Friday, May 6, 2011

Ben Davies Buying....

I hope everyone took advantage of the dip.....

Ben Davies is genius in my book...from King World News:

"Ben Davies called for a 3 to 5 day $15 decline in silver and that is exactly what happened. I wanted to catch up with the CEO of Hinde Capital to get his thoughts on where we are now in the silver market. When asked if silver is bottoming Davies replied, “As a firm we have covered all of our hedges on silver and we have started to accumulate physical silver. Let me add that this is the swiftest 30+% decline in this bull market. If you are a cash buyer of physical silver then you should now be accumulating silver. There is always a danger in catching a falling knife, but you have to remember that silver has intrinsic value.”

Click here for the rest of the article....

Thursday, May 5, 2011

Another Rate Hike......

As I had suggested in my article yesterday……..

From Zerohedge:

CME Hikes Silver Margins By 17%: 4th Hike In 8 Trading Days

Submitted by Tyler Durden on 05/04/2011 17:36 -0400

"Nobody could have foreseen this. Nobody. At this point there is nothing left to comment on what is a concerted action to "mitigate" any and all risk in the commodity market but could as well be classified as executive order 6102.5. While we were joking before that soon one will have to post more cash than an silver contract is worth, we are now forced to reevaluate this sarcasm."

In addition to this Goldman Sachs (if you can believe a word they say) and others are calling for a temporary reversal in the dollar which would put further pressure on the commodities. Luckily that should include oil. If the dollar rallies and oil doesn’t retrace we have big problems. That would mean that dollars are being sold at an increasing rate throughout the world. Typically that would mean silver and gold would rise but as you can see the paper market in silver is at this point controllable.

Remember, there are TWO markets in silver: paper and physical. There is a shite load of paper silver and the price is easily controlled through margin hikes. Most people in the paper market are not interested in physically owning the metal. They don’t even think there’s a problem with the dollar as our nation’s debt ceiling is about to surpass the GDP. You can only hike so high however before you destroy that market. As I’ve said before, when the Comex is going through the process of defaulting the paper price of silver will go down and the physical price goes up.

Apmex which has usually charged $1.29 in premiums over spot is now charging $3.79 in spot. Physical sellers tire of the Comex but they don’t make the rules.

Wednesday, May 4, 2011

Has the Silver and Gold "Bubble" Burst?

The powers that be of the world have been conducting psychological warfare on the plebeians since the dawn of time.

The Egyptian pharaohs had people believing they were either given the divine right to rule or they were demi-gods themselves. Do not defy them.

The Greeks and other Mediterranean state rulers had people believing that they were also the offspring of gods or that through the god’s divine inspiration they were given prowess on the battle field allowing them to rule.

This carried over to Europe where the plebeians were also duped into believing that “nobility” by blood was actually real and the divine king meme was carried on. Largely this thinking has faded away although the Brits seem to still be awe struck with their former master oppressors as evidenced by the recent hoopla after the “royal” wedding. Even in the Middle East and North Africa (MENA) the Arabs tire of the whole strong man, leader type who claims to be president when his entire family constitutes the entirety of the governmental ministerial positions. That’s called a monarchy dressed up as democracy, aka, autocracy. Or, a wolf dressed in sheep’s clothing.

Over time as you witness the actions of these “leaders” you realize that they are quite fallible and prone to the same mistakes and errors of judgment we all make and that indeed that most of them, the more powerful and greedy they become, act the fool even more. Eventually the illusion is cast aside and the “let them eat cake” attitude is discarded and the king and queen lose their heads. Unfortunately the typical plebeian has a short memory span and is lazy and quickly return to their old habits allowing the foxes to rule the hen house over and over. Sad.

So getting to the point, today the primary battlefield is in the realm of fiat currency. You know those federal reserve notes in your pocket (purse)? The line MUST be held or the battle will be lost. The line of course is the price of silver and gold. Fortunately for the modern day plebe, we are living in a time where the illusions are being cast aside and for a short while enlightenment will spread across the land. The masses are slowly but surely pushing the line further and further back. The battle is being won and the elite minority have been in retreat for 10 years now as the silver and gold clad weaponry of the plebeian army pierce the dark veil of ignorance of the masses letting in a little bit of light. Through the patch work of that dark curtain we can see the power elite storing away riches as they trade silver and gold amongst themselves. Along the line of the curtain we see hands extending through passing along worthless pieces of paper they call “money” and tell us that it is valuable.

This meme is dying but they would have us believe otherwise.

Within the past week the margin requirements for commodities and specifically silver have been raised no less than 5 times with another pending. The goal is to drive speculators out of the silver market to “control volatility”. If this is the reasoning why are they not raising the margin requirements on oil? How many people do you know that own silver? Why the impetus on that obscure metal? How many people do you know that drive a car and buy gas? How important is the price of oil to our economy? Obviously for reasons untold silver and gold are very important to the powers that be. They are the canary in the coal mine. As governments print more and more money the price of silver and gold rise. The more silver and gold the peasantry own the less likely they are to be shackled into debt servitude forever more. The more we own the less they can have. This cannot be. They must constantly wage war against our minds to “shake” us from our positions.

This morning we read the following from Zerohedge: WSJ Reports Soros, Burbank Selling Gold, Silver, While Paulson Sees Gold Hitting $4,000 In Three Years

An excerpt from the article: "The rumormill around who is buying and selling precious metals is getting more ridiculous than daily Radioshack LBO speculation. The latest comes from the WSJ which informs that based on "people close to the matter" Soros and Burbank are now dumping their gold and silver: "George Soros's big hedge fund, a firm operated by high-profile investor John Burbank and some other leading firms have been selling gold and silver, according to people close to the matter, after furiously accumulating precious metals for much of the past two years." Greg Zuckerman's conclusion, assuming a multi billion hedge fund will actually let its competitors know what it is doing concurrently as it is doing it, is merited: "Their selling suggested the sharp, nine-month run-up for precious metals could be entering more dangerous territory." Of course, something tells us that just like Goldman, whose prop desk has a nagging tendency to buy as its sellside "analysts" say sell, we would rather hold off until we see respective 13Fs on the matter. In the meantime, we fail to see where over the past week the central (pardon the pun) thesis has changed: namely that central banks will not print more linen/cotton when the time comes. And if the market is indeed starting to price in QEasing's end, then the deflationary scare will certainly see the RUT plunge and undo months of carefully executed (by NYU interns) POMO operations. For a Fed which equates the economy with the RUT, this is simply unacceptable."

You should be aware that last month George Soros funded and coordinated a meeting at Bretton Woods to discuss the future of our monetary system worldwide. The discussion would revolve around the use of an SDR (special drawing right) in which it would be partially backed with gold, amongst other currencies and perhaps commodities. The announcement of the selling of gold by the Soros fund would suggest that gold being part of the SDR system was a no go. We have no information on how that meeting went to my knowledge however are we to believe that gold is now no longer desired as a safe haven against the foibles of government and their money printing ways? I’m not willing to make that wager. Actually I am and I wager they will keep printing money and they will continue to go in debt and they will continue to devalue currencies to pay for that debt and the price of silver and gold will continue to rise. My wager is placed and I am “all in”. In the metals that is.

You should also be aware that at the last Davos meeting in January, George Soros announced that “gold is the ultimate bubble”. Now you can interpret that in a number of ways. I believe he meant that the gold is ultimately where all currencies will collapse, creating the ultimate bubble. If all the currencies of the world collapsed today into gold and silver the “prices” would stagger you. Of course “price” would become a redefined term. We would be speaking in terms of value. You would perhaps use one ounce of gold as collateral against a loan to purchase a house. Yes, one ounce of gold. Delving too deeply into that would be outside of the scope of this investigation. See the Fofoa blog for more on that. Dig deep there and do go, you will learn much.

Of course the media, shortly after hearing Soros announcement that gold is the ultimate bubble started touting the headlines that silver and gold are in a bubble and they were claiming the trade to be crowded suggesting that they should be sold. If you would have done so it would have cost you dearly. Shortly thereafter we learned that Soros had been buying gold to the tune of $650 million. And now after multiple margin hikes where the momentum of the metals have turned downward and sentiment has turned negative, Soros claims to be selling a small portion of his holdings? My belief is that he is trying to push the price lower for the ultimate set up. We may see in his next 13-F that they had indeed sold a small portion of their holdings but he will likely go on a spending spree the day after the report is filed with the SEC.

Who else is selling gold today? Not the Mexican government’s Central Bank! They just announced that they are buying 100 tonnes of gold. Again, from Zerohedge: Portuguese Gold Sale Urged By Senior German Lawmakers As Mexican Central Bank Buys 100 Tonnes. Add them to a long list of other Central Banks who are buyers.

Indeed, not only are they buying gold but Central Banks of the world have become net buyers of gold instead of sellers for the first time in over a decade. These are the insiders of the inner circle who dictate to the world what money is and is not. Will you be led to believe that gold and silver are not money? There are also rumors that the Indian Central Bank has been buying silver. China clearly stated that thy will also be diversifying their currency reserves into silver and in the Middle East it is no secret that they have been minting silver and gold coins.

Now is the time to be vigilant more than ever. When you view the actions of those claiming lordship over us those actions do not mix well with their words. Silver and gold may run down in price further yet but this is a gift to you. You can despair and think we are defeated or you can see through the veil and see that the powers that be are afraid and shaking. They are preparing for major currency dislocations and the best way to protect yourselves from such events is by donning your silver and gold armor. Use this as a buying opportunity to strengthen your family’s positions in these chaotic times. Cast aside your doubts and fears, do what others will not and you will be rewarded.

“The gods favor the bold.”
Publius Ovidius Naso Ovid

Monday, May 2, 2011

What happened overnight??

Many of you may look at the price of silver this morning and be alarmed. We took a huge hit overnight on top of some selling Friday as well. It's rather simple what is happening really so I'll keep this short.

I've told you all before that the closer we get to the point where lack of physical silver meets the point of excessive trading on margin, things will get chaotic. There is a lot of doubt that JP Morgan and the other bullion banks will be able to deliver all the physical metal that traders are demanding. There are also traders that are moving in on the trade because they know that there isn't enough physical silver to meet demand. Their hope is that they can get a 20-60% or more premium for basically forcing a default by the bullion banks. If the BB's don't have the metal they have to pay a premium to contract holders, it's a default. Simple. People are wondering when the "Comex will default....". Everyday.

The bullion banks have ammunition in their arsenal to battle these "speculators". They can raise the margin requirement. As it stands, any of us could place an order for a 5,000 oz contract on the Comex, the Globex, or Think or Swim or any other trading platform. 5,000 oz x $50 is $250,000 worth of silver. But trading with margin only requires you to put down maybe $11,000. So you could trade 5,000 oz's with $11K. Nice huh.

Now imagine if you own 100 of these contracts. You pony up $1.1 million and get to trade 500,000 oz's of silver, or $25 million worth.

And now also imagine that your trading platform, unexpectedly announces that they are raising the margin requirements. Instead of needing $11,000 to buy a contract you need $30,000. And you have to pony up immediately. It's not many people who are able or willing to come up with $2 million that quickly. They might have it, somewhere, but not in cash. So basically what they do is they force a huge wave of selling.

So what's happened......? Let's read this short piece from Zerohedge and get some clarification, shall we?

Think Or Swim Hikes Silver Margin To Double That Of CME

Submitted by Tyler Durden on 05/01/2011 23:29 -0400

On Friday we reported that MF Global hiked silver margins to roughly $25k per contract (following the CME's own two consecutive margin hikes of 9% and 10%). On Sunday night, not letting any public hysteria go to waste, Think or Swim follows suit and hikes the /SI margin to $30,037.50 and $6,007.50 for the /YI. At this point there is an outright scramble to get anyone with margin out of precious metals positions, which of course in the long run will merely reinforce the holding hands.

These margin requirements are signs of desperation. Nothing more, nothing less.

We are in the midst of turbulent times my friends. The very nature of the monetary system of the world is changing before our eyes. I cautioned a while back they we will see big pull backs like this. Do not question if you have erred for you are on the right path. History and sensibility are behind you; the wind in our sails. I assure you many will use this as a buying opportunity to buy physical. That will simply exacerbate the problems that the bullion banks (BB) are having with trying to provide silver to the markets. We will have this chaotic to and fro until we don't. And when we don't, not many of us will be able to afford silver anymore. Of any quantity anyway.

I suspect we'll see a quick rebound as traders are over reactionary and don't really know the silver story. We'll see if JP Morgue and the bullion banks have any more tricks up their sleeves. They will want to ride this momentum Monday morning and force as many hands out as possible. The most likely thing they'll do is push some news that will be dollar positive. One reason I suspect this is gold has not pulled back much.

Fasten your seat-belts!!!!