Silver surge #2 - More margin hikes from CME group?

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#1 Mon, Jul 18, 2011 - 3:36pm
FalseParadigm
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Silver surge #2 - More margin hikes from CME group?

https://www.zerohedge.com/article/silver-surge-2-imminent

I admitted defeat recently and felt as if I may have overthought a dip in metals leading up to QE3. But sure enough the same day I admit defeat, this story breaks.

Will the CME group conveniently announce the margin hikes on the same day that Congress reaches a deal on the debt ceiling? Possible considering that the House is set to vote on Cut, Cap, and Balance tomorrow...

Edited by: FalseParadigm on Nov 8, 2014 - 5:09am
Mon, Jul 18, 2011 - 3:45pm
ghost
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Vote

What does tomorrow's vote really mean anyway? Not much ado about a real debt deal forthcoming.. just more petty politics, no? 

Mon, Jul 18, 2011 - 4:06pm (Reply to #2)
FalseParadigm
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Not implying

Not implying that margin hikes could come tomorrow...

The vote though is significant.

There's a total of 3 scenarios IMO that will have an influence in PMs one way or another.

#1 Congress reaches a deal that will include "significant" spending cuts over the course of 10 years which will "show" the world that the US is [pretending to be] serious about reducing its debt. This would create [temporary] confidence in treasuries which could create downward pressure on metals.

#2 Congress reaches a deal with little to no long term cuts. This just creates more PM buying. Metals continue to spike upward.

#3 Congress fails to reach a deal which prompts Obama to sign an executive order which raises the debt limit (or the Reid/McConnnell deal gets passed). Confidence in US debt continues to fall which propels the metals up further.

If you pair scenario #1 with margin hikes that would maximize downward price movements (primarily with silver). The raid wouldn't be as extreme or last as long as the one in early May but would still likely knock the price down to the low 30's once again. I'd imagine that physical buying would push the price back up to current levels within 2-3 weeks and would also cause COMEX to default in the near future.

All goes back to what I originally said. The EE doesn't want the Ponzi scheme to end quite yet. Allowing gold and silver to achieve a true price discovery would end their Ponzi scheme as the world would wake up to the fact that the fiat money system is already collapsing. 

We'll see though. I can see both outcomes. My gut tells me that my original call was right. Stay tuned.

Mon, Jul 18, 2011 - 4:13pm (Reply to #3)
ghost
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what time is this vote for

what time is this vote for tomorrow, any ideas?

Mon, Jul 18, 2011 - 4:13pm
FalseParadigm
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Also

Should also point out that HKMEX is launching their silver contracts this Friday, July 22nd...Which is coincidentally the same day that Congress has to agree on a debt ceiling deal if they want any time to be able to write and implement the legislation.

Margin hikes and a debt deal on Thursday perhaps?

Mon, Jul 18, 2011 - 4:53pm
tallydynasty
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Fear margin increases?  All

Fear margin increases? All traders are fairly prepared for anything & It's already $21,600 a full contract. Few months ago the peak was about 26K --- but they also risk getting so far out of line that it hurts ALL trading.

https://www.cmegroup.com/clearing/margins/#e=CMX&a=METALS&p=all

They are going to need to do it more carefully this go around.

Mon, Jul 18, 2011 - 7:06pm (Reply to #6)
inchhigh
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It was lowered?

I don't remember ever hearing about a decrease. I know they lowered some spreads but I don't remember Silver ever going down any for the peak margin increase.

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