Confluence of recent events

[pmbug]

Turd Furgeson posted some thought provoking comments last night:

... Remember that Friday was a huge day in silver, up about $1.20 on the Comex and something like $1.60 by the close of the Globex. I was looking for a rise of just 500-1000 contracts because I felt the rally was primarily EE short-covering. If the rally was Sprott-induced, it should have been about 4000-5000 contracts. The actual number was 2350 as total OI rose from 102,055 to 104,406. Hmmm. What does this mean? Upon review and reflection, I think I am wrong and everyone else is right. 2350 is a lot of new open interest, particularly considering where OI is now versus April last year and taking into account the outrageous margin levels.

I think this implies a further rally in silver. A good rush of new money based upon the strong, Sprott fundamentals. $33 should only be a "speedbump" and silver should, instead, move toward $35 and onto the Battle Royale line near $37. ...
...
Those looking/hoping for QE3 should continue to closely monitor the declining POSX and U.S. treasuries. Right now, both are beginning to give indications that overt QE may be coming sooner rather than later.
...
Yes, Iran will likely exchange some of the gold for other things like gasoline. Some of the gold. Some. The main thing is this:

• Less global demand for dollars. Less demand + more supply = downward price (gold positive)
• India will certainly act to purchase gold to replenish supply "spent" on Iranian oil (gold positive)
• Another step on the path toward dollar irrelevance as reserve currency (gold positive)

...

http://www.tfmetalsreport.com/blog/3296/putting-monday-books

 

[DSAbug]

I was reading an article the other day that tried to make the case silver was heading to $20 and below based on technicals. He recommended shorting silver here with a stop at 37.. So, it would take him 20% move in his face to prove him wrong? People are insanely bearish on this stuff for some reason even with QE around the corner..

 

[h4rdware]

I always wonder at people trying stunts like this. Silver collects traders' heads like trinkets. It must be a form of twisted entertainment.

As far as anyone has ever been able to establish, there are 16 grams of silver for every gram of gold under our feet, and they tend to come out of the ground in similar places, and often by the same companies. Gold gets vaulted, minted or turned into shiny items, and silver gets manufactured and landfilled. It is going to become expensive, even if that expense is just to find it all again for a second time (once the forks and ornaments have long since been dissolved in nitric).

I'm collecting it for my grandchildren - they can decide what it's worth.

...

 

[DSAbug]

I always wonder at people trying stunts like this. Silver collects traders' heads like trinkets. It must be a form of twisted entertainment.

I hear you. It's definitely one asset you buy after it's corrected 40%+ and it's in backwardation. It gives you MUCH more cushion than when you chase it up.

 

[pmbug]

Not related to Turd's post in the OP, but David Franklin of Sprott Asset Management gave a presentation at the Vancouver Resource Investment Conference two days ago and he summarizes a lot of recent events as well as discussing potential ramifications of the Fed's meeting today and tomorrow:

 

[rblong2us]

Wow

Turds a bit fired up -

http://www.tfmetalsreport.com/blog/5234/sick-lies-and-liars

Whats been going on that Ive missed ?

 

[pmbug]

Mr. Christian apparently disparaged Andrew McGuire live on stage at some PM conference a couple of weeks ago. Turd has some sort of business arrangement with McGuire and so he's sticking up for him. I haven't really been paying a lot of attention to it because I'm more interested in the substance of ideas than personalities. Eric Sprott posted a more or less summary of the squabble a few days ago:

http://sprottmoneyblog.com/battle-between-andrew-maguire-and-jeff-chritianson-rages-on/

 

[rblong2us]

Thanks Bug

as you say, it looks like they are both diggin in ...........

Now what can we make of Christians comment that -

each physical ounce of gold refined from mine output or scrap turns over, changes hands, around nine times between mine and ultimate user or investor. SO, if the gold multiplier is nine, then the ratio of paper gold trades to physical trades falls to 11:1, instead of 100:1.

cos Im clearly with the group to whom ‘advanced math’ is beyond their capacity, or desire, to understand the markets