26 Oct 2011

The Beginning Of The European Endgame

ECB Bond-Buying Should End With New EFSF, German Motion Says

I think this is one of the most important bits of news on the day. This and the fact that the Dutch finally said something - and it wasn't positive.

I have been arguing that the solutions create contagion rather than prevent it. I've also argued that the ECB and EFSF and to some extent the IMF are all the same pools of money.

Now that Europe has actually tried to do some calculations, which it is apparent that up until last week, they hadn't done, they are coming to the same conclusion.

On Friday the "haircuts" on Greece get serious. No more bogus high coupon principal protected notes - but real notional reductions of 50 per cent or more.

I believe the ECB has a portfolio of 55 billion of Greek debt. If average price was 80 then that is a 16.5 billion actual loss.

ECB, unlike our beloved FED, doesn't want to just print money so they make a capital call on their members. Yes, the same members that back the EFSF.

How many of those members even remembered the ECB can call for additional capital (it's why they are so happy to employ the double down don't frown trading strategy).

The terms of ECB capital calls are worse than EFSF because they are joint and several. If countries don't meet their obligations they don't go away, they get passed to another country.

So as ECB loads up on PIIGS debt and losses or haircuts would be paid for by the non problem countries - in addition to their EFSF obligations.

Germany maybe has learned not to overextend and is scared to pile this (previously ignored) liability on top of it's EFSF guarantees. At least EFSF is something they have control over.

France I think was planning on loading up the ECB with so much debt they would just capitulate and print money.

Other people have more knowledge of the ECB but the ECB has things in common with the FED but also has similarities to the EFSF. I think this is an important turning point for the politicians in Germany and other prudent countries and they are trying to limit how much they can lose in this last ditch attempt to avoid making countries and banks and investors pay for their mistakes.

From Bloomberg:

ECB’s Need for Bond-Buying Should End With New EFSF, Bundestag Motion Says

German lawmakers are set to vote on a non-binding call for the European Central Bank to end its secondary-market bond-buying program once the enhanced European rescue fund is enacted,

The joint motion, agreed on by the government parties and the main opposition in Berlin today, sets out terms for the lower house, the Bundestag, supporting the European Financial Stability Facility in a vote tomorrow. It “notes that the need” for the ECB to continue its secondary-market program ends with the new fund’s enactment and urges Chancellor Angela Merkel’s government to “respect” the ban on central-bank credits as well as primary-market purchases by the ECB as the EFSF is set in stone.

“For us it was a condition that the Bundestag, respecting the central bank’s independence, has a clear position: no more unconditional debt-buying by the ECB,” Carsten Schneider, the opposition Social Democratic Party’s budget spokesman in parliament, told reporters after a budget committee meeting.

The motion sets criteria to which Merkel must adhere when she goes to Brussels after the EFSF vote tomorrow for a second European summit in four days. The budget committee or the full chamber must be allowed to vote once more after leverage models have been transformed into guidelines for the fund, according to the text. It also stipulates that systemically important banks re-capitalize by June 30, 2012.

‘Non-Standard Methods’

Merkel said earlier today that Germany opposed the inclusion of a reference to the ECB continuing its bond-buying program in a draft text prepared for tomorrow’s summit. While officials are still working on the text, “the wording doesn’t state that there should be more secondary-market purchases, but rather that the non-standard methods of the European Central Bank could be pursued further,” she said.

The motion, drafted by ruling coalition lawmakers and distributed to reporters by Merkel’s Christian Democratic Union, aims to attract the broadest possible support from the opposition Social Democrats and Greens in tomorrow’s vote by seeking to curtail the potential demands on German taxpayers of the enhanced fund.

These include ensuring strict adherence to the EFSF’s guarantee framework, with a cap on German guarantees at the existing level of 211 billion euros ($293 billion), and ruling out “optimizations” of the EFSF that can alter its framework treaty.


25 Oct 2011


Oftentimes perception, and not reality, rules the day with the thousands or millions of speculators placing short term bets with assets like silver. These perceptions are particularly strong given that paper players in the silver market often control the price in the short term (6-8 months), since there is so much more paper silver than physical metal out there. As I write this, we are seeing the unwinding of quite a bit of speculative, paper activity at the COMEX, with open interest numbers (meaning the number of players in the casino) lowering to levels just above where they were in the fall of 2008 (when silver was below 10 dollars). The price of silver has fallen, but as far as I’m concerned, there is no fundamental reason for silver to be so cheap. Instead silver fundamentals are badly overshadowed by misconceptions (or outright lies) about silver. Here are five common myths about silver that I bet many speculators still believe are true:

1. Silver is an “economically sensitive” metal

During the recession of 2008-2009, the CPM Group estimated that silver demand from photography, jewelry, and industry dropped by roughly 80 million ounces (CPM Silver Yearbook, p.69). Mine supply also increased by about 30 million ounces, along with a 15 million or so increase in recycling. So in order for the price of silver to remain stable (theoretically), you would need investors to make up this roughly 100 million ounce difference, which is exactly what they did. Given the fact that people understood the need to buy precious metals during a banking crisis, investment demand for silver increased by nearly 100 million ounces at the same time as demand fell and other sources of silver also increased. (p.11)
Over the course of 2008 and 2009, the silver price more or less remained stable, even as it saw wild swings induced by paper trading. So, during one of the worst recessions in modern memory, real, physical demand for silver cancelled out declining industrial use. An important point to remember when someone tells you the silver price is destined to go down in the next recession.

2. Silver coins and bullion are more plentiful than gold

In fact, it is the exact opposite. Being generous (and using data from the CPM Group as well as the Silver Institute) there are maybe 1.4 billion ounces of silver coin and bullion in the world, versus roughly 3 billion ounces of gold coins and bullion. Yes, it is true that recently about 80 million more ounces of silver bullion/coins are produced each year than gold ones, but that still means that it will take over 15 years before the silver stockpile in the world even equals that of gold, let alone becomes greater. So why is the price of silver something like 50 times cheaper than gold? Ask the paper speculators above.

3. The high price of silver will drive down demand from industry

This one has had no basis in fact for the period from 2000 to 2010. During that decade, industrial demand, according to most estimates, basically remained flat (GFMS World Silver Survey, 2010). This is amazing, when you consider that the price of silver went from 4 dollars to over 20 in that period. But because silver is used in such small amounts in things like electronics and solar panels, increasing silver costs have yet to dampen demand for highly desired toys like computers and cell phones. And many silver experts believe that such demand will only increase in the years ahead. You should realize that a rising silver price does not seem to dampen industrial demand.

4. At the right price, billions of ounces of silver will get recycled

Many do believe that there are nearly 6 times as many ounces of silver jewelry (and silverware) than gold jewelry in the world. So you might think that there is a lot of silver that will get melted down someday. One problem with this argument is that much of this silver either; 
a) costs way more than even the current bullion spot price and 
b) is held in very small amounts all over the world by over 1 billion people (oftentimes women). They won’t care to sell for a very long time—if ever.
But there is an even more important point here. I bet most people who claim to follow precious metals don’t realize that as of 2010, we had yet to see more silver recycled than during 1980. That is thirty years of silver recycling more or less going nowhere, even as the price of silver spent more time above 20 dollars an ounce in 2010 than in 1980. I am going to be generous and guess that we will finally best the old recycling high this year in silver (at over 300 million ounces). But in a world where 300 million ounces of silver is only 10 billion dollars, and in a world where investors are slated to purchase nearly that much silver in physical form over the next couple of years, you really have to wonder why anyone would think there is all of this silver just lying around ready to be brought to the market to cool off silver’s price. And given what I said about how impervious industrial demand is to silver price increases, a lot of whatever silver jewelry gets recycled will be used and consumed by industry (even assuming that preservation techniques get better as the price goes higher.)
I also would not expect mine increases to somehow meet demand: few industry experts believe silver can increase more than 4 or 5 percent a year (roughly 50 million ounces, or less than 2 billion dollars), especially when nearly 80% of silver is a byproduct of metals like copper, lead, and zinc.

5. Retail silver investors are fickle/ there is no plan to remonetize silver

This myth had some basis in truth, at least according to the experts who tracked silver buying and selling activity in the 1980s and 1990s (such as the CPM Group or Silver Institute). Many agree that retail investors (probably following the lead of governments) sold far more silver than gold during the twenty years between 1985 and 2005. Probably to the tune of over 1 billion ounces. So many felt that silver investors were flakes who really didn’t have the staying power of gold investors. Or, as I mentioned above, it may have just been the case that average investors followed the lead of governments, since those governments dumped far more silver than gold during the same period (gold is the only precious metal held by central banks, in addition).
But in recent years, I am struck by how many proposals there are like the one from Hugo Salinas Price in Mexico attempting to bring back silver coins into the market in his country. Then we have all of the state legislation in the United States aiming to bring back both gold and silver into economic transactions. Remember, silver is perceived to be the money of average people (even as it is rarer than gold) so any grassroots effort to bring back precious metals into everyday transactions will dramatically increase silver’s value. We have already seen the amazing turnaround in silver retail investment buying over the past few years (hundreds of millions of new ounces) and I think some people are slowly waking up to how undervalued silver is. But believe it or not, many, many more have yet to do so.

Don’t Be Fooled By Silver Market Myths

As I said above, I understand that fundamentals often have no place in markets. This is why so many traders focus on chart patterns, or volume indicators, or anything other than the underlying, real-world reasons for an asset to move up or down in price. You can also see the lack of interest in fundamentals from those large speculators who believe that rumor-mongering is a safer way to make money than actually focusing on legitimate distortions in the market. You might be surprised how much money you can make from simply playing games, or from manipulating others’ emotions—at least in the short term.
In the end, of course, I don’t think gambling or trading wins out. Yes, there are those few great traders out there, just like there are a few great gamblers around. But there are far more people who are simply the sucker drawn into the great casino called “the market.” This is a sad commentary on how our current financial system incentivizes reckless, speculative behavior. But that is just the way our world works — at least for now.
However, every day we see more evidence of the need for retail investors to truly diversify their portfolios with an asset that is set apart from the stock/bond market or banking system. The world is not going to end, but gradually, perception will come around to the cold, hard facts that currency debasement, financial repression (artificially low interest rates), combined with fiscal austerity are here to stay. In an environment where measures such as quantitative easing are really only easing the transition to a downsized economy (at best), people will be looking for those assets that never took part in the bubbles associated with the world before 2007 in the first place. Those assets which don’t need leverage to move higher (even though leverage is a part of the silver market), or those assets which don’t rely on endless consumption or indebtedness on the part of the consumer in order to become more valuable.
You may think silver will keep getting cheaper, and you might be right in the short term. But in the long term, this price correction really will be a blip on a screen, and when silver’s price one day explodes higher again, you will kick yourself for having bought into misconceptions like the five myths regarding silver.

24 Oct 2011

It’s not a conspiracy.... The Elite control the global economy!

A man dressed as an "evil banker" stands outside Saint Paul's Cathedral in central London as protestors gather on October 15, 2011 (AFP Photo / Leon Neal)
A man dressed as an "evil banker" stands outside Saint Paul's Cathedral in central London as protestors gather on October 15, 2011 (AFP Photo / Leon Neal)

Bankers really do control the world! That’s according to Swiss researchers who, in an exhaustive scientific study, mapped out a blueprint showing the real architects of global economic power.
From freemasons to the Council on Foreign Relations to Bilderberg, the belief that secretive groups control the world’s economic and political system are quite possibly as old as human civilization itself.
But while Occupy Wall Street protestors may be slightly exaggerating in calling themselves the 99 per cent, a recent study conducted by the Swiss Institute of Technology in Zurich shows that they aren’t too far off the mark.
Drawing from a 2007 Orbis database, which lists 37 million companies and investors spanning the globe, the researchers focused on 43,000 transnational corporations and the share ownership which connected them. Based on their analysis, the Swiss team found that a core of companies, the majority of which are in the banking sector, yield excessive power over the global economy, the weekly New Scientist magazine reports.
Within this group, 1,318 companies with intertwined ownership structures were on average connected to 20 other companies.
Representing some 20 per cent of global operating revenues, the study also shows this group of 1,318 controls the bulk of the largest blue chip and manufacturing firms. In terms of the real economy – the part which produces actual goods and services – they take in some 60 per cent of global revenues.
The team was further able to break down this group into what they described as a “super-entity” of 147 companies that controls some 40 per cent of the network’s wealth.
"In effect, less than one per cent of the companies were able to control 40 per cent of the entire network," says James Glattfelder, one of the researchers behind the study, as cited by the New Scientist.
And when it comes to the top 50 groups within the super-entity, more than a few would be familiar to those who have been camping out in downtown Manhattan over the last month.
Bank of America Corporation, Morgan Stanley, Goldman Sachs Group Inc, Merrill Lynch & Co Inc, and JP Morgan Chase & Co were included among the top 25.
Quick to dismiss criticism that they are merely concocting another conspiracy theory, Glattfelder insists that their research is evidence-based.
"Reality is so complex, we must move away from dogma, whether it's conspiracy theories or free-market," says James Glattfelder. "Our analysis is reality-based, "he said, as cited by the weekly.
Money makes money
The most recent study of the Swiss researchers builds on past economic theories which also recognized such systemic concentrations of wealth.
In 1906, an Economist named Vilfredo Pareto discovered that around 20 per cent of the population in his native Italy controlled around 80 per cent of the land. This observation has come to be known as Pareto's Principle.
Pareto also found that while individual ratios of wealth and control might vary from country to country, the actual distribution is always the same. That is to say, natural wealth, regardless of human effort, tends to accumulate rather than spread around. That accumulation leads to wealth condensation, a theory more commonly understood as the idea that money makes money. And if less than one per cent of the surveyed companies control 40 per cent of the network, it appears that a slim few have managed to concentrate an astronomical level of wealth into their few hands.
For the researchers, however, the issue of wealth concentration is less important than how deeply the network is integrated.
As the 2008 financial crisis has shown, when a relatively small group yields tremendous power over the global economy, their mistakes will ripple across the world.
Ultimately, those invested in studying the network which controls the bigger part of our world economy hope that through greater understanding, they will be able to make the financial system more stable.
For example, Yaneer Bar-Yam, head of the New England Complex Systems Institute, has suggested taxing firms if their interconnectivity becomes excessive in order to discourage risk, the New Scientists reports. Others have proposed global anti-trust laws to help regulate the level of connectivity.
One question not answered by the study is just how much political power the financial elite are able to wield. John Driffill, a macroeconomics expert at the University of London, told the New Scientist that the interests of 147 companies would most likely be too diverse to sustain collusion.
But while the capitalist network which controls our economy might not be an active conspiracy, they will inevitably have some interests that correspond. The desire to fight any attempts to regulate the network most likely remains a point they can all agree on.


Government is a Monoploy of Force- Doug Casey

An excerpt of Doug's musings on why "the problems we're facing are 100% caused by the US government" - from the recent Casey/Sprott Summit When Money Dies.

Listen to Doug's complete summit speech - plus those of more than 27 renowned financial experts - from the comfort of your home. More than 20 hours of audio recordings on CD or MP3, including the experts' top stock picks. Learn more.


23 Oct 2011

Worried About Silver? Listen to Eric Sprott's Stump Speech

Hedge fund manager Eric Sprott's speech at this week's Silver Summit turned a room full of nervous precious metals owners into pumped-up silver buyers. Some of the highlights are posted below, and here's a link to a recent Financial Sense interview where he makes many of the same points.
  • The US Mint sells about the same dollar amount of gold and silver coins, which means it sells 50 ounces of silver for every ounce of gold. It's more or less the same story at GoldMoneyand Sprott Money.
  • Ten times more silver than gold is produced each year, and the ratio in the earth's crust is 15:1, so how can the price be 50:1? Expect a return to the historical norm of 15:1, which implies that silver will outperform gold.
  • The supply/demand picture has seen a 380 million ounce per year positive swing -- in a 900 million ounce market. Where is the silver coming from?
  • The paper silver markets trade a billion ounces a day and the world only produces 900 million in a year. The amount available for settlement of these futures contracts is something like 1.5 million ounces, ludicrously little compared to the amount of paper.
  • "On the physical side I'm seeing only buyers."
  • "There are a lot more people who can afford a one-ounce silver coin than an ounce of gold."
  • Gold will be a reserve currency and silver will also play a role.
  • "We tried to buy 15 million ounces of silver and had to wait three months -- and some of the silver we got was manufactured after we ordered. So there's not a lot of silver sitting on shelves waiting for people to buy it."
  • "Somewhere along the line some manufacturer will say 'I can't get the silver I want' and the jig's up."
  • People will prefer gold and silver to having money in a bank where there's tremendous counterparty risk. Three months ago Dexia was considered to be the best capitalized European bank and now they've been nationalized.
  • "You go to some of the biggest names who own gold and ask them about silver and a lot of them haven't even looked at it."
  • Central banks are selling gold surreptitiously.
  • "It's shocking how undervalued the junior miners are...Gold and silver stocks are growth stocks. They all have a plan to increase production dramatically. Small miners can start a new mine and double in size...The relative value of gold stocks will become apparent with time...The breakout, when it comes, will be very sudden."

Ignore the CRIMEX...It Is A Lie, ...A Cornered Rat, ...Soon To Be Irrelevant

Please excuse my recent absence...I have been on my Fall Vacation.

Suffice it to say there is little to comment on...other than the obvious:  The Gold and Silver markets are a complete JOKE.  They are rigged beyond any simple explanation.  It is IMPERATIVE that our crooked bullion bankers and their masters at the US Federal Reserve not allow Gold and Silver to expose the truth about the collapsing global banking system.

In today's world of financial travesty, with regards to Gold and Silver, ...black is white and white is black.  The more financial news fundamentally supports the prices of Gold and Silver, the more their prices rise, the more their price rises must be disrupted.

I have grown weary of the games the bankers are playing with paper representations of Gold and Silver.  I have purposely chosen to ignore them and, like the Asians, have chosen to simply accumulate PHYSICAL metal as sales prices present themselves.

Any effort to trade this pathetic example of a free market is not only foolish and stupid, it aids and abets the enemy.


If you have been patiently waiting for the CFTC to pass "position limit" rules to end this phony paper manipulation of the Gold and Silver markets...get comfortable, NOTHING will be changing with regards to position limits anytime soon:

Its All in the Fine Print: CFTC Ruling Gives Exemptions for Prior Positions Established in Good Faith, Final Position Limits Won't Be Determined for 12 MONTHS!
Before everyone gets too excited over today's 3-2 CFTC vote in favor of position limits in commodities, we need to examine WHEN the shorts will be forced to comply with the new rules, the size of the new position limits implemented, as well as what loopholes might be available to the cartel in order to continue business as usual. 
Those who have been skeptical of the CFTC should enjoy this as we examine the fine print of today's CFTC position limits regulations.

Exemptions to be given for prior positions without describing how or who qualifies for exemptions: Check.
No defined date for required compliance to short positions: Check. (60 days from the time the term "swap" is defined)
No defined position limits to allow easy identification of whether an entity is in excess of said limits: and CheckNon-spot month position limits will be implemented AFTER ONE YEAR OF OPEN INTEREST DATA!?! Nice work guys!

So what are your thoughts Blythe, sure not as bad as that could have gone, huh?

Establishment of speculative limits on Referenced Contracts will occur in two phases:

o Spot-month position limits. Spot-month limits will be effective sixty days after the term "swap" is further defined under the Dodd-Frank Act. The limits adopted at that time will be based on the spot-month position limit levels currently in place at DCMs. Thereafter, the spot-month limits will be adjusted biennially for agricultural contracts and annually for energy and metal contracts. These subsequent limits will be based on the Commission’s determination of deliverable supply (developed in consultation with DCMs).

o Non-spot-month position limits (i.e., limits applied to positions in all contract months combined or in a single contract month). For the nine "legacy" agricultural Referenced Contracts that currently are subject to Commission administered limits, the new non-spot-month limits will go into effect sixty days after the term "swap" is further defined under the Dodd-Frank Act. These limits will be set equal to the levels described in the final rulemaking. For all other Referenced Contracts (that currently are not subject to Commission administered limits), the limits will be made effective by Commission order after the Commission has received one year of open interest data on physical commodity cleared and uncleared swaps under the swaps large trader reporting rule. The non-spot-month limits will be adjusted biennially based on Referenced Contract open interest.

Spot-month position limit levels will be set generally at 25% of estimated deliverable supply. These spot-month limits will be applied separately for physical-delivery Referenced Contracts and cash-settled Referenced Contracts in the same commodity.

Non-spot-month position limits (i.e., limits applied to positions in all contract months combined or in a single contract month) will be set using the 10/2.5 percent formula: 10 percent of the contract’s first 25,000 of open interest and 2.5 percent thereafter. These limits will be reset biennially based on two years open interest data.

Open interest used in determining non-spot-month position limits will be the sum of futures open interest, cleared swaps open interest, and uncleared swaps open interest.

Exemptions for bona fide hedging transactions based on the Dodd-Frank Act’s new requirements for such transactions. These exemptions have been broadened to include certain anticipated merchandising transactions, royalties, and service contracts in the final rulemaking to reflect concerns by commercial firms.

Exemptions for positions that are established in good faith prior to the effective date of the initial limits established by the regulations.

Establishment of account aggregation standards consistent with the Commission’s current position limits aggregation policy, including the Commission’s long-standing independent account controller exemption.

A position visibility reporting regime to assist the Commission in its surveillance program.

Acceptable practices for DCMs and swap execution facilities for setting position limits for the 28 Referenced Contracts, as well as position limits or accountability rules in all other listed contracts, including excluded commodities.

Full CFTC Decision can be found 

This is another example of abject failure by the CFTC to protect the US investing public from the crooked US banking system. Oh, I'm sorry...the CFTC is working with the banks to screw the public. Senator Bernie Sanders seems to believe so:

Senator Bernie Sanders to the CFTC: Exemptions to Position Limits Are Unacceptable 
It is my understanding that your current proposal contains major loopholes to allow Goldman Sachs, Morgan Stanley, and other major financial institutions to receive bona-fide hedging exemptions so that they would not have to abide by the positions limit rule. 

This is simply unacceptable and has got to change...

It is my understanding that under your current proposal, aggregate position limits would not go into effect until mid to late 2013 at the earliest to allow the CFTC to collect more data on the over the counter derivatives market.

Paper raids on metals just drive them east faster, Embry tells King World News
“We just had the PPI released today at .8%, that translates to roughly 10% inflation annually. This was a bit of a surprise because the mantra from the powers that be is that inflation is under control and if anything it’s moderating. The fact that gold was down so much in the wake of that release just shows the degree that they kick the gold market around in a counter-intuitive sense.

So much of this volatility has been created by this ridiculous paper trading on COMEX, I mean each time that this thing gets smashed, the premium on physical rises. So I think we are getting real close to this thing taking off.

You can only take a credit cycle so far. Once you reach the point where you can’t create credit productively you’ve got to stop. They (central planners) apparently have no intention of stopping. They seem to think that we can bail ourselves out by adding even more debt to a situation that is created by excessive debt that’s not serviceable. I just don’t think that’s going to work....

“What will happen if they continue to go down this road, which I believe they will, is we will head towards some form of hyperinflation. That is worse than a depression for the simple reason that it’s so corrosive to a society.

I mean a depression is horrible, but the fact is that 75% of the people are still working and at least there’s some sort of structure to the system. America made it through the depression in the 30’s, Zimbabwe is having a little more trouble coming through their hyperinflation.

The average German person [during the hyperinflation], he lost everything. In a depression you don’t lose everything. A certain segment of society does, but that’s the price that has to be paid for the excesses that went before.

The founder of Austrian Economics, Ludwig von Mises said, ‘You can either take the pain now and get it over with and start it up again or you can continue to kick the can down the road and what will result is a complete destruction of the currency system.’

I think this is a tragedy unfolding for us Westerners. I’m a Westerner, I grew up in North America and I love North America and what I see happening is tragic. The vast majority of our gold, which is real wealth, is going to be transported to the East before this is over.

These continued raids, these paper raids on gold that knock the price down, it just makes it that much easier for the Chinese to buy gold at a bargain price and they are doing it.”

From Ted Butler on the silver raid these past 2 days:

(courtesy ted Butler/Ed Steer)

I decided to steal another paragraph from silver analyst Ted Butler's weekly commentary on Saturday.

"Most disturbing of all of this deliberate day to day manhandling of the silver price, is that it is occurring under the constant watch of the regulators, both the criminal enterprise also known as the CME Group and the federal watchdog, the CFTC. Only they seem to be oblivious to what many can see with their own eyes. The regulators’ failure to perform their most basic mission should not, however, dissuade investors from owning silver. There has been a consistent effort by the commercials for more than a decade or two to discourage outside investors from buying silver. Despite this discouragement, owning silver has been among the very best of investments to own. Instead of fretting about the rotten daily price action, focus on why anyone would go to such lengths to make any investment look bad. The only plausible answer is because the commercials don’t want you to buy silver so that they can buy it in your place. That has been the long-term message from COT data. I wish we could snap our fingers and cause JPMorgan and the CME to cease and desist from their manipulative activities, but the most effective remedy is to do the opposite of what they intend you to do. Look to the real facts surrounding silver and not to the false-flag agenda of the crooked COMEX commercials."

Ignore the CRIMEX!!!  Buy physical Gold and Silver, buy it now, buy it before it all disappears to Asia.

And now...back to my vacation.  If anything, I urge everyone to take a vacation from the CRIMEX...

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...and we wonder why Gold and Silver are down

The U.S. dollar index erased early gains today and ended slightly lower as the euro reversed early losses and ended higher on easing tensions over European banks.

...and Gold and Silver are BOTH lower?

S&P downgrades Spain's debt rating on weak economy- AP

...and Gold and Silver are BOTH lower?

Foreigners Dump $74 Billion In Treasurys In 6 Consecutive Weeks: Biggest Sequential Outflow In History- Zero Hedge

...and Gold and Silver are BOTH lower?

Fitch may downgrade BofA, Morgan Stanley, Goldman- AP

...and Gold and Silver are BOTH lower?

For how much longer must we endure this bullshit?  The barometer of TRUTH must be set free!

Key regulator calls for limits on speculation in commodities markets

Exclusive: CFTC has votes to pass position limits

CFTC May Finish Curbs on Speculation Oct. 18, Gensler Says

SPECIAL REPORT: Position Limit Scenarios
By Bix Weir
The new Bank Participation Report for September has been posted and it looks like the top 3 or less US Banks that had offside silver short positions are closing in on being under the proposed position limit law just in the nick of time!

Here's the numbers

9/6/2011 = 23,859 net short

10/6/2011 = 14,388 net short.


Basically, the top 3 or less banks were able to cover 9,471 short contracts by orchestrating the latest silver slam from $42/oz down near $28/oz. Many suspect the majority of this short position resides at JP Morgan. That may be but if this is split evenly between 3 banks they are now under 5,000 contracts each or quickly nearing the proposed position limit formula of around 4,500 contracts at the moment. The timing of this short position being congruent with the expected position limit proves beyond a doubt that the many delays in implementation of this rule were orchestrated to give the banksters time to cover.

JP Morgan Covered 36 Million Ounces of Naked Silver Shorts Since Sept 6th 
From SilverDoctors
We have speculated previously that JP Morgan was attempting to extricate itself from its 120 Million ounce naked short silver position during silver's most recent sell-off. 
The CFTC's October Bank Participation Report seems to substantiate this fact.

On September 6th, 4 large US banks held 24,584 short silver contracts, the equivalent of a 122,920,000 ounce short silver position. 

The 4 large US banks' silver shorts had grown every month since silver's May smash-down, during which the same 4 banks had massively covered into the take-down and reduced their short position to 20,613 contracts. 
The latest CFTC Bank Participation Report for October indicates that these same 4 large US banks (chiefly JP Morgan and HSBC) covered 7,177 silver shorts or 35,885,500 ounces during the September silver smash-down! 
This means that effectively, JP Morgan and the other 3 major US banks (mostly JP Morgan) have reduced their naked silver shorts by approximately 29% during the latest PAPER FUTURES take-down. 
At 17,407 contracts, the naked short COMEX futures position has now been reduced to 87,035,000 ounces- the smallest short position JP Morgan has held since it acquired Bear Stearns' silver shorts in 2008. While this leaves JP Morgan and the other shorts in a much better position than several weeks ago when they held over 122 million ounces short, obviously this is still nowhere near a respectable cap should the CFTC ever actually implement position limits mandated by the Frank-Dodd act.

...and we wonder why Gold and Silver are down...IT'S OBVIOUS WHY!!!!!