The Golden Truth: Boom Goes The Silver Dynamite

Tuesday, August 24, 2010

Boom Goes The Silver Dynamite

This morning Goldman released a research report which concluded that the Fed will be forced to implement "sizeable" QE. Of course, I forecasted this event several months ago. Wall Street sure has a knack for overstating the obvious (Harold Bloom described the fatuously verbose Polonius in "Hamlet" as being an "ass absolute" - Goldman is our ass absolute). Here's what the precious metals do when a "print or die" comment hits the general media and the bullion banks are forced to cover their insanely large paper shorts:

(click on chart to enlarge)

Zerohedge broke the Goldman report to the mass media, which can be found here: QE to Infinity

And here is an article about how India is buying a lot of physical silver bullion this year and which somehow eluded widespread public media reporting: Comex silver shorts take heed

Everyone who has and does scrutinize the precious metals market on a daily basis is well aware that the physical supply of gold and silver is getting scarce, especially relative to the size of the massive paper short positions taken on by the big bullion banks here and in Europe. Silver as I write this is now pressing $18.40 - 20 cents higher than in the chart above. One of these days a big foreign buyer is going to attempt to take a large silver delivery from the Comex and the Comex will default. It will be "game over" then for our system and a devastating currency crisis will erupt, along with hyperinflation. Prepare accordingly.

10 comments:

Joe KernanTuesday, 24 August, 2010
Metal shorts taking it up the prechter today.
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Dave in DenverTuesday, 24 August, 2010
LOL. up the prechter, mish, denninger, gartman, etc...
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halTuesday, 24 August, 2010
last week fartman was buying DE.
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HopiumTuesday, 24 August, 2010
I highly recommend the IDX and ECH....ETF's....nice funds and performing.
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AnonymousTuesday, 24 August, 2010
So India is buying silver while it's population needs food. How much do we "give" India every year?? And they can afford to buy silver instead of wheat!! It is time we reconsider our aid to other countries.
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halTuesday, 24 August, 2010
it is amazing how the pundits are calling for a gold sell off (something that over 10 years has occurred but in the context of the same 10 year chart.....) yet want to buy into things like the general market or in gartmans case DE where nobody in the media is saying it has downside potential to the 20's if we have another 2008 style meltdown.

emphasizing this is that we could see the third high percentage general market sell off in 11 years unless the Fed hyper-inflates and even then who knows the outcome for general stocks.

in the meantime how is this 6% YTD sell off sitting with CPAs and actuaries who have signed off on pension plan assumptions.
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Dave in DenverTuesday, 24 August, 2010
our foreign aid is nothing more than payment to keep military bases in all these countries. pure imperialism. we can't afford to give aid to any countries. we need all the aid we can get here!
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HopiumTuesday, 24 August, 2010
"we need all the aid we can get here! "

Kool-aid that is...Hahah

http://www.imf.org/external/np/pp/eng/2010/041310.pdf
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stibotTuesday, 24 August, 2010
First i don't believe much whatever GSux say. It was also documented by Zerohedge GS's advices usu turned into losses to their "clients". I don't know.. but if GS is bearish on USD i'm rather cautious and waiting for the opposite, also considering actual COT data.

Second, silver was higher in USD year ago, no time for fireworks yet.
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TyroneTuesday, 24 August, 2010
This morning Goldman released a research report which concluded that the Fed will be forced to implement "sizeable" QE.

My usual mantra comes to mind...

FOA wrote back in April of 2001, "My friend, debt is the very essence of fiat. As debt defaults, fiat is destroyed. This is where all these deflationists get their direction. Not seeing that hyperinflation is the process of saving debt at all costs, even buying it outright for cash. Deflation is impossible in today's dollar terms because policy will allow the printing of cash, if necessary, to cover every last bit of debt and dumping it on your front lawn! Worthless dollars, of course, but no deflation in dollar terms!"
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.