Silver and the Single Dude

100 oz Silver BarI’m the last guy that ever though he’d write a financial article but after hanging out with Boris and el Matador over the years I’ve taken an increasing interest in the subject. These days I never bother going to shitty movies like Avatar any more because those unimaginative hacks in Hollywood just repackage the same tired story with the same talentless actors over and over. For me nowadays my true entertainment is the slow motion train wreck that is today’s world financial system.

I hope you had the time to read Boris’ article on investing in gold when it came out. Since that article came out on July 8, the price of gold has gone through the roof, from a little over $1600 to a high of over $1900 and is currently $1833.70 at last check. I listened to Boris, did you?

Gold is not the only precious metal out there worth looking at as an investment for the single dude. Silver has also been long used as a basis for monetary systems and is much cheaper than gold, at around $42 an ounce. Silver for the most part stayed put during this latest “holy shit” historical rise in the price of gold.

The reason gold is being bid up so high has to do with the world’s growing distrust of the financial system and the growing possibility of extreme or hyper inflation of the US dollar and other major currencies. This is all largely due to the Fed manipulating interest rates to zero and printing money like a crack addict pawning his family’s prized possessions. Gold bugs are seeing gold as a true way to store wealth while boycotting the crooked modern financial system. When the shit hits the fan, as it inevitably will at some point, gold will still hold its value while the US dollar will not be worthy of wiping your ass with.

So why is silver not joining gold on this meteoric rise? The reason is further proof that the “free market” the politicians preach about as the supposed solution to all our problems does not actually exist. Quite simply, the whole silver market is being manipulated by the big bad guys and the price of silver is being artificially held down. There’s some pretty convincing proof in the numbers that the corporate bad guys are in fact holding down the silver price too.

For example look at the long interest versus short interest in gold and silver. According to the excellent blog, Silver Gold Silver, on the 20th of August the long and short numbers on silver were as follows:

In the large spec side in GOLD we see a long to short ratio of (long 264K, short 64K)of 4:1. For every 4 long contracts the large spec buys, he is short one too.

In the silver arena their ratio is (32.5K long, 11K short) 3:1 long bias

Now lets look at the polar opposite.

In the Commercial side, such as JPM et al. on the GOLD side they are long 160.5K and short 410K. LOL. This ratio of SHORT to long is 2.5:1. FOR EVERY GOLD CONTRACT LONG (WANTING TO GO UP) the MORGUE adds 2.5 shorts to it (wanting to go down). Hummm biased. I wonder if their clients know they are this bias towards the ONLY asset class that has returned 20% profits over the last 10 years. And they are short 2.5:1 on it. Makes sense.

Now in the silver arena, we see nothing different, and the trend continues. The Commercials are long 34.5K and short 75K. For a ratio of SHORT to long of 2.2:1

So what that means is that the big banker guys are shorting gold and silver big time. These guys are not stupid. They know what a bullshit house of cards this economic mess we’ve created for ourselves is. It also is becoming more and more clear that the paper market for gold and silver has many, many more pieces of paper that purportedly represent gold and silver than gold and silver actually exists. There is enormous fraud in the gold and silver paper markets and some suggest for every real gold ounce there are 20 or more fraudulent paper gold ounces being traded on the market. This is why at Single Dude Travel we insist that your long term investment strategy must require physical delivery of your precious metals. Make sure you can hold that shit in your hands.

All of this means that once more people start asking for their actual physical metal instead of paper certificates (like Hugo Chavez of Venenzuela just did), there is going to be a real shortage of actual gold and silver to send to these creditors, and the fraud in this market will be exposed. The real price of physical metals will go up like a rocket ship while the paper values crash and burn. It is only a matter of time before this market melts down like a fat American chick’s extra large bowl of Rocky Road at the Omaha County Fair. Hurry up and finish your corn dog, honey, you’re ice cream is melting!

The price of gold seems more difficult for the bad guys to manipulate than silver, perhaps due to higher demand for it as a monetary instrument as compared to silver which is also an industrial metal. They certainly do do it from time to time by raising margin requirements and creating excess short interest. The problem for them is that much of the rest of the world, such as the Indians and the Chinese actually know what’s going on and have bought shitloads of gold already. It’s impossible to stop this gold freight train before it smashes into the paper market full tilt. Silver, however, has been easier to manipulate. The relationship between the price of gold and silver historically tends to stay around 16-to-1. It is currently nearly 44-to-1. What gives? Is gold too high or silver too low? I say silver is too low because of the rampant manipulation of the market.

But if they are manipulating the market, why are they doing it? This is a question that I’ve been mulling over lately and until recently I have not been able to come up with an answer that makes any sense. The most reasonable answer I’ve heard from anyone to date is something along the lines the lines of: “The powers that be are aware (they are not dumb guys) that the system is coming down and in an attempt to keep the party going as long as possible they are holding the metals down as much as they can.”

Ok, that sounds reasonable, but a little incomplete. If that’s true, they know that the end is coming as well as that there will be an inevitable short squeeze on silver which will crush the big silver shorts like JP Morgan. This scenario also doesn’t account enough for the personal greed of the individuals who work for these companies. So what else could it be?

Another possibility is due to the fact that silver has lots of industrial applications such as photography, batteries, bearings, medical, solar energy, computers and other high end end electronics to name a few. So maybe the powers that be are expecting a Mad Max type scenario where all industrial production stops or is severely curtailed and the demand for silver drops off. Ok, maybe, but that also seems farfetched. Most likely, the world will not immediately descend into cannibalism and Cormack McCarthy style dystopia, therefore it also seems unlikely that JP Morgan is betting the farm on us all riding around in armed convoys with face paint and leather helmets.

I’ve been confused for a while about what would be their game on silver. Enter the silver bears.


http://www.youtube.com/watch?v=eJlzhnZMChY&feature=player_embedded

First of all, well played, sir, that is as good of a comeback to a momma joke as you can get. Moving on to the substance of the video, there is some good gossip on this video.

The best gossip on this video regarding metals is the allegation that the big silver players are bypassing the dealers and going straight to the mines for their physical silver. Hmm… So why would they do that? Well, maybe they know how fraudulent all these silver “certificates”, ETFs and other paper investments really are. This market, along with the entire derivative market is going down like a Bulgarian chalga slut on a mafia douchebag in his $500,000 Mercedes on their ride around the block outside the club. But if they artificially keep the price down long enough to go down to the mine and get the physical, when the market blows up, how much will their physical be worth then?

Lots and lots.

So there’s my theory. Those Wall Street firms are pretty much a free for all. The number one goal for each individual one of those motherfuckers is to make as much money as possible and get it safely out of the country and into their foreign safety deposit boxes or offshore bank accounts before the music stops. Joe Asshole at Goldman Sachs isn’t working 90 hour weeks trying to make Goldman money, or his clients money, or America richer. He’s looking out for himself, his little squid family, his coke connection, and his mistresses.

Silver is perhaps the bad guys’ last escape plan. They’re enjoying this one last little buying opportunity before the end comes. How many ounces will buy a private island in Greece after the fiat system collapses making Euros and the Dollar is worth less than the paper it’s printed on?

Never underestimate the greed and lack of concern for humanity on Wall Street. Just follow the money and you’ll understand why everything happens.

Charlie Bushmeister

Call me Charlie. I decided to join with others to write this blog because I feel that I have learned a lot about how to succeed in life in general. It took a lot of trial and error and I've developed a wealth of philosophies, skills, and tricks of the trade that would be very useful to like minded guys out there. There's no need to repeat my mistakes, of which I have made many, instead I urge you to read this blog, absorb and practice its lessons, and then go out and have the most awesome life, on your own terms. To me that means good health, success in your career, the number and type of relationships you want, and general satisfaction that you're not wasting your life spinning your wheels, but going forward always towards your goals.




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