Thoughts on Markets

Saturday, September 24, 2011

No Such Thing as Free Markets as All is Intervention and Manipulation

From Ed Steer's Gold and Silver Market Newsletter:

CME raises gold, silver, copper margin requirements

The dust had barely settled after one of the biggest criminal take-downs in precious metals history, when the CME announced that they were raising margin rates for gold, silver and a couple of other commodities.  This they did after the close of business on Friday...long after the damage had been done.  Margin requirements are always raised in rapidly rising markets...not after the commodities in question lie bleeding on the trading floor.
This takes effect at the close of business on Monday...and is just one more way of beating the last leveraged longs out of their positions so that the bullion banks can cover more short positions.  This is as criminal as it gets.
If there are that many leveraged long positions still left, this will negatively impact the prices of these commodities during the Monday trading day as these longs toss in the towel as well.
This short story, from The Wall Street Journal last night, is printed in the clear in this GATA release...and is a must read.  The link is here.  If you want to read the full text of the CME advisory, the link to that is here.

The long term bull trend has yet to be broken. Looking at silver, we see a similar pattern as a result of intervention, as well. The drop was due, but this time, it is difficult to say that it was not due to interference with what little freedom there is left in the paper markets for the metals.

 Note: That silver is at the price where I made my last purchases of Silver Eagles. At that price they look interesting to me. However, we may well see lower prices. But we could see an upward bounce on Monday. The drop, though result of manipulation through margin increases, and bullion bank manipulation. This is providing excellent short covering prices for the banks. The prices are also running the weak hands out of the metals and miners.

We will have to wait and see if there is a bounce upward on Monday or the drop continues. The margin increase was really devastating as the general market failed to perform well, too.  The uneasiness and world wide financial fiasco continues and investors are fearful. What next?

Monday, we are unlikely to see any return to normalcy. Expect volatility and more drops in prices. As usual after so significant a drop last week, we would expect to see a substantial upward bounce which is not out of the question, but I feel not very likely. 

Many of the miners are very tempting at these prices, but be very careful. I am doing very little buying now. I am waiting to see the direction on Monday.

 The miners are generally more resilient than the general market, but after all, the precious metals were targeted for much slamming and capping. 

Plan wisely, commit your plans to the Lord and depend upon Him for results. Also, we are to take one day at a time.

Best, Doug


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