How The CBOT, Comex And CFTC Coordinated To Break The Last Silver Price Surge 

Submitted by Tyler Durden on 05/06/2011 19:08 -0400

Just like QE is nothing new in the monetary arena, and has seen some incarnation at least since the early 80's primarily in Japan, so parabolic commodity price surges have occurred periodically, most notably in 1980, when Bunker Hunt brought the price of silver to over $50. However, unlike any time before, never in the history of the world have we seen a coordinated worldwide monetary stimulus via relentless credit money "printing" courtesy of global central banks. In that regard, this time really is different, as there is no other remaining backstop to the world financial system: the global banking cartel has used up all its bullets and now can only double down in the most nightmarish Martingale system ever conceived, where each iteration means further fiat absolute value destruction (on a relative basis it simply means a race to the currency bottom, whereby definition only one can be in the lead at any given moment: usually the one with the biggest printing press, and greatest deflationary threat). And while many still believe that QE2 will be the last of domestic US monetary easing episodes, as Bill Gross noted earlier, it is very possible that the US may be headed into a triple-dip recession, for which the only prescription will be another QE round (with political gridlock in DC at unseen levels no fiscal stimulus is even remotely possible). If this happens, precious metals will once again surge. The only question is what will the exchanges do after the next gold and silver spike? Indeed, as we suggest, margin hikes are just the beginning. For a complete playbook of how the CME may proceed after the margin hike approach fails, we once again go back to the curious case of Bunker Hunt. Below, from the Playbook biopic of the Texas billionaire we posted yesterday, we present the walk through of how the CBOT, Comex and CFTC tried to break silver's back. Back in 1980 they succeeded. Have they, and will they succeed this time? 

Physical Silver Update 

Submitted by Tyler Durden on 05/06/2011 17:34 -0400

And meanwhile, the repulsion to silver as exhibited by both the Comex (where as we predicted yesterday we see the first 32MM ounce handle in registered silver - a new record low), and Scotia Mocatta indicates that the silver paper and physical markets are in perfect unison. Or not. But yes, the feedback loop mechanism of SLV unwinds will likely have a greater impact on the paper market until such time as it once again reverses and aligns paper and physical interests yet again. 

Wipe Out Of Near Record Number Of EUR Speculators Confirmed 

Submitted by Tyler Durden on 05/06/2011 15:47 -0400

And once again, those seeking a reason why the EURUSD has plunged 600 pips in two days need look no further than this chart. As of Tuesday, per the CFTC net non-commercial long contracts in EUR rose to 99,516, a massive 45% rise in one week and by far the highest in years, following Bernanke's dovish statements from last week, all of which were wrong footed yesterday when Trichet announced no rate hikes for a while, just as Zero Hedge anticipated courtesy of a global economic downturn. As a result of this surge in exposure, we have seen a one way trade as the specs exit the trade en masse. And while the DXY has seen some move higher, the primary reason why its has not surged faster yet is that over the past 5 weeks USD shorts have covered. And just as notable, net Yen short positions declined in half, from -37k to -18.8k. This mean that the G7 will soon have to intervene all over again to keep the Japanese currency weak. 

Goldman's Explanation Of The EURUSD Plunge: "Ooooops!" 

Submitted by Tyler Durden on 05/06/2011 15:34 -0400

Once again Goldman confirms that its sellside analysts either bat 1.000 or 0.000. While Themistoklis Fiotakis' view, which we published yesterday, warned very prudently that the EUR surge is coming to an end, just as the European currency was about to take a 600+ pip tumble in under 48 hours, the other FX expert at bat (and that would be of the 0.000), Thomas Stolper, continues to be as steadfast as old faithful in his betting average. After we were almost resigned to be shocked by Stolper actually gettng an FX call right for once, when the EURUSD got to within 50 pips of 1.50 earlier this week and pass the Goldman profit target of $1.50 on the EURUSD, instead the trade is now in danger of collapsing on itself and being closed out at a loss. Goldman's explanation? "Ooops."

Official Greek Response To Der Spiegel Article 

Submitted by Tyler Durden on 05/06/2011 16:59 -0400

Looks like this one time the Greeks may actually be telling the truth. But who cares: by Monday, when every nation in the eurozone will be right where it was on Friday, the EURUSD will be 200 pips lower. Mission accomplished. Although unlike in 2010, we are absolutely certain no investigation will ever be launched to discover who instigated this EUR hit piece which just end up benefitting both Greece, German and... the eurozone. And yet, should it be uncovered one day that none other than Greece initiated this process to weaken the euro we would be almost as surprised as learning that Greek banks had bought CDS on Greek debt. 

Greece Update 

Submitted by Tyler Durden on 05/06/2011 17:41 -0400

Just as expected:

• EU'S JUNCKER SAYS `STUPID' TO TALK OF GREECE EURO EXIT
• EU'S JUNCKER SAYS `NO WAY' GREECE WILL LEAVE EURO AREA
• EU MINISTERS TO DISCUSS NEW `ADJUSTMENT PROGRAM' FOR GREECE

But yes, the EURUSD will open at 1.43 on Monday, not 1.45. FX ping pong game mission accomplished.

$1764 Angel Starts To Shine

Posted: May 06 2011     By: Jim Sinclair      Post Edited: May 6, 2011 at 2:50 pm
Filed under: General Editorial

Dear Friends,

Today’s action totally eliminates all and any concern for the price of gold. Today’s action lights up the $1764 Angel in gold.
Technical damage always requires technical repair. That type of price action is a perfect set up for a major launch of the gold price in June.
Relax and enjoy your protection and insurance positions.
Regards,
Jim





Dear CIGAs,

Here is Mope at spiritual levels.
(Stocks are bouncing back nicely as a better than expected nonfarm payrolls report helps to support recovery outlooks)
According to the Labor Department, nonfarm payrolls rose by 244,000 last month, as the private sector posted the strongest employment gain in over five years. However, the unemployment rate rose to 9.0% last month from 8.8% in March. Economists expected payrolls to rise 185,000 with the jobless rate steady at 8.8.


Jim Sinclair’s Commentary
The latest from John Williams’ ShadowStats.com.

No. 367: April Labor Numbers, Money Supply, Dollar and Precious Metals

- Increasingly Misleading Seasonal-Factors Continued to Pummel Accuracy of Jobs Data 

- April Household Survey Showed 190,000 Employment Drop 

- April Unemployment Rates: 9.0% (U.3), 15.9% (U.6),22.3% (SGS) 

- Broad Money Supply Gains in April 

- Underlying Inflation, Dollar and Precious Metals Fundamentals Unchanged
"No. 367: April Labor Numbers, Money Supply, Dollar and Precious Metals" 

Web-page: http://www.shadowstats.com

Market Commentary From Monty Guild

Posted: May 06 2011     By: Monty Guild      Post Edited: May 6, 2011 at 2:45 pm
Filed under: Guild Investment
Dear CIGAs,
We see no reason to panic about the current price declines in stocks, gold and oil.  Our long-term view gives us a different perspective. We have a plan and lots of cash, which we intend to use to purchase our favorite investment areas on dips.
In summary, nothing has changed, except for the fact that some highly-levered speculators have been forced to sell by increases in margin requirements.  After the panic has ended, buying opportunities at low prices will abound.  We will write more next week.
Please see the table below for our current and closed recommendation.

Investment	Date	Date	Appreciation/Depreciation
	Recommended	Closed	in U.S. Dollars
Commodity Market Recommendations
Corn	4/20/2011	Open	-4.2%
Gold	6/25/2002	Open	+355.8%
Oil	2/11/2009	Open	+177.70%
Corn	12/31/2008	3/3/2011	+81.0%
Soybeans	12/31/2008	3/3/2011	+44.1%
Wheat	12/31/2008	3/3/2011	+35.0%
Currency Recommendations
Short Japanese Yen	4/6/2011	Open	-6.3%
Long Singapore Dollar	9/13/2010	Open	+7.8%
Long Thai Baht	9/13/2010	Open	+7.0%
Long Canadian Dollar	9/13/2010	Open	+6.4%
Long Swiss Franc	9/13/2010	Open	+15.9%
Long Brazilian Real	9/13/2010	Open	+5.6%
Long Chinese Yuan	9/13/2010	Open	+4.0%
Long Australian Dollar	9/13/2010	Open	+13.3%
Short Japanese Yen	09/14/2010	10/20/2010	-3.3%
Equity Market Recommendations
India	4/6/2011	Open	-7.7%
Malaysia	4/6/2011	Open	-1.9%
Canada	3/24/2011	Open	-3.5%
Colombia	9/13/2010	Half Original Position sold	-0.1%
Australia	2/15/2011	Open	+2.9%
Japan	2/15/2011	Open	-2.6%
U.S.	9/9/2010	3/11/2011	+18.1%
Canada	12/16/2010	3/11/2011	+7.9%
South Korea	1/6/2011	3/3/2011	-2.9%
China	9/13/2010	1/27/2011	+5.0%
India	9/13/2010	1/6/2011	+7.9%
Singapore	9/13/2010	12/16/2010	+4.8%
Malaysia	9/13/2010	12/16/2010	+1.3%
Indonesia	9/13/2010	12/16/2010	+9.5%
Thailand	9/13/2010	12/16/2010	+11.9%
Chile	9/13/2010	12/16/2010	+8.9%
Peru	9/13/2010	12/16/2010	+32.2%
Bond Market Recommendations 30 YR Long Term U.S. Treasury Bond	08/27/2010	10/20/2010	0.00%

As I have said Many Times...BTFD...China does...

Jim’s Mailbox

Posted: May 06 2011     By: Jim Sinclair      Post Edited: May 6, 2011 at 2:43 pm
Filed under: Jim's Mailbox

Dear Jim,
America sells, Asian smart money buys the dips. We close at $1473 and 5 hours later gold shoots to $1489.
Will they be the ones who make the $100USD moves in Gold?
All the best,
CIGA Las