Negative Silver Lease Rates and Smack Downs

[tony]

There seems to be a strong correlation between negative lease of rates of -0.4 (or more in terms of magnitude - ie: -0.5, etc), and smack-downs in price - TF Metals had a thread discussing this.

So, we've had our smack down on leap day when lease rates were at -0.49%. Since then, lease rates have backed off, but are still quite high - currently around -0.44%. I'm thinking that there might be a smack down over the weekend.

We've seen the CME LOWER margins to bring in a bunch of new weak longs, and we know they threw something like 225 million oz of paper at the silver markets on Wed. I think the cartel still has not given up yet, and might just use the weekend to smack the new silver longs.

March is a delivery month, and there is something like 13,470,000 oz of silver standing for delivery in March. Given that there's only about 35,618,000 oz of silver in registered inventory, we could see registered inventory drop significantly if they can't get a bunch of cash settlements.

Any thoughts/ideas/comments?

[brotherjohnf]

(03-03-2012 12:03 AM)tony Wrote:  There seems to be a strong correlation between negative lease of rates of -0.4 (or more in terms of magnitude - ie: -0.5, etc), and smack-downs in price - TF Metals had a thread discussing this.

So, we've had our smack down on leap day when lease rates were at -0.49%. Since then, lease rates have backed off, but are still quite high - currently around -0.44%. I'm thinking that there might be a smack down over the weekend.

We've seen the CME LOWER margins to bring in a bunch of new weak longs, and we know they threw something like 225 million oz of paper at the silver markets on Wed. I think the cartel still has not given up yet, and might just use the weekend to smack the new silver longs.

March is a delivery month, and there is something like 13,470,000 oz of silver standing for delivery in March. Given that there's only about 35,618,000 oz of silver in registered inventory, we could see registered inventory drop significantly if they can't get a bunch of cash settlements.

Any thoughts/ideas/comments?

I don't understand who is leasing the silver when no one has any.

[cosmyccowboy]

why do i care what happens to the paper silver longs? as a buyer of physical silver i am so happy to see the price fall. there will come a day when there is no silver at the price we see posted and at that point it wont matter what the paper market says the price should be! but as long as they are the same i am happy to buy silver at the so called suppressed price!
jeff

[tony]

Smack downs are a good opportunity to buy. If there is a good chance for a smack down, then you may want to hold off a purchase until it occurs. One should try to maximize the number of ounces one can get. As a result, I try to track when they might occur.

[John Winger]

We all stack to the light of the red candle. The bigger, the better. I have nightmares of and endless string of black/blue candles running away toward the top of the screen.

Once you learn the silver story, everything else is just noise put in place to keep you distracted. It's one of the only tools they have left and it belongs on a comedy real, not a news wire.

[tony]

looks like we had 87,250 contracts (436 million oz) trade in the space of 50 minutes to collapse the price today