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Surging Oil And Deepening Inflation - Gold & Silver Rise To Record Nominal Highs At $1,459 And $39.50

Tyler Durden's picture


Submitted by GoldCore

Surging Oil and Deepening Inflation - Gold & Silver Rise to Record Nominal Highs at $1,459 and $39.50

In trading in London this morning, gold reached a new record nominal high ($1,459.07) and silver a new 31 year nominal high ($39.50) as investors bought the precious metals to hedge deepening sovereign debt risk (in the EU but also in the US with the threat of a federal budget shutdown), geopolitical risk and deepening inflation.

Brent crude reached $123.00 a barrel this morning and looks set to challenge the high seen in July 2008 of $145.49.

Anemic economic growth, extremely loose monetary policies, sovereign debt risk, geopolitical risk and surging oil and commodity prices is a recipe for stagflation which would see the precious metals replicate their performance of the 1970’s when gold rose 24 times in value (from $35 to $850) and silver by over 32 times (from $1.55 to $50).

Silver over $100/oz is not as outlandish as once thought with dealers in Hong Kong mooting that possibility.  Strong demand for silver is being seen in Asia (see news).

The yen and sterling have fallen today leading to new record nominal highs in yen and sterling gold again targeting the £900/oz mark.

Gold and silver’s record highs were barely reported in the non financial press and the majority of the investing public will not be aware of the record nominal highs. This is a continuing indication which suggests that the precious metals are far from the mania bubble phase when the investment public greedily buy precious metals believing them to be risk free guarantees of getting rich (as was believed about tech stocks and property).

Inflation has taken hold in much of the developing world and is taking hold in developed world markets now. Despite very significant price increases in vital commodities, particularly the essentials of food and energy, there remains much denial about the threat of inflation and indeed the threat of stagflation.

Energy prices have surged so far in 2011 with Brent crude up 28.6%, NYMEX crude up 16%, gasoline up 26% and heating oil up 25%. Agricultural commodities have also seen sharp rises. Corn is up 20% to a new record nominal high and cotton has surged 50%. These gains have been seen in just over 3 months.

While nearly all commodities have seen sharp gains, most remain well below inflation adjusted highs of the last 40 years and many are not far above their record nominal highs of the 1970’s (see charts below).

Rising interest rates will be bullish for gold and silver. This is especially the case as interest rates may rise in order to combat inflation and due to real concerns about all major paper currencies.

It is only towards the end of the interest rate tightening cycle when savers are rewarded with a positive real interest rate and savers are confident about their cash deposits in banks that gold and silver would ‘peak’.

Marginal increases in interest rates from unprecedented record lows by the ECB, the People’s Bank of China and the Federal Reserve will not lead to falling gold and silver prices - contrary to some misinformed opinion.


(Reuters) - - Gold firms near record, silver strikes 31-year peak

Gold firmed on Wednesday and held near a lifetime high hit in the previous session as lingering worries about inflation and tensions in the Arab World offset China's latest move to raise interest rates.

Silver hit another 31-year peak as the metal attracted interest from investors looking for a cheaper alternative to gold and also a hedge against inflation.
Spot gold added $2.13 an ounce to $1,452.63 by 0350 -- not far from a record of $1,456.85 hit on Tuesday on rallies in corn and oil prices and a downgrade in Portugal's credit rating that highlighted euro zone debt worries. "Gold is still looking to hit another record. Tensions in the Middle East and North Africa are not solved yet. Secondly, there are new uncertainties in the euro zone. These all will benefit gold," said Ronald Leung, director of Lee Cheong Gold Dealer in Hong Kong.

"The only thing is that the increase in Chinese interest rates will be a negative factor for a little while."

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings inched up to 1,212.745 tonnes by April 5 from 1,211.229 tonnes on March 31.

Spot gold may hover around $1,452 per ounce for one trading session before climbing toward $1,477, according to Wang Tao, who is a Reuters market analyst for commodities and energy technicals.

U.S. gold futures for June rose $1.5 an ounce to $1,454.0 an ounce.
China's central bank raised interest rates on Tuesday for the fourth time since October, underlining Beijing's determination to clamp down on inflation.

The increase comes before an expected rate hike by the European Central Bank on Thursday -- first since the global financial crisis, showing how inflation is rising to the top of the global policy agenda.

China's interest rates hike often triggers fears of a slowdown in the country's demand for commodities, including gold and industrial metals, but London copper futures firmed on Wednesday and ignored Beijing's latest move.

The 25 basis point rise announced by Beijing was viewed as just the latest step in a tightening cycle which has been going on for some time and was expected to continue.

Investors will still focus on the unrest in the Middle East and North Africa, which has also spurred buying in silver and pushed up oil prices.

The head of Libya's rebel army has condemned NATO for its slow chain of command in ordering air strikes to protect civilians, saying the alliance was "letting the people of Misrata die every day.

Spot silver rose to $39.41 an ounce, its highest level since early 1980, extending Tuesday's gains.

"There's buying in silver but we don't really know whether it's coming from China or anywhere else. We can say silver is cheaper to buy compared to gold," said a dealer in Hong Kong.

"Silver will go up to $40 and it could rise to $100 in the next few years."

Other dealers said India showed some interest in silver during the wedding season, when parents give jewelry, mostly gold, to their daughters.
In other markets, the yen fell as the Bank of Japan began a meeting on Wednesday that may signal its readiness to further loosen monetary policy to support the earthquake-hit economy while Asian stocks were muted after an interest rate rise in China.

(Bloomberg) -- Gold Climbs to Record for Second Day; Silver at 31-Year Peak

Gold gained to a record for a second day in London and New York as investors bought the metal on concern interest-rate increases will curb global growth and as the dollar slumped against the euro. Silver advanced to a 31- year high.

The euro rallied to a more-than 14-month high versus the greenback before the European Central Bank meets tomorrow to decide on interest rates. China raised rates yesterday for the fourth time since mid-October to restrain increasing consumer prices.

“Investors are certainly hopeful, but confidence is lagging” that the global economic recovery can remain on track, Chris Weafer, Moscow-based chief strategist at UralSib Financial Corp., said in an e-mail. Economic data yesterday was “marginally disappointing and China’s latest interest rate rise did nothing to calm nerves,” Weafer said, after U.S. service industries grew less than forecast in March.

Gold for immediate-delivery rose as much as $3.35, or 0.2 percent, to an all-time high of $1,459.07 an ounce, and was little changed at $1,455.82 an ounce by 10:09 a.m. in London. Gold for June delivery in New York rose 0.3 percent to $1,456.50 an ounce after reaching a record $1,460.20 earlier today.

The dollar declined as much as 0.6 percent against the euro before tomorrow’s meeting of the ECB, which will increase its main interest rate by 25 basis points to 1.25 percent, according to a Bloomberg survey of economists.

The dollar’s level “is definitely one of the forces behind” gains in gold, Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said today by e-mail.

Libya Conflict

Demand for precious metals strengthened over the past week as investors sought a shelter to protect their wealth against the conflict in Libya, the nuclear crisis in Japan and European sovereign debt concerns. Moody’s downgraded Portugal’s long-term government bond ratings by one level to Baa1 from A3, and said it’s considering another reduction.

“The reality of accelerating inflation in China is indeed positive for gold,” UBS analyst Edel Tully said in a report. Gold may extend gains toward $1,465.71 an ounce after breaking through the “psychological” level of $1,450, Tully wrote. Federal Reserve Chairman Ben S. Bernanke this week said inflation must be watched “extremely closely,” spurring bets that interest rates may be raised sooner than analysts expected.

Spot silver was little changed at $39.3075 an ounce after earlier today climbing to $39.5013, the highest level since February 1980. An ounce of gold bought as little as 36.86 ounces of silver in London today, the lowest level since September 1983, data compiled by Bloomberg show. Gold has jumped 28 percent in the past year, and silver more than doubled.

ETP Holdings Gain

Gold held in exchange-traded products rose 1.51 metric tons to 2,030.27 tons yesterday, data compiled by Bloomberg from 10 providers show. Holdings reached a record 2,114.6 tons in

December. Silver ETP assets were unchanged at 15,395.52 tons, data from four providers show. Palladium for immediate delivery was little changed at $788.25 an ounce, while spot platinum was 0.1 percent higher at $1,795.75 an ounce.

(Bloomberg) Gold Climbs to Record in ‘Flight to Safety’ as Silver Reaches 31-Year Peak

Gold climbed to a record for a second day as the sovereign-debt crisis in Europe deepened after Moody’s Investors Service cut Portugal’s credit rating and higher grain and oil prices worsened the inflation outlook.

Immediate-delivery bullion increased 0.2 percent to an all- time high of $1,459.07 an ounce and traded at $1,457.47 an ounce at 3:53 p.m. in Singapore. Gold for June delivery in New York rose 0.5 percent to a record $1,460.2 an ounce and traded at $1,458.2 yesterday. Cash silver climbed to $39.5013 an ounce, the highest level since 1980, before trading at $39.385.

“Investors continue to exhibit symptoms of flight to safety,” Shiyang Wang, analyst with Barclays Capital, wrote in a note to clients. Gold and silver gained as oil “forged ahead with its upward trajectory while ongoing geopolitical concerns and European sovereign-debt issues remained.”

Demand for precious metals strengthened as investors sought a shelter to protect their wealth against the conflict in Libya and the nuclear crisis in Japan. Moody’s downgraded Portugal’s long-term government bond ratings by one level to Baa1 from A3, and said it’s considering another reduction.

Federal Reserve Chairman Ben S. Bernanke this week said inflation must be watched “extremely closely,” spurring bets that interest rates may be raised sooner than analysts expected. The European Central Bank signaled it’s ready to raise borrowing costs this week. Yesterday, China raised rates for the fourth time since mid-October to restrain increasing consumer prices.

Gold-Silver Ratio

The gold-to-silver ratio continued its descent as the white metal climbed to its most expensive level versus bullion since 1983. An ounce of gold bought 36.99 ounces of silver today, compared with an average of 62 in the past 10 years.

“It still has the 33.83/31.58 area in sight,” Axel Rudolph, technical analyst with Commerzbank AG, wrote in a report yesterday. “It may take several weeks, if not months, for this to be reached.”

Gold has jumped 28 percent in the past year, and silver more than doubled. Gold remains an attractive investment even at record prices, fueled in part by the Federal Reserve’s $600 billion of Treasuries purchases through June, according to Bianco Research LLC in Chicago.

“I think the path of least resistance for gold is higher,” said James Bianco, the firm’s president, told Bloomberg Television yesterday.
Palladium for immediate delivery strengthened 0.3 percent to $790.75 an ounce, while spot platinum was up 0.3 percent at $1,799.55 an ounce.

(Bloomberg) -- Wing Hing Rises in Hong Kong on South African Gold Deal

Wing Hing International Holdings Ltd., a building contractor, rose the most in almost a year in Hong Kong trading after agreeing to pay as much as $580 million for South Africa’s Taung Gold Ltd.

Wing Hing gained 17 percent to 70 Hong Kong cents at 12:31 p.m. local time, the most since April 9 last year. The stock had been suspended since Jan. 31.

Taung has interests in two gold mining projects in South Africa, which may a total of about $2 billion to develop, Wing Hing said in a filing on April 4. The Hong Kong-based company will issue 10.9 billion shares to pay for the transaction.

The company is shifting its focus to gold mining, completing the purchase of an exploration license in China’s Hebei province in July.

(Bloomberg) -- Vietnam Gold Traders Want Cut in Export Tax, Lao Dong Reports

The Vietnam Gold Traders Association has asked the government for a cut in the gold export tariff to boost shipments of the metal, Lao Dong newspaper reported, citing the industry group.

The current 10 percent export tax for the metal should be cut to 0.5 percent or 0 percent because profit margins for the gold export business aren’t higher than one percent, Lao Dong said, citing the association.

(Bloomberg) -- Rand Gains to One-Year High to Yen on Gold, Rate Differential

The rand surged to its highest level in almost a year against the yen and gained against the dollar on speculation rising commodity prices will buoy Africa’s biggest economy, boosting investor appetite for rand assets.

South Africa’s currency gained as much as 1.5 percent to 12.7711 yen, the strongest level since May 4, and traded at 12.7129 yen at 10:34 a.m. in Johannesburg. The rand rose as much as 0.6 percent to 6.6798 per dollar, its highest since Jan. 5.

South Africa’s central bank may raise its key interest rate from 5.5 percent this year as economic growth and inflation accelerate, some economists say, widening the difference with near-zero rates in Japan and the U.S. The Bank of Japan will likely keep rates low to aid an economic recovery after the nation’s biggest earthquake on record.

“The yen remains under significant pressure as markets assess the damage to the economy,” John Cairns and Nema Ramkhelawan, currency strategists at Johannesburg-based Rand Merchant Bank, wrote in a research note. With gold at a record, “the bias is for gains” in the rand, they wrote.

Gold climbed to a record for a second day as the sovereign- debt crisis in Europe deepened after Moody’s Investors Service cut Portugal’s credit rating. Platinum rallied for a third day, and copper gained on expectations faster global economic growth will boost demand for industrial metals. The two commodities account for about a fifth of the nation’s export earnings.

Yield Spread

South Africa’s 13.5 percent bond maturing in September 2015 yields 721 basis points, or 7.21 percentage points more than Japanese debt of similar maturity. The spread has widened from 661 basis points on Nov. 11, according to data compiled by Bloomberg. The rand has earned a 6.7 percent return in the so-called carry trade against the yen in the past month, according to data compiled by Bloomberg.

South Africa’s Business Confidence Index reached a 30-month high yesterday on signs economic growth is accelerating. Finance Minister Pravin Gordhan said on April 1 the economy may grow faster this year than the government’s 3.4 percent estimate, spurred by rising demand for the country’s commodity exports.
“This buoyancy is likely to spill over to the consumer prices and reignite inflation expectations,” BNP Paribas SA analysts led by London-based Paul Mortimer-Lee wrote in a research note. “If this scenario materializes and inflation moves to the upper area of the target range, the Reserve Bank will likely initiate rate hikes, which will be positive for the rand.”

Government bonds gained. The 13.5 security due 2015 climbed 17 cents to 121.45 rand, cutting the yield 5 basis points to 7.69 percent.


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Wed, 04/06/2011 - 07:41 | 1140095 TheGreatPonzi
TheGreatPonzi's picture

I'm glad to see you mention the fact that it is only nominal yet. 

The MSM has reported "New all-time record for gold", while it is in fact "New all-time low for the US dollar"... 

Wed, 04/06/2011 - 07:47 | 1140103 tek77blu
tek77blu's picture

gold and silver will see higher and higher floors going forward here...on top of that, the miners, are becoming a sweeter fruit by the minute:

Wed, 04/06/2011 - 09:14 | 1140349 Another Texan
Another Texan's picture

agreed.  Gotta to love my buy of EXK last week.

Wed, 04/06/2011 - 07:48 | 1140105 Turd Ferguson
Turd Ferguson's picture

sell near 40

buy back at 38.20 

buy more at 36.50 if it reaches down that far

Wed, 04/06/2011 - 07:48 | 1140117 overmedicatedun...
overmedicatedundersexed's picture

Turd, your lordship...much too timid my friend..PMs are going to run much further this bounce..the sleeping masses are getting a silver hard on.

Wed, 04/06/2011 - 08:05 | 1140158 eigenvalue
eigenvalue's picture

Then how about $150 silver by the end of this year?:)

Wed, 04/06/2011 - 08:13 | 1140177 Cash_is_Trash
Cash_is_Trash's picture

Plz include utter reserve currency status destruction ; )

Wed, 04/06/2011 - 08:20 | 1140201 Hephasteus
Hephasteus's picture

You mean what happend in october 2008.

Reserve currency status is gone. It's just been dumping the whole time.

Wed, 04/06/2011 - 08:23 | 1140209 malikai
malikai's picture

By "reserve currency" one must mean Gold, Silver, Oil, and Corn.

Wed, 04/06/2011 - 09:06 | 1140323 falak pema
falak pema's picture

If silver hits 150 where will the USD be? Jesus, these are communicating vases! Not every body has silver, whereas everybody lives off the USD!!

Wed, 04/06/2011 - 08:15 | 1140193 Manthong
Manthong's picture

The gradient on the Comex silver chart changed from .20 to .50.

I wonder how long it will be before it changes to 1.00?


Wed, 04/06/2011 - 08:52 | 1140292 tarsubil
tarsubil's picture

Look at the last six years of silver prices with a logrithmic scale for price. It really looks like the price of silver was put under control twice then around August 2010 something broke.

Wed, 04/06/2011 - 07:51 | 1140122 High Plains Drifter
High Plains Drifter's picture

i beg your pardon.  i am heavily diversified , with 75 percent physical silver and 25 percent gold physical holdings, per franklin sanders and no sir, i shall not sell, not now, not ever...........ha ha ha ha

Wed, 04/06/2011 - 08:11 | 1140167 umop episdn
umop episdn's picture

Agreed! I may spend my silver, and I may barter my silver, but I will have to be starving before I sell my silver.

Wed, 04/06/2011 - 09:13 | 1140347 PlanForTheWorst...
PlanForTheWorstHopeForTheBest's picture

If you buy something you are never going to sell it's not an investment, it's a hobby.


Wed, 04/06/2011 - 09:31 | 1140411 Vendetta
Vendetta's picture

like fine art?

Wed, 04/06/2011 - 09:42 | 1140442 Long-John-Silver
Long-John-Silver's picture

I always wondered why my Silver Buffalo's are called art rounds.

Wed, 04/06/2011 - 08:12 | 1140174 yabyum
yabyum's picture

Turd, the demographic has changed at the coin guy. The buyers are more middle age as opposed to geezers (like me). The sellers are more seedy looking with less teeth. Hide your stuff well my friends.

Wed, 04/06/2011 - 08:30 | 1140228 tarsubil
tarsubil's picture

I'm one of those new guys. Why is silver rocketing up as opposed to gold's steady pace? I think it is because guys like me don't like paying near 200 bernanke bucks on 1/10th an oz of gold when we can buy a lot more physical silver. The reality of inflation is setting in with the middle class too. Any way to protect savings from inflation is being used.

Wed, 04/06/2011 - 08:18 | 1140200 tarsubil
tarsubil's picture

What about gold?

Wed, 04/06/2011 - 09:15 | 1140350 PlanForTheWorst...
PlanForTheWorstHopeForTheBest's picture

Trade in your gold for silver.  Silver is the buy of the decade...

Wed, 04/06/2011 - 09:41 | 1140432 Math Man
Math Man's picture

And the moron-athon continues...

Never mind that silver has more than doubled in a little over six months--- and the US dollar index is down less than 10% in the same time period.

Buy silver because the dollar is devauling.  It is always the same shit, different day with you bubble chasing monkeys.

You get the logic right, but the price wrong. 

You bought tech stocks because the internet was going to change the world... it did, you just overpaid.

You bought real estate in Florida because the baby boomers were going to retire there...  they are, you just overpaid.

You are buying silver because the dollar is devaluing...  it is, but you're massively overpaying.

A 100%+ run in just over six months, meanwhile the dollar index is down less than 10%. 

You never learn.  You just chase one bubble after another.  That's the funny thing about bubbles... they exist because there is always some underlying logic behind the mania that makes sense.  It's the price that gets out of whack...  Silver is a perfect example of that right now.   Oh no!  The dollar is devaluing!  We better buy silver!  Never mind that is just doubled!  Never mind that only 50% of it is used industrially!  Never mind that it only costs 5 bucks to dig it out of the ground!  None of those things matter because the dollar is devaluing! It different this time!  It's not a bubble because the dollar is devauling!

But when you stop and look at the facts, you realize the dollar index has moved down less than 10% in the same time silver has more than doubled. 

You're setting yourselves up for a epic crash here...  don't be suprised when silver is back below $20 this summer.


Wed, 04/06/2011 - 09:48 | 1140458 Long-John-Silver
Long-John-Silver's picture

Striking Silver miners have caused the price to dig it out of the ground well past $5 a ounce. It now costs $30 an ounce to dig it up. I think that has shot holes in your $20 an ounce price.

Wed, 04/06/2011 - 09:54 | 1140472 Math Man
Math Man's picture


Please go pull out some financial statements for silver producers... you'll find cash costs between $5 and $10 an ounce. 

Why do you think the curve went in to backwardation?  Because producers are selling foward their production, because production costs are low.

Six months ago, when silver was around $18, you could only lock in $13 buck/oz...  now that number is $34/oz --- 2.6x the profit of a few months ago.  They're selling forward as much silver as they possible can to lock in profits for the next few years.

Wed, 04/06/2011 - 10:02 | 1140494 tmosley
tmosley's picture

You keep talking about backwardation, and you keep proving that you don't know what it means.  It doesn't matter if miners are selling forward.  There aren't any holders that are wiling to pick up free money off the ground by setting down their silver for a while.  That can only mean that investors expect a default due to tight supply.

But hey, you can't expect a zombie troll like yourself to use even a modicum of critical thinking.

Wed, 04/06/2011 - 10:26 | 1140625 Math Man
Math Man's picture

To arb it you have to enter in to futures contract, lease silver, sell it on the market, invest the proceeds and have a return higher than the lease rate.

The one year backwardation is around  0.1-0.2%, one year treasuries yield around 0.25%, but one year lease rates are over 50 basis points/year...

The arb is negative...  no one is leaving any money 'free money' on the table.  Because there is none.  You can't turn a profit on the backwardation.

And, if there was any chance of default (as you claim), you wouldn't be able to lease silver for any price...  but the truth is the 1 month lease rate is negative.  A silver holder will actually pay you to hold the silver.   


Wed, 04/06/2011 - 10:37 | 1140715 tmosley
tmosley's picture

I see a bunch of blah blah blah, but no reasonable explanation as to why silver hasn't been in backwardation for the last 150 years save for the few short periods immediately prior to a huge run-up in price.

"It's different this time, I swear!"


Wed, 04/06/2011 - 10:45 | 1140791 Math Man
Math Man's picture

And what always happens after the run? 

I give you a hint.  It starts w/ CR and ends with ASH. 

Silver has run almost 40% since it went in to backwardation...

But the backwardation on the long end has recently dropped almost 50% - from over a buck at its peak to around 60c at yesterdays close.

The crash is coming soon.

Wed, 04/06/2011 - 11:09 | 1140931 malikai
malikai's picture

I see a crash coming, but the crash I see is in the USD. Nevertheless, people looking for wealth preservation would be folly to not notice the very low price of OOTM puts these days. For those looking to ride the waves of QE uncertainty, which is destined to strike solid once this stupid "debt ceiling" bullshit is done, buying puts now or in the near future will be buying both insurance and profit if there is a risk-off mode (even if very brief).

Just saying.

Wed, 04/06/2011 - 14:42 | 1142065 tmosley
tmosley's picture

Give us a date, or you are worthless.

Wed, 04/06/2011 - 10:10 | 1140530 Long-John-Silver
Long-John-Silver's picture

You should move to another venue. We know what you are.

Lots of "people" you interact with online are sockpuppets


Move along you paid Government Shill. Your mission here has failed.

Wed, 04/06/2011 - 10:31 | 1140666 Math Man
Math Man's picture

And the conspiracy theories continue...  I'm suprised you haven't tried to claim I was the 2nd gunner on the grassy knoll.


I'm just a normal guy concerned about the bubble fueling idiocy that spews forth from this site.

Wed, 04/06/2011 - 10:52 | 1140826 SilverBoy
SilverBoy's picture

Please tell me to bury my silver in the back yard because the boogie

man is coming. 

Wed, 04/06/2011 - 11:46 | 1141187 RockyRacoon
RockyRacoon's picture

Your concern is heartwarming.  You might want to look into your need to "save" us from ourselves.

Wed, 04/06/2011 - 10:12 | 1140554 Flakmeister
Flakmeister's picture

I don't jump into these pissing matches but:

1) Lift cost per oz is non-GAAP

2) It does not include debt service and amortization

A lot of silver companies that had lift costs at $7 were loosing money at $18 silver.... 

Wed, 04/06/2011 - 09:59 | 1140487 tmosley
tmosley's picture

Blah blah blah said the troll.  I thought $34 was "definitely" the top?

GTFO loser boy.

Wed, 04/06/2011 - 10:29 | 1140654 benb
benb's picture

I liked most of your post. Needless to say I disagree. Yes silver has risen 100% in the past six months. However, the rise is not due to mania as you suggest.  To be valid your model must consider decades long market manipulation/repression in the silver and gold market which is to a measurable degree now weakening. (Again, to be blunt -the price has been kept artificially low.) You must also include rising public awareness of the ongoing deterioration of the global financial system with weakening currencies. Western civilization is now clearly entering a turbulent period. Many more investors are entering the PM markets especially from Asia and this trend will continue. $20 silver with respect to the present U. S. dollar shall not be seen again. (IMO)


Wed, 04/06/2011 - 11:43 | 1141168 Bicycle Repairman
Bicycle Repairman's picture

Mathman, even a broken clock is right twice a day.  I think your hands have fallen off.

Wed, 04/06/2011 - 08:30 | 1140231 Abitdodgie
Abitdodgie's picture

That's if it drops , with the way things are going in the world ? However gold looks like it on course for your prediction

Wed, 04/06/2011 - 07:46 | 1140106 overmedicatedun...
overmedicatedundersexed's picture

to wynter benton, carry on. still betting with your group. hope you post when it gets toppy and time to short.

Wed, 04/06/2011 - 07:46 | 1140107 Duuude
Wed, 04/06/2011 - 08:09 | 1140166 Nate Taggart
Nate Taggart's picture


Wed, 04/06/2011 - 10:27 | 1140652 Meatier Shower
Meatier Shower's picture


Wed, 04/06/2011 - 07:48 | 1140108 Conrad Murray
Conrad Murray's picture

The Gold Core link is busted. Think it has an extra "e" in it.

Wed, 04/06/2011 - 07:49 | 1140111 Sudden Debt
Sudden Debt's picture







Wed, 04/06/2011 - 07:49 | 1140112 Popo
Popo's picture

Bernanke is clearly fucked.


Although... he still thinks he has nothing to do with this.

Wed, 04/06/2011 - 07:50 | 1140120 manipulate this
manipulate this's picture

Is Blythe simply being overwhelmed by demand here?

Wed, 04/06/2011 - 08:13 | 1140183 Ray1968
Ray1968's picture

Blythe is irrelevant now.

Wed, 04/06/2011 - 08:19 | 1140204 malikai
malikai's picture

Never count out a Primary Dealer. Remember, they get free money. More free money than any of us will ever see in our lifetimes.

Also, green shoots bitchez!

Wed, 04/06/2011 - 08:39 | 1140254 Abitdodgie
Abitdodgie's picture

Blythe will strike today with vengeance she needs money for a make-over with all the worry she has.

Wed, 04/06/2011 - 10:12 | 1140552 Long-John-Silver
Long-John-Silver's picture

OMFG I hope so. We Silver Sharks love it when Blythe chums the water with counterfeit contracts and causes a feeding frenzy.

Wed, 04/06/2011 - 07:54 | 1140125 Carl Spackler-t...
Carl Spackler-the Creator of Spackler Feather Bent's picture

More PM gains!

Time for ole Skully's catch of the day - silver mining stocks bitches!


Wed, 04/06/2011 - 07:53 | 1140126 Debtless
Debtless's picture

Anyone care to explain the increasing spread on WTI and Brent crude? What causes this? Thx.

Wed, 04/06/2011 - 08:00 | 1140141 Flakmeister
Flakmeister's picture

World demand is stronger than US demand, the US pipe line system is geared towards Cushing delivery and the spread  is difficult to arb out. Also, new Syncrude supply is coming into Cushing, most US refinerers can exploit it, depressing the relative demand for WTI....

Brent reflects the price of oil you can load on a tanker and ship anywhere...

Never short oil when the spread is rising...

Wed, 04/06/2011 - 08:07 | 1140159 Debtless
Debtless's picture

Thanks Meister.

I've been making nice on the levered etf ERX since the quake dip.

Wed, 04/06/2011 - 09:10 | 1140340 falak pema
falak pema's picture

Brent is like the dumb blond...she is much in demand and interchangeable. like a woman with warts and have to merit such a treat...

Wed, 04/06/2011 - 09:12 | 1140343 r101958
r101958's picture

Pay attention to RBOB gas prices as it relates to oil. You will see that the real world/U.S. oil price is linked much more to Brent than to the measly amounts coming out of Cushing.

Wed, 04/06/2011 - 08:27 | 1140219 Sudden Debt
Sudden Debt's picture

Europe pays more for it's oil then the US.

Brent isn't manipulated down like WTI.

The difference comes from the US taxpayers pocket.


Wed, 04/06/2011 - 07:54 | 1140127 gordengeko
gordengeko's picture

I think this has only been a short covering squeeze which zh, sprott and mk having been saying since dec.  It has just been a steady rise because if manic buying took hold from the sheep (especially if somehow they realized how short the physical market was), kiss the banking system good bye because they would not be able to cover at these prices.  Funny how mainstream media ignores this fact, well not really, the same financial institutions that own the shorts also own the media.  That being said 40's should be a breeze unto the resistence level of all time nominal highs in the 50's for silver.  imho we should not see <35-37 again especially with the backwardation at those levels.  Thoughts?

Wed, 04/06/2011 - 07:58 | 1140133 High Plains Drifter
High Plains Drifter's picture

33 degree freemason ron paul announces his presidential bid for 2012. that's funny, i thought he said he wanted kay bailut hutchinson's senate seat. oh well. it doesn't matter anyway. monday night on CNN, jesse ventura, said he would like to be ron paul's running mate. oh yeh, that is all we need. a mason and a atheist.....that will be pleasing to the

i am sorry. i am not impressed. i smell fish.......

Wed, 04/06/2011 - 08:00 | 1140144 TaxSlave
TaxSlave's picture

Oh, yeah.  Who would want to follow the rules laid down in the stupid constitution anyway?

Give us our daily mysticism, and don't threaten our reality with predictions of a currency collapse and warnings that we might not get our welfare payouts.  Silence those blasphemers!

Wed, 04/06/2011 - 08:12 | 1140181 High Plains Drifter
High Plains Drifter's picture

the constitution is just a god damn piece of paper

George Bush


you know, yes it is just a piece of paper and the founding fathers, many of them members of secret societies knew this full well. so i ask you. was it just one big lie from the beginning?  i say , yes it was. you sir, need, to quit being so sycophantic and get up off of your knees and realize the calvary is not coming to your rescue. the liberty tree needs nourishment. do you understand this?  nothing is ever going to change but only get worse and worse. do you understand this? it matters now who runs for office, it matters not. mark my words. the sooner you realize this, the better off you will be, ( i guess)....

Wed, 04/06/2011 - 08:28 | 1140232 spdrdr
spdrdr's picture

You know that this alleged Bush quote is completely bogus?

No?  Try this:


You should go back to Daily Kos - a mind like yours is wasted here at ZH......

Wed, 04/06/2011 - 08:43 | 1140269 High Plains Drifter
High Plains Drifter's picture

you had better watch those so-called "fact" websites........

Wed, 04/06/2011 - 09:11 | 1140346 falak pema
falak pema's picture

can you still shoot straight? or from the hip?

Wed, 04/06/2011 - 08:08 | 1140160 gordengeko
gordengeko's picture

Where is your proof he is a 33 degree mason?  Please provide substance to your accusations that Ron Paul and Jesse Ventura would be a horrible team.

Wed, 04/06/2011 - 08:15 | 1140192 High Plains Drifter
High Plains Drifter's picture

he is also a member of the john burch society. do you know anything about them?  one thing is for certain, when you control both sides of the argument, there is no argument , is there?  i have provided proof on here many times concerning this matter. google is your friend at least so far, more or less. use it and study at your leisure......also one more thing, ron paul is close to being if not the biggest , pork barrel spender in congress. strange thing , if someone is so interesting in our spending habits, no????

Wed, 04/06/2011 - 08:25 | 1140214 overmedicatedun...
overmedicatedundersexed's picture

"High"  pain your meds again are we?..Huff Post is calling they miss your strong support. LOL, at least you are consistant..

Wed, 04/06/2011 - 08:33 | 1140242 High Plains Drifter
High Plains Drifter's picture

a vote for jesse would be silly at best. look what he did when he was governor. he made all of these promises, and then when he got in, he reniged. so much for the libertarian point of view on this. the guy is  joker and he even told , piers morgan that his show, conspiracy theory is about entertainment. yeh right. i know jesse. its all about entertaining the sheep. this is why i don't watch his stupid show and his never ending quest for 911 truth and if the real 911 truth hit him or alex jones in the face, they would not admit it or know what to do with it, so they continue on in the never ending search for 911 truth. how many times do some of you guys and gals out here need to get screwed around before you start smelliing the coffee. it is over my friends. it is finished. there is no hope, except the Blessed Hope but nothing in the Good Book says you have to put with it. this country supposedly was founded on the revolutionary spirit. you had better hear your old uncle hpd and realize,  there is no other way, at this juncture. none, zero, nada. the system is broken and cannot be fixed. amen and amen........

Wed, 04/06/2011 - 08:27 | 1140221 gordengeko
gordengeko's picture

It takes two seconds to add substance via links to support your accusations.  What are you for anyway?  Anarchy?  You don't think that there could be "good" people that are members of these "secret" societies, that could actually offer better solutions for the advancement of society?  Don't kid yourself by labeling everyone with information from the "inside" as evil doers.

Wed, 04/06/2011 - 08:41 | 1140245 High Plains Drifter
High Plains Drifter's picture

do your own research pal.  i have talked about this many time around here. i am not your gofer boy. go find it yourself. by the way geko, what i am talking about here is my opinion, and i cannot say i have facts on this issue. i mean, i don't know the guy, i only read things and base my conclusions on the mountain of information that is available. that is all any of us can do. i base my conclusions on many things. i have made my conclusions and i stick with them. i hope, i am wrong. i really do. but as usual on such things,  i fear i am right. one thing is for certain. i like most around here am not privy to inside information. i can only do my research based upon the information that is out there in the void. this i have done. it is the least i can do, is to sound the alarm and shake the world of the paulistas and maybe they will not be as disappointed as they were last time when he up and quit not long after his $700,000 internet money bomb was completed.......

Wed, 04/06/2011 - 08:47 | 1140273 gordengeko
gordengeko's picture

Unwissenheit ist für alle sichtbar deutlich.
Godspeed my friend.

Wed, 04/06/2011 - 09:00 | 1140304 High Plains Drifter
High Plains Drifter's picture

oh so you think i am ignorant huh?  why don't you just say it in english silly man. gads. this is what happens when you piss on the ron paul parade. you get this kind of nonsense. same thing with alex jones crap. oh well. Godspeed to you also. You will need it following these birds....


just google   


high plains drifter      ron paul           zerohedge.


that should about do it........

Wed, 04/06/2011 - 09:14 | 1140352 r101958
r101958's picture

High spouted the factoid. If you want to be taken seriously then you provide the data. Otherwise, quit spouting.

Wed, 04/06/2011 - 09:04 | 1140317 High Plains Drifter
High Plains Drifter's picture

by the way , geko, did you know that lew rockwell writes all of ron pau's books for him and when he is finished , ron paul puts his name on them. i ask you. does this sound kind of disingenuous to you? it sure does to me. anyway, old hpd, must retire from the field now. must go do something called honey dos.......

Wed, 04/06/2011 - 09:05 | 1140319 High Plains Drifter
High Plains Drifter's picture

by the way , geko, did you know that lew rockwell writes all of ron pau's books for him and when he is finished , ron paul puts his name on them. i ask you. does this sound kind of disingenuous to you? it sure does to me. anyway, old hpd, must retire from the field now. must go do something called honey dos.......

Wed, 04/06/2011 - 08:11 | 1140172 GOSPLAN HERO
GOSPLAN HERO's picture

George Washington was a great freemason, a great President, a great soldier, and a great farmer.  Fiat Lux!

Wed, 04/06/2011 - 08:16 | 1140195 High Plains Drifter
High Plains Drifter's picture

don't bring george into this argument.........please. we are not talking about george here, but ron and jesse.............

Wed, 04/06/2011 - 08:32 | 1140240 Sudden Debt
Sudden Debt's picture

and a great farmer

So is Obama!! Like a farmer would say: If you want something to grow, you have to take a crap onto it or throw crap at it.

He's been doing it for 2 years now, and in the way he does it WHATEVER WILL GROW OUT OF IT WILL BE HUGE!!


Wed, 04/06/2011 - 09:36 | 1140424 Vendetta
Vendetta's picture

we know the history of atheists throughout the ages has been so evil to humanity compared to the various religions, no?

Wed, 04/06/2011 - 12:35 | 1141443 Terminus C
Terminus C's picture

the short answer is... no

Wed, 04/06/2011 - 07:59 | 1140134 TaxSlave
TaxSlave's picture

Not to worry.  We can borrow and print our way out of this, and then save the currency with a sudden, sharp interest rate hike.  It might hurt you, but it will save the world.

Wed, 04/06/2011 - 07:58 | 1140135 Silverhog
Silverhog's picture

Who would da thunk that such a miraculous economic recovery would be a great catalyst for record Gold price. It's the golden canary screeching beware of the dollar.

Wed, 04/06/2011 - 09:27 | 1140389 SheepDog-One
SheepDog-One's picture

And beware of anything priced in the dollar.

Wed, 04/06/2011 - 08:01 | 1140148 hubbywan
hubbywan's picture

In spite of the short squeeze, my question is this: how and when will they slam the price down again?

Wed, 04/06/2011 - 08:53 | 1140248 Sudden Debt
Sudden Debt's picture

If Apple would give a 50% discount on the IPAD2, moneyflows to PM's would be redirected and prices would drop.

Bummer Apple doesn't do discounts...


Wed, 04/06/2011 - 08:51 | 1140285 malikai
malikai's picture

Queue uncertainty over QE3 -> deflation fears -> takedown in risk assets across the board.

Followed by QE3 -> parabolic surge in commodities (possibly all risk assets) -> uncertainty over QE4. Rinse, repeat, bleh.

Wed, 04/06/2011 - 08:05 | 1140152 eigenvalue
eigenvalue's picture

A bit off the topic. I just bought 100kg of silver bars. But the problem is that I live alone. I feel afraid that these bars may get stolen when I'm out. How do most ZH'ers store your bars? Any suggestions?

Wed, 04/06/2011 - 08:09 | 1140170 Flakmeister
Flakmeister's picture

You can store them at my place....

Wed, 04/06/2011 - 08:20 | 1140207 reescher
reescher's picture

Alone? Get a dog, a big one. Tho, lead-based companions come in boxes of 50 (or even 250) and don't pee on the rug. You'll need a discharge mechanism for the lead versions.

Wed, 04/06/2011 - 08:39 | 1140255 tarsubil
tarsubil's picture

My first recommendation is not to give out this information. A guy was robbed of a ton of silver by a couple of guys pretending to be police officers. The criminal element know how sweet a score PMs are so don't tell anyone.

Wed, 04/06/2011 - 08:43 | 1140261 jomama
jomama's picture

you just dropped $135,000.00 today just like that on yesterday's run up? hmmm.

Wed, 04/06/2011 - 08:45 | 1140272 Global Hunter
Global Hunter's picture

Ha I came up with 140,000 but I used 40 bucks figuring he might have pain a small premium.  Straight away I was noodling that one

Wed, 04/06/2011 - 09:20 | 1140372 PlanForTheWorst...
PlanForTheWorstHopeForTheBest's picture

who buys a 100kg bar? 

Wed, 04/06/2011 - 10:01 | 1140490 Long-John-Silver
Long-John-Silver's picture

Me. I also purchased 3 1,000oz industrial bars at the auction of a bankrupt mirror factory. They cost me $5,000 each at the time.

Wed, 04/06/2011 - 08:44 | 1140263 Sudden Debt
Sudden Debt's picture

I know that feeling. At the end of this month I'm taking a trip with the family for 10 days and the thought is freaking me out about a brake in.

I have a safe at home but hell, I bet even after 3 to 4 hours they would get in.

I don't want to put it into a safe at a bank.

And "burying" it in my yard just won't happen.

I'm thinking of building a secret space somewhere in my house. Always wanted something like that :)




Wed, 04/06/2011 - 09:02 | 1140313 Gold Dog
Gold Dog's picture

Two favorite places are in the corner of your attic under the insulation, most burglers don't go looking that far and in $#@^% ^(*&#$@ which is where I used to store mine before the boat accident.



Wed, 04/06/2011 - 09:15 | 1140357 falak pema
falak pema's picture

find yourself a dumb blond...who loves to touch silver and suck up to!

Wed, 04/06/2011 - 09:38 | 1140429 Vendetta
Vendetta's picture

store it within the reactor walls.

Wed, 04/06/2011 - 09:56 | 1140482 Long-John-Silver
Long-John-Silver's picture

 Cut the drywall in a closet at the studs. Place PM in the exposed void. Replace the drywall, fill crack with spakling, sand smooth, and finish off by painting the entire closet.

Wed, 04/06/2011 - 10:34 | 1140702 Ms. Erable
Ms. Erable's picture

Tell me where you live and when you'll be out so I can detail a security team to protect your holdings.

Wed, 04/06/2011 - 08:05 | 1140157 Scoobywan
Scoobywan's picture

I kind of regret selling all my 140oz at 37 (bought at 13). I thought I would be able to buy it back.

Yah I know 140oz is chump change, but I got kids to feed, and the old lady only lets me play with the house's money (bought LFG at 8 sold at 28, I'm a low level insider that doesn't even work for them)



Wed, 04/06/2011 - 08:48 | 1140275 Sudden Debt
Sudden Debt's picture

inflation adjusted, the silver top is 640$ in the 70's.

I you ride it out with that ammount it would make you 90K.

And my bet is that it'll go much higher.

In the 70's it wasn't a global problem and there wasn't as much liquidity like there is now.




Wed, 04/06/2011 - 09:42 | 1140435 Vendetta
Vendetta's picture

in the 70's we actually still manufactured stuff and the trade deficit was under $30 billion a year, instead of the $66 billion a month today.

Wed, 04/06/2011 - 09:31 | 1140404 Infinite QE
Infinite QE's picture

A good trading method is the 1/3rd, 2/3rds model. Sell the 2/3rds into strength and then buy back on corrections. Never let go of 1/3rd. 

Wed, 04/06/2011 - 08:10 | 1140164 sudzee
Wed, 04/06/2011 - 08:54 | 1140293 Saxxon
Saxxon's picture

Thanks Sudzee, good news.  Next they need to kill Real I.D. ...

Wed, 04/06/2011 - 08:18 | 1140190 GOSPLAN HERO
GOSPLAN HERO's picture

Lucius Cincinnatus we need you now!


Wed, 04/06/2011 - 08:21 | 1140202 Debtless
Debtless's picture

I believe Justin Bieber is our Cincinnatus. Give him time, he will come to hear the calling. 

Wed, 04/06/2011 - 08:29 | 1140226 StychoKiller
StychoKiller's picture

A man should have priorities (and PRINCIPLES!)

Wed, 04/06/2011 - 08:22 | 1140210 sudzee
sudzee's picture

Gold is wiping the floor with yen, pound, euro and usd. CB's have ZERO Physical only paper. Hail the money printers.

Wed, 04/06/2011 - 08:26 | 1140217 duo
duo's picture

Adjusted for real inflation, wheat was in the mid $20s in the '70s.  We haven't seen anything yet.2

Wed, 04/06/2011 - 08:25 | 1140220 baconator3000
baconator3000's picture

i eat poop

Wed, 04/06/2011 - 08:28 | 1140229 Captain Benny
Captain Benny's picture

Both CEF and PSLV were dramatic underperformers yesterday while SLV and GLD both performed well.  Something tells me manipulation is at hand and this rally of the PMs has a _LOT_ more movement in it.

Wed, 04/06/2011 - 09:07 | 1140328 Flakmeister
Flakmeister's picture

Both recently announced secondarys.... picked up another 1000 CEF at 22.12 on friday....

Both trade at a premium to NAV, PSLV at a ridiculous one...

Wed, 04/06/2011 - 08:30 | 1140235 Kina
Kina's picture

Gold not making that much impression on AUD

Wed, 04/06/2011 - 08:49 | 1140277 tiger7905
tiger7905's picture

The reason for CEF and PSLV taking a break is they are both raising funds. I hold CEF and this has happened after ever offering they have done.

Wed, 04/06/2011 - 08:49 | 1140280 tiger7905
tiger7905's picture

Also with CEF we have these wonderful loonies worth $1.04 to the USD, why not take advantage of them. :-)

Wed, 04/06/2011 - 08:52 | 1140287 tiger7905
tiger7905's picture

WRT the article above, it would seem that Given the move in gold and silver Bernanke is finally being "called out" on his approach.

Wed, 04/06/2011 - 09:09 | 1140336 sudzee
sudzee's picture

Must be getting a bit uncomfortable being short silver since last August. Could we finally see capitulation on the short side and a rise of 10-$20 in a single day?

Wed, 04/06/2011 - 10:05 | 1140497 Long-John-Silver
Long-John-Silver's picture

We may be seeing capitulation now.

Wed, 04/06/2011 - 09:19 | 1140365 monopoly
monopoly's picture

Get a real high quality safe that can be bolted down and weighs at least 600 pounds. Do not buy a safe in Walmart, Target, etc. A good safe will cost about 900.00 discounted from about 1,400.00. Safe stores are offering good discounts. Do not try and save a few dollars when you are protecting part of your future.

Wed, 04/06/2011 - 09:21 | 1140370 falak pema
falak pema's picture

How can gold, silver, oil and euro rise together in a USD denominated world??? Is there a hidden message in there ...somewhere...?

Ask Benocide I say!

Wed, 04/06/2011 - 09:28 | 1140402 SilverBoy
SilverBoy's picture

I think Meth Man is dead from all of the ridicule.

I'd love to know who on this site has got it wrong more time than

the Meth addict.

What a tool

Wed, 04/06/2011 - 11:23 | 1141029 falak pema
falak pema's picture

Lady Blythe? what a drool!

Wed, 04/06/2011 - 13:50 | 1141846 BlackholeDivestment
BlackholeDivestment's picture

Hey, lets build an Ark out of Chairsatan's gold volcano and see if it floats on our labor.

Ouch! $izzle ...ewe, what's that smell? Is our labor in the belly of this beast? Have we thrown our labor upon Chairsatan's molten alter? It sure smells like the next generation. Wait, my feet stopped hurting but this Ark still smells like teen spirit. Check that, I feel pain again, now I've fallen and I can't get up. I think that smell is this generation.

Buy gold, yeah riiight. That will help in the short term, wait for it ....''at the expense of your life!!!''. Try again numb nuts. Maybe it's past time to end the Fed and not feed yourself to the Fed Flames? Can you be so tempted by Chairsatan's marriage ring of corruption? Do you really covet the PM enough to where you would climb Chairsatan's Chart Volcano and then leap into lava?



Wed, 04/06/2011 - 17:33 | 1142839 ivars
ivars's picture

rent crude will reach 125-130 USD in this supply disruption peak, as suggested in this rather accurate February 6rh chart. There are stll few throughs and peaks on the way to Brent 145-160 USD this year.




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