I came across a piece on 321gold.com this weekend. I felt it deserved
a rebuttal. The piece was written by “Anonymous”.
Man I wish this anonymous individual would put his name behind his statements
so that his credentials and market “calls” can be independently verified.
So as we have it, STRIKE 1 against this character who spews his/her missive
against the silver manipulation theory.
So let’s
dissect Mr. or Mrs. Anonymous’ missive to see if it has any credibility
and or merit. Let’s start with this part of his rant:
“I'm tired of
hearing about "manipulation." That's all these cheerleaders talk
about when the market drops.
All these people make
their living and their fortunes based on a silver boom. While much of their
thoughts are constructive and informative, one has to be careful basing one's
investment choices on the comments and perspective of those who profit from
increased buying participation.
Back to
"manipulation". None of these characters said "lighten
up" when we reached 50 bucks. Despite silver being overbought, by
various measures, to the degree I'd continually pointed out, raising caution
(NOT that I was calling a top or suggesting selling everything, but I
suddenly WAS suggesting not buying a stick more of silver at that point),
these pundits NEVER say anything but "BUY."
Let’s see. By “characters” does he
mean Bart Chilton of the CFTC who said on the record that he felt that there
was manipulation going on in the silver market? I wrote a piece back in March in which I said that the silver manipulation complaints were worth
looking into. In that piece I highlighted a New York Times piece that chronicled the whistleblowing efforts of Andrew Maguire
which in turn led Bart Chilton to state on the record that he believed there
had been “fraudulent efforts” to “deviously control”
the silver price. He did not name any party. Soon after however, lawsuits
were brought against JPMorgan and HSBC. Further lawsuits are being
contemplated. As for this anonymous writer crying that he or she is tired of
hearing about manipulation when the market drops better take a reality pill.
Cries of manipulation have been coming since $5.00 silver and were always
present during the rise up to the recent highs. Manipulation wasn’t the
buzz word on the way down during this correction so much so that it was being
openly discussed and argued during the days when silver was being suppressed
and during the rise. The writer better check his facts on this one because he
also failed to mention that the folks over at GATA (Gold Anti
Trust Action Committee) have been calling the silver market rigged
since long before the metal started its bull run)
To the third paragraph of the highlighted statement
above; “None of these
characters said "lighten up" when we reached 50 bucks”.
It would be nice to know who the characters that he is referring to are. Are
they the “characters”
who have been fighting the silver fight since the $5.00/ounce days or are
they the characters that got on the bandwagon at $45.00 such as the “self proclaimed experts” that CNBC started trotting
out once the price exceeded $40.00? The writer continues to indicate the he
continued to point out how the price of silver was overbought and that he/she
was raising caution. Again I ask, who is this masked individual claiming to
have called the the intermediate top and suggested
people should lighten up? This person also makes no distinction between what
pundits he is referring to. Many of the pundits I follow and have followed
personally for the last 5-7 years never scream buy. They simply set out the
facts as to why silver is undervalued. The ones the scream
buy are again the ones that find themselves on morning talk shows or
who probably charge for subscription newsletters. Without any information
these statements are unfounded.
This ghost writer then continues;
Now, after a huge drop,
instead of saying "we should have advised, at minimum, caution",
they angrily blame "manipulation", as if
- They never expected it, so just keep buying,
and
- They never expected margin increases on $50
silver (granted fast and furious ones, but guess what else was fast and
furious? Silver's
rise.
- Investors that lost money on the drop, buying
near the top on endless encouragement - hey, don't blame them for
encouraging the buying - JOIN THEM - in expressing great anger at
"the manipulators" (anger doesn't put the money back into your
pocket).
Everyone expected a correction in the silver price.
Anyone that didn’t was a fool. However, most of the real experts in the
silver game are not into investing in silver for a 3 month flip. Most of the fundamentals in place for
silver are longer term. Sure; if you are trading the metal then it
would have been advisable, just like a stock, to take some off the table but
if you are really in it for the fundamentals, then the longer term outlook
should not be affected by the short term price fluctuations. What was a gold
investor to do over the last 10 years? Throw him or herself
over a bridge? The longer term fundamentals that suggest higher prices are in
store for silver.
I’m curious as to why this writer
doesn’t point out the significant distortion between the “paper
price” for silver and the “physical price”, of which the
latter is still commanding hefty premiums. I suggest the writer take a course
between what paper vs. physical really means. Then again, we can’t
check his “claims” because he doesn’t post any links and
doesn’t provide his name. He just claims “after the fact”
that he called it.
He says that investors never expected a margin
increase at $50.00 silver. Silver investors DID expect a margin increase. I dare this individual to find one
person that expected 5 margin increases in the span of 8 trading days.
This fool speaks as though silver has suddenly been
found in droves or that there suddenly is no supply/demand issue anymore. He
or she speaks as though the world has no more use for silver. Do us all a favour and review the data on above ground consumption
and availability before coming off as though silver will never see $50.00
again. It is no different than stock market pundits calling for continued
rises in prices. I ask; how many corrections of 10% or more have we had in
the stock markets since the bottom in 2009? Then, you tell me if you sold on
those corrections or if you used those opportunities to buy more stock IF YOU
FELT that the market’s continued direction was higher.
Which brings me back to manipulation. One margin hike or two I would understand. 5 in 8 trading days
done so swiftly as to take everyone holding a contract out of the game is
unheard of. Tell me where the regulators were as the stock market was
climbing insane amounts during it’s
rise since 2009 almost on a scripted basis? Are you starting to get the
picture? Then there is the curious case of the mysterious put options placed
on silver that are still unexplained. Please read my post about suspicious
trades that seemed to correlate perfectly with
the margin increases and the prices needed for the trades to make money. How
can one NOT suspect manipulation
when such facts are staring you in the face? Was it manipulated? Who knows?
Does something look fishy? Yes.
The writer then tries to draw some distorted
parallel to Google. What?? Google?
What does the price of Google have to do with the fundamentals behind silver?
I sure as heck don’t know but let’s look at his/her reasoning.
(By the way if this individuals silver knowledge isn’t by now in doubt,
then tell me what more proof you need)
“Note that it
(Google) had risen from 100 to 500 from 05 to 06, and then dropped from 500
to 300 in 06, a loss similar to the current silver drop.
WAS IT FREAKIN
MANIPULATION? DID THE GOVERNMENT, THE MOSSAD, THE CIA, THE
"BANKSTERS" DO THIS TO GOOGLE?
Maybe a little, maybe
to some degree. But maybe - and mostly, this is how the market works,
overbought leads to corrections, regardless of "Duh Dollar," or
what "Duh Dollar fundamentals say" (they dictate the longer term price
direction and scope).”
For starters, as I made reference to above, the case
for silver’s manipulation was being made and argued when silver was still being supressed at $5.00 an ounce. IF
Google stock had spent years languishing at $75.00 when the fundamentals
called for higher prices and then it finally broke out, the similarities
could be made. But the writer is attempting to argue apples with oranges.
This is where the writer loses even more credibility.
You can not draw a
comparison between an internet company and a precious metal/commodity. Both
of them work with different metrics. Google doesn’t need to worry about
how many internet users suddenly use Google every year and fear that the
amount of newborns entering the internet age is falling in line to how many
users there are. Silver is a mined commodity and if you look at the stats I
compiled in my report about why silver was still a good long
term investment, you will see what I mean. Silver
vs. Google? I’m still shaking my head.
This writer with no name or website concludes:
But I also realize the
need to "think for one's self " and not
become part of a herd - even an "anti-establishment" herd.
Like I said - when
you've lost a substantial amount of equity, it doesn't matter whether it was
due to investing in "widgets" or silver - or due to manipulation or
not - it's just as lost either way.
Which brings me to my closing point. This individual appears to be someone who took out a major
position in silver near the highs and is now kicking and screaming because
their investment is underwater. This sounds like an individual who
listened to the wrong people and bit off a little more than he/she can chew.
This individual comes on to the scene with a piece
claiming this and that, with no backlink or website where one can verify
his/her claims and comes on to the scene kicking and screaming like a little
child without having
grasped the fundamentals of silver investing. Not trading
folks…INVESTING.
– There is a huge difference!
He claims to have been a silver bull saying;
"Meet the new
boss,
Same as the old
boss".
Please don't think that
Sprott et al are selfless, purists, crusaders for
justice.
As silver becomes
"an industry", they are merely "the new boss", seeking
their turn at maximum gain. It's just "their thing", and they're
going to promote the shit out of it no matter what.
I can be considered an
uninterrupted silver bull since the late 70's with silver at 4 bucks, and
again in the late 90's with silver at - - 4 bucks.
I realize the potential
and invest heavily with long-term positions”.
Sprott
has been a precious metals bull for as long as I can remember and has never waivered even when gold corrected during its massive bull
run. Sprott isn’t in it to rip off some small
time investors looking to invest in precious metals. And how can this
character claim to be an uninterrupted silver bull since the late 70’s
with “silver at $4.00” and again the late 90’s with
“silver at 4 bucks” and then go off on a tirade when silver
suffers it’s first
correction since the bull market started? If he claims to be such an astute
silver bull then he knows that these ebbs and flows come with the game. Can
you tell us when in the late 70’s you are referring to because the late
70’s saw silver well above $4.00. (See table)
He says he realizes the potential and invests
heavily with long term positions but then cries as he concludes his piece.
Again, I claim that this person is a bitten
investor, not a long term silver bull as is claimed because if this
person really was a long term silver bull and invested with long term
positions then the “trade at $50.00” would not have
mattered to him/her now would it? If this person is a real long term silver
bull then this person should be “buying
the f-ing dip!” instead of
crying about a short term correction.
STRIKE THREE YOU ARE OUT. This person is either a
long term investor and bull as claimed or got hoodwinked into entering the
game at $45.00 and now feel the need to point the finger at someone. The
story, facts and information doesn’t make sense. I point to the latter
scenario. Someone who got shaken out, received a
margin call or simply got spooked. Any longer term fundamental silver bull is
not crying right now…they are buying.
Myself,
as a silver bull for the last 10 years have used this dip to buy more
physical not to bitch about the correction. In fact, I was hoping and waiting
for the day, if it ever came, when I could buy more physical for under
$35.00/oz.
I think in fairness, 321gold.com should publish this
rebuttal so that readers can make up their mind and hear all sides to the
story.
You guys know where to reach me…my email is on
my website and is available to all that visit it. My views and opinions are
also always made public.
Cheers
Dan Dontrose
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