Interview with Ted Butler – Silver Could Explode

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  • Mon, Oct 20, 2008 - 08:33pm

    #21
    john50

    john50

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    please show respect for others

Hewittr, I am sure you are a smart guy, and an asset here on the forum. I felt you have been harsh, judgemental, and belittling in several of your posts whenever someone has a different point of view or experience. Smile

[quote]I see too that you know next to nothing about silver. Silver was a
monetary metal long before gold. It goes as far back as bibiblical days
when gold was an ornamental metal. The shekel mentioned in the Bible
was a unit of silver.[/quote]

I am an institutional trader, that began with bullion around 1975, and I trade full time. My background is Economics, History Financial Planning, and Law. My  expertise is in financial cycle history. I have owned a brokerage company and just sold my ownership of a bank. I have taught Biblical stewardship and financial history. I could go on, but the point is:  please show respect for others – and don’t assume that everyone is less informed than you are.

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The Shekel – summary

Shekels were originally a measure of weight based on Hebrew barley storage receipt, not a silver coin. The earliest shekels were not money, but were an ancient Hebrew unit of weight equal to about 180 grains, used as other units of weight such as grams and troy ounces for trading before the advent of coins.

The first known usage is from Egypt and Mesopotamia around 3000 BC, as a form of receipting grain stored in temple granaries. One explanation is given for the origination of this word as to have originally applied to a specific mass of barley, and the first syllable of the word, ‘she’ was Akkadian for barley.

Two millenium later, a Shekel could be a gold or silver coin equal in weight to one of these units, especially the chief silver coin of the Hebrews, dating back to around 700 – 500 BC. Silver Tyrian shekels are thought to be the infamous "30 pieces of silver" paid to Judas in the New Testament.

Since 1980, the sheqel has been the currency of the modern state of Israel, first the Israeli sheqel, then (since 1985) the Israeli new sheqel.

  • Mon, Oct 20, 2008 - 08:38pm

    #22

    KKPSTEIN

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    Re: Interview with Ted Butler – Silver Could Explode

I just wanted to comment also that the financially elite never trade gold.  They just constantly acquire it in their porfolio knowing that the tides and ebbs of the economy can always be ridden out. Even when it dips to the extreme lows like we saw in the mid-nineties, they don’t panic or care.  Also, the flipping mentality in PM is a N. American one.  Most other cultures the world sit on their gold, rarely selling it. 

  • Mon, Oct 20, 2008 - 08:43pm

    #23

    Ray Hewitt

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    Re: Interview with Ted Butler – Silver Could Explode

Hahaha. The joke’s on me John50. You know more about silver than I gave  you credit for.

What you say is true for a trader. For a long term investor, the Comex prices are academic. They don’t reflect physical market prices which have been increasing regardless of what the spot price does.Of course that is assuming you can find a broker with stock.

  • Mon, Oct 20, 2008 - 09:33pm

    #24
    john50

    john50

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    Re: SILVER HAS GONE DOWN 50% FROM OVER $20 TO UNDER $10 TODAY

[quote=switters]John, You seem very certain about what will happen with silver over the next several years.  I am not saying that what you suggest isn’t possible (i.e. price of silver dropping, and then having to wait for "several years" for it to go back up), but I don’t think that’s set in stone either.[/quote]

Hi Switters, I have no crystal ball, and have too much experience to pontificate on what is going to happen. As a silver trader I have 2 key rules.

  1. Do not trade against the trend.
  2. Do not try to pick bottoms (let the market prove them).

What I have is a view of history, decades of experience, and a team of indicators – that I can share with you. Look at the chart from the last American deflation in 1930. Silver and Gold ought to perform as it historically has performed. Historically, price corrections ending in a C wave have always ended in 5 waves (no know exception this century). I placed a box on the 1930’s chart to show roughly where we are in the count right now, I can give a more accurate chart tonight when the trade desk is closed. Unless the market shows me different, I see no reason to imagine new behavior as the basis for trading.Is it guaranteed, NO. (never can be guaranteed). It is all about probabilities, and putting the odds in your favor by waiting for the down trend to end before going long (up).

depression-silver3.gif

I also have current technical, fundamental, and sentiment indicators as
a trader, and they point down, along with deflation at this time.  I
will buy silver after I see 5 waves down, and a small wave up, then
enter on the small retracement. The next support level is $8.50, it
will get tested soon, and likely broken. It is anticipated to see a 4th
wave rally, that fools many like Ted Butler who are keen on any sign of
a change in trend, but one more new low will be set after that rally
falls, in the 5th wave.  

I agree with KKPStein, bullion is a long term hold for most institutional buyers. I just hate holding on for a couple decades of declining prices like the 1980-2000, from $50 to $4. My purpose is not to flip or speculate, it is to insure against inflation, (and it looks/feels so nice.) I just see prefer to re-allocate when the market looks to have peaked in the multi-decade view. 

The reason prices are going down is Hedge Funds and Banks are forced to sell assets, including bullion, to raise cash and improve their balance sheet. This is far more powerful a market force than the people preparing for financial Armageddon. 

  • Mon, Oct 20, 2008 - 09:34pm

    #25

    JMCSwan

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    Re: Interview with Ted Butler – Silver Could Explode

John, you say….

I am an institutional trader, that began with bullion around 1975, and I trade full time. My background is Economics, History Financial Planning, and Law. My  expertise is in financial cycle history. I have owned a brokerage company and just sold my ownership of a bank. I have taught Biblical stewardship and financial history. I could go on, but the point is:  please show respect for others – and don’t assume that everyone is less informed than you are. (my emphasis)

John, would you be so kind as to respect us with your INFORMED analysis of the CIA and various CIA FRONT COMPANIES OPINIONS ON THE CURRENT MARKET ‘CRISIS’????

JMCSwan

  • Mon, Oct 20, 2008 - 10:07pm

    #26

    Ray Hewitt

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    Re: Interview with Ted Butler – Silver Could Explode

John

I’m curious. Are you a paper trader? I ask that because I see increased probabilities of a short squeeze in the months? ahead. How is that built into your calculations?

You might be too hard on Ted Butler. He’s been consistent about a buy and hold strategy and he doesn’t predict price movements. Two other writers, Jason Hummel and John Mauldin, approach silver from different directions and come to conclusions similar to Butler’s. I look forward to your updates in the future too.

I’ve long wondered about silver’s prices during those years. I remember a famous name in those days, Bernard Baruch, who is said to have made a killing by switching from stocks to silver before the crash.

It is anticipated to see a 4th
wave rally, that fools many like Ted Butler who are keen on any sign of
a change in trend, but one more new low will be set after that rally
falls, in the 5th wave. 

Presumably with practice one can master Elliot Wave Analyses. I find I can’t make any sense out of it because the points are too subjective. 

  • Mon, Oct 20, 2008 - 10:29pm

    #27
    switters

    switters

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    Re: SILVER HAS GONE DOWN 50% FROM OVER $20 TO UNDER $10 TODAY

John, 

I just bought silver about three weeks ago so I’m not in bad shape if silver performs like it did during the depression and we are where you believe we are on the chart you posted.  It looks like we’re not far from the bottom, and I bought in pretty close to that.  

If the housing market bottoms out in five years, I’ll probably want to trade some silver and gold for a piece of productive land with a house on it.  Hopefully the price of silver and gold have started moving in the other direction by then.

I’d be curious to know what your "medium-term" outlook (i.e. 4-8 years) is for silver.

 

 

  • Mon, Oct 20, 2008 - 11:04pm

    #28

    Ray Hewitt

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    The Comex Fraud

This clip from Jason Hummel:

First, the biggest fraud
is the COMEX.  90% to 99% of contracts don’t result in delivery, but
this market dominates the price.

 

http://www.cftc.gov/dea/options/deacmxsof.htm

 

With 142,578
contracts outstanding, for 5000 oz. each, that’s 712 million ounces, which is
more than all the world’s silver mines produce each year, which is about 550
million ounces according to the CPM group.

 

The COMEX warehouses
only store 133 million ounces, and not all of that is registered for delivery
against a contract, therefore, there is paper contract fraud selling going
on, which manipulates the price down.

 

I understand that
paper contracts can also allow the silver price to be manipulated higher than
normal.  For example, if 85% of the positions of paper longs were
concentrated and held by 2 traders who were short term gamblers who did not
intend to take delivery, and if all of the sellers were only the mines who
had every intention of delivering silver, prices would be manipulated higher
as the paper long positions were purchased.

 

Likewise, if paper
futures are sold, by entities such as banks who have no silver, and don’t
sell any silver, and don’t have any intention of delivering any silver, then
that would manipulate prices to the downside.

John.

It occurs to me that if it is true that Comex prices are a fraud, then that means they don’t reflect real world prices. That, I submit, is a weakness in your reliance on short term movements. You think we haven’t seen the bottom, yet physical prices are rising. Any thoughts?

This is a good read on frauds. http://www.24hgold.com/news-gold-silver-The-World-is-Filled-with-Silver-Fraud.aspx?langue=en&articleid=331570&contributor=Jason+Hommel&lastpublishingyear=2008&filter=latest

  • Mon, Oct 20, 2008 - 11:09pm

    #29
    switters

    switters

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    Re: SILVER HAS GONE DOWN 50% FROM OVER $20 TO UNDER $10 TODAY

[quote=john50]Silver and Gold ought to perform as it historically has performed
[/quote]

John,

Forgot to ask you about this.  What of those who say that gold and silver will perform differently this time around because silver is no longer considered as money (as it was in the 30s) and gold is no longer backing our currency? 

  • Mon, Oct 20, 2008 - 11:37pm

    #30
    Xflies

    Xflies

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    Physical bullion conspiracy

Hi David, Switters is quite right… he never said anything about a conspiracy, but others have insinuated it… plus many of the articles referred to on this site, point to a possible conspiracy.  I found this board so much more useful when it wasn’t being used as a hype machine for self-affirmation.  I really like the informed debates/banter from people that are truly objective.  I DON"T think there is any sort of conspiracy going on with physical gold… I am not sure why it is tight in the US but I’ve seen posts here that think that just because a market maker quotes a premium on the gold price that this was because there’s this huge physical buying going on and that there could be a market develop for physical versus paper.  They ignore the fact that one of the reasons why ANY market maker would quote prices different than the financial is because their quote has to reflect the market volatility of the financial.  For example, a gold trader isn’t going to hedge every time some retail guy wants a 1 oz bar so he might consolidate positions at the end of the day and then readjust his hedge.  The problem is that there has been a lot of volatlity so if he doesn’t quote a wider market, he is more likely to lose money.  That being said, Scotiabank quoted me a nice $10 bid/ask spread which isn’t bad at all.  For those that want to believe that there is run on physical gold happening and hope to profit from it, they definitely need to take a look at what’s happening in places like Canada because eventually the gold will find itself coming down into the US and it also destroys anyone’s theory that suggests there is a shortage beyond anything local.  Others have posted on buying junk silver or even coins but keep in mind, you pay a hefty premium for anything that’s processed.

 I’ve offered to sell my gold at only a 30% premium to spot and no inquiries, not even from those who want to verify if this is a real offer or not… why?  Because they don’t want to know the answer… some people just like to believe in things that aren’t true.  If you want to purchase gold, I’ll sell it to you and you can have a lawyer handle the transaction. 

 

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