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Eric Sprott Lashes Out Against The "Tyranny Of A Rigged Paper Monopoly Over Silver Price Discovery"

Tyler Durden's picture




 

From Eric Sprott and Andrew Morris

Caveat Venditor! (pdf)

The recent bear raid on silver has left many concerned about the sustainability of its historic run. Silver, being a relatively obscure market for most mainstream commentators, attracted much attention in the ensuing days following the May 1 takedown. Indeed, though the 30% drop in silver occurred over only four days, seemingly all eyes were on silver, with commentators who could’ve cared less about the silver market only a couple of months ago, suddenly tripping all over one another to make the bubble call. Silver bubble 2.0? Hardly. Anyone who has been fortunate to have been invested in silver over the past few years would unfortunately be used to such blatant takedowns. The Chinese don’t call it the "Devil’s Metal" for no good reason. With so much talk these days about the risks of investing in silver, we think that perhaps it may be timely for us to weigh in on the matter. The silver market is riskier than ever, but for reasons the vast majority of pedestrian commentators have failed to grasp.

There is no doubt that speculative dollars have been flowing into the silver market. We note that in April record trading volumes were registered in the SLV1, Comex futures2, LBMA transfers3, and the Shanghai Gold Exchange futures4. In fact, converting the average daily trading volume in the aforementioned silver instruments to the amount of ounces of silver they are supposed to represent, there were on average, over 1.1 billion ounces worth of silver traded every day in the month of April5. Truly a staggering number when contrasted against the actual amount of silver available for investment. To wit, the world will only supply about 979 million ounces this year from mine and recycling of scrap, of which it is estimated that 657 million ounces will be used up for non-investment purposes6. So in effect, that leaves roughly only 322 million ounces available this year for investment purposes. Converting to days (recall that at least 1.1 billion ounces traded each day) it leaves only about 1.3 million ounces per trading day of available supply. So, we are essentially trading the amount of physical silver actually available for investment, 891 times over each day! It really begs the question; just what are people trading in these markets?

Consider the largest and most prominent of those markets - the Comex, which we believe has owned an effective monopoly on silver price discovery for decades. In fact, the Comex churned over 800 million ounces of silver futures and options on average each day in April7. Indeed, notwithstanding the massive but very opaque over-the-counter silver derivatives market, trading on the Comex dwarfs both the physical and the other (known) paper silver markets, combined. Despite its dynamics being relatively complex and generally not well understood by most, the world’s financial community continues to view trading on the Comex as representative of the fundamentals for the physical silver markets. A market built on a high amount of leverage, both the buyers and sellers of Comex futures and options contracts are able to establish a position in "silver" with pennies on the dollar in collateral and even more astonishingly, no physical silver backing the contracts at all. The following charts illustrate just how unreal these markets have become.

Chart A:

Chart B:

In chart A, we compare the total open interest in Comex futures and option contracts to the actual amount of silver held in registered inventories able to be delivered against those contracts, since 2009. In chart B, with the steeply-sloping line shows the ratio of open interest (i.e. paper silver ounces) per ounce of physical silver held in inventory. We believe the historical trend of rising open interest and falling inventories deserves considerable attention from anyone attempting to understand the silver market. And though we do note that since October 2010 the trend of rising open interest appears to have abated, the inventories have been evaporating steadily and thus the ratio of the two measures has continued to trend higher. In fact, since 2009 the ratio of paper silver to physical silver has increased fourfold from approximately 8 times to almost 33 times, where it stands today.

What is the significance of this discord between paper and physical supply on the Comex? Recall, that over 800 million ounces traded each day in April on that market. Further, consider that as at the end of April there were only 33 million ounces of registered inventories to back up all of that paper trading. Just imagine if a mere 5% of all of that buying actually stood for delivery; the entire inventories would be more than wiped out. Yet despite the steady erosion of these already scant Comex inventories - a characteristic which would surely be interpreted as most bullish in other commodity markets - the price of silver has actually declined since April. We endeavour to provide a framework for understanding this phenomenon below.

Those who were following the developments in the silver market in April and May (we note that there were many who were) will likely recall that the CME Group raised both initial and maintenance margins five times within less than a two week span effectively raising the minimum amount of capital required to participate in the silver futures market by 84%8. This is significant due to the amount of leverage in the futures market and also due to the losses resulting from the precipitous selloff which began on Sunday, May 1st, when several thousand contracts were wantonly dumped onto the very thinly traded after-hours silver futures market causing the silver price to plunge 13% within the span of less than 15 minutes9.

For example, consider a hypothetical speculative trader who went long, say 200 July 2011 SI futures contracts on April 28th. At that time this trader would have been required to post an initial margin of $2.565 million for a position of one million ounces of "silver" and thus would have been levered 18.5 times10. Below we present what the trade blotter for this trader might look like over the next few days assuming he maintained his position.

Following the initial trade, each day the trader’s positions would be marked-to-market and any losses or gains would be applied against his account’s equity balance. Should the losses on the position bring the equity balance below the maintenance margin level, the trader would be required to deposit the additional capital required to bring the equity in the account back up to at least the initial margin requirement level.

While the margin increases alone would have forced a decision for this leveraged long to either post the additional margin or close enough positions to bring margin balances in line with substantially higher requirements, the trader was actually fighting a battle on two fronts. This is because in addition to the margin increases, the trader was also experiencing massive losses to his capital due to a rapidly falling silver price. So it is also important to consider the extent of losses to the trader’s equity following the precipitous drop which began on the evening of May 1st. In our scenario, before finding a bottom around May 17th, the cumulative losses would have amounted to over $14 million, or over five times the initial margin deposit of $2.565 million that was required to take on the position on April 28th. This meant that with margin call after margin call, the capital committed to the position ballooned almost 700% by the time the silver price finally bottomed in mid May. The significance of such a dramatic erosion of capital on a leveraged position cannot be overstated, particularly in the context of rising margin requirements. The CME Group would know this very well, and so it strikes us as particularly suspect that they would continue to raise margin rates in the face of such a sharp selloff. A selloff, we might add, which emanated from highly unusual trading activity on May 1st that, in our opinion, just reeks of manipulation. How else can one explain the dumping of several thousand SI futures contracts within the course of 15 minutes, in one of the most illiquid hours of trading, without seemingly any regard for price or a fundamental catalyst to speak of11? Though we will let the reader connect the dots as to what the intent of the CME Group and the seller’s of SI futures contracts on May 1st really was, we can certainly observe what effect these actions had on the market by looking further into the weekly Commitments of Traders (COT) reports published by the CFTC.

The COT provides us with the weekly open interest held by various categories of silver futures market participants, and thus gives us clues as to how these participants reacted in response to these margin increases and ensuing volatility. We present the following table showing net open interest for the various categories, converted into silver ounces, which we obtained from the COT report for selected dates.

First, note how in the three weeks following the margin hikes, the speculative12 net long position dropped from 212.7 million ounces to 170.1 million. This very clearly indicates that the speculative longs, when faced with rising margin requirements and losses to capital, did close out a substantial amount of their long positions. The commercials who were short those 212.7 million ounces appear to have been taking every opportunity to cover their own positions. Rather than shorting further into the ensuing weakness, the commercials covered approximately 42.6 million ounces in the three week period.

Another piece of information gleaned from the COT data is that despite what many commentators were hailing as a bubble caused by excessive speculation in the futures markets, the net speculative long positions had in fact been dropping over time. Even during the April run up preceding the five margin hikes, the net speculative long position actually decreased by 23%.

That commercial short position deserves further mention. What is unique and of interest to many silver market observers is not only the size of the short position on the Comex, which is dominated by those "commercials", but also the concentration of the short interest. We provide the percentage of the total open interest held by the four largest short sellers on a net basis in the table above. Note that the net position of the four largest equates to 29% of the total open interest as of May 17th. Further we would also note that the concentrated short interest of the big four, though still quite high has actually dropped substantially over the past year coinciding with the signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the resultant public discourse on position limits. Comments from CFTC commissioner Bart Chilton acknowledging the "repeated attempts to influence prices in the silver markets," and that, "violations to the Commodity Exchange Act (CEA) have taken place in silver markets and that any such violation of the law in this regard should be prosecuted," perhaps have also had an impact on the behavior of silver market participants.13 And though the CFTC’s investigation into the silver futures and options market remains open after three years, we remain hopeful that its findings will further serve the interests of the investing public who rightly expect a fair and transparent silver market void of manipulative forces.

Could the drop in open interest and the reduction of the concentration in the commercial short open interest be perceived as an indication that those top four short-sellers are positioning for the inevitable imposition of position limits rules? Perhaps, and if so, it would follow that likely the short sellers seized the opportunity to further reduce their "liabilities" by buying up contracts in early May at a 30% discount.

Let there be no mistake, we view the current setup as extremely bullish. In our view, whatever froth and excess was present in the paper markets has likely been shaken out in the recent selloff. The remaining longs do not seem willing to part with their silver at these prices. These are the strong hands with longer time horizons that are likely not overly leveraged or are willing and able to withstand substantial volatility. Moreover, perhaps the "game" on the paper silver markets which has been meticulously documented over decades by Ted Butler14 and others, will soon be coming to an end.

What is perhaps most important is that despite what has recently transpired in the paper silver markets, the robust demand fundamentals for silver have not changed in our view. For confirmation of this, look no further than the physical silver market (i.e. the real silver market) which is providing us with evidence almost daily of a sustained bull market for physical silver. The US Mint recently stated that, "demand for American Silver Eagle Coins remains at unprecedented high levels."15 Likewise for the Perth Mint16, the Austrian Mint17, and the Royal Canadian Mint18 as well. The Chinese, who were net exporters of silver only four years ago, imported 300% more silver in 2010 than 2009 and such large quantities of imports are expected to continue19. Last year, Indian silver imports increased nearly six-fold, and this year consumption is expected to rise nearly 43% according to the Bombay Bullion Association20. In Utah, silver (along with gold, of course) will now be accepted in weight value as legal tender21. According to Hugo Salinas-Price, a prominent Mexican billionaire, there is now "very strong support for the monetization of silver" in the Mexican congress22. We suspect the Europeans are likely to account for an increasing amount of silver purchases going forward as well. In fact, we just can’t imagine a better outlook for silver fundamentals. This really makes us question who could be short such massive quantities of silver and why? Particularly in those leveraged paper silver markets, where as we demonstrated, only a fraction of the outstanding notional ounces are actually available in physical quantity.

We have a very tough time understanding those bearish arguments against silver. We look at the real silver market, and based on the supply and demand data coming from the real, physical markets for silver, the fundamentals are only getting stronger. And yet there exists another silver market, which as we’ve shown, is not very connected to the physical realm at all. And though silver investors have for decades suffered the tyranny of a rigged paper monopoly over silver price discovery, it appears to us that the tides are turning. In the age of QE to infinity, investors are being more scrupulous with their capital and as such they are demanding physical silver in quantity. With more and more dollars flowing into the silver markets and a finite supply of physical to meet that demand, the theoretical losses for the paper silver short-sellers are near infinite. And with such a skewed and obvious risk/reward payoff vastly favoring the longs, we pose the following question. Who is most at risk in the silver markets: the buyers of a scarce and real asset that serves a growing multitude of purposes, or the sellers, who are short a quantity of silver which may very well not even be obtainable at anywhere near current prices? Let the Seller Beware!

 


1 Bloomberg
2 http://www.cmegroup.com/trading/metals/files/MoMU-April2011.pdf
3 http://www.lbma.org.uk/pages/index.cfm?page_id=51&title=clearing_-_most_recent_figures
4 http://www.sge.sh/publish/sgeen/sge_price/sge_price_daily/index.htm5 Source: Bloomberg, CME Group, LBMA, Shanghai Gold Exchange. Figure also includes trading of Comex silver options which had registered a record open interest in the month of April.
6 Andrew Kaip, David Haughton and John Hayes. "A New Paradigm for Silver: Demand is Expected to Outstrip Production Growth," BMO Capital Markets. April 3, 2011, p. 35. Note: "Non-investment" demand includes industrial, silverware, and photographic demand
7 http://www.cmegroup.com/trading/metals/files/MoMU-April2011.pdf
8 http://www.cmegroup.com/clearing/risk-management/files/SI_2009_to_may_2011.pdf
9 Bloomberg
10 A trader can always post more than the required amount of margin in his account.
11 http://www.cmegroup.com/clearing/risk-management/files/SI_2009_to_may_2011.pdf
12 For explanatory notes including definitions for each category of trader listed on the COT, please visit: http://www.cftc.gov/MarketReports/
CommitmentsofTraders/ExplanatoryNotes/index.htm

13 http://www.cftc.gov/pressroom/speechestestimony/chiltonstatement102610.html
14 For further information please visit http://www.butlerresearch.com/archive-free.asp
15 http://www.usmint.gov/pressroom/?action=press_release&id=1251
16 http://www.perthmintbullion.com/blog/blog/11-02-23/Sales_Record_For_2011_1oz_Silver_Kookaburra.aspx
17 http://www.bloomberg.com/news/2011-05-13/silver-boom-continues-at-austrian-mint-gold-demand-retreats-on-price.html
18 http://www.ft.com/intl/cms/s/0/7f316ac4-3acc-11e0-9c1a-00144feabdc0.html?ftcamp=rss#axzz1Nvybz2Te
19 Andrew Kaip, David Haughton and John Hayes. "A New Paradigm for Silver: Demand is Expected to Outstrip Production Growth," BMO Capital Markets. April 3, 2011, p. 17
20 http://www.ft.com/intl/cms/s/0/e64ca6b2-65e5-11e0-9d40-00144feab49a.html#axzz1OijZiJ4o
21 http://www.nytimes.com/2011/05/30/us/30gold.html
22 http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/5/18_Hugo_Salinas_Price.html

 

 

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Thu, 06/30/2011 - 10:26 | 1415381 frippy
frippy's picture

Eric the Read.

Thu, 06/30/2011 - 14:20 | 1415866 Libertarians fo...
Libertarians for Prosperity's picture

And yet there exists another silver market, which as we’ve shown, is not very connected to the physical realm at all...

Yes.  Correct. 

One only needs to look at Sprott's very own PSLV to see his "paper" units routinely trading at a ~10%-20% premium to NAV.

So, yes, there is quite a disconnect from paper to physical.

Errrr....wait....WTF? I thought the paper was suppose to be worth less than the physical...

LOL

Thu, 06/30/2011 - 16:23 | 1416773 LudwigVon
LudwigVon's picture

One only needs to look at Sprott's PSLV to see his units, where investors have long term security that they are redeemable for real Silver unlike every other instrument available, trading above the suppresed paper price, more inline with real world Silver prices.

So, yes, there is quite a disconnect from paper to physical.

Thu, 06/30/2011 - 16:24 | 1416776 anarchitect
anarchitect's picture

Cute but typically superficial. Some want paper, some what physical. Physical carries a premium, at least in storage fees, so some prefer paper. But many of them want to know that they can get physical if necessary. And of all the paper silver products, PSLV is the only one that can definitely be converted to physical in a crunch. Thus it carries a premium.

Sun, 07/03/2011 - 11:43 | 1422582 SRV - ES339
SRV - ES339's picture

Interesting view, but how to explain The Sprott Gold Trust... it's also one of the few that you can convert to physical, but it sells at a very low premium (< 2%).

Wed, 07/06/2011 - 01:20 | 1428772 akak
akak's picture

Perhaps it might have something to do with the fact that it is ~45 times easier to take possession of, and store, a given dollar figure in gold than it is in physical silver?

I'm not being facetious here ---- really, might that have something to do with it?

Wed, 07/06/2011 - 02:00 | 1428803 Libertarians fo...
Libertarians for Prosperity's picture

No.  That's just dumb, as always. 

The more you post, the more dumbdumb you get. 

LOL

 

Wed, 07/06/2011 - 02:48 | 1428827 akak
akak's picture

It would seem that with the apparent absence of tmosley from this forum, you have decided to haunt and harass me as the most obvious anti-troll defender of the truth here.  if so, bring it on, you dishonest and disingenuous bastard.

Thu, 06/30/2011 - 16:45 | 1416876 akak
akak's picture

Maybe one day, WilliamtheBastard/RedneckRepugnicant/TexasShitslinger, you might actually start being a useful and honest participant in this forum.

Maybe ---- but I strongly doubt it.

Thu, 06/30/2011 - 10:27 | 1415390 midtowng
midtowng's picture

No one wants our gold. The American public has no use for gold coins...at least that is what the latest Yahoo headline just said.

http://news.yahoo.com/blogs/lookout/1-billion-no-one-united-states-wants...

Thu, 06/30/2011 - 10:25 | 1415403 midtowng
midtowng's picture

Oh, this is rich. The article is about gold COLORED coins. Not actual gold, like the headline implies.

Thu, 06/30/2011 - 10:36 | 1415437 narapoiddyslexia
narapoiddyslexia's picture

And no one wants them because they're useless. I tried to carry them around. Forget it. How many one dollar bills does anyone carry around? Very few, is my bet. So why would anyone want to increase the weight in their pocket needlessly? Why didn't they have a $2 or a $5 coin? That might be worth carrying around, but dollars are worth so little its not worth the energy to carry the extra weight.

Thu, 06/30/2011 - 11:12 | 1415578 AgShaman
AgShaman's picture

I find them very useful....and order boxes of them direct from the us mint.

Andrew Jackson and TJ are my faves....Sacajawea's are also nice.

They come in handy when using them for tips....after buying a drink or a beer.

I carry rolls and rolls of them in my backpack when I'm surfing the mountain....the extra weight helps me go faster....then when I'm in the lodge having a bite to eat and a microbrew at lunchtime...I'll unload a bunch of 'em with the barkeep (those chicks dig em...and they trade their fiats for them everyday).

Many inquire as to why I go to the trouble using them. I tell them it's my secret way of "flipping the bird" to my fellow Americans....some ask me to elaborate...some don't.

To each his own. Perhaps they help the treasury more than the FED...and using them circulates "better money"....I just don't know.

I'll continue to get boxes of them....and throw them around at the grocers and at the ski resorts. When some knuckledragger passes you on the mtn...like you were standing still...maybe it was me (loaded down with $1 dinar coins in my backpack)

Yes...I junked you

Thu, 06/30/2011 - 11:50 | 1415701 urbanelf
urbanelf's picture

Discover card gives you 1% cash back.  Not all stores will take Discover card, but the US Mint will let you buy the $1 coins with Discover.

Can't wait 'til the Calvin Coolidge comes out!

Thu, 06/30/2011 - 14:31 | 1416330 narapoiddyslexia
narapoiddyslexia's picture

That's hilarious. Really. So, the Mint finally made a special copper alloy coin just for skiers. Do you suppose that was their intent? Is it possible they were hoping for a slightly broader market?

Fri, 07/01/2011 - 02:02 | 1418017 AgShaman
AgShaman's picture

"Clueless Wanker"....or predictable "Plunker"

I'm thinkin both....since it's obvious you lack the intellect to pick up on the lesson plan put forth. Too consumed with sand extraction from yer vagina I guess.

Carry on with your Rockefellian "I'm much too special to carry dollars" pomposity....

Continue to use "really" in a sentence by itself....someone here may be convinced you've got the brain stem to support your ego.

There....I junked you again

Thu, 06/30/2011 - 15:51 | 1416621 Banjo
Banjo's picture

Soon to be the equivalent of your new nickel.

Enjoy the inflation.

Thu, 06/30/2011 - 10:52 | 1415505 Rynak
Rynak's picture

ROFLMAO

Thu, 06/30/2011 - 12:56 | 1415969 hbjork1
hbjork1's picture

Dollar Tokens. 

Vending machines nation wide would have to be overhauled and then there is the risk of a $2.00 coin and another overhaul. 

Pennies cost more to make than they are worth.  Reminds me of a trip to Spain in 1970 (back when a few silver quarters and half dollars were still in circulation).  I felt sorry for the people nursing their small coins (their cent was ~ 0.1 US cent).  Now old Abe is in the same boat.  He could disappear and the public wouldn't care.  He is not worth bending over to pick up. 

It might be possible to issue a new coinage worth a factor of 10 more that could, through compositional changes be made to work in existing machines with relatively little modification.  To keep the public happy, John Wayne would go on the penny and Ronald Regan on the quarter.  But who would go on the dollar?  Marilyn Monroe would be my personal choice but the American public would probably prefer Elvis. 

Thu, 06/30/2011 - 11:06 | 1415543 Silver Shield
Silver Shield's picture

We get cash4gold, China gets Gold for Cash...

http://dont-tread-on.me/we-get-cash4gold-china-gets-gold-for-cash/

Eric does a tremndous job of providing a forensic accounting of the drive by silver shooting in May. Watch how quite the media and their minions are this time when we blow through $50 silver.

Read the "best article written in 10 years on silver"...

http://dont-tread-on.me/the-silver-bullet-and-the-silver-shield/

Thu, 06/30/2011 - 12:10 | 1415791 petaloka
petaloka's picture

This is not GOLD but gold dollar coins i.e. Sacajawea dollars and the like.

Thu, 06/30/2011 - 10:29 | 1415394 GetZeeGold
GetZeeGold's picture

 

Go Eric go!!!!

 

Thu, 06/30/2011 - 10:24 | 1415395 BrianOFlanagan
BrianOFlanagan's picture

this from the guys that claimed Ebay represented the best indicator of the "real" price of physical silver.

Caveat reader

Thu, 06/30/2011 - 10:33 | 1415417 Turd Ferguson
Turd Ferguson's picture

And they are correct in that assertion. Using the fraudulent, manipulative Comex as your basis only shows your naivete.

Thu, 06/30/2011 - 10:39 | 1415470 Idiot Savant
Idiot Savant's picture

I thought you were going to quit posting if your "$1600.00 gold by June" call didn't pan out.

Thu, 06/30/2011 - 10:52 | 1415507 MFL8240
MFL8240's picture

In a free country it would have.

Thu, 06/30/2011 - 12:16 | 1415805 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

I'm personally glad Turd's call failed to come true by a sliver thin margin.  That way, he is proved to have been correct in all practical respects, but I still get to listen to his detractors shriek in helpless fury that Turd is a fraud.

 

Thu, 06/30/2011 - 10:48 | 1415504 I_ate_the_crow
I_ate_the_crow's picture

BrianOFudgepacker

Thu, 06/30/2011 - 11:25 | 1415614 Bay of Pigs
Bay of Pigs's picture

ZH's self proclaimed gold and silver "expert" OFlanagan talking trash. COMEX is fine and the SEC and CFTC are doing their job. LOL.   

Now he's hammering Eric Sprott and calling Turd out in one fell swoop?

Ha ha.....nice work Brian. Just "trying to help" again?

 

Thu, 06/30/2011 - 10:55 | 1415517 tmosley
tmosley's picture

Uhhh, it did, idiot.  They have been delivering SLV paper since December.  Every month.  Now their silver is being drained out at unprecedented rates, and is at an all time low, and you want to say that everything is fine and dandy, just like it has been for decades?

Are you stupid or something?

Thu, 06/30/2011 - 11:07 | 1415558 BrianOFlanagan
BrianOFlanagan's picture

spoken like a true turdite who has earned a spot on the lemming leaderboard.  Good luck.

Thu, 06/30/2011 - 11:14 | 1415570 tmosley
tmosley's picture

Awww, did you try posting under a pseudonym, and get butthurt when no-one gave you "hat tips"?

Awww, poor baby.  And clearly you are a baby, as you are totally unable to back up your whiney accusations.

Thu, 06/30/2011 - 11:25 | 1415616 BrianOFlanagan
BrianOFlanagan's picture

Every post I make anywhere is done in my real name.  I do not hide behind pseudonyms.  I welcome debate and alternative points of view and that's why I sometimes post here.  Good luck to you.

 

Thu, 06/30/2011 - 11:28 | 1415635 Pladizow
Pladizow's picture

To everyone:

Do not argue with the trolls - what do you care what they think - just accumulate PMs and laugh all the way in the opposite direction of the bank.

Thu, 06/30/2011 - 12:50 | 1415936 lawrence1
lawrence1's picture

Right, dont even respond to trolls... just encourages them.

Fri, 07/01/2011 - 06:12 | 1418094 jmcadg
jmcadg's picture

From someone else who doesn't hide behind pseudonyms (ie these are my initials),

If you want to join the People's Front of JP Morgue, you have to really hate the SIlver Hat Brigade. 

Brian: I do! 

Oh yeah, how much? 
Brian: A lot! 

Right, you're in. 

YOU TOSSER.

Thu, 06/30/2011 - 11:17 | 1415596 DeadFred
DeadFred's picture

Other than for a few trolls this post is preaching to the choir. My one problem with it is the lack of emphasis on the fact that the short sellers <banks> own the government and therefore have a legal monopoly on the use of force. They can bust into your house if they hear a toilet flush but try doing the reverse and see what happens. When the comex goes under or is about to go under what will the government do to save their owners? Maybe open Fort Knox (assuming there anything there), maybe make it a crime to own PMs, whatever, but bet on the fact they will take steps to shore up the banks from this 'grave threat to our economy'.

Thu, 06/30/2011 - 11:01 | 1415528 narapoiddyslexia
narapoiddyslexia's picture

Faith in the fiat money system is coming to an end. The Chinese, Russians, Indians, Brazilians, and South Africans are taking concrete steps to execute trade on a non-dollar basis. China just concluded a trade treaty with Japan and South Korea. The repercussions of this will not play out in one day, or one week, or even one year. But it will be a revolution. Listen to this - http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/6/25_Jim_Rickards.html

Thu, 06/30/2011 - 13:41 | 1415544 Cognitive Dissonance
Cognitive Dissonance's picture

Strange comments coming from someone who, based upon the types of articles you comment on here at ZH for nearly two years, is obsessed with Gold. A quick review of the type of ZH articles you comment on shows me the word "Gold" in at least 50% of the titles.

And it even seems you have changed your tune a bit. Over a year ago you thought there might be an effort afoot to discredit Gold, but now you don't? So how far will "they" go to discredit Gold Brian? Call Gold bad names, but not try to suppress it? Talk but no actual action? What do you mean by "discredit" Brian?

So if you think people are trying to discredit PMs the only question Brian is how far do you think they will go to discredit PM. Your position is illogical. If they are willing to discredit they are willing to manipulate IF they have the power to do so. And they do.

 

by BrianOFlanagan
on Mon, 05/17/2010 - 21:44
#357440

I'm not sure I'd agree that it's an organized conspiracy, but point 1 makes sense - individuals that have profited from the corrupt financial system feel threatened by gold and thus make every effort to discredit it.  

Thu, 06/30/2011 - 18:52 | 1417213 RockyRacoon
RockyRacoon's picture

Heads up.   Both Gainsville and APMEX are having huge silver sales over the 4th weekend into Monday.   Might wanna hang on for some better deals if you are planning to buy.   These guys are on the pulse and must see some lower prices ahead.   It ain't coincidence.

http://www.gainesvillecoins.com/beat-the-clock.aspx?utm_source=newslette...

http://www.apmex.com/?utm_source=ConstantContact&utm_medium=email&utm_ca...

 

Thu, 06/30/2011 - 20:15 | 1417423 akak
akak's picture

Very decent of you to notify us of these sales, my good garbage raider!

Thu, 06/30/2011 - 11:01 | 1415533 OldTrooper
OldTrooper's picture

Couldn't agree more, Turd.

Thu, 06/30/2011 - 12:54 | 1415955 lawrence1
lawrence1's picture

Thanks Turd for your website, I read it often, although I have stopped trading anything paper. Keep it up.

Thu, 06/30/2011 - 16:53 | 1416902 RockyRacoon
RockyRacoon's picture

All hail the Turd!  Glad to see you here.   Looking forward to your input.

Thu, 06/30/2011 - 10:53 | 1415510 tmosley
tmosley's picture

Right, because markets are bullshit.  We all know that prices have to be set behind closed doors by central planners.  Anyone who thinks otherwise is "naive".

Thu, 06/30/2011 - 11:31 | 1415649 SRV - ES339
SRV - ES339's picture

ROTFLMFAO... so you think the Crimex is an indicator of the "real" price of silver?

Latest US mint Ag issue is at a 75% premium to the fantasy Crimex price, with purchase limits to try to keep some in stock 'til they can get more. Caveat reader indead... as in readers of BrianOFs thoughts on silver!

Thu, 06/30/2011 - 12:02 | 1415764 XenoFrog
XenoFrog's picture

In all fairness, that 75% premium was for the fancy proof silver eagles, not the regular ones you actually want to accumulate.

Thu, 06/30/2011 - 10:24 | 1415398 Greeny
Greeny's picture

Metals are just seasonably weak. Wait for end of the summer

and we'll see some parabolic moves.

Thu, 06/30/2011 - 11:37 | 1415655 Yardfarmer
Yardfarmer's picture

indeed. despite all of the endless verbiage, analysis, and speculation, when it comes down to it, the golden rule applies. in other words, he who owns the gold rules. when the parabolic moves in Au/Ag occur at the end of August (just like last year), the "price", along with that of crude will still be in a state of manipulation. it simply behooves the oligarchs and kleptocrats to further enrich themselves with a move upwards. they make theirs on the way up and the way down. there is no inherent "virtue", "justice", or "truth" involved here. everyone but a blind fool knows that you follow the money, and that just happens to be gold, silver and commodities as fiat paper burns in the bankster's hyper-inflationary blast furnaces.

Thu, 06/30/2011 - 13:14 | 1416056 toothpicker
toothpicker's picture

+1

Thu, 06/30/2011 - 10:29 | 1415402 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

buy silver

Thu, 06/30/2011 - 10:33 | 1415419 Turd Ferguson
Turd Ferguson's picture

Hi, Jimi. I hope you are well and enjoying your summer.

Thu, 06/30/2011 - 11:59 | 1415734 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Turd,

I am doing well, and I hope the same to you.  Your new blog looks great.  I will be joining http://www.tfmetalsreport.com/ soon.

Thu, 06/30/2011 - 10:28 | 1415414 Turd Ferguson
Turd Ferguson's picture

Every ZH reader should take the time to read and fully understand this excellent piece. Pay particular attention to the margin discussion as well as the table which summarizes the CoT.

 

Thu, 06/30/2011 - 10:39 | 1415473 coppertop
coppertop's picture

HeHe

Thu, 06/30/2011 - 11:29 | 1415620 oddjob
oddjob's picture

Ok, if you (TF) believe the Silver fundamentals, why do you try and worry people about a few dollars price drop that might happen??...Your cat scratch about a 70 cent price move in the POS is not constructive...needs to trade above 35.20?...wtf is that?


Buy it or not, getting influenced by price in an endless supply of fiat is for twerps.

Thu, 06/30/2011 - 12:11 | 1415749 slewie the pi-rat
slewie the pi-rat's picture

@TFerg #1415414

had you verified the figures in the COT "summary" chart @ the time of this recommendation to others?

that is a yes/no Q.

Thu, 06/30/2011 - 10:29 | 1415421 Stuart
Stuart's picture

Just ensure you buy physical or that you are not part of an unallocated pool.  Do that and this game is over very quickly with much higher silver prices.   

Thu, 06/30/2011 - 10:29 | 1415422 PaperBear
PaperBear's picture
Eric simply has to invest $1BN in acquiring the remaining 28MN oz of registered silver out of the COMEX for the Sprott Physical Silver Trust Fund and we will finally have proper price discovery.
Thu, 06/30/2011 - 10:39 | 1415445 mayhem_korner
mayhem_korner's picture

Nice.  Likewise, I could post my phone number and e-mail for anyone who wants price discovery on silver.  (Hint: it's trading at a "slight premium" to the Comex board price).

:D

Thu, 06/30/2011 - 10:59 | 1415537 bonddude
bonddude's picture

2 thumbs up. WAY UP !

Thu, 06/30/2011 - 12:29 | 1415876 Rynak
Rynak's picture

Question out of curiosity: Where do coin dealers ultimately get their supply from? Does it even go trough the comex at all?

Thu, 06/30/2011 - 13:18 | 1416064 mayhem_korner
mayhem_korner's picture

Estates, auctions, bought from sheeple, collections turned into business, etc. 

Thu, 06/30/2011 - 17:03 | 1416933 RockyRacoon
RockyRacoon's picture

You'd have to break that question into parts.   Where do dealers get bullion, where do they get numismatic coins, where do they get paper money, where do they get foreign collectible coins, etc.   All have different answers.   Dealers make money in all these areas.   If you mean bullion, mine comes mainly from other dealers who are selling the type of coins they don't specialize in, or have too much of some type on hand.   Most of my junk silver and common gold has come from ordinary people who are selling because they need the money.  Does that help?

COMEX?  Not only NO, but HELL NO.

The U. S. Mint is a source when there are pricing differentials.  I've given many heads-up on available items that have little or no spread to spot.

Thu, 06/30/2011 - 10:30 | 1415425 ivana
ivana's picture

wtf happened to CHF today?

Thu, 06/30/2011 - 10:35 | 1415447 Greeny
Greeny's picture

SNB intervention looks like.

Thu, 06/30/2011 - 10:37 | 1415439 schoolsout
schoolsout's picture

Makes too much sense to even matter...

Thu, 06/30/2011 - 10:40 | 1415441 Dr Hackenbush
Dr Hackenbush's picture

Wonderful Wizard of OZ (ounces) by Frank Baum 

Thu, 06/30/2011 - 10:38 | 1415442 Bansters-in-my-...
Bansters-in-my- feces's picture

Time for a Revolution boys and girls.... Or are you's going to tell your children and grand children that you's where too busy watching star search to take your country back from the Unelected bankers running your country.???

They will be very impressed with your courage.

The people need to band together and take back whats YOURS.

The right to Issue your own countries currency.

Not leave it in the hands of the DEVIL.

The FED is about as Federal as a corner hooker,and yous all allow this criminal organization to operate right in broad daylight.

In my eyes,you's are all cowards,and your grandfathers,and grandmothers should be VERY ASHAMED at what you's all allow to happen day in and day out,while your freedom,and your right to spend time with your family's is stolen bit by bit.

You's fight over"democrats" and Republicans",

while you's allow your country to be taken over by BANKERS,and Soldiers.

What a sick fucking world...........

have a great day and I hope you's get what you's desreve.

Thu, 06/30/2011 - 11:12 | 1415577 Cognitive Dissonance
Cognitive Dissonance's picture

And which non central bank controlled country do you live in?

Thu, 06/30/2011 - 20:59 | 1417536 floydian slip
floydian slip's picture

not to mention that it is 'great grandparents' fault for letting it happen in the first place

 

Dec 23 1913.

 

Thu, 06/30/2011 - 12:14 | 1415813 pods
pods's picture

Hey genius, it WAS our grandparents that put us on this position.

And many of us ARE revolting.

How many credit cards do you currently have?

Many of us have sworn off of bank credit, as it is the use of bank credit that enslaves us.

Starve the system and it collapses.  

Easy peazy mac and cheesy!

pods

Thu, 06/30/2011 - 16:39 | 1416850 BoNeSxxx
BoNeSxxx's picture

...many of us are revolting.

Ain't that the f*cking truth...

+1.99

Wed, 07/06/2011 - 01:12 | 1428767 FIAT_FixItAgainTony
FIAT_FixItAgainTony's picture

spot on pods.  i have one credit card - a gas card $300.00 limit.  zero bank accounts.  several cards about 4 years ago when i starting calling the bluffs and opted out.  one needs not a bank account when you live within your means without credit cards and credit accounts.

BTW - did you know a overpaid account becomes a debit account?  guaranteed no interest or fees.  even if late one month, as long as it's overpaid again.  fun fact i exercise with my gas card.  can't say i have NO credit, i have one and oh, by the way, they OWE ME.

Thu, 06/30/2011 - 10:35 | 1415449 WallStreetClass...
WallStreetClassAction.com's picture

boo hoo. Got squeezed? Must be "tyranny" and a "conspiracy". Get a life!

Thu, 06/30/2011 - 11:19 | 1415589 Cognitive Dissonance
Cognitive Dissonance's picture

So what is this you are promoting? A one page web site asking people to email you to register for updates?

http://wallstreetclassaction.com/

Interesting bait. Fishing for anyone in particular?

Fri, 07/01/2011 - 02:45 | 1418035 The Malamute Kid
The Malamute Kid's picture

 Get balls leukemia, do you work for the Ben Bernanke?

Thu, 06/30/2011 - 10:40 | 1415454 toady
toady's picture

The paper markets just plain suck.

Just a bunch of middle men skimming percentages.

Don't get your hopes up. They won't go away unless they are forced to go, and that won't happen. Too many of the 'right' people making too much money for that to happen.

Rant complete.

Thu, 06/30/2011 - 10:37 | 1415456 narapoiddyslexia
narapoiddyslexia's picture

I was going to respond to a bullshit Robotrader comment, and the comment he posted went "poof!" What happened?

Thu, 06/30/2011 - 10:45 | 1415481 Pladizow
Pladizow's picture

Me too, never had that happen before.

Perhaps the system overloaded by the sheer stupidity of his comments.

Thu, 06/30/2011 - 16:55 | 1416898 akak
akak's picture

After receiving more than 50 junks (not hard for RoboLemming's driveby trollish posts), a given comment is automatically sent into the black hole of troll Hell, never to be seen again.

Thu, 06/30/2011 - 10:47 | 1415487 lieutenantjohnchard
lieutenantjohnchard's picture

i saw it poof, too. the contract 1099 processor known as robottrader was going on and on about sprott whining. several of his posts have vanished recently.

Thu, 06/30/2011 - 11:18 | 1415597 RobotTrader
RobotTrader's picture

Can't blame you for being angry.

SLV and SLW have been utterly destroyed the last few months, while others have made vast fortunes riding the bull in consumer stocks.

Thu, 06/30/2011 - 11:30 | 1415625 lieutenantjohnchard
lieutenantjohnchard's picture

still not angry. i have investments only in physical bullion. i own not one paper security. fact is, you project your miserable apartment life in los angeles onto other folks more successful than yourself as witnessed by your pathetic post earlier this morning all but begging somebody - anybody - to invite you to the hamptons to score some mythical time with a russian blonde. so jealous, so envious.

Thu, 06/30/2011 - 12:11 | 1415799 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

SLW's former CEO said he would hedge silver at $50.  I guess we know why he is the former.  This was like a scratch on a chalkboard, and I sold half my holdings at $44, and the rest at $40.  The price action became lousy after he uttered those words, and even from a technical point, it was an easy sell.

You failed to understand hedging on another thread, and it was this slip that makes me believe you are not just playing around.  There have been times I have appreciated your comments, because you let us vent our frustration at the corrupt system, but when you fail to understand a simple thing like hedging, it makes me question your motives.

The price suppression is not hard to figure.  Central Banks have been net buyers since the PM pullback during the Fall of '08.  Considering that PM has not looked back since, even though equity pulled back in the Spring of '09, should show any proclaimed chartist what the dominant trend is. 

Paper "assets" like SLW and SLV are easily manipulable, but physical is a little different.  In order to manipulate physical the oil and FX markets must be managed accordingly, and that is no simple feat considering a) oil production has peaked, which has lowered supply (while demand stays up) and b) every fiat is created out of thin air at an unimaginable level.

Get the fuck off of this blog, go read a book, and come back when you understand simple metrics like hedging, supply/demand, and more than anything, do your self a favor and learn who has the power.  It does not lie in the breast of your Uncle Gorilla, because there is no heart there, it lies with we the people.  Get in or get out of the way.

Thu, 06/30/2011 - 13:00 | 1415977 lawrence1
lawrence1's picture

I would bet silver that if everyone ignored idiots like Roboshit he would go somewhere else.  Just dont respond, they dont merit ANY response.

Thu, 06/30/2011 - 11:16 | 1415590 RobotTrader
RobotTrader's picture

Looks like some people cannot handle reality.

The reality is that paper rules vs. physical.

That's why the biggest institutional funds are buying LULU, CMG, FOSL, etc. and not taking delivery of physical silver instead.

Nobody wants to battle Uncle Gorilla right now.

Why fight it?

If 1/10th of what Sprott says is true, some enterprising hedge fund with some guts would step up right now and clean out the COMEX.  Heh, the money required to buy all the remaining physical is probably 1/100th of the market cap of LULU.

But nobody is doing it because the trade is not really worthwhile, or Uncle Gorilla has severe penalties ready for anyone who attempts it.

Thu, 06/30/2011 - 11:25 | 1415615 lieutenantjohnchard
lieutenantjohnchard's picture

you are a coward. you have said repeatedly that you would not buy tzoo, lulu or jpm. and who are these people that can't handle reality? apparently you since for all your talk you don't follow your own advice. that's why many folks at zh see you for the fraud you are.

Thu, 06/30/2011 - 13:09 | 1416013 Raymond Reason
Raymond Reason's picture

"Reality" is the issue.  And will always ultimately rule. 

Thu, 06/30/2011 - 16:29 | 1416813 anarchitect
anarchitect's picture

"But nobody is doing it [cleaning out the COMEX] because...Uncle Gorilla has severe penalties ready for anyone who attempts it."

Ding! Ding! We have a winner!

Fri, 07/01/2011 - 02:37 | 1418027 The Malamute Kid
The Malamute Kid's picture

Are you Blythe Masters?

Thu, 06/30/2011 - 10:41 | 1415460 Greeny
Greeny's picture

"Time for a Revolution boys and girls"

Trust me, you don't want a f*king revolution.

Thu, 06/30/2011 - 10:53 | 1415523 tmosley
tmosley's picture

Greeny would rather suck Bernanke dick for the rest of his short, pitiful life.

Thu, 06/30/2011 - 11:16 | 1415575 Oh regional Indian
Oh regional Indian's picture

An inner revolution would be nice...

ORI

http://aadivaahan.wordpress.com/2011/06/30/desiderata/

Thu, 06/30/2011 - 10:43 | 1415471 Juice Box
Juice Box's picture

Eventually the music will stop and the chair grabbing begins.  You saw just a warm up back two months ago when silver ran to nearly 50.  Just wait till the real scramble begins.

Thu, 06/30/2011 - 13:33 | 1416116 GottaBKiddn
GottaBKiddn's picture

 

Musical chairs exactly.

While I appreciate immensely the work Eric Sprott, and his vulnerabilities in the industry, I can't help saying that the one and most important word missing from this article, is CORRUPTION. Ted Butler, Harvey Organ, and so many others are just wasting our time and money by avoiding saying what is overwhelmingly blatant. So, those who play the paper game deserve what they're going to get. It is simply naive to think that the market, any market, is anything other than a construct of manipulators.

 

 

Thu, 06/30/2011 - 10:41 | 1415484 camoes
camoes's picture

Why there aren't options on PSLV, papa needs some levered physical...

Thu, 06/30/2011 - 10:52 | 1415495 Greeny
Greeny's picture

Not all stocks/ETF's have Options, sometimes, even if they do have options, you don't want to trade them with such crazy spreads between Bid and Ask and no Volume.

Perhaps you can buy PSLV and protect yourself via SLV options ;)

Thu, 06/30/2011 - 10:52 | 1415520 Rusty Shorts
Rusty Shorts's picture

"levered physical" ..nevermind, thought your handle was cameltoe...

Thu, 06/30/2011 - 12:20 | 1415830 Putty
Putty's picture

Buy CEF instead, it's under NAV instead of the 17% premium of PSLV.  They are both "Canadian" and fully allocated in physical, however, CEF is approximately half silver/half gold.  I like both metals.

Thu, 06/30/2011 - 10:47 | 1415502 MFL8240
MFL8240's picture

The entire finacial markets are rigged in the US and you are better off trading out of this country.

Thu, 06/30/2011 - 10:54 | 1415513 yabyum
yabyum's picture

I like Sprott, even made money on pslv. I have moved in to the phyzz realm now, US Junk silver, every one knows it evry one loves it. Real money, in your hand.

Thu, 06/30/2011 - 10:56 | 1415519 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

I don't know what all of the fuss is abount, patience is all that is required.  I truly appreciate the buying opportunities that have been gift wrapped and delivered by the manipulating banksters.  The physical realities will eventually over run these fools and it will be a pleasure to watch.  Accumulate physical!

Thu, 06/30/2011 - 11:08 | 1415561 jomama
jomama's picture

i know, right?  PMs holders still hold the trump card.  no matter what manipulation is thrown at us.

Thu, 06/30/2011 - 12:10 | 1415789 DoChenRollingBearing
DoChenRollingBearing's picture

Au_Ag, jomama

Absolutely right.  We hold, we win.  Patience is the key to victory in buying and holding real physical PMs.

+ $1505

Thu, 06/30/2011 - 18:41 | 1417182 RockyRacoon
RockyRacoon's picture

Battle o' the tubes!  I'm in...

My candidate for the most mystical, the destroyer of worlds:

http://www.youtube.com/watch?v=VOfqNRHtL0I&feature=pyv&ad=4454061129&kw=...

Thu, 06/30/2011 - 11:09 | 1415562 Raymond Reason
Raymond Reason's picture

The whole futures market is bullshit.  Buying on margin?  It's essentially a deposit, its not a sale.  What if real estate appraisers used deposits instead of sales for their comparables, to arrive at fair market value?  A small group of neighbors could manipulate the appraised value of their homes up or down quite easily.  Of course the CBs and state govts would never allow houses to be valued by deposits. 

Thu, 06/30/2011 - 11:13 | 1415581 tmosley
tmosley's picture

That is an EXCELLENT observation.  It's like a CD.  Hope your bank doesn't go under before it matures, because there is no FDIC to bail you out.

Thu, 06/30/2011 - 11:45 | 1415695 Augustus
Augustus's picture

If the Comex silver prices are not related to the "real" physical market,

Why is there still inventory available for delivery from Comex?

If coffee was selling for $3 in all the grocery stores and one ran a special at $2 the shelves would be bare in an hour.  The Comex shelves are pretty well stocked.  How can that be if silver is trading for, and actually really worth, $50/oz?

 

 

Thu, 06/30/2011 - 13:12 | 1415934 Reptil
Reptil's picture

Good question IMO. I think because the custodians of the funds want to keep the illusion of a viable paper market going? If the Comex defaults, then they lose their money game? "The "big investor" coming in and buying up all the silver there" story? I think you'd have to have a death wish to do that. And why should you? Just get what you can, without draining the Comex, without upsetting the market.

It's also in the interest of those accumulating silver; they're paying discount prices. Despite what Sprott says now, he bought the fund's silver for a good price. He demonstrates the game can't last forever. I don't think that despite his, and other people's warnings, the JP Morgan and Mellon Bank are listening. Probably because neither can be held responsible for inventory. ;-P

It's perfectly ok, until it isn't. From what I've read here and seen elsewhere, that's the going business model.

Thu, 06/30/2011 - 12:56 | 1415966 Raymond Reason
Raymond Reason's picture

If APMEX offered silver to $20 today, their shelves would be empty. 

The $3 that all grocery stores are currently selling for is determined by the coffee futures. 

Thu, 06/30/2011 - 11:54 | 1415716 americhinaman
americhinaman's picture

why would it be surprising that the daily turnover is many multiples of the daily production? that would be analogous to saying that it's suprising that any given stock's volume is multiples of it's shares outstanding / 365 (or better yet sh. out / days since listing). it's silly. anything that's easily traded on an exchange and is a sought-after mechanism to hold or grow wealth should absolutely trade in many multiples of the "daily production", whether it be silver or stocks.

another way to look at it would be, perhaps, number of ounces of silver traded per day per person who owns some silver. it's probably less than an ounce a day. would you feel it's odd that 1.1 billion ounces / ~6.6 billion people, i.e. 0.167 ounces per person are traded? i would say that's an awfully low number, for a commodity that has industrial usage (and therefore corporate hedging required) and doubles as a currency or medium of exchange (so lots of people will be trading USD or other currencies for silver).

Thu, 06/30/2011 - 11:51 | 1415719 americhinaman
americhinaman's picture

why would it be surprising that the daily turnover is many multiples of the daily production? that would be analogous to saying that it's suprising that any given stock's volume is multiples of it's shares outstanding / 365 (or better yet sh. out / days since listing). it's silly. anything that's easily traded on an exchange and is a sought-after mechanism to hold or grow wealth should absolutely trade in many multiples of the "daily production", whether it be silver or stocks.

another way to look at it would be, perhaps, number of ounces of silver traded per day per person who owns some silver. it's probably less than an ounce a day. would you feel it's odd that 1.1 billion ounces / ~6.6 billion people, i.e. 0.167 ounces per person are traded? i would say that's an awfully low number, for a commodity that has industrial usage (and therefore corporate hedging required) and doubles as a currency or medium of exchange (so lots of people will be trading USD or other currencies for silver).

Thu, 06/30/2011 - 12:02 | 1415726 Jambo Mambo Bill
Jambo Mambo Bill's picture

At last some light in the end of the tunnel ! GOOD LORD help us !

Thu, 06/30/2011 - 12:00 | 1415757 Silverhog
Silverhog's picture

When the Feds say they want to rid the market of speculation in commodities. What's the sole purpose of SLV? If you cannot trade it in for physical, then its only use is gambling. Today, too many people want to make lots of money with the least amount of work. If you want to own Silver, make the effort and buy the f***ing real thing and store it somewhere.      

Thu, 06/30/2011 - 12:00 | 1415759 SpiritBlade
SpiritBlade's picture

Great points. In synopsis, we all have the corrupt money changers to thank for keeping silver prices low when they should be astronomical. This is a terrific blessing for the elite, but also for those of us buying physical. Also terrific is that the game is up and our net worth is set to explode with silver pricing coming in alignment with physical reality.

 

Thanks guys

 

III

Thu, 06/30/2011 - 12:05 | 1415763 the rookie cynic
the rookie cynic's picture

"And though silver investors have for decades suffered the tyranny of a rigged paper monopoly over silver price discovery" says Sprott.

I challenge ZH reader to name an asset class that has NOT suffered under the tyranny of a rigged paper monopoly in recent history.

Any takers?

Thu, 06/30/2011 - 12:09 | 1415775 Jambo Mambo Bill
Jambo Mambo Bill's picture

But not in the idiotic levels of silver babe. GOLD $1500 - SILVER $32   ???

Thu, 06/30/2011 - 12:12 | 1415779 Jambo Mambo Bill
Jambo Mambo Bill's picture

Siver babe.

Thu, 06/30/2011 - 12:07 | 1415781 Jambo Mambo Bill
Jambo Mambo Bill's picture

Oppss

Thu, 06/30/2011 - 12:22 | 1415839 mick_richfield
mick_richfield's picture

US Treasury debt ?

Thu, 06/30/2011 - 12:11 | 1415798 Temporalist
Temporalist's picture

Jim Grant on Bloomberg again...twice in two weeks.  "Gold is mirror image of the world's faith in Bernanke."

Thu, 06/30/2011 - 12:23 | 1415817 firefighter302
firefighter302's picture

LOL.. all those who have been bashing silver from $12 an ounce to $35+ an ounce are all here.  Same old tune from them.

To each his own, and that is exactly how I like it. We succeed or fail based on our decisions. 

Some folks just don't seem to have the sense to change their perspective when they are wrong.   

Thu, 06/30/2011 - 12:49 | 1415932 slewie the pi-rat
slewie the pi-rat's picture

i know.  as the banksters try to screw us and the rich get eternally richer, we po' folk just hafta suffer along w/ our little silver stashes, as best we can...

the bashing was fabulous, there for a while wasn't it, tho?

we'll never see those prices, again, most likely...

...poor us...

Fri, 07/01/2011 - 02:41 | 1418030 The Malamute Kid
The Malamute Kid's picture

Stay the course, Silver prices going much higher than $50/oz in the next 6 months! {bookmark this}

Thu, 06/30/2011 - 12:32 | 1415882 Temporalist
Temporalist's picture

Here is an article on Gold and Greece:

Selling gold teeth to make ends meet in Greece

"That is one side of the coin. On the other, many wealthy Greeks, worried by the political paralysis gripping their country, are pulling money out of the bank and buying gold, regarded as the ultimate safe haven in times of uncertainty."

""The people with money are no longer buying land, they are buying gold and silver," said Verykokaki."

http://www.cnbc.com/id/43592585

 

Thu, 06/30/2011 - 12:46 | 1415919 Bansters-in-my-...
Bansters-in-my- feces's picture

Greeny would sooner suck the cum out of the Bernankes cock,while a Rothschild fucked him hard up the ass.

Fuck you Greeny.

YOU do not know what I want.!

Thu, 06/30/2011 - 12:47 | 1415941 savagegoose
savagegoose's picture

my only problem is I will run out of cash before they run out of ink and paper.

Thu, 06/30/2011 - 12:56 | 1415967 terryfuckwit
terryfuckwit's picture

siver good but be prepared for a long game and hopefully plenty buying oppotunities..along the long and winding road...and my potatoes are doing great ...

Thu, 06/30/2011 - 12:57 | 1415982 FeralSerf
FeralSerf's picture

Russia Says IMF Chief Jailed For Discovering All US Gold Is GoneRussia Says IMF Chief Jailed For Discovering All US Gold Is Gone

http://www.eutimes.net/2011/05/russia-says-imf-chief-jailed-for-discover...

A more believable story than the one floated by the MSM and PTB.

 

Thu, 06/30/2011 - 12:59 | 1415988 Spartaguy
Spartaguy's picture

Come come my friends..if this hasn't been discussed in detail on Bloomberg or CNBC then it's probably not that big a deal.

muahahahahah!!

 

http://www.aintmymedia.com/

Thu, 06/30/2011 - 13:02 | 1415999 lawrence1
lawrence1's picture

Hmmm .... maybe time to trade some gold for more silver?  Traded silver for gold with silver in mid 40s.  Anyone else thinking this way??

 

Thu, 06/30/2011 - 13:30 | 1416119 youngman
youngman's picture

Today is just end of quarter dressing...next week we go up ..big I think the way bonds are dropping..

Thu, 06/30/2011 - 13:59 | 1416215 HungrySeagull
HungrySeagull's picture

Paper paper paper.

AUGH!

Just Buy Physical or NOT at all. After July 15th, this crap will stop and then maybe we understand where the pricing should be.

*Disclaimer... Putting money into PM's where my mouth is.

 

A Poster said a billion dollars or so of purchasing today will enable true price discovery. Let's Mr Money Bags make it happen. Instant profit me thinks.

Thu, 06/30/2011 - 14:09 | 1416262 bill1102inf
bill1102inf's picture

The only direction silver is headed, is down.  You'll see.

Thu, 06/30/2011 - 15:55 | 1416645 mark mchugh
mark mchugh's picture

Been hearing that for 11 years now....

 

Silver +600%

Stocks 0

 

 

Thu, 06/30/2011 - 16:03 | 1416698 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

+1 LOL

Thu, 06/30/2011 - 16:46 | 1416842 Al Gorerhythm
Al Gorerhythm's picture

This post requires an indepth response, punctuated with valuable insights and research:

The only direction that silver is headed is up. You'll see.

 

 

Thu, 06/30/2011 - 16:43 | 1416863 dexter_morgan
dexter_morgan's picture

Fascinating....please explain.

Thu, 06/30/2011 - 23:28 | 1417832 Mediocritas
Mediocritas's picture

Silver and gold are operating as fractional reserve systems. The way to break them is simply to "run the bank", aka, go physical.

Unlike the USD fractional reserve system, there is no central bank that can manufacture fresh reserves out of thin air for the gold and silver fractional reserve system, meaning that prices head to infinity once reserves are depleted by a run....until Executive Order 6102 gets trotted out.

There should be little sympathy for banks here. This is the logical consequence of running a fractional reserve system supported by a physically constrained entity such as a rare metal. You'd think they would have learned this by now...it's why they went 100% paper in the first place.

Fri, 07/01/2011 - 09:53 | 1418539 Vinny
Vinny's picture

Interesting timing of this post, same as with the Goldman predicting a surge in gold prices.  Shortly after both postings, the price of silver and gold dropped like a rock. These analysts are probably no better than the astrologers and tea leaf reading enthusiasts who were recently featured on CNN.

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