By: Richard Daughty, The Mogambo Guru
-- Posted 9 November, 2010 e: SilverSeek.com
Ted Butler, famous silver analyst and the guy who kept up the pressure about the corruption in the silver futures market for the last 15 years, is in the InvestmentRarities.com newsletter recently talking about silver, and notes dryly that “world silver inventories are at their lowest point in 200 years.”
Well, this kind of news is for silver very important, but for me it is overshadowed by the new report of the company’s new Employee Satisfaction Survey, a stack of lies put out by the lying morons in the Human Resources Department, reportedly showing that my popularity is at its lowest point in my career, including that time when the Accounting Department burned me in effigy.
The report now includes an anecdote that 2 mysteriously unnamed employees now have comedic license plates on their cars emblazoned with the phrase “Go To Hell Mogambo (GTHM).”
Naturally, these two “unnamed employees” have to be Carl and Porky, two of the biggest nitwits in the whole company whom I have every day – every day! – told to buy silver because neo-Keynesian econometric madmen have seized control of the Federal Reserve and are creating so much money, so unbelievably much money, so impossibly much money that guaranteed inflation in prices will destroy us.
They never do.
And worse, nowadays they try to actually hide when they see me coming, making it difficult to advise them to, you know, immediately buy silver, which I am sure will prove to be the Biggest Freaking Bargain (BFB) of the next fifty years, if not more. More!
They are, like I said, nitwits, but they can run like deer.
And it is too bad, too, because they don’t get to learn that Mr. Butler says, concerning silver, “Here we have a vital material, known to all men for all time, literally disappearing before our eyes, both above and below ground. It is a material upon which modern life and rising standard of living are dependent. It is beyond indispensable, it is a miracle metal.”
Indeed, he adds that silver is used in so many industrial applications that “aside from petroleum, silver is used in more applications than any other commodity.”
Well, it turns out that silver is, as predicted, rising, but it may not be just because people are slapping themselves on the forehead and saying, “What was I thinking? I hate to say it, but that Loud Moron Mogambo (LMM) is right: We gotta get silver, fast, and in bulk!”
Or it may be because the corruption in the silver futures market, that Mr. Butler has long exposed, is coming to a head, as Ed Steer of Ed Steer’s Gold & Silver Daily reports that “of course” the big story of late is “news of the lawsuits filed against both JPMorgan and HSBC USA for conspiring to drive down silver prices and reaping hundreds of millions of dollars of illegal profits.”
Incensed, I immediately want to sue somebody, too! Those bastards! Those lying, cheating bastards!
Then I remember that I was able to buy silver all along because these scumbags kept the price of silver low with their manipulations! With a sudden start, I realize I owe them a note of thanks!
Stunned by the revelation, I sit down to compose my thank-you note. I write:
By: Jeff Berwick – The Dollar Vigilante
On November 9th the Chicago Mercantile Exchange said it will raise its silver futures trading margins by 30 percent to $6,500 an ounce from $5,000 an ounce effective November 10th setting off a rapid sell-off in the metal. No other margin requirement on any other metals was changed.
According to Reuters, "Exchanges often raise margins to mitigate risks as price volatility increases."
But, where is the supposed volatility in Silver? The chart below shows an incredibly orderly upward rise in silver.
The financial authorities pulled the same chicanery in early 1980 when Nelson Bunker Hunt and Herbert Hunt had nearly cornered the market in silver. In 1979, the price of silver jumped from $6/oz to an all-time record high of $48.70/oz. The brothers were estimated to hold one third of the entire world supply of silver at the time.
But on January 7 1980, just like on November 9 2010, the exchange rules regarding leverage were changed, when Comex adopted 'Silver Rule 7' placing heavy restrictions on the purchase of commodities on margin. The Hunt brothers had borrowed heavily to finance their purchases, and as the price began to fall again, dropping over 50% in just four days, they were unable to meet their obligations, causing panic in the markets.
This Time It's Different - Rise of the Dollar VigilanteThere is a big difference between 1980 and 2010. Today it isn't just two rich brothers who are moving out of US dollars and other fiat currencies it is the entire population of the world - and it will only increase from here as people like Ben Bernanke continue to push their currencies into hyperinflation via programs deftly named, "Quantitative Easing".
Just as bond vigilantes brought the near hyperinflation of the 1970s to an end by selling government debt, today it is "dollar vigilantes", 6 billion people around the world who are slowly awakening to the mugs game of fiat currencies and central banking and are casting their own vote to sell dollars in favor of real assets such as gold, silver, agriculture and energy.
The Hunt Brothers Great MistakeThe Hunt Brothers were vulnerable because they borrowed money, or went on margin, to buy much of the silver they purchased.
Dollar Vigilantes today would be wise to own their gold and silver bullion in real bullion form and not in paper form to avoid the same fate. There is nothing stopping the CME from continuing to raise margins on gold and silver, even to the point of not allowing margins at all, which could seriously damage the paper futures market. But gold and silver bullion ownership is subject to no such threats.
The only threat to gold & silver bullion ownership is outright government seizure - something that also isn't outside of the realm of possibilities once world governments begin to implode from over-indebtedness.
For this reason, it is important to consider geographical diversification for your precious metals bullion holdings. The Dollar Vigilante released a Special Report on "How to Own Gold and Silver" this week to subscribers in which we detail how to own gold & silver bullion safely and securely (Subscribe today to receive this Special Report - 90 day 100% Money Back Guarantee on Subscriptions).
The government and financial establishment on November 9th made it clear that they are declaring war on the precious metals. They are about to find out that this time they are not up against one or two brothers, but the brotherhood of all of humanity who is turning its back on this failed centrally planned financial system and returning to an honest, free-market money.
The Dollar Vigilante
The Dollar Vigilante is a free-market financial newsletter focused on covering all aspects of the ongoing financial collapse. The newsletter has news, information and analysis on investments for safety and for profit during the collapse including investments in gold, silver, energy and agriculture commodities and publicly traded stocks. As well, the newsletter covers other aspects including expatriation, both financially and physically and news and info on health, safety and other ways to survive the coming collapse of the US Dollar safely and comfortably. You can sign up to receive our FREE monthly newsletter, our Basic Newsletter ($15/month) or our Full Newsletter ($25/month) with specific stock recommendations and updates at our Subscriptions page on our website at DollarVigilante.com.
Copyright © 2010 Jeff Berwick
From Silverseek, Nov. 10, 2010