silversky

Bets on next weeks close? Up, down, flat?

On top of the crippling money printing, the Biden administration deliberately sabotaged cheap energy in the US, by ending the fracking boom and shutting down US Canada pipeline construction. Cheap energy makes everything possible, without it everything becomes expensive and the global price of oil has shot up as a result of Biden's supply restrictions. When you throw sand in your own gearbox like that, it really shouldn't come as a surprise when it stops working! A lot more to come as the cost of energy starts to bite. Complete clowns!

This is an interesting little clip on the Whitehouse view of the 'transitory' inflation.

Seems like moneyweek agree. Inflation AFTER stripping out food and energy (which are massively up and really really matter) is still running at 4%. If the fed are using an astronomical timescale when they use the word 'transitory', then they're correct! But in any normal and practical timescale, this inflation is not transitory. https://moneyweek.com/economy/inflation/603991/inflation-isnt-transitory-but-what-does-that-mean-for-markets

They've been oversold for a while given the clear indications of inflation. How prolonged this reaction will be is anyone guess though. I still stand by my prediction of a rise by the weekly close.

Well it's certainly been slow to lift off that spike low, but even so I think we'll see a rise this week.

Bets for the week guys? Up, down, even?

Stagflation = stagnant economy + inflation. As distinct from buoyant economy + inflation. Todays job numbers in the US were disappointing again. But paradoxically, this can be seen these days as a good thing by the gamblers in the stock and currency markets; because bad news means that the fed will pump more juice. Yay! Back in reality though, actual inflation is definitely creeping in. It doesn't matter what the fed says about it being transitory, we all know that prices for just about everything are rising. They have been for a while actually but most people hadn't noticed, until the petrol and gas issues kicked in. Real energy prices are rising, mostly because of long term silly policies regarding generation, and everything is getting more expensive to produce and transport. A lot of damage has been done in the energy sector, and this is most certainly not transitory. It's going to take years to sort out the mess, and that's IF the politicians can grow a pair and stop pretending CO2 is a pollutant. No chance of that on the horizon so inflation is definitely coming from energy costs alone. Meanwhile, the economy is faltering due to other global issues bearing down on it (many self induced). The situation is now stagnant and inflationary. I know what you mean about divining anything useful from all of these "experts". But I can't see too much downside to holding onto most real assets during a period of inflation. Better than holding cash as we all get poorer and the central printers keep on printing. That's why I think the bottom is in for Silver. It's because it's in for most physical things.

Seems to me that with what looks like the dreaded stagflation starting to creep in (inflation everywhere but disappointing employment and economic activity), as other commodities rise, it's going to get harder and harder to knock silver down in the wee hours. I'm not expecting moonshots or much excitement over the next month or two. But I do think that a floor was finally put in last week and that the bears have had their fill.

Bringing us a little bit closer to being on topic (wrong currency I know), the price of silver in USD has now just risen above last week's close. Price in GBP is already strongly above last week's close but that's less important than the dollar close. Last week and yesterday it certainly looked bleak. Those pesky kids were at it again, taking out the stops before running for cover. But I still remain confident in my prediction last week, that the bottom will be in by the end of this week. As reiterated yesterday at the low, I expect to see a close above last week's.

The unmet demand is allegedly being satisfied with ancient bars which will soon run out! Bars which are over a hundred years old and therefore must be coming from the back of nearly empty vaults! Maybe this is true, and maybe it isn't, but it certainly makes a compelling and exciting story! All of the big moves in human affairs require a compelling story. A story which sounds true, and implies a secret that only a clever few possess. Stories like that can lure in vast numbers and change the course of history. Wars are fought over fictional WMD's that never existed, and huge profits are made producing cures for illnesses that are mostly harmless. Otherwise intelligent people, often get caught up in these powerful memes (Richard Dawkins original definition circa "the selfish gene") and in many ways it's one of the colourful things that makes life so interesting and exciting. The Silver bullion market certainly doesn't disappoint, and it has more than its fair share of compelling stories flying around. I must admit that I do enjoy reading them, and that I enjoy letting their tantalising intricacies play across my mind. But I always try to remind myself that Silver is just a plain old boring commodity these days, and it has absolutely nothing to do with being real money. The odd sparkle from time to time suggests that maybe one day it'll regain its former glory, but an older and wiser self tucks that idea away, knowing that only catastrophe will bring about that outcome. When I was younger I would have rated the chance of catastrophe as very very low. But there have been far too many other unrelated moves which are putting big fat fingers on those scales all across the world. I now rank catastrophe (in my lifetime) as medium risk, and this is why I possess physical. It's a hedge against an event I don't want to see. As I've said before, the system is so inherently corrupt now, that it's impossible to change it through political means. Very few people have the capacity to understand why the system is so corrupt, let alone vote for someone who might set it straight. Every single restraint on free market capitalism has slowly been subverted and twisted into rules and procedures that often resemble the complete opposite of their original protective intent. The merchant class now dominate every sphere of life, and they hold complete dominion over the west. This is why it's dying at such a rapidly increasing pace. There are no modern day Andrew Jacksons waiting to wrestle the ring of power off these vipers. Our political classes have ALL been bought up by the merchants and they have betrayed us. It's therefore simply a matter of time before complete collapse causes war and destruction. But things can struggle on for far longer than one imagines, and this is why I rank it only as medium risk in my lifetime. There's a very good reason why the merchant class have historically been regarded as one of the lowest in society all around the world. When kept in check, they provide a valuable service like many of the other classes, but allowed free reign and dominion, they devour a society from within, trading their way up to being gods. It's precisely because of their inherent greed, that some societies specifically retain their ancient usury laws. These laws provide a very real threat of capitol punishment for those who would attempt to steal their way to the top,

One obvious difference is that you're not allowed to insure your house 400 times! (or whatever the current ratio is said to be) Edit: Life assurance is of course different. As many people as wish can take out an assurance policy on a person. But that's because the event (death) is not just likely to be delivered, it's absolutely certain! It's therefore priced accordingly and doesn't risk bringing the whole system down. Insurance on the other hand is not expected to be delivered, which is why leveraging it up is unacceptable in law. The risk of contagion is deemed to be too large.

I'm certainly not for it. In an ideal world, the futures markets wouldn't be leveraged up with all those non deliverable contracts. And the paper spot market wouldn't be capable of drifting so far away from the physical market, because it wouldn't be two orders of magnitude larger than it. The whole point of futures markets in the beginning, was to smooth out production risk and allow farmers to sell their crops in advance, funding themselves throughout the year. It was essentially a loan from a buyer who wanted the product to be produced.. But these days, most of the contracts don't want to buy or sell the product. They're simply borrowing vast sums of money and dwarfing the real markets. They pay next to no cost for this pleasure because the interest rates are zero. There is no solving these issues calmly and sensibly. Only war and chaos now can unwrite a century of provisions written into code that allows for rapacious mercantile robbery. Pretty much all of the derivatives, in all classes now, have had their original intention usurped. None are fit for purpose these days. All you have to do is look at a few other commodities to see some real problems. Cocoa for example is a nightmare. Can't imagine how the poor farmers deal with it. They end up having to sell to middle men who then supply the chocolate companies, who short their market! Absolutely wonderful. It's real life or death stuff out there on the edge, caused by the very market that's supposed to smooth things out for them. Silver by comparison, is a few large spoof orders from time to time, smashing and grabbing in the quiet periods. The physical is still bought by consumers for real money, and life goes on. If it really does ever finally run short, we'll know about it when you can't buy any. People will finally start demanding delivery and the system will collapse. Not saying it's right, just recognising that the whole system is corrupt, and overloaded with leeches.

All paper markets are manipulated. It's a sad reality, but there's nothing particularly special about the manipulation in Silver. Yes it's annoying, but other commodities see highly leveraged, non-deliverable shorts, attempting to force their prices down. Some do it for an instant profit, others so that they can buy cheaper deliverable futures from legitimate producer sales. Some producers get squeezed into selling at a loss, just trying to keep going and pay the bills, with some eventually ending up going bust. Supply drops off and physical shortages mean that the paper price detaches from reality. In a healthy market, paper and physical would be closely correlated. But these types of problems are popping up everywhere. It's really about the financialisaton of everything. A huge industry has been built up around making money from producing no product or service for anyone but the trader. The futures markets were supposed to offer producers long term security, but instead they've become a casino for banksters and hedge funds. But even like this, Silver producers still use the futures market! And they still accept the poor prices for their product, because it offers some stability and the ability to choose ore grade in advance of production. They only abandon the paper markets when the discount becomes too crazy and they end up just accepting the physical rate on the day. When paper becomes that stretched from reality, buyers and sellers of physical are still trading. They just do it off exchange in private deals. If the demand is significantly higher than supply though, and there really is nothing left to deliver, then there's nothing on earth that can stop that from being expressed in their agreed physical price. Nothing! Take for example the newspapers recently complaining that petrol stations were gouging the poor motorist. It was seen as disgraceful that petrol stations were selling fuel at £2 a litre!! Clearly as supply ran short, the price went up. What's actually wrong with that??? In fact, I think it didn't go up quick enough, and not enough stations got round to raising their prices!!! If more of them had ramped the price up quickly, those who barely drive would've stayed at home rather than filling up both cars full. Just about everyone I know has a full tank of fuel now, and they're not going to need any more of it for a while. Prices will be back to normal soon in those independent stations. Everywhere you look, there's a battle between producers, retailers and users. It's been going on for centuries in the rice futures market, and it's not going to come to an end even if we abandon fiat currency. It's the nature of buying and selling for profit. Anyway, these days, Silver is essentially performing like a base metal. People might wish for it to perform as a monetary instrument, (myself included btw), but it's not going to until the day that fiat currency is completely destroyed in a hyper inflation catastrophe. Only then, when gold is too expensive for the masses, will Silver make a comeback. But those conditions for Silver to return to being precious, are highly unlikely in the current system. For now at least, it remains an industrial metal with a value essentially related to the cost of mining it, and to it's future scarcity as deposits wane. Silver regaining the glory days of being a monetary instrument is I'm afraid, just a pipe dream. Now, if they were to stop charging VAT on physical copper... and they started making lovely ten kilo Britannias... I'd be a copper bug in a heartbeat!!!

Let's see how the week finishes out. There seems to be a lot of bears around at the moment, but I still think (as I said last week) that this week will close flat or above it's open and that "the bottom will be in". Looks like a pretty strong push for the stops was made but gold has dragged silver back up by the scruff. I fully expected the dive for the stops. The coming close on Friday's going to be important.

I still think there's a good chance that this will be a spike low. A close for the week flat is what I predict. Could be wrong of course!

There are energy shortages coming all over the world. China has numerous blackouts right now, and the EU nations have significantly less gas stored than they did in previous years. Gas is going to be short this winter, which means gas reliant products will be short in the spring. The UK has a pathetic amount of storage capacity and it'll be really ugly if they use it up making electricity instead of heating homes. It's only something like 1-2% of annual usage, so we're going to be at the mercy of the prevailing price and unable to use it for making cheap electricity. I'm guessing that some here will regard worldwide increases in energy costs as "transitory factors", separate from the standard currency debasement, and therefore not inflationary. It seems to me as if some regard 'real' inflation as only ever coming from currency expansion. But if that's to be the stick by which the value of my pound is measured (which buys less energy to heat my home), it doesn't tell me very much. If my money buys me half what it did last year, I'm absolutely poorer for it, and the money in my pocket can be said to have lost its value. If that's not inflation, I don't know what is. If the objection is to calling transitory supply issues inflation, then there should have been equal objections to counting reduced energy prices when US fracking brought the price of oil down due to a glut. But there wasn't! Inflation fell and they juiced the pipeline with billions and billions. The objections to counting certain price changes seem to be only for certain rises and not for the falls. It strikes me that the whole explanation is just a con.

Keeping it on topic, a page or two back someone asked what the price of Silver would be this week? I'm betting higher and that by the the end of this week, the bottom will be in...

I meant no WESTERN country. The liberal order is entirely addicted to ponzi fiat scheme and will not be going back voluntarily. My point was that they may be forced to by the actions of others, either by concerted action economically or by war itself. The former is more likely, with control of energy being usurped from the now hopelessly crippled west because of climate guff. But the latter is certainly not out of the question. Pressure continues to build and at some point something will give.

Martlet is correct, no country will voluntarily move back to hard money. But war changes everything, and the losers will have their debts called in. We're already in the midst of a social civil war, with Western nations now in freefall and no sign of a soft landing. How long before an actual war?

The private / public banks are just fall guys, shells for the public purse to bail out. The real action takes place amongst the 'elite international crowd' who hang out in cliques such as Bilderburg and Davos. Numerous other groups exist where simply vast amounts of accumulated wealth and resources are controlled.

Level 2? None of the Tories are Brexiteers. They never have been. There were a few self interested types but none were real brexiteers. They all take their orders in clubs and meetings with the Davos/WEF crowd. They never expected the electorate to actually vote to leave. They're now deliberately gently sabotaging the British position, with the intention of irritating the electorate enough, to one day vote to be subsumed back into the EU. It's a terrible thing that they're doing, but there's no other explanation for the abortion of a job done with customs (and immigration) on the border. It's truly the most appalling deal which disadvantages the UK with the ENTIRE world now. They made our small sales customs position worse with the USA and the rest of the world, which they most certainly did not have to touch at all. lt's part of a non deal which hits VAT onto all sales and requires the seller to open accounts with the international customer's tax authority. It's the twisted dream of red-tape pen-pushers. Only a real leave government could resolve these issues, but there won't be one sadly. Globalist powers have breached the UK institutions already, and no amount of plebeian calls for self determination are going to change that. The only political option that we're all being herded towards, is a call to re join the unaccountable totalitarian block. Such a choice would be the final nail in our coffin.

Pretty heavy gunning at the open. Wonder if it'll form a spike low or if there's more to come? Must be pretty annoying for the longs that had their stops smashed. Same old game.