miscreanity, you know i know you really well. tell me you're not buying puts on gold and silver like mad right now. you know you're making it worse...
But, I'm not. Last year, I stated that I would probably not be in traditional markets at all after that cycle's conclusion. We're now past the apogee of that cycle, yet there has been a tremendous effort to prevent it from oscillating back naturally. I'd taken a small loss because the time-frame was stretched. Even if I were to make a fully realized paper profit, there is too much potential for it to become inaccessible because of other circumstances, a la MF Global. That's in addition to the devaluation risk, which could heavily negate any profits if I'm prevented from moving funds effectively.
In light of the above, I decided in February that any and all assets exposed to western finance would be at too great a risk. Only a token amount is in play now, and just in extremely liquid currency markets. The long AUD/USD, long EUR/AUD trade was a very nice 12-hour payday, not to mention the interest spread before AUD/USD was stopped out. I now have a short EUR/USD, short USD/CHF trade in play and am expecting the former to approach 1.25 before I close that out and increase the latter.
As for gold and silver, physical is still everything. Gold below $1,000 was left behind a long time ago, and the same is happening with $1,650. If you don't have physical metal
, this is the last chance at these prices before they're never seen again in present-day fiat terms.
The rules are being changed. TF Metals
outlines the situation nicely, in particular: "I think this is all a big setup. However, this time, it's an opposite setup to what we're used to."
Other than gold & silver (for the foreseeable future
) - Bitcoin, Bitcoin, Bitcoin.
1) Mining shares are among the most heavily _naked_ shorted these days. Probably ETF's as well. Since it serves various powerful interests to depress the fiat price of PMs, there is next to no possibility that these crimes will analyzed (except to further facilitate them.) I predict that if/when the share prices explode, very few people will actually see a monetary reward unless they are either very well connected or thinking very independently and orthogonaly about how to capitalize.
2) A component of the high frequency trading which is endemic at present exist to provide a mechanism by which mountains of naked shorted paper are hidden in plain site. The mechanism would be similar to trying to keep track of bowling pins handled by a large team of very talented juggling artists.
3) The main purpose of the MF Global 'fiasco' was to establish in case law certain surprising principles which had been codified into written into the books over the preceding decade about who shoulders what losses in the event of a collapse.
#2 is one of the few hypothesis that I believe is completely my own invention. #3 may be, but I'm not so sure.
Dead-on with all three, the first especially so. It's why owning physical metal is so important. For shares, Mr. Sinclair has warned multiple times
that owners should register their holdings as book entries with the respective company's transfer agent so that your ownership is recorded in more than one place (i.e. the broker). Rehypothecation would at least be mitigated to an extent because proof of ownership is not dependent just on your word against the street name holding. Anyone who might have done this would either be a priority concern over all other claimants in the MF Global fiasco, or have already had 100% asset return.
For #2, there's no need to even hide anymore. Awareness of how the markets work today is so far beyond most investors' ken that the only thing that matters is the price chart. Unlike the savvy individuals in this thread and the professional investment/trading community, most have no clue how volume or psychology relate to markets. Many engage in wilful ignorance of the underlying dynamics, remaining limited only to what they've been trained in. On top of that, the velocity that you point out makes it hard for even pros to keep up with events.
The way I look at #3, case law was related but had less to do with MFG than the response of capital; a vast majority of investment wealth likely didn't respond at all, meaning owners have been reasonably conditioned into complacency regarding such events.
Imagine finding some of your money missing from your wallet every morning. Some thief in the night came along and took it. Fast forward a bit and the thief walks into your home and lifts the cash right in front of you, but you're so used to it you think it's normal, or are so busy you can't make the effort to stop it. A conditioned response, no-win for the rightful owner and win-win for the thief.