Mike's Content
My apologies if you’ve been inundated with emails or whatever about the upcoming seminar in Calgary on Oct. 27th with Black Swan Capital’s chief analyst, Jack Crooks and long time currency trader and MoneyTalks analyst Victor Adair on how to profit from the record volatility in the currency markets.
Wealth management firms look to hard assets for next price boom
As equity markets hit all-time highs again, investors haven’t forgotten the 2008 market meltdown that resulted in a 40 percent loss.
And now they are prodding money mangers to help protect them against another one.
To accommodate the well-heeled investors’ cautiousness, money managers and advisers are diversifying assets away from the bubble-prone stock market and into alternative assets like real estate, commodities and sometimes mutual funds that can short the stock market.
It is a trend that many asset managers see continuing over the next few years, several market-research firms say.
….read the full article HERE
Recommendation:
Adding Japanese yen ETF 98 puts! Targeting 421% profit.
21 October 2013/12:30 p.m. ET
Issue #1
Today Japan recorded its 15th straight trade deficit in a row. It suggests there is a significant transition taking place within the Japanese economy-either a natural or forced transition to an economy dependent more on domestic growth than the standard export-driven Asian model. The jury is still out, no doubt, on whetherPrime Minister Abe’s three-arrow strategy will succeed. But the ongoing Bank of Japan mandate to weaken the yen seems on track and there has been a direct correlation between trade deficits and the yen, as you can see in the chart below. I believe the yen continues to weaken in the months ahead and suggest you add this new position to your currency options portfolio today:
Please click the link below to view the issue:
Regards,
Jack Crooks
Black Swan Capital
The ultimate lynch pin for the silver market is the flow of physical metal to support ongoing price suppression. The flow of physical metal is mostly an illusion nearly equal to (and in some ways parallel with) the perceived strength of the paper currencies used to measure its value. Actual or threat of default in physical silver delivery to the COMEX could very likely lead to default across the asset spectrum.
The Center of Price Discovery
The CME owned COMEX remains the largest and most important exchange for world price discovery in the world. The major players on the COMEX, the most important futures market and the basis for world silver prices, are perfectly happy to exchange paper rather than physical.
The fact that the largest players are neither producers nor users of the metal is all one really needs to understand about the integrity of the exchange. The advent of algo driven high frequency trading, and the complete capture of regulators has made the physical delivery and warehousing a secondary concern among the dominate traders.
Often we see ratios between the amount of physical stock and paper traded blow out to more than sixty times without creating a panic.
The ratio of open interest to available stock has often stretched beyond comprehension. However, it is the simple fact of large concentrated positions (not subject to limits-hedged or no) which have enabled the ultimate), which have enabled the ultimate, disconnect in pricing reality. While the LBMA is a much less transparent exchange, the same could be assumed without stretching the imagination. Paper trading is profitable.
COMEX and LBMA Default
While the thought of default on these giant exchanges seems remote given their size and influence, it is possible for delivery delays to develop without major disruption. Significant enough delays could move price discovery toward the physical market, which would have at least two major effects.
First off, premiums for physical metal would likely move significantly higher – leading to real backwardation. More importantly, price discovery could migrate toward exchanges that deal primarily in physical – not paper dominated. This would likely move in an eastward direction toward Asia.
Buyers at the Margin
If physical price discovery were to suddenly or even gradually manifest, demand could explode.
It almost goes without saying that just-in-time delivery practices for some of the most important industrial uses of silver are a constant albatross for the paper delivery game. One or two user stock piling panics could send the white metal well beyond its inflation adjusted average highs.
In addition, the pool of retirement assets and liquid cash held by individual investors and fueled by the speed of information could result in an ocean of demand. Such demand would also propel fiat prices beyond anything resembling imaginable. The silver story is always compelling, but potentially very dramatic as new demand awakens.
While the masters of sentiment have governed the last remaining supply of readily available silver, failure is just one “accident away”. We’ve already experienced unprecedented counterintuitive price and demand relationships in the physical market. Prepare accordingly while you still can.
Read more from Silver Majestic:
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Long Gold, Short Silver And Exponential Demand
The unintended consequence of allowing suppression in the name of industry or to protect fiat currencies has led to a world record surge in physical off-take demand like..
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About the Author
Jeffrey Lewis has been an advocate for silver purchasing for the past six years. He writes regularly about it at silver-coin-investor.com