Eric Dubin (The News Doctors) and Doc or Silver Doctors, SD Bullion invited me on to their weekly Metals and Money Wrap last week. We discussed signs that show the gold/silver manipulators are losing control of their ability to control prices, the record amount of paper being thrown at gold and silver on the Comex, the current seasonal “lull” in the precious metals market and the latest developments on Japan’s TOCOM futures exchange which could have a big effect on the price of gold and silver. In short, we discussed why investors should be adding their positions on every price drop:
In fact, silver and gold were hit hard overnight last night (Sunday night, early Monday morning) and silver is now 40 cents off its low of the day and green vs its Friday close and gold is $8 dollar off its low of the day. Click on the link below to find underfollowed junior mining stock ideas with huge upside potential:
The Nikkei is down 3.7% right now, the dollar index is below 93 and the U.S. seems bound and determined to start World War Three. The U.S. is collapsing and everyone in the world knows it but the majority of the U.S. population. Hubris rules the day in the Democratic Party as Obama is going on a farewell tour around globe to tell everyone he saved the world and Hillary Clinton feels confident enough to commit any kind of crime under the sun and get away with it.
Hi Dave, I purchased a box of silver eagles on SD Bullion today! I also did the 250 strike on Amazon! Great report on Amazon! I’m really excited about the coins! Thanks for the help! I feel like I have taken a big step in protecting my family! Thanks, Jeff
I received that email yesterday from a subscriber to my Short Seller’s Journal. He made a $7500 profit on AMZN puts that I had recommended. He took the profits plus part of his original capital and bought a box of silver eagles from Silver Doctors (SD Bullion is the best source to buy silver eagles based on price and reliability of service – I receive no benefit from saying this but I’ve been buying silver for over 15 years and I know how to differentiate between good and bad coin dealers). He rolled the rest of his capital from the original AMZN put trade into the January 2017 $250 puts, which could end up being a home run.
There’s a rumor floating around the market that Google is looking at buying AIG. Remember AIG? AIG is the big insurance company that was taking insane risks in the subprime mortgage derivatives market. It blew up in 2008 and, in the process, had technically blown up Goldman Sachs. Ex-Goldman CEO, Henry Paulson, was strategically inserted into the Treasury Secretary post specifically to make sure that Goldman was bailed out when this happened.
AIG was also saved by the taxpayers. It’s businesses were reinflated by the Fed’s QE and it’s stock ran from $20 to a recent high last of $64. Carl Icahn, the quintessential stock operator took a stake in AIG in October and had been trying to force a break-up of the company. The stock is down over 18% since Carl announced his position in the stock. The Google rumors started flying around about a day ago. It has to be one of the most retarded ideas I’ve seen floated in quite some time. It reminds me of the “clicks and eyeballs” analysis to justify the bloated valuations on internet stocks back in 1999.
Carl Icahn makes mistakes. I took other side of one of his mistakes in the late 1990’s when he decided that taking control of the badly failing Stratosphere Casino in Vegas was a good idea. His idea failed miserably and I made a lot of money for Bankers Trust from shorting the daylights out of the Stratosphere first mortgage bonds, which ultimately were worth zero after trading as high at $110 (110% of par value).
My point here is that something not being mentioned anywhere is going with AIG’s financial stability. The credit default swap rate on AIG bonds has mysteriously shot straight up:
I have no idea what has the CDS market spooked. But I know from 1st-hand experience that credit markets tend to have information and “see things” well before the stock market sees it. Accounting disclosure, by design, has become catastrophically opaque in the financial sector. Anyone who has only access to the SEC-filed financial documents is seeing no more than a sliver of the truth about what is going on at AIG, or at any financial company for that matter.
Whether or not this will turn out be big mistake for Icahn remains to be seen. But anyone who is jumping on AIG because there’s a rumor that Google should buy it is ignoring the signal being broadcast by the CDS market. Often rumors designed to juice a stock are “coincidentally” floated at a time when someone privy to inside information decides that it’s time to get out of Dodge and needs an influx of “dumb” money to buy the stock so he can exit. The CDS market is suggesting this could be the case with AIG. We know Icahn is dumping AAPL right now…
This is the type of analysis and insight that subscribers to my Short Seller’s Journalreceive on a weekly basis. At some point I will wade knee-deep into AIG’s financials and see if I can figure out why the CDS market is so spooked because I know the original factors which sunk AIG the first time around have likely reappeared, in a different form, and AIG could well be an epic short opportunity.
I’m starting to warm up to the idea that the fraudulent silver price fix on the LBMA a couple weeks ago marked the final “capitulation” of the nearly 5-year price pullback in silver and 4+ year pullback in gold. We have yet to hear a satisfactory explanation from the LBMA for the exceedingly odd price behavior of silver seconds before the a.m. London silver price was set on January 28th.
I believe that event marked the “last gasp” effort by the highly corrupt LBMA bullion banks to shakedown the physical silver market in order to get their hands on as much physical silver as possible at as cheap of a price as possible. I believe, not uniquely by the way, that the synthetic short interest (paper derivatives shorts) in silver is even worse than for gold, which we know is at least 100:1.
Big banks hate losing money and will do anything – legal or illegal – to avoid losing money or to minimize losses. I saw this first-hand and peripherally participated in activities designed to minimize losses when I worked on Wall Street in the 1990’s. Everything is worse now in that regard and the people who are supposed to enforce the laws and oversee trading activities at these banks are now in on the corruption.
With that as the preface, I believe silver is beaten down and cheap relative to gold and any other investment alternatives and I think buying silver now – at it’s current price – will prove to be the trade of the decade.
Right now gold is outperforming silver on up-days BUT silver outperforms gold when the metals sell off. Typically gold will outperform silver in the early stages of a big bull market move. Gold current outperformance vs. silver is reflected in retail activity, as noted by Doc at Silver Doctors and some other bullion dealers to whom I spoken about the market recently, in which sales volume of gold coins is outpacing volume in silver.
But this will soon crossover as gold appreciates in price and waves of new buyers flock to silver rather gold because it feels better to buy more ounces of silver than gold. Silver is poor man’s gold and always has been for 1000’s of years. When this dynamic kicks in, the gold/silver ratio will drop quickly from its current 78x. I suspect before this bull market is over, the GSR will drop well below 20, if not 10.
We saw this in 2011, when silver began to go parabolic before the western Central Banks had seen enough and began to throw 100’s of tonnes of paper gold and silver at the market in order to not only prevent the metals from moving higher but to beat down the price on gold and silver to their current levels. In the bull move from late 2008 to April 2011, the GSR dropped from 100 to 32.
Eric Dubin and “Doc” hosted me for their weekly metals and markets podcast last week. We discuss a range of topics but focus on the precious metals. Note: I mention a new emerging junior exploration silver miner that I featured in a recent issue of my Short Seller’s Journal. Anyone who subscribes to the SSJ and mentions that they heard about it on the Silver Doctors podcast will receive a copy of that back-issue when they subscribe:
Doc from Silver Doctors invited me back on to his weekly market wrap to discuss the extreme manipulation in the precious metals market. In addition to the massive imbalance between paper gold/silver and the above ground available for supply for delivery should a lot more paper longs demand delivery, the potential exists for the mother of all short squeezes in gold and silver.
We also discuss India’s current demand, which is misunderstood and subjected to highly misleading media reporting by the likes of Reuters, Bloomberg and the World Gold Council. I explain why this is the case and why India gold demand is significantly higher than is currently reported.
Other topics include the why Glencore could potential an OTC derivatives catastrophe and potential black swan events that could appear before the end of 2015:
I was exchanging emails with “Doc” of SilverDoctors.com and SD Bullion about market conditions today. I wanted to share what he said about the silver market today:
That said, this market is insane right now. We’re seeing an easy 8-10 fold increase in order volume and sales. Premiums have moved big time in the past 24-48 hours…looking like my forecast that we could be looking at 2008 style premiums in the metals could be in the bag if we get any further price weakness below $14…
…things finally went nuts today. Wholesalers and mints raising prices and extending delays by the hour, and to quote the head of one of the largest precious metals trade desks in the US: “we just cant get people to stop buying silver!”
People also need to recognize that the gold and silver shortage is real. We’ve got the Royal Canadian Mint, for example, not being able to supply silver coins without a lengthy time delay…Eric, you and I believe the metals are headed for a complete turnaround that’s going to astonish everybody. If we look at the 90 percent junk silver bags. I deal with one of the largest companies in the world and what we are seeing is what I call ‘The 90 percent factor.’ Historically, when gold and silver are set for an explosive move, 90 percent bags become virtually unavailable.
When the biggest suppliers in the industry, and I’m talking directly with two of them, are saying ‘We can’t even get 90 percent bags and we probably won’t be able to fulfill any order for at least 8 – 12 weeks on those,’ you know we have serious supply problems. So 90 percent bags are virtually unavailable at these prices and those who are primary dealers in them can’t even acquire them. – Steve Quayle on King World News
The Federal Reserve and the bullion banks are now blatantly manipulating the price of gold and silver using paper gold and silver, which can be printed in unlimited supply. They no longer try to hide or disguise their operation and certainly never deny that they are constantly intervening in every market – not just the precious metals – in order to disrupt and prevent the valid price discovery mechanism of free markets.
I’ve always said that 90% bags are the leading indicator of impending market shortages…we saw that the week before the big smash-down in the silver price the first week of July, when premiums on 90% bags spiked. Then around July 6th or 7th, 90% bags went “no offer” at the largest market maker of 90% bags in the U.S. at the wholesale level. And it’s been “no offer” ever since. – Doc from Silver Doctors on Shadow of Truth
I used the quote at the top because it independently confirms everything we heard from Doc at Silver Doctors today, who told us that across the product spectrum silver coins are selling out at the wholesale level. The only reason this can be occurring is because there’s a shortage of unrefined silver that has developed globally.
The U.S. mint production has been going down about 20% per week. The first week they resumed sales the total allocated to authorized dealers was 1.4 million coins, the next week it went down to 1 million, last week it was down another 20% and I haven’t heard the number yet for this week. The Royal Canadian Mint didn’t take any orders last week and they’re not advising when they’ll resume taking orders for maples. – Doc
China and India are primarily attributed with importing most if not all of the annual mined supply of gold for the past couple of years and both are on track to import a record amount this year. But very little is mentioned about their silver consumption. India is on track to import a record amount of silver and China is using all of its internally mined silver to supply its massive solar program (see this SoT podcast: Solar Energy Drives Silver Demand).
The reason it’s important to understand the retail demand function for silver is because, at the margin, it will be the retail investors who will “tip the scale” on the Government’s silver manipulation operation and force shortages that will overwhelm the naked paper short interest, both on the Comex/LBMA and in the OTC derivatives market.
Rory and I visited with Doc today because we wanted to hear first-hand about what he’s seeing in the markets which feed into the retail supply for silver investment products. The only time premiums across the board for retail silver products were higher than they are right now was during the 2008 take-down of gold and silver. There were a lot less retail participants back then, which means that the current market has been set-up to become even more extreme than it was in 2008.
Of course, do not overlook the fact that the price take-down and shortage of metals back then preceded the Great Financial Collapse, because we know that current fundamental conditions are worse than they were in the period leading up the de facto collapse of the financial system.