Has The Attack On The Silver Shorts Petered Out?

February 2, 2021

* Gold & Silver rally on Monday, get sold on Tuesday

* Dollar Traders are between a rock and another rock! 

Good Day… And a Tom Terrific Tuesday to you! And It’s Groundhog Day!  Well, we saw day one of the Reddit WSB folks go after the Silver shorts. But then the short sellers came back and pushed the price of Silver back below $30, for the day… This will be day two, I wonder what it has in store for us? No Mizzou, or St. Louis U., or Blues on TV last night, so I pulled out my current Harry Bosch Book and picked up where I left off… Then I decided to check the markets and see what there was that I could talk about today…  And just about everybody and their brother was talking about The attack on the Silver Shorts… So, I’ll talk some more about that this morning, and the usual fare… No long essays like yesterday, I can proise you that! The Ozark Mountain Daredevils greet me this morning with their song: Jackie Blue… 

Alrighty then… So, the Redditt WSB folks had some fun yesterday, mostly in the Asian markets Sunday night/ Monday morning.  Yesterday, I told you that I thought that these folks could push the price of Silver higher, but without a delivery process of the metal, bringing the COMEX to its knees, I didn’t think they would be able to rid the markets of the short sellers of metals…  Well, I still stand by that thought, although I did think of a way it could work…

If they bought the SLV ETF, in mass quantities it would cause the trust company for the ETF to have to buy large quantities of physical Silver for their vaults to match the ounces held in the SLV ETF. This could act as the delivery method… and as long as the price of Silver continued to go higher, then the shorts would be squeezed, but I still don’t think it would drive them away to the sewers with the other rats, where they belong!   Or, if the youngsters doing the buying were to actually take a wealth position in physical Silver… And not treat it like a commodity, but a store of wealth, that would work… So, you’re telling me there’s a chance? Yes, that’s what I’m telling you… It would be a longshot, but as I told my good friend Rick yesterday, “This is a fight between We The People and the casino bullion banks”

If anything, the Redditt WSB folks have brought the naked short sellers to the public’s eye, and now more and more people are aware of the dirty deeds done dirt cheap, by the price manipulators!

OK… now the markets, which besides Gold & Silver were dead as door nails…  I had mistakenly said that the euro was rising yesterday morning, when it was really running in place, and kept running in place all day. The dollar traders are really between a rock and rock… They know that right here, right now, the dollar should be getting sold… but then they keep hearing economists say that the 2nd half of this year will be rip roarin’ economic growth, and that would mean they should be long dollars…  But for 6 months before what these knuckleheads are thinking will be rip a rip roarin’ economy, and then find out it’s not?   Seems to me to be a real layup if I were a dollar trader… I would be selling my stock of dollars and buying something… But certainly not be long dollars in anticipation of what “could be, and probably won’t be”… 

Gold couldn’t hold its early morning gains, but still held on to a $13 gain to close at $1,862.20, and Silver did the same holding on to a $1.57 gain to close at $29.55…  so I read yesterday, that Silver dealers are already seeing supply limitations, and rising premiums for coins and bars…  You see, what the WSB folks didn’t think about is how many people are involved in this keeping a lid on the price of Silver & Gold….   The Bullion banks can simply say there’s demand for the metal and begin jacking up the premiums and minting prices to make, in this case, Silver more expensive…  Dirty deeds, done dirt cheap!

And when they show Silver coins at a metals dealer’s shop on the 10:00 local news, you know that the message is getting through… But when the Uber driver asks if you own any Silver, well, that’s a different direction….

In the overnight markets, it’s been a different story for Gold & Silver, as they have been sold so heavily that all their gains from yesterday have been wiped out.. Gold is down $17, and Silver is down $1.73 today… You don’t think… Nah, that couldn’t have happened so quickly… But maybe, just maybe, ’cause you never know…  That the short sellers went in big time to show these youngsters a thing or two about trading…  If that’s the case, then it was nice knowing you defenders of the assets sold short… 

Every thing is down today… Bonds are down, currencies are down, and metals are down… So I guess I can’t say “everything is down” because the price of Oil has jumped to a $54 handle in the last 24 hours, from the previous level of $52… And for those of you who give two hoots, the stock futures are up this morning, indicating a good day for stocks… 

I talked yesterday about how Personal Spending has gone south of the border for the last 3 months, totaling a 10% decline…  And I don’t think I put enough emphasis on that number…  And like I said sarcastically and they expect me to believe the same period GDP was up 4%?   Think about that for a minute folks… In the U.S. Consumption or Consumer Spending is the bulk of the formula for GDP, and without spending/ consumption, there’s no freakin’ way that GDP was that strong!  I know, I know I’m simply using logic again… I don’t sit in a smoke filled room with a green plastic shade on my forehead, figuring out ways to deceive the people of the U.S.  And in my mind that’s exactly the scenario that goes on!

The U.S. Data Cupboard got right into the job of printing economic data yesterday, when the ISM (manufacturing index) Index fell from 60 to 58… And that was for January… There were more business shutdowns in  December so that all makes sense, but what I question is why it didn’t fall further?  Oh well…  We were supposed to see motor vehicle sales for January, but I guess the print was not ready for prime time…

Today’s Data Cupboard goes back to empty, but we will have 3 Cartel, I mean Fed, speakers: Kaplan, Williams and Meister on the speaking circuit today… I would look for them all to be whining and crying about how the economy needs those stimmy checks…

To recap… The currencies did nothing yesterday, and Chuck believes currency traders are between a rock and a rock… Gold & Silver couldn’t hold their early gains during the day yesterday, but still had good gains to close out the day… Silver hit a multi-year high, and Chuck decides to explain how the Redditt WSB folks can achieve their goals… the anti-dollar assets are getting sold overnight though, indicating that this could be an ugly day…  And Chuck revisits the Consumer Spending reports from yesterday… And today’s letter is much, much shorter!

For What It’s Worth… Well, I have a follow up article to the one I had yesterday, regarding the Robinhood brokerage problems…  I know all the conspiracy folks think that Robinhood had to shut down trading to help the Hedge funds… But it goes deeper than that folks… With all the newfound activity Robinhood was required to put up more collateral at the Clearing Corp. (DTC) And that story can be found here: Why Robinhood Had to Risk Infuriating Its Customers – The New York Times (nytimes.com)

Or, here’s your snippet:” Robinhood faces a loss of confidence from customers. After becoming the venue of choice for small investors, the app risks alienating a core customer base — and feelings of betrayal over the trading limits may be harder to address than annoyance over technical outages. (Small groups of protesters gathered in New York and outside Robinhood’s Bay Area headquarters yesterday.) “Brokers are now ‘protecting’ customers as a façade so that they can appease their institutional backers,” one individual trader told Bloomberg. “The entire community is outraged.”

The surge in trading forced Robinhood to raise cash. As waves of investors poured into the markets, Wall Street’s central clearing hub, the Depository Trust and Clearing Corporation, demanded billions more in collateral from brokerages to shield it from the volatility. Robinhood, which had already drawn millions from its credit lines to meet margin requirements, turned to existing investors for additional capital so it wouldn’t have to impose further limits on customer trades.

A more detailed explanation: Brokerages post money with the D.T.C.C. to cover customers’ transactions while they wait for the trades to settle. With such a big surge in trading, the clearing hub wanted more assurance: “It’s the D.T.C.C. saying ‘This stuff is just too risky,’ ” said the Bloomberg Intelligence analyst Larry Tabb.

Other online brokerages also cited the D.T.C.C. as a factor in decisions to impose trading restrictions.”

Chuck Again…  I know these problems are usually not my cup-o-tea, but this is BIG NEWS folks… And I’ve had my fun throwing shade on the Robinhood crowd, but in this case I do believe they are in the right, demanding that their trading platform accept the trades they are entering! 

Market Prices  2/2/2021: American Style: A$ .7608,  kiwi .7160, C$ .7805, euro 1.2030, sterling 1.3673, Swiss $1.1136, European Style: rand 14.9701, krone 8.6048, SEK 8.4403,  forint 295.51,  zloty 3.7424,  koruna 21.6408, RUB 75.85, yen 105.05, sing 1.3326, HKD 7.7515, INR 73.08, China 6.4611, peso 20.21, BRL 5.4547,  Dollar Index 91.14,  Oil $54.80,  10-year 1.11%, Silver $27.82, Platinum $1,101.00, Palladium $2,340.00, Copper $3.50, and Gold.. $1,844.70

That’s it for today… Well Phil the Groundhog will be poking his head out to not see his shadow very soon this morning…  Not seeing his shadow means spring will be early… And I’m betting a shiny quarter that those folks up in the northeast, would be glad to hear that!   The Cardinals made a blockbuster trade this weekend that was finalized yesterday. The Cardinals get the best 3rd Baseman in baseball, and the big bat they’ve longed for, by trading for Nolan Arenado…   Yes, we had to give up some young talent, but we needed a 3rd baseman that could hit, and we got him! Arenado on one corner of the infield and Paul Goldschmidt on the other corner!  And I received an email yesterday morning from the folks at Roger Dean Stadium telling me that the tickets sale was going to be delayed… UGH!  I am amped up about this trade, and now really can’t wait for pitchers and catchers to report!  Jimmy Cliff takes us to the finish line today with his song: Hello Sunshine… “Will old darkness be my friend. Hello Sunshine To this you can put an end.”    I hope you have a Tom Terrific and shadowy Groundhog Day, and Please Be Good To Yourself!

Chuck Butler