Friday, December 31, 2010

Once In A Lifetime

First up, another obligatory clip:

Why, you ask? What once-in-a-lifetime event has occurred?
Feb11 gold closed today at $1420. The previous high daily close was $1416.10 on 12/6. With today's close, 12/31/10 goes down in history as marking in gold a new daily, weekly, monthly and annual high. That's the Full Monty! The Superfecta! A New High Extravaganza! The odds of this occurring once in your lifetime are prohibitive. The odds of it happening again are astronomical! Savor this moment and be happy your name isn't Blythe.

Please do not take this as gloating but The Turd has gotten everything to line up almost exactly as planned and forecast. First, we've been watching the March11 USDX all week as an "umbrella" pattern was clearly forming and indicating a drop back to the lows of two weeks ago. As recently as Wednesday, the USDX was at 80.50 and few would have thought a major dip was coming. But the umbrella spoke otherwise! Please review this post from last evening. The USDX chart is the fourth one down:
I predicted 79.20 and the actual low today was 79.02 before consolidating and bouncing to the current level of 79.30 or so.  Next, a close below 79.15 means 78.50 is coming in short order and, after that, 77.50. Of course, the sinking $ only adds further impetus to the PM trade.

Onto the metals. I first pointed out that something was brewing last Friday after I examined the weekly charts. For a refresher, please take a moment to go back and read this. It's very important:
Week 1 of the next breakout in silver was, in fact, this week. Week 1 of the new breakout in gold is next week. All right on schedule. Its almost as if The Turd has become the new Blythe. Planning and controlling anything.
Next up, please review this post, too. This was from last Tuesday:


Silver Near $30

A weakening dollar overnight has given us quite the rally in our precious metals. As noted in the last post, I expect the dollar to explore the lower end of its recent range and this should give additional support to the metals. Again, I'm hoping both metals can trade this week back up toward their most recent intraday highs of 1415-20 and 30.25-50. This will set the stage for the new year blastoff of the next UP leg.

In the short term, I offer you these three charts for some perspective on the silver market. Note that, post-1980, silver has not 
closed above $30. In fact, the closing highs from three weeks ago are 29.74 and 29.78. These are the first levels to watch. As you can imagine, a close above $30 will really get the algo machines humming, particularly if we can finish the week there.

So, anyway, its New Year's Eve. Time to celebrate the close of one year and ring in a new one. As stated before, I expect 2011 to be a rough, mean year, particularly for anyone without a job or otherwise under-employed and/or on public assistance. The greedy, arrogant fools that run our government and banking systems have condemned all of us to a future of misery and loss. All of that is, however, a topic for another day. For now, kick back, relax and maybe even enjoy a few adult beverages. We sit tonight on the cusp of the next major UP move in the precious metals and next week promises to be great fun. Happy New Year!! TF

P.S. This is certainly interesting:


  1. Love your work Turd!

    First Majestic Silver & Great Panther have been on fire. I'm dumbfounded with my gains this year.

  2. HNY Turd and fellow readers. Shout out to agoldhamster.

    TF, lots of creative cross-pollination between here and ZH -- see ScotiaMoccata story and Ted Butler letter from 1989. Thanks for all of your work and insight.

  3. Great!A happy new year to our dearest Turd and fellow readers.Thank you very much Turd for your precious care.

  4. Hey the verification word was .."extedness".
    Iam no natine english speaker but I take it as a sign this will be a pretend and extend year too!

  5. aaah, silver so wants to be 31 today!!

    Happy Hogmanay Turd, to you and yours, and all here. . . a first foot would include an ounce of silver coin'd, some freshly made shortbread, coal for warmth, and a single malt for even more warmth & cheer! may your own rituals provide the good new year wishes well deserved.

    doing some great work here sir, as do the posters in thread, and I've no doubt you will find the upcoming year keeps us all on our toes, it's all baked in now.

    an hour till close, 30.89 - hi ho silver!

  6. A little humility is in order here. I've always found that as soon as I get all fired up as to my "Master of The Universeness", it is shortly followed up with a faceplant to despair. As a precious metals bull for 30 years I've been trained to expect that. Let's hang in there, have a great 2011, but not ever get too cocky. We are going up against the Evil Empire after all, and there's nothing easy about it.

  7. Happy new year to all, and especially TF and AGoldHamster, your advice has been very helpful. I'll be jumping back into trading next week just as soon as you know who launches their inevitable attack (I agree with Barba above---there just hasn't been enough downside this week). Oh, and meanwhile wishing that I'd more money to spend on physical to go with my current stash. Silver coming your way in 2011 should I make it! Best regards to all, Fiend's Brave Victim (on my Girl's google account...)

  8. Happ New Year! Thanks for the good help in 2010!

  9. Yes, Barb and Lindsey, don't ever forget this...from 12/5/10:

    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.

  10. Happy New Year everyone!!!! Thanks Turd for all you do for us. It is truly a treat to read your analysis here and on Zerohedge everyday. I hope next year doesn't turn out quite as bad as we think it will.

    Safe holidays to everyone's family and friends!!


  11. Happy New Year!
    All of us, to our own degrees, are positioned to survive, some thrive, so that we can save ourselves our loved ones and hopefully extend to friends and community. It's a humbling thought.
    But how would you have liked to watch this week unfold and not be posiitoned as yet? Scary thought. Enough of that- SLAINTE!

  12. Happy New Years eve to everyone and I agree with William, truly a pleasure reading everything thing Turd and Zero Hedge writes on a daily basis.

    I just wanted to humor myself and watch fast money this afternoon on CNBC. It's worth watching if you want a good laugh. They had an interview with Peter Schiff (who is in our camp) give his predictions for 2011. Of course Schiff called it spot on with a dwindling dollar value, higher commodity prices, lower real estate prices, higher interest rates etc... and these idiot talking heads on CNBC tried to argue and tell him everything he is saying is wrong. After peter was done with the interview they then continued to bash commodity's are in a "bubble" Ha !

    I want to know what is inside the bubbles theses guys are blowing! Must be some pretty good stuff.

    Anyways, hear is too and in credible ride in 2011!



  13. Turd, while I agree one must always be cautious, I sense a major tear in the fabric of the EE. The witch is indeed subject to water dousing, water imported from the far reaches of Asia and India.
    Funny thing about sharks, too. They have no compunction not attacking their own once blood is in the water.
    Would love to be a fly on the wall In the boardroom of GS this week.

  14. Turd,

    Thanks a lot for your blog and the time it takes from your day to help the PM community. I finally was able, with your's and everyone's help, to successfully buy on the dip last week given the repeated exposure of the Blythe takedowns. If I manage to scrape up any left over cash I will send some your way. Thanks again and Happy New Year to you and the rest of the posters on this blog!

  15. "The odds of this occurring once in your lifetime are prohibitive. The odds of it happening again are astronomical!"

    Won't this happen again next year when Gold and Silver are over $2000 and $50? :)

    Anyway, thanks for the hard work and effort you put into this blog!

  16. nc: The high close for the day, week, month and year would all have to occur on 12/31 again. That's what makes it unlikely. Sorry for the confusion.

  17. Must admit also that I am posting on "da wife's" google account. You see me occasionally on ZH as "Eric the Red".


  18. No sweat, Eric. Glad to have you.
    If you become a regular visitor, you'll quickly notice there are no "masters of the universe" here. Just a bunch of PM watchers/hoarders.
    Happy New Year!

  19. are we buying or waiting for a raid?

  20. Cool. The nice thing here is we are all united in our belief in PM's for whatever our own reasons may be. And united in an interest in doing something to help our families cope with the anticipated troubles ahead. I have no interest in talking politics or religion. PM's are going up because the world is going the way it's going. Big Wheel keeps on turning. Getting into pissing matches about which way the world "aught" to be going is a waste of time(Hello ZH and most blogs). Let's just keep our eye on the ball. You are doing good work Turd, keep it up.


  21. Oh, by the way forgot to mention I totally love Pat's post above:

    "Happy New Year!
    All of us, to our own degrees, are positioned to survive, some thrive, so that we can save ourselves our loved ones and hopefully extend to friends and community. It's a humbling thought.
    But how would you have liked to watch this week unfold and not be posiitoned as yet? Scary thought. Enough of that- SLAINTE!"

    Wish I'd written it myself but must admit I'm at a total loss to decifer "SLAINTE"?? Maybe cuz I'm new here...

    Also, in case anybody is wondering, I got so much physical right now I can hardly sleep because my mattress is so lumpy. But at this year end closing price I think I'll sleep just fine tonight.;)


  22. Sláinte is commonly used as a drinking toast in Ireland, Scotland and the Isle of Man, literally translating as "health" - Wikipedia

  23. Thanks for the translation. It totally fits the evening. New Years Eve and PM highs! Prost! or Skol! usually goes around here, but all in the same spirit!


  24. I've always wanted to visit the Isle of Man. Kind of like the Island of Misfit Toys. Oh well, Slainte to everyone!!!

  25. Silver to 90 usd in 2011.
    Its getting increasing attention and becoming more mainstream,it continues to be the "poor" man gold but also is faster apreciating than gold,higher and rapidly rising price begs attention the way nobody paid attention to palladium when it was "cheap" but pays now that it became "expensive",EE opposition getting less potent,starting to become kind of a "poor" mans REE,a lot of world ecomony problems to continue to push it,LBMA,COMEX etc under increasing strain,..etc..

  26. Mr. Ferguson,
    It is an even fuller Monty than you posted. December 31 marks the actual end of the first decade of the century! So, we had a new daily, weekly, monthly a new annual, and a new DECADE high! I should probably click your 'feed' button for you open and accurate analyses. Happy New Year!

  27. Happy New Year to all!

    I wish you all a happy, healthy and prosperous year.

    I do have to say thanks to Turd and the crew over at Zerohedge for the fianancial advice and insights. You have saved/made lots of money for me this year.

    I would also like to thanks the commentor over at The Belmont Club that first referenced the ZH site back in Feb, I would have never found this treasure-trove of wisdom without the post that they made there.

    Buy wisely my friends, and don't sell until silver IS money!

  28. Happy new year Turd. You have helped me and the wife with our finances more than you can know. 2011 will be interesting indeed. Be safe and keep up the great work.

  29. 2011 is upon us. Be safe. Enjoy. Be ready for Monday.

  30. Dear Turd,
    you haven’t helped me to make money. You are helping me everyday keeping my hope, my instinct to stay alive and wait for better times and fight against the black angst. The web community has become my second life, people I don’t know are giving me more than I ever thought it’s possible. When the dust settles one day we should come together for the Great Party!
    THANK YOU. I’ve never ever “seen” someone like you!
    Happy New Year for you and your loved ones!

  31. Fauvi: We are all in this together. We survived 2010. Together, we can make it through 2011.

  32. Ahh, the Isle of Man. One of my ancestors was the king of the "Isle of Man" during the Scandinavian rule. Halfdan was his name, brother of Ivar! RAAA!! Happy New Year everyone!

  33. THANK YOU TURD and everyone else here.
    Have a good 2011


  34. Dear TF or whom it may concern
    I hope you had a safe and happy
    New Year.
    I could use a little help here to put some facts together and juxtapose this against all we have learned
    The US has no surplus silver. They admit it.(Not like Ft Kox where they still try to maintain a facade).
    The US mines only about 1/5 at 1230 mt(metric tons) of the total annual US consumption
    The US imports over 4000mt of silver.
    Silver has a vital National Strategic purpose in our DoD(defense industry)
    It is not possible to supply the industry and nuismatic with mined and scrap recycled silver.
    At what point will they criminalize/penalize the owning of this metal?(much more so then they do now)
    Are not People just playing into the EE hands by buying it up and then when the time is right they drop an indecent Act upon us or an Executive order and the sheep get not just sheared they also get broiled.
    Can you see a sceniaro(sic) where this could happen?
    Shouldn't we be considering this?

  35. I'm going to stay fully invested in silver in 2011. Every spare $35 I get will buy another Silver Eagle or equivalent. Yes, silver will have ups and downs. If the Dow is 6,000 in 2011, what will silver be? $20? I don't care, really. I don't need to spend any of it in 2011, or 2012, or 2013.. I'm waiting for an undervalued asset that is fast being used up to be accorded a fair valuation in that worthless fiat currency the US dollar. I won't try to trade this, my mettle may be tested on a big downturn in 2011. My resolve will be strong, just keep accumulating.

  36. First coincidence of the New Year
    I am wiping down the controller for the tv(dog got it) inadvertently the channels were changing, when I stopped cleaning The Kevin Costner movie The Untouchables and within one minute the scene when they(gubermint) took their tank like plow and blasted thru the doors of a Alcohol Distributor with Ness rolling to his feet with his badge out Blah Blah this is the Federal Police you are inviolation of the something something Act I will find out what Act he was citing and post it, but that is sooo weird, considering, no? If anyone can grab that scene and post it before i do thank you

  37. It had a couple of names this Act
    Upon reading my previous comment and looking back (remember i wasn't paying real close attention) He might not have rolled to his feet. He could have quickly moved thru the busted delivery doors, I didn't notice that to carefully I guess. This was the only the second time I ever saw the movie and the first time I fell asleep. It might take me awhile but I will get that clip.

  38. Now would be a great time to go back and listen to this Jim Sinclair interview from March of this year. Some of the things he talks about have already taken place and others have yet to take place ($1650 gold by mid-Jan 2011). It's a really high quality listen from one of the masters:

  39. The Turd writes the best PM blog period. The community participation is focused and Turd's follow-up comments and charts are just what the doctor ordered. In particular, the posted market calls over the last month have been superb. Added 30oz ringing out the new year.

    Looks like early January's going to be a PM party! Time to feed the Turd once again.

  40. Wow, I just took a look at premiums on 100 oz silver bars and noticed they've increased significantly lately. Golden Eagle is probably the lowest at $0.80 over spot while Apmex is almost a buck over. About a month ago you could find 100 oz bars at about $0.50 over spot.

  41. Turd,

    I posted this (and a previous post on the same thread) over at Harvey's site. I am kind of shopping for a professional opinion on something I think may have gone under the radar til ... now?

    My second posted hasn't shown up at the time I submitted over here.

    The short version is the following...

    The US is producing ~40MM oz annually, per:

    The US Mint volume for 2010 was basically the full US Annual production:

    Since the US Mint is under order to produce Silver Eagles "in quantities sufficient to meet public demand", then the following change to this law is very material, no?

    Doesn't this provide a huge silver bullion conduit to the COMEX that didn't exist before at the expense of those who are vacuuming up Silver Eagles (e.g. US Citizens like myself)?

    Looking for some solid commentary on why/why not this matters.



  42. Turd,

    My last post for the night. Some random thoughts while I tried to nap before my poker game tonight.

    US Eagles are the primary silver investment of my known demographic (people I know). Specifically monster boxes (I know folks who have bought multiple monster boxes after August) and secondly tubes of random year (again I know multiple people who bought multiple tubes). To me, this has been the primary silver investment conduit for your J6P (if you consider professional computer geeks J6P).

    When this SE source is shut off from the mint, where is J6P going to make their silver purchase from? Can folks like Johnson Matthey really step in and fill the gap the way the US Mint has for J6P?

    To me, it seems, that the cutting off of silver eagles production will channel US production to whomever is standing for delivery at the COMEX and exclude a whole class of customer previously accustomed to 1oz silver purchase with a fat premium on top. And that customer paid a hell of a premium, so I can only assume those that stand for delivery to resell their volume will ask more.

    If those SE customers are deterred, wont this allow the COMEX to significantly increase supply to traders potentially impacting the price (upwards for J6P and negatively for traders)?

    When I started buying silver back in August, I had two requirements, (1) silver atoms by mass and (2) us legal tender. I am 50/50 junk silver and silver eagles. Going forward, I am not sure this would be an option for me.

    I paid a premium for this spread, because I figured at the end of the day if things got rough, a 1998 silver eagle can't be illegal to own (the army gave me one in a re-up letter and its now my money clip), but a similar sized silver 1oz silver bar could be.

    Paranoid at the end there, but stuff to think about.

    I would be mighty proud if you could doll up this content and submit it to ZH as a guest post. I think there is something more to this and it needs the eyes of a broader community.



  43. Crazy Cooter, thank you for that link to another new law to debase our currency even more.
    The next Act will be changing the metallic material to just "material"
    This is so sick. It said it passed unanimously What ever happened to Ron Paul? This is the second recent twisted act that was reported to pass unanimously.
    I use to wonder how the US could get away with coining money that is not G or S.
    Section. 10. No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;

    It appears only the States are restricted from money debasement.

  44. It’s hardly surprising that ways will be found to direct pm's to where they are required.
    Gov's hold the trump card as they can create new law whenever it’s required and always dressed up to look benign when its real purpose is mendacious.

    Do we see a new downside risk?
    Can we buy p.m.’s at all in the future?

    Take it as a good job done by everyone here that recognized the potential for silver and loaded up and further confirmation that p.m.s are going to play an important role in the future.

    Makes selling decisions difficult, in the event of a stock market melt down, that’s if you are actually ahead of it.


  45. Coot: Very interesting stuff, indeed.
    It is important to remember that, in this environment, what seems nefarious probably is. The politicians and the bankers aren't stupid. They know, just like we do, that the banks are all insolvent, the federal government will never be able to honor its debts and commitments and the states/municipalities are being crushed under unsustainable public employee and welfare obligations. They KNOW its over, just like we do. When you see actions like the one you identified, its easy to "write it off" simply because no one else is paying attention. You and we are paying attention, however, which is why we are "on the watchtower".
    Protect yourself and your family. Alert your friends. We can't stop what is coming but we can prepare for it.
    A guy named Ben Sherwood wrote a book called "The Survivors Club".
    In it, he describes the two characteristics that each and every survivor of catastrophe had in common: 1) Faith in God and 2) Preparation.
    When tshtf, the 99% that are unprepared will be lost and panic-stricken. You, me and the rest of us here will be prepared.

  46. I have a plan. :-)

    This is going to be an interesting impact on the COMEX though I think. 40MM new ounces (annually) of supply to help them with their shorts, eh?

    The US Mint by law is required to source metals from US mines *first*. Only when US mines have no supply can they import metals. So the rampant purchases of eagles (gold but more importantly silver) by the US public was very much a drain on supply which hurt the shorts. Public demand for just silver eagles was roughly equal to total US output! That is a hell of a premium to boot.

    Also, I am not a legal professional, so maybe I am totally reading the law wrong, but I think TimmyG is going to hit the brakes on eagles very soon ...

    But, the reason I post at some stupid hour of the morning ...

    I have no idea what annual supply going through the COMEX is ... so hard to say with certainty how much of an impact this is ... it would be very interesting to see a 10 year chart on open interest and/or COMEX delivery volume ... that might provide missing perspective. We should see a pretty big surge in interest/delivery since '08 right? Assuming there is a demand wave, it should be pretty clear if 40MM is going to bring supply/demand into balance or not ...

    Anyway, great blog and always appreciate your thoughts on the markets!


  47. I was thinking maybe somebody on this board could enlighten me as to why so many folks like to pay such a high premium for US Silver Eagles when there are so many other lower premium options out there.

    As for me, I keep a close eye on what the buy back price is at my local shops for a variety of forms of physical. Then when buying I look for the most silver at the smallest spread. It could be Silver Eagles, Engelhards, Johnson Mattheys, A-Marks, Sunshine, No Name Christmas Rounds, 90% Coin, Sterling serving spoons, anything as long as the buy sell spread is as small as possible. The answer for me seldom turns out to be Silver Eagles.

    As a side note I'd like to relay my observations as to eBay premiums on silver for 2010. Early in the year, Silver bullion (even Silver Eagles) could be bought for a reasonable premium. This always requires patience and careful bidding but generally could be done cheaper than online or locally. As the year went by those premiums went crazy high but you could still get 90% coin at a good price. Then 90% coin went crazy but you could still get Sterling flatware at a good price. Now Sterling has gone crazy too, so in my opinion eBay is no longer a viable source for silver and you are better off going elsewhere. Too many crazies on eBay now willing to pay way too much over spot for all kinds of silver.

    Read into that what you will, but there it is.


  48. Eric-not-Barb,

    I'm speaking for myself, but I assume this applies to others who are fairly new to PM investing. I want to use something that is highly recognizable, convertible, and not subject to dispute/assay requirements. In other words, I buy mostly (but not exclusively) Eagles because they are more money-like and I can exchange them in an extreme situation. I do not foresee myself snapping a spoon in half to trade for a llama or pulling out a round with an imprint of Santa Claus for a new transmission.

    I would buy gold/silver for its melt value only when I was fairly confident I had enough gold and silver—recognizable as money—to make it through a wrecked economy. For me, this would be the equivalent of several Monster Boxes in silver and a roll or two of Gold Eagles. Not there yet.

    With the increase in nominal value that most of us are expecting, a spread of $1 vs. $3 is negligible for the kind of insurance it buys.

  49. I guess that cuts right to the chase. How much is for "an exteme situation" and how much is for a trade. I can respect anybody's decision as to what to buy, as long as they understand what it's for. I myself sometimes pay a little more for something just because I think it's "pretty", so I can't throw stones.

    By the way, I don't really recommend buying old sterling spoons. You need to know what you are doing otherwise you'll get ripped off. On the other hand, people worry about all kinds of ways Uncle Sam might screw us all via taxation, confiscation, etc. I don't really see them going after grandma's tea set. For that reason, my little box of spoons would probably be the very last thing I would sell.


  50. If you haven't had a chance to check out Trader Dan's yearly charts, they are up. I especially found the second chart interesting in that we've just broken the 75% Fib level. I also like the CCI chart in that it clearly shows everyone what a sack of blatant lies the Bernanke spewed on 60 minutes.