Friday, June 4, 2010

Quote of the Day?

"Like I said earlier, my wrong call on the dollar - so far - is analogous to being a foot or two off the mark in horseshoes and handgrenades. But I could care less. You see gold today? That's the effect of the euro collapsing and every European who can fog a mirror trying to buy some gold. If the dollar spikes up because the euro is being used to fuel furnaces in northern Germany, that's not good even for dollar holders."


  1. What A total clusterf#ck of of day. I think I am more nervous now than at the March 2009 lows. So much lying going on and things are getting worse all around.

    have a great weekend!

  2. Hey GYC. Have a great weekend yourself! Let me know if you post any BBQ pics. When you feel like you do about the metals, you need to grab your balls w/one hand, buy more, and then plug your nose w/your other hand and close your eyes for a few days.

  3. Have you seen all of the latest Bilderberg related videos, especially the ones talking about their agenda of taking the Euro down to 1.15 and then down to 1.10 against the USD?

  4. Not yet - Any links would be much appreciated.

  5. Dave, The USD is not only going up against the EUR.

    I't's going up against all toilet paper.

  6. To be honest the silver double top at 18 sucks and even Mish sees a huge sell of in all things COULD mean gold at $680. I dunno but I am not selling anything come hell or high water. The act is set we know what is next.

  7. Here are a few links of current events only; there are more historical videos out there:

    A follow-up about the press conference (below):

    Recent EU Parliament press conference about the Bilderberg group (most of it in English) - part 1:

    As a side comment, and maybe you can address this in a post here if you like, what do you think about the very large build-up of gold shorts in the last few weeks:

  8. GYC, one of these days you'll finally understand that Mish is a legend in his own mind. Big hat, no cattle, especially when it comes to REALLY understanding economics, monetary theory and practice and ESPECIALLY gold and the role of gold and why gold has played that role for 5000 years of organized human history.

    The world has functioned on some form of gold/silver standard for about 90% of those 5000 years. This period from 1971 to now is by far the longest period in which fiat currency has been used. Not coincidentally, the world is looking at the biggest economic/financial disaster unfolding in history.

    What's his educational background? Financial markets experience? He doesn't disclose other than that he's a registered investment advisor. That means SHIT. I've forgotten more about finanical market theory, economic theory and practical big bond market making experience 20 million up markets in junk bonds than Mish will ever know. I don't know why he gets so much press and I don't care. Dennis Kneale gets a lot of press too. Both are strawmen.

    Double top at $18? What double top? I remember when people were worried about a double at $7.50 and before that at $5. I remember when gold broker over $390 and Prechter came out and said it was going back to $50. How's that call loolking?

    For every Mish and Prechter out there, I can present several long, long time respected and erudite members of the gold community who will tell you gold is going to $5000 and why. These are people who have been doing this since the 1970's.

    The only thing I've seen Mish do well is make sure everyone knows he sells investment products and knows how to garden.

  9. re: toilet paper. Agree and the US dollar itself is used toilet paper. ALL of that toilet paper is going down vs. gold and silver.

    I don't really care if the dollar goes back to its 2001 121 level. If it does it means we are in just as much trouble as we would be if it breaks below 71 then 67.

    All I know is that oil slick barack and helicopter ben are going to each have to roll out their own massive stimulus programs (trillions in the case of bernanke) or our system will completely collapse.

  10. JR, the net short position of the commercials in gold and silver are actually starting to look bullish. the commercials have been working really hard to reduce their shorts from the peak a few weeks ago and if you listen to Ted Butler, you'll find that within the commercial segment, the smaller commercial shorts have been covering like crazy. JPM is doing nothing but defending its massive short position and it appears that it might have traded itself into a paper bag that it can't trade out of.

    2.2 mm ozs of silver left the customer "eligible" inventory at the Comex two days ago. What does that tell you. Most of it was removed from Scotia. Big investors do not trust the Comex to safekeep their metal and it is being removed.

    The only thing "bearish" right now is the extreme fear and negativity among the amateur goldbugs. THAT in and of itself is very bullish. The HGNSI sentiment indicator is as low as it was in oct 2008 and it's been that low for a several weeks now...

  11. one more point gyc: listen to ted butler on kingworld news. i criticize his stance on his expectations for the CFTC to reform metals trading, but butler knows more about every aspect of the silver market than anyone I've ever studied - including my profs at u of chicago grad school - know about any market.

    his own indicator of the silver market is 90% bullish and if we blow below the 200 dma it will be 100% bullish.

    we actually bought a bunch of silver for our fund yesterday. silver eagle boxes. tulving is getting wiped out of his inventory - gold and silver - which tells me prices have only one way to go.

  12. JR, I think you are referring to what Butler was referencing in his discussion of the bank participation report and the huge short position in paper gold by US banks. Contrast that with the COT report which is actually neutral this week and trending slightly bullish over the past couple of weeks.

    The US banks are fucked on their paper shorts right now and they are trying to defend their position. You can see it in the "tape" if you watch/trade the futures all day long like i do.

    But note how Butler also references the enormous money flow globally going into physical gold and silver. This is going to completely overwhelm the paper short positions.

    Butler thinks we may have a rocket ride soon in silver. This correlates with the view of myself and the dude who originally dragged me into this whole thing back in 2001. He's never been this bullish on silver. Butler rarely has been this bullish.

    We are at a crossroads in which the physical demand - AND THE DEMAND FOR PHYSICAL DELIVERY VS. KEEPING IT IN COMEX/HSBC/SCOTIA SAFEKEEPING - is going to completely overwhelm the paper bullshit. Prechter and Mish can take their ignorance and shove it up their respective asses.

  13. Once the U.S. mint suspends production of gold eagles, Europe won't be able to source 1 oz. gold bullion coins and they'll turn to silver.

    You mean the yellow stuff intended for making nice coins is going to be dried up? Therefore retail will turn to silver then?

    Sound strange for me. Because i do not believe boyz are going to allow themselves to be exposed soon. My understanding is silver market is too thin to supply even retail sales near today prices in the case of gold shortages.

    Isn't it more probably another unexpected gold sale (bailout) will occur as always, so silver shortage will be avoided? Vaults are full of gold, there is always some bank to take gold from but where to take silver in similar amount?

  14. Dave, I really appreciate your comments! I suspect that Mish and Precher have been chosen for MSM exposure because they aren't threatening any Crimex bosses. Who knows...there might even be payola under the table. I am not an econ wiz (I wish Harvey Organ would dumb things down for me) but I have seen this sort of 'selecting' many many times!

  15. stibot: don't assume the vaults are full and don't assume that the gold in the vaults is legally available for the banks to dump on the market. Look at GLD for instance. Not once has the truste, sponsor or custodian issued a public refutation to the numerous accusations, backed up by specific analysis of the Prospectus, that a large portion of the gold is being leased out. Not once. Don't you think they would at least put those fires out? Here's why: if the publicly refute the accusations, and then the accusations prove to be true, they are guilty of fraud. BUT, if they hide behind the Prospectus, which is designed to allow leasing and has been approved by the SEC, they can say they had no idea that the subcustodians were leasing out the gold and the Prospectus doesnt allow them to audit the subs.

    Furthermore, globally Central Banks have become net buyers of gold. That means that they do not stand ready to unload their gold to help containt the price.

    Silver is still very cheap to gold on a relative basis until it gets to a like 15:1 price ratio. All I'm saying is that the 'ole "poor man's gold" effect will kick in because people would rather pay $40 or $50 for 50 or 40 ounces of silver than $2000 for an ounce of gold.

  16. Redneckistanian: that's an awesome nickname. Prechter I think just did too much LSD in his academic days - he's a 60's child. Mish I think is just a dope who has garnered a populist following which doesn't know any better.

    I don't care if people agree with me, but Jim Rogers and Marc Faber, both of whom are self-made investors with definitive track records using their own money - unlike Mish - both see inflation then hyperinflation. I'd say the odds favor a bet on those two horses rather than some dork who cultivates roses.

  17. I think we are close to transitioning point in silver, with silver paper becoming a fungible and Ag being a commodity divorced from the fungible paper price.

    1.JPM has been under cash pressure now for over 18 months according to its balance sheets which show dramatic falls of free cash at banks to be replaces by collateralised accounts. This type of pressure accelerates as a collapse ensues.

    2.Ted Butler in his latest broadcast says that Eric Sprott is going to have to wait 5-6 months for delivery of his latest silver for his fund. This period 5-6 months delay is usually a trigger for a default call in physical markets (if it is not done in six months it is never going to be done). It is the period for instance written into all Export Guarantee Departments worldwide and is an old customary waiting period under UCC contracts for winding up and calling of guarantees.

    3.Harvey Organ reports the delivery action in silver on the two big delivery months as March( 22 million oz) and May (24 million oz). However we have not seen that this has been deposited into the COMEX and paid out as it should be. So a shadow pipeline must now be being run outside the reporting structure. It could be that this pipeline is the one that Ted Butler reports has been stretched to six months. Put simply the March and May deliveries may not have been made but could be in the middle of pile of lawyers arguing over the real delivery dates for the commodities.

    4. There are other reports that JPM is going to be subjected to a class action for price rigging next week.

    Put yourself as on the end of the six month delivery pipeline with a sizeable order subjected to non delivery for six months. Would you wait for the lawyers to send it in the post? or would you deduce that the market is going to wind up in within the six months and you aren’t going to get your silver. If this is the case why not litigate now to get ahead of the cue with JPM, the COMEX and a constructive collusion case against the CTFC and use this as a lever to get delivery accelerated or a preferential position in a collapse.

    If this is the case then all other analysis of the commodity silver is no longer functioning as price point for silver will start the day the litigation is accepted by the market as bringing the market to an end.

    Do you think we have come to the end of the road yet?

  18. Great information summary. The only correction is that Butler was referencing the CEF fund, not PHYS. CEF is 50/50 gold/silver. I was shocked when I heard that they had to wait that long for delivery. I just emailed a colleague with a good call into the people who run CEF to confirm that comment from Butler.

    Have we come to the end of the road yet? I thought that what is happening now would start happening in 2005. Some people think the real shit will start hitting the fan in August/Sept. If the physical tightness in the silver market is for real, and if gold is getting a lot tighter - as it appears - things could start getting really ugly regardless of whether the Fed really cranks up the printing press or not.

    I haven't seen Tulving this wiped out of gold/silver products in quite some time. It's definitely getting interesting, especially now that a lot of formerly die-hard Obama supporters are starting to lose faith.

  19. A concise summation of where we are headed from Mark Lundeen.

    “Monetary Policy” is being managed by a moron. What else should I call someone who is trying to save a financial system by destroying its unit of trade?"