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Silver Backwardation Doubles Overnight
Yesterday we correctly predicted that the entire 10% silver correction would be momentarily taken out as the Comex news is properly digested. And so it continues - as silver is once again pennies away from $50 and a fresh new nominal all time high, we take a quick look at the futures curve where as expected the backwardation is confirming the "negative convexity" (yes, yes, we know silver is not a duration security) once the $50 stops are taken out will send silver surging to unseen before levels (which also considering it will be at a new record over $50 is pretty much intuitive). In the meantime, the chart below is the worst nightmare of anyone still holding short silver positions. While the near-far contract backwardation was about $0.75 yesterday, it has since doubled in less than 24 hours. We can't wait to see what surprising nuggets the Comex will bring us today.
And 5 day silver chart:
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There must also be a bull in new profile name requests from ZH topcalling trolls.
The porch is crowded this morning. LOL
+1
ZH, be a little fair. IT DID NOT go back to 49.79. Prime trading market, with a short bias would make you a lot of money. Don't buy and hope and definitely don't sell and despair. TRADE, TRADE, TRADE.
"...STILL holding short silver positions." (emphasis mine)
Sorry if it's confusing for you. (I know, I know: YOU initiated your short positions at exactly 50 US bitz and bytes, supahstah that you ah.)
It's a bitch isn't. Need us in the casino making puts and calls and buying shares of etfs. Not buying and sticking in a safe where you 30 megawatt data center can't give you one fucking clue about what to do.
Now they need you to buy 50 million more shares.
http://blogs.barrons.com/focusonfunds/2011/04/28/silver-etf-files-to-sell-50-million-more-shares-as-volume-surges/?mod=yahoobarrons
Ya here's their perspectus.
http://www.youtube.com/watch?v=2x9aTC12OjY
In order to meet rising demand for the popular iShares Silver ETF (SLV), the trust set up to guide the fund is making plans to offer 50 million more shares to institutions.
In a filing with the SEC dated Wednesday, the ETF’s managers list a proposed maximum aggregate offering price of nearly $2.2 billion. The ETF’s parent is the world’s biggest money manager, BlackRock Inc. (BLK)
I see what's going on here. It's japan fallout. JPM screwed blackrock out of 3 billion and now they have to pay for it with ipo on SLV and somehow jack it and pull of a paycheck.
And the plot thickens.
http://www.marketwatch.com/story/blackrock-managing-30b-portfolio-for-jp...
Yup slv and gld etfs are going to blow up. Just a matter of time.
I agree. I made a call to stay in silver positions today, but we are seeing a bear attack right now. The pops are better than the drops so far so I have stayed long.
Seem like the same concerted attack -- physical, etf, and miners all correlated -- that has occurred several times this past week. I'm still long and will probably have to go negative 1% quickly to shake my day's position. Will take profits on strong rally today.
The miners must be easier to short than the metal. Amazed to see silver up and miners down a little today.
Take delivery.
According to wikipedia:
A backwardation starts when the difference between the forward price and the spot price is less than the cost of carry, or when there can be no delivery arbitrage because the asset is not currently available for purchase.
cost of carry is somewhere max. around 0.2% for the may contract hence it is probably the 'or' version - physical sold out, uuups!
I've been out there all week, I'm finally in from the cold and let me tell you, way too many freaks out there. This is the PM anonymous recovery group right? Hi, my name is Americant and I haven't bought any metal since the dip.
Hi Americant. One day at a time ...
his is the PM anonymous recovery group right?
It's the hair of the dog that bit you group.
Hi MasterB, why do I feel dirty when I write that?
Goldfish, I've been rubbing meself with shiny metal all morning with no luck, still no luck. Now I really feel dirty.
There must also be a bull in new profile name requests from ZH topcalling trolls.
yeah I noticed too
I still say that you silver barons are going to get completely fucked in the end. All this bullshit about the Yuan going to a gold backing, it sounds like total bs to me. The dollar will continue to fall for awhile longer and then suddenly it will find its legs and some other currency will be the whipping boy for awhile. This was all planned out already.
Agree with that last part. Except that when the Euro (for eg) goes back to being that 'whipping boy' those pesky Euro-peons will increase THEIR demand for the PM's: you see how this works?
You're mired deep in the hegemonial 'everything is priced in USD' paradigm. Haven't you noticed that quite often these days when the DX/Y dead cats off some intermediate 'bottom' the PM's rise in concert with it? Same goes for when the PM's negate a retracement. (Self-promoting eg here)
IE while it is still fairly simple and effective for Bernanke to call up his old comrade Mark Carney and ask him for some help with the USD/CAD ratio, it is getting progressively more difficult to manipulate the inherently valueless FIATs as a whole against real money that has no counterparty liabilities.
I like to call it 'Divesting while the divestment is still good.'
It doesn't happen every time, not yet; gotta keep the mushrooms in the dark while feeding them bullshit, after all.
Actually the collapse of the European Union would put a HUGE bid in the "metal" although amazingly "it's silver"--the poor man's gold. "Greece paying 25%?" Or "just default to gold?" Or is it Silver? That would be the banks that "lent Greece the 100 billion that is now worthless." Apparently "they believe in the Zero Hedge" motto quite well...as in "hedge, hedge, hedge, hedge, hedge, hedge, hedge, hedge.... But silver? doesn't sound very European...
Actually my statement above wasn't quite complete, I'll round it out:
In the past couple of years when a fiat goes down against its peers investors owning that currency who have a higher standard for their definition of 'money' have been rushing to the PM's to protect themselves from price inflation (or even plain ol' 'inflation'-gotta keep my Mish gold leaf distinctions distinct). When a fiat rises against its peers people flush in that currency have been using their gains as an opportunity to divest will the divesting is still good.
I broke out the stash and played pirate for a bit last night...
Hopefully you had a willing wench to go along with it ;)
actually, ask slewie, usually no ladees about on ze pirate boats, if you know what im sayin
Better for a good nights sleep than Ambien. And it's hard to get to sleep at a decent hour after getting stuck on that damn midnight gardening schedule.
I keep my junk silver in Crown Royal bags, hide them around the house, and draw pirate maps for me kids. Argh!!!!
Good idea, Except my two boys would just be looking for the Whiskey. Little Bastards.
Haha that's fuckin' rich.
That's Genius - Silver investors aren't only smarter but better people
Just keep your hook away from your sack.
Aaaaaaaaaarrrrrrrrggggggghhhhhhhhhhhh!
Avast Cpt. Bernanke! Hand over the Treasury and no one will get hurt!
Aaaaaaaaaarrrrrrrrggggggghhhhhhhhhhhh! What do you mean the Treasury is empty?
Those are as good as money, sir!
http://www.youtube.com/watch?v=7GSXbgfKFWg
Ahh, lol! I needed that.
+1
He would be prosecuted for counterfeiting FRN's for that today.
Blythe Masters Bitchezzz !!!
Isn't her royal title 'The Bitchess of Blythe'?
i love silver
I wonder how Dangertime's awesome short position's doing.
Who do you think is junking all of us? LoL
"YOU GUYS ARE FUCKING MORONS. I'M TELLING YOU! MID-SUMMER AFTER Q2 EARNINGS COME OUT SILVER'S GOING TO DROP OFF A CLIFF"
You heard this talk yet LJS? Q2 earnings = silver/gold collapse?
They can spew all the propaganda they want about PM's. It's all Bullshit. The US Dollar is headed to the scrap bin of all prior fiat currencies. People are only now just waking up and seeing the coming collapse. Before this is over we will see Silver over $1,000 an ounce before it goes to infinity FDR confetti.
Funny to consider that the British Pound Sterling was originally a POUND of sterling silver and today it buys .034 OUNCE
But so what? The dollar and everything else were once the same way, too, and someone could live decently on $5000/yr. in the 1960s before Nixon fucked us. We all know fiat is a colossal crime committed against the non-politically connected, what is your fucking point?
wasn't dissing the pound specifically, just pointing out how the dollar could fall a lot more. take a breath and untwist your knickers...
His point is what you just argumentatively stated.
Foreignors were allowed to trade their dollars for Gold. That privilege was not observed for our citizens however. It was illegal for US to own Gold. Nixon made the best policy decision any President could have made at the time by taking US off of the Gold standard. Are the stinking foreignors better than US?
yeh, but "there all onboard this fiat thing" so "they won't have a clue what hit's them" when the dollar is...."not a pound" either.
It might get a lot worse for dangertime. The GDP numbers seem to indicate we're entering a slowdown. And quite a bit of silver is a byproduct of copper, zinc, and lead production. They won't increase a byproduct's production if the economy tanks. They'll drop a byproduct like a hot potato if their main sellers go down. Moreover, this is from the latest USGS silver report for January 2011 -
"Peru’s Ministry of Energy and Mines reported that silver production declined by 7%, to 3,390 metric tons (t) in 2010 from 3,640 t in 2009. The overall decline was attributed to a 34% production decline at Sociedad Minera El Brocal S.A.’s (Lima, Peru) El Brocal Mine, a 29% decline at Hochschild Mining Plc’s (Lima) Ares Mine, and a 26% decline at Pan American Silver Corp.’s (Vancouver) Quiruvilca Mine."
Demand, meet supply.
Maybe so but just keep in mind that all the miners are going to run their worst ore at these higher prices. Extends the useful life of the mine. Mine MGNT 101
And whats up with Bolivia nationalizing all its mines (including San Bartolme) on May Day. Sorry about that, Coeur D'alane.
didn't evo back down on that?
So you think the slowed down GDP growth will result in less silver supply and therefore less demand? Or are you being sarcastic?
I don't see this ending well either way. Less production = less supply in an already tight market. I see this ending very, very badly and silver hasn't even hit mainstream investment yet. In fact, farrrr from it.
My, what an uncanny resemblence you have to HRH the Bitchess of Blythe...
No, no, not at all, tekhneek. Supply doesn't drive demand, not usually, anyway. I'm saying that production of silver is not necessarily related to demand for silver, because production of a great deal of silver is the result of it being a byproduct of the production of copper, lead, and zinc. This can make the supply/demand balance for silver particularly wacky. And, if the economy tanks, and the dollar tanks, we may well have reduced production of silver from the byproduct producers, in the face of skyrocketing demand from silver consumers. Again, from the USGS - Jan 2011 Mineral Industry Survey
[see http://minerals.usgs.gov/minerals/pubs/commodity/silver/index.html#mcs]
"U.S. mines produced 94,100 kilograms (kg) of silver in January 2011, a 5% decrease compared with December 2010 production and a 17% decrease compared with that of January 2010, according to the U.S. Geological Survey. The average daily production rate in January was 3,040 kg."
In this same time period, January 2010 to January 2011, the price of silver essentially doubled. So the demand for silver, and its production, are not always "in sync." Thus, the price may well go up far more than just the increase in demand might indicate. If I were a gambler, I might well buy more silver than I could afford.
i'm sorry..."did you say 3000 tons of silver a year?" and that's "some poor place down there?"
Ha, they must have a "Junk All" button as fast as they're hitting all these posts!
Danger Time in on the porch waiting for his new handle. Junking is all he can do before he can post with a new handle.
He actually doesn't have a porch anymore. He just sold his house to cover his new puts to rake in that massive profit come July.
Too bad the end of may is another delivery month which could shoot silver up another $5-$20 depending on the size of the contracts.
I'm constantly amazed at how many trader's short "REAL" money. Seriously. Says something about their psychology. I can see Danger living under an overpass waiting for that silver ship to finally dip back down to pick him up. It may happen and if it does, I hope he feels real good about finally being right. I'll just hold my physical, trade more appropriate instruments to make more fiat to buy more physical and sleep well at night. Dollar up, dollar down, purchasing power preserved.
"Dollar up, dollar down, purchasing power preserved."
Mr. Taggart gets it.....
WTF? Purchasing power? Silver was $7 not that long ago, it could go back there. What does that do for your alleged purchasing power? This is tulipmania writ large, another sucker's bubble like tech stocks and real estate.
You keep saying that, but supply keeps getting tighter.
Tulipmania was a bubble with exponentially increasing numbers of the underlying material. Real estate was increasing nearly exponentially. Silver is increasing at a slow, linear rate that is dependent on the prices of industrial metals, which are likely to fall soon.
This is supply and demand, guys. The only reason it is going up so fast is because of years or even decades of fraud and price manipulation. We have been talking about this move forever, and now that we have it, exactly as predicted, you want to call it a bubble. You, the guys who have gotten literally everything wrong.
Call it a bubble all you like. It won't make it so. I have personally said for years that remonetization of gold and silver will look just like a bubble, only instead of a *pop* at the end, the exponential increase will slow as it hits full adoption. The long term chart will look like an "S" rather than an "A", with purchasing power being the y axis.
Talk about missing the big picture. How the hell did you pass the captcha?
Well done sir.
aerojet TALKS LIKE A SHILL
so, I suspect aerojet IS a shill
assjet is a shitbag...always has been and always will be. Read his past posts and his agenda becomes quite clear.
Silver could indeed go back to $7 but then so would everything else within reason. I have said this before and lets keep this very simple because I am simple. Silver going up does not represent an increase in silvers value (purchasing power) it represents a decrease in value (purchasing power) of the fiat papers (USD) it takes to buy it.
Doesn't take much more analysis than that....
aerojet, what was your "handle" before you got wings?
LOL
I'm doing it not because they are bad comments but because when I refresh the comments I want to read the new ones and not reread the old ones. And its a simple way to skip the comments with one junk, because that way I know I read them. I know its annoying. I'm sorry.
You're a tool.
That's it? You only have two profiles available to junk me?
Mr. Krugman, I didnt think you could read.
I guess I'm going to have to change my name. Thought it would be funny to have a Krugman name considering how sarcastic the commenters are on this board, but I guess not.
You need to seek out the "Clueless Economist". He takes the krugman role to a new low.
Nothing wrong with that Krug. Though if you take the name most ZH'ers expect you to 'play the role'
You're right. Not sure I'm the man to take on this level of responsibility.
Meh, you look like a babe in the laundry...
speaking of playing the role, i haven't seen any Nadler's Nabobs of Negativism lately......
Use your brain, dude.
Yes, give the bucket of sand a day off.
Somehow this demonstrates Krugman's approach to problems SO WELL.
Humor, ar ar.
Hey babe, are you wearing that diaddie on your head because you have shit for brains?
No, it's the only thing on the screen I can manipulate to get the result I want. If we had a + symbol I would like more to use it. Or, like most sites you have a symbol that shows unread comments which would be even better.
Mr. Krugman. With your recent Nobel prize, I figured you had the intellect to solve such a simple problem. All you need to do is take some white out and blot out the comments on your screen. In this way you can hide the comments. You could use masking tape if you dont have any white out.
Well fuck your python script.
I noticed you dont junk your own posts. Does this mean you end up reading your own posts over and over again?
LOL!
Quick, someone give Krug some junks before his brain gets locked into an infinite loop!
Oh, so you're an asshole.
That looks more like chaoswardation once again...
Fuckwardation
close your eyes if you can't take it.
we few, we happy few, we band of silver holders.
I'll take a blowoff top with a coating of gold sprinkles thanks!
negative convexity isn't just for duration securities....Bitchez
As I suggested a week ago ;), weakness into options expiry, but will surpass $50 shortly following, but how long can this rally last with the Fed turning off the liquidity tap??
http://www.bullionbaron.com/2011/04/no-qe3-risk-trade-back-on-anyway.html
The Fed is turning off the liquidity tap?? They are???
Bernanke accepted his new stealth printing machine.
No one will see the money bombs until they blowup.
this may be where shit really gets rolling.. when the street realizes the fed will print in such a way that no one will know what the f is going on any more..imagine the massive panicked purchases of monetary metals along with the selling out of bonds and equities at any price when folks wake up. This is no panic blow off, this is what you might see before a huge run away gap in silver with massive follow through for a year or so in my opinion.
by the way the DX is only down less then 3% from the date of QE2 (11.03.2010) so shit is only just now getting started.. seat belts bitches!!
Are they turning off the liquidity tap?
Can someone clever in the ZH community translate what the Bernank means when he's talking about keeping the secutities at a certain level as they mature?
It means as they expire they get replaced. Rolled over, as it were. No net change of position, supposedly. Certainly no reduction of position/balance sheet; no unwind.
Thanks. So, would this roll-over have the same effect as QE or does the Fed's balance sheet need to expand for it to have a money pumping role?
Seems to me that since these secutities are on the Fed's balance sheet, they don't have the same type of deflationary effect as they mature. Therefore, the replacement purchases would be fresh stimulus to the money supply, no?
My instinct is that there will be "covert" stimulus, the dumb ass journalists will not do their job.
Because this is my first post, and no one else has mentioned it...
Silver, bitchez.
C'mon Trolls, this guy needs a fight
Chumba will take care of him.
Welcome.
We hope you enjoy your stay here at ZeroHedge.
Please note that we currently have sever troll species indigenous to the area such as the the dreaded Math Man and the dim witted Dangertime.
Please refrain from touching or feeding these abominations... and again, enjoy your stay here at ZeroHedge.
your avatar makes me crave BLT for some reason...
Its a picture of the sun... which one day will fart and destroy all electronics on the planet.
One more reason why I hold physical.
LOL - Sun farts....
or at least will be blamed for farting when EMP bombs are exploded in the atmosphere wiping out all unprotected electronics and communications (and bank account digits...)
Just as an item of curiousity, Cisco headquarters buildings apparently have built-in Farady cages, apparently acting as room decor/metal mesh curtains. I wonder how common this is with other tech companies.
interesting info. i suspect it becoming a lot more common. there is a youtube video showing how to build a cage out of screen wiring.
If this is your first time at Fight Club, you have to fight.
I Fight Fiat
take a look at the FX action against the BRL...must be some kind of intervention. Was the same yesterday but saw a late pop in the cross. Gold up sharply in reais
the br cb is more mickey mouse than the fed, bunch of clowns
Hmm, don't think so, the Brazilian Real is overvalued against the US dollar, people down here are actually travelling all the way to the US just to buy clothes either for use or resell them cause it so much cheaper.
A Ford Focus down here costs 2-3 times more than in the US, even compensating for the high taxes here it still too expensive
http://en.wikipedia.org/wiki/Troller
are those any good?
Execuse me, excuse me... but wasn't $47 an ounce silver suppose to BUST those JP Morgan scum? Well?
Cancer is a slow, painful death.
All plays are hedged...
... with the Fed.
It's why the Bernanke press conference was so entertaining yesterday. Watching him fumble and mumble his way through questions he had 2 days in advance, trying to reassure the world he was the man to steer the ship, and all the while in the background, silver was shooting 5% higher.
That was the the sight of a million people all giving him the finger at the same time....
It was like Trillion$ of FRNs suddenly cried out and were silenced -- Owe B cannotBee
Eh, so was $37.
Thing is, you can't kill a zombie with chest shots. You've go to remove the head, or destroy the brain.
Hence the continued presence here of MethMan.
..... only $5 to dig it from the ground .....
..... only $5 to dig it from the ground .....
..... only $5 to dig it from the ground .....
..... only $5 to dig it from the ground .....
..... only $5 to dig it from the ground .....
..... only $5 to dig it from the ground .....
...... must ...... eat ...... silver ......owners' ...... brains ........
I never thought that $47 would bust them.
At the end of the day, all that matters is the cash flow.
FASB
They have infinite munny so they are never bust. It just comes around and nibbles the ass of the dollar.
JPM is a department of the Fed!
They'll go broke when people stop taking confetti (Fed Notes).
It's Weimar Republic all over again, but this time it's global.
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"Execuse me, excuse me... but wasn't $47 an ounce silver suppose to BUST those JP Morgan scum? Well?" JP Morgan is TBTF. They will never go bust, since they are backed by infinite Fed dollars. They have no intention of ever covering their Silver shorts, so no short squeeze. When they can not deliver silver (already happening) they just make the buyer an offer he can not refuse. (or ever disclose e.g. 80% premium) The physical in your hand price has already significantly disconnected from the comex paper price.
Did you observe how silver was taken down prior to option expiry this week? Way under $47. It went to a high of $49.79 on Monday early and was then collapsed to $44.60 Monday late, early Tuesday where it languished to mid-day Wed. Now at $49.51.
Let's see what happens next options expiry.
JP Morgan is obviously running two sets of books. Since they are the government they don't have to keep a separate accounting of their finances away from the IRS but from their investors. How else could they keep their mark to mark losses hidden this year on the comex and still report a $5 bn dollar profit so far this year? They have trillions if not quadrillions hidden in trusts offshore. A few have concluded that the government will have to bail them out at taxpayer expense when their swindling at the comex is finally unwound. They have the money. It's there. The sheeple will sit idly by and watch as their dollars are diluted more in the midst of all this.
people are snorting pure arsenic if they think silver will ever ever trade below $35/oz.
pullbacks will be physical buying opportunity
One can only hope...Arsenic or not, I know I've got my fingers crossed.
Huffing colloidal silver.
And, PSLV is up 3.3% while SLV is up only 2%. Coincidence?
Just coincidence I would guess. PSLV has a sizable premium so it moves not only with spot, but with the size of the premium. On 4/25, PSLV dropped -2.67% while SLV gained 0.64%, and on 4/26 PSLV dropped -6.32% while SLV dropped -3.93%. This can all be attributed to premium compression. Premium is at 18% right now, while it was around 14% 2 days ago. I watch the premium closely so I can see when it's best to enter the trade.
Thanks, I better start looking at those much more closely.
Maybe I should go collect Harvey's data from the past and start charting it on my own.
Say, are you Robotrader's Mom's sister?
Time for JPMorgan TO DIIIIIIIIIIIIIIIIIIIIIIE!!!!!!!
Dang I didn't have time to BTFD this time :(
My way to play the no QE3 risk was to buy lots of cheap risk puts, but to each his own, I'm not selling my physical for less'n 75 papers/oz and I ain't keepin' the paper for long.
Don't worry what the FED confetti spot price is. Just be happy they still accept it.
Kitco no longer able to deliver canadian maples to US customers. I've asked why but no answer given thus far. I had bought some less than two months ago with no problem.
The Canadian Mint is out of Silver. The US Mint also. Massive Short squeeze Bitchez!
Due to high demand, this product is only available outside of the US. If you are looking to buy this product, sign-up for the Kitco Bullion Alert Service to be notified the moment this product becomes available inside the US.
That is odd, could it be that the US is a regulated, taxing, crony, un-trustworthy shithole? Reminds me of the left coast liberal Kalifornia, where many gun dealers will not deal with anyone in the state because it's not worth the pain in the ass.
Soon the top world twitter will be..."USA LOL"
Of course, the ironic thing about the wisdom of those running Cali, is that outlawing things just creates profitable black-market opportunities for those willing to take the risk. So the only well-armed segment of the population is the criminal element, which networks as gangs competing with other gangs for turf and supremacy.
Yep, that's how I would want to live.
Has Geithner been buying gold?