Wednesday, December 15, 2010

Buck Me? Buck You!

I thought it appropriate to add an update on the USDX. The dollar rally today is clearly providing no help to the struggling PM and equity markets. However, the USDX continues to be in the same range we detailed last Friday so today's rally must be kept in perspective. See below:
Even Santa has seemingly caught on to my theme that the eurozone "crisis" is being trumped up by the financial press and ratings agencies as a way to provide much needed support for the dollar. The rallies of each of the last two Tuesdays were instigated by new, trumped-up fears of eurozone collapse. The timing is all too convenient to be a coincidence. Here's Santa's perspective:


My Dear Friends,
All you are looking at is the mirror image event in the US dollar as a product of Mrs. Merkel’s "Open Mouth" euro intervention as a part of the ongoing currency war and profit making short play. Hong Kong equity traders got excited over Mrs. Merkel’s lip service and sold off, putting secondary pressure on gold.
It means very little as gold is going to $1650 and beyond.
Respectfully,
Jim
And...
Jim Sinclair’s Commentary
This is more of the standard operating process in the euro manipulation.
These fellows take no risk, they are not great traders. The entire show is a set up.
Euro slips as Moody’s warns on Spain downgrade 

Stand fast, my friends. The pressure is building on you to sell in this environment. Don't let them manipulate you. Remember, the best strategy in PMs is to lighten when things look great and add when things look scary. Now is when you should be adding. Again, until we close below $1372, there is nothing to be worried about. 
Lastly, "Poseidon's Anchor" would predict that we are about to see another waterfall leg down in bond prices.  Between now and tomorrow. 
http://tfmetalsreport.blogspot.com/2010/12/two-important-updates.html
If it doesn't materialize by Friday, the worst may be over, for now, and the dollar will likely roll over. Keep an eye on those long bond futures.
More later.

44 comments:

  1. This is a Dead Dollar bounce, nothing more. I have resistance at 80.5, so we agree there. It could top tick that, and then what is holding the dollar up? I don't know either.....

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  2. The trick is getting old: Every time Dollar is in trouble they throw PIIGS out to divert the attention. It's Greece, Ireland, Portugal, Spain, Belgium, on and on and on. At some point they'd run out of PIIGS then the bloodbath in Dollar will be non-stopping.

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  3. Rui, I think it's just an "orderly" devaluation of both the Euro and the Dollar. When one gets hammered "enough", they switch to the other for several weeks. That way the public jjust sees them see-sawing back and forth instead of seeing that each is losing purchasing power when viewed over 3, 6 or 12m periods.

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  4. @Hendrix Ancient Chinese Secret! ;)

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  5. http://www.youtube.com/watch?v=BJP5f-fsHrs

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  6. "A Silver $ a day" keeps the Banksters away.Don,t worry about Europe we won,t run out of Crisis,s we have the EU with our Low Grade Bank Clerk at the helm,full steam ahead,get those presses rolling,more countries to bankrupt.

    Meanwhile in Honest City,USA,

    "Dead $ Walking,Dead $ crawling,oh dear the $ just died .... hush,keep it quiet....just get Bernank & Blythe on the phone rapid and don,t ever let Julian Assange get a sniff of this"

    Time for International Rescue and that Turd Character.

    Be Happy,buy Silver,take down a bank,its your patriotic duty.

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  7. Is good ol Bart giving us a hint of what will happen tomorrow:

    http://www.gfsnews.com/article/620/1/Chilton_urges_early_CFTC_rules_rollout

    Commissioner Bart Chilton told a meeting on Wednesday of the Americans for Financial Reform, a coalition of 250 national and regional organisations, that he wanted his agency to act quickly to curb speculative position limits, in commodities especially.

    "Early implementation deadline is important," he said. "Commercial businesses rely upon these markets to hedge their risks.

    "They are having an increasingly difficult time doing so, in part I believe, because of large position concentrations of speculators."

    This article was published TODAY. The Wednesday referenced is TODAY.

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  8. Nice catch, Cris. And it could serve as a basis for a silver rally tomorrow.

    But for some reason I am skeptical that JPM will capitulate.

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  9. Right in cue, the long bond has once again fallen off a cliff.
    Don't doubt The Anchor!

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  10. I've been observing TLT closely for a while, and this sell-off must have FED on the edge, which is why they came out attacking PIIGS again. Some desperate prop-up is needed but it looks like investors have ignored this temporary strength in Dollar to concentrate on dumping the TBonds.

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  11. Good stuff on the bond market from Trader Dan today:
    http://jsmineset.com/2010/12/15/hourly-action-in-gold-from-trader-dan-380/

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  12. Cris - that's a very informative article. Chilton is certainly smart enough to know that what he says the day before is a telegraph to those paying attention. Thanks for the link.

    JB - I don't think they will either, but having it discussed in a public meeting will create opportunities for things to happen that are not always predictable. In the end, silver will be set free.

    Gotta love the Turd's blog!

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  13. Some more details from Chilton at Bloomberg:
    http://www.bloomberg.com/news/2010-12-14/cftc-should-resist-lobbying-on-speculation-limits-chilton-says.html

    Regulators could also grandfather existing swaps and start the implementation of any proposed limits as of the enactment day of the new rules, Chilton said in his prepared remarks. The CFTC could identify the largest long and short positions in the markets and require that netted futures, options and economically equivalent swap positions be below “current accountability levels” for each commodity, he said.
    http://www.bloomberg.com/news/2010-12-15/cftc-urged-to-curb-commodity-speculation-as-wall-street-resists.html

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  14. Hey Turd exactly what charts and symbols do you use to monitor the 10 and 30 year bonds? Thanks bud

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  15. Gensler and Chilton testified today before a House subcommitte with oversight:

    http://www.reuters.com/article/idUSTRE6BE4OX20101215

    One thing that caught my eye in this article was this statement attributed to Gensler:

    CFTC Chairman Gary Gensler told a House Agriculture subcommittee that a final rule would be issued "as soon as we can sort out" the public comments on the proposal, which would be open to comment for 60 days. The Agriculture Committee has jurisdiction over CFTC.

    "We'll not finalize it by the statutory date," said Gensler.


    Now hear me out, because this is a point mede earlier today by Ted Butler in his newsletter, which I did not quite understand at the time.

    Butler argued that it would be important to see how the CFTC responded to, or if they even acknowledged, the huge outpouring of public comments with respect to silver. Of all the public comments made, references to silver were in over 90%.

    Butler argued that if the CFTC solicited public comment, it would then be important to see if the CFTC responded to the sentiment voiced in those comments.

    Now we hear Gensler saying that he WANTS the public to be able to comment for 60 DAYS and that is why they will not meet the mid-January deadline.

    Something tells me Gensler (and Chilton) is trying to bolster his argument by pointing to the PEOPLE and saying, this is what THE PEOPLE have asked for. That gives him cover when dealing with lobbyists and with repubs in Congress.

    Sort of like we have all seen at work or in school -- BUILD A PAPER TRAIL.

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  16. I still stick with it - I have still several warning flags popping.
    And the boyz sometimes tend to do their moves overnight in Asia.
    And it's not a matter of the EE - but of currencies, charts and again increasing risk aversion.
    I'm short already since half the day - and I don't think that we have seen the lows already for this week. And I think we could see a 2-300 move in indices not far from here.
    Whatever that means for PMs.

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  17. I don't get it, seems like they are buying dollars like crazy with their fresh dollars earned by selling treasuries.
    Is it possible to buy leveraged dollars with standard dollars?
    If not, where do these people put their money?

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  18. Turd,

    I just wanted to thank you (again) for your time and effort! I'm about 20 months into serious PM investment through my Retirement Fund. I retired early with some health issues (I'm OK), pulled out of my advisor directed portfolio, and began to build a PM self directed investment approach. It is my future, and I personally do not have a support group to go to "when things get rough," like this week... it can be lonely fighting the EE (love that)on your own...lol!

    Thanks to you (and Mrs Turd), your blog, and the growing community... I now have that support group.

    Thanks... SRV

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  19. The announcement of position limits was what this CFTC hearing was supposed to be about, whatever the phase in period might be.

    Now we have an admission by Gensler that the final rule will not be issued until some time after the deadline specified by law when public comments have been sorted out.

    While Chilton is still arguing against delay, Gensler has capitulated.

    So, it will be a lot of talk and no limits - victory for the EE.

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  20. On the war front...those Silver Keiser's are now all gone. Even those 1/10 oz coins that nobody seemed interested in.

    http://www.silverkeiser.net/

    171,250 oz gone in 5 days.

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  21. I could almost hear the Chinese BOS partying at LME now.

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  22. MAJOR takedown in progress! Perhaps ahead of tomorrow's big announcement or perhaps just simply responding to the dollars short term rise.

    I'm following your advice from this morning Turd...not getting too worked up on the lows ; )

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  23. Mentioning Support Groups,this is one of the best I know.

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  24. Those Silver Keiser's did not last long

    They should strike a "bury Blythe" collection

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  25. Turd, wouldn't you think the EE would be covering shorts and supporting the price right now?

    Price dips like these only hasten their doomsday.

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  26. • An Associated Press report that "Iraq authorities have obtained confessions from captured insurgents who claim al-Qaida is planning suicide attacks in the United States and Europe during the Christmas season"....this news likely hurt the markets in the last hour.
    • A senior U.S. intelligence official confirmed that the threat was credible.

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  27. @CO_Dan I think to Fed a bigger issue is that investors could exit the bond market and rush straight into the PMs, which is why they order EE to front-raid the PMs to scare them away. They used the same tactic in 2008 and worked for them. I don't think it will this time around as KWN revealed a whole pack of China dragons are waiting at LME ready to devour any affordable metals they dare send down.

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  28. Major lesson learned (again):

    When in doubt, go to the PRIMARY DATA.

    To wit, here is the TRANSCRIPT of what Bart Chilton said today:

    http://www.mondovisione.com/index.cfm?section=news&action=detail&id=95034

    Note, this is NOT what some reporter quoted either in or out of context.

    Here is the section that struck me:

    "Furthermore, there are ways we can get the job done. For example, we could implement spot month position limits now, and then shortly thereafter move to the all-month limits. We could grandfather existing swaps and start implementation of any proposed limits only as of the date of enactment of our new rules. There is also my current favorite which would be to use our authority to identify the largest longs and shorts listed in our Commitments of Traders reports, issue weekly special calls to each of these traders for their swaps data and require that netted futures, options and economically-equivalent swaps positions are at or below current accountability levels for each commodity. We could also establish other levels. For example, I think the idea of 5000 crude contracts, which Delta Airlines has suggested, and 1500 silver contracts which hundreds of individuals have suggested are levels we should ask questions about as part of our proposal."


    FOR EMPHASIS, HERE IS THAT LAST BIT AGAIN, IN CHILTON'S OWN WORDS:

    I think the idea of 5000 crude contracts, which Delta Airlines has suggested, and 1500 silver contracts which hundreds of individuals have suggested are levels we should ask questions about as part of our proposal.


    That is VERY encouraging to me. 1500 contracts is the "1% solution" offered by Ted Butler and referenced extensively in the public comments.

    You guys want to change things.

    Encourage ANYBODY AND EVERYBODY you see, speak with, blog with, and come in contact with, to contact not just Chilton, but every Commissioner, about how important this is.

    They want public comments. Fine. We'll give it to them. They won't know what hit them in 60 days. Can you say "viral on the Internet".

    http://news.silverseek.com/SilverSeek/1284471998.php

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  29. Wow Chris - that is great DD work! Thanks. I can go to work for the night now. Tomorrow's meeting should be very interesting.

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  30. Thanks, Rui, that makes sense!

    Well, at least your explanation makes sense. I'm not sure today's beat-down does.

    I'll bet Asia brings us back to $29.25 tonight!

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  31. "An Associated Press report that 'Iraq authorities have obtained confessions from captured insurgents who claim al-Qaida is planning suicide attacks in the United States and Europe during the Christmas season'"

    Funniest thing I've heard in a long time.

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  32. You are right, Cris, what Chilton is saying is encouraging, and he seems to want to do the right thing and make it happen according to the spirit and intent of the law.

    But Gensler is the chairman, and he is saying it's not going to happen by the January deadline, we need to read letters, etc.

    The law is very specific and clear about that deadline for metals and there is no reason to miss it except to circumvent the law because certain parties do not wish to honor it. It is easy enough to decide upon a limit, and announce a time frame for its implementation. I think Ted Butler said something to this effect.

    The purpose of missing the deadline is to let JPMorgan off the hook, however much talk about future actions they fill the air with. The excuses do not hold water.

    If they disregard this January deadline, they are violating a black and white provision of this law, and I very much doubt they will ever honor it after that.

    Gensler's honor is on the line with this one, and the preliminary indication is that he has been gotten to.

    We will see tomorrow, and then read what Ted Butler has to say about it, but this does not look good at all to me.

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  33. JB,

    Gotta disagree with you bud.

    I think they need our help.

    I think they need to build a paper trail that they can show TPTB in Congress.

    They are LITERALLY fighting against billionaires.

    Let's see what happens tomorrow. It is a little premature to say they have disregarded anything yet.

    "Light is the best disinfectant". They will be speaking about this for the first time IN PUBLIC tomorrow. When people are in front of cameras and are ON RECORD, strange things can happen.

    Like the truth slipping out.

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  34. JB,

    One other thing:

    they can address silver specifically if they so choose.

    Another direct quote from Chilton:

    There is also my current favorite which would be to use our authority to identify the largest longs and shorts listed in our Commitments of Traders reports, issue weekly special calls to each of these traders for their swaps data and require that netted futures, options and economically-equivalent swaps positions are at or below current accountability levels for each commodity.

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  35. Blythe is too busy working to post a long post, but would like to say that those of you who are paper traders would be well advised to keep a close eye on the Euro fiasco. Those of you who are long-term physical investors should be enthralled at yet another buying opportunity provided, at least in party, by your friend and benefactor, Blythe.

    Turd, I do hope you think twice about those calls.

    Don't hate me because I'm beautiful.

    TTFN,

    Blyte

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  36. GG,

    I think the link you refer to is from Chilton's speech given 12.08.10 before the meeting last Thursday.

    And as with healthcare reform, any Repub on the committee does not have the authority to unilaterally "consider an easing of statutory deadlines". They would have to formally repeal it, as it now LAW.

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  37. Cris,
    as you said yourself, go to the primary data. Here it is for you, with first part deleted due to word limit on this blog. Please note the date at the top and bottom:

    Testimony before the Subcommittee on General Farm Commodities and Risk Management, U.S. House Agriculture Committee, Washington, D.C.
    Commissioner Bart Chilton
    December 15, 2010

    ...

    Futures prices should, by and large, be based upon the fundamentals of supply and demand. We saw delinked commodity prices in 2008, and some of us are concerned that we see that taking place this year.

    Congress passed the Wall Street Reform and Consumer Protection Act in July. With more than 40 rules to be promulgated by our agency, Congress gave us expedited implementation dates for only nine regulations. For example, speculative position limits for energy and metals are to be implemented within 180 days and for the agricultural complex within 270 days.

    As someone who has been calling for these limits, and who appreciates the work of the Committee in this regard since 2008, the early implementation deadline is important. Large and small agri-businesses and other commercial businesses rely upon these markets to hedge their risks. They are having an increasingly difficult time doing so, in part I believe, because of large position concentrations of speculators. Don't get me wrong, without speculators there isn't a market. We need them. We want them. Too much concentration, however, can be problematic and has the possibility of contorting markets.

    Now today, we see even larger speculative positions than in 2008. In total, there is $149 billion in speculative money in these markets, representing an increase since June of 2008 of 47% in the energy complex, where we have seen a single trader with positions as high as 20%. In the metals markets, we’ve witnessed an increase in speculative contracts of 20% and one silver trader with roughly 40% of the market earlier this year. In the agricultural complex, speculative interests grew by 18% since June of 2008. All of this makes the implementation of position limits as Congress mandated important.

    Some have suggested, however, that we not implement the limits on time because we don't have all the swaps data we need. There is a point there. Congress didn't require that we promulgate the swaps data rule until next July, so how do we come up with a reasonable limit, particularly an aggregate limit, without that data? While this is a worthy point, there are ways to address it. I'd be pleased to explain several options.

    Some, however, inside and outside the agency have suggested we simply find a way around the law's implementation deadline. They suggest, for example, that we "implement" the position limit rule, but not make it "effective" until sometime much later. First, we have no such legal authority to do so. Second, that is exactly the type of dancing on the head of a legal pin Washington-speak that folks in the country are all too tired of—and they should be.

    We shouldn't be about getting around the law. We should be about working to do what we were instructed to do, to protect markets and help consumers. Congress passed the new law. We must implement it in a thoughtful manner. End of story in my book.

    Thank you for the opportunity to be with you. I'd be pleased to try to answer any questions.


    Last Updated: December 15, 2010

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  38. Cris, just a further note (and I'm not trying to be pedantic, just trying to find out if Chilton is varying his message depending on his audience):
    the original link you supplied was Chilton's speech made Dec 14 to the "Americans for Financial Reform" (don't know who they are). The remarks he made today (that don't refer to 1,500 silver contracts) were made to the US House Agriculture Committee.

    All his speeches are here:
    http://www.cftc.gov/PressRoom/SpeechesTestimony/CommissionerBartChilton/index.htm

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  39. Anyway, spot silver and gold market prices are bouncing off their lows, whilst USDX flatlining, so a positive start to the day here in Asia.
    That's enough from me.

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  40. GG,

    I think you are right -- he may be varying his message depending on the audience. Wouldn't fault him for that - prob just trying to not step on Gensler's toes.

    All the more reason to watch tomorrow.

    Visual image: a dozen silver NERDS glued to a computer screen cheering on wonkish debate.

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  41. Cris, our latest postings overlapped. Yes, we are "singing from the same hymn sheet". I already wrote to Bart Chilton, last week. His response was:
    I'm doing all I can.
    Thx
    B

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  42. Fuck em all!

    I just bought another 20 oz -
    10 for the kids in Italy,
    10 for the kids in Greece.

    Look around you, friends - the world is changing at a frenetic pace.

    To da moon, alice!

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  43. thanks for the links & commentary, Cris, GG & JB - the Americans for Financial Reform appear to be:

    "We are a coalition of more than 250 national, state and local groups who have come together to reform the financial industry. Members of our coalition include consumer, civil rights, investor, retiree, community, labor, religious and business groups as well as Nobel prize winning economists."

    http://ourfinancialsecurity.org/about/our-coalition/

    has a facebook/twitter "community" vibe - not my "flavour" but from a cursory once-over they should work well for a concerted email campaign - not seeing any obvious connections to "K Street."

    off to compose a few emails of my own - I don't put much stock in change absent a catastrophe, but at least emails & buying physical are available options for anyone.

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