This page has been archived and commenting is disabled.

Hong Kong Mercantile Exchange's 1 Kilo Gold Contract To End Comex Gold Futures Trading (And "Bang The Close") Monopoly

Tyler Durden's picture




 

30 years ago, Bunker Hunt, while trying to demand delivery for virtually every single silver bar in existence, and getting caught in the middle of a series of margin hikes (sound familiar), accused the Comex (as well as the CFTC and the CBOT) of changing the rules in the middle of the game (and was not too happy about it). Whether or not this allegation is valid is open to debate. We do know that "testimony would reveal that nine of the 23 Comex board members held
short contracts on 38,000,000 ounces of silver. With their 1.88 billion
dollar collective interest in having the price go down, it is easy to
see why Bunker did not view them as objective." One wonders how many short positions current Comex board members have on now. Yet by dint of being a monopoly, the Comex had and has free reign to do as it pleases: after all, where can futures investors go? Nowhere... at least until now. In precisely 9 days, on May 18, the Hong Kong Mercantile exchange will finally offer an alternative to the Comex and its alleged attempts at perpetual precious metals manipulation.

From Commodity Online:

The Hong Kong Mercantile Exchange (HKMEx) has received authorisation from the Securities and Futures Commission and will make its trading debut on May 18, 2011 with the 1-kilo gold futures contract offered in US dollars with physical delivery in Hong Kong.

The ATS authorisation grants HKMEx the right to offer market participants, through its member firms, the use of its state-of-the-art electronic platform to trade commodities. The Exchange will begin trading with at least 16 members including some of the world’s largest financial institutions as well as several well-established brokerages in Hong Kong.

“We are very excited about this historic day. It allows us to establish a liquid and vibrant international commodities exchange based in Hong Kong, linking China with the rest of Asia and the world,” said Barry Cheung, chairman of HKMEx. “Global demand for core commodities has in recent years been driven by Asia, especially China and India. However, market participants in the region have had to rely on Western exchanges for price discovery, bearing the basis risk exposure in the process. Our new platform will offer Asia a bigger say in setting global commodity prices. It will also enable market participants to more actively manage their risk exposures, using products tailored to Asian market needs.”

HKMEx’s broking members at launch include BOCI Securities Ltd, Celestial Commodities Ltd, CES Capital International Co. Ltd, Chief Commodities Ltd, ICBC International Futures Ltd, Interactive Brokers LLC, KGI Futures (Hong Kong) Ltd, MF Global Hong Kong Ltd, Morgan Stanley Hong Kong Securities Ltd, OSK Futures Hong Kong Ltd, Phillip Commodities (HK) Ltd, Tanrich Futures Ltd and TG Securities Ltd. Its three clearing members are Interactive Brokers (UK) Ltd, MF Global UK Ltd and Morgan Stanley & Co International Plc.

And while the Chinese market is far more bubbly when it comes to gold and silver purchases, it remains to be seen just how happy a gambling addicted Chinese population will take to spurious and conveniently timed margin hikes that take the air out of the next parabolic move up in gold and silver (our guess is not very).

Far more importantly, the Comex monopoly appears to be over, and going forward the exchange will have to be far more sensitive about angering broad swaths of the population using 5 consecutive margin hikes in 9 days. The new exchange will also make the now traditional "banging the close" operation (or "banging the whatever" as the May 1 15% drop from $49 to $42 in minutes demonstrated) obsolete, as traders will have options of where to route orders from the hours of 0800 HKT to 2300 HKT.

Bottom line: if Chinese demand for gold and silver is as strong as it was a week ago, and it is, the recent Comex-directed plunge in precious metals is about to the BTFDed.

From the HKMex:

HKMEx is introducing a 32 troy ounce gold futures contract useable by a wide range of market participants to execute hedging, arbitrage and other investing strategies. Moreover, the HKMEx gold futures contract has the following important characteristics designed to meet the needs of a marketplace which lacks an international price-setting mechanism in the Asian time zone:

    * Secure physical delivery in Hong Kong meeting international standards
    * Trading execution on an advanced and robust electronic platform
    * World-class clearing functionality
    * Extended Asian day trading hours to tap into global market liquidity
    * Contract specifications tailored to market participants in Asia

Gold is one of the world’s most important and actively traded commodities. Demand for the metal is driven by three main factors: the jewellery market, industrial manufacturing and financial investment. In addition, gold is relatively unique in that it is used as both a commodity and a monetary asset.

Although gold has a long trading history in Asia, the majority of price formation for gold is today concentrated in the North American and European markets. In recent years, the introduction of gold futures trading in Asia has tapped into latent trading demand that is primarily driven by strong economic development in China and India.

Hong Kong is historically one of the world’s leading gold centres and has a natural geographical advantage in Asia. Hong Kong’s vibrant financial infrastructure ensures access to leading market participants and deep regional and international pools of liquidity.

Trading hours for the HKMEx gold contract will extend from 0800 HKT to 2300 HKT, opening with TOCOM in Japan and encompassing the London Bullion Market Association AM Fixing, the opening of COMEX, and the LBMA PM Fixing. The HKMEx opening auction will run from 0730 to 0800.

While gold futures trading on Asian exchanges has demonstrated significant growth, there is currently no contract that is or will likely become a regional benchmark contract for gold pricing. Without a regional benchmark, true price discovery for gold is either confined to the local in-country market or must depend on the European or North American markets. In-country markets generally restrict foreign participation and often subject it to adverse currency restrictions or tax treatment. Meanwhile, global benchmark pricing from the western hemisphere provides imperfect hedging for Asia’s trading community.

HKMEx is well positioned to address the demand of Asia’s trading community for the establishment of a gold futures contract as the regional benchmark.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 05/08/2011 - 14:43 | 1253344 WmMcK
WmMcK's picture

Competition, bitchez!

Sun, 05/08/2011 - 14:51 | 1253371 Manthong
Manthong's picture

And so it begins..

Sun, 05/08/2011 - 15:00 | 1253391 DoChenRollingBearing
DoChenRollingBearing's picture

+ $1490

At long last we have more competition in the PM markets.  The more the merrier.  Probably less manipulation is the icing on this cake.  Bravo Hong Kong.

I would guess that the PMs may indeed have a nice big run-up soon.

Sun, 05/08/2011 - 15:06 | 1253414 jkruffin
jkruffin's picture

They could be just trying to join in on the corruption, and get their piece of the manipulation pie. I wouldn't celebrate this move too soon, because alot of ugliness in the markets is about to occur.  Like they say, if you can't beat em', join em'. Stocks and bonds are the next to take the 20% dive.

Sun, 05/08/2011 - 15:31 | 1253501 DoChenRollingBearing
DoChenRollingBearing's picture

That of course is very possible.  But, typically when there are more players in the game, it often means the game is cleaner overall.

That's for you traders.

I'll just take the physical, thanks.

Sun, 05/08/2011 - 16:22 | 1253607 Wooly
Wooly's picture

"...The Exchange will begin trading with at least 16 members including some of the world’s largest financial institutions..."

Probably not "more players" just the same old ones in a different time zone. I fail to see how this changes the game to any great degree. 

Sun, 05/08/2011 - 16:42 | 1253652 RockyRacoon
RockyRacoon's picture

Yeah.  There are some familiar names in that group... especially the last one shown on the list... also showing up in the middle of the list.

Just another playground in my view.   Soak up the West's ready cash, run the system into the ground, then move East and do it again.

Sun, 05/08/2011 - 16:59 | 1253714 Manthong
Manthong's picture

Keep in mind that Bejing is China's front door, and Hong Kong is the side entrance or maybe the garage.

Mon, 05/09/2011 - 03:04 | 1254765 ED
ED's picture

Was originallyfor oil, apparently. Both touchy subjects, anyways

Mon, 05/09/2011 - 08:25 | 1254971 Kopfjager
Kopfjager's picture

I don't know about you guys but I prefer the back door.  Pandas and all bitchez!

Sun, 05/08/2011 - 23:25 | 1254536 Ben Fleeced
Ben Fleeced's picture

It's getting hot. Turn up the heat.

 

Sun, 05/08/2011 - 17:07 | 1253732 Cathartes Aura
Cathartes Aura's picture

perceptions.

the "same old players" may still be holding the strings, but the spin on the story just opened wide. . . everybody tells themselves a different story, depending on what their intended next moves requires them to believe in/act on, and now more stories (and conspiracies") will be told, as the game intensifies going forward.

a tangled web. . .

Mon, 05/09/2011 - 07:34 | 1254884 Thomas
Thomas's picture

I would argue that maybe the newest entrants to the game had a vested interest in making the aging exchange look bad. Nice timing in the least.

Sun, 05/08/2011 - 18:36 | 1253938 Tim White
Tim White's picture

   Key word= AUTHORIZATION...back to sleep, bitchez, all will be well.

Mon, 05/09/2011 - 06:02 | 1254812 zhandax
zhandax's picture

Precisely.  It remains to be seen whether China is directing this effort or the Rothschilds are re-opening their old summer home.

Sun, 05/08/2011 - 21:50 | 1254347 gorillaonyourback
gorillaonyourback's picture

yes i see its to chinas advantage to manipulate the prices lower too.  if china does want to buy gold and silver wouldn't you think its in their best interest to manipulate the prices lower and get as much cheep gold and silver as possible?

Sun, 05/08/2011 - 23:07 | 1254488 tmosley
tmosley's picture

Thing is, you can't do that without supplying actual physical.  If they are throwing physical metal at the market to keep the price down, then they defeat the purpose.  If they just wanted the price down, they would leave the status quo as is.  It seems to me that they know something big is about to happen, and want the markets to continue to function without the need for relying on Western exchanges.

Sun, 05/08/2011 - 23:34 | 1254552 nope-1004
nope-1004's picture

Yes, they have been buying gold and silver like crazy.  Turd had someone post something to that effect a while ago, claiming massive physical buying by them.

The more hands that are in the pot, the better the chance that true price discovery will be attained.

 

Sun, 05/08/2011 - 23:51 | 1254593 old naughty
old naughty's picture

@jkruffin  ++

G2 con-spired, joined in the hips.

The 0.1% is setting up the 20(less0.1)% while the 80% looking on. Expanded horizon.

Strange just got stranger...

Mon, 05/09/2011 - 12:50 | 1255950 SilverTech
SilverTech's picture

IMO they see an opportunity for an honest PM market to supplant the CRIMEX.

Die COMEX, Die. Pound a silver stake into the heart of the vampire.

Sun, 05/08/2011 - 15:01 | 1253401 Rynak
Rynak's picture

Was about time that a big player steps in to offer some diversification. While it remains to be seen how hong kong will behave much different, decentralization works against central manipulation... it may not prevent it, but certainly makes it more difficult.

Sun, 05/08/2011 - 18:41 | 1253950 Re-Discovery
Re-Discovery's picture

This is nothing more than the asia saying "stop that white boys shit."  And, by the way, if you try to print our treasury holdings into oblivion, our REAL PM market will check that shit in about 1 trading session.

Sun, 05/08/2011 - 18:45 | 1253958 Bananamerican
Bananamerican's picture

let's see what happens....

Sun, 05/08/2011 - 20:05 | 1254132 WizDumb
WizDumb's picture

mutually assured destrution...

Sun, 05/08/2011 - 16:00 | 1253574 onesoul
onesoul's picture

Not sure if anyone know, they are introducing Yuan denominated Gold Contract in Hong Kong CGSE very soon(Say next month on end of March).

http://www.cgse.com.hk/en/media_06_1.php?id=148

You see, Hong Kong is financially controlled by bankers(international and locals) and their friends(Regulators). So don't trust Hong Kong untill you can see the difference.

But, politically, China has a lot of influence these days and they are laying some ground work for Gold(1st) and Silver(later) market in Yuan. Before they decide to execute them, and until the trading volume pick up and a clear divergence b/w price on COMEX vs HKMEx and CGSE, gold and silver may still be subjected CRIMEX manipulation. It can takes months or years until these 2 markets divergence.

I believe it is Chinese call if they need a frontal assault by introducing Yuan based PM contract now or wait until later. I believe they don't want to play this card, just yet.

Mon, 05/09/2011 - 07:02 | 1254842 TGR
TGR's picture

PM's are traded and denominated in RMB in China (via the Shanghai exchange) anyway, so introduction of a yuan-denominated gold contract in HK would not make too much difference in the grand scheme in my opinion.

But you are right about the bankster-grip on Hong Kong. HSBC, Standard Chartered and Bank of China are the ones who physically print and supply Hong Kong dollars. Oh, and guess who just happens to be sitting on the monetary authority board of HK? Yes, it includes representatives from a couple of these entities, including a couple of gweilos/laowais (white guys, not just your stereotyped Hong Kong locals). Cosy.

As gold is traded in HKD in Hong Kong, long-term the HKD will reconcile with the RMB/CNY anyhow - that has long been the accepted non-written agreement between the lines - so should the USD drop considerably, and the RMB revalues considerably, the HKD (and associated gold trading in HKD) would align itself more with the yuan as opposed to struggling in its de facto managed range peg with the USD.

Mon, 05/09/2011 - 07:14 | 1254855 Non Passaran
Non Passaran's picture

Since the Yuan is tied to the dollar, why would Yuan-based PM contract be of special interest?

Sun, 05/08/2011 - 17:54 | 1253830 Keri at Bankste...
Keri at Bankster Report's picture

I don't know anything about Asian markets, but I do know that 1kg gold contracts have been selling on the Shanghai Futures Exchange for 3 or 4 years.  The roll of the SFE played on copper is, of course, very notable and the SFE loosened some of the grip of the LME's control of local prices in China (pre-yuan peg).

The SFE contracts are yuan denominated, but this new KongMEX will be in HK$, right?  Could this be a clue?  HK$ is still under a rather strict dollar peg, is it not?  While Yuan is appreciating this year, HK$ is not...

Forex confuses me: please correct me if I'm wrong.  What would the HK$ peg mean at KongMEX in a face-off with $ at COMEX and yuan at the SFE for an event, like for example, an increase in gold price in USD terms?  The price would go up on COMEX and HK in paired tandem and moved less rapidly or possibly hold still at the SFE in yuan (depending on the appreciate rate), right?  If so, does this look like a dollar hedge scheme for the Chinese to anyone else?  I'm working on a very low caffiene-blood level, so I hope I'm thinking this through correctly...

Mon, 05/09/2011 - 02:03 | 1254733 gorillaonyourback
gorillaonyourback's picture

wow interesting thought, dollar peged yuan at start of new hk exchange.  china has been telling its citizens to buy and store gold, right?  maybe buy as many new gold ounces as possible with as little usd as possible, because the article did say that gold will be settled in dollars.  if the hong kong market pays a little more every day for gold than the crimex, maybe a massive shift of physical gold to the hong market?  they will be paying a little more right? where ever in the world i live i get a higher price in hong kong, physical gold will be flowing there.  now here is the dirty part when china under this scenario gets all the gold it wants, they UNPEG the yuan. we will never get the gold back after that

Mon, 05/09/2011 - 07:23 | 1254864 Non Passaran
Non Passaran's picture

If you can get more $ for toz in HK, then you could buy in London (AM fix) and sell in Hong Kong. I don't know if AM fix would be "underpriced" day after day since that would mean free money.  I'd agree with TD (if I understand him correctly) that the main effect is that price of gold could get better support throughout the day.

Mon, 05/09/2011 - 04:43 | 1254796 old naughty
old naughty's picture

The 1-kilo gold future is offered in USD. They use London's LCH.Clearnet as clearing house. And they counted China's ICBC and Cosco Group as well as Russia's En+ Group as shareholders.

http://www.hkmerc.com/documents/Press_Release/20110427_en.pdf

Yuan denominated will come later this year. http://www.scmp.com/portal/site/SCMP/menuitem.2c913216495213d5df646910cb... btw, HKMEx President Albert Helmig was from NYMEX. http://www.hkmerc.com/documents/Press_Release/HKMEx_-_Albert_Helmig_-_Ap...

Sun, 05/08/2011 - 20:03 | 1254126 bonddude
bonddude's picture

Hopefully beginning of the end for the Morgue.

Mon, 05/09/2011 - 08:31 | 1254986 Kopfjager
Kopfjager's picture

Wait, would this suggest that the "smart money" currently in PM's will shift to Hong Kong's exchange?  I assume it could shift without taking a loss even at its current levels since the smart money was "priced in" months if not years ago. 

Or nothing would change at all since the price is universal and Hong Kong would uptick milliseconds after COMEX downticks?  I made a few words up, you're welcome.  

Help me out here.  

Sun, 05/08/2011 - 15:09 | 1253429 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Rockefeller must be spinning in his grave.

Sun, 05/08/2011 - 15:37 | 1253509 shinyindallas
shinyindallas's picture

Well let's attach some rare earth magnet to the old boy and get him generating some clean energy. This could be the next clean power bubble. Someone call Leo.

Sun, 05/08/2011 - 15:41 | 1253528 DoChenRollingBearing
DoChenRollingBearing's picture

Neodymium and Dysprosium, bitchez!

Sun, 05/08/2011 - 18:27 | 1253931 Richard Chesler
Richard Chesler's picture

Meet the new crooks. Same as the old crooks...

Sun, 05/08/2011 - 18:48 | 1253971 Tim White
Tim White's picture

   Boss, criminal, creep, fuckwad, all the same...Thanks , Who!!!

Sun, 05/08/2011 - 18:47 | 1253956 Math Man
Math Man's picture

ETFs, bitchez!

The futures market lead the plunge, but ETFs keep it going!

People aren't focusing enough on the role that SLV and the commodity ETFs had in the silver move.

When they catch on, it's going to be really fucking ugly for Gold.   There may be an PM ETF bubble more than anything.

SLV bought 366 million ounces of silver since '06, but bought nearly 20% of it during the run!

It then proceeded to sell 36mm ounces in around 2 weeks.  More than the 35mm Silver Eagles the US minted last year.

I don't know what the hell is going on in the commodities market and with DXY right now, but if doesn't stop, it will trigger ETF selling and force gold to be arbed out of GLD. And if that happens, watch the fuck out!

Gold got crushed in '08, and a lot of that was driven by GLD selling its Gold. I'm looking for the repeat.

Buy puts on GLD, bitchez. 

Sun, 05/08/2011 - 18:52 | 1253975 Tim White
Tim White's picture

   Speaking of fuckwads...

Sun, 05/08/2011 - 19:02 | 1253993 Bay of Pigs
Bay of Pigs's picture

You have no idea what you're talking about concerning physical gold and silver demand. Everyone knows GLD and SLV are bankster frauds, so give it a rest. Nobody believes a thing you say around here.

Sun, 05/08/2011 - 19:16 | 1254022 Math Man
Math Man's picture

Yeah, I know, I was so wrong on silver that I made multiples more buying puts than any of you idiots made buying silver. 

Ignore me at your own risk.

If you really think they are frauds then buy puts, bitchez!

You can buy even MORE physical with the proceeds.

But I guess none of you are smart enough to figure that out.

Sun, 05/08/2011 - 20:30 | 1254185 slow_roast
slow_roast's picture

How could you possibly have made more money buying Puts in silver when it only dropped ~$15 than I did buying Calls when it ran up to nearly $50 after dropping to the mid-$20s just a few months ago?  Hmmm....I'm starting to understand why everyone calls you methman.  Clearly math is a toughie for you.

Sun, 05/08/2011 - 23:47 | 1254580 rocker
rocker's picture

Hope is not working well for him, I say.

Mon, 05/09/2011 - 01:23 | 1254705 eisley79
eisley79's picture

i am not on his side, but the answer to your question could only be leverage, I am assuming he is implying he went all in and then some on his beliefs...

Mon, 05/09/2011 - 02:34 | 1254747 Popo
Popo's picture

uh. trade much?

Sun, 05/08/2011 - 20:50 | 1254233 XPolemic
XPolemic's picture

Yeah, I know, I was so wrong on silver that I made multiples more buying puts than any of you idiots made buying silver. 

Yes, but then Mommy woke you up and it was time to get ready for school.

Sun, 05/08/2011 - 21:01 | 1254254 Crisismode
Crisismode's picture

No, Mommy woke him up for his diaper change.

Sun, 05/08/2011 - 20:59 | 1254258 tmosley
tmosley's picture

Bullshit.  You weren't right.  You were betting on one side of a volatility spread like a fucking moron.  You were bearish at $34, which was flat out wrong and stupid.  You only got lucky that you picked options as a strategy rather than going leveraged short.

You never even fucking knew what you were talking about.  ANYONE could make money playing volatility in silver.  EVERYONE knows it is volatile as shit.  Even I knew that, and expressed it publicly.  The only reason I don't ply it myself is because I am nice and secure with my own lifeboat, and see no need to spend any more time looting the Titanic.  You don't even see the water rising.  As such, when the ship slips beneath the waves for the final time, your ass will never be seen again.

Go fuck yourself, troll.

Sun, 05/08/2011 - 21:28 | 1254302 Math Man
Math Man's picture

The only one who doesn't know what they are talking about is you, Tmo.

You only got lucky that you picked options as a strategy rather than going leveraged short.

Options are a way to lever a short position, you stupid fuck.

Sun, 05/08/2011 - 23:10 | 1254496 tmosley
tmosley's picture

Uhh, yeah, limited exposure, meaning you don't make money if it goes down a little, only if it goes down a lot.  Your dumb ass swore that $34 was the top.  If people had paid attention to what you said at that time, they would have gone short, and lost money.  You didn't start claiming to be playing it with options until later.

You don't know the difference between a directional play and a volatility play.

Get the fuck out.

Mon, 05/09/2011 - 03:48 | 1254778 benburnyanki
benburnyanki's picture

Holy Shit Meth Man, calm the fuk down why don't you already?

You guys don't know assholes from eyeballs around here now do you?

put and call options are never able to maintain the profit levels that buying the actual physical commodity can achieve due to the fact that their 'strike price' is always a fair distance away from the current spot price at the time of the instrument's creation. So you make more money buying the physical always.

However put and call options do allow inexperienced or casino style gambling with the losses locked in before you actually have to push the button on a trade. So for diaper wearers and the lot, options are excellent choices.

If we had all bought when we were warned that sil was goin up around $15, even though it crashed $15 this week we would all still be up $25 on our original buy at $15 right or is my math twisted?

Mon, 05/09/2011 - 08:05 | 1254924 Absinthe Minded
Absinthe Minded's picture

Yes, if you found ZH early enough you knew enough to buy silver at $15 like I did. Thank you ZH, thank you, thank you, thank you. Unfortunately friends I tried to warn didn't listen, even after it fell back to $35 and I told them it was on sale. To no avail. Heads in sand, or up arse.

Sun, 05/08/2011 - 19:18 | 1254032 Zero Govt
Zero Govt's picture

Math Man

what is happening in the commodities (ie. Exchanges) is that the paper based on zippo is imploding ...there's already considerable divergence between the exchange spot price and what people are buying/selling the real hard stuff for privately

i welcome the Hong Kong Exchange, especially after seeing what the monopolists at CME hav done to trash private investors, trash the Silver price and trash their own name/exchange

but rest assured without HK there's already a far larger private market outside this Chicago racket. The CME/Crimex is imploding having raped the PI's and is removing what little Silver they had leaving just paper tickets and tumbleweed blowing around in the windy city of Ghicago

We don't have to wait for HK to get up and running, don't you worry your head about all the paper fantasies, the real PM market is where it's at with the private market setting its own spot prices every day for the real stuff

Sun, 05/08/2011 - 19:26 | 1254048 Math Man
Math Man's picture

I guess you missed the bar lists and audits at SLV and GLD.

Allocated physical metal is being sold by the ETFs... and that is very bad.  They used to buy, but now they sell.  Not good.

Silver will be below $20 and Gold will break $1000 this year.

It only costs $5 bucks to dig it out of the ground...

Sun, 05/08/2011 - 19:32 | 1254055 Zero Govt
Zero Govt's picture

you trust audits?

let's start on the audits 1 year prior to the Enron fiasco a decade ago and then all the WS (and British) bankers audited accounts in 2007.... all their balance sheets continue to be frauds to this day... how about the audits of Fort Knox Gold? Would you trust any official body or institution today???

Sun, 05/08/2011 - 19:39 | 1254068 Math Man
Math Man's picture

Absolutely. 

They are much more thorough and intense these days.  No Accounting firm wants to be the next Aurther Anderson.

 

Sun, 05/08/2011 - 23:36 | 1254541 Hephasteus
Hephasteus's picture

SLV and GLD are audit by a piece of shit rothchilds boot licking lying fuckwad shell company. The guys are so fucking crooked they make snakes jealous.

Their HFT butt buddy iShare is fucking dead too.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=56622140

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

Sun, 05/08/2011 - 19:36 | 1254065 Bay of Pigs
Bay of Pigs's picture

Here we go again...

 

Sun, 05/08/2011 - 19:42 | 1254073 Math Man
Math Man's picture

I'm only trying to help you guys out.  But apparently most of you are too stupid to realize it.

 

Sun, 05/08/2011 - 20:38 | 1254217 tmosley
tmosley's picture

How about you go fuck yourself?

Sun, 05/08/2011 - 22:00 | 1254362 Rusty Shorts
Rusty Shorts's picture

 - major shake out is coming Tm.

Sun, 05/08/2011 - 21:59 | 1254367 Rusty Shorts
Rusty Shorts's picture

 - it will bounce a couple of times before the washout.

Sun, 05/08/2011 - 22:36 | 1254446 Rusty Shorts
Rusty Shorts's picture

 - rinse annnnnnd repeat

Sun, 05/08/2011 - 23:12 | 1254504 tmosley
tmosley's picture

Probably, at least until the HK exchange opens.  That is a wildcard.  It could have no effect, or it could totally fuck the COMEX's shit up.  Who the fuck knows?  All I know is that paper will burn, and you'd best be holding physical when the music stops.

Sun, 05/08/2011 - 23:53 | 1254599 rocker
rocker's picture

Is Math Man the same dip that had a yellow and green costume diving into his cesspool of garbage? Sounds like it.

Sun, 05/08/2011 - 19:43 | 1254075 Zero Govt
Zero Govt's picture

Math Man

they are ALL Arthur Andersons... all the auditing pre and post 2007 has continued to be a sham

Sun, 05/08/2011 - 19:50 | 1254091 Math Man
Math Man's picture

Yeah, Yeah I know.  And there was also a 2nd gunner on the grassy knoll.  And the holocaust never happened.  And we never landed on the Moon.  And Osama is still alive.  And JPM Morgan is still manipulating the silver price. 

Sun, 05/08/2011 - 19:49 | 1254097 Bay of Pigs
Bay of Pigs's picture

This is exactly why nobody listens to you. 

Ever hear of FASB? I didn't think so...

Sun, 05/08/2011 - 19:59 | 1254112 Math Man
Math Man's picture

FASB sets GAAP, not audit standards.  Get your facts straight.

 

Sun, 05/08/2011 - 20:15 | 1254137 Zero Govt
Zero Govt's picture

all the Banks, US and British, are over-leveraged and bankrupt ...you'd never know it looking at their audited balance sheets, their quarterly reports or their Executives bonuses ...but you're welcome to believe their numbers, go invest in them, another Triple-A audited pigs ear

Sun, 05/08/2011 - 20:13 | 1254154 GittyUP
GittyUP's picture

Your so smart.  Obv smarter then those guys managing billions of dollars and pouring over the balance sheets with independent auditors.  Besides the mark to market suspension the balance sheets are 100% accurate.  The M2M suspension has a decent argument on both sides of the issue so I can see points on both sides so please dont bring it up. 

Oh and i case you didnt figure it out yet your a run of the mill kook. 

 

Sun, 05/08/2011 - 20:22 | 1254175 Zero Govt
Zero Govt's picture

GittyUp

i'm not smarter, just caling it as i see and hear it... i've been through my own credit crunch for the past 3 years and some very tough times, wouldn't wish it on anyone either... but what is going on here is not normal business practice as 90% of the prvate sector would understand it... it's one bending of the rules, denying of market forces and just plain corruption (bankers getting bailed out via Govt by taxpayers)

i've never asked Govt to bailout my bankrupt business nor auditors to look the other way and pass a bankrupt over-leveraged balance sheet as profitable. That's what's going on here, from regulators, credit ratings agencies to auditors to Govt: one huge rotten stink

the FASB's suspension of mark to market was another goalpost moved for the big bankrupt bankers, you're naive to think anything else 

Sun, 05/08/2011 - 20:11 | 1254150 Bay of Pigs
Bay of Pigs's picture

My point being accounting standards have been suspended since March 2009 and therefore, are basically worthless. And I have yet to see any meaningful or independent audits either.

But hey, who am I to question the Mighty Math Man?

 

Sun, 05/08/2011 - 20:16 | 1254158 GittyUP
GittyUP's picture

Accounting standards suspended?? What are you talking about?  M2M was suspended for certain assets and there is a valid point on both sides of this argument. 

Sun, 05/08/2011 - 22:16 | 1254180 Bay of Pigs
Bay of Pigs's picture

Yes douche, that's what I said. Ever since 2009, when the FASB rules were suspended, the American banking system has been floating on nothing but air. By suspending rule 157, none of the banks have had to admit that they’re insolvent. With the suspension of mark-to-market, accounting rules are now basically mark-to-make-believe.

What the hell is wrong with your "logic" smartass?

Sun, 05/08/2011 - 20:33 | 1254184 Zero Govt
Zero Govt's picture

there was zero 'valid point' to suspend M2M... the motive was to hide the rotten derivatives and mortgages ...the same snake oil happened at the Fed recently 'awarding themselves' a move of the goalposts to value their own assets as they liked (more rotten deterioting MBS's) so their balance sheet doesn't look bankrupt (which it is)

i'm getting the impression you're an accountant

Mon, 05/09/2011 - 01:34 | 1254719 traderjoe
traderjoe's picture

Hey troll:
1. Where's the note?
2. HELOC valuations.

The banks are insolvent. The system is morally and financially bankrupt.

Mon, 05/09/2011 - 08:49 | 1255033 Badabing
Badabing's picture

Meth you sound just like the spin doctors on MSM. Who pays you?

Did you forget that last Friday it was stated that over 85% of SLV flipped?

SLV crashed and was propped up you dick, they will not let free market reign.

Sun, 05/08/2011 - 20:07 | 1254138 GittyUP
GittyUP's picture

MathMan,

I think your absolutely right but Im not sure if we are at this point yet.  When/if the price in silver continues to drop SLV selling physical will most likely end up with a huge OVER correction. 

I also dont know why you waste your time arguing with people who dont use logic.  Its funny how they all assume that the world is one huge conspiracy.  They believe that thousands and thousands of people are in on each and every cover up yet not one whistleblower ever shows up. 

Sun, 05/08/2011 - 21:15 | 1254221 Bay of Pigs
Bay of Pigs's picture

Let me be be the first to tell you that there have been plenty of "whistleblowers" over the years. Frank Veneroso, GATA, Ted Butler, James Turk, Adrian Douglas, Catherine Austin Fitts, Reg Howe, Andrew McGuire, Eric Sprott, John Embry, Jim Sinclair, Dan Norcini, Turd Ferguson and Tyler Durden's Zero Hedge just to name a few.

 

Sun, 05/08/2011 - 21:00 | 1254261 XPolemic
XPolemic's picture

 

MathMan,I think your absolutely right but Im not sure if we are at this point yet. 

And I think you are MathMan astroturfing your own post under another account.

Its funny how they all assume that the world is one huge conspiracy. 

Before the 20th century and the massive success of modern propaganda, conspiracy was a given,not an assumption.

They believe that thousands and thousands of people are in on each and every cover up yet not one whistleblower ever shows up. 

One can be part of a conspiracy without direct knowledge of it. This is how human society works. Restrict the flow of information, provide a cover story. As you move up the heirachy, you become privy to more of how the conspiracy works, but you also become more invested.

Occasionally, very occasionally, one will break ranks, but it's pretty easy to marginalize them, terminate their employment, have them charged with embezzlement or fraud, claim they are mentally ill, threaten their family, and so on. An individual cannot go against the system, because the conspiracy IS the system. And the system, like any organism, will protect itself, close ranks.


Sun, 05/08/2011 - 23:37 | 1254563 Hephasteus
Hephasteus's picture

"They believe that thousands and thousands of people are in on each and every cover up yet not one whistleblower ever shows up."

Oh ya. Want to line up some bankers stick andrew mcquire in the back seat of nice 4500 lb full roll caged late 60's muscle car and let me take him on a little driving mr daisy.

Sun, 05/08/2011 - 20:44 | 1254219 WmMcK
WmMcK's picture

Only the last one -- and the original assertion (about accounting firms).

Your rhetorical method of including unrelated conspiracies makes me want to ignore all of your posts.

Sun, 05/08/2011 - 23:47 | 1254582 Mr. Mandelbrot
Mr. Mandelbrot's picture

Went to a lecture recently where Bill Owens, the former CFO of HealthSouth was speaking now that he is out of prison.  During Q & A, I asked if he viewed public company earnings releases with a degree of skepticism (since he personally oversaw one of the best known accounting frauds).  His response was that while CFO, HealthSouth had acquired 19 public companies and all 19 were found to be committing accounting fraud once they got into their books.  He estimated that at least 4 out of 5 public firms are committing accounting fraud to one degree or another.  This is just one convicted felon's testimony, but like they say, it takes one to know one . . .

Sun, 05/08/2011 - 21:03 | 1254263 Crisismode
Crisismode's picture

"Silver will be below $20 and Gold will break $1000 this year."

 

We will hold you to that one, and ridicule your stupidity on January 1, 2012.

Mon, 05/09/2011 - 07:19 | 1254862 NidStyles
NidStyles's picture

it cost's only $5 now? Say's who? I get my monthly estimates from FCX, and they tell me it's over $9 to pull it out these day's. That's just to pull it out of the ground. Smelting and purifying and casting cost's even more. You having a clue what you are talking about.

Mon, 05/09/2011 - 02:35 | 1254748 gorillaonyourback
gorillaonyourback's picture

hey meth man your right gold is manipulated, the hunt brothers went down on volker raising interest rates and it could play out again but now you have germany wanting greece's and portugal gold for collateral china wants more and more, hell even libya mohmar was trying to make gold and silver the only accepted currency for his oil(the reason they are bombing the fuck out of him).  so put down the crack pipe and think about that and tell me how that translates into long lasting lower gold and silver prices?

Mon, 05/09/2011 - 04:16 | 1254786 benburnyanki
benburnyanki's picture

Big Gorilla on Meth's Back,

FUCKING AMAZING MATEY!

I think this is funny er 'n shit and the Cracked Bitch M&M man should take a few tokes of air in between the hits on the Coke Pipe eh?

Buy the Fukin Dip Wiiiiiiiilbur!

Mon, 05/09/2011 - 08:22 | 1254966 Kopfjager
Kopfjager's picture

I'm just here for the dick jokes.  

Sun, 05/08/2011 - 14:43 | 1253347 catch edge ghost
catch edge ghost's picture

Massive earthquake in 9...8...7..

Sun, 05/08/2011 - 15:13 | 1253434 BlueDonkey
BlueDonkey's picture

too funny! why would anyone flag this as junk?

Sun, 05/08/2011 - 16:02 | 1253571 Conrad Murray
Conrad Murray's picture

Two reasons:

1. The countdown. As annoying as someone who uses the phrase "going forward"(as opposed to going backwards?) or "game changer", or thinks saying "THIS" is in any way an acceptable method of professing concurrence with the thoughts of another.

2. "Earthquakes aren't funny. The devestation Japan suffered is no laughing matter and you are a very mean meanie" AKA "I am moralfag, hear me BAAWWWWW"

Sun, 05/08/2011 - 16:42 | 1253659 ZeroPower
ZeroPower's picture

THIS

Sun, 05/08/2011 - 18:08 | 1253883 in4mayshun
in4mayshun's picture

No one is saying earthquakes are funny. I think the comment meant to convey that there have been some suspiciously timed earthqukes lately. And given the fact that we now know HAARP is real, we are in uncharted territory. (Ever wonder what a billion watts of energy focused on one area can do?)

Sun, 05/08/2011 - 21:25 | 1254300 XPolemic
XPolemic's picture

(Ever wonder what a billion watts of energy focused on one area can do?)

Yes I have, point in fact, and in geological terms, not very much. A ton of TNT releases 4.184 gigajoules of energy. So when Fat Man detonated (21 kiloton), it released >87 TERAjoules of energy on a very small energy, and yet I don't know of any seismic after effect from the destruction of Hiroshima or Nagasaki.

Admitedly, that energy release was within a millionith of a second, but the blast wave would be at least a gigawatt.

Furthmore, the seismic yield from a 9.0 earthquake is equivilent to 480 megatons of TNT, which is  ~2 million terajoules of energy. If you really could create an earth quake with a billion watts, the march Tohoku earthquake would have created a chain reaction that would have caused every faultline on earth to tremor.

Now while I agree that blasting the ionosphere is probably a stupid thing to do, I have serious doubts as to the earthquake causing capacity of the HAARP device. I think it probably kills more whales than people.


 

Mon, 05/09/2011 - 00:02 | 1254613 nope-1004
nope-1004's picture

This whole HAARP thing is way overblown.

First of all, the "billion watts of energy", if it is that, is RF energy, not DC. It is energy that is modulated at at much higher frequency than any of the conventional energy you use in your home. As such, the first wave length after it leaves the antenna is attenuated by 20 dB (1/100 the power). The second wavelength, an additional 6 dB, the 3rd and 4th wavelength, another 6 dB. It's called the optical inverse square law. Look it up.

There is absolutely no way in hell that many billions of RF energy can move the magnetic poles of the earth or change solar patterns. It just can't. High power UHF broadcast stations in your major cities are currently emitting about 1MW of RF energy, or 1 million watts over a specified TV channel. Now take Dallas, where there are 20 stations broadcasting over the air.... now add in the rest of Texas..... now add in the other 50 states. Now add in all the FM and AM radio stations. I mean, a billion watts of RF energy is NOTHING.

If you wanted to really influence an area with an abundance of RF energy, you would need a very high frequency with incredibly high power over a defined area. Under those parameters, things would actually cook. That is how the microwave oven was invented many years ago, actually by mistake. The Distant Early Warning line (DEW line) that the US military had in the arctic many years ago to detect Soviet movement actually started cooking rabbits, killing trees, and burning the workers for the first mile or so from the broadcast towers. But saying that this RF energy can cause global catastrophe and earthquakes is really a stretch.

Mon, 05/09/2011 - 03:00 | 1254757 slewie the pi-rat
slewie the pi-rat's picture

hey, i don't know that much about it, but didn't i read that the bombs used in WWII were detonated in the air?

and, yes, we have lasers, and microwaves, and i really don't know all the weapons they are developing and testing, do you? 

you guys do know we have weapons platforms called submarines, don't you?  if these folks develop something and get it built,  they're prob gonna test it, doncha think?  whatever it is?

that said, i do have an imagination and ability to know that i don't know. 

many years ago, i met a guy who had worked on the shuttle projects under reagan--the star wars stuff.  the shuttle was going up all the time to launch comsats & "do classified military work". 

in the early days, he said, they used the simple chips from the early 80's---that was all they had!  atari/captain zilog stuff;  z-80s.

i'm up in oregon with a buddy trying to kill a few fish and we meet this guy in a bar shooting pool.  he likes thai sticks & beer, and we get along.  i love this stuff and just pump him for stories, so, he tells me they would "stack" these early CPU's:  the first would make a "decision" and kick it to the second, which would evaluate the info and kick its 'decision' to the third, and so on--up to six, from what i recall.

so, i ask him:  ok, you got a solar-powered laser in the sky;  how accurate is it?  what can you hit with it?  he sez:  your picnic table. 

Mon, 05/09/2011 - 06:11 | 1254819 acrabbe
acrabbe's picture

Exactly. Weapons exist that would blow the average person's mind. Humans developed nukes over 65 years ago. Black budgets have enabled government-supported defense contractors and think-tanks have been grabbing genius minds from PhD programs directly after graduation for the past 60 years. That kid you went to college with who got his PhD at 19? He went to work for the government because they're the only ones with toys big enough for him to play with. Scalar weapons. Weather. Nano. Sound. Psychological. Computerized economic warfare. All that kooky conspiracy shyte they have stigmatized in the eyes of the sheep. Bring up a black bag program to an average group of people and they will laugh at you like you are a clown. Imagine that!

All those people who get accidented or suicided? Or locked up for child porn? They dropped dimes on government secrets and had to be neutralized. The sheep do not comprehend these facts. Me? I keep my head down and chew my grass.

http://slv.collective2.com

Mon, 05/09/2011 - 09:40 | 1255197 XPolemic
XPolemic's picture

First of all, the "billion watts of energy", if it is that, is RF energy, not DC. It is energy that is modulated at at much higher frequency than any of the conventional energy you use in your home. As such, the first wave length after it leaves the antenna is attenuated by 20 dB (1/100 the power). The second wavelength, an additional 6 dB, the 3rd and 4th wavelength, another 6 dB. It's called the optical inverse square law. Look it up.

I'm speechless .... just ... speechless. Are you serious? Or just riffin'?

The purpose of HAARP is to raise the ionosphere like a lens so that ULF (ultra low frequencies) can be bounced off this lens to communicate with submarines. It does this by emitting microwaves through an antenna array. As to the rest of your description .... it sounds like gobledygook .... or at least what passes for engineering in the US these days.

As an aside, each and every HAARP is used in this fashion, whales beach themselves (the ULF probably fries their brains), hence my comment that HAARP has probably killed more whales than humans.

It's ALSO true that the ionosphere has a macro effect on the weather, so one could IN THEORY, produce local weather effects with HAARP or similar device. One needs to consider that the ionosphere is being bombarded with megawatts of solar energy per square metre, and that any effect from HAARP would be small and extremely localised.

But saying that this RF energy can cause global catastrophe and earthquakes is really a stretch.

At least we can agree on that. 

Sun, 05/08/2011 - 20:37 | 1254212 Stormdancer
Stormdancer's picture

We are in a season where natural disruptions of all kinds are increasing in both frequency and intensity.  Making that observation is not somehow wishing it on anyone.  I personally suspect the trend itself is going to continue to intensify.

Prudence would consider reality and prepare accordingly.  Especially if you're in Tokyo or California.

Sun, 05/08/2011 - 16:34 | 1253639 catch edge ghost
catch edge ghost's picture

Eh.. could be..

1. Kill the messenger.

2. Fear it could be true.

3. It's junk.

4! It wasn't someone saying that Capitalism is a manipulated joke in one breath, and how they intend to participate in it with their next.

Sun, 05/08/2011 - 18:24 | 1253917 Satan Rotchild
Satan Rotchild's picture

Touchy, criminally insane, coward faggots who use HAARP might be offended...

Sun, 05/08/2011 - 14:50 | 1253348 Segestan
Segestan's picture

Just plain old good news.But how does anyone know they will be objective? We shall see.

Sun, 05/08/2011 - 15:26 | 1253469 Confuchius
Confuchius's picture

@segestan

 

You, round eye, are insulting, even more so than the average mentally challenged trader.

Sun, 05/08/2011 - 14:46 | 1253350 Franken_Stein
Franken_Stein's picture

BANG DAE HO, bitches !

Sun, 05/08/2011 - 14:46 | 1253351 silberblick
silberblick's picture

Makes your blood boil. Here's a comment on this and a hilarious animation exhorting folks to get even against the banksters and government:

http://thesilvergoldhedge.blogspot.com/2011/05/join-sla-to-get-even-and-regain-your.html

Sun, 05/08/2011 - 14:56 | 1253379 LowProfile
LowProfile's picture

Yeah, buy silver.

What the fuck.

Read FOFOA.

Buy gold.

The SLA is starting to sound like a fucking psyop.

Sun, 05/08/2011 - 15:00 | 1253399 DoChenRollingBearing
DoChenRollingBearing's picture

+ $55,000 re FOFOA.

Sun, 05/08/2011 - 15:13 | 1253438 BlueDonkey
BlueDonkey's picture

silver 10.00 re Costata

Sun, 05/08/2011 - 15:35 | 1253508 DoChenRollingBearing
DoChenRollingBearing's picture

My next stop, tried reading the "First Guest Post" last night, but I was tired and bit drunk...

 

EDIT:

If Au goes to (say) $50,000 and Ag to $10, then we would have a seriously weird GSR of 5000:1.

"Poor Man's Gold"

Sun, 05/08/2011 - 15:41 | 1253521 BlueDonkey
BlueDonkey's picture

I agree with costata and I was sad all day.  this zh post lifted my spirits though/  I think this competition from this new exchange will unleash billions into silver once they move into silver, and im sure they will once they get the gold up and running.  just think of all those dollars looking for a home

Sun, 05/08/2011 - 15:38 | 1253520 The_Euro_Sucks
The_Euro_Sucks's picture

Read that piece, low point of the post;

''The SLA needs to ask itself a few questions as we conclude this thought experiment: Who is holding this gold? Why are they holding this gold? How much power and influence do they have? What are their options and capacity to respond to the threat you pose?''

http://fofoa.blogspot.com/2011/05/costatas-silver-open-forum.html

Gold has the biggest guns so join them and drop silver. Mmm Ill just take both since Iam tiny. No weight problems with silver although I split 50-50 ish in physical purchases. Masses have the option to become many giants.

Sun, 05/08/2011 - 15:55 | 1253551 DoChenRollingBearing
DoChenRollingBearing's picture

FOFOA once wrote that having 50% in Au and 50% in Ag was OK.  By weight.

I still have more oz Ag than oz Au, but enough of the yellow so that it is worth far more.  Last week I did take advantage of the really low GSR and traded in some ASEs for AGEs.

Diversification is OK!  I have seen "costata" be labeled a bully over there, but he never has been to me, actually the opposite in my case.  I did see him write once recently that those of us (like me) who say it's OK to hold other metals like Ag and Pt should not be surprised to be challenged.

And, I care not what anyone says about platinum, I am NOT letting my Pt go!

Sun, 05/08/2011 - 16:17 | 1253601 The_Euro_Sucks
The_Euro_Sucks's picture

''FOFOA once wrote that having 50% in Au and 50% in Ag was OK.  By weight.''

 

That would mean I would hold less than 8 ounces of silver. I find that way to little.  Once you dont have the 'weight of the wealth problem' silver becomes very nice. I dont have to much 'security'. Gold is for the long run, silver for the shocks and fiat the 1st line of defence to protect my wealth. Pension and social sequrity, sure... look around. I hope the DoChenRollingBearing has lots of wealth. Try to take the glasses of and only have around $15k (no debt) what would u do?

Sun, 05/08/2011 - 17:56 | 1253847 equity_momo
equity_momo's picture

With all due respect if 15k is what you are agonizing over you should forget PMs and buy a nice gun or an attack dog and learn martial arts.

Sun, 05/08/2011 - 20:30 | 1254195 Real Estate Geek
Real Estate Geek's picture

Wrong! At that level, he needs PMs more than the wealthy need them. 

Chris Rock sums up the rationale rather well:  http://www.youtube.com/watch?v=Rm_DDttubQs

Sun, 05/08/2011 - 19:00 | 1253994 Transformer
Transformer's picture

I read that FOFOA article.  seemed like he glossed over a few things.  We have thousands of years of history where silver and gold were money together at anywhere from 12 to 20 to 1.  That got all messed up when we went to fiat and so many uses were found for silver and it has effectively been used up.  If silver had accumulated at the same rate as gold on the surface of the planet and not so much of it discarded to landfills, I would expect the ratios of old to come back when we get to Freegold. 

Because of the big loss of silver bullion in the last 70 years, I would now expect that ratio to be a little lower.  Somewhere between 5 and 15 to 1.  It will stabilize when silver gets to a high enough value to make recovery worthwhile from industrial uses, as gold is recovered now.

It also seems like the Chevy vs Ford argument from my father's days, over at the FOFOA blog.  I don't have any particular preference for one metal over the other.  I have very little, so I like silver now for the appreciation.  I'd like to own lots of both.  I consider the FOFOA article on hyperinflation to be the final treatise on the subject, but I don't have any prejudices in the Chevy vs Ford debate.

Sun, 05/08/2011 - 20:34 | 1254199 Jump The Shark
Jump The Shark's picture

Chevy was "bailed out"

Sun, 05/08/2011 - 22:29 | 1254428 DoChenRollingBearing
DoChenRollingBearing's picture

@ Transformer,

FOFOA's hyperinflation article indeed was EXCELLENT.

FYI, you were recently quoted by name over there, I do not remember excatly where, but it was very recently.

I am moving in the other direction than I guess you are.  Last week I traded in Silver Eagles for Gold ones when the GSR was about 35 - 36.  I have read many times about the GSR "should be" approx. 16:1 which is what they say matches up with their relative scarcities in the Earth's crust.  Some here at ZH say it could go to as low as 5:1, as you write, and there are a couple who say it could go to 1:1 (tmosley and tekhneek).

I do not know enough about silver to really offer a good opinion.  I hold it though, but not that high a percentage of my PMs.  In descending order:

Au

Pt

Ag

Pd  <--- my little spec!

I probably will trade out a bit more silver for gold, especially if the GSR dips again (due to a jump in silver).

Good luck everyone in these perilous times.  It is forums like ZH where you can get lots of good ideas and opinions.

Sun, 05/08/2011 - 23:57 | 1254597 Keri at Bankste...
Keri at Bankster Report's picture

In my opinon, the GSR at 16:1 again is a very long way away, and 5:1 doesn't make sense to me based on the actual supply.  And 1:1?  I can't even see that ever.  Also, silver is already at a point where industrial recovery is more than worthwhile, and actually quite necessary: silver recovery from photographic film is one of the most expensive recovery operations and it is still highly profitable and has been for some time.  Recovery currently supplies 20-25% of global silver: if industry wasn't recovering, we would have a very serious supply crunch.  In fact, in 2009, recovery/recycling accounted for about 182 million ounces (32,151 tonnes).  For perspective, global production that year was 26,240 tonnes (which was higher than the average 700 million oz/21,772 tonnes we expect every year).

Bullion held privately would return to circulation for exchange de facto if the GSR neared 15:1 simply because a ratio like that would release the other 45 ounces of silver the GSR has kept penned up for every once of gold (since the ratio moved from 16:1 in 1964 to a recent average of around 60:1).  If money was stable, and you had a bunch of silver that you could exchange for a set amount of gold, why wouldn't you?  It would be like it used to be when you could exchange 20 Peace dollars for a $20 Gaudens.  That is what hard money is all about.  Gold would remain the metal with which you store/save purchasing power, and silver would revert to the fractional trade/labor unit it has been for ages.

Sun, 05/08/2011 - 22:13 | 1254399 DoChenRollingBearing
DoChenRollingBearing's picture

@ The_Euro

OK, it really depends A LOT on your own personal circumstances as to how to place your bets on precious metals.  If you have a "stable" job or income source, then that is one thing, if you are nearer to financial peril then it is quite different.

If you are young and reasonably employed, then I commend you on having $15k saved up.  If you are "financially stable", then you can freely buy gold and/or silver in whatever proportion you think is correct for you.  Yes, I had sort of thought you were talking a larger amount of money, my apology, I just made a bad assumption.

If your situation is closer to "financial peril", then you need to hold more cash than otherwise.

A suggestion to buy a gun(s) is not bad, I have a 9mm Beretta and a semi-auto AK-47 (a Romanian one will only set you back a little over $400).  Guns are a lot of fun if you have that mind-set (I do).  I also do Tai Chi, but my wife won't let this 55 year old have dog...

 

Disclosure: I am NOT a financial adviser nor do I play one on the Internet.

Sun, 05/08/2011 - 18:06 | 1253868 jackinrichmond
jackinrichmond's picture

silver's a better bet until the ratio hits at least 20 to 1.

i wouldn't start arbitraging to gold until the ratio gets into the low 30's.

until then, buckle up and enjoy the rollercoaster !

Sun, 05/08/2011 - 15:14 | 1253447 Alpha Monkey
Alpha Monkey's picture

Agreed, just started reading FOFOA a week ago.  Psyop, probably not, as silver does have a history of advocates, just not the monetary status of gold.

FOFOA - read it, it takes time and a lot of patience to break it down, but I think anyone will find this usefull information.

Sun, 05/08/2011 - 15:31 | 1253491 Confuchius
Confuchius's picture

@ alpha monkey;

Silver does not "have a history of advocates".

Silver is money.

Argent, in French.

The Pound Sterling in the UK (Pound of Silver)

The longer it takes you to read up on it, the more of your wealth we will have.

Sun, 05/08/2011 - 15:45 | 1253531 BlueDonkey
BlueDonkey's picture

obviously you dont read fofoa.... 

Sun, 05/08/2011 - 18:12 | 1253888 Burnbright
Burnbright's picture

I do read fofoa and he is wrong about silver. What I find funny is his free gold theory is already in play.

Sun, 05/08/2011 - 15:45 | 1253532 BlueDonkey
BlueDonkey's picture

obviously you dont read fofoa.... 

Sun, 05/08/2011 - 15:42 | 1253533 BlueDonkey
BlueDonkey's picture

obviously you dont read fofoa.... 

Sun, 05/08/2011 - 17:49 | 1253833 Bendromeda Strain
Bendromeda Strain's picture

I strongly feel that someone who goes to such great length to dissuade strangers from doing something historically smart, has an ulterior motive. If this FOFOA is so altruistic, let him unmask. He has no enemies. He has no employment issues (his fundraising has stated as much), so why the secrecy? If he wants people to divest from silver for their own benefit, then let him do this great good under his own name. Otherwise he can (FO)FOA. Tell me this - do you all have enough gold to help your family? Your extended family? During the transition, before this glorious "Freegold" epiphany? If you say yes - how are you fractioning it? To say holding Au=Ag by weight is a valid strategy for anyone but the wealthy is vain and foolish in my opinion. If SHTF I would expect many of the vain and foolish to be felled without even seeing where the bullet came from. $10 silver? Put your money where your mouth is and sell it to me now.

Sun, 05/08/2011 - 18:13 | 1253890 silver_serf
silver_serf's picture

i too am suspicous of FOFA...As Churchill said, he has a great talent for compressing the largest amount of words into the smallest ideas

Sun, 05/08/2011 - 21:36 | 1254324 hamurobby
hamurobby's picture

Well sure, it takes a lot of persuasion to undo 80+ years of dissuasion.

Sun, 05/08/2011 - 21:56 | 1254353 silver_serf
silver_serf's picture

I for one don't need to be persuaded...I wouldn't think he is the type to convert sheeple into gold bugs, from what Ive read he overcomplicate his ideas and is proud of it. He has nothing new to say, it's just his painful delivery thats new. Why does there need to be some secret knowledge other than gold=money, has always been, and will be. 

If you want an acedemic read Antal Fekete, or just use common sense

Sun, 05/08/2011 - 19:34 | 1254060 fiftybagger
fiftybagger's picture

FOAF. First of all failures.  Close enough, yes indeed, psyop.

 

Silver For The People

http://www.youtube.com/user/BrotherJohnF?feature=mhum

Sun, 05/08/2011 - 22:33 | 1254439 Quixotic_Not
Quixotic_Not's picture

+100

Sun, 05/08/2011 - 22:02 | 1254370 ColonelCooper
ColonelCooper's picture

I find FOFOA boorish and mistaken about silver, not to mention that his name sounds like something a special needs child would name a Teddy Bear.

I consider all honest opinions to be valid, and I try to get information from every source time allows.  FOFOA is not one of them.

Sun, 05/08/2011 - 15:46 | 1253537 The_Euro_Sucks
The_Euro_Sucks's picture

U know fofoa stated he was a small business owner up untill 2008 and since started his blog to tell how he understood the goldtrail? Amazing learning curve in 3 years, especially the first posts just a year after him finding out about freegold (via another and foa). Psyops, probably yes. Me learning also yes.  

Sun, 05/08/2011 - 16:46 | 1253661 Chappaquiddick
Chappaquiddick's picture

Well - if he is psy-ops then his call for hyperinflation is wrong and we can expect deflation (thank goodness, exactly what we need) - either way PMs will outperform.  BUT - having been on this silver roller coaster and also having taken advantage of a swap out to Au with the low GSR - I'm refining my view of the yellow stuff - I like it, a lot.

Sun, 05/08/2011 - 17:04 | 1253719 The_Euro_Sucks
The_Euro_Sucks's picture

''Well - if he is psy-ops then his call for hyperinflation is wrong''

 

I dont share that opinion. Like my name says I think he is wrong about the Euro not hyperinflating. The dollar is a lost case. Even worse, all paper will burn (another)

Sun, 05/08/2011 - 20:32 | 1254201 Chappaquiddick
Chappaquiddick's picture

I'm also in the hyperinflation camp - debt loadings are too great to do anything but print.  What they need to do they just can't stomach, namely stop spending more than they earn.

Mon, 05/09/2011 - 02:51 | 1254758 Popo
Popo's picture

And the bond market says?

Sun, 05/08/2011 - 22:11 | 1254390 McPoopypants
McPoopypants's picture

Max Keiser IS on RT, it wouldn't be the craziest thing the GRU has ever done either. Maybe They're hyping silver while Russia's central bank buys Au. Yaay, conspiracies. 

Sun, 05/08/2011 - 14:47 | 1253353 Spitzer
Spitzer's picture

What does gold do on May 18 ??

Sun, 05/08/2011 - 14:46 | 1253357 cossack55
cossack55's picture

Becomes edible.

Sun, 05/08/2011 - 14:51 | 1253367 AG BCN
AG BCN's picture

LMFAO

Sun, 05/08/2011 - 17:32 | 1253803 slewie the pi-rat
slewie the pi-rat's picture

and you'll be able to spend it in the supermarket!

Sun, 05/08/2011 - 22:27 | 1254426 Yen Cross
Yen Cross's picture

Trade light. best wishes, yencross.

Sun, 05/08/2011 - 14:54 | 1253372 WmMcK
WmMcK's picture

I don't think the FDA will approve of a "mojo" enhancer.

Guess we'll just have to go stealth and viral.

Sun, 05/08/2011 - 15:32 | 1253492 Vendetta
Vendetta's picture

and pays a dividend

Sun, 05/08/2011 - 15:57 | 1253567 breezer1
breezer1's picture

nothing. but the people buying and selling will probably get very excited.

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