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     Nbkfan123 Pilla Bewarse Username: Nbkfan123 Post Number: 135 Registered: 11-2010 Rating: N/A |
When the COT report was released today, showing a Net Commercial Short (NCS) position of just 12,011 contracts, I had to download the data from the past 26 years at the CFTC website and investigate. I have highlighted the top 50 (Red = time to sell) and bottom 50 (Green = time to buy) NCS positions reported over the past 26 years. The NCS position has not been this low in almost 10 years, since September 10, 2011, the day before 9/11. Still think 9/11 wasn't an inside job, when somehow silver and gold were walked down to multi-year lows in late August/early September 2011, when silver jumped 11% and gold 9% in just a few trading days? If you knew that there was going to be a fear-based rush into gold and silver, you'd definitely want it to happen at the multi-year price lows, wouldn't you? The only other time that the NCS position has been this low since the 1980's was in 1997, in the midst of the Asian Contagion where fears of financial contagion and global economic collapse were rampant. Silver was driven from $5.50 in January 1997 down to a low of $4.20 in July 1997 (a 30% decline), just as silver was driven from 37$ in January 2012 down to 27$ in July 2012 (a 37% decline) on a similar massive decrease in the NCS position. The good news is that after hitting that low of $4.20, silver rapidly ran up to $7.80 in February 1998 just 7 months later, an 86% increase. I have been predicting a similar explosion next Summer/Fall 2013 in the silver price to $75-80. Some people here seem to think that $22 silver is likely. For that to happen, the Net Commercial Short position would have to go under 5000 contracts, which has happened only ONCE in the past 26 years, on July 29, 1997, at a multi-year low for the silver price. Investors who bought that week made huge returns in under a year. The NSC position was also briefly under 12,000 contracts in 1986 during the Savings and Loan crisis. The takeaway here is that during major financial crises in which the solvency and viability of the banking system and/or economic future is in question, the silver price is smashed aggressively, wiping out the longs, allowing the shorts to cover and make huge profits, and keeping investors out of precious metals and in worthless paper assets until the crisis passes. The important thing to note is that silver always rebounds strongly from these lows, making at least 50% gains within 12 months. I expect a similar performance this time around. I feel that this is the time to buy with both hands, because the Commercial Bullion banks (widely believed to have been manipulating the price of silver for their own profit for decades by building up huge short positions over periods of many months, then instigating sudden massive price declines, allowing them to cover their shorts and make huge profits) appear to be exiting their short position, possibly in anticipation of an absolute explosion in silver demand and price. I would not be surprised if JP Morgan is now the only Commercial bullion bank remaining with a significant silver short position. As an agent of the US government, they are in fact mandated to manipulate the price of silver to keep people in paper assets and out of value-based currencies like silver and gold. We are truly living in unprecedented times, but we can learn from history and use that knowledge to profit. BUY. SILVER. NOW. __________________ courtesy-kitco forums |