Sunday, November 21, 2010

Sunday of Thanksgiving Week

In a stunning development, Ireland has decided to allow the EU to bail it out. NO!! REALLY??

How anyone can be surprised by this is beyond me. TPTB will always postpone their day of reckoning, of that you can be assured. Ireland was "bailed out" just like Greece before it. Soon Portugal, Italy and Spain will follow suit as will California, Illinois and New York. In the race to the bottom, never ever forget that all fiat currencies are traded and valued against each other. There will be periods of dollar strength and euro weakness like the past  two weeks just as there will be periods of euro strength and dollar weakness. In the end, it simply doesn't matter. All fiat are headed to lower and some are headed to virtual zero. I have no doubt that, one day soon, they will all be replaced by some sort of new global, partially asset-backed unit of exchange. It is no longer a question of if, it is simply a question of when. The end of the Great Keynesian Experiment is upon us. You must prepare accordingly.

OK, on to gold and silver. Predictably both are higher in early trading this evening. Dec10 gold stands at $1358 and Dec10 silver is around $27.75. Overnight, I'd expect additions to these gains. Gold may approach 1365 and silver 28.20. Tomorrow will be interesting as we have another 9bil or so in POMO coming our way. With Ireland "resolved" and 9bil in fresh greenback available, its hard to see the PMs and equities having a down day. There is one thing to watch, however. Tomorrow, the PMs will be almost certainly be subject to another 7:00-9:00 EST Evil Empire takedown. You can bet that Blythe and her monkeys can see the writing on the wall for an up day, too, so they will try to take $5-10 out of gold when no one is looking just to make it start from a lower level. Let's watch and see.

If you haven't read Harvey Organ's weekend update yet, you need to do it now. Go ahead, I'll wait...

Glad to have you back. What did you think? Sounds like ole Harvey is getting pretty excited about the damage we're inflicting on the Death Star (Comex). With expiry on Tuesday, it is imperative that you check Harvey every evening this week. He usually updates around 8:00 EDT. Once again, if you are relying upon blogs, CNBC and the WSJ for your metals opinion and not reading Harvey, you simply are not receiving an accurate picture of the fundamentals behind gold and silver. For now, the only thing that matters is the physical squeeze on the Comex. Period. Do not be persuaded by top-callers and snake-oil salesmen like Prechter. If the silver Comex fails, either now or in the near future, there is virtually no limit to the extent that gold and silver could rise.

Lastly, this week promises to be equal parts volatile and drab. Tomorrow should be fun and Tuesday will be volatile but Wednesday and Friday should be quiet with an upside bias. Gold will initially trade to about 1365 or so before taking a breather. Its going to have a difficult time slogging through 1375-90 but once it gets through there, probably early next week, it should go back to the highs of 1424 in short order. $36B in POMO next week ought to do it. In silver, look for 28.20 first, maybe overnight tonight. Then a breather and pullback on expiry day to 27.50-75 but then, once it clears 28.20, there's nothing restraining it until 29.30 where you can bet your arse Blythe will be waiting to try to paint a double top.

Let's see how things open in NY tomorrow. Don't forget to watch for the monkey beatdown between 7 and 9 eastern. I'll try to update things by mid-morning.


  1. Turd,

    I do not wish this on anyone but I expect this to be part of the social breakdown caused by the bankers "heads-we-win-tails-you-lose" attitude.

  2. Turd, I hope you don't feel lonely on your blog:). Thanks for your great job, you and Harvey are the best the unwashed can get.
    Poor Germany calling

  3. Turd, I just wanted to thank you for your superb guidance over the last week or so. I also learnt a lot by listening to Ted Butler being interviewed by Chris Martenson

  4. Thanks for the blog Turd. I stumbled onto it just last week and your info has proven more than helpful. Appreciate your work and dedication and look forward to your insights to help me make the right choices (no more rookie mistakes). thanks, Rich

  5. Turd, Just got here after lurking on ZH for ages. Forgive the ignorance, but I've searched the archives and can't figure this out... Who is Blythe?


  6. Blythe Masters... The commodity chicklet for JP Morgan, aka Satan.

  7. Blacky, Blythe is Blythe Masters, the head of commodities at JPM, so therefore the head of the entity that attempts to suppress the price of gold and silver. She probably is not fond of Max Keiser.

  8. Some info if your interested...

  9. On Blythe,

    Sorry guys I LOVE this women. I would send her flowers if I had her address! Huge crush on her. No other lady has let me buy an asset class at such a massive discount over and over again. It's like she is telling me "Hey Shameful I'm going to ruin this company, why don't you back the truck up after I take down these prices?" I just wish she would let me know when she was really going to pole ax the price :) I'm in the stockpile mod so I'm all for her driving prices down best as she can,

  10. Turd,

    I totally agree that the EE and Co will keep this ball in the air as long as they can. However what other tricks do they have up their sleeves regarding the Comex? I know they are willing to sell gold out, but isn't the silver reserve basically gone now? I'd love to believe that this is their Achilles heel and if people like us and the Buyers of Size keep up the pressure they will crack, but they have to have a contingency for such a clear tactic, right? If they losing pricing power on the Comex won't it basically show the manipulation to the world and cause the fiats to go berserk?

    After all they would have to explain how they sold silver that didn't exist, and when the finger pointing starts JPM/HSBC is going to point at Uncle Sugar and the Fed as the ringleaders. I think the metals will be one of the nails in the coffin, but how close do you think we are before this busts wide open, or will they change tactics to try to prolong? Say maybe letting gold pop to 2000+ or silver past 50 in short order then pile into the shorts and really lean on the bubble meme?

  11. Turd (and anyone, really) I'd be grateful for your thoughts here. Kind of a serious conundrum I have.

    I'm young (28) and next autumn I am going to pay off some graduate school loans. Fortunately I have enough money to do that, but it's in muni bonds...and we know munis have a grim future, no?

    So far all my silver investments (AGQ) have been with money I can afford to lose. Not so with the money I have in munis. I NEED THAT money next autumn when my loans come due.

    Question: how best to protect my purchasing power without having a heart attack some time in the next year? Corollary question: What do y'all think of Sprott PHYS?

  12. Catbird,

    Why pay it off now? I to took out some loans for grad school, will be graduating this spring and around your age. I could easily pay them off now but I'm not going to. I'm going to ride the gold/silver train a while longer instead of cashing out and going basically to square 1. Way I see it is the chance of the dollar being anywhere near as valuable as it is now in purchasing power is near 0. So why cash out of an asset when I can ride the wave and then cash out and pay later? I'm employed so I could pay the interest, and I might even go back to school on someone else's dime (employer) to forestall the loans even more.

    Honestly I hope I get wiped out. Because it means America is strong again and the dollar is strong and I can make that money in a growing vibrant economy. I don't want to dump my PMs to clear a loan that Zimbabwe Ben is going to lighten the load for me. Also I would suggest physical, paper assets will get 'weird' if/when the evil empire dies. If it's in your hands it's yours until someone pry's it out of your hands.

    But that's just what I'm doing and I have a history of making bad decisions in life :)

  13. @Catbird, If you believe in a hyper-inflationary scenario, it would be foolish to pay down debts in today's dollars.
    The entire idea behind QE is to pay off all of yesterday's private and public debt in the devalued currency of tomorrow.

  14. Sprott's fund is solid. He has also launched a service selling physical silver and gold:

    I've made several large purchased from his service and will be placing another round tomorrow morning.

    Best of luck to all.

  15. @ ShamefulPath

    I don't intend to liquidate any of the silver I own now to pay my fixed rate student loans. That's speculative money. :)

    As for the munis...I'm going to have to liquidate about 3/5 of those to pay the loans starting around next November. So the question is, for the next 12 months, do I leave that money in the munis and pull my hair out watching to bond market tank?

    I mean, I'd probably be better off just selling the bonds and putting the money in an FDIC insured savings account. (since the loans are fixed rate). But for a precious metals guy that's kind of heresy, isn't it?

    Hence I was thinking PHYS. Less volatile than silver.

  16. Catbird,

    If you have to have the money then sitting it in a savings account should be fine. Even in system crash I expect them to print to cover so you'll have the same # just not value but the loan is looking at #.

    I'm a wild man so I would speculate with the money, but I also tried my hand at professional gambling during undergrad to middling results. Overall I made money but took a few really bad weekends. It's rough explaining to the gf that you can't go out because you lost 6k over the weekend and have to go grind the tables :)

  17. Keep the women far away from your money....far away.

    Silver in hand is best in my opinion for when the currency collapses.

  18. I'm behind Masters 100%.

    Hoping she can take a few dollars off silver today and tomorrow and take gold to $1240 whilst simultaneously we get a nice dip in the Dow...beautiful. Thus tank the PM stocks here in Aussie a bit so I can back up the truck.

    If she can do that I will be her some silver toys.

  19. Just a quick update.
    As predicted, gold stopped right at 1365. Silver almost made it to 28.
    That was not an EE attack that drove it back to 1352, though I'm sure they helped it along the way. Simple dollar-strength, algo-selling. Same old nonsense that rules the entire commodity sector these days. Fundos be damned! All hail the algos!
    Absent big, horrible news, the PMs will drift higher today, led by $9B in POMO.

  20. If we see some serious rioting in Ireland that could push the dollar higher and put some pressure on PM's.

  21. Agreed but only temporarily. Gold is seen as a much better, long-term "safe haven".

  22. My short JPM long Silver strategy is looking very promising so far...

  23. dd: the "Harvey Organ Ratio Spread". I like it!!