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80% Chance Of 40% Silver Short Squeeze
In the last 20 years, Silver shorts (in Silver futures, based on the Commitment of Traders data) has only been as high as it is currently for five periods. Four of those five periods were followed by considerable rallies in silver prices. The one period where prices flatlined (fell modestly) was a slow and steady rise in shorts (as opposed to the spike-like move currently). Of course, with near record amounts on the short side of the boat, it would seem clear where Silver should go next but this time is different we will be told.
- Jul 1997: +70% rise over 29 weeks,
- Nov 2000: -13.5% in 53 weeks,
- Oct 2002: +13.2% in 12 weeks,
- Apr 2003 +19% in 24 weeks,
- Aug 2005 +114% in 37 weeks,
Average +40.5%
Chart: Bloomberg
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People like watching train wrecks, Pauli.
I have never read you blog, I might just cruise by for a daily chuckle. Make that 20001.
I spent a lot of time on the blogosphere this weekend, so there is a lot to read.
Enjoy!
http://krugman.blogs.nytimes.com/
During the last depression people tended to amuse themselves with fantasy by going to the movies at the expense of other necessities. Looks like a trend toward economic amusement is already beginning among your new readers. Their amusement will fade to despair when they realize they were being led on a fools errand. Perhaps your readers will learn to love their captivity in your brave new world.
They come to laugh at your ignorance.
Nice try PK. NYTimes has a good alexa score but your blog is worse than 2 million. People who run blogs out of their mother's basement get more visitors than that. You are irrelevant.
Just goes to show how stupid people in general, and Americans in particular, really are.
Sorry to bust your bubble, I've even checked out your ragsheet, I mean blog. It's a #uckin joke. The number of reads have to do with people laughing at you.
The sky looks bright and blue over my drilled well out in the boonies. On my walk this morning I saw 3 turkey hens and a gobbler.
If I were in DC or NYC, the strutting turkey would be an economist.
Here turkey season is in. There turkeys cackle and strut with impunity.
The ammo cache is up 5 fold, thanks to turkeys of both types.
I am sure you enjoy those things, as you say, but 'functional' is not among them.
I believe Willie also lives in Costa Rica. Come on down Dr. Krugman and we can show you a good time.
Smug in your self-reinforced sophistication. I'd just like to know who do you have pictures on, to have allowed you to get a Nobel Prize. In 50 years, your name will be nothing more than a smudge of excrement, smeared across the footnote of some obscure textbook and you will be remembered as nothing more than an intellectually bankrupt ass clown who along with another clown, received what once was an honorable recognition
Bernanke is check mated.
If he lets interest rates rise there will be panic selling in the bond market.
He will then step in and buy all comers.
Voila $10 Trillion looking for a place to park and a nice little hyperinflation.
Face it the Federal Reserve is managing a scam.
You are an economic alchemist trying to turn paper into money.
How do you sleep at night after promoting all these lies?
So Paul, tell me what was it your dad did to you when you were young? Its painful to read your blogs. What did he really do to you? Did he slam the door on your head, which caused you to have these mental problems? or did he make you count and stack pennies to buy bread? Obviously you have an aversion to coins...
If you're the real Krug... then you're about to meet your match on this site. The worms have only started to come out after you.
As far as dollar assets inside the U.S., expect widespread confiscation. Dr. Willie contends, "When the losses from the debt write-downs come, I see tremendous national wealth lost because private accounts are really just bank assets." Join Greg Hunter as he goes One-on-One with Jim Willie of GoldenJackass.com.
That is why you need to CLEAN out your banks NOW,if you haven't already.
I will watch the pets in the local pet store, where I donate copies of your editorials, shit all over the nonsense you spew. I wish I could get paid excreting as much shit as you do. That must be one hell of a life.
Krugpigtroll stated:
Given that ALL fiat currencies have CONTINUALLY lost value (when not failing outright) throughout all of monetary history, whereas gold and silver have at least roughly maintained their values over the millenia, your claim is not only outlandish but quite retarded.
But I guess that is the kind of "wisdom" that only a PhD in Keynesian crackpottery can finesse.
Even disregarding the fiat, a Liberty Walking half dollar was worth a half dollar vs fiat until it wasn't.
And, once it wasn't, it NEVER went back.
Statists being poor = bad
Libertarians being poor = good
PK
We're not collectivists, does that mean we should be punished?
just contact a talented jewler. those shiny rocks put to work.
i hear the ladies love artfully crafted metal? even men can appreciate a human hand applied to a ductile substance.
why not use copper, brass, or lead? i'm guessing because they leave a mark.
have you ever worn cheap jewelery sir? it stains the skin.
Buying those shiny rocks increases monetary velocity. The higher the price goes, the higher the velocity gain from their purchase. You should be rooting for higher prices, as the increase in monetary velocity will surely be a boon for the economy.
Gold and silver are such small markets that they would not affect the velocity of money.
Then it should not bother you at all to freely allow citizens to use and exchange gold and silver as alternate currencies among themselves if both parties so chose, correct?
Hoarding gold hurts economic activity, so no, I don't agree.
Hoarding gold hurts centrally-planned* economic actvity, meaning we will do our best to expedite the inevitable collapse of your house of cards and return to real money for sustained prosperity... one hoarder at a time.
*Fixed it for ya.
Krugpigtroll squeezed this onto the ZH roadside:
#1: Why do you define holding gold, saving in gold, as "hoarding"?
Give us your definition of "hoarding".
#2: Why is "hoarding gold" uniquely bad for the economy, whereas "hoarding" stocks, or "hoarding" bonds, or "hoarding dollars" is not?
#3: You keep insisting that gold is not money, and is irrelevant to a "modern" economy --- so what does a statist such as yourself care what anyone does or does not do with gold in the first place?
I will not, of course, expect any meaningful or logical replies from you to these questions.
#3... no kidding. If he thinks gold is nothing but a chunk of metal, how is that any different than someon buying a chunk of plastic from China. According to Krugtard, people need to spend money to stimulate the economy! It doesn't matter if they spend money digging holes and filling them back in or spending it on The New York Toilent Paper.. I mean Times. He realizes that people who are buying gold are not buying stocks or depreciating junk. Which doesn't bode well for the economy, because gold and silver retain their value or increase in value over time and do not deteriorate. You don't need to buy new gold or silver whe your old gold or silver wears out. But toilet paper, dildos, socks and anal plugs which Krugman uses on a daily basis do wear out and people need to work so they can earn some more fiat to buy more! Walah! Stimulus!
lol
so no money pits for you? (savings) we must spend and be broke always! never take in a wayward soul (or plan for that occurance). SAVINGS IS BAD AND WRONG.
NEVER PLAN TO HELP ANOTHER.
let the state handle that, especially when they are ideologicallly opposed to you.
What are those evil bankers hoarding all that gold for? J P Morgan said it was money.
Individual gold savers = bad
Hypocrisy = good ?
No, it is no different than buying televisions or fancy cars, or any other good that may or may not depreciate in value. Don't you even know your own economic theory?
Holding gold or silver is the same as spending dollars.
Buying gold IS an economic activity. I exchange my cash for a gold coin, and the coin dealer runs out and buys toilet paper, and chicken, gas for his car, etc yadda etc. Just the same as if I had bought a couch with my cash.
The only way gold could 'hurt' economic activity is if it was the same as cash, ie. retained its value over the years. With your statement you have just proved your opponents' arguments correct.
P.S. Keep your economist nose out of my piggy banks. I worked hard for that money and if I want to use the paper bills to roast weiners with, I will. In my case I save it for my rainy, retired days. But it is my own business, not yours. Go obsess over your own cash.
What of people who save their (fiat, for the sake of argument) money in a bank? Are they not hoarding it, and thus hurting economic activity? I guess that explains why the savers are being so ruthlessly punished by Ben and his banker pals.
I wish your posts had value. They don't.
For me it isn't about making money, it's about shifting my fundemental way of saving money. The way I see it is, well, at least I see it. And I can hold it, let the kids see and touch it and generally know where it is all the time. My cost average has me $4-5/ounce over tyhe current valuation and I don't care if it goes an equal amount south of that. i don't speculate, I don't trade, I just own it.
Paul, if it is indeed your sorry ass, there are a lot of us that have lost much already. This time at least we get a hand full of cards instead of someone else playing the hand.
Now, fuck off, please.
Is it Recovery Summer 4 or 5?
Anyday you can trade paper for silver is a good day.
The day will come.....when you will no longer be able to do so.
ZH is usually pretty damned smart when it comes to understanding markets and how they function. I just don't understand what it is about precious metals that causes ZH to completely go berzerk and abandon its usual excellence in favor of flaunting its ignorance as to some pretty basic aspects of how markets function.
This is pretty simple, folks... The likes of GATA and Ted Butler are hacks who simply don't understand how the market functions. Net short exposure on the COT reports reflects perfectly normal arbitrage flows between LBMA and COMEX markets, and little more. All the "meaning" the PM conspiracy crowd reads into the COT reports is bullshit - it's a reflection of these people's failure to comprehend the BASICS of how the markets function, and nothing more.
Yet ZeroHedge, normally a champion of truth and debunker of bullshit, falls for this crap hook, line and sinker every time Adrian Douglass, Ted Butler, or any of the other PM crackpots open their mouths and flaunt their ignorance.
Tyler, why don't you do a feature piece explaining why I'm wrong and telling us why the commercial net exposure in the COT reports should be interepreted as anything other than what it really is: normal arb flows and nothing more.
Of course the conspiracy crowd will totally trash this post - it'll probably set a new record for negative votes. Fine. I can live with that. But I still want to hear from someone who actually knows just a tiny bit about metals markets why they think the COT reports' net exposure data tells us anything more than which way the (random) arb flows happened to run that month. Better yet, it would be nice if ZH could explain why it's so damned good at finding the truth in other markets, yet so committed to perpetuating bullshit, myths, and nonsense pertaining to PMs. I just don't get it.
xPat
Perhaps you can also tell us why the large majority of the silver shorts are held by one single entity, why those shorts are grossly outsized (and have been for many years) relative to the underlying physical market, and why the activity in the futures market for silver is so consistently unlike that of any other commodity.
Hi akak,
Sure, happy to oblige. Thanks for stating the question without the usual sarcasm and disrespect found in these comment pages. I'm always happy to elaborate for someone with a sincere interest in learning something new, but generally ignore rudely phrased comments. I appreciate your respectful tone.
First, the belief that JPM is the holder of the large majority of those COMEX shorts is just that - a belief that can't quite be proven from public data. But if we accept that it's true, the answer to your question is because how a bullion bank's net short or long exposure shows up in the COT reports is to some extent a function of its trading style, and also can be managed by the bullion bank. Personally my guess is that JPM is playing the conspiracy crowd a little, because they do indeed have the ability (over time) to manage their affairs to "paint the COT", so to speak, and frankly I think they are fucking with GATA and the conspiracy crowd when in reality the COT net exposure has nothing to do with their overall net exposure. There are lots of people who have been deluded into thinking that the COT data means what GATA et al think it means, and that creates an opportunity for JPM to fuck with those who are foolish enough to take GATA seriously. That's my guess, but it could be lots of things.
As to "outsized to the physical market", I respectfully disagree with your premise. What do you mean by that, and how do you quantify it? To understand this we really need to step back and understand the big picture of how LBMA and COMEX markets interact.
LBMA is WAY bigger than COMEX, and is basically opaque. Only the bullion banks really know what goes on there, as only they have enough order flow to really gauge an otherwise opaque market. COMEX is the much smaller little sister market, but because it trades very efficiently and is open almost 24 hrs, it's a very convenient hedging mechanism.
Where BBs really make their money is in arbing out the inefficiencies between LBMA and COMEX markets. So when the LBMA price drifts a little lower than the COMEX price, it creates an opportunity for the BBs to exploit a profitable risk free arbitrage, selling COMEX short and buying LBMA for a guaranteed instant profit. This is called price transmission through arbitrage, and it's what makes the various markets around the world stay in sync. And it's also the real reason those short positions show up on the COMEX.
Now don't get me wrong, I too question the ethics and integrity of these bullion bankers, and I wouldn't be the slightest bit surprised if they are involved in some really shady dealings. I most certainly include JPM in the suspect group. But what is obvious to anyone who understands how the market actually works is that the BB's real opportunity to be sleazy lies in the fact that they know what's going on inside the opaque half of this LBMA-COMEX see-saw. So if I were to speculate how they might understake some shady dealing, I'd guess they would exploit their unique opportunity to intentionally execute their customers' orders in the LBMA market inefficiently, effectively buying or selling "sloppy", and intentionally allowing the transactions they execute for their customers to throw the LBMA and COMEX prices out of sync with one another. Exploiting a risk-free arb for the benefit of your own account is a hell of a lot easier when you have the opportunity to *create* that price inefficiency intentionally at your own customer's expense. JPM and the other BBs with serious customer order flow are in a perfect position to profit by arbing out the price inefficiencies that they themselves just created, and therefore knew to expect.
Now I'm not saying I know that to be the case. What I'm saying is that to anyone who understands the basics of how LBMA and COMEX interact, it's plainly obvious that if something shady is going on, it's more along the lines of what I just described than all the absurd theories of JPM being a clandestine agent for a central banker conspiracy. That nonsense just doesn't stand up to scrutiy when you look at it closely.
What the COT report tells you is where the commercials stand in the SMALLER market. Since it's such a small part of the overall market, and because LBMA is both way bigger and for the most part opaque, the meaning and significance of a bank's net long or short exposure *on the COMEX* is almost irrelevant.
If you wanted to try to read meaning into the COT data, a big increase in shorts on the COMEX in a given month is really telling you that net physical selling happened - for some reason - in the opaque LBMA market you can't see into. That selling created a risk-free arb opportunity that JPM exploited by going short COMEX and long LBMA. So that means JPM seems to know who is selling on LBMA or have the ability to influence someone to sell in LBMA. Now this is all idle speculation and I have no idea; my point is that if you are interested in theorizing about what the BBs might really be up to, it would sound about like this. The nonsense promulgated by the Gold Anti-Truth Committee (GATA) serves only to evidence to anyone who actually knows how the market functions that these people are clueless idiots.
As to your question about "the activity in the futures market for silver is so consistently unlike that of any other commodity", once again you're asking a hollow and apparently rhetorical question. You haven't said what about the silver COMEX market is different from other markets, or why you think that's meaningful. If you care to elaborate and continue to be respectful in the way you do so, I'd be happy to try to shed more light on whatever questions you have. But you need to form more specific questions if you care to continue the discussion.
Bottom line, the question to ask yourself is why is it that for all other markets, ZH and the general investment community tends to follow smart people with proven track records in asset management. But for some reason, in precious metals, you guys want to make heroes out of washed-up futures traders who have been barred from the industry for life for operating an illegal commodity pool (Ted Butler), pharmacists from Canada with no formal qualifications or apparent knowledge of market mechanics (Harvey Organ), and pure out and out crackpots who have consistently failed as metals traders and now make a living promoting easily debunked nonsensical theories which in the eyes of anyone who actually works in these markets, is simply utter nonsense (GATA). Meanwhile lots and lots of hard working middle class people are making serious decisions about how to invest their life's savings based on the irrational ramblings of some anonymous dude on the Internet with no apparent market knowledge hiding behind a pseudonym borrowed from a B movie (Turd Ferguson). And then there's the whole "I have to stay anonymous because letting out the SECRET knowledge I have could get me killed" crap, a la "The London Trader". I mean seriously, how can you guys not see throught this BS for what it is?
And I really mean this: ZeroHedge, despite the edgy attitude, is usually pretty damned good at debunking bullshit and finding the truth. Yet in the case of PMs, ZH has done as much as anyone on the net to perpetuate and exaggerate pure and utter nonsense. The Tylers clearly have enough market knowledge that they should see right through this, but while they debunk BS in other markets, they perpetuate it in PMs. I just don't get it.
Again, there's plenty of room to suspect JPM and others of some seriously shading dealings. But the people writing about it simply aren't credible, and the mistaken assumptions they make clearly reveal that they lack even a basic understanding of how the market functions.
xPat
Arbitrage of what? Paper to paper? Those markets are trading back and forth billions of ounces of silver every day. For what purpose? Please don't act dumb, you are embarrassing yourself. The silver market is a fake market controlled by the banks and the FED. You know this and we know this. Nice try though, but we ain't buyin' it. Still stacking.
Silver For The People
Arbitrage between COMEX and LBMA creates instant cash profit for the BBs, probably at the direct expense of their customers. I would think that you guys who are obsessed with evil banker conspiracy theories would take interest in learning the mechnics of how these folks really do screw their customers over, but for some reason it seems you're not interested unless there's a good juicy conspiracy theory thrown in.
If for some reason you think "paper to paper" is somehow different or less likely a way for banks to rip off their customers, or if you think arbitrage between markets has less meaning or significance because at least one side of the arb is a "paper market", you haven't made that case yet. Your observation that "those markets are trading back and forth billions of ounces of silver every day" is almost accurate (millions not billions), but what you are doing without realizing it is to offer strong evidence that supports *my* argument, not yours.
You make completely unsubstantiated statements like "The silver market is a fake market", but you don't seem to care how the market actually works or where the real opportunities exists for the bankstas to rip us off. Why don't you guys just read mystery novels? You seem to prefer fiction and just tune out and make specious statements like this any time anyone tries to bring reality back into the conversation about PMs.
Respecfully, if you have a point I can't figure out what it is.
xPat
I have rarely read such utter bullshit on the pages of ZH. Real market? LOL....nice try blockhead.
This has been a fantastic thread to follow. Thanks for your insightful comments. Some of us come on here because we are interested... and do so for entertainment. I have a couple of questions... and understand that you are NOT providing investment advice: 1) given QEInfinity, where do you generally see silver/gold in the next 5 years under 2 scenarios (a)lethargic economic growth (ave 0%) and (b)modest economic growth 2.5%? 2) for a modest investor, where would you be investing each month, to generate reasonable returns in this environment? Again, one of the best threads on ZH on this topic in a very long time. Thanks Mr. Akak for being the catalyst!
Now let's get back working on expunging the demons from Dr K... :)
Hi web bot,
Thanks for the kind words. It's truly a shame that the ZH culture is what it is. I quite enjoy respectful intellectual discourse with people who hold different views than mine. In terms of the content and subject matter, I cannot imagine a better place than ZH to have a civilized, intelligent discussion about finance topics. Sadly, it's nearly impossible here. Bay of Pigs is actually being more grown up than I would have expected for a ZH comment thread, and that's why I (and thousands of other finance guys like me) don't usually bother to participate in the comment threads. A moderated civilized forum for discussion of ZH topics would be so awesome! It's almost tempting to create a parallel site that provides a CIVILIZED forum for discussion of the articles posted on ZH!
To your questions, I don't think the long-term bull case for PMs could possibly be better. But what most "goldbugs" just don't seem to understand is that markets don't run on economic fundamentals - at least not directly. The economic fundamentals will win out in the end for sure. But the reality of this situation is that a whole bunch of retail investors bought gold north of $1800 because various characters in the blogosphere told them it "just had to go up" from here. Now those same guys are freaking out, but everyone is telling them that 1525 is such a key technical support level that it's pretty much guaranteed to hold. Just another week or so of turbulence then it'll be all uphill from here, or something like that.
One of the most important rules in investing is that the larger the number of people who are CERTAIN something HAS to happen, the less likely it is to really happen. We're on the edge of what I think could be a major and sudden downside move here. Central Bank buying could avert it, and we may be close to a bottom. But if we close below 1500, my prediction is the retail guys who bought for the wrong reasons will panic - what Jim Puplava on financialsense has been calling the "Maalox Moment". That could easily mean a panic sell-off to 1250 to 1350, and you better believe the BBs will do whatever they can to provoke that event so they can buy on the cheap when retail craps out (extending Jim's metaphor slightly there!).
So my point is, the economic fundamentals for owning physical PMs for the long haul have never been better. That does NOT mean the market has to go up. To the contrary, we're set up for a major downside move if 1500 doesn't hold. For astute investors, the thing to do here is cross your fingers and hope that exactly that happens - a major blow-out to a panic low of 1250 - 1350. That's your "can't lose" buy-in point. As for right now, I'm accumulating out of the money puts this morning, August contract at the 1525 strike. The idea is to leg into a synthetic call when I buy bullion at 1530 or so, not only fully hedged but over-hedged so that I actually profit if the market mini-crashes from 1500 to 1300.
Thanks so much for the kind words. It's a true pity that we don't have a more civilized discussion forum at ZH - I would enjoy participating in discussions like this one more frequently. But I do have a fund to run, so I'm going to sign off from this thread now, and won't be following it any further. I do hope to run across akak, web bot, and others here who have been polite. I always welcome discussion with those who disagree strongly with me, but just don't have time for the sophomoric stuff that seems more the norm here.
All the best,
xPat
p.s. if anyone else agrees that a civilized, moderated discussion forum would add immensely to the value of ZH as a site, please consider sending that suggestion to tyler@zerohedge.com. He (they) won't listen to me because I have publically called them out as being full of shit on PM-related issues in the past, so I get the sense I am persona non grata with the Tylers. But maybe if more people realized how much we are all missing by having a culture that causes the people with the most knowledge to contribute to stay away... Who knows, ZH could become a whole new animal.
Oh, forgot to mention... Gold, Bitchez!
xPat
"Where BBs really make their money is in arbing out the inefficiencies between LBMA and COMEX markets. So when the LBMA price drifts a little lower than the COMEX price, it creates an opportunity for the BBs to exploit a profitable risk free arbitrage, selling COMEX short and buying LBMA for a guaranteed instant profit."
So that would mean when the LBMA price drifts a little higher than the comex price, there would be an arbitrage opportunity for the BB's to go long on the comex, right?
And I understand that the BB's are much longer now on the comex than usual, as the specs are short, so that would mean ... we maybe can expect increasing prices, no?
I think you actually confirmed what all the "crazies" have been saying.
Yes, exactly. And if any useful information can be drawn from the COT data whatsoever, it would be to gauge which way the arb flows are going - from COMEX to LBMA or vice versa.
The essential premise of the main article was exactly opposite what you say - the point was that the COT suggest extreme levels of net short exposure. I assumed the intended meaning was that it was commercials being short they are talking about, but on second review the article doesn't even say! What it does say - that the exposure "in futures" is shorter than almost ever is utter nonsense - the number of short and long contracts in futures is always exactly equal. If you want to analyze it for net long or short exposure, you have to focus on an identifiable group, i.e. specs or commercials. The fact this article omits the most essential bit of information - who they are alleging to be net short - further evidences that whoever wrote it doesn't know much about how the market functions.
But frankly I don't bother following the COT data because I know it's not especially useful, so I haven't verified any of the figures cited, nor do I know or care who happens to be net short or long this month. All I know for sure is that that information is largely irrelevant, and does not have the meaning attributed to it by the PM conspiracy buffs.
No, I really didn't. The important point here is that COMEX exposure - whether it be net short or long, by the specs or the commercials - has NOTHING to do with the commercials overall net exposure. You can't see what they are up to on LBMA, so you have no idea what they are actually positioned for. Meanwhile, thanks to GATA et al, the commercials know exactly how retail has been conditioned to respond to the COT data, thanks to nitwits like Ted B. That means they are in a perfect position to exploit retail by painting the COT data to induce the people who take GATA and Ted seriously, to do exactly what the commercials want. And you better believe they are exploiting that opporunity.
xPat
Anyone saying the COMEX and LBMA are in any way, shape or form legitimate is a crackpot.
"But what is obvious to anyone who understands how the market actually works is that the BB's real opportunity to be sleazy lies in the fact that they know what's going on inside the opaque half of this LBMA-COMEX see-saw."
That is exactly what GATA and Ted Butler and others have been saying for years. Quit talking out of both sides of your mouth. Corruption and fraud are okay as long as you know how to make money playing their crooked game? I assume you are a trader which would then explain it all.
xpat....There is a clear divergance between the physical and paper markets. There shouldnt be, but there is. And it is persistant. So I must ask myself who would benefit from it, and who has the ability to make it so.
Honestly ask yourself, and we will compare answers.
He claims the BB's are crooked and rotten and then proceeds to tell you how stupid you are for not "understanding how markets work".
Wow, what bullshit that is.
Hi Pirate,
Depending on what you mean, we probably disagree on that point. If you want me to elaborate, you'll have to be clearer about what you mean.
There at least half a dozen "paper diverging from physical" theories floating around the Internet goldbug universe. The most utterly silly of the bunch goes, "The premium above spot being paid for PSLV and PHYS evidences that a premium is developing for physical over paper". This is idiotic - spot is the true price of PHYSICAL at any moment in time. PHYS and PSLV are PAPER products, not physical bullion. They own physical bullion, but it's not one iota more or less "physical" than the "physical" bullion owned by GLD.
At the opposide end of the spectrum is the theory that because there are so many times more paper contracts in play than actual physical ounces in existence, this creates an artificially high total market capacity, and therefore the price is lower than it would be if there were no derivitives. That argument has its share of holes and can easily be debunked at least in part, but if you leave room for opinion at least part of it has merit.
In general, about 90% of the "physical diverging from paper" rhetoric you read online is pure unadulterated bullshit written by people who have no clue what they are talking about. But I can't possibly debunk it all here, and you haven't been clear on exactly which theory you refer to.
EXCELLENT point; very well stated. Here's my answer and I look forward to yours.
The really big "manipulation" that I see in "physical" is the "retail premium", referring to the premium per oz for retail products like coins and small bars vs. the london good delivery (400toz)-based spot price. No doubt whatsoever in my mind that that one resulted from pure, outright market manipulation. Perpetrated by the Turds and Twits who are selling retail products at a huge premium and pumping the market full of nonsensical "paper diverging from physical" stories, which help place fear, uncertainty and doubt into the minds of retail investors.
In short, YES, market manipulation is real. The people perpetrating at least some of the market manipulation are the very people who are perceived by the goldbug community as the heroes telling the goldbugs about all the evil bankstas and their conspiracy theories.
Had you even considered that angle?
xPat
So xPat, let's stand back here and look at the big picture, as I am beginning to suspect that you are so much a part of (captive to?) the silver market as it currently exists that you may not be able to see the forest for the trees.
Despite the overwhelmingly obvious motive for governments and central banks to suppress the prices of the precious metals (the "anti-fiat currencies"), and despite the very real and documented cases of them doing exactly that (the London Gold Pool of the 1960s, for example), and despite the almost innumerable cases of manipulation and corruption, both insider and official, in various markets today, you REALLY want us to believe that the gold and silver markets are as pure as the driven snow, that they are not managed, massaged nor manipulated in ANY way, particularly by those with the most to gain by doing so, and that current governments (Western most especially) neither see nor might see any threat or embarrassment from rising gold and silver prices, and would never in fact consider taking surreptitious action to suppress those rising prices, or at least induce artificial and excessive volatility in the precious metals prices in order to attempt to discredit them as a hedge against their failing fiat paper franchises? Really?
And I have to say, your specious attempt to discredit honest merchants from making a fair profit on the exchange of precious metals, and holding THEM up as the "real manipulators", is shamefully disingenuous, and does nothing to add to your credibility here.
Furthermore, your feeble attempt to malign certain analysts and commentators who are willing to condemn the corrupt and tottering financial and monetary status-quo paradigms with the label "conspiracy theorists" only adds to my suspicions regarding your honesty and integrity. Given the many manipulations, outright crimes and very real 'conspiracies' among the financial elite which have been made manifest just during the last several years, one does not need to 'theorize' that the current financial and monetary power structure is widely engaged in criminal activities designed to fleece the average investor, saver and citizen of their wealth.
Was not the recent banking crisis in Cyprus precisely the result of just one such, and very real, conspiracy, this one among the ECB and Cypriot politicians? The fact that it was sprung on the hapless Cypriot bank account holders on a Friday night, when they could not take any action to save themselves against it, rather speaks for itself. Such draconian and middle-of-the-night confiscations are not the actions of honest or honorable men.
Hi again akak,
First, thanks for your balance between expressing your strong opinions and your respect for civility. We clearly disagree, a lot, yet you seem to know the line between expressing your contrary view STRONGLY, as you have, and outright anti-social behavior, as some here whom I have not acknowledged are prone to.
No. Not really. Please take pause here and compare your statements to mine. I have been crystal clear that there is zero doubt in my mind that PM markets are manipulated. Heavily. I have said that I think the very people promoting all the conspiracy theories are among the manipulators, but I certainly have not said that the markets are "pure as the driven snow", or anything else. These markets are ripe for manipulation, and that's what happens. We seem to agree on that. Where we disagree is that I think the very people whining the loudest are among the manipulators. But I certainly don't mean that statement to excuse the bankstas.
Look, bullion banks are banks. Therefore ethics and "sense of right and wrong" just doesn't register with those people the way it does with most of us. They fuck everyone they can as hard as they can get away with. No dispute there. But if you look closely, you realize that the way they do that is by ripping off EVERYONE in the market just a LITTLE BIT at a time. For them it's about how they can LEGALLY if not ethically transact business on their customers behalf in such a way that their own (legal) malfeasance results in tradeable risk-free arbs that they are uniquely positioned to exploit. These people are as sleazy and greedy as they come, and nothing I've said here contradicts that. If you go back and re-read what I've actually written, as opposed to characterizing me into some bullshit category in your head, you'll recognize that we're very much in agreement that these markets are rigged. They're just not rigged the way the fucktards at GATA claim them to be, that's all.
Respectfully, now you're just slinging rhetoric completely without basis. Who decided these folks are "honest merchants"? Can you substantiate that argument with a logical argument based on the rules of logic and reason, or is it simply the case that my comments criticized people whom you have developed trust for - to such an extent that you are unwilling to consider my arguments on their merits, rather than dismissing them is "disingenuous"?
The word disingenuous means that you think I am full of shit and I know it. If that's the case, please elaborate. I don't represent or pretend to defend the BB's. To the contrary I know they are sleazy and dangerous. I just prefer to spend my time understanding the real aspects of that, as opposed to subscribing to specious conspiracy theories. Please elaborate on why you think I am being disingenuous. That means you think I know the real truth but am lying about it. It's really hard for me to understand why you think I would have the motivation or desire to engage in this converation were that my situation.
Ok, fair enough - you're entitled to those views. But so far you have totally, completely failed to substantiate your arguments. I have stated specifically why the arguments most frequently cited by Butler and GATA are nonsense. Please reciprocate by offering a substantive argument based on fact explaining why you think I am wrong. Attacking my character and rhetorically charging your own argument with phrases like "feeble attempt", but then failing to substantiate what about my "attempt" was wrong just shows me that you're emotionally defensive and unable to substantiate your arguments with factual, reasoned argument. I continue to await your elaboration.
100.0% agreed on that score. We the people are getting fucked over. Royally. I hope only to help you see that some of folks like GATA who register in your mind as the "heroes" of all this are actually the most guilty. You're being duped, and the people you trust the most to bring you the truth are the most guilty of manipulating your trust. I know that statement probably offended you. I challenge you to refrain from an emotional response, and instead focus on more substantive issues, like what the hell is up with all the "100:1 leverage" nonsense GATA was pushing a few years ago. The ration of physical to paper transactions (What Jeff Christian actually said) has absolutely nothing to do with leverage. That basic fact has been explained to the GATA principals over and over so many times by so many people it makes your head spin. Yet they keep slinging the same bullshit rhetoric. And not only are you falling for it hook, line and sinker, but you're also so loyal to them that now you accuse me of being "disingenuous", even though you've yet to substantiate a single argument you've made.
Extremely well said, akak, and it's comments like these that make me willing to continue this exchange. You hit the nail right on the head. Governments will continue to ignore their own laws and take money from whoever has it, and whoever is least able to retaliate through the political system. The government is the only entity going that's even more corrupt than the goddamn bankers, and I'm glad we agree on that.
You won't get one ounce of disagreement on that last paragraph from me, and frankly it's your passion for the subject that makes it worth my time to respond to you and try to clarify my view. I truly hope that some day you realize that some of the folks who have gained your trust by espousing a source of truth who are really the sleaziest of the bunch.
Actually, I have to stop and correct myself there. I used to think GATA were disingenuous people consciously engaged in manipulating people's perceptions. I thought that because frankly it's very hard for me to believe anyone who has been around PM markets for as long as Bill Murphy and Chris whats-his-name could possibly be that stupid. I regret those views, and I regret questioning these men's intentions publically. It's now clear to me - hard as it may seem to believe - that these guys mean well and are actually stupid enough to believe their own bullshit. It's truly astonishing to me that a human being could be that stupid, but I now realize that it's well meaning ignorance, not premeditated disinformation.
Thanks for being civilized in engaging me in this discussion, akak. We disagree strongly but you still leave me with the impression that you are a passionate person with a good heart. You've been misled, and I hope only to help you see the light.
xPat
xPat,
I have to thank you for your extremely detailed and in-depth response to my own --- such detailed replies are seldom seen here, nor would I have expected one. Whatever our differences of opinion may be, that was very thoughtful of you.
I do not and can not claim any comprehensive knowledge of the silver futures market nor its operations, so that is why I did not address some of your earlier posts directly. Nor, in fact, do I necessarily swallow everything the members of GATA have to say hook, line and sinker --- in particular, I was not particularly impressed with Bill Murphy's performance in his debates with Jeffrey Christian regarding the gold market and governmental involvement with it three years ago. Having never to my recollection having invoked GATA in any discussion here, I do not know why you were so willing to assume that I was a blind follower of them.
Also, I would of course agree with you that the bullion banks, and the entire financial system more generally, is out to screw the average Joe in every imaginable way --- and in many unimaginable ways on top of that. That is a given.
My question to you remains this: Given that the rising prices of gold and silver give governments and their central bankers a black eye in that they unambiguously highlight the debasement of their fiat currencies to a degree that they are congenitally unable and unwilling to openly see and admit, is it not rational to assume that they would not go to almost any lengths to not just downplay, but actively manipulate and suppress, those rising prices? Or, short of being able to do that for any length of time, to artificially induce an exaggerated level of volatility in their prices in order to discredit them as stores of value?
Let's be honest here: gold (and possibly to a lesser extent silver) are NOT just another commodity, but are widely recognized "alarm bells" of investor fear regarding geopolitical risk, financial upheaval, and most especially, fiat currency depreciation. Given governments that are willing to grossly manipulate and blatantly manipulate their officially-reported inflation/cost of living (CPI) statistics in order to pretend that the levels of currency debasement ("inflation") they are causing are far less than any reasonably informed person knows to be the case, can you REALLY believe that such governments would not ALSO try to suppress other such signals of currency debasement such as rising gold and silver prices?
Honestly, it seems more than naive to suggest that this is not likely the case, wouldn't you agree?
Hi again akak,
I had resigned myself to stop participating in this discussion as it's starting to consume too much time, but after reading this I felt obliged to reply because you are absolutely correct that you never even mentioned GATA, and I was putting words into your mouth, for which I apologize. Please understand that I need to make this my last post in this thread, but I do quite look forward to crossing paths with you in the future. While we disagree, you have been perfectly civilized which is unusual here, and quite welcome.
To explain myself, between other commenters here and my own past experience, I find that any time I try to point out the fallacies of GATA and Ted Butler's arguments, the goldbugs turn emotional and irrational. I was projecting past experiences with others and assuming you shared those views. Shame on me! You've been a perfect gentleman (or lady?) and I should know better than to assume I know your view before you state it. My bad and I apologize.
The whole "governments have an incentive to suppress gold because it's a signal that markets use to know when things are going out of control" argument is an interesting one, and worthy of discussion. Very briefly, I don't agree with your view, but sadly don't have time to discuss it in detail today, and it's a very long and involved conversation. I hope we cross paths again, and hope you'll accept my apology for assuming you held a view I've found common among others who share some of your other opinions.
All the best,
xPat (signing off from this thread now)
You seem to know quite a bit about the players. I would be interested in your opinion of Doug Casey.
I've met Doug several times, and have even made the trip to go check out his operation in Cafayette, Argentina.
In my estimation, Doug is as sincere and genuine as they come. That doesn't change the fact that he's an extremist, or that his views are often exaggerated. What I really like about the guy is that he's honest and he's real. He believes 100% of what he says - I feel absolutely certain of that.
But lots of people including Charlie Manson truly believed in what they were doing. Ok, that was a really crappy analogy - Manson was a horrible person and Casey means well and sincerely believes in a lot of great causes and ideas. But the guy is still eccentric and extreme. He sincerely believes in true anarchy - no government at all. That's not just Doug trying to "stir the pot" by making bold statements. He truly means it. In my view, we need a WHOLE LOT less government than we have. But none whatsoever? So that my only defense against bad guys is to be better armed? No thanks - not my idea of civilization.
Now if I had a choice between Obama (let's see if we can out-do the soviets on the socialism front) and Casey (let's eliminate the government completely), I'd have to pick Casey. But my strong preference would be a Ron Paul type of character who understands that there needs to be a government, even if the goal should be to minimize its footprint.
xPat
If what you wrote is true then the same activity would exist for oil, wheat, corn, beef, pork … yet it is not true.
There’s a very clear difference looking at silver and gold. That very clear difference is far far more contracts short that what can be delivered on the dates due, and that you can lease gold vs LIBOR with a GOFO-LIBOR spread – you can’t do that with silver much less beef, corn or pork bellies.
Please, explain yourself as per the remarks I’ve indicated.
The New York floor traders just hit the short stops causing forced buys; the price of silver went up 20cents in twenty minutes; (a thousand dollars a contract). 3;40AM Hawaiian Time. (No, I don't sleep).
1 SILVER OUNCE FOR ONLY 7500$
http://www.ebay.com/itm/Rare1oz-Silver-and-Gold-Original-Physical-Casasc...
GET IT WHILE IT'S GOT!!!
or buy a couple of ounce of gold with it...
BUT YOU GET A FREE BOX!!!
+ shipping costs off course... it's a bottom price and his margin must be pretty close...
It had to happen.
I got long (xag). on 4-4. Silver is holding up pretty well on the back of $ strengthening today.
The most money will be made after dollar collapse....
http://www.youtube.com/watch?v=GKgRBKvnA1k&feature=player_embedded
Awesome video...This is my philosophy to what's coming
EDIT watch it past the Kyle Bass interview
You would think of after 40 years of chanting "dollar collapse" doomers would realize it isn't going to happen and come back to join society.
Not really. most have only been calling for it for the past 4-5 years. You know, when the whole house of cards started toppling and the paper started to flow.
Oh yeah, I will allegedly fuck your first wife and your second wife while your 2 close nephews watch.
Somebody has created an avatar named Dr Paul Krugman and is having a lot of fun jerking chains here on ZH. The real Dr. Paul Krugman wouldn't have the balls to show himself here, but just in case I'm wrong and it is the real DPK posting, why don't you verify your identity by giving all of us your home address? Or some other way that we can contact you, you know, personally.
Call my Princeton office on Thursday; I will be available for office hours.
Not until you buy that mouthwash!
I would suggest he use baby wipes. I have cleaned up some nasties from my children with those, so it may have a chance with him.
the thing I find most fascinating about you, dr, is that both your wives names are robin, which is your middle name.
Paul Robin Krugman = PRK
People's Republic of (North) Korea = PRK
Fascinating.
Sadly, the dollar collapsed a long time ago. Its now on its death bed. If this weren't true China would be stacking treasuries and dollars instead of gold.
And the good "Doctor" is silent.......
http://wws.princeton.edu/people/display_person.xml?netid=pkrugman
Easy, just verify it on his blog. Trouble is, who here is going to read it.
Given that the dollar has lost at least 85% of its purchasing value over the last 40 years, that makes your "doomers" 85% correct, and makes you (at least) 85% wrong.
You confuse purchasing power dropping with living standards increasing.
And you attempt to further misdirect and obfuscate the obvious.
Feeling a bit butthurt by unassailable facts, Krugpigtroll?
Please be respectful.
It's DOCTOR Krugpigtroll.
Growth is a Jewish word for debt...........About $17 trillion last time I checked
Sir, explain "living standards increasing" when it takes 2 incomes to support a household. The average revolving debt by household for 2012 was +$15K, college tutition is rising faster than medical insurance.
40 years ago a household was supported by 1 income.
Somebody sounds confused between the two.
Prior to 1965, a real dollar, a silver one, could be exchanged for one paper dollar.
Today, how many paper dollars will it take to buy that same silver dollar?
That, "Dr." K, is what we're talking about.
By what standard? People can buy less with a work-hour post-taxes, people pay higher taxes, the majority of purchases are food, utilities and transportation and these are all a higher cost in real work-hours, so that’s a drop in the standard of living.
The 2 increases are medicine (depending on antibiotic resistance) and computing power (which is only semi-essential for living). Computing power drives the economy (essential) though many people can live fine without a personal computing device (computer, phone, netbook).
It already has happened. The US is on the decline stage of empire. Their timeline expectation is just a bit short.
LOL...You would be a hoot at our campfires....
What's next weekend look like for ya?
I could show you what society is going to look like
Work some of that baby fat off ya...
Have you noticed how much the dollar has collapsed in the last 40 years?!
My old man made less than $5.00 /hr 40 years ago, and he could support a wife, and pay down a mortgage at the same time.
I would say that the dollar's performance has been pretty shitty to say the least.
After 40 years, in 2011, the debt was $16 Trillion and the interest on it was $454 Biliion at an average interest rate of about 2%.
40 years ago the interest on the debt was not significant.
If the interest rates go up to 8% it will consume all Federal Government income.
That's why we are crying dollar collapse.
You are smart and must know this so why do you lie?
please explain how i rejoin society. i've been trying to figure it out, but i just can't.
i know it has something to do with accepting welfare over gainful employment, but it still just doesn't seem right.
i thought i would be payed for my contributions above the average, but i guess i was wrong.
"It is no measure of good mental health, to be well adjusted, in a profoundly sick society"
-Krishnamurti
I relish the idea that you and your ilk will soon be irrelevant.
Didn't you declare bankruptcy not too long ago or was that some rumor? I mean if you did then you really have zero credibility when you can't manage your household economy much less wax poetic about the economy of entire societies.
When will physical set the price?
Side note: apparently the equity markets believe earnings season will be fantastic!
Bullisht.
Side note: apparently the PPT believe earnings season will be fantastic!
There...fixed it for you.
So true
READ IT AND WEEP BEEZ NOTCHEZ... Got Phyzz!?
dont let them physche u out of your real money if u got it and r still getting it...
they aint gonna win...i know this....
"Where else might it go? The exponential rise in demand for gold and silver coins and bullion bars tells the story of a loss of confidence in conventional banking and money. How is it, then, that in the face of rising demand; a banking system in disarray; and the "printing" of trillions of dollars, that the prices of gold and silver bullion remain subdued? Is it only in the East that the lessons of the Weimar Republic have been learned? Or have the laws of economics been reversed?
It has been said that there are no free markets any longer, only interventions. The world's most prominent intervener, by far, is the Fed. It intervenes in the interest rate structure; it intervenes in the housing market by buying mortgage-backed securities, undertaking to continue to do so until the anticipated recovery in unemployment statistics occurs; and it intervenes in the supply of money with its regular purchase of US Treasury bonds (which is to say, it creates money "out of thin air"). The US Treasury intervenes regularly to prop up the stock market through "the Working Group on Financial Markets", also known as the "Plunge Protection Team," established under former President Ronald Reagan."
http://www.bdlive.co.za/opinion/2013/04/08/how-the-us-herds-the-sheep-aw...
I just want out of my sizeable and underwater position in PHS.U, then Eric Sprott and everybody/everything else connected to the paper price of silver can go get proverbially fucked for all I care.
Sounds as if you shouldn't have gotten into it in the first place.
look at this fucking market rip right into the close. Holy freaking shit.
Grab em' by the balls and let em' suffer. Twist that shit, that's what you get for betting against savers. Fuckers.
Meanwhile with all the manipulation, I don't know that we can count on it just yet. Fuck fundamentals, there are no fundamentals, there is only central banking.
The whole thing is front running the Fed...
It's pretty much over
Don't be so subdued, Missy. Come right out and speak your mind!
Good to see you up and at 'em this fine day.
You too Rocks who rocks!
100% chance of the S&P going up. Nothing can go wrong with Ben and the algos.
This old data prior up to July 2003 is pure BULLSHIT! ... The U.S. finally depleted its Strategic Silver Supply (i.e. The Silver of We The People) at that time, which is why silver started its rise at precisely that time. That physical supply is now GONE!
Paper... Yawn... Next...
What does this even fucking mean??? Stocks erase gains to poke Higher??? My fucking mind hurts. Is the MSM using some alternate fucking dictionary???
CNBS Headline: Stocks Erase Gains to Poke Higher; Alcoa Gains Ahead of Earnings
Published: Monday, 8 Apr 2013 | 3:22 PM ET
By: JeeYeon Park
CNBC.com Writer
Stocks erased their early losses to turn higher in thin trading Monday, but investors hesitated to jump in ahead of what is expected to be a lackluster first-quarter earnings season.
the commercials just reduced their net shorts by 28 million ounces too, another big indicator big price rise is imminent.
meanwhile, we have first reports of tungsten silver- fake silver eagles surfacing on ebay.
http://silverdoctors.com/tungsten-silver-fake-ases-discovered/
Tungsten would be dumb, it'll be something else... Yeah molybdenum.
Yeah, tungsten's too dark - maybe they're using platinum!
/s
alcoa is funny. the stock is 20% lower than where it was a year or so. Now let's listen to Klaus Klausfeld tell us how great things are.
He actually goes by the name Santa Klaus, but that may change after today.
Spot silver monthly still shows a lot of downside. Support at $26. Bounce on Friday.
http://bullandbearmash.com/chart/spot-silver-monthly-closes-consecutive-...
Would wait for follow through before longing. That didn't happen today.
Your incessant and invariably one-sided calls for further declines in the prices of the precious metals are worthy of Jon Nadler himself.
Silver has lost half of its value since it peaked years ago, and you are saying he is wrong?
So basically you, Pirate, troll whoever does not share your opinion.
Silver has also risen over 100% in value over the last four years, and gained more than 500% in value in the last ten years, so you might want to be a bit more liberal in cherry-picking your data, troll.
Did it really? Or did it really just retain it's value?
Commodities are priced in $. That by proxy makes purchasing power priced in $s. So yes, AKAKS comment is in fact correct.
Only if the dollar's purchasing power hasn't changed. Shall we look at... say wheat in $? for argument's sake.
http://www.indexmundi.com/commodities/?commodity=wheat&months=180
Gold & silver aren't investments, they're stores of value, their value doesn't change much. Their price does mind you. Price is what you pay, value is what you get.
The USD's a shitty measuring stick.
Until we have another reserve currency that commodites and tangibles are priced in, I think the $ is a pretty good guage. The dollars purchasing power has changed, hence the the increase in the value of xau & xag, that are priced in $s.
I disagree because the real ultimate currency leveraging into income is energy – food energy, gas energy, electrical energy. I’ll use work-hours and work-energy as my input metric & tangible goods as my output metric, thank you. Dollars fail to meet my standards of accuracy.
You rang?.....Yes Im quite happy with my $8 silver. And anytime i find some PHYSICAL silver for sale at the official paper price, i buy it. My average price may one day reach $20. Perhaps then I will reevaluate buying more.
Hey Mr. Akak, look at what just crawled in. The boy with the daddy issues...
And the value of GM, Yahoo, Chrysler, BAC, Lehman, Bear Sterns, Alcoa, Wachovia, Washington Mutual, AIG, AOL, CSCO, AMAT, Citibank to name just a few. What value do they have vs the value of silver in the last decade?
Did you look at the chart? Could you point out the reversal?
Do you usually long into a strong monthly downtrend?
You can scream and cry and stamp your feet and blame outside influences, but long silver is a shit fucking trade right now. And if the US Dollar continues higher (as the Euro falls - it was the Yen's turn to tank today) Silver in USD is headed lower.
In the end, you can lead an akak to water, but you can't make it drink.
In the end, you can lead a groupthinking geek to truth, but you cannot make him see his own normalcy and recency biases.
Got it. You haven't looked at a spot silver chart. You rant instead. Are you paid by the word? By the rant?
Good luck with your long silver. Hope for the long term.
Unlike you, I have both a knowledge of monetary history and the inevitable fate of fiat curencies during periods of rampant governmental profligacy and exponentially rising indebtedness, as well as more than a ten minute mental timeframe.
Your ignorance and terminal short-term thinking will be your own undoing.
Thanks for the personal attack. Did you have a look at a spot silver monthly chart .....yet? Could you point out the reversal you see? And this time, let's keep focused on the question and not go off on your personal attack rants.
How's that?
LOL
You short-termites always make me chuckle.
I spit on your bullshit charts, as they are not only NOT a crystal ball, but mean utterly nothing in the face of both the fundamentals and of the broader historical analogs and parallels. Talk about not being able to see the forest for the trees!
Iwonder, do you drive by focusing only on the rear-view mirror as well?
I have been around the PM markets for quite some time now and akak knows full well, what still appears to be known by few.
You have a peek at this chart & see what’s coming.
http://flic.kr/p/dQd1eD
and this one for gold which may yet see 75/oz silver in December.
http://flic.kr/p/dvDHf2
I'm not trying to piss on your parade here, but you seriously need to look at a H-4 silver chart. The RSI is divergent of the drop. Silver appears to be carving out a bottom to me. I would say the risk reward of a long trade looks pretty good with a stop just below 26.
I prefer physical, but use paper to hedge my F/X trades short term. The DXY looks heavy on the daily chart so the metals look like a decent bet. I also think that the yen trade is due for a decent retrace, and some $ selling.
It's not luck, it's negative real interest-rates.
Chart a lot?
Only fools still play the markets based on the old rules.
I ONLY buy into such a downtrend – that’s how money is made & value is attained on the cheap. Anything else is chasing yesterday’s news & losing money.
Spot silver is falling below the cost of production except where Silver is a by-product. That doesn't bode well for Silver supply in the future.
That's good stuff. Supply and demand are two important commodity indicators as is COT.
In the end, I choose price.
One gets the feeling that at some point the big players will get caught with their pants around their ankles.
At that point reality is going to grab on and rip their balls off.
Chevy Volts have fallen below the cost of production. The only by-product of their production is bullshit which has no value either. That doesn't mean there won't be even more of them available in the future.
Moral:
The cost of something is not an accurate guage of what it's worth.
I managed to get to the Cambridge House resource conference in Calgary this past weekend. Aside from the usual cadre of liars perched outside of holes in the ground I was pleased to speak to my bullion dealer of choice. He affirmed that they can still get metal but the US and Canadian mint are on allocation and are releasing things in dribbles and private mints tend to be 6-8 weeks out on orders. Shortage? No but you can see it from there on a clear day. Just exactly what you WOULDNT expect logically in a free market with prices circling in the drain.
Any ways, hang em high and let it burn. We need some reverse blowtorching.
Thanks for the report CD. I have always wanted to go to one of those Cambridge House conferences.
By chance, did Jon Nadler (dis)grace this conference, as he has previous ones? I must admit that half of my desire to attend one of those conferences was to publicly heckle and confront that bastard if he dared show his face. Why (and how) Nadler was never utterly booed off the stage there in the past is an abiding mystery to me.
To be honest I did not stick around for an inordinately long period of time. In the blogosphere I find that most of the presentations I would WANT to see, I've seen or they will show up soon after the presentation. Also the hard sell by the juniors isn't something I'm into. The bullion guys stated that the traffic for that area and in general was muted this year, but they were doing a pretty brisk business.
Isn't it a 40% of an 80% squeeze?
80% chance of a squeeze that leads to 40% gains on average.
I keep saying and will say again that with the level of manipulation in the PM markets (question - why isn't gold at $3500 given what the Fed is doing - answer, because they don't want it that high because it ruins their "confidence" game in jacking up the equity markets) you don't know what the "right" price is. You can talk about history and inflation and ratios in the earth's crust but at the end of the day...a handful of metal is not so different than a handful of paper albeit more scarce. Paper is an IOU which has a business use. Metal is like a Warhol painting, there will always be someone that wants it but in bad times he is going to offer you half as much for it.
Hmm...
gold/silver is what? 57?
It ain't so extended why would they bother shorting it? It does look like it's turned mind you, head back down to 50. It's a crappy time to swap gold for silver mind you. Silver does well when the real economy is doing well. Any evidence of that?
I think I'll wait a few days & see what the JPY does to gold.
Silver does well when the real economy does well??????
Like from 2008 to 2011?
Can you even read charts and graphs?
With respect to gold. You take the gold/silver ratio chart and you turn it upside down, and overlay it on the S&P. Silver accelerates when there's industrial demand a lot more than gold does.
Moneyweek have a nice example:
http://www.moneyweek.com/news-and-charts/economic-indicators/gold-indica...
See the correlation? S&P should be somewhere round about 12-1300. Copper agrees btw.