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I sold over 30% of my silver on the hopes of catching a short term pullback to around $28. The reason for this is that the bond market looks like it is getting ready to tank and the "Monetary Authorities" response would be to cause a pull back on all equity classes to push money back into treasuries as a herding technique. In my opinion they can and will do this (believe it or not) because so much of the increase in the stock market has taken place on the back of Fed POMO and other stimulative policy operations. So reversing the trends is fully possible through a series of ongoing instructions to principle primary dealers.

Even mighty silver and gold will be moved lower if the Dow drops a 1000 points or more. That will set up a perfect buying opportunity at much lower prices. I'm only selling where I can liquidate quickly such as in PSLV in my IRAs. I will hold my physical silver.

I do not recommend following my move here. I was wrong on my last pullback guestimate. I'm making a gut level call for myself here and selling at $33.50 locked in some dry powder for a possible attack on the entire commodity/equity sector to support bonds in the coming few weeks, which is my current guess as to what will happen to support the treasury auctions. Margin call hikes and the like will be used. Its a futile long term effort but these measures can cause substantial short term pull backs.

In my opinion silver is in route to over $300 over the next 2 or 3 years and it is a long term buy here. If it doesn't pull back below $28, I will re-enter at any price above that.

I am sharing for full disclosure as I am about as Bullish as one can be on silver for the following reasons:

1. Above ground Available Silver bullion inventories have declined from about10 billion ounces in 1940 to around 1 billion today.

2. There is now approximately 3.8 billion ounces of above ground gold available.

3. Silver is not only a monetary precious metal but a highly useful and irreplaceable industrial metal used in high technology, medical and other manufacturing applications.

4. Very little of the silver used in industry is recycled.

5. The historic ratio between silver and gold is about 16.

6. The current ratio between silver and gold prices is about 48.

7. Physical demand for physical silver and silver coins is at all time highs and accelerating.

8. New applications of of silver (almost all non-recylable) such as HeiQ Materials, which "manufactures high-performance textile effects for the most demanding functionalities," in the area of anti microbial and other anti-germ technology using silver compounds are expanding even as silver mining production is just beginning to pull up from a very long down trend and the degree of increase is marginal compared to the increase in investor demand and price increases.

So, silver is actually substantially more rare than gold and yet the price ratios do not reflect the physical reality yet. This means that the long term price suppression of silver via the extreme concentrations of short positions by one or two of the largest Bullion banks has created a sling shot of potential upward price energy. If the CTFC investigation into silver price suppression or any of the current law suites, class action or otherwise, fully reveals the degree and level of ongoing suppression, silver may quickly revert to its historical ratios, and given its increasing rarity and industrial and technological usefulness, climb well beyond its less rare cousin, gold.

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Thanks again to quick and adept foot work of the Zero Hedge team for getting the word out. Here is the link to the article followed by a reminder on the basics of silver that is rarely reported in the mainstream financial media for obvious reasons:

1. Above ground Available Silver bullion inventories have declined from about10 billion ounces in 1940 to around 1 billion today.

2. There is now approximately 3.8 billion ounces of above ground gold available.

3. Silver is not only a monetary precious metal but a highly useful and irreplaceable industrial metal used in high technology, medical and other manufacturing applications.

4. Very little of the silver used in industry is recycled.

5. The historic ratio between silver and gold is about 16.

6. The current ratio between silver and gold prices is about 48.

7. Physical demand for physical silver and silver coins is at all time highs and accelerating.

8. New applications of of silver (almost all non-recyclable) such as HeiQ Materials, which "manufactures high-performance textile effects for the most demanding functionalities," in the area of anti microbial and other anti-germ technology using silver compounds are expanding even as silver mining production is just beginning to pull up from a very long down trend and the degree of increase is marginal compared to the increase in investor demand and price increases.

So, silver is actually substantially more rare than gold and yet the price ratios do not reflect the physical reality yet. This means that the long term price suppression of silver via the extreme concentrations of short positions by one or two of the largest Bullion banks has created a sling shot of potential upward price energy. If the CTFC investigation into silver price suppression or any of the current law suites, class action or otherwise, fully reveals the degree and level of ongoing suppression, silver may quickly revert to its historical ratios, and given its increasing rarity and industrial and technological usefulness, climb well beyond its less rare cousin, gold.

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While the dollar is falling the last few days we've seen commodities and particularly gold and silver being sold off by algorithms and the long giant bullion primary dealer banks increasing there never ending silver and gold shorts per US and UK central bank policy. The complete counter intuitiveness of this dichotomy is ample evidence of the degree of manipulation and anti-free market intervention that takes place in the corrupted financial system.

One of the biggest problems in the markets today besides the Fed is the mindless, soulless algorithms which have no fundamental comprehension of the nuances but are confined within the limited and unintelligent degrees or freedom or lack thereof of the modeling characteristics.

As Trader Dan from Jim Sinclair's jsmineset.com said today in regard to the psychotic nature of the algorithms and the manipulated markets:

"…There is also a further inclination to sell commodities in general which is hurting silver in particular as copper and crude oil are both weak, a development which tends to bring the overall sector into disfavor for the time being. That is a complete 180 degree flip from recent weeks when the “improving economy” theme led to ideas that commodity prices were going to move higher as demand globally soared and “risk” trades were jammed on. My how fickle these lovers have become!
When one sees the grains, all of which have a very bullish set of fundamentals also experiencing selling, you can rest assured that it is hedge fund algorithm selling which is occurring. Wheat, which at the immediate moment has the most bullish set of fundamentals going for it was even dragged lower early in the session. Even cotton, which went on overnight to make yet another 140 year high in price, did not escape the selling as it moved over 500 points off its best level after posting that astonishing figure. About the only commodity that I can see that did not move lower today were the hogs, which keep moving steadily higher as the cost for a nice pork chop or some slices of bacon keep heading up and up and up. …"
Now that consumer confidence is moving higher and the economy is improving bonds are moving higher. Yes, you read that correctly – higher. Nothing like official sector manipulation of interest rates in the name of sound economic management by the Central Bank to keep the markets running smoothly. One would think that with all the fears of QE being withdrawn by the Fed, (which is what is leading to selling in the commodity complex), that the bond market would be anticipating the same and would be moving lower since that is the sole factor that has been propping the market up. What do we get instead – more of the same QE as the Fed continues its purchases. Either the bond market has gotten it all wrong and the QE is going to continue indefinitely or the commodity sector has gotten it all wrong with that side of things expecting the QE to disappear. And one wonders why there is such stupidly insane volatility in all of our markets these days. If you want to find the chief culprit behind that, look no further than the boy wonders at the Fed, the source of all market mischief and mayhem…."
Even if the President freezes non-security discretionary spending for 50 years, the truth is that until the US either starts taxing its wealth human's and making pay for play the rule rather than the exception for corporations of US origin doing business here, then we will be borrowing money at these rates for the foreseeable future and that any substantial rise in interest rates will rapidly eat up all of the US discretionary budget and send the US in to default.
All the talk about QE2 ending as being the catalyst for the algorithms and funds to start selling commodities is pure nonsense and the fact remains that outside of some much needed small interest rate increases to get banks lending to small business, the absolute predicament of unrepayable debt and debt as far as the eye can see means that some form of QE, stealth, public or otherwise will continue. That means the dollar will continue to weaken. On the other hand if the Fed pulled in its QE wings, stopped buying Fannie and Freddie agency debt, the already faltering real estate market would go straight off a thousand foot cliff , the US economy would follow and the US would then hit a revenue crisis so large that national deficits of $2 trillion would be a walk in the park.

Besides all that, Wall Street is making a killing in free money with the Bond Churn scheme afforded by QE2 and they are making out like bandits. Why should the party stop at QE2?

Here are a couple of articles in support of the above assertions:

QE2 A Success: 56% Of Wall Street Gets Biggest Bonus Than Last Year


Today's Edition Of The FRBNY's "Flip That Bond" Criminal Reality Show Is Now In The Books, As Primary Dealers Continue To Churn Just Issued Bonds

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I have to agree with Zero Hedges conclusions on the Goldman report. Once referred to by certain GATA members as the Hannibal Lecter of the anti-gold cartel, GS has passed the operational legacy of the Fed's gold suppressing program to other derivatives dealers. None the less, in my opinion it remains totally disingenuous that the mainstream and the brokers and dealers all fail to mention that most of this latest sell off is as a result of the confluence of CME margin call hikes on gold and silver upwards of 6% coupled with the appointment of a former top JP Morgan executive to the position of White House Chief of Staff and the CTFC's concurrent decision to exclude JP's legacy concentrated positions in commodities from the CTFC position limits rules and probably all but virtually ending any meaningful actions by the CTFC into its long running investigation into the massive super concentrated and likely largely naked short positions in silver.

All this while silver has been in backwardization and major dealers all over the world are experiencing shortages in silver bullion, the Chinese have been increasing their silver purchases, the US mint hit a new record for silver Eagle sales and new application such anti-microbial and anti-bacterial silver compounds in clothing, hospitals and the public domain in general promise to move silver to new levels of importance and value.

The story at Zero Hedge is entitled: Goldman Goes Gaga Over Cyclical Commodities, Says Gold Run Is Ending As QE2 Comes To A Close (Full Commodity Update)

Here is an excerpt but please, read the article at Zero Hedge to see everything, including the great comments:

"…The key catalyst for Goldman's suddenly cautious view on gold (which still has a $1,690 price target): the end of QE2 in June 2011. So, presumably, when QE 3 is announced in May in order to allow the continued monetization of $4 trillion in debt issuance over the next 2 years, that should be very bullish for gold, yes? Irrelevant: Goldman has become just one more glorified Jim Cramer: pumping anything that is green, and dumping anything in which there is even a modest (CME margin hike driven) correction. …"

After reading this, keep in mind the long term fundamentals on silver and remember that despite the long term manipulations and fear and greed of the paper markets, that inventory, supply and demand are what affect the real price and long term value. Silver is volatile because it is a very small market, and silver is far more rare in my opinion than gold. Far more useful as well and in far shorter supply.

I think silver is far more precious and rare than Gold these days. Here are some of the reasons I believe this is so:

1. Above ground Available Silver bullion inventories have declined from about10 billion ounces in 1940 to around 1 billion today.

2. There is now approximately 3.8 billion ounces of above ground gold available.

3. Silver is not only a monetary precious metal but a highly useful and irreplaceable industrial metal used in high technology, medical and other manufacturing applications.

4. Very little of the silver used in industry is recycled.

5. The historic ratio between silver and gold is about 16.

6. The current ratio between silver and gold prices is about 48.

7. Physical demand for physical silver and silver coins is at all time highs and accelerating.

8. New applications of of silver (almost all non-recyclable) such as HeiQ Materials, which "manufactures high-performance textile effects for the most demanding functionalities," in the area of anti microbial and other anti-germ technology using silver compounds are expanding even as silver mining production is just beginning.

So, silver is actually substantially more rare than gold and yet the price ratios do not reflect the physical reality yet. This means that the long term price suppression of silver via the extreme concentrations of short positions by one or two of the largest Bullion banks has created a sling shot of potential upward price energy. If the CTFC investigation into silver price suppression or any of the current law suites, class action or otherwise, fully reveals the degree and level of ongoing suppression, silver may quickly revert to its historical ratios, and given its increasing rarity and industrial and technological usefulness, climb well beyond its less rare cousin, gold.

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As discussed in the previous article, even as the dollar is being crushed by the weight of debt load and the QE required to keep the US from defaulting, Gold and Silver have been under constant attack within the Ponzie paper markets and in the press. Have no fear. The physical markets get tighter by the day and despite the intense desire of the monetary authorities to cap and attack gold and silver prices through their handful of operatives among the US and UK bullion banks and derivatives houses in order to temporarily mask the massive wave of inflation and increasingly likely default the scope and depth of the hyperinflation coming is a force that illusion and fancy tricks can not halt.

Take this sustained attack as a tremendous gift to pick up more silver. What this article says is true and its only going to increase as the understanding of the condition of the US house of financial cards becomes more clear to more stable economies:

China buys gold and the world follows

excerpt:

“We are entering a period of strong seasonal growth in gold demand and Chinese New Year is a big part of that,” said Brien Lundin, editor of Gold Newsletter. “Physical demand has been supporting the gold prices on the downside even during the typical slack periods, and I expect that upcoming increase in demand will also support the price, but at higher levels.”

The Chinese New Year, also known as Lunar New Year, begins on Feb. 3 this year and ends with the Lantern Festival 15 days later.

“Chinese gold and silver demand has been phenomenal ahead of the New Year holiday,” said Adrian Ash, head of research at BullionVault.com, a leading online service for gold bullion trading and ownership, citing comments from dealers among others.

Shipments have been “heavy” and they began very early, in mid-December, he said.

“Chinese New Year is the time of year when the Chinese share gifts, usually money in little red envelopes,” said Mark Leibovit, chief market strategist for VRTrader.com. “Perhaps the little red envelopes will be a bit heavier this year.”

But the recent spike in China’s demand for gold goes well beyond providing gifts to celebrate the new year.

“It’s really simple,” said Cary Pinkowski, chief executive officer of Astur Gold /quotes/comstock/11v!e:ast (CA:AST 1.64, +0.09, +5.81%) . “China banned gold ownership for most of the 20th century and that’s over. China has a savings rate of more than 30% … [and] has an official inflation rate of 10%.”

On Thursday, data out of China showed that consumer inflation hit 4.6% year-on-year in December and GDP expanded by a faster-than-expected 9.8% year-on-year for the fourth quarter. The news sparked a global selloff in commodities and stocks on worries that the fast expansion would prompt policy makers to hike interest rates again. Read more on Chinese growth and inflation.

“The Chinese will buy more and more gold just as every other civilization has in inflationary times and with their high savings rates, they have the money to do it,” Pinkowski said. …"

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Why is it that I never get any good ideas from reading the mainstream financial "news"? As someone who has been following the writings of the Gold Anti Trust Action Committee for years, I am constantly finding that the the assertions that the mainstream works right along with the big manipulators and the the agenda of the government to constantly apply disinformation to manipulate the perceptions while the big bullion banks work hand and foot with the Fed to cap and suppress gold and silver prices as much as possible.

Here are some sights that talk about the methodologies of the disinformation process and techniques regularly used:

http://www.brasscheck.com/martin.html

http://www.whale.to/b/sweeney.html

There was a good article posted at Zero Hedge this morning dealing with an example of this continuous disinformation:

Suddenly, Gold Becomes a Pariah

excerpt:

There they go again! No sooner had we finished praising the Wall Street Journal for their blunt assessment of the coming train wreck in municipal bonds than they do a hit-job on gold. The article, which appeared in Thursday’s editions, would seem to have exhausted the inventory of clichés employed by establishmentarians these days to put the knock on the yellow stuff. Here’s their short list:

* Worries that China will “slam the brakes on its economy”
* Improving U.S. stats that diminish gold’s safe-haven status
* A too-strong rally in 2010 that has made “some” fund managers skeptical
* Stepped-up redemptions in SPDR Gold Shares
* A hike in margin requirements by the CME
* Markets that are “increasingly betting” against new Fed stimulus

And if all that weren’t enough, the authors of this piece, Carolyn Cui and Liam Poleven, trotted out Dennis Gartman, the Darth Vader of the precious-metals world, to spout the kind of vague hyperbole that could sound even dumber a few months down the road, as so many of Gartman’s bearish pronouncements on bullion have over the years. “Everywhere you went,” said Gartman, “everyone you knew was aggressive long [sic]. That’s a bad sign because it means everybody has already bought.”

"We might ask, have you bought gold yet? How about your relatives? Friends? Neighbors? That’s what we thought. It’s not exactly as ubiquitous as beer in the ‘fridge, is it? You can write Gartman c/o Kitco, to set the record straight. As for the bullet points listed above, even taken together they have about as much heft as a bullish economic forecast from the Fed chairman. For starters, although China’s slamming on the brakes could conceivably send the global economy into a fatal tailspin, that would only put more pressure on the Fed to monetize Treasury debt. Concerning the alleged improvement in the U.S. economy, it looks like little more than a blip in manufacturing to us – one that is vastly overshadowed by a gathering budget crisis at all levels of government. As for gold’s “too-strong,” 30% rally in 2010, mightn’t it prove to be just a warm-up for a push to heights that would actually begin to discount the intrinsic worthlessness of the world’s currencies? And how about those stepped-up SPDR redemptions? In fact, they’ve amounted to just 29.3 metric tons so far this year – too small an amount to even interest such sovereign buyers as China, India, Russia, Brazil and Saudi Arabia. As for the hike in futures margins, it’s just a banana peel tossed out by the regulators to give their friends, the bullion bankers, more time to cover. Finally, there are those bets against new Fed stimulus. That is one wager we’ll be eager to fade.

From a technical standpoint, we do see more downside to this shakeout – to at least 1322.20, basis the Comex February futures. That’s $24.30 below Thursday’s settlement price, and if it is reached, gold will have corrected a whopping six percent from December’s record highs. Frankly, because we like to see symmetry in our charts, we’d be more comfortable with a correction of 15% that matches the one that occurred at the beginning of last year. That would bring the price of gold down to about $1217. Whatever happens, and regardless of whether it is inflation or deflation that is perceived as the bigger threat, we would be inclined to view the selloff as merely corrective rather than the beginning of a long-term bear market…."

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No Surprises Here. Geithner talks to the Bernank, says China is flying in and we need to find some way to make the coming hyperinflation look less threatening during the visit so that we can cut a deal on letting the yuan rise against the dollar so that we can get even more hyperinflation. He then also calls his friends over at Crimex, says we need to do some to knock commodities down but especially silver and gold, but it can't be too obvious. So Crimex bosses say "done" and they RAISED MARGIN CALLS about 6% on gold and silver and a few other commodities to make the raid look not so obvious.

In the meantime the Bernank calls his friends over at the JP and their counterparts in the UK and that is the HB and tells them that Crimex will be bumping the margin calls and get ready to bump up your short positions strongly for a nice short term bump and to try to flush all the weak longs out and hopefully flush the other uncommitted and unsure gold and silver longs out. Then the other members of the team do the PR work calling in the normal shills and press people to make negative statements and certain "analysts" to make gold negative predictions.

Thing of it is, more and more investors, large and small no how this game is played and the one's who are smart, just take these major attacks as an opportunity to take delivery on more physical or buy trusted paper proxies, like PSLV and not the other one with the same letters except no "P" which the JP is the custodial for and which can be used in the attack on silver.

Here is the as always early and excellent article from the Tyler at the ZH:

Inflationary Guerilla Tactics Resume As Comex, Nymex Hike Margins On Gold, Silver, Cracks, Spreads And Other Products

excerpt:

"…Wonder why the smart money was rushing headlong out of gold and silver over the past few days, and especially today in the AM session? Here is your answer: in tried and true fashion the Comex just hiked margins in gold, and silver by about 6%, and threw in a few other commodities to mask things up. And unlike the last time it did it, when it could at least pretend to justify its actions with the surge in gold price, this time with the PM complex dropping, we wonder what excuse the CME will use this time. Initial and Maintenance margins were just increased in everything from 10 Tr Oz Gold Futs, Comex 100 Gold Futures, Comex Miny Gold and Silver, E-mini Gold and Silver, Comex 5000 silver futures to Silver trade at settle. Also added were Copper, Iron Ore, propane, butane, and other nat gas. Most notably, and confirming that the administration and the money printing authorities are terrified by the surge in crude, the CME also hiked margins in various refined products and coal. The official scramble to "contain" the aftermath of Bernanke's lunacy is accelerating. We wonder when REDI, Prime Brokers and E-trade will comparable collapse purchasing margin for stock trading accounts. Of course, as with all other such superficial market interventions, the impact is shallow and is overrun in a matter of days.

And no…there was absolutely no leak this time. We promise…."

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Sovereign Debt Problems are nearly Ubiquitous and not limited to the US and Europe but Japan and thought they won't publish it, I suspect China as well. When you have an authoritarian single party government ruled by a small ruling elite, transparency isn't high on the list and that includes all the state owned and operated bank balance sheets. None the less, in a fiat fractional reserve system such as ours, more credit in the system simply increases the risk of default via debt loads vs. GDP and other economic activity metrics. Increasingly the effectiveness of credit based currencies is proving to be highly inefficient.

The problems in Europe and the US are being covered up and are not going away. These are systemic structural problems within the entire fiat/fractional reserve system that can not be undone through even greater manipulation. In essence the massive and ongoing manipulations simply further corrupt the workings of truly fair and transparent free markets. Having zero regulation in financial derivatives is like having fully manipulated markets because when the underlying products are valued by computer programs rather than by supply and demand, there is no basis for appropriate metrics and efficient operations of basic laws of economics to operate from or on which to make honestly informed projections from.

James Turk has been right on target for years in his analysis of all things gold and silver in my view. Please enjoy this article posting from the GATA WEB site:

Sovereign debt problems worsen, support metals, Turk tells King World News

Here is an excerpt from the link posted at the GATA dispatch above:

"…With gold and silver getting hit hard today, King World News interviewed James Turk out of Spain. When asked about the recent action Turk commented, “The last time we spoke Eric, the two key overhead resistance levels I mentioned were $1,400 for gold and $30 for silver. I expect that we will be probing those resistance levels in the near future. The real question in my mind is whether we can take out these resistance levels on the first attempt, or whether the market needs to trade sideways longer in order to build more of a base.

"…Regardless, the risk here is not being in the market, because once these resistance levels are taken out, both metals are ready to explode to the upside.

Right now over here in Europe, the periphery countries such as Spain and Portugal are changing the way they borrow. Their bankers are putting together a syndicate of lenders so that neither country has a failed bond auction. The net effect is not only are they trying to paper over the sovereign debt crisis, now they are trying to hide it behind closed doors with these gimmicks.

Another slight of hand which has been getting a lot of attention recently is the accounting shenanigans by the Irish central bank. The unexplained build-up of other assets on its balance sheet suggests to me that they are playing a very dangerous game. Instead of allowing Irish commercial bank assets to contract to meet the decline in deposits at those banks, the authorities are relying on accounting deception.

If the bank run on Ireland continues, which is likely, the other assets on the Irish central bank’s balance sheet will not be able to be used to obtain liquidity from the ECB, thus potentially leaving Ireland in an illiquid, precarious monetary position. Interestingly, one would expect to see these steps from a country prior to that country exiting the Euro altogether. The question then becomes, is Ireland setting up to leave the Euro?

All of these indicators are simply bullish underpinnings which are paving the way for the next leg higher in both gold and silver…."

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While the attack on Silver by the operatives of the US and UK monetary authorities remains in full swing in their futile attempt to mask the avalanche of inflation and devaluation of the dollar, which is a promise to pay nothing, it turns out that one of the largest likely future applications that will greatly benefit humans in the battle against germs is of all things Silver.

It turns out that silver is not only an outstanding anti-bacterial substance but also an extremely effective anti-microbial agent. This and its long lasting properties and its ability to easily be microtized into various compounds to do things like keep odors out of shoes and keep medical clothing germ free are likely going to be a massively utilized process and put yet one more large input factor on silver demand.

This technology is already being used broadly, including in the army to keep troops feet from getting foot diseases when wearing combat boots for long period and in very tough environmental conditions.

You can get the full scoop on this growing application by reading Jeff Nielson's blog at Seeking Alpha:
Silver and Germ-Warfare

After reading this, keep in mind the long term fundamentals on silver and remember that despite the long term manipulations and fear and greed of the paper markets, that inventory, supply and demand are what affect the real price and long term value. Silver is volatile because it is a very small market, and silver is far more rare in my opinion than gold. Far more useful as well and in far shorter supply.

I think silver is far more precious and rare than Gold these days. Here are some of the reasons I believe this is so:

1. Above ground Available Silver bullion inventories have declined from about10 billion ounces in 1940 to around 1 billion today.

2. There is now approximately 3.8 billion ounces of above ground gold available.

3. Silver is not only a monetary precious metal but a highly useful and irreplaceable industrial metal used in high technology, medical and other manufacturing applications.

4. Very little of the silver used in industry is recycled.

5. The historic ratio between silver and gold is about 16.

6. The current ratio between silver and gold prices is about 48.

7. Physical demand for physical silver and silver coins is at all time highs and accelerating.

8. New applications of of silver (almost all non-recylable) such as HeiQ Materials, which "manufactures high-performance textile effects for the most demanding functionalities," in the area of anti microbial and other anti-germ technology using silver compounds are expanding even as silver mining production is just beginning.

So, silver is actually substantially more rare than gold and yet the price ratios do not reflect the physical reality yet. This means that the long term price suppression of silver via the extreme concentrations of short positions by one or two of the largest Bullion banks has created a sling shot of potential upward price energy. If the CTFC investigation into silver price suppression or any of the current law suites, class action or otherwise, fully reveals the degree and level of ongoing suppression, silver may quickly revert to its historical ratios, and given its increasing rarity and industrial and technological usefulness, climb well beyond its less rare cousin, gold.

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The normal players were able to use their leverage in both the derivatives and ETFs markets to raid silver today on a bunch of bogus "dollar supportive news." The real news is inflation and the coordinated attack for MOPE purposes that was orchestrated to correspond with China's visit. If they hit commodities too much harder expect the stock market to pull back hard. Bond were hit today by the MOPE.

The slightly lower employment number was not significant with claims remaining above 400,000 and the housing numbers were a nice blip, largely attributable to nervousness by sellers about the validity of their mortgage paper in the wake of the massive mortgage and foreclosure documentation scandal. Any positive there is completely wiped out by the massive wave of foreclosures that are coming in 2011 and the likelihood of increasingly less credit availability to the broader market is talk of eliminating the mortgage interest tax break and and requiring lenders to maintain 5% of any loan they try to sell into the securitization market (i.e. bundle and bungle), and with reform of Fannie and Freddie on the table, there is nothing to make me believe that the housing market has any place to go but down.

The fundamentals for inflation and silver remain the same. To get the scoop you won't get on the Mainstream media read these articles at Zero Hedge in regard to Inflation:

2s30s Hits Fresh 30 Year High, Just Shy Of 400 bps

Food Inflation Comes To America: General Mills, Kraft And Kellogg Hike Prices On Selected Food Products

Marc Faber On Global Food Inflation And His Stock Market Outlook

Philly Fed Misses Expectations, Comes At 19.3, Admits Broad Price Increases

With the yield on the long end climbing (prices dropping) expect much stronger QE in the longer dated maturities. There is no way out of the massive un-repayable debt other than infinite QE in my opinion.

As I've said, if interest rates rise to 5% on the payments we make just to service the current US federal sovereign debt of $14 Trillion, over half of the discretionary budget money will have to go towards paying that debt. At 10% we will have to default. The hole the Fed has dug and that the decision to go fiat by Richard M. Nixon and others has put us in a debt black hole and we are past the event horizon. Now we are just buying time.

Having read that, then again, keep these facts and thoughts in mind and remember to buy physical if possible and reliable trusts such as Sprott's Physical Silver Trust PSLV on the pull backs and hold for the long term:

I think silver is far more precious and rare than Gold these days. Here are some of the reasons I believe this is so:

1. Above ground Available Silver bullion inventories have declined from about10 billion ounces in 1940 to around 1 billion today.

2. There is now approximately 3.8 billion ounces of above ground gold available.

3. Silver is not only a monetary precious metal but a highly useful and irreplaceable industrial metal used in high technology, medical and other manufacturing applications.

4. Very little of the silver used in industry is recycled.

5. The historic ratio between silver and gold is about 16.

6. The current ratio between silver and gold prices is about 48.

7. Physical demand for physical silver and silver coins is at all time highs and accelerating.

8. New applications of of silver (almost all non-recylable) such as HeiQ Materials, which "manufactures high-performance textile effects for the most demanding functionalities," in the area of anti microbial and other anti-germ technology using silver compounds are expanding even as silver mining production is just beginning.

So, silver is actually substantially more rare than gold and yet the price ratios do not reflect the physical reality yet. This means that the long term price suppression of silver via the extreme concentrations of short positions by one or two of the largest Bullion banks has created a sling shot of potential upward price energy. If the CTFC investigation into silver price suppression or any of the current law suites, class action or otherwise, fully reveals the degree and level of ongoing suppression, silver may quickly revert to its historical ratios, and given its increasing rarity and industrial and technological usefulness, climb well beyond its less rare cousin, gold.

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