Well, THAT Was Interesting
What a day, huh? First we saw some May silver call-sellers get squeezed. Then, the FOMC statement caused a sharp selloff. Unfortunately for The Cartel, no waterfall ensued as price quickly rebounded. We now look to be on the verge of a rally. Let's get started!
I know that many folks come here only to read my blogs or to visit Pailin's Corner. In doing so, many miss out on the terrific information that is shared in the comments. Rather than re-type my thoughts from earlier, here are some C&Ps of my comments from the previous thread:
Submitted by Turd Ferguson on April 25, 2012 - 10:46am.
If anyone is willing to gamble in the casino, now would be the time. This reeks of a screwing of put sellers ahead of option expiry. The final beatdown before the reversal.
Submitted by Turd Ferguson on April 25, 2012 - 11:17am.
The summer is going to be hot and explosive, though, so anyone gambling should be sure to buy time, too.
Maybe (buy) the Oct or Dec (silver) $40s?
All I know is that today's action is bullshit. May call sellers have been forced to hedge by shorting futures. Just like the action we saw in late March prior to April gold option expiry. Recall that after dropping to 1630, price rallied sharply back toward 1700. Same shit here.
I expect silver back to 32 or even 33 relatively quickly, The Bernank notwithstanding.
Submitted by Turd Ferguson on April 25, 2012 - 11:21am.
A drop to 30 or just below is possible but I firmly believe that that is it.
Physical demand is very strong and there are literally tonnes waiting and hoping to be filled at $30.
EVERYTHING points to a bottom here. Longterm holders WILL NOT be disappointed.
Submitted by Turd Ferguson on April 25, 2012 - 11:48am.
And most should NOT (be trading).
However, this action reminds me of the day in early November 2010 when QE2 was announced. A beatdown headfake occurred that day prior to the announcement.
Again, if you are willing to risk a loss in the casino, this looks like an excellent opportunity to give it a whirl.
Obviously, I believe today's low was the bottom. Maybe there will be a retest but $30 silver is going to be a very difficult barrier for the permabears to break. I would still be looking to put on a speculative position here with money you are fully content to lose if you are wrong or if it is stolen from you. That said, if you absolutely feel compelled to trade in the casino, this would be a good time to give it a try.
Gold is basing above what appears to be solid support between 1625 and 1635. As our pal, Winston, pointed out earlier today, physical demand is so strong and consistent here that further, sustained drops in paper price are highly unlikely. Gold will show signs of life when it trades back above 1650 and then 1660. Let's go into more detail and begin to get excited then. For now, let's just be happy to be building such a strong base from which we can, eventually, catapult forward.
Clearly, I'm excited about silver here, too. $30 silver completes the right shoulder of our massive, reverse H&S formation and Winston has informed us about incredible demand for physical silver at that level. I am nearly 100% certain that silver won't fall again much below today's lows. As it bases here, it is preparing for Battle Royale II. Of course you remember Battle Royale I at $36 in late February and the ensuing crush. Well, Battle Royale II now lies near our old nemesis of $33. What will happen next time? I can't say for sure but I'm quite certain we won't have to wait too long to find out.
Just a quick word about open interest and the next CoT. Today's OI (basis yesterday) came in at a new low of 395,389 in gold and 122,325 in silver. Recall that yesterday, price rose by about $10 so what we clearly saw was short-covering ahead of The Bernank. No doubt many of those same shorts were put back on this morning and are now, once again, waiting to be covered. While silver rose 22c yesterday, OI fell by about 400. Clearly this was a short-covering bump, too. Please allow me to emphasize this again:
Since March 15, paper silver has fallen in price by over almost $2 yet total Comex open interest has expanded by almost 15%. There is no question in my mind that this is the result of short contracts being added. Just as the EE fleeced the over-excited longs in February, they will soon fleece the over-indulgent shorts. Just be patient.
For the CoT reporting week, gold fell about $9 while shedding 3200 in OI. Silver fell $1.22 while adding about 1000 contracts. Here's why both are ultimately positive: Gold liquidity has been wrung out and now sits patiently in the sideline, waiting to return as the charts improve. The much smaller silver market has swung from speculative long excess in late Feb to speculative short excess in late April. The EE, playing both sides of the specs for profit, will soon close the trap on the foolish spec shorts.
Finally, this short video about government debt. Not much new here for the average Turdite but, since it's presented in such a brief and simple manner, perhaps you can C&P the url and email it to your friends.
That's all folks. Watch the overnight trade for signals of sovereign and big-money buying of physical post-Bernank. A positive London trade post 3:00 am would be a strong signal. TF
p.s. Tomorrow, April 26, is Israeli Independence Day. Be cautious and on the lookout for some crazy headlines.
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Comments
Historical Money
Historically, gold couldn't be used as a common medium of exchange because there wasn't enough of it. At its value, the amount needed for a typical purchase would be far too small to carry around. Silver and copper were useful since they also acted as a smaller store of value, to fill the void. Once fiat dies, physical coins won't necessary for purchases like they were before. In a digital medium of exchange, gold is divisible into small fractions so other physical mediums aren't necessary.
Silver is valuable/undervalued anyway without being used as money. I'm not discouraging silver (I've got a bunch of it), just that silver derives its value as a commodity, not as a currency. So, in the statement earlier, the constant supply of gold makes gold valuable (as money), while the diminishing supply of silver makes silver valuable (as a commodity). Gold would be less valuable (as money) if the total above ground supply were less constant and were dependent on mining.
to abreik
In fact, silver has been money for longer than gold.
If you don't know yet that silver is money, than you don't understand a thing.
Silver is REAL money.
@HardRain
Just curious if you are buying that quantity why go to APMEX when Tulving is so much cheaper?
Israel army chief says Iran
Israel army chief says Iran not building nuclear bomb
Israel's military chief said he does not believe Iran will decide to produce an atom bomb, describing its leadership as "very rational" in an interview published on Wednesday.
http://www.telegraph.co.uk/news/worldnews/middleeast/iran/9225641/Israel...
Abreik your theory assumes
Abreik your theory assumes that people don't mind having all of their transactions monitored by TPTB. Au contraire, there will always be a use for hard, private, no counterparty money and silver fits the bill.
Breakpoints
GOLD:
Breakdown at or below $1,650.00 Breakout at or above $1,710.00
SILVER:
Breakdown at or below $31.09 Breakout #1 $33.10 Breakout #2 $34.50
The TA and market action still bear out the above parameters. Its interesting to note that the second silver breakout point, is right at the neckline of the massive head & shoulders pattern that has been building in the long term. But firstly the the initial breakout hurdle must be realized before we can get excited.
Gold is fairly straight forward, with two consecutive days of trading above the breakout point and holding that level over a weekend. For what its worth - just MHO.
@ouchtouch
I have always bought from Apmex and sometimes Gainsville. Convenience, I guess. I never considered Tulving before, but I will look them up.
Thanks for the suggestion.
Rain
Fiat Options
I work and get paid in greenbacks. Now, what do I do with those greenbacks? Well, I pay for the things I need such as rent, food, clothes, medical, and even taxes. There is occasionally a little bit left over, so the question is what to do with it. I can just hang on to it and watch it get smaller by the minute. I can take a risk in the stock and/or bond market and get fleeced by some 25 year old whiz kid on Wall Street. I can put it in a bank and get fleeced when the banker spends it on a kilo of coke. I can start my own business with it and get fleeced by the taxing and licensing authorities or the regulators. Or, I can buy a small piece of metal that I can carry around in my pocket until it drops through the hole where it wore through. The point is, regardless of what I do, risk is involved.
Now Obama seems to think that if I was able to pay for all my needs, I didn't need the money I had left over in the first place so I should just give it to him. In his view, this option has no risk attached as far as I am concerned. So now I've got to come up with some plan that demonstrates that I did not actually have any money left over after providing for myself after all.
So come on Victor or anyone else. I'm buying metal as fast as I can to replace all that that keeps falling through the hole in my pocket and into the bay. Only thing I know to do.
Victor & Maradona & kliguy38 & Xty
http://victorthecleaner.wordpress.com/
I think Victor is trying to rid the inter tubes of the shysters & spruikers attracted to silver & gold, and all their nonsense, in an attempt to restore credibility to a serious analysis and appreciation of gold. He has a lot to offer and I always appreciate his comments, especially getting down and dirty with Turd's crew.
I think Xty has the right idea, engage and educate. In his own way it is what Victor is doing. The hive-mind in Turdville works.
College/career path discussion
Although I just joined yesterday during the cheese discussion, I nearly joined and chimed in the other night when the 20-something was debating whether to go $50k into debt for a "green" Master's Degree. I could post my Blessed career path if anyone thinks it could be useful and won't take the blog too off topic...don't want to get bonked on the head by the mods on my second day, so I'm asking permission!
@JY896
I posted a link to one of the jobs I am hiring for currently at the Turdland Jobs Forum.
Thanks for the suggestion.
Rain
Do it! Stacker
Its kinda slow tonight. Welcome!
FOMC Bernanke always WRONG
FOMC - You can always bet against anything Bernanke says because he's either a idiot or a downright liar.
$3.6 Trillion spent on budget minus
$2 Trillion collected in taxes
= $1.6 Trillion DEFICIT
We can attempt to make the 1.6 T deficit ends meet if:
1) fire a lot of Federal workers and cut entitlements
2) raise taxes in a big way during election year
3) PRINT - Bernanke will purchase the bonds himself again
4) China can buy our treasuries (buy our debt) - highly unlikely after the recent BRICS summit agenda to ditch the dollar
Silver is money in Utah - other states are also pushing similar legislation
video posted earlier
Re: Dracula It as this posted
"I don't know what to say more than this guy says."
Well one could say that balancing the budget does NOT matter if you own the printing press.
This guy ignores the fact that the Trashury/FEDR can sell and buy their own debt by simply printing more money.
It just generates more interest which can also be sold/bought.
Note to Retired Accountant:
This is NOT about balancing your household budget.
Get a clue.
Hey Eric -
I closed out the last thread with a limerick for you.
I didn't think it was appropriate here, as there are women still present.
more cheese
Pining 4 The Fjord's recommend yesterday was a good one.
I tried the Cabot Classic Vermont X-sharp 1 lb. brick tonight. Yum!
The cheese conversation is still alive and 'aging' as it continues. Cheese will never replace bacon or maybe not even ham, but I think cheese might be around for awhile.
Try the Cabot cheese. It's wrapped in a DarkPurple tight wax coating and looks like a stackable object and it's tasty.
You know what? That's a good idea...
i challenge all here in Turdville to pay a visit to Victor's blog..........spend 15 minutes reading his insights, and then come back here and tell me it jives with what the majority here believes about gold, the markets and our future......give it a shot. See how it works out...... http://victorthecleaner.wordpress.com/
one path...
Encouraged by dyna mo hum, he begins his dissertation:
-Even though TPTB are trying to destroy it, I still maintain that health care, specifically elder care, is the place to be the next 20 years. Hard to argue with the demographic imperative of all the Boomers needing care. Hip, knee and shoulder replacements alone to keep them on the golf course should sustain lots of jobs.
-How it worked for me was, I self-financed (through working ha-ha) my first degree as a Physical Therapist Assistant. This is a Community-College, technician kind of role. You rehab the Boomer with the hip, knee, or shoulder replacement. If you or your kid is more of an arm man than a leg man, there's a degree called COTA that works with the upper body. Other options would be x-ray tech, ultrasound tech, lithotripsy operator, all of them 2-year or less degrees.
-My second or third job, somebody noticed I liked to gab and could be persuasive, so next thing I knew I was working in a nursing home as sales and marketing guy. It was a "management job" so that went on the resume and I got to live in Southern California for three great years. (Another positive of health care-go where you wanna go: many PTA/COTA's are travellers who take 13 week assignments with pay, housing stipend, etc.)
-Most hospitals and larger health-care employers offer good benefits including tuition reimbursement, so I sacrificed and moved from SoCal to South Bend Indiana of all places (hospital paid for move BTW) and entered a "degree completion program" for Health Systems Management.
-Got the degree in 15 months (BS-HSM) with all but $8k financed/reimbursed by employer. No $50k student loans for me! Graduated and moved to Albuquerque the next month (another employer-paid move) and parlayed my previous mgmt experience/PTA work into therapy manager in nursing homes.
-Got noticed doing that and next thing I knew was promoted to Administrator (the lead guy) of the whole freakin' nursing home in 2008.
-Now in Texas doing same. Paid to do what I "mostly" love. Old people are an absolute hoot. And there are lots of them needing people to provide their care.
Granted, YMMV, and yes, I'm in my 21st year in the industry. And yes, the industry does have occasional contractions, but in 21 years I was unemployed by choice for an aggregate of about 3 days. Some of it is luck, keeping one's nose clean, and hard work. But if I had a high-schooler, and didn't want them to incur numbing student loan debt for a degree that may or may not improve their employability, I'd still steer them towards health care. Even with Obamacare hanging over the industry.
PS: I didn't even say anything about nursing. If you can handle the poo and the pee and the fluids, why not! LPN/LVN is usually a 1-year program and I start my new grads at between $18-$20/hr. They too can get travel job assignments if that floats their boat. There is a nursing position called "MDS Coordinator" that sits behind a computer and does billing/minimal patient contact, and way more jobs than qualified applicants for a position that pays $40-$50k and is inside air conditioning all day....but I digrees.
@Victor
I guess thousands of years of history don't count, nor do changes in that status quo that should cause an increase in the price of silver relative to gold.
Why do your criticisms always seem so ad hoc and desperate?
It hurts, but pain is good for me
This past year, stacking silver has been like a toothache that never goes away.
A couple of weeks ago, we sold enough ounces to pay the taxes on the stash we bought after tax time last year with the sale of all the liquid employee shares. Thanks to the Silver Coaster, the 2011 buy vs. the 2012 sell price was a wash.
I was really excited to see the coaster head up the slope last spring from $32 when we bought lots, up past $44 in just a few weeks. Oh boy, oh boy. Suddenly, the coaster track ahead disappears as we drop down to $26 before I can catch my stomach.
A sudden lurch and we're almost back up to $36 just before the Halloween high holidays. But wait, now it's Christmas and we're back down to $26. By now, I'm puking over the railing. Apologies to the people behind me.
Yee-haw, there's another smaller hill up ahead, as we reach above $37 at the end of "The Winter That Wasn't."
The best rides start out with a really big hill, followed by a really big dip, followed by successively smaller hills and dips. And now, it looks like maybe the Silver Coaster has reached the flat part of the ride. I see a sign at the station up ahead flashing the number 30 - 30 - 30.
I've lost my lunch, soiled all my inner and outer garments and haven't another loose penny to invest. I guess I'd better stay on this ride for another trip around.
I just hope somebody can toss me a dry towel as the Silver Coaster rumbles past the stop.
It's just lucky we don't have to live off the earnings quite yet!
This website teaches me so much (about cheese)!
Ok, I think some of us here may just be conservatives. Perhaps some follow the comic strip called Hope n Change. The guy who writes it is named Stilton Jarlsberg.
I was scrolling through comments today and realized ( a light bulb went on):
"Hey , is that his real name, or is that just two types of cheese being used as a pseudonym?"
I NEED SOME HELP.....
I NEED SOME HELP ON A SILVER MINE
In the beginning of April, I was discussing that Silver Wheaton had a silver reserve decrease due to INCREASED COSTS at Goldcrops Penasquito mine. Someone else mentioned another silver mine in Mexico or South America was either canceled or abandoned due to HIGH COSTS. Can anyone tell me what the name of silver producer and the mine.
Thanks a bunch.
Anyone thinking of buying a scooter
be sure to get a Yamaha, Honda or some other brand name. If you break something on one of the Chinese or Korean models there are no parts and it goes to the dump. Oh, but what about parts bikes you say? Forget it. The same parts break on all of them. Yamaha Zuma is a good bike. Mine has lived out in the salt air in Florida uncovered and no garage for five years with little maintenance and still runs and looks good. Had to replace the battery once and the front brake this year. That's it. Two of us go 38/40 on it. You arn't going on the expressway anyway. Top end does not matter as much as "get up and go" so you can enter traffic quickly and get out of someones way. Zuma has dual brakes. 35 mph to zero in about 10 feet. Try that on a Harley!
Actual, on-topic post from new guy:HL
Total face palm today when I got my proxy vote from from Hecla. Their annual shareholder meeting is being held at a freaking Elks Lodge??!! Can't they even afford the Couer D'Lene Comfort Inn conference room? Why did I buy this stock?
I suggest you study Victor's
I suggest you study Victor's comments rather than bashing them. The Spaniards managed to crash the silver price in the 16th century by mining too much of it (and they did it without BP, Exxon, cell phones, MACs or the intrawebs). They didn't crash the price of gold. Ask yourselves why that is. The answer is also related to why the silver price crashed during the great depression and why Mercury dimes weren't struck in gold.
Before you start throwing punches know that there isn't a more serious gold bug then PA. And I also think $30 silver is ridiculously cheap.
On a side note; isn't it comical that in our current bust the M2 money supply grows while its velocity falls?- No shit Sherlock, the former begets the latter. You know, I find if I drink too many beers and eat too much prime rib my toilet won't flush either [hyperinflation off]).
AAPL & PMs
You say tomato, I say tomahto.
Time for some tunes...
I'm not bashing him......
i'm simply pointing out that Victor is elusive, almost slippery.....like the Muhammed Ali of blogging. He slips into Turdville in the dark of night, when sentiment is low, or a turning point is at hand, almost always post contrarian views (usually framed up in a non-combative way so as not to draw a crowd) and then slips back into darkness..... and ofcourse there's that part on his blog where he explains how all gold standards are flawed (not the manipulators or debt creating politicians of history).........i don't know, maybe i'm wrong.......but the bullshit meter is pegged.
Victor blogs like a butterfly and infers like a bee......
@Kingboo . . okay. I checked out his site. Ehh.
I read his piece saying that the U.S. can't eventually convert to a gold backed currency because of the existence of the Euro. That struck me as a curious argument and at first it was simply asserted as an obvious fact though it's far from it. Then, further down, he argues that it can't happen because the existence of the euro will force a gold backed dollar to be backed at the fair market price of gold. Ehh. Okay, but why is that such a problem? I don't think he explains. Rickards seems to take it for granted that the U.S. will have to have conversion at such a figure.
But, worse, I think Victor shows a blind spot. Despite how insanely verbose each piece at his site is, the one about the possibility of backing the dollar with gold seems to ignore the yuan/renminbi. I don't think he paid any attention to it in that piece (the second article from the top at his site) and yet the chinese currency is obviously going to be a very significant one. And, on top of that, there's a LOT of talk that the goal of the chinese is to eventually have at least partial gold backing of the yuan/renminbi. So, this bipolar focus, hey what about the euro, what about the euro, you can't do that because of the euro, might be missing a huge part of the story.
If the yuan/renminbi is offered with gold backing, won't this tend to force other currencies wanting to have similar status to also have gold backing? Even if everything that Victor says is right, let's concede that for the sake of argument, there may be another variable to account for which he doesn't seem to have, the yuan/renminbi.
TexasStacker
Healthcare is definitely a choice. My daughter graduated from Univ. of Rochester in 2010 with a BA in Biology, basically Pre-med. Great GPA, but not enough connections to get in to a Med school. She was working at the hospital in Rochester as a nurses aide for play money. Cost me $200,000!! No real work opportunities. Moved back home. Works in 2 area hospitals as a N.A. still but is in a local Community college to get her nursing degree with hopes of going all the way to Nurse Practitioner. You wouldn't believe how hard it is to get into a nursing program these days. Even with great grades from a very respectable university.