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On this week’s SD Weekly Metals & Markets, we’ll cover:

  • Doc’s physical market trends report- silver shortage easing?

  • Back over $22 silver with the commercials (& likely JP Morgan) nearly net neutral in silver- what it likely means

  • Next week’s FOMC: QE tapered or has the Fed run out of room for MOPE with foreign governments outright selling $50 B of Treasuries in May?

  • We cover Edward Snowden & the NSA’s PRISMGate with a “Wag the Dog” rhetoric and war drums ramping up against Syria- major regional conflict could erupt involving Iran, Syria, Russia, and Israel should the US launch a ground invasion of Syria

The SD Weekly Metals & Markets with Eric Dubin & The Doc is below:

Today’s report will be on the lean side.  Other than the fact that Obama may very well be planning to “wag the dog” with a new, conveniently timed Middle East war, it has actually been a relatively quiet week.  No doubt, our friends at the NSA think otherwise (and spooks, please remember to not mix-up my file with that attorney that busted Robert “Baretta” Blake;  I’m the “dangerous” Eric Dubin and not the attorney that went after the dude with the bird on his head).

 

 

A funny thing happened after silver busted $22 last Friday: hedge funds, once again, signaled they think the risk-reward for further silver downside isn’t worth anteing up cold, hard cash.  We certainly saw an ideal setup for another wave of cartel selling going into the thinly traded Sunday evening hours, especially given that Chinese markets were on holiday.  There was a minor cartel attempt to set the table Sunday evening for hedge fund shorting through Monday.  But as Silver’s action proceeded throughout London trading hours, the well trained Pavlovian hedge fund dogs recognized they’d be getting no steak.  The bottom was set at just under $21.40 spot silver.

 

silver-spot-jun-10-2013

We’re pleased to be wrong about our fear that the cartel was going to once again make a serious effort to smash precious metals.  They didn’t act.  That’s telling.  It happens to fit with the general thesis we’ve had since the April 15th bottom.  The cartel faces considerable risk of unleashing a level of physical demand that could very well implode the shaky inventories of the Comex and LBMA should the cartel be ballsy enough to hammer prices much below current levels.  Bullion is flying off the shelfs in Asia, as is — check out these pictures ZeroHedge published this week:

Silver’s lightning bounce off $20.25 on May 20th, with a closing price north of $23 was another hedge fund “n  o mas” signal.

silver-May_20_2013

 

In sum, we have the Cartel thinking twice about “unintended consequences” while the hedge funds are wise to the fact that drool all they wish, there’s no steak dinner down at these silver price levels.  Silver’s sideways action continues, and we’re now back over $22 silver.  While we’ve experienced occasional blips below $22, this level has established a reasonably strong base and Friday’s short covering leap is just one more demonstration that downside from here on out is likely trivial.  It’s only a matter of time before fundamentals take over and we move higher.  Odds continue to favor an atypical summer of sideways to moderately higher  trending prices, with real fireworks taking place later this year.

With that, download this week’s show, load your iPod/mp3 player and head outside for some fresh air. — Eric Dubin

 

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eagle_sale

 

    • Some people like the fact that the Mercs are clearly an older design.  This can help sheeple identify them as real US 90% silver coins.  The Roosies are cheaper, so I prefer to buy them and will simply not deal with anyone too uneducated in PMs to recognize a 90% US silver coin when they see one.  It won’t take them long to figure it out.

  1. I do t own any dimes, but I was under the impression all the fdr dimes were not silver. Greatly appreciate any education on this from a dime collector who is 100% certain of what they are about to share?

    • Charlie is correct, as usual.  Additionally US silver coins are easily recognized by looking at them on edge and not seeing the copper-brown tint of the clad coins.  They are also a little heavier than the clad coins.  US half dollars were made from 40% silver for a few years… 1965-70, I believe.  I don’t collect US 40% silver coins so am not sure of those dates.  It can be Googled.
       

    • The Roosy dimes are silver up to and including 1964.  After that date, those dimes issued for CIRCULATION (change in your pocket) have NO silver.  Now, as always, there are exceptions.  All PROOF SETS have silver dimes and other denominations as indicated on the packaging container.
      As to the desire for Mercury head dimes over Roosevelts, to me is quite simple:  Some Mercury dimes have TREMENDOUS numismatic value. Whereas Roosevelts not so much. As an example, the 1916-D (Denver mint) runs $850 in Good condition which is the poorest condition that is attributed to this coin. Two other coins in the Merc series, the 1921 D and S (San Francisco mint) go about $80 in the same miserable condition called Good.  I identify it in this manner because in good condition a Merc is warn to have most details rubbed off.  The date is there but extremely weak. 
      Now, the kicker on the Mercs vs Roosys is that you can FIND the above high dollar dimes if your lucky.  I have, on this site many times, heralded the ACCUMULATION of junk (90%) silver because is the BEST way to obtain silver for the least amount of fiat money….and….you can find these gems.  Since last October, buying Mercs, I have found THREE 1916-D dimes.  All these coins were purchased from coin dealers.  I presume, they buy them, don’t check them and just resell with their generous markup.  I check each and every silver coin I buy.  Last month a 1932-D Washington quarter made its way into my clutches.  I grade it XF40 which is $290.  Ive been offered $200, but have opted to hold it a little longer….
      Eagles are nice, but they can’t compare with “junk”….Good hunting!
       

    • No, Keiser stole the term from a poster at Zero Hedge (Mr Lennon Hendrix), and then pawned it off as his own idea.
       
      I’m not a fan of his as I question his integrity and honesty.  

  2. Hey gang,   there is an article in this Satruday’s WSJ about the impending bankruptcy of a city of 700,000 people.  Detroit is right now forced to make some very tough choices.   Kevyn Orr, the Detroit emergency manager annouced that some $20 billion in unsecured creditors may be forced to take a 90% hit or the city will file Chapter 9.
    Of that $20 billion, $6 billion iin retiree health benefits and $3 billion in pensions maybe be forced to take 10 cents on the dollar.  Another $2.5 billion in unsecured creditors may have to take the same 90% cut  There is no specific word on the $4.5 billion in secured bond holders but this is a big deal. Just yesterday $40 million in payments went unpaid.  Another $2 billion in due bills is being put off indefinitely.
    The city is so politically connected to DC and the White House that decisions being made on behalf of an administration power base will not doubt result in some very serious inequities flowing to  that DC power base of  unions, union pension holders and other stakeholders. I expect them to make completely unreasonable  demands that Obama and his people make them whole.  He owes them that  or so the story will go.
    The City can ill afford to lose the pension monies coming from the retirees. The thousands of suppliers will be forced to either stop providing those services or face potential bankruptcy by continuing their services with little hope of being paid.
     But what concerns me is that Detroit has some of the same problems as Wonder Bread, another union-rich organization taken down by the wages and debt of the company and its workers age demands.  Detroit is unlike Wonder in that Wonder Bread’s patents, processes and recipes can be sold embloc to Bimbo, the Mexican bakery firm.  Bimbo did not buy Wonder but was a suitor.
      Detroit can’t be offshored and saved by the Chinese desiring to buy more US territory.  That probably would not be in the cards. Nor will Detroit be saved and sold to a mega corporation such as the one that owned Detroit in the movie Robocop.
    The political will to save Detroit probably won’t be there.  The Administration has its hands full with every type of scandal and impending war in the Middle East. There are 48 unions including AFSCME who are saying these 90% cuts are too much.  The push back could be very harsh and even violent if the unionists, retirees and those political classes won’t accept anything less than a full scale bail out. The streets could get bloody.
    My question is who will be required to help with the bailouts.  Will they be bail-ins?  Like GM and its affiliates, some unions were saved and some retirees got shafted.   Delphi fared badly.  The UAW made out well.   If Detroit is GM on steroids then we are talking about a city not a company
     Here are the questions I pose
     
    Will it be a bail out with the tax payers on the hook?  Will it be a bail-in with some stakeholders getting shafted, forced to foot the $20 bill?  Like Cyprus, some got the bail-in blues, some were warned to get out of Dodge before hand and some were immune from the political decisions made from afar
    I smell the odor of JPM, MS and the vampire Squid in the air.  It would not surprise me to see them working some side deals.  Maybe they will be forced to pay for past deals like Jefferson County and their sewage treatment plant, only in Detroit. 
    Who gets hurt? 
    Who doesn’t get hurt?
    Who profits? 
    The decisions made in DC will tell us how these hard problems will be resolved.  I expect that like so many decisions, the wrong ones will be made in droves until, in the end, the right one will be made. By then it could be too late.

    • On Bro Jo’s site there is a better and different take on the Detroit debacle. 
      The wholesale repudiation to public pension plans has been coming for some time, years in some cases as we’ve seen in  NY and CA.  In Detroit’s case, the large bond companies, private equity firms and bond bankers are going  to be hit hard.  AMBAC and other rating agencies have just gotten back on their feet. The ratings provided on the Detroit bonds and the need to pay bond holders of defaulted obligations might just send these firms back to the BK court, leaving the bondholders with empty bags.  Derivative exposure might factor in to this mess as well.  Detroit may be a black swan event if allowed to fester, not being handled well or quickly
      Private pensions were not mentioned in these articles but private pensions are seen as the the milch cow of bail-out funding should public pension funds such as CALPERS have a major funding shortage.   California  threatened in the recent  past to consider  expropriation if TSHTF in the public sector.   Additonal payroll taxes were passed in 2013 to bring funds to CALPERS.
      Bernanke sees the  Money Market Industry  as the bulwark to a US-wide  banking liquidity pool in the face of some major banking crises in this country or even the Euro zone.   MMAs could be subject to confiscation or bail-ins  even if I think that is a bridge too far as a source of bailout monies.  If Bernanke can think it, the administration could make the threat real.
        How this will shake out, if Detroit’s stakeholders are Cyprussed or other external funding sources, like private pensions,  are forced into the mix as a means of financial salvation to Detroit,  will evolve in the next few months of a long hot summer.

    • AG… all this makes me wonder what the boyz-n-goils at The Pension Benefit Guaranty Corp are doing about any of this.  Seems to me that they could be on the hook for a BIG share of that $20B or so.
       
      These people need to follow Ed_B’s rule #4:  “Adding liquidity does not fix STUPID.  It merely sets the stage for further losses”.   lol
      See 1987 Savings & Loan fiasco and the 6x larger 2008 banking collapse for verification.
       
       
       

  3. Hey! It should be made I to America’s new ” Fleabottom Town” where the homeless and indigent and wretched live… Just imagine, a city for the poor peasants of America! How glorious! How American! Complete with an entire block for serving bone soup. Ahhh yes, the future is very bright! Perhapse a good episode of ” Death Race” down Main St. With Tv procedes to partially go to maintaining the local power plant, sewage, and soup supplies. Who knows, t.v. sindicates might part with a generous 10% of the profits, with a bonus 2% for every racing death caught on air.  ….Indeed Detroit has possibilities!!!

    • just because they buy or sell doesnt mean paper silver actually. increases, could just as likely be a transfer.  adding requires a new paper trader on the opposite side.  two people with different opinions about the same commodity valued at one price.

  4. EdB  Like Larry the Cable guy would say  “I dont care who who are, that’s funny’  
    If Ed’s Rule # 4 is ‘adding liquidity does not fix Stupid, a fitting corollary to Ron White’s Universal Rule #1, “you cant fix stupid’
    then what are the first three?
    When I think of liquidity I think single malt scotch, which as wonderful a beverage as it is, does not fix stupid either.  As much as I have tried over my lifetime of sipping, or guzzling, Irish Liquid Courage, I’ve found that the next day stupid returns. 
    It did help me come up with  one of my favorite rules of drinking.  If a good drink does not get rid of stupid then stop fighting it.  Stupid is here to stay.  Get used to it. Blissfully wallow in ignorance.  lol

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