks back

See it at https://www.tfmetalsreport.com/comment/494255#comment-494255

My owns thoughts from earlier today are here: https://www.tfmetalsreport.com/comment/8747#comment-8747

You'll note many similarities of opinion. I hope this info in one place is helpful to anyone who's looking for where to begin in gun ownership.

"Guns are to freedom as gold is to money. And, bitchez, ya gotta have both"

- ewc58

"Guns are freedom, everything else is debt slavery"

-jp morgan (on scopalamine)

Jul 28, 2011 - 9:14pm

Father Fed. to the rescue?

I mentioned this earlier today in the first thread about the Fed. bailing out the Treasury or Govt. if the Pols. did nothing. My first choice of what I think is going to happen is Obama evoking the 14th to make a grand deal or no deal. Evoking the 14th would fit the bill.

So my second choice of possibilities is this ZH story. Judge Napolitano brought up the same thing I've been dreading to hear mentioned or confirmed elsewhere.

Ask yourself...why would the Fed. stop now??? Maybe they won't!

I'll drag the Judge Napolitano vid link back up.

Stop The Presses: The Fed Can Fund The Treasury With Over Half A Trillion In Emergency Capital

Submitted by Tyler Durden on 07/28/2011 - 17:43 Bear Stearns Ben Bernanke Book Value Debt Ceiling default ETC Federal Reserve Goldman Sachs goldman sachs Lehman System Open Market Account Tim Geithner

By now some readers may have read ludicrous stories about the Fed coining multi-trillion precious metal coins in a way to loophole the debt ceiling situation. Granted, this plan is so far beyond ridiculous that we have not wasted the time to comment on it. That, however, does not mean that the Fed is powerless to assist the Treasury in a modestly long-term term fix of the debt ceiling fiasco. In fact, as Stone McCarthy's Raymond Stone observes: "The Fed does not want to be a player in this debt ceiling/potential default debate. It didn't want to be a player in the Bear Stearns debacle, or the Lehman situation. But when push comes to shove the Fed will do what it can to avoid a default." In summary there are three avenues that the Fed can pursue in order to help Tim Geithner prolong the cash illusion modestly longer. The three options for Bernanke are to i) book profits; ii) prepay expenses and, yes, iii) sell gold. Combined, these three approaches could squeeze out well over half a trillion dollars, giving the Treasury breathing room not only past August 2, but potentially into 2012! That said, "The Fed would not want to advertise to Congress the possibility of delaying default. It does not want to take Congress off the hook on increasing the debt ceiling." But it will, if it has to, and the end result will be a delay potentially of up to a month. And if it means selling off the Fed's gold, so be it.

Eric Original
Jul 28, 2011 - 9:18pm


Your plans all sound solid to me, bro! keep on!

Jul 28, 2011 - 9:19pm

Executive Order Probably/Direct Fed. Intervention Possible/video

This is from earlier with the link to Judge Napolitano discussing the Fed. taking over this debt process.


If an executive order isn't exercised then the following train of thought on the video from Judge Napolitano will happen. Think about what he's saying and there is no way you can convince yourself that what he outlines is impossible.

We know this for a fact.....The Fed is not elected, nor a political party and is not bound by anyone...even the law.

Given the fact we are in extraordinary times and the Fed. has been intervening on a unprecedented level so far, ask yourself this..........why would they stop now?


Sit through the brief ad. It's worth it.

Jul 28, 2011 - 9:36pm
TheGoodDoctor LaMachinna
Jul 28, 2011 - 10:00pm

@LaMachina My thought is that

@LaMachina My thought is that the housing market has little to no confidence. I know people who bought a few years ago when they thought things were good with prices lower that are now losing jobs. It's sad.

So, those folks won't buy again until they get at least that 20% down if at all. And even then the job market could be so sketchy for who knows how long. If you have no job security why in the hell would think about buying a house? It locks you in.

Part of the problem with the job market is that people can't move out of the state they work in because they are trapped by their houses.

Look at the chart in the middle of the page here:


Basically we are hitting another bunch of houses that are going into rate resets of various kinds. So, when you hear that a million plus houses could go under it will likely be more. I fear another bailout. And by the looks of that graph it could come anytime between this year and the end of 2012. Maybe 2013 if the banks can last that long but I have no idea how. And more prime loans holders will just walk away as a business decision.

Bank of America is now bulldozing homes. Granted they are donating them and then bulldozing. There aren't many but around 100 in crappy areas but still. Is this going to happen more in the future? This happened back in the post S&L scandal days in Texas IIRC. I think this was in Niall Ferguson's PBS special based on his book The Ascent of Money. Very interesting, especially the episode (there are 4) on the Rothschilds. I intend to get his book on the Rothschilds at some point. If you get a chance it is worth watching.

In my mind I don't think the housing market gets better for at least 20 years. The banks have way too many houses on their books at past values, not present values. So, like a 500k house is still on their books at 500k not the 300k the loan is worth now. So, the banks are really all insolvent. We are starting to see this reflected in the quarterlies by JPM and BAC so far. Also, they have a large inventory of foreclosed houses that are not included in the official housing inventory numbers. For if they did it would only make the problem worse, since more inventory would reduce housing prices.

And then to take away the mortgage deduction on taxes. Well, I wonder how long that would take to affect the housing inventory and home sales? Talk about short sighted.

Just a little history, back in like 2003 and 2004 I was riding with my parents to some holiday gathering. I saw these housing developments popping up in WI on the way to the Twin Cities. During this time many small businesses were closing almost every time I visited my parents. I remember asking them and thinking "Who the hell can move into a new house out here?" "Where are they going to move from?" "Who can afford this?" Of course these were the McMansions and huge ritzy apartment complexes. It was crazy. And you know the rest of the story that got us where we are today.

At some point there will be great deals to be had. They can try to inflate their way out of the housing crisis but I fear that people will be more concerned about food and gas than buying a house soon.

Put it this way. You could probably bet on hyperinflation happening before the housing crisis is fixed.

Jul 28, 2011 - 10:08pm

Dodd-Frank fails to live up

Dodd-Frank fails to live up to promises


Contrary to its promises, Dodd-Frank doesn’t end taxpayer bailouts of private "too-big-to-fail companies." Instead, federal regulators can still lend money to troubled institutions, acquire troubled assets and pay off a troubled institution’s creditors -- all at the sole risk and expense of the American taxpayer. We must ensure that financial institution creditors -- and not taxpayers -- are solely responsible for private credit decisions and for the costs of their own bad lending decisions.

Jul 28, 2011 - 10:15pm

Thanks Shill

I appreciate it...I bet we're very much a like.

I wish more people were doing this, but hey, what more can we do at this point, but keep proving ourselves as this all continues to unravel. Eventually more will realize the train is leaving the station w/ out them and that nagging feeling will eat away at them from inside. They will have to act fast or miss out and risk losing everything and not be able to protect themselves or their families. That's the kind of shit that will definitely keep a guy awake nights for sure!

Like I always tell people...just like a gun, it's better to have one and not need it then need one and not have it. Same goes for preparing w/ silver, gold, food, etc. They can't argue w/ that whether they choose to believe things are as bad as they are or not. Period.

***On another note...I've just been cruzing Ebay tonight and won 3 auctions totaling 37 pre-65 quarters. Quarters seem to be going real cheap lately...the last few days I'm seeing nice amounts of quarters going for way under spot. The total I paid tonight for all of them together was 251.25! That comes to 37.55 per ounce! That's 2.25 under current spot right now! Hey, not bad if anyone's wanting 90% silver coins for way under spot to add to their stacks. I bet by the time I get them they'll be worth over 41 per ounce easy and rising...

Keep stackin' the phyzz any way you can folks. I'm loving all the dimes I've been getting, and now I'm moving up to quarters and halves.

Jul 28, 2011 - 10:15pm
Jul 28, 2011 - 10:24pm

Cheers brah

Cheap grab on those 90% percentors, good for you. And agree my firearms are my other children as well lol.

Hitting the sheets, the better half beckons.


Jul 28, 2011 - 10:27pm

Funny from Santa.

Funny from Santa.

Jul 28, 2011 - 10:43pm


#1 pet peeve right now is hearing sheeple say how they can't afford silver or gold bcz the price is too high! I'm a single mom and in 2008 I got rid of the cable and cut back in every area I could to put a little money each month into buying silver. Well I withdrew part of my 401k last week and just got the check today. Tomorrow I took the day off work and my son and I are heading out to buy some more Silver and a little bitta Gold, food storage, and ammo. Then we are going to see Cowboys and Aliens...should be a good day!

Just proves that if its a priority anyone can afford PMs.... problem is, most sheeple would rather have cable and keep their heads buried in the sand..

Throwing Sliver Hammers
Jul 28, 2011 - 10:43pm

James Wesley Rawles' 'SURVIVORS'

Can't wait, first book was great. Patriots: Surviving the Coming Collapse.

Book Review: James Wesley Rawles' 'SURVIVORS'

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Turdle GG
Jul 28, 2011 - 10:47pm

Something just happened

Update: this is the news -

The U.S. House won’t vote tonight on Speaker John Boehner’s debt-limit plan, said Representative Kevin McCarthy, the chief House vote-counter.

PPT hard at work right now

S&P 500 futures just dropped quickly. Down almost 1%. Gold and silver little changed.

Turdle GG
Jul 28, 2011 - 10:51pm

Intersting market action

News of no vote tonight leads to falls in equity markets in Asia, S&P 500 futures plus risk FX pairs, with all of them then recovering a bit of their losses. (PPT hard at work?) But silver didn't move at all. Gold moved up $2.

SilverFocker ashtoncole
Jul 28, 2011 - 10:53pm

Now thats a good MOM

Hat tip for ya, great lesson for the lil one.

Jul 28, 2011 - 11:18pm

POSX Dropping...

...right after the announcement of the vote cancelation tonight.

Gold perked up a few bucks but silvers just laying there for now.

Pretty limp action for all of this Asian or Indian PM buying frenzy we keep hearing about.

Jul 28, 2011 - 11:25pm

Blythe, you ain't so bad...ain't so bad

Ain't So Bad, Rocky III
metcoalfan metcoalfan
Jul 28, 2011 - 11:41pm

Mr. T

Dear Mr. T You are an original gold bug....please don't kick my ass for comparing Blythe to your Clubber Lang character. Sincerely, Metcoalfan

Jul 28, 2011 - 11:44pm

for what its worth

I think there is far too much common and popular speculation on this Media driven issue of the debt ceiling. These are droppings cast to the general masse. The Illuminati and their minions have already plotted a resolution. Obama is a pimp. He is the guy in purple on the corner with the big floppy hat and platform shoes dealing junk to the ignorant. He is Tataglia. Keep your eye on Barcinni. Thats where the action is. Nothing this highly anticipated ever ends but in a wimper. Remember Y2K? Diversion and distraction for the prols.

Obottom has no authority or will to sign anything on his own. He is a classic and blatantly obvious narcissist to anyone who has been around or has any education in psychology. He will do as he is told. In the old antebellum South the racist aristocrat would refer to him as a 'porch negro'. I am sorry if this offends, I am trying my best to elucidate the setup.

Banksters see the end game. They need and want steady devaluation of the dying dollar so that debts owed can be paid off and complete evisceration of the middle class be achieved. For this you need steady and sure money printing. This has always been the way. In fact I am confident that they have created much more money out of thin air than people are aware of or realize. There are so many ways when you play on their level and the levels of obfuscation are nearly infinite.

The game now for speculators I think is in miner stocks. Thats where the fear is so that is where the real money will be made now. And of course gold revaluation.

Jul 29, 2011 - 12:20am


'Oh, and don't ever forget, the favorite tools of distraction for the Fed/Govt/TPTB Complex are wars and insurrections.' -TF

That's exactly what i've mentioned before and am worried about - that unknown X factor - things they can throw out at us that we can't predict/chart/research... that can spin things around.

I mean, as bad as it is...'they' need some other sort of crisis (other than the current financial one - to maybe 'try' and rescue the financial?)


SSK TheGoodDoctor
Jul 29, 2011 - 12:35am

Counter argument to housing malaise

Good Doctor,

I hear on the housing supply/demand. The latter is going to get a lot worse while the former is going to get a lot more. However, I see home ownership as a pillar of my preparation for the bleak days to come. And this is why: if you believe hyperinflation is on the way (and I do) then you want physical assets: gold, silver, farmland, and a home. They will all ride the inflationary juggernaut. A home may not keep pace with inflation, but its price will inflate. Secondly, and this is the real advantage at present to home ownership I believe, if you have locked a fixed rate interest rate at today's insane low rates, you will have one sure-fire hedge against the US long bond. It's a double win: you pay 4.5% interest in the back to the future Jimmy Carter rate world all the while paying 2011 money in a 2013 hyperinflationaly scenario. Think about it: a $1,500 mortgage payment may be chump change in the world we are about to enter. And at 4.5%, it's just the olive in the martini. Yes, there are powerful supply and demand pressures on housing at present, but there are likewise powerful rate and inflationary incentives to own as well. These latter incentives, I believe, will far outweigh the foreclosures and demand destruction. It's like gas: just because fewer people are driving to work doesn't mean the price won't keep on rising in times of high inflation. But unlike gas, you get to live in your house. And every time you pay, you put a little fiat back in your pocket.

Jul 29, 2011 - 12:50am

Body Language

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Blight Master
Jul 29, 2011 - 1:01am

"In the old antebellum South

"In the old antebellum South the racist aristocrat would refer to him as a 'porch negro'. I am sorry if this offends, I am trying my best to elucidate the setup."

I believe the phrase you're referring to is "house negro" and it was coined in the 1950's not the 1850's.

Jul 29, 2011 - 1:02am

China always confident in euro/because they are propping it up

Central bank governor: China always confident in euro

july 25, 2011 peoplesdailyonline.com/china

China welcomed European Union's agreement on the 109 billion euro bailout plan for Greece and has been confident of the stability of the euro zone and other member countries in the past, present or future, said Zhou Xiaochuan, governor of People's Bank of China on July 23 during an interview with Financial Times.
Bailout plan helps bring financial stability

After eight hours of negotiation, euro zone leaders agreed on July 21 local time in the Belgium capital Brussels on a new 109 billion euro bailout for Greece, with private bondholders contributing 37 billion euro.

Zhou said China welcomed the agreement by the euro zone and European Union leaders on the second-round bailout plan for Greece and a crisis management mechanism for the euro zone on July 21 to ensure debt remains sustainable in the euro zone and prevent the debt crisis from further expanding.

Such moves can help solve the sovereign debt problem, maintain financial stability in the euro zone and other member countries, safeguard market confidence as well as enhance the strong, sustainable and balanced growth for the European Union and global economic recovery as a whole, he said.

Zhou expresses support for European financial market

In addition, Zhou also lent great support to the European financial market. He made it clear that China, as a responsible investor in the international financial market, has always had confidence in the euro zone and euro. Whether in the past, present or future, the European financial market has always been one of China's main investment markets.

According to market analysis, euro capital accounts for some 20 percent of China's foreign exchange reserves.

Li-Gang Liu, head of Greater China Economics under the ANZ Banking Group, said that the E.U. bailout package put Greece in technical default. Euro zone leading countries, such as France and Germany, also reached agreement on this kind of "extraordinary" method to solve the debt crisis in Greece. It is a major victory for Greece and shows that the euro zone chose to avoid a possible system crisis with a swift solution, but it carries risk.

Liu said that there would be more severe risk factors for the euro zone if the debt crisis in Greece continues to spread and worsen.

By Zhang Xinyi, People's Daily Online

Eric Original
Jul 29, 2011 - 1:05am

another twist on housing

I keep a little spreadsheet where I track our net worth. It's got all the IRA's, 401(k)'s, etc, and all the liabilities as well. Plus the phyzzz of course, but I don't even put the value of our house on there (though I do subtract the small remaining mortgage).

I figure my crappy little 3 bedroom in the 'burbs will always be worth exactly one crappy little 3 bedroom in the 'burbs, no matter what we will be using for currency. I don't even think about it in dollar terms anymore. It's silly to think in terms of it "going up" or "going down". It just is what it is.


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Key Economic Events Week of 3/18

3/19 10:00 ET Factory Orders (Jan)
3/20 2:00 ET FOMC Fedlines
3/20 2:30 ET CGP presser
3/21 8:30 ET Philly Fed
3/22 9:45 ET Markit PMIs
3/22 10:00 ET Existing Home Sales
3/22 10:00 ET Wholesale Inventories (Jan)

Key Economic Events Week of 3/11

3/11 8:30 ET Retail Sales (Jan)
3/11 10:00 ET Business Inventories (Dec)
3/12 8:30 ET CPI (Feb)
3/13 8:30 ET Durable Goods (Jan)
3/13 8:30 ET PPI (Feb)
3/14 8:30 ET Import Prices (Feb)
3/14 10:00 ET New Home Sales (Jan)
3/15 8:30 ET Empire State Manu Index
3/15 9:15 ET Cap. Util. & Ind. Prod.

Key Economic Events Week of 3/4

3/5 9:45 ET Markit and ISM services PMIs
3/5 10:00 ET New home sales (Dec)
3/6 8:30 ET Trade Balance (Dec)
3/7 8:30 ET Productivity and Unit Labor Costs
3/8 8:30 ET BLSBS
3/8 8:30 ET Housing starts (Jan)

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