Tuesday, March 8, 2011

An Eerie Quiet

After all of the crazy volatility we've seen lately, a strange and eerie quiet has descended upon the markets. I mean, for crying out loud, look to the right at those flat-lined metals charts. Sheesh!

So, what does this mean? Has the volatility gone away? Has everything calmed down? Have all the traders left for Spring Break? Hardly. We've swung wildly in both directions for several days now and its seems that the big $ are unwilling to make a commitment one way or the other. In reality, its just the feelings you and I are experiencing, writ large. I mean, I want to buy. Now. I think gold and silver are headed higher but I also feel a bit uneasy because we've run so far so fast in silver. Maybe if I wait a day or two, I can get some at 35. Maybe even 34. So I wait, unwilling to make a new commitment but I'm not selling, either. Not with things so out of control in the Middle East and the "days of rage" planned for later this week.

So, I do nothing. I sit and watch and the range gets tighter and tighter. Inevitably, something will cause the range to break and we'll get rolling in one direction or the other. I'd say its about 70/30 that we break higher given all the global unrest but you just never know. One thing I do know, however, is that this range only has about 8-12 hours left in it so, by 10:00 or 11:00 am EST tomorrow, we should have our answer.
Gold has gone mostly silent, too, but its chart is different. It has simply dropped back to its primary trendline again. If the recent pattern continues, this chart would suggest that another thrust higher is coming. Like silver, the timing looks to be tomorrow.

So there you go. All signs point to tomorrow bringing a resumption of the volatility.
I'm off to get some rest. Looks like I'm going to need to be ready come daybreak. TF


  1. @LiverFree

    My sentiments exactly. ;)

  2. So this Wednesday wont be usual raiding territory this week? They might take this one off considering the events in the ME?

  3. Ghadafi expected to make another attempt at a speech. Should provide some movement if he succeeds in standing at the microphone.

  4. I went all cash today (excluding physical stash of PM, of course). Hopefully I can BTFD. I think JPM owes us a buying opportunity.

    I don't know how much higher we can go barring a signal about QE extension.

    No more QE = implosion of all assets (Temporary, or course, until the wailing public cries for more printing to reinflate the 401k)

    QE extension = keep riding those commodities.

  5. Warning: if you don’t care for Wynter Benton stories, just ignore the following.

    Maybe the eerie quiet Turd is referring to is because of a barrier someone has erected at $36 silver? See below from Wynter, from November last year.

    WB: JPM is in worse shape then we ever dared to hope 20-Nov-10 07:06 am

    This is what I am now hearing from traders on the floor. These traders are not even sure if Blythe knows the full extent of JPM's silver exposure.

    When I first started to realize that JPM has shorted far more silver than they could ever hope to cover, my first question was "why would they do that?" Not only that, why do it with a commodity where you must report your positions through the COT and Bank Participation Report? After all,the whole world can see what you are doing. [Ted Butler included]

    Now I know the answer. According to Max Keiser and now a couple of other independent sources, it seems the reasons why first Bear Stearns and now JPM are so desperate to manipulate the price of silver down is due to the fact that BS and JPM shorted billions (yes billions not millions) in ounces of silver through their derivatives.

    Just like Joe Conason at AIG, silver shorting through derivatives have caused literally billions in losses not the millions that we know about publicly. That is why JPM has been so desperate to manipulate the price of silver downward so blatantly. If I am right about this, then JPM will be dead when silver hits $60 or so. Based upon the COT and BPR, if silver hits $60, JPM will lose around an additional $6 billion dollars, a large number but not nearly large enough to bring down mighty JPM.

  6. contd.

    But what is not known is that due to the way that its derivatives are written, JPM's losses are exponentional once silver breaks $36 or so. Rumors has it that JPM could be losing as much as $40 billion once silver is above $50. It has something to do with how the derivatives are written with payment tied to the price of silver.

    Since JPM was a price manipulator with respectt to the price of silver, JPM assumed that any derivative payments tied to silver would be less than they would be tied to some other index like the CPI or TIPS implied inflation index. JPM's inability to hold down the price of silver relative to other measures of inflation will cause unbelievable losses due to a mismatch in their derivative structures.

    In essence,JPM has bet (a huge amount)through derivatives that silver will never outperform inflation. And why not,since JPM assumed that it will always be able to manipulate the price of silver. We have now come to understand that JPM's loss exposure to silver is much greater than we have ever dared to hope.

    You're going home in a body bag, do-da,do-da....

    WB: In an effort to clear up some recent confusion regarding my latest posting, I will try to explain what I have recently uncovered.

    JPM's current short silver position is estimated to be approximately 150 million ounces down from the recent 180 million ounces in August. The losses from these positions are easy to figure out. For every $10 rise in the price of silver, JPM will lose $1.5 billion.

    But what I have recently discovered is that through its derivative positions, JPM will lose about 5 times that amount ounce the price of silver is above $36. And ounce silver is above $45 dollars, JPM's losses will increase to 8 times the amount of losses in their short positions. The reason is that as the price of silver increases, certain provisions get activated which multiplies the losses.

    One reader asks the question why isnt the price of JPM going down to reflect the lossesd in silver. My answer is that the price of silver is not high enough to begin to trigger losses in their derivative positions. But once silver approaches this critical level say around $36, then you should begin to see the price of JPM stock begin to reflect these losses.

    In fact, traders are saying that once the price of silver surpasses the stock price of JPM, then for every dollar the price of silver go up, JPM should lose around 70 cents or so. This means that if silver hits $60, JPM will be a single digit stock.

    JPM market cap is around $170 billion. If silver losses are as great as $40 billion in cash , then JPM will be insolvent. Period.

  7. For those into physical Kitco Hong Kong (China) has just run out of American Silver Eagles, last week they ran out of Canadian Silver Maples.Bars are also limited. All they have left in 1oz coins are the Aussies (kookaburra and Koala). The price on these has not moved down in line with the drop in silver prices today. Maybe a reflection of the disconnect between paper and physical?

  8. silver is king: Because, by that time tomorrow, that pennant I drew will close.

  9. http://harveyorgan.blogspot.com/

  10. Turd, haven't said so in a while, but thanks for all you do. Keep up the good work.

  11. Like I noted on the previous TF post, I believe that we're seeing a wedge in equities forming. I personally believe it will break to the downside even with the Bernanke put. I also think silver is due for a _momentary_ pullback similar to what we saw in January, but obviously to a higher percentage now that we ran so much.

    Buy and hold physical. Trade paper to make profits to buy physical. Hedge risk by shorting the indices some how (ultashort ETFs, puts, call back spreads, etc)

  12. I am being the resident bull. Nothing has changed, and the middle east seethes. I asked near the end of the last thread why a poster had thought that the price of silver would go down if QE2 ended, creating a dip. I see that as the end of the dollar, and speeding up the flight to gold and silver. Am I missing something?

  13. I think we're looking at gold, silver, and oil all temporarily stuck in pensive preparation for the complete and utter batshit that's going to break out later this week and weekend. Please hedge accordingly and buy physical (even an ounce if it's all you can get) while you can get it.

  14. B Pull back just because of the speed of the rise?

  15. Feels like we are at the 2:00 minute mark in this epic battle...


  16. @TurdleGG-
    Thanks for finding that quote from W_B.
    I knew I recalled that right, but you actually went out and found the exact quote.


    Get a load of the kiss-ups driving JPM to higher and loftier goals.

    If my money was at Oppenheimer, I'd be yanking that money today.

    By the way sports fans...
    Get a look at the USD Index for the past 6 weeks. I just noticed that on Feb 9 and 10, there were two up-days in a row, which took the US Dollar Index from 77.6 to 78.8.

    Now, almost exactly one month later, we see the USD Index moving up on March 7 and 8 from 76.2 to 76.9.

    If this month repeats like last month, there was a USD drop off rom 78.8 to 76.2 nearly non-stop. At similar pace, we would see the USD drop off from 76.8 to 75 or below in the next three weeks.

    I would like to point out, that the silver price moved from 29.5 on Feb 12 to 34 on Feb 21 as the USD Index fell. That was a 15% move up.

  17. StrongSideJedi,
    found it but did not find any reference to March 11th. Were you imagining that part?

  18. xtybacq, yes purely based on the speed and size of the rise. Not on fundamentals. Just as the Jan pullback was not fundamentally based, I think and hope full a pullback to buy more physical.

    Looking at market behavior lately, I've got to jump out and scream that if ANYTHING goes good and something "bullish" happens, the equities market is about to erupt to the upside. Why? Because it hasn't taken a clue when the whole world is going insane, so that means the few buyers (the Fed and it's posse) are able to counter the smart investor and retail demand to sell. Wait till smart or retail investors see something positive and this market will erupt positively.

    I don't think we'll see anything positive though. The glass is half empty _and_ there is a big crack in it thats leaking.

  19. Thanks Turd. Your thoughts are appreciated.

  20. Governments About to Lose Control of the Markets


  21. The calm before the storm ?

    I visited my two local gun shops to pick up yet another "inflation" hedge. My question to both stores: "how has business been"? Both stores replied, busier than every with record setting months back to back to back.

    Just a friendly observation.


  22. The Fed is using the only weapon it has left to use. The same weapon it has been using for the past nearly three years now. THEY ARE BLUFFING. Jaw-boneing. Whatever you want to call it, they are like that desperate jumper on the ledge, saying:"Don't come any closer, or I'll jump!" Never has any intention to do so. Just trying to provoke a response. They can't stop QE. Now, or ever. They are rideing the tiger. Get off, and they are eaten on the spot. Stay on, and they arrive at the tiger's den, where all the other hungry tigers are waiting. They are screwed. Ever heard:"Bad money chases out the good". That is what has happened in regard to out paper. Who will step up and buy it, should they stop their purchases? NOBODY. That is why they are having to buy it now, there is no one of it's size to replace them should they leave. it amounts to DEFAULT. There will be no rate hikes. There will be QE-3. Or perhaps they will call it QE-2b. Doesn't sound so bad that way.

  23. Turd, perfect timing on the wedge formation post. I've been looking at this develop for two days now and I'm really starting to wonder about what we're seeing. I hope you're right that we break the shiney northward. I hope like all hell that equities trade downward. My primary hedge will work out _quite_ a bit better than any hedge should in that case...

    Nigel Tufnel,
    You mentioned stocking red wine and 9mm. If you don't mind me asking, how many rounds of 9mm are you hoarding? what types? I just picked up 500rds 9mm Talon 145grain SXT HP and 1000rds 115gain FMJ to add to the collection. I've actually been considering another two 9mm firearms: Springfield XDM 9mm 3.8 and some kind of 9mm carbine (undecided)

    My wet dreams involve purchasing a 50 cal rifle, but that'd be more for sporting events with "the guys" or to do some anti-vehicle defense. The ammo is freaken expensive.

  24. Art,
    Great link.
    We've been hearing it for awhile, but this one just smacks you right in the face, does'nt it?
    I've methodically walked my recently retired mother through the paces, made the case for metal vs. dollar and convinced her to re- allocate some of her holdings to physical

  25. @TurdleGG-
    I'm having trouble locating that March 11 reference too. I thought there was a March 11 reference by W_B. But, interestingly, Google.com doesn't produce any results that match my memory.
    It's odd.
    There was a definite Youtube video also from a group that was asking people to take delivery specifically on march 11 and that they would run on silver on march 11.

    I took the statement seriously because the number 3-11-11 seems to be a numerology thing for some groups.

    I am not a numerologist type, but if some or enough people run on the silver for ANY reason, I can accept their act and wish them well.

  26. Shhhhh this line is unsecure.
    ammo what ammo? ;)

  27. In my preparations for the end of the "Keynesian Experiment", I've been stockpiling food, water, PM's, batteries, etc. I thought I would also keep an "extra" emergency supply of food in the form of freeze dried meals... like the ones you take camping (we used Mountain House) since they are easy to prepare (just add boiling water) and better than nothing if all hell breaks loose.

    Anyway, I went down to my store to purchase 2-3 weeks worth of food and it turns out I purchased most of his remaining stock. The store owner mentioned that this stuff has been selling like hotcakes lately and he cannot figure out why.

    Anyone else seeing that as well?

  28. Comment from a poster on SGS's site:

    Joe said...

    Tulving is no longer selling sealed boxes of 2011 Silver Eagles. Here is what he said:

    "Not Available

    Premiums Currently To High,

    In Our Opinion"

    Physical Silver market tight as a drum.

    Joe M.
    March 8, 2011 1:29 PM

  29. Link to comment on Tulving:


  30. Tulving has more silver than Idaho! Look at his "bar" page, where he sells silver bars and rounds. he has tens of thousands of ounces of silver for sale at under $1 over spot. Hardly what I would call a silver shortage.

  31. The WSJ has an interesting article on silver manipulation and the crazy people that invest in it!! But I guess it is still MSM exposure.



  32. Nigel - Mountain House is dedicating all of their next two years production to satisfying a government contract for $1 billion worth going to FEMA. Been hearing about it for the past few weeks.

  33. To those who are nervous, please keep in mind this quote from Eric King:

    "The comments at the end by Turk remind me of Jim Sinclair’s statement that people should hold on to their book (positions) right now. In secular bull markets, it is a huge mistake to lose your position.

    At the same time it is very difficult for individuals to hold on all the way to the mania.

    As Richard Russell often says, “Very few human beings are able to hold for the duration of a bull market.” "

  34. Nigel: On Feb 1 Mountain House posted, "As you know we have removed #10 cans from our website temporarily. The reason for this is sales of #10 cans have continued to increase… We expect this situation to be necessary for several months although this isn’t a guarantee."

    This outfit has some, and they have a monthly shipping option:

  35. Hi all,
    I'm new here to posting but been lurking for 2 crazy weeks of silver charts. I know little to nothing of PMs but have been looking to buy physical in the form of Sun Shine Minting bullion coins. It is local for me and a steady supply can be had at American Coin and Vault (Spokane, WA)for .50 to .75 over spot. Any thoughts on this?

  36. Just saw an awesome silver video on youtube...


  37. @Art -- I have no idea what the truth is, but Mountain House and The Freeze Dry Guy both say the demand is not for gov.

  38. coatrackbox

    Those are perfectly good silver rounds and the price sounds great. Grab'em!

  39. Turdle GG-
    Well said.

    interesting page on the Weimar Hyperinflation in Germany post-WW 1


  40. Art and marketcuriosity

    Thanks for the info. I did not know about Mountain House's contract to supply FEMA. $1 Billion is a lot of freeze dried food...

  41. @ Turdle regarding holding positions.

    Here is a GREAT personal example of what he/you are talking about.

    My wife and I each have a "stub" IRA rollover account and then we've got one, large regular brokerage account that I do the rest of the trading in.

    I put 100% of her "little" account in SLV on July 19, 2010... as of the close today, that account, with all the ups and downs in between, is up jus over 103%. I just let that account "run" on unchanged fundamentals because mentally I was willing to lose that money so to speak.

    As for my "master trading" in the larger regular account, with all my "master moves" and "hedges," over the same period, I'm up 40% and change.

    I'm not complaining about 40%, but with no hedging or changes,the SLV account is up ONE HUNDRED AND THREE PERCENT in 9 monhs with a simple "buy and hold."

  42. Why is FEMA buying one billion in freeze dried food?

    Who is that food for and what are they expecting?

  43. So we go up or down a buck or two tomorrow... who knows. Not a big deal in the scheme of things, am looking forward to what Wednesday brings. IMO think we will trend up slowly... we're still a month or so away before anything to really worry about.

    Also... please ignore any talk about WB (total nonsense believe me.... it ain't happening) or stocking up on food, water, PMs or batteries at this time.

    However, I did have to go out tonight and buy a 9V battery tonight for my wife's clock radio, it's been out, maybe I should have bought more than just one to be safe. Never know.

    Happy trading.

  44. @SSJ - I wonder if it is for the rumoured bunker under Denver airport. That much food would keep high ranking government officials and the elite going for a while. Just a guess if the $1 Billion FEMA order is real...

  45. Just finished reading the 0hedge post from earlier today:


    It's an interesting article. A possible rout in commodities for 5 months is posited. I don't necessarily agree with everything said, but, the important point is to be prepared if there is a breakdown in pm prices. It's always good to have 5-6 months cash available - if possible - and I've been a bit lax about that. My own feeling is that regardless how it happens, if JPM feels existentially threatened, they will do everything they can to survive - and they have plenty of friends in Washington. Best be prepared for something coming from any and all directions.

  46. @nfl

    What is WB please?

    I agree that the probability of total breakdown in the near future is low, however, it is not zero. One black swan could be a game changer.

    (Oh how funny, word verification = saness)

  47. 10Y/30Y Bond sale on Wed and Thu. EE is likely to paint a rosy picture for Dollar and bond to attract buying interest.

  48. Man I've flown in and out of DIA many times and every time I do I keep looking for that DIA bunker and how I can get down to it to check it out.

    The secret is in the painting on the wall in Concourse A. Trust me, seriously. It's all there.

    Gotta go.. wife needs me to put that 9V in the clock radio now. Happy trading.

  49. If we crack, we can hit mid-high $34ish range and then resume uptrend. This is what I am watching.

    If dollar spikes and creates a sell off, you can be PM will as well.

    However, the contradicting point is, the trend is still obviously up.

  50. http://www.turdferguson.com/

    hmmmmmmmmm.... silver foil hat?

  51. marketcuriosity - just google "mountain house fema order" and you can read all about it.

    "Truth? What is truth?"

  52. @Irene

    WB = Wynter Benton mythical character - total nonsense posted on a Yahoo message board some time back by someone claiminng to be ex-JPM traders busting the Comex out and making JPM pay for their evil deeds. Ooooh. Even got some "press" on Zero Hedge making it sound as real. It's not real, but many think it is.

    The probability of Silver breaking down now is low, I agree, but if it dropped 10% at this point I wouldn't be surprised, or too worried. Been there, done that before, keep the faith as long as you are not margined up in your account. In a month or two I'd be more worried, though.

  53. Fortinbras

    I'm also in SLV and GLD (hold the arrows everyone, I bought years ago and believed it was physical backed) but they both have fiated well for me. Kinda stuck with them as it is in a SEP IRA.

    My real concern is the Nov 11, 2011 date for GLD because on that date according to the prospectus "When the seven year fee reduction period terminates or expires, the estimated ordinary expenses payable by the trust MAY INCREASE, thus REDUCING the NAV of the trust more rapidly and adversely affecting an investment in the shares"

    Is it just me or is that an open ended statement to raid GLD for everything it is worth and say "Don't blame us we told you so!"

  54. Thanks, NFL, for the explanation. Boys will be boys. ;)

  55. Blue candles on the overnight.
    That $36 thing mentioned earlier by Turdle GC
    is pretty compelling stuff considering today's battle.
    Who cares if WB is real or imagined.
    The details are impressive

  56. @Vincent - someone or group just took a whack at 36 again in the last few minutes.
    In thin trading, it was pretty easy for them to smack it down under 36 again.
    I think the gold price needs to move up harder in order to clear air for the silver price to move under it.

  57. Thanks for bringing up the Mountain House issue, Art and all. Maybe this is redundant but you piqued my curiosity so I checked, Survival Warehouse, the site I ordered from 6 months ago. Just a month ago that page used to sport 19 #10 cans for $520. Now its 9 cans for $320 with a warning about delay.

    And no longer is there the large banner reading "IN STOCK NOW. IMMEDIATE SHIPPING"

    Now there is this shipping notification explaining the rationing Mountain House is issuing to their dealers.

    Here's the first paragraph:
    How long should it take to get my Mountian House order?

    Dear valued customer,

    We at survival-warehouse.com wanted to give you an important update on the status of all Mountain House Foods both #10 cans and pouches. The demand for survival foods is at an all time high due to current events and the world food shortage. This has affected all remaining Mountain House dealers in America. Because of this demand, and problems with production at Mountain House food products are only being made and shipped on a very limited basis in #10 cans. Mountain House has been overwhelmed with orders, so much so that Mountain House has stopped selling to 92% of their dealers. We are one of the few and largest Mountain House dealers.

  58. actually I'm going to post the rest of that statement. It's compelling on in it's own right.


    Survival Warehouse is allocated by Mountain House the largest amount of #10 canned foods produced. Only four (4) entrees are produced by Mountain House each week and the supply of each is very limited. We have standing orders for the maximum amount allowed by Mountain House each week. This problem could last 120 days or more. Due to the #10 can shortage, people have been buying the Mountain House pouch foods. The pouch foods are now on back order like the #10 cans.

    We appreciate your patience and we are shipping orders every day. We ship on the first in, first out basis. You will get your food order if you keep your order in our system. We have no way of estimating the time needed to fill your order. We also do not know what we will get from Mountain House each week. We do know that we get as much or more than any of the remaining Mountain House dealers. To expedite orders of our survival food packages, some substitutions will become necessary. Any substitution made will be of equal or greater value. Backorders may be required when substitutions are unavailable and will done at no extra cost to you. We will pay for any shipping cost of back ordered food items.

    We only charge your credit card the day we ship for the amount we ship. We will never charge your credit card for products we do not ship. We recommend that you place your order today to lock in the current low prices. Prices will be going up as the demand continues to increases. We have been in business since 1993 and have never seen this type of shortage. The lines will only get longer and once the general public figures out what is going on worldwide shortages will increase many times over. I wish I could give you better news. Regular updates and the truth is the best we can do. Below I will update the "Recommended Action" for our current condition.

    Kind regards,

    Jeff Mann
    03-04-2011 update

  59. Watching the 1 minute gold and silver on netdania.
    Was an impressive smash.
    It does cause one to wonder (if it is EE) what they must be thinking about these days

  60. Strong side,

    Awhile back FEMA was rounding up trailers, tents, MRE's and the like.
    Some were speculating about a catastrophic event on a fault line in the midwest (you know the one).
    Story said they were mobilizing supplies for delivery to GA, FL, LA, SC, MS, etc...
    Hurricane advance prep (September time)is what I concluded could be a logical answer to your question

  61. The strength overnight the last few days has been really impressive. The Asian demand is just unbelievable. I wonder would the Chinese central bank participate directly on the futures markets?

  62. They've got plenty of dollars to buy it with.
    That's for sure.

  63. Coatrack -

    The Sunshine Mint was recently purchased by your neighbor, Bill Gates, which could explain the local availability of their silver rounds, but don't consider this supply situation typical of the rest of the country.

    StrongSideJedi -

    A lot has been written about the Weimar Republic hyperinflation in 1923 Germany, but I think you will find this one to be superior. It was written in 1970, and it gives a detailed account how it unfolded, and a description of how various assets performed as a hedge.


  64. The suspense is killing me. Either break up so I can buy, or break down so I can buy.

    By the way, Great interview with Catherine Austin Fitts over at goldseek.com, gonna have to listen to it at least twice.

  65. Just buy now then, SoccerDad.

  66. It doesn't cause me any anxiety at all to watch silver consolidate around a $36 an ounce price. I think the key months to watch will be May & June... they may be some noises made about suspending QE for a while which might send prices down, but longer term than that I think it's all good. Isn't the first quarter of the year supposed to be the weakest for PMs? And look at the gains they've made in the last two months.

  67. Alright, things were looking dire for a while there - I had my finger on the button to reverse my position if we broke down to 35.80 - but now we're back up near the upper line of Turd's triangle. Let's get this going right up through 36.20 before Blythe wakes up!

  68. Gadaffi has just said he will defend the country against foreign powers if they interfere with a no fly zone....things are hotting up, looks like oil and metals are on an increase on the news.

  69. adrian douglas's analysis of trading in the silver markets depending on whether it's between the PM and AM fix or vice versa is some of the best evidence i've seen of the manipulation scheme. someone charted it, you actually would have lost money on silver over the past 4 years if you traded US times only, while doing the opposite has about doubled silver's performance:


    youtube chan of the guy in question (not me!):


  70. Simon, could you post a link from where you got that graph? Thank you.

  71. Or at least do you know what's considered "US time" and "NON US time"? Adrian Douglas in his article (https://marketforceanalysis.com/articles/latest_article_081310.html) talked about am and pm fixes (5:30am and 10am EST).

  72. Vedast, this is the blog from the same guy who runs that youtube channel:


    he does a good vid on silver daily.

  73. Great, thank you, Simon. I'll study carefully that anomaly.

  74. New piece up on OHedge by Jeff Clark on the Driver for gold no one is talking about....the Global Pension funds.

    Even if they paused QE as Butler suggests these funds will need to look for a market to invest in. Either way, gold and silver are going up.

  75. coatrackbox,

    There are options for you other than SLV and GLD in your IRA. Consider PSLV or CEF. Both of these funds hold physical Ag, Au unlike the paper ponzis GLD,SLV.

  76. from the Jeff Clark piece...

    "Global pension assets are estimated to be – drum roll, please – $31.1 trillion. No, that is not a misprint. It is more than twice the size of last year’s GDP in the U.S. ($14.7 trillion). We know a few hedge fund managers have invested in gold, like John Paulson, David Einhorn, Jean-Marie Eveillard. There are close to twenty mutual funds devoted to gold and precious metals. Lots of gold and silver bugs have been buying. So, what about pension funds? According to estimates by Shayne McGuire in his new book, Hard Money; Taking Gold to a Higher Investment Level, the typical pension fund holds about 0.15% of its assets in gold. He estimates another 0.15% is devoted to gold mining stocks, giving us a total of 0.30% – that is, less than one third of one percent of assets committed to the gold sector. Now here’s the fun part. Let’s say fund managers as a group realize that bonds, equities, and real estate have become poor or risky investments and so decide to increase their allocation to the gold market. If they doubled their exposure to gold and gold stocks – which would still represent only 0.6% of their total assets – it would amount to $93.3 billion in new purchases. If these funds allocate just 5% of their assets to gold – which would amount to $1.5 trillion – it would overwhelm the system and rocket prices skyward."

  77. Hey turdites,

    Any technician out there cares to comment on the rice chart? I bought at the bottom some weeks ago but it looks like it doesn't like higher prices and it freaks me out. Also, possible S-H-S formation? Agriculture in general doesn't seem to be very strong, does it?

  78. coatrackbox/Marcel

    GTU is another great option. All Au. I own it in my Roth.

    CEF is 50/50 Au/Ag. Also a good one.

    GTU and CEF are run by the same folks, been around a long time.

  79. My view is that all this talk about ending QE is to contain the oil price...working for a moment...like everything else they do.

    A large trader I know...(Blns)...expects oil to go higher than '08. The hedge funds own more oil than Cushing, Oklahoma.

    Hold on to your gold and silver foil hats!

    btw, I drew a line on spot silver at 35.84ish the other day, holding well. Interesting.

  80. On a previous thread a poster suggested (and I have seen it written here before) that the price of silver would go down if they end QE2. I don't get that at all. Ending QE2 would surely hasten the end of the dollar and further the flight to PM's no?

    nfl - I think we are heading up. Back over 36 this morning, and looking good to me.

  81. Anyone know of a place to watch the after hours chart on stocks like SLW?

  82. John-

    I suggest you not even watch it the spreads get much higher in after hours and the moves are almost always "fake" because the volume is so low. You really should not start to watch the stock price till around 8am eastern time.

  83. R L Parker wrote: "I wonder would the Chinese central bank participate directly on the futures markets?"

    some say they are the big counter party to JPM

  84. Really good Chris Waltzek interview out today with my favorite female PM brainiac: Catherine Austin Fitts. This is one switched-on American woman, way, way ahead of the curve.

    Listen and learn. Her underlying theme the past 18 months has been to get out of their system and reduce one's need for cash money. Reduce overhead.

    For me, I want out of:
    -their money
    -their news, movies, and entertainment
    -their poisons (aka their medicines and vaccinations)
    -their food
    -the mindless consumer lifestyle

    "They will not control us. We will be victorious."
    -Muse: Uprising


  85. Others Speculate that China are Shorting silver on the Come via offshore holding companys while picking up physical..... Intention in the end to defult on the shorts and go bankrupt holding the cheap physical.

    I dont think they were too impressed with the USA not returning their silver from a few years back that was lent on nthe basis of favoured nation status.

  86. @ewc58

    Yeah I listend to her interview and she was spot on on everything she was saying, good to hear that an insider is willing to say it how it is.

  87. I don't think BB could end QE if he wanted to. QE has been supporting the bond market and the stock market since last August and if the spigot was turned off everything would go to heck. And, if QE ends gold and silver go to the moon. Just my .02.

    Opened a practice futures account, bought some Aussie dollars and some Pounds. Been getting my head handed to me for the last couple of days. Got a lot of work to do before I go live with real money.

    As always, great contributions from all the commenters.

  88. Hillsie: +1!

    Lots of 'talk' about China and their role in what is happening. All bullish to me. But then, what do I know...

    BTW: love this place and thanks for all the many great voices, wish the best to you and yours

    maybe we could call this the Turd Pile

  89. Hillsie: true dat.

    Ron Paul and CAF in 2012. With Catherine as President. Way tougher than Ron, we need that right now.

    Vote for Fitts, she'll give 'em fits!

    or something like that... :-0)

  90. Well silver has slightly broken up through the consolidation trend line on my charts, worth waiting an hour to see if it holds the breakout.

    The general consensus about the ending of QE seems to be money flowing from risk-on to risk-off assets. Traditionally that would be Treasuries, however if we see that money heading PMs way instead as I suspect we will then PMs will become the new safehaven (as they traditionally were - reversion to the mean and all that...)

  91. xtybacq

    It's just like the Crash of '08. Did it hasten the end of the dollar? Yes. Did it mean that gold and silver went straight up? No. It took some time and had to rebound and then snap higher. A lot of people got shaken out of their positions in the downturn. A lot of people are fearing a replay of the same for 2011, but hopefully not quite as bad on the oil and metals front as people see through short term fears and realize this time that a crash doesn't mean deflation, but instead means more future inflation. But if you think that we'll see weeks and months of stocks and bonds crashing, and gold, silver, and oil spiking higher, well I don't think it's going to be that easy. More likely it should be played as a huge dip to buy, just like in '08.

  92. eric#1,

    no, I don't hold BPM . . . yet. It's on my watch list though, thanks too you.

  93. Harold and zugz - yeah, you both confirm my thoughts. One, they can't really end QE2, and two, if they did the traditional behaviour wouldn't hold and a flight to pm's would seem logical.

    This morning is certainly looking bullish to me, but then I am beginning to sound like a broken record.

    emc58 - with you up until the medicines. I be dead, and #3 son be very dead without western medicine and the wonderful medicines produced by western thinking. I am not at all happy that we are seeing the end game played out here - I am afraid many people will suffer terribly, and someone like Ginger who needs medication for her child is genuinely concerned. There is much excess and much to lament in western society but there is also much to celebrate. I am furious at our 'masters' for being so negligent and even actively destructive in their greed. Let us hope we can salvage the best and good riddance to the worst.

  94. xtybacq

    To add to Eric#1, the end of QE2 (3,4,...) would cause interest rates to rise significantly, which would impact the price of PMs in the short run. However, as those interest rates rise to a level where servicing our debt is impossible and confidence in the dollar collapses, PMs will soar on demand, according to economic theory.

  95. I'd like to second Johan's question about the rice chart. Maybe it's not quite a precious metal, but I suppose it's another potential unit of account once fiat is gone...

  96. Marcel

    Yeah, they are lifting ore, but sounds like they got one more "t" to cross on their permit or something before they start milling it. I hate that.

  97. ewc58

    As you are no doubt aware, Catherine Austin Fitts coined the term *tapeworm economy* almost 10 years ago. She's been an advocate of unplugging from the system for at least that long.

    this (old) from her blog

    I highly recommend her writings to all of the Turd Herd who may not already be familiar. She is one of the people who helped me connect the dots.

  98. eric #1 - thanks for the reminder of 08. I have been meaning to see what if anything held it's value best. I would not sell physical, but one wonders how to approach this best. If I had the real courage of my convictions I would be way more in physical - but we are still trying to 'reap'! Have only a few equities left much to the horror of the traditional banking world and I will be selling them soon, everything else pretty much is silver and gold related, but still involves institutions.

  99. We're a little overdue for our morning beating aren't we?

  100. Bro D - I just think that the collapse of the dollar would be essentially immediate.

  101. Saw a few physical trusts mentioned so I'll add mine:

    BMGBullion - choice of pure gold, or a gold/silver/platinum mix. I own the mixed one.
    Silver Bullion Trust (all silver)

    These are unallocated and unencumbered. Physical delivery is an option tho expensive.

    Storage vaults are located in Canadian banks. Where the citizens are generally unarmed, banks incredibly highly regulated, and the gov't tends not to seize assets. Which leaves the biggest risk a US invasion bandied about here earlier. I personally like to think of the US as not the type to take candy from babies but do your DD!

    Eric#1 those last two sentences are for you :)

  102. agree with eric #1 & bro.d - either they will print more = good for metals or interest rates will rise, ad for metals but US cannot service the debt at higher rates and metals again becomes the hot sector.

    have cash on hand if in the event physical and miners get hit hard like in 2008. hedging accordingly - might be a waste with increasing money supply but never hurt to be a bit more conservative.

  103. xty
    Yes, the '08-09 wipeout in miners and oils was horrifying, believe me. I still have nightmares.

    Just did a little checking. GDX went from 56 to 17, the XLE from 88 to 38. While we all figure everything boosts gold in the long run, the short run can sometimes wipe you out before you get there.

  104. While I'm on my soapbox. . .

    This was the final dot for me that tied it ALL together.

    IMO a must read


  105. My own sweet baby Suncor went from 71 to 16. It's tough to maintain the courage of your convictions in the face of something like that.

  106. Good morning all.

    I want to thank that person for posting the link to the story on Weimar Germany written in 1970. That stuff is really interesting reading for any who care to learn. The more I read that stuff, the more I see parallels to existing Federal Reserve policy.

    When he was appointed, this guy Bernanke struck me as a typical professor type. Now, I just hope he can keep going with his scheme. After all, I'm locking in my capital and want to lock in more capital over the next year.

    For any of us who are going long on precious metals, we should all be hoping for a long-life, good health, and continued stability in EXISTING monetary policy. If so, we will be successful in continuing to shield our families. The more this charade continues, the further we can quietly distance ourselves from the American Idol loving, paper money dependent crowd. God help the people stuck on the lower decks of the ship.

    With every gold and silver purchase made in the last year, I am pushing my family up to the higher decks.

    That write up suggests to me that the holding of productive ag land and gold/silver continue to be the strongest plays. This will shift when economic policy shifts.

    As a sign post, at 0855 AM EST today:
    Kitco Spot Gold bid was 1434.30
    That is up from 1424 last night and slightly down in the last few minutes from peaking above 1435 (gee where have we seen that number my friends).

    Kitco Spot Silver bid was $36.34
    Where have we seen that number before?

    I've been typing this message for the past five minutes, so we'll see where/when Blythe et al smack down the silver and gold spot.

    Best wishes to all of you.

    This blog is like throwing a life preserver to drowning financial ship wreck survivors.

  107. xtybacq,

    Gold was the best performing asset in '08. It was only down ~20 or~25% and bounced back earliest.

    I'm being indefinite about the amount cuz I'm too lazy to look it up.

  108. oil above 105.7

    if it hits 106, should be good for the PM's

  109. I prefer to remember the bright side of '08. . .
    It allowed me to buy TKO @ $1.00 and lots of EXK between $1.45 AND $1.80 in the aftermath

  110. Important story at ZH:


    There is no-one with better connections than Bill Gross. Has QE3 been cancelled?

  111. volume noticeably boring this morning compared to yesterday morning. 36.30 seems to be the level right now.

  112. sumo
    That ZH story on Bill Gross has me pretty much speechless. wow.

  113. sumo,

    thanks for that. That is HUGE. checking it out now

  114. Anyone else having problems this morning with the Kitco toolbar that updates gold and silver prices? All of a sudden I'm getting an error message and it won't work.

  115. Eric #1 - ouch ouch ouch - we lost something like 30% of everything I think

    Marcel - yes, I am a bright side person too - so I like your answer, hold gold, and buy things if they are on sale

    And because gloom was setting in, I went and bought 10 1 oz rounds, and 2 5 oz bars from Great Panther. Total - $795 can with delivery, so 39.75 can all in. Just had to do it, before the market opened. I wear the biggest tinfoil hat in the family and convincing everyone to fill the basement with candles, water, peanut butter and shiny chunks of metal is a but tricky. But it does satisfy my shopping addiction!

  116. With regards to the article about the potential pause between QEII and QEIII causing a fall in everything, including silver.... I think that would be a damn dangerous thing for the Fed to do. If they were to do that, not only would things fall...things would collapse. The entire rise of the DOW is built upon their easy money and when that ends, things will move down so hard and so fast that strong negative feedback loops would kick in. Their illusion of prosperity would end. Permanently. They would loose whatever tenuous control they have of the markets and would have a really hard time getting it back. For this reason they can't afford to do anything more than jawbone about ending the QE cycles.

  117. BTW, if anybody wants to reply to me, just plain "Eric" is fine. I only had to add the "#1" bit recently when there was confusion about another "Eric" poster.

  118. Marcel,


    1. Charles "The Hammer" Martel. Defeated the Muslims pushing into Europe in a decisive battle at Tours, in France, in the 8th C. Set up Charlemagne to run with the ball after that. Martel was a smart tactician and quite the fearsome warrior. His favorite hand tool was a battle hammer, hence his handle.

    2. a fine cognac

    Nice taste

  119. silver futures falling out of a rising wedge right after the open.

  120. I don't understand why the pm futures take a hit when the stock market opens. Happens frequently.

  121. Looks like the elevator cable broke !

  122. And "Poof" just like that my gains at the open are pretty much gone. :(

  123. there goes boring for now at least

  124. BB is buying 73% of US Treasuries. Who will buy them if he stops, George Soros?

  125. The only reason I can think of to cancel/pause/delay QE would be if the Fed's intention was to wipe out approximately $1T (maybe more) of paper/fiat currency.

    I can actually understand them wanting to do that, but what it could spark would be pretty f'ing dangerous.

  126. Probably BM shorting GLD & SLV. :-)

  127. So what did we hold yesterday? Something like 35.70ish wasn't it? Be interesting to see today.

  128. Thanks Scott! I can check the price when I want to, but all the charts I can find stop at the close of trading. I would like to watch the pre and post market price on a chart like they have running when they show a stock on Fast Money after the close. Was just wondering where that chart comes from.

  129. Nothing to see here....this market action is perfectly normal....WHAT A CROCK....this is a criminal act that happens virtually daily...CFTC? What a joke regulator....

  130. Nigel,

    The freeze dried companies are restricting delivery of their number ten cans to their biggest retailers.
    This has been a trend for some time now.

    Rumors have it the FedGov is a big purchaser of freeze dried right now.

  131. Eric The First,

    Don't worry bro, those gains will be back soon, and they're bringing lots of friends.

  132. Two days in a row it looks like someone want silver low for the London close.

  133. Maybe Jacob Rothschild will bail out the U.S. Treasury. Yeah, I bet that's it.

  134. Way to blatantly manipulate - almost the same pattern followed over the last 3 days.

  135. I set my clocks to Blythe's dumps.

  136. New to the site and love it!

    Anyone notice how spot crashes for the PM London fix. (10 am NY). Could this be the price where those derivatives kick in?

    Sorry if this has been observed before and I missed it.

  137. JE: "Could this be the price where those derivatives kick in?"

    so they say

  138. MVW up nicely today EA

    PC Gold, Fortuna, Rye Patch, Tarsis, SQIFF and Pretium all green on my board.

    Folks, get some Energy stock exposure. Oil isn't coming down anytime soon and like w REE and Uranium stocks, there's no BM and the CFTC rigging the game.

    Check out Sonora Energy, as well as MVW/MNVWF. Strathmore and Hathor are 2 Uranium Juniors well worth looking at too.

    Good hunting Turdinistas

  139. Comment on ZH & Bill Gross

    they could halt QE and get the markets to pull back for a short duration taking AU & AG with it...then turn the presses back on...desperate people do desparate things

  140. J.E.

    Don't be sorry about that one, bro. You are dead spot on.

  141. New Stategy. Long 1/2 position @ PM London fix. Long 2nd 1/2 position during PM globex raid. Sell at open in NY.

    Looks solid for last couple of days. Unsure longer term. Anyone trading this way?

  142. ewc58

    My pet Avino is a hero on my screen today.

  143. @Eric - how does one allocate their IRA funds to PSLV, etc? Which broker(s) have PSLV as an allocation option?

    Much Obliged!

  144. Could it be that 36.00 is indeed Blythe's last line of defense? The opening of thge CRIMEX would seem to indicate it.

  145. MisesFan

    It's just an ETF. You just buy it like any other stock. Same as if you buy McDonald's.

  146. can some one explain the bill gross dumping bonds to me. is that bad for silver our good

  147. J.E.

    Grab some friends and get 'em on here too. We welcome your input and ideas. Everyone's polite and respectful to one another here and that generally moots any need for apologies.

    Of course, whenever an AGA makes the mistake of dropping by, we either tear that person to shreds, or totally ignore them. Don't feed the troll works very well.

    Depends on how feisty everyone is on any given day. So far today, you can see that BM is kinda pissin' some of us off :-0)

  148. Taking a stab:

    Anyone think Crude Inventories released in 15 minutes will be important at all?


  149. MIses

    Maybe I'm missing the point of your question. Are you asking what brokers will set up IRA accounts? Pretty much any of them. Once you are set up and funded, buy whatever you want, including PSLV, CEF, or whatever.

  150. Well...Turds "magic hour" is looking better...and I HOPE I didn't just jinx it...


    Open an IRA account through etrade/ameritrade/scottrade...and then transfer your IRA there. I just did mine...this is what I'm playing in silver with. Following the herd here...

    It's been GREAT advice so far...I just wish I had followed it and not tried to hedge against it...being from NJ, I don't trust easily.

    Good luck to you...

  151. and the issues keep piling up.

    As per ZH, oil tanks on fire in Libya, iran & their nuclear weapons capability, and russian crude exports blocked in thick ice at russian baltic ports.


  152. Scott
    Seems like all the Libya stuff far far outweighs anything they could possibly say about inventories.

  153. Something else I found intriguing. I read a manipulation complaint (unsure of the author) to the CFTC. In it were a series of charts through the silver crash of 2008. If you just traded through Sunday (Asia open while most NY banks out of market) you would have actually come up! This while silver crashed. Food for thought if we see a repeat of all asset classes tanking.

    The complaint mentioned that no other commodities market acted this way.

  154. Oh poo, I take that back about Avino.

  155. I've been noticing that many mornings upon NY Stock exchange open, metals have a beat down. I'm just wondering if this is being used to signal to certain traders to what the particular strategy will be for the day.

  156. Sorry for the delay. Mrs Ferguson required some attention.
    A new thread has now been posted.

  157. Eric: Aurcana! Just swap out your "A"s!

    Just ribbing you, kno u luv Avino. :-)

  158. @Eric

    Thanks for being patient with my ignorance.

    My Roth is sitting with American Funds. Unfortunately, American Funds does not have PM related allocation options.

    I am currently in the process of trying to determine where to roll over my 401k funds (just switched employers). Obviously, I am looking for allocation options into PMs.

    I contacted Precedent, but there IRA contact has not returned my phone call.

    As always, thanks for the hand holding (to the entire Turd Bowl).

  159. caramel, the problem with the Kitco toolbar appears to be Firefox-related. I installed it through IE just now and it's working fine.

  160. This comment has been removed by the author.

  161. Those that are buying firearms..please LEARN how to use it. It is just an expensive club otherwise and could put you in jeopardy if you haven't fully practiced with it ( like how to clear to stovepipe for example)

    If you want to learn how to shoot a rifle effectively out to 500 yrds please attend an Appleseed weekend clinic. Appleseed is a non for profit group that teaches only 2 things... Rifle Marksmanship Fundamentals and American History. They are "a" political and will not preach to you about modern politics. I am an instructor for the program and can attest to it being family friendly, fun and highly successful at teaching those two things at a highly reasonable price ($70) for men, $5 for those under 21, $10 for women and free for active military, LEO's and publicly elected officials.

    here's the website:


    there is one close by to you...you'll be glad you did.


  162. posterboy,

    WTF??? $70 for men and $10 for women screams sex discrimination! Just TRY to do the opposite some day (charge a woman 700% more JUST because she's a woman) and hear the screams!

  163. @johnboat - You can view pre- and post-market trades at nasdaq.com.

  164. Joe....

    I know we only make dad pay...so that he can bring the whole family !

    We are all volunteer none of us make a dime and $70 for a full weekend (9-5 both days) of excellent instruction is as big as steal as silver.

    we've been on Fox News and in the WaPo and NYT

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