The JP Morgan Factor...

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#1 Thu, Jul 21, 2011 - 4:39am
Joined: Jul 19, 2011

The JP Morgan Factor...

Hey guys,

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.

"Just like Joe Conason at AIG, silver shorting through derivatives have caused literally billions in losses not the millions that we know about publicly. That is why JPM has been so desperate to manipulate the price of silver downward so blatantly. If I am right about this, then JPM will be dead when silver hits $60 or so. Based upon the COT and BPR, if silver hits $60, JPM will lose around an additional $6 billion dollars, a large number but not nearly large enough to bring down mighty JPM.

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.

Edited by: Western on Nov 8, 2014 - 5:09am
Thu, Jul 21, 2011 - 4:44am
Joined: Jul 19, 2011

Seems I can't edit posts, but

Seems I can't edit posts, but another arrow in the quill.. Repeat SPR release. It failed miserably last time, though it was touted like a huge success. The window dressing implies they're planning on doing it again, much like QE and bailouts.

Thu, Jul 21, 2011 - 9:27am
Joined: Jul 8, 2011


I think all of that is certainly possible.

I don't believe that silver will fall anywhere near $15...2011 is very different than 2008. But could we have a pullback to the mid to low 30's in silver and mid to low $1500 for gold? Definitely.

We've seen how reactive silver and gold are to news on the progress of the debt ceiling deal. Once a final deal is announced I think EE will definitely use the news as an opportunity to beat down the price as much as they possibly can.

The massive sell off in equities leading up to QE3 will certainly drive a lot of money into treasuries thus leading to a strengthening in the USD. Upside in PMs is possible but limited IMO. Highly doubt we'll see $1650+ gold and $45+ silver before QE3.

As you have outlined (I've made similar predictions) the Chinese are eagerly waiting to BTFD on silver and gold. PMs are primed to rocket up in Q3 and Q4 but China (and certainly JPM) don't want PMs to skyrocket yet.

For now there appears to be fierce resistance at the $40 for silver and $1600 for gold. It seems like a debt deal is imminent so we could very well see a significant sell off shortly.

Sat, Jul 23, 2011 - 4:16am
St. Louis, MO
Joined: Jun 14, 2011

I totally disagree with your

I totally disagree with your assessment of the HKMEx's effect on the price of silver and the perpetual fraud that the Crimex has been replaying every day. Dude, the fact that the market is open and PMs will be selling for 18 hours straight AND they are delivering the phyzz UNLIKE the Crimex. This is HUGE for the price of silver going up. It may not happen right away but, the HKMEx bodes very well for the future price of Silver and very bad for the future of the Crimex.

Gold and silver are to fiat money what sunlight is to a vampire.
Sat, Jul 23, 2011 - 4:54am
Joined: Jul 19, 2011

You may have misunderstood.

You may have misunderstood. Because price discovery is contingent on western exchanges, the HKMEx itself will never be a major driver of the spot price. What the HKMEx can do however is reduce the physical availability of silver in the world.. faster than what it's been going at anyways. That's the only real "countdown" we have, don't you think? Silver won't skyrocket until the actual physical shortage takes form.

We'd need an analyst with good data to show us the details of the volume and price dynamics of HKMEx versus other exchanges.

Otherwise, them's my guns and I'm stickin to em.

Sat, Jul 23, 2011 - 5:38am
Joined: Jun 21, 2011

Although it is premature to

Although it is premature to see what impact HKMEX has on silver prices, here is a graph of Comex vs HKMEx futures prices from yesterday.



HKMEX alone may not be a driver for price discovery, however, when Hunan and Pan Asia launch a silver futures—it's off to the races.

Silver Watchdog On Twitter

Sat, Jul 23, 2011 - 7:35am Western
Ernie Pantusso
Joined: Jul 14, 2011

Western wrote:What the HKMEx

Western wrote:
What the HKMEx can do however is reduce the physical availability of silver in the world.. faster than what it's been going at anyways. That's the only real "countdown" we have, don't you think? Silver won't skyrocket until the actual physical shortage takes form.

Very true. This argument applies even more as far as the PAGE is concerned.

What distinguishes these exchanges is that likely they'll trade much more physical silver than chicago and london.

So we'd need an analyst who'd be able to track down the amounts of physical silver delivered or otherwise bought (e.g. the customers of the ABC) from these exchanges and taken out of the market.

Sat, Jul 23, 2011 - 9:34am rjsand
Parkersburg, WV
Joined: Jun 14, 2011

rjsand wrote: the fact that

rjsand wrote:

the fact that the market is open and PMs will be selling for 18 hours straight AND they are delivering the phyzz UNLIKE the Crimex.

Well thought out given the ones in charge are not the same ones everywhere else, wearing different name tags, still the evil empire. If it's possible to derail the effect, does one not reckon they will try with all their might?

Sat, Jul 23, 2011 - 1:47pm
Desert Fox
napa, CA
Joined: Jun 14, 2011

Every one of us who remove

Every one of us who remove actual physical metal from the storage racks are acting like Drano on the system.

Once the racks are bare all the paper in the world will not disguise the market.

Silver is the best "commodity" to do it with because of course it's dual use. Industrial and as a monetary alternative. Industrial uses mean the metal doesn't come back and the rest of us use it as real savings and won't send it back until we are compensated correctly for it.

The banksters will obviously do everything they can to control the true price discovery mechanisms but that will not fly indefinitely.

Got Silver?

Long Silver,,,,Strong Silver

Oh, I beg to differ.

Sat, Jul 23, 2011 - 4:17pm
Joined: Jun 14, 2011

Re JP Morgan factor and Western's thoughts

Western, your scenario is possible, even plausible, but a few thoughts.

1) I do not believe we can or should dismiss the Hong Kong exchange's effect on silver based on the incredibly limited slice of trading so far.

"Rocket" upward is such an inexact term. Watch the launch of an actual rocket, the rocket moves very slowly at first as it gradually overcomes gravity. It is only later that the huge momentum is achieved. Along that line, we do not have enough time since the launch of the Hong Kong exchange to make an informed determination of its effect -- if any -- or lack thereof on the silver price. I think that effect will be positive, although not likely to be "rocket" -like by and of itself. And, even if silver would rocket upward from here, it would only be conjecture whether or not the Hong Kong exchange was responsible for all, none, or some percentage of that move. There are too many other factors that impact silver's price.

2) Putting yourself in the high-heeled shoes of the silver Masters is worthwhile, but until you can do a total mind meld, it's only an exercise in modifying your thoughts and biases with what you believe to be hers.

3) And, point three of your explanation has lost me. Heisenberg is the German physicist who developed the uncertainty principle of quantum mechanics that bears his name. If you refer to the German airship that exploded and burned over New Jersey in 1937 ("Oh, the humanity") that's the Hindenburg. And the reason it exploded and burned was that it was filled with hydrogen, which is volatile and flammable, vs. helium, which is inert.