winningtrader's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/946241/comments http://seekingalpha.com/currents/post/1032901?source=feed#comment-18947951 18947951 Fri, 17 May 2013 12:07:15 -0400 http://seekingalpha.com/article/1439831/comments?source=feed#comment-18922841 18922841 It is my view that the recent gold prices volatility (on the downside) was and continues to be organized by the FED. There are good reason why the FED would do that. The FED is the most profitable business in the world. In 2013 they will print ~ $1 trillion and that is all profit as their costs are zero. They can do that because they have monopoly over printing the global reserve currency. As every good monopolist knows, it is important to damage any potential competition as much as possible which is why the FED is attacking gold. I also notice that gold often gets hit around the time Bernanke speaks and I think that he is personally involved in that or whoever hits gold wouldn't do it at that time. On the day when gold collapsed in April somebody hit the futures market with an order to sell the equivalent of more than 400 tons of gold. No private entity can sell that type of size and even a public entity wouldn't trade in that way if they want to get the best price. For example, in 2009 the IMF sold 200 tons of gold to India but they negotiated the sale and didn't move the market at all. It is clear to me that whoever did the selling of the 400 tons of paper gold had no intention of getting a good price but wanted to move the market. The fact that the CFTC doesn't even look into something that looks like a blatant manipulation also tells me that the FED was involved.
Whether the FED makes or loses money on such transaction is irrelevant and they don't care. The FED ''produces'' $1 trillion per year and they can spend say $20 billion on interventions, if they want to. Such interventions are done to crush any potential competition and are used to advertize what the FED produces (dollars) with the added benefit of pushing people into equities and bonds. So, they would definitely do it.
The FED doesn't talk about god much but in 1993 Greenspan said ''where central banks stand ready to lease gold in increasing quantities should the price rise.". Also, former FED boss and Obama adviser Volcker said in 1973 "That day the U.S. announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake.". So, they are trying not to repeat the same mistake.
If only the West was involved, the FED would have a chance of achieving something but with the biggest buyers of gold being the Asians, the FED has no chance of succeeding medium term. The Chinese and Indians have seen that movie a lot of times and they understand. Gold buying there will only go up in size.
The current low prices will cause the miners to rethink their strategy and cut exploration and other costs. The resulting supply shock will take time to materialize but can have a significant effect. ]]> Thu, 16 May 2013 19:47:28 -0400 It is my view that the recent gold prices volatility (on the downside) was and continues to be organized by the FED. There are good reason why the FED would do that. The FED is the most profitable business in the world. In 2013 they will print ~ $1 trillion and that is all profit as their costs are zero. They can do that because they have monopoly over printing the global reserve currency. As every good monopolist knows, it is important to damage any potential competition as much as possible which is why the FED is attacking gold. I also notice that gold often gets hit around the time Bernanke speaks and I think that he is personally involved in that or whoever hits gold wouldn't do it at that time. On the day when gold collapsed in April somebody hit the futures market with an order to sell the equivalent of more than 400 tons of gold. No private entity can sell that type of size and even a public entity wouldn't trade in that way if they want to get the best price. For example, in 2009 the IMF sold 200 tons of gold to India but they negotiated the sale and didn't move the market at all. It is clear to me that whoever did the selling of the 400 tons of paper gold had no intention of getting a good price but wanted to move the market. The fact that the CFTC doesn't even look into something that looks like a blatant manipulation also tells me that the FED was involved.
Whether the FED makes or loses money on such transaction is irrelevant and they don't care. The FED ''produces'' $1 trillion per year and they can spend say $20 billion on interventions, if they want to. Such interventions are done to crush any potential competition and are used to advertize what the FED produces (dollars) with the added benefit of pushing people into equities and bonds. So, they would definitely do it.
The FED doesn't talk about god much but in 1993 Greenspan said ''where central banks stand ready to lease gold in increasing quantities should the price rise.". Also, former FED boss and Obama adviser Volcker said in 1973 "That day the U.S. announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake.". So, they are trying not to repeat the same mistake.
If only the West was involved, the FED would have a chance of achieving something but with the biggest buyers of gold being the Asians, the FED has no chance of succeeding medium term. The Chinese and Indians have seen that movie a lot of times and they understand. Gold buying there will only go up in size.
The current low prices will cause the miners to rethink their strategy and cut exploration and other costs. The resulting supply shock will take time to materialize but can have a significant effect. ]]> http://seekingalpha.com/article/1328491/comments?source=feed#comment-17420701 17420701 Tue, 09 Apr 2013 17:31:44 -0400 http://seekingalpha.com/article/1324761/comments?source=feed#comment-17370171 17370171 Mon, 08 Apr 2013 15:54:09 -0400 http://seekingalpha.com/article/1327771/comments?source=feed#comment-17369991 17369991 Silver eagles sold in April 2012: 1.52 million.
Silver eagles sold from April 1 to April 8, 2013: 1.645 million ....in just 1 week.]]> Mon, 08 Apr 2013 15:51:32 -0400 Silver eagles sold in April 2012: 1.52 million.
Silver eagles sold from April 1 to April 8, 2013: 1.645 million ....in just 1 week.]]> http://seekingalpha.com/currents/post/930531?source=feed#comment-17365451 17365451 Mon, 08 Apr 2013 14:17:08 -0400 http://seekingalpha.com/article/1325511/comments?source=feed#comment-17341181 17341181 Mon, 08 Apr 2013 03:24:12 -0400 http://seekingalpha.com/currents/post/929581?source=feed#comment-17340711 17340711 Mon, 08 Apr 2013 03:10:39 -0400 http://seekingalpha.com/article/1324441/comments?source=feed#comment-17340571 17340571 Mon, 08 Apr 2013 03:04:44 -0400 http://seekingalpha.com/article/1324761/comments?source=feed#comment-17328611 17328611 This idiot Greenspan is 87 and they still show interviews with him and listen to his nonsense.]]> Sun, 07 Apr 2013 16:52:55 -0400 This idiot Greenspan is 87 and they still show interviews with him and listen to his nonsense.]]> http://seekingalpha.com/article/1324761/comments?source=feed#comment-17328531 17328531 Stay away from silver futures as we are likely to eventually see a force major with cash settlements being forced upon obstinate longs at prices that suit J.P.Morgan. This is my view but of course people need to do their homework and make up their mind.]]> Sun, 07 Apr 2013 16:48:12 -0400 Stay away from silver futures as we are likely to eventually see a force major with cash settlements being forced upon obstinate longs at prices that suit J.P.Morgan. This is my view but of course people need to do their homework and make up their mind.]]> http://seekingalpha.com/article/1324761/comments?source=feed#comment-17314831 17314831 On the economy I can say that nothing good has come out. Food stamps are at record high and the labor participation rate is the lowest since 1979. The only good thing is the stock market going up and up. My belief, and I have no proof, is that the government is buying shares to boost the market. I think that this is not the FED but the so called Plunge Protection Team (set up by Reagan and yes it does exist). On the other hand, the FED is doing the dirty job of suppressing precious metals prices. In that ''noble'' task they use J.P. Morgan (also known as the FED's bank), the BIS and even selected hedge funds. The silver element is mostly J.P. Morgan playing their dirty games on the Comex but this is only paper trading. The want to put a permanent negative ''Pavlovian'' sentiment in place so that people don't buy. It doesn't seem to be working as the demand for silver coins at the US Mint is up 40% YOY. I think that the clever thing would be to allow prices to go up, make big noise about the metals being a bubble and make the market volatile. This would discourage some buyers, at least for the time being. Right now they are running the risk of being overrun by a tidal wave as they don't have much silver (or gold) to deliver on the Comex and the US Mint is clearly not able to get silver on time. The US uses a lot of silver as it is an industrial metal as well but produces (from mining) an amount that is not going to be enough to even mint the coins sold at the US Mint. Even to produce coins, the US has to import silver and when you add all other applications of silver, the imports become very big. Silver is a strong buy at these levels and the supply/demand situation is very bullish.]]> Sun, 07 Apr 2013 04:14:29 -0400 On the economy I can say that nothing good has come out. Food stamps are at record high and the labor participation rate is the lowest since 1979. The only good thing is the stock market going up and up. My belief, and I have no proof, is that the government is buying shares to boost the market. I think that this is not the FED but the so called Plunge Protection Team (set up by Reagan and yes it does exist). On the other hand, the FED is doing the dirty job of suppressing precious metals prices. In that ''noble'' task they use J.P. Morgan (also known as the FED's bank), the BIS and even selected hedge funds. The silver element is mostly J.P. Morgan playing their dirty games on the Comex but this is only paper trading. The want to put a permanent negative ''Pavlovian'' sentiment in place so that people don't buy. It doesn't seem to be working as the demand for silver coins at the US Mint is up 40% YOY. I think that the clever thing would be to allow prices to go up, make big noise about the metals being a bubble and make the market volatile. This would discourage some buyers, at least for the time being. Right now they are running the risk of being overrun by a tidal wave as they don't have much silver (or gold) to deliver on the Comex and the US Mint is clearly not able to get silver on time. The US uses a lot of silver as it is an industrial metal as well but produces (from mining) an amount that is not going to be enough to even mint the coins sold at the US Mint. Even to produce coins, the US has to import silver and when you add all other applications of silver, the imports become very big. Silver is a strong buy at these levels and the supply/demand situation is very bullish.]]> http://seekingalpha.com/article/1324671/comments?source=feed#comment-17304251 17304251 Sat, 06 Apr 2013 13:26:40 -0400 http://seekingalpha.com/article/1324441/comments?source=feed#comment-17295791 17295791 Japan is likely to experience a very sharp financial crisis in 2 to 5 years at most. The fact that they have a high standard of living now doesn't change the fact that they are totally bankrupt as a country. Argentina used to be one of the richest country in the world and look at them now. The yen is toast.]]> Sat, 06 Apr 2013 06:01:28 -0400 Japan is likely to experience a very sharp financial crisis in 2 to 5 years at most. The fact that they have a high standard of living now doesn't change the fact that they are totally bankrupt as a country. Argentina used to be one of the richest country in the world and look at them now. The yen is toast.]]> http://seekingalpha.com/article/1321731/comments?source=feed#comment-17295751 17295751 Sat, 06 Apr 2013 05:56:14 -0400 http://seekingalpha.com/currents/post/928911?source=feed#comment-17295671 17295671 Sat, 06 Apr 2013 05:35:32 -0400 http://seekingalpha.com/article/1323841/comments?source=feed#comment-17295631 17295631 Volcker said that the mistake in the 70's was allowing gold prices to go up so much. They are following this logic and have been able to fool the Western masses. There is no chance in hell they can convince the Asians who have seen the same crap before many times. The idea is to introduce permanent negative sentiment in the market and push people into stocks and real estate. The problem is that sentiments are never long term and change rapidly. In the case of silver, the demand for silver coins at the US Mint is up 40% YOY in the face of the obvious manipulation. This is basic Economics 101 with low prices attracting demand from people looking to preserve their purchasing power.]]> Sat, 06 Apr 2013 05:29:57 -0400 Volcker said that the mistake in the 70's was allowing gold prices to go up so much. They are following this logic and have been able to fool the Western masses. There is no chance in hell they can convince the Asians who have seen the same crap before many times. The idea is to introduce permanent negative sentiment in the market and push people into stocks and real estate. The problem is that sentiments are never long term and change rapidly. In the case of silver, the demand for silver coins at the US Mint is up 40% YOY in the face of the obvious manipulation. This is basic Economics 101 with low prices attracting demand from people looking to preserve their purchasing power.]]> http://seekingalpha.com/article/1324441/comments?source=feed#comment-17295581 17295581 Sat, 06 Apr 2013 05:10:46 -0400 http://seekingalpha.com/article/1324381/comments?source=feed#comment-17286541 17286541 Fri, 05 Apr 2013 18:12:50 -0400 http://seekingalpha.com/article/1323441/comments?source=feed#comment-17286051 17286051 Fri, 05 Apr 2013 17:58:57 -0400 http://seekingalpha.com/article/1322981/comments?source=feed#comment-17282091 17282091 The supply/demand for silver is very bullish medium term and I am convinced that we are going to see shortages. Don't forget that 70% of all silver supply is used by industry and only ~325 million ounces are available for investment. The reason why J.P. Morgan and friends keep crushing prices on the Comex is because they want to put a permanent negative sentiment in place. The problem with this is that it is not going to work on the Asians and also such sentiments are never permanent and can reverse in a few short weeks. Their strategy is doomed medium term.]]> Fri, 05 Apr 2013 16:19:09 -0400 The supply/demand for silver is very bullish medium term and I am convinced that we are going to see shortages. Don't forget that 70% of all silver supply is used by industry and only ~325 million ounces are available for investment. The reason why J.P. Morgan and friends keep crushing prices on the Comex is because they want to put a permanent negative sentiment in place. The problem with this is that it is not going to work on the Asians and also such sentiments are never permanent and can reverse in a few short weeks. Their strategy is doomed medium term.]]> http://seekingalpha.com/article/1323441/comments?source=feed#comment-17280891 17280891 - The FED prints $ 85 billion per month and we don't even need to talk about the BOJ, ECB or BOE as they also print like there is no tomorrow.
- The $8.9 billion is the amount available for the entire world, not just the US and Asia and other EM regions just love silver.
- The US has ~$1 trillion budget deficit and ~ $600 billion of current account deficit. This puts the tiny $8.9 billion into perspective.
- At current pace of purchases of silver coins at the Mint, all US production of silver will not be enough and silver will need to be imported to mint coins. Of course, the US will also need to import more silver as silver is in everything: i-phones, tv screens, cars, medical equipments and jewelry. Also, investors don't just buy coins but also bars and ETF's - more silver to be imported.
- China has $3 trillion of FX reserves, mostly dollars, and they are bearish on the dollar long term. They are desperate to diversify into hard assets but they are doing this cleverly trying to get the best prices possible. China is very bullish on precious metals and one should remember that silver was the primary currency in China for several hundred years, so the population loves silver.
The current low price of silver is due (in my opinion) to JP Morgan and some of their friends playing crooked games on the Comex with the blessing of the FED. They have been very successful at suppressing prices but this is temporary and will not work medium term. The low price of silver has really hurt miners as their cost inflation is more than 10% per year and some primary silver miners are not going to have any profits at current prices. Primary miners produce 1/3 of all silver with the rest coming as a bi-product of base metals mining (recycling is separate and will also be affected by lower prices). Miners will focus on cost cutting and are increasingly under pressure to cut new projects. This will lower supply of silver over time and can have a long term effect as mining projects take years. The declining quality of silver ore will also add to that.
My conclusion is that the dynamics in the silver market are very bullish. I think that J.P. Morgan and whoever is behind them simply defend the wrong levels for silver (and also gold) and will, over time, be overwhelmed by demand. While western central banks have some gold to sell and help the bankers shorting gold, they don't have any silver and can only short futures and other paper contracts which can only have a temporary effect on prices. $8.9 billion is an amount that a single very rich person can spend to buy all silver available for investment in the entire world and due to the money printing out there more and more people will turn to silver as a trusted store of value. Prices are going to triple digits but will be very volatile on the way. Also, we are likely to see a default on the Comex exchange but they will use a nicer word to describe it and blame the speculators. We are likely to see a Silver whale at J.P. Morgan (remember the London whale). This scenario will play out over the next several years with crazy ups and downs, just my view.]]> Fri, 05 Apr 2013 15:51:19 -0400 - The FED prints $ 85 billion per month and we don't even need to talk about the BOJ, ECB or BOE as they also print like there is no tomorrow.
- The $8.9 billion is the amount available for the entire world, not just the US and Asia and other EM regions just love silver.
- The US has ~$1 trillion budget deficit and ~ $600 billion of current account deficit. This puts the tiny $8.9 billion into perspective.
- At current pace of purchases of silver coins at the Mint, all US production of silver will not be enough and silver will need to be imported to mint coins. Of course, the US will also need to import more silver as silver is in everything: i-phones, tv screens, cars, medical equipments and jewelry. Also, investors don't just buy coins but also bars and ETF's - more silver to be imported.
- China has $3 trillion of FX reserves, mostly dollars, and they are bearish on the dollar long term. They are desperate to diversify into hard assets but they are doing this cleverly trying to get the best prices possible. China is very bullish on precious metals and one should remember that silver was the primary currency in China for several hundred years, so the population loves silver.
The current low price of silver is due (in my opinion) to JP Morgan and some of their friends playing crooked games on the Comex with the blessing of the FED. They have been very successful at suppressing prices but this is temporary and will not work medium term. The low price of silver has really hurt miners as their cost inflation is more than 10% per year and some primary silver miners are not going to have any profits at current prices. Primary miners produce 1/3 of all silver with the rest coming as a bi-product of base metals mining (recycling is separate and will also be affected by lower prices). Miners will focus on cost cutting and are increasingly under pressure to cut new projects. This will lower supply of silver over time and can have a long term effect as mining projects take years. The declining quality of silver ore will also add to that.
My conclusion is that the dynamics in the silver market are very bullish. I think that J.P. Morgan and whoever is behind them simply defend the wrong levels for silver (and also gold) and will, over time, be overwhelmed by demand. While western central banks have some gold to sell and help the bankers shorting gold, they don't have any silver and can only short futures and other paper contracts which can only have a temporary effect on prices. $8.9 billion is an amount that a single very rich person can spend to buy all silver available for investment in the entire world and due to the money printing out there more and more people will turn to silver as a trusted store of value. Prices are going to triple digits but will be very volatile on the way. Also, we are likely to see a default on the Comex exchange but they will use a nicer word to describe it and blame the speculators. We are likely to see a Silver whale at J.P. Morgan (remember the London whale). This scenario will play out over the next several years with crazy ups and downs, just my view.]]> http://seekingalpha.com/currents/post/927761?source=feed#comment-17275751 17275751 Still, the BOJ is likely to win the currency war, at least at first, and totally trash the JPY.]]> Fri, 05 Apr 2013 14:04:11 -0400 Still, the BOJ is likely to win the currency war, at least at first, and totally trash the JPY.]]> http://seekingalpha.com/currents/post/925871?source=feed#comment-17212881 17212881 Thu, 04 Apr 2013 11:02:37 -0400 http://seekingalpha.com/article/1318231/comments?source=feed#comment-17182081 17182081 Wed, 03 Apr 2013 16:06:41 -0400 http://seekingalpha.com/currents/post/924141?source=feed#comment-17181821 17181821 Wed, 03 Apr 2013 16:01:32 -0400 http://seekingalpha.com/article/1318231/comments?source=feed#comment-17181601 17181601 Wed, 03 Apr 2013 15:56:36 -0400 http://seekingalpha.com/article/1271551/comments?source=feed#comment-16293951 16293951 Thu, 14 Mar 2013 16:18:50 -0400 http://seekingalpha.com/article/1270821/comments?source=feed#comment-16251261 16251261 Wed, 13 Mar 2013 19:25:23 -0400 http://seekingalpha.com/article/1271391/comments?source=feed#comment-16250981 16250981 - subprime lending back in full force in car loans (at all time high).
- subprime lending back in housing.
- pensions underfunded by as much as 50% or more.
- student loans at record default levels and record amounts.
The subprime lending is supporting car sales (just like it helped housing before) and is also playing a smaller role in housing (again). Student loans support overpriced educational institutions. And when you pay 10,000 for a day in a hospital, it is clear how much money the medical businesses suck out of the economy. All this is going to come crashing down again in the next 2 to 5 years, no more in my view. The FED will have to bail out the same guys again with printed money. Japan is in much worse shape and likely to blow up soon ... give or take two years. Europe is doing some things better by trying to cut government spending in the corrupt and profligate PIIGS but doesn't look it is working so well. The issue with $, £, EUR and JPY is that one day some lunatic central banker could decide to print say 15 trillion in any of these currencies ''to help the economy'' and by doing so will impoverish the people who have saved all their lives. This is why you can't really keep your savings in that crap.]]> Wed, 13 Mar 2013 19:16:44 -0400 - subprime lending back in full force in car loans (at all time high).
- subprime lending back in housing.
- pensions underfunded by as much as 50% or more.
- student loans at record default levels and record amounts.
The subprime lending is supporting car sales (just like it helped housing before) and is also playing a smaller role in housing (again). Student loans support overpriced educational institutions. And when you pay 10,000 for a day in a hospital, it is clear how much money the medical businesses suck out of the economy. All this is going to come crashing down again in the next 2 to 5 years, no more in my view. The FED will have to bail out the same guys again with printed money. Japan is in much worse shape and likely to blow up soon ... give or take two years. Europe is doing some things better by trying to cut government spending in the corrupt and profligate PIIGS but doesn't look it is working so well. The issue with $, £, EUR and JPY is that one day some lunatic central banker could decide to print say 15 trillion in any of these currencies ''to help the economy'' and by doing so will impoverish the people who have saved all their lives. This is why you can't really keep your savings in that crap.]]>