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Guest Post: Interpreting The Silver Move Yesterday
Submitted by FMX Connect
Interpreting the Silver Move Yesterday
The game is rigged. The small guy cannot compete. Today's margin raise in #Silver is an example. You cannot compete with the unintended consequences of flawed market structure no matter how smart you are.
They have unlimited cash for margin borrowed at fed discount window. You have a 20% rate Mastercard with unredeemable points (capital one lies).
They tell their creditor, the US Treasury, what assets on their books are worth (mark to myth). You get told what yours are worth by the banks or some objective 3rd party and must pony up the cash to cover the difference.
They have no need to assess VaR, their balance sheet is infinite. You have to think about your next pay check and must decide whether 2 cars are really 1 too many.
When the comex raises margins, all these things force you to puke your longs, and incentivizes them to add to shorts.
And somehow the info comes out post floor hours, during the thinnest trading time of all. Not hard to push a market on news like that. But more telling is that the silver market drops precipitously before the close.
Your superior intelligence and bankroll mgt is no match for their fed sponsored balance sheet. You will not win in the long run.
Casinos change decks midgame too you know.
If you’re right, they raise margins, prevent physical delivery, tax sales, make ownership illegal. You cannot win.
Like everything else, those that are in power want only to stay in power. Free competition is a risk for incumbents in fin, pol or govt
Right now levers are being pulled, rules lobbied against and changed, markets managed to make sure they stay in power. Its not a conspiracy, just self interest.
There are good people with good intentions out there trying to keep the markets level and fair, but the money determines the rules now in a significant way. Rules can be gamed.
We are a nation of laws , not ethics, and you cannot legislate morality without leaving a loophole somewhere.
Raising margins was not an exchange ploy to hurt you. But when was the last time margins were raised after a sell off? It has probably happened but I’m willing to bet the action is lopsided to the rally side.
Raising margins was not a scheme to crush you. But why is it needed, when for every long there is a short? And when the shorts have infinitely more capital than you, and there is no short squeeze of physical (as evidenced by the contango in the spreads) Trading SLV doesn’t help, they arbitrage both sides from one account. You unfortunately do not have a letter of exemption for position limits and for carrying positions in 2 markets and cross margining agreement with your clearinghouse.
By Elizabeth Thawne
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Buy physical silver, and keep it out of bankster hands. The banksters don't have lots of silver, but they do have lots of gold. Therefore, buy what they don't have, and take delivery. Silver, female dogz! Arrrrooooooo!
Maybe we should be ordering from the bullion banks themselves instead of ordering from KITCO/APMEX/GOLDMONEY.COM. We need to get the silver away from the banks.
I know it's not much, but I've already left ScotiaBank 1000oz poorer.
Sure sounds like sound logic to me!
You forgot perhaps the best gold and silver dealer of all:
www.tulving.com/goldbull.html
You better buy SILVER AND GOLD NOW before the war begins-- BREAKING NEWS about the missile launch: Reports circulating it was a Tomahawk BGM109, in retailation to Chinese moves.
Sorcha Faal is not a credible source. That is who is originating this "reports circulating around the Kremlin today.."
Correct. A year ago I stumbled upon that hokus pokus site after clicking on a link about the "Financial Meltdown". If true, then that "news" has no merit. The subject line in my email caught my attention... should have done some DD on the real source!
Could have been what was launched, but it could never make it anywhere near China with a range of 1,500 miles.
Keep ownership illegal?
That may happen in the U.S. but I m sure lots of people got physical PMs outside the U.S.
Uh, that's just a pewter 4 ought chain I'm wearing.
SILVER BITCHEZ!
First post here and had to start with that. Nice to meet you all. The move yesterday by the CME was an act of desperation. JPM & HSBC were undoubtedly bleeding because of their nefarious short positions. Silver in hand is still selling for $30 per oz. These crooks are being called out and I believe something big is on the horizon.
Welcome, bitch. Bitch in the singular precludes the use of the cool "z." Damn.
The banksters don't have lots of silver, but they do have lots of gold. Therefore, buy what they don't have,
There's 3 times more gold held in the form of jewelry than is held by the central banks. Cash for gold exists because the bankers are buying what you have and what they want more of. As for silver, carry on...
Elizabeth, EAT SHIT.
This game is MUCH BIGGER THAN JPM NOW. The whole FUCKING SYSTEM IS ABOUT READY TO MELT. China has decreased silver exports by 60 percent over last year. These fuckers are losing control, starting with the FED. The government will never confiscate DICK. We are a heavily armed nation and about the only thing they'll get is SHOT.
Well am I a fool to believe this weakness is a buying opportunity?
No way. But honestly, it's probably not correct to call what happened yesterday "weakness."
The theoretical, day-to-day paper price of silver is noise in the long run. The stuff is relatively scarce and very useful, so it has intrinsic value (arguably moreso than gold). The paper money it gets quoted in, not so much.
The stuff is relatively scarce and very useful
Much like Ron Paul's integrity and courage.
True.
Examples of integrity and courage from RP are very scarce indeed, but would be very useful.
Example: For as much as St. Ron whines about "auditing the Fed," he might be interested to know that the Fed has a government appointed, inspector general who is supposed to "conduct independent and objective audits, inspections, evaluations, investigations, and other reviews related to programs and operations of the Board of Governors of the Federal Reserve System (Board)."
The person charged with the task of auditing the Fed, Elizabeth Coleman can be seen here, in what appears to be a tranquilized fog, not even understanding the questions she's supposed to answer:
http://www.youtube.com/watch?v=cJqM2tFOxLQ
Now, you'd think Doctor Paul would be all over this incompetant, cross-addicted stooge like white on rice, wouldn't you? Calling for her immediate removal, so that we could get a real auditor (maybe one of his Paultards) in there ASAP, right?
Maybe you can point me to a link where RP calls for Coleman's firing, cause I can't find it. That to me would actually be an example of "integrity and courage."
Until you can find that link, I think it's pretty safe to assume Ron doesn't have any hair on his nuts.
Until you can find that link, I think it's pretty safe to assume Ron doesn't have any hair on his nuts.
Right. Because you have the master plan and any one who approaches things differently or takes his fight to what he considers to be more important venues is wrong, wrong, wrong.
Please plan my menu for the rest of the month. I realize that you hold the key to everything and I wouldn't want to have my eggs over easy when you and you alone know that they must be scrambled.
I'm just curious, are you cool with Elizabeth Coleman and the job she's (not) doing?
No one in their right mind is. Your boy has been (supposedly) championing this crusade his whole life, yet he won't speak up about this? Why? Cause he doesn't think the Fed is constitutional, so he doesn't have to speak up against corruption and incompetant oversight? That's his fucking job and he's too much of a pussy to do it.
But he'll make it all better when he's president....
Dream on, dude
I'm still trying to figure out how the Fat Boys dumped Comex silver after the close out into the Globex.
The country isn't going to shut down, inflation or not. Companies that are making usable quality product will continue to make money whether it is precious metal based or not.
I agree that it may be a buying opportunity but am waiting for things to get at least slightly oversold.
Physical delivery of non paper assets is what the world is flocking to. No way will they stop a rush to physical with a paper game. The whole idea of leaving paper is why people are going to PMs. All they did was put silver on sale for 12 hours and make the problem worse. They need to back off and let silver stabilize at a higher price rather than encouraging more paper shorts come in and load it up with rocket fuel.
All true except for a few factors: 1) The prices of precious metals are being set in markets in Mumbai, Hong Kong and other places just as much as New York and London these days, 2) eBay will tell you what real spot prices are (that's where real metal changes hands), and 3) investors must think long-term e.g. buy and outlast the powerful shorts.
Selling prices for Silver Eagles on eBay running well over $30 each, with many being over $33. 'Nuff said.
ah, but, those of us who have bullion....and paid for it in cash......
I had some encouraging news this morning. One of the top sales reps in our company, who has listened to what I was saying two and a half years ago and has noticed what has come to be, just informed me that she bought her first couple of pounds of physical silver. The unwashed masses are starting to see the seeds, that many of us planted years ago, starting to sprout. They fear missing the harvest and are starting to act.
This was the best news I have heard in a long time. Does anyone know the percentage of the US population that holds physical?
All of 'em ain't telling -- so any number would be spurious.
You are very wise for a racoon. Very wise.
No. Just spurious.
For starters put a number on the % of peeps that can't afford anything.
That will get you closer to what % can.
Hmm.... I think this kind of stuff just slows the bull market down, but seems to me it's still quite intact. It's possible that a galloping silver price might be more than just JPM.
Is this what passes for analysis??
While I have no doubt that regulations are for the benefit of rich, politically-connected incumbents, that didn't change yesterday.
What did is the price of silver. And gold. As stocks. And the Euro, the pound, the CHF, copper, and practically everything else under the sun. All at the same time.
I don't think one can ignore all of the rest. I don't think what happened yesterday has its explanation in the silver market.
Simple, if the price goes up, it makes perfect sense to increase margins, since the contract remains 5k oz, so the risk is higher, because the notional is bigger. If you buy something on margin, and they asked for 20% margin initially, and every day they pay you any P&L you make, and the price goes up, if you always have to post 20% margin, your margin will of course be higher every time.. and the opposite if things go against you.. I think its just logical. and margins are still relatively low.
What is interesting was the reaction and the timing, a lot of people were scared and as soon as there was a catalyst, stops went on flying..
That's bullshit, the CME always varies margin requirements on any futures contract when there is a significant change in market conditions. $6.5K margin for an SI contract is probably still too low, as yesterday's move would have easily exceeded the margin itself.
xie xie ni benny boy..xie xie ni blythe..xie xie ni jamie..and last and not least, xie xie ni nadler...you beautiful bastaard!
QE is a weapon against non-dollar denominated assets. You are being herded lemming-like into other currencies to bid them up. This will force those currencies to squeeze their population to wring out more tribute for the empire. If you run into metals, you are defeating the purpose of the thing.
You are troops being deployed in a currency war, but you want to be home safe in bed. Not happening. Not until China capitulates.
worth repeating. thank you.
Best way to protect yourself, DO NOT TRADE ON MARGIN! I do have a margin account but I use margin very seldom and close out fast, no chance for the pigmen to get me! Not looking to make a killing, rather little by little beat them at their own game! Soon it will be over anyways, markets are setting up for a huge drop, between Nov 15 and Dec 15 it will all be "said and done"! POMO/QE2 or not, this is DONE!
Please expand upon the November 15th date. What happens on or after November 15th and why? Thanks.
"There are good people with good intentions out there trying to keep the markets level and fair, but the money determines the rules now in a significant way."
really? who?
I dont know...and whose business is it anyway to be fairness monitor for silver purchasers? What, shorts weren't getting a fair shake somehow?
FUNNY how the market playground monitors only see a fairness problem when the SHORTS suddenly are getting creamed!
If theyre worried about fair trading go to the FED and shut down the manipulation masters at the source. Hypocrites everywhere.
random tunes on a random day
playlist throwback
game recognize game (a playlist): http://www.youtube.com/view_play_list?p=33135E8E214454B3
Thanks, Steak. Firin' it on up.
I guess the secret was buying silver at $9 and putting it in your own safe, NEVER allow banksters or traders access to your money or trades. Worse than Barbary Coast pirates.
I have it on good authority that silver will colapse to 3.58 by tomorrow.
Jon, you ignorant slut.
hey hey, a bit more respect here, after all am a senior ANALyst
Love the new avatar, Jon. I feel like I've seen it before somewhere.
Thanks for the heads-up Jon. And here I thought you were only a gold analyst.
lol, way to play the thread Jon.
If something ramps up a lot and then sells off that's called volatility. It makes sense that a security or underlying asset that is more volatile is required to have higher margins by the party lending the money - no?
OH I see now, thanks! Right when its getting really bad for king of silver shorts JPM and rising too fast, they call that 'volatility' and it must be put in check! Whoa so cool how that works, but only works in 1 direction.
What conditions/rates would you charge me to borrow your money and buy silver futures right now?
I don't have the relevant numbers handy at the moment but volatility is very much a measurable, known and dynamic quantity determined by the market, not a subjective judgement by one party. Volatility in silver has either risen recently or it hasn't.
The real debate here is whether commodities/PMs are a bubble or are they just keeping track of and anticipating dollar debasement. I lean pretty far toward the later as I think most (but not all) on ZH do but to the extent that recent price action has any bubble-like qualities to it - wouldn't it be wise to respond by tightening the spigot? After all, wasn't the recent housing bubble facilitated in part by margins (equity/loan) being set too low by lenders?
All reasonable statements.
So lets review.
Your playing ball and the ball leaves the hand of the pitcher and wait for it, new rule for when you can swing._
...and somewhere in the fine print of the agreement you signed when you opened your brokerage account there is language to the effect that just this sort of situation could arise.
Dear JP Morgan and HSBC scumbags,
Thank you for manipulating the price of silver so unbelievably low by your corrupt naked-shorting So Freaking Much (SFM) “paper silver,” which allowed me and so many others to buy silver at low, low, bargain prices for all these years, which we did because we understand Austrian business-cycle theory and thus know that the treacherous Federal Reserve creating so much money will lead to terrifying inflation in prices, and we know that gold and silver will rise as the buying power of the dollar falls.
And especially silver, which is the subject of this note, and which should be selling at $90 Right Freaking Now (RFN) to maintain its historical 15:1 ratio to the price of $1,350 price of gold, which, too, is manipulated and thus destined for higher prices, dragging silver along with it.
And now both of these precious metals will go much, much higher from here because the treacherous Federal Reserve is literally asking banks and Treasury-debt dealers how many trillions of dollars of new money the Fed should create! Inflation will soar!
So, thanks again, scumbags!
Respectfully yours,
Mixed Feelings in Florida.
http://news.silverseek.com/SilverSeek/1289286000.php
I'm right there with you, Hank!
Of all the things I don't get outraged about, redonkulously low silver prices is my favorite. I know that someday not too far in the future everyone will be saying, "I shoulda bought silver."
Thank God for Blythe!
(I just threw up in my mouth a little)
Mogambo..., is that you?
maybe the raising of margins wasn't a scheme to crush us per se, but the result of doing so was obvious and predictable.
I bet Silver hits 25 today.
I highly doubt it.
Just means buy more. My DCA is still low enough to absorb purchases up here and still be doubled.
This analysis is no different than a study of the Fed's action since Sept 1-moving goal posts at will, suborning rational action and establishing for an undefined period that the FED DREDS RED.
Most of you guys are really naive, or maybe you don't trade futures so you don't understand how this works. After the recent insane parabolic move the SIZ0 contract was on the verge of rolling over anyway. The margin hike was the catalyst, but anything could have caused it and the CME guys know that. They run a business and want to make sure they're covered when there's an inevitable sharp move in the opposite direction that's likely to wipe out a lot of long accounts, hence the margin requirement change.
Why does the exchange allow margin accounts in the first place? That's what I'd like to know.
This is not a buy and hold market. Everything may come crashing down overnight just like it did in fall 08 and that makes people twitchy. Buy low, make your money, sell high. Every second you hold the position is an opportunity for them to rape you hard with another bullshit rule change. Next time be out of market and ready to buy the dip.
The CME is within it rights to raise margins requirements...
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/9_Jim_Rickards_-_Threes_Company,_Silver_Margin_Change.html
And you are within your rights to die of hunger on the street after they legally steal everything you have. Business as usual.
And our own military is about on the verge of having the right to enter your home, haul away your stuff, and confiscate your women. Ain't freedom great!
How many women?
as many as you boys own & trade.
If one day trades physical metals they will inevitably get pinched by rumor or 'free market' margin manipulation, govt or bank manipulation...just a fact of life. I wouldn't recommend day trading physical gold or silver to anyone for those very reasons. Frankly, the CME move yesterday was barely a blip if you trade monthly or bi monthly....silver is already sitting at $27.77 and touch $28 earlier (NY Spot)...gold still in the $1400 zone. Things are only going to keep climbing as more banks diversify away from the dollar and into gold and silver.
Brilliant observation.
"We are a nation of laws , not ethics, and you cannot legislate morality without leaving a loophole somewhere."
They still have so many levers to pull. But somehow, silver is showing a meek shall inherit kind of buoyancy. While gold had all the attention deflected into it, it's been silver that they've struggled with, with it's dual nature giving two thrusters now, to Gold's one.
I'm siding with Silver, this time against the house.
Buying yesterday was a fascinating experience. Sitting in a Jewelery store (in Indiathey do bullion dealing also).
The shop's inventory had just appreciated by 50% in 3 months.
Crazy energy. But deathly quiet on the sales side as silver suddenly does nto look like th epoor man's gold anymore.
ORI
http://aadivaahan.wordpress.com
So Indians are into silver as well as gold. Interesting. Thanks.
Yesterday only the late,weak,long paper bulls
got shaken out of their position,too bad for
them.
Here is a thought for everyone. If all global citizens started gradually converting a part of their cash savings into gold and silver, surely the end result would be a de facto gold standard forced upon the governments and central bankers of the world. Just keep minimal cash balances on hand for daily transactions, but use the PM`s for your store of wealth. Currency can then just become another brand, subject to the vagaries of fad and fashion .....not to be kept for ever, but just used and consumed.
Bullshit article. Reality will catch up with them, one way or another, and when no tricks are left I'll be there to cash in. They are fragile. I'm antifragile.
Pierre-Joseph Proudhon quotes (French Politician and Journalist, 1809-1865)
Christmas morning, 2025.
Mom: Billy, what did grandpa get you?
Billy: um, $5000. I guess I can buy, like, 5 fries at McDonald's with that.
Dad: Oh Billy, don't get upset, you know he gets confused sometimes. When your grandpa was younger, he could trade 5000 ounces of silver for $5000.
Billy: If I had 5000 ounces of silver, I'd never have to work, ever!
Please tell us something we don't know. It has always been like that and it will always be. By the way, with all the surge in commodity prices, I wouldn't be surprised if CME raises margin requirements for other commodities as well.
The small guy can pick up physical silver at retardedly low prices. F- the game.
Why hasn't gold fallen 140 dollars today?
Huh? Where on earth did you get the idea we were a nation of laws? Rich-power-elites own all the laws too.
All we can do is try and figure out the current rules for the game, be nimble to the changes, and cache guns and ammo for the revolution....
Went out last night and bought another 100oz of silver coins.. $27per, off of Craigs List seller.. cant believe the deal I got..and he still has 2 monster boxes for sale.. I'm emptying the coin jar for a few more dollars to buy as we speak
The problem with this article is explained clearly in the other article posted on ZH - China CAN keep printing as their money is pegged to ours (so as we print, so can they) so they can continue accumulating physical silver ad infinitum until there is a commercial default. Looks like they're right back in the market buying today...
We want China to allow their currency to "appreciate" (ie stop printing it to keep up w/ us!) so they cannot keep purchasing PMs and other commodities of value... Well, they're about to give the United States the big fucking middle finger.
Hold on to your gold/silver boys and girls, this ride might be bumpy - but it will be rewarding if you're playing China's side - And I am a patriot and US Veteran, but enough is enough with what's been going on for far far too long in this country.
Cheers and good luck!
I am one of the small guys(main st blue collar worker). I have been buying junk silver at antique malls for the last couple months at a discount to melt value. The non coin dealers in these stores have caught on and have raised prices above melt value. I will now have to buy bullion fron coin dealers. I would also like to mention that your average person does not have a clue.