Wednesday, February 9, 2011

Santa's Pillars

Have you seen this before?
Santa came up with this years ago. The five "pillars" were meant to symbolize the conditions under which gold would trade from $250 to $1650. As you can see, 4 of the 5 have come to pass.

What about #5? Over the years, its come to mean an end to the now 29-year bull market in bonds. What would be our signal that the bull has ended? For many, it would be a significant break of the trendline drawn from the 1982 lows. About six months ago, I asked Trader Dan for a historical chart of the U.S. long bond. Here is what he sent:
I emailed him today and asked him to include an updated version of this chart, along with some commentary, with his next blog post. Once again, you can find his new blog here:
http://www.traderdannorcini.blogspot.com/
He replied that he will be happy to post something later so keep checking there for an update.
And, as always, Santa can be found here:
http://174.133.72.211/

OK, back to that chart. It would seem that critical, if not vital, support lies in the area around 115. A breech of that level, and then a further decline through 110, would seal the fate of the long-term bond bull and it would mark the true "beginning of the end" of the U.S. ponzi. Therefore, long bond prices must be watched closely. This is also just another reason why Q.E. will not end in June of this year. It won't end in June of any year. It is truly QE to infinity.

Now, that said, let's review three long bond charts. First, here's the daily Feb11 long bond future:
Note that on the date QE2 was announced, the long bond was trading around 130. It almost immediately began collapsing toward 120. (For neo-Turdites, remember that falling bond prices mean rising interest rates and we simply can't have that. Go back and watch this for further explanation.) http://www.youtube.com/watch?v=9FGVtJRWP6k
Below 120 in early December, its clear that the Fed began to directly intervene and support the bond market as you can see the very odd, 2-month, 3-point range that followed. Uh-oh, don't look now, but the bottom has dropped out of that range. After a slight rally today, price stands at 118-10 and, to me, looks to be headed lower.

But, how low? Well, here's a weekly chart to review:
Here you can plainly see all the Fed-inspired support that lies around 115. My guess is that we're headed there pretty quick and you are about to see a great, gargantuan struggle unfold. Here's a monthly chart to ponder, too:
So, lets put all of this back together.

1) The long bond is breaking down and appears headed to a test of the all-important 115 level.

2) The Fed will defend that level with unlimited Q.E.

Then, you get two possible results:

3a) 115 fails. The long bond begins to collapse. Interest rates begin to sharply rise. The U.S. ponzi begins to unravel. The entire political/financial complex begins to collapse. Aren't you glad you own gold and silver?

3b) 115 holds but only through massive Q.E. All of those freshly printed greenback continue sloshing around the global financial system. This causes continued sharp price increases in all things dollar-denominated. Inflation rates skyrocket. Global unrest intensifies. Wars. Insurrections. Riots. Madness of biblical proportions.  http://www.youtube.com/watch?v=O3ZOKDmorj0
Aren't you glad you own gold and silver?


On that happy note, I'll sign out for today. However, keep a vigilant eye out for Blythe and The Monkeys. If I spot something interesting later tonight, I'll let you know. TF

ps To these ends, don't forget that the new POMO schedule will be announced at 2:00 EST tomorrow.

72 comments:

  1. Gotta tell 'ya Turd, this blog kept me sane during January sell-off. Can't thank you enough.

    Donation enroute...

    ReplyDelete
  2. Hats off turd on long bond info along with trader dan!! Great stuff!! Looks as if we've a breakdown gargantuan stirring in the benron burnankenstein buck/bond! As far as commodities goes? He's got to be unloading trainloads of adult diapers at the dead head fed goon central banksters facility!! dead head fed goons on the run; runs!! hehehehehehehe!!

    ReplyDelete
  3. Earlier today somebody was looking for a long term silver chart. The one at the bottom of this page goes to 1975.

    http://silverprice.org/silver-price-history.html

    ReplyDelete
  4. "Interest rates begin to sharply rise...Aren't you glad you own gold and silver?"
    -----------------------------
    Just being a thick-headed Devil's advocate, but wouldn't high interest rates drive down the price of Gold?

    ReplyDelete
  5. Mammoth: In this case, rates would be rising because of failing confidence in the ability of governments to pay back principal to bondholders. This decline in confidence would be evident in a similar decline in all fiat which would, in turn, cause PM prices to skyrocket.

    ReplyDelete
  6. The long bond absolutely will not collapse until my TBT calls have expired worthless.

    ReplyDelete
  7. I was around for the run of PM's '79/80! Highest interest rates ever U.S, unless you now have an 80% credit card!!! I can tell you at double digits rising to 20% interest rate this time around, the whole paper chit house gets bulldozed over the precipice!! No doubt!

    ReplyDelete
  8. Won't we see panic in all markets when the the long bond collapses which could drive gold and silver prices down initially?

    This price hit on gold and silver could be severe but would reverse and then propel to the moon.

    Any thoughts?

    ReplyDelete
  9. Thanks for bringing the bond market to the front burner Turd. Turdites would do well to understand how critically important it is.

    ReplyDelete
  10. LongDongSilver! Depends on the confidence game played by banksters/elitist neoCON politicians!! With so much fraudster paper piled into easy money mortgages for fees; now imploding into foreclosuregate! 30% of all homes under water and the double dip of homeageddon sucking the life out of the CON'dsumer! Jobless looking for western justice in the street! It'll be a stampede to commodities, so short in supply; there won't be enough fiat paper in a dump truck for a loaf of bread!! This one comes as a thief in the night, as the feds will be out of borrowing power; cutoff naturally, through negligent decades of franken finance, mutated to worthlessness!!

    ReplyDelete
  11. This comment has been removed by the author.

    ReplyDelete
  12. Based on the current deficit and repurchase schedule alone, we need a Fed that will buy $300 billion a month, with $100-120 billion in new coin of the realm.

    We get QE3 regardless, but this amount of buying can drive rates down just by purchasing everything outstanding on the long end, there is less than a trillion 10 years and out publicly held.

    ReplyDelete
  13. I think Turd is right about the metals doing well with high rates. There was a chart I saw one time that showed a positive correlation with the gold price and interest rates. It's the exact opposite of what I had always believed.

    Some people were wondering why the gold/silver stocks were not doing as well as the metals themselves. I remember last year Schiff or someone talking about hedge funds putting on a trade where they would short the HUI and buy gold, which caused the HUI to underperform. It's possible they're doing the same thing again this time around. Managed money is getting back in, and that means hedge funds.

    So, I'm more inclined to go long the metals than the stocks right now, but at some point in time fundamentals have to win and the stocks will make up for their underperformance.

    ReplyDelete
  14. Turd,

    I hate to be a pain, but any chance you could write up a full post about this wynter benton individual? I'd like to refer some friends to a cogent summary of what's been going on, the rumors, how things have played out so far that agree with the story being told over at yahoo, etc.

    Thanks in advance :)

    ReplyDelete
  15. flaunt: Good idea but I don't think I'm the one to do it. I only know what I've read here since the only boards I participate in are this and ZH.
    Would someone else like to take a crack at it?
    It could be emailed to me and I could copy-and-paste into a new post.

    ReplyDelete
  16. As for this whole WB thing, while I remain skeptical, I had been following WB's posts since early Jan and sought comfort in the hopes that the end of the month would bring life back to my battered positions. The price action on Feb. 8 and WB's specific post regarding that date can't be denied. I have very little doubt as to his/her credibility.

    What I do have doubts about is whether they can stand up to JPM w/o the help of some deep pockets. WB mentioned that their group is a smaller group playing off of more substantial billionaires out of China who intend to step in above $31. I tried looking at the charts from the Nov time period which was supposedly the last time these interests did battle but I'm no chart reader. It just looks bloody as all hell w/ the longs eeking out a victory at the end.

    ReplyDelete
  17. I am prepared to accept the whole Benton thing, but, even if they are sure they can do what they are planning to do, why do they think that the rules will not be changed any day to stop them?

    The rules were changed on the Hunt Brothers, on "Silver Thursday":
    http://en.wikipedia.org/wiki/Silver_Thursday

    ReplyDelete
  18. See David Morgan's article on Silver Thursday:

    http://news.silverseek.com/SilverInvestor/1269355937.php

    Seems to me that the Comex can increase margin requirements any time they like. They could neutralize Benton. Anyone who has read all the Benton posts see any mention of this vulnerabilty?

    ReplyDelete
  19. Think I just answered my own question. The hedge funds would not be vulnerable to a margin increase because they would deposit 100% of the contract value. See this comment:

    "Assuming a silver price of $30 and the known fact that Comex only has 105 million ounces of silver of which allegedly 50 million ounces are available for delivery, this is what hedge funds can do to earn 20 percent like they did last December.

    This hedge fund would purchase over 21,000 contracts and deposit 3.15 billion dollars ($30 X 105 million ounces of silver = $3.15 billion). Once March 1 comes rolling around, guess what happens?

    You got it!! Comex doesnt have the silver to deliver.

    Now what? You got it again!! Cash Settlement.

    In December, the cash settlement was as high as 30 percent for some people and as low as 10 percent for others. The average was around 20 percent?"

    http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_J/threadview?m=tm&bn=10073&tid=381868&mid=381959&tof=-1&rt=2&frt=2&off=1

    Sorry if I'm confusing people. As you can see, I don't trade futures.

    ReplyDelete
  20. Turdle: raising margins has no effect if you plan to stand for delivery. BUT you must have the entire cash cost of the contracts you own on deposit with your broker. For example, if I have 150,000 in my account, and buy one silver conract for 30.00, 5,000 ounces, I can stand for delivery if I notify my broker. They can raise the margin all they like, I have the cash for the silver on deposit.

    ReplyDelete
  21. Thanks sassballsgrandpa, I've just discoverd the same answer that you have provided.

    But, there is still the issue of position limits - how many futures contracts can each person hold? This is where Ted Butler, etc. has been focussing the lobbying efforts, but concentrating on the massive short side positions. What if the CFTC instead instituted very small limit on the long side? This would limit Benton's impact, and possibly ruin them if they were forced to reduce their long positions (e.g. forced to liquidate their positions before March 1)

    ReplyDelete
  22. So Wynter says they're buying up March contracts right? I expected a large jump in March open interest but 61 contracts were actually lost. The total open interest was up 3465 but most of the contracts were added to April and May. Almost 81,000 contracts traded which is many times the increase in open interest so I guess it's tough to make any hard conclusions based on that 61 number. Still, this piece of evidence doesn't jive.

    http://www.cmegroup.com/daily_bulletin/Section62_Metals_Futures_Products_2011026.pdf

    ReplyDelete
  23. One question I have, also going back to the Hunts: trading in silver in 1980 was limited to "liquidation only." How does that work since every seller is met by a buyer, and a buyer by definition wouldn't be liquidating? Seems like there would be some interesting rules there.

    ReplyDelete
  24. flaunt, I think Harvey said this right tonight: "We lost only 61 contracts and we are one day closer to First Day Notice."

    Still 64K March contracts. In Wynter's wildest dreams, 20K contracts (100M oz) will actually stand for delivery. Even 10K contracts will do a ton of damage.

    Perhaps Wynter's group is adding March contracts and genuine hedgers are moving back to April/May?

    I'm still skeptical about WB myself, but definitely inclined to think something is up.

    ReplyDelete
  25. Hey Guys,

    I've been trying to get a hold of my coin shop for the past two days, no answer. It felt a little unusual.

    Plus, my computer was knocked out by Desktop Cleaner Extreme. I couldn't connect to AOL or read my email. I started to get worried and thought the day of reckoning had arrived.

    Slightly off-topic: PLEASE do not buy or install Desktop Cleaner Extreme! I paid $69 for this monster. It's a porno magnet, it created hundreds of folders all over my computer and filled them with very disturbing photos. Does anyone know what "skat" is?

    I called my son to help me out. At first, he thought I needed to see a therapist for porn addition. My son said he deleted 20 gigabytes of photos from my computer. The old computer runs MUCH faster now.

    Anyway, so I stop into the coin shop this afternoon to check on my buddy. I found him dusting shelves and asked why he wasn't answering the phone. He asked me what number I was calling, and I realized I was dialing the wrong number.

    He had a bunch of Silver Maples and tried convincing to buy a bunch of them. Is there any reason I should look at Silver Maples or Eagles?

    ReplyDelete
  26. More of a macro thing, but I had the pleasure of speaking to a gentleman from Ireland and has spent time in the states for the last few years. He went back a week or two ago and then just barely got back when I was talking to him. He said that Dublin is a totally different place now that he's been back recently... the people are truly hurting and "pissed off" like no other. He said along the lines of this: My people were in a bubble, they only knew what was inside their bubble and couldn't see what was outside of it or the grander picture. So I asked him in response "Do you think the states have realized their bubble?" and he responded, with a sound "No" but he conditionalized his answer with this: "I've always been a believer that the states are innovative and will find some way out."

    I personally disagree with his take on the states. I don't think there is any way out other than outright default.

    When I was walking home from work this evening (working in NYC for a few months) there was a begger on the side of the street. A lady asking for money and spare change to "help" her. I walked on by and ignored her. A block later, I said to myself "Fuck this, I'll see what I can help her with." So I walked a block back on the other side of the street, grabbing a slice of warm pizza on the way. I walked back and offered it to her instead of money. She responded, "Thats nice, but I need money to go inside and eat." I said "I'm offering you help and I'm not going to give you money" and she basically said, well thank you, but "I am not interested."

    I know she doesn't represent all Americans, but okay America (as a whole), fuck you and the horse you rode in on. You're as blind as the Irish and you'll end up the same way too. You're fucked and you just don't know how bad it is yet! Even your homeless are picky as all hell, refusing a warm meal in 28 degree weather because you want to lie to me saying you have to PAY to eat food inside. I've never seen a restaurant refuse a person to come back in their doors and eat food purchased at their establishment and I know for a fact that this woman was looking for a way to squeeze booze money from me.

    This is a really screwed up country. I like my brews and after this incident I'm think I don't have enough stockpiled for when the zombies start knocking...

    ReplyDelete
  27. Turdle is absolutely right, they can and do change the rules whenever it serves their interests to do so. WB & Co will have to establish their positions before that can happen if they are to succeed.

    Back to TF's original point: 3b is the most likely first scenario, but it could be followed by 3a. Not a pretty picture either way and it's essential to own things with intrinsic value (ie: PM) when it happens. BS Bernanke may really believe he can "gently" inflate us back to positive growth, but that horse seems to be getting out of his control.

    Harold - Thanks for mentioning TBT options, I was not aware of them. There is another inverse bond ETF (RYJUX) but no options available.

    ReplyDelete
  28. co_dan, I'm not inclined to make too much out of that number. I would like to see some more days like we saw yesterday though, that would give me more confidence in what Wynter is saying.

    ReplyDelete
  29. Agreed, flaunt. I'd say I'm 50/40/10 right now.

    50%, she's legit; 40%, she's one of Blythe's Monkeys luring in greedy hedgies for a slaughter; 10%, she's an attention-seeking wingnut.

    After her performance yesterday, wingnut seems unlikely.

    ReplyDelete
  30. @B- the people standing on the corner asking for a handout are asking for money because they want to buy another hit of illegal drugs on the street. They already have food stamps, public housing, public healthcare, and unemployment or disability payments moving. They can not use those checks and accounts for drugs because the checks are tracked.

    You can always verify the situation for the needy by offering actual food. When they choose to ignore the food, you know they're not really all that hungry.

    ReplyDelete
  31. Nice blog, Turd. Great charts and commentary. Thanks!

    I also like the over sized hat. It's funny!

    ReplyDelete
  32. TF, The silver trade today tells me one thing. Someone is having a hard time shorting COMEX. Like I pointed out, right before COMEX open, there was a huge spike in spot. Then mid-day there was an equally large drop to force the price back down. Might it be that someone is trying to use market arb to force the COMEX market downward? Very very possibly....
    The last two months really haven't made much sense in silver trading. Silver started trading inversely to how the class dollar trade should work... that tells me someone is _really_ trying hard to make silver look like poor man's gold.

    We all know it's really wise man's treasure...

    ReplyDelete
  33. Gentlemen,

    This on-going debate about the legitimacy of the WB pseudonym on Yahoo!Finance is a bit funny.

    Perhaps instead of debating the reality of the poster's identity, we should be debating the reality of the strategy offered.

    The reality is that there was a prediction and it bore out in the market. There was subsequent price action prior to COMEX open this morning. This was supposed to be the day the beat down came from JPMC. The beat down showed up but didn't get very far.

    Now, we're told that we should look for a beat down tomorrow.

    We sound more like an financial abuse victim looking for another whipping.

    Instead, I submit, we should be looking for the financial stick to hit JPMC and BM again.

    Some of us apparently have enough firepower to force Comex to deliver. Best wishes to those parties and I hope they actually do get their silver.

    As for me, I go down to the coin store and add to my position when I see the price "falling" into my buy range.

    I am very patient and only get stampeded into buying on an accelerating chart when I know for certain that the train is leaving the station and will not be back.

    The train is leaving the station and it won't be back.

    I give a better than 90% chance that Silver will close this week at $31 or higher.

    The trading patterns over the past three years suggest so.

    ReplyDelete
  34. Thanks man, now I'm craving NYC pizza - I had some there back 1999 and it is so much better than the crap we have in Florida...

    ReplyDelete
  35. Good video found on silvergoldsilver's blog from David Franklin of Sprott:

    http://watch.bnn.ca/#clip415382

    ReplyDelete
  36. Posted earlier on Harvey Organ's Site:

    Thank you for your continued hard work. I believe JPM is not accepting GLD as collateral for margin accounts. They know full well it is a shell game. As investor redeem shares for the phsyical, do these shares get retired or are they resold with no new physical metal to back it up? I have a nother thesis on the FED. It would seem that they are stuck with a huge issue on many fronts including balance sheet exposure to rising rates, derivatives blowing up the banks, commodity prices running rampant and US debt service going through the roof. Man, I don't know how he sleeps at night, but I think they have a plan. It would appear to me that this whole run up in the stock market will be a catalyst for the biggest bond buying binge you may have ever seen. What happens when the stock market starts to go south, most investors take flight for safety in US bonds. This typically drives down the yield. I bet in the near future we will see the biggest sell off of the stock market creating a flight for "safety", probably timed with some announcement from the FED that they are starting up a program to sell off their balance sheet of investments. There is a reason Bill Gross is buying MBS hand over fist, in the near future the interest rates on the bonds he holds will be higher than what is available. He will sell at a profit. Oh yeah...forgot about the muni bond problem. This scenario certianly helps the states and cities with this problem as well. Seems a watershed selloff on the stock market would send people running for "safety" (i use this term loosely) into the bond market. Thoughts?

    Jack out

    ReplyDelete
  37. impala driver--

    Nuthin' wrong with Maples. If the price is right, buy 'em.

    Too many people are all about Eagles. If I say they are overpriced, they say yeah but the buy back price is higher too. To that I say, as soon as your nice Eagle gets a spot, a scratch, a fingerprint, or the tinyest bit of tarnish, guess what you are not going to get a premium for it anymore. Now you'll get the same price as anything else and you paid a big premium for nothing.

    ReplyDelete
  38. StrongSideJedi,

    I would respectfully submit that the Wynter Benton story, IF (still a big "if") it plays out as projected, could be a bigger story than the Hunt Brothers -- something the history books will be writing about decades from now.

    Fascinating theatre, but also worthy of discussion IMHO.

    ReplyDelete
  39. We will most likely see more of the same. The legislation for QE2 was broad enough to allow it to be expanded without an official QE3. Therefore, no one even really needs to know about it!

    An overall rise in commodities with occasional beat downs and margin increases. I'm not too familiar with food commodities, but it would seem they should be a relatively difficult to manipulate, compared to PMs at least.

    ReplyDelete
  40. That there is some good post, Turd. After reading it, I feel like I much better understood where the long bond is at, and what's in store for it. Thanks for the insights.

    Expecting a manufactured dip in the stock markets soon as another part of the sales pitch for QE3. Trying my best to maintain powder for junior miner buying then. Don't think the PMs will dip much, especially relative to paper anything or real estate, but I hope I get the chance to back the truck up one last time. The conclusion is less in doubt every day, CIG&SA! Please keep the good stuff coming, Turd.

    ReplyDelete
  41. Both Turd and Harvey tonight are indicating we may be at the precipice of systemic financial destruction.

    Turd: Is 115 the final defense line?

    Holy chit.

    ReplyDelete
  42. CO_Dan-
    The WB story is undoubtedly newsworthy, but that same news media is unlikely to cover this story. The WB group of investors are not likely to be controlling alot of ad revenue. Equally unlikely is that members of the WB squad control media coverage or influence it more than JPMC.

    The kicker was observing local news media digging into their anti-precious metals positions over the past four weeks and in particular the last few days.

    You can not find reasonable financial analysis or economics on ANY broadcast media sources. The reason is that the news directors are making coverage choices based upon directives from owners and not based upon their own personal judgment of what is "newsworthy".

    Getting back to the comments being bantered in this blog a few days ago, the WB strategy appears to be arguing for a pinch on JPMC silver position by driving costs up with heavy buying in the trading pit.

    The COMEX open interest appears to be a giant measure of the risk exposure of COMEX.

    There seems to be some assumption in this discussion that COMEX can obtain the money to cover the silver delivery demands.

    Let's assume that 10,000 contracts demand delivery and that the COMEX reserves are ruined by a COMEX silver run.

    Who backstops the COMEX if the COMEX is broke?

    I distinctly recall Jim Sinclair having some choice words about this exact scenario about 2 or 3 years ago when COMEX was getting tight on gold.

    Who backstops COMEX? Is it AIG insurance or JPMC or BONY?

    ReplyDelete
  43. Art, Yeah, NY Pizza is some of the best I've ever had. Sure, there is the cheap junk that is $1/slice, but I'm in spanish harlem and the good stuff is $2.25-$2.75 a slice. For those that don't know, a slice in NYC is about 4 slices of your crappy large Dominoes pizza.

    StrongSideJedi, That is why I offered the lady a slice of warm pizza. If she accepted, I'd offer more help such as potentially cash if she could justify the need. Maybe a Metrocard (which pays subway/bus fairs in NYC and isn't as liquid as cash) or something else... Turn down the food, and I know you're begging for the wrong reasons.

    ReplyDelete
  44. Defending 30.08 for the second time tonight...will she hold?

    ReplyDelete
  45. Here's an interesting posting by WB from back in October 2010.

    Re: UPDATE: Silver $22.08 RTQ and SLV Silver holdings inside 1-Oct-10 06:54 pm Robbie,

    I also have first hand knowlegde that there is a group out of asia that is buying over $100 million of physical silver since July. They basically have been trying to buy all they can up to $21. The reason they are doing this is because they have first hand knowledge that a group of billionaires are trying to corner the world market on physical silver.

    The guys that I know of are not billionaires but they run in the same circles. My group believes in what they are doing 100 percent and are certain that an outright shortage of silver will happen almost immediately. I cant verify how they know this but I can state with certainty that they are have amassed over 4 million ounces in physical silver.

    I am just curious the nature of what you know. If you are at liberty to divulge more info and would like to share/exchange info, my email is wynter_benton@yahoo.com and no this is not my real name. Just a moniker that I have used now and again. Thank you.
    ________________________________
    A person named Noah responds:
    4 million ounces among billionaire's? What is the point?

    It would not take a consortium to corner the market it would take ONE guy - say a Carlos Slim to do it and take delivery in a guarded secluded warehouse.

    If I were in the club, I would recommend that we first drive the futures down, then buy out all of the producers on the cheap- and they are CHEAP, PAy $10 for HL eg., buy out of the money calls on every silver futures contracts and SLV...then WHAM...
    __________________________________

    WB responds with:
    Noah,

    I think you misunderstood my posting. The people I know are not billionaires. They are a group of around 25 investors whose net worth range from $15 millions to $80 million. They know of a group of billionaires that are trying to corner the market ala the Hunt Bros. Their understanding is that these "billionaires" will corner the market first in the physical and as the supply gets tight they will buy massive amounts of futures and options contract, i.e. the paper silver, on the Comex, LBMA, and options on SLV.

    When there is a physical shortage of silver, these billionaires figure that the paper contract will default. This is not where they are looking to make their killing. They look to sell to the paper shorters some of their physical supplies when the price is north of 40 perhaps up to even 100. Obviously, my group understands that they are too small to influence the prices like the "billionaire club". They will do what the bigger boys do. They believe that paper silver contract will default and that the real profit is on physical silver.

    However, in order to make a killing in the silver market, they will have to purchase enough paper silver contracts to force a default.

    The end game is nebulous because these guys will initially sit on a fortune in paper contract profits as the price of silver rise from 30 to 40 to 50 to ?????

    But eventually, these billionaires realize that when silver hits 80 or 100, JPM and the banking crooks will find a way to not pay up, perhaps a "force majeure" declared by Comex and the LBMA. That is why these guys want to hold physical silver before killing the banking cartel with paper contract.

    They are fully aware and anticipate not getting paid with their paper profit from paper silver.

    Hope this clears it up for you.

    ReplyDelete
  46. Another WB posting (note the date)
    Re: UPDATE: Silver $22.08 RTQ and SLV Silver holdings inside 3-Oct-10 07:53 pm Buzzy,

    I dont believe it's a matter of how long we can hold paper silver contracs before it defaults. I believe it's a matter of price. When silver gets above $40, I believe that those who are short silver will be sitting on massive losses perhaps as much as $7billion in total. This is assuming they hold their current positions and not add to them as the prices icrease. At some point in time, one or several players will choose to exit their position and force silver up to $100 or more.

    Imagine you are AIG and the price of what you have insured is going up (i.e. your losses re increasing). At some point it will jeopardize the firm and either you cover or go under.

    Now imagine you are JPM and their short silver cohorts. They are sitting on unprecedented losses on all their gold and silver short positions. As of today, each and every short position ever put on is suffering all time losses. They can handle the losses right here but what happens if silver (for whatever reasons) go t $40 or $60 or higher. Then it is a fact that losses will increase unless they cover their shorts. But the mere act of short covering will send losses even higher.

    So the bottom line is that I believe that anything under $40 for silver will be safe from a default. But of course, once we get to $40 then any number even $100 is in play. Think about the tens of millions that could be made buying 60 70 strike prices right now. You probably wont get paid on these contracts cause at $100 the losses to JPM and friends is north of $27 billions in cash. Good luck.

    ReplyDelete
  47. Wow, that's some interesting stuff you found there. I guess if I was a millionaire or billionaire and knew anything about the real numbers I would be trying the same thing. One thing about guys with big money, they usually have an instinct for how to get more.

    ReplyDelete
  48. 30.02...bounce !

    This is an exciting struggle, but 2am local time - I'm going to bed.

    Will i wake up to mid 30's or mid 29's ?

    See you all in the morning !

    ReplyDelete
  49. Was googling for gold articles and came upon this 1999 article by Marc Faber which has to be arguably, the call of the century. Downright prescient and considering spot today it's pretty humorous as well as the author thinks about making the "ultimate contrarian play" at $280 gold.

    Should Bill Gates trade Microsoft for gold?
    http://www.forbes.com/global/1999/1115/0223099a.html

    ReplyDelete
  50. Let's see what happens today, thursday mornings (4am-9am) have been bullish in average last 2 years.

    ReplyDelete
  51. And 9am-10am period on thursdays has historically been specially bearish.

    ReplyDelete
  52. Perth Mint Out of 100 Ounce Silver Bars for at least 6 Weeks

    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/10_Perth_Mint_Out_of_100_Ounce_Silver_Bars_for_at_least_6_Weeks.html

    ReplyDelete
  53. $29.86? Here comes a Bikini Whale!

    http://www.youtube.com/watch?v=Oh5J33KAaqw

    Always loved the B52s.

    ReplyDelete
  54. Assuming Gold( and to a lesser extent Silver) is traditionally a direct method to discover the value of a fiat currency, wouldn't a bond collapse negate the need to bother manipulating for this reason?

    Could not your (JP, et al) money be better spent on productive purposes, like perhaps for profit generating activities. Metal price suppression is merely discounting a price for others and losing your capital in the process.

    ReplyDelete
  55. @Eric. That's why I don't buy premium eagles. Unless you're going to "safe-queen" them, what's the point? I buy buffalo's because they're just as recognized and not as costly. I even buy generic stuff too. .999 is .999; it all looks the same when you melt it.

    ReplyDelete
  56. Anyone know why Gainesville consistently has a $0.10 higher spot price quoted than the current market value?

    ReplyDelete
  57. Don't know why they are higher on spot, but they are. What matters is the total cost of the item delivered into your hand. For small lots they seem to be consistently on the low side as compared to other PM dealers. Not real happy with their communication skills right now though!

    ReplyDelete
  58. Here is a counter argument to the question about Silver Eagles. Personally I collect them preferentially due to the arguments posted here (Btw, also features an imaginative solution to the housing crisis):

    http://news.silverseek.com/TedButler/1196788997.php

    An excerpt:

    "Because Silver Eagles are sold at a premium to the price of silver from the Mint to wholesalers, few if any of the 160 million regular Silver Eagles minted and sold since 1986 have been, or will ever be melted for their silver content. ... Silver Eagles that are sold by investors are bought by other coin investors. Therefore, the silver used in Eagle productions is taken off the market, in my opinion, forever."


    Did you catch that last sentence? The silver in American Eagle silver coins is successfully taken off the market forever. As explained in my other articles, the demand for silver is dramatically increasing while, in accordance the U.S. Geological Survey, the availability of silver is strictly limited.

    The fact that most American silver eagles are successfully taken out of the market, means the dwindling of the strictly limited world supply of silver is further accelerated.

    Assume the buyers hoarding doesn't make much distinction? Contemplate this ...

    The American Eagle silver coins are the world's leading silver bullion coin. It's purity and weight is assured by the U.S. Government, and there are greater than one hundred sixty million American silver eagles present ... with 1.6 million more being sold every month.

    When the silver supply crisis hits, the U.S. Mint will stop minting them (due to the influence on the diminishing supply of world silver), and the premium on these silver coins will soar as individuals try to grab their share of a discontinued resource.

    When this disaster hits, most individuals will be unable to afford even one 100-ounce silver bar. Thus, the demand for one-ounce coins will grow even more. The premium on small items, such as the one-ounce American silver eagles, shall be larger than on larger bars.

    It has been said should you own 1,000 American silver eagles 15 years from now, the value of that relatively small holding will probably be truly shocking. Even those holding gold and gold coins, should convert some of their holdings into American Eagle silver coins as they'll probably be worth more than gold some day.

    ReplyDelete
  59. Blythe's on deck, 8:30 am smackdown is in progress.

    Rock lobster ... down, down, ...

    ReplyDelete
  60. Note the date of Mr. Friedman's articles:

    Dec 4 2007

    ReplyDelete
  61. Nice red candles at 8:30-8:31 and 8:33-8:34.

    ReplyDelete
  62. I live about 5 miles from GVille coins in Tampa (Lutz), FL. Have bought from them in their showroom twice so far, and both times before I went in I had Kitco's chart of live silver prices on my phone. When I asked what spot was the owner pulled the GVille site up and quoted higher than what Kitco had Live on my phone. I asked why it was higher, and he said something like "well, our site pulls from another site that might be a minute behind or something". I said, well I have Kitco on my phone now and it shows silver at X amount (which was about .10 cents lower coincidentally enough. He didn't want to hear it and didn't want to drop it to that rate either, but he knocked .05 cents off and met me in the middle.
    Nice guy and nice place and all that, but yeah, they're always quoting higher than the live rates for sure.
    On that, as I said yesterday...2 weeks ago when I purchased from them Eagles were 2 bucks above spot. Now GVille's site advertises them for 2.75 over spot. Just sayin'...
    No biggee...BTFD no matter what, right???
    Kitco shows 29.88 as of right now at 9:02am Eastern.
    I'm outta work at 4pm and will most likely be heading over to GVille afterwards to order up another couple rolls of Buffs.
    Can I pick anything up for anybody? haha
    I won't kill ya on the rate! ;)

    ReplyDelete
  63. @cris: That's a great view in a time when things are happy and cherry. It's just like anything collectible. When times are good, collectibles have value; but when SHTF, it's just another "thing". Tell you what.. if, God forbid, the worst case scenario played out and the coming mathematical certainty of the destruction of the dollar put this country in worse conditions that the great depression, I couldn't care less if the face of God was printed on the coin.. it's value is melt value, period. Collectibles are ONLY collectible when people care about collecting and keeping. When eating trumps that.. collectible goes out the window.

    ReplyDelete
  64. Someone asked about buying maples.

    The local coin dealer was showing me some Canadian silver coins including some new maples. They had spots on them. He said Canadian silver is the worst looking stuff there is. He said even Mexican silver looks better. The reason for paying a premium for eagles and maples is numismatic/collector value which is negated if the coin has spots on them. (He says profoundly.) A pristine ten year old gold eagle is worth more than a 2011 eagle but not enough to justify hanging on to it for ten years.

    ReplyDelete
  65. @UGRev... I own ASE's and nwt stagecoaches but I agree WTSHTF the only advantage the ASE will have is recognition.

    ReplyDelete
  66. Nicely done Turd. I've linked to you from my blog.

    Read my blog! Pretty girls!

    http://micksfund.blogspot.com/

    ReplyDelete
  67. Here is a counter argument to the question about Silver Eagles

    ReplyDelete
  68. jimmy choo glint
    Isabel Marant not to mention their husband's comments Jér? kkyyttssddfsafafda everybody Dreyfuss need developed form his or her's give good results, styling some cult dress lines (their) not to mention up-and-coming fashion accessories lines.

    ReplyDelete
  69. sdfsdfsdfdsfsdfsdrrww
    A lot of people explained that they can chosen these kind of skinny jeans in Elle Macpherson. That they feel that your Isabel Marant skinny jeans go well with Drew’s fashion adequately plus the tie up absorb dyes moves adequately using your ex bohemian fashion, nevertheless your ex various other equipment create your clothing way too occupied, along with these kind of skinny jeans are generally excellent automatically along with needs to be the concentration in the clothing! Probably these are appropriate, isabel marant cleane boots nevertheless every single gentleman features the hobbyhorse, My spouse and i even now like these kind of Isabel Marant skinny jeans in Drew Barrumore along with your ex set is ideal many people feel.

    ReplyDelete