Here is your future

Max Keiser visited Ireland recently and it is a must view for everyone. The whole IMF game plan is laid out for everyone to see. Debtors prison, Emigration wakes to escape debtors prisons, bail out on top of bailout, theft, usury. Pure Evil.
Max is stunned and is trying to wrap his head around the apathy of the Irish people.
http://maxkeiser.com/2011/04/24/hotspots-with-max-keiser-ireland/

I would encourage everyone to view these videos.


Just on a personal note:
I know a few people living in Ireland and until I saw Max's video I couldn't figure out what was wrong with them that they were just taking this crap while the people of Iceland simply said NO and the Greeks are saying NO.

I was talking to a friend in Ireland a couple of weeks ago.  He has been working in the same blue collar job for the last 8 years or so. When the banking crisis first started over there he was earning EU23.50 and hour plus 60 days per year in overtime. On that basis he was able to get a loan for a house 70 miles from Dublin and about 60 miles from work. Since then his pay has been cut twice and he is down to EU17.50 an hour with zero overtime. Taxes have increased, his house is worth approximately 150K less than what he paid for it or about half. (Yes, I told him not to buy the house and just wait. )
His crap box car is now 8 years old and he now owes more on it than the original purchase price thanks to an adjustable rate loan on his crap box. Gasoline prices are through the roof there.
I asked him why he just didn't default on the loans and he told me "I have never given up on anything"

There is a certain sense of pride in honest struggle. I don't know what sort of Hopium they put in the water over there but there is an optimism that things will get better. One of the interviewees summed it up when he said we want to be good little Euro citizens and if we take our medicine things will go back to the way they were.

It's not like people over there don't know what is going on. People like Matt Taibbi are common over there. There is still integrity in Journalism. (http://www.rollingstone.com/politics/blogs/taibblog)
It's domestication, Stockholm syndrome, shell shock and pure, uncut hopium.

 

Silver Bubble part ruh roh

Just to throw some more info out there we have the bond market to consider.
It's tanking along with the rest of the confetti
From Daneric's trading blog

Disclosure: Not a big elliot wave fan but occasionally they get it right. Typically the herd will jump from bonds to equities. 


Throw in a chart of the (general commodities) CCI for good measure

Is there any need to post a USD chart? It's just too depressing for us Dollar holders :(
So it's fair to say we are getting a nice run in general commodities and Gold. Will that pull Silver past the $50 mark?

BTW where has Yukon Cornelius gone? His blog has shut down.

It looks like premiums for Eagles are falling a little. BTW this is an excellent site for finding low premiums.
http://www.goldshark.com/silver/search/results.html?t=100&ms=oz&mt=silver&pw=6

Ebay completed auctions
http://completed.shop.ebay.com/i.html?rt=nc&LH_Complete=1&_nkw=100%20silver%20eagles&_fln=1&_trksid=p3286.c0.m283&_rdc=1

A couple of bad screen shots showing price/ time / and money flows within the Comex
Just looking at the money flow and candles on Gold it says going higher and silver looks to putting in a sideways slight down before heading back up (IMHO).  Someone correct me if I am wrong here but it looks like the trend is intact. In other words a little consolidation with profit taking in Silver. But I'm not an expert with charting by any stretch of the imagination.
I used this as the source for charts http://www.pfgbest.com/traders_tools/quotes/ib/?page=lookup

Silver Bubble? Part Duh

[Louis: The "edit" option for your post below does not appear to be activated for me - so I will post a few points on the topic here]

I'm tired of hearing that the price of silver is increasing parabolically. I don't think that means what people think it means. Any asset class with a steady growth rate is going to appear "parabolic" on a linear chart. Is steady growth a negative thing?

If you can draw a trend line on a logarithmic chart, you have parabolic growth, folks.

Let's look at a logarithmic chart of the NASDAQ bubble:

Note the linear trend that lasted from 1975 until around 1998 (when the internet hyperbole hit). Thus, the NASDAQ grew parabolically for over 20 years! Also note the linear trend lines I drew following the NASDAQ crash of 2001 (i.e. until present). This is linear growth on a logarithmic chart, so clearly, the NASDAQ is in another bubble (if by bubble you mean growing parabolically).

On the other hand, parabolic growth on a logarithmic chart is cause for concern. It has to be, because if such growth continues, soon you'll run out of numbers. So, let's concede that that ends badly.

Is the price of silver increasing parabolically on the logarithmic chart? Before we get to that, note the gray circles I drew above on the NASDAQ chart. All examples of parabolic growth; qualitatively very similar, in fact, to the eventual blow off top. Why didn't those parabolic jumps end badly? A pattern seems to emerge:

Short-term parabolic growth on a logarithmic chart is OK when it takes the chart back to a major trend line.

Look at a logarithmic chart of the housing bubble.

Once again we see multiple decades of growth on a logarithmic chart that tracks a linear trend line. A hundred year bubble? Of course not. Also note, we see at least two parabolic increases on this logarithmic chart before the collapse of 2007 (black circles). But since those moves took the chart back to its trendline, all was well.

Now let's look at a logarithmic chart of silver.




(Unfortunately I could only find SLV, and even that only went back ~5 yrs). Clearly we see a linear trend (on the logarithmic chart) going back to the very beginning of the secular bull market. Yes, the big moves since August appear slightly parabolic on this logarithmic chart ... but then they've just taken silver back to the trend line.

Now, keep in mind, I could've drawn 10 different trend lines, and depending on exactly where they ended up, I could've easily made the argument that silver is overbought in the short term and needs to fall 10 dollars or whatever. But the trend line would still remain, and the silver train would still be in business. Moreover, since we've now approached the long-term trend line, if we continue to see parabolic growth on this logarithmic chart (e.g. a commerical signal failure), then we might have to expect a very sharp correction.

On the other hand ... if the fundamentals are strong enough, even parabolic growth on a logarithmic chart can last awhile before it inevitably ends badly. Here's a logarithmic chart of gold in Weimar Germany. You'll see my point of running out of numbers.

Silver Double Bubble toil and trouble

GM, I decided just to do a new post and we peck at this with a clean slate.
The notion here is that we change this post and make notes on it as we digest and discuss available information so that hopefully by Monday morning we have a better idea of a short term or even long term game plan when it comes to Silver. So I'll go first and everyone feel free to jump in and edit or make notes on charts or just make observations and suggestions.
The idea here is to be completely open. Nothing is taboo. No suggestion is considered silly or crazy. No conspiracy theory is off the table. No trading strategy is considered bad.

For example sometimes in marketing you try and think outside of the box and it becomes forced and non productive. To counter that it can be productive to try and think of the worst campaign slogans or the worst strategies. Sometimes while trying to refine a product for production it can be fun to say "how could we possibly make this product worse?" it helps eliminate and possibly predict points of failure. So this is a little bit social experiment and a little bit of fun as well.

There is a text "strike through" option as this evolves we may put to use. The bottom line is there are no rules and if someone else out there wants to participate feel free to ask an we can set up temp writing privs.
The only rule is park your ego at the door and keep it civil :)

Following GM's lead the first chart is from Google Trends and it's simply a query of how many people used the search terms "buy silver" and "sell silver"

To me this clearly shows there is still twice as many people interested in buying than selling.

The Second chart is one I'm sure everyone is familiar with. The question is where are we on this one.
(Sorry couldn't find a better one than this)

This is obviously silver (not up to date) Is this the right starting date? and trying to match this chart against the chart above where does that put us? We are definitely in the awareness. Are we past it and into public?
Unless the public is too busy watching dancing with goats then chances are they are aware. Are we being contrary for the sake of contrary (which is not contrary at all)?

So on the surface we have the Silver "Rhino horn" and according Jim Sinclair we should sell when we see Rhino horns. I haven't tuned into radio Santa so I don't know what he is saying about Silver at this time. People like Mish have already traded their silver in for Gold.
On the other hand we have this http://www.zerohedge.com/article/goldcore-questions-comex-silver-default-due-secret-buing-russian-billionaire-chinese-traders
and of course the whole Wynter Benton saga whose end game is to get Blythe fired after bleeding her dry.
I'm going to come right out and say it ... I believe Wynter_Benton is real. I'm out of the closet now :)
James Turk is calling for higher silver prices this year etc etc.

Edit: It looks the bankers have reduced their shorts by 26 million oz per the COT report. Count that in the bullish column. In other words they got smoked and had to cover.

The Silver Bubble Bubble

Guest Post by GM Jenkins

Blow off top, folks ...

*courtesy of Google Trends

silver bubble

sell silver

If / When SHTF don't depend on the cops. You are on your own.

This evening my Wife witnessed a hit and run accident and was smart enough to grab the plate number of the offender. As soon as she got home she called it in via the non emergency line. She was told to call 911 and the clown hung up on her.
So she called 911 and they told her they couldn't take the report and to call the non emergency line. Then she called the non emergency line back but because she didn't have the cross street they wouldn't take the report.
OK a minute on Google maps and we have the cross st.
Call it in again and she is told they don't take reports from witnesses to accidents. What?
Unbelievable. So some poor slob gets run off the road and the cops aren't interested?
What exactly are these ((*()? losers being paid for?
I know they can write tickets. Is there anything else they are good for?

The Mayors office is getting a call tomorrow. If I don't see some action within the hour from that the local newspapers are getting a call.

On second thoughts the article title should say "You are on your own now"
Edit: Everyone is getting a call tomorrow. 

Gold Mid Day Tuesday

www.goldtrends.net

Monday's highs hit the upper purple line and a pullback is in play --- going into Wednesday as an ideal time for a low in the 1480-1490 area. KEY SUPPORT ON A WEEKLY basis is not until the lower purple line near 1460 ---- but that might be reserved for a May pullback. Seasonals and cycles favor a low this week ----------- and then one more push up into the first week of May. The May 12th date will be a FULL 60 months from the last major gold high ---- and about a 100 percent gain from that high ------ so the potential to move higher in early May is favored ----- at the moment.

Silver Mid Day Tuesday

http://www.goldtrends.net/

In our last update we were looking for some type of pullback going into last Friday, but the market exploded higher to almost 50 on Monday Morning --- since then a pullback to the upper purple line as the Tuesday low has reached that area ------ where 43.00-44.50 is first support this week. Additional support is the 39-41 area where the upper dotted trend line and lower purple line meet. Ideal low for this week would be Wednesday --- in the 43-44 area. Be careful --- 5% moves in one day ---- or 8% like on Monday is tuff when trading leverage. If cycles play out and seasonals ---- we look for a low this week ---------and then a rally into the first week of May --- and then a two week pullback or consolidation during May.

PSLV premium may take a hit

To anyone who bought PSLV on it's opening day congratulations you are smarter than the average bear. 
This is an FYI to anyone holding PSLV not a debate on whether the premium is simply true price discovery or a mini bubble.
Per Tom O' Brien Sprott is planning to dump some or all of his PSLV holdings. In  case you don't know who Tom is he is a self proclaimed Gold lover who has been calling a top for about a year or 10 in Gold. The video is here http://www.tfnn.com/hour01.html

Keep in mind this does not mean Sprott is getting out of Silver as he has plans to open a PSLV 2 in the future. However, depending on how he sells or the market reaction to this news the premium may take a hit. As always you have to do your own due diligence and if you are really concerned give PSLV a call.

Strange Days (have tracked us down)

Guest Post by GM Jenkins

Check out the SILVER to Silver Wheaton ratio, and the SILVER to the XAU Gold and Silver Index ratio, with 10% exponential moving average envelopes .

These ratios have to correct.

Assuming silver stocks won't rise if silver falls, there are only 2 possibilities if the ratio is to correct:

(1) silver falls AND silver falls faster than the mining stocks. How often does that happen?

(2) silver rises AND the mining stocks rise faster than silver. This, in theory, should happen all the time, but hasn't been lately.

My guess is that (2) is more likely. (And my if my guess were worthless, Louis wouldn't pay me the big bucks to post here.) However, you can go to stockcharts.com and create these charts yourself; you'll see that the last time these ratios popped out of their 10% moving average envelopes so saliently, it was during the late 2008 chaos...

Silver, Cheap Electricity and Bourbon

Kingworld news has a good interview with Bill Haynes

He might be talking his book but had this to say;

“No selling of Silver Eagles” “No frenetic buying” “Silver over Gold preference”

“All other products readily available” “Big buyers going to Gold”

Also interviewed was Dan Norcini and he had this to say:

“Silver Bulls a little concerned because of strength of move” “Gold orderly ascent”

“Smaller investors may be moving the physical market” “Serious inflation in China and Gold and Silver are where they are hedging against inflation”

“Private traders are pushing this market” “Paper losses are huge for the shorts” 

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/4/23_KWN_Weekly_Metals_Wrap_files/KWN%20Weekly%20Metals%20Wrap%204%3A23%3A2011.mp3

A fascinating glimpse into the future of cheap electricity that chalks up another use for Silver.

http://news.stanford.edu/news/2011/march/saline-rechargeable-battery-032811.html

 If you want to be the last guy on the block with motorized transport that doesn't smell like Kentucky fried chicken follow this guys lead.

This guy decided it would be a good idea to take a pile of junk he had laying around and make a car that runs on booze. As he is from Kentucky it’s Bourbon.

http://www.ispyce.com/2011/04/kentucky-man-invents-bourbon-whisky.html

Wow Armtrong is on a tear. Another new article

http://www.martinarmstrong.org/files/The%20Next%20Wave%2004-21-2011.pdf
Without comment as I haven't read it yet.

Wynter_Benton vindicated? 80% Premiums paid out to Silver Longs - Chapman

If you consider Bob Chapman a flake then skip this audio clip. At the 7 minute mark it gets interesting. If you guys remember the WB group claimed they were getting significant premiums to accept cash over delivery.
EDIT: I followed up with Bob Chapman and he has no first hand knowledge of this as fact. I would consign this post to the bit bucket but anyone returning to view this or reference this to bolster an argument should know this is not good intel.

Formidably difficult or laughably easy?

Guest Post by GM Jenkins

I once consulted an encyclopedia of philosophy to try to make heads or tails of Martin Heidegger's ideas. His entry went something to the effect of: "Heidegger's philosophy is formidably difficult, unless it doesn't make any sense, in which case it's laughably easy." And so it goes with silver: "Trading the silver market is formidably difficult, unless there's manipulation, in which case it's laughably easy."

A case in point. Kid Dynamite, who, Cincinnatus-like, gave up a lucrative position on Wall Street to become a citizen farmer in the woods of New Hampshire, making maple syrup, tending to his garden, and shooting silverbugs for sport, recently asked "why is it that we pay so much attention to silver?":

Compared to some other high-flyers, silver is a total dog, underperforming the really bubble-icious Party-Like-It’s-1999 momo champions like $LULU, $OPEN, $SINA and $TZOO ...

KD interpreted this as meaning "the world is not coming to an end":

What’s my point? ... Silver is part of the momentum rally ... Enjoy the ride – profit – but don’t go off the deep end and delude yourself into thinking that it means we’ll all be lugging around carts full of canned food, sawed off shotguns under our soiled trenchcoats, as we wander from one post-apocalyptic wasteland to another looking for fuel, shelter, and a better life now that we’ve defeated the Imperialist pigs and their Fiat experiment.

Of course, one could arrive at a different interpretation. If the momentum traders (in conjunction with the Fed's liquidity pump) can promiscuously inflate even garbage stocks like LULU and OPEN to the point that that they perform just as well (or even better) than the fundamentally valuable asset class of precious metals, does that not suggest price suppression of the latter? Perhaps we have yet to see, or are just beginning to see, the full force of the silver fundamentals come into play, sending their fiat prices to the moon.

Is there a way to tell if vectors unique to the silver market (tight supply, massive short squeeze, the incipient death of the Cartel) have also begun to come into play? Perhaps we can try to cancel out factors common to two assets by looking at ratios, e.g. the $SILVER:NFLX or $SILVER:LULU or $SILVER:OPEN ratios? I am no chartist, so I won't draw any trend lines or make any comments but to say that FWIW (very little) these charts look pretty bullish to me. I'd like to hear what others think.






*The astute reader will note that, of the stocks adduced by KD, I didn't post here the $SILVER:SINA or $SILVER:TZOO charts, which (even to my untutored eye) looked demonstrably less bullish. However, SINA, as KD points out, has some connection to China, and so I'll file that under the dollar bearish trade. And judging from the cheap ticket to Vegas I bought a few days ago, TZOO is a damn good company.

Silver .. Decisions, decisions.

Anyway back to the subject we all really care about here.
http://www.financialsense.com/contributors/carl-swenlin/silver-still-soaring

It's the last paragraph that is worthy of note when he looks at the Net Asset Value (NAV) premium as a means to measure froth or exuberance. The author doesn't mention Sprott's funds though which by his own measure would be considered very frothy or as Harvey would say they are simply real price discovery.

There is another good article here;
http://blog.afraidtotrade.com/look-at-these-etf-charts-slv-zsl-before-calling-a-top-in-silver/
and he makes the point that typically lines of resistance are based on the notion that long term bag holders will try to unload from where they bought in at the high. In this case he is talking about the $48 previous high back in the Hunt Bros. days. He asks "what is the likelihood of someone unloading after decades of waiting?

On the whole it looks like we are still in a short covering rally. At some point that exhausts itself and we come down and it's usually fast in Silver. Being a degenerate gambler I have decided I am going to ride this puppy higher before trading my Silver for Gold. In a perfect world that means about $120 in Silver adjusted for inflation.

Oh yeah, If you haven't done so already you really should bookmark this terrific spread sheet created by Robert Leroy Parker.
https://spreadsheets.google.co/ccc?key=0Ajiwv0ic6RUtdGR1d2k1VXVLZEd0UG10QWxkalIwb2c&hl=en&authkey=CNzzi40L#gid=0

Edit: Just to add the pic below. As you can tell Warren has some travel plans.

Martin Armstrong's latest (third essay since release)

Martin Armstrong - Artificial Intelligence
Mr. Armstrong has a lot on his mind lately and he is pissed off. I don't blame him. Unfortunately, the notion of AI running the court system is a pipe dream. Everything can be tampered with. Even something as simple as a voting machine.

Gold Mid Week Wednesday

www.goldtrends.net

Since its mid week Wednesday --- the potential for a gold 1505-1509 area pullback or consolidation into Friday morning has potential. Additional resistance is the 1515 area at the upper purple line. First support is the 1483-1492 area ----- and more important support at 1466-1474. The trend remains up ---- but after 4 tests of 1505-1507 intra day --- we could pullback and consolidate into Friday morning.

Silver Mid Week Wednesday

http://www.goldtrends.net/

The silver market has reached the upper boundary of the purple uptrend line -----and has penetrated it higher. Since it's mid week wednesday --- a pullback into Friday morning would not surprise me. Support is the 42-43 dollar area. We shall see.

Signs of a Top?

(Guest post by GM Jenkins)

Brian O'Flanagan is a smart and humble guy (i.e. not an anti-metals a-hole), who easily got the better of SGS in their recent dust-up (SGS may very well be right, but is he bright? One wonders why he's so inept at defending his positions in a civilized manner). O'Flanagan calls this video from CNBC the "sign of a top."

O'Flanagan:

"If you’ve ever been to a coin show you’d know how strange it would be to see a CNBC camera crew there. The average age is about 75 and most of the people there are sitting with their magnifying glasses arguing about whether a Lincoln cent is an AU58 or MS60. Not quite a party atmosphere, yet CNBC felt the need to send a reporter to do something, anything, to appease their viewers demanding coverage of the hottest investment of the era: silver. If this isn’t a sign of a top, I don’t know what is."

Now, very likely we're approaching a short-term top here, although even a 10% correction would barely take silver below $40/oz. So, by "top" I believe O'Flanagan (and others who talk disparagingly of the silver bubble) mean some kind of a waterfall collapse is in the works, perhaps taking silver back down into the twenties or even overshooting into the teens.

While that's possible, I don't think O'Flanagan's two CNBC videos support his position at all: I sensed no mania whatsoever in either video; the voices of the commentators exuded skepticism and at times a gay incredulity, with even the coin dealer interviewed using the word "bubble" unflinchingly and without equivocation. The fundamental reasons for buying bullion weren't explicated, but rather confounded with the qualitatively different reasons for buying rare coins. The apparent consensus at the coin show was that gold could eventually hit a very tame $1800/oz. No talk of "gold to the moon," of "paradigm shifts," of "100% guarantees," of things being "different this time."

Which is ironic, because if manipulation is real (and let's remember there currently stand dozens of lawsuits vs. JPM that, if nothing else, have not been summarily dismissed) then things are certainly very different this time. Ted Butler sums up the silver bulls vs. bears state of affairs the best:

"Against the backdrop of a surging silver price, the calls for a sharp sell-off continue unabated. As I previously reported, almost all those calling for a sharp correction seem to share a commonality, namely, a disbelief in the silver manipulation. I think this is a crucial observation. Let me stipulate first that there can be a correction in the price of silver regardless of whether it has been manipulated or not. But nothing can be more important to the future direction of silver prices than in understanding whether this market has been manipulated. To those who don’t believe silver has been manipulated in price, it’s hard to see how the price won’t collapse. Those who believe that silver has been manipulated [like me] know that the price will explode when the manipulation is terminated. That’s a clear line of demarcation."

*Update: Here is the other video adduced by Mr. O'Flanagan, who raises some good points vs. manipulation in defense of his position in the comments:

Gold chart Mid day Monday

www.goldtrends.net Last weeks low was a direct test of the upper red trend line and the 1444 area. As long as that area holds the trends remain up. First resistance this week is 1497-1505 and then 1515-1525. Support is the 1457-1466 area and also 1471-1474. The US debt downgrade today has markets in a choppy fashion with stocks down 200. If another leg lower begins later in the day on stocks ---say another 200 points --- it might make the metals nervous. For the moment -- the trend remains up ------ and gold likely to consolidate for the next day until the market gets clearer direction on what it means to the markets. We think it would take a big stock market sell off to pressure gold ---- but that is not out of the question --and would probably only be temporary. As long as price is above last weeks lows --- the trend is still up.

Silver mid day Monday

www.goldtrends.net Silver reached Monday resistance in the 43.40-43.70 area at the upper purple channel line. This should provide resistance going into Tuesday. Support is the 42.20, 41.60, and 40.60 area. Most importantly ---- the dotted trend line and lower purple line is weekly support. KEY resistance will be 43.50 and up to 44.80 over the next few days. With silver 40% above the 200 day average --- there is no doubt that price (historically) is overbought on a short term basis. The downgrading of US debt and the increased euro debt situation should be supportive of metals. The only thing to watch is the US stock market and the 200 point drop so far today. If the stock market BURPs and begins another leg down -- it may affect all markets on a short term basis........ and keeping in mind the poor performance in silver stocks last week -- one should at least maintain a bit of caution at this price level until the market digests this latest news.

Absolut Reflections (Guest Post by Warren) Updated

For those of you busy submitting your income taxes - I recommend you do not read "Income Tax : The Root of All Evil", (brought to my attention by Kris Sayce @ Money Morning) http://mises.org/etexts/rootofevil.pdf. Written in 1954 it's difficult to ignore the raw wisdom which explains simply how our liberties have been methodically taken from us - as real for us here in Australia as it is for you good folk in the USA.

Today my fingers fumbled a fiat currency coin, an interesting experiment to place it next to a half ounce gold coin and confirm the fiat coin is no better than a game token (the ones you use in the slot machines at a video arcade). Flipping it over the design caught my eye and suppressing the urge to vomit I realised from my reaction I have truly graduated from the University of Precious Metals.



Congratulations to Turd Ferguson - a new record of site activity. At last count 467 comments on one thread, stretching an already thin signal-to-noise ratio. But looking closely at the turd bowl, over time there have been some absolute gems buried - the least of which has been the appearance of no less than 4 'blythe' identities ("bsjm", "Blythe", "blythe_masters" and "Trinity B/Trinity Ble"). Now objectively, at least three of these are not the real Blythe (and possibly the fourth) but it's piss funny that 'Trinity B' put an entry in 'guess the price for silver' next Thursday comex close ($44.58).

With Silver's true value being discovered at a rapid pace, I just want to spare a thought for Wynter Benton, whose advice I surely traded on and am grateful for. I was right when I suggested they would be forgotten in the exuberation - everyone too busy counting their fiat gains to wonder why the price of silver suddenly began trading differently late last year. As silver punches into new highs, the new task will be trying to do homework to figure out at which point silver is over or under valued. I'm doing a project which should provide some good objective analysis, more soon -- Warren.

(Sunday Update)

The blythe identity calling themselves "Trinster" also had some posts under the tag 'Trinity Ble', which I had missed. Actually there was price information in one of the Trinity Ble comments - an incredibly good call, as detected later by 'Venturi' 14-Apr-2011.

"... I'll throw you a bone. Silver at no lower than $39.65 tonight. Will get to just short of $41 tomorrow, then back below $40 before creeping back up. Will get near to $42/42.50 on Friday. Next week, it'll go towards and probably through $43/$44... - Trinity Ble [ April 12, 2011 6:42 PM ]

Now the only reason I'm looking at this is that I'm toying with the idea of throwing some dollars into silver next week's dip so I want to test Trinity's price call (and also try out my digitizer for some chart markup). Here are those calls overlaid on the silver chart (approximate).

Gold Friday Morning

www.goldtrends.net The push back up to new high's from gold's retest this week of 1444 continues to favor the bulls. Resistance is the 1480-1488 area and then the 1515-1525 zone as we move towards Monday. Support is the 1457-1463 zone on pullbacks. As long as price is above the 1444 area ---- the trend remains up. The market remains strong and favors higher prices into next week.

Silver Friday Morning

www.goldtrends.net After hitting the upper purple trend line on Monday -- silver pulled back to just under 40 but lower price could not be sustained and the last two days has silver exploding higher again. The market is in a runaway condition as price keeps escalating higher. The next price level is the 42.75-43.00 dollar area. Prices have the potential of exploding higher at any moment so its best to just keep favoring the upside. Support is the dotted trend line near the $40 area. In summary -- the bulls are in control.

Silver to $50 in short order? Thanks Bolivia

In case you missed the news Bolivia is threatening to nationalize it's miners.
High fliers like CDE and PAA got a beating today. In after hours the shares were up a little based on low volume trading so expect more selling before the bell if there is no good news or settlement.

In case you don't know Bolivia has everything going for it. Huge mineral resources and oil and gas to boot. It is said that Bolivia built the Spanish empire with it's silver.
Bottom line here is that Bolivia is one of the worlds sixth largest silver producer.
The people are pissed and are willing to express that unlike the Anglo world.
This is all bullish unless you happen to own stocks with exposure to Bolivia. It's bullish for Silver and it's bullish for Silver miners outside of South America as everyone jumps ship from Bolivia (and other South American miners possibly) and seek exposure in other producers.

This is just the start. One revolution leads to another as we have seen in the middle east.


PAA is definitely in the line of fire.
I would suggest reading the following article thoroughly to get an understanding of the underlying festering sores that make up Bolivia. 


http://bermudaradical.wordpress.com/2010/08/20/two-takes-on-the-bolivian-uprising-in-potosi/
"For example, a recent study of a Canadian subsidiary, Pan American Silver, operating in the department through a shared-risk contract with the state company COMIBOL (COMIBOL effectively controls about 30% of the project), shows that the company will pay merely 17% taxes and royalties on projected gross sales value over the next 30 years. The taxes going to the municipality where the company is located, one of the poorest in the country, are just over 0.5%. This is straightforward looting. By comparison, in various shared risk contracts in Chile (hardly a socialist haven) taxes and royalties going to all levels of the state amount to up to 51%, whereas, in Peru, it’s on the order of 26%"


From Reuters;
Coeur d’Alene Mines Corp. (CDE) and Pan American Silver Corp. (PAA) shares plunged today after Bolivian President Evo Morales announced plans to expropriate mines amid protests for wage increases.
Coeur fell $2.68, or 7.9 percent, to $31.08 in New York trading, the most since May 20. Pan American slumped C$3.69, or 9.3 percent, to C$35.89 in Toronto.
State mining company Comibol may rescind contracts with companies including Coeur, Pan American and Glencore International AG, La Paz-based newspaper La Razon reported yesterday, citing Comibol President Hugo Miranda.
Since taking power in January 2006, Morales has seized gas fields, oil refineries, pension funds, telecommunications companies and Glencore’s tin smelter in a bid to increase state control over Bolivia’s industry. Morales told reporters in La Paz on April 12 that he plans to release a decree on May 1 overturning the privatization of state mining assets.
Coeur’s property rights are not the subject of expropriation, company spokesman Tony Ebersole said in an e- mailed response to questions.
“Our surface mining and silver production from San Bartolome is under way now as usual,” Ebersole said.
Pan American spokeswoman Kettina Cordero said in a telephone interview from Vancouver that the company hadn’t been notified by the Bolivian government. Glencore spokesman Simon Buerk declined to comment.
Protesters battled police, blocked roads and surrounded Morales’s residence in La Paz today as a general strike for higher salaries entered its eighth day, Radio Panamericana reported.

More info here on the miners that may be effected;
http://www.vancouversun.com/business/Bolivia+plans+expropriate+mines/4610801/story.html#ixzz1JXApVhiC

Silver Thursday Update

www.goldtrends.net On this mornings chart --we're using the silver ETF (SLV) to show this weeks pullback was just a test of the trend line we call the pre shortage panic line and price supported very well so far at that area. The other key support on the chart is the moving averages near the 38 area. (NOTE: SLV is currently trading near one dollar lower than spot silver so keep that in mind when you look at the chart) Resistance is the 41.45-42.00 area for the remainder of the day. As long as silver is above the 39 dollar area ----- the upside still has the advantage.

Thursday Gold Update

www.goldtrends.net This weeks low was an exact test of the 1444 KEY price point we have been focused on for the past few weeks. That low held and price has been establishing support at the upper red line since the Tuesday low. Since then there have been 3 PROBES of that red line and each test has held. The 8:30 am est PPI report put in the morning low right at that red line ---- and price has moved up 10-12 dollars going into the 10am est period. Next resistance is 1474-1488 -- as long as price is above 1444 the trend remains up.

Martin Armstrong Another new essay (criticism)

Martin is on a tear here. I guess getting out of prison gives one a new purpose in life.
Us bugs may not like or agree what he has to say but you have to respect his opinion.
Here is the link: New Essay

I'll only make one comment as regards Mr. Armstrong's thesis that gold is not the answer because of what history tells us. Just because something fails once does not mean the premise is flawed. The flaw is not with gold or paper. The flaw is and was human greed.

Until we have central banks that are transparent, whether they are on a paper standard or a gold standard, then any system we implement is doomed to failure. The failure is not gold or paper. The failure is putting too much power into corrupt hands. Checks and balances, regulations, honesty, term limits, transparency and simplicity should be the cornerstone of every monetary and political system.

There are few products on the planet that will enable that scenario as regards money and only two have cultural and historical acceptance worldwide.

Gold Charts for Monday

www.goldtrends.net The gold market is consolidating its gains from last week as price broke out of a five month trading range. First support this week is the upper red line in the 1450--1455 area. Additional support is the 1444 area and the lower purple line. The action today looks most like a normal consolidation after a good run. As long as price is above the red line and/or the lower purple line on a closing basis --- the trend remains up. Resistance is the 1488-1515 area this week.

Silver Monday Update

www.goldtrends.net Silver has reached the 41.95 area on Monday and is very close to the upper purple channel line. The highest monthly close in 1980 was 41.50 ----- so there should be some resistance in the 41-43 area. Support is the 40.50, 40.00, 39.30, and 38.20 area. A pullback to the 40 area or even the upper dotted trend line should provide support -- at least initially. The trend remains up -----and the lower purple channel line and the dotted trend lines are first support this week.

What is Pimco up to and why do I care?

Zerohedge posted another article on Pimco today; http://www.zerohedge.com/article/exclusive-bill-gross-now-short-us-debt-hikes-cash-73-billion-all-time-record
The headline says it all. In the last few months they have dumped Bonds and gone into cash.
So why should you care what these guys do is the question. Simply put these guys know well in advance what the Fed are going to do. They know what the Treasury is going to do. These guys can pick up the Bat Phone and get Bernanke, Obama or anyone else on the phone.
So what they are saying here is "we don't think there is any money to be made in Bonds right now or it's not worth the risk". Bill Gross of Pimco has been saying for months now they don't like the way things are going in this country. A word of caution though, these guys just like all the bobbing heads they wheel out on CNBC etc are masters at disinformation, slight of hand and generally making sure we are the suckers in the room.

It's impossible to know right now exactly where they are positioned but whatever way they go will determine where everyone else goes. If you say US bonds are crap then you are implying the same about US cash.

Well sitting on cash doesn't make cash so what are they up to? Will they return the money to their investors? Will they start buying equities? Commodities? Gold, Silver, Oil etc.? Simply waiting for a buy the dip moment in Bonds?

Sometimes to find the answer you really just have to look.
http://www.pimco.com/EN/PressReleases/Pages/PIMCOContinuesExpansionofActiveEquitiesTeamWithHiringOfSeasonedInvestmentProfessionals.aspx

http://www.pimco.com/EN/careers/pages/experiencedhires.aspx

It's all equity related hiring with a smattering of derivatives and Credit Default Swap knowledge required.  So it looks like they are going to ride the equities bull but grab some credit default swaps for the inevitable down hill ride. Which is Bullish for us bugs.

Martin Armstrong's new essay

Well worth reading and understanding the implications of what he has to say.

www.martinarmstrong.org/files/Hello%20World%2004-06-2011.pdf


Mr. Armstrong like many others sees financial meltdown in our near future. What his models can't tell us is where we go from there.

I would suggest listening to this from Bix Weir:
http://www.roadtoroota.com/public/527.cfm

I would also suggest tuning into what FOFOA has to say as regards Freegold: http://fofoa.blogspot.com/

I would also suggest you tune into Jim "Santa" Sinclair:
http://jsmineset.com/

A helping of Jim Willie would not go astray.
http://www.goldenjackass.com/main5.html

Richard Russell of Dow Theory letters: http://www.businessinsider.com/dow-theorist-richard-russell-sell-everything-liquid-you-wont-recognize-america-by-the-end-of-the-year-2010-5?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29

There are many others who are willing to put their reputations on the line. Some for money others for the greater good. The bottom line is we are in uncharted territory if the Dollar collapses or at least is no longer the worlds reserve currency.

There are many theories of what could happen or should happen all the way from a brave new world to hunting each other for food. See "The Road" for that particularly depressing thought. On second thoughts don't. I only managed to get 3/4's of the way through that miserable movie. It was just too depressing.


Best case scenario is Bix Weir/ FOFOA and worst case is "The Road". A controlled collapse by the good guys hurting many people but with a return to sound fiscal policy or worse than the dark ages.

What to take away from all this is we may muddle through, there might be a rapture leaving all the bankers here to fend off demons or we may simply have to start a new monetary system that everyone understands and can trust. We don't know.

But you can make some preparations if you see financial collapse in our future. Think "Mad Max" and "Bartertown" and you should be OK.
What do people want and what do people need?
The basics: Food, Water, Shelter and Self Defense.
Luxuries: Booze, smokes and toilet paper. 

If it's Hyper Inflation, Stagflation get them now before the prices goes up.
If it's Hyper Deflation get them now while you still can.

The message is get what you can now. 

Gold Thursday Close

www.goldtrends.net The move higher this week in gold shows a breakout above the old trading range. Price has been consolidating for the past 48 hours ---- first support is the lower purple channel line. As long as price is above that area -- the trend higher is favored. First resistance is the upper dotted line in the 1480 zone.

Silver Thursday Night Close

www.goldtrends.net Silver is trying to break above the upper trend lines of its price channel and carve out a smaller channel that leads towards the 41-42 dollar area. Price is just consolidating over the last 48 hours just under 40 --- and at the top of the upper dotted trend line. As long as price is within the purple channel lines --- the trend remains up. If silver can hold above the upper dotted trend line --- price could accelerate higher inside the purple channel at an even higher rate of momentum. Watch this area --- its an important one. Support is 37.60-38.20 at the lower purple line.

Silver Tuesday Update

www.goldtrends.net Silver has now pushed above the 39 dollar area ---------- and is at the upper end of its trading range. A push above the upper trend line could bring in a blow off and push into the $41.50 area in silver. This upper resistance line is important --- but the upside can't be eliminated as the trend is still up. As long as silver is above 36.70-38.00 --- the trend is still up on the short term.

Gold update for Tuesday

http://www.goldtrends.net/

The gold market withstood four tests of the 1410-1412 area last week. This action is similar to the test we got at the lows in early February where we had 4 tests of 1325. The last low on Friday morning was an exact test of the lower purple trend line. As long as the lows from last week hold ----- the trend remains up. Look at the 1453-1460 area as next resistance in spot gold.

Just for fun - an insane downhill race in Chile

Are Economists retarded? (Part 1)

Anyone who pays even the slightest attention to the financial news asks themselves this question. We see them on TV and when some unfortunate questions their opinion they are given the raised eyebrow  which is shorthand for “you really are fortunate I talk to you”. Anyone questioning these guys with less than a Phd. they dismiss as idiots.  There is no need to go into the numerous ways the various economists have gotten it so wrong for so long.  So I will just get right down to why they have been so wrong for so long and why economics is not a science.

Economists just like real scientists can show you a bunch of graphs and equations. But unlike those who base their theories on quantifiable and measureable tests that can be repeated and used to predict the outcome of a similar experiment the economist cannot. If you cannot predict the outcome of an experiment based on previous results then what you have is not a science. What you have is a theory and a flawed one. It’s really that simple and any science major will tell you that. If you cannot set up an experiment and predict the result then the experiment is fundamentally flawed or your measurements are wrong. If you cannot conduct a single experiment and predict the results then you are not a scientist.

So why are they wrong all the time? The answer is remarkably simple. They base their “science” on the notion that the consumer is a rational being and therefore the markets are a place where eventually price discovery and money will flow in a rational manner. The whole premise that the average human can be measured is simply wrong and I can prove it.

ECONOMISTS think of the average consumer as a rational individual who will look for the best deal or in some way balance quality and cheap to suit their lifestyle or needs. They think that rational comes into play with the way we conduct business or simply consume and nothing could be further from the truth.
There is a new wave of economic theory gaining some ground over the last few decades. It’s been given the title of “behavioral economics”.  I like to think of it as bologna economics because it likes to take little pieces of meat from everywhere and try and make something pleasant out of it.
Over the last 30 odd years these new economists have tried to figure out why classic economists like Krugman and Bernanke can be so wrong when they follow the text books to the letter. They are starting to amass enough data to say the human being is anything but rational or at least we don't have enough understanding of human behavior yet.
“We’re starting to understand a lot more about people’s behaviour,” says Pete Lunn, a behavioural economist with the ESRI and author of Basic Instincts .
“We’re beginning to see that it’s not the way we long assumed it was, particularly not the way professional economists assumed it was.” This has implications for how politicians and economists regulate and model future behaviour, but also for how we manage our own consumption. Some of the insights coming from behavioral economics have been known intuitively by marketeers and advertisers for decades.


We Gold bugs and Silver bugs in our smug superiority like to think of everyone else as sheep and this is a huge mistake in our thinking. We are not taking into account that we may be just a different breed of sheep. We too like to follow the crowd. We too don’t like to break away from the pack. We too tend to buy what we know or are advised to buy. We too tend to put all our eggs in one basket. When everyone puts all their eggs in the same basket we get a bubble. So far we have avoided that fate. 
However, even the marketing guys underestimated just quite how unpredcatable we actually were. 


Pete Lunn is filled with examples.
“If you offer people a cash discount for paying in cash instead of plastic, a certain proportion of people will pay cash and get the discount,” he says.
“However, if you change it so that it’s exactly the same situation but you call it a ‘credit card surcharge’ suddenly the proportion of people who do it will radically alter. Very few people will be willing to pay the surcharge and they will put in the effort and will pay in cash instead. But it’s basically the same decision.”
Lunn offers another example: “If you set up two products in a range – product A and product B – and A is cheaper than B, you usually find most people are buying the cheaper product but a small number are buying the more expensive product. It’s maybe a 70/30 split. However, if you introduce product C – a more expensive product again – suddenly more people will buy product B over A. Instead of 70/30 for A over B, it could be 70/30 for B over A. It’s the same decision but it’s framed differently.”
It’s all in way it’s framed and Lunn calls these subtle differences “framing effects”  and he is aware of about 70 of these examples. What the Marketing guys know instinctively classical economists are not willing to acknowledge in their equations. How can they?
Without getting bogged down in jargon that every group of people create first as shorthand and then to lock outsiders out of conversations it boils down to this. Most of the decisions we make on a daily basis are actually shortcuts. What we do is apply the outcome from a previous situation to an existing one. In that we don’t get bogged down processing every single decision we have to make by analyzing it over and over. It also means a good marketing guy or scam artist can leverage that to trick us.


In short when a consumer is faced with a decision they apply the processing from a previous decision. Therefore the typical consumer uses a rule of thumb to arrive at an answer. Lunn would call these “Heuristics”
 “Following these heuristics is not an entirely irrational thing to do,” explains Liam Delaney, an economist from the Geary Institute in UCD, who is currently spending a year at the Woodrow Wilson School in Princeton, the Mecca for behavioural economists.
 “I still catch myself making the kinds of dumb decisions I read about every day,” says Lunn. “But people use the same decision making processes for the big stuff, and that’s where it’s more worrying. Does it matter if people are losing a few cents on beans every week? Probably not. Does it matter if they’re taking up the wrong pension, or taking up no pension at all? Yes, it does. Does it matter if they’re buying overpriced houses because everyone else is doing it? Yes it does.”


Here is where we are all sheep whether we admit it or not. These behavioral economists have concluded that given a choice we will opt for the default choice. Much the same way as when you are presented with the shareholders voting proxy you will invariably not send it in and so your vote will be aligned with the current board members wishes. When you are given the opt in by default but have to make an effort to opt out invariably the default wins.
There are a lot of politicians paying these guys for advice and they will be using these tactics to shape and bend policy to their wishes by default. Obama for one takes advice from behavioral experts as does Prime Minister Cameron in the UK. 2012 is the date set for important personal decisions on pensions in the UK. The default is to opt in.
Apparently behavioral economists helped Obama frame the current policy it in such a way that encouraged spending over saving.
 On top of all that we have the Spam sandwich of economics in the form of Neuroeconomics.
This is the latest kid on the block and very early stage studies have been conducted. These guys are hooking us sheep up to measure the reactions in the brain as we make decisions and as we are presented with products. The more we look at ourselves and understand ourselves we become easier to push and nudge in the desired direction. Once we understand how all these little pieces work together then it becomes easier and easier to pacify us and round us up into our pens in the evening and cubicles in the morning.
The simple little credit card surcharge versus cash discount scenarios illustrates how seemingly irrational we truly are.  However, what appears to be irrational is simply us taking mental shortcuts but Bernanke and company will not take this information on board simply because he is as stuck in his thinking as we are in ours. We will have to invent a whole new math to quantify emotions and decision shortcuts to truly bend economics to our will.