Odds of COMEX Default Increasing Exponentially

A”default” can occur if too many longs stand for delivery.  This very well could happen and the likelihood has risen in just the last 2 trading days as open interest has increased rather than decreased.  If 10% of the longs stood for delivery in Silver, the inventory would be wiped out.  The fact that the “drop” in price was CAUSED by new shorts opening positions rather than longs scurrying away tends support the case that the long position is a resolute buyer with deep, VERY DEEP pockets.  If they hold in and meet the margin calls created by the price drop AND higher (18+%) margin requirements as of yesterday, the shorts and the exchange itself have a very big problem on their hands as the availability to deliver on the open interest just does not exist. 
If open interest does not decline after the drop in price and this latest margin hike (and maybe more to come) the odds of longs standing in a big way for delivery increases exponentially.

 

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Submitted By Bill Holter, Miles Franklin Ltd,:

When there are more buyers than sellers…the “price” goes up, when there are more sellers than buyers…the “price” goes down…right?  This is the way it works?  Or is supposed to?  As you know, we live in a world where nearly everything real has 2 markets, the paper market and the physical market.  Originally the paper markets were created so that farmers could “hedge” their crop and outright buyers or speculators could have access to the commodity.  This has morphed into a situation where the paper markets have outsized the real physical markets and become more important to “price”.  It is a “Wag the Dog” scenario where in Gold for example there are at least 100 “paper” ounces for every real ounce (thank you Jeffery Christian for this admission) and the paper markets have “made” the price for years now.  We knew all of this before and what has happened since last Wednesday only supports this view and confirms it.

First let’s see what has happened in the paper markets.  The open interest in Gold went up during Friday’s trading by some 13,000 contracts while Silver dropped about 1,000 contracts, yesterday Gold open interest increased another 10,000 contracts and Silver increased by 3,500.  So, while Gold and Silver’s price was monkey hammered, the amount of contracts open actually increased?  How can this be?  Weren’t people “selling”, the price went down…more sellers than buyers…right?   Well yes, what apparently happened was that there WERE more sellers, the increase in open interest was initiated by “short sellers”.  Were the last 2 trading days an event where “longs” finally panicked out and sold, open interest would have gone down, it did not and in Gold’s case the open interest actually rose substantially.  The obvious fingerprints of what GATA has been saying for 15 years now are all over this move, it was a fake and “made” to happen!
Now let’s look at the physical side of the market, on Friday Miles Franklin did 116 orders, there was only 1 buyback, yesterday they did 90 orders with only 3 being sells.  So what is this “buy to sell” ratio, at least 30 to 1 buys over sells?  Does this sound like a panicked market where everyone wants out of the water?  We also can look at what other dealers are doing by going online to look at pricing and availability.  “Junk” for all intents and purposes is gone, the only thing left are the scraps that your local dealer has to sell as “bags” are not available and were last trading at $5 (20%) over spot on Friday morning.  Other Silver product has become spotty as to availability and premiums rose dramatically over the last week…low price in the physical market IS doing what it is supposed to do, it is bringing out demand and drying up supply.  But, if real demand has been exploding and supply is tight then how did the price get here in the first place?  It is obvious that the futures market “wagged this dog” BIGtime!
As I wrote yesterday, I can see the possibility of a force majeure in both Gold and Silver.  I should have clarified and written more correctly however.  A force majeure is when supply gets disrupted which the mine collapse in Utah could cause but not immediately as they can process existing ore, the Barrick situation pertains only to future potential production (which is sorely needed).  A”default” on the other hand can occur if too many longs stand for delivery.  This very well could happen and the likelihood has risen in just the last 2 trading days as open interest has increased rather than decreased.  If something like 10% of the longs stood for delivery in Silver, the inventory would be wiped out.  The fact that the “drop” in price was CAUSED by new shorts opening positions rather than longs scurrying away tends support the case that the long position is a resolute buyer with deep, VERY DEEP pockets.  If they hold in and meet the margin calls created by the price drop AND higher (18+%) margin requirements as of yesterday the shorts and the exchange itself have a very big problem on their hands as the availability to deliver on the open interest just does not exist.  
I will say this, if open interest does not decline after the drop in price and this latest margin hike (and maybe more to come) the odds of longs standing in a big way for delivery increases exponentially.  As for the physical markets, the longer they keep the “price” down the more and more physical metal will be gobbled up.  We were already extremely tight in the physical Silver market, the last 2 days price action has cleaned up inventory and left shelves nearly bare of Silver.  This is what you’d expect in a real market.  As always, Mother Nature will take care of price when availability is short.  Premiums have risen as supply dwindled.  I do not believe that the “price” in the physical market can stay where it is now for very long, otherwise we will have a supply “event” where there is none to be had…UNTIL price rises to entice sellers.  This low price will also add incentive to paper longs to stand for delivery if the physical price is far higher than the paper price.  It would simply be an arbitrage where COMEX Silver is purchased at one price and sold on the physical market for another (higher) price.  It very well may be that the COMEX is engineering it’s own demise that ends in a default because they so blatantly defied supply and demand in the real world. 
Regards,  Bill H.

Comments

  1. Harvey Organ thinks it might be the Chinese who are standing for delivery.  It would not benefit them.  They want cheap silver and gold price because they are still accumulating.
     
    I think it’s the Iranians.  They are going to hit the weak belly of the financial beast where it is most vulnerable.  We can thank the Feds and bullion banks for showing them how to manipulate price.  It’s cheaper to crash silver than gold futures market.
     
    As Kyle Bass warned, “Price will solve every thing” :


     

    • Harvey Organ thinks it might be the Chinese who are standing for delivery.  It would not benefit them.  They want cheap silver and gold price because they are still accumulating.
      There is really no way to know who it might be. 
      Unless you are a member of the Chinese ruling party, it’s impossible to say where they are in their accumulation plan.  If I remember correctly they were aiming for >6K tons.  Last year they “officially” imported just under 1K.  I also wonder if there isn’t coordinated efforts by Russia and China. 
      Further, how did Iran get into the paper markets… I was pretty sure they are locked out of them by sanctions.  I imagine time will tell who’s doing what right now… maybe.

    • Jim Willie has been reporting for a while that it is Chinese and Eastern entities demanding only physical settlement. Haven’t Iran got into the physical market by trading oil for physical gold from Turkey and by passed the sanctions. Which has pissed off the US no end.
      Which backs up Willie’s call that Turkey is creating a hub for physical gold transactions between East and West.

    • If the Chinese and Russians have finally accumulated enough metals to launch their regional gold backed currency then busting the COMEX would definitely help them by slamming the gold and silver derivative market.  Remember there is a Currency War ensuing and sometimes you must take casualties to win the battle.  Gold and silver have been currencies for the past 1,000+ years. A lot of Soviet Billionaires got Haircuts in Cyprus and who knows what type of revenge they will seek.
       
      Whether or not it’s the Eastern Block standing for delivery seem to be wild guesses but someone with deep pockets appears to be lining up.  Anyway we’ll see in a couple weeks as I’ve heard this type of commentary before and nothing happened.  Once again, it’s probably all smoke-and-mirrors so I’ll wait on the sidelines and watch. 

    • Proxies. Proxies. Proxies. Iran can carry out their acts through proxies.

      Folks, I’m just speculating like every one else.

    • Regarding the Chinese, do you think it matters if silver drops a dollar, and then they want to buy ?
       
      I dont think so.
       
      I dont think that price is that important. I think the Chinese want to convert their US Dollars into tangible assets, before all hell breaks loose, and their holdings of USD are badly devalued.
       
      On the other hand, they must proceed slowly, so as not to spook the market.
       
      I bet the Chinese are buying as much as they can right now, but not too much, to ensure the delivery and  not cause a Comex default.

    • “Which backs up Willie’s call that Turkey is creating a hub for physical gold transactions between East and West.”
       
      And likely making a VERY good living while doing it.  Hmmm… cheap gold could be an attempt to throw a wrench into this machinery.
       

    • “A lot of Soviet Billionaires got Haircuts in Cyprus and who knows what type of revenge they will seek.”
       
      We can’t know what they will do.  THAT they will do something, however, cannot be disputed.  When one is in their position, the one thing that they cannot show is weakness; and letting people steal from you is THE sign that you are either too weak or too stupid to stop them.  They cannot afford this.  They WILL do something and it will likely be something deliciously vicious.  Russians and Klingons have similar views in such matters.  ;-)
       

    • Your all forgetting the one factor that screws up everyone’s plans… the “Human Factor”.  Meaning it only takes one man/team to jump the gun thinking they are smart to throw a wrench in the grand scheme.  Example: See how slick and meticulous the FED was? Working quietly with the IMF and the UK to set up the “Bail In”?  That was supposed to be the HAIL MARY theft! the “OMG! The system collapsed! (And they all steal everyone’s money all at once, and LEGALLY!  But no… the thought and greed and power hungry forces were too much to contain over there in Socialist-land.  They jumped the gun, and revealed the play, which got coverage everywhere, pissing off Ol’ Ben who then threw in the towel saying he quits next year. (I can hear him cussing up a storm in his office!)  That was the play of the year to be pulled out at Super Bowl 4th down and 9 for the game!  Now everyone knows that play exist and are covering for it. ***HENCE THE HUMAN FACTOR***  Sure China wants to scoop up the most it can with calm markets; the markets are not calm now are they? so chances are they’re not involved.  GREED of bankers sitting up high in New York, laughing, sipping champagne with “God Complex”, now that is very REAL. They too with their little minds could have selfishly just collapsed the game that could have stretched out another year if played right. I’ve been reading of a UK bullion bank that was going to default, they didn’t have the gold, and this take down spared them another month; again small selfish minds to take the system down just to save themselves.  There are DEEP pockets holding long.  That just might be the Russians saying to China “Well, there’s nothing left on the shelves to hold out for… lets put her down and get it over with.”

  2.  
     
    “If something like 10% of the longs stood for delivery in Silver, the inventory would be wiped out.”
     
    Ah, but it gets even better.  If 10% will wipe out the Comex vaults, that would imply a 10:1 ratio of paper to physical silver.  According to Jeff Christian, that ratio is closer to 100:1.  The meaning there is clear.  If more than 1% of the futures investors stand for delivery, Comex will not be able to deliver.  They will  enter a “failure to deliver” on their futures contract promises.  Even the investors who do not want physical silver will be appalled by this, as it will prove that the futures system is a lie.  Those who do buy physical materials, silver as well as many other things are traded this way, will fear not getting deliveries that they must have.  The entire Comex house of cards will collapse at that point as the futures market disintegrates.
     
    My question for those far more educated in futures than I am is, “Has anyone done an in-depth study of the effects on the US national and world economies from a collapse in the US futures market?”.  Could it be that this is the detonator for the derivatives blow-up that many of us consider a strong possibility in the not too distant future?  Maybe.

    • Not an in-depth analysis, but… the entire system works on a spiderweb type structure. where ripples at one point reach all other points eventually.  Shake the web hard enough and the more fragile parts will break… and I imagine the derivatives are extremely fragile being leveraged to hell and consisting of monies many times the global GDP.  Considering a few insurance companies back in 2008 collapsing almost caused it… imagine what a loss of faith of this magnitude would be like. 

    • I haven’t done any in depth research, but I think we are aware that all markets are intrinsically attached and thus the US futures market is significant period. Is it not?

    • Don’t get your hopes up. Most futures traders can’t handle even margin increases, let alone any level of actual delivery.

      About those margins, did something happen there the past few days? These things cannot be spelled out clearly enough. Percentages here and there…what happened and when, and were there reasons given?

    • XC,
       
      http://www.zerohedge.com/news/2013-04-15/cme-hikes-gold-silver-margins-185
       
      the made men at the chicago mongoloid exchange raised margins for unkown reasons ( reason – to help put further downward pressure on the metals ).

    • Thanks, no idea why I did not get to know about this in the past days reading everything I could, non-stop.

    • I know the futures market is tied into the credit market and derivatives.  A small example would be that without the credit and leverage, stores would have to pay up front for supplies instead of getting them delivered, and paying the bill afterwards.  The complete disruption fingers out into everything! I don’t think there will even be INSURANCE for your car or house, or anything without derivatives.  Think about it, no one bought insurance in the 50′s. Everyone knew it was a scam, and expensive too.  It’s the spread of risk that lowers the insurance premiums through co-insurance.  Pretty much everything you know about modern life could change over night if the system implodes.  (Kind of reminds me of Logan’s Run with everyone stepping outside into a fresh new world)

    • “Think about it, no one bought insurance in the 50′s. Everyone knew it was a scam, and expensive too.”
       
      Yes, it was expensive but my recollection of the 1950s was that insurance salespeople made rather good livings at it, so someone must have been buying.  We lived next door to one.  He owned a nice large brick house with a beautifully landscaped yard and always drove a nice car.  I had a crush on his daughter, Jenny.  Such was life in the 1950s.  :-)

    • Did anyone bother to fact check this?  As of yesterday open interest for ALL SILVER DELIVERY months only represented a 4.7:1 paper to silver ratio.  Further examination that a vast majority of the open interest is in futures months two months out and beyond (i.e. longs that cannot stand for delivery today).  Most playing in silver have no desire to own physical.  

  3. The Long is the Fed, they will never take delivery, they want high fiat, low gold/silver.

    • Interesting theory, about fed being the party long.  If that were the case, I agree, they never would take delivery.   I wonder how likely this scenario is.

    • Yeah, what a mind blowing thought that would be:  The FED Short & Long through the central banks?  So in effect, no market at all? LOL j/k.  Doesn’t matter, they screwed it all up, the phyzz is hitting the fan, these prices are too low, everyone knows it, if the prices go up from here, people will buy more out of greed… sorry Ben, you screwed up this time, for the final time!

  4. I would love to see it, but can’t the exhange just offer them a cash premium and tell them to move on.
    Who wants to take deliverly when they know better, it could ruin their lifes, it’s not worth it.
    There are many good reason why no one takes delivery on the COMEX, I don’t see that changing.

    • zman is a Troll !!!

    • Yes, that is the case.  However, the foretelling of the great gold (PM) revolution will be when people want gold (PM’s) more than they want the Paper Chits… and when they realize they can’t get the gold (PM’s) from the futures market, there will be a rotation out of it, into the physical market causing a crash in Paper prices, but an explosion in Phyz prices.  What has been prophesied is severe backwardation in the gold (PM’s) futures market(s).
      I put all the (others) because I’m a follower of the FOFOA / Gold Trail readings which say gold will be the winner in the race for best wealth preserving asset.  But… no one knows for sure, silver may stick around too… we shall see, or maybe we wont.  Depends how fast it happens. 

    • @candianstacker : zman has made thoughtful comments going back well into 2012.  No one has to agree with anyone here, but trolls are usually not civil.  zman is civil and the comment above isn’t troll-like IMO.  zman asks a valid question (the answer: yes, cash premium bribes have been going on) and speculates with a reasonable observation.
       
      Heck, I think we should all be glad that with all the stuff that’s going on this week, SilverDoctors has actually been reasonably civil overall.  This is a great outpost in cyberspace.  Let’s all try to keep our heads and at least be nice to each other even when we don’t all share the same perspectives.
      * * * *

      And for those curious, I don’t think we’re going to have a default next week because the number of silver contracts standing for delivery so far isn’t high enough.  But one day, the COMEX will likely default on account of the same dynamic.

      April 25th is the next expiration date.  With another day or so worth of data, it will be easier to make a more clear call as to what might happen next week and I’ll be discussing this in the Friday’s radio program in great detail — if not sooner.

    • @FlyingWombat: At what level of Open Interest do you think there would need to be for a default in silver. Was it high enough when MFG went, I’m presuming that was why that debacle happened?

    • I agree, FW.  Not that we do not have our share of trolls here, of course.  ;-)
       
      As to SD… man, it has been a right royal PITA getting on this week.  Do we need to help SD with some cash or silver?  I’m up for that if it keeps the site up and running smoothly.  :-)
       

    • @Ed_B : yes, it has been difficult accessing SD all week…traffic is up about 3-5 fold with the smash-down.  About 1/4 million people just yesterday and today alone.  2 new servers are being built right now and will be load sharing, we hope to go live on them late tomorrow night, which should help with the site loading problems for the foreseeable future.  Quite a bit of an investment (particularly with another string of CC fraud at SDB), but the site couldnt handle the massive traffic this week has seen.
      Thanks for everyone’s patience and support!

      -Doc

    • @The Doc:   This is a GREAT site,so it is easy to see why you have become victims of your own success.    Glad to hear about the two new load-sharing servers.  Those should be a terrific addition to the site and MUCH APPRECIATED.  Thx for the reply, Doc.  :-)

  5. I’ve heard that assessment before.  ”If only such an amount of traders stand for delivery a default will occur” etc…are we there yet?  are we there yet?  are we there yet?  huh dad huh?

  6. Hi all. Forgive me if these links have been posted here and I haven’t noticed, but they are essential reading:
    I picked them all up from Turd.
    http://jessescrossroadscafe.blogspot.co.uk/2013/04/how-gold-market-was-crashed.html
    http://www.gekkosblog.com/2013/04/buy-physical-gold-now-discount-of.html
    http://www.resourceinvestor.com/2013/04/15/how-the-gold-market-was-crashed?t=precious-metals&page=1
    They are incredibly sobering. They will also make you want to bring physical pain to the manipulators. But they will also soothe your soul as you sit on the sidelines  with the real stuff. 
    You’re not trading, you’re not on margin, you’re not leveraged and you’re not in paper.
    Sleep soundly guys, very soundly, as shit is about to reign down. Peace to you all.

    • All very interesting.  The GG I read on zerohedge.  I liked the resource investor as well.  Thanks for the links.

    • @OrdinaryJoe: Any time my friend. Great resource ZH, I did see it there too, but eventually read it through Turd. The resource investor piece I found interesting as I’m not a trader, so a bit of insight that was fascinating.

  7. PS. You really couldn’t make this up!

  8. There was talk of people standing for delivery being paid as much as a 25% premium for cash settlement. Which is very possible, given the us government is propping up the crimex casino.
     
    It is of course unlikely we’ll see an event, but it will always be unlikely, until one day… it happens, which is why I’m glad I have my position.
     
    It absolutely cannot be argued that the chance of default is higher. Open interest is at or near record levels, and the fact that it has not plummeted in the face of this ( engineered ) meltdown says that the hands are trying to prove something and have some major deep pockets. I’m not sure iran would have the means to do this, howvever, china has a few US dollars they could waste before they become useless.

    • “There was talk of people standing for delivery being paid as much as a 25% premium for cash settlement.”
       
      If true, that would be one heckuva bribe… er, I mean incentive… yeah, that’s it.  Some of these traders might only be making a 5-10% profit on their deals, so an extra 25% on top of that is quite a whopper of a deal.
       

  9. What do TPTB have to gain from creating such a dangerous situation?

    • they are having to work harder and harder to keep their shell game alive, it is that simple. when you lie and lie, you need to keep compounding the lie until it implodes.

    • Ultimately they don’t. This is real time losing a grip of the situation. If you get a chance to read the three articles above you can sense the sheer panic of what has gone on, especially the third article. And it’s not over yet. The distortions in the system are unprecedented from all the FED funny money and the massive manipulation of all markets.
      I think Bernanke is due a ‘Scanners’ moment soon :)

    • “Ultimately they don’t. This is real time losing a grip of the situation.”
       
      Agreed.  The ONLY reason to create the current situation is to avoid something else that is MUCH worse.

  10. Forgive me for asking such a stupid question, but my skull is quite thick.
    If the COMEX defaults, then how will the price of PM’s be determined?
    How will people know how much an oz of Silver or Gold is worth?

    • I don’t know that I have the answer, but right now the vast majority of silver is delivered on the FORWARDS market, where pricing is both opaque, and higher. So that right there says we don’t need the futures market to survive.

    • It will be worth whatever people are willing to exchange for it. People will look to exchange forums like ebay and other physical trading platforms that are in the works to see what their silver and gold is worth.
       

    • There are other markets, like in china and london.  Then there’s always “I want to sell it for X, deal or no deal?”

    • @canadianstacker: agreed places like ebay will be used, but the question at that stage is, how long will the paper be worth trading the physical for?

    • AGXIIK also made a good point the other day that silver could become a Giffen Good.
      In economics and consumer theory, a Giffen good is one which people paradoxically consume more of as the price rises, violating the law of demand. In normal situations, as the price of a goodrises, the substitution effect causes consumers to purchase less of it and more of substitute goods. In the Giffen good situation, the income effect dominates, leading people to buy more of the good, even as its price rises.

    • My 2 cents is it would be pegged to current price at default with news that it’s only temporarily and the bullion would be delivered to all outstanding parties within 60 or 90 days.  So basically price fixing for a period of time until everything is back in stock however we all know how that works.  The premiums will soar sky high!
      A silver 1 oz coin may only be worth $24 according to spot but expect a 50% to 100% premium on that coin. 
       

    • LBMA London Fix.

    • Ebay will be the new pricing mechanism.  LOL

    • YOU will decide and determine what the price is.  Because you will make an offer  to buy, or accept an offer to sell….and your tusks are thicker…

    • Possible, but the LBMA and the COMEX are cut from the same corrupt bolt of cloth, under the influence of the same group of overlords. Doubt that if one broke, acceptance of the other would be seamless and unquestionably accepted worldwide.

    • “If the COMEX defaults, then how will the price of PM’s be determined?”
       
      Hopefully by competitive bidding at auction.  If that ever happens, we will all know that REAL price discovery is in effect and not merely talked about as an ideal.

  11. @Jccjktk – that’s what I meant by “whatever” people are willing to exchange for it. It will be very interesting to see how all of this unfolds.

    • You are spot on. This could get very interesting, very fast!
      This will make things interesting, if you are Stateside, this has got to be a must view.
      http://www.cbc.ca/documentaries/
      I hope they are going to air it online.

    • Here is a relevent snippet from the second link I posted above:
       
      While this is the probably the most spectacular takedown of the Gold price ever, but by no means is it the first or the only one. Anyone who has actually traded the Gold futures market for any length of time knows that this happens on a regular basis. So basically the government/Central Banks use the paper gold futures market as a price control mechanism for Gold (of course, they can’t impose price controls on Gold overtly as it would reveal the lie – if Gold is a barbarous, meaningless relic why would you need to impose price controls on it?). But what happens when price controls are imposed on something? Shortages start to occur resulting in an even greater moonshot in price than would have otherwise occurred. A “black” market (which is actually the free market at play and depicts the true price of the commodity) eventually emerges where it sells at a premium to the official price. There are two reasons for this:
      1.      Buyers – aware that the commodity/good is available at a discounted price – beat a path to the door of whoever is foolish enough to sell it at the government mandated price. Availability at that price soon runs out.
      2.      The good becomes even scarcer as the costs of producing and selling it are no longer covered by the government mandated price. Aware of this, sellers withdraw from the market and demand ever higher prices for the good.
       
      And remember: for marketable goods, the “out” is money, but the only “out” for money is a superior form of money. When the paper currencies become unstable, the only “out” is Gold so you can be sure there will be no lack of buyers, only sellers – and there is no upper limit to high it can go. Theoretically, the price will be infinity when no seller is willing to sell Gold in exchange for paper. You want to be “out” of paper before we reach that event horizon.

  12. @canadianstacker, thank you for your answer and I think you nailed it.  The value of anything is whatever the buyer is willing to pay, and ebay shows exactly what the buyer will pay for a given item.
     
    As an example, a quick check of a few ebay sales shows the going rate for a common-date, circulated Morgan Silver Dollar is around $30, while coinflation gives $18 as the Silver value of a Morgan.
     
    Thus – one of these Morgan Silver dollars is worth around $30, not $18 despite what the COMEX says.

    • Morgan Dollars aren’t strictly bullion any more, they have gone over to the dark side of Numismatics, Book guides are now their pricing masters. Trust me, been doing Numismatic coins for years (not this modern stuff either, real numismatics).
       
      Spinks has been my Pricing master for years when it comes to Coins of the UK.
       
      I took a look at Silver Eagles and Bullion bars, they are being priced by the spot price.

  13. Why can’t the comex just pay a cash premium and not deliver the physical?

    • Because the entire futures market is predicated upon the idea that you can buy a contract today AND receive that commodity at a fixed price at some fixed point in the future.  While many futures traders have no interest in taking delivery and only want the profits they are due, there are others in there who not only want delivery but who MUST have it.  Consider… suppose a company that produces silver bars and rounds buys a silver contract for, oh, say, July delivery.  They may be buying this because their current raw silver stock might be used up by August 1.  If they cannot get delivery in a timely way, as specified by the futures contract, it could do a lot of damage to their business.  These guys would not care about a cash settlement because they cannot make any silver rounds or bars from that.
       

  14. I buy and sell on Ebay the Prices are based on Suppy and demand.

  15. I think this coin has to be the holy grail of coinage. $20 Canadian dollars face value worth more than the silver content, I love these little suckers and they are very pretty.

  16. @Mammoth:  Hey Woolly, the $18 on a silver dollar is the MELT SILVER VALUE of the coin.  Remember, the buyer of this coin is 1) a collector, which puts the coin into the numismatic arena, or 2) a stacker, who doesn’t give a rats behind if the coin is bent, holed, etc….thereby the MELT price is king to #2.  Hope this helps….

  17. Just try to buy someone’s ASE  .999 pur silver bullion one troy once for  @ $24.00…let me know if you find any, and if there is more!

    • you all are smoking something. Havent you all learned yet that all this hype about everything collapsing is a bunch of crap. The gurus are just trying to keep you all in the game. What a joke. Will you never give up this crazy ship. Good luck but open your eyes your being played for fools.

  18. Hello all my fellow stackers, I just wanted to say how exciting it is to hopefully see the end of this corrupt silver manipulation! I just wanted to thank all of you and implore to keep fighting the good fight. I think we are so close now to ending this paper game, and I feel all the pressure is being brought to bear on these criminal bankers from little people like us. I know if we can keep this physical buying pressure on the bankers we will win out and our efforts will be greatly blessed. Again “hold fast” everyone history is being made one physical ounce at a time. The day will belong to us is the end! Let us all finish what Max Keiser started in 2010 and finally break this corruption once and for all! God Bless you all
    Silver-muppet

  19. A little perspective about the recent moves of gold and silver by Rob Kirby.
    I respectfully suggest you guys consider the following:
    A piece written by Russell Rhoads, CFA of the CBOE Option Institute – wrote the following:
    “‘Friday was a 4.88 standard deviation move in the price of gold. For simplicity’s sake let’s call it a five standard deviation move. Statistically we get a five standard deviation move approximately once every 4,776 years. So we should not expect another move like this out of the price of gold until May 17, 6789. …Currently the two-day price change in GLD is 16.65, which can be converted to just over eight standard deviations. I wanted to share what this comes to, but the table I use only goes up to seven standard deviations. Let’s just say the sun is expected to burn out first.’”
    Personally, I checked with Dr. Jim Willie [Phd., Statistics, Carnegie Mellon]. He told me the odds of a 7 Std. Dev. Move are 1 in 781 Billion. He went on to add, “there IS NO MATH to calculate the odds of 8+ Std. Deviation moves”.
    If you are to be taken seriously, you boyz might want to factor some of this math – or lack thereof, into your analysis.
    Best,
    Rob Kirby

    • Okay, It’s as simple as that then….why you not say so earlier? LoL

    • Just because the move was outside the standard deviation has no bearing whatsoever that it occurred. So what if the chances of it happening were out on the outskirts of the bell curve, it still happened. The maths do prove however that by the simple process of what is likely to happen in a given period of time shouldn’t have happened, only proves to confound that the result should never have happened and proves without a shadow of doubt that the market was rigged.
       
      However, if you think that the blokes on Capital Hill will care about Standard Deviation, then I am afraid that your mistaken.
       
      I get this stuff, but it doesn’t cut the mustard when it comes to the problem of keeping a stable economy stable for the sheep, so that the wolves can carry on feasting on them.

    • Hi Rob
      How do you factor in the Manipulation of the skanker tribal bankers & the socialest US government into your calculations ?
      Their ability to screw with the markets trumps any math & their ends justifies “THEIR” means
      When JPM had the lawsuit ( about manipulation ) just dismissed the court gave them a free pass to manipulate at will & I feel we are now baring the brunt of a piss poor decision by a brain dead judge.

    • Just puts it into perspective how big of a move that was.  It also show how desperate the central banks are right now. 
      Here is another good story just released.
       
      Global economy faces ‘chronic’ crisis if reforms are not completed, warns IMF
      http://www.telegraph.co.uk/finance/financialcrisis/10000918/Global-economy-faces-chronic-crisis-if-reforms-are-not-completed-warns-IMF.html
       
      A growing trend towards excessive risk-taking and lack of action to repair broken bank balance sheets could trigger a “chronic” new phase in the financial crisis, the International Monetary fund has warned.
       

      “Overcoming the crisis and the crisis effects will remain a challenge over the next decade,” Mr Weidmann told the Wall Street Journal.

      “The calm that we are currently seeing might be treacherous [if countries delay reforms].”
       
      Oh reforms like stealing segregated, private accounts?  If the IMF is warning people, we are in trouble.  The last part of the article is great for all of us pension planners in the US.
       
      The fund said that some US public pension funds had significantly increased risk exposure, and in some cases were using investors’ money to gamble on complex derivatives and hedge funds in a bid to generate higher returns. It said the weakest funds had increased “alternative investments” to “about 25pc of assets in 2011 from virtually zero in 2001.”

       
      Houston, we have a problem with your pensions!  We must take them over because they will soon vaporize because of increased exposure in highly levered derivatives.  We must roll that money into the safest  place in the world.  Sovereign European bonds and US treasury bonds.  You can thank us later.  Guys, it’s all coming to a head.  The writing is on the wall.  Good luck to everyone and keeping stacking the metal.

    • The orchestrated timing of both inexpicable margin hikes and massive naked short selling to trigger sell stops of weaker hand is enough to break through any amount of standard deviations. Even those commitedly long were hardly able to stand their ground, margin calls kicked them out.

    • WaitingForSilver-I also took this little article the same way.  It doesn’t matter about models, technical analysis, or standard deviations.  It’s about market rigging and desperation.   It just put things in a different light. 

    • When JPM had the lawsuit ( about manipulation ) just dismissed the court gave them a free pass to manipulate at will & I feel we are now baring the brunt of a piss poor decision by a brain dead judge.”
       
      That would be one way to read it.  My read was that a judge got one helluva nice retirement plan for not making a legal decision.  When in doubt, “follow the money”.  It’ll lead us to the guilty pretty near every single time.

  20. Another great article by Bill Holter and lots of good posts by the faithful a true enjoyable read. Also thanks for the links Jccjktj I enjoyed them. Keep Stacking. Hi! There Da yooper where have you been?

    • Hi Brother Charlie …….hope all is well with you
      been busy & have had to force myself to come up for air
      you know I hear stuff & such ….rocky road ahead
      need to stop by ….over there once I sort out what is what
      I fear even having phiz will not be of much help for what is coming
      Insurance is a good thing …but folks will need to eat toooooo

  21. From Harvey Organ:
    we  lost another monstrous 11.13 tonnes gold  at the GLD today following 22 tonnes on Friday and 4.2 tonnes on Monday and over 8 tonnes yesterday. 
     

    Ladies and Gentlemen, this is no gold liquidation..this is gold that China is demanding over in London.

  22. Waiting for Silver  Isn’t that the damned canoe that caused me to lose all my silver in the river?!?!
    I’ll try for the Occam’s Razor approach to the silver and gold issue
    Desire, need and greed(and fear) are the primary movers here.   Not in the paper action but the action in physical.
    PAY ME MY SILVER NOW!!!!!!!!!!!!
    Gold is desired as it is a concentrated form of wealth and a means to preserve it for decades and future generations.
    We have forgotten our future generations, throwing them on the hard rocks of debt and poverty.
    Silver is a monetary metal that is also a commodity without which we would not have an electronic and industrial society
    China and India are inhaling silver and gold, consuming 40% of the world’s production of these PMs.
      China, and to a lesser degree, India, need these metals for business, military, industrial, wealth production and wealth protection, currency backing and a means to disable the west’s control over the reserve currency
    Wars, hot and cold, are being fought over a country’s gold stocks such as in Libya, Mali and Cyprus.  The gold contained in these countries is so important that lives and blood are shed for these stocks of yellow metal.  The unreality of the trading pits is moving into a phase in which the new reality is trading pits filled with blood and carnage.
    The effete actions of paper metal trading algos can make fortunes for those able to work the levers. But the reality of physical need for physical gold and silver makes the clean hands of the keyboard monkeys obsolete soon enough.
    I would like to hear what IchBan1 has to say about the precious metal situation in China today. The paper prices diverged from physical prices some time ago.
    We,   the western powers, are committing debt  seppuku without actually realizing that we are doing this to ourselves. It seems that the pain has yet to register.  The entire world is witness to this ritual act and know that if we reach the end of the cut, the world will suffer and face dire consequences as the western world implodes.  The blow back will be considerable and mitigated only by possession of huge stockpiles of metals, both base and precious.
    In my opinion,  most of this action can be traced down to desire, need, greed (and fear) simple human emotions.
     It appears that the manifestation of this is appearing in the physical segment and  this  side is going to win. 
    On another note I plan to get a table at another gun show. May 4-5.  If you are in Reno those days stop by my table. You’ll spot me pretty easily.   This time I’ll come loaded for bear with a few thousand ounces of the generic silver coins. Pricing will be determined by spot price that prior Friday.
     Since Northern Nevada seems to be  bare of inventory and LCSs willing only to put a buyer on the list to be put into a buying pool list with 2-3 week delivery, cash up front, then according to my phone calls to this seller and an online seller, Lear capital, my plan is to be the only source of silver for this part of the state. Lear was $3 over spot for generic rounds and $5 over for ASE with 21-28 days for delivery.
     This may be some  big shoes to fill but this will be  test of the market and its on-the-street pricing strategies, an opportunity to educate the  buying marketplace of 20,000 or more people and maybe make a few dollars.  Refilling the stack will be an interesting challenge. I hope Doc has his store ready for business when I call for restock.  I’ll guage the emotions of the crowds and see if there is something different since the last show, held on that weekend when the entire silver selling world closed down due to lack of supplies.

  23. I think the banksters really underestimated how strong the hands of the PMs holders have become over the last 4 to 5 years. Everytime they crashed PMs and the weak hands sold, the metal found it’s way to stronger hands. Every time it bounced back after a smackdown and an invester took a profit, the metal found a home in a stronger hand. The phyzz is now in an iron grip of people who do not think of PMs as a mere investment but rather an insurance policy, a hedge against criminal bankers and counterfeit currencies. The other is industry, desperate to keep their production lines running! The latter will not sell at any price. In fact they are going to be looking high and low for every ounce available as supply gets ever tighter!

    • The only thing that is different than at the beginning of the year is perception and price. Sure it’s deflating to see the price fall, especially while so many have for so freaking long, heard all these grand upward sentiments expressed….to the moon, lol…if the price goes to shoe top level, and it may, still the only thing that will have changed is perception and price.
       
      Strong hands? Well see. Time has a way of degrading strength…..over estimating strong hands is probably a mistake. Do we have strong minds? The strength of convictions are likely to be severely tested; It’s one thing to say, “Buckle up.” It’s another thing entirely actually going for the ride.

    • I agree, RRG.  Strong hands ARE in command of the phyzz.  Idiots and charlatans are in command of the paper.  I can live with that.  We get silver and they get some outhouse stock.
       
      As to the futures price… PFFT!  No one is selling real silver for anywhere near that ridiculous price.  Best local price was about spot + $4 an oz.  90% US silver coins?  Fuggetaboutit.  None available locally.  A few on-line vendors seem to have some but the premiums are stiff.
       
      I said, WTF today and ordered two $100 bags of US 90% coins from APMEX… one of BU Kennedys and one of proof statehood quarters. Not sure if there will be a delay in this, as I am paying by check and they haven’t even received it yet.  We’ll see in a couple of weeks.  More metal, less fiat.  I can live with that.  ;-)
       

    • @4 oz: I can’t help “and maybe it’s just wishfull thinking” that all the preppers and Paul voters and survivalists and naturalists and many other individuals that have or are trying to wake up from the matrix have strong minds. Not all are buying PMs but a majority probably are and they number in the tens of millions in the U.S. alone. They know as well as we know that when the banksters are finished shaking the money tree they are going shake the apple tree! Thats why so many are storing food. As I said, maybe it’s just wishfull thinking,

  24. COMEX only delivers paper, not metal. There won’t be a default, ever. 

  25. Ebay will be the new pricing mechanism.

    eBay, in my opinion, is already the current pricing mechanism.

  26. Funny site: http://www.boatingaccidentnews.com/
    for all your boating accident needs. 
     
    ag

    • @agstack: This Story is TRUE!  In 1997, the crew of a Japanese fishing boat was pulled from the Sea of Japan after clinging to the boat’s wreckage for several hours.  They were later arrested “for insurance fraud” however, after authorities interrogated them about the boat’s fate.  To a man, they claimed a cow had fallen from the sky, apparently coming from nowhere, and struck the boat amidships, resulting in a huge hole and its rapid sinking.                                                                                           The crew remained in prison for several weeks until Japanese authorities were contacted by several highly embarrassed Russian air force officials.  It turned out that the crew of a Russian cargo plane had stolen a cow that wandered near their Siberian airfield and forced it onto their plane before they took off for a flight home.  Once airborne, the cow apparently panicked and starting rampaging through the cargo hold, causing the crew also to panic because it was affecting the plane’s stability.  They solved the problem by shoving the cow out of the hold while crossing the Sea of Japan at 30,000 feet.

    • Good site agstack! I’m needing a laugh after all these math equations here tonight. 

    • @rocketsredglare Wow! That’s awesome! “Yeah, sure buddy. A cow? Now how about you tell us where the silver is?”
      @silverdog Don’t miss the part on the technical analysis! Lol

    • @agstack: I know exactly where all the Ag is. It’s in the toothbrushes, countertops, cellphones & batteries and landfills everywhere… you get the point I know. The rest is in the iron grip of large and small stackers just like the readers of SD!

  27. All it is going to take for default is for 1 of the big 4 cartel members to demand physical and the COMEX is toast. And that will happen because there is no honor among thieves.

  28. The TRUE VALUE of GOLD BY MY MATH (I am not good at math by the way, so do your own calculation)
     
    World Debt = 200 Trillion
    All Gold that has been mined (for whatever use) = 6 Billion ounces
    Divide 6 Billion into 200 Trillion (forget 1.25 Quad Trillion in world derivatives) I come up with $3,333.33 for an ounce of Gold)
    Just a thought, you put a pencil to it.
    Ranger

    • My pencil shows that the gold price would be $33,333.33 by this method.

    • @Ranger : @Ed_B: I like Ed’s pencil! Can those pencils try a formula for silver, but not based on the price of gold?

    • @RRG:  We can make an estimate but it assumes that the prices of gold and silver rise and fall by similar amounts.  This is not true over small time spans but shouldn’t be too far off over longer periods of time.  This would be my estimate for a silver price IF we actually had the incredible price of $33,333.33 for gold:   $33,333.33 x 23/1395 = $550, where $23 is about the (paper) price of silver and $1395 the (paper) price of gold at the moment.  I could live with that, as far as the stack goes, but there would no doubt be some terrible economic disaster(s) in progress at that time that would be awful in consequence.

  29. Then why is the comex inventorys going up every day!!!!!!
    wake up people!!

  30. Not sure if you guys heard about the Waco fertilizer plant or not yet. 
     
    Sounds like the shit has officially hit the fan. 
     
    ag

    • Har Har Har…. In all seriousness, this is why everyone should have a gas mask.

    • Funny site: http://www.boatingaccidentnews.com/
      for all your boating accident needs. 
       
      Haha, If that’s the buy price, I am willing to sell back my last two rounds, the one’s not at the bottom of the sea.

    • Yeah, it was on the news this morning… nasty business.  This was likely a dust explosion, which is not uncommon in places that make lots of easily oxidized organic compounds or strong oxidizers.  Grain elevators, for example, are famous for blowing up from wheat dust dispersed in air + a static spark.  Fertilizer is usually ammonium nitrate, which is a strong oxidizer.  If finely divided, such as a dust would be, and mixed with air and something that is oxidizable, such as organic dust or fumes of some kind, a powerful air-fuel type blast can occur.  Such explosions are known for their extremely violent blast / concussion effects.

  31. Here is a one page summary of what the current ebay prices are for silver…as you can see, the premiums are getting even higher..they had been running 20-30%, now 40-60% over the spot price; even 80% for the kookabura.
    http://www.24hgold.com/english/buy_sell_silver_coins.aspx?co_id=0
    Here are a few examples from the above table

    type Price Price over spot
    American Eagle $34.60 +47.3%
    1 OZ generic round $32.77 +39.2%
    Kookaburra 1KG $1375 +81.6%

    • Fascinating report, but surely the Kookaburra is BS?
      I have plenty of those and no way, in a VAT country, can I get more than 25-30% over spot for it.

  32. Wait a sec. Two days ago he said that the comex “WILL” default within the next week or weeks. Now he’s talking about “odds”? Sounds like someone is trying to change the “odds” of not being wrong.

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