-- Posted 27 March, 2006 | | Source: SilverSeek.com
In 1987 I got the ride of my investing life by owning contracts on silver futures. My timing to enter was perfect, and just in time to set up my first commodity trading account. Going long on silver, I bought my first ever futures contracts. Silver went up almost immediately, and boy did it go up! I pyramided my contracts up, and up, until I had nearly 14 contracts, each controlling 5,000 ounces. But, then a peculiar thing began to happen; events which I had not contemplated nor understood, and outside of my control. The CFTC began to raise the margin requirements on silver - that amount of funds you must hold in escrow for each outstanding contract. They did it on three or four occasions as I recall, but silver kept on moving to the upside, so what's to worry about?
But, the CFTC didn't quit. My First American broker advised me to set sell stops each leg up which I did. About three weeks after the run had begun, silver began to decline on the London market. I found out what stops were - the hard way. In NY prices opened below my stops, so of course, I had no takers. I moved my stops down again and again, but never enough to catch the "falling knife". Margin requirements remained high, so high in fact, that now I had to liquidate at any price just to comply with the margin maintenance requirements! In short, I was lucky to escape the whole ordeal with only a small loss of my initial equity.
I relate this experience to let you know that the silver paper market controls the physical price. And, being paper means control by the banking cartel and their co-conspirators at the government regulating agencies. I learned my lesson cheap, very cheap. I believe to this day that April 1987, just like 1980, were periods that the US Govt (under Federal Reserve control) was terrified that there was to be a worldwide flight from the US dollar.
I cannot caution you enough not to be a sucker like I was. Our government, in collaboration with the fiat money creators, are scared to death the world will forsake paper money for commodities of real value. It's not so much that they are rattled by a drop in the US$ as there are numerous other paper monies with which they can expand debt and line their pockets. They can move on. Just as they are doing now enticing the criminal regime running China to grow the debt of their people, with leaders satisfying their own greed and quest for power by impoverishing their people. What's the number - only one in seventy adult Chinese have an automobile? Just the debt magnitude to satisfy this one thirst is mind-boggling. And, those cars won't be manufactured by Americans, I might add. Just as the international bankers moved on to the US after bankrupting Britain in the last century with the creation of the US Fed in 1913, so move on they will to Asia. A banker that does not pyramid debt upon others would not be a banker.
Back to silver. Although I didn't recognize it at the time my 1987 silver futures experience was a mini-rally in a secular silver bear market. The 1980 blowoff in silver was the culmination of a mega bull market in silver. I was mistakenly still investing for a commodity bull since past. Yes, we are in a bull market in silver right now. The difference being that this run is not the big enchilada that will take us to $85, $100 or higher price. You will not be around to benefit if you allow yourself to become obsessed with buying more and more during this current froth. Only you and you alone know your own tolerance for risk, so in that regard you must be your own guardian. At this point I would suggest your goal to be the accumulation of more ounces, not dollars!
And, finally, never ever lose sight that our paper bankers have governments and the media as willing collaborators in this scheme to take our wealth and expand their control. Don't you think it odd that you don't ever hear of central bankers selling their gold reserves at price peaks? They are not dumb. Don't delude yourself into thinking they're bumbling idiots. They don't sell at highs because they don't get the same price suppression return as they can when prices have peaked and retrenching. They sell into declines and publicly announce their sales in concerted efforts to drive the price even lower! Paper over gold MUST prevail!
It is this same contrarian scheme that drives the commodity market margin requirements. The bankers and their surrogate insider conspirators are heavily short, and when the market begins to wobble, and most suckers that were going to buy have done so, the boom is lowered and untold and unearned wealth is pocketed by the schemers. Rumors will abound, "Buffett Said to be Selling Silver Hoard", "India Dis-hoarding Silver!", "Mexico to Dump Silver Mine Production to Feed Poor", "Silver Mine Executives to Face Fraud Charges", etc...The public is fleeced, bruised and bankrupted, vowing never again to stray from dollar assets. Many will not be with us to ride the final crest of the silver wave. In the 1996 mini-silver bubble collapse following the Buffett silver buy, one hundred ounce bars were bid at less than spot. Fabricators like Engelhard had more silver than they could handle, and weren't buying any more!
There is little or no informed opinion coming from our silver "experts" on the tactics or historical activities of the CFTC and their manipulation of the commodity markets thru the margin requirement mechanism. While most silver "advisors" are perma-bulls on silver - and will be long after silver and gold re-enter the secular correction phase - they are negligent in not fully informing their readers of the several manipulative strategies of those whom they criticize and scold for suppressing and manipulating the prices of which they tell you to buy!
Here are the two sites which you can track the margin requirements for commodities:
Yes, we are riding the silver bull, just be sure you're around with us to ride the ultimate tsunami.
- - CV
-- Posted 27 March, 2006 | |
