Saturday, January 8, 2011

An Important Week Looms

It's Saturday afternoon in the U.S. and The Turd is ready for some football. However, it is Saturday, which means its time to review the longer-term charts to search for clues as to the week ahead.
Before we get there though, please take time to visit Eric King's site this weekend. First of all, you must read this:
And this:,_Feds_Hoenig_Correct.html
Then, you absolutely must take the time to listen to this:
And this, paying particular attention to the segment with my buddy, Trader Dan:

Also, be sure to check Harvey's weekend update. Please take time to read it. Pay particular attention to the section that discusses the open interest numbers in silver, the section that discusses the COT numbers and the section that includes Ted Butler's comments on the EE short positions.

OK, on to the charts. Frankly, I struggled for a while trying to determine the order in which to present them to you. To clearly demonstrate my version of cause-and-effect, the sequence matters. With that in mind, here is the almighty dollar, presented in 12-hour form which takes us back to late September 2010:
As all of our commodities, including the PMs, are currently dollar-denominated, you can always expect dollar strength and weakness to be the primary driver of trends. Other factors such as weather (grains) and the EE (PMs) are secondary drivers. Note that the USDX has been in a rather tight, 3-point range for some time now. Also note that strength in the dollar corresponds to general weakness in the following commodity charts. Since we are nearing the top of the range, we can expect the entire commodity sector to improve shortly, provided we don't break out higher through 82.

Next is crude oil. This is very important because the PMs often draw strength or weakness from changes in the price of crude. I personally believe this is foolhardy as the concept is based on the notion that the PMs are simply an inflation hedge, which they are not, and this has been proven over time. However, not everyone sees it this way and thus crude and the PMs are often positively correlated. Its is clear to see that crude needs to stay above $87 otherwise we risk heading back toward $82. A move lower would be good for average, everyday folks but not so good for us PM bulls.
OK, let's look at the grains. These charts look quite similar as they are both benefiting from some wild weather. Droughts some places, floods in others. Either way, both rest upon trend lines and need to move higher next week. As mentioned above, a weaker dollar will help their cause.
Are you getting the feeling that next week is important? Me, too. Wait till you see this next chart. This is 12-hour silver. Do you recall the chart the showed BoS defense lines built about $1.50 apart? They started at $25, then went to $26.50 and then $28. We hoped that $29.50 would be next but it failed this week. That makes $28 hugely significant. It is vital that $28 holds.
Lastly, here's gold. I saved it for last because, frankly, it looks terrible. Well, maybe not terrible. More like lousy or yucky. If you wanted to be pessimistic, you could say there's a head-and shoulders here and the beginning of an "umbrella" like we saw in the USDX the last week of December. Yikes! Let's not be too pessimistic, though, because in the PMs I strongly believe in the fundamentals, not the technicals. Instead, let's just admit that gold is stuck in a $100 range, bordered by 1325 and 1425. In the near term, it is quite obvious that gold needs to hold 1360-65. Two consecutive closes below there will send it to at least 1340 if not the bottom of the range.
OK, that's it. In summation, next week is a big week in determining the short and intermediate trends in the entire PM/commodity complex. The key will be the dollar. It needs to stay below 82.
On a side note, don't think for a minute that TPTB aren't aware of this, too. Do not be surprised if the headlines come Monday or Tuesday are all Euro-negative/$-positive (Spain, Portugal, etc). I firmly believe, as does Santa, that the entire "EU Contagion" story is drummed up and rolled out every time the Fed needs some dollar strength. Let's watch and see if this pattern plays out again.

Time for some football:
New Orleans  27                 NY Jets   24
Seattle             17                 Indy        20

Turd out. More tomorrow.

Saturday Evening Update:
I am deeply saddened and disturbed by the events today in Arizona. I am also deeply troubled by the immediate, political aftermath. No one, other than a close personal friend of the shooter can truly know his motives at this point. Yet, because the primary target was a democrat congresswoman, some, including The Great Douchebag Krugman, are already assigning blame to everyone from Glenn Beck and Rush Limbaugh to Fox News. This absolutely sickens me. Our country is being torn to shreds by agenda-promoting, political hacks whose lack of decency know no bounds.
In 1981, John Hinckley shot Ronald Reagan. In the hours following, I don't recall anyone blaming Tip O'Neill, ABC News and Walter Mondale for inspiring him. Its a good thing no one did because we soon found out that the mentally-ill Hinckley was simply trying to impress a chick. I trust we will soon discover that the shooter in Arizona also suffers from mental illness.
The real loser in all of this are the American people. I truly fear that this will be an "Archduke Ferdinand" moment for civil liberty, freedom and representative government. Beginning tomorrow, will you have more access to your congressman or less? Will your 2nd Amendment rights be more secure or less. Will your voice of political dissent be louder or more muzzled?
Whether or not you reside in The United States of America, you should pray for our country tonight.


  1. "No! I won't pay debt with a currency that's not backed by gold and silver!" -- Jared Loughner, the killer of Gabrielle Giffords

    This is the false flag we've expected for so long

  2. No, he really said that. I'm not joking. I've got to wonder if the media will try to villify Gold & Silver in response to this assassination attempt (or success, maybe).

    On the PMs front, I agree with you that this will be a very interesting week. The KWN interview with Sprott is totally exciting to hear!

  3. 911Truth, I know she isn't dead. Originally it was reported that she was dead. Unfortunately I can't change that comment after it was posted.

  4. Ok. This whole Giffords thing is too weird. What are the chances the shooter/killer of those poor victims would have a reading list like this: "Animal Farm, Brave New World, The Wizard Of OZ, Aesop Fables, The Odyssey, Alice Adventures Into Wonderland, Fahrenheit 451, Peter Pan, To Kill A Mockingbird, We The Living, Phantom Toll Booth, One Flew Over The Cuckoo's Nest, Pulp,Through The Looking Glass, The Communist Manifesto, Siddhartha, The Old Man And The Sea, Gulliver's Travels, Mein Kampf, The Republic, and Meno" .......and specifically point out issues with our currency not being backed by silver/gold.

    This all does not smell right at all. What on earth is going on here?? ....But you can bet the farm that there will be a further attempt to paint all of us who believe in a soundly backed currency as extremeists ..and a danger to the country. ..Something is very wrong here.

  5. If it's any help, PMs are exhibiting type 2 bullish divergence, which of course is not to say that price cannot drift a bit lower from where we are. Just saying.

  6. TF,
    Your Saturday Evening Update re: the Arizona events today was absolutely perfectly stated. You precisely nailed what these events will likely mean in the coming days and weeks to the further eroding of our civil liberties. The powers that be will absolutely not miss this opportunity. Sad sad story...on so many fronts.

  7. Turd, I suspect that truth will be the very last thing uncovered as a result of what happened in Arizona (if it's ever uncovered at all), but I have no doubt that it will be used as a political football to further the agendas of some. Expect more acrimony and finger pointing, not less.

  8. Ok, Krugman's a douche. But can you seriously say, in light of what just happened , you aren't a bit horrified by Palin's target map, as seen here:

    She took it off her site this morning.

  9. "The real loser in all of this are the American people. I truly fear that this will be an "Archduke Ferdinand" moment for civil liberty, freedom and representative government."

    This type of thing will most CERTAINLY be pounced on by TPTB simply to do exactly what you have suggested. This has been in the works for some time now...this is nothing new. Is TRULY sad that lives are being taken/lost in this sick game. We are a nation being more divided than we were during the race riots. The only problem is this is not a race issue, but an idiotic POLITICAL issue. These are the people running our country and spewing BS terrorism rhetoric to put fear into the masses. Disgusting and Pathetic! I fear the 2nd amendment is coming to a close..and it WILL be an ugly close!

  10. I bought gold at the dip at 1353... thought I got a deal. If it breaks lower I will have no regrets - glad to have more buying opportunities.

    I agree with the turd; the fundamentals are there. Can't forget that. The fundamentals are, in fact, likely the cause of of this recent unfortunate violence. Social disintegration is bullish for PMs. All we can do as individuals is protect ourselves.

  11. Darkstar: In light of what has happened, are you equally horrified by this?

    The idiotic, punk kid that did this is, quite obviously, mentally ill. There is no proof, and its doubtful there will ever be any proof, that a stupid map on some politician's website drove him to commit murder.

  12. Poopy: You are correct. In the end, I fear it will be every man for himself.

  13. As far as this bulls-eye issue...Turd your example using the Daily Kos example is right on the money...the bulls-eyes is in the bigger picture, basically meaningless (until!) and then better to have used the European circle with the slash through it, but who knew that a bulls-eye would, when used so innocently and in such a commonplace way in the past become so politically charged, ultimately misused, abused, contentious and negative. It is strange how those things you least expect will come back to haunt you (us) when they had no real negative connotations or impact in the beginning.

  14. Respectfully, I think you're fighting the wrong fight on this one. It matters not who he was or what his politics are, the level of political discourse has taken us down this road, and those that profit from (at the very least) fanning the flames of hate without regard for the potential to incite violence, must take responsibility. The shooter is crazy and is irrelevant… I for one hope those unfortunate souls did not die in vane, and that this tragedy becomes a watershed, ending the vitriol once and for all.

    My sincere condolences to the families of the dead and injured.

  15. Michael he probably has no clue at his age what his politics are...needless to say he committed a heinous act that all of us will ultimately pay for one way or the other for the rest of our lives. I live in Arizona and enjoy the 2nd amendment as almost no other state does. Such an act hurts the rights of us all and creates potential issues we have yet to understand. Living in a nation that has these rights is one of the only things that preserves our individual freedoms and protects us from a government bent on destroying freedom and enslaving us.

  16. God speed to my American brethren. Long live liberty.

  17. @TF: no, the Palin example is MUCH worse. First of all, Kos is just a blogger. A powerful one, but just a blogger (no offense!). Palin is one of the most powerful politicians in the country, and potentially our next President, and should act a little more responsibly. Secondly, the original Kos post DID NOT have a bullseye graphic! He just used the word "bullseye" in a post! While Palin not only used a sniper's crosshairs, but was using rhetoric like "locked and loaded." You can go check out the original Kos post; Palin took hers down.

    Regardless of one's politics (and frankly I despise both Kos and Palin), I'm surprised you can equate the two. And also a little disappointed in you in that you linked to an obviously cooked-up piece of propaganda that made the Kos post out to be much worse than it was.

    The bottom line is that the rhetoric from the right - or at least certain of its water-carriers- has gotten out of hand. I hope to god that it had nothing to do with the awful events of today. But reading the comments on ZeroHedge makes me feel like I'm living in Germany in 1928. There were more than a few commenters over there today who were actually rejoicing in what happened. Almost made me physically ill...

  18. Never let a crisis go to waste!

    God bless the unfortunate victims of a demented sooul

  19. hey darkstar..."despise" is a pretty strong emotion...perhaps you need to take a closer look at yourself, step off your soapbox and save it for a sound not only as if you are physically ill but perhaps have an issue that need be discussed with a professional and not expressed on this forum.

  20. darkstar: I think you're still missing my larger point. No one can prove at this time that the Palin "target" ad had anything to do with this. Until the shooter claims it did, anyone saying that the ad affected this idiot's actions is simply promoting a personal political point of view.
    Regarding the "rhetoric from the right" making you feel like "Germany in 1928": there are a few lone idiots in every crowd. Until you get a 30-40% plurality of idiots that feel that way, don't lose any sleep fearing the next "beer hall putsch".

  21. Turd, do you follow Franklin Sanders, aka,The Money Changer site?
    He has some rather useful insights into the USDX and the PM's. He also is very knowledgeable about the ratio trend. His posting of this past Friday may have something for you that could impact your concerns about next week. Here is the link:

  22. Turd,
    I forgot to add how much I enjoy reading your blog and the great analysis you offer.
    Thank you also for the 'heads-up' on Harvey Organ too...I now read his site everyday also.

    I stay a 'silent observer' on blogs...but really learn a lot and look forward to learning even more. I appreciate the wide range of comments.

  23. Just like all of us, i've been trying to figure out the end game. We all know the COMEX is a paper game and that full deliveries aren't/can't be met. With the general knowledge that cash settlement is occurring, the COMEX is already in default.

    Scenario 1: The COMEX contract price heads towards a price that reflects the physical shortage. This would happen if short sellers were "forced" to deliver.

    Scenario 2: The COMEX contract price heads towards zero. People realize the nature of the paper and realize that the shorts can't deliver and therefore the contracts aren't worth the paper they are printed on.

    Could it be that we are witnessing scenario 2, where the short sellers just flat out default?

    I think Ted Butler has proposed that the Chinese are the short sellers "AND" the buyer of size. I also remember reading (no source, sorry) that China lost some amount of silver to US custody in some sort of ugly shenanigans. I really need to find that story again. This would give the Chinese the moral high ground in "reclaiming" the silver via defaulting on short contracts.

    Maybe, the moment the Chinese believe they have bled the COMEX dry, then they could abandon the contracts. Heck just based on the devaluing dollar I could see how the moral justification could be made.

    Conspiracy? Thoughts? It's late and I haven't been drinking. Maybe thats the problem. :)


  24. Nice catch on the gold at 1353, poopyjim. I got the March silver at 2845, so here's hoping that the recent downdraft in PMs is just about over and that the knife doesn't fall too much further.

    About the Arizona shooting spree, those in the media had best take care when it comes to pointing a finger of accusation as to who is to blame, since to do so means they quite often point three fingers at themselves (try pointing a finger and you'll see what I mean). God keep the innocent victims of this and every other senseless crime.

  25. Before I turn in, I want to thank LuLu, legerde and Marcus for bringing this blog back to a PM discussion. This has been a long, dreadful day and I'm ready to move on.
    Again, thanks.

  26. Blythe says it is worthwhile to take a look at Gifford's voting record before you pass judgment on this incident. Focus on the economic issues we in this forum care about. Gifford has been a member of the house since 2006 and, contrary to her rep as a "Blue Dog" she was a solid member of the Pelosi mafia that has bankrupted this country and bled its citizens dry.

    If you want to make an omelet you have to crack a few eggs. Maybe members of Congress will think twice now before they vote on the next bank bailout, TARP, Obamacare, or other act that impoverishes their constituents to transfer wealth to the elite. Members of Congress should begin their terms by reading A Tale of Two Cities. Sometimes the masses push back.

    Here's a link to Gifford's voting record:

  27. Turd,
    My prayers are with you and your countrymen.

    The information Harvey Organ described regarding JPM and others reducing their short positions materially seems, to me, to be hugely significant. If they are truly getting out of their short positions, does it not mean that the US-government-sponsored PM suppression scheme is over? I can't believe it to be true.

  28. @Right

    Strange indeed. Lots doesn't add up. This guy wanted to create his own currency. The reading list is indeed crazy strange. It looks like a really lame attempt by some psyops operative to build the narrative. It's almost too obvious. Like, page 5 of the "How to Build a Patsy" psyops manual. "Step one: Create reading list of 'subversive' works patsy reads and post online no more than 3 weeks before the crime."

    I'm typically very skeptical of "false flag" charges -- unquestionably they happen and probably more often than we think -- but I think we lose credibility when we throw them out as an explanation for everything the govt. does. Lots of times, our govt. is just plain incompetent.

    In this case, I'm not so sure. His YouTube page was just thrown up 3 weeks ago. The gold and silver comments are way too convenient.

  29. @Blacky,

    I am not usually a conspiracy sort ..but I swear the less naieve I become the more paranoid I get. "/ I don't imagine that any of this is really anything other than one madman commiting selfish, cowardly and evil acts but some of this just rings a little too 'convenient'. My heart and prayers are with all victims involved.

    TF... thanks for indulging the comments of those of us who veered off the pure PM discussion. The fact that this idiot shooter brought up the silver/gold backed currency issues in his ramblings though just ensured that the two topics will be intertwined going forward least to some degree. There are those who will seek to use his delusional thought processes to tarnish the intent of those of us who want constitutional government in all its forms, including sound money.

  30. @legerde Scenario 2 could explain the large and growing NAV margin in PSLV.

    It could also be that the system is unstable and flips back and forth between scenario 1 and 2.

  31. Here is Part 3 of Silver Manipulation Explained. Enjoy.

  32. Darkstar, the Palin crosshairs image is immaterial. No one had a problem with the image until someone gets shot. What's next? Banning the use of crosshairs in political messages from now on? Banning the use of the word "target" in political messages as to not encourage someone to actually shoot someone? I will say that perhaps the Palin crosshairs image might have been done in bad-taste, but to suggest anything else sinister from it is disingenuous. This Loughner guy is batshit insane and he needs to be the focus, not some stupid Palin image from March of last year.

  33. silvergoldsilver: Thank you for these wonderful videos. I'll try to get it posted shortly.

  34. "For example, we're on Sarah Palin's targeted list, but the thing is, that the way that she has it depicted has the crosshairs of a gun sight over our district. When people do that, they have to realize that there are consequences to that action," Giffords said in an interview with MSNBC.

  35. The new video is up. Its fantastic. Silvergoldsilver, a reference to Turd Ferguson in part 4 would make us all laugh very much and "shit ourselves".
    Thanks again for sharing this important info!

  36. "darkstar: I think you're still missing my larger point. No one can prove at this time that the Palin "target" ad had anything to do with this"

    Turd... (unintented I'm sure) Strawman defence IMO. No thinking person would suggest a linear relationship between the two. It's about the 24/7 barrage of anti Government, social support, abortion, etc, and absolutely anything Obama. The use of violence based metaphorical rhetoric has poisoned the political discourse in America… the base loves it, and reach deeper into their wallets as the heat is increased.

    All disgusting IMO, but what takes it to the next level are the Palins and Becks of the world who shamelessly play to the hatred and bigotry of the “marginal”, for personal gain… to get back to the Crosshairs, the issue is her use of this type of imagery to “fire up the base,” when her end game is clearly personal wealth. To stay focused on her (as an example only), why was she one of the first to make a statement on the tragedy, after she removed the Target post from her site, if it was so harmless (it was done immediately, before any blowback)?

    As far as the Tea Party groups falling over themselves to deny any connection… as “The Bard” once said the Tea Party "doth protest too much, methinks.”

    Finally, my apologies for use of all your bandwidth... now, as you said, lets get back to "targeting" the real villains... the EE!

  37. Michael, with all due respect, anybody who sides with either of the two major political parties in the US is arguing that "my party is dumb and your party is dumber." Don't believe it? Go to any loan calculator website - no wait - I'll do it. Plug in loan amount = $14,000,000,000,000 (14 trillion). Term of loan = 30 years. Interest rate = 3.7%. The answer is $773,000,000,000 (773 billion) per year for 30 years to pay of the current debt. Both parties are going to push this off as far into the future as they can. And the CBO says that the debt will be $19 trillion three years from now. Plug that into the handy-dandy loan calculator and you get $1.04 trillion per year for thirty years to pay that off. Aint gonna happen. That's why we are here at Turd's blog, to discuss this sort of thing. And as Turd said, feel free to enlighten us on why that pillar of society shot Ronald Reagan. Crazy people are crazy people, don't be one of them.

  38. Charles,

    There were angry, armed, Tea Party crowds outside the Congresswoman's office every day leading up to the election. Party leaders (GOP included) did or said nothing... they all gained politically from this kind of behavior, were warned repeatedly (even by the Congresswoman herself), and not one word from their leadership... oh sorry, there were quite a few "reload" comments, "take them out" lists, and a steady stream of socialist, anti-American, their coming after your guns, rhetoric by all of them.

    The first thing the GOP congress does is hold a vote to repeal "That Job Killing Health Care Bill" (this is the official wording of the proposed legislation… what no "Obamacare" with a photo of your President as the Joker) that has zero chance of getting anywhere in the Senate, and was simply more red meat for the Tea Party crazies. So they cancel all legislation this week (the first notice said it was just the Health Care bill but I guess they figured out how bad that looked so the just shut it all down for a week... did I forget to say how hypocritical they are).

    I'm on the side of common sense (I am not affiliated with either party) and respect for human dignity, and will not support a group that accepts this kind of behavior as free speech... it's simply mob mentality, and defending it implies liability (please believe me when I say I have no personal ill will to anyone on the other side of this debate… but I am obviously passionate about getting something positive out of this tragedy).

    The delicious irony is, that the power of the Tea Party comes from the unlimited funding, with no accountability (thank you Supreme Court), by international corporate power… yes, the Evil Empire… but please, speak out against their greed, their lust for ever more power, their manipulation of Au, Ag , the stock market… shall I go on? But, holding them accountable for assassination and murder… not so much… I guess it has to be your 9 year old child being gunned down for wanting to meet a Member of Congress before you care to address the situation.

    I'm sure you'll be sad to hear, I will not be back to Turd's little Tea Party group… you are the company you keep… I sincerely wish you all well Charles!

    Michael out!