Commodity Complex Pummeled In Preparation For QE 3

Tyler Durden's picture

Not at all surprising, the entire commodity complex just swooned, supposedly on the latest DOE inventories data, which saw a surge to 2878K versus expectations of -1600K, up from 616K previously (same surge in gasoline inventories, which surged to 2553K on expectations of 900K). We say not surprising, because crude, and thus all the other uber-correlated commodities, needs to drop at least $10-15 from here before the Fed can then proceed to triple its price once the money from QE 3 start sloshing around. We expect significant more downside weakness in Crude as the realization that QE 3 is inevitable finally dawns on Wall Street. Remember the Catch 22: everything (commodities, stocks, etc) has to go far lower, before everything surges yet again post the next monetary easing episode.

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hedgeless_horseman's picture

Stable prices since 1913, bitchezzz!!!

idea_hamster's picture

Relax -- it's not the Fed.

It's probably just GS's prop desk freeing up cash to slush Unnamed Coconspirators 1-20.

Idiot Savant's picture

The QE half-life is certainly getting shorter. We're not even getting high anymore, just maintaining the buzz.

Bam_Man's picture

And don't forget the "full employment" part.

Federal Reserve Act of 1913 = Epic Fail.

jus_lite_reading's picture

A little off topic but.... a boy sells his kidney to buy an iPad2!!!! WTF??


mogul rider's picture

If you think you are ahead of the curve


Look again,


You just got bent over

Bay of Pigs's picture

Mr Rear View Mirror speaks again. It's almost like you are glad to see PM's drop.

Printed $1539.50 on the London PM fix today. A whole dollar away from an all time high dickhead.

mogul rider's picture

yo deuchebag - your painting gold in toilet paper ya moron.

Get a real currency, it is down 20 bucks.

It's down becuase you fcucking pumper morons are buying the bullshit play,

If gold is not risky why is it getting sold fool boy

It's called pump and dump stupid. Keep buying,

I need an idiot to buy the top like you do every other fucking time. , thanks

Bay of Pigs's picture

Gold down less than 1%.

You call it a crash. LOL.

I call you a useless troll.

trav7777's picture is down $5.50 last I looked, dipshit

tmosley's picture

Damn.  Glad I waited.  Let's see what happens by next Wednesday.  

tekhneek's picture

Same here. Almost pulled the trigger on another 100oz last night but decided to wait.

I think this is 1 of 4 more  big dips. I'm expecting a low of around $30/oz honestly (just using charts to come up with that #, seems like silver overshoots the moving average on retracements by about 6-8% then shoots back up). Right around the time the COMEX dries up, or gets very very low on claimable inventory.


TheTmfreak's picture

I don't personally think the price of silver is going to be effected by inventories of comex for awhile. Maybe a year? Just depends on how much cheap silver people are willing to buy once deflation starts (if no QE3).


tekhneek's picture

Eh, I beg to differ. Silver's a very small market and as the available supply starts to dwindle and reduce it becomes that much more likely that large investments for delivery will look a bit more serious than they used to because inventories are so low right now. That's not to say they can't play that game and stock that shit right back up necessarily, just think that it could play a part.

Supply/demand kind of thing.

TheTmfreak's picture

Well if you look at the steady decline of Comex (what they claim 5% of the total market available silver) it has declined in a pretty steady rate that if you were to continue projecting out its something like 3 years till it hits zero. (at the same steady rate). I think it has a good chance of speeding up, but I personally don't think in a few months its all of a sudden going to be a big deal.

Since we already believe that the paper market and physical are starting to seperate, for the price to jump back up to what we claim is the "real value" I think we all can agree that it will take a serious shock for that to happen. I'm sure "they" can cook the books and inventory levels long enough for this process to play out for awhile.

tekhneek's picture

Oh no definitely not a few months. I see this coming to a head sometime in 2014-2015. I'm acquiring as much as I physically can either way. I know at some point it has to collapse.

TheTmfreak's picture

Ok we are definitely in agreement then. Although I say, I think well before 2014 we'll know the answer to this one.



trav7777's picture

Comex is NOT the "available supply" of gfd silver, ok??!?

It's a FUTURES exchange that is INTENDED to be cash-settled, so real producers of real silver can hedge production.

How many times do you idiots have to be told this??  Comex's warehouses are a legacy function and a total anachronism.

Real consumers and real producers of silver negotiate their OWN supply contracts.

tmosley's picture

Hey dipshit, you don't know what you are talking about, so shut the fuck up.

You can "tell" us your false facts as many times as you want, that doesn't make them true, you mass murdering psychopath.

trav7777's picture

2010 mine supply 736Moz, moron.  You don't honestly believe that COMEX is like a fuckin supermarket for silver, do you?

Can you get at least ONE thing right?

tmosley's picture


Christ, you are such a fucking idiot.  You can't even open your mouth without getting shit over everyone.

COMEX moves 5% of world silver supply.  You, on the other hand, claim it moves ZERO.  This is bullshit.  And you know all about bullshit, being full of it, with a full view of it from having your head up your ass.  A fucking one man human centipede.

But ask yourself this, numbnuts:  How many paper contracts move on the COMEX?  What happens when people notice that the amount being traded far, FAR exceeds the amount of silver in the warehouses?  What happens when a bunch of guys see the trend in COMEX inventory, and decide to stand for delivery?  What happens when all that volume flees the exchange after it is broken?

But you don't like questions, do you?  You only deal in "certainty", like "humanity is going to starve for ever and all time cause der ain't nuh mur oil".

tekhneek's picture

The amount of silver available at the comex, isn't the available supply of silver at the comex, got it.

People that call for delivery of physical silver from the comex aren't using it right, they're supposed to settle in cash, got it.

Real consumers and real producers negotiate their own contracts, because everyone at the comex is just kidding about their silver, it's not as real as the other producers, got it.

We should probably ignore other mints and places that have large silver inventories, too. It makes more sense to blindly know what the supply is when you're creating your own imaginary demand.


trav7777's picture

the supply AT comex is not ALL of the supply of silver, idjit

TheTmfreak's picture

I don't think anybody is implying it is.

While I'll agree that it does seem that alot of people assume that it is. However, I find it hard to argue that if they go under it wouldn't send "shockwaves" through the market.

RafterManFMJ's picture

Ordered 60 oz. from gainsville during the last big drop on May 1st. Just got an email today, saying it is shipping.

TheTmfreak's picture

Yeah my girlfriend is just now getting hers and she ordered about the same time.

Although out of nowhere Apmex all of a sudden got a supply in, everything become stocked, and their premium dropped. Should have went with them. But who knew at the time..

tmosley's picture

Yup, Sunshine Mint 1oz rounds are $1 over spot, any quantity, but only until tomorrow.

I am considering buying, but I feel like this is going to carry over into next week at least before they make with the QE3, or QE-lite2.

tmosley's picture

I don't know ANYONE that assumes that.  Only retard boy here thinks that there is NO metal traded.  As in ZERO, ZIP, ZILCH, ZETC.

We all know there are lots of other sources for metal.  In fact, I doubt if more than 1% of readers here has ever taken delivery of a contract, or even traded one.  But plenty have bought physical silver from other sources.

Basically, Trav is the ultimate strawman slayer.

Ergo's picture

Last time I bought physical silver, the price was just bouncing off the low around $27-28.  (paper profits from April are going to my taxes and my wife's new SUV - wow is it nice, and sparkly silver too). 

I'm concerned we'll retest that low again, or perhaps even visit the mid 20's.  With falling inventory, the CRIMEX has a big motive to punish longs.  With QE2 ending, they have the means to punish longs.  And thus the end of June and beginning of July is going to be just nuts. 

I should probably buy some puts, but I'm reluctant to bet against the silver juggernaut.  This is a dangerous market for a non-professional trader, with a day job.  So I'll be on the sidelines.   Happy hunting to all!

theMAXILOPEZpsycho's picture

I've said it before...if the price goes under $30 just try and get your hands on some physical, anywhere...good luck

trav7777's picture

So that $49 by the end of 3 weeks ago is not gonna happen?

tmosley's picture

5 margin hikes will do that, and shifted us into the next phase of the COMEX collapse.

But you wouldn't understand that, as you spend all your time puzzling over the size and shape of the brains of mulattoes and quadroons, and thinking of ways to destroy the human race via mass sterilization.

tekhneek's picture

Man. I took a break from ZH for a few weeks and I come back to the same old trav, same old tmos. It's beautiful.

Love/hate it, the shit's hysterical.

mick_richfield's picture

I would just like to mention that if I were designing trolls to mess this site up, I would always design them in pairs.  Matched pairs.  I think that would be a much more effective way of engaging a large percentage of the site's energy in their discussions, don't you?

And above all, I would be sure to ...

Oh, just a second.  Somebody's at the door --

Fiat2Zero's picture

Man you're good, I never thought of that one. It's like the liberal left and the conservative right. Confine all thought to shouting between two false poles.

Rynak's picture

Stop giving them those "ideas".

High Plains Drifter's picture

who was at the door?  the ups man, wanting you to sign for some very heavy boxes? 

mick_richfield's picture

Three guys from a black helicopter offering me a big cup of Shut the Fuck Up.    :-)

BobPaulson's picture

Ouch. I guess I haven't been following close enough to catch you guys scrapping. Was there a thread on racism somewhere back there I missed?

tmosley's picture

lol, someone saved it.  Thanks for saving me the effort of looking that up again.  I only saved it on my home computer.

I should note that due to complaints about the length, I have retracted the last sentence, and will simply be sure not to let anyone forget what a monster he is without constantly reposting that rather long document.

BobPaulson's picture

Thanks. It's important to not censor posters like that. It's tedious but you need to let them scream their hate at the top of their lungs so the holes in their arguments are self evident.

The first hint that can always tip you off is when they claim to be part of a minority of highly intelligent people. The minute you hear this you can pretty much put your earplugs on. Psychologically it's a pretty predicatable behaviour: variations of this are joked about by Shakespeare in Hamlet "The lady doth protest too much, methinks.". The most obvious things require the least amount of strenous debate. 

trav7777's picture

couple didn't caveat your prediction despite the KNOWN and foreseeable risk of margin hikes, which did what exactly?  They CHASED OUT speculative LONGS who were not real buyers.

You should SUPPORT those margin hikes in between bleating about "manipulation."  The reality is that you LOVE manipulation so long as you can coattail ride and appear to be somehow prescient.  In reality, you're a broken clock dipshit.

Secondly, mass sterilization would *not* destroy the human race.  Reproductive rates for the fertile would rise.  We'd end up with a dramatically more intelligent population most of whom would not fall prey to the type of bullshit that governments use all the time to bamboozle people of low IQ.  You really ought to take a gander at IQ and the Wealth of Nations or visit any of the LEGION of studies that demonstrate higher r between IQ and scholastic and socioeconomic outcome than with any other factor.  In fact, improving average intelligence would be the single most significant thing that could be done in IMPROVING the human condition worldwide out of anything.  Over the past 100 or 150 years of the oil age, this factor ALONE has led to a gigantic improvement in living conditions.

You call yourself a fuckin biologist?  You claim to work on genes and you don't understand the hereditability of IQ?  These two facts cannot coexist.

The reality is that you want humanity to destroy itself so that you can be a slumlord.  This is the truth of the matter.  You are a small man in so many ways, and you hope for a total collapse to somehow make you big merely by cutting everyone else in half.

You opine about the future "starving masses," and your stupid farm all the time.  People like you don't want solutions, you want misery and destruction so you can hopefully profit from it.