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Silver Plunge Explained: Shanghai Hikes Silver Margins From 15% to 18%
We wonder if the collapse in silver price yesterday may have been due to just a tiiiiiiny leak of the fact that overnight, the SGE announced an imminent margin hike. From Reuters: "The Shanghai Gold Exchange said it will raise margins on silver forwards to 18 percent from 15 percent from Monday if the silver contract hits its daily trade limit on settlement on Friday. The exchange said it would lift daily trade limits on silver forward contracts to 15 percent from 12 percent if the contract hits limit up or down on settlement on Friday."
And from the SGE, courtesy of Google :
On the adjustment of silver Ag (T + D) notice of the contract price limits
Given the current silver Ag (T + D) decreased by a big margin, if today silver Ag (T + D) Contract close sealed daily limit, there unilateral market, according to exchange "Shanghai Gold Exchange Risk Control Measures" relevant provisions of the today on the final liquidation, the margin increased from 15% to 18% adjustment, the next trading day (November 21) from the Ag (T + D) contract price limits adjusted from 12% to 15%.
Invites Member units to prepare well in advance of related work and customer notification.
We can only pray that the CME does not take athe hint and start hiking margins on gold and silver on price plunges. At that point one may as well be Celente when investing in paper silver.
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'We can only pray that the CME does not take athe hint and start hiking margins on gold and silver on price plunges. At that point one may as well be Celente when investing in paper silver.'
That shot at Celente is way overdue IMHO. Kudos.
All that aside, options expiry has also played a role here.
Yeah, imagine thinking you could buy a futures contract, and put cash in your account so that you could take delivery.
Delivery! of physical metal! What a concept, sheer wackiness.
Yeah a concept for the naive. Celente is a major gobshite who has proved to be talking out of both sides of his mouth. The irony stings doesn't it?
i used to listen to that guy when he came on alternative media. i never thought he was any kind of big deal. he came on with the same old mantra everytime about the system is bad and corrupt and stay away from it and get gold and silver. and what does he do? the same thing he is always telling everyone else not to do. the guy is a bullshit artist.........of course no one will ever call him about this........frankly at this stage , his credibility is shot imho.
The man is a complete clown. It comes down to whether you believe what he said about taking delivery. I do not believe his story. No sympathy for him or anyone who doesn't do their due diligence and goes on 'faith in the system' or some such shit. Why are you buying physical if you have faith in the paper contract game being endlessly pristine and uncorrupted?
Not a huge Celente fan.....but he did predict riots in the US way before anyone else, and I listen to a lot of alternative media. I did not believe it until OWS. It doesn't take a genuis to see where this shit is all headed. But it appears that even HE is surprised at the level of blatant and obvious fraud and illegal activity that s done seemingly without fear of prosecution. All I can say is........
GET PHYSICAL BITCHEZ!!!!!!
I have not seen a riot yet...where and when did the riot occur? Keep in mind, I am from the LA area...I have seen real riots. OWS and the people taking part in it are jokes. They are not rioting, they are getting there ass kicked.
Celente is always vague in his predictions and seems more wrong than right recently. I have not kept up with his prophecies as most are fantasy. He fails to understand that the powers that be are all in. That does not mean it won't hit the fan some day, it just means they are masters at kicking the can down the road. How long can they do this is anyones guess...
man, i couldn't agree more with High Plains Drifter. celente got caught with his pants down and i find it annoying as hell that he's going around crying to anyone who'd listen to his sob story about how he got fucked. he peddled one thing to the public while doing something else in private. and it casts a huge cloud of doubt over all the other market critics with a similar message. i bet TPTB are laughing their asses off at celente.
well, gerald, you reap what you sow. better start practicing what you preach from now on.
It's my understanding that Celente and many others in this circle didn't think it was coming this soon. You know, the conspiracy to collapse the Euro and US Dollar in 2012? Many were banking on this not happening for another year and were/are trying to take advantage of the PM sale.
This is an unfair shot at Celente. I would agree to 'Celente should've listened to Celente sooner.'
I presume the bulk of his wealth is in physical gold and silver and that he was speculating with funds in his Lind Waldock account, building up his cash balance in order to take delivery of another bar of gold. He was playing the same game the Spec Longs have been playing for years now -- hoping to get his contract bought out at a premium by JPM then rolling it over into the next contract. Unfortunately, MF Global is a criminal enterprise and the CME/COMEX/NYMEX is run by a cabal of thieving banksters. He got taken. He rolled the dice one time too many it would appear. His stragegy for building ounces of physical is not at odds with what he's been advising. Many commodity traders were doing the same thing.
The notion that somehow Celente is a douche for trading futures contracts on the COMEX as part of an investment strategy to acquire physical metal doesn't compute. Obviously, there are inherent risks in doing so. It does not invalidate his advice about buying PMs.
Is it also possible Pegasus that GC may have been short a few contracts to hedge against all of the manipulation? That also may have seemed like a decent idea at the time.
I watch him free in the alternative media. Screw buying his services. If he did not hold on to the physical asset, how good is his analysis?
yeah, and whatever happened to his "game changer" this year? was it cold fusion? riiiiiiiiiiiight.
I almost opened an account with Lind Waldock, because of its good reputation, and the fact that it allowed small account holders to take physical delivery of metal. Yep, call me wacky.
There but for the grace of the Market Gods ...
You act as if Celente was TRADING paper PMs. All of the info I've read said he simply purchased gold contracts to take physical delivery...That's a good thing...
Exactly! The ignorant throw rocks yet don't have a clue. As I stated in another post, this is how the Futures Market was originally designed to function; producers and consumers could establish a price for a commodity to be delivered at a future date; thus the name FUTURES.
what, he couldn't just buy PMs on his own? he couldn't open an account with Gold Money or Mike Maloney's company? his excuse is bullshit. he's been railing against these corrupt fuckers for years in public while doing business with them in private. wouldn't surprise me if he were short. the lesson to take away here is: never trust anyone who has something to sell you. just buy physical and put them away.
Gene tends to overlook facts in his mindless rush to post first.
Dear Blowjob,
Celente's story is at best hearsay. I'm glad you know the facts.
You remain an eternal idiot.
Sincerely,
Eugene
ps: sorry that you read at the pace of a 5th grader.
No worries trolly, just continue with your mindless posts.
jeez youre a moron.. ive watched about 5 interviews with Celente now.. each time it is clearly stated that he was playing the futures/paper as a side money maker. he even called it gambling. the dude is worth well over 1 million dollars... yet he lost six figures ... so a max of $999,999 ... do you think he's bankrupt now? no. anyone with a clue and arent bias actually heard the facts of the situation.
Sincerely,
fuck your ignorance.
All of the info I've read said he simply purchased gold contracts to take physical delivery
After all the shit the Awakened (as in ZH readers and other people who see the trainwreck coming) that was just idiotic. Contact Tulving and buy physical for delivery. Some of their gold coins have only a $9.95 premium over spot.
Naieve? Knave?
SellAnte definitely has called it clearly. For some reason, he must have awesome sources and a clear nose for trends.
It's his acccent that trips me out. He sounds like a mafioso. All joisy italiano (or is it mass?).
Anyways... clearly this news is mid-term SILVER BULLISH!
If they need a far east exchange in partnership to supress, can you imagine what they are suppressing? Naked co-ordinated take-down. I smell fear in the aether.
ORI
Creative Journey
His forum pimps stopped as well. Maybe he can't afford their services anymore.
Noticed that also. My work is done.
C'mon, just raise the margins to 100% and get it over with already. Then we will really see the emporer's clothing on the fiat currencies. More coordinated manipulation as a smokescreen ahead of massive ECB printing in the near future.
I don' think he anticipated problems with the paper markets this soon. Either way...WHOOPS!
Good Morning everyone! Do you know where your non margin clearing house cash is?
More "burned" fingers in the metals market. How many here still have segregated accounts trading S or G? It would appear more like a sly warning from the MFing episode, and another by margin hikes.
MFing was a shot across the bow that took the railings out.
Repeatedly burned fingers are reluctant to pick anything up again!
I seem to recall the experts saying that the most cost effective method of acquiring physical gold and physical silver was through a fully paid up futures contract.
It would seem that this concept has been shot down in flames by the MF Global bankruptcy.
Paper is paper and physical is physical. I don't think it should detract from Celente per se, but I am scratching my head on him playing paper roulette.
I'll just keep stacking and wait for DHS to knock down my door in the meantime.
If you listen to hime talk, "badda bing badda boom! heeeey!" you bet your ass he is a gambler. and ther is nothing wrong with that people. It takes $ to make $. as long as when you leave the casino you "cash out" into gold or silver and dont leave with those worthless deniminated pieces of paper.
takes a man to admit he fucked up..and share it with all ...good man celente
I figure Celente's entitled to fuck up like anyone else.
His has been a loud and consistent voice for many years.
That being said. take a break.
OpEx for metals next week, too...games to be expected
I'll take Epic Fraud for $100 thanks Alex.
Just thought of something. Maybe they are all raising margins to get more cash into their company to fund their retirement ala MFG. Seems to be working for Corzine, just need to figure out who to pay off for no investigation.
Ah. Come on, Make it a true daily double...
no leak, that would be immoral. we all know that these markets are holy
Was there a leak?
<Tim Geithner voice> No leak.
I don't think this entirely explains a drop of 6% in the spot silver price.
Agreed, and other then the fear of additional hikes, why has it not recovered?
Perhaps there is more?
OR maybe that is all there is and in a few days silver will be back!
But one thing is for shore, no matter what the reason - keep on STACK'N BIITCHES!
shanghai isn't big enough to crush the price of silver....pumperz need to stop grasping at straws
The days of trading Metal Futures are gone, forever.
There, I forecasted a trend. Pay attention Gerald.
its the withdrawal from leverage , no ones willing to risk money in a leveraged market and all that volume is drying up. expect all markets to shrink as cheap money for bets disapears.
Paper markets are gonna blow up. Get physical and shares NOW.
libertarian86.blogspot.com
Let's get physical physical
"We can only pray that the CME does not take athe hint and start hiking margins on gold and silver on price plunges."
Actually the opposite. I want lower price of gold, so as to buy more.
‘We had to increase margins for reasons of stability’ and yet the result is instability, do you see how this works ?
But Silver on Shanghai Gold Exchange didn't close limit down on Friday(China time). Therefore, the margin level has not been raised.
Celente used the Futures Market exactly the way it was originally intended. You put your money down and buy a contract with the intention of taking delivery. On the other hand, a producer would sell something on a Futures contract with the intention of delivering. This is a true hedge and what the CME & CBOT were designed to do. It's been the past few decades where the Futures have degenerated into a gambling casino. I sold corn, soybeans and hogs this way back in the late 70's/early 80's when farming.
ZZzzzzzzzerohedge
Yes go ahead and hike margins to 100% please
+1 cat2
the manipulators hope that we who like the shiny stuff lose our lust for it before they have to raise to 100%.
this is a war of patience. they fail to see that all governments are helping us with their love for debt. They hope for a "recovery" in time to prevent 100% margins.
Of course, every time they hike. go buy physical. the noose gets tighter.
et tu shanghai? you raise your margins against me also?
Again we see SLV trending and closing higher than the JPM stock price for a few days and what happens?
Silver Plunge Explained: Shanghai Hikes Silver Margins From 15% to 18%
So we can update our charts below which show that when SLV closes above JPM for a few days, a margin hike is all but guaranteed. I have sent all of you these charts already but I beg you to take another look. This is not a coincidence.
The highlighted boxes represent the times when the SLV was trading above JPM and margin rates were increased. The purple line is JPM’s stock price. Now plot all Margin hikes (CME, Interactive Brokers, Shanghai). Notice anything? Every time SLV gets above JPM there is a margin Hike.
1) The 5 Hikes from early May (Everybody raised)
2) 8/03 Interactive Brokers
3) 9/23 China/ CME
4) 11/18 Shanghai
And here is the note I sent yesterday to some of you:
“Notice the for the last 4 days SLV has closed above JPM. We are now in the danger zone for either margin increases on silver or central bank intervention…..If the CME has accepted JPM stock a collateral for their enormous silver short, we can expected the CME to intervene time and time again to protect themselves. I also included an hourly chart below this one.”
It looks like there is too much heat on the CME and so Shanghai carried the torch.
And the hourly
Links please?
Raising the margin in Shanghai by 3% points didn't do much except spook all the people holding until a material drop in demand for this primarily INDUSTRIAL metal reveals itself. Then down the elevator. Junk at will.
Spook all the people holding PAPER, some number of whom are likely to move into physical.
Also note that without speculators in paper markets, paper prices will become more volatile.
As paper prices fall down the elevator, as you put it, real demand increases, causing premiums to spike, which will cause more people to stand for delivery as that is the only place left to get physical (maybe), breaking the exchanges once and for all.
With the exchanges broken, the industrial users who used them to hedge price changes are suddenly forced to go to the open market, and buy enough for their operations all at once, creating an industrial panic, which sends the price of physical soaring, likely until it reflects the reality that there is one third the silver on the surface of the earth as there is gold, and that at current production rates, assuming no use of silver industrially, it would take some 5-10 years to reach the same supply as gold.
This is a recipe for disaster, and has been since the moment silver suppression efforts began.
The whole premise of industrial panic buying makes sense, except when they don't actually NEED to take delivery in the amounts previously needed. I'm talking post-industrial, free market, liquidity freeze, deflationary economic meltdown. We can only give sweetheart funding deals to solar companies for so long. And before you say what a small % of the market solar is, remember how often the Ted Butler true believers will sing its praises as a major source of demand. Please don't just use this argument when convenient.
If you expect a total systemic crash/zombie apocalypse then no, silver is not the way to go.
If you think the world will either not collapse all at once, or will recover, then silver is the way to go.
The margin requirement was raised by 20%, not by 3%. But otherwise I think your scenario is quite likely :)
(Incidentally, how long will ZH continue to get the direction of causality wrong when this happens? Margin hikes are a response to volatility, not the other way around. From the CME site: "As part of our overall risk management program, margins are adjusted frequently across all of our products based on market volatility. When daily price moves become more volatile, we typically raise margins to account for the increased risk. Likewise, when daily price moves become less volatile, margins typically go down because the risk of the position also decreases." I suppose alleging a leak every single time is still more fun than reporting reality, eh Tylers?)
I could give a flying fuc about the paper market. Phyzz and phyzz alone at the end of the day.
I took the opportunity stack a little bit. I'm still looking for a bigger sale before Christmas.
I wish those manipulative fuckers would sell their physical silver for $5 to me.
Very bullish for any commodity. I like to see prices rise based on cash purchases of whatever it is rather then credit.
Buying stuff on credit has lead to too many Bubbles. Buying on cash leads to solid gains. Look at housing Bubble...tech Bubble...etc.
Oil, PMs and some other hard assets are not bubbles since they are mostly bough with cashola. That's what i gleaned from MSN Money's Jim Jubak.
GL!
who owns the Shanghai Gold Exchange?
Me. :)
Well I suspect it is Goldman Sachs or something like that.
the usual suspects.
http://dont-tread-on.me/?p=4119
When everything has been trashed to infinity and the leaders are regarded as treacherous by the majority,that is when Gold and Silver will be the only confidence left and there value will go absolutely hyperbolic.They will be the only spendable wealth accepted by anyone.Every Bullshit Crap day of manipulation brings the day of true debt free wealth nearer and nearer.
This is a good thing...takes out the gamblers and leaves the strong hands....and that scares the hell out of the Banks....but I also think Options expiry on Tuesday is a part of it....can´t have anyone take posession of the real stuff...
I just buy more and more evrytime they decide to put the shiny stuff on sale.
BTFD?
Bitchez?
Nothing is more warm and fuzzy than real, Cold Silver in my super vault, guarded by my fanatic servant Achmed. I rescued him from a middle eastern warzone and educated him in the martial arts.
Just checked my stash. Yep, still shiny and thunk-y. Say what's on sale this week?
Looks like the Cum swallowing Timmy and cock sucking benny were on the gold manipulation thingy this morning already.
FUCK YOU's Bernanke and Geithner,
Hopefully, someday, fundamentals will matter again. In the meantime, I guess I will have to go shopping again. lol
I think you folks need to realize the commodity bull market is history.
Maybe goldie makes one more run, but all others are TOAST!
Oh, did all the central banks around the world stop printing money, and raise interest rates to market levels?
No?
Well then I think you have no idea what you are talking about.
Commodities are economically sensitive, dumbass.
Money supply is not the only determinant.
Yes and no.....Gold and silver are also money. Money supply is the main determinant in this case.
I would argue silver is more of an industrial commodity. Its not really a "store of value" like gold.
It is both.
When you have something that is a store of value, but with decreasing suppy, the value doesn't fall, it rises.
This is not rocket science.
I would argue silver is more of an industrial commodity. Its not really a "store of value" like gold.
Oh Stockie- we are led to believe it is an industrial metal by the banksters and mainstream media, and obviously, it has many practical industrial uses today. But on a long term historical basis, silver is money. Even the worthless piece of trash called the Consitution says it is money.
It used to be money. Then the Treasury started making coins out of other stuff. It is no longer money.
Silver has not performed anything like gold. Wonder why?
I see you guys pointing to lousy bank charts to prove your points that the banksters suck.
Look at the charts of most of the commodities. They all look like crap as well.
Think China has a soft landing? The commodity charts are saying something conpletely different.
It used to be money. Then the Treasury started making coins out of other stuff. It is no longer money.
Silver has not performed anything like gold. Wonder why?
I see you guys pointing to lousy bank charts to prove your points that the banksters suck.
Look at the charts of most of the commodities. They all look like crap as well.
Think China has a soft landing? The commodity charts are saying something conpletely different.
The confusion that the manipulation has created is of epic proportions. If I see debt rising, I see my stack rising. Default on fiat debt or devaluation(which is essentially a default) are the only options to get rid of the debt besides war of course.
http://www.youtube.com/watch?v=N51HGcN9OPE
I'm looking at the chart and I see a downtrend. Looking for other explanations is a waste of time IMO.
Silver is sitting on top of the channel it has been in for the last ten years. You see a downtrend? I see silver breaking out as someone deperately tries to cap it with margin raises.
Could these margin hikes be just a ploy by TPTB to get more of the margin money to help pay off the leveraged debt and at the same time cripple those investing in commodities?
It costs a billion to move gold one dollar in price. Silver can be bitchslapped around the room for much less. It can be used as a rudder on the commodities market. You trash silver and it has a negative effect on gold. Check the tics during the mayday drive-by, it all started with a silver blowout.
Op-ex is a factor, but the banks were commissioned in the 1960s to control the price of silver, LBJ remarked that no one would profit from melting old coinage, hindered by our then huge stockpile being sold into the market. They get a free pass when butt raping the silver market, it's so patriotic.
Silver is their nightmare, and our pipedream. This is WAH.
As far as a recession damping the industrial demand, we have been in a recession since '08 at least and industrial use has increased each year. Demand is fine, we have a problem with captive regulators and massive naked shorting, designed to keep everyone on the fiat dollar farm.
Sorry about the rant, but silver's my hobby and I have developed this neurosis.
to da moon WOOHOO WOOT WOOT (etc, etc)
was almost out of the three ply Lehman's I picked up at a fire sale a couple of years back. I'll need something with the extra comfort a discerning gentleman like myself requires soonChristian Louboutin Heels Alexander Wang Shoes Christian Louboutin Sale Discount Christian Louboutin Shoes Womens UGG Boots
Alexander Wang Bag | Alexander Wang Shoes | Alexander Wang Rocco Alexander Wang Frankie Creeper Short crude oil. The world is swiming in oil as everything else. Its elevated price is just a scam. The probability of war is zero. Uncle Sam can´t go to war against Iran because both its flanks are insecure. The left flank goes to the Straits of Hormuz and if that is closed this means crude price $300 and Stalingrad for US forces in Iraq and other US vassal states in the gulf. As for the right flank that supply line goes through Pakistan. It´s shaky enough as it is.
I got mines anyway. I ain't worried. I'm stacking full speed ahead.
we should all hope for a gentle exit for the manipulators..cause going to low now and supply issues would mean very obvious decoupling and massive march to silver.. or just massive price rises for doing nothing....The end of the game will mean no more silver buying for the little man.. we will wake up to non available.. the big people will get it all straight from the miners??