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So About That Speculative, And Undisputed, Silver Bubble...
Lately, everyone and their grandmother speaks with 100% conviction that over the past week what happened in the silver market was nothing but a speculative bubble popping. After all, 5 consecutive margin hikes would mean that uber-levered terrorist speculators must have been scrambling with the urgency of an E-trade baby checking his voicemail and getting 99 margin call messages. So certain seems to be conventional wisdom in this allegation that nobody appears to have even checked the facts. Well, we did. For that we went to the usual place that provides a definitive breakdown of speculative indications: the CFTC's Commitment of Traders report, and specifically the non-commercial specs which after netting shorts from longs would be expected to be at some parabolically unseen level ever in the history of the CFTC. Much to our surprise we found this...
Yes: according to the CFTC, the level of non-commercial net longs in silver is, in the week ending May 3, at the lowest since July 28, 2009. So while one could speculate that silver may have been in some pseudo-bubble back in October 2010, when net specs hit over 50,000 contracts, the most recent reading of 23,354, which is merely the latest in a downward sloping trend starting in February, alas throws a lot of very cold water over the whole silver bubble popping thesis.
And yes, going forward we urge readers to always check with primary sources such flamboyant claims as those uttered every single day by the CNBC peanut gallery about record this and bubble that. Oddly enough, nobody on CNBC will ever mention that the one true bubble continues to be in stocks, where the net speculative leverage on the NYSE as expressed by surging margin debt total and declining positive investor net worth, is at the second lowest ever, meaning investors are more levered into the beta rally than just one time in history: the very peak of the credit/housing bubble in 2007!
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If it's going to 20 and there will be a lot more supply, why do you want people to sell now?
You are a sad human being. A pathetic liar. Just STFU, you ain't fooling nobody.
If it's going to 20 and there will be a lot more supply, why do you want people to sell now?
So they don't lose their shirts again, which has been the American way every 3-5 years for most of recent history.
If you sell it now, you may be able to buy it back cheaper. Or hold it if your cost is lower. I don't care. I just dont' see any reason to buy it when it may be a lot lower in the near future.
You want people to cash in their insurance on a gamble that they will not need it, AND that it will be cheaper down the road.
Do you do that with your car insurance, or your house insurance? Only an idiot would.
Your obvious agenda to seperate physical silver holders from their silver, to scare newbies away from physical silver, and to encourage everyone to dive into the snake-filled pool of the paper silver market is abundantly evident, and more than sufficiently damning.
And what exactly is it insurance for? A coming werewolf invasion?
And what exactly is it insurance for? A coming werewolf invasion?
I will indulge the troll:
Holding silver (and gold, and platinum) is insurance against the continuous, ongoing depreciation of the US dollar, and against the inevitable discontinuity of a sudden, rapid US dollar depreciation or outright collapse. Although when the outcome is guaranteed, it is hardly appropriate to speak of measures taken against that outcome as "insurance".
Agree about the refining bottlenecks though
How does I flooded market without anyone being able to find silver, even in COMEX deliverable form?
Currently ten COMEX deliverable bars available for immediate purchase on the face of the planet. Where's that flood you were talking about?
Because, my friend, you are retail.
Industrial users and Instutional buyers can buy as much as they want.
You keep calling the Chevy dealer, looking for Ferarri's but can't find any, and mistakenly assume there is a shortage. But you didn't call the Ferarri dealer.
You have to go through the right channels.
No, I have called ALL of the car dealerships in town, including those who deal in after market Ferraris, and they have very fucking few.
Face it, you don't know what you are talking about.
You spoke to Hannes Tulving? He's got 1kg bars within a total inventory of 450k oz. What are you talking about? Hannes is even disounting 5 cents/oz on any purchase during this month.
"They have very fucking few..." That's just hearsay. What kind of money are you fronting when you talk to volume dealers? Not much I'd guess.
How many 1000 oz COMEX deliverable bars does he have for sale?
1kg bars aren't flowing out of SLV. If the market were being flooded as a result of the authorized dealers arbing out silver as Meth Man here claims is happening, there should be a FLOOD of COMEX deliverable bars at ALL levels. Instead, we have just a very few--slightly more than recently, but certainly not a "flood". If these guys were flooding the market, you would see dozens and dozens of COMEX deliverable bars on APMEX, like you used to back just before the 2008 crash. There was indeed a flood back then. Now? Not so much.
"Floods" mean water is everywhere. You are trying to tell me that there is a flood in the water reservoir. Shit doesn't even make any sense.
And not only that, but we have restrictions on use of water. Prices of water are going up. But you tell us there is water, water, everywhere--just not a drop to drink.
Fucking moron.
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The article also states there is 19 billion above ground ounces of silver. Not much more than the 4 to 6 billion ounces of above ground gold which puts the ratio to 4-5:1 instead of the current ratio of 40:1
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Thanks for taking this opportunity to discuss this, I feel fervently about this and I like learning about this subject.
basically... it questions the logic of holding silver over gold. It is gold biased. Questions if silver is in a shortage. Questions JPMorgan's alleged suppresion role. silver's non-monetization. banks will stop at nothing to squash the silver bugs. That's what I got out of it. It's def worth a read of two or three. BTW, I'm a huge silver bug.
I personally wouldn't hold either...(I own puts on both)
I found the mechanics of how cornering the silver market could work the interesting part.
You'd be better off just being short. You won't get a penny if the COMEX collapses.
But then, you are here to convince us that could never EVER happen, aren't you?
Because no-one has EVER defaulted on a commodity contract before, right? Certainly not in a modern commodity exchange.
It could never happen here.
Meth, was there to much volume in oil as well?
http://www.smh.com.au/business/world-business/oil-tumbles-after-cme-hike...
If you don't mind, please share your opinion for the margin hikes on oil now. Was there a volume spike in oil as well?
I don't really have much of an opinion on oil, but it feels frothy to me. I tend to believe the $80-90 fair value analysts.
Even with hard evidence like this, those blockheads won't believe anything you say to them Tmos. Sad but true.
Hard evidence. Like what?
The COT report. What do you think this post is all about?
More to the point: When do the obscene mega-banks close out their illegal naked short positions?
Oh! Forgive us. Illegal no longer exists in the dictionary of the USSA.
Guess who's buyin' ? Hint: Big and bad.........
god, its a currency already. anyone who is trading their silver for dollars now is a complete fool.
My recent purchase of physical silver will arrive by post tomorrow - WOOHOO
Ok. I barely sorta internet know this crazy red head libra girl from texas. We're yapping it up one day and she sends me a link of this guy in a bathtub doing a weird split screwing his own butt.
Now I know that no matter how horrible seeing that was. It is the perfect analogy to this situation.
Tyler
Welcome to fight club.
Narrator
It was on the tip of everyone's tongue. Tyler just gave it a name.
It won't be a bubble until it's well over $150/oz. and even then, if big inflation is with us or even only beginning to get a stranglehold, it still won't be in one.
When it reaches $150 per oz wont it be just about at its all time high adjusted for inflation? At that time will even 1% of total global assets be Silver? It seems to me that these days the term 'bubble' means anything (besides stocks) which simply goes up in price..
Silver will be in a bubble when only coinage is made from it as its price has gone so high it is too expensive for anything else but resell to other speculators.
Then it's a game to see who will be left holding the bag and the price collapses, right?
But silver is still 95% used for production of various products, not resell.
You sure it won't just be currency at that point?
"Silver will be in a bubble when only coinage is made from it as its price has gone so high it is too expensive for anything else but resell to other speculators."
WTF?
You know, sometimes the best answer to something is indeed the simplest. I'm calling the silver volatility cause with six letters:
AGQ &
ZSL
Done. As such, prepare for silver to commence upward moves again as criminal syndicate Wall Street bankers [who invented these instruments] take profit on the ZSL and cover legacy silver short positions.
AGQ and ZSL are the cause of silver volatility? I don't follow.
How about an overlay of the spot price to see if there's any correlation?
As for a bubble, I see 3 pretty well defined:
Aug '09 - Feb '10; Aug '10 - Nov '10; Feb '11 - Apr '11
What's it all mean? I dunno. BTFD?
The danger that we have right now are people who get the same information as I do and, therefore, think they'll reach the same conclusions that haven't traded as long, don't have bear claws up and down their backs like I do.Jim Cramer
A stock market crash will drag everything down with the ship. Even .999 purity silver bars. If you're worried about a stock market crash (and you should be -- the end of QE2 will bring a liquidity crunch), understand that cash will be king in that scenario.
What is there, 6-7 weeks left of QE2? You are trying to pick up nickels in front of a bulldozer by going long silver (or any other commodity) at this point.
Just do what everyone else with any sense is getting ready to do in June: start shorting the crap out of everything. I at least hope that everyone has the sense to cover their ass with SLV puts this time.
My gut is telling me you are right...at least for the short term until liquidity either dries up or something steps into the Feds buying shoes. Perhaps the banks will use (or be forced to use) all their gunpowder to buy some of the debt to keep the rate environment down. The govt will do whatever it takes to keep rates down. Too much is at stake.
http://www.economist.com/node/21515769
https://www.imf.org/external/np/seminars/eng/2011/res2/pdf/crbs.pdf
Gold and Silver may drop along with the Fraud Market soon, BUT they will be the only thing to rise from the settling dust from this massive Ponzi scheme. We'll be FREE then, and very secure and better off than most. YOU read it here first.
Ok, but you'll be able to buy more of the "get out of ponzi" tickets at the bottom using federal reserve notes.
Gold might not drop as far as the stock market, but silver will get definitely get crushed. Sell the silver and buy 4x as much at the bottom. At least swap for gold or protect yourself with options.
The question is the same as it was before... How far will silver run by the time QE2 stops... and what will the pullback be before qe3 is announced.
I think it will run back up fairly quickly and the pullback won't be as drastic as we think. I think we're seeing a real paradigm shift with silver.
Trouble is, that's the most obvious and logical call in the world, which means it almost certainly won't happen; everyone can't be short at the same time. I expect the end of QE2 will be baked in the cake before the end of QE2. If QE3 is to commence immediately thereafter, we'll see a pop before its announced as the insiders do what they do. If there's no QE3 and the Fed just reinvests maturing securities, then flatline for the summer.
yes, even .999 pm's go down in a crash... but eventually they regain their pre-crash value.
on the other hand, it's interesting to wonder what the billionaires behind the curtain are telling timmah, the bernak, and the o to do
(oh yeah, that would be 'the geniuses' at gs)
email from a friend................hello. got the check and i will ship the lunar monkey to you
tomorrow. i will see what i can do on the libertads - they are both
graded proofs, so they are a little more expensive than the business
strikes. i am getting alot of silver and gold in trades - and i am
getting more soon - i just don't know what it is till it actually
comes in. the last few .38 supers i sold in south texas was paid in
bullion!
I'm convinced that this recent coordinated smash down in Silver purpose was not primarily to bring the price down. Rather the main purpose was to hammer into the public's brain DO NOT INVEST IN SILVER. Sure the price smash was an added bonus. These bankster cocksuckers cannot have average Joe buying Silver. There just isn't that much of it out there! As Ted Butlers talks about constantly the big shorts are in real trouble. They went into defcon 5 because Silver was (still is) becomming more and more mainstream. Is there any hope the CFTC will conclude their third investigation into Silver manipulation this year?
I sometimes talk investing to mostly unaware co-workers. And after last weeks' "pop", someone said, "That's why I don't invest."
http://www.youtube.com/watch?v=236Lquwq22A&feature=related ...are people that still show up to work with (and ultimately for) fearful zero interest bitchez the real bitchez, Bitchez? ...or is everyone in the BTFD Cup and the fearful zero interest bitchez, still working Chairsatan's belly, really just the same dead beast feeding on it's self, Bitchez? http://www.youtube.com/watch?v=uoDpLHCr7e0&feature=related
Aren't these margin hikes done to adjust to the change in the price of the underlying commodity? They really should just fix the margins at a specified percentage of the underlying commodity price, but I guess the way they do it allows them to time the hikes to get the greatest possible impact and either encourage or discourage buying, depending on their agenda. But the the percentage over time stays with a range of a few percentage points. When the prices go down a large amount, they lower the margins. When the price goes up a lot, you gotta expect that a large margin increase is coming, right?
Finally, someone gets it. There's a derivative to this as well - if the $100 thing has $5 margin and the $500 thing has $25 margin that's OK. If the $100 thing moves 1-2% a day (silver's annualized volatility translates to about that for most of the last 5 years), that means your margin covers a 2 standard deviation daily move. If the $500 thing suddenly starts moving 3% a day, you now need a greater percentage of the contract value to cover a 2 standard deviation move. When the CFTC sees more people trading more value in more commodities and they become more highly correlated, the likelihood of them stiffing the exchange when push comes to shove goes higher, therefore as commodity price intracorrelation goes higher, that would normally cause some raised eyebrows, and if margin changes were automated, then it would cause a rise in the percentage-of-contract margin you had to put down.
Given the comments here about margin changes, I assume the above would be seen as too conservative. Interestingly, the same people seem to have complained about investment banks' lack of risk management (where, in the very basic sense, total risk taken is limited by the amounts which would require the above constraints to be observed, when measured against more significant stresses (i.e., what happens to your portfolio if every long position (and short position) in a given sector drops by 50% tomorrow, or what happens if intracorrelation between sectors goes to 90%, or what happens if your risk-taking unit's funding cost rises to LIBOR+400, or what happens if bid-ask spreads widen by 1000%?).
I wonder whether people will consider it a conspiracy to cause excessive and irrational hope in anti-monetarists' heads when margins are lowered if prices and volatility falls?
"I guess the way they do it allows them to time the hikes to get the greatest possible impact and either encourage or discourage buying"
absolutely, massive margin hike manipulation following dirty tricks to get downward price movement creating a feedback loop
"Aren't these margin hikes done to adjust to the change in the price of the underlying commodity?"
and then ask yourself why silver & oil have been targeted and not overpriced equities
-some investment vehicles are more favored then others
yes, we all know margin hikes have to follow increased price, it's math
what you are not allowing yourself to acknowledge is clear manipulation by PRICE FIXING mechanisms
it's been done before & there is no secret as to why
if margin hikes are innocent why did they not happen in tandem as silver moved up, but instead all at once within a week as other shots were being fired against the spot price?
Be honest.
'Overpriced' is not relevant. 'Equities' is. Equity initial margin is already at 50% of investment amount, many multiples of the margin on commodities futures. It has been so for years. Even from the peak of the S&P500 to the 2008 trough, one would not have lost one's initial margin by buying non-levered index ETFs on margin. In silver, however, one can lose one's initial margin in just a couple of days of normal volatility.
Anyone who thinks that a combination of jawboning and raising silver margins to a whopping 8-10% of contract value is going to crush the supply/demand fundamentals of a commodity asset should read a bit more history.
If it really wants to go up, it will.
I am not denying that there was not a desire on the part of Fed and other central bank authorities to dampen speculation. I could even imagine there was some collusion to do so. But the fact that margin rises come after significant price jumps and then significant volatility jumps does not prove squat. What will 'prove' it to me is establishment of price caps, per capital holding limits, or confiscation.
The real bubble was in the SLV ETF.
It accumulated almost 20% of its holdings during the last parabolic move up that started last fall.
http://www.kitco.com/reports/KitcoNews20110428AS_silver_etf.html
“Without the advent of the ETFs…there would not be nearly the amount of interest in silver as an investment,” said David Morgan, independent precious-metals analyst with Silver-Investor.com. “So I would say the SLV was instrumental in getting a large amount of new silver investors into the silver market.”
Previously, he said, money managers in equity markets were precluded from investing directly in commodities. However, the ETFs cleared the way for these money managers to buy the commodity by trading a stock-like instrument, he explained.
“That opened up a huge market that had never existed before,” Morgan said. “So you had all of this pent-up demand of people who wanted to be in the silver market but were basically prohibited because all they could trade were equities. Now, they can trade an equity representing silver.”
The combination of the ETFs and similar holdings has left “the silver market as tight as I’ve ever seen it in my life,” said the longtime analyst.
Now that SLV is selling, expect lower prices. And PS, Gold is next.
Can I get a time frame for this prognostication? I'm assuming you mean 20+ years
Pretty clear Morgan is completely full of shit on SLV. An "equity representing silver". Bullshit. What it did was divert money from legitimate silver miners and into the crooked banksters pockets.
Silver is tight? Yeah no kidding Dave. SLV doesn't have the silver they claim and the COMEX is burning up. I'm adding Morgan to my Nadler, Gartman and Christian list of PM clowns.
Sorry Moron, people are selling their paper SLV FOR THE REAL THING! IT GOES B-L-I-N-G IN THE DARK!!!!! Jeeeeessshhh. I can't believe I've wasted a couple seconds answering this shit..............
Still can't tell the difference between a correction and a collapse? Take yourself down a notch before you lose yourself in your own hubris.
I agree; the common and middling would by varmint putang iffin they think'd there be profit and the elite would trade derivatives on it.
Meth, was there a real bubble in oil as well? Or is it the old saying, pick your car and pick your lane?
http://www.moneycontrol.com/news/commodities/what-triggered-oils-biggest...
The latest news from the Pentagon:
Evidence found in the compound/mansion of Osama bin Laden in Pakistan proves that the "terrorist"— who died in late 2001 but resurrected so that he could be hunted down for ten years at taxpayers' expense, then quickly dumped in the ocean withot a pic— had been speculating in oil and other commodities. Other DNA, and evidence found on his laptop (OS CIA/MI6/Mossad 2.5) proved that he had been speculating for years and driving the price of oil and food in the USA through the roof. Software found in his laptop proved he had been rigging the price of milk, coffee, orange juice, meat, and eggs. The software had been imported from the US, bypassing export regulations. After exhaustive analysis the Pentagon has discovered that the software was written by Goldman Sachs and is now being used by Al Qaeda to make the prices go up in the USA.
PS. the dialysis machine has not been found yet, but we're sure it's hidden somewhere in the compound/mansion.
You forgot to mention that Bin Laden's last wish was to be burried with his laptop!
So war of terrorism needs new legs. Perhaps another terrorist attack with teflon coated passports identifying pakistani evil doers as the culprits.
But Obama speech will be far more eloquent than the boring ... Either you with us or against us. And Obama will reiterate, this is not a war against islam or their refusal of usery, this is a war against evil.
And the christian US sheeple will continue laugh and parade as more of their tax financed bullets kill masses of innocent children for peace.
what's even more amazing is OBL is dead now, and yet STILL able to terrorise the sh1t out of congress.
http://www.cbsnews.com/stories/2011/05/08/politics/main20060939.shtml
no-train list. can't wait until they have a 'no-drive' list, then a 'no-cycle' list, and a 'no-walk' list.
Of course this will be perfectly legal since Obamacare has given Congress the authority to mandate what you MUST do, it re-inforces the powers of Congress, via the commerce clause, to STOP you from doing something else.
Remember, if you're driving in this state, it means some other taxi driver from another state can't transport you and thus you are subject to the interstate commerce and 'general welfare' clauses.
Can't wait until the next terrorist leader goes ...'boo' on Halloween. Congress will declare martial law.
So if it wasn't speculation driving up silver by $3 a day then someones been tampering with the comex computers. But their evil lacks imagination, their latest easter break scam was a replay of their easter scam in 2006. If its an identical play, silver will rise all this week with another margin increase announced friday. Then they will collapse the price of silver.
Hop aboard their evil roller coaster but make sure you get off before it crashes.
Turd? Oh Turd? ..turd? (I gotta say, Turd is the man)
Tyler I hope you post Ted Butler's recent missive calling out the CFTC to analyze this and make comment.
silver to be rich mans gold.
and people only look at charts; who knows to look up salient shit like this... they see a cliff, they assume the bubble popped.
cme knows how dumberer the cnbc viewers can be.
I hit Apmex and heated up the Visa last Thursday eve purely out of spite. C'mon my brethren, let's get rid of of this born-into-entitlement, autocratic puke-class
I thought UBL or OBL is dead time to go out and buy netflix ....
Only a bubble when the TPTB are threatened by it's popularity and evolves out of their control or put another way when peasants start becoming more independent from the slave system.
(Harper is not completely dissimilar to Fox, in Mexico, and Canada’s housing bubble, more leveraged than the US is bursting. Yes. At least they are polite about it.
I went up there to install a bunch of computer-controlled kilns, at heavy debt incurrence to the owners, replacing the well-seasoned barns, which should have been a clue to the tobacco farmers, right before the government put them all out of business.)
OK, so, if the price of silver is some number, pick one ($35), which includes both the physical silver and the false promises to deliver physical silver, which are being employed as the prybar for leverage in both directions, what is the value of physical silver alone, what does that tell you about when the prybar is going to be applied, and what does that tell you about catching JPM ahead of the flip-flop, each and every time?
Silver is just a precursor. Controlling prices always ends up badly. The sovereigns are failing because the empire legacy families running their primary industries refuse to change, as should be expected, as the lies pop off the stack of History.
Like it or not, this country is being run by a bunch of mama’s boys, and its the prototype for the global IC chip, hence the crash. Like it or not, bioliogy requires the doe to follow the buck, net, on average. The bucks got out of the valley a long time ago, expecting the flood.
DATE ..........SILVER ...........GOLD
Jan 1919 ............12 ................ 170
Nov 30, 1923 ...543.75Bn.......... 87Tn
Gold outperforms silver. However back in 1919 people may have been able to put aside a few marks to buy silver from time to time and less so gold. The silver holders would still have done quite ok during the Weimer hyperinflation and certainly better than not having it.
However with respect the gold silver ratio during these times which was always about 16:1 the ratio accelerated in October 1923 to 160:1 due to political events and the need for people to become mobile and start fleeing - then value densisty of gold became imporant as it was easier to carry around and conceal. Fear is an extremely good motivator and focuses the mind quite well. You wont mind sacrificing some dollars in order to swap silver for gold at ever accelerating prices when you think you got bug out at a moments notice.
Otherwise the ratios would have likely staid within shouting distance of each other. So unless people think they are going to have start fleeing their state/country during any HI in the USA silver would be just as a good as gold at the historic ratios, though gold is always king.
This is why I am perplexed with someone saying silver holders will be crying once the SHTF or wtte. They are either being ignorant or deliberately dishonest to support a gold only. preferance.
So what is the difference between margin requirements and QE2.
NOT ONE #UCKIN DIFFERENCE... and if you don't believe me... look at what happened today in Silver.
Instead of using margin to goose commodities, major players are now simply going to use more free QE2 money. Get ready for Bubble 2.0 ... until the end of June that is. THEN watch what a commodity bubble bursting looks like.
YOU'VE AIN'T SEEN NOTHING YET.
gee, what happened to the tarp money?
"Yes: according to the CFTC, the level of non-speculative net longs in silver is, in the week ending May 3, at the lowest since July 28, 2009."
...didn't you mean to say "speculative net longs"?
Very good article
If I had millions I would be long silver contracts. I only have hundreds of thousands so have to physically I hold it cause I can't pay a bitch to do if for me. Not a bad gig really.
The should just make margin a stright percentage of the price.
sorry, but i'd have to take a bit of an exception to this (i can't believe this: i've been a fan of ZH for a long time and only last week signed up for an acct to post and now today my first 2 posts are contradictions to the OP)
Having studied the CoT reports for many years, the first thing i'd like to point out is that the classification of "commercial" and "non-commercial" is murky at best.
But to the point of the OP regarding an analysis of the CoT to determine the relative amount of speculation within a given futures contract and the effectiveness of "attacking" such speculation with higher margins - i would point out the following as something that may be more illuminating as far as the amount of speculation:
(using some quick data i took from glancing at a few charts), over the recent weeks the DAILY VOLUME compared to the OPEN INTEREST of
the 30yr bond contract is about 47% -- avg vol has been running around 300k and the OI is around 630k.
for the e-mini s&p, the ratio is 60% and corn is 26% just to give a random sampling.
in SILVER the ratio is 133% !!!
That Correct: the recent volume (in the front month contract) has been around 100k with OI around 75k
So, it's clear that there are A LOT more MO'MO DAY TRADERS & HIGH FREQ ALGO TYPES playing around in Silver lately. This is pretty common in contracts where you see a lot of wild price action. Increasing the margin on these accounts should reduce their activity and, IMHO, reduce the volatility overall.
As I mentioned in my other post this evening, while I agree w/ the long-term premise that the U.S. is on the wrong path from a dollar perspective (and most everything else), I believe the Silver market has gotten a bit carried away and reducing the amount of intra-day hot potato type action that just pushes prices higher (most of the time) and then allows price to crater as everyone rushes for the exits is probably not a bad thing.
FYI. Apmex is a rip off if your making regular weekly or monthly purchases. Try bulliondirect.com or gainesvillecoins.com. Their prices are much better across the board...
Gainesville Coins is a shit hole! they are not direct to the mint, you will pay more by using anyone who is not driect to the mint.
http://www.usmint.gov/mint_programs/american_eagles/?action=lookup
at moment, 1 oz krug $1553 at BD, $1559 at Apmex
1 oz silver rounds (Mercury) $38.77 BD, $39.76 for Apmex's own....
yeah, guess that ads up when you're buying a few dozen ounces....
these markets and categories are so opaque, jeeez! i think the net longs here are the large specs, tyler. i've been looking at the report, and the small specs are abt 19K net long.
all the futures categories and the fut + options categories declined (many precipitously as in in tyler's graph) except the large specs, which increased shorts in both futures & futures + options.
COT Gold, Silver and US Dollar Index Report - May 6, 2011
so, the margin upskies gave the crimex the contract downskies, at least as of 5.3.11, and more margin^^^ came after that, too, as i recall. more margin = less leverage = less contracts = less 'speculation'? if this were a science class, we would all be struggling a bit, i think.
no, most zHeadz didn't think this was a speculative bubble popping, from where i sit. but the mainstream & online press have both pushed the idea, to "explain" the price movements. this shit drives me up the freaking wall! like talking heads explaining the DJI went up 30 points, "because...,(_____),..."
i agree with tyler: what tf kind of criteria does the crimex use to decide margin increase/decrease? are they truthful abt whom they are trying to protect? wanna buy a bridge?
i'm also wondering about the options: long a call = long a contract? long a put = short a contact? short a call = short a contract? short a put = long a contract? OR: if, say the large specs are long futures + options, does that mean that they are long puts and calls. what the hell is going on, here?
if you look at the data in the COTS link you will get fuking headache, but check out the jump in the Large Specs Spreading when the options are added, ok?
TheGoodDoctor mentions Ted Butler's rant: First Fear, Then Anger - SilverSeek.com
if you want to see some xlnt silver charts (i'm not pushing wave theory) and what a totally overbought silver market looks like: Watching Silver Correct - SilverSeek.com
the 3rd (last) silver chart, shows a magenta line which = (?) the resistance silver has pushed against 2-3 X, today.
peace.
I guess the fact that the Surplus of Gold and Silver.. is everywhere and that it is a refining issue.. getting the commercial products into bars for Comex.. or anyone else who is not 3 weeks or more behind!
where is this surplus? who has it? where are they? are they taking cash or wires? can I get a number to the surplus people? for bulk purchase(s)..
Maybe we can get a fight club surplus purchase discount?
Who or where is the Surplus Guys / Gals? anyone know? Comex doesnt know? I dont know? no one I know.. knows? so whats the real deal?
where is the surplus.. millions or hundreds of millions of oz's?
I hope that the surplus is not the gold dust guys in Africa who send me shit? becuase if the gold dust is the 100's of millions of oz's that these guys are talking about.. well be prepared to not be able to turn that surplus for a profit.
Dorian bars and silver shot
The dorian bars. Semi finished bars of gold and silver to be sent to the refinery. Keep in mind most retail fabrication is an afterthought, a minor proportion of total silver supply.
Another place is silver shot, small, round buckshot type pieces of silver in its most easily melted form, usually from recycled silver. This is the form bought by jewelry fabricators.
This is where to gauge pre fabrication demand. If anyone knows a silver shot distributor we would know for sure if the supply of silver is tight or not.
Actually, they are called "dore" (pronounced: dor-AYE) bars, not "dorian".
Moth man, did you know that the cost of production of the $100 note is only $.03? Time to short USD.
38 $
bytches
About the supply and demand thingie..... here's some probably utterly naive take on it:
As i said elsewhere: Buying, Conservation, Selling....
Scenario: You want to hedge against a financial meltdown
In this case, constant conservation wouldn't even be needed, because there is no need to be able to sell it anytime. Rather, in such a setup, the only prices that matter, are your "entrypoint", and the price during the supposed crisis.
The entrypoint stuff is rather easy BTFD, or even better... you've been in this for years already.
Now, as for the sell-price during the supposed catastrophe, what will prices of gold and silver probably be, RELATIVE to other goods which may be used for value storage? Will stocks matter? Well, some will, but who knows which ones? What else.... fiat? ROFL, the only way THAT may work, is a basket of dozens of currencies, by assuming that they cannot all crash at the same time... but you still may lose most of your wealth in such a case, plus you'd have to exchange it back to local currency in case of a crisis. What else.... commodities?.... definatelly a good idea.... but where do you store them all, and what about spoilage? What... you mean you just buy paper-commodities? Riiiiiight.... that sounds like a really good long-term crisis insurance....
So, besides of personal preparations (food, weapon, etc), this really doesn't leave that much choice. The only candidates left are commodities that do not rot... and obviously you want them to be rather "compact".... and you want to when SHTF be able to EASILY exchange them.... so, it must be something that would in such a case easily find a buyer. Well, metals are always needed and useful, and gold/silver even just psychologically is associated with wealth.
Soooo, the only question left in that case, is WHICH metals? And here, i finally get to my main argument. As others mentioned, most metals are not mined individually. As far as i know, the ratios between metals, especially gold and silver, have remained rather constant over long timespans.... it doesn't fucking matter how much right now is in the industry, how much right now is in jewelry and stuff, how much right now is mined, how much soon will be mined..... the ratios will not change, right? If so, what are you argueing about? Your next buy opportunity? Shortterm investment? Longterm investment? Financial-Crisis insurance?
Ed Steers thinks the COT data might be a bit 'retarded'......;>)
"The eagerly awaited Commitment of Traders Report [for positions held at the close of trading on Tuesday, May 3rd] was a surprise...at least in silver. Both Ted and I were expecting a huge drop in open interest...because of the 2-day $7.50 waterfall decline in the silver price that occurred on Monday and Tuesday of this past week.
What we got in this report was no change at all in the Commercial net short position. Actually it did improve by a whole 74 contracts...but in the grand scheme of things, that's not even a rounding error.
Ted and I agree that the bullion banks did not report all of Monday and Tuesday's action in a 'timely manner'...as I am wont to say from time to time. In other words, they fixed this report by withholding data so that curious eyes couldn't see what they were doing.
One thing that did change, which I never talk about in this column, is the status of the Non-Commercial category. This is where the brain-dead technical funds trade...the large traders that hold over 150 silver contracts either long or short. Their net long position is now down to a tiny 23,354 contracts.
The lowest number I've ever seen in that category is around 13,000 contracts held net long...and that was many many years ago. I'm only guessing, but after Friday's trading action, I'd say we're either back to that number...or below it. That means that there is virtually no tech fund long blood left in this stone to be squeezed out...and I would also guess that the tech funds have gone massively short as well. That's the principle reason why I think that the bottom is in for the silver price.
It was a different story in gold...as the bullion banks reduced their net short position by 8,892 contracts...which is 889,200 ounces of gold.
The Commercial net short position in gold is now down to 24.0 million ounces. The '4 or less' bullion banks are short 15.5 million ounces of that...and the '8 or less' bullion banks [which includes the '4 or less' bullion banks] are short 22.9 million ounces.
Without doubt, the bullion banks' short position in both metals has declined dramatically since the Tuesday cut-off and, along with the data they withheld from this last COT report, next Friday's report should be a sight to see...unless we get a massive rally on Monday and Tuesday of this coming week that negates all that. Time will tell."
Lets all drop this baloney.
Your false arguements failed bitterly before,and they will fail again.
In a few years,silver will hit $100 minimum.And I wont just bet the ranch on it.
So far we bulls have been right.And silver/gold do have intrinsic value beyond their current price regardless,even if the economy will be fine or super,the demand for the metals wont go (certainly not for silver) due to the very reason why they dig the "stuff" up to begin with,high demand for electronics and medical purposes,and the other myriad of industrial applications.
Paper does not have intrinsic value to hedge for inflation or use as an investment if the economy does better and people go on buying iphones.