The stock market is at 11,000 for the past month or so but Silver corrected 25%. Why?
Margins were only raised once in the past week, isnt a 25% dip a bit severe of a reaction for a single margin hike?
Which institution(s) were selling this past week? WHY? The story on the ground is completely different than the kitco boards. Local coin shops are very low on invetory. Buyers lining up.
Does anyone else feel like we are missing a really big story here?
I have a few ideas that I've been tossing around. Why is someone selling enough contracts to drop the price 25% in one week? This is just a brainstorm, some loose ideas.
-Possible physical shortage at comex. Some group could be selling paper in order to redeem it for physical at a lower price (going long)
-Possible imminent threat of a bank failure either in the USA or in Europe. Could be a dying bank selling everything they have to stay afloat
Something about this correction makes me think there's more than just profit taking going on here. The timing of it was/is off by a little bit. Is it a headfake/shakeout?
My guess is all of the above.
BAC or another big bank could go belly up very soon. BAC announcing their $5 debit card fee is already making a lot of customers close their accounts and go to different banks/credit unions. We all know that BAC is insolvent so could TARP 2 be on the way?
Europe is falling apart and the Fed is going to have to launch QE3 soon. This could be the cartel's last chance to hit gold and silver down as much as possible to make the gains they'll make look worse. Gold going from $1900 to $2500 looks different than going from $1500-1600 to 2000. Silver launching from $25-30 to 40+ looks different than from $40 to 50+.
its a big enough story.
i don't think you will find many report on it. they have used the stock market to beat down PM all year, silver in particular.
they pressure the market until the silver paper longs get forced out and after the jugular is cut stocks come ripping back on nothing but fed/broker buying. silver gets left in the ditch and has to fight it way back out. it does over and again.
just overlay a 5 min/24 hour chart of the S&P and silver for the last 6-9 months. its all there in black and white.
I think in particular there's some kind of mass delusion that we're suffering from deflation and that the dollar will return to some kind of prominence because it will be the only safe asset because of all the uncertainty in the world. This is all based on the great depression thinking and it's all fine and dandy but and there's a huge BUT: every single currency being used now is fiat and pegged to the dollar in some way and the dollar is backed by debt instead of gold as in the last depression. Furthermore in the last depression the federal reserve was actually contracting the money supply this time around there has been nothing but monetary expansion by the fed. The money in this case being taxpayer debt, and every new bond they sell is by definition inflationary. Of course, we could still see a market crash coordinated with a massive dollar rally but I doubt the prices of consumer goods (gas, energy, food, etc.) would actually decrease. To me it's not even a question of if the Fed will print money to make whole the foreign entities that control our debt. They have expanding the debt base the entire time and will continue to do so until a hot dog costs $100 and people finally realize their wealth has been confiscated from them right under their noses.
Thank you for the thoughts guys! I truly appreciate it :)