Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Joined: May 27, 2008 Posts: 74 Location: middle of the USA
Posted: Thu Aug 14, 2008 8:23 am Post subject: Re: For those of you on the metals sideline...best jump onbo
I'm putting money on the bet that silver has been pushed down about as far as it can be pushed down. It's down 25% from a month ago, 33% from it's high this year, and most importantly, 15% off it's 200 day moving average. (using 14.40 as spot price).
We are in a bull market, so 15% off the 200 day moving average is a real buy signal. Todays headline that prices are "officially" 5.6% higher than last year has got to work toward more people hedging against inflation.
Joined: Dec 07, 2005 Posts: 2025 Location: Australia
Posted: Thu Aug 14, 2008 7:20 pm Post subject: Re: For those of you on the metals sideline...best jump onbo
What a morning we are having here in Australia.
Coming to work I noticed that gold dropped $7 within a couple of minutes. Silver followed.
I think the sell was initiated in the thinly traded access market (wire trading) where small trades can have big impact on the price.
This set off stoplosses.
Then what happened is just bizarre. Gold went down about $15. Normally Silver woud then go down roughtl 30cents give or take. Instead Silver went down over $2 down to $12.10!!!
The mining shares, although being a bit down have not followed in selling spree. (i.e. do expect more lunch time selling though when amateurs take a break and the hair rises in shock.)
At the same time I am getting a link fromarkbuilders pointing to AMPMEX blog site where they are talking about the number of silver products that are out of stock. (APMEX blog )
Am I missing something here?
OK let me present a theory.
There are huge shorts in Silver, that is a fact. They need to cover and they want to do so at lower price.
So setting off stop losses using small trades on the access market is one way of achieving this.
Meanwhile, if you have been following the Silver news, there has been sufficient supply of 1000ounce bars etc to meet industrial need, so that hasn't driven up the price.
What there is an increasing shortage of is smaller investment grade silver like bullion coins etc.
But the retail shops don't drive up the price. They buy at what ever price they can get it for from Mint etc. and the Mints are usually restricted in which sources they get their metal from (so they are not going to source just anywhere) So shortage there doesn't cause price increase.
As I mentioned earlier, the way this really breaks is when industrial demand cannot be met or when larger traders start calling for deliveries on their contracts.
Meanwhile, you as a small investor need to make a decision.
1) Do you go and buy what ever silver you can now while prices are cheap even if there is a risk it goes down further or
2) or do you think there is no rush there will probably be investment grade silver avaialble for you for a decent price when you are ready to buy or
3) do you think that the global supply deficit that has been building up for years is going to reverse?
EDITED: BREAKING NEWS
Quote:
US Mint Suspends Sales Of Gold American Eagles
Late this afternoon (08/14/0 we learned the US Mint has suspended all sales of the 1 oz Gold American Eagles. They are not accepting additional orders for these popular bullion items.
APMEX _________________ It's not a bailout, it's a buy-in" - Nancy Pelosi
Joined: Dec 07, 2005 Posts: 2025 Location: Australia
Posted: Thu Aug 14, 2008 11:35 pm Post subject: Re: For those of you on the metals sideline...best jump onbo
Shall we revisit the short positions on TOCOM?
The figures are showing that the short covering is continuing.
So if there is a HUGE drop in price....especially on the illiquid access market (wire trading) and the big players haven't gone shorter in a big way doesn't that suggest that 1) they were unprepared for the drop in price or 2) they may have given the drop in price a nudge so they get more opportunity to close off their short position?
Noone who wants to make profit on large long positions close these on the most illiquid market so it is one of the above options.
The second is of course illegal as it is price manipulation.
So if you think this is the most likely option go directly to gata.org and lemetropolecafe.com and sign up because you are in the conspiracy camp.
And believe me, if you had said there is a coordinated erffort to keep POG down you were a year ago considered a madman. Today most people just acknowledge that desperate institutions and governments probably would intervene (read manipulate).
From lemetropole:
Quote:
On Wednesday the seven big gold shorts reduced their net short position by 2,698 contracts to 41,187 contracts.
STDJ also cut 1,325 contracts from their net short position leaving them net short 29,805 contracts.
http://www.tocom.or.jp/souba/gold/torikumi.html
In silver they increased their net short position by 75.50 contracts to 1,278 contracts (60kg deliverable equivalent).
http://www.tocom.or.jp/souba/silver/torikumi.html
Quote:
In the August 13 session on the TOCOM Goldman Sachs COVERED A MASSIVE 1,427 short contracts and sold 27 long contracts to bring their long position to 779 contracts and their net short position to 4,962 contracts. This is a new record low for their net short position since I have been keeping track (30 months). It can be seen from the chart below that the steady covering by GS is till on target to bring their position to zero by end of November at the latest. This corresponds to the expiry of the massive DEC08 COMEX gold call options.
The analysis goes further to show that IF Goldman manages to cover the rest of their shorts at $821/oz they would through out their whole stay at TOCOM made a loss of about $US175M
This is probably pocket change for them but goes to show that being short in this market hasn't been profitable.
TOCOM is however likely to dwarf in comparison with COMEX, but unfortunately this market isn't transparent as TOCOM.
For those who follow POG's counter intuitive action one has to wonder if their gold short positions are really for profit purpose or ig there is another reason for keeping POG down, like let's say supporting US$.
Sorry no links besides the TOCOM links as lemetropole is a paid site. _________________ It's not a bailout, it's a buy-in" - Nancy Pelosi
Last edited by Micki on Fri Aug 15, 2008 12:31 am; edited 1 time in total
Joined: Mar 12, 2007 Posts: 1009 Location: As close as I can get to the beginning of the pipe.
Posted: Fri Aug 15, 2008 12:27 am Post subject: Re: For those of you on the metals sideline...best jump onbo
I like your theory, Micki. The price drop is pretty amazing tonight. I think the central banks and their buds are all repositioning themselves for the next phase of the game.
Maybe I should go buy that silver eagle tomorrow in case I have to pay up to Rocc for the Lehman bet. The price is right. _________________ "When fascism comes to America it will be wrapped in a flag and carrying a cross." --Sinclair Lewis
Joined: Dec 07, 2005 Posts: 2025 Location: Australia
Posted: Fri Aug 15, 2008 12:41 am Post subject: Re: For those of you on the metals sideline...best jump onbo
Iaato wrote:
I like your theory, Micki. The price drop is pretty amazing tonight. I think the central banks and their buds are all repositioning themselves for the next phase of the game.
Maybe I should go buy that silver eagle tomorrow in case I have to pay up to Rocc for the Lehman bet. The price is right.
If only you knew how lucky you are with your competative coinshops (I assume you are in US). The cheapest silver coins you can buy Down Under are $27/oz and these ones you can't get anymore. Next cheapest I have found is round the $40. I guess there won't be any more coin buys for me unless I can by online from US. Bars are still a good option thought.
For those in Australia it may be worth noting that one of the few silver share plays, Macmin (ASX:MMN) jumped 15% today despite the drop in silver price. Considering metal action the shares overall held up quite well. _________________ It's not a bailout, it's a buy-in" - Nancy Pelosi
Joined: Dec 04, 2006 Posts: 251 Location: End of the plateau
Posted: Fri Aug 15, 2008 3:01 am Post subject: Re: For those of you on the metals sideline...best jump onbo
Could it be that our gvmnts are artificially suppressing the price of silver so they can load up before the missiles start flying in the gulf? _________________ Machines are what distinguish modern man from the savage.
Joined: Dec 07, 2005 Posts: 2025 Location: Australia
Posted: Fri Aug 15, 2008 3:22 am Post subject: Re: For those of you on the metals sideline...best jump onbo
To my knowledge US doesn't have any official silver reservs. So if that is the case it is naked shorting.
I might not be totally accurate with this but I haven't come across any CB figures for silver, leading me to believe that there probably isn't any CB that has any reserves at least in size worth mentioning.
But no way the silver short sizes would go unchecked by SEC and all the naked shorts in equities, if the government didn't allow it.
(Talking US again) _________________ It's not a bailout, it's a buy-in" - Nancy Pelosi
Posted: Fri Aug 15, 2008 11:47 am Post subject: Re: For those of you on the metals sideline...best jump onbo
Micki wrote:
OK let me present a theory.
There are huge shorts in Silver, that is a fact. They need to cover and they want to do so at lower price.
So setting off stop losses using small trades on the access market is one way of achieving this.
Meanwhile, if you have been following the Silver news, there has been sufficient supply of 1000ounce bars etc to meet industrial need, so that hasn't driven up the price.
What there is an increasing shortage of is smaller investment grade silver like bullion coins etc.
But the retail shops don't drive up the price. They buy at what ever price they can get it for from Mint etc. and the Mints are usually restricted in which sources they get their metal from (so they are not going to source just anywhere) So shortage there doesn't cause price increase.
As I mentioned earlier, the way this really breaks is when industrial demand cannot be met or when larger traders start calling for deliveries on their contracts.
Interesting theory on silver. I agree there is no problem obtaining silver for industrial use, or at least none that I have experienced. That is half the physical market. On the strength of anecdotal tales I accept people are finding it more difficult getting hold of all the investment / ornamental silver they want at the moment. That is the other half of the physical market. But as you say, the influence of the latter is questionable. I could not comment on the possibility of traders knocking out stops and exploiting the volatility, but if it is a way to profit, why not? It sounds like a much better explanation than the conspiracy theories to which some people immediately resort.
As for gold, gold is money. Almost. The problem is, many players are right now sitting in the back of a van with two heavies called Dave, and it is making a tour of pawn shops. Boss wants money. You do not mess with Boss. Bad news for anyone long gold, because a lot is being liquidated while the margin vans are making their rounds. It was common sense that it would happen sometime with all this bad credit and leverage. But for some reason people prefer to reach for conspiracy rather than the mundane. _________________ Volatility. When life isn't exciting enough.
Joined: Dec 07, 2005 Posts: 2025 Location: Australia
Posted: Fri Aug 15, 2008 4:03 pm Post subject: Re: For those of you on the metals sideline...best jump onbo
Twilight wrote:
Micki wrote:
OK let me present a theory.
There are huge shorts in Silver, that is a fact. They need to cover and they want to do so at lower price.
So setting off stop losses using small trades on the access market is one way of achieving this.
Meanwhile, if you have been following the Silver news, there has been sufficient supply of 1000ounce bars etc to meet industrial need, so that hasn't driven up the price.
What there is an increasing shortage of is smaller investment grade silver like bullion coins etc.
But the retail shops don't drive up the price. They buy at what ever price they can get it for from Mint etc. and the Mints are usually restricted in which sources they get their metal from (so they are not going to source just anywhere) So shortage there doesn't cause price increase.
As I mentioned earlier, the way this really breaks is when industrial demand cannot be met or when larger traders start calling for deliveries on their contracts.
Interesting theory on silver. I agree there is no problem obtaining silver for industrial use, or at least none that I have experienced. That is half the physical market. On the strength of anecdotal tales I accept people are finding it more difficult getting hold of all the investment / ornamental silver they want at the moment. That is the other half of the physical market. But as you say, the influence of the latter is questionable. I could not comment on the possibility of traders knocking out stops and exploiting the volatility, but if it is a way to profit, why not? It sounds like a much better explanation than the conspiracy theories to which some people immediately resort.
As for gold, gold is money. Almost. The problem is, many players are right now sitting in the back of a van with two heavies called Dave, and it is making a tour of pawn shops. Boss wants money. You do not mess with Boss. Bad news for anyone long gold, because a lot is being liquidated while the margin vans are making their rounds. It was common sense that it would happen sometime with all this bad credit and leverage. But for some reason people prefer to reach for conspiracy rather than the mundane.
I'm not sure if you read my posts, but that IS the conspiracy.
If the bullion banks price fix to get out of shorts (presumably named silver and naked or backed with leased gold from CB's) then it is illegal. Price fixing/manipulation is illegal. Coordinated effort between the large shorts make it conspiracy. Authority support or at least looking the other way is conspiracty
And what we are seeing now (at least if my theory on Goldman is right) is unwinding of this but also this is not to market rules. They are improving the results by bullying traders.
It doesn't have to get fancier to be a conspiracy.
In some cases governments do it openly. Then it is called currency support or intervention.
But to discuss it in gold it has been almost taboo. Gold is not a CB product and should not be promoted.
We also know from the past that CB's take avtive part in the gold market. For instance Paul Volcker commented on the 1980 crisis by saying (I paraphrase but yyu can find both quoted on the net) "Our only mistake was to let gold go to $850".
Greenspan said "We stand ready to lease gold in greater quantities should the gold price go up.". _________________ It's not a bailout, it's a buy-in" - Nancy Pelosi
Posted: Fri Aug 15, 2008 6:23 pm Post subject: Re: For those of you on the metals sideline...best jump onbo
I think our apparent disagreement is over our interpretation of the word "conspiracy". You use it to describe provable wrongdoing, which I agree is a possibility these days, but I tend to reserve it for unprovable tinfoil stuff. With that distinction in mind, you made some good points.
I am not troubled if silver is oversold. The traders will have their fun but life will go on in various coating applications. It will revert to whatever industry pays for it - on average in quite a broad range, anyway. If in the meantime some fund decides to give it a good slam, well, no-one can say they did not know it was volatile. I mean look at the chart. No excusing actual rule violations (if indeed any can be shown to have taken place), but we are not talking a boring item to start with. And it could be industry will eventually set the price a lot lower than some collectors have recently been valuing it. This is just one more reason to steer clear until some sort of rationality returns, or just steer clear completely. Suspecting a rigged game is a good reason not to play.
Micki wrote:
But to discuss it in gold it has been almost taboo.
Hardly surprising considering the quasi-religious bullshit that goldbugs have built up around it. They are not shy about bringing political agendas to the table, often radical, so anything they have to say about anybody else's is inevitably tainted. Gold goes up, it is finding its true value, gold goes down, it is oppression by a threatened system. I dismiss the entire discussion at that because it would be very generous to call the truth of the matter fundamentally unknowable.
No, what it really looks like is it was a successful trade that ran further than many expected, and now that hedge funds are being taken to the cleaners, it is time to cash up. That's it. No manipulation, just the first thing people reach for when they need to pawn something to cover a debt. That is supposed to be the utility of gold. An accepted store of wealth one can liquidate in a hurry. Yet people complain when it is used as such. They try to bend it into something more.
Well on the basis of what this particular vehicle is actually used for rather than people's monetary reform agendas, I expect it to go a lot lower. More deleveraging will see support at $650 being tested. I guess governments had better get printing soon for that to be avoided. _________________ Volatility. When life isn't exciting enough.
Posted: Fri Aug 15, 2008 6:54 pm Post subject: Re: For those of you on the metals sideline...best jump onbo
The dollar is up a lot. Commodities are down a lot. So, perhaps someone, somewhere is buying dollars and selling commodities?
Why? I note that auction securities are being repurchased from some investors by large investment banking firms. In addition, organizations that own auction rate securities and SIVs must disburse funds from time to time, but the market value of such securities is low.
Could it be that firms are selling their commodity positions in order to buy back auction securities? Might they be also liquidating commodity positions to avoid attempts to sell essentially worthless SIVs?
If that's true, then the downward momentum for commodities may be unpredictable. Unless one supposes that the SIV market will recover soon.
Posted: Fri Aug 15, 2008 7:12 pm Post subject: Re: For those of you on the metals sideline...best jump onbo
From what I have read, ARS buybacks are not immediate, but are months to a year away, and for each bank will take place over a period of weeks. So there should be ample time for them to raise cash and prepare. You would expect them to fill orders gradually. These sudden moves in commodities are not good value for money, they look more like the funds involved have walked into one of these guys and need cash the same day however inefficiently they raise it.
You are definitely right about bad debt and unpredictability though. Sudden debt, as the name of a popular blog so wittily puts it. _________________ Volatility. When life isn't exciting enough.
Posted: Fri Aug 15, 2008 7:46 pm Post subject: Re: For those of you on the metals sideline...best jump onbo
I am not jumping aboard the precious metals ship just yet. I think it's wierd too. Deflation is happening now. Who knows what they are doing with the economy? I hear it's really hard to borrow money now. Welcome to 1933. _________________ Deep in the mud and slime of things, even there, something sings.
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we learned the US Mint has suspended all sales of the 1 oz Gold American Eagles. They are not accepting additional orders for these popular bullion items.
