On PM pundits

Discussion in 'Silver' started by Jim4silver, Dec 18, 2015.

  1. Jim4silver

    Jim4silver Well-Known Member

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    Here is one for you. This pundit has been bearish on gold (in US dollars) for a long time and has been right on that call. He now is bullish on gold in US dollars. I remember on some PM blogs a few years ago this guy was hated because he was bearish on PM's. I am not vouching for him in any way, but I have followed him on gold over the past few years and he has been right on. He was long gold in a couple non US currencies (Euro and something else?) and I remember those trades did well during that time.

    Here it is FWIW.

    http://www.cnbc.com/2015/12/22/something-enormously-rare-is-happening-in-gold-gartman.html


    Jim
     
  2. dccpa

    dccpa Active Member

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    Gartman is a short term trader who switches back and forth between short and long, including gold. He is often wrong, but he is on so often people forget his bad calls.
     
  3. silverbullion

    silverbullion New Member

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  4. Jim4silver

    Jim4silver Well-Known Member

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    Looks like he is right so far on this. Who knows when they will smack it down again?

    Jim
     
  5. Jim4silver

    Jim4silver Well-Known Member

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    I still have a hard time believing some of these pundits are simply "wrong" PM bugs and not intentionally misleading folks. In the below link, we read how Comex is draining the vaults again so to speak. We see these articles about gold and silver. Don't these pundits realize the gold and silver can be REPLENISHED?

    I guess they think when the inventory in Comex gets low that means all the silver and gold in the world are used up? Yet day after day we keep seeing stupid articles about the Comex running dry. It seems that sites selling PM's like to run such articles day after day. I wonder why that is? (sarcasm icon).

    I am as much of a PM bug as anyone else and even I can see this is rubbish.

    http://www.silverdoctors.com/comex-registered-silver-inventories-plunge-nearly-10-in-one-day/

    Just my opinion.

    Jim
     
  6. silverbullion

    silverbullion New Member

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    I agree with you. In addition, what in the Comex cannot be papered over? I believe they have changed the rules to the effect that physical gold and silver have very little to no bearing on what they're doing. So how can the Comex be an accurate source of what's happening in the physical gold and silver markets, both in terms of demand and supply? Yes, believing the BS they sell can affect prices and in turn supply and demand to some extent, but it is certainly not the alpha and omega. I mean, there are millions upon millions of ounces of gold and silver within private hands, over which the Comex has no control over whatsoever, except if one is dumb enough to buy or sell based on their BS. Or am I missing something?
     
  7. Jim4silver

    Jim4silver Well-Known Member

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    I think it is just an angle for some pundits to rant about although in the real world it is meaningless. Having said that, if someone has a long contract on Comex and demands delivery the short has to supply the silver or whatever it is, otherwise it is a DEFAULT. Defaults on the Comex are almost non-existent absent a declared force majeure, in which case it would not be a true default because the force majeure means it is virtually impossible to deliver whatever the commodity is, usually due to some unforeseen calamity- but even then the duty to deliver is stayed only temporarily until the issue preventing delivery is remedied.

    Some pundits say Comex can be settled with cash by seller against the long's wishes but that is BS! If that ever happens these same pundits would be writing 100 articles a day saying "COMEX DEFAULTS!! Yay we win", etc. The fact is that not many longs ask for delivery because there are easier ways to buy large amounts of PMs than having to screw around with the Comex process of getting delivery. Comex is primarily a paper casino that was originally designed for hedging by parties involved in commodities businesses who wanted some certainty on how much money they would make on the their crops, metals, etc in a given season. I believe it has morphed into a casino where those with the deepest pockets get to move prices in whatever direction they want (at least temporarily) even though the underlying commodity and its fundamentals never enter the equation- ie naked short selling, etc.

    Just my opinion.

    Jim
     
  8. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    You are missing something.
    One word.... arbitrage. It is the leveller and ensures no disconnect, and maintains the supply/demand pricing.
    The physical in private hands means nothing... this metal is not in the market.
    COMEX is not a market controller, it is merely an exchange. COMEX has no direct control, nor interest in physical - they merely register physical stocks for their members.
     
  9. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    Long's can't demand delivery.
    This is a permabull fallacy invented for no other means but to deceive.
    You may like to have a look at this: http://forums.silverstackers.com/message-849064.html#p849064
     
  10. Jim4silver

    Jim4silver Well-Known Member

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    You actually proved my point in your link:

    "802.B. Satisfaction of Clearing House Obligations
    If the Clearing House is unable, using the defaulting clearing member's collateral as set forth in Rule 802.A, to satisfy all of the clearing member's obligations to the Clearing House then such obligations shall be met and made good promptly by the Clearing House pursuant to this Rule 802.B."

    So you are right in a sense, but if that happens it is a DEFAULT. If a DEFAULT happens then yes the long does not get his metal. However there have been no defaults that I am aware of in a long time. Some come to places like this and say longs today are being forced to accept cash and it is being "kept secret" BS!

    Show me a time there has been a DEFAULT in the Comex PM market in the past 10 years (or more) absent a declared force majeure. You cannot because it has NOT happened. If that day comes we will read about it. So for now a long can demand delivery and if the short fails, it is a DEFAULT. Come class, let's all say DEFAULT together.....

    If there ever is a DEFAULT it will be over for the Comex that is why they will never let it happen. Never ever ever. So in a real world non theoretical sense a long CAN demand delivery and will get it, rule 802b notwithstanding. If the short can't deliver because there is no silver available they will declare a force majeure. So in reality there is either silver delivered or a declared force majeure.

    EDIT:
    I went and did a quick review on 802b and that is for individual members who default, which really doesn't even apply here. The failure to deliver we are discussing is more that the silver is GONE, not an individual short's failure that might be due to said seller's lack of liquidity or other such type of problem, not because there is no silver on the market. If there was no silver on the market it would be a force majeure anyway not a true default. Thus 802b is not even relevant here unless some random short has financial problems then the long demanding delivery might face a default. Further review shows that in these instances the clearing house gets involved and can do various things to try and make sure the long does not get shafted.

    Jim
     
  11. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    Wrong.
    I repeat - a long cannot demand delivery.
    Only the short seller can issue a "Notice of Intention to Deliver".
    You might want to read it again.
     
  12. Jim4silver

    Jim4silver Well-Known Member

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    You are playing word games. If I am a long and I don't wish to settle in cash, I will get my metals or whatever commodity it is if I take the necessary steps. You are saying if I am a long and I want delivery I have to hope and pray that the short wants to deliver metals to me otherwise I am screwed and can't get them? That is insane.

    I trust "Zack's" view more than yours on this. This says just what I was saying, and does say in a worse case scenario of no metals available they could settle in cash but again that would be a real DEFAULT and hasn't happened in at least the past 10 years since I have paid attention to all of this.

    http://finance.zacks.com/can-comex-default-delivery-11599.html

    Jim
     
  13. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    I'm not playing word games - I'll leave that to zerohedge and seekingalpha.
    A long can stand for delivery, in which case the contract is matched with a short "Notice of intention to deliver".
    What is insane is to believe a short would file the Notice of Intention to Deliver without having the holdings to settle.
    Outside of this, delivery does not have to (and usually doesn't) occur through a COMEX warehouse (EFP's). I suggest you read up on the EFP process.

    BTW, at first glance, Zack's article seems credible, but nowhere does he state longs can demand delivery.
     
  14. Jim4silver

    Jim4silver Well-Known Member

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    OK let's not say demand delivery. Here is what the article says,

    "However, if a trader decides to hold contracts to maturity and take delivery of the specified amount of metal, the Chicago Mercantile Exchange, or CME -- owner of the COMEX -- keeps significant amounts of gold and silver on deposit for delivery to any futures trader who wants to turn a futures position into physical metal."

    So basically when I say "demand delivery" I mean to take the necessary and appropriate steps the Comex requires to take delivery. As a long that is my job if I want the metal. You are trying to make it sound like if a long wants metals, he may or may not have that chance and it is not up to him (the long) which is BUNK at least in today's Comex world.

    In reality, a long on Comex can get his silver if he wants to and takes the necessary steps. That is all I am saying. You can use whatever words you want to describe it, pray for delivery, take delivery, dream of delivery, manifest delivery, etc (I say demand delivery) . Anyone saying longs can get settled for cash right now against the long's wishes and have that incident not be declared a DEFAULT is wrong (assuming again a non force maejure instance). If DEFAULTS were taking place now in the comex metals markets don't you think the PM pundits would be going crazy showing the proof that a default happened?

    Jim
     
  15. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    100% Agree.
     
  16. silverbullion

    silverbullion New Member

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    The arbitrage that you're in reference to is based on something that for most part doesn't exist. It can be papered over or used to manipulate prices. True arbitrage is the simultaneous purchase and sale of an asset in order to profit from a difference in the price.

    Physical gold and silver in private hands are part of the market and should have an impact on prices in a free market, both on the supply and demand side. Physical gold and silver in private hands are moved every day as some buy and others sell. To claim that it means nothing, is to deny the multi-million dollar transaction volume and physical ounces that flow in and out of private hands every day. How can that not be part of the market?

    You claim that the COMEX is not a market, yet it is even stated on their website that "COMEX is a Designated Contract Market that offers products subject to COMEX rules and regulations" (http://www.cmegroup.com/company/comex.html). Most transactions that happen via the COMEX are settled in paper with no or little prove that the underlying physical metal actually exists. Here is an excellent article on the subject: http://investmentwatchblog.com/four-reasons-comex-wont-default-or-collapse/
     
  17. Jim4silver

    Jim4silver Well-Known Member

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  18. Jim4silver

    Jim4silver Well-Known Member

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  19. dccpa

    dccpa Active Member

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    I used to read him, but it was always gold and silver going up because of China and India demand. Crops were not good this season in India and the farmers won't buy as much gold as normal. I expect the Chinese to buy less this year too.
     
  20. Jim4silver

    Jim4silver Well-Known Member

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    Wow, here is some fear porn for you. I disagree with this writer's opinion. They will never let the Comex fail to deliver. They will either find the PM's to deliver, or the price will rise and more PM's will enter the "system" to satisfy deliveries. Those professing that the Comex will fail to deliver on PM's and thus bring about the crash of the financial system are misguided at the very least.

    PS He mentions that they might be now settling in cash with a premium instead of delivering (AGAINST the longs' wishes for delivery). I have seen others say this and some even say the recipient must sign a non-disclosure about the cash settlement and getting the extra "premium" and thus keep quiet. That is the most ridiculous thing I've heard of in the PM camp, or close to it. If that were true, don't you think those wealthy folks, like those running hedge funds (some of which have not done so well the past couple of years), would immediately throw billions into long contracts and demand delivery, then quietly make guaranteed "premiums" all day long and never have to take delivery? Word would get out fast if such settlements were currently taking place (against the wishes of the long for delivery). Whenever I see any poster profess these forced settlements for cash (plus premiums) it automatically makes me think they are misguided and regurgitating what they've heard or worse, liars.

    Caveat: If Comex ever were to "fail to deliver" PM's, it would be done by design. For what reason I can't imagine, thus I don't see it happening, but if it did happen, it won't be an "oops we ran out of gold somehow" moment. Those guys are not that dumb.

    http://www.silverdoctors.com/global...rs-of-comex-gold-delivery-failure/#more-63173

    Just my opinion.

    Jim
     

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