Monday, February 21, 2011

The Revolution Back Home

As worldwide events seem to spin out of control, I find myself paying closer attention to the events in Madison than those in Tripoli.

We are approaching a tipping point in America. The underfunded liabilities of state and local governments for the retirement and health care benefits of their employees, current and past, has been estimated to be as high as $3T. Amusingly, regular viewers of CNBS are still being treated to an endless series of "experts" who claim that soon the Fed will "begin to withdraw liquidity" and "end the policy of quantitative easing". What complete nonsense! Where, exactly, will this $3T come from if it isn't directly created from whole cloth by the geniuses at the Fed and Treasury?

Governors and mayors are the ones who are on the front lines of this battle. New Jersey governor Chris Christie saw his popularity grow after famously telling a teacher in New Jersey to "go get a different job" if she wanted higher pay.

But its not just the big states and the big cities that are struggling. Take a few minutes to watch this segment from "CBS Sunday Morning" yesterday and ask yourself what the possible solutions are:;photovideo

Now, I recognize that there are myriad reasons for why we are in this position. Here are a few, in no specific order:

1) Politicians negotiate much-too-favorable public employee contracts in order to buy votes.
2) Pension plans make far too generous return assumptions when planning fund growth.
3) Pension funds co-mingled with general funds and already spent. (Think Social Security.)
4) The soaring costs of current and future healthcare.

I could go on and on but it doesn't really matter. What does matter is that the money isn't there. Period.
So, if its not there, from where will it come?
In Wisconsin, all the protestations came about because the newly elected governor proposed three things:
1) That current employees begin to deduct 5.8% of their current pay. That money would be devoted to the maintenance and preservation of the state employee pension fund.
2) That current employees begin to pay 12.5% of their state-provided health care costs. So, if your health care coverage costs the state $100/month, you will now have to pay $12.50/month for the coverage.
3) That some of the state employee unions will no longer be granted the ability to collectively bargain.

I'm not here to debate the wisdom or the logic if the three proposals and if this thread degenerates into partisan political bickering, I will close it. However, the implications of this "battle" are significant and I feel that they must be discussed. Why? Look at the way we are being pitted against each other.

By refusing to "pick up some of the tab" in proposals #1 and #2, aren't the public employees of Wisconsin otherwise demanding that their fellow citizens should continue to foot the bill, instead? I recognize that many teachers and firefighters are struggling to "make ends meet" on their current salaries but why should private sector employees, who are struggling with all of the same issues, be made to pick up the slack? If we are going to get thousands in the streets, school shutdowns and service stoppages in Wisconsin...for this measly level of "cut"...what do you suppose the debate will look like in the U.S. when we are finally forced into real austerity?

Again, my point is this: There will be no end to QE. There can't be. QE will go until the entire financial/government ponzi finally collapses from its own weight.

The end of the Great Keynesian Experiment is upon us and it is coming faster than you think.
You should be "preparing accordingly" right now.  TF


  1. Beans and rice. Wheat. Seeds. These will be our new currency.

  2. agree, even the tiniest attempts at austerity in this country is met with fierce resistance bordering on violence. Spending will never be cut materially, taxes will never be raised materially. Printing money is the only solution.

  3. Great post Turd. This sounds like spoiled children who never learned the value of a dollar and end up spoiled and confused.

    Mother Nature is the mother they will get now.

  4. My state employer is facing the same issues in a state that has a deficit. Our health care costs rose by 14% last year. I am on a committee to determine how to "sell" the cuts in health care to our 40,000 insured. In a recession depression) one has to tighten the belt, but nobody is willing to do that. I dare not say the "austerity" word. And my bosses won't even admit that this is more than a recession--heads in the sand.

  5. OT, A very good friend of mine (and his brother) just took 5 monster boxes from Tulving over the weekend. They also have friends buying the boxes too. They tell me Tulving is being swamped with new orders.

    All of this because of the info I share with them that I get here and elsewhere (Sinclair, Tader Dan, GATA, Ted Butler, Harvey Organ, etc...)

    Turd, the tide is changing rapidly. Kudo's to you.

    Aloha to my Comrade in Golden Arms...

    Bay of Pigs

  6. Politicians by nature have their own way of approaching or assessing situations. They deal with only the immediate problem, even if that causes more problems later. This is why big problems never ever get really solved, just postponed.

    We will suffer more if we don't do anything about it.

  7. Turd, do you think there is any reason not to try to take delivery of one contract of March silver? I set up an account on Friday at Clear Trade where I can take delivery. I can either buy a new option or move my old one over, and tell them I want to take delivery. They will do this for me. My only concern is committing that much cash if there is a real concern that the Comex might actually default on it. Obviously if they do, TSHTF and all bets are off, but I still don't want to be on the receiving end of that situation. I think I'm reasonably safe, but I'd rather not find out the hard way. I would expect it to go smoothly or be offered a cash settlement, but... any thoughts? A 20% cash settlement would be an attractive bonus, and I was planning on stocking up some more silver (though 5k oz is the upper limit of what I was thinking).

    Or do you think I'm safer just selling/rolling the option and buying elsewhere?

  8. Turd,

    I feel we are feeling the same anxiousness of the hyperinflation that is coming soon...

    What is scary is that crude is at 98$ in off hours according to zero hedge, the gold and silver markets are about to take off...

    What is your take on Ron Paul? I know you probably don't want to get into politics, but man he needs some support... In my opinion, he is the only one that knows what is going on, and has been a person I have valued as a true gentlemen and public servant. Are you aware of the Ron Paul Revolution? There is a huge youth movement building behind this mans views on constitutional government and sound money.

    My recent article showing that Ron Paul gets the situation... and has known the situation for the past 10 years...

    There is a dollar crisis upon us...
    Scott J

  9. Turd, I wholeheartedly agree. The ONLY solution is default, and the form of that default that is least painful for the most is currency inflation. It was rather instructive to see what happened in Madison at the first whiff of actual spending cuts.

    Let this whole debacle be a lesson to those who believe in government.

  10. Thank you so much Turd for all this. I'd like to venture my very admittedly novice and humble hypothesis and possible projection along the lines what you are thinking. I have been putting a few numbers together and hope I am not messing up too bad but please correct me if I'm off I can take it.

    JP Morgan Chase stock is trading at 48.00 a share, with 3.1 Billion shares total volume on the NYSE. 3.91 billion times 48 = one hundred eighty-seven billion six hundred eighty million. That means if you wanted to own the whole company outright you could buy it for $187 Billion. (of course you would only need to buy slightly more than half that to have controlling share status but it still applies to my very hypothetical idea)

    Out of all the contracts standing for march delivery, the majority of the contracts are Chinese buyers working through independent brokers (an easy way to bypass the recent position limits from cftc) Say its a record number (we all know it will be) lets say 10000, 5000 of which are the chinese buyers. 5000 contracts times 5000 ounces per contract is 25 Million ounces. Say there was a quick spike to $40 per ounce, 25 million times $40 is 1 billion. With a modest offering of even %20 on those contracts the Chinese buyers could just buy JP Morgan shares on the open market but it would be easier to deal directly with jp. Here is where I should stop because I'm probably just embarrassing myself but I have one last conjecture. If the Chinese buyers were the majority shareholders of the jp, they could actually deliver physical to the remaining contracts the morgue was going to default on at a profit to them, and by alleviating fears of delivery default push the price back down and continue the ponzi scheme, only with our main bank owned by a foreign entity. Is this scenario even possible? Please tell me I am wrong and crazy and bad with math.

  11. excellent post. Couldn't agree more.

  12. Ok I just realized the error of my statement... Currency inflation is actually the most painful for the largest number of people, but it postpones the pain temporarily and allows politicians to feel good about themselves for not screwing over retirees.

  13. If I was a sizable long trying stand for delivery and hoping for a 20% premium, if they bought me off would the premium, why wouldn't I just roll it right back into a position and stand again next month?

    I suspect this will keep happening until Comex busts. If you can get a 20% premium just for blackmailing Blythe why wouldn't you keep doing it as many times as possible?

    This is why I think we will NOT see any significant correction - everyone knows the game now and wants to get in on it.

  14. Turd
    Pretty happy about my oil trading position right now - thank you - but have misgivings about the implications for the world.
    9:20 am here in Melbourne so only 40 mins till we start PM trading - another manic day perhaps? Looking around me here there is absolutely no appreciation for the fact that the Great Keynesian Experiment is ending. We still have a real estate bubble here!
    Am nervous about general equity market pullback impacting mining stocks.

  15. Turd,

    I think we should keep in mind that much of the anger of the demonstrators is NOT about #1 and #2, but about #3. I think we should ALL be very wary of a government's attempt to take away the power of collective bargaining.

    Off topic, every time I go to trader Dan's site, I can't help but think that the two of you would make a very powerful team.

    Any chance you might think of joining up websites??? Say, like "PM World" or something like that. Get some guest posts going.

    And then, if I were in your shoes, I would really consider striking while the iron is hot, as it were, and charging a membership or some sort of premium. It doesn't have to be exhorbitant. But you're giving a LOT of free info, and after all, we ARE capitalists aren't we??

    Just a thought...

  16. Scott, I couldn't agree more.

    This whole fight over cuts is still relatively civil. A dollar crisis, rising oil prices, and rising food prices will have a profoundly tragic impact on our society.

    I remember back in 2008-2010 telling my family and friends how a dollar collapse and hyperinflation would destroy us and we would need to start planning accordingly. At the time, the prevailing wisdom was that the dollar would lose its reserve currency status maybe by 2020.

    The acceleration and speed at which these events are unfolding leads to me to believe that we will have a full blown crisis on our hands by spring. Strauss and Howe's "Generations" terms this as the Secular Crisis of the new Millennium set to peak at or around 2020.

    For me, today was a day of elation and tragedy.

  17. Turd,

    Whale Day was fantasic! Great music and lots of cold beer. Here is a video of my typical day on the water here in Maui. Bay of Pigs makes a cameo at the end of the clip (5:05). Pretty cool stuff.

  18. @ syk

    I know how you feel. I keep telling people that I feel better on days when silver and gold are down...because it eases my mind that there is still "a little bit of time" left...
    Keep up the good fight,
    The fringe is about to become normal...

  19. I would agree with Chris... I happily pay $39 a month to Ted Butler, and would happily part with a similar amount for your info Turd!!

  20. We are all experiencing inflation in what we need and deflation in what we want. We are all goldbugs because we have seen this coming. It was so obvious. So obvious that denials of not seeing it coming from economists and politicians are simply lies.

    The cake is baked and unless we radically change our thinking or simply start from scratch we are done.

    The smartest cookies already left the country. The rich smart cookies have their off shore accounts and villas in place and have the means to get out whenever they want.

    There are a few crumbs left on the table that every group feels entitled to. So while the smart ones are positioned and ready we will gouge each others eyes out to take from our neighbors and try to protect what we have.

    There is only one solution and we all know it. Devalue the Dollar against all else. When that fails then, and only then, will there be any possibility of a gold backed currency.

    You can bet that TPTB already know all this and have prepared for the day when we are not fighting over whether the teachers should or should not get health care cheaper than their private counterparts. They have prepared for the day when the greenback will not be accepted as currency and we are fighting over stale bread.

    So while Gold may buy your way out of the country it's not going to keep you in the lap of luxury.

    Watch Ireland as that is the test market. What happens there you will see here. They just happen to be on the fast train to taxing everyone to the poor house. The general public is still in denial and slowly working their way through their savings and the govt is giving the peoples pensions to the bankers.

  21. We can expect many challenges in our daily lives in the near future.

    If you have not taken steps to protect yourself and your loved ones, please do so now while we live in a land of plenty. Chris Martenson states that we should strive for resilience in our daily lives.

    How many sources of water do you have? Do you have any stored? How many days of food do you have stored? Can you heat your home if your electricity is cut off? Tinfoil hat questions? I don't know, ask someone from the countries who is experiencing civil strife.

    Chris has a great free tutorial here:

    It only takes 45 minutes. I believe you will find it is time well spent.

    As Turd mentioned before; think of it as insurance.

  22. I could not agree with you more Mr. Turd. Your analysis is dead on correct.

  23. Richard Russell didn't point out to his clients to get out of dollar related assets in a comic strip!! He knew; knows we're in for a dollar crisis!! Bout 15 minutes PM's open up full throttle!!

  24. If the Over/Under bet on the End of the Great Keynesian Experiment was 12 Months (for the US) would you bet the Over, or the Under? What say ye?

  25. Just saw this article about China silver and gold demand:

    "China’s Industrial and Commercial Bank(ICBC) reports that purchases of physical gold and gold-related investments are growing at record setting rates.

    In January alone ICBC sold 7 tons of gold– almost half the 15 tons it sold in all of 2010. It also sold 13 tons of silver in January– almost half the 33 tons of silver it sold to clients during the past year.

    Zhou Ming, deputy head of the precious metals department at ICBC believes that gold and silver purchases are replacing property speculation in China as the preferred investment."

    If that's true, HOLY CRAP!

  26. I think there are some misconceptions in this post. First, the unions in Wisconsin have agreed to the deductions in pay to go toward the pension fund and health care costs. The only thing that they are fighting is the attack on collective bargaining.

    Second, my understanding is that the governor of Wisconsin just signed a bill giving a major tax cut to the wealthy in the state. He then turns around and starts talking about unfunded liabilities. Well, why are they unfunded?

    This goes for the situation at the federal level too. We all know that the bankers who caused this economic collapse are making even MORE money than before the collapse. At the same time, governments are cutting taxes on them or allowing them to escape taxes through loop holes. Next to this they're cutting entitlements and services, all while killing buying power by letting inflation run free. That equates to a real-life tax increase for everyone else. The cost of riding the bus goes ups, the cost of food goes up, the cost of energy goes up, the cost of housing goes up. At the same time, wages go down. Social security is cut, so working people have to spend more time and money taking care of their elderly relatives. Benefits are thrown out the window. Etcetera.

    The end result is that millions of people are thrust into poverty, at the same time that a handful of the most venal and amoral people are thrust into the stratosphere of wealth and luxury. The picture speaks for itself. It is the same social system that is/was operating in the middle east, and it will not stand. It is not a matter of the little guy tightening his belt like everyone else. It is a matter of the rich tightening the belts of the little guy in order to loosen their own.

  27. I completely agree with you! I say let them rough it through hard days, which I feel for them, but better them today then all of us tomorrow!

  28. I live in Wisconsin and spent the day up in Madison Saturday. I dropped in on the Tea Party rally and spent the rest of the afternoon counter protesting. First of all, the unions have already agreed to the requests by the governor regarding the increased contributions. The real issue is collective bargaining. As I watched and listened to the protestors, it became apparent the majority are there because of the unions bosses want them there. The teacher's union has convinced its members this is about their students. It isn't. It is about money. The teachers union is there to represent the interests of the teachers. The school board is there to represent the interests of the students and the taxpayer. The taxpayer is broke and the unions don't care, period. The republican senators are now playing chess with the 14 missing democrats. The republicans will win. This bill will pass. When it does, it will take root all over the country. This is a Berlin wall moment in history for this whole country. Pay attention.

  29. Even with so many AmeriCON'd awakening & preparing for the great Keynesian experiment to implode! As paper money burns to ashes! Still so many neighbors are blind people walking through a mine field! Walkin hand in hand with Keynesian to finacial destruction! My good friend & neighbor looking at a parcel of land he's about to build on, I've talked silver with him too many times, I thought he'd have the guys in white coats come for me today~! I mentioned only this!! I said silver spot at 33.90! He says what little he has he'll sell!! I said nothin & we continued on with his building project!! I don't know other than to just say for most, the truth won't be known until it bites'em in the ass, takes their head off, and body bags'em financially!!!! Nough said, as others have expressed their frustration also!!

  30. Dmitry Orlov compares the collapse of America to that of the Soviet Union in this video. Very insightful and relevant analysis.

  31. Turd,

    Your facts are straight, but I disagree with your premise. The government probably will default on its obligations rather than hyperinflate.

    You underestimate the EE. What the cartel is doing now is lining their pockets with newly printed cash. When they are sufficiently fed, they will short the stock market, pull the money printing rug away, and then they will buy up all the assets that are of use to them.

    How can Congress or the President make the Fed continue to print money and buy debt? They cannot. The facade of the Federal Reserve can vanish, but the wealth will have long been safely removed. Just like Mubarak left only after he moved his assets.

    The banking cartel does not care about the United States of America. When they have sucked this place dry, they will leave to find another host to consume and infect.

    There is no rosy outcome to any of this. When the price suppression scheme is defeated, there will be something much worse to complain about.


  33. This comment has been removed by the author.

  34. Yeah it looks like it is almost going vertical. Lots of itchy trigger fingers during that close.

  35. Debt jubilee is the only solution (a total system reset of all assets and debts to zero).

    The only winners are the holders of hard assets - land, gold, and silver. The new currency will be barter of Silver until the government establishes another one.

  36. Yes, Turd, I believe you're right that there isn't enough money. As the boomer generation goes into retirement, there is no way we can keep up. However, the media is comparing acorns to oak trees in some cases. If we squeezed $100,000 of savings out of every teacher in Wisconsin over, say, the next 10 years -- there are 60,000 teachers in Wisconsin -- that would mean $6 billion of savings. Sounds good.

    But we spend $4 billion every single year on ethanol subsidies that do absolutely nothing for anyone except corn farmers.

    In Texas, a report from the Rice University’s Baker Institute for Public Policy concluded that “based on the latest available US GAO data, which is for the year 2008, the US government spent $4 billion in subsidies to replace about 2 percent of the US gasoline supply. The average cost to taxpayers for these “substituted” traditional gasoline barrels was roughly $82 per barrel, or $1.95 per gallon on top of the gasoline retail price.

    We will end up spending literally trillions on Iraq-Afghanistan when it's all done (if ever), trillions on the banks' bailouts, many, many billions of farm subsidies, we have around 5% of the world' population and we spend 46% of the entire world's military budget.

    I'm not sure teachers are the biggest target for savings out there.

    Doesn't matter on which side you vote. We have dug ourselves a mighty deep hole and we just keep digging.

  37. Holy moly.
    What will this overnight bring? possible.

  38. It would be political suicide for the government to default on the debt domestically which is the largest portion of their liabilities. Defaulting on their bonds is one thing, but the unfunded liabilities like SS, Medicare, etc. insures they will inflate to the death of the dollar. Hyperinflation is the only way to kick the can down the road, and would also suck the maximum amount of wealth from the country. They have no realistic alternative option. Imho

  39. @Jack

    and nary a folk in this country owns any land that isn't leased from the government

  40. A friend in Sydney Australia reports: a store has changed its sign from "we buy gold" to "we buy gold and silver".

  41. Could the Treasury simply default on the FED portion of the debt? What would this do?

  42. Crude is out of control. Holy crap.

  43. Good point about Public Service benefits Turd... it's the politicians that push for resolution and kick the can down the road (I always try to remember that when railing against public service advantages).

    Also, to be fair, most benefits were accepted in lieu of wage increases... even though they seem to be willing to accept the cuts, why should they when Wall Street's still making out like bandits (the Governor's first act was a $120M tax break to business).

    Finally, 1 & 2 were not factors in the protest... the union busting over-reach of the Governor is the reason for the protests (justifiable in my opinion).

    IMHO this is class warfare directed by Koch Bros Inc (one of the Governor's largest contributors btw)... nothing more.

    * Isn't it amazing to see PM's trading in relatively free market conditions, without the Comex Banksters!

  44. Another harvesting of undercapitalized weak hands?

  45. This problem has been approximately 100 years in the making... let's just "randomly" pick 1913 as the starting point.

    It has been an "equal opportunity" mess in the making. Bickering about "libs vs. conservatives" and/or "Dems vs. Repubs" is idiotic and counted on.

    The recent Deficit Panel's recommendations, failure to get a majority to sign off on them, and the accompanying failure of our Executive and Legislative Branches to act in a meaningful way definitively pointed out the following for us:

    1) We are on an unsustainable path. One that we cannot simply grow, tax or cut our way out of if only one or two of those are attempted. The problem requires immediate, significant action in the form of cuts and taxing and must include SS, Medicar/caid and Defense.
    2) Our politicians do not have the backbone to make such changes. Do not bicker with me here about Tea Party this or that, NO ONE is leading a meaningful push at entitlements/defense and they won't until we have a catastrophic event such as one or more major cities, municipalities or states go belly up. But it will be too late then.
    3) We (as a Nation) do not have the stomach to endure what is necessary and we won't until as above, something near catastrophic (as in 2 above) occurs and again, that will be too late.

    I can get "liberals" and "conservatives" alike to agree on all of this. It is the predicted result of 1-3 above that stuns me in conversation.

    I can get all walks of people to agree that given 1-3 above, some form of "badness" MUST occur and it ranges from what I call the "Japan Scenario" (moving sideways for a decade) as the least painful outcome to "Total Social Collapse" at the other end of the spectrum. "Great Depression Redux" is in the middle for me.

    Now, here is the difference between where I am and where the other end of the spectrum is: they see the "Japan Scenario" as the "worst case" scenario with "Great Depression Redux" as "highly unlikely" and "Total Collapse" as "impossible" where I see "Great Depression Redux" as "most likely" with something between that and total collapse as certainly in the realm of the possible and have spent the last 2 years planning for it accordingly. And the beauty of that is, even if we have what I call a magic "POOF!" moment where everything gets better, I don't think I'll be out any money as things like commodities and land will do just fine if/when things get better (I'm a fan of Jim Rogers in that sense).

    I'm rambling a bit, but here is my summary and I'm in agreement with TF 100% here.

    I think we all agree on my 1-3 above. Therefore, in order to keep the party going, we cannot allow interest rates to rise and we cannot allow ANYTHING to fail... so... QE to infinity/party over.

    Here is my favorite "argument ender" when talking to people who fail to see where we are... I say the following to them: "You pick, Athens or Rome, I'll fly us there right now. When we get there, I'm going to point at a big ass building that is somewhere between 3-5,000 years old and ask you just ONE very, very simple question... 'Do you think those guys EVER thought it would end?'" It gets them EVERY time... but then they still think "Japan Scenario" is worst case.

    ... sorry for the length, I'll finish this in one more post.

  46. 'New Jersey governor Chris Christie saw his popularity grow after famously telling a teacher in New Jersey to "go get a different job" if she wanted higher pay.'

    Is a race to the bottom in teacher pay a good idea? Is education where we really want to cut corners?

    The other issue is that this is not about the budget -- this is about politics. Messing with the teachers to pay for tax cuts isn't really going to make any difference in the budget. The same thing is happening with "austerity" on a national level. For example They are going to close a lot of clinics, de-fund programs like head start, etc which are proven to be very cost effective and actually save money down the road. It's politics, and it doesn't even scratch the surface of the debt.

    It is also a very slippery slope when you remove people's right to organize and negotiate. It;s fascinating that in this case so many people suddenly become pro-government and anti-worker. These people have already agreed to take cuts in a time of inflation. Taking away their right to bargain is not a good thing. Many people here don't seem to be fans of the labor movement, but a lot of people fought and died for workers rights, let's not throw that away under the phony pretense of balancing a budget.

  47. 5 months ago I turned part of the basement into long term food storage and now have several months supply along with water and water purification. Of course I have long been accumulating silver. Last week I passed the conceal and carry class and have stock piled guns and ammo. All the while trying to raise awareness with videos and photoshopping stuff. Yesterday I installed security/surveillance system. Now I am tired.

  48. wow, what a rollercoaster. keep arms and legs inside

  49. All of my work is in 2d and 3d world countries (Central/Eastern Europe/Russia, Afghanistan/Pakistan/Central Asia, parts of Africa)... I don't count the 3d world countries in what I'm about to say because their entire life is CURRENTLY about surving TODAY, not worrying about the future... my favorite country (for whatever reason) that I work in is Ukraine and I have spent a lot of time talking to very old people who survived the Holodomor (Stalin's famine), WWII, Soviet Times and then the collapse of the Soviet Union. Their stories are FACSINATING and you better believe that Ukrainians that live in the countryside (big city people are stupid worldwide) are all preparing now for another economic collapse. You can go into any bank branch in any sized town in Ukraine and right there at the teller you can by tiny 5g, 10g and 20g gold "bars." Sounds silly, but cheap and very BARTERABLE/useful in a crunch... an ounce isn't.
    And on that final note, a lot of us have probably already made a "ton" of money and stand to make a lot more over the next year, but if and when the crunch comes, if you think your PMs will get you anything DURING the crunch, you are sadly mistaken... the pile of gold and silver will buy you everything AFTER the crunch, so keep that in mind.
    I'm done rambling... love the site, have learned a lot, have made great money and am sitting on my physical while converting my paper to other, tangible things, and have dropped Turd some coin in the donation bin.
    If anyone is interested in a story from a friend of mine from Ukraine that is only 26 years old on how his family survived the 1990's economic/post-Soviet collapse, let me know and I'll post it. I firmly believe we are headed for this at least at some localized levels within 5 years... maybe not the next two, but all bets are off 3-5 years from now.
    Take care everyone, time to try to figure out my options strategies for going long on gold and potentially shorting silver paper for March 1.

  50. And Helloooo JP Morgan! dropped silver by 50 cents... its a trap! runnnnnnnn!

  51. Guys the more I watch this action the more it falls in line with exactly what WB said to expect before he disappeared. Think of it as harvesting more ammunition. Take from weak and give to the strong. It's a good thing.

  52. flaunt, thinking the same thing. i like to see the FUBM's as well. i like to see them as more long players coming in. at this price point i see this as a good thing

  53. TF,

    The sooner you get out of providing this free blog of valuable information, the larger the number of people who cannot afford this information will be left out of learning about how to protect themselves if every other analyst/well-trained specialist does this. Remember, analysts are paid whether they screw up or not. Like Dan or one of the other people said, "Unlike an analyst paid to put the story out pro or con, if I have skin in the game, not only do my readers get hurt from mistakes, but so do I."

    The larger the number of people left out, the worse this situation is going to get. Thanks to Ted going paid, I can no longer get his stuff unless some of the people like GATA, Ed Steer, Jason Hommel, etc. forward some of the info to us readers. Ted was the original silver specialist I learned from. I have read his entire work written when he was not yet paid. He made me branch out into everything else connected to money.

    The reason I advocate some sort of way to keep this information flow open to all is because I am but a common wage earner working part-time because historically, I kept getting shoved out of industries that collapse at the end of bull markets (though I know better now) and/or jobs are outsourced. It sucks being a deaf woman, but it goes with the territory and requires extraordinary skills in staying employed/ahead of the game.

    I got into underground financial research only because I moved down from a good-sized city to a very large city to play in a rock band with no clue of financial knowledge and met one of the fans of the band, whom I have seen trade in 100-oz bars right in front of me at coin shops like they were chocolate bars. The person introduced me to silver as a store of value, sound money, at Christmas by giving me jewelry and a silver Canadian Maple in 2004. I was told to read all of Ted Butler's works. It went from there. I had NO IDEA my life would turn in this direction.

    I'm grateful for this education I have received for the last 6 years, eternally grateful, as it gave me grounding in my life and an understanding for why things happen the way they do. I have an understanding that my peers in town do not have.

    Thank you for the information you provide, TF.


  54. Paging Blythe, paging Blythe...oh you're here, okay, hit the sell button please, thanks.

  55. External obligations will be reninged upon, spare face-saving gestures (think eurodollars - the 1980 rumors) and the domestic dollar will be replaced by a new currency. This constitutes an effective devaluation, but it is unlikely to be widely recognized.

    Monetizing gold is at this point a foregone conclusion -- there exists no functional alternative.


    Statism is the biggest obstacle to freedom. What we see in Wisconsin, Libya, Tunisia, and rest of ME is linked by one common thread. The problem is gov't of all kinds.

  57. Oil, silver getting "disorderly to the upside". How long until gold joins in?

  58. Come on, Blythe, bitch... Hit that sell button, and I'll hit that buy button. Can you imagine what would happen if I had met her and fell in love with her, and then I learned about silver like I have, and then realized what she does for JP Morgan? I'm glad she's not my partner...

    Woo hoo, bitchez! Away we go!!! Looks like Blythe dropped the ball. Hopefully, she won't know how to handle the rugby ball we handed her this time.


  59. beinki - if you're still here - I have been looking for an unable to find a good resource for proper food and water storage measures. Can you provide some advice?

  60. Tis very sad,
    Doesn't seem to matter who "wins" or "looses" this round.Bottom line no one will get what they think they deserve because all they are receiving are iuo nothings. Soon they will fight for the last loaf or gallon. We are in "The Fourth Turning", those who cannot see this have little chance of making it to the other side relatively whole. We will all be giving up much while giving more.This is CHANGE we can believe in. If you follow Armstrong you would know we are in a revolutionary cycle.Political social and eco structures are shifting big time. Take pictures as things will look quite different 5-15 years from now. But for now,my wahine a me keiki a me I too enjoyed C&K,Anuhea, John Cruz and others at Whale Day. Next stop BARRYFEST I'll be servin up the bbq pulled pork and quinoa salad plates.
    A hui hou malama pono!

  61. Fortinbras wrote:...You can go into any bank branch in any sized town in Ukraine and right there at the teller you can by tiny 5g, 10g and 20g gold "bars."...

    Those sound awfully cute — I want some for future medium size purchases. ;-)

    I've got mercury dimes specifically for small purchases — easily recognizable in the USA and no counterfeiting concerns.

    Funny how real coinage works: in the late 1960s, I could purchase a gallon of gas with two of those dimes; today I can purchase more than a gallon of gas. At $33 / oz silver, two dimes are worth $4.76.

  62. Fascinating! What a week this promises to be. I know Santa has always counseled to expect huge volatility in gold when it really gets going. I can't help but suspect that we may see a little bit of that in the lovely white metal market. Buckle up all.

  63. Badu, I bought this 3-month supply for myself.

    Seemed to be inline with price compared to other supply houses and is Mountain House. Also have 5 or their 5-gallon water carriers.

    You can read forever about differing styles of what to stock and store. I got paralysis by analysis and just said f-it and pulled the trigger on the above.

    Also have a Jetboil system for boiling water in a pinch. I've used mine for years on hiking and camping. Love it like no other piece of camping gear.

  64. All the big guns are comming out this week , its going to be like the OK corral . This is it, the show down on wall st. Let mortal kombat begin!!!he he. I feel like Im watching the playoffs.

  65. "what do you suppose the debate will look like in the U.S. when we are finally forced into real austerity?"

    This is precisely the question that needs to be asked. Short answer is that it will not be pretty and it will be best seen from afar through an LCD monitor.

  66. There isn't enough money in circulation to pay everyone's pensions without taking out more loans. This is because we aren't using Bona Fide money or money made in good faith, without fraud or deceit. If we didn't have to borrow money from the Fed at interest things would be much better! It only benefits a very few as most of you know.

  67. I would think the debate would like Egypt, or Greece

  68. Scottj88 said...

    "The fringe is about to become normal..."

    We aren't the lunatic fringe, we're the sensible selvage!

  69. @Fortinbras

    I try not to make long posts, but if I was to make one, I would want to say most of what you said. :) I have seen people in a former Soviet republic chopping down trees in the city park with meat cleavers to get wood to heat their homes. This not some theoretical situation we are talking about.

    I think I would enjoy talking with you offline.

  70. @ Roger Knights

    Hehe... :)
    I wish everyone thought such as you :D

  71. Turd,
    I know a wise man who once (not long ago) said:
    "By raiding and selling, you're only compounding your problem because you are creating more open interest! "
    The last few days' action might show that she can't raid anymore?

  72. What was Santa thinking scheduling TRE's AGM for Feb 22?
    Oh wait...

  73. DXY spiking up but silver doesn't care any more.

    Pat, here's hoping Santa has some presents for us! Are you going along to the meeting to be the reporter for us all :)

  74. Hi all, I could use your help on this one.

    I currently don't really use credit cards and have been sent a few 0% 12 month APR offers.

    What do you think about maxing these out on silver eagles?

    Thanks...I'm really struggling over it

  75. Turdle,

    Toronto in February? In my best Dave Chapelle voice, "N---- please

  76. Blythe: It didn't fall? INCONCEIVABLE!
    Rupert: You keep using that word. I do not think it means what you think it means.

    I used one and am not regretting it. I can afford the payment long term. Are you willing and able to pay down the card within 12 months?

    But don't take my advice. There are some good traders on this board.

  77. Turd...Au and Ag are going you think Silver will reach $40 by next Tuesday, March 1 and Gold will pass all time high?, wow, should I buy here not matter what or wait for any dip, if any...a couple of weeks ago we were straight down, now straight up...time has arrive to start take big desicions, thanks for answers.

  78. TF:

    totally agree with what 6a1dbcdc-3c89-11e0-b484-000bcdcb8a73 said re: keeping the information accessible going forward.


  79. @Campagnolo...

    struggling with the same thing here. Limited $ to invest in long term silver, and I try to avoid chasing price... but then again sometimes the train leaves the station and never comes back

  80. Tyler- Just my 2 cents worth, but I have read in this forum that you can get a JPM chase card with no interest for 12 months... and you could max it out, make JPM foot the bill for a year, buy silver, and use all of it against them. That idea sounded quite good to me, but I really have worked to hold no debt so I didn't do it. Interesting idea, though.

    Now, WHEN to buy is another matter- remember back in the dark ages when we were really hoping silver would just hold above 30$? That was last Monday... so now, I think you would have to be really careful to not buy at the (short term 1 year) top.

    Things are totally crazy right now, so who really knows how this is going to go... personally, I think we will see some breathtaking upward action, then when the bleeding of the shorts stops, a big retracement (and buying opportunity). So if this happens, the wisdom of that move would depend entirely on when you buy... but hey- thats just my opinion.

    Best of luck to you, sir.

  81. @CO_DAN

    I am very interested in your last post on the previous thread. Are you saying you're long on AGQ up to OI of 20,000 and that's your trip wire to start shorting?

    I welcome any others' thinking on this, also. I currently have long option positions on SLV.

  82. guys, maybe this is a little off subject, but i think it may be lost on most (Americans)of us that we have a lot military personnel sitting smack in the middle of the one region of the world that is catching fire right now. Prepare for the worst, hope for the best, Pray for peace.

  83. Tyler,

    Those 0% cards have a 3% transaction fee. Course, 3% isn't bad since us subjects don't get to use the Fed discount window.

  84. "Tyler- Just my 2 cents worth, but I have read in this forum that you can get a JPM chase card with no interest for 12 months... and you could max it out, make JPM foot the bill for a year, buy silver, and use all of it against them."

    ROFL!! I have done that but for $500 EXCEPT that I would drop a transfer balance check they send out with the statements in the bank account, then withdraw it. That way, there's no paper trail when I go to make my buys.

    I dollar average on the down side. I put down $100 when it was down to $27. Larry Edelson over at Uncommon Wisdom THINKS it's going to correct down to possibly $22. At first, he though it would correct lower, but it hasn't so far. When it gets under $25, I'll put a little more down. If it keeps dropping more, I'll buy a little more every time. I like having this cash on the side at all times so that when I see a large drop, I go in to retaliate. If it doesn't drop and instead does multiples of current price or any higher than it is, I'm sending the unspent money back and paying off the balance next month. I was hoping it would drop, and keep dropping. Normally, it does in the context of Indian seasons and market manipulations, but now you got the short squeezers, CFTC involved, AND especially the Chinese public involved.

    Blythe cannot be allowed to win this one...


  85. Tyler, Dont go crazy , there is going to be a dip comming next month . Dont get the eagles the premiums are off the hook right now.3-4 bucks on top of spot.

    The best buy right now is 90% junk coins , a roll or two of Mercury head dimes or Franklin halfs ,or whatever is comfortable to pay back.

    I would say something to hold is better than nothing. dont look short term , we might not hit 50 until December So dont over commit yourself.

    stay patient, if silver corrects down into the 20's then make your move.

  86. don't know when the currency will collapse - a day, month, year, 5, 10, 20 - could happen at anytime or when the TBTB decide to change the game.

    The thing about inflation is no one, not even central banks, can pinpoint the actual inflation rate. They can do it years after the fact but they cannot accurately tell you what the % rate is today nor can they accurately predict what it will be in the future. I would surmise they are better than ever at controlling and managing inflation and the accuracy of their private inflation #'s but still, they cannot know for certain. What is troublesome of course is the crazy amount of money printing and the effects such printing will have down the road. Another poster mentioned it the other day - once they decide to print, to achieve similar or better effects, they must print even more money than before. What's scary is generally, money printing led to a 'boom' and thus perceived economic prosperity. What we're seeing today, imo, is money printing that has not created economic prosperity. GDP is likely contracting. Central banks really are in new territory. Some call this the keynesian endpoint. There is no doubt in my mind we're in the final stage of collapse but the question then only becomes one of timing and when your neighbour realizes one day they are holding worthless paper. And our neighbours won't realize it until TBTB, powerful world govt's & central bankers decide this game is over so we can move on to the next one.

  87. @Fortinbras: if it's OK by Turd, I'd be very interested in hearing the story about your Ukrainian friend's family. Please do post.

  88. Great post Turd - reading this, it reminded me of George Carlin's 'The American Dream' rant (a classic):

  89. Dave, Carlin fan. Currently reading his autobiography. He had a very interesting childhood to say the least that shaped the rest of his life.

  90. Great story entitled "The Box of Money" on today's Daily Reckoning.

  91. All I can say is thank god the pacific and the Atlantic provide us with some protection. Because you can bet your AZZ we would be in trouble. We are very lucky to have and live in North America CANADA or the U.S.A....

  92. The unions agreed to demands 1 and 2. The Guvinator is holding out for #3, The Big One - the mother load: The elimination of the one effective tool labor has to combat the greed of big corporations ... the killing off of the unions' ability to collectively bargain.

    I'd encourage you to read this article for a different perspective on union busting and what it means for the standard of living of all working class Americans.

    Chomsky: Uprising in the USA?

  93. Great post Turd and I think you ask some very important questions there.

    It is my belief that we have a Military, Industrial, Banking and Government complex that are all one and the same. Have you ever noticed that even though we "change leadership" yet the country still heads in the same direction? It is the same thing that Dwight D. Eisenhower was preaching against... that's what we have now.

    Eventually the world will say enough is enough and the dollar will become the next British Sterling.

    Two points I see are our main sticking points regarding discourse in this country:

    1. The vast majority of people want something for a perceived nothing because it's been promised to them by a politician. This makes the people feel ENTITLED to something to the point they begin to refer to it as a RIGHT. 2. Even if we paid all of our money in taxes we can't pay for everything that's been promised.

    It's a horrible situation.

    I did spot something the other day that reminded me of those BLACK SWAN events that are mentioned from time to time.

    That's taken off of Drudge Report. Something ELSE to think about...

  94. For those that asked, here is "1 of 3" posts from a friend in Ukraine. Ruslan's in his late-20's and this email is his experience growing up in post-Soviet collapse Ukraine (1990's/early 2000's) during a time when everything broke down... no currency, no laws, largely no infrastructure. He speaks pretty good English, but this is as he typed it and I'm not going to clean it up. Anyway, I hope some of you find this useful/interesting:

    Hi RJ,

    It is always interesting to talk to you. Unlimited all-side subjects – always interesting.
    I have time and it is actually even for myself a pleasure to remember how everything went those times, although it was tough. It will be a short essay, so some points can seem a little too open and long. I will tell everything how it was.

    I’m 4th and last child, 2 older brothers and 1 sister. I have one more brother from 1st father’s marriage (my father paid alimony until he was 18, but I’ve never seen him).

    I will talk about Crimea, Simferopol (region I’m from on the south). I think the rest places were in the same situation, maybe eastern industrial cities (Donetsk, Zaporizha, Dnipropetrovsk, Harkiv) were much worse cause huge gangs were fighting for factories, trying to share influence. People got berried by hundreds somewhere in forests. Some of the heads of criminal organizations are in parlament. Not far to go for examples the richest guy in Ukraine – Renat Ahmetov…
    1990-1995 – hardest times.
    Right after Soviet Union collapsed Both of my parents had no job: I told about my father’s work and how he got thrown away; my mother quit work (telephone operationist) because 1st computers (very harmful) were installed at her work and people started to die from cancer or some other decease one after another within 1 year. I remember a story my mom was telling to my father – one of her colleagues got up in the morning and her hair left on the pillow. She died 2-3 weeks later.

    Father lost job in 1991-92, short after – my mother quit. We did not have any savings, as I told father converted it into goods. He is a very smart, intelligent, educated, clean living person, but those times were not for such people. Those times were for crooks, sport masters (all fighting skills) that later formed racket gangs, officials, that had access to what was abandoned by collapsed country apparatus (police, military officers, tax depts., judges etc), and of course, no doubt, for skilled merchants, that had some connections. A lot of the last ones got killed back then not finding common language with bandits. A LOT!

    It really was a mass everywhere. No laws worked and corruption was everywhere. One Guy, the head of criminal group, when he was drunk, sometimes was throwing grenades at road police from the car of his window and nothing happened to him until somebody from other gang killed him.
    I remember my father’s car got hit by some cool car. The guy just came out, looked at his car, and said to my dad: Just leave. My dad started to oppose – the guy just took out a gun, and without pointing it anywhere repeated the phrase. My dad just left on a damaged car… Like in westerns…

    I was 6-7. But I already was understanding that we had problems. Once I came up to my dad and asked: Mom has no job? He said: Correct. I asked what will we do? He, repairing his old shoe, replied: Try to survive.

    Around 1993 we started to sell what my father had stocked before final collapse came. First my brother tried to sell at the bazaar, but then several guys came up and said that he has to pay for his place to them. He was 16 back then. He couldn’t pay as much as they said so he left that bazaar. Then my mother started to sell what was available at some other place were a lot of people were passing by, just on the street, like you sometimes can see.
    ... see #2 of 3.

  95. #2 of 3.

    I remember pretty much everything we had in that room, which was stuffed up to the ceiling: Even though I was little, I really accepted the stuff there as something precious and sometimes just came in and counted what we had.
    What we were selling:
    - Cigarettes – Boston, President, Rodoppi etc. A lot, I do not remember how much we had.
    - Tea – different kinds, I’m sure now 1 box could cost like 50 $, cause it was real Indian tea.
    - Coffee in seeds – big 1 kilo yellow packs.
    - Instant coffee.
    - Matches (incuding huge hunting ones)
    - Toilet paper
    - Soap – bath and technical

    The rest stuff in that room that we did not sell , included
    - 6 tires (4 of them got stolen 2 weeks after my dad put them on the car), several car batteries,
    - sugar – 15-20 sacks x 60 kilos – we exchanged it with friends from my mother’s village (she was born in village) into different kinds of vegetables, fruits etc.
    - refined cube sugar – couple sacks, flower – couple big sacks, sack of salt,
    - 2 bicycles,
    - Several cognac boxes – precious “thank you” to friends, doctors (to make sure they will not save on anything on you), EVEN TEACHERS… We exchanged it couple times on dishes, car details...
    - And VODKA!!!!!!! Arround 50 boxes, 20 bottles in each. Nobody in my family was drinking. Dad actually made a mistake by buying it, cause it was expensive in USSR, and became real cheap later. But it was good old quality, and between 1990-96 nobody produced it good. People were drinking some home-maid shit produced on some illegal small garage factories. It could be poisoness, harmful, half water half clean alcohol. People knew it and we could exchange it, pay with it etc. This was the most hard and well excepted currency. From time-to-time you could barter it for anything and any kind of services, like plumbing, car parking payment, etc. Later it became nothing, but we had no left by then. Now it would have cost a lost, just like a sign of soviet union. I feel sooooo sorry that no left anymore, it probably could go from auction now.

    Things I remember that could support our normal existence:
    1- Mother was selling first stuff we had in our room, then cigarettes we bought by blocks and sold them by packs . We all helped by taking her cart with table and big bag to the place. I remember I came to her at least once a day to bring something to eat and drink and to make sure she has not run out of some brand (there were like 40 brands available). We brought from our home stocks if she did run out of sth.
    2- Father worked wherever he could, mostly not for long, but mainly arranged our “trade corporation (sounds very funny)” . Philip Moris would have been surprised if he knew what a big imput we made to his business
    3- Room stuff. We were exchanging, selling, eating it, it helped to live the first hardest year or two.
    4- Father, with no legal help, won court process in 1995 and 1997 against his employer. They paid him compensation for like 4 years, minimum salary value. It was tiny if we take as for a month, but for 4 years accumulated pretty good bonus.
    5- We had friends in mother’s village. We had a lot of farm goods from there, just exchanging what we had to what they had. And it was not like dealing with them. We just brought and gave them as a gift what we had – tea, coffee, vodka, cognac, and they just thanked us with what they had: fruits, vegetables, etc.
    ... see #3 next.

  96. #3 of 3.

    We didn’t see anything those years, I wore cloths of my brothers, I still remember how I was embarrassed to wear my oldest brother’s shoes (14 year difference in age). The food was poor but I can never say that we didn’t have anything to eat. We always had and I was never hungry. The rooms capacity was not that big, but it helped us to live for 1-2 years. Then we started to buy cigarettes by blocks at big bazzars and sell it by packs. That gave like 10-20 % profit, like 2-3 hundred dollars a month. But those dollars had much higher worth. Parents converted coupons (name of our currency before 1995) into dollars like every two weeks, inflation was huge. We all were poor millionaires. Finally 1 hrivna substituted 1 00 000 coupons and inflation was partly taken control of.

    Things were getting a little better. The whole country started to develop. Criminal groups were exterminating each other, government helped in this. I remember that in 1998 special secrete forces came to Crimea from Kyiv and just took care of the most obvious criminals. Main spheres of influence were shared and big guys started to solve questions in more civilized way.
    Father worked at different places, mainly not oficially. My mother was selling cigarettes until 1999 (for 6-7 years) until parents bought a house and moved to it.

    Tired to write, the rest I can tell you some other time. Sorry for so long essay, it just went real fluent. AND it amazes me that I forgot that I actually lived in such times. It really was pleasure to recreate the past. Best regards, Ruslan

    I have a zillion more stories like this from Ukraine and a bunch of other places that are generally crappy or experienced hyper-inflation... most of the stories are from really old people who are only alive today because they hid honey bees in the forest, but there are actually lots of places in the last 20 years that have been through this stuff, we just made fun of them a lot... and said that it could never happen to us! ;)

  97. Thanks very much for taking the time to post this Fortinbras.

    I have read accounts of people in Argentina as well and it seems to be that luck favors the prepared but still madness everywhere they turned.

    I've told about a dozen friends in different parts of the country what I was doing over the past year. A few months ago, 1 took me up on it. He's a marine captain who just returned from his 4th tour in Asstan. HE gets it.

  98. Marcus - I highly recommend that you read the article posted by FOFOA regarding taking out physical from GLD. This may be just what the Chinese are doing at the moment: