Silver

[jefftheshark]

That's why I always liked silver better it had the historical relationship to gold and historically it was undervalued just by that measure in relation to it, but I wasn't the only one who knew that or knows that it's relatively common knowledge and it's riding the perfect waive right now, just the right amount of doom, just the right amount of printing, just the perfect setup to go ape.

I'm glad I have what I have, wish I had more, but that goes for every home run you ever hit investing.

It would be ironic if the black swan in all this is JPM's silver short, the ultimate tin foil hat theory wins the race.

Like the Southpark where the mormons were the ones who had it right.

I recently read a very well thought out piece where they discussed how the silver market could be the undoing of the US government and I thought at the time "Well that's interesting, but kinda far-fetched" but now I'm starting to wonder.

Its a little bit convoluted so bear with me.

The theory was that about a dozen years ago China had a massive amount of silver in its vaults which wasn't doing it any good sitting there so they lent it to the major brokerage houses in exchange for cash which they used to buy US treasuries.

As long as silver kept a steady price, all was well as the owners of the silver could suppress the price by shorting it everytime it went up. If the price of silver goes way up, however, then the cost to repurchase the silver to pay back the loan to China goes astronomical. In 2007 the Chinese are supposed to be repaid, but the brokerage houses can't do it.

So Bear Sterns goes tits up along with several of the other houses and the banking system is basically nationalized. So China goes to the US and says repay us, but they can't/won't do it either. China now has a bunch of dollars they're worried about so they start buying massive amounts of SLV and futures from COMEX but instead of taking redemptions in cash they're now taking it in physical. Since the US treasury is backstopping the TBTF banks, they have been shorting silver with everything they've got to keep the price down so that the Chinese get the metal without a default occurring which would kick over the entire apple cart.

The analogy would be like if I (the banks) came to you (China) and borrowed a thousand dollars and when the loan was due I told you to pound sand. So you go to my wife (the US taxpayer) and borrow a thousand dollars and when she comes to collect you tell her "not my problem, go talk to your husband".

If (and who knows how big an "IF" this is) this is true then at some point the pain will become too much for the US (since a short squeeze can theoretically go Buzz Lightyear - "to infinity and beyond") and step aside and let JPM fail. At that point in time then the price of silver will revert back to more historical norms, but the stock market along with the bond market will collapse.

Its hard to see which of these two options is the one which I'd care to live through, although I guess I don't have any choice in the matter either way.

I guess, what I'm saying is that it might be good to hedge a bet on silver at some point, perhaps take a little off the table as it hits new highs, because unless their is complete and total currency collapse, silver isn't going to go up forever without bigger problems stopping it in its tracks.

Just my .02

JTS

 

[LVG]

and step aside and let JPM fail.

Not sure this would happen right now. Financial reform didn't address the interconnectedness of large financial firms. Any large failure at this moment, unless managed very very competently (not sure it can be done), would trigger another cascading failure across the financial system.

Nobody is going to let that happen.

JMHO.

 

[jefftheshark]

Not sure this would happen right now. Financial reform didn't address the interconnectedness of large financial firms. Any large failure at this moment, unless managed very very competently (not sure it can be done), would trigger another cascading failure across the financial system.

Nobody is going to let that happen.

JMHO.

This makes the assumption that everything can be controlled.

I would suggest that the real world operates differently.

JTS

 

[LVG]

This makes the assumption that everything can be controlled.

I would suggest that the real world operates differently.

JTS

I don't think it can be controlled as a whole, but I do think that various parts and pieces can be manipulated to the extent to prolong the life of the system. JPM is one piece of that system, and they could be supported to an extent to keep them functional.

Of course, that assumes that those in charge know of the problem and are being proactive in supporting the system. Personally, I think they are, given the collapse 2.5 years ago.

All they have to do in order to keep the system alive is to stop a cascading failure before it reaches the critical stage.

[edit] And if you do think that will happen, I would recommend going to Costco and buying up those buckets of wheat I've seen on sale. Don't forget the rice and beans. The effect will be catastrophic.

 

[conraddobler]

Not sure this would happen right now. Financial reform didn't address the interconnectedness of large financial firms. Any large failure at this moment, unless managed very very competently (not sure it can be done), would trigger another cascading failure across the financial system.

Nobody is going to let that happen.

JMHO.

I agree to a point.

It's obvious they're licensed to do nearly whatever to save the system, the tarp bill, the bank bailouts, the stimulus, the FED all these things are preservations of the system and all of them imply ANYTHING will be done.

What JTS is saying is that there might be some things you can't get a handle on, ie no amount of printing will help, it'll only make it worse and the scenario he laid out somewhat fits that, it's a darkhorse for sure.

It'll be something like that, where there's a catch 22 and the cure for it blows something up when used.

A good analogy is a car with a bad transmission on a windy road, and you're being chased by someone bent on killing you.

Even though the transmission is goofed the only way to avoid death is to step on it, further stressing the transmission, you can't work on it while moving, you can't get far enough ahead to stop and fix it.

Every crisis requires more gas to overcome the building problems in the transmission.

It's obvious how this ends.

 

[LVG]

What JTS is saying is that there might be some things you can't get a handle on, ie no amount of printing will help, it'll only make it worse and the scenario he laid out somewhat fits that, it's a darkhorse for sure.

It'll be something like that, where there's a catch 22 and the cure for it blows something up when used.

...

It's obvious how this ends.

I agree, but let me expand on my thoughts.

If I was managing this whole show, I have two concerns:

1. Maintenance of the system as long as possible;
2. A managed, slow failure of the system when it becomes inevitable.

So, for #1, you're already seeing this (as you've pointed out) through the use of unprecedented interventions and bailouts.

However, since I'm managing this thing, I know there's only so long that I can keep the machine running, and that any breakdown that I anticipate will probably not be the breakdown that blows the entire system apart. Thus, my primary concern is once the system starts to suffer a fatal error is to slow the failure down as much as humanly possible so that people can react and new systems can be put in place.

E.g. what emerges from the ashes?

Catastrophic failures usually have one thing in common - they happen so quickly that no one can react in time to either stop or to mitigate the failure. That happened with Katrina - the flooding of the city happened so quickly and was unexpected that it overwhelmed the 1st responders, which in turn left the feds unprepared.

Thus, to use JPM in this example, I'm aware that JPM is in serious trouble. I know that JPM will probably fail. So I have to ask myself if I want to let it fail according to a plan, or to prop it up as long as possible and see if it sticks.

Failure or propping it up isn't the end goal - keeping the system running (perhaps alive would be more apt) is. If that isn't possible, then I want to slow the failure of the system as much as possible to allow other government entities as much time as possible to plan and prepare.

Make sense?

 

[conraddobler]

I agree, but let me expand on my thoughts.

If I was managing this whole show, I have two concerns:

1. Maintenance of the system as long as possible;
2. A managed, slow failure of the system when it becomes inevitable.

So, for #1, you're already seeing this (as you've pointed out) through the use of unprecedented interventions and bailouts.

However, since I'm managing this thing, I know there's only so long that I can keep the machine running, and that any breakdown that I anticipate will probably not be the breakdown that blows the entire system apart. Thus, my primary concern is once the system starts to suffer a fatal error is to slow the failure down as much as humanly possible so that people can react and new systems can be put in place.

E.g. what emerges from the ashes?

Catastrophic failures usually have one thing in common - they happen so quickly that no one can react in time to either stop or to mitigate the failure. That happened with Katrina - the flooding of the city happened so quickly and was unexpected that it overwhelmed the 1st responders, which in turn left the feds unprepared.

Thus, to use JPM in this example, I'm aware that JPM is in serious trouble. I know that JPM will probably fail. So I have to ask myself if I want to let it fail according to a plan, or to prop it up as long as possible and see if it sticks.

Failure or propping it up isn't the end goal - keeping the system running (perhaps alive would be more apt) is. If that isn't possible, then I want to slow the failure of the system as much as possible to allow other government entities as much time as possible to plan and prepare.

Make sense?

It makes perfect sense, but what you can't know is that saving JPM isn't the thing that finally causes everyone to say, OMG nothing can ever fail they're going to print to infinity, I must get rid of my dollars right now, boom dollar goes down and the system with it.

See what I'm saying?

At some point the saving is possibly the thing that makes it go boom.

And WE CAN'T know where the button is but it's there.

Our entire monetary system is based on faith, once the faith goes it goes.

The assumption in your arguement is that you know where the pressure points are but you don't, because your own actions are in fact themselves pressure points.

So in that hypothetical JPM is the straw, saving it places it on the camels back, not saving it places it on the camels back, you can't win, game over.

We have a chance here to build a new monetary system, one that truly serves the people, we have the technology, we know what's right and we know what the old system was all about.

Let me ask you this, picture this going on another 10 years, 10 years of saving the old system, how perverted will our country be after 10 years of that?

We are all afraid, and that's not unexpected but that fear is corrosive and it's dangerous, and it's better to face it right now than to let it gnaw on people until they don't even resemble themselves anymore.

It does not have to be this way, if a tornado hits a town it's amazing how resiliant it is, but if you crush it's hope, it'll just fade away to nothing.

 

[LVG]

It makes perfect sense, but what you can't know is that saving JPM isn't the thing that finally causes everyone to say, OMG nothing can ever fail they're going to print to infinity, I must get rid of my dollars right now, boom dollar goes down and the system with it.

See what I'm saying?

At some point the saving is possibly the thing that makes it go boom.

And WE CAN'T know where the button is but it's there.

Our entire monetary system is based on faith, once the faith goes it goes.

The assumption in your arguement is that you know where the pressure points are but you don't, because your own actions are in fact themselves pressure points.

So in that hypothetical JPM is the straw, saving it places it on the camels back, not saving it places it on the camels back, you can't win, game over.

At this point people are acting like they are all in denial, which is typical, and I don't mind it's normal but there will come a time where a choice needs to be made, and that choice is critical to the outcome of this mess.

We can either learn from all this junk or dig ourselves another deeper hole, my goal is to prepare people for that choice, so they are not shocked, not to scare them, not to make them depressed but to make that hard choice when the time comes from a place of inner peace and strength to build a much brighter future and not sink into a cess pool of stupid and evil.

There will come a day we all have to chose, it's more important than anything else we can do.

The guides for that choice IMO are freedom, integrity, truth, justice all the biggies, if the solution isn't based on that, you're being hoodwinked AGAIN.

THAT would be a tragedy and IMO must be avoided, the actual collapse isn't the end of the world, far from it, dosen't have to be more than 6 months of real pain, then we get started on the good.

Fear is the enemy here.

Stop editing your post so I can respond to it

What you're talking about is referred to, in quantum physics, as the Heisenberg Uncertainty Principle. Meaning that no matter what action you take, it affects the markets as a whole in unforeseeable ways (yes, I bastardized it. Sue me, nidan ).

I agree with you that the primary "force" holding up the US dollar is the faith in it. However, I would disagree with you that it is the broad public faith. I would argue, instead, that it is the faith of the bondholders that determines the overall public attitude towards the dollar.

Therefore, it is not necessary to have the entire public's support - the majority will support the dollar so long as the bondholders do. The bondholders will support the dollar so long as it is in their best interest to do so.

So, all you need to do is maintain the support of a very small minority to ensure that the system doesn't come crashing down - and to maintain the support of that minority, all you have to do is make it in their best interest to support the dollar, which is much simpler to do than to deal with the entire world or US public as a whole.

The problem is that the bondholders will eventually wake up (if they haven't done so already) and start to move their money, and then the real economic laws kick in - which is the precipitating event which marks the end. However, so long as the bondholders are persuaded that it is in their best interest to stay with the current system and behind the dollar, there are almost infinite tricks that can be pulled to keep the system running.

The pressure points that come up, in the interim, don't have to be diagnosed in advance. They can be diagnosed after they happen but before their effect starts to spread. This is best seen with the collapse of Bear and Lehman - their doom was already written, but in the case of Bear, intervention stayed the precipitating event, Lehman instigated it - but even after it was instigated, quick & sufficient action was enough to reverse it.

The one thing that is always missing in these scenarios is the effect of human action upon the system. That human action could either make things better, or make things worse, or have no effect at all. Right now (viewed solely through the prism of keeping the machine functional), we have people in places of power who are able to do that.

 

[jefftheshark]

Everything works until it doesn't.

The "tell" as Conrad said earlier is oil, but I think it's the dollar. Everything else - silver, oil, commodities, bonds, FX etc. are symptoms driven off this one ailing instrument. Traditionally when times get tough in the world, the safe haven is the US and its currency. If you're in a place where the barbarians are about to sack your village, you'd grab your cash and make a dash.

So this is the thing to start watching. Because the world is beginning to unravel a bit and they're grabbing gold and silver instead. Scared people who are willing to part with more dollars to secure those things which they best believe with have value on the other side are a very powerful indicator of the future. Spreads between physical metals and paper, plus spreads between quoted price and coins are getting wider by the day - which is the first whiff of panic in the air. If we continue to see unrest across the globe and the dollar continues to go down then the canary is starting to wobble about in its cage.

This would be a loss of faith, and faith, like virginity, is difficult at best to get back.

This week is options expiration week for PMs so I would expect to see the price come down. It always does as the shorts throw the kitchen sink into pushing the price down as low as they can to avoid the bloodbath for another month. This would be the time to buy because the next breakout could be spectacular. This is of course my opinion, and not trading advice.

JTS

 

[conraddobler]

Stop editing your post so I can respond to it

What you're talking about is referred to, in quantum physics, as the Heisenberg Uncertainty Principle. Meaning that no matter what action you take, it affects the markets as a whole in unforeseeable ways (yes, I bastardized it. Sue me, nidan ).

I agree with you that the primary "force" holding up the US dollar is the faith in it. However, I would disagree with you that it is the broad public faith. I would argue, instead, that it is the faith of the bondholders that determines the overall public attitude towards the dollar.

Therefore, it is not necessary to have the entire public's support - the majority will support the dollar so long as the bondholders do. The bondholders will support the dollar so long as it is in their best interest to do so.

So, all you need to do is maintain the support of a very small minority to ensure that the system doesn't come crashing down - and to maintain the support of that minority, all you have to do is make it in their best interest to support the dollar, which is much simpler to do than to deal with the entire world or US public as a whole.

The problem is that the bondholders will eventually wake up (if they haven't done so already) and start to move their money, and then the real economic laws kick in - which is the precipitating event which marks the end. However, so long as the bondholders are persuaded that it is in their best interest to stay with the current system and behind the dollar, there are almost infinite tricks that can be pulled to keep the system running.

The pressure points that come up, in the interim, don't have to be diagnosed in advance. They can be diagnosed after they happen but before their effect starts to spread. This is best seen with the collapse of Bear and Lehman - their doom was already written, but in the case of Bear, intervention stayed the precipitating event, Lehman instigated it - but even after it was instigated, quick & sufficient action was enough to reverse it.

The one thing that is always missing in these scenarios is the effect of human action upon the system. That human action could either make things better, or make things worse, or have no effect at all. Right now (viewed solely through the prism of keeping the machine functional), we have people in places of power who are able to do that.

Well what you're saying is exactly what they are doing without any real worry about it's morality.

My problem with it is that it's wrong, period.

I get why they would want to do it and I get that they may "choke, cough" mean well, but that's why they say the road to hell is paved with good intentions.

JTS is right though, it works until it dosen't, no one knows where that point is exactly but it's in there and once it gets hit, the whole thing goes much faster than anyone can react, like a day.

In the meantime we all are just along for the ride, I agree with JTS that the price of PM's and silver is nearing a correction, possibly and will be looking for a new buying opportunity.

I really hate mania's like this though, once you notice your hair stylist buying silver it's time to start being cautious buying more of it IMO.

Not trading advice.

 

[LVG]

Well what you're saying is exactly what they are doing without any real worry about it's morality.

My problem with it is that it's wrong, period.

I get why they would want to do it and I get that they may "choke, cough" mean well, but that's why they say the road to hell is paved with good intentions.

I don't disagree with you at all. Is it moral? Hell no it's not.

But it doesn't matter if it's moral or not - they are trying to save the existing system, and are doomed. However, that doesn't mean they won't give it the old college try.

If they were moral about it, then I would expect them to be putting together either a new system while keeping the old afloat, or at least having everything in place to pick up the pieces and start building again. But I see zero evidence of that right now.

JTS is right though, it works until it dosen't, no one knows where that point is exactly but it's in there and once it gets hit, the whole thing goes much faster than anyone can react, like a day.

In the meantime we all are just along for the ride, I agree with JTS that the price of PM's and silver is nearing a correction, possibly and will be looking for a new buying opportunity.

I really hate mania's like this though, once you notice your hair stylist buying silver it's time to start being cautious buying more of it IMO.

Not trading advice.

Bingo. It's not the problems you can see that will get you, heck you can get some of the ones you don't see, it's the one that comes out of left field and happens so fast the entire system blows up while you're still staring at the monitor trying to figure out what's going on.

But none of that is my point, CD. You, JTS, and I probably agree on 95% of this stuff.

My point is that the system will probably hang on much longer than any of us expect. We all know it's dying, and just looking at the patient we're all pretty sure that his time is limited. But, what we don't see is the team of doctors behind the door getting ready to put him on permanent life support.

Does that change the end result? No. But it does prolong it.

 

[conraddobler]

I don't disagree with you at all. Is it moral? Hell no it's not.

But it doesn't matter if it's moral or not - they are trying to save the existing system, and are doomed. However, that doesn't mean they won't give it the old college try.

If they were moral about it, then I would expect them to be putting together either a new system while keeping the old afloat, or at least having everything in place to pick up the pieces and start building again. But I see zero evidence of that right now.



Bingo. It's not the problems you can see that will get you, heck you can get some of the ones you don't see, it's the one that comes out of left field and happens so fast the entire system blows up while you're still staring at the monitor trying to figure out what's going on.

But none of that is my point, CD. You, JTS, and I probably agree on 95% of this stuff.

My point is that the system will probably hang on much longer than any of us expect. We all know it's dying, and just looking at the patient we're all pretty sure that his time is limited. But, what we don't see is the team of doctors behind the door getting ready to put him on permanent life support.

Does that change the end result? No. But it does prolong it.

Oh I agree with you actually.

It's like waiting on a woman to get ready to go somewhere if you work it all out as to when you think they'll be ready to go in man time, you're going to think she has vanished out the bathroom window way before she emerges ready to go.

Your analysis is why I've always said up to a decade, which to be honest I've said since 2008, so I can see this maybe making it to 2018-2020 as a rough guess.

Just a guess based on the principle you're talking about.

However there are things out there that could make it happen tomorrow.

I doubt that honestly, too many people are looking for it now which is why I would expect everything to get better, perhaps even semi good for some and then blindside everyone out of nowhere when it comes.

 

[jefftheshark]

The other day I said that the dollar, rather than oil was the "tell" - contrary to what CD had posted earlier. But I'm now reconsidering that position in the light of new developments around the globe.

Nomura has a paper out on ZH that says if both Libya and Algeria go offline (not a stretch by any imagination) then Brent could jump to $220 very quickly. It's said that 50% of Libyan oil is already offline and the headlines don't make it look like this is going to quickly change to the better.

There is a Facebook revolution page up for Saudi Arabia that's probably fake, but.....who knows these days?

These kind of events are the proverbial "Black Swans" (which by the way should be required reading by all policy makers - and I'm not talking about the ballet movie either ). A true Black Swan is a game-changing event which everyone later says they should have seen coming - but didn't. And this situation would seemingly qualify.

The weakened dollar might have been one of the heavier straws which strained the camel's back, but revolution and supply disruptions trump that influence.

So anyway, in hindsight I'm awarding Conrad a +1 on this one.

JTS

 

[conraddobler]

The other day I said that the dollar, rather than oil was the "tell" - contrary to what CD had posted earlier. But I'm now reconsidering that position in the light of new developments around the globe.

Nomura has a paper out on ZH that says if both Libya and Algeria go offline (not a stretch by any imagination) then Brent could jump to $220 very quickly. It's said that 50% of Libyan oil is already offline and the headlines don't make it look like this is going to quickly change to the better.

There is a Facebook revolution page up for Saudi Arabia that's probably fake, but.....who knows these days?

These kind of events are the proverbial "Black Swans" (which by the way should be required reading by all policy makers - and I'm not talking about the ballet movie either ). A true Black Swan is a game-changing event which everyone later says they should have seen coming - but didn't. And this situation would seemingly qualify.

The weakened dollar might have been one of the heavier straws which strained the camel's back, but revolution and supply disruptions trump that influence.

So anyway, in hindsight I'm awarding Conrad a +1 on this one.

JTS

Nah.

I was just guessing, I enjoy reading both your stuff and LVG's stuff and it's amazing how similar most of what we say is.

What's actually disconcerting to me is the speed of all this, it's way out of control now, and if Saudi Arabia ever gets any hint of this we're in OH Sheet territory fast.

There better be very late nights going on at State the CIA and with our military because we are on the cusp of a crap storm here IMO.

Maybe they think it's a great opportunity to bury all the sins of the past under some exogenous event and wipe their hands of it but I wouldn't go there, not with this stuff, this stuff is frankly starting to get out of hand.

 

[LVG]

Nah.

I was just guessing, I enjoy reading both your stuff and LVG's stuff and it's amazing how similar most of what we say is.

What's actually disconcerting to me is the speed of all this, it's way out of control now, and if Saudi Arabia ever gets any hint of this we're in OH Sheet territory fast.

There better be very late nights going on at State the CIA and with our military because we are on the cusp of a crap storm here IMO.

Maybe they think it's a great opportunity to bury all the sins of the past under some exogenous event and wipe their hands of it but I wouldn't go there, not with this stuff, this stuff is frankly starting to get out of hand.

I think Saudi Arabia and most of the world knows what's going on here. They see what's happening and know there's time to reverse it, and won't write off their investments until there's no other choice. No sense in bailing too early unless you're convinced the system will fail, and bailing early only works if there's someone else to buy your assets to minimize your losses.

The problem is, there's no one that big on the stage. Saudi Arabia, China, and a few others are the only players at this level, and I think they're reading all of the tea leaves the same way.

FWIW, I think DoD and CIA know there's risks out there. Every now and again (though it is infrequent) I see comments from high level DoD or CIA officials who remark that the greatest national threat we face is our own debt and deficit. You also get word of some exercises and war planning of what DoD will do if there is a widespread financial collapse. How to bring units home, what to do if Habius Corpus and Posse Comitatus is suspended, where to deploy, that sort of thing.

http://www.defense.gov/news/newsarticle.aspx?id=60621

http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=890 Page 31.

-----

Changing subject for a moment, anyone see this over at ZH?

http://www.zerohedge.com/article/si...anks-halts-american-eagle-silver-coin-product

Production of United States Mint American Eagle Silver Uncirculated Coins continues to be temporarily suspended because of unprecedented demand for American Eagle Silver Bullion Coins. Until recently, all available silver bullion blanks were being allocated to the American Eagle Silver Bullion Coin Program, as the United States Mint is required by Public Law 99-61 to produce these coins “in quantities sufficient to meet public demand . . . .”

Although the demand for precious metal coins remains high, the increase in supply of planchets—coupled with a lower demand for bullion orders in August and September—allowed the United States Mint to meet public demand and shift some capacity to produce numismatic versions of the American Eagle One Ounce Silver Proof Coin.

However, because of the continued demand for American Eagle Silver Bullion Coins, 2010-dated American Eagle Silver Uncirculated Coins will not be produced.

The United States Mint will resume production of American Eagle Silver Uncirculated Coins once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.
​

Interesting.

 

[LVG]

Interesting looking at the simple chart this morning.

Silver is going up to the moon, about 36.68, right until the NY markets open, then off the cliff to 35.96 as of right this second.

 

[jefftheshark]

With silver approaching $37 as options expire on Monday that stage is set for an epic battle (supposedly). If it gets much above $37 - $37.25 then I'd guess there could be a short squeeze of epic proportions.

On the other hand, I would expect the full force of the JPM and the Fed to be aligned on the other side driving the price down.

I'm placing my bets on bad guys prevailing.

JTS

 

[conraddobler]

With silver approaching $37 as options expire on Monday that stage is set for an epic battle (supposedly). If it gets much above $37 - $37.25 then I'd guess there could be a short squeeze of epic proportions.

On the other hand, I would expect the full force of the JPM and the Fed to be aligned on the other side driving the price down.

I'm placing my bets on bad guys prevailing.

JTS

Good bet, they have the ability to infinitely short silver through the use of derivitive contracts if they wish, don't fight the FED.

The dollar will collapse, but that day is not today until it is that is.



Keep your eye on the ball, overall credit is contracting, overall credit is mondo huge, the money supply is like a puddle of ant piss by comparison.

Current bubble is gold and pm's, JMO, not trading advice.

 

[jefftheshark]

Whew - what a battle today. Silver hit a 30 year high and then sold off in a matter of minutes losing about $1.75 for no discernible reason. Then it's quietly announced 45 minutes later that the CME margin rates were raised. If ever there was a more clear and easily seen example of massive insider trading then I've never seen it, but you can search high and wide and not find any mention of it.

It is no wonder that the people who are raping this country will never stop. There is absolutely no down side to committing any financial crime these days.

JTS

 

[conraddobler]

Whew - what a battle today. Silver hit a 30 year high and then sold off in a matter of minutes losing about $1.75 for no discernible reason. Then it's quietly announced 45 minutes later that the CME margin rates were raised. If ever there was a more clear and easily seen example of massive insider trading then I've never seen it, but you can search high and wide and not find any mention of it.

It is no wonder that the people who are raping this country will never stop. There is absolutely no down side to committing any financial crime these days.

JTS

Let them eat cake worked until it didn't.



This isn't new, the last depression resulted in an entire generation that viewed Wall Street with about the respect level you'd reserve for a carnival game.

It'll happen again.

 

[LVG]

Broke 40 today, pushing at 40.75 right now.

 

[LVG]

At 45. Silver mania has hit.

 

[jefftheshark]

At 45. Silver mania has hit.

I'm not sure we're in mania territory - yet - but unfortunately I suspect something else is going on.

First we see the dollar breaking the 75 support and threatening to hit the all-time low around 71. This should have been the natural result of a US credit outlook downgrade.

The second thing is that there are strange things going on at COMEX where (if the current hypothesis of those who have been right so far are correct) there is a high danger that there is not enough silver in the vaults to deliver the massive amounts of physical demands being placed upon them. This is the danger of leverage when the chickens come home to roost and the exchange of paper for real hits the fan.

Last week the University of Texas took physical delivery of over 20 tons of gold rather than holding the paper equivalent for its pension fund. This is a huge tell that there are probably more and more institutions taking this stance. Once the physical PM is taken off the market, so to speak, it becomes unavailable for those who like to rent out other's assets for their own personal gain.

These factors are very bullish short-term for the metals. Personally I hope that you are right and that this is a "mania" because those things always collapse and return to a median. However, if the prices are going up because of the reasons outlined above, then we could be looking at a currency crisis - and that would be bad.

JTS

 

[conraddobler]

I'm not sure we're in mania territory - yet - but unfortunately I suspect something else is going on.

First we see the dollar breaking the 75 support and threatening to hit the all-time low around 71. This should have been the natural result of a US credit outlook downgrade.

The second thing is that there are strange things going on at COMEX where (if the current hypothesis of those who have been right so far are correct) there is a high danger that there is not enough silver in the vaults to deliver the massive amounts of physical demands being placed upon them. This is the danger of leverage when the chickens come home to roost and the exchange of paper for real hits the fan.

Last week the University of Texas took physical delivery of over 20 tons of gold rather than holding the paper equivalent for its pension fund. This is a huge tell that there are probably more and more institutions taking this stance. Once the physical PM is taken off the market, so to speak, it becomes unavailable for those who like to rent out other's assets for their own personal gain.

These factors are very bullish short-term for the metals. Personally I hope that you are right and that this is a "mania" because those things always collapse and return to a median. However, if the prices are going up because of the reasons outlined above, then we could be looking at a currency crisis - and that would be bad.

JTS

I'm getting antsy here.

Hold, ...... HOLD>>>>>>>>>>>>>> ?!!!!!!



Nothing in this post or any post of mine is ever trading advice.

Having said that I see oportunity here, epic opportunity.

 

[LVG]

Last week the University of Texas took physical delivery of over 20 tons of gold rather than holding the paper equivalent for its pension fund. This is a huge tell that there are probably more and more institutions taking this stance. Once the physical PM is taken off the market, so to speak, it becomes unavailable for those who like to rent out other's assets for their own personal gain.

20 tons, at 15 in cubed / ton, so that would measure 5 ft by 5 ft by 6 ft 3 in.

Could keep it in a janitor's closet