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London Silver Update: "Only Entities Short Are Fed-Backed Banks. Nobody In Their Right Mind Would Be Short Here"

Tyler Durden's picture


The last time Eric King's London source spoke up, and determined the $25.50 threshold as that past which a massive squeeze was coming, he/she was spot on. This time we learn that Asian demand for physical silver continues to be relenteless, the squeeze on the shorts will not end, and that nobody but the Fed-backed banks continues to short the metal (and if exchanges are enforcing margin changes how about changing those position limits, eh CFTC?). In other words, rumors of silver's death appear to be largely exaggerated.

From King World News:

The contact out of London has updated King World News on the Asian buyers which have been squeezing the shorts in the silver market.  The London source stated, “There is an insatiable appetite for physical silver here and the shorts know that, the shorts know they are checkmated.  The Asian buyers are layering in bids to take advantage of bear raids in the paper market which have been used to shake out the weak hands.”

Asian buyers were able to pick up silver at a discount at the lows of yesterday.  They are continuing to buy today and tomorrow.  People have to remember that spot trades 24 hours a day, so as the shorts raid the market, physical buyers already have orders in to buy tonnage of silver at a time on that weakness.

As I said to you the other day, the locals which were short with the banks were overrun when the price of silver stabilized just above $25.50 for a few hours.  The local traders were margined out and silver moved over $1 higher later that same day.

In other words, the only entities that are left short here are the Fed backed banks.  Nobody in their right mind would be short here.

Spot has been trading in front of futures here in London all day.  We have been in backwardation all day long on the LBMA.”

So the Asian buyers are enjoying this weakness in the silver market?

“Of course they are.  $30 is just going to be a small pause along the way to much higher prices.”

Read the full KWN report here.


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Wed, 11/10/2010 - 12:36 | 716619 SheepDog-One
SheepDog-One's picture

Shhh dont tell Harry or RoboT!

Wed, 11/10/2010 - 12:47 | 716664 Popo
Popo's picture

Or any of the THOUSANDS of other shorts.   Seriously.  This piece is complete bullshit.

Long term, silver is headed to the moon, and beyond.  But there are loads of very astute traders who are short here.  I'm heavily in silver (and long) -- but this kind of echo-chamber reporting is just idiotic.  

Wed, 11/10/2010 - 12:58 | 716710 DonutBoy
DonutBoy's picture

Yes - same for me.  I'm long all commodoties, particularly silver, and this sounds like bullshit.

Why does it have to be a report from deepthroat?  (Oooh ooh - look - we have the secret information over here!!!)

If the CFTC wanted to help restore faith in capital markets they'd simply require holders of futures to be indentified.  Then we could see.


Wed, 11/10/2010 - 18:33 | 717956 Instant Karma
Instant Karma's picture

Cool silver market. I bought some silver Maple Leafs just a month ago at $24/coin and now they're selling for $30 (Apmex). I like the .99999 fine gold Maple Leafs, because they're packaged by the mint. I was hoping to add to my collection of 2009s, but Apmex is sold out.

Do you think I should start selling some of my physical gold and silver for a nice profit. The problem is that all I get in return is "dollars" that earn nothing in the bank.


Wed, 11/10/2010 - 20:23 | 718249 Testicular Cancer
Testicular Cancer's picture

You have one too many 9's. The five 9's are special edition gold Maples. Silver maples are only four 9's.

Thu, 11/11/2010 - 07:57 | 718980 Instant Karma
Instant Karma's picture

I know and I said what I meant to say.

Wed, 11/10/2010 - 19:44 | 718170 Kina
Kina's picture

Why does it have to be a report from deepthroat?  (Oooh ooh - look - we have the secret information over here!!!)

Errr...because there is. And it is quite useful to know, you would have thought.

Might be a message to JPM - we has your balls and we gonna crush them slowlly...enjoy. Then we can has cheesburger.


Wed, 11/10/2010 - 12:59 | 716711 RockyRacoon
RockyRacoon's picture

I'm short silver.  It's only a short walk from where I sit to where it sits.  I'm thinking about going long, however.  The farther out in the yard I bury it the longer I'll be.

Wed, 11/10/2010 - 13:11 | 716762 Abigail Adams
Abigail Adams's picture

That is assuming you will continue to have property rights? I just knew you were an optimist, Rocky.

Wed, 11/10/2010 - 13:25 | 716817 GoinFawr
GoinFawr's picture

Heh, careful there RR; bury it too deep and next thing you know a geologist working for a mining company (or even just a 'utilities locator') will stop by with a metal detector, and wham! you will lose all your 'treasure' because no one has mineral rights on their properties these days.

Wed, 11/10/2010 - 13:47 | 716894 cossack55
cossack55's picture

Ah, RR, a man after my own heart.  I would suggest not burying it on your own property though.  Also, if the geocats don't find it the gas boyz may when they come to frack you.

Wed, 11/10/2010 - 14:32 | 716989 RockyRacoon
RockyRacoon's picture

I'm in Arkansas so there's a bit o' frakkin going on hereabouts.  Thanks for the heads-up on that.  If I wrap it in foil will that help?  I've got some left over after fashioning a right sporty chapeau.

Wed, 11/10/2010 - 14:54 | 717122 MachoMan
MachoMan's picture

arkansas here too...  The only frakkin I know about is between brother and sister and/or first cousins.

Wed, 11/10/2010 - 15:06 | 717172 RockyRacoon
RockyRacoon's picture

Well, yeah, but there's only so much energy in that transaction.

You must be from the Delta.

Here's the hot area:

Wed, 11/10/2010 - 18:36 | 717981 MachoMan
MachoMan's picture

yeah, i went to school up there and have a few friends in "the biz".  They're also finding some around central arkansas...  I'm over in NEA, the bastard/redheaded stepchild of arkansas.

Wed, 11/10/2010 - 15:32 | 717316 Cone of Uncertainty
Cone of Uncertainty's picture

I grope my silver like a seasoned TSA worker.


Wed, 11/10/2010 - 17:16 | 717672 barkster
barkster's picture


How u bury and prevent corrosion? would appreciate any tips...

Wed, 11/10/2010 - 17:53 | 717828 RockyRacoon
RockyRacoon's picture

PVC pipe as is used in plumbing waste lines.  You can put a clean-out fitting on one or both ends for easy access to the contents and make the tube as long as you need.

Home Depot, bitchez!

Wed, 11/10/2010 - 20:19 | 718238 barkster
barkster's picture


Wed, 11/10/2010 - 20:20 | 718240 Hulk
Hulk's picture

Found your stash RR with my Neutron Scanning , Silver Seeking high orbit Telescope (It was a Heathkit).

Coords are: 34 degrees 32 minutes 3.02 seconds N

 93 degrees 30 minutes 38.7 seconds W

Just in case you loose track of it...


Wed, 11/10/2010 - 13:06 | 716733 Bay of Pigs
Bay of Pigs's picture

Hey Popo, he is talking specifically about the JPM and HSBC shorts that are MASSIVE in percentage terms compared to people like you. You know like 90%+ of the total short position? Astute? Go short then Big Shot. I wouldn't touch that trade. 

Wed, 11/10/2010 - 13:34 | 716828 GoinFawr
GoinFawr's picture

That definitely needed saying.

Some delude themselves into believing that they are sharks simply because they are swimming in the same pool. That is until they nick their finger...

Note: That goes for either side of any trade, so don't go all Mako on yourself.


Wed, 11/10/2010 - 14:34 | 717048 Imminent Crucible
Imminent Crucible's picture

I don't see anyone commenting on what may be the most significant statement in the article:  "spot has been trading in front of futures here in London all day.  We have been in backwardation all day long on the LBMA.”

Got that? You have to pay MORE in the cash market than for the futures contracts.  What that means is silver available for immediate delivery is running out.  Otherwise, normal contango would prevail.

They'll promise you silver a couple of months out, but you have pay a premium if you want it now.  Crimex warehouses are being emptied of silver.

Wed, 11/10/2010 - 17:48 | 717810 SPONGE
SPONGE's picture

While frequently reading of the difficulties others have trying to find physical at their local coin store, I felt very fortunate that my local (midwest) shop has always had ample supply of both Au and Ag.

    Yesterday, my local dealer told me that he is basically out of both. He said people have been driving long distances to buy.

   To all out-of-towners: Stay away from my coin shop or I'll let the air out of your tires.

   (unless you're selling - free wash and wax)    

Wed, 11/10/2010 - 13:16 | 716761 Hearst
Hearst's picture

David Morgan made an interesting comment on Max Keiser's show the other day.  Noting the incredible tiny market of Silver, Morgan said that just a $5 move up in the price of Gold could buy the entire Silver bullion market!  

Watch it here



Wed, 11/10/2010 - 17:18 | 717681 Trenchf00t
Trenchf00t's picture

"Braaaap! Braaaap! You are no longer an American. Please die in the mud. Beep!"

Priceless! Max should do stand-up!

Wed, 11/10/2010 - 13:14 | 716777 quasimodo
quasimodo's picture

Echo chamber? Good gawd, you want echo chamber go watch msnbc or some other parrot talking head.

I would like to know about all these "astute" traders you refer to, they only blokes I know of are smelling the stench from over here and dumped short long ago

Wed, 11/10/2010 - 13:20 | 716798 moregoldplease
moregoldplease's picture

Riots in London right now. Do you think it's coming here? Get prepared.

Wed, 11/10/2010 - 14:07 | 716960 Lucky Guesst
Lucky Guesst's picture

No need to destroy anything that our tax dollars will be used to replace or rebuild. Everyone should just stay home for a week with their families, don't spend a single dollar. It will be heard and nobody will be hurt or incarcerated. Don't give them the reason they are looking for to hurt us.

Wed, 11/10/2010 - 15:32 | 717317 Things that go bump
Things that go bump's picture

If we all stayed home from work that would certainly get their attention.  

Wed, 11/10/2010 - 14:55 | 717124 espirit
espirit's picture

They're probably just burning the $USD to make room for the new batch. DX up, DX down.

Wed, 11/10/2010 - 13:11 | 716760 High Plains Drifter
High Plains Drifter's picture

Glenn Beck said today that George Soros has a one million dollar bounty on his head...Que?  Good cop , bad cop was on display today in all of its glory. He is so sweet when he says some mean old commi is trying to crush him and his attempts at telling the American people the real truth. Excuse me now, while I go barf....

Wed, 11/10/2010 - 13:17 | 716787 -Michelle-
-Michelle-'s picture

I could find nothing regarding this today.  He did refer to a million dollar donation from Soros to Media Matters as a bounty, but that was from October 10, 2010.  And I do believe he was speaking metaphorically.

Wed, 11/10/2010 - 13:29 | 716829 yabyum
yabyum's picture

Beck is a dry drunk witk more than a hit of cocaine paranoia. His PM advice and  metal dealers are truely pathetic.

Wed, 11/10/2010 - 14:14 | 716987 Lucky Guesst
Lucky Guesst's picture

Your attempt is what's pathetic.

Wed, 11/10/2010 - 14:17 | 716991 RockyRacoon
RockyRacoon's picture

I junked you just to keep things fair and balanced.

Wed, 11/10/2010 - 16:23 | 717495 quasimodo
quasimodo's picture

As did I you, since you felt the need to bloviate

Wed, 11/10/2010 - 16:55 | 717596 tmosley
tmosley's picture

As I did you, because recursion is awesome.

Wed, 11/10/2010 - 21:08 | 718351 StychoKiller
StychoKiller's picture

Junks all the way down! :>D

Thu, 11/11/2010 - 03:01 | 718873 Bob Sponge
Bob Sponge's picture

The Asians must be enjoying squeezing the Western banks.  Will Benny bail out the banks?  Probably.

Wed, 11/10/2010 - 12:36 | 716621 johny2
johny2's picture

trouble is that they have almost infinite amount of the dollars they can print to short the market.

what to do, what to do?

Wed, 11/10/2010 - 12:37 | 716623 Ragnarok
Ragnarok's picture

Take physical delivery and empty the vaults, make them eat paper.

Wed, 11/10/2010 - 12:53 | 716689 johny2
johny2's picture

it seems the best thing to do, and spend some time on the beach in a meantime.

Wed, 11/10/2010 - 12:58 | 716708 knukles
knukles's picture

That's what Sprott's doin'.

Wed, 11/10/2010 - 13:36 | 716856 GoinFawr
GoinFawr's picture

Bless his heart (of Gold. And silver.)

Wed, 11/10/2010 - 12:37 | 716625 SheepDog-One
SheepDog-One's picture

Physical holdings beat imaginary dollars all day long.

Wed, 11/10/2010 - 12:43 | 716645 Shameful
Shameful's picture

That is why it's necessary to take physical. They can short silver to $1 an ounce, and gold to $35 an ounce with their infinite money. Problem is when it comes to making deliver to the buyers. So the answer is always take physical possession. When they can no longer make delivery to the physical market the game gets a lot more funny.

Wed, 11/10/2010 - 13:09 | 716757 Max Hunter
Max Hunter's picture


Most on here seem to buy physical to hold for security.. The price fluctuation in NY or London based on people trading paper on margin has no impact on my view of what silver will be valued at soon.

The bartering power of physical silver will someday reach a level that will be talked about for generations.  When it is over, no one will look at a silver coin the same.. ever!

Wed, 11/10/2010 - 13:16 | 716782 detersbb
detersbb's picture

There is no trouble, only a problem with the way you are looking at the current situation.  It needs to be viewed as an opportunity for you to buy more silver at a lower price and in the long run have a better long position that you are in physical custody of.  I see the best way to deal with this as encourging everyone to buy 1 just 1, if they can afford more great if not, 1 is great Silver Eagle from the US Mint every month.  This way you do not have to worry about comming up with the money to buy a contract for 5,000 ounces or partners to split the costs with.  This would also put huge demands for physical and by law the US Mint is required to mint gold/silver bullion, not proofs, but bullion consistent with pubic demand.  This boxes them into a corner and forces their hand.  It would be very difficult to explain away a $50 silver eagle with $28 spot and a previous $2 prieumim.


That is what you do.  Take advantage and let the iditos continue to overextend.  The further the over extension goes the greater the explosion in price will be.  Stop looking at it as someting that must be beaten, and start looking at it as already beaten.  They would not have to cheat is they were not losing, right?

Wed, 11/10/2010 - 13:32 | 716838 johny2
johny2's picture

i know it should be looked as an opportunity, trouble is having the patience to wait till they push the price down. they certainly dont lack the dollars to do that.

Wed, 11/10/2010 - 13:41 | 716869 detersbb
detersbb's picture

If the price get driven down look at that as an opportunity.  If the price gets driven down more, there is even a greater oportunity.  If more than even greater.  Driving the price down is the same as digging their own grave, and the more they drive it down the more people who have been waiting for a dip will come in and the more they will have to short and the more the explosion will build.  It is only a matter of patience.  Look at some of the people like Ted Butler fighting silver manipulation for some 20+ years only to have this last month the price sky rocket, the CFTC to admit manipulation and call for prosecution, 3 class action law suits to be filed, and a judge to call out his partner judge as corrupt.  The speed things are unwinding are increasing as the whole artifical construct is collapsing/crashing like a cheaply designed video game hitting the glitch with the glitch being physical metals and hard commodities.  It will crash, just have patients and when you get frustrated think of Butler fighting this stuff for over 20 years and how much he has had to eat it over that time. 


Change you perspective change your outlook change your life.  That is the message of 99% of self help gurus and I am not even going to charge you for it.

Wed, 11/10/2010 - 13:50 | 716905 johny2
johny2's picture


Wed, 11/10/2010 - 12:36 | 716622 Spalding_Smailes
Spalding_Smailes's picture


"South Florida," he said, "is working off of a totally new economic model than any of us have ever experienced in the past" according to a realtor who predicted that a land shortage will support higher prices indefinitely."


"Trading Places: Real Estate Instead of Dot-Coms", in the NYT.

Wed, 11/10/2010 - 12:40 | 716635 truont
truont's picture

Hey Spalding, let me know when you finally capitulate and buy silver.

That's when I'll know it is finally in a bubble, and I can sell to you.

Wed, 11/10/2010 - 12:54 | 716652 Spalding_Smailes
Spalding_Smailes's picture

"What we're finding out is that they're pretty smart," Mozilo said. "It's like voters: Individually they're sort of idiots, but collectively they seem to make the right decisions."

"CEO Makes Call on Pay-Option Loans: It's Risky", from Bloomberg News.


I think what may happen -- I don't think you'll see a reduction in [intangible] value; let's put it that way. Value and price are different things. You probably won't see a reduction in value, but maybe in prices, meaning you can pay less but it's worth more.

Realtor Beverly Pindling, quoted in the Orlando Sentinel

I'm so mad at my neighbor. I bought my new home(silver) here in Ashburn last summer and plan to sell it next year (after holding two years to avoid taxes) to make a nice return on my investment. The problem is my neighbor is trying to sell his house(silver) (very similar to mine) right now and he keeps lowering his asking price. Each time he lowers his price, I see my potential profits next year getting squashed. Doesn't he realize he's hurting the comps for all of his neighbors by doing this? I don't think he is acting very "neighborly" by doing this. I want to say something to him and tell him he should stop putting his interests ahead of his neighbors. It's people like him who are ruining the market for the rest of us. If he would just refuse to lower his price, we could maintain our comps and everyone would benefit. What can I do to stop him?

Question during a real estate chat held by the Washington Post.


When buying, Miller also likes to strike quickly and he expects the same when he's selling. "I don't haggle much over the price," he admits. "I don't beat the owner up over one of the stove elements or something when I'm trying to buy a property. I'm trying to sell a condominium right now that will make me a $200,000 gain in 11 months and this buyer is dinking me around 'cause he thinks the roof might have to be replaced in a couple years. So he's gonna lose a fair deal there in the Village. Do you think I'm gonna replace the roof? If we were in a depressed market, maybe, but [I'm thinking] 'next!'"

"Un-Real Estate" by Jake Nichols, on Planet Jackson Hole.

Wed, 11/10/2010 - 13:05 | 716716 Problem Is
Problem Is's picture

"It's like voters: Individually they're sort of idiots, but collectively they seem to make the right decisions."

Actually... Tangelo May Have It Tanned-Assed Backwards...
Individually a lot of Amerikans are sort of smart... but collectively they seem to vote wrong for the same stupid parties:

Party R screwed me => I will vote for Party D.
Party D screwed me => I will vote for Party R.
Party R screwed me => I will vote for Party D.

Wed, 11/10/2010 - 13:09 | 716758 Spalding_Smailes
Spalding_Smailes's picture


Perth couple Brian and Eileen Bowden are among thousands reaping the benefits of the states robust economy as they prepare to extract a $100,000 profit on their home in just six weeks. The people who we bought this house from made $100,000 off us, so it's a non-stop cycle, Mr Bowden said.

Anthony Klan and Alana Buckley-Carr



Wed, 11/10/2010 - 14:11 | 716975 Lucky Guesst
Lucky Guesst's picture

The parties are screwing us so I will run myself!

Wed, 11/10/2010 - 13:05 | 716744 clymer
clymer's picture

How can you compare precious metals to real estate? The opposite dynamic is in play with PM's - paper is being used to suppress the price, not inflate it. Fiat paper is arbitrated by precious metals, because it serves as an alternative that cannot be manipulated by inflation. Real estate does not carry the same fungability as gold and silver. The paper instruments traded via the exchanges attempt to lessen the fiat exchange value of precious metals, not artificially inflate them.


Sorry - I don't see any valid reason to compare real estate to PM's


Wed, 11/10/2010 - 13:12 | 716763 Spalding_Smailes
Spalding_Smailes's picture

value of precious metals, not artificially inflate them.



Wed, 11/10/2010 - 13:19 | 716793 clymer
clymer's picture

Exactly. The paper-manipulation is inflated on the side betting against a rise is price. No? Truly, I am just trying to see your logic.

Wed, 11/10/2010 - 13:31 | 716835 Spalding_Smailes
Spalding_Smailes's picture

The boss is in total control.... Miners = debt = dollars = derivatives .....


"The Impact of Derivatives on the Gold Market"

Paper Prepared for
The ABARE Conference, Canberra, March 2002


This explanation begs the question: what is it about the gold market that
ensures a virtually permanent contango? The answer lies in the historical
purchases and holding of gold on the part of the central banks back in the
days of the gold standard. While pertinent when the Dollar and Sterling were
backed by gold, these holdings become less and less appropriate in modern
day financial management of reserves and currencies. The gold overhang,
held inertly, failed to accrue a return, and non-interest bearing assets no
longer have a place in current portfolio management theory.
Thus it turned out that, to earn its keep, these gold reserves were gradually
mobilised. The presence of this lending provided the liquidity necessary for
this existence and execution of price risk management products. Without
liquidity, the bullion dealing community would not have been able to execute
the transactions and hence they would have been render rather useless
unmarketable products. In short, the central banks as a source of this liquidity
became a key factor in evolution of the gold market.

Now none of this mobilisation of Official gold would have been encouraged if
there had not been a willing borrower of the metal on the other side of the
liquidity equation. Enter the mining companies, all greatly excited by the
1979/80 price rally to the magical $850 level, and hence flush with exploration

All this increased production, as it
rolled off the drawing board and into d’ore trucks, required project financing.
At that stage, US Dollar interest rates were comparatively high. The
differential between the cost of borrowing dollars and borrowing gold was
wide enough to convince the miners of the wisdom of the gold loan – the
original prototype derivative product. The miners borrowed gold from a bullion
bank, sold it to raise capital with the intention of paying it back through future
production from the developed mine. Once financed through metal borrowing,
this new output was subject to price risk, which the miner elected to managed
through increasingly sophisticated bullion base derivatives. This created a
very ready market for a whole range of derivative products for basic forwards
through to vanilla and then exotic options and any combination of these
products that one might care to imagine.

Wed, 11/10/2010 - 13:52 | 716904 GoinFawr
GoinFawr's picture

So why with Au/Ag at these prices in pretty fiat paper are mining companies closing hedge books, ignoring GS`s advice to do the opposite?

Ans. 2002 this isn`t.


Wed, 11/10/2010 - 14:02 | 716939 clymer
clymer's picture

Agreed. There is no historical precedent for these times. In 1980, we still had 75% of the worlds corporations, much of the industry, and were only 9 years outside of the gold standard - still a major ideology battle dividing the globe with nukes pointed in two primary directions. Today we have a world of ballooning fiat paper, combined with a mass awakening globally regarding exactly how money works, and who is running the planet. I'd say faith in fiat is declining in rapid acceleration.

Wed, 11/10/2010 - 14:20 | 716973 Spalding_Smailes
Spalding_Smailes's picture

Who knows but the cb's are sitting on most of the gold and all are friends of uncle ben ....

Why would they allow gold to kill the party for all???


All the debts are in dollars !!!! The mining equipment, the bank debt, everything. This bet that the dollar is crashing is total madness. Dollar debt needs to be serviced, day after day after day in dollars oil, shipping trade ect continue to issue dollar denominated debt to be serviced in the future ....

5.2.1 ---A change in producer hedging policy

Suppose that all producers decide to allow their existing hedges to run to maturity,
but not to take out any new hedges. The size of the aggregate producer hedge
book would decline by some 800 tonnes in the first year alone. The banking
sector would have that much less in the way of forward sales to hedge and would
reduce its borrowing of gold by a similar amount.
Lease rates would decline sharply. In the short term lenders of gold are not sensitive to
lease rates so the impact of the reduction in demand would fall directly on the cost of
borrowing. Lease rates are likely to decline to levels where many lenders would not
find it worth while lending at all; this floor level is probably in the region of 0.5%.
The effect on the gold price is not so clear. There is mixed evidence as to whether
the build up in hedging depressed the gold price; a reversal of the build up might
also fail to have a clear impact on the gold price. Against this, it could be argued

that the hedge book built up gradually over a decade; a sharp decline in the hedge
book might have a more noticeable impact.
But there are good reasons to believe that any impact on the price is likely to be
self-limiting. A steep rise in spot prices caused by a scramble for gold to repay
gold loaned from the official sector would be widely seen as temporary. A temporary
peak in the gold price accompanied by abundant supplies of physical gold
available for borrowing at low rates creates the ideal environment for short sellers
to come into the market. The short sellers could be speculators and hedge funds.
They could also include commercial banks, deciding to continue to borrow gold
and maintain a short position even when there is no longer an offsetting purchase
contract with a producer to offset the risk. These would all help mitigate the
severity of the price impact.

Wed, 11/10/2010 - 14:39 | 717040 GoinFawr
GoinFawr's picture

"Who knows but the cb's are sitting on most of the gold and all are friends of uncle ben ....

Why would they allow gold to kill the party for all???"

If the endgame for pretty bitz of paper is indeed fast approaching, they won't have any choice. IE If everyone is waking up with a brutal headache from sniffing all the ink, well then the party's almost over anyway.

I wouldn't count on foreign CB's (the ones that have yet to acquire a GS alumni as governor anyway) they will do what they decide is best for their respective countries, not the US' corporate interests. In all likelihood they will-view/have-been-viewing any strength in USD as an opportunity... to divest while the divesting is still good. They can yet be forced, cajoled or coerced perhaps, but that hegemony is quite likely on its way out; I wouldn't count on it too much longer, anyway.

JMHO, natch.


Wed, 11/10/2010 - 17:57 | 717837 Al Gorerhythm
Al Gorerhythm's picture

Wish you'd stop posting (in code).

Wed, 11/10/2010 - 20:44 | 718293 barkster
barkster's picture

or stop posting (period).

Wed, 11/10/2010 - 22:22 | 718525 GoinFawr
GoinFawr's picture

hear him, hear him (here).

Wed, 11/10/2010 - 13:12 | 716765 UnRealized Reality
UnRealized Reality's picture

I'll tell you what I would do. I'm sitting on tons of Equity in my house and plan to sell in about 2 years. Tough shit, if I have to lower my price to get rid of my house house,so be it. It his stupid ass problem that he is looking to turn a quite profit,or underwater or whatever. My family comes first.

Wed, 11/10/2010 - 14:03 | 716942 moregoldplease
moregoldplease's picture

Silver and gold physical are not investments at the moment. They are simply one form of protection available during the coming storm. I am not worried about selling as I never will, barter probably, paper no.


Clearly in a healthy market stocks and bonds of corporations that are producing profits are the best investment.

Wed, 11/10/2010 - 12:53 | 716690 Ripped Chunk
Ripped Chunk's picture

You should keep the nitrous tank shut down until at least lunch.  Just a thought.

Wed, 11/10/2010 - 12:39 | 716629 truont
truont's picture

"Only Entities Short Are Fed-Backed Banks. Nobody In Their Right Mind Would Be Short Here"

Also, according to Gene Arensberg,

these fed-backed banks are NOT significantly increasing their short positions that they already have.  They are just staying pat.  This implies that they are not confident in lower prices soon, but they are not willing to cover their short positions?

Why won't they cover, then?

Because they don't have to.  They are FED-backed.

Wed, 11/10/2010 - 12:41 | 716640 SheepDog-One
SheepDog-One's picture

FED backed, with more imaginary dollars. Seems things are less impressed by the printing press these days. Law of diminishing returns becoming a motherfuker for the FED backed entities.

Wed, 11/10/2010 - 12:39 | 716632 SheepDog-One
SheepDog-One's picture

Hey Tyler are you going to run the picture of Obungler bowing to Hu Jintao this morning? LOL whats wrong with that idiot?

Wed, 11/10/2010 - 12:41 | 716639 truont
truont's picture

China has a deathlock on Bama by the balls, and Bama knows it.

Wed, 11/10/2010 - 13:04 | 716738 Big Corked Boots
Big Corked Boots's picture

One kilo of silver bet that he asked Hu to please not  fire any more missles from our waters.

Wed, 11/10/2010 - 13:13 | 716773 SheepDog-One
SheepDog-One's picture

Ah please, no more missile firings near L.A. please Mr

Wed, 11/10/2010 - 13:07 | 716750 Hook Line and S...
Hook Line and Sphincter's picture

Yes, but there is a sort of submissive delight you can read under his main expression.

Wed, 11/10/2010 - 13:08 | 716751 Problem Is
Problem Is's picture

"Obungler bowing to Hu Jintao... LOL whats wrong with that idiot?"

That is just the CIA MK-Ultra mind control kicking in...

Wed, 11/10/2010 - 12:43 | 716637 justbuygold
justbuygold's picture

There is currently an attempt by several major buyers to squeeze these big banks out of their massive short. Sprott's massive buy order really played into this well.  Just try and find and silver at any major refiner and you will find there is a 6-12 month waiting list ( and growing) . Silver will be north of $50 before long...just watch !  JP Morgan and HSBC can't stop it anymore because they are being closely watched by the CFTC.

Also consider the recent margin changes on silver as a desperate attempt to stop what very well could be an all out default of paper silver on the Comex. 


Wed, 11/10/2010 - 12:46 | 716658 SheepDog-One
SheepDog-One's picture

Silver and gold STILL near record highs, and the gravestone is being chiseled by everyone?

Funny, I dont see the same concern over stock markets which look very weak days after delivery of QE2 was touted as the launch pad for some massive run up. 

Wheres the death rattle 'stick a fork in em' posts for stocks?

Wed, 11/10/2010 - 12:57 | 716705 bankonzhongguo
bankonzhongguo's picture

Adjusted for inflation, the gold highs of 1980 were around $2,300 an oz.  At the time, people with little money to spend were running around buying Krugerrands for no other reason than it was in the news.  Think of all those gold bugs buying around $800 in 1980, they still won't beak even until ...

I love PM.  It makes me warm and happy inside, but these so called "markets" are beyond description.  Caveat emptor.

Wed, 11/10/2010 - 13:14 | 716779 SheepDog-One
SheepDog-One's picture

Adjusted for inflation and currency conditions, DOW 11,200 is actually less valuable than DOW 6,500. Paradigms everywhere.

Wed, 11/10/2010 - 14:52 | 717107 goldsaver
goldsaver's picture

Adjusted for inflation $1 FRN is only worth 3 cents. Next!

Wed, 11/10/2010 - 13:48 | 716900 Saxxon
Saxxon's picture

Interesting to contrast those times to the present, wherein Joe Sixpack is being pressed from all sides into selling the silverware to pay the bills.

Wed, 11/10/2010 - 14:11 | 716968 Fred Hayek
Fred Hayek's picture

If you were 55 years old in 1980, you were 8 years old in 1933 when Roosevelt confiscated gold and took us a little further off the gold standard.  You probably had some recollection of money backed by gold and had probably seen some gold coins as a kid. 

People like that were a significant portion of the overall populace back in 1980.  Thirty years further down the road, there's no portion of the populace that has casually experienced the use of gold coins as money or gold as the backing of their currency.  There are people, such as many of those here, who through chosen ideology see value in gold but the casual experience of gold's former position in the economy of the nation is gone.

I think this is a big factor in the lack of widespread interest in gold and silver among the populace in 2010.  And it will likely slow the formation of any sort of bubble.

Wed, 11/10/2010 - 14:54 | 717120 Almost Solvent
Almost Solvent's picture


Many young adults under 30 today view gold as bling, to be paired with diamonds viewed as ice. Many of them are buying gold because it's bling and their favorite athlete/star wears it dripping all over.


Maybe if Eminem or Denzel came out with a PSA on fiat vs. gold, then we might see a bubble overnight.

Wed, 11/10/2010 - 12:47 | 716662 qussl3
qussl3's picture

It will probably come down to who really controls HSBC, the Chinese are looking to establish a commodities trading venue within their borders and this is likely a play to break confidence in the comex.

Wed, 11/10/2010 - 12:42 | 716644 uberfinch
uberfinch's picture

Sheepdog: you have a bad case of keyboard diarrhea. Please think and read more and type less.

Wed, 11/10/2010 - 12:49 | 716671 SheepDog-One
SheepDog-One's picture

Hey I got a suggestion for you, go fuck yourself.

Wed, 11/10/2010 - 12:52 | 716682 uberfinch
uberfinch's picture

Dude you don't read anyone's posts.  You just spew shit out.  Every two minutes I refresh you have a new post up.  And yesterday you trashed me for mentioning SLW in a flash crash.  Just think a little before you type.  It's all I'm asking.

Wed, 11/10/2010 - 13:18 | 716686 SheepDog-One
SheepDog-One's picture


SLW in a flash crash...hey did ya post any stock flash crash news alerts?

Wed, 11/10/2010 - 12:48 | 716657 TWORIVER
TWORIVER's picture

Dead cat bounce off of 26.5, now 27.25 on no volume...will break towards 25 before 1:30pm. The only thing keeping all mkts from tanking is the strength in the AUD/JPY and if that stops...

Wed, 11/10/2010 - 12:55 | 716698 uberfinch
uberfinch's picture

What are you talking about, "low volume"? Volume is still higher than previous week's daily average.

Wed, 11/10/2010 - 13:16 | 716723 TWORIVER
TWORIVER's picture

I am refering to the volume on the bounce from the low made at 26.5 earlier today. Weak volume bounce = lower prices. They will put it to 25 today. A quint junk!!! Each new junk is worth another dime lower! I should have 27 total by 4pm. Still working as Silver has dropped 20 cents on the last two new ones.

Wed, 11/10/2010 - 13:28 | 716825 TWORIVER
TWORIVER's picture

Two new junks and 20 cents lower. Maybe you guys can help me figure out a way to arb your junks and Silver.

Wed, 11/10/2010 - 13:55 | 716920 TWORIVER
TWORIVER's picture

Going to be a mad rush to new lows to 1:30pm. Now at 26.85, heading to 25.

Wed, 11/10/2010 - 16:13 | 717462 Turd Ferguson
Turd Ferguson's picture

If you're going to start making time and price predictions, you might want to be a little accurate.

Wed, 11/10/2010 - 16:51 | 717569 GoinFawr
GoinFawr's picture

Deuxriviers: Was that 1:30pm  GMT, EST, Mountain Time or PST? Today? tomorrow? 2012? 2301? AD or BC? Perhaps you meant in EUR? or CAD mb?

Just trying to open it up a bit to give you the chance to be right....

Wed, 11/10/2010 - 17:42 | 717782 Cathartes Aura
Cathartes Aura's picture

I'll play.

it's 1:43pm Pacific Standard Time, silver @ 27.25., off a low of 26.43.

*waves* at Mr. Ferguson!

Wed, 11/10/2010 - 13:53 | 716915 Saxxon
Saxxon's picture

Then allow me to assist!  I junked you so the price goes down so I can add!

Wed, 11/10/2010 - 14:01 | 716935 TWORIVER
TWORIVER's picture

As you wish. Your junk matched your avatar and was good for 30 cents!!!

Wed, 11/10/2010 - 18:17 | 717882 Millivanilli
Millivanilli's picture

You are a good candidate for an ear fuck, given that your head is empty.  Now if you could find another pencil dick, you'd be in for a good time.

Wed, 11/10/2010 - 12:46 | 716663 MGA_1
MGA_1's picture

Hmm... one wonders if this may be the fault line that ripples through the financial markets.  Fed backed banks refuse to honor shorts or the comex changes rules again - asians get angry...

Wed, 11/10/2010 - 12:48 | 716668 Clint Liquor
Clint Liquor's picture

The CFTC is a limp dick.

Wed, 11/10/2010 - 12:51 | 716681 dildo o flaherty
dildo o flaherty's picture


Wed, 11/10/2010 - 12:54 | 716691 RobotTrader
RobotTrader's picture

When is Eric King going to break down and interview some car company CEO's like Michael Jackson??

Car sales are booming.

Wed, 11/10/2010 - 12:58 | 716707 SheepDog-One
SheepDog-One's picture

Uh, just a bit misleading there Robo. Dont you mean USED car sales are up? CarMax? Really?

Wed, 11/10/2010 - 13:30 | 716834 tmosley
tmosley's picture

To be fair, it's hard for him to see through all the Johnny Jizz he's got in his eyes.

Wed, 11/10/2010 - 13:13 | 716766 firstdivision
firstdivision's picture

LVS has been teetering this week.  Down nearly 10% in the past few days.  Hope the POMO comes with some PCLN coupons to use to stay at a LVS, to rent from NFLX, and an AAPL iTunes gift card.

Wed, 11/10/2010 - 13:33 | 716847 Lucky Guesst
Lucky Guesst's picture

I'm just curious. Is there a way to know if the buyers are people or government and subsidized entities?

Wed, 11/10/2010 - 13:49 | 716901 JonNadler
JonNadler's picture

I just bought a Royce with my HSBC kickbacks. Robot do you like the new model?

By the way Jamie says the staff meeting for 1PM has been cancelled. He has an appointment at the Venezuelan Consulate. Hmmm?

Wed, 11/10/2010 - 16:45 | 717549 GoinFawr
GoinFawr's picture

Don't bother asking it questions, it doesn't answer unless you are stroking it. It just puts the lotion on its skin...

I love the new avatar btw, all you need to complete it is an animated boot-to-the-head coming in from off-screen.

Wed, 11/10/2010 - 12:54 | 716693 the rookie cynic
the rookie cynic's picture

I'm starting to think that maybe buying silver is a moral duty, not just an investment.

Wed, 11/10/2010 - 14:35 | 717055 faustian bargain
faustian bargain's picture

+1, be your own central banker.

Wed, 11/10/2010 - 17:59 | 717847 Cathartes Aura
Cathartes Aura's picture

I opted out of most aspects of "the system" years ago; however, many great arguments here at ZH convinced me to buy physical silver, which feels like a "personal statement" more than an "investment". . .

we can all learn from ZH'er merehuman, who has given away hundreds of silver eagles to his neighbours, hoping to make them more aware of the situation around them. . .

Wed, 11/10/2010 - 13:00 | 716714 BennyBoy
BennyBoy's picture

One side is backed by FED paper.

The other side is backed by US Treasury paper.

Both mediums of exchange in a race to zero.

Wed, 11/10/2010 - 13:00 | 716717 erik
erik's picture

we are following April's 14-19th action after an RSI ~80 reading right now in the S&P.  we had a pullback day, followed by an early pullback trade the next day (today) and then a serious bid for the rest of the day to finish the market green.  from there we went back to the highs again.  of course, we topped a couple weeks later.  but april did not have QE2 POMOs on the way, so we have to watch and wait to see their effects.

Wed, 11/10/2010 - 13:04 | 716734 SheepDog-One
SheepDog-One's picture

I sense they may have hit the wall on this POMO nonsense, its effectiveness has become weak and everyone just sets up to front run the hell out of it all.

Wed, 11/10/2010 - 13:56 | 716917 erik
erik's picture

sheep, believe me, i want reality to bite the stock market, but at this point using recent history as a guide the likely path until the end of the week is unfortunately higher.  today should slowly grind higher and finish green.  there is too much dip buying psychology right now to have a big break hold on the first attempt.

now, once we see the mid-to-high 1220s again, we'll run right back into the 61.8% Fibonacci re-trace of 1228.  we've sold there twice already, on Friday and yesterday.  i expect we'll see those levels re-tested again within a few days.

January top and April top were very similar, 3 huge swings up and down.  So far we are on swing number one on this potential top.

Wed, 11/10/2010 - 14:28 | 717026 RockyRacoon
RockyRacoon's picture

Are you sure that charting is all that effective when the rug can be pulled out from under anything at anytime by anyone?

Wed, 11/10/2010 - 15:10 | 717206 anony
anony's picture

Until that question remains 'unasked',  it's 90/10 against rug yank.

Wed, 11/10/2010 - 15:17 | 717240 erik
erik's picture

Rocky, in this case I just look for precedents in history.  It never repeats but it often rhymes.  In this case, we saw an RSI ~80 in the SPY, and we saw a small selloff follow, just like the last 9 times I studied it back to 1997.  We saw selloffs from top to bottom that ranged from 1.48% to 5.69%, and they took place within 3-7 days.  In this case, it took 5 trading days and we dropped 1.85% in the SPY, which is pretty much median performance for the data.

Now given that context, I look at the manner in which they sell off, and this particular one is very similar so far to the April 14-16 action.  That is a big concern considering that it preceded a major top.  So we must watch very closely to see if we get the 3 big drops, 3 big ramps like we did in Jan 2010 and Apr 2010.  Since we are following that path so far, I suggested that we will grind higher into the close today, and re-test the highs in the next few days.  We will probably finish up again tomorrow given April's context, but that is less certain than today's reversal.

Wed, 11/10/2010 - 17:23 | 717711 RockyRacoon
RockyRacoon's picture

Best of luck to you.  It works until it doesn't I suppose.

I like charting and can get really wrapped up in it -- which is the problem.

Wed, 11/10/2010 - 15:29 | 717304 SheepDog-One
SheepDog-One's picture

Dip buying by who? Bernanke? Keep goin for it, China warming up another ICBM off the LA shoreline as we speak.

Wed, 11/10/2010 - 15:53 | 717390 erik
erik's picture

sheep, i'm a bear long term without a doubt.  QE2 will not solve problems, it will create worse problems.  the Fed will eventually strangle themselves with it.

i am not "goin for it", these are very short-term trades based upon recent historical precedent. 

the rug will be yanked, and whether it is the treasury market telling the Fed to f_ck off or the Fed pulling back on the reigns, either way it'll be rapid and atrocious.  however, we have a 50-50 chance that the 61.8% Fibonacci at 1228 holds in the S&P.  if it doesn't, then my guess is we'll get an upward rocket of short capitulation and extreme bubble readings within a couple months maximum as everyone will be on the "Fed will never let the market go down" bandwagon.  that will be a highway to heaven for those who get out in time... and hell for those who don't.  as always.


Wed, 11/10/2010 - 13:02 | 716725 nazir2000
nazir2000's picture

pumping silver here after the meteoric rise and a key reversal yesterday is suicidal


these bullish silver articles are all baked into the silver price imo


22 before we see 30 again imho

Wed, 11/10/2010 - 13:13 | 716775 Bay of Pigs
Bay of Pigs's picture

Go short then. How is it "suicidal" for those buying and holding physical?  

Wed, 11/10/2010 - 13:17 | 716784 SheepDog-One
SheepDog-One's picture

Ok but far as anyone knows '$30 again' may be tomorrow.

Wed, 11/10/2010 - 13:22 | 716806 JLee2027
JLee2027's picture

You guys are so brave when the price

Wait until the 2pm POMO.

Wed, 11/10/2010 - 13:30 | 716832 rapacious rachel wants to know (not verified)
rapacious rachel wants to know's picture

"22 before we see 30 again imho"


Wed, 11/10/2010 - 13:34 | 716846 dussasr
dussasr's picture

I second that...

Wed, 11/10/2010 - 13:57 | 716928 Sands8oo
Sands8oo's picture

Good luck with that - this guy called the 25.50 margin threshold to the hour and you're here to pipe up from the peanut gallery?


I know who I'll be listening to - good luck w/ your 22 call - if the manipulation wasn't blowing up in people's faces,  I might agree with you, but time to change thinking here.

Wed, 11/10/2010 - 14:37 | 717061 faustian bargain
faustian bargain's picture

The USA is suicidal.

Wed, 11/10/2010 - 13:04 | 716735 lsbumblebee
lsbumblebee's picture

I will be interesting to see what else they have in their bag of tricks to avoid a commercial signal failure when December options expire.

Wed, 11/10/2010 - 13:13 | 716748 TWORIVER
TWORIVER's picture

I don't see what the big deal about raising margin requirements on an asset that has gone up 50% to new highs in less that 3 months. If the SP futures did that and they did not raise margin requirements, you guys would demand a goverment investgation. just saying. What about it Tyler? Wouldn't you expect SP500 futures marging requiremnts to increase under the same scenario? Thanks.

Wed, 11/10/2010 - 13:14 | 716776 Bartanist
Bartanist's picture

Wow, cool!!

I wonder why China increased their 2011 silver export quote by 20% given that there is so much demand for physical silver in Asia.

Are they just being nice guys?

Wed, 11/10/2010 - 13:32 | 716839 spartan117
spartan117's picture

It's 11%.  Where did you get 20%?  And 2010's 5100 tons were never even met due to internal consumption, so it's all academic.


Wed, 11/10/2010 - 13:35 | 716786 Shakey
Shakey's picture

Tworiver:  Agreed.  I'm bullish Ag, but don't think the principle of raising margin requirements is problematic.  I think many here are taking issue with the particular timing though.

Wed, 11/10/2010 - 13:22 | 716802 Abiotic Oil
Abiotic Oil's picture

APMEX physical stock on silver bullion is about depleted it appears. It looks like one could not purchase a 100 toz bar until Nov 24th at this point, if they actually get that shipment.

1 toz rounds are out except for a couple of styles.

Wed, 11/10/2010 - 13:39 | 716864 Bastiat
Bastiat's picture

Whoever said this guy was BS should consider how exactly correct his call was when he said, the other day that a few hours over $25.50 would break the weaker shorts and trigger a squeeze. 

Wed, 11/10/2010 - 13:48 | 716898 Sands8oo
Sands8oo's picture



This guy NAILED the 25.50 margin threshold to the hour - so you gonna trust some fuckwad on ZH talking his short-silver book or you gonna trust the guy who put big money where his mouth was on the way up (which is tough to do!)


People need to STOP trying to apply technical analysis to this market - its MANIPULATED - get it?  Tech analysis don't work 'round here fuckwads...  Hope the $30 silver train runs right up your short-covering asshole!



Wed, 11/10/2010 - 14:06 | 716951 Kaiser Sousa
Kaiser Sousa's picture

Sands800 -

finally someone else fucking get's sick of that "technical correction" bullshit...

there r no markets - just fraud...the phony paper price of Gold & Silver have nothing to do with their "real value".... for fucks sake people put that lame assesment to rest...

Wed, 11/10/2010 - 14:12 | 716979 Sands8oo
Sands8oo's picture


If you haven't conditioned your mind (and trading/investment mentality) to accept that, you are going to flat out lose because the manipulation blowing up the FEDs shit in all the banks faces just gets plain messy and doesn't move according to technical patterns - you will be left out in the cold...

Appears some ZH readers will be amongst the victims


Wed, 11/10/2010 - 18:29 | 717939 Strider52
Strider52's picture

Yeah, take your Fibo and shove it up your Nacci.

Wed, 11/10/2010 - 14:12 | 716978 Bastiat
Bastiat's picture

I took that trade too -- that always makes a real impression!


Wed, 11/10/2010 - 13:41 | 716873 Sands8oo
Sands8oo's picture



Did you read the fucking article?  Its not nefarious, but if the only banks SHORT are FED-BACKED it makes it easier to pony up the puny margin requirement when you're borrwing at basically 0%


What about that situation doesn't make sense to you?  

Wed, 11/10/2010 - 21:31 | 718415 StychoKiller
StychoKiller's picture

The part that doesn't make sense to me is:  How are the private owners of the Fed making currency on all of this?

Wed, 11/10/2010 - 13:49 | 716903 Oh regional Indian
Oh regional Indian's picture

I can confirm severe physical squeeze here in India. Everyone is hoarding. 

My dealer said metal is being hoarded at every level of the chain. 

I had to wait for a barrage of phone calls back and forth between dealer and bullion merchant before getting a price, the volatility had them spooked and excited.


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