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FMX Connect Morning Gold Fix: Silver Warehouse Shenanigans Or The Real Deal?

Tyler Durden's picture




 

From FMX Connect

Silver Warehouse Shenanigans or the Real Deal?

Our friends at Zerohedge did some excellent discovery and analysis last night on the recent drawdown in Comex Silver stocks eligible for delivery. We have personally seen this activity before, and while we do not doubt the authenticity of the draw down from the Registered (for delivery) stockpile described below; We add that this has happened many times in the past in short -cons meant as exit strategies for big longs.

So far, if this is an exit strategy, it is basically what happened in 1997 when Buffet took delivery, but on a much bigger scale, a long –con if you will. But if the reason is that someone bigger that the usual investor community with pockets and a will deeper than all the Bullion Banks combined has decided to de-dollarize their FX reserves, like say China, then this is the way to do it. We think this is real and will describe why briefly after the ZH analysis.

The essence of ZeroHedge’s work is here:

A week ago we noted something peculiar: in one day, COMEX depository Scotia Mocatta (one of five in the world) saw a 25% transfer of silver from "registered" (or deliverable physical) to "eligible" (or "undefined" - a distinction discussed previously, and also below:….And while last week it was Scotia Mocatta, today it is HSBC and the Delaware Depository, and the reason given: "Adjustments include reporting classifications of t oz that were moved from Registered to Eligible. Please see Special Executive Report reference 5736 for additional information. http://www.cmegroup.com/tools-information/advisorySearch.html#."

The CME’s Detailed explanation goes like this:

A correction to the COMEX Metal Depository Statistics Stock Reports published on April 27, 2011, has been made to reflect a change in the reporting of metal from the Registered category to the Eligible category. This change reflects paper warrants that have yet to be converted to electronic form. The metal represented by these paper warrants, which will now be reported in the Eligible category, will continue to remain eligible for delivery against COMEX futures contracts provided holders of the paper warrants convert them to electronic form.

Exchange metal reported in the Registered category represents troy ounces of metal that meet the contract specifications as defined in the Exchange Rules for which an electronic warrant has been issued.

Exchange metal reported in the Eligible category represents troy ounces of metal that meet the contract specifications as defined in the Exchange Rules for which an electronic warrant has not been issued.

They go on to cite SilverAxis in describing what Eligible vs. Registered means

And as a reminder for those unfamiliar, here is a distinction between "registered" (real) and "eligible" (somewhat "questionable"), courtesy of SilverAxis

For those who aren’t familiar with the terminology, the registered category of COMEX warehouse bullion stocks generally refers to gold and silver bars against which COMEX warehouse receipts are outstanding. The COMEX publishes these stocks on a daily basis and they can be found here: Silver | Gold. The registered category is the total pool of gold and silver available at any time to meet delivery requirements under expiring futures contracts or to establish initial futures contract positions through a transaction called exchange-for-physicals (I’ll explain this another time). It is important to realize, however, that many parties holding COMEX gold and silver in registered form have no intention of making their holdings available for delivery. By this I mean that such parties are neither (1) holding a short futures position against the warehouse receipt nor (2) willing to sell their registered metal (warehouse receipts) to a party with a short futures position. Indeed, a substantial portion of those holding registered metal would have acquired the COMEX warehouse receipts by holding long futures positions for delivery. In other words, these registered stocks are held for investment and not for commercial purposes.

In comparison, the eligible category of COMEX warehouse bullion stocks generally refers to bullion held in the warehouses that meets the specifications of an acceptable COMEX bar (proper weight, size, purity and refiner) but does not have a COMEX warehouse receipt issued against it. For example, an investor might purchase several 1,000 oz. bars of silver from a dealer and then deliver the bars for allocated storage at a COMEX warehouse. This is a private arrangement and has nothing to do with the COMEX. Unless these bars are officially registered (the easiest way to do this is through the aforementioned exchange-for-physicals), they will remain in the eligible category until withdrawn from the warehouse by the investor. Thus, the appropriate way to treat eligible COMEX warehouse bullion stocks is that they represent metal that could potentially be registered at some point in the future but cannot presently be used to make delivery under a short futures contract.

Our Two Cents

What could this all mean:

1. A long is setting up his exit strategy by creating the impression that there is less silver available that actually is. – if this is true, it is irrelevant. Perception is reality and someone is taking the risk.

2. In the past the short-cons were conducted by trading firms like Phibro with the complicity of the Bullion banks, who got out of their way. If someone like Phibro is involved, and we do not think they are, they could be as agent for someone much bigger than Buffet or Soros. Someone like a country.

3. We think the wildfire of this strategy (if it is not a fully genuine delivery issue) is spreading to gold. This would be unprecedented for the following reasons.

a. One can control the Silver market with much less capital than gold.

b. Silver does not have currency status, gut Gold does. Every cental bank has gold in its reserves. We don’t think any have Silver.

c. Silver is consumed while gold is essentially not. Hard to create a squeeze in something that every ounce that has ever been mined still is in existence.

This make Silver the perfect product to buy if you genuinely think it is undervalued, want to de-dollarize your reserves, or just want to screw with the Banks who have become complacent over the years doing metals “carry trades” wherein they lease Silver, short it and take the proceeds to invest in something with a higher yield, betting they can get producers to sell to them when needing to cover. But ZIRP and TBTF have given them the feeling that their VaR issues are not their own, they are the tax payer’s. At what point does a dollar cost averaging strategy just become a Martingale bet? And as we know, 0 and 00 do come up once in a while in Roulette, making Martingale bets a bad long term strategy.

It doesn’t matter if it is an exit strategy or not. We are sure the monster is stronger than the creator now. The grass roots movement into Silver has contributed greatly to this. It is a form of proletariat uprising if you will.

Gold: the new Silver?

But Gold is acting strangely now as well. Spreads have weakened over the last month and option buying has exploded. If the Silver play is successful then could Gold be next? We don’t think so, but a large sympathy move could happen at some point in the least. “ Hey, it worked in Silver, let’s spend a little in Gold and see if we can make spook the market and take profits of it before Uncle Sam taps our bosses on the shoulder.”

In Silver the “Tell” is the spread market, as options are not continuously traded. In Gold, it is the options activity that gives better clues for our own analysis.

Also worth noting to all you JPMorgan haters:

There are a handful of players in Bullion. And historically, when the outside sheep have been sheared (the supply of producers clients selling too cheaply, investors buying too high is exhausted or insatiable) they almost always cannibalize one of their own.

So, with 5 major players sitting at a poker table, one of which has exclusive info in the form of a client order… how is he going to get filled? He is going to take on another bank. And the last bank to figure it out is toast.

1994- silver call exercise: Republic smoked the other banks although it want their order to fill.

1997- not sure anyone did well here as Phibro was ninja like in its execution for Buffet. And then took delivery for him. The producers took the fall on this one

1999-Gold Ashanti default- Goldman and we think MS cleaned up at the expense of all the other dealers (Ashanti was their client and defaulted. Goldman knew first. Their credit department got smoked, but their trading, not so much.

The Banks Will Eat Their Own:

We think cannibalization is starting here, and although the TBTF concept will save any and all who suffer, it also lets any receiver of government largesse live in denial that much longer. There is some suffering now. Our empirical evidence in Gold is that the dealer sell side business has dried up in calls, while at least one dealer is buying everything.

One thing you have to say about the Bullion Banks: if they cannot keep markets managed, they are quick to recognize the grass roots phenomena that is public interest in Silver, and (maybe Gold)and get in front of it.

Our Advice:

If you are long Silver and feel nervous about it then sell 1/3 of your position. If you are not nervous then you should be. We are headed for a blow-off top with a quick reversal, or a sustained rally for another year or 2. You should be equally miserable if either of those happens. So sell some.. go buy farm land in Argentina with your profits.

 

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Thu, 04/28/2011 - 09:08 | 1215434 Badabing
Badabing's picture

“COMEX depository Scotia Mocatta (one of five in the world) saw a 25% transfer of silver from "registered" (or deliverable physical) to "eligible"”

Could this be related to University of Texas taking delivery.

 

last week it was Scotia Mocatta, today it is HSBC and the Delaware Depository.

If it is related to who is next to take delivery the MSM will ignore it,

I wonder how the royal wedding is going?

Thu, 04/28/2011 - 09:41 | 1215522 strannick
strannick's picture

The author suspects that these COMEX movements of silver from dealer to registered are just a grandiose headfake so a long can unload. I think its more basic than that, and there's no need to get too circumbobulated or spy-novel about it. THeres @#$%-all silver out there, so folks are grabbing what they can get.

Thu, 04/28/2011 - 10:37 | 1215681 cowdiddly
cowdiddly's picture

 

Just another one of those chartists that come over from the stockmarket and try to apply their ideas to precious metal. Never works. Sorry pal I've got 4 coins that were bought after they passed Bretton Woods, I paid 42 dollars for those coins which was more that my weekly salary then. I think those original 4 have served me well over the years. Ive rebalanced my allocation a little heavier that normal of late simply because I see not one alternative investment I care to invest in this environment. Stocks, Govt Bonds,CDs? Don't make me laugh. Futhermore, I do not see any major world currency without issues with the possible exception of Australia, Switzerland and maybe Singapore and Taiwan. With our Fed policys being what they are without a hint of change until maybe the next election(You actually think the Fed is going to change course this close to elections?) I am comfortable to sit tight for a long while. If anything I would sell a few gold coins here as I think its price is a little high in a fundamental way,but still underpriced in a demand sort of way. As for Silver, it isnt anywhere near its fundamental value yet after 30 years of price suppression. The guys saying that it only takes 5 dollars to dig out of the ground are right. Thats because they have kept the price suppessed for so long Nobody could actually mine a silver only mine for profit. The only silver being mined at 5 buck was a residual metal obtained as a byproduct from the refining/mining other metals like lead and zinc and just assigned a five dollar price or even at a loss in some balance sheets. Will Silver be mined for just silver now? You bet your ass, there is going to be a worldwide scramble to open new siver mines but opening a siver mine is not something that just appears overnight. The paper market may blow off in the mean time and the price suppession game starts all over again, but with demand what it is today, I highly doubt it. What happens to your paper prices is of little concern to me.Sorry the market is a little tight for ya. BITE ME 

 

Thu, 04/28/2011 - 10:53 | 1215805 Imminent Crucible
Imminent Crucible's picture

No kidding. All he can come up with is "blow-off top and reversal, or else a sustained rally for another year or two"? Pathetic.

I could have forgiven his uselessness until he said "buy farmland in the Kirchner Kleptocracy". Idiotic. Brazil, maybe. Not Argentina.

BTW, India had 87 million ounces of reported silver in their reserves in 2002. It's pretty much gone. Same for China. The cupboard is bare.

Thu, 04/28/2011 - 11:51 | 1216220 FeralSerf
FeralSerf's picture

The price of farmland in Argentina may be discounted enough to compensate for the Klepto-Kirchner phenomena.  Foreigner purchases are probably more vulverable to quasi-confiscation, so there probably should be some cover for that.

There's been so much foreigner purchase and development of farmland in Brazil that it's probably about time for some blowback.

Thu, 04/28/2011 - 11:17 | 1216014 Urban Redneck
Urban Redneck's picture

The author makes some valid points, the most important of which is every day there are a couple of hands of high stakes poker that are played by five players juggling the conflicts their own interests and their clients'.  The stakes of that game go up as the price of silver increases, and they don't care about anyone here. 

 

The tactics remain the same and the current strategies are only decided and known by those who have a seat at the table.

 

There are some key differences between today and '94, '97, and '99.  In no particular order they include: the competing paper volume of ETFs,  the supply needs of physical silver required to back the paper ETFs, the downward trend of USDX as opposed to the prior appreciation trend, the tightness of supply in the retail physical market, the emergence of CBGAs and the current tendency of CBs to be acquirers of PM's (technically more applicable to the gold market), the number of possible large buyers greatly exceeds the number of possible large sellers, the uncertainty regarding a possible replacement to the current floating exchange rate mechanisms, the growth in size and influence of emerging and non-G-7 economies and their CBs, the price volatility over the preceding months and the ability of the market to absorb measurable changes in supply.

 

The tactic of driving the price higher over the short-term is desirable to the exit of a long or entry of a short position. The tactic of driving the price lower over the short-term is desirable to the exit of a short or entry of a long position.  There has been evidence in the last week of large players executing conflicting strategies, and employing the tactic of over-correction of reversals to achieve the desired ends.  Anyone who says that a series of back-to-back 10% moves in either direction is a black-swan event in this market is probably dumb enough to accept a wager that the sun won't rise tomorrow and not serve as bookmaker on the bet.

 

Opening or maintaining any leveraged position is a potentially suicidal proposition without adequate reserves in the current market environment.  A low risk appetite and a high portfolio concentration in Silver is a potential recipe for slightly more fatal suicide.  Farmland in Argentina maybe attractive, but the current kleptocrat-in-chief may screw you worse than the five kleptocrats with LBMA poker seats.  If you have excess farm land in Brazil owned long-term, the significant appreciation in both land and currency prices actually make a desirable exit point for non-core positions, and increase the market entry opportunities for those seeking to enter the market.

Thu, 04/28/2011 - 17:47 | 1218060 Urban Redneck
Urban Redneck's picture

Someone at FMX really could have mentioned that SEVERAL METRIC FUCKLOADS of paper are being moved from the Comex to the NYSE so Blackrock probably wants to back up the paper with at least some Ag, and might want to move that Ag from one side of the LBMA vaults to the other, especially after their recent press release, where they implied there was no leasing going on in SLV.

  http://www.sec.gov/cgi-bin/browse-edgar?CIK=0001330568&action=getcompany

Thu, 04/28/2011 - 11:25 | 1216060 smartknowledgeu
smartknowledgeu's picture

"b. Silver does not have currency status, gut Gold does. Every cental bank has gold in its reserves. We don’t think any have Silver."(spellcheck??)

Silver has returned to monetary status already. As far as countries not owning any silver, I'd bet you a big bag of silver coins that many Sovereign Wealth Funds have snapped up silver recently, specifically China, Russia, Iran, and Korea just to name a few.

Thu, 04/28/2011 - 10:20 | 1215745 Creed
Creed's picture

 We are headed for a blow-off top with a quick reversal, or a sustained rally for another year or 2.

 

This guy wrote an article based upon a coin flip? WTF.

 

Thu, 04/28/2011 - 10:55 | 1215876 DosZap
DosZap's picture

Any idiot could come up with those potential scenarios.

Hell,I may even start writing articles.

To sell, or not to sell, dat is de quessstion.

What a moron.

Thu, 04/28/2011 - 11:02 | 1215915 dark pools of soros
dark pools of soros's picture

..he uses Martingale Bets so of course he likes coin flips

Thu, 04/28/2011 - 09:16 | 1215451 CD
CD's picture

"We are headed for a blow-off top with a quick reversal, or a sustained rally for another year or 2. You should be equally miserable if either of those happens. So sell some.. go buy farm land in Argentina with your profits."

While I take it that a sustained rally for the next year or two might be partly due to an otherwise collapsing global economy/dollar, but how is selling silver going to help in that regard? Also, define your understanding of blow-off top: 20% 50% 80%?

Thu, 04/28/2011 - 09:24 | 1215493 6 String
6 String's picture

Yeah, the closing was totallly moronic. It might go up; it might go down. So go buy something else like farmland in Argentina?

It's amazing. Lately I would rather read the ZH "readers," the content has been far better.

Thu, 04/28/2011 - 09:46 | 1215602 Pants McPants
Pants McPants's picture

At first blush the closing sounded strange to me too.  Now I think the message is to trust your gut, roll paper profit into physical, and reduce position so as to not get caught flat footed.

The next few months should be interesting, but not in a double/triple your paper profit sort of way.

Disclosure: I've made some $$$ on paper silver; not trying to project my position onto you.  Agree re: ZH "readers" too.

Thu, 04/28/2011 - 10:18 | 1215728 GetZeeGold
GetZeeGold's picture

 

The closing was absolute HS.....just ANOTHER that missed the boat.

 

 

Thu, 04/28/2011 - 09:38 | 1215552 fmxconnect
fmxconnect's picture

Our understanding isnt quantified ino % movement, it is quantified in market intel, open interest changes and velocity.

 

The selling silver comment is basically saying if you feel you are saying things like  "Wow" and this is "awesome"... OR im worried about my positon here. Then lighten your position to mitigate the emotionality attached to it. And reasses more objectively. We have found that both emotions, euphoria and worry cloud objective investment decisons.

 

Sorry to say, if you don't think that helps, you may just be the guy long who is telling his grandchildren " I was longsilver at 25, and it went to 49. I sold none. Then it went to 69 adn i was right, so i sold none.... then it went to 19.00 here is your inheritance kid.

Thu, 04/28/2011 - 09:43 | 1215571 6 String
6 String's picture

Too funny, and while I know you weren't replying to me, you should probably give up writing for one. Two, if your going to dole out investment advice you A) should hold yourself out as an advisor and B) at least have the dececency to post your credentials--via you long term CAGR--so at least we know what kind of smuck we're dealing with.

Thu, 04/28/2011 - 21:09 | 1218700 unum mountaineer
unum mountaineer's picture

it's okay to dole out the advice so long you define the angle of the investments. I think it is time to really start discerning the paper from the physical market because it really gets to the core reasoning why the investor is making the decision(s) they are making. I mean if somebody has a stash of physical for insurance for a just in case moment are they really a tin foil hatter? To that effect somebody that keeps a first aid kit....? Bottom line: There are varying means and reasons behind including silver in your portfolio. Educate the people in complete fashion and fmx commentary will go far for sure.

Thu, 04/28/2011 - 11:00 | 1215760 Trifecta Man
Trifecta Man's picture

You forget one thing.  The government will never stop the growth in debt, and it's now too big to service.  Ergo, they will monetize it.  Gold and silver are two of the best ways for the intelligent person to protect themselves against this government/Fed counterfeiting fraud.

Thu, 04/28/2011 - 11:02 | 1215913 Smu the Wonderhorse
Smu the Wonderhorse's picture

Precisely.  Fundamentals are fundamentals.  The US and most major nations are broke and ultimately can only try to print their way out of the hole.  It's happened about a hundred times before in history. 

The metals price-suppression regime is breaking down, or being allowed to break down partially, hence the dramatic moves, which are a bit frightening.  STOP THINKING ABOUT PRECIOUS METALS AS INVESTMENTS AND START THINKING ABOUT THEM AS INSURANCE.  They are POLITICAL HEDGES: they are the only monetary instruments that do not rely on "the full faith and credit" of XYZ government.  When that "full faith and credit" is tapped out, you still have your metals (and farmland in Argentina, too -- not the worst idea).

Thu, 04/28/2011 - 12:55 | 1216614 knowless
knowless's picture

land is like gold or silver, meaningless if you can't hold it in your hand. if shtf the borders will be closed, and all foreign holdings nationalised, everywhere, either by decree or just as a function of people taking what they can literally get their hands on.

 

I don't disagree with you.

Thu, 04/28/2011 - 11:42 | 1216173 glenlloyd
glenlloyd's picture

Thanks for providing some insight, even if others don't appreciate it.

I'm sure it was dissed for not having BTFD or "Silver Bitchez" somewhere in the text.

Thu, 04/28/2011 - 09:42 | 1215566 strannick
strannick's picture

This entire article is just a rationale for another TA monkey's technical view that silver is 'over-bought'. Yeah we will be equally miserable no matter how the economy collapses, thats why we buy silver, eejit.

Thu, 04/28/2011 - 09:18 | 1215458 Careless Whisper
Careless Whisper's picture

And as we know, 0 and 00 do come up once in a while in Roulette,

bwahahahahaha. same odds as any other number on the wheel. 1 in 38, unless you're playing in a wall street casino.

Thu, 04/28/2011 - 09:18 | 1215460 Dangertime
Dangertime's picture

Silver can only go uuuuupppppp!!!!!!  This guy is a banksta shill!  Burn him at the stake!

Thu, 04/28/2011 - 09:30 | 1215523 tmosley
tmosley's picture

You are an embittered fool.  Time to leave.

Thu, 04/28/2011 - 09:34 | 1215537 UninterestedObserver
UninterestedObserver's picture

No he is getting rich shorting silver - in fact he is up HUGE on his SLV puts even though they are all trading at their lows 

Thu, 04/28/2011 - 09:35 | 1215547 Dangertime
Dangertime's picture

They are red now....but I doubt that will be the case for long.

Thu, 04/28/2011 - 09:55 | 1215646 UninterestedObserver
UninterestedObserver's picture

They have been red everyday except you might have had a part of your position that was up for a day. Silver over $49 and at $60 you will be toast.

Thu, 04/28/2011 - 10:29 | 1215770 Creed
Creed's picture

wow...look at the concerted metal bashing

 

thanks for keeping your agenda clear

 

topcallingtroll has a little more subtilty, you guys are obvious

Thu, 04/28/2011 - 09:39 | 1215554 writingsonthewall
writingsonthewall's picture

You are a irresponsible free market 'believer' - I think it's time you left.

 

When do you meet? - Sundays in the local hall? Do you sing carols to the 'second coming of the free market'?

 

It's a shame so many people 'play' but never bother to 'read the rules' before they start.

 

 

Thu, 04/28/2011 - 09:44 | 1215587 tmosley
tmosley's picture

You refuse to accept basic definitions, so anything you say is faulty.  Sorry :(

Thu, 04/28/2011 - 10:11 | 1215710 writingsonthewall
writingsonthewall's picture

You have no definitions for me to accept.

It's a shame that you don't even know the defintion of the system you spend so much time defending.

Still I suppose you defend your local football / hockey / baseball team too - even though you were the patsy of the football / hockey / baseball team at school and have no idea how to play.

 

Loyalty does not always have it's bonus...

 

Thu, 04/28/2011 - 10:58 | 1215907 tmosley
tmosley's picture

In our last tangle I explicitly defined every type of system.

You keep saying that the current system is capitalist.  It isn't.  I am not affiliated with it save to extent that I exist and earn their fake money (and quickly trade it for silver).

Thu, 04/28/2011 - 10:20 | 1215741 Bicycle Repairman
Bicycle Repairman's picture

"You are an embittered fool."

Well put.  Now everyone should ignore the troll.

Thu, 04/28/2011 - 11:44 | 1216194 glenlloyd
glenlloyd's picture

WTF are you still doing here? Last time I saw a "collection" of your posts and it was nothing but infantile giberish about how the silver longs were wasting their time, now you come limping back in here talking about how 'silver can only go uuuuupppppp!!!!!"?

Jackass

Thu, 04/28/2011 - 09:21 | 1215485 UninterestedObserver
UninterestedObserver's picture

OMG you are a fucking moron

Thu, 04/28/2011 - 09:25 | 1215488 Badabing
Badabing's picture

Meth man

Did you know that slv etf is one of the only places in the PM market that a registered participant can take delivery of a basket and drive the price down. Actually it’s very bullish.

Do your homework

Thu, 04/28/2011 - 09:28 | 1215509 Math Man
Math Man's picture

Do you even know how the creation/redemption arb works?  It's the reason SLV tracks the NAV so closely throughout the day.  And it's not bullish at all when it starts going the other way.   All the silver that is arbed out is sold on the spot market.

 

Everything is bullish to the silver longs.  Inflows, outflows, it doesn't matter.  Too the moon bitches!

You're all going to get slaughtered.

Thu, 04/28/2011 - 09:33 | 1215527 Badabing
Badabing's picture

Are you sure? How can you be so  sure?

Dick do your homework!

Thu, 04/28/2011 - 09:41 | 1215575 Math Man
Math Man's picture

I have done my homework....   you're the one who has NO IDEA how the mechanism works. 

When the arb runs positive, physical silver is bought at spot and deposited in the trust.

When it runs negative, silver is sold...  

Watch out.  It comes out faster than it goes in.

 

Thu, 04/28/2011 - 09:51 | 1215624 Badabing
Badabing's picture

OK know you pissed me off!

No more computer until

Do your homework

Thu, 04/28/2011 - 10:03 | 1215678 Math Man
Math Man's picture

FOFOA is wrong and does not understand the arb.

Thu, 04/28/2011 - 10:13 | 1215708 Badabing
Badabing's picture

 A closed mind with an open asshole.

Read it

Thu, 04/28/2011 - 10:13 | 1215719 Math Man
Math Man's picture

I did.  Months ago.

FOFOA are fools.

Thu, 04/28/2011 - 10:23 | 1215759 Badabing
Badabing's picture

Your talking out of the side of your ass.

SLV /GLD are scams that collect physical with sheep money and give it to the RP.

Thu, 04/28/2011 - 14:11 | 1216976 akak
akak's picture

MethMan, PLEASE tell me that you have never fathered any children, or never plan to!

Those genes of yours do not just have holes in them, but have been acid-washed into tatters.

Thu, 04/28/2011 - 20:45 | 1218620 StychoKiller
StychoKiller's picture

Sorry, but until the Fed stops throwing Napalm on the pile of Govt-supplied TNT, I'm gonna hang onto fire insurance!

Thu, 04/28/2011 - 09:34 | 1215530 tmosley
tmosley's picture

You keep saying that, but it never happens.  I think you need to check your premises.

Thu, 04/28/2011 - 09:35 | 1215550 Bastiat
Bastiat's picture

After all the money you've lost shorting silver how can you still afford internet access?

Thu, 04/28/2011 - 09:45 | 1215592 writingsonthewall
writingsonthewall's picture

+100

http://www.youtube.com/watch?v=5P6UU6m3cqk

Even the baby finds that funny.

Don't worry - nobody is actually shorting here - they're all 'talk' - they are also multi-millionaires thanks to their 'brilliant investment decisions'.

...which is why they can now afford to spend all day showing us where we're going wrong!

Thu, 04/28/2011 - 09:43 | 1215584 JW n FL
JW n FL's picture

Not in a Million Years...

Silver is $100... like it or not.

Gold is $2,000... like it or not.

and any move downward will be bought, fact.

so you can chat up the sheep but you are nothing but the help yourself, enjoy your day.

Thu, 04/28/2011 - 09:59 | 1215641 anvILL
anvILL's picture

http://4.bp.blogspot.com/_cvdgPlEKW9k/TUPNgrs4zxI/AAAAAAAABoo/G8AM1DFNh0...

When GLD gold is sold off, it usually marks intermediate bottoms.
I would agree that inflow and outflow doesn't matter if this market is "alright".
But when both obscure conspiracy theories and mechanical back testing results for various technical indicators both shows that something is wrong in the PM markets, I would rather not compare it with the historical pattern and features of other markets and follow the trend with trailing stops.

Thu, 04/28/2011 - 15:15 | 1217214 Lord Koos
Lord Koos's picture

Even a broken clock tells the right time twice a day.  Your average might be a little less.

Thu, 04/28/2011 - 09:24 | 1215492 fuu
fuu's picture

Yes DangerTime we know. Now go play in traffic.

Thu, 04/28/2011 - 09:27 | 1215504 French Frog
French Frog's picture

I'm surprised you haven't been junked yet for daring to say that Silver could/will come down

;-)

Thu, 04/28/2011 - 09:43 | 1215580 strannick
strannick's picture

But wouldnt that be the same as saying the US$ could/will go up? And wouldnt saying that be silly?

Thu, 04/28/2011 - 20:47 | 1218631 StychoKiller
StychoKiller's picture

I can hear it now:  Geithner:  "Gotta go, The Bernank got his hand caught in the printer!"  :>D

Thu, 04/28/2011 - 09:49 | 1215614 writingsonthewall
writingsonthewall's picture

SILVER IS NOT GOING ANYWHERE.

Here's a 10 second lesson for the schmucks.

 

Silver (and Gold) are priced in Dollars.

This is what dollars are doing.

http://www.marketwatch.com/investing/index/DXY/charts?countryCode=US&sub...

There's the 'bubble' - and until the Fed stops destroying the currency then Gold and Silver will continue to 'appear' to rise and confuse the hell out of the FIAT lovers.

Take a note from history land lubbers.

http://dailyreckoning.com/fiat-currency/

NEVER WORKED - get it? NEVER WORKED!

Thu, 04/28/2011 - 10:13 | 1215702 Math Man
Math Man's picture

The real thing that has NEVER worked is the Gold standard... or silver for that matter.

Last I checked, the Gold standard failed everytime it was ever used.   Can't say the same for fiat.  All 193 countries of the world are still using it.

 

Thu, 04/28/2011 - 10:23 | 1215758 writingsonthewall
writingsonthewall's picture

You have now demonstrated how little you know and what a sheep ewe are.

"The real thing that has NEVER worked is the Gold standard"

Well that's not true at all - what happened is capitalism has (another) crisis - and unfortunately, just like now, the clowns in charge decided to 'put off the pain of asset devaluation caused by speculation in the boom'.

However this was not easy - as money was tied to Gold - so they decided to ignore the collapse of EVERY FIAT CURRENCY BEFORE and try it again. This allowed them to expand the money supply to match the asset speculative prices (stop me if I'm going to fast for you) - which allowed the 'monkeys in charge' to pretend they had fixed the inherent contradiction of capitalism (again).....and (again) the sheepeople fell for it.....a bit like they're falling for the "we've solved it with QE" crap they're being sold now.

So you see the gold standard never actually failed - it was withdrawn in order to 'save capitalism' and kick the can down the road.

 

Now we have a floating FIAT currency - being printed by central banks and hey - look what's happening - golly gosh ALL THE CURRENCIES ARE FAILING (that's gold and silver going up in price to you because you 'price' in dollars, I price in 'real things').

 

The reason I don't think this is a bubble is because the stock market and other commodities are rising too. I could believe a PM only bubble, but not one that includes the stock market.

 

...but please don't listen to me - you keep your faith in your '193 working FIAT currencies' - I shall stick to my lessons from history which I find far more reliable that 'hope based beliefs' based on recent and current events.

Thu, 04/28/2011 - 13:29 | 1216806 TeMpTeK
TeMpTeK's picture

+100

Thu, 04/28/2011 - 10:23 | 1215763 AK338WM
AK338WM's picture

Wow!  What an ignorant statement! 

Thu, 04/28/2011 - 11:05 | 1215928 tmosley
tmosley's picture

Last I checked, old US gold coins are worth far more than their face value.

The standard didn't fail.  The only way for the standard to fail is for the dollar to INCREASE in value beyond face value on those gold or silver coins.  This has never happened in all of history.  Whether the coins are Roman, Chinese, or Sumerian, they are all worth just as much today as they were back then, and worth infinite amounts of promises from those long dead governments.

Take a confederate bond and try to get money for it.  Take a confederate gold coin of the same denomination, and you will see that the gold standard never failed, but the paper, as is the case with all paper, is now worthless.

Thu, 04/28/2011 - 12:47 | 1216564 akak
akak's picture

The real thing that has NEVER worked is the Gold standard... or silver for that matter.

What a profoundly stupid, utterly historically ignorant statement.

MethMan, you are a LIAR!
MethMan, you are a LIAR!
MethMan, you are a LIAR!
MethMan, you are a LIAR!

The gold standard has NEVER failed, not once --- but it HAS been KILLED, repeatedly, by the sociopathic cabals otherwise known as governments and central banks.

You are so truly disingenuous and a lying sack of shit.  Just kill yourself now.

Thu, 04/28/2011 - 13:59 | 1216922 Al Gorerhythm
Al Gorerhythm's picture

The parameters for the diagnosis of Autism Broad Spectrum Disorders, has just been destroyed.

OMG.

Thu, 04/28/2011 - 10:50 | 1215863 Creed
Creed's picture

anyone that knows anything at all about the silver market knows it's volatile & has a habit of crashing just as spectacularly as it rises

 

you french throw up the white flag tres quick

Thu, 04/28/2011 - 09:29 | 1215512 Temporis
Temporis's picture

"We'll be at 31 in a couple weeks, and below 20 by the summer." - Math Man

If it hit's 31 I will still buy, even more than I am now. You know why? Because the National Debt is 14.3 Trillion dollars and going up daily, and the morons in our senate and congress could not agree to decide on what to have for lunch, let alone how to cut spending and reduce the deficit.

 

So please bring on the fire sale of silver because I will GLADLY buy every oz I can.

Thu, 04/28/2011 - 09:30 | 1215524 Math Man
Math Man's picture

Exactly, buying for the right reasons, but paying the wrong price.

Why not buy Gold?   It's only up 30% while silver is up 150%....

Thu, 04/28/2011 - 09:39 | 1215553 tmosley
tmosley's picture

Gold doesn't have the supply problems silver has, duh.

You are in no position to give advice Mr. "I'm Always Wrong About Every SIngle Thing I Have Ever Said".

Go on record with your calls, then when you have a few that are correct, you can point to them and claim to have some credibility.  Until then, you are just noise.

Thu, 04/28/2011 - 09:38 | 1215558 Temporis
Temporis's picture

Gold is for people who have a lot of extra income.

Something I do not have.

I am just an average middle class American and silver fits my budget and feels like it has a lot more room to grow.

Thu, 04/28/2011 - 09:44 | 1215577 oddjob
oddjob's picture

Price does not matter.

 

 

Thu, 04/28/2011 - 09:46 | 1215585 Math Man
Math Man's picture

Comments like this indicate we are in full on bubble mode.

 

Want to buy some pets.com?

Thu, 04/28/2011 - 09:45 | 1215593 tmosley
tmosley's picture

Want to buy some dollars?

Thu, 04/28/2011 - 09:53 | 1215623 Math Man
Math Man's picture

DXY is flat from 3 years ago. 

Silver is up 4x.

Look fucking out... 

Thu, 04/28/2011 - 09:58 | 1215661 UninterestedObserver
UninterestedObserver's picture

LOL DXY - and how MANY dollars have been created in the last ten years? Sorry but Jim Rogers has been kicking your ass because he is smart and you are not.

Thu, 04/28/2011 - 10:11 | 1215712 tmosley
tmosley's picture

lol, and down massively from every other point in all of human history.

Nice bias.

Thu, 04/28/2011 - 11:31 | 1216092 cxl9
cxl9's picture

But DXY is a comparison to other currencies. If they all race to the bottom simultaneously, the DXY may be little changed, but the purchasing power (value) of the dollar has certainly declined. There can be little argument that the dollar today is worth less than it was 3 years ago. It takes more of them to buy anything: gasoline, bread, t-shirts, silver. Many people (myself included) believe that this process is going to continue - even accelerate - and it is best to lock-in purchasing power now by exchanging dollars for something real that cannot be debased or inflated away.

Thu, 04/28/2011 - 09:48 | 1215595 oddjob
oddjob's picture

Now you are scared.

Thu, 04/28/2011 - 09:46 | 1215599 strannick
strannick's picture

Exactly. If someone is willing to give you rare unprintable barely mintable silver, for pretty paper backed by the full faith and support of the gov't, then make that trade.

Thu, 04/28/2011 - 09:53 | 1215635 Math Man
Math Man's picture

Yeah, so rare that we supply  1,056 million ounces a year, but have only found industrial uses for 487mm ounces of it.

The silver market is in massive surplus.  It's only going up because ZH readers are buying.

 

Thu, 04/28/2011 - 10:06 | 1215688 Cognitive Dissonance
Cognitive Dissonance's picture

Meth Man,

I wish to humbly offer my services to you as a piss poor writer. You really do need to come up with some new material. Your old patter is threadbare and your ass is showing through. Saves us all from em-bare-ass-ment and get some new Emperor's clothes.

Thu, 04/28/2011 - 11:46 | 1216191 SME MOFO
SME MOFO's picture

+1

Thu, 04/28/2011 - 10:13 | 1215717 tmosley
tmosley's picture

Where can I get some COMEX deliverable bars?

You're some kind of genius--you should know.  I don't want to use a broker, I just want to pay cash and have them delivered.

Thu, 04/28/2011 - 10:18 | 1215727 Dangertime
Dangertime's picture

Give up.....bubbles like to bubble and the bubble blowers hate seeing them pop.

Let them rage and hate, and when the cards come down they can blame the aliens or whoever the conspiracy theorists blame.

Thu, 04/28/2011 - 10:21 | 1215749 fuu
fuu's picture

Could you wipe that blood off your chin? I mean seriously, have some personal respect at least.

 

$49.13

Thu, 04/28/2011 - 10:20 | 1215757 Bicycle Repairman
Bicycle Repairman's picture

"Let them rage and hate"

Nice try, you embittered fool.  You've had your pants pulled down, now get lost.

Thu, 04/28/2011 - 12:48 | 1216579 akak
akak's picture

Dangertime, I suggest you just kill yourself already ---- your credibility is lonely in troll Hell and desires company.

Thu, 04/28/2011 - 20:52 | 1218651 StychoKiller
StychoKiller's picture

I can think of $14Trillion+ reasons why you're barkin' up the wrong tree!

Thu, 04/28/2011 - 10:16 | 1215733 fuu
fuu's picture

ZH'ers have cornered the silver market!

Thu, 04/28/2011 - 09:52 | 1215633 Citxmech
Citxmech's picture

Yup doing that too...

As all currancy is diluted, most commodities that you can purchase without debt or leverage are a safe bet for wealth preservation.  Purchasing physical metals is a long term play that works well for individuals.

 Au/Ag used to be $20/$5/oz in USDs.  Now look at them in FRNs.  Still stacking and keeping to my proportions.  BTFD.   

Fri, 04/29/2011 - 00:20 | 1219247 MSimon
MSimon's picture

STFP

Thu, 04/28/2011 - 10:46 | 1215842 Overflow-admin
Overflow-admin's picture

"Paying the wrong price".

* Taking in account inflation expectations and steady situation -> no
* Some market crash -> USD index goes up, silver down respectively, then Fed starts QE3, inflation expectations raise much more -> no
* Btw taking delivery of Gold -> hell yeah! But not to replace silver, just to diversify.

Thu, 04/28/2011 - 09:40 | 1215557 Athemos
Athemos's picture

I will admit there is some logic to your argument.  However, I think Silver is vastly undervalued when compared to Gold prices.  For thousands of years the ratio of gold to silver has been 1:13 give or take a few tenths.  We have been unwinding from a 1:53 (which tells me Silver is being manipulated very very heavily) ratio and sit now at around 1:34.  The fundamentals from every angle say Silver has a long way to go up if nothing else just to undwind to historical gold / silver ratios.  However, I'd be happy to take some of your silver off your hands if you'd like.

 

As long as Gold and Silver continue to rise based on todays Fundamentals, we all LOSE in the macro.  I only have silver and gold to preserve my little bit of wealth while the fiat ponzi collapses.  I am not in it to make money. 

Thu, 04/28/2011 - 10:50 | 1215846 Overflow-admin
Overflow-admin's picture

+1

Thu, 04/28/2011 - 11:12 | 1215976 DosZap
DosZap's picture

Slam Dunk.................Ditto

Thu, 04/28/2011 - 09:41 | 1215570 gaillard111
gaillard111's picture

Hey financial Einstein.... d'you see the strength of the dollar ?

Thu, 04/28/2011 - 09:49 | 1215615 Math Man
Math Man's picture

Dollar (DXY) is flat from 3 years ago.  Silver is up 4x.

Bubble 101:

Buying for the right reasons, but paying the wrong price.

 

 

Thu, 04/28/2011 - 10:14 | 1215721 tmosley
tmosley's picture

Nice frame picking.  What you neglect to mention is that it is also massively down from every other point in human history.

It's not the worst value it has ever been, therefore there is no reason to think about it.  lol

Thu, 04/28/2011 - 10:28 | 1215767 writingsonthewall
writingsonthewall's picture

I was worried about the Tsunami in Japan - then I found out that "A worse Tsunami wiped out the Minoans" - so I decided to head off to the beach in Sendai.....

 

I also used to wear a seatbelt in my car, but I found out recently that someone I know died in a car crash and they were wearing their seatbelt and driving within the speed limit at the time.

I therefore no longer wear a seatbelt and drive around at breakneck speed.

 

....am I hitting the math man logic yet?

 

Maybe he's just forgotten what happened in 2008 - it was a long time ago in MTV timeframes wasn't it?

Thu, 04/28/2011 - 11:05 | 1215945 tmosley
tmosley's picture

Nice metaphors.

Thu, 04/28/2011 - 10:48 | 1215847 JB
JB's picture

Dollar is down 97% since 1913.

 

eat a bag of dicks, asshat.

 

(silver bitchez!)

Thu, 04/28/2011 - 11:15 | 1215989 DosZap
DosZap's picture

Meth Man,

So, Right reason, wrong price.

Your correct, but the rest of the PLANET is also paying the wrong price?.

Ever heard of Paradigm Shift?.

Dude, your living it.

Fri, 04/29/2011 - 00:26 | 1219256 MSimon
MSimon's picture

Ever heard of Paradigm Shift?

Yeah. And NINJA loans too! They aren't making any more land! Buy now before prices go up further!

We are getting near a top. Will it burst in two weeks or two years? Hard to tell. But peak talk is here. Now.

 

Thu, 04/28/2011 - 11:28 | 1216079 Calculated_Risk
Calculated_Risk's picture

Yeah, and .gov spending is up, tax receipts down.  That always ends well..

Thu, 04/28/2011 - 09:43 | 1215573 bonddude
bonddude's picture

How can it be a bubble when it is waaaaaaaaaaaayyyyyyyyyy under-owned by the public...

which it is ??????????????????????????????

Thu, 04/28/2011 - 09:45 | 1215588 Math Man
Math Man's picture

Did you miss the part about SLV volume now being higher than SPY volume (S&P 500 ETF)?

 

Fast money is all in at this point.

 

 

Thu, 04/28/2011 - 09:58 | 1215663 Hephasteus
Hephasteus's picture

Fast money you say. I like fast money. Momentum is funny.

Show us your grrr face paper lions.

http://www.321gold.com/mustread/spotgold500_grrrrrr.html

 

Thu, 04/28/2011 - 10:00 | 1215671 UninterestedObserver
UninterestedObserver's picture

So do you think the paper and physical markets are the same? SLV is up but how much paper silver is shorted dumbass?

Thu, 04/28/2011 - 10:29 | 1215773 Abitdodgie
Abitdodgie's picture

Who cares what SLV is , what is important is what you can actually buy physical for , not what pieces of paper are trading for in some made up market. I would not be surprised that if the paper market was to  collapses then the physical may not go with it 

Thu, 04/28/2011 - 11:48 | 1216213 Urban Redneck
Urban Redneck's picture

The US market is on the way to becoming as bifurcated as the European market has been, if not more so.  You're right that the price of SLV irrelevant, but the spot strike is also becoming increasingly irrelevant as a greater percentage of available spreads are entirely above the strike.

Thu, 04/28/2011 - 11:06 | 1215957 tmosley
tmosley's picture

You do know that volume measures the number of transactions, not the number of shares being held, right?

If the "fast money" was "all in", SLV would be somewhere around $25000 per share.  But that is ridiculous--sort of like you.

Thu, 04/28/2011 - 11:17 | 1216004 DosZap
DosZap's picture

SLV has NO physical silver  to deliver.

We're apples and oranges here dude.

Thu, 04/28/2011 - 09:43 | 1215574 writingsonthewall
writingsonthewall's picture

"It only costs five bucks to dig it out of the ground."

 

Best wheeze ever - I suppose you don't bother filling your car at the gas station either - you just dig the oil out of the ground too?

I've got $500 - can you dig me 100 units of silver please? (I'm presuming you're digging out more than an ounce for $5 - when can I take delivery?

Have you considered 'everyone is in Silver' because they all HATE JPM?

Sometime the investor is not rational - I realise that messes with your free market theory - but it's actually true.

 

See you @20 in the summer - I'll come looking for you...

Thu, 04/28/2011 - 09:49 | 1215597 Math Man
Math Man's picture

"Primary silver mine cash costs remained relatively flat year-on-year, falling by less than 1 percent to $5.27/oz. from a revised $5.29/oz. in 2009."

 

http://www.silverinstitute.org/supply_demand.php

 

I make a lot of money off of irrational investors.   And when silver breaks, I'm going to buy another Ferarri. 


Thu, 04/28/2011 - 09:54 | 1215639 writingsonthewall
writingsonthewall's picture

"Primary silver mine cash costs remained relatively flat year-on-year, falling by less than 1 percent to $5.27/oz. from a revised $5.29/oz. in 2009."

Sorry - does that translate to "I can dig it out the ground for 5 bucks" - we clearly don't speak the same language.

 

"And when silver breaks, I'm going to buy another Ferarri. "

Tells me 2 things.

1) You like buying depreciating assets and losing money

2) Desperate people will tell any old lie to backup their story of 'personal success and wealth'.

 

Well I have no intention of 'making money' from my gold and silver - however I shall have the option to flee the country through bartering of something valuable.

You on the other hand will either have worthless paper money or worthless slv and gold puts - which even people with chronic diahorrea will be turning down in the future.

Thu, 04/28/2011 - 10:20 | 1215742 tmosley
tmosley's picture

How do you make money off of yourself?  You buying your own credit default swaps?

I notice you fail to mention the cash costs presented take into account the profit from selling other products out of the mine, which in 99% of cases are the real moneymakers.  It also says nothing about the huge amounts of capital required, AND it's using fuel prices from TWO YEARS AGO.

You are a failure.

Thu, 04/28/2011 - 10:27 | 1215774 UninterestedObserver
UninterestedObserver's picture

LOL you know that number is that low because many mines report a NEGATIVE cash cost for silver because they are also mining lead and nickel in much higher quantities so the silver is "free". If you look at mines that are pure silver plays the cost at many is over $13/oz this year

Thu, 04/28/2011 - 10:49 | 1215844 writingsonthewall
writingsonthewall's picture

Also meth man doesn't understand the difference between 'fixed' and 'variable' costs.

 

I bet it didn't cost $5 an ounce to build the mine and buy all the equipment, even if the ongoing costs do work out to be $5 a pop.

Thu, 04/28/2011 - 12:55 | 1216617 Attitude_Check
Attitude_Check's picture

What's the average cost of pulling out a gallon  of oil?

http://www.kanabona.com/energy_cost_of_oil_production

In 2006, average production costs (or lifting costs - the cost to bring a barrel of oil to the surface) ranged from

  • about $4 per barrel (excluding taxes) in Africa
  • to about $8.30 per barrel in Canada;
  • the average for the U.S. was $6.83/barrel (an increase of 23% over the $5.56/barrel cost in 2005).

Besides the direct costs associated with removing the oil from the ground, substantial costs are incurred to explore for and develop oil fields (called finding costs), and these also vary substantially by region. Averaged over 2004, 2005 and 2006, finding costs ranged from about $5.26/barrel in the Middle East1 to $63.71/barrel for U.S. offshore. While technological advances in finding and producing oil have made it possible to bring oil to the surface from more and more remote reservoirs at ever increasing depths, such as in the deepwater Gulf of Mexico, the total finding and lifting costs have increased sharply in recent years.

 

So the price of oil is only effected by the MARGINAL supply costs - not the average.  Same for Silver.

Thu, 04/28/2011 - 09:45 | 1215582 Dr. No
Dr. No's picture

I appreciate the opposing view.  It helps keep people grounded.  I think people junked you because they disagree with your argument, not because is was a pointless "bittchiz" post, which the junk feature is really intended for.  Now, can we beat my personal best of 16 junks with this post?

Thu, 04/28/2011 - 10:50 | 1215849 writingsonthewall
writingsonthewall's picture

I also appreciate the opposing view - because each one seems to have giant 'logical holes' in them which makes me even more confident this is less about PM speculation and more about FIAT currency fears.

 

I dunno - maybe some people have started reading history rather than listening to Kramer or some other twat talking head on TV.

Thu, 04/28/2011 - 11:04 | 1215921 Overflow-admin
Overflow-admin's picture

Yeah. Since 2008 I started questioning myself. First interested in money history and then in actual markets. Last year I started buying physical silver. Because I hate JPM, I hate the Fed, I don't trust the politic class, I hate my money being debased and I don't want to work like crazy all my life and waste what I earn for the latest iPads and shit.

 

That seems a little overreacting, but in my point of view this could be the wiser decision of my life. See in the future.

Thu, 04/28/2011 - 09:54 | 1215643 SilverRhino
SilverRhino's picture

You have got to be one of the most idiotic paid shill posters on ZH. 

It only costs five bucks to dig it out of the ground.

Prove it shithead.

Thu, 04/28/2011 - 09:56 | 1215654 Math Man
Math Man's picture

Primary silver mine cash costs remained relatively flat year-on-year, falling by less than 1 percent to $5.27/oz. from a revised $5.29/oz. in 2009.

 

http://www.silverinstitute.org/supply_demand.php

Thu, 04/28/2011 - 11:08 | 1215943 Overflow-admin
Overflow-admin's picture

"Established in 1971, the Institute serves as the industry’s voice in increasing public understanding of the many uses and values of silver."

That doesn't seem like an old dinosaur. Trust them and their declaration of interests if you want. And trust the Fed at the same time, so you don't become bi-polar.

Edit: responded a little emotionnaly, but it reflects 100% my toughts.

Thu, 04/28/2011 - 12:56 | 1216604 akak
akak's picture

If silver only costs $5 to dig from the ground, and PM-bashing trolls only cost Cass Sunstein $5 per hour, and Jon Nadler only drinks $5 worth of gin per hour, and Bob Moriarty only loses 500 neurons per hour, and MethMan posts at least 5 comments per minute, and Dangerclown loses $500 per day on his silver shorts, then how many trolls can dance on the end of Ben Bankruptke's pinhead?

Thu, 04/28/2011 - 15:25 | 1217273 Lord Koos
Lord Koos's picture

And gas should be $ .69 a gallon.

Thu, 04/28/2011 - 09:57 | 1215657 vas deferens
vas deferens's picture

Math Man, I like your posts pls keep posting as I enjoy all sides of the story.  You seem educated and as a silver bear, what are you feelings on John Williams and his stats on inflation adjusted prices of gold and silver?? 

John Williams mathematical prices of gold/silver inflation adjusted.....

 

"Gold and Silver Highs Adjusted for CPI-U/SGS Inflation. Despite today’s (April 15th) historic high gold price of $1,476.75 per troy ounce (London afternoon fix) and a new multi-decade high silver price of at $42.61 per troy ounce (London fix), gold and silver prices have yet to approach their historic high levels, adjusted for inflation.  Theearlier all-time high of $850.00 (London afternoon fix, per Kitco.com) of January 21, 1980 would be $2,441 per troy ounce, based on March 2011 CPI-U-adjusted dollars, $8,331 per troy ounce based on SGS-Alternate-CPI-adjusted dollars (all series not seasonally adjusted). 

In like manner, the all-time high price for silver in January 1980 of $49.45 per troy ounce (London afternoon fix, per silverinstitute.org) has not been hit since, including in terms of inflation-adjusted dollars.  Based on March 2011 CPI-U inflation, the 1980 silver price peak would be $142 per troy ounce and would be $485 per troy ounce in terms of SGS-Alternate-CPI-adjusted dollars (again, all series not seasonally adjusted)."

 

Thu, 04/28/2011 - 11:52 | 1216240 Richard Head
Richard Head's picture

"You seem educated"?  AHAHAHAHAHAHA!

Thu, 04/28/2011 - 12:56 | 1216624 akak
akak's picture

UofT

(University of Trolling --- and he graduated magnum cum loud)

Thu, 04/28/2011 - 10:14 | 1215715 ZakuKommander
ZakuKommander's picture

The analogy doesn't work because there is an increasing demand for ag and a parallel drop in the value of the means for acquisition.  

Analogies without thoughtful analysis of underlying circumstances are childlike.

Thu, 04/28/2011 - 11:15 | 1215992 Confucious 222
Confucious 222's picture

Anatomy of an idiot - "silver has to come down, it's gone too far too fast"

Further anatomy of an idiot - " this is just like NASDAQ 5000" 

Conclusive proof of an idiot - "Ever stop to think about why Gold is up less than 30% in the same time period?  It is 'money' too"

Hip-tip for the shills - "Tell us why and how silver's price was suppressed to nearly a 100 to 1 ratio to the gold price, and tell us why and how the uncovering and unravelling of these price suppression schemes won't cause not only reversion to the mean of 16 to 1, but probably and overshoot to 5 to 1, putting the price per ounce in current terms at over $300 per ounce."

That's what we really want to hear, which is how 40 + years of price suppresion schemes don't create a silver supernova which puts $50 an oz so far in the rear-view mirror it looks like a flattened squirrel in the truck lane of I-10.

Please tell us shill, we really REALLY want to know.

 

 

Thu, 04/28/2011 - 09:18 | 1215465 fuu
fuu's picture

Great article. But I am still not nervous nor am i selling. Good read though.

Thu, 04/28/2011 - 09:42 | 1215578 Sudden Debt
Sudden Debt's picture

I'm still buying actually :)

The more I read articles like that who suddenly all now start to pop up, the less I care about them.

The only think I care about is :

Can the economy work without the free taxdollars?

Did the governments start to reduce their debt balances?

Are all banks paying a +10% div?

Thu, 04/28/2011 - 10:22 | 1215762 fuu
fuu's picture

Preach it brother Sudden!

Thu, 04/28/2011 - 11:23 | 1216041 DosZap
DosZap's picture

SD,

Even if they were paying a 10% divi, you would be upside down, -12% min.

Thu, 04/28/2011 - 21:01 | 1218678 StychoKiller
StychoKiller's picture

All I needed to know about our current situation was explained here:

http://fofoa.blogspot.com/

Thu, 04/28/2011 - 09:23 | 1215466 fuu
fuu's picture

oops

Thu, 04/28/2011 - 09:21 | 1215468 Cognitive Dissonance
Cognitive Dissonance's picture

If you are long Silver and feel nervous about it then sell 1/3 of your position. If you are not nervous then you should be. We are headed for a blow-off top with a quick reversal, or a sustained rally for another year or 2. You should be equally miserable if either of those happens. So sell some.. go buy farm land in Argentina with your profits.

The worse thing we can do is to become consumed by the very greed and self interested behaviour we constantly berate others for here on ZH. I have become very concerned over the last few weeks as Silver went parabolic and many here became arrogant and boastful....exactly the same attitude so many PONZI participants display.

I understand that this comment will trigger many readers. If your first impulse is to hit the reply button and fire back I suggest instead that you settle back for a few minutes and reflect upon what is happening to you, to me and to us. The article's advice to take some profits and resettle the mind is well worth considering.......even if you sell nothing and just settle the mind.

Thu, 04/28/2011 - 09:28 | 1215499 UninterestedObserver
UninterestedObserver's picture

"take profits" and do what with your stack of fiatscos? I think traders have already taken profits, people buying PM's due the belief that there are major changes coming down the road such as a currency collapse should not (and probably don't) even consider exchanging their metal for paper. The current regime has not given any signals that anything is going to change. I'll gladly consider selling when the Fed is gone.

Thu, 04/28/2011 - 09:43 | 1215569 fmxconnect
fmxconnect's picture

buy farm land!

Thu, 04/28/2011 - 10:19 | 1215738 AG BCN
AG BCN's picture

Every time I have enquired abuut land I have always found the sellers to be a bunch of f***s.

I know it's a good idea, just can't abide the farmers who are willing to sell.

Thu, 04/28/2011 - 10:23 | 1215753 Pegasus Muse
Pegasus Muse's picture

Farm land is in a speculative bubble according to some.  http://www.businessinsider.com/robert-shiller-get-ready-for-a-farmland-bubble-2011-3 

Thu, 04/28/2011 - 09:46 | 1215596 Abitdodgie
Abitdodgie's picture

At the end of the day silver is still only $48 an oz its not like we are talking $300 an oz , so in the big picture it is still very cheap for what it is. It will NEVER go to zero ,unlike stocks can

Thu, 04/28/2011 - 09:57 | 1215648 Womb Service
Womb Service's picture

Yes, the "greedy" move is the attempt to trade and profit in this environment. Sit on what you have and wait for what is coming.

Thu, 04/28/2011 - 15:28 | 1217287 Lord Koos
Lord Koos's picture

Take profits and wait, buy back in when the inevitable correction happens.  Do you think silver is going to go parabolic forever?  I'm long silver and gold but I can see a bubble in silver, if only temporarily it is going to correct, probably later in May.

Thu, 04/28/2011 - 21:04 | 1218687 StychoKiller
StychoKiller's picture

Meh, there's around 535 other Jerks in the Govt that cain't even come up with a $Billion in REAL spending cuts...

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