I was speculating on the Cafe last week that a margin increase could be coming, just because the silver stocks were under pressure and appeared to be heavily shorted. I still think a snap increase will be announced as a means to try and shake out some of the open interest, but it also should be considered that those who intend to stand for delivery will be fully funded and thus a margin increase is irrelevant to them. If the intention is to prevent a delivery default, increasing margin may still help to force underfunded specs to sell and drive down the price of silver below the strike price for some contracts. That is the only benefit that I could see for the short term strategic objective of the Cartel. Either way I think they are screwed and the real shortage of silver is going to be exposed some time this year through a delivery default. It will be explained as something else and excused by the market apologists but it is coming.

I do not think a margin increase is coming today. SLW is up sharply and has been strong for several sessions. Several other silver juniors are also outperforming the sector today. A margin increase will be seen as short term bearish for the entire sector. If indeed there was any consideration of this rumor, there is no way the silver market leaders would be trading higher on such strength today, IMO. People would not be posting such info on a public forum if it were true, they would be shorting the hell out of the producers to bag a huge profit the next day.

cheers!

mike