31 December 2010

Bull Breakout Can Carry Silver to 37.50 With a Spike to 40

Its a bit tough to forecast this rise in silver because of the nature of the rally which is a price breakout precipitated by the collapse of a market manipulation. The large naked short positions have yet to be covered.

Few people yet understand what is happening here. Silver is being re-monetized, and the back of the silver bear cartel is being broken on a wheel of global demand, shredding their paper pyramid schemes.

If there is no panic liquidation because of a collapse in China or US equities it appears quite possible for silver to reach the 37.50 target on its fourth leg up, with a spike to 40 possible.

If there is no spike higher then a steady climb can keep going until the market clears and the bears deliver their promised bullion, made available by higher prices. What that price will be is difficult to forecast because of the lack of transparency and excess of duplicity in the market fundamentals as they are publicly disclosed.

The more I think about how these markets are managed and regulated, especially in light of the 'mystery trader' who currently holds 90% of the copper at the LBMA, approaching a 'corner on the market,' and the enormous leverage and naked shorting in the 'bullion markets,' the more ridiculous they seem to be in terms of a productive economic market function and capital allocation system.

If as stated the market participants driving these schemes are recently bailed out Too Big To Fail Banks utilizing reserve currency freshly printed by Anglo-American banking cartel, then this is an absolute discrace, even worse than the manipulation of key commodities which flourished under Enron.