This page has been archived and commenting is disabled.

The Other Side Of The Gold And Silver Coin

Tyler Durden's picture


We have long-discussed the currency debasement, fiat-fiasco thesis for owning hard assets and only last night noted the discussion between Biderman and Sprott on the practicalities of this plan. What we found interesting was this week we have seen a number of quite bearish articles on the precious metals - most notably Bloomberg's chart-of-the-day has had two notes citing inventory build for Silver's imminent demise and lagging futures open interest as a sign of investor's losing conviction in gold. Given that we are fair-and-balanced we thought it worth sharing these technical insights and perhaps reflecting on what Eric Sprott noted (and Dylan Grice has previously highlighted) as the only thing that could break his 'hard asset' thesis - that the political and banker elite "come to their financial senses".


4/18/12. Bloomberg. Silver-Inventory Surge Means Decline In Prices (no link - reporter here)

The CHART OF THE DAY shows silver futures are down 2.5 percent in April, trimming this year’s rally to 13 percent, as the inventories on the Comex in New York climbed 2 percent this month, touching 141.59 million ounces on April 13, the highest since September 1997. The price may slip to $29.90 an ounce from yesterday’s close of $31.674, according to Melek.


“This clearly shows that there is no ready market for the metal as investment and electronic demand are declining,” said Melek, the head of commodity strategy in Toronto and the second-most accurate price forecaster tracked by Bloomberg during the eight quarters through March 31. “We could see a downward pressure on silver.”


Even though inventories were rising, commodities climbed higher as there was optimism in the market,” Melek said. “But now, with fear of a China hard-landing and the European crisis coming back to the forefront, people are going to take notice that the data is telling them something.”

4/20. Jesse's Cafe Americain. Comex Silver Inventory Watch - Heading Into May-July Delivery Period

The long term decline in deliverable supply at this price level could become quite interesting.


The only ways to obtain more deliverable inventory to meet a bulge in demand is to game the rules on the ability to take physical delivery or let the price rise by buying on the open market.


The push by the CFTC for position limits may tighten the ability to take delivery from 1,500 to 1,000 contracts, but hedgers will be exempt from position limits on the short side.  And the big silver short JPM claims to be a hedger.


I keep hearing stories of negotiated prices above the public quotes to buy off large delivery claims.  I would be interested to know if anyone has proof of this.  We know there are large agreements being conducted around the publicly quoted prices all the time. The FX pit traders walked out in protest over a recent occurrence.  It does not take an economist to understand what this does to price discovery and market efficiency.


The estimates I have seen of how much silver is real and how much is conflicting paper claims (leverage of unallocated claims) is up to 100:1.   Some of those claims are reported to be covered by 'inventory in the ground' which is not readily available for delivery.


One can only wonder how well confidence in the Comex would receive another 'stolen assets' scandal like the confiscation of gold and silver that happened to customers of MF Global.


The central banks have long ago dispersed their caches of silver to the market, so they are not available to supply ready inventory at leased rates.   One might look to SLV and wonder who audits its custodial integrity of unencumbered physical bars and how often.


As I recall the sponsor of the ETF is Blackrock, but the custodian and keeper of the vault holding the physical silver backing the ETF is JP Morgan.  As you may recall, JPM is holding a massive short position on the silver futures, as best we can determine.


JPM claims they are a hedge on behalf of other parties.   If they are using the SLV inventory as collateral in any way, then someone needs to be paid a visit by the SEC and CFTC because the owners of the shares have a superior claim to the metal.   That smells like 'hypothecation' in the manner of MF Global.  But I suspect that rather than blaming Edith O'Brien one might blame Bear Stearns.


I am not saying this is 'illegal' but it certainly warrants disclosure if it is occurring.  And if the CFTC knows this and is sitting on the information in their four year old and still unreleased silver manipulation report, then Gary Gensler needs to appear before the Congress and answer some very tough questions about conflicts of interest and withholding of key market information.


Of course the prudential time to ask those questions and obtain the answers is now, and not after the carnage of a commercial failure devastates investors, global industry, and market confidence.


Will anyone listen to this?   Did anyone listen to Harry Markopolos before Madoff's fund blew up?


These days it seems like the US financial markets are a train wreck happening in slow motion.  Or almost like watching a B horror movie.  You hear the music and you know what's coming, but there is no way to warn the campers.

4/11/12. Bloomberg. Gold Holdings Signal Slump

Reduced holdings of gold futures in New York are signaling a further decline for prices that already are headed for their first three-month slide in more than a decade, according to Credit Suisse Securities AG.



The CHART OF THE DAY shows a 3.6 percent drop this year in the open interest, or the number of contracts that have yet to be closed, liquidated or delivered.


That “lack of conviction” by investors may send gold down more than 8.1 percent in the next few months to below $1,525 an ounce on the Comex in New York, said Cilline Bain, a technical analyst at Credit Suisse.


"Investors are willing to stand on the sidelines expecting prices to drift lower,” Bain said in a telephone interview from London. “The interest is clearly not there.”

And lastly - as a reminder - Dylan Grice Explains When To Sell Gold.

In brief: "Eventually, there will be a crisis of such magnitude that the political winds change direction, and become blustering gales forcing us onto the course of fiscal sustainability. Until it does, the temptation to inflate will remain, as will economists with spurious mathematical rationalisations as to why such inflation will make everything OK. Until it does, the outlook will remain favorable for gold. But eventually, majority opinion will accept the painful contractionary medicine because it will have to. That will be the  time to sell gold."


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 04/20/2012 - 15:53 | 2362181 SheepDog-One
SheepDog-One's picture

'Time to sell gold'....for what? Worthless federal reserve notes? 

Fri, 04/20/2012 - 15:55 | 2362185 achmachat
achmachat's picture

sell gold... why not?! as long as the gold/silver ratio is at these levels, silver is a steal!

again... sell your gold!! buy silver ;-)

Fri, 04/20/2012 - 15:57 | 2362188 SheepDog-One
SheepDog-One's picture

Trade gold for silver....probably not a bad idea at all.

Fri, 04/20/2012 - 16:10 | 2362238 css1971
css1971's picture

Waiting for 55-60:1.

Fri, 04/20/2012 - 16:17 | 2362261 DoChenRollingBearing
DoChenRollingBearing's picture

"Gold: Basic Facts for the 99%"

"Basic Facts: Platinum and Platinum Metals Group"

"Marginal Utility and Gold"

Above articles for anyone interested.  Google them or gmail me.

Fri, 04/20/2012 - 16:30 | 2362285 LowProfile
LowProfile's picture

Inventory surge?!



Maybe it's registered vs. unregistered?!

Fri, 04/20/2012 - 16:38 | 2362316 NotApplicable
NotApplicable's picture

Their "physical" inventory is likely SLV baskets full Comex receipts.

As for declining open interest, well, you can thank that MFG Corzine for that.

Fri, 04/20/2012 - 17:29 | 2362453 donsluck
donsluck's picture

OK, thank you MFG. Now turn yourself in (MFG). Too true, MFG has shaken my faith in my IRA custodian Charles Schwab, but someone has to be the custodian.

Fri, 04/20/2012 - 22:37 | 2363023 MrSteve
MrSteve's picture

You might as well hold paper gold as physical gold in an IRA. The custodians will not let you ever take possession of physical gold. You'll have to rinse it into the fiat 1099-R reporting system when you want to withdraw. Holding eagles and buffaloes in a custodian account is like not holding physical, so why pay the storage and handling fees, etc? Hold the good stuff outside of financial institutions for real self-insurance.

Fri, 04/20/2012 - 23:55 | 2363160 BoNeSxxx
BoNeSxxx's picture

Not so... you can set up an Open Opportunity IRA and, as manager of your own LLC, you can dictate how and where the gold is stored.

I'm not telling where mine is but it's very physical, very safe, and (for now) very legal.  Oh yea, and I don't charge myself storage fees -- that may not meet the self-dealing standard anyway :-)

Fri, 04/20/2012 - 17:33 | 2362469 goldfreak
goldfreak's picture

who would believe these gangsters at the Crimex anyway?

Fri, 04/20/2012 - 16:38 | 2362323 Manthong
Manthong's picture

Yeah, we’re just swimming in all of that worthless silver.

If my math is correct, some 150 million ounces (more than the Comex) equates to less than ½ ounce per man, woman, child and illegal in the United States (~330 million) or about 3/4 of a gram of silver for every person on earth.

Yep.. plenty to go around.. they might as well give it away.

Fri, 04/20/2012 - 16:54 | 2362362 Likstane
Likstane's picture

At 32 FRN's per ozt., they pretty much are giving it away!

Fri, 04/20/2012 - 16:55 | 2362363 Beam Me Up Scotty
Beam Me Up Scotty's picture

Take it down to $8 bucks an ounce.  I don't care.  I'll keep buying it on the way down.  I'll be able to by more every month.  I've got the rest of my life to wait for it to go up.  I already have an Ipad, I don't need another one, I'd rather have some silver.  They will print eventually of that you can be certain.

Fri, 04/20/2012 - 23:40 | 2363135 Nukular Freedum
Nukular Freedum's picture

Problem with the freegold hypothesis of fofoa is that it requires suspension of Fractional reserve banking which isnt going to happen. Thus the paper gold market may experience deft manipulation indefinitely.
I have a one paragraph definition of the whole Freegold thesis (from Fofoa himself) together with an indepth description of the underlying fallacy of Freegold here:

In addition I have read Do Chens article on marginal utility and gold. It too is based on a fallacious understanding of economics emanating from Fofoas blog, notably a misinterpretation of what marginal value is (it is not something alonside fair or intrinsic value, there is ONLY marginal value, that is it) and its application to gold.
Gold does not have an unchanging marginal utility, a person with a million bars of gold does not append the same marginal value to an extra unit that he might have done when he only had ten units. Thus marginal utility diminishes with each unit, as according to the theory. However (and this IS interesting) the marginal utility of gold/money only approaches zero asymptotically, it never becomes zero or negative. Perhaps this is what Do Chen/ Fofoa are dimly intuiting?

Sat, 04/21/2012 - 00:32 | 2363201 DoChenRollingBearing
DoChenRollingBearing's picture

I left two comments (nothing nasty) there at your blog.  I would agree that each new oz for someone who already has 1000 oz does not get as big a bang for his buck as a guy with only 5 oz.  I think the total utility as your gold pile gets larger would more closely follow the "y = ln(x)" curve at my article.  But that's just my best guess.

Stay in touch.  NO ONE knows everything.

Fri, 04/20/2012 - 16:19 | 2362269 Pladizow
Pladizow's picture

Before anything, this guys past silver forecasts should be investigated!

What was he saying 1, 3, 5, 10 years ago about silver?

Fri, 04/20/2012 - 21:44 | 2362947 DosZap
DosZap's picture

Trade Gold for Silver, cause the CB's are grabbing all they can..............not.Wonder why?.

Good idea really to hold  ( and not for the feint of heart) to have a 50/40/10 Mix of the Big 3.

Aug is the metal of heart attacks.

IF you have the stones, go fer it.And you bought it WAY back when it was really cheap.

Fri, 04/20/2012 - 16:06 | 2362229 Spider
Spider's picture

Yeah traders at the NYMEX may not be buying it but if I were a sovereign regime with a lot of reserves (think Asia) with the mindset to one day establish my own currency as a world standard i'd be buying it.  What other options are there?

The biggest bubble is in sovereign bonds and creditor central bankers know it...

Fri, 04/20/2012 - 15:57 | 2362195 Dr. Engali
Dr. Engali's picture

No but I might exchange some for a 50 cal sniper rifle and some rounds.

Fri, 04/20/2012 - 16:27 | 2362287 Dr. Richard Head
Dr. Richard Head's picture

I'm getting me some Columbian Secret Service Hookers. 

Fri, 04/20/2012 - 18:58 | 2362530 Manthong
Manthong's picture


Fri, 04/20/2012 - 16:31 | 2362290 easypoints
easypoints's picture

Yeah, eventually.

But the .50 is a bit much. You don't usually need to defend yourself from a mile away, and those rounds are heavy and hard to find.

Fri, 04/20/2012 - 18:05 | 2362562 Maos Dog
Maos Dog's picture


50 cal is the poor mans field artillery, with the right hand-loads it can punch through 1/4 thick steel plates, effective against light armored vechiles and low flying helicopters.

Fri, 04/20/2012 - 20:16 | 2362798 UP Forester
UP Forester's picture

So are .30-06 AP rounds.  Cheaper, too.

Fri, 04/20/2012 - 17:02 | 2362376 MaggieL
MaggieL's picture

Easypoints is right...honestly, you don't want a .50 cal. You want somethng you can carry and point at an attacker.


A .45ACP pistol should be plenty at closer ranges, a rifle shooting .223 or 7.62 to reach out and touch someone. 

Fri, 04/20/2012 - 18:41 | 2362634 Dr. Engali
Dr. Engali's picture

I had all of that before an unfortunate smelting accident.

Fri, 04/20/2012 - 17:08 | 2362394 BandGap
BandGap's picture

How about three .243 caliber rifles and all the rounds you want? Make some friends, give two away and have a shooting party.

The 50 cal is too big, loud and the ammunition too expensive. It's a bitch to fire and to get good with it will cost a lot of time and money (not to mention a sore shoulder). So unless you're trying to take out a wall or a light armored vehicle best to get a useful weapon.

Fri, 04/20/2012 - 18:40 | 2362630 Dr. Engali
Dr. Engali's picture

I already have a .270,.223,and a 308. Have you ever watched sons of guns? They modified a .50 cal by making it quieter and gave it less kick. It was pretty cool.

Fri, 04/20/2012 - 20:32 | 2362832 engineertheeconomy
engineertheeconomy's picture

Ground to air rocket launchers and flame throwers. 2nd amendment says right to bear ARMS, not whimpy guns...

Sat, 04/21/2012 - 08:58 | 2363458 spentCartridge
spentCartridge's picture

All lightweight stuff so far.

What you want ...


.50 are for pussies.

Fri, 04/20/2012 - 16:26 | 2362279 SRSrocco
SRSrocco's picture


While is it true that silver is being added to the COMEX inventories, to make a case that the price is heading lower because of this.... doesn't fly. 

First... if you look at the big takedownof $10 in SEPT 2011, you will notice that the inventories did not build.

Second... if you look from JAN to the end of FEB 2012, you will see a rise in price of silver along with the rise of inventories.

Thrid... anyone who makes a case that silver is falling due to inventory builds has to throw out the move between JAN-FEB... which means their theory is worthless.


Silver has been taken down by NAKED SHORT SELLING of the bullion banks.  They use paper leverage to move the price.  Since May of 2011... there have been several large attacks, the last being on FEB 29, 2012.

They have done what they intended.... and that is to DESTROY the ability of speculators to trade silver on the COMEX from the MF GLOBAL bankruptcy as well as KILL the motivation of investors to buy the physical bullion.

Now we get HACKS coming out with this sort of NONSENSE and I have to be honest and say... JEEESHHH... can't you do any better than this sort of RUBBISH??  This is typical 5th grade mentality crap.

Again the intent of those in control of the FIAT REGIME have destroyed the market psychology for GOLD and SILVER at the moment.  This will not last as they have not solved any problems whatsoever.

Lastly... I would like to remind the reader-precious metal investor that the total RETIREMENT ASSETS of the USA are presently $17 trillion.  Zombies are still putting their money in US Treasuries and into the RETIREMENT MARKET.  This is a bubble.... not gold and silver.

We just have to be patient.

Fri, 04/20/2012 - 16:29 | 2362294 Dr. Richard Head
Dr. Richard Head's picture

The louder the chorus  becomes that gold/silver is about to decline is just another verse that sings out a bottom.

Fri, 04/20/2012 - 16:46 | 2362338 resurger
resurger's picture






Fri, 04/20/2012 - 20:39 | 2362845 engineertheeconomy
engineertheeconomy's picture

The tide comes up, the tide goes out, the tide comes up...

Take a vacation, you'll get it

Sat, 04/21/2012 - 00:13 | 2363179 Quinvarius
Quinvarius's picture

The silver that is not deliverable, but is claimed as inventory, is silver the COMEX owes to people.  When you realize that is what is being reported in that chart, it paints a different picture.

Sat, 04/21/2012 - 07:09 | 2363391 Dr.Engineer
Dr.Engineer's picture

Quin, please explain a little more. The mechanics of this great virtual blob of commodities (Crimex) is opaque to me.

Sat, 04/21/2012 - 07:24 | 2363398 Quinvarius
Quinvarius's picture

Registered is available for delivery silver.  It is in the big shared pool.

Eligable is the silver people are storing at the COMEX.  It is silver that the CME says they are holding specifically for other people.  Hence, the COMEX owes it to them--Much like they owed the MF Global people silver.  It s the stuff JPM and other banks claim is in their vaults.

The numbers should not diverge like that.

Fri, 04/20/2012 - 16:35 | 2362306 Debugas
Debugas's picture

federal reserve notes are not worthless - lots of jobless people are more than willing to provide services to you for those notes .


because of the huge debts the bankers can play both ways now - inflationary (which is always possible with fiat) and deflationary (only possible when there is huge indebtness)

Sat, 04/21/2012 - 09:17 | 2363469 BW
BW's picture

Sounds like we are close to a bottom.

Fri, 04/20/2012 - 15:55 | 2362182 dow2000
dow2000's picture


Fri, 04/20/2012 - 15:55 | 2362186 SheepDog-One
SheepDog-One's picture

'Eventually a crisis of such magnitude will force us onto a course of fiscal sustainability'....yea, sure....that'll happen.

Fri, 04/20/2012 - 16:27 | 2362288 Spacemoose
Spacemoose's picture

try as i may, i just cannot bring myself to believe that 5, 10 or 15 years out, that it is more probable that the purchasing power of $1,640 of fiat will be greater than the purchasing power of one oz of gold. i just cannot see that as a rational outcome of the current situation.  possible yes, but highly improbable.


Fri, 04/20/2012 - 20:41 | 2362853 engineertheeconomy
engineertheeconomy's picture

You're too generous. I'd say that we have 2 yrs tops before they'll be sweeping that useless paper off the streets. Hell, we're almost there now...

Fri, 04/20/2012 - 18:27 | 2362616 seek
seek's picture

It really will happen. I have no doubts about this. But it'll be a post-war, post-collapse, or post-revolutionary government that achieves this fiscal sustainability.

And they probably won't be using fiat, which makes the point moot.

Fri, 04/20/2012 - 15:58 | 2362193 schoolsout
schoolsout's picture

I thought silver inventories at COMEX were at another low point

Fri, 04/20/2012 - 16:03 | 2362211 Spider
Spider's picture

No inventories are over 130 million ozs (last April they were around 100 million) but registered silver is actually pretty low at 36 million (last April it was 41 million - a much larger % of total metal).  Registered is available for sale while eligible simply means it meets COMEX standards

Now I'm not sure the significance of thise disparity but it does seem important I would love to have somone enlighten me...

Fri, 04/20/2012 - 16:14 | 2362242 hack3434
hack3434's picture

Also the stockpile stats are a bit misleading. 


Long term COMEX silver stock



Sat, 04/21/2012 - 00:12 | 2363186 Quinvarius
Quinvarius's picture

I wonder how much MF global had to do with all this.

Sat, 04/21/2012 - 09:36 | 2363490 Chaffinch
Chaffinch's picture

The difference between low stocks (100 million ounces) and so- called 'record high stocks' of 140 million ounces is pathetically small. An extra 40 million ounces in Comex is nothing compared to the ridiculous levels of paper silver, and the graph at the top shows no meaningful long-term correlation between Comex stocks and price. They must be desperate if they are attempting to make a case on such flimsy so-called evidence.

Fri, 04/20/2012 - 17:02 | 2362377 percolator
percolator's picture

Registered silver which is available for delivery just hit an all time low


Fri, 04/20/2012 - 15:56 | 2362194 Samual Adams
Samual Adams's picture

Selling silver and gold now is like chucking your life jacket and life boat off the Titanic once you can see the icebergs in the north atlantic.

Fri, 04/20/2012 - 16:05 | 2362217 Paul Atreides
Paul Atreides's picture

Yes Miss I'll have another Samuel Adams please....make that two!

Fri, 04/20/2012 - 16:14 | 2362251 trembo slice
trembo slice's picture

I'll have a Samuel Jackson.

Fri, 04/20/2012 - 16:51 | 2362351 Saro
Saro's picture

MMMMM MMMMM, bitchez!

Fri, 04/20/2012 - 16:11 | 2362245 MrBoompi
MrBoompi's picture

We need to find out what Goldman recommends, then DO THE OPPOSITE.

Fri, 04/20/2012 - 17:46 | 2362506 yabyum
yabyum's picture

Sam, You have never been boating with the ZH crew, have you?

Fri, 04/20/2012 - 18:29 | 2362619 Diet Coke and F...
Diet Coke and Floozies's picture


Sat, 04/21/2012 - 00:12 | 2363185 e_goldstein
e_goldstein's picture

I think we should start a ZH yacht club. The insignia could be a shipwreck sitting on the bottom of the ocean.

Banzai7 could make t-shirts.

Sat, 04/21/2012 - 18:19 | 2364076 UP Forester
UP Forester's picture

Would a 10 foot rowboat qualify as a yacht, if I attach an electric trolling motor?

Sun, 04/22/2012 - 11:54 | 2364784 Temporalist
Temporalist's picture

I would buy the ZH Capsize Crew t-shirt.

Fri, 04/20/2012 - 15:59 | 2362196 fonzannoon
fonzannoon's picture

I think that if people were really out there putting bearish articles on gold and silver a great way to try to give those articles credibility would be if the companies that mine these metals were all sitting at 52 week lows while these articles were being put out there. Since that obviously is not the case I don't see any tomfoolery here.

Sarc/broken/permenantly on

Fri, 04/20/2012 - 16:01 | 2362201 spentCartridge
spentCartridge's picture

Sell it?

If people are to sell because it is no good, then who the fuck is gonna be buying it?


Apart from us, of course :)


Fri, 04/20/2012 - 16:00 | 2362203 Ted Baker
Ted Baker's picture


Fri, 04/20/2012 - 16:01 | 2362208 Dr. Engali
Dr. Engali's picture

Looks like the nas held on to 3000 despite AAPl's controled decline.

Fri, 04/20/2012 - 16:03 | 2362212 urbanelf
urbanelf's picture

Is that *registered* silver at the COMEX?

Fri, 04/20/2012 - 16:11 | 2362244 truont
truont's picture

No, registered silver sits at about 29M oz.  The eligible silver makes up the vast majority of the comex silver today.

Look at the declining registered silver chart:

Fri, 04/20/2012 - 16:12 | 2362246 truont
truont's picture


Fri, 04/20/2012 - 16:03 | 2362215 Imminent Collapse
Imminent Collapse's picture

BTFD.  Thank you MSM!

Fri, 04/20/2012 - 16:08 | 2362233 BigMike
BigMike's picture

Aren't these the type of articles and the bearish sentiment one would expect after a now year long consolidation? We all felt so smart on the way up--this is a test. Personally, I enjoy having my conviction tested.

I don't give a fuck about aggregate open interest on the comex nor silver stockpiles when it comes to the long term picture. No disrespect to anyone in this forum or Tyler but too many people pay too much attention to the day to day noise.

Fri, 04/20/2012 - 16:18 | 2362265 trembo slice
trembo slice's picture

The hard part is explaining it to friends that are still plugged into the Matrix without nominal gains in the metals.  It is truly a waiting game.  I'm with you.  I find myself not checking the prices for weeks at a time--as the day to day movements are simply irrelevant.

Fri, 04/20/2012 - 22:49 | 2363047 IrritableBowels
IrritableBowels's picture

Same spot. Trying to explain it to the sheep is akin to beating one's head against the proverbial wall. keep stacking.

Sat, 04/21/2012 - 07:17 | 2363395 StychoKiller
StychoKiller's picture

I watch the price of Au/Ag/Oil daily, because one of the 1st signs of the Great Implosion™ might be a large-scale jump in the price(s)!

Otherwise, there's no other reason to watch the fluctuations of wealth insurance policies...

Fri, 04/20/2012 - 22:45 | 2363041 IrritableBowels
IrritableBowels's picture

+1 brother. Good luck.

Fri, 04/20/2012 - 16:09 | 2362240 MrBoompi
MrBoompi's picture

The Federal Reserve really can't think or plan more than a few years out, and I'll still have my silver then.  It's not for the short term anyway.

Fri, 04/20/2012 - 16:19 | 2362254 razorthin
razorthin's picture

Wouldn't sell physical, but I wouldn't buy now either.  Begins soon the or next major wave down for everything except cash.  Better days do lie ahead.  Even Rogers agrees.

Fri, 04/20/2012 - 16:19 | 2362270 SheepDog-One
SheepDog-One's picture

Cash, most worthless thing around.

Fri, 04/20/2012 - 16:22 | 2362274 razorthin
razorthin's picture

Ultimately, yes.  I just think the big flush comes first.

Fri, 04/20/2012 - 16:25 | 2362284 SheepDog-One
SheepDog-One's picture

Well I'll be glad to see it, along with lamp posts adorned with bankster ornaments. Then we can talk about better times ahead.

Fri, 04/20/2012 - 16:32 | 2362308 fonzannoon
fonzannoon's picture

See that Sheep somebody downvoted all of us. Fuck em.

Fri, 04/20/2012 - 17:52 | 2362519 SheepDog-One
SheepDog-One's picture

Yep someones cranky.

Fri, 04/20/2012 - 16:17 | 2362256 bingo was his name
bingo was his name's picture

The time sell will be when real interest rates are above real inflation - given that if Benny lets intersets rates rise on the 10 yr above 4% or so our debt ponzi blows up I would not count on that happening any time soon. 


Fri, 04/20/2012 - 16:18 | 2362257 Confundido
Confundido's picture

You guys are all delusional. Central bankers, the establishment, have won are winning the game. They have crushed us with financial repression and price manipulation. You're being dogmatic.

Fri, 04/20/2012 - 16:44 | 2362341 riphowardkatz
riphowardkatz's picture

quite a crushing jonny come lately. ten year looks pretty good. Ask an Indian how crushed they feel? england sold at the bottom are they feeling jubilent about it right now? they are terrified. reaching for straws, democles sword.

crushed? what? 

Fri, 04/20/2012 - 21:08 | 2362887 grey7beard
grey7beard's picture

>> quite a crushing

There's a lot of truth to what he said.  Paul Volker said the one big mistake he made was not controlling the price of gold.  Well, it appears that is just what the powers that be are doing.  Gold was slammed down and it being held under roughly $1,650.  The fed can hold gold down as long as it likes.  When you're cranking out a trillion and a half digital dollars a year, a few billion spent supressing the price of gold to cover your tracks is nothing.  Gold will be held at this level for a good bit of time.  In a few months the charts will show gold down a couple of hundred dollars YOY and don't think all the press won't be making a major deal out of that.  Gold is being, and will continue to be, taken to the wood shed and made an example of.

Fri, 04/20/2012 - 22:40 | 2363028 Likstane
Likstane's picture

11 years in a row seems like a long time for the Fed finally 'start' supressing the gold price.  

Maybe this is the year they figure out how.  Meanwhile you should probably sell yours while you can still get 1650 FRN's for each ozt, and then put those FRN's into your allocated Fed controlled bank account. 

Fri, 04/20/2012 - 23:36 | 2363127 grey7beard
grey7beard's picture

>> you should probably sell yours

Thanks, but I don't generally take investment advice from rookies.  Now run on back to Turd's site.

Sat, 04/21/2012 - 01:36 | 2363254 Likstane
Likstane's picture

I appreciate you at least considering my advice regarding your gold.  It seems to me the best option if you think the year end price will be lower than 1650 FRN's.  Maybe you were thinking the gold price in Sudanese money units and the sway of that particular central bank.  That is your homeland I take it; at least you display the colors proudly. 

Sat, 04/21/2012 - 08:44 | 2363446 grey7beard
grey7beard's picture

>> It seems to me the best option if you think the year end price will be lower than 1650 FRN's. 

I see the end of year as short term.  I'm not a trader.  If they hold gold and silver here for a couple of years it makes little difference to me.  I hardly think watching the action in gold and speculating on the reason is grounds for a snotty "well just get out and move on".  Fortunately there are sites with more intelligent and inquisitive posters who don't demand one cheerlead no matter what the evidence is.  

>>  That is your homeland I take it;

Actually, that's not the Sudanese flag.  But if it were, what pertinence does my homeland have, unless one is a racist?  From that one little sentence, one can safely deduce you are an ignorant racist.  Keep talking, keep revealing your irrelevance.

Sat, 04/21/2012 - 13:29 | 2363744 Likstane
Likstane's picture

Oh, my bad.  I should have immediately recognized the flag of South French Territorial Guinea and their leader Steve Garvey!

Sat, 04/21/2012 - 07:20 | 2363396 Dr.Engineer
Dr.Engineer's picture

Central planning never wins.   Eventually the system grows so big that the time it takes events to reach the control mechanism for compensation is so large that the system just collapses. The question is how long the collapse will take.  Given that fiat money growth looks to be going exponential, confirming that central planning is growing exponentially, the end will hapen sooner than Benny Boy, et al will think.

This is basic system theory.

This is why small government is best:  shorten time from event to feedback.

This is why small businesses are nimble.

This is why guerilla warfare is so successful.

Remember:  Liberalism is a religion of blind faith and central planning is its Pope.

Fri, 04/20/2012 - 16:16 | 2362258 cbaba
cbaba's picture

This is a contrarian indicator, everytime they say price will drop , gold and silver price increases.


Fri, 04/20/2012 - 16:18 | 2362260 AmazingLarry
AmazingLarry's picture

13th year means gold to $1300. 

You know, just like gas will go to $.68/gallon.

Keep stacking Zimbabwe bank notes!

Fri, 04/20/2012 - 16:21 | 2362271 InconvenientCou...
InconvenientCounterParty's picture

I'll believe it when central banks stop referencing the idea of "inflation targets". When you calibrate what they say with reality, the "target" ends up 4-6%. Against a backdrop of near- zero interest rates, it's a no-brainer.

I suppose if the fed wanted to crash commodities they could raise interest rates. That would be an interesting experiment.

Fri, 04/20/2012 - 22:01 | 2362969 DosZap
DosZap's picture

I suppose if the fed wanted to crash commodities they could raise interest rates. That would be an interesting experiment.

They cannot raise them  ONE basis point, or the interest on the DEBT goes apeshit.............4% would destroy the currency in short order.

Fri, 04/20/2012 - 16:20 | 2362272 Bluntly Put
Bluntly Put's picture

Last I checked, according to the constitution, only gold and silver are real money good for paying debts public and private. That means, according to the "rules" used to establish this country gold and silver are the only "real" money.

If they are not, then the constitution has been circumvented, and if that is the case then anything you think you own isn't really yours, it can be taken from you at any point in time. If that is the case, why worry about having anything of value?

Fri, 04/20/2012 - 16:23 | 2362278 InconvenientCou...
InconvenientCounterParty's picture


You've found the terminus of materialism.

Fri, 04/20/2012 - 16:22 | 2362275 SheepDog-One
SheepDog-One's picture

SO then, theres the end to another worthless week in fictional market land....whoopdee frickin doo.

Fri, 04/20/2012 - 18:14 | 2362577 jomama
jomama's picture

i can't remember a time since i have been buying when Au/Ag traded in lockstep and sideways for this many weeks at a time.

Fri, 04/20/2012 - 16:22 | 2362276 lemonobrien
lemonobrien's picture

i just bought golds and silvers, being 4/20. I don't care no more; i like it when it falls; i only want to buy more. i like it cause its shinny. i've been thinking about buying property, like a couple of 30k houses and becoming a landlord; but people in the woods don't have jobs; and it's a pain in the ass to manage. i also don't like the fact government can take my shit if i don't pay taxes; or they need a new highway due to stimulus. I've been thinking about land; but land in America is subject to the same tyrannical shit. Land overseas is nice; but they also trying to ripe off stupid gringoes. I've also been reading the book "Long Emergency" seems due to the lack of oil; shit will go local. seems i'm trapped. being trapped, i piss my money away on golds and silvers.

Fri, 04/20/2012 - 21:14 | 2362900 grey7beard
grey7beard's picture

>> I've been thinking about land;

Land is not all bad.  It depends on how you play the game.  I have 10 acres with a well, septic and mobile.  I paid cash and then did a major overhaul of the property. I put in a nice fenced garden and an orchard.  I'm working on clearing the perimeter to fence it and add either some goats or a couple of cattle.  Taxes, because my initial investment was so low, are $240 a year.  That is cheaper than a storage shed, which is why I bought it initially.  Now I like it so much out in the stix I'm not going to let it go.  Due to circumstances, I may go back to the city, but I'll be keeping my place as a fall back location until after I'm cremated. 

Fri, 04/20/2012 - 21:52 | 2362958 DosZap
DosZap's picture

Land is not all bad. It depends on how you play the game.

Not if you can't keep it,( that was my #1 plan, until the details of the plan were made known) the Feds are fast gobbling up the still open  public lands, and guess whats next.............under the plan in effect now is OWNERSHIP of physical properties are on the way out.They cannot afford for anyone to be self suffucient in any way. Total control.

All your land are ours. Or likely soon will be.

Fri, 04/20/2012 - 23:39 | 2363131 grey7beard
grey7beard's picture

>> under the plan in effect now is OWNERSHIP of physical properties are on the way out.They cannot afford for anyone to be self suffucient in any way. Total control.

One of the interesting things about being into PM's are all the conspiracy theories one gets introduced to. 

Sat, 04/21/2012 - 05:36 | 2363351 Freeman-S-Stratos
Freeman-S-Stratos's picture

One of the interesting things about being into PM's are all the conspiracy theories one gets introduced to.

Yes... we must stop these types of crazy federal land grab conspiracy theories from being passed on...

grey7beard is this MSM channel "into PM's"?


Sat, 04/21/2012 - 08:57 | 2363457 grey7beard
grey7beard's picture

You do realize the evidence you provide is a blog?  And you also realize anyone can have a blog and say anythng?  You do also know that the internet is awash in right wing frantic screeching blogs warning of the leftists taking over?  Excuse me if I  discount your smoking gun evidence.

I don't know what you frantic types are planning on doing, but I'll continue on with my little farmstead out in the sticks.  If we're all unceromoniously hearded into densly packed internment camps by a bunch of left wing guards, you'll be no better off than I am.  If the cities become basically unlivable hell holes, I'll be much better off than you.  If neither happen, I'm quite happy here in the sticks anyway.  Carry on being scared.

>> is this MSM channel "into PM's"?

Try as I might, I can't figure out what you are getting at here.  I'm pretty sure it's some attempt to brand me a sheeple, but not quite sure how.  Please explain the meaning.

Fri, 04/20/2012 - 16:25 | 2362286 YouThePeople
YouThePeople's picture

Seeing how I am fair & balanced, Bloomberg is full of it. I guess that's why all the central banks are hoarding Gold. Chart that con men.

Fri, 04/20/2012 - 16:29 | 2362293 junkyardjack
junkyardjack's picture

AAPL is having a clearance sale

Fri, 04/20/2012 - 17:02 | 2362380 Hansel
Hansel's picture

A $534 billion clearance sale?  What a bargain...

Fri, 04/20/2012 - 16:32 | 2362300 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Good thing Pisani audited GLD's vault, I was getting worried there for a second that there wasn't any gold stored there!

Fri, 04/20/2012 - 17:09 | 2362400 Bay of Pigs
Bay of Pigs's picture

Funny thing is, that bar he held up belonged to someone else, not GLD.

Just another Bankster Ponzi....

Fri, 04/20/2012 - 17:52 | 2362523 SheepDog-One
SheepDog-One's picture

That was pretty funny, the serial number on the bar he held up for proof is a fugazi.

Fri, 04/20/2012 - 21:29 | 2362921 Uchtdorf
Uchtdorf's picture

I keep thinking that whole scenario was a set up, just to mess with the minds of people like us ZHers. As part of the shoot inside the vault, he had to have asked, "Say, uh, can I pick up one of those bars...I mean like, on camera?" TPTB said, "Sure you can. Watch, we'll put this nice bar right here. So Bob, when you are walking through the vault on camera, it will appear that you have just nonchalantly and totally at random picked up one of these fine gold bars. And be sure to show the serial number so everybody will know it's legit."

Fast-forward to the airing and the inevitable upload to Youtube. People see the serial number and investigate. TPTB get a big kick out of the whole brouhaha because they got the "P". That stands for power, which is exactly what we don't got. And they know it. We see the ponzi, but go ahead, do something about it...other than buy more physical

Fri, 04/20/2012 - 16:32 | 2362302 Freegolder
Freegolder's picture

The 'big crisis' will come along.


It will be called 'collapse of major currencies' (Dollar, Yen, Sterling: all racing certainties).


Then the deflation hits. Gold will soar to a minimum of $55,000 an ounce in today's terms and will stay there, as a new physical-only market replaces the fractionalised/paper/electronic market we see holding down the real price today.

No way Jose will the Feds stop QE until the bitter end. They fight to save the system with QE, but they lose the war as the currency collapse takes down the system anyways. it, dive in, get some fizzzzzical.

Fri, 04/20/2012 - 23:27 | 2363115 Nukular Freedum
Nukular Freedum's picture

Problem with the freegold hypothesis of fofoa is that it requires suspension of Fractional reserve banking which isnt going to happen. Thus the paper gold market may experience deft manipulation indefinitely.
I have a one paragraph definition of the whole Freegold thesis (from Fofoa himself) together with an indepth description of the underlying fallacy of Freegold here:

In addition I have read Do Chens article on marginal utility and gold. It too is based on a fallacious understanding of economics emanating from Fofoas blog, notably a misinterpretation of what marginal value is (it is not something alonside fair or intrinsic value, there is ONLY marginal value, that is it) and its application to gold.
Gold does not have an unchanging marginal utility, a person with a million bars of gold does not append the same marginal value to an extra unit that he might have done when he only had ten units. Thus marginal utility diminishes with each unit, as according to the theory. However (and this IS interesting) the marginal utility of gold/money only approaches zero asymptotically, it never becomes zero or negative. Perhaps this is what Do Chen/ Fofoa are dimly intuiting?

Fri, 04/20/2012 - 16:36 | 2362303 Catullus
Catullus's picture

Wait for the premium on Sprott's silver fund to go 10% negative NAV and buy. Seems like a good proxy to know whether silver is "cheap".

Fri, 04/20/2012 - 16:38 | 2362322 Silverhog
Silverhog's picture

If there is an abundance of Silver, how come I can never find one pre 1964 Silver coin in my change. This is just more of the same anti precious metal rhetoric. No mention if the growing inventory is physical or paper. I have a good idea what it might be.

Fri, 04/20/2012 - 16:43 | 2362333 NotApplicable
NotApplicable's picture

It's been over a year since I've gotten one. My son managed an auto-parts store until recently, and he was still finding them regularly.

Fri, 04/20/2012 - 17:03 | 2362383 Likstane
Likstane's picture

Co-worker got an ag quarter in change from the coke machine at work last week.  Traded a FRN for it.

Fri, 04/20/2012 - 17:11 | 2362401 NotApplicable
Fri, 04/20/2012 - 22:18 | 2362998 MrSteve
MrSteve's picture

The electornic coin counters in the main banks have been tuned to sweep out the silver-content coins via their improved conductivity over the copper-nickel stuff, that's the main reason you don't find them in circulation. If you do, it is because hard times are here and folks are raiding the coin box on their dresser or the workshop countertop where they threw their pocket change.

Numismatists run age and circulation-condition distribution analysis on old coin hoards to determine what the ancient economies were doing when the hoard was buried. Finding older coins in circulation today tells you about economic conditions now. Anytime Granny dumps one of her late husband's silver coin rolls off at the local bank, it makes the news. The odd silver coin here and there is just a lucky find from some mistaken citizen.

Right now, you can buy a 6 or 7 gallons of gas for 4 silver quarters. Not bad!


Fri, 04/20/2012 - 19:08 | 2362688 WmMcK
WmMcK's picture

Gresham's Law?

Fri, 04/20/2012 - 16:40 | 2362326 riphowardkatz
riphowardkatz's picture

In brief: "Eventually, there will be a crisis of such magnitude that the political winds change direction, and become blustering gales forcing us onto the course of fiscal sustainability. "

The they will devalue and start all over again and again and again. See any Latin American country.

Fri, 04/20/2012 - 17:55 | 2362525 Diet Coke and F...
Diet Coke and Floozies's picture

The comment of the day right here...

Fri, 04/20/2012 - 16:40 | 2362328 jarrollin
jarrollin's picture

Yes.  Who wants an ounce of silver for $32, when you can now get a share of Groupon for 11 dollars?  They'll never find such a way to share coupons again.  Meanwhile, there's at least 1/8th an ounce of silver for everyone on the planet -- and companies don't need it to manufacture anything.  

Fri, 04/20/2012 - 16:44 | 2362336 kurzdump
kurzdump's picture

Fundamentals dont matter - neither for stocks nor for pm. pm will be fine next week.

Fri, 04/20/2012 - 16:49 | 2362346 loveyajimbo
loveyajimbo's picture

This mean that Uncle Bernanke is going to stop buying 60% of all the US bonds issued?  Of course, this cannot be considered "QE", as that only applies to buying Goldman and JP Morgan sub-prime trash...

Fri, 04/20/2012 - 17:11 | 2362403 NotApplicable
NotApplicable's picture

Stop? Only by moving up to 61%.

Fri, 04/20/2012 - 16:52 | 2362353 eddiebe
eddiebe's picture

When a sovereign credibly links their currency to gold and pays a decent interest rate on their bonds I'll consider selling some gold for that. To be in paper IOU's in any form in this crisis is flirting with disaster.  I have to say though that right about now it is tempting to sell some gold for some Nat. gas.

Fri, 04/20/2012 - 16:52 | 2362355 The_Euro_Sucks
The_Euro_Sucks's picture

I dont want paper bills for my phyzz, I want bits and bits, way more value! Think Ill wait till I get less then half then what I get now. I am a masochist u know. Like in 2008, paper was trading way low but sadly they were all bidding for my phyzz, sad I could not unload back then.

Fri, 04/20/2012 - 16:54 | 2362360 fuu
fuu's picture

"Given that we are fair-and-balanced "

Oh shit.

Fri, 04/20/2012 - 17:07 | 2362392 Canadian Dirtlump
Canadian Dirtlump's picture

any of you mafukkas know what the registered comex warehouse silver is looking like these days?


My house is for sale and I have told my wife we're planning to rent for 6-12 months... I hope we have the deal sealed soon because I will be looking at 2 maple monster boxes.

Sat, 04/21/2012 - 14:53 | 2363858 Venerability
Venerability's picture


I wasn't aware George Allen posted on Zero Hedge!

Fri, 04/20/2012 - 17:06 | 2362393 jhalmos
jhalmos's picture

What a burden gold and silver have, to always be the only rational thing in all of economics.

Fri, 04/20/2012 - 17:10 | 2362397 pleseus
pleseus's picture

Logical.  The price has come down.  One would expect inventories to rise in response.  Producers can adjust and reduce Silver production.

Fri, 04/20/2012 - 17:12 | 2362402 BandGap
BandGap's picture

Aren't silver producers holding their silver, as well? I own several stocks of silver metal producers and I believe they are holding their own inventories. Not sure about gold.

Fri, 04/20/2012 - 17:15 | 2362411 HeNateMe
HeNateMe's picture

Outright calls for silver/gold to drop -------> Time to buy

Well, at least for the minute percentage of investors who aren't consistently sheared.

Fri, 04/20/2012 - 17:19 | 2362428 OutLookingIn
OutLookingIn's picture

Comex Silver Stockpiles??


Can you say piles of cellulose? As in paper? I knew you could.

What little physical silver the Comex has is collaterallized, leased, contracted or otherwise encumbered.

Physical gold in the world versus physical silver in the world = billion$ more gold. Silver is rare.

Don't be fooled by the Comex crooks. Should be called the 'Crimex'!

Fri, 04/20/2012 - 17:21 | 2362442 Raymond Reason
Raymond Reason's picture

Bullish for PMs. 

Fri, 04/20/2012 - 17:33 | 2362467 cranky-old-geezer
cranky-old-geezer's picture



Eventually, there will be a crisis of such magnitude that the political winds change direction, and become blustering gales forcing us onto the course of fiscal sustainability.

Nope, not gonna happen.

Governments will borrow and spend what CBs print until the world is flooded with what they print, and its value drops to zero.

At that point CBs will have successfully looted all the wealth from their nations, leaving the people destitute and rioting (but still no revolution), while bankers and other elite hop on their jets and head off to plush secret (non-extradition) locations with most of their nation's wealth, leaving behind massive numbers of suckers holding worthless government bonds.

That's when the few wise people holding physical gold and silver will see the value of their metal skyrocket beyond their wildest dreams.

But they'll be surrounded by destitute rioting sheeple who put their trust in bankers and their fiat currency, now worthless.

Fri, 04/20/2012 - 20:37 | 2362842 El
El's picture

I have come to believe it is not about money or assets. These folks have more money than they could ever spend, even if shopping was their full-time job. They buy entire governments for pete's sake. No, I believe it is more about power and control, which further leads me to believe that they are not going to "hop on their jets and head off to plush secret...locations."

As the Boss said, "Poor man wanna be rich, rich man wanna be king, and a king ain't satisfied 'til he rules everything."

Sat, 04/21/2012 - 07:39 | 2363408 Dr.Engineer
Dr.Engineer's picture

These are not normal people.  They are psychopathic narcissists, let's say psychonarcs.  There are two main categories:

  1. Power psychonarc:  seeks power over people.  Think government.
  2. Money psychonarc: seeks more money for the sake of seeking.  Think TBTF banks.

They are in bed together now and colluding.

They are mentally unstable.

Fri, 04/20/2012 - 17:39 | 2362475 Clowns on Acid
Clowns on Acid's picture

Apple should come out with a gold iPad...'cause then you can have your gold and eat it too!

Sat, 04/21/2012 - 01:19 | 2363246 Non Passaran
Non Passaran's picture

That made me remember those golden guns from Mexican drug lords..

Fri, 04/20/2012 - 17:38 | 2362478 Samual Adams
Samual Adams's picture

Barney Fife's Take on the other side of the gold and silver coin:

"Can't print it out of thin air or create it at will"

"Only a Finite Amount"

"When it's used in a Tomahawk missle it's gone forever.  500oz/ag in every t-hawk"

"Takes actual physical labor to mine, refine, transport, etc."

"5000 yrs of human history as money"

Gold/Silver Bitchez!

Sat, 04/21/2012 - 01:15 | 2363240 Non Passaran
Non Passaran's picture

I agree but the 500oz figure seems overblown by a factor of 10x if not more

Fri, 04/20/2012 - 18:02 | 2362551 ebworthen
ebworthen's picture


Fri, 04/20/2012 - 18:05 | 2362560 jomama
jomama's picture

physcial gold/silver are the only things i can invest in right now that aren't rehypothecated/derivatized to kingdom-fucking-come.  

end of story.

Fri, 04/20/2012 - 18:08 | 2362569 mind_imminst
mind_imminst's picture

"the only thing that could break his 'hard asset' thesis - that the political and banker elite "come to their financial senses".




It will never happen. Too many people are dependents and/or do not understand fundamental economics, debt, fiat money, and fractional reserve banking. The political and financial elite will take the easy way out and print to infininty and go down in hyperinflationary flames. Take that one to the bank (pun intended). The FED governors will get carpal tunnel syndrome pressing ctrl+P before they ever think of restoring sound money.

Fri, 04/20/2012 - 18:28 | 2362613 plata pura
plata pura's picture

The ore piles must be growing or production has been shut down for the silver miners since these hamstrung speckled jumping he goats of the negev sayeth so! Verily it is unusually hard to find a dore' cone or bar.

Do NOT follow this link or you will be banned from the site!