Saturday, February 26, 2011

Pour Some Coffee and Read This

Its early Saturday am in the US. Reader Eric posted this link in the comments section of last night's thread and several other readers suggested that I link to it here so that everyone will be encouraged to take a look.

Now, of course, there may be a few items contained within that I don't completely agree with. For example, in dollar terms, I don't believe the future price of gold to be infinite. However, Mr. Willie clearly put a lot of time and effort into creating this and he deserves to have it reach as wide of an audience as possible. I'm happy to do my part.

I'll have another thread later this afternoon. Little Turd #2 has a basketball game this morning which I will be attending. Have a great day! TF


  1. So Only 4187 standing for delivery as of Friday Close and possible that few more will roll over or settle for cash on Monday.

    What effect this will have on the spot price???


  2. If Comex bust or not, I would keep betting against EE with leverage in paper, and channelize my profits to physical.

    No stops (get glued to terminal), play with large margin, buy far contracts and halfway sell and rollover. This is what Santa taught me. And I am religiously doing what he advised.

    If you cannot fully beat them, at least some pin pricks would make me happy till other 99% wakes up and buys physical.

  3. Remember that 4,187 is only a preliminary number. Over the last few days, the prelim has been understating the final OI reduction by thousands of contracts.

    It's unlikely that that's the case today as we'd end up with virtually no contracts standing. I wonder, though, what the chances are that this prelim number is revised upwards on Monday? Now that would be interesting.

    I am also wondering whether we may see many options holders exercising and converting to deliverable contracts over the coming month and 'Jumping the Queue' as Harvey Organ puts it.

    There seems to have been quite a bit of this happening in Gold through the last delivery month. Could 'Wynter Benton' (if he/she/it exists)be planning to take this route? That is, see how many contracts stand for delivery on Monday, and if it looks like Comex will have trouble delivering that amount, then Wynter's group can pile on top with exercised options once they are certain that JPM will not be able to pull the necessary physical out of the bag.

    Just thinking aloud....

    BTW - I think the WB stuff is now just about proven to be rubbish, but I am curious that 'Her' definition of victory was silver to $37 by Mid-March. Why Mid-march? The only way to pressure JPM into a delivery squeeze after yesterday is via the route discussed above.

  4. Yes, I can see from the PG62 report that there are only 4,187 open contracts for the March 2011 futures month. Wynter Benton said that her group would stand for about 4,000 contracts, I wonder if this is her group (or if she is just a myth). If the 4,187 do stand, it would not wipe out the COMEX which claims to have 43.2MM ounces in registered. But it would severely cut this, by half. There are some that claim the COMEX does not really have the inventory they claim. In any case, seeing this cut to 20MM ounces would really be putting the squeeze on the shorts and would raise the silver price a lot, IMHO. IF the 4,187 do NOT mostly stand - we can assume they were bought off, and/or Wynter Benton is not for real..

  5. I apologize if this has been posted before I am just getting the hang of setting up a profile and posting.

    TF silicon investor has a great format for posting and editing and to allow members to bookmark or put on ignore other posting members.

    I thought you might want ot review as you are designing a new posting format:

  6. @EWC58

    RE: them apples

    I like 'em. Thanks!

  7. @saveamerica_1st

    Don't rush into anything with some education, but I recommend you look into options trading. Options are cheap, you don't need to risk much, and if you don't try to over reach, they are not nearly as complicated as some people think. You can make some very good returns (I made close to 200% on my very first trade, over 100% on my second). You can lose, too, but it's easy to stick to low amounts at stake until you gain some experience.

    Study and learn first, of course. Try googling Chris Rowe. He has a very good, easy to understand options primer you can download.

  8. Haven't seen this anywhere in the MSM this morning. Not sure if that proves or disproves but if this is true, there will be more UPward pressure on crude come Monday.

  9. Turd -

    Can you start another thread this weekend about preparedness? Food, medicine, these are things I would like to discuss with your folks.

    PS We went in half on our silver buy on that last huge dip. Half junk and half bullion. We're holding for the long haul... thanks for the blog!

  10. @oldNavy

    I agree. If you are patient, have discipline, and are not greedy, you can do very well trading options. I've been doing more of it lately, on a small scale, and have had some success in % terms. I've been trading ZSL, SLV, and SLW options but the practice can be applied to many other instruments.

  11. I have a question concerning TRE which i see is a 'fan favorite' of most people here who hold any sort of silver miners.
    Isnt the political and legal risk in that stock so great that its not worth the risk in holding it?

    Would love to hear some objective opinions besides the price targets and buy buy buy reco's ive seen on this name.

  12. Head

    I came out on the comments section recently as saying basically "Tanzania? No Thanks", but I'm clearly in the minority on this blog.

    Do I really know anything about Tanzania? No. But there are so many more appealing options out there that I really don't feel the need.

  13. Just did a quick inventory check at Monarch Precious Metals. Current inventory of 100 oz and 50 oz bars is a big fat ZERO.

  14. So it looks like the COMEX did wriggle out of it's difficulties just in the nick of time after all. But if their piddling small inventory gets cut in half again, that's still a big deal. Their chances of rebuilding some inventory in time for May delivery would seem to be pretty slim. I don't see why the COMEX would have any better success in securing physical silver than the Royal Canadian Mint. The drama continues!

  15. "Little Turd #2" - the double entendres keep on coming!

  16. Himalayas, I think Quintas is right. Regardless of what groups may or may not be doing the fundamentals point to a higher silver price. What while happen with the price of silver? It will be volatile and I think it will continue to rise.

    I am not certain how the new FINRA law(s) will affect the price of of silver, the whole system has been rigged to this point in my view. Manipulation will continue to be pervasive until regulators willingly enforce the law or the whole system melts.

    The reason the price continues to rise is a byproduct of the manipulation. Many in the USA do not see gold and silver as money (yet), but a large percentage of the rest of the world does! So the crooks will continue to try to keep the price down for their own reasons and the smart money will continue accumulating silver at the low prices. Silver has a long way to go as the gold to silver ratio continues to tighten.

  17. Thanks for the link to this article Turd. It is a must read and is also great to share with those that don't understand the reasons for our investments in physical and the miners.

    I will be sharing this on my blog as well.

  18. I have been reading this blog for a couple of days now and I haven't seen Max Keiser being mentioned:

    I happen to like his "Keiser report" which is broadcasted by RT by sattelite. I usually watch his report on Youtube. I guess you guys probably heard of him, but just in case.

  19. I try to minimize clicking the videos, as they're so time-consuming compared to text, and some may not find this as comical as, say, a week or so ago, but (1) it is the weekend, and (2) it's only 72 seconds long.

    [1:12] COMEX Defaults & JP Morgan Buys Silver (JG Wentworth Ad Parody)

    ...If you have physical silver and you need cash now, JP Morgue can help. We'll buy all or part of your physical silver for a lump sum cash amount...

  20. Turd, fwiw Der Spiegel reported today on the Iraqi refinery blast.

  21. Max Keiser is awesome, he was the guy who peeked my interest to ask more questions about the status quo. I recommend his bi weekly "Keiser reports" with Stacy Herbert.

    Interestingly you can view any of the 124 episodes to date and go back in time to see how spot on he was with some of the analysis.

  22. I have 38.00 call options for May. Right now I have made 400% on them. We may not get the short squeeze here as we anticipated but guess what.. I will now have the money to purchase triple the amount of options I purchased in the beginning of Feb. May 1. is going to be interesting

  23. First of all let me say that i do think that gold and silver are going much higher in the future.The talk of being able to break the comex and have them default imho will happen when they or someone else(think China more on this later) are ready to have it happen and they have someone or something to blame it on.They can and will make/change the rules as they see fit.The anti-silver cabal has been around for over 100 years and are not stupid people,JPM is not in this alone( they are doing Gods work if you know what i mean)Bennie and Timmy are knee deep in this and will do what ever it takes to keep the fraud alive as long as they can

    China i am sure does not want the comex to fail, yet as they need to build their stockpiles more and would like to keep the price as low as possible until they have enough ,then they could implode it if they want, but for now maybe they are the ones keeping it from defaulting but rolling the contracts,just a thought

    Right now it seems most the people trading silver future contracts are traders not investors so they will keep rolling them over and taking the cash.They have found a golden goose and they are not about to kill it.

    The time will come, but we need a bad guy first to blame it on, until then the trend is up but a big explosive move is a ways off.

  24. oldNavy wrote:
    ...I recommend you look into options trading... Try googling Chris Rowe...

    Thanks oldNavy, very helpful to me as well, and good timing.

    I've been working on figuring out a move into more short-term trading for about two weeks now, to the extent of pasting comments from you, Turdle GG, Dr. Jerome, sumo, and others into separate files by category (futures, options, FOREX...), and options trading was moving up on my list of what to focus on this weekend.

    My situation is that losing even $5K trading might result in my having to cash in physical silver or selling mining stocks to replace some of it, which obviously would be depressing.

  25. @Eric same as scotia motta metals. Only bank that sells PM's in Ontario. Seems they have had a hard time keeping any silver in stock. Esp 100 oz and 1 kg bars.

    As noted early this is just a tiny fraction of the overall silver market.

  26. When gold pops silver is going along for the ride , and Gold is going to pop soon.

    We are going to see 36+ silver next week. Easy.

    I would also expect an early morning raid Monday or Tuesday, but don't get shaken. From previous raids we can see that they can drop silver for a short time by $1-1.50 plan accordingly. Take advantage of their habits.

    Considering the state of global and domestic affairs ,and in lieu of multiple events, I cannot see a real drop in silver.

  27. @Old Navy

    I didnt find much on Chris Rowe can you post a link thanks

    Im a newbie,but I thought I couldnt trade silver unless it was in $5000 blocks. Id be interested in any help or guidance to learn how to trade for a smaller investor.

    Im a little leary to put a lot of money out there as a new guy , but I would like to learn . Thanks

  28. Eric, but ...

    according to my (limited) understanding, Comex is just an exchange that provides for price discovery. Some people offer silver contracts for sale (whom I call the "contract writer" since I don't know the usual technical term), while other people buy silver contracts. The Comex guarantees that the people who purchase silver contracts get their silver if they stand for delivery.

    When you stand for delivery of a contract at the Comex, you obtain the silver from the people who wrote the contact (JP Morgue?), not from the Comex itself, unless the contract writer cannot deliver. Naturally, the Comex might be holding silver for the contract writer, in which case the silver would come from the Comex vaults, but it would be silver that belongs to the contract writer.

    Comex only has to cough up the silver when the contract writer cannot deliver. Theoretically, the contract writer can get more silver from somewhere and provide it to the contract holder or add it to the Comex vaults during the month of March in order to fulfill the contracts that are standing for delivery.

    (right?? - note that I am a beginner, so I might be wrong. If I am wrong, I would appreciate it if someone would correct me!)

  29. I wish I stayed in school. My head hurts I've been learning so much. Off on all these tangents trying to research all these links. Then back to the hub of it all Turds blog.

    I've been practicing forex trading (demo account) and reading on options.

    Thanks turd and everyone for making this possible.

  30. Not sure if this has been posted yet on the blog but I know many bought into Great Panther on the good run last week. Here is CEO, Robert Archer, on CNBC yesterday. Mr. Archer also was given the honor of ringing the closing bell on NYSE yesterday.

    (Again...apologies if this has already been posted)

    CNBC Intervies:

    Closing Bell:

  31. snick

    I think maybe you and I both just go by whatever Harvey and others who seem to know what's up tell us. I don't trade futures or options so I'm just an interested observer of all this COMEX drama, much like a lot of us.

    I just figure silver and gold are going higher for a variety of fundamental reasons. So if stories of COMEX, JPMorgue, WB, and the rest add a little spice to the ride, so be it.

  32. averagejoe,
    I could have written your post word for word.


  33. March OI is way down now to 4187 contracts which is in the preliminary report, so expect less in the final. Monday is FND, and I would expect at most 2000 contracts = 10M ounces which is not that significant. There is no COMEX bust, and the higher the price of silver, the more the "shortage" corrects itself.

    I will sell physical bullion at 37-40, expecting to buy back under 30. There will be a lot of people that buy at 40 and perhaps it even makes it to 50, but there will be at least one deep correction along the way. The price can go from 40 to under 20. Check the charts going back a few years.

    The more speculators that hoard silver, the more silver there is to flood the market. The price will go down at some point and for several months.

    Don't turn this into a war between you and the banks. The banks are in fact doing you a favor by trying to keep the price of WTI crude low, so that the price of everything you and others buy stays low. If silver and crude trade at 100 and 200, you might make a killing, but the small guy who cannot afford double prices begins to go hungry.

    Buy significant dips, and sell significant strength. Always keep a core holding for defense, and for offense buy or sell above the core position to make a profit in terms of dollars. Over time, your core will grow, and so will your overall wealth and trading capital.

    Again, remove the emotion and take advantage of what is given to you. If you want to spend 30 or 40 years of your life complaining that the banking cartel has an unfair advantage (duh), then you are going to be focused on something besides accumulating wealth.

    Don't be led off the cliff for a cause that will never materialize. The banks will stay whole longer than you will stay solvent. If you want to win, then trade smart.

  34. Eric, hahaha, you're right!! I don't trade futures either ... but all the stuff about WB, JP Morgue, etc. is sort of exciting ... beats "Navy CIS" :-)

  35. JoeJost: great advice! Everone should read it.

    Haltime score:
    Little Turds 4
    Big Mean team 12

  36. New Harvey post is out.

    4,187 is a disappointing number, and I'm seconding Himalayas in asking if anyone has an opinion of where spot goes from here.

  37. averagejoe,

    Do not blame yourself for not staying in school. You would not have learned this ANYWHERE in school. I damn sure didn't. I remember when I was a kid. I always wondered where a US dollar came from. "What creates it, what backs it up?" It was almost like asking the question, "How did this world come to be?" It wasn't possible to answer it because OUR TEACHERS would NOT tell us, "Because it is created from thin air."


  38. From the previous thread...

    It's not shortage in retail silver that will cause any kind of panic. Our demand is TINY. It's not WE that are going to bust the COMEX, it's the big guys.

    Also don't equate a coin/bullion dealer or even the mints TEMPORARILY running out of supply to sell with silver having run out completely. So long as they comit to a delivery date estimate, in theory there is still silver to sell to retail investors. The COMEX represents the silver for the other 50-80% of the market. That's what we're watching very closely.

    Thank you, SilverSurfer. My point is, what you have to do is continue buying silver through the retail channels so that eventually, over time, the retail channel starts to pull more and more silver away from the 50-80% of the market that normally never touches retail. That is why I told you people to get out of paper, period, and focus on taking away the silver to an extent that the industrial users will start hoarding the metal themselves to prevent assembly line shutdowns. We have to impact them. You're right. COMEX is basically a battleground between various factions of the paper silver market. Just like in the middle east - it's a battle between various factions of arab society. Do you want to be a part of it? No. You're not an arab or someone with some stake in the outcome of the battle, even though it has an impact on you politically and at the gas pump. Same story in the paper silver market. If you are here on TF's blog, you should not be part of that battle, either, in the direct sense. Instead of being a landowner in developed countries with gasoline storage tanks on the property, filling up ahead of the arab turmoil, you are a physical silver/gold owner piling up the metal ahead of the battle in the paper markets. That is how I see our role in this battle.

    Part II coming.


  39. Part II...

    You see, it used to be that silver was largely in the possession of humans or otherwise used in jewelry and a limited number of implements used in daily life. That is NOT the case today, and that is why we don't have the impact on the price we want. We NEED to go back to those conditions of silver being owned outright by noncommercial humans with a limited amount used in manufacturing. This is the only way we can do it, trust me. China and India are already making it happen. There are BILLIONS of people living in these two countries alone, and they have a deep tradition in buying silver/gold for religious, financial security, traditional reasons. We do not have that in America because we have been DISEDUCATED away from silver/gold ownership as a way to protect ourselves from financial insecurity. If all the silver really exists in COMEX, at today's prices, that only represents a market of $3.36 BILLION. THAT is only a tiny fraction of the total economy of the US, people! It is less than 0.04% of the economy! Imagine what would happen if we just took *** 1% *** of the economy and put that into silver. You're looking at a 25-bagger here, MINIMUM. You're cheating yourself by staying in paper.

    I told you folks. This was going to happen. As of today, 10,000 contracts were sliced off, leaving OI under 5,000 contracts. I KNEW this was going to happen. It's a battle between factions of the paper market. If you want to end this battle, you have to take away their silver or reduce the amount available that it starts to affect the industrial users.


  40. Very interesting read from Ed Steer this am ...

    Afternoon Gold Fix -- February 25, 2011
    Reader U.D. sent this story my way very late last night that was posted over at the website. This was obviously written by one of the quants that trades commodities on a level far above our reading it left me gasping for a lot of it was so far over my head, that I really didn't have a clue what he meant.

    But it's not the part of the report that you don't understand that will bother you. You should read his Analysis, Commentary...and Editorial Comment sections, but pay particular attention to what he says in his 'Editorial Comment'. He has stumbled across Thursday's mini-crash in both silver and gold that was orchestrated by JPMorgan et al...and he has a few things to say about it from his perspective.

    Copied below is the content from the link ... Analysis over my head as well (might be why analysis begins with ANAL)

    needed to do this in 2 posts .... sorry

  41. Analysis:

    For the second day in a row there was strong two-way business in the front part of the term structure while the back part of the curve was alternatively ignored and sold. Funds continued to sell May options. Today they sold the 1500 C. Meanwhile the April 1400/1420 Strangle was purchased in size Over-the-Counter. In June the skew bubble surrounding the 1600 strike was squashed as speculators bought the 1500/1600 1x2 call spread. Bearish dealers bought the October 1100/12000 1x2 put spread and in general, sold back month straddles.


    Options held up reasonably well in the fronts after yesterday’s post-close washout. Dealers came back buying puts in December and selling calls. Some speculators recommitted to the market by rolling their longs from April to June. This market is definitely a call skew market now with volatility firming in rallies and dropping in selloffs. What has changed and we see this in other markets as well, is the increase in fat tails (leptokurtosis); it seems that insurance must be bought at any price. In markets where the 20 delta call or put used to be king now it’s the 5 delta call or put that matters most. In gold it’s both: dealers continue to lean into the wings by buying 1x2 and 1x3 call spreads but the appetite for tails is insatiable. We don’t think this is temporary, the world is no longer pricing statistical probabilities, it is chasing after black swans. All markets seem correlated but at some point the risk-reward just isn’t there. Just because a wing call trades at 30% volatility does not increase the probability it will go into the money; it’s just a reflection of unquantifiable fear.

    Editorial comment: It’s becoming increasingly annoying watching dealers buy call and sell puts the day before we rally $20, and then the next day buy put and sell call before we drop $20. Yesterday’s sell off from the 1415 area seemed almost orchestrated. At the very least, the futures selling came in during the thinnest trading hours. While exchanges herald the benefits of electronic trading there is one thing wrong with it. Electronic trading minimizes the information leakage associated with using brokers, for sure, but it is also allows oligarchic organizations to anonymously manage price movement while hiding behind digital displays. We won’t use the word manipulate, in part because of our libertarian bent, but it’s getting ridiculous. Where there used to be 50 5-lot thieves on the floor now there are five Too-Big-To-Fail banks with infinite fed-sponsored balance sheets doing whatever they please. The idiot locals on the floor, fragmented as they were, served to keep the big banks in check because there was transparency of price and to a large extent, the players were known. This doesn’t exist anymore and we don’t see an end to it. Instead of thinning the forest for the trees, technology, regulatory and economic factors have killed the saplings and destroyed market diversity. This translates to a narrow and deep liquidity pool in trading venues; god forbid if one of them fails.

    thoughts anyone ?

  42. Harvey says march silver oi is 14259
    i've read others here that it's 4187
    who is correct???

  43. Joe Jost wrote:
    ...I will sell physical bullion at 37-40, expecting to buy back under 30...

    Joe, thanks, you prompted me to add to my list something I've been considering; last week I doubled my silver holdings with James Turk's company, GoldMoney.

    I never intended to trade within that account but, not only can I with a few mouse clicks, but I can move back and forth from silver to gold, and in and out of four or five currencies (i.e. I can keep my cash in Canadian dollars or Swiss francs rather than $USD).

    I need to visit the website this weekend to determine what my transaction costs would be.

  44. I don't think there will be a Comex "bust" but there probably will be a "fizzle" as bullion becomes more and more scarce. At some point it becomes individuals trading paper contracts and can't be seen as a reliable source of price discovery because there won't be anyone buying contracts to stand for delivery anymore. It's kind of like how the Brent Crude price is being recognized more as the legitimate gauge of world oil prices due to its divergence from WTI. When industry starts having trouble securing silver supplies, the Comex will be relegated to the dustbin.

  45. Turd, unfortunately Harvey is probably wrong. The preliminary numbers from Friday show 4,187. I don't know if you can open this pdf on your phone or whatever you're on but here's the report:

  46. Go little Turd's.

    Donated gas money. Might as well show my appreciation.

  47. For those of you familiar with torrents, and who don't have a few hundred or thousand dollars to spend on training material, there is some material you can get started with:


    (note the lock icon on the left, this means you can't download it from this website, you need a free account on You can get an account on Elbitz only 1 day per month - it's one of my favorite sites. Elbitz = E Learning Bits - a torrent site dedicated 100% to learning material).



    If you make money from any of this training material, please have the conscious to go back and purchase the material in full price.

    Happy Learning!

  48. F said...
    @Old Navy

I didnt find much on Chris Rowe can you post a link thanks


    Chris Rowe options trading — or just click my link. ;-)

  49. I'd swear I've always seen discrepancies between Harvey's numbers and the public PDF from CME. I thought Harvey had a more quality data, but now I seriously dpubt that.

  50. Turd,

    I think Harvey's operating off the old numbers for Thursday and not the Friday number which is 4,187.

  51. Turd, Harvey's number (14,259) was the Final number from Thursday's close. 4,128 is the Prelim from Friday.

  52. Turd, fwiw, NY Times now confirming debka report.

    Have not seen anything yet on CNN, who is "reporting" on Lindsay Lohan.

    Turns out Jim Rickards was prescient in his interview, yet again.

  53. Much appreciated links SilverSurfer - it seems next reg day is March 15. Any chance youd happen to have an invite to the site?

  54. @Head, no invites required. They don't work on invites. Just show up March 15th and you should be able to get your free account. My recommendation is to start out by downloading one of the most popular torrents and seed it for a few days to get your ratio up, then after that download what you want. Read their ratio rules. If your ratio remains too low for too long you may get kicked out. That said their ratios are pretty reasonable.

  55. Again, a lot of really useful info here. Thanks to Turd and everyone else who posted again today.

    Has anyone purchased a Perth Mint Certificate using their allocated pool? There will come a point where the amount of bullion I have in my safe is too much for comfort (especially after reading about that Canadian chap who got robbed) and I would like to store it offsite in a secured vault. I do get to Australia periodically to visit family, so it sound like it might be a good option for me.

    I don't trust the banks (like just about everyone else here) so I am looking for alternatives regarding buying/storing bullion. So... if anyone could comment on the Perth Mint Certificate, that would be brilliant.


  56. I have to agree with Willie, Turd.

    What is the current value of Gold in Reichsmarks?

    The current criminal 'government' in America will not stop unconstitutionally debasing 'our' 'money' until it collapses and must be replaced by something new.

    And they will not be the ones who say what the FRN's replacement will be.

    We will.

  57. Some random points:

    Between Woodrow Wilson, Paul Krugman, and now The Bernank, Princeton professors and professors in general (Obama) sure have been a spectacular foil for The Fed and their bankster ilk. Also, not much is ever mentioned about Obama's ties to University of Chicago--Friedman economic theory. I find that curious seeing that he taught at and lived on the UOC doorstep. No conclusions drawn, so far.

    Seconding Joe Jost's post too, and chiming in that the Willie article was good, but no real new news.

    Been reading so many "dollar-collapse-end-the-fed-the-end-is-nigh" articles and books for 6 years I can only skim them at best now without getting bored. Thank goodness for Jim Rickards...

    Rickard's wisdom shone through again today on KWN when he clarified that any transition to new currency through SDRs will occur through a long, detailed planning. The USD is not going to disintegrate overnight, at least anytime soon. He mentioned that people need to think through the mechanics of how that collapse would happen and what that would mean.

    If the dollar disintegrates, the world would cease to function. TPTB are not going to let that happen. An apocolyptic breakdown of commerce would not be to their benefit. Everyone here is a abuzz about junior you really think you'll be someday trading bullion back to a mining comapny to buy their paper shares? Or that e-commerce, banking etc will freeze up, or that it's in the interest of banks to have an "internet kill switch"? Try to think through what that would do. If it's a benefit to noone whatsoever, it will not be allowed

  58. CONTINUED (sorry):

    Regardless of whether you believe economic orders are ultimately coming from the BIS, the BOE, Rothschilds, etc., paper units of account will continue for several years. The banksters have their tentacles into everything, so abject breakdown just isn't feasible.

    There is certainly hatred for the US from elements of the European banking elite and others throughout the world, but if there is to be centralized government for the planet as some claim, and the blatant debasement of fiat and a new $100 trillion of capital is part of the plan, there is without question a necessity in commandeering the world's foremost military. If plans are unfolding for a NWO type scenario, the US military will become stronger, not weaker, and the USD as a unit of account will continue to exist

    For PM investors, our interests align with the central bankers' in at least one way, and all of us here are figuring out our own method of funneling the fraudently printed cash back out of the system and into our possession to be converted into physical form. We have pinpointed Gold and Silver as the Achilles in this plot, and we will be the slow and gradual benefactors of this wealth transfer.

    The process of transitioning from the USD as a major reserve currency is underway, yes, but not imminent. Comex did not default. SLV and AGQ did not implode...again. And when you take Rickards' comments and combine them with Catherine Austin Fitts' observation that the USD is no longer backed by the "full faith and credit" of the US Government, but rather "the full force of the US military", you can be confident that the opportunities set up before us for PM investing should NOT be subjected to chicken little scenarios at this time.

    Transition is upon us. Collapse is not. The CIA is cleaning house in the ME as oil production peaks. This is follow through after setting up FOBs and a military outpost in Iraq. The scramble for the last drop of oil, which is the central pillar of the US military, is on. Time to reinstall a fresh round of lackeys under a new set of global rules concering oil and the USD.

    I do think there will come a day when we wake up and the dollar will have been revalued significantly overnight, but I am trusting that through our collective wisdom and spirit, all of us here will have ample warning before that event occurs.

    Remember, if you have been calling for the collapse of the dollar, you have been wrong 100% of the time to date. Sure, it's in a steady decline. And definitely, one day you will probably be right, bringing your predictive accuracy on a dollar collapse to .0000001% all-time.

    In the meantime, do not miss the once in a lifetime opportunity paper trades are presenting

  59. @Mick said "And they will not be the ones who say what the FRN's replacement will be. We will"

    Don't be so sure. The powers that be (Top G20 economic leaders + IMF + Davos) are hard at work on the global SDR (Sovereign Drawing Rights), which is a fancy word for global currency. No this is not some Amero, it's not even anything you will ever see in your hands or transacted at the grocery store. It will be the new world *reserve* currency managed by the IMF, which in turn will have members from most or all of the G20 running it. The SDRs will be the back-office (so to speak) reserve currency to which all other world currencies will float against.

    The good news is that no one country will have the unfair advantage of being world's reserve currency with the priveledge of printing out of thin air with almost no consequences. The bad news is that SDRs may not be backed up by any physical assets at all, and so would just be another fiat system that would eventually blow up (but could take many years). The other bad news is that at present most of the IMF is run by the USA, so USA may continue to have a lot of influence.

    Good Interview with Jim Rickards here on this topic, have a listen:

    Feb 25, 2011

  60. Very well said Pick52, I am thinking along those lines as well. 70% of the devaluation of the dollar from here on out will be a process NOT an event. That's how it's been occuring since 1913. The US dollar has devalued over 97% since then a bit at a time, most of the time.

    Aside from perhaps Iran, North Korea and a few other rogue nations, NOBODY wants the US dollar to collapse! It would be an instant global depression with all kinds of anarchy and chaos as bad if not worse than what we are seeing in the middle east right now. The masses, not having a clue what the hell happened economically, will blame their governments for their overnight loss of buying power and loss in quality of life. It would result in globalization to come to a screeching halt as global trade would be terminated - why? Because there would be no reserve currency to effect trade it - THAT is the major purpose behind a reserve currency. A single currency that every country trusts to trade with. Therefore, not a single member of the G20 is making a conscious effort to implode the US dollar, although Ben & Geithner are unconsciously doing so.

  61. Thanks SilverSurfer, that's the best way to put it: "a process, not an event"


  62. Been a lot of talk lately about which miners are best, which are hedged or not, which to invest in. I decided to do a comparison of 15 of the miners and ETF's that I see mentioned here the most, along with 1-2 random miners. Each stock is compared on a 6 month percentage increase and I think it's obvious why the past 6 months would be a good comparison time frame due to all the action we've had. It's also a good way to see which stocks are following the physical silver gains, which are doing better and which are doing not quite as good.

    15 Miners/Silver ETF's

  63. Interesting conversation developing on Harvey's post.

    The shorts determine when delivery will be for each contract during the delivery period. So the fact that only 252 contracts decided to serve on the first day of notice MIGHT indicate a shortage of silver to fulfill the contracts.

    Perhaps this is the number we should be focusing as opposed to the OI to COMEX inventory ratio?

  64. For those looking to learn option trading here is another option to the other options ....

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    Select the "My Path" option on the OIC education Web page. You will be required to set up a personal access account. Complete the required information for an account.

    Take the "My Path" assessment test. The test will determine your level of options trading knowledge. The OIC education website will set up a personalized online training course based on your assessment results. Start taking the courses in the order suggested.

    Go to the Chicago Board of Options (CBOE) website and enroll in their options training program. The CBOE program is called Options Institute Plus and can be found under the education tab of the website's main menu.

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  65. Scroll down this page to see a picture of the rate at which the US dollar has devalued. Yes there were times early on 1913-1917 when the devaluation was fierce, and we may yet see another event like that 20-40% devaluation over a few years as the SDR basket gets rebalanced with less US dollars, but generally speaking, and this is the thing that most people saying that the US dollar will go into HyperInflation mode forget, is that no world reserve currency has EVER gone into hyperinflation mode, because as I stated above, it would result in global hyperinflation and ultimately global depression. All this QE stuff is just buying time for the G20 and IMF to agree to how the SDR will be structured.

  66. Thanks flaunt, I'm usually juggling 5 other things when I post here...

    Ahhhhhhh, Saturday

  67. Pick and SilverSurfer, excellent posts. Justin, nice work.
    TRE is unique, still a start-up in actuality. They have just begun producing, so 2011 will be their coming out party. Jim Sinclair will never hedge, by the way. TRE is a gold, base metals ( nickel primarily ) and diamonds play also, not silver.

  68. I don't know why everyone is so focused on the OI numbers. It is good to know in the short run, but that is not the only reason why the Silver prices are going up. Weak dollar, inflation, debt, rising unemployment etc. are the main reasons for the Silver/Gold to keep moving up as people are starting to realize again that this is the best way to hedge compared to stocks and uncertainties.

    The Gold is not even driven by Oil prices, as it has been consistently going up, while Oil spiked up in early 2008 and was back to it's original price the end of 2008, the Gold kept on going up. You don't need to find reasons why Oil prices are going up, as "they" will raise the price to cover up their Dollar printing excuse and blame the inflation on rising Oil prices. They will blame the Middle Eastern/European countries for their stupidity yet again or find some other excuse to blame on everyone else but themselves.

    I would suggest to go with the trend and not read into news too much. Buy Silver/Gold on weakness (BTFD) and please, please don't use 100% margins especially on commodities. They are volatile and easily bring your portfolio down to 0.

  69. For those that don't know me, I'm a long time coin dealer, mostly in Morgan and Peace dollars (77% silver). With melt values at $25.70, non-1921 Morgans are selling for $27, and many at $30 or above on eBay. So were seeing physical premiums kick in. This is definitely a change over the past 2 weeks.

    Here's the search...check Todays closing prices versus a week ago. An amazing difference.

  70. Thanks Pat. Updated the blog to reflect TRE's situation with being a start-up.

  71. BTW, I love silver bullion to death, but in a total SHTF scenario, aka monetary collapse, I think most people will revert back to transactions in silver coins. So I would recommend, just some CYA, you get some made of 90% silver coin with that silver bullion. That would be any coinage made before 1964 (Dollars, Halves, Quarters, and Dimes).

  72. Wow what a week. Thanks to TF and the commenters here. I do read the links and I don't feed the trolls.

    My schtick here.

    Keep up the good work TF. An interesting week lays ahead.

  73. Pick, call it a transition or a collapse, but I think it will happen sooner than most of us expect. I know people have been saying it for a while, but I think two years maximum.

  74. Here's Gordon T. Long's time-line to the "collapse". I still think we'll see SDRs before a full blown collapse - unless "Obama NEW DEAL" is what he means by introduction to SDRs globally.

    Source Article:

    This is an update from his excellent 2010 thesis "Sultans of SWAP" (there's 2 other parts to it, google for ACT ii and ACT iii). It's a fairly technical series of articles, but the pictures pretty much tell the story in simple terms.

  75. Thanks Pat,

    Tyler, all depends on personal perspective, your experience/time w PMs, etc.

    Your 2 year call above is akin to my point - I consider 2 years more than ample time to benefit from all the suppression of true price discovery, and to become more than prepared for the transition to whatever new monetary standard is chosen.

  76. Anyone with a Phd in Statistics has my attention. And I like the sound of infinity.

  77. Pick,

    I agree if it does turn out to be two years that is enough time. But, I do believe two years is the max, and would be surprised if the dollar as we currently know it lasts that long.

    For me, if it manages to last through this summer, it will go down the following summer. I think we will have an incredibly warm summer resulting in crop losses, high food prices and high oil prices.

    The reason I see it happening sooner than later is not only because of economic factors, but I also believe based on the strange magnetic and temperature occurences in our solar system that we are going through a period we quite simply do not understand. These are forces which the EE cannot hault.

  78. Pick & Joe, b/w your posts, I would summarize a standard plan as follows and in the order one believe makes most sense:

    a) buy metals at a % of your net worth at a % you're comfortable with.
    b) rainy day survival plan
    c) solid miner stocks & other solid industries/investments that will do well in this environment
    d) reasonable amount of cash in safe keeping in case you can't get into your bank one day.
    e) trade & speculate with $'s you are ok with losing
    f) over time, convert into metals if you can. The paper price will likely be higher so the assumption is your return on investments/trading will be higher than the return you would've obtained by purchasing metals today (and avoiding counterparty risk headaches)

  79. If you're watching oil prices (which gold and silver will likely follow higher) you may want to check these breaking news articles. Tehran is in the process of sabotaging oil supplies for their own gain.

    Presumably toward the same end, Al-Qaeda is also calling for the ouster of ruling elites in both Saudi Arabia and Yemen:

  80. hi, the other day I was surfing zero hedge blog and a poster provided a downloadable link to the new movie Inside Job. I have misplaced that link and I hoping some can provide it here or knows how to queue it from zero hedge.

  81. Just thought I'd mention it:

    I came to be lover of Freedom due to Ayn Rand and then the Mises Institute (Austrian Economics) - and then from there it was an easy slip to trade my fake paper for real assets (gold/silver mining stocks). I sold my house in USA - paid off all my debts and am living debt free in a different country.

    I'll return to USA when it wants people who love Freedom. :)

  82. Fabulous posts today from multiple sources! You all keep me glued to this site more than is good for my career.

    For those wanting to learn to trade options or other securities, I suggest opening a paper account right away and trying what you learn each day.

    After you get the hang of it (a few weeks), open an account with a small amount and trade that successfully. As your confidence and track record get better, add in some real money. don't rush it. The markets will be there when you are ready.

    Don't do what I did. I started trading with my whole nest egg after two very expensive classes and blew out 75% of my account in two months from amateur mistakes.

  83. Joe Jost posted a comment at 8:30am which was good to jar some forward thinking which I have been mulling. Here is another thought ... if silver moves to 37-40 Joe said he intends to sell a portion of his silver holding some in reserve ... buy back under thirty. Nothing wrong with that ... there is another play ... if silver is @ those #'s or higher the G/S ratio could very well be in the low 30's ... swap silver for gold playing the ratio ... silver always pulls back further than gold which means the ratio would swing higher from your swap point ... when that happens you swap back into silver and you gain ounces ... if I did anything I think I would do that avoiding the FRN's and never be out of metals ...

  84. I know we all would prefer not to bring political views to this site, so I will only say this as it pertains to metals via oil.

    There is quite a bit of evidence from the 9/11 attacks onward, that Al-Qaeda is nothing more than an EE tool they use when they need someone to cause problems for their own benefit. For example, going to war in the Middle East.

    I believe that any articles stating that Al-Qaeda teaming up with Iran to sabotage oil should be read as:

    CIA sabotages Iraqi oil production and blames Iran so we can go to another war, just like before.

    With that said, I think this is a red flag that oil will undoubtedly go UP UP UP once you see how it could temporarily benefit the EE. At the same time it would provide the excuse for QE3 (war would have the same effect anyway).

    At this point it would look like oil is a very good investment.

  85. reefman ... where are you at and how do you like it ... I have some consideration along those lines

  86. Awesome, some very well thought out comments!

    I do not feel the same way as some of you feel when it comes to how things will play out. I urge you to consider history, the Germans didn't think the hyperinflation that set upon them would happen either. We have one of the oldest fiat currency systems in place that there has ever been, the vast majority of which died much faster than our current one. That decline though is now growing exponentially.

    I read articles recently where France was stating they would be willing to lead the G20 nations away from using the dollar. They all have a very good reason from going away from the dollar, they are loosing control of their populace's. Several nations have ALREADY dumped using the dollar for trade between each other. Why would every nation not want to be the next World Super Power?

    Not only are we seeing riots in he ME, we are seeing some here in the USA. Inflation is on the rise (gas here in Fort Worth jumped .25 cents this last week) and the government is in the process of taking away things it promised people they would have. People aren't happy about it and they will fight when pushed far enough I can assure you.

    Joe Jost you say "Buy significant dips, and sell significant strength." I agree with half of that statement, but the other half? Why would you sell something that gives you financial strength? If you are day trading this stuff, then I see buying low and selling high, but if you are in it for the long haul buy physical and average your way into a good sized stash.

    Bernanke can't keep a lid on all of this stuff and neither can our government. The fundamentals have not changed. They continue to print more and the dollar in turns keeps being worth less every day.

    In my mind you are doing yourself a great disservice if you believe for a minute that all of this will not end in a jarring collapse for us Americans. Other countries are in the progress of moving away from the dollar as we speak and they will all jockey for position to be benefactors at our expense. That's what we are doing to them right now after all.

  87. This comment has been removed by the author.

  88. I did a cursory review of Harvey's old posts concerning deliveries in the month of December 2010.

    It looks like there's a good correlation between the amount of contracts fulfilled per day in December and the price of spot in December based off SLV pricing. (In other words, it seems like large fulfillments of physical silver correlate with large increases in the SLV price while smaller to no fulfillments correlate with small increases to small decreases in SLV price.)

    Now, I don't know if it's statistically significant or not, but has anyone else done a more thorough analysis that they'd like to share? It seems like there might be something there.

    (Not saying that this necessarily plays into the COMEX not having the inventory they have, but... the correlation seems to imply something funny going on.)

  89. Just read your comment Chin Music. I like the idea of trading the two off of one another like that.

  90. Tyler,
    The changes in the planet, solar system and even galaxy were known and predicted a long time ago. The Mayans were obsessed with math, calendars, time and space. I wrote a blog that I think is good, but doesn't do their knowledge and foresight any justice. Changes in the planet and galaxy have been known and still are. The government didn't shovel all of that money in to NASA all those years just to go conduct "science experiments" in space. They had a mission and now that NASA is axed, that mission appears to be a wrap. These ancient people predicted something crazy around this same point in time too.


    I also wrote a blog back when all the bird and fish die-offs were in the news and regardless of what you think the culprit is/was, the rest of the science behind the blog is 100% legit. Birds are not only sensitive to the magnetic field and use it for seasonal migration, but they actually have a receptor in their right eye that allows them to see it. The shifting of the magnetic poles is messing up their migration patterns because they are following shifting lines.

    Mass Hysteria

    I also did a blog in early January with my yearly predictions before all this stuff started getting to the level of crazy it is today. The fundamentals of the game are still phucked and we have a long way to go before we can even think about taking it easy.

    Yearly Predictions

    Seems to be a lot of very extreme events going on in the world right now, nothing is really "in-between". Sometimes it's like watching that movie The Perfect Storm, sitting here watching numerous storms bearing down on us though, not just two. Economy:bad. Housing:bad. Unemployment:bad. National Debt:bad. Inflation:bad. Gov spending:bad. Bank failures:bad. Middle East:bad. Weather:bad. Food supply:bad. $:bad. Consumer spending:bad. Bailouts:bad. Quantitative easing:bad. Foreign relations:bad. US protests:bad. US politics:bad.

    No reason for me to believe PM's are the place to be right now, along with agriculture and green energy technology/alternative fuels. Oil prices are going to boost both.

  91. *aren't the place to be.* I should proof read or just not leave long comments. Obviously I love me some silver.

  92. Justin,

    thanks for making your comparison available. I like your methodology. It makes sense to decide on a benchmark and compare the others to it.

    One stock I sort of missed was Silvermex ( on a 6 month chart, it did just a little better than AG.

  93. "Buy significant dips, and sell significant strength" ... are we talking physical? If so, unless you are a professional trader or an insider elite I would not recommend this strategy. Suppose Ag goes to $38 and you sell looking to purchase back in around $30oz. How confident are you there will be any physical Ag left? I would not recommend trading physical in this market, you will be traded out of your position. Just my two cents

  94. Sounds good Caramel, I like it

    Tyler and Justin,

    Arch Crawford is entertaining to listen to...he believes there will be electromagnetic repercussions from solar flares in the not-too-distant future as well. I believe I heard those interviews on GoldSeek Radio w Waltzcek
    ...should be in the archives for you guys if you're interested

  95. Snick,
    I think I might throw that one in on the next one I do. Eventually I'll have 20 stocks that I'll probably update every 3 months since a lot of people seem to always want to know who the best performers are.

  96. PICK52... The one thing i disagree on is this notion that we are at peak oil.. I think that is a lot of BS.

  97. JimmyTheHand ... thanks ... if you do the ratio math you actually gain ounces as I said ... the most I like about the play is I am always in metal ... anything can happen as we see all this turmoil ramping up so my thought process is if I don't need the FRN's stay in metal ... thought: what if I sold my metal (FRN) now I'm waiting for an entry point to repurchase and the EE shuts down the Banking system ... banks open a week later and silver is at $50 ... WTF is in order ... this all may sound dramatic but EE/JPM/US GOV ... think about it ... rather safe than sorry

  98. Pick,
    I've been assuming that ever since 2008 when I caught a news article on the Air Force talking about how the GPS satellites were at risk of failing around 2012 due to being old. The date reminded me of the fact the sun is supposed to be at peak energy output at that time and also the Mayan predictions. I figured the sat's were probably at risk of being bombarded with electrons and not failing "due to old age". I was an AT in the Navy and worked on Tomcat and Hornet electronic systems. I know electronics and our GPS satellites have a long way to go before they reach their expiration dates. Something else is going to be effecting them: the sun and even the planets magnetic polar shift.

  99. @Chin,

    I moved to Canada because of the natural resources - and because I am already a citizen of Canada as well. :)

  100. reefman ... have many relatives there ... both my parents were from there ... I was the last born in my immediate family and the only one born here (Detroit area)... happy for you

  101. Sierra,

    It's impossible to know one way or the other about peak oil. What's pretty clear is that there isn't a whole lot of $50 oil left in the ground. There is $150 oil left in the ground. There is probably $100 oil left in the ground, so oil is not going to disappear necessarily, just get more expensive

    And there sure won't be any solar powered B2s or any hybrid Bradley fighting vehicles. That's all I feel I can say I know for certain.

    Keep in mind that the US still hasn't even gotten around to paying for either Iraq or Afghanistan, we just decided we needed to be sitting there regardless of the cost

  102. That kitco article/link was very good reading, Eric ..Thank You.

  103. Thanks for the tradeing info Silver surfer it's an excellent site for beginners Thank You very much!

  104. JimmyTheHand said...

    Joe Jost you say "Buy significant dips, and sell significant strength." I agree with half of that statement, but the other half? Why would you sell something that gives you financial strength? If you are day trading this stuff, then I see buying low and selling high, but if you are in it for the long haul buy physical and average your way into a good sized stash.


    JimmyTheHand said...

    Joe Jost you say "Buy significant dips, and sell significant strength." I agree with half of that statement, but the other half? Why would you sell something that gives you financial strength? If you are day trading this stuff, then I see buying low and selling high, but if you are in it for the long haul buy physical and average your way into a good sized stash.


    This is based on my experience that gold and silver trade higher to a parabolic top, and then correct violently lower. 2008 is a very good example. Silver traded at 21 and then fell all the way back to 9.

    A washout correction like that does not mean that the bull market is over, just that gold and silver will make sharp corrections before making their their ultimate highs.

    I am not talking about consolidations or small reactions like January, but really big corrections like 2008. At some point, and I think when gold/silver is close at 1550/38 or better, there will be a multi-month deep correction. You will notice that the reaction is getting close when there buying power diminishes and the rally loses upward strength. It might even correct shallow and fight back to highs, and that is where you need to really watch it. If there is not sufficient stamina to rocket past those highs and the price stumbles there, use that as your cue to exit. The target numbers are not carved in stone, but if you sell the offensive portion of your positions to pare down to your core position, then you will still be exposed to the upside with your core. When it does finally make its washout correction, then you can safely buy back the offensive portion of your position and wait for the next obvious peak.

    Turd says 1600 by June. Knowing what I know, when 1600 is reached or perhaps 1700, gold won't just levitate at that level for several months before going higher. It will retrace rapidly and then consolidate for several months before moving higher. When silver and gold correct, they always over swing, and when they rally they always end with a big surge upward, and then all the buyers disappear. For this reason, I don't think that 1430 in gold is the ultimate top for this rally, but I do think it is getting very near.

    For speculating philosophy, see Jesse Livermore, How to Trade in Stocks, or Reminiscences of a Stock Operator. A lot of his material is also available online.

    If you want to "invest" in something, the buy it and never sell it. Livermore gives compelling reasons why not to do this. I can think of dozens of examples: Microsoft, Google, Yahoo, Oracle, IBM, HP, silver and gold from in 80s and 90s, Housing, the broad stock market, etc. There will come a time to sell and move on to something else.

  105. I guess Warren Buffet is also smoking crack...How can this guy lie to the American people like this? I mean he seems like the only dude who is doing well...If I had billions of dollars I guess I would say America is doing well too...

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