So much trouble for a little tungsten…


I really have to vent about this article on Zero Hedge, a stunning examination of a 2008-published brochure on the gold vault of the Federal Reserve Bank of New York. While the article does note the age of the information, the piece is little more than a cheap jab at the vault, complete with this gem of a conclusion: “To think: so much trouble for a little tungsten…”. Repeat a lie often enough, people will start to believe it. But I suppose poking fun at a three-year old brochure really is the ticket for a slow news day - everyone is waiting for the next event (e.g. FOMC meetings) to move the metals price or is busy discussing how the indian-gold-for-iranian-oil is going to somehow trigger the next invasion of the middle east.

So this is a worthless post about a worthless post – attracted only by the opportunity for some recursion. After the euphoria passed, I realised that getting the scoop on ZH running a piece perpetuating a common metals misinformation meme was not actually that special, and I started to consider Charles Hugh Smith’s strategy of setting up a site dedicated to lol catz or something (surprised by my own design of distraction but might have something to do with the fact it’s rained here for nearly 5 days straight with another week to go making life a little crazy).

"Crazy !!!"

On the topic of intellect, here’s a quick mystery - Dr Peter Trzaska (one of our recent commenters) has spent 20 years in the metals industry and is currently making a living as a trader. There is no question that he is more intelligent than my good self. According to his blog (which bloomed briefly during October 2011 last year) he thinks Sprott is great and believes that silver is scarce. With all his knowledge, why does he think that? And why did he delete my comment that I left on his blog, enquiring into this? (which was not offensive – purely asked for his opinion because I was interested in what he had to say). I haven’t deleted your comments here Peter, that’s just not the way we work. I genuinely want to know why you think that silver is scarce, since all the evidence is against it.

24 comments:

Warren James said...

By evidence of course, I guess I'm referring to a lot of my unpublished database work. And I'm hunting Peter primarily because I want to use a witty quip I thought of about a day after his savage insults, the timing of which I suppose (unfortunately) only cements my lightweight intellectual status. But seriously, if he's so damn smart then why does he think there's a silver shortage?

lords said...

Show us your evidence.

Worthless comment on a worthless post about a worthless post, yes indeed.

Give us a link to Dr Peter T's comments / blog.

Warren James said...

No problem lords - his blog is at this address: http://preciousmetalspete.blogspot.com.

He can start by debunking my research about PSLV:
erics-delivery.html.

He should also know that I'm holding over 6 months worth of SLV serial bar data, collated in my database. One of the best patterns so far is the flow of bars between ETF's. This kind of data allows me to identify the location of allocated bars, where Zero Hedge can only just speculate:

zero-hedge-zj6752.html

I haven't seen anyone debunk that either, because those pieces reference the original data. There's a lot of silver present and at the minute it's just accumulating in those ETF's. Much of the stuff that leaves the vault, never actually leaves, it just changes ownership then shows up again in the ETF. Some of it gets delivered, like the bars that went from SLV to Perth Mint.

I'm still on for my February timeframe for my first posting of all this. The presentation is a challenge because of the complexity, but I think I've got it.

Robert LeRoy Parker said...

Hi Warren,

Peter was a jerk. I was a jerk in return. Then he was a jerk again. Now I'll ignore him.

Kid Dynamite said...

"Much of the stuff that leaves the vault, never actually leaves, it just changes ownership then shows up again in the ETF."

this is related to why Harvey's brain continues to be blown by the fact that COMEX inventories don't change when there are deliveries - because the longs don't take their gold/silver out of the warehouse - they leave it there and sell it the next month. It's hilarious to watch him tie his head in knots about how the total gold deliveries over the last few months add to more than 100% of the total... amazing that someone who looks at this data daily still doesn't have the slightest idea what it means.

Robert LeRoy Parker said...

Hi KD,

Here is another one for you. GolemXIV appears to be buying the silver price separation propoganda.

GolemXIV Link

Near the end:

"I think the big old sterling silver coin may already have dropped for some investors. That is why prices for physical silver are surging above the price for paper claims on silver. I think some traders are getting nervous about buying paper claims on silver and now want only the metal itself. They suspect that in the end, if you have only a paper claim  or contract for, silver that is exaclty all you will ever have – the paper. Only those with the actual metal in their hands, will get what they paid for. I think there is a fiat, paper currency version of gold and silver floating around and parasitising the metals themselves. Those who own that paper stuff may get…well … stuffed."

I really enjoyed the post other than the silver stuff.

KJ said...

the shortage story continues in full force:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/1/25_Eric_Sprott_-_Aggressive_Chinese_Buying_Will_Spike_Gold_Price.html


"...There’s been a big move since we did the issue...."


Funny how that get's a sentence of its own. He's not lying, fact is there's been a move. They want the reader to believe the implication is the move was b/c of the order by Sprott. Perhaps it was mostly in anticipation of today's fed announcement...or just because.

“We’ve all heard the reports that it’s pretty tight (in terms of supply)..."


i also heard the one where b/c pslv was at 25%+ premium, it meant there was a shortage, but now that it's down below 6% (and taking more silver off the market mind you), there still is a shortage.

and why does he need to refer to 'reports'...he's the one buying up silver causing shortage issues, according to these same 'reports'...

OC15 said...

Just wanted to thank you guys for the tip on the silver when the 10Y note ratio hit the top of the channel. Made over 200% on SLV calls in a couple weeks. Has your short term view changed at all with the zirp extension by the Bernanke yesterday? Do you still think we are running to 37 or so in the next 2 weeks?

GM Jenkins said...

Good stuff, KJ. I caught that hanging sentence in the Sprott "interview" too. KWN always leaves a bad taste in my mouth. I have no problem with metals cheerleading sites any more than I have a problem with fan sites for sports teams, but propaganda always has a disturbing quality, especially the way KWN operates under the banner of a legitimate news outlet, the way Eric King is a shady figure (who the hell is he? Maybe JdA can get on this .... no web track record to speak of, yet he talks about being "friends" with a lot of guests and investing millions here and there) I also find it a tad dismaying the way distinguished guests come on and to their discredit play along with the news thing ... I mean a guy like Mish Shedlock was interviewed once, but never again ... my guess is he wasn't comfortable with the tacit understanding that nothing bearish can be said about the metals ever, except under certain extenuating conditions.

GM Jenkins said...

Glad you made some fiat with options, OC15. I agree the 10Y ratio is looking like the earliest leading indicator of silver market bottoms right now ... hopefully that will not change. And good job not getting shaken out of your position during the pre-New Years silver takedown -- I regret posting that chart 2 days too early.

mortymer said...
This comment has been removed by the author.
Jeanne d'Arc said...

Totally off topic, but I do feel I have to boast... My call that gold would reach an all-time high in days has now been validated!!

On 9 Sept 2011, gold priced in Serbian Dinars hit 137,979.01 an ounce, an all-time high.

On 26 Jan 2012, it hit 138,627.15 an ounce.

This was just SEVEN DAYS after my call.

But please remember that JdA is NOT a soothsayer, a psychic or a witch...

(well, actually she is a bit of a witch).

KJ said...

GM, yes good question - who really is Eric King?

http://en.wikipedia.org/wiki/King_World_News

No "about us" section on the kwn website, just the regular disclaimer...

Jeanne d'Arc said...

@GM - you're not wrong about Eric King being an elusive character. The chap has absolutely no back story before the creation of KWN in 2009. Nothing. Nada. Zip. This suggests 'Eric King' is a pseudonym.

His style is actually pretty polished: he knows how to play an audience and how to lead his guests. My best guess is that he's got an established career in radio behind him: perhaps a former conservate radio talk show host or something. He might be quite wealthy, but I doubt if this wealth comes from a career in finance.

KWN is so partisan and so much of a hard sell that it's hard not to draw the conclusion that he's a paid marketeer for a collective of gold/silver interests.

So we need to identify a collective of very rich gold/silver investors and/or retailers who might have an interest in cooperating (not just in funding the project but also by giving their time for a rolling programme of interviews, etc.) in a central hub fronted by a pseudonymous bought-and-paid-for hack.

Alas, my imagination fails me at this point. Surely there must be one or two such people who could fit this MO...? ;-)

KJ said...

jda, one name comes to mind :)

maybe an interview with the man himself...

Warren James said...

Oh boy ;)

How much more trouble are we going to be in this time around? It's becoming pretty clear to me what is going on. What's clever about this entire campaign is the variety of puppet blogs - there is one in every 'ecological niche'. Clever, saturation strategy.

(Anyway it doesn't stop until the head vampire is killed)

Nice call on Serbian Dinars, JdA.

KJ said...

Warren, possible Turd isn't part of a group/bought. But he's a sharp individual and surely sees through fact from fiction. So why peddle the shortage issue? It goes against his grain of being straight up, honest with his readers. So perhaps he believes in the shortage story 100%? Again, find it hard to believe, but possible.

I still think we'll see a 'short squeeze' at some point but imo, it won't be any real shortage of silver, but an illusory, created shortage. Just my opinion. And if that does happen, the we told you crowd will come out. So imo, difference b/w an actual shortage of metal and disruptions, however created, in the supply chain. Might be mistaken, but this has been covered by a few others.

And if there is a boat load of silver out there that no one talks/knows about, maybe they're waiting to unload on buyers at higher and higher prices. And well, goes without saying, you need buyers.

Warren James said...

KJ, you're right and one of my problems is I see shadows where sometimes there are none.

I deleted my Turd comment as I decided I don't want to draw the ire of anyone, but the logic I reached has been bugging me all day.

It has been an interesting study of belief and storytelling. All the stories copy from each other, but seem to have a cental source - it's like the Wynter Benton 80% premium claim was a bit too high so they toned it down to 'just 30%'.

And I agree with your view on silver. It is clear that the price is going higher, and we're all positioned to benefit from it. But like my colleagues, I would rather get that benefit from an honest market and not because some Canadian social media marketing company launched a successful campaign to sucker everyone into buying high.

Something like that anyway :)

Thank you for your good discussion. This thread has made the post very worthwhile indeed.

Warren James said...

p.s. as far as I can guess, the 'boatload of silver' that you speak of, is already in the vault (it never left). Bron calls it 'the dark pool'. It's one of the things we are trying to identify with the database.

KJ said...

honesty - well that's the worst of it perhaps, imo.

peddling the collapse of the monetary system, hyperinflation, etc. to ultimately off-load 'boatload' of silver to unsuspecting buyers who believe the silver hype.

possible some/most believe there is a massive shortage, but then there's probably others who might know there isn't a shortage and go ahead with the fancy storytelling to help create the market.

But if they know it's just fancy storytelling, it now becomes a dishonest market, as buyers will ultimately be shaking their heads for buying the hype. So then, imo, it becomes more about storytelling for the main purpose of helping create a market and less about helping people protect against the storm that may be coming.

Distinction without a difference? Kill 2 birds with 1 stone? ie. if you buy physical silver, who cares about the storytelling b/c you're also protecting yourself from monetary collapse...even if you buy at #100 or whatever...

just my opinion, but not right if one is implicitly pitching their honesty when really, they are being dishonest through withholding the truth ie. there's a boatload of silver...

then they're really glorified salespeople.

about the darkpool, i don't know, but i get the sense if there is a 'boatload' somewhere, can't be publicly identified at this time.

The Big Setup said...

Its funny reading all these posts. the bottom line is..NOBODY KNOWS NOTHING! All one can do is guess, write, pretend, surmise...

KJ said...

big setup, funny name considering the recent discussion in the comments section...i'd just add a few more words to your list - question, investigate, suspect, doubt...

Jeanne d'Arc said...

Re KWN: I've just come across this rather nice article, from a blog I hadn't found before. It's a neat analysis of just how limited the range of views are on KWN.

There are a few other good articles on this blog which are worth checking out too.

Warren James said...

Nice post that one - I love it when something is well researched (the chart showing guest frequency). I also love the 'Kool Aid' reference, that's been in my head all day.

@KJ, yep - we can only surmise the dark pool exists. Similar to detecting black holes we can't observe it directly, but might be able to get some decent theories through looking at data. Benefits in finding it (should it exist) are a better view of the bullion market.