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Futures Curves Gone Wild: Backwardation Or Chaostango?

Tyler Durden's picture




 

Recently, the silver futures curve "normalized" for a while. Well, the "while" is over. It's backwardation deja vu, all over again. Or not quite...

From this (yesterday)...

...To this (today).

In a word (or two) - total chaos. With HFTs preparing to leave the Shiti stock churn, it appears the momo quants have now doubled down on silver. Only this time someone's vacuum tube is about to get burned badly.

 

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Thu, 04/21/2011 - 09:03 | 1191922 smlbizman
smlbizman's picture

man, your words are metamucill....i just wished i knew wtf they meant...

Thu, 04/21/2011 - 09:17 | 1191991 nonclaim
nonclaim's picture

Nothing to worry about, Bernanke will fix this in 15min --if he stops twitching on the floor in a fetal position asking for mom.

Thu, 04/21/2011 - 09:22 | 1192002 Dejean Splicer
Dejean Splicer's picture

Asking for Greenspan. Chairistan-tango.

Thu, 04/21/2011 - 10:34 | 1192233 redpill
redpill's picture

Ilversay itchezbay!

Thu, 04/21/2011 - 11:03 | 1192359 Thadeous
Thadeous's picture

I see what you did there...

Thu, 04/21/2011 - 11:11 | 1192401 Vendetta
Vendetta's picture

+47

Thu, 04/21/2011 - 09:40 | 1192072 boricuadigm-shift
boricuadigm-shift's picture

Let me correct you Tyler... It's chaoswardation!! :-)

Thu, 04/21/2011 - 10:52 | 1192309 wandstrasse
wandstrasse's picture

credit max Keiser talking about deflation/inflation:

PSYCHO-SCHIZO-BERMUDATION

Thu, 04/21/2011 - 15:27 | 1193550 johngaltfla
johngaltfla's picture

It means the quants are applying razor sharp nipple clamps on Jamie Dimon's short position on silver and twisting violently.

Thu, 04/21/2011 - 17:56 | 1194329 Sokhmate
Sokhmate's picture

my doctor said Mylanta

Thu, 04/21/2011 - 09:04 | 1191926 Cdad
Cdad's picture

cntrl alt del sv.  

There.  Fixed...bitchez!

Thu, 04/21/2011 - 09:11 | 1191948 High Plains Drifter
High Plains Drifter's picture

ah, here we are again, another chart reader trying to explain silver.   sir, silver is not SLV. SLV has no product, kapiche?  ask harvey.....

Thu, 04/21/2011 - 11:07 | 1192365 downrodeo
downrodeo's picture

+1000 THANK YOU!! God it gets so frustrating. I feel like a mental patient banging my head against a wall sometimes.

Thu, 04/21/2011 - 11:14 | 1192409 Vendetta
Vendetta's picture

hey, what bout those paper receipts sitting in the vault?  That's silver ain't it?  The paper weighs almost as much as the real stuff ... so its physical ...

Thu, 04/21/2011 - 09:15 | 1191968 Gordon Freeman
Gordon Freeman's picture

You are a fucking idiot.  "Typical pre-crash pattern"??

With your gift of seeing the future, why aren't you the richest man alive?  Fuck you.

Thu, 04/21/2011 - 09:27 | 1192033 Phillips Capital
Phillips Capital's picture

Don't curse man's desire to pattern-fit. technical analysis and pattern recognition can help sometimes, not all the time. thanks for the PDFs.

Thu, 04/21/2011 - 09:38 | 1192066 hack3434
hack3434's picture

Now tell us how you REALLY feel

Thu, 04/21/2011 - 10:52 | 1192308 SuperRay
SuperRay's picture

Gordon...Gordon...why the anger? do you have a personal issue with him?  Do some yoga or find yourself a good psychoanalyst...you'll drop dead and miss all the fun at this rate..

Thu, 04/21/2011 - 11:03 | 1192344 N_Jones
N_Jones's picture

As Dr. Who so succinctly put it "... Silly humans, always looking for patterns where none exist."

 

oh yea..... Silver Bitchez... :)

Thu, 04/21/2011 - 13:18 | 1192911 Sudden Debt
Sudden Debt's picture

.

Thu, 04/21/2011 - 09:54 | 1192105 SheepDog-One
SheepDog-One's picture

This same troll has been here for about 7 days, a few different names.

Thu, 04/21/2011 - 09:57 | 1192117 MCHedgeHammer
MCHedgeHammer's picture

trolls? come on man, market participant is the preferred name.

Thu, 04/21/2011 - 10:49 | 1192280 narapoiddyslexia
narapoiddyslexia's picture

Some sovereign psyops are no doubt floating around. BTW, I have a question. If you were China [metaphorically, of course] and you had $3T depreciating dollars, and you were really, really pissed that Uncle Ben was making you finance the US DOD via depreciating your trillions of dollars, what would you do?

Thu, 04/21/2011 - 10:59 | 1192328 SuperRay
SuperRay's picture

nara, you should have added, and those same motherfuckers were trying to steal your oil and undermine your play for african commodities, and any day now were going to blow the shit out of a country you're trying to get in bed with (Iran), and your national temperament gave you a propensity to think long term instead of quarterly, what would you do? Then I guess what you would do is be patient, because those assholes will implode momentarily...

Thu, 04/21/2011 - 11:03 | 1192345 narapoiddyslexia
narapoiddyslexia's picture

Thank you, I overlooked those other things. Would you buy silver? Under the hypothetical situation, of course.

Thu, 04/21/2011 - 11:44 | 1192536 narapoiddyslexia
narapoiddyslexia's picture

And there is this - 

http://webcache.googleusercontent.com/search?q=cache:BceRnFMDh_MJ:www.gl...

It was scrubbed from the US gov web site after it came to be noticed.

Thu, 04/21/2011 - 13:09 | 1192873 Sock Puppet
Sock Puppet's picture

Hey don't be blowing my cover bro!!!!!!!!

Thu, 04/21/2011 - 10:33 | 1192230 JNM
JNM's picture

Ivars,

I have not had time yet, to review all the links you have shared, but I did read the last one.

I hope you realize, that that document proves that Silver is in fact, not in a bubble, by the author's definition of a bubble.

I would like you to consider these two points:

1. Using daily data since low in 2008 of SLV, the best fit exponential model is

dp/dt = 0.987p^0.0054, which is in fact, a decaying exponential indicating a mathematical bubble has not yet formed.

2. A qualitative review of the books published on Silver via an Amazon book search sorted by year published, suggests no bubble like formation.

And, my anecdotal $0.02, google trends indicates the moving average for searches of gold, to searches of silver, is at an all time high, while the searches for silver are unchanged over 7 years.

I'm in the Jim Rogers camp on this topic.

Thu, 04/21/2011 - 10:52 | 1192306 JNM
JNM's picture

I'm sorry, please forgive me, there was an error in my numerical methods.

The model above, is not correct.

It's escaping me, right now, as to how to handle the negative price changes when modelling a differential of the form dp/dt = ap^x.

So, I went conservative.  I took the same data set, and made the negative price changes positive, and I still couldn't get a good model of the form dp/dt = ap^x.

Anyway...I'm done here.

Thu, 04/21/2011 - 11:05 | 1192368 Attitude_Check
Attitude_Check's picture

You have to modify the exponential to a complex exponential with a phase term.  That would require some modifications to the paper I think.  I haven't dug deeply into this however.

Thu, 04/21/2011 - 11:13 | 1192399 Smu the Wonderhorse
Smu the Wonderhorse's picture

Math nerds.  I need a drink.

Thu, 04/21/2011 - 11:20 | 1192427 Vendetta
Vendetta's picture

if you multiply by the square root of the k factor, it might work.  K factor represents the mathematical notation for an event called 'black swan', once you find its numerical value .. you will have your answer

Thu, 04/21/2011 - 11:42 | 1192525 TwoShortPlanks
TwoShortPlanks's picture

Here ya go boys, enjoy yourselves.

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

I'm off to get a drink too.

Thu, 04/21/2011 - 13:22 | 1192945 ivars
ivars's picture

"google trends indicates the moving average for searches of gold, to searches of silver, is at an all time high, while the searches for silver are unchanged over 7 years."

That is one of proofs its not a bubble which everyone would by into. But market cornering create bubbles public is not aware of.

 

Thu, 04/21/2011 - 14:01 | 1193131 goldfeed
goldfeed's picture

Does all this mean; your guess is as good as mine?

Thu, 04/21/2011 - 09:04 | 1191929 gmrpeabody
gmrpeabody's picture

Silver bitchez...

Thu, 04/21/2011 - 09:03 | 1191931 JPDG
JPDG's picture

I'm going to press "help" for explanation. 

Thu, 04/21/2011 - 09:27 | 1192027 Whatta
Whatta's picture

I tried that...but "help" was connected to the "reelect zerObama" contribution hotline.

"Give till you bleed, or at least until I find another war to start. War, bitchez." - Oh-Bomb-Uh, Nobel Peace Prize winner

Thu, 04/21/2011 - 09:06 | 1191933 Misean
Misean's picture

"it appears the momo quants have now doubled down on silver."

If so, the paper silver market should be destroyed.

Thu, 04/21/2011 - 09:10 | 1191957 High Plains Drifter
High Plains Drifter's picture

the paper silver market is a criminal activity at best. there simply is not enough product to back up all of the paper silver shares sold.  they dance with the devil. so let them burn.

Thu, 04/21/2011 - 09:34 | 1192050 cbaba
cbaba's picture

+1

They(Banksters A.K.A. FED,GS,JPM,MS, BOA,CB,DB etc..) Created Comex at the same year we left the gold standard(1971), the idea behind was to corner Gold and Silver market, control their price so that they can print as much dollars they want.

The Game is Over.

The Silver is the first real hole in this price manipulation going on for 40 years and it will become bigger and bigger every day, it will take Gold and other precious metals with it and Dollar will crash.

 

 

Thu, 04/21/2011 - 11:23 | 1192449 Vendetta
Vendetta's picture

+47.  I noticed that little 'tidbit' some time ago ... cause and effect baby

Thu, 04/21/2011 - 09:51 | 1192102 firefighter302
firefighter302's picture

"They dance with the devil, so let them burn."

Exactly. Well said.

Thu, 04/21/2011 - 12:13 | 1192658 gordengeko
gordengeko's picture

"Ever dance with the devil in the pale moonlight?"  Damn right I do!  That's what it takes sometimes, have to learn their ways, learn how they think, to figure out how to beat them at their own game.  That's why I'm grateful for sites like ZH.  If it wasn't for people willing to step in the pit of vampires and battle wills with the scum of the planet, we wouldn't have this knowledge.  The financial area is what theya re using to control humanity, everything is an illusion based on the avg human's ignorance.  Until that veil is lifted and we can surplant with new leaders that build humanity up instead of exploiting them for their own sick purpose, we stand no chance of survival as a species.

Thu, 04/21/2011 - 09:56 | 1192121 PeaBird
PeaBird's picture

I think that is what this chart today is telling us, is that the basis to totally fucked up and all over the place, with a bias toward backwardation.

Which is what you would expect of the paper exchange prices a day after this announcement: http://www.zerohedge.com/article/45-scotia-mocattas-registered-silver-transferred-eligible-status

This chart is also another way of saying that these tremors in the paper "price discovery" mechanism, that is the futures exchanges, are just another sign of trouble with the monetary system, and the exchanges themselves. Since the cash market is currently wrestling control away from the futures exchanges, to be the main market for price discovery.

A 39 year bias toward a normality of contango in the monetary metals market since 1972, but with a falling trend in contango since Winipeg opened to gold futures back then, til moving to today, where the bias in the basis is towards the possibility of permanent backwardation due to monetary stresses et al, does not come without it's volatility in the basis. We are seeing that volatility in today's chart. It should not be surprising.

The question, what equilibrium, if any, does the basis sit at next, after this volatility? Does it predominantly go back into backwardation? Or will we see contango again, if ever? Or does it remain in this chaos? All three perhaps?

Thu, 04/21/2011 - 09:04 | 1191937 Dan The Man
Dan The Man's picture
holy cow...overlay SLV on to the philly G/S index.  what an eye opener.  philly hasn't budged. mining stocks HAVE to rise...a lot.
Thu, 04/21/2011 - 09:37 | 1192063 MCHedgeHammer
MCHedgeHammer's picture

not unless it starts costing less to pay workers to get into the mine.  a la austrialia and canada, wages are spiking for mining workers.  fuck i might quit trading and go do that, maybe i can get paid in silver instead. 

Thu, 04/21/2011 - 10:06 | 1192155 Snidley Whipsnae
Snidley Whipsnae's picture

Mine = A hole in the ground with a liar standing near by.

Thu, 04/21/2011 - 11:27 | 1192456 Boxed Merlot
Boxed Merlot's picture

Originally, I think the saying was a hole in the ground with a liar on each end.

 

Today however, ben, tim and barney have shown no hole is necessary to deceive the masses into exchanging true wealth for nothing more than ciphers, threats and promises.

 

Give me a hole in the ground any day rather than the ether these folks are peddling.

 

 

Thu, 04/21/2011 - 09:07 | 1191938 silvertrain
silvertrain's picture

A Bird in the hand bitchez..

Thu, 04/21/2011 - 09:08 | 1191947 Re-Discovery
Re-Discovery's picture

Someone yesterday asked where the JPM vigilantes (HFs) were?

Thheeyy'rre  Heeerrrre!!

 

 

Thu, 04/21/2011 - 09:13 | 1191961 High Plains Drifter
High Plains Drifter's picture

blythe is running around trying to keep her pants on.

Thu, 04/21/2011 - 09:51 | 1192104 Josh Randall
Josh Randall's picture

++2 legs, running around without Calvin's on

Thu, 04/21/2011 - 11:26 | 1192462 Vendetta
Vendetta's picture

she's wearing a "snuggie" making blood sacrifices to the gods of greed

Thu, 04/21/2011 - 09:09 | 1191950 plocequ1
plocequ1's picture

It means BTFD. Like Marcellus Wallace, Bernanke is on it

Thu, 04/21/2011 - 09:21 | 1192009 Dolemite
Dolemite's picture

Too bad the Bernank can't call The Wolf

Thu, 04/21/2011 - 09:09 | 1191951 sunnydays
sunnydays's picture

HAPPY EASTER Blythe, Hope yours is as wonderful as mine will be..... OH, but I will be happy Silver is - To the Moon....... 

 

 

 

 

Thu, 04/21/2011 - 10:20 | 1192195 I Am The Unknow...
I Am The Unknown Comic's picture

...ummm, I'm not sure antichrists celbrate Easter the same way, so i'd be careful about wishing her a happy one.  She may be celebrating the crucifixion of Jesus, poison children's candy, dye rotten eggs black...I don't know.  I wouldn't wish her a happy anything.  I did however, wish her an unhappy birthday a few weeks ago. 

Thu, 04/21/2011 - 09:09 | 1191954 Catullus
Catullus's picture

I have no link. But Rep Brad Sherman asks CFTC to exempt mutual funds from position limits. Concerned that "could lead to reduced liquidity and higher costs for investors." also it would force mutual funds to "make unprecedented selective redemptions on a large scale, which could have widespread and dramatic effects on the marketplace."

Translation: this is a cookie you can't unbake with regulation.

Thu, 04/21/2011 - 09:15 | 1191965 High Plains Drifter
High Plains Drifter's picture

be careful with the tribal member, sherman, a snake in the grass if there ever was one....

Thu, 04/21/2011 - 09:37 | 1192064 Catullus
Catullus's picture

Being part of the tribe doesn't bother me as much as this was the guy who said on the floor of the house that martial law was contemplated if TARP wasn't passed

Thu, 04/21/2011 - 09:46 | 1192093 Gubbmint Cheese
Gubbmint Cheese's picture

Correction - he said he was threatened that if he didn't pass TARP that there would be martial law...

Thu, 04/21/2011 - 11:32 | 1192481 Vendetta
Vendetta's picture

Dear US military, these bankers have threatened and destroyed our nation ... please address this issue.  Thank you

-An American citizen

Thu, 04/21/2011 - 09:10 | 1191955 Chappy
Chappy's picture

Uggg, everytime I get in there is a 10% orf 15% correction... I'd hate to ruin it for everybody.

Thu, 04/21/2011 - 09:36 | 1192055 Central Bankster
Central Bankster's picture

Good, I want to BTFD :)

Thu, 04/21/2011 - 10:17 | 1192192 A Nanny Moose
A Nanny Moose's picture

Agree. Doooo Eeeet!

Thu, 04/21/2011 - 09:12 | 1191958 Dangertime
Dangertime's picture

NOOOOO!  I'm not done buying Puts!  Let's hit $50.  Buy everyone, buy buy buy!!!

Thu, 04/21/2011 - 09:17 | 1191977 tmosley
tmosley's picture

You are an idiot.  

I hope you're all in.

Thu, 04/21/2011 - 09:20 | 1191994 Dangertime
Dangertime's picture

I'm about 16% in from my trading account.  Haven't touched it with my retirement money.

If we hit 47 I may up it to 19%.  And $50.....wow, the opportunity to short there is breathtaking!

Thu, 04/21/2011 - 09:55 | 1192118 dogbreath
dogbreath's picture

Dude

look at gold. it has barely moved in comparison which is contrary to all previous action.  Silver seems to be correcting the imbalance in the gold/silver ratio - permanantly.  It might not correct and give us the opportunity to BTFD.  Silver hasn't gone parabolic either.  I think this is an exercise in making the chinese pay for their silver like we make them pay for copper and oil. 

Thu, 04/21/2011 - 10:04 | 1192146 Dangertime
Dangertime's picture

Silver was due for a run.  And now it is due for a correction.  And yes, it has gone parabolic on the daily and weekly.

Thu, 04/21/2011 - 12:10 | 1192648 dogbreath
dogbreath's picture

maybe - because the long overdue correction in the silver/gold ratio this market could go sideways to destress the overbought(puting words in your mouth) condition.  fundamentals are kicking in.  china demand, libya and the M.E. snafu, and fukushima fubar, PIIGS,..............  

Put it on the line, you've got puts but really how low can silver go. 

 

I only see one possibility for silver to go significantly lower, and that will be a general market selloff where everything goes down.  When that happens though the metals will recover quickly because the lie that PM's have no value(blah blah blah) has no believers anymore.   

 

 

 

Thu, 04/21/2011 - 13:47 | 1193057 narapoiddyslexia
narapoiddyslexia's picture

FTW, what civilization has a long history of liking silver more than gold? 

Thu, 04/21/2011 - 10:09 | 1192163 Snidley Whipsnae
Snidley Whipsnae's picture

Are you enjoying watching the purchasing power of your 'retirement money' sink like an anchor?

Thu, 04/21/2011 - 10:42 | 1192263 Dangertime
Dangertime's picture

Wait til the silver bubble pops!

Thu, 04/21/2011 - 15:32 | 1193600 akak
akak's picture

I troll, I troll, it's off to work (for JPM) I go!

Thu, 04/21/2011 - 10:43 | 1192257 Richard Head
Richard Head's picture

What's 16% of 0?

You're a pathetic joke. 

Thu, 04/21/2011 - 11:08 | 1192383 Dangertime
Dangertime's picture

Wow you sure showed me.

It won't be long now....

Thu, 04/21/2011 - 09:28 | 1192015 tallen
tallen's picture

Go on, keep doubling down on your retirement money. Great investment your making shorting silver.

/sarcasm

Thu, 04/21/2011 - 09:29 | 1192029 Dangertime
Dangertime's picture

With October puts?  They still have 90% of their value.

Now, be a good lemming and go buy that physical.  Daddy needs to buy some more puts once you bag-holders drive the price up a little bit more.

-------

Looks like you changed your text.  You need to reread, I did not make any bets yet in the IRA accounts.  However I have to admit it is very tempting.

Thu, 04/21/2011 - 10:43 | 1192267 Hephasteus
Hephasteus's picture

What do you and comex have in common?

You both don't know not to fuck with silver without having safe sex.

http://puns.icanhascheezburger.com/2011/04/07/funny-puns-safe-sex/

Thu, 04/21/2011 - 11:10 | 1192395 Dangertime
Dangertime's picture

What do silver and mosely's wife have in common?

They both go down HARD.

Thu, 04/21/2011 - 14:17 | 1193208 tmosley
tmosley's picture

Awww, u mad?

You're losing all your money.  So sad :(

Thu, 04/21/2011 - 16:30 | 1193922 DoChenRollingBearing
DoChenRollingBearing's picture

I just junked Dangertime for his junky reply.  

Danger, you are a very ugly troll.  Please leave.

Thu, 04/21/2011 - 15:35 | 1193625 akak
akak's picture

Hmmmm, what's that incoherent babbling noise I hear?

Ah yes, just the desperate gibbering of yet another rabid silver-bashing troll.

Run along now, junior Nadler --- nobody is buying your lies and bankster propaganda here.

Thu, 04/21/2011 - 09:13 | 1191967 Charlie_Day
Charlie_Day's picture

As pointed out before, we're heading into a holiday weekend ripe for manipulation. Does that mean we should get out of the coming train, or suck it up and BTFD?

Thu, 04/21/2011 - 09:17 | 1191990 Chappy
Chappy's picture

My question as well ... Should I dump my AGQ or buy some calls?

Thu, 04/21/2011 - 09:53 | 1192107 Charlie_Day
Charlie_Day's picture

Personally I dumped everything. I highly doubt they are gonna ramp UP ag, light vol. generally means bear raids. I'll buy on mon/tues either way. I just ain't playing the game this weekend.

Thu, 04/21/2011 - 10:17 | 1192181 gmrpeabody
gmrpeabody's picture

+42 or 43

Thu, 04/21/2011 - 10:21 | 1192202 nonclaim
nonclaim's picture

light vol. generally means bear raids.

It used to; these days you might get a bull stampede just as well, powered by an HFT, with very little money at risk.

Thu, 04/21/2011 - 09:18 | 1191983 Cognitive Dissonance
Cognitive Dissonance's picture

Only this time someone's vacuum tube is about to get burned badly.

And when they burn out it's a bitch finding the bad one among all the good.

Thu, 04/21/2011 - 09:30 | 1192041 Chicken_Little
Chicken_Little's picture

So this is what happens during a flash crash...

Thu, 04/21/2011 - 09:17 | 1191989 Hephasteus
Hephasteus's picture

So their algorithym has gone from trying to linearly print a desired drop in price to becoming a non linear insane math tard.

Great now its going to want to strap geihtner onto the rack next to it.

 

Thu, 04/21/2011 - 09:21 | 1192006 vas deferens
vas deferens's picture

Can someone translate the bold pls.

In a word (or two) - total chaos. With HFTs preparing to leave the Shiti stock churn, it appears the momo quants have now doubled down on silver. Only this time someone's vacuum tube is about to get burned badly.

Maybe im slow, but I would like to know what exactly Tyler is saying.  Thanks

Thu, 04/21/2011 - 09:26 | 1192017 Lord Welligton
Thu, 04/21/2011 - 09:30 | 1192039 MCHedgeHammer
MCHedgeHammer's picture

HFT, high freqency traders, shiti(he meant shit) stock churn, them leaving the dull grind of stocks for the sick momentum plays in silver, momo meaning dumbass, and the vacuum tube referencing how old computers were run and meaning that some HFT comp is going to implode and create a massive arbitrage opporutunity.

Thu, 04/21/2011 - 09:57 | 1192115 Ivanovich
Ivanovich's picture

No, he meant to say "shiti", in reference to Citi bank.

Thu, 04/21/2011 - 09:29 | 1192044 TragicHipster
TragicHipster's picture

HFT = High Frequency Traders (computer programs)

Shiti stock churcn = allusion to Citi, and a reference to HFT manipulations

momo quants = traders who devise devious computer programs

vacuum tube = ass

Thu, 04/21/2011 - 09:47 | 1192090 Old. No. 7
Old. No. 7's picture

It's right on the above chart.

 

Source:

Default

Default

Default

Default

Thu, 04/21/2011 - 09:25 | 1192014 MCHedgeHammer
MCHedgeHammer's picture

why are silver longs so defensive? about bears, you guys are killing it, be happy.  For ever bull a bear, for a every rose a thorn.  if anything you guys should be thanking the bears, its their stops that push it up another buck every day.

Thu, 04/21/2011 - 13:17 | 1192901 dussasr
dussasr's picture

I was thinking the same thing.  Anyone who thinks Silver might be a bit overextened here is instantly villified and ridiculed. 

 

Anyone who is THAT emotionally attached to their positions might want to close them out and get flat for a while until they can clear their head.  Normally, when I find myself breaking my arm patting myself on the back about how much money I'm making in a trade - it is time to sell.

Thu, 04/21/2011 - 14:00 | 1193123 narapoiddyslexia
narapoiddyslexia's picture

This is very good advice if you're a trader. Not so much if you're a collector. I don't care what the price is, I'm never selling my physical. I've spent a long time building up lots of it and I'm just going to let it pass to my heirs. They can have the keys to my bank depost box. But it is fun to watch it go up, and I like to hiss at people who say its going to go down. Its a small market, and there are millions of people who would like to own some physical. The Chinese government is urging a couple of hundred million fairly well-off people to buy it. There are about 5 ounces for each of them, if they have 100% of the silver currently above the ground. They only have a small proportion, so what happens to the price? I've talked to people who live there, and others who have traveled extensively there, very recently. Their demand is not going to abate for a long, long time. It may go up and down short term due to manipulation, but long term, the demand for silver will be there for years.

Thu, 04/21/2011 - 09:26 | 1192019 Sow-puncher
Sow-puncher's picture

Silver will run!

Thu, 04/21/2011 - 09:31 | 1192037 chistletoe
chistletoe's picture

Tyler -- have a look at Silver Wheaton (SLW).

For many months they were outperforming SLV in the paper silver market.

They started faltering about ten days ago.  Yesterday they started out strong

but collapsed in the final hours, ending up down $1.32 or about 3%.

One fundamental model -- their business model consists of purchasing the

"silver stream" from gold and other miners, and lately, those miners have not been

exactly eager to sell, especially for the most recent offer of $5/oz ...

and another thing you could comment on -- the very most popular USA-minted coin

is called the "Morgan Dollar"...people did not want them at all at first, the only reason the mint created it in the first place was to help out the silver miners in Nevada ...

Thu, 04/21/2011 - 09:58 | 1192119 Charlie_Day
Charlie_Day's picture

You watch yourself, talking about SLW here is them thar fighting words. Long time owner, but a sudden CEO switch is a bit suspicious, I sold for now. But still fighting words. Also as KWN points out the miners are slacking in catching up.

Thu, 04/21/2011 - 10:19 | 1192203 gmrpeabody
gmrpeabody's picture

+++

Tread lightly...

Thu, 04/21/2011 - 10:07 | 1192161 GOSPLAN HERO
GOSPLAN HERO's picture

"The Crime of 1873" screwed silver.

Thu, 04/21/2011 - 11:36 | 1192502 Vendetta
Vendetta's picture

+47

Thu, 04/21/2011 - 09:28 | 1192040 Re-Discovery
Re-Discovery's picture

Look.  Let's stop the end of the world scenarion if silver hits 100.  Bernanke will not be letting anyone "go down" because of bad silver bets (and these are shorts that have been in place for a while now, not just last week.)  So much the better for silver investors because Bernanke would pump $50 billion in in a heartbeat to 'save' JPM.

 

It could be one of the great trading (or investing whatever) opportunities in the last several years.  If it crashes, well, we'll put our big boy pants on and try something else.  So far it hasn't, and it doesn't look like it will (at least long term.)

Thu, 04/21/2011 - 09:42 | 1192080 cbaba
cbaba's picture

You don't get it.

Its not something Bernankestein can solve by just printing money .

It only effect the future paper silver price, not the physical silver price.

There will be backwardation that's all they can do, People have no trust in Comex and the game is over, they will ask physical delivery at the end of their long contracts each time and the JPM have to buy actual physical silver to deliver and this will increase the price of silver more..

Only way to stop this Silver price increase is to bring silver from Uranus and flush the market with this..

.

Thu, 04/21/2011 - 10:09 | 1192159 MCHedgeHammer
MCHedgeHammer's picture

not saying your wrong, wouldnt want to do that on ZeroHedge.  The real driver of silver is QE 1 and 2 and low interest rates and of course the massive debt.  Volker jammed rates up in a fucking hurry in the early 80s and look what happend to oil, gold, silver and all commodities.  I dont think Bernanke will take the same action, but if prices continue to rise, if he doesnt take a strong dollar policy the Republicans will for him.  Austerity did wonders for the pound and it will do the same for the dollar, mix in an end to QE and who knows.  its all speculation and lets be honest, i wont believe untill i see it with the Big Ben.  Although they did fire a shot a couple weeks ago about 75 basis raise and Ben has fired bullets at runaway moves in the past, A la the record steep curve last year.

Thu, 04/21/2011 - 11:40 | 1192517 Vendetta
Vendetta's picture

I tend to agree however, the revolving refinancing of massive unpayable debt with a completely hollowed out manufacturing economy makes any Volcker type action = game over ... immediately for the clusterfuck called the US monetary system

Thu, 04/21/2011 - 12:09 | 1192640 Re-Discovery
Re-Discovery's picture

I do get it.  But I work during the week and go to silver church on the weekends.  The near term objective is to catch the wave or not to be crushed by one. 

Big moves require big nuts to stay with (think surfing mavericks.)  You catch the wave, you are a rock star.  You dont, you're a crab's lunch.  I believe this is a great trade and a great investment and the short-side forces that are working this little market now are out crush you.  I agree with you, they likely can't.  Just know they want to.  Sell what you need to to sleep, and hold physical silver (defined by several investment options) especially overnight/forever.  That's my mantra.

 

Thu, 04/21/2011 - 09:32 | 1192047 Forgiven
Forgiven's picture

If you focus on one thing about silver prices folks, remember this:  ELASTICITY.

 

No matter how hard they try to bitch slap it down, it keeps coming back up.  No matter how many margin hikes, Fed slugs they drag out of the closet, it keeps popping back up.

 

Elasticity is your evidence that the normalcy bias most are stuck in, is out the door.  Silver is going higher and the elasticity supports that.

Thu, 04/21/2011 - 12:09 | 1192645 Creed
Creed's picture

Silver is going higher and the elasticity supports that.

 

 

thanks Forgiven, I've been watching that too but the reminder was timely

 

but I'm still thinking about taking some profits off the table by Sat

 

I think there will be huge resistance & outright selling pressure beginning around $49

Thu, 04/21/2011 - 15:40 | 1193641 PrDtR
PrDtR's picture

Excellent comment.. makes marginal sense!

Thu, 04/21/2011 - 09:31 | 1192049 boricuadigm-shift
boricuadigm-shift's picture

Tyler,

    Can you post the volatility vs moneyness vs contract chart... It must be interesting to watch... Maybe the shepple will get it since it is in 3D. :-)

   I forgot the name of the command though :-(

Thu, 04/21/2011 - 09:32 | 1192051 Dangertime
Dangertime's picture

Don't give up now, push!  Buy some coins NOW!

Thu, 04/21/2011 - 09:43 | 1192076 Central Bankster
Central Bankster's picture

It would be smarter to take your 10k trading account and leverage into some long dated mining stock calls.  The problem is you want to be smarter than the market and make some hero call.  You know how many top calling corpses the Nasdaq left in its wake?  This thing has got another 6-12 months of parabolic move ahead of it.  Insanity to short for more than an hour or 2.

Thu, 04/21/2011 - 10:01 | 1192127 Dangertime
Dangertime's picture

With the anemic leverage the miners have right now? 

Plus don't forget, summer is death for all miners.  Best to buy in a few months from now when everyone is selling.

Thu, 04/21/2011 - 15:47 | 1193682 akak
akak's picture

Death is truly reserved for the center-thinking sheep who cannot envision any possibilities, much less realities, that conflict with their "mainstream", blinkered, conventional, Establishment-constructed mindset.

Oh, also for disingenuous, blatantly lying, silver-bashing trolls and Nadler wannabes.

Thu, 04/21/2011 - 09:38 | 1192058 boricuadigm-shift
boricuadigm-shift's picture

Here comes silver... Start backing up the trucks!!!  I love the witch! :-)

Thu, 04/21/2011 - 09:52 | 1192103 Long-John-Silver
Long-John-Silver's picture

* Finds Blythe naked and drunk again. Which 'position' should I "take" this time?

Thu, 04/21/2011 - 15:36 | 1193624 PrDtR
PrDtR's picture

Funny! BUT, come on now! Do you have ANY couth?

Thu, 04/21/2011 - 09:59 | 1192122 Dangertime
Dangertime's picture

Wow a HUGE battle going on here between the bulls and the bears.  Look at the SLV volume.

Call in an ounce of silver everyone, put the pressure on the bankstas!

Thu, 04/21/2011 - 10:05 | 1192147 Hephasteus
Hephasteus's picture

Don't make me defend my currency with a hope and change speech. Cause I'll fucking do it!!

This time it's different bitches!!!

Thu, 04/21/2011 - 10:03 | 1192132 Herne the Hunter
Herne the Hunter's picture

Philly Fed at 18.5 on expectation of 36...

Gravity, bitchezzz

Thu, 04/21/2011 - 10:06 | 1192133 GOSPLAN HERO
GOSPLAN HERO's picture

"The painful experience of the runaway inflation and collapse of the Continental dollar prompted the delegates to the Constitutional Convention to include the gold and silver clause into the United States Constitution so that the individual states could not issue bills of credit." -- Wiki

Thu, 04/21/2011 - 10:04 | 1192143 The Axe
The Axe's picture

Just left Manfra and Tordella  46.75 a coin less 1%   I am going to miss those 1989 babies..kept one sleeve for food purchase if the world really blows up...lol

Thu, 04/21/2011 - 11:41 | 1192531 Boxed Merlot
Boxed Merlot's picture

The better trade in PM at this point would be Ag for Au.

 

1 year ago=64:1

Yesterday=34:1 and continuing to fall

 

Historic ratio=16:1

 

If one's looking to accumulate, why "cash out" in casino scrip between trades?

Thu, 04/21/2011 - 12:14 | 1192656 Re-Discovery
Re-Discovery's picture

Ratios may not be fully understood, but I agree that anyone who wants to take a break from silver's move should shift into gold, platinum, etc.

Thu, 04/21/2011 - 10:31 | 1192185 slewie the pi-rat
slewie the pi-rat's picture

ok this is totally tubular.  my diode is runnin clear my triode is shiftin gears, my oscilloscope is sexily sinous and my test pattern is forever, dearest.

other than that, i'm thinkin:  Negative Interest Rates Come Home To Roost?

if the best counterparty = no freaking counterparty at all, slewie would opine that too big to fail has, unhhh,...failed, and it is game, set, and match and everybody can see billie jean is at the door and she is not gonna double fault when she isn't even serving, for pete's sake...

in layperson's terms?  well, this is gonna be tough for leo and bruce, but debt does NOT = money.

money = money.  surpise, surprise!!!

Thu, 04/21/2011 - 11:53 | 1192582 Sunshine n Lollipops
Sunshine n Lollipops's picture

Totally tubular. HA! I like your style, slewie.

Thu, 04/21/2011 - 10:56 | 1192313 Stuck on Zero
Stuck on Zero's picture

I understand that there were speculators, stock traders and economists aboard the Titannic on that fateful night who were overheard to say:

"The water is rising exponentially."

"That's a sign of an overheated market."

"It will crash soon and all back to normal levels."

"There's always a return to the mean."

"I'm going to short water futures."

 

 

Thu, 04/21/2011 - 11:14 | 1192412 blunderdog
blunderdog's picture

Nice.

Most folks have learned by the age of 9 or so that constant repetition doesn't make a claim more convincing.

Thu, 04/21/2011 - 11:35 | 1192491 Piranhanoia
Piranhanoia's picture

only some people get it by 9. Some are lost in fantasy land before then and never make a logical choice.

Thu, 04/21/2011 - 11:24 | 1192453 Dangertime
Dangertime's picture

Remember the talk about the "new economy" and how "this time it is different".

Replace "tech stocks" with "silver" and now we have an analogy.

Thu, 04/21/2011 - 11:48 | 1192565 Vendetta
Vendetta's picture

Yep, its pretty much the same ol, same ol as always except for some of the minor details of the worlds reserve currency is being destroyed.

Thu, 04/21/2011 - 12:14 | 1192652 hardcleareye
hardcleareye's picture

.

Thu, 04/21/2011 - 12:14 | 1192653 hardcleareye
hardcleareye's picture

But it begs the question what will the future look like should this occur?

Thu, 04/21/2011 - 15:49 | 1193701 akak
akak's picture

Your repetitive silver-bashing shtick is getting as old, and as shallow and predictable, as Nadler's. Give it up, troll.

Thu, 04/21/2011 - 11:05 | 1192356 prudentbear
prudentbear's picture

What is the most the spread has been in contango between the first two liquid months for silver?

Or where can i find out?

Anyone here buying the spread in anticipation of a delivery squeeze?

Thu, 04/21/2011 - 11:25 | 1192460 Dangertime
Dangertime's picture

Anyone remember back when $750 gold was supposed to be the line in the sand for JPM?

Hmmm, wonder how they survived that.

Thu, 04/21/2011 - 11:56 | 1192598 White.Star.Line
White.Star.Line's picture

We will reach the "top" for silver and gold when we reach the "bottom" of unravelling debt.

Thu, 04/21/2011 - 12:31 | 1192722 Silver Bug
Silver Bug's picture

The Comex is beyond broken.

 

http://silverliberationarmy.blogspot.com/

Thu, 04/21/2011 - 13:17 | 1192913 r101958
r101958's picture

I bought all my physical when it was $14-20 and even then we had the Ivars running around saying it was a bubble. Like I have said before when they unprint 4-6 trillion dollars then I will believe that there will be a lasting correction. Otherwise, no.

Thu, 04/21/2011 - 13:17 | 1192918 r101958
r101958's picture

BTW, you'll note that Ivars gets on here and posts the same screed about 2 or 3 times a day. Always about a silver crash.

Do NOT follow this link or you will be banned from the site!