How The CBOT, Comex And CFTC Coordinated To Break The Last Silver Price Surge

Tyler Durden's picture

Just like QE is nothing new in the monetary arena, and has seen some incarnation at least since the early 80's primarily in Japan, so parabolic commodity price surges have occurred periodically, most notably in 1980, when Bunker Hunt brought the price of silver to over $50. However, unlike any time before, never in the history of the world have we seen a coordinated worldwide monetary stimulus via relentless credit money "printing" courtesy of global central banks. In that regard, this time really is different, as there is no other remaining backstop to the world financial system: the global banking cartel has used up all its bullets and now can only double down in the most nightmarish Martingale system ever conceived, where each iteration means further fiat absolute value destruction (on a relative basis it simply means a race to the currency bottom, whereby definition only one can be in the lead at any given moment: usually the one with the biggest printing press, and greatest deflationary threat). And while many still believe that QE2 will be the last of domestic US monetary easing episodes, as Bill Gross noted earlier, it is very possible that the US may be headed into a triple-dip recession, for which the only prescription will be another QE round (with political gridlock in DC at unseen levels no fiscal stimulus is even remotely possible). If this happens, precious metals will once again surge. The only question is what will the exchanges do after the next gold and silver spike? Indeed, as we suggest, margin hikes are just the beginning. For a complete playbook of how the CME may proceed after the margin hike approach fails, we once again go back to the curious case of Bunker Hunt. Below, from the Playbook biopic of the Texas billionaire we posted yesterday, we present the walk through of how the CBOT, Comex and CFTC tried to break silver's back. Back in 1980 they succeeded. Have they, and will they succeed this time?

...The CFTC and the officials of the two exchanges decided to have a little talk with the Hunts. Explaining that they feared a squeeze, the exchange officials asked them if they would consider selling some of their silver. The brothers’ answer was no. What was more, they said, they intended to keep buying silver and to keep taking delivery on it. They thought silver was still a good buy, even at the  new high prices. Besides, as Bunker put it with typical understatement. “If you sell, you get into a tax problem.”

On top of all that, Bunker really did believe in silver as a long-term investment, the underpinnings of a new economy. He did not say that in so many words to the CFTC men and the exchange officials, but he did give them a glimpse of his basic apocalyptic vision when he revealed a previously undisclosed feature of his silver play: the fact that he was moving his metal to Europe. This time, he did not fly the bullion overseas in chartered jets with cowboy guards. As he told the CFTC, Bunker simply traded 9,000,000 ounces’ worth of metal he held in Chicago and New York exchange warehouses for an equal amount of bullion held by other traders in London and Zurich. The reason? As he explained to the CFTC and the exchange officials, he feared that the U. S. Government might expropriate silver from Americans just as it had expropriated gold back in the Thirties.

But Bunker’s assurances that he was willing to cooperate as much as possible apparently mollified the CFTC officials; the C.B.O.T., however, concluded that it was time to act. In a move aimed directly at the Hunts and the other big buyers, the Board of Trade raised the margin requirement and declared that silver traders would be limited to 3,000,000 ounces of futures contracts. Traders with more than that would have to divest themselves of their excess futures holdings by mid-February 1980.

With that, the battle lines were drawn. Bunker let it be publicly known that he thought the C.B.O.T. was changing the rules in the middle of the game, and vowed to fight the limits all the way. Privately, he regarded the C.B.O.T.’s action as another conspiracy against him by the Eastern establishment. And for once, he had a good prima-facie case.

The boards of both the Chicago and the New York exchanges were composed not only of “outside” directors but also of representatives of the major, usually Eastern-based brokerage houses. Later 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 regulators. At the same time, though, the C.B.O.T. restrictions made Bunker even more bullish on silver, because, as he put it, “they show a silver shortage exists.”

Bunker appeared to be right. Through November and December, the price of silver rose faster than ever. By the last day of 1979, the price reached an astronomical $34.45 an ounce. Meanwhile, the Hunts’ silver holdings kept increasing. By the end of December, the Hunts and their Arab partners held 90,300,000 ounces of bullion that the CFTC knew about and another 40,000,000 ounces the Hunts had stashed in Europe. The Hunt group also held about 90,000,000 ounces worth of silver futures, most of them due for delivery in March on the Comex in New York.

By this time, the CFTC became concerned that the silver positions held by the Hunts and the Conti group were “too large relative to the size of the U. S. and world silver markets.” Subscribing to the philosophy that the futures market was not a substitute for the cash market, the commission determined that the time had come to stop Bunker’s perverse buying spree. A meeting to decide what to do was set for January 8, 1980.

Then the Comex stepped in. On January seventh, the exchange announced new position limits restricting traders to no more than 10,000,000 ounces’ worth of futures contracts. The effective date of the limits was set for February 18. The day after the Comex announcement, the CFTC announced that it was backing the exchanges new limits.

Bunker was incensed. “I am not a speculator. I am not a market squeezer,” he protested. “I am just an investor and holder in silver.” Taking the offensive, he accused the exchanges and the Government of destroying the U. S. silver market by changing the rules in the middle of the game. “The market will move to Europe,” he predicted ominously. “The silver market in this country is a thing of the past.”

Strangely enough, the price of silver fell only one day in the wake of the Comex announcement, then started climbing even higher. Part of the reason for the continued price spiral, according to an after-the-fact analysis by the CFTC, was that Bunker kept buying silver. On January 14 and 16, the Hunts made agreements to take future delivery on 32,500,000 ounces of silver (mostly in London) at various dates that spring. The largest of those contracts were with Englehard Minerals. On January 17, silver hit a record high of $50 an ounce.

Bunker could hardly be incensed about that. On that one day, the worth of the Hunts’ silver bullion holdings was nearly four and a half billion dollars. Since most of that silver had been acquired at less than ten dollars an ounce, they had a profit of over three and a half billion dollars. Bunker and Herbert had made nearly as much money in the past six months as their late father had made in his entire lifetime, at least on paper. Of course, if Bunker actually sold all that bullion, he would face enormous tax consequences. The trick now was to figure a way to utilize those huge gains without having them decimated by the taxman.

As Bunker pondered that, the exchanges decided to impose their most stringent restriction yet. On January 21, the Comex announced that trading would be limited to liquidation orders only. There would be no more futures buying. The game was closing down.

The next day, the price of silver plunged to $34, a drop of ten dollars in a single day. It stabilized shortly after that, and remained in the mid to high 30s for the rest of the month. But in February, the price began to slide downward again. By that time, silver was literally coming out of the woodwork. In response to the new high prices, old ladies had been selling their tea sets. Families had been hocking their silverware. Coin collectors had been divesting themselves of their collections. In January and February alone, an estimated 16,000,000 ounces of silver coins and an additional 6,000,000 ounces of scrap silver had come onto the market. With the price of silver now dropping, some of those small sellers and small investors began complaining to the CFTC about the exchange restrictions...

Ironically, while the paper holders of silver may be complaining to the CFTC now, the inverse is true about physical supply-demand dynamics. Indeed, instead of a scramble to convert physical silver to paper, we continue to see the inverse as a material amount of silver wholesale retailers continue to be out of actual silver.

And, as was posted yesterday, those who wish to read the full story of Bunker Hunt and the still historic surge in silver, may do so here.

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Muir's picture

___________________BTFDs!!!

-

jomama's picture

i've said it once, i'll say it again.  the best thing about your posts is your avatar.

Transformer's picture

I posted this on a different thread, but it really should be here.

 

  I sure see what's happening now as having multiple parallels and similarities to what  happened in 1980 with Bunker Hunt.  He decided to corner the physical silver market because of inflation fears, and proceded to amass well over 100 million ounces of physical silver stored at various locations around the world, all of it free and clear.  He got embroiled with the Commodity exchanges and they always win, because they make the rules and have the ultimate rule maker on their side, the US government.  His plan was working, he got taken down because he had lots of futures contracts, and there was that same short side interest that is there today.  They naked shorted the market and he lost.

What is happening right now is so similar as to be eerie.  An entity is buying up all the physical silver it can get, for the same reasons that Bunker was doing it.  That entity has amassed a huge unknown amount of silver, but certainly, at least twice as much as Bunker did.  The difference is that this entity is not in the commodities market and therefore un touchable by those same short interests.  The entity, of course, is millions of individuals from all walks of life, the public.

This action has turned the physical market into a huge Gorilla.  The commodities market pales in comparison as far as actual physical silver delivered to buyers is concerned.  Until now, this physical market has stayed pretty much in lockstep with the paper market as regards price, but due to abuses and corruption in the paper market, the physical is breaking away from the paper market, which has always determined price discovery. Now that all players see the blatant corruption in the paper market, a new price discovery mechanism will assert itself. 

A similar parallel can be drawn about the price of gold as recently as a year ago.  Gold seemed to track almost exactly the inverse price of the dollar.  This continued until the market realized that the dollar was finished and that any upwards movements of the dollar were simply aberrations brought about by currency swaps, bond failures around the world and other factors.  The fate of the dollar is sealed and this is now known by all the players, so the gold price broke away and now moves completely independently of the dollar.  In one sense, this is strictly not true, as gold is going up because the dollar is going down, but no one is fooled anymore by temporary moves to the upside of the dollar, no matter how well it is talked up by the FED or the idiots on CNBC.

Like wise, we have just arrived at the point where no one will be fooled by the Comex price of silver any more.  After the display put on this past week at the Comex, we all get it.  And remember, we don't have commodities contracts, so the exchange can't naked short us to death.  We frankly don't care.  As long as the Comex pricing mechanism holds up, it will act to only further bring about this change, as manipulated lower prices for silver will bring about greatly increased buying on the part of the public, increasing the shortage.  The Comex traders engineer this big whack job to push silver lower to stop this advance and it has no effect.  The public sees it as "Silver on sale" and they just buy more.  The Comex con artists can have no affect on what's happening, almost by definition.  The public buys silver for the same reason Bunker did, only we're not on margin. 

As witness, what happens?  The Comex brings the price down.  The public watches but does not sell its physical.  When it looks like the price has bottomed, the public jumps in and buys all the physical it can get, until the dealers are out of stock and back ordered for six weeks.  This just increases all the fundamental pressures that were driving silver to the upside, to begin with.  Blythe and company ulitmately achieve, with their short sighted manipulation, the opposite of what they are trying to accomplish.

So, I say to those manipulative forces that are trying to stop us, go ahead, keep it up.  The pricing mechanism is going to change now, and whatever you do just drives the price higher anyway.

 

scratch_and_sniff's picture

Which of you retards thinks the bullion dealers are going to discover adequate pricing mechanisms in time for this grand divergence? From what I have read on this site alone there are already $3-$5 arbs popping up all over the place. How is that going to work out? The market will be a shambles; you think the volatility you seen on the CME was bad, just wait until you have legions of grasping silver dealers trying to out manoeuvre one another. What is the pricing mechanism anyway? “Billybob sold 3 ounces for $150 so im gonna sell for $151, snortle ?” Who’s going to be fixing the prices, when? what will they use to track even the bulk of the market? Even if you think about it for a second, it just evaporates into absurdity, nice dream though. SELL FOOLS!!

Transformer's picture

To me, what you have said is funny.  Retailers have been creating prices, competing against each other for the sale of the same goods for a long long time.  From one point of view, it is very simple, especially in a supply limited market such as this.  A dealer simply sets a price, that he thinks will be about right.  Then if there is more demand than he has product, he raises the price.  If he seems to have more product than there is demand, he lowers the price, or promotes and advertises more.

How many dealers are there out there right now who are sold out and back ordered for weeks?  If they had raised their price, they might still have product to sell and would make more money. 

Don't you get it?  We don't need slick New Yorkers in $2000 suits to tell us how much to sell silver for.  The Comex hardly has any silver anyway, and they only sell a couple million ounces every other month.  They gotta be less than 5% of the market.  Retailers have been figuring out how to price their goods for millenia.  Only a paper backed con game needs suits to set the price.

Go to First Majestic, to their silver store and see how they set the price.  Go to ebay, see how the price is set there.

Producers, distributors and suppliers have got to wake up.  I think it's happening, but they all gotta wake up.  APMEX, stop saying the  price is spot plus so many dollars.  Just name your price based on supply and demand.  Now is the time, all the new people coming in will just want to buy silver, they don't even know what spot is.

And if some customer says, "Your price is way over spot, I'm not gonna pay that."  A dealer could say, politely, "Well sir, it's completely ok with me if you want to buy your silver from the Comex.  My silver is real, you can take it home with you, right now."

DON'T YOU GET IT, WE DON'T NEED THE FUCKING COMEX!!!!!  LET THEM FUCK EACH OTHER OVER!!!! WE CAN SET THE PHYSICAL PRICE OURSELVES, BASED ON SUPPLY AND DEMAND, LIKE ALL OTHER MARKETS DO.

Stormdancer's picture

Transformer, here's another place ex-COMEX that has the potential to set PM prices:

http://www.bulliondirect.com/nucleo/showProducts.do?cat=Silver_Bullion&c...

 

They've also got the following blurb posted:

 

05/06/11 4:15:16 PM CDT

Operational Delays

Due to heightened market activity please expect delays in customer service, accounting, shipping, and receiving.

I sometimes like to poke around in there looking at bid ask spreads for different bars and coins and seeing how much of what is available....figured you might enjoy it as well :)
Transformer's picture

Thanks Stormdancer.  Cool link.

Stormdancer's picture

You're welcome.  The Nucleo exchange is an interesting business model.  Real trades of real, unleveraged silver, all trades resulting in a delivery.  I think when paper and real metal diverge it will show up on Nucleo pretty quickly.

GetZeeGold's picture

 

Wazzup SD!

 

Riders on the storm we are......unlike Kitco....you won't get banned on ZH....but you can get junked into oblivion....heh heh. :)

 

 

Stormdancer's picture

Nice to see you and a few other misfits I'm familiar with around :)

Absinthe Minded's picture

I use Nucleo Exchange on Bullion Direct all the time. Great place to deal with. Sometimes the catalog prices are better than the Nucleo prices. Some silver holders don't like to lower their prices as quickly, can't say I blame them. Loaded up on another 20 oz. yesterday while it was on sale. Delivery promises dates are pretty accurate too. Load up people.

earnulf's picture

Thank you SD for a great link, very interesting, needs to be spread to more folks so that they have a chance at some physical.   Well Done

Stormdancer's picture

Spread it far and wide :).  A free market is quite capable of setting up price discovery arenas and if Nucleo isn't the answer it sure might be the model for it when it shows up.

Assuming what little "free" we have left stays that way...an endangered assumption at best in this climate.

rosiescenario's picture

....now that we have this thing called 'The Internet'....price discovery is possible with a few mouse clicks....the CME may have just shot themselves in the foot by their obvious attempt to manipulate the silver price downward.

Transformer's picture

I think you are exactly right, and they are finished.  They are not going to be the price setters.  And that is the key to their manipulation game.  As long as they can set the price, they control the market.  I see just a few weeks here, for everyone in the silver business to figure this out.  The Crimex is something in the past that people will make jokes about.  They are scumbag criminals and this is how we beat them.  I am willing to bet my entire silver stash (and sadly, it's not very much) that this is the last whack job they do on the silver market.  Crimex will be relegated to  the past.

Stormdancer's picture

How is that going to work out? The market will be a shambles; you think the volatility you seen on the CME was bad,...

 

No my dear troll, the market will not be in shambles.  A day will come when the market denominated in US dollars (or any other fiat currency) will simply cease to exist for a time.  Silver will go into hiding and refuse to come out for any amount of fiat currency.  So, you'd do well to prepare for the day when silver will only come out of hiding in exchange for oil, wheat, sugar, coffee, corn, good beef, copper or, wait for it.....gold. :)

scratch_and_sniff's picture

The naivety of it all, i dont even know why i bother.

Transformer's picture

Yeah, where do I get some of that "naivety".  I been wantin to gets some of that for a long while.

So, you don't think its possible to have a physical silver market without the COMEX to tell us how much to sell it for?

i-dog's picture

"i dont even know why i bother"

I often wonder the same thing: why do you bother? And why are you so concerned about how other people spend their money as to shout (in your previous post): "SELL FOOLS"?

Fucking socialists: always got their hands in other people's pockets and offering "helpful advice" on how other people should conduct their lives.

Hephasteus's picture

But they just want to do great things with your resources. Like help the poor. Or collect all the earths valuables. Like educate people. Except for corporate trade secrets. Like take care of widows and orphans. Except for the altar boys they rape.

http://www.youtube.com/watch?v=2aou6c2MOmg

Stormdancer's picture

Actually, I do make trades :)  But only for gold.  And I only trade gold for silver.

DoChenRollerBearing knows what I'm talking about :)

A couple of years ago I bought two big ugly industrial bars of silver. One bar was 5 kilos and the other was 14.393 kilos.  If, at that time, I'd used the exact same amount of money to purchase gold, I'd have been able to purchase 9 ounces of gold. 

On April 15th I traded that 623.5 ounces of industrial silver for 16.1 ounces of internationally recognized gold in coin form.

If the gold/silver ratio makes it back up to 50, I'll trade that 16.1 ounces of gold back into silver and after transaction costs I'll end up with about 760 ounces of internationally recognized silver coins.

Depending on what I think the market is doing I will probably trade that silver back into gold again when the ratio hits 30 or so.  After transaction costs I'll net about 23.5 ounces of gold.

Turning 9 ounces of gold into 23.5 ounces in a few years is a win in my book :)

I've not taken one minute of risk being caught in fiat currency while it crashes...and if the market doesn't go according to my plan ...well...I'm "stuck" with 7 more ounces of gold than I would have had if I'd bought gold in the first place.  Woe is me.....  :)

And I've got more silver to trade at 30, and 20, and 10 ...just in case.

I really don't care if the GSR makes it back to 50 or not.

GSR trading is a leisurely process that is completely independent of price and is a logical strategy for those who have managed to visualize winning in terms of ounces instead of dollars.  I don't deal with the stress many traders have to put up with on a daily basis :)

 

 

Tennessee Patriot's picture

Stormdancer, I have a question for you.  You stated that you have had some experience utilizing Industrial Silver in the purchase of Silver & Gold.  You are the first individual I found that apparently has "broken the code" on using Industrial Silver in this manner. 

On the APMEX site they have Industrial Silver for sale in various size bags.  All of it is .999% pure BB Shot sized.  The disclaimer in the add says, "Not recommended for Investment purposes".  OK.  I got it.  I can see what the obvious "transaction issues" would be if you showed up somwehere with a bag of shiny BB's, claimed that they were Silver and wanted to either cash it in or use them to purchase something. 

I am taking the long view that in the future the price of Silver will be such that even a 1 oz. Round or Bar will be worth more than the "thing" I need to buy, and being able to measure out a small amount of silver, say in 1/4 of an ounce in BB form, would be more practical.  Basically the issue would be, "How will you get change for a 1 oz. Round"?

That being said, I would like to read your about your experiences, and anyone else for that matter, on this potential future issue.  Thanks. 

i-dog's picture

You need to fire up a few of your own brain cells and think about what you would accept -- if you were a shopkeeper or service provider -- in the event of a USD failure / hyperinflation.

Would you accept Candian Dollars, Swiss Francs or Mexican Pesos? What would your suppliers accept? How would the gold and/or silver bug periodically convert small amounts of his stored wealth into those more convenient currencies for daily expenses? Would you accept a gold coin that had been cut into quarters (the origin of the 'quarter')?

I can assure you that no sane person would be wandering the streets with a 10oz silver bar looking for a pint of milk and change in BB shot!

Also look to Argentina after their crash for examples of local 'currencies' -- vouchers issued by local banks or businesses -- that local citizens would be paid in for work done and freely exchange for goods in their local markets. (I've forgotten how/when they would be redeemed for more widely accepted currencies, but you could research it, or wait for someone here to provide an answer for you).

In the absence of Big Brother, energetic entrepreneurs will fill every market niche with creative solutions to every problem.

Stormdancer's picture

Tennessee,  the "industrial" silver I traded was in bar form, clearly hallmarked from well known refiners (in Australia at least).  I don't imagine I'd like to try trading for shot under any circumstances.  I don't see how you could convince anyone the shot was really pure silver.

I don't know what the answer to your "How will you get change.." question is if silver values do something stupid crazy (and I believe they could), but I'm reminded of some past answers.  Google "pieces of eight" right quick and you'll find stories of when Spanish dollars and early US dollars were cut into as many as 8 wedges or "bits" which were then used to make change.  I don't know that such a practice will ever come back into fashion, but human ingenuity will surely find some kind of widely accepted answer should the same problem crop up again.

Or, perhaps we'll have to remonetize copper or brass coins again to use for making change for silver.  A lot depends on how much time and turmoil has to go by before a new currency system replaces our current dollar based system.  If it only takes a few months, it's probably not going to matter much.  If it takes a couple of years....well...like I said, I'm sure we'll figure something out.

I'd avoid the silver shot though still.  I don't see that stuff as being valuable to anyone but a jeweler who plans to melt/cast it into jewelry or an industrial user that's going to melt it into his solder or other product.

 

Edit:  I thought I'd ad this as well Tennessee.  My plan doesn't include surviving a time of dire economic disaster by spending silver.  I intend to be buying silver during that time if it comes.  That's why I have trade goods laid aside like food, spices, tampons, a few tonnes of wheat (and a good grinder), toilet paper, enough bar soap to wash Ghengis Kahn's horde twice over, enough shampoo for same.......etc...you get the picture. 

Just something to think about :).  Some people think about surviving on their silver.  I think about providing the things they're willing to give silver up for :)  In my plan, precious metals are for carrying wealth through the turmoil unmolested, not for surviving in the midst of it.

RexZeedog's picture

If you want to survive real turmoil, you'd better add a large supply of bullets (and bullet delivery devices) to your stockpile - or else the hungry hordes will pick you clean for free...

RockyRacoon's picture

 

Good stuff!  Straight from FOFOA.  Always a good read.

BTW:  Mint silver sets again need look.   Use your own judgement in allocating a few stray fiats to some genuine Mint products.   I bought a boatload at the older $32/set range.  The ATB Quarter Silver Proof Sets each contain 0.90420 troy ounces of silver.

2010 United States Mint America the Beautiful Quarters Silver Proof Set™ (SV2)

2010 America the Beautiful Quarters Silver Proof Set
March 5, 2010: Price of $32.95 published in Federal Register. Silver is $17.25 per ounce.
May 27, 2010: Sales begin. Silver is $18.36 per ounce.
February 27, 2011: Sales suspended. Silver is $32.54 per ounce.
March 18, 2011: Sales resume. Price increased to $39.95. Silver is $35.15 per ounce.
April 8, 2011: Sales suspended. Silver is $40.22 per ounce.
May 5, 2011: Sales resume. Price remains at $39.95. Silver is around $35 per ounce.

Today's Price: $39.95
http://catalog.usmint.gov/webapp/wcs/stores/servlet/EmailView?sourceCode=B78140H&URL=ProductDisplay&catalogId=10001&storeId=10001&productId=15252&langId=-1&parent_category_rn=10111
Zero Govt's picture

Scratch 'n' Sniff

You mean the "naivety" of buying paper Silver on the Crimex, what little physical they have is being emptied at a rapid rate, and dealing with the CME (Chicago Mafia Exchange) who've just trashed their exchange, their name and the Silver price in an absolute shambolic farce! That naivety???

The naivety of believing their CNBC adverts running right now saying CME are there to "help farmers" and other people "manage their risk"? After being directly responsible for increasing price volatility beyond nuclear meltdown critical for investors presumably they'll now be withdrawing their oily fraud of a laughable CNBC advert? Will they be sacking both their risk managers and margin managers forwith for creating carnage in their exchange? 

Goodbye the toilet paper trading CME/Crimex, your shambolic risk/margin managers and incompetent vandals on the CME Board of Directors

scratch_and_sniff's picture

Good luck with all that lot mate, all the best.

Zero Govt's picture

it's happening 'mate'... you can go scratch and sniff CME/Comex's running on empty, of both private investors and Silver itself, exchanges in the months ahead... sure to join the running on fumes stock markets ...everything the US establishment touches (US property, banking, pensions, education, FRN's etc) turns to a sack of shit

..the Crimex as we speak is being emptied of Silver (real value) leaving a fraudulent worthless paper shell game. A process that's been going on for 20 years raping America learnt with the Pump & Dump internet 2000 and MBS Mortgages (sows ears sold as silkpurses)... the Parasite Club are creating huge white noise (see CNBC every day) that 'all is well' while the extort any value left ...wake up and smell the musical chairs 'mate'

Stormdancer's picture

You begin with "Which of you retards...." and then expect us to believe you wish us good luck? :)

Anyway...don't "bother" on my account.  I don't need luck because I've educated myself, developed a plan and got off my dead ass and executed.  I could be wrong and if I am I'll suffer the consequences.  I can handle that, I'm a big boy now.

If you look at the risk reward profile of my choices about the worst that can happen is I die well a fed pauper showering the grandkids with worthless shiny baubles.  And with all that soap I'll be a really clean pauper :).

cossack55's picture

Don't. Go away. Better yet, die.

scratch_and_sniff's picture

Take deep breaths (use your nose this time, not your mouth),the anger needs to be harnessed boy, why don’t you channel it all at once and learn how to write your name or something, nothing too ambitious though, i wouldn’t want you going nuts and biting your tongue off.

fiddler_on_the_roof's picture

Hahahahaha Silver bidding for Gold? ZH crowd will go over the edge if they believe in Silver. When Gold bursts out higher "soon", Gold will go into hiding. Silver is mostly a commodity since it was demonetized by all countries.

Also there is a risk that if Govts re-monetize Gold, you wont be able to convert your silver for even 9 oz of Gold

tmosley's picture

That's cute.  You think governments are the arbiters of reality.

Gold, silver, platinum, and palladium are money, because they have all of the characteristics of money.  Platinum and palladium have never been used as currency to my knowledge, but that doesn't mean they aren't money.  They are currently used as industrial commodities, and one of them is more expensive than gold.  

fiddler_on_the_roof's picture

Govt and big money will decide which monetary metal will become money. We, little people will decide nothing.
When silver and Gold was both money : ratio 15:1
After 1971 when both were in de-monetized. State : ratio 50:1
When only Gold is re-monetized. : ratio 150:1 ?

Transformer's picture

You really don't get it, do you?  the Evil Empire is on the ropes.  They are failing, their plans are failinig.  Regular middle of the road newspapers question the veracity of Obama's kill of OBL.  We the people are going to go back to being in control.  Like America was set up to begin with.  Did you know that the American revolution was started and carried out by 3% of the population?  Toward the end of the revolution, that number rose to 8%.  And sheeple like you just sat back and watched.

The thing is, this does not have to be a bloody revolution.  This revolution will be fought in a thousand venues, one of them being (and perhaps the most important) about real money.  It's a knowledge revolution.  When enough people wake up, "they" are finished.  and, we're just about there now.  Their game of domination and control COMPLETELY depends on the sheeple not knowing what is going on.  We've already passed the threshold.  More than half the people get their news from alternative sources, such as Drudge, blogs, Alex jones, Zero hedge.  They've already lost but have not given up yet.

So, you little people just keep on doing what you're told.  We Zero Hedgers will win the information war.

fiddler_on_the_roof's picture

Date: Sun Nov 23 1997 09:18
ANOTHER (THOUGHTS!) ID#60253:

Many wait for the next great bull market in gold to begin before they buy. Why buy now and lose interest or stock market gains? They will miss the greatest investment ever to come in ones lifetime! The powers of this world have already begun this motion. People of simple thought have but to buy physical gold and make low as the financial wars begin! You see, gold was cornered this year. It is done. No Central Bank will sell it's 50, 100, 200 million ozs gold when 600 million is needed! I ask you, how can currency price gold? Indeed, no price will work! You think any form of "paper gold" will stand this fire? Can we do battle with lions? When oil will not take currency without gold the havenots will not sit still!

"When a thousand hungry lions fight over one scrap of food, small dogs should hide with whats in their belly".

Transformer's picture

Or, they can go down to the coin store and buy a few more ounces of silver.

Ardent Spirits's picture

A short history lesson. America did not have a real revolution. Real revolutions are like the French Revolution or the ones currently being called 'Arab Spring'. The French Revolution went on for ten brutal years, including the Terror & all the rest. What America did was throw off the British yoke Government to Government. Our Government Allied itself to France, Government to Government, or we would not have won. If it comes down to Revolution over the admitted depredations of the Republican/ Wall St Kleptocracy the revolution will be the old fashioned kind, not a replay of our decidedly atypical 'Revolution.' The biggest player is the media. All wars are now fought in the media. Vietnam established that new Realpolitik. The battle is now over how many ignorant voters can be propagandized by the nonsense of the Tea Party movement as opposed to the voice of reason to be found in the alternative sources. The best minds in the field of Applied Psychology serve the Kleptocrats. It remains to be seen if they can continue to convince the Sheeple that shit is really chocolate ice cream. At least we know that the Kleptocrats way is slow poison for our suffering nation.

Stormdancer's picture

There is no risk free plan for navigating the future.  Or crossing the street for that matter.  I've done my homework as well as my God given capabilities have allowed.  I've developed a plan to address what I see as most likely outcomes.  I've purchased as many options as my meager assets will allow.

Ya rolls the dice, ya takes yer chances.  Life...glorious, unpredictable, challenging life.  And of course "On a long enough time line...."   :)

Transformer's picture

You're totally right about that.  I have friends who are not in silver and when we talk about it, they ask me,  "Well, how high do you think silver will go?"  And I tell to just pick a number, any number.  And then I explain to them that when the dollar is depreciating every day so that prices have to be reset, nobody will want it.  At that point silver won't be priced in dollars, just the opposite, everything will be priced in silver and gold.  So, you will be able to pick any number you want, cause silver will get to a point where it won't be for sale in terms of dollars.

michigan independant's picture

http://www.youtube.com/watch?v=GHyV9V-37zc&feature=related <----- fiat reading music

Overall I get the point they are not selling this time.

mayhem_korner's picture

We set the price for the silver we own. The death spiral that the banksters are trying to avoid:

Physical-paper spreads widen and correlate with margin hikes.  Physical-paper price decouples as market en masse recognizes that the Comex price can't clear physical holdings.  Comex price free falls as the paper price becomes meaningless, while the market reconstitutes around physical.

Hey, wait a minute!  This story is familiar...

USD devaluation widens and correlates with money printing.  Buying power and paper value decouple as market en masse recognizes that USD can't buy anything.  USD free falls as the fiat becomes meaningless, while the market reconstitutes around a new currency.

-in my sopwith camel

clymer's picture

Scratch_and_sniff.. I gotta tell you (and I only say this because I care)..

 

You post with all of the arrogance, haughtiness and pompousness of a well-heeled puke.

 

You betray your Irish heritage. I thought you were better than this.

 

resume trolling, inherited one. Some of us had to work to pay for our broadband.

scratch_and_sniff's picture

clymer, with all due respect, i find it hard to call it trolling anymore. Its like this, if my posts were polite and understated, they would either be ignored or junked anyway, even for asking moderate and discrete questions that dont tow the party line by a whisker; that in itself is trolling, its much worse actually.

The hardline intransigence of opinion, the deeply ingrained and disturbing paranoia of absolutely anythig, the naivety, rage and political aloofness is always “in your face“, and if you don’t mind me saying so, a little hard to take seriously all of the time. That’s why its fun to troll sometimes, its funny when people bite; shamefully I sit giggling like a little girl when I have better things to be doing. People get so angry because the issues are so subtle, clouded, but the underlying drivers are political - just not the kind of politics I am used to. I suppose if I am to take any responsibility for hurting anyone its because the lines here are badly blurred, this site does little to put the record straight; with some I am talking about investments, with others i am talking about revolution, the end of a nation and ideologies I am struggling with frankly.

Spare me the heritage crap too, generations of my family have been involved in struggle of one kind of another. You have no idea of the comfort you live in, you are worried about a bearded monkey debasing you’re currency while I had family dragged from they’re houses, shot in the face and butchered, had my house raided every other month by armed and twisted cunts backed by the state in a concerted attempt to BREAK people, not just keep them in check with silly news stations and misinformation, but turn them into spastics. Its not evil and oppression you lot are fighting, its fucking government incompetence.

I am obviously out of my depth here. For that matter I will stop posting (don’t cheer until I leave the room). All the best.

the misanthrope's picture

BTFD ? breasts, truly fabulous (size) D's?