Wednesday, March 16, 2011

All Eyes on Japan

As the headlines get progressively worse, the main thing to note in the discussion here regarding the PMs is that today is quite different from Monday. Whereas stocks are again taking a beating with fears rising of a "catastrophic event", the commodity sector is generally higher. Whether or not this is a harbinger of upcoming trend remains to be seen but its certainly noteworthy. As mentioned Monday, eventually rational minds will prevail and the PMs will be bought and not sold on this disaster. Are we beginning to see this become trend? Time will tell. In the interim, as news worsens, expect the PMs to trade lower. How low, however, is what we need to try to decipher.

Here's a 15-minute silver chart. I count 7 bounces off of the 34-34.20 level. That's pretty stout support. Don't get too excited just yet, however. News of a disastrous radiation leak may bring back the panic selling of Monday so, for now, lets watch and see if $34 can continue to be the floor.
The gold chart is interesting in that you can clearly see the struggle it is having at 1405. Again, old support becomes resistance and vice versa. We do not want to see the 1390-92 level broken, however, as that would mean a retest of the lows of yesterday is most likely coming.
Again, I'm still sitting tight. If I understand the situation correctly, there are no remaining employees at the Japan plant so nature is most likely taking its course, unencumbered by human interference. For me, this would seem to be inevitably leading to the "catastrophic event" so many are predicting. That wave of "worst case scenario actualization" may drive gold and silver to the targets I mentioned yesterday.
http://tfmetalsreport.blogspot.com/2011/03/patience.html
And I'll reiterate, at 1370 and 32.50, I'll be looking to do some buying.

Lastly, reader Walt sent me this note from the "National Inflation Association". I'm sure they're a bunch of fun to hang out with...doomsday economists are always a barrel of laughs. Nonetheless, this is a pretty interesting read.  More later today. TF


Tsunami of Inflation to Hit U.S. with Japan Crisis
 
The earthquake, tsunami, and nuclear disaster that hit Japan this past week and the destruction that it caused is nothing compared to the tsunami of inflation that will soon hit the U.S. as a result of this crisis. A tsunami of inflation in the U.S. will mean a complete collapse of our monetary system, which could lead to millions of deaths due to a lack of food and heat. 44 million Americans are now dependent on food stamps, but when the U.S. dollar becomes worthless as a result of hyperinflation, the government will no longer have the power to support these Americans and many of them will simply starve to death.
 
Japan's citizens were smart enough to save up $885.9 billion in U.S. treasuries to spend in a situation like it finds itself in today. The U.S. has no such savings and is the world's largest debtor nation. Our ability to survive depends on our ability to print money that has purchasing power. The only reason the U.S. dollar still has purchasing power is the dollar's status as the world's reserve currency.
 
All Japan has to do is sell their U.S. treasuries and they will have the financial resources necessary to rebuild the parts of their country that were destroyed by this past week's disaster. However, U.S. Treasury Secretary Timothy Geithner said on Tuesday that he doesn't think Japan will unload their $885.9 billion in U.S. treasuries. It remains to be seen if Japan will do the right thing and sell their U.S. treasuries or if they will make the mistake of continuing to artificially prop up the U.S. economy.
 
The Central Bank of Japan (BOJ) in recent days has already been repeating many of the same mistakes the Federal Reserve made in the U.S. After this past week's disaster, the BOJ printed hundreds of billions of dollars worth of yen in an attempt to prop up their financial markets. Japan's central bank should be raising interest rates, which would encourage its citizens to increase their savings so that they have more resources to rebuild their country and invest into the production of clean energy. By printing trillions of yen out of thin air, the BOJ will cause prices to rise for the very building materials the Japanese need to purchase in order to rebuild.
 
Although the yen has been rising in recent days, it would be strengthening a lot more if it wasn't for the BOJ's actions. In fact, NIA believes that while the yen may continue to rise in the short-term, the yen is now likely to lose a substantial amount of its purchasing power over the long-term. Instead of allowing the yen to strengthen so that it is cheaper for the Japanese in import copper, iron, steel, oil, natural gas, and other commodities needed to rebuild, the BOJ's actions are actually hurting the Japanese and having the effect of propping up the U.S. economy in the short-term.
 
The mainstream media frequently talks about Japan's national debt and how it is 225% of their GDP. However, Japan owes most of their national debt to themselves. We have a much worse national debt crisis here in the U.S., where we owe half of our debt to foreigners. Not only that, but once you include America's unfunded liabilities for Social Security, Medicare, and Medicaid, along with its debts for Fannie Mae and Freddie Mac (which are now government backed entities), total U.S. debt obligations now exceed $76 trillion.
 
The Japanese economy reached peak consumer spending in 1990 and entered their "Lost Decade" of deflation with a balanced budget, high savings rate of 15%, low unemployment rate of 2%, and a net debt to GDP ratio of less than 20%. The average American peaks in spending at age 46 and the last babyboomer just turned 46 in 2010. This means the U.S. economy just passed peak consumer spending, similar to Japan in 1990. Instead of entering this decade from a position of strength, the U.S. has entered it with a real budget deficit of $4.3 trillion, a savings rate of only 4%, a real unemployment rate of 22%, and total debt obligations that are 5 times higher than GDP. We won't be so lucky to escape this decade with deflation, but will instead be faced with hyperinflation as the world loses confidence in the U.S. dollar and rushes to dump their dollar-denominated assets.
 
When Japan comes to their senses and realizes just how dire the fiscal situation is in the U.S., they will realize that they are much better off investing into their own economy and abandoning the U.S. economy. Just the fact that Geithner is now saying that he doesn't expect Japan to dump their U.S. treasuries, illustrates just how nervous the U.S. government is about the U.S. dollar and how devastating it would be for all Americans if the Japanese did dump their treasuries. No amount of tax increases and spending decreases will ever allow the U.S. to balance its budget. All the U.S. government can do is talk up a strong U.S. dollar, because they have absolutely no real way to keep it propped up.
 
All NIA members know that Geithner is perhaps the biggest liar in the U.S. government today. Geithner has long said that the U.S. will not monetize its debt, yet the Federal Reserve is now the buyer of 70% of U.S. treasuries being sold. Foreign central bank purchases of U.S. treasuries have fallen from 50% down to 30%. The days of the U.S. exporting its inflation to the rest of the world are now over.
 
The U.S. just reported a record budget deficit last month of $222.5 billion, a bigger deficit than the entire year of 2007. Up until today, the U.S. has been paying off its debts plus interest by selling larger amounts of U.S. treasuries to new buyers. This is effectively a ponzi scheme, although the U.S. government will never admit it. Even if Japan doesn't sell the U.S. treasuries they already own, that won't be enough for the U.S. to keep this ponzi scheme going. The U.S. needs Japan to keep buying U.S. treasuries, but not only that, they need Japan to buy larger amounts of U.S. treasuries than ever before. The odds of Japan increasing their U.S. treasury purchases during this time of crisis are close to zero, they simply don't have the financial means to do so.
 
If Japan doesn't step up its U.S. treasury purchases, who will pick up the slack, China? Geithner infuriated China last year by calling them currency manipulators and since then, China has been rapidly expanding the yuan's use in cross border transactions and is now setting up the yuan to be the world's next reserve currency. NIA believes China is likely to stop buying U.S. treasuries, and will instead loan money to Japan to help in their rebuilding efforts.
 
It is unbelievable just how many of the economists featured by the mainstream media are calling the disaster in Japan a "stimulus" for not only the Japanese economy, but also the U.S. economy. When a country is forced to rebuild an asset that it already had, it is not stimulating the economy, but is spending resources that could have went towards increasing the production of goods and services. When Japan is eventually finished rebuilding the parts of the country that were devastated this past week, the country isn't going to be better off than they were before the crisis. They will likely be even more deeply in debt, with less foreign currency reserves, and a much larger money supply. The Nikkei will likely be a lot higher than it is today due to inflation, but the yen will be worth a lot less and the Japanese will be far less wealthy as a result.
 
America has nothing to benefit from Japan's rebuilding efforts. Most of the commodities that Japan will import as part of their rebuilding efforts will likely come from Australia, China, and even Canada, with very little of it coming from the U.S. All of the fear and uncertainty in the world today is not going to cause another rush into the U.S. dollar like there was in 2008. When the world dumps risky assets in uncertain situations, the U.S. dollar is going to become one of the risky assets that it dumps. With all of the world's central banks now fixated on printing money in order to "solve" any short-term economic problems, gold and silver will be the new beneficiaries of all safe haven buying during times of crisis. Don't let yesterday's dip in gold and silver fool you. Precious metals were due for a dip and would have sold off no matter what. Now is the time to load up with precious metals before the Federal Reserve begins dropping hints of QE3.
 
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us

139 comments:

  1. Turd I would not quote NIA, google "george4title scam" and you'll see what that site is about..

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  2. Been following NAI longer than ZH or TMFR. Good info.

    @CA Lawyer: Please check previous post for my response to yours.

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  3. Anyone else REALLY TIRED of having their money (investments) stolen from them by these corrupt SOB's?????
    Would like to know when "they pay the piper"!!!
    L

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  4. G4T may run a scam or maybe it's just a G4T hater. I don't know. That's why I take everything on the internet with a grain of salt and mostly for entertainment value. Yes, even TMFR.

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  5. peter schiff made a nice video on youtube on this yesterday or today. i saw it this am watch it. theschiffreport on youtube

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  6. EA,

    If you want to get MVW moving upwards, the trade volume really needs to increase. Gee, if you could be so kind to inform those of us with interest as to why this is such a great investment (other than what you've already posted), you may just see more interest in the stock.

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  7. Sorry to cut and paste, but I was the last post on the last thread and didn't want this discussion to get lost:

    DarkPurpleHaze

    I am always surprised when people treat a statement like yours as a conspiracy theory. It just seems so obvious to me. The Fed is so opaque - there is nothing they would not stoop to.

    Something my hubby and I were discussing the other day I would like to throw out here:

    how does the US treasury going belly-up play out? Suppose they tell all the banks not to refuse any of their cheques (all the direct deposits from payroll, etc.), they can sort of hide it domestically for awhile. If they default to a foreign lender can the dollar survive? I can't even figure out what a state going bankrupt would look like. The reason I ask is because timing is going to be everything. I also fear a quick slaughter of the stock market causing a spike in the dollar, the banks buy suppressed PM's and then the dollar fails.

    But back to your post, it just isn't crazy to think the Fed is behind all this and doing it to accumulate massive silver and gold holdings for their friends before this whole scheme blows up.

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  8. I told you guys to stop catching falling knives. The truth is this, if you can handle it: The commodity complex will continue to be sold off as long as all of this correction plays out, however long that takes. Until the margin calls stop, the selling will be brutal. I said last week the market correction was probobly upon us. Well, it is. Plan accordingly.

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  9. Back to cash once again. I'm finding my state of mind returning to 2008 when I became a day trader only, no swing or long term holds, for the better part of the year because of the risk associated with holding overnight. These flash crashes on the Nikkei becoming more prevalent. Possibility of millions fleeing Japan. This is absolutely unimaginable.

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  10. Silverrun, I don't get it, MVW is up from $1.09 to $2.40 since I mentioned it here a week ago. What does volume have to do with moving it? It doesn't need it. The highs keep getting taken out, thats all that matters, UNTIL.. The big brokers push it you are in before them. How luck you are.

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  11. EA,

    I've been reading the NIA site for awhile now and found it quite informative. At least they seem to be more honest and report on the real world. Can't say that about the statistics that the US GOVT puts out (job numbers, inflation). To exclude energy and food costs from inflation numbers is idiotic.

    Now maybe in Canada, you can trust your Govt. I envy that, and I am a big fan of Canada.

    So instead of making people do there search on "george4title scam", why don't you just clue us in on this mystery.

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  12. Turd, Economic Analyst is right. Check out this youtube videos documenting what these guys do, and who they are:

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

    and

    http://www.youtube.com/watch?v=r79HSi5lmY0

    The NIA is a front for a pennystock pumper convicted by the SEC for securities fraud at the tender age of 15. Even Glenn Beck has used NIA statistics on his program in 2011. Be careful with these guys! They are PR napalm waiting to happen.

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  13. While I have enjoyed some of the articles on NIA, I've heard they are a pump and dump for the securities they recommend in their inflation proof portfolio. No proof, just what I've read and seen on youtube.

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  14. I think that the NIA's facts seem rather accurate. However, they have a serious bias towards doom & gloom in their interpretations and projections. DYODD, but don't throw the baby out with the bath water.

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  15. FYI I don't trust the Canadian gov't at ALL. All the banks are insolvent here to the tune of 4 trillion dollars EACH of derivative exposures. ALL OF THEM are INSOLVENT.
    Here is the youtube video of the NIA Scam HERE..

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  16. All who replied, e.g., Don, Lance, and J.E.:

    Many thanks for taking the time to read and comment.

    Let me follow up with another thought.

    We all know that foreign investors hold trillions of our debt, all of which is at low interest rates, and certainly which rates are artificially low given the circumstances now. The comment is that these investors key their purchase decisions based on the rates, which in turn means they rely on the costs of PM's to gauge the inflation rate.

    But don't these foreign governments have to buy our debt because we run a trade deficit? So, don't they fall under our mercy as to the rates that Bernanke decides to set anyway? So really, does it not all come back to TPTB calling all the shots anyway?

    Will the US be forced to raise rates in order to attract further foreign investment?

    The issue here is the premise that the US will raise rates. If the US does not raise rates, will foreign governments really not purchase our debt? So then, what would force the US to raise interest rates on the govt debt?

    I have a super hard time believing that rates will rise at all, versus massive QE to infinity. There is NO POSSIBILITY that rates going up here in the US will lead to anything but further recessionary pressures, if not outright recognition of depression conditions.

    So, my take is that rates will not be raised, for a very long time.

    I see this as forcing the hand of the US relative to currency hegemony. When the dollar is no longer the reserve currency is anyone's guess. But, I have to believe that the power has shifted to the East, and China will, in my lifetime, be in the position to hold the reserve currency status.

    When that comes, here, in the US, PM's will be the safest store of value.

    As for the decades of silver manipulation, I sure can agree that if it happened, which seems pretty obvious, then lots of connected people made tons of money. Now days, the manipulation is taking on a much more sinister, end-game type existence. Again, the question is why, and I sure have heard lots of confirmation of some interesting hypothesis.

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  17. Here are our Canadian "Safe" Banks---
    Royal Bank ($624 billion assets) ; $4.8 trillion total derivatives ; $4.3 trillion OTC derivatives

    TD ($432 billion assets) ; $2.4 trillion total derivatives ; $2.1 trillion OTC derivatives

    BMO ($387 billion assets) ; $2.7 trillion total derivatives ; $2.0 trillion OTC derivatives

    Scotiabank ($429 billion assets) ; $1.3 trillion total derivatives ; $1.2 trillion OTC derivatives

    CIBC ($344 billion assets) ; $1.2 trillion total derivatives ; $1.1 trillion OTC derivatives

    You are probably wondering how to read this or what to make of it. In my opinion -- and this is only a generalization -- OTC derivatives are the messiest instruments and have the most potential to cause significant damage in adverse conditions. These banks have trillions in derivatives, and only billions in equity so there can be very severe problems if there are even small losses in those derivative portfolios. Royal Bank clearly has the most exposure, with over $4 TRILLION in over-the-counter traded leveraged instruments.

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  18. volume @ 1430hrs timed perfectly to kill a potential bounce. SSDD...

    to whomever mentioned using EWV to hedge in the previous thread... I'm no pro but afaik that's a lousy hedge. Look into VXX (or it's big bro, TVIX) I've got 5% in TVIX, usually a loser but these last few days it's up big time and has mitigated most of my paper losses. SPUX payin' off too... :)

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  19. TheObsoleteMan

    Forgive my ignorance, but the does occurrence of margin calls and option expiry, always coincide, and id so on what date? What I'm getting at is that I have noticed a pattern for the last 8 months, it seems that every time that my portfolio rise by a certain percentage, say above 25%, there is around the middle on the month or every 6 weeks a correction of greater than 10%. My assumption is that there is profit taking along with market manipulation. Any comments?

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  20. Paraphrasing Bill Gross,

    4% on treasuries is reasonable, if the Fed is NOT purchasing 75% of them.

    We have no market feedback as to what interest rates should be because the Fed is purchasing everything. This leads to malinvestment, mis-allocation of resources, bad long term planning/decision making, inappropriate risk taking etc.

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  21. Panic and fear rule the day.

    If the nukes are resolved in anywhere near an acceptable manner, the snap back will be quite a sight.

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  22. EA & Splodeydope,

    Thanks for posting the links. That gives me a starting point to research. I'm a bit weary of anything that Jonathan Lebed might be linked to. Haven't found any link between NIA & Lebed, though I've only just begun my research.

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  23. What's up with this NIA content? Isn't NIA a pump and dump scam site.

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  24. Peter Schiff was on CNBS this a.m. commenting on the p*ss poor housing start numbers. Just as he got rolling, they cut him off to give "breaking news" about the Euro guy clarifying his comments on the plant melt down,, lame excuse to interrupt imo. Peter did however, get in a couple digs at the Fast Money guys basically thanking them for slamming commodities. Go Peter Go.

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  25. Just pulled this off the BBC news ticker (on the left side of the website)

    #
    1832: The AP news agency is quoting Tepco as saying a new power line is almost ready which could end the crisis. The disruption of power to the pumps which send coolant through the reactors is what led to their overheating.

    --
    First time I am hearing about this...
    Would it even work?

    http://www.bbc.co.uk/news/world-middle-east-12307698

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  26. I get close to a 500k hits a month. I can get the biggest newsletter pushing stocks all day, but its just not right. NIA is a scam they want to charge $1000 just to see the stocks! How insane is that!

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  27. I also believe that the FED is buying our debt like crazy and hopes to accumulate enough to be the biggest holder of our own debt and then default on ourselve's somehow. I realize we are now the biggest holder but not by a huge percentage at this point. Not yet at least.
    Once we get to a massive percentage number we will default while we are still the international reserve currency and then somehow the FED will just retire it like all the other slick book keeping changes that have gone on since the real estate bubble. They keep saying that their books are seperate to the Treasury and don't contribute to the national debt. Technically correct but obviously a warped distortion like all the other B.S. they continue to offer.
    The FED and Treasury seem to always hint at the separate nature of their balance sheets to each other but yet they are bailing each other out in an unprecedented massive way.
    I think China is onto the scheme and is buying treasuries abroad anonymously in an effort to not let our currency get as low as the FED wants it to get.
    A typical Chinese stick in the eye whenever possible. They are on to us and in control and they know it. We would do the same thing if the tables were reversed.
    Were stuck and resorting to massive desperate measures. People generally can not reason properly when under enormous financial stress. These are desperate men/women in a unprecedented times.
    Ask yourself...if you could print your own money and somehow buy your own debt back at a much lower rate and you had a willing buyer (yourself) of your debt would you not eventually walk away from that debt if you somehow could and keep the whole fiasco in a seperate check book??? I would if possible.
    Run up a huge tab, get your printing press to make mounds of money or digitally add some zero's to your checkbook balance and then pretend the other (real ) checkbook is all good because you kept it all off the debit side of your ledger.
    Thats a sci-fi like simplification but we are in a sci-fi like economic state of affairs.

    Is that crazy or possible?
    Please chime in. I see no normal rational way of reasoning to explain the way the FED or Treasury is going about things the last couple of years.

    This whole scheme I believe that is happening is contingent on the U.S. reamining the the international currency.The way I see it and read the comments out of China is that they want to become the international reserve in a bid to definitely help themselves and to possibly thwart our desperate plan to save ourselves.
    Just consider all of that and it does not seem impossible.

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  28. I wrote exactly the same thing to an old friend this weekend; US to be hit by tsunami of inflation sparked by Japanese disaster. Even if NIA is composed of a bunch of penny ante hustlers, the basics are spot on. TPTB here in the U.S. will get more desperate because I don't think they ever seriously considered a black swan quite as black as this Japanese catastrophe is turning out to be. There will be all sorts of guerrilla warfare, disinformation, head fakes, etc. But TF and this website are also spot on and you heard it here first: Prepare for the end of the Keynesian world.

    Sayonara, baby.

    And I'm not gloating writing that. It's incredibly, incredibly tragic.

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  29. All you have to do is require IRA's and 401k's to purchase a certain amount of treasury debt. Sell some to Public pension funds etc. then default after we own it all. Taxpayer left holding the bag again.

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  30. @DarkPurpleHaze

    USD hegemony hangs by a ME thread now.

    If the petrodollar is ever supplanted then the USD will go into the crapper double quick time.

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  31. @ Dan

    I made the EWV rec. I also have spxu. I have spxu at 16 from the Thursday evening before the BLS employment #. Today hit 19. I have ewv from 34 from 3 days ago. Ewv hit 45 earlier today. Your TVIX was a good idea too. The spxu has been the least profitable. I intend to donate the proifit I make from EWV to the Japan relief effort. Good luck to you and thanks for reading my post.

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  32. The whole world is a ponzi scheme and if you walk away rich then you are charlie sheen=winning,if you get fired lose your home and family along with ira and retirement then you are charlie sheen=losing(see him in 5 years)anyways mrcharliesheen himself friend requested me on youtube yesterday lol and i accepted.Hey any guy with 2 pornstar girlfriends is WINNING in my book!!!!!!

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  33. "The situation at Japan's Fukushima Daiichi nuclear power plant has become extremely unnerving. The Tokyo Electric Power Company has now admitted that the spent fuel rods could go critical - that is, a nuclear chain reaction could restart." This would be an absolute worst case disaster which would make Chernobyl look like a dress rehearsal."

    http://www.zerohedge.com/article/market-surges-latest-deux-ex-machina-kyodo-warns-chain-reaction-could-restart

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  34. Sorry meant 43 on ewv from previous post. typing too fast and not editing.

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  35. A little off topic, however people in California may wish to see this interview with Neil Cavuto from Fox. Not sure what would happen to silver if the quakes continue their circle around the Pacific. In any case the examples of fish being killed en mass gave some logic to what's happening.

    http://video.foxbusiness.com/v/4584933/a-major-earthquake-in-north-america-imminent

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  36. I've lived through a gazillion of these scalps. Once again, I've lost all my profits. OK. I can live with that. Just have to go make some more money. But I honestly have no idea where to put my money to work. I don't see any silver of gold miner worth the risk right now. You can wake up $30,000 poorer in the morning. Like Monday. The upside isn't clear yet because the downside is freaking carnage.

    I'm buying nothing and selling off godforsaken shares of HL as they rebound.

    SK

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  37. News of the power cable seems bullish. I'm going to go out on a limb and guess that the pumps this power cable is supposed to run have been damaged and can't be operated. This will be less bullish.

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  38. @ ewc58

    Yeah. Like I wrote last night, it's Chernobyl all over again. When the SHTF, TBTB pretended everything was normal and lost a critical window of opportunity. Remember Raisa and Gorbi waving at some pre-May Day parade? Bye bye USSR.

    I think bad news events will be speeding up considerably. Japan will not be buying US Treasuries any time soon. China will probably try to follow suit. It is indecent of Geithner to even raise the subject of Japan selling or not selling US Treasuries. They are in an existential fight for survival. They need to do what is necessary to save themselves. And so do we.

    Thanks, Turd. You're like a beacon in the dark.

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  39. By Tyler Durden, Full blog on ZH

    "While the future of the free market now hinges on some power cord which according to the AP "may solve the crisis""

    SSK - Consider parking in Swiss Franc. No funny devaluations going on as of yet and has appreciated considerably against the USD. I believe this was mentioned last night from a post on Trader Dans site.

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  40. perhaps both sides are right in their own ways: NIA has/had credibility (video linked above & agree, the $1000 for 3 stock picks had me shaking my head) issues while still providing some good picks here & there coupled with providing interesting and often times if not the majority of the time on point information about the end of the keynesian experiment.

    Like everything in life, DYOD.

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  41. Does anyone find it interesting how fast usa was shipping off to japan but when katrina hit it was like oh well see you in 2 months

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  42. This is a bump from the previous thread. Also zero hedge has a thread on this now also

    http://www.zerohedge.com/article/market-freefall-usdjpy-takes-out-stops-sp-now-negative-year

    CA Lawyer, nice to see a discussion like yours being put out there. This what a site like this should be for. So if you will allow me to add my two cents here goes; Watch the USD/JPY currency cross. This is where the big boys play the leverage game, it has been named the Yen Carry trade. Do some reading on this as IMO this is a hugh driver of all the markets. Dan Norcini has posted on this subject quite a bit in the past. Just minutes ago this cross dropped below the 80 level. Players who are highly leveraged must cover their JPY short so they have to sell whatever they are long to do this.

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  43. PurpleHaze

    I have thought the exact same thing. I know it doesn't make sense, but somehow they make the debt vanish 'poof' between the two sets of books, and we have worthless bits of paper and they have silver and gold.

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  44. The mining shares have gone down, so I´ll perhaps buy more tomorrow.
    :)

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  45. @ ragedmaximus

    Hey raged,

    Our 7th Fleet is normally posted somewhere around South Korea and Japan, so they were already in the hood. As for getting part of our Navy to New Orleans, well, that's a whole legal bag of worms, starting with - if memory serves - the refusal of the governor of Louisiana to request federal aide, which, in case you didn't know, is a sine qua non of the feds moving in.

    If my memory is wrong, I stand corrected.

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  46. PurpleHaze:

    Correct assessment, it sure seems.

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  47. xtybacq said...
    how does the US treasury going belly-up play out?

    @xtybacq

    There are some good observations about economic collapse on the FerFal blog. This guy writes about going through the Argentine economic collapse in 2001. Bottom line: "Life goes on, only shittier."

    http://ferfal.blogspot.com/

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  48. "Pining for the Fjords said...
    Alright all you tinfoil hat nutters (and I consider myself firmly within that category btw) lets play a little game of what if:

    Let's suppose that TPTB are 1. trying very hard to suppress PM price prior to OEX on Friday, AND 2. somebody has a particular additional incentive to keep silver under 36 (you know the derivative exposure story, no need to rehash).

    IF both of these are true, wouldn't all the big players, including the big short trying to cap 36, understand that the lid was coming off Friday? And if this were so, wouldn't the only rational course be to smash- and I mean smash- down price Wed-Thurs (likely after hours) and then either exit or at least hedge strongly prior to 1:30 on Friday?

    If true, we could trade the crap out of this and, to quote the great Turd, "make some serious frikkin money"."


    Last month we actually had a huge rallye into options expiry. Options expiry has been a very bad indicator if prices are going to go up or down. Just check all the last months - it's about 50-50 up or down.

    What is the case tho is that someone is continuously throwing the kitchen sink at silver, as we can see by the huge volume upside breakouts that are constantly (barely) held back.

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  49. By the way, who realizes that actually the first time gold was trading around the current level (1395$), silver was at 26$?

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  50. Astro physicist Piers Corbyn - "The massive Japan earthquake and tsunami were triggered by massive events on the sun and there are more to come in the next two years. The earthquake was preceded by an X-class solar flare and a significant hit of the earth by a Coronal Mass Ejection, reported by NASA. We warned after the New Zealand Earthquake on 21 Feb that the solar-lunar scene is set for more earthquakes for the next two years. Many of these earthquake events, as well as weather events, will be very extreme." He has made warnings that the weather and earthquake events have nothing to do with CO2 or so called man-made climate change in any way whatsoever. He hold such claims in contempt for their diversion and falsity. The true disruptive source is the sun."

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  51. @silverwood

    I have done some reading on the Yen carry trade, but my small brain is not able to understand all the permutations.

    I do have a forex micro account, and I try to watch the currency pairs. But I have no ability to trade this except like pure coin tossing.

    From what I understand of the carry trade, though, basically, one borrows the Yen at a low rate, and then buys currencies paying a higher rate, thus capturing the difference of the interest rate, right? Pure arbitrage?

    If I got that right, then everyone who borrowed tons of Yen must buy it back before it appreciates, right? Because the Yen is going up in value, or the dollar is going down in value, this means all those who borrowed the Yen to buy something else must quickly buy Yen to repay that which they borrowed. Did I get that right?

    If so, then how does that explain the manipulation of silver futures? I just do not understand. Does the Morgue know that the players in the Yen carry trade have to sell silver to cover their shorts, thus allowing JP Morgue to short the silver market? Okay, that does make sense.

    But still, does that not only make for a very short term phenomenon?

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  52. you don't have to use nia to buy anything so who cares about them scamming or not. they let you see their videos and newsletters for free

    ReplyDelete
  53. EA,

    I must say your MVW is like a machine. The bid just grinds up a few cents per day like clockwork.

    ReplyDelete
  54. More rational view..?
    http://ukinjapan.fco.gov.uk/en/news/?view=News&id=566799182

    ReplyDelete
  55. Silverwood

    I am just beginning to figure this all out, and I have been watching currencies a lot in the last few days. Could you explain a bit more about the USD/JPY? We sit in Canadian dollars in cash, just because we live here I now realize - seems like a mug's game.

    ReplyDelete
  56. J.E.

    Great quote about the sun, but it makes me fear for the Pacific coast.

    ReplyDelete
  57. http://janneinosaka.blogspot.com/2011/03/on-radiation.html

    ReplyDelete
  58. @J.E.
    "All you have to do is require IRA's and 401k's to purchase a certain amount of treasury debt. Sell some to Public pension funds etc. then default after we own it all. Taxpayer left holding the bag again. "

    Google biden restrict 401k treasuries. Already being proposed.

    ReplyDelete
  59. From george's link (many thanks for posting it):

    " Basically the reactor lies within a large containment vessel. But if it isn’t cooled particularly well, then the pressure in the containment vessel goes up and it reaches a level where it can’t cope. At that stage the Japanese authorities deliberately release a mixture of steam and hydrogen gas and so on into the atmosphere. This is really quite modest amounts of radioactive material and it’s not likely, by and large, one shouldn’t be concerned about it.

    It appears however that from this morning’s results that one of the containment vessels may be somewhat cracked. That’s new information that came through I think like 5 in the morning Japan time. The situation is still much the same. What they’re going to continue to try to do is keep the temperature low, keep the pressure within the containment vessels within those tolerance limits. That will involve very limited amounts of radioactive material going out. Now that’s what is I think is happening at the moment. Now the first thing to say about that is do we have any concerns now in terms of human health. Well the answer is yes we do, but only in the immediate vicinity of the reactors. So the 20 kilometre exclusion zone the Japanese have actually imposed is sensible and proportionate. If they extended out a little bit more to 30 kms, that is well within the sort of parameters that we would think are extremely safe.

    Let me now talk about what would be a reasonable worst case scenario. If the Japanese fail to keep the reactors cool and fail to keep the pressure in the containment vessels at an appropriate level, you can get this, you know, the dramatic word “meltdown”. But what does that actually mean? What a meltdown involves is the basic reactor core melts, and as it melts, nuclear material will fall through to the floor of the container. There it will react with concrete and other materials … that is likely… remember this is the reasonable worst case, we don’t think anything worse is going to happen. In this reasonable worst case you get an explosion. You get some radioactive material going up to about 500 metres up into the air. Now, that’s really serious, but it’s serious again for the local area. It’s not serious for elsewhere even if you get a combination of that explosion it would only have nuclear material going in to the air up to about 500 metres. If you then couple that with the worst possible weather situation i.e. prevailing weather taking radioactive material in the direction of Greater Tokyo and you had maybe rainfall which would bring the radioactive material down do we have a problem? The answer is unequivocally no. Absolutely no issue. The problems are within 30 km of the reactor. And to give you a flavour for that, when Chernobyl had a massive fire at the graphite core, material was going up not just 500 metres but to 30,000 feet. It was lasting not for the odd hour or so but lasted months, and that was putting nuclear radioactive material up into the upper atmosphere for a very long period of time. But even in the case of Chernobyl, the exclusion zone that they had was about 30 kilometres. And in that exclusion zone, outside that, there is no evidence whatsoever to indicate people had problems from the radiation."

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  60. I'm no expert on this but you can go to netdania.com and click on all the different JPY crosses to get an idea of how the Yen is suddenly strenghtening. Logic would dictate IMO that the Yen should be depreciating because of all the hugh cost Japan will incur to rebuild but yet the opposite is occurring. So WHAT? can explain this other than short covering? Let the ideas emerge...

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  61. Just took a nibble (OK, more like a Big Gulp) of CEF just before the close. That's pretty much like ringing a bell for all you guys to get out and wait for a better buying opportunity!

    ReplyDelete
  62. Silverwood

    Exactly - if the BoJ is injecting trillions of yen into the system, the yen should be down. The USD/JPY is way down yet the USD index is up. And the other night at midnight there was a massive gap up and the USD went up and silver shot down. But the opposite should have happened I would have thought.

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  63. As stop loses and margin calls hit Japanese investors they are forced into the Yen(bullish). Same reason the dollar strengthens here when market sells off.

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  64. Hmm anyone know when
    mining shares options expiry is this week ?
    Thursday or Friday ?

    ReplyDelete
  65. My elderly parents have a small cottage in Canada and are thinking of selling. They live in the U.S and fairly close (20 mins.) to a International bridge. I told them to hang onto the property and treat it like a safety valve just in case things get really bad here.
    What a lousy thought but it seems sensible.

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  66. I think you could be right - a bunch of people are shorting the yen, the earthquake hits and they have to get out. Is that what you are suggesting?

    ReplyDelete
  67. DarkPurple

    Let me know if they want to sell - we are seriously thinking of buying a cottage and moving there once offspring #3 finishes high school in two more years.

    Only partly kidding!

    ReplyDelete
  68. I hope the NIA content on this site is just a temporary blunder by the Turd. If this content is an advertisement it needs to be formatted and labelled to appear separate and distinct from Turd's commentary. Turd, ditch this NIA crap and I will pledge to feed you.

    ReplyDelete
  69. SSK,

    Two near term gold producers worth a look are FAU.V and BPM.V. Top shelf junior/mid tier Ag producers are EDR.TO and the much loved GPR.TO.

    Disclosure, I'm long on all of 'em except GPR.

    Caution, wait to see what happens with current equity sell off before taking a stake in any of them right now.

    ReplyDelete
  70. The Yen Carry trade from what I understand is where big investors borrow Yen and then convert to other non-Yen investments. This could be AU bonds or US equities or whatever. This trade will work as long as the Yen is holding stable or falling in terms of other currencies. I have read in the past that a large portion of the 08 market melt down was caused by this unwinding of the carry trade. Now this is not the only market driver but this event can be used to intensify market direction. So those entities who want PM to fall in value can create waterfall type movements. Look what they did to silver in 08!

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  71. Great interview with James Dines at KWN just posted here. He starts off with Japan then moves to food and inflation. From there he goes on to silver and miners and about 1/2 way through he rocks the interview with rare earth elements which takes up the entire 2nd half of the interview. Great listen and not too lengthy compared to most KWN interviews.

    ReplyDelete
  72. The only green on my screen today is HTM a geothermal energy producer, UP 5.2%

    ReplyDelete
  73. Marcel

    Ha! I knew you couldn't stay away from Bralorne for long!

    Now I'll blame you if Fire River tanks, and you can blame me if Bralorne tanks!

    ReplyDelete
  74. Malcomb: Sorry, but I have been away from my desk. What we are seeing now is MUCH more than profit taking, we are seeing leveraged positions in the commodity complex unwound. I suspect we will see the metals correct from another 15-30%, depending on the severity of the correction. I believe it will get NASTY. I will not buy silver until nobody wants it, and they proclaim the silver bull dead. They are allready saying this about gold, as it has printed a double top. Look out below.

    ReplyDelete
  75. Mike, April OpExp is 3/28. Straight from the horses ass (CME). Keep this link for future reference:

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

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

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  77. All green for me:
    - MNVWF
    - TRE

    Getting very itchy to get back into SLW and GPL

    ReplyDelete
  78. I hope the NIA content on this site is just a temporary blunder by the Turd. If this content is an advertisement it needs to be formatted and labelled to appear separate and distinct from Turd's commentary. Turd, ditch this NIA crap and I will pledge to feed you.

    +1

    ReplyDelete
  79. TOM

    C'mon. Are you Nadler in drag?

    Whoever "THEY" is, go right ahead and listen to them then. After all, they've been spot on about the price of gold for 10 years, right?

    Yeesh.

    ReplyDelete
  80. Obsolete, leveraged positons in silver? Physical is being purchased outright, and they have raised margin requirements nonstop so how is one leveraged?

    ReplyDelete
  81. An interesting technical analysis of silver from EndlessMountain is here:

    http://www.youtube.com/watch?v=CBlK2EpX-ko&feature=feedu

    I dig this guys work.

    ReplyDelete
  82. Bold Chris Martenson call in case you haven't seen it...

    http://www.zerohedge.com/article/guest-post-alert-nuclear-and-economic-meltdown-progress

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  83. Does anyone know if there has been ANY silver awareness in the world of options contracts?

    I keep hearing silver market has been manipulated by JPM and my question is has demand for silver both physical and paper gone up much since silver was 26 bucks not so long ago. How many options contracts get filled every month due to demand as commodity in products and as investment. Can someone out there in blogsphere do a chart on this?

    ReplyDelete
  84. Eric#1,

    Stay long and strong in FAU my friend. First pour in the 2nd quarter! That stock will be rolling once they're in production.

    word verification = santeria

    WTF?

    ReplyDelete
  85. Obsolete One

    who is this 'they' who says the gold bull is dead? He is looking frisky from where I am standing.

    ReplyDelete
  86. Obsolete -

    I agree with your unwinding comment. If the market doesn't turn around by options ex. there is a lot more pain and unwinding a comin'.

    ReplyDelete
  87. For everyone talking about the yen carry.

    The dollar has taken alot of the carry interest from the yen in recent months.

    So much so that the dollar is the carry currency du jour, and the yen carry plays second fiddle.

    The yen up till recently was a net positive money flow currency (trade flows), while the dollar is net negative flow, which is the easier short?

    Alot of the yen strength recently is predicated on repatriation.

    In 95 the usd yen interest spread was in excess of 4% at times, dollar longs used the yen as a carry, that trade isnt as prevalent now.

    Also, the 700B in liquidity is going to cushion alot of the so called repatriation flows.

    When its clear that there isnt as much inflows as everyone expects the snapback is going to be pretty funny.

    BTW the commercials have greatly increased their yen shorts.

    ReplyDelete
  88. I am pretty sure, Obsolete, that I will always want my silver until I am, as the saying goes, down to my last thin dime. It seems rather strong to say you won't buy until nobody wants it - wouldn't the value of something nobody wants be zero? Just sayin' ...

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  89. EA,

    I took a stab with MNVWF at 1.50 and I like the results. Does anyone know what are the prerequisites for a pinksheet to transfer over to a major exchange like AMEX? Does the pinky have to keep a sustained price for a certain length of time before its considered? If Mountainview can keep this up and get listed it will bring in many more buyers and move that volume up sort of how Great Panther worked. Thanks.

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  90. From ZH -

    Reuters reports that Tokyo Stock Exchange firms are seeking market closure as the markets are too volatile. We agree. This means we may get the first post September 11 bank holiday as early as tonight. If so, keep an eye on the USDJPY. "Some foreign financial institutions are calling for Japan's stock market to halt trading, while the Tokyo Stock Exchange and Japanese financial regulators are planning to keep markets open, news agency Nikkei reported. The news agency said officials from more than 10 non-Japanese financial firms held a conference call Tuesday afternoon, with some firms calling for the market to be closed immediately, Nikkei reported, citing people familiar with the discussion. Some participants argued that the market was too volatile to continue trading, according to the report." And if Japan closes, watch for rolling market shutdowns westward as the sun rises over each individual stock market.

    ReplyDelete
  91. Also from ZH -

    Support broken as the dollar yen plunges to an all time record low. Everyone now watching the Nikkei to see if it opens. That the BOJ has not intervened yet is beyond ominous, and nothing short of a death sentence for the Yen carry traders.

    ReplyDelete
  92. Gold just popped over 1400 - someone said commercials, and I had just seen gold pop over and

    Can't get enough of them sugar pops

    came into my head.

    ReplyDelete
  93. So basically the markets will shut down as fiat evaporates?

    ReplyDelete
  94. @ J.E

    TSE too volatile? TPTB are a day late and a "yen" short. Idiots. They should've done a controlled close right after the tsunami.

    ReplyDelete
  95. If you click on all the different currencies on Netdania the USD is way down against everything except the GBP,

    ReplyDelete
  96. I'm with the Obsolete guy. I think there's more downside to come in PMs before the ride back up begins in earnest. Gold has every reason to explode now with everything going on in the world and it's not. Those who are buying now because of these events are buying from smart money who are selling before the next dip.

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  97. Time for a commecial break...
    @xtybacq - speaking of pops...

    If you feel run down and need a little lift, may be you need a quick high energy pick-me up.

    It's at time like these when I need a little extra energy.

    Like Quakes BarBeQue rice snacks... with light crispy crunch.

    Quakes...when you need that Barbeque flavor on a rice crunch.

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  98. Has anyone else tried to hedge their mining stocks by shorting ES?

    I didn't want to sell my mining stocks, and my ES short has worked pretty good as a hedge. I really just wanted something to protect against a dirty meltdown.

    xtybacq: the volume on that jump in gold was pretty light.

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  99. Good time for our leader to leave the country. He has people that can read wind charts for him.

    ReplyDelete
  100. Titus,

    I bought ticker: DOG on Tuesday. Also keeping an eye on DXD as a hedge.

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  101. SPY down to 125.75. Lots of options writers gonna' be way under water come Friday.

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  102. Strong Side - It's like a picnic for your palate. Hilarious.

    Re the gold spike - there is a dead time between 5:15 and 6:00 pm est, when the price of gold and silver just seem to oscillate between two tight levels, and it happened right then, as did the currency crash. It is a game of hot potato and somehow it looks like the GBP lost because it is now down against the USD. But I am a total amateur at reading these charts - something violent just happened. So I will be watching like a hawk at 6:00 pm. Strange days indeed.

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  103. um, look at the usd index. wowza. What will happen in PMs now?

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  104. New title for this post: All eyes on USD.

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  105. Will this drop stick to PMs and make them rocket?

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  106. Gold definitely gettin' a late bid.

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  107. Maybe they are about to announce a Bank Holiday and there was a quick slosh of fiat by the rich guys beforehand?

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  108. Readers; I appreciate your comments. Do not take my opinions as anti-gold/silver, because I am far from being that. It's just that I believe if you are buying now in the anticipation of calling a bottom, your proboly going to regret it. If your time horizon is far enough out, there really is no bad time to own and hold PHYSICAL. I was mostly referanceing paper trades. I own PLENTY of physical Au & Ag. But I have'nt added to my position in sometime now. I might if Ag goes to $26 and Au dips to $1250.

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  109. @silverwood

    You are a genius.

    http://tfmetalsreport.blogspot.com/2011/03/all-eyes-on-japan.html?showComment=1300304272997#c4174971685771860997

    They Yen carry trade is unwinding in a big way.

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  110. sorry, wrong link.

    Yen trade unwinds.

    http://www.fxstreet.com/news/forex-news/article.aspx?storyid=71a67fe6-69ca-4abe-a406-87c12d9486b3

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  111. Usually when the dollar drops gold and silver go up. I think there will be a jump up at 6:00 when things move again, unless the dollar recovers by then.

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  112. WSe saw the Yen carry trade unwind with a vengance back in 2007. That was at the begining of the great blood-letting.

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  113. Guys,
    I'm going to the bank to yank some extra cash now!

    @xtybacq - You can't make up that kind of marketing. The poor bastards at Quaker walked into that joke by naming their product close to the name of a natural disaster. It's like naming your product "Tornado" or "Hurricane" or "Sinkhole"...as in the DJIA = sinkhole...

    Afrum? Care to comment with another wonderful example of stream of consciousness?

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  114. Today from the great Jim Sinclair at JSmineset.com...."Financial Armageddon comes after the euro takes out $1.4050 twice and gold closes three times above $1444. We are close."

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  115. Speaking of Jim Sinclair....I know a lot of you probably heard his latest interview at KingWorldNews.com.
    My question to anyone out there is does anyone have the patience or typing skills to transcribe his full interview into a readable link or whatever?
    KWN doesn't do transcripts understandably. I loved the interview and his insights but there is nothing like having the written word in front of you in your hands to peruse at will and to draw more out of it.
    Just a thought and a request from one of you patient and talented CIGA's

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  116. USDX bites the dust and takes gold and silver with it? Could someone explain this to me, doesn't make any sense.

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  117. Jimmy - On the one minute chart gold and silver are identical, and at 6:00 pm when they started trading again, the USD was going up, even though it had plunged before. Minute by minute the USD tracks silver and gold right now, tick by tick almost.

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  118. http://www.youtube.com/watch_popup?v=rP2hlFH8I4s&vq=medium#t=168

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  119. Its not the USDX its the YEN. The carry trade is unwinding. Yen at record high. Talk about counter-intuitive. Japan is in the shits and the Yen is sky high.

    ReplyDelete
  120. JPY rocks the world now ...

    Ridiculous price action in JPY areound the globe

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  121. I mean the USD?JPY - the dollar goes up against the yen and silver falls.

    ReplyDelete
  122. My work has gotten in the way of being able to read all of the comments over the past couple of days this week.. but if someone doesn't mind, what is MVW? I looked up the ticker symbol but nothing comes up for it on my brokerage account. Thanks!

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  123. lol, gotta love these "markets" :D

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  124. @Ginger check out the 5 day chart of MVW HERE.

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  125. USD/JPY explanation

    The market has known for months that there were some massive option-related stop-losses below the previous lows at 79.75 and unfortunately those losses were triggered at the most illiquid time of the day, NY close/Sydney open. The market probably moved 3 times more than would have been the case were both Europe and NY in full flow.

    Normally I would expect some of this ‘gap’ to be closed over the next day or so but we may need a bit of help from the BOJ to get that done.

    http://www.forexlive.com/

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  126. The battle in gold is on:

    1. those leveraged traders who need to liquidate to meet margin calls on their plunging long trades, plus the banksters/blythe

    vs.

    2. us guys/BOS/any rational person

    I think 1 wins for a while. 2 wins eventually. Hold on!

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  127. Big spread on Forex for Gold and Silver for this time of mkt.

    We live in interesting times.

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  128. Why was gold trading at 6pm eastern time. It never trades then.

    SK

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  129. Oh hey, EA, good to see you are back and didn't let some dimwit run you off Turd's blog. We really enjoy your input and I am still making money of your calls, thanks buddy.

    ReplyDelete
  130. Thanks Ec. Analyst!

    ..And thanks Turd for the NIA article. I find it doomy and gloomy but unfortunately in this day and time that could also be called the truth.

    Got no problem with Lebed or NIA as I see that he fully discloses his paid stock promotions vs. NIA's solid unpaid stock picks. He got in trouble at 15 for handling stocks/internet the wrong way.. ...He paid for that mistake and from what I can see, apparently he has turned it around and has a legitimate business now. It's clear on his stocks which are paid promotions and which are not. The problem?

    NIA has solid picks. Check them out. Most people here own some of them. I haven't found a good reason yet to not trust them. The only reasons are that they are 'pumpers & dumpers'. Proof?.. I have an open mind that can be changed. I just haven't found any reason to change it to date re: NIA & Lebed. (BTW...NIA & Lebed are definitely working together. Lebed has helped them with some of their videos and is credited in one.. among other involvements I'm sure.. still.. I don't see the problem?)
    :]

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  131. SSK, probably trading at a normal time in an overseas market.

    US Daylight Savings already kicked in so there is a bit of a discrepancy for a few weeks

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  132. usd/jyp is all about the implosion of the carry trade. It has absolutely nothing to do with stops under 79.75. The implactions of this carry trade implosion are dire. Please read trader Dan's explanation. Equity mkts will be down big tomorrow. We may get some bleed into our metal mkts as evidenced by what is going on right now since the 6pm open.

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  133. This comment has been removed by the author.

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  134. BOJ has expanded the QE program to 10T Yen to aid the recovery. However it needs to be signficantly bigger to have a meaningful impact. If they increase to the limit of 30T which was instated by the law, then watch the precious commodities market very carefully for reaction.

    Intrinsic Value

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  135. Simple trick to cut your electricity bill by 75%: DIY HOME ENERGY.

    ReplyDelete