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Silver, Short Positions, and Potential Squeezes

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April 06, 2010 – Comments (5)

Here is another article that adds to the coversation. Many of us have have been talking about this issue for the past few years, but the volume on the topic has been picking up in the last few months. Everybody should definitely read Chris's (TMFSinchiruna) fantastic article Is Your Safe Haven a House of Cards? - http://www.fool.com/investing/general/2010/04/05/is-your-safe-haven-a-house-of-cards.aspx for comprehensive reporting on manipulation in the precious metals market.

The article I am linking to below has the title "Silver Short Squeeze Could Be Imminent" .... while this is certainly possible (that it is "imminent"), I think these things tend to move at their own pace and will happen when nobody expects it to (certainly not when the conversation is heavily on the topic). But it is important to discuss now so that you can be positioned properly ahead of time, before any major events take place.

There is a lot of misinformation out there regarding precious metal manipulation and short positions. A very good place to start your research if you are new to the topic is GATA - http://gata.org/

Silver Short Squeeze Could Be Imminent
By: PR Newswire | 03 Apr 2010 | 02:52 PM ET
http://www.cnbc.com/id/36160274


[excerpt]

FORT LEE, N.J., April 3, 2010 /PRNewswire via COMTEX/ -- The National Inflation Association today issued a silver update to its http://inflation.us members: On December 11th, 2009 NIA declared silver the best investment for the next decade. In our December 11th article, we said that it wasn't a coincidence that the very day Bear Stearns failed was the same day silver reached its multi-decade high of over $21 per ounce. We went on to say, "The reason why we believe the Federal Reserve was so eager to orchestrate a bailout of Bear Stearns, is because Bear Stearns was on the verge of being forced to cover their silver short position." JP Morgan took over the concentrated short position in silver from Bear Stearns and gained complete control over the paper price of silver. Within weeks, JP Morgan was able to manipulate the price of silver down to below $9 per ounce.

NIA believes they were able to drive the price of silver down through "naked short selling," selling paper silver that is unbacked by physical silver.

On February 5th, we witnessed another sharp decline in silver prices, which NIA described on February 7th as being "just a temporary wash out, before a huge surge in silver prices later in 2010." Since then, silver prices have rebounded by 18%. The temporary wash out that occurred on February 5th was predicted by independent metals trader Andrew Maguire, who came out this week exposing the fraud that is taking place in the paper silver market

5 Comments – Post Your Own

#1) On April 06, 2010 at 7:54 AM, XMFSinchiruna (27.12) wrote:

binve, Thanks for linking to my article. This is one story that definitely needs to make the rounds.

While I agree that a short squeeze in silver looms, it is important to point out that the piece you linked to is a press release rather than an article.

There is a lot of good stuff out there on silver, but this release by the "National Inflation Association" didn't impress me very much.

 

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#2) On April 06, 2010 at 3:04 PM, outoffocus (23.49) wrote:

Wow. "hit and run accident".  Why am I not surprised. The previous financial collapse were based on bets on paper assets.  The government was able to save those companies then.  What happens when the crap hits the fan on commodities? I'm not so sure the government will be able to save anybody then.  Not even themselves. Of course this is just a hypothetical. I'm sure the mighty overlords at GS will think of something.

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#3) On April 06, 2010 at 4:18 PM, bothisellhigher (< 20) wrote:

We are all so much better off with people like Sinch and Binve keeping us informed-thank you men!

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#4) On April 06, 2010 at 7:51 PM, workfor (< 20) wrote:

Check out silverbearcafe.com for good links to timely precious metals articals.

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#5) On April 06, 2010 at 8:43 PM, binve (< 20) wrote:

TMFSinchiruna ,

No problem! You saw that I put it on my other blog: http://marketthoughtsandanalysis.blogspot.com/2010/04/is-your-safe-haven-house-of-cards.html.

>>While I agree that a short squeeze in silver looms, it is important to point out that the piece you linked to is a press release rather than an article.

That is true, thanks for the clarification!.

outoffocus ,

Hey outoffocus!

>>The previous financial collapse were based on bets on paper assets.  The government was able to save those companies then.  What happens when the crap hits the fan on commodities?

Very good question.

>> I'm sure the mighty overlords at GS will think of something.

Probably shorting everything in sight while taking out default insurance :)

bothisellhigher,

Thanks man! Absolutely!

workfor,

Good call! I have read many articles there myself!..

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