Silver Market Suppression

[foofighter]

Hi,

The past week I've been really delving into the silver fraud that JP Morgan has committed, and am trying to understand just what it means. By writing this I'm hoping that someone else can help me see if it is accurate, or whether I'm missing something.

So, what has happened is that in February Andrew Maguire blew the whistle on the silver trading fraud committed by JP Morgan. Essentially, JPM has been doing naked short selling of silver, at a ratio of 100-1. Meaning, for every 100 paper saying "I'm worth 1kg silver" that they trade, there is only 1kg of actual silver. This means that on the one hand, the actual supply of silver, which is used by many industries for production of goods, is way way lower than what the market currently thinks. Second, the price of silver is now artificially low, since people think the supply is higher than it is, and since whenever someone buys silver, new silver appears out of nowhere a la "debt as money", so the price stays low. It is, as Mike Maloney of goldsilver.com puts it, "dirt cheap" as the current price barely covers the production cost.

Because this fraud has now been uncovered, if traders start calling this bluff, i.e. they start demanding the physical silver to be delivered, lots of paper silver will default. It will also mean that the price of silver will skyrocket, to compensate for the 99% that isn't there, but should have been there. What the observers are waiting for is that someone will actually do this, but believe that at the moment noone does, because of the implications. The implications, as I understand it, is that once the price skyrockets, the confidence in fiat paper money will go away, sending the entire economy into chaos. So will anyone have the guts to do it? I don't know, but it's possible.

There is also speculation that the same fraud applies to gold, it's just not been proven yet. The same 100-1 leverage is suspected for paper gold.

At the same time, the US is printing money like crazy to cover for debts. This on its own would create a lot of inflation, and a depreciation of peoples savings accounts and pension funds, but when taken together with the above creates an explosive situation, which can erupt this year.

Does the above seem correct to you? Has anyone else been staying up to date with this story and the implications?

If it is correct, then the proper thing to do, as far as I can tell, is to take any paper money you have, and buy PHYSICAL silver and gold, and then just wait. When the prices goes kablooey you can earn a LOT on it. The catch is, of course, that at that point the money you get won't be worth much anyway, due to the hyperinflation that come into play.

And this is just two sides of it. Add in the food production of 2009 that got screwed up, the honeybees that died this winter, and the lack of sunspots causing colder weather, and 2010 seems like a pivotal turning point in our society.

 

[Beorn]

Hi foofighter,

[quote author="foofighter"]So, what has happened is that in February Andrew Maguire blew the whistle on the silver trading fraud committed by JP Morgan. Essentially, JPM has been doing naked short selling of silver, at a ratio of 100-1. Meaning, for every 100 paper saying "I'm worth 1kg silver" that they trade, there is only 1kg of actual silver. This means that on the one hand, the actual supply of silver, which is used by many industries for production of goods, is way way lower than what the market currently thinks. Second, the price of silver is now artificially low, since people think the supply is higher than it is, and since whenever someone buys silver, new silver appears out of nowhere a la "debt as money", so the price stays low. It is, as Mike Maloney of goldsilver.com puts it, "dirt cheap" as the current price barely covers the production cost.[/quote]

Well the whistles been blown quite a few times but it appears not many who can do anything about it are listening. The problem isn't with the short selling in itself but the way it has been used to manipulate the market. After all, a short in gold or silver is also a long in some other currency(usually USD). My only comment about the 100-1 leverage is that you would need to look at the capital used to back that up. For instance you could trade silver at 100-1 but use only a small portion of available funds, say 2% or 3% of you capital meaning you end up with 2-1 or 3-1 if you follow me. The problem isn't the trading ratio but the size of the positions relative to the market.

[quote author="foofighter"]Because this fraud has now been uncovered, if traders start calling this bluff, i.e. they start demanding the physical silver to be delivered, lots of paper silver will default. It will also mean that the price of silver will skyrocket, to compensate for the 99% that isn't there, but should have been there. What the observers are waiting for is that someone will actually do this, but believe that at the moment noone does, because of the implications. The implications, as I understand it, is that once the price skyrockets, the confidence in fiat paper money will go away, sending the entire economy into chaos. So will anyone have the guts to do it? I don't know, but it's possible.[/quote]

Well people have been talking about calling their bluff for years but who's got the money to do it? Suppression of gold and silver has been used to inflate the value of the USD, once they let go of their grip paper money will be worthless imo.

[quote author="foofighter"]There is also speculation that the same fraud applies to gold, it's just not been proven yet. The same 100-1 leverage is suspected for paper gold.[/quote]

There's some pretty good evidence. See Pirates of the Comex report below.

[quote author="foofighter"]At the same time, the US is printing money like crazy to cover for debts. This on its own would create a lot of inflation, and a depreciation of peoples savings accounts and pension funds, but when taken together with the above creates an explosive situation, which can erupt this year.[/quote]

Yes, that's why they are hiding the M3 data which is the broadest measure of money supply in the US. Ron Paul says "M3 is the best description of how quickly the Fed is creating new money and credit."

[quote author="foofighter"]If it is correct, then the proper thing to do, as far as I can tell, is to take any paper money you have, and buy PHYSICAL silver and gold, and then just wait. When the prices goes kablooey you can earn a LOT on it. The catch is, of course, that at that point the money you get won't be worth much anyway, due to the hyperinflation that come into play.[/quote]
Well you can if you want but do you really think you are going to be able to exchange your gold or silver for anything when the dollar collapses?

[quote author="foofighter"]And this is just two sides of it. Add in the food production of 2009 that got screwed up, the honeybees that died this winter, and the lack of sunspots causing colder weather, and 2010 seems like a pivotal turning point in our society.[/quote]
Yeah I think the race is on. What's it going to be? Economic collapse, ice age, meteor, earthquakes...

This report is from a year ago but still pretty interesting.
http://www.gata.org/files/PIRATES-OF-THE-COMEX.pdf

Here's some quotes. The two banks being JPM and HSBC.

[quote author="Pirates of the Commex"]To observe what influence anyone is having on the market we have to determine
what “Net Position” they hold. If you were to buy 100 contracts long of silver and
sell 100 contracts short at the same time, your influence on the market price will
be nil. If however you buy 10 contracts long and you sell short 100 contracts your
effect on the market price is a function of the net short position of 100-10=90
contracts.

The commercials collectively are nearly always net short. Their effect on the
price is a function of the commercial net short position which is the total
commercial short position minus the total commercial long position. To determine
how influential the positions of the US bank participation are in the market we
need to compute what percentage the net short of the banks represents
compared to the total commercial net short position.

Figure 1 shows the price of silver in black which is tied to the left hand scale
while the net short of two US Banks as a percentage of the total commercial net
short is on the right-hand scale. I have inverted this scale so that it moves in the
same direction as price. An increasing short position means the price will be
driven lower. What can be seen very clearly is that from July to November 2008
the two US Banks went from having just 9% of the total commercial net short
position to having 99%! The correlation with price is evident. The indisputable
conclusion is that these two banks dominated the market to the extent they
represented the entire net short position of the commercials and as such they
controlled the price of silver, which is illegal. Furthermore, the amount of
contracts that were sold short to achieve this represented 25% of the annual
global mine production! Could there be any clearer sign of manipulation?
...

Now as the credit markets started to show signs of serious trouble at the end of
2007 and early 2008 one would imagine that customers of JPM and HSBC would
want to buy “call” type derivative contracts such that they would be bets that
precious metals were going to go higher.

What we have observed is that two unknown banks fraudulently manipulated the
COMEX silver market in 2008 with an outrageous 99% ownership of the entire
Commercial Net Short position which resulted in the price of silver crashing from
$20/oz down to less than $9/oz. That is a real coincidence that two banks on the
hook for the equivalent of 140% of all the silver mined in one year in notional
value of derivatives should suddenly get lucky that the silver price plummeted
such that all those unlucky derivatives customers didn’t get to cash in their calls!
Coincidences like this don’t happen. From Q3 to Q4 2008 JPM and HSBC
managed to reduce their derivatives in precious metals by 6.6B$ or 43%. This
provides a very good reason why two banks in the middle of 2008 suddenly
decided they were going to break commodity law by gaining a concentration that
represented 100% of the commercial net short of the COMEX market. The most
likely reason is these two banks who have manipulated the COMEX market so
blatantly are the same two banks who own a monstrous oversized and
unregulated derivative position which needed to be reduced.
...

As another amazing coincidence JPMorganChase is the custodian of the silver
that is supposedly purchased on behalf of SLV Exchange Traded Fund investors,
and HSBC is the custodian of the gold that is supposedly purchased on behalf of
GLD Exchange Traded Fund investors. Yet these two banks are seen recklessly
gambling more gold and silver paper promises in an unregulated market than
they could ever get their hands on. Those are truly bizarre credentials to be in
charge of the safe keeping of other people’s precious metals![/quote]

 

[foofighter]

Thanks JP for that feedback!

Well people have been talking about calling their bluff for years but who's got the money to do it? Suppression of gold and silver has been used to inflate the value of the USD, once they let go of their grip paper money will be worthless imo.

The speculation I've seen is that asian investors would(/could) call the bluff. But whether they would actually do that, is another story. But even if they don't call it, per se, there still seems to be an increase in interest of investing in gold and silver, because of the crazy money printing. Which in turn would bring up the prizes. Right?

[quote author="JP"]
Well you can if you want but do you really think you are going to be able to exchange your gold or silver for anything when the dollar collapses?
[/quote]
If I can exchange it for worthless money and pay off the house with that, that would be ok. Do you have any other ideas about what to do, other than just watching it all tumble?

 

[Beorn]

[quote author="foofighter"]If I can exchange it for worthless money and pay off the house with that, that would be ok. Do you have any other ideas about what to do, other than just watching it all tumble?[/quote]

Hmm, that's a difficult one. I trade a little and I'm generally long silver but I do go both ways. My current thinking is that there is a window of opportunity in which XAU and XAG prices will be driven up before somebody pulls the plug, so to speak (either dropping the USD for something else or society becomes too chaotic to be able to trade paper money at all). I mean silver's already up 80% from the beginning of last year. I could be wrong but I just don't think the PTB are going to let the small time investors get away with selling gold for $40,000 per ounce or whatever is the price some people say it should be worth.

To be honest with you though my main priority is to just do the meditation and observe what happens. I want to grow a vegetable garden also. In my mind that might prove to be the most useful if I survive whatever is headed this way over the next few years.

 

[realitybugll]

I was keeping up for a bit. partly because the max keiser reports are so entertaining to watch :P. the economy is hard to understand, but I think who knows what will happen. If anyone thought the Jp morgan silver story would skyrocket the price of silver well... it has not as of yet. If it had been run on more mainstream news sites maybe it would have. my thought is that everything will be kept in place by the PTB until the time is right. If I had money in savings I would probably buy some ounces of silver (to have delivered for me ) not a paper guarantee and its storage somewhere else. My mom started collecting "pandora charms" I was thinking oh boy what another way for her to spend money but then i realized she is investing in silver :).

Well you can if you want but do you really think you are going to be able to exchange your gold or silver for anything when the dollar collapses?

I am wondering about this, yes. there is this thread: http://www.cassiopaea.org/forum/index.php?topic=11095.0 that I read where the question is discussed. I would advocate that necessities like food / shelter would be most valuable in the time of a collapse. however some members make some good arguments i think that gold WOULD be helpful and that you WOULD be able to exchange it somehow. or that it would assume the place of the dollar as a temporary currency... I forget a bit...

 

[SeekinTruth]

[quote author="JP"]
Well you can if you want but do you really think you are going to be able to exchange your gold or silver for anything when the dollar collapses?

If I can exchange it for worthless money and pay off the house with that, that would be ok. Do you have any other ideas about what to do, other than just watching it all tumble?

[/quote]

It's hard to say, in your specific situation, what is the best move. You may be able to pay off your house. Depends how much you owe on it, how much savings you have in cash to purchase silver (or gold), what the exact situation will be when the jig is up with the paper currency scam, etc. The PTB seem to want to switch from worthless paper that gets its worth by spreading and maintaining the perception that paper currencies are worth something (and they are as long as people accept them in exchange for valuable goods & services -- but there's always the problem of diminishing buying power of the paper currencies) to the only thing that could be worse than paper currencies backed by nothing which is virtual money -- totally electronic entries into accounts.

I'm no expert by any means but this is my understanding of the situation and views on precious metals. If you have lots of savings (I'm talking at least US$50,000 but the more the better) it would probably be a good idea to buy gold and silver with maybe up to 15 to 25% of your savings as a form of insurance to preserve your "wealth." These metals do not really appreciate in value, but if and when their prices skyrocket, it would be because they finally began to reflect the true value that the paper currencies (really the US dollar) lost. Basically the real value of the dollar would at that point be much closer to reality. What should the real prices, without all the manipulation and fraud, for gold and silver be and where will their prices eventually end up? I don't know. I've read and heard all sorts of figures bandied about in the last couple of years that gold should be at anywhere from $1500 to $3000 an ounce, and may eventually go above $10,000 an ounce. There are supposed to be ways of figuring out the M3 from other statistics within a reasonably accurate margin even though this figure is not being published for the last few years. And there are also ways of figuring out total obligations by US and other governments (debts), etc., and combined with the real demand for the physical metals come to a more objective price.

It seems to me the less savings you have, the MORE careful you have to be to provide for the necessities for your family. The more savings you have, obviously the more flexible you can be -- the more options you'll have for securing the basic necessities of life. Also the more savings, the higher that percentage of your savings to have in precious metals may make sense, after getting other things of real value but still having a considerable amount of cash.

There is quite a bit of information (including links to other sites/articles) in the Gold thread posted above by wetroof. But you need to decide if it is worth putting all the time and energy into looking into all that info. You know your own particular situation and amount of time you can/want to devote. I think it would have been very good idea if someone had lots of savings a few years ago to have purchased gold (and possibly silver) when it was between $600 and $700 an once of gold. It would simply have preserved there savings rather than have the buying power of cash increasingly erode. But probably most people who were in a position to do so back then did so.

Again, I don't know where the prices will end up, but the paper currencies will eventually collapse. If you think overall it makes sense for you to convert some cash savings to silver, it may work out when the fiat currencies finally crash and burn, but you should consider carefully the more precarious your financial situation is, because the less you will be able to afford a bad move -- for instance the timing of your purchase, since the major manipulators/insiders only know which way the prices will be going, by how much and when.

 

[crazycharlie]

I think Silver is still a bargain for the moment.
(the Romans traded silver close to 10 to 1 with gold, we are at more than 60 to 1 )
but will it be convertible or have trade value who knows ?
There could be a brief window to jump out ( of silver) for a good return ?
( I have bought a small amount of silver - its all I can afford )
its an individual issue, I rent and may move again soon
so a garden is difficult,best to have a savings of some sort to continue to
buy what food ( and at what prices ) will be available. . .
very unlikely I would lose what money I have spent on silver instead of just
keeping it in cash ....
(glad to see you all discuss survival a little here- the C's seem to dismiss 3d matters
and to focus on the spiritual, but I forgive my self for trying to work all the angles-
we got a foot in both worlds ) ... just my thoughts . . . .

 

[LQB]

Here is a good article on Naked Short Selling in the silver market from: http://www.silverbearcafe.com/private/11.10/naked.html (including figures)

The Day The Silver Suppression Stopped - Tuesday November 9, 2010 - How To Navigate The New Silver Market
Harold Goodman

Tuesday was a landmark day in Silver Metal Trading in the United States. Trading action this day clearly indicates to those attuned to the Silver Market that the long term price manipulators have finally lost control over the price of Silver Futures Contracts on the COMEX, and thus over Physical Silver Metal as well. Who are these manipulators? The largest are undoubtedly JP Morgan Chase and HSBC who have recently been indicted in a class action suit in connection with an alleged conspiracy to manipulate silver futures and options contracts on the COMEX. Unfortunately, this will probably only result in a slap on the wrist for these powerful banks, if that.

Fed Rescues Bear Stearns From Chapter 11 to Obscure Its Huge Silver Short Position From The Public Eye

It is common knowledge by those more well informed on the recent history of Silver Trading on the COMEX that JP Morgan has been sitting on a Huge Short Position In Silver for years, about equal to a full years' production from US mining, part of which was inherited from the "takeover" of Bear Stearns for mere pennies on the dollar in 2008. The more well informed of us recognize that the Last Minute Deal To Save Bear Stearns when no legitimate buyers could be found was more of a White Elephant, Gifted From The Treasury and Fed to JP Morgan rather than an actual corporate acquisition (Bear Stearns had a negative fair market value because of the reckless, losing silver short position, but was allowed to go under because they were threatening to start covering it), with the unstated obligation implicit that JP Morgan would safeguard and perpetuate the huge Bear Stearns Silver Short Position. This is certainly the reason why Bear Stearns was not allowed to fail and go through Chapter 11 bankruptcy, in which case their short position would have been made public and forcibly unwound by the courts causing silver to explode upward in price, thereby exposing the worthlessness of federal reserve notes.

Since JP Morgan is also the custodian for SLV, the largest of the Silver Bullion ETF's, any sane person would view this as an obvious conflict of interest. Shorting a vital commodity such as Silver should by all rights be limited to those with a valid need to hedge production, and a short this size is obviously being held by JP Morgan's Own Proprietary Trading Desk, since the mathematical odds of them having enough legitimate hedging clients to justify a position of this magnitude would be astronomical. NAKED SHORTING SHOULD BE ILLEGAL by every player and market maker in Every Commodity and Every Security in Every Market as it amounts to NOTHING MORE THAN COUNTERFEITING.

For those of you interested in why such a large position as this is prima facie evidence of manipulation of the silver market, I refer you to a recent article by Ted Butler , THE most respected authority in the field. He suggests that you file a complaint with the CFTC, and has a sample letter you might want to use or customize.

So let's have a look at the wild fluctuations in Silver Futures Prices on Tuesday at the COMEX. The short term contract for December delivery closed Monday, November 8th at $27.76, a thirty year record high. On Tuesday Nov 9th, it opened at $28.00, and powered steadily higher throughout the day until it reached a new 30 yr intraday record high of $29.45 shortly after 1pm eastern time. And then a curious thing happened: After climbing 6% intraday to a new 30 year intraday record high, and completing a 65% runup since the close on August 23rd, just 2 1/2 months earlier, it plummeted 10% from its peak, recovering slightly to close at $26.95, down 2.9% on the day. A ten percent swing in one day is unheard of in any precious metals market. Something was clearly up. So what happened shortly after 1:00 o'clock on Tuesday to cause Massive Panic Dumping Of Silver Futures Contracts on the COMEX?

Coin dealers and other Sellers of Actual Physical Silver Metal all closed up shop for the day at that point and refused to part with any of the physical metal at any price, until they could learn what had happened to justify this wild gyration in the futures price. A few large wholesale distributors started charging oppressively large premiums over spot instead, to discourage any physical buying from taking place. There was a great disturbance in the force. These reactions were perfectly understandable, since no dealer wanted to part with such a scarce resource that had been on such a steep, continuous, upward price trajectory for several months without having a clue how much it would cost them to replace their inventory over the next few days. So instead, they just closed up shop for the day, and sat on their assets while trying to figure out the market direction and the cause of the instability.

Then the news that Margin Requirements Had Been Increased on the COMEX filtered slowly down to the interested silver traders and suppliers from the Commodities Exchange Members. No public announcement had been made, but CME group, owner of the COMEX commodities exchange had sent a memo to its members, suddenly Raising The Margin Requirements By 30% For Silver Metal Alone, and for no other commodity, IN MID TRADING DAY. Not only was this unprecedented, but was a Major Milestone In The Silver Market, and its significance should not be underestimated. Gold margin requirements were left unchanged, but the Spillover Effect From The Stunning Silver Margin Requirement Increase also Caused Gold To Reverse Course From All Time Record High Levels of $1,425.50 at 1 pm that day to close at just $1400.60.

Not only was such a move by the COMEX historically significant, but the exact timing of the announcement was highly noteworthy. Contracts for December Silver Delivery were trading at $29.45 at 1:05 PM when the announcement came down, and seemed likely they were on their way to breaking $30 by end of trading that day, a highly significant psychological level. Silver with a 3 handle would have been an entirely new psychological level of support, and would be instantly embedded in the minds of the dollar investing public, ESPECIALLY since the price had just broken $20 two months earlier on September 7th for the first time this year. Even the clueless talking heads on TV would have been forced to acknowledge it publicly. It is truly amazing how mainstream financial broadcasters have somehow managed to Ignore Silver's Precipitous Climb of late, despite the fact that it's clearly been the Best Performing Asset class for some time.

This news was obviously the cause of the Precipitous Price Plunge, which obviously had been caused by speculators and investors dumping Silver Futures Contracts. The initial dumping was probably done by Frontrunning Speculators who quickly realized that Overextended Weak Hands would be shaken out by margin calls over the next day or two, followed by more dumping by the Actual Weak Hands who were either scared out of the market by this paradigm shift in policy, or didn't have the cash to pony up to maintain their positions.

So what caused this highly unusual move by the owners of the commodity exchange? And why couldn't they at least have waited until the end of the trading day? My take is that the Big Bullion Banks, HSBC and JP Morgan, went whining to the fed to support their Huge, Losing Short Positions In Silver, and the fed twisted the arms of their good buddies who owned the commodities exchange to do their bidding. All these banksters CLAIM to want free markets, but certainly not when their own year end bonuses are at stake. The Few Surviving Big Banks KNOW that they are insolvent and their days are numbered. Of course it is also in the fed's own interest to camouflage the runaway commodity price inflation their Out Of Control Money Printing is already causing, and to hide the ever more rapid deterioration of the federal reserve note's purchasing power from the public.

What no one has mentioned is that suppressing the silver price over the long term takes a supply of physical metal to sell into the market. This recent price explosion tells me that the Secret Stockpiles of Silver that the manipulators have been using to Suppress the Silver Price over the years have now been exhausted, overwhelmed by Worldwide Investor Demand and a multitude of new industrial uses. Years of price suppression has caused many mines to become uneconomic to the point that most of the world's silver production is now the by product of base metal mining.
The Crybaby Bullion Banks are Such Sore Losers, they whined until they got the commodities exchange to change the rules for them, not just in mid game, but in mid trading day. This was obviously devised to cause panic selling. How effective will this move be? Who will benefit? Who will lose?

Well, Maxed Out, Overextended Speculators on Margin forced to liquidate during Silver's Spectacular Climb will certainly be penalized. And the Big Silver Shorts, Naked Silver Shorts, All Silver Shorts will certainly benefit - at least temporarily. Those shorts who managed to cover during the brief period of speculative and margin call dumping will get a short term windfall. But then what? I'm expecting Silver To Resume Its Climb. Nothing has changed fundamentally. The can has been kicked a little further down the road, that's all.

Demand for Silver Metal is now global and India and China are the largest consumers. India's consumption is up 500% this year, and China's is up 400%. The Chinese government legalized the private ownership of gold and silver bullion two years ago, and ever since have been running aggressive television advertising, urging their citizens to get their savings into bullion investment coins and bars. This is an easy sell in China, where the cultural affinity for precious metals is already strong, and the pent up demand after years of private ownership being illegal is considerable. Bullion investment coins as small as three grams are available at every post office in China. And if/when the Chinese government/central bank finally decides to establish a bullion backed currency, it will give them a built in domestic supply to confiscate and add to the government coffers.

The uses of metallic silver are expanding every year. It's in everything around you, computers, cell phones, flat panel TV's, switches, Prius batteries, polyester cloth and most of it can never be recovered as scrap.

Déjà vu - Commodities Exchange Tightens Silver Margin Requirements, Sinking the Hunt Brothers

When the forerunners of the COMEX raised the margin requirements for silver futures on January 7th, 1980, it was the beginning of the end for the Hunt Brothers' fortune. It was said that the Hunt Brothers, in cooperation with the Saudis, had already managed to corner about 35% of the above ground silver market, causing the futures price to peak at $48.70 an ounce, the All Time Record High Closing Price. After the sudden, unexpected change in margin requirements, the price dropped in half in only four trading days. The Hunt brothers were already over leveraged, and when the Saudis pulled out of the deal, they were ruined. This was following a period of excessive over printing of the US dollar in the 70's, quite similar to the one we are experiencing today, and I suspect the fed and treasury were culpable in the sudden change in margin requirements that ruined the Hunts. Gold and silver going parabolic made the monetary policies of the fed at that time look bad. The Recently Fiat Federal Reserve Notes were being exposed to the light of day for what they really were - Unbacked Pieces of Paper that had Completely Failed as a Store of Value - arguably the most important function of a currency. Without this capability, federal reserve notes would only be useful as a Medium of Exchange Substantially Superior to Barter, but had been Exposed as Useless for Long Term Savings, or as a Conduit for Long Term Contracts, crucial to any economy. Legal Tender Laws prevented anything else from being used, and it was illegal to demand payment of any contract in bullion.

Navigating Today's Silver Market in the Aftermath of Margin Requirement Changes

Today, the Overextended Long Speculators in Silver hold smaller positions than the Hunts. They will be forced by the exchange to liquidate positions to meet the new margin requirements, and in a few days normal trading patterns will resume. Silver Will Resume Its March, upward and onward, unobstructed by the manipulators who are now out of ammo, and trampling on the Bullion Bank Short Conspiracy along the way. Tuesday, November 9, 2010 was The Day They Fired Their Last Silver Bullet.

The Biggest Silver Consumers in the world, China and India, will be largely unaffected, and will see this as a buying opportunity, as will Smart Investors Worldwide. Long Term Silver Investors can smell blood in the water, and they want to eat the Big Bullion Banks for lunch. They will be holding and adding to positions for the most part. Most industrial demand for silver is highly inelastic as well, so the steady rise in price will have little effect on industrial consumption. As the silver price continues to rise, silver jewelry will become trendy, and will no longer be looked down on as junk jewelry. The Coming Price Increase of Silver Will Cause an Increase In Demand For Silver Jewelry. This may seem counterintuitive, but I believe it will come to pass.

So have we truly seen an end to Thirty Years of Silver Price Suppression? If the Suppressors of Silver are really out of Silver Bullets, are there any more hidden bombshells left in their arsenal? Well, margin requirements could still be raised on the COMEX, again and again until they reach 100%. Then they would be completely out of those howitzer shells, but I believe future raises in Silver Margin Requirements will be less and less effective as Silver Speculators are now expecting them, and thus will be less vulnerable and overextended. It would be a slap in the face to the Whiny Silver Suppressors if they managed to finagle another increase in margin requirements, and it resulted in little or no panic selling.

What about more Naked Shorting? Well, this would be a Desperate Last Ditch Measure By the Bullion Banks, with the risk of getting caught with unlimited losses on an increased short position as Silver Prices Continue Steadily Upward, paralleling the increases in the money supply as more and more unbacked dollars are continually printed. But the bullion banksters don't really care because they know that their Uncle Sammy and Daddy Bernanke will keep funneling them more worthless paper federal reserve notes to cover these positions in a pinch. After all, it costs them nothing to print, and these spoiled stepchildren of the fed are officially too big to fail now that the global economy is in such a precarious position, right? So, the next time that the manipulators do a planned take down the equities markets as they did in 2008, you can expect to see a bunch more Naked Shorting By the Bullion Banks in tandem with it, just like in 2008. So just be careful not to get caught out on margin, or you could be shaken out of your speculative long position for a loss, instead of being able to hold on for a year or so until Silver Continues Its Inexorable Climb To The Stars. Holding Physical Silver and Gold is the way to protect your hard earned savings from the Vicious, Unprincipled Manipulators of Markets and Dastardly Dilutors of the Dollar, and Silver Is Far More Undervalued Than Gold at this point in time.


There is a more detailed explanation of what happened Nov 9 from Bob Chapman here: http://libertyarchives.com/farlive/FS2_FRI.MP3

And an excellent short video illustrating the sentiment behind Max Keiser's Crash JP Morgan Buy Silver initiative here: http://www.youtube.com/watch?v=uNW8ZJU8HQA&feature=player_embedded

 

[foofighter]

I think Mike Maloney puts it quite well: the more these guys manipulate the market, the better, because that gives us the opportunity to accumulate more PM's at ridiculously low prices, and when the manipulation ends, the price will go so much higher. For myself, I don't mind all this non-sense, for this reason.

 

[LQB]

I think Mike Maloney puts it quite well: the more these guys manipulate the market, the better, because that gives us the opportunity to accumulate more PM's at ridiculously low prices, and when the manipulation ends, the price will go so much higher. For myself, I don't mind all this non-sense, for this reason.

Indeed, and end it will very soon - one way or another. You can print dollars galore for settlements but you can't print silver. I'm seeing indications of supplier shortages in different places.

 

[crazycharlie]

Two grass roots movements out,, one from France &
one from Max Keiser

http://www.youtube.com/watch?v=n-UKkO3iswI&feature=player_embedded

December 7th take your money out of the banks

http://www.facebook.com/event.php?ei...6533405&ref=ts


In October, retired French Football Star (currently he makes films and acts) Eric Cantona gave an interview to a small news agency in the West of France

Basically, he says that to solve the issues involving banking and finance, the only way is for people to take all of their money out of banks at once.

Max Keiser says when ya get your money out buy SILVER and break JP Morgan ....

 

[seek10]

Two grass roots movements out,, one from France &
one from Max Keiser

http://www.youtube.com/watch?v=n-UKkO3iswI&feature=player_embedded

December 7th take your money out of the banks

http://www.facebook.com/event.php?ei...6533405&ref=ts


In October, retired French Football Star (currently he makes films and acts) Eric Cantona gave an interview to a small news agency in the West of France

Basically, he says that to solve the issues involving banking and finance, the only way is for people to take all of their money out of banks at once.

Max Keiser says when ya get your money out buy SILVER and break JP Morgan ....

surely lot of stuff is going on silver. this recent keiser report , I thought was interesting mainly due to the confidence keiser has on Alex jones.

http://vodpod.com/watch/4938067-keiser-report-crash-jp-morgan-special?u=ampedstatuscom&c=ampedstatus

 

[go2]

Let me ask you who makes the market in silver? It is currently made by trading in paper promises to deliver silver. When the Comex fails it will take some time for a physical value to be established. The dealers of physical will lock up their inventory and refuse to sell. The paper promises to deliver bullion, if you read the fine print in the contract with your attorney, will be settled with dollars as legal tender. This is true of futures contracts and SLV, for example. JP Morgan will not be bankrupted by its silver short. The Federal Reserve is creating trillions of dollars to make all debts whole. No defaults allowed!

Assume the Comex has collapsed. How will the price of physical will be fixed. At present, the dealers of physical buy and sell based on the paper price fix at the Comex for silver and LBME for gold. If the Comex fails you can imagine the price of paper promises to delivery physical will drop toward zero. JP Morgan will make a fortune on its paper short positions and the paper longs will be slaughtered.

The question is when and how will a new fix for physical be established. I might take several years of holding your physical silver to realize an exchange value for the asset. True, it will not go to zero, but it won't trade if the Comex stops fixing a price. If I had silver, I would be trading it for gold at these prices. The reasoning is as follows. Gold is the reserve asset of some big players in the world of economics and politics. The central banks hold gold as a reserve asset. The House of Saud sits on a huge gold hoard. The BIS backs gold. The people of India hold 13,000 tons in private hands. The US Treasury has 8000 tons. So, you can see when the dollar collapses and the savers of the world don't trust paper promises...it will be gold that recapitalizes trade and production of the world economy.

Silver will be seen as a commodity. It is has industrial uses and is consumed. Its commodity value depends on supply and demand. It will be held as a monetary reserve asset by small holders, but the price is not likely to advance nearly as far as gold in the long term. Gold on the other hand, has no industrial uses. It is not consumed and the total above ground supply increases by 1 to 2 percent per year. This fact makes gold the reserve asset of choice. It is not subject to supply and demand like consumed commodities. It cannot be created by the governments or banks.

The problem of fixing a price for exchange of physical gold when the LMBE paper gold pricing mechanism fails will be assumed by the Bank for International Settlement. They will open a physical gold window with a price balancing debt instruments currently used for saving. The debt instruments denominated in dollars will likely suffer a drastic haircut as they say in the event of default. The system will not allow default, but at present the Central Banks are making all debt good by creating base money with the stroke of a key board. This is rapidly debasing the value of each fiat currency unit. It is taking from the savings in dollar denomination to make the creditors whole.

In the world to come, the fiat exchange function of legal tender will be maintained because it is convenient for daily buying and selling, but those who produce an excess above their immediate needs will demand gold as a savings vehicle. No one will trust a government fiat denominated promise to pay for generations.

I know Max Keiser and he is a nice fellow, but keep in mind, selling “wolf tickets” is how he makes a living. We were not educated about money and economics and particularly monetary history. The system is designed to take advantage the uninformed. You can find very good information on precious metals, monetary theory and history at http://fofoa.blogspot.com/. It will require time and effort to read the archive. Good luck searching for a safe haven in the monetary storm enveloping the world now.

Note: The above comment is based on the thinking and feeling of my life experience. I have sketched possibilities for your consideration. Remember, predicting the future is not Newtonian physics.

 

[LQB]

Thanks go2 for the post/info and the link to fofoa. I have only read the current page so I have a long way to go. Your knowledge in the area is clearly far better than mine. The level of my understanding is probably illustrated in my comments below. I'll bone up over at fofoa.

Let me ask you who makes the market in silver? It is currently made by trading in paper promises to deliver silver. When the Comex fails it will take some time for a physical value to be established. The dealers of physical will lock up their inventory and refuse to sell. The paper promises to deliver bullion, if you read the fine print in the contract with your attorney, will be settled with dollars as legal tender. This is true of futures contracts and SLV, for example. JP Morgan will not be bankrupted by its silver short. The Federal Reserve is creating trillions of dollars to make all debts whole. No defaults allowed!

Yes, saying Crash JPM is like saying crash the US Gov or crash the Fed. I'm sure Keiser knows this and this may be a campaign that benefits Keiser more than anything else (I have other probs with Keiser like his insistence on AGW and peak oil). But is there a benefit here for the people? What if it peaks the interest of many to learn why it didn't work (assuming that folks did not convert the majority of their wealth to physical silver), and so on. Folks might learn much more about our reality through participation in the campaign. Hard to say if there is a benefit here. [Good GATA article on this at http://www.gata.org/node/9326]

Assume the Comex has collapsed. How will the price of physical will be fixed. At present, the dealers of physical buy and sell based on the paper price fix at the Comex for silver and LBME for gold. If the Comex fails you can imagine the price of paper promises to delivery physical will drop toward zero. JP Morgan will make a fortune on its paper short positions and the paper longs will be slaughtered.

Yes, the paper market will be annihilated. It seems to me that in that case, regardless of who fixes the price, the price only has meaning if it is based on what the physical market is willing to sell it for (with some obvious chaos in the transition). Just a guess based on what would make sense - but I realize COMEX rules might be drafted arbitrarily (in the interests of industry and a depleted commodity). If the paper market would stay annihilated, that might be a good thing.

The question is when and how will a new fix for physical be established. I might take several years of holding your physical silver to realize an exchange value for the asset. True, it will not go to zero, but it won't trade if the Comex stops fixing a price. If I had silver, I would be trading it for gold at these prices. The reasoning is as follows. Gold is the reserve asset of some big players in the world of economics and politics. The central banks hold gold as a reserve asset. The House of Saud sits on a huge gold hoard. The BIS backs gold. The people of India hold 13,000 tons in private hands. The US Treasury has 8000 tons. So, you can see when the dollar collapses and the savers of the world don't trust paper promises...it will be gold that recapitalizes trade and production of the world economy.

Yes, that is the question. I would love to see a detailed analysis of this (maybe I'll get more from fofoa). And I agree, silver can never be a reserve asset due to it's supply fluctuation with industrial demand. And I do think that the central banks keep track of a "phantom" gold standard for a day when a new gold-backed currency will be rolled out and we can start this pony show again. Adrian Douglas (GATA) has computed it to be $50K-$60K per gold oz based on US gold and M3 money supply. He estimates that GLD is leveraged 45:1 (I haven't seen the analysis), and from this, gets close to the same dollar figure. But a new gold-backed currency (and pony show) may be a backup plan. It seems clear (and I may be wrong) that the PTB have been moving in the direction of all-electronic currency (considering RFID tech and discrimination against cash). The intent would be to make slaves of the people and wipe out the meaning of a gold standard. If this plan were to see gradual implementation, I could envision an exploding black market in cash and gold/silver. This may happen as well if a collapse is "allowed" to occur and the value of the dollar is trashed. A black market might be a good thing since it has been referred to as the closest thing to a "free" market as any. In this case silver might play its traditional role in relation to gold (at 15:1). These are just some of the thoughts I've had. But it sounds like what you are saying is that the dollar is in a controlled collapse that, in effect, pays the debts and rips off the savings up to the point where world recapitalization occurs through a new currency backed by gold (in some way). The risk to silver in this process would be great.

Silver will be seen as a commodity. It is has industrial uses and is consumed. Its commodity value depends on supply and demand. It will be held as a monetary reserve asset by small holders, but the price is not likely to advance nearly as far as gold in the long term. Gold on the other hand, has no industrial uses. It is not consumed and the total above ground supply increases by 1 to 2 percent per year. This fact makes gold the reserve asset of choice. It is not subject to supply and demand like consumed commodities. It cannot be created by the governments or banks.

Turk and many others cite the industrial use of silver (and lack of supply) as an upward price pressure. Historical gold/silver ratios are also cited as upward pressure. Sounds like what you are saying is that there is no hope of silver regaining its wealth/monetary status - and that has already been decided.

The problem of fixing a price for exchange of physical gold when the LMBE paper gold pricing mechanism fails will be assumed by the Bank for International Settlement. They will open a physical gold window with a price balancing debt instruments currently used for saving. The debt instruments denominated in dollars will likely suffer a drastic haircut as they say in the event of default. The system will not allow default, but at present the Central Banks are making all debt good by creating base money with the stroke of a key board. This is rapidly debasing the value of each fiat currency unit. It is taking from the savings in dollar denomination to make the creditors whole.

And this process goes on as a kind of controlled collapse until the new gold-backed units arrive?

In the world to come, the fiat exchange function of legal tender will be maintained because it is convenient for daily buying and selling, but those who produce an excess above their immediate needs will demand gold as a savings vehicle. No one will trust a government fiat denominated promise to pay for generations.

And then the show repeats ...

I know Max Keiser and he is a nice fellow, but keep in mind, selling “wolf tickets” is how he makes a living. We were not educated about money and economics and particularly monetary history. The system is designed to take advantage the uninformed. You can find very good information on precious metals, monetary theory and history at http://fofoa.blogspot.com/. It will require time and effort to read the archive. Good luck searching for a safe haven in the monetary storm enveloping the world now.

Thanks go2.

Note: The above comment is based on the thinking and feeling of my life experience. I have sketched possibilities for your consideration. Remember, predicting the future is not Newtonian physics.

Understood and much appreciated go2. And don't feel the need to respond if fofoa is the first order business for me in this.

 

[meta-agnostic]

For what it's worth, it looks like plans to buy silver partly in order to stick it to JP Morgan are starting to go mainstream. At least if articles linked off of coinflation.com can be considered "mainstream".

http://dailyreckoning.com/j-p-morgan-and-the-great-silver-caper/

Furthermore, the kinds of folks who tend to buy gold and silver are also the kinds of folks who have contempt for Wall Street…and for Wall Street banks like J.P. Morgan. So it should come as no surprise that a grassroots campaign has formed – the sole purpose of which is to punish J.P. Morgan for its attempted manipulation of the silver market.

These videos are also pretty informative and funny:

http://www.youtube.com/watch?v=Gl47z2g2EvI

http://www.youtube.com/watch?v=I0mhX9hpq3g

The first one does sort of turn into a commercial for silvergoldsilver.com at the end, which is where I found the second one.

As of this post silver is at 28.40 USD and gold is at 1380.70 to help with historical perspective if you're looking this up later like I did. Certainly a reflection of the times we live in and ahead of us as well as a possible opportunity to benefit personally for those able and willing. As always, important to keep things balanced. ;D