Loading ...“Now for the dog of all dogs – SILVER – and I had to go back and forget the technicals and delve into the fundamentals. I’ll probably get screamed at but with all of the experts out there talking about the supply of physical silver being “tight”, I asked a friend of mine who is a mining engineer for a large base metals producer about silver and what he said was this: “We have tens of millions of ounces of silver in our dumps because when we are mining all of our lead, zinc, and copper, it would be too expensive to run it (the silver) through the circuit.” Well, maybe the depressed copper price is forcing some of these silver credits into the market so these miners can make their number. Maybe the silver royalty guys haven’t sewn up all that ancilliary silver that is bi-product. Here’s my point: Silver should NOT be crashing – JPM or NO JPM – unless there is a source of supply other than “paper”. It sure looked cheap in June with seasonality coming in at two or three standard deviations from the norm but it has been a disgustingly bad trade. Luckily, I used the October $20 and $18 calls as my leveraged “proxy” for silver and my exposure was at least “contained”. Whatever the case may be, it’s no wonder that Sprottie left the party for PL/PA (platinum/palladium) where the rigging is somewhat contained. I have found it far easier to trade the miners so from here on out, you’ll never see a silver comment from me EVER again. There are no “fundamentals” for ANYTHNG these days that I can use as a basis for trade analysis and the one commodity that defies all “published” data is silver. Having said all this, I took some qualudes and bought 100 SLV May $50 calls today. Then I read Hunter F. Thompson’s “Fear and Loathing on the Campaign Trail” for the seventh time. Then I kicked my dog. Timing is everything.”
and more worrisome…
“Dear Bill,
For a number of years I have worked under the assumption that Russia and China are in the hard money camp given their desire to topple and eventually replace the dollar. Whilst I think this is still their ultimate intention, it’s becoming increasingly clear they are not going to flick the reset switch until they have to. Speculation that the head of the Bank of China may be replaced by a more aggressive inflationist supports this conclusion which probably means that the current fiat regime will continue for longer than would otherwise be the case.
The Western gold and silver paper markets will still default at some point and this will force the reset but we shouldn’t assume that either Russia or China are seeking a reset as an objective in itself. The decline in Chinese inventories nonetheless bears watching because if there was any likelihood of a Shanghai default the Chinese would surely pull the trigger on the COMEX because they wouldn’t want the reputational damage of one of their exchanges being the first to fail.
Best regards
TW