The Squeezing Vise

Silver closed today on the Death Star at a new post-1980 high. After hours on the Globex, it continued to trade higher, at one point reaching a remarkable $30.36/ounce on the March11 contract.

Clearly, there's a lot going on in the world that is combining to send all dollar-denominated assets straight up in price. As well documented here, most are moving in tandem, at a similar % growth rate. There are exceptions, however, and notable exceptions become that way for a reason. For example, lets look at Turd's current favorite grain, wheat. As noted earlier today, since 11/17, wheat is now up about 22.8%!
http://tfmetalsreport.blogspot.com/2010/12/early-monday.html
Why is wheat up double the percentage of corn, soybeans, gold and crude oil? There must be some fundamental reason behind it. There is! There is significant concern for crop failure in Australia and, I think more significantly, the U.S. winter wheat belt is in the midst of a nasty, winter drought. Taken together, these events are creating the very real condition of a future supply squeeze and wheat is rocking!!

OK, now read this:
http://www.fgmr.com/scramble-for-physical-metal-intensifies.html
and this:
http://www.coinnews.net/2010/12/04/november-2010-silver-eagle-bullion-coin-sales-hit-4-26-million-record/
and get your daily Harvey:
http://harveyorgan.blogspot.com/

As of today, the March11 silver contract has now moved up 21.2% in just 13 trading days! Sound familiar? Do the three articles above give you the impression that silver is in a supply squeeze, too, just like wheat?
Now, look at this chart again:

This is not a normal chart. In slightly over three months, silver has appreciated nearly 70%. Let me state that again to let it sink in...In slightly over three months, silver has appreciated nearly 70%!!! There's a lot of noise out there from QE2 to Harvey's daily updates to the "buy a coin and break JPM" campaign to the cute little (and 100% accurate) silvergoldsilver.com video from last Friday but none of that adds up to a 70% move in 90 days. Take a step back and drink it all in, however, and you begin to realize that there is something very serious going on here. Very serious and very real.

This week promises to be crazy. Be prepared for some wild price swings as squeezing vise gets tighter and tighter on the Evil Empire. Can't wait for tomorrow. Turd out.

9:00 EST UPDATE

Wow, we are rollin again today! As I type, gold 1429.60 with an overnight high of 1432.50. Silver is 30.66 with a high of 30.75. The grains finished up higher and they will re-open higher in Chicago at 10:30 EST. Crude is kickin arse. It is over the critical $90 level and stands at 90.56. The S&P is indicated 12 points higher and we have $8B in POMO hitting the PDs in about two hours. How's that for a long list of good news?!?

I'm going to be watching crude to see if it can hold those gains and stay/close above $90. The longer it stays up and continues to rally today, the greater the strength will be in the PM pits.

Going back to 2002, Santa has had his next intermediate price target in gold at 1444. Don't ask me how he does it. The guy is clairvoyant. At any rate, his targets are usually pretty accurate so lets all watch to see what happens as gold approaches that area. More later.

10:00 EST UPDATE

I'm not overly concerned about the metals trading off their highs as they appear, like yesterday, to be following crude, which is now $89.64 and more than a dollar off its highs. All that POMO will put a floor under things today anyway.
Besides, the last ting we want is silver going up $1.50 every day as that will set off alarm bells everywhere and force the EE into draconian actions. Nice, orderly 30-50 cent up days are just fine with me.
Gold should see a lot of support between 1410-15. Silver will be well-bid between 29.50 and 30.