The agreement is pure BS but it is enough to push things higher. What all these governments are saying is that they are willing to print, print and print money. For now I will let TYH ride. Silver has had a nice move - if you buy, buy some Silver Eagles. Do NOT buy numismatic coins and use a reputable dealer AND take delivery. You will get the best value if you buy a " monster box ". These contain 500 coins and will cost a little under $ 20,000 at the moment. As I have said before - silver coins are not for trading. They are an insurance against a complete collapse of the Central Banking system if that should occure. Back on Europe - now the PIIGS have a taste for it there will be a complete default not a "50% hair cut ".
I have followed silver since I first went to work for Merrill Lynch in the 1970's. At one time I was their European Specialist and as part of this job I would fly to Dubai and meet with the dealers who shipped silver from India to London vis Dubai. I may not know many things but I know Silver. Read this article:
http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=22646:slv-and-silver-manipulation&catid=49:silver-commentary&Itemid=130 It may not be completely accurate but it is close. There is a huge short position in silver as there is in gold. The difference is that governments all over the world own a lot of gold. THEY DO NOT OWN MUCH SILVER - except perhaps China. Most people are not aware that there is actually more gold in the world than there is silver. The current differential is 51:1 in favour of gold. The differential should be nearer to 15:1. We may never see that differential because unlike humans governments of some kind live for ever and they have a big investment in gold. Having said that silver is a critical component of modern technology and will be increasingly consumed. IF you ever want to leave a gift for your grand children SILVER would be it ! There is a high probability that the silver manipulation using SLV will last many years. If you look at the Sprott's fund in Canada it trades at a premium of around 20% to the silver market - because it is fully convertible. This is the real price of silver. I fully expect over the years ahead to see SLV and other exchange funds trade at an increasing discount to physical silver. I am not a big fan of Federal market manipulation it will all end badly. I am a big fan of Silver Eagles and even Gold Eagles. They are minted by the US Government and as opposed to much of the rest of government they are HONEST. If you buy Eagles you should not buy numismatic coins and you should not buy them to trade. You buy them as a legacy for your grandchildren. This is one of the best things you could ever do ! Silver is still lagging behind Gold and there are many who feel that it has broken down technically but despite this lease rates apprear to be going up and there are reports of tightness in the physical market. December is a big delivery month. Right now I think stocks may be a better play but Silver is still worth watching. The 51:1 ratio to gold is too wide and we could see tat ration narrow back to 40:1 if metals get strong.
The rescue saga will continue. At some point all the PIIGS will default just like Argentina and other countries have done in the past. The focus here is to protect the banks and allow them to hide their losses. I think the dollar has been weak because there is some recognition that some form of Q3 that also helps Europe has to occure. In the meantime China will be buying US stocks instead of Treasuries. Of all the "games" the Fed has played the "juicing" of stocks in 2009 worked best - so we can see a repeat of this as we run up to the next election. I trade short term but we may have the start of a multi month bull market in stocks so as a rule I will tend to trade from the long side but with stops. At some point the music will stop and this financial system will implode but I do not think we are there yet. TYH hasn't been a good purchase so far but I am still on board.
Jumped at the start and then declined to lower/unchanged where I have added to my long position. This is not a trade I will hold if it starts to go bad.
I bought a few hundred shares of TYH into the close - mainly because the news has been so bad that a surprise, if any, might be that we hear better news. This is just a short term trade ( at least for now ) and not for the faint hearted.
http://globaleconomicanalysis.blogspot.com/ A sign of things to come. The obvious trade is a short but I cannot help thinking that thay will come up with a "solution" that rallies stocks. If this means we miss the downside trade so be it. Gold and Silver also look strong but have not broken their down trends and the Dollar - probably the easiest trade - has a big speculative following and I cannot see a European solution that doesn't involve a massive injection of cash/liquidity from the US - which would be bad for the Dollar at least for a while. So I am still on the side lines.
The market is soft today but not falling to pieces. I would like to sell but will probably wait until they make a "wonderful" solution to Europe's problems and then sell on a rally. For now nothing. I am looking at buying gold or silver and the dollar but nothing yet.
Markets have been quiet. If we look ahead we have budget issues in the US and Europe is still a mess. If banks take a 60% haircut on Greece they will have to do so on Ireland Italy Span etc. We are approaching debt exhaustion. People pay debts until they know there is no more money coming and then they stop paying. The only unknown factor is will the Fed buy up the stock market like it did in 2009. Fundamentals mean nothing if the Fed is there to "juice" things up every day. Still the trade with the best odds is to take short positions here if we see a bounce or if we see things start to break down. As of now I am flat but looking to pull the trigger.
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