Tuesday, May 15, 2012

CUTE...HUH?

But that face conceals a terrifying ability to crush human bone if provoked. That had better be what your game face looks like in this beatdown or you'll be the one receiving the bone crushing bite from the greatest ponzi on earth. In this case their bite is much worse than their bark and failure to heed their bark can cost you an arm.

Nothing new on the horizon other than massive bank runs in Europe. The scale of which has never been seen before. Of course the MSM is not letting this little bit of news out to the public as liquidity is being sucked dry from whatever small trickle still exists. No one wants to lose their bank money when the music stops and the defaults begin. When those banks go their won't be an FDIC for the suckers. This is why the headline price of gold has to be fought. It cannot be seen as a "safe haven". We are in the midst of a complete collapse of employment and the only real defense for our CONfidence being maintained is to lie and tell us that we're the prettiest pig at the prom. "Its getting better." Someone tell that to the Greeks. Their suicide rate is up 41%.

Gold is being crushed hard and fast and the miners right along with it. However the longer they let this play out the more bullion that the banks are sending out of the West. That is not a tenable situation to maintain indefinitely and they WILL NOT. Meanwhile I intend to watch from afar and let them kill each other off. Its summer here and our weather is great. This is a bump in the road and if you look back on this in a year, you'll kick yourself at how crazy this was. gl


44 comments:

  1. The little Alpo lover (3rd owner calls her Millie) just needs TLC, unfortunately before that TLC arrived it thought I was the Alpo, well at least the area around my neck. And that kind of sums it up for any paper gold "investors" at the moment. The weekly MACD on the S&P can give you and idea of how much short term pain they can inflict on the miners. JPM like Lehman was a setup for the next phase of control and looting. Currently the idea is trying to herd some of the liquidity out of stocks and precious metals into sovereign bonds. But you can't eat bonds or radioactive food for that matter. If you are nimble and believe you can play the paper deck chairs, PAAS, SLW and HL offer an opportunity once they capitulate the overall averages for this round. Other commodity plays like CHK if you believe they won't try to bankrupt it first.

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    1. thats the problem with CHK .....they may try to wipe it out

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  2. Phil Davis's post today implies any rally will likely fail.

    Keystone did a TA on the SPX chart. They pointed out a gap at 1353 and the 100 day ma is 1351. Thus, perhaps rally up to those levels. They also pointed out the H&S pattern that indicates lower prices eventually (neckline is 1340). They pointed out support at 1337 (Honest wrote a similar # of 1340 yesterday) and then strong support at 1326 which is the # I calculated via Phil Davis's post yesterday.

    Let's see what happens.

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  3. Kli,

    Your perpetrating the myth that Pit Bulls are mean and nasty, hehehehe......

    They have on hell'ova bite but in reality they are not, they actually are quite loyal but as any loyal dog will do, they will do just what they're taught to do! It’s the Owners and Breeders that are EVIL, not poor Millie!! They are however not too tolerant towards their peer’s!! I'm a dog lover what can I say!

    Anyway the only thing I’m kicking myself for is my timing, as usual……………

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  4. Thanks doc. Those are the targets I'm watching. Bought some gll & zsl insurance this morning so the PMs can go ahead and fly upward now.

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  5. physical purchase of silver only today. I'll take the discount

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  6. Kli
    Did you listen to Jim Wille's podcast over at Turd's?  I don't quite understand it, but he seems to be saying that the chinese with all their dollars are forcing the western banks to sell their gold at lower and lower prices. In effect freeing the gold price from the hands of the London and New York traders. 

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    1. yes.....essentially this has been going on for the past two years. Gold reserves ESPECIALLY in China are being expanded dramatically. BUT also very strong "private" entities are in effect squeezing the gold out of the Euro bullion banks......the Chinese have patience and planning

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  7. Replies
    1. just posted an updated GPL hub.....look at the next level....weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee

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    2. I think GPL is done as a play honestly. I think you can easily find better miners. Won't hit the higher range it was in again IMO.

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    3. Well Crap Hubz, Now you went and did it! Had to bring up what's going wrong with my ole folio today!!

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    4. Kli, going to be there by tomorrrow at 10am at this rate ;)

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  8. Looking at DUST as a hedge as well...must watch carefully since it's a 3x bear. I just think I'll sleep better w/these hedges at least for the short term.

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  9. Man I am SICK i didn't stick with HL. It's the only miner I've seen that has held up through this onslaught. They've managed to beat down AUQ so fast I can't even really get out of my position now. They are freaking GOOD as Kli keeps saying.

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  10. Sis,
    Since my timing is for the most part is "Little to Late to the Party", I might join you in a little purchase of ZSL, for the benefit of all!!!

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  11. Interesting theory - http://www.youtube.com/watch?feature=player_embedded&v=H9Twxv1V50s

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  12. EUR/USD (EURUSD=X)

    1.2752 Down 0.0075(0.5900%) 1:38PM EDT

    Nearing the 52 week low.

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  13. Gold
    1,546.00
    -15.00
    -0.96%

    OK KLI... if it hits 1,500 I'm buying physical. It seems to defy reality that it's this low.

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  14. Come on $26... let's just get this OVERWITH. Somebody big is obviously having to sell everything that's not nailed down to meet a margin call.

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    1. Hubz, I just checked my charts on SLV. It's starting to become severely undersold. I doubt it hits 26.50

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    2. Feels like capitulation. I shouldn't be surprised, I vividly remember the selloff from $28 the first time it was tagged as well as of course $50 recently. Metals crater faster than anything I've ever seen. Luckily they rebound well too...

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  15. Damn FXE Puts = printing money right now. How come I was so afraid of that trade? After losing 1.30 this was a no brainer. Doh!

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  16. $5 markup on Maple Leafs on APMEX. That's nearly 20%! Crazy...

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  17. I follow itms, they are calling for gld 149-150, we're already there, then a bounce, then down to 2/11 low of 127-130 level. Notice how they closed it at lod. Man, they are too good for me. Congrats hubz...

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  18. J.C.Penney down 16% AFTER HOURS

    OUCH.

    September 16, 2009 headline: Bernanke: Recession 'Likely Over

    http://online.wsj.com/article/SB125301730771311713.html

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  19. No congrats I'm afraid, did not do the trade. I'm just so used to the euro getting big bounces and BS news that I didn't pull the trigger. Man so wish I would have.

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  20. Oh this is amusing. Guess what bank President Obummer is using? Yup, you guessed right :)

    http://www.weeklystandard.com/blogs/obama-has-over-500000-jp-morgan-chase_645021.html

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  21. Guy on radio now talking about fake meds mfd. in China/India...much more profitable than illegal drugs, really no punishment if caught. Evidence swallowed so hard to find, but pharmaceuticals working to crack down on this. Name of book is PHAKE written by researcher Roger someone or other...in U.S. 4 billion prescriptions filled every yr., more instances reported every yr. We get ingredients from them to keep costs low.

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    1. Sister, I'm in the middle of a book called Death by China: Confronting the Dragon

      After reading the first few chapters, you'll be very concerned about what's reaching our store shelves food and medicine wise.

      http://www.amazon.com/Death-China-Confronting-Dragon-Global/dp/0132180235

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    2. Sister & Jay,

      I take care of a Professor at one of the local pharmacology schools here. He told me that at any one time, 1-2 % of the drugs (even brand name drugs) circulating through US pharmacies are counterfeit. One time, he told me that the US authorities knew that a counterfeit shipment of Lipitor was arriving into the US, but failed to stop it. So, something like 100,000 bottles of counterfeit Lipitor was distributed to US pharmacies. It has become a big problem and will likely only get bigger.

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  22. watta massacre......this should convince you to sell your miners at the first sign you are back to even...hehehhehehe......i love it.....not only will you not hold the trade for the bigger ride up but many peeps will puke here and NEVER get back into it.....mass psychology is a time honored trading tool by the big boyz and the response is always the same

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    1. Hahaha EXACTLY. Already part of me is thinking if i get back to break even I am outta this game :) Puking here is the worst possible move though unless you have options that expire soon.

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  23. P.S. Kli, I remember you saying PPP was something Joe had mentioned as a possible GORO-like stock. Do you know why he thought that exactly? Just curious myself.

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    1. he believes that management and non dilution/10Ks are important in evaluating a company's prospects....I think going in a doing DD on any miner is paramount...predicting their future is NOT a sure thing.... Joe brought many great miners to the blog but there were a few stinkers in there too......his biggies far outweighed any stinkers

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    2. They do have good leadership. The SLW tax issue isn't that big a deal either in my eyes but maybe i'm missing something. Sucks they have to sell the silver to them so cheap! TRX is another with supposed good leadership and potential but geez... it whipsaws like a sonofabitch.

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  24. I took this from Mike Keiger's, A lightening war for Liberty blog. I hope he doesn't mind.  I have to make two posts.

    Silver Plunges Below Marginal Cost: Commentary from a Retired Geologist
    Posted on May 15, 2012
    Last week as silver headed toward the $29/oz level, I received an excellent piece of commentary from a retired Canadian geologist that goes by the handle “Rhody.”  In it he states that at sub $30/oz silver is below cost, which I take to mean marginal cost.  For those not familiar with the commodity markets, marginal cost is the price that must be maintained to support new projects in order to keep supply growing to meet demand.  This cost includes capital investment in addition to all other costs as well as an implied return on investment.  I am not sure if Rhody included a return on capital in his $29/oz figure so it could be even higher.  In any event, he goes on to make some extraordinarily poignant statements on the overall macro backdrop in general.  So much so that I asked him if I could post it and he agreed.  Without any further ado…

    Hi Guys:
    Silver has now dropped below its total cost of production, which averages about $29.   Back in 2007, producers could produce silver at about $22 (which was above the spot price of the time as well) but at a 10% inflation rate, cost per ounce now, about 4 years later is going to be around $30.   Ignore mining companies that say they can produce silver at 5 or $6.   That’s just mining costs and ignores exploration, smelting, refining and shipping.   Back in 2007, if you looked at the top three miners, looked at their production and profits, you could calculate their total cost at $20-$24 back while the spot price was $18.    Essentially, silver has been produced below total costs since the 1930′s, which is why only 22% of silver mines subsist on silver alone and the other 78% survive on their other metal production with silver as a mere by-product.    No straight silver mine makes money, unless it is very, very high grade.

    So as of this morning, we are below cost in the spot market.    This is back to normal for silver.   Silver has re-joined the ranks of food, and forestry as industries which operate below total costs.   100,000 third world farmers committed suicide last year because of their horrible economic circumstances.   Meanwhile there were food riots in middle eastern cities of North Africa, and Syria because of the “high” food prices.    Does anyone else perceive the logical disconnect here?    The problem of course is fiat money, and pricing commodities with derivatives that steal from everyone.

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  25. To get back to the thread below, gold and the dollar have risen together until 6 months ago when gold was crushed in the derivative markets but the Dollar held up.    The firm Dollar is because Europe is under attack and with it it’s banks and currency.    So Europeans pull their money out of their banks and buy either Dollars or gold as a flight to quality.    The Establishment doesn’t like the gold buying so a very effective campaign of disinformation, derivative based suppression, and selling by Western central banks has sent the gold market down by 15% over the past 6 months.    This cheapened metal has gone east, never to return.

    Meanwhile the miners have been devastated and the Dollar has firmed.    This is the intent.    The World monetary system can be viewed as a huge tent, with a central pole (the U.S. Dollar), surrounded by secondary poles and tie downs.    The central pole has become unstable, and as it does, it is the secondary poles and the tie downs that rip out of the ground and fail first, eventually leading to the collapse of the central pole.    As the surrounding poles and tie downs (other fiat currencies) fail, their citizens flee to the remaining currencies that still survive, particularly the dollar, and its value rises because of the increased demand.    Some, but not a lot of this liquidity flows to gold and other tangibles causing price inflation.    So, in the end, gold and the Dollar will appear to rise together.    Well, gold has stopped rising, so we are not at the ‘end’ yet.    When we do reach the end, I expect a hyperinflationary event, which will drive gold in Dollars to levels which don’t bare mentioning, because in the end, no amount of dollars will buy an ounce of gold.   The precious metals have been purposely knocked down here.   People forget that although the metals are being slammed in the derivative markets, the decline has only been 15%, which is a moderate correction as these things go…..   This could be your last chance to buy politically cheapened ounces.   Don’t get upset, buy some more….

    The dollar is terminal, for reasons that would take too long to describe.    Let us just say that a credit-based fiat currency is eventually destroyed by the build up of debt that it produces.    The Dollar’s debt burden has now become so huge that the entire world cannot support the interest payments to keep it viable, even at interest rates barely above zero.    So, you have two choices: hold dollars as a storehouse of value for your savings, or gold/silver.    There are other things you could convert your savings into, but they are far more cumbersome than Dollars and precious metals, so pick one or the other.    One is about to disappear, so choose wisely.

    Rhody

    P.S.   Yesterday, the 30 year U.S. Treasury dropped to 2.83% and even the CAD went below 3%.    Would you lend a government money for 10 years at interest rates only one third the real inflation rate???!    What is going on here is a manufactured perception that we are in a deflation.    This will be the excuse that the central banks use to impose another round of Quantitative Easing, probably this summer.    QE bails out the banks at the expense of stealing your savings via inflation.

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    1. well written essay Tom and essentially confirms our observations......thanx for posting it

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  26. Interesting little David vs. Goliath battle going on in court...

    Goldman, Merrill E-Mails Show Naked Shorting, Filing Says

    http://tinyurl.com/bsrqr2t

    Overstock, based in Salt Lake City, claimed in its lawsuit that large portions of its stock were the subject of naked shorting, leading to instances in which the short position in its stock exceeded the entire supply of outstanding shares.

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  27. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/15_Turk_-_Expect_Tremendous_Chaos,_Europe_Deteriorating_Rapidly.html

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  28. http://www.zerohedge.com/news/what-happens-when-hedge-fund-hotel-explodes

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  29. Ouch.. Got to love that dog bite today. This is getting bumpy. Feds need cover for QE3 is my guess. Got to be looking at GBG at .50 HL 3.75 that's it eye on the ball..
    Matt

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  30. Hmm. Listened to the Jim Willie podcast and yes, Europe is imploding fast...what he says makes sense. Hope we don't go the way of Southern Europe, have to say that in spite of our tremendous problems we do have lots of natural resources, but then so does Argentina as he points out. :(. After listening am concerned about confiscation and remember my grandparents talking about the gov't. confiscating their gold...they were not big fans of gov't. No wonder.

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