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Guest Post: Today's Silver Scandal
From Janet Tavakoli of Tavakoli Structured Finance
Today's Silver Scandal
Under-30 silver traders weren’t alive to see the billionaire Hunt Brothers bankrupted by silver trades, and those under-45 years old probably never read about it. The Hunts’ silver debacle occurred after the “soybean caper,” but before the CFTC fined them $500,000 in a July 1981 out of court settlement for blatant violation of commodities laws in their attempt to corner beans. The Hunts had borrowed money to buy silver and leveraged themselves in silver futures in an attempt to corner the market.
On March 14, 1980, the CFTC staff reported to their commissioners that the Hunt Brothers could handle their short-term losses as silver prices fell, because “they bought at low prices.” The CFTC was right about the low purchase prices (around $15 on average), but it was wrong when it thought the Hunt brothers could handle the losses.
Simultaneously, then Treasury Secretary Paul Volcker instituted a new directive to U.S. banks as part of his anti-inflation policy. It was a “special restraint” on lending to speculators with holdings in commodities or precious metals. The banks knew better than to mess with Volcker, and they immediately closed the lending spigot to speculators in gold and silver.
Within three days, the Hunt brothers’ cash had nearly run out, and they couldn’t meet a margin call. Two days later, they had to deliver silver instead of cash in order to meet the margin call. Other speculators were having trouble raising cash against their silver, and prices dropped like a stone.
BACK TO THE FUTURE
Some believe the recent general commodities pullback was triggered by the series of CME margin hikes on silver within the past week, after the recent exponential run-up in silver prices. Whether or not that is true, holders of leveraged long commodities positions should have warily watched the action in the silver market. Some silver speculators may not have seen the margin hike as a constraint on lending, but it should have been a red flag for any speculator with a leveraged long position. Moreover, after silver markets closed, silver prices were getting “banged” lower in what looked like suspicious market manipulation.
Speculators rushed in as prices recently soared and rumors swirled that there will be a delivery default at the CME including one of the TBTF banks with a huge short position that it cannot cover. Are the rumors true? I don’t know since those in charge of investigating these matters haven’t put evidence in the public domain, even after a senior member of the CFTC claimed there was blatant silver manipulation.
The fastest way to collapse a recent run up in prices is to choke off the ability of those with leveraged long paper positions to raise cash. Another way is to rapidly hike margins; those with insufficient ready cash will be forced to liquidate. As they liquidate to meet margin calls, prices fall, and it creates a cycle which feeds on itself. I have no explanation for the recent ramp up in silver prices any more than I have an idea of where spot silver prices eventually hit bottom.
This isn’t the first time there has been extreme price action and volatility in the silver futures markets, and it will not be the last. If anyone thinks that the Commodity Futures Trading Commission (CFTC) has the right stuff to regulate the commodities markets, look no further than its failure to check manipulation in the silver market.
The CFTC has the mandate to “regulate” tens of trillions of dollars in credit derivatives, but it is actually in the business of anti-regulation.
I highly recommend Stephen Fay’s book, BEYOND GREED (1982). A paperback version was titled THE GREAT SILVER BUBBLE (1982). It’s out of print but available through Amazon or Abe Books.
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where do we long the SLV
Talked to my coin dealer this afternoon, looking for reassurance.
He said "well, it looks like $50 was heavily defended by Blythe, and might be a temporary top on the way to $100. Hell hath no fury like a woman scorned."
This made me feel a little better. If it drops under $20, I'm a buyer again.
back in character douchebag?
LOL.
Up your ritalin dosage and get back in there solider!!
sub 20?
doubt.
how low can paper go?
I'm not sure about the COMEX, but when I don't have any silver, I sell it for about ten bucks.
That's still a nice markup over the 5 bucks it costs me to not dig it out of the ground.
Hey!
You've stolen my avatar! I want it back!
That would make me feel a little bitter...not better.
My god, thats like asking NAR if now is a great time to buy a home. You should be perma banned for such stupidity.
Silver's tough to get now...under 20?
Sheesh.
That would be no person other than the bible-thumping Jason Hommel?
I can't imagine a coin dealer talking like that. Maybe in texas..
Please do not use the word "Hell" in vain...
NEVER.
Only physical if you want to keep it. If you don't hold it, you don't own it. Hell, you're lucky if it even exists.
It looks like there are some weak hands panicking on eBay.
I have no dry powder, else I'd be buying 100's.
Damn, I just looked, and now I feel your pain.
Use the chart at the bottom of the page "Let's get Physical" for some nice search links for eBay action. Fun to watch. The search algorithm is well done.
http://www.24hgold.com/english/home.aspx
We witnessed a concerted effort to gang-bang-bukake silver this week.
1. 5 consecutive margin increases in 8 days. Why not do all at once, perhaps to keep in the press and in the mind.
2. George Soros rumor of selling gold. The PM's tend to move as a wolf pack.
3. Carlos Slim selling 86million ounces of silver futures.
You can smell the desperation!
My god does anyone review the profiles here. This dumpfucks account should be deleted. This is not appropriate.
Well, Mr. longorshort, I'd guess you're getting long right about now...
Welcome to ZH. That is not the only avatar. Clearly your new.
You may have more success suggesting censorship at another location.
Titties,
In case you didn't notice, all commodities plunged similarly. My beloved copper got raped like a meth whore at a coke party. There is no fucking conspiracy with silver.
The whole market is a conspiracy. Why do people still play along? Just buy your physical, stick it in your safe and shut the fuck up.
Not directed at you, Titties, just everyone in general.
I am Chumbawamba.
Agreed, it's all a rigged casino, every market; and thus my belief in (and holding of only) the physical.
In my estimation, all the rigged and leveraged casinos (stock markets, currencies, futures, etc) will blow up and for a time, the only real money will be Ag/Au.
But WTF do I know. I'll probably be wrong again.
BUT in the meantime, I buy small quantities every week, and over the past 4 years it's averaged out well - and I don't worry if the USD goes Zimbabwe on us.
Hoping to not be gang raped like a meth whore at a coke party, I am The Navigator.
Titties,
In case you didn't notice, all commodities plunged similarly. My beloved copper got raped like a meth whore at a coke party. There is no fucking conspiracy with silver.
The whole market is a conspiracy. Why do people still play along? Just buy your physical, stick it in your safe and shut the fuck up.
Not directed at you, Titties, just everyone in general.
I am Chumbawamba.
Chumba, your second paragraph just about sums it up.
Chumbawamba
why do you think Silver didn't pull the trigger on the other Commods markets?
One index dropping triggers similar drops in other stock indexes. Take a look, all 3 US Indexes rise and fall in unison. A sell-off in the Nasdaq will cause sell-offs in the NYSE, Dow and S&P
That's because investors act like herds. When panic is triggered in one part of the herd, say Silver, it quickly spreads to other parts of the herd and hence we get an across the board sell-off (panic stampede).
The double-whammy caused by CME margin hikes and Big Hedgys sending out 'Big Sell' signals caused the Silver panic, just as regulatory changes caused the 1980's Silver sell-off. Yes the markets are rigged, we can add CME-2011 to join Volcker/bankers-1980's in the history of Silver on precisely who is rigging them
never, its not silver
http://www.youtube.com/watch?v=Gm72UYgEarw
the technical target for silver now it has breached $35 is $6.80 , it is going below the 2008 low.
What no junk?
Dan Norcini hits the nail on the head...
http://traderdannorcini.blogspot.com/2011/05/collusion-by-fed-officials-and.html
For me, the central planners jumped the shark way back at the first EU bank stress tests. The day GE chose to raise its dividend at exactly the same moment - which got all of the press. It was clear at that stage how orchestrated it was and how many players were in on the game. Over time, I closed all of my brokerage and banking accounts, cut up my credit cards, etc. and converted my FRN's to PM's.
The last few days, culminating in the 5-margin hike for silver but a virtual elimination of the downside circuit breaker on crude (intra-day) means the planners have declared war. We are now in a financial war. Will a viable alternative to fiat FRN's emerge? Will austerity tighten the noose on the serfs?
Today was the day when the TPTB flexed their muscles and sent a missile off the California coast. How will we sovereigns-to-be respond?
It sounds trite, but it has only strengthened my resolve that we do not have 'fair' markets or an reasonable economy. And that the war for the soul of the country will be protracted with ups and downs along the way. Battles won and battles lost. Math, the laws of thermodynamics, and the righteousness of liberty are on our side.
All this banter about a 2-week move in silver is just a blip in the history of time. Grab a beer and some popcorn and plan accordingly...
BRAVO JOE!
"GE chose to raise their dividend" should have read, Jeff Immelt, GE CEO, Obama finance advisor and a Director of the New York Federal Reserve Bank, chose to....
You are a smart boy my patriotic friend. Death to the New World Order!
--Tuco Benedicto Pacifico Juan Maria Ramrez
Potatoes? You have to be pretty poor to eat potatoes....
I am raising some right now out back so that I may avoid questionable supplies at high prices down the road. I only do Russets out of Idaho and Snowdens from the Dutch Country.
That along with other food crops as well that will assist in keeping our food bills low and position us to help others with the excess we cannot consume.
$35 and still in the money is a good feeling.
time to buy some more I reckon
Wow read up on stop loss orders even if the equivelent is hauling it to your coin dealer.
Heres my new slogan.
Dont love your investment. Love your profits by taking them before greed and doubt destroy them.
It's not about "profit" -- in case you've missed the entire point.
^^THIS^^
The Third Man
Good link to Dan Norichis take on the Silver stink. He writes,
I find it hypocritical, if not downright wicked, that this is occuring against a backdrop of a senior executive at the CME Group, one Mr. Bryan Durkin to be exact, warning regulators against reining in High Frequency Traders. He parroted the usual BS about their presence providing much needed liquidity warning that any attempts to bring them under more intense scrutiny or curtail their activity would result in markets becoming less efficient. Does anyone besides me marvel at the temerity of these people who spout such idiocy and then go about deliberately instituting a series of devastating margin hikes which are deliberately designed to KILL LIQUIDITY
Thank you for making my point - for which I was junked virgorously on 5/2. Well, at least I had the last laugh (all the way to the bank) ;-)
What are you talking about? Silver is still way up if you bought a while ago and didn't follow the HFT fads..
You're not the only one having a laugh, let alone the last one.. but it shows that you're pretty ignorant if you really think everyone on ZH bought in at 49.
+1
No, what I find ignorant is sitting through a 30% drop like an idiot. But heck - if you like that kind of punishment - welcome to the other side of my trades.
A Silver Eagle still weighs one ounce Troy. A dollar on the other hand...
Never mind. I get tired explaining this all the time.
Pissing up wind is a waste of time.
Molecool, I strongly suspect that the only thing you really trade is your right hand for your left while compulsively spanking the monkey.
and Kickaha replied to you with one of the best comments seen on ZH. Re-read it, learn it and profit from it...in every sense.
I profited from a 30% drop in silver, you muppet.
Hey Mole tard, how much physical do you own?
Congratulations you made some fiat! Got no problem with that, I'm almost happy for you except your part of the problem and not the solution. The problem, which I'm sure you cannot concieve, is, you come here and cheer the broken kleptocratic system that manipulates markets and funnels wealth to those who don't need more wealth. Instead of having any sense of moral and just direction, you spit insults and congratulate the destruction of your fellow man at the hands of thieves and criminals. That is why you get junked and why you are not cared for nor welcome here. Continue to support your masters, some day you will be head slave. Good day mole.
to sum up your post, he's a useful idiot, he most likely won't be a head slave, but may be a headLESS slave
20 junks - nice. This drop must have stung - LOL :-)
In other words same ole same old. Nice to see today's generation isn't the first to experience governmental and private party manipulation of the precious metals market.
Hold the physical and sleep well at night.
Knowing how lost today's generation is, do you think past generations were more or less oblivious to reality? Again, i am young so have no frame of reference... Like donnie who is out of his eliment.
Interesting question. I'm low 50s. When I was younger, it was more diffucult to access good information like today with the internet. We were all subject to the same brainwashing and it was difficult to find alternate sources of truth. Today, many are completely distracted and brainwashed, but there is a potent minority that does see through the lies and that does seek out the truth. I would have to say it's probably about a wash, but the younger crowds of today are have a better grip on reality than the 30+ crowd.
That's a good point. Like with politics, information availability and increased speed of communication has drastically contributed to volatility in modern markets. I don't think its a bad thing, mind you, but it is certainly true that the game has changed. And to take a line from the pro-HFT crowd, "it has increased liquidity, too!"
We take it for granted that we can check the spot price of every commodity while riding home on the train, and then get every part of the spectrum of opinions from pro's and non-pro's alike. The former information arbitage is over---unless you're writing rules at the CME.
Every generation thinks they are more advanced than those in the past. While this is true on certain levels, it is also ignorant because the next generation will look back at us and think our technology sucked and we knew nothing. Everyone is playing on the same field. Markets have always been manipulated. We've left some truths behind for ideas more modern. And some ideas get recycled back eventually(especially in economics). Those providing 'liquidity' have always leveraged this to their own advantage. You're always gonna have to fight from the bottom for the top. The vast majority wil get fucked and never make it. A few may be smart enough, nimble enough to dance thru the flamesand kick the TBTF in the balls whether its now, a hundred years ago or a hundred years from now.
that is encouraging as i was expecting it to be heavily weighted towards people my age being less informed and more concerned with consumption. I looked at some age demo's of the world, and 26% of the population is under 14 right now. with 65% of the population being between the ages of 15-65 years of age. I guess there are just more young people, the relative intelect hasn't really changed. I need to find where all the smart kids hang out, it seems i have found the most dense collection of morons in my age group centered at st johns university.
Teach your kids the constitution and The Bill of Rights. They sure as hell won't learn it in public school. Make their allowance contingent on knowledge of the Bill of Rights. You will be amazed how quickly they learn. They may moan and groan but eventually they will awaken. My son woke me the other night and told me that Osama had been killed. I said "again" don't ever believe what the establishment media tells you. They are propagands machines bought and paid for just like our government. I told him Osama died in 2001 of kidney failure put on ice for proper time to thaw him out "and" the government has never presented one shread of evidence that Osama had anything to do with 9/11.
One hint on who was responsible for 9/11. Anwar al Walaki (sp) #3 in Al Qaeda at the time was secretly dining with the Secretary of the Army at the pentagon two months after 9/11. This according to Fox News. Web search it. And while you are at it web search Fox News Rivera reports from Afghanistan in a video that U. S. Marines are helping the Afghans grow poppies for opium. Check it out and then tell all your friends about conspiracy theorist kooks like me.
The kooks are the ones that believe anything our corporate fascist statists say.
Tuco Benedicto Pacifico Juan Ramirez
In an ever repeating display of human stupidity each generation believes it is smarter than those that preceded it. Instead of acquiring knowledge and wisdom from their predecessors, and progressing, most look for shortcuts and end up repeating a cycle of failure. If only someone had warned them...
It scales up much larger than that.. we assume we are much more clever than every civilization that failed before us, yet we end up repeating all the same errors. Technology has diminishing returns.
CD, here's one that intrigued me the other day. It explains the trollish activity that we must endure day in and day out. Enjoy.
Disconfirmation Biasn. The tendency to accept supportive evidence of a belief uncritically, but to actively refute or discount evidence that challenges that belief.
Example Citations:
In other words, when we think we’re reasoning, we may instead be rationalizing. Or to use an analogy offered by University of Virginia psychologist Jonathan Haidt: We may think we’re being scientists, but we’re actually being lawyers. Our “reasoning” is a means to a predetermined end — winning our “case” — and is shot through with biases. They include “confirmation bias,” in which we give greater heed to evidence and arguments that bolster our beliefs, and “disconfirmation bias,” in which we expend disproportionate energy trying to debunk or refute views and arguments that we find uncongenial.
—Chris Mooney, “The Science of Why We Don’t Believe Science,” Mother Jones, April 18, 2011
We road 35 put's down today, sold at the 35 bounce. Entered 30's at .50 cents again when 35 was breached finally.
Guess what, you got it, we will buy more physical silver with the profits.
Boooooo yahhhhhh.
And Meth Man, I will keep buying physical so don't post how I'm a dork for doing so. Up or down on paper, I will keep buying physical.
It is ok to buy silver as long as you are not psycho about it and have a rational plan. LOL
You are very spot on, we are very conservative trader's. We just are pissed and see the rigged market's as all should. We are silver bugs anyway for the fun of it, make it that way because we feel strongly about the world economy. And yes that means fuck China also.
Our plan is simple, they pissed us off also. We are trying to help, we are small so we know we are just a so called sheeple but we are nimble and can spot there shit as well. Have for year's.
There is more than one way for us to use our skill's. Hope we help our friend's is all.
Couldn't have said it better myslef.
But you dont sound like you're a sheeple. Its not about appearance,its about state of mind.
Thank you raynja, I am a so called sheeple that is just fucking sick of the market rigging that is so outright in front of our face.
I just wanted to beat the fuck the silver trolls in tonight. I've had it, if they can't admit that the SI_F market is so rigged along with silver and other's today, they need to just keep there head in there ass so they don't get ring around the collar. Oil down 10% lmfao....... ya right, China has cut off all exports lol. Let's just set the bottom where we need it boys. No need to worry.
I'm a simple option trader yes, we caught the signal's last Thursday for slv yes, is slv all we trade? No, not at all. But went short yes, but come on guys to come here and say the silver bugs have there head up there ass? CNBC on the floor of the early London close for the wedding say it's all out sell slv, silver selling off early, ring the cow bell. Yesterday, CNBC and half the finacial news, CNBC live with a PRO saying slv is a ponzi, lol. Might be but what the fuck.
The fiat fight is on and if the labor report does not prove that to you fiat ponzi folks then don't protect yourself. The people of the world are so so squeezed in day to day live.
Why pick on a person who is trying to survive with what we can? Hmmmmm?
Think, you silver trolls..............
Good thing you're making it in the market; I think your aspirations of being an educator are dashed.
You mean like the dumbfuck buying it with a credit card LOL on the board today.
I wanted to thank whoever posted this link on ZH several weeks ago. The gist of the article was that the rise in silver was not sustainable. Duh. Too much too soon and way above the 200 MA. I needed that head slap and sold all my miners on 4/20. Still keeping the coin collection and physical for the granddaughter, at least she might have a chance. Looks like around $28 is currently the 200 MA, so will keep the powder dry for some more physical around that price if we're lucky.
http://www.zealllc.com/2011/silvtop2.htm
ZH is sort of like an orgy, you don't know who to thank. (paraphrasing Rapping Rodney)
your welcome :)
His welcome what?
I don't generally like the cognomen "Tard", but it applies in this case.
"Up or down paper, I will continue to buy physical."
Bingo ! Good Call.
Firefighter302
Well.. silver topped in the 80's when it became a sellers only market. You can always buy physical. I certainly don't believe this is the top in the market. QE will probably go on forever.
Price divergence is starting to happen. I'm having a harder time finding online sales for less than $5 above spot price. My local dealer sold over 400 oz today and now has nothing and is not taking pre-order sales. So much for buying next week at a low spot premium ($1.5 over spot at the local dealer). Very interesting stuff. Glad I bought what I did, when I did.
"I'm having a harder time finding online sales for less than $5 above spot price."
Nonsense. You're not looking hard enough. Goto a library and use the computer thingy to find any national dealer. You will pay $2 over spot for a generic oz...at the most.
You missed a bit of my point. "Looking harder" was the bulk of it. 3 weeks ago I didn't have to even try. Now looking harder is required.
Tulving/Gainsville/Apmex and any of the private mints will serve for less than $5. Heck many will sell brand new ASEs for under +$5.
I agree we'll someday see divergence...but faith in investment paper has to go south for mainstream first. All I see/saw was a waterfall shaking out retailers/small players on margin.
Just to clarify, Tulving, Gainesville and APMEX are not "private mints". They are large dealers who buy and sell with the retail public and other precious metals dealers large and small as well as government mints. Private mint examples are Highland Mint in Florida and Sunshine Mint etc. Big dealers like APMEX may contract with a large private mint to manufacture silver for them and stamp the APMEX name on the bars or rounds but they are not themselves a private mint. No big deal. Just wanted to mention that.
Oh, one other thing. Who cares if premiums are up $1 if the thieves in the paper market just gave us a $16 discount. Sounds "penny wise and pound foolish".
Tuco Benedicto Pacifico Juan Maria Ramirez
In bulk, sure. You can't deny that premiums have exploded in coins, and are rising rapidly in all but the largest forms of physical silver.
It was more than the margin issue: the Hunts actually didn't understand that there was an abundant supply of silver - some as bracelets on the arms of women in India as family savings - that the high prices would pull onto the market. They were doomed either way.
I don't understand what the big deal is. Just buy silver. Shit, buy anything. If prices soar you'll get rich. If prices plummet just go to congress and get a bailout. Capitalism is simple stuff people.
I too don't understand what all the fuss is about. 6 months does not qualify as a long term trend. Shit this is only the second inning. I'm 51 and all investments with counterparty to date have ALL been over sold. I now follow the "Infallible Mogambo Investment Theory (IMIT) says to be all in gold and silver when excess money is being created to such an astounding degree, and it says it with such elegant simplicity, with the weight of the evidence of 4,500 years of history behind it, and so what could be simpler?"
I'll pick this conversation up in 2025.
Buzz
I appreciate your intellectual and technical call on this Spag', and I totally fucking agree! "JUST BUY SILVER. SHIT!"
Yes, exactly. Just thank Uncle Squiddy for getting them to put it on sale and buy more!
If any of you ZH paper/electronic traders are still thinking in any nominal/notional fashion, you need to bring yourself to a screeching halt. Get out of the fiat producers meat grinder, realize the game has blades and you are the chuck roast.
If so...
What the fuck is wrong with you?
Ultimately, this is NO game.
LOL You are very funny for an insane silver bug.
And you are a either a sucker mark who I have purchased silver for much less than it is today (spoken in a fiat way so you can understand), OR, a delicious troll who serves my purpose on ZH. Thank you for being an educational tool. Don't ever go away.
They wanted a game, we will make it a game and buy more physical within there game.
We are option traders anyway and yes, I'm a silver bug lol. We earn our living trading so don't beat me up, my point is we strongly believe to buy physical silver as you can not matter what the paper ponzi says the price is. Read the post here from the people who study the failing world economy, if you are new like I was and understand you need physical to protect yourself and your family no matter what the ponzi price might say it is today.
It's fun and we love it anyway regardless. I do personally feel physical is a great hold for long term either way. We have been buying since I was out of high school in 86.
Crooks just pissed us off so we are going to ride there game and help the physical market all we can.
It's the complaining option and future traders that need a quaalude. You obviously don't fit that category. Keep stashing that physical as you go. Best of luck. I've pulled out of the paper game completely, as surfing the manipulation is beyond my skillset anymore.
“Is it nice, my preciousss? Is it juicy? Is it scumptiously crunchable?”
Yes, it is.
Thank you, we are trying. We are stashing all we can and feel strongly we will need it someday.
I would normally never post something like the above but the bullshit going on right now is so so out of hand. Just wanted them to know
And any troll's coming in tonight to splash there shit about silver. Go fuck off, I'm buying physical again saturday, drive er down more tomorrow lol.
I may be a buyer soon also.
Lets see what it does around the 100 dma.
Dammit i am supposed to be on vacation and
still cant put down the zerohedge crack pipe.
Sorry. I just can't take it any longer.
"There" vs "Their"
Please look it up.
they're over there ,playing with their silver
on Wed, 05/04/2011 - 19:35
#1241140
Yes this time it is different as opposed to all the other times that everyone thought the anti silver luminati, one world government, black helicopter crowd at the comex was about to blow themselves up and world peace would reign henceforth.
by Gold 36000
on Wed, 05/04/2011 - 19:38
#1241143
Gold 36000 for president. We don't agree on everything, but we do have some common ground.
Slither away in shame Troll!!!!!
on Wed, 05/04/2011 - 19:35
#1241140
Yes this time it is different as opposed to all the other times that everyone thought the anti silver luminati, one world government, black helicopter crowd at the comex was about to blow themselves up and world peace would reign henceforth.
by Gold 36000
on Wed, 05/04/2011 - 19:38
#1241143
Gold 36000 for president. We don't agree on everything, but we do have some common ground.
Slither away in shame Troll!!!!!
that's the only time i've seen a troll make such an obvious mistake. well quoted for posterity's sake. i wonder how many versions of megaphone are out there.
http://en.wikipedia.org/wiki/Megaphone_desktop_tool
I agree Line-Sink- and Hooker, but are you sure you haven't been collecting Mercury, instead of silver? just askin.
Yeah, time your shorts properly and eventually you'll win if you have enough money, serenity to look at your paper losses, and a good sense of humour, and also remember those old words: " forgive them father, cuz they don't know what the fuck they are doing"
Like I said yesterday.
Goldman making it hard for clients to borrow silver was the "red flag" that many chose to ignore.
Furthermore, the failure to raise the debt ceiling is dollar positive. If you don't think it's possible that the debt ceiling will be breached I encourage other readers to study the effects of the Russian default which Meriwether never took into account with LTCM. Although breaching the debt ceiling is not indicative of a US default on it's obligations to it's creditors, it most certainly will cause a re balancing in risk portfolios et al. In addition, I think the GOP/Tea Party holding their ground is imperative to the long-term health of the US economy. If the left is worried about interest rates rising on 14 trillion dollars, I find it hard to believe that 16 trillion in debt will be any easier to pay back on the back of rising rates.
If one is to look at how much debt it takes to create the jobs, the cost is simply not worth it. The cuts need to happen, and Obama/Extreme left will never agree to them. I believe this is a major inflection point and one that any person managing risk should heed extreme regard to.
bob... FYI, not everyone is a wealthy investor... the TP position may help the investment population... they (and their friends bob) had better be well armed.
I'm really not sure where you were going with that comment.
Not everyone being a wealthy investor was information that I am privy to....ya lost me after that.
Lmfao!
Your point is well taken – but with all due respect, do you REALLY think the GOP / TEA Party is going to hold their ground and not raise the debt ceiling with all of the Chicken Little Sky Is Falling blather going on from the “Respected Experts” – Tim Geithner and Ben Bernanke. I personally do not think they will hold the moral high ground, but rather will beat their chests and say we got a Balanced Budget Amendment in exchange for raising the debt ceiling and then it will be business as usual until the next time. Of course everyone knows the Amendment Proposal will either not make it through the Senate and Presidents signature – and even if it did, it would take 5 years to wind its way into law, by which time it will be moot anyway.
The question I have is , why would someone like the Chinese who also have endlessly deep pockets not be buying the paper market down here with both hands, and then come June 17th say NO THANKS – I’ll Take The Physical? One would think that if they wanted to really make a statement – they would be buying the bejesus out of the paper market and force a FTD by the COMEX – set off a buying panic and in the process Implode JPM which in turn would set off another financial Crisis in the U.S. Really – what do they have to lose at this point – the U.S. consumer is Bankrupt, they will NEVER be paid for the debt they own – why not take their dollars and put them into something that has real value – gold and silver?
You bring up some very valid and cogent points.
The political arena is fertile right now. The onus is going to be placed on the President on how all this borrowing has helped us, and how future borrowing will aid in our "recovery" The main issue being brought up is, is that interest rates are going to rise and we won't be able to service the debt if the ceiling is not raised. Well, how is raising the debt ceiling going to aid in lowering interest payments? Maybe up to the 2012 elections, but if we have to service 16 trillion with rising rates on the back of a negligible economy it's DEFINATELY game over. That's why this is so important.
"The question I have is , why would someone like the Chinese who also have endlessly deep pockets not be buying the paper market down here with both hands, and then come June 17th say NO THANKS – I’ll Take The Physical?"
I just don't see the benefit. Maybe you can explain a situation where that would be beneficial, I can't. But I have a better question. What are the Chinese going to do with all the empty real-estate that could house the populations of North and South America comfortably?
*it's not just silver taking a shit. All commodites are. China wants to see a return on their trillions in DOLLAR investments.
Fuck fertile political areana right now. People or the sheeple they call us are suffering this bullshit. It's time a human is treated as a human being and not as a goat Bob.
I'm not trying to be to rude but they have the world pinned down. If we have to live within our mean's, then so be it. People all around the world are suffering at high level's. It's not just us in the states, folk's in the middle east, the so called enemy, oh ya right, brazil is squeezed like a lemmon to get along. Trucker's in China are protesting fuel cost now, LISTEN to us, people are sick of the BS.
It's time to stop and get this machine in-line. The time is now, don't let them loose this chance.
Careful what you wish,cuz you may get it
The cuts need to happen, and Obama/Extreme left will never agree to them. I believe this is a major inflection point and one that any person managing risk should heed extreme regard to.
agreed, and agreed the Tea partiers are crucial now
but they won't do it so the easiest way out is to PRINT
Agree - but the problem is, everyone is in favor of cutting - as long as it is cutting something that has nothing to do with them. Polls are saying that over 70% say "Tax The Rich" - which is perfectly understandable since "The Rich" only comprise about 2% of the population. As the old saying goes - when you are robbing Peter to pay Paul - you can always count on the support of Paul. What is needed is for Elected Representatives to put aside their ambitions to be re elected and do what is necessary to save the Republic. I personally hold out absolutely NO HOPE of that ever happening - so ultimately - I think the issue will NOT be resolved at the ballot box. Too many "Entitled" and not enough people actually contributing to support the system. Politicians need to get real and tell the "Takers" that there is NO FREE LUNCH. Actually - I do not see that message and being re elected as necessarily exclusive. I honestly believe that if politicians would just come out and tell the truth - the people can handle it and would appreciate it. I offer Chris Christy of N.J. as a perfect example.
True, you know what they say, things go on until they can't.
The last 2 days had nothing to do with this. We had a huge dump into light volume and it's been moving so fast that you can't get any corroborating pricing. This is a show. It's a weird show but it's a show. The dump down during first dip was people moving in on real physical and then moving out. It's going to be so strange next week. Really really mind bending strange.
It hasn't been light volume. In fact, it's been relatively high.
Bob, as a trader you should know this is a staged market rip, come on, oil down 10 bucks, market wretch in the making and you know it.
Trader to trader this is so fucking rigged and you know it. CNBC for example saying silver sell off last thursday on the London floor early close, then calling slv a ponzi yesterday at lunch, want me to go on?
It's all over, they rang the cow bell to drive commodities down and you know it.
Pick your lane and pick your car is the word so trader to trader, be real, the game is rigged and they have long's trapped and teaching them a lesson. Telling other buyers to stay away till we pick the bottom.
Come on............
Smeagol: Mustn't go that way! Mustn't hurt the Precious!
FWIW - silver tested weekly trend (from august) today but did not break. Gold
is holding up well and has trend support approx 1445 - 1400
for all the panic the longer term charts still look good
this last spurt higher started approx Mar 21 (34 -50 in a matter of weeks); hard not to see a little mania, short squeeze and latecomers chasing)
even with the severe correction, we are back to approx same levels as mid March
talking heads talking about the correction from 50-34 but wont mention the run from 8-50
Yep. Just checked. Still the same number of ounces in the safe as last week. If the price gets much lower, I will probably add more.
Feliz Cinco de Mayo.
¡Salud!
And what a non surprise to see after futures hours soaring...
Folks Need some help here - It appears that there is a pattern - GS Connect S&P GSCI Enh Commodity TR ETN- Symbol GSC -
• There have only been 5 days where commodities collapsed significantly more than today; 3 days in 2008 and 2 days in 2009
o 19 March 2008 - Right before Bear Stearns collapsed -->Commodities down 6.68%
o 29 September 2008 – 14 days after the collapse of Lehman Brothers & 19 days after Fannie Mae & Freddie Mac were nationalized - down 9.27%
o 20 November 2008 – down 6.75%
o 7 January 2009 - JP Morgan receives additional Federal assistance to rebalance commodity funds - down 6.99%
o 17 February 2009 - a month before QE1 was enacted – Commodity prices return to 2002 levels – down 6.68%
o 5 May 2011 - down 8.19%
It appears that with each major market event this ETF dumps - is this simply over-leveraged market mechanics OR something structural? - Any assistance would be helpful - thanks in advance
What is the common theme that runs through all these events?
Broke ass government is broke.
Here's a theme you might like.
Kelly's Heroes - Final Scenehttp://www.youtube.com/watch?v=OqSiLL8U3vo
Paper markets matter if you buy and sell paper.
First, I want to thank Blythe for this wonderful opportunity. Second, the effects of these manipulations may have unintended consequences- especially for dealers. It may also impact the comex as more people load up on physical. The supply is limited and the desire to own has just been given a big boost by putting silver on sale.
Third, it may also scare people away from the comex, causing it to become a relic. Why own an ETF like SLV when these type of games are played?
There has been no change in the underlying fundamentals of the economy. Is the FED pushing a deflationary scenario to get Q3 in line? Hope they have a good plan, because this one might explode in their faces. Commodity retracements while all major currencies remain weak?
Who will be left to play, if everyone takes their winnings and leave?
While I don't recommend it, 401k's can go to PSLV or CEF and IRA's can invest in physical and have delivery taken at a third party depository. Might be the best flight to safety available if these clowns decide to burn down the big top.
In my mind, the only "flight to safety" is buying physical and holding it in your possession. Keep it "cool dry and nearby". They "will" come for our pension funds!
Tuco Benedicto Pacifico Juan Maria Ramirez
I remember that. Bernanke ain't no Volcker.
Silver broke out and then ran up in a parabolic move. This kind of retracement was highly probable.
The bigger question (especially given ZH's posting about JPM's SLV holdings) was whether this was a manipulated move designed to break the silver bull's backs. By creating a parabolic move, rather than just a slow steady advance, this might give the central banks a few more years of money printing.
These things move in three's and the last one is always the best one.
It's just the same as what happened to oil. It's called rampant manipulation. Give the CRONIES free money on a promise to run up the market and make 100's of millions and then when the sheep show their first sign of pain, the first little baaaa, sell off the profits and release the market from the greedy grasp. Now they will have the masses celebrating when gas goes below $4.00 dollars heading into the peak season. How stupid the general public is to constantly get squeezed and then relieved with a slight pullback, meanwhile the FACSIST PIGS continue their rape and pillage in stealth mode. Once we bailed them out they knew all the cards were now in their hands. They mastered the plan to continue their heist unnoticed even though our Country was bankrupt and couldn't support the old tricks. Oh how they chuckle... look Lloyd, nothing but a bunch of ding dong the witch is dead singing lemmings that are willing to run even harder on the wheel to nowhere so we can continue on to the next chapter and plan our next molestation...
Several days over the last week silver futures were crushed in thin volume in the PM trading hours. I saw something like this before when Tradesports was around. They listed a presidential futures contract for the 2004 election. In the early fall (late Sept and into Oct 2004) a similar thing happened. At around midnight to 1 am EST someone would come into the market and sell the George Bush contract pushing down the his probability of winning the election. They did this on a number of occasion. Keep in mind also that Tradesports was ofter reference in the national media as a very good predictor of the chances of winning the election. While it had the temporary effect of lowering his probability of winning it didn't change the actual odds. In general, I suspect that the same thing will happen with silver and gold. Jamming down the silver futures does not change the fact that our country is still in a bind.
So why is she writing an article about it? I do, the price volatility is just a function of the uncertainty inherent in perpetual debt. This latest blowing of the $ or government credit bubble is just the bond speculators expecting a risk free profit from central banks.
We should talk. Australia is a unique situation. Their currency is pegged to the SPX and Commodities. (USD) When I read about the 4 big banks and record profits, followed directly by and unemployment rate just above 5%, I get happy!
I then read on further. A$45 billion A$ deficit? Surely the strong Aussie dollar is off setting inflationary costs for that Island nation. Certainly some reinvestment in infrastructure is coming on line during a strong currency period. EX.. Floods and the cyclone. How can this deficit exist? Even the retailers are trying to block overseas purchases, in clothing and goods.
Then I look at the entitlement programs in Australia and almost throw up! You basically get paid for being Drunk, and popping out Babies. Julia I manage assets that would rival QLD'S GDP! Get with it child. If everyone is working, then why do you need these social welfare programs. Trim the budget, and invest in your selfs. That is another talk Child!
What exactly is your point?
My point was this volatility in silver & other commodities is just the speculators rushing to get some of the 'easy money' action being offered up by central banks who have been recently telegraphing their willingness to bid.
We have a link. Hawaii bound for fuel. AUD I mean no dis-respect. Are you you Australian? We will continue this conversation upon your response. thank You.
the more Ag goes down, the more physical i can buy! :)
I personally caught the clue when eur/usd and aud/usd started to bounce off 1.49800 & 1.10000 respectively. Then the crosses started to break down. I liked that dxy head fake 2days ago.
Then we get PBOC numbers and the RBA hold. Not to mention small Asia sovereigns rinsing dollars in early NY. The real icing on the cake was those y10 german BUND spreads, before the ECB meeting.
Thank you yen.
I dont know much about currency trading but i would love to be your apprentice.
I got a think or swim account. Is that good enough or do you recommend a different platform?
I have no idea if i can even trade currencies on it.
Trading platform. MT4 demo account.(Mt-5 sucks) T/S(think/swim) is reputable but not very good with F/X. I won't recommend anyone. My accounts are all over the world. If you like(tight) spreads, there is company in NY it starts with O. They are a market maker so Keep your margins wide(spreads widen during light liquidity periods). Hope I helped TCT.
Best wishes
Thanks.
If mrs. Watanabe can do it then maybe i can stick my toes in.
I generally only speculate at extremes, so i dont trade a whole lot.
Mrs. Watanabe is just a Kampo carry trade. She is .shorting small Asians. KRW.
I want to thank each and every one of you ZERO'S that helped me get a 10 bagger in 7 days. While most of you are too poor and uneducated to have a futures account (I can tell only a small percentage of bugs on here trade futures), without you trying to "break the bank" silver would never have gone up this fast. I bought July 35 puts at .32 and sold at 3.20. When dealer offered to pay you over spot for your physical,I knew that was the top. Those dealers were all short futures and are now having the biggest laugh of their life.
I am sure you will all sleep well tonight knowing you have stacks in your hiding compartment,and wives that feel you are protecting them. LMAO.
i hope you have a blast shield on your keyboard
Nice work! I'm up a bit as well. Make sure you change the combination on your wall safe, or your wife might open a Diamond Mine! Smiles.
Pathetic life you must have that the misery of others brings you joy. What a vile human you are.
Martins: Have you ever seen any of your victims?
Harry Lime: You know, I never feel comfortable on these sort of things. Victims? Don't be melodramatic. Look down there. Tell me. Would you really feel any pity if one of those dots stopped moving forever? If I offered you twenty thousand pounds for every dot that stopped, would you really, old man, tell me to keep my money, or would you calculate how many dots you could afford to spare? Free of income tax, old man. Free of income tax - the only way you can save money nowadays.
It's called Schadenfreude... but it's a lame attempt at getting people to sell their physical. Nice try.