PM Selloff Reason: CME To Raise Margin Requirements For Silver From $5,000 To $6,500

Tyler Durden's picture

And if that doesn't work, there is always confiscation.

"CME confirmed silver margins raised from $5000 to $6500 (30%) effective 11/10 settl - no other metals effected"

Presumably, this affects the maintenance margin. And is a lovely way to kill paper longs.... but not shorts, of course.

This is also the last remaining self-regulating way for the market to tell the genocidal lunatic in the Eccles building to go fornicate himself, and his excess liquidity.

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Dr. Richard Head's picture

Hmmmm....I didn't buy on margin.  Guess it's time to dip into the old Federal Reserve Note pile o' mine and gets me some more. 

traderjoe's picture

As I mentioned on a couple of other threads, APMEX is out of 100 oz silver bars for immediate delivery. 

Dr. Richard Head's picture

I purchased a couple of the kilo coins a few weeks back, but then last week had to resort to lots of 10 oz coins, splashed with assorted 1 oz coins.  Never did get the bars for silver, but Gold was nice to buy that way back in the $750's.  I miss those days.

akat's picture

 I bought a couple of gold bars at the $400 area about 5 years ago.  I wish I had bought 25 instead.  With this crisis looking like it is just beginning gold may go to $5000 an ounce.  Of course that would be in those inflationless dollar Gentle Ben is printing by the carload(no), helicopterload(no), boatload(no), 747load(no), aircraftcarrierload(about right if a little smallish).

High Plains Drifter's picture

Do they call you Dick for short, but not for long?



Problem Is's picture

Well Penis Brain would be another name for Richard "Dick" Head...

No offense intended, Dr. Dick...

DosZap's picture


"Gold was nice to buy that way back in the $750's.  I miss those days."

Now be honest, you were thinking $750!!!!!!!!!!!!!, back then,NOW WE miss those days...not @$750.00.........LOL

DosZap's picture


sorry bro,last I checked before coming here, they had a few of different types.

They kind of HAVE it in "SMALL" print on the slight delay status.

Try here..if the price is right, ask for John Coyne, tell him a LONG time 3 digit customer told you to call him.

fightthepower's picture

This is just another reason not to buy futures, but to own physical. 

Walter_Sobchak's picture

How can anyone even question the manipulation at this point?

Dr. Richard Head's picture

How could anyone question owning PMs while Benny is flipping feddies from his fannie?

erik's picture

Since the rule is effective 11/10 (tomorrow), does that mean that we'll see one more day of deleveraging selloff in SLV and GLD?

DosZap's picture

I cannot believe anyone would be buying on margin, but if they think $1500.00 is gonna stop them, their nuts.

erik's picture

Since the margin change is effective after close of business tomorrow...

Does that mean that brokers will force de-leveraging on Thursday morning if you don't do it by close of business tomorrow?

Have the majority of the leveraged positions been de-leveraged by close today or will there be a substantial amount tomorrow as well?

The real question is how much leverage has been utilized in the run-up.  I guess we will know by Thursday morning at the latest.

66Sexy's picture

doesnt this prevent a bubble?

EscapeKey's picture

Funny how Soybeans, Sugar and Cotton are allowed to soar, but silver isn't.


beanieville's picture

That's because silver smells like ponzi or tulip.

Bay of Pigs's picture

Fuck you're dumb. Why do you post here on the silver threads anyway?

beanieville's picture

When gold and silver crashes at higher prices (if they go higher), then the parabolic decline will probably be 10 times worse as todays.

I'd like to own some silver and gold but I don't know how to evaluate what they're really worth, and neither does anyone.

I think it's just Tulips part deux, and that's scary.

UncleFurker's picture


You bury tulips in the ground and dig 'em up 200 years later and see how much they're worth compared to gold and silver.


Jean Valjean's picture

Well you just hang on to those FRN's of yours then.

Millivanilli's picture

You should buy the 30 year treasury notes.  Fuckwad!

Cow's picture

Why do you get so upset just because he disagrees with you?

Captain Courageous's picture

WTF is your problem...why so personal?

Does the mere difference of perspective challenge your manhood?

or do you just know everything?

traderjoe's picture

From your link: "Do gold bugs really believe that the debasement of currencies will take us back to gold system (and the barter system, to an extent)? Not really, truthfully. They're pumping gold endlessly, so when it gets all frenzied up with the Average Joes bidding it up Tulipmania-style, they're all gonna dump their shares of GLD or GDXJ or NG, or GG, hard and heavy on the latecomers and you'll never hear from the gold bugs again.

Incidentally, once they sell their shares of GLD, GDXJ, NG, GG, the shares get CONVERTED BACK to US Dollar (fiat money) in their brokerage accounts. So you know the gold bugs buying gold shares don't really believe the Dollar will disappear."

I don't think you "get it". I don't know what gold is "worth" either. But I do know what an FRN is worth - nothing. It's a piece of cotton and ink that represents a corrupt and bankrupt system. I will NEVER trade my physical back in for FRN's. I don't care what the price is. Physical gold and silver are hedges for the corruption and eventual bankruptcy of the system. Do you understand diversification? Does that not include possible and likely scenarios of fiat currency destruction? Has a fiat currency system EVER survived forever? So, yes, I do believe we will be going back to a barter system - at least for a time. And if and when that happens I will be able to feed, clothe, and defend my family. And if it doesn't happen, that's fine too. I'm not all in. I'm diversified. 

beanieville's picture

You are not kidding me, right?  We will never return to the gold and silver as standard currency because physicals are inconvenient and the current human population we have today makes it even more impossible.  Paper or electronic is where we'll always be at.  


If you're worry about the dollar, go to a swiss bank and convert your dollars to swiss or any currency that you think will survive.  


You think all currencies will die?  Worldwide gold/silver standard on 9 billion human population?  C'mon man. 

Calculated_Risk's picture

"We will never return to the gold and silver as standard currency because physicals are inconvenient"


Yes, honesty is inconvenient to bankers and lawyers...

traderjoe's picture

Unlike you, I'm not sure of anything. I'm diversified for a variety of possible outcomes. 

You really think if a paper system collapses, that people will immediately accept paper? Have you read any stories about what people had to do to get food in Weimar Germany? 

You really think if the USD collapses that any fiat currency will survive?

As I said, your link has flawed logic. It doesn't think like a true gold bug does. I don't know what will happen. I'm diversified. We shall see...

tmosley's picture

That's what the Chinese probably thought as thier population surpassed 100 million around 1200 AD.

This is shortly before their population plunged as their currency collapsed, and they spend the next 700 years on a silver standard.

The more things change, the more they stay the same.

Saxxon's picture

Both arguments are correct imvho.  We won't return to a PM-based currency because it is simply too unwieldy, even if PMs were not the enemy of Der Stadt; but that does not preclude PMs from rising very, very nicely in any event.

goldsaver's picture

Why would it be unwieldy? You are thinking that prices would remain the same in metallic vs. cotton standard. They would not. So for example, instead of you paying $4 FRNs for your morning Starsucks, you would pay 2 silver dimes. Same current value, different price. A good dinner could cost you $60 FRNs or $2 Silver dollars. Same dinner, different prices. You would have the option of having private holding companies, similar to banks, holding a metallic account for you and issuing a debit card to be charged against your account. This private institutions would not be allowed to ever use fractional banking and would make money by charging a fee, similar to credit/debit card fees today, to the merchants that you do business with. The vendor would then have the option of settling daily in metallic or FRN at daily open market spot price. The private holding house would be similar to paypal today.

The key of this is motivation and information. I can today, walk into selected restaurants I have done business with in the past, and use this system. But is not widely used.

The key is the tax code. We need a court decision that says that the face value of metallic is the taxable value of the coin. With that most people would automatically prefer the extreme tax cut that this would represent. Imagine if you can. Your Boss gives you an option. Be paid $1500 FRNs a week or $50 in gold. What would you rather report to the IRS, a 90K a year salary or a $600 a year salary? That is the key. 

GoinFawr's picture

Now that is how you handle perspective. Well said.

Zé Cacetudo's picture

We need a court decision that says that the face value of metallic is the taxable value of the coin.

I believe there was just such a case in Federal court - a business owner in Las Vegas was paying his employees or contractors with gold and/or silver eagles, and the IRS went after him for under-reporting his salaries. The IRS lost in 2007:

However, it looks like they nailed him to the wall 2 years later, when he got 15 years in the joint for tax evasion etc:

Make of that what you will. And note that this was a trial, not an appeal that would create case law precedent.

GoinFawr's picture

Made an example of him; I wonder why? Not to mention it brings to light the inherent dichotomy of a 50 'dollar' coin that has a melt value of 1500 plus 'dollars'.

Of course, 300 million or so cases might overwhelm the system, no?

Internet Tough Guy's picture

If you don't know how to value PMs why do you want to buy them?

realitybiter's picture

You're right.  The dollar will continue to be a wellspring of wealth that we can draw from foreever and ever.  Just write another bond and hand the money over to the worthy Americans.  Right.  

High Plains Drifter's picture

As a metal head, I totally agree. I have faith that my government will muck it up real good and that my pm holdings will continue their atmospheric rise. Come to poppa.

Nels's picture

We will never return to the gold and silver as standard currency because physicals are inconvenient...

Numbskull, read your history.  Paper money did exist in 1912, before the Federal Reserve was created, and while we were on the gold standard.  Metals are somewhat inconvenient to carry, which is why the gold standard meant that one piece of paper marked $1 was defined to be the equivalent of 1/35 of an ounce of gold.   Being on the gold standard doesn't mean you only carry gold, but that gold is the standard of meaning for what the paper money is worth, and that you can go to the bank and exchange your paper for a known amount of gold.

A gold standard is very inconvenient for partial reserve bankers.  It means that they can go broke too.  Fiat money means that the TBTF bankers never have to lose, or at least that was the plan from 1913.

All currencies might not die (i.e. go to zero), but any one could.  Gold won't.

9 billion folks, and how many million ounces of gold?  Wikipedia states the gold available as 165,000 tonnes, which I figure roughly to 1/2 oz/person.   That's currently $700 or so per person.   That's not much by US standards, close to Wikipedia's median world wide annual income of $825.   So, gold would work to provide a basis for commerce, though the value might go much higher than it is currently.

They let anybody in on ZH these days.  Groucho had it right - once they let me in, I should have known it would go downhill.

spdrdr's picture

"9 billion folks, and how many million ounces of gold?"

WTF did 9 billion come from?  Sort of like those sea-levels rising and glaciers melting, i.e. totally lacking in any empirical substance.

Think before you post....





hamstercheese's picture

Would you currently accept a gold or silver coin in exchange for any goods or services?

walküre's picture

I would. Preferred form of payment actually. I have enough paper that's becoming worth less and less each day to last for years.

Huxley Ann's picture



As I type this, New York spot gold is down 1.43% from yesterday's close. If we were talking about a share of stock down 1.43% on the day, we wouldn't BE talking about it.



Pegasus Muse's picture

Particularly given the take-down was totally orchestrated by the Evil Empire.  Ben and the EE do not get much bang for the buck with the rule change.

Today is a defining moment for the CFTC.  Will Bart Chilton and CFTC allow this bullshit to stand or will they reverse it.

If the CME increases margin on the Longs then they ought to do the same to the Shorts.

If the CME makes margin requirement changes to Silver why not the other commodities?


Bill Lumbergh's picture

Your blog entitled "A Better Way to Trade Stocks" should be changed to "Buy, Hold, & Keep the Fingers Crossed".

outamyeffinway's picture

They will fall no doubt but only on paper. Physical will be nearly impossible to get. Then you will cry as will many others. Many will drown from all the tears. Ears will be split from the wailing.

akak's picture

Beanieville: The new residence of JohnnyBravo.


BV, I suggest you go out and buy some Beano, as you are blowing an excessive amount of acrid flatulence here today.