Eric Sportt: Follow the Money

You know silver’s doing well when the commentators start giving it the ‘gold’ treatment. Silver’s recent rise has been so spectacular that it’s caught many investors off guard. It’s natural to be sceptical when you don’t know the fundamentals driving strong performance, and many pundits and commentators have been quick to downplay it as a result - much like they do towards gold when it enjoys a run. Silver is also an awkward metal for them to categorize. Is it a commodity, a monetary metal, or both? And which side is driving demand? If it’s industrial demand, that’s ok, because that’s bullish. 

But if it’s investment demand for silver as ‘money’, well then that’s sort of bearish, isn’t it? The fact remains that most commentators have failed to grasp the monetary shifts that silver is signaling today, and in doing so they’ve failed to appreciate just how high it could actually go. 

http://www.sprott.com/Docs/MarketsataGlance/2011/0311%20Follow%20the%20Money.pdf

The Squeeze Is On (Gold at $1500 & Silver at $44)

The squeeze is on. Yesterday’s downgrading of the US economic outlook by Standard & Poor provided the catalyst for US Dollar shorts to cover, which drove up the Dollar index up, breaking its 15% decline over the last 10 months.  S&P revised its outlook on the US AAA credit rating to negative from stable, citing the massive US debt and Washington’s apparent inability to cope with it its fiscal problems; "we believe there is a material risk that U.S. policy makers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013."  While the S&P maintained the country's top AAA credit rating, the rating agency called the odds at one in three that the U.S. credit rating could be downgraded within two years.

http://news.goldseek.com/GoldSeek/1303220561.php

Texas University BUYS $1 Billion in Gold Bar

The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.

The fund, whose $19.9 billion in assets ranked it behind Harvard University's endowment as of August, according to the National Association of College and University Business Officers, added about $500 million in gold investments to an existing stake last year, said Bruce Zimmerman, the endowment’s chief executive officer. The holdings are worth about $987 million, based on yesterday’s closing price of $1,486 an ounce for Comex futures.

http://www.bloomberg.com/news/2011-04-16/texas-university-takes-cue-from-kyle-bass-to-hold-1-billion-in-gold-bars.html

Bob Chapman - Silver price prediction.

Bob Chapman: In the last few days we have seen the US government in the market and they have done everything possible to knock prices down which is not unusual within a corporate fascist governmental culture and that's what we have in America , says Bob Chapman, of The International Forecaster, and people who do not believe that they are missing the whole point.

It won't last but for few days may be weeks and the next step -Silver is going to go higher if for no other reason this giant naked short position being held by JP Morgan Chase and HSBC.. 

Inflation Deflation Debate Rages On

Price of Silver

A picture is worth a thousand words:

Comex Margin requirements on Silver (any increase is ineffective)