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Guest Post: Short Squeeze! Here Comes 50-dollar Silver

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Mon, 03/07/2011 - 17:14 | 1027380 nope-1004
nope-1004's picture

$50..... That's all?

Once the SLV is exposed as the Fed and Treasury fiat mechanism it is, then all bets are off how high this pig will fly.

Mon, 03/07/2011 - 17:19 | 1027411 SilverRhino
SilverRhino's picture

When silver trades near parity for gold?   That's the top. Till then I'm holding, gifting some (excellent teaching aid for your children, nieces and nephews) and collecting :-)

Relatives start getting it (PM's) when you tell them that your niece's birthday gift from last year is worth double what it was when you gave it to her.    Then to rub salt in the wound you ask them about value retention of her chinese plastic crap toys from last year. 

Mon, 03/07/2011 - 17:54 | 1027555 Backspin
Backspin's picture

Excellent comment, and I hear you.  I've had the hardest time trying to get family members to understand.  They think I'm crazy.  I, on the other hand, well, I think they're crazy for not buying any.  I'm the oddball, though.

And these days, I'm okay with that.

Mon, 03/07/2011 - 18:15 | 1027624 Quixotic_Not
Quixotic_Not's picture

My family used to think I was a bit crazy too...

Back in 1999 when I told them the dot.com bubble would blow...

Back in 2003 when I told them that the Housing Bubble would be the biggest bubble in the history of mankind, and I took all my liquid assets and bought Ag...

Back in Aug. 2005 when I told them to sell their houses and buy PMs with the profits...

Back in Aug. 2007 when I told them that the ENTIRE U$ banking system was insolvent and that we would have SEVERE disruptions...

Now they're afraid to talk to me.

Except the formerly progressive hopium kid that just graduated from UCLA with a degree in Economics/Mathematics - He's finally sobered up and asking me what I think will happen next, but with ALL the normal rules of business suspended, I can't make any definitive calls that don't involve Hyper-inflationary Depression and World War.

People should have listened to us...

Mon, 03/07/2011 - 18:28 | 1027678 duo
duo's picture

I told my accountant in the fall of 2006 that:

GM was going to go bankrupt.

Housing prices would drop in half and take the banking system down with it.

Gold would double (it was $600 then)

My accountant looked at the phone, ready to have me comitted.  3 years later we talked and he remembered the conversation.  What I didn't forsee was GM being propped up, or TARP/QEx.

Mon, 03/07/2011 - 19:01 | 1027778 Quixotic_Not
Quixotic_Not's picture

Yeah, lots of sheepsters missed the Ag boat for sure...

Look at the poor ticker forum morons that followed Karl "I'm a lefty" Dickinger and his "Short the market, PMs are for dummies" mantra -- They not only got bent over by the Banksters + .GOV, they got bent over by a narcissistic jerk too!

ROFL

Mon, 03/07/2011 - 19:40 | 1027871 Broken_Trades
Broken_Trades's picture

Funny how you predicted every single major financial mess for the last 10 years.  I really wish you would have told someone.

But youre 100% so you can tell us whats going to happen next right?

Oh wait, the rules have changed now... Darnit.

Mon, 03/07/2011 - 19:54 | 1027886 Quixotic_Not
Quixotic_Not's picture

If I was insecure, I could go back to some websites I frequented back into the 90s, search my posts, and provide dated evidence to prove my claims...

But I am VERY secure in my person, finances and effects and don't give a crap what some anon on the interwebs might think.

Wanna see evidence that some of "US" saw this shit coming WAY back in 1992? (Yes, I was active in Perot's 92' campaign)

http://www.youtube.com/watch?v=Rkgx1C_S6ls

P.S.  It might be worth noting that I've had a front row seat to the multi-generational bankster looting that started in full effect in the mid 90s - Didn't take a genious to figure out this stuff anyways, just someone that wasn't stuck in the herd...

Mon, 03/07/2011 - 21:16 | 1028186 FEDbuster
FEDbuster's picture

WW3 is a valid prediction.  In some ways, it may be the only option for the West (got to keep the "juice" flowing from the Mideast).  The FED's pumping and enabling can only last so long before the rest of the world gets tired of the Bernak's counterfeiting.

Mon, 03/07/2011 - 23:22 | 1028445 Broken_Trades
Broken_Trades's picture

@ Quix

If I was insecure, I could go back to some websites I frequented back into the 90s, search my posts, and provide dated evidence to prove my claims...

But I am VERY secure in my person, finances and effects and don't give a crap what some anon on the interwebs might think.

If you were so secure you wouldn't need to give us a chronology of all your prescient stock market calls in the last decade to a bunch of anons on the interwebs now would you?

No one doubts your smarty-pantness, or that you invested 6 figures into silver.  It's just hard for some of us to sift through the crap on here without reading massive paragraphs about how awesome you think you are.

Let us know when things get back to normal, we still want to know whats going to happen.

 

Thx.

Mon, 03/07/2011 - 20:09 | 1027920 Michael
Michael's picture

Ron Paul's predictions have been 100% accurate as well and I voted for Ross Perot too.

Clinton signed NAFTA, repealed Glass-Steagall, and changed the formula for calculating unemployment skewing the percentage down to cover up what he did, and they love him for it. I don't get it.

Mon, 03/07/2011 - 20:34 | 1028026 Temporalist
Temporalist's picture

Perot, Nader, Paul any of them would have been better than what's been "elected" (I say provided).  For each one of those candidates people said "don't waste your vote" I replied "I'm not, you are."

Mon, 03/07/2011 - 20:58 | 1028140 Michael
Michael's picture

I wrote Ron Paul in last time and I will write Ron in again if I don't get a liberty candidate to vote for like Ron or Rand. I don't throw my vote away. If all else fails I vote against the incumbent establishment candidate all the time. It's best to take out the establishment candidates in the primary where your vote is worth ten times what it is in the general election.

Mon, 03/07/2011 - 22:22 | 1028314 AssFire
AssFire's picture

I too supported Paul and send funds to him. I will always hate Sean Hannity for his treatment of Paul.

Dr. Paul delivered children free of charge to many locals I have come to know at my beach house in his district. Ron refused government funds and delivered his services free of charge.

He is a man of principle.

Mon, 03/07/2011 - 22:28 | 1028327 akak
akak's picture

Yes, the entire FOX News (sic) cabal really showed their fascist, neocon colors in their repeated and abominable attacks upon, and alternately their pointed censoring of, Ron Paul, his message, and his millions of supporters during his 2007-2008 presidential primary campaign.  Such gross and obscene political bias, frequenting crossing the line into libel and hysteria, just went to prove how scared the warmongering two-party establishment is of any meaningful challenger to the fearmongering propaganda propping up their tottering oligarchic control of the USA.

Tue, 03/08/2011 - 00:46 | 1028713 Yits and the Yimrum
Yits and the Yimrum's picture

voting in a matrix system is like pissing in the wind; going to soil your yourself

i refuse to vote for my own slavery

Ron Paul is thrown in the mix, so the pirates can quage percentages who are about tl depart the reservation

as they well know, it is never at a level that reaches anything close to critical mass; if it did you would have martial law the next day

the Tea party is a good example of a waste of the Sheeps passions

they are going to balance the budget; remember that Pete Peterson was chairman of the group that would restore America's fiscal order.  That was like putting Madoff in charge of the Salvation Army, too funny for mere words

these cons just direct peoples correct passions for doing the right thing into dead end, statist pipe dreams

Mon, 03/07/2011 - 21:13 | 1028174 Ahmeexnal
Ahmeexnal's picture

So you would vote for David Duke?

Mon, 03/07/2011 - 20:52 | 1028128 DosZap
DosZap's picture

 I don't get it.

I do,"Stupid is,as Stupid does."

Mon, 03/07/2011 - 21:11 | 1028167 Ahmeexnal
Ahmeexnal's picture

Toffler wrote about GM going broke in "PowerShift".

That book was published in 1990.

Mon, 03/07/2011 - 20:46 | 1028106 lincolnsteffens
lincolnsteffens's picture

My son two years ago argued that gold and silver are not money. A friend of his had told him that gold and silver as money was an archaic idea that no longer had any validity.

Last year I offered to put an extra $500 worth of silver into his hands as a yearly gift instead of giving him cash. He decided to take the silver. I ordered the silver in the form of 1 oz. US mint bullion coins. By the time the coins arrived they had gone up 5%. Now as another year goes by and it is worth about 50% more he has not parted with any of it.

Tue, 03/08/2011 - 02:13 | 1028881 SilverRhino
SilverRhino's picture

It would seem our sons have something in common.   :-)

I am doing everything I can to keep him from repeating my mistakes.

Mon, 03/07/2011 - 21:16 | 1028182 Diogenes
Diogenes's picture

Well what will happen next? You have my attention.

Mon, 03/07/2011 - 21:15 | 1028184 WaldenPondzi
WaldenPondzi's picture

What else are 30 million debt-ridden college graduates without jobs and with a lot of time on their hands to riot going to do all day? World War indeed.

Mon, 03/07/2011 - 18:19 | 1027645 lynnybee
lynnybee's picture

My family, too.   My oldest daughter today just told me, " Mom, you're always wrong."    My adult son, on the other hand, put some silver in his hand & has now taken an interest.    

PAPER MONEY IS FOR SPENDING ON WORTHLESS SHIT.        SILVER IS FOR SAVING.

Mon, 03/07/2011 - 20:54 | 1028129 dark pools of soros
dark pools of soros's picture

right now I just show the change in heating oil bill vs silver..  everyone says heating oil went up but vs silver i tell them it went down for me..  i think the gears in their heads locked up thinking like that

what's in their wallet?

Mon, 03/07/2011 - 18:14 | 1027628 mark mchugh
mark mchugh's picture

I always offer to exchange it for paper money if they'd rather have that, but so far, they've all opted to keep the shiny.  Smart kids.

When silver goes triple digit, they'll have to find someone else to cash them out.

Mon, 03/07/2011 - 20:58 | 1028141 DosZap
DosZap's picture

Even children know the difference for tangible objects, and paper.

Mon, 03/07/2011 - 18:17 | 1027638 lynnybee
lynnybee's picture

what a great comment !   what a great uncle & gifter !

Mon, 03/07/2011 - 17:43 | 1027470 Eternal Student
Eternal Student's picture

Agreed, but this article is like yesterday's news. Here's the most recent interesting story:

http://news.silverseek.com/SilverSeek/1299509764.php

In summary, Ted Butler's analysis of the most recent Bank Participation Report shows that JPM is the only Bank left actively shorting, and that they recently increased their short contracts by 6000, after having previously reduced their net short position by 11,000 contracts in the preceding 3 months.

Now that's interesting news.

h/t to The Silver Turd.

Mon, 03/07/2011 - 18:20 | 1027652 Victorio
Victorio's picture

A pathetic act of desperation...

These guys are totally fucked and this whole thing is gonna blow.

Mon, 03/07/2011 - 18:44 | 1027735 NotApplicable
NotApplicable's picture

Sure it's gonna blow. 'These guys' though, they will walk away with fat pockets for doing the Treasury's bidding. The upcoming JPM bailout (nationalization) will make GM look like a rounding error.

Mon, 03/07/2011 - 19:10 | 1027806 Victorio
Victorio's picture

You think with all the gross market manipulation they are now engaging in that a nationalization will really fly?  If that happens all bets are off. Seriously.

Mon, 03/07/2011 - 20:10 | 1027943 SRV - ES339
SRV - ES339's picture

While I have a sizable silver investment and the daily Comex games really piss me off, what really gets me going is the affect on the miners (my major investments). Today's a great example as Ag & Au were smokin' overnight, the miners shot out of the gate, but slowly sold off through the day to finish negative (even though spot was marginally higher than Fridays close), as the Comex games began.

Capital punishment (which I'm against in principle) would be too good for these clowns!

Mon, 03/07/2011 - 21:01 | 1028145 DosZap
DosZap's picture

Well this is not '08, and the sheeples are a lot smarter, the strong hands, and us will not RUN to redeem.

Mon, 03/07/2011 - 23:09 | 1028389 GoinFawr
GoinFawr's picture

I don't know about the sheeples being any 'smarter', but they are beginning to get the idea; which is definitely something.

 265 mil (or conceivably many, many more) with access to ~36 fiat bux is quite a force to be reckoned with, should they all make the same investment decision more or less simultaneously.

I mean: why keep it in a bank? Can you remember the last year a savings account's interest outpaced the cost of living (see: I didn't say 'inflation')? I'd wager that for most of us it never has.

Mon, 03/07/2011 - 18:38 | 1027711 BallsDeepGold
BallsDeepGold's picture

 

   Pulling out all stops to lower the price. That is the last step before default. Think about it - its like running up your credit cards before declaring bankruptcy. Except when the morgue defaults its the paper longs who get bent over.

 

   Remember, the morgue's con has two parts. They sell the paper to depress the spot price. This allows them to build up a physical position at a below market price (making money all the way down too). Then when no more physical can found (backwardation?) - they default on delivery. This sticks the paper Longs with the tab for the physical long position the morgue accumulated while also sending the spot price skyward.

  Then, once the price for physical takes off - the morgue will sell off their physical hoard at obscene levels - making money on both sides of the trade. Genius really.

  

 

 

Mon, 03/07/2011 - 18:56 | 1027762 nope-1004
nope-1004's picture

 

making money on both sides of the trade. Genius really. 

 

Yes, white collar crime is admirable behavior and only for those much too smart to be labeled as "average" like you and I.

</sarc>

 

Mon, 03/07/2011 - 19:19 | 1027829 BigJim
BigJim's picture

I'm confused. How can the same entity default on silver delivery, if they've built up a silver hoard?

Mon, 03/07/2011 - 19:54 | 1027900 BallsDeepGold
BallsDeepGold's picture

 

  They intended to default from day one. Reason you can't see it probably because you have scruples where they have none. The entire con of selling paper silver was designed to make money as the price falls (which they did) AND to build a physical position at below market prices.

 

  They could deliver - if they had too. But, better for them to default on the paper. Their physical position never existed to cover their paper short. The physical position is for distribution to the masses at much higher prices AFTER they default on the paper portion of their position.

 

 You need to separate the "paper" position from the "physical" position. They are two completely different entities. One was created to fund the other. One makes money as price goes down, the other on the way up. This is the part of the con the Ted Butlers of the world are missing. All he sees is the paper short. The con is much deeper than just selling all the way down.  

Mon, 03/07/2011 - 23:00 | 1028409 rosiescenario
rosiescenario's picture

"JPMorgan’s motivation for suddenly and greatly increasing its silver short position is less clear and more troubling. My own guess is that the JPMorgan silver trader thought he had no choice but to sell many more contracts short in order to control the price and protect their existing short position. That’s because there was no one else left to sell. If JPMorgan didn’t sell, no one else would have (at prevailing prices). That’s the problem and it goes to the heart of the crime. The raptors didn’t want to sell, nor did the 5 thru 8 large traders. Ditto for basically all the other silver traders. That left JPMorgan as the sole silver seller, as the COT and Bank Participation Reports clearly document. Please think about this."

...painted themselves into a corner and now trying to paint their way out....good luck.

Mon, 03/07/2011 - 17:42 | 1027504 Paul Krugman
Paul Krugman's picture

Somebody quick, stick some silver in my pooper

Mon, 03/07/2011 - 19:21 | 1027840 f16hoser
f16hoser's picture

Kick the tires and light the fires

 

Light this candle

Mon, 03/07/2011 - 19:31 | 1027858 strannick
strannick's picture

Fly little silvery pig, fly!

Mon, 03/07/2011 - 21:11 | 1028162 akak
akak's picture

"Pig", you say, Strannick?

On the contrary, silver is a sleek, beautiful dove soaring over the dew-kissed meadow as the sunrise bathes it in its warming embrace.

Paper silver, on the other hand, is a wad of shit-smeared toilet tissue floating in a cesspool.

Mon, 03/07/2011 - 21:46 | 1028188 strannick
strannick's picture

Silver is my prized pet little piggy I let sleep in the bed so he doesnt catch a chill. Or keep tucked away deep in the woods, where only my GPS can find him.

Mon, 03/07/2011 - 19:39 | 1027873 jackpagan
jackpagan's picture

Long since $12.88...its just warming up. All the people I told back then and laughed at me are now asking the about the best way to invest. Looking forward to the day a cab driver tells me he's just invested in silver.

Mon, 03/07/2011 - 21:48 | 1028254 strannick
strannick's picture

Even if he does, it'll only be a 1/10th of an ounce coin

Mon, 03/07/2011 - 22:03 | 1028280 DavidPierre
DavidPierre's picture

I'm going to play Mr. ButtInSki here and bring this to everyone's attention.

................................................................................................

"Traditionally, gold has been a store of value when citizens do not trust their government politically or economically."

But... But... can you even TRUST Gold?

"Late last week I was dropping off some gold items to a local jeweller and one of the ladies there showed me a fax they had received from the Jeweller's Vigilance Commission.

The fax outlined a fraud that had taken place in which 95 gold bars were obtained with a bank draft which was counterfeit. This took place in Montreal on February 14. The amount of the draft was just shy of two million dollars. Many of the bars were 10oz Perth Mint Bars. The fax also included Toronto police contact information.

Incredible! A theft of almost two million dollars worth of gold and not one mention in the mainstream media or even in the gold community.

An internet search yielded some Australian news items due to the bars having been manufactured by the Perth Mint in Australia. Only in recent days have some local/mainstream media outlets released this story.

Why has this story been kept under wraps for over two weeks?

Who was the vendor and what bank did the draft originate from?

Was there a breach in protocol by the vendor in dealing with a draft of that size?

Is the vendor insured for this type of loss?

I have some thoughts on this matter and it should be a major concern to everyone in the gold community who has (or think they have) custodial gold.

There is only one vendor (whom I will not name) in Montreal that has the wherewithal to sell that volume of gold across the counter.

They also offer pool accounts as well as allocated storage and have a program affiliated with the Royal Canadian Mint.

 Could it be that releasing their name could possibly start a run on pool or allocated storage accounts in North America?

If there was a breach of protocol in dealing with a draft of that size, would that further serve to undermine confidence in such programs with other vendors?

There is one inescapable conclusion that I have arrived at because of this issue and the attendant opacity.

It is foolish to consider ANY allocated, custodial or pool account secure.

If you do not have your gold in your possession, you will one day be among many other unsecured creditors dealing in a paper or some form of legal nightmare.

If you cannot take responsibility for your own specie, your only alternative is a fund proxy such as Central Fund of Canada or Central Gold Trust. There are a few others out there but be wary of any offering settlement in specie.

Buy a proxy that is just that and nothing more.

The rubber is about to meet the road as far as deliverable specie goes.

Even well intentioned custodial vendors could face issues as the revenue they earn from storage fees is insufficient to cover their costs as investors exit with metal in hand."

www.lemetropolecafe.com

I've known this bullion dealer for years and he is a straight up, no nonsence gold-bug in Alberta.

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