<<When the profit margins are under stress, why just sell tons of the precious metals , that do not really exist>>
I'm guessing the word "not" was unintentionally omitted from the sentence above, between the words "why" and "just"? Either way, if it were that easy to short precious metals and profit from it, why do so only "when the profit margins are under stress"?
When the profit margins are under stress, why just sell tons of the precious metals , that do not really exist
If profit margins are under stress then that implies that either costs are too high or prices are too low. I really dont understand how flooding the market would improve your position. Must have been that 7:30 econ class that I always skipped. LOL
There are 2 markets, the spot market and the futures market. They both affect each other. Here's is how the game is played. The big boys will buy spot gold , the price goes up. Then players see the price rising so they buy small spot but mostly futures contracts. These contracts are sold by the big boys and they are "short" positions to them. Effectively they have sold gold they don't have to be delivered at a future date. If the price of gold is higher on the date the contract is due the buyer makes money. If the price is lower then the contract expires and the "short" makes the money. The biggest seller of shorts on gold is Goldman Sachs (ring a bell) and JP Morgan.
Now when the contract is coming due, these guys "dump" spot gold on the market and drop the price, making much more on the futures contracts than they lost on the spot sale. Then things level off and the game starts again.
BUT...what happened recently was a major spike(probably Russian and Iran buying) and the shorts were in way too deep, hundreds of dollars an ounce times millions of ounces. They tries to sell short 2007 contracts but still couldn't bring the price down. Well, they got in touch with their crownies, The Bank of England for one, maybe the Federal Reserve as there is no accounting for the Ft Knox gold and they probably leased some gold from a bank that still shows it in inventory. (Remember there are GS boys in top financial positions around the world, not just the US treasury.) They also took delivery on a lot of spot silver from COMEX the last 2 weeks.
They then coordinated a massive dump of spot metals. The longs paniced and sold also. While the spot prices caved and futures holders were trying to sell out fast, guess who was buying to cover their short positions??
Conspiracy theory?? No, just business in the real world. BTW, futures contracts are public record, do some research and you'll see who was buying when the little guy was selling.
When the profit margins are under stress, why comma just sell tons of the precious metals , that do not really exist.
actually, when i read the post by Bear i assumed he meant it to be phrased like above, with a comma after "why" in the sentence. of course it could also be phrased without the word "why" to accomplish what i think he was saying.
then again, i could be wrong since my name is keets and not Svengali.
BUT...what happened recently was a major spike(probably Russian and Iran buying) and the shorts were in way too deep, hundreds of dollars an ounce times millions of ounces. They tries to sell short 2007 contracts but still couldn't bring the price down. Well, they got in touch with their crownies, The Bank of England for one, maybe the Federal Reserve as there is no accounting for the Ft Knox gold and they probably leased some gold from a bank that still shows it in inventory. (Remember there are GS boys in top financial positions around the world, not just the US treasury.) They also took delivery on a lot of spot silver from COMEX the last 2 weeks
Way too much speculative reasoning.
BTW, futures contracts are public record, do some research and you'll see who was buying when the little guy was selling.
here is a link to some well worded explanations. They also have some guys who have provided readouts from Comex and TOCOM. You will need to read for a while to find what you want. I won't do your research for you. When you've read all this and researched some more, then tells us what you found.
<< <i>Way too much speculative reasoning >>
Ask yourself this question.
Do you think they guys just sit in their offices and take their losses like good boys or do you think they would be "calling all cars" to minimize losses and maximize profits. With billions on the line and friends in high places, I can guess how it would go down.
The Federal Gov't has been telling the world that inflation is "tame", look at the CPI etc. The biggest barameter of inflation is gold. Gold is a threat to "the big lie". Gold had to be taken down. Who better to get the job than a guy who used to lead the commodities division of Goldman Sachs, the biggest gold short and manipulator around. Paulson got the job as Treasury Secretary and gold started falling. He helped the company and the US. He is a master at currency and commodity manipulation.
Anyone care to speculate why a guy who chased money all his life left a job paying hundreds of millions to work for the US at 100K a year??
Please don't say he thought he had enough money already, those guys NEVER have enough.
GS jumped in on a play by the Bank of England which sold gold to help drive copper prices down. What a great opportunity and it was not passed up. The London Metals Market was getting awfully close to collapsing under rising copper futures. Since there was no copper to sell, they went after gold. The BOE accomodated the shorts who were bleeding. The Hedge funds saw the sharp U-turn and the electronic boxes all went wild to bail at the same time. From $730 to $550 all based whims.
The same type of volatility will occur again and again in both directions.
Gold has always been volatile. I wonder how the recent movements compare to a band within the norm, with, say, a 90% confidence. Are those movements statistically significant (i.e., can you say with a 90% certainty that they are beyond the normal volatility)? I doubt it.
What it looks like to me (10% of my wealth - well, slightly less now - is in gold btw), is a classic protracted ramp up followed by a sharp fall. It's not something we need conspiracy theories to explain.
What I also find interesting is to hear the most enthusiastic gold advocates claiming that the market is being and has always been manipulated. If they know this to be true, how can they be such strong advocates?
"The greatest productive force is human selfishness." Robert A. Heinlein
<< <i>... Anyone care to speculate why a guy who chased money all his life left a job paying hundreds of millions to work for the US at 100K a year??
Please don't say he thought he had enough money already, those guys NEVER have enough. >>
Power. It is the same reason Rockefellers went into politics, Kennedys too. Money can only buy so much. Political power satisfies ego, and gives a chance at a historical legacy. To be remembered as a rich person doesn't mean much. Being a famous politician can often leave a story for the history books. Why do people like Arnold Schwarzeneggar give up a cushy job being a public figure making seven or eight figures for a relatively low paying government job with no job security? There are many more like him. Unless a person is a hedonist or wants to be a philantropist, there isn't that much left to do after getting that big pile of money.
I find this thread to be very funny. Really smart people that can manipulate multi-billion dollar markets can run rings around conspiracy theorists. Intelligence operatives learn very quickly to divulge certain pieces of information, some true, some half-true, some absolutely idiotically false, and 95% of these leads will bring a logical person to a false conclusion no matter what interpretation is taken. Given that, I put it at about 5% that any published conspiracies about specific forms of manipulation being true or close to true. There may be manipulation going on, but the real story of how and why and when will never get out and if it did, would never be believed by the conspiracy folks.
I shy away from fast markets. If there is manipulation, I want to be on the same side as the smart guys/gals doing the manipulating, not the folks cooking up theories that have little chance of being close to the truth.
Coynclector.....I finally had some time to review the links you posted. The first link I have completely dismissed as it appears to be a propaganda newsletter. I am looking for cold hard fact published by a non-profit, non biased entity.
I have reveiwed the info in the second link and find it helpful. The bullish sentiment, which I believe you were referring to, has been between 80 and 85% for the past 2 years. Also the number of short contracts has consistantly been between 10-15 greater than the long contracts over the past 2 years. I can find no evidence that there has been massive shortselling, nor that Goldman Sachs is manipulating the markets. I also see no evidence that the Bank of England, Russia, or Iran are manipulating the markets.
As far a Goldman Sach's financial report. They break their business down into segments. Commodity trading falls into their Fixed-income, Currency, and Commodity group. When you back out a gain of $700 million from the sale of a power plant, their revenues were actually below last quarters results. Perhaps GS is not so omnipotent.
cohodk........glad you took the time to look. If you agree or not I hope it provided a view different from the mainstream media. I hope you dismissed it after you read some. If you wanted to dismiss all propaganda newsletters you might start with MSNBC, Yahoo and the Wall Street Journal. They all cater to special interests.
As RR says, it appears this crash started with the BoE trying to bail out some shorts and the gold shorts saw an opportunity. The funds and small speculators just jumped in panic.
<< <i>Anyone care to speculate why a guy who chased money all his life left a job paying hundreds of millions to work for the US at 100K a year?? >>
Here is your answer
There is a law that says that if a newly appointed govt official sells stock in order to avoid a conflict of interest then they don't pay tax on the gains. Since Paulson had about 400million in GS stock he got from options one can only guess how much he saved in taxes.
It is not a stretch to suppose that, at the margin, the chance to unwind his stake in Goldman Sachs tax-free may have had an influence on his decision to take the Treasury job. After all, if he were to completely divest himself without any tax relief, he would be staring at a tax bill of well over $100 million, Willens says.
<< <i>There is a law that says that if a newly appointed govt official sells stock in order to avoid a conflict of interest then they don't pay tax on the gains. Since Paulson had about 400million in GS stock he got from options one can only guess how much he saved in taxes. ... After all, if he were to completely divest himself without any tax relief, he would be staring at a tax bill of well over $100 million, Willens says. >>
I didn't know this. If true, it's an extremely valuable fringe benefit! In his case, he might as well reduce his pay to $1 a year...
"The greatest productive force is human selfishness." Robert A. Heinlein
Coynclector....Believe me....the second to last source in which I place unbiased credibility is the mainstream media.
it appears this crash started with the BoE trying to bail out some shorts and the gold shorts saw an opportunity. The funds and small speculators just jumped in panic.
Where is the information about the near collapse of the London Metals Market posted? I would be interested in reading this and knowing about its source.
I can assure you though you won't find any "official" announcements from the LME or the Bank of England particularly after they got in trouble over their last major gold sale at ridiculous prices.
In the end you can call it all "bull" but don't thing these things just "happen", there are people in high places playing lots of manipulations.
There are a few rules to this game that everyone here needs to pay attention to so that none of us lose any money.
First you must decide who you are, and why you are in this market to begin with.
Are you a speculator? If you are get your computer tuned up, and your gambling money of the desk, and go for it!
If you are an investor, looking out just a few short years, then buy numismatic generic gold as close to spot as you can.
If you think that we here in the U.S. have some serious future problems to over come, and you would like some of your money in hard assets then just keep buying what you can, and do not pay any attention to these crazy moves.
There is a way to be an investor, and take advantage of the speculators and the central banks manipulation. Play opposite to their moves.
Both gold and silver are finite markets, they are not like stocks and paper money. Even those in power cannot make more.
The greatest advantage an investor has in this market is TIME. Manipulators and speculators have itchy trigger fingers. They cannot stay short more than a few weeks until they are mentally forced to pull the trigger on something else.
Unlike the years of the 80’s and 90’s when our own government could hold the prices of metals in check for long long periods, that time is over. We are now in a world global economy, and going forward places like China, India, and the Middle East are going to have a great deal to say about oil prices, and metals across the board.
Jim Sinclair posted an interesting story a few weeks back about the Iranians trying to buy 700 tons of gold in December and have it shipped to Iran. The most their Swiss bankers could come up with at that time was 200 tons, and the rest of the order could not be filled.
Just because we have all these CRAZY rules on Wall Street allowing people to buy and sell things that DO NOT exist does not mean you must fall for all the day to day BS in these markets!
<< <i>What exactly does that mean? How does a market collapse? Are you saying that they were about to have to suspend trading? >>
That means that some heavy traders sold more copper than there is in the warehouse to deliver and delivery time is near. In addition, they may have such a huge margin that they don't have the cash to cover and they would "default" on their obligation causing a major ripple in the derivatives market, or they would not have the cash to pay the warehouse for the metal they needed to ship. All adds up to a lot of buyers not getting what they bought.
Remember that most of these shorts are "naked shorts" which means they have sold metals to be delivered which they don't own and have no way of getting. They are gambling the price will go down so they don't have to deliver or they might settle in cash without any metal changing hands. If they do have to deliver , they can buy it from the warehouse. That's the most corrupt part, the ability to sell metal you don't own and have no mining ablity to produce.
For example:
"During the June 14th TOCOM session the seven large gold shorts increased their net short position to a total of 127,903 contracts." at 100oz per contract , that's 12,700,000 oz of gold sold by guys who don't own any and who don't mine any. In addition, The TOCOM warehouse does not contain even 1/10 of that.
Well put, GOLDSAINT. This recent correction should mean little to the investor and the person who wants to just have some hard assets in their basket. This is a game the speculators play, and it is a game that will continue to be played into the future.
We tend to forget.... that we ourselves can play a part in this game. The best way to foil the cartel manipulators? Just buy, and hold. The more physical metal that is taken off the market, the less control the cartel will have and more difficult it will be for them to cover their positions. Although it is true it is now a world market, I also believe that steady purchasing by many over the last 5+ years by the many smaller individuals played a significant role in helping to break the cartel in gold and silver.
And don't 'blink' when the cartel pulls one of their manipulations, like what just happened! That is what they depend on, to make you blink and panic and sell. And play right intotheir hands and into their pockets.
Much discussion has been given over the past year or so on this board, about the fundamentals of why gold and silver are vastly underpriced, etc. Aren't those same fundamentals still in place? To my knowledge, they still are.
...a classic protracted ramp up followed by a sharp fall. It's not something we need conspiracy theories to explain
Conspiracy, manipulation, or "smart" trading this is what all the major players do, included GS, Citi, JPM, etc. It's hard to put a finger on any one word to describe it. Suffice to say it means they have an advantage and can turn markets at times. Toss in the Treasury's Plunge Protection Team that probaby works through GS and others and you many means to try and move prices.....in the short term. Long term, they have no choice but to follow as the markets will go where they want.
There have been many examples of "odd" short selling on the Comex by major players. Whether it occurs at 10 minutes to close or what have you, they are examples of trying to move the market on "air" rather than by substance. Cruise the gold websites, several linked below, and you will eventually find things that go far beyond normal probabilities. GATA has also identified these when they are too obvious. I recall reading one article about 2 years ago which described a "pattern" of short selling that had a random probability about a fraction of 1%. Back then the major anti-gold players had an unwritten rule to not allow more than about a $6 per day climb in gold price. The fall could be anything. Even the gold miners loved this since they pocketed billions from playing the no lose carry trade. That $6 rule was smashed sometime last year. But odd that for several years gold could "only" move $6 a day....and on days when the president publically spoke, the dollar went up and gold went down. Those "trading" days are essentially gone.
I really see no end to the manipulation. As long as they control the exchanges and make the rules then they can profit by rigging things, It won't matter if gold is 550 an ounce or 3000 an ounce, until the SEC or some other group busts them for antitrust violation or one of the other major laws they break, the game will go on.
The little man rules are simple
don't play futures or buy on margin take physical delivery and play for the long game.
Sorry for my delay in responding, but honestly I wanted to let my Ebay auctions finish this weekend before I posted this reply.
According to an article I posted out of Money magazine last week on the GOLD & SILVER thread, copied below. There are currently 15-20 million SERIOUS coin collectors in the U.S. In addition there are 140 million casual collectors.
Lets forget for a minute that there are any causal collectors worth discussing. Lets also forget about any foreign investors, or collectors. Lets just say that out of the lowest number of 15 million these collectors decide that the time to buy a nice heavy gold modern U.S. coin is at hand. Whether their reason is because of some economic panic, or just an inflation hedge, or to add this one-ounce coin as a type coin. What would happen? Very simply there would not be nearly enough coins to go around, leaving nearly one third with nothing to buy!
Using the Redbook as well as the U.S. mint records there have been approximately 11,282,922 $50 Eagles minted in both MS and Proof from 1986 through 2006.
There seems to be some discrepancy in the mintages reported in the Red Book and those reported by the U.S. mint website. For example the Red book has mintages of the 1993 $50 Eagle at 480,192 MS coins and 34,389 proofs or a total of 514,581. The U.S. mint reports a combined total of 439,000.
Perhaps these shortages can be attributed to coins unsold and melted for new issues, I really do not know.
Now if we also figure that some 5% are lost, burnt up, destroyed on 911, by hurricanes, made into jewelry, etc. that leaves 10,718,776 coins in all grades for the 15 million collectors to try to buy one each. This is just one example of the problems we as collectors may face over the next few years.
These coins in MS and PR 69 have been selling on Ebay, certified, for very close to spot plus the slabbing fee.
Comments
<< <i>who was being manipulated?
everyone who was in at $700. >>
Not $701 or $702?
<<When the profit margins are under stress, why just sell tons of the precious metals , that do not really exist>>
I'm guessing the word "not" was unintentionally omitted from the sentence above, between the words "why" and "just"? Either way, if it were that easy to short precious metals and profit from it, why do so only "when the profit margins are under stress"?
If profit margins are under stress then that implies that either costs are too high or prices are too low. I really dont understand how flooding the market would improve your position. Must have been that 7:30 econ class that I always skipped. LOL
Knowledge is the enemy of fear
There are 2 markets, the spot market and the futures market. They both affect each other. Here's is how the game is played. The big boys will buy spot gold , the price goes up. Then players see the price rising so they buy small spot but mostly futures contracts. These contracts are sold by the big boys and they are "short" positions to them. Effectively they have sold gold they don't have to be delivered at a future date. If the price of gold is higher on the date the contract is due the buyer makes money. If the price is lower then the contract expires and the "short" makes the money. The biggest seller of shorts on gold is Goldman Sachs (ring a bell) and JP Morgan.
Now when the contract is coming due, these guys "dump" spot gold on the market and drop the price, making much more on the futures contracts than they lost on the spot sale. Then things level off and the game starts again.
BUT...what happened recently was a major spike(probably Russian and Iran buying) and the shorts were in way too deep, hundreds of dollars an ounce times millions of ounces. They tries to sell short 2007 contracts but still couldn't bring the price down. Well, they got in touch with their crownies, The Bank of England for one, maybe the Federal Reserve as there is no accounting for the Ft Knox gold and they probably leased some gold from a bank that still shows it in inventory. (Remember there are GS boys in top financial positions around the world, not just the US treasury.) They also took delivery on a lot of spot silver from COMEX the last 2 weeks.
They then coordinated a massive dump of spot metals. The longs paniced and sold also. While the spot prices caved and futures holders were trying to sell out fast, guess who was buying to cover their short positions??
Conspiracy theory?? No, just business in the real world. BTW, futures contracts are public record, do some research and you'll see who was buying when the little guy was selling.
$3.00 gas...oh me oh my
actually, when i read the post by Bear i assumed he meant it to be phrased like above, with a comma after "why" in the sentence. of course it could also be phrased without the word "why" to accomplish what i think he was saying.
then again, i could be wrong since my name is keets and not Svengali.
Way too much speculative reasoning.
BTW, futures contracts are public record, do some research and you'll see who was buying when the little guy was selling.
Could you please provide a link?
Knowledge is the enemy of fear
here is a link to some well worded explanations. They also have some guys who have provided readouts from Comex and TOCOM. You will need to read for a while to find what you want. I won't do your research for you. When you've read all this and researched some more, then tells us what you found.
<< <i>Way too much speculative reasoning >>
Ask yourself this question.
Do you think they guys just sit in their offices and take their losses like good boys or do you think they would be "calling all cars" to minimize losses and maximize profits. With billions on the line and friends in high places, I can guess how it would go down.
GS just posted record profits.
Commitment of Traders... COT
You can note changes in sentiment if not hobnob with the elite.
you expect me to know what I mean.
Camelot
The Federal Gov't has been telling the world that inflation is "tame", look at the CPI etc. The biggest barameter of inflation is gold. Gold is a threat to "the big lie". Gold had to be taken down. Who better to get the job than a guy who used to lead the commodities division of Goldman Sachs, the biggest gold short and manipulator around. Paulson got the job as Treasury Secretary and gold started falling. He helped the company and the US. He is a master at currency and commodity manipulation.
Anyone care to speculate why a guy who chased money all his life left a job paying hundreds of millions to work for the US at 100K a year??
Please don't say he thought he had enough money already, those guys NEVER have enough.
The same type of volatility will occur again and again in both directions.
roadrunner
What it looks like to me (10% of my wealth - well, slightly less now - is in gold btw), is a classic protracted ramp up followed by a sharp fall. It's not something we need conspiracy theories to explain.
What I also find interesting is to hear the most enthusiastic gold advocates claiming that the market is being and has always been manipulated. If they know this to be true, how can they be such strong advocates?
Robert A. Heinlein
<< <i>The London Metals Market was getting awfully close to collapsing under rising copper futures. >>
What exactly does that mean? How does a market collapse? Are you saying that they were about to have to suspend trading?
Robert A. Heinlein
<< <i>...
Anyone care to speculate why a guy who chased money all his life left a job paying hundreds of millions to work for the US at 100K a year??
Please don't say he thought he had enough money already, those guys NEVER have enough. >>
Power. It is the same reason Rockefellers went into politics, Kennedys too. Money can only buy so much. Political power satisfies ego, and gives a chance at a historical legacy. To be remembered as a rich person doesn't mean much. Being a famous politician can often leave a story for the history books. Why do people like Arnold Schwarzeneggar give up a cushy job being a public figure making seven or eight figures for a relatively low paying government job with no job security? There are many more like him. Unless a person is a hedonist or wants to be a philantropist, there isn't that much left to do after getting that big pile of money.
I find this thread to be very funny. Really smart people that can manipulate multi-billion dollar markets can run rings around conspiracy theorists. Intelligence operatives learn very quickly to divulge certain pieces of information, some true, some half-true, some absolutely idiotically false, and 95% of these leads will bring a logical person to a false conclusion no matter what interpretation is taken. Given that, I put it at about 5% that any published conspiracies about specific forms of manipulation being true or close to true. There may be manipulation going on, but the real story of how and why and when will never get out and if it did, would never be believed by the conspiracy folks.
I shy away from fast markets. If there is manipulation, I want to be on the same side as the smart guys/gals doing the manipulating, not the folks cooking up theories that have little chance of being close to the truth.
I have reveiwed the info in the second link and find it helpful. The bullish sentiment, which I believe you were referring to, has been between 80 and 85% for the past 2 years. Also the number of short contracts has consistantly been between 10-15 greater than the long contracts over the past 2 years. I can find no evidence that there has been massive shortselling, nor that Goldman Sachs is manipulating the markets. I also see no evidence that the Bank of England, Russia, or Iran are manipulating the markets.
As far a Goldman Sach's financial report. They break their business down into segments. Commodity trading falls into their Fixed-income, Currency, and Commodity group. When you back out a gain of $700 million from the sale of a power plant, their revenues were actually below last quarters results. Perhaps GS is not so omnipotent.
Knowledge is the enemy of fear
As RR says, it appears this crash started with the BoE trying to bail out some shorts and the gold shorts saw an opportunity. The funds and small speculators just jumped in panic.
<< <i>Anyone care to speculate why a guy who chased money all his life left a job paying hundreds of millions to work for the US at 100K a year??
>>
Here is your answer
There is a law that says that if a newly appointed govt official sells stock in order to avoid a conflict of interest then they don't pay tax on the gains. Since Paulson had about 400million in GS stock he got from options one can only guess how much he saved in taxes.
For those who need a show me
It is not a stretch to suppose that, at the margin, the chance to unwind his stake in Goldman Sachs tax-free may have had an influence on his decision to take the Treasury job. After all, if he were to completely divest himself without any tax relief, he would be staring at a tax bill of well over $100 million, Willens says.
<< <i>There is a law that says that if a newly appointed govt official sells stock in order to avoid a conflict of interest then they don't pay tax on the gains. Since Paulson had about 400million in GS stock he got from options one can only guess how much he saved in taxes.
...
After all, if he were to completely divest himself without any tax relief, he would be staring at a tax bill of well over $100 million, Willens says. >>
I didn't know this. If true, it's an extremely valuable fringe benefit! In his case, he might as well reduce his pay to $1 a year...
Robert A. Heinlein
it appears this crash started with the BoE trying to bail out some shorts and the gold shorts saw an opportunity. The funds and small speculators just jumped in panic.
Where is the information about the near collapse of the London Metals Market posted? I would be interested in reading this and knowing about its source.
Knowledge is the enemy of fear
I gave you a link to one source you dismissed as "propaganda". Here is a link to another
forum
which could easily be dismissed also. I don't know what you would want.
forum
MIDA also has some postings on it
I can assure you though you won't find any "official" announcements from the LME or the Bank of England particularly after they got in trouble over their last major gold sale at ridiculous prices.
In the end you can call it all "bull" but don't thing these things just "happen", there are people in high places playing lots of manipulations.
Gold is moving back up today and is at $580.
There are a few rules to this game that everyone here needs to pay attention to so that none of us lose any money.
First you must decide who you are, and why you are in this market to begin with.
Are you a speculator? If you are get your computer tuned up, and your gambling money of the desk, and go for it!
If you are an investor, looking out just a few short years, then buy numismatic generic gold as close to spot as you can.
If you think that we here in the U.S. have some serious future problems to over come, and you would like some of your money in hard assets then just keep buying what you can, and do not pay any attention to these crazy moves.
There is a way to be an investor, and take advantage of the speculators and the central banks manipulation. Play opposite to their moves.
Both gold and silver are finite markets, they are not like stocks and paper money. Even those in power cannot make more.
The greatest advantage an investor has in this market is TIME. Manipulators and speculators have itchy trigger fingers. They cannot stay short more than a few weeks until they are mentally forced to pull the trigger on something else.
Unlike the years of the 80’s and 90’s when our own government could hold the prices of metals in check for long long periods, that time is over. We are now in a world global economy, and going forward places like China, India, and the Middle East are going to have a great deal to say about oil prices, and metals across the board.
Jim Sinclair posted an interesting story a few weeks back about the Iranians trying to buy 700 tons of gold in December and have it shipped to Iran. The most their Swiss bankers could come up with at that time was 200 tons, and the rest of the order could not be filled.
Just because we have all these CRAZY rules on Wall Street allowing people to buy and sell things that DO NOT exist does not mean you must fall for all the day to day BS in these markets!
<< <i>What exactly does that mean? How does a market collapse? Are you saying that they were about to have to suspend trading? >>
That means that some heavy traders sold more copper than there is in the warehouse to deliver and delivery time is near. In addition, they may have such a huge margin that they don't have the cash to cover and they would "default" on their obligation causing a major ripple in the derivatives market, or they would not have the cash to pay the warehouse for the metal they needed to ship. All adds up to a lot of buyers not getting what they bought.
Remember that most of these shorts are "naked shorts" which means they have sold metals to be delivered which they don't own and have no way of getting. They are gambling the price will go down so they don't have to deliver or they might settle in cash without any metal changing hands. If they do have to deliver , they can buy it from the warehouse. That's the most corrupt part, the ability to sell metal you don't own and have no mining ablity to produce.
For example:
"During the June 14th TOCOM session the seven large gold shorts increased their net short position to a total of 127,903 contracts." at 100oz per contract , that's 12,700,000 oz of gold sold by guys who don't own any and who don't mine any. In addition, The TOCOM warehouse does not contain even 1/10 of that.
We tend to forget.... that we ourselves can play a part in this game. The best way to foil the cartel manipulators? Just buy, and hold. The more physical metal that is taken off the market, the less control the cartel will have and more difficult it will be for them to cover their positions. Although it is true it is now a world market, I also believe that steady purchasing by many over the last 5+ years by the many smaller individuals played a significant role in helping to break the cartel in gold and silver.
And don't 'blink' when the cartel pulls one of their manipulations, like what just happened! That is what they depend on, to make you blink and panic and sell. And play right intotheir hands and into their pockets.
Much discussion has been given over the past year or so on this board, about the fundamentals of why gold and silver are vastly underpriced, etc. Aren't those same fundamentals still in place? To my knowledge, they still are.
Conspiracy, manipulation, or "smart" trading this is what all the major players do, included GS, Citi, JPM, etc. It's hard to put a finger on any one word to describe it. Suffice to say it means they have an advantage and can turn markets at times. Toss in the Treasury's Plunge Protection Team that probaby works through GS and others and you many means to try and move prices.....in the short term.
Long term, they have no choice but to follow as the markets will go where they want.
There have been many examples of "odd" short selling on the Comex by major players. Whether it occurs at 10 minutes to close or what have you, they are examples of trying to move the market on "air" rather than by substance. Cruise the gold websites, several linked below, and you will eventually find things that go far beyond normal probabilities. GATA has also identified these when they are too obvious. I recall reading one article about 2 years ago which described a "pattern" of short selling that had a random probability about a fraction of 1%. Back then the major anti-gold players had an unwritten rule to not allow more than about a $6 per day climb in gold price. The fall could be anything. Even the gold miners loved this since they pocketed billions from playing the no lose carry trade. That $6 rule was smashed sometime last year. But odd that for several years gold could "only" move $6 a day....and on days when the president publically spoke, the dollar went up and gold went down. Those "trading" days are essentially gone.
roadrunner
The little man rules are simple
don't play futures or buy on margin
take physical delivery
and
play for the long game.
That's a better solution than complaining about how things should be.
Sorry for my delay in responding, but honestly I wanted to let my Ebay auctions finish this weekend before I posted this reply.
According to an article I posted out of Money magazine last week on the GOLD & SILVER thread, copied below. There are currently 15-20 million SERIOUS coin collectors in the U.S. In addition there are 140 million casual collectors.
Lets forget for a minute that there are any causal collectors worth discussing. Lets also forget about any foreign investors, or collectors. Lets just say that out of the lowest number of 15 million these collectors decide that the time to buy a nice heavy gold modern U.S. coin is at hand. Whether their reason is because of some economic panic, or just an inflation hedge, or to add this one-ounce coin as a type coin. What would happen?
Very simply there would not be nearly enough coins to go around, leaving nearly one third with nothing to buy!
Using the Redbook as well as the U.S. mint records there have been approximately 11,282,922 $50 Eagles minted in both MS and Proof from 1986 through 2006.
There seems to be some discrepancy in the mintages reported in the Red Book and those reported by the U.S. mint website. For example the Red book has mintages of the 1993 $50 Eagle at 480,192 MS coins and 34,389 proofs or a total of 514,581. The U.S. mint reports a combined total of 439,000.
Perhaps these shortages can be attributed to coins unsold and melted for new issues, I really do not know.
Now if we also figure that some 5% are lost, burnt up, destroyed on 911, by hurricanes, made into jewelry, etc. that leaves 10,718,776 coins in all grades for the 15 million collectors to try to buy one each. This is just one example of the problems we as collectors may face over the next few years.
These coins in MS and PR 69 have been selling on Ebay, certified, for very close to spot plus the slabbing fee.
<< <i>The little man rules are simple
don't play futures or buy on margin
take physical delivery
and
play for the long game. >>
[don't buy margarin]...........
........................................................
<< <i>Isn't the Gold I bought @ $700 worth more than the Gold now @ $545.......
Yes, for the same reason an ounce of feathers is lighter than an ounce of gold.