Our friend Ned Naylor-Leyland of Cheviot Asset Management (who advised SD readers in June of the imminent launch of an ALLOCATED physical silver exchange in Asia) was on the Keiser Report today discussing unallocated versus allocated gold and silver bullion, and how permanent backwardation could be an omen of a total meltdown in the precious metals market.

Naylor-Leyland discusses MASSIVE physical strains in the silver market, as evidenced by 2 large silver purchases in London (5-10 million oz range) which the LBMA is REFUSING TO DELIVER OUTSIDE OF THE LBMA SYSTEM!!




  1. this is my first post here, but i have been visiting for at least a year, wanted to say this site kicks the crap out of all other pm’s sites. i’ve noticed along with all of the deserved exuberance about silver going up and its fundamentals being strong that we’re not talking about the dollar move we’ve just witnessed and why that is happening. history says to me u.s. dollar index is moving then so is the silver price just wanted to see if we think thats a trend that is going to extend into the fall with the metal gains. i was just thinking it might take something like a sharp dollar move to get the optimism trade back after the slam downs, it looks like we’re moving quickly into a technical bullish short term trend. my feelings are: the dollar is the biggest bubble in history along with it’s many devices and derivitives, that silver may be the most undervalued asset, but where do these things sync up? i have all my money in physical silver coins and bars, however, i recently left my employer to seek greener pastures elsewhere. i had to sell like 150 oz into this market already, (which hurt bad by the way.spiritually speaking) i’m just trying to figure out why they’ve dropped silver margins when i think it’s obvious the bernank has full control over the value of the usdx at least for now. unless, for some reason they want metals gains, could it be tank time for the dollar? is what i guess i’m really saying.

    • Keep posting savesilver.  SD is becoming the home to many a thoughtful poster like yourself.
      Dollar has separated from PM’s. Not total separation, I would put it at 70%.  Both are moving for different reasons.  A weak Euro drives the dollar up.  This is a problem for the Fed as they want just the opposite to stimulate U.S. exports and create jobs here. 
      PM’s are the buy of a lifetime.  Gov’t manipulation has suppressed the paper price and thus the physical price.  All indications are that may be ending, especially for silver.  We’ll have to see, though, as the PTB have held on longer than most of thought they could. 
      Dollar is not in as much immediate trouble as you would think.  Realistically, the dollar is backed by the full force and might of the U.S. military.  No one else has 12 carrier battle groups to enforce their will globally like the U.S. does.
      The Fed has a few more arrows to fire to keep the Keynesian dream alive for the time being.  Talk of QE-3 is all misdirection.  Truth be told we are on QE-67 or so.  QE to infinity as Sinclair says.  Look for the Fed to go to negative interest rates on bank reserves. 
      The velocity of money is key and people over look it.  It’s at depression levels.  One way for the Fed to step on the inflation accelerator is to push the $1.5T in bank reserves out into the real economy.  With the 10:1 fractional banking multiplier effect we are looking at $15T.  That will make PM prices soar.  Add a short squeeze in physical silver to that mix and it gets really interesting just how high physical silver may go.

    • That’s probably true.  I suspect the powers that be are also a bit sensitive to potential attention coming to the CFTC’s so-called silver investigation.  Afterall, it was expected that an announcement of one form or another would be coming by September and having silver margins reduced conforms with a general desire to paint an overall picture that the market isn’t abused by JPM, and that the CME isn’t too biased with it’s margin requirement decisions. 
      As to your other post, a Rosseta Stone of sorts to consider is how the US credit market fits into the picture.   The Fed and Treasury can’t control the long-term trend of the dollar.  When the US credit funding needs come under greater pressure as we are seeing right now on account of international buyers backing off, the Fed is forced to buy more of the Treasury’s issuance, monetizing the debt and adding to the PM sector’s bullish fundamental picture.    (Sorry if this is already covered in the Naylor-Leyland piece;  I haven’t tuned-in yet but will watch it now)
      On a related note, gold and silver often go through upswings when the dollar is benefiting from safe-haven buying too.  The dollar/PM correlation isn’t always consistent, and that fact is not widely understood because the media does a horrible job reporting on the PM sector.
      Welcome aboard 🙂

  2. Hi savesilver.
    OK just some thoughts from a guy who’s also into Ag though perhaps not as heavily as you are (most likely because I have less FIAT to spend):
    First of all, yes I do think it’s about the demise of the USD as world reserve currency (as per the petro-dollar) and yes the euro is scripted to die first. Well, I’m not all to sure if the end play will result in a dead EUR. Though I hope it will and we in Europe get our brains out of Goldman’s ass and return to a stable EMU with national currencies. Will there still be fraud there? Yeah of course. But its destruction would be limited simply by the way the whole thing hangs together. As it stands now, successful fraud anywhere is successful fraud everywhere.
    Now where does that put the metals. Be assured that the overwhelming part of the elite only think gold if they think outside fiat money at all. Some smart asses will be into silver. It’s gonna blow when the paper blows (and my lower belly tells me this will be *after* the much more leisurely manipulation on the gold market burns down because over there the paper crumbles at last), It might be much earlier, but either way silver is vastly underpriced and one way or the other that’s going to pop into view at some point.
    When? Cry me a river. Should have been in 2008, might take until 2020 (I doubt that). But it will at one point crash against paper prices and then the physical market5 get established and it will go 10+ per week. That’s what I think will happen.
    Best, and on behalf of (I hope and expect) also the other SD regulars, welcome!!

  3. savesilver, you’re correct. Paper of ANY description is ONLY viable to the extent it’s used. With ‘the public’ having vacated the commercial paper-metals markets, it’s ‘extinction’ is in an obviously advancing process (besides, without ‘the public’, bankers have to resort to financial cannibalism), so luring them back ‘in’ must be an extremely high priority for their owners and operators. Also, the banknote itself, is (ever too slowly) being recognized as a self-destructive instrument through constructive design. As that fact dawns on more and more of the ‘sharp pencils’, it too will fall into dis-use. That’s already happening to a great extent (albeit instinctively) because ‘debt saturation’ is reversing the ‘normal’ course of currency creation necessary to offset interest constantly accruing on it.

  4. welcome to the post savesilver.  Silver should hit a critical shortage in short order.  It’s popularity is increasing exponetially and major countries are buying as much as they can in the market or mines.  Think China.  Patience is well advised along with a regular and steady purchase of silver.   Or go all in at this price of you have an IRA, 401K or a stack of FIAT in a brokerage.  Ann Barnhardt is dead spot on that our money is not safe in a brokerage or even a money center bank with a broker desk.

  5. Thanks for responding you guys. As i see it, metals markets are way too depressed, to a point where a truly rational observer from another planet would see that, and as these prices move, so will the dollar in my opinion. there’s a national security reason for manipulation as i’ve read from ted butler lately, and what i’m thinking is, the banksters worst fears may come true if the metals find true value it is the end of fiat. So, if that is the case, a rise in metals will cause a commodities bull to explode much more than we’ve seen. drought,war,metal mania means to me that cereal crops, energy, and interest rates have to all go up. If they lose control of their scheme it should have far reaching effects globally. Does anyone think that we will see a overnight devaluation of the currency? The feds are now buying lots of hollowpoints for something afterall.

  6. I also wanted to say something about QE, to some extent I see that it worked, just in the way they’ve been able to use it like playing a bad hand in poker, they put the terminology out there as a trick in the first place, it should have been called debt monetization. So, when operation twist comes out or they start overtly purchasing treasuries en masse which everyone knows they must do, then the markets are to stupid to figure out the name game they’re playing. I say that, to say this, there will come a time for QE3 or some moment where the fed will once again overtly announce that our credit is so poor and our rates so low that we are going to counterfeit our way to prosperity. At that point, it will be a overnight devaluation forced by the markets.

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