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Old 09-06-2012, 08:21 AM   #1
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ECB Good for Silver?

So, as Draghi speaks and says that the ECB will do unlimited sovereign bond buying, silver is in the pits dueling it out with Blythe's bitches this morning. Currently up 44 cents, I suspect that JPM will have no choice but to cover shorts all the way to net with their long positions. Personally, barring some divine intervention, I see 35 dollar silver by Friday close of market.

Any bets?
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Old 09-06-2012, 08:30 AM   #2
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Originally Posted by ancona View Post:
So, as Draghi speaks and says that the ECB will do unlimited sovereign bond buying, silver is in the pits dueling it out with Blythe's bitches this morning. Currently up 44 cents, I suspect that JPM will have no choice but to cover shorts all the way to net with their long positions. Personally, barring some divine intervention, I see 35 dollar silver by Friday close of market.

Any bets?
If I were to bet, I would bet against $35 silver by Friday. My reasoning would be the following:

1) This action will weaken the Euro
2) Due to a weaker Euro, the USD will gain temporary strength
3) As the USD improves in the short term, it will hold down the potential gains of commodities in the short term

Essentially, I still think metals are moving upwards, but this annoucement could slow their gains in the short term.

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Old 09-06-2012, 08:37 AM   #3
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The Fed is likely going to be announcing an open ended QE program to keep pace with the Euro as currencies race in a circuitous path down the toilet bowl. Looks for an announcement next week on the 13th.

$35 by tomorrow's close? I doubt it. That's too aggressive. By a week from tomorrow? That sounds plausible.
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Old 09-06-2012, 11:46 AM   #4
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We are going to correct BEFORE the fed IMO.. be careful.. don't use leverage!
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Old 09-06-2012, 12:57 PM   #5
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Reading some of the new articles coming out about this new plan, there are a few questions that pop to mind.

http://finance.yahoo.com/blogs/daily...3Rpb25z;_ylv=3

"The ECB will buy unlimited government bonds so long as that euro zone government complies with an economic reform program approved by the euro zone leaders. The ECB, in turn, will offset those purchases by taking an equal amount of money out of circulation, keeping its mandate to maintain stable prices."

Usually, you print more money to buy up government bonds. If your plan is to both buy up government bonds and take money out of circulation, where is the funding coming from? Germany?
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Old 09-06-2012, 05:11 PM   #6
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Originally Posted by benjamen View Post:
Usually, you print more money to buy up government bonds. If your plan is to both buy up government bonds and take money out of circulation, where is the funding coming from? Germany?
They are talking out of both ends and making it more politically acceptable to print.
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