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Jim Rickards On Silver Margin Changes, Peter Schiff On A New World Gold Standard
A couple of luminaries share their perspectives on recent developments in the precious metal space. First, we have Jim Rickards sharing his thoughts on what today's Comex margin hike means for trading. And second, and just as important, is Peter Schiff, who grades WB president Robert Zoellick's call for a new gold standards, and its implications for the future. Both are as always insightful and enlightening.
Jim Rickards - Three’s Company, Silver Margin Change
There's been a lot of buzz about today's price action in gold and silver. Beginning with the Monday push upwards based on the Zoellick op-ed in the Financial Times, the market surged upward through most of the day today and then hit a serious air pocket with gold falling 2% and silver falling almost 5% in a short period of time late in the trading day.
On a technical basis, there's nothing surprising about that; we've seen similar moves before and I expect to see them again. The overall trend has been upward with higher highs and higher lows. The market seems to find a strong bid at progressively higher levels even after sharp corrections. Nothing too disturbing there and nothing to indicate that primary trends are not still intact.
What was noteworthy was the catalyst for the pullback, specifically an increase in margin requirements for silver futures contracts. There was no comparable change in gold futures margin but as often happens in markets there was instantaneous contagion from silver to gold notwithstanding the different circumstances. Again, no surprise that the markets correlate to a great extent even when the news only affects one market or the other.
This is a pointed reminder to the readers and listeners of King World News and something we have discussed before. Most markets consist of two parties, the buyer and the seller. But in futures markets there's a third party in every trade which is the exchange and more specifically the rule making bodies and margin setting panels on each exchange. They act not in the best interests of buyers or sellers but in the best interests of the exchange itself and its statutory duty to maintain orderly markets. Of course, the word "orderly" can be in the eye of the beholder. What may be an "orderly" price spike to a long may be a "disorderly" rout to a short. Either way, the exchange has the last word. They have many tools at their disposal. They can increase initial margin (what you put up when you open a contract) increase the frequency of variation margin (make you post intra-day instead of end of day) and require "trading for liquidation only" which means longs can go short and shorts can go long but no one can expand a position or increase the open interest. Finally, an exchange can suspend physical delivery and allow offsets and rolls only. All of these rules have been invoked many times and will be again.
And Peter Schiff:
On Sunday, World Bank President Robert Zoellick wrote a remarkable article in the Financial Times of London. (FT subscribers, click here to read. Others, click here for a summary.) He called for a renegotiation of the global monetary order and - incredibly - the introduction of a new gold standard. In response, gold broke $1,400/oz on Monday.
This is a tremendous breakthrough for gold investors. For the head of the World Bank to make such a statement is unheard of in modern times. Among top bureaucrats and their economist friends in academia, the gold standard has always been a taboo - mostly because it prevents governments from using the "inflation tax" to finance military expeditions and entitlement programs. So, for such a high-ranking official to publicly express support for gold-backed currency, the dollar system must be nearing its end.
In fact, since the Fed's announcement last week of a new round of stimulus using $600 billion freshly printed dollars, world leaders from Brasilia to Tokyo have been protesting like never before.
This may be remembered as the moment the world rose up and said, "enough!"
While Zoellick danced around the edges of calling for a true gold standard, I believe that the transition is already taking place. Investors and foreign central banks are re-monetizing gold as they move their savings out of the dollar. In Zoellick's words: "Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." That's why gold is breaking one record after another, and will continue to do so for the foreseeable future.
If gold were officially remonetized, the price would have to be about 47 times higher to pair central bank holdings with the assets of the global banking system (according to 2008 estimates from the McKinsey Global Institute). To look at it another way, central banks would be in the market for about 42.6 million ounces of gold to back up all the fiat money in circulation. Martin Wolf, columnist for the FT, asserted that a new gold standard "would generate huge windfall gains to holders of gold."
It has only been since 1971 that the world money system has functioned without a gold-backing. I believe this experiment is rapidly coming to a close. Commentators are right when they say there is no currency ready to take the dollar's place as the global reserve - but there is a metal with a great track record that has been waiting patiently in the bullpen.
It is hard say when the Fed's monetary Ponzi scheme will fall apart, but many of its biggest "investors" are wisening up. I strongly recommend preparing for a dollar collapse before it's too late. When the president of the Washington-based and Washington-funded World Bank speaks out against the dollar system, what more warning do you need?
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I'm watching silver prices rising tonight, like a tough seasoned quarterback getting up after getting sacked and grittly getting ready to take his team to the end zone. You can't keep a champion down.
hi ho chompion
Now that bears know what it feels like to ride a bull market (like in silver and gold), they will probably never short stocks again... leaving the rest of the diehard shorters to defend against Dow 36,000 .
An ounce of silver is still cheaply priced relative to gold. For everybody who didn't take part in the gold/silver run, silver is still an easy cheap way to get involved. Or look at it this way, what would you rather spend $30 on, an ounce of silver or all the other worthless garbage you can buy at any type of retail store? or ten cups of overpriced starbucks coffee?
"orderly markets" my donkey. no one was interested in orderly markets in 08 when goldman was goosing a barrel of crude to $147. the megalith has developed a huge fracture. frankenstein has lost control of his financial monster. the human infrastructure,americas overlords are hardwired criminal mattoids. behold a pale horse.
Now wait just a damned minute here. My vente double dopio decaf double-shitstorm latte with a breve foam twist is not overpriced....ummmmm....bitchez.
Hmmm. This seems to be working out pretty well, so far...
by fuuon Tue, 11/09/2010 - 14:10
#712768
Turd if you are lurking was this our pullback?
by Turd Ferguson
on Tue, 11/09/2010 - 14:19
#712818
Yes. Let it come in a little more. I'm waiting with buy orders for when we get back near the lows of yesterday, namely 1390 in the Dec10 gold and 26.75 or so in the Dec10 silver.
And one more thing before I sign off for the night (its been one heck of a day), if you're not checking Harvey Organ's blog every evening, you're nuts. An absolute must, daily read.
http://harveyorgan.blogspot.com/
And one more thing...anyone trading PMs MUST READ THIS:
CME Group Announces Money and Margin Requirement Increases
Posted: Nov 09 2010 By: Dan Norcini Post Edited: November 9, 2010 at 7:37 pm
Filed under: Trader Dan Norcini
Dear Friends,
CME Group today announced a hike in the amount of money or margin needed to control a full-sized (5,000 ounces) silver contract. Margin for silver jumped to $6,500 from $5,000 or 30%.
Several things to know about this:
First, it is quite common to see this occur in markets that are undergoing sharp upmoves in price. The increasing price range can easily wipe out the entire margin amount in a single day with ease and this is designed to protect the integrity of the clearing houses and the brokerage firms. Customers who lose big cannot oftentimes meet margin calls and end up sticking the brokerage firm with losses. The idea is that the firms protect themselves by having more money at the clearing houses sufficient to cover potential losses.
Second – members of the exchange generally tend to be on the short side of a market moving higher and once they get trapped, they begin to squeak, and quite loudly at that. Squeaky wheels get the grease and since the exchange membership brings with it voting rights, they generally get what they want.
Thirdly – Small specs whose accounts are generally underfunded to begin with and who chase the markets higher based on the hype end up buying at relatively high levels. Once the margins get raised, these weak hands get forced out since they generally cannot meet margin calls and their exodus precipitates a wave of selling. That engenders more paper losses which then engenders more margin calls and the snowball effect occurs.
Fourthly – strong hands on the long side will look to add on during such price retracements when it appears that the bulk of the weak-handed latecomers have been flushed out. Stronger hands on the short side who have been experiencing severe bleeding of their trading accounts will welcome the opportunity to finally cover some of their existing shorts in an attempt to minimize the amount of damage that they have incurred. Getting out with a small loss after sitting through a huge one is a psychological victory for trapped shorts.
Fifthly – to believe that the bull market in the metals is now over and that gold in particular has topped, is to also believe that the US Dollar is about to somehow mysteriously repair itself in spite of the conditions that have been contributing to its recent decline. Gold is acting as a currency and will remain one. It is no longer trading as a commodity. Severe stress in the global monetary system assures that it will be well supported.
Sixthly – the breakdown in the long bond is signaling that the market is fearful of inflation ahead. Gold and silver are your protection against such conditions.
Summary – trading gold and/or silver is a vastly different thing than investing in either or both. Traders can get whacked if they do not respect what leverage can do to them and their trading accounts. You are playing with the big boys now and need to learn to be careful and avoid becoming complacent or overconfident about your existing positions. Failure to do so means immense pain. If you must trade, then use very short term time frames such as 5 or 15 minute charts to move in or out.
Investors who buy the metals as a hedge against the Dollar can be much more long term focused and tune out the short term gyrations of the markets. This is what we have been warning about when we said to expect increased volatility. It works both ways going up and going down.
Thanks man. I find there are not enough hours in the day to read all that want to read so thanks for the two articles you posted.
Very cool work. TnX many x.
+a bunch
You da man... er, Turd! Thanks!
Insightful, Turd, thanks so much for the good read!
SOMEONE please tell Harvey Organ that while his content is important, his presentation sucks donkey balls and is unreadable.
A-fucking-men! You guys like him so much and I try, really try, but I hate the way it is presented. Thanks for saying it.
Yeah, like I said in another post, none of the fundamentals driving PM's has changed.
sooner or later
"It has only been since 1971 that the world money system has functioned without a gold-backing. I believe this experiment is rapidly coming to a close."
The fiat experiment is quickly deteriorating. I am wondering if the World Bank is just trying to make some news and give itself some relevance in an effort to bring about a one-world currency (backed by gold or fiat).
Indeed. This is NOT good news. The ECB can't combine and properly manage the currencies of a few European states ... the FRB can't combine and properly manage the currencies of 50 American states ... yet they now want to combine and manage ALL world currencies at once. Talk about hubris!
Whether gold backed or not -- Tell them to f*** off!!
PS. Schiff's enthusiasm for this move is frightening :O
PPS. At least Rickards makes sense.
Ricard's lastest interview on the King World News site is a must-hear in my humble opinion.
+1
Dollar Bears, Gold "Bitchez", and Peak Oilers must be scratching their heads today after today's shellacking.
The bank stocks better get some bids ASAP, otherwise, this whole risk asset thing is going to get sucked into a black hole.
the only ones scratching their heads are late comers who bought the past few days;
silver was at $18 as recently as august;
gold was 1160 shortly before
next week they will be happy too...
"the only ones scratching their heads are late comers who bought the past few days"
Especially late comers that decided the way to make a fast buck in PMs was through leverage.
Long term physical holders simply sit and watch in amusement. No way I go head to head against JPM short positions when they have the Fed and metals exchanges (sudden margin requirement changes) backing them.
Lots of weak hands shaken out of long paper positions.
Long term physical PM outlook unchanged.
Well if you can't manage risk you shouldn't be trading paper. All the paper trading gains I make get extracted and put into physical - it's a system that's been working just fine.
yeah well G20 will fix it all - be optimistic - everything will be okay! booyaa
update - Bernie Lo says they cant EVEN agree on the agenda...oooppsss
26.15 -1.00 (-3.68%)
After Hours: 26.80 +0.65 (2.49%)
65% of the loss has been recouped in AH trading o_O
FAS is -0.30% in AH trading.
Is that Uranus?
If it was, there would be Klingons.
if so it appears to have been reamed a few times.
<chuckle...>
It would also be brown.
Galactic Goatse?
POMO day tomorrow. Nothing's going down any black holes as long as the FED keeps monetizing.
What about....the dorrar?
Dramatic Squirrel:http://www.youtube.com/watch?v=rfh4Mhp-a6U
Well yeah, eventually the dollar is going down a black hole - good point.
You hit nairl on head.
you mean the Hong Kong Dorrar?
Consensus has the Next round of POMO at $27.5 billion per week starting Friday, up from the priors of $10 b/w.
Who really gives a fuck if the the banks get bought........under the next regime of monetization commodities become the banks.
gold isn't a risk asset.
Stop trolling...you frequently have some decent things to say. How is this shellacking different from the one last week or the week before that?
From your lips to God's ears. I'm loaded to the gills with puts and would love to get a big pile of cash and swap it for far lower priced metals. Let this be another July 2008.
Since I'm motovated to log on and say something... Yeah and so what at this point? You seem to get a hard-on whenever the metals go down a few bucks. You sticking it through the hole in that picture.
At this point the prices are where -back down at more reasonable levels in the trend channel.
Stick to the hot chick pics.
...Peak Oilers must be scratching their heads today after today's shellacking.
What does that mean?
It has to be the dumbest statement I have seen among all the dumb Peak Oil Statements.
Peak Oil is a Geological event,
NOT a Financial event.
It has NOTHING to do with Money. It is the point when a Well, Field or Region hits the pinnacle point of Production. After which production will never reach that much(ie Barrels per day) again.
Ya, Canterell (3rd largest field which has peaked) sure got a shellacking today.
The North Sea (which has Peaked) sure got a shellacking today.
The US (which peaked in 1971) sure got a shellacking today...
silver is up almost $1 from it's low ~4pm today. Crazy volatility.
Isn't the converse that fiat would lose 47 times its purchasing power?
loaf of bread x47
can-o-spam x47
molotov cocktail x47
Not really. Those prices are set in fiat today. Which currency you use in transactions isn't particularly consequential. Individual transactions are merely goods and services exchanged for goods and services.
In other words, ALL prices are reset, including salaries.
The advantage comes at the margin, where you are no longer losing purchasing power every day to central bank printing.
Due to these effects, Freegold is probably just as good as a gold standard. A gold standard is better for those who own gold, though.
Americans on average look like they could afford to skip a few meals.
http://bit.ly/6M7cOp
Good question.
But they're looking at the quantity of gold vs all money. So if currency were to become gold-backed, at the present volumes of currencies, gold would need to increase in value by 47 x.
If Exter's pyramid starts collapsing, then yes, the 47 x relationship vis-a-vis bread purchase wouldn't hold any more.
Still... I'd be happy with a nominal increase in the value of my gold holdings by 47x, even if the price of bread/spam/molotov cocktails doubled.
so, who did they save from a near death experience with silver today LOL
(The Paper) Chase!
I was traveling all day. Why did gold and silver go negative today?
Comex margin hike.
The giant smoke dildo was doing so well with posts. Why do this silly story.
Gary Kaltbaum discusses "monumental volume" on "huge reversal day" in many commodities.
He thinks commodities have topped out:
http://archives.warpradio.com/btr/InvestorsEdge/110918.mp3
And Tom O'Brien thinks the whole risk asset complex is going to crash:
http://www.tigeruniversity.com/mp3/TOS110910.mp3
Then wipe the Johnny Jizz out of your eyes and go all in short.
See you behind the 7-11. *wink*
Absolutely! With Ben B. & Co. just on the verge of printing another $600B, I don't see how anyone could go wrong by shorting commodities now.
roflol....+1
Too much pride Robot, too much pride. I still value your comments but your hating on gold is almost pathological.
I'll say this, I'm doing my best with what little I have, and I am fairly certain NONE OF US KNOWS WHAT THE FUCK IS COMING.
That should humble both of us.
NONE OF US KNOWS WHAT THE FUCK IS COMING
- so true. All we can do is to prepare to the best of our abilities...
I think some of us have a fairly good idea what is coming: http://www.youtube.com/watch?v=QCxjqPgHgpA&NR=1
Thanks for that link. Studying them now.
Some of it makes sense, some of it the speaker is pulling straight out of his ass.
Wear the grudge like a crown of negativity. Calculate what we will or will not tolerate. Desperate to control all and everything. Unable to forgive your scarlet lettermen. Clutch it like a cornerstone. Otherwise it all comes down. Justify denials and grip 'em to the lonesome end. Clutch it like a cornerstone. Otherwise it all comes down. Terrified of being wrong. Ultimatum prison cell. Saturn ascends, choose one or ten. Hang on or be humbled again.
http://www.youtube.com/watch?v=EiR1hmpk-x4
And what you paperbugs and stock pimps continually fail to recognize or acknowledge, RobotShitforbrains, is that it is the DOLLAR that is the ultimate "risk asset"! No, take that back ---- it is not risky at all; it's ultimate collapse is guaranteed.
Yeah, I really don't care what they think. With a mere 7% (but growing slowly) of my assets in gold, no worries.
Other than what QE-to-Infinity will do to America.
Jim Rickards says in this interview that the US Army is now conducting exercises that might be used in a US 'financial collapse'.
Interesting listen, also talks about increased margins in silver exchange, new gold backed currency, etc....
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/11/9_Jim_Rickards.html
most of the gold bitchez here are into physical, not paper. Physical metals are not a risk asset
It's about time that little fact was pointed out. Thanks.
Silver 27.50 on 5K vol already, Gold $1,400. Yep crushed into the dirt. Heaven help us poor bugz.
"It is hard say when the Fed's monetary Ponzi scheme will fall apart, but many of its biggest "investors" are wisening up. I strongly recommend preparing for a dollar collapse before it's too late. When the president of the Washington-based and Washington-funded World Bank speaks out against the dollar system, what more warning do you need?" -- Schiff fm above
So what's the real risk asset?? Maybe the one that just got downgraded and put on negative watch by its largest investor?
+1
Forget about Dagong. China's own rating agency is also a clown like its US counterparts. Dagong gives China the top notch, which is nonsense. Beijing's balance sheet is as shitty as Uncle Sam's.
Eh? How do you figure? They are the world's largest creditor. The US is in trouble because it is the world's largest debtor, and yet it has no real income in terms of production.
So saying China's balance sheet is shitty is a bit asinine, don't you think?
The liabilities of the Chinese government are mainly internal like Japan. First, the social welfare system in China is severely underfunded just like the US. The social welfare insurance fees paid by the young are used to pay the old in China. A Ponzi scheme, right? Second, the potential dud loan problem in China is ginormous. The dud loan problem occurred in the 1990s is still not solved yet. You can imagine when the current housing bubble in China explodes, the Chinese government will be inundated by a tsunami of NPLs. Finally, the RMB is not a reserve currency. The Chinese government can't collect global seigniorage like Uncle Sam.
That is all true, but what makes you think they won't just chose not to interfere and let the market take care of the bad loans?
I don't know anything about thier social security system, so I can't really comment, other than to say that it took us 80 years to run to the end of that Ponzi. With their reletively low amount of spending per GDP, they could last longer. Certainly longer than the US. All that production will help in the end as well. Hell, we were still producing like we were in the 70's (ie without all the regulation we have piled on in the meantime), we would probably be ok.
First of all, all the banks in China are owned by the Chinese government. When the Party needs a certain GDP figure, it orders banks to lend at any cost. Excessive liquidity and too much money lead to malinvestment as the Austrian School often says. While the loans cannot be collected, Beijing has tacitly guaranteed all the savings in banks. That means Beijing will have to pay a lot.
Second, even if you have no idea about the social benefit system in China, guess you have heard about the "one child" policy in China. With fewer young people, you really don't think China will have a social benefit problem.
Finally, factories in China are mainly labour intensive. With fewer young people (ie. labour) in the future, do you think production will help in the end?
Well for starters, it's common knowledge that the Party decides what GDP will be for the quarter and instructs the various ministries to reverse engineer the numbers to support the target.
All smoke and mirrors, bro.
The goods that are coming out of their system are real enough. The same could not be said of the USSR.
It is quite clear that even if they report false GDP numbers, they are large enough to support America's fat ass (not to mention Europe) in addition to their own population.
Smoke and mirrors don't produce real goods.
Japan also produces a lot of goods but the Japanese economy sucks and Tokyo's balance sheet is shitty.
Japan's exports are still up y/y, unemployment and wages are steady, prices are steady or down, so why exactly does Japan's economy suck? You wish America could have a lost decade like Japan's! Only Bernie thinks deflation is a disaster (it is for him); for most people falling prices is great. Historically, during periods of prosperity on the gold standard prices (in gold terms) actually fell considerably. Deflation is good for consumers, not so good for producers (but they can adjust to it), but is life-threatening to fiat-money banks and central banks.
Please read "Dogs and Demons: The Fall of Modern Japan" by Alex Kerr. Japan is not so good as you might imagine.
Good point, though Japan has an enormous amount of debt on it's balance sheet, debt that is owed to others, whereas if China owns the banks, it has a lot of money owed to it, which it can thus forgive if it must. This is the difference between being a creditor and a debtor nation.
Unlike the US SSA China does not have guaranteed social entitlements. The govt, or parts of it (regions) MAY provide social support sometimes, but it also may not. I'm not saying that the Chinese economy doesn't have problems, it has huge problems. But the US problems dwarf those of the Chinese. Like someone pointed out above, at least they i) produce real goods efficiently, 2) have plenty of time before their problems get critical, even assuming they mismanage the solutions.
Untrue.
Check : chinese ghost towns :
This is all smoke and mirrors, real goods, real GDP (inventories of homes and goods produced count in GDP figures), but nobody needs them or uses them.
There are hundreds of other examples of this in China.
You think those cities were created without the use of real industrial capacity? Were the foundations poured with an image of concrete? The girders produced from cast smoke?
This is certainly waste, but the fact that they are still exporting goods means that they have plenty of capacity.
On the contrary, the USSR built ghost cities as well, while their citizens starved, and as they exported nothing.
1 oz. Pamp Suisse gold bar - $1403.00, 150 1 oz. silver rounds - $4447.00,
paying for it with a JPM/Chase credit card.......... FUCKING PRICELESS!!!!!
Only on Zero Hedge. Hilarious !
+1m!
Good (wo)man!
+++1000
The irony is DELICIOUS:)
Computer generated digits for something tangible.HAH!
where can you get these prices on a CC???
They raised margins because the daily volatility had spiked. Exchange margins have a clear set of rules - usually they use some confidence interval over the last 90 days. Margins are usually only set a few times a year and don't change that much from period to period - simply because the method exchanges use to set the margins will not result in wildly different numbers.
However, when markets have extreme volatility spikes, exchanges change the margins. They do this to protect themselves. So when Rickards implies they are doing this to protect the shorts, he is totally nuts. If silver was cratering downwards, they would be increasing the margins just the same.
And if a small increase in margin - and that is what this is, a small change - drives the price down 5%, it reeks to me of a speculative bubble. No real trader would have to dump their position because of this margin change. The only people who trade using exchange minimums are small speculators.
Cotton also hit limit down several times on its way to the current level. When the market is a bit overbought, any trigger can drive it down. So just relax.
+3.7 std deviations and re!@X
I got short today and I'm a bug, expecting major volatility in the next few days as money starts sloshing around trying to find a home. I expect gold and silver to follow the markets and imo they are due for a big pullback, however I think the pullback in pm's could be violent. We shall see how it will play out.
Edited: By this I mean the markets, the real intrinsic value will be there, its just I think all these fake ETFs could cause the price to collapse when the withdrawals overcome them. Buyer beware if your in GLD or SLV.
Your post, Mr E, is equally full of good points and nonsense. Please read the info from Dan Norcini that I copy-and-pasted back near the top of this thread.
What was the nonsense part? Nice copy/paste - that guy does know what he is talking about.
One person in this conversation has set margins for exchanges with co-operation from the clearinghouse...It's me!
I guess I should not have said rules - more like guidelines on how margins are set. Then a 30% jump isn't that much if you trade with realistic money management.
What was nonsense - really?
The small change was 30%. That can be significant.
Stupid question. All this "management" only applies to paper contracts correct? Yes, I understand it affects the price, but is there a way they can pull a Hunts brothers and force silver/gold back down significantly?
World currencies and economies are FUBAR and thus gold and silver will continue to be strong. Gold=measure of fuckedupness of everything. Not a commodity. It might get pushed down with the rest, but in the end it will be like a cork in a sea of shit, always popping up on top.
I'm pretty sure you copied that word for word out of an economics text book.
I wish economics texts would start using words like "fuckedupness".
out of economics and into the politics of fiscal and monetary policy, fuckedupness morphs into fuckuppedness.
i guess this is only for me to know really, but about 35 years ago i made up the word fuckeduppedness and it's really wierd to see it still getting used.
about that same time my friends and i started calling babes 'betties' 'she's a betty' after betty rubble on the flinstones and for awhile that got used a lot all over the nation but i don't hear it anymore.
i've often wondered who made up other slang like 'totally awesome' or 'blaze a new trail' or 'duuude' or 'groovy' or 'let's split this scene' or 'i can dig it, can you dig it' or 'i'm not too hip on that' or '24/7' or 'sheeple' and wonder if they get the same feeling how easily change sometimes starts with just an army of one.
it 'blows my mind' sometimes
i sometimes see other people using my spelling of deadhead on other websites but they probably don't have a clue what it means. it's kind of like the yin and the yang ... and a palindrome for what comes around goes around, or as i prefer it, what goes around comes around.
made it up in '96 when i started online ... nothing to brag about but if you ever meet one of the others and they can't tell you what it means, then it's not me.
"It won't change, until you do"...and if you get over the "I" you might see the light and the dark. There's no end of wonder of creation, if one doesn't care who gets the credit. One can be quite content for Life simply learning to channel the echos reverberating throughout History.
Nicely said.
Any opinions-advice about using call options (without margin) on miners?
I'm long that way. My advice: Don't try to hit a home run. Buy ones that are long-dated and not too far out of the money.
Thanks, I have two SLW (Silver Wheaton) long dated. I like Taleb´s general strategy, to invest most of your money in the most secure and a small percentage in swing for home-runs. I consider physical silver and gold the most secure bets and long dated calls the home run possibilities... in my mind, good possibilities.
Its way easier to find quality juniors and buy them - like perpetual calls, no time decay.
I'm long that way. My advice: Don't try to hit a home run. Buy ones that are long-dated and not too far out of the money. And prefer ETFs like GLDX and GDXJ to individual miners, unless you'rean insider.
long dated gold paper is so cheap, tells me a lot of people are in denial
Probably more PM manipulation by the bankster pair under cover of a change of margin limit as the smoke screen.
Go watch this video, it is brilliant http://www.youtube.com/watch?v=Za-9cqeIzEw we are in deep doggy doo doo
Rickards: "Never ignore the power of the exchanges and regulators and always remember they will use this power when it suits them, not you."
The umpire strikes back.
A bit off topic but on point nevertheless.
I just got home from my gold mine (sorry, just had to show off!) and was going thru Durden's twitter feed catching up on all the going ons and I gotta say: how come nobody is piecing what's going on together.
I believe that the Zoellick story, the French world monetary changes necessity declaration (after meeting the Chinese), the moves in gold and silver, the ICBM launched by the US Navy (it's a threat to China and Asia as nobody else woud dare to do that; don't you guys know that?), Obama at G20, Dagong response. Damn, it's obvious what's going on!
The big money making the moves in the PMs are the ones in the know.
Anybody care to refute this?
It is quite sad when the only allies honest, ethical, productive americans have are countries like communist China and Russia... but that is indeed what the world has come to.
All I can say is, to the extent we can, "we've got your six". Which means, mostly, we're converting virtually all our fiat FRNs into gold and silver, and shall continue to do so.
With allies like China and Russia, we can "fight the fed".
Great synthesis of events, but what is going on?? Why did'nt you complete the conclusion for us poor plebs not in the know.
Refute what? You didn't make an comment that was conclusive.
fascinating debate between schiff and bob prechter earlier today on schiffradio.com, an awesome interview, peter crashes Prechter, make sure you listen :
http://www.schiffradio.com/programhighlights?date=20101108
So what will be the value of an ounce of gold/silver once all the fiat currencies have completely collapsed?
One oz. silver = ten gallons of milk.
...the best interests of the exchange itself and its statutory duty to maintain orderly markets....
The exchanges are privately owned corporations. Their intent is to max their own agenda. Regulatory authorities are tolerated bec they provide a faux legitimacy.
Think clever-strokes and fraud.
Lies and fraud are pretty much all we see today.
It's RISK OFF tonight....
Goody, looks like the correction is finally on its way. Got FRNs burning a hole in my pocket. Papa needs some more shinny!!
I was just waiting for a nice correction to convert the rest of my fiat toilet paper into gold and silver... but the wise guys in asia and europe are pushing it right back up. Damn!
It really doesn't matter much overall, of course, since gold and silver need to push their way to about $50,000 and $2,500 per ounce before they become world currencies again.
In gold we trust.
In silver we trust.
In platinum we trust.
In palladium we trust.
In other real, physical goods we trust.
In fiat, fake, fraud, fiction, fantasy we despise...
That's you, FederalReserve & government of the USSA.
No dip buyers to be found in Asia.
Everybody is panicking.
Best clean that Johnny Jizz out of your eyes there. Gold is flat, silver is up 20 cents.
You are a coward with no conviction. If you had any conviction, you'd have been all in short gold for months, and you'd be hanging from the end of a rope in your mother's spare closet by now. Good for you, but rather insufferable for us, you know, the people who have been RIGHT, and have made countless thousands of dollars while your shit has stagnated.
Sleep tight, don't let Johnny's crabs bite.
Panicking because why?.......the next POMO is 2 days away?......
N225 is up 100 and POG is +5
Went to buy some phys last night.
Regular customer in that particular store (here in Bangalore, India).
All kinds of indcecision on what price to give it to me. Such wild price swings all day. Finally store owner was called, told it was a regular customer.
Turns out there is a real squeeze on the availability of Phys., bullion deals, banks etc. are all holding.
Very strong energy, the guy behind the counter was hyperventilating, describing the most exciting day in his young, bullion oriented life.
Wild times!
ORI
http://aadivaahan.wordpress.com
Can some explain on kitco the differce between the world spot price and New York spot prices on kitco? Is the difference the world spot runs for a longer period of time?
Pretty much. New York is the traditionally much more heavily traded COMEX, while world is the traditionally more lightly traded GLOBEX, along with other gold and silver exchanges worldwide.
Gold and Silver technicals are intact. We should have anticipated a violent selloff with such a stretched outprice. Overall very healthy for the metals...nothing has changed in the last 24 hours...the fucked up fundementals are fully intact!
For all the pissing and moaning, the pieces don't fit together properly. Silver an gold crater, stocks slide alongside, dollar rises and bond prices fall.
Nope. Don't fit.
It's a long fucking way from OK.
If it were a panic about Europe and the PIIGS, then as the dollar rallies, so too should bonds and gold. Nope.
Errant ICBM launches in American territorial waters, then bonds should rally along with dollar. Nope.
Risk On or Risk Off trades resurfacing. Nope.
Nefarious manitplation whacking every and all markets. Makes no sense. Nope. Even if tried, dollar and bond prices should rise. Nope.
Confusion. Yep.
Amid confusion, I'll stay glued to the safe trades. PM, commodities and treasuries, thanks.
I know the pieces fit cuz I watched them fall away
Mildewed and smoldering. Fundamental differing.
Pure intention juxtaposed will set two lovers souls in motion
Disintegrating as it goes testing our communication
The light that fueled our fire then has burned a hole between us so
We cannot see to reach an end crippling our communication.
I know the pieces fit cuz I watched them tumble down
No fault, none to blame it doesn't mean I don't desire to
Point the finger, blame the other, watch the temple topple over.
To bring the pieces back together, rediscover communication
The poetry that comes from the squaring off between,
And the circling is worth it.
Finding beauty in the dissonance.
There was a time that the pieces fit, but I watched them fall away.
Mildewed and smoldering, strangled by our coveting
I've done the math enough to know the dangers of our second guessing
Doomed to crumble unless we grow, and strengthen our communication.
Cold silence has a tendency to atrophy any
Sense of compassion
Between supposed lovers/brothers
http://www.youtube.com/watch?v=UhjG47gtMCo
Harry Dean Schultz quoted on Jim Sinclair's jsmineset.com
"My prediction on Bloomberg TV in Paris a few years ago was that “Gold will force a system change when gold hits $1,650, but that it might need $2,000 to bring a change.”
So if that is the tripwire for a reset tptb will resist until they can't.
It seems like many of us are waiting for a good correction to add to our stash. What does that tell you.
May not happen.
Long a bunch.
I asked about that subject last night, yet had no takers and I'm unable to find my earlier brilliant middle of the night posting so I will try to replicate it from memory.
Federal Reserve Notes are not dollars. Dollars are a defined coin based on silver or gold as per Federal Law. The US Constitution gives congress the power to mint coins and determine the value. Congress can not delegate any of its constitutionally mandated obligations to anyone. That is why the US mint mints coins and not the federal reserve. FRNs are bearer notes. That is why they have 2 signatures in the front (sign and countersign) The value of the note is supposed to be based on the marked denomination. Kind of like a check, I write a $200 check and the receipient expects to receive $200 upon presenting it at the bank window.
Here is where it goes wrong. When FDR illegally disconnected the FRN from the dollar, he made it a rubber check and disconnected the value of the note from reality. It is now a fractional instrument that pays at current prices, 1/27th of face value. But, it is still "legal tender"
The US mint coins are real money and have also a face value determined by congress. Regardless of their numismatic or content value, they are worth, according to congress, $1 an OZ of silver and $50 and ounce of gold. So, legally speaking, a 1oz gold American Eagle is $50.
Here is the interesting part. IRS regulations are denominated in dollars not FRNs. So legally I could be paid by my employer a 1oz American Eagle a week and not file any returns because my pay would only be $600, under the reporting threshold.
It has been tried before. A construction company in Florida paid their employees in silver dollars. They advised employees they did not have to file since they had been paid under the reporting threshold. The IRS prosecuted (of course) and after 3 tries they got guilty veredicts, not against the employees, but against the ownership. Not because they used silver to pay their employees, but because they claimed the numismatic value of the coins in FRNs in their tax returns as a business expense but were exchanging the silver dollars back to FRNs and recycling them every week while claiming new purchases in their tax forms.
Why is this important? Because it would be the key of DEFUNDING the federal government! If a precedent is set in court, we could ask our employers or customers to make payments in silver or gold and not file a return at all since the payments face value is the legal value of the currency we received payment in! Any lawyers out there, please jump in.
So, what about standard coinage? Those aren't marked as federal reserve. They are USA fractional dollars.
It would take a quick note stuck into a 1000 page bill in congress to squash the gold/silver loophole in its tracks. Obviously, the whole Fed is unconstitutional anyways. They would have no problem taking it even further.
Gold Bitchezzzzz
oh please. anyone citing citing some irrelevant WB hack only exposes their own amateurism or stupidity. of course, given europacs track record this is no surprise. it is all fed all the time. today bb put the hammer down.
At one time, wasn't there some folks who must've thought of making tulips a monetary standard?
Yes, their names were Ben Bernanke and Tim Geithner.
That which can be endlessly reproduced will have perpetually decreasing value, until the price of said good approaches the price of production. Gold is not endlessly reproducible.
How are those dollars treating you? My gold and silver are up 26% and 60% yoy in dollar terms, respectively.