Saturday Gold and Silver

341
Sat, Mar 2, 2013 - 12:47pm

It looks more and more like the next two weeks or so are going to be significant.

So, where do we start on this fine Saturday? How about with something from Friday? I posted these two charts into the comments section of yesterday's post. They show a classic short/theft tactic. Someone, either an HFT or a Cartel monkey, pulled the trigger on a sell order in silver at the very thin trading hour of 4:00 a.m., New York time. Since silver was sitting right on top of the previous week's lows, the effect was predictable. A host of sell-stops were "harvested" as price quickly fell about 50¢. Note then that price quickly recovered as liquidity returned with the opening of the Comex session.

Why did I start there today, you ask?

  1. Because now $28.40 is a very important level to watch early next week in silver, and,
  2. It is becoming increasingly likely that the same trick is going to get played out on a much larger scale in both gold and silver before a final bottom is put in and price permanently reverses.

Let's next visit our three friends...Crude, DrC and Sylvia. Do they have any clues for us? Why, yes, they do as a matter of fact. All three have come down dramatically and all three give the appearance of having a bit further to go. And if "commodities in general" show additional weakness over the next 7-10 days, you can probably imagine that selling pressure compounding our problems in gold and silver.

So let's start with silver. Running the stops yesterday has fortunately provided us with a very clear level to watch at $28.40. If silver slips below there again early next week, it would be a near certainty that we are going to take at least one trip down below $28. There has consistently been a lot of support there so taking it much lower is going to be a task for The Bad Guys.

That said, I'm beginning to sense that the ultimate goal of this entire event is to harvest the stops below $26. IF this happens...and currently I'd put the odds at about 25%...a quick drop to $25ish would be your final bottom. Price would quickly recover back above $26 and this deliberate beatdown would be over. How can I say that? More on that in a few minutes. First, two more charts:

And gold could very easily suffer the same fate. If The Cartel can engender enough additional spec selling, a veritable cornucopia of sell stops lay waiting for them sub-1530. And you can just imagine the reaction in the media: "GOLD IN BEAR MARKET!!" will be screamed as loudly as possible in the hopes of inspiring even more selling. Like silver, I only give this about 1 chance in 4 of happening but we must be on the lookout and prepare mentally. IF this occurs, you must be strong and BUY, not sell. The spike low will be The Bottom.

Now lets get back to why I am so confident that the selling has already been stretched to unsustainable levels and why, IF a spike low occurs, the metals would quickly recover. It's all in the CoT.

Yes I know that Santa claimed this week that the CoT is fudged and unreliable and yes I know that Santa has forgotten more about the metals markets that I know.....but....Unlce Ted believes in this stuff and so do I. Here's what Ted said in his mid-week newsletter:

"One of the reasons I think the data in the COT are accurate is that every contract has a long and short side. Therefore, to lie in the large trader reporting system that underlies the compilation of the COT, would require two lies; one by the big commercial lying and another by the counterparty holding the opposite side of the contract. I can see JPMorgan wanting to lie on its COMEX holdings, but I can’t see why a counterparty tech fund or speculator would assist in that lie. Please remember that lying on a large trader report is illegal and will be prosecuted by the CFTC (one of the few things they do well)."

With this in mind, here's a c&p of my CoT comments from yesterday:

For the Wed-Tue reporting week, gold was up $10 but total OI fell by 13,432. Silver fell by 17¢ and OI fell by 9,728.
The only interesting thing in the gold CoT was the divergence between LargeSpecs and SmallSpecs. The LargeSpecs went net long 13,000 contracts while the small specs went net short 7,400. This, my friends, is called leading the HFTs by their collective noses. On the bounce, the LargeSpecs covered shorts and went long to the tune of 13,000 contracts. Once fleeced, the "market" rolled back over and now all of those new longs (at 1600+) are under water.
Once again, the real interesting stuff is in silver. Both the Large and Small specs were adding to their shorts. The Large Specs sold a net 4,700 contracts and the Smalls sold a net 2,300. The commercials also sold 1,700 longs, dropping their gross long position back to a still-whopping 52,509. All of this selling allowed the naked short Cartel members to cover a massive 8,769 shorts or about 9% of their total gross short position! Now at 83,395, The Silver Cartel has been able to trim their short position by over 15,500 contracts, from 98,979 just two weeks ago. That's a drop of 16% in two weeks while price fell $2 from $31 to $29. I'm sure that's just good timing and good fortune...at least that's what Cueball and Thunderlips think.

On the bright side...

  • The total "commercial" long position in silver is actually up over the past two weeks while JPM et al have been covering. On 2/12/13, the gross comm long position was 52,182. As stated above, as of 2/26, it was still 52,509.
  • The Large Specs are racing to get short. On 2/5/13, the Large Specs were only short a record low 6,588 contracts. Three short weeks later, they're short a total 16,016, an increase of 143%!
  • The Large Specs are also feverishly dumping longs. Three weeks ago they were gross long 42,449. As f last Tuesday, that position had been whittled down to 37,753. That's a drop of 11%.
  • And the Large Spec net long ratio, which just 3 weeks ago was totally out of whack at 6.44:1, has fallen all the way back to 2.38:1. Remember, as a general rule, anything under 3 is somewhat bullish and anything over 4 is somewhat bearish. Anything under 2:1 is extremely bullish. For examples, see here: https://www.tfmetalsreport.com/blog/4492/strange-days-indeed
  • Also, all that Cartel short covering has further dropped the Cartel net short ratio. Last week it was 1.70:1 and this week it is 1.59:1. Again, historically, anything approaching 3:1 is very bad. Anything near 1.5:1 is very good.

I don't know if I can pound the table much harder. Could price be forced even lower, taking out $28 and heading toward $26? Yes, of course it can. But, if it does, the silver market will reach and surpass the exact same extremes that indicated bottoms in October of 2011, December of 2011 and August of 2012.

Again, please go back and looks at the "Strange Days Indeed" post from three weeks ago. ( https://www.tfmetalsreport.com/blog/4492/strange-days-indeed) The data is compelling and telling. Both metals, when measured by The Cartel net short ratio, have reached very bullish levels and stop-running spike lows would make them more extremely bullish than any other time that I can recall. Simply put, with CoT history as a guide, there is NO WAY that gold is going to $1200 and silver to $18 or even $22. Not from this CoT structure!

Moving on...Speaking of the CoT, one of your fellow Turdites has constructed a site to help everyone read and interpret the data. It can be found here: https://goldsilvercot.com/charts/cot/index.php

As you know, Santa's company TRX is an advertiser on this site. Someday soon, the miners will turn and I have great faith in Santa and his company for the long term. Last week, they held their annual shareholder meeting and the entire thing was recorded and posted. Here's a link. I think you'll enjoy watching it: https://standrewsclubav.ca/webcast/client_tanzanian/20130228/

And you've probably noticed that we've had to add a captcha to the registration and login process here. Sorry but it was necessary. If you've never run a site before, you simply wouldn't believe the amount and intensity of the spamming effort out there. They really slow site performance so it is hoped that the captcha will help us all in enjoying and learning from the site.

OK, that's it for now. Enjoy your weekend but please be aware of continued volatility next week and do not allow yourself to get all freaked out by the temporary price action. Keep your wits about you and remember the fundamentals. Stay strong and keep the faith. Continue to prepare accordingly.

TF

p.s. Adding these ZH links which were posted Saturday afternoon. Don't want you to miss this: https://www.zerohedge.com/news/2013-03-02/hedging-funds-and-physical-vs-paper-gold. AND YOU MUST READ THIS: https://www.zerohedge.com/news/2013-03-02/why-jpmorgans-gold-vault-largest-world-located-next-new-york-fed

About the Author

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turd [at] tfmetalsreport [dot] com ()

  341 Comments

Byzantium · Mar 3, 2013 - 10:39am

For what it's worth...

Following on from my first two posts on this thread on page 1....

Silver made new intra-day lows on Friday. Gold has not broken out of its short term bearish channel. I think in the short term at least, we are going down from here.

A key forum in Turdville has suggested that near term price direction was to be decided on 19th to 21st Feb, but that reasoning seems to be breaking down due to the price action since.

Santa's predictions seem to be being pushed further out, and with less bombast.

I think that the cartel sharks are circling their prey. I am convinced that they want to do technical damage to the charts, and send the longs packing out of the PM market, with bitter memories.

I find myself at a critical juncture. I cashed in about 15% of my 'paper' metals back when silver was $32, bringing my cash position to 25%, and made a modest profit in so doing. I have since been nibbling at lower prices (I have been waiting for sub $26) but to my mind, the chances of another smack-down are now very real. My trading platform (Bullionvault) is open 24/7, so I have been selling again over this weekend. These sales are not at a profit; they are at break-even. If there is even a small uptick from market open tonight, I will continue selling. 40% cash looks attractive to me at present, but the thought of just getting out of most my paper positions, is also weighing on my mind; it might be the last chance to do so without incurring losses, for the near term.

These markets are treacherous. Dan Norcini too pointed out that if $1525 ish fails, we could be at $1420 pretty quickly for gold, and similar disasters await in silver. My gut tells me that this is what the cartel are after.

By Sinclair's definition, I would be construed a coward. From a trading mindset, the word has no relevance. If PMs surge forward from here, I'll enjoy the appreciation on the majority of my stake, which is currently still vested in them. But I also plan to have a lifeline, and dry powder, in case it goes the other way.

(disclaimer: I have some phys as insurance, which is not for trading).

Good luck to all!

Horst · Mar 3, 2013 - 10:40am
foggyroad · Mar 3, 2013 - 10:55am

Hmm..

Never attribute to malice what can be adequately explained by stupidity.
Unknown
Beastly Stack · Mar 3, 2013 - 10:56am

Weather

What a beautiful weekend here in South Florida. I posted a couple of images that I wanted to share. I am going to go out today and hope to take some great photos and post them later. I tried to post one here but I am not that smart I guess!

https://tradermartinstake.blogspot.com/2013/03/enjoy-day.html

Enjoy the rest of your weekend!

foggyroad · Mar 3, 2013 - 10:58am

Log on worked very well

Every time, I have used the new system it worked well

I wonder if personal PC browser settings have anything to do with it?

I like it much better than the old squiggly word one that used to generate daft words, on the old blogspot site.

I would like to thank, Admin for the new upgrades, they have worked every time.

The blogspot captcha at one point, seemed to generate nasty irritating words that I refused to type out.

Random computer generated words like slvrhater, donbyslvr, and smusmnrs , cmeok, cftcaok, jpmisdogdswrk, sqdruls, who owns that captcha computer?

hmm..

well maybe I'm reading too much into it.:0)

Stay strong, P.T.S

SilverSurfers · Mar 3, 2013 - 11:28am

WTF?

How exactly does a Mountain Lion engage in "wanton destruction".

Bunny PETA Freaks Socialize the Animal Shelters

Posted by Derrick Michael Reid on Wednesday, March 18, 2009 2:13:45 AM ahh, So, What's Up Doc?
So, my brother came by two weeks back, and I flip him a couple hundred, to build the "bunny hole", one horizontal piece of wood, with two much smaller in length, side ends, with respective holes, the piece of wood being disposed between a retaining wall and a brick bin, so that therein, it remains cool for the bunnies, with access to the backyard lawn, when they choose, yet provides a safe haven for the bunnies, at night, when the coyotes cruise. Thereafter, I bought 2 bunnies. My boys 3 and 4 just love terrorizing them, but the bunnies need training to get the bunnies to make the fast, exit stage left, into the bunny hole, and SAFE, at night when the coyotes cruise. So, I let the boys "run wild". So, next, my buddy had a bunch of gheney pigs, and gave me five, live bait for the backyard, to test the bunnyhole, and sure enough, within two days, all five gheny pigs were gone, and ONE bunny, as well, which did not learn so quick from the backyard human terrorists. However, the other one "Floppy", a black/white lop, survived a whole week. SUCCESS!!!

That, my friends, is success, "Floppy" is doing just fine, but was now a lone female, so now we have "groovy", a term like "bitchen", "boss", "cool" originating in the mid-late 60s. Groovy, however goes back to the 50s. Initially, Floppy was pisst, territoriality exploded, and she just chased the johniecomelately male gray straight eared bunny, around and around, but seems to have settled down, as they are kissing cousins, now.

The boys are out this day, in the yard, chasing Groovy around the backyard, grabbing, throwing, and just causing the newly arrived, much fear, but, Groovy is learning fast, at the first sound, he make a rocket shot to the bunnyhole, a skill necessary to survive the AM prowling coyotes. So, please my friends, pray Groovy (M)and Floppy (F), that they may survive, and have a long life together, with many little bunnies, who will be sacrificed in part to the coyote gods, in due course. Its only fair and natural, you know, predators have to eat!!!

Before I went to a commercial pet store to buy Groovy, however, I stopped at the local animal shelter to see if I could get some FREEBIES. No way, Jose, they want cash on the barrow for the abandoned bunnies, and they had many of them. The web page said that all family members must be present to acquire "adopt" a pet from the shelter. HHmmmm I thought, that is kinda weird, but ok, we all four went down. But, it aint no acquisition purchase, it is actually, a rigorous, adoption service. NO JOKE!!!

So, I am in a socialistic institutions, (tax funded) looking for bunnies, (those cute little things) and see many of them, the boys crying, I want that one, and that one and that one, etc, kinda like impotent Americans at a Russian orphanage. Apparently, the shelter workers (no doubt hard-core animal rights activists) take a very personal interest of their charges. A short, thin, blonde comes out in her official garb. I said, I would like at least one Male, for Floppy our only female bunny, maybe as many as five bunnies. She starts off with, well, before you buy, you have to bring Floppy in to make sure they get all get along. I said, this aint a dating service, is it? I though, ut-oh, to myself. She then asks, if I live in an apartment, and if so, I will need a copy of the lease agreement to make sure it would be ok to have a pet. I said I live in a house, mine. I thought, hhmmm, a Peta-vile freak, no doubt with a can of fur paint, ready at all times, strapped to the hip, and a sure shot. She then says, that the bunnies must live IN-DOORS. WHAT??? I asked, do they have to have their own room? If they have little ones, do I have to re-paint the nursery? She says, there are predators out there. I said, yeah, I know, and I devised a plan to defeat the coyotes. She goes, there are hawks as well, and if the bunny is in the back yard, the bunnies must be supervised at all times. I said in 20 years, I have seen one hawk on my property. I also have had one gopher shake. She said, you see, the bunnies must remain in doors. I asked, do I have to hire a bunnysitter, when out with the family? She goes, we have our rules. She then asked, now get this, would you like to fill out an application? I said I have a job. She said, you have to fill out an application for review to see if it is permitted for you to have one of our (30 or so) bunnies. I said, I like rabbit, but have no plans on frying my own. Our bunnies are pets, not predator feed. My eyes are rolling!!! They are freaking rabbits!!!! They have been predator feed for 20 million years. On the floor!! My Russian wife was astounded, I thought it funny, and looking back, very predicable. These people are simply NUTS, their minds on their extended family members. Also, even the commercial pet stores have workers deeply concerned about "predator feed", and one even said last year, that they would not sell me anymore bunnies, if the coyotes are still taking them.

But, now there is the boy-bunny game. The boys observe the bunnies from inside the house, and when they see the bunnies in the middle of the yard, the boys open the back door and launch a sprint to the bunnyhole, to put a door at the entrance, a piece of small wood to block the the front hole, Its a RACE, and funnier than heck, actually. If the boys win the race, they then put a brick blocking the back hole entrance, and the bunnies are trapped in the backyard, with no where to escape the terrorists. Its just a matter of time before the bunny stop running, and are caught by the terrorists, after which, papa schools them on loving, petting, and feeding, and that is darling, as well as fun, for me and the boys, but ensures continued ROCKET-SHOT training to the entrance, upon hearing any noise, which is so funny, day after day, continued joy. Coyotes I hope are not so smart to lie and wait, as they must in the first instance, make some noise scaling the fence from the max distance to the bunny hole. So, that is the game, and I hope it works in perpetuity.

Look, surely its cruel to torture an animal, but rodents do not have concepts of self or time or future, and predator feed is exactly what they are, those little procreating bunnies, and I really think its just fine, if coyotes eat bunnies, dont coyotes have any animal rights, or are they simply just shot down as the primary rodent scourge? I think a coyote is a superior being to the rabbit, and should be more protected than freaking rabbits. I only want the boys to have the experience of living with animals, in some regard, and for that reason, built the bunnyhole. She can stick her application up her bunnyhole, as far as I am concerned. Absolutely Ridiculous, at tax payer's expense, so, nothing new there. Derrick ============

Just Cant believe it, remember the 2 squirells, camping out, well, they had a litter of 9, and 11 running around. This day, 4th, I heard loud squeek squeek, could not figure out what it was, wife ran out, then monster chirp chrip, mommy squirell telling babies, hide, it was a HAWK, 2nd I have seen on my property in 20 years, after the initial development cutting trees 20 years hitherto, and the fires of laguna california, the trees are coming back, and so are the critters, that Hawk just sitting there eye balling mommy squirell. I can just see the animal shelter thugs, showing up, with nets or shot guns, to kill/capture a BIRD OF PREY. Predators aint got no rights, they get the CHITS, from the PETA-VILE crowd. A couple of the baby squirells, sticking their heads out of the retaining wall, curiousity will kill these rodents, and guess what, THAT IS OK!!! Its nature, right there, in surberbia. Beautiful thing to see, predator-prey interaction, to see it right there in the back yard. YIKES, wife just called, one sec... It was the HAWK again, right on the fence, then circling the retaining wall, absolutely beautiful bird, the wing structure, the dynamic tail rudder action of close in flight, and curved beek you know that just rips flesh and fur, just stunning to watch the hunt. And that is somehow wrong? These peta-vile freaks need to chill out.

I wish I was a bird of prey, to live free without the IRS thugs on my back to feed the liberal agenda of immoral income redistribution and counter-productive detrimental goverment care for all, to soar high and fast without the traffic cops on my tail, to exchange in honest real gold and silver money so the gov/banks dont enslave or cheat me, to use my land to raise bunnies, as I see fit without the PETA-VILE crowd getting on my case, to worship Jesus openingly without being condemned for beliving in a so called out-moded religion, that promotes sound moral values, to be able to call it like it is, without the SP PC crowd getting their panties in bunch for strong but accurate language, to wear a loaded gun in public to prevent getting robbed in broad day light. I wish I was born free, to live life in real FREEDOM, and not be born imprisoned and constrained by the multitudes of excessive regulations and an excessive number of laws. ON THIS JULY 4th, it is a glad day, but one that brings saddness in many ways, as well. I wish had lived in the early 1800s, to be a free mountian man, the free-est of all, to be a BRIDGER, and on my death bed, only wish to see THEM THAR HILLs, just one more time, and live in GOD's beauty and nature, in the land of the FREE (well kinda) and the Brave (except for the cut-and-run cowards).


Derrick
ancientmoney · Mar 3, 2013 - 11:35am

CME/Comex data . . .

Ever since the MFingG theft of $billions and physical silver by JPM through Corzine, I can't believe that the OI remains as high as reported. If it is, then the idiots get what they deserve.

The system is crooked. When Santa reveres them as "masters" at what they do, I say, give me unlimited fiat, unlimited data, and unlimited ability to apply concentrated, naked positions, I, too could be a "master" at manipulation.

I agree with Mr. Fix. At some point unknown in timing, Comex trading will halt, paper will die, and physical will become priced as it should. 

Byzantium · Mar 3, 2013 - 11:45am

@ ancient money

Yes, but though we should not ascribe their mastery to talent, recognition of their mastery is paramount regardless how they acquired it.

They have conquered this market in the short term. The price will be what they want it to be, until some of these overdue black swans turn up. Santa (& his followers) may be disappointed; we will see.

Urban Roman · Mar 3, 2013 - 11:49am

surberbia

You know it's getting late in the thread when this sort of stuff starts showing up.

¤ · Mar 3, 2013 - 11:52am

On a slow Sunday...

WEIMAR: The Hyperinflation Horror Story That Haunts Europe and Bernanke

| Author: jackbassteam |

WEIMAR: The Hyperinflation Horror Story That Haunts Europe and Central Banks

Memories of Weimar still haunt the eurozone today. The European Central Bank, widely considered to be the only institution with the firepower to stem the euro crisis, is somewhat restrained by the legacy of the German Bundesbank.

The Bundesbank – established in 1957 (well after Weimar) – for years before joining the euro was extremely conservative in expanding the money supply because of what happened during the Weimar years. And 90 years later, Germans are reminded of the perils of the printing press, whether or not the comparison is truly apt.

Adam Fergusson authored a book on the subject, entitled When Money Dies – and many consider it to be the definitive work on the Weimar hyperinflation

Germany hoped that it would quickly win the war and reap bounty from the nations it conquered, which – to the government – justified the use of the printing press to fund it:

It may have been true — there is no reason to doubt it — that a short, sharp war and a speedy victory in 1914 had been both hoped for and expected. Together with the prospect of eventual war indemnities extorted from the Entente, this would possibly have justified taking temporary liberties, even outrageous ones, with the known laws of finance…that was indeed how it did begin: in part the natural result of having a self- willed Army itching for war and a Federal Parliament which, though with limited power over the country’s constituent states, still had to find the money to pay for it.

During the war, the German government used extensive propaganda to hide the inflation from the population

During the war, the German government used extensive propaganda to hide the inflation from the population

Wikimedia Commons

The German government appealed to patriotism to fund the conflict, using slogans like “I gave gold for iron,” and “Invest in War Loan.”

Furthermore, it censored information heavily:

Every German stock exchange was closed for the duration, so that the effect of Reichsbank policies on stocks and shares was unknown. Further, foreign exchange rates were not published, and only those in contact with neutral markets such as Amsterdam or Zurich could guess what was going on…Only when the war was over, with the veil of censorship lifted but the Allied blockade continuing, did it become clear to all with eyes to read that Germany had already met an economic disaster nearly as shattering as her military one.

Not only did the Treaty of Versailles impose reparation demands that Germany would never realistically be able to repay, but it also annexed German territory and required the army to fire hundreds of thousands of soldiers:

The implications of these truncations for the German economy were of course enormous: and so were those of the requirement to reduce the German army to a quarter of its size, for it meant that over a quarter of a million more disbanded soldiers were to be thrown on the labour market. Work had to be found for them at any cost, or so it was calculated. What spelt doom were the clauses that made Germany responsible for the war and demanded colossal reparations — in money and in kind — to meet the Allies’ costs.

By September 1920, prices were 12 times as high as they had been before the war

By September 1920, prices were 12 times as high as they had been before the war

By the autumn of 1920, the strains on the economy in the wake of the war were apparent, but employment was still fairly strong:

Food had accounted for half the family budget then, but now nearly three-quarters of any family’s income went on it. The food for a family of four persons which cost 60 marks a week in April 1919, cost 198 marks by September 1920, and 230 marks by November 1920. Certain items such as lard, ham, tea and eggs rose to between thirty and forty times the pre-war price. On the bright side – in contrast to Austria – the official unemployed figure was low, and only 375,000 people were on the dole.

In August 1921, a major political assassination sent the German mark plunging

In August 1921, a major political assassination sent the German mark plunging

Matthias Erzberger

Wikimedia Commons

Matthias Erzberger, a Socialist leader who was a big proponent of taxation, was assassinated in August 1921.

The murder of Erzberger … undermined any remaining confidence that the German economy might be allowed to recover its health…bankers from Switzerland, Italy and Germany soberly concluded that it was impossible for Germany to continue her payments to the Entente and that sooner or later she would have to declare herself bankrupt, followed (they thought) by first France and then Italy. The mark, at 310 to the pound in mid-August, had sped downwards to over 400 by mid-September, and was still going down.

As February of 1922 approached, it became clear that Germany wouldn’t be able to make its reparation payment

As February of 1922 approached, it became clear that Germany wouldn't be able to make its reparation payment

Wikimedia Commons

In the inevitable event that Germany was not able to make good on the reparations to the Allies by the end of February, 1922, France would occupy a major economic region of Germany:

Germany now needed to find 500 million gold marks before the end of February to pay the Allies, and knew that she faced sanctions by France — the occupation of the Ruhr — in case of default. Default would come unless London helped. The London bankers, however, refused to give the necessary credits unless Germany put her financial house in order and unless French demands became more reasonable. Since no condition could apparently be met without the fulfilment of the others as its preconditions, German bankers now began to fear that the mark might fall to...

https://ampgoldportfolio.com/category/bernanke/

Pete · Mar 3, 2013 - 12:06pm

Clarification and Alert

My prior post regarding critical gold support per Roger Babson's methodology was a worst-case scenario.

I do see the likelihood of another swing down to a lower low in gold (basis April contract) for this move. IF prices reach the two lines on the linked chart on probably Tuesday and/or Wednesday this week and close above them both, I think we would have a major bottom in place with 1620 the next target smiley. The same buy pattern happened on 1/4/13, and it looks like it is about to repeat. Given the CoT it would probably be the end of this miserable correction in gold.

I do not think the May 16 low will be taken out, either intraday or certainly on a closing basis. But anything can happen.

[IMG]https://i45.tinypic.com/wl7pzd.png[/IMG] (Click on chart to enlarge)

The Vet ancientmoney · Mar 3, 2013 - 12:12pm

theft of $billions and physical silver by JPM through Corzine

those $billions and the silver are still there; they just moved them into a different pile on JPM's side of the aisle.....

henry · Mar 3, 2013 - 12:23pm
Motley Fool · Mar 3, 2013 - 12:33pm

@admiral AG bar

Reposted from older thread.

"He has since toned it down, and I don't mind hearing what he has to contribute."

Due to this, and your allocation level you mentioned, I decided to comment.

Many have the idea that that is the thing to do, use the leverage in silver to gain more gold. When the system collapses though it will likely come without warning, for even the most astute trader or market watcher.

I would simply say good luck to you in your thoughts of swapping silver for gold when you judge the time to be 'right'.

I think you will find at that time that you have a lot of company, and might have less success with that trade than you had hoped.

Katie Rose · Mar 3, 2013 - 12:40pm

My six goats

are louder and more obnoxious than the goat in the Obama video.

When they all decide to "talk", they could silence Obama speaking through a full sound system. Seriously! blush

And I might add, they "talk" in unison quite a bit, especially about food. wink

Byzantium · Mar 3, 2013 - 12:44pm

@ Motley Fool

Meanwhile, when Roosevelt confiscated gold in 1933, silver was found to be a more reliable store of wealth. One should not discount the possibility, in a SHTF scenario, that gold might be confiscated / heavily taxed / criminalised again, as per historical precedent in the USA and several other countries, wheras silver may once again escape confiscation.

Since you yourself refer to when the system 'collapses,' put aside the probabilities, and recognise the scenario of silver's role as a confiscation hedge. 

Byzantium · Mar 3, 2013 - 12:48pm

@ Motley Fool 2

I'm not in a position to boast about avatars, but yours is downright creepy. 

You intended from the outset to impair your own standing, yes?

SilverSurfers · Mar 3, 2013 - 12:50pm

sry

It was not me that posted a picture of the mountain lion, nor encouraged the 10 or so related posts, nor goldfish eating sharks, and wat not, but when I see BS, I call em on it. Sorry

MaxKeiser posted a vid, "The Debt Bomb" a spoof on government, kinda cute.

https://maxkeiser.com/

So, let me call Max on his BS. The theme of episode 413 was that robots replacing workers on the factory floor destroys innovation. People innovate, not robots, and workers on the floor contribution to innovation. And robots protected by patents to sustain the technology monopoly, completely contrary to free enterprise.

===

The government grants, for a limited time (17 years), an exclusive right to make use and sell an invention. The quid pro quo IS THE DISCLOSURE of the invention to government and the public, of the invention to increase the treasury of knowledge, for promoting innovation.

Max is just not on all fours on that one. Following that to its logical conclusion, the great inventors of days of old, spending life long savings and energies, in a quest, for innovation, have destroyed innovation, eh Goodyear, how that's vulcanized rubber doing for ya in that model T?

SS, I screwed up big time, and put the industrial revolution into light speed, and provided jobs for millions of auto workers and tire makers around the world.

Hey max, who is conceiving, designing, building, installing, monitoring, twiking those evil robots. robots? just asking .....

Admiral Ag Bar · Mar 3, 2013 - 1:03pm

Motely Fool - I'm reposting my reponse onto this thread here

I hear you and understand it is a bit of gamble. By scaling into trades at 40/1 (when I bought the silver at 55/1), I think I will be able to get a fair bit of gold for an excellent deal. If the GSR become more and more favorable for a swap, than good for me - I will have lots more to trade as the GSR dips.

I think the folks who are holding a bunch of silver and are waiting to trade it for gold when the GSR hits 20/1 might not get the opportunity to do so, when like you said - everyone is trying to pile in at the same time.

The flip side of that argument is the if gold goes to $5000 or $55,000 per oz or something even higher than that, the average Joe will not be buying one ounce gold coins. They will be out of reach for the common debt slave! If the economic SHTF happens and people wake up that paper wealth is only an illusion, then the average Joe will pile into silver! They will be ecstatic to trade $1,000 in useless FRNs for 4 silver eagles. Just like stocks, real estate or any other momo trade - the sheeple will pile in...only at the very end!

I will be there off loading my red hot silver at my LCS or online for those "unaffordable" gold coins. In that scenario, those holding silver would be in the cat-bird seat. Just a different perspective, I guess.

While I am open to FOFOA's (perversely obtuse and lengthy) theory - my problem with it is that is assumes only one outcome is possible - FREEGOLD and nothing else. I know the system is corrupt to the core and the psychos running the show can throw any curveball they choose. Add in geo-political and petro-dollar endgames... well you can see the future is anything but certain. 

I just want to have a nice stack of both and some productive farmland. I never wanted to be rich, just happy. I am well on my way. smiley

Motley Fool · Mar 3, 2013 - 1:10pm

@Byzantium

double

Re the creepy avatar : I have an odd sense of humour. :P

SilverSurfers · Mar 3, 2013 - 1:11pm

Ag/Au confiscation

I believe, not sure, that our constitution requires government to compensate for any "confiscation" of silver, but not gold, when done so usually for minting SILVER COINAGE. Its subtle of course, but Ag has just a tad more legal protection than gold. I think.

Get your bullion out of bank safe boxes, and lock and load.

But I think that the confiscation concern is way over blown. Sure, protect your hoard, but stay alert. With the global community running into the arms of bullion, we are no longer US centric, in suppressing bullion role, doomed to fail, givin the modern move by the globe. Stay alert to the possibility, and monitor government movements in this regard. With all the hoopla over the counterfeiter in chief, whistle blowers will give us plenty of time to defeat the theft of our stacks.

No worries, not just now anyways.

With the GSR heading towards 10-12 in the out years, Ag seems to be the better play, in both regards. KEEP STACKING!!!

Urban Roman · Mar 3, 2013 - 1:19pm

SilverSurfers

It's OK, I did it myself a thread or two ago. Posted some OT stuff toward the end. 

I don't really care about PETA, they're a silly lot. In many cases, so are the folks who rant about them. 

I do think it's sad that critters like the big cats and polar bears don't have much of anywhere to live any more. We've paved over the nicer parts of the planet. Just the way it is. 

Motley Fool · Mar 3, 2013 - 1:25pm

@admiral AG bar

Well, fwiw I disagree on the what the actions of average joe wil be, though yes he won't be buying full ounces.

From my view it is a matter of function. Once gold is recognized for it's function of store of value par exellence, average joe will be buying it, even if it is in 0.5g bars.

Those that have played the ratio have made a fair bit of gold, I don't deny this. The thing I wanted to communicate and obviously did badly is that this house of cards can collapse literally any day, and when it does so I do not see any future for silver in the store of value function ( though some may buy it during the transition period, however long that lasts).

ancientmoney · Mar 3, 2013 - 1:26pm

gold and silver value vs. current price

My grandfather worked as a baker in 1926. He recalled years later that, when he got a raise from $1/day to $8/week (six full days per week), he though he had hit the jackpot.

$8/week x 52 weeks was an annual income of $416/year. Not a big income, but enough to get by. Henry Ford paid his men $5/day shortly after his Model T was introduced--now that was princely sum! $1300/year was top-of-the-scale in those days. 

$1300/$20.64/oz means it took a year for Ford's well-paid men to earn 63 ounces of gold. 63 oz today is worth $99,540 which is quite high for a factory worker today. 

In 1926 silver was $1.35 per oz. $1300/$1.35/oz means it took a year for Ford's well-paid men to earn 963 ounces of silver. 963 oz today is worth $27,542 which is about what a lower-end factory worker might make today.

Back then, 63 oz of gold was the equivalent value of 963 oz of silver, a ratio of 15:1.

Back then, there was at least 6-8 times as much silver in the world as gold. Silver wasn't used in industry very much, so most of the silver and gold mined to that time was in stock as coins, bars, etc.

Today, there is 4 times as much available gold as silver, yet silver is only 27% as valuable as gold was when there was relatively much more of it.

And silver is being used at an accelerating rate and therefore existing stocks are dwindling. At the same time as the modern world needs more of it.

Only much higher prices can cure this unnatural state.

Unfortunately, the PTB are too preoccupied with trying to keep their fiat currencies viable (and themselves at the top of the wealth/power heap) than to do what's right, and allow silver to go to its proper values. 

I am sure this will resolve by the government declaring war on "evil silver hoarders" at some point, and closing down Comex trading as a precaution "to secure the American people" and make life safer for the children.

Motley Fool · Mar 3, 2013 - 1:28pm

ugh

double

..and no, I have not replaced the stupid mouse. It still kinda works, so feel free to call me a miser (hey what's one more insult, lol)

Motley Fool · Mar 3, 2013 - 1:43pm

@Byzantium

I know I will get insults and flak coming my way for having the audacity to comment twice on one thread. So be it.

I am going to quote from a FOFOA post.

"Something very interesting happened after Jan. 30, 1934 when Roosevelt devalued the dollar against gold. The price of gold went up 70%. What do you think happened to silver? Did it go up more than gold? Did it shoot the moon? Was it leveraged to gold? No, it dropped like an unwanted rock."

https://fofoa.blogspot.com/2010/12/focal-point-gold.html

A very good read imo.

"It is the mark of an educated mind to be able to entertain a thought without accepting it." - Aristotle

Edit : Ps. This post by FOFOA could be seen as the prequel to the one I linked, and will help make that one much more easily digestible. https://fofoa.blogspot.com/2010/09/shoeshine-boy.html

UK Silverstackers · Mar 3, 2013 - 1:51pm

@ Motley Fool

In 1934 there were millions more ounces of silver available than there are today, and now every day there is less available with demand still growing and its costing more and more to mine.

Edit: ancientmoney beat me to it and much more comprehensively put.

Motley Fool · Mar 3, 2013 - 1:59pm

@UK Silverstackers

I am aware of that. Have you heard of the concept of stock to flow ratio, and if so do you know it's importance for a 'monetary metal'. 

If not the short answer is, it's very important, gold beats silver by a mile, and depleting silver stocks are terrible for the future of silver as 'monetary metal', as one of the most important things for such is price stability, which is harder the lower the STF ratio goes. You might check out Proffessor Fekete's work in this regard if you like.

ancientmoney · Mar 3, 2013 - 2:05pm

FOFOA is half right . . .

IMVHO. I think he is correct that gold will be revalued on a one-time basis to the order of $55,000/oz or higher, to fix the debt issue. 

Debt keeps growing, so the gold price needs to go higher and higher to counterbalance the unimaginable debt--today's plus the hundreds of $trillions promised to Medicare and SS recipients coming soon to claim theirs.

China and Russia know this is coming, soin exchange for not crashing U.S. treasury market, they are being allowed to sweep hundreds of tons of western physical at bargain prices.

That one-time revaluation, which is called freegold, will be the easiest way to solve the problem for the elite, so that is what will be done.

Where I disagree with FOFOA is on the future of silver. I do think he is right that gold will be the metal revalued by governments/CBs as it is the metal they hold and silver is not.

However, silver has its own set of fundamentals driven by supply and demand. The fundamentals for silver have been suppressed for all the reasons we already know. But, at some point, likely when gold is released, or thereabouts, silver will also stop being held back by the paper markets, as it must, or modern society can't continue.

SilverSurfers · Mar 3, 2013 - 2:09pm

JAMES R GOAT

thanks

https://www.bloomberg.com/video/the-unintended-consequences-of-sequestra...

some may not like my stuff, and thats ok, but apparently the chinese do ....

https://www.docin.com/tag/triptych

Hi Derrick,

I just read your post about the bunnies and the freaks at the shelter. Incredible. You mention Laguna. I'm currently visiting my folks who live in Laguna Woods. ....

==

we are currently less than 2 miles apart.

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