Mini Raid on silver and gold/Fukushima to go to level 7 equal to Chernobyl

Harvey Organ, Monday, April 11 2011

Mini Raid on silver and gold/Fukushima to go to level 7 equal to Chernobyl

 

 

Jim Sinclair’s Commentary

The madness cannot be stopped. Watch the following video.
Know that the price of gold is super glued to debt. Debt is totally out of control, and gold is going to flash past $1650 as if it did not exist.

 

Must Read: Is Volatility Broken? Normalcy Bias And Abnormal Variance

Submitted by Tyler Durden on 04/11/2011 16:51 -0400

In addition to everything else, The Fed is now in charge of the VIX: "There is compelling evidence the Federal Reserve is artificially suppressing spot volatility through the quantitative easing program. Consider the chart below that shows how the VIX and the S&P 500 index performed on days when the Federal Reserve purchased US Treasury bonds as part of QE2 compared to days without Fed intervention (November 10,2010 to March 30, 2011). On days without debt purchases the VIX index was up +2.14%and the S&P 500 registered as light decline. On days with debt monetization the VIX dropped-0.45%and the S&P 500 index increased. What is even more convincing, the greater the amount of the debt monetization the larger the corresponding drop in volatility and increase in stock prices. During the 44 days on which the Federal Reserve purchased $7 billion+ in debt or more the VIX index dropped-0.57%and the S&P 500 gained0.21%! The connection between lower volatility and QE2 is undeniable. It is not hard to imagine that spot volatility would be much higher absent government intervention in markets. The artificially low volatility in markets may contribute to a dangerous build up in systemic risk."

Drop In Silver Attributed To $1 Million 37% Downside Bet On SLV

Submitted by Tyler Durden on 04/11/2011 15:08 -0400

With everyone transfixed by the relentless move higher in silver, stories, myths and virtually anything is used a catalyst to explain any move lower in the precious metal. While earlier there already were two rumors that the COMEX would imminently hike gold and silver margins again (so for untrue) what is true, and what many are attributing the move in silver to, is what according to some is an outsized option bet that SLV will drop 37% by July. Bloomberg reports: "A trader’s almost $1 million bet that an exchange-traded fund tracking silver will plunge 37 percent by July was today’s biggest single options trade on U.S. exchanges as futures on the metal reached a 31-year high. The 100,000 options to buy 100 shares each of the iShares Silver Trust (SLV) at $25 by July changed hands at the ask price of about 10 cents and exceeded the open interest of 6,054 outstanding contracts before today, indicating that a buyer of a new bearish position initiated the transaction. The ETF rose to the highest intraday level since trading began five years ago, $40.33, before erasing gains. It fell 0.5 percent to $39.67 at 12:54 p.m. It hasn’t closed below $25 since November."

Guest Post: Guess Who’s Buying Silver Now

Submitted by Tyler Durden on 04/11/2011 12:18 -0400

OK, so the JPM vault that contains a whopping 30,844 ounces of silver (about two hours worth, given the torrid pace at which JPM delivers) was just approved by the COMEX in March. JPM’s probably got lots of silver stashed all over the place, right? Maybe, maybe not. One thing is for sure, JPMs customer(s) are some of the worst investors the world has ever seen. After selling almost 5 million ounces in the first three months of 2011, they’re buying now. That’s right, in March alone they delivered 374 contracts (@ 5000 ounces each) and bought…..zero. So far in April, they’ve bought 92 contracts and sold, you guessed it….the goose egg. And yes, they are indeed buying at new highs (See here and here). How bad would it suck if we learned that this clueless market participant was in fact the US government?

Fire Breaks Out At Fukushima Reactor 4

Submitted by Tyler Durden on 04/11/2011 19:58 -0400

Time to upgrade Fukushima from 7 to 7¼? From Reuters: "A fire broke out at Japan's crippled Fukushima Daiichi nuclear power plant, operator Tokyo Electric and Power (TEPCO) said on Tuesday, although flames and smoke were no longer visible. A worker saw fire at a building near the No.4 reactor at around 6:38 a.m. (21:38 GMT) and a fire fighting unit of the Self Defence Forces was sent to fight the blaze, a TEPCO spokesman said. "Flames and smoke are no longer visible but we are awaiting further details regarding whether the fire has been extinguished completely," he said. Japan has been battling to bring under control the plant damaged severely by last month's devastating earthquake and tsunami."
Update: TEPCO says fire out at battery storage bldg near Fukushim-1 reactors 1-4. No effect to reactors, water cooling continues.

Fukushima Accident Assessment Officially Raised To Maximum, Level 7

Submitted by Tyler Durden on 04/11/2011 17:40 -0400

What started as less serious than Three Mile Island has just become as serious as Chernobyl, with the Fukushima disaster assessment having been raised to the highest, Level 7. From NHK: "For a series of accidents happening at TEPCO's Fukushima Daiichi Nuclear Power Station, Nuclear and Industrial Safety Agency of the Ministry of Economy, which released large amounts of radioactive substances that affect human health and the environment in a wide range As an assessment based on international standards of the accident, the worst "level seven" decided to raise. "Level 7" is the same as the evaluation occurred in the Soviet Chernobyl disaster. Nuclear Safety Agency, 12, held a press conference with the Nuclear Safety Commission has decided to publish the contents of the evaluation." Of course, due to the much greater concentration of people, and the far smaller land territory, should Japan continue to persist with "controlling" the crisis with the same success as it has over the past month, very soon a Level of 8 and/or higher may be required. In the meantime, we are getting unconfirmed reports that radiation content in Hawaii milk is orders of magnitude greater than Federal Drinking water limits. While one can bicker over the exact number, it is certain that as long as Fukushima continues to billow radioactive smoke, steam and/or water, cumulative radiation levels, both domestically and globally, can only go in one direction.