Hint of a Big Picture Change Occurring in PM's ?
tick, tock...
Was hacking on the computer this afternoon... the TV droning in the background. As it happened, it had been left on PBS, and a show called "Wealthtrack" was playing. I have no idea who the guests were, what they'd been talking about, etc., but, suddenly I became aware that there had been a mention of silver... so I wandered over to watch that bit...
FWIW, my opinion of media coverage like that is that it is pure MOPE... with the powers that be using cooperative media channels to direct "news' messages to the muppets they expect will be complied with... while those muppets think that watching a show named "Wealthtrack" that is spoon feeding them marching orders, actually makes them financially sophisticated rather than muppets being MOPEd...
Anyway... the segment took about two minutes... and it had only two (maybe three) components....
The first component was the "gold/silver ratio"... showing the price relationship currently at 1:54 versus 1:15 historically... a couple of REALLY simple powerpoint graphics flashed on the screen to demonstrate that bit...
The presentation was dumbed down enough that I think NO ONE could fail to "get it"...
The second bit was an even more brief discussion of "ways to own silver" that was similarly dumbed down, and about as complex in relation to market reality as a rookie baseball card is a meaningful and complete life history as the memoir of a famous player...
I don't even remember the words... but, you can probably guess the content... bottom line was... the ONLY way to consider owning silver that was even addressed was... ETF's... and, then, only ONE of the many possible ETF choices was mentioned... drum roll please.... the masses are being MOPE'd to "buy silver" for a 360% return... but, ONLY in the form of buying SLV.... the only option...
They posted a "chart" with a "list" of "how to own"... showing only "silver ETF's" and then ETF's as ONLY being SLV... along with supporting graphics highlighting that the "data" presented came from "Morningstar"... thus the "MOPE approved" stamp was fully applied... certifying that owning SLV is the same as "owning silver"...
I can't recall any other time in the last few years seeing the "news" doing that sort of obvious free advertising in a pump for "buying silver"... by supporting the silver short trade through MOPEing buying paper silver...
The "third" component presented... was a quick set of disclaimers noting that metals prices are volatile and can move either way... you know... the sort of thing you need to do when you are using "the news" to "advertise" and make Morningstar approved investment recommendations for "how investors should move their money, right now"...
They left off the... "and, thanks for being cooperative muppets"...
Even the context... was jarring... which is another feature I look for in forced insertions of "dissonant" media messages that expose the direction of the "man behind the curtain" while saying "pay no attention to the man behind the curtain". The lack of program continuity in message content, focus, and directorial "flow" is a dead giveaway... and this was clearly a "tacked on" element completely "irrelevant" to what the show was doing otherwise...
Big red flags waving, for me, as a result...
What I take away from it...
First, is that it seems there is something that has changed in the markets... that they feel the need to engage that sort of an forced effort to support MOPEing "their" version of the paper trade in silver. I've not seen that sort of effort made in flogging SLV... not since it was launched...
Second... would be that it is necessary to engage in some speculation about what it means that they've a need to MOPE support for the paper trade that backs the silver shorts ability to continue carrying their trade... now.
Are the Sprott offerings making "enough" of a dent in the markets... taking some of the top off the shorts capacity... with an REAL fund offering of an ETF that IS backed by and exchangeable into real silver... rather than more and more paper promises that CAN'T POSSIBLY be fulfilled? What rate of expansion is required in SLV backed capacity, by the leverage factors inherent in the paper trade, to counterbalance each ounce of REAL silver that gets physically tied up in Sprott's EFT ? (Without answering the question, note, I'll be watching the RELATIVE growth rates between the two ETF's as an indicator of what's coming in the markets.)
OR, is there some other source of "erosion" occurring, generally, now in market support of the SLV effort ? Are they failing in convincing "enough" investors now... for some other reason, or reasons... that they're not getting the degree of support required to enable them in sustaining the short trade that's out there ? General shift occurring, with investors getting smart to the game that the ETF's like SLV are not "investments in silver" but "tools to enable shorting paper silver" ? Is this evidence of a market shift evidence only of some linear "creep"... or is it the first evidence of some acceleration occurring in the markets... that is an early and leading edge indication of some non-linear curve shifting the markets... as even a parabola looks "flat" at the start...
This is EXACTLY the sort of "innocuous" thing that I'll look to observe in the "outside the markets, looking in" view the media generate... that tell me "something is afoot"... and not only because of the message itself... but because of what that represents in terms of a "change" from the status quo... that the message occurred...
It says the media ARE now MOPEing SLV (not silver) to provide additional market support for silver shorts... and, the only reason they'd be doing that... is that there is a NEED for doing that...
What is the NEED ?
Why the TIMING ?
From this... I'll predict BOTH that
1. There is a reason for the NEED for NEW $ to flow to SLV... first... as that has to happen first to enable capacity required to mount another short attack... ? They're advertising to grow the ETF in order to expand the market capacity to short silver... It says what they're doing now "ISN'T WORKING"... well enough... for some reason... so, they have to expand the market capacity to short more...
2. There WILL be an expanded effort made to short silver... and the extent of that effort will probably depend on the scale of the capacity expansion enabled...
That, in itself, is another big change... as it says, among other things, that there are timing factors in the market which they don't control as fully as they have in the past... with the shorts now revealed as being dependent on raising capital that is required to sustain their trade ?
So, what is the nature of the LIMIT in market capacity... that requires them to move to expand it, now ? And, timing aspects ?
And, what will happen... in the market... in response to the effort ? What happens IF the market doesn't cooperate in enabling them in expanding the required capacity of the market... to short more silver ?
It says... watch SLV for signs of increased $ flow in... relative to "alternative" flows... including PSLV, and other "REAL" silver investments... like coins, bullion, and mining stocks... with the RELATIVE shifts mattering more than the absolute... by some undefined multiplier factor...
If the market responds to them flogging SLV... instead by buying PSLV, shares and physical... they're toast... ?
Might be timely to see someone accusing SLV of market fraud... because they "sell silver" in a WAY that enables shorts to control and dominate the trade, and in a way that intends to enable, "the market" in operating AGAINST the investors investment intent, in spite of the fiduciary responsibility of the fund managers that that should require that does not happen. Maybe some SLV holders will sue them... for facilitating a trade that harms the SLV holders interests ?
The situation exposes an obvious market weakness or two.... which creates a couple of (obvious, to me) opportunities... that, with the right moves made by others... should virtually ASSURE the failure of the paper silver short... no matter what the law is, in spite of enforcement, or not, no matter what the regulators do, etc.
It looks to me like evidence we're closer to a "tipping point" in the silver trade...
My read... is that this means that we should expect a renewed effort will be made by the silver shorts... tied to the "capacity expansion" that this "advertising" for SLV that the media is enabling, for free, intends to generate.
There should be a "timing" element in relation to the timing of and the success in that effort to flog SLV... ?
I think you can also read it to say that they're surprised that silver has been as resilient as it has in response to the recent rounds in the short attacks that have been mounted... that they're surprised that the market absorbed them and then shrugged them off... WAY better than was expected. This appears to be evidence the shorts are struggling in sustaining their trade... have basically hunkered down, for now, having run out of ammo... .
That read makes it fascinating to consider... while looking at the SLV chart... that the shorts are "out of ammo" now, or are close enough to it, that they need to resupply their capacity... now...
And, then, as that next round in effort evolves, (however it does) we'll probably see the final, MAJOR bottom in silver occur... after which the wheels may well come off the silver short trade... as the evidence of "erosion" in support for that trade, and the need for "more effort" to support it now... is perhaps a leading indicator of more than the linear #'s in the magnitude of change in capacity they need to sustain "what they're doing now"... ? |
