Breaking: Historic Silver Panic in Progress, Says GATA Sources

By Dominique de Kevelioc de Bailleul

It’s finally here—the long-awaited run on silver supplies.

Speaking with Alternative Investors Hangout (AIH), GATA’s Bill Murphy tells investors, “Just pay attention, right now,” because the buying is so heavy in an unprecedentedly tight silver market, we “don’t know what will happen here; it’s historic.”

And investors should, indeed, pay attention to Murphy’s latest assessment of the silver market.  In July, he said an unidentified European billionaire told him to expect the bull market in silver to resume in late August.

“The fellow I spoke with I’ve known for years, one of the wealthier men in all of Europe,” Murphy told SGTReport in late July [BER article].  “He’s got a lot of connections . . . It will be tough for the gold and silver markets [during the month of July], but starting in August they would start to ‘go nuts’, and they would ‘stay nuts’ for a long time. . . Big, big moves are coming, starting in August.”

After 15 months of a painfully long consolidation, the big move in the silver price began, just as Murphy’s source predicted.  After briefly toughing the low $27 level, silver has soared more than $7 withing three weeks, a gain of approximately 27 percent, or an annual compound rate of 6,500 percent!

Reminiscent of Andrew Maguire’s demonstration to the CFTC of his intimate knowledge of JP Morgan’s nefarious activities in the silver space, Murphy believes his source is well-placed and able to leak accurate information to investors as it comes available.  Hours after alerting media of Maguire’s meeting with the CFTC, Maguire and his girlfriend were attacked by a would-be assassin with a speeding automobile.

Moreover, the absence of King World News’ anonymous London trader has fueled speculation that Anonymous has moved on to Bill Murphy, who may also inherit DOS (denial of service) attacks following leaked information published by King world News.

“Because of my sources . . . when . . . this was in July, that gold and silver were going to base, [then] take off before the end of August and go to all-time highs, much higher, and that’s what’s happening,” Murphy tells AIH.

Another one of Murphy’s sources told him the silver market is so tight that the poor-man’s gold could touch $100 in another mini mania replay of the Aug. 2010 to April 2011 bull run that took silver from $17.50 to pennies shy of $50—a near-triple within eight months.

A similar move today, off $26.50 baseline support, equates to a target price of $75, but, according to Murphy, this next move in the silver price could eclipse that exciting jump which began in the summer of 2010—both in amplitude and time frame.

“I have other sources tell me the silver market is as tight as they’ve ever known in history,” he says.  “I expect silver to go towards 80 [dollars] to 100, quickly.  I know that seems like a big thing, but that’s what I think.

“All I know is: the physical market, if you want to buy silver in size, is the most difficult in history.  These are from my best sources.  We’ve been right on everything so far; now, we’ll see what happens.”

Though moves of that magnitude, suggested by Murphy’s source, may appear to newcomers to the silver market as hyperbole, but, because of the supply-demand dynamics of a heavily fettered silver market, the extent of an upward price adjustment may well become an inverse multiple of the extent of the price suppression.

In the case of silver, the latest U.S. Mint activity report reveals a 191:1 ratio between the number of silver and gold ounces sold at the Mint.  Taking into consideration the ratio of silver and gold available in Mother Earth is estimated at 12:1 (according to the latest mining statistics), monstrous moves in the silver price expected by Murphy appear very reasonable.

And if the gold (and silver) cartel continues to buck Gresham’s Law, nature will indeed take its course—a consequence JP Morgan would like, desperately, to avoid.

“The gold cartel, JP Morgan, is trying to suppress us, but if I’m right, there’s a big scandal coming regarding JP Morgan and the silver market manipulation escapades,” Murphy says.

“It’s going to be something like the LIBOR scandal.  I’ve been talking about this for months, as you well know.  We’ll see what happens.”

Without identifying the extent or exact nature of the scandal, Murphy has said in previous interviews he suspects many banks have defrauded customers through the offering of allocated gold and silver accounts, which, may, in fact, not exist.

And those affected may be large Asian and other institutions, which could suddenly insist delivery of their metal—metal not available for sale at today’s prices.

For the banks to make good on deliveries, much higher prices are needed to draw sellers out.  In the case of silver, the price presumably must at least catch up to gold’s double from its 1980 high of $850 as a price level that could draw sellers to market.  A double in the silver price, from its high of approximately $50 in Jan. 1980, suggests at least a $100 handle for the white metal could bring in the sellers—but maybe not.  The market for silver has been dysfunctional for many, many years.

“I know what should happen behind the scenes,” Murphy ends the interview.  “I don’t know if it’s going to happen.  If it [a stop to JP Morgan's scheme] doesn’t, it will come out in some other way, and it will blow peoples’ minds.”

“Massive Storms” in Silver Market Before American Election, Silver $150

By Dominique de Kevelioc de Bailleul

Speculation of a post-presidential-election-central-bank-coordinated money bomb of fresh new cash from the Fed, the ECB and other central banks, appear to be just that: speculation.  That, according to a regular guest of Eric King’s King World News (KWN), Swiss money manager Egon von Greyerz.

The global central bank bailout and “the coordinated money printing I have been talking about for a long time is going to happen this autumn,” says von Greyerz.  “I can see an autumn with massive storms, Eric.”

Not only has the precious metals market sniffed out an imminent and overt global QE3 plan, the western bank cartel is presumably buying the Spanish 10-year bond ahead of the announcement, taking rates sharply down within a two-week period to 6.02 percent, from a 7.62 percent print of Jul. 24.  Buyers of the Italian 10-year nearly achieve the same performance during the same time period.

Those moves serve as a telltale sign that a money bomb will come before Novemebr.

“They [ECB and IMF] must do everything they can to eliminate counterparty risk because the counterparty risk in the system is massive,” adds Greyerz, which may include strong-arm tactics, according to Mail on Sunday American columnist Mary Ellen Synon.

She surmises that the ECB’s planned policy action of “outright market transactions”, as ECB President Mario Draghi called the debt monetizing scheme in an ECB press release this week, will contain provisions that include the classic IMF ‘carrot-and-stick’ approach to getting things done.

Synon suggestes that, instead of one of the PIIGS getting a bailout—first—before demonstrating agreed-to ‘austerity’ measures have produced results for an additional tranche, the ECB plans to wave money at the people of the country in question and wait for its political leadership to succumb to the pressure to allow the IMF to takeover the nation’s fiscal matters, just as all small Central American nations have had to endure when working with the IMF.

“Start with Spain.  Imagine Prime Minister Rajoy is finally forced to go for an official bail-out,” Synon states in her article, titled Draghi’s new plan to save the euro: ‘Goooood morning, Vietnam!’.

“He has been resisting it, apparently because bail-outs are for little people like the Portuguese and the Greeks, not for important Spain,” she adds.  “But Rajoy gets strong-armed. The EU-ECB-IMF troika designs a plan (which may or may not include IMF money). He has to sign.”

von Greyerz agrees, but falls short of speculating how the behind-the-scene politics will play out for a country like Spain to agree to unpopular cost-cutting measures at the nation-state level.

“There will be pressure from one country to the next,” von Greyerz continues, “and the ECB, European governments, the IMF, and the Fed, they will all be fighting to keep the system together and that will mean printing more money.”

Further speculation from other analysts is: if no signature to an IMF ‘package’, Rojoy must somehow resign to make room for another Goldman Sachs syndicate operator to take control of the country and sign—a la Greece.

All of that drama in Europe will take place before Nov. 6., according von Greyerz, who relays his recent observations of frantic activity in the paper gold market taking place behind the scenes.

Someone doesn’t believe any plan put forward by the ECB to stabilize the PIIGS will work, with a history of two previous plans by the troika having already failed.  This time, the big players are going for the physical gold, and its rumored that those creating a stir in the physical market come from the East.

“I need to add that we are now seeing a lot of fund managers and investors moving out of gold ETFs, and taking delivery of physical gold and holding it outside of the banking system,” he said.

“The reason for this is investors and asset managers are becoming deeply troubled at the thought of a systemic collapse, and the gold being encumbered inside the banking system in that circumstance.”

von Greyerz, KWN’s most bullish contributing analyst, believes the coming weeks will start the next leg higher in the gold price, with the bulls taking gold to bizarrely high levels as the result of the panic deliveries of physical gold and silver bullion (an observation also made coincidentally by one of Hat Trick Letter publisher Jim Willie’s sources).

“This move in gold and silver has barely started,” von Greyerz concludes.  “We will eventually see $100 up-days in gold, and silver will move several dollars in a single trading day.  So we will see an acceleration this autumn.

“We will reach these short-term targets of $50 in silver, and roughly $2,000 in gold.  But I would add that I expect gold to reach $4,000 to $5,000, and silver $150, without any major correction.”  The time frame for such a massive move, he has said in previous interviews with KWN, is 12 to 18 months.

KWN Cyber Attacked Following Gold Market’s Deep-Throat Interview—The Secrets of the Temple Revealed

King World News is under a vicious ‘distributed denial of service’ cyber attack once again, according to

The attack on Friday of KWN’s servers is the latest of several previous attempts to disrupt Eric King’s broadcast of interviews that expose to the public the extent of the JP Morgan precious metals manipulation scheme—a scheme in full progress, yet still not resolved by the CFTC after two-plus years of the watchdog’s ‘review’ of the evidence. Sign-up for my 100% FREE Alerts

Friday’s attack is believed to have been prompted by proprietary trading data offered up by KWN’s Anonymous London trader regarding a large “Asian buyer” and this buyer’s trading patterns.  It now appears that, according to Anonymous, this large buyer has successfully ‘cracked the code’ of JP Morgan’s equally-large client’s algorithm used to achieve optimum and cost-effective price-suppression tactics in the gold and silver market.  The motive for such a criminal act is obvious to international financiers: capping the gold price lends support to the US dollar.

“Interestingly, the Asian buyers have figured out the algorithms, like breaking an enemy’s code in war, and they are using the algorithmic trading to get the best prices each day for physical gold at these levels,” Anonymous told KWN in the interview that apparently prompted the attack. “The trading is just taking place at lower levels because these bullion banks and the Fed, which manage the price of gold, get overzealous in their price fixing.”

Beginning with the GATA roundtable discussion in March 2010 regarding a vital and material witness to the scheme, Andrew Maguire, and the suspicious mob-like hit-and-run incident that threatened the lives of Maguire and his female companion shortly after Maguire’s shocking announcement of his meeting with the CFTC about the JP Morgan scheme, some person or organized cyber cabal has periodically attacked King’s servers following key interviews with experts providing play-by-play commentary of the ongoing financial crimes committed by the beleaguered Fed and its primary dealer network.

GATA’s decade-long work has demonstrated how the precious metals manipulation scheme works in impressive detail, but prosecution of the case requires a witness to the fact alleged by GATA; that witness is Andrew Maguire.

Two years later, the attacks started again—and the subject of manipulation discussed by one of the world’s leading experts of the gold market, Jim Sinclair of, as well as Anonymous’ witness to the “Asian buyer’s” entry into the fray, was again the catalyst for the DDoS barrage.

“The attacks started when the London trader interview piece was released April 5,” King told GATA, Friday.  “The attacks continued and intensified when our interview with Jim Sinclair’s futures market analyst, Dan Norcini, was published on April 11.  A very powerful entity did not want this information out there.” Emphasis added.

Due to privacy laws on both sides of the trade, JP Morgan’s large naked short sell-side client can’t be revealed, and the buyer’s identity can’t be disclosed either.  But the overwhelming suspicion by the gold market’s premiere experts as to whom JP Morgan’s big naked short-seller is points to the NY Fed.

Consultant to the Department of Defense Jim Rickards in his interview with TruNews Radio of Apr. 11, explains the grossly unappreciated role gold plays in geopolitics between the US and the biggest Asian buyer of the precious metal, gold: China.  But Rickards stops short at the time of the punch line.

“So Russia, China, Brazil, the other BRICS countries that you mentioned have very large dollar holdings,” Rickards told TruNews’ Rick Wiles.  “So they’re watching their savings account in effect evaporate or melt as we cheapen the dollar, so they’re looking for alternatives.  One of them is gold, but gold is very difficult to find and when you start buying it you tend to drive the price upSo if you want to buy a lot you’re going to be paying higher and higher prices.” Emphasis added.

Precisely.  China needs a counterparty to provide ‘dig up’ the gold—the weak hands.

What Rickards neglects to add in the interview with TruNews is that, for China to offer an alternative to the dollar in a new reserve currency scheme endgame, it will have to match the US’s alleged 8,150 tons and the Europe’s verified 10,000 tons of European gold to earn a seat at the BIS table.  Why else would there be a reason for a meeting in the first place?

Is it any wonder why the Germans refused to back the EFSF with German gold?  It also explains why the US and now, Germany, have no interest in auditing their respective gold holdings.  Military capabilities, oil reserves and gold holdings are secrets necessary for national security.  How much gold does China really have?  No one knows.  All mined gold within China’s borders and procured directly by the PboC are not necessarily accounted for in official disclosures.  The same can be said of Singapore and other ‘money center’ jurisdictions.

Moreover, if China’s “savings” are dominated with and denominated in dollars and euros, what would give China the upper hand in the negotiations to have the renminbi included in a new gold-backed SDR?  A collapsed dollar and euro won’t include trade surpluses anytime soon for China with a heavily weighted trade component to its GDP.  Therefore, it’s fiat currency reserves won’t mean much now that the jig is up for the dollar, and by extension the euro, of which, together represent approximately 88 percent of global paper reserves.

Therefore, Beijing needs to replace as much of its dollar holdings to gold holdings while the dollar remains a viable trading currency.  And Beijing has the patience to play the other side of the Blythe Masters gold giveaway trade.  Beijing has no plans to trash the dollar at this time unless it wants to use it as a weapon in the geopolitics of Iran—which incidentally would like to receive gold for its oil if push comes to shove in its maneuver to counter a SWIFT blockade.  Russia’s military approves of Iran’s decision.

No one is trying to run down Jim Rickards in the street.  And that’s why the Anonymous’ play-by-play of the real war has the NY Fed frantic.  Is it a coincidence that Blythe Masters has suddenly begun to make appearances on financial television to ‘explain’ JP Morgan’s position on the matter of manipulation.  And who else has the clout to impede a CFTC determination of whether the gold and silver market have been, and are, manipulated? Sign-up for my 100% FREE Alerts

Silver Bugs: Toughen Up & Hang Tight

In his latest comments on King World News, Trader Dan Norcini of Jim Sinclair’s makes a great point—a point which may turn out to be the most critical to newcomers of the silver market.  Volatility has been tremendous lately in all commodities markets. But in the silver market, volatility is the norm.

Bottom line for silver investors: if volatility scares you, get over it, or get out!  Sign-up for my 100% FREE Alerts

Unless you’re in this thing for the long haul, trade AAPL or some other stock, because the Fed is intentionally creating volatility in the commodities markets to keep wimps, amateur traders the uninformed out of the silver market.  In fact, Bernanke would like to punish traders.

“We have tremendous whipsaw action in commodities.  It’s so wild right now in terms of the trading swings. . . ,” Norcini told King World News, Friday.

“In my opinion, the Fed and the Working Group on Financial Markets have been actively manipulating key markets.  The Fed has been doing this manipulation in an attempt to push investors back into the stock market and out of commodities and hard assets.”

If you’re new to the silver market because due diligence brought you to the precious metal, stick to the buy side, first of all.  Second, don’t be a fool and trade it.  You must exhibit discipline.  And third, stop waiting for wonderful prices!  Anything below $50 is a wonderful price, if your research has told you anything.

As a suggestion, Google “Stephen Leeb site:” or go to and listen to Leeb’s past three interviews.  You feel good at buying silver at $30, $40 or $50.  So, at $32, silver, according to Leeb, is a joke.

Back to Norciini: “The Working Group on Financial Markets (aka Plunge Protection Team—PPT) then goes in and starts putting heavy pressure on key commodities, which triggers a cascade of sell orders,” Norcini added.

So the point is: unless you’re privy to the PPT’s next attack, stop trading silver!  The Max Keiser Casino Gulag is stacked against the trader in the silver market.

Norciini rightfully points out as well that, part of the Fed’s plan of incrementally capping commodities prices is to make the markets very volatile for the 90 percent of the public who can’t take the heat—the wimps, if you will.  If you’re looking for another smooth ride from a lifeboat off this sinking Titanic, too bad, there’s is none.

“The Fed is literally undercutting the value of the dollar and they are causing a lot of repercussions around the globe. . . ,” Norcici continued.  “The other countries are not run by fools and they understand the destructive policies of the Fed.”

Norcini makes another good point:  Mom and pop investors have traditionally played the fool.  Nation states with lots of capital move money into extended macro trends, and so should you.  As prices fall, sovereign wealth funds go to work by accumulating what they want.  Copy the flows of the big money and you’ll be carried along for the ride, not whipsawed.

And finally, if you’ve listened to Jim Sinclair for any length of time, you should be laughing each time the Fed threatens to stop its so-called ‘quantitative easing’ or Bernanke suggests that the U.S. economy is on the mend, which would then preclude further money printing.

When the aforementioned wimps panic out of the silver market because they continue to play the mom-and-pop fool to Bernanke’s lies and deceit, you better be buying with the Chinese on the pullbacks.

The only troubling decision to be made in the silver market is when to ultimately sell your stash, if it all.  Buying the metal and holding it should be a very easy thing to do.  Sign-up for my 100% FREE Alerts

Attention Silver Bugs: Get Back into the Pool—NOW!

Insiders to Fed Chairman Ben Bernanke’s speech, delivered at a gathering of the National Association of Business Economics, popped silver futures higher by more than 60 cents within minutes of the NY open on Monday.  In his speech, Bernanke has finally admitted that more QE is needed, and his needed excuse is: fight stubbornly high unemployment.

The recent alleged decline (see in the unemployment rate reflects a “a reversal of the unusually large layoffs that occurred during late 2008 and over 2009,” he said to attendees in Arlington Virginia. “To the extent that this reversal has been completed, further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.”  Sign-up for my 100% FREE Alerts

“Continued accommodative policies!”  Translation: Attention silver bugs!  Get back into the pool—NOW!

While the FOMC is now stacked with nine doves to Bernanke’s 10-person committee, with Richmond Governor Jeffrey Lacker playing the sole bad cop in his role of providing the occasional head fake for those traders who don’t quite grasp the Fed’s communique con game, yet, there’s nothing stopping the Fed from its mission to monetize crushing levels of U.S. Treasury debt (save a long-shot Ron Paul win in November, of course).

To that point, on Friday, Gabelli & Company’s Caesar Bryan warned precious metals investors of the Fed’s ability (and a complicit media) to sway sentiment among the uninformed momentum traders who routinely push the silver market to massive extremes on the way up and on the way down.

“What we’ve seen is some optimism surrounding the U.S. economy,” Bryan told King World News. “This has led to people now thinking that the Federal Reserve can stop expanding their balance sheet and indeed begin to withdrawal some of their stimulus.

“So there’s been a pretty big change [due to Fed and media propaganda] in the last six weeks.  However, I think it’s important for investors to understand these mood swings can be pretty quick and violent.”

Bryan goes on to tell KWN that, though the Fed talks a tough game, it cannot stop expanding its balance sheet without imploding the entire global financial system—a point still not grasped by the majority of investors holding sovereign and corporate debt as well as money market accounts.

“There is real pressure for the central bank to continue to buy at the long end of the bond market to prevent long-term interest rates from rising,” Bryan said.  “So don’t be surprised in the next couple of months when psychology shifts back to people thinking the Fed will remain active.”

In retrospect, those “next couple of months,” according to Bryan, turned out to be only a couple of days.

But if investors can take to heart 50-year veteran Jim Sinclair’s macro outlook for gold (by extension, silver), long and drawn-out declines in the silver price provide excellent entry points for newcomers and accumulators, or ‘stackers’.

According to Sinclair, the Fed had already set course to monetize debt and devalue the US dollar following the collapse of Lehman Brothers in 2009, no matter what Bernanke may say about unemployment, the economy or anything else.

Moreover, geopolitical considerations regarding Iran and the White House’s decision to cut Iran from SWIFT only serves to hasten the dollar’s decline.

On Saturday, Sinclair posted on his Web site

The major financial weakness in the U.S. is the level of the U.S. dollar due to sundering use in international contract settlement [accelerated by cutting Iran from SWIFT], the clear and present trend of substituting both the Yuan and Euro as international settlement currencies, and the lack of true economic buyers in the U.S. long bond market.

History will record this decision at this time as a major factor in the final move to financial unwind in the West.

The letdown of the housing report today does not support the majority view that the U.S. is gaining take off speed economically. It is not. It will not and QE will go to infinity, about that there is no question. [Emphasis added]

Of course there’s no question about QE-to-infinity, as Sinclair has suggested all along; the question really is, who will be blamed for the roaring consumer price hikes to come?  The Fed or Iran and speculators?  Sign-up for my 100% FREE Alerts

Sprott Makes His Move of the Comex, Physical to Break from Paper

Following the dramatic and viral news of famed trends researcher Gerald Celente’s confiscated MF Global future brokerage account, scaring legitimate commercial sellers and buyers like a Celente to withdraw from the fraudulent system, the crafty Canadian billionaire Eric Sprott positions himself to make a bold move to finally break the Comex grip on the silver market.

In his Nov. 25 interview with King World News, Sprott’s noticeable focus shifted to his PSLV closed end fund, from his usual discussion with King about the European fiasco and other selling points for owning bullion.  Sign-up for my 100% FREE Alerts

After a brief moment discussing the tired, yet power ‘printing presses’ case, for owning bullion, the discussion turned to the real juice.  His message to both physical buyers and sellers of silver:  You can trust me to deliver.

Here’s how it works—

“If you had a total bust and people feared the banking system and started buying gold,” Sprott said,  “. . . by that time currencies will almost be worthless . . .”  And no one will take on counter-party risk at that point, either.

“All you know is that there’s only a couple of things that you have to have your money in to be safe,” he continued.  “For example, I’m writing a letter basically suggesting to the silver producers, you know you guys have all of this money in banks, why do you have it in banks?”

Knowing full well that mining CFOs cannot justify holding their own inventory in lieu of cash on their balance sheets because the company suddenly wants to become a hedge fund instead of silver producer, it appears that Sprott may likely follow up his “letter” with a personal visit to explain to the brass that he would like to nudge the Comex out of the business of clearing deliveries.

And why not?  Sprott’s $1.5 billion available firepower today now represents more than the 31 million ounces worth of silver stored at the Comex.  So the choice Sprott offers silver producers is simple:

Trust the CME/Comex following the MF Global affair, or trust Sprott Asset Management’s viable $10 billion enterprise, which sports a healthy premium to NAV as proof of his reputation and massive customer base.  Sprott is telling us that he’s positioned to make a market beyond the retail end of the business.

And, on the buy side: How likely is Celente, or anyone who read his shocking tale of how he was robbed by the U.S. financial system, to initiate future delivery of bullion (or anything, for that matter) from an obviously dysfunctional and criminal clearing operation at the CME/Comex?  Moreover, wouldn’t a declining base of buyers in the futures market ease JP Morgan’s naked short selling operation that much more, suppressing prices to its legitimate commercial accounts?

Now comes in a big buyer of silver; he wants to buy the metal but doesn’t want to take delivery though the Comex in fear of being ripped off like some rube taken in by the Nigerian bank scam that’s now moved to the Comex.

Sprott has a solution.

“In my ideal, we get a couple of institutions come in here and say, ‘Hey we’d like to take down a couple of hundred million bucks worth of silver, we love your vehicle,’” Sprott added.  “And then we might go and say, ‘Okay, I think it’s time to go out there and go raise some money to buy silver.’”

And to mitigate the effect of an escalating premium this ideal couple hundred million ounce order would have on the NAV premium to the small buyer, Sprott can raise the money through a Letter of Credit in conjunction with an assumed wide premium take down available to him from selling some PSLV shares to raise cash, arrange delivery from the producers (who have by then ‘invested’ in silver), and the deal is made.

Everyone’s happy, except the Comex.  Big buyers get a deal from NAV premium, producers don’t lose sleep, and small buyer aren’t hurt by the sudden volume.

“I’ve always stated that I’m not going to do anything that would negatively affect the premium of that fund,” Sprott reassured investors, as these silver aficionados know soaring silver prices also ratchet up PSLV NAV premiums, a complaint voiced on the Internet from time to time.

And as far as the timing of such a price-popping event?  Sprott won’t venture to say, or isn’t telling.

“So we’ll just have to wait for the right time and who knows when it happens?”  added Sprott.  “Maybe we have to imagine that the silver price is moving up, which we haven’t been in that environment recently, but the interest can come back very quickly.”

Sprott’s plan is a win-win-win proposition for investors, producers and him.

Expect registered silver at the Comex to dwindle now that MF Global has done its job chasing participants from this tiny marketplace.

Who’d imagine that another Son of American Liberty would come from a profiteering billionaire from Canada?  Marquis de Lafayette Sprott has come to the aid of America once again.

Silver Price: Silver “Could Easily See $75”, James Turk

Silver bugs anxiously waiting for a the next big move in silver could get one soon enough.  Goldmoney’s Founder James Turk is out with his next call for the silver price.  He believes silver could reach between $60 to $75, “easily,” but wouldn’t put a time period for that target range.

Turk does, however, expect a technical breakout of the silver price from its consolidation to take place sometime in November, which he expects will embolden the bulls to race prices through $50 and to all-time highs.  After $50, the sky’s the limit for silver. Get my next ALERT 100% FREE

“Silver is forming a beautiful, long-term, flag consolidation pattern,” Turk told King World News, Monday.  “The flagpole started in 2010 at $18 and peaked at $49 earlier this year.  We are now in the flag and we can expect a breakout, I think, within the next few weeks.”

As one of several old hands of the bullion business, Turk understands what drives gold prices—therefore, silver prices.  He takes publicly available Federal Reserve data to estimate the expected change in the Fed’s balance sheet and calculates to a ‘fair price’ for gold and silver.  He calls his simple, yet elegant, model, “The Gold Money Index”.

As traders watch for any hint of a Fed announcement regarding more QE, the matter before the Fed appears to be fait accompli.  As a reminder of the grotesque U.S. budget deficit, expected to reach at least $1.6 trillion for fiscal 2012, the U.S. Treasury issued a news release on Monday, announcing its funding needs for the quarters of Oct. – Dec. and Jan. – Mar., totaling $628 billion, or a 35 percent jump from the equivalent six-month period a year ago.

Here’s the widely-known problem with Treasury’s plan to fund additional deficits at this time:

Foreigners, who have propped up U.S. deficit spending for more than two decades through increasingly higher amounts, have been net sellers of Treasuries lately, not net buyers—and that 35% increase in additional funding needs comes at a time when foreigners are withdrawing from the dollar to debase their own currencies.

One question looms large.  Will the Fed have to buy the entire $628 billion net issuance?  If so, the Fed’s balance sheet will grow at a 47.9% rate from its approximately $2.9 trillion total.

A collision course with a big precious metals move is near, as auction results should show larger and larger take-downs of Treasuries from its primary dealer network.  That should spook the markets.

The formation for silver’s recent consolidation indicates the market expects the Fed to mop up Treasury issuance in another QE operation.  What else can it do? Talk of ‘inflation expectations’ and U.S. GDP is an obvious and tired smoke screen to the reality of Treasury’s funding needs.

“. . . it [silver price consolidation formation] projects to a $60 silver price, but given the strength of this pattern, one could easily see $75,” said Turk.  “The shakeout over the past six months has put a lot of people on the sidelines.  I don’t expect that money to come back into the market until silver goes back above $43.  When silver takes out $43 it should rocket just like it did earlier this year when it nearly doubled in price.”

The graph, below, illustrates James Turk’s confidence of rapidly rising silver prices in the coming months, though the extent of the anticipated damage to the Fed’s balance sheet, which drives precious metals prices, is unclear.

It’s no secret that higher interest rates cannot be tolerated by the Fed.  Near-zero rates at the short end of the curve until at least June 2013 is already entered into the record.  That is clear.  Therefore, if foreigners cannot be counted on (they don’t have the additional cash) to buy U.S. Treasuries, no one else but the Fed can buy them.

PIMCO’s Bill Gross asked the rhetorical question in one of his missives last summer, “Who will buy Treasuries if the Fed doesn’t?”  A better question might be, “How much Treasuries will the Fed buy?”

Or . . . and may be classified as a tin-foil hat proposition: what if an outrageous event occurred somewhere in the world that would scare investors into Treasuries at any price?  We could see Treasuries mopped up at lower yields and soaring precious metals prices simultaneously.  Who knows?  But traders of both gold and silver shouldn’t be disappointed in any event.

Peter Schiff: Silver Price going to $50, “So Buy it Now”

For those waiting to seize another drop in the price of silver, Euro Pacific Capital CEO Peter Schiff believes today’s bargain basement price won’t get any cheaper and that full-pricing of $50 in the white metal is coming—maybe within 60 days.

Speaking with King World News’ Eric King, Friday, Schiff warned procrastinating silver bugs, “We are going to eventually go through $50 [silver], so buy it now.”

The gold price, he expects, will reach $2,000.

Schiff’s latest advice comes on the heals of last week’s bold call, of which, he said a renewed drop in the U.S. dollar was imminent and a rally in the precious metals would ensue for the remainder of the year.  And if Schiff turns out to be right in the face of a teetering EU and the backdrop of FX Concept’s Founder John Taylor’s mid-summer call for a big dollar rally for the second half of 2011, clearly many traders will be knocked off guard.

Moreover, and for what it’s worth, especially during a period of overactive central bank intervention in the currency market, Schiff’s outlook for a declining dollar for the remainder of this year is consistent with the dollar’s 40-year seasonal pattern of weakness against major competing currencies during the months of November and December—a period, too, when precious metals have historically been inversely strong.

“Our short-term target for the euro, maybe by year end, will be up near 1.48,” Schiff told listeners of the KWN Oct. 25 broadcast.  “I think that’s going to catch a lot of people off guard who were writing the obituaries for the euro, to see the euro approaching the 1.50 level.  The dollar index should be headed back down to the 72 level.”

Friday’s big move in the euro and nearly equal move down in the USDX did, indeed, take euro shorts by surprise and aided further the move higher with an onslaught of short covering in the Forex throughout the trading day Friday.

One currencies trader, Jim Rogers of Rogers Holdings, was taken aback by the surprise deal struck in Europe, the impetus of the euro move.

“Never in a million years did I expect them to impose a haircut of 50% [on Greek bondholders], this shows at least somebody is starting to accept reality,” Rogers said in an interview with UK-based Investment Week.

“There has been a major overhang, so we will see the easing of some pressure, but the problem will come back because the Western world still has not dealt with its debt,” he said, apparently agreeing with Schiff insofar as the flight back out of the dollar may still have some legs left in it.

Mostly buried beneath the news out of Europe, however, was the story of the yen cracking a post-WWII high against the dollar as well as the dollar falling significantly below strong support at 76 on the USDX.

“Today the dollar is at an all-time record low against the Japanese Yen,” Schiff said, Friday.  “So you have a weak dollar, you have bond prices now headed lower, commodities up, stocks up, kind of across the board.  The message is get out of paper, get into stuff and the worst paper is dollars.”

But the BOJ didn’t miss the move and took violent exception to a strong yen.  At the open of Monday’s trading in Tokyo, massive BOJ intervention dropped the yen 382 points to the dollar within 30 minutes—severely punishing the longs to a six-standard-deviation bloodbath, further making it clear that attempts at refuge from the dollar to the Japanese currency won’t be tolerated.  As precious metals price dropped against the dollar, gold and silver rose against the yen.

The move by the BOJ comes atop China’s central bank re-pegging of the renminbi to the dollar, Swiss intervention in early September to weaken the franc, and the BOE move to weaken pound sterling.  Now, it may be the dollar’s turn, according to Schiff. Get my next ALERT 100% FREE

He expects the decline of the USDX will logically come from further strengthening in the euro, sterling and CAD, with another assault (3rd time) on the all-time support low of 72 USDX expected this year, or at the latest sometime in 2012.

USDX composition (weighting)

Euro (57.6%)

Japanese Yen (13.6%)

Pound Sterling (11.9%)

Canadian Dollar (9.1%)

Swedish Krona (4.2%)

Swiss Franc (3.6%)

“I think we will come pretty close to hitting $2,000 on gold this year,” Schiff reckoned.  “It would be hard for gold not to be above $2,000 in 2012.  I really think it would be unlikely that we wouldn’t see prices north of $2,000 next year.”

He continued, “The dollar is headed right back to the lows and I think it will take out the lows.  If it does break to new lows, that’s when we might see another crisis because then we might start to see the world questioning the viability of the U.S. economy….”

Silver Price much too Low, Eric Sprott

Nervous about the silver price during the worsening global economic slowdown?  Don’t be, according to Eric Sprott, CEO of Canada’s largest independently-owned securities firm Sprott Asset Management.  Silver (and gold) have become de facto reserve currencies, according to him.

In the silver market, “we’re going hand to mouth these days,” Sprott told listeners of Financial Sense Newshour.  And Sprott, of all people, should know; the last significant order placed in the open market by his firm in late 2010 took three months to arrive, he said, “and some of the silver that was delivered to us was manufactured after we purchased it.”

Following the massive ambushed on the silver market by Fed proxy JP Morgan during the month of May, Sprott, has noticed a radical change in the dynamics between the paper market for silver and the physical market for the white metal.

“The physical market is what I analyze more than anything else, and all I see is buyers,” Sprott said, at which point FSN host James Puplava chimed in, “That’s what the dealers are telling me.”

In the past, a Fed ‘take down’ caused demand for physical to cool significantly.  Today, however, typical supply/demand norms have been righted—that is, lower prices increase demand and visa versa.  In other words, the silver market has become functional through its physical market participants.

“It was very convenient for central bankers and governments, the price of gold fell off exactly as Europe hit its sort of peak in risk of the financial arena in the sovereign thing,” Sprott mused.  But, this time, the Fed-led take down of silver and gold prices revealed a large crack this time in its scheme to suppress precious metals demand in the physical market.

Sprott suggested that the evidence gathered from buyer demand in physical bullion at his firm, and others he deals with, has led him to conclude that gold has finally taken on the role as the preferred reserve currency, a conclusion also drawn by Grant’s Interest Rate Observer author and publisher James Grant, World Bank President Robert Zoellick, Euro Pacific Capital’s Peter Schiff, as well as bullion experts James Sinclair and Goldmoney’s James Turk.

“The markets have made gold the reserve currency.  That’s what I believe, that’s gone up 100 percent against every currency in the world,” Sprott explained.  “So, it is the world’s reserve currency, as far as the markets go.”   “And as an offset to that, gold is not going to be a reserve currency without silver playing a hand here.” Get my next ALERT 100% FREE

If an investor takes a three to five-year horizon of the silver market, according to Sprott, the historical ratio between gold and silver of approximately 15:1 (a geological observation of relative scarcity of earth deposits) will, again, be achieved as investors realize that a decision to buy precious metals to offset ongoing devaluation of fiat currencies across the globe will more likely favor the relative cheaper of the two metals to the other.

Moreover, as Sprott points out, mining production statistics throughout recent years reveal a decline in the historical ratio of availability between silver and gold ores.  Today, it appears that the ratio has been stuck at approximately 10:1 for some time now, suggesting to some analysts that maybe ‘peak silver’ is upon us.

“So why should it trade to a 50:1 multiple?” posits Sprott. “Give it three to five years; we’re going to get back to ratios which are way more appropriate to the underlying fundamentals of gold and silver.”

At today’s gold price, a reversion to the historical norm calculates to a silver price of $110, or a whopping 70% discount to today’s $32 price tag, under the Sprott thesis.

As approximately 57% of the world’s GDP, that percentage, which is the combined GDP of the U.S., EU and China, appears to be collapsing—again (see IMF), a well-founded sense of gloom for a coming worse economic time has gripped global markets rather quickly, creating fear of another Lehman-like unwind of money flows out of dollar and euro-denominated assets, back into those currencies, which could, then, take down the precious metals complex.

Sprott believes that argument will ultimately prove to be a specious one, a throwback to another time when the U.S. dollar (and euro) was readily accepted as a reliable medium of exchange.  Today, investors should, instead, focus upon horrendous supply constraints and mushrooming investor demand, driven by eroding faith in the both the dollar and euro.  Violent short-term swings shouldn’t dissuade investors from holding silver for a three to five-year outlook, according to Sprott.

“God forbid that we actually end up with a seriously declining economy,” he said facetiously.  “Because if you think it’s bad for banks, today, wait until you have to deal with a couple years of negative GDP growth and what happens to value of those paper assets that they own.”

Sprott added, “The ultimate destiny for gold and silver is that people will prefer to own those investments rather than have money in the bank.  And there’s a lot of money in banks.  People don’t yet perceive that gold and silver are the superior investment, but in my mind they are.  Because when you have money in the bank, there is tremendous counter-party risk.”

Counter-party risk?  That’s a Goldmoney’s James Turk’s theme—a theme, Turk believes will seep into investor consciousness over time, catapulting silver to phenomenal heights in the coming years.  Ditto for Eric Sprott, who said in a MineWeb interview of April 5—“Silver is the investment of this decade as gold was the investment of the last decade.  So we’re sitting back waiting for things to evolve here.”

Occupy Wall Street Revolt reaches Silver Market

Arab Spring spreads to the United States.

As operation Occupy Wall Street buds into a potential monstrous patch of weeds scattered throughout, what would be, otherwise, a bankers Garden of Eden, with unconfirmed reports of the Transportation Workers Union, Teamster’s Union and Verizon Workers slated to join in on the bankers bashing this week in NYC, the silver market, too, is undergoing its own protest—of sorts—against the Monopoly money of the bankers—the U.S. dollar.

Speaking with Financial Sense Newshour’s James Puplava, CEO of KDerbes Precious Metals, Kathy Derbes, told listeners that September’s swoon in the silver price sparked a shocking revolt against paper money, as her clients came in with “extraordinary buying” for all silver products “across the board” in a frenzy to trade paper for precious metals, especially silver.

Derbes account corroborates reports out of King World News’ Eric King, who interviewed Eric Sprott of Sprott Asset Management last week, in which Sprott said his firm had been wiped clean of its silver stock during the huge price drop of the week ending September 30.

Similar to Sprott’s clients, Derbes’ explained that her clients are well-healed, shewed investors who are acutely aware of the bullish fundamentals underpinning the bull market in silver.  In fact, in the minds of these investors, according her, the reasons for converting paper money to hard-money have intensified.  “They know what’s going on,” she said.

While the selling intensified in the silver futures pits last week, Derbes said her clients previously had picked up on the paper game played at the Chicago Mercantile Exchange (CME) and don’t interpret the price drop as a disappointment.  The opposite reaction, she said, is true: these investors see the calamity as a gift.

“That [silver's 30+ percent drop within three days] was intense selling for a myriad of reasons, Derbes explained.  “But while that was going on, my clients on the physical side have had just extraordinary buying.”

“I think investors are really smart; they know what’s going on.  They understand that these price breaks, particularly this time around, are not telling us anything about fundamentals of gold and silver,” she continued.  “In fact, I think the reasons for owning it have gotten a lot stronger.  It’s basically a reaction to, in my opinion, short-term liquidity needs brought about by a number of different issues going on in the macro environment.”

Not only have premiums increased for sovereigns and privately-minted silver coins at bullion dealers during last week’s sell off, dealer delivery times are expected to match the delays following the aftermath of the global 2008-9 sell off.  At that time, reports from dealers across the globe indicated long lead times for larger orders, most notably, of which, came from Sprott Asset Management  and the subsequent ongoing drama associated with protracted delays in delivery of its 694-ton silver order in late 2010.

On Jan. 10, 2011, Sprott issued the following news release: 

As of Nov. 10, 2010, the Trust had contracted to purchase a total of 22,298,525 ounces of silver bullion. As of Dec. 31, 2010 a total of 20,919,022 ounces of silver bullion had been delivered to the Trust. The Trust expects to take delivery of the final 1,379,503 ounces of silver bullion by Jan. 12, 2011.

Derbes believes the market for silver may become tighter, still, in subsequent weeks and moths ahead following last week’s massive drop in the spot price at the COMEX.  Coin premiums have soared on Thursday and Friday of last week, just as they had during the last steep correction in paper silver two years ago.

“We’re probably in the beginning stages of what could be shortages; it certainly looks that way, so we’ll have to wait and see what happens,” she reckons.  “I’ll tell you this, the buying has not stopped.  If anything, it’s intensified this week.  It’s pretty amazing.”

“We have to remember that it’s [silver] a market that cannot be printed into existence like the paper currencies.”

The Occupy Wall Street movement is the latest in, what appears to be, an ongoing and more intensified crises in confidence in US institutions.  While protestors descend on Wall Street to voice their anger regarding its government taking side with big bankers and the Fed during the toughest economic times since the Great Depression, investors in droves are casting their vote against the paper dollar and in favor of hard money—gold and silver.