Sunday, December 12, 2010

Get Your Gameface On

Well, its Sunday evening in the US and it's time to get ready for what promises to be another wild week in gold and silver. First up, I thought we'd re-visit last Sunday at about this time. In preparing for last week, I posted this:
    "On to the PMs. Everything, and I mean everything, looks great for the PMs as we head into this week. From the charts to the fundos to the chatter, it appears to be "all systems go" for liftoff. Therefore, you should be nervous. It is in times like these when the EE often counter attacks. Just look back four weeks ago for your latest example. The Fed announced QE2 on 11/3 and, by 11/9, the dollar was diving and the PMs were soaring with no conceivable end in sight. Well, we all remember what happened next. Out of the blue, we get margin requirement increases and a sharp correction in price. Silver shed $4.30 in a week and gold lost $95! None of the fundos changed, however, and we've since recovered. If you don't think that the EE has more tricks up their collective sleeves, you're living in FantasyLand. They may hit us again this week or they may not but hit us again they most certainly will. Be cautious and you'll make a lot of money in this market. Get greedy and you'll be wiped out faster than the free booze at the company Christmas party."
Unfortunately, The Turd was right again. No real genius in this call, just experience. From the EE's point of view, when all systems are go for a big rise, they have to attack. What other option do they have? Sit back, do nothing and watch gold rise $100? Not a chance. If you learn anything from Ole Turd I hope its this...and never forget it.

As we prepare for this week, here's some light reading and listening for you. First up, a link from KWN where Eric interviews Jean-Marie Eveillard of First Eagle. (Recall that First Eagle Gold Fund is my favorite open-end gold fund.) Jean-Marie is a very experienced and pragmatic investor but even he, when pressed by Eric, acknowledges that things are dicey and that we may be at the end of the current, global financial system. It's only about 10 minutes long so its worth your time to listen:

Next, this little nugget is about three weeks old. Several folks have posted it here recently in the comments section of my notes. If you haven't listened yet, I encourage you to do so now:

There will certainly be a lot of noise this week about JPM and their massive short silver position, especially as we head into the crucial CFTC hearing on Thursday. For some perspective on the jam that JPM is in, read this:

One more, just for fun. This article provides some historical context to current metals prices but the real laughs will strike you as you review all the various sell-side analyst opinions at the bottom. What a joke! Can you believe these people actually get paid for printing this nonsense? Enjoy:

OK, on to this week. As I've typed, the metals have opened for trading on the Globex and both have opened flat. Not exciting but not down $10, either. If a significant trend develops this evening, I may check back in with more thoughts. In the absence of any fireworks, I'll probably just wait until Monday morning to update.  

Have a great evening. TF


  1. Turd, thank you again for your unequivocal views.

    I've been picking up a theme among blog commentators recently, along the lines of this:
    "Sure, we all accept that JPM, etc have been under govt orders to suppress PM prices. But maybe they've lost control of silver. They could just let silver go and let it reach its fair market value. As long as they continue to keep a lid on gold's price rise ("just" 20% annual price increases), then the public will not get too excited and there will be no gold-buying/$-crushing panic".

    What do you think of this view? Is it feasible that we see a big contraction in the g/s ratio all through silver price increases, whilst gold just continues its slow rise?

  2. same here Turd. What is your view on what seems to be some divergence in the various commodities. (I see you concentrate on a select few, Why is that?)From ZH, you can see I have an affinity for physical silver, but have been expanding reading base online. One piece I saw over at FOFOA suggested a switcharoo from silver to gold, hence ratio may be something to pay attention to more. Thoughts? (Army v Navy was a pretty good competition)

  3. GG - I was thinking the same thing. It looks as though silver may be the first metal the EE loses control over - maybe then the g/s ratio will break through the historic 1:16 ratio, maybe even break 1:10. Right now I'm putting almost everything into silver with an eye on trading a significant amount of it for gold when the ratio closes near historic levels.

    BTW great blog! I enjoy your insights.

  4. GG, I agree w/ you. Given the small "market cap" of silver, it's price could go quite high and the world wouldn't end. I think the one figure to watch is the silver:gold ratio -- it's goin down faster than an East European hooker, as they say. well, some people say that.

  5. I think all four of you are on the money.
    The changing mindset regarding silver is due to the emergence of our BoS back in August. When there seems to be such a concerted effort to aggressively drive the price of silver higher, even the blind take notice.
    The G:S will continue to contract if only because silver will continue to register gains that outpace gold. As mentioned Friday, you can rightly expect gold to be around $1750 at this time next year. What might silver be? 45? At that price we still have a ration of 39. At $60 silver, we'd still be at 29!
    Another example of why shows like Fast Money are such a joke. Pete Najarian certainly knows more about implied volatility than I but for him to suggest that silver should be aggressively shorted is ludicrous at best, fraudulent and negligent at worst.

  6. turdster, i really enjoy reading your blog. i'm new to it, only been here about a week. i'm not a major investor and i know next to nothing about it, BUT i'm a life-long on-and-off coin enthusiast and i pay attention to metals. i was able to get a small gob of the silver keisers that went on sale yesterday. just trying to do my part in helping crash the banksters, if it really works that way. keep up the good work!

  7. $45 silver seems very conservative for this time next year...none of us can predict the future, but all things considered I would hope to see silver at $85+...just saying.

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  9. The PTB letting silver go for a moonshot whilst keeping a lid on gold? Damn, why didn't I think of that? Makes a lot of sense, since a dramatic increase in gold (and there are many more eyes on gold than silver) would signal to one and all that fiat is crap. But silver? Who (present company excepted) cares about silver? A rising price would have the same impact on a lot of folk in much the same way that a rising price in seaweed or radishes would. Thanks, GG, for bringing that thought to the board.

  10. TF,
    The fast monkey show is a joke. I'd like to slap those assholes for all the grief they cause.

    They are what is wrong with the Wall Street. They know it's all extend and pretend. They know that the Fed is a private corporation who serves no one except their masters.

    But they bootlick without shame. For them it's all about fucking the little guy and taking his money.

    A prostitute is an honest women. She gives service for an honest exchange of money.
    It's not love its sex for money. She tells you the deal upfront.

    They are not whores they are con artists.
    A grifter will lie, cheat and steal without regard to the morality of their actions.

    I am not a religious person however I have read the bible as it relates to Jesus And Buddhas teachings.

    Jesus had no problem with whores and prostitutes. He hung with them and gave them his counsel. They had a soul worth something.

    However he became enraged at the "Money Lenders" and their thievery The were con men without a soul.

    Jesus commited violence. Because they were pure evil.

    We are dealing with the "money lenders" or banksters.

    So we must also remember that they have no soul. They are the New World Order or the EE as you have said.

    Pete Najarian is con man who has sold his soul for a few coins. He will tell you to short silver as his master is JPM andhis con buddies. Hell he might be long personally.

    Its time for us to throw the tables of the money lenders into the street. And cast out the money lenders.

    Long live honesty and love for your fellow man.

    Buddha was right. He said.

    "If you do not look after each other, who will look after you? Whoever serves the sick and suffering, serves me.

    He also said "Nothing ever happens to us unless we deserves it. We receive exactly what we earn, whether it is good or bad. We are the way we are now due to the things we have done in the past. Our thoughts and actions determine the kind of life we can have. If we do good things, in the future good things will happen to us. If we do bad things, in the future bad things will happen to us. Every moment we create new karma by what we say, do, and think. If we understand this, we do not need to fear karma. It becomes our friend. It teaches us to create a bright future.
    The Buddha said,

    "The kind of seed sown
    Will produce that kind of fruit.
    Those who do good will reap good results.
    Those who do evil will reap evil results.
    If you carefully plant a good seed,
    You will joyfully gather good fruit."

    So I say we we plant a seed.

    A seed of silver and gold. And joyfully gather good fruit.

    And share our fruit with those that are needy. And share our love.

  11. Heat, that is fantastic stuff! A great, new perspective to this board.
    Please don't be stranger. Visit often.

  12. Anyone know when we will know if China raised interest rates? They are already trading in Asia Monday AM. If they have not raised rates, or even if they do but later this year, that will have implications for PMs this week, and some options expire Friday.

  13. Right on, Heat! The only time Jesus ever kicked ass was to put the boots to the money changers (if even the Prince of Peace was pissed at the money changers, what does that say about them?). Your comments will be saved by me.

  14. I must add that I have practiced both paths like many men.

    I am a rough man who has visited death and war upon others for money.

    And I have adopted a orphan girl from Guatemala who is now my daughter and sister to my biological daughter.

    She has healed me from my past and she gives me life and love.

    We can change our path if we so desire.

    I live this every day. Every day I learn to accept what I cannot change and change what I cannot accept.

    I will stand by you in this fight.
    For I cannot accept the EE.

    I will plant a seed where ever I go.
    And we will win.

    Someone once said that Karma is a funny thing. It has a way of sneaking up on you.

    I suspect the EE will be visited by Karma at a moment of it's choosing.

    We are closer than we know to winning.
    And Karma may be right around the bend in the river.

  15. Heat has out philosophized our board. Thank you Heat.

  16. Thank you my brothers and sisters.

    I am humbled and honored to be in presence of true Patriots. I leave you tonight with this.
    If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen." - Speech at the Philadelphia State House, August 1, 1776

    Samuel Adams

  17. I think we are truly witnessing a battle of historic proportions. I am referring to the JP Morgue vs BoS or EE vs. BoS + PM bugs + Contrarians + Turdians (lol). It looks like JP Morgue has its balls in the vice grip tight (increase in silver price from August up till present, $19-29).
    If the rumors are true and the BoS are really accumulating physical instead of simply going paper long, then they cannot be easily spooked by EE attacks and will continue to buy. In addition, Max Keiser's campaign is helping a bunch.
    Turd, do you have any info on frequency of EE attacks? Do they happen daily? I think we maybe able to tell the relative tightness of the grip by how desperate they become with their sales and thus time our positions better.

  18. There could be a temporary taking down on Mon or Tue as there's an FOMC meeting on Tuesday. They usually do that to avoid being embarrassed by gold's price surging while having an important fiat meeting.

  19. Guy's, I cant stay silent on this one. Heat has some valid points, but regarding the reason Jesus trashed the temple was not because the money lenders were cheating the people. It was solely because the Pharisees in charge of the temple had turned God's house into a business. They allowed these money changers to turn the Holy ground into a manipulative business practice. The people were to bring sacrifices to the temple. The could have purchased these sacrifices from outside of the city gates and then bring them to the temple, but instead, the Priests decided to use Holy ground to do these things. Jesus DID in fact hang with the money men....Don't forget that Matthew WAS a tax collector. I apologize for seemingly making a thing about this, but I hold the teachings of Jesus very close to my heart..and well, to see them being misinterpreted just kinda gets me.

    Heat's point is simple...these are evil people we are all dealing doubt. We MUST take care of each other as Buddha has mentioned. Golden onto others as you would have them do onto you. So Buy Gold, Silver, Food, etc! Hope no offense was taken by my comments.

  20. Hi Turd, Great blog, I've been lurking since the beginning. I was just reading the latest missive from Harvey Organ where he speculates on the size of the EE short position.
    It struck me that the BoS could well be the JP Morgue. After all those guys are not stupid and they will be trying as hard as possible to reduce that huge short position before it kills them. Therefore they sell a few tonnes in the low volume period and buy back a few 10s of tonnes in the regular market. That's what I'd do.
    Any thoughts?

  21. ...

    As soon as the sharks finish their feeding frenzy on the euro, the dollar will come up next in their crosshairs. It looks to me as if the minor euro nations do not offer large enough opportunities for the destroyers of wealth that Greece did.

    Mark my words when I say that gold will reach for the stratosphere, trading at $1,650 and above sooner than many people think.

    Being in gold and avoiding the US dollar no longer just constitutes a trading situation but a financial survival exercise.

    Stay the course and win. Vacillate and you join the sheeple.


    Jim Sinclair

  22. Silver moving nicely this morning. Time to put in layered bids, for when the EE shows up.

  23. Turd signal!

    USDX down to 79.90 last

  24. And Chinese NOT raising rates, at least for now:

  25. Ben & Heat ...I appreciate being here to read both your points. Heat made a point...Ben further clarified. Disclosure: I am long silver, miners and the gospel of Christ. :]

    Silver UP this AM!

  26. Thanks, ben, for clearing that point up (no offense intended on my part).

    Silver just punched through 2950, and if I were a betting man, which I am...

  27. Put a comment on here earlier,seems to disappered into the ether.Anybody any idea ?

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

  28. minor resistance at 29.60...

  29. dd.. I first read your comment as 'miner' resistance at $29.60. HA! ...glad it's minor resistance and not miner resistance.


  30. Thank Ben,

    I agree with your historical view. As for me I am not a religious person.

    I let the great thinkers and prophets speak to me directly. Some view Jesus teaching as a guide. Others believe literally. That is the beauty and strength of their teaching.

    How rich their teachings are as to have influence thousands of years later.

    I respect your view and honor it.

    Jesus speaks to my heart as Buddha speaks to my mind.

    But Sam Adams speaks to my soul.

    "No people will tamely surrender their Liberties, nor can any be easily subdued, when knowledge is diffused and Virtue is preserved. On the Contrary, when People are universally ignorant, and debauched in their Manners, they will sink under their own weight without the Aid of foreign Invaders." - Letter to James Warren, November 4, 1775

  31. Selfish: EE attacks are designed to frighten weak hands in to selling, thereby creating an avalanche. Its the same tactic central banks have use for years to manipulate currencies. There's a conicidence, hmmm???
    When we collectively stop being afraid of The Wicked Witch, she will lose her power.

    Ben: You're right. Matthew was saved, too. "Zeal for my Father's house consumes me.:

    Fox: I don't think the EE have given up yet. All indications are that the BoS are deep-pocketed foreign entities.

    dd: Santa is the Daddy of The Mack.

  32. a little sticky around 29.60...let's see if we punch higher..