The Golden Truth: Is The Comex Getting Desperate To Prevent Longs From Taking Delivery?

Monday, May 2, 2011

Is The Comex Getting Desperate To Prevent Longs From Taking Delivery?

To coin a famous line from the classic movie "Apocalypse Now:" "I love smell from Comex silver margin hikes in morning - it smells like, DESPERATION!"...The CME has announced the THIRD margin increase in silver futures since last Monday. This is truly unbelievable and it explains the way silver was smashed for $1.90 in 20 minutes around 3:20 p.m. NY time, the least liquid part of electronic trading during the week. Why would someone all of a sudden decide that they need to unload enough silver futures to drive the price down this much two hours AFTER the close of Comex trading, when they had all morning to sell those contracts at higher prices during Comex pit hours? LOL. Here's the margin increase LINK

7 comments:

AnonymousMonday, 02 May, 2011
Desperation is a stinky cologne.
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AnonymousTuesday, 03 May, 2011
No doubt margin hikes can force speculators out of the market. And no doubt that will cause the price to fall.

But how could margin hikes "prevent longs from taking delivery"? That was your premise.

To take delivery you have to come up with 100% of the cost of the contract in cash. If you can do that, you can obviously meet any margin requirement. No margin hike could ever force you out of your position, if you were actually prepared to take delivery.

In fact, it seems to me that margin hikes might make a default more likely, in that by forcing some speculators on margin to sell they reduce the price, making holders of physical silver less likely to part with it, right when the Comex shorters need to buy the stuff to meet delivery demands.
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AnonymousTuesday, 03 May, 2011
No ..they want that money scared into the slow death mode....

Bill Gross: "The Treasury Market Is On A Collision Course With Financial Repression"

In fact, the authors found that “for the United States and the United Kingdom, the annual liquidation of debt via negative real interest rates amounted on average to 3 or 4% percent of GDP a year…which quickly accumulated (without compounding) to a 30 to 40% of GDP debt reduction in the course of a decade.” Even after interest rate “caps” were removed in 1951 via the Fed-Treasury Accord, extremely low/negative real interest rate policies continued until the Volcker revolution in 1979. By that time, U.S. (and U.K.) debt levels had been normalized, primarily at the expense of savers who had been “repressed” (and depressed!) for over three decades. At that historical turning point, government bonds were labeled “certificates of confiscation.” Not only had savers received Treasury bill rates that were negative for over 25% of the nearly four decades, but they were holding long-term AAA rated bonds trading at 30 to 40 cents on the dollar.

Bond investors forced to invest in dollar government bonds either through indexation, convention, regulatory guidelines or simply falling asleep at the helm are being shortchanged by 1 to 2% annually compared to historical norms and in many cases receive negative real yields

http://www.zerohedge.com/article/bill-gross-treasury-market-collision-course-financial-repression?
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AnonymousTuesday, 03 May, 2011
The Silver Bears Are Back

http://www.zerohedge.com/article/silver-bears-are-back?
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999SilverDogTuesday, 03 May, 2011
QE To Infinity!

now, we have,

Margins To Infinity!

You called it right, they must avoid delivery, as they have none to give. So they just raise the Margins until only players with money like Buffett are in the game.
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Market BustTuesday, 03 May, 2011
keep buying physical and you will be rewarded in the end.
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danteTuesday, 03 May, 2011
How many low life scum bags tried to put a negative spin on this headline? Lets see the jackoffs report this on tv....

Eric Sprott - “Sprott Has More Physical Silver Now Than Ever!”
With silver recently plummeting from $50 to the $40 area, today King World News interviewed Eric Sprott, Founder of Sprott Asset Management
to clear up some misperceptions about Sprott’s sales of PSLV. There is a great deal of misinformation out there regarding what Sprott was actually doing when SAM sold some PSLV. When asked about what has transpired Sprott remarked, “Well Eric in response to your question, any proceeds that we’ve received from selling PSLV have immediately gone back into silver or other silver equities. And I can tell you we have the highest position in physical ownership that we’ve ever had, and we have not lost one ounce of our encouragement for the outlook for the silver price.”
Sprott continues:

“I sort of regard the things that are going on in the (silver) market as basically some group of traders working to get the price down quickly, particularly the overnight action on Sunday night when it (silver) goes from $48 to $42 in whatever it was, 9 or 13 minutes. It’s a travesty of a trading system that would happen.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/3_Eric_Sprott_-_Sprott_Has_More_Physical_Silver_Now_Than_Ever!.html

Sprott interview...

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/5/3_Eric_Sprott.html
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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.