Re: MIDAS SNIPPETT >> Great Read... Thanks ..
in response to
by
posted on
Oct 21, 2011 12:57PM
We may not make much money, but we sure have a lot of fun!
Why is gold getting terrorized? Because, yes, it is that bad out there and the Obama Administration will have no choice but to use fiscal/monetary measures like never seen before. Therefore, they want the price of gold as far down the pike as possible before, and as, they make their moves.
James Mc in late...
NON volatile silver
Bill,
I thought I would give you a small sampling of the research I have been doing on the CME's use of margin as a manipulation. The CME claims extreme volatility and dangerous over-leverage as criteria for raising margins. In the following table you can see that is just plain false. In fact in the period from November 11th, 2010 to April 29th of this year silver rose 258%, yet incredibly the leverage ratio essentially remained flat. All along the leverage ratio remained far below other commodities that are trading at this very minute. Silver at $48 was no more over leveraged than when it was at $7. I have listed the dates of the CME silver margin hikes, the amounts, along with the spot price and leverage ratio.
Note that during this entire period silver never remotely got over leveraged. Note too the CME mysteriously(?) LOWERED silver margins on April 29th, just prior to their big rapid-fire margin hike takedown in May. Silver margins were not only reasonable at $48 compared to the rest of the CME commodity leverages, they were if anything a bit low. Even with the recent gold margin hikes gold is still leveraged at 14.10 - 1, or dead in the middle of where silver was during its rise from $18 to $49. If you look at leverage as a criteria silver's rise was orderly, controlled, and in no way volatile. Silver margin currently at $24,975 is almost 240% HIGHER than when silver was close to this price back on December 17th, 2010. Their can be no other explanation for this other than extreme fear of physical shortage. The CME's current punishing leverage clamp is very similar to 2008, when they also brought silver leverage down to 5 - 1. As we know that helped the cartel smash silver all the way down to $8.90 from $20. I realize one argument for lower leverage at higher prices is the increased dollars at risk for the same leverage, but if that's true why are Treasuries allowed such high leverage now that they've soared to 140?
Silver could be trading at $80 right now and still be only modestly leveraged at 16 - 1. Silver would need to be between $150 and $200 to be afforded the same leverage as the Dow or Treasuries. See how rigged margin policy is? Imagine what the price of silver would be if spec longs had a virtual floor of 38 - 1 leverage. If they ever tried that the Comex silver inventories would get cleaned out in an algosecond. The CME and MSM have used spin to bamboozle the public into believing silver is dangerously volatile. Leverage data, however, says otherwise.
James Mc
Oct. 19, 2011, 11:54 a.m. EDT
News flash: Banks have cozy relationship with Fed Commentary: GAO report opens window on an exclusive club
By MarketWatch WASHINGTON (MarketWatch) — Here’s a news flash for anyone who hasn’t been paying attention: Big banks have cozy relationships with top governmental officials. That’s the conclusion of a new report from the Government Accountability Office on conflicts of interest at the Federal Reserve during the chaotic months in late 2008 when financial panic gripped Wall Street and the banks received trillions of dollars of emergency loans from the Fed as a life-saving transfusion. … -END- Powerful Stuff From Senator Bernie Sanders Hi Bill: GAO Finds Serious Conflicts at the Fed
ozy-relationship-with-fed-2011-10-19
Know you're very busy, but thought I'd pass this along anyway.
Powerful stuff from Senator Bernie Sander's government website today.
At the bottom of the article you'll find the link to the actual GAO pdf document.
Respectfully,
Edward Ulysses Cate
GOLD/SILVER
CFTC position limits and what it may do to raise silver prices
By George Maniere One of the best parts of writing is that I get so many great ideas from my readers. The readers of this site are some of the smartest people I have ever spoken with. Even the people who have never traded bring a fresh and new prospective to the way I see the market. Yesterday I was proved right and completely blown away by a post from a reader. I did some homework on other sites and the probabilities of his post being accurate are 80%. So let’s get to it because I think you are going to like his thesis. The Commodity Futures Trading Commission (The Cartel) on Tuesday approved a much-debated, long-delayed rule designed to curb bets on oil, gold, and in particular silver. CFTC Chairman Gary Gensler said the limits will protect the markets. The 3-2 vote—cast along party lines—illustrates how divided regulators remain over the role of government in the markets. The debate leading up to the vote also shows how even some CFTC commissioners supporting the rule think it may not have the desired effect. Opposed by Wall Street and in particular JP Morgan Bank the rule aimed at capping the positions firms can take in certain commodity contracts in order to curb sharp price increases. The rule gained traction in Congress during a price spike in 2011, which some attributed to excessive speculation by short-term traders. Along with a number of other rules, it was mandated by the Dodd-Frank financial-regulatory overhaul. So finally position limits in silver will be enforced. Will there be delays? Of course and you can bet your bottom dollar that the Cartel will be out in force with their lawyers challenging the ruling. However, there is a very high probability that on a beautiful day in 2012, JPM, et al will finally be feed of its shackles and the price of silver will move dramatically higher. Don’t think this will happen smoothly. Beginning today, all bets are off. As of last Tuesday’s Commitment of Traders survey, the commercial short position in silver was 58,000 contracts. At 58,000 contracts the speculation is that the short position is still between 15,000 and 20,000 contracts. Clearly, they have a lot of work to do to bring themselves into compliance. As you are aware if the go blindly covering short positions they will drive the price of silver higher and higher and create steeper and steeper loses. They are going to want to continue to inspire more and more selling at lower prices in order to cover their shorts. JP Morgan need to force silver lower in the days and weeks ahead otherwise they will be in the position of covering thousands of contracts at steep losses. The question is how do they get people to sell? The answer is simple. Let the CME do the dirty work. Remember the CME only raises margins in response to volatility. If the Cartel can create enough volatility the CME will be forced to act. So the answer is simple: to create unprecedented volatility. Eventually two will have been accomplished: 1) JP Morgan will have extricated themselves from the short position and brought themselves into compliance with the position limits today. 2) To help avoid a subsequent run on the CME – owned COMEX, margins will have been increased so significantly during the process the COMEX will have made the leverage will have dropped 3 to 1. This will have made the COMEX a physical only exchange. Making the COMEX a physical only exchange will preserve the viability of the exchange and limit future liability of the CME Group. Now here is what you have to do: 1) Don’t get caught up in the wild volatility, emotion and disinformation of the next three to six months. When the silver you bought for $36.00is now $22.00 keep in mind that this is a plan that will pay off handsomely in the end. You must have faith and confidence that you are right and will prevail in the end. 2) Set up a disciplined, regular physical purchase plan. You should make it a priority to buy some physical silver every week until the limits are finally enacted. Because silver will become a physical, spot priced market, you can rightfully expect significant price increases in 2012. Unencumbered by suppression, their will begin to be true price discovery. Does this mean that and silver will finally revert to 16or 12 to 1? Yes, it probably does. When will it happen? There are too many variables to hazard a guess but the day is coming. Please see the chart below In conclusion,
1) Violently manipulate
2) Have the CME raise margin rates again in response to this volatility.
3) Use dips I price to quickly cover short positions.
4) If Cartel buying spikes price back up, this added volatility will force additional margin hikes.
Courtesy: http://investingadvicebygeorge.blogspot.com/