Monday, February 14, 2011

Monday Recap

A fine start to the week, wouldn't you say?

Things were rolling higher right away this morning. We faded some into the close, more so in gold than silver, but that's OK. The silver close is particularly constructive as we've made it above $30.50 are are hanging in there. I suspect that The Forces of Darkness will soon have to give up the fight at that level and will be forced to retreat to their final line of defense at 31.13. Obviously, that's not very far away and we could reach that level as soon as tomorrow. The fight there will be epic but we will win, of that you can be assured.

Our PMs got a big boost from DrC today. Take a look at this chart:
With a follow through tomorrow and a close above 464, you'll inevitably see strength pour over into the PM pits. This alone should drive silver toward $31 and gold through 1365. However, even if copper stalls, these charts look great. Look at silver:
Now basing above $30.50, there is nothing from a technical standpoint that will keep it from a run back up to the 1/3/11 levels.
Gold continues to underperform them both but I have a feeling that that is about to change. In fact, I feel so strongly about it that today I began building a position in the $1400 April calls. Take a look at this:
And this from Trader Dan:

I suspect we'll hang around 30.50 and 1360 into the overnight hours. Perhaps we can get some decent buying overnight as we head into Happy Tuesday.

More later. TF


  1. The "Spin" Masters are out in force ....

    Silver Shortage Blamed on "Miner Hedging" as Price Rises with Gold, Global Inflation Data Eyed

    It sure looks like all systems are go for liftoff. The MSM must educate the Sheep as to why prices are rising.

  2. Just in case you missed this info in Turds last post - here again:


    boy, you folks are slow here ... there's a reply by lady winter for louis cyphers call made a few days earlier here:

    Now check out the latest posts by Lady winter - good luck with the puzzle! lol

  3. Recently, Dr. Willie and others have suggested that the correlation between M2 and gold is .934.

    I hate to be the bearer of bad news, but the correlation between m2 and gold is .46498.

    I can understand the error. If you plot M2 versus gold over time, and take the r^2 value of the chart (in excel you come up with .9324)

    The .9324 is the R^2 between M2 and the DATE (in excel dates are actually numbers). So running the rsq function in excel taking m2 and the date variable as your inputs yields .9324.

    Taking gold price versus M2 yields .46498.

    You can recreate my calcuation by going to WGC and the Fed for the dater.

    Just thought I would share this with the board, and also to see if I did something wrong in my own calcuation.

  4. Spencer said...

    "Does anyone have an opinion on if AGQ would still be a good investment in the event of a comex default considering that they trade paper?"

    Anyone investing in AGQ needs to be aware that you have counterparty risk with JPM since they run the ETF. Also, the underlying assets are most likely futures contracts, so counterparty risk with Comex as well. I'm going to try to sell my small position near the February/March peak and probably stay out after that.

  5. While all this "Lady Wynter Benton" puzzle stuff is interesting - it does smack of a middle-school "truth-or-dare" contest.

    I guess, for me, I've grown out of that phase - although I do have to admit that I am interested in seeing Blythe Masters taken down.

  6. Turd,
    Should deflation hell break loose, where would you sell physical gold and silver if you bought at these levels?

  7. Wynter Benton clue: "Louis Cypher = Lucifer"

  8. Stay out of all paper trades in PMs if things begin to look jiggly EXCEPT miners. Even PSLV could be at risk...thats why the safest be is physical holdings. These etfs will be ZERO/frozen

  9. @Rick,

    The hyperinflation has already occurred from 1971 - 2000's. During that period gold was shunned.

    It is only during the deflation period that gold gains nominally with respect to currency because central banks are trying to stop deflation. Assets bought on credit with US dollars during the hyperinflationary period will be extremely affordable in terms of gold after deflation takes place.

    These ideas are from FOFOA.

    It all depends on how one defines deflation/hyperinflation. FOFOA believes that hyperinflation has already occurred. The only thing left is deflation - and it is that period of time where gold shines the brightest.

  10. Keep in mind that after the Weimar HyperDEFLATION in the 1920's, one could purchase a city block in Berlin with 25 ounces of gold.

  11. Loving the reverse head and shoulders in gold

  12. Pm stocks seem decently bid today so odds on gold rising tomorrow look good. Stock option expiration this week so EE will want to keep contained as much as possible for calls to expire worthless.

  13. Turd, been following and mostly profiting from your calls for a while. I'm getting my feet wet trading paper because I feel like I want to participate in the action. I have a good chunk of our assets in PMs under lock and key, but I want to participate in the moves as well, at least with a small portion of the portfolio. I'm sure I'm not the only one on the board like that.

    I have a question about your trades. I've been buying calls and puts on SLV and GLD, but I gather you trade in futures options. Do you buy options on GC and SI? I've read that betting on futures is a lot more profitable if you get it right. One thing jumps right out at me and that is that the April 1400 calls are $1090 for a contract, whereas the options on GLD obviously give you flexibility to buy in smaller increments. SI is even more because it's 5000 oz at a time, but there is QI as well (1,000 oz). Any pointers on that would be greatly appreciated.

  14. One more general question I forgot to ask. Do you hedge at all with out-of-the-money puts just to cover your behind? I have a lingering fear that some major drop in the markets will affect silver and gold as well, at least in the short term. If that happens, I'd like to have some downside protection in place. I've bought some Mar 28 puts in SLV to protect a little bit of the profit in my calls, but I'm sure I'm not maximizing my potential there.

    By the way, your site is like crack (from what I've heard)... I can hardly focus on work these days. Thanks! :-/ At least I'm making some money on it.

  15. Whoa! Glad to be back here and see this. I slipped briefly to FOFOA (gold-only) blog. The "enlightened" are selling their silver eagles (at what will probably be lows) and trading them for gold. Fine. Great. I own both. But scarcity and multiplying factors are on silver's side. Even in a "freegold" scenario, silver will be treated with a whole lot more respect than it is on that blog.

  16. picked up some more AGQ. let's make it rain tomorrow

  17. Seriously, coming onto a board and calling everybody "slow" is not the way to go man.
    Suggest to grow a pair of social antennas before typing...

  18. Hyperinflation has already occurred? I think there are too many definitions floating around out there about what hyperinflation actually means. I think the best definition I've heard is that it's a panic out of a currency. We have seen nothing like that in the U.S. dollar. Inflation has occurred, but hyperinflation? I don't think so. Gold wasn't "shunned" in the past, it was actively depressed by central banks and the government. There is plenty of proof of it. To suggest we've had a free market in gold any time in the last 40 years is hysterical.

  19. R Man J:

    I love it. Sell all my Eagles postulating an Armageddon scenario. Ignore fact that Armageddon scenario brings HUGE black market premium for Eagles. Hmmmmm... I'll keep my Eagles. lol

  20. @borte:

    Hamster has an almost fetishistic obsession with the Turd. Kinda scary actually. Thought the Turd banned him when Hammster kept calling Turd a "one trick pony" etc.

    Turd is a bigger man than most of us I guess.

    Hamster thinks a lot of himself -- best to just ignore.

    But on the topic of Wynter, I may be in minority, but I think there is something to it. I just think we don't all quite understand it as well as we think we do.

    We shall see...

  21. Totally agree with R Man J, I've been reading FOFOA lately, and am almost done with "Another"'s writing. It's great info and a fascinating view, but I don't understand the lack of respect for silver.

  22. @Chris
    I agree but I couldnt just let it go, I've read it all. Some people do it just to emphasize themselves and its really low imo. I know I know, best to ignore..

    Yep we will see in the coming week and next if there is any merit to the story. I think there might be something to it as well, maybe we're just the minority but we shall see...

  23. R man J

    I just posted my first at FOFOA and do have to agree with a lot of what is believed there. I am presently 100% in silver, accumulating from a GSR of about 80 to 1 until now. I do plan on going to 50% on each and reevaluate at that point. Of course, I won't even begin to trade until the ratio is about 25 to 1. I believe there is a better chance of immediate to medium term gain in silver, but feel 'naked' without gold too.

    A comment from the sunday thread regarding living in "trying times" ahead. Some mentioned having/using guns if some sort to protect family, food and stash. Count me with that group. What I want all of you planning to be armed to do TODAY is to give deep thought as to exactly what circumstances you would shoot. The time to have those inner arguments is now.....not when the situation is staring you in the face.
    Remember that there might be a very desperate father outside with kids who are more than just hungary. I have also started to stash some bulk necessities so that I can help others in addition.

  24. I am willing to accept that FOFOA understands gold with revelatory power that I will never have. I might postulate that it is a site for gold-savants who are idiot-savants about silver. No disrespect meant to hem because I have benefitted from sites like his because I have over the last four years moved urgently into gold. But I have also over the same period moved urgently into silver due to comments by Turd and Lennon Hendrix on ZHedge.

  25. FOFOA is talking about a FreeGold theory designed by European central bankers using both gold and FIAT to balance a system. I told him it's not stable as long as FIAT is not fixed to the gold while he insisted that's the best way so it's been back and forth in the discussion and there's no agreement on that.

  26. To understand how hyperinflation has already occurred, research Exter's Pyramid:

    While I read and enjoy FOFOA, I too am a little skeptical in the "gold only" mantra.

    FOFOA explains that hyperinflation has ALREADY happened:

  27. One thing you have to consider when thinking about gold vs. silver. FOFOA is correct in that the GIANTS, and the smaller GIANTS, own gold. For better or worse, TPTB are TPTB. It is good to try to see through that prism of thought and perspective. I myself read everything I can, from FOFOA, TURK, TURD, SANTA, everybody.
    I have yet to form my own opinion with any degree of certainty, other than I want to own both gold and silver and their proxies, real proxies, not SLV or GLD. If I knew enough about it, and could afford it, I'd own a small farm also, with a few animals, with solar and on-grounds wate supply, and a greenhouse for year yound veggies.
    I may get there one day, not so much for me but for my kids. And everything you need to learn is available, if you have the willpower.

  28. From FOFOA's blog:

    "Now when I say we have already hyperinflated the $IMFS (the Dollar International Monetary and Financial System) over the last 30 years, I am referring to this whole top pyramid:

    "When deflationists see monetary deflation, they are looking at this part, and they see the value of the dollar in this circle rising:

    "When they see price deflation, they are looking primarily at this part, and they see the value of real estate and other things in there falling:

    "But they are missing the significance of the bigger picture; that the credibility of the entire top of the pyramid is deflating. And it was this credibility that was holding all that sand up there in the first place. With the value of the top red circle falling and the value of the bottom red circle rising, the deflationists see "deflation."

    "But what I see is the beginning of a capital flow, in one particular (and significant) direction:


    Take it for what it's worth. It's AN idea, A concept. I think it's a very different and intelligent concept.

    I am a TRI metal guy: gold, silver, platinum.

  29. Curtains: If I'm doing the math correctly in my head, I think that options on futures provide roughly a 10:1 higher return rate than options on GLD.
    But even if that's incorrect, I've made it clear that I want nothing to do with GLD, SLV or options on them.
    Re: futures options, these folks are very helpful:

    Rick: Keynesians be damned. There is no general deflation scenario. Maybe in a few sectors like housing but overall its inflation all the way as the only "fix" our current leaders will ever consider is QE to infinity.

  30. Mr. Turd,

    Just curious if there's any way to activate hyperlinks in our posts? Seems we have to copy and paste all posted links. Ok wait...maybe just I do??? Well, I do anyway...only your links work when I'm viewing the site. Everyone elses are "dead". Just me?

  31. I like reading FOFOA's blog. I believe his view on Silver stems from observations of the "Giants", Central Banks, and views passed down from ANOTHER and FOA. What are "Giants" accumulating, what is on CB balance sheets? What are the historic monetary roles of both metals?

    I'm learning everyday and don't have the absolute confidence to be 100% Gold or profess to know how the end game will play out. I guess that's the $56k question.

    So I am hedging with positions both in physical Gold and Silver.


    believe this was posted in yesterday's blog comments section but post it again after the FOFOA reference above. Simplifies economic mgmt, money supply, inflation, etc. much better than a keynesian economics degree at an expensive university near you.

  33. There is some seriously absurd backwardation showing on my silver futures quotes when you get out into the 2012+ contracts.

    March 2011 is at 30.55

    Jan 2012 30.02
    May 2012 30.00
    Jul 2012 29.81
    Sep 2012 29.98
    Jul 2013 29.93
    Dec 2013 29.91
    Jul 2014 29.89

  34. FOFOA himself seems to have some banking background, which may explain why he believes in theories by Another and FOA (two central bankers) a lot, which consequently leads to a lot my disagreement with him that this thing is manageable by central bankers.

  35. I’ve done alot of FOFOA reading myself and I can’t help but be impressed by his knowledge and ability to explain a complex issue in layman’s terms, even though I still don't get all of it. I agree that silver should not be a form of money, simply because playing a monetary role denies it the ability to affectively serve its more important functions. Silver should be used for its industrial applications, anti-bacteriological qualities, and so on. Gold is a store of wealth because that’s what it is. Silver is a store of wealth because it is an undervalued wonder metal - and, in my view the better “investment” between the two at this particular moment in time. Silver doesn’t have to be money (or back money) to be the better investment, I think silver has outgrown that. I keep my holdings at about 50-50 as well, but silver is still my favorite.

  36. Save_America1st ... that is possible, just insert the html syntax for a link: *** click - this is just an example link ***

  37. and btw this is the syntax: (a href="url")visible text(/a) ... replace ( with "smaller than sign" and replace ) with "greater than sign"

    Save this string into a textfile on your desktop, replace the ( and ) and just seconds are required to post a hyperlink:

    (a href="url")linktext(/a)

  38. Pretty weak showing by the silvers today (AG, EXK, AXU) in light of a 2.3% move in the POS. SLW had a decent day and my AGQ kicked some tail.

  39. Jay, yeah, AVL was up midday at 6.67%, to close at 0.54%. What's up with that?

  40. Turd,
    this is your 195th posting since you started this adventure.
    I just wanted to thank you for the fantastic service you are providing us.

  41. Jayhawk, I believe it's options expiry week for US equities so bet on the funny games with the miners.

  42. Turd, don’t be mad but I just have to post this, then I have some beer to clean off of my monitor. A good friend of mine (and a closet goldbug) who works on Wallstreet, just informed me per email that he saw Blythe:

    “She passed me riding a brand new silver bicycle, strangely she was grinning from ear to ear. Not an evil grin mind you, but a certified verifiable “shit eating grin”, know what I mean? Given that today was a very bad day for her from a trading perspective I could ascertain that there were only two possibilities for her facial expression. Either she has her very own big stash of physical silver, or whenever the spot price of silver climbs above $30.50, Jamie takes away her bicycle seat!”

  43. UEC was up 9.5% today from $6.20-$6.77. I like this one above $6.85 and currently in off hours its up another 1% to $6.83. Holding off until morning to see how it looks then.

    URRE did pretty good today with +4.5%. I like this one above $3.35 and am also waiting until morning before placing bets with this one too.

  44. Turdle: I wonder if I could find a publisher who would interested in picking through the highlights by November and printing: "A Year with Turd" or something some such?

  45. AGoldhamster...

    thanks man...yeah, I get ya on that. Works well. Posts definitely look and work better with live links. Here's my test link:


  46. Wynter Benton zzzzzzzzzzzzzzzzzzzzzzzzzzzz

    FOFOA zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

    Me, I'm kinda feeling like Harry Schultz's last letter:
    "Wake me up at $2,400 gold"

  47. Turd,
    sure you can, and I'll be the first buyer.
    But to get to a full year we need to get past $1,600 by June 10 first ;)

    As an aside, I can't believe that my Mr. Conservative, Private Equity Fund Manager, MSM-reading and believing brother was in my office this morning telling me about how his wife was making little felt sachels to store his first 20oz silver bars. But the kicker was when he said that he told his wife that she should keep on sewing, as he was buying more! He is converted!

  48. Why isn't anyone here taking a stab at what AIN means?

    "I am here to play devil's advocate (or more accurately Louis Cypher's advocate) and document what will happen as we approach $31.

    Again, you "AIN"t seen nothing yet."

  49. Eric Is A Big Doofus

    Ok, so Saturday we are having a nice polite discussion about our picks in the miners, and Doug writes in that he likes Aurizon. So of course I promptly respond with a comment poo pooing the idea. This morning I buy some more miners and of course AZK is NOT one of them. So....wait for, AZK is up 6.34%!!!

    Story of my friggin life on these miners..... :(

  50. To Winter_Benton,
    Got your t...... message. How did you know I like puzzles? I thought to deeply about it at first then went to the obvious. Do'h!

    Anyway, I'll let you decide if you want me post the info or let people figure it out for themselves.

    Good luck to you Sir!

    P.S. I would reply to your t....... message but that would only leave a trail.

    Ah, the plot thickens. We shall see if the game is afoot though.

  51. Louis Cypher,
    I though WB made it clear that you should decode the message for everybody:

    "Louis Cypher should be able to decode my message and enlighten all those here of what I have already predicted about the next up move in silver.

    So come on Louis Cypher, you wanted a prediction and I have already given you one. Now decode it for everybody!!"

    So, spill the beans!

  52. Turdle,
    I'll let WB make that call because it's not clear whether he/she/they want to be public before or after the fact.
    Not trying to be a dick about it but we are talking about money and we are talking about something that may or not happen.
    So I will let WB make the decision to release now or later and then it is up to you to DYODD.

  53. Turd,

    Do you have any medium or short term predictions on the price of gold in euro’s? Sorry, if the question was easy, I would have answered it myself. I’m thinking Euro drop to at least 1.32 short term, with gold prices following the dollar move up. My prediction is more from the gut, but wtf, my TA sucks…

  54. Sorry Louis, but who are you? I don't recall having seen you post around here until very recently.

    No offense but to me it's like some unknown person "WB" and some other unknown person "LC" supposedly talking to each other in code and when some event happens LC will let us know if it happened according to WB. Kinda sketchy to say the least.

    How about you tell TF who we all know and then HE can tell us afterward?

  55. I love this blog. Please don't crowd it it up with nonsense LC.

  56. Just had to add my two cents to the discussion. I have seen a lot of talk about FOFOA and trading physical silver for physical gold. I can point you all to one guy "Ted Butler" that has said to drop physical gold and get into physical silver. Ted's damn smart and if you subscribe to his newsletters he lets you have access to all of his writing. The man has 30 something years of experience with analyzing the silver market.

    To the argument that maybe silver shouldn't be used as a currency and a store of wealth, IT HAS BEEN FOR 5,000 years prior to our current fiat based system(s). Hard to argue against 5,000 years of history. You can argue until you are blue in the face, but history repeats itself right?

    And a note to Turd, thanks for giving us the info on what you are buying/trading/selling etc. I like seeing someone put there money where their mouth is and then letting that be known.

  57. I agree with flaunt LC. To hell with Lady whatever and the cryptic nonsense. Turd is throwing it out there everyday what he is doing. His words and following through with his actions give him weight. BS and cryptic nonsense do not give one weight. I don't mind talking about theories etc... the open exchange of ideas... but come on. If I met Turd in real life I would shake his hand and buy him a steak if he let me. If I met Lady bla bla, I'd punch her in the damn mouth for being a distraction.

    Silver is going to go up and it isn't going to be because that lady willed it up. It's going up because of market fundamentals, the end of manipulation and the end of a big ass ponzi scheme.

  58. Flaunt- Well done, sir. A rational skeptic after my own heart. Personally, I was wondering how we are supposed to DOODD on internet rumors from anon. sources as LC suggested... what does this mean, exactly? Would be happy, however, to suspend disbelief in light of evidence to the contrary, were such evidence proffered.

    Silver seems VERY well bid at 30.50 after (US) hours- not many sellers even at this nice run-up from 26.50 in a fairly short period of time. If we see 31 tomorrow morning, will the traders among us be taking profits ahead of the expected EE attacks Wed? Just wondering...

  59. Flaunt,
    Who am I? Nobody or maybe legion :)
    What appears as cryptic only appears cryptic because you would have to dig through a weeks worth of messages on this board to follow the storyline.
    I simply challenged Winter Benton to provide some proof and the way to do it. I invited Winter Benton to email Turd or any well known blogger with a prediction or post the prediction on another forum under a different name for posterity.
    Somebody from this site posted the challenge on the Yahoo message board or WB read it here.

    WB may or may not have emailed Turd or someone else. I don't know and I don't visit the Yahoo message boards very often. I only found out about the counter challenge when AGoldhmampster pointed it out.

    WB responded with a challenge or puzzle to me to find the post. I found the post.

    If WB wants me to post the info before the fact that is his / her / their call and I will respect that.
    I'm sure someone else may figure out the clues and post them. I don't know. I did take a screen shot with the prediction.

    I am not taunting or playing games. Not my style.
    End of story.

  60. James, JimmyTheHand, Flaunt,
    come on you guys, lighten up. Just about everything discussed here is speculation about how/why/how much the prices of PMs and miners will move. We are all anonymous posters and our comments are pretty much equivalent to "internet rumors".

    Turd has ruled out discussions about politics (and religion, I think), but not WB, at least not yet.

    If nothing else, following WB has helped some of learn more about how the COMEX works, which is useful.

    Loius, please keep posting. Turd controls the delete button around here, and I'm sure he'll use it when warranted.

  61. PS the DYODD means just that. Make your own investment decisions based on what you know not what someone tell you.
    Remain skeptical because even if what WB is saying is true they could just as easily stab you in the back by flipping short. Hedge funds are not known for their charity.

  62. Jimmythehand,
    OK I'll play. No more rumor talk until there is something substantial to say.
    I have a 30/60 weighting (physical) in Golds favor right now and will probably stay that way until the ratio starts getting towards the 16:1 historical ratio. When that happens I'll flip the silver to gold.
    The only problem with Ted's premise is there really isn't a cheap substitute for Silver out there for the electronics world. So everyone, not just the usual suspects, have a vested interest to get it cheap and keep it as a commodity.

  63. Great and fun stuff here but I did just post a new note.

  64. You touched upon the main idea I am driving at Turdle GG. We are all anonymous, I argue that I come here for two reasons 1. Turds commentary and 2. The community that posts comments regarding Turds commentary and questions etc. You say lighten up, but I just don't like the diluting of the comments section to a bunch of cryptic BS about lady wynter. Turds educates and says what he means and backs it up. This talking in code and cryptic mess, its nothing but a distraction. You argue that people may have learned about how the market functions from all the cryptic nonsense, I argue that they could have learned a lot more by seeking to understand what Turd talks about every day over trying to decipher lw junk.

    It's not my blog to decide one way or the other, but I wanted newbies to know that you don't have to try to decipher all of the LW stuff to begin understanding how all of this works and to understand why investing in Gold and Silver are a good thing to do.

  65. Jimmy The Hand - I think Ted Butler is great and he may very well be right about Ag. I also follow FOFOA and his views make a lot of sense (after two years of reading and studying A/FOA archives). I see value in holding both metals as well as the miners. All I know is this .... If you can sleep at night then you've made the right decision. We're all in this together

  66. Turd,
    That 2yr Au trading range is looking as good as gold, no? Price keeps kissing the lower channel and snapping back. Driving via rear-view mirror, but...trend's your friend until it ain't.

    Spencer, Stan,
    I trade AGQ and DGP, but I invest in physical.'re dealing with the devil with these funds (Harrimans, Bushies, IG Farben, etc) so I wouldn't stay in them for any length of time. Personally, I use them for intermediate scalps (weeks, months). When I get stopped out: paper profits to cash and cash to physical. My own little personal physical collection machine uses their leverage, plus 3 bonuses. 1) The funds are likely being used by TPTB to unwind 4+ decades of Au price manipulation, allowing me time to accumulate physical. 2) I end up buying physical on the dips. 3) Sell the paper funds to pay the tax man his fiat.
    I Fester

  67. AIN message board
    yahoo finance. if its true maybe a reason to believe WB. dunno. does it really matter?

  68. Wynter's "AIN" cryptic post revealed?:

    "since you were defining whether we "won" or lost versus blythe last week, I will define what our group considers winning and losing. If by the middle of march or sooner, silver trades above $37, then we consider it a win. If during this timeframe, silver trades between $33-$37, then we consider it a draw. If silver does not trade over $33 during this timeframe, then we will consider this a defeat.

    That is our standard definition for a win, a lost, and a draw versus Blythe."

  69. JimmyTheHand

    FOFOA could only tell you what A/FOA had thought of what was designed in Europe last century back then where there was neither globalization nor BRIC influence. Lots of things have changed since then and I don't think there's enough gold for everyone so this rush out of FIAT will easily spill into silver to jack it up.

    FOFOA did offer interesting and helpful alternative views even tho I completely disagree with quite a few things he said including his call on silver.

  70. It took me 30 minutes, but finally i figured it out - now, let watch this test.