dollar collapse panicRick Rule from Sprott Global Resource Investments joins the SGTReport to talk about everything precious metals. This is a must-listen interview packed with lots of bullish info, but towards the end of the interview Rick really cuts to the chase: “The idea that silver can be manipulated down ignores the fact that it could easily be manipulated UP.”
Rick continues, “The consequence of two years of extraordinary physical demand in the face of the unwinding of the leveraged long carry trade in silver expressed in SLV and expressed in the futures markets, tell me that it will be easier to make money manipulating the price of silver UP than manipulating the price of silver down.  And my suspicion is that the commercial interests in manipulation will ultimately do the easiest thing to do. If there was $2 Billion employed, not on margin by the way, cash – so the rules could not be changed like they were on the Hunts – $2 Billion in cash employed in the futures markets, which was held for delivery cleaning OUT the good delivery silver that’s available, the short interest would LITERALLY be uncoverable.”

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  1. “If there was $2 billion employed”
    That’s a big “if”, which proves the point that PSLV hasn’t been able to do a offering for 1.5 years, nothing.   Where is the demand for PSLV? It’s obviously not there.

    • “Who cares about PSLV around here?”    Rick Rule and Eric Sprott for sure, as well as the rest of the silver market.   PSLV offers money managers a great investment vehicle for institutional investors to get an allocation to physical silver.
      The fact that Sprott can’t even do a $300 million offering is very telling, where is the demand?   
      “This is a stacker site”         True, but the silver market is more than just retail investors buying coins and bars, industrial demand and “big money” entering the market are key aspects, Rick Rule seems to think that even $2 billion would make a huge difference, I think he’s correct.

    • No doubt he IS correct.  As small as the silver market is, it would not take anywhere near that number to start a price rise that would have the power to draw that number into the metal.  The comment I would make to you @zman as you are inclined to remind us that there is insufficient demand, is that this situation can change very quickly.  And, as we sail into the choppier waters of the Black Swan Sea, I would not want to be short silver right now…  :)

    • There is also the assumption that $2bln in new futures longs would have zero effect on price, which i dont think could possibly be true.  As far as a stacker site or not, timing ones purchases can mean more bang for your buck if disciplined.  If you have invested a significant amount of your wealth wouldn’t you want to read anylsis that is unbiased?  
       
      Frankly for my core pm investment it is not for sale at any ‘spot’ price, though if someone is willing to pay more than mkt at any given time i’d be happy to help them.  There are plenty here who trade or flip as well, i’ve read their posts and none of them get the troll label.

  2. A mere $2 Billion would clean out silver on the margin…but on the flip side, what are foreigners investing in according to the TIC data from the Treasury???
    “Foreigners” have amassed gigantic positions in med / long term US Treasury’s…something to consider as Fed “tapers” out QE…
    Individual country / regional increases (as “assigned” by TIC. below TIC data based on where these are bought / held, not nationality of buyer),
     
    Global
                  Jan ’00 –>  ’07  —>  Dec ’13:
     
                  $1 T  —>  $1.6 T —> $5.6 T
     
    ASIA
    China $60 B  —>  $400 B —> $1.27 T
    Japan $315 B —>  $600 B —> $1.18 T
    Taiwan $35 B —>  $38 B  —> $182 B
    HK       $39 B —>  $52 B  —> $159 B
    Singapore $30 B->  $30 B  —> $86 B
    India     $5B —> $15 B  —> $69 B
    Thailand $13 B ->  $16 B  —> $52 B
    TOTAL   $497                         $3 T (600% increase, ’00-’13)
     
    AMERICAS
    Brazil   $5 B —> $54 B  —> $245 B
    Canada $15 B  —> $28 B  —> $56 B
    “Carribean banking centers”
            $      35 B —> $68 B  —> $291 B
    TOTAL  $55 B                    $592 B  (1100% increase)
     
    MENA
    “oil exporters” 
            $45 B —> $112 B —> $238 B  (500% increase)
     
    EUROPE
    Russia   $5 B —> $9 B   —> $139 B
    Norway  $5 B —> $20 B  —> $97 B
    UK    $50 B  —>  $100 B —> $164 B
    Switzerland $18 B> $34 B  —> $175 B
    Turkey $5B —> $25 B  —> $52 B
    TOTAL    $83 B                       $627 B  (750% increase)
     
    BANKING EURO
    Ireland $5 B —>  $19 B  —> $125 B
    Belgium $28 B –>  $13 B  —> $257 B
    Luxemburg $5 B—> $60 B –> $134 B
    TOTAL    $38 B                         $516 B  (1350% increase)
     
    CORE EURO
    Germany $54 B —> $50 B —> $67 B
    Italy      $20 B   —> $14 B —> $30 B
    Netherland $13 B-> $15 B —> $37 B
    France   $27 B  —> $10 B —> $54 B
    Spain    $20 B —> $5 B —> $23 B
    TOTAL   $134 B                   $211 B  (57% increase)

    I wonder who really owns all these T’s…”foreigners” is simply the term TIC applies to Treasury’s purchased / held in “overseas custody accts”…the data is provided by US based “custodians”…data “may not be attributed to actual owners”…”data may not provide “precise” acct’ing”…

    The data in this table include foreign holdings of U.S. Treasury marketable and non-marketable bills, bonds, and
    notes reported monthly under the Treasury International Capital (TIC) reporting system. The data are collected
    primarily from U.S.-based custodians. Since U.S. securities held in overseas custody accounts may not be attributed
    to the actual owners, the data may not provide a precise accounting of individual country ownership of Treasury
    securities (see TIC FAQ #7 at: http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticf…).

     

  3. @Hambone, This is nice layout. It shows exactly what is at stake here and why a pile into PM (let alone a tiny baby market of silver) would deem their T bill holdings worthless. Even a small allocation would warrant a warning of: “Don’t shit where you eat”
     
    As long as no one buckles, right? Perhaps its not manipulation, fundamentals, supply/demand,  inflation or velocity holding back metals; no one wants to self destruct and in a war games scenario. A spike in PM won’t be a happy day on earth for most

    • I have a sneaking suspicion that debt ravaged Ireland did not buy $106 B in Treasuries since ’08. And Norway did not add $77 B, nor did Belgium add $244 B since ’08…and on and on. I don’t doubt the Treasury’s were purchased…I simply doubt where the money came from and who the actual owners are?

      I have a funny feeling there is a shadow QE at least as large as the on the books QE and maybe this shadow QE is double the size of “QE”. Whether this is via currency swaps, ESF, Fed authorized agents, or whatever manner…there are likely many more dollars than acknowledged…in essence in a gigantic Fed induced counterfeiting ring to maintain a “market” for ever more US treasury debt @ ever lower yields. Consistent w/ collapsing velocity of money since new money isn’t loaned or multiplied…just conjured and retired. Consistent w/ why bond rates are completely disconnected from equity returns.

      All these likely fraudulent dollars, declining cheap energy, and low PM inventory vs. high demand and all these ingredients are coming together now in a perfect storm.

  4. hambone   good point   I have wondered what became of the $16-20 trillion the Fed schlepped to the Euro zone just after the 2008 collapse.  Was it to reimburse the Fed’s  royal family and Rothchid’s lossed on the trillions is subprime garbage that went to Zero value nearly overnight?
    How about that $1.3 trillion sent to the Euro Banks from Jan to March 2013.  Was it to shore up the banks capital base or prvide funds to uy US treasuries via the front door channels, thus providing some AAA (WTF BBB minus UST bond)collateral so they could borrow more from the ECB and thus shoring up their 50 to 1 leveraged balance sheets
    If Waffle countries, Ireland, Iceland and Wegians buy a trillion in USTs when their banks are totally broke, who’se paying the freight?.  Just askin’ but something stinks in Denmark

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