According To The Knee-Jerk Market, South Africa Mines Silver

Tyler Durden's picture




 

Moments ago, a stray headline crossing Bloomberg was the catalyst for violent selling across the precious metal complex. The headline in question is this:

  • SOUTH AFRICA GOLD PRODUCERS TO CONSIDER BRINGING FWD WAGE TALKS

The reason for the puke in PMs is the goalseeked as follows: since miners are willing to negotiate wage hikes, the miner strike may soon be over. Well, they said that last week, when the Lonmin Maricana mine strike ended. All that happened next was for every other miner in South Africa to demand equitable terms, making the strike even worse than before. What it will mean, if indeed passed, is that a broad swath of PM miners will face default sooner rather than later, as they will be completely unable to pass on 20% cost surges to consumers, and many will file for bankruptcy sending capacity far lower in the long-run than currently, even with the mine strike. What is most funny, however, is the response in silver, which plunged in sympathy with gold and platinum as can be seen on the chart below.

There is one tiny detail: please point out in the table below of the world's largest 20 producers of silver, just where is South Africa.

We can wait.

Actually don't bother: it's not there. All that is there is a hearsay goalseeked flawed justification to enact a sell off of what everyone, even Ray Dalio, except for the Chairsatan and the Octogenarian of Omaha of course, now realizes will be the only money left once global QEternity is over and done with.

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Fri, 09/21/2012 - 11:10 | 2817977 Jason T
Jason T's picture

Seriously, good.. I now want to see gold and silver come come.. I'm underinvesting I'm afraid..

Fri, 09/21/2012 - 11:14 | 2817995 Pladizow
Pladizow's picture

Reality and facts have nothing to do with silver!

Fri, 09/21/2012 - 11:20 | 2818017 Oh regional Indian
Oh regional Indian's picture

The Octo-puss of Oh Ma Haw Haw strikes again.

Silver's time at centerstage is a few months away yet. Till then, roller-coaster time. It's just another lever in the hands of TPB for now.

ori

Fri, 09/21/2012 - 11:38 | 2818080 Joe Sixpack
Joe Sixpack's picture

Well, duh! Whatever silver does, gold can do just as well or better. Just substitute. [/sarcasm]

Fri, 09/21/2012 - 11:51 | 2818144 Manthong
Manthong's picture

Equal Opportunity Manipulation and Suppression.

Fri, 09/21/2012 - 12:03 | 2818211 Oh regional Indian
Oh regional Indian's picture

I think it was also challenging it's 200 dma on the upside?

That might be th eprimary and proximate cause of this.

ori

Fri, 09/21/2012 - 11:22 | 2818031 Nothing To See Here
Nothing To See Here's picture

When you see the price of PMs move according to rumours about a strike ending in South Africa, you know that fundamentals took a break out the window for a moment. They'll come back with a vengence at some point.

Fri, 09/21/2012 - 12:56 | 2818426 conork
conork's picture

I always saw silver investment as gold on steroids, fundamentals in precious metals went out the window before qe1 so just btfd and play along with it

Fri, 09/21/2012 - 14:35 | 2818849 nofluer
nofluer's picture

"catalyst for violent selling across the precious metal complex."

 

@14:30 Monex silver was off .07 to 34.57 - from the open that's down .29. Ummmm.... that's "violent selling"? I've lived a sheltered life.

Fri, 09/21/2012 - 11:28 | 2818051 kengland
kengland's picture

Looks like crude three days ago. Same monster forces at work

Fri, 09/21/2012 - 11:44 | 2818101 LetThemEatRand
LetThemEatRand's picture

It's amazing what you can do with an unlimited balance sheet backed by the ability to issue new debt payable by all of us.  You know the old line about how mad Americans would be if they really understood how the central banking system works?  Imagine how mad the public would be if they realized that the Fed is further diluting the value of their money/savings to cover up the effect of diluiting their money/savings in order to maintain the status quo.

Fri, 09/21/2012 - 13:21 | 2818483 akak
akak's picture

Indeed.

But, but, hold on ... where is Ayn Rand's portion of responsibility and blame in all of this?  I am sure that fundamentally she and her "selfish" philosophy of greed is the root cause of dollar debasement, right?  I mean, just about everything wrong in the world today can be linked to Ayn Rand, the demonic destroyer of humanity, in one way, shape or form.

Why, just last night I accidentally spilled a glass of wine, so naturally the first words out of my mouth were "Damn you Ayn Rand!"

 

PS: I did give you a green arrow for that post.

Fri, 09/21/2012 - 12:31 | 2818322 Right-on Left-off
Right-on Left-off's picture

There is just no fathoming of the manipulationability of the markets.

Ohh!  I call it, cover the criminality of paper shorting and make it up days later.

Rinse and repeat.

Sell high to buy low, the reverse of buy low to sell high.  All that is needed is to know which gambit is in play.  If you can move the markets you can make a profit in either direction at will.

Fri, 09/21/2012 - 11:12 | 2817981 schatzi
schatzi's picture

Algos using the iPhone map application

Fri, 09/21/2012 - 11:25 | 2818039 greyghost
greyghost's picture

god the education system in the u.s. sucks. hell i knew when i was twelve that s. africa mines gold not silver. alex, i will take african geography for 10 trillion, please.

Fri, 09/21/2012 - 11:35 | 2818078 tmosley
tmosley's picture

Implying that a, algos went to school (in the US, even), and b, that this wasn't just an excuse to take silver back below a level that has been heavily defended for a week, as if there were some sort of deadly, deadly consequence just beyond $35.

Fri, 09/21/2012 - 11:48 | 2818128 earnulf
earnulf's picture

There is, Silver might just suddenly pop out of the supression and blow the lid off things

Fri, 09/21/2012 - 12:11 | 2818247 PiratePawpaw
PiratePawpaw's picture

There is. If Silver can breach $35-37 this early, what is to keep it from reaching new highs this year?. And "we" cant have that before 11/6 now can "we"?

Fri, 09/21/2012 - 16:20 | 2819173 Hobie
Hobie's picture

That deadly consequence is closer to the $40 price range... JPMorgan Chase & Co. (JPM) -NYSE $40.88

Fri, 09/21/2012 - 11:13 | 2817985 Spastica Rex
Spastica Rex's picture

Look for the silver mining: every dark cloud has one.

Fri, 09/21/2012 - 11:13 | 2817986 Seasmoke
Seasmoke's picture

boy oh boy, Blythe refuses to let it stay above $35 !!!

Fri, 09/21/2012 - 11:22 | 2818028 r3phl0x
r3phl0x's picture

As if she's in charge. Blythe is just a tool to enrage and misdirect the masses, because fanning their impotent rage keeps the serfs under control. Anger without action reinforces inaction.

Fri, 09/21/2012 - 11:24 | 2818035 nope-1004
nope-1004's picture

It's all about confidence in Osama, the USD, and this failed economic model we zombies are forced to live in.  MOPE is the name of the game.  Must not let silver pass $36, or else it opens the black box again......

 

Fri, 09/21/2012 - 12:03 | 2818216 slaughterer
slaughterer's picture

A is for "Algos"

B is for "Blythe"

C is for "CME"

D is for "Dump"

Fri, 09/21/2012 - 12:05 | 2818224 John Bigboote
John Bigboote's picture

The Fed is doing this. It's obvious. They have to be very vigilant after the QE3 announcement, lest all confidence is lost in fiat too quickly.

Fri, 09/21/2012 - 11:13 | 2817989 donsluck
donsluck's picture

Threw up? I see no significant drop in the PMs. Am I missing something?

Fri, 09/21/2012 - 12:45 | 2818377 zoggl
zoggl's picture

agree!!! This should be a significant drop? Not if you know how Silver trades. We just got our daily dose of manipulation by these financial terrorists. Puppet-trader executig on behalf of the top 0.000001%, shorting naked every day about a similar number of contracts in a few minutes. Boring. Silver will be up again soon. Wake me up when silver passes 60 beginning of next year.

Fri, 09/21/2012 - 13:21 | 2818531 silverserfer
silverserfer's picture

all the fuss is from bitchy little paper traders. I love manipulation. please bring back $27 Ben. Buy phyz on the dips and quit whining. bitchez.

Fri, 09/21/2012 - 11:14 | 2817992 Mongo
Mongo's picture

BTFD

Fri, 09/21/2012 - 11:13 | 2817993 PaperBear
PaperBear's picture

Any story vaguely relating to silver will be used by the cartel to smash the price.

Fri, 09/21/2012 - 11:16 | 2818006 AL_SWEARENGEN
AL_SWEARENGEN's picture

You mean there will be less Silver produced?  Bearish!  These cocksuckers are caught.

Fri, 09/21/2012 - 15:58 | 2819120 Saro
Saro's picture

Came for "cocksuckers"; Was not disappointed.

Fri, 09/21/2012 - 11:14 | 2817997 Dr. Engali
Dr. Engali's picture

We knew the slam down was coming. Time for some margin hikes at the CME.

Fri, 09/21/2012 - 11:22 | 2818029 slaughterer
slaughterer's picture

CME margin hikes come later in the day, just before the options expiry cut-off.  

Fri, 09/21/2012 - 11:26 | 2818044 Duke Dog
Duke Dog's picture

Yep, bought one week ahead of Bernake's announcement and will do so again once the margin hikes begin - and rest assured they will.

Fri, 09/21/2012 - 11:50 | 2818138 Cdad
Cdad's picture

Correct.  Right on schedule, too.  You are here..... http://www.zerohedge.com/news/case-closed-cme-hikes-gold-silver-copper-margins <-----------from 2011, a Friday, Sept 23

Fri, 09/21/2012 - 12:24 | 2818300 slaughterer
slaughterer's picture

Cdad, been around here for while, eh?  

Note to self: do not re-buy paper PMs until the regularly scheduled margin hikes.  

Fri, 09/21/2012 - 11:15 | 2818003 agent default
agent default's picture

It just goes to show the idiocy and ignorance of what passes of as a market participant nowadays.

Fri, 09/21/2012 - 11:16 | 2818007 Deep79
Deep79's picture

"Moments ago, a stray headline crossing Bloomberg was the catalyst for violent selling across the precious metal complex. The headline in question is this:"

 

Really Tyler

No they were not overbought, rsi thru the roof, keep making higher highs, rsi diverging

MARKET MAKES THE NEWS, NEWS DOES NOT MAKE THE MARKET


Fri, 09/21/2012 - 11:42 | 2818061 crusty curmudgeon
crusty curmudgeon's picture

This must be one of them thar paradox thingies...How can anyone smart enough to log-in to a website be that stupid?

Whatever.  I'm off to get more silver.

"The fact throughout history is that whenever government dominates the economic affairs of its citizenry, a free society is eroded, then destroyed, and a minority government ensues. Personal liberty without economic liberty is an absolute contradiction; the one cannot exist without the other."  William E. Simon

Fri, 09/21/2012 - 11:38 | 2818077 Abraxas
Abraxas's picture

@ Deep79

You've got it all upside-down and inside out. MOPE has been making these markets for years. Gold went from $250 to $1950 in 10 years and the only thing we've heard on mass media is bubble-in-gold talk. If they had reported what truly was the reason for the gold outperformance, we'd have a bloody revolution on our hands and gold price in stratosphere.

Fri, 09/21/2012 - 11:19 | 2818013 TheSilverJournal
TheSilverJournal's picture

I can't see how gold mining hardly makes a difference to the price of gold. Only about 1.5% of gold is added to supply every year. If 5% less gold is mined, then this will changed to 1.43% added to existing supply. This hardly changes the supply of gold. Am I missing something?

Fri, 09/21/2012 - 11:30 | 2818059 Motley Fool
Motley Fool's picture

Yes.

 

90++% of the 'gold' market is paper promises to deliver gold. You are being fooled by the sham. Mining supply Matters, for the people buying actual gold, as opposed to the morons who buy paper.

 

 

Fri, 09/21/2012 - 11:31 | 2818060 r3phl0x
r3phl0x's picture

Miners provide a lot more than 1.5% of the (physical) market's liquidity. Most of the already-mined gold "stock" is not for sale (at least, not at anything near current prices). So the miner "flow" greatly affects the price.

Fri, 09/21/2012 - 11:50 | 2818137 jimmyjames
jimmyjames's picture

Am I missing something?

************

No-i think you're correct + - 2500 tons/yr mining supply against an existing supply of 165,000 tons means zip-

 

Fri, 09/21/2012 - 11:52 | 2818150 Motley Fool
Motley Fool's picture

Oh? And how much of that 165,000 tonnes flow yearly to satisfy demand for physical?

 

Mining supply is not insignificant, if one stops to think just a moment.

Fri, 09/21/2012 - 12:03 | 2818205 jimmyjames
jimmyjames's picture

Oh? And how much of that 165,000 tonnes flow yearly to satisfy demand for physical?

************

Get this---there is no shortage of gold-there can never be a shortage of gold-

All gold is for sale at "some price"

If the price that holders are waiting for has not been met--then obviously that gold will not be sold until the price comes to the seller-

Is 2500 tons/yr-give or take going to change that?

The LMBO alone trades 8,000 tons in a week-that doesn't include Hong Kong/Zurich/Dubai/New York-

Where is the shortage?

Fri, 09/21/2012 - 12:12 | 2818250 Killtruck
Killtruck's picture

Where is the shortage?

********************

Physical.

Fri, 09/21/2012 - 12:14 | 2818258 Motley Fool
Motley Fool's picture

So in 21 weeks they shift All the gold in the world? Those fort knox bars must exist after all. And poor granny can't wear those earrings long can she. :P

 

You are of course correct that all gold is for sale at some price...what do you imagine that price to be for central bankers or sovereign wealth funds?

 

2500 tonnes a year ? Yes that would make a significant impact.

 

Ignore stock. Flow is all that matters. There could be 200,000 tonnes, if only 1 tonne is for sale at current pricing the rest may as well not exist.

Fri, 09/21/2012 - 12:26 | 2818307 jimmyjames
jimmyjames's picture

Ignore stock. Flow is all that matters. There could be 200,000 tonnes, if only 1 tonne is for sale at current pricing the rest may as well not exist.

*************

Obviously there is enough gold flowing to satisfy current supply and demand-or-you wouldn't be able to buy gold at today's price-no?

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