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Silver Spreads: Contango Crush Update
A Continuation from Yesterday’s Story: Silver Contango Crushed – Short Squeeze Imminent or Position Limit Ruling Fall Out?
Courtesy of FMX Connect
Silver spreads continue to sell off on Thursday. So far, any theories that weaker spreads are ultimately bullish for the physical metal have to be viewed suspiciously. We spoke with a couple of traders on the topic and our revised possibilities list is as follows:
Points
Silver spreads are being sold because..
- There is a physical short squeeze coming.
- The appearance of a short squeeze was manufactured as an exit strategy for a long to get out.
- Spreads are being messed with in light of the CFTC position limit ruling.
- Two-year silver rusts and spot silver doesn’t.
Counterpoints
- Why is the market lower?
- It’s an awful lot of money to spend to camouflage your selling. Millions,upon millions of dollars.
- This theory remains entirely possible but the kind of sophisticated funds affected by the new regulation probably wouldn’t puke that way unless they were blowing out.
- We’re no chemists, but we suspect this statement is somehow inaccurate.
For the time being, we can not discount that there is a short squeeze coming but more information is needed before we can know for certain. If a bullion dealer is selling spreads because they anticipate making delivery we think we’d probably be the last to know, that’s why we are think it is more likely than not that this a charade. Whatever the message may mean, it is certainly expensive to send.
There is one other theory worth mentioning. The most important thing to know is that history does not repeat itself but it sometimes hums a similar tune. What happened in 1997 we do not think will happen again, exactly the same way. In 97 spreads collapses and the market screamed higher, there was no misinterpretation of the signal. We think someone is being fooled or making a mistake, we just don’t know exactly how yet. There may be a sap at the table, but his identity is unclear for the time being.
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YEP.
Second thing = Foreigners can only buy silver with a minimum order of 1500$
AND!
THEY ADD TAXES!
I had a nasty customs letter when I bought some 20 balboa and Silver wolf 1 oz coins from their site.
+ 17.5% tax on receipt!
No can use, did for about a year, when I found out they were gigging me on Prems,(normal for most all) and The Morgue was their bank I emailed the President and let him have a mindfull.
Since then, I have bought nothing, and have recieved emails 3-4 times a week from them asking where I went.
I proceeded to tell them they were to high on prems, and the 4 tiered price screwing, was the last straw.
When my new dealer would sell me ONE Eagle, for the same price as 100, and be $30.00 less than A@#$, add the JPM, and thats enough.
Their good people ,honest, and great delivery.But, theres a hell of a premium for that service.
hey, we at Kitco use HSBC and we're a perfectly legitimate company.
Yep, and your Canucks, and too high for US residents, and your Prems are out of line, and have Nadler on the payroll.Nuff said.
Waiting for Harvey; let's see what he says.
+1000
I thought Gold and silver was going to go above $2000 this year. Granted it's only 20 days into the year. Do you guys think it could happen? What isgoing on (im new)?
Sale starting. Pick your discount.
Can you say: "Silver Manipulation"?
Comex only has 107 million ounces of silver against 720 million ounces of obligations. 4 people found out about that and on 7 December 2010 demanded 1 million ounces of physical silver delivery which spin tailed the Comex.
which of bitchez wants to buy gold and silver?
The never-ending, fruitless search for causality.
Superficial minds in search of superficial quantum entanglements for a superficial world.
All I can say is that anyone hanging on to every word of General Jim or any of the guests on Eric King's KWN and bought into the "JPM is going to fail, any minute, I swear!" hysteria were summarily executed and wiped out the last 3 weeks.
PigMen saw that trade coming a mile away, and they profited huge from it.
Now is the time to buy PM stocks, not then.
Nice candle on the XAU today.
hyperventilate much catfish mouth? so now you're a bullion bull? did you buy? and is bullion the security of your choosing for the next 5% move?
step up catfish. get some skin in the game above your 30%.
Not yet. Maybe 2 weeks. Maybe like Rogers said 6-7 years ...
I recommend selling all your gold and silver and going into cash. Cash is made largely of cotton, and cotton has doubled in the last six months, didn't it? Gold didn't double, so if cotton doubled and fiat is made of cotton, then you were better off in cash. You should have listened to Robot, Appalling Smell, Goldmiidlefinger, tworivers and every other buffoon in this thread.
Thank you and good night have plesant dreams counting sheeple, mmmmmeeeeeeeee
Jon,
You Swiss Bandit you....play nice with the PM Buffoons.
yerp. have to agree on that one. KWN is for bulls only. I'm sure this week Eric is gonna start every interview with "As Silver and Gold still consolidate...." - yeah. So much for "Gold will be $150 higher per our London source". Eric King should be ashamed of himeself.
You're getting it right.
Demand is higher than ever and miners will keep on appreciating.
My portfolio of miners is down a bit today but not what you'd expect if there was a real sell-off in gold and silver.
NUGT bichez
Nice GDX hammer off the 200 dma
Into everyones life a little rain must fall. We are falling on blythe and we are going to melt that fucking wicked witch of the west.
What is not force is destined to become majeur. Be more careful when you draw the lines next time.
http://www.youtube.com/watch?v=r7KuQpnfuuI
Blythe+Fed > public+nuthin'
We'll see.
people are gonna mass junk good advice?
I bought physical silver and paper silver today. I'm going to start phasing in again.
It s all bullshit, untill the spot price becomes the sprott price.
Regards
Ozzy
So silver is on sale.
It's actually pretty funny :)
When Silver was at 31$, the board was loaded with nerds screaming "I wish silver would go down on more time so I can buy some more".
Now that it goes down, they are running away like scared little babies from it and none of them takes the shot.
It kind of reminds me of that joke about a guy who asks signals from God to guide him in what to do.
http://www.ihasafunny.com/wp-content/uploads/2010/02/ihasafunny-god-sign.jpg
I am not running anywhere, bought some gold philharmonics and quite a few silver eagles...and I feel good. Getting rid of the fiat little by little.
Now carry on.
If Gold=Shit, then Silver is the Second Negative Derivative, oops Honey Hush.
REQUEST INFORMATION
I just had a conversation with my PM broker (Colorado Gold)-he said he had nearly record day today as people are buying in huge orders. Maybe we can do an informal survey and everyone report back in a reply to this message what their dealers say.
I was off, i thought yesterdays drop was the one so I bought physical yesterday just under $29. May pick up a few eagles tonight but the darn premium seems high to me
but the darn premium seems high to me
Then BUY rounds...................Silver is Silver.
Steer clear of bars,unless by a Major.
I bought my physical from a panicked co-worker. Went on kitco (for pricing) and picked up a large chunk @ spot. I almost thought it was a gift from god.
It was
they got any left?
I bought a silver 1923 peace dollar out of the till at work for face value. I don't know who in their right mind would spend a 1923 peace dollar, but lucky for me I guess.
double post somehow, sry
all my whores want cash.
They dont want silver and they dont want checks
Fucken hookers
Hookers also want heroin, coke, and alcohol.
Nice way to get investment advice.
they dont give advice ; )
Sure they do, the High class ones even give Financial advice.
3,407,000 ounce/coins Silver sold in the first 12 days of January 2011 says lindsey Williams
1,181,000 ounce/coins Silver sold in 7 days (after the first 12 days) of January 2011 – (4,588,000 minus 3,407,000 = 1,181,000)
___________________________________________________________________________________________________________________
4,588,000 ounce/coins Silver sold total on 19 January 2011 Says the U.S. Mint (Bloomberg)
Lindsey Williams on AJS January 2011 http://forum.prisonplanet.com/index.php?topic=198926.msg1182479#msg1182479
In December 2010 the US Mint sold 2221.000 ounces of silver which was an all time record. But in the first 12 days of January 2011 this increased by 50% and the US Mint sold 3407.000 ounces of silver.
Silver and Gold is the only money the elite rely on. Comex only has 107 million ounces of silver against 720 million ounces of obligations. 4 people found out about that and on 7 December 2010 demanded 1 million ounces of physical silver delivery which spin tailed the Comex.
Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says, 19 January 2011, by Pham-Duy Nguyen (Bloomberg) http://www.bloomberg.com/news/2011-01-19/sales-of-1-ounce-american-silver-coins-poised-for-record-u-s-mint-says.html
Sales of 1-ounce American Eagle silver coins are headed for a record this month, according to data from the U.S. Mint. About 4,588,000 coins have been sold in January, according to data on the Mint website. That would be the highest monthly total since sales began in 1986.
Looks like the Crimex is raising margins for metals contract, again.
CME Margin Increase effective Jan 21:
http://www.cmegroup.com/tools-information/lookups/advisories/clearing/fi...
Good find! :-)
The whole commodity game is rigged with too much paper liquidity chasing it up and shorting it down.
The bulk of paper investors are not supposed to profit from it which is why now is probably not a good time to look at ETFs.
But! There is a difference between holding the metal in your hand and knowing that THEIR ficticious price manipulation is not effecting your physical holdings. Why? Because the metal is limited and demand is greater than ever. These manipulations will blow up the Comex because people want physical when they don't trust that government dilutes money against nothing.
This is not the Seventies or Eighties or any other time in recent history where gold and silver made huge jumps and then got sold off. For all I know it was probably manipulated then as well. However, at that time there were 2 major super powers competing for world dominance, the USD was untouchable and the US as THE world economic superpower could fool anyone and call all the shots. The American people, municipalities, states etc weren't leveraged and up to their eye balls in debt backed by nothing.
Keep that in mind folks. This time is different. Take possession and convert your worthless paper dollars and other paper assets into something that stores value in the days, months, years ahead when the largest currency and debt reform in history of mankind is going to take place.
Holders of paper will have to accept haircuts of maybe up to 90% when the new currency is introduced. Only metals will hold the original value against whatever the new currency is going to be called. This is what happens when debt cannot get repaid. Our nations debt is backed by a promise. That promise is getting thinner and thinner. The lenders will eventually accept to get paid cents on that dollar to get anything back. That's a complete wipeout for anybody who is invested in paper.
And as someone pointed out here correctly, the Chinese don't trust paper their own or otherwise but especially not their own paper. China is a corrupt nation with a centrally planned economy which got lucky when the world was looking for a cheap labor pool. To China's benefit their people could deliver the labor and the officials were eager enough to cooperate. But that's about all there is to the Chinese "miracle grow" economy. The Chinese are neither smarter nor more motivated than the American or European worker. They're just not spoiled by unions and crack cocaine promising politicians. They're not spoiled by democracy and thus their votes don't have to be bought with promises and welfare. From that perspective, I don't trust them and most certainly don't trust their accounting and their currency. Who cares whether they float the currency or not.
I agree.. But in trading... Selling begets more selling... When you have people like Cramer talk about gold/silver, it is a near guaranteed time to start heading for the door.
I think a better way of describing what we are seeing now is that it would appear that the FED officials have finally started to look at some data and realize that there are so very scary inflationary concerns coming.... In my opinion, people look to much at the direct FED actions. However, the FED's real power is utilizing their new powers from the bought and paid for mega banks which can pull some levers and orchestrate whatever they choose. For now, that would appear they want some dampen some of the inflation until they feel the data starts to look better...
Plus there's this new-fangled invention called the internet that keeps throwing the spotlight on all the dark places that TPTB don't want anyone to know about!
+1
Hookers don't get much in an open forum. I like this forum! Smiles
Bought another 10 ounces today just for spite.
http://www.youtube.com/watch?v=r7KuQpnfuuI
Heph-that's what I always tell myself when I buy it at "funny" times. In my mind I am saying "i am buying just for spite, fuck it if I lose out, but I don't think I will, so ha on you, you fucking banker scum!" : )
LOL. Hey banker you've got hate mail. You're hate mail inbox is full.
Harvey's up:
http://harveyorgan.blogspot.com/
Interesting breasts formation has developed in the charts.Very boobish.. i mean bullish.
A simple theory, but one I've heard nobody talk about: what if the run up and subsequent comedown was due to Sprott taking delivery for PSLV? Rumor had it that he sucked most of Europe and N. America dry. Thus, instant demand creation for physical. Last week, the last bar was delivered. Demand abates, and the market returns to a more normal state of affairs. Last week Harvey was talking about a million and change oz leaving the Comex; same week, a million and change ounces were delivered to PSLV, iirc. Is there any reason that this *shouldn't* be entertained as a possibility?
Treasuries selling off(deflation). The market is raising rates. Commodities drop in price.
Too bad Bernanke IS the Treasury market.
You don't want a CB being a bond market. It leads tooooo...not deflation
maybe it has something to do with that Mexican billionaire dude whose name escapes me at the moment from a couple weeks ago (can you say top tick?) who was supposedly about to buy every last speck of silver known to mankind. I forget...who was it that planted that fantasy? Oh right, "unamed sources" spewing unsubstantiated rumors, eaten up by pretty much everyone who wanted to believe in magic.
carlos slim.
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/1/3_Is_...
JFK
;-)
Read Harvey Organ's commentary and you'll feel a lot better. The longs and deliverables held up good, looks like anway
http://harveyorgan.blogspot.com/
Based on Harvey's numbers, it looks like the latest price deformations are all paper-inspired.
Harvey's blog is one of the best.
Well. Whatever the reason, I couldn't miss this opportunity to add 4 kilos of cuddly animals to my silver farm. It's all about being able to afford gold and silver animals. I don't care about the technicals. Keep your mind on your riches (gold and silver animals) everyone.
We all live in a silver submarine, a silver submarine...
Real submarines go up, it's the f*$ked up ones that are bottom feeders...
This is a golden gift.
Most gold and silver bugs delighted with
big price-drops to add-on on the cheap.
don't forget we bugs count our wealth
in ounces and they are growing for
most of us.Time is money(gold)
A very interesting article and astute observation, FMX Connect. More now than ever there will be a warfare of noise to cover the signal. For this humble observer, this article is an analysis of the noise. Very interesting noise, but it is noise in this stage of class warfare waged against the 'little' people.
It is important to not get lost in the noise, keep any eye on the prize: gold/silver have been this planet's only real money for 6,000 years, and they will continue to be, especially in a world gone mad with fiat.
Poison being fiat,remedy being gold
http://www.youtube.com/watch?v=4dW-KnRlpw8
Everyone is missing the big story about the record Silver Eagle mintages. It's not about silver being taken off the market and causing potential COMEX squeezes and higher prices and it's not about investment potential. It's about the people wanting real money. It's about the people getting rid of fed notes for silver money. It's about the people converting their savings from paper to silver. It's about the people showing a vote of No Confidence or Trust for the politicians/bankers. It's about the people wanting "change (silver pun) we can truly believe in." It's about the people wanting to accept the truth and act. It's about the PEOPLE protesting with their money...and wanting to control their money. Every great society was built with silver and gold. Every society collapses with debauched money.
We hope. Here's the other possibility..JP Morgan is buying up all the silver.
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_(A_to_Z)/Stocks_J/threadview?bn=10073&tid=383812&mid=383812
Well they got 4000 orders filled. Only 26,0000 more to go. But this is like a rising rate equation. It won't get harder the further down the finish line the go. Will it?
Silver went from 8 to 32 dollars in two years leveraged balls to the wall. The royal brotherhood of squid pump and dump down to nothing. Its that simple. Rinse and repeat. The idea silver or gold will once again be used as money is a pipe dream.
Yes and you heard it first from.the top.calling troll. Silver has been so overbought it was ridiculous. Lets see how tough you silver bulls really are. I wont believe any of you are going to ride.this thing out if silver is more than 20 percent of your investable assets but we do see a lot of people tell us their brillant portfolios after the fact. I call things ahead of time and talk my book. I dont talk about my.fantasy five bagger after the fact like some of the closeted trolls do.
Not one angry reply.
Not one junk.
http://images.google.com/images?q=fail+troll
First I started buying silver eagles more as a novelty item, something to have a round and touch when working in my office, etc...now it looks like I have to add another P&L item to my spreadsheet, just under Krugers...sure is a lotta work owning them PM's...
I am very new to silver and watching the 'markets' in general and had a question.
How is it that physical silver is having record sales but the price is falling? I know that the commodity is subject to the moving of 'paper' silver but it would seem this dipping is a bit extreme. Can anyone explain the falling price of silver against the backdrop of record demand?
Thanks folks. And again, remember I'm new and learning.
Your question is valid, and also, where is the cash flowing as everything seems soft?