That seems to be the question on the mind of just about everyone today after the surge of Monday and the smash of Tuesday. What happens next? That's hard to say. Let's just hope that it comes with continued and persistent physical acquisition.
As I've repeatedly stated since Friday, only physical demand can truly break The Banks and force an unwinding of the leverage. Buying futures is fun...but...The Banks will simply create more in order to dilute supply and the CME will just raise margins in order to force some selling. Buying into an unallocated account may save time and expense...but...what do you really own and how many others own that same metal?
And how about the utter sham/charade of the SLV? It calls to mind the Nazi propaganda first mentioned in Mein Kampf... to make the lie so "colossal" that no one would believe that someone "could have the impudence to distort the truth so infamously". Keep that in mind as you consider what's below:
- Fri Jan 29: SLV adds 34,401,300 ounces of silver or 1070 metric tonnes
- Mon Feb 1: SLV adds 18,615,300 ounces of silver or about 579 metric tonnes
- Tue Feb 2: SLV adds 56,746,000 ounces of silver or nearly 1765 metric tonnes
So let's add all of that together. You are now supposed to believe that the "fully allocated" SLV has somehow added about 110,000,000 million ounces of silver to its "inventory" over just the past three days. That's over 10% of global annual mine supply! What was that about making the lie so colossal that it almost must be believed?
Consider again the logistical impossibility of this, too. We're talking about 110,000 of the standard 1,000 ounce wholesale silver bars. First, how much manpower does it take to move that much silver around London? Second, how many people would have to be involved checking manifests and invoices, weighing the bars and registering serial numbers?
My point is that this is OBVIOUSLY ALL JUST PAPER PROMISE BULLSHIT and remember that the SLV and its custodian JPMORGAN have been claiming to add massive amounts of silver to the SLV for over a year now! There is no way...NO WAY...that any of this is legitimate.
Therefore, as we discuss what's next, IT IS IMPERATIVE that the new holders of SLV hold on and DO NOT sell their shares. These deliveries (and then audits) MUST be forced to happen. What would lead the SLV newbies to sell? Falling prices, of course...just another benefit of the margin hike-induced smash of yesterday.
But again, it is far more impactful if people simply continue to pour cash into physical metal wherever they can find it. The stories are rampant of how bullion dealers are cleaned out and wholesale suppliers have no inventory, either. This narrative MUST be maintained.
Recall last March when Comex paper selling drove the digital derivative price to $12/ounce. However, physical demand wiped out dealer inventories and the actual price for metal in hand never fell below $24. This bifurcated "market" led to questions about the legitimacy of the digital derivative pricing scheme and, before too long (and with QE∞), Comex price recovered and premiums fell. The prices met in the middle near $18 and then price exploded a few months later. This can happen again but only if the pressure at the retail and wholesale level continues unabated.
OK, let's turn our attention to today.
So far, we've had a slight bounce from yesterday's debacle. However, once the NYSE opened at 8:30 CT, the same old Machines did their usual same old selling and now here we are, near the LOD in CDG:
The economic data today...the ADP report and the service PMIs...has been slightly stronger than expected but that hasn't had much impact on either the bond market or the POSX. So, if anything, what you're seeing today is just a malaise trade as the "market digests" what has happened over the past few days.
It's now Wednesday, so we can begin to look ahead to the end of the week, the BLSBS and the important weekly close. Let's check the short term charts for levels to watch that might signal some improvement and a bounce. Below is an hourly chart of Comex Digital Gold that covers that past month. Note that, despite all of the fun in Comex silver, price has primarily remained in a $50 range. So, until it breaks either up or down, here we sit.
The same one month chart in Comex silver looks dramatically different. Notice that $26 had been stout resistance...as you've learned to expect. We must hope now that $26 becomes solid support. IF it does, then getting back above $28 and then closing there on a weekly basis becomes a very important next step in the process.
Lastly, just a note on today's schedule.
Later this morning, I'm going to record a podcast with the CEO of a silver exploration company. This guy was suggested to me by a regular member of TFMR and I've very much looking forward to getting acquainted and introducing him to all of you. Look for that audio to be posted sometime before 1:00 pm ET. Then I have to leave the office for a few hours to attend to some family matters. It shouldn't take too long, though, and I plan to be back at Turdfork no later than 5:00 pm ET. This means that your daily summary podcast will be recorded and posted a little later than usual. Thank you for your patience and understanding.
As I go to close, I see that prices haven't changed much since the last time I checked so let's just go ahead and wrap this up. Have a great day but try to remain patient and persistent in our fight.