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Guest Post: Who’s Right About Commodities: Bears Or Bulls?

Tyler Durden's picture


Submitted by Marin Katusa of Casey Research

Who’s Right About Commodities: Bears or Bulls?

In the last few weeks a slow slide in commodity prices – metals in particular – has turned into a full-scale nosedive.

All through 2011 copper had remained essentially between US$4 and $4.50 a pound, but on September 11 it dropped below that range and didn’t really stop falling until October 4, when it bottomed at $3.05. Aluminum gained ground in the first half of the year to reach $1.24 per lb. in April, but after losing 10% in the last 30 days it is back below that, at $0.96. The spot price of nickel lost 19% in the last month; zinc prices fell 17%. Precious metals were not spared either: The price of silver shed a whopping 33% in 30 days, while gold is currently down 15% compared to its price on September 6.

Grouping the commodities together really shows how rough the last few months have been. The Standard & Poor’s GSCI – an index of raw materials that tracks 24 commodity prices – is down 24% since April, when it hit a 32-month high. On October 4 it touched 572.92, its lowest level since November 26, 2010. Falling metal prices were the main culprit: Silver closed at its lowest price since February, and copper saw its cheapest settlement in 14 months.

The slide in commodity prices ends a period of discord between a global economic story of frailty and impending doom and commodity prices that were holding their ground at or near record highs. The disparity stemmed in large part from opposite outlooks for the world’s developed and emerging economies – Europe and the US are struggling to maintain any kind of economic momentum but emerging economies have continued to grow, led by China. Investment actions (encouraged by the printed money stemming from QE2) then heightened that difference, as investors turned to commodity prices to profit from emerging-market growth.

The investments that fed the disparity came from a very broad base. It used to be that investing in commodities was only for institutional players and real market participants, but over the last decade a slew of retail investors have jumped on board the “good-times commodities train.” Since the start of the current commodities supercycle in the early 2000s, investing in raw materials shifted from a risky, hard-to-access game to a commonplace portion of most portfolios.

Before, most ordinary investors were only exposed to commodities by owning shares in oil or mining companies. Now, a broad range of commodity-based exchange-traded funds (ETFs) spanning agriculture, energy, and metals have given investors access to direct exposure to raw-material price swings… and the sector has provided such consistent rewards that many financial advisors and pension managers now believe that all ordinary investors should have some slice of their long-term money parked in commodities. The assets of ETFs and similar investment products that hold baskets of commodity futures have increased sixfold since 2007, reaching a value of $37 billion this summer.

In recent months, however, the tide has turned in a major way. Investors and advisors are beating a hasty retreat from all risky holdings, and for many that includes commodities. Current global economic uncertainty is pushing investors toward very low-risk options, starting with US bonds and ending with dividend-paying utilities. Commodities, which were previously better-insulated from retail investor panics, are feeling the pain.

Of course, retail investors abandoning ship only account for a small part of the pressure on commodity prices. Commodity prices are complex beasts, with annual variations relating to contract talks, stocking seasons, de-stocking seasons, currency ratios, and speculative action.

Take copper as an example. China accounts for something like 40% of global copper demand, and its unceasing demand growth helped copper prices rebound quickly after the 2008 recession. Whether this demand growth will continue is a topic of much debate.

The bears point to tightening monetary conditions and a global slowdown to argue that China’s economy will grow just 5% this year – a sluggish rate, compared to its double-digit expansions over most years in the last decade. They also point to reports of very large speculative stockpiles in China, accumulated in part as a way to skirt bank lending restrictions imposed by the Chinese government. The copper bulls, on the other hand, argue that demand is holding up well. Volumes at most companies are still up year on year; even in Europe, Germany is still showing reasonable growth; and in the United States the copper rod market is expected to register 3% growth – that would be down from 6% last year, but it’s still growth. As for China, the bulls expect 8% economic growth and say it is merely a matter of time before the Chinese return to the market and restock heavily. Minmetals stoked that fire somewhat last week with its C$1.3-billion bid for Anvil Mining (T.AVM), a copper company.

In addition to all of those factors and arguments, the scrap market plays a role. The “urban mine” of recycled metals accounts for roughly one-third of global supply, but as prices fall scrap flows slow down significantly. That tightens the market even if demand also weakens. Many scrap dealers are holding on to their copper until prices recover; they did the same in 2008-‘09, helping to push prices up.

So commodity prices are complicated and difficult to forecast at the best of times, which is not exactly how we would describe things at present. Yes, that’s our lead-in to saying that predicting where prices are going from here is a challenge, to say the least.

Again, let’s use copper as an example. Copper price forecasts now range from below US$6,000 per tonne (from the head of the copper department at Minmetals) all the way through to $10,075 (from Barclays Capital). Goldman Sachs, Credit Suisse, and Standard Bank are closely aligned in their outlooks, all expecting copper to sit just under $9,000 per tonne through 2012.

Certainly, the fundamentals of the copper market remain very tight. Based on current demand predictions, the International Copper Study Group expects to see a deficit of 250,000 tonnes in the global refined copper market in 2012, before moving closer to balance in 2013. To put 250,000 tonnes into context, global demand for refined copper products in 2010 averaged 19.4 million tonnes. And it is important to remember that current and forecast copper prices all sit comfortably above the break-even point for producers. The marginal cost to produce a tonne of copper averages between $4,000-US$5,000, creating a solid floor for spot prices.

But as one Credit Agricole analyst pointed out, “the fundamentals just won’t matter in a financial panic.” We’ve already seen some of that irrational movement: Copper’s lowest point this week, of $6,635 per tonne, represented a 33% decrease over just two months. The metal boasted a spot price just below $10,000 at the start of August.

Really, commodity prices from here will depend on whether Greece defaults in an orderly, supported manner or goes down in an uncontrolled inferno, torching Europe’s books for years. Both are still options. A planned default has its downsides – as German Chancellor Angela Merkel puts it, “If we tell a country ‘We cancel half of your debt,’ that’s a great deal. Then the next guy will immediately show up and say he wants the same.” Nevertheless, the only way Greece can survive its suffocating debt levels is through some kind of default, and if the European Union can come up with a default management plan, then the other countries of the Union could be protected from the worst of the fallout.

An unplanned, “oh-my-God-how-did-this-happen?!” style Greek default, on the other hand, could decimate numerous European banks and in doing so create exactly the same maelstrom that gave birth to the 2008 recession in America.

Despite some bearish indicators and a lot of nervous investors, a recession is not necessarily in our future. Goldman Sachs, the permabull of commodity price forecasters, remained committed to its prediction that commodities will continue to outperform. While reducing its oil and copper forecasts for 2012, the bank reiterated an “overweight” recommendation on commodities over the next 12 months, explaining that the turmoil in Europe will take away “some of the upside” to commodity prices, but will not reverse prospects.

“With recent GDP revisions by our economists falling hardest on Europe but with emerging market growth expectations still relatively solid, we continue to believe that demand growth in 2012 will be sufficient to tighten major commodity markets,” lead analyst Jeffrey Currie wrote. The group sees potential for commodity prices to climb as much as 20% over the next year. Goldman did reduce its forecasts for oil and gas: The bank now expects Brent crude to average US$120 per barrel over 2012, down from an earlier prediction of $130, and expects copper to trade near $9,500 per ton, down from $11,000.

Barclays Capital added its voice to the chorus that is trying to remind frantic investors that a recession is not guaranteed, agreeing with Goldman that emerging markets could still save the world from a significant recession while also limiting further commodity price slides.

Many people are still hopeful that that chorus is singing the truth: These days any and every sign that we can avoid a recession sparks a bull market day. On October 5, the day after copper, oil, and silver all hit multimonth lows, commodity prices across the board gained ground after Federal Reserve Chairman Ben Bernanke said the central bank would take further measures to prevent a recession if necessary. Bernanke said the Fed could ease monetary conditions further, following the launch of Operation Twist in September.

We think it is likely that the commodities which fell in September and early October were following the example set by oil in early August. Crude prices were too high, having failed to fall in response to increased stability in Libya and weakening demand. So they corrected: Brent crude fell about 8%, while WTI crude lost roughly 14% in late July and early August. Since then crude prices have been fairly stable; they dropped somewhat while other commodities were flailing in September, but not dramatically.

So perhaps the metals realized they were overvalued, like oil had been given the global economic climate, and corrected. If they are following oil’s footsteps, things should remain relatively stable from here. But, as mentioned, that would require an orderly Greek default. And given that the Greek debt “crisis” has now been going on for two whole years and Europe’s leaders have continued to respond with solutions that are too little, too late, a significantly proactive step such as planning for Greece’s default may be too much to ask. And in the case of a frantic and disorganized default, commodity prices could easily drop further.


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Tue, 10/18/2011 - 19:21 | 1787226 nope-1004
nope-1004's picture

Gotta print, so must beat down commod's to show no inflation.

Gotta maintain the USD reserve, so must beat down PM wealth preservers (I think the CME calls those "evil speculators")

I really don't care.  I'm buying all the time.  Fuck JPM.  Screw Benocide.  The hell with Geithner.  Obama is a flake, as all the bankster controlled ones before him.  My wealth is in PM's near to me, not in the hands of the criminal cartel.



Tue, 10/18/2011 - 19:26 | 1787260 I think I need ...
I think I need to buy a gun's picture

social security announced cost of living adjustment to return in 2012.....after 3 year absence....

Guess what that means inflation is coming back year and no even that cost of living adj won't cut it....

My tv is starting to smell like shit from all the bullshit coming out of the CNBC talking heads,,,,they are literally making shit up as they go, there is sooooo much shit starting to fly i'm getting ready to duck during Kudlow right now.

Tue, 10/18/2011 - 19:56 | 1787316 Stack Trace
Stack Trace's picture

Kudlow is a sack of hack stitched together with BULL-shit.

Tue, 10/18/2011 - 20:35 | 1787379 Pinto Currency
Pinto Currency's picture



"Investors and advisors are beating a hasty retreat from all risky holdings, and for many that includes commodities."


If we had stable currencies that would be true, however our currencies have been destabilized for a  protracted period and are now being grossly undermined by QE and good old fashioned inflationary monetary policies.



Latest Fed data shows M1 is now up 22.5% year-over-year


When the currency crisis occur - and given central bank policy and the collapsing worldwide debt bubble, it will - there will be a run to real assets.

Tue, 10/18/2011 - 20:50 | 1787418 Harlequin001
Harlequin001's picture

When you listen to this you could be forgiven for thinking that the amount of real gold traded at the margin is infinately more than the investors who hold it for the longer term, hence the volatility. Which is bullshit.

It amazes me how all these traders seem to sell or buy at exactlky the same time and by that I mean to the minute, which is uncanny...

Or is it one player with massive influence over prices through derivatives?

Go figure...

Tue, 10/18/2011 - 23:01 | 1787691 rocker
rocker's picture

Very Good Harlequin001. I really like that thought.
It is as true with the markets too.
Goldman must share that software that can manipulate markets with "special club members". And at a previous determined time they push F4,($).

Wed, 10/19/2011 - 03:14 | 1788045 Silver Bully
Silver Bully's picture

I need to get Upper Crust, Super Special Club membership then. I thought I had to hit control, alt, delete on my vacuum tube algo thingy. Should I call tech support?

Tue, 10/18/2011 - 20:40 | 1787384 clymer
clymer's picture

Beats morning shit head and his hot (albeit strategically "plugged-in") co-host.


Z-Big's Translation: "We need to make certain that the architects of global planning are provided deflection from blame, by being painted as philanthropists who give so much. This way we can remain the .0001% and throw the remaining 1% to the pitchforks. (he even says *cough* "they are making millions of dollars" ..not billions, let alone trillions)

Get ready for the next stage of global consolidation of control, courtesy of the ignorant public's easy steer toward "millionaires".

Jeffrey Sachs should stick with NWO-shill, Charlie Rose. I like him better when he goes up against Hugh Henry:


Tue, 10/18/2011 - 21:18 | 1787450 flacon
flacon's picture

Unfortunately MSNBC spelled "Unfortunate" incorrectly. "UNFORTUANTE". Quality American is US. @8:25 in the video.


Other than that, I like Brazinsky's use of "DESPOTISM", it's one of his favourite words - and I have watched almost all of his TV appearances since 2008. He enjoys DESPOTISM. 


And for once I actually agree with Bra-zin-ski in that America is pretty much dumbed down and reduced to slogans, "simplistic slogans". 


I think Brazinsky is thinking as a central planner, in REACTION mode. We are just too damn stupid of a species to figure it out on our own without the loving hands of god-planning which Brazinsky will gladly give as long as he is able to play god. 

Tue, 10/18/2011 - 21:21 | 1787461 mickeyman
mickeyman's picture

He learned that playing Civ 2

Tue, 10/18/2011 - 21:28 | 1787469 flacon
flacon's picture

Civ 2? What is that?


Central planners are disgusted with the results that central planning has produced, but they blame that on the free markets and lack of CONTROL. The solution, of course, is MORE CONTROL and now Brazinsky is talking about PUBLIC SHAMING of those who profited from the policies of central planning. He is advocating an out right class WARFARE. Posting LISTS of the "rich". I wonder if he will post lists of people who benefited from TRILLIONS of dollars of bailout, POMO etc. and specifically target the policies of the central planners as the ultimate culprits of this wealth disparity and detail HOW they got rich by putting their buckets in the way of the "stimulus" to catch as much as they could.... 


(I was dreaming, the goal is to produce a scapegoat, not to solve any problems)

Tue, 10/18/2011 - 21:53 | 1787531 goat
goat's picture

You called?

Wed, 10/19/2011 - 01:16 | 1787970 Hephasteus
Hephasteus's picture

Fractionally reserved cannon fodder. Bankers they they are hooked on the scam. They do it over and over and over till you puke all over them and disolve them like a fucking fly. Don't make me throw up bankers.

Now quick sign some athletes up for some huge contracts and make a big noise about it. Right you fuckers.

Tue, 10/18/2011 - 21:36 | 1787489 Executioner
Executioner's picture


 Do you mean, Zbigniew Brzezinski ?

Tue, 10/18/2011 - 21:51 | 1787524 flacon
flacon's picture

Zbig, Bra, whatever. 

Tue, 10/18/2011 - 22:05 | 1787562 Executioner
Executioner's picture

You're right its like a soup letter :)

Tue, 10/18/2011 - 22:26 | 1787606 flacon
flacon's picture

I like the name Executioner. 

Tue, 10/18/2011 - 20:42 | 1787398 adr
adr's picture

instead of talking heads, replace with defecating asses. Now all the words spewed make sense.

Wed, 10/19/2011 - 01:34 | 1787989 fonestar
fonestar's picture

Word to your mother of the otha brotha!  Wealth is measured in oz.  Chumps are measured by their stacks of FRN.

Tue, 10/18/2011 - 19:15 | 1787227 slewie the pi-rat
slewie the pi-rat's picture

good luck avoiding that recession!

Tue, 10/18/2011 - 19:15 | 1787228 achmachat
achmachat's picture

you should really stop putting money (gold and silver) in the same category as commodities.

Tue, 10/18/2011 - 19:33 | 1787269 Michael Victory
Tue, 10/18/2011 - 20:40 | 1787392 Hephasteus
Hephasteus's picture

Copper lead and sulfates are  a commodity side affect of gold and silver mining. As banks try to make thier paper belieavalbe they cause a huge glut in those commodity markets. Silver they just let get rediculously short supplied and then glut rediculously short supplied then glut.  Gold is pure money. Silver is 10 percent commodity 90 percent money.

Tue, 10/18/2011 - 19:16 | 1787229 TheSilverJournal
TheSilverJournal's picture

Silver's going to min. $1,000 / oz. in real my vote is with the bulls.

Tue, 10/18/2011 - 19:22 | 1787245 Hearst
Hearst's picture

History shows that Silver has made many people fortunes and supported many empires.

"The richest silver deposit in American history was discovered in 1857 in Nevada. Two brothers, Evan and Hosea Grosh, found the deposit, but died before they were able to record their claims. Henry Comstock, a sheepherder and prospector, who cared for the brothers' cabin, unsuccessfully tried to find gold on the land, sold his claims within months, and died a poor man. But the silver lode came to bear his name.

 One of the earliest discovers of the Comstock Lode's silver riches was George Hearst, who later found more mineral wealth in the mountains of Utah and South Dakota and finally the Anaconda copper deposits in Montana. His son, William Randolph Hearst would become the nation's most powerful publishing baron. Beginning with The San Francisco Examiner, which his father gave him in 1887, when William was 24, he would develop the nation's first media empire, including newspapers in most major cities and a string of magazines."

Tue, 10/18/2011 - 20:02 | 1787327 Silverhog
Silverhog's picture

Interesting, nobody willing to go to the bottom of the ocean to retrieve old fiat. But a ship laden with Silver is all over the news. If they found 10 ounces of Silver in the Andrea Doria's safe it would have been a hit on TV. Instead they found a hand full of rotten water logged Italian Lira. Stick with 5000+ years of monetary history. 

Tue, 10/18/2011 - 23:03 | 1787697 Libertarians fo...
Libertarians for Prosperity's picture



Silver's going to min. $1,000 / oz. in real my vote is with the bulls.

My personal price target for silver is $12,000/oz, maybe $100,000/oz if the "Cartel" looses control. 

Very fluid situation right now.  Lots of wild cards. 



Wed, 10/19/2011 - 01:12 | 1787963 TheSilverJournal
TheSilverJournal's picture

$100,000 / oz. in real terms seems a bit high. LIkely, up to 2 billion -3 billion will per yr. will be able to be mined the first couple years and that number will continue to grow until the right above ground supply is available. If 2 billion could be mined that first year after price explosion and silver is valued at $100,000 / oz., that would make one years worth of mined silver $200,00 trillion. If by some bizarro fashion it actually got that high, it would be for a very short period of time. But who knows, fiat has made it to this point so that shows how whacked out things can get. In the end, though, it all leads back to equilibrium. People did spend a ridiculous amount on tulip bulbs at one time too.

Tue, 10/18/2011 - 19:17 | 1787230 LawsofPhysics
LawsofPhysics's picture

Depends on whether or not people want keep eating.

Tue, 10/18/2011 - 19:18 | 1787234 cossack55
cossack55's picture

Methinks the author misses the whole point of commodities, at least for real-world, non-paper delineated reality.  Odd name "katusa". Used to be a descriptor with negative conotations in Korea 40 years ago. 

Tue, 10/18/2011 - 19:19 | 1787237 kengland
kengland's picture

"Certainly, the fundamentals of the copper market remain very tight. Based on current demand predictions, the International Copper Study Group expects to see a deficit of 250,000 tonnes in the global refined copper market in 2012,"


How can this dipsheet reference "fundamentals" in this phony arse system? How can he weed through all of this fiscal and monetary bullsheet and come up with fundamentals?


Sad thing is, there will be thousands who will follow this turd down the toilet.


Tue, 10/18/2011 - 19:21 | 1787243 topcallingtroll
topcallingtroll's picture

Ben cant QE until people are begging for it.
I am thinking commodities might have a little bit further to fall but some positive growth surprises ought to keep it falling much further.

Tue, 10/18/2011 - 19:22 | 1787246 agent default
agent default's picture

When panic sets in all investors want to go to cash, and all central bankers want to go to their printing presses.

Tue, 10/18/2011 - 19:24 | 1787252 Turd Ferguson
Turd Ferguson's picture

"The price of silver shed a whopping 33% in 30 days, while gold is currently down 15% compared to its price on September 6."

The author writes this as if this move in the metals was nothing but a natural correction in price when, in fact, it was a direct and coordinated beatdown, manufactured to give The Cartel room to continue covering their massive short positions without driving gold through $2000 and silver through $50. 

Tue, 10/18/2011 - 19:28 | 1787264 Grimbert
Grimbert's picture

And both metals are massively higher than this time last year.

Tue, 10/18/2011 - 19:47 | 1787294 printmemoney
printmemoney's picture

Mr. Ferguson.....I must say I have been very impressed with gold and silver's ability to hold their lines at 1650 and 30 against these relentless between market attacks. We still may be looking at another kick in the teeth, but the physical buyers will come in in droves. You run a terrific site.

Tue, 10/18/2011 - 20:57 | 1787430 Libertarians fo...
Libertarians for Prosperity's picture



Personally, I think Turd's site caters to the absolute dumbest investors in the market. 

The predictions are worse than dart throws and the conversations are utterly nonsensical.



Tue, 10/18/2011 - 21:52 | 1787526 printmemoney
printmemoney's picture

Sounds like you check it out quite a bit.......maybe if you are "looking to do the opposite of the turd herd" you should sell your physical metals (that you don't have) and go long bank of america

Tue, 10/18/2011 - 23:24 | 1787744 akak
akak's picture

Personally, I think Turd's site caters to the absolute dumbest investors in the market. 

The predictions are worse than dart throws and the conversations are utterly nonsensical.

If you truly believe all that, then why do you continue to read (and most probably, troll) his blogsite?

Personally, I think that trolls who actively and continually spread misinformation, disinformation and dissension to disrupt anti-establishment online forums (while constantly changing their handles to pretend that they are new members and not the same, repeatedly discredited troll) are the absolute dumbest and most worthless pieces of human waste in the world.

Wed, 10/19/2011 - 01:13 | 1787965 jomama
jomama's picture

i must have missed that link to your blog...?

Tue, 10/18/2011 - 20:33 | 1787367 Libertarians fo...
Libertarians for Prosperity's picture





Ahh, yes...  "The Cartel".... that phantom, illusory nemesis of the doomer goons. 

Like religious fanatics who resort to stories about devils, spirits, gods and virgins when they don't understand the world around them, doomer goons do the same when the price of silver and gold bounce around. It's the Cartel's fault!  

Didn't you ever watch Scooby Doo as a child, Turd?  It's a metaphor for life.  At the end of every episode, when the "Mystery Gang" finally solves their puzzle, the villain or "ghost" was always a real person: the neighbor, the butcher, the teacher, etc.  It was never anything illusory or metaphysical or surreal like ghosts, goblins or evil spirits.  There was always a real answer to all the unknowns, whether you know the answer or not. 

When you continually explain all price movements as the handiwork of some phantom "Cartel", you're really no different than narrow-minded creationists or the "Mystery Gang."  Everything from margin hikes to SIFO rates to the mechanics of ETF's have actual, real explanations to those who truly understand (or have a real curiosity to understand) how the market works. 

Everything else is just carnival barking or good fodder for cartoons -especially cartoons involving talking dogs and farting bears.

Your insistence in blaming everything on some evil phantom Cartel is really quite sophomoric. 

Crash JP Morgue, buy Silver



Tue, 10/18/2011 - 20:36 | 1787385 JustObserving
JustObserving's picture

The Fed does intervene in the gold markets:

"That day the U.S. announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake."

Paul Volcker, Nikkei Weekly 2004

Tue, 10/18/2011 - 20:41 | 1787394 printmemoney
printmemoney's picture

your post is that of a freshman............who do you think initiates margin hikes?  no, you're right the margin hikes in silver early in the year happen all the time, especially in ES positions



Tue, 10/18/2011 - 20:45 | 1787406 Libertarians fo...
Libertarians for Prosperity's picture




Tue, 10/18/2011 - 22:48 | 1787659 buyingsterling
buyingsterling's picture


Exactly. You don't know what you're talking about. Un-backed currency is the must lucrative scam in history, and those benefiting the most from it will do anything in their power to keep it going.

Tue, 10/18/2011 - 22:57 | 1787678 Libertarians fo...
Libertarians for Prosperity's picture



Can you tell me more about this "unbacked currency?"  That sounds suspicious.


Tue, 10/18/2011 - 23:22 | 1787743 buyingsterling
buyingsterling's picture

Go spend some time at or

Wed, 10/19/2011 - 02:52 | 1788034 AustriAnnie
AustriAnnie's picture

"Can you tell me more about this "unbacked currency?"  That sounds suspicious."

Which one?  The one we have now, or the ones that came before:

Tue, 10/18/2011 - 21:00 | 1787434 Chaffinch
Chaffinch's picture

I think your post demonstrates a good understanding of Scooby Doo, but I think you need to study the gold and silver markets a bit more carefully Libby.

Tue, 10/18/2011 - 21:27 | 1787470 cbaba
cbaba's picture

Have you ever heard Andrew Maguire ?,

Who has over 40 years of experience as a metals trader,

he is the whistleblower for the silver and gold price manipulation.

Any bells ringing ?

do you think he is also a phantom or a ghost ?

Tue, 10/18/2011 - 21:30 | 1787473 motley
motley's picture

Please read and may know about Scooby Doo, but this subject owns you...


Wed, 10/19/2011 - 00:32 | 1787887 rocker
rocker's picture

 Take your Political Bullshit and Eat it asshole. The Fed is not a part of the U.S. Government.

 Supposedly it is seperate from the Treasury. Are you ready, this is where you eat shit.

Even under Bush & Co. they tried to make it look that they were not the same.

The problem was when Goldman Sach's X-CEO Hank Paulson pulled another X-Goldman's employee Neel Kashkari and

with Ben Bernanke the group engineered the greatest rip off of taxpayers to Bail Out Goldman Sachs, AIG, (who Goldman Screwed),

and all the other too big to fail, (LOL) Banks. This "Cartel" of Banksters got all their bonuses that year.

Yes, even the much worshipped Lord Blackass, (Lloyd Blankfein), to you.

So this "Cartel" was directly responsible for Lloyd Blankfein's 100 millions dollar Bonus.

Without the Bailout, Goldman Sachs was going Bankrupt and would have been.

If Goldman Sachs, who rules the world, would have gone bankrupt as they should have with all the other Banksters who got

bailed out. One could actually say American's can make Capitalism work.

But, Capitalism Failed. Ben Bernankee, Hank Paulson and Neel Kashkari "Socialized the Failures" of Godlman. 

Hence, Goldman is the Leader of the "Real Cartel" that you call phantom. 

The carnival is hearing Lloyd Blankfein say, "I'm doing God's Work."


Wed, 10/19/2011 - 00:35 | 1787894 rocker
rocker's picture

 And just in case anybody needs to be reminded. Hank Paulson and Neel Kashkari were with the Treasury.

 Ben Bernanke is in the FED. Now and Then.

Wed, 10/19/2011 - 01:09 | 1787957 jomama
jomama's picture

i thought you were being sarcastic, but you took it to an extent that proved otherwise.

so you're seriously asserting that the spot prices reflect true supply and demand?

Wed, 10/19/2011 - 07:12 | 1788156 Tramp Stamper
Tramp Stamper's picture

+1 for the Scooby Doo

Tue, 10/18/2011 - 21:09 | 1787446 Gene8696
Tue, 10/18/2011 - 22:28 | 1787611 Maxter
Maxter's picture

Could someone explain to me what is a "coordinated beatdown" and most importantly how they do it.

I was with the impression that to drive the price down you must sell your gold.  But their goal is to buy more gold.  So where exactly do they make profit?

They sell gold in the hope to create a panic selling by other investors so they can then buy on the way down?

Tue, 10/18/2011 - 23:05 | 1787698 Libertarians fo...
Libertarians for Prosperity's picture




<chirp, chirp>


Tue, 10/18/2011 - 23:45 | 1787748 tekhneek
tekhneek's picture

Silver's a pretty small market in terms of valuation and size/volume. Registered deliverable silver has pretty much followed a solid downtrend:

That doesn't mean it's manipulated necessarily. It just means there's growing demand for the supply which is a good thing. The bad thing about this picture is that physical supply is a gradual decrease downwards while the cost of that same exact supply fluctuates nearly 50% in less than 8 months. That's a large % difference and somewhat suspicious to me.

Even more so is the reality that a (set of) bank(s) has unlimited Fed discount window/bond commission to play with. A certain "bank" inherited a massive short position (JP Morgan...). They didn't necessarily want it... it was grandfathered in if you will. This position requires capital and lots of it to continue settling in cash premiums for physical delivery. 50-60-70-100% cash premiums over physical in some cases (none of my personal experience, but I've heard of such numbers)

Imagine if you had billions of fiat to push around in a few billion dollar market. You in effect are 30-40% of the volume while the remaining few can be separated as bears/bulls nearly evenly in some cases (but not this one)

So you short first and sell. Your colleague shorts second and sells with you. Then it follows momentum and before you know it there's a downward trend starting. Then they hike margins 20-30-40-50%. Then they sell more calls than they buy puts. Then they do it a few more times until they can cover their (in relative terms) massive short position they themselves have to hedge to stay afloat.

Oh yeah and saying "silver $12,000" or "silver $3,000" or "silver $1,000 at least" is pointless... all you're doing is explaining further that you measure purchasing power against that which you procured actual purchasing power with in the first place. Measure value against value. Goods and services against other goods and services. If you have to bring that down to dollars terms fine fine, but if you're hedging cash with gold/silver and measuring relative gains against that which you're hedging without having a true reason why... it's  kind of pointless IMO.

Just my 2 cents.

</extremist rant>

Tue, 10/18/2011 - 23:27 | 1787749 buyingsterling
buyingsterling's picture

They just sell assheaps of silver that they don't have and will never own. They sell as much of it as they like, without limit. And/or they jack up margin requirements for trading it, beyond what reason and caution dictate.

Tue, 10/18/2011 - 19:26 | 1787258 Bansters-in-my-...
Bansters-in-my- feces's picture

Gold and silver were MANIPULATED down by Central bansters and the PPT.

Plain and simple.

Tue, 10/18/2011 - 20:19 | 1787357 Citxmech
Citxmech's picture

And because of that my stack is now larger.

Thanks Bennie and JPM for the additional buying opportunity!

Tue, 10/18/2011 - 19:43 | 1787262 Grimbert
Grimbert's picture

The bronze (95% copper, 5% tin) I buy costs £1.28 per pound, and is dated between 1971 and 1992. That's $2.01 a lb, so I'm always a winner.

The UK is the only country in the developed world where it is legal for children to gamble. The stake has to be 10p or less, and my kids love going to the seaside and losing a couple of pounds in the slot machines. So, whenever they change their £1 into 50 x 2pences I insist on buying the copper ones off them. At face value.



Tue, 10/18/2011 - 20:01 | 1787287 Jendrzejczyk
Jendrzejczyk's picture

Why not teach your kids the real value of those coins, and then enlist them to buy all the "good" coins off the other kids (and their parents)?

Edit: Upon reflection, teach everybody the value of sound money and improve the world.

Tue, 10/18/2011 - 20:01 | 1787325 Grimbert
Grimbert's picture

We don't see them often enough except at the amusement arcade. A lot of people throw them away as they are pretty much useless for buying anything.

After a day's shopping you rarely get much smaller than a 10p or 20p, except maybe a penny change when something has been psychologically priced to end in .99

Tue, 10/18/2011 - 19:56 | 1787314 silverserfer
silverserfer's picture

what a fiendish retirement plan. You should make a scary face and yell at them after you do it. Tell them they cant have any pudding cause they diddnt eat their meat too.

Tue, 10/18/2011 - 20:08 | 1787336 Grimbert
Grimbert's picture

No, I need to be nice to my children so they will look after me in my dotage. I recognised the pension ponzi for what it was many years ago, so we had more of them than there were of us.

I was however expecitng more criticism for allowing my children to gamble.

Tue, 10/18/2011 - 20:17 | 1787352 Jendrzejczyk
Jendrzejczyk's picture

We here in the US must give our children $40 in real money to play silly games at the arcade with absolutely NO chance of getting any of it back.

How stupid are we not to allow our children to gamble?

Tue, 10/18/2011 - 20:45 | 1787407 Abitdodgie
Abitdodgie's picture

Gambling , down the mines with the pit ponies, cleaning chimneys , working in the mills , its all good fun for English kids.

Tue, 10/18/2011 - 21:30 | 1787474 ironsky
ironsky's picture

My father was a breaker boy in an anthracite mine in Northeastern Pennsylvania in the 20s. Not limited to the UK.

Tue, 10/18/2011 - 21:10 | 1787448 freedogger
freedogger's picture

I've been buying them by the brick off of my TBTF bank and running them through one of these: After extracting the copper ones, I return the fakes back to my bank.



Tue, 10/18/2011 - 19:35 | 1787272 nachtliche
nachtliche's picture

There is no mention of the two primary forces affecting metal prices, inflation & manipulation. Market volatility is here to stay, and not just in metals...

Tue, 10/18/2011 - 19:37 | 1787274 YouThePeople
YouThePeople's picture

Stupid article reads like MSM. Think I'll pass on their 'expert' analysis.

Tue, 10/18/2011 - 19:41 | 1787285 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

Have been holding off purchasing PM's (physical) because I felt a deflationary 'spike' would permit entry at better levels. To a large degree, I still do but a couple of days back, with the NZD/USD back over .8000, I bought 10% of my 15% asset allocation. Swiss PAMPs. This is not a trade. This is disaster insurance. I care little whether it drops to 800/oz, I would buy another %. What I do NOT want is to have gold at 15-50,000/oz, and not have any. Incidentally, the other asset is currently cash, and I trade FX and equities sporadically.

Tue, 10/18/2011 - 20:23 | 1787296 JustObserving
JustObserving's picture

The world is awash is fiat money, huge debts and unpayable future liabilities and yet people expect commodity prices to decline.  US debt is $14.8 trillion and unfunded liabilities are $116 trillion and they are growing at $1 trillion every 42.4 days.   Social security may go bankrupt in 2037 but the more expensive Medicare wll be bankrupt in 2017.

Just the value of land in Beijing was worth nearly $20 trillion in January 2011.  So what is the value of real estate in China and Hong Kong?  Maybe $150 trillion or even $200 trillion.  Compare that to the value of silver bullion of only $64 billion since only about 2 billion ounces are available.  

Yet people are betting that precious metals will decline.  The downside may be another 20% - the upside is a few hundred percent.  Every fiat currency is destined to fail. 

If you are Greek, you better be buying gold and silver with your Euros before they are converted to worthless Drachmas.  If you are German, you better be buying precious metals if Germany is bailing out the rest of Europe.  If you are Chinese, you better be diversifying your real estate holdings by buying precious metals.  If you are Indian, you don't want to be holding a depreciating currency and must buy precious metals to hedge against rising inflation.  

The fiat game is getting dangerously unstable now.

Tue, 10/18/2011 - 23:50 | 1787815 tekhneek
tekhneek's picture


I agree with you.

Tue, 10/18/2011 - 19:50 | 1787303 Everybodys All ...
Everybodys All American's picture

Tell me what Bernanke's next QE move is and I'll tell you if commodities are going higher or lower. It's that simple.

Tue, 10/18/2011 - 20:12 | 1787342 TheSilverJournal
TheSilverJournal's picture

More QE is happening right now. With Operation Twist, the Fed is selling short dated to buy long dated + the very short end is being kept at 0%, so the Fed must also be buying the short end.

Tue, 10/18/2011 - 20:29 | 1787372 JustObserving
JustObserving's picture

Bernanke claims that the Fed is routinely audited.  Ron Paul wants to audit the Fed.  Who is telling the truth?

Tue, 10/18/2011 - 22:02 | 1787559 TheSilverJournal
TheSilverJournal's picture

Why would anyone thumbs down this? Bernanke is in there buying more than he says. Everyone knows it. Look at M2.

Tue, 10/18/2011 - 23:53 | 1787825 tekhneek
tekhneek's picture

I didn't downvote it, but I do know a few old timers who think downvoting is an easy way to know which comments they read.

Tue, 10/18/2011 - 19:50 | 1787304 spencer
spencer's picture

blah blah blah

what a waste of time

so who's right?

Bears or bulls?

Tue, 10/18/2011 - 19:58 | 1787317 hackettlad
hackettlad's picture

Honestly, do you really think there is such a thing as an "orderly default"? Stop kidding yourself.  Remember Lehman?  That was supposed to be well telegraphed in advance, priced in etc - and then what happened?

Tue, 10/18/2011 - 19:58 | 1787318 PAPA ROACH
PAPA ROACH's picture

I am really growing tired of it all, really. I hope they just burn the whole motherfucker down in default, set-off CDS quagmire, and watch the whole steaming pile of shit known as modern fractional reserve banking join Jimmy Hoffa, taking a high body count along the way, GAME FUCKING OVER.


When will Joshua figure out global thermo-nuclear warfare ends in stalemate every time, thus asking for a simple game of chess? "Greetings professor Falkan"

Tue, 10/18/2011 - 20:41 | 1787395 Cabreado
Cabreado's picture

Papa, take heart... we're all tired of it all.

It is indeed a steaming pile of shit.

Rest up... stay strong... keep and protect your humility.
Those who refuse to pretend, like you, are the only future we have.

It seems the greatest project is to instill such things in the younger among us, quickly.

Wed, 10/19/2011 - 01:41 | 1787995 ForTheWorld
ForTheWorld's picture

An up-vote for the War Games reference alone.

Tue, 10/18/2011 - 20:00 | 1787324 msmith
msmith's picture

The SPX is likely to correct lower followed by rangebound price action in the near term.  However, the DX and GC remain bullish.

Tue, 10/18/2011 - 20:03 | 1787328 sagerxx
sagerxx's picture

Bears are right first. Then the bulls will be RIGHT.

Tue, 10/18/2011 - 21:31 | 1787476 Prometheus418
Prometheus418's picture

This whole thread feels like operation brain twist.

I haven't been buying silver to be a silver bull- I've been doing it because I'm a stock bear, and the wild-ass swings in the market make it far too dangerous to short right now (for me, anyhow.)

I get it, really, I just never think of buying insurance in the form of specie as bullish.

Tue, 10/18/2011 - 20:05 | 1787330 Gene8696
Gene8696's picture

100% agree with ETF the Robots written to attack them. This is my 3rd major wave since Aug, and the biggest so far.

Fighting the matrix on Oil, Gold, & Silver is hard work.

Tue, 10/18/2011 - 20:05 | 1787332 Stockspeare
Stockspeare's picture

Very simple.....follow the charts. Trading commods is all about the charts. If you don't know' something else. There is no fundie story- never was-never will be....just gambling....and by the looks of it...too many jilted prom queens around here who think its more than trading- lol

Tue, 10/18/2011 - 21:46 | 1787511 Prometheus418
Prometheus418's picture

Are you insane?

Don't get wrong- I understand how fucked up the markets are right now, but to claim that there are no fundimentals in raw materials is flat out stupid.  

The fundimentals are different than they are in equities, sure- but they're certainly there.  If you know, for example, that half of the world's wheat supply this year will be useless because there has been a massive drought all summer, that's a commodity fundimental.  People don't stop eating bread because the supply decreased, so the price increases.  If it's going to be a banner year for wheat production, the price will go down.  

Should work the same way for equities, but often does not- farmers, miners, and loggers tend not to lie when they've had a bad year, but CEOs often do.

All that being said, I actually might agree if you specify the time frame (just gambling right now) or limit the scope of the sentiment to those commodities that are non-essential, like gold.  While gold has a lot of history, and is the best yardstick we've got, nobody will die if they do not have gold to consume, which is not the case with things like oil, cattle, and wheat.

Tue, 10/18/2011 - 20:14 | 1787345 Old. No. 7
Old. No. 7's picture

Five years from now I think trust in most financial instruments will have evaporated.  That doesn't leave a whole lot of

alternatives for wealth preservation and storage. They'll use volatility to shake your tree, fuck em.

Tue, 10/18/2011 - 20:30 | 1787376 Deadpool
Deadpool's picture

5 weeks from now.

Tue, 10/18/2011 - 20:33 | 1787381 Stockspeare
Stockspeare's picture

Sure pal.  There will be new ways to play  THE GAME. There will be just as many, if not more. I suggest- most stop whinning- watch what's happening and prepare for game changers. THE GAME will continue. learn it and adapt;)

Tue, 10/18/2011 - 21:02 | 1787437 Cabreado
Cabreado's picture

"Five years from now I think trust in most financial instruments will have evaporated."

You view chaos differently than I...

trust is already gone.

Tue, 10/18/2011 - 20:18 | 1787355 disabledvet
disabledvet's picture

The only "thing" being supressed are interest rates and until people wake and realize Greece is Everywhere then commodities will stay unnaturally elevated. Stay long natural gas as unlike gold it represents not just money (which of course gold is) but cash flow too and therefore an immediately accretive asset. Obviously we are very pleased with El Paso being acquired but the real play still remains the engine technology and how it is deployed to scale. Needless to say when one of your competitors is the Federal Government itself there are no shortages of "minefields."

Tue, 10/18/2011 - 20:19 | 1787358 jcaz
jcaz's picture

LOL-  whoops, Bass just got stuck with all his nickels.....  Which will serve him well when soda drops back to a nickel....

Tue, 10/18/2011 - 21:09 | 1787444 oddjob
oddjob's picture

Soda back to a nickel?

Commodity costs falling?...that's a larf.

Tue, 10/18/2011 - 22:32 | 1787623 Seasmoke
Seasmoke's picture

he only paid 5 cents for each of them, so i think he is still even

Tue, 10/18/2011 - 20:21 | 1787359 Deadpool
Deadpool's picture

are we supposed to know who this dude is and care?

Tue, 10/18/2011 - 21:14 | 1787454 LongBallsShortBrains
LongBallsShortBrains's picture

No... And no

Tue, 10/18/2011 - 21:01 | 1787435 huggy_in_london
huggy_in_london's picture

If you believe that there will be a stock meltdown, and european crash then I hate to break this to you but that will mean a run to the USD.  A run to the USD will mean metals get destroyed.  In a debt deflation, which is currently at play, we will see debt destroyed (ie defaults etc).  That is a destruction of money, and yep, that too means gold etc go down.  Junk away, or think about the linkages.  This isn't a market to blindly just buy one asset class and sit on it.  


Tue, 10/18/2011 - 21:13 | 1787453 JW n FL
JW n FL's picture



I dont own Gold / Silver because I believe that the LIE that is FIAT will last another 3 or 4 years.. I think if we make it past Europe Crashing without having RIOTs in the Streets (here in the U.S.) it will be a fucking MIRACLE!


I would also disclose I am sitting on cash.

Metals 35%

Equities 9% - 15%

Cash 50% or better..


for people with no revenue and limited funds?

where is there a better place to put cash as the value is printed away by the FED?

I cant wait to hear your answer.

I would junk you but it would be a waste.



Tue, 10/18/2011 - 23:24 | 1787751 Stevious
Stevious's picture

A better place to put cash is in nickels.

Hyperinflation: Nickels will hold its purchasing power.  A handful of nickel coins during the Weimar Republic would buy a big loaf of bread, even as the paper currency inflated into the billions.

Hyperdeflation: Heck, they are still worth the nickel.  Even with the huge recent drop in nickel and copper prices, $100 Face Value still equals $103 melt value.  Yes they are illegal to melt, but in 5 years when they are obsolete illegality may end.  If not, wait a bit.

Theft resistant: $10k weighs 2200lbs

Pre 1983 pennies are a better deal but not that practical to accumulate several thousand dollars face value.  Today $1 face value = $2.22 melt value.

Tue, 10/18/2011 - 23:24 | 1787752 Stevious
Stevious's picture

A better place to put cash is in nickels.

Hyperinflation: Nickels will hold its purchasing power.  A handful of nickel coins during the Weimar Republic would buy a big loaf of bread, even as the paper currency inflated into the billions.

Hyperdeflation: Heck, they are still worth the nickel.  Even with the huge recent drop in nickel and copper prices, $100 Face Value still equals $103 melt value.  Yes they are illegal to melt, but in 5 years when they are obsolete illegality may end.  If not, wait a bit.

Theft resistant: $10k weighs 2200lbs

Pre 1983 pennies are a better deal but not that practical to accumulate several thousand dollars face value.  Today $1 face value = $2.22 melt value.

Tue, 10/18/2011 - 21:39 | 1787494 jimmyjames
jimmyjames's picture

That is a destruction of money, and yep, that too means gold etc go down.  Junk away, or think about the linkages.  This isn't a market to blindly just buy one asset class and sit on it. 


You did real good until you got to that part-

60 Trillion in credit at what real market value-who knows-

3 Trillion in actual money supply-sounds like a money shortage to me if Credit is being destroyed-

Gold is money and it always acts like money in Deflation-

It did real good last time there was Deflation-why wouldn't it again?


Tue, 10/18/2011 - 22:38 | 1787635 SilverFocker
SilverFocker's picture

Debt deflation cant last long.......We have 0% interest rates, we need inflation to keep these rates. Deflation will in a short time cause TPTB to reverse course and print inflation to continue with 0% rates, there exist no other way.

As far as the ping pong effect of a run to the USD, Short term you are correct.....Long term all Fiat is FUBAR, they wanted a global economy so they get a epic Global print meltdown........where do the sheep run to then?....Think PM's, don't be so blind not to see the end result, and it will be the only asset to have when everyone wants,other than protein.

Tue, 10/18/2011 - 21:05 | 1787441 JW n FL
JW n FL's picture



Take the paper you have..


BTFD's!!! (Buy the FUCKING DIPS)


do the reverse.

hold onto your fiat paper.

Graph: St. Louis Adjusted Monetary Base (AMBNS)


H.6 (508)
Table 1                                                                                                     For release at 4:30 p.m. Eastern Time
                                                                                                                                  October 13, 2011
Billions of dollars

Tue, 10/18/2011 - 21:12 | 1787451 Johnk
Johnk's picture

Lots of these types of headlines lately...every day...

  • Freeport Indonesia mine halts copper output
  • Peru union says breaks off talks with Freeport
  • Pay protest paralyses Zambia Chinese copper plant (seeking a 100% pay raise to around $400 a month)
  • Teck Receives Highland Valley Copper Operations Strike Notice
  • Collahuasi Copper Miners Strike in Chile, Joining Escondida


Tue, 10/18/2011 - 21:17 | 1787458 sbenard
sbenard's picture

I'm a commodites trader, so I speak from my own experience. PPI was up 9.6% yesterday on an annualized basis.

Commodities declined steadily throughout the month of September, but have been slowly gaining ground throughout October, in harmony and sympathy with stocks. Strong correlation, especially on a broad basis. Only nat gas continues in a downtrend. That's because it is abundant and domestically-produced (hint to Emperor Obama)!

Crude oil is moving almost in lockstep with stocks. This is true both on the daily and intraday charts. I recently posted charts of ES and CL on my blog for the previous two months. They were virtually indistinguishable from each other, except by the symbols. 

The commodity indexes are moving also in very close correlation to stocks. They look almost identical to the charts for crude. Crude is typically the largest component of commodity indexes, so this is not surprising.

I don't see any divergence between the message that stocks are sending, and commodities. They have been closely correlated throughout the summer and fall of 2011.

That said, commodity prices are still significantly higher today than they were at the beginning of 2010. Corn is about 80% higher than in June 2010. Other grains are also much higher. so are many of the food, metal, and fuel commodities. Commodity prices have not corrected nearly as much as I would have liked or hoped, given the precarious condition of the U.S. and global economies. I fear that inflation is only just beginning, because producers and manufacturers are still facing pressure and margin squeeze, as has been well documented here at ZH.

Thanks for taking the time to read these thoughts. Best wishes in your trading and investing!

Tue, 10/18/2011 - 22:15 | 1787580 Deadpool
Deadpool's picture

Mr. Valentine has set the market.

Wed, 10/19/2011 - 00:24 | 1787867 iNull
iNull's picture

I grant that on the surface it may appear that "Crude oil is moving almost in lockstep with stocks" but that is an artificial arbitrage. In truth it is stocks that follow crude oil, not the other way around. No energy = no economy. Bottom line.

Now, if we solve the problem of nuclear fusion, that equation changes and we get to go Star Trek and explore the galaxy. But being that the average IQ of this species seems pinned to 100, I see little chance of that happening. Our future is looking more and more like JHK's Long Emergency and World Made By Hand.

Wed, 10/19/2011 - 03:50 | 1788057 Johnk
Johnk's picture

sbenard....agree completely.  You on Twitter?



Tue, 10/18/2011 - 21:19 | 1787460 eddiebe
eddiebe's picture

Hey Marin, unless you have an answer to the question, just shut up.

Tue, 10/18/2011 - 22:52 | 1787505 Threeggg
Threeggg's picture

The whole story was about commodities and not one mention of the CME ? Things that make you 'mmmmmmmmmmmmmmmm'

Update !

Check this out ! Remember a few weeks ago they were finding ships and shit filled to the brim with Silver ? Well now they are pulling the same thing with Gold.........Get ready for some fluff !


Tue, 10/18/2011 - 22:52 | 1787665 Conax
Conax's picture

Gold and silver try to grow, but it's tough with Blythe dancing the fandango on your face every day. Watch the Netdania charts, turn on the volume window. At 3:00 PM they swamped silver with thousands of contracts a minute, and especially as the price would rise. Then promptly at 5:04 the algoes took over, with their bogus 2 cent sawtooth wave. So much for fundamentals and charts.

This article sucks, it's nothing more than an a diversion from the truth.

Silver might not go above 50 until they give up and crash this mess and start fresh. I'll hold.

Tue, 10/18/2011 - 22:57 | 1787676 silver is money
silver is money's picture

Sounds like we should wait buying gold and silver.....but I do not think them when you can the way to go...make sure to buy physical coins and bullion from reputable dealers.


Tue, 10/18/2011 - 23:05 | 1787699 Conax
Conax's picture

I understand very well the reasons someone might just wait.. But if they succeed and drive the silver prices down into the mid 20s or lower, you will have one heck of a time finding any of the good stuff. It will be beat up ingots and happy birthday rounds for you. The best time to buy is when the cash is burning a hole in your pocket. Otherwise, you'll blow it on drinks and trips, and end up a loser.

Au, however? no guesses. There is a lot of gold available.

Wed, 10/19/2011 - 00:27 | 1787877 buyingsterling
buyingsterling's picture

How many warehouses full of gold are the Rothschilds sitting on? It's well known that they store gold in their own underground vaults. They've been sitting on mountains of paper money for centuries. What would you do in their position? Hard assets that can occupy small spaces are hard to beat. Earlier this year billions in gold were found in a temple in India. Its been the chosen store of wealth for wise people for centuries. If much of the world's wealth (partucularly that best described as plunder) is hidden, we can be sure it is stored in the form of gold.

Tue, 10/18/2011 - 23:00 | 1787687 AgShaman
AgShaman's picture

In the could always just bet on the weather....or just think of anything that suits your fancy....the CME will accomodate your desires to entertain your risk fetish.

I'll be hoping the bears are correct in the near term....guess I've cashed out on the idea that anything relative economically tied to the construct as it's currently set up is actually salvageable...

....waiting patiently, accumulating, and keeping dry powder for more of the same

Wed, 10/19/2011 - 00:11 | 1787852 iNull
iNull's picture

I'm exhausted from this debate because it is so old and we've had it so so many times, and yet we keep having it. To state for the 1000th fucking time. Round earth means total amount of volume is contained within 4/3 * PI * RE3. And every resource you wish to extract is contained in a thin crust just a few miles thick, i.e. RE - X, where X < 5 miles. We've been over this so many fucking times that by now I suspect that the only people who don't get it are either:

A) People who believe that the earth is 7000 years old and that dinosaurs walked with Jesus or

B) People in denial.

Peak oil is real. Most of the the world's leading energy analysts and energy agencies and major militaries concede the point. Commodities go up until it's no longer economically feasible to extract them from the earth. Like Richard Heinberg says it's Peak Everything. Bitchez.

Wed, 10/19/2011 - 00:39 | 1787901 buyingsterling
buyingsterling's picture

You must be saying that it is economically and politically impossible to reach peak extraction. Because until you at least to that, you have no idea if you are at peak oil. There's a lot of evidence that much of America's oil is off limits. Will the price go up over time? Yes, as you say. But it's not the end of the world and certainly not the end of growth. Even if there is no growth for decades, that isn't an end of growth. We will find other sources of energy.

Wed, 10/19/2011 - 01:38 | 1787986 iNull
iNull's picture

"There's a lot of evidence that much of America's oil is off limits."

This is what's so exhausting about this debate. Having to prove to people what the Texas Railroad Commission decision in 1971 to "Pump at will" really means. That means the U.S. has fucking peaked bitches. It doesn't get much simpler than that. Exactly the year that M King Hubbard said it would happen! You people!

Even Jesus would bitch slap you for being so stupid.  The age of oil is over. It's over! We either solve the scientific and engineering problems of nuclear fusion* or we go back to an 1850s lifestyle centered around wood and coal-fired stoves. Get it through your thick fucking heads.

*I'm sure we've all seen Star Trek. An economy based on human potential. Travelling to distant planets. That can only be achieved with nuclear fusion technology. It cannot be achieved with dead plants (coal) and dead marine organisms (oil).

Wed, 10/19/2011 - 03:18 | 1787999 iNull
iNull's picture

I'm a big fan of microreactors and thorium reactors (Toshiba and GE are working on prototypes). But that is a "fallback measure." If we don't solve the problem of nuclear fusion then microreactors are the next best thing. Far better than coal which will devastate this planet due to global warming. I would rather, however, see humanity colonise the moon and terraform Mars. But, we're certainly not going to do that with microreactors and damn sure not with fossil fuels.

We have to solve this problem of nuclear fusion if humanity is to have any hope at all. But so far all we've done is build one inertial confinement fusion device at Livermore, and one magnetic confinement fusion device in France (China's since jumped on the fusion wagon). Now let's talk costs. The cost of the NIF was something like 3 to 3-1/2 billion, and people bitched up a storm about the cost overruns. Fucking idiots. How much did we spend on AIG? Something like what, 80+ billion, and nobody said fucking shit about that, and what's that gonna do for us as a species? Yeah. Nothing.

This clusterfuck called the Wall Street bailout is such an outrage and at the same time such a tragedy. We should have built 10 of these fusions plants. 5 MCFs and 5 ICFs and put everything we had, in terms of high energy physics, material science, mechanical engineering, computer science scholarships, behind it. And even if we did that it still wouldn't amount to the cost of the bailout of AIG.

Let's assume a 50% premium on all plants, even though economy of scale would suggest otherwise. So for 10 plants that's $45 Billion. Now add to that $25 billion to cover the cost of O&M (which is generous), and another $10 billion to cover the cost of training new nuclear physicists, material scientists, computer scientists, MEs, EEs, et al, and, add all that up, and it still doesn't come to the cost of bailing out AIG. O.N.E. bank. Multiply this by all the banks that have been bailed out on Wall Street, and I think it becomes pretty clear.

Think about it this way. If we fail, the very worst that can happen is we go back to a pastoral way of life as described in JHK's World Made By Hand. But, if we succeed we win EVERYTHING. We get to colonise the solar system a la 2001 A Space Oddessy, and we get to explore and colonise the entire galaxy. Is that not worth it? Is it not worth the gamble? C'mon. Hell yes it is. The universe has been grinding along, nearly 14 billion years worth, to get us to this point. Are you really willing to tell me you want to stop? Here? Where we are now? C'mon. No way dude. Star Trek bitchez.

Wed, 10/19/2011 - 02:06 | 1788008 catch edge ghost
catch edge ghost's picture

Bears?  Bulls?

This post was written as if the market has anything to say about the price of anything.  I'll assume all of the numbers and statistical jibberish mean something to important people like Traders.

Wed, 10/19/2011 - 03:31 | 1788049 ivars
ivars's picture

22 nd day this forecasts stays true:

After yesterday( forgot to post) this (first posted Set 27 in TF, 28th in SJ-  is still valid:

Important text from that forecast :

1) Silver may fluctuate around 30 USD (+- 3?) for 1 month or so (except very short sharp peaks, perhaps) , then move up sharply about 5 USD to 35-40 and drop again, now to little higher level of 33-35 +-5, and not change much anymore this year. So the bottom will be kind of close from time to time during October.

End of October is coming, new test very close of how accurate in TIME and values this sentence will be.

2) Gold, on the contrary, seems to be posed for relatively steady growth till 1800 in November, around which level it should fluctuate for few months (+- 50 ?) .

No problems here

Kind of suggests may be more commodities will have relatively flat period from Oct-Nov till the end of the Year.

I have only posted BRENT CRUDE 1M forecast at 105 +-10USD, so far good. By the way, if WTI/BRENT spread will be reduced, which way - WTI gets more expensive or BRENTS cheaper?

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