Saturday, January 29, 2011

A New Record!!

No, not for pageviews...though if yesterday hadn't been a Friday, we almost certainly would have set one. This record is NINE. That's the number of charts that I'm about to unload on you. But first...

I hijacked this from ZeroHedge as I can't find it anywhere else. Please take time to read:
http://www.zerohedge.com/article/tracking-gold-conspiracy-gatas-must-read-presentation-cheviot-asset-management-sound-money-c#new
Here's my favorite line. How many times have you heard me say this?
"Second, all technical analysis of all markets now is faulty if it fails to account for pervasive and surreptitious government intervention."
And if you'd like to read the rest of Kipling's classic, you can find it here:
http://tfmetalsreport.blogspot.com/2010/11/change-of-pace_13.html

Eric King has so much valuable information on his site today, you could spend hours there. I'd say this is a pretty good place to start:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/1/27_All_100_Ounce_Silver_Bars_Will_be_Gone_in_a_Matter_of_Days.html

Harvey refutes the current "story" behind the unprecedented, one-day drawdown in OI this week.
http://harveyorgan.blogspot.com/

Lastly, I know its the weekend and its fun to give your brain a few days off but you absolutely must keep an eye on the Middle East. There are a wealth of links on Drudge. I'll be checking it often:
http://www.drudgereport.com/
For example, check this out, Note the reference to The Muslim Brotherhood:
http://apnews.myway.com/article/20110129/D9L25G0G1.html
ZH has a link to a story about protests spreading to Saudi Arabia, which would be very disruptive to peace and commerce, to say the least. Again, I mean this only as it pertains to the PM trade. Any attempts to hijack the comments below will result in comment deletions by yours truly.
I traded emails last evening with my pal, TraderDan, and he said this regarding the next few days:


"If we come in Sunday evening and that stuff is still going on in Egypt or if it looks even worse and appears to be spreading to perhaps Jordan or some other neighboring nation, crude is going to jump another $4 or even $5 and gold will be up another $30 or more.

If things look tamer, gold will probably drift lower as the mental midgets that constitute the world of today’s hedge funds forget all about global instability and turn their short sighted focus to the “improving economy”. Makes me want to scream at the utter stupidity of the crowd that really believes you can just print your way out of economic woes."


Crazy times we live in....

Speaking of crazy, what a week, huh? For me, personally, it all started when I typed this back on the 20th. If you haven't read it yet, I ask you to do it now because it provides necessary context:
http://tfmetalsreport.blogspot.com/2011/01/1600-gold-by-june-10-2011.html
You might also review this:
http://tfmetalsreport.blogspot.com/2011/01/end-is-near.html
And this. As you know, gold then traded lower but silver did not:
http://tfmetalsreport.blogspot.com/2011/01/step-one-complete.html

We now sit in a rather interesting position. Have we, in fact, now put in what will henceforth be known as "Turd's Bottom"? Or, are we simply hoping for a bottom and Blythe is now sharpening her giant silver auger, preparing to bore us out and send us packing to CVS again for Prep H and maxipads?
As you might expect, I believe in the former but I also know that the latter is always a possibility.
One thing that is certain, we will experience some crazy volatility in the PMs this week. The tightest range of any day this past week was Tuesday, when it was fifty cents. The other four days all saw price ranges of over a dollar and Friday the range was $1.73. Incredible! Expect this to continue in the new week as PM "market" participants attempt to discern the future of price and trend. (If they all just read Turd, they'd know!)

OK here are your charts of interest. First up, here's the CRB. Another weekly high makes places it UP six of the past 7 weeks:
Here's a weekly crude oil. Note how, like gold, it has had a steady UPtrend since the pivotal month of March 2009, when FASB capitulated and the entire charade began:
On to copper. I drew some trend lines on here but I'm not sure if they mean much. Mainly, this commodity has been rangebound for nearly two months. As long as it stays within the range, there won't be any additional spillover selling into the PM pits:
Here are your PM charts. First up is silver because its pretty self-explanatory:
Now, take a minute to look at this weekly gold chart. The trendline is arbitrarily drawn. Its not meant to be exact. However, note the percentage moves of the three corrections:
Isn't that somewhat odd? If we've seen the lows, then the last two corrections will have ended at almost the exact same percentage drop. In fact, using the rounded numbers above, drop #2 was 8.71687% and drop #3 was 8.71271%. That's freakin bizarre. Very strange. Read into that what you will.

OK, I want to close this note by getting back to the very real risk to global peace and security that is being caused, in part by the skyrocketing costs of food. Fat and happy people will "put up" with a lot. Hungry, desperate people will do anything to feed themselves and their children. What you are seeing now play out is just the beginning. The American political/financial complex, in its sickening attempts to maintain status quo and retain power, has brought this evil upon us. It will get worse. For confirmation, as you look at these charts ask yourself if the staggering percentage moves are from global economic growth and demand OR are the moves caused by a nearly infinite amount of new dollars chasing a static, if not declining, amount of goods? Knowing what we know about QE to infinity, will these price trends reverse or will they continue and, perhaps, even accelerate? If Egypt and Tunisia are rioting now, which countries might be next? Are you glad you own physical PMs? If you don't, why not?





One more thing, here's a chart I don't usually give you but its so odd and so telling that I felt I must. Its a daily chart of the US long bond (30-year bond future). Note that since early December, the bond has been in a very tight, 3-point range. Words cannot describe how strange this is and it utterly wreaks of manipulation by the Fed. Look at the precipitous decline from October to December as the world came to grips with QE2 and the likelihood of QEinfinity. Rates were skyrocketing. As you know by now, we can't have that! Do you recall what cartoon Blythe taught you last week about the importance of low interest rates in maintaining the Great Ponzi? If not, maybe you'd better re-watch:
http://www.youtube.com/watch?v=9FGVtJRWP6k
And if the only thing preventing outright ponzi collapse is low interest rates...and if the only way the Fed can keep rates low is by QEinfinity and active participation in the treasury "market"...then have we dispelled any doubt you may have about the reality of QEinfinity? I hope so.


The end of the Great Keynesian Experiment is upon us. Prepare accordingly.
Turd out.

146 comments:

  1. Thank you Tf for an amazing week!


    New Wynter Benton from 30 mins ago:


    If you have been paying attention you would know that our group starts buying after Feb 8. The big hedge funds we talk to want to buy when the price is over $31. They would rather buy at $31 then at $24 because they (as well as we) would interpret the price above $31 as indicative of tight supply while a price of $24 as indicative of abundant supply.

    They would gladly pay $40 if this indicate how tight the supply is rather than a lower price if this indicates the Morgue somehow was less afraid of a raid. This is a scheme to force a premium from the Comex and the buy in price is really irrelevant if we can be assured that the Comex doesnt have physical to deliver.

    The key to this is to see how many Mar contracts are standing for delivery as Mar 1 approaches. The bulk of the buying will occur near the end but the process starts on Feb 8.


    The only way this will fail is if Comex and The Morgue can deliver physical silver. Period. The buy-in price is irrelevant. But if they cant deliver the physical, then their only defense is to hike the price.

    ReplyDelete
  2. Latest from our little furry friends is a good one

    http://www.zerohedge.com/article/step-aside-bernank-here-comes-timothy-jeethner-bears-explain-banker-bailouts-and-screwing-am#comments

    ReplyDelete
  3. daraconn: I don't think that's a silvergoldsilver production, however.

    ReplyDelete
  4. "In fact, using the rounded numbers above, drop #2 was 8.71687% and drop #3 was 8.71271%. That's freakin bizarre. Very strange. Read into that what you will"

    I'll clear this up with one acronym: HFT

    The algos are pre set. Easy as 1, 2, 3. New vid coming soon...must delay at least a week after more bears on Zero today.

    ReplyDelete
  5. Egypt Stock Exchange, Banks to Close Sunday as Mubarak Protests Continue

    “No one expected this to take place and at such a fast sequence of events,” said Mohamed Radwan, head of international sales at Cairo-based Pharos Holding for Financial Investment. "The critical time frame for the market is from now until the implementation of economic and democratic reforms demanded by the people."

    http://www.bloomberg.com/news/2011-01-29/egypt-bourse-banks-to-close-january-30-as-anit-mubarak-protests-continue.html

    ReplyDelete
  6. I love this blog! Thank you ALL for your insights. As my wife and I plan and build our future, your thoughts and ideas help to keep our spirits up and our hopes alive and intact for ourselves and our children.

    You are making a difference in people's lives Turd! Carry on.

    In regard to the new Bear's video, I couldn't help but post over at ZH too. The solution to me is simple and is working here for us. Close your bank accounts, pay for everything in cash, accumulate gold and silver. Starve the bankers from the inside out.

    BTW - In the north woods, we're definitely going with Turdcicles!

    Free-Independent-Self-Directed

    ReplyDelete
  7. It's the daisy chain end game popping off as all global fiat currencies race to zero!! Real monetary stores of value win out over paper money historically 99% of the time!! We're just waiting for this historical fiat cycle to run out as in the USD being off the gold standard since 15 August 1971! Yep! Paper gets torched after a 40 year cycle and the USD no different!! All SANE eco students pouring into genuine stores of value beyond trusting paper money=commodities/honest money gold/silver as we eventually get 100% historical cycles of paper vs commodities losing again; paper fiat devalued to it's intrinsic value=ZEROooooo!! Kaboom! Collapse! It's over! The bankster parasites consuming the host and dieing! Consumed by the consumer!! Those wanting to survive with food & real money! 3rd grade math says you can't print to infinity and then add another concentric circle outside imploding derivatives!! The self evident truth of the all consuming appetite of natural; irrefutable economic laws say we live in a finite world and paper ponzi always ends; ALWAYS!! Why!! Real resources are limited and this is the nature of the world we live in!! Just be smart enough now to get your hands physically on the limited resources as the masses or minions always; that's ALWAYS! TAKE IT UP THE TAILPIPE!! WHY! TRUSTING GOVERNMENTS TO DO WHAT IS RIGHT AND FEED THE PEOPLE!! THEY NEVER DO; NEVER! USE US ALL FOR CANNON STUFFING'S, SPORT, PROFIT FOR GAIN TO INCREASE GLOBALIZATION CENTRAL POWER; TO SLAVORADE THE MASSES!!!! Classic standard procedure for the haves over the have nots to rule over them!! Real freedom comes in not being subject to the governments centralizing of power and the only way to do that is self sufficiency; which of course is true freedom!! Get enough stores of genuine monetary stores of value set aside through prudent living and you won't be subject to kings, magistrates, rulers or presidents in our case!! Hey! If that truth don't set you free, then our founding fathers who prescribed to less government to ease the burdens of, "we the people," was fought in vanity!! True freemen are not beggars as it goes contrary to the nature of happiness!! Pursue happiness freely! Still our choice through prudent living other than today's free lunch crowd succumbing to vice/dependency! Bad habits leading to self destruction; the destroyer! Virtue exalts; edifies in further happiness by freedom to know correct principle and allowing one to govern their own lives!! Government wouldn't dare let out this secret or they'd be out of business! World wide people actually learning to govern their own lives through correct and sound principle!! Imagine that! Imagine a King who would allow such!! Well! I don't know the future but know who holds the future and the real true King is coming to reign as governments/nations implode naturally through corrupt living; not knowing sound or correct principle to free the people!!

    ReplyDelete
  8. Turd,

    RE: the physical vs. paper question--

    Do you see any danger in having my silver in the form of AGQ for approximately the next 2-3 months? That's where I want to be for the conclusion of the C wave. I have a hunch we'll see it get underway in the next couple weeks.

    ReplyDelete
  9. I'm changing my name from GG to Turdle GG. We are not CIGAs here, but Turdles, Turdicles , etc. (I chose Turdle in honor of Ricard Dennis, who would surely be teaching his Turtles to stay with the upward trend in PMs, despite little pullbacks like we've had recently)

    ReplyDelete
  10. I nominate this as the national anthem of Turdville.

    http://www.youtube.com/watch?v=ZNGe7iK1O-4

    ReplyDelete
  11. I have a stupid, unrelated question.

    I bought a 10-pack of 1-oz gold philharmonics and I uh.... can't open the tube. So now for the stupid question: how do you open gold philharmonic tubes? I'll call APMEX if I don't get a response here but I figured I'd try to avoid the embarrassment on the phone if I can.

    ReplyDelete
  12. catbird: Nothing beats physical silver. And if you reviewed the article carefully, all the technical analysis is hooey and must be disregarded.

    ReplyDelete
  13. Chris,

    Send it to me and I'll see if I can get it open for you.

    ReplyDelete
  14. Pat: You're a little too late. We already have one:

    http://tfmetalsreport.blogspot.com/2010/12/uprising.html

    ReplyDelete
  15. catbird,
    I'd slow phase out into physical. Don't do it all at once. Hell, keep 20% in AGQ if you like it. Normalcy bias tells people that the markets will keep working "normally" (can you call any market normal these days???), but I've got to tell you that counter-party risk is the biggest problem with any contract-driven transaction... which includes owning AGQ.

    ReplyDelete
  16. And a prominent Bedouin smuggler in the Sinai peninsula told TIME that Bedouin are now in control of the two towns closest to the Gaza Strip, and that they planned to press on to attack the Suez Canal if Mubarak does not step down. He also said that police stations in the south Sinai would be attacked if Bedouin prisoners were not released.

    Read more: http://www.time.com/time/world/article/0,8599,2045124,00.html#ixzz1CTC8cw1S

    ReplyDelete
  17. daraconn: The Turd's brother-in-law once served with the "international force" that is based in The Sinai. I wonder what those guys would have to say to any tribe of bedouins that might "attack"?
    Perhaps my brother-in-law, if he's out there, will chime in with an opinion.

    ReplyDelete
  18. t feels to me like we are back in the 2008 Zone, where we spent every weekend wondering what the heck might happen on Monday morning.

    We do live in interesting times.

    ReplyDelete
  19. Eric: Did you see the story on ZH about the Saudi stock market being down 6%?

    ReplyDelete
  20. Turd,
    I agree 100% with the quote from above "Second, all technical analysis of all markets now is faulty if it fails to account for pervasive and surreptitious government intervention "
    So my question to you is why do you spend so much time on charts and TA in your blog trying to analyze gold and silver.There is just to much manipulation that goes on in these markets and makes short term TA practically worthless .

    ReplyDelete
  21. Things will start to go really crazy Monday,keep your G & S close.

    ReplyDelete
  22. Saw a headline saying 19 jets with families of prominent business leaders took off in planes for UAE. Not sure what that means.

    http://www.forbes.com/feeds/ap/2011/01/29/general-ml-egypt-protest-businessmen_8282277.html

    ReplyDelete
  23. "If we come in Sunday evening and that stuff is still going on in Egypt or if it looks even worse and appears to be spreading to perhaps Jordan or some other neighboring nation, crude is going to jump another $4 or even $5 and gold will be up another $30 or more."

    There are no cops in the streets in Egypt. In fact, the way most cops operate in third world countries, they are often worse than thieves themselves. There will be a spike in looting and violent crime in the coming days, and it will get worse if the army tries to police the streets. Have no doubt, this will get worse in Egypt, wheter this spills to other countries, that is yet to be seen.

    ReplyDelete
  24. TF,
    Yeah, saw it.

    On the one hand, the Saudi stock market is not something I normally check on over night to help see which way the wind is blowing.

    On the other hand, yes indeed, markets here are going to get the heebie jeebies big time on any sense that there is more contagion, as Trader Dan rightly says. And in Saudi Arabia of all places. Jordan would be a picnic compared to SA. The TV just said something about Yemen also.

    One never knows which snowflake is going to cause the avalanche. And this storm is getting worse, not better.

    ReplyDelete
  25. flaunt--

    I wonder how much gold was in those folks luggage.

    ReplyDelete
  26. I just spent some time relistening to the last 4 or 5 Weekly Wraps over at KWN. Bill Haynes is definitely getting more and more agitated each week. You can just hear it in his voice.

    ReplyDelete
  27. Robert, all I look for is price targets. Spots where we can expect support and resistance because we've seen it there in the past.
    The type of TA that is worthless, imho, is the full-on RSI, MACD, SMA BS that the prechterites of the world spout when they try to convince you that they can see the future.

    ReplyDelete
  28. For a little more color on Bill Haynes' KWN comments, you can go to his website and there is a blog post along the right hand side of the home page.

    http://www.cmi-gold-silver.com/

    ReplyDelete
  29. This comment has been removed by the author.

    ReplyDelete
  30. Watch the Israeli Stock Market, that is the real tell.

    I wonder what we will rename the Suez canal after we seize it?

    Setting aside everyones view of what is right or wrong, we are entering real politick, and there is no way the Muslim Brotherhood is going to own the canal.

    Anyway been buying some silver miners this week, and Turd since your Thanksgiving post, our family has double buying our storable foodstuffs.

    I am in the solar business, and I encourage everyone to get a small system, that can run a refrigerator and freezer, also a dehumidifier, you can run the water through a water filter sfterwards for water safety.

    Get prepared.

    ReplyDelete
  31. In response to Turds request for a Sinai update... Yes, I spent a year in the Sinai when the scariest item anyone carried was a camera, Hmmm, those days are gone my friends. The pyramids have survived for 5k years, as a by product of greed and corruption, their days may be numbered. Prepare for the future, do not fear it. Hold physical, store food and read Turd! Colonel Turd

    ReplyDelete
  32. "And a prominent Bedouin smuggler in the Sinai peninsula told TIME that Bedouin are now in control of the two towns closest to the Gaza Strip.."

    3,500 years later and the Shasu are till causing Egypt trouble.

    Stepped up my gold buy order last night with PMgold, but will look to double that again through Monday.

    Will be interesting to see how the stock market reacts here first thing, any lack of confidence will probably flow through to all stocks including PM miners, so will have to watch that one carefully and jump in if there are some nice dips. Otherwise will proceed with planned purchases.

    Intersting times, we should thank JPM for keeping PM at low buying levels for us before the express train leaves the station.

    ReplyDelete
  33. Been lurking since day one but finally had to came out of hiding to say a few things. Turd, you're the man. Thanks.

    Speaking only for myself, I'm not opposed to having more than one anthem. They will not control us; we will be victorious. That's lovely to listen to and rockin'...but c'mon, Spaghetti Western music - Sergio's own - is stunningly beautiful too. Thank you, Pat; I didn't know that was out there.

    Chris, use a good solid sharp knife and twist.

    I wish I could back up the truck one last time but instead *gasp* I've had to be a seller. But I don't want to complain too much; I've been all in both Au and Ag for a long time. It's the bigger chunks I cash in for FRNs on an as-needed basis.

    And lastly, Afrum - wow.

    ReplyDelete
  34. @ Jack--

    Physical silver is ultimately where I will be, but I think there is serious money to be made in AGQ in the next 2 months. Thus, I'm thinking I'll get into AGQ for a couple months and then trade my FRNs for Maple Leafs.

    I was wondering if Turd considers that idea dangerous, i.e., are we really going to go Mad Max by April Fool's day?

    ReplyDelete
  35. Just saw this tweet from Stacy Herbert:

    "Had lunch w/ private banker from Switzerland who said a ME buyer was looking to acquire 1200 tonnes of gold."

    1200 tonnes?!

    ReplyDelete
  36. @catbird

    Silver without any leverage already moves like a high beta stock. Why induce more volatility? If you want leverage, why not just buy options where you don't have to risk some much of your capital to generate any meaningful return. JMHO of course...

    ReplyDelete
  37. Catbird,

    I know your question on AGQ is addressed to Turd, but I thought I'd chime in with my $.02.

    There is some inherent danger in trading this ETF because, as others here have mentioned, it's a derivative traded w futures contracts. With the benefit of all the community detective work being done online at sites like this I think it's fair to infer that there is a possibility AGQ might implode at some point.

    That being said, I've been following and investigating SLV and AGQ on a daily basis since July of 2009 and your concerns have been voiced many times before by many people. It depends on your appetite for risk. I beat myself up for months with the exact same question during the time AGQ was hanging around $55. I'm happy to say I fought through the fears

    I'm curious to know if you are interested in shares or options...my advice would be to buy shares and use trailing stops of at least 15 pct. AGQ options spreads are wide, low volume and tricky to navigate at first, and that's on top of being a leveraged instrument on an extremely volatile and manipulated metal. If you've never traded options, don't even consider them here. If you have, I'd still watch the AGQ chain closely for a while before you commit any substantial capital. You could buy 1 contract at first to get a stake in the game and really feel the violent swings firsthand

    I hope this helps

    ReplyDelete
  38. 1200 tonnes would be more than China's entire central bank holdings wouldn't it? I think maybe Stacy heard wrong. Or is messing with people. Gee whiz, it's on twitter so it has to be true, right? Just sayin'.....

    ReplyDelete
  39. Pick52,

    I was interested in shares of AGQ...not options. Never traded options. I understand the theory of how calls work, but it seems to dangerous for me when AGQ can give you such great gains (or losses) in such a short period of time.

    I absolutely understand the security only physical can give you, and I will be a buyer of Maple Leafs. I have to think though that there is much more money to be made in AGQ in the near future. That money can buy me several more rolls of Maples than I can afford now.

    ReplyDelete
  40. I don't know if it's true, just relaying the message. I don't know that much about her but I have no reason to suspect she'd just make it up.

    ReplyDelete
  41. 1200 tonnes? You'd need the Queen Mary or a fleet of C-17's just to move it. Can't be right.

    I think Egypt's Gov't is going to fall. Then, possibly Saudi Arabia. Even the Bernank can't print his way out of this one.

    ReplyDelete
  42. Saw an analyst on one of the mainstream channels saying SA regime is very autocratic and has a firm grip. However, I've also read that it's illegal for street protests to take place and we just saw one in Jeddah. Depends on how pissed off people get.

    ReplyDelete
  43. Stacy is Max Keiser's sidekick on his reports. I suppose she's also known to have some followers on twitter. No reason to think she's just flat out lying either, but I suppose she could be getting played by someone else with their own agenda, feeding her bogus info, hoping she passes it along.

    Anyhow, no way on that 1200 tonnes. Bogus for sure, IMHO

    ReplyDelete
  44. Catbird,

    Great to hear it. IMHO the best thing you can do is average in to your position, BTFD at resistance prices Turd has pinpointed, and have a set profit goal. Believe in your thesis - the trend is UP. And keep a cash position for unexpected raids...you'll be very glad you did. Buy when the raid feels like it's over.

    Once you hit your profit target, set your trailing stop and enjoy the rest of the ride!

    Best of luck

    ReplyDelete
  45. In the old days if you wanted to plant some misinformation you did it through someone at a major paper like the New York Times. Nowadays it's all done via facebook, twitter, YouTube, blogs, etc. Hope the stuff goes viral. Give it 24 hours and by then nobody knows where it came from in the first place.

    Anyway, other topic, I'm with jack I think Mubarak is toast already. Family is all packed up and moved to London. Elites leaving the country as well. Mubarak himself will be the next to bail, leaving this new VP guy he just named holding on to a flaming bag of crap.

    ReplyDelete
  46. When it comes right down to it, protect the gold and oil.

    King Tut museum secured by Egyptian army.

    Read more: http://www.montrealgazette.com/news/King+museum+secured+Egyptian+army+report/4186661/story.html#ixzz1CUiWktyc

    ReplyDelete
  47. Contagian is now the problem.....Egypt will not be resolve by Monday....this is a frickin disaster for the ponzi........

    http://www.pakalertpress.com/2011/01/30/fears-of-uprising-in-saudi-arabia-prince-warns-royals-to-flee/

    ReplyDelete
  48. As for wanting to buy 1200 tonnes of gold, maybe not so bogus. Check out this interesting article:

    http://fofoa.blogspot.com/2011/01/who-is-draining-gld.html

    We may be closer to the PM endgame than even we Turdites suspect.

    ReplyDelete
  49. Eric, I know what you're saying but don't shoot me for passing around a "rumor." She's a fairly visible figure and if she's lying and it comes out then she's only screwing herself. I replied to her to make sure it wasn't a mistake so I'll see what she says. You're also free to get on twitter and ask her yourself @stacyherbert.

    One of the most disturbing things that's happening is all the internet and cell shutdowns in these middle eastern countries as things spin out of control. It should make everyone shudder to think that the thugs running the U.S. want the same "internet kill switch" power. Of course they claim it's to help prevent a "cyber attack," whatever the hell that means, but what they really want it the ability to shut down freedom of speech if and when the SHTF here. Imagine the worst case scenario occurs... Now imagine that you can't get on the internet to find out what's going on and your cell phone doesn't work. Talk about making a horrible situation a hundred times worse... Governments are comprised of thugs with guns plain and simple. If the Egyptians were smart they'd toss theirs out the window and replace it with nothing.

    /rant

    ReplyDelete
  50. Something to think about:

    Why is the U.S. dollar the world reserve currency? Because the House of Saud accepts only US dollars for their oil.

    What if the House of Saud falls and is replaced with a regime that decides to accept a variety of payment types, like euros, yuan, rubles, whatever? Quite simply, there is at that exact point no need for any country to hold dollars any longer.

    And since dollars are legal tender only in the US there would be a massive influx of dollars buying anything US, not just goods and products but also real assets such as farmland, buildings, factories.

    And you would get a massive, very rapid inflation. The number of dollars held abroad is multiples of the amount inside the US.

    ReplyDelete
  51. Prince warns S. Arabia of apocalypse

    Saudi Prince Turki bin Abdul Aziz Al Saud has warned the country's royal family to step down and flee before a military coup or a popular uprising overthrows the kingdom.

    http://edition.presstv.ir/detail/129692.html

    Rats fleeing a sinking ship?

    ReplyDelete
  52. Don: The House of Saud has nothing to do with it.

    Bretton Woods accord, 1944.

    "The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar and the ability of the IMF to bridge temporary imbalances of payments."

    http://en.wikipedia.org/wiki/Bretton_Woods_system

    ReplyDelete
  53. "Had lunch w/ private banker from Switzerland who said a ME buyer was looking to acquire 1200 tonnes of gold."

    For perspective: A tonne (metric) is about 2205 pounds. Since a pound is 12 troy ounces and gold is as of this comment about $1340 an ounce, 1200 tonnes of gold would cost about $42.5 billion. The richest man in the world, Carlos Slim, is worth $53.5 billion, and the richest man in the Middle East, Prince Alwaleed Bin Talal Alsaud, is worth $19.4 billion.

    So yeah, that would be a hell of a lot of gold.

    ReplyDelete
  54. Moonsneakman,
    If you follow FOFOA at all, it is claimed that when the giants transact in size, the price of gold is much higher than spot. The paper games are in place to protect fiat, but when the Saudi's exchange their precious oil for gold, they get a much higher price.
    Ironically, these games allow us shrimps to buy our gold at deep discounts. This always keeps me of two mind; yes, I hate the fact there is no true free market, the price is manipulated, but for us it is magic- more ounces for a given amount of worthless fiat.
    At some point, the paper games fail; hopefully we are all fully loaded by then. It is the primary thesis of Another, Friend of Another ( FOA ), and FOFOA, that there is a coming one time huge upward price movement in gold, overnight possibly, when fiats fail and gold will not be available at any price. No one will sell. Then after settling, perhaps a month, perhaps more, at some price which will then be a true reference point for a more orderly fiat system where the CB's cannot print willy-nilly, our gold will be our saviour.
    A major disagreement point is bandied back and forth that this is a gold only scenario, not silver, not anything else. Not to say silver won't rise, but not as much and only gold will be the reference point.
    And if you follow the money, true money gold, I can see their perspective. All the Giants hold gold, not silver.
    Personally I have both, and I have both gold and silver miners.

    ReplyDelete
  55. CORRECTION:
    The Saudi's , or any Giant, PAY a much higher price for gold, when transacted in Size.

    ReplyDelete
  56. flaunt--

    no, no, not shooting you. Just saying i have my doubts, that's all.

    ReplyDelete
  57. Speaking of FOFOA, another indicator discussed suggests following GLD holdings as a bottom marker

    http://fofoa.blogspot.com/2011/01/who-is-draining-gld.html

    "As we’ve noted before, one-day declines in the holdings of this ETF of over 1% have tended to be capitulatory in nature and have typically occurred near important lows in the gold price during gold’s secular bull market."

    ReplyDelete
  58. Seems like people are always interested in finding funds that hold honest, unencumbered physical metals. I hear about the Sprott funds all the time but I seldom hear about Central Fund of Canada (CEF). That one is about half gold and half silver. The same management runs an all gold fund (GTU) and an all silver fund (SVRZF), which I never ever hear about.
    I would encourage all here to check them out. Seem solid to me, but of course would appreciate feedback if anyone here has concerns.

    Full Disclosure: I own GTU

    ReplyDelete
  59. Unusual ?

    The Bullionvault order board for gold trades in New York looks odd -

    Only one bid showing and only one offer with a spread of $840

    Yeah I know its Sunday but Ive never seen this before ........ and with the ME exploding I would have thought the gold trade would be busy.

    Am I seeing a reluctance to sell gold at this time ?

    rbl

    ReplyDelete
  60. Here are the sites on those funds I mentioned:

    http://www.centralfund.com/
    http://www.gold-trust.com/
    http://www.silverbulliontrust.com/

    CEF is the oldest one which goes back to 1961.

    ReplyDelete
  61. This is just a great discussion. Keep it up!!

    ReplyDelete
  62. TF,
    I think we are just rambling here now, waiting for your next post!

    ReplyDelete
  63. eric

    i have owned cef for years and the Sprott physical trusts. IMHo the honesty of both groups is unimpeachable. one (suspicious)mans opinion

    cef is honest, its ok,they have what they say.
    I once worked in the vaults under the Scotia in Toronto , as well as under Place Ville marie in montreal.
    If Eric says he has his 20 million ounces at the Mint, well, he just does.

    ReplyDelete
  64. My silver spreadsheet: https://spreadsheets.google.com/ccc?key=0Ajym06WyPAdmdEdZM2RwRlZvNW40N1lsTm1CS1Fianc&authkey=COqL6cUF&hl=en#gid=0

    As you can see I've only been tracking this stuff since Dec 9. At first I was worried about the fact that SLV ounces have been declining precipitously. After reading FOFOA's blog on GLD, I see this as a positive. It works hand in hand with the continuing decline in silver at the COMEX registered vaults. Someone is trying to amass a lot of silver. All you have to do to raid a lot of silver is buy or own 50,000 shares of SLV (multiples of that for giant buyers) and ask your friendly AP (authorized participant) to redeem these shares for actual physical. It then becomes allocated in their vaults to you, and you can go pick it up if you wish.

    ReplyDelete
  65. This comment has been removed by the author.

    ReplyDelete
  66. Egypt Crisis Update:

    - Military generals seen on state television meeting with President Mubarak

    - Rumors of move to shut down Al Jazzera headquarters in Cairo (very negative)

    - Military helicopters and fighter jets have been "buzzing" the mass crowds in a show of intimidation (starting to get uglier)

    - No letup seen from the people of Egypt

    Watch coverage live here:

    http://english.aljazeera.net/watch_now/

    ReplyDelete
  67. Turd made me a score last week, so thanks.made back some ugly losses.
    As for now?........hmmmm.....many many moving parts. cash.... and watch.

    The best experts this weekend seem to think that radical islam is not very strong in Egypt.However these hungry kids in the streets are completely disorganized, so would the older more experienced radical islamists gradually get control . They probably would over time, but probably would not right now.I think these kids are getting a bit tired after six nights without sleep.

    The US will try to winkle this disaster , the old guy probably goes and a new guy comes in, elections get kinda sorta called,and everybody prays it settles down. Will it, or will it morph.They have no history of democracy there, they wouldnt know a ballot from a bullet, in fact i would go with the bullet.

    This is a BLACK SWAN event.It actually risks nuclear war since Israel has nukes and will use them if facing obliteration.

    Try to imagine if radical islam got the Suez canal and the Straits of Hormuz. 250 dollar oil? They probably wouldnt even sell it to us!!

    I do like the PMs, but making 'this" kind of money, not so sure, ...better than starvation i suppose, as long as i can find a farmer to sell me some eggs for a silver maple leaf.

    This is huge this thing, the most classic unintended consequence i have ever seen, a classic f...k up, we failed to pay our bills for 40 years post 1971, bernank jacked up food prices,in his attempts to devalue to pay these unpayable debts,and blows up the world. Well done.

    Oh what a tangled web we weave......

    ReplyDelete
  68. Eric - I believe Stacy. Maybe I'm naive but she seems honest to me. Whether her banker friend is honest, well I have no idea.

    She said,

    "Nope, it was tonnes. I also asked in shock . . . about five or six times."

    I can't imagine it not coming out who this buyer is.

    ReplyDelete
  69. I know its very serious and all but from time to time,some of all this is kind of funny.

    First, if someone can get me a date with Stacy Herbert, it would be vastly appreciated. Max could even chaperone as long as he doesnt peek...i would take the hit , i swear i would.Stacy rocks.

    Second, after 40 years in this game,with all the attendant bumps, it had not fully occurred to me that, as a newly minted senior snivelson, i would have to listen , and acutely listen, to two talking bears on the Internet,explaining why the JP Morgue was moving my silver around .
    And those bears actually helped me! They were right!And if they were wrong, they tell me it dosnt matter!!Where have these guys been all my life?? They admittedly talk kinda funny, with a lot of (to me) redundant bodily functions but they made me money!! More bears and soon please.

    And finally, I am now getting really superb advice from someone called Turd Ferguson who nailed a lucrative low for me.

    I guess its just me, but there are aspects of this that exceed the surreal.

    ReplyDelete
  70. @Jack:

    Thanks for your comment. However, your quote/description of Bretton Woods is incomplete.

    The other currencies are tied to the dollar, yes, but the dollar is to be convertible into gold.

    As of Nixon in 1971 that ceased to be the case and Bretton Woods is out the window.

    The new convertibility is dollar into oil thanks to the House of Saud. If they go, so does the dollar.

    It won't just be a rush of dollars back home, it will be a race, since dollar #2 buys less than dollar #1 and dollar #3 buys less than dollar #2, etc.

    ReplyDelete
  71. Vamoose-

    I think it is, at least in part, a reflection of a deep and spreading failure of traditional sources of information- investment advisors, funds, media, etc- to provide simple, honest, and accurate information. So many groups and people have been pulled into the fetid swamp of misinformation and deception, that people like you and I must seek far and wide for actual honesty- and whether thats cartoon bears or somebody named "Turd", well, true is true. I trust Turd and the information he provides more than any person or broadcast on television for example, and I have never met the man. Good on ya, Turd. Bad on everyone else, lying sacks of sht.

    ReplyDelete
  72. There is one immutable fact that should always be at the very forefront of your mind, as you ponder any of the diverse and sometimes maddeningly crosswise perspectives, and theories about what happens next.
    And that is of course follow the money. Those three words generally is the path to solve any conundrum. Follow the money.
    Who owns the gold, the real money for thousands of years, king after king, country after country, giant after giant?
    Nowadays, kings not so much, eh?
    So we have countries to be sure, CB's, and huge wealth individuals. And countries that don't have so much, are very actively trying to catch up without completely turning worthless overnight their paper holdings.
    So, in there most carefully guarded vaults, what do we see? We see tons and tons of physical gold; not silver, not art, not SLV and GLD certificates; not copper; not platinun; not wheat; not rare stamps; not Apple and Google shares; not anything but gold, physical gold.
    It could not be simpler.

    ReplyDelete
  73. Pining

    How right you are, when i can stomach CNBS i am just awed at the brazenness of the lies. As you say true is true.And these people lie like Goebbels in 1940.

    Also when I look at a country of 80 million people (egypt) suddenly go totally viral, to me its truly humbling.

    This Internet is revolutionary. Its like when the Chinese invented gunpowder.

    It looks like its going to turn the world upside down, in fact it already is, it completely nullifies TPTB.Its downright scary.Its also, comparatively speaking, very new.Only about ten years old for most people.

    One fine day,its going to get shut down, or heavily censored, its killing these lying Governments, its the greatest BS detector the world could have ever contemplated.Amazing.

    ReplyDelete
  74. flaunt-

    OK, well I guess now we just watch and wait to see what happens. I feel better about it with Stacy confirming it, and confirming that she was pretty incredulous initially too. It would certainly be huge. Can't see how they'd be able to keep it quiet either. Not with physical anyway. Paper gold, no sweat, but physical, the political pressure to keep it quiet would be staggering. But the way the middle east is today, I can't see any Saudi royal, or some such guy, settling for anything less than physical. And not just some account number in Zurich either.

    Remember when India bought that big slug of IMF gold? Basically lit a fire under the gold market that is still burning to this day.

    ReplyDelete
  75. "The conclusion to all this is that anyone with a sizeable silver short position is probably going to find themselves in a very unenviable predicament before much longer."

    http://www.clivemaund.com/article.php?art_id=67

    ReplyDelete
  76. Mohamed ElBarade is fast rising as a possible leader that may emerge out of the Egyptian revolution.

    Collapse of Mubarak regime is imminent.

    Egypt has past the point of no return.

    Volatile markets await us...

    ReplyDelete
  77. Well this is interesting... Maybe some of the people in Egypt are starting to "get it." OTOH, this may just be an unconfirmed rumor.

    "The Egyptian army used tanks and fired shots in the air to force back hundreds of protesters who were attacking the entrance to a building related to the Central Bank in a suburb of Cairo on Saturday, a witness said."

    http://www.reuters.com/article/2011/01/29/us-egypt-protest-bank-idUSTRE70S2AA20110129

    ReplyDelete
  78. What would be the best way to capitalize on a oil run up right now?

    ReplyDelete
  79. Decided I should load up on some more silver while the loading is good. Went to my favorite Gainesville Coin to buy a few 100 ounce bars and - they are OUT OF STOCK! None to be had!

    ReplyDelete
  80. @jaws136 - fill up the station wagon and the SUV for one thing. You can be darn sure the price is going up big time in the coming week.

    ReplyDelete
  81. Anyone else having trouble with Gainesville Coins orders on-line? Order processor is rejecting orders even when credit card company is authorizing the deposit. Tried two orders and got two rejections. Credit card company says they have authorized four (4) deposits, not two? Plenty of credit on the card and a small deposit anyway. Anyone else see this?

    ReplyDelete
  82. @sassballsgrandpa Did that at end of last month, thinking it would be over 100 by now, you don't want to know how much the bill was. Ouch 15k worth diesel and unleaded. That should last a while.

    ReplyDelete
  83. boatcat,

    Gainesville coins has VERY stringent security standards for credit cards - they err on the side of rejecting a legitimate cardholder to make sure an illegitimate one doesn't squeak through.

    During Christmas, I tried to buy a gift and send it directly to my parents address. Since the address was than the one registered with Visa, I was flagged and I was totally locked out. Gainesvelle then rejected ALL my cards, even when I switched the address back to my home. I had to call Gainesville to have it reset.

    ReplyDelete
  84. sass-
    Totally ties in with what Bill Haynes was saying on the Weekly Wrap over at KWN.

    jaws-
    I like oil sands producers. SU, CVE, CNQ, COSWF. Don't know if that's wild and wooly enough for you, or if you are looking for more leverage. I own all those. I buy and holdem.

    ReplyDelete
  85. Thanks for the tip. Re-ordered and made sure that my mailing and shipping address was the same and matched my billing for the card. (All different normally.) Order went through with no problem. Thanks again!

    ReplyDelete
  86. Hey Turd, wanted to let you know that the openID sign-in mechanism on your site hasn't been working for the past day. It's always been flaky for me. So much so that I just created a google ID to continue posting here. I'll be posting under the SilverLeaf ID going forward.

    "The Turdfan formerly known as TitaniumVT"

    ReplyDelete
  87. Friday night we were discussing Monarch Precious Metals, and how it's nice that they show how many are in stock right there on the site. Thought I'd check on those 100oz bars.

    1/28: 6
    1/30: 4

    ReplyDelete
  88. "Second, all technical analysis of all markets now is faulty if it fails to account for pervasive and surreptitious government intervention."

    Yep, but therein lies a bit of a warning.

    Larry Summers's [yes, that Larry Summers] work on the Gibson Paradox is truly groundbreaking, showing that there is an inverse correlation between POG and real interest rates. But he threw in a huge caveat in his paper: the negative correlation exists if there is no governmental interference with the POG.

    Draw your own conclusions.

    I think it works both ways.

    Plus, TA is the equivalent of a witch doctor throwing bones and reading chicken guts. It seems anyone can read whatever they want into any particular pattern.

    If you are LTBH gold, keep your eye on MZM and M2 as well as real interest rates and act accordingly. The stars are nicely aligned for continued increases in the long term POG if you use those factors.

    Over and out.

    ReplyDelete
  89. Just FYI for anyone else. After you order from Gainesville using all addresses that match your card, just go into your account and change the shipping address. Then put that address in the comments section of the bank wire and it goes to that address. Shipping address and BW comments address must match or order is canceled.

    ReplyDelete
  90. flaunt, thanks for the silver update from Clive. The gold update is very bullish.

    "...what more do you want?"

    ReplyDelete
  91. I just stumbled across this. I wonder if Blythe and her flying monkeys will be at dinner?


    SATURDAY, JANUARY 29, 2011

    Is Something Serious Up at Treasury?
    On Sunday, Treasury Secretary Geithner will have dinner at Treasury with former secretaries of the Treasury.

    What's up with this? There was no indication on the weekly Treasury schedule, put out just a day ago, that this dinner was planned. Very unusual.

    On top of that, the Treasury put this notice out at 9:00PM on a Saturday night. Sure looks like a rushed meeting to me.

    http://www.economicpolicyjournal.com/2011/01/is-something-serious-up-at-treasury.html

    ReplyDelete
  92. This could be big, a all out attempt to float the dollar? http://www.zerohedge.com/article/citigroup-last-recourse-against-runaway-inflation-commensurately-greater-jump-dollar

    ReplyDelete
  93. Hi All! This is a terrific blog. :]

    Thank you for posting this Citizen Doctor:

    "Houston, we have BLAST OFF on every freaking thing that morons were selling at 30% discount last few days !!! Come in Houston, Houston are u there?"...

    I'm glad I sold Nothing. Nada. But added to my positions both physical & miner. We shall see if our resilience has paid off.

    Anyone have some thoughts on what you think the middle east mess may do the the markets, metals and miners this week? Oil has to be watched closely. I see liftoff for commodities in general because it's like a domino effect ..with oil being the catalyst. Agreed?

    ReplyDelete
  94. Thinking about the Stacy Herbert story

    Could it be a leader(s) of a Nation, with ill gotten gains (resources from said Nation) stashed in Switzerland. Knowing that the Swiss are likely to freeze the account if he is run out of power, conversion to physical gold in advance would seem like a clever play

    ReplyDelete
  95. Great site. Best education ever.
    Thx.

    ReplyDelete
  96. ItsAllGood:
    I see a horserace between liftoff for commodities vs a generalized selloff in everything. My 2 cents.

    ReplyDelete
  97. In the words of the Prophet*, "A hungry man is an angry man, and a hungry mob is an angry mob."


    *Robert Nesta Marley

    ReplyDelete
  98. @ PAT

    So what do you make of China net importing huge amount of silver last year? What does China imported around 1/7 of world silver mining output indicate?

    Think of this: if it would only be gold going high then silver should be much cheaper to acquire relative to gold in future, then why didn't China import gold only to buy much more silver down the road? Why would they waste money on silver now if it's only gold going high?

    I had a few exchanges w/ FOFOA on his blog about silver. He threw me some self-righteous 1:2000 or 1:20000 gold silver ratio only to be busted by a little supply & demand and price discovery analysis from me. I also pointed out flaws in his Free Gold theories along the way, which got his supporters riled up against me.

    See either China got silver wrong or A/FOA/FOFOA did. Which one do you think is more likely? I decided to follow China - the biggest money of all money and the most gigantic or all giants. What about you? Which one do you follow?

    ReplyDelete
  99. Rui, why decide between Au & Ag? Hold both. If Ag outperforms Au in near term sell some in the future to acquire more Au. I think owning both is prudent.

    ReplyDelete
  100. Hi, everyone. Thank you all for contributing to the blog on a Sunday. I encourage all of you to scroll back up through the comments. Its a plethora of great info and links!
    There is certainly A LOT going on but I'm going to wait until after 6:00 EST to start another post. As you might imagine, I'm very curious/nervous/excited about where the PMs and crude will open.
    Until then, keep this one going. TF

    ReplyDelete
  101. @ WineGuy

    That's right, WineGuy. I do have gold as I follow China - they acquire both.

    Some pros actually trade strictly upon gold & silver ratio fluctuation. If one is too high then they trade it out to get the other. They don't care the absolute price very much as their goal is to acquire more metals at the end. I know Franklin Sanders is doing it. I wish could have a good sense on how GSR fluctuates as he does.

    ReplyDelete
  102. @Rui,

    "What does China imported around 1/7 of world silver mining output indicate?"

    ...That China is manufacturing a myriad of goods that require silver as an essential input. Manufacturers don't have the luxury of being able to wait for year to buy essential ingredients at a lower price. They have to secure the silver needed to keep their factories running, no matter what the price.

    ReplyDelete
  103. Rui,

    China is unique; they have all that BS fiat they accepted from US, and they are stuck trying to buy anything of value; companies, Euro influence; copper; steel, silver certainly; gold when they can get it. They build ghost cities; etc. They are realizing they've been had.
    China is the biggest Giant? hardly. They own very little gold on a relative basis, and they are the stuckees and know they have worthless fiat. They can't feed themselves; they have polluted their entire country; they are a giant mess. Just one more in a world of giant messes, to be sure.
    Could Another, FOA, and FOFOA be wrong? of course, and I myself as stated have both silver and gold physical, and miners in both.
    But the cold stark reality is that the Giants vaults are filled with gold, not silver. Ignore that fact if you wish.

    ReplyDelete
  104. Ok, well I just had to laugh at this. Clearly, I need to step away from my computer for the rest of the day and stop obsessing about silver and gold. How do I know? Well, I just read this article headline on the CNN.com home page:

    "Would PMS make my boobs bigger?"

    ...And my only thought was "Why would precious metals make your boobs bigger?"

    ReplyDelete
  105. silver leaf: LOL. You need a little break!

    ReplyDelete
  106. Well, those boob jobs cost money, so I can make that leap ( I think ).

    ReplyDelete
  107. As I've said before on this blog, I view gold as money and silver as a speculation. I own both, and silver has been a very happy speculation of late. But I have already swapped some silver for gold, and expect to do more if the gold silver ratio drops some more. I suppose there's an endgame someplace where all my silver is gone and I just have gold remaining. Not for quite a while yet though, methinks.

    Just one guys opinion. Don't all you silver bugs jump on me now. I think there will be enough upside to keep us all happy.

    ReplyDelete
  108. Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.

    ReplyDelete
  109. I don't know how people feel about Mike Ruppert on this blog, but to me. he is one of the guys who "called it" many years ago.

    Fir a fascinating read, check out his book Croosing the Rubicon, and realize it was written five or so years ago.

    He has a You Tube video which is alarming:

    http://www.youtube.com/watch?v=pQx5yX55BKo&feature=feedu

    I written before about confluence of event -- and Turd likened me to a schizo! lol -- but here goes:

    1. rumours of emergency US Treasury meeting tonight

    2. events in Egypt

    3 Lady Wynter stuff

    4. dancing bears stuff

    I don't know, but I am on pins and needles waiting to see whats gonna happenin the markets tonight.

    ReplyDelete
  110. "I see a horserace between liftoff for commodities vs a generalized selloff in everything. My 2 cents."

    Thank you, Eric. That's what I have been pondering all day. As Mr. T.Ferguson said in one of his last posts.. I too am curious and a bit nervous about where we open next. It truly could go either way couldn't it? The day will come however when the up momentum takes over in commodities and a decoupling of non-commodity trades will take hold.

    The good news at that point: We all become a little bit wealthier as we are positioned to weather the storm. The bad news: The storm will change our nation as never we have seen it before.

    ReplyDelete
  111. Yup, pins and needles.

    The You Tube video is someone who makes money off misery and fear and selling same. Gotta pass...we will survive this and prosper.

    ReplyDelete
  112. I guess what really convinced me was, as I started to take delivery of more and more silver, how bulky and heavy it is.

    Let's pick an arbitrary number like $50,000. That much gold weighs around 2.5 pounds and will fit in a small cigar box. That much silver weighs around 122 pounds. You'll need a wheelbarrow to move it around and much more space to keep it. To me then, gold is much more practical as a store of wealth.

    I will concede that silver is quite well suited for smaller transactions. Even a very small gold coin, say a quarter ounce, is way too much to try to go and buy bread and milk with.

    ReplyDelete
  113. Time to go run the dogs and get back before markets open. Hold on tight!

    ReplyDelete
  114. Many feel the USA or better said the US Fed is responsible for the mess we are in. I suppose that's open for debate but what I feel is important is the mess the entire world is in. When the proverbial SHTF it will effect every nation. This is not a USA, Canadian, Ireland, Egypt, etc etc thing. It is global! We are all in this together.

    I think its time for some wine now. Something tells me tonight is going to be very interesting.

    ReplyDelete
  115. WineGuy ...you are so right. I think my last statement above should have read: "The bad news: The storm will change our (delete: nation) WORLD as never we have seen it before."

    ReplyDelete
  116. Cris, don't forget:

    Silver lease rates:

    http://www.kitco.com/lease.chart.silv.html

    Backwardation in LMBA SIFO rates:

    http://www.lbma.org.uk/pages/?page_id=56&title=silver_forwards&show=2011

    Backwardation in silver futures:

    http://www.cmegroup.com/trading/metals/precious/silver.html

    U.S. Mint record sales:

    http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=sales&year=2011

    Increasingly bullish COT reports.

    Lots of evidence of physical silver shortages, especially in investment bars.

    ReplyDelete
  117. @ SilverLeaf

    "That China is manufacturing a myriad of goods that require silver as an essential input. "

    Giving that China's net import jumped 400% year over year I doubt it's just a factor of manufacturing input. If I believe gold will outperform silver 10 times then I'd focus on gold while giving as little attention as possible to silver, but that's NOT what China is doing.

    @ PAT

    It's true that China has little gold while these "giants" have plenty in their vault. My questions is: does it really matter?

    China's gigantic strength does not come from the pile of junk dollar or gold they have but the 1 billion hard working labor behind it. No, not even an ocean of gold can be as important as the 1 billion hard labor willing to produce, which is sth even hard-core gold bugs sometimes fail to grasp.

    You see economy always starts from people willing to produce rather than consume. When we produce more than we consume, we have surplus to either trade or save. It's at then that we need to money to measure how much we can trade or save. So production comes first, money comes 2nd. In that order. Money has to be backed up by production.

    You see the world's most healthy economy all falls into the group of nations either has good work ethnics (Asia / Germany) or lucky enough to sit on a pile of natural resources (Saudi, Russia, Australia, Canada, Brazil etc). Productions rules it all.

    Imagine that US actually has most of gold in the world and we switch gold standard on tomorrow. Would it solve our problem? No, b/c we still have an economy that 70% of GDP comes from consumption meaning we always consume more than we produce and the resulted trading deficit will drain this nation's gold eventually down to insolvency again.

    See? The #1 element of an economy is production. The #2 still is production. The #3 also is ... all the way down to #one trillion. What about consumption then? Well consumption is disqualified to be on the list. We are born to consume, to eat, to drink, to consume enery / electricity / natural resources and so on. It's just too easy to be on the list.

    So the way I look at these giants is not just about gold. Gold is important, but only 2nd most important factor. I'll look at what kinda production strength is behind these giants. If there's not much, e.g. in the case of US and most of Europe, then they ain't giants to me.

    ReplyDelete
  118. "Today Ben Bernanke is attempting to influence asset prices and economic behavior with his quantitative easing plan.

    A gold standard prevented this currency fiddling. That’s why, according to the currency manipulators, the gold standard had to go.

    We will learn once again–sooner rather than later, by the looks of it–that you can’t devalue yourself to prosperity."

    http://wallstcheatsheet.com/trading/the-definition-of-a-gold-standard.html

    ReplyDelete
  119. RUSSIA led the gold bugs last year as it invested $US5.8 billion ($5.83bn) in bullion to diversify its reserves away from the US greenback.

    Read All About IT

    ReplyDelete
  120. For your pleasure, courtesy of Santa's site.

    Greetings Jim,

    Gold closed slightly lower this week, reacting sharply off of the lower boundary of the uptrend from late 2008.

    clip_image001

    We are now 26 weeks into the intermediate-term cycle following the low on July 30. Ninety percent of all Intermediate-Term Cycle Lows (ITCL) form within 23 weeks of the previous low, so Cycle Analysis (CA) indicates that the latest ITCL is imminent and could occur at any time.

    clip_image002

    Additionally, the short-term cycle is currently within the window during which the next Short-Term Cycle Low (STCL) is likely to occur, and the setup for a confirmed STCL signal was generated on Friday as both of our CA price oscillators experienced bullish crossovers.

    clip_image003

    The trigger for confirming this STCL signal would be a daily close above $1,346. A confirmed STCL next week would significantly increase the likelihood of the ITCL occurring as well, and a synchronized short-term and intermediate-term low would forecast a move up to new all-time highs during the next 2 to 3 months.

    Best,
    CIGA Erik
    Prometheus Market Insight
    http://www.prometheusmi.com

    ReplyDelete
  121. I just looked out my window and there are black clouds in the sky that spell out the words "Surrender Turd".

    Not a good sign.

    ReplyDelete
  122. Rui,

    Good points, and believe me I know the US and other consuming, debtor nations are screwed blue and tattooed. However, a billion hard working people who now in concert with the rest of the producing world, have a huge over-production overhang, how does this help them? Long term their goal is to grow their middle class and become consumers themselves, but if statistics I have seen are to believed, they are still a third world nation income-wise.
    Maybe not $2/day anymore, but not much better.
    And of course the good 'ol US of A has been exporting inflation to them; doesn't help. Of course they could unpeg the yuan; hmmm, not yet.
    So I don't agree with your statement, "production comes first" because demand comes first. That is THE problem facing every economy worldwide, but certainly paramount for those who built product capability on the come.

    ReplyDelete
  123. @ Pat

    Yes, production has to be meet demand or it's useless production like these many houses we've built that are now stuck in the shadow inventory. Supply and demand has to work in harmony to get it going.

    I was more focused on the mental side of producers, the willingness to both work hard and embrace necessary changes. It's sad that the once proud no-free-lunch & hard-working America has lost that willingness after a century of Keynes experiment.

    ReplyDelete
  124. Brother Rui,

    Yes, yes indeed. I do have this perhaps hopium dream that once TSHTF, we will respond as we have, as a nation in the past. Necessity being the mother of invention, or hard work as the case may be.
    I have down-sized dramatically, and my kids see that and lo and behold they get it. So there is hope.

    ReplyDelete
  125. The Sydney market has opened with a bang. A vertical line. Fear has taken over the market.

    ReplyDelete
  126. Sean: So I'm not the only one watching the horse race today? :-) Bought 3oz of the golden stuff this morning from APMEX. A vertical line is a wonderful vista.

    ReplyDelete
  127. Vertical lines are good.....well, vertical lines up are good.....;-)

    Of course, classical theory seems to be turned on it's head, as the USD index is headed up as well. I think if we follow "TurdCycles (tm)" the behavior of the dollar may not matter.

    Turd, can I make one request? Can we have a 20 week counter at the top so I know when to dump before the next correction? Only partly kidding, if this puppy goes to 1600 holding I probably won't care about a correction, but I might be nice to trade it.

    Thanks for all the info!

    ReplyDelete
  128. You're all welcome everyone.

    Bailed on my PSLV positions last week to stop the bleeding, and low and behold...

    I'll give you guys a heads up when I plan to double-down on GDXJ a few months from now ... as that would mark the top.

    ReplyDelete
  129. Just read the latest GGR. Gene mentioned that just as in gold there was a huge contraction in the spreads in silver. His suspicion is that's what caused the plunge in both metals. I wasn't aware of this contraction in the silver market before he mentioned it. The reductions may have something to do with the narrowing spreads in the futures, which are extremely flat if not in backwardation.

    ReplyDelete
  130. If there's a knockdown tomorrow morning it will be abundantly clear the government/Fed is very actively manipulating the markets.

    The next few days will probably be the most interesting we've seen for 2 years.

    ReplyDelete
  131. "if there is a knockdown..." IF IF???
    "It will be abundantly clear...." Where the hell have you been, boyo???

    All in fun Dryam

    ReplyDelete
  132. CL up a buck in the last hour. This is interesting.

    ReplyDelete
  133. Pat, Dryam:

    If we get knocked down in the AM and you are moved to send a screed to the CFTC, please address it to "That F-ing corrupt F-ing midget Gary Gensler", as better men than we have already blazed that trail.

    Turd in 3..2..1...

    ReplyDelete
  134. Unrelated to PMs, watching 60 minutes where this jackass interviewer is excoriating Julian Assange. Makes me angry. If this interviewer wasn't a tool he would bring Holder and other members of the mafia on the show and make THEM explain why they're calling for the head of the member of the press. Of course he won't do that.

    ReplyDelete
  135. Boy, silver up 40 cents in 75 minutes.

    This is getting real.

    ReplyDelete
  136. @johnboatcat I had a card get booted but I tried it again and it went through with no problem. I chalked it up to a fat finger, but perhaps not. Also, use NIAUS to get 5 bucks off shipping.

    ReplyDelete
  137. Here's a video containing a very basic overview of the Suez canal from CNN:

    http://www.cnn.com/video/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+rss%2Fcnn_freevideo+%28RSS%3A+Video%29&utm_content=Google+Feedfetcher#/video/business/2011/01/30/levs.suez.worries.cnn

    Lots of interesting twitter chatter. This from someone on Saturday regarding events in Suez which haven't received much attention:

    http://www.twitlonger.com/show/8fflmc

    Other twitter chatter about stuff going on in Suez but it's all rumors at this point.

    ReplyDelete
  138. Pat,

    My main point is that the vice is squeezing in on U.S. government/Fed. All of this money printing & subsequent exporting of inflation is a main contributing factor to the current geopolitical uprisings. The uprisings need to be muted & muted quickly. The Fed needs some faith restored to the USD. The problem is that if they were to try to tighten the smallest amount right now that deflationary vacuum would suck away any life left in the economy. The one thing they can do for the USD is the scare people away from the PM's. They are trying to straddle the fence & the endgame could come very quickly if they sway the tiniest amount away from center.

    If there's a takedown tomorrow, it shows some serious desperation.

    I expect quite a bit of volatility & won't be selling no matter how hard PM's get hit. If there's a deflationary collapse, the U.S. government will explicitly default & the USD goes way down. If there's hyperinflation, the USD goes way down. Either way gold/silver preserve some value.

    ReplyDelete
  139. flaunt: The Twitterverse is alive today with breaking news. Made for some interesting reading the last hour.

    I think the Suez canal is the key to the issue and I'm concerned that the West will be compelled to jump in like we did in 1956.

    Suez Crisis 2.0

    PMs falling back down after the initial sprint.

    ReplyDelete
  140. Does anyone know who this Wynter Benton is and how to contact her?

    ReplyDelete
  141. "Let's pick an arbitrary number like $50,000. That much gold weighs around 2.5 pounds and will fit in a small cigar box. That much silver weighs around 122 pounds."

    I just cast my first 50k worth of silver into a lid for my cesspool. Nobody ever steals those!

    ReplyDelete