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Silver $600/oz soon but don't sell as new ratio with Gold attained in future predict Web bots

are you part of that 1% ?


Watch the Gold / Silver Ratio

by James Turk
[Image: James_Turk.jpg]

" – In precious metal bull markets, silver outperforms. Its price climbs at a faster rate than gold’s price. The reverse happens in bear markets. Silver’s price drops at a faster rate than gold’s price. The following chart of the gold/silver ratio illustrates this phenomenon.

[Image: 20110214ELS100.jpg]

At the peak of the last precious metal bull market in January 1980, it took 17.4 ounces of silver to buy one ounce of gold. Thereafter, the ratio turned and started climbing higher. By February 1991, 101.8 ounces of silver were needed to exchange for one ounce of gold. Silver was trading at only $3.50 per ounce, down 93% from its previous bull market peak.

Silver back then was “dirt cheap”, but it would not get any cheaper. Silver turned the corner as value oriented buyers recognized a bargain. Since then the price of silver has been generally rising, and has been doing so faster than the spectacular rise in the price of gold. The result is a long-term downtrend in gold/silver ratio. In other words, since 1991, silver has outperformed gold.

Last week, the ratio touched 45.0 and ended Friday at 45.3. It was the lowest daily and weekly close for the ratio since February 1998, which is a significant date. That is the month Warren Buffett announced that he had acquired 130 million ounces of silver. His footprint is visible on the above chart.

We know from his disclosures that he began buying silver around $4 in July 1997. The ratio then was in the mid-70s. But note what happened to the ratio as Buffett accumulated his hoard over the next several months, culminating with the announcement of his purchase. The gold/silver ratio fell by nearly 50%, so that only 41.3 ounces of silver were needed to buy one ounce of gold. Silver was clearly outperforming gold, just like it has been doing over the last several months – as shown in the above chart by the remarkable drop in the ratio.

The ratio has now reached an important point. It is breaking through support, which is illustrated by the lower red line on the above chart.

Several previous attempts to break through support have failed, with the result that for many years the ratio has continued marking time within a trading range bounded by the parallel red lines. That trading range now looks mature and ‘ripe for picking’.

One never knows of course how the markets will unfold in the future. But I expect that the ratio will finally break through support, which is an event that I have been looking and waiting for patiently over many years.

If I am right and the ratio knifes through the low 40s and below the Buffett point, there is no clear short-term target. Given the momentum evident in the above chart and the bullish fundamental factors impacting silver at present – like its unprecedented backwardation – a drop to at least the low 30s seems highly likely, but I don’t rule out the possibility of the ratio falling even lower.

My long-term target for the ratio is 17. It is approximately the average level at which the two precious metals were exchanged for hundreds of years prior to the arrival of fiat currencies in 1971. It has been my view that a 17-to-1 ratio is attainable by 2013-2015, but given what seems to be shaping up, we probably won’t need to wait that long.

The unprecedented backwardation in silver has one clear signal. The potential for a massive short squeeze is building. If one occurs – as I believe is becoming increasingly likely – there is no telling how quickly a 17-to-1 ratio could be achieved.

"James Turk"


BTW...instead of Chocolate bars how about offering her Silver bars? ;)

[Image: 10-1-oz-stagecoach-silver-bars-nwt-mint-...-ffe9a.jpg]
I think that many people though like me can not afford to buy silver therefore there are other options, since people will have to be able to buy things might as well start stocking up on shampoos, soaps, and toothpaste, as well as T.paper which will be good for trading if needed.


..on second thought

[Image: 3279444300_544f2c8f86.jpg]

...better buy the Chocolate.
I watch the charts all the time...this web bot prediction will inevitably become a reality! When it will concur is the saying goes "failing to prepare is preparing to fail"


Wednesday, February 16, 2011

" At the risk of sounding crazy. At the risk of ruining whatever minimal "reputation" I may have. Most importantly, at the risk of losing money, I have to say this: I think we have Blythe on the run. Big time. My rationale for this is going to be difficult to summarize in writing but here goes. Bear with me...

Today, 2/16/11, was an extraordinary day of FUTFs and FUBMs in the silver pit on the Comex and I'll explain that shortly but it all needs to be placed into context.

If someone wants to purchase physical silver through the Comex, they must first buy a future or option contract for a "delivery" month. The current delivery contract is the March11. Before the close of trading on 2/28, any holders of March contracts must sell their positions or be forced to take delivery. Those unwilling to take delivery typically "roll" their position into the next month, which is May. If an investor does intend to take delivery, that person must, by the close on the 28th, show in their account enough money to pay for their acquisition. A single contract is for 5,000 ounces so, at $30/oz, you must show available funds of $150,000. For 10 contracts, you must have $1.5MM. This is kind of a "put up or shut up" thing. It keeps goofballs from claiming they want delivery when they really can't afford it. On the 28th, you've got to have the dough in your account to "prove" to TPTB that your are serious. Every delivery month, the EE/Comex plays this game and, every month, enough longs simply roll instead of standing for delivery so that the Comex has yet to default on their obligations to deliver the physical silver.

Now, here's the problem...Monday was 2/14. Only 10 trading days to go until the critical 28th. Heading into Monday's trade, there were still 62,692 open contracts for March. This had to really get the attention of the EE and they, without question, went into Monday with a plan to attack silver and scare as many March longs as possible into rolling to May or later. Unfortunately for Blythe, silver began to rally in the wee hours of Monday morning and broke $30 while she was still sleeping. It closed that day above $30.50. But that wasn't the true disaster for the EE. The real shock was when they got the new OI numbers Monday night and found that the March OI had only fallen to 61,720. Panic surely began to set in. Then yesterday, silver traded even higher, briefly touching $30.90. Earlier today, we got the OI numbers basis yesterday and it was an eye-opener. As of last night, there are still 59,851 open March contracts. And first notice day is now only eight days away!!! Blythe had this information before the general public so she knew, going into today, that she had to attack again and she did.
Here's your chart:
[Image: 2-16pmsilv.jpg]
Obviously, it didn't work and that's the problem.

Recall for a moment how the EE caps price. They do so by flooding the Comex with an almost endless amount of unbacked, paper silver. Think about that trade, though. To sell short, you need a buyer on the other side of the trade. And now, at this late hour, how can you reduce the open interest in the March contract if you're only selling new paper shorts to resolute longs who intend to stand for delivery in eight days? By raiding and selling, you're only compounding your problem because you are creating more open interest! If you're Blythe, you're left with only being able to freely sell the forward contracts in an attempt to influence the spot and nearby price. Does this explain the current backwardation? Probably.

To the point, however, what's a girl to do? You can see by looking at the chart above that Blythe tried to raid today but she didn't seem to do it with the usual bluster and gusto. How could she? Every new March contract she sells only adds to her problem. She is truly caught in a catch-22. Again, what's a girl to do?

If the March longs stay resolute, she's screwed. Even if only 20,000 stand for delivery, thats 100,000,000 ounces that the Comex has to deliver. By most estimates, that's their entire inventory. She and The Evil Empire must, somehow, convince/force March contract holders to close their positions but if they can't scare them by crushing price, how do they do it? They could get the CME to raise margin requirements but if you're ready to stand for delivery by putting up 100% of the cost in eight days, a margin increase today is of zero consequence.

So what's left? She can't scare people out through raids and she can't finance people out through margin hikes. She's fucked. She/They will be forced to settle again in cash + premium, just as many suspected they had back in December. However, back then it was just a couple thousand contracts. Now it could be 20,000. *****, it could be 40,000! And the problem is, word is out. What do you think will happen in May?!? Will 80,000 stand for delivery? 100,000?

So the point is this: Ding dong, The Wicked Witch is hurting. Bad. All the years of Evil Empire domination/manipulation of the PMs appear to be coming to a rapid and spectacular end. Watch the Open Interest numbers very closely. They are your tell.
Buy all dips until and unless the OI situation significantly changes.

Now truly appears to be the moment we've been waiting for. TF "
great read connectingdots... the same is going on in gold contracts. Also, there was a huge buyer of options recently. I sent this around to a few early this month:

Gold/Silver prices have been rather flat after having taken a worthy correction over the last month. BUT there has been very strange/secretive buying of Gold call options. This is a huge buyer who is snapping up $1800 calls. If you don't know, assuming you do, this means that a large organization believes that the price will exceed $1800 over the next months. These options are not cheap and a ton are being bought.

1. This is a rather complicated and sneaky way of getting in on the gold market rather than just buying and showing the holdings in their public portfolio.
2. If gold prices go that high that fast, regardless of what they do next, this will surely cause COMEX(the provider of the paper gold) to get REALLY crazy and probably fail(as they are essentially short gold because they sold the paper contract).
3. the ripple effect through JPM, and other big banks/funds that are short, would be insane. Full on Collapse.
4. rumors of QE3 are a foot. this would only further drive down the dollar which in turn drives up the price of precious metals. just more of a reason why gold prices would go so high so quick.

SO, considering all of that. I remembered this segment of the latest web bot report
Page six, second half of third paragraph:
"...the largest accretions of supporting sub sets for the [precious metals] sub sets go to the [unleashing (of hidden secrets)], and [exposure (of treasure hiding)]..."

That's EXACTLY how the market/financial news would react if/when those options are exercised. Could it be the Vatican that is the secret buyer? Don't know, but that would make it a two-fer webbot hit.

Here's a link to an article on zerohedge about the gold calls buying:


Fake Cops Pull Huge Silver Bullion Heist
Feb. 17th British Colombia, Canada

This is why I don't keep silver at home and also make a point of not telling anyone where it's at....I also recommend splitting up your hiding places but if you've already told folks about your investment then make sure you have a Decoy safe easily found in your home, you'll want to have some silver and paper money in the safe to let them think they just found the mother load, when in fact your real stash is hidden inside the spare tire kicking around the garage kinda thing.

load up now cause these prices will never be sen again!..wanna bet you 2 who voted to not buy silver bullion but rather stick with a deflating USD instead.


silver gains,daily gain,monthly gain,52 week gain,YTD gains and more

GOOD NEWS..anyone who bought 52 weeks ago is UP 104.49% !
tip: run cursor over USD/silver meter to magnify image and click on interactif charts also.


financial propaganda

(02-14-2011 05:09 PM)ohoh7 Wrote: [ -> ]I think that many people though like me can not afford to buy silver therefore there are other options, since people will have to be able to buy things might as well start stocking up on shampoos, soaps, and toothpaste, as well as T.paper which will be good for trading if needed.

Yes, I would suggest starting with water and food supply first. Those are your number one needs if SHTF. Next, I'd suggest a means of self-protection, perhaps a firearm and a decent amount of ammo. This is to protect your family and to hunt for animals if you run out of food during a SHTF disaster. After, I would suggest go for the silver, as your have done, starting off with purchasing a couple of coins. This is also another reason to purchase a firearm, to protect your finances too. However, I have a caveat to all of this. It may be wise to purchase a little bit of silver as soon as you can while you are still working on the essentials, just for a tad bit of investment being as silver is expected to explode shortly. Keep an eye out for coupons and drug store sales in order to stock up on free TP, toothpaste, soaps. I agree with you on the TP, it could be a huge barter item.
(02-17-2011 06:14 PM)connectingdots1 Wrote: [ -> ]Fake Cops Pull Huge Silver Bullion Heist
Feb. 17th British Colombia, Canada

This is why I don't keep silver at home and also make a point of not telling anyone where it's at....I also recommend splitting up your hiding places but if you've already told folks about your investment then make sure you have a Decoy safe easily found in your home, you'll want to have some silver and paper money in the safe to let them think they just found the mother load, when in fact your real stash is hidden inside the spare tire kicking around the garage kinda thing.

load up now cause these prices will never be sen again!..wanna bet you 2 who voted to not buy silver bullion but rather stick with a deflating USD instead.

I was one of the two who said that I wasn't going to buy bullion, because I wanted to buy silver coins, like eagles and maples instead of blocks of bullion. As a novice, I don't know if there is much of a difference. Would you be able to explain the difference, especially in regard to which is better and in which circumstance? Thanks a ton in advance.
its all bullion. as far as I see it, you are buying the intrinsic value so silver is silver. the legal issues of gov minted currency can be used against you or to your advantage as connectingdots explained in another post.


The Mechanics Driving The Silver Surge

Quote:The spot price of silver has shot up almost 27% since January 28, 2011. Earlier in January the price of silver (gold too) was in the midst of a powerful correction that had the silver bulls on the run, lending ammunition to the numerous precious metal bubble-believers. The events of the past few months, however, point to an ongoing shortage of available metal in its physical form.

It is important to understand the dynamics of the silver futures market itself. Every single futures contract represents the ability to purchase or sell 5,000 ounces of silver at some specified date. While there are contracts expiring every month, actual delivery months are specified in advance. September 2010, December 2010, and March 2011 are all delivery months.

Silver futures also protect physical sellers by requiring contract buyers to deposit enough funds in their account to cover the entire contract purchase on “notice days” – specific days just before the delivery month. For example, the notice day for the March 2011 contract is February 28, 2011. Regardless of how many contracts are outstanding (open interest) on the notice dates, only those that have deposited funds can take physical delivery. The non-deposit contracts either settle for cash or roll over into the next delivery month.

The notice date for the September 2010 contract was August 30. On that day there were 21,466 contracts outstanding that were “in the money” (contracts that may take physical delivery). That represented a potential withdrawal of 107 million ounces of silver. In early September, the total COMEX inventory was about 111 million ounces.

That sounds like a potential problem, but only a small percentage of the 21,466 contracts put up funds for delivery. In fact, only 3,002 did. And of those 3,002 contracts, 483 still settled for cash, leaving only 2,519 for actual deliveries (about 12.5 million ounces).

Moving forward to the December 2010 contract, there were 17,208 eligible for delivery as of the first notice date. Of those, 5,428 deposited funds for delivery, a massive 80% increase from September. Not coincidentally, the price of silver jumped to $30 per ounce in November. What was really interesting about the December delivery was the fact that 3,583 of the 5,428 contracts ended up settling for cash (leaving only 1,845 to take delivery, a little more than half the September number). Why would these contract holders, all of which deposited enough cash to take the physical metal, change their minds?

The prevailing theory is simply that these contract holders never intended to take delivery, they only wanted the exchange to think that they would. If the actual supply of silver was something far less than the stated 110+ million ounces, the silver suppliers would have to pay a premium well above contract prices to “convince” contract buyers to settle for cash. In other words, this is a bit of legal financial extortion.

The silver sellers, especially silver producers, should respond to this shortage by selling forward their production. In order to do this, producers would lease silver for a small fee to deliver today, locking in the higher spot price. When the silver actually comes out of the ground they can replace the silver they have leased and already sold. In this situation, the future price of silver becomes backwards, and declines further down the curve. This is extremely rare for precious metals futures; future prices should be at a premium to near-term prices.

In fact, this is exactly the current situation. The futures curve is now solidly in backwardation – with the front month (March 2011) price $33.675 declining all the way down to $31.837 for the December 2015 contract. At the same time silver lease rates jumped dramatically in mid-January 2011, with another jump in mid-February.

So how does all this affect the spot price of silver?

Essentially, if there really is a shortage of the physical metal, then the spot price has to rise to entice/force holders of the actual metal to release it to the market. If the shortage is acute, then there is not enough metal available for leasing to alleviate this imbalance. And more importantly for the current price, as the extortion/speculation process grows unchecked then the spot price has to rise even higher to convince holders to release more physical silver.

For the March 2011 contract, only four days away from the current notice date, there are still 50,000 contracts open. In the past week only 10,000 contracts have rolled off, meaning the potential for contract depositors taking physical delivery is much higher than either September or December. The normal roll into the May 2011 contracts (the next delivery month) has stalled out in the past couple of days.

It is no wonder that the COMEX increased margin requirements again by 50% on February 18. While the exchange certainly has an interest in maintaining transactional integrity it is curious that these margin increases only come in the weeks ahead of delivery months, when open interest is still high. For many investors, this is simply more evidence of a supply shortage, that the exchange itself is trying to shake off the weaker players and whittle down the number of open contracts.

It worked in November, and the price of silver saw a short, sharp decline before resuming its upward trend. The February margin change, however, does not seem to have had any effect.

There is no direct evidence of a shortage of available metal, only the data we have pieced together above. In my opinion, it is highly suggestive of a physical imbalance. And it should be pointed out that not all of this is due to speculation alone. Perhaps the latest margin increase had little effect because the contract buyers are not speculators, but are dealers or mints that have run out of the actual metal. We know for a fact that Royal Canadian Mint is out of metal, and the US and Austrian mints have seen record sales in January.

In terms of price action, the imbalance seems to be attracting enough attention that it will grow at each delivery month. If enough contract buyers deposit money for delivery at each notice date, then it stands to reason that in a shortage predicament they might have a lot of leverage over a potential cash settlement price. And if they are successful in gaining large premiums on top of very favorable price action, they will continue to do it and bring more and more friends.

Read more:

COMEX Massive silver shortages & collapse of EURO and USD in 2011

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