Submitted by SD Contributor SRSrocco
The U.S. Financial situation is in much more dire straights than Europe. How precious metal investors (some on this site) are taken by the MSM BAMBOOLZEMENT is beyond me. I also recommend listening to The Doc’s new interview with Harvey Organ. He explains in easy to understand detail of just how much leverage there is in the Gold and Silver markets as it pertains to paper contracts and actual metal.
This is why I get a laugh at the folks who keep focusing on the so-called SHORT TERM BEARISH CHARTS or NEWS in gold or silver. All in all, it really doesn’t matter.
The Great Canard….The Paper Game
Today I see we have the same debate going on between the SHORT TERM CHARTISTS and the PERMA-BULLS. I would like to throw in my 2 cents ($2.50 with inflation) on the matter. While it is true, silver is trading in the $28 range and not higher, this seems like a WIN for the short term chartists who saw this coming. The positive thing is that silver investors can indeed purchase more silver at lower prices.
However, I would like to remind the investing public, there is a good amount of silver coming from mines who are now barely breaking even. US Silver Q1 cash cost was $21.56 an ounce. Revett Minerals was a tad lower. Again, these are cash costs and not the complete costs. I would imagine US Silver who produces 2.4 million oz of silver a year is break-even at $28. Hecla and Coeur d’ Alene have mines that are running cash costs in the mid $20 range.
As I have stated before, the HUGE FINANCIAL DERIVATIVES MONSTER has siphoned money away from the producers. Furthermore, the Silver Users Association doesn’t mind TIFFANY’s to have markups of 500-1000%, but they lobby to make sure miners do not… or at least used to.
Regardless, there has been discussion that the US DOLLAR is going to rally big time when the EURO goes the way of the DODO bird. I don’t know if that will be the OUTCOME. We must remember, the Commercials still have control of the PAPER MARKETS for the meanwhile. Here is the US DOLLAR COT REPORT for last week:
Chart Courtesy GoldSeek.com
If you look at that RED CIRCLE, you will notice a very high increase of commercial shorts last week. I would imagine as the DOLLAR keeps heading higher (like the opposite side of the TITANIC as it sank), the short contracts will increase this week as well.
I also have to agree with Taleb on his views of the EURO:
May 30 (Bloomberg) — Nassim Taleb, author of “The Black Swan,” said he favors investing in Europe over the U.S. even with the possible breakup of the single European currency in part because of the euro area’s superior deficit situation.
Europe’s lack of a centralized government is another reason it’s preferable to invest in the region, said Taleb, a professor of risk engineering at New York University whose 2007 best- selling book argued that history is littered with rare events that can’t be predicted by trends.
A breakup of the euro “is not a big deal,” Taleb said yesterday at an event in Montreal hosted by the Alternative Investment Management Association. “When they break it up, there will be a lot of fun currencies. This is why I am not afraid of Europe, or investing in Europe. I’m afraid of the United States.”
The budget deficit as a proportion of gross domestic product in the U.S. amounted to 8.2 percent at the end of 2011, government figures show. That’s twice the 4.1 percent ratio for euro-region countries, according to data compiled by Bloomberg.
“Of course Europe has its problems, but it’s in much better shape than the United States,” Taleb said. He voiced similar concerns about U.S. prospects at a conference in Tokyo in September.
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The U.S. Financial situation is in much more dire straights than Europe. How precious metal investors (some on this site) are taken by the MSM BAMBOOLZEMENT is beyond me. I also recommend listening to The Doc’s new interview with Harvey Organ. He explains in easy to understand detail of just how much leverage there is in the Gold and Silver markets as it pertains to paper contracts and actual metal.
This is why I get a laugh at the folks who keep focusing on the so-called SHORT TERM BEARISH CHARTS or NEWS in gold or silver. All in all, it really doesn’t matter.
What is coming to the U.S. Financial System is similar to what took place back in 2008 –but much worse. The reason why technical charting doesn’t work today is due to the massive amount of manipulation. Below are two charts from a prior article showing just how a stock or company can virtually implode overnight:
How these two stocks can implode in this fashion goes beyond technical analysis. These stocks were worthless several years before the truth of their value was realized. This is the same type of situation taking place in Gold & Silver, but in reverse. Gold and Silver will head exponentially higher when the system unravels.
Lastly, I have responded to some writers on the internet who think the US MINT is making a big profits on their GOLD and SILVER EAGLES. Unless the US Mint is telling us a boldface lie about their accounting, they made peanuts in 2011:
Again, the whole PAPER PRICE of gold and silver is a big CANNARD. Looking at Bearish Charts or News is just want the DOCTOR BERNANKE ordered.
-SRSrocco
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Amen! Exactly what I’ve been saying for a while now: “The U.S. Financial situation is in much more dire straights than Europe.”
SRSrocco
lol Exactly!
Great post once again SRS. The only thing I am focusing on is the ounces. If (when) the dollar goes I will not have worried about shorts (unless the right person is wearing them).
2 OZ. lol
Alright 2oz:
427 lol
Thats sick lol
Wow… She doesn’t need to use her fists, she can knock you out with her tity!!!
I GUESS we have to have a sense of HUMOR these days… Jeeesh you guys to damn much….LOL
Hi SRSrocco,
SRSrocco Excellent post.
P.S. lol Sorry if the ladies are getting a handful.
A new place to hide your phyzz. Boob lockers. Sweet.
IMO the issue of silver miners and their costs, the potential shortages and charts both short and long term seem to be increasingly moot in the middle of a Cat 5 hurricane Whoever fails first, US or Europe, the force of the impact will be discussed 2,000 years from now.
alexdg…. I don’t have a blog as of yet due to the fact I like to spend most of my time researching and writing. As of now, I don’t want the hassle of maintaining a blog…. however that could change in the future.
As for CPM’s 2012 Silver Yearbook, I find it very interesting that his production figures are much different that GFMS’s World Silver Survey. While it is true that there is more silver production to come online in the next several years, the so called surplus has not hurt the price in the past 6 years.
If you take a look at my updated chart on the SILVER SURPLUS vs DEFICIT, you will notice an interesting trend:
When we had so-called Deficits from the 1990′s until 2004, the price of silver traded at the $5.00 range plus or minus. It wasn’t until we had surpluses did the price start to rise. In 2011, and according to GFMS’s calculations (not mine), there was a record surplus of 260 million ounces of silver.
Again, we must remember, the Coin & Medal catagory which is included in the total Fabrication demand figures is subtracted to make the surplus look even larger. That is why I believe SILVER SENTIMENT had to be destroyed starting in May 2011. It is not the INDUSTRIAL DEMAND that is determining the price, rather it is INVESTMENT DEMAND.
Now that they have temporarily destroyed silver sentiment and investment demand, the price has fallen along with the demand for SIlver Eagles, Canadian Maples and bullion.
Even though there is more Silver to come online in the next several years, there are several factors that make this a NON ISSUE in my opinion.
1) the huge ratio of paper to physical in the markets presently will not be able to be filled when the system crashes by this small increased supply in the future
2) Most of the silver is coming from Base Metal mines that may not be putting out as much metal due to the global depression coming around the corner… unless we have MONEY PRINTING TO H ELL.. then it really won’t matter
3) I believe nationalization and remonetization of silver is say Mexico or etc will destroy this whole notion of INCREASED SURPLUSES… there won’t be any to be found.
Nice 427. Very nice. SB, that’s more than I can handle.
Silverbullion.
I have a funny feeling she’s hiding a couple silver eagles in that top.
Don’t be so quick to say the dollar is done. Not only does Treasury dept have a printing press, but has carrier battle groups to persuade malcontents to continue to give value to the dollar. No one else has that.
LMAO I start reading Docs post which I enjoyed the start reading reply’s and was agreeing with some of them and then suddenly my mind is shifted to Tits and Asses of the female kind and loose my sense of way. LMAO You folk are something else just like Politicians you hide the truth by deverting it with something else. LMAO.
Anyway back to the subject at hand. Lmao. Yes I believe the dollar will go higher but I also believe that our Goverment will step in when we are not expecting it, Devalue it by about 40% and the poor Suckers that are in the paper game are going to get burnt again. Keep Stacking Physical.
By The Way Thanks for The Good Laugh.
Generally, I Hesitate To Post Explicit Videos But Here Goes. If This Is Too Explicit, Please Don’t Hesitate To Stop The Vid.
The Bull Lion Yep, she’s stacking!!!
lol Jake It is what I would call “Hula Poop”
I was expecting something else Jake. LMAO So for you I just took this picture this evening of the new additions to my pond in the back yard. And no they are not for eating but my favorite saying is:
Go F*%#$ A Duck Jamie.
I thought his pants would fall down at least.
M45 dont count those duck off the dinner table yet. You need those baby’s
M45 Thanks—LOL!
Jake, that just ain’t right. LMAO too. Easy 427, M45 may need duck eggs first. Ya know, don’t count your ducks before they hatch.
Yep the pond needs to provide and be sustainable.