I was sent this link yesterday by A.N. Other with the message "what do you think?” Well, the answer is that I think it's just another waste of bandwidth talking about a trade that somebody uses as evidence for an 'it's not fair' pet theory. Part of the report had this chart...
...which supposedly shows the so-called "commitment of traders" in the silver market (aka "COT silver") and how there was a recent spike in shorting the metal that comes from two major banks, and how that short position coincided with silver's drop from $18 or so to $13 or so.
Yes it does coincide, but the same kind of COT silver open interest chart, when looked at from a longer time span, shows that there isn't really much you can read into a short-term position. I've scribbled on this chart underneath.......
...that shows COT silver in relation to the price of silver since 2005. We can see that:
- 60% short position in COT is not that unusual
- In 2005, short interest dropped hard, but it didn't affect the price of silver in the slightest
- For a long time through 2006, 2007 and 2008, short interest moved in conjunction with the price of silver. That means that when there were more shorts on board, the price of silver ignored the commercial traders and just moved on up (and vice versa).
You can't have your cake and eat it, I'm afraid. The worst chart-watchers in the world and the ones that give the discipline its bad name (which is largely deserved, by the way, though there are some shining exceptions) are the ones that decide what they want to read into a chart before looking at it, and use the chart to confirm their own prejudices.
This is not some massive plot. This is people speculating, winning and losing. It's normal market stuff. One thing to note is when the "big players" bet on something to go up and it does, people rush to say "oh how clever, oh how wise". But if they bet on something to go down and it does, they're called manipulators, frauds, inside traders and every name under the sun.
This is especially true in the gold and silver markets, which are populated by tinfoil hat permabull gold and silver bugs that just can't understand why gold isn't already at five zillion dollars an ounce. These people WANT the
I own gold and silver bullion, but I don't delude myself. They are there to anchor my portfolio solidly, not to be the cutting edge of my alpha gains. Capital preservation is still the order of the day in this market.
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This article has 47 comments:
- Alan von Altendorf
- 258 Comments
My Website
Aug 27 07:47 AM- Carlll
- 7 Comments
Aug 27 08:17 AM- dieuwer
- 196 Comments
Aug 27 08:24 AM- surfer843
- 4 Comments
Aug 27 08:53 AM- gigem77
- 99 Comments
Aug 27 09:42 AM- mark mchugh
- 144 Comments
Aug 27 10:57 AMYou've completely misunderstood everything about precious metals, who buys them, and why. Metals should reflect the state of fiscal discipline (or lack thereof) of governments, their currencies, and central banks. Gold and silver are barometers to tell idiots that they're in trouble. Suppressing those prices is giving license for the Fed to engage in moral hazard and passing it off as "innovative policy". Every passing day this continues, our grandchildren are that much closer to becoming slaves.
Way to completely miss the point.
- Engineer
- 36 Comments
Aug 27 10:58 AMI find it telling that during this event, the buying in the bullion ETFs has skyrocketed. You know, it is possible to have short and long postions at the same time, through separate entities.
- http://www.rapidtrends.com/blog/
- 40 Comments
My Website
Aug 27 11:21 AMGoogle is your friend!
www.rapidtrends.com/bl.../
- MC dk
- 8 Comments
Aug 27 11:45 AMOtto
sell me your PM's
I will give you top....paper
? How can x banks SELL mega amounts of Paper silver, at the very same time, the US mint has massive shortages....
What a con game....
WHY is it allowed to sell a commodity they don't have in bulk, and then of course it drops, since every trader is geared x 10 - 25 + +
Except for those that just BUY in paper CASH 1:1
We still have it since 4-5-600$
SOON even the Arabs will smell a rat that they sold
½ OF ALL THE OIL FOR DOLLARS THAT ARE S..T WORTH TODAY.
conGRATULATIONS...YOU ARE NOW king OF...fANNIE MAE.....HAHA
$$€€€€£££££ = SCAM OF THE MILLINIMUN...GRRR...CE...
- jt
- 87 Comments
Aug 27 12:16 PMSheesh, Otto, I've read a few of your articles on mining companies and country risks, etc. Not bad my boy. You should stick to something you know something about. Your article reminds me of Archie Bunker in his LaZBoy chair pontificating on all known world topics who upon seeing some Arabic woman completely covered up walking outside in the hot Middle Eastern sun has a moment of revelation and yells to Edith that he now knows why erl [that's oil, of course ;)] prices are so high, and Edith in her screeching voice asks why is that, Archie, and he reveals that it's b/c they have to keep their A/C so high it must use up 80-90% of all the erl on the planet, along with almost all the camel patties found in that there neighborhood, or whatever else it is dem Arabs use.
How in the world are you missing the elephant in the living room, Otto?? You've been stepping in it's patties for years now. Forget the word "conspiracy"... been successfully demonized by TPTB thru the MSM. Go read Ted Butler's recent article (end of last week-- news.goldseek.com/TedB...) called "The Smoking Gun." Go look at those numbers, then go read up on what the CFTC is supposed to be there to prevent. Then come back and give us a report on the article and the data...that is if your ego isn't too big to admit that the there-ain't-no-silver-... society needs to grab their seeing-eye dogs, go home and rethink this thing. jt
- jt
- 87 Comments
Aug 27 12:21 PMThe link...paste it together if necessary...is
news.goldseek.com/
TedButler/1219417552.p...
And the last line should read "there-ain't-no-s... society" (or "there ain't no silver conspiracy society" if the compiler doesn't like all those hyphens perhaps?)
- Yaowarat
- 6 Comments
Aug 27 12:29 PMLOL
- old fogey
- 15 Comments
Aug 27 12:29 PM- ottorock111
- 18 Comments
Aug 27 12:40 PM- jt
- 87 Comments
Aug 27 01:09 PM(But DO read Ted Butler's article...unless you, too, just like to reject anything called a "conspiracy" out of hand...in which case enjoy life in LaLaLand, but remember...LaLaLands and their inhabitants tend to suffer frightful ends when the "conspiracies&quo... out of "nowhere" turn out to be realities.)
- Erazmus
- 1 Comment
Aug 27 01:19 PMFortunately, as the comments show, there are freethinking individuals out there who can see through gimmickry verbal ploys that cause uninformed citizenry to recoil when they should investigate. If your argument is sound and you can prove your point, then there is no need to even mention a “conspiracy.” Your homework should speak for itself. Unfortunately when you play the verbiage game, and more informed peers review your work, they will call you out on your position. It paints you into a corner.
I just hope the populace will eventually wakeup and stop being toyed with via trigger words or conditioned responses. The sooner society becomes informed and thought provoked, the sooner we can start evaluating claims on their own merit and stop being led by catch phrases, slogans, and sound bites.
Conspiracies do exist, sir. This is why the word is defined in the dictionary as, “an evil, unlawful, treacherous, or surreptitious plan formulated in secret by two or more persons; plot.” There are formal legal charges for conspiracy in law. These charges are made in court all the time. But, just like ALL claims, they are not always true.
So in the future, let your words speak for themselves, don’t hide behind them.
- mark mchugh
- 144 Comments
Aug 27 01:20 PMA: Because our bullion dealers don't have any silver.
- User 30121
- 275 Comments
Aug 27 01:29 PMPosters: You guys are GOLD! (and SILVER, too)!
- Lester
- 14 Comments
Aug 27 01:41 PMA desperate and devious prez has made it illegal before, what's to keep him from doing it again?
Those shadowy spooks, who pulled off 911 have achieved the ultimate goal of putting all of us under the yoke of the patriot act, can and would confiscate it again. Those forces are not accountable to anybody's Law, only to their own aims.
We can't make use of PMs in the concentration camp.
Houston, we have a problem!
- theoakman
- 43 Comments
Aug 27 01:41 PM- chris daniels
- 1 Comment
Aug 27 01:46 PMAgain people if you truly BELIEVE in silver (like I do) it doesnt matter what otto, or butler or anybody thinks. You have the power. Let's just keep on buying right up till the market cracks wide open.
Then we will be some smilin' muther F$$$er's!!
- ottorock111
- 18 Comments
Aug 27 01:57 PM* 60% short position in COT is not that unusual
* In 2005, short interest dropped hard, but it didn't affect the price of silver in the slightest
* For a long time through 2006, 2007 and 2008, short interest moved in conjunction with the price of silver. That means that when there were more shorts on board, the price of silver ignored the commercial traders and just moved on up (and vice versa).
...or will you just keep your collective heads in the sand about COT silver and its proven lack of influence on the metal?
Those that know me (not pretend they can guess about me) know that i'm happy to admit that I'm wrong about any issue. It's one of the things that makes me a successful investor. However, all i've seen so far from these comments are a bunch of peope who feel hurt that someone dared point out the obvious, and either
1) rely on words from their mentors (who, by the way, called silver and gold dead wrong when it dropped and then scambled to cover their tracks with conspiracy theories. All except, perhaps, Ron Rosen)
2) use personal insults to hide their impotence in the face of facts.
- breethedeep
- 2 Comments
Aug 27 02:03 PM- CanadiansilverBug
- 1 Comment
My Website
Aug 27 02:06 PM1. Are the identities of, and possition size of the 8 largest silver traders kept secret?
2. How are you allowed to trade many times more contracts than there is silver to back them?
3. how can there be naked shorts allowed in the ETF?
4. how can the price of silver being going down, signifying weak demand, yet I cannot buy any from my bullion dealer? And the spot price is 5/oz lower than the selling price on Ebay!
5. how can major banks sell silver and gold certificicates yet admit in court that they do not buy the metal to back them, then charge storage on non existent metal claiming it's "standard Industry Practice"
WTF!!
I'm the first one to dismiss conspiracy nuts but the metals market is seriously damaged and the recent break between the paper and phyiscal prices of silver is certainly proof its not working in a natural manner.
- jt
- 87 Comments
Aug 27 02:25 PM"Thanks for all the ad-hom comments that only show your lack of decent, mature rebuttals."
You ask to get beat up by the disdainful, in-your-face title of your article, then you whine when it has the if not desired results, then results that should have been expected. You proved nothing. You just threw out some data and a few lines of condescending "thought" and somehow expected that those of us who have been following this and involved in it for years would go WOW!!!...Otto...you ROCK man!!! Your article calls US stupid!!!...yet you get your hackles up when we return the favor. Then you shouldn't be writing these kinds of articles...you need some thicker skin first...or better yet...better information.
"Meanwhile, would anyone like to address the three points made in the article...."
Meanwhile, why don't you address the points in Ted Butler's article?...maybe that would give YOU some point of entry into what WE know and what WE think...if you actually give a crap. If all you wanted to do was spit out an article blasting "conspiracy theorists"...well dude...Congrats!! You just did it!! Walk away with a sense of accomplishment. If you think you already know everything there is to know about the topic (as it would appear)...you will be treated with disdain by those who obviously know a lot more. If you want to learn, then perhaps you should follow the advice of those here who I guarantee you DO know more, and get some more and better information.
In the meantime...if you can't take the heat...get out of the kitchen.....
- Kelly Lieberman
- 209 Comments
My Website
Aug 27 02:35 PMThis list will be getting larger and larger, they are just releasing the names slowly to minimize market reaction. These banks are also experts at manipulating their books.... just like Fannie and Freddie.
So anyway, you have a choice NOW, that you won't have later, at least not this cheap...So, you decide if the risk is worth it to you, and your family...
- jt
- 87 Comments
Aug 27 02:47 PMAnd don't even let "investment" come into your thinking. Just consider it trading in pieces of paper on their way to finding their true innate value for REAL money that has and always has had REAL value...thru all time periods and thruout the world. If the investment part turns out well (as most of us suspect it will)...hey, that's a bonus. In the meantime, it's about wealth preservation. If you're willing to trust your wealth to the full faith and credit of the USGovt...hey...buy up that green paper and stuff it under mattress. jt
- Davinci
- 1 Comment
Aug 27 02:48 PMI have $1,000,000 I will trade you for market price of silver go get it in 30 days. I want physical not promises to pay silver. Heck will give you my promises for the real stuff...
Oh, what, what's that you can't get it? Shame and I though if people where selling silver there will be plenty to buy. My bad I missed that day in economics where prices go down when there is no supply.
- mark mchugh
- 144 Comments
Aug 27 03:05 PMThe second chart tells me that every time the commercial net short positions as a percentage of open interest dropped below about 35%, it was immediately followed by a surge in the silver price. Here in the states, we call that "cause and effect".
Without these few large commercial shorts, silver would be much higher than it is. If you really want to put on your investigative journalist cap, ask the question, "Do these guys really have the silver to back up their positions?" I remain convinced, that they do not.
- Kelly Lieberman
- 209 Comments
My Website
Aug 27 03:20 PMWell now, what more do you need to hear? Do you think Asia will bail us out? Europe? Do you think the Fed will hit the printers again??? I do. Nobody want's to buy the banks bad paper - most of it is based on defaulting mortgages.
The US will print more $$$ so that they can prop the currency in hopes that it will convince everyone that things are still manageable ...and then we will see what happens post-election... Then who will be left holding the bag?
- jt
- 87 Comments
Aug 27 03:34 PMAnd he uses the term "commercial" losely. Butler has just shown that these "commercials"... are not commercials at all, but BANKS, who have NO commercial interest in silver or gold (except...and this is really the elephant in the living room...as CURRENCY...in competition with their fiat!!). Commercials by definition, to be allowed to hold the kinds of positions they can on the COMEX and with their special margin allowances, are supposed to be those who actually buy the physical metal as normal course in their particular business, in order to hedge prices against drops / jumps. These huge shorts...those who put on the absolutely HUMUNGOUS shorts directly before the tank in the prices of silver and gold...are banks!!!!
Others have all but proven that the only banks that could have done this are those connected to (actually part owners of) the Fed itself!!! IE, it would appear quite probable that the Fed, thru it's bullion bank / investment bank lackies / owners tanked the gold and silver markets, using OUR money, to stifle, or try to stifle, the one and only REAL competition to their useless fiat "money" hegemony.
Now...there's some meat to chew on, otto...and we don't have our names under the article presuming to be the "expert." But even we non-experts seem to know a whole lot more about this topic than the "expert"...i... would appear. Find Butler's article, otto...read...learn......
- ottorock111
- 18 Comments
Aug 27 07:02 PMMeanwhile, after haveing read through the latest batch of huffing and puffing i note that no attempt to rebut the three main points of the article, so just in case somebody feels like enlightening me, here they are again
* 60% short position in COT is not that unusual
* In 2005, short interest dropped hard, but it didn't affect the price of silver in the slightest
* For a long time through 2006, 2007 and 2008, short interest moved in conjunction with the price of silver. That means that when there were more shorts on board, the price of silver ignored the commercial traders and just moved on up (and vice versa).
Or maybe you're waiting for Butler to do it for you?
- butlerbuster
- 13 Comments
Aug 27 07:24 PMi.e. I am gratified to read in Ted Butler's weekly commentary, that he now has conclusive proof of the illegal activity he has ben talking about all these years, and now at last has the "smoking gun" evidence of same, regarding the manipulators of the silver market.
So. Given that;
1) This is the culmination of Ted Butler's life's work and message of the past 500+ weekly commentaries, and,
2) Given this conclusive 'smoking gun' incontravertible evidence vindicates the message he has been saying all along, and,
3) Given that Ted Butler, is the world's 'foremost silver expert' according to him per his endorsed sponsor and employer IRI, and,
4) Given that even the slightest hint of illegal market moving activity these days brings out teams of lawyers 10 deep clamoring to file the class action lawsuits on behalf of the aggrieved investors.....
I can ONLY conclude that Ted Butler SURELY will use his great stature as the world's 'Foremost Silver Expert'. And immediately facilitate the filing of class action lawsuits against the deep pocket bank, illegal activity 'silver manipulators' that Ted has uncovered with his 'smoking gun' expose.
Right Ted?
What law firm can I send my paperwork to Ted?
Surely this is your opportunity to be proved right Ted? In a court of law??
Surely you are in touch with law firms at this very moment deciding which team of lawyers you will allow to hire you as an expert witness Ted?
Or .... are you a fraudulent, phony, blowhard who in reality is just pandering to your clamoring throng of conspiracy theory nutballs??
Come on Ted, put up or shut up. I don't need to be impressed with a rehash of the unprecedented short interest change numbers driven by these banks. I am ALREADY impressed with those numbers!!
What I want to see now, is whether this 'smoking gun' proof of the 'illegal activity' you've been talking about for years, will now immediately result in class action lawsuits fo rholders of PAAS, SLW, CDE, SSRI, HL, SLV. Spearheaded of course by the 'world's foremost silver expert', who has been working toward this very end every week for over a decade now.
What do you say Ted? You genuine or just a cult member pandering fraud??? Inquiring minds want to know.
- mark mchugh
- 144 Comments
Aug 27 07:31 PMYou have now officially become the stupidest person I've ever encountered. When the short interest dropped in 2005, silver doubled in the next six months.
That's like saying cutting the dividend doesn't make a stock drop by 50%, because it didn't all happen on the same trading day.
Seriously though, you have clued me in to a very powerful buy signal.
- butlerbuster
- 13 Comments
Aug 27 07:32 PMNo 'manipulators' were holding it back. Or if they were, they sure did a piss poor job of it.
These tin foil hat kool aid drinkers do indeed wish for economic armageddon so they can be proved 'right' but what they don't ever manage to see, is that the huge debt, expanding money supply, fiat currency, etc, has not prevented the U.S. from becoming..and remaining...THE premiere pwoerhouse of economic growth, innovation, wealth creation, standard of living, GDP, productivity, job creation, and any other major metric you want to employ.
The glass is half full not half empty, when you look at economies like the vaunted Eurozone with its broker infrastructure, very high unemployment relative to U.S., total lack of innovation and progress, lower productivity and lower GDP per capita BY FAR Then the U.S. etc etc etc etc.
Are we supposed to envy the Chinese and be worried they get U.S. paper while we get their goods? LOL!! They are polluting theor country to death, have a terrible standard of living overall, and will be repaid in devalued dollars in teh coming decades. They aren't exactly to be envied.
You tinfol hat wearers are one trick ponies who simply miss the big picture and fail to see how well off you are...and will remain...relative to the REST of the world.
- JohnSt
- 1 Comment
Aug 27 08:27 PMit necessary to take a hard look at those paper
instruments. They must be asking, in light of
current markets, does this paper really
represent what it says it does? They
have to ask "where's the beef" so to speak.
Is a 5,000 ounce silver contract really backed
by 5,000 ounces of silver? Comex shows
138,000,000 ounces currently in the warehouse.
With 135,000 contracts being traded, or
about 675,000,000 ounces, it would seem like
there is only enough to honor 20% of those
contracts should physical delivery be demanded.
The investor must ask himself, "what if there's
a run on the bank" so to speak. For the situation
is like a bank in a sense. The bank (comex warehouse)
would fail if everyone suddently wanted to withdraw
his contracted silver.
They (Comex) has already limited delivery to
1.5 million ounces per customer per month.
That's a mini default in itself. It would take
only 90 well heeled customers at 1.5 million
ounces to clean out the vaults.
So, if the paper silver is backed by only 20%
of the real stuff, it would seem prudent to
discount the value of that 5,000 ounce
"contract" accordingly. Say to 20 cents
on the dollar? If paper silver is worth
$13.00 an opunce, could real, actual,
physical silver be worth $65 the ounce?