Submitted by SD Contributor SRSrocco:
People don’t realize there is a WAR going on in the GOLD-SILVER MARKET vs FIAT MONEY. Psychology and Sentiment are the KEY in markets. This also is true in war. During WW2 the allies fooled the Germans into believing that they were going to invade France at the Pas De Calais instead of Normandy. They created a complete fake army to convince the Germans that they would indeed attack at Pas De Calais. The plan worked… Psychology beat the Germans as they wasted a large numbers of troops defending the wrong port.
Today, we have the same tactic taking place in the precious metal markets.
In the beginning of 2011, the price of silver was climbing higher, Hedge Funds had come aboard in a big way for the ride. Max Keiser was pushing BUY SILVER KILL JP MORGAN. The silver inventories were dropping to all time lows as investors and Hedge Funds were taking delivery. Everything was set for a HUGE SHORT SQUEEZE and panic on the COMEX as they did not have the metal to back up the shorts.
Well in May 2011, 5 silver margin hikes and 10 days later… the GREAT SILVER RALLY was over. However, this did not kill market sentiment as buying of Silver Eagles increased in May and hit a new record high in 2011. You don’t kill market sentiment with one SHOT TO THE FOREHEAD… several are needed.
This took place in SEPT 2011 when silver was heading back up to the $45 area and gold to new highs at $1900. Well in just three weeks, silver went from $44.38 to $26.15. Of course this was legitimate selling by those who wanted to exit the market at the BEST POSSIBLE PRICES (more sarcasm). If we look at the chart below in which I have posted before, we can clearly see the manipulation at work as the ACCUM-DIST chart reveals the truth:
For those who still have FUNCTIONING BRAINSTEMS something very fishy took place in SEPT 2011. The price of silver declined 41% in just 3 weeks while the ACCUM-DIST just kept on rising. Again, I don’t like charting as it pertains to candlesticks and etc, but overall trends such as this…. which may reveal what is truly taking place.
The THIRD TAKEDOWN on FEB 29th, really did it in for the Silver Bugs. Investors are now believing the garbage coming out of the likes of MSM, NADLER and SCHMIDT to name a few. They believe the so-called silver surplus and Comex Inventory build is now showing that Industrial Demand is indeed falling….. which is controlling the price.
However convenient this looks, this is furthest from the truth. I will reveal the updated chart for your eyes only.
Again, if you have a well FUNCTIONING BRAINSTEM, you will notice a very interesting trend in the chart. When we had so-called deficits, the price of silver remained around 5 clams an ounce. However, mysteriously, when the so-called surplus began to rise…. SO DID THE PRICE. Ain’t that a KICK IN THE PANTS.
Investors who listen to the rubbish coming out of the bowels of MSM and etc, do not realize that it has been INVESTMENT DEMAND that has been responsible for pushing the price of silver from $5 BUCKS to $49….. NOT INDUSTRIAL DEMAND.
So… if you can follow my lead, in order to kill the price of silver… you have to KILL INVESTMENT DEMAND. PERIOD.
all the best…
SRSrocco
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_silv.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_gold.gif)
Good Stuff Steve!
Can’t tell you how pleased I am to have a guy like you around to help us see & understand.
Since I am just an ordinary person with a thick skull, I sometimes repeat back to the person telling me something, just to ensure that I am understanding what they are trying to communicate.
The message I derive from all of the above charts & verbiage is that investment demand, not industrial demand, has been responsible for pushing the price of silver up from $5 BUCKS to $49. So if you believe the price of silver is manipulated, then in order for ‘THEM’ to kill the price of silver, they have to kill the investment demand.
This goes for gold as well, and if you’ve noticed there has been a lot of chatter lately saying that ‘PM’s are dead.’ Oh, really? Where else is there to put one’s investment money? More specifically – where do ‘THEY’ want you to put it, and why?
If you try to kill investment demand, it will be over my dead body. Guess what? That ain’t going to happen. My avatar is not an accidental photo. Someone is gonna die in this game and it is not me.
Steve is a forum “acquaintance” of mine, hehe. Steve, please I want to remain anonymous here on this site. Good work Steve. I will post this to the private forum from where we once knew ya.
I always enjoy the latest articles from this fine gent. He really digs deep and gets his hands dirty.
He’s right on the money, I believe, in that the three attacks prolonged over a protracted period, have sullied sentiment the most. Alot of my friends who swore they’d back up the truck and load up if it ever went back down into the 20′s, have now contacted me to say that they’re so sad to see this when they bought so many ounces near $40.
While I completely understand that part of their picture, I reminded those friends that if you buy now, you can reduce the average cost of those 40 dollar eagles substantially, and that eventually those 40 dollar eagles will experience life changing gains.
It’s just hard to see victory in the midst of the bloodbath. I seem to be alone in my aggressive stacking.
I mean, you’d think JP Morgan in its death throes would be enough to embolden or encourage the silver warriors, but even that hasn’t caused as many huge community high fives, as I thought it would. Still, if someone in last Wednesday could plunk down $270 million dollars in London for 10 million ounces of silver phyzz at once…..perhaps I ought to do as they do. I can hardly believe that with so much capital riding on the line, that that 10 million oz buy was anything but completely calculated. Somebody sees much reward than risk at that price. I happen to agree with them.
I’m glad AGXIIK is on our team.
antithesis…its good to see you again.
I would like to clarify the issue again as it pertains to how the SURPLUS or DEFICIT is figured.
This is how GFMS – Gold Fields Mineral Survey (now owned by Reuters) calculates their silver surplus or deficit:
Mine Supply + Silver Scrap – (total Fabrication – Coin & Medal) = Surplus or Deficit
If you go to the SilverInstitute’s website you can see the last ten years of their SUPPLY-DEMAND figures at this link: http://www.silverinstitute.org/site/supply-demand/
In 2011, the total amount of Fabricated silver was 876.6 million oz. This total includes the category called COIN & MEDAL which was 118.2 mil oz. Again, Coin & Medal are basically “Official Coins” such as Silver Eagles and Canadian Maples.
GFMS subtracts the coin & medal amount from the total fabrication figure. This is the result:
761.6 mil oz + 256.7 mil oz – (876.6 mil oz – 118.2 mil oz) = 1018.3 mil – 758.4 mil oz = 259.9 mil oz Surplus
So we can see we had a record so-called Silver Surplus according to the number engineering by GFMS. Well guess what? With that record surplus we had a record average silver price in 2011 at $35.12 oz.
The 118.2 mil oz coin & medal accounted for part of that 260 mil oz so-called surplus.
In order to KILL THE PRICE OF SILVER, you don’t go after industrial demand… you go after INVESTMENT DEMAND. This is exactly what took place.
I hope everyone who seems to want to hype a “silver surplus” enjoys it while they can. Today there is as much silver above ground as theres ever going to be. Just my opinion but it’s going to be a silver scarcity instead of a surplus.
I have been pretty cranky today hence my post above. Dealing with some minor corporation details of the Self Directed IRA The custodian bank wants the docs one way; the Secretary of State of NV likes them another way My bank wants everything nice and tidy. The funds with Fidelity are now in safer hands. I’m just dealing with the minor issues and that chaps my hide. What I want to say is kill all the bankers. But that’s just me. I’m sure a couple of shots of good whiskey will remove that compulsion and help me celebrate saying ‘adios’ to Fidelity Once done with my LLC I’ll get my wife extracted from the clutches of Abby Johnson and her .01% money market payments. The next step is buying some phyzz from Doc.
PEAK SILVER IS COMING
The United States produced the lions share of its silver back in the early 1900′s. If you take a look at my chart you will see just how much silver was produced at this time. Utah had the record annual production of silver of 27.3 million oz in 1923… almost 90 years ago.
The majority of the individual states silver production peaked before 1940:
ONE MORE TIDBIT ON THAT PEAK SILVER CHART
Nevada and Idaho had two lines and what I call a “SECOND PEAK.” First, I planned on just showing silver production prior to 1950. In this case all of the states peaked early. Even though Idaho had a second peak in 1967, it only beat its previous peak by 200,000 oz.
Furthermore, it was due to one mine… and one mine only that allowed Nevada to have a second peak in 1997 and that was due to the McCoy-Cove mine that produced 12 million ounces in a single year:
Well I just sold my Stash today as I’m getting tired of all this crap that silver is a great Investment. So I started doing some research and found out you folks are living a lie to get the price of Silver up. So if you believe all that I’ll sell you the Brooklyn Bridge. LMAO Keep Stacking I’m in it for the Silver not the spot price.
I am calling a bottom! We’ve run out of sellers
So as I predicted on a prominent site in Oct 2010, the bottom for silver after the run above $45 would be $25 – $27.
Okay $21 is a possibility, but I think the odds are favoring $26 and the triple bottom scenario within a descending triangle, which is a continuation pattern.
Living in the Silver state, Nevada, and going by Virginia City, heart of the Comstock Lode, it’s pretty clear that silver miing is more of a tourist attraction that a profitable enterprise. Some businesses are culling the tailings for the residual silver not extracted by the less efficient means available a 150 years ago. Peak silver is an important part of the silver shortage story. Anything outside the US is not great news either.
Evening Doc, it’s nice to see you again, great job on the site and upgrade and thank you for the invite. Evening Members, I am sure I know many of you from that other web site, nothing has changed much just moving along buying the dip and making a killing in the market as of late playing REITS and the Divy stocks. As this market tanks and it, will the smart money will be chasing Yield as well as safety. Treasuries worry me, they always have but the herd flocks to them so be it, I like the rest of you here prefer the safty and protection with Metals. Sure we might and we will see cheaper prices for a short period of time..My answer is …So? LMAO! don’t threaten me with a cheaper asset. Housings cheaper…Great!, Metals cheaper..Great!, Stocks cheaper..again Great!.
Stay Debt free make what you can while you can, and look to double it and then flip it..That simple. No mining position as of yet as I feel we might have some more downside coming..That bottom is a little bit deeper than we all may suspect. As to the reason I am playing Reits..Housing noise and the big money and hedges are running to Reits. Forget rates..Zirp is the play, so play it.
Be well and again nice to see you folks again
Be well Doc
http://wwwtheworldandeverythinginit.blogspot.com/
If you try to kill investment demand, it will be over my dead body. Guess what? That ain’t going to happen. My avatar is not an accidental photo. Someone is gonna die in this game and it is not me.
AGXIIK
Dont get mad ( he who makes you mad has beaten you )
Time to get even
time to monkey wrench the bankers
think about it
they pay folks lots of $$$$$$$
figuring out how to screw us
most of us a fairly bright folks
I am sure we can give as good as we have gotten
they must suffer the death of a thousand cuts
like being pecked to death by ducks
Savey
Doc can you please move my comment above out of moderation so the other readers can see it?
ANOTHER FORM OF REFERENCE
This chart shows the total silver production from each state from the 1800′s to 1950 (dark blue) then from 1950-1990 (lighter blue). It becomes readily apparent that the majority of silver mined in the United States came in the late 1800′s and early 1900′s:
See above, my comment about the silver bottom was removed form the moderator queue. So you can now read it above.
antithesis;
No worries Da Yooper. I never get really MAD– unless I do. Sometimes it’s good to flex the muscles. I was mostly pissed off today. What irritates me is those who would hurt good people either for profit or the pleasure of causing them pain. Being an underdog I root for the other underdogs, the ordinary Joes and Janes who work hard, struggle and feel pain like all of us. Those who cause pain will see their judgement day. If it is within my power to help that cause and move the judgement day along, that works just fine for me. This site and others do great jobs of zeroing the foe where they live and doing damage. One voice might not be enough but a thousand or a million does a great job. Keep the faith
Great article SRSrocco! Investment demand drives silver, industrial demand is the icing on the cake.
This one is good also: http://www.clivemaund.com/article.php?art_id=67&PHPSESSID=33d644f70dd101c18c6ef111eb62ef0d
Very bullish pattern forming in silver, according to Clive Maund.
There are those who steer and then there are those that pedal…. The trick is to control the direction while pedaling with out being the one who steers….
In other words We the stackers are there pedal power… The thieving banksters steer while it is beneath them to pedal and get dirty… We who pedal have the power to control the market if we work together making the actions of those who steer useless…
AGXIIK… my wife and I visited Virginia City in May of 2011. It was sort of a last minute side trip that we really hadn’t planned. We were staying in Reno at the time, so it wasn’t too far to drive… very curvy road, though. Anyway, when we got there, there was a street festival in progress called “Cops and Chili”. There were lots of police cars with their lights going and an occasional “WHOOP! from their sirens. There were lots of people, mostly families, watching the staged shows of old time bar room & street fights, gun fights, short plays, etc. Lots of music too. Also had a lot of chili cookers with small cups for sampling the local recipes, all of which were very good. On our way out of town, we stopped at The Way It Was museum. That was a great place to visit and gave us a terrific view of the Comstock glory days. They even had some Morgan silver dollars for sale, so I bought 6 of them in AU condition to top off our visit. As it turned out, this was the height of our trip and we enjoyed it immensely. Great job, Virginia City! :-)
SRSrocco,
Fantastic post, per usual. Thanks.
Given the highly unusual accumulation/distribution line trend we’ve been seeing for months, have you ever attempted to look at measures that, in effect, attempt to separate the differences between trading in London and NY? I ask this because throughout this year it’s been common to have a silver management take-down leading into the COMEX open, with a bounce thereafter (just like yesterday). With enough days like that, where the starting point for the day is “artificially” lower than would otherwise happen, it tends to tweak the A/D line higher given that your StockCharts.com A/D chart is based on CME trading day data. See what I mean?
Obviously, this doesn’t account for the entire A/D discrepancy, but I’m darn curious as to how much of a factor it might play. If we can find a site that runs London data just like StockCharts use of the CME data, that would be sweet and a time-saver. I don’t know of such a site. You?
It is very difficult to stay up when they are constantly trying to keep you down. We small stackers would really like to buy the dip, but we don’t have the cash. So we have to dollar cost average so to say. Buy it when you have the FRNs regardless of the price.
I was, unfortunately, one who bought a lot at the $40-50 range. I was new and thought silver was going for a wild ride. I have since learned more and regret that I was not educated enough to stay calm, cool and collected.
Hi Ho Silver!
Gee, I wonder if I should moderate my posts from back in May 22. Nah. Screw it. Maybe Raub could use some company.
Ed You should be in Virginia City when we have Street Vibrations—think mini Sturgis. Imagine Virginia City with 3,000 bikers crowding the streets, New Orleans beads in profusion and for the obvious reasons. Biker babes don’t quite make the cut BUT it is heck of a hoot. The Storey County sheriff is afraid of bikers so every block has 2-3 deputies in full battle rattle–ARs, tactical armor–You know the drill. Funny thing is all these bikers are faux HAs. Just poseurs out for the weekend and having some fun. Anyways, back to the subject at hand.
It’s good to pull some of the Oldies but goodies back up to see how things have changed. Silver Psyops is kind of fun. You can hunker down in the trenches and throw grenades at the bad guys all day long. It’s a target rich environment.
It would be interesting to overlay the industrial demand on that chart and see how it fits in. Electronics may be using less per item but if the economy ever picks back up the demand is going to rise along with everyone wanting the latest and greatest electronic junk.