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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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Yikes! That wasn't just an ugly stick, more like a stand of trees!
Plunge Protection Team. The government is naked shorting silver, mining shares, etc.......Check out Executive Order 12631
Just read an article on CNBC claiming that $18 silver is imminent because that's what it costs to get it out of the ground per ounce. The shills are out in full force now that it's ready to break $50. Here are my questions, if the idea is to keep comparing silver to paper confetti: if the dollar keeps tanking, will mines still be able to get silver out of the ground at $18 per ounce? If the dollar keeps tanking, won't smart money continually pile into silver? If the free market isn't allowed to balance the supply and demand without further manipulation, won't these price controls put on silver cause the supply to diminish, as they do EVERY other good with price controls? Where am I wrong thinking silver is going much higher long term, provided we all agree the dollar is going lower long term?
Silver costs more than $18 to get out of the ground, on average. Furthermore, that's not what controls the price. If the demand for silver is greater than current production, the price must rise to a point where demand falls to match supply. That's a good time to be a silver miner (though most silver is simply a byproduct generated by mining for zinc and other metals).
Thus "cost to manufacture" is not the primary controller of price, unless supply is higher than demand. And with fiat currencies worldwide clearly reaching the catastrophic collapse that EVERY fiat currency in history reaches (after 40~50 years, on average)... demand for gold and silver will only increase.
Thus physical gold and silver are just about the best "no brainer" investment to have surfaced in decades. Don't miss it.
Yeah, funny how nobody (MethMan, I am looking at you) is predicting bread to fall to 20 cents a loaf, because that is what the raw materials in it cost, or oil to $10 a barrel, because that is the average cost of production in Saudi Arabia. It is really an idiotic and disingenuous line of argument, void of all logic and common sense.
I cannon balled into that lake last year. Best decision of my life. It's just amazing to me the vitriolic articles that are written about silver, and the anger these metals evoke in so many people. It's as though these brainwashed fools suffer from the stockholm syndrome...and they keep trying defend the bastards that they believe will keep feeding them hand to mouth. I wonder how much more people need to see before they realize what is happening right before their eyes. I suspect we will hear bubble talk all the way to 3-500 oz...provided people are still using a dead dollar as a measuring stick for wealth by then.
Did the CME just raise margin requirements again becuase Silver just got whacked!
News flash: "Peru files complaint with WTO." Headline states "we have been farming silver for decades now and still OUR price never goes up but THEIR'S does!"
switched to watching the dollar instead
ZH is getting pretty good at frontrunning big takedowns in Silver. Today's action awesome and frightening at the same time.
Best option: Cash in a good quantity of hard, cold M and use this volatility to make a mint?
DANGERTIME CAPITULATED!!!
so i just bought 2000 shares of ZSL
no guts no glory
Share price 13.69 boyz.
Make not of this and watch how a real man trades!
let's see this dolla bounce... she's goin downnn captin!
Dive! Dive!
No wait! Surface! Surface!
no power left, ship has been abandoned. :(
Okay Newbie question about precious metals. I have always been a paper asset person but I want exposure to precious metals. I have exposure via gld and slv. But I want to have some on hand. I buy on pull backs when I have cash. My question is, do I dive and buy or do I wait for weakness? Surely there has to be some short covering profit taking on the dollar that will provide an entry point. But I keep looking for it and it never comes.
First of all, get out of GLD and SLV, they are paper scams. If you want to own ETFs, buy Sprott ETFs. GLD and SLV will (probably when the COMEX collapses) collapse and you might receive anything from 30 cents to full market value as of the day of the collapse. And It might take you as much as 6 weeks to get your money. Meanwhile the PM moon shot will have occurred and you will have missed it.
Want to buy physical? Start off with pre '65 silver coins. Hardly any premium and they will be the most valuable if the banks shut down for a week or something similar. Keep it at home. Don't tell your friends. Loose lips sink ships. After you have at least a $1000 bag, then look at bars, etc.
You go buy it. You secure it. You don't pretend there's some deep heavy philosophical strategy behind it. You just do it. It's not going to work better if you approach it from behind or under x set of rules.
I bought gold 50 dollars from the top in june 2008. And don't care.
Buy guns. It's important that you adopt the understanding that it's up to YOU to guard yourself and your wealth. Not someone else.
I'm loaded up with guns ammo and beans but I've never bought into precious metals. I've always done well in the paper market but now I'm convinced it's over. Is it worth it to pay the premium for eagles? Or will rounds do? I'll buy junk first but after junk?
Your ability to spend your silver may become crucial to survival. The most recognizable coins for trade will be junk silver. Next might be silver eagles. Then rounds and whatever. I look at the junk as being survival coins and then everything else as investment for afterwards. I can't afford much, so I only have some junk. I do think this is the best plan though. I would buy junk, then eagles or bars. Will eagles have a premium after the collapse? I don't know. You might want to go to the silver Bear Cafe and read an account of the collapse in Argentina. Ours might be really simlar.
Thank you for your input. I appreciate it.
I strongly suspect that it is going to be amazingly similar ---- including the rapid initial ~50% and ultimate 75-90% devaluation of the currency, the bank closures, the initial food shortages and power failures, the draconian daily limits on bank withdrawals, the "nationalization" (theft) of retirement savings accounts, and the huge upsurge in crime. I find the 2001-2002 Argentinian scenario to be the most likely to mirror what is coming to the USA, probably by the end of next year.
By the way, if you do read the account at Silver Bear, keep in mind that our major trading partner is China, and their currency is pegged to ours. They are having inflation problems, big time. If they were to uncouple their currency, it would be just like in Argentina.
What transformer says is what I have been taught as well.
silver bitchezzzz....
sorry could not resist the temptation.. my first post on zh and also the day I got my ASE delivery from Apmex after the weekend price differential note on zh...
note.. this was my first physical purchase... and they feel nice ... round.. and shiny.. my dear.. my prrreeecioussss...
my prrreeecioussss...
It's pirate day, not LOTR day. The correct response is aarrgghh.
I think a poster named "two towers" is going to stick with the LOTR metaphors. Rock on Smeagol!
I can understand the angst over the dollar and the disgust with the fed/gov policy, but isnt evey silver/gold coin sold stamped with a u.s. mint notation or someother nations currency denomination? Would not the nose bleed prices for these metals just be benefiting the governments who hold most of the worlds metal supply?
After the Great Implosion, is the Govt gonna be running the grocery store? The gas station(s)? Find/figure out who is gonna be willing to trade your Ag/Au for items you need to survive...
Ask yourself this: immediately after the US civil war, if you had some specie with southern markings on it, would it have been more or less likely than confederate paper to get you a loaf of bread?
I don't have a lot of money to "invest" with. I buy Silver because it's in my range and I see absolutely zero hope for the dollar in the long term.
I 'd like to see my purchases (of silver) be a mix of both a hedge against the dollar loss as well as a possible investment tool to trade for another currency at some point, be it gold or any other currency of merit and strength that might surface eventually.
I just don't understand those that should be able to see the writing on the wall about our debt and inflationary Fed. practices...to at least "entertain" the notion that the dollar might not be the safest bet to put one's basket of eggs on.
Where fiat currencies can come and go, silver & gold (i believe) will always carry a certain amount of worth based on several different factors such as the difficulty in producing, and
relative scarcity compared to any other mass produced currency and an almost gut level human interest and desire, if for nothing else but jewelry.
Being age old symbol of status, I believe that as long as there are humans, I believe there will be those who want to possess PM.
An adequate investment seems quite sound and logical to me...
Regards
Extreme vertical spikes don't last long and usually retrace the majority of the vertical move. No telling how high it will go in these few weeks before it reverses though, so shorting is tricky.
For true believers in the dollar crash scenario, the miners are a very good buy right now relative to the metal. Profits in 2011 will be huge if silver even averages $30. Here's a list of primary silver miners, which are actually fairly rare since most silver is produced from mines that target zinc, lead, etc.
http://miningalmanac.com/stock-lists/silver-producers-mining-companies
Also an index chart of silver producers:
http://miningalmanac.com/silver_producers
Giving it back to the Asians where it was yesterday. We will see what they do with.
At some point a weak dollar screws the entire world.
Aussie not really happy about the strength of their currency because it is starting to hurt tourism.
Holding my short paper hedge at the 61.8 % Fib retracement.
Also looks like double top on daily chart.
`Double Top`? Fuck, not ANOTHER one; this has to be the 14 trillionth of those we`ve seen in the last two years, judging by the likes of you.
And sheeet, as if the Aussies would rather have fat, bloated, loud-mouthed Americans who can`t handle their beer more than, well, ANYONE else blowing their holiday fiat in Sydney. You can keep it mate. Do the world a favour yank: stay home and drink in the domestic wonders of Lake Pisitkomfromee.
`At some point a weeeeeeeeeeeaaaaak dollar (US?) schmee da schmeee de schmmeeeeee de shmeee....` awwwwwwww, too bad
Fuck off with your outdated hegemonial rote, nobody is interested anymore; you`ll find out soon enough, `Last Year`s Man`.
Fat bloated loud mouth Americans FTW!
So.. from what fair land do you hail good GF?
Well, I only wrote all that `cause his hubris pissed me off, so allow me to tone it down a bit: I don`t really loathe Americans, excepting those types mentioned. And being totally honest, to varying degrees you can find the likes of them in any country I've ever been to. To boot, after a stop in Las Vegas I know full well how innovations in plastic surgery in the US have allowed womankind to skip a couple of rungs on the evolutionary ladder, physically anyway (I am informed regularly that women have already made those advances mentally long ago.) So if you`re an American who doesn`t fit that bill, appy polly logies, the offence in the generalisation wasn`t directed at you.
`Fair` land? Shit, this may sound cynical but show me one and I`ll pack my bags tomorrow...
the implications of this are staggering. Consider that PM's as a % of global assets under management are still under 2%. THAT'S why iShares is selling another 50 million shares of SLV, because by the time this bull is done gold will be above $4000/oz and the gold/silver ratio will be AROUND 10:1. Face it, even though many of you have only just started buying/trading silver in the past few years, you are way early compared to your fellow neanderthal. And for you geniuses who started buying between 2001 and 2004, well, get off your a$$ and start milking the bagman for all he's worth. Sitting on physical is great, but the real game is leveraging the paper and using the profits to buy more physical. THAT'S how you checkmate the jp morgue men. I've been at this for years. I learned how to print money like the banksters. It's called leverage and risk maagement. Easy to say, hard to do, even harder to learn, but I did it.
While some are ranting about the ponzification of fiat currencies, others are using their knowledge of this ponzification to further increase their ounce size, or "ouncage". Balls of steel are real. How heavy are yours?
Hedge funds extort the rich by charging 2-and-20 and still can't do what I do. I used to work at a hedge fund, the head PM was a facking moron who thought silver belonged on his wrist. He used to make fun of me everytime the idiots on CNBC would make fun of Peter Schiff! Now, I think he has an ulcer, and it's probably starting to eat him alive.
Hope you guys have a plan to make more money and buy more food/supplies/lead/physical Ag. You know you need more money right? As the rate of inflation increases, the rate of awareness/awakening amongst the population increases which leads to a vicious cycle of increasing inflation expectations which eventually prices out everyone, except those who are using leverage to benefit from the increasing inflation expectations. Just buying physical on dips may not help you, as you may not be outpacing the general price increases across the broad goods, services and taxes spectrum. I know of what I speak. Think Weimar + Argentina, but global with a Gompertz tinge to it. On a longer-term timeframe we are on the cusp of liftoff.
Now that I'm getting REAL confirmation of the lid coming off of their years of fraud and price manipulation, I am bringing my talents to the public. I am annualizing an 800% return right now. In February I was up 30%, March 40%, this month I am up 60%. These returns are compounding. I have outperformed silver by a factor of 4-to-1 over the past 3 months. If the silver market were to crash 30% over the next 3 trading days I would not worry nor suffer. I have done alot of time in the silver trading dungeons and I am prepared. I am not mickey mouse, I am a risk manager. Call me a Plumber even. Unlike Jesse Livermore I will not repeatedly lose all of my capital and commit suicide. Twice was enough for me, I had stopped taking risks like that by 2006. The sulfuric solution to this murderous silver market is being brought to the plebeians by a master of oxidization.
You can autotrade my signals via your own brokerage account, or you can just receive the signals. Any capital size above $10k is fine, the site auto-scales the orders. There's a free trial so you can watch and get comfortable. My next step is to take a business public that specializes in storing and delivering assayed silver all over the world. Believe it or not, silver is about to become a rare earth element. Sounds wacky? So did $49 Ag in 2002 when it had been trading between $4 and $6 for the previous 15 years. Methinks getting your hands on physical silver will become somewhat of an impossible task in a few years. I know everyone says that, but I'm talking about when the only silver available is in heavily guarded warehouses. YOU will sell it to them because they will offer you a price you can't refuse, right before it goes from $250/oz to $1250/oz. Me also thinks that those of you hoarding it now are on the right track, but you need MORE. The price is going to 3 digits, and then eventually 4. Meditate on the broad and highly applicable physical properties of silver and the coming wave of technologicalization via release of suppressed patents and technologies. If everyone thinks the world is going to end and go to anarchy, wouldn't that be classified as the "retail sentiment?"
Hi ho silver, ZH'ers...
http://silveroptions.collective2.com