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FMX Connect Morning Gold Fix: Silver Warehouse Shenanigans Or The Real Deal?
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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Bubbles usually happen in one, or in several similar asset classes.
This is no bubble as we're seeing stock market rises in tandem with PM and general commodity price rises.
A bubble is only such after it bursts
The only way to burst this particular bubble is to cause a depression.
Basically the bet is "Do the fed want to be seen to cause the next depression"
I am betting NO - I could be wrong....but then it won't matter anyway will it?
I don't think silver and gold bears understand the scale of the problem. Let me give you a clue...
"Record low interest rates for a record length of time"
Record means - "never been done before"
Disclosures - I have a stash of gold coins and silver bars in my secret draw at home - this is not for speculation nor investment....but insurance against FIAT collapse.
Does that sound like 'confidence' in FIAT currencies to you?
I am not alone - most people holding Gold are not doing for speculative reasons - and those who are generally are fools as they don't have the physical.
It's like all those clowns who have / had CDS contracts on various debt defaults - they haven't learnt that when the insurer goes bust (AIG - it could never happen????) - their contracts are as worthless as any used toilet paper.
...but they don't know about risk - if they actually understood it - they would never even participate.
Was that good enough reflection for you?
While I was writing that - gold set a new record!!
http://online.wsj.com/article/SB1000142405274870446380457629074083812156...
I cannot keep up!
Who the hell junked this? This is a well reasoned position.
Tell people some bad news they already know and they will thank you.
Tell them some bad news they don't....and they will junk you.
Nobody likes to hear common sense piercing their insanity.
Like I said, I could be wrong, but if I am then it's game over - and if I'm right then at least I've given myself a chance.
I mean if you follow math man's 'promise' - if gold is at 30 by the summer - then what will the economy look like? Think of all the asset value destruction there would be and what effect that would have on spending (in a time when presumably consumption is collapsing causing the deflationary environment)
Nah - I'll take my chances with the scenario's I can hedge against.
Anyone that doesn't like common sense lacks it. Well reasoned argument.
most people holding Gold are not doing for speculative reasons - and those who are generally are fools as they don't have the physical - Amen
Mr Draghi also used the IMF meeting to restate concerns about exchange traded funds (ETFs) - stand-alone investment vehicles that typically track the performance of a single asset class such as gold or copper. Retail investors as well as institutions have used ETFs as a proxy for the commodities they back and have invested $1.4 trillion in them, according to BlackRock. However, many are highly leveraged.
In some of his strongest words yet about ETFs, Mr Draghi likened them to the derivatives that triggered the financial crisis.
He said: "It is reminiscent of what happened in the securitisation market before the crisis."
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8457094/Banks-claims-they-will-move-abroad-are-empty-threats-says-Financial-Stability-Board-boss-Svein-Andresen.html
Coverage of the fraud in going MSM.
This comment triggers me to say - well said, CD! My physical metals are not a trading vehicle they are my long term wealth in preservation mode. For every one of us who has triumphed over the easy money culture and embraced the coming hard money paradigm, there are hundreds, maybe thousands, who will be destroyed by the coming tsunami. There's not much joy in that..
There is no joy in Mudville tonight. We must always remember that Casey (which I am using as a Silver analogy) struck out when his turn came to bat.
As soon as we become fixated on our hero saviour (in this case on Silver, but I mean more generally) we are just as vulnerable as those who we claim are not preparing for their at bats.
http://en.wikipedia.org/wiki/Casey_at_the_Bat
+9th w/ 2outs
'We have met the enemy, and he is us..' -Pogo
ZH has become more and more a 'public' forum and thus reflects more broadly our overall, general humanity - in all its splendor, and in all its other qualities. To raise both arms in classic 'Nixon victory' as PMs rise is, on one level, understandable as it indirectly represents of the fall of the empire. I for one believe it must fall/collapse before it can be fixed. But there is a moral balance and boundry that can too easily be crossed. This nuance is more important than most realize.
I fail much more than I succeed, often because I am a flawed emotional human being and I get caught up in the divisiveness of the scrum. But this is my principal goal here on ZH, to expose my flaws as well as others (almost always using the terms "we" and "us" and rarely "you") in my articles and essays so that others will consider doing so as well. The journey begins within.
Many people find me egotistical because I talk about myself. My only response is this. How willing are we to self reflect if someone is pointing fingers at us personally. I don't. We all find it easier to be empathetic when someone is exposing themselves rather than you or me.
However this also makes many people extremely uncomfortable. This shows that they are being triggered by my comments since of course I am not talking to them but rather to us. I have made every mistake in the book and I'm still making more everyday. I hope others will benefit from me showing them my skinned elbows and bloody head.
Humility through introspection always leads to wisdom, CD. You reveal the good path you are on.
We do, brother..
Watching the rise in PMs (really the fall in the Dollar Index!) reminds me of the definition of mixed emotions: Watching your shrewish mother-in-law driving over a cliff in your brand-new Mercedes.
Being right about the coming Great Implosion should fill no sane person with joy, however fleeting!
Can we at least ask the mother-in-law to take MethMan and Dangerclown along for the ride?
In fact, make it a silver Mercedes, and I bet they would be glad to hop in --- anything to see something silver take a plunge.
'....as Silver went parabolic and many here became arrogant and boastful'
The visceral attitude of shorts went parabolic.
It is CD's OPINION that silver has gone parabolic lately - I think many people will strongly disagree with that premise.
I reserve the right to the wrong all the time. :>)
Going 'parabolic' doesn't necessarily mean that the ride is over. We have all seen something double or quadruple only to see it quadruple (or more) again. In this case I am referring to price movement in relation to time. This doesn't disqualify the price. It only says it was a very rapid move in such a short period of time and that there will eventually be a downside movement.
I also said that we should settle the mind even if we do not sell the Silver. This doesn't mean everyone was manic. But to say that no one was manic would be disingenuous. I am more worried about the emotional reaction to the recent Silver rise than I am about the actual Silver itself.
The most intoxicating drug in the world is confirmation bias and it serves us all well if we keep this concept front and center.
I think CD is right too, I will trade half of my Silver today for Gold, and then buy again if it hits 35 and continue to make gains with gold if plausable. I am big silver bug, but it is due for a healthy correction. I don't see gold below 1250 again until a reset or a huge monetary correction on multiply levels (doubtful). Silver could easily get to thirty though, and it would not shock me. So I say in the end hold long on either, but I believe there is some gold to be had here if you trade now and buy silver later because 100% in 8 months in astounding anyway you toss it. Gold over same time is 18% up and they both are relatively sound compared to everything else.
http://www.investmentu.com/wp-content/uploads/2008/04/012108silver_ratio1.gif
The above chart is the reason i don't like the historic 15 to 1 ratio, historically the gold to silver in the last hundred years is 50 to 1 and right now it is 31 to 1. The big thing for me is that central banks are hoarding gold and the University of Texas recent purchase. The silver is righteously due an up swing but too fast too soon makes me woozy. To the moon means to the shits for our global economic situation which I know is inevitable, but I would still like some more PM's first please.
Oh yeah I almost forgot
Shove that Ferrai up your ass meth woman!
Yep -- I traded about 60% of my silver for gold as the ratio got closer to 35:1 - I bought most of my AG when the ratio was in the high 40s, so it's buying gold at bargain prices. If the ratio widens appreciably I will buy back silver, but I dont' think that's going to happen anytime soon.
To be fair, many people were arrogant and boastful no matter what went parabolic!
CD,
I am not a trader of securities or anything and this was all new to me in 2007, but there are a couple of things happening which still makes me believe that we are not yet in ponzi territory for silver. The dollar does seem to be in its last gasps of air and China seems to be intent on collapsing one of the lungs on the way out the door. Japan has little choice but to take oxygen from the dollar’s lungs so its people can breath for a few more months. BRICs taking out the other lung, while the Fed is shoving the breathing tube in.
The recent rapid upward movement of silver would be of greater concern to me if we saw more strength in the DXY, but there are too many moves happening right now that resemble Weimar. The dollar is wasting away to it's 2008 lows, gas prices are easily over $4.00 in most areas of the country now, and food price increases are making their way to every food panty of every American.
Additionally, the debt ceiling move, upwards I believe, is a fundamental reason for PM purchases overall and you have a needed QE3 to float the equity market to keep the boomers from taking to the streets instead of retiring like they want to.
I believe the only bubble is the world of ZH, not a negative connotation by any means. I often forget that while 90% of us here are bullish on metals, we only make up a fraction of a percent of the American boobus population. When I started buying silver, I was the only one I personally knew and now that number is now at 4. Silver isn't sitting in the hands of every Americant like the housing bubble memories of yore, nor the 401K crazy that sits in the mind's of every neighbor, coworker, and family member I know. Institutional money is starting to make its way into silver, but every money manager that I talk to at every trade show still has an extremely small percentage of their portfolios in PMs and if they do it is in paper form.
I would indeed expect a significant pullpack when the Fed decides to let asset prices drop when QE ends and a forced liquidation of PMs will have a play, but he the Fed's ploy will only be used to justify QE3 and raising the debt ceiling.
I am sitting on $10K dry powder and have been hesitant to pull the trigger at this point, as the upward move has indeed been significant. Perhaps the retrace to $25.50 would be my entry point when the Fed scares the shit out of the sheep, but that pull back would be short lived if it happens at all. But then again what the fuck do I know? I am just a Dick Head.
Thank you for your reasoned and calm response. You make numerous valid points and I do not disagree with the substance of your comment. I wish to repeat one thing I said previously.
Ahhh makes sense. Took profits back around $45 in order to pay off settlements with the banksters on unsecured credit. I'm looking to take profits again when I can pay off me underwater martgage or should I? I am not sure.
Should hyperinflation have its day then all fiat debts would be extinguished no? Plus, that way I would have a stash as a transition currency? My exit strategy is reminding me of Iraq at this point, so I do indeed need to settle the mind.
Not to be gay, but you are one of me favs CD. Tits always a pleasure.
Freudian finger slip? :>) I agree by the way.
It would appear so. However I must remind myself on a daily basis that desperate (PONZI) men do desperate things. And old rules can and will be broken in an effort to keep the PONZI afloat. So I would not put it past the PONZI masters to break some rules about old debit with fixed or variable interest rates.
Never expect the insanity to stop. Always expect it to accelerate. Always. This way you are mentally prepared to deal with whatever comes down the pike. This is why settling the mind is so important. It will be our failure of imagination that will gut us, not theirs.
If you could get that Elephant and Donkey off the patient's chest as well, (s)he might actually survive the trauma!
"Perception is reality and someone is taking the risk."
I'll remember that next time I'm about to crash on my bike "it's all in your mind....it's all in your mind..."
before you know it I'll be on a beach drinking cocktails and not smeared across some drivers windscreen.
Is this the new paradigm? where what you believe it real and what you don't isn't?
Sounds like a tag line for a film - or the next 'birther' argument to drag itself up from the pits of right wing lunacy.
Careful. Your bias is showing.
It's true - I am biased against lunatics.
Why do you hate yourself?
Remember, your whole worldview is upside down so long as you claim that the US is a capitalist nation, despite all evidence to the contrary.
Edit: I think part of your problem is that you are defining the word "Capitalist" to mean "the economic system of the United States". You can't define words that way. Capitalism has a strict definition. What you define as capitalism is actually fascism.
"Remember, your whole worldview is upside down so long as you claim that the US is a capitalist nation, despite all evidence to the contrary."
Evidence? What evidence? I told you that fascism was the INEVITABLE CONSEQUENCE of free market capitalism in which the participant's goal is to accumulate capital (hence the name) and that as money goes hand in hand with power that the ultimate 'capitalist' will create a monopoly, corner the market or collude with rivals to screw the consumer.
....which is where you say 'regulation' steps in (not realising that regulation is conradictory in a free market)
Free markets with regulation? - who has the upside down world view now?
Just as a favour - I shall give you the definition of capitalism.
"An economic system where the majority of the ownership of production is in private hands"
Last time I checked - the US is about 95% privately owned.....or are you going to disagree with that too?
Just because the private ownership is less than you would like - doesn't change the fact it's privately owned.
Please someone in America invest in education - it's standards are dreadful.....oh wait...aren't the colleges 'privately owned' too? - well now it all makes sense.
Ivy league man are you?
"Evidence? What evidence? I told you that fascism was the INEVITABLE CONSEQUENCE of free market capitalism in which the participant's goal is to accumulate capital (hence the name) and that as money goes hand in hand with power that the ultimate 'capitalist' will create a monopoly, corner the market or collude with rivals to screw the consumer."
Yes, you told me that. I retorted that by the same logic, cleaning leads to something being dirty. You can't accept the fact capitalism and fascism are polar opposites BY DEFINITION, just as clean and dirty are polar opposites. You refuse to accept the fact that ANY system that allows centralization of power will inevitably lead to fascism.
I never said anything about regulation, unless you are talking about free market regulation, which does exist and is FAR more efficient than government regulation, because in the case of the free market, there are no regulators to get into bed with, or there are so many that it is impossible to corrupt them all, and the corrupted ones will be replaced when the market sees they are corrupt. Think about how "Consumer Reports" works.
Thank you for finally giving a definition. The US is less than 50% private, as it so happens. The Federal government is the largest landowner in the US. The property tax system reduces all private landowners to renters. More than 50% of private income is derived from the government.
Do you see now? Definitions allow us to examine the veracity of our premises. Even with the warped definitions you use, you take the ACTIONS of a true capitalist, a good, upstanding individual. You own gold and silver. You cry out against corruption. The only problem is that you misplace the source of that corruption. The corruption is from the system, and it is inherent in it. If one wants to keep a federal government, they must always fight against its growth, or it will inevitably slide into fascism, as you noted. The only way to stop this slide is to eliminate government altogether. But that is too radical a step for most, even those who really understand the logic.
And I went to a public university. I should note that very few universities are privately owned, though they are often run like personal fiefdoms.
"Think about how "Consumer Reports" works."
...now you go away and think how 'advertising and marketing works' - and then stick that in your 'free market theory' machine and tell me how it fits into "without coersion."
"Thank you for finally giving a definition. The US is less than 50% private, as it so happens. The Federal government is the largest landowner in the US. The property tax system reduces all private landowners to renters. More than 50% of private income is derived from the government."
...and while you're there - look up 'ownership of production' - the Government can own all the land it wants it won't affect whether the country is capitalist or not.
I thought you were a player - now I find you're just a playboy.
I don't understand what you are saying here. Coercion means use of armed force, or the threat of such. How do advertising and marketing equate to armed force? People believe a lot of dumb things, but they are a lot more trusting of the things that come on TV due to the notion of "false advertising" laws. If those laws were publicly and loudly repealed, then people would be much more skeptical about what they see on TV.
How can ownership of production be private when the government can tell you what to do? The existence of government regulations negates your own definition of capitalism. Thus, according to your own (partly incorrect) definition, the US is not a capitalist country, because ownership is defined as control of what is owned. See the wiki for the definition of ownership: http://en.wikipedia.org/wiki/Ownership
FYI, the correct definition, which is not far from your own is this: "an economic system in which the means of production are privately owned and operated for profit."
Ownership is defined as: "the state or fact of exclusive rights and control over property, which may be an object, land/real estate or intellectual property." Since the government can set limits of any and all descriptions, the "owners" of those means of production in fact don't own anything. They are simply managers who receive their salaries in the form of profits (a portion of the profits, actually, as like all true owners, the government gets a cut).
Are you starting to see what has happened here? It wasn't always like this.
+100Thousands of Rules, regulations, zoning laws, etc!
Real Estate: Real is Spanish for 'belonging to the King' (more or less)
from a libertarian point of view, 'regulation' should be MARKET regulation.
Congress repeatedly states the financial crises requires MORE GOVERNMENT regulation, whereas Liberarians are saying, the financial crises is demanding MARKET regulation.
i.e. your company f'up with repo 105 you going down. None of this BS one sided option trade as a CEO.
Remember Fannie Mae and Freddie Mac are 'regulated' entities, all that happened is corporate raiding by the CEO/executives there, and these entities still exist.
There's no difference between the excuse for TARP and the excuse for the TSA frisking your 6 year old. "boo, the bogeyman is hiding behind you". If you don't give us all the power (through regulation) the world will end / terrorists will kill everyone / sheep will die / time will stop.
The truth is, the powers that be need the sheeple to remain quiet. Wisconsin was a good example of where people are slowly starting to wake up (unfortunately there they still 1/2 asleep. They still haven't figured out that while the government can promise you a high salary, inevitably they have to get the money from someone else. When those 'someone else's' (commonly called taxpayers) run out of money the government, not producing any value/goods or services, has NOTHING to fulfill its promise.
This is what's starting to happen with PMs, people are waking up to the fact that the government will NOT be able to back its 'full faith and credit'. Not to mention that 'full faith and credit' is the government making a promise to holders of FRNs that YOU will back that debt through your work. That FRN is a debt note for your slavery in the truest sense.
+1 on the facism comment!
When the POTUS can essentially fire the CEO of a major corp., things have completely unwound from a capitalistic point of view. It is currently happening again in the big pharma world.
DaddyO
So is yours
"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 reserve the right to be wrong all the time. And thankfully I usually am.....wrong all the time. :>)
It sounds like Bill Clinton's discussion about what "is" is. The term parabolic seems to have triggered many people. Why? I didn't imply that Silver's rise is over. Did people assume that I was? Is it not prudent to take some profits during a sharp rise higher?
My comment was principally about the ZH collective state of mind and not so much about the price of Silver. I hold lots of Silver, even more than Gold on a dollar basis. I was expecting Silver to move much quicker than Gold for several reasons. So I stand to benefit from Silvers rise. And I will not sell my physical........which is the bulk of my holdings.
But there have been a lot of comments made on ZH over the last month as Silver has followed a upward trajectory. And several people have become manic and were boasting and being arrogant. If you are not one of them then you were not to whom I was directly my comments.
yea, sell a few bars off the stack and pay off the farm, sound advice, glad I thought about it before reading zh this morning, certainly makes perfect sense.
The way silver is trading, when you begin to see premiums blow up like they are now, it is a sign in the physical market that the situation is about to reverse. However, what we may be seeing is a unique turning point in the world bullion markets, and predicting future activity based upon past performance may be a fool's game. One thing is for sure. Premiums are going through the roof: http://www.goldshark.com
when you begin to see premiums blow up like they are now, it is a sign in the physical market that the situation is about to reverse
Or is it a sign of demand outstripping supply as the silver market moves from a long-term regime of price suppression towards price discovery -- supported of course by a collapsing fiat regime.
Exactly - the system is going to blow up because the ratio is going back to under 20:1 and they can't stop it IMO
Or it's a sign of reversion to metal/commodity backed money. I'm starting to believe the swiss, china or someone will do it making the rest of the world follow. INDIA ???
+1530!!!
Oh I agree - a reversion to commodity backed money would mean the current ponzi blows up IMO
We can no only go forward (to FIAT collapse through money printing) - there is no going back anymore.
I am on record at the time saying I thought the Scotia move was Sprott (or some other Canadian long physical holder. There are one or two others whose names escape me.)
Sprott touting the delivery issue was the main reason I bought in last fall.
After yesterday's move, I expected follow through overnight and thought pull back today. My biggest position is PSLV and it has been quite volatile. I was going to sell some positions and buy back later. Not going to do it now. I do not expect a correction now until we are firmly through 50 spot, if at all. And if I'm wrong, I am on the record.
When silver hit $49 I sold all my paper silver I have been using to hedge my physical holdings inability to be liquid and I feel pretty good about the move. I plan to hold my physical for the long even if I have to will down to my kids.
I've been selling strength and buying weakness in silver. So far, so good. If the dynamic
changes, I'm hoping I spot it. A quick blow off and reversal doesn't seem likely, the problems
are too deep. Maybe increased volitility until the dollar destructs ??
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......
blow off top? here we go again with the chart discussion..........i
i am not going anywhere. this ride has been incredible and i don't see any reason why it will end in my lifetime. there will be corrections. such is the nature of the bull market. buy some land in argentina? no thanks. this is my home. i was born here. i am not leaving.
I only have 14 plus trillion reasons why I am not about to sell my silver or gold...but I am not in it for profits, I am in it for wealth preservation...
Or someone is trying to create the illusion of a reversal... Hmm...
I still can't figure out why he says to sell when China is dumping paper for physical ??? I would expect more of the same from other countries . Paper for metal is a bargain .
And there's no ZSL to borrow. It's all gone.
Come on shorts, let me borrow a couple shares... I promise it won't hurt.
I disagree with the Math Man.
High volume moves in SLV at the highs is bullish. The only way it can be negated is if there is a huge down day on over 200 million shares. SLV is probably going to consolidate for awhile up at the highs, and then move higher.
Bears had their chance to slam it this week, but they blew it.
Silver has a unique mix of demand drivers. That said, every driver can be a drag.
Locking in gains is common sense but you certainly can't hold fiat.
Before selling silver you have to find something else with "future value". There are lots of choices out there depending on the your flavor of armageddon.
By the way, anyone attempting some kind of "market cornering" game without a priori knowledge of the Bernake's script is a fool. IMO that is unlikely given the available data. A shortage is far more likely given the data presented over the last 11 months.
I'm in (Silver)
...because the delusional fraudsters at Elliott Wave International have predicted Silver and Gold have topped and are about to drop. It's the same screeming Bear market prediction they've been making since beginning of 2010, week after week, month after month, and falling over their size 19 clown boots in abject failure
Wrong on the Nasdaq, wrong on S&P, wrong on Dow, wrong on Gold, wrong on Silver, wrong on calling for a US Dollar rally. Beyond a joke, beyond a farce, total frauds
The worst prediction service in the World 2010 : Rob Prechters' Elliott Wave International
Biggest Clown in Investing : Steven Hochberg, Elliott Wave International
He has been predicting a crash in gold since it first crossed $300 and silver when it crossed $5.00
In his book, Conquer the Crash, he states that IF gold ever crossed $400.00 that he would have to REEVALUATE his stance on DEFLATION. Has the clown done so?
No Prechter is still predicting deflation (which i believe he will ultimately be proved right on aka 1929). But his total failure on the precious metals, Stock indexes and calling a Dollar rally he continues to gob off about though he's been wrong every month throughout 2010 and into 2011.
Falling flat on your stupid face, failing month in month out with Elliott Waves that do not work, with technical indicators that get it wrong 95% of the time, the delusional jerk continues talking constant shit to long-suffering EW subscribers
Prechter sold his Silver in 2002, right at the beginning of the decade long bull market in Silver Doh!!.. far as i know that's the last time the prick got anything right on Silver or Gold. He gave up a few months ago predicting the PM's from his newsletter having failed throughout 2010 and being beaten by all his peers on every market
He now leaves it to his calamity clown side-kicks like Steven Hochberg who is beyond a farce forever trying to peg '5' ending waves on the PM's and also collapsing in abject failure week after week. He's an absolute tosser to keep on failing week after week and keep thinking he can 'have another go' like anyone is listening to the total loser anymore
The whole Elliott Wave organisation is a total sham, if Prechter had a shred of integrity he'd have packed up end of 2010 and refunded all his fleeced subscribers
How many of the trolls here are bitter Elliot wavers?
are you doing an official survey or just trolling aimlessly?
Neither. I am making a point. If you are an embittered Elliot waver, then 'fess up so we'll know to completely ignore you.
1+
Silver in the SLV is leveraged 100:1 admittedly, COMEX is toast in 90 days if everyone keeps taking delivery
China. China. China. I'm starting to see China being the major player in silver now....the silver banks short silver, charge for storage etc, and take the proceeds and reinvest (create inflation) in other areas. is this China's way of stopping inflation?? Take the money from the banks so they can't reinvest in other areas and therefore hinder 'some' inflationary pressures?
i suspect its chinesey govt being the size bid for the forseeable future. and they are being viciously front run by chinesey insiders.
This thing's getting ready to blow!
About time to cash in your stocks for physical...and then double down!
Citibank is offerring physical silver today for Feb 2013 cotton fiat!
http://silverdoctors.blogspot.com/2011/04/would-you-purchase-silver-toda...
Someone needs to dumb down this article. If silver supply is lowering and the dollar is becoming worthless, I should sell because why again?
Gordon, settle..
He said if you are nervous, and if your are nervous than either way you will suffer.. so sell 1/3 and buy some farm land. thats all he said.. the rest was tech sound? I dont buy or sell based on numbers, I use the force.
Enjoy the pull backs and buy all the way to $100. No worries.
That's it in a nutshell.
Also, if the TBTF had a big meeting to kill Silver this week, I think they are worrying about other things this morning after those economic numbers.
Can you imagine Blythe sneaking into Dimon's office this morning after the broader economic collapse is being confirmed asking for any part of the balance sheet?
I know JPM cares about silver, but they may have some more pressing issues today.
Because SLV etf is going to do a paper burn and there will be 5 sellers for every buyer and the factorial algorithyms will match the buyers and sellers in the absolute worst way possible for the seller, creating the illusion that it's all falling apart.
Either that or BATS will puke all it's extended registers all over the heap stack.
Ok now that we've outted the real scenario. Let's pretend that's what is happening and model it with the paper market in an attempt to pretend that we are no longer focusing on sheering the sheep.
The algos are written. The math will run. It will be like CG'ing a movie and trolls will troll and zero hedgers will watch it all and it will all be over in 2 weeks when it's not working or it will be a 2 month suspend disbelief full on summer blockbuster.
I guess I was one of the few lucky ones.
I liquidated my bars at a handsome 25% profit over the last 5 months and now await for things to quieten down a bit. The 25% sounds meagre but it's in CHF which means that even when I'm not holding my physical, I'm not exposed to the USD either.
I now understand I may have exited early, and I also know that I entered late(r) but I never aim to get peaks and troughs exactly right. That's a recipe for disappointment IMHO.
When I see crazy vol and listen to otherwise financially ignorant people discuss silver like it was the price of gas or bread, I start to get worried.
Still, I cashed @47 and I'm pretty certain that even if the rally proves robust there will be a breather moment after breaching the $50 to allow me to re-enter without missing too much. (To say nothing of the CHF's continued appreciation vs. USD).
>> there will be a breather moment
That drop from 49.80 to 45 in the last few days? THERE was your breather.
I figure lots of American resistance at $50 and then it will most likely trade sideways for a couple of weeks and then resume its advance.
14+ Trillion Debt. GSR 1:31.93. NO coherent monetary policy from the USA.
The Beast is breaking its leash.
"I guess I was one of the few lucky ones."
You certainly are a lucky one. You must be. It is the only way stupid people make money.
funny;
mean, but funny too,
mostly funny
i'm going to allow it this time
JB or ZKB paper?
Never mind- if you're in Switzerland it doesn't matter.
Argentina came out and said they're banning foreign purchases of farmland yesterday... get with the program... Brazil and France have done the same thing... run your silver
"Farmland" has different meanings for a farmer, a politician, and a city dweller. That said, Argentina is still trying to attract foreign investors while Brazil is trying to keep them out. In either circumstance, the legal obstacle can be overcome with a simple SPV.
Forget what you "thought" you knew in regards to gold and silver, China is going to rewrite reality on their value and relative scarcity.
Silver stocks are in the midst of a 2008 crash vs. SLV.
Unreal how the "Ratio Traders" have scored the biggest bonanza of their lifetimes.
just wanted to extend a hat tip to you for admitting yesterday that you were wrong all along by admitting that investment success through diversification is a myth given that in this money printing environment most assets are going up more or less in tandem. true, some go up much faster which is why we physical silver and gold holders have been right all along, and to see you admit such is a positive step forward for you.
Why should we sell any silver when President Soetero is running a 1.6 trillion dollar deficit? WHy should I sell when the Bernank is keeping the fed funds rate well below the market rate? Why should I sell when JPM has a huge short position?
No one who thinks they are a trader will be in silver when it gets to $500. The more I see people like Rogers and FMX connect saying take profits, the more I know they have lost their positions and will be buying back in on a dip.
Not trying to conduct a trading seminar with this audience for sure, but if anyone is going to take some profits on the trading portion of your silver holdings, at least do it with a view toward the technicals and not on emotion (i.e., the way a big price move feels). Wait until the moving averages, RSI, OB/OS, momentum, or whatever you like confirm that you should sell (they haven't yet), and if you miss a few $ in the down move, so what, we're all long from at least the low 20's, right? Trying to pick the high print is a loser proposition, almost always followed by a higher one...
Good point. I'm allergic to "roller-coasters". Big fan of the "miniature railway" kind of movements. And right now the rollercoaster seems on full tilt...
Totally agree. Although, I would like to add that we should all have a re-entry strategy in addition to an exit strategy as long as gold remains in a bull market.
And, those who only have physical should open up a brokerage account so they can short silver to get out ASAP or just as a hedge. Afterall, physical silver bugs shouldn't have any problems shorting paper silver...right?
hmmmm sell my gold and silver for US frn's???...last time i checked my 200 year gold chart...1 oz gold 200 years ago was $10...100years ago $20.....1year ago $1000.. i bought scrap gold 10 years ago at about $40.....hmmm ..so my current break even is 10 gals of gas @$4.00 per gal?..not sure i'll ever experience an issue with gainful convertability, only needing 11 gallons of gas per ounce of gold to be a profitable trade....
.thank god i was wise enough not to go to college and learn JPM's version of math....
...next a 200yrs look at "the basket of goods which a $ can purchase"
i'll be keeping my gold
James Turk has silver all in backwardation. Once we get balance in the market for silver? industry quits panicking, stockpiling as to not shut down production. Investors ramping up beyond the less than 1% now in PM's, you may get level heads on the playing field. Let the markets play it back into contango and the bullion banks not be so desperate in propeganda to take silver out of strong hands. I've been accumulating silver eagles for years now. Living in Utah makes me a genius, since we now have the gold/silver legal tender law. Other states following as the legislatures know the dollar is bupkis. Don't fight the fed? Watching the states do that as more come to sound money and dump the shrinking FRN. When you're right sit tight!
Plus 10 for paraphrasing jesse livermore.
However as a troll i do have to point out jesse ultimately lost it all.
Not really - 5 mil in 1940 was still decent. He did lose the 100 million he made in th 29 crash though which is crazy
Untouchable trusts and cash assets at his death totalled over $5 million
This seems like Jon Nadler from Kitco,sponsered this article....
i like the idea of the poker table. and, judging from the silver vol on the crimex, there are several tables goin pretty good.
the author doesn't know why the phys is changing names and so on. like the texas longhorn endowment, clients who have profits rolling contracts are taking them in physical, not paper. i think the short magnitudes are being addressed. if this market can be controlled by big money and big traders, they can do just as well on the bull ride, and not be sued.
silver hasn't cleared 50, altho it looks like another try, right now. 50+ and buyers may go ape-shit. ceiling? floor-to-be? stay tooned!
After all this give and take, I'm gonna queu up Oivia Newton John.
Interesting, but I own some silver because of Benbernak's QE, I would rather have metal then paper. Silver is due for a correction, but I don't want any more paper than I already have. Silver is the poor mans gold. I believe silver is popping because the people are recognizing the ponzi is unsustainable, I don't want to get ruined if the dollar collapses! Will the Fed or the Politicians quit before a real crisis occurs? HELL NO! The evidence is the soap opera and hand wringing over cutting "38 billion" If this number is even real, didn't the CBO say the real number is more like 500 million. I also put some money in Canadian investments this week! F#@$ the FED!
oh---81 contracts for delivery, tomorrow!
DJ Comex Silver Delivery Intentions Breakdown - Apr 28
This thread is proof that no one can say what is going to happen with PMs. Anyone can make an educated guess about the short term, but is just that. Will PMs hold their price over the long term. The opinions suffer, depending on whether you are a buyer or seller. Neither side is smart enough to know for sure, so one side needs luck to prevail.
If you are in it for the increase in prices, you have no profit until you sell. If you are in it for a long- term hedge, buy and go away. It will be worth what it happens to be worth if you or your heirs ever decide to sell it. I think the debate over price assumes that there will be buying and selling at a given price. For those buyers who don't want to sell, don't read these trading opinions. For buyers of physical PMs, don't assume liquidity. PMs in the physical form are suited for hoarders(which is fine), not traders. If you are a hoarder, more power to you, but don't get suckered in to the traders' debate, IMO.
Just a bit of food for thought, but is it a mere coincidence that the new commodities exchange (HKMex) will be opening shortly in Hong Kong? The timing of opening day, May 18th, right smack in the middle of a COMEX delivery month for silver, followed by gold in June, couldn´t be more convienient. I know it´s been in the works since 2008, but I´m sure their vaults are packed with polished racks just waiting for the hords of physical PM´s to arrive from the West and fill them up. So, if a country, or multiple countries (Chinese, Russian and Indian companies all teamed up to get the HKMex off the ground), really are out to pick the COMEX vaults clean, they now have a nice centralized place to drop off all their newly acquired loot at. Could be a coincidence. Could be the end stage of a grand plan as well...especially when it´s been common knowledge that the Asians have been buying up gold and silver in record amounts.
A blow-off top. Really? I know like one other person personally that is investing in metals. I think that is pretty typical, no? They are still opening those storefront 'WE BUY GOLD' places all over. Has anyone seen a 'WE SELL GOLD' one pop up?
I dunno, we'll see, but still trying to digest this
http://fofoa.blogspot.com/
and determine my next steps......must reading for all you ZH'rs out there.
"Has anyone seen a 'WE SELL GOLD' one pop up?"
Sure thing! Come across to our nearest UBS branch here in Switzerland. If it's below 150k CHF ($170k) you get the physical right there and then!
They sell plenty of everything and to top it off, they do not charge for inspection on their own-issued bars upon redemption :)
Be careful what you say, this is Switzerland- who you are, and who you know, has far more to do with whether you can get physical gold than how much money you walk around with. Anyone can walk into any of the 50 UBS branches between my present location and #45, CH8001 no one is getting 150,000 physical at any of those branches on the spot- they don't carry that inventory. There are certain asset thresholds above which a UBS banker can get you 150,000 "no problem", whether it's real-time depends on your branch, but that is not a general truth. If you are established here on the supply-side of the PM business with refinery & bank relationships then the volume of physical available to you literally explodes. But the tourist on the street walking into a coin store in Switzerland is going to pay an outrageous premium compared to even the worst US coin dealers. However, if a tourist is willing to cough up four to six (or so) times Apmex's already high premiums, he can walk in and even get a one ounce silver coin on the spot, no problems, and be sure that it is actual silver... but one does pay for that privilege in Switzerland.
I'll sell 1/3 of my Silver when the National debt drops 1/3. I'm sure many here like me are in for the long run no matter what they say.
There's really only one way to end quantitative easing. The welfare/warfare state will prevent any political solution, and this is by design. A gold price north of 50k frn's per ounce would assure dollar dominance while supporting US debt load.
If the criminals in charge have pilferred the US Treasury gold hoard, it's game over. That's probably the most important information on earth right now.
If the criminals in charge have pilferred the US Treasury gold hoard, it's game over. That's probably the most important information on earth right now.
interesting
I think people need to go a little lighter on the conclusion of this article. He's simply suggesting taking profit and rolling it into something that is valuable in both an up and down market, something that has value in both a deflationary or inflationary situation. Land has perpetual value, and given that population growth is positive while amount of farmland remains the same (or actually decreasing, given soil erosion and environmental issues), the value of farmland is going to go up no matter what.
just bought a 200 cfm 175# 3ph slightly used air compressor for $400 --- as a backup -- new ones about $2000- please some one - did I do the right thing or should I have bought 8 oz of silver instead?
good buy, sir!
10 years ago things were different and I would might have agreed with FMX Connect. But this is not irrational exhuberance in silver, or gold, this is a currency collapse brought on by a slow motion default of the country with the WRC. Everything is unprecedented and old thinking does not apply.
The entire fiat monetary system and economic theories are failing and will be replaced. If I get out of silver it won't be for a falling fiat, it will be to swap for gold before it also slips into backwardation.
Priceless: The added advantage (joy!) of owning PMs and getting out of the coercive fiat system.
Silver's either going to go down, or it's going to keep going up? Brilliant.
the world wont change till it cost one silver eagle to vote
If silver is overbought then so is everything else-- if the market keeps grinding higher anyways it's because the dollar is done imploding.
I will agree with the sentiment to diversify gains into tangibles/physical, but nothing is overbought until the market doesn't like the carry trade anymore and/or total default and fiat destruction has occurred. In the meantime, many players will take part in the monkeyshines that are the capital markets.
Impressive Prediction in retrospect! Now, 5/3/11, hindsight is 20/20.