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"Sniff Of Fear" Returns - Commodities Crack Under USD Strength

Tyler Durden's picture




 

While the extreme volatility associated with the 8amET hour in Gold and Silver trading is no surprise, the strength of the USD (helped by JPY weakness along with pretty much every other major) is slamming WTI crude, Gold, and Silver lower this morning. The Dollar Index move in the last two days is the largest in 16 months; Gold's 2-day drop is the biggest (ex-the crash) in 10 months.

 

 

 

And Southwest Securities' Mark Grant sums it up best:

On February 12, 2013 I said in Out of the Box:

 

"The engagement is just beginning. It will be one of the most significant events of this year and the various skirmishes may lead us into some sort of planetary Battle Royale. It is not Star Wars but “Currency Wars” and you too can engage in the action."

 

On the same day the yen was 93.47 to the Dollar. This morning it is 101.40 to the Dollar. That is an 8% shift in three months which is a significant move in that period of time. Japan, with a nod from both the Fed and the EU, has actively begun to devalue their currency and to increase inflation before they enter some viral space that they cannot leave without more severe measures. What is happening, however, will cause further dislocations in my opinion and may well cause Europe to react and send the Euro towards 120 to the Dollar. As a matter of fact I think the major central banks are all engaged in a world-wide devaluation of currencies where they all will be worth less and then the relative valuations will all be lower as a result. The small blue and green pieces of paper will be smaller still and goods and services will be more costly.

 

As the "Currency Wars" go from skirmish to battle we are also faced with a great paradox in the gold markets. The price of paper gold is down, this is gold in any other form than physical delivery, while the demand for physical delivery skyrockets. There is a portent here I am afraid and an unsettling one.

 

Recently JP Morgan's inventory of gold at the COMEX fell from 2.4 million ounces to 160,000 ounces and we should all note what is happening. Also, recently, ABN Amro said it could not settle its gold contracts with gold and that settlements would have to be made in cash. It has also been reported that the LBMA is having trouble settling their contracts in actual bullion so that it is becoming apparent that something is amiss in the gold markets. China reported in March that their imports hit an all-time high of 223.5 tons. I would guess that April will overshadow March. While there is no apparent economic crisis the demand for physical gold and the vibrations in this market gives me pause that some game might be afoot.

 

If you consider what is happening in the currency markets and then factor in the demand for the physical delivery of gold there should be some additional note of caution in your evaluation of the markets. Smart money always moves first while dumb money lingers and is baited by those that take advantage of it. A sniff of Fear has returned to the marketplace and Greed may be in the process of giving way. Watch your backs!

Charts:Bloomberg

 

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Fri, 05/10/2013 - 08:19 | 3547709 ekm
ekm's picture

What bullshit is this? USD strength?

 

The powers are calling margin back. 

Fri, 05/10/2013 - 08:23 | 3547727 fonzannoon
fonzannoon's picture

I am trying to work this out ekm. the dollar is strengthening but yet Brent is still over $100. PM's are having no problem getting obliterated by the dollar, but they are just a dirty whore lately anyway.

Are food prices falling? Because Oil is really not. So what exactly is the dollar getting stronger against, other than the yen?

Fri, 05/10/2013 - 08:24 | 3547731 Manthong
Manthong's picture

run to the gas station and demand cheaper gas

run to the coin store and demand cheaper PM stuff

run to the grocery store and demand cheaper cherries

run to the tax office and demand cheaper taxes and fees

OH.. WTF??    That doesn’t work?

Fri, 05/10/2013 - 08:27 | 3547746 GetZeeGold
GetZeeGold's picture

 

 

Is the dollar stronger in value.......or smell?

Fri, 05/10/2013 - 08:31 | 3547761 BoNeSxxx
BoNeSxxx's picture

Break out the dry powder boyz... PMs back on sale today.

Fri, 05/10/2013 - 08:52 | 3547828 mayhem_korner
mayhem_korner's picture

 

 

'zactly.  The MSM are going to tout the continued exodus from paper gold, all the while the Comex inventory is getting blowtorched.

Fri, 05/10/2013 - 08:59 | 3547850 HardAssets
HardAssets's picture

I'm getting greedy. Am waiting to see if it breaks the lows from the big April take down. If so, I'm loading up some more.

Fri, 05/10/2013 - 10:35 | 3548195 auric1234
auric1234's picture

Shitte, I run out of fiat paper after the big plunge.

But if those idiots take it to $800 or so I'm not gonna miss the chance, I'll use credit card / whatever it takes.

 

Fri, 05/10/2013 - 08:34 | 3547747 TwoShortPlanks
TwoShortPlanks's picture

Buy that Gold Chingaz!

'All animals tremble when the Buffalo fight'

I feel a market take down.

Fri, 05/10/2013 - 10:01 | 3548054 Mugatu
Mugatu's picture

Sure it works.  Gold is cheaper everywhere today.  What planet are you buying on?

Fri, 05/10/2013 - 10:43 | 3548221 Jake88
Jake88's picture

What does work is driving to the gas station that has lowered its prices because it can now make a profit selling at the lower price. More people drive to that gas station that is now making greater profit with increased volume. Other gas stations will follow to retain business. WTF? DUH! Taxes are not commodities. 

Fri, 05/10/2013 - 08:32 | 3547742 ekm
ekm's picture

If you divert a lake into the ocean, would the water level increase? Of course no.

 

That's the case with currencies right now. There's so much, that even algoriths can't keep with with logical calculations.

FX matters no more since is incalculable due to hyper leverage.

Fri, 05/10/2013 - 08:58 | 3547845 tip e. canoe
tip e. canoe's picture

ekm, check this out:

http://www.zerohedge.com/news/2013-05-06/apollos-leon-black-smart-money-selling-everything-not-nailed-down#comment-3534392

looks the banks may soon have a fleet of foreclosed tankers on their hands.

all the better to store oil with, my pretty.

Fri, 05/10/2013 - 09:04 | 3547859 Quinvarius
Quinvarius's picture

I sense an environment disaster in the making.  Nothing good can come from Wall St with a fleet of fully loaded, fully insured, oil tankers that they really don't want.

Fri, 05/10/2013 - 09:11 | 3547880 ekm
ekm's picture

margin call.

 

Eveybody's fear. Everybody's leveraged. Only the gov can call the margin as Bush did in 2008.

Fri, 05/10/2013 - 10:00 | 3548047 Aurora Ex Machina
Aurora Ex Machina's picture

“I was in Tibet until my age was 24. I think Tibet, some people call it the roof of the world, It was very clean, a small population, everything simple,” the Nobel Peace laureate said. “Only after I came to India (did) I first hear, ‘This water, you cannot drink.’ I was very surprised. ... In Tibet, passing through waters, by a stream, we always enjoy. No problem. Then I began to learn.”

He said that led to his environmental education and his conviction that people, whether spiritual or not, must act to protect the earth.

His views were shared by other religious leaders on stage.

“We are all water babies,” said Grandmother Agnes Baker Pilgrim of the Confederated Tribes of Siletz.

“We came to this world in water. Laughter may be your cheapest medicine,” she told the crowd, “but your best and first medicine is water. Guard it with your life. Without it, we can’t live.” [source May 10th]

 

tip e. canoe who are you? Serendipity strikes or maybe just synchronicity.

Fri, 05/10/2013 - 15:27 | 3549374 tip e. canoe
tip e. canoe's picture

just another water baby on guard duty like you

;~)

Tue, 05/14/2013 - 01:28 | 3559326 trader1
trader1's picture

if we lose our drinking water sources, then people are going to have to find a way to do as Therese Neumann did...

 

From the years of 1922 until her death in 1962, Therese Neumann apparently consumed no food other than The Holy Eucharist, and claimed to have drunk no water from 1926 until her death.[9]

In July 1927 a medical doctor and four Franciscan nurses kept a watch on her 24 hours a day for a two-week period. They confirmed that she had consumed nothing except for one consecrated sacred Host a day, and had suffered no ill effects, loss of weight, or dehydration.Montague Summers in the "Physical Phenomenon of Mysticism"[10] speaks of her supernatural ability to survive for long periods without food or water. He supported this claim by citing an article about Therese Neumann in the 5 January 1940 "The Universe", which said the peasant woman refused German ration cards saying she had no need of food and drink.

During some of her Friday trances, she would utter phrases identified by witnesses (including priests) as ancient Aramaic. She was also said to have been able to understand HebrewGreek, and Latin.[11]

Fri, 05/10/2013 - 11:11 | 3548364 Long_Xau
Long_Xau's picture

Actually, if you divert a lake into the ocean it does increase the sea level. Sure, most lakes wouldn't cause a significant increase, unless they are a Lake Agassiz or something like that.

This final drainage of Lake Agassiz is associated with an estimated 0.8 to 2.8 m (2.6 to 9.2 ft) rise in global sea levels.

Lake Agassiz' major drainage reorganization events were of such magnitudes that they had significant impact on climate, sea level and possibly early human civilization.

Just saying.

Fri, 05/10/2013 - 08:30 | 3547754 Mr. Hudson
Mr. Hudson's picture

Food prices are climbing as I type this. Food will go up by 40% this year.

Fri, 05/10/2013 - 08:39 | 3547782 ekm
ekm's picture

Incorrect. Food prices will stay the same when rat meat replaces beef.

Fri, 05/10/2013 - 08:52 | 3547829 augustusgloop
augustusgloop's picture

Rat  meat = giffen good. 

Fri, 05/10/2013 - 08:52 | 3547830 kito
kito's picture

what i dont get fonz is that the cost of raw food commodities--and commodities in general---are not near all time highs overall (beef and a few others being an exception). the rogers agri index and rogers commodities index are not anywhere near its pre bubble highs in 2007-2008. copper, oil, ....... nowhere near the peak prices that occurred before things went to shit................yet on the retail side, food prices continue to climb.......so why is it that there have been billions and billions printed since then and yet the commodities havent taken off......again.....we can point to all of this money perhaps being poured only into certain avenues directed by ben...real estate......stocks.....bonds.........its quite interesting.....

btw see my response to you in the other post about gold articles..........

Fri, 05/10/2013 - 08:56 | 3547838 ekm
ekm's picture

Incorrect. They don't have to be near all time highs.

 

Crude oil price is 4 times higher than in 2000.

That's how inflation is looked at, not the propaganda y/y inflation, which means absolutely nothing.

Fri, 05/10/2013 - 09:10 | 3547873 kito
kito's picture

Yes ekm but no......how can you reconcile massive printing after 2008 and not see a concomitant rise in commodity prices......the massive printjob picked up 2009...

Fri, 05/10/2013 - 09:13 | 3547889 ekm
ekm's picture

Because QEs unofficially started in 2000 to reflate the dot.com bubble.

 

Current printing is going against defaults in shadow banking.

The printed money is so immensely large that fear margin calls in commodities and has gone to reserves.

Fri, 05/10/2013 - 09:01 | 3547853 fonzannoon
fonzannoon's picture

Which other post? I did not sleep last night.

Fri, 05/10/2013 - 09:11 | 3547877 kito
kito's picture

The one on gold articles......you are going to elaborate...

Fri, 05/10/2013 - 09:27 | 3547933 fonzannoon
fonzannoon's picture

Everything I see tells me that I am doing the right thing and to just have patience. I don't think the almighty dollar gets out of this without some massive bullet wounds, although I am still unsure about the head shot.

But like I mentioned. If I want to buy gold today, I can. I will actually call and confirm in a few mins. But it's there, and not far above the paper price. Usually when tshtf it's the little cypriot with no access while the rich russians grab it all behind the scene. Not the other way around.

I just find that odd. Really odd.

Fri, 05/10/2013 - 09:37 | 3547964 kito
kito's picture

Describe the bullet wounds and describe the head shot....

Fri, 05/10/2013 - 09:41 | 3547978 fonzannoon
fonzannoon's picture

as of now it was just a single shot that grazed the left ass cheek. did not even make a hole in the pants.

bullet wounds mean massive inflation. head shot is currency collapse. 

but it sure seems like the almighty dollar is going to wreak havoc on everyone along the way. 

Fri, 05/10/2013 - 09:49 | 3548011 Bay of Pigs
Bay of Pigs's picture

Hey fonz, when does Loki come down out of that wormhole over NYC anyway?

That's what Im waiting for as a sign for trouble.

Fri, 05/10/2013 - 09:54 | 3548030 fonzannoon
fonzannoon's picture

Lol

Fri, 05/10/2013 - 10:26 | 3548119 HardAssets
HardAssets's picture

Check out this paper on money and oil. The 'price' of oil has about as much of an anchor to free markets as do the paper PMs, supply and demand has little to do with it  - - - -

http://www.engdahl.oilgeopolitics.net/print/Epochal%20Tectonic%20Shift.pdf

 

Fri, 05/10/2013 - 12:27 | 3548702 Jam Akin
Jam Akin's picture

Good article HA.  Do you know what is the date of the interview?

Fri, 05/10/2013 - 08:26 | 3547738 e-recep
e-recep's picture

primary dealers are selling commodities for some reason.

Fri, 05/10/2013 - 08:28 | 3547751 GetZeeGold
GetZeeGold's picture

 

 

Dumping paper IOUs on someone else....no one wants to be left holding the bag.

Fri, 05/10/2013 - 08:29 | 3547752 ekm
ekm's picture

Margin call from barack obama. Somebody is twisting his arm.

 

If you have followed benghazi, the whistleblower said that that was for the first time that diplomats were running the show, not the military. That is unheard of.

 

There is civil war inside government. White House + Banks + Pharma against Military Complex + Big oil.

Republicans are divided between conservatives and big government ones. They don't have much influence.

Fri, 05/10/2013 - 08:32 | 3547763 fonzannoon
fonzannoon's picture

Maybe this is more about Japan? Maybe as money flies out of there it goes into dollars, bonds and stocks? Driving our currency and the markets higher with it?

Maybe the U.S is just one lucky SOB.

Maybe so much money leaves Japan it actually gives the fed cover to ease up on QE because Japan has insatiable demand for our debt?

It's insanity, but not impossible.

Fri, 05/10/2013 - 08:42 | 3547794 ekm
ekm's picture

None of those. Crude oil has been above $90 for 18 months. This obliterates the economy, as it has.

 

That money you mention is going to crude oil.

 

They are forced to do something

Fri, 05/10/2013 - 08:46 | 3547809 BoNeSxxx
BoNeSxxx's picture

Yes, and oil is traded in what again?  Oh yea, USD.

Cleanest dirty shirt... tallest midget... pick your metaphor.

Fri, 05/10/2013 - 08:49 | 3547816 ekm
ekm's picture

There's so much money printed that it goes everywhere it can go.

It's oil that controls the dollar, not vice versa.

 

Dollar is leveraged on oil, not vice versa.

Fri, 05/10/2013 - 11:49 | 3548525 BoNeSxxx
BoNeSxxx's picture

It's a chicken/egg thing... you can't separate them at present.

Money is flowing into USD not for access to the 'Merican consumer but because it is necessary to purchase oil.  As you stated above.  

If oil were available in euros, rubles, or (God forbid) AU, then the flow would be demonstrably different -- even if the underlying commodity remained the same (oil).  USD is king because you can buy oil with it... simple.

The other side of this coin is the recycling of the USD used to purchase oil... take that pile of OPEC USD and use it for anything other than T Bills/Benny-Bux on the other side and it's 'welcome to the shit show'.

 

Fri, 05/10/2013 - 08:47 | 3547812 fonzannoon
fonzannoon's picture

It's going everywhere. It is going into real estate bigtime. That dude Sam Zell (I can't find the link) just said the rich are buying real estate as an inflation hedge.

Fri, 05/10/2013 - 08:49 | 3547820 ekm
ekm's picture

Correct.

I keep saying, when a lot of it goes to oil, white house gets threating calls from...........

Fri, 05/10/2013 - 09:17 | 3547861 e-recep
e-recep's picture

"It's going everywhere. It is going into real estate bigtime."

most people prefer land/house as it is rentable or leasable. people desperately need extra income as well as asset security. it is also safe from the bail-ins and outright theft or confiscation. the money flow is global and not many countries have property taxes as high as the US does. so property bubbles keep on growing in third world countries and *even* in countries such as germany where such bubbles were unheard of before.

Fri, 05/10/2013 - 10:31 | 3548173 MachoMan
MachoMan's picture

For me anyway, the bigger issue is that some properties can function in both an inflationary and deflationary environment...  for those of us not sure which force will hit today, finding asset classes that manage to hedge both ways (albeit in a shitty fashion in some instances or for some contingencies) makes decisionmaking much easier.

Fri, 05/10/2013 - 12:35 | 3548726 e-recep
e-recep's picture

addendum : i am talking about 100% cash down-payment, of course. not that mortgage crap. empires go, states disappear, banks vanish but PMs and land keep their value in the long run. buying property in US is a different matter since the property tax over there is quite high, but still managable in case of emergency.

Fri, 05/10/2013 - 08:45 | 3547805 new game
new game's picture

i think bill had it right on; cleanest dirty shirt.

just doesn't fit right on me, though.

i like the one with gold letters, plez.

Fri, 05/10/2013 - 09:12 | 3547882 AllWorkedUp
AllWorkedUp's picture

So do either of those groups in the supposed civil war actually support the Constitution?

Fri, 05/10/2013 - 09:23 | 3547916 ekm
ekm's picture

Constitution? What is that?

Fri, 05/10/2013 - 09:45 | 3547992 LawsofPhysics
LawsofPhysics's picture

Yes, the Green Berets, as well as many former and current Delta/Black ops, specialists.  

Fri, 05/10/2013 - 09:44 | 3547988 LawsofPhysics
LawsofPhysics's picture

I can confirm civil war at the Pentagon via a military contractor and former Delta Team member.  Not good folks.  

Fri, 05/10/2013 - 10:34 | 3548180 MachoMan
MachoMan's picture

Call me skeptical, but I can't fathom either side is...  the ideal choice.

Fri, 05/10/2013 - 08:34 | 3547766 SamAdams
SamAdams's picture

Many countries, within last week or two, have reduced interest rates.  Federal Funds Rate has been ranging .1-.25% for some time, so not much room to lower.  This has a strengthening effect on the dollar.  Also, last FOMC dropped hints of possible rate increase (would obliterate economy).  Remember the big gold dump?  Meanwhile DJIA is at all time high and unemployment figures look great... something wicked this way comes.

Fri, 05/10/2013 - 08:28 | 3547749 Mr. Hudson
Mr. Hudson's picture

Don't ever underestimate the power of the Jews and their fiat currencies.

Fri, 05/10/2013 - 08:39 | 3547783 SamAdams
SamAdams's picture

That's strange, ole Jake here doesn't create currency at all.  Let me ask him if he even knows what the FED really is....  Nope, he had no clue the FED was a criminal organization.  I guess that prooves not all Jews are in on it.  Keep that in mind before pouring everyone into the same pot of evil.

Fri, 05/10/2013 - 09:24 | 3547920 kito
kito's picture

Oh Lord, these paranoid joo bashers keep crawling out from the dark corners of zh......

Fri, 05/10/2013 - 09:45 | 3547997 Melin
Melin's picture

yeah...there's fuel for a graph on that score.  It's quite apparent and tedious as hell.

Fri, 05/10/2013 - 08:32 | 3547764 HardAssets
HardAssets's picture

Yes, when they print more paper fiat all over the world they become more 'valuable'

 

Fri, 05/10/2013 - 08:50 | 3547819 rogeliokh
rogeliokh's picture

That Bullshit calls G7 Meeting on the weekends.

That's what they do everytime they meet.

To make everybody happy about their broken Fiat.

Fri, 05/10/2013 - 09:08 | 3547870 spine001
spine001's picture

What bullshit is this...  the author is talking ONLY about relative strength and clarifies that all fiat currencies are going to shit. 

Funny....Argentina's government is being crashed for not wanting to devale the currency the peso. Are they stupid or smart? Answer: stupid since they are only maintaining it by the force of thrats of jail to 5h9se who exchange pesos for any other currency including foreign produce gold and silver. You can guess what is the result? Capital flight and a black market, called 'blue' 100% higher than the official value. They are doing it to extract resources from the agro producers and redistribute them to stay in power. 

Fri, 05/10/2013 - 09:21 | 3547911 USisCorrupt
USisCorrupt's picture

It's called the game of Make Believe that was started August 15th 1971 that is just now Finally coming to a head.

 

Time to just sit back and watch the Comedy Show unfold. 

 

That is IF you are already set for what is next. If not I sure would be loading up on everything and anything you can get your hands on.

 

Just how many Sheeple will you own and control after the shake out?

Fri, 05/10/2013 - 10:26 | 3548156 YHC-FTSE
YHC-FTSE's picture

Can anyone figure this out? The most abused currencies strengthening? The Yen and USD are behaving like non-Newtonian fluids; the harder and faster you try to crush it, the stronger it becomes. 

The reality is dilution beyond the breaking points of any normal currency where debt servicing and creditor interest have lost all meaning. The fantasy is that it is reversible,  working, or even sustainable.  At some point, someone in this giant Solomon Asch experiment is going to point out everybody has made the wrong answer, then the whole illusion collapses. I reckon Kyle Bass is going to be the wealthiest guy on the planet if he can ever collect his winnings on jump risks. 

Fri, 05/10/2013 - 08:18 | 3547714 HedgeAccordingly
HedgeAccordingly's picture

crude down 1.05 in 20 minutes.. realll normal and orderly.. -2%?? http://TFPinsider.com/sign-up 

Fri, 05/10/2013 - 08:21 | 3547716 SheepDog-One
SheepDog-One's picture

OMG anyone else remember the old days when the rule was 'if dollar up, then stocks down' and vice versa?

eh....nevermind....I'm probably just hallucinating, again.

Fri, 05/10/2013 - 08:23 | 3547726 HulkHogan
HulkHogan's picture

My first thought. ...probably hit S&P 1700 today. Up, up, and away.

Fri, 05/10/2013 - 08:59 | 3547848 mayhem_korner
mayhem_korner's picture

 

 

Everyone must be driven into the sheep pen of equities.  Makes the slaughter more efficient that way.

Like child-birth, the fact that the gold contractions are getting more intense and closer together is a sign that full paper-physical decoupling is nearing.

Fri, 05/10/2013 - 09:02 | 3547855 new game
new game's picture

like a healthy shit?

Fri, 05/10/2013 - 09:07 | 3547863 Quinvarius
Quinvarius's picture

If shitting out all of your internal organs is healthy, yes.

Fri, 05/10/2013 - 10:54 | 3548266 RaceToTheBottom
RaceToTheBottom's picture

Wow, I just took a Bernank

Fri, 05/10/2013 - 08:19 | 3547718 Gringo Viejo
Gringo Viejo's picture

Illusion Rules! (for the moment)

Fri, 05/10/2013 - 08:26 | 3547720 SheepDog-One
SheepDog-One's picture

BOW DOWN before King Doellar, damn shit covered peasants! 

Nevermind 105% debt, or ultra-insane debasement of said doellar over the last years, it be STRONG!

Fri, 05/10/2013 - 08:33 | 3547769 fonzannoon
fonzannoon's picture

SD1 we are going to go insane because whatever Japan can do we can do better. They are over 200% debt and their ten year, after being halted, is .65%

Think about that

Fri, 05/10/2013 - 08:49 | 3547818 new game
new game's picture

refi at < 2percent. nope, i will stay debt free- no thanks. there is room to roam lower! much lower, actually.

this reflation i faaaaaaaaaaar from over...

Fri, 05/10/2013 - 09:27 | 3547931 kito
kito's picture

America invents it....Japan improves upon it......

Fri, 05/10/2013 - 08:22 | 3547722 Devotional
Devotional's picture

Saturday morning = GOLD buying bitchez!

USD strength? Really? Insane in the membrane!!

https://www.youtube.com/watch?v=RijB8wnJCN0

Fri, 05/10/2013 - 08:22 | 3547723 jubber
jubber's picture

Gold in Yen nearly hit a 40 y high earlier

Fri, 05/10/2013 - 08:36 | 3547779 TeamDepends
TeamDepends's picture

And there you have it.  The Yen is getting pummelled now but soon it will be the Dollar and Euro's turn.  In a race to the bottom is there a winner?

Fri, 05/10/2013 - 08:51 | 3547824 new game
new game's picture

like a horse race to the slaughter house.

Fri, 05/10/2013 - 08:59 | 3547849 blindman
blindman's picture

http://grooveshark.com/s/Horsebreaker+Star/4KCaiU?src=5
.
horsebreaker star, grant mclennan

Fri, 05/10/2013 - 08:25 | 3547728 W T F II
W T F II's picture

Gold beggining "Take-Down II" a WWE 'cage match'...!! Call your cable provider and order today..!!

Going MUCH lower...then pop...then 3-digits...then NEW RESERVE CURRENCY...partially backed by gold...figure it out...!! "The Collaborators" HAVE..!!

Fri, 05/10/2013 - 09:29 | 3547939 Bay of Pigs
Bay of Pigs's picture

They cant mine gold at triple digits for a profit. Average cost is now around $1200 an ounce.

Why would companies choose to lose money mining anything, and especially gold?

Fri, 05/10/2013 - 10:04 | 3548065 W T F II
W T F II's picture

So what..? They won't mine it then. Miners are signallng this with 0 'recovery' in their shares, which ALWAYS lead BIG moves up..!!

Don't get me wrong, gold WILL go up...BUT, it's going MUCH lower first because "The Collaborators" NEED it to go MUCH lower. Here's why:

http://www.coar-repositories.org/community/events/annual-meeting-2013/

Fri, 05/10/2013 - 10:11 | 3548104 Bay of Pigs
Bay of Pigs's picture

Yes, because there will be massive shortages. Goldbugs have always maintained this as a real possibility for the end game.

Fri, 05/10/2013 - 10:08 | 3548091 Race Car Driver
Race Car Driver's picture

> Why would companies choose to lose money mining anything, and especially gold?

 

To borrow from the pop-culture slop jar:

"You see in this world there's two kinds of people, my friend. Those with loaded guns, and those who dig. You dig." - Blondie

 

People will do any amount of insane things when a loaded gun is pointed at their head - or the heads of thier wives, kids ... etc.

Fri, 05/10/2013 - 13:18 | 3548826 DosZap
DosZap's picture

Going MUCH lower...then pop...then 3-digits...then NEW RESERVE CURRENCY...partially backed by gold...figure it out...!! "The Collaborators" HAVE..!!

 

Which will be another LIE of astronomical proportions.

There will ZERO gold left if the prices keep dropping.That will be the end of the paper v.s. phyzz pricing, and the US Goobers do not have anywhere near enough gold reserves to even partially back the dollar, not with 16T++++ coming.

No way.This would bring in Freegold.

Fri, 05/10/2013 - 08:24 | 3547732 horot
horot's picture

Holy Crap! Another discount! Thank you Comex! Back up the truck boys!

Fri, 05/10/2013 - 08:34 | 3547772 HardAssets
HardAssets's picture

Japanese housewives will likely be driving lots of those trucks

Fri, 05/10/2013 - 08:25 | 3547734 Gringo Viejo
Gringo Viejo's picture

Friday Slam Dance! Gold down 40 plus. Silver 1 plus.

I honestly don't give a shit anymore.

The West is runnin' outta wiggle room.

Just a matter of time.

Fri, 05/10/2013 - 08:56 | 3547841 new game
new game's picture

almost predictable

when first slammed, the wealthy realized, we got problemo, the plebs are buying hand over fist.

we best get those bars in a safer place; ie supply running low with many to many claims (air gold).

now they can take-er-down again and buy er all, take delivery and let er roll.

banksters contol the markets til they can benifit.

party time sooooon...

 

Fri, 05/10/2013 - 08:26 | 3547736 W T F II
W T F II's picture

BUY STAWKS...!! any day is a good day for that...

Fri, 05/10/2013 - 08:26 | 3547737 Mr. Hudson
Mr. Hudson's picture

It's called "deflation" because banks won't lend money. Money is going to get real, real tight. Yet, food prices keep rising.

Fri, 05/10/2013 - 09:32 | 3547948 Bay of Pigs
Bay of Pigs's picture

Sorry, but that isn't deflation, although most deflationists love to talk about "prices" not mattering.

Fri, 05/10/2013 - 08:27 | 3547739 kill switch
kill switch's picture

Quadrillions in promises to pay nothing have strengthened,, I see..

Fri, 05/10/2013 - 08:27 | 3547740 SheepDog-One
SheepDog-One's picture

3D printers, print up some REALITY!

Fri, 05/10/2013 - 08:27 | 3547741 LaurentDeLyon
LaurentDeLyon's picture

Always the same story, paper GOLD and SILVER go DOWN, while physical go UP, and do go since night of times

Fri, 05/10/2013 - 08:33 | 3547767 Mercury
Mercury's picture

Has the spread between official spot and what you actually have to pay for coin been widening?

Has the spread between GLD and what what you actually have to pay for coin been widening?

Fri, 05/10/2013 - 16:33 | 3548555 LaurentDeLyon
LaurentDeLyon's picture

Not a question of spread or premium

The connection between physical and paper has never occured, people have just been discouraged to have gold, encouraged to have equivalents (bonds equities fiat ..), and who among ordinary people really knows how financial engineering works, even roughly ? 99% of mothers of fathers coming back home, will they look at the financial charts of the entire world ?

and even if they look (assuming that all the datas are available, you have access, and are readable), how much can really understand financial engineering that have been set up for years and years by hundreds of mathematical engineers ?

even your local banker knows 1% about the entire possibility to fraud

so easy !

having a 1 oz gold coin in hands, or 3 bills of $500 , and you feel the difference instantaneously

not a question of dead or eternal money, but to take precautions

Fri, 05/10/2013 - 09:11 | 3547871 edifice
edifice's picture

What's bad about that, though, is dealers pay you the paper price, when you sell to them.

Fri, 05/10/2013 - 08:27 | 3547744 W T F II
W T F II's picture

In all seriousness...gold could close down -$100++...

Fri, 05/10/2013 - 08:28 | 3547748 solgundy
solgundy's picture

is this another  rout of the gold shorts on the comex????????????

Fri, 05/10/2013 - 08:33 | 3547768 W T F II
W T F II's picture

Yes, "Round II"

Fri, 05/10/2013 - 08:30 | 3547755 Canadian Dirtlump
Canadian Dirtlump's picture

Some game might be afoot with paper gold being ragdolled and roasted daily on msnbc while physical gets hoovered up like cocaine at a city of london customer appreciation day?

I've heard worse guesses.. Lmao

Fri, 05/10/2013 - 08:35 | 3547775 W T F II
W T F II's picture

I believe that is PRECISELY what is happening. Certain central banks MUST buy in order to rebalance for what MUST come.

Fri, 05/10/2013 - 08:30 | 3547758 scatterbrains
scatterbrains's picture

Ring of Fire Bitchezz!!

Fri, 05/10/2013 - 08:36 | 3547777 W T F II
W T F II's picture

That Ring is serious s#!t...Pacific earthquake next..??

Fri, 05/10/2013 - 08:30 | 3547759 Yellowhoard
Yellowhoard's picture

Today's assignment.

Provide an example of what the dollar is to you.

For example: The dollar is the classiest $10 hooker in the alley.

Fri, 05/10/2013 - 08:38 | 3547780 blindman
blindman's picture

the dollar is the leper with a remaining arm,
give him the bucket of water to carry, and pray.
...
http://grooveshark.com/s/Green+Lights/3P0iSD?src=5
green lights !
.
is Friday sale day for p.m.s in America?
.
http://grooveshark.com/s/Open+Your+Eyes/1LGHww?src=5

Fri, 05/10/2013 - 08:42 | 3547797 W T F II
W T F II's picture

That means Monday could get ugly...Buy GLL weekly OTMs...!!

Fri, 05/10/2013 - 08:40 | 3547790 W T F II
W T F II's picture

At this rate, she'll soon cost $7-$8....!!

Fri, 05/10/2013 - 08:32 | 3547765 W T F II
W T F II's picture

Is there a possibility that a major (or multiple) Japanese financial institution is down for the count and this is part of the orchestrated fix..??

It does not seem that the notion that Japan's actions are unilateral is plausible.

Fri, 05/10/2013 - 08:50 | 3547801 SlowMoney
SlowMoney's picture

JGBS = 1X short the JGB ETF. Kyle Bass - would approve.

UUP = Dollar up ETF

Anyone out there paying 30% over spot for a gold coin. Really?  Instead, if you think it is going to get that bad use your money to buy supplies for a mad max world.

Watch old Ben today, if he does not pull the plug on QE .... how can he do it during the budget crisis, that will drag on all summer.

 

 

Fri, 05/10/2013 - 08:35 | 3547776 orangedrinkandchips
orangedrinkandchips's picture

Sniff of fear?? HELL NO.

 

SNIFFIN the TEARS!!

 

drivers seat!!! yeah.....drivers seat!

Fri, 05/10/2013 - 08:36 | 3547778 AllWorkedUp
AllWorkedUp's picture

This shit just never fucking ends.

Fri, 05/10/2013 - 08:40 | 3547785 fonzannoon
fonzannoon's picture

and we are just getting started.

Fri, 05/10/2013 - 09:06 | 3547804 realtick
realtick's picture

speaking of shit, every time the price of gold goes down $1 Shithead Ferguson's TF Metals sees its readership rise by 100 proving the thesis that people want to be conned

Full Metal Futures - Mark My Words, TF Metals Will Disappear This Year

Fri, 05/10/2013 - 09:36 | 3547961 Bay of Pigs
Bay of Pigs's picture

Maybe you could do us a favor and disappear too? I don't remember you ever telling us anything here other than pointing out Turds bad calls.

Fri, 05/10/2013 - 09:40 | 3547972 realtick
realtick's picture

someone around here has to be unbiased about the metals - even tyler was drinking the turd-aid

http://chartistfriendfrompittsburgh.blogspot.com/2012/11/cfpgh-vs-zero-hedge-gold-feds-balance.html

Fri, 05/10/2013 - 09:54 | 3548031 Bay of Pigs
Bay of Pigs's picture

Tyler hasnt show a Turd article in years (featured one as I recall).

WTF is wrong with you? Turds blog is irrelevant in the big picture, so why single him out for your ad hom attacks? Did you get banned over there like me?

Fri, 05/10/2013 - 10:03 | 3548059 realtick
realtick's picture

two reasons for singling him out - 1. he insulted me here in the comments section (see my post Mark My Words) and 2. he is a shill who is leading his thousands of hapless followers to financial slaughter

i will not rest until TF Metals disappears - don't take it personally

Fri, 05/10/2013 - 10:17 | 3548121 Bay of Pigs
Bay of Pigs's picture

Take it personal? LOL, I told you I was banned from his site. 

Turd has lots of things worthwhile to say, but I can't defend his TA work which hasnt been any good at all. Having Mods ruin and destroy his site is another issue altogether.

Fri, 05/10/2013 - 10:22 | 3548141 realtick
realtick's picture

no he does not, and why the hell are you giving him any praise after being banned from his site?

he has only one thing to say - "keep stacking" an asset that continues to lose value

and do no refer to his pathetic charts as TA - drawing a few trendlines on a chart is not TA

 

Fri, 05/10/2013 - 10:31 | 3548172 Bay of Pigs
Bay of Pigs's picture

To keep stacking is a good policy (cost averaging accumulation). You paying attention to anything going on in the physical market or just talking out of your ass?

Fri, 05/10/2013 - 10:40 | 3548213 realtick
realtick's picture

what is the current price in the physical market and what was it a year ago?

Fri, 05/10/2013 - 10:55 | 3548268 Bay of Pigs
Bay of Pigs's picture

A year ago? LOL....now you're just trolling.

Fri, 05/10/2013 - 10:59 | 3548300 fonzannoon
fonzannoon's picture

What does the spot price of gold from a year ago to today have to do with it?

Turd is a turd. Buy PM's for your reasons, not his. Or don't.

 

Fri, 05/10/2013 - 11:03 | 3548321 realtick
realtick's picture

if you want to "dollar cost average" an asset that has a price in a clear multi-year downtrend, i'm not gonna stop you, but i will suggest you might want to have your head examined

Fri, 05/10/2013 - 11:08 | 3548346 Bay of Pigs
Bay of Pigs's picture

Multi-year downtrend? Haha..its been UP 12 years in a row.

Now GTFO of here troll. And Happy Aloha Friday...

Fri, 05/10/2013 - 11:34 | 3548467 realtick
realtick's picture

WTF are you talking about - you must be blind

before you get your head examined, you should get your vision checked ASAP

if you can produce a chart showing me that the gold uptrend is intact i'd like to see it

http://i1281.photobucket.com/albums/a515/ChartistFriend/130510-C_zps23b5...

Fri, 05/10/2013 - 11:39 | 3548488 fonzannoon
fonzannoon's picture

can you overlay that chart against the JPM vault inventory?

Fri, 05/10/2013 - 11:50 | 3548527 realtick
realtick's picture

WTF does that even mean?

this whole physical/vault talking point is meaningless except to give idiots hope for higher prices some time in the future

yes, gold is money, but whether you're talking physical or paper the fact remains that THE GOLD PRICE IS IN A DOWNTREND WITH NO SIGNS OF BOTTOMING

mark my words, TF Metals will disappear and Shithead Ferguson is a shill

Fri, 05/10/2013 - 12:13 | 3548627 fonzannoon
fonzannoon's picture

So were stocks in 2008

Throw your charts out the window. But feel free to keep posting the pics of those chicks.

Fri, 05/10/2013 - 12:53 | 3548772 realtick
realtick's picture

throw your own charts out the window - my charts prevent me from making bad investment decisions so i'm keeping them

Fri, 05/10/2013 - 12:25 | 3548693 realtick
realtick's picture

now who's the troll, fool?

this is so pathetic i have to post it for laughs:

http://www.tfmetalsreport.com/blog/4704/nostradumbass

"I know what you're thinking. How can I guy who's is dead wrong all the time have his own website? How can I be so freaking wrong all of the time? "

Fri, 05/10/2013 - 12:26 | 3548701 fonzannoon
fonzannoon's picture

You sure like to give Turd a lot of exposure on here.

Fri, 05/10/2013 - 12:33 | 3548717 realtick
Fri, 05/10/2013 - 12:36 | 3548728 fonzannoon
fonzannoon's picture

whatever dude. It is what it is. Let's see how things shake out.

Fri, 05/10/2013 - 12:51 | 3548767 realtick
realtick's picture

no, not whatever - if you're ok with witnessing someone actively encourage people to put money into an asset that is losing value, that's your business

i am NOT ok with it

Fri, 05/10/2013 - 14:34 | 3549195 Bay of Pigs
Bay of Pigs's picture

Maybe if you would actually examine the facts on gold people might take you seriously. Here's a start.

http://www.gata.org/node/12561

 

Fri, 05/10/2013 - 15:03 | 3549295 realtick
realtick's picture

if you can produce a chart showing me that the gold uptrend is intact i'd like to see it

Fri, 05/10/2013 - 11:17 | 3548382 fonzannoon
fonzannoon's picture

Realtick I feel bad for you, and me. We both operate in this market. I am already trying to figure out what I am going to do when there no longer is one.  These asset bubbles are going to explode and take everything wit them. It;s just a matter of when now.

Fri, 05/10/2013 - 12:56 | 3548779 realtick
realtick's picture

there's no reason for you to feel bad for me, bro, and if you believe "these asset bubbles are going to explode" like i do then get out or get short

Fri, 05/10/2013 - 11:32 | 3548453 buyingsterling
buyingsterling's picture

There's only one counter-argument to stacking: The PTB will keep slamming the metals, regardless of the fundamentals.

You can buy that argument, and skip the metals altogether, or wait to get in until..... when, exactly? Will physical be available to you at that magical time? I say stack - Even if you bought gold at the high and held through today, you're not that far behind vs food inflation, and you have an asset which will eventually save your bacon. The PTB can dick with the price, but they can't obliterate 5000 years of history: gold is money and their crap has a natural value of zero, no value without coercion and manipulation.

Fri, 05/10/2013 - 10:59 | 3548302 debtor of last ...
debtor of last resort's picture

What was the comex inventory one year ago? Price discovery hasn't started yet.

Fri, 05/10/2013 - 12:01 | 3548572 Debt Slave
Debt Slave's picture

More than double the price of five years ago, of this week. 100+% return over 5 years. Very nice.

Fri, 05/10/2013 - 12:55 | 3548774 Bay of Pigs
Bay of Pigs's picture

Don't confuse the troll with facts. He wont tell you gold went from over $1000 to 692 in 2008, and then to $1900  just a few years later.

The Golden Bull is hardly dead. The mania phase hasn't even begun.

Fri, 05/10/2013 - 08:40 | 3547788 orangegeek
orangegeek's picture

US Dollar should continue to climb as Euro falls.

 

http://bullandbearmash.com/chart/spot-dollar-daily-falls-05-euro-gaps-cl...

 

If the Euro, GBP and Yen climb (unlikely) the US Dollar should fall - here's why.

 

http://bullandbearmash.com/about/usd/

Do NOT follow this link or you will be banned from the site!