STOCKS OF SILVER

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Special GGR Excerpt – Silver COT Most Bullish in Eight Years

* Wednesday, October 19, 2011

HOUSTON – In a moment we share an excerpt of the full Got Gold Report which was delivered to subscribers Sunday evening, October 16, and posted on the password protected subscriber pages by the intrepid staff of GGR, but first a brief comment.

With the markets still kind of going through a giant sausage grinder; with a premium on uncertainty and a discount currently for confidence; with Greek people chunking rocks and Molotov cocktails at police in Athens – because they are “shocked, shocked” that their government can’t continue to cook the books and get away with it.

Greek pols have been coddling Greek voters with an Aegean Sea of borrowed Euros. Instead of being “real” with the people, they have been “real sweet” to them for a very long time. Naturally the Greek people now want and demand to be kept in the “style to which they have become accustomed.” Thus, a hissy-fit eruption in the land of Vesuvius - even though the government is broke and likely broken by their own hand. (Not unlike people everywhere that get sucked into the socialist model government dependency trap.)

We hear of plans to expand the EFSF, and if the talk proves to be true, we are indeed talking about a new form of Q.E., another major expansion of liquidity, further debasement of fiat currencies and a guaranteed continuation of uncertainty for the foreseeable future.

Confidence in Currencies or Metal?

Very short term who knows what to expect from gold or silver as liquidity rushes to and fro in thin and thinning, very choppy markets. But longer term, and looking ahead into the coming U.S. election year it seems to us that the fundamental factors which have underpinned the precious metals markets are likely to remain as robustly bullish as they will be dangerous for anyone trading using leverage. As we have said so many times over the years, we shall remain bullish on gold and silver so long as these conditions prevail and until we see increasing confidence in fiat currencies generally (not just short-term capital flight into them) and a lessening of disdain for the governments that print them.

If one believes that confidence in fiat currencies and in governments is or will be ascendant from now on, then the time to be involved with precious metals has passed and it is time to convert precious metals into the paper mediums of exchange or buy “stuff” with them.

We don’t believe that right now, how about you?

Meanwhile, we remain in a nasty negative liquidity event where it is very difficult for any of our chosen mining or exploration companies to sustain advances and the Vulture Bargain battlefield is a very target rich environment. Difficult except for when our issues see takeover bids, such as our Vulture Bargain #9, Trade Winds Ventures recently did (thank you very much Ian, at Trade Winds!) or like our Vulture Bargain #2, Hathor Exploration, just announced this morning – a higher bid than the Cameco offer by none other than Rio Tinto (Thank you very much Tony, at Hathor!). By the way, Vultures (Got Gold Report Subscribers) please see the related note on Hathor in the VultureInReview section and our disclosure note at the bottom of it. We are out on the pop with all of our Trophy Shares.)

We won’t go on and on about the news today. Just remember that the markets are not really pricing in today’s news. The markets are trying every moment of every day to discount the news we will be reading three, six and nine months hence. At times it is easy to forget that or to become morose and disenchanted by the news of the day, but that’s why the majority of our time is spent tracking technical charts and consuming the data behind them rather than glued to a TV screen watching cable TV. Emphasis on the word “majority” in that last sentence as we admit to being CNBC and Bloomberg junkies too more than we’d like these days.

Metals Also Uncertain Short Term

Just below is an excerpt from Sunday’s full Got Gold Report, the section that looks at the legacy commitments of traders report for silver as we hinted at earlier in the week. Since Sunday neither gold nor silver, which are consolidating after harsh corrections, have shown their hand definitively. Gold is currently, near the close on Wednesday, October 19, 2011, grinding through the $1,640s and silver is drifting lower in the $31 arena. Yesterday, as we reported here, the silver ETF gapped lower but recovered all the gap, which is anything but bearish. Today, however, silver shows us “bupkiss” and is a limp-wristed “sister kisser.”

We suspect that both will “show their hand” before long, if for no other reason than they don’t usually go sideways very much longer than they already have and trend-following traders cannot participate until there is a trend to follow. We are personally in a strange, but okay place with regard to silver. Our attitude is that if it were to break lower here and retest the panic lows of September (near $26) that would be great, because we would feel comfortable adding to our own physical position there or below there. On the other hand, if silver were to break out of its $32.50 resistance and keep on trucking higher, that would be great too, because we have some. We think that’s a good ‘place’ to be.

But if we didn’t own any silver at all, and knowing what we know and report just below, we’d just about have to be adding at least some physical silver on any significant to strong dips right here and right now – in tranches. The cheaper the better, of course.

Read On:

http://www.gotgoldreport.com/2011/10/special-ggr-excerpt-silver-cot-most-bullish-in-eight-years-.html

George.

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