What Is Wrong With This Chart?

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Thu, 02/17/2011 - 19:43 | 972258 Richard Head
Richard Head's picture

Backwardation, bitches!

Thu, 02/17/2011 - 19:47 | 972266 nope-1004
nope-1004's picture

1) Less supply

2) Lesser supply

3) Lessest supply.


Thu, 02/17/2011 - 20:36 | 972461 Careless Whisper
Careless Whisper's picture

4) and NO supply for you because the shorts need to cover.

when i go on youtube i go deep. i found this dewd who is in canada but is from the soviet union. he knows about silver, inflation, and government lies about the economy. i think he's got some interesting things to say. what do you think?



reminds me of soviet union in 1990s, where all fundamentals were for the collapse, but you couldn't actually see it because the mainstream media would convince you everything was fine -- and people hope, and wait, and do nothing...

Thu, 02/17/2011 - 21:38 | 972714 batting500
batting500's picture

Its called "Normalcy Bias"...not seeing problems ahead despite lots of strong clues.


Good Luck...

Fri, 02/18/2011 - 02:13 | 973281 slewie the pi-rat
slewie the pi-rat's picture
What Is Wrong With This Chart?

A:  Nothing!


Q #2:  Spot the 3 differences...

Tyler, this is a pretty "tricky" question!!!

the bottom line (orange) shows the contracts in contango.

the middle line (green) shows the early contracts sill in mind contango and the far contracts entering backwardization.

the top line (white) shows the whole situ in backwardiZation, TODAY, less than a week (!) after the green line.  some clowns think this points to a silver shortage, but it could also be the "paint", where da boyz n banksta'z are BUYING the contacts in backwardization, letting the near contract long guys and the cash buyers drive the price moonward, while they, the far contact long guys will force the "shorts" into their worst nightmare, ever (!), when they demand delivery, the people who sold them the contractZ can just delare a major farce, right?

i'm really enjoying watching this while all the elmer fuddZ are on the first tee w/ their "advisors", getting ready to send their balls "underwater" in this "can't fail" scenario, just like they did with their "REAL estate".

slewie to graceland:  isn't this fabulous?  NOW elmer knows how to trade! of course you have been telling EVERYONE for years now, that it is NOT what your silver stash is "worth" in green stamps, but how many OUNCEZ of physical you POSESS...zzz.  could there BE a funnier sit-com than trading against the sh^t-conZ? 

i think i might have somewhere around 5 million people following my ideas, right now.  here are my archives, the public record of what i have said, as well as you, too.


when you get to the bottom of p. 2, hit the "wanna see more" link, ok.

do your homework;  decide what is best for you.

here's what i like:  physical gold & silver US Mint productZ.


and peace.

any questions?

oh, i almost forgot tyler's tricky question: what are the 3 differnces.

there are three LINES, but there are only TWO differnces.

nice, Tyler.  amazing, really!!!

more peace.

Fri, 02/18/2011 - 08:49 | 973568 johnQpublic
johnQpublic's picture


he asked whats wrong with the chart

and the answer is.....

when you click on the "explain this chart" help button, it does not work

prize for me!

Thu, 02/17/2011 - 23:26 | 973008 A Nanny Moose
A Nanny Moose's picture

Nice vid.

"and now back to Moose and Squirrel"

Fri, 02/18/2011 - 04:13 | 973402 chumbawamba
chumbawamba's picture

All good, solid advice.

As an aside, I'm sure he realizes that as a Canadian he can't vote for Ron Paul, but it is cool that he's so down with him.  Something about a guy with a heavy Russian accent singing the accolades of Ron Paul warms my cockles.

I like the wheat/potato/shovel/silver lesson.  Very succinct.  Practical.  Realistic.

Two Thumbs Up.

I am Chumbawamba.

Fri, 02/18/2011 - 09:19 | 973623 jus_lite_reading
jus_lite_reading's picture

Thank you for this video from another very fundamental perspective. It helps to see other people using their brain.

I also loved that quote about the Soviet Union collapse because almost 2 years ago, a former colleague said 'the US is headed toward the same fate as the USSR in the '90s and TPTB know it; the start of the end has arrived.'


Thu, 02/17/2011 - 23:03 | 972967 Problem Is
Problem Is's picture

"Lessest supply."

Crissakes Timmay...
It's a good thing your daddy employed Obummer's mommy at the Ford Foundation...

Thu, 02/17/2011 - 23:24 | 973002 Atlas Shrugging
Atlas Shrugging's picture

Would it be worth it to trade some gold for 2 monster boxes of silver Eagles? 

Fri, 02/18/2011 - 04:26 | 973409 chumbawamba
chumbawamba's picture

It depends.  What is "some" gold?  Ten ounces?  Fuck yeah.  Thirty ounces?  Fuck no.

Eventually, you will want to get out of silver and into gold (if you are shooting for long-term wealth preservation) or some other asset.  Silver will go through a bull cycle and at some point it's value relative to gold will be at a much lower ratio than it is currently, but it will fall back (blow-off top).  Gold is where you'll want to be for long-term wealth.

Everyone will be trying to time their move from silver to gold.  Everyone will be watching for the blow-off top.  It may not come for years, decades even.  But the question is, will there be gold available to move into when the time comes?

Hold onto your gold dearly, and only trade it if you know you have a sure thing in the alternative.  Because with gold, you already have a sure thing.  Trading it away is risk taking.  Just as long as you know.

Of course, I speak of physical gold.  Fuck you paper trading dipshits.

I leave you with some silver porn.  Ironically, another Russian(?):


I am Chumbawamba.

Thu, 02/17/2011 - 19:46 | 972269 Forgiven
Forgiven's picture

I don't know for sure, but it looks scary and I'm afraid.   I'm going to have to stick my head back into the sand.


Thu, 02/17/2011 - 20:22 | 972425 I think I need ...
I think I need to buy a gun's picture

I'm scared to of a revaluation or new monetary system this weekend

Thu, 02/17/2011 - 19:46 | 972271 H. Perowne
H. Perowne's picture

Zero contango. Don't cry, Blythe.

Thu, 02/17/2011 - 19:47 | 972274 Hephasteus
Hephasteus's picture

I don't get it. 2 say 30 dollars in july. One says the other 2 is dragging it down to 31.

Let me guess. one of those 2 is blythe.

Now we need to know what color is for what silver market.

Thu, 02/17/2011 - 20:12 | 972387 bruinjoe93
bruinjoe93's picture

The bottom graph are prices as of 1/18/2011 for silver futures all the way to 2015.  It is in contango.


The middle graph has a slight backwardation.


The top graph displays a widening backwardation problem.


The greater the backwardation the more severe the silver shortage.


Thu, 02/17/2011 - 20:18 | 972409 UGrev
UGrev's picture

Thanks for explaining that without sounding condescending to us newbs :)

Thu, 02/17/2011 - 20:23 | 972428 Hephasteus
Hephasteus's picture

Thank you joe figured it out shortly after posting that.

Thu, 02/17/2011 - 21:32 | 972689 william the bastard
william the bastard's picture

Oh come on now ya peeked. Ya did. Ya did.

Thu, 02/17/2011 - 19:48 | 972278 watchingdogma
watchingdogma's picture

Spot now 31.80?  So .80 backward to most forward month versus $1.00+ the other way in mid January?  I'm not well versed in all of the nuances of this situation - anyone care to give a lesson?

Thu, 02/17/2011 - 22:35 | 972894 chubbar
chubbar's picture

Using your numbers, if I had 100,000 ounces of silver sitting at the Comex I could sell it today for $31.80 which would net me $3,180,000 and then I could simultaneously buy a contract to purchase 100,000 ounces for $31.00 (eventually costing me $3,100,000) pocketing the difference ($80,000) and saving me storage fees for the next 4 years. This arbitrage tends to pull more silver out of storage the steeper it gets. The fact that it is steepening is indicative of a shortage because the players are not wanting to part with their silver for fear of non-delivery or because the silver is already spoken for, as I understand it.


Thu, 02/17/2011 - 23:36 | 973023 centerline
centerline's picture

Thanks for the perspective.  Makes sense.  Likewise, the shift from contango to backwardation occured pretty rapidly here.

Fri, 02/18/2011 - 03:28 | 973368 akak
akak's picture

Is "contango" the dance that Bernie Madoff and Blythe Masters are going to dance together in prison?

Fri, 02/18/2011 - 15:23 | 975226 BigJim
BigJim's picture


Thu, 02/17/2011 - 20:25 | 972282 Hughe Crapper
Hughe Crapper's picture

Contango, warehouse for free, backwardation.

#delivery #supplyconstraint #runningoutofstock ;)

Thu, 02/17/2011 - 19:49 | 972283 Glasgow Gary
Glasgow Gary's picture

Wow, it only took 4 weeks to take the whole curve from contango (in orange) to backwardation (in white). But what's interesting is that along the way, the farther month held at $30.00 for two weeks, as the curve was going through its structural change. That probably is indicative of something. Will have to give it some thought. It may, however, speak to the powerful backwardation that was about to unfold.

Now, of course, the back month has risen. But, only a dollar. People: if you are a theorist of this things like Fekete et al, the failure of the final month to move much should make you afraid. Very afraid.

Unless of course your long *physical* silver. :-)

And yes, byt the way, this chart is warning you to not play in paper silver.


Thu, 02/17/2011 - 21:47 | 972738 John Bigboote
John Bigboote's picture

Are you Gordon Gekko? I miss Gordon Gekko.

Thu, 02/17/2011 - 22:06 | 972794 william the bastard
william the bastard's picture

He needs his socks folded. You up to it?

Thu, 02/17/2011 - 22:13 | 972824 John Bigboote
John Bigboote's picture

Do you know that because you are his gay lover?

Thu, 02/17/2011 - 22:20 | 972849 william the bastard
william the bastard's picture

I didn't realize your avatar was "Big Boote" Whoa. Ahh nice, kinda.

Stepping lightly out the door backward face to face with you sir, Mr BigBooty, sir. I guess you know where the bread is buttered. Chino? San Luis O?

Thu, 02/17/2011 - 22:26 | 972870 John Bigboote
John Bigboote's picture

It is I, John Bigboote (big-boo-tay). You are forgiven. No harm done.

Thu, 02/17/2011 - 23:24 | 973000 SloSquez
SloSquez's picture

Now I'm really scared!!

Fri, 02/18/2011 - 08:54 | 973572 snowball777
snowball777's picture

No, he's the socks.

Thu, 02/17/2011 - 19:51 | 972284 razorthin
razorthin's picture

I know nothing about futures.  But the spot inverse h&s has been confirmed.  See how it all comes together?

Thu, 02/17/2011 - 19:51 | 972291 barliman
barliman's picture


Backwardation - nothing wrong here as a growing trend

...unless you are long JPM on margin, maybe


Thu, 02/17/2011 - 19:56 | 972317 barliman
barliman's picture


and the gapping on options across the same delivery dates as potential crucifixtion of the shorts accelerating ...

...What's the line ... "Would you prefer to be on the cross or banging in the nails?"


Thu, 02/17/2011 - 19:59 | 972330 barliman
barliman's picture


... but I won't believe the silver genie is out of the bottle until a certain succubus is found slumped in her chair from having (supposedly) eaten a 9mm round.

Not as dramatic as the cross but a lot more final.


Thu, 02/17/2011 - 22:10 | 972810 Founders Keeper
Founders Keeper's picture

[... but I won't believe the silver genie is out of the bottle until a certain succubus is found slumped in her chair from having (supposedly) eaten a 9mm round.]---barliman

IMO, the silver genie escaped the bottle back at $19/oz. The rest is just a matter of patience.


Thu, 02/17/2011 - 23:09 | 972974 SWRichmond
SWRichmond's picture

The second time it crossed $17 on the way up it was a done deal.

Fri, 02/18/2011 - 04:58 | 973425 Snidley Whipsnae
Snidley Whipsnae's picture

When I watched silver head north of $7 I started buying physical. I had no special insight, looked at no charts...just watching the train wreck in progress...

The dollar and it's fiat cousins are in serious trouble... and Ben's 'helicopter' speech didn't help it.

Thu, 02/17/2011 - 19:59 | 972324 MolotovCockhead
MolotovCockhead's picture

Does it mean we should short JPM?

Thu, 02/17/2011 - 20:01 | 972337 barliman
barliman's picture


read my second reply to myself

personnally, I think BAC falls before JPM. but then I AM an optimist.


Fri, 02/18/2011 - 03:05 | 973346 slewie the pi-rat
slewie the pi-rat's picture


and that would be b/c after they and/ their ilk have been declared "too big to fail" once, and have gotten BIGger, they would then be too big NOT to fail, right?

our goobermint at work.  screwing EVEYbody but the "cronies", and you folks are still playing, and still in paper?

don't eat 9'er mikemikeZ OR a cali forty-fiver.  life is precious.  isn't it?


Thu, 02/17/2011 - 22:28 | 972875 whatsinaname
whatsinaname's picture

pointless. they dont have to mark their paper losses to market.

Fri, 02/18/2011 - 09:16 | 973617 snowball777
snowball777's picture

Better to just hand your fiat out to the poor instead.

Thu, 02/17/2011 - 19:51 | 972292 cossack55
cossack55's picture

Is this a new captcha method?

Thu, 02/17/2011 - 21:27 | 972673 RockyRacoon
RockyRacoon's picture

I'm expecting an essay test captcha any day now.

Thu, 02/17/2011 - 23:41 | 973037 A Nanny Moose
A Nanny Moose's picture

I am still trying to figure out how to get the two digits and the "-" into a field limited to two characters. Input check ruingn amok, or I am just that dumb?

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