Wednesday, January 12, 2011

You Don't Tug On Superman's Cape...

You don't spit into the wind. You don't pull the mask off that Ole Lone Ranger and you don't mess around with Ben. (With apologies to Jim Croce.)

The new POMO schedule is out and it looks like this:
If you can read the fine print, that's $112,000,000,000 brand-spanking-new greenback about to be lavished upon our Primary Dealers. In what has become a monthly ritual, I hereby implore you again not to be short anything. Don't be "Mr Smartypants Topcaller", short the S&P and who knows what else because the fundamentals suck. One day you will be proven right but you will be broke before it happens...flattened by HellyBenny and his printing press. Each month of POMO compounds the gains in all things dollar-denominated from the previous month. Expect no less the next four weeks. To review, the just-completed $110B POMO of mid-Dec to today brought us these returns:

                                            12/10/10                   1/12/11                   Total
The E-mini S&P (ES)           1236                         1283                      +3.80%
Feb Crude                             88.31                        91.87                     +3.46%
March Copper                      411.20                      441.60                   +7.39%
March Soyas                        12.82                         14.15                    +10.29%
March Sugar                         29.13                        31.98                    +9.78%
March Silver                         28.60                        29.67                     +3.74%
Feb Gold                               1385                         1388                       flat
March Wheat                         7.75                           7.71                      flat

First of all, let me assure you that the only reason gold and wheat are flat is because I own them. Seriously, there could be no other reason than the "Turd Jinx". Other than those two, look again at the numbers!! For one month!! Do not be short anything!!! Period. You'll be crushed under a mountain of soon-to be worthless fiat FRNs. As a point of order, here's what I wrote when the just-completed POMO schedule was announced on 12/10/10:
"I always count at the upper end of each daily range so this current schedule adds up to another $117B in brand new, fresh greenback for the PDs to play with over the course of the next four weeks. My advice to you is simple: Be long or be out. Do not attempt to be "Mr. Smartypants Topcaller" and try to short anything. Don't be short stocks, grains, crude, PMs. Nothing. Long or out are your only choices.
For reference, the just-expired POMO schedule began on 11/12. On that day:
The ES (mini S&P) closed at 1195.50. Last 1239.25. +3.66%
Feb11 gold closed at $1367.70. Last $1387.40. +1.44%
March11 silver closed at $26.02. Last $28.68. +10.22%
Jan11 crude closed at $85.34. Last $87.74. +2.81%

I think you get the point. As long as we're creating from thin air over $100B in new cash every freaking month, shit ain't going down. Period."



Onto today's action, the USDX performed exactly as expected and predicted yesterday:
http://tfmetalsreport.blogspot.com/2011/01/buck-me-this-is-getting-old.html
Everything, with the exception of our precious PMs rallied today. If crude can stay near $92 overnight, eventually gold and silver will rally in a kind of algo-arbitrage type of trade. Same parameters still hold. Once silver clears $30 or so, it will quickly trade to 30.60. Gold, once it bests resistance at 1390 will zoom to 1400+. Let's look for this overnight.

Finally, be sure to read this from Trader Dan:
http://jsmineset.com/2011/01/12/continuous-commodity-index-reaches-another-all-time-high/

More later once I get a chance to review the day's events and Harvey. TF

7:05 UPDATE:
I've received a few inquiries as to why gold is not participating at the same rate in the POMO advance.
Perhaps it is. Its just being masked by EE attacks. Study this and draw your own conclusions:
http://tfmetalsreport.blogspot.com/2010/12/criminal-evil-empire.html

65 comments:

  1. No no ... it's not you, it's me !! Well at least you can't be the only jinx.

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  2. Turd,
    Long time lurker, first time commenting. Thanks for doing such good work. You convinced me to buy physical Ag a few months ago (along with MK), and I'm sitting on a pretty stack. I ain't worried about the day-to-day...I'm buying real currency for the near future. My HR department was incredulous when I stopped contributing to my 401K this year...thought I was stupid. I told them that 401Ks are like yesterday's papers, and that there are better ways to allocate income than pissing money back into a corrupt system. They acted like I had two or three heads. We'll see who's who in short order.

    Thanks again and keep up the good work. BTFD!

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  3. So nice and...funny post!!!!!!!!

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  4. Hopefully XAGUSD is up in today's Asian session - Testing support first off.

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  5. short the spx? no chance. thats suicide.

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  6. Totally agree on "Don't be short" but have been scratching my head on why treasury bonds, of all things, are actually down over the time period in question. Tempted to be a smartypants and buy TBT, but, like you I don't want to be buried in an avalanche of POMOBucks. Please advise.

    Eric

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  7. Wow, sugar is sweet! Boy, I better stock up on my favorite Rum.
    Gold is flat. I'm out on a limb despite all the news, but Gold seems not up to speed. My thoughts this past summer was Gold at $1500 by now. Silver is well over my expectations. The ratio gap was wide, I wondered who could move better to reach the more historical number. Looks like Silver may be the one to do that in the next few months.

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  8. i've made a lot of money in commodities (mostly PM, but some agriculture as well) following jim rogers words of wisdom. i only lost money when i get fancy and tried to short things last year. it worked for awhile in the spring but then was a disaster with all that talk of hindenburg omens. luckily i ended the charade in the fall and only reduced my gains from my long positions. i still ended up way in the positive. but yes it was a mistake.

    when the POMO came in it became clear....there would be more up then down. there will be a big down at some point i guess, but im done trying to call it for now.

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  9. BOS - We need to see today - 29.70, 29.81 and 29.95 all at support pls.

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  10. wdavis: Here's your answer for gold:

    http://tfmetalsreport.blogspot.com/2010/12/criminal-evil-empire.html

    I'm going to go back and add this to the post, too. Its important for context.

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  11. Eric: Maybe buy a block of TBT and sell calls against it?

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  12. As gold gets jammed back down through 1385. What a joke.

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  13. We should just take a vacation. Fuck it! Let's come back in the summer and see what's left standing.

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  14. The problem with this casino...er..."market", is that there are not enough Non-POMO" days scheduled. For the illusion to be perfect, even bears should be allowed to make money shorting. In the future, this will be corrected and shall be done.

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  16. Technically aren't we shorting the dollar when we're buying PMs? :) I agree though, either stay out or go long something tangible.

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  17. Hundreds of millions in INDIA,CHINA,SOUTH ASIA and AFRICA are slowly joining the middle class at a time of currency wars,debasement and rampant food inflation.
    Nuff said.
    Long Gold/Blythium.

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  18. Velli! I say don't buy it. Just tell me where it is and I'll save you the bother. Silver is in a bubble you know...

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  20. My parents just ordered a 500oz Kitco bar from Kitco today. LOL! That is going to be the MOTHER of bars! They already have a lot of small denominations so they wanted something they can swap out for gold when the ratio tightens up.

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  21. This comment has been removed by the author.

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  22. I am a voracious reader of various sites and blogs (this being the best of the best) and can only speak to that which I read and in truth, "understand". Last week the prognostication was that the PM's were going to take a hit i.e. (silver-gold), silver perhaps as low as the mid 20's. We haven't seen anything but sideways moves, is this consolidation, is it the calm before the storm?. Who knows, I don't and neither does anyone else. We buy physical and we hold. We hope our purchases were within our personal financial parameters and that our speculative outlook for the coming days, weeks, months or years protects us. We know that the basic fundamentals have not nor will they change any time soon, so in reality it boils down to a waiting game and patience. All this everyday roller coaster nonsense is just that...nonsense.

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  23. 500 oz Kitco bar - this is going to be a MONSTER! and it's 9999 silver!:
    https://online.kitco.com/images/pdtimags_full_screen/silver/full_kitco_silver_bar_500oz.jpg

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  24. TF, you might find this youtuber interesting. He believes like you do, that fundamentals drive this thing, but that technical analysis can determine short term moves. Here is his latest video from today:

    http://www.youtube.com/watch?v=br4v3tVcQfU

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  25. hey reefman....you'll like this one too.

    http://www.tulving.com/bullion/johnson_matthey_1000oz_silver_bullion_bars.htm

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  26. George - Kryptonite makes Superman impotent. Do you think "Blythium" does tthe same to the wicked witch?

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  27. timpa: "Last week the prognostication was that the PM's were going to take a hit i.e. (silver-gold), silver perhaps as low as the mid 20's."
    I must ask who, exactly, on this site was calling for low-mid 20s silver?

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  28. OK...after a long time on the sidelines I have just started to build a short position S&P500 again. 1300 looks like a possible stumblimg block to me...so, if it surges...it was me!

    For the record, equities look forward x months (so time is right to apply pressure for QE forever), only way they can slam commodities (and alt. currencies) is USD strength, oil price too threatening, likewise food etc, and too much hubris. Here we go....

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  29. Here's my take on gold/silver prices "not making sense".....It's all manipulation in order to keep the belief in the false recovery. The last thing the propagandist government wants is for the general public to understand what's really going on with the super-charged printing presses. Gold/silver/oil are the common gauges used in the MSM for reporting inflation. Oil is taken care of like it has been for years...we tell Saudi Arabia what we need in exchange for military support. It's pretty easy to suppress the price of gold when your country (supposedly) far out owns any other entity. With silver it's not so easy b/c the U.S. doesn't have big supplies of it. That's where all this paper shorting crap comes in, and the mismatches developing between the paper market & the shortages in the physical market. I think silver will be the first to blow sky high once the supply demand equation is completely obvious to everyone. Gold will then follow. I have no idea of the time frame of how long the manipulation game can go on. My advice is not to try to time the market; just buy when you can & don't sell. These daily fluctuations are meaningless.

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  30. Turd...wasn't on your site...I must go back if I can and find the sites...normally don't bookmark that info as I find this info changes with the weather..."silver strategies" and "Franklin Sanders" were two as I recall...perhaps "silver bear cafe"...just can't recall, however I do recall lots of negative info out there last week...

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  31. Turd...sorry if I implied in anyway it was this site, that was not my intention...

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  32. Thanks George! That is truly BEAUTIFUL! 1000 oz of silver! Awesome!

    Here is what ONE TON of silver looks like (30,000 oz) - too bad it's not mine!
    http://www.minesite.com/fileadmin/content/companies/1105_DIA_0_Formation%20Shipment1000OzAgBars.jpg

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  33. SCOTIABANK'S SILVER ON SEPTEMBER 11TH.

    Just thought I'd remind you of what happened on September 11th, 13th, and the end of October 2001.

    ----

    Nova Scotia Bank Vault
    RICH GARLOCK: Some currency vaults owned by Citbank and Chase were badly damaged or burned in the fires that raged for 20 hours after the attack. The Nova Scotia bank vault, however, built inside the old Hudson-Manhattan terminal under WTC 4, was perfectly intact, albeit wet. FEMA's Miami Task Force marked the vault as searched on the 13th of September. We didn't go in to retrieve the metals until late October when we were able to clear a truck ramp with access to the area below WTC 7.

    PHOTO:
    http://www.pbs.org/americarebuilds/images/engineering_img_property_1.jpg


    ----

    A Treasure in Silver and Gold
    RICH GARLOCK: The vault was huge — two levels, 3,000 square feet each. When they opened the door, I realized why it was so big: there was a lot of gold and silver. The silver bars were like large loaves of bread, only they weighed about 70 pounds. The gold was smaller, but also very heavy, about 28 pounds each. It was around Halloween and I joked that I was going to come dressed as a Brinks guard. The team did a test run with the Brinks truck to make sure that it had the clearance, driving it up and then back out. The next morning the New York Post reported the vault had been emptied. In fact, it took a week to remove. The police said, "Hey, we couldn't have better.

    PHOTO:
    http://www.pbs.org/americarebuilds/images/engineering_img_property_2.jpg

    URL of this information here:
    http://www.pbs.org/americarebuilds/engineering/engineering_property_01.html

    -----------

    NOW.... the question is.... WHERE IS THAT SILVER NOW?

    Last year I made inquiries about obtaining one ton of silver from ScotiaMacotta. After a lot of run-around they came to me and said that it is "extremely cost prohibitive" to obtain that much. They obfuscated and hemmed and hawwed citing the cost of security, the TIME DELAYS and all sorts of none sense.

    In the end I did not make a transaction. I was more "probing" than I was serious. I had heard of Harvey Organ and I wanted to take a tour of the 40 King Street ScotiaBank vault. I never got to go there, but I sure wish I had perused this.

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  34. This comment has been removed by the author.

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  35. For more information you can read about this here:
    Missing Gold

    A King's Ransom in Precious Metals Seems to Have Disappeared

    http://911research.wtc7.net/wtc/evidence/gold.html


    Comex metals trading - 3,800 gold bars weighing 12 tonnes and worth more than $100 million
    Comex clients - 800,000 ounces of gold with a value of about $220 million
    Comex clients - 102 million ounces of silver, worth $430 million
    Bank of Nova Scotia - $200 million of gold

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  36. timpa: No worries, man, just wondering who on this site would make such a silly prediction ;)

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  37. In defense of Timpa ( 1st time post and love the data and site ) I also read that the PM's would come under attack - mid 20's to 27 this week but I do not remember where either - I read tons of stuff but the site evades me.

    Absolutely enjoy the comment section - Critical that we feed each other info as this thing approaches the blow up - take off.

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  38. Fascinating chart of the gold price superimposed onto the global monetary base:

    http://macromon.files.wordpress.com/2011/01/gold-and-monetary-base.jpg

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  39. @Jim are you referring to the yahoo posts about an engineered attack on the gold market in order to spook a sell off in the silver market prior to the march comex delivery month for silver?

    I don't know if I'd call this hold back a raid but I believe the short interest has been increasing and it may be all they can do to keep gold and silver from participating in the general rise in commodities recently.

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  40. 30Y-auction and Bernanke giving speech @ 1PM tomorrow. I suspect EE will pull the strings and we might have a scalping chance.

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  41. Turd, I have been in PM's since 2005, reading your blog from the beginning. The info you are looking for regarding the selloff in silver is posted below. It was written by wynter_bent, scroll down the page half way. It was also linked to by golden economizer and seeking alpha. Hope this helps. Comment if possible.

    Thanks,
    tecwax

    http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_J/threadview?m=te&bn=10073&tid=381868&mid=381868&tof=2&frt=2#381868

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  42. You have some half way decent insights, but you cheerlead yourself to much, and in a lot of posts you come across as childish, ie., the "HAHAHAHAHAHAHS", the "TAKE THAT BLYTHE!" etc... Stop coming across as "look what I called!!", when at the same time you can't answer certain questions (the China short seller confusion)... Turd, you seem a little bit a victim of some premature success syndrome when it was easy to call'em... PM's are going a LOT higher, for all of the reasons frequently discussed here, and on dozens of other blogs, but keep the "I'm the shit" flag from waiving to windy until you've called some tough choices and really helped us believers avoid a short term beat down. I value a large part of your insight because it causes me to think about my positions in PM's, and they are good insights. But buddy, guy, my brutha' from anutha' mutha', stop with the "I ceated the terms ("EE", Monkeys, etc., etc.), garbage... it comes off as uber-self marketing, and you become just "another one"... I came here because you always had some good reads in your posts on ZH. ZH has had some explosive growth in views because of the current "situation" our global economic joke has become, as such, yes, some yahoos have become exceedingly vocal there in the posts/replies to the STILL truth that is lit up there daily, and most likely trolls are really common,now, more than ever... You're fishing subscribers from ZH, yet the other day, claimed ZH had gotten too crazy, and/or beneath you. Dude.... just keep providing good insight, and when the time comes, get your "people" out of the way, help them get back in, and if your info/advice is solid, it'll grow your blog beyong 200 followers rapidly...

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  43. noquitinme1:

    Calling the Turd "the shit" is kind of funny when you think about it.

    But.... ZH has no subscribers, it's a free site. Just like this one, you get what you pay for.

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  44. Yeah.... I should have followed that advice.
    Maybe next time. And they said they couldn't print enough money. It is now apparent that they in fact can.

    This could be in the early innings like the last bubble(s) and could have 12 to 18 months to go.

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  45. Looks like they are calling it "Temporary Outright Treasury Operations" now. I think we
    should start calling it TOTO.

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  46. The food rally may be driven by stronger fundamentals than gold/silver right now. Everybody's gotta eat and the record cold winter combined with record low reserves in most countries means food prices will shoot through the roof this year. The manipulation in PMs may be there, but all it means it that the subsequent rise will be quick and violent so it's meaningless for long-term investment.

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  47. I'm more of a sceptic (not fundametally, but daily) than I think many are on this blog. I also subscribe to Metropole Cafe, and Bill 'Midas' Murphy can be a little enthusastic in his predictions too. But then he has 10+ years of running his site, and he knows how right he has been on PMs time and time again, so I'll forgive him for being emotional. I think we can be a little hard on Turd, but remember we're not here to have a lesson in anger management, but for the very good chart anlysis that TF provides, which isn't easy to come by in such a well written, layman friendly way. Fot that we should applaud him (and Turd, I just picked up a new work contract, so silver coming your way soon, promise).

    I also love Franklin Sanders' commentary (quote: 'Stocks remain the green-tinged baloney in the investment refrigerator'. Ha!). He called the December 1350-1365 gold dip perfectly, and he just seems like a cool guy. I also read Hammy's site for good chart analysis, although he now seems to be positioning himself as the anti-Turd, and is coming across as emotional and snipey as he accuses TF et al of.

    I'd love to think that PMs were about to take a hit to 1250 and 25. I'd love to see an absolute, rock-solid annual bottom so I could get my trading account going again from a solid base. But with central bank buying, asian and indian physical gold buying going nuts every time the price hits 1380, I just can't see it having another £100+ dollars wiped off it. But I'm hoping...

    Thanks again to all you guys for your contributions, which I find heartening and very good fun indeed.

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  48. Oh dear, and for all them 'mericans, I just watched silver dive through 29.4 resistance at 5am ET. Good luck!

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  49. Turd, I posted this last week:

    "It seems clear that the only thing standing in the way of a huge correction in the PMs is the BoS. We need to keep in mind that the BoS is only so big. When it becomes prudent to stand aside, they will.

    Sub-$1,200.00 gold and sub-$20.00 silver are realistic and a strategy of holding physical and accumulating cash to BT(really big)FD is one worth considering."

    My thought process is simply that the hedge funds et. al. are emotionlessly chasing profits. As silly as it may sound, I think this possibility still exists.

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  50. Pretty good running dump in the USDX this morning. Interesting Platinum and Palladium enjoying the ride just fine. Hint of paper BS in the air?

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  51. noquit: Thanks for taking the time to enter your comments. They are much appreciated. I must clarify a few things, though.

    I started this blog two months ago at the urging of others who sought a convenient place to find my daily views on PMs. ZH has gotten so huge that comments often get lost in all the individual threads. I've only continued this blog because the readership has grown so quickly and the forum that's been created seems so cool. As I said yesterday, its not about me, its now about the quality of the information that is exchanged in the comments sections. My input is marginal in its importance.
    Along those lines, I'm not vying to become the next Ted Butler. I have ZERO interest in selling newsletters or subscriptions. I'm doing this for fun and for as long as my patience and time permits. I will continue to write with HAHAHAHAHAs and Eat It Blythes because that's just who I am and I'm NOT trying to impress anybody.
    The mention of the popularity of references to Blyhte, the EE and The Monkeys were simply a reflection upon the "smallworldness" of our PM community. I know I started all the "Evil Empire" stuff but who cares? I'm not trying to copyright anything. I just think its funny that its become part of the vernacular.
    Now, regarding ZH, I love that site. Been a reader and now a commenter for over a year. Its success has been wonderful to behold and I hope "Tyler" never stops. As I mentioned the other night, however, the comments section frequently gets out of hand. However, since the majority of the readers of this site come from that site, I feel that its necessary to spam ZH when I have added something new that seems relevant. That's what this site was intended for in the first place.
    Its not that I'm "above" posting there. That's nonsense. Its just that the level of discourse sometimes makes it no fun.

    Lastly, please let me re-iterate, I really don't care what happens to this blog. Though its been amazing and fun to watch it grow to 20,000 pageviews per day, I'm just the same old Turd I've always been. I'll continue to write like I write and post opinions that are not couched in just enough ambiguity to provide cover when I am wrong. Graham from Australia asked me, in the first days of writing, to never do that and I won't. When I'm wrong (like often recently), I'm wrong. It is what it is and take it for what its worth. Thanks again for reading.

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  52. Wow, silver is running!

    29.67 from 29.40 in moments.

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  53. PM's going vertical after the morning data release.
    Eric

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  54. EVERYTHING today is screaming for a huge breakout, ain't it just? Appalling jobs report, commodities gains, euro strength. If it ain't today, surely it ain't any time soon...

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  55. I think somebody dropped a big ugly chunk of "Blythium" on the wicked witch's desk this morning. She's melting into a puddle as we watch silver catch up with the other PMs. I think her hat should go to Turd when it's over.

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  56. Hard ceiling @ 29.85, punch through that and the shorts cover.

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  57. You got that right, qussl, 1390 in gold is being vigorously defended, too.

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  58. Mr Turd, any thoughts on what the ruling on position limits will do?

    Also, the conspiracy theorist in me has me feeling that the relative heavy action of the PMs these couple of days has something to do with the Chinese Premier's visit.

    A truce before the spring assault?

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  59. qussl: I have no idea, though I suspect that ANY ruling will be used as just another excuse and cover for EE selling.

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  60. Blythe has successfully painted another FUTF on the charts.

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  61. Sheesh, did she ever. Still, nice to know you're being thought of eh Turd.

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  62. March USDX is lower than cash...

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  63. Hi Turd,
    Thanks for all the great work. You know Martin Armstrong? Did you read his piece "how & when" on gold? You agree with his conclusion that if gold blasts through $1,500 it could be the end of a phase transition leading to a low in 2015?
    Cheers!

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