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CME Hikes Gold, Silver Margins By 18.5%

Tyler Durden's picture




 

Anyone surprised, please raise your hands. And yes, it was fun when margin were hiked only on surges in the various futures contracts. Now, dumps works just as well. The logic, of course, is that gold shorts are also margined. However, judging by the immediate $15 drop in gold upon the announcement, those who are short the metals certainly have a much, much bigger balance sheet and cash hoard to satisfy any collateral requirements than those long. Next: expect the Shanghai Gold Exchange to hike margins in a few short hours once China wakes up and looks at overnight PM prices in horror.

Source: CME

 

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Mon, 04/15/2013 - 18:34 | 3453388 Temporis
Temporis's picture

Still have my stack.

Hope silver drops to $5 so I can get a whole lot more.

The more they drop it, the more I can buy.

Mon, 04/15/2013 - 18:35 | 3453412 Croesus
Croesus's picture

Yeah, we knew that was coming.....but I don't think the Chinese will look at the prices in horror....they'll probably BTFD.

Mon, 04/15/2013 - 18:38 | 3453452 Melin
Melin's picture

exactly.  I always wonder why people assume the Chinese dislike cheap PMs.

Mon, 04/15/2013 - 18:59 | 3453551 Temporis
Temporis's picture

OMG Kitco is selling silver Eagles / Maples ONLY OUTSIDE THE US.

WTF!??!

https://online.kitco.com/bullion/completelist_USD.html

Mon, 04/15/2013 - 19:12 | 3453624 dryam
dryam's picture

Can anyone shed some light on this most curious fact?

Mon, 04/15/2013 - 19:15 | 3453636 Frank N. Beans
Frank N. Beans's picture

weird

Mon, 04/15/2013 - 19:54 | 3453806 markmotive
markmotive's picture

The end might be near...

John Taylor: Gold is Close to a Buying Opportunity

http://www.planbeconomics.com/2013/04/gold-close-to-buying-opportunity-j...

 

Mon, 04/15/2013 - 20:42 | 3454040 Manthong
Manthong's picture

Kind of ballsy..

A high margin for a bet on nothing.

Mon, 04/15/2013 - 19:15 | 3453638 tallen
tallen's picture

I actually think it's bullish this time. Seen as though any long with excessive-leverage has probably been stopped out by now, it's the shorts this time that are under-pressure with vol in silver/gold right now. 

Tue, 04/16/2013 - 06:48 | 3455382 Winston Churchill
Winston Churchill's picture

Kitco delivers thru' their subsid. in new England.They deliver to them in bulk.

Means that susid. is out of stock, and cannot resupply at the moment.

TPTB badly misjudged the response on this takedown.Trouble is they truly

believe they are obermensch.They are not infallible at all,far from it.

Mon, 04/15/2013 - 19:56 | 3453813 jonjon831983
jonjon831983's picture

Interesting.

 

lol... because they don't want any more USD?

Mon, 04/15/2013 - 20:27 | 3453974 Buck Johnson
Buck Johnson's picture

That is weird, something is on the way and it's extremely ugly.

Tue, 04/16/2013 - 03:20 | 3455232 torak
torak's picture

Sweet Jesus.  We can't allow the muppets to buy the dips (takedowns) on margin.  That's only for the .01%ers to do.

Mon, 04/15/2013 - 19:01 | 3453584 Croesus
Croesus's picture

@ Pinto Currency:

Your post on Maguire ties right in with Bill Holter's comments:

http://blog.milesfranklin.com/force-majeure-was-the-end-game-all-along

 

 

Mon, 04/15/2013 - 19:08 | 3453610 Pinto Currency
Pinto Currency's picture

Croes

Did not see.

Comex makes no promise in their rules of physical delivery.

LBMA would be incredible but I think inevitable.

Mon, 04/15/2013 - 19:30 | 3453709 Croesus
Croesus's picture

@ Pinto Currency:

I think it's (the default scenario) probably true. There are too many manipulations happening, and the frequency is increasing. That Gold VIX chart from earlier was very interesting, in that it implied a major event has occured, and the markets haven't learned of it yet, let alone had a chance to digest it.

After the Boston Marathon bombing happened, any type of financial news automatically became less-important. Not to go all "conspiracy theory", but I have to wonder what our attentions are being diverted away from?

Too many coincidences happened today.

Mon, 04/15/2013 - 21:04 | 3454158 Pinto Currency
Pinto Currency's picture

Keep in mind, the threat of the LBMA default is to the fractional reserve fiat money system.

Solutions abound, but will not be pursued by Obama and those who finance him.

At some point, this will reach a point where it can't be avoided any more - it will be interesting to see if Obama et al are successful in using force to set the direction forward or whether they will be forced to develop a productive solution.

Mon, 04/15/2013 - 19:02 | 3453542 WhiteNight123129
WhiteNight123129's picture

HERE IS WHY GOLD HAS TO GO LOWER: JAPAN

The Gold price has risen in Japan even before the attempt to debase the currency. If Gold were to spike in Yen terms, it would have triggered a panic buying of Gold in Japan and central banks do not want that.

Gold is the only asset which is purchased in panic as we all know here.

SO: WE SHOULD HAVE FIGURED THIS OUT!! I THINK SOROS AND GARTMAN AND OTHERS WERE FIGURING THIS OUT. There is no meltdown is soft commodities as we speak (gold and Soft commodities always are joined at the hip, since the consumption does not depend on government policies unlike industrial commodities consumption leveraged by Chinese SOEs).

This move is just to avoid a disorderly price of Gold coming from the Japanese public.

 

JAPAN POTENTIAL PANIC BUYING WOULD BE WHY MCGUIRE TALKS ABOUT A DEFAULT, THE YEN FALL WOULD PROBABLY HAVE TRIGGERED THE BEGINNING OF PANIC BUYING IN JAPAN.

 

Mon, 04/15/2013 - 19:15 | 3453635 augustusgloop
augustusgloop's picture

Soros figuring it out? Soros has figured it out. If you are a very smart mother fucker who has faced the abyss vis a vis nazi regime as it engulfed Hungary, you figure it out early. 

 

Soros always has Janus headed comments-- "gold is the ultimate bubble" - parse that. this after gold goes over 1K on first bout of QE.  Not gold is in a bubble... Gold is the bubble after all other bubbles have been inflated / popped... 

 

As well his recent comments about gold not holding up as a safe haven...but will hold up on central bank buying.

Mon, 04/15/2013 - 19:15 | 3453642 boogerbently
boogerbently's picture

Tell me when JPM and team quit shorting.

Mon, 04/15/2013 - 20:15 | 3453911 WhiteNight123129
WhiteNight123129's picture

Also remember that Gold had reached its very old 1980 ALL TIME HIGH in yen only a few weeks ago.

What typically goes on when an old all time high is breached? IT GOES OFF THE RACES!!!

Now what would have happend to flow of yen, it would not have gone to treasuries!!!

ALSO:

Since Gold shapes inflation expectations and since Japan is where there is the most risk of hyperinflation, this coordinated move on Gold was absolutely crucial to make sure that this risk of hyperinflation is pushed away.

Now I guess Kyle Bass who was wondering why the Gold is low has his answer...

 

Mon, 04/15/2013 - 19:18 | 3453656 johnnymustardseed
johnnymustardseed's picture

This beat down begs the question: What do they know that make them so scared that they need to push the price so low?

Mon, 04/15/2013 - 19:54 | 3453808 seek
seek's picture

All the indications are the economy suffered a 2008-level implosion starting around Oct/Nov 2012, and the reality of that is starting to appear. Mix in Cyprus and widespread distrust of governments, both by citizens and other governments, and you have a witches' brew for deflation and bank runs before the hyperinflation hits. They have access to unadulterated statistics and see the writing on the wall.

Standing for gold delivery is the visible symptom of mistrust, and they're trying to disrupt it before the lie is exposed, and it's not working.

Mon, 04/15/2013 - 20:37 | 3454007 kaiserhoff
kaiserhoff's picture

Yes, a six month lag.  Fools won't believe it until they see the stats.

I've never understood how the traders in Chicagah couldn't react to floods or drought until they saw the ag dept reports, even when they had the same damn weather as the corn belt. 

Mush for brains..., quite profitable, though;)

Mon, 04/15/2013 - 20:16 | 3453915 WhiteNight123129
WhiteNight123129's picture

It is Japan which was the scare. See my comments above.

Mon, 04/15/2013 - 18:42 | 3453471 kaiserhoff
kaiserhoff's picture

There goes the neighborhood.

  As if thousands of people didn't have their faces ripped off in the last two sessions.

  Flat never felt so good.

Mon, 04/15/2013 - 19:27 | 3453690 rocker
rocker's picture

One needs to wonder if the Stock Market is next. The action looked bad on all fronts. If the economy was growing platinum would have at least parted ways from gold. Since it has not I don't like any assets except for cash. 

Mon, 04/15/2013 - 18:51 | 3453526 DogOfSinope
DogOfSinope's picture

They can finally convert truckloads of US treasuries for something of actual value.

Mon, 04/15/2013 - 19:17 | 3453600 BigJim
BigJim's picture

 ... "Next: expect the Shanghai Gold Exchange to hike margins in a few short hours once China wakes up and looks at overnight PM prices in horror."

What? You think anyone holding PMs over there managed to sleep? 

Mon, 04/15/2013 - 18:35 | 3453418 Temporis
Temporis's picture

My coin guy is now selling silver eagles $6 over spot.... wow...

Mon, 04/15/2013 - 18:38 | 3453434 devo
devo's picture

I see that everywhere, but once they sell of their current stock (which they bought high so they have to jack up the premium), the new inventory will probably have much less premium. Right?

Mon, 04/15/2013 - 18:57 | 3453552 seek
seek's picture

New inventory... LOL.

The blank makers have to get their metal from somewhere, and it's not going to come from good delivery bars bought on the futures exchanges, so that leaves the miners. I don't think the miners are going to be super excited about production at low prices and will scale back. Physical supply is going to get tighter, ergo premiums higher.

Of course if the LBMA default rumors are true, AU will go to the stratosphere shortly, and premiums will be the last thing to worry about.

Mon, 04/15/2013 - 19:02 | 3453588 devo
devo's picture

Miners are still turning a profit, albiet narrower, so as long as they are doing that they'll produce.

I do think physical supply will get tigher, but not so tight dealers can't get any. There are also panic sellers who are giving their silver to apmex et al for 18 or so right now.

We'll see. I expect lower premiums in a few weeks if the price sticks here.

Mon, 04/15/2013 - 22:58 | 3454813 Panafrican Funk...
Panafrican Funktron Robot's picture

People who hold physical silver don't tend to "panic sell" to anyone.  Kind of defeats the purpose, eh?

Tue, 04/16/2013 - 00:40 | 3455067 fourchan
fourchan's picture

we laugh at the gyrations of paper and its enevitable end.

Mon, 04/15/2013 - 19:06 | 3453605 dogbreath
dogbreath's picture

If I was a dealer I would pretend to be sold out too

Mon, 04/15/2013 - 18:47 | 3453507 Georgiabelle
Georgiabelle's picture

Mine too, but he only had about 30 of them left. And other than a few 100 oz bars, he was completely out of all other stock. He has orders in process but said he doubts they will be filled. None of his sources have any physical available. 

Mon, 04/15/2013 - 19:58 | 3453827 jomama
jomama's picture

my guy is up to $4.95 over spot (when he's normally $2.95), and had a bleak look on his face when i said i wanted 100 of them...

Mon, 04/15/2013 - 21:48 | 3454453 Papasmurf
Papasmurf's picture

LCS here did a brisk business today even with high premiums. Folks were lined up with a thirty minute wait.  Most were buying except for one guy selling sofa leftovers to buy a pizza.  Inventory was thin but fresh allocated goods were arriving with more arriving daily.  Folks who weren't particular about scratches or newness could find something to own.  Interestingly, most in the store were Indian or Asians.  I think they understand money better than American born.

Mon, 04/15/2013 - 18:39 | 3453442 LynRobison
LynRobison's picture

Me too, but Apmex seems to be running out of Silver Eagles.

It's weird, when you suppress the price, you get scarcity. I would love see scarcity to the point that the Comex defaults.

Mon, 04/15/2013 - 18:43 | 3453489 LetThemEatRand
LetThemEatRand's picture

That's when they criminalize ownership.

Mon, 04/15/2013 - 18:48 | 3453504 TheCanadianAustrian
TheCanadianAustrian's picture

People were saying the same thing when Silver went down to $30 about a year and a half ago. "There's no supply at APMEX, they'll refuse to sell at that price."

Turned out not to be true. And if there is any supply shortage due to the low prices, it will be short lived.

The fact is that prices are low because institutional investors are willing to let go of their metals right now. I wish people would stop reading more into it than that.

Mon, 04/15/2013 - 18:58 | 3453543 LynRobison
LynRobison's picture

Umm, "any scarcity due to low prices will be short-lived"? How does that work? If the price of Hershey bars were artificially suppressed and held to 25 cents, the scarcity of Hershey bars would not be short-lived -- it would last as along as the price is suppressed. 

Also, your notion that "prices are low because institutional investors are willing to let go of their metals right now" is false. They are letting go of paper, not metal. 

Welcome to reality. 

Mon, 04/15/2013 - 19:04 | 3453596 Bay of Pigs
Bay of Pigs's picture

All reports are that physical demand is off the hook and very strong. Tulving is burning through his silver inventory rapidly. Almost all of it is gone.

Mon, 04/15/2013 - 20:00 | 3453845 mjk0259
mjk0259's picture

..and since no one has been unable to buy silver or gold in as large a quantity as they want , it follows by your reasoning that the prices are not suppressed to artificially low levels

Mon, 04/15/2013 - 22:27 | 3454656 LynRobison
LynRobison's picture

"No one has been unable to buy silver or gold in as large a quantity as they want"?!? Have you seen Apmex today? Try buying yourself a couple hundred 2012 or 2013 silver eagles. You won't be able to get them. So, what are you talking about?

Mon, 04/15/2013 - 19:47 | 3453778 Mine Is Bigger
Mine Is Bigger's picture

I think APMEX just raised premiums in the past 30 minutes or so.  (It's 7:45 p.m. EST now).

Mon, 04/15/2013 - 19:02 | 3453576 sotto
sotto's picture

Yeah, me too.  Btw, here's Peter Schiff on the whole gold and silver pullback:  http://globalgoldnews.com/2013/04/15/peter-schiff-this-is-the-last-great...

Mon, 04/15/2013 - 19:10 | 3453612 sotto
Mon, 04/15/2013 - 19:02 | 3453577 in4mayshun
in4mayshun's picture

@Temporis
"...Hope silver drops to $5 so I can get a whole lot more."

Wouldn't count on it. Everyone is sold out at $23.00

Mon, 04/15/2013 - 19:20 | 3453663 Gringo Viejo
Gringo Viejo's picture

Any thinking individual can see these metal takedowns are orchestrated at the highest government and financial levels.
So we have this massive, irrational 2 day smash of the PMs just prior to a terrorist bombing.
Too clever by half.

Mon, 04/15/2013 - 22:45 | 3454759 mayhem_korner
mayhem_korner's picture

 

 

I'm not sure about any link with the terrorist bombing, but to me the PM smackdown is a pre-cursor to a much bigger move in the markets.  Sorta like 2008 redux, but the TBTF banks got their liquidity pumped up pre-emptively by easing their short positions.  I think this is a long way from being over, and gold might just be standing as the "winner" at 1,200 in a month or so.

No matter, my stack stays put.  Pretty sure it's going to be the most valuable (worldly) thing I have over the next 5-10 years.

Mon, 04/15/2013 - 23:56 | 3454985 Vlad Tepid
Vlad Tepid's picture

Nobody's sure about anything, but I wonder what the mathematical probablility of the largest colllapse of gold prices in 30 years happening on the same day as the most spectacular (if not most deadly) terrorist attack on US soil since 9/11 is.  Care to crunch those numbers?  It seems fantastically improbable to me.  Fantastically.

Mon, 04/15/2013 - 23:38 | 3454941 bagehot99
bagehot99's picture

Bullish. Go long. Everything. At all times.

Yours, Bern Benanke, Freelance Economics contributor, The Daily Bailout.

Tue, 04/16/2013 - 00:05 | 3454981 Two Towers AU AG
Two Towers AU AG's picture

Does the big drop in precious metals and other trading products have to do anything with the news of a 2nd case found in China where a child affected with bird Flu who is showing no symptoms.. this can get a bit tricky .. since now we do not know how many of the 1.1 billion people in that country could be affected and not show any symptoms :( :(

If more such news keeps coming on TV then I might also consider keeping some money under the mattress... so whats to say for big corporations..

THOUGHTS ANYONE

 

http://news.yahoo.com/case-china-adds-unknowns-bird-flu-135156073.html

Mon, 04/15/2013 - 18:33 | 3453389 Yellowhoard
Yellowhoard's picture

Holy fuckbomb.

Mon, 04/15/2013 - 18:35 | 3453399 slaughterer
slaughterer's picture

There are many small spec shorts that will have to cover part of their shorts now.  This margin hike will play out bullish.  

Mon, 04/15/2013 - 19:16 | 3453649 fattail
fattail's picture

Somehow I doubt the small spec  shorts benfitted from this in any measurable way.  JPM on the other hand likely did, and this selll off will only enhance their ability to maintain their suppression strategy. 

Mon, 04/15/2013 - 19:54 | 3453800 fonzannoon
fonzannoon's picture

That's where I lose the script. Is this king world news stuff ever going to add up to a delivery default and send physical skyrocketing or is JPM laughing their ass off and clamping down more?

Mon, 04/15/2013 - 18:38 | 3453402 Manthong
Manthong's picture

It's not real metal, so what's the big deal?

But LOL.. cheap to get in on the downside, expensive to get in on the upside.

You don't have to be Felini to get this script.

Mon, 04/15/2013 - 18:33 | 3453403 devo
devo's picture

If I had dry powder I'd be excited, but as is, I am not.

Mon, 04/15/2013 - 18:34 | 3453405 Kiss My Iceland...
Kiss My Icelandic Ass's picture

once China wakes up and looks at overnight PM prices in horror...

 

"The horror ... the horror !"

 

Mon, 04/15/2013 - 18:37 | 3453416 TheGermanGuy
TheGermanGuy's picture

love me some Colonl Kurtz while drunk!

Mon, 04/15/2013 - 18:42 | 3453481 Kiss My Iceland...
Kiss My Icelandic Ass's picture

I love the smell of blood in the streets in the morning :)

Mon, 04/15/2013 - 18:34 | 3453410 achmachat
achmachat's picture

as always... 

cui bono

 

Mon, 04/15/2013 - 18:36 | 3453419 Kiss My Iceland...
Kiss My Icelandic Ass's picture

Cherchez la femme !

Mon, 04/15/2013 - 20:04 | 3453855 Fredo Corleone
Fredo Corleone's picture

Ah, yes.

Dr. Buzzard's Original Savannah Band...Number 1, Billboard Club Play Chart; August, 1976.

Se si bon...

http://www.youtube.com/watch?v=4CK-f-Hhij4&sns=em

Mon, 04/15/2013 - 20:12 | 3453896 Richard III
Richard III's picture

That brought back some club memories.

+100, Fredo.

Mon, 04/15/2013 - 18:39 | 3453441 Midas
Midas's picture

Is that Lennon?

Mon, 04/15/2013 - 21:32 | 3454349 rayduh4life
rayduh4life's picture

Generally I'd agree with you however this time around I believe it's pronounced: cui prodest scelus is fecit!

Mon, 04/15/2013 - 18:36 | 3453414 ghandi
ghandi's picture

Anybody make money on GLL?

 

Mon, 04/15/2013 - 18:35 | 3453420 Zola
Zola's picture

CHinese don't care, they buy for delivery

Mon, 04/15/2013 - 18:56 | 3453440 Kiss My Iceland...
Kiss My Icelandic Ass's picture

... and with six you get eggroll !

Mon, 04/15/2013 - 18:37 | 3453423 Cacete de Ouro
Cacete de Ouro's picture

Bart Chilton : missing in action
Gary Gersler : just missing

Mon, 04/15/2013 - 18:41 | 3453463 Bastiat
Bastiat's picture

missing: inaction

Mon, 04/15/2013 - 18:38 | 3453428 Bastiat
Bastiat's picture

I used to think the shorts would get theirs but I no longer believe it. They own the house and the house never loses.  When (or "if" because nothing seems certain now) the big move comes in gold, the TBTFs/bullion bank shorts will be covered.  They will not lose. 

Mon, 04/15/2013 - 18:43 | 3453493 nmewn
nmewn's picture

You can't win playing their paper game, they have a printing press and can lever the counterfeit it spews out...just take delivery.

Mon, 04/15/2013 - 19:55 | 3453804 Bastiat
Bastiat's picture

 

Oh I know--after some years, I quite trading CME a few years back.   Now I hold accumulate and wait.  But this is beyond what I expected, frankly.  I have this weakness for trying to put a picture that makes sense.  I keep going back to Sinclair--he's been saying for years that it will take the final launch when the bullion banks are all covered and net long  It makes sense.

Why would they bother?  If there's to be a new currency, why must it be gold backed?  Maybe because the real powers behind the scenes already have most of the gold? 

Mon, 04/15/2013 - 20:00 | 3453843 seek
seek's picture

Trust. The people don't trust the governments, and the governments/central banks/TPTB don't trust each other.

Due to gold's unique lack of a counterparty, trust is implicit as long as it's not stored at the NY Fed.

I'm sure the real powers have the most gold, but it goes beyond that. They'd much prefer to operate without the restrictions and accountability imposed by gold. I'd expect whatever comes next to have some gaping holes that lets them play fiat games, maybe a two-tiered currency, one for the proles, one for TPTB.

Mon, 04/15/2013 - 20:17 | 3453916 Bastiat
Bastiat's picture

Trust or (dis-) makes sense to me: that's why they have (or pretend to have) 8K+ tons of the barbarous tradition.

Mon, 04/15/2013 - 18:37 | 3453429 AL_SWEARENGEN
AL_SWEARENGEN's picture

CME COCKSUCKERS!!

Mon, 04/15/2013 - 18:39 | 3453443 SHEEPFUKKER
SHEEPFUKKER's picture

Isn't the next play in the book to pre-announce 5 other AU/AG margin hikes forthcoming and then lower ES margins to zero?

Mon, 04/15/2013 - 18:38 | 3453433 lolmao500
lolmao500's picture

Put the margins at 100%. Don't have the money? Fark you!

Mon, 04/15/2013 - 20:46 | 3454053 agent default
agent default's picture

They don't have the metal.

Mon, 04/15/2013 - 18:38 | 3453446 Sudden Debt
Sudden Debt's picture

And it's all gone...

silver at 10$ will turn it into silvervapor...

this is just evil that the west let's the FED cartel steal and sell the PM's to Azia for their bribes...

this shit is criminal but as they write the laws... we're the criminals...

Mon, 04/15/2013 - 18:53 | 3453538 Bay of Pigs
Bay of Pigs's picture

This fellow says its over right now. End Game has arrived.

http://blog.milesfranklin.com/force-majeure-was-the-end-game-all-along

 

Mon, 04/15/2013 - 19:57 | 3453818 gwar5
gwar5's picture

It's what's for dinner...  I think they ought to Force Majeure the shit out of Derivatives and just zero them out. That's supposed to happen anyway (but it won't).

 

This has already been suggested by some economists who know more than me, which is next to nil. But it would eliminate a lot of fear and leverage banks have over the rest of us, not to mention help prevent the subordination of helpless depositors.

It would just be too fucking bad for any squids out there with a vested interest in the Apocalyptic collapse of civil society. 

Mon, 04/15/2013 - 21:37 | 3454371 rayduh4life
rayduh4life's picture

The trick is to write the rules in such a way as they don't apply to yourself.  ~  John Corleonizine.

Mon, 04/15/2013 - 18:38 | 3453447 Mentaliusanything
Mentaliusanything's picture

Who is John Paulson?

Have you no feelings!

Mon, 04/15/2013 - 18:38 | 3453449 withnmeans
withnmeans's picture

Not sure that it will drop to $5, I don't foresee it going that far down. Your right though, always try and increase your stack, heck, when you have a pile and you get old, give some to your grand kids. We know they won't have any social security, the way it looks, we may not have it either.

Good Day

Mon, 04/15/2013 - 18:46 | 3453503 LetThemEatRand
LetThemEatRand's picture

"we may not have it either."

I would say that you're being an optimist to say "may."

Mon, 04/15/2013 - 19:00 | 3453570 withnmeans
withnmeans's picture

Understood Sir, however I have to have something to stay optimistic about. Everything else is all pessimism.

 

Get ready to BUY friends, we will be back in the game soon.

Mon, 04/15/2013 - 18:41 | 3453460 Sudden Debt
Sudden Debt's picture

and at 100% there's noreason to buy the worthless paper anymore...

the higher e margins the lower the price.
the lower the price the lower the supply.

demand and supply might not work these days untill everybody wants to buy a roll.

Mon, 04/15/2013 - 18:42 | 3453473 Hannibal
Hannibal's picture

We're talking fake paper gold-silver right?

Mon, 04/15/2013 - 18:42 | 3453478 More_sellers_th...
More_sellers_than_buyers's picture

Is tungsten on sale too?

 

Mon, 04/15/2013 - 18:43 | 3453479 ebworthen
ebworthen's picture

So where are the markets again?

Margins, liquidity, puts and calls, HFT, algos, QE, bailouts - all a part of the same disease - making sure the banksters and corporatocracy don't have to deal with the invisible hand of individuals making choices - so they can use sleight of hand.

Mon, 04/15/2013 - 18:48 | 3453510 dick cheneys ghost
Mon, 04/15/2013 - 20:14 | 3453906 gwar5
gwar5's picture

Agree, it's all been happening slowly... but now much faster.

 

I think that's why US has been pandering to the Muslim Brotherhood (BHO aside) and why Benghazi was 'a bump in the road'. MB is a Sword of Damacles held over heads of the House of Saud, as we tell them only the US can protect them to keep them in line. But I don't think it will matter much longer.

Tue, 04/16/2013 - 00:00 | 3454993 Vlad Tepid
Vlad Tepid's picture

If the checkers-playing morons in DC have sunk that low to actually think they can THREATEN the Saudis, then we are really and truly fucked.  Not that I'm saying that kind of idiocy is past them.

Mon, 04/15/2013 - 18:48 | 3453512 ebworthen
ebworthen's picture

Somewhat O.T. - but the damn over spot on Silver is running ~10%, frickin' crazy!

Mon, 04/15/2013 - 19:04 | 3453527 Yen Cross
Yen Cross's picture
                                                                                                                                             

01:30       GBP             Core CPI (YoY)           2.3%     2.3%      
01:30       GBP             CPI (YoY)           2.8%     2.8%      
01:30       GBP             CPI (MoM)           0.4%     0.7%      
01:30       GBP             House Price Index (YoY)           2.8%         
01:30       GBP             PPI Input (YoY)           0.8%     2.5%      
01:30       GBP             PPI Input (MoM)           -0.2%     3.2%      
01:30       GBP             PPI Output (YoY)           2.0%     2.3%      
01:30       GBP             PPI Output (MoM)           0.3%     0.8%      
01:30       GBP             RPI (YoY)           3.3%     3.2%      

Mon, 04/15/2013 - 19:28 | 3453516 10044
10044's picture

moving on to the 100% margin i.e. cash i.e. physical...my American dream is coming true

Mon, 04/15/2013 - 19:08 | 3453550 Kirk2NCC1701
Kirk2NCC1701's picture

I still find it hard to believe that the PM prices have 'tanked' by 1/3 since last Aug., i.e. before we had QE2, QE3, etc.

If you can't rely on all these Gold & Silver "experts" and "advocates" here on ZH, who can you rely on?  Krugman?  He asks with a great sense of irony.  Realizing with a sense of horror, that "Dr. Evil" was right, incredible as it seems, when he said it was "a bubble".

And don't give me any of that "unrealized" loss crap.  "Opportunity Cost" is Opportunity Cost.  If I had to liquidate today, I'd have lost 1/3.  How long before it breaks even?  Not to mention the lost potential for gains elsewhere?

So... how is Gold a fucking "STORE OF VALUE"!? Esp. when it  can go even lower!?  MFers!!!

Shall I apply the sailboat/yacht principle, and throw more money at it?  Like the guy who posted earlier today, that he kept buying all the way down on BTFD, until he now has no more left to buy?  /s

If I can't trust TPTB/Krugman, and I can't trust ZH and its Gold_Shills, then I have no choice but to proceed on... Principle:  DIVERSIFY!  Diversify according to asset class, size and geography!  And fuck these 'opinions' of smooth-talking Gold_shills!  Onshore and offshore.

I'm half-tempted to downgrade ZH to a financial tabloid rag.  Scotty, what's taking you so damn long to fire up those photon torpedoes!?  [Miffed!]

Mon, 04/15/2013 - 19:10 | 3453618 in4mayshun
in4mayshun's picture

So quit bitching, sell your metal and buy the SPX. I'm sure it will work out great for you.

Mon, 04/15/2013 - 19:14 | 3453630 BigJim
BigJim's picture

  ...If I can't trust TPTB/Krugman, and I can't trust ZH and its Gold_Shills

Who told you you could trust anyone?

And, more to the point - why did you trust them?

Mon, 04/15/2013 - 19:40 | 3453741 alien-IQ
alien-IQ's picture

"So... how is Gold a fucking "STORE OF VALUE"!? Esp. when it can go even lower!? MFers!!!"

That comment implies such a profound lack of understand for the concept of "store of value" that it really does not deserve an answer...but I'll toss one at you anyways: You may or may not have noticed that, not only did gold and silver drop in price...but so did everything else (gas, wheat, corn, coffee, etc etc etc). If you put pen to paper with a little assistance from a calculator, you will find that an ounce of gold or silver will buy you pretty much the same amount of anything today as it did last week and will continue to do so in the future. How am I so sure of this, you may be asking yourself? Simple: I have 5 thousand years of evidence to back this "theory". Hence, the purchasing power of your gold or silver has held up...and THAT is why it's use as a way to "store value". It preserves your purchasing power.

Do you get it now or would you like a more elementary explanation?

Mon, 04/15/2013 - 20:01 | 3453842 Crimedog
Crimedog's picture

Great, you can still buy the same amount of wheat as you as could last week with an ounce of gold.  Too bad no one will accept gold or silver as payment!  The "store of value" concept should be used when comparing gold/silver to USD.  Guess what - your ounce of gold buys less dollars than it did last week.  And, to make matters worse, those same dollars will buy more wheat/corn/coffee etc. as the price of those commodities plummet and the USD holds steady.  In the very long run, maybe you can find some merit to your argument, but the price action in the last 2 days is NOT supporting your gold/silver = "store of value" thesis.

Mon, 04/15/2013 - 20:12 | 3453899 BigJim
BigJim's picture

 ...but the price action in the last 2 days is NOT supporting your gold/silver = "store of value" thesis.

well price action to the downside for just 2 days certainly doesn't add credence to your thesis, either.

The USD may be up against everything else, but given the loss of its purchasing power over the last decade, it looks pretty likely that gain will be pretty short lived in the 3 - 8 year time frame.

And if you're looking to 'trade' in shorter time periods than that, I suggest you should be looking for trading opportunities - not stores of value.

 

Mon, 04/15/2013 - 21:09 | 3454203 alien-IQ
alien-IQ's picture

"The "store of value" concept should be used when comparing gold/silver to USD."

Congratulations, you have achieved "Full Retard"status with that comment.

How fuckin old are you? 12?

Tue, 04/16/2013 - 04:34 | 3455289 WAMO556
WAMO556's picture

You should have said: How old are you, are you TWO!

I have some pretty astute 12 year olds who can probably outshoot you, run trap lines and have field craft skills par none.

Rethink, retract and then repost!

Tue, 04/16/2013 - 07:51 | 3455492 samcontrol
samcontrol's picture

you go ahead and tell people what to post.... dildo.

Mon, 04/15/2013 - 22:42 | 3454743 n8dawg84
n8dawg84's picture

2 days is crap when you're buying gold to preserve purchasing power for as long as decades, or centuries (if you are lucky enough to reproduce and impart a knowledge of value to your offspring).

 

Seriously, if you're into metals looking for profit then you must either be one nimble MFer or you're a weak hand

Tue, 04/16/2013 - 04:55 | 3455304 silvermail
silvermail's picture

You are right the last two days, bravo! But am I right in 13 years. You should carefully study the history section, which is called "All history collapses of the world stock markets." You have to hurry, otherwise you will be excruciatingly painful to realize their own ignorance.

Mon, 04/15/2013 - 20:10 | 3453891 PhilofOz
PhilofOz's picture

Relax. I'm down over 10% of my total wealth since last Thursday, yet there is a calm inside me I'm not used to. I'd be running around like a headless chicken if this happened in other circumstances yet other than annoyed I could have a lot more at todays prices (if I could get it close to spot even), it does not matter for me, I know that I've done the right thing sitting on my stack. It's going nowhere and it will be what saves my family from some very bad time in the not to distant future. 

All I want to figure out is at what entry point I should start buying au/ag phyz once more to add to my stack. 

Tue, 04/16/2013 - 10:30 | 3456106 e-recep
e-recep's picture

this is what owning gold is like. you never jump off buildings, that's what owners of stawks and similar paper products do.

Mon, 04/15/2013 - 20:44 | 3454042 macroeconomist
macroeconomist's picture

The problem is that both Krugman and zerohedge are wrong for different reasons, and the truth follows a completely different path. Contributors to zerohedge and friendly websites believe in Austrian economics and just like their peers, altough they have a perfect (and much better than me or most others on this blog) understanding of the functioning of financial markets, the theory they stand on is entirely wrong, and therefore their predictions on a lot of matters prove to be wrong. And it is reay funny to watch their contradictions from one post to another. Just look at today's posts. There's a very nice post on Japanese monetary policy since 1990s and how massive quantitative easing and debt-monetiziation was not able to prevent deflation for over 20 years in Japan. And then consider all the fear-mongering posts on zerohedge about the forthcoming inflation to U.S, and how a 0.5% increase in inflation becomes "the first signs of hyperinflation coming to U.S" in here, despite numerous posts by other Tylers show de-leveraging going on at full speed in the private sector. Now, as they know very well as well, there cannot be any inflation, regardless of huge budget deficits or monetization of public debt or quantitative easing, when there's such a massive de-leveraging going on. But accepting this is completely against their "Austrian" economics' arguments, so although they see what is happening, they are trying to see what they want to see. Their theory that printing money leads to inflation has been falsified as a general rule by Japan first, and by the entire developed world after 2008 (although it might lead to inflation under certain conditions). Now it is time to discard those simplistic theories and relationships, but that is so hard to do...

With regards to gold, there are many different factors at work, and sadly zerohedge's bias towards Austrian economics and its inability to present a coherent structural analysis prevents it to come up with an unbiased prediction. And the posts on gold in zerohedge are terribly biased due to Austrian economists' love in the gold standard. Adherence to the completely-mistaken Austrian economics makes them believe inflation must show its head at some point and therefore gold must go up. However, as many posts here have also argued, gold has not been going up because of inflationary pressures, it is going up because 

1) Traders, economists, money managers, who are trained in mainstream economics and therefore poisoned with the fear-mongering that printing money will lead to inflation, allocate some leveraged funds to speculating in paper gold-markets, pushing the price of paper gold up. So it is not printing money per se leading to an increase in the price of gold.

2) There's strong physical demand since 2009, especially when confidence to currencies drops.

3) COMEX connects the price of paper gold to the price of physical gold, so price is determined by the relative strengths of the two forces above. (there are premiums on paper price if you want to buy gold in the west, but not in turkey for example. You can purchase as much gold as you want at the paper price) However, this creates perfect opportunites to smack down the price of physical gold by naked short selling in paper markets, as has been said zillions of times here.

So you might be investing purely long-term and believe that the paper markets will at some point default and et completely disconnect from the price of physical. This is the position a lot of people take in this blog. In such a case, such drops in paper price should not bother you. But you might also believe this is a stupid theory and such a thing will not happen in the medium run, which might be what you care about. Then, gold is like any other asset for you, open to speculation, and much more prone to manipulation due to the shallowness of the markets, and the hatred of the regulators against the barbaric relic, which removes all incentives to regulate and prevent manipulation, if not creating incentives for the regulators themselves to manipulate the gold market to restore faith in currencies. If you believe this, then why are you invested in gold? Just put your money in bonds and stocks, and do not fight the central banks in the short run.

 

Krugman (and the rest of the academics) is clueless, he's just like a broken clock, do not even listen to him. He believes in fantasies like IS-LM curves, liquidity traps and thinks banks need savings to lend. Just ignore. 

 

Tue, 04/16/2013 - 05:10 | 3455309 silvermail
silvermail's picture

You have to leave the computer. You have to go to the supermarket for food and look at the real inflation. Compare graphs of rising gold prices and the growth of the money supply.
I just want you to be yourself could see and understand, all the absurdity of your claims about the gold.

Tue, 04/16/2013 - 11:14 | 3456312 macroeconomist
macroeconomist's picture

You have to learn the definition of inflation. You have to learn the definition of hyperinflation. You have to learn the definition of asset price deflation. You have to live through real inflation (25%+ annual). You have to read Japanese economic history. You have to learn why gold prices is not related to money supply any more. You have to learn what gold standard is. You have to learn when gold standard was abolished. You have to learn the definition of money supply. You have to do so many things more before you can speak about gold...Let me know when you have done all these, then we will speak.

And remember, these will take much more time than typing helicopter Ben, zimbabwe, hyperinflation and gold in the same sentence like all the parrots on this blog..

Mon, 04/15/2013 - 20:48 | 3454061 YC2
YC2's picture

Lol dude take responsibility for yourself. Sorry the Internet couldn't satisfy your need to be given meaning and direction. Feel free to "downgrade" me, because I am a man and not a website or ideology or screen name.

Mon, 04/15/2013 - 18:58 | 3453554 gimli
gimli's picture

Bart Chilton missing ...... possibly playing Mahjong with Kim Jong Un

Mon, 04/15/2013 - 19:08 | 3453560 Zer0head
Zer0head's picture

my guess is that if a "word cloud" of the MSM newscasts were done

the words DOMESTIC TERRORISM would loom large followed by shrapnel and children

 

Today is Monday by late tomorrow Patriot Day and some American Born individual will have his image circulated from a grainy cctv recording followed by his identity and facebook rants being released  

Mon, 04/15/2013 - 19:01 | 3453568 Petrus Romanus
Petrus Romanus's picture

And, market futures are up? The affect of Boston seems to be rally around the hedge funds and bankers. WTF!

Mon, 04/15/2013 - 19:01 | 3453575 gimli
gimli's picture

Everything planned and unplanned is good for the market, until it's not.

Mon, 04/15/2013 - 19:12 | 3453621 razorthin
razorthin's picture

It's over for US equity markets too, even if cnbs doesn't know it yet.  Use any strength to initiate or add to shorts if ye have dry fiat powder.

Mon, 04/15/2013 - 19:02 | 3453580 Racer
Racer's picture

Horror? I think the Chinese will be delighted to grab even more cheap gold ..... were they the buyers to the sellers/shorters?!

Mon, 04/15/2013 - 19:04 | 3453593 Catullus
Catullus's picture

Seems that if anyone was long at this point and would close a position because of a 18% hike was probably a weak hand anyway.

Mon, 04/15/2013 - 19:13 | 3453620 Son of Loki
Son of Loki's picture

Bashing commodities and destroying investors is always a good plan to stimulate the economy....lol...

...should be bullish for house prices also when fewer and fewer can't even cough up 3.5% down payment.

 

The last St Louis Fed chart for inflation protectiong securities is one of the scariest charts I have ever seen. As some other ZH'ers have said, "we are heading into a deflaitonary sh*tstorm."

 

Watch unemployment, bankruptcies, etc skyrocket next few quarters. Watch the Real GDP crash to -5% or lower.

Mon, 04/15/2013 - 19:13 | 3453626 Crimedog
Crimedog's picture

Enough with all the crap about how everyone here is happy with the price drop so that they can "stack" more.  You all thought that silver and gold were going "to the moon" and it didn't.  All of the metals blogs you follow, ZH included, told you to keep adding at the peak prices because it could never go down.  Not once did anyone preach caution or maybe a little profit-taking.  Yet, one of your idols Eric Sprott has been selling tons of PSLV prior to this latest bloodbath.  Charitable obligations?  I call bs.  He knew what was coming, and did some prudent selling.  Too bad he didn't provide fair warning.

Mon, 04/15/2013 - 19:32 | 3453723 Catullus
Catullus's picture

The sign is to wait for these so-called stackers to give up and cry uncle.  They don't have an unlimited source of funds.

Mon, 04/15/2013 - 20:31 | 3453981 gwar5
gwar5's picture

Patience ain't just a PM in the ER. 

Mon, 04/15/2013 - 20:13 | 3453903 YHC-FTSE
YHC-FTSE's picture

Okay, I'll bite.

Are you fucking stupid? Anyone who is "stacking" at ZH is not talking about earning a fucking income from price speculation. They are talking about safeguarding the value of their wealth incase of a calamity. Therefore, a drop in prices is another reason to stack more. You may ask, Is a complete collapse of the financial system/FRN even possible? That's a smart question. The jury is out, but many including myself believe it is. They don't call us "Doomers" for nothing, doncha know.

Mon, 04/15/2013 - 20:36 | 3454002 Crimedog
Crimedog's picture

That's bullshit.  There are tons of older people, mostly of the tea party variety, who lost a lot of money in their 401ks during the 08 crisis and have spent the past few years trying to make that money back so that they can retire in comfort.  However, being the untrustworthy folk that they are, they have turned to gold and silver instead of the stock market casino, and have done well for themselves.  But, a massive gold/silver sell-off now will wipe them clean yet again.  I guarantee you that the majority of these people are not planning for a complete collapse of the system that you "doomers" are preparing for.  And why should they - who wants to live their lives and waste resources preparing for an event that is HIGHLY unlikely?  Further, in your collapse scenario, what the fuck is gold going to be good for??  I would much rather have guns/ammo than gold if that was the case.

Mon, 04/15/2013 - 21:21 | 3454289 YHC-FTSE
YHC-FTSE's picture

It all depends on the individual why they are hedging against the fiat world with gold, and what they expect of the world should there be a financial collapse. Believe me, its been talked to death at zh. Some do it because gold has ALWAYS been valuable throughout human history.  Some expect to croak soon and want to leave a legacy. Some, like me, expect a period of chaos, hyperinflation,  followed by a weaker but stable economy with growth potential. A period that gives great advantage to anyone with solid assets, like gold.

Sure guns and ammo are good ideas if you intend to fight people or deter them from fighting you. But you will see that "Doomers" also consider food sources, clean water, and medicine as well as security. History, and very recent history at that, have much to teach us. This amount of printing, debt, and economic malaise is unsustainable. The "It can't happen here" crowd always suffer the most, hence the hedge. We are merely being realistic with the facts we can verify with our own eyes.

Tue, 04/16/2013 - 05:16 | 3455316 silvermail
silvermail's picture

You can guarantee that after a year gold will not be $ 3000? But who are you? Are you a prophet or a clown?

Mon, 04/15/2013 - 20:26 | 3453959 gwar5
gwar5's picture

It's not about 'investment' per se.

 

It's about preserving the purchasing power of a life's work of labor for some, and hedging against disaster for others. The entire world is broke and anyone who thinks they will be slumdog millionaires and remain unscathed after the SHTF is hoping for an awful lot.

After a boom there's always a bust. Protect the boom. Then wait patiently for the next boom.

Mon, 04/15/2013 - 19:12 | 3453627 vincent
vincent's picture

Don't many small specs have short positions too?  More liquidation?

The Racketeers will just stand on the 1st floor, catch the falling metal, and toss it in the laundry shoot.

I think Andy and Holter both see it this way.

 

Mon, 04/15/2013 - 19:13 | 3453633 Moe Howard
Moe Howard's picture

Fuck the chinese. Now there is some horror for  you, bitchez.

Mon, 04/15/2013 - 19:16 | 3453643 NEOSERF
NEOSERF's picture

you have no idea what your PM price really is--CME

Mon, 04/15/2013 - 19:20 | 3453665 acompletedouche
acompletedouche's picture

Gold permabulls are as dumb as stock permabulls. They all think "fundamentals" actually matter.

EVERY parabolic chart implodes eventually,and any asset is only worth what the next guy is willling to pay,gold and silver is no exception...... 2 years of bulls wiped out in a few days.

I would assume we could see selling pressure for quite awhile.

 

 

Mon, 04/15/2013 - 19:24 | 3453679 razorthin
razorthin's picture

You are correct.  Only technicals really matter.  That said, SPX broke Nov 2012 trend support on heavy volume.  And the Russell has been fucked for weeks.

Enjoy the show.

Mon, 04/15/2013 - 19:49 | 3453785 Croesus
Croesus's picture

Only ownership and perception matter.

You boys look at Gold like any other stock you'd throw a dart at. Buy it low, sit on it until you're in the green, sell it, and lather-rinse-repeat.

I don't really classify myself as a "Gold permabull". What I do look at, is the fact that there are very few assets of any kind, that can be held for long periods of time without much risk of loss.

For me, Gold fits the bill just fine, and offers many rewards that paper does not. Possession is 9/10th's of the law.

 

 

Mon, 04/15/2013 - 20:56 | 3454122 mick_richfield
mick_richfield's picture

Technicals are meaningless in a world where some men can create any amount of fake money that they wish.

If you're watching the charts, reality is sneaking up behind you.

Mon, 04/15/2013 - 19:42 | 3453748 gwar5
gwar5's picture

I don't know....

 

I think the train is leaving the station and the fundamentals are finally taking over -- which is exactly what is causing the Western banksters to freak out. If everything is under control, and fundamentals don't matter, then there's no Cyprus, no Japan, and no China carting off 800 tonnes of physical gold since January.

I don't think "Dollar Exclusion Zone" means what Ben Bernanke thinks it means.

Mon, 04/15/2013 - 19:58 | 3453826 rich_wicks
rich_wicks's picture

Gold permabulls are as dumb as stock permabulls. They all think "fundamentals" actually matter.

Supply matters.  There is 8 trillion dollars of gold, in all the world currently, at current market prices.

That is how much the US debt will go up, in 4 years, if it continues it's 41 year pattern, of going up, on average, at 9.4% a year.

It doesn't take a rocket scientist to see this is going to blow up, when tax revenue is now less than 15% of our debt, and dropping.

Tue, 04/16/2013 - 06:09 | 3455348 silvermail
silvermail's picture

Gold - is not an asset. Gold - it's money in their highest form.

Mon, 04/15/2013 - 19:23 | 3453676 Yen Cross
Yen Cross's picture

  F/X spreads are really wide. aud/usd should be 1.5pips. usd/jpy should be just over one pip 1.1-1.4. The crosses are even moar crazy? Even EBS is wide.

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