Monday, December 13, 2010

Buck an A!

Well, it certainly seems that currency traders finally took notice of the massive selloff in treasuries last week. By Friday, I was somewhat incredulous that the $ had hung in and actually rallied in the face of the worst, two-day selloff in bonds that anyone had seen in years. You had to figure that, eventually, bonds had to rally back or the dollar would puke. Fortunately for us PM-pushers, we got the latter!
First, take a look at the chart for the Dec10 10-year Note and notice the appearance of the dreaded, "Poseidon's Anchor" formation:
The anchor formation by definition illustrates a break of a long-term, primary trend that then rapidly accelerates downward until a near-term bottom is reached. In this case, it looks like the bond sell-off may only be about halfway completed. You can imagine what the impact on the USDX will be if the bond market continues to deteriorate and, as we all know, a deteriorating USDX will drive PM prices higher.

For now, lets not get too carried away, however. The USDX is still within the range I laid out on Friday. Until we get a break of 79.50 on this chart or 79 in the cash USDX, there's really nothing to write home about. The USDX, however, must be closely watched this week.

Our precious metals had a great day. As I type, the Feb11 gold is at 1397 with a high of 1400.20. The March 11 silver is 29.55 with a high of 29.74. As long as Blythe doesn't sneak in a try to pound them down in the time remaining on the Globex, we will wrap up a perfect Monday and be set up for significant gains later this week. No POMO tomorrow but $16B on Wednesday and Thursday will certainly not hurt our chances.


  1. Updated Daily Google spreadsheet regarding silver:

    Google Spreadsheet

  2. Happy Monday Turd! One Oz of silver heading your way courtesy of the Feed the Turd button. I truly appreciate all of your insight and effort... thank you, thank you, thank you!

  3. Sooner or later this sell off is going to become an avalanche as people click to the fact that default or hyperinflation are the 2 outcomes leaving the bondholders with a worthless bit of paper as in bugger all.

    Buy Silver,take down a bank,its your patriotic duty.

  4. Big volume spike in GLD ( - is this bullish or bearish (a big order finally got filled - and next it will be sold again)?
    Last time we had this - a day later we got a sell off.

  5. The HUI and GDX giving back most its gains so far - is another warning flag.

  6. No POMO tomorrow, either, hammy. If we can just go sideways tomorrow it would be a victory.

  7. If the bond selloff becomes an avalanche, it's all over - global default and reset will be the only viable outcome (in my idiot opinion). I think the common man will simply abandon paper money. But what do I know?

  8. It will be interesting to see if the Asians push silver to 29.90-30 and gold over $1400 overnight. Gold probably has a better chance at that.

  9. Shitty close ... too mixed. Good buying in PM stocks quite into the close - but not enough over the day to be sure what will happen tomorrow. Would say a slightly positive close.
    Merde is all I can say. As I hate it not to know what will happen next day.

  10. Don't forget tommorrow is Takedown Tuesday. Remember the last 2 Tuesdays?

  11. Btw, using some of the "donation" $ I've received, I just purchased 3 Silver Keisers. Thank you all again!

  12. Re buying those silver coins - read this:

    I don't think that the same will happen (hopefully Keiser has learned from the past - and think zillions of times about the wording) - but you can bet that there are some Andies out there closiest watching what is going on with those "coins"

    At least, like Turd, I won't invest much - and instead go to my dealer exchanging cash for coins.

  13. AGoldHamster: Actually the HUI is not bad at all with a 1% gain for the day.

  14. I hear ya, hammy. I figured 3 was plenty as I mainly just wanted to show my support for the "war effort".

  15. Turd, thanks again for your learned commentaries.

  16. Turd - some sort of donation from Hammy:
    Should add some pageviews and over time also some huggets.

  17. Turd,
    there was a link provided earlier on this article by Bob Chapman, but I thought I'd copy and paste the important part.

    This describes our BoS?

    Fiat Currencies in Crisis, U.S. Dollar Surpluses Conversion into Gold
    By: Bob Chapman
    Something is going on that your government does not want you to know about.

    Very few journalists have written about it and little or nothing has appeared in the mainstream media. The story could be one of major stories of our time.

    Western powers have tried to destroy gold as a backing for currencies for many years. Presently the major media won’t touch the story and that is understandable.

    For years we have been writing about the SCO ( or the Shanghai Cooperation Organization. Few have been listening and few have been interested in what their mission is and what they have been up to.

    Some of the members are large oil producers and some, like China, are large oil users. Some have very large US dollar surpluses. As well, some are large commodity and gold and silver buyers. In fact, members are in a great part responsible for driving these prices higher.

    It is debatable, but we believe there is a conscious effort to accumulate gold and silver, dump dollars and to back their currencies with gold.

    China and Russia are both large gold producers and for a number of years have been buying up domestic gold and silver production, so that it never reaches the market and does not affect prices. If anything the absence of sales tends to push the markets higher. As a matter of fact Russia and India are visible buyers.

    Even Iran with its oil surplus recently announced that they had purchased 340 tons of gold. Their recent gold purchases are very significant as affiliate members, which have access to the present and ultimate direction of the group.

    You might say buying gold has been a protective effort to shield members and close observers from the problems generated by dollar policies. They are accumulating gold, as many have been worldwide, for the past ten years, but particularly over the past few years.

    This buying, for protection, has served to thwart the efforts of US policymakers, the Treasury, other central banks in Europe and the Fed, from being able to continue the blatant suppression of both gold and silver prices.

    The malefactors, except for forays into derivatives and futures, which are transitory, have lost control and suppression of gold and silver prices, and it is only a matter of time before all visages of any control will be visible.

    Since 1988, in August when Present Reagan signed the Executive Order creating, “the President’s Group on Financial Markets” and the subsidiaries that have grown out of that policy, that the Treasury won many if not most of the battles.

    The SCO in part changed that and now they and the public are winning the war for a fair and free gold and silver market. The current class action lawsuits, including RICO, are a testament to the market manipulation in silver, which is finally coming to an end.

    HSBC and JPMorgan Chase, the latter that is the major owner of the Fed, are going to be finally prohibited from rigging these markets. Their officers all belong in jail, but elitists never go to jail; they pay fines, and keep right on robbing the public.

    Other SCO members and observers are accumulating gold as well, be it in smaller amounts. We might add that other nations observing Russia and China and their gold purchases are buying as well.

    These participants must believe that there could be a return to sound money; otherwise they wouldn’t be gold buyers. Buying gold is certainly preferable to holding US dollars, which have consistently fallen in value versus other currencies over the past ten years.

  18. And besides the Kitco goldbugs, now also the goldtent-goldbugs ( are aware of Turds blog.

    Turd - another congrats on your Blog! You deserve it.
    And maybe at some point in coming years we can have a bear together.

  19. Turd: gotta question for ya...when we all make a small fortune in silver and gold just what the hell do we do with it...I have no plans to re-purchase "fiat" money so I guess the "value" of silver, whatever that means will be exchanged in a barter system?...however since we are so accustomed to converting our wealth into dollars just how do we place a value on all this physical?...seriously


    JPMorgan cuts back on US silver futures

    Published: December 13 2010 22:31 | Last updated: December 13 2010 22:31

    JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal.

    The decision by JPMorgan was an attempt to deflect public criticism of the bank’s dealings in silver, a person familiar with the matter said. The person added that the bank’s position in silver would from now on be “materially smaller” than in the past.

    A group of small precious metals investors has alleged that large short positions – or bets on lower prices – in silver futures held by several banks, including JPMorgan, are keeping prices artificially low.

    The US regulator, the Commodity Futures Trading Commission, announced in September 2008 that it was investigating complaints of misconduct in the silver market, although it did not name specific entities.

    However, JPMorgan said in a statement: “It is absolutely incorrect to say or imply that the Nymex, CFTC or any other exchange or regulator has instructed or asked us to reduce our position.” The bank declined to comment on whether it had reduced its position in the silver market.

    The price of silver has risen more than 70 per cent since mid-August to hit a 30-year high of $30.68 a troy ounce last week on the back of a surge in investor buying and a rebound in industrial silver consumption.

    In two previous reviews of the silver market, the CFTC has dismissed claims of manipulation. Most analysts say there is little reason to believe the price of silver is being systematically manipulated.

    But Bart Chilton, a CFTC commissioner, said in October that he believed there had been “fraudulent efforts” to “deviously control” the silver price. He did not name any party.

    Publicly available data on individual traders’ positions are sketchy. In a speech last Wednesday, Mr Chilton said that “earlier this year, one trader held more than 40 per cent of the silver market”. He declined to identify the trader.

    The CFTC’s Bank Participation Report shows that one or more US banks held a gross short silver futures position equal to 19.1 per cent of the total number of outstanding contracts in early December. In January the share was 30.2 per cent.

    The CFTC only reports data for the US silver futures market, a small corner of the global derivatives market for the precious metal, which is centred in London and largely traded via private over-the-counter deals. The data also do not cover transactions in the physical market.

    Analysts and traders said that JPMorgan’s large short positions on New York’s Comex exchange, a division of Nymex, were hedges for the bank’s long positions in physical silver and London’s over-the-counter market.

    JPMorgan has invested nearly $3bn over the past two years in its commodities business led by Blythe Masters.

  21. Tim: Good question. Kind of a catch 22, isn't it?
    Cris has a solid idea. You could also keep re-investing profits into a bigger and bigger position. Maybe even convert some metal back into the next global reserve, asset-backed currency when the time comes.

  22. GG,

    I agree -- HUGE news. Thursday's CFTC meeting should be VERY interesting. I expect we will continue to get foreshadowings of what will go down in the next couple of days.


    Another idea I have seen people talk about as the "next big thing" is water and natural gas.
    Not that we are ANYWHERE near the end of silver. As I am sure everyone agrees, we have a LONG way to go.

    A question for the roundtable (actually two):

    How high will silver go?

    By when?

    I'll go first: $50 by end of Feb 2011. I'm cheating a little, bc I think it will go much higher. But I am willing to stand by that prediction. I think the resolution to the position limits thing will lead to a big jump and perhaps a little overshoot. I'm thinking gold $1500-1600 and a decrease in the ratio to around 30:1.

    Long(er) term (a year or so): over $100, prob closer to $200

    We shall see...

  23. Cris, let's be cautious. If the run-up in silver prices has been due to JPM's short covering then we need to be careful. But Harvey's analysis does not show a decrease in shorts. I say the FT article is a plant by JPM, to deflect some heat, and probably does not bring us closer to the truth.

  24. I've been there and done it with property, it has served me well, my profits from property have put my wife and I into all that I see left at this juncture (PM's) and though land has never been cheaper than now, it can be a huge burden...not only that but it keeps depreciating, so at what point does it reach it's true value...sorta prefer the idea of an asset-backed currency because then there will be a multitude of investment opportunities...problem I see is that we are heading for an Armageddon of biblical proportions concerning the definition of "value" and the question is...just what will the asset-backed currency be...perhaps those countries that own the most PM's will be making that call and we know it won't be the dollar...we are all going to have some difficult decisions to make concerning this adventure we are on and it is certainly comforting to know that those of us on this blog will be going through it together and hopefully have some responsible answers and solutions for each for me, geez I'm 64 and retired for the last 10 years...about all I can think about right now is buying another sailboat and enjoying what time I have left...(if "they" will let us)...and as we all know, no amount of money buys time.

  25. GG...very interesting. Poster on ZH the other day was asking whether the BoS was the JP Morgue...

    If silver spikes now, the answer is no...if it double tops and drops (per the 10 year daily chart) the answer could be...either way, physical is a comfortable feeling.

  26. by the way guys...I'm all paper for me...

  27. Cris...I thought Turd's chart this morning showing progressive support at $1.50 intervals ($25.00, $26.50, $28.00) was EXTREMELY compelling in predicting how this will play out short/intermediate term.

    Seems like the BoUS's (Buyers of Unusual Size) and the EE are both comfortable with an orderly retreat + (alleged) deleveraging of the EE's shorts.

  28. This just in from Harvey Organ--he expects the bullion banks (the cartel like we like to call them )to try ti hit silver tomorrow--who knows but the cartel sure seems to favor Tuesday's for their take-downs ;
    This Blog

    MONDAY, DECEMBER 13, 2010
    Silver and gold advance/all commodities rise big time
    Good evening Ladies and Gentlemen:

    Gold and silver had a stellar day. Gold finished the comex session at $1397.30 up $13.00. Silver had a terrific session up $1.02 to finish at $29. 60.

    Let us see the trading at the comex with respect to open interest, volumes, deliveries and inventory changes.

    First gold:

    The total gold comex open interest fell by 2207 contracts to 589,091. This is basis Friday where we had one of those crazy raids on the comex. The banking cartel did not shake many leaves from either the gold tree nor the silver tree. The front December delivery month saw its open interest decline from 1593 to 1072 reflecting all of the 523 notices sent down. This reduces the open interest as the longs will finally get their metal in due course. The reduction in open interest is 521 contracts which is very close to the 523 delivery notices that were served upon. The estimated volume today was remarkable coming in at 219,245 with no switches. This will be revised upwards tomorrow as they always underestimate volume. The confirmed volume on Friday was a very respectable 152,135 contracts.

    Now for silver:

    The total silver comex open interest also fell by 935 contracts to 129,712 from Friday's reading of 130,647. The front delivery month OI registered today at 483 dropping 46 contracts from Friday reflecting the 50 notices sent down for servicing. The estimated volume today on the comex was an astoundingly high 111,854. The banking cartel threw everything at the longs trying to keep the price from escalating. The confirmed volume on Friday, ie. the day of the raid was also very high at 63,196. So if I feel that 63,196 is high you can just imagine what traders are wondering when they see an estimated volume at 111,854. By the way, that represents 555 million oz of silver or about 1 years production. Makes sense to me!! It looks like the bankers will try another raid tomorrow as the volume supplied today was just too much. The bankers are trapped and they will do just about anything trying to extricate themselves from their massive short positions in both silver and gold.

  29. I would trust Harvey more than the FT (aka establishment's rag). But it seems a bit amateurish by JPM to plant such a lame story. Do they think Bart Chilton will wake up tomorrow, read the story, say "OK, that problem is solved. I'll move on to the next one"? I don't think so.

  30. GG,

    Ted Butler's reading of the COTs is that JPMhas been covering their shorts in a steadily incremental way, and are now doing so in the face of rising prices. They still have a larger short position (many times more than any reasonable position limit will allow them to have).

    While the FT article may be some sort of plant, my suspicionis they are signalling they would like an orderly retreat, as some have put it.

    At some point, however, even the most orderly retreat becomes DISorderly. My feeling is that time is nearer than we think.

  31. This (JPM's announcement) smells like a trap to me.

    Are we getting ready to play the "run up the price and then raise margins in the middle of the day" game again?

  32. What to do with the wealth/maintained purchasing power we gain from PM's??? IMHO.... I think real estate will be a good play after PM's run their course. The National Inflation Association (NIA) at talks alot about the house prices compared to silver now and what that might be after hyperinflation. Where those who own physical gold and silver will be able to purchase real estate for a fraction of their owned gold or silver now. Unfortuneately, China might be in here buying up much of America's soil as well at bargain basement prices. Also unfortuneately, in the interimn... when the neighborhood children are starving because so many families are impoverished because of Hyperinflation, its us who will have to step up. It is a blessing/luck that we all have knowlege enough about PM's and food storage this early in the game when the vast majority of American's still have no clue whatsoever. I see it as coming with alot of responsibility as well. Ultimately though, I hope to see an America that returns to its roots and the constitution after digging out from the coming calamity. Like I say, these are just my humble opinions.... Of course, many believe this is all just a prelude to the returing of our Lord and Savior.

  33. What rmcclainxenergy has said is quite true...we will have much to shoulder if in fact we are all blessed enough to come out of this madness somewhat unscathed...first to our families, then to others we love...I try my best now to get folks involved, so many are so psychologically wedded to the dollar that I have run out of energy trying...the future is in our hands.

  34. Gonzo Lira has a good series of articles on Hyperinflation.

    PM's will probably reach their zenith in relative value to other assets, just at the point when the commerce seems the hardest hit.

    You might convert $10,000/oz gold and $1000/oz silver into stock at a PE < 5.

  35. I'm curious to find out what some of you on here are able to purchase Eagles at. I've got 2 shops close to me, one wants $37 for 1 Eagle and 35 for a Maple Leaf. The other wants $33.50 for an Eagle and $36 for a Maple Leaf. What gives? From your experience, what is the best type of silver to buy. I'll be a first time physical buyer tomorrow although I've been following PM's for 2 years. Finally in a position to buy! The less expensive shop will sell me junk silver (dimes, quarters, 50 cent pieces, etc all pre '64) for a multiplier of 21. Are these decent prices as of today's spot? THANK YOU ALL for your good info. I love this site Turd. Thank you.

  36. Turd! JPM lifted their shorts!

  37. AGoldHamster: I read about this a while ago... The reason the Liberty dollar was taken down is because the government was threatened by an "alternate currency" and not because of the Ron Paul silver dollars. It's actually a fascinating story and shows just how far the govt (and Fed) will go to ensure their fiat monopoly:

  38. If you are going to buy land make sure you have good supply of heirloom seeds...

  39. I don't know, folks. This JPM story just doesn't quite pass the smell test. Chilton points out the "40%" story last week, position limits are up for discussion on Thursday and all of a sudden, a story appears that JPM is out of the silver manipulation game. Hmmmm, very fishy. My gut tells me it's BS.

  40. Turd,

    I don't think they are saying they are OUT of the shorting business. If they are, we KNOW for a fact from the COT reports that they ARE NOT.

    JPMs short position is less; they have gotten rid of the low hanging fruit if you will, and perhaps 1/3 of their short position is gone -- once again from COT calculations.

    But llok at what even that has done to price.

    No, they are screwed. And I see this article as the first of many political spin manuevers they will be putting up with increasing frequency as the rubber hits the road ie Thursday's meeting and the ensuing haggling over exactly what sort of new limits and WHEN to implement them blah blah blah.

    It's gonna be a bit of a dance; they will TRY to manage an orderly retreat.

    But make no mistake, prices are going higher. And in the end, that will NOT be the end of the world.

    It will just make some of the KNOWING FEW (present company) VERY happy.

    Remember, EVEN NOW, only a SMALL percentage of people are clued into how significant this is. We are quite fortunate.

  41. Matt and Jamie:
    I buy my gold and silver rounds, junk, or bars online. Right now you can get those rounds you mentioned for about $31 each. I like Provident Metals and they always ship within a few days. Some say Gainesville is the best but I have not tried them personally. Some say others are their favorites. There should be a good dozen sellers that are good. I personally avoid NW Territorial Mint as they took months to ship which I do not think is worth it even if they are pennies cheaper but some folks like them. My local dealers are convenient but quite a bit more expensive than the online sellers too. I avoid buying dated or collectors coins as they have a higher premium and you want to get as much silver for the $ as possible. Pre-1964 junk silver is actually a good way to go. The 1 oz rounds are nice with a bit of a premium though. I would do some of both.

  42. Turd and all,

    If JPM is shorting the silver market using SLV, what would happen if SLV was uncovered to be a sham? Like any other stock which was considered to be a sham (like Enron, Worldcom, etc.) wouldn't the price of SLV plummet (irrespective of the price of the metal), generating a huge windfall for JPM and allowing them to close their shorts at a profit?

    Why couldn't the banks use an implosion of SLV as their nuclear option to get out from under their massive silver shorts in one piece? What am I missing?

  43. I just ordered 100 Eagles. Will I be the unfortunate last buyer? Will prices fall now?

  44. Turd, could I suggest that you put KITCO's USDX chart on the top of your website, below the gold and silver ones. Santa has it on his website, and it's useful.

  45. GG, I must have fooled around for 15 minutes on the Kitco site, trying to find the USDX chart that Santa has. Never could find it so I said "screw it". If you can tell me how to do it, I'll gladly put it on here. I'd like to have it.

  46. Tried Gainsville several times over the last two days, using two separate cedit cards. Both were disallowed. So I went back to Apmex - no problem. Sixty US Eagles @ $33.33 each.

    Gainsville would have saved me a few dollars. But Apmex just works better.

  47. Matt and Jamie:
    Correction. Based on the silver spot price now, the cost for those rounds online run about $33 not $31. Those are for new ones. If your local dealer is selling for $33.50, that's a good price in my opinion. He may have bought them when the spot price was lower and is willing to sell them and not not keep marking them up as spot goes up. The online dealers USUAL increase/decrease in real time based on the spot price regardless of when they brought them into their inventory. That makes me want to go work a deal out with my local sellers to see if he will sell older inventory cheaper.

  48. Turd, I have just looked everywhere on Kitco for the free USDX chart, but can't see it. Can anyone more savvy than me help out HRH Turd?

  49. Kitco USDX Chart:

  50. How to order Silver Keiser, anyone?

  51. or

  52. GG and Turd, this may be the chart you are looking for:

  53. bleh..sorry...didnt refresh my screen. KrazyNomad got it.

  54. @titaniumvt
    I also think they have something in store, something that "solves the problem" at some time.
    A delegation of the short problem to SLV in exchange for SLV assets would look like a good solution to me.

    For sure there will be a pawn sacrifice, the question is now, who's the pawn?

    Besides SLV it could also be the Evil Speculators (that not only go long food, but also pm that are direly needed by the US economy to finally reach sustainable growth and generate mass employment).

    Besides, the reduction of shorts is a reduction at the COMEX, and nothing else. But it's not like this was the last place on earth where you could short/lease/whatever metals.

  55. Drawing a straight line through the silver chart since start of Sep-2010, anyone agree this is linear? Avg. $3/month gain. Price on 8th January 2011 = $32.50 ? Too simple probably, but interesting.

  56. From about 4 hours ago

    Sources tell me that JPM has INCREASED their silver short position in the OTC derivatives market. Their recent comments suggesting otherwise are just more lies. Once the price breaks past $32.60, JPM will be forced to REALLY start covering shorts and we’ll see a spike upward
    December 14th, 2010 by maxkeiser
    RespondJPM’s recent comments regarding their short position is more wishful thinking than fact. They would love not to be short as much silver as they are but unfortunately, they did not count on a global army of physical buyers causing shortages. A massive squeeze is on – and they have nowhere to hide, save liquidating their balance sheet and papering over their problems with another trillion dollar bailout from the Fed, which of course will only drive the price to explosive new highs!!!!!

  57. Nice!

  58. Wow what a surprise... Up fairly strongly all night and now down half a percent after NY open. Makes sense... JP Morgan admits they're screwed and there's a sell off in silver. Bullshit.

  59. Buy all pullbacks. Big picture all that matters now.

  60. Sorry all. It was my fault. I bought some eagles at the top last night.

  61. RoCoach, you mean the top for yesterday?

  62. When it comes down to it, they will save the bond market at the expense of equities, because without the bond market, there is no market.

    TTBOMK, JPM will crash if interest rates rise because of massive interest rate swap exposure. That can't happen if they are to preserve the capital structure of the big banks as they are all tightly interconnected.

    That also means the dollar will rally, which is the only thing left that will cause PMs to go down.

    I'm expecting a 9-12% correction in gold (which is pretty typical recently if you check the charts) before the push up to 1500 and far, far beyond.

  63. bought some more physical silver today. Is it me or every time I make a purchase, it feels even better than the previous purchase. As many have recommended, it's all about the ounces.

    I listened in on some of the Cheviot Conference & like what Keiser said in the Q&A - to those switching to metals & getting rid of physical - it's not recommended you do it all in one shot as one might have a panic attack - but to do it gradually using a reasonable and patient plan. I personally can't wait to be mostly paper free & am realistic that the physical price will likely be much higher when the transition is mostly complete.

  64. error - "getting rid of physical" = "getting rid of paper" ughh

  65. eToro is the best forex broker for beginner and pro traders.