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If The CME Hiked Gold And Silver Margins By 50% And Nobody Cared, Did A Tree Fall In The Precious Metal Price Suppression Scheme?

Tyler Durden's picture


Now that JPM is out of the picture, the last recourse of gold and silver price suppression is exchange margin hikes. Or was. The CME has announced, that as of close today, it will hike various gold and silver (and other metal) contract initial and maintenance margins by 50%.... And nobody cared. This means the CBs are well on their way to losing the imposed gold standard wars. Look for the USD to take a big step lower shortly as nominal values of everything do the inverse.This will naturally be promptly followed by a "sudden and dramatic deterioration in European conditions" as the EUR can not be far behind in the FX race to the bottom. 

From the CME:



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Fri, 02/18/2011 - 11:03 | 973959 quasimodo
quasimodo's picture

This is funny-to see them pissing into the wind.

Fri, 02/18/2011 - 11:08 | 973981 Drachma
Drachma's picture

Blythe fetish: golden shower

Fri, 02/18/2011 - 11:15 | 974013 Hulk
Hulk's picture

Actually, her fetish is Cleveland steamers...

Fri, 02/18/2011 - 11:26 | 974078 Turd Ferguson
Turd Ferguson's picture

As mentioned on the other thread, I wrote this on Wednesday evening. If you haven't already read it, I strongly suggest you do it now:

Fri, 02/18/2011 - 11:28 | 974094 bania
bania's picture


Fri, 02/18/2011 - 11:48 | 974189 Hulk
Hulk's picture

Excellent article Turd. Thanks...

Fri, 02/18/2011 - 12:25 | 974374 Confused
Confused's picture

As usual sir, excellent article. Thanks. 

Fri, 02/18/2011 - 14:25 | 975017 camoes
camoes's picture

We love the Turd!

That sounded nasty lolz

Fri, 02/18/2011 - 15:46 | 975298 sunnydays
sunnydays's picture

GREAT Article!  Thanks for linking that.

Fri, 02/18/2011 - 18:28 | 975778 chopper read
chopper read's picture

great write-up, TF.

Fri, 02/18/2011 - 21:04 | 976264 StychoKiller
StychoKiller's picture

Operating a toilet brush -- a small price to pay for domestic bliss! :>D

Fri, 02/18/2011 - 11:30 | 974097 More Critical T...
More Critical Thinking Wanted's picture


Fetish or not, did you guys notice the following:

Look for the USD to take a big step lower shortly as nominal values of everything do the inverse.

ZH has come dangerously close to admitting the previously unthinkable: that the real (global) value of commodities is decoupled from the USD's FX rate of the day.

So the weakening the dollar has little effect on global inflation, it has little effect on how much India, Russia or Europe pays for Oil, Sugar or Wheat when prices are exchanged to their currencies. Time to hide those "Bernanke kills babies!" posters and change it something more subtle and more factual, like "Global warming deniers are killing babies!".

It's a Captain Obvious moment for most, sure - but a big step for ZH towards sanity! :-)


Fri, 02/18/2011 - 11:36 | 974138 tmosley
tmosley's picture

Your problem is that you think the USDX is the best way to measure the strength of the dollar.  Might as well have an altimeter that only measures the height of the instrument above the floor of the plane its mounted on for all the good that does.

But hey, you say we can print forever with no consequence, and I TRUST you.

Fri, 02/18/2011 - 11:42 | 974167 Sophist Economicus
Sophist Economicus's picture


Sun, 02/20/2011 - 10:51 | 979408 More Critical T...
More Critical Thinking Wanted's picture


Your problem is that you think the USDX is the best way to measure the strength of the dollar.

LOL, funniest comment of the week: the dollar index is cited by Tyler all the time (whenever it drops), as proof of the weakness of the dollar, so it cannot be that bad :-)

But there's other metrics as well, such as trade weighted indices:

It is showing a very similar picture as the dollar index.

So you are wrong and you are in denial.


Fri, 02/18/2011 - 14:17 | 974985 Pool Shark
Pool Shark's picture

The US$ is the best looking horse...

At the glue factory.

Fri, 02/18/2011 - 11:57 | 974236 HoofHearted
HoofHearted's picture

I'm going to keep calling you out as the lousy, dirty Fedophile that you are.

When the USD loses buying power, of fucking course everything else goes up in nominal terms. What kind of an idiot are you?

So does that change the price in rubles or RMB or...? Yes, it does. The USD is still the "reserve" currency. When the reserve is useless, everyone is going to pile out of that trade and leave BennyBoy holding those green (non-biodegradable because of the lead-based ink) coupons. And what do they get into? Rice, sugar, corn, silver, gold, anything that cannot be printed. Because if they can't trust the reserve, what the hell else fiat will they trust? (To be sure, global crop problems only exacerbate the problem, but this isn't a "pick only one" type of question.)

Will you please try to use some of the critical thinking (that you claim) to work? Stop believing that you can think with what you sit on, asshat.

Fri, 02/18/2011 - 12:06 | 974271 EscapeKey
EscapeKey's picture

His "lee0326", er, "Lack of Critical Thinking" nickname is doublespeak.

He's a 100% approved tosser, who will manipulate figures as he sees fit, attempt to bury you in stats if you call him out on his figures, move goalposts as he realise he's losing an argument, and will never EVER let you have the last word - probably because he won't get paid if he does.

He's either a government disinformation agent, or a really, really sad case. Good thing no-one is buying his bullshit.

Fri, 02/18/2011 - 12:26 | 974364 Flakmeister
Flakmeister's picture

  I don't agree with MCT on everything, and he does enjoy in getting certain peoples face; but I will say that as far a poster here goes, it is very clear that he has given serious thought to most of what he writes. Moreover, unlike a lot of his detractors, he does make an attempt to back up what he says given the limits of our posting abilities. So flail away at each other, but realize that on some matters he is slowly but surely eating your lunch, at least from the view of this outside observer.

Fri, 02/18/2011 - 12:31 | 974417's picture

he is slowly but surely eating your lunch,

Ah, the Fed's true mandate is finally revealed!

Fri, 02/18/2011 - 13:41 | 974849 EscapeKey
EscapeKey's picture

Right, so EXCEPT for misrepresentation of information, cherry picking of data, obfuscation of the discussion, and moving goalposts, he most certainly has given serious thought to his argument, absolutely. The problem is that it's intellectually dishonest, and he knows it, but yet he still attempts to make it pass.

Fri, 02/18/2011 - 14:44 | 975098 Flakmeister
Flakmeister's picture

  No different than other side....his side just happens to be outnumbered on this blog...

BTW, I've never seen you make an argument backed with credible links. If the shoe fits wear it....

Sun, 02/20/2011 - 10:54 | 979416 More Critical T...
More Critical Thinking Wanted's picture

BTW, I've never seen you make an argument backed with credible links. If the shoe fits wear it....

I've never seen her (him?) do it either, there's only insults and innuendo.


Fri, 02/18/2011 - 12:56 | 974581 Flakmeister
Flakmeister's picture

For shits and giggles, let's assume that he is on a payroll... You are a fool if you believe that and not believe that the other side doesn't have its paid minions too...FWIW, I have a few theories about who the "other side" is.

Now with AGW, the IPCC don't have the cash to finance blog level trolls whereas the coal and oil companies have plenty to throw around...follow the money.  

Fri, 02/18/2011 - 13:33 | 974816 A Nanny Moose
A Nanny Moose's picture

..AGW, the IPCC don't have the cash to finance blog level trolls..


I wouldn't be so sure about that. There is always enough money to throw around the opportunity for a new tax arises.



Fri, 02/18/2011 - 13:42 | 974864 EscapeKey
EscapeKey's picture

LOL! "It's OK because the other side does it too."

You should be a politician.

Fri, 02/18/2011 - 13:52 | 974905 Flakmeister
Flakmeister's picture

Where did I say it was ok? It just is, and whatever I think is right, I can't change it. I just factor it in to the big picture.

I couldn't be a politician, I don't lie well enough. An advisor, perhaps.

Sat, 02/19/2011 - 09:22 | 977190 The Fonz
The Fonz's picture

If it is true that intelligence work is starting to be part and parcel of what a blog reader has to sort through all that the intelligence agencys will end up with is very cynical very clever readers that now understand how to sort out intelligence ops. In the long term I cannot help but think this will hurt the ability of those organizations to fool enough people to manipulate outcomes.

I am not so sure what I think of the average person having an intelligence operatives understanding of the world though. That might not be so fun lol.

Fri, 02/18/2011 - 12:24 | 974296 Flakmeister
Flakmeister's picture

  I'm no fedophile...

Do we agree that the situation is complex, i.e. the coupling of the dollar with commodity prices? I think that thinking of things in purely black and white terms is somewhat naive.

 I would strongly argue that what is occuring is the constructive interference between two underlying trends. The dollar is dying a slow lingering death while simultaneously the underlying world demand function is increasing. Throw in the wild card of agricultural production being affected by the weather, you have a perfect storm (pun intended).

Now I admit to being on the side that the recent weather extremities are related to AGW at some level. Again, to say that no AGW exists is faith-based denial, similarly, to blame everything on it is equally foolish.

I manage OPM people for my livelihood. My job is to best play the odds. My track record is such that it is clear that I "get" the underlying trend. Going forward you are more likely to succeed if you process all information and assign probabilities; e.g. if you think that AGW is part of the equation, you can only come to the conclusion that Ag. products will become more dear. The other factors only reinforce the conclusion...

Fri, 02/18/2011 - 12:39 | 974464's picture

Again, to say that no AGW exists is faith-based denial,


The IPCC and friends have been caught fudging data multiple times. And yet you have an unfounded faith that their lies reveal truth. What kind of nut does that make you, scientifically speaking?

Fri, 02/18/2011 - 12:47 | 974534 Flakmeister
Flakmeister's picture

   No need to be insulting...

I have a Ph.D. in physics with 20 yrs experience in academia along with 3 yrs experience on Wall Street in modeling CDO's, MBS, ABS etc... I also have been managing 8 figures for over 5 years... I get the numbers, read both sides and then decide what is correct. Just like a scientist.  

Fri, 02/18/2011 - 13:07 | 974685's picture

I get the numbers, read both sides and then decide what is correct.

How much weight do you give to the data coming from the confirmed liars at the IPCC?

Fri, 02/18/2011 - 13:15 | 974725 Flakmeister
Flakmeister's picture

About the same weight I give to the lies from the coal and oil company shills. Sort of a wash, eh? Also, I completely understand the concept of systematic errors and the difficulty of measuring them. I also know that statistical signifigant signals for new effects tend to be obscured by systematic effects until, with better data, you control those systematics.

Btw, care to comment on the article in Nature yesterday?

That is it...I have no desire to continue this discussion, as it is clear that you are now wasting my time. But it was fun to bitch slap you for a while.

Fri, 02/18/2011 - 13:40 | 974854's picture

That is it...I have no desire to continue this discussion, as it is clear that you are now wasting my time. But it was fun to bitch slap you for a while.


You're not only bad at science but you're a misogynist too?

Fri, 02/18/2011 - 14:16 | 974981 Flakmeister
Flakmeister's picture

Since I knew you would reply, I had to peek...

To an outside observer, you have no idea how lame you come across...Hell, my 14 yo son laughed at your comments....

Fri, 02/18/2011 - 16:27 | 975417 asdasmos
asdasmos's picture

Does 'More Critical Thinking Needed' have two accounts?

Sat, 02/19/2011 - 00:52 | 976801 Flakmeister
Flakmeister's picture

Check the registrations.... I have been posting as Flakmeister at various blogs for close to 5 years...Then again, I could understand your confusion, as we do tend to stick to rational arguments (again, I do not always agree) and not to blog thuggery as a number of the miscreants here do...

Fri, 02/18/2011 - 18:35 | 975810 chopper read
chopper read's picture

I sure hope it warms up more quickly because the past 1,000 years have been freezing compared to the 10,000 year average.

Much debate regarding 'climate change' legislation is driven by a paticular chart demonstrating a 'hockey stick' ramping in recent global temperatures.  However, prior to this we were known to have been in a 'mini ice age' during the time of the Napoleonic Wars and American Revolution (with temperatures having dropped from previously much higher levels).

In fact, it is important to note that the 'estimates' for much of the 'hocky stick' graph were never even remotely realized.  Global temperatures leveled and have actually fallen sharply by comparison in the most recent two years. 

The fact is, if the measurements can be trusted, we are currently near the higher end of our temperature range as it relates to the past 1000 years. Yes, the rise appears to be somewhat rapid and maybe even driven by human activity.  However, the more logical explaination to me right now is that this has possibly come about either naturally or as a result of more widespread advances in agriculture - with subsequent domestication and feeding of animals, as well as global population growth from increased food production, in general.

Considering the potential effects of assumed 'greehouse gases', it is then Methane (particularly from cows), not CO2, which could be considered the primary culprit.

 "Agriculture is responsible for an estimated 14 percent of the world's 'greenhouse gases'. A significant portion of these emissions come from methane, which, in terms of its contribution to global warming, is 23 times more powerful than carbon dioxide."

Assuming this is true, then why do global despots seek control of CO2 emissions rather than Methane?  Clearly, this provides for them opportunity to dismantle coal-fired power plants and other industry.  Further, it may even give them jurisdiction over our ability to exhale!

As an aside, we hear much talk about the depletion of 'non-renewable' resources.  If so, then will not these decreasing fossil fuel supplies already act as the self-corrections on human CO2 emissions that are sought by our global puppet leaders?

Further, has not life on earth already coped quite successfully with much higher temperatures in the past, anyway?  Will not receding glaciers open up more farmland in the Northern Hemisphere?

And will not more CO2 create more plant life and ultimately more oxygen in our air?  I like oxygen, don't you?

 Given all of the facts, is this worth handing over even more power to unelected bureaucrats who are clearly supported by a shadow government seeking to dismantle our Constitutional Republic?

At this point, I think not.

Fri, 02/18/2011 - 19:20 | 975969 Flakmeister
Flakmeister's picture

  Wow, a reasonable post, at least by the standards of the hedge...

I don't want to get in pissing match as I am out of town with the kids and cannot really followup:

1) Methane is a nasty greenhouse gas, however, it tends to be oxidized rather quickly and we really can't do much about it. The worry about Methane is that if permafrosts start to thaw, there a non-negligible chance that large amounts of methane that is known to be trapped could be released on a short time scale (compared to the known methane cycle) and cause a positive feed back.

2) Yes, the earth has coped very well in the past with higher average temperatures. We were not around at the time,  e.g. if the sea level was 18 m higher (for which there is strong evidence from  recent Antarctic ice core studies),  you would find a pretty significant number of our civilizations great cities would be underwater.

3) The studies that I have seen suggest that burning the liquid oil that remains will not tip things over. The concern is the coal that was laid down in the Permian era; that was when the earth self-sequestered a vast amount of carbon. Over a period of 200 yrs, we are releasing what was sequestered over a period of ~100 million years....

3) Receding glaciers will not free up land. Northern Canada does not have the top-soil that exists to it's south. You must also take into account those areas that are lost as well.  

Gotta go feed the kids....

Sun, 02/20/2011 - 11:07 | 979426 More Critical T...
More Critical Thinking Wanted's picture


I would also challenge this one:

Global temperatures leveled and have actually fallen sharply by comparison in the most recent two years.

It's pure denial as 2010 is shaping up to be the hottest year on record:

And that's scary, considering the solar irradiance graph:

I.e. temperatures are rising despite 2009/2010 having been a solar minimum ...

There's also record low ice in January 2011 in the Arctic:

His argument, paraphrased: 'do not believe your own damn lying eyes'.


Fri, 02/18/2011 - 14:10 | 974959 jus_lite_reading
jus_lite_reading's picture

While I agree with you on this point,

 I would strongly argue that what is occuring is the constructive interference between two underlying trends. The dollar is dying a slow lingering death while simultaneously the underlying world demand function is increasing. Throw in the wild card of agricultural production being affected by the weather, you have a perfect storm (pun intended).

I have already concluded that the scenario you so aptly present is one in which the only outcome is a global war and we are simply experiencing a prolonging of the inevitable. What we have occuring now is buying of time so someone else can take the fall which is fast approaching. As someone in physics, you can appreciate the value of accelerating mass such as a black hole- it's a mathematical impossibility to continue for 9 more months.



Fri, 02/18/2011 - 14:30 | 975046 Flakmeister
Flakmeister's picture

   War is a likely outcome, definately at some level. Are China and US able to come up with a sharing arrangement? Based on the US USSR experience and the spectre of MAD, I tend to think that something will be worked out that avoids returning us to the neolithic era.....

I agree, there will be blood...

Fri, 02/18/2011 - 11:31 | 974112 Dr. Richard Head
Dr. Richard Head's picture

I resent that being from Cleveland.  Shit hole town that it is.

Fri, 02/18/2011 - 11:37 | 974145 MarketTruth
MarketTruth's picture

Cleveland is a paradise... as compared to Detroit.

Fri, 02/18/2011 - 11:40 | 974159 Dr. Richard Head
Dr. Richard Head's picture

That's like saying the Dollar is more sound than the Euro. HA.

Fri, 02/18/2011 - 11:51 | 974213 Hulk
Hulk's picture

My apologies to the good folks of Cleveland...

Fri, 02/18/2011 - 11:20 | 974048 cbaba
cbaba's picture


Paper is paper,

paper silver , paper gold thats all they can offer, we will BURN their papers..

Fri, 02/18/2011 - 11:06 | 973965 Ragnarok
Ragnarok's picture

If your standing for delivery you have to put your cash up and you don't give a shit about margins, but maybe the speculative shorts do.

Fri, 02/18/2011 - 11:15 | 973979 jus_lite_reading
jus_lite_reading's picture

Stand for delivery, buy all the physical you can, go to flea markets, antique shows etc!

When you see these headlines: "Geithner says the global economy is in better shape than its been in last 2 to 3 years" then you KNOW something is wrong... hold tight boys.

Fri, 02/18/2011 - 11:39 | 974136 Dr. Richard Head
Dr. Richard Head's picture

Something big is indeed coming.  I recall the Bernanke was squaking the loudest about sound fundamentals in the housing market at the precise moment the facade was breaking down.  When these fucks are confident that all is well is when my silver senses start tingling.

Good news is that all of the screaming I have bene doing to my fellow plebes has definitely been vindicated by the fiat value of these metals.  People that dismissed these ramblings before are now asking me questions.  Fun indeed.

I know I got bashed on here for this statement before, but I have been pretty successful in cleaning out pawn shops (aka Ghetto Mints) of their silver coins below melt value.  I feel like I am a mexican merchant negotiating with them, but it's part o' the fun. 

Fri, 02/18/2011 - 12:01 | 974258 stormsailor
stormsailor's picture

you can make a fortune at estate sales buying up the silver services. 7 or 8 hundred bucks for about 20lbs of sterling.

Fri, 02/18/2011 - 14:17 | 974970 jus_lite_reading
jus_lite_reading's picture

I have been driving out to PA to flea markets buying up silver and gold for pennies on the dollar. I carry a test kit to confirm the purity. You can find silver items for less than 1/4th the spot price if you kow how to bargin.

The point is, as with you, those who have questioned my sanity, are now questioning their own!

Fri, 02/18/2011 - 11:06 | 973966 fuu
fuu's picture

Why is JPM out of the picture? Did backwardation kill Blythe yesterday?

Fri, 02/18/2011 - 11:14 | 974011 txapela
txapela's picture

well, after yesterday they must be thinking that they're impotent to stop this shit. so if they can't scare the longs that won't stand for delivery then maybe they can hike the rates enough to scare them.


if that doesn't work, they're shit out of luck. Hello: Executive Order 6102 v2.0

Fri, 02/18/2011 - 11:19 | 974036 alien-IQ
alien-IQ's picture

another Gold recall act may be the one thing that gets Americans off their ass to protest the fraud.........but then again...maybe not. I'm just taking a stab at optimism here.

Fri, 02/18/2011 - 11:42 | 974154 MarketTruth
MarketTruth's picture

Gold recall is rhetoric bullshit. In the 30's gold was literally money. As such, the Fed could not print money, they had to have gold too. Now that there is zero gold-back dollars when Nixon ceased that link, the Bernak can print endless until every computer electron is sacrificed without the need for gold. As such, the Bernak only needs electrons for his computer and has zero need for physical gold to 'print' dollars.

Fri, 02/18/2011 - 11:50 | 974206 patience...
patience...'s picture

True for now. But if the gold standard was re-implemented, gold could be recalled since the dollar was backed by gold.

Fri, 02/18/2011 - 12:39 | 974476 Bendromeda Strain
Bendromeda Strain's picture

They are certainly not going to mess with legal tender because of a force majeure. Is the printing press broken? Chopper throw a blade? Until that happens, metals are a "sideshow - nothing to see here" except to those who have been predicting this all along by buying.

Fri, 02/18/2011 - 12:37 | 974453 Bendromeda Strain
Bendromeda Strain's picture

And how many people do you think would comply this time around, hmm? The Govvy sells it to you one week and outlaws it the next? FDR had "goodwill" from the sheeple, the crew holding physical PMs today would rather hoist the black flag and spit on their hands. Believe it.

Fri, 02/18/2011 - 11:06 | 973967 jus_lite_reading
jus_lite_reading's picture

I was going to ask why you didn't report this earlier... and then you did.

They know that there is going to be some earth shaking volatility in the next few weeks as the whole financial system collapses so this margin hike may help to buy them a few more days.

Either way, the world is going to war over money very soon.

Fri, 02/18/2011 - 11:13 | 974005 Oh regional Indian
Oh regional Indian's picture

Just_light, you are right. Extreme volatility coming. And so is that 3 letter word, war.

Actually here, but just like the speech in my linked post, no one, no one can call the game for what it really is. If th eUS has been runnign under emergency powers since 1933 and that fact comes out for realz, what does that do to the whole global financial/legal/trading structure?

The scam is of humongous proportions. It will be undone in an explosion.


Fri, 02/18/2011 - 11:24 | 974039 jus_lite_reading
jus_lite_reading's picture

I concur. Not so sure about the EP act of 1933 but whatever the case, these fake markets are about to implode. Buy silver. Like I predicted on Monday, silver going to $40+ in 3-4 weeks. Seems, we may have that much sooner.

ORI- one more thing: If I was a Greek, Irishman et al, I'd buy all the gold and silver I could before those banks implode.

Fri, 02/18/2011 - 16:16 | 975395 Oh regional Indian
Oh regional Indian's picture

jus lite, if any statement in Trafficant's speech was blatantly or provably false, he would be in the dock for perjury int he house, no?

So, he spoke the truth, it is on record.

And yes on SIlver, I'm right with you.


Fri, 02/18/2011 - 11:05 | 973968 Quinvarius
Quinvarius's picture

Right on GLD/SLV OPEX.  Who could not have predicted that?

Fri, 02/18/2011 - 11:07 | 973973 ZackAttack
ZackAttack's picture

Complete coincidence, I'm sure.

Fri, 02/18/2011 - 11:06 | 973969 Azannoth
Azannoth's picture

Who's stupid enought to buy PMs on margin anyway ?

Fri, 02/18/2011 - 11:07 | 973975 Gene Parmesan
Gene Parmesan's picture

Circling the drain...

Fri, 02/18/2011 - 11:08 | 973977 Caviar Emptor
Caviar Emptor's picture


Bahrain: Forces Open Fire on Mourners


Fri, 02/18/2011 - 11:22 | 974055 jus_lite_reading
jus_lite_reading's picture

This is a signal of desperation... when things get out of control for the powers that were.

Fri, 02/18/2011 - 11:08 | 973980 overmedicatedun...
overmedicatedundersexed's picture

crimex silver is spitting in your eye..



Fri, 02/18/2011 - 11:09 | 973982 Hulk
Hulk's picture

Desperation now palpable...

Fri, 02/18/2011 - 11:10 | 973987 alien-IQ
alien-IQ's picture

Next outright ban on purchasing anything but shorts in the PM market....

their desperation is palpable.

Fri, 02/18/2011 - 11:21 | 974051 chubbar
chubbar's picture

They can't pull that shit anymore now that we are in the age of the internet. Approximately 60 seconds after that announcement there will be 100 articles outlining why this is happening and silver will disappear off the shelves of the retailers, everyone with a contract will stand for delivery and Comex closes.

Why would anyone other than a gov't entity short into a developing shortage with the printing presses going full out?

Fri, 02/18/2011 - 11:10 | 973988 Dick Darlington
Dick Darlington's picture

Silver spiking higher, over 32 now...

Fri, 02/18/2011 - 11:11 | 973989 flaunt
flaunt's picture

This reeks of desperation.

Fri, 02/18/2011 - 12:16 | 974330 HoofHearted
HoofHearted's picture

And as everyone sees the desperation, more people are emboldened to do what you and I have been doing...another 200 silver maples came through the mail last week...

Fri, 02/18/2011 - 11:11 | 973992 Bay of Pigs
Bay of Pigs's picture

The CME is a joke. Grasping at straws.

Fri, 02/18/2011 - 11:12 | 973993 EscapeKey
EscapeKey's picture

Silver just crossed $32, it almost seems as if this hike had the exact opposite of the intended effect - it confirmed desperation, causing silver to spike.

Fri, 02/18/2011 - 11:17 | 974020 SWRichmond
SWRichmond's picture

Blood in the water.

Fri, 02/18/2011 - 11:12 | 973996 tmosley
tmosley's picture

Holy shit!  This is HUGE news.  Speculators who didn't intend to stand for delivery should have rolled over one and all at a hike like that.  As an above commenter noted, this means that there will be a LOT of people standing for delivery.

This probably means we are about to see the moonshot.

Let's see if I can be made to eat my words.  I really want it to go back down, as I have a larger than average amount I want to put into silver this month that isn't available to me until Monday.  Being able to buy much more than I think I will be able to would make those words of mine sweet and delicious.  

Fri, 02/18/2011 - 12:29 | 974405 dark pools of soros
dark pools of soros's picture

buy at any price - most longs aren't thinking of selling any of their stash at least until late 2012 or $70-$100

Everyone is going to run the last days of Obamanomics till the finish line 

Fri, 02/18/2011 - 18:09 | 975736 baseball13
Fri, 02/18/2011 - 11:13 | 973997 alien-IQ
alien-IQ's picture

And in response to this news...silver spikes above $32!!! Can you say "MASSIVE FAIL"...LOL!!!!!!!

Fri, 02/18/2011 - 11:13 | 973998 watchingdogma
watchingdogma's picture

The excitement is killing me - I hope I don't stroke out before I can cash out.

Fri, 02/18/2011 - 12:24 | 974373 HoofHearted
HoofHearted's picture

Cash out my ass. It's only now hit $32.50. Wait to cash out when you can get better stuff than FRNs for it.

By the way, this means I'm definitiely picking up that AK-47 this weekend. Or maybe an AR-15. In any case, we all better be prepared.  

Fri, 02/18/2011 - 18:37 | 975822 chopper read
chopper read's picture

exactly, silver will be money, but not until it has been defended against the chaos which is coming.

Fri, 02/18/2011 - 11:13 | 973999 spartan117
spartan117's picture

And look at silver rocket higher.

Fri, 02/18/2011 - 11:13 | 974004 lieutenantjohnchard
lieutenantjohnchard's picture

patriots sitting on cash waiting for supression schemes are stepping up and taking delivery.

Fri, 02/18/2011 - 11:16 | 974018 txapela
txapela's picture

lol. you give hedge fund too much credit.



Fri, 02/18/2011 - 11:22 | 974059 tmosley
tmosley's picture

Anyone who acts to tear down this corrupt system is a patriot in my book.  Hedge funds and welfare mammas included.

Don't think that means that those who corrupted the system get a free pass.  The banks can, should, and will have their higher ups torn to shreds by angry mobs at some point, unless they flee the country soon.

Fri, 02/18/2011 - 11:47 | 974186 lieutenantjohnchard
lieutenantjohnchard's picture

lol. hopefully you don't think by patriots i meant hedge funds. i meant the average fella or lady that is taking delivery of physical against the schemers.

Fri, 02/18/2011 - 11:13 | 974008 Caviar Emptor
Caviar Emptor's picture

Reports of lots of casualties in Bahrain after forces open fire on mourners

Fri, 02/18/2011 - 11:15 | 974014 chubbar
chubbar's picture

Excellent news. Increasing margins just encourages taking delivery. Why put up 50% of purchase price and risk a no delivery for  2-1 leverage? Bring it up to 100% and let's empty those fucking vaults over there at the Comex! We are approaching the moment of true price discovery for PM's.

Fri, 02/18/2011 - 11:27 | 974083 tmosley
tmosley's picture

FYI, they raised margin requirements BY 50%, not TO 50%.

Still, a huge move, and leveraged speculators should be fleeing now, but they aren't.

Fri, 02/18/2011 - 11:17 | 974019 Caviar Emptor
Caviar Emptor's picture

Follow developments in Bahrain today as live ammo being used on mourners, protesters, chaos setting in

Fri, 02/18/2011 - 11:17 | 974022 Caviar Emptor
Caviar Emptor's picture


Fri, 02/18/2011 - 11:17 | 974023 Caviar Emptor
Caviar Emptor's picture


Fri, 02/18/2011 - 11:21 | 974056 Hondo
Hondo's picture

I find it funny that they keep raising the margin on commodities but Greenspan and The Bernake refuse to use margins to control market speculation......if one remembers AG said they wouldn't work but in the acutal minutes of the FOMC he said they would work extreamly well.

Fri, 02/18/2011 - 11:26 | 974081 EscapeKey
EscapeKey's picture

Well, it's pretty easy, actually. Just ask yourself; "would this be beneficial to the big banks".

If the answer is "yes", they'll do it.

Fri, 02/18/2011 - 11:30 | 974110 jus_lite_reading
jus_lite_reading's picture

Of course, they have to say that. If they admited margin requirements were for the purpose of price control, then well... we all know how this ends.

Fri, 02/18/2011 - 11:21 | 974058 BeerGoggles
BeerGoggles's picture

The margin hike is EOD - so it will fall at EOD

Fri, 02/18/2011 - 11:32 | 974119 jus_lite_reading
jus_lite_reading's picture

Harry Wanker reincarnate?

Remember my $40-$45 silver call in a few weeks, boy

Fri, 02/18/2011 - 11:22 | 974061 Scottj88
Scottj88's picture

50$ Silver by April


Starting to think it could be conservative with the house of cards that is about to blow over to a gentle breeze...

Fri, 02/18/2011 - 11:23 | 974065 bullchit
bullchit's picture

Somewhat OT....Old monk in Thailand collected donations in cash and gold to be given to the government on his death, to go towards the poor.

The $4+million would have been a nice surprise....not as nice as  the 12.5 tonnes of gold that went with it. (12.5 tonnes) :-O.


Fri, 02/18/2011 - 11:51 | 974214 william the bastard
william the bastard's picture


You literally have no idea what you are talking about.

You somehow think that the dollar gives gold and silver value.  Your thinking is totally backwards.

Fri, 02/18/2011 - 11:25 | 974074 steve from virginia
steve from virginia's picture

First: metal specs be careful of what you wish for. Any dislocation that removes the current currency regime is going to leave you begging on the street. Gold/silver won't have much or any value at all.

Second: what is the CFTC supposed to do? There is silver mania and hoarding the consequence is large number/size of paper positions. CFTC is being (somewhat) responsible pretending to keep the paper gold/silver Ponzi schemes under some kind of control.

Third: a lot of people seem to think the metal markets are 'one way, only'. Would you like to meet my friend, "Mr. Real Estate"? He was supposed to do nothing but grow, too.

Fourth: any talk of an official or unofficial US or OECD gold or silver 'standard' or metal- backed- currency is nonsense. Gold/silver are not currencies, rather they are entirely speculative investments (gold) or 50/50 speculative and industrial (silver). Any commodity whose value is set by credit limits cannot be any less speculative than the credit is itself.

In other words, gold/silver are derivatives for finance credit. Not currency which is a derivative of economic output. Or entropy, if you like!

Fri, 02/18/2011 - 11:30 | 974100 tmosley
tmosley's picture

You literally have no idea what you are talking about.

You somehow think that the dollar gives gold and silver value.  Your thinking is totally backwards.

Fri, 02/18/2011 - 11:40 | 974152 Snidley Whipsnae
Snidley Whipsnae's picture

Looks like the EE is concentrating on gold now... Trying desperately to hold it under $1390.

EE short fingers to fill holes in the dyke.

Fri, 02/18/2011 - 12:10 | 974289 yellowbr
yellowbr's picture

Something is suppressing gold currently. It just won't move...

Fri, 02/18/2011 - 11:39 | 974149 Womb Service
Womb Service's picture

HAHA. The trolls are having less and less effect. Just like the margin hikes. How's that CIA internship working out for you, douche bag?

Fri, 02/18/2011 - 12:00 | 974251 Variance Doc
Variance Doc's picture

If you had two brains, you would be twice as stupid.

Fri, 02/18/2011 - 16:02 | 975346 SilverRhino
SilverRhino's picture

>> Gold/silver are not currencies, rather they are entirely speculative investments (gold) or 50/50 speculative and industrial (silver).


Fri, 02/18/2011 - 11:26 | 974079 yellowbr
yellowbr's picture

and again, no copper.

what a bunch of retarded hypocrites.

Fri, 02/18/2011 - 11:30 | 974102 Doeko
Doeko's picture

Not sure what you're all getting at. Margin applies to both long and short positions.

Fri, 02/18/2011 - 11:49 | 974195 unky
unky's picture

are you gay? the persons with short positions have unlimited, i repeat unlimited, amounts of credit backed by the fed if necessary

Fri, 02/18/2011 - 11:31 | 974111 daybyday
daybyday's picture

please stop bitchin about margin increases...we need them to control overleveraged assholes as the price climbs and volatilty rises...and risks of deficits appear...silver moves at 5k every dollar spreads are getting wider as the price climbs...when dick heads that trade this stuff with 5k in there account we need this to protect our asses from you over leveraged jack offs going deficit on the short and long side....OMAB!!!!!!!!!!!!!

Fri, 02/18/2011 - 11:42 | 974164 william the bastard
william the bastard's picture

You can't have red meat bubble without leverage yo.

Fri, 02/18/2011 - 12:17 | 974340 A_MacLaren
A_MacLaren's picture

Explain that to the Tulip mania.

Fri, 02/18/2011 - 13:51 | 974907 h3m1ngw4y
h3m1ngw4y's picture

a lot of leverage in the tulip mania. there were even options written on tulips. modern banking wasnt invented in the us

Fri, 02/18/2011 - 11:36 | 974140 37FullHedge
37FullHedge's picture

Things are a mess, Clearly they are concerned over commodities, The inflation in everything has just gone crazy,

I have noticed a big change as of late, The BOE indicating IR hikes in May, The ECB a little about rate hikes listed on ZH, This move by the Comex, The elite are moving and anyone thinks the elite cant pull the rug on commodities best be carefull, ZIRP is the driver and even talk of exiting ZIRP will do the trick nice, Watch the MSM over the next few weeks, It will all be about inflation and the need to tighten and such like, A MSM blits on the subject should do the trick,

Failing a downward price trend in commodities by talk then actions will start in the IR Hikes,

Everyone is bullish on commodities at the moment so thats a real thing indicating a market top,

I am bullish on Silver but a test of $20.00 may easily be on the cards if the boys decide to do whatever it takes to stall things, The backwardation in Silver the boys arnt going to like that.

Just be carefull the forces of the elite must never be underestimated.

Fri, 02/18/2011 - 11:45 | 974183 Snidley Whipsnae
Snidley Whipsnae's picture

Margin hikes have not stopped silver from blowing through $32, but you believe that a little jawboning about interest rate hikes will?

Get real. Everyone knows what is going to happen if the Fed raises rates... total collapse in several US asset classes...In addition, Ben would be admitting that he was wrong about QE.

Fri, 02/18/2011 - 12:10 | 974291 37FullHedge
37FullHedge's picture

I recall in the middle of the credit collapse and the Fed stating they will do whatever it takes to deal with it,

Lets be honest two years later the Fed and the G20 followed through we got inflation and bags of it.

The problems in Egypt and such like I am sure the elite are concerned and its the overshooting of the inflation showing up bigtime,

The Margin hikes worked first time, It got a good 10% correction and correct its not worked now, This will make them change course.

I am sure the Fed wont want to raise rates for the reasons you state, Failure to curb the food inflation and such like will too blow things up,

I just see the jawboning move the next step, I recall the BP oil spill, After the $20bn payoff the bad news just stopped, Its a powerfull tool jawboning.

Will the Fed raise rates? It will if it has too a 0.25% hike will send a strong message and not collapse everything.

Fri, 02/18/2011 - 13:29 | 974783 Bendromeda Strain
Bendromeda Strain's picture

One problem with your thesis - those standing and accumulating don't care. They are macro investors at this point, and welcome the PTB removing leverage from the price discovery. Nobody smart sells physical based on jawboning, and most buyers of size are smart, it's self evident.

Fri, 02/18/2011 - 12:22 | 974368 Pegasus Muse
Pegasus Muse's picture

If they even start jawboning about an interest rate hike think what it will do to RE market.

Can the government finance its debt if the Fed increases rates?

Fri, 02/18/2011 - 12:37 | 974459 37FullHedge
37FullHedge's picture

I dont know how to paste things, Look at Just now they have put a link on the WSJ about Andrew Sentance jawboning about inflation, In todays paper.

Its just me I dont think they have a choice in the matter.

Fri, 02/18/2011 - 11:39 | 974151 william the bastard
william the bastard's picture

In terms of leverage controlled it's still a tiny absolute number. The margin is no where near any point of pain and there's what? Some 95% of the spread left to close before full payment? The EXs will walk this up untill the specs start to flinch.

Fri, 02/18/2011 - 11:42 | 974157 Kaiser Sousa
Kaiser Sousa's picture

if i said it once ive said it a thousand times....









........('(...´...´.... ¯~/'...')


...........\.............. _.·´







Fri, 02/18/2011 - 11:50 | 974203 william the bastard
william the bastard's picture

That was amusing the first 40 times you posted it-as though it's never been seen elsewhere. Now? Not as much

Fri, 02/18/2011 - 11:56 | 974227 Kaiser Sousa
Kaiser Sousa's picture

william -

a battle cry is not meant to b amusing...nor is the symbol of resistance...

u dont wanna c it then dont look...

politely i say to u fuck off....

Fri, 02/18/2011 - 12:49 | 974382 Pegasus Muse
Pegasus Muse's picture

KS, you need to double up.  Add the other hand.

Fri, 02/18/2011 - 13:30 | 974797 SRV - ES339
SRV - ES339's picture

KS... it may just be time for the big "V" instead!

Fri, 02/18/2011 - 12:03 | 974263 gwar5
gwar5's picture

I think it's great. I copied it this time so I can paste it somewhere.

Fri, 02/18/2011 - 12:16 | 974327 darkhorse007
darkhorse007's picture


Fri, 02/18/2011 - 11:53 | 974217 gwar5
gwar5's picture

This is why we love you Tyler. ZH is like looking over the enemy's shoulder while smirking.

Getting a heads up the inflection points and market decoupling signals is one thing, but knowing what Valdimort's likely reaction is going to be is priceless. It's all good.

Silver well north of $32 now. James Turk: "This short squeeze in silver, could be the 'big one'." 

Fri, 02/18/2011 - 11:52 | 974218 Glasgow Gary
Glasgow Gary's picture

Watch out, folks. If this is not the big one, this is the beginning of the big one. Currency, bonds, confidence, manipulation. This situation contains it all. Very exciting. But look for stress in the following areas: silver producer stock prices going weak if they have hedged too much. Also, what about CME? They can't be innocent here. Puts on CME.



Fri, 02/18/2011 - 13:33 | 974814 Bendromeda Strain
Bendromeda Strain's picture

Supposedly, silver miners have been prescient enough not to get sucked into hedging this time. Those who get silver as a by product of mining other core elements have been more willing to hedge. Shouldn't be much of an issue for those looking to invest in silver shares.

Fri, 02/18/2011 - 11:55 | 974225 nontaxpayer
nontaxpayer's picture

OT But I just had an epiphany...OMG...

China encouraging her citizens to buy gold alongside herself...not only do they want to be the richest nation and rule the globe, but chinese citizens will be top dawgs everywhere. OMG!

Fri, 02/18/2011 - 13:37 | 974833 Bendromeda Strain
Bendromeda Strain's picture

Don't know about that, but it will certainly make them more mobile in a global sense. Globile?

Fri, 02/18/2011 - 13:43 | 974869 SRV - ES339
SRV - ES339's picture

Better late than never ntp (no offence)... the end, end game has been PMs for many years... the real power has been (very) quietly accumulating for years (oil for gold?).

Today's prices are very low...

How much longer... I have no idea, but I'm all in, and waiting patiently.

Fri, 02/18/2011 - 18:15 | 975744 baseball13
baseball13's picture

just now you figured that out?...don't personally know any Chinese do you? They think in the long-term...

Fri, 02/18/2011 - 11:57 | 974232 Futurist
Futurist's picture

Wondered what the spike in price was. Doesn't raising the margin normally cause the price to fall? Ooops! $32.18 and climbing last I looked... Will this margin rise be the equivalent to raising the price of deckchair tickets on the Titanic after it hit the iceberg, a total irrelevence to ongoing events? Hope you have booked your place on a precious metals lifeboat with something real and not a paper promise.

Fri, 02/18/2011 - 12:17 | 974309 I Am The Unknow...
I Am The Unknown Comic's picture

check out today's POMO results:  bid to accepted ration of 5.59.  Historically such high number correlates with lower stock market close.  I wouldn't be suprised if at least one of the PDs put some of this fresh POMO cash to work pressuring PMs, but even I (PM bull) am stunned by silver's performance yesterday and today.  If there is anything but profit taking standing between here and $33, I don't know what it would be...given that increased margin requirements and stock options expiry (GLD, SLV et al) seem to be unable to stop the rise.  It is so beautiful to witness.  I've reduced my hedge position and have gone longer PMs.....(this is where I usually get burned!).  Anyway, congratulations to all my fellow ZH PM bulls and I hope you are enjoying the ride as much or more than I am.    

Oh, and a special shout out and "thank you" to Turd.  I vote we rename yesterday from Thursday to "Turdsday."  What do you think?

Fri, 02/18/2011 - 12:22 | 974363 gabeh73
gabeh73's picture


I don't dismiss the viewpoint 37fullhedge presents: I'm 40% invested in silver now. I got hit hard during the the summer of 2008.


However, I think things are a little different this time. (positive real interest rates existed for many many months before the last big commodities pullback and it came with a huge thunderous crash in housing....should have seen it coming).


Volckers commodity crash was transparent as all get out...hiking fed funds rates sequentially past 10,12,14,15 percent

It takes more time to move from expansionary policy to contracting...I think the current moving is going to keep going for at least a month or two.


I should be 100%long silver instead of 40%...I'm just hoping for a pullback and that mean I probably wont get it. 

Fri, 02/18/2011 - 12:37 | 974458 truont
truont's picture

Writhe and squirm, you CME fockers!

Let this be our anthem:

Check out the lead singer's silver outfit, the demolition of a bank, and the burning of fiat money.  All in one great, internationally televised Grammy Award show....

They must have inspired somebody, judging by silver's response to predictable CME margin req hikes.

Fri, 02/18/2011 - 14:33 | 975018 Daphneisfedup
Daphneisfedup's picture

How do I interpret these new margins?  It looks like a typical silver contract for 5000 ounces has a 1215 margin, but that would be less than 1% of the value.  I was thinking the margins were more than that - more like 10%.


Added: here's the link to an older post on margin hikes - 8775 is quoted as an initial margin for a spec trader.

Fri, 02/18/2011 - 14:52 | 975130 Spigot
Spigot's picture

Let's all be reminded that COMEX writes the rules, and as in the days of the Hunt Bros they can simply increase margin to 100%, and then forbid buying, leaving only selling as the alternative. And if its a matter of saving their masters, COMEX will do whatever it takes to destroy those attempting to take delivery if that means delivery destroys its masters...

unless other powers that be have forewarned them from doing such at the expense of, say, total financial armagedon.

Jus' sayin...

Fri, 02/18/2011 - 15:02 | 975156 Daphneisfedup
Daphneisfedup's picture

Well, I looked on the CME website and found the initial margin on their "Outright margins" list for spec traders for all tiers is $11,138.  It was $6750 until Nov 9 of last year.  I don't know if this margin is going up or not.

The margins shown above are "intra spread" margins.  Anyone know what that means, or all the tiers?  I found the CME website to be clear as mud on those things.

Fri, 02/18/2011 - 15:05 | 975173 Spigot
Spigot's picture

But the fact that POS and POG rose after the announced margin increases, is indeed a yummy event :-)

Fri, 02/18/2011 - 19:46 | 976043 Buck Johnson
Buck Johnson's picture

As I stated before, we are going to have a bad 2011.

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