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Shanghai Gold Exchange To Hike Gold, Silver Margins

Tyler Durden's picture





 

Adding insult to injury, the Shanghai Gold Exchange overnight announced that following the tumbling precious metal prices and limit down drop in early trading, it may raise trading margins for its gold and silver forward contracts. The SGE announced that should prices not recover by the end of the trading day (which they didn't), trading margins for the gold forward contract will be raised to 12 percent, while margins for the silver forward contract will be hiked to 15 percent, the exchange said in a statement on its website. Curiously, gold prices in China were up in early trading only to take a dramatic U-turn on Monday, reversing early gains to drop to a two-year trough once the Japanese pre-margining onslaught was unleashed on the market.

From the SGE (translated)

 


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Mon, 04/15/2013 - 07:45 | Link to Comment goldenbuddha454
goldenbuddha454's picture

cme next?

Mon, 04/15/2013 - 07:47 | Link to Comment Dear Infinity
Dear Infinity's picture

Let them bring it -- the paper pushers are raining havoc on physical premiums, last I checked @ www.comparesilverprices.com the average premium on 90% junk is in the ballpark 13% range -- unheard of

Mon, 04/15/2013 - 07:48 | Link to Comment Rubicon
Rubicon's picture

Meanwhile in Cyprus... http://img.ly/tx0F

Mon, 04/15/2013 - 07:51 | Link to Comment gold-is-not-dead
gold-is-not-dead's picture

shortage and price drop at the same time, welcome to disneyland!

Mon, 04/15/2013 - 07:54 | Link to Comment BoNeSxxx
BoNeSxxx's picture

It's all Greek to me...

Mon, 04/15/2013 - 09:18 | Link to Comment Harlequin001
Harlequin001's picture

at this rate all the sellers will soon be gone.

And then we start the next up leg with nothing but buyers...

Mon, 04/15/2013 - 07:56 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Margin call.....and we don't take stawks bitchez.

Mon, 04/15/2013 - 08:00 | Link to Comment carlsbro
carlsbro's picture

Dow 16,000. Gold 850. Go ZH!!!!! ROFL!!!!

Buy phizz buy phyzz buy phyzz. LMAO!!!!!

Mon, 04/15/2013 - 08:06 | Link to Comment TeamDepends
TeamDepends's picture

We'll see who laughs last, non?

Mon, 04/15/2013 - 08:14 | Link to Comment JonNadler
JonNadler's picture

those who own phyzz don't get margin calls, they just take advantage of the lower prices. If you're not stacking at this point, you're a  (fill in favorite pejorative term)

Mon, 04/15/2013 - 08:22 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

This looks like a parabolic move to the downside.  We all know how parabolic moves to the upside end....

Mon, 04/15/2013 - 08:40 | Link to Comment gold-is-not-dead
gold-is-not-dead's picture

here's a silly projection inline with the current craziness, XAUUSD = $3000 by the end of may

Mon, 04/15/2013 - 08:40 | Link to Comment TeamDepends
TeamDepends's picture

You look like that Princeton dude...

Mon, 04/15/2013 - 09:24 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

"Douche" only has one d. 

Mon, 04/15/2013 - 08:51 | Link to Comment hankwil74
hankwil74's picture

I would stack, but I've listened to you and every other ZH poster and BTFD at $1800, $1750, $1680, $1625, $1560, and $1500.  No more fiat left to turn into gold.

Mon, 04/15/2013 - 09:01 | Link to Comment TeamDepends
TeamDepends's picture

Then you are sitting pretty.  Cheers!

Mon, 04/15/2013 - 09:17 | Link to Comment teahouse
teahouse's picture

There is only one dip...that's the one you want to buy...

Mon, 04/15/2013 - 11:34 | Link to Comment thisandthat
thisandthat's picture

The zillion dollar question: when's a dip a dip and when it's not? Problem with dips is if you're aiming for the perfect one, you'll probably end up missing your shot, so what's a guy to do but take a shot in the dark and stick to your guns then?

Mon, 04/15/2013 - 08:13 | Link to Comment Jayda1850
Jayda1850's picture

That scenario sounds awfully familiar to 2008, and we all know how well that went. but hey... maybe this time is different.

Mon, 04/15/2013 - 08:14 | Link to Comment smlbizman
Mon, 04/15/2013 - 08:29 | Link to Comment hankwil74
hankwil74's picture

Is there an anti-ZH ETF out there I can invest in?

Mon, 04/15/2013 - 08:30 | Link to Comment fonzannoon
fonzannoon's picture

SPY

Mon, 04/15/2013 - 09:09 | Link to Comment pods
pods's picture

Just buy some more FB shares Copper Top.

pods

Mon, 04/15/2013 - 10:31 | Link to Comment TeamDepends
TeamDepends's picture

Sure!  Send a check to TeamDepends @ Disneyland...

Mon, 04/15/2013 - 17:44 | Link to Comment auric1234
auric1234's picture

GLD

 

Mon, 04/15/2013 - 08:11 | Link to Comment agent default
agent default's picture

Welcome to the magic world of central banking.  Enjoy the ride while it still lasts.

Mon, 04/15/2013 - 07:52 | Link to Comment CompassionateFascist
CompassionateFascist's picture

Let 'em eliminate margin altogether. It won't matter. Just keep converting debtbux to physical. Those suckers in ETF's/COMEX. Trapped in a paper Ponzi nightmare from which they cannot escape. 

Mon, 04/15/2013 - 08:14 | Link to Comment agent default
agent default's picture

"Let 'em eliminate margin altogether.

Let me tell you something, if I pay you cash, I expect on the spot delivery, and it better be polished.  You turn COMEX to a cash market instead of the leveraged paper trade bucketshop it is today, reserves will be depleted within seconds.  Not happening.

Mon, 04/15/2013 - 09:08 | Link to Comment CompassionateFascist
CompassionateFascist's picture

Soon "they" will have no choice in the matter. The guywires holding up the paper ponzi are trembling violently. 

Mon, 04/15/2013 - 07:57 | Link to Comment Killtruck
Killtruck's picture

Dump and hike all you want, you fuckers. You're not going to stop me. I've already won.

Mon, 04/15/2013 - 09:05 | Link to Comment seek
seek's picture

If we hypothesize that this is being done to save JPM or maximize the take from small sovereigns, then yes, CME will be next.

But doing so will lower prices, which will blow up the CME.

So either the COMEX blows up or there's a part 2 here, which somehow allows COMEX to avoid delivery without anything resembling a default.

The other thing that occurred to me -- this is a bit out in left field -- is that the US and China have been in emergency talks about North Korea. What if a deal was made, and part of that deal was China not grabbing physical during this event, or not balking on failures to deliver?

 

Mon, 04/15/2013 - 09:15 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

Who defines delivery? Who defines default?  Who can change the rules?  If you disagree what is your course of action?

Markets are desirable as long as they function as desired by TPTB.  When they don't, TPTB will adjust them or end them as needed.

The market is not going to save you, if TPTB want you.

Mon, 04/15/2013 - 09:24 | Link to Comment RSBriggs
RSBriggs's picture

CME already avoids delivering by FORCING longs to take cash at a small premium over spot rather then delivering.  You can't FORCE the CME to deliver physical, even if you wanted to.  The rules say they can pay a cash premium, rather than deliver, if they want to, and they are settling this way more and more often.

Mon, 04/15/2013 - 09:32 | Link to Comment seek
seek's picture

I am aware of this, but it gives the appearance of a default. If every stand-for-delivery contract gets cashed out instead of delivered, they lose their reason for existence. So there needs to be some alternative; MF Global is a good example of this, they took the heat for non-delivery (aka theft) rather than CME.

Short version: I think there's a hidden piece to this puzzle.

Mon, 04/15/2013 - 07:46 | Link to Comment Rubicon
Rubicon's picture

Long popcorn

Mon, 04/15/2013 - 09:17 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

You'll have to be very long.

Mon, 04/15/2013 - 07:45 | Link to Comment Karl von Bahnhof
Karl von Bahnhof's picture

As expected...

Mon, 04/15/2013 - 07:47 | Link to Comment TeamDepends
TeamDepends's picture

But, of course!

Mon, 04/15/2013 - 08:45 | Link to Comment Sudden Debt
Sudden Debt's picture

yeah... the price is just so high... good of them to get it even cheaper...

The FED is really giving it away to the foreign powers for free right now...

and nothing we can do about it.

China will become the next economic supperpower and reserve currency. By design.

 

Mon, 04/15/2013 - 09:27 | Link to Comment TeamDepends
TeamDepends's picture

As long as the commie dolla is backed by gold, we will use it.  But we won't be happy about it one little bit.

Mon, 04/15/2013 - 07:46 | Link to Comment quasimodo
quasimodo's picture

??? ??

Mon, 04/15/2013 - 07:48 | Link to Comment Divine Wind
Divine Wind's picture

 

 

 

Wow. Gold is on sale.

Mon, 04/15/2013 - 07:57 | Link to Comment mendigo
mendigo's picture

The more you buy, the more you save.

Mon, 04/15/2013 - 12:16 | Link to Comment resurger
resurger's picture

Good buy signal

Mon, 04/15/2013 - 12:16 | Link to Comment resurger
resurger's picture

Good buy signal

Mon, 04/15/2013 - 07:48 | Link to Comment NoDebt
NoDebt's picture

DOWN goes Frasier!

Mon, 04/15/2013 - 08:04 | Link to Comment Zer0head
Zer0head's picture

been years since I've seen that expression 

in spring of 09 almost daily

Mon, 04/15/2013 - 07:49 | Link to Comment PeaBird
PeaBird's picture

On the way to 100% margin?

Mon, 04/15/2013 - 08:26 | Link to Comment Frozen IcQb
Frozen IcQb's picture

That will happen only when the futures sentiment turn net long.

Raising margins now would force the shorts to cover.

Mon, 04/15/2013 - 07:50 | Link to Comment VonManstein
VonManstein's picture

A CME Margin hike would be bullish. Wont happen

Mon, 04/15/2013 - 08:17 | Link to Comment Frozen IcQb
Frozen IcQb's picture

Where everyone and his dog is piling-up on the short side, a margin call would be bullish and will not happen.

Mon, 04/15/2013 - 07:50 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

Pile on in Gold

Mon, 04/15/2013 - 07:50 | Link to Comment EL INDIO
EL INDIO's picture

What a dump. It looks like the paper markets have diarrhoea !

This is a pre-emptive strike for what is coming and it must be big.

Shit I’m out of cash to buy PMs but at a GSR>~60 it is time to switch from Gold to Silver.

Are you BTFD ?

Mon, 04/15/2013 - 07:56 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

This is a pre-emptive strike for what is coming and it must be big.

 

Yeah.....pretty big I'm thinking.

 

Strap in and hang on.

Mon, 04/15/2013 - 08:01 | Link to Comment kindape
kindape's picture

"Shit I’m out of cash to buy PMs"

PMs will only turn for good once the early adopters have sold a meaningful % of their PMs to pay bills. Its a long ways off..(and not a day you should look forward to in any case)

Mon, 04/15/2013 - 08:11 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

"Shit I’m out of cash to buy PMs"

 

Call your stock borker and tell him you want it back.

Mon, 04/15/2013 - 08:14 | Link to Comment EL INDIO
EL INDIO's picture

That could be the plan but the Chineese, Indian and Russian CBs will not have that problem.

Mon, 04/15/2013 - 09:12 | Link to Comment robertocarlos
robertocarlos's picture

My neighbour sold his gold to save his business. Now the business is gone and he is living on his credit which is almost maxed out.

Mon, 04/15/2013 - 10:00 | Link to Comment francis_sawyer
francis_sawyer's picture

Your neighbor owns 'Mt. Gox'?

Mon, 04/15/2013 - 08:01 | Link to Comment goldenbuddha454
goldenbuddha454's picture

think you're right, someone let the cat out of the bag that recovery isn't recovering, china slow, cyprus broke, FED out of bullets, payroll taxes increased in the states, deficits as far as the eye can see, PIIGS grumbling, England wants out of the EU, Germany ready to push countries overboard, Yen dropping like a rock, consumers tapped out, job creation 80k v.s 200k expected, oil down.  Oh wait, all is well, we can print more money!

Mon, 04/15/2013 - 08:08 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Yo soi BTFD.  Hike that shit to 100%.  Tits or gtfo.

Mon, 04/15/2013 - 08:17 | Link to Comment agent default
agent default's picture

We need moar tits (.)(.)

Mon, 04/15/2013 - 09:17 | Link to Comment EL INDIO
EL INDIO's picture

We need QEtits

Mon, 04/15/2013 - 07:52 | Link to Comment Racer
Racer's picture

Funny how margin goes up for things that goes down in particular gold and PMs, yet goes down for things that go up like Sh!t and Poos!

 

Mon, 04/15/2013 - 07:55 | Link to Comment wisefool
wisefool's picture

Also, circuit breakers only apply to down swings.  Nobody ever walked onto an exchange and said "you know ... 10% upside in one day is enough, any more and we might be setting up a bubble, or a bad example for our kids on how to get rich quick"

Mon, 04/15/2013 - 08:07 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

That's because in the Ponzi world greed is good and fear of the loss your greed may experience is bad. After all, we ARE herd animals under those three piece suits.

Mon, 04/15/2013 - 09:09 | Link to Comment robertocarlos
robertocarlos's picture

You grow or you die. We're dying.

Mon, 04/15/2013 - 07:58 | Link to Comment css1971
css1971's picture

Ooh, kick em while they're down. I approve.

The wolves are definitely out in a pack this week.

Gonna give it another day or three before buying.

Mon, 04/15/2013 - 08:00 | Link to Comment TeamDepends
TeamDepends's picture

Caution!  A few days is an eternity in this market.

Mon, 04/15/2013 - 07:52 | Link to Comment buzzsaw99
buzzsaw99's picture

Who knew that leveraged paper-gold speculators set the price of gold?
WHOCOULDANODE??

Mon, 04/15/2013 - 07:55 | Link to Comment scatterbrains
scatterbrains's picture

I'm thinking there's plenty of time to buy gold until 400 or so points come out of /ES.  Idealy gold will hold the 1375-50ish  lows while everything else gets whacked. The tell will be if gold holds just under the long term channel (technical break) in the face of the equity washout but I don't think there's any need to rush in just yet.

Mon, 04/15/2013 - 08:01 | Link to Comment Boston
Boston's picture

As mentioned here about a month ago, I wouldn't be surprised to see gold fall further, to around 1250, before stablilizing.

Of course, this is reminiscent of what happened to pm's in 2008........before other risk assets crashed.

Mon, 04/15/2013 - 07:54 | Link to Comment carlsbro
carlsbro's picture

Bubble popping!

Mon, 04/15/2013 - 08:02 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Hopefully the prices at Walmart will follow suit.

 

Hell, maybe anything of value will now just be free.

Mon, 04/15/2013 - 08:13 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Custom shop strats can be had under a thousand dollars used at the moment.  Five years ago it was more like $1500. All markets are vomiting value.  It takes intestinal fortitude to harvest from the filth.

Mon, 04/15/2013 - 07:55 | Link to Comment Lewshine
Lewshine's picture

Forget support levels and any other chart voodoo. This is a raid...Again.
Ben and Blythe will target psychological pain thresholds, 950 will come in a hurry. Buy or die are the options.

Mon, 04/15/2013 - 08:09 | Link to Comment kindape
kindape's picture

anyone who says this is a raid and implies ben and blythe are behind it cannot be taken seriously on anything else they say.. (in my opinion of course). its the adult equivalent of 'the dog ate my term paper!'

Mon, 04/15/2013 - 10:04 | Link to Comment francis_sawyer
francis_sawyer's picture

400 tons [on Friday] sold in a half hour right on long term support level...

~~~

Yeah ~ the dog ate my term paper...

Mon, 04/15/2013 - 08:18 | Link to Comment Quinvarius
Quinvarius's picture

I suspect the Fed has been bailing out JPM's derivative book for the last 6 months.

Mon, 04/15/2013 - 08:44 | Link to Comment j0nx
j0nx's picture

If the price of my grocery bill is any indication then I agree. $250 yesterday and didn't really even get anything. Fucking ridonkulous and this shit needs to end soon.

Mon, 04/15/2013 - 09:07 | Link to Comment robertocarlos
robertocarlos's picture

I used to eat well for 200 a month but I've lost track the past 5 years because my record keeping computer failed. I'm probably at 300 a month now. I also think I could survive on 150 a month if I gave up certain things.

Mon, 04/15/2013 - 09:45 | Link to Comment TheMeatTrapper
TheMeatTrapper's picture

Exactly. Not only is the price going up, but the quality and freshness continue to deteriorate. I can remember when my suburban neighbors who hunted deer proudly proclaimed how they donated their venison to charity to feed the hungry. I don't hear that much these days. I hear more talk about how their processor is so awesome and what a great a job they do, and what a great meal they had from their venison.  

 Here's my version of hunger in America 

Mon, 04/15/2013 - 08:01 | Link to Comment Mr. Hudson
Mr. Hudson's picture

Margin call hikes will mean gold and silver will plummet further. $600 an ounce gold is becoming a reality.

Mon, 04/15/2013 - 08:20 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

The only guy on the planet that hasn't heard that Japan, the US, and Euroland are printing trillions in currency out of thin air.

 

The trick is to do it at the same time.....spend a little bit on hammering commodities......and pray.

Mon, 04/15/2013 - 08:28 | Link to Comment Frozen IcQb
Frozen IcQb's picture

No. A margin hike now would force the shorts to cover.

Mon, 04/15/2013 - 08:35 | Link to Comment dehdhed
dehdhed's picture

$600 per ounce would pretty much halt mine production

Mon, 04/15/2013 - 08:56 | Link to Comment BigJim
BigJim's picture

That would effect silver, of course, but the stock:flow (annual) of gold is something like 65:1... its price isn't determined by how much there is to sell, but by how many 'one ounce chits' the futures markets can manufacture out of each actul physical ounce they hold. Last I heard, it was something like 50:1.

Mon, 04/15/2013 - 08:01 | Link to Comment Bobbyrib
Bobbyrib's picture

I will never call the Chinese ignorant, or stupid...for at least ten minutes. These guys know how to initiate a price drop like US bankers, but they will be backing up the truck to load all the physical on the trucks. Clever SOB's, they are..

Mon, 04/15/2013 - 08:04 | Link to Comment fonzannoon
fonzannoon's picture

wait till Bernanke hints that he is concerned rates are too low later today and that he may want to raise them juuuuust a tad to reflect the strengthening economy.

It's pile on time.

Mon, 04/15/2013 - 08:07 | Link to Comment Mr. Hudson
Mr. Hudson's picture

Bingo!!

Mon, 04/15/2013 - 08:03 | Link to Comment ozzz169
ozzz169's picture

dont like wild rides, wish it would unwind a little more orderly, but welcome to the new world, been waiting for a nice discount to buy more gold... will keep waiting as this is probably just the start...

Mon, 04/15/2013 - 08:14 | Link to Comment Rory_Breaker
Rory_Breaker's picture

I was at my jeweler's in mumbai on saturday evening. Place was just as crowded as it always is. No signs of fear or panic. Gold Fizz still rules.

Mon, 04/15/2013 - 08:06 | Link to Comment pbr streetgang
pbr streetgang's picture

who"s gonna take awaytheir license to kill

Mon, 04/15/2013 - 08:11 | Link to Comment Boeing Boy
Boeing Boy's picture

I bought this morning at 1410, some vicky sovereigns.  Toe in the water.  Gold is better value that silver looking at the margins.  Looking to purchase more this week.  Gold and silver on sale, but I hate paying VAT on silver.

Mon, 04/15/2013 - 08:10 | Link to Comment Satan
Satan's picture

We are in a currency war. This is just an escalation . There is going to be blood...lots and lots of blood.

Mon, 04/15/2013 - 08:24 | Link to Comment ozzz169
ozzz169's picture

no currency war, just a bunch of desperate countries trying to save their insolvent banks, and in Japans case, some crackheads found a nice big gun and want to find out what it feels like when they point it at their foot and pull the trigger

Mon, 04/15/2013 - 10:17 | Link to Comment screw face
screw face's picture

Buy the fucking dip.

Mon, 04/15/2013 - 08:10 | Link to Comment LoneStarHog
LoneStarHog's picture

Ann Barnhardt

 

Originally penned and posted on December 15, AD 2011, seven weeks after MF Global.

3. Finally, a very simplistic explanation of how the cash commodity markets are soon going to decouple from the futures markets. This is a little complex, but stay with me. I think this is important to understand because none of us who have lived our whole lives in the U.S. have ever seen a market disintegrate.

The threat (or promise) of delivery upon expiration is what keeps the futures markets tethered to the cash markets. Up until now, if an unreasonably wide spread between the futures price and the underlying physical commodity market got too out of whack, a process called “arbitrage” would kick in. Arbitrage is when a party simultaneously buys and sells on two separate but related markets in order to capture an inefficient spread between those two markets.

I’m going to use precious metals as my example commodity because there are alot of metals guys reading this, and because the metals markets will be the big tell in term of when decoupling and thus total futures market disintegration is upon us. But these examples apply to all of the physical commodities.

Let’s say that the physical silver market is trading far lower than the silver futures price. This is what is called a WEAK BASIS. The BASIS is the relationship between the cash market and the futures market and is very simply defined as (CASH minus FUTURES). If cash silver can be bought at $25.00 per ounce and the futures are at $30.00 per ounce, the cash is $5.00 under the futures. When cash is under the futures, this is called a WEAK basis.

Up until now, what would a metals trader do? In very simple terms, he would buy the cash silver at $25.00 per ounce and then simultaneously sell the futures at $30.00. Because he has short-sold the futures, he could hold the contract to expiry and then deliver the $25.00 cash silver he bought to make good on the contract and receive his $30.00 price. So his simple net profit would be $5.00 per ounce. As many traders saw this spread and simultaneously executed this same strategy of buying the cash and selling the futures, what effect would this have? Right. It would cause the cash-futures spread to move back in toward convergence by pushing the futures price down (lots of sellers) and propping the cash market up (lots of buyers).

Now the opposite scenario: a STRONG basis. Let’s say cash silver is trading at $32.00 and the futures are trading at $28.00. A trader might take physical silver that he has in inventory and sell it in the cash market, and then immediately take those proceeds and buy back and equal number of ounces in the futures market and take delivery. Since the same number of ounces in the futures market cost $4.00 per ounce LESS, he would end up with the same number of ounces in his inventory PLUS $4.00 per ounce in CASH in his pocket. If he and many other traders saw this condition and they all sold cash silver and bought the futures, this would, again, converge the spread between the cash market and the futures market.

The lynchpin that is holding this dynamic together and keeping the futures markets tied to the underlying cash market is the fact that the futures contracts are deliverable, and a trader can either deliver or take delivery of actual physical silver via his futures position.

Are we seeing a problem yet? The futures markets have lost their viability and trustworthiness because of the MF collapse and theft. At some point in the not-too-distant future, people everywhere are going to realize that the delivery mechanism is not reliable. Heck, just holding cash and/or positions in a futures account is no longer reliable. The the market itself is not reliable, traders will no longer attempt to arbitrage these basis spreads because the risk to the trader that the rug will be pulled out from underneath them is simply too great.

And in the metals markets, the delivery process itself is . . . um . . . shall we say, easily corrupted? When you “take delivery” of physical metals, it doesn’t get sent to your house. All you get is a certificate saying that X number of ounces are being held in a certified vault somewhere with your name on them. After the MF collapse, that sounds like a joke, right? A CERTIFICATE with my NAME ON IT? Yeah. That really is how it works.

When the arbitrageurs finally lose all confidence in the markets, the cash market will decouple from the futures because no one will be willing to take the risk of having their money, positions and/or physical metals stolen/confiscated. If no arbitrageurs are willing to trade these spreads – no matter how wide they may become – and thus there is no force causing the cash and futures to converge, we will see the basis spreads become extremely wide. As people flee the futures markets, the futures prices will drop, while the cash markets hold steady or even diverge and actually rise as all of the former paper players realize that physicals are the only remaining game to be played.

Watch for this. Watch for the gold and silver futures to sell off as people walk away from paper while the online cash dealers, seeing that market demand for their physical inventory is robust, begin to ignore the futures prices and hold their prices steady or even raise them. When you see this basis decoupling and absence of arbitrage, lo, the end is nigh. A parabolic spike is coming.

Mon, 04/15/2013 - 08:13 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

That reminds me.....I need to pick up a couple pink AR-15's for the girls.

 

Does anyone know where I can score some ammo?

Mon, 04/15/2013 - 08:20 | Link to Comment Divine Wind
Mon, 04/15/2013 - 08:22 | Link to Comment ozzz169
ozzz169's picture

reload your own... much cheaper and more reliable that way.  thanks to obama my ar's have doubled and my 30 mag clips have quad... but they will go back down when this nonsence dies down, and then I will buy more of them as well, dont buy when they hype is high you just overpay, wait for a good sale ;)

Mon, 04/15/2013 - 08:28 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

OK....so where can I score some primers then?

Mon, 04/15/2013 - 09:49 | Link to Comment krispkritter
krispkritter's picture

Nowhere I can find...wonder if it's possible to make them?

Mon, 04/15/2013 - 08:28 | Link to Comment krispkritter
krispkritter's picture

Govliquidation sells off military brass. Previously purchased 1000lb lots for $1800-2100.  Last week 1500lb lots of 5.56 rang in over $9000!  Nuts I tell, friggin' nuts...

Mon, 04/15/2013 - 09:00 | Link to Comment BobPaulson
BobPaulson's picture

If you are on a budget and aren't super picky about accuracy, you need to own small arms that load 7.62 39 ammo. Seriously, most people are buying weapons that far exceed their ability to shoot a group. AK with folding stock handles most needs. Folks with training who can actually hit a moving target outside 100yards can buy the expensive arms and ammo. Shotguns are good value too.

Mon, 04/15/2013 - 08:47 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

A rebuttal. 

This is true for the little guy.  But big guys don't worry about the rug being pulled out or about delivery.  Why?  The big guys and their allies at the FED are the rug pullers.  Should any delivery problems occur, the rules will be changed.  If the big guys get into trouble, the FED will simply replenish their stack of chips.  Come what may the big guys cannot lose.

Little guys want to stay in the market?  Good, they'll fleece you.  Little guys get nervous, want to leave the market or throw a tantrum?  The door's right over there.  You aren't needed. 

No spike is coming.  This market is under control.

 

Mon, 04/15/2013 - 09:39 | Link to Comment mick_richfield
mick_richfield's picture

Thanks for this post!

I guess I should read her more often.

But -- shirley there must be some way to really take delivery for really real, isn't there?  Some mechanism to get metal out of a CRIMEX warehouse that does not simply result in a piece of paper that says "You have X.XXX ounces of silver."  ?

I don't personally know because

(1) I don't have any money,

(2) I wouldn't touch those guys with a bargepole if I did have any money, and

(3) if I had money, and I got involved with the CRIMEX, then I wouldn't have any money pretty soon, and would have to return to statement (1).

Mon, 04/15/2013 - 12:55 | Link to Comment resurger
resurger's picture

Yup thanks for this... Weak/Strong is the same as Contango/Backwardation?

Mon, 04/15/2013 - 08:10 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

If a shortage of silver arises I'm guessing refineries will be paying even closer to spot price for stuff like old sterling silverware. You got to know that the price on gold and silver is going to explode once they can't hide reality any longer from the masses. 

Mon, 04/15/2013 - 08:30 | Link to Comment sudzee
sudzee's picture

Refiners in my area increased their buy prices on both gold and silver in Jan.

Mon, 04/15/2013 - 09:28 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I was looking into turning a shitload of old sterling silverware into cash and then reinvest into either gold or silver bullion. I'm thinking if this hammering on price continues and panic happens in the paper market refiners are going to be paying higher prices to help dealers meet demand especially as supply decreases. Timing it for best bang for the buck is everything.

Mon, 04/15/2013 - 08:11 | Link to Comment Debugas
Debugas's picture

I had a strange dream last night - saw my gold bar melting in my hand :)

what could it mean ?

Mon, 04/15/2013 - 08:23 | Link to Comment e-recep
e-recep's picture

the melting point of gold would not be kind to your hands.

Mon, 04/15/2013 - 08:44 | Link to Comment SubjectivObject
SubjectivObject's picture

Sheesh, how obvious can it get?

It's LIQUID !

Mon, 04/15/2013 - 08:59 | Link to Comment BigJim
BigJim's picture

It means you are the true dragon! Westeros is yours by right!

Mon, 04/15/2013 - 08:15 | Link to Comment goldenbuddha454
goldenbuddha454's picture

my guess, the markets know PM physical quantities like the federal fish and wildlife commission knows red snapper populations.

Mon, 04/15/2013 - 08:21 | Link to Comment roadhazard
roadhazard's picture

I have cash burning a hole in my pocket. Imma going to be a silver magnate by the end of the day.

Mon, 04/15/2013 - 08:31 | Link to Comment pine_marten
pine_marten's picture

I think there is a good chance that pm's will stay down or drop further.  .22 long rifle rounds will be more usefull in a collapse than pm's.  The opportunity to take your profits on pm's is gone.  I'd rather have a remote hunting shack with a wood burner and a hand pump well than a pile of pm's now.

Mon, 04/15/2013 - 09:45 | Link to Comment The Abstraction...
The Abstraction of Justice's picture

When you head into the hills, say hello to the other million people there who had the same idea.

Mon, 04/15/2013 - 10:32 | Link to Comment pine_marten
pine_marten's picture

Your either country or not.  John Kerry looked pretty damn foolish on his goose hunt.  In the future, looking foolish will not be wise.  I don't wish ill for the "stackers" here - but I would be feeling pretty conflicted now if I were heavy physical pm.

Mon, 04/15/2013 - 08:37 | Link to Comment Upswaller
Upswaller's picture

Hmmm, Apmex 90% silver bags at 23.6% premium at this moment.  Bag is 2263.88 and bid is 24.22.  Something wrong with this math, lemme know.

http://www.apmex.com/Product/21202/90_Silver_Roosevelt_Dimes___100_Face_...

Mon, 04/15/2013 - 09:42 | Link to Comment Jorgen
Jorgen's picture

@3449370: On the other hand, 2013 Silver Eagles, 90% silver bags and Canadian Silver Maple Leaf are all out-of-stock at Texas Precious Metals

Mon, 04/15/2013 - 08:45 | Link to Comment Mototard at Large
Mototard at Large's picture

Savers vs Takers: The New Fault Lines and Social Unrest

An upcoming struggle is emerging in civil society. 

 It will be between those who have money but lack the political and financial power to defend it, and those who have the political clout to take it. In other words, the savers vs the takers.  There are multiple ways in which the “takers” will get their money.  Some are direct, such as the Cyprus and Australian models.  Other are more indirect such as the Spanish model.  Then there are the models being used in the US, UK and Canada in which depositors money and the deposit guarantees are circumvented for bank bail outs and bail ins.  See more at: http://tinyurl.com/dxsqjbe

Mon, 04/15/2013 - 08:51 | Link to Comment astoriajoe
astoriajoe's picture

I feel like we're getting Shanghai'd.

Mon, 04/15/2013 - 10:10 | Link to Comment screw face
screw face's picture

Shanghai market is raising margins, the express is about to leave the station.

http://www.presstv.ir/detail/2013/04/15/298399/south-korea-resumes-iran-...

http://www.presstv.ir/detail/2013/04/15/298385/iran-to-increase-gasoline...

http://www.islamtimes.org/vdcgyt9x3ak9nq4.5jra.html

Very silent in S. Africa, i & i think they got nukes and gold.

Briiics 7, Indonesia will start barking, soon come.

Goodby P D's. Markets will find price discovery, soon come.

Rosta

 

Mon, 04/15/2013 - 08:56 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

An underlying theme of the "gold boom" is that China is gold's friend.  Now the Shanghai market is raising margins.  Is China still friendly?

Mon, 04/15/2013 - 08:56 | Link to Comment Winston Churchill
Winston Churchill's picture

Unintended consequences are a bitch.

Looks like the paper market is going to be destroyed as a result of this take down

by the Fed Res proxies.

Mon, 04/15/2013 - 09:00 | Link to Comment robertocarlos
robertocarlos's picture

The DOW should drop 3000 points this morning.

Mon, 04/15/2013 - 09:08 | Link to Comment RSBriggs
RSBriggs's picture

"Should" and "will" are two rather different beasts.   Expect it to close green.

Mon, 04/15/2013 - 09:02 | Link to Comment bluemaster
bluemaster's picture

Gold been stolen from Temples ( this days so called markets) for last 4000 years . nothing new here  go sleep...

Mon, 04/15/2013 - 09:17 | Link to Comment poldark
poldark's picture

This fall in gold price is a God send. Excellent opportunity to buy.

Mon, 04/15/2013 - 09:18 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

Here's an assumption:  this market matters.  It's doesn't.

Mon, 04/15/2013 - 09:51 | Link to Comment youngman
youngman's picture

I wonder if this is what Obama told the bankers to do last Thursday at the private White House meeting...drop the gold price....

I also think there is a "deal" between the USA and Asia on this somehow....it just stinks...

Mon, 04/15/2013 - 10:30 | Link to Comment Conax
Conax's picture

This may be the beginning of the end of the entire paper PM complex. 

"You don't hold it, you don't own it"

"Paper will reach its intrinsic value = 0"

These popular and cliche'd sentiments combined with the theft at MFG and Cyprus and all the other evidence of criminality in the trade, may be causing a dump of the futures contracts beyond just the commercials and their cronies.

This has worried me since the MayDay drive by of '11, and here we are, prices dropping like lemmings off the cliff.  If premiums stay high and go higher from here, we happy phyzzicians can rest easy.

If not. . .  ?

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