Vainly Willing the Return of the 2011 Silver Bubble

Do you remember February to May 2011?

I do. I'd previously confined my trading to stocks: oil and resources, mostly. But I wanted to branch out and thought the gold and silver charts looked good for a solid bounce back. My thesis for gold was pretty clear: a nice solid investment to hedge the rest of my portfolio against inflation. And I figured I'd take a slight gamble with silver as I imagined it would provide me with a 'volatile version' of gold. So at the beginning of February 2011 I went in at 75% gold, and 25% silver.

Boy, did us newbie silver investors get lucky! The charts had pointed to a good rise in silver, but we hadn't imagined such a move in our wildest dreams. By the end of the month it had gone from $26 to $34, and I was scaling out of gold and in to silver. With this metal swap, the profits just kept rising. By the end of April, it had all gone stupid, and it was obvious to anyone with two neurons to rub together that we were in the grip of a mania. I got out at around $45 and never regretted the decision. A few days later silver started its plunge from $50 to (eventually) $26, and has barely recovered to this day (currently at $31 and change).

What I did regret, however, was what happened to everyone who had not ejected. It could easily have been me too, had I had a bit less trading experience and a bit less fear (yes, sharp moves higher always scare the absolute bejesus out of me, more so than the plunges - fact). And this burned my curiosity. What had actually taken place? How had such a mania developed? And why didn't most retail silver investors get out? They were still buying all the way up to $49, the poor bastards.

So I started to look more deeply into the 2011 Silver Bubble, and events since, and was rather shocked by what I found.

Bankster Shills

The thing I love the most about this blog is that the contributors are a collection of very different individuals, with very diverse views. I think it's fair to say that we're all generally bullish on the PMs, and that we have declared positions in gold and silver, but apart from that our only unifying trait is that we love debate, getting to the heart of the matter, and seeking to dispel myths and shoddy thinking as often as we can. If we see something we disagree with, we probe and challenge - including our fellow contributors' views.

Unfortunately, this approach has done little to endear ourselves to certain quarters of the PM community. Although that's a shame, it's perhaps understandable given that we're often a bit cheeky and polemic (or just good old-fashioned devil's advocates). However, what is less understandable is how a brand new PM meme has started doing the rounds: i.e. that the Screwtape Files is a fully paid-up psyops front for bullion banks.

The abuse in some parts of the blogosphere has been predictably banal and depressing, spiked by Brian O'Flanagan's recent question about the relationship between ZeroHedge and Sprott's PSLV. Here are a few of my favourite recent comments about Screwtape, taken from a number of sites, including ours (the asterisks are my addition, for those of a nervous disposition):

Tyberious: Those little piss ant, SLV, GLD, c*ck suckers[...]What the f*ck! They shall have no quarter here![...]I know these guys a paid shills for JPM, or whatever banks' d*ck they suck! Look nothing against homos, but these guys are whores! For all those that are new, these guys (KID D*CKINMYASS [sic], and butt buddies) pray on the ignorant and pretend that all is well, like there is no manipulation in the PM markets, that SLV and GLD actually have the metal they report to have and they attempt to spread misinformation and worst of all they f*cking do it for money!

PaidInFiat: Jeanne, eat a d*ck. How's that for an explanation? [and, later] Jeanne darc, gobble a donkey d*ck, you elf.

Silver Stacker: I don't doubt what you say, but I don't believe it either. It equates to me stating that the contributors to this blog like to suck each others d*cks and blow loads in each others faces.

Bay of Pigs: They are useless tools on gold or silver, IMO. Better off to ignore them. They have deadpanning gold and silver and supporting the MSM status quo since I can remember. They don't acknowledge anything being wrong/corrupted in the markets (especially the COMEX).

Green Lantern: That must be where the trolls go after they have finished flaming Turd on the main blog. I guess they need a place to wet their whistle also. From simply a journalistic point of view, did you notice that his entire blog is dedicated to flaming individuals/sites and point of views and rarely puts forth his own world views?

Ledbedder: Looks like the boys and girls at the other blog are green with (fake gold) envy.They think because they write "articulately" that they can fool some folks. Go right ahead, try. I honestly do not know anyone that can make an argument against the PM's not going higher over the next few years. Yes, 2011 wasn't their best, but look at the 10 years before that. Guess a decade isn't enough data to go on. That was my roughly written 2 cents as I didn't get a degree from Brown or HAAAAAAAAAAAAAAAvard. One last thing, look down your noses at us because we type swear words, who cares? Tell us you don't let out a good "F*CK" when you bang your shin on the coffee table. Liar.

SGS: Yeah. These morons, especially kid dynamite [sic] are part of a paid JP group to discredit us.

Anonymous: Screwtapefiles is just a front site run by the Bankers. Zero credibility there.

Anonymous: screwtape has zero credibility. The people authoring there have been exposed and countered many times before. It's a site of the banking shills, by the banking shills and for the gullible.

SGS: Dont come back here. You realize that I know who you are now. My tech seems shitty on the front end, no[t] so bad on the backend. You've been warned.

Lovely. What is very striking about such posts (and there are many more) is the level of visceral hatred for those who do not necessarily share their world view or - more importantly - the world view of their heroes. It is also hard not to pick up on a certain amount of deep-seated auto-erotic tension, which I imagine would be better released in a more amorous rather than aggressive way - but I'll leave that train of thought to the psychologists.

However, what is utterly conspicuous by its absence is any attempt to engage with the question at hand, to refute it through evidence, or to present a coherent counter-argument. Responses are limited to either "you're a c*ck sucker" or "you're a bankster shill".

Now that's a bizarre approach. Let's say for a moment (for the sake of argument) that they're right, and the only things we love in life are violent oral sex and getting fistfulls of dollars from JPM. How, exactly, does that refute the facts we have pointed out, or answered the questions we've posed? It's simply a diversionary tactic to avoid answering the difficult questions. So we are forced to ask: why would such diversionary tactics be used by certain elements of the PM blogosphere? If what they say is an open-and-shut case, why respond with abuse and allegations, rather than simply presenting their evidence and explaining their reasoning?

It is obvious to anyone who has ever read Screwtapes that we are not paid up Bankster Shills. We all give our time free to this site, despite us all having extremely busy day jobs and family lives. You will notice that there are no adverts on this site, and there is no donation button either. We make not one penny from this site by any means. We strive to hold the highest levels of integrity, and make full disclosures when necessary.

Sadly this cannot be said for other elements on the web. Some sites earn serious cash from their traffic, and others have direct links to those with a corporate interest in promoting precious metals. Not all sites - and I want to stress that. There are good guys out there. But suffice to say that the supposedly 'independent' content and advice peddled on certain PM sites is often as partisan and sponsored as that which emanates from certain parts of the MSM about which they scream foul on a daily basis. Corporate shills by any other name. I will expand on some of these themes in future posts.

Most of us are long the PMs, and most of us accept that there is a degree of manipulation in the PM markets. But we refuse to subscribe to the cartoon version of evil empires and wicked witches; a world of Zionist plots and farting bears. If a claim is made, such as Sprott's delivery problems or DSK's imprisonment at the hands of the Cartel, or a problematic gold bar in a vault, then we will investigate it. If we find it to be true, we say so. If we find it to be false, then we say that too.

This refusal to blindly accept all we're told, or to unthinkingly cheerlead the latest silver memes does not make us 'anti gold' or 'anti silver'. It does not make us 'perma bears'. And it certainly does not make us Bankster Shills. We value your comments, and we want you to challenge us (politely). If shown the evidence we will change our views on the spot.

We are beholden neither to the banks and Wall Street, nor to those with an interest in selling as many coins and bars as possible.

And it is that which makes us the most independent PM site on the web.

Silver and the bubble curve: where is the Smart Money heading? (Clue: it ain't silver...)

This post will make me about as popular as a fart in a spacesuit, I know. Certainly the PM blogosphere will react with a mix of mockery and vicious hatred. And even my esteemed fellow contributors at Screwtapes will probably run out of eyebrows to raise at what follows.

But I don’t care. There is so much nonsense talked about the PM markets on the web, and so many people are being unwittingly dragged into cult-like devotion to lumps of metal they think will make them millionaires, that I believe it’s becoming ever more important to present every possible side of the case.

So here’s an article about how silver is not the only fruit, and anyone whose sensibilities this offends can b(l)og off and instead read the latest spittle-flecked pant scrapings from SGS (which will no doubt be about Blythe destroying nuclear power plants in Japan at the request of Mossad, or – the new comment section favourite – aliens hoping to steal silver from the COMEX).

Bubble curves and the ‘Smart Money’

Most PM investors are familiar with this kind of

graph, not least because it is touted all over the place as a way of supporting the assertion that silver was not in a mania last year, and will not be in a mania if the price doubles (or triples) this year. Now is the time that the ‘Smart Money’ should enter, so we’re told.

This is not new: in April last year, the Blogosphere buy screams were deafening at $47, cautioning their readers against missing the boat to $250 – 500. The Smart Money should get in immediately they said. They’re beginning to say the same thing again, with silver at $29. Now don’t get me wrong: I doubt I could be more bullish on silver at the moment. I have a nice stash bought at $27 which I’m very much looking forward to selling at between $38 – 42. Claims that Screwtapes contributors are ‘perma bears’ couldn’t be further from the truth.

But the silver chart has nothing of the Smart Money about it. Real silver bears would say that actually we’re between the ‘Return to normal’ and ‘Fear’ stages. I personally don’t agree with this (QE, and its effects on commodity prices, the continuing push for a mania in the tiny community that is silver, and the fact that silver is not currently too far from its trend line suggest otherwise). However, at best – I mean, in the most positive possible interpretation – we are somewhere in the Mania phase.

I’ll repeat: this does not mean that silver won’t now rise (possibly quite dramatically) for the next few months. I think it will, and I hope to profit from it. But Smart Money it ain’t.

So where should Smart Money go now?

Imagine I’m a greedy investor (I am). I don’t want a x2 or (very optimistically) a x3 return from what’s left of the silver mania in 2012. I want a x10 or a x20. Like the clever swine who bought silver at $5 back in 2003. So where is the Smart Money going at the moment? First, let us examine the qualities which potential investments should have in order to be considered Smart Money.

1) The vehicle (stock, bond, commodity, whatever) should have been in a lull (i.e. stagnant) for a considerable period of time. Like gold was between 1998 and 2002 (range: around $270 - 350) or silver between 2000 and 2004 (range: $4 – 6).

2) It will thus have been written off by all pundits. The price gets so low that no-one will sell. But new buyers aren’t drawn in because of the perceived opportunity cost of having their money sat stagnant in a non-performing asset. Like silver in 2003.

3) The vehicle is, however, sound. In other words it is not a company facing bankruptcy or a commodity or good that no-one will ever need again. The business is still profitable (perhaps only just) or the country (referring to bonds, here) is still solvent (also perhaps only just). In the case of silver, it was always going to be valued for jewellery and industrial uses and by ‘eccentric’ retail investors, so there would always be some support to prevent the price dipping (much) further or – in the worst case scenario – to zero.

4) There are clear upside events on the horizon, which – once they take hold – will bring in new buyers, and potentially very quickly. Using gold as an example, we could have said that the Smart Money buying at $280 was anticipating currency devaluation, Middle East crises/oil shocks, whatever. The point is that although the Smart Money did not know the timescale, it knew (or hoped) it would happen. These people are now getting seriously paid (and, in some cases, doing the selling...)

So what assets are there currently floating around that look like they fit these criteria?

Enter stage left, the bank stocks

Boo, hiss, shame!, get out of town, you fully paid-up bankster shill...! We always knew you were a JPM hack...! I bet Blythe sticks [insert large object of choice] into your [insert orifice of choice] and you [insert degree of pleasure of choice] it.

Now that’s out of the way, let’s have an objective look at the situation. I’m going to use the example of Lloyds-TSB (LON:LLOY), simply because it’s a UK company so I’m familiar with it and the back story, and have some experience from trading it for a while. But I’ll make my disclosure right here: I’m long Lloyds-TSB (and RBS and a few other banks) and I hope to initiate new positions in the next few months. However, I receive no payment from, or have any kind of professional relationship with, any bank (which is a shame, because it would mean I could stop wasting my time blogging and finally land that foxy Brazilian lingerie model of which I’ve always dreamt).

Lloyds-TSB, like many banks, lost most of its value post-2008. In fact, it went from 591 BPC (British Pence) in 2007 to a low of 21.84 BPC in November 2011. In short, it has been in a period of decline/stagnation for over three years (criterion 1). Its chart sure looks like the Smart Money part of our bubble curve:

The overwhelming popular sentiment is that Lloyds-TSB (and I again stress, I could've picked many other banks here - the use of Lloyds-TSB is merely illustrative) is going nowhere, and that the shares will not recover. However, no-one's selling their shares because, frankly, if you had a position at 590 BPC, you’re unlikely to sell just because the price has shifted from 22 to 24 BPC in daily fluctuations. If you’ve held through all the trauma to date, you’re about as strong a hand as one can imagine (criterion 2).

Lloyds, however, is not bankrupt. Sure, they’re not the money-sucking machine that they once were, and they’ve had a few years of losses, but it looks like 2012 will be the first year since the crash that they declare a profit. Their customer base (on the high-street banking side) is as strong as it ever was, and their efforts to recapitalise have been successful. Their exposure to foreign debt is not great (and has, in any case, been insulated against by their recapitalisations and UK government protections). So, on criterion 3, it’s looking pretty good too.

[An aside: There are always those who will say that the Western banking model is dead, and that the shares will go to zero. Maybe they’re right. But my response to this is that if the UK’s largest banks go bust, then we’ll be so royally [insert expletive] that the best we can hope for is a life of trading acorns and eating our grandmothers and less-favoured children. Good luck buying tinned bacon with your silver in such circumstances: all that awaits a genuine apocalyptic financial meltdown in the US/Europe is death, destruction and chaos. Your PMs will either stay in your possession for approximately a femtosecond or live out their days buried in whatever forest in Montana or Wales you left them. Regardless, the loss of your investment in banking shares will be the least of your problems.]

Now, back to reality, 2012 is likely to see a dividend paid (again, for the first time since 2008) by Lloyds-TSB. And, as mentioned above, its first profit announcement since 2008. Even more important is the fact that the UK government has a 43% stake in the company, at an average of 74 BPC per share acquired during the part-nationalisation. This actually came about not directly because of the 2008 crash, but rather because Lloyds was heavily arm-twisted into bailing out the doomed HBOS during the crash. In any case, the UK government wants its money back. Further, it has to get its money back, as the UK faces decades of austerity if its investments in Lloyds-TSB and RBS don’t pay out. This part should appeal to those who implicate TPTB in every financial machination: the British government has a massive interest in doing whatever it takes to get the share price of Lloyds-TSB at least back up to 74 BPC. Otherwise, ‘good-bye’ ministerial cars and Yes, Prime Minister, and ‘hello’ back bench obscurity. What would you bet on? I rest the case for criterion 4.

Are we at the end of the Smart Money phase for bank stocks?

The night is always darkest before the dawn breaks, goes the old cliché. Continuing with the example of Lloyds-TSB, last year was very dark indeed. The Euro crisis hit it hard, as did the threat of extra regulation and the temporary loss of its chief executive, António Horta-Osório. All of this pushed its share price down to what feels like a bottom of 21.84 BPC. Tellingly, trading in this particular bank stock has since been exceptionally volume-heavy: investors are piling in. It’s risen nearly 50% since then (from 21.83 to 29.97; cf. silver’s move of $32 – $26 – $29 during the same period), and shows no sign of abatement even in the face of potentially very bad news. On Friday, when the news of France’s downgrade was announced, it dipped in line with the rest of the FTSE, and then surged on new buying to finish nearly 3% up on the day.

Why should this be? My theory – and I accept that it is only a theory – is that we are nearing the end of a Smart Money phase in some bank stocks. Those banks that remain profitable and relatively insulated against further risks, and for which most risk has already been priced in, seem to have very little further downside and a hell of a lot of upside. For silver to make a x10 return, it needs to go to $300 an ounce. For Lloyds-TSB to do the same, it needs to go to 220 BPC a share.

It all comes down to which you think is more likely in the next three – five years: $300 silver to achieve six times its best ever price, or Lloyds to claw its way back to one-third of its pre-2008 price. I know there are many who read this site who would say, “that’s easy – silver every time”. Fine. I have silver too, and will be happy with that. But a good investor is a hedged investor, and is also a realistic one. And, for now, I expect TPTB to look after their own interests and restore value to their directors’ shares far more quickly than they will enable silver investors to reap massive rewards.

FULL DISCLOSURE: Long LON:LLOY and LON:RBS and physical silver and physical gold. New positions in each of these are likely to be taken throughout 2012.

The Bear Necessities (of Silver Life) updated

[Updates - some content was removed from this article following a complaint from Mr Dalal. Following further discussion and investigation, this content has been largely restored, save for a few minor edits. However, a note has been added at the end setting out Mr Dalal's principal objections to the article. In addition, some comments have been removed from this thread due to reasonable user privacy concerns.]

[Update 16 Oct 2012 - Further research, not published in order to protect sources, has revealed that 'SGS' was initially a collaborative effort, with Mr Dalal being one element only, albeit one with a financial and ideological stake in the enterprise. The author that we currently know as 'SGS' is not Mr Dalal, but another individual, C**** B********. Interestingly, the self-proclaimed backstory of C**** B******** is almost word-for-word identical to the self-proclaimed backstory of Wynter Benton. The irony of SGS's criticisms of WB are not lost on us.]

Many who learned about the ‘JPM cartel silver manipulation’ story did so through two animated bears, which have so far featured in seven XtraNormal videos made popular through Zero Hedge and YouTube. More perhaps than any other medium, these bears convinced investors in their droves of a conspiracy and, of course, their need to rush out and buy physical silver from the silver dealer advertised in the videos. These bears have made the silvergoldsilver blogspot one of the go-to sites for information about the silver market, and its irascible host holds court daily to dispense his expert trading advice (he claims to have conducted hundreds of thousands of trades, and hints strongly that he is a former professional trader). But what is the real story behind the site, the host, and the talking bears?

SILVERGOLDSILVER.COM

The site www.silvergoldsilver.com was registered on 5 May 2010 to an IP address in Dallas, TX, and was effectively an on-line clearing house for precious metals, promoted by a sister site, a Google Blogspot. The website sold what you would expect, and the Blogspot (first post 8 June 2010) carried a few articles and videos posted from elsewhere, including from the notorious penny stock pumpers, the National Inflation Association (NIA), which were warmly described as ‘friends’ of the Blogspot. Web traffic to the online store, as you can see here, was pretty poor until 3 December 2010, when we see a huge spike. This was the date that Bears 1 was released simultaneously on the Blogspot, Zero Hedge and YouTube.
Interestingly, the Bears video took just a few hours to be picked up by ZH, i.e. ZH had the story ready to run almost the minute it was published. Why was there apparently a pre-arrangement to publish between (the previously entirely unknown) silvergoldsilver Blogspot and the very well-known Zero Hedge? And why was such an arrangement not divulged and explained to the readers of either site? We can note further that ZH was keen to follow up the story, announcing a few days later that silvergoldsilver.com had run out of stock! Now there may be an entirely innocent motivation for this, but it is mysterious that an independent ‘news’ site like ZH was effectively running stories that benefited a private small business, especially given the apparent pre-collaboration on publication.
Bears 2 came out on 24 December, in similar circumstances, and both videos were viral hits. Legions of small investors were thus ‘educated’ about the alleged JPM conspiracy and the need to buy physical silver (ideally from SGS’s online coin shop). They were so successful, in fact, that the shop sold all its wares. The website shut down soon after, never to return (the rights to the domain name have not been renewed). Its Facebook page and Twitter feed also disappeared.

The sister Blogspot posted nothing again until 20 January, when the bears were dragged out again to explain away the post-Christmas silver price correction and soothe the nerves of those who’d run out to buy silver after Bears 1 and 2. Three more Bears videos followed, which still promoted the Blogspot even though the silvergoldsilver.com online store had already closed down. This raises two questions: first, why, if selling metal was so successful, did the store shut down? Second, why did the Blogspot keep releasing bears videos once their ostensible original purpose (advertising) no longer applied? Were the original producer(s) of the video and the original SGS franchise entirely on the same page at this point? Did SGS even make the bears videos? We might also note that although the Blogspot was clumsily designed and (during that time) only sporadically posted to, with no original content from the host, the Bears videos were smart, funny and compelling – they had been well put together to go viral.

From 30 January, for the first time, a series of posts began which remains unbroken to date. The site host now started to comment actively on what he posted, and to engage with commentators, and sought to add his own research and opinions to the site, which naturally jibed with the spirit of the Bears videos. This is, you will note, remarkably different to what came before. The site also received a makeover to give it a more ‘professional’ look. What did not change for some time, however, was a persistence in posting information sourced from the NIA (such as this example). This stopped only recently, in May, when the site host was called out on it by a commenter: the original post was rapidly updated and the site host claimed to have only been publishing the information for ‘short term’ trades. He then removed many of his own NIA-related posts from the archive. That’s quite a sudden reversal in position by anyone’s standards, considering that a six-month-long apparent endorsement of their activities was turned around in just three days.

It is, however, a rather typical action of the site, as it frequently removes posts that are later debunked (as was the case in June, when the nonsensical EU Times story was presented as fact on the SGS Blogspot: it vanished soon after), presumably to give the impression that SGS is ‘never wrong’. He also frequently removes the posts of commenters who challenge what is written on the site, no matter how politely or intelligently. This, of course, is his right as the owner of the blog. However, when this happens, this gives us the equal right to consider his motivations for doing so.


WHO IS SGS?

The ‘original’ SGS appears to be Albert Dalal from London, Ontario, who registered the online shop’s website. In addition to the formal web registration, he claims it as his own website (i.e. not that of, say, a client) on his publically available Linked In page. It is also registered to a residential address in London, ON. Anecdotally, I am told that much PM-related material has disappeared from Dalal's Facebook and Twitter accounts since the closure of silvergoldsilver.com, but he tweeted an article about silver coins from his Twitter account earlier this year and an article about US debt a few days ago. Mr Dalal has no professional trading qualifications, nor has he ever worked in this field as far as I can establish. Between leaving university in 1997 and the setting up of the SGS online shop in May 2010, he passed his time working in media companies in London Ontario.

Viz., Mr Dalal is the founder of Think Media (a London, ON, web marketing company), Penta Brand Media (another London, ON, media company, which never traded) and Kilshe.com, a shell site for a supposed oil and gas broker. He also attempted to set up a media business with five other associates, called Media All Stars, and had a stint selling lip gloss online for an associate’s small business.

Silvergoldsilver.com is registered to a residential address in London, ON, and Kilshe is registered to Think Media. Think Media itself is registered anonymously, but to a different residential address in London, ON. The telephone number for all three businesses is the same, but there is no office or other recognisable business premises. I have not found any Canadian company numbers registered for their names, no online endorsements from clients, and no record of any tax details or official accounts as required under Canadian law. For Think Media, there are claims to have run projects for BMW and Blackberry, but no details whatsoever are provided, and the site in general is remarkably sketchy on detail, considering it is presumably there to drum up customers. I have found no endorsements of Think Media’s work elsewhere on the web, nor have I found any reference to any business using its services. Penta Brand Media doesn’t even have a website (strange for a media company); however, a former employee and current associate of Dalal reveals that, ‘Due to some unfortunate events, Penta BM had to close their doors, and I was soon back in the freelance game again.’ Likewise, Media All Stars never seemed to get off the ground.

For Kilshe, the site is even more skeletal, and again there is no reference to its activities elsewhere on the web – clearly it doesn’t get much business either. That said, there are a couple of references to an Albert Dalal on several petroleum products B2B sites (here, here and here). These were all posted on 2 November 2009, and pre-date the creation of the Kilshe website in 2010, but do not appear to have been followed up since then. So it appears that Mr Dalal at least tried to put a toe in the waters of the oil brokerage business for at least a day, before thinking better of it and moving on to create silvergoldsilver.com.

It is interesting to compare the writing style and investment interests of the SGS Blogspot host with one CEESOLUTIONS, a long time poster on the Stockhouse website. Again, we cannot say for sure that both are the same individual, but it is noteworthy that when CEESOLUTIONS was recently challenged about his identity, after he had promoted the SGS website on Stockhouse on 26 April, he replied on 27 April ‘You got me. I’m SGS, roflmao’ (compare that phrase with this; note, however, that SGS denied the link on his own blog, after being challenged by a commentator on the issue). CEESOLUTIONS has also developed a deep interest in Tinka Resources of late, which is a stock that has been mercilessly promoted by SGS on his blog since 27 February. Nothing wrong, of course, in people using several aliases on the web, if that is what has happened, but using several identities to mutually reinforce their views, and give the impression that the support base for a particular proposition is larger than it otherwise would be, is more problematic. Not least when the subject in question is a piece of heavily pushed (albeit free and disclaimered) investment advice about a penny stock such as Tinka resources.

And just a few days ago, Bears 7 was released. More perhaps than even the first six, this video shows clear signs of not having been produced by SGS. Surprisingly, there’s been no mention of it in the last two weeks, which we might expect if he’d been working on it alone. Then, when it was first published to the site, apparently he forgot to change it from ‘private’ (“Video not working. Says it’s marked as Private”) which suggests he didn’t work on it alone. There are many references to ‘we’ (I thought SGS was a one-man band?) and to his ‘fellow bloggers’, including some from China (!) We see clearly, once again, the producers of the Bear videos are not on the same presentational page as the SGS blog host. Curious.


KEY QUESTIONS

In short, I am posing the following questions:


(a) What was the relationship between ZH and ‘SGS/Dalal’? Why did an established ‘news’ site choose to unashamedly push a private small business in London, ON? Did anyone working with ZH benefit personally from this arrangement?

(b) Who really produces the Bears videos? It is obvious to anyone who sees them that it is not SGS. For whose agenda are they produced to serve? Are they made by the NIA? Or ZH? Or someone else?

(c) Why does SGS present himself as a former Wall Street trader, when his history is in fact that of a small-time local businessman with a string of failed media companies behind him?

(d) Why does SGS/CEESOLUTIONS choose to so aggressively push Tinka Resources? Given SGS’ lack of formal trading credentials and his apparently close relationship with the known penny-stock pushers, the NIA, what should we make of this?



I wish to stress that I am not alleging or implying any wrongdoing in law by either the host of the SGS blog or Mr XXXXX (whether or not they are the same person). We would welcome a right to reply from SGS/Dalal and/or Zero Hedge. Similarly, if anyone has any further information of interest on the issues raised here, please do contact me. All confidences will be respected.

This is the first article in a series. This previous article sets out our motivations for examining these issues.
JdA


ADDENDUM: After the publication of this article, the SGS blog host claimed that Mr Dalal was merely the programmer behind the original website. Mr Dalal, posting as Frozen Tundra, strenuously denies being Mr Silvergoldsilver, and wishes for this to be placed on record. He claims that he simply received a stake in the project at the beginning in return for designing the website. He also says that he has no affiliation with the SGS blogspot.

Neither correspondent was willing to provide material proof of this, however.

Further, the 'programmer' explanation does not adequately address why the website was in Mr Dalal's name, why he benefited financially from a stake in the online coin shop (which neither 'SGS' nor Dalal deny), why he claimed it as his own website (i.e. not SGS's) on his Linked In profile, or why it was registered at a residential address that does not match the business address of Think Media (the company supposedly behind the website). More circumstantially, one could also question why Frozen Tundra (Dalal) has promoted the SGS blog (recalling that his stake was in the online shop, now closed) and apparently has almost identical online interests and opinions (not to mention writing style).