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.


  1. Metal shorts taking it up the prechter today.

  2. LOL. up the prechter, mish, denninger, gartman, etc...

  3. last week fartman was buying DE.

  4. I highly recommend the IDX and ECH....ETF's....nice funds and performing.

  5. 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.

  6. 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.

  7. 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!

  8. "we need all the aid we can get here! "

    Kool-aid that is...Hahah


  9. 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.

  10. 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!"