Monday, February 28, 2011

US Dollar Hanging By A Thread

The Associated press reported today:

Oil prices fell to about $97 a barrel as worries over the global oil market eased after reports that some Libyan ports reopened to oil tankers and Saudi Arabia was boosting exports.

Has Saudi Arabia "really" boosted Oil exports, or have they just "said that they would boost exports" at the behest of the US Government to "talk Oil prices down"? Why so cynical? Hey, why believe anything the financial press reports these days.

Consider, for a moment, the precarious position the US Dollar finds itself this evening BELOW support at 77 on the US Dollar Index. Certainly the civil unrest in the Middle East is a cause for concern in the Oil Markets, but the effect a falling US Dollar could have on a rise in Oil prices over the next several weeks could make the cost effects of this Libyan fiasco on Oil look tame by comparison.

Should events in Libya escalate, or even spread to Saudi Arabia along with a continued fall in the US Dollar, we could see Oil approaching it's 2008 highs by Memorial Day. Heaven forbid such a scenario evolves, but today's pause in the rise in the price of Oil should not be considered a top just yet...particularly relative to a falling US Dollar's effect on a rising price for Oil.



For more on the potential near-term demise of the US Dollar, please see the piece posted below written by Toby Connor. It is an eye opener, and shines a spot light on the Dollar's weakness today, and it's implied effect on a further rally in Gold and Silver this Spring:

GOLDEN FIREWORKS ARE ABOUT TO BEGIN
The gold bull is now on the verge of launching the most spectacular up leg of this 10 year bull market. This spring we should see the final parabolic rally of the massive C-wave advance that began in April `09...

The Silver market proved most resilient today as it attempted to break higher out of the Bullish Flag formation we showed yesterday. Whether today's late CRIMEX session take down was criminally endorsed, or just some last minute book squaring by legitimate speculators at month's end, is debatable. Suffice it to say, Silver took a lickin between 1:25PM est and 1:30PM est...and again in electronic trading between 1:30PM and 3:00PM.

Silver dropped 36 cents in the LAST FIVE MINUTES of today's CRIMEX market to close the month out....bounced and then fell another 44 cents to hit it's $33.35 low of the day at 3PM est...and then rose steadily into the 5:15PM est Globex Market close to finish out the month of February at 33.98...a new 30 year monthly closing high. What, if anything, was accomplished by today's late market CRIMEX raid remains a mystery.

Open Interest in the March contract dropped by 10,000 contracts Friday. All indications are that the final number of March futures holders left standing for delivery was 4250 contracts. At 5000 ounces each, those contracts amount to a total of 21.25 MILLION ounces of Silver. The CRIMEX claims to have 43 MILLION ounces of Silver in their vaults "available" for delivery. It is anybody's guess how many of those 10,000 contracts that disappeared Friday were cash settlements made by the criminal bankers to keep the CRIMEX game going another couple of months.

As for Wynter Benton's group of CRIMEX raiders: No word on if they have stood for metal, or cashed out their contracts at a premium. Regardless, the Friends Of Andrew Maguire were instrumental in the run up in Silver prices the past three weeks...and we can only hope that they remain united for another run at the CRIMEX, and a raid on the May delivery contract.

If in fact 21.25 million ounces of Silver have been demanded for delivery on the CRIMEX, the banking goons playing games over there would appear to be in big trouble as half of their supply of Silver is about to disappear over the next 30 days.

With 252 deliver notices sent out by the crooked bankers today, 3998 contracts remain to be served thru the end of March. The higher this number is as the month of March winds down, the more likely these bankers will be exposed as the fraudsters that they are, and another major squeeze of those short Silver will be unleashed.

Paper metals markets will blow up, Rickards tells King World News
Dear Friend of GATA and Gold (and Silver):

Market analyst Jim Rickards today gives a wide-ranging interview to King World News, remarking, among other things, that the oil market is heavily manipulated by governments, that governments use the paper gold markets to quash the gold price, that the International Monetary Fund has developed a detailed plan for global "quantitative easing" using Special Drawing Rights, that the Federal Reserve is "a large propaganda machine," that it's "just a matter of time" before the arbitrage between paper and physical precious metals markets blows up, and that precious metals investors can protect themselves against expropriation only by taking delivery. It's a great interview, about 23 minutes long, and you can listen to it at the King World News Internet site here:

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/2/26_Jim_Rickards.html

1 comment:

  1. Thx a lot Greg for the silver update.

    I guess now everyone knows Comex has less than 5M oz silver since today 1,000 contracts got cash settled per Harvey's analysis, so anyone who can put down $150M cash can buy 1,000 contracts on Comex and make 20%+ return in one month, cause JPM has no other choices. The tight physical market, plus the expected 20% mthly return in paper market, will guarantee silver spot mth contract price to stay strong and move higher as more silver goes to the investor hands.

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