silver smashThe foul smell of DESPERATION is in the air…

 

Submitted by Dave Kranzler

Nearly 40 million ounces of paper silver were launched at the Comex yesterday in the space of seven minutes, which triggered a 92 cent waterfall in the price of silver; over 118 million ounces of paper silver were dumped on the Comex today (April 22) between 11 a.m. and noon EST.
This market intervention typically occurs after the bona fide physical precious metals in the eastern hemisphere have shut down for the day
.

The baseline assumption of modern financial theory is that fiat money is sound and markets are efficient.  Neither of those suppositions are valid.  The markets have been completely stripped of any legitimate price discovery function.  You can’t tell me with a straight face that Tesla, which is now burning cash at a rate of half a billion a year is worth $33 billion – or 8x revenues – any more than you can tell me that junior mining stock with $500 million in proved gold/silver resource in the ground is worth only $24 million.

Gold and silver have been “climbing a wall of worry” for several weeks now.  The traditional signs of an imminent manipulative attack on the metals (open interest of shorts vs. longs on the Comex, chart formations, etc)  have defied the behavioral patterns of the past 15 years.   Several “chartists” and Wall Street analysts, notwithstanding their boorish market prediction revisionism, have been been humiliated by the price-action in gold/silver since mid-January.

Several of us who have researched, traded and invested in the precious metals markets since the inception of the precious metals bull market believe that the bullion banks may have a bigger problem with sourcing physical silver for deliveries right now than with gold.  The Comex bullion banks have been hitting the price of silver hard with paper contracts the last two days, in a desperate effort to beat down the price
appreciation of silver during the overnight physical market activities of the eastern hemisphere bullion markets.

(click image to enlarge)
Currently there are are 56,863 open May silver future contracts representing 284.3 million theoretical ounces of physical silver on the Comex.  Against this is 31.9 million reported ounces of physical silver in Comex vaults that have been designated as available for delivery against these open contracts.  In other words, the bullion banks have thrown nearly nine ounces of theoretical paper silver at the market for every ounce of alleged physical silver that could be delivered into these contracts.

Tuesday is options expiration day for May Comex gold/silver options.  Typically options expiry is one of the triggers for a heavy onslaught of bank manipulation on the Comex.  With a brief glance as the put/call open interest in May silver options, it looks like the bullion banks – i.e. the entities that are short May silver options – are motivated to push silver below $17 (based on the amount of open calls vs puts at $17) by the close of silver trading on Tuesday.

Similarly, “first delivery notices” for Comex gold/silver contracts go out after the close next Thursday.  With the paper open interest in silver as of today 900% greater than the amount of physical silver designated as available for delivery, the Comex bullion banks will make every effort to shock and awe the hedge funds into liquidating their long paper silver positions.  We saw this yesterday with the 92 cent silver smash going into the Comex open.  Silver open interest dropped over 14k contracts yesterday.  This is one of the many manipulation games the bullion banks have been playing with the hedge funds over the last 15 years.

Because the CFTC and the Justice Department look the other way when it comes to enforcing market regulations as they should apply to the Comex – because those same regulations are actively applied to every other CME commodity product – true price discovery in the gold and silver markets has become an impossibility.   But we have 5,000 years of historical evidence which suggests that market interventions always fail.  And when they ultimately fail, they fail spectacularly.

India’s jewelry industry is re-opening after a strike since March 1st that shut down India’s gold import machinery.  A sleeping elephant is waking up starved for metal as India heads into its second largest seasonal buying period of the year.  This will make it more difficult for the banks to manipulate gold/silver prices using paper, which means the illegal trading activity of the next few days may be the banks’ last opportunity to cap the metals until India goes back into hibernation in the summer.

I added to high octane junior mining stock positions in the fund I co-manage today and I will be presenting an insanely cheap junior mining stock with 5 million ounces of proved gold, have of which is in the form of gold-equivalent silver ounces in my next issue of the Mining Stock Journal next week.  For a limited time, all new subscribers will have access to the back-issues published since the March 4 debut.

Buy Silver Coins at SDBullion

  1. 40 million ounces of silver is less than 1/100th the value of starbucks corporation… this is completely insignificant and failed to even erase a fraction of the weeks gains…

    so how is this newsworthy? a newsworthy story might be about the gains that were made, and not about some little blip in the market by a neutered and desperate short seller.

    • @seankelly

      Well,  I’m heavily invested in CDE, AXU and opened up a position on ASM just prior to the smackdown, and I have seen these stocks take a nose dive. CDE is the most sensitive,  losing 3% for every 1% drop in silver spot.

      I had previously sold CDE and then bought in again a few days before the SGE open of April 19 and seeing this daily smack down,  I’m tempted to sell again at the opening,  then buy in again at the daily close. CDE swung 9% from top-bottom.  GPL is most sensitive, I calculate, so i may flip that instead.

      Personally,  I think we will see this play out daily due to the difference in SGE spot price, roughly $17.5 vs $17 , in other words arbitrage. So during the Chinese open,  spot rises to meet Chinese pricing,  then someone liquidates their contracts and most likely buys in at the dip.

      What’s your opinion on TGD, ASM or LODE? ASM apparently has a sub 10 silver cost,  and is one of the lowest cost producers.

    • @silversurferstack

      whattup plata… okay my man… first of all, we shant be selling miners when the price if silver is only $17…. that’s crazy talk. look at CDE… from $1.65 -> $6.89 … 300% gain in 3 months… 1) there is nothing that needs to be messed with there and 2) the risk is FAR greater that you’ll miss an upside rather than avoid a downside

      you should be buying dips with fresh capital and not selling rips until we are above $50 silver… you will only hurt your performance by doing that. show me in the CDE chart where it would have been wise to sit out? when you sell, you need to wait 3-5 days for the trade to settle… it’s insane to do so because if the price reverses your money is locked up in settling the sell and you cannot rebuy.

      you should not be selling CDE or any other miners on this little tiny moves. we have gone from $14 silver to $17 and CDE is up 300%. ridiculous to not be holding during that period. no other advice i can give would even come close to the level of importance of that.

    • @seankelly

      I’m sitting on a tub of worthless fiat, just waiting to clear my broker’s account,  then it’s game on.

      I stacked to the point my boat sank, so being distraught over how fleeting these metals are,  I changed gears to miners.  I missed the initial rally in February,  but have been doing really well in March.  Up 50% on most miners,  except one which i just carry in the hopes it will eventually recover.  Luckily it’s only a small portion of my net worth.

      Well,  I sold CDE on an intraday high and luckily bought in again in early April but I get what you mean. Things can go rocketing up and waiting on cash to settle was disconcerting.

      Any thoughts on ASM?

    • @silversurferstack

      yeah i mean ASM looks great… its mines are in both Canada and Mexico… it is actually mining and earning money, my god… small so lots of room to run… plenty of cash on hand so even in a dip in silver price they are no risk of going under… chart shows highs in 2011 and bottoming in january 2016 which is what you’d want to see (correlation with silver)… insiders, institutions, and shorts all playing it… that’s very healthy for a small company… NYSE listed and not pink sheets… i think you have a complete winner here.

    • 40 million ounces of silver is less than 1/100th the value of starbucks corporation…”

       

      So in a Bankruptcy case, I could look forward to owning a washing machine size coffee maker?  And maybe a case of toilet paper or paper towels?

      Starbucks.  LOL.  Just like Buffalo Wild Wings.  Just goes to show you where the pet rock people like to eat and drink.

    • Maybe the only desperation is that of weak handed longs longing for higher currency price?

      Perhaps comex/cme can persuade any pertinacious long desiring physical delivery to take a USD premium on their contracts through coercion or outright duress?

      Has china’s desire for increasing their Au reserves at a lower price figured into your calculus?

      Au and Ag will revisit their respective lows placed 12/3/15.

    • Come on, Sean.  We all know that good PM news is always minimized while bad PM news is blown WAY out of proportion.  It’s the same old tired ‘PMs are bad and paper is good’ narrative.  Truth has very little to do with it.

    • We’ve been saying it will be a losing battle for years. That doesn’t change the fact that it is their only play so they’ll play it until it doesn’t play no more.

      What we see as feckless, the mainstream news reports as a warning to steer clear of metals, and perhaps more importantly computers trade one.

      It’s worked pretty well thus far Considering we’re dancing in the streets at hitting 17 bucks. I’m all in, I’ve averaged down from 45 and am still going.

    • @Canadian Dirtlump

      ” I’ve averaged down from 45 and am still going.”

      Indeed. Down from 45 takes a lot of faith. 2 OZ.  whenever I can. At some point TPTB have to fail and I think the SGE has hastened that scenario. DCA every chance you can.

    • Yep me too.  Have Averaged down from $43.

      Have said many times that waking in Feb 2011 and well remembering paying $52.50 per unit for ASE—and happy to do it, has me completely convinced that peeps will shell out fiat like crazy for AG—BECAUSE I REMEMBER DOING IT!

      I’ve done it, and still am doing it.  Obviously buying at 2009 prices is easier than April 2011 prices.

      4 oz a week has served me very well since buying big in the spring of 2011.

  2. some little blip in the market by a neutered and desperate short seller

    When you consider:

    1. Who the short seller is.
    2. Why they are short selling (beyond the obvious monetary gains).
    3. The evidence suggesting that their ability to manipulate the market is significantly impaired.
    4. The repercussions of their inability to manipulate the market. (and ensuing desperation)

     

    I suspect that #4 will most definitely meet the bar for “newsworthy” in the not too distant future.

  3. Things that remind me of 2010-2011:

    • Intraday price swings of 15-20%+ in many miner stocks
    • Trading volumes: 3-5X 90-day average
    • Gaps after gaps in a lot of the price charts, and hearing the technical traders swear ‘they gotta be filled’. (Many gaps filled two or three years later after the run to $50 and back).
    • Serial dumping of futures contracts at key round #s; especially around expiry dates.
    • ‘Sentiment’ on price action going schizophrenic intraday.

     

    Things that seem to have changed:

    • far fewer ‘sheep’ to sheer in the paper PM market, so ‘attacks’ have limited follow through.
    • MSM and Bank insiders mentioning Gold as a solution rather than a speculation.
    • Foreign governments openly discussing exit path from USD Hegemony.
    • Entrenched Deflationary market expectations vs Inflationary Fears as ‘QE to Infinity’ kicked off.
    • Triple digit Silver and five digit Gold predictions elicit discussion instead of scoffing and laughter.

     

    The process is proceeding as the tipping point of awareness draws near. Exponential buying may not be far off… and it can barely get started before all hell is going to break loose!

     

     

     

    • Very intellectual observations.

      I think we’re very close.  And when it comes, it will be like, no silver available.  Coin shop owners will have rich customers getting on a waiting list to buy.  And the premium on those ounces will be set by the customer who is buying.  The Owner will ask the customer, “How high are you willing to pay above spot?”  So in theory, when the “official” spot price of silver is $100 an ounce, you’ll have no problem finding people who want to buy now, not get on a waiting list that they may never get served.  So $200 an ounce is fine.  All $20’s, please…

  4. “40 M Oz of Silver Manipulation: The Foul Smell Of Desperation”

    Only 40 million ounces of Silver. Come on “SILVER STACKERS” of the world unite and soak up this PHYSICAL, That’s the only way we will get this thing done. Just keep on soaking it all up.

    What’s 40 million among friends?  _JOHNLGALT

    • @JOHNLGALT

      I have been doing my part all month…seems like everyday I am scoring more…

      JMB has those SMI round’s on sale like always (currently the Buffalo version) and they now have fractional mexican gold pesos…check out the price on their 10 gold pesos (if I left any for you)…me likey…

      I use multiple sources but JMB has been “bringing it” lately…timely and precise deliveries. They must love me this month.

    • I like the fractional Au in case all this crazy talk about $10k plus or more comes true…Then with fractional I still may be under the $10k reporting amount per coin…just a thought.

    • I contributed for years to a 401k only to see it decline 15% this past year.  After i switched jobs,  I rolled over to an IRA and bought miners. Doing way better by myself and I’m not charged fees to lose money.

      If you feel so adamant about PMs being money,  enough to own them,  why not own those miners who bring you the metals?

    • I totally advocate physical first… and I just added 120 walking libertys last night… but at some point if you have six figures plus you’re going to want to be in the miners… that is all. oh and please go long arms and canned food as well. thanks brothers.

    • “If you feel so adamant about PMs being money,  enough to own them,  why not own those miners who bring you the metals?”

      For three reasons:  1) I can hold physical PMs in my own hands while mining shares are pieces of paper that may or may not be honored when the SHTF; 2) mining company shares can go and have gone to zero in some cases while physical PMs never have; and 3) mining shares are a derivative of their own products, meaning that changes in gold and silver prices are magnified in the mining shares via leverage.  In some cases, a 10-15% rise or fall in the metal price can cause a 40-50% move up or down in mining share prices.

      While I am a stock investor with decades of experience, I know very little about the mining companies or the people who run them, so invest in other areas where I know more.  Mining shares are fine for those who know the mining business well and who invest a reasonable amount carefully.  That said, using a small amount of one’s “play money” to buy into the GDX or the GDXJ seems good to me.

      BTW, it is not at all unusual for company product and its share price to be at odds with each other.  Even a lousy company can come up with an occasional great product while a great company can come up with a real stinker of a product.  It’s unusual but it happens.

       

    • You can do the math yourself,  but i found great panther silver to be very sensitive to silver price changes. EXK is close behind.  I’m not sure if that’s what you mean by leveraged though,  I’m a stock newbie.

      Is FR, first industrial realty trust?

       

    • @Strannick,

      from the Stockhouse days I presume? Yes the FR.TO; First Majestic run. Looks like Keith Neumeyer is staying quite busy; just raised $50M in a share offer.

      As you say; all miners are not created equal; but the bankers sure did destroy much of the mining industry from 2012 through 2015… AG made the most of the downturn with key acquisitions. Regarding ‘leveraged’ plays available, one of the survivors; Alexco; kept their share structure reasonable via outside income in Environmental Services. For leverage to the silver price ~ AXU has drilling bonanza potential, and quick production restart in high grade ore if silver can continue to run. If it does, AXU will be a saucy little silver piggy bank.

      Elsewhere: ASM and Impact Silver for the low share floats, FSM, GPL, and EXK for growth and AG as the blue chip on dips. Of course there are many others; these are just a few I follow.

  5. If your Physical then sit back and injoy the show.  If you playing the casino games. It’s simple sell your stock and buy a shit load of Physical. If your all so rich on playing there game now stick it up there ass and wacky the coin dealers . Now you all are helping them sell out . Bang the premiums go 200% up. Guys there is no real physical one there . Sell your stock and load up. Look at it like Free Silver.

     

    Just a stacker that is here for the long haul just think what you can buy with the new form of money . Remember 500k  when everything is at a 75% discount.  It’s  a no brainer !

    Rulerman

    • I would not call these Masonic western oligarchs henchmen desperate simply because they have their heads so stuck up their own asses in search of their own light that they see only darkness  and so call it light  🙂

    • mort de rires / laughter died

       

      Love it … just to throw it out there … When Abrahams wife Sarah laughed to herself ( at the thought of having a child … seeing she was past childbearing years ) it is this thought which  revealed her nakedness ( as something less than Truth )  to be naked  in scriptural language means to be uncovered  or cast down which be the death of innocents ….

       

      Thanks you just made my day 😉

       

      I see the language of GOD in everything 🙂

    • @AGXIIK  I know the feeling. So many decisions on yellow or white, sizes, quality, recognizability (is that a word?) etc. My primary target is accomplished. I may have to change my name to AG1K, if you know what I mean.   _JOHNLGALT

  6. copy that @JOHNLGALT   Maybe once the GTSR hits 15 to 1  I’ll rotate slowly back into AU   My aching joints really detest lifting ammo cans out of the hidey holes and Truckee River bottoms.

    @MontanaMel keeps sending me notes about wonderful 8-12 passenger jets with low hours and excellent airframes for less than $1,000,000

    I had this weird thought.  what if we sold the big house and sold overpriced gold  I bought one of these very comfortable and well appointed executive jets,  converted half the seating area into a bedroom, put in a small kitchen, bigger lav and a wide screen TV.   What’s the difference in spending $1,000,000 for a jet and $1,000,000 for a super lux RV, aside from the fuel and pilot costs.  I mean, the overhead of a jet parked somewhere convenient, maybe get my pilot’s license (yeah right), it couldn’t be that dear.   Besides which, no more TSA and my homies can help with the freight

    We can all have our dreams   All I gotta do is see JNUG go to $1,000
    Maybe we can get personalized tail numbers. I’ll my big in for
    Mi Cheby

    • @AGXIIK  lifting ammo cans out of the hidey holes and Truckee River bottoms”.
      Thanks for reminding me, With me putting a quantity of the size of my stack on the Internet, and You Know Who monitoring these sites, I will have to hire a small boat. Accidents do happen you know.  
      Yes we have to hold onto our dreams, if we cease to dream what is the point of life?.  _JOHNLGALT

  7. @AGXIIK: They already have a small/microwave kitchen installed.. There are some really BIG ‘ol birds out there that are already converted to what you want… DC-8-62 comes to mind, a very low time B-747SP, some B-727’s and, of course, those nifty BBJ’s (factory built 737’s RV’s) Most can take 30-40 friends with you…one is only 19.
    The tough thing is finding one of those parking spots with electric and water, eh?…and, they have to be “pull-thru’s” so no tug is needed. Check-6

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