Getting Real, Real Fast

Fri, Jun 1, 2012 - 10:29am

Your blissfully unaware family and friends notwithstanding, the global financial "situation" appears to be deteriorating rapidly. I hope you have prepared accordingly.

First this morning, I suppose we should address this month's BLSBS. As you know, the period between 8:25 EDT and 8:35 EDT on the first Friday of the month is the only time all month when I actually watch CNBS. Today, the usual crowd of misfits populated my screen. There was The Shill happily expecting glorious growth. The Coug was prowling and LIESman was stuttering, as usual. Then, the party ended when we went "Live to Hampton Pearson at the Labor Department". No real reason for me to rehash the dismal numbers with you as I'm sure you've had enough of that already. I don't wish to add some color, however.

  • The media will tell you today that gold is rallying on fresh "hopes" on more QE. Bunk. This is not true. Gold is rallying on fear. If gold was rallying on QE, why are stocks down? Why is crude down? Additionally, gold is rallying and extending gains because of a squeeze in the massive spec short position that has been built up over the past month or so.
  • The last commercial I saw before the numbers were released was a promo for a CNBS program that promises to "show you how you can profit from the declining euro". Looks like the bottom is close there.
  • The printed NFP was +69,000 but the "birth/death adjustment" was +204,000. This means that, without the BLS statistical make-believe, the actual number might be -135,000. I wonder how shiny LIESman's head will get as he attempts to spin that? Chances are he won't even try.
  • The 10-year note is now at 1.47%. This is incredible! Even using the nonsensical and worthless CPI, the 10-yr now has a -1.0% real (inflation-adjusted) annual return.
  • The 30-year Long Bond is at 2.55%. Never in my life did I think I would see the day when the Long Bond yield fell below the stated rate of inflation. Well, OK, maybe I thought it was possible that the Long Bond might yield 10% when the CPI was 12% but parity? At 2.5% Amazing!
  • And crude is now down over 20% in the past month alone. This in spite of the ongoing, geo-political risk in The Middle East.

Speaking of crude, anyone thinking of buying some had better take a long, hard look at the chart below.

(I just snuck a peek at gold here at 10:10 EDT. UP to $1610. Wow! Continuing to rally post the PM fix. Very surprising.)

As stated above, the metals soared on the BLSBS and are continuing to rally. Fear, short-squeezing and QE anticipation are driving things higher. For gold, a move through and close above $1610 would be very exciting. Your short-term target to watch in silver is $29.

I mentioned negative, real interest rates above. Remember, negative real rates are a hugely positive indicator for the precious metals. If you need a refresher on this, go here:

Today's CoT is going to be very, very interesting when it is released at 3:30 EDT. I'll be sure to post some comments and analysis once I see the numbers.

Lastly, please take a few minutes to page through this scribd doc. It was written by Raoul Pal, one of the most successful hedge funds managers of all time. Doom? Gloom? Yes. Heed his warnings.

The End Game

I cannot imagine that I won't have more for you later on this crazy, crazy day so please keep checking back. Gold is now 1617! WOW!


About the Author

turd [at] tfmetalsreport [dot] com ()


Dr G
Jun 1, 2012 - 1:37pm

Gold seriously outperforming

Gold seriously outperforming silver. Gold now up 4% and still moving strong. Silver rolling over a bit. :(

Jun 1, 2012 - 1:38pm

I wonder if there were some shorts that got caught?

I had to work and missed this rally! duh

TreeTop Dweller Zoltan
Jun 1, 2012 - 1:40pm

Missing Regulars

Thought Green Lantern would be out of the closet today?

Jun 1, 2012 - 1:40pm


dow down.

hui up.

dropout humbleprofits
Jun 1, 2012 - 1:41pm

Choice? No Choice.

Blue/Red? Up/Down? Left/Right? Front/ Back? Demorepub? Both the same.

Obammy or Mittens? Some choice!

The US is F**KED.

In the words of the "Venerable" George Carlin, "It's a big club, and you ain't in it!"

proton777 Groaner
Jun 1, 2012 - 1:43pm

Anyone have NUGT?

The 3X long gold miner ETF. Up over 20% today

Jun 1, 2012 - 1:44pm


Hi Ivars, that mushroom you pictured is an amanita muscaria. We have them here in northern Wisconsin and yes, I have indulged. :)

Jun 1, 2012 - 1:45pm

Hall of the Mad Mountain King

that is what I always thought it was called. And he sure seems mad. Something just made me think of this, and what a great group to see playing it. One of the comments under the video said, and I wholeheartedly agree:

'I was hoping they'd all just start running around chaotically while they played'

In the Hall of the Mountain King [HD]
Jun 1, 2012 - 1:46pm


Nah, all the Chicken Little traders are in DUST and currently being worked for 20%.

Jun 1, 2012 - 1:52pm


Jun 1, 2012 - 1:55pm

1.5% Threshold on 10-year Treasury

I seem to recall reading to watch for a breach of 1.5% on the 10-year, I believe from an article referenced here on TFMR. Anyone recall this article and can provide a pointer?

(Apologies for being slightly OT)

Jun 1, 2012 - 1:56pm

silver seems jetlagged

gold jetting off.....silver seems jetlagged..............looks like as if new shorts are being created or the spring is being wound too explosive move to the upside in the waiting...............

hsofiak dropout
Jun 1, 2012 - 1:57pm

Intentional Short Squeeze?

The TSX SLW volume was actually closer to 400K for the 4:00 pm print as shown in this mornings charts. Other PM shares exhibited similar behavior. One thought I had was that it was fund buying at the close, considering it was month end. However, I concur on possible inside information as it sure does seem fortuitous considering the beat down PM shares have experienced. Or was it just luck?

Jun 1, 2012 - 2:02pm

Gold vs silver today

I don't mean to be a downer but silver is lagging big time today compared to gold. Gold keeps breaking upward while silver is capped around 28.57. Silver seems to be left in the dust today.I hope that changes this year as last month I traded my gold for silver. I'm kicking myself a little for being way too early.

Jun 1, 2012 - 2:03pm


DR G... be patient. Look where the DOW is currently and look where silver is. This is a significant decoupling. Again, when there is a turn around in the precious metals, SILVER LAGS in the beginning and TAKES OFF later in the stage. There is a good chance silver will close at its highs of the day.... that just seems to be the overall trend.

I have an article coming out shortly. As I have mentioned several times before, to DESTROY THE PRICE OF SILVER, the establishment had to DESTROY SILVER SENTIMENT.

This will not be 2008 all over again because the DOW has been manipulated higher while precious metals have been crushed. Here is the 6 month chart back in 2008:

Here is the 6 month chart up until last week:

Unless the FED comes out with a OFFICIAL ANNOUNCEMENT OF QE3, the DOW heads lower, and the precious metals go in the opposite direction.

As JIM SINCLAIR has stated over and over..... QE to INFINITY is coming

Jun 1, 2012 - 2:04pm



SILVER always LAGS gold in the beginning of a LARGE MOVE. Silver OUTPERFORMS later in the move.


Jun 1, 2012 - 2:05pm

No technical expert but.....

I am going to call this the start of the massive reverse head and shoulders. Eternal optimist.


Jun 1, 2012 - 2:06pm


bought 800 at $9 on average last week. When to sell is the question.

Jun 1, 2012 - 2:07pm

Holy moly look at gold. Nice

Holy moly look at gold. Nice to see it spike up for a change. But punk never waited to buy lower even though he thought we would have seen $1480 by now.

Headed for an hour walk/ jog.

See you soon.

Jun 1, 2012 - 2:09pm


You must be joking...These ones we have are poisonous, strongly so. I saw the link, they say they are edible, taste fine, some people smoke for no reason if they could just digest. I am now worried if some Latvian reads this and goes straight to the woods to search for his tomb place.

Jun 1, 2012 - 2:10pm

The Dearly Departed

I really do miss the old farts.

Bay of Pigs, where are you?


Jun 1, 2012 - 2:13pm


is here :) I must admit, I bought some paper - options yesterday. Making a killing!! good day

exiledbear bam
Jun 1, 2012 - 2:14pm

And that's why you stack

First time PM investors have a steep learning curve in terms of stomach strength.

A good chunk of the volatility in the PM space is artificially generated, mainly to scare people away from having a position in them one way or the other. But all bull markets are like this - they'll correct and beat on your hands to get you to let go. And then once enough people have been beaten away from whatever, it'll then make another leg and go up again. They're all like this, it's just the the PM markets happen to be the most vicious at it, mainly for political reasons.

Just stay unleveraged and only own as much as you can sleep on at night and go do other things. Doesn't matter what, mow the lawn, smoke some weed, play a game, just go out there and do something else.

Although at this point, I'm not quite sure why I'm giving advice for how to go long on PMs. It's almost too late now to own them.

Mark my words. Mark them well. When gold is at $3000, you will have a hard time getting physical. It'll just disappear into the woodwork. They'll be happy to steer you to the COMEX table though, where they'll bend you over, pull your pants down and make sweet love to you.

Dr G
Jun 1, 2012 - 2:14pm

You know, after pondering

You know, after pondering upon these jobs numbers this morning, I'm convinced that new QE will be announced by the Bernank at the meeting later this month. I'm giving it 3 weeks from today.

Stack it up now.

Dr G
Jun 1, 2012 - 2:15pm

@SRS, please provide some

@SRS, please provide some data for your comment. The charts that I'm looking at show silver always outperforming gold, no matter the placement in the move. Silver is often up 1.5-2x as much as gold.

Jun 1, 2012 - 2:20pm

Jim Rickards ‏@JamesGRickards

Jim Rickards@JamesGRickards

first w/ rate cuts then w/ but not yet. This plays out in Jul-Sept. Fed cares about market on Nov 4 not Jul 4

View conversation Hide conversation 9:15 AM - 1 Jun 12 via web · Details
Jun 1, 2012 - 2:20pm

I don't want to gloat...

It's way to soon for that. I wouldn't want to be a trader in precious metals and feel for those that sold their stack recently to try to make fiat in the pits.

Jun 1, 2012 - 2:22pm

Removed comment

Removed comment.

Jun 1, 2012 - 2:26pm

Two thoughts

I was thinking going through the comments: where are all the trolls and shills from Tuesday? Another thing - sorry but I have to say this - I can't believe people are complaining about silver performance today and kicking themselves for switching gold to silver... Can you have any patience? Just enjoy what you have and appreciate future opportunities to add more. I have almost no gold at all, half in silver and half in gold/silver miners (I am trying to maintain equal amount in these two categories so I have added lots of miners stocks lately).

Edit: Forgot the most important: THANK YOU, TURD! This was a great week for you, you perfectly nailed it, especially your calls on Tuesday - remarkable!

Jun 1, 2012 - 2:26pm

Yeah, Zoltan, Where is DPH / IS7?

I hope all is well with you my friend. Looking forward to your posts, now that we seem to be enjoying a moment of pleasure watching the PM's move to the upside.


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