This page has been archived and commenting is disabled.

Guest Post: Silver Breaks Its Golden Shackles

Tyler Durden's picture


From Adrian Douglas Of Market Force Oracle

Silver Breaks its Golden Shackles

On September 21, 2010 I published an article entitled “More Forensic Evidence of Gold & Silver Price Manipulation”. In that article I showed how silver from 2003 to 2010 had never traded freely at all; I showed that silver was algorithmically traded with gold and there was a very clear relationship between the price of gold and the price of silver. For those who haven’t read the previous article the following figure 1 (figure 4 in the previous article) demonstrates the inter-relationship.

Figure 1 Cross-plot of Silver versus Gold 2003-2010

Figure 1 is a cross-plot of the price of gold against the price of silver for every trading day from June 2003 to September 2010. There are two linear relationships, one is pre-2008 (black line) and the second is post 2008 (green line). The best fit equations for the two data sets are also given on the chart.

The stunning revelation from the data analysis was that if on any day I knew what the price of gold was I would be able to calculate the silver price from the equation of the relationship! How is that possible in a free market? It simply is not possible and so the conclusion is that silver is not in a free market but is manipulated to move algorithmically with the price of gold. I have written many articles that show that gold is itself manipulated and suppressed (for example, see Gold Market is not “Fixed”, it’s Rigged)

I have updated the chart of Figure 1 which is shown in Figure 2

Figure 2 Cross-plot of Silver versus Gold 2003-2011

Since September 2010 silver has broken its golden shackles. The algorithmic trading that kept the price of silver subdued for seven years has been completely annihilated.

On Friday silver closed in complete backwardation on the Comex. Spot silver closed at $29.075/oz while FEB 2011 closed at $29.064/oz and DEC 2015 closed at $29.026/oz. I believe this is the first time in history that this has happened. Silver traded in backwardation between the spot price and futures contract up to one year out during the blatantly manipulative precious metals bashing of January, but now the entire futures structure is in backwardation. This is a sure sign there are shortages of silver because it means that buyers will pay a premium for silver delivered sooner rather than later.

Signs of shortages have also been apparent from a shrinking silver inventory on the Comex in the face of rising prices. The registered inventory stands at a paltry 43 Mozs. In addition there is lots of anecdotal evidence that there are tight supplies everywhere. There are reports of refineries refusing to take new orders due to insufficient silver feedstock.

News out of China recently showed that China's net imports of silver quadrupled in 2010 to 3,500 tonnes (112 Million ozs). China has traditionally been a silver exporter. For example, in 2005 China made net exports of 3,000 tonnes of silver.

The US mint reported last week a record month in silver eagle sales in January of 6.4 million ozs.

This update of my previous work adds more fuel to the fire that the dynamics of the silver market have dramatically changed. Because silver has been suppressed for so long we do not know what its free market price should be, but we are going to find out soon and I strongly suspect it will be many multiples of the current price.

Adrian Douglas
Editor of Market Force Analysis
Board Member of GATA


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 02/06/2011 - 22:23 | Link to Comment americanspirit
americanspirit's picture

Every cloud has a silver lining. I see one big cloud on the horizon, and there appears to be a lot of tornadic activity in that cloud. Winds of change?

Sun, 02/06/2011 - 22:33 | Link to Comment Mad Max
Mad Max's picture

Winds of change?

Meh.  Hurricane of Pestilence, followed by Cyclone of Despair and Typhoon of Ruin.

Have a nice day.  :)

Sun, 02/06/2011 - 23:08 | Link to Comment Michael
Michael's picture

Scorpions - Wind of change

Sun, 02/06/2011 - 23:45 | Link to Comment Careless Whisper
Careless Whisper's picture

Scorpions did a Spanish version for our friends livin' in a (another) banana republic.



Mon, 02/07/2011 - 00:08 | Link to Comment Michael Victory
Michael Victory's picture

Which metal is selling at outrageous discount? (10 points)

(a) Gold - $1300 (b) Platinum - $1800 (c) Palladium - $800 (d) Silver - $30

Isn't something obvious?


Mon, 02/07/2011 - 00:17 | Link to Comment Mad Max
Mad Max's picture


Mon, 02/07/2011 - 00:37 | Link to Comment flacon
flacon's picture


Mon, 02/07/2011 - 00:30 | Link to Comment Michael
Michael's picture

Excellent. I'm half Mexican but don't speak a word of Spanish.

Mon, 02/07/2011 - 01:22 | Link to Comment StychoKiller
StychoKiller's picture

Por que?  Even this Colorado Gringo has picked up a few words here and there.

Mon, 02/07/2011 - 01:24 | Link to Comment Michael
Michael's picture

Como esta. A couple, That's it.

Mon, 02/07/2011 - 01:46 | Link to Comment A Nanny Moose
A Nanny Moose's picture

Cervesa Por Favor.

Mon, 02/07/2011 - 02:09 | Link to Comment Careless Whisper
Careless Whisper's picture

choque jp morgan, comprar plata !


Mon, 02/07/2011 - 03:41 | Link to Comment Uncle Remus
Uncle Remus's picture

¿Donde esta el baño?

Mon, 02/07/2011 - 05:46 | Link to Comment Michael
Michael's picture

I find the more Zero Hedge provokes Wall Street with the Vetted Truth, the more the tools on Wall Street drives the prices of everything higher.

I say we continue with our unfettered provocation so that when the crash that is guaranteed to happen comes, it will be of absolute peak enjoyment for Zero Hedge participants. ROTFLMAO!

Mon, 02/07/2011 - 07:14 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Plata hasta la luna putassss.

Oro hasta el cielo mis negros.

Pinches metales van explotar esta semana.

Buena suerte comprando y vendiendo acciones.

Sun, 02/06/2011 - 23:57 | Link to Comment bankrupt JPM bu...
bankrupt JPM buy silver's picture

Zero Contango anyone?  Got Silver?  More info at my blog.

Sun, 02/06/2011 - 22:30 | Link to Comment dalkrin
dalkrin's picture

I am envisioning ponderous conclusions about the squid wrapping its tentacles about the market price of PM's.  With conjecture that major short positions are due to be shut out by limit requirements towards the end of March, we could be entering the event horizon of the black hole.  That is, of the daily spot price actually corresponding to real market supply and demand.

Sun, 02/06/2011 - 22:36 | Link to Comment lawrence1
lawrence1's picture

That would be a miracle, a US market determined by supply and demand in this fucking farce of a democracy and farce of free markets.

Sun, 02/06/2011 - 23:06 | Link to Comment flaunt
flaunt's picture

James Turk:

“Silver is in backwardation not just in the short-term, this time it is extending twelve months forward! 

The last time this happened Eric was in January of 2009.  Over the next few weeks silver rose from about $10.50 to $14.50, a roughly a 40% move higher.  The key to understanding backwardation is that the price must rise to entice holders of physical metal to sell and accept a national currency in return.  I think we can expect a similar event to repeat over the next few weeks."

Sun, 02/06/2011 - 23:17 | Link to Comment JLee2027
JLee2027's picture

Yes, and now it's 4 years forward, not just 12 months.

Mon, 02/07/2011 - 00:07 | Link to Comment tsx500
tsx500's picture

oooooo  dreeeeeam   wea-ver   ......

Sun, 02/06/2011 - 22:37 | Link to Comment Michael
Michael's picture

Bob Brinker on the radio today was asked a direct question by caller; Is there a silver ETF for silver to invest in after discussing the gld ETF?

Brinker danced around the question and gave the caller advice essentially not to invest in it. What a tool.

Sun, 02/06/2011 - 22:43 | Link to Comment realitybiter
realitybiter's picture

Brinker has denied inflation for years and years and years....still remember his q's buy at 40 on the way down....

Mon, 02/07/2011 - 00:09 | Link to Comment tsx500
tsx500's picture

Brinker is clueless

Sun, 02/06/2011 - 22:45 | Link to Comment RobotTrader
RobotTrader's picture

Brinker hates commodity investing.  He's never recommended gold or silver.  On occasion, if a caller insisted on investing in that sector, he said no more than 5% max.

On one point, he might be right.  Anyone who piled their money into BIDU, NFLX, AAPL, PCLN, etc. have made far more money than being in GLD, SLV, CEF, etc.

And, on top of that, no confiscatory tax rates on the bubble tech stocks either.

I'll make a wager that the IRS will never remove capital gains tax rates on Nasdaq stocks, but I guarantee they will eventually increase tax rates on "bullion" and/or "collectibles".

Sun, 02/06/2011 - 22:50 | Link to Comment Michael
Michael's picture

Entertainment for those not watching the Police State Bowl.
Frozen Wasteland

Sun, 02/06/2011 - 23:31 | Link to Comment blindman
blindman's picture

love it

Sun, 02/06/2011 - 23:49 | Link to Comment Careless Whisper
Careless Whisper's picture

@ robo

gold isn't a commodity, it's a currency.


Sun, 02/06/2011 - 23:53 | Link to Comment 10kby2k
10kby2k's picture


Did Aaron rogers hit a triple?

Mon, 02/07/2011 - 00:33 | Link to Comment hardmedicine
hardmedicine's picture

OH MY GOD... thank you.  Down with super bowl tyranny!!

Mon, 02/07/2011 - 01:51 | Link to Comment Michael
Michael's picture

Homey D. Clown Don't Play That Police State Shit Thus Revolution

Mon, 02/07/2011 - 02:21 | Link to Comment Careless Whisper
Careless Whisper's picture

thanks for the link. are you michaelwiseguy ?

if you are, thanks for this remix on the concentration camps


Mon, 02/07/2011 - 02:34 | Link to Comment Michael
Michael's picture

You're welcome.

Mon, 02/07/2011 - 03:31 | Link to Comment Temporalist
Temporalist's picture

Hey Michael could you update the Bernanke Was Wrong needs some new footage:

Mon, 02/07/2011 - 04:52 | Link to Comment Michael
Michael's picture

I'll take a look at it. Very busy these days. Actually that wasn't my video. Dozens of my videos were deleted during the Ron Paul campaign around 2008, but I now have a more recent Youtube channel up.

Check this out, Not my video but very good;

Dr. Joseph Mercola wonders what Dr. Ron Paul's daily exercise routine is starting at about 13:15 in this video;

Transcript of Dr. Paul speaking;

"Most of the time I can get it squeezed in. Every once in a while I have trouble like this last week we had some really bad weather in Washington I had a tough schedule so it really wasn't as easy, but  I would say you know four out of five days at least, I have an opportunity to start my day off, this morning getting up and walk two or three miles, sometimes four miles if time permits. Then in the evenings, I'll have that chance today cause I'm back in Texas and the weather is good and I'll ride a bike for maybe ten miles and uh, I know it's good for my heart and lungs, uh but the truth is, I do it more for mental relaxation than anything else. I mean it really gives me a sense of relaxation and I also, this is a personal thing with me, I like to do it out doors. I've never enjoyed walking in place or riding a bicycle(in place), but that just makes it easier for me if I'm outdoors. I think I'm really enjoying life if I'm walking in a rural area or on good paths or riding a bike in mountains if I get a chance. I think exercise should be enjoyable. I talked to my patients about this in the past and they were mostly board with it, so find something you like to do. Maybe you could learn how to play tennis or something. People who play tennis, they don't think it's a chore or something, they are going to have fun and achieve something. But I think exercise is great, it's good for the heart and lungs but I think it's also a lot better than taking a pill when you feel tense or need something to sleep. My family kids me a lot, no matter whether someone thinks it's wrong someone says, well he needs a little bit of exercise. Unless you have a fever, if you have a fever you don't need to exercise."

Dr. Mercola Interviews Rep. Ron Paul


Sun, 02/06/2011 - 23:53 | Link to Comment raya123
raya123's picture

FYI -- SLW and EXK and many other mining stocks would have made alot more than BIDU and AAPL and NFLX over the past year.  They will always be taxed the same as the tech stocks.

Mon, 02/07/2011 - 09:05 | Link to Comment anvILL
anvILL's picture

Agreed, Robo is not making a fair comparison.
If he was going to compare GLD and SLV, he should be comparing them to indexes like Russel and Nasdaq instead of specific stocks.

Mon, 02/07/2011 - 00:47 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Junk you again for being so dumb on gold and silver.


Mon, 02/07/2011 - 01:29 | Link to Comment Hephasteus
Hephasteus's picture

I hope they don't declare a war on tax evaders. Cause then we'll get 20 million more tons of them. LOL

Mon, 02/07/2011 - 01:34 | Link to Comment holdbuysell
holdbuysell's picture

"I'll make a wager that the IRS will never remove capital gains tax rates on Nasdaq stocks, but I guarantee they will eventually increase tax rates on "bullion" and/or "collectibles"."



Mon, 02/07/2011 - 03:50 | Link to Comment lawrence1
lawrence1's picture

You are an idiot if you guarantee anything. But, maybe, you are jus an idito.

Mon, 02/07/2011 - 05:50 | Link to Comment spdrdr
spdrdr's picture

I for one happen to like iditos.......

They are cute and furry, and eager to please.

Don't diss iditos!


Sun, 02/06/2011 - 23:18 | Link to Comment Hulk
Hulk's picture

Brinker is lost in today's environment. He has been lost since 08. Keeps citing BLS numbers, which I think he actually believes...

Sun, 02/06/2011 - 23:26 | Link to Comment Freddie
Freddie's picture

Brinker is an idiot.  He would always talk about the Fed and Greenspan like he is a God.  Brinker worships at the altar of The Fed. The guy is a fu*king retard.  

Sun, 02/06/2011 - 23:57 | Link to Comment High Plains Drifter
High Plains Drifter's picture

He is a buy and hold guy in a day trading world. His ideas are old news now.  Buy and hold is dead. 

Mon, 02/07/2011 - 09:20 | Link to Comment tmosley
tmosley's picture

Long live buy and hold.

Sun, 02/06/2011 - 22:36 | Link to Comment slow_roast
slow_roast's picture

Great article, thanks!

Sun, 02/06/2011 - 22:40 | Link to Comment dogbreath
dogbreath's picture

backwardation bitchez

Mon, 02/07/2011 - 00:13 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

dogbreath, if gold ever backwardates for more than a few days, and in particular, if it backwardates for an extended time into the future (like silver apparently has), the the game is over real fast.

Your local coin shops and the Tulvings/Apmexs will run out and never be able to restock.  Until gold reaches FOFOA numbers.

Eyes open real wide!  Beware and prepare.

Mon, 02/07/2011 - 00:45 | Link to Comment dogbreath
dogbreath's picture

Cheers DoChen

Mon, 02/07/2011 - 03:43 | Link to Comment Temporalist
Temporalist's picture


position papers of professorfekete #3, January 31, 2011

Mon, 02/07/2011 - 04:58 | Link to Comment AUD
AUD's picture

COMEX silver is in backwardation but COMEX gold is not. Contango in the outside gold futures has been rapidly increasing in the last few months & is moving into the closer months.

My data does not go back far enough to conclude anything definite but the spreads are showing behaviour not seen at any time in the last couple of years.

Sun, 02/06/2011 - 22:44 | Link to Comment eigenvalue
eigenvalue's picture

I saw this article on Harvey Organ's blog. Eric Sprott called for $50 silver by the coming spring. However, I really don't think silver could move higher so fast unless JP Morgue decides to close all its shorts.

Sun, 02/06/2011 - 22:48 | Link to Comment RobotTrader
RobotTrader's picture

I can assure you that if The JP Morgue is overexposed to silver shorts, they will be able to unwind them in an orderly manner.  And/or the CFTC will allow them to put on exotic, illegal futures positions unavailable to the public to insulate them against outsized price shocks.

The PigMen, Washington Plutocrats, Blue-Bloods, and White Shoe Investors at Bessemer Trust always win.

No exceptions.

Sun, 02/06/2011 - 22:55 | Link to Comment traderjoe
traderjoe's picture

Can you name ANY fiat currency that has made it through more then 100 years without a default? The US has defaulted twice in the past 100 years.

Every empire ends and all PigMen regimes end. No exceptions.

Sun, 02/06/2011 - 23:12 | Link to Comment RobotTrader
RobotTrader's picture

PigMen are always on the right side of the market, long or short.

If the U.S. Fiatsco dies, the PigMen will become even richer.

And the common man's savings will be decimated.

What else is new?

Sun, 02/06/2011 - 23:22 | Link to Comment Mad Max
Mad Max's picture

Of course, anyone reading ZH and owning physical pm's is not really a "common man" whatever their outlook and negative opinion of the pigmen may be.

However, it would be nice, one day, to live somewhere where the richest and ruling elite were not predominantly sociopaths.  Maybe some undiscovered tribe in the amazon needs a diversity member...

Sun, 02/06/2011 - 23:24 | Link to Comment Bastiat
Bastiat's picture

Not all pigs have a happy ending:

Sun, 02/06/2011 - 23:27 | Link to Comment tmosley
tmosley's picture

lol, you think those guys are supported by something other than government handouts.


Sun, 02/06/2011 - 23:29 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

In the short time I have been able to follow RobotT and his comments re the PigMen, I can only agree 100%.

I have to also agree that if the fiat $ dies, no problemo for the PigMen.

Answer for us lazy ones (too lazy to trade or too lousy at trading)?

Buy.Physical.Au. Ag.and Pt.  Never sell.  Give it to your kids or grandchildren.

Sun, 02/06/2011 - 23:39 | Link to Comment Al Huxley
Al Huxley's picture

Exactly.  I read so much about the bullion banks massive short positions, and how badly their getting squeezed, but anybody who actually watches the COT reports will see that their short-long ratio is always at its peak (usually around 3:1 short-long for gold) at the top of any of the interim gold price spikes, and then they close out their short positions as the price goes down.  So they're actually on the right side of the market pretty much all the time (and that's just the paper market, never mind what kind of physical positions they likely hold).

At any rate, with the commercial COT gold short-long ratio at around 2:1 right now, there's plenty of room for a move up.

Mon, 02/07/2011 - 01:21 | Link to Comment MilleniumJane
MilleniumJane's picture

"...never mind what kind of physical positions they likely hold"


I think that's the genius of the "Crash JPM, Buy Silver" grassroots campaign.  Aboveground silver supply is much tighter than gold right now.  We tighten the noose further with every ounce of silver we buy and hold in our personal possession.  I don't know if this will necessarily crash JPM, but I take pleasure in knowing that other likeminded people and I are doing our part to make their lives not so goddamn easy.  It's resistance against the insanity.  They expect us to play dumb, bow our heads and take it where the sun don't shine.  We must stand up to these sociopathic bullies.  Anyhoo, silver will always be worth something in this world.  Don't think of buying silver as a way to get rich quick.   Think of it as trading in your fiat toilet paper for something of real value that maintains value when times are tough. 

Mon, 02/07/2011 - 00:27 | Link to Comment Sheepneck
Sheepneck's picture

Sadly I have to agree...

Mon, 02/07/2011 - 00:36 | Link to Comment hack3434
hack3434's picture

This isn't the 19th century and you understimate the power of the internet. 

Mon, 02/07/2011 - 07:15 | Link to Comment naughtius maximus
naughtius maximus's picture

I wish I could agree with you but look at how the tea party started in the internet and then the republicans turned it into a campagin vehical. The establishment manipulates us with great skill.

Mon, 02/07/2011 - 00:49 | Link to Comment Bay of Pigs
Bay of Pigs's picture

You really think they can do whatever they want? The rest of the world will just go along with it?

You are braindead dude.


Mon, 02/07/2011 - 09:49 | Link to Comment Blankman
Blankman's picture

You really think they can't do what they want? Who the hell is going to stop them?! You and me sitting on our asses in front of a computer screen? Nice try. The wealthy ultra rich have more gold and silver than all of us put together on this thread. You don't think they haven't thought of buying gold, that only the middle class (rebellious) masses thought of this. Whose brain dead?

Mon, 02/07/2011 - 14:57 | Link to Comment tmosley
tmosley's picture

The king doesn't command the tide, and the bank doesn't command silver to come into existence.  If they don't have the silver, they don't have the silver.  The only consequence that matters is that there will be a shortage, and the price for the real thing will increase dramatically in real and inflation adjusted terms.

You would be surprised at just how many of them buy their own BS about gold, and would stay away from it at all costs.  Those few who would buy, buy according to what they are used to, and as such, buy GLD and SLV.

Repeat it with me: the king does not command the tide--no matter how powerful he is, nor how callow his subjects.

Mon, 02/07/2011 - 00:22 | Link to Comment phil silver
phil silver's picture

The Dam is about to burst and the Bank 'who's name must never be spoken' will be humbled.

I hope I live to see the day, when the Wall Street Crooks that stole society's money are on the streets begging for silver coins.            Will I show charity, 'I don't think so'


Bright Morning Stars are rising

Day is a-breakin in my soul.

Mon, 02/07/2011 - 00:03 | Link to Comment e_goldstein
e_goldstein's picture

Heard an interesting rumor that the morgue has physical to back their shorts (for now).

Seems that a lot of old 'junk' (that is reportable as cash) is being turned into deliverable bars.

Mon, 02/07/2011 - 00:43 | Link to Comment JLee2027
JLee2027's picture

The real push is in March.

Mon, 02/07/2011 - 02:30 | Link to Comment Hephasteus
Hephasteus's picture

Isn't it weird that he didn't send a goya to deliver the rumor. Must be having servant trouble.

Mon, 02/07/2011 - 02:36 | Link to Comment JLee2027
JLee2027's picture

I named my son after Duncan Idaho.

Mon, 02/07/2011 - 07:16 | Link to Comment naughtius maximus
naughtius maximus's picture

Which one? hehe. I mean which Duncan..

Mon, 02/07/2011 - 00:40 | Link to Comment Math Man
Math Man's picture

Volker rule = no proprietary trading = no naked JPM shorts.

Just throwing this out there - the move from 18 to 30 in the price of silver occured just after JPM announced they were shutting down their commodities prop trading at the end of August.  IF and it is a big IF, JPM WAS short silver, could the 18 to 30 move have been their short covering?

I don't think it is any more preposterous than any of the other conspiracy theories out there... 

Sun, 02/06/2011 - 22:45 | Link to Comment Whalers
Whalers's picture

Funny how this "break of shackles" looks just like the regular chart that shows the obvious breakout this year.  Silver had it's surge.  Look to sell.



Sun, 02/06/2011 - 22:50 | Link to Comment koot
koot's picture

When the worlds most wealthy people and organizations are reluctant to hold too many dollars, why would anyone sell their silver insurance for dollars? 

Sun, 02/06/2011 - 23:09 | Link to Comment tmosley
tmosley's picture

If you had any conviction, you would be all in short, on margin.

But you don't.  Just another in a long line of gold and silver top callers thinking "maybe this time I'll be right" as they lose ever more purchasing power and the trade of the millenium just passes them by.

Sun, 02/06/2011 - 23:43 | Link to Comment lawrence1
lawrence1's picture

Obvious breakout? The only obvious thing is manipulation and it's ending. You're selling? You're shorting?

Sun, 02/06/2011 - 22:53 | Link to Comment koot
koot's picture

Adrian:  While I applaud everything your have done and your very good anaylys, I have to remind myself that the prices of both gold and silver as you show are mostly set by paper trades in London and New York. 

Most of the day to day price mechanisms used to exchange or trade gold and silver are in fiat paper currencies.  But recently we are reading about plans to trade gold in other things like oil, India buying Iranian oil with gold.  This is the most important thing to watch, even more so than paper prices set at the Comex or LBME.  We are going to see more of these things happen as the pot gets closer to boiling.

Sun, 02/06/2011 - 23:00 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

Silver went from $20 to $30 in a blink when we were least expecting it. Now it's consolidating. Should surprise people the same way from $30 to $40 and then $40 to $50. Then everyone shits their pants and has to welcome silver to the table as an equal.All of a sudden silver will not be the ugly red headed step child of gold.(Jim Crammer will reccomend it when it gets to $100.)  Silver. Welcome to the big boy table. You're all grown up now. 

Sun, 02/06/2011 - 23:18 | Link to Comment The Continental
The Continental's picture

Silver is the spice of the 21st century. We can look back at $5-7 silver a few short years ago with bewilderment that a element so essential to modern life could be so cheap. We will feel similarly in a couple if years when $29 silver will look cheap. Yes, the Pigmen can suppress silver for a long time. But they cannot stop the pernicious effect this suppression has on supply; nor can they repress the splendid stimulatory effect cheap silver has on demand and consumption. Silver has hundreds of industrial applications - green technology requires silver, lots of the white metal. The Pigmen have a date with the inviolable law of supply and demand. That day ebbs closer. Silver will have her day in the sun; and a glorious day it will be.

Sun, 02/06/2011 - 23:33 | Link to Comment ipud
ipud's picture

Don't tell KD - he hates AG like AU

Sun, 02/06/2011 - 23:44 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

Could we one day have a back to the future moment where silver and gold are kings again and everyone looks at you like you are a pinko commie if you talk about going back to a fractional reserve debt backed system? Could people in this country return to the old "Deadwood"  (HBO series) mentality about money?  Sure... but not until after they get fucked in the ass from a U.S. inflationary default. Logic dictates this should to happen. I know it doesn't seem likely now but I think gold and silver are the future. There is a good chance paper debt will not be tolerated. Things happen in cycles. 

Sun, 02/06/2011 - 23:51 | Link to Comment gwar5
gwar5's picture

Silver and gold continue higher.

Physical silver tight, in full backwardization.

If silver skyrockets, gold follows

Get physical PMs while still cheap

Mon, 02/07/2011 - 00:02 | Link to Comment lawrence1
lawrence1's picture

A todos ch

Mon, 02/07/2011 - 00:05 | Link to Comment lawrence1
lawrence1's picture

"A cada chancho le llega su Sabado" ... Nicaraguan proverb meaning that for every pig his Saturday arrives... the day he is slaughtered. May that day arrive soon for JPM and the bullion banks.

Mon, 02/07/2011 - 00:56 | Link to Comment RockyRacoon
RockyRacoon's picture

You commented in another article that "backwardization" did not pass the spell check.

Here's why, it's backwardation.

Sun, 02/06/2011 - 23:59 | Link to Comment bankrupt JPM bu...
bankrupt JPM buy silver's picture

Zero Contango?  Silver about to explode, physical getting tough to find...

Mon, 02/07/2011 - 00:07 | Link to Comment Careless Whisper
Careless Whisper's picture

Jim Puplava and Kathryn Herbes say that JP Morgan is not short silver ! "it's a silly idea that there are short positions on the comex" "it's a silly notion that any of us can have any effect on jp morgan" "hahahaha"

I say Crash Madoff's Aider & Abettor, Buy Silver


Mon, 02/07/2011 - 00:11 | Link to Comment Dr. Porkchop
Dr. Porkchop's picture

If there is nobody with the courage to put the bankers in their place, then I fear that we are headed for a dark age.

Mon, 02/07/2011 - 00:49 | Link to Comment cosmictrainwreck
cosmictrainwreck's picture

"If there is nobody...." ?? Holy crap - they certainly are well-concealed. And, yes, the second thought follows, of course.....

Mon, 02/07/2011 - 00:14 | Link to Comment Forgiven
Forgiven's picture

This investing thing is really easy. 

1)Trade paper for hard assets.

2) Repeat. 

Mon, 02/07/2011 - 00:45 | Link to Comment topcallingtroll
topcallingtroll's picture

The troll is getting really scared now. Seeing all this backwardation talk reminds me of fekete's prophecy of the last contango in paris or something like that though. I am about to start shitting in my pants out of fear that i am wrong about silver topping. The troll skidmark index and his desire to rush out to the nearest coin shop and max out the credit cards has been a reliable contrary indicator for a long time. Is this time.different? Skid marks have never lied before.

Mon, 02/07/2011 - 01:16 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Hahaha, top!

It is NEVER a bad idea to have gold as part of your wealth (even mainstream bankers say it is OK to have 5% - 10% in GOLD)!

Last Contango in Paris..., LOL!!!

I have seen skid marks all of my life.  But, skid marks have never shown me the path to Precious Metals!

BUY PMs if you like, but do not BORROW to do that., "they" will get you...

Best to you covering your asses in PMs!!!

Mon, 02/07/2011 - 01:28 | Link to Comment lawrence1
lawrence1's picture

You're full of shit.

Mon, 02/07/2011 - 00:49 | Link to Comment Scottj88
Mon, 02/07/2011 - 00:50 | Link to Comment QuantumCat
QuantumCat's picture

Gee, what happens to the data when you go back through 1980?  Please post the results.   Wha wha Hunt brothers... whatever.  Linear projectionists always lose.  I will buy your silver when you worship the dollar. The sad unwashed masses remain as predictable as they have always have been.

Mon, 02/07/2011 - 01:25 | Link to Comment hack3434
hack3434's picture

The data gets skewed as there was little correlation to the USD. We had the Hunt Brother fiasco then we had the Volcker rate hike followed by the Plaza Accord and finally Rubins strong dollar policy to which GATA claims was accomplished by supressing the price of gold. You're comparing apples to oranges. 

Mon, 02/07/2011 - 01:24 | Link to Comment hack3434
hack3434's picture


Mon, 02/07/2011 - 12:08 | Link to Comment Attitude_Check
Attitude_Check's picture

The Hunt Bros. were the first organized attempt to break the control of Silver's price and let it freely and fairly be priced.  They were not "allowed" to succeed.  Now another 30 years has added to the pressure, and free-market pricing will not be denied.  The Silver/Gold ratio will hit at least 20 (back to historical ratio's and possibly higher since the low price of Silver has encouraged it;s use and discouraged recycling).

Mon, 02/07/2011 - 01:35 | Link to Comment Sizzurp
Sizzurp's picture

Fekete has been warning about the disappearing basis in gold for many years.  He actually once asked Volker about it at a conference in Italy a few years ago.  Specifically he asked him what contingency he had for the disappearing basis in gold.  Volker scoffed and ignored the question.  There comes a time when the metal will not be available at any price, and I fear that time near.  The last contango is a sign of imminent monetary breakdown.  I think it is interesting that the basis is gone for silver rather than gold.  It definetely speaks to the tightness in the physical market and massive demand for the real thing rather than a paper substitute. Good luck to all.

Mon, 02/07/2011 - 01:37 | Link to Comment cocoablini
cocoablini's picture

Can anyone say Force Majeure?
Default on the COMEX. Basically all futures settled in bullshit dollars. See zinc market in the 80s.
Buying gold and silver futures is slimed with peril.

Mon, 02/07/2011 - 01:40 | Link to Comment suckerfishzilla
suckerfishzilla's picture

The price relationship between the Dollar Gold and Silver is completely askew in the favor of Silver investors.  This horse is drinking quite frankly.  I cannot wait.

Mon, 02/07/2011 - 01:43 | Link to Comment tony bonn
tony bonn's picture

"On Friday silver closed in complete backwardation on the Comex..."

for fuck's sake i have been declaring this truth for months....the paper markets have camoflaged backwardation but it is severe and permanent.....this is an historic first - of course i am speaking since 2008....

this is the handwriting on the wall and this time it isn't saying mene mene tekel upharsin - it's saying fuck you, banksters....

Mon, 02/07/2011 - 02:33 | Link to Comment Careless Whisper
Mon, 02/07/2011 - 03:36 | Link to Comment lawrence1
lawrence1's picture

What's your point; try English, not religious shit.

Mon, 02/07/2011 - 12:11 | Link to Comment Attitude_Check
Attitude_Check's picture

The concept of allegory too complicated for you?  Don't dis the person using it, dis your pathetic education.

Mon, 02/07/2011 - 01:44 | Link to Comment Sizzurp
Sizzurp's picture

Once the last contango is reached, real metal goes into hiding.  It is no longer available at any price in irredeemable currency.  We currently have a dollar that will still buy physical gold, but the day when it won't gets closer and closer.  What happens when the backwardation goes infinite?  Its something to watch for.

Mon, 02/07/2011 - 02:03 | Link to Comment mt paul
mt paul's picture

this is getting absurd..

already replaced

the ballast in the boat ... 

i don't want to buy

any more silver..

strange days..

Mon, 02/07/2011 - 02:09 | Link to Comment Himalaya
Himalaya's picture

Silver has a lot of room upwards!!!

Mon, 02/07/2011 - 03:04 | Link to Comment dryam
dryam's picture

The U.S. government has plenty of physical gold to manipulate the price for a long time.  It doesn't have a supply of silver.  They've tried to manipulate the paper silver market, but real supply & demand is getting ready to blow that up.  Silver is getting ready to go way up, and gold will stay fairly flat until the Fed finally decides to give up on it's non-winning battle.

Mon, 02/07/2011 - 03:43 | Link to Comment lawrence1
lawrence1's picture

There is serious doubt that the US has the gold it claims or that it is unemcumbered.

Mon, 02/07/2011 - 03:16 | Link to Comment ciscokid
ciscokid's picture

Try buying 1000z silver bars.There is none.

There is a waiting list of almost 3 weeks minimum.

No hay Plata!!!!!!!!!!!!!!!

Mon, 02/07/2011 - 07:21 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Pero hay dólares. Tu quieres dólares porque yo no cabron?

ORO hijos de la puta chingada!! Y su hermano macabro la PLATA.

Que se chingue el puto Federal Reserve.

Mon, 02/07/2011 - 10:37 | Link to Comment kadriana288
kadriana288's picture

100 oz. bars seem to be getting a little low two. Apmex only has 1 kind left and less than 400.

Mon, 02/07/2011 - 03:28 | Link to Comment Sizzurp
Sizzurp's picture

Silver making a little move this morning. We will see if the boys in London have any powder left here in a little bit when it opens.  I think the sellers are about ready to throw in the towel.

Mon, 02/07/2011 - 05:01 | Link to Comment bob_dabolina
bob_dabolina's picture

Everything is up...did you see the/es pop?

Only things that are down (and only by a cunt hair) are nat gas, bonds, and coffee. Everything else is erect.

Mon, 02/07/2011 - 07:27 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Does nat gas ever go up? It's been called the ugly duckling of commodities.

Mon, 02/07/2011 - 08:52 | Link to Comment Grand Supercycle
Grand Supercycle's picture

My weekly chart indicators still warn of significant Gold and Silver downside.

Mon, 02/07/2011 - 09:22 | Link to Comment johnQpublic
johnQpublic's picture

i hope you are right.

in the mean time i will meet you at a location of your choice to buy ALL your physical for US FRN cash dollars


(I will giggle and marvel at the weight and feel of real money all the way home. Warning....FRN notes may self destruct in thirty seconds)

Mon, 02/07/2011 - 08:53 | Link to Comment savagegoose
savagegoose's picture

but what about the fact oncew we spend all out cash on gold or silver, they can prrint more cash to keep offering shorts. like a casino , we run out of cash before they run out of chips.

Mon, 02/07/2011 - 11:03 | Link to Comment SailorJerry
SailorJerry's picture

I don't know much about this stuff but I think it it might be wrong to asume that the backwardation in silver is caused by a shortage on silver. Here is what I think:

Silver started a decline around the same time as SIFO (silver forward offered rate) dropped below zero. (around january 19).

This date alines rather well with when China raised its interbank rate, SHIBOR. So SIFO and SHIBOR turned on more or less the same day.

To me it sounds strange that silver would fall in price if there is a squeze. I am more inclined to believe that since the 19th it was cheaper to get USD using silver compared to a currency swap. At least for a non dollar bank in need of US dollar.

The last SHIBOR fix I can se is from the february 2nd and then it was almost back to levels before the raise so if this lower fix is not a effect of non trading days for puplic holiday I would guess that the backwardation in silver is more or less over!

Some of my thoughts are based on this article, it is about gold but I think the principle would work for silver.


Mon, 02/07/2011 - 10:41 | Link to Comment kadriana288
kadriana288's picture

I've noticed a dramatic change in price for Peace and Morgans in my area. A couple months ago when silver was over $30, they were going for $18-$20 for decent shape commons. Now they're going for $24 for ugly culls and up to $35 for decent looking commons.

Mon, 02/07/2011 - 16:17 | Link to Comment Temporalist
Temporalist's picture

Oooo Jeffrey Christian is on CNBS saying silver will go up.  What a knowledgeable analyst.


Mon, 02/07/2011 - 18:35 | Link to Comment honestann
honestann's picture

Wow, this is surprising, no?

The wiley coyote (JMP, Fed, USSA) think they are so clever they can scam everyone by holding the price of gold and silver down, but especially silver... to help pretend their worthless fiat, fake, fraud, fiction, fantasy paper has value.

The road runner (China) says, and I quote, "beep beep", then starts converting as much of their fiat, fake, fraud, fiction, fantasy federal reserve paper into silver and gold at artificially low prices.

Well, I guess all us reality advocates who have been loading up on gold and silver are also road runners.  But the point is still the same.  Whatever losses JMP, Fed, USSA suffer by artificially holding down gold and silver prices vanishes into insignificance compared to the benefits they get from being able to create unlimited pile of fiat, fake, fraud, fiction, fantasy toilet paper... and amazingly get suckers to accept it for real, valuable, physical goods.

Keep up the pressure, all ye road runners out there.  We gotta sink that ship of predators who give us nothing but worthless soiled paper, threats and lies... then consume the real physical goods we create.

Mon, 02/07/2011 - 23:07 | Link to Comment Lazane
Lazane's picture

a local suppliers inventory once was awash in 100 oz beauties, and who was hailed by I guess now by "two many other silver bugs" is out stock. He indicated that silver sales have been brisk, and we are now having to clean him out of his 90% bags, and other sundry metals, all that glitters isn't gold. 

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