Monday, March 21, 2011

The Battle Continues

I must admit that I am not really watching anything but silver right now. The way the action continues to be centered around $36 is really fascinating.

First of all, its not just me. My pal, Trader Dan, has picked up on this, too.
http://traderdannorcini.blogspot.com/2011/03/still-watching-silver-deliveries.html
Note that Dan is also paying close attention to the remaining March deliveries. As you might expect, Harvey is all over this. Be sure to read his update tonight.
http://harveyorgan.blogspot.com/
Here's a c&p of the salient points from Saturday:
"And now for our object of interest, silver.

Again, we had another volatile day at the silver vaults as silver moves around faster than the Lone Ranger's silver bullet. All the action occurred at the customer level.
Two customers received two lots of silver totaling 694,164 oz  (599,210 oz and 94,954 oz)
Three customers withdrew 3 lots of silver from 3 vaults:

1. first customer:   12,489 oz
2. second customer;  363,078 oz
3. third customer;  154,464 oz.

total withdrawal  530,031.

Net addition of silver to the vaults therefore was  164,133.
We had a tiny adjustment addition of 29 0z of silver to the customer.

The Comex folk notified us and this is totally mystifying us, a grand total of ZERO OZ of silver notices were sent down yesterday.  And this is in a delivery month!!!!!.  Blythe Masters must be beside herself on this.

Thus, the total number of notices remain at 978 for a total of  4,890,000 oz of silver.
To obtain what is left to be served, I take the OI at 893 and subtract out Friday's deliveries at zero which leaves me with 893 notices left to be served or  4,465,000 oz.

Thus the total number of silver oz that is standing for this delivery month of March is as follows:

4,890,000 oz (served)  +   4,465,000 (oz to be served) =  9,355,000 oz
Yesterday we had  9,510,000 oz so we most definitely lost  155,000 oz to cash settlements and probably a huge profit to boot. Nobody in the right mind would pluck 100% of the total cash waiting for delivery and then roll to the next month.  Because the next delivery month is equal to the current month in cost to the investor due to lack of contango it makes no sense to roll unless you receive your handsome reward.

Many of you are alerting me to a yahoo finance chat group discussion where one individual is having trouble receiving 3 contracts of silver and that the comex are offering him SLV paper with a 70% premium.
I have no verification as to the authenticity of this.  However I am trying to get this individual, if he exists, to contact me.

I would like to point out, that 4,445,000 oz of silver that remains to be served is huge with about 9 trading days left. Approximately 500,000 oz of silver must be served on average for the next 9 days. I think Ed Steer is going to lose his bet to his friend who bet Ed that the silver will default.  Let us watch this closely as the month of March ends."



Besides the open interest numbers, the main thing you'll want to watch is the contango/backwardation between March and May. The first sign of real, imminent trouble on the Comex will be the March11 trading at a premium to the May11 (backwardation or "the backward asain", as Hyde says). IF that begins to develop, the short squeeze may, in fact, be on.

Now, take a look at this updated chart. For me, the key area to watch is 36.18-36.28. You can see why here:
Based on today's action, I'd say there is a very high likelihood now that we are going to push through this area, perhaps as early as this evening. When that happens, the only remaining line of defense for the Wicked Witch and her monkeys is to fall back and try to create a double-top at or near 36.75. Since this containment strategy has failed oh, about the last 20 times or so, there's no reason to expect it to work this time, either. A break of 36.75 will cause another round of short-covering and silver will be drawn to $37.50 like Charlie Sheen to an 8-ball.

Regarding, the POSX (my new name for the USDX), Gonzalo Lira has submitted an update that you should take a few moments to read:
http://gonzalolira.blogspot.com/2011/03/toldja-dollar-broke-lowerso-now-what.html

OK, I've got a last of $36.12 so let's go get em! This could be a very fun 24 hours! TF

p.s. One more thing, as the Euro is taking out some resistance levels today, I thought you might like to see a euro/$ chart. Looks now like 1.45 is coming pretty soon.

133 comments:

  1. Please pardon the repost...but if this is true, I fear the Black Swan is circling...WWIII?

    Iran Orders Attacks on Saudi Interests Worldwide Furious over Bahrain, Iranian leaders are openly recruiting suicide bombers to strike at the kingdom. March 21, 2011

    http://pajamasmedia.com/blog/pjm-exclusive-iran-orders-attacks-on-saudi-interests-worldwide/?singlepage=true

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  2. Is the great Comex silver failure upon us? Not unless there's no silver in Comex warehouses, no silver held by SLV and no silver in London. That is, not likely.

    http://northeastbullion.tumblr.com/post/4007063331/is-the-great-comex-failure-upon-us

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  3. Brian O'Flanagan wrote:
    ==================================
    Is the great Comex silver failure upon us? Not unless there's no silver in Comex warehouses, no silver held by SLV and no silver in London. That is, not likely.
    http://northeastbullion.tumblr.com/post/4007063331/is-the-great-comex-failure-upon-us

    March 21, 2011 12:23 PM
    ==================================

    I am wondering whether "Brian Flanagan" (if that is his real name) has an alias, to wit, "Kid Dynamite." Does anyone else suspect that these two online personae are actually the same person in real life? IOW, is the alias "Kid Dynamite" (KD) one of Brian's aliases?

    Furthermore, what is the likelihood that Flanagan and KD are paid by, e.g., JP Morgan, HSBC, or another bankster?

    -- Paul D. Bain
    paulbain@pobox.com

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  4. You guys type faster than a Bio-Robot throws radioactive carbon off the roof of a nuclear reactor! Dang it's hard to keep up. And I am off sick today.

    Just look at silver go. $36.17.

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  5. Holy moly! Did you just see that spike up to $36.25?! Dang that was fast!

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  6. Anyone looking at NWM Mining (NWMMF.PK/NWM.V)?

    I think this was one of FuturMoneyTrends spotlights/recommendations a month or so ago. I threw some "lottery ticket" money at it, and am still holding at 18% LOSS. It's at $.143 currently.

    Just curious to see if anyone has done any DD on it. FMT tends to spew out penny stock recommendation, but I read through them for fun just in case a jewel in the rough comes along.

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  7. "To obtain what is left to be served, I take the OI at 893 and subtract out Friday's deliveries at zero which leaves me with 893 notices left to be served or 4,465,000 oz."

    ----------------------

    OI increased by 5 contracts basis last Friday, so 898 contracts = 4,490,000 oz -- about two months worth of ASE sales.

    What in the world is the problem? If COMEX cannot supply 5M ounces of silver, then this really is the END. Silver should be $100 per ounce right now in my opinion. I think I read on ZH that China imported 245 tonnes of silver last month which is about 7.9M ounces.

    Anecdotal evidence supports an extreme shortage of silver. Instead of allowing the price to rise, TPTB will just make in unavailable. This is just like the manipulation that is occurring in the housing market. Instead of allowing the housing market to fall to its natural level, it is subsidized by shadow inventory, government buying incentives, low interest rates, etc.

    All markets are controlled.

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  8. Can someone explain to me in simple terms how the COMEX can ever default?

    Section 7B14 of the Comex Rulebook gives the clearinghouse the right to settle in cash at market value plus a cash penalty not to exceed the difference between delivered and market value if the market value is lower. In other words, they have the right to buy you out for the same amount you're in it for. So first of all I do not buy these stories about settlement in SLV shares + 70% premiums or in cash + 80% cash premium - I just don't believe it. Maybe I am wrong and not reading the rulebook correctly but it seems to state quite clearly that the recourse in event of failure to deliver.

    I am not trolling, this is a serious question.

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  9. I think 3 straight days of strength in Silver including a gap morning and now Turnaround Tuesday makes it enough for me. Risk/reward is not so good here as we match a top hit 10 days ago.

    Reducing size, sold into strength and awaiting tommorrow now in all trading positions for Silver. My long term holdings will catch further upside but i Have learned to respect the white lightening in both directions. Just my opinion. I am also picking up fever on the boards, never a good sign.

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  10. Nice to see XRA and HL laggards as well as the ever enigmatic VGZ picking up steam. I am biased of course in this respect.

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  11. Can someone explain this to me? My understanding is that all futures are "seller's option" contracts, meaning whether delivery takes place or not is the choice of the short end of the contract, not the long end.

    This means the comex would only have to deliver as many contracts as shorts would want to deliver, and no more. There is no risk of a default or a shortage. What am I missing?

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  12. argh, hilarious. copy paste:
    http://2.bp.blogspot.com/-Hi_6SitIdOc/TYWHYEiCXmI/AAAAAAAAK5Y/_-0AyX5dw9c/s400/Sunday+Funnies+2011-03-20+Bernanke+on+Food+Prices.png

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  13. RW: either side can force physical settlement

    Pablo: you are 100% correct. But silver bugs like to deal in hype, not facts, so that is ignored.

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  14. rthaler71- Appreciate the call and wilingness to share strategy. In this case however, I am staying long for this reason: it seems to me there is a clear pattern over the last few months that when silver makes a serious move it often does so after US hours. My suspicious side thinks that this is when the EE lose control during trading in Asia, and they cannot manipulate nearly as effectively. Thus, I think that when we break through the 36 quagmire it will likely be after hours, and I want to be positioned accordingly. Good trading, all!

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  15. @RW - I think we have accepted that the COMEX is an integral part of the EE, and therefore by definition TBTF. The hoped-for outcome is not so much the default (in the sense of bankruptcy), as the realization the the emperor/empress has no clothes -- the COMEX price is not a true indication of commodity prices if it is shown they cannot deliver AT those supposedly free-market prices.
    Captcha - ackstion... I'm curious to see the ackstion in silver tonight and tomorrow... pushing persistently against that 36.18 line. One, maybe two more spikes to clear 36.3, downwaves getting shorter and shallower.

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  16. pablo,
    yes i keep asking harvey the same question. he claims it is illegal to settle in cash on the comex, but the CFTC regs allow it, i think i posted the reg no. here awhile ago, as long as the rules are laid out there ahead of time.
    someone else must know better, as i'm no securities lawyer.

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  17. rthaler - Short term - I agree with your analysis.

    pining - I also agree with your sentiment.
    You have to wonder if Jamie Dimon will be flying to HK, Tokyo, or Singapore in the next few days in order to personally intervene in Asian trading hours. If I was him, I'd have the hotline to Blythe open at 9 PM EST and be sitting my butt in Tokyo or HK to personally "encourage" the JPM trading desks to "do the right thing for Japan and JPM" (yeah, that's a bit of sarcasm.)

    However, the longer term big picture is remarkable. It is obvious who is doing what and why the people are stuck holding fiat paper while elite are literally banking off-ledger reserves in gold and silver.

    JPM has announced a $0.25 dividend (up from $0.05 dividend previously). The announcement was made yesterday.
    JPM stock appears to have moved from $45.00 per share to $46.00 per share in mid-day trading. It has since backed off to $45.50 and flailing.

    If the reports of silver short position for JPM are correct, we should see the silver price and the JPM price converge.

    I'm thinking the convergence will start in May at around $43.00 per share of JPM and per ounce of silver. This is pure speculation on my part, but it is based upon the following

    1. $36 per silver ounce appears to be too correlated to someone's pricing defense line.
    2. Tomorrow is terrific Tuesday and therefore, I expect the price to move up during Asian and London trading hours. Therefore, I expect to see BM appear at 10 AM EST tomorrow regardless of what is happening on the AssoPress copy.
    3. JPM needs the price to move down about 10% to have a reasonable correction but we are OEX and some shorts need to buy. They're in a heap of trouble if we are correct and no amount of deflationary pressure from Asia or MENA will help correct it.
    4. Euro strength (i.e. stench) appears to be rotting from within.
    5. Dollar strength (i.e. stench) appears to be rotting from debt burden in BOTH government AND private capital.

    This cat appears trapped, wet, and scared.

    Pathetic...

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  18. I echo Pining,
    I am going long overnight, come what may.

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  19. Atlee,

    We went and got some more EXK today. Unfortunately, my broker and I played phone tag and it was up over 4% before we bought for one account.

    Yes, yes, I know. Broker? So antediluvean (a word that will rise with increasing frequency in this crazy world of ours, methinks.)

    But no worries. We're in for the medium to long run.

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  20. say no more ... say no more...

    http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201103171017dowjonesdjonline000447&title=jp-morgan-ceo-jamie-dimon-plans-on-traveling-to-tokyo---source

    NEW YORK -(Dow Jones)- J.P. Morgan Chase & Co. (JPM) Chief Executive Jamie Dimon hopes to travel to Tokyo next week, a person familiar with the matter said Thursday.


    ___________________________________

    And, apparently, the Tokyo Electric and Power Company does not concur with Mr. Dimon's plans.
    Reports that the workers have evacuated from the Fukushima power plant as grey smoke is now billowing from reactor 3.

    On the other hand, I'm sure that Dimon-san will enjoy the glowing work of his petrified traders who need a lift to Los Angeles.

    (Dimon to Nippon Traders - Stay where you are... we need you to sell! Sell you idiot sell!)

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  21. Pablo, here's the transcript on illegality of cash settlement from harvey organ:
    harvey,
    where in comex regs does it say cash settlement illegal?
    cftc has specific rules for outlining cash settlement procedures, just can't find where the comex's procedures are. but they must comply w/ cftc regs and these settlements would be non-confidential.
    so, if the cash settlements weren't done under the table, the cftc should have these reports.
    if, more likeley, these settlements were secret backdoor settlements, both the traders and the banks would be violating cftc rules.
    please let me know if you can shed light on these rules.
    thanks!
    March 3, 2011 7:58 PM
    To Cookie Monster:

    it is illegal to settle in cash for silver and gold. You must have serial numbers and bar numbers for all gold and silver;

    I think Harvey is trying to say you can't naked short, and to him settling in cash is the same thing?
    As a lawyer, we usually like to refer to something from the code section when something, like not settling in real metal, is illegal, but as of yet i have not found that code section. I'm all ears if someone knows it, though.

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  22. rthaler71 said...
    I think 3 straight days of strength in Silver including a gap morning and now Turnaround Tuesday makes it enough for me. Risk/reward is not so good here as we match a top hit 10 days ago.

    I respect that. That is trading discipline! I stayed and bought a little more on the close. I liked the action and want to be there when we blast off and it seems it has all been overnight.

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  23. This comment has been removed by the author.

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  24. Oh, my young Brian... shouldn't you be mixing drinks in Aruba?

    Please don't bash gold bugs, we're all not blind and we are continuously doing the "due diligence" thang.

    Pablo brings up a good point, and I'm heading off to verify/investigate.

    BTW, you and the Kid are welcome here anytime as far as I'm concerned. Most of us are just looking to make good trades on facts, not hype. Though we do get excited when silver goes up!!

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  25. Pining

    the problem with your Turdi/HUI idea is twofold. #1 we would never agree on the list anyway, and #2 even if we did it might be more useful as a contrarian indicator of the most frothy miners in the universe!

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  26. Pablo,
    Clearly there is a difference between the COMEX clearing house and the seller of the short future. The Clearing house is only liable for the cash price, but the rule does not seem to allow the short to settle in cash, it seems that 7B02 requires the sort to deliver the silver and does not give them a cash out clause.

    Rules are here:
    http://www.cmegroup.com/rulebook/NYMEX/index.html

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  27. thanks SilverRun, and yes, Cocktail is my favorite movie!

    http://www.imdb.com/character/ch0013233/

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  28. FYI RE: Palladium

    I noticed three things over the weekend:
    1) On Saturday, Tulving had a lot of PA for sale at spot price. I was thinking to myself: Man! Great deal!
    2) The Friday COT showed a big jump in net position of commercials in PA.
    3) On Sunday night, Tulving had no more PA for sale.

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  29. atlee

    If I'm not mistaken, The Great and Powerful Turd has a short list of miners himself, and I think EXK is one of them.

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  30. Oh, I take it back. Tulving does have some PA back on their list now. But they're still sold out of palladium maples.

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  31. hmm, the mystery remains then whether the clearing house members can settle in cash. but i think pablo's right. it won't crash the comex:
    The Clearing House shall not be obligated to: (1) make or accept delivery of the actual commodity; or (2) pay any damages relating to the accuracy, genuineness, completeness, or acceptableness of certificates, instruments, warehouse receipts, shipping certificates, or other similar documents; or (3) pay any damages relating to the failure or insolvency of banks, depositories, warehouses, shipping stations, or similar organizations or entities that may be involved with a delivery.

    If you read 802, default procedures, each clearinghouse member puts money in a guaranty fund. If JP Morgan goes broke, it seems like the COMEX has sort of a bankruptcy court process set up. So creditors, those w/ the contracts, get something, but not everything, and the COMEX keeps on chugging.

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  32. @cookiemonster -
    BTW, great blog site...loved the music video with Shatner.

    Regarding the Comex settling in cash, the Comex is making an independent deal between themselves and the contract parties.

    Therefore, I see two issues.
    1. Civil - but that's between the contract parties.
    2. Criminal - but there is no specific US Code Section that we can locate regarding any criminality for substituting Federal Reserve Notes or SLV paper shares for comex physical delivery.

    What are the U.S.C. sections which govern the operatin of Comex?

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  33. Im all in right now. I just put a stop loss for over night. I wish I could do buy and sells by time and not price. I notice we go up till 3am est. then dip till 5am. est. I like to buy at 5:30am then sell at 9:30am buy back just after 10am and hold and repeat.

    The pattern has been spot on due to EE strike in the morning. Just that I know one of these days I might miss out getting back in.

    Cant the morgue take new long positions to cover the old short ones? Let the price run up make new shorts sell and repeat. I can't see why Blthye can only be short if only because the FED needs it to keep fait from collapsing

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  34. CookieMonster,
    I started to read rule 802 and my eyes glazed over and I felt very sleepy.....
    Yes it l0oks like comex survives and you become a creditor to a bankruptcy like procedure ...with some resolution rules already in place...

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  35. Let us assume we are a dealer, we are short the remaining 4.5m ounces, and we indeed have the physical silver.

    Because of the slight backwardation (between spot and March 2011), our best strategy would be to lend our silver to somebody else for as long as we can and deliver as late as possible, i.e. on Last Notice Day.

    This would be rather boring. All the 'missing' silver would magically appear at the very last minute. No squeeze whatsoever. Just some big entity optimizing their trades.

    Victor

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  36. in the tone of Hommer Simpson - "mmmmm, 8-ball"

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  37. So the President of the Clearing House can extent the time for failure of notice on his discretion (for good cause). Interesting!!

    end of 7B14
    "A failure by a clearing member carrying a short futures position to notify the Clearing House on or before the time specified by, and in the manner prescribed by, the Clearing House on the last day on which such notice is permitted shall be deemed a violation of this rule, except that the President of the Clearing House may, for good cause, extend the time to present such notice."

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  38. I have been accumulating gold and silver for several years now. Never have considered buying palladium or platinum. What are the advantages/disadvantages for adding them to my stockpile?

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  39. @ Eric#1

    If Turd has EXK then I know I am in the best of company. With great earnings tomorrow and hopefully the liftoff toward $40, it could be a noteworthy day. I am hoping at least.

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  40. There are two types of delivery:

    "delivery" - when the comex stores the commodity for you

    "physical delivery" - when you get the stored commodity physically shipped to you

    I can't find anywhere that the long can force "delivery"; only the short. However, if a long has been able to get "delivery" to the comex from a willing short, but then is unable to get "physical delivery" from the comex, then there is a problem.

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  41. 36+ even after early morning EE raid? Wow is Blythe losing control or what?

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  42. averagejoe Said... I notice we go up till 3am est. then dip till 5am. est. I like to buy at 5:30am then sell at 9:30am buy back just after 10am and hold and repeat.
    ---
    interesting pattern Joe! I'll have to dig up the charts on that one.. you think that works for every trading day or just before Tuesday? Thanks for sharing.. there are probably a whole pile of people with buy stops around *.60 but we'll see... i'm always encouraged by the Asian/London up-trading but these days both sides of the world can't seem to get in sync with each other!

    cheers -D

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  43. GL Atlee
    Hope we get some real moment going again. That would be awesome.
    To see $40/oz would be something

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  44. Go with EA's picks and you will get fucked. The end. Pump and dumper and there isn't a doubt in my mind about that now. Stay away from MVW and his most recent bragging and pumping of GX. I'm sure he will drop in to run his mouth again, but the proof is in the pudding. Glad I got out of MVW when I did. Awesome market day and good miner/oil day, unless you went with MVW, down 20% today and GX was down 10%. Thinly traded companies being boasted by someone who does nothing on this blog but recommend stocks while contributing absolutely nothing to the community should be your sign. You've been warned. Bubbles, since I'm sure you are going to spout off at the mouth again, you and EA can come do all the trash talking and trolling you want on my blog, leave this one to mature adults who are trying to help one another out. Have a nice day!

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  45. atlee

    yes, my gut tells me 36 is going to fall soon. I'm not going to nitpick the next 75 cents or whatever. I just think that big fat round number of $40 is going to be the mother of all battles and make 36 look like a skirmish.

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  46. Pablo et al -

    This is my take on the COMEX default issue. Turd, do you agree?

    The posted terms and conditions of the CME group DO allow the cash settlement of silver futures contracts. The holder of a futures contract who had properly posted his money and stood for delivery would have no recourse for large penalties against the COMEX, and his only option would be to take the counterparty (e.g. JPM who had made a naked short) to court for damages.

    When most people refer to a COMEX default, I believe that they mean a DELIVERY DEFAULT (failure to deliver physical metal). There are many industrial users, for example, that have no intention other than to settle their contract in physical metal.

    The greater question I never hear asked is: if the counterparty has the money to settle in cash, why don't they just go on the open market and buy/lease silver good delivery bars with that money instead of defaulting on the contract?

    The answer exposes the TRUE shortage of world physical silver inventory for sale, and also exposes the fraudulent, suppressed silver price which is allowed by the CFTC/CME conspiracy to faciltate naked shorting of silver.

    If there was a requirement that all sellers of silver futures had to post 100% of the the metal good delivery bars in the COMEX warehouse before selling a contract, then delivery would never be any problem (and the price of silver would be far higher).

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  47. Its looking like once $36 is taken out convincingly, we could be knocking at the door of $40 in days! Silverdoctors.blogspot's call is $40 by April! Time to sit back and enjoy the ride!

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  48. Justin,
    Doing some DD and ran across this Stock Guy
    blog endorsing MVW. Does anyone know about this guy? Comments welcome. Thanks everyone, this is a great blog. Been around since the beginning and
    trying to learn. http://stockguytips.blogspot.com/

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  49. T Lane,
    For me, the biggest advantage to PA is that when it goes up, and I have a contract, I make money. But seriously folks, ...

    I don't own any physical palladium because I'm still working on completing my physical silver position.

    I think the only perceived advantages for PA:
    1) It's been going up strongly in price. Last year, I think it was the #1 commodity in terms of price. I made some very good money on this last fall -- it just kept going up strongly.
    2) Some think that it will be immune to confiscation. (I don't really worry about this).

    But for me now, the advantage is that it recently dropped very hard and was accumulated by commercial interests (per COT report).

    Right now I just have a small position in PA futures; no physical.

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  50. Golden,

    Longs cannot force delivery from a short. Even if you hold a short futures contract past the First Notice Day, there is no danger you will receive a demand for delivery, because there is no such thing.

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  51. Ask Bunker Hunt (and GATA,Ted Butler et al) about Comex rules.They can and WILL be changed/ignored/broken as the EE see fit.
    WE are not ready for default, it IS coming and it won't be pretty.

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  52. @ Art,
    I have no idea who Stock Guy is. I do know that I've been following MVW and the moves up and down in that one are enough to keep me out of it, especially when some knucklehead keeps pumping it, claiming it's a retirement pick and then says he has inside information that he can't divulge(then deletes that comment when called out on it). I think Turd's blog has gotten to the point in it's life where pump and dumpers realize the amount of traffic this blog gets and are trying to take advantage of the newbs. No denying that a lot of posters/readers here are still wet behind the ears when it comes to trading and investing miners and they are praying on the lack of knowledge when it comes to the sector. This is why Turd and everyone else tells everyone to do their own DD and not invest at the recommendation of a complete stranger. EA comes in here and recommends these stocks on days they are up 50%, he is pumping them to newb's because they see that gain and think they have to hop in it as quick as possible to ride it to the top before missing out.

    There is a big difference between those of us who are regulars and talk about stocks we like or are invested in and someone who only posts to tell us to hurry up and buy something.

    Invest like a sheep and you will get cut down like a sheep. 'Nuff said.

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  53. Talk about foresight. Here's Martin Armstrong, in 1986 (yes, a quarter century ago!), predicting a sovereign debt crisis appearing in...wait for it...2011 (Wow. Talk about being on the money.)

    He then goes on to say that this may "perhaps culminate in new global monetary system by 2016."

    http://www.martinarmstrong.org/economic_projections.htm

    (3rd Economic Essay down on left)

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  54. The reason I think $40 will be the mother of all battles is because as soon as 40.00 prints anywhere, then the brain dead teenagers in MSM will start going "$40?, $40? Wait that's almost like $50. I remember my Grandpaw saying something about $50 silver from way back in the day, before they had internet, flush toilets, and everything!"

    TPTB are going to want to nip that conversation in the bud before it ever gets off the ground.

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  55. Pablo said...

    Can someone explain to me in simple terms how the COMEX can ever default?

    --------------------

    Sure. You stand for delivery and COMEX "decides" to give you cash or SLV instead of physical silver. Legally, Section 7B14 of the Comex rulebook gives COMEX that escape route, but it is a default. YOU stood for physical delivery, not cash. You got cash. COMEX defaulted. Maybe not technically in legal terms, but that is indeed a default because a futures market allows settlement in the actual product. If COMEX does not allow settlement in physical, then it is not a market at all.

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  56. T Lane

    Platinum and palladium are mostly industrial metals. Sure there is jewelry made out of these elements, but is still looks too much like silver.

    IMO, Palladium has done well due to its use in catalytic converters (mostly in China & India etc) since it is cheaper than Platinum.

    There are rumors of shortages due to Russia depleting their huge stocks of palladium over the years. Russia isn't saying how much they have left.

    Bottom line, if you think that the world will continue to produce more cars requiring these metals, they will do well.

    I personally think that TPTB are going to stick it to China since they are becoming too uppity by raising the price of oil to 150-200 FRN. These people don't care if millions of people die as a result of not being able to afford food.

    IMO, the best way to buy physical is Canadian Palladium Maples and good old US Platinum eagles.

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  57. We definitely agree- look for a big knockdown to be attempted (whether its successful remains to be seen) near the $40 level

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  58. I think that Brian has a valid question about COMEX. I think he should be answered so that he can understand better what the situation really is.

    Cookie Monster, I saw Nookie Monster in the news the other day at his address of the International Sex Workers' Solidarity Convention in Las Vegas, and I couldn't help but wonder if you might be related... You both seem to have the same fur, though of a slightly different color, same eyes, some mouth, and the same big hands. Are you siblings?

    SE

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  59. @Irene

    I am certain you will do very well on your latest EXK purchase. I too purchased more today. All the moves have been overnight so it is tough to get that correction we all like to buy. Go

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  60. SLW started after hours in red but now up .17c

    A good sign IMO. Lets see how the asian markets respond to it. Hopefully we go pop.

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  61. @Joe Jost,

    With respect, I don't believe the COMEX decides anything nor would they substitute SLV share. From my reading of the rules it appears that the short may default on you, but your recourse is limited to either 1) COMEX making you whole again vis a vis a cash settlement, which COMEX then attempts to recover from the short, or 2) the long goes after the short directly via arbitration or settlement (which may concluded upon terms agreeable to both parties, perhaps this is where the SLV shares enter the picture).

    My point is, the delivery is a contract between the seller and the buyer and COMEX has an incidental third party agreement to facilitate this transfer but is not in and of itself on the hook for anything should the short default on a delivery.

    I could be wrong about this and likely am, I am wrong about a lot of things, but all the talk of COMEX going under, huge cash premiums, and COMEX deciding to buy off longs with hush money just does not make any sense to me whatsoever.

    Not trying to argue just trying to get to the bottom of it because I think it will help us all, myself included, to understand the situation fully.

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  62. First of all I am no expert on the Comex or it's default procedures, but why would anyone take a PNT for May in March without a premium? We have had at least 10K PNT for May. The simple fact that you have to cash settle two months early proves they should never have taken the contract in the first place, thus Fraud.

    As for March if you can pay off the 890 or so contracts in cash what are you waiting for. Do it! Your attracting just as much attention if you pay later or pay now.

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  63. I got brave today people, I threw money at a miner without doing ANY research on it at all. I still haven't even gone to the company's website even after buying it. I'm feeling pretty gangster.

    I've been getting tired of my lagging BULM and since I recouped 8% of my losses today I figured it was time to move that money somewhere better and put BULM back on the watch list. I've been monitoring a lot of uranium miners after they all took a beating due to the Japan reactor clusterfuck. They bottomed out last week but I decided it was best to wait until after the weekend before placing a bet since everyone seems to like putting out bad news after the closing bell on Fridays lately.

    URRE gained 33% last Friday, URG got 18% today and my new holding CXZ still hasn't seen a jump back up yet like most of the other ones out there have. I'm betting on its previous holders who ran out of it being more cautious than other uranium players and taking their time coming back to it. This one still has 68% left in it to go before being back to it's "normal" going price so we shall see what happens. For all I know they won't be coming back, but either way I had to do something else with that BULM money since it was taking its sweet time getting me back to being even.

    I bought in today @ $1.30 and it closed at @ $1.35 so I've already made 3.8% on it. Wait, that's not right. After hours it jumped to $1.50 so I gained 15% on that beeyotch today! This one is going to be good for at least $2.15 in the near future. At this point as long as no more reactors try committing suicide, these uranium plays are almost guaranteed bread winners if they haven't seen drastic jumps back up to their regular going prices.

    I don't recommend jumping in blindly like I did, I just wanted the cheapest one that still has a lot of moolah to make up. Do your DD. ;)

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  64. Pablo,
    Are you saying the CME has no responsibility?
    They have to or why take a commission. It is their responsibility to insure good faith. That is why there is margins. If they allow a person to cash settle on say tens of thousands of silver contracts, then why not wheat or coffee or sugar? All credibility is lost. A few incidents, Ok, but thousands. I don't think it can happen without the CME making good.

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  65. Justin if i did that, I'd be looking for change in my couch. I'd have gotten killed. The stars must be aligned your way

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  66. "Pining for the Fjords said...
    rthaler71- Appreciate the call and wilingness to share strategy. In this case however, I am staying long for this reason: it seems to me there is a clear pattern over the last few months that when silver makes a serious move it often does so after US hours. My suspicious side thinks that this is when the EE lose control during trading in Asia, and they cannot manipulate nearly as effectively. Thus, I think that when we break through the 36 quagmire it will likely be after hours, and I want to be positioned accordingly. Good trading, all!"


    Non-COMEX trading is managed via the electronic market (GLOBEX) which is open almost the full 24 hours a day. Don't worry, the manipulators got this market firmly under control - the real (physical) markets hardly influence price at all currently.

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  67. Just saw that some of those links direct right back to this blog. Not sure how I fudged that one up, but you have the symbols. If you don't know how to find them, you might want to reconsider your decision to invest your money on your own. I only say that because I have seen people on here ask how to find quotes on companies we talk about. Scary stuff.

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  68. @ Ferdinand,
    After investing in CXZ, I went straight to Network for Good and donated to them since I have been making money off of other plays due to all of Japan's issues. Staying on the right side of Karma pays off I guess.

    *thumbs up*

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  69. WTF. That link is directing right back here too. I'm trying one more just to make sure I'm not losing my mind. Let's see if YouTube and my reliable childhood crush will play nicely:

    K.P.

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  70. @ Justin

    I'm going to open a slush fund and just have fun. I've never played penny stocks and figure if the world is going to pot well, I want to have some fun before all is lost.

    Donating % of wins is always good. *+100*

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  71. Boom. I can always count on her to make things better.

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  72. @ Irene,
    It's fun to get carefree every now and then if it's money you can spare or money that was already taking a hit anyway. Can't say I'll ever do it again, but this is one of those rare occasion's when I saw a fire sale and on a product that isn't going out of style any time soon.

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  73. Why would I say the CME has no responsibility?

    They have responsibility as outlined in the rules posted on their website. Don't try to twist something different from what I stated!

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  74. Justin,

    Good call on your comments about EA's pump and dumps. (just catching up on this thread) Any stock with volume of 50k shares or less is a recipe for disaster. You really have to watch out, there are plenty of pumpers.

    Even with stocks with lots of volume.... like AMPW (American Power Corp). Run as far away from AMPW as possible. It's a coal play in Montana run by a CEO that's well know for fraud. Didn't practice DD, but luckily only lost $400. Could have been 10 time that, but I corrected my mistake quickly.

    I'm actually looking forward to having EA or Bubbles come back with some resemblance of justifying their stock pumps.

    So Economic Analyst, why does such a great company like Mountainview Energy have such horrendous trade volumes. Yeah, yeah, it's a retirement stock, buy and forget. Yeah, I'll forget I had any money left when the stock goes to .05 and gets delisted.

    My apologies to anyone on this board that owns this stock. If you do, please do your DD. Wouldn't hurt to re-evaluate.

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  75. @ Justin

    Absolutely. Life has gotten so serious that we all need to blow off some steam and just go for it.

    My husband just nicknamed me the BNB, short for the "Bad News Bureau". (I tend to keep up more on the economic news than he does.) He'll ask, "So, what's the BNB reporting today?" For better or for worse my foot. ;)

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  76. @ SilverRun,
    I don't like rehashing drama, but I know a couple people on here were either already in that one or bought in after he started pumping stocks here. I can't just keep quiet on this one knowing people have money at risk. Either of those could skyrocket and stay high, but I seriously doubt EA is looking out for everyone's golden years by recommending "retirement" stocks on days they are obviously being pumped. I've had a feeling lately that there is a network of bloggers who are in a game together to pick mining penny stocks and then run around the Internet pumping them to everyone they can since there is growing interest in this sector of the market. EA is definitely a pumper who's blog capitalizes off of fear, one look at his ads and the content he posts is proof of that. I don't wish harm on others, but I wouldn't be upset if he were to get run over by a dump truck full of rubber dildos.

    @ Irene,
    All my friends refer to me as the "News Guy" because all I ever talk about is the insane happenings taking place all over the world right now. I don't mind it, I kinda like when I get phone calls or messages asking me what I think about certain situations. Trading is my job right now since this economy has killed the airline industry and my field is aviation electronics. I spend probably 12 hours a day on the computer now reading news and looking at stocks. I have a serious addiction to the news but it is paying off. I'm still fairly new to trading versus having a 401k, but it is fun watching how the entire world ties in to the markets. Trading isn't a job, it's an adventure!

    If things keep going good, it would be awesome to never have to work again and just do this full time.

    "Find something you love to do and you will never have to work another day in your life."-Harvey MacKay

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  77. Turd mentioned on an earlier what would be a good time to get completely out of all paper before tshtf. After a lot of thought and research, that omen IMHO will be gold backwardation. Its not happening now, but silver in backwardation is one step away. Gold backwardation as far as I can tell is the 5th horseman, who rides a golden horse:)

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  78. Pablo, I'm not trying to twist anything, I'm not sure what this means:

    My point is, the delivery is a contract between the seller and the buyer and COMEX has an incidental third party agreement to facilitate this transfer but is not in and of itself on the hook for anything should the short default on a delivery.

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  79. anybody else picking up on minera andes?

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  80. Justin,

    Thanks for your concerns re: Mountainview. I made a cool thousand already on it so I was *thinking* about dumping it. I did notice in their corporate presentation that they estimate 1500 bpd production. If they hit that mark and oil prices stay high, well it's actually fairly optimistic. But like you said, if its a pump n' dump and you can prove that they are flying around the internets posting its greatness, then you definitely have a point.

    Also, congrats on the dart board uranium pick :)

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  81. @ Justin

    I wish you good luck with your trading. Keep us in the loop and we'll always be around to cheerlead. ;)

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  82. If I'm an industrial company that requires silver to build say solar panels and you hand me cash, while I have to shut down my factor and run out of inventory. Someone is going to going to get sued, but before that my senator and congressperson from my district is getting a call and being told I just laid off 150 and lost 56 million dollars because those asshole at the CME screwed me. Then they call and jump all over the CME and the CFTC?
    It's only simple if it's traders

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  83. Just looked at CXZ again and the after hours trading has it back down to $1.37 now. Still up from when I bought, but it appears this one is going to have a volatile ride back up. Just started looking at it's price history and going back 6 months it has a double top of $2.60. Hoping for $2.15 but I might ride this one if it gets there and still looks good.

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  84. POSX! Pretty friggin funny if it wasn't so true.

    Israeli warplanes bomb Hamas in Gaza is what I just read on ZH. Lebanon and Hezbollah should start any hour now.
    Throw in the fact that Iran is giving Saudi Arabia a hard time and it makes me think the U.S. fly over of Libya is just a warm up and excuse to take Iran on. Our assets are ready and positioned.
    Maybe we (France, Britian, U.S.) are about to take over Libya's underdeveloped sweet crude oil fields in a bold energy asset seizure under a liberation pretense? You never know.

    It seems like Egypts and Saudia Arabia's armed forces are on the sideline for now. Maybe getting ready to take on Iran or each other.
    I'm sensing a total distrust among former allies when old alliances just unraveled and suspicion is deep.
    Israel is on high alert and seems ready to kick ass given any provocation.
    A veritable hornets nest over there.

    All good for crude if your long.

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  85. jake the snake :
    Yes I bought some on 3/18 ,looks like a good one!

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  86. Atlee, good takes. I am only counterpunching at these levels. Remember that Turd was long and confident into Turnaround Tuesday last week on Monday night. I went against my normal strategy and joined him. This was not his fault, it was just events at the time. Now we have unresolved Fukushima situation that has been put on back burner by Libya but could blow up again at any time.

    So rather than guess at a news event emerging suddenly from the shadows or dealing with the awful spectacle of the gorgon,B.M., emerging from her lair I will lay in wait for her attack. She will attempt to cut the elevator cable sometime usually either immediately following manic Asian buying very early in the morning or at her regularly scheduled 8a.m. to 8:30 a.m. racketeering window. Then I buy into both the first and second leg of the drop, pyramiding on down. Who knows? There will still be plenty of time to catch a train regardless before we break the 36.75 sound barrier I think.

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  87. @ferdinand
    Yes you are completely correct, however the futures market was organized from its inception as a FINANCIAL hedge for the businesses that use the commodity just as you describe, when the business gets their money be it profit or loss from the contract, they would "in theory" use that money to buy the material on the open market at that time. They almost never plan on taking physical delivery from the actual contract, but rather ensure through those contracts that they will have enough money to buy the commodity at fair market value on the open market right after completion of the contract. Fellow Turdites feel free to correct me if I'm wrong, but the futures market has always existed mostly as a financial hedge for cost fluctuation, not a hedge against a supply shortage for the underlying commodity which we are witnessing now.

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  88. zzz28: thanks for the ping

    It looks like a keeper to me. Anyone else have anything, anything at all? Buhler?

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  89. Jake :
    Check this one from Yukon Cornelius, Wildcat Silver Corp. WLDVF.It was up 20% today.

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  90. zzz28: it's a target rich arena!

    and thanks!

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  91. If Legally, Section 7B14 of the Comex rulebook gives COMEX the fiat escape route "at Parr", why would contracts standing for delivery be paid up to 75% more, as has been rumored?

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  92. @ Jake The Snake

    Rob McEwen... enough said...

    Huge copper play.. on top of gold
    Was in it before, left for other opportunities, but since the buyout it has been moving (last week sometime?). Anytime you can get in a company where Rob McEwen gives input and is a shareholder, things tend to work out.

    Good luck
    -
    Scott

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  93. Silverblev,
    Thanks I see, but why then are we looking for a default?
    If it is a paper exchange and no physical commodities is meant to change hands then how do we have price discovery? Supply of everything is infinite with paper, no force to drive price down

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  94. 9,380,000 oz still standing for delivery! 8 days till the main event!

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  95. scottj88: it's not a buyout

    it's a spinout

    while dilutive, you get one share in the new company for every share you hold in the existing one

    had a long conversation with their investor relations person and made a move

    the copper angle could be stupendous, and like you say, if McEwen is involved, things have a way of working out

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  96. Charlie Sheen on silver: WINNING

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  97. A couple posts ago, Turd mentioned the Berkey water filtration system. Along the same lines, I recently purchased the SteriPEN Sidewinder, a hand crank water purification system that requires no batteries or electricity. Apparently the thing can purify 8,000 liters before the bulb runs out. If anyone is interested, I can post a full review of it once I test it. The thing goes for around $100 at most retailers.

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  98. @ferdinand

    From the silver contract specification:

    http://www.cmegroup.com/trading/metals/precious/silver_contract_specifications.html

    There is a Trade at Settlement provision that allows counterparties to negotiate a price pegged to the settlement price(ie premium) in active month contracts.

    The problem I see is that the gambit is to cause the COMEX to settle contracts at a premium but the average retail investor will not benefit from these off balance sheet transactions. IOW, the post price is not going to include the juicy hush money premiums. This was my complaint with the whole Wynter Benton garbage. Just trying to sucker in retail to put pressure on the system but in the end, the hedgies will be the only beneficiaries.

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  99. jake
    Yes, I'm a huge McEwen fan too, and talked about it on this blog. Ate my own cooking and bought some Minera a week or two ago, got lucky and caught that spinnoff news. Yay!

    You take out the copper play, you still have a very nice silver play leftover. Should get just as much action around here as Panther, Endeavour, any of those.

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  100. Eric#1:

    yay!

    and the good news is, with the spin out, you sell it but you still got it

    just like a whore house!

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  101. Daily trade update. As much as it saddens me to lighten my PSLV position, I closed a few hundred shares of it out today since I bought more physical over the weekend. I acquired 100 QID shares in the premarket today, which at close put me under water by $52.

    Like was pointed out on zerohedge: When volume drops, things magically go upward in the markets. Damn the stinking manipulation.

    I did not buy any puts today, but if I could have been trading intraday (busy day for me), I'd have bought some index puts for May 2011.

    Totally wonderful day for the shiny stuff :) I'm convinced more than ever that there is a shortage that won't be met.

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  102. Ok, newbie question here.

    (first...thanks Turd for a great blog)

    I've got SLW and ABX in an IRA. It's done well but can't touch the profits till retirement. Not much fun here and now.

    What do you guys think about buying a contract on the Silver Mini with a stop around 34.50 and then just letting it ride for a few weeks till we hopefully take out 37 or beter.

    I'm not smart enough (and don't have enough experience) to daytrade the futures. But I believe I can buy and hold a little while. I figure the 34.50 stop would give enough lattitude for ups and downs but still offer protection in case of a major downturn (black swan or otherwise).

    Thoughts?

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  103. thecoloredsky

    I, for one, would greatly appreciate your report. Thanks

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  104. Justin & SilverRunNW,

    I have watched EA's posting patterns since this blog started and am in whole hearted agreement with your assessment of his motives.

    I have also noticed that it appears he has a team of aliases that run with him. They write in his style and tout the same picks right after he does, or after he gets some heat. His assistants all have user IDs that relate to football. ie.: nfl_guy, billsfan, stuff like that.

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  105. publiusnot,
    Thanks, I'll put on my lawyer hat, you know the tin foil one and see what I can find.

    Appreciate everyones help

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  106. Ferdinand has a good point, why ARE we looking for comex to default? Silver/Gold Bugs have been calling for a default pretty loudly since at least 2005 online, and they were saying the default was immanent and with just as much conviction as we are now. We know the comex is smoke and mirrors to a large extent, and our foe has an unlimited supply of smoke to blow up investors 'entry points' however low they may be. I know I'll draw some flack for even saying this but there will be no comex default unless it behooves the EE for the same reasons you cite (price discovery etc) what WILL happen, and what is already happening is buying out contracts in cash, accompanied by a steady increase in price. The EE can't keep price down anymore, but they can slow its ascent to keep it from drawing too much attention to the plummeting value of FRN's. Industrial users will get their silver even before the us mint does, which is too bad because they will just use it up and basically waste it (like we really need more polyester in the world), but its good for us because the price will keep going up and up and up. The EE know the cat is out of the bag re: the manipulation.

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  107. My advice to newbs on here. . . read Turd's archives for a day or two while also monitoring the board. You will find in Turd's archives a list of Au and Ag miners that Turd likes, as well as his sentiments whether to buy or hold and at what price. You can't get clearer guidance than that. . . AND IT'S FREE (well voluntary pay thru the "feed the Turd" button).

    Monitoring the board allows you to see which miners get mentioned most frequently, which ones have positive news, etc. You will also get a feel for the knowledge level and areas of expertise of the regular posters and will figure out who you might want to ask for advice.

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  108. Hey ho - was catching up on comments and hadn't checked prices in a bit. Of course as soon as I type, silver stalls. But I am liking it.

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  109. And good conversation about the Comex stuff. Pablo thanks for starting this. It had come up before bet didn't get going. And also people remember we are all trying to understand something complex that was not designed with the outsider in mind. If someone posts something that doesn't make sense to you - don't get snarky, just ask a question or whatever. I was going to (and still am going to sort of) call on Justin to tone down his rhetoric. Marcel - very interesting that you tracked comments - really backs up Justin's posts. It is a funny fine line between sharing strategies and therefore stock picks, and trying to get people to buy your picks

    Amazing how 36 is holding

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  110. bet = but Now there's a freudian slip.

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  111. I should never post good news about price again. If only I could put my magic powers to work, instead of slowing down check out lines and causing momentary drops in the price of metals.

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  112. My take on the CRIMEX is that they are entitled to settle for cash. If they could not you would have a soverign wealth fund step up to the plate one month and overwhelm it.

    However, that being said, if you need physical and get handed cash several times, would you not find another market that has the physical? I don't think the CRIMEX will default. But they will lose credibility and eventually be absent clients.

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  113. Gold key to financing Gaddafi struggle

    The international community has hit Muammer Gaddafi with a raft of sanctions and asset freezes aimed at cutting off his funding. But the embattled Libyan leader is sitting on a pot of gold.

    The Libyan central bank – which is under Colonel Gaddafi’s control – holds 143.8 tonnes of gold, according to the latest data from the International Monetary Fund, although some suspect the true amount could be several tonnes higher.

    Those reserves, among the top 25 in the world, are worth more than $6.5bn at current prices, enough to pay a small army of mercenaries for months or even years.

    While many central banks hold their gold reserves in international vaults in London, New York or Switzerland, Libya’s bullion is in the country, said people familiar with the country’s activities in the gold market.

    US and European governments have frozen billions of dollars in Libyan assets, as sanctions have hit the central bank, sovereign wealth fund and state oil company.

    But Libya’s gold reserves may provide Col Gaddafi with a lifeline – if he can sell them. To raise large amounts of money, bankers said, Col Gaddafi would have to transport the bullion out of Libya.

    Before violence broke out the gold was stored at the central bank in Tripoli. But since then it may have been moved to another location, such as the southern city of Sebha – within reach of the borders with Chad and Niger.

    The political turbulence in the Middle East – besides boosting the price of gold to a record $1,444 a troy ounce – has highlighted the property that has for centuries made gold so appealing to criminals, investors and dictators alike: it does not rely on a government for its value.

    Following the revolution in Egypt, the country banned gold exports for four months in order to prevent officials of the former government from moving their wealth abroad.

    At the same time, Iran has been quietly stocking up on gold in recent years, in an apparent attempt to shift away from the US dollar and thus protect its reserves from risk of seizure. Other significant buyers of gold include China, Russia and India.

    No international bank or trading house is likely to buy gold with any hint of a link to the Libyan regime, bankers said. “Physical trading houses are now quite reluctant to deal with countries that have been involved with conflict – they don’t know who’s on the end of the trade,” said one banker.

    But Col Gaddafi could transport the gold to Chad or Niger, where the gold could be swapped for currency transferred into a bank owned by the Libyan Foreign Bank – a branch of the central bank.
    “If a country like Libya wants to make their gold liquid it would probably be in the form of a swap – whether for arms, food or cash,” said Walter de Wet, head of commodities research at Standard Bank.

    In addition to the gold reserves, Col Gaddafi may also have hoarded some cash from oil sales outside of the traditional channels.

    Copyright The Financial Times Limited 2011.

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  114. Key part of the story for me, and the reason why gold and silver holders are always at risk of government confiscation:

    "The political turbulence in the Middle East – besides boosting the price of gold to a record $1,444 a troy ounce – has highlighted the property that has for centuries made gold so appealing to criminals, investors and dictators alike: it does not rely on a government for its value. "

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  115. I heard Ghaddafi was paying the troops in gold since his funds are tied up. These dictators learned along time ago that in order to maneuver around sanctions/frozen assets, they had to be in possession of physical.

    Regarding the Crimex, I think the credibility issue is why we see prices rise in Asia. These are actual buyers competing for limited supply. Maybe they don't have the sophisticated derivatives/naked shorts etc. They just aren't as advanced/corrupt as our markets. As more customers get burnt with a cash settlement they will leave the COMEX market to deal in legit markets.

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  116. Turdle: ya know, you might be onto something

    Occam's Razor and all that.

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  117. Got to say I get to say I hate to be right about something, but I have been posting the simplistic question here for a few days: if you were a bad guy, or a bad guy with a family, and you were preparing to flee or get them out, or you were a wealthy Japanese family, what would you take with you? Libyan fiat? Yeah, as if. And go to an exchange counter in an airport? Gold is the bee's knees. And can anyone be surprised at the rogue's gallery of gold hoarders?

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  118. @J. E. Ghaddafi is smarter than that. He pays his men with fiat paper: http://www.youtube.com/watch?v=-bWTEgd6NPc NOT for the faint of heart.

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  119. @Pablo

    I could be wrong about this and likely am, I am wrong about a lot of things, but all the talk of COMEX going under, huge cash premiums, and COMEX deciding to buy off longs with hush money just does not make any sense to me whatsoever.

    --------------------

    Nobody has confirmed cash premiums and nobody said that JPM, CFTC, and CME will be held accountable for their criminal actions and neglect, but if delivery is not made to all of the contracts that stand for delivery, then that constitutes a default to honor the contract. The contract is to deliver the metal at a specified future date. There can be no dispute about this, and that is what market participants expect, whether they be consumers, hoarders, speculators, or hedgers. If and when it is exposed as a phony market, then all of the players will go somewhere else to buy and sell silver.

    Here is the way I see this actually playing out. As those who stand for delivery are notified privately that the seller is unable to make delivery, then word will spread of this event and buyers will turn to other sources for physical silver. COMEX may continue to be used to establish the price of paper silver however it is conceivable that paper silver could trade all the way down to less than a dollar. What is a contract worth that cannot be redeemed for any ounces of silver? I say that contract is worth zero. At that point, the price of silver -- not a contract or a certificate, but actual silver will be valued by the physical silver market. In this environment, you could source silver from bullion dealers, directly from miners like First Majestic or refiners.

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  120. In the immortal words of Homer Simpson:
    "Woo Hoo!"

    (If this is not bitch-slapped down fast, there's gonna be some heavy squeeeeezing!)

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  121. woot - just the word I was looking for! woot squared!

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  122. Please read my new post immediately. I look forward to reading your comments.

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  123. I went to check gold, and it was literally off the chart - at least, off the screen. Volume on both charts too if you can trust it.

    As to the Comex - Joe Jost - very reasonable summation. The market should fix the situation quickly. And the price will get established somewhere. But as you say, if the Comex does not work as a mechanism for trading silver actually, then it will stop working, and would have in the past too, it seems to me. So I suspect somehow it will keep going. But I really don't understand it - it does seem to allow an out with cash settlements but then why use it to get silver?

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  124. Gold prices had earlier touched lows under $1,208 an ounce on Comex as the market gears up for Yellen’s testimony on monetary policy to Congress on Wednesday and Tuesday.
    Gold Tips
    Comex tips

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