Sprott Latest (MUST READ!) and a Turdite Video

Thu, Jun 30, 2011 - 9:59am

Two quick things this morning. First check out this email and video I received yesterday. We should all be proud of the initiative our fellow Turdite has shown!

Turd, you've been a real inspiration to me. Reading your blog posts over the last few months (and, more recently, the forums here on the new site) have encouraged me to learn more about what's really going on with the American/global economy.

To make a long story short, once I got a handle on just how big and scary the situation is, I decided to boil it down into a format that ANYBODY could understand. Since my day job is video production, I created a little animated presentation that covers as many of the bases as I could in five easy-to-follow minutes.

Like you, I've done this without seeking credit or compensation. It's purely a public service. Since you have called - from the beginning - for your readers to educate the sheeple around them, I hope that this will be a tool that Turdites everywhere can use.

Please take a look and let me know what you think! I hope you will find it worthy of sharing far and wide.


All the best,

- "Paladex"

Next, I just received the latest "Sprott Update" via email and I figured I should post it in its entirety. YOU ABSOLUTELY MUST TAKE TIME TO READ AND UNDERSTAND IT. If you'd like to receive this directly, too, click here:

June 2011

Caveat Venditor!

By: Eric Sprott & Andrew Morris

The recent bear raid on silver has left many concerned about the sustainability of its historic run. Silver, being a relatively obscure market for most mainstream commentators, attracted much attention in the ensuing days following the May 1 takedown. Indeed, though the 30% drop in silver occurred over only four days, seemingly all eyes were on silver, with commentators who could’ve cared less about the silver market only a couple of months ago, suddenly tripping all over one another to make the bubble call. Silver bubble 2.0? Hardly. Anyone who has been fortunate to have been invested in silver over the past few years would unfortunately be used to such blatant takedowns. The Chinese don’t call it the "Devil’s Metal" for no good reason. With so much talk these days about the risks of investing in silver, we think that perhaps it may be timely for us to weigh in on the matter. The silver market is riskier than ever, but for reasons the vast majority of pedestrian commentators have failed to grasp.

There is no doubt that speculative dollars have been flowing into the silver market. We note that in April record trading volumes were registered in the SLV1, Comex futures2, LBMA transfers3, and the Shanghai Gold Exchange futures4. In fact, converting the average daily trading volume in the aforementioned silver instruments to the amount of ounces of silver they are supposed to represent, there were on average, over 1.1 billion ounces worth of silver traded every day in the month of April5. Truly a staggering number when contrasted against the actual amount of silver available for investment. To wit, the world will only supply about 979 million ounces this year from mine and recycling of scrap, of which it is estimated that 657 million ounces will be used up for non-investment purposes6. So in effect, that leaves roughly only 322 million ounces available this year for investment purposes. Converting to days (recall that at least 1.1 billion ounces traded each day) it leaves only about 1.3 million ounces per trading day of available supply. So, we are essentially trading the amount of physical silver actually available for investment, 891 times over each day! It really begs the question; just what are people trading in these markets?

Consider the largest and most prominent of those markets - the Comex, which we believe has owned an effective monopoly on silver price discovery for decades. In fact, the Comex churned over 800 million ounces of silver futures and options on average each day in April7. Indeed, notwithstanding the massive but very opaque over-the-counter silver derivatives market, trading on the Comex dwarfs both the physical and the other (known) paper silver markets, combined. Despite its dynamics being relatively complex and generally not well understood by most, the world’s financial community continues to view trading on the Comex as representative of the fundamentals for the physical silver markets. A market built on a high amount of leverage, both the buyers and sellers of Comex futures and options contracts are able to establish a position in "silver" with pennies on the dollar in collateral and even more astonishingly, no physical silver backing the contracts at all. The following charts illustrate just how unreal these markets have become.

Chart A:

Source: Bloomberg, Sprott Asset Management

Chart B:

Source: Bloomberg, Sprott Asset Management

In chart A, we compare the total open interest in Comex futures and option contracts to the actual amount of silver held in registered inventories able to be delivered against those contracts, since 2009. In chart B, with the steeply-sloping line shows the ratio of open interest (i.e. paper silver ounces) per ounce of physical silver held in inventory. We believe the historical trend of rising open interest and falling inventories deserves considerable attention from anyone attempting to understand the silver market. And though we do note that since October 2010 the trend of rising open interest appears to have abated, the inventories have been evaporating steadily and thus the ratio of the two measures has continued to trend higher. In fact, since 2009 the ratio of paper silver to physical silver has increased fourfold from approximately 8 times to almost 33 times, where it stands today.

What is the significance of this discord between paper and physical supply on the Comex? Recall, that over 800 million ounces traded each day in April on that market. Further, consider that as at the end of April there were only 33 million ounces of registered inventories to back up all of that paper trading. Just imagine if a mere 5% of all of that buying actually stood for delivery; the entire inventories would be more than wiped out. Yet despite the steady erosion of these already scant Comex inventories - a characteristic which would surely be interpreted as most bullish in other commodity markets - the price of silver has actually declined since April. We endeavour to provide a framework for understanding this phenomenon below.

Those who were following the developments in the silver market in April and May (we note that there were many who were) will likely recall that the CME Group raised both initial and maintenance margins five times within less than a two week span effectively raising the minimum amount of capital required to participate in the silver futures market by 84%8. This is significant due to the amount of leverage in the futures market and also due to the losses resulting from the precipitous selloff which began on Sunday, May 1st, when several thousand contracts were wantonly dumped onto the very thinly traded after-hours silver futures market causing the silver price to plunge 13% within the span of less than 15 minutes9.

For example, consider a hypothetical speculative trader who went long, say 200 July 2011 SI futures contracts on April 28th. At that time this trader would have been required to post an initial margin of $2.565 million for a position of one million ounces of "silver" and thus would have been levered 18.5 times10. Below we present what the trade blotter for this trader might look like over the next few days assuming he maintained his position.

Following the initial trade, each day the trader’s positions would be marked-to-market and any losses or gains would be applied against his account’s equity balance. Should the losses on the position bring the equity balance below the maintenance margin level, the trader would be required to deposit the additional capital required to bring the equity in the account back up to at least the initial margin requirement level.

While the margin increases alone would have forced a decision for this leveraged long to either post the additional margin or close enough positions to bring margin balances in line with substantially higher requirements, the trader was actually fighting a battle on two fronts. This is because in addition to the margin increases, the trader was also experiencing massive losses to his capital due to a rapidly falling silver price. So it is also important to consider the extent of losses to the trader’s equity following the precipitous drop which began on the evening of May 1st. In our scenario, before finding a bottom around May 17th, the cumulative losses would have amounted to over $14 million, or over five times the initial margin deposit of $2.565 million that was required to take on the position on April 28th. This meant that with margin call after margin call, the capital committed to the position ballooned almost 700% by the time the silver price finally bottomed in mid May. The significance of such a dramatic erosion of capital on a leveraged position cannot be overstated, particularly in the context of rising margin requirements. The CME Group would know this very well, and so it strikes us as particularly suspect that they would continue to raise margin rates in the face of such a sharp selloff. A selloff, we might add, which emanated from highly unusual trading activity on May 1st that, in our opinion, just reeks of manipulation. How else can one explain the dumping of several thousand SI futures contracts within the course of 15 minutes, in one of the most illiquid hours of trading, without seemingly any regard for price or a fundamental catalyst to speak of11? Though we will let the reader connect the dots as to what the intent of the CME Group and the seller’s of SI futures contracts on May 1st really was, we can certainly observe what effect these actions had on the market by looking further into the weekly Commitments of Traders (COT) reports published by the CFTC.

The COT provides us with the weekly open interest held by various categories of silver futures market participants, and thus gives us clues as to how these participants reacted in response to these margin increases and ensuing volatility. We present the following table showing net open interest for the various categories, converted into silver ounces, which we obtained from the COT report for selected dates.

First, note how in the three weeks following the margin hikes, the speculative12 net long position dropped from 212.7 million ounces to 170.1 million. This very clearly indicates that the speculative longs, when faced with rising margin requirements and losses to capital, did close out a substantial amount of their long positions. The commercials who were short those 212.7 million ounces appear to have been taking every opportunity to cover their own positions. Rather than shorting further into the ensuing weakness, the commercials covered approximately 42.6 million ounces in the three week period.

Another piece of information gleaned from the COT data is that despite what many commentators were hailing as a bubble caused by excessive speculation in the futures markets, the net speculative long positions had in fact been dropping over time. Even during the April run up preceding the five margin hikes, the net speculative long position actually decreased by 23%.

That commercial short position deserves further mention. What is unique and of interest to many silver market observers is not only the size of the short position on the Comex, which is dominated by those "commercials", but also the concentration of the short interest. We provide the percentage of the total open interest held by the four largest short sellers on a net basis in the table above. Note that the net position of the four largest equates to 29% of the total open interest as of May 17th. Further we would also note that the concentrated short interest of the big four, though still quite high has actually dropped substantially over the past year coinciding with the signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the resultant public discourse on position limits. Comments from CFTC commissioner Bart Chilton acknowledging the "repeated attempts to influence prices in the silver markets," and that, "violations to the Commodity Exchange Act (CEA) have taken place in silver markets and that any such violation of the law in this regard should be prosecuted," perhaps have also had an impact on the behavior of silver market participants.13 And though the CFTC’s investigation into the silver futures and options market remains open after three years, we remain hopeful that its findings will further serve the interests of the investing public who rightly expect a fair and transparent silver market void of manipulative forces.

Could the drop in open interest and the reduction of the concentration in the commercial short open interest be perceived as an indication that those top four short-sellers are positioning for the inevitable imposition of position limits rules? Perhaps, and if so, it would follow that likely the short sellers seized the opportunity to further reduce their "liabilities" by buying up contracts in early May at a 30% discount.

Let there be no mistake, we view the current setup as extremely bullish. In our view, whatever froth and excess was present in the paper markets has likely been shaken out in the recent selloff. The remaining longs do not seem willing to part with their silver at these prices. These are the strong hands with longer time horizons that are likely not overly leveraged or are willing and able to withstand substantial volatility. Moreover, perhaps the "game" on the paper silver markets which has been meticulously documented over decades by Ted Butler14 and others, will soon be coming to an end.

What is perhaps most important is that despite what has recently transpired in the paper silver markets, the robust demand fundamentals for silver have not changed in our view. For confirmation of this, look no further than the physical silver market (i.e. the real silver market) which is providing us with evidence almost daily of a sustained bull market for physical silver. The US Mint recently stated that, "demand for American Silver Eagle Coins remains at unprecedented high levels."15 Likewise for the Perth Mint16, the Austrian Mint17, and the Royal Canadian Mint18 as well. The Chinese, who were net exporters of silver only four years ago, imported 300% more silver in 2010 than 2009 and such large quantities of imports are expected to continue19. Last year, Indian silver imports increased nearly six-fold, and this year consumption is expected to rise nearly 43% according to the Bombay Bullion Association20. In Utah, silver (along with gold, of course) will now be accepted in weight value as legal tender21. According to Hugo Salinas-Price, a prominent Mexican billionaire, there is now "very strong support for the monetization of silver" in the Mexican congress22. We suspect the Europeans are likely to account for an increasing amount of silver purchases going forward as well. In fact, we just can’t imagine a better outlook for silver fundamentals. This really makes us question who could be short such massive quantities of silver and why? Particularly in those leveraged paper silver markets, where as we demonstrated, only a fraction of the outstanding notional ounces are actually available in physical quantity.

We have a very tough time understanding those bearish arguments against silver. We look at the real silver market, and based on the supply and demand data coming from the real, physical markets for silver, the fundamentals are only getting stronger. And yet there exists another silver market, which as we’ve shown, is not very connected to the physical realm at all. And though silver investors have for decades suffered the tyranny of a rigged paper monopoly over silver price discovery, it appears to us that the tides are turning. In the age of QE to infinity, investors are being more scrupulous with their capital and as such they are demanding physical silver in quantity. With more and more dollars flowing into the silver markets and a finite supply of physical to meet that demand, the theoretical losses for the paper silver short-sellers are near infinite. And with such a skewed and obvious risk/reward payoff vastly favoring the longs, we pose the following question. Who is most at risk in the silver markets: the buyers of a scarce and real asset that serves a growing multitude of purposes, or the sellers, who are short a quantity of silver which may very well not even be obtainable at anywhere near current prices? Let the Seller Beware!

For more information about Sprott Asset Management’s views on silver and its silver bullion funds, please visit www.sprott.com.

1 Bloomberg
2 https://www.cmegroup.com/trading/metals/files/MoMU-April2011.pdf
3 https://www.lbma.org.uk/pages/index.cfm?page_id=51&title=clearing_-_most...
4 https://www.sge.sh/publish/sgeen/sge_price/sge_price_daily/index.htm5 Source: Bloomberg, CME Group, LBMA, Shanghai Gold Exchange. Figure also includes trading of Comex silver options which had registered a record open interest in the month of April.
6 Andrew Kaip, David Haughton and John Hayes. "A New Paradigm for Silver: Demand is Expected to Outstrip Production Growth," BMO Capital Markets. April 3, 2011, p. 35. Note: "Non-investment" demand includes industrial, silverware, and photographic demand
7 https://www.cmegroup.com/trading/metals/files/MoMU-April2011.pdf
8 https://www.cmegroup.com/clearing/risk-management/files/SI_2009_to_may_2...
9 Bloomberg
10 A trader can always post more than the required amount of margin in his account.
11 https://www.cmegroup.com/clearing/risk-management/files/SI_2009_to_may_2...
12 For explanatory notes including definitions for each category of trader listed on the COT, please visit: https://www.cftc.gov/MarketReports/
13 https://www.cftc.gov/pressroom/speechestestimony/chiltonstatement102610....
14 For further information please visit https://www.butlerresearch.com/archive-free.asp
15 https://www.usmint.gov/pressroom/?action=press_release&id=1251
16 https://www.perthmintbullion.com/blog/blog/11-02-23/Sales_Record_For_201...
17 https://www.bloomberg.com/news/2011-05-13/silver-boom-continues-at-austr...
18 https://www.ft.com/intl/cms/s/0/7f316ac4-3acc-11e0-9c1a-00144feabdc0.htm...
19 Andrew Kaip, David Haughton and John Hayes. "A New Paradigm for Silver: Demand is Expected to Outstrip Production Growth," BMO Capital Markets. April 3, 2011, p. 17
20 https://www.ft.com/intl/cms/s/0/e64ca6b2-65e5-11e0-9d40-00144feab49a.htm...
21 https://www.nytimes.com/2011/05/30/us/30gold.html
22 https://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/5/18_...
Sprott at a Glance
With a history going back to 1981, Sprott Inc. offers a collection of investment managers, united by one common goal; delivering superior long-term returns to our investors. Sprott has a team of best-in-class portfolio managers, market strategists, technical experts and analysts that is widely-recognized for its investment expertise, performance results and unique investment approach. Our Investment Team relentlessly pursues a deeper level of knowledge and understanding which allows it to develop unique macroeconomic and company insights. Our team-based approach allows us to uncover the most attractive investment opportunities for our investors. When an emerging investment opportunity is identified, we invest decisively and with conviction. We also co-invest our own capital to align our interests with our investors. Our history of outperformance speaks for itself.

Our Businesses
The company currently operates through four distinct business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP and Sprott U.S. Holdings Inc.

Sprott Asset Management LP is the investment manager of the Sprott family of mutual funds, hedge funds and discretionary managed accounts. Sprott Asset Management offers a Best-in-Class Investment Team led by Eric Sprott, world renowned money manager. The firm manages diverse mandates united by the same goal: delivering superior returns to investors. Our team of investment professionals employs an opportunistic, high conviction and team-based approach, focusing on undervalued securities with the greatest return potential.
For more information, please visit www.sprott.com

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For more information, please visit www.sprottwealth.com

Sprott Consulting LP provides active management services to independent public and private companies and partnerships to capitalize on unique business opportunities. The firm offers deep bench strength with a highly-talented and knowledgeable team of professionals who have extensive experience and a proven ability to design creative solutions that lead to market-beating value improvement.
For more information, please visit www.sprottconsulting.com

Sprott U.S. Holdings Inc. offers specialized brokerage services and asset management in the natural resource sector. Global Resource Investments Ltd., our full-service U.S. brokerage firm, specializes in natural resource investments in the United States, Canada and Australia. Founded in 1993, the firm is led by Rick Rule, a leading authority on investing in global natural resource companies. More than just brokers, the team is comprised of geologists, mining engineers, scientists and investment professionals.
For more information, please visit www.gril.net

"Performance has always been the core objective of our firm and in 2010, Sprott Asset Management delivered significant out-performance for our investors."

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Disclaimer: The opinions, estimates and projections ("information") contained within this report are solely those of Sprott Asset Management LP ("SAM LP") and are subject to change without notice. SAM LP makes every effort to ensure that the information has been derived from sources believed to be reliable and accurate. However, SAM LP assumes no responsibility for any losses or damages, whether direct or indirect, which arise out of the use of this information. SAM LP is not under any obligation to update or keep current the information contained herein. The information should not be regarded by recipients as a substitute for the exercise of their own judgment. Please contact your own personal advisor on your particular circumstances.

Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any investment funds managed by Sprott Asset Management LP. These views are not to be considered as investment advice nor should they be considered a recommendation to buy or sell.

The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Funds may be lawfully sold in their jurisdiction. SAM LP and/or its affiliates may collectively and/or beneficially own and control 1% or more of any class of the equity securities of the issuers mentioned in this report. SAM LP and/or its affiliates may hold short position in any class of the equity securities of the issuers mentioned in this report. During the preceding 12 months, SAM LP and/or its affiliates may have received remuneration other than normal course investment advisory or trade execution services from the issuers mentioned in this report.

Have a great day!! More later. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


stoneeh dropout
Jun 30, 2011 - 2:10pm

Re: July O.I. in silver is 2,381 contracts

Yep, 2,381 contracts standing. Oh my, Harvey Organ the old nut will be disappointed. All the while not realizing that even if the whole OI from a month ago (around 70000 contracts) stood, it would still not cause the COMEX inventory to be depleted because more than 95% of contracts standing are settled in various forms of paper silver anyway.

- Markus

stoneeh Lonerangersilver
Jun 30, 2011 - 2:12pm

Re: Why silver could drop below 30$

(This isn't completely up to date - right now we're at 112k.)

Market participation right now is virtually the same, or not significantly higher than when the bull market started 5-10 years ago. Which completely refutes any "bubble" or "mania" claim.

Analyzing an investment only in respect of price development is definitely not the way to get to know an investment and predict future developments.

- Markus

Jun 30, 2011 - 2:21pm

Atlee, first you discredit

Atlee, first you discredit Eric Sprott in pointing out the obvious silver manipulation, and then you credit your self by pointing out the obvious?

Atlee said:"would have more credibility if it came from someone who did not have a vested interested higher prices. I am long term bullish but I am not a perma bull like sprott and the rest of the godfathers of precious metals."

Atlee said:"seems to me that it should be obvious that they will press silver price down to discourage taking delivery. How hard they press will be determined by how successful they are in discouraging standing for delivery. I expect lower prices near term."

Jun 30, 2011 - 2:35pm

OTC silver market

The OTC precious metals (gold excluded) open interest is over $120 billion according to BIS. The vast majority is for sure silver. A $100 billion worth of silver derivatives makes it close to 3 billion ounces of paper silver contracts on the OTC market. https://www.bis.org/statistics/otcder/dt19.pdf

Economical Disaster
Jun 30, 2011 - 2:37pm
Jake Eric Original
Jun 30, 2011 - 2:42pm

An Excellent Vid! Pax: An Excellent Vid!

Eric: I must admit, I've never seen this vid. This guy really gets to point! His last response to Flatley living in the US was priceless too! HAHAHA!

Pax: Excellent Vid. Again, as others have said, Simplicity is King! My response to the problem it raises is: There is only one combination of two major events that must occur but can not occur in order to prevent the inevitable that the vid points out.

1. We must get rid of the central banks. Period. They are the evil that promotes available FIAT to promote corruption to politicians in exchange for political power.

2. Get rid of politicians who would be corrupted by this power because of the FIAT that is made available by the central banks.

Both must occur, but sadly both can not occur where people vote themselves largess.

Jun 30, 2011 - 2:43pm

Is It Criminal Activity? Just Say So

The Sprott article is excellent as usual and laid out methodically to where it seems indisputable and obvious that something very wrong is going on in not just the silver market but other commodities as well.

Why doesn't anyone anywhere in any Government take notice and do something about it? I don't hear any Attorney General's or our SEC, FBI etc. conducting any probes on something that seems to be so massive in scale, possibly historic, that almost everyone knows about it but nothing ever happens. It takes place all day long everyday in the open global market in front or millions of investors and traders yet no criminal or ethical or whatever probes of any consequence ever happen or amount to any action at all, just lip service by Chilton and others everywhere.

How can this be?

atlee Goofy
Jun 30, 2011 - 2:43pm

@ Goofy I also said I am long

@ Goofy

I also said I am long term bullish. Short term I am looking for lower prices. I own physical and am currently short paper from 36. I mean Sprott no harm. I have heard his message dozens of times and I wish him good fortune on his quest for financial wealth.

Jun 30, 2011 - 2:45pm

An Excellent Video

A video even my neighbor can understand!!! Excellent work!!!

Any chance we'll see one explaining Quantitative Easing (now that it's over)? ha ha ha

Aronnax Economical Disaster
Jun 30, 2011 - 2:45pm

re: $100M savings account balance

Maybe sour grapes on his part, but Tyler's usually pretty good about spotting sensationalist bull$hit (as he treads a fine line pushing some of his own) Second Greek Budget Bill Passes Submitted by Tyler Durden on 06/30/2011 10:00 -0400 Federal Deposit Insurance Corporation TARP No TARP version 1-style surprises allowed: PAPANDREOU HAS VOTES TO WIN SECOND BUDGET BILL; VOTING ONGOING The Hamptons will be crowded this weekend. Keep an eye out for photoshopped receipts where hedge funds supposedly hold $100 million in accounts which only have $100,000 in FDIC insurance.

Mr. Picklepants
Jun 30, 2011 - 2:46pm

  I like the video. Very good

I like the video. Very good job.

The only problem with it was the corporate tax part. Corporations don't pay taxes. If you tax them more, they pass it on to the consumer, just get more subsidies from the government, or simply move out of the country. The video seems to hint that we should increase these taxes, or "hey look at the corporations not paying their share".

In the end individuals pay all taxes.

Jun 30, 2011 - 2:47pm

silver trading

No one knows where Silver goes from here. It is criminally manipulated on a daily basis in the most brazen and obvious way so I throw the chart out much of the time. One must be prepared to average down in increments to wherever the Banksters want to take this. That said the latest COT report is excellent on Silver showing commericials on the buy as much as at the bottom in 08' when Silver was at 10. And the guy I follow is pyramiding down into positions in SIVR as we speak. I have come to believe that trading Silver is far,far more about proper,sane and careful money management and covering the price grid with incremental buys, never going all in and never getting greedy. The rest I leave for the soothsayers, techies and guys who are alot smarter than me.

Ali beat Liston in the first fight when no one thought he could. He counterpunched and responded to Liston. And he hit him with a whole lot of flickering jabs. He did not stand and trade with Liston, no way,no how.

Jun 30, 2011 - 2:53pm

I had to stop the video in it's tracks !

For the most part I agree with the video..........but when he made that crack that corporations are paying less than individuals ? Why did he have to discredit, an otherwise good video, with that stupid populist lie ! So, 100,000 corporations pay one third the gross tax that 60,000,ooo individual taxpayers pay ? Who pays the corporate tax........consumers, no ? His gratuitous, populist ploy was disgusting ! We're all overtaxed !!! Monedas 2011 Now, I'll read Sprott !

Jun 30, 2011 - 2:55pm


For what it' worth, my take on Sprott is that someone has to counter all the propaganda around metals that infests the mainstream. But Sprott has his book to argue regardless of how bright and true he might be. I see him more as a sargent rallying the troops for yet another charge. But I wouldn't try and trade via his weekly pep sessions, you could be right in the end but lose alot of capital and spend alot of powder doing it. I do not what to game on when I think the Comex defaults or what the industrial shortages in Silver mean. These are larger perspectives that impact Silver over a long run but I cannot get emotional about any of it. Everytime Blythe throws down or loads her gloves with iron or hits in the clinch I need to respond, this is all. If I keep dancing and do not try and stand and trade with her, she will eventually exhaust herself over certain time frames. But I can't call the round or the punch no way and no one really ever has.

Monedas Mr. Picklepants
Jun 30, 2011 - 2:58pm

Furthermore !

How much individual tax comes from salaries paid by corporations ? How could this jerk slip in that unspeakable stupidity in what was otherwise a good primer on Government fraud ! Monedas 2011 A humble hoarder !

Jun 30, 2011 - 3:05pm


Frankly, I can not imagine a world without just one more Sprott precious metal fund. When do you think the next one is coming? Are these funds self serving in removing physical from the mkt? Do these funds distract investment money that would otherwise be headed into mining stocks? If I can convince you that I am a consumer advocate, do I get a Teflon coating and a ticket to wealth?

Mickey California Lawyer
Jun 30, 2011 - 3:07pm

Sprott advice and business

on the other hand, I like a guy who eats what he cooks. If we do not appreciate long or short views from either folks who are in PM or not--what is there to do?

In the end we have to make our own decisions based on a variety of input.

I like the fundamentals of debasing the US dollar-unless that turns around I am in.

Jun 30, 2011 - 3:11pm

@Atlee, I see your point. But

@Atlee, I see your point. But give the guy some credit for exposing the problems of finding fear value. When the price discovery mechanism for commodities is bids and asks instead of buys and sells you suppress price due to the increased volume. That's why i ? maybe you make a living trading. And maybe i am in the camp that think investment bankers, paper traders and speculators sucks the blood of the real world economy. No Offense.

atlee Goofy
Jun 30, 2011 - 3:16pm

@ Goofy, no problem bro. and

@ Goofy, no problem bro. and no offense taken or meant. The world is a vampire.

SilverLeaf mcc99
Jun 30, 2011 - 3:20pm

One minor problem

mcc99 said: "The way countries together as a whole have gotten out of this problem in the past is to reset the currencies in use. Germany did this before WWII. But the way to do this on a global scale will be adopt a plan whereby countries collectively agree to forgive enough of a %age of their debts to one another and adopt new currency systems. If a debt is denominated in USD and the USD is no longer used, then the debt's value falls to nothing. My guess is something like this will happen".

One minor glitch...The debt is owned by the banks. If the debt's value falls to nothing, the bankers end up taking the bullet and the levered banking system collapses. Why do you think they've been working so hard over the past 3 years to make sure the serfs don't default on their debts no matter what the cost to the economies, nations and currencies of the world?

In a rational, uncorrupted world, the debt should have been extinguished in 2008 and 2009, and the bankers who made the bad bets should have lost their shirts. That the sheeple are too stupid to see how all of the government's efforts to save the system is really a veiled effort to keep the population enslaved by debt to the bankers boggles my mind. 30 or 40 years from now, historians are going to look back at us and wonder how we could be so naive and stupid and let them get away with it.

The whole world should be following Iceland's lead - tell the bankers to go f_ck themselves, accept a harsh recession followed by organic GDP growth, and then go after the corrupt politicians and bankers who caused the crisis. The world would be so much better for it.

Jun 30, 2011 - 3:21pm

Stocks !

Stocks have a future component of business expansion not yet realized......miners, too ! Silver is real, right here and now ! It's real money in a very small market which is hugely oversubscribed ! It's a natural for the government to spook and manipulate ! I'm with Keiser......take delivery and let's be done with it ! Monedas 2011 Putting a human face on hoarding !

Jun 30, 2011 - 3:23pm

Dear Eric Sprott

Dear Eric Sprott,

While your articles on silver manipulation are great, there is something that would do much more good than 500 of such articles: and that is simply orchestrating a 2nd offering for PSLV. Taking another 10 million oz of physical silver off the markets via PSLV, or taking 1 or 2 million oz at spot prices off the Comex with your own money, is what will turn the tide for us again. The CME is gang of criminal whores, the CFTC(whether by threat, bribe, collusion, whatever) has given us all the finger, the Comex are string pullers and charlatans. No one is going to help us. We are alone in this fight. So fight we must.




And yes, as already stated 11,905,000 oz are standing for delivery as of first day July notice. I'm not sure why someone on here disparaged Harvey Organ for no reason, as he has done more to uncover all the collusive injustices done by the bankers as anyone, but that aside...

They do not settle 95% of standing contracts in paper. Just watch the physical movements each day. Roughly 6 million physical oz were taken from Comex this past month from eligible accounts alone(only a fraction of that was replaced). Furthermore 2 million oz more were sucked out from registered metals in a non-delivery month. The reason they can't settle for 95% of longs standing in paper during these times...is that most of the big orders are from factories and manufacturers...who can't keep an assembly line going without input raw material they desperately need: silver metal.

Eric Original
Jun 30, 2011 - 3:38pm

Metals down today, miners up.

Metals down today, miners up.


American Oligarch
Jun 30, 2011 - 3:40pm

false flag economics.

Greece saved from economic disaster .........Hmmm i don't think so.

Stock markets booming on this news..........It's all over we are all saved let's buy stocks....no need to print more money

thank you Fed for that free money but I don't need you anymore.

Gold and silver smashed down.........naughty speculators take that!!!!

Is this like a wave that rises up before crashing down on the shore.......

stack stack stack... that's what I'm going to do and if it does all go wrong.

I have some shiny silver paper weights to hold all that waste paper US dollars down with.

Jun 30, 2011 - 3:48pm

Really? (sarcastically)

Stocks ecstatic over the jobless claims being a tiny bit less than horrific? Really?

Greece issue is solved. Really?

US has no debt problems. Really?

Economic recovery is here! Really?

Jun 30, 2011 - 3:48pm

Santa likes Paladex's video

Congrats Paladex. You've heard the praise here.

Seeing it on JSMineset is another tribute to the clear, concise and sound explanation.


Double Bogey
Jun 30, 2011 - 3:50pm


"Before I do anything, I ask myself, would an idiot do this thing? And if they would, I would not do that"

Michael Scott

I wish I would have been doing this before I bought July SLV calls in April. 'sigh'

Eric Original
Jun 30, 2011 - 3:55pm

The latest from John Rubino

“Bondholders Should Be Under No Illusions” https://dollarcollapse.com/economy-14/lawrence-lindsey-“bondholders-should-be-under-no-illusions”/

Jun 30, 2011 - 3:55pm

ewc58 buy time

I have found in my limited experience that short plays get eaten by time decay even if you hit strike you may end up negative. What you may also consider is that the miners do not directly correlate to au price they tend to lag. Buy time, I'm all about Dec., Jan. and '13 that is where you get the whipped tail effect. IF/when we get the big up move(s) the options with time will reward your patience. If the move is big enough I then sell or protect with puts. VOLATILITY is the name of the game utilize it with time. I have graduated from May Day and I'm very thankful for the lesson, the same lesson will be taught over and over through out this bull for those who didn't get it, but at a far higher price. It is a grave mistake to trade on your wants or desires. Trading must be logical, mechanical and cold not subject to emotion. I have learned this in my small kine trading.

Wind is up so I'm dancin across the water.....

A hui hou malama pono kakou.

Jun 30, 2011 - 3:58pm

Re: Harvey Organ etc

"I'm not sure why someone on here disparaged Harvey Organ for no reason, as he has done more to uncover all the collusive injustices done by the bankers as anyone, but that aside..."

Huh? Ted Butler, Eric King, GATA maybe? Harvey Organ runs a blog where he spreads 50% truth about the PMs, and 50% nutty BS. He did have the luck to get invited to the CFTC hearing, but he would have accomplished squat if it hadn't been for Adrian Douglas backing him up.

But let's not get further into that, it's really not that important.


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