Tuesday, March 29, 2011

A Positive Development

Take a look at this 30-minute May crude chart:
As you all know, the metals (particularly gold), have been following almost every UP and down tick in crude for about the past month. Note the similarity of the crude 30-minute chart to the gold and silver 30-minute charts I posted earlier. But here's the catch...note that crude has broken the downward trend line and is clearly above it. IF this can hold...and, so far, crude is already about 60 cents off its highs...you will see the metals follow through this afternoon, regardless of the EE price-capping action we've seen the past two days.

So, watch crude very closely this afternoon. I now have a last of 104.13. Nuts. It will need to find buyers at 104 or so and then move toward 105 to bring the metals higher. TF


  1. Lindsey Williams: 150-200$ Oil coming soon.


  2. I am in silver on a long-term basis, buy and hold. If I want to do some short-term trading (1-2 days), do you have any suggested vehicles that might work best? futures? options on SLV? one of the souped-up 2x or 3x ETFs?

  3. 76.40 double top in the POSX? Fits in well with the 8-hr chart

  4. PMs are headed lower because the Cartel is firmly in the driver's seat going into month end. If gold closes above 1440 on March 31, then I am wrong. Otherwise, we are going to 1390 and then possibly 1370 to check out support. They limit gold rallies when the dollar is weak, and gold falls like a knife through warm butter when the dollar rises. Any kind of minimal dollar retracement in April will make easy pickings for the Cartel.

  5. I apologize for the repost, but I caught up on the thread, and by the time I posted I had done it again - last post disorder!

    Larry - great posts.

    " What next, a 24/7 doomsday for metals on twitter so we can all be reminded of the risk associated with our pm investments? "

    Have that here now, no need! And bang on about not reading posts or comments. I love the questions, innocently asking Turd if he thinks silver might go back down to $8, when he has just said he thinks $36.75 is important to hold.

    And most importantly you bring up the question of what would you rather have your 'money' in? USD? Yen? Cattle? who knows - but obviously I think the risk associated with silver and gold is tolerable given the nightmare financial mess we are confronted with.

    mammoth - good advice.

  6. @ Jerry
    I have been using RBS warrants (Minilongs/shorts) very profitably for the past couple of months. These give me any leverage I like between x 1.5- x 10. Today I made a quick 6% between 36.66-36-96

    I am based in Sweden, but I am sure there must be an equivalent in the US (assuming you are from there). Hope this helps.

  7. Yes- WTI is a great addition - thanks.

  8. @Jerry...

    With all due respect, if you don't know what vehicles to use, you probably should only be paper trading for now while sitting tight on your long-term position.

  9. Gotta chit pile of cash stored up for the dip to 1370.....IF it hits there.....just a gift...otherwise my core is mostly in PSLV PHYS and few miners left. IF they dip it fine if they don't ....fine. No need to be greedy here....its a short term tweener call here.

  10. Crude is back up to 104.36.
    Lets see if it can reverse the metals.

  11. Dollar catches a temporary tailwind cause other currencies are tanking faster
    Money moves to those trades for a time
    AU and AG drift a bit
    More QE++ already working (just has different names now)
    No mainstream inflation scare yet.
    "Hey...market looks rock solid"
    they say
    It's all about perception right?
    Then the metal moonshot comes.
    it's not quite time yet

  12. Questions.

    Who here believes that holding any type of bullion ETF is the same as holding physical metal in your custody? Specifically, is anyone planning to hold onto any paper bullion ETF's long term (5 years+) or are you using it to track the metals price and trade?

    Of those people who hold the paper physical what is your exit strategy, specifically at what point do you exit your position and in what manner?

    And lastly and this one is for everyone. Do you believe the paper is tracking the underlying commodity or the underlying commodity is "tracking" the paper? Explain your answer.


  13. @Turd...I hope crude (or anything else, for that matter) will reverse the metals and keep them there!

  14. i see silver trying to go up now

  15. The Au/Ag price take down is hard to stomach even if you know it's coming. Oil is all over the place today. The broad market keeps going up like the radiation level in Japan.
    Massive and lengthy liquidity injections are like heroin in the system and the euphoria is followed by a crash with alot of irrational action inbetween.
    Not that I know from experience, because I don't. But the metaphor seems to fit.

  16. Yukon,

    Bought PSLV way back when in came out in the mid 10s but got rid of it because price action wasnt aggressive enough...no other bullion backed buys since

    Trade AGQ options monthly and sell out half after a double on the Casey free ride idea

    I believe the paper has not, but will eventually, track the commodity...although now that youre asking I cant say that I see a very good correlation at all between any paper vehicle, whether futures contract, ETF, miner, etc and the price + premium bullion dealers are charging.

    SLV may actually be the vehicle that tracks spot most closely, oddly enough, although I confess I never watch the SLV price closely

  17. Yukon.....it is not an either or.....neither tracks the other. Paper etfs were constructed as an instrument NOT to track the underlying bullion price but as an instrument ot manipulate or "control" the bullion price. They provide in some cases bullion to short and as a perfect de facto "fractional reserve" vehicle for the metal. When they completely decouple price it will come out of the sky blue....

  18. @yukon
    re:UMG - I thought i had read everything on the site, but I had missed the MDA. There is a reasonable amount of debt and obligation, maybe to the tune of $12-14m, but also with $9m in cash reserves and an otherwise profitable mining services company that now owns resources in a fairly good geography. Is there something I am missing?

    captchas keep getting better: nethrobt

  19. $37 is the new Maginot Line.

    Damn the time zones! Can't seem to wake up early enough to catch the dip on the West coast. Missed the last 2 by an hour.

    Oh well. Got my gun cocked and ready to fire at $36.50 for 150 silver buffalos.

  20. Vincent
    Here is some elder advice. You have made your case now stop harping. You may be wrong. But then again you may be right. But you have made your case. Let the others be make there own decisions.

  21. Turd,

    What WTI closing price would you like to see?

  22. btw, the new WTI widget only updates every 30 minutes. Does anyone know of a better one?

  23. @ Yukon

    Hopefully nobody uses physical ETF as their primary source of holding physical. I am not one for vehicles such as PSLV, because realistically it won't do much for me and I can get better returns elsewhere (theoretically). 5+ years is a lot, considering that systemic default looms on the horizon...

    I think that paper is a distraction. I am expecting that all stocks will be wiped out in the "final devastation," but by then I don't think we will be concerned about stocks. We must remember that the DTCC issues stocks, and from my brief reading on them... it should be understood that stocks are a form of derivatives and can easily "be lost" so to say in a system reboot.

    As for paper tracking underlying commodity? Yes and no. I wouldn't say tracking as that implies that it is more accurate than not. I would say that the paper price is trending towards the underlying commodities true underlying value. The true value of gold/silver should be a ratio between how much paper is out there to how much gold is out there. If the underlying asset's price was allowed to accurately reflect this, gold and silver would be way higher than they are right now, and that is where my eye is. I look at where they will be in the future and try to figure out their path to getting there. It is not if, but merely when.

    Perception is Reality...
    The key is to understanding which perceptions will be emerging next, so you can step in front of them....

    The underlying commodity is not tracking paper... that would imply there is no physical shortage (eventually)...

    And as a side note, personally I am going to exhaust all paper fiat from any "profits" by the end of 2012. I am very convinced the federal reserve note will be gone by the end of 2012... so use them while they still have power is my motto...

    Thanks for asking some fun questions :)


  24. I intend to hold onto PSLV for the foreseeable future (ten minutes?) - hopefully for a year ....? I think we are paper heavy because of the convenience. I think paper is tracking physical, if the question makes sense, in that I feel the silver I own is much more valuable than the spot 'price'. Not to get too philosophical about the meaning of value, but the price of silver, it seems to me, is the price + the premium you actually have to pay to get the stuff in your own palm. So silver is trading in our sense at around $38. I will sell PSLV when I get really nervous. Not there yet.

  25. @DarkPurpleHaze:

    I read all of the comments, and I especially like reading yours. You have a very prescient viewpoint and which seems to me, correctly founded as you reference the market driver, China.

    I am no metals expert, or mining expert, but I do like to read. I have ordered many books from Amazon, so I am getting up to speed.

    Here is just a simple thought:

    Are there any relative consequences to the FED's constant printing?

    If so, then SOMETHING has to be the store of value as opposed to worthless banker-paper FRN's. My simple view says that precious metals are that store of value, so I really don't care about short term. When the system fails, it fails. Meanwhile, I will have accumulated a lot of physical.

    On the other hand, if there are NO relative consequences to the constant FED printing (relative = as an American, so long as the dollar remains the legal tender, so what? other than incrementally less purchasing value over time), then holding PM's as a store of value long term seems to be the obvious response to the slow debasement of the dollar.

    China will dominate at some point, and they will call the shots. Seems obvious that PM's are the only decent store of value. (Farmland, oil, perishable commodities, yes, I like them all, but these are not near as easy to acquire and hold for long term).

    So, to me, all the short-term machinations really just provide entertainment and education.

    What say you?

  26. @ Yukon: interesting!

    #1: I can't store my RRSP (Canada' ~401k) bullions at home. Best alternative is to have it at RCM through Sprott. So yes, that ETF might be held long term.

    #2: Exit from silver to gold as SGR gets to 20 or so. Exit from gold as world financial markets rebuild on sound premises.

    #3: None of the above ! Remember Eric King's interview: RCM has to bid up in order to get its silver. Paper and physical are *already* somewhat disconnected. But this is an interesting question: In a regular market, one would think paper should track physical. But what if miners and industrials have contractual agreements tied to the paper market prices ? Then clearly, physical starts tracking paper. Then I guess both influence each other in a complex dynamical system.


  27. I like the charts at www.netdania.com which are very customizable. Worth a look perhaps? Thanks for letting us play in your basement with you, Turdmeister... All the best from upstate New York, Michael

    P.S. There's another Michael here; I'm not that one.

  28. Trader Dan from this morning:

    "...the March silver contract, which recently had been trading at a small premium to the May is now back to a discount of about a cent and a half. That pretty much means any fireworks related to the delivery process for the rest of March are over. These front month spreads have been extremely volatile but they have not moved in the direction that would indicate any short squeeze is forthcoming. Such an event would have been marked by a steady and continuous widening of any premium that March would have held over the May.

    Rollovers continue in the gold pit with traders' move into the June being accompanied by a further reduction in open interest as longs hesitate to push the market higher as the end of the quarter draws near.

    Both gold and silver are weakening as they head into the close of pit session trading. We'll see if they are able to garner any strength in the after market hours. The end of the month is currently is working against the bulls. It will be up to physical market buyers to keep a floor of buying support under the market until the speculators decide to return to the long side more aggressively."

  29. Turd,

    Use netdania.com for charts.


  30. Silver Is Way Undervalued Compared With Gold


  31. Let us not forget who the real culprits are before we get to hard on each other in the future:

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  32. California Lawyer - second you on the high quality of DarkPurple's prose and ideas. I also like your simplistic (in a good way) description of why precious metals are a good store of value - I concur.

  33. Yukon, I own lots of CEF and some GTU. The favorable tax treatment is the main reason. I foresee even worse tax treatment of bullion in the future, and these tax-advantaged vehicles will trade at even higher premiums as a result.

  34. I love reading the responses to the questions and I have one more question for everyone.

    If all of the paper precious metal ETF's shut down tomorrow and the Trusts of those ETF's gave their money back to the holders what would the effect on the underlying commodity be in your opinion?


  35. One more question, conversely if the metals market shut down tomorrow and the underlying commodity stopped trading what would the effect be on the paper ETF's?

    Interesting to think about. No?


  36. Yukon,


    Think of all that money devoted to paper that would move into bullion...even if only a small percantage did, still a nice price boost in physical

  37. Btw - I think it's very fun to listen to that right now:


  38. Let's not complain about price suppression too much.

    Yeah, it takes a dump on trading positions, but you shouldn't be all in on silver/gold anyway. Spread some money over other commodities, they can't keep them all down.

    Let's be honest, price suppression is giving all of us the buying opportunity of a lifetime. Gold at 1400, silver at 38 will be a joke in a few years.

  39. This comment has been removed by the author.

  40. 10 year T Bill is seeing a surge today. 3.50%

    One day soon, these yokels are going to lose control of all the markets they are manipulating.

  41. I know some folks here like Rob Kirby...

    Just found this article he published from yesterday and I think it's very good:


  42. gongratulations to those who bought the dip

  43. @Turd...fwiw,the overnight low in WTI was made at weekly trend support. If this market is going to continue in the weekly uptrend, it should push away from that level for the remainder of the week.

  44. Okay - I'll play.

    #1 - the etfs and pslvs shut down. Sell their silver and give out the money. At least we could finally see who had silver and who didn't. But other than that, I would expect an initial quick dip (pretending nothing happened external to cause this - too many variables) as investors question why, and then they should buy up all the silver the funds had through some other mechanism. So no change, just new vehicles would emerge and price would not be much affected.

    #2 - if the metals markets shut down tomorrow and the commodities couldn't trade (again just gold and silver for the sake of the argument) the price would skyrocket until the market found a stable way to operate again as the initial market failure would cause an immediate shortage.

  45. Turd,

    You may be able to embed the following chart, also updates fairly frequently:
    WTI Chart

    Tracking done this particular chart leads to this website that offers free charts.


  46. miner AEM looks pretty much near a bottom oversold on daily and weekly chart just fyi. is exk better still than aem?

  47. Jack said...

    10 year T Bill is seeing a surge today. 3.50%

    One day soon, these yokels are going to lose control of all the markets they are manipulating.

    Possibly because of the Reverse POMO over the last few days?


  48. Since this thread is about Crude... worth mentioning crude just touched $105


  49. my posts all deleted for some reason. Probably good anyway coming from such a simple guy.

    I am wary of any PM action following Wed. morning. B.S. Jobs report coming on Friday, they usually pad the report with a preview on Thursday that is wildly optimistic which leads to turd-thursday selling. Thurs. is to my mind not a good day of the week to be holding short term spec PMs. Just my opinion.

    any comments on the action into the Jobs Report. Best time to tradelong is usually into the lows on Friday morning. Several have also mentioned that seasonals in Gold are down for the second week in April into tax day, then up after that, the first week of April is possibly sideways. These days I am not using so much support and resistance since I think patterns during the week can overwhelm. Also much of the intraday stuff is just painted in my stupid opinion.

  50. Scott - that is what was wished for if I remember correctly. Good news, in the weird way we are having to think.

    Jack - I think that gov't debt is where it will first really escape.

  51. @Yukon
    From the way I understand it over at FOFOA, if the market crashes then the paper price of PM's will also crash. Then the markets go on holiday to rebalance.
    When they reopen, PM's will be ruled by the physical and not the paper. All other mkt levels should be relatively the same with the exception of PM's which will be enourmously higher on a relative basis.
    If you're trading and happen to be out at the time things shut down, you're gonna be soooo screwed.
    Unfortunately, nobody knows if or when that might be. GLTA

  52. Yukon,

    My take is that silver ETF are great for TRADING only. I trade SLV options to get the most out of the volativity of the silver market. They are no way the same as owning physical silver and someday they will lose all credibility because the market will decide they are not backed by real silver. However, in the meantime, they are a great vehicle.

    There are other ETF that I think would be good buy and hold investments, such as GAZ, MOO and HAP, but certainly no silver ETF.

    What I believe will happen, and is already happening to some degree, is the paper silver market and the physical market will decouple. The premiums on physical are escalating while the price of paper is stymied by the EE. If the paper price does not break to the upside pretty soon, the two markets will really decouple. When that happens, the paper market begins to lose credibility and investor appeal. At this point, I get fuzzy as to what happens. Any thoughts?

  53. out now of most of 'turnaround tuesday' dip stuff. The risk/reward setup was a good one but now it is not so good, we wait, we see, who knows? Also does anyone have a good vehicle for trading Oil besides USO? I like always to sell into its intraday highs if I can, its very hard to position trade but the USO does not move much . Thanks.

  54. GDX now starting its traditional afternoon swoon...

  55. mg2.
    "If you're trading and happen to be out at the time things shut down, you're gonna be soooo screwed."

    Are you saying that would be the mother of all dips? or am i missing something? If the paper market in PMs crash, would it even make sense to buy the dip in paper silver?

  56. @rthaler
    ever look into UCO?

  57. rthaler71, in case you missed my post at the bottom of the previous thread...To those who have seen their posts disappear here.

    This is what you do: Before posting your comment, just highlight what you wrote, right-click and pick 'Copy.

    That way, if your post inadvertently joins all the of the other random electrons flying about, instead of landing in the Turd-basket, you can past your comment into the window and try posting it again.



    rthaler71 wrote:
    My posts all deleted for some reason. Probably good anyway, coming from such a simple guy.

    March 29, 2011 11:14 AM

    OK, we have been over this issue several times, but, apparently, not everyone is getting the message. Hence, I shall say it again: the commenting software of BlogSpot.com is LOUSY and unreliable. It frequently deletes comments. Dunno why.

    The sooner that The Turd rolls out the new forum software, the better. This crap is ridiculous.

    -- Paul D. Bain

  59. Jimmy, fofoa is a quack. Makes no sense.

  60. Just checking some of my miners, and was wondering why Aurcana (AUNFF) has been down the last few days. Then I remembered to check the "FAIL TO DELIVER" charts. Amazing correlation.


  61. I happened to check Yahoo just now, and #5 on the "Trending Now" list: Gold prices.

  62. xtybacq & CA lawyer...thanks.
    I see it as (bad)entertainment and education for sure. A sick U.S. is a bad tragedy in the making.
    I'm learning alot as I go along and expand my thought process as to what the future changes will be, the next act of the scheme. If you read a lot and try to decipher and compile the main themes/trends from the news that is actually relevant, you start to form a future looking probability based on primitive human responses to fear or uncertainty. My take on why war and conflict go hand in hand with economic downturns, we get a little primitive.
    People are really worried about their future. Thats not a good place to be at when most countries seem to be thinking self preservation on alot of different levels. Not good.

    This whole period is part of the psychological transition to believing in PM's as a proxy currency and then a virtual electrionic or plastic backed international currency that is PM backed or at least the premise is that it is PM backed.
    China is actually encouraging it's 1 billion plus population to buy PM's as a way (IMHO)to rapidly bring their poor and mostly rural population into some type of of eventual and quicker wealth effect.
    PM's amomng the populace seems way easier (and faster) then providing them hundreds of millions of new jobs that don't exist yet and may not for sometime.
    Instantly wealthier Chinese lets them consume their own fairly cheaply made items or cheaper exports (U.S) and their economy starts to take off from there.
    A chinese consumer driven economy will start from there because of encouraging their citizens to owm PM's.(what a concept)
    It's inevitable and China can make it happen if they are the first major central bank to do so. Thats what I see.

    Yukon...if the COMEX implodes I think all paper becomes worthless quicker then anyone could possibly click there mouse over a "sell" instruction in their accounts.
    For how long they would be worthless an untradeable is beyond my imagination and more then what I would like to consider.
    In the short term the Physical PM's might get hammered into the ground based on shock value alone and the perceived speculative aspect to all of it. People will question what PM's are or were actually worth. I think we will start to question just about everything at that point.
    But I think eventually soon thereafter the phys. PM's would have to rise as the shock wears off and a recognition of what just happened and what's of real value starts to take hold.
    It won't be pretty or feel good is what I see. (And I'm agreeing with Larry on what the bigger issues will be if a complete monetary meltdown or attempted confiscation were proposed. Security, food and gas will be where it's at.)

    Think about the stark differences between the Chinese mentality vs. our U.S. Govt's attitude regarding the importance of PM's in the lives of their citizens or even the necessiity of it all.
    One of them is spot on because they truthfully (China? Who would have thought) are signaling to their citizens whats ahead. They have a plan.
    The U.S. avoids the subject of PM importance every chance they get.
    Someone is going to be very right and we all know the other will be very wrong. What countries citizens will benefit and whose will be hurt due to a lack of foresight and truth, and planning spanning decades?
    The answer is kind of sickening if you allow yourself to consider and believe the probability of it.

  63. paul... blogspot does NOT delete anything. It goes into the SPAM box, Turd has to hit "not spam" under comments in the dashboard, so the post comes here..also get rid of the word verification it's useless.


    rthaler71 wrote:
    My posts all deleted for some reason. Probably good anyway, coming from such a simple guy.

    March 29, 2011 11:14 AM

    Mammoth replied:
    rthaler71, in case you missed my post at the bottom of the previous thread...To those who have seen their posts disappear here.

    This is what you do: Before posting your comment, just highlight what you wrote, right-click, and pick "Copy."

    That way, if your post inadvertently joins all the of the other random electrons flying about, instead of landing in the Turd-basket, you can past your comment into the window and try posting it again.


    March 29, 2011 11:33 AM

    Mammoth, I think that your approach is a good one, but I have a better one. I write my comment in a word processor on my computer, SAVE THE COMMENT to my hard disk drive, and then copy-&-paste it into the comment box in my web browser, where I can upload it to BlogSpot.com. In this way, I maintain a record of all my comments hereon.

    Another advantage of this approach is that I can use an HTML template for my comments. In this way, I can include and highlight the comment that I am replying to, which makes it easier for the reader to follow the thread of a discussion. This approach works well for me.

    Furthermore, that's a feature that the new forum software must include, Turd: an easy way to follow threads of discussion (ToD's) and IGNORE those ToD's that do not interest the reader.

    -- Paul D. Bain

  65. DarkPurpleHaze, When you refer to "paper silver", are you refering to futures and options, or is "spot" still considered "paper"? The reason i'm asking is i use a forex broker, and a "AG spot vs USD" is in there as an investment option.

    Spot will take a hit, sure, but when the shit hits the fan, how will spot compare to futures for example?

  66. I look forward to the new site, but I hope we can maintain some sort of daily chat as well as threaded comments,

    DPH - it is sickening, and you are right about people getting primitive when they are wanting. And we live tight-packed in cities. Horrible to imagine cities going primitive.

  67. "Pick52 said...
    I know some folks here like Rob Kirby...

    Just found this article he published from yesterday and I think it's very good:


    Kirby is one of the best, along with the likes of Adrian Douglas and James Dines.

  68. @ Markus

    That article sums up a lot of what I believe and have been trying to say, thanks for the contribution, well stated and concise.

  69. @xty,
    I sense anxiety?
    There a very strong likelihood that although there may be a quick drop in the dollar, euro or both. Every country on earth wants a slow controlled decline to 46. Your see other countries drop there rates or buy treasuries with worthless fiat. Even if panic strikes, there is not enough physical for all and it won't be that easy to trade out and get the right price. some paper like PSLV is a reasonable choice to own. you can get out of exactly the right amount you need at the time you need it and everyone knows it's back correctly.
    So breath, GOD is omnipresent. Nothing is going to happen that HE doesn't allow. No surprises. Peace

  70. SilverRunNW,

    I have Aurcana also; so that means it is being naked shorted correct?

  71. Forgive me because I really don't know much about charting, but going back to March 24th on the 1-hr chart, could we consider a reverse head and shoulders to be forming?

    I can't determine what the neckline would be

    Thank you guys

  72. STAND FOR DELIVERY rolled over to May. Check it out:

    "On May 29th, 2011 we will STAND FOR DELIVERY"

    3 million ounces.

    I used to say March, now it says May.

  73. max said...
    Jimmy, fofoa is a quack. Makes no sense.

    FOFOA is not easy reading but if you read enough you will learn that he has a deep understanding of Gold.
    Since 'taking the red pill' 5 years ago, I have learned more about Golds real function from his writing and that of Another and FOA than from any other source.

    Makes no sense to you perhaps ?


  74. I= It
    It used to say March, now it says May.

  75. Haha, this is why I love this board. It's like Markus was reading my mind. So think about the questions I asked then read that article and tell me why anyone wouldn't have a vast percentage of their holdings in honest to God, in your hands, you sleep with it under your pillow every night, physical metal.

    I think we're all operating on the same knowledge and belief here, but sometimes I here folks say that SLV, GLD, PHYS or PSLV is the same as physical in your custody.


    Physical is physical. Period. Hope everyone here has there's (and is adding more). =)


  76. @ max:
    you are wrong about FOFOA-actually he makes a lot of sense. Ypou need to spend a good amount of time reading his stuff to get a handle on it.
    you may not like what he says about silver-but guess what Santa says pretty much the same thing.
    We don't know how silver will play out if the money dies.
    In the meantime it sure has a lot going for it.
    I take my silver profits and buy gold.

  77. If Trader Dan is correct and the hedge funds are unwinding their gold/gold miner ratios to close out their quarterly books, then dammit, we should see the HUI spiking. But it ain't. Trader Dan knows his shit. I'm going to trade the hell out of the last 30 minutes. Starting with SLW.

    We could see a nice pop at the close.


  78. @DarkPurpleHaze:

    You said:

    "This whole period is part of the psychological transition to believing in PM's as a proxy currency and then a virtual electrionic or plastic backed international currency that is PM backed or at least the premise is that it is PM backed."

    Damn right, spot on.

    That is something I have been watching and noticing occurring incrementally ever since I was told at a young age to "beware the mark of the beast." (1970's from my zealous Christian grandmother). This is the Christian reference to the end of times mentioned in the Book of Revelation.

    Putting Biblical references aside, as I tend to intellectually view things now that I am older, here in California, it is readily apparent that the populace is bein-and has been now for quite some time--conditioned to use a plastic card to purchase things. Every grocery store, small mom and pop, gas station, even the lowly fast food joint, allows and encourages customers to just swipe the card instead of digging into their pockets for cash. No one writes a check anymore. Welfare recipients now get "SNAP" [supplemental nutrition assistance program] cards and "WIC" [women, infants, children] cards, which can be used at convenience stores like 7-11. There are no longer paper welfare stamps, or checks. All govt payments to the welfare recipients are by electronic means. Is that not frightening?

    As I see it, FRN's are almost useless to the average consumer. Almost no one uses actual cash to make bigger purchases anyway. ATM's don't give out enough paper, and no one walks around with that kind of moneyamount of paper banker notes in their wallets anyway.

    So, when TSHTF, I see it as being no big deal to the average US consumer who is told by the government to promptly exchange their old FRN's for a magic plastic card which will be tracked to their own unique biometric signature. The feds could very easily outlaw the use of FRN's or anything else for legal tender.

    There will still be a black/gray market, however.

    So, when it happens, here in the USA, the populace will just meekly accept their fate.

    In China and around the world, though, the plastic US transaction cards will not be recognized.

    Actual silver and gold will therefore be extremely valuable.

  79. Guy Fawkes said...
    I have Aurcana also; so that means it is being naked shorted correct?

    Yes, that's what it means. Dirty scoundrels. This link is also decent, though it can be slow:

  80. a lot of people are taking a wait-and-see attitude until we get into April. I know that I'm waiting for a strong indicator in either direction before my next physical buy.

    My answer to an earlier question about prices, I believe at this point that the metal price is following the artificially low paper price. In the real world people are willing to pay high premiums to hold small amounts of physical metal.

  81. Jimmy....not trying to startle anyone by what I said. Just mentioning what I think could happen in a prolonged moment of turmoil and fear.
    I think the paper market could melt to almost nothing in a cannibalistic algo way.
    I think the spot price of phys Ag/Au etc. will follow but not nearly as low.(50% ?)
    Just a huge negative reaction but not for long.
    This is just a guess on my part how the initial reality of what might happen and the fear and betrayal we will feel and the lack of a plan by our Gov. that will NOT be beneficial to the average consumer. I don't see anything positive happening for the average person who has paper out there when it does or if it happen. Holders of phys. PM's will feel safer but will
    still be super concerned/scared/mad etc.
    It will get really nuts unless a conversion to a PM based currency (domestic or IMF like) happens ahead of a comex default. Doesn't seem like a plan is in place except to try and keep papering over the entire scheme. Our Gov. downplays the importance of PM's as viable or needed for the average citizen.
    Bankers love to write paper contracts and I think their main priority is not to get stuck with it in the very end when they see the paper peeling off the walls.

  82. Further to Yukon's questions, my understanding of what will happen when the paper market finally decouples from the real thing ?

    Any price drop in physical at that time, will be our last and possibly best chance to buy before it goes to 'no bid' as there will be no gold for sale until a new gold backed currency is launched.

    Suspect there will be weak hands at that time and am confident there will always be buyers.

    My instinct is that it could be a trigger to bring down all paper, which is why its so important to the EE to keep PM paper prices suppressed.

    Be careful what you wish for, as this will not be an easy transition for most of us.


  83. SilverRunNW,

    So what happens to the buyer of those shares that are never delivered?

  84. Do I completely misunderstand funds or are PSLV, PHY, SVZRF, GTU etc. absolutely NOT ETFs (Exchange Traded Funds?) Aren't they Closed End Funds (CEFs)? As such I would say that I hold no ETFs and I hold a LOT of CEFs and consider them perfectly safe for long term investing while I do not consider the ETFs safe.

    If I'm wrong would someone correct me please?


  85. Turd,

    Can you do a post about your profit booking strategy?

  86. Chap72 CHUCK

    Where does CEF and GTU figure in all this? More like Sprott, with lower premiums, wouldn't you say?

    I have physical of both g and s, but want to diversify out of the U.S., holding for awhile. GTU's premium has been pretty low, but it seems pretty illiquid...

  87. Lord Koos said...
    "In the real world people are willing to pay high premiums to hold small amounts of physical metal."
    To confirm your comment, on the local Craigslist there is a listing from someone wanting to buy American Silver Eagles, and is offering Spot + $2.99 for them.

  88. I think the Market in PMs will go both up and down. But since I can't say when either will occur, I buy weakness and sell into strength. 50-70% of a move is better than none and I am no hero nor am I a genius. We only have about 2 dozen mitigating factors day to day in the price of commodities. Whosoever can call that on a consistent basis, he is Alexander the Great and I bow before him in utter humility.

  89. Guy Fawkes,

    I wish I knew what happens with the FTD shares, but smarter folks have been researching NAKED SHORT SELLING for years. I found a good podcast with Dr. Patrick Burns of Overstock.com (starts at minute 3:30) at http://tragedyandhope.com/

    Episode 005 OVERSTOCKED: (Interview with Patrick Burns) Link

    It's 2.5 hours long, but very informative. I have not (yet) listened to the other podcasts, but episode 5 is very good. You can skip the first 3 1/2 minutes.

  90. California Lawyer: I agree with you on the seamless integration of plastic into our economic fabric. I was very surprised when I first heard of SNAP (less than a year ago) and thought it was a good thing for those on food stamps because it removes some of the stigma from purchasing in public. Then I realized it is quite an effective ruse to hide the very LARGE numbers of people who are now forced to be slaves to the Government tit (many through no fault of their own). There just aren't a lot of meaningful jobs. I know. I've been searching for 2 years now. I'm not on welfare though... unless you include my meager Navy retirement.

    Go to a Wallmart around midnight on the night the cards are "refilled" and you'll see what I mean.

    I was also raised on paranoia courtesy of the LDS (We're in the Latter Days children!) and grew up dreading the apocalypse but at least they are right about food storage in my opinion. But the church was always more of a social than a spiritual thing for me, I found God more often in the mountains than in a building.

    If I put my tin-foil hat on I can see even plastic being replaced by an RFID implant or the mark of the beast being something like a QR code tattoo.

    Those waiting for the rapture and thinking they will be whisked away to a land of rainbows and gumdrops are going to be disappointed I believe.

    Gold, Guns and Grub will save yer ass.

  91. Wandee, I agree. We cannot say in the end where Silver will be. I feel safer in Gold bullion but I feel that Silver is quite uncertain. It could spike to over 100 and then crash to 40 just as the Sheeple pile in. But with revaluation I do not feel finally that this will happen to Gold. Gold will be bought from fear and not from greed and the Central Governments want it. I give credit to Stewart Thompson for this insight and I suspect it harmonizes with Jim Sinclair. But who knows? I just think the Max Keiser crowd that divines Silver to 500 are in for alot of surprises. First off, they will never crash JPMorgan. And secondly the 500 number reminds me quite distinctly of the same language used back in 00' when tech prices were bandied about.

  92. No pop at the close. Bought and flipped a thousand SLW for a pittance of a profit.

    So, why aren't the miners getting a bid as the hedgies unwind their spreads? I don't get it. Looks like we are trading in a tight range until we break out or swoon.

    Tough to make a buck off it.


  93. And the good news!
    "The radioactive core in a reactor at the crippled Fukushima nuclear power plant appears to have melted through the bottom of its containment vessel and on to a concrete floor, experts say, raising fears of a major release of radiation at the site."


    Somehow this will be bullish for the market, just like this mornings reports. I'm sure someone will figure out how to state this is a new "renewable energy source" in Japan. BTFD

  94. @Jimmy who said;
    "Are you saying that would be the mother of all dips? or am i missing something? If the paper market in PMs crash, would it even make sense to buy the dip in paper silver?"

    Would that be the big MOAD's? In a way, yeah I guess. That would be the big decoupling of physical from paper no?
    I would only buy that MOAD's with a cash position in paper if you could. Otherwise buy physical for cash if you could find it.
    Imagine such a scenario if you will, there would be huge paper losses in all mkts. and margin calls to go with it. So it might
    maybe be possible to buy a paper MOAD in such a drastic move but next to impossible to buy a physical MOAD during or while mkts settle out.

    Other than PM stocks, not sure what papare metals would do since they would no longer influence physical. Would they even still be around or would they be destroyed by default?
    Not sure so am not sure if papare silver (or metals) would make any sense. PM stocks would though.
    Of course if you hold a paid for in full position in PM stocks or physical then you could hold on through it all.
    Best bet, no margin - no derivative. Prices would be balanced at a higher plateau with little movement if any.

    You're right. Who knows how long things would be shut down during a rebalance/reset.

  95. Silver Run

    please explain what "FAILS TO DELIVER" chart delivers to you when you input the stock ... thanks