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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.

 

Click here for footnotes

 

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Thu, 12/09/2010 - 17:37 | 793971 Turd Ferguson
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!

 

Thu, 12/09/2010 - 17:39 | 793982 VegasBD
VegasBD's picture

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

Thu, 12/09/2010 - 18:18 | 794117 flacon
flacon's picture

Check this news out from King World News this afternoon:


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

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/12/9_KWN_Source_-_Gold_Will_Move_$150_Higher_Within_5_Weeks.html

 

 

Thu, 12/09/2010 - 18:53 | 794163 nope-1004
nope-1004's picture

.

Thu, 12/09/2010 - 19:02 | 794248 Jendrzejczyk
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.

Thu, 12/09/2010 - 20:02 | 794312 justbuygold
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).

 

 

Thu, 12/09/2010 - 21:00 | 794465 SRV - ES339
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?

http://www.sprottphysicalsilver.ca/documents/Sprott_Physical_Silver_Trust_Prospectus_US.pdf

 

Thu, 12/09/2010 - 21:27 | 794527 Goldilocks
Goldilocks's picture

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

Thu, 12/09/2010 - 23:53 | 794575 justbuygold
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:

http://secwatch.com/filings/view.jsp?formid=7448845

 

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    
  $10

 

 

Fri, 12/10/2010 - 00:20 | 794821 justbuygold
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.

 

 

Fri, 12/10/2010 - 06:52 | 795106 badewann
badewann's picture

Nice and understandable explanation. Thank you!

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

 

Fri, 12/10/2010 - 09:57 | 795217 justbuygold
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.

 

 

Fri, 12/10/2010 - 15:39 | 796564 GoinFawr
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.

Thu, 12/09/2010 - 18:53 | 794229 Doctor Detroit
Doctor Detroit's picture

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

Thu, 12/09/2010 - 19:19 | 794299 gwar5
gwar5's picture

Go to Eric King at kingworldnews.com  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?

Thu, 12/09/2010 - 20:28 | 794406 dumpster
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

Thu, 12/09/2010 - 21:45 | 794561 Hulk
Hulk's picture

dumpster!

Thu, 12/09/2010 - 17:43 | 793997 Concentrated po...
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

Fri, 12/10/2010 - 14:10 | 796163 mick_richfield
mick_richfield's picture

Here you go, Con.

http://www.stage-fright.com/hufocohatcod.html

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

Thu, 12/09/2010 - 17:49 | 794004 CD
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.

Thu, 12/09/2010 - 20:18 | 794394 delacroix
delacroix's picture

cougar's not a woman?

Thu, 12/09/2010 - 21:56 | 794582 CD
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.

Thu, 12/09/2010 - 17:59 | 794055 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

$1430 by tomorrow's close.

Thu, 12/09/2010 - 18:38 | 794192 Mr Lennon Hendrix
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.

Thu, 12/09/2010 - 20:30 | 794411 Arius
Arius's picture

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

-- you were correct so far this week!

Thu, 12/09/2010 - 21:40 | 794549 BigJim
BigJim's picture

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

What makes you think 1430 tomorrow?

Fri, 12/10/2010 - 00:29 | 794845 Mr Lennon Hendrix
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!

Thu, 12/09/2010 - 18:16 | 794074 ColoradoBikerChic
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.

Thu, 12/09/2010 - 21:41 | 794550 Bolweevil
Bolweevil's picture

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

Thu, 12/09/2010 - 18:26 | 794138 smeagol
smeagol's picture

TF

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

http://preciousmetalsnews.blogspot.com/

Thu, 12/09/2010 - 21:21 | 794516 dark pools of soros
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

Fri, 12/10/2010 - 03:51 | 795028 smeagol
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.

Thu, 12/09/2010 - 21:44 | 794557 Bolweevil
Bolweevil's picture

Nice work. Bookmarked.

Thu, 12/09/2010 - 22:36 | 794646 Turd Ferguson
Turd Ferguson's picture

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

Fri, 12/10/2010 - 03:48 | 795025 smeagol
smeagol's picture

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

Thu, 12/09/2010 - 19:05 | 794266 iota
iota's picture

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

Thu, 12/09/2010 - 21:10 | 794485 High Plains Drifter
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.

Fri, 12/10/2010 - 00:32 | 794848 Bring the Gold
Bring the Gold's picture

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

 

Disclosure: Long pitchforks, torches and rope 

Thu, 12/09/2010 - 17:42 | 793995 RobotTrader
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.

Thu, 12/09/2010 - 17:50 | 794024 Testicular Cancer
Testicular Cancer's picture

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

Thu, 12/09/2010 - 17:53 | 794033 Cheesy Bastard
Cheesy Bastard's picture

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

Thu, 12/09/2010 - 18:18 | 794118 trav7777
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.

Thu, 12/09/2010 - 19:12 | 794284 Cheesy Bastard
Cheesy Bastard's picture

True.  Plus, boobies are nice.

Thu, 12/09/2010 - 19:39 | 794333 zero intelligence
zero intelligence's picture

mmmm .... boobies ...

+1!

Fri, 12/10/2010 - 01:54 | 794418 GoinFawr
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?http://img411.imageshack.us/img411/6964/robotloser.jpg

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 ...er, 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'!

http://www.gocomics.com/calvinandhobbes/2009/07/16/

Thu, 12/09/2010 - 18:32 | 794166 Mr Lennon Hendrix
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:

http://www.cnbc.com/id/15840232?video=1638179884&play=1

Thu, 12/09/2010 - 21:04 | 794471 SilverRhino
SilverRhino's picture

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

Thu, 12/09/2010 - 21:15 | 794505 High Plains Drifter
High Plains Drifter's picture

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

Fri, 12/10/2010 - 07:09 | 795112 TheDriver
TheDriver's picture

And not just any tits. We want silver ones.

http://www.guyhepner.com/images/get/509x397/2785/guido-argentini-silvere... (NSFW)

Thu, 12/09/2010 - 17:43 | 793999 martinj
martinj's picture

Thank you.
Hope that the unwinding of our monetary system is not "too" chaotic. It could finish our liberties if vampires like blankfein or Dimon decide to solve their problems with the army (like the GOS finished its air traffic problems a week ago and like the banking system has done to Lord Assange).

Lets pray.

Thu, 12/09/2010 - 19:28 | 794317 RafterManFMJ
RafterManFMJ's picture

Dear Ben, who art in Washington...

Thu, 12/09/2010 - 21:27 | 794529 espirit
espirit's picture

hollow be thy game...

Thu, 12/09/2010 - 21:47 | 794565 Bolweevil
Bolweevil's picture

thy kingdom of clones...

Thu, 12/09/2010 - 22:18 | 794611 Blano
Blano's picture

Thy printing won't be done.....

Fri, 12/10/2010 - 02:29 | 794977 indio007
indio007's picture

On Earth by you heathens.

Thu, 12/09/2010 - 20:36 | 794423 Hugh_Jorgan
Hugh_Jorgan's picture

Amen to that, Martin. I will join you there.

The Comex/JPM/HSBC debacle is just one of probably 10s or 100s of such schemes that will need to be excised in the future. The untold cost to our civil society is going to be devestating, the very fabric of our financial world is coming undone because of . This brings me to another commodity that will be VERY valuable in helping you to hold onto your personal inventories of gold and silver. I recommend having a sizeable quantity of steel jacketed lead and and the associated "dispenser" close at hand, it is about to get ugly folks...

Thu, 12/09/2010 - 17:47 | 794010 max2205
max2205's picture

Hope this wasn't issued at the top of the move

Nothing is a longterm investment in commods

Thu, 12/09/2010 - 17:52 | 794030 Clint Liquor
Clint Liquor's picture

Unfortunately, for the 'fast money' crowd who view Silver as a commodity, people are buying Silver as a replacement for fiat currencies.

Thu, 12/09/2010 - 18:03 | 794065 traderjoe
traderjoe's picture

Agreed good sir, agreed. Love the avatar. 

Thu, 12/09/2010 - 18:11 | 794106 tickhound
tickhound's picture

Along those lines... pisani came out claiming "I don't get the silver run, I see no silver Jewelery demand." lol

Thu, 12/09/2010 - 18:55 | 794232 Larry Darrell
Larry Darrell's picture

He also doesn't see me adding to my personal silver round collection a couple of ounces at a time every week.  And since it's cash in small amounts, big brother doesn't see either. It's no huge amount, but it's symbolic of something I believe and a way to piss on people like pisani.

Thu, 12/09/2010 - 22:21 | 794617 Blano
Blano's picture

Same here Larry.  I've rejiggered my budget so that come hell or high water I will buy at least 1 oz. a week.  Preferably more, but no matter what, at least one.  Nobody will ever notice.

Thu, 12/09/2010 - 21:18 | 794508 High Plains Drifter
High Plains Drifter's picture

I saw our little buddy , the President of the ZH fan club, Barry Ritholtz on the fast money half time report today blathering on about nothing and making himself feel important.

Thu, 12/09/2010 - 17:50 | 794022 Sean7k
Sean7k's picture

Time to rock JPM's world.

Thu, 12/09/2010 - 18:06 | 794076 traderjoe
traderjoe's picture

"I'm givin' it all she's got Captain!"

- Scotty

Thu, 12/09/2010 - 17:55 | 794038 Max Cynical
Max Cynical's picture

I'm giddy today...just picked up 20,000 Oz. silver billion from Tulving and had the opportunity to meet Hannes and tour their operation. Very impressive! Clean, organized and friendly staff. This is not my first order with Tulving and it won't be the last. Highly recommend.

Thu, 12/09/2010 - 18:00 | 794054 Sean7k
Sean7k's picture

600,000 for a tour seems a little steep... :)

Thu, 12/09/2010 - 18:30 | 794160 ClaymoreStoor
ClaymoreStoor's picture

Tulving is the best dealer out there, in my opinion, assuming you can purchase in larger quantities. 

Thu, 12/09/2010 - 18:35 | 794177 cswjr
cswjr's picture

20k oz!?!?  Dang, I'm jealous.  You should silver plate the walls of your house, or something.

Thu, 12/09/2010 - 18:55 | 794236 jimgcpa
jimgcpa's picture

You're a little late to the party Dude.  Should have bought a couple of years ago.  I'm selling my horde purchased at $6.50 to Lemmings like you.

 

Thu, 12/09/2010 - 19:28 | 794313 traderjoe
traderjoe's picture

ZH member for 1 week 1 day. 'Nuf said. 

Thu, 12/09/2010 - 21:10 | 794486 Hooter Shaker
Hooter Shaker's picture

Sell it all, Dipshit!

Thu, 12/09/2010 - 23:54 | 794796 Imminent Crucible
Imminent Crucible's picture

"Should have bought a couple of years ago"

Get real.  Should have bought 15 years ago, like I did.

At $4.25 per ounce.  And by the way, silver has never closed below $9 at any time in the last three years.  I think you are a liar.

Fri, 12/10/2010 - 07:23 | 795116 ViewfromUnderth...
ViewfromUndertheBridge's picture

Heeeeeeeeeeeeeeere's Johnny!

Thu, 12/09/2010 - 21:20 | 794514 High Plains Drifter
High Plains Drifter's picture

Those guys are something. I think they have the fastest turn around in the business. Must mean they have excellent connections. I think they only accept wire transfers for payment but this makes shipping much faster, imho.

Thu, 12/09/2010 - 17:57 | 794045 Goldenballs
Goldenballs's picture

Buy Silver,take down a bank,its your patriotic duty !!!!!!!!

Thu, 12/09/2010 - 17:59 | 794050 e_u_r_o
e_u_r_o's picture

I really want to invest in silver but dont really want to pay 35% or more with VAT and premiums so should I consider investing in paper silver? if so, where?

Thu, 12/09/2010 - 18:20 | 794126 traderjoe
traderjoe's picture

If the price of silver is really being suppressed with short naked silver contracts, then long paper silver will be worthless when the scam is exposed. Since there will not be enough real silver to cover the long and short paper silver, all paper will have to default. Only physical possession will have value. 

Can you buy from overseas and have it shipped back? Like the Perth Mint? I dunno, just brainstorming...

Thu, 12/09/2010 - 18:35 | 794182 iDealMeat
iDealMeat's picture

PSLV

Thu, 12/09/2010 - 21:31 | 794538 espirit
espirit's picture

+1  Best in the biz, imo.

Thu, 12/09/2010 - 23:28 | 794750 anarchitect
anarchitect's picture

Or Silver Bullion Trust (SBT.UN on the TSE). Run by the same group that runs Central Fund of Canada (CEF). SBT's premium to NAV is currently about 8% but was recently as high as 15%, so check it for a reasonable entry point.

Thu, 12/09/2010 - 19:03 | 794262 boiow
boiow's picture

bullionvault do silver as well as gold.

 also ukgoldbullion can store silver bullion on your behalf in the channel islands. have to call him though its a new service.

 or just buy silver bullion from sarniasilver in the channel islands. they send it through the post vat free.

Thu, 12/09/2010 - 22:06 | 794596 Dimeboy
Dimeboy's picture

Silvercoin.ca will ship Canadian junk silver to Europe. No vat on Commonwealth legal tender.

Fri, 12/10/2010 - 01:05 | 794895 Bring the Gold
Bring the Gold's picture

Are silver maples considered legal tender by that definition?

Fri, 12/10/2010 - 02:01 | 794957 Fearless Rick
Fearless Rick's picture

Ebay works great in the US, don't know how it's regulated over the pond.

Thu, 12/09/2010 - 17:59 | 794052 Goldenballs
Goldenballs's picture

Just a thought,why dont we get some Solid Silver badges done with "Take down a Bank" on them,sure they,d be great sellers.I am sure they would really be appreciated out and about.ZH fashion items indeed.

Thu, 12/09/2010 - 18:01 | 794058 Sean7k
Sean7k's picture

Buy the Max Keiser coins.

Thu, 12/09/2010 - 18:05 | 794075 Dr. Gonzo
Dr. Gonzo's picture

You had me at hello. I sold all my stinky SLV well over a year ago.  I've bought into your fund twice so far. Still planning on allocating more throughout 2011 and I'm in it for the long hall. No trading for me. This is my bank account. I'm setting my 2011 New Year's Resolution to get over 1000 equivilant JP Morgue Bullets purchased with you in 11.

Thu, 12/09/2010 - 18:23 | 794078 DavidPierre
DavidPierre's picture

From the other side of the silver coin...

Interview on BNN yesterday with John Nadler.

The guy made not a single statement honestly. He came out with all the usual weak analysis that is the hallmark of the bears, including the 'poor fundamentals' for silver, the 'crowded trade' for gold, and the laughable concept that the FED would curtail further QE stimulus and therefore the risk levels would diminish.

He even stated that silver was more for a trade and that Buffet had just sold all his silver not too long ago.  

What nonsense to even mention Buffet when the guy sold out very early in the move for silver, and missed most of the upside in the last few years. But then again anyone that listened to Nadler or some of the other bozos that get so much media attention would have also missed most of the move, because these guys have always been suggesting that the top was at hand.

One of more bizzare comments was Nadler stating that silver has a production cost of only $5. Really? Since about 70% of all silver production comes as a by-product, which is sold off to recoup mining costs for other primary metals...where does he come up with this number?

However the most ridiculous statement of the interview came in reply to the question of whether one big institution that is short a big chunk of metal (they did not have the balls to mention JPM directly) could be a major influence in the market performance for the metal.

Nadler said that he believed the real concentration was on the long side, through spec buying of ETF funds. This could be the biggest whopper of the year, and clearly Nadler is headed for the hall of fame for the MORON OF THE YEAR AWARD.

Lets just think about that word concentration. Hundreds of individual traders buying into the ETF is a sign of a healthy market, and it does not represent concentration. However having one single institution responsible for the vast majority of all short trades, most definitely is concentration, and a major factor of the current market performance.

Just try to imagine where silver would be trading today if there was not a single institution to short in unlimited quantities into any market rally. If that player were forced to cover shorts and close out positions, how much higher would the price of silver run on that buying action alone? The very fact that the same company short hundreds of millions of ounces of silver is also responsible as the custodian of the major silver ETF is the most alarming part of the equation.

Just for fun someone should edit a video with all of the stupid Nadler comments over the years and send that to BNN to run before they invite that putz for another interview.

via LeMet 

Thu, 12/09/2010 - 18:29 | 794158 XenoFrog
XenoFrog's picture

It's worth noting that Buffet was also long on GE and encouraged people to buy it at $30. It plummeted to $16 shortly afterwards. Buffet is not infallable.

Thu, 12/09/2010 - 18:57 | 794242 DavidPierre
DavidPierre's picture

BUFFOON Buffet... MORON Nader... JULGING Jeff Christian

The stories continue to surface about individual investors with fully paid for bullion in storage that are having difficulty taking delivery.

If one went into a bank to withdraw a chunk of cash from a savings account, and was informed the bank had trouble issuing the cash, think of the consequences. We all know that banks operate on a fractional reserve basis with the cash deposits and yet there still had better be enough cash in the vault to meet the day to day transaction needs.

A run on any bank is catastrophic since it is almost impossible to restore confidence once people have lost trust in the safety of their cash deposits. So this concept that the bullion held in storage by banks is NOT THERE is a very serious issue.

The problem becomes more acute when one considers that bullion is not supposed to be subject to any transaction risk whatsoever. It is a custodial agreement with the banks, and storage fees are charged. If indeed the banks have taken full payment for gold and silver with the obligation to purchase and safely store bullion, and then they have gone out and leased it to another party, or just invested the money in other sectors with the assumption they could buy bullion later - this constitutes a breach of trust. It is fraud, and no different from any other ponzi scheme where money is accepted from one party and used to settle obligations with another. So how does one reconcile that some major MAFIA banks may have in fact participated in fraud?

This is not just some tinfoil hat fantasy, there is already at least one incident on record of a bank being fined for charging storage and representing that bullion was held on behalf of clients that did not in fact exist.

And of course if in fact there is an issue with bullion that is supposed to be in storage but is not available for immediate delivery, it represents yet another source of demand for the shrinking inventory of worldwide bullion that has not been accounted for.

Imagine GFMS adding a line in their published reports for Bullion Fraud estimates?

It would be a very crowded note on the ledger if one accounts for the bullion that has already been double-counted in CB holdings and then leased out the back door. None of this appears in the official supply statistics and therefore the official numbers are crap, entirely underestimating the total world bullion demand.

If you have two parties that buy 10 tons of gold in a year, and the same 10 tons was sold to each of them through accounting fraud, then your real demand is 20 tons that year, and not the 10 tons that would be officially documented and supported by the gold storage numbers. When that pompous ass... Jeffery Christian acknowledged the fraud issue was far more severe, with as much as 100 ounces of gold sold for every one ounce of real bullion that changes hands, what he has confirmed is that the official gold inventory numbers are cooked.

This is the ugly secret that the banks do not want the public to understand. This is why there is such strong opposition to allowing an audit of Fort Knox.

This is why the contradictory standards have been implemented, mandating how countries report on their gold holdings and transactions. It is so very important to maintain this opaque cloud around all gold inventory numbers because the reality would trigger a run on all banks if people understood that the gold reserves are long gone.

The transfer of wealth has been well hidden and is almost complete.

Canada has already sold all of its CB bullion reserves.

The US has likely given up half or more of the documented reserves.

Europe has sold thousands of tons of gold openly, and perhaps much more in swaps and leases.

The 'poor' eastern nations have been buying gold and countries like India, Sri Lanka, China, Turkey, and Vietnam are accumulating this vast wealth as the blizzard of money printing devalues the dollar.

This scam is now playing out in real time as the gold of the west is handed over to other nations in exchange for cheap crap at Walmart. When the dust settles, the nations that own gold will control the wealth and all others will be left with worthless paper and declining standards of living.

The banks that are having so much trouble delivering gold for clients are just a small part of the corruption that runs to highest levels in our system. This is why there is so little resolve to restrain or punish the players that get caught. A small fine and no admission of guilt, and then business as usual.

The best advice one can take is to get your bullion out of the custody of any third party, and do it fast.

LeMet

Thu, 12/09/2010 - 20:08 | 794380 Bay of Pigs
Bay of Pigs's picture

Hard to explain how people like Nadler and Christian even get air time anymore. They are so completely and utterly clueless it almost defies imagination. 

Fri, 12/10/2010 - 11:05 | 795357 Pope Clement
Pope Clement's picture

"Clueless" ? I don't think so. How about 'made men'. Nadler has been spouting this same disinformation since gold at $400. Cui Bono is the question...

Thu, 12/09/2010 - 20:35 | 794421 Arius
Arius's picture

"The 'poor' eastern nations have been buying gold and countries like India, Sri Lanka, China, Turkey, and Vietnam are accumulating this vast wealth as the blizzard of money printing devalues the dollar."

these "poor" countries have been under the sun a bit longer than america...but who knows may be we discovered perpetum mobile with QE to infinity...will find out soon...

Thu, 12/09/2010 - 19:19 | 794298 SWCroaker
SWCroaker's picture

Very nice posts David.  Thanks.

Nadler is a one note twit, and he resides on my own personal global "Iggy" list as someone who is so consistently one-sided he can't be used as either a pro or contrarian indicator.  It took me over a year to finally understand why a bullion firm (Kitco) would find sponsering him profitable.

Thu, 12/09/2010 - 18:06 | 794081 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

ishares probably does not have any of that silver.  I do not trust Barclays, owned and operated by deRotheschildes (their last major holdings).  These paper contracts are spun at leverage of 100 to 1.  Gold and silver is basically fractional reserve currency at this point, just as FIAT is.  And even if it is in a vault, we all know only the top custodians, the top share holders, will be paid in physical bullion.  Demand sound monie, hold your physical. Buy silver.

Silver Slippers:

http://lhmarketwatch.blogspot.com/2010/12/silver-slippers.html

Fri, 12/10/2010 - 00:52 | 794870 JuicyTheAnimal
JuicyTheAnimal's picture

Oh who the hell cares if any of these ETFs have control of any metals?  I thought they were meant for us smarter than average pawns to buy out-of-the money calls two months out, cash in a month later, taking half of profit to buy bullion and reinvesting the rest into new calls two months out again?  

If that is not what these PM ETFs are for then how the hell am I supposed to afford any real metals?  Paychecks from working 40 hours a week do not, for the most of us, create that ability. Tis a tad risky to walk into a bank with a pistol don't ya think? And I don't have much of a credit limit either to just go chargin' coins.  Or trust me I would and then change my legal name to Juicy Pawn Morgan so their dumb ass employees would write letters to their own company asking for the cash back.  

What I want to know is who the hell are writing these calls over and over and over?  How can a piss-ant such as myself win this easy based on some knowledge gained from a blog?  Where's the catch?    

Anyways guys, can you leave the ETFs alone for another 6 months or so because we start with very little.  Or at least will ya tell us when the headlines are coming out a bit in advance (WSJ:  "SLV found to have zero silver in said vaults, instead vault space was leased and converted to sauna for gay banksters")  But then again, maybe nobody will care because it's the fed writing all those calls via the unicorn proxy.  God if I could only find a way to explain this shit to my sheople co-workers.  

Thu, 12/09/2010 - 18:11 | 794099 butthead
butthead's picture

Roll me in my momma's grits I'm happier than a opossum eating puppy poop...been so happy since I bought my 1st monster box in 2001 when silver was $4.25 and been adding to it since.

Hi Ho Silver and away!

Thu, 12/09/2010 - 18:14 | 794108 e_u_r_o
e_u_r_o's picture

seriously where to get silver cheap in europe? (by cheap i mean without VAT or less than 20% or so markup)

Thu, 12/09/2010 - 18:19 | 794120 DavidPierre
Thu, 12/09/2010 - 18:22 | 794132 Kina
Kina's picture

You can buy it on-line at the Perth Mint.

Thu, 12/09/2010 - 18:49 | 794216 e_u_r_o
e_u_r_o's picture

and there wont be a VAT tax?

Thu, 12/09/2010 - 19:15 | 794289 Eric The Red
Thu, 12/09/2010 - 18:20 | 794125 Kina
Kina's picture

The Perth Mint is my new stepdaddy.

Thu, 12/09/2010 - 18:21 | 794129 ronin12
ronin12's picture

"...approximately 46 billion ounces of silver have been mined since the dawn of civilization.14

 

As mentioned above, there are only 1 billion ounces of silver left above ground in bullion form today."

 

So 95% of the silver ever mined has been "consumed"?

How do we know there are only 1 billion ounces left above ground in BULLION form?

How much of the other 45 billion ounces is available to be melted down from other sources? Surely, if the price rises high enough this will happen.

 

Thu, 12/09/2010 - 19:47 | 794349 zero intelligence
zero intelligence's picture

There is about 20 billion oz. in "artisanal" form. This is your forks and spoons, jewelry etc. If prices get high enough, some of this will flow into the "bullion" category. Basically, they will take old forks and spoons and send them to the smelter. But it takes a lot for that to happen, and it takes time.

Thu, 12/09/2010 - 22:55 | 794684 ronin12
ronin12's picture

Thanks for the reply. Seems 20 billion in artisanal form could certainly put downward pressure on the price.

I like Sprott but I think the omission of this info in his articles is sketchy.

Fri, 12/10/2010 - 17:53 | 797131 zero intelligence
zero intelligence's picture

I wouldn't say it would put "downward pressure" so much as resist upward pressure, at the point at which people are sending their heirlooms to the smelter. But it takes a lot to ask someone to melt down their silver jewelry and so forth, just for the bullion contained. It happened briefly in 1980. I would expect that around a 20:1 or better silver:gold ratio that might start to appear. It's not going to be a factor at 50:1. Even so, you can only smelt the stuff so fast. It's not going to matter in a short squeeze where someone needs 200m oz. of silver in a 3 month timeframe. There are only so many smelters in the world, and they are already working full time. Nobody has a smelter lying around for that once-in-three-decades forks-and-spoons-melt event.

Thu, 12/09/2010 - 18:23 | 794133 trav7777
trav7777's picture

the thing I focused on in the article was that the futures markets are stuffed with financial institutions, not producers and not consumers.

The futures market used to be producers selling short to fix a price and a consumer buying to get real delivery.

Now it's all a bunch of fucking banks trying to run the price action here or there to bust out all the producers and consumers.  Really they should think about position limits for those with no real silver.  It isn't as if there was no market liquidity before the invasion of institutional speculators who dwarf the real production levels.

Thu, 12/09/2010 - 18:26 | 794143 ronin12
ronin12's picture

+1

Just another part of the Wall St Casino.

Thu, 12/09/2010 - 22:00 | 794586 Bolweevil
Bolweevil's picture

No junks! Congratulations Trav, crowd's tough on you bro.

Fri, 12/10/2010 - 00:01 | 794803 Augustus
Augustus's picture

The futures market used to be producers selling short to fix a price and a consumer buying to get real delivery.

+++++++++++++++

 

That is simply not they way it has been.   Without the speculators there would not have been futures markets.  Your idea is a fiction.

Thu, 12/09/2010 - 18:25 | 794142 Internet Tough Guy
Internet Tough Guy's picture

ANOTHER: Sir, We meet again! I think, many buy the Silver (and platinum) for but one reason, it will increase always more percent than gold. It is always the thought of more leverage, yes? Even today, these metals have more use for the industry and find a better "concept of economic purpose" in the minds of investors. Many dealers say, this purpose is of better "investment reason" and as an aside, you also hold metal, like gold? I say, gold has "no investment reason" as it is "real money" that draws no interest from being "lent out". For this purpose, it is an asset that shows "the conclusion wealth" from our long life of investing in commerce! Given the option of investing for "economic purpose", there are and have been, many better items than silver (Dow Jones?). In future currency wars, silver will show a return, but it may prove as uncertain as the economy?

Remember, you buy "silver for purpose" but "trade currency for gold for conclusion". As the long history of gold does show, "time will prove all things".

Thu, 12/09/2010 - 18:57 | 794240 Ragnarok
Ragnarok's picture

Remember, you buy "silver for purpose" but "trade currency for gold for conclusion"

 

The purpose of buying silver is you break JPM and HSBC, which are also short gold.  One of the main steps towards Freegold is the destruction of the paper gold market, buying silver speeds that along.

Thu, 12/09/2010 - 20:03 | 794373 SWCroaker
SWCroaker's picture

I've read history.  I keep reading history.  And so far everything I've read suggests that throughout history, Silver has been the workhorse money of the people, in more times and places, than gold.  They've existed side by side in many places, but those where Silver served alone outnumber by far those where Gold was money and silver not.

Both Foster's Fiat Paper Money as well as Green's The Ages of Gold are excellent if indirect chronicles of what served as money in diverse cultures across this plant across the ages.

A highly representative example is China (where paper money was invented); after 400 years of fiat currency collapse cycles, the people eventually in disgust turned to money of their own choosing, refusing to have anything to do with the government's new fiat proposals for the next 5 generations.  And what did they turn to?  Silver, not gold.  Silver served them well until the changes of generations lost the lesson, and cycles of fiat boom-bust once again prevailed.  China was in a prosperous Silver "phase" when first contact with modern Western civilization took place.  The first evidence of that is Britain's push to get opium accepted for trade instead of their sterling, as the trade imbalance was rapidly draining their reserves.  The second is the history of the US silver "Trade Dollar" produced explicitly for insistent merchants in our trade with the Orient.

I buy Silver not because of its leverage, but because it is "real money", suitable to my station in life, and apt to be far more practical as a medium of exchange to me in the future than gold, the "money of kings".  I buy Gold too, but in small quantities and as a hoarded family treasure, to be sold perhaps as rarely as "never", or at most a handful of times during my life.

Can't help saying something like "I am Everyman, and one day my numbers will be Legion."

Thu, 12/09/2010 - 18:34 | 794175 greenewave
greenewave's picture

To find out more about the Imminent Collapse of the U.S. Economy, watch this video "Politicians Spending Like Drunken Sailors, American Dream Dead, Collapse Imminent" at (http://www.youtube.com/watch?v=DpAbDtl_t1Y).

by Anonymous

you'd be smiling to if you got the bonus package these banksters got. what a bunch of useless criminal sacks of crap these individuals are. Unfortunately, they are in control now. But the ability of the American sheeple to put up with this crap? is well documented. We are absolutely screwed, blued , and tattoed. The only thing we can do, is obtain gold and silver to protect our assets. Then, sit back and watch everything collapse. And is IS going to collapse.

Thu, 12/09/2010 - 18:37 | 794189 Ragnarok
Ragnarok's picture

Do I smell a secondary offer for PSLV?

 

I hope so.  Put your order in Mr. Sprott!

Thu, 12/09/2010 - 18:50 | 794219 DutchR
DutchR's picture

I hedged my silver today with 92 rolls of TP, only cost me 1 oz :)

Thu, 12/09/2010 - 19:11 | 794282 buzlightening
buzlightening's picture

hehehehehehe! Thx for LOLOLOL

Thu, 12/09/2010 - 19:00 | 794249 toathis
toathis's picture

If Ben's plan is going to destroy the dollar, why is it that Gold isn't moving 20 or more points everyday? I don't understand the doom. Are you upset that Ben's plan is working, are you upset that most have recovered all their gains since the crash in 2008?

I don't understand the Gold and Silver trade (If you people are being serious). Gold and Silver are not in demand at all. The wonderful world of free trade has been extremlly is responsible for bringing 2 billion people out of poverty and into the middle class over the past 10-20 years alone!

Cash is heavenly. Dollar isn't going anywhere. Neither is the FED.

Nothing Is Coming!

Thu, 12/09/2010 - 19:09 | 794272 Bastiat
Bastiat's picture

Right, we can just print infinite carloads of confetti and everybody in the world will continue to give us real stuff for it and scarf up our bonds promising them more confetti in the future.  You might consider that a confidence game depends on confidence. 

Gold is nothing special -- it's just that it has always been money, the recognized store of value and it is cannot be diluted into nothingness because supply is limited.  Silver's monetary history is long as well -- and it also is indispensible in many modern products.

But most importantly:  they pissed in the monetary soup once (or 10 trillion times) too many.  People are starting to realize it's not food anymore--its sewage.

Thu, 12/09/2010 - 20:39 | 794434 Arius
Arius's picture

right but you cannot eat it...its a waste of time to argue with these people when warren buffet (america's titan) talks about digging a hole etc...its just arrogance...

Fri, 12/10/2010 - 07:39 | 795125 ViewfromUnderth...
ViewfromUndertheBridge's picture

Walk on the grass;

Litter if you want;

Smoke in the airplane toilet;

But, Do. Not. Feed. The. Troll.

Thu, 12/09/2010 - 19:50 | 794350 tmosley
tmosley's picture

Cocaine is a helluva drug.

Thu, 12/09/2010 - 21:12 | 794494 Bay of Pigs
Bay of Pigs's picture

"Gold and Silver are not in demand at all."

Junk for stupidity. 

Thu, 12/09/2010 - 21:16 | 794506 Hooter Shaker
Hooter Shaker's picture

Pass the doobie!  You've had enough!

Thu, 12/09/2010 - 23:39 | 794770 StychoKiller
StychoKiller's picture

The line between sarcasm and dyed-in-the-wool stupidity is very fine -- which side of it are you on? :>D

Thu, 12/09/2010 - 19:02 | 794258 KidDynamite
KidDynamite's picture

Ok folks - so how do these two Sprott articles fit in with the theory that JPM is short the equivalent of 1B (or is it 3B? depends on who you ask) ounces of silver (paper, futures) ???

The May article pegs the combined open interest of the 8 largest players at only 330mm oz.  And the current open interest is the equivalent of 870mm ounces, and it looked today on the COMEX website that options open interest outstanding was approximately the same amount.

So - does anyone have any real, concrete evidence of a massive naked short position held by JPMorgan? (by the way - someone writing an article suspecting that JPM is naked short a billion oz of silver futures is not my idea of convincing)...  If they were naked short a billion or more ounces of silver futures, they'd have a massive loss somewhere in their 10q.  I don't see it.  Show me the (lack of ) money.

 

and note - I'm not a silver hater - I'm long SLV (yeah yeah yeah, save the "physical" lecture) - but this "bankrupt JPM" thing is perhaps the craziest thing I've ever seen online.  It's ludicrous. 

Thu, 12/09/2010 - 19:22 | 794304 DavidPierre
DavidPierre's picture

You don't need a weatherman to know which way the wind blows.

The swift don't win the race. It goes to the worthy, who can divide the word of truth.

Let us not talk falsely now, the hour is getting late

The naked truth is still taboo

To live outside the law you must be honest.

Idiot wind, blowing every time you move your teeth. You're an idiot babe, it's a wonder that you still know how to breathe.

Thu, 12/09/2010 - 19:45 | 794347 KidDynamite
KidDynamite's picture

Ok, so you're a Bob Dylan fan - I hope you know Chimes of Freedom - his greatest song (Springsteen used to do a sick sick cover of it: http://www.youtube.com/watch?v=G3onnJuBS18

but how about the topic at hand: seriously - one option (which it seems most around here choose) is to believe the conspiracy theory until it's proven false - I find that patently absurd, as all evidence already points to the claim being false -the open interest numbers don't support the theory, JPM has no massive loss on their balance sheet.. .

My preferred option is to use reason and logic to deduce that it's an absurd allegation with little evidence backing it up - other than the breathless screamings of a variety of people who all benefit by creating hype for precious metals.

I'm on board with the pm bull train, but this JPM idea is silly.  Watching videos on Max Keiser's website of poor ignroant mideducated people who learn everything they know about the subject from hypsters and conspiracy theorists is flat out sad and depressing.  I mean, you guys understand that just because a precious metals dealer makes a cartoon video doesn't make it fact, right?  Repeating it over and over again on the internet doesn't make it fact - right?

It's like the X-files - I WANT TO BELIEVE - I'm begging someone - anyone - show me any sort of evidence that JPM is carrying a billion ounce silver short (and no - the manipulation suit is not evidence of a short position).

Thu, 12/09/2010 - 20:55 | 794454 DavidPierre
DavidPierre's picture

Funny that you bring up the X-Files.

I was working in Vancouver, (Scenic Carpenter), for X-Files on the morning of 9/11.  Now... you just cannot imagine how work just came to to a screeching halt as the news went through the studio.  They brought a TV down from one of the production offices and set it up in the shop and I mean every one's mouth just hung open. 

Chris Carter (director) was reported to be white as a ghost and thereafter refused to do any same day media interviews . All the higher-up mucky-mucks were just apocalyptic and mumbling between fits of swearing and dis-belief.

Finally... we low level labourers were just sent  home.  You want to get into "conspiracy theories"?  You ain't heard nothing compared to what I listened to on the shop floor for the next month about this episode.

So you just go on and on with your bullshit about "poor ignroant mideducated people". (Everyone expect you... of course)

911 Conspiracy predicted in X-Files

http://www.youtube.com/watch?v=rIZ205ccX8M

Dean Haglund (actor on X-Files, Lone Gunman)http://www.youtube.com/watch?v=f31nEc5RSYI&feature=related 

"Time will tell who has fell

                       And who was left behind"

 

Thu, 12/09/2010 - 22:44 | 794649 KidDynamite
KidDynamite's picture

ahhh - so you took offense to "poor ignorant miseducated people"?  There are certainly a lot of knowledgeable metals people in this thread - I was referring to the monkeys making their own Youtube videos that demonstrate a thorough lack of understanding of the facts and reality.  The reason I posed these questions to this thread is that they should be easily answerable for anyone who actually knows what they are talking about.

 

but anyway, you still, of course, have not provided a shred of evidence that any of it could possibly be true.  If it makes you feel better to high five with an online community more guilty of groupthink than any I've ever encountered, post quotes that make you feel really cryptic and cool, and talk about "putting another bullet in JPM,"  then more power to you.    

 

I'm hearing that JP Morgan is short 40 trillion tons of aluminum.  If every american bought 3 cans of chicken soup, we could bankrupt them in 3 weeks.  Get on board.

Thu, 12/09/2010 - 23:11 | 794718 Bolweevil
Bolweevil's picture

"an online community more guilty of groupthink than any I've ever encountered"
So why stick around? Seriously. Every online community has slant, that's why we're all here. Your question is valid. I've thought the same thing at times. Sift through the wreckage. Follow posters who you appreciate. Look for the similarities. Just because your paranoid doesn't mean they're not after you.

Fri, 12/10/2010 - 02:09 | 794721 DavidPierre
DavidPierre's picture

BabeFireCracker:

I take no offense to "poor ignorant miseducated people".

I is a talkin with yous...ain't I.

Thu, 12/09/2010 - 23:41 | 794775 StychoKiller
StychoKiller's picture

There's around $14Trillion reasons why JPM, and pretty much everyone else, is headed for disaster, short positions or not!

Fri, 12/10/2010 - 07:05 | 795111 advocacy
advocacy's picture

This is a good question.  Where *does* Keiser get the over 3 billion-ounce figure for JP Morgan's silver short position? 

According to the November 30 CFTC report, there are only 872 million ounces held short (a total of 174,000 contracts times 5,000 ounces each; see http://www.cftc.gov/dea/options/other_lof.htm).  According to Jon Benoit (“J.P. Morgan sued for Silver Market Manipulation, Market Watch, October 27, 2010, http://www.marketwatch.com/story/jp-morgan-hsbc-sued-for-silver-manipulation-2010-10-27, which Keiser cites in his Guardian article), “A CFTC weekly report for Oct. 19, the most recent period, shows that less than four market players hold 24.3% of all net bearish bets in the silver market. J.P. Morgan and HSBC are among those market participants, The Wall Street Journal reported, citing silver traders and a person close to the investigation.  In recent months, however, the banks with large futures positions have sharply reduced the size of their holdings.” 

Even if the top four did not further reduce their positions in November, that would mean they held no more than 212 million ounces in short contracts.  If JPM and HSBC were the biggest of the four, that would place their collective holdings at something like 106-212 million.  Let’s split the difference and say 159 million.  A position like that could be closed for less than $5 billion at the current $30/oz. price.  A lot of money to me but budget dust to JPM and HSBC.

Are my numbers and/or or math off?

Fri, 12/10/2010 - 08:04 | 795142 ViewfromUnderth...
ViewfromUndertheBridge's picture

Good points, yours and above.

I think it is unfortunate Sprott does not address the estimated 20Bln ounces of family silver...easily accessed in reality.

Jim Sinclair does not see evidence of a short squeeze in silver based on the open interest on Comex.

Now it's up to the Buyers of Size to perform, according the London Source on King World News...

To me, gold is money in a mad-fiat world makes sense. The natural/ traditonal silver:gold ratio of 17/15:1 makes sense. Silver as poor mans gold makes sense...and then there is China.

Fri, 12/10/2010 - 17:59 | 797155 zero intelligence
zero intelligence's picture

The multi-billion ounce figures are the total estimated silver short, in the form primarily of LBMA "deposits," ETFs without 100% physical holdings, futures, etc. etc., among all banks.

 

Thu, 12/09/2010 - 19:02 | 794259 DoctoRx
DoctoRx's picture

Any info about Claymore's TSX-listed SVR fund?  Appears to be all physical.  Trustworthy?

Fri, 12/10/2010 - 09:32 | 795198 justbuygold
justbuygold's picture

Stay away from Claymore Silver.  They have had massive redemptions and have the highest MER's of all the big silver funds.  Also are holding silver in their inventory that is listed as "Unkown" origin. Therefore it doesn't qualify as a " Good delivery Bar" like it states they must hold in their prospectus.  They also hold their silver in London and NY, not just in Canada. Thats a negative as well fro juristictional point of view.

Aslo see my previous posts in the thread on Sprott's PSLV.  Some question marks for sure.

Thu, 12/09/2010 - 19:05 | 794267 LeBalance
LeBalance's picture

I wonder if anyone has this perverse perspective.  Eric Sprott certainly has done his homework about shares of SLV versus shares of GLD purchased.  $8 to every $1 in advances.  Wow!  If everything was honest we would certainly expect silver to da moon.

But everything is not honest and SLV and GLD are vehicles for shorting their respective PM. Sooooooooooooo..........

One would expect silver to be more suppressed for longer as long as folks are buying these ETFs.

Comments?

Thu, 12/09/2010 - 21:11 | 794492 Goldilocks
Goldilocks's picture

Indeed, I have that perverse perspective & at this point in the game I wouldn't trust any ETF ... including Sprott Physical Silver Trust (PSLV).

"Wow!  If everything was honest" <-- Ha Ha Ha, that's funny.

Thu, 12/09/2010 - 19:22 | 794303 gwar5
gwar5's picture

Eric Sprott has a vested interest in Silver, but I trust him  and he puts his money where his mouth is.

Have heard no complaints of his PSLV bullion physical storage -- the anti-paper silver choice. There needs to be one.

Smart of him to perceive the danger of leveraged paper PM's and provide an alternative.

 

Thu, 12/09/2010 - 21:17 | 794507 Goldilocks
Goldilocks's picture

Smart of him to perceive the danger of leveraged paper PM's and provide an alternative.

... but, is he really providing an alternative? Go ahead & trust him if you want to ... but know this, trust is in short supply these days.

Fri, 12/10/2010 - 00:25 | 794842 CitizenPete
CitizenPete's picture

Due Diligence is in order.  There are the good guys and the bad guys. Call me gullible if you wish, but James Turk (GoldMoney), and Eric Sprott are two in the good guys side.  Not everyone wants to (or is able to) hold physical (I won't go into examples here), so given the option for a long term holding you have a few choices.  If your shorting less than 500,000 FRNs for PM; then Gold Money, Bullion Vault, or Sprott would be my three recommendations for your further due diligence.   Over 500K you have other options (which I will not go into here.) 

 

Diversify PM (even between physical and allocated) may not be a bad way to go. 

 

 

Thu, 12/09/2010 - 23:29 | 794752 Augustus
Augustus's picture

Actually he has a vested interest as he will charge you a fee to put your money where his mouth is.  Would a mere quarter point a year on 500,000,000 pay your tailor and butcher bills?

Thu, 12/09/2010 - 19:45 | 794345 zero intelligence
zero intelligence's picture

GFMS used to estimate that there was 600m oz. of silver bullion. Where did the extra 500m come from? Basically, it got VEEERY suspicious that publicly traded ETFs had about 500m oz., with 600m oz. in the world. So they had to up their estimate. But I doubt that most of that ETF silver is there. Even if the ETF manager is on the up-and-up, their banker-custodians have almost certainly leased it out. JPM is the largest short on the Comex and also the SLV custodian. It's so obvious.

Thu, 12/09/2010 - 19:45 | 794346 Syntaxkat
Syntaxkat's picture

Please, Please wait until January for market movements or corrections, I'm waiting on my income tax check.  An avid reader of ZeroHedge but a broke college student.

Thu, 12/09/2010 - 19:49 | 794351 zero intelligence
zero intelligence's picture

BTW, if you want to buy silver, I suggest Tulving.com or Apmex.com to start. Nice low prices on 100oz bars and 90% coin bags, free shipping. Easy as pie!

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