With the recent announcement by the Obama administration of 30 million barrels of oil to be released from the strategic oil reserve, and another 30 million barrels to be released by others, I couldn't help but wonder why? There has been no reports of shortages in this country of oil or gas. It has in fact been the opposite. Haven't there been endless analysts on CNBC confounded by the rise in oil price at a time when we are awash in oil???
When I saw how that announcement caused a heart attack drop on the silver chart, my conspiracy cogs started a turning. The comex registered inventory of silver has been hitting new all time lows recently, and currently stands at just over 27 million oz. As we approach the first day notice for the July silver contract next week, the open interest remains stubbornly, and unusually high. In the days before the raid there were around 35,000 contracts open interest, and about 1000 a day were selling or rolling out where there is usually about 4000 a day this close to first day notice. Since each contract is for 5000 oz, if all these contracts were to stand for delivery, comex would have to come up with 175 million oz. As they only have about 27 million oz and falling, you can see that unless they can get a whole lot of contracts to cash out, and fast, they are about to see their destruction.
First day after the raid on oil (and silver), the open interest dropped from about 33,500 down to 31,500 for a loss of 2000 contracts. Typically as first day notice approaches, the open interest numbers drop more quickly. But if after a massive raid that has to be triggered by using the strategic oil reserve can only shake out 2000 contracts per day, and with first day notice just next week??? IMHO, the comex may be in a fix. If they fail to scare enough long contracts out by next week, just where are they going to get all that silver? Since we know them so well, we can expect all kinds of shenanigans, and outright cheating, and fraud (think rule changes, etc.) Watch the OI numbers, and be ready for next week. See how they come up with the oz standing through July.... I don't think the only fireworks will be on the 4th!
while i don't believe USA is "awash with oil", i agree this latest initiative by the Obama administration is a move against:
- commodities in general, and in particular silver/gold. Bernanke keeps saying there's no inflation, so they have to whack commodity prices when he makes those statements
- OPEC members could not agree on anything during their last meeting. this initiative (which would involve those OPEC members with big strategic reserves) is a slap in the face to OPEC, rubbing salt into the wound.
It is MOPE indeed
That's a reach bro...
I would think more like the price of fuel needs to come down NOW, to inspire Summer travel/ tourism. Providing a temp. boost to the Economy. Think of how they will play up even the smallest positive stats.
MOPE and HOPE...
Maybe it's a bit of a reach to you and me - and maybe it's all semantics, but the genpop doesn't know why their gas is cheaper, they only know that it is. Far be it from me to say why they released the oil but I can tell you that they are managing something.
Yes. Lay off the silver kool-aid for a while.
A super analysis by Jeff Nielson, posted on Le Metropole Cafe:
Btw, if you need to be registered to read that article, it's free for 1st two weeks. I highly recommend you take advantage of it....and thereafter pay the measly subscription for regular, hi-quality posts. This is the personal blog of Bill Murphy who founded GATA.* Bill writes an update every day.
*Thanks to the courage of Bill + his cohorts, the truth of the manipulation (in PM markets) is finally, slowly coming to light. Apart from Ted Butler (who has been screaming this truth since 1990's) all the other metals guys, from Eric Sprott to Dave Morgan, James Turk to Mike Maloney, all acknowledge that without Bill's long and lonely battle, we could not have come such a long way to exposing the criminal manipulation that has been going on. I wish Max Keiser would give due credit to the GATA gang.
This was not about silver. All there is too it.
This is about taking down commodities, providing a "stimulus" for the economy, and creating a possible excuse for QE3.
If they wanted to take down silver, they would have announced a few dozen more margin hikes in silver alone. Traders appear to have figured out the allowable price range, and won't take it any higher. All while the supply/demand fundos get worse and worse and worse.
Yes, I can definitely see a primary motive for the Obottom administration to appear to be easing the pain for sheeple everywhere. Wave one in this effort was the targeting of energy speculators a few weeks ago. They seem to at least for now to have gotten the ball rolling down the chart to lower prices.
But if that is the case, and they were hoping to get more silver contracts to bail as a side effect, then they have been stuffed on the silver front. I think there is still 28,000 contracts open. This makes me very nervous short term, price wise. As Tmosley has pointed out, if they need to target silver specifically, the margin hikes will roll out. But how many leveraged players remain in silver since the smash due to margin hikes from 50 to 33. Margin hikes may not be effective at all against those who are still standing at this point. To stand for delivery, one needs 100% contract price by first days notice (next Thursday). The part that makes me nervous, is waiting to see what lengths the cartel will go to if there are still too many contracts standing next month..... It may be good for contract holders as they may get an offer from Blythe Masters to cash out for 200% contract value. Physical buyers may also get a steal if TPTB must pound silver down with a flood of paper... The term 'silver lining' seems appropriate. There is just so much going on right now, I think it best to keep a long term view, and plan for the worst. Just keep stacking.
@ Eric Original ...lol I will lay off the silver kool aide for a while..... i don't want to get argyria. Although it's handy not having to fear bio warfare, and the blue skin isn't entirely unfortunate looking... lol