Eric Sprott's Double Barreled Silver Issue

Tyler Durden's picture

Just released from Eric Sprott, Sprott Asset Management

Regular Markets at a Glance readers may have wondered why we remained so silent on the subject of silver over the last several months. Considering the significant exposure we have to silver as a firm, we can assure you that it wasn’t for lack of desire to share our views, but rather due to strict solicitation restrictions imposed on us by the cross-border listing of Sprott Physical Silver Trust (PSLV) this past October. It therefore gives us great pleasure to finally share our views on silver with you.

We have included two separate articles in this issue of Markets at a Glance: the first was written back in June 2010, and contains the information we used in the prospectus for the PSLV. The second is an update article written this past month that discusses new developments in the silver market and confirms our views on the metal. We urge you to read them both in order to understand our investment thesis for silver, and we hope they compel you to take a much closer look at silver as a long-term investment. Silver’s dramatic rise over the last two months is no fluke - it’s the result of a compelling supply/demand dynamic within a unique market structure. We hope the following articles convey our enthusiasm for "the other shiny metal" as an exceptional investment opportunity.

The Silver Lining, (June 2010)

By: Eric Sprott & David Franklin

No matter how complex our financial system becomes, the economic axiom of supply and demand will still apply. If the demand for an asset outstrips supply, the price of that asset will appreciate. The challenge in finding supply and demand imbalances in today’s market often lies in judging the quality of market data available – it frequently isn’t even close to being accurate. If the numbers don’t show the imbalances, it’s tough for investors to determine if the market price accurately reflects the market dynamics. Nowhere is this more prevalent than in the market for silver.

While gold dominates the headlines, the silver market actually enjoys a superior fundamental supply/demand story than that for gold, although you’d never know it based on the silver demand statistics from the major reporting services. As students of the precious metals markets we monitor the numerous metals reporting services very closely. According to those services, the silver market has enjoyed a stable supply/demand balance for almost ten years now. If that’s the case, why has the price of silver appreciated from $5 to $19/oz over that same time period? Is the reporting services’ data on the silver market truly reflective of silver’s underlying fundamentals?

Although there are several reporting services for silver market information, GFMS Ltd. and The Silver Institute are the most often quoted sources for silver market data. While they provide statistics for both silver supply and demand, it is their neglect of the "investment" demand category that we find problematic. GFMS and The Silver Institute use a category called "implied net investment" to capture the demand for physical silver from institutional and retail investors. The definition for "net investment" as defined by GFMS is "the residual from combining all other GFMS data on silver supply/demand…As such, it captures the net physical impact of all transactions not covered by the other supply/demand variables."1 In other words, it is not an observed figure. GFMS’s "implied net investment" number doesn’t include any observable demand for silver by ETF’s and other reporting entities such as hedge funds - it is merely a plug used to balance the supply data for GFMS’s and the Silver Institute’s reporting purposes.2 As we delved deeper into the silver market, this realization prompted us to calculate our own investment demand statistic.

We present our findings in Table A. While GFMS and The Silver Institute use an implied number, we calculated a real investment demand number using a handful of ETF’s and two other large private investors, one of which is our own firm. Our demand metric is by no means complete or exhaustive - we only used seven sources of reported investment demand, and yet from our informal and incomplete survey we found that GFMS and The Silver Institute had underreported silver investment demand by at least 225 million ounces! This shortfall doesn’t consider any other investors that may have bought silver over the past year, so real demand for silver could be multiple times higher.

Given its seemingly evident market imbalances, you might wonder why silver hasn’t performed better over the last year. The answer, we believe, lies in the way silver is priced. The silver spot price is dictated by paper contracts that trade on the COMEX exchange in New York. Paper contracts can be purchased "long" or sold "short". If more participants sell "short" than purchase "long", the paper market price for silver will decline. Often these contracts have little to no relationship with actual physical silver, and yet they are the most influential contract in determining silver’s physical spot price. Go figure.

In studying the silver market we owe a great debt to the work of silver analyst, Ted Butler. Mr. Butler has been writing about the silver market for fifteen years and has done much to inform investors about the reality of silver’s physical fundamentals. Butler provides some insight into the "short" positions that exist in silver today, highlighting the fact that the eight largest silver traders currently hold a net short position of over 66,000 contracts, representing more than 330 million ounces of silver.11 This means that the eight largest COMEX traders are net short the equivalent of 48.5% of the world’s total annual silver mine production of 680.9 million ounces. None of these traders are in the silver business by the way – they’re all financial institutions. In addition, the COMEX silver short position held by the eight largest traders on May 3, 2010, represented 33% of total world silver bullion inventory, estimated by Butler to be approximately one billion ounces. There is no real comparison with gold, as the 24.5 million ounce concentrated net short position held by the eight largest traders represents a mere 1.2% of the 2 billion+ ounces of world gold bullion inventory as reported by the World Gold Council.12 So in comparison to total world bullion inventories, the concentrated short position in silver is 27 times larger than that for gold. In every comparison possible, the short position in COMEX silver contracts is off the charts, and if you think the short positions sound potentially disruptive, you’re not alone. In September 2008 the CFTC confirmed that its Division of Enforcement has been investigating complaints of misconduct in the silver market. This investigation is ongoing and we look forward to its resolution.13

Because we believe the demand for precious metals will continue to increase in this environment, we’re always interested to know the total supply available in today’s physical bullion market. According to the best estimates from the USGS and current mining statistics, approximately 46 billion ounces of silver have been mined since the dawn of civilization.14 In comparison, approximately 5 billion ounces of gold have been mined throughout history.15 Reading this, a casual observer might conclude that gold is currently justified in being worth more than silver based on its relative scarcity. But the current price discrepancy ($1,250/oz gold vs $19/oz silver) is misleading.

As mentioned above, there are only 1 billion ounces of silver left above ground in bullion form today. That is a surprisingly small number in relation to the 46 billion ounces mined throughout history. The reason is due to silver’s consumption in manufacturing. Just like other industrial minerals, silver has been consumed in various processes over the course of history. Silver’s superiority in heat transfer, conductivity and light reflectivity make it unique, and it boasts anti-microbial properties that make it ideal for surgical instruments, clothing materials and certain medical applications. The key point to remember with all these applications is that once the silver is consumed it is typically never recycled. Many of its industrial applications require such small amounts in each surgical tool, electronic device or clothing item that it isn’t economic to recover from garbage dumps. For comparison, there are currently approximately two billion ounces of gold above ground in bullion form compared with the 5 billion ounces of gold mined throughout history.16 So despite being more heavily mined over time, silver bullion is now the more scarce "precious" metal than gold bullion is from an investment supply perspective.

This is where the silver story gets interesting for us. At today’s prices you have $19 billion dollars of silver ($19 x 1 billion ounces) and $2.5 trillion dollars of gold ($1250 x 2 billion ounces) above ground in bullion form. The size of the investment market for gold is therefore 131 times larger than that for silver. And yet, on a market relative dollar basis, investors are actually buying more silver than they are gold today. At today’s metals prices, in dollar terms, the US mint has sold approximately three times more value in gold than in silver thus far in 2010 coin sales. But there should be 131 times more gold sold than silver for the market to stay in balance. None of the largest gold and silver investment vehicles reflect the 131:1 ratio, suggesting that investors have a disproportionately large interest in owning physical silver.

For example, the largest gold ETF today, the SPDR Gold Trust ("GLD"), is currently ten times the dollar value of the largest silver ETF, the iShares Silver Trust (SLV). Since the SLV began trading in April 2006, the GLD has increased by $8 for every $1 increase in SLV’s NAV. Again, given the choice, investors are voting with their dollars and putting disproportionately more dollars into silver than gold from a relative market size perspective. It appears that no investors are anywhere close to buying 131 times more gold than silver, which market metrics would suggest if the demand for gold and silver were relatively equal – all of which brings us to silver’s ‘supply conundrum’: If on the supply side, as Ted Butler calculates, there are only one billion ounces of silver left in bullion form available for investment; and if, on the demand side, we were able to identify the holders of 500 million ounces spread across a mere seven investors - it implies that there is only 500 million ounces of silver left for everyone else to invest in! As large holders of silver bullion ourselves, we can tell you that 500 million ounces is not that much from a global perspective, and certainly won’t be enough to satiate the world’s investment demand for silver going forward. Also let us not forget the large silver short position on the COMEX that will almost undoubtedly require the purchase of 330 million ounces of silver to eventually cover. Assuming that happens, most of the silver available for investment will essentially already have been spoken for.

It also serves to mention that there will be no government silver stocks capable of covering this impending supply shortfall. According to the latest audit, the US treasury currently has 7,075,171 oz of silver in storage, which is about enough to handle two months of silver eagle coin production. If the COMEX silver short sellers are ever forced to cover, they won’t be able to lean on the government for a physical bailout.17

Judging by the numbers above, if hedge funds or any other large investor ever decided to invest in the physical silver market with the same voracity as they did with gold, the silver price could potentially explode. The existing silver inventory at COMEX is currently worth a little more than $2 billion at today’s silver price. We already know that high-profile hedge fund managers like Soros, Paulson and Einhorn have gold holdings with a total value of over $5 billion.18 If that same purchasing power was ever applied to the silver market, we could potentially witness a dramatic rise in the silver price and an effective clearing of all the physical silver in the COMEX inventory. It deserves mention that the SPDR Gold Trust ("GLD") added almost $5 billion dollars worth of gold in the last month alone, and it would take less than half of that GLD gold investment to wipe out the entire silver COMEX inventory.

The bottom line for us is that silver appears to be a fantastic investment today. Limited supply, strong demand and a potential buyer of almost half of one year’s global mining silver output make a great case for owning silver in physical form. Based on our calculations, it appears that the silver investment demand statistics published by GFMS and The Silver Institute are highly misleading at best. We believe the investment demand for silver is multiple times higher than that published, and given the outrageous short position in silver on the COMEX, coupled with the unsustainable buying ratios relative to gold, the case for physical silver is simply outstanding. As the expression goes, "every cloud has a silver lining". Notice it isn’t a gold lining or a platinum lining. In the silver market, the cloud has been duly represented by poor estimations of investment demand coupled with large outstanding short positions. That cloud will soon lift, revealing a "silver lining" that is far more valuable than it is today.

Click here for footnotes



All that Glitters is Silver (November 2010)

By Eric Sprott & David Franklin:

In the four months since we filed the prospectus for the Sprott Physical Silver Trust on July 9, 2010, the silver price has rocketed up 54%, bringing its year-to-date return up to a stunning 68% (!!). Silver has now outperformed all of the other eighteen commodity components that comprise the CRB Commodity Price Index on a year-to-date basis. Silver has been the indisputable star of 2010, and we have been very long the physical metal in many of our mutual funds and hedge funds.
Silver’s performance since June has been influenced by a number of factors. The first and arguably most significant development took place on October 26, 2010 when comments were released by Bart Chilton of the Commodity Futures and Trading Commission (CFTC). The CFTC is the US government agency that supposedly regulates the US futures and options markets. While the CFTC has technically been "investigating" the silver market since 2008, it had revealed nothing about its findings for over two years. Everything suddenly changed when Mr. Chilton, a CFTC Commissioner no less, publicly stated that, "I believe that there have been repeated attempts to influence prices in the silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told by members of the public, and reviewed in publicly available documents, I believe 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 (emphasis ours)."1 These comments quickly triggered a flurry of lawsuits against the purported manipulators and set the silver market on fire. There are now no less than four lawsuits seeking class action status. They all allege that JP Morgan Chase & Co. and HSBC Securities Inc. colluded to manipulate the silver futures market beginning in the first half of 2008. The suits claim that the two banks amassed massive short positions in silver futures contracts that they had no intent to fill in order to force silver prices down for their furtive benefit.

The suits also describe two ‘crash’ events that were set in motion by JP Morgan and HSBC, one in March 2008, and the other in February 2010, after the defendants had amassed large short positions. The suits allege that COMEX silver futures prices subsequently collapsed to the benefit of both banks in the wake of these events.2 The fallout from these accusations has undoubtedly increased the investment demand for silver, and it serves to remember, as we highlighted in the previous article, that investment demand was already understated by at least half by the major silver reporting agencies. It will be hard for them to downplay the recent demand increase, as the volume of silver contracts traded on the COMEX market on November 10th set a new record, surpassing the previous record set in December 1976 by 57%!3 This increase actually forced the CME Group to increase the margin requirements for COMEX silver futures twice in one week in order to maintain some semblance of market order.4

Silver coin sales as reported by the world’s major mints have also been exploding since Chilton’s comments were made. The US Mint, The Royal Canadian Mint, The Austrian Mint and The Perth Mint are all reporting record or near record sales of silver coins.5 The silver Eagle produced by the US Mint set three new records at various points in November: best annual sales, best silver Eagle mintage, and best ever month.6 Money is pouring into silver in all forms, and due to silver’s relatively small market size, this capital inflow is having a huge impact on the silver spot price.

As we outlined in our Sprott Physical Silver Trust prospectus and our June MAAG article, the physical silver market is surprisingly small in US dollar terms. The CPM Group estimates that above ground stocks of physical silver total 1.184 billion ounces in bar and coin form, implying a total silver market size of a mere US$33.15 billion dollars.7 At the end of 2009, approximately 500 million ounces of that 1.184 billion were already accounted for by the silver ETF’s and other large holders. This left approximately 684 million ounces of silver available for sale in 2010. That is hardly enough, in our opinion, to satiate demand.

The money flows into silver in November 2010 have been staggering. Consider the investment demand generated from only two sources: the iShares Silver Trust ETF (SLV) and US Mint coin sales. The SLV added approximately 18 million ounces of silver in November alone; the US Mint sold 4.2 million ounces of silver coins. If you multiply these amounts against today’s silver price of $28, money is flowing into the silver market at an annualized rate of $7.5 billion dollars! At that rate of demand, it won’t take long before all the remaining above ground silver is spoken for.

Silver’s demand profile may also benefit from the outrageous short position that exists in the silver COMEX market. The current ‘open interest’ in silver COMEX contracts totals an approximate 871 million ounces (!!!).8 This means there are paper contracts for over 871 million ounces of silver that have someone betting ‘long’ and someone else betting ‘short’. In the event that the ‘longs’ choose to take physical delivery, there will not be enough silver to supply each buyer. It’s simple math - with only 684 million ounces of silver available above ground, there won’t be enough silver to go around. And considering the rate with which people have been purchasing coins and silver bars this past month, there may not even be enough physical to satiate regular spot buyers, let alone futures market participants.

Considering all the recent developments in the silver market, it seems unlikely that the silver price will stay under $30/oz for long. The large quantity of money flowing into silver from investors, combined with the potential demand from those who are ‘short’ silver that they do not own, will likely end up swamping the physical silver market entirely.

As our dear friend, Marc Faber, espouses in his book "Tomorrow’s Gold", an investor can do very well by only making a few good investment decisions over his or her career. The trick is to make one good investment decision every decade or so, based on trends that will last a number of years.9 In our view, owning physical silver and the associated stocks represents that type of investment opportunity today. If that seems too simplistic, consider that in October 2001 we wrote an article that identified the investment of the last decade. It too was just a simple metal. The article was entitled "All that Glitters is Gold", and it was written when gold was still considered a relic in financial circles. We believe silver will be this decade’s gold, and judging by the recent price action, it’s already off to a great start.


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Turd Ferguson's picture

"Considering all the recent developments in the silver market, it seems unlikely that the silver price will stay under $30/oz for long. The large quantity of money flowing into silver from investors, combined with the potential demand from those who are ‘short’ silver that they do not own, will likely end up swamping the physical silver market entirely."


This pretty much sums it all up.

Lots of talk about silver lately at tfmetalsreport. Come on over and join the fun!


VegasBD's picture

Keep forgetting to bookmark your blog, if you post link once more I promise I wont ask again =)

flacon's picture

Check this news out from King World News this afternoon:

KWN Source - Gold Will Move $150 Higher Within 5 Weeks$150_Higher_Within_5_Weeks.html



Jendrzejczyk's picture

What is your studied opinion of the silver market, kind sir?

..........(edit) well, now I've replied to a dot and some lines.

justbuygold's picture

I see he failed to mention that he could not source all the silver for his new Sprott Silver Fund .  So how did he find $550 MM worth of silver ?  The answer is he didn't !

Sprott had physical silver in many of his Sprott funds such as his Gold/ Silver fund, Sprott Inc, his Hedge funds, and Sprott Resource Fund.  Likely as much as $250-$300 MM worth.  He then exchanges shares of Sprott Silver to those funds for the physical silver those funds held.  Essentailly a paper swap for physical. The latest filing from just one of Sprott's bigger funds that held a lot of physical , now shows it owns 14.8 MM shares ( $160 MM worth) of the new Silver Fund.  Expect the same from the rest of his funds.  Eric also put in as much as $50 MM himself, I suspect he exchaged his personal silver into that transaction as well , but I have no proof  so treat it as hearsay.

Is this "sleight of hand" any better than anything JP Morgan is doing ?  Seems to be a lot of paper shifting around the same silver.

Where did he find the other $200 MM worth of silver ?  Buzz is that there was absolutely none to be found at North American refineries, he had scamble to buy it in Europe and now has to pay enourmous transportaion and insurance costs to ship it to Canada.

Personally I prefer physical funds that don't play games ( and GLD and SLV are the worst).



SRV - ES339's picture

It's not a Fund, it is a Trust and you can take delivery once a month. The bullion is secured (in the Canadian Mint) and there are documented third party audits... this is nothing like GLD or SLV.

I won't debate the rest of your (mis) information, but you have clearly been misled. You're mixing Sprott Funds (which do not pretend to hold bullion other than as noted as an investment) with the Sprott Silver / Gold Trusts... they are, IMHO, a viable vehicle for PM bullion investment.

Curious... have you read the prospectus?


Goldilocks's picture

Hmmm, I thought silver & gold (the real thing - in your possession) was ... "a viable vehicle for PM bullion investment."

justbuygold's picture

You obviously work for Sprott and are trying to contain this. Just one look at your ID tells us all that.

SRV = Silver   ES339  = Eric Sprott 339

I wonder if they charged shareholders of all those funds a nice 6-8 % commision as well.  I also wonder about the capital gains from the " transferred silver" .  Who eats that or does it flow through ?  Is there possibly a doubling up of managment fees of the fund that holds the PHSV shares and the PHSV itself.  Lots of questions.

However.....Here is the proof of the holdings:


Sprott Asset managment owns  14.97 MM shares of Sprott Physical Silver trust

Sprott Hedge Fund L.P owns 3.28 MM shares

Sprott Hedge Fund II owns 3.33 MM shares

Sprott Foundation owns 4.98 MM shares


Collectively thats  46% of the float of the trust according to the 13D.   Lets call it $250-270 MM worth.

From the 13D filing......

Item 5. Interest in Securities of the Issuer.     (a), (b) The percentage of beneficial ownership has been calculated based upon an aggregate of 57,500,000 Units outstanding, according to the Trust's most recent Form 6-K that was filed on November 3, 2010.   As of the date hereof, the Investment Manager and Mr. Sprott may each be deemed to beneficially own 14,971,815 Units, or 26.04% of Units of the Trust, Sprott Hedge Fund L.P. may be deemed to beneficially own 3,288,300 Units, or 5.72% of Units of the Trust, Sprott Hedge Fund L.P. II may be deemed to beneficially own 3,329,200 Units, or 5.79% of Units of the Trust, and the Sprott Foundation may be deemed to beneficially own 4,982,115 Units, or 8.66% of Units of the Trust.


Exhibit A

Transactions in the Sprott Physical Silver Trust Units
Sprott Hedge Fund L.P.

Date of Transaction Number of Units Purchased/(Sold) Price per Unit   11-3-10      3,288,300    $10

Sprott Hedge Fund L.P. II

Date of Transaction Number of Units Purchased/(Sold) Price per Unit   11-3-10    
    3,329,200   $10

The Sprott Foundation

Date of Transaction Number of Units Purchased/(Sold) Price per Unit   11-3-10     4,982,115   $10

Shares Purchased by Other Entities Managed by Sprott Asset Management L.P. or Eric S. Sprott

Date of Transaction Number of Units Purchased/(Sold) Price per Unit   11-3-10   2,109,200   $10   11-3-10   1,263,000    



justbuygold's picture

HERES  AN  IDEA  ! ! !

Why don't I take $50 MM in physical silver held by my local bank as inventory.    I form a physically redeemable silver trust (SSV1)  and sell the bank shares in exchange for the physical silver.  Maybe the public buys $50 MM of the trust too and I buy $50 MM more physical silver in the open market .  I now own a $100 MM silver trust (SSV1)  backed by physical silver in my local bank vault.   

Now I get really fancy.  I sell all the silver in my first silver trust (SSV1)  to a second redeemable silver trust ( SSV2) that I list in Europe.  I give  SSV1,  $100 MM in shares . They are fine though becuase in theory they the shares are redeemable so they can get their physical quickly if they want.  Furthermore it never leaves my local banks vault , only the paper title changes to ownership by SSV2.  The public also buys $100MM and so SSV2 becomes a $200MM vehicle.    Then SSV2 sells to SSV3  , SSV3 to SSV4 etc  ...until suddenly there is a multitude of huge silver funds out there backed by very little REAL physical silver.

This is essentially how SLV and GLD works ( re:  subcustodians) although more complex derivatives are involved.  Like Maguire said, the same silver is sold 100 x over. It may be SLV, COMEX , LBME , etc  all oversold  100-1 .

The minute everyone at SSV1 wants physical, the whole thing crumbles down the chain.  When Kaiser says buy physical silver  THIS IS WHY.  Go out and get as much physical as you can ASAP.  The whole thing will crumble soon when this whole paper shuffling game ends.



badewann's picture

Nice and understandable explanation. Thank you!

That`s exactly how it is done outa there. Wouldn`t trust nobody.


justbuygold's picture

I have studied all the silver vehicles right down to the minutiae in the prospectus of each.  In the end though I would recommend to anyone to own a blend of silver stocks,  silver funds/trusts/    , and finally physical.   The silver stocks give you the most upside leverage,  the trust allow you to hold big physical positions without dealing with storage, and finally, owning physical ( coins, small bars, wafers)  gives you safety in a Zimbabwe type hyperinflationary event.

Good silver stocks : Tahoe Resources , Silver Wheaton  ( both have great growth and excellent leverage)

Best Silver trust :  Central Fund's  Silver Bullion Trust  ( lowest Mer/admin fee in world, trustworthy mgmt, long history, no paper type games)

Best Physical  :  Silver Maple Leafs, or several of the Amercian Silver dollars. ( lowest premiums for both, easiest to obtain)  also J&M 1-10oz bars/ wafers.



GoinFawr's picture

Thanks for the insight justbuy, it sure looks like you've done your homework.

Crash Sprott! Buy Silver! (hehe jk) Though, if that was the case, you'd think Sprott would avoid recommending buying physical silver themselves. If we see them show up as one of the 'big commercial shorts' positions, we'll know for sure which way the wind blows, I guess.

Doctor Detroit's picture

Who is Eric King and who is his "London source"?

gwar5's picture

Go to Eric King at  Worth a look, ZH has used them as a resource. 

King has articles and interviews with newsmakers and regulars. Turk or Butler is probably his London source. They are usually spot on. I think Turk called 30$ silver 2-3 weeks before it happened, and it unfolded just like he said.

You'll also find interviews with people like Jim Rickards, Sprott, and newsmakers like Nigel Farage of the day etc.

I think King also did an interview with Andrew McGuire right at the time McGuire was turning in JP Morgue to the CFTC for silver manipulation -- and his site was hacked and went down mid-interview, by TPTB?

dumpster's picture

who is doctor detroit 


and why do the digging for you,,  either you find out your self or  why bother to feed you from a beggers bowl

Concentrated power has always been the enemy of liberty.'s picture

I already have plenty of silver.  What I really want is a link to buy Turd's yellow hat!  :D

mick_richfield's picture

Here you go, Con.

Anybody with a complete sentence for a handle deserves a Really Big Hat.

CD's picture

Not that TF needs my endorsement, but he really has done an outstanding job commenting, analyzing and yes, even offering prognosticating on the blog. Thanks for all the effort and insight. tfmetalsreport dot blogspot dot com for those too lazy to Google.

Also, Mr. L. Hendrix is doing his thing at lhmarketwatch on blogspot.

And while we're at it, cougar_w has shared his short fiction gems at madscienceunlimited. Makes me wish I had enough time/talent to share something myself... Quite the incubator you have going here, Tyler.

delacroix's picture

cougar's not a woman?

CD's picture

Now that you mention it, it's perfectly possible, never thought of it that way. Can't remember if cougar ever made a gender-obvious post, which in itself may also make it more likely. Either way, the stories are a lot of fun, and dedicated to us at ZH - definitely worth a look.

Mr Lennon Hendrix's picture

To the junkers!  We were at $1430 only two days ago!  Calm down!  I am not making a wild prediction here.

Arius's picture

how can they calm down when they already shorted gold/silver?

-- you were correct so far this week!

BigJim's picture

OK. As I'm long PMs I'll bite.

What makes you think 1430 tomorrow?

Mr Lennon Hendrix's picture

e are at the bottom of support.  hat news would have gold lower?  England is going to continue their own QE program while maintaining rates at zero.  China raising rates would spark volatility and if there is a safe play right now it is gold.  Gold has quadrupled this decade.  Gold has doubled from its bottom during the heighth of the very public financial crisis.  This crisis continues, but the wanker bankers must hide their actions.  They will spin their book keeping to have gold and silver absorb the losses on MBS etc; the Federal Express Reserve Bank will help with that too, as the Bernank prints his way into oblivion.  The stars are calling down from the heavens that earth has lost its light.  Those stars, they have a point; a brilliant one!

ColoradoBikerChic's picture

TF... right on the money with the Reverse Head & Shoulder call... clear as a bell on a SLV 3day hourly spread, at the close today (even better,  note the DI- DI+ crossover early AM with a nice pull back to the 21MA near end of day where it bounced a sweet hammer at 15:30hr), with the cake icing of a 1million Vol spike in the last minute before 4pm EST NY close.  Running nicely in afterhours.  Still have resistance though on the Hourly, 100MA & 50MA still overhead.

Bolweevil's picture

Ooh! Finporn talk! Is that a Softail (HD) between your legs?

smeagol's picture


I been trading off Blythes takedowns for the last 2 years and started a thread a few weeks ago analysing and commenting on the takedowns.(you got a mention a couple of weeks ago check it out: (I also linked your blog to my own)

Tracking commercial takedowns and market commentary

dark pools of soros's picture

are you sellin on each pop?   cuz you should of just bought it all 2 years ago and ignored the bitch

smeagol's picture

if I'd have done that I'd have missed all the fun. Not shorting so much now mostly buying dips, back in 09 early 10 it was short the fix time and then catch the bounce.

Bolweevil's picture

Nice work. Bookmarked.

Turd Ferguson's picture

Wow, smeagol, your site is terrific! Its an honor to be included. Thanks!

smeagol's picture

Thx, its just my little office where my RSS robots trackdown news on my behalf(saves on research time)

iota's picture

I popped over out of curiosity but I think I might be returning just for the hand drawn charts.

High Plains Drifter's picture

Just think about it. All of these years the silver bugs, much more so even than the gold bugs, have suffered long and hard and taken lump after lump after lump never ceasing to keep up the belief. Criticized, laughed at and impuned day in and day out and now in this area that has been called "unchartered territory" our light is about to shine and shine well and shine brightly in the darkness of American finance. Let it shine , let it shine brightly, let it shine for all to see because what was once someone's junk, is now someone's shining treasure, a treasure made up of real , yes , real money, the poor man's gold. Drink up my fellow true believers, for your time is coming fast, at a trot. For too long we have waited for these days, but just like clockwork our goals are being met once and for all, as our plans for the future come into fruition because we knew all along these criminals that run the financial systems of the world, would not fail us, in their deceit. God bless the silver bug and gold bug and may those who have destroyed this nation, get their necks stretched at the end of chinese ropes and may their god , whoever that may be, have no mercy on them for the men in the streets will not. That my friends is one sure thing you can bet on.

Bring the Gold's picture

Well said High Plains Drifter. I agree pretty much point for point.


Disclosure: Long pitchforks, torches and rope 

RobotTrader's picture

Virtually every "guru" on CNBC, especially the Fast Money boys are very bearish on silver.

Tons of guys expect to make a "killing" on its collapse.

Therefore, I'm expecting a huge upside spike to blow these guys out.

Let's cross our fingers and hope Cramer doesn't start hawking it tonight.

Testicular Cancer's picture

Robo, is that really you, bullish on silver? Quick, what's the temperature in Hades?

Cheesy Bastard's picture

Bullish on silver, nothing jiggly in sight...Who are you and what have you done with Robo?

trav7777's picture

RT just tells it like it is.  On some days, PMs actually go down.  And fluffed up .coms like NFLX go up.  A lot of people can't handle price action not doing what they'd like it to.

Cheesy Bastard's picture

True.  Plus, boobies are nice.

GoinFawr's picture

Riiiiiight. Either that or he just flops faster than he flips.

eg. Seen any follow up on this 'aaplicious' call of his?

Didn't think so.

 Robo denigrates, then when he's wrong immediately flips and pretends as if nobody noticed, yet some do notice regardless.

Seriously though, I call BS Trav: Robotrader's agenda is as plain as the nose on your face, nm. Still, I'm surprised it's lost on you. Ah hell, perhaps you're right: he's just another 'Captain Hindsight, Master of the Bleeding Obvious' masquerading as a mild mannered HFT.

 OR Maybe it's 'opposite day'!

Mr Lennon Hendrix's picture

Fast Monie had Peter Barnes on last month and I thought Nijarian was excited enough about it to do a touchdown dance!

Call to the Floor: Silver Wheaton CEO:

SilverRhino's picture

I think that's the first time I have ever seen you bullish on silver in my admittedly short tenure here.

High Plains Drifter's picture

Come on Robo. If you are bullish on silver, then show us some tits.