As a psychology/economics major I'm obsessed with putting myself in other people's shoes and minds. I recently had a couple good night sleeps pretending to be Blythe Masters........ seriously. You just have to ask yourself what an genius with no morals and an infinite bank account is willing to do, and what arrows she may have in her NY Fed/Quasi-government/NWO quill. Here's what she has (obviously broad, non-technical and probably a fraction of her true weapons, but let's discuss possibilities): a market bubble with HFT robots capable of levitating or crashing the markets, a superpower interested in seeing short term strength in the USD (China), a veritable Mongolian horde of paper silver derivatives, a rather successful dog and pony show regarding the state of physical silver around the world... and possibly a bait-and-switch opportunity at the debt ceiling crisis.
So I think we've determined that the HKMEx is not necessarily good for the silver rocket, based on these forum threads;
Because the HKMEx depends on North American/European markets for price discovery, at best it is neutral because they may be able to provide some buffer to the downside, they provide no locomotion to the upside. Sorry folks.
But what is not known is that due to the way that its derivatives are written, JPM's losses are exponentional once silver breaks $36 or so. Rumors has it that JPM could be losing as much as $40 billion once silver is above $50. It has something to do with how the derivatives are written with payment tied to the price of silver.
Since JPM was a price manipulator with respectt to the price of silver, JPM assumed that any derivative payments tied to silver would be less than they would be tied to some other index like the CPI or TIPS implied inflation index. JPM's inability to hold down the price of silver relative to other measures of inflation will cause unbelievable losses due to a mismatch in their derivative structures.
In essence, JPM has bet (a huge amount)through derivatives that silver will never outperform inflation. And why not,since JPM assumed that it will always be able to manipulate the price of silver. We have now come to understand that JPM's loss exposure to silver is much greater than we have ever dared to hope."
That being said here's what we do know;
1) JP Morgan has an ungodly number of silver shorts at $15/oz, 6.6 billion oz. They are clearly trying to get the fuck out.
2) The Chinese want to see a significant buying opportunity in PMs.
So we have the NY Fed's proxy and an entire nation of metal hungry Asians looking to bring down silver before taking it back up. I highly doubt the JP Morgan will be bankrupted, mostly because they are protected by the entire banking cartel. No matter what, JPMC will come out at a profit next year. China will do everything in it's power to prop up the US Dollar, even though impossible to do this forever, it will continue to do this until I guess the powers that be want to move on. Based on these things;
3) The catalysts (I don't think we can assume to know the causality behind this) to a steep rise in the USD will be a market crash. This is fully possible with today's HFT robots (thank you ZH addiction). The markets right now I'd compare to the heisenberg... it's a gigantic fucking helium bubble, and the slightest spark will cause everything to evaporate.
4) A market crash will not only cause the USD to rise, but also reduce what little investor interest may lie in silver's paper cousins... remember the PHYZZ is a fraction of the paper silver markets, and paper silver markets is going to be successful in manipulation of silver price UP UNTIL THE EXACT MOMENT THAT THERE IS NO MORE PHYSICAL SILVER AVAILABLE. This dog and pony show is being performed in a burning building, they're not going to stop the show until the building collapses in a big mess. So keep stacking, though I shouldn't have to tell you.
5) It is silently assumed that before QE3 has any excuse for existing, the markets have to go wayyy low.
6) PMs have been steadily rising with default worries by the USA because investors are hedging with PMs. Once the debt ceiling is increased, all that interest will shift back to the debt market and cause a drop in PMs. This may be an opportune time to use a powerful psychological double whammy; where they would raid the price of PMs before the debt ceiling agreement is announced, causing a panic and rush for the exits by people that were going to walk to the exits anyways, but now will full on sprint.
Here's what I see; BIG short term drop (I'm thinking anywhere from now to august), then slow rise leading to parabolic once the USA starts to collapse.. though they can probably kick the can down the road for another year. Anyone have anything to add.. discuss? I'm playing around with macroeconomic events that are probably going to be used by the cartel to beat up weak investors and save their own elite hides.
The debt ceiling rise and a market crash may be mutually exclusive, can anyone help? CNBC was saying today that a USA default would send financials (BAC, GS, JPM, etc) through the roof. WTF?
*note; as I'm writing this in the wee midnight hours on the west coast, I am seeing a CRAZY drop from ~40.20 to ~39.62 in a span of a minute. We'll be reading about this tomorrow, because it seems gold and silver have just fallen off a cliff. My hunch is London telegraphed a future price drop and we'll be seeing further drops as this comes back to the NYMEX. Paranoia is the key to victory.