Tuesday, April 16, 2013

Gold and Silver Plunge Off the Chart

A few weeks ago, I got re-interested in some old coin collections that we had sitting around from, well a really long time ago.  Many of the old coins were silver.  Can you imagine; up until 1964, United Stated dimes, quarters and half dollars in were all made of 90% silver?  In 1965, the silver coins were replaced with "clad" coinage, a copper core with nickel alloy covering to make them look silver.  This saved the government a lot of money, as the coins were much cheaper to make.  Of course, we are beginning to face the same problems again, as the zinc in pennies and the nickel in nickels, has inflated to the point where the zinc in the pennies and the nickel in the nickels costs more than the coins nominal value.  Instead of taking the obvious step and knocking a decimal off the US dollar and eliminating the coins, the government made it illegal to melt down pennies and nickels for their metal content.  It doesn't strike me as a high profit business model, anyway.

Anyway, this got us back to thinking about the value of silver, and we started tracking the price of silver, and even buying a few of the new "bullion" style coins that are currently being sold as investments in silver.

Friday and Monday, the bottom dropped out of the silver and gold market. Silver, which had drifted down from $32 an ounce at Christmas time to around $28 and ounce by last week, dropped suddenly from 28is to 22ish.  Gold took an even greater beating, dropping from $1550ish and ounce to $1400ish.

Curiously, this occurred on a day when the stock market also took a significant hit; most often, metals and stocks tend to jump counter cyclically; when stock fall, people tend to seek solace in the precious metals. 

A number of excuses have been proposed, one being that a large amount of gold is being readied to dump on the market as a result of Cyprus' economic problems and newly revealed weakness in China's economy.

There are a number of weird features to the market.  The losses are being driven by gold and silver paper, demand for gold and silver bullion and coins remains high.

A blogger at Theo Spark's, Rico, has been selling stories of manipulation of the metals markets for weeks now; I'm tempted to start giving them some currency. Today's commentary...

Perspectiv​e on the "Barbarous Relic".........................from Rico
Keynesian knuckleheads and their apologists and shills are out in full "hue and cry" trying to convince the sheeple that Gold is dead and a worthless "barbarous relic" as they imply nonredeemable paper fiat (credit) is really wealth (hoping everyone ignores the fact that access to credt is merely access to debt).

Of course, tis makes perfect sense IF your country and/or central bank are insolvent [read: broke].
Thus, Western governments and their central banks have sanctioned naked paper selling by their proxies (bullion banks) to drive the paper bullion prices down

- What we have just seen has absolutely nothing to do with the physical market. With naked shorts NO physical metal is actually sold. [translation: the Fed et al OK's the use of naked shorts in the paper market to offset the price-effect of rising demand for physical bullion and the concurrent devaluation of its fiat currency.]

- Monday's paper Gold volume was ~91% of global annual physical production (64.4 million oz vs 70 million oz ex-China and ex-Russia.

- Monday's paper Silver volume was 1,035 billion oz. vs global annual physical production of 700 million oz. ex-China ex-Russia. [For the financial media and FTV that's 145% of the annual amount...in one day.]

[This is just a guess, but it may well be that ALL the real physical Silver inventoried in SLV has been depleted in London. If true, then the sole remaining physical Silver would be at the COMEX. How's THAT for a comforting thought?]

Attached are two charts showng Gold from a 30,000-foot perspective. A very long view. One from 1792 to now, the other from 1257 to now.

Whichever one you look at indicates a pretty good run, and clearly a trend. Not too shabby for a "barbarous relic" (show me a chart of ANY paper fiat currency spanning either of these periods, go ahead, I challenge you; even that economic ignoranus Krugman with his casual relationship to the facts cannot do that!).<

The last item is a tally of the world official Gold stores. If Gold is worthless, just WHY do they have it in their vaults? - Maybe they need to listen to the House of Blankfein (Goldman Sachs aka the Vampire Squid) and sell-sell-sell before Gold goes to ZERO...or even goes negative? Hahahahahhahaahhaaaa.........
I'm still thinking time to buy...

1 comment:

  1. over the last six years the only investment that has made me money is gold. Trading 24k gold in Thailand is a big deal and easy.

    your blog reminded me of the Hunt brothers

    OK, question of the day - was this North Korean stuff factor in the price of gold?