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The Silver Bears Are Back For Round Three, Explaining Two Key Recent Developments In The World Of Silver
Confused by the recent downdraft in the price of (paper) silver... Even more confused by what is happening with the record open interest in the metal? Have no fear. The bears are here, and explain things in their traditionally simple and sound effect-filled way.
And for those who are confused by the above, here is another explanation of what may be happening courtesy of a "letter" to Blythe (thanks John).
Blythe,
This is what I am hearing from your former traders (who made "very interesting career decisions"). Well it seem that they are on to a new scheme to corner the Comex and drive the price of silver up $10 to $15 dollars in a matter of weeks.
The strategy is as follows. We know that Comex only has 105 million ounces of silver of which only 50 million ounces are availabe for delivery. (I personally don't believe the Comex numbers are anywhere near that high, but that is neither here nor there for now.) Well, all it would take is 10,000 contracts on the Comex to buy up all the "available silver" at the Comex and 20,000 contracts to deplete it completely. The current front month March OI is north of 78,000.
Watch the OI closely. Blythe's former traders are advising major hedgefunds and billioniare investors to buy up as many contracts as possible as March 1 approaches and deposit the cash needed to stand for delivery for the month of March. The purpose is not necessarily to bust the Comex but to force the Comex to pay a premium (some as much as 30 percent) for cash settlement. Think about it. If a group of hedgefund gets together and bankroll $1 billion, they can buy more than 30 million ounces of silver. Of course, the contract sellers like The Morgue cant deliver the silver so a cash settlement is the only recourse. So what's wrong with $200 million in profit on a $1 billion investment that takes less than 4 weeks total?
Guess what Blythe? Your former traders are advising everyone they know to put on this trade come the first week of February. Is this what happened in the Decemeber contracts? Is this why silver went from $22 on September 30 to $29 by December 1? How much do you think silver will spike in February as we approach March 1? The traders think silver will be north of $45. Heck it went over $9 as we approached December and everyone who got a pay off in terms of a premium cash settlement will be back for more. And they are all gonna be bringing friends to partake in the bounty.
Your former traders are telling everyone who would listen that all they need to do is purchase a huge amount of March contracts near the end of February and stand for delivery and they will all make 20 percent in a matter of days. Is this what you are hearing Blythe? If so, shouldnt you let the price of silver move up so that you can get some physical to deliver before March 1?
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The COMEX days are numbered...stand for delivery.
Silver Bitchez!
http://www.youtube.com/watch?v=3u2qRXb4xCU
Can someone at ZH fix the link to the "letter" to Blythe (thanks John).
Access denied
You are not authorized to access this page.
Ta!
The letter is to Blythe. Not flacon.
Joe
I am pointing out that the link is broken. Who wrote the letter? How do we know that the content of the letter is accurate? etc. Usually links on ZH lead somewhere, but this link doesn't lead anywhere - unless the point of the "letter" is just an example of what people may be thinking...ie, it is a fictional letter for the purposes of expounding upon a point etc.
Green mail - Ahh the old days !
Force them to pay or force the cheeks apart over a Barrel.
The Male is IN
What stops the Comex upping their margin requirements into Feb end and squeezing the crown jewels of every weak long in the room (i.e most of them?)
Glenn Hubbard
http://www.thewrap.com/media/column-post/columbia-u-should-clean-mess-re...
Inside Job
http://www.youtube.com/watch?v=FzrBurlJUNk&feature=player_embedded
http://www.youtube.com/watch?v=PonczpswC3s
Bay, Comex does not have two (silver) dimes to rub together.
Indeed. http://standfordelivery.com
Off topic, but this topic rarely comes up on ZH, so... Does anyone here think we'll see state owned banks start to catch on, like the one in ND? If no, why not?
Could happen, but I lean towards thinking it won't occur until chaos/collapse are well underway, and by then it may be too late to expect policy changes to have any effect.
Just like the Feds, State government policy is far more heavily dominated by industry interests than the voters--lots of States have laws explicitly prohibiting government from directly competing in any market/industry served by private business.
Only a tiny percentage of the population has any inkling about the structural issues with banks right now--I'd expect several media-dominating catastrophes before the actual mechanics of our problems become clear to people. We won't see accurate and descriptive mainstream reporting until the so-called fringe-characters threaten to capture real airtime.
I'd say it's more likely that we'll reach a serious level of economic breakdown before the problems are broadly understood, and by then many people may be too concerned about where to get gasoline and milk to worry about abstract stuff like bank legislation.
If the people are properly motivated, government-ownership of banks isn't necessary anyway, and would be counterproductive. The same thing can be accomplished without the involvement of the State at all.
That is wholly dependent on the size of the state and the relative political will and creativity to start said type of bank. Bank of North Dakota (BND) can get away with their little experiment because the entire state productivity and population mirrors that of single midsized US city - say Memphis. The BND was started in 1919 - what was ND population then? Fewer good ol' boys to get in line. Fewer beaks to be wetted. The BDN is more of a central bank for ND and offers little or no competitive services and is not insured by the FDIC - whatever that is worth. To my mind its monthly check clearing operations are like a sleepy Sunday night shift in the Kansas City Fed.
A good test of potential is how easy is it to start your own bank in said state. Most states its far easier to buy into an existing bank with its license in place than start from scratch. Additionally, the FDIC will give you money to take over a failing bank these days and there exists a long line of failed banks across the land and the "healthy" ones are really zombies propped up via TARP and ZIRP. Commercial banks have been consolidating for decades - ever since lawyers decided to be bankers. Some the recent financial reform crap will only accelerate the consolidation, crippling credit unions and is otherwise designed to drive the community banks into the regionals who are then driven in the nationals and then into the arms of the chosen few TBTF insulated from the OCC inside the FRB. If only the balance sheets were real.
Even if a state built a new state bank out of gold bricks, I still don't think they could get a correspondent relationship with the TBTF, or an account with the FRB - for ACH, and certainly not SWIFT coordinates.
The real sedition is not creating a state bank, but rather a new currency - one backed by gold or a basket of commodities. But that is the plan here and the currency's name is the Bancor.
Remember the golden rule. Those that have the gold make the rules.
Very clever of the Chinese to "help" JPM on the paper side of the whip saw! Nothing like more strong arms to really get that price saw to moving!
Anyone ever think the Chinese are building shorts because it's a way they see to get exposure to some very poor economic data due to come out in the months ahead?
Feel free to troll or junk me all you like. I am a PM bull but I do not drink koolaid from the Permabear or Permabull pitchers.
I would be interested if anyone has anything else to add besides pearls of wisdom like "Silver Bitchez" or regurgitated arguments that are in the comments of nearly every ZH post?
Cheers
*StychoKiller that was in no way aimed at you but put up here to get attention from as many informed people as possible.
I had this earlier today. To get caught up, see all three parts here:
http://tfmetalsreport.blogspot.com/2011/01/new-video-from-silvergoldsilv...
Poor timing on the 'shoot' opening.
The Federal Reserve is responsible for the tragedy in Arizona because they have debased the currency so much. The Fed gave the shooter the reason to go on his killing spree and wanting a gold standard because a gold standard would help his savings maintain it's value.
Shit happens. Get over it. There is no reason for the country to lose it's collective mind over this and for the control freak government to take more of our freedoms away.
You want to make a new law over this? Abolish the Fed.
The left wing radicals are all over the place blaming the right.
Why hasn't someone written a fucking article blaming the Fed for it already? This could be our chance to unite both parties against the Fed.
They couldn't even get to audit the Fed last year with 260 something co-sponsors. In the end it just caved. So how are we going to end it. but I do talk to people more every day who are getting it. Keep pushing on and keep talking about the system and why it has so come down. We are getting closer.
Yep, back in 2003, 2005, 2007 good luck having these conversations with people. Awareness has grown extremely rapidly, and if it continues at this pace the Fed should be abolished by 2012, IMO. The Fed is at the root of the problem, but lets not kid ourselves that the Fed is the ONLY problem. Deindustrialization has to be reversed, for one, and a return to sound money, for another. It is not enough to just get rid of the Fed, but it is one HELL of a start.
http://psychonews.site90.net
Check out our latest PsychoNews story: Signs of the Apocalypse
"China has recently announced they have been working on the J20, a prototype of a stealth fighter. While publicly America's most advanced aircraft is the F22, it seems unlikely that it is the most advanced weapons system actually available. The American Military-Industrial Complex could well be sending a message to China, "You may have a stealth fighter in development, but we have weapons the world has never even heard about". Weapons that could drop planes out of the sky, kill livestock, alter weather, and can even be used for mind control! "
Yeah, but when are we going to see the affects of our efforts? When you're physically fighting an opponent you can see the damage your blows are doing as you slug it out. When are we going to see any actual damage we are doing to COMEX/JPMorgan/HSBC with all the precious metal buying we are doing? So far any damage is just conjecture and it's not as if they ever openly report any losses, so when?
If you feel nervous, sell your holdings, I will buy it.
Not at all, bought half my physical when silver was $17 an ounce, so quite comfortable with the price action.
Just a bit wary of seeing these 'COMEX can't deliver the physical, they are going to go bust at the next option expiry'. I've read similar articles for the past two silver option expiry dates and COMEX is still here, and so is JPM and so is HSBC, no physical damage to these entities at present.
Im relatively new to trading metals, but all the logic points to a fiat collapse. Im in, big. (for me thats like 3 whole silver dollars!)
If you're expecting a fiat collapse then why are you 'trading' metals? Surely, you should be buying only for personal survival post-event and a lot more than 3 silver dollars!
And, it's quite clear that the $dollar and other fiat currencies do nothing but collapse overtime by their very design. That's why the $dollar has already lost 90%+ of it's purchasing power since the 30s.
I want to see the damage we are allegedly doing to the manipulators JPM/Comex/HSBC, so when?
Touché! I Mispoke! ;)
You misspelled, too.
"no physical damage to these entities at present".
Say what? The COMEX is being drained of physical and is under enormous pressure. Smoke is literally billowing out of it. What it "does" to the crime syndicate institutions of JPM and HSBC remains to be seen.
I've seen the figures that suggest COMEX is under enormous pressure, but where is the residual evidence it actually is? Every option expiry date goes by (dec 2010 being the last one) and Comex is still running and i don't see any complains from option holders not getting their requested physical in December?
I don't know what you want. Whatever it is, it's not here on ZeroHedge.
The figures I've seen suggest the COMEX is under no pressure at all.
I remain unconvinced of this 'price suppression'. As I see it physical is still being happily arbitraged for paper. It may well continue until it doesn't.
Funky, you're right the Comex will never default. Who will you believe a cartoon bear or an experienced anal-yst like me who's been consistently getting it wrong for 50 years? Your call, but if i were you i sell all my silver before it goes to 45, ...errr, I mean before it goes to 4.50 an ounce....just a typo there, he he
Isn't it ironic that two cartoon bears, carry more creedence than a "respected" silver and gold analyist in the real world?
LMAO
Al, it's ironic all right. Just like Jon Stewart being the most respectable news source in the MSM. Such is where we are as a people. Keep it simple.
But to the point though, I think we'll see some wild moves in the markets as the ides of march approach. Beware them eh?
Went prospecting for farmland this weekend. Realized I'd happily trade silver for soil. It was a liberating realization.
ORI
http://aadivaahan.wordpress.com
It's not proof but Harvey Organ, who watches the COMEX as closely as anyone is convinced they did exactly what this piece suggests already and paid some holders of contracts premiums to agree not to take silver. He deduced this from significant numbers of open contracts not being paid off in silver and being dropped off the list of december open contracts as the month went on. There was no other logical explanation.
It's not proof alright. All futures contracts are 'settled' in cash.
To take delivery you do it off the exchange, the COMEX itself does not make the delivery of physical.
Then why do they have warehouses, smart guy? Why report the movement in and out of them?
Do these warehouses belong to the COMEX?
Maybe they are just warehouses where COMEX registered gold is stored.
If a long stands for delivery, the COMEX finds a short who will deliver. As I said the delivery of physical is done off exchange, the COMEX itself assumes no risk since as far as the exchange is concerned all contracts are 'settled' in cash.
No legal risk I should say. There is always a risk that nobody will want to trade COMEX any more should there be a default.
Every day I nominate somebody for the "Moran Award". I was leaning toward that funkymonkey guy, but I've got good news. You've convinced me, you are a moran.
Moran, moron, potato, potatoe.
It sure looks like you know all about futures trading. I admit I'm no expert, so why not educate us some more? Your post was chock full useful facts regarding the trading of gold & silver futures.
I look forward to your next installment.
I have nothing to prove to you son. And I won't be replying to you again. See ya.
I have nothing
I can't argue with that.
COMEX has default risk of the seller, and the sole obligation to pay "reasonable damages" from delivery failure to the buyer. They are not obligated to deliver, however.
You're guess is as good as mine as to WTF that actually means.
http://www.cmegroup.com/rulebook/NYMEX/1/7B.pdf
I'd say it means the legal obligation to deliver physical is with the 'short' rather than the exchange itself.
I'd also say that the "reasonable damages" is probably taken care of in the margin which all buyers & sellers are required to post. Which by the way the exchange is free to change as it sees fit, when price volatility increases. It is not 'changing the rules' mid stream in asking for increased margin since the rules say the exchange can change them.
deleted
A couple questions:
Have you seen anyone saying they already got physical delivery from a December contract?
What were people saying about Enron, Countrywide, Bear Stearns and Lehman a couple months before they collapsed?
Would the US Government prosecute this fraud, or would they try to hide it (can't have people losing faith in our big banks, can you?)?
Be able to buy silver at $30 is like being able to buy a brand new car for 3 grand. If new car prices dropped to $2,500 would you tell people not to buy because the price is falling?
Sorry, but I have no sympathy for anyone who loses trading paper silver. They're chumps. They help JPM. Fortunately they help drive down prices for the rest of us.
I think someone famous said "everything is always alright until it isn't"
Do you think TPTB would allow any kind of tell with their hand?
If someone has an inside source don't you think they would be protecting it and buying more for themselves?
unfortunately the answer is No, and Yes, respectively.
Dope smoking kid takes out a bunch of innocent people and almost a Congresswoman. Out of the blue this happens and the left immediately demonozes Tea Party, Palin and conservatives who are screaming the debt is out of control.
We may be closer to collapse than you think.
You're on the wrong thread dumbass.
Certainly you jest - the banks are MASTERS at hiding derivatives losses - whatever the loss it will be denied, not disclosed as material and amortized on 100 year amortization schedule and the JP Morgue will simply issue a low single digit 1billion 10yr bond to cover the cash outlay....next you'll ask "don't they have to mark to market"....
Personally I don't think this will hurt any of the big banks. I'm quite sure that they have a deal to be protected from any losses, otherwise why would they knowingly put themselves in the meat grinder?
As to COMEX, who knows? I kinda figure the real sign when things get hairy for them will be to pass out shares of GLD/SLV instead of metal if they stand for delivery, and good luck to all getting silver from SLV or gold from GLD.
Yeah, but when are we going to see the affects of our efforts?
http://www.businessweek.com/news/2010-10-14/jpmorgan-sells-4-billion-of-debt-amid-loan-scrutiny.html
nice cover though.
eric sprott is having a hard time getting physical delivery, in quantity
http://kingworldnews.com/kingworldnews/King_World_News.html
Like Morgan Freeman says in Shawshank Redemption - pressure and time. Or Force 10 From Navarone perhaps?
+1
"Just a bit wary of seeing these 'COMEX can't deliver the physical, they are going to go bust at the next option expiry'. I've read similar articles for the past two silver option expiry dates and COMEX is still here, and so is JPM and so is HSBC, no physical damage to these entities at present"
Thing is, like any con artists, they want to maintain the con. You'll know what damage your doing, and when the con is over, when the silver chart rips through the top of your monitor. JP Morgan isnt going to email you that they have given up the Comex ghost. So put on your big boy panties, and march down to the bullion store in those panties, and buy some more silver.
+28.70
LMAO. Brilliant.
ot but very very fucking funny....
http://www.youtube.com/watch?v=IByDSLeM6Lk
this, not so funny...
http://salonesoterica.wordpress.com/2010/12/02/warren-buffetts-600-milli...
subsidies exceed profits...
http://www.youtube.com/watch?v=zqHZWdFVyyQ
BJ Lewinski, my old girlfriend!
I have to admit, I like sleeping with my coins sprawled out about me. pretty little coins all around me. He He!
Which junior miners should be bought? He mentions buying juniors.
ECU...NUX...FVI...GOG...LSG
On TSX
So here is the end game question we can all speculate on. The little bears say but junior miners plus own physical. If you are a Canadian - who knows what happens to the CA dollar aka fiat.
The US dollar is probably toast. So you buy junior miners in your brokerage account through a US online brokerage that does Canada.
Are you hedged in case the US dollar falls apart? You are holding a Canadian stock say these juniors on TSX and maybe you also buy a few biggies like ABX or NEM on the TSX.
I am trying to figure a way to hedge without all precious metals. Other choices are Sprott and CEF which hold bullion.
I have some faith that Canada will not blow up when the US dollar blows up or will all fiat go down.
I believe they all die.
SDR will be a god send to the sheep .... temporarily
sorry...double post
err...a triple rather..
Just a quick step-by-step....
1. The US dollar is the global reserve currency.
2. All other currencies are valued against the US dollar. That was true during Bretton Woods, when the dollar was "good as gold" and all other currencies were valued in comparison to the dollar...and it is still true today.
3. When the US dollar fails, the "yardstick" used to derive the value of all other currencies disappears. From that point, how do you determine what a Pound, Yen, Euro, Reminbi or Ruble is worth? How do you determine the relative worth between any of them?
4. As it now stands, when the US dollar fails...ALL currencies fail. Period. A new method of valuation is required...which is one reason China is so pointedly setting joint agreements to trade bi-laterally in Reminbi, Turkish Lira, Rubles and Brazilian Real.....it's all preparation for the day the "yardstick" is no more. Time will tell if they've been swift enough to avoid at least part of the upheaval...
Commonwealth currencies? Forget it.....dust bin....reset...entirely new system required. They're all just (including the Euro) derivatives of the US dollar global financial system
5. The US dollar dies...all die.
Don't be too confident about Canada, they have a serious real estate bubble that probably will pop soon (current average home price in Vancouver - $1,000,000). They have the same real estate situation that the US had, on a smaller scale, and they are a couple of years behind the curve. Buy yourself some PMs and a safe.
Vancouver is where mega rich Asians stash their wealth... in real estate mostly. They send their kids to hold down the fort and go to university in Canada, while the parents continue business in China.
$1M property is pocket change to them while the insurance of a Canadian passport and a safe country as a bug-out place is priceless.
I have heard bubble in Vancouver RE since Expo 86...!!!
The Chinese are now the majority ethnic group in the lower mainland and increasing every day.
Don't hold your breath waiting for that bubble to pop any time soon.
Vancouver is not all of Canada. I'm 31 years old, and live in Ottawa. It is not yet not possible for me to buy a house unless i'm stupid enough to pay 300K (which i'm not) with a 40K a year salary. Just like many other 30 year olds, i'm waiting for the bubble to burst.
Ms:
You might wait along time.
I bought my first house in Vancouver in 1988 when interest rates were 11.5% by going into a simple 3 party partnership with two friends.
My 23 yr. old son, who will be going to Osgoode Hall in TO this fall, plans to put up a down payment on a funky three bedroom condo, then rent out two rooms to other students to cover payments.
He listened to his grumpy old man and bought $5K of silver with some of his McGill scholarship funds five years ago. He will cash it out if need be.
Housing prices may go down...but...rates will probably rise... another of life's dilemmas.
Do whatever is best and possible for you.
Got a doozy of a real estate bubble going down under as well. The median home in Oz has been selling at about 8X the median income for yonks now....the US imploded at about 5.3X.
I don't know when it will blow...but it's going to be legendary when it does. Australian mortgages are ALL variable rate...very few fixed.
Quarter point interest rate rises immediately jerk significant discretionary spending power out of Australian paychecks...and rate rises are coming. Soon I'm betting...
There are some rather intriguing developments from the front lines of the gold wars! It would seem that
Barrick is being sued on two fronts.
Not only could they lose Pascua but you can now possibly add Goldstrike to that list!
http://www.stockhouse.com/Bullboards/MessageDetailThread.aspx?sv=2&p=0&m=28738734&r=0&s=MWR&t=LIST
RICO charges could also be involved?
Avoid Barrick... it is a bullion bank disguised as a miner.
google the BOD of ABX... a who's who of mafia dons.
"a bullion bank disguised as a miner"
Well said . . . good to hear about the lawsuits--couldn't happen to a nicer bunch.
TWO OF THESE WENT UP NICELY TODAY.....WHAT DO YOU LIKE ABOUT THESE COMPANIES..AND GOG DOES NOT SHOW UP ON THE EXCHANGE...ESPECIALLY ECU AND LSG ????
Great Panther, First Majestic
Those are good mining companies.
And they sell nice rounds -- great gifts for kids.
http://store.greatpanther.com/p-1-one-ounce-silver-round.aspx
EXK
http://www.youtube.com/watch?v=shcJdEdU7i8
http://www.youtube.com/watch?v=5M5W8ke6X-U&feature=BF&playnext=1&list=QL&index=1
Do your own DD, and yes I own the stock.
Insight into Mining's Hottest Region!
Yukon's Mining Investment eConference
www.theyukonroom.com
SSVFF
Kitco has some decent silver miner discussion threads:
https://www.kitcomm.com/showthread.php?t=68585
https://www.kitcomm.com/showthread.php?t=67230
If you are feeling like buying some Lotto tickets check out these. Got plenty more but you have to do some DD before Monday
SXL, Slam Exploration ... Assay results on Tuesday
GWY, Galway ... Spin off of oe of their mines and sitting on a byout target
APE, Apogee .... Pinetree Capital rates it as one of their best
GGG, Greenland possibly one the biggest Rare Earth holdings outside of China ... This is a long, long term hold. Lots of DD required on this one but if it goes into production it will be a moon shot
Of course you got to have some actual producers like ECU, HL, Great panther etc.
I have an odd feeling about SXL. Might be a P+D.
HL got my vote at $3.22 about a year ago, now at $10.02
They are a 100% unhedged silver and gold producer whose fundamentals beat all others I looked at.
Also got LYC on the Aussie exchange for a punt on REE's at $1.45 in October, now up at $2.09 (up 9.14% last night:)
Look at AXM, AGQ, CMA, IPT for starters. SOH was a good time although i traded some of it a bit early.
ECUXF & ECU
They just started drilling since last week but their core samples are very promissing. You should read the reports.
If all the numbers are right, they should be able to mine and process twice their current market value in silver per month.
The field they are mining may well contain one of the biggest discovered these last few years
ECU and GOG are partnered up 50/50 on the San Diego property and hitting hole after hole of Kilo/ton silver grades. Rumours of over a billion ounces minimum.
Watch these two closely for a takeover bid from one of the big miners... then the fun really gets going.
Do your own damn DD people... but as Old Man Elmer used to say... "Ya snooze... Ya lose!"
http://seekingalpha.com/author/christopher-ecclestone/instablog
I'd give that a read before any1 pulls the trigger. However the numbers do warrant a deeper look. I'll do some dd. Thanks for bringing it to my attention.
Great read...thanks!
It certainly makes one wonder.
Heard it all before from better bashers. Funny how he sees nothing positive.
Bet he is one of the big Naked Shorts that is getting his due dessert at long last and attempting to pull himself out.
Time will tell...please share anything more of interest you may find.
The only Bears prediction I want make is: Bears 31 Seahawks 14
.... then : Bears 38 Green Bay 0
... then : Bears 24 New England 10
New England 17 Bears 14
... then : Da Bears 37 North Korean Army 6
http://www.youtube.com/watch?v=ooo5V_FrTwQ&feature=related
His last line should have been .. insert coin with a wink of silver in his eye.
The week ended down roughly $50 in Gold and people are already wringing their hands.
This $50 move is entirely laughable ... consider that later this year it will become $50-$100 days both up and down on a daily basis.
The shares have fared worse for the week but once investors figure the game out these shares will move in multiples of what they are now. For those who had cash and courage in late 2008 to step up and buy, are already witnessing daily movements greater than what original cost basis is.
As Jim Sinclair says, "what won't go down will necessarily go up" ...
which is what we will see sometime in the next week or two as the physical markets begin to support price.
Re-fucking-lax and enjoy these "normal times" as we will look back a few months from now and wish for this relative calm. Precious metal investors will be making "bushels of Dollars" but when all is said and done, ounces are ounces and this is what will count.
lemetropolecafe
It's kind of laughable. Gold used to go from 980 to 830 in a week in 2008 and now people are trying to make a fricking mountain out of a molehill. Percentage wise that was a 15 percent drop. 1360 versus 1420 is barely more than 4 precent.
there was no china on the other side back in 2008. GS at al could have done it forever if it was not for the chinese...
Ive set it as my Homepage !
Well this should be interesting.
Okay, so which is it? Listen to the bears and sell /SIH1? Or the "former employees" and buy the same? Or both: sell /SIH1 now and buy it in 6 weeks?
Blythe's former traders are advising major hedgefunds and billioniare investors to buy up as many contracts as possible as March 1 approaches and deposit the cash needed to stand for delivery for the month of March.
Can anyone confirm this, or is it just internet rumor?
The purpose is not necessarily to bust the Comex but to force the Comex to pay a premium (some as much as 30 percent) for cash settlement.
Does the COMEX have to pay a premium on cash settlements?
I saw this same story on another website and a knowledgeable reader did a nice job of shooting it to shit. I hope ZH isn't posting newsgroup bullshit.
If it is an internet rumor, it seems to be coming from a few different allegedly first hand sources. This is the third time I have heard it in a 90% similar fashion.
the logic works pretty good though based on what has been going on for the last few quarters at least...
You have to pay the full amount on the last business day of Feb. However, the March contract can be traded almost to the end of March. If the short-side doesn't have the silver to deliver and wants to close the contract. I think only a cash premium can entice the long side into doing this. Otherwise, why should the long side close it?
http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_J/threadview?m=te&bn=10073&tid=381868&mid=381868&tof=2&frt=2#381868
That is the same letter. Could you please explain your point? Many thanks.
I was showing the source, so anyone can play. The poster has a number of messages to deny or confirm their value.
It's illegal to settle in cash. Silver contracts MUST be settled with silver.
Indeed. But you can still trade in a delivery month, can't you? You can still close your longs without taking delivery if the short-side puts a large sum of money into your account (cash premium), can't you?
Yes, you can trade it. No, if the long stands for delivery, silver must be delivered by whatever short holds the contract at the end of the delivery month. If it is not, that is a violation of the rules of the exchange, and against government regulations. It's just that these things are not being enforced right now.
There is not fair premium that can be paid if they long wants silver. The reason for this is that the short SHOULD be paying MARKET PRICES for the silver. If there is not enough silver available at the current price, then they are obligated to bid it up until it is. Settling in dollars at a premium, while it might sound like a good deal for the longs, is really a rip off, because the silver simply isn't available in the quantity they are entitled to at the current spot price. Think about it. If they offer a premium of 30% in dollars, why wouldn't they save money and go buy it themselves? They could get eagles for that premium. The silver simply isn't there.
You are right. But most of the hedge funds still have to pay their clients in fiat. Silver is not the legal tender unfortunately although I think it will become one day. As a result, a 30% premium (return) is still not bad in 2 months.
You sure silver is not legal tender?
http://www.constitution.org/constit_.htm#con1.10.1.5
Come on. That's only in theory...Can you ever use a silver bar to pay your grocery bill?
Silver coin...yes most of us have at some point in our lives. So, not theory.
http://www.constitution.org/constit_.htm#con1.10.1.5
90% Circulated Silver CoinsSection. 10. No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;
US 90% silver coins minted before 1965 are a popular way to invest in silver bullion. A "bag," ($1000 face) contains approximately 715 ounces of silver and generally tracks the spot price of silver penny for penny. If silver goes up ten cents, a bag of 90% rises $70 or so; however, bag prices sometimes lag spot price changes.
http://www.silvercoinguide.com/SilverCoins/90-circulated.php
Most retail brokers will not arrange physical delivery. A couple years ago I called about ten and found only one that would.
I keep hearing people asserting physical delivery is easy. Can you provide me with the name of a broker who will get 5000 ozs. of silver to me? The one that I found a couple years ago stopped at the COMEX warehouse release. Wouldn't arrange for an armoured car (he told me they won't let you pick it up yourself).
Anyway, I'd love to see somebody write a soup to nuts article on how to get a contract delivered to your door. Ideally it should be written by a broker who will walk you through the process step by step.
The following list of American Eagle and American Buffalo Gold Coin Program retailers is provided as a sampling of local, as well as national, American Eagle and American Buffalo Gold Coin Program retailers. Additional companies may be found in your local telephone book under "Coins" or "Gold."
The companies that appear on this list are neither affiliated with, nor are they official dealers of the United States Mint.
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Please select the state you are interested in.
Locating a coin dealer is easy. Visit www.usmint.gov/bullionretailer.
Mark
Its my understanding that your broker HAS TO arrange for delivery afterall they are commodities brokers. So this is my understanding of how it works.
Last notice day you tell your broker you wish to take delivery of one (or more) contract Si..
They notify comex and your account is debited the 28-30 grand.
You recieve in the mail a certificate(s) for 5 1000oz silver bars which may be +/- 1000oz. The certificate will have the bar #, weight, and manufacturer that is stamped on the bars. There is a certificate for every bar in official storage.
You are now on the hook for storage costs $/yr..
To get the bars in your hands you make arrangements with the contact person and they send the bars insured US postal service to any address in the USA after you have paid applicable fees and provided appropriate paper work.
If broker is a lazy lying cocksucker he won''t want to do this little bit of extra work even though it is done after trading hours while they are still in the office. Tell him you want your fucking property.
OK, but 9 out of the 10 brokers I contacted said you must settle in cash.
Like I said before though, I'd love to see an article written by a broker who will help get you the bars. I've never seen such an article.
Lately I've been buying from Sprott Money (https://www.sprottmoney.com/index.php). You just order on-line, wire transfer the money, and the bars or coins come to your door delivered by Purolator or Fed Ex. You do have to pay for insurance (the same applied when I used to order from Kitco), but it is no hassle. In fact, I ordered some coins today from them. I think the most I've ordered at any one time "from a weight perspective" was 1,500 oz, but I don't see why 5,000 oz would be any different.
Hi Mark - I found this- here: http://goldismoney2.com/showthread.php?4856-Delivery-of-a-COMEX-silver-c...
Delivery of a COMEX silver contract: My experienceThanks, very, very much Mojine!
Should add that that is only if the long stands for delivery. A short may buy a long contract and cancel his position prior to the deadline to stand for delivery.
Isn't that just covering your short, which has the same, desired effect (driving up spot) ?
It is in theory, the same way cash in hand is equal to bank deposits. When a substantial number of people stand for delivery, however, there will be fewer paper longs that are willing to sell (as they are standing for delivery), meaning you CAN'T cover your paper with paper, and can be forced to deliver actual metal. This is the essence of the buy silver, crash JPMorgan movement, and why naked shorting can be extremely dangerous, not just for the one shorting, but for the exchange itself.
It's all theory, though.
If JPM is being held up by some vigilantes for a million oz of silver that they *cannot* deliver, Comex is already finished, and it ends up in court.
I don't think it's likely (hell, I don't think it's POSSIBLE) that the judicial branch is going to attempt to force JPM to bid the price of silver into the stratosphere for the purpose of one failed transaction. The US dollar "is legal tender for all debts, public and private."
That's by definition. That's how it has to be. That's the "get out of jail free" card for everyone with access to unlimited fiat.
That is true, but for owners of physical silver, it is the same thing. It puts a minimum value on their silver. It is worth AT LEAST the premium those guys are paying. Likely much, much more.
fok these monkey bears.. please let me get 25 so i cant dump my hedge and reload.
would like to see that too. would like to buy back my covered calls and my short 2x gold. momentum indicators are getting close, but doubt we will see 25. 27 maybe.
Isn't it the end of this week that Jim Sinclair loses his gold price bet? Someone did take that bet, right? Jim won't have to sell $1m dollars worth of gold to pay for his price bet loss will he? Knowing how manipulated the metal markets are, he was crazy to make that bet.
Crazy yes. Poorer for it no. I don't think anybody had the sand to take him up on it. Good news is the million dollars he bet lost 30 percent of it's value during the run if anyone had took him up on it.
Let's examine the confidence hit. If it somehow stays under 1380 through the 2nd week. He missed by a whopping 20 percent. Every statistic coming out of he government does that every day of every week and it absolutely creams half of morgan stanleys research desk.
Correct me if I'm wrong. But didn't Jim Sinclair say if it misses 1650, Gold would hit 5,000 by June?
I don't know. I was expecting about 1480ish right about now. But this is a play all month post results kind of thing. So they are really skewing curves hard now. I have to sell some pretty soon but I don't really care. Like I said I bought at 930. It went to 990 before falling off to 820ish or maybe even lower. When I bought I still had several months worth of cash so it never bothered me. I sold one at like 890 but every single other one has put me ahead of the inflation curve fairly solidly.
I don't care what gold's price is and I only want it to go up hard and strong and steady becasue all along the path it screws with real estate and absolutely nukes the technology sector. It's got bill gates going to the bond market every year and goldman IPO'ing for nvidia left right and center. It's pissing off china because they got invited over for dinner when there was nothing but scraps left.
I've been mega long GPRLF since .32.....and still accumulate on the cartel raids
http://finance.yahoo.com/echarts?s=GPRLF.PK+Interactive#symbol=GPRLF.PK;range=6m
Relax kids, Uncle Scam has things under control:
On January 5, 2011, the new House of Representatives convened and duly swore in a new House Speaker.
The Speaker, Republican John Boehner, told his colleagues that they must tackle “tough issues” - like
cutting spending and reducing the deficit. Indeed, Mr Boehner and his Republican majority in the House
have pledged to vote at least once a week on bills which “cut spending”. Their first vote, set for January
6, is a 5 percent reduction in the amount spent by House politicians on their offices and staff. They claim
this will save $US 35 million over the next nine months. The US government presently spends $US 35
million every seven minutes.
silver nipple clamps
bytches...
I love these bears...
lmba
fruad
ill take typos for celerity anyday odaweek.
I like silver, I buy silver.
That said, this has all the hallmarks of a con.
You have been given insider information -
some of it sounds plausable.
you could make a lot of money, but you have to act now.
I'll buy Silver Wheaton at $27
Actually the con is federal reserve notes. Imagine the pitch to try to convince you of their inherent value.
Good point.
The bears are excellent marketing, and this insider shit stinks.
If it wasnt for the COMEX and LBMA numbers I'd be running screaming.