Another Turd in the Punch Bowl

Bob Moriarty
Archives
Nov 11, 2019

People who throw tennis rackets are a lot like wife beaters and liars. No one does it just once. So if ever you are on a court and one of the players throws their racket, just gather up your things and leave because as sure as god makes little green apples it will happen again and again until it gets boring. Liars and wife beaters do the same.

My job requires that I read a lot. I don’t know how many articles I read a day but it’s a lot. I have to keep track of the idiots just in case they ever get anything right so I read a higher percentage of stuff written by the fools than I do reading things written by those I admire. I rarely feel a need to respond to pieces written by the clueless because frankly there are so many of them.

Most financial writers are like TV preachers and politicians, they profit by feeding people’s fantasies. Politicians soon learn that the chances of an honest politician ever being elected to any office are near zero. Few financial writers actually know enough about what they are writing about to ever say something that their readers could profit from so they feed their following the same regurgitated bullshit that all the other frauds are spewing out.

But last week I came across an article that registered a Category 5 on the “gag me with a spoon index.” It had so many lies and so much just plain utter stupidity in it that I felt it was worth responding to. I was just astonished on two counts. One that some damn fool wrote it in the first place and second that other so called “gold” sites chose to repost something that on its face was so absurd.

The Turd wrote it. I didn’t make up the name. Neither Johnny Cash nor the Turd’s mother came up with the moniker. The Turd named himself, the Turd, and even goes so far as to call the two or three people following his nonsense, Turdites.

Eric Sprott was sufficiently impressed with the Turd that he does interviews with him and allows him to advertise his ignorance under the SprottMoney website. I like Eric but frankly that seems pretty incredible to me.

Now you need to understand before I start attacking his opinions and his total lack of logic, the Turd is a stone cold liar. If you paid attention to the first paragraph of this piece, when you identify someone as a liar, they don’t lie once, they lie again and again just like people throwing their tennis racket.

Along with similar maturity sub-teens, the Turd went on Twitter to claim, “Wait. What? Futures market manipulation and spoofing? I thought Weiner/Christian/Armstrong/Moriarty/Norcini/Casey/Gilbert all assured us the markets were sacrosanct, free and fair.”

I am the only person I know on the web writing about financial matters that keeps every single article I have ever written or interview I have done linked on my site. Anyone is free to peruse through hundreds or thousands of pieces and three different books I’ve written. It’s all there, the good, the bad and the ugly.

I have never even hinted that I believe markets are sacrosanct, free and fair. I cannot speak for every word written or spoken by the remainder of the writers the Turd attacked but I have never heard or read anything that suggests any of them believe markets are free and fair.

All financial markets are manipulated all of the time by everyone involved. If you can’t handle that, don’t invest. Just about everyone is out to screw you and take your money. Live with it or don’t play in their sandbox.

Over a year ago I offered the Turd the opportunity to respond and either give me an example of where I suggested what he claimed or accept that he is a liar and was lying when he put out his asinine twitter. Naturally he didn’t come up with even a single example perhaps because there are none.

The Turd, the stone cold liar, wrote a recent piece about commodities, remarkable in that all he managed to accomplish was to use a lot of words exposing that not only is he a liar, he also knows sweet fuck all about commodities.

All good articles should have a title that grabs the attention of the reader. I do it and so did the Turd. He called his piece, The Continuing COMEX Fraud. That’s the sort of title that both Turdites just love. They want to assume that Comex is part of a continuing fraud. After all those playing that one string banjo they call a Manipulation/Conspiracy all want to believe Comex is fraudulent. Alas, the Turd never actually gets around to demonstrating any facts showing fraud on the part of the Comex, he just replays the old, tired clichés about “CRIMEX” none of which has any basis in fact.

Comex is an exchange. They are no more or no less fraud than your local swap market. They allow certain commodities to be traded under rules that everyone is aware of. And if you think they are a fraud, you owe it to yourself to not deal in the commodities they trade.

In his first sentence the Turd starts demonstrating his ignorance of even the basics of commodities trading. He begins by mumbling, “the extreme level of futures contracts issued by the market-making banks.”

But banks generally do not issue futures contracts. Some banks might act as representatives of purchasers of commodities such as jewelry makers or producers such as mining companies. Those who consume or produce commodities are correctly called “Commercials.”

If hedge funds and banks are speculating on their own behalf, they are correctly called “Speculators.” You can have large speculators and you can have small speculators but banks participating on their own behalf are never commercials. Banks do not and never have issued futures contracts.

It’s vital in commodities to understand the role of participants. Producers of commodities such as mining companies are natural sellers as prices increase. Consumers of commodities such as manufactures are natural buyers as prices decrease. It’s common for the fools similar to the Turd to believe that as Commercials get shorter and shorter as prices increase that they are under increasing pressure to buy to cover. That just goes to show his total lack of understanding. Commercials get stronger as prices go up or down because there are both natural sellers, and natural buyers.

The extreme levels of commodities such as gold and silver lately are 100% caused by speculators. Think of playing Blackjack in Lost Wages. The dealers (ie the commercials) do not determine the level of activity. You can walk into any casino in Vegas at ten in the morning and watch a bunch of bored dealers chatting and waiting for a bettor (the speculators) to show up. The speculators open contracts, all the commercials do is cover the contract by taking the opposite position. When speculators are bullish the open interest goes up. When they are bearish the open interest goes down. Bullion banks or banks of any sort do not determine either the trading level or open interest.

Speculators are members of the herd. They are most bullish at tops and most bearish at bottoms. They are the weak hands. You don’t need to know anything about commodities if you understand human behavior. And the interesting thing about commodities is that the commercials get stronger and stronger as extremes are reached and speculators get weaker and weaker as extremes are reached.

Probably the dumbest comment I have ever heard from someone writing about commodities appears lower in the piece. “So, if the Banks sell contracts with no metal backing, and those contracts are purchased by speculators with no end demand for physical, then what does the trading of these contracts have to do with the actual value of real, physical metal? The answer: NOTHING.

The Turd wants you to believe, in fact demands you believe, that the banks issue new contracts. They don’t. Speculators are solely responsible for open interest increasing. Commercials care about open interest about as much as dealers in Blackjack cause people to bet. They don’t.

If you are going to deal in derivatives or commodities on a US Exchange, you have to pass an exam called the Series 3 exam. In the mid-1980s I was a commodity broker. I took and passed the Series 3 and I suppose I could still apply for a job dealing in derivatives or commodities.

Clearly the Turd never took the exam or never passed it. There is no legal, moral or even logical reason for the seller of a commodity to have the ability to deliver or the buyer of a commodity have the ability to take delivery. Assuming there is a connection is a common mistake among the clueless who never traded commodities.

And I can prove it.

How many shares are ever delivered by the sellers of say, an S&P futures contract?

ZERO.

The futures contracts for the S&P or the Dow are entirely fictional. There are no shares ever delivered or demanded because the purpose of the contracts is not to exchange commodities. Commodity exchanges have existed for 5,000 years not primarily to exchange commodities but to serve to determine the correct price at any given time.

Consumers need to buy at the lowest prices, manufacturers or producers want to sell at the highest price and speculators provide the liquidity. It is not necessary for the commodity to even exist to determine the correct price.

I’ve read a lot of silly articles about trading in gold and silver in the last twenty years but this piece of rubbish has no substance and only serves to display the ignorance of the writer. It’s like someone talking about how to fly the SR-71 at Mach four who has never taken a single flight in a Cessna-150. It’s ok for him to pretend he’s an expert but any experienced commodity trader will immediately see all the flaws in his logic.

If Eric Sprott has any sense, he will demand the Turd take and pass the Series 3 exam. It doesn’t require months of toil and study, it could be complete in a week but this level of trash is absurd. The Turd needs to do the basic homework that any beginning broker would complete.

This is embarrassing for the entire industry. If the Turd wants to believe in Short Selling (that doesn’t exist) or a Comex Default (that can’t happen) or a Commercial Signal Failure (they made up the term) or fraud in Comex futures, he should be taking baby steps before thinking he’s the world’s greatest expert in commodities. Clearly he is not.

Two kinds of information exist in the financial world. There is signal that you can get trading information from that you can make money with and there is noise. It might be interesting but there is nothing in it that would ever make any money for you. If you notice in all of the writing from the Turd or Gata in general or Ted Butler or any of the other Trailer Trash, it’s all noise and never signal.

No one has ever made even a single cent trading on the information they provide because they don’t understand the markets well enough to call a top or a bottom or know what happens when a correction takes place. If you want to be outraged, feel free to listen to the noise from the gang of fools but you will never make any money trading. Their writing is all click bait, not advice.

And if the Turd would like to pull up any piece I have ever written talking about fair and free markets, I would be happy to post anything he would like to submit showing that without any comment on my part. Alternatively we can accept that he’s still a liar.

###

Bob Moriarty
President: 321gold
Archives

321gold Ltd