You may have noticed that the spot price of silver jumped another 20
cents yesterday. Take a few minutes to read these two interesting analyses
that recently ran
at
Gold-Eagle.com: http://www.gold-eagle.com/editorials_05/stein012706.html and, http://www.gold-eagle.com/editorials_05/murphy012806.html
In the latter article, it is noted that the silver 60 date lease rates
just went into an upright spike. This is a clear sign that alarm
bells have sounded at the COMEX and they are
trying desperately to suppress the galloping spot and futures silver
prices. (Some futures contracts are presently pushing $12 an ounce!)
But unless
the
COMEX
does a repeat of its 1979-1980 shenanigans and changes
the margin requirements for the futures market, then they won't be
successful at holding down the spot price of silver. I suspect
that a total desperation move like that won't happen until Kodak and
the other big industrial users start to whine. You can expect
that to happen once silver crosses the $40 mark. But by then it won't
matter. Even if they slap a 100% margin requirement on silver
futures contracts (like they did a quarter century ago, to stop
the Hunt Brothers , it will be too late. Why? Because by then, the
Generally Dumb Public (GDP) will have finally woken from their slumber
and will be swarming to their local coin shops to plunk down
some of their spare cash to get some 1 ounce silver rounds or pre-1964
junk silver. At that stage, "junk" silver will probably
be selling at 20+ times face value.
I predict that this market is going to completely get away from the
COMEX and Wall Street manipulators. Today (January 31st) they will
probably do their best to push the metals prices down temporarily. After
all, they wouldn't want to cast a bad light on either the President's
State of the Union address or upon Ben Bernanke's first few days
at his
new central bank job. They'll sell enough to keep the price down for
a few days or perhaps even for a few weeks, but inevitably it will
be like trying to stop a a rising tide. The mainstream media will
probably
refer to this as "Bernanke's
first management crisis." Given the fanciful underpinnings of
the U.S. Dollar (which has a REAL value that approaches ZERO), this
will doubtless be the first of several Volker-esque crises
for "Helicopter
Ben."
The futures markets for gold and silver are getting frantic. I suspect that
there will be a massive short squeeze in the near future. The run up in prices
may take all but us die-hard silver bears by surprise. Mark my words: Silver
could double in price and then double again, all within the span of a month,
once the perma-shorts realize that something has changed fundamentally and
they have to cover their short positions, fast. As I've mentioned
before, the silver market is very thin compared that of gold, and
hence tends to be more volatile. After a short term correction,
look for some volatile moves
upward in the near future!
Today's Daily Reckoning had
some extensive quotes from Dr. Kurt Richebächer.
Here is just a brief snippet:
"You know what amazes me most is that Americans have come to believe that
consequences
no longer exist. They think they can do whatever they want for as long as they
want...and nothing will ever go wrong." This is probably the first generation
of Americans to believe that savings don't matter. It is also the first generation
to believe that America
doesn't really need to make anything; it can buy what it needs from abroad. But
where will it get the money? "That's the thing," Dr. Richebächer
went on. "They think
the bubble
economy will never end, but bubbles always end. This one will end, too. And there
will be consequences, and not very pleasant ones. This is not
something the Fed can manage..."
The Gold-Eagle pundits summarized Dr. Richebächer's conclusion thusly: "According
to
Dr. Richebächer, our nation's "recovery" is largely a matter of
the short-term transference of money from people's home equity, secured and unsecured
loans and credit cards into consumer-level retail purchases - into the hands
of
financial institutions or the risky realm of
speculative investment."
If you have the time, read Dr. Richebächer's full report: "Your Choice: The Truth - Or The Consequences" See: http://www1.youreletters.com/t/332871/7796936/783705/0/
