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Here we go again, silver/gold tumbling
Windycity
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Must be Tuesday... silver and gold are falling hard.
<a target=new class=ftalternatingbarlinklarge href="http://www.mullencoins.com">Mullen Coins Website - Windycity Coin website
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Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
The gold price is the yo-yo and the trend is the escalator.
The escalator is still going up.
<< <i>profit taking, but the escalator is still going up. >>
It's still up over $200 in the last 30 days, so profit taking is to be expected.
This latest pullback seems like a buying opportunity to me.
link
Hugo Chavez wants to remove 99 tons of Venezuelan gold from London bank vaults. That could touch off a “short squeeze” of epic proportions.
Daniel Drew, born July 29, 1797, was a powerful financier of the gilded age.
As a speculator, one of Drew's favorite sayings related to short selling: "He who sells what isn't his'n / Must buy it back or go to prison."
Cornelius Vanderbilt, the railroad baron, taunted Daniel Drew with this very saying as he squeezed Drew mercilessly. Drew was short a railroad stock, the New York and Harlem Railroad, when Vanderbilt and his associates bought up all available shares to drive the price up.
The share price more than tripled in just five months, as shorts were forced to buy back at any price. It cost Daniel Drew $500,000 -- a considerable sum in 1864! (Drew later lost millions more, but that's another story.)
In recent days, short sellers in the gold market may have felt a bit like Daniel Drew. Even as prices have gotten wilder and woolier -- gold threatening to go straight up -- a potential new Vanderbilt is emerging from the shadows.
His name? Hugo Chavez.
According to recent statistics, the Venezuelan central bank is the world's 15th largest holder of gold. As a country, Venezuela owns just under 365.8 tonnes (metric tons) of the yellow metal.
Of that sum roughly 58% of the total, or 211 tonnes of gold worth more than $12 billion, is held in London bank vaults. Chavez wants to bring most of it home.
As Bloomberg reported last week:
Venezuelan President Hugo Chavez said he will move forward with a proposal to repatriate as much as $11 billion of gold reserves held in the U.S. and Europe as part of a plan to shift assets away from American institutions.
Venezuela will transfer 99 tons of gold from the Bank of England to the South American country's central bank, Chavez said today on state television. Venezuela also has gold at JPMorgan Chase & Co., Barclays Plc, Standard Chartered Plc and the Bank of Nova Scotia, he said.
Why is Chavez doing this?
Part of the motive may simply be sticking it to the "yanquis" -- twisting the knife just because he can. A more realistic motive, though, could be avoiding asset seizure from international lawsuits.
And why would Venezuela be sued in international court? Because of Chavez' other big announcement last week -- a decision to nationalize Venezuela's gold mines. "The area is run by the mafia," he said. "We're going to nationalize gold. We can't keep allowing them to take it away."
All of this brings about "short squeeze" potential because of the shady goings-on between central bankers and international banks.
For many years the banks have been accused of artificially suppressing the gold market with "phantom" short sales, achieved by lending out bullion they don't actually have. This is easy enough to do if no one pays attention: If a banker has 5 tons of gold in his vault, he might "lend" it to short seller A in a paper transaction, leaving the actual gold in the vault.
Nothing would then prevent the banker from "lending" the same 5 tons to someone else, with nobody the wiser, in a sort of fractional reserve system for short sellers of gold.
The scheme works up until the day too many short sellers are forced to cover at once, with too many actual owners of gold demanding the physical metal. When that happens, it's game over, as many exposed shorts find it virtually impossible to cover.
Venezuela's stated intent to pull 99 tonnes from London's gold vaults could, at least theoretically, set off such a reaction.
It could also lead to similar requests from other central banks, hungry to repatriate their gold reserves held abroad, to avoid the risk of being told "sorry, we don't have your physical just now..."
To actually move all that gold to Venezuela would be quite a feat. It could take as many as 40 separate trips, the Financial Times reports, because it would be impossible to insure a single aircraft.
There is also the question of where Venezuela's central bank will put it all. Says Chavez: "If there isn't enough room to store the gold in the central bank vaults, I can lend you the basement of the Miraflores presidential palace."
It may be a bluff. Chavez could still modify or cancel his plans at the last moment. But even so, a sort of Pandora's box has been opened here. If Chavez makes good on his intentions, there is no telling what the major league short sellers of gold will do. There are already signs of blood in the water, as large global macro hedge funds scramble to get their hands on physical receipts.
Bottom line: Those waiting to buy gold at significantly lower prices might see their patience rewarded... but they might not. In a true "short squeeze" tied to severe supply/demand imbalance, a parabolic move could last for weeks (or even months). Anyone short gold without a tightly defined risk point risks the Daniel Drew experience.
a related video
60 years into this hobby and I'm still working on my Lincoln set!
This story, however, if true, could set off a scramble.:
link
Hugo Chavez wants to remove 99 tons of Venezuelan gold from London bank vaults. That could touch off a “short squeeze” of epic proportions.
Daniel Drew, born July 29, 1797, was a powerful financier of the gilded age.
As a speculator, one of Drew's favorite sayings related to short selling: "He who sells what isn't his'n / Must buy it back or go to prison."
Cornelius Vanderbilt, the railroad baron, taunted Daniel Drew with this very saying as he squeezed Drew mercilessly. Drew was short a railroad stock, the New York and Harlem Railroad, when Vanderbilt and his associates bought up all available shares to drive the price up.
The share price more than tripled in just five months, as shorts were forced to buy back at any price. It cost Daniel Drew $500,000 -- a considerable sum in 1864! (Drew later lost millions more, but that's another story.)
In recent days, short sellers in the gold market may have felt a bit like Daniel Drew. Even as prices have gotten wilder and woolier -- gold threatening to go straight up -- a potential new Vanderbilt is emerging from the shadows.
His name? Hugo Chavez.
According to recent statistics, the Venezuelan central bank is the world's 15th largest holder of gold. As a country, Venezuela owns just under 365.8 tonnes (metric tons) of the yellow metal.
Of that sum roughly 58% of the total, or 211 tonnes of gold worth more than $12 billion, is held in London bank vaults. Chavez wants to bring most of it home.
As Bloomberg reported last week:
Venezuelan President Hugo Chavez said he will move forward with a proposal to repatriate as much as $11 billion of gold reserves held in the U.S. and Europe as part of a plan to shift assets away from American institutions.
Venezuela will transfer 99 tons of gold from the Bank of England to the South American country's central bank, Chavez said today on state television. Venezuela also has gold at JPMorgan Chase & Co., Barclays Plc, Standard Chartered Plc and the Bank of Nova Scotia, he said.
Why is Chavez doing this?
Part of the motive may simply be sticking it to the "yanquis" -- twisting the knife just because he can. A more realistic motive, though, could be avoiding asset seizure from international lawsuits.
And why would Venezuela be sued in international court? Because of Chavez' other big announcement last week -- a decision to nationalize Venezuela's gold mines. "The area is run by the mafia," he said. "We're going to nationalize gold. We can't keep allowing them to take it away."
All of this brings about "short squeeze" potential because of the shady goings-on between central bankers and international banks.
For many years the banks have been accused of artificially suppressing the gold market with "phantom" short sales, achieved by lending out bullion they don't actually have. This is easy enough to do if no one pays attention: If a banker has 5 tons of gold in his vault, he might "lend" it to short seller A in a paper transaction, leaving the actual gold in the vault.
Nothing would then prevent the banker from "lending" the same 5 tons to someone else, with nobody the wiser, in a sort of fractional reserve system for short sellers of gold.
The scheme works up until the day too many short sellers are forced to cover at once, with too many actual owners of gold demanding the physical metal. When that happens, it's game over, as many exposed shorts find it virtually impossible to cover.
Venezuela's stated intent to pull 99 tonnes from London's gold vaults could, at least theoretically, set off such a reaction.
It could also lead to similar requests from other central banks, hungry to repatriate their gold reserves held abroad, to avoid the risk of being told "sorry, we don't have your physical just now..."
To actually move all that gold to Venezuela would be quite a feat. It could take as many as 40 separate trips, the Financial Times reports, because it would be impossible to insure a single aircraft.
There is also the question of where Venezuela's central bank will put it all. Says Chavez: "If there isn't enough room to store the gold in the central bank vaults, I can lend you the basement of the Miraflores presidential palace."
It may be a bluff. Chavez could still modify or cancel his plans at the last moment. But even so, a sort of Pandora's box has been opened here. If Chavez makes good on his intentions, there is no telling what the major league short sellers of gold will do. There are already signs of blood in the water, as large global macro hedge funds scramble to get their hands on physical receipts.
Bottom line: Those waiting to buy gold at significantly lower prices might see their patience rewarded... but they might not. In a true "short squeeze" tied to severe supply/demand imbalance, a parabolic move could last for weeks (or even months). Anyone short gold without a tightly defined risk point risks the Daniel Drew experience.>>>
What if the US Mint's pulling from sale of all of their gold products has more to do with Hugo Chavez than repricing of the coins? I would not be a seller of gold until the US Mint once again offers coins for sale. HM
But if the east coast falls into the ocean from a quake, all bets are off!
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<< <i>I hope they both CRASH and all the dealers lose their A%% >>
drug dealers that invest in silver and gold
Successful card BST transactions with cbcnow, brogurt, gstarling, Bravesfan 007, and rajah 424.
<< <i>It's like a yo-yo on an escalator. >>
i like that lil analogy
gooooooo silver