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Silver Margin Hikes Begin... And Nobody Notices

Tyler Durden's picture




 

You didn't think they'd forget did you. We predicted last week that the exchange would imminently hike silver margins. Well, our prediction was just a little off (and far more spot on than all those speculations about a weekend Greek restructuring and/or Chinese revaluation). As expected, the Shanghai Gold Exchange just announced it had raised the level of deposit required for its
silver forward contract by 3 percent and may roll out further
measures to curb excessive speculation and manage price
volatility.
According to the SGE, margins on its silver [Ag (T+D)] forward
contract would be raised to 15 percent from April
25 compared with the previous 12 percent, according to a notice
posted on its website. Silver did not even pretend to react on the news. And the upcoming silver hike by the COMEX will have absolutely the same effect.

From Reuters:

The SGE also it would raise from Tuesday the daily price limit for the contract, which has a lot size of one kilogram, to 8 percent over or under the previous session's settlement from the previous 7 percent.

"Should the market continues to show signs of overheating, the exchange will implement other measures such as raising the deferred rates to improve risk controls," it said.

The SGE's silver forward contract has soared in recent months in line with the meteoric rise in the U.S. silver futures contract. It was up 5.5 percent at 10,652 yuan ($1,637) a kilogram at 0624 GMT, bringing its gains so far this month to 33.6 percent.


h/t Steve

 

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Mon, 04/25/2011 - 04:42 | 1202675 GS is short Gold
GS is short Gold's picture

Well, the Chinese are aggressive in trying to contain bubbles. And there's no bigger bubble forming now than the one in silver.

Mon, 04/25/2011 - 05:02 | 1202716 EscapeKey
EscapeKey's picture

You mean, except for ponzi scheme US Treasuries?

Mon, 04/25/2011 - 06:58 | 1202873 Dont Taze Me Bro
Dont Taze Me Bro's picture

I would fully support COMEX's decision to raise Silver margins. This thing is now fluctuating $3 per day. That's almost 2X the current daily maintenance.

I am surprised people at ZH think this is a bad thing.

 

 

 

Mon, 04/25/2011 - 08:53 | 1203107 Bicycle Repairman
Bicycle Repairman's picture

It is a good thing.

Mon, 04/25/2011 - 05:07 | 1202727 bothsidesnow
bothsidesnow's picture

Forget it you can't educate fools that will be crying a river of tears soon.

By the way silver in my spot Forex account peaked at 49.87 and dropped to 49 and has been range bound between 48.90 and 49.30 for the last 4 hours.

Mon, 04/25/2011 - 05:37 | 1202766 EscapeKey
EscapeKey's picture

OHNOES IT'S NO LONGER PARABOLIC.

Funny how these "uneducated fools" have been dead right for the past year. But hey, whatever floats your boat, Apr11 anti-PM flavour.

Mon, 04/25/2011 - 06:15 | 1202807 markmotive
markmotive's picture

I begin to worry about an asset class when I see these kinds of daily price gains.

 

Mon, 04/25/2011 - 06:18 | 1202810 EscapeKey
EscapeKey's picture

I don't disagree, but that's what hedging is for. My main gripe was the condescending tone.

Mon, 04/25/2011 - 08:32 | 1203033 mrgneiss
mrgneiss's picture

2010 Silver institute stats:

Silver 2010 total fabrication and investment demand: 1056.8 Mozs

Silver 2010 total mine supply (including by-product): 735.9 Mozs

The shortfall is made up by government stockpiles and scrap supply.  Government stockpiles are dwindling, and you can only sell the family silverware once.

http://www.silverinstitute.org/pr07apr2011.php

The trolls may be partially right in that we may be close to a near term top, but the silver story has a while to go.  Primary silver miners are running full out, a few new mines will be brought into production over the next 1-3 years, but most new silver production is at least five years away if not more.

We could see a temporary crash when Ben announces that QE2 will not continue - but I suspect it will continue in some form.  The government faces deflation, falling taxes and debt default if they completely cease printing, and devaluation and inflation if they keep it up.  Most everyone here knows this, and Ben has said he would choose the latter.

Bottom line, any comparisons with 1980 are fallacious and misinformed at best, or done by ignorant idiots or those with an agenda at worst.

So if you hold physical don't worry, if you're playing silver on margin protect yourself, and if we do see a nice correction that will be the time load up.

Mon, 04/25/2011 - 10:40 | 1203428 Math Man
Math Man's picture

But industrial uses were only 487mm ounces.... or less than half of supply. 

Speculative demand by idiot ZH readers is what is driving this bubble...  it is up 150% in a year!!!!!!!

Mon, 04/25/2011 - 11:08 | 1203547 Calculated_Risk
Calculated_Risk's picture

yeah, dollar debasement has NOTHING to do with it. At all! fuck off troll.

Mon, 04/25/2011 - 11:54 | 1203717 Math Man
Math Man's picture

If it was dollar debasement, Gold would have more than doubled in the last six months too...

But it's hasn't.

Nothing but a speculative bubble driven by idiots who think the dollar is devaluing, when the reality is DXY is as the same level is was 3 years ago, while silver has moved up 5x.

We'll be back below $20 this summer.

Mon, 04/25/2011 - 12:36 | 1203864 Ahmeexnal
Ahmeexnal's picture

And the US/European/Japanese debt will be back at 2008 levels this summer too?

Your complete lack of analitical skills coupled with your double digit IQ is a sure recipe for disaster.

Why don't you just take a permanent ride on your Ferrari?  With gas prices about to go back to 2008 levels, you must be glad your piece of shit car is a very efficient one at burning fuel.

Mon, 04/25/2011 - 13:05 | 1203991 Charlie Bravo
Charlie Bravo's picture

"We'll be back below $20 this summer."

I recall some fool predicting $8 LAST summer....

Charlie Bravo

Mon, 04/25/2011 - 11:20 | 1203606 Ruffcut
Ruffcut's picture

You are a moron. Demand is demand and spec or not, people demand it and so the price goes.

The more it is hoarded off the market, the more it goes up.  Most that have physical will keep it under hell freezes over. I could give a shit if it went back to 20. It is a long term hold.

Mon, 04/25/2011 - 11:23 | 1203607 riley martini
riley martini's picture

 The Chinese are the big buyers . King World market wrap.

Mon, 04/25/2011 - 13:06 | 1204008 mrgneiss
mrgneiss's picture

Yes, all the people buying in India and China were completely influenced by Zero Hedge.  Zero Hedge is very big over there, despite the language issues.

2010 silver industrial demand up 20% - was that because of Zero Hedge as well?

2010 investment demand - up 40% - a good amount but far from a frenzy when the worldwide total silver investment is $5.6 billion, for one year, isn't that like 2% of Apple's market cap?  .01% of daily forex flows?  etc

http://www.silverinstitute.org/pr07apr2011.php

Like I said, their probably will be pullbacks, but it will take at least 2-3 years for silver supply/demand to come back into equillibrium.......albeit at a much higher price than now

Mon, 04/25/2011 - 18:33 | 1205579 latcho
latcho's picture

that's a compliment wright ?

Mon, 04/25/2011 - 18:41 | 1205582 latcho
latcho's picture

just wait until the "Idiot ZH'rs" diversify to water :D

Mon, 04/25/2011 - 06:17 | 1202811 Snidley Whipsnae
Snidley Whipsnae's picture

Continue to worry... While I am counting profits.

Mon, 04/25/2011 - 06:15 | 1202809 Snidley Whipsnae
Snidley Whipsnae's picture

Two new trolls? That's all? I figured at least a half dozen new ones would show up this am. lol

Load em up with negs... No sense trying to debate a troll.

Mon, 04/25/2011 - 06:19 | 1202812 EscapeKey
EscapeKey's picture

"Never debate a fool, he will drag you down to his level, and then beat you with experience."

Mon, 04/25/2011 - 07:27 | 1202947 Thomas
Thomas's picture

I posted that as my "Quote of the Day"

Mon, 04/25/2011 - 12:33 | 1203852 Long-John-Silver
Long-John-Silver's picture

I figured at least a half dozen new ones would show up this am.

 

Remember; you must wait to be approved to post.

Mon, 04/25/2011 - 05:44 | 1202773 Lord Welligton
Lord Welligton's picture

has been range bound between 48.90 and 49.30 for the last 4 hours.

Why are you emphasising the last four hours?

Here's a chart since the beginning of April.

http://www.kitco.com/scripts/hist_charts/monthly_graphs.plx

Mon, 04/25/2011 - 09:53 | 1203247 ivars
ivars's picture

Now it is 47,76. In crash, short term last hours are very importants as we pass through the peak.

 

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&sta...

Mon, 04/25/2011 - 07:12 | 1202911 Hephasteus
Hephasteus's picture

"Forget it you can't educate fools that will be crying a river of tears soon."

Ya we are going to cry. Our girlfriends our going to leave us. The dog will stop wanting to hang around us and run away. We'll be losers. We're just big stupid idiots. It's going to be horrible all the terrible terrible things you will do to us. It's going to really suck and likely generate a huge amount of regret. The regret will be a never ending ordeal of some sort. We'll be laughed at. Butthurt. Forever full of some massive amount of sorrow and misery.

Mon, 04/25/2011 - 07:43 | 1202970 SWRichmond
SWRichmond's picture

+1.  I bought my silver at $14.00.  It would take a lot to make me shed a single tear.

Mon, 04/25/2011 - 08:16 | 1203016 Hephasteus
Hephasteus's picture

I'm completely dead inside.

I got cuts all over my hands from sharpening axes and knives and stuff. Sharpened till mild pressured swipe produces a cut.

Put a new blade in the hack saw just in case they want to take this to the really ugly level.

I don't care about winning or losing or tallying up gains or losses. I just want these psychopaths under a goddamn thumb and quick. All the people spouting religious bullshit all easter is NOT a good sign.

Mon, 04/25/2011 - 08:17 | 1203019 EscapeKey
EscapeKey's picture

All the people spouting religious bullshit all easter

??? It's easter, what did you expect???

Mon, 04/25/2011 - 11:25 | 1203619 Ruffcut
Ruffcut's picture

Cuts from sharpening?

They make something for that. THEY"RE CALLED GLOVES.

Mon, 04/25/2011 - 09:15 | 1203145 SWRichmond
SWRichmond's picture

Waiting is hard, and hard on us.  Take a walk outside in the sun.

I had an awesome salad for lunch yesterday: radishes and lettuce from my garden with a little olive oil and goat cheese.

Edit: I am glad I am not a young man.  The patience that I now have is both an asset and a liability, but lately mostly an asset.

Mon, 04/25/2011 - 10:29 | 1203372 Creed
Creed's picture

I'm completely dead inside.

 

 

all you that labor & are heavy laden, come to me and I will give you rest- JC

 

by Hephasteus
on Mon, 04/25/2011 - 08:16
#1203016

 

I'm completely dead inside.

I got cuts all over my hands from sharpening axes and knives and stuff. Sharpened till mild pressured swipe produces a cut.

Put a new blade in the hack saw just in case they want to take this to the really ugly level.

I don't care about winning or losing or tallying up gains or losses. I just want these psychopaths under a goddamn thumb and quick. All the people spouting religious bullshit all easter is NOT a good sign.

Mon, 04/25/2011 - 05:55 | 1202786 Twindrives
Twindrives's picture

Whatever.   The biggest bubble in history is the U.S. dollar.   The biggest liar in history..... is a toss up between Boy Barry Soetoro and Ben Shalom.  

Mon, 04/25/2011 - 06:49 | 1202852 slaughterer
slaughterer's picture

" And the upcoming silver hike by the COMEX will have absolutely the same (no) effect."

Depends on how much the COMEX hikes.   The Asian hike was benign.

Mon, 04/25/2011 - 04:45 | 1202680 FOC 1183
FOC 1183's picture

Are food stamps considered acceptable collateral?

Mon, 04/25/2011 - 05:48 | 1202778 The Navigator
The Navigator's picture

Why not - FRNs are - all paper, all phony.

I love the sound of real money, silver tones.

Mon, 04/25/2011 - 04:45 | 1202684 Moe Howard
Moe Howard's picture

I'm overheating. Please someone raise my margins.

Mon, 04/25/2011 - 04:56 | 1202711 Blotsky
Blotsky's picture

Ha! I can hardly understand half of what is being said but I know damn well that in the end this isnt going to be nice... unless you own silver... which I dont...

Liquor works wonders with stress.

Mon, 04/25/2011 - 05:20 | 1202742 topcallingtroll
topcallingtroll's picture

You can learn it all if you stick around and google some definitions and lingo. This is the best place to watch the runaway train. Maybe they will get it under control, maybe not. Enjoy the show.

Mon, 04/25/2011 - 05:28 | 1202752 Moe Howard
Moe Howard's picture

Thanks for the idea.

 I will pour some taxpayer subsidized corn ethanol on my margins and see if the superior evaporation rate will cool them sufficiently.

 

 

 

<HELP> For Explanation

Mon, 04/25/2011 - 05:36 | 1202763 Lord Welligton
Lord Welligton's picture

see if the superior evaporation rate will cool them sufficiently.

Would that work on spent fuel rods?

Mon, 04/25/2011 - 07:49 | 1202981 Moe Howard
Moe Howard's picture

Worth a 'shot' I would think.... BOOM!

Mon, 04/25/2011 - 06:41 | 1202842 nmewn
nmewn's picture

And Curly says...Hey Moe!...they're printing out the subsidy now!...ykkk ykkk ykkk...whooop whooop whooop!!!

+ 1

Mon, 04/25/2011 - 07:51 | 1202986 Moe Howard
Moe Howard's picture

+1930's for the stooges reference continuation! Pop goes the weasel.

Mon, 04/25/2011 - 05:35 | 1202761 4horse
4horse's picture

am sorry.

 

liquor . . .       . . . find a woman

         water.wetter

     everything you got

 

.  .  .  out of which, May----->thru Summer, you might get another shot

as The Fed may make'em beg for its QE and correct'em into the bargain, both taking down/and shooting the moon, as its silvery beams prove a last silver lining

q.e.d.

 

 

 

 

Mon, 04/25/2011 - 04:54 | 1202704 Buckaroo Banzai
Buckaroo Banzai's picture

Fart, meet Hurricane.

Mon, 04/25/2011 - 05:28 | 1202750 akak
akak's picture

And there's a nicely jagged 2X4, airborne at 180 mph, with the name "JPM" written on it.

Mon, 04/25/2011 - 05:15 | 1202729 topcallingtroll
topcallingtroll's picture

The Troll accepts Haephestus's bitchslap with a smile and admits he is probably wrong.

If China has threatened Dr. Rigabon and his financial search engine (the billion price project) with a lawsuit then that means the inflation problem is worse than I feared.

Monster bull markets become pretty much immune to all influences. This may be one. We may still have a massive correction over the summer, but unless we have incontrovertible proof of a robust self sustaining recovery with minimal inflation, then any drop in silver priceswill come roaring back.

We must have a self sustaining recovery with everything under control by september/october otherwise this monster bull will awe the world shortly after The lack of faith in virtually everyone of europe, japan, china, and the usa solving this is becoming more recognizable.

Be careful, because the volatility can get dramatic in both directions. I would not recommend betting the farm on silver unless you buy enough puts and sell enough out of the money calls to limit your volatility to a level that lets you sleep at night. If you are playing silver and gold with substantial exposure and dont know how to buy and sell options to protect your position then you may end up as one of the bagholders in the end.

Mon, 04/25/2011 - 05:17 | 1202738 Hephasteus
Hephasteus's picture

They'll drive those evil speculators out that is using all this borrowed money to drive up prices.

Mon, 04/25/2011 - 05:20 | 1202743 Chicken_Little
Chicken_Little's picture

If a global physical shortage is indeed unfolding, many of the parties buying the contracts intend to stand for delivery and could care less about margin requirements. This could be "The Big One" that we've been waiting for  :)

Mon, 04/25/2011 - 05:24 | 1202744 unky
unky's picture

Wasnt silver to go only to 48 and then drop to 45.50 according to tfmetals ? Damn it, I should have bought the dip at 47.73

Mon, 04/25/2011 - 05:27 | 1202749 Kristian
Kristian's picture

To what extent should they raise the margin requirements to have a substantial effect on the silver price? I suppose the majority of buyers of the metal don't buy through the futures market (correct me if I'm wrong), so margin hikes have no effect whatsoever on their demand.

Mon, 04/25/2011 - 05:28 | 1202754 akak
akak's picture

If they were to conduct the whole business rationally and logically, why wouldn't they just set the margin requirements as a percentage of the spot price, instead of as a fixed dollar amount?  That way, there would be no need and no reason to constantly tinker with (manipulate?) them, would there?

Mon, 04/25/2011 - 05:49 | 1202781 topcallingtroll
topcallingtroll's picture

That would be too open and rational.

"Surprise" margin changes are a tool of manipulation and allow insiders a trading advantage.

Mon, 04/25/2011 - 06:50 | 1202854 Hephasteus
Hephasteus's picture

If you want to find a fool. Just make a rule.

Mon, 04/25/2011 - 11:52 | 1203720 dehdhed
dehdhed's picture

using a percentage would be counter-intuitive.  as the contract becomes more and more profitable ... more and more maintenance would be required.   as the contract lost money .. less and less maintenance would be needed.

wouldn't make sense

Mon, 04/25/2011 - 18:57 | 1205634 akak
akak's picture

Why would that not make sense?  It makes PERFECT sense to me!

And in any event, how would an automatic margins requirement system be inferior to the arbitrary and manipulative system based on nominal dollar requirements today?  Adjustments have to be made either way, so why not make them consistent?

Mon, 04/25/2011 - 05:49 | 1202769 SME MOFO
SME MOFO's picture

the fucking longs dont care about margin hikes because they are so in the green over the weekend they don't care.  This only hurts the shorts because their net liq has been hammered by the quick move up.  So shorts need to buy more if they raise margins today.  Longs just need to sit quietly and giggle while hugging themselves and rocking back and forth.

Mon, 04/25/2011 - 06:08 | 1202803 Catullus
Catullus's picture

Winning comment.

Mon, 04/25/2011 - 07:52 | 1202982 aVian
aVian's picture

Longs just need to sit quietly and giggle while hugging themselves and rocking back and forth.

classic

Mon, 04/25/2011 - 09:35 | 1203204 Dr. Impossible
Dr. Impossible's picture

 "Longs just need to sit quietly and giggle while hugging themselves and rocking back and forth."

been giggling since before GW Bush took office...gold entry..flake average priced 45bucks(garage sale, scrap jewerly, post refinement) ...giggling aint the word.

i guess a banker or economist type could make a claim my gold is worth nothing, if the dollar disappears.. or gold is no longer priced in dollars.

but i willing to speculate on the value of convertibility.

went to a garage sale last fall, bought a Dell Vostro 1000 lappy, broken, for 5 bucks. Theres alot more than 5 bucks worth of PM's in it..took about an hour with a soldering iron, and it was fixed....started it up....it was still under warrenty...it had 90hrs run time on it..so do i salvage the gold, and PM's? or use it, or sell and buy another coin?...hell the magnet in the hdd alone is worth more tehn 5 bucks, working or not.

buahhahahahahahahahha

....paper chasers...

http://www.youtube.com/watch?v=koVHN6eO4Xg

Mon, 04/25/2011 - 05:52 | 1202782 baustibaustafa
baustibaustafa's picture

YOU GOT IT!! SME MOFO.  I'm a silver long and that is just the way I feel. :)

Mon, 04/25/2011 - 06:03 | 1202797 SME MOFO
SME MOFO's picture

I said quietly

Mon, 04/25/2011 - 05:56 | 1202785 Kristian
Kristian's picture

I have to admit I could have made an additional €10000 or so if I hadn't closed a (future based) long position before the week-end. So now what.. wait for a blip to 46, who knows. Be content with the profits I've made so far and convert some of it into physical. Perhaps more important, is trading in the paper market too risky with a possible Comex default this week, or some time in the not-too-distant future?

Mon, 04/25/2011 - 13:47 | 1204274 tomster0126
tomster0126's picture

what about now, after Con-ex has no more silver eagles?  (supposedly)

 

www.forecastfortomorrow.com

Mon, 04/25/2011 - 13:50 | 1204286 tomster0126
tomster0126's picture

what about now, after Con-ex has no more silver eagles?  (supposedly)

 

www.forecastfortomorrow.com

Mon, 04/25/2011 - 05:55 | 1202787 johnnymustardseed
johnnymustardseed's picture

My Kitco price app just melted my iphone!! :)

Mon, 04/25/2011 - 06:05 | 1202800 Youri Carma
Youri Carma's picture

SILVER LIBERATION ARMY http://silverliberationarmy.com/ No matter how hard you try you can’t stop us now! http://youtu.be/j0QhSnNDU5I

Mon, 04/25/2011 - 08:45 | 1203065 JPMorgan
JPMorgan's picture

Go King Keiser, this chap is a legend.

He will have Blythe as his personal gimp cleaning all his silver ware before this revolution is over.

Mon, 04/25/2011 - 06:05 | 1202802 Id fight Gandhi
Id fight Gandhi's picture

If people aren't shorting theyre buying metals.

Can someone comment on the margin hike today vs what they did to the hunt bros?

Mon, 04/25/2011 - 06:26 | 1202821 Snidley Whipsnae
Snidley Whipsnae's picture

The Hunts were using extreme leverage and any dip required they go, hat in hand, to their bankers for more cash to cover the rise in margin requirements. When the US Gov 'suggested' that the bankers stop lending the Hunts money to go long silver, the bankers stopped loaning.

The situation now is totally different. Billions of SE Asians and Indians are buying small and large amounts of physical PMs.

Mon, 04/25/2011 - 06:37 | 1202832 ivars
ivars's picture

"The situation now is totally different. Billions of SE Asians and Indians are buying small and large amounts of physical PMs."

That is the new story near the top? Nothing more creative? Billions of SE Asians and Indians, that is almost everybody suddenly ( over last year) has decided to hoard silver as if they have zillions of spare money to invest. May be they even borrow microloans to by microsilver lots?

Honestly, there could have been a more ingenious story close to the top, but, one of the things close to the top is that the most stupid stories are eagerly accepted.

 

And of course, also today, silver speculators are overleveraged. Nothing new here. Normal precrash talk. Herding of sheep.

 

 

Mon, 04/25/2011 - 06:49 | 1202853 Snidley Whipsnae
Snidley Whipsnae's picture

Ivars the trend is your friend...and, there are billions of new silver/gold investors in SE Asia, India, Mid East and, everwhere PMs are available. 60% of dollars are held overseas and why would anyone want to hold dollars now?

An inconvenient truth, no doubt...

Mon, 04/25/2011 - 07:10 | 1202897 ivars
Mon, 04/25/2011 - 07:37 | 1202961 Stormdancer
Stormdancer's picture

rofl!  I guess some folks think inventing new words makes them look smart :)  Ivars...please...quit pimping that worthless forum.  You're really starting to embarrass yourself!

Mon, 04/25/2011 - 08:20 | 1203028 Bringin It
Bringin It's picture

The last time I checked it was a homage site to the previous govenor of the largest state by land area.  Ivars is on a hopeless mission here.

Mon, 04/25/2011 - 09:04 | 1203129 Hephasteus
Hephasteus's picture

Sorry If your not ready. Sorry if you're scared out of your mind. But this can't keep getting put off and put off and put off.

Mon, 04/25/2011 - 07:00 | 1202871 Dr. Porkchop
Dr. Porkchop's picture

You only mentioned close to or near the top three times in your comment...you better post again i'm not following you.

Mon, 04/25/2011 - 07:03 | 1202888 EscapeKey
EscapeKey's picture

And of course, also today, silver speculators are overleveraged.

Link, please. Since the price moves very little when margins are raised, the likelihood is you're talking shit.

Mon, 04/25/2011 - 07:08 | 1202895 ivars
ivars's picture

They just borrow more. That is what You do in speculative frenzy when it seems sure prices will only go up.

Mon, 04/25/2011 - 07:10 | 1202900 EscapeKey
EscapeKey's picture

Margins have been continuously hiked, yet leverage is increasing? Absolute bullshit.

Or perhaps you speak in nominal amounts, in which case leverage is not increasing.

Mon, 04/25/2011 - 08:09 | 1203008 ivars
ivars's picture

I speak about money speculators borrow to cover the margins. That is not their own money, mostly, but loans whose collateral is the same silver for the same precrash price. Therefore, if something happens to silver prices , they stop to increase, and speculators have to close long positions on margin calls, they are in deep shit.

That is what I call overleveraged. May be traders use their companies money to meet the margins, but also that is in the end borrowed in most cases from some bank. So the whole company is more and more overleveraged in silver long position as margins hike.In nominal terms, of course. Money, not precentages, as it will be money they will lose when silver price crash. Of course, they will only find out they have been overleveraged if there is significant correction.

Now the ones who has shorted long ago suffer in opposite direction as they have to increase margins just because the price goes up relative to the price they shorted silver. They suffer every day and beg for FED to do something NOW. HSBC, JPM are powerful beggars, or masters, of FED. And they are cornered by new masters, the Chinese and Oil nations, who hold the debt and say NO to QE2 even, not to mention QE3. 

They want rate increase. That would help, incidentally, JPM and HSBC as well. And USD. And Chinese. Time to tighten, and look the reality into eyes before it is brought forcefully upon You. Already 4 years have been lost with easy money printing to avoid the pain. Now the pain will be just bigger.

 

 

 

 

 

 

 

 

 

 

 

Mon, 04/25/2011 - 08:21 | 1203020 EscapeKey
EscapeKey's picture

So your argument boils down to people having borrowed a lot of money to post as required maintainance collateral. Again, post link, or I shall consider it complete speculation.

Furthermore, what did they post as collateral for the loans? Futures contracts?

Mon, 04/25/2011 - 08:51 | 1203102 JLee2027
JLee2027's picture

This is not the frenzy. In the frenzy, prices will move dollars in seconds.

Mon, 04/25/2011 - 08:25 | 1203035 Bringin It
Mon, 04/25/2011 - 06:45 | 1202849 ViewfromUnderth...
ViewfromUndertheBridge's picture

This is nothing compared to...

From memory...what they did to the Hunt bros. was to change the rules so that liquidation only was allowed, ie sell only contracts were recognized.

Bunker & Herbert (not so much Lamar) caught the powers that be in a short squeeze, but, they were massively leveraged was their only vulnerability...in the wash up Volcker agreed to lend the family $1billion to help them bail out the two brothers...Jim Sinclair was appointed to assist them liquidate their position as a condition of the loan.

In response to the obvious question "what were you thinking?" I believe it was Bunker who replied "aw, I was just trying to make some money"

found this...worth a read (says Bunker was a doomer)

http://www.sharelynx.com/papers/BunkerHunt.php

Mon, 04/25/2011 - 06:16 | 1202806 Dangertime
Dangertime's picture

This is it folks.  The gap ups are in place and the fat lady is on the last verse of the silver song.  Best sell now, you'll be able to buy again in the low 30's over the summer.

Mon, 04/25/2011 - 06:44 | 1202847 ivars
ivars's picture

True. 30 Usd after the crash, good value to start with in coming years.

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&sta...

Mon, 04/25/2011 - 11:42 | 1203675 prole
prole's picture

If it goes to 30 Dangerman is going to be laughing his @$$ off. And Ivars has been calling this correction for a few days now. Interesting times...

Mon, 04/25/2011 - 14:25 | 1204500 akak
akak's picture

Dangerclown is a completely discredited silver-bashing troll here who has already been  repeatedly outed as the gross and blatant liar that he is.  Junk him, ignore his Nadleresque tripe, and move on.

Mon, 04/25/2011 - 10:04 | 1203282 Richard Head
Richard Head's picture

It's great that ZH can bring together two morons like danger clown and ivars to suck each other's dicks.

Mon, 04/25/2011 - 06:17 | 1202808 Horatio Beanblower
Horatio Beanblower's picture


Nigel Farage: Trapped Inside an Economic Prison (Full Version - Ch. I, II & III) - http://www.youtube.com/watch?v=2YcgACl1Sr8&feature=feedf

Mon, 04/25/2011 - 06:28 | 1202826 ivars
ivars's picture

Interesting to watch the beginning of a silver crash in a real time:

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=160#p31961

Mon, 04/25/2011 - 08:55 | 1203105 Hephasteus
Hephasteus's picture

If by interesting. You mean boring and repetive posting of the same stupid link of a couple retards talking stuff. Then ya. That interesting.

Mon, 04/25/2011 - 06:28 | 1202827 Snidley Whipsnae
Snidley Whipsnae's picture

PM holders have nothing to fear because Ben cannot stop printing without destroying tptb that he has been so careful to protect. This will end with hyperinflation and the dollar will lose it's world reserve currency status. PM holders will have a safe bridge to the other side of the financial disaster. Use your bridge carefully and do not squander it on consumer bs.

Mon, 04/25/2011 - 06:36 | 1202829 Ham Wallet
Ham Wallet's picture

Silver Rules Everything Around Me,  S.R.E.A.M, Get the money...Silva-Silva Eagles ya'll.  

Mon, 04/25/2011 - 06:38 | 1202833 Falkor
Falkor's picture

If the margin hike hits.. it hits shorts too.

Mon, 04/25/2011 - 06:38 | 1202838 ivars
ivars's picture

Which makes some tightening talk by FED even more likely.

 

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=160#p31948

 

 

Mon, 04/25/2011 - 06:54 | 1202859 Snidley Whipsnae
Snidley Whipsnae's picture

Fed tightening talk = jawboning. Nothing to hear from the Fed except more bs. They might change the name of the printing program and even try to hide it... but they will continue to print.

http://fofoa.blogspot.com/search?updated-min=2011-01-01T00%3A00%3A00-08%3A00&updated-max=2012-01-01T00%3A00%3A00-08%3A00&max-results=23

Mon, 04/25/2011 - 07:11 | 1202901 ivars
ivars's picture

Why? To destroy the USD and ability of the USA to borrow in 1 month?

Mon, 04/25/2011 - 07:58 | 1202995 Gyro Gearloose
Gyro Gearloose's picture

Yes......It's like shooting a man that's already dead! 

To deep for ya?

Mon, 04/25/2011 - 08:10 | 1203006 ViewfromUnderth...
ViewfromUndertheBridge's picture

we need you to think more...post less.

Mon, 04/25/2011 - 08:59 | 1203116 Stormdancer
Stormdancer's picture

"Give me the power to make new words like "superexponential" and "log-periodic" and I care not who writes the MENSA tests!"

 

Yours Truly,

Ivars

Mon, 04/25/2011 - 12:27 | 1203816 malek
malek's picture

What do you think the ability of the USA to borrow is today? If not for the FED to buy up treasuries???

Mon, 04/25/2011 - 08:28 | 1203042 Bringin It
Bringin It's picture

Ivars - having you here making this call ... makes it even less likely.

Mon, 04/25/2011 - 06:38 | 1202835 slewie the pi-rat
slewie the pi-rat's picture

hold her steady, maties! 

ahoy!  is that the yuan in backwardization?  AHHHRGHHHHRRRhhhhhhrrrrhhhh!

Mon, 04/25/2011 - 06:40 | 1202836 HitTheFan
HitTheFan's picture

Hmm, I don't know.

Silver is up so much over the past year or two, there's no way that reflects the risks in the fiat system.

I find it odd that ZH blames The Fed for causing speculative bubbles in oil & food through QE2, and yet silver & gold are somehow deemed to be different. Wake up, it's so obvious, it's a bubble that will burst violently, just like in 2008.

I'm sure, as with Dutch tulip bulbs, that silver/gold investors will regret not taking some significant profits at this point in time.

In my view the doomsday scenario is nonsense, the world will find a way to reset the debts (haircuts galore), and we'll go back to low growth for the next 100 years or so. Armageddon will do no one, including gold & silver holders, any good, yet so many here seem to almost wish for it.

Very strange.

Mon, 04/25/2011 - 06:40 | 1202841 ivars
ivars's picture

Exactly. Correction in making, this week. Do not use loans to finance margins and be long in silver. That will hurt.

Mon, 04/25/2011 - 06:51 | 1202858 slaughterer
slaughterer's picture

The silver market, its order book, and its spreads were illiquid this last weekend, and are partially illiquid today.   This has all the makings of a massive volatility fight out....  There is very little sense in predicting where silver is going today, except violently up and violently down.   Perfect scalp assignment for the currently unemployed CITI algos.    

Mon, 04/25/2011 - 06:53 | 1202861 EscapeKey
EscapeKey's picture

And what will happen to said banks which will have to accept haircuts?

I'm sure British banks can withstand an Irish banking sector collapse, but can the Dutch, Belgian, and Danish? And can the British withstand a simultaneous Irish, Dutch, Belgian, and Danish collapse? I think not.

Mon, 04/25/2011 - 07:10 | 1202910 ivars
ivars's picture

Banks will go bank-corrupt.

Mon, 04/25/2011 - 12:33 | 1203839 malek
malek's picture

Another late-comer to the show. The right thing will never be done (unless forced by a general collapse). Common sense will not return to the ruling elite. Give up believing in it!
Make your predictions, watch closely and notice how every craziness gets topped by even more insanity. Then some day you will learn, at least if you still have an adjustable thought process.

Mon, 04/25/2011 - 12:31 | 1203830 CelticWarrior72
CelticWarrior72's picture

I agree.  I took 1/3 of my SLV position off the table today for a 200% gain.  I'll let the rest ride for the moment.

Mon, 04/25/2011 - 12:35 | 1203850 malek
malek's picture

Hmm. What you gonna do with the FRNs, from the realized gain? (after paying 28% or so CG taxes if you live in the US)

Mon, 04/25/2011 - 06:52 | 1202855 Snidley Whipsnae
Snidley Whipsnae's picture

LOL... the trolls are out in force today! Blythe must have increased the troll budget!

PMs are kicking butts and taking no prisioners. Get over it trolls!

Mon, 04/25/2011 - 06:54 | 1202862 slaughterer
slaughterer's picture

I do not think there are many trolls paid by BM/JPM.  There are investors who actually think silver will correct.  

Mon, 04/25/2011 - 06:57 | 1202869 EscapeKey
EscapeKey's picture

How do I go long trolls? I think we'll see more of them as the silver price carries on upwards.

Mon, 04/25/2011 - 12:19 | 1202884 Wakanda
Wakanda's picture

Hot buttered silver bear (t)rolls for breakfast.  Yum!

Blythe et al will serve up more as Ag surges to $60 later this week.

"Weeee!  This investing stuff is easy!"  -  MG

Mon, 04/25/2011 - 14:28 | 1204525 akak
akak's picture

The real paid anti-PM trolls can always be spotted by their habit of swarming at the top of  almost every PM-related thread, to disrupt and muddle the discussion before it even has a chance to develop ---- classic forum trolling strategy.  Such trolls as Spalding_Snailes and MethMan are infamous for doing this, but others will do it as well.

Mon, 04/25/2011 - 06:54 | 1202864 Youri Carma
Youri Carma's picture

SILVER: DON’T WAIT FOR THE CORRECTION!

Alexiscom1: COMEX DEFAULT NEARS : Bob Chapman, Easter Sunday Part 1 of 2 http://youtu.be/yqcSatqmYrU

COMEX DEFAULT NEARS : Bob Chapman, Easter Sunday Part 1 of 2 http://youtu.be/LbodGi5T8ZU

$50 SILVER IS NO RESISTANCE : Bob Chapman, Easter Sunday Part 2 of 2 http://youtu.be/S1H3fxzfyYE

Kitco Audio: Big Al and Trader Rog discuss precious metals and today it’s all about silver! http://youtu.be/Nv7wgmNBGa8

A skilled daytrader I think. 5 new waves for silver higher he says. $51-$58 will give (maybe some) resistance because of the ol record of 1981 but this is more a psychological barier. Silver target $60 ($59.85) taken before June 31 he says.

See Also: Silver’s PARABOLIC Trajectory and Demise of the US Dollar Technical Analysis by Matt Chart http://youtu.be/84h9J-zcYGE

Mon, 04/25/2011 - 07:02 | 1202882 sudzee
sudzee's picture

As margin on paper silver increases we will see the real value of a physical silver ounce. Paper to zero. Physical to 64.5.

Mon, 04/25/2011 - 07:05 | 1202893 The Parrot
The Parrot's picture

Lets see:

The US Mint, The Royal Canadian Mint and the Austrian Mint are producing

60million oz of silver per annum (my guess)

May's silver contract at the comex traded at a volume of 250 million oz so far.

And that's just for today.

So what does really have an impact on the traded volume? Higher margin

requirements or higher premiums for silvercoins? Huh?

 

Higher margins are damn neccessary at this point ... silver will correct

sharply if it does not close well above $50 within the next 2 business days ...

Go realize some profits now and before you done the profit counting

you ll see a nice new lever to reinvest. Don t get me wrong, I see silver

at $90+ within one year now, but this steep raise is just not healthy ...

So go sell your silver and wait for the upcoming setback ...

 

Mon, 04/25/2011 - 07:13 | 1202919 EscapeKey
EscapeKey's picture

There could be a short term correction, but none of the central banks have stopped printing money, the deficit issues are still intact, and above ground silver deposits are rapidly shrinking. All bullish for silver.

Mon, 04/25/2011 - 09:35 | 1203203 HitTheFan
HitTheFan's picture

I do think you are wrong, most central banks have not printed money since 2008. Life exists outside the US you know.

Mon, 04/25/2011 - 10:49 | 1203464 Bastiat
Bastiat's picture

So go sell your silver and wait for the upcoming setback ...

I like this one better:

Longs just need to sit quietly and giggle while hugging themselves and rocking back and forth

 

/giggle

Mon, 04/25/2011 - 10:57 | 1203501 mayhem_korner
mayhem_korner's picture

Higher margins are damn neccessary at this point ... silver will correct

sharply if it does not close well above $50 within the next 2 business days ...

Go realize some profits now and before you done the profit counting

you ll see a nice new lever to reinvest. Don t get me wrong, I see silver

at $90+ within one year now,

 

Ahh...the trader mentality.  Believes a doubling of the asset is in the offing, but advises to get the h*ll out in the next [insert number] [insert days, hours, etc.].  

Keep measuring your "profit" in dollars and I'll just keep rotating my sleeves of silver maple leafs.

Gravity always prevails - that gravity is an insurmountable $14.3 trillion ($80+ trillion by GAAP standards).  I don't worry about margins, I just wait it out...

Mon, 04/25/2011 - 07:19 | 1202932 The Parrot
The Parrot's picture

EspaceKey, I fully agree, the fundamentals did not change at all,

we have a serioues monetary problem with Heli-Ben better be prepared.

And if silver closes near $51m $60 will follow shortly, (May) but be aware,

there will be a sharp correction sooner or later.

 

Mon, 04/25/2011 - 08:23 | 1203030 EscapeKey
EscapeKey's picture

There very well might be. Hedge appropriately.

Mon, 04/25/2011 - 07:30 | 1202948 Kina
Kina's picture

PMs are the alternative to fiat. They will remain strong so long as fiat looks sick and sickening and I dont see any improvement in the USD credibility on the immediate horizon. Therefore PMs continue to be good insurance against a depreciating fiat.

Mon, 04/25/2011 - 07:46 | 1202957 slewie the pi-rat
slewie the pi-rat's picture

Dear Trolls:

To be consistent, should you not remind folks that if insurance goes up, they should just stop buying it and cancel all policies?
Now, if you can unglue from the charts and what they "must" mean for the future of prices, please consider:
1) what do PMs insure against? 
2) why would this insurance be going straight up, right now?

If that is too difficult, look at the wheat prices, also just tearing upwards:
1) what does wheat insure against?
2)  why would this insurance be going straight up, right now?

ben shalom batmanke has been saying, for over 3 years, that he is "reflating the economy".
now, he sez:  "inflation is under control."
the PM and grain markets are telling him he is full 0' shit.
a Central Bankster full 0' shit?  now there's something to troll home about!

silver traders have antsy pantsies.
silver holders who are long and have personal possession?  no ants, and clothing optional!

finally, if one has no counterparty risk, one is advised to run out and get some, quickly, now?  pullleeeease!  

people have tried to say, for a long time, that you can be economically safer and better prepared by being out of the system when the system is failing.  we have choices.  if you have chosen to stay in the paper trading game and are now going somewhat insane, perhaps you would be interested in some mental health insurance, which is, unfortunately, quite expensive, right now...

Mon, 04/25/2011 - 08:48 | 1203092 ViewfromUnderth...
ViewfromUndertheBridge's picture

The trolls are hoping to party like its 1980...

To do that they will need:

The Comex to not only enforce position limits (which they did Jan. 17th 1980, this time around the shorts are more concentrated than the longs...so that might not work so well);

but also to change the rules so that only liquidation contracts are processed... yes, that means that you can only sell silver (which they did January 21, 1980), even then it took almost three months to get the price down 30%;

AND ... for Paul Volcker to come back and raise the Fed rate to today's equivalent of 19%...(from October 1979 to April 1980 the US Prime Rate went from 15.25% to 20%) because Ben ain't gonna do it...

So, that was what TPTB were prepared to do last time...what are you going to do this time...whine? Just short it already and shut up.

 

Mon, 04/25/2011 - 11:33 | 1203646 mayhem_korner
mayhem_korner's picture

+1 slewie

I wonder if some of these chumps know what a silver oz actually feels like.  As we holders know, their a bit larger than one would expect.  Personally, I like to build little castles with them...

Mon, 04/25/2011 - 07:51 | 1202978 Youri Carma
Youri Carma's picture
YOURI CARMAS' TAKE ON SILVER (and I lean on the shoulders of giants of course)   5 New waves of silver UP! It will go trough $50 like it isn't there!   Silver target is the real inflation corrected high of the Hunt bros round $140 oz! (According to FT.com*)   When?: $60  taken before the end of June for sure and then it's up to silver $140 sooner than expected in this parabolic move.  


*Gold and silver set new highs after S&P move by Jack Farchy in London Published April 22 2011 http://www.ft.com/cms/s/0/b39a4112-6d0a-11e0-83fe-00144feab49a.html
  Quote: "In today’s money, gold’s 1980 peak is equivalent to about $2,400 a troy ounce, while silver’s record – induced by the billionaire Hunt brothers’ notorious market squeeze – translates to about $140 a troy ounce in real terms."
Mon, 04/25/2011 - 07:50 | 1202983 Gunther
Gunther's picture

Does [Ag (T+D)] mean that after three days real silver is delivered?

Mon, 04/25/2011 - 08:13 | 1203011 HoofHearted
HoofHearted's picture

It means silver to Tyler + Durden.

Mon, 04/25/2011 - 07:54 | 1202992 aVian
aVian's picture

correction over...that was fast

Mon, 04/25/2011 - 11:58 | 1203730 mayhem_korner
mayhem_korner's picture

CRIMEX to JP.  Over.  It didn't work, fellas...

..copy that CRIMEX, we're seeing a run on $47 as we speak.  What next?

Copy that, JP.  Should we leak the release on the 75m tonnes uncovered in Zimbabwe?  Over.

Negative, negative CRIMEX. We need to re-work that angle.  Number's too high for believability, and we've got strict orders from the canyon not to bring out the 'Z' handle.  Over

Check.  What about the confiscation angle, maybe tie it to the Russians?

Copy that.  Also a negative.  DoD's gonna go apesh*t on us if we mention anything about foreign pulls on silver.  Especially the downtrodden russkis. Anything else in the goodies basket CRIMEX?

That's a negative, JP...Hey, wait a minute!  What if we bought some physical?  I mean, just a little...

 

Mon, 04/25/2011 - 08:00 | 1202996 tallen
tallen's picture

BTFD time again. Love this time of the day.

Mon, 04/25/2011 - 08:04 | 1202998 latcho
latcho's picture

Just wait for the dollar and euro to go as steep as silver, only in the other direction. Let the trolls pick cotton. Common Ivars, post that silly link again, but do an adjusted for inflation version this time.
What the hell, let it correct. The PRESSURE is on anyway. Yes UPWARD.

Mon, 04/25/2011 - 09:55 | 1203265 Dr. Porkchop
Dr. Porkchop's picture

They keep going on about relentless surges upwards, bound to crash, yet it gets beat down on a weekly basis at about 8am. It's become so regular that people count on it to btfd.

Mon, 04/25/2011 - 08:47 | 1203091 Dangertime
Dangertime's picture

Rally bagholders!!!  Get this pig back up to $50 so I can do the final load up on Puts.

Call and buy some more silver, NOW!

Mon, 04/25/2011 - 10:52 | 1203467 Bastiat
Bastiat's picture

Puts?  Sell the contracts, you pussy!

Mon, 04/25/2011 - 08:52 | 1203098 Badabing
Badabing's picture

Asia has megabucks to invest in PM's

this is for you dickymo

http://www.zerohedge.com/article/china-proposes-cut-two-thirds-its-3-trillion-usd-holdings

 

Mon, 04/25/2011 - 09:03 | 1203127 monopoly
monopoly's picture

GM, my guess is that only trolls are shorting silver here. While I am not adding now, I am not selling 1 ounce. And only an idiot would be shorting this rising knife.

We will have pumps and dumps, (although the dumps are becoming smaller and less frequent), I have my core and trade just a little around it. No interest in this market otherwise. But not calling a top and shorting, that I bet has failed mostly.

Mon, 04/25/2011 - 09:09 | 1203133 fiftybagger
fiftybagger's picture

Wow.  I had predicted a pullback from 50 but I may have to rescind that.  Very low volume,  lotsa new shills.  Unfilled gap.  We may just run straight to 65-75 before this thing even pauses.

 

Silver For The People
http://www.youtube.com/user/BrotherJohnF?feature=mhum

Mon, 04/25/2011 - 09:12 | 1203143 Re-Discovery
Re-Discovery's picture

Good call.  I am probably wrong (don't they will) but I guess what else can they do?  COMEX 'action' is just another minor speed bump in this rise.

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