Friday, February 24, 2012

Caution, Children At Play

I think I've been remiss in my blogging. I should have been posting caveats in each post, admonishing any readers that I am not a certified investment advisor of any sort. Lest you be enticed into attempting to replicate my own performance, let me repeat the traditional mantra of the stock market. Past performance is not indicative of future performance, your results may vary. I feel you might be best warned by a large rectangular yellow sign with the words "Caution, Children at Play." In my case, it might be better to state "slow children at play."

Caution is due when playing with leveraged ETF's. They are not for the faint of heart, nor those who are not well-healed, nor novices who cannot monitor the markets they represent closely. As has been stated by others, never play the markets on margin, and never play with money you can't afford to lose. As well, position limits might be a safe precaution. There are those who recommend no more than two percent of your portfolio being bet on any one speculative trade, so as to limit your losses if the wager goes south.

I tend to break all the rules, myself, that I would chasten others to abide by. Maybe Momma did raise a fool. Whatever the reasons, I tend to have a high tolerance for risk. The funds that I play my stock market games are within various 401k accounts, and I can afford to lose them, though that is far from being my goal. There is a risk/reward ratio involved in my trading, and I'm willing to assume tremendous risk as long as I'm very well rewarded. I'm up over seventy percent so far this year, but that could change in a heartbeat.

Let's take a look at the wisdom of using leveraged ETF's on a long term basis. The prospectuses of the various LETF's all warn that the basis of the leverage employed is intended to replicate the change in value of one day of trading. Over longer periods of time, that performance can so degrade as to completely distort the returns you might have expected. The link I am posting would make any explanation of mine redundant, so please take a moment to read

Okay, you're back? Did you get that? Over longer periods than say, just intraday at best, or one or two days, you will not achieve the performance you expect. I am confident that the silver market is in a long term bull, one that will rise steadily with more up days than down. So I will continue to employ LETF's myself. But today, when I reviewed some previous trades that were placed on 11/17/2011, I noticed an anomaly. Due to the high volatility silver pricing has undergone since that time, I am underwater on what should have been a profitable position.

Specifically, on that date I purchased 196 shares of USLV, using the proceeds from the sale of 164 shares of AGQ. Were I today to sell the USLV to repurchase the AGQ, I would actually lose ground on the trade, reacquiring only 162 shares in the process. This due, undoubtedly, on the vagaries of fate and idiosynchrasies of employing a short term vehicle for a long trip ride. Apparently, there were enough down days in that interim period that it exacerbated the losses, rather than the gains, even though silver has recently experienced a nice uptrend.

So how do I extricate myself from this mess? Well, I'll have to let the triples run for much longer, during an uptrending market, before converting back to doubles. I guess I've just discovered what my core position is of USLV, because I am loathe to sell at a putative loss. A fairly lengthy uptrend, say to $40 or $42 silver should be enough to clear the books, and I'll just need to be cognizant of this mischievous aspect of LETF's going forward. When you like to play in the fast lane, you need to keep an eye open for vehicles with undependable steering.

But Silver. Buy Gold. Save Copper. Start Now.

Thursday, February 23, 2012

Patience is a Virtue

A little over a month ago, I detailed my strategy for utilizing double and triple leveraged silver ETF's to take advantage of silver's notable bi-directional volatility. Specifically, in the piece entitled A Good Parking Place, I related my tactics for selling silver mining equities to raise cash in order to purchase Velocity Share's triple-leveraged silver ETF USLV. Kind of similar to switching allegiance from the tortoise to the hare, whenever the race course suddenly dips and enters a steep decline.

My reasoning is that the silver miner's are stolid, and lag physical silver's price moves, sometimes by days, and seldom to the same magnitude of gains or losses when compared to triple leveraged physical silver prices. So, on those occasions when the market offers you a buying opportunity, those otherwise disastrous days when you're getting hammered, watching your retirement dreams bleed into cyberspace, if fortune does indeed favor the bold, then gather up your courage and strike.

I would suppose you could call such a strategy derivative of Freiherr von Rothschild, Nathan Mayer Rothschild. Prior to The Battle of Waterloo the London financier is accredited with having said, "The time to buy is when blood runs in the streets, even if that blood is your own." Today, Warren Buffet epitomizes the virtues of patience as an investor, his own maxim being to "buy when everyone else is selling, then hold, finally to sell when everyone else is buying."

My contention is that silver prices will ultimately rise dramatically from their present levels, as so many others have dutifully noted with their rationale. Eric Sprott, one of the BMOC on the Silver Campus has been one who has heralded silver as "the greatest investment opportunity of the decade, perhaps of a lifetime" and the link provided encapsulates his reasoning. Thus, in my thinking, there is little danger in aggresively capitalizing on short term dips, other than the necessity, at times, to subsequently employ patience prior to selling.

After analyzing silver's volatility and the concomitant performance of USLV, I have settled upon 15% as a goal to aim for as my "fair profit" target. Many times, often intraday, the price will drop and surge 5 and even sometimes 10 percent, but as I do these trades within 401k's that require a three day settlement of trades, I can't take advantage of such lightning moves with foudroyant reflexive responses. I often give away topside profit, but no sense in being greedy. So 15% it is. Thus, were I to purchase USLV shares at $49, my sell limit order would be $56.35.

You'd be surprised by how rapidly the hare can cover that ground. Actually, I don't feel penalized by the constraints placed by having to abide by a three day wait period to avoid committing a good faith violation by selling equities that hadn't been "paid for" yet. Let me tell you about the latest episode of selling the tortoise and backing the hare. On Monday, January 30th silver underwent its most recent haircut, and the following day was more of the same. USLV, which had closed at $49.12 the previous Friday, dropped to $47.24 that first day, dipping even more to $46.01 on the 31st.

It was time to step into the fray and take advantage of the (presumed) temporary carnage. On both days I sold numerous positions and converted them to USLV. I liquidated positions in First Majestic Silver, Alexco Resources, Endeavour Silver Corp, Fortuna Silver, Great Panther, Market Vectors Junior Gold Mines GDXJ, Hecla, Mag Silver Corp, North American Palladium Ltd, Silvercorp, Silver Wheaton, Tahoe Resources, and the Global X Silver Miners ETF, SIL.

It was frustrating at times, but I was forced to wait until today, more than three weeks later, to sell many of the USLV positions I had entered on those previous trade dates. How did I do? Well, in some cases I hit my 15% target, and on others I exceeded it by a bit by adjusting my sell orders as I monitored the day's pricing activity. I converted back into the tortoise positions, in the same proportion as I had sold out of them, with the results as follow.

AG sold 1026 shares, was able to repurchase 1180. AXU sold 1039 shares, was able to buy back 1139. EXK sold 1842, was able to reacquire 2140. FSM 308 to 336. GPL 2254 to 2643. GDXJ 255 to 300. HL 1369 to 1511. MVG 866 to 875. PAL 275 to 326. SVM 1799 to 2198. SLW 664 to 697. THOEF 114 to 137, and SIL 723 to 813. Overall, I was pleased by the gain in share numbers as opposed to a buy and hold strategy which would have left me with the starting positions.

Of interest was the performance of each stock, during the interim period, before being rebought. Some of them, such as Hecla, had rebounded dramatically. That stock, on improved guidance, was up as much as 13.55% this last Monday, before finishing up the day a bit over 9 percent. Mag Silver ran up quite nicely in the interim period, as did Silver Wheaton. Those stocks that improved in pricing while I was away show commensurately lower percentage share gains. With 15% being the standard, here are the results.

SVM share count up 22.18%
THOEF share count up 20.18%
PAL share count up 18.55%
GDXJ share count up 17.65%
GPL share count up 17.26%
EXK share count up 16.18%
AG share count up 15.01%
SIL share count up 12.45%
HL share count up 10.37%
AXU share count up 9.62%
FSM share count up 9.09%
SLW share count up 4.97%
MVG share count up 1.04%

Having sold into the rally on this ascent, I am now configured to "wash, rinse, and repeat." Bring on another dip, JPMorgan, I have the chips to play. I am not worried about "missing profits" by not remaining in USLV, as I am still playing a healthy percentage of my portfolio with double-leveraged AGQ. But I also am now the proud papa of significantly more little tortoises which, as slow as they might be, in the long run may turn out to win the race after all. You just have to be patient.

Buy Silver. Buy Gold. Save Copper. Start Now.

Sunday, February 12, 2012

Weird Dreams

I just awoke from an afternoon nap after making a startling discernment. I was having one of my usual action dreams, where I get to be an Indiana Jones in one of his Adventures. I'm the good guy, sometimes with super powers, often the ability to fly, and always the hero. I generally find treasures and wind up with the beautiful gal hanging onto my arm, gazing adoringly into my eyes, caressing my cheek with her fingertip. Then I awaken and realize my head had been buried in my pillow, and it was just the fabric of the pillowcase that had stimulated those senses.

This time was different. I'm writing hastily to capture the essence of the dream before it fades into oblivion. I remember sitting in a cubicle, about to receive an injection in my left thigh from a large stern female of Germanic heritage dressed in camo fatigues as I resisted this apparently mandatory shot. "Sit still," she commanded in response to my attempt to squirm away from the approaching needle. "What is it, I retorted, "Rohypnol?" "That's a sexist attitude," was her gruff response.

A thousand questions were swirling in my brain as I persisted, "but why do I need this?" Her answer was chilling. "Because we want you to be strong and truthful." As if, without some sort of sodium pentothal truth serum my initial response would be one of corrupt integrity or morals, a natural deceptive riposte feigned in self-defensive nature? Who was being duplicitous here, me or this government entity forcing mass inocculations upon an unwilling quarantined populace when there was no threat of any form of contagion?

You've heard of the concept garbage in, garbage out. I guess this dream is the result of the word candy I've been feeding my brain recently, through avenues of print media, broadcasting, and the world of cinema. Namely, in the last week I watched the recent films Contagion and Rise of the Planet of the Apes. I had just finished listening, on King World News, to a Gerald Celente interview regarding military exercises in Los Angeles in urban population control and subjugation of rioters in anticipation of widespread civil disobedience. I have watched the youtube videos of the FEMA encampments. For what purpose will they be employed?

And I have been reading, on Zero Hedge as well as other sites, about the loss of liberties endangered by such recent codices enacted by the follies of the Capitol Hill Fools such as FATCA, the Foreign Account Tax Compliance Act, which may threaten your ability to safeguard your money by offshore investments. The implementation costs upon mid-sized foreign banks is prohibitively costly and could easily result in the unforeseen consequence of those same banks shunning deposits of American citizens.

I have also become aware of the far-reaching, although unintentional, potentially calamitous repercussions of the two internet restrictive mandates SOPA and PIPA, as well as the draconian strictures passed into law on 12/31/2012. Seems like we won't have to wait for 12/21/2012, the termination date of the Mayan calendar, to usher in the prophesied end of the world. Obama beat Quetzacoatl to the punch by signing the NDAA. It is now written in stone, and its circumlocution mimics the shape of that archaic Doomsday petroglyph.

Prior to its inception, supporter Sen. Lindsey Gramm (Rep-S.C.) spoke out stating that under the 'worldwide indefinite detention without charge or trial' provision of S.1867, the National Defense Authorization Act bill, the legislation will "basically say in law for the first time that the homeland is part of the battlefield." Despite claims to the contrary, such legalese is open to misinterpretation, and thus subject to abuse. Should you have the misfortune to be deemed a "belligerent of the state" heaven help you, because the law won't.

Since it's signing, Ron Paul has been vociferous in his advocacy that the Act, and any subsequent declaration of martial law, directly imperil our civil liberties. Alas, the media blackout shrowded upon Paul serves to suffocate his message or twist his words, taking them out of context, in an effort to demonize his oratory. Thus, what attention he does draw from the Left is, accordingly, often knee-jerk backlash to disingenuous liberal media coverage, fomented by inaccurate interpretations of his own campaign statements, lumping him scornfully with maliciously characterized Tea Party "extremists."

Does your near future hold the portent of Department of Homeland Security officials pulling up to your curb, spilling their own version of jackbooted thugs from three black Chevy Suburbans, and manhandling you or your loved ones into the dark interior to whisk you away to indefinite detention? Merely because your browsing of websites or search fields contained catch phrases or watch words classified as being seditionist in nature, and being monitored by the elite Cyber Command Force?

Not everything you see in Hollywood movies is fictional. Most scripts are, at least partially, based upon facts. Whether or not Enemy of the State, or Eagle Eye, are unequivocally accurate in their depiction of the extent to which all of our communications are subject to scrutiny, programs similar to those portrayed currently record and monitor all communications inside the United States; their purported intent being to stop terrorist events in an incipient stage. Will they soon be interrogating high school students researching a paper on taboo subjects?

How long will you even be able to browse online? The Internet remains the last bastion of the autodidact, those self taught individuals who rebel at the thought of dining upon the pablum served up by the so-called news entities in this country. How long will we be able to visit domains deemed dubious by TPTB who wish to restrict free-thinking? Those sites that might be subject to blackouts for containing content that would promote civil disobedience in protest of increasingly draconian measures? SOPA, the Stop Online Piracy Act, contains provisions that are far-reaching in their potential for abuse.

Laurence Tribe, a high-profile Harvard law professor and author of a treatise titled American Constitutional Law, has argued that SOPA is unconstitutional because, if enacted, "an entire Web site containing tens of thousands of pages could be targeted if only a single page were accused of infringement." Youtube, Google, Facebook and countless other online sites could be ultimately affected.

How long will it be before is forbidden to advertise reference works on certain Muslim subcultures? Or banned for failure to comply? As detractors of The Patriot Act would all too willingly emphasize, "it all starts innocently enough, for ostensibly noble purposes" but, all too often, sinister consequences swiftly ensue. Certainly, I am using hyperbole for effect, but these leaps of the imagination aren't really that hard to envision, are they? They are the logical steps in the calculus now being employed, and the answers they are capable of deriving are not to my liking, nor should they be to yours.

The reality is I woke up from my siesta and realized that my afternoon dream was a nightmare. In a world where the regulations are already in place that could manifest such loss of liberties, it is only a matter of time until they are enforced. My fear is that too many Americans will continue their endless daydreams, their senses dulled into semi-narcotized comatose state, and they will only awaken from their en masse somnambulism too late to recognize that 1984's author George Orwell was right about Big Brother, he was just two decades too early.

Buy Silver. Buy Gold. Save Copper. Start Now.

Tuesday, January 31, 2012

Capitalizing On Silver's Mood Swings, Part 2

Let's face it folks. Silver is manic-depressive. Or at least her admirers are. Most of the time, it you are one of her followers, you're likely to be either as euphoric as Steven Tyler high on blow, after an all-nighter with a bevy or curvaceous groupies, or as depressed as the hapless nitwit that realizes he called in sick the day the office pool won the Powerball Jackpot of $325,000,000. Not much time is spent by silver in a calm sideways-trending consolidative state.

Silver is well noted, even feared, for her extrememe volatility. Last September 12, 2011, Jeffrey Nichols of wrote a piece regarding how some of the bullion banks are making the situation even worse. The piece was entitled The New Bankster Weapon Against Gold and Silver. Here's the mysterious part. I can't seem to find it any longer, in order to link it, both to accredit the author and allow his lengthier piece to do greater justice than my summation.

If I recall correctly, it's Jeff's contention that "da boyz," namely bullion bank JPMorgan, but also HSBC, long accused of market manipulation resulting in price suppression, are finding that they can no longer effectively control the price of silver. So what they are doing instead is exacerbating the volatility of silver to an even greater extent than is normally extant. They hope, thusly, to stifle further interest in this asset class, by unsettling that segment of investors that crave stability.

This will, naturally, scare a lot of "weak hands" away from trading silver futures. When they can't rely on technical analysis to make informed decisions (because the chart patterns featuring all the data are manipulated to destroy any dependence on that tool) then is it any surprise those speculators will abandon the field for a more stable trade? When you're playing the markets, you want to be able to sleep at night, and not develop ulcers. Silver makes it hard to avoid doing just that.

But what if there were a way to make that very volatility work to your advantage? I've already delineated the strategy in other articles, specifically Triple Dip, Double Run. But I do want to revisit the concept and illustrate a few examples. My system employs using leveraged ETF's to accentuate any big moves made by silver, in either direction. At first I was selling double-leveraged AGQ on days when silver was significantly down, and picking up triple-leveraged ESLV.

Then I decided to try selling mining equities to buy ESLV, selling a few days later (this is inside a self-directed 401k that requires three days for settlement of trades) into a subsequent rally and repurchasing considerably more shares of each miner than with which I had begun. The point I want to make is this. You don't have to wait for silver to plummet to benefit from this scheme. You only need to establish a downward trend. For this I use a minute-by-minute silver price feed downstreamed from Netdania.

Once identified it's time to determine the percentage losses of mining equities versus ESLV, with the goal of arbitraging the difference. What do I mean by this? Today silver was down about fifty cents after a good performance the previous day. I felt had there been a strong pullback, it would have been an opportune time for me to place a few new trades. Silver did not retrace as deeply as I was hoping for, but I did notice a disparity between percentages lost and decided to place some trades anyway.

Specifically I noticed that, at the same time USLV was down nearly four percent, Alexco Resources was down less than one percent. The same pattern repeated with Silver Wheaton and Hecla, as well as Silvercorp. USLV had fallen sharply by comparison, dropping some three percentage points greater than the aforementioned stocks. So I bought more shares of USLV with the proceeds of sales of some my shares of those miners. That disparity ought to provide a head start.

My thinking is that silver's notorious volatility will now work to my favor, as USLV, purchased at a putative low, will likely outperform the comparatively staid miners to the upside as it ascends, courtesy of a triple-boosted jet pack. Like Elton John, singing Bernie Taupin lyrics in his classic, I'm counting on this strategy to lift my portfolio to the moon, as some like to say about silver's prospects. "Rocket man, burning up his fuse up here alone."

Selling USLV, in a few days, after what I anticipate will be another of it's notable "dollar up" days, should enable me to enjoy roughly a fifteen percent gain and, hopefully, repurchase shares in the miners that I sold. If they happen to sport only modest gains in the interim, as has often been true of their past performance then, within that scenario, I emerge the winner with more shares than which I started. The equities frequently lag the price, in moves in either direction.

I seem to be doing okay so far, up 52% this first month. Maybe it's a fluke, but I think I could be onto something. Feel free to chime in with your comments. The only downside I see is that, at times, I may need to remain parked in USLV, which is better-suited to short term use. I am not a chartist, and I don't know diddly, Joe, about interpreting formations. Cup and handle? Flags? The terminology is nothing but jargon to me, but then is my understanding them an absolute requisite to making profitable trades?

What I can tell you is this. I am convicted that we are swiftly depleting our above ground silver. Manipulaton will cease to work when this happens. Price can only move upwards when that occurs. So I shouldn't need to watch Bollinger Bands. Do I really need to forecast a trend, based on a Head and Shoulders formation? The only thing that brings to my mind is shampoo. And that encapsulates the beauty of this trade. To prove successful, simply keep doing it. Wash, rinse, and repeat. Wash, rinse, and repeat.

Buy Silver. Buy Gold. Save Copper. Start Now.

Monday, January 30, 2012

Capitalizing on Silver's Mood Swings, Part 1

"You're an idiot!"
"Well, you're a moron!"
"Who you calling moron, you imbecile?"

Is this dialogue from a Three Stooges episode? Or could it be a heated exchange you might overhear on almost any playground in America, during recess due to a game gone awry? Precisely because of the popularization and public adoption of such terms, they, as well as cretin, ignoramus, and retard, have mostly been curtailed as descriptors. Family caretakers of mentally-disabled members tend to find them denigrating.

In film epics, though, Hollywood has been known to take license with these finer details. 1975's Academy Award winner One Flew Over the Coocoo's Nest, is a case in point. Starring Jack Nicholson and Louise Fletcher, this poignant drama provides some insight as to the stress involved in an "insane asylum." I can understand, in that environment, how frustrating the work could be. With compassion exhausted, one might lash out, making a comment they'd later regret.

So perhaps the screenwriters weren't too far off the mark in perpetuating the use of epithets like retard and mental defectives, hurled by a harried and overworked staff. Although most people nowadays don't hesitate to use synonyms such as crazy, mad, insane, or lunatic in conversation, it might be deemed more politic, within the mental health care field to exercise a bit more restraint to avert their usage.

The DSM-IV is a must-have resource that diagnosticians, from therapists, to counselors, psychologists and pyschiatrists, rely on for making a prognosis of patients troubled by mental issues. It is no longer politically correct to use early Twentieth Century terminology to label patients. Now deemed derogatory, professionals no longer assign labels such as idiot, imbecile, or moron, even though these were once all perfectly acceptable IQ category designations.

While the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, does rely on designations to classify disorders, the terms seem benign in comparison. I doubt any school yard bullies are going to be taunting smaller kids with such tirades as "Oh, shut yer face, you borderline personality little freak. Stop with the histrionics already." Or, to the friend staring into a mirror attempting to perfect her make-up, "Geez, Ginger... stop already. Someone might think you have Narcissistic Personality Disorder!"

Now let's peek into the office of Dr. Gold. Maude, the receptionist, has been busy, answering the insistent ring of the phone, scheduling appointments, and greeting patients. She just signed in a young lady who appeared quite anxious. Maude gives her a clipboard and asks her to take a seat as she fills out some billing forms. Hearing her name over the intercom, Maude picks up the phone and listens a moment.

"Miss Silver, Doctor will see you now." Silver enters the door held open by Maude, and is guided down a hallway and shown into a spacious, sumptuously-furnished office. "Make yourself comfortable, Doctor will be right with you." As she waits, she glances nervously about the room. The mahogany panelled walls are adorned with numerous awards, certificates, and diplomas.

There are pictures as well, presumably of Dr. Gold. There's one of him, lining up a putt on the green, playing with a foursome of athletes in a celebrity golf tournament. There's another of him sitting on a couch, talking with Oprah Winfrey. A third shows him shaking the hand of President Obama. Some prankster has attached a yellow post it note to the frame, on which is printed in block letters, Sociopathic Omniscience Syndrome, incurable.

"Miss Silver," intones the doctor with sepulchral gravitas, "we're going to ask that you take a simple test, the MMPI, that will measure your responses to some questions. "Why? she asks, "I feel fine." The doctor, maintaining eye contact, responds, "Well, Miss Silver, it's been reported to me by colleagues that you have trouble sleeping, at times you're severely depressed, yet at other times given to emotional outbursts. Frankly, you're confounding your family."

"By completing this Minnesota Multiphasic Personality Inventory, it might help us make a preliminary finding of your condition. I can venture a guess at the results, but I want to confirm my diagnosis." Ninety minutes pass, and then finally Miss Silver is finished. She hands the completed test to the doctor. He glances at it briefly, opens a folder and compares it to an answer sheet, and enters the results into his laptop.

After a moment he looks up. He jots some final notes in a manila binder and responds "Well, Miss Silver, it's as I feared. It appears you have a severe case of Bipolar Disorder, with complications." Miss Silver appears stricken, with a deer-in-the-headlights look of panic. "What does that mean?" she wails. Leaning back in his plush leather chair, the doctor replies, "You're a manic-depressive, young lady. Simply put, you're given to extreme mood swings, and that can have grave consequences.

"I hate to put it so bluntly," he continues, "but it seems that you need to hear the truth." Continuing, he leans forward, as if confiding a secret, and explains "I can prescribe some Lithium, which should have a steadying effect. That way your mood won't oscillate as much between highs and lows. Frankly, though, I think you should warn your family so that they know what to expect and can try to be supportive." Part two follows.

Buy Silver. Buy Gold. Save Copper. Start Now.

Sunday, January 29, 2012

Sino Silver Sabotage

China has long been accorded the status of a combatant in ongoing conflicts. At least so states Jim Rickards, who recently penned the excellently received tome Currency Wars. His book details the global back-room machinations of various Central Banks, as they exert their cumulative insidious influence upon their respective currencies in what has been deemed a worldwide race to depreciate all fiat currency. Whether or not that is part of a hidden agenda by TPTB, leading us towards a NWO, and steered by a shadowy cabal of uber rich who meet at the Bilderburg, is not the intent of this piece.

What I wish to consider is this. Our government, and our Defense Department, constantly confer within the Pentagon and other think tank locations, to game scenarios that might foresee ramifications of moves and countermoves placed into play in response to various gambits launched by "the other side." In a milieu, where the designation of the origin of nefarious acts that might imperil our United States borders constantly changes, the play remains the same, but the cast is constantly auditioning for new roles. When one antagonist falls ill, another swiftly takes his place. Witness North Korea. Pun intended.

We have enough problems with the likes of South America's capos Hugo Chavez, and Evo Morales, nationalizing oil and threatening mining interests within the borders of Venezuela and Bolivia. Any Arab state, as Libya and Iraq can attest to, that threatens to trade oil for gold, or in fiat currencies that would bypass the dollar, will swiftly find itself under attack and it's leaders replaced. All under the guise of offering stability and an opportunity for democracy.

There remain larger adversaries. Iran comes to mind. Ahmanidinejad appears, at times, a megalomaniac who is equally intent upon advancing Iran's purported nuclear enrichment program, wiping out the Jewish state, or threatening the oil supply by blocking the Straits of Hormuz. Since a large frontal assault might eventuate in the onset of WWIII, perhaps their leadership and command structure lend themselves as targets for covert forces and surgical strikes, like excising a particularly nasty tumor. Anyone know how to reach Mossad and Sayaret 13 to contract some wet work?

Another thorn in our side is Russia's Valeri Putin and his constant recommendations to replace the dollar with a basket of alternative currencies and the threat that poses for replacement of our fiat issue as the reserve currency of the world. Hyperinflationary repercussions would be felt at home as all of the suddenly useless American currency was repatriated. Our standard of living would plummet faster than the libido of a Viagra proponent who waited too long to take advantage of his uplifted spirit.

We are already at war, and have been for years. The opening salvos were launched stealthily, not at our borders, but at our hoarders. Someday this might be referred to as The War of the Precious Metals. China, unbeknownst to most, long ago launched Weapons of Math Destruction at our financial realm, aiming to sabotage our financial world. Coursing towards American borders are not nuclear submarines armed with cruise missiles, but massive subterfuge, whose deck flaunts weaponry intended to hurl deadly projectiles. Counterfeit silver, to be specific.

Who really knows how long China has been exporting fake silver bullion to the world? Did it begin as long ago as the Hunt Brothers induced silver spike of the late Seventy's/early Eighty's?
In any event, such an answer would be academic, but what is not moot is the acknowledgement that such fake bullion has flooded our shores. This cresting wave threatens to undermine the efforts of Americans who strive to take protective measures against dollar depreciation and the subsequent loss of purchasing power by amassing small caches of safe haven metals, silver and gold.

Although it has been discovered that fakes have been produced, again most likely originating in China, of Canadian Silver Maple Leafs, as well as American Silver Eagles, I wish today to address another niche of the silver bullion spectrum. No, not the fraction of cirulating Sunshine Mint rounds that have proven to be counterfeits, but the existence of faux Engelhard Silver Prospector one troy ounce rounds. The extent of this problem may be far more widespread than anyone realizes.

What could a foreign power such as China hope to gain by such a ploy? Well, for one, cheaper silver as these counterfeit bullion rounds and bars directly channel investment demand away from the fast diminishing supply of above ground silver stores, lowering the price as they do so by blunting demand. Meanwhile, they can nationalize the silver mined within the borders of their own country, prohibiting exportation while simultaneously increasing the tonnage of silver imports. The accuracy of the numbers reported by Chinese trade officials is debatable.

To funnel investment monies to such a desired effect would require pervasive, widespread fakery to an almost unimaginable extent. But who can reliably refute that condition doesn't already exist? Videos making a viral impact via youtube explain what to look for in order to verify suspect rounds. If they are correct, the visual clues useful for tentative preliminary identification of fakes may be present on as many as 76% of the listings available for purchase on auction site ebay. I've already discussed Type 2 Engelhard silver rounds in Ebay Prospects Poor For Silver.

If those alleging that the features of the Type 2 round are consistent only with fakes, then it is already too late to address the problem. The challenge then would become identifying which few Engelhard rounds were genuine. And see, that's a point that kind of sticks in my craw. Of all the reading that I've been doing since this issue was brought to my attention, every source quoted that Prospectors are prized as collectibles due to their scarcity. Do they seem scarce to you? My guess is that some Chinese criminal enterprize recognized an opportunity and took advantage of it. And, unfortunately, of us.

If what I've documented is true, the problem of Engelhard fakes is widespread and burgeoning. It is not a disaster which remains fixed in scope, but instead represents a pernicious danger to the financial well-being of anyone attempting to amass silver bullion as a hedge to economic Armageddon. The problem, despite acknowledgement of its existence, is not one that can be vanquished like the bite of a lethal viper with simple application of an anti-venom, but rather more akin to falling prey to a many-headed hydra with the power to petrify.

How many silver savers would continue to do so, should they discover that a significant portion of their accumulation turned out to be worthless? I imagine I could be exaggerating the extent of the problem, for how many Prospector collectors can there be, anyway? But more will develop in time, if the problem persists. Dilution of the pool of authentic Prospectors will only accelerate as more and more fakes inundate the market. Guys like this perpetuate the problem!

So what might be a pervasive problem today, if accurately assessed at 76%, will only become exacerbated as more and more fakes cascade into the markets to the point of ubiquity. You can rest assured that such toxic residue is poisoning the purity of our precious metals streams in a torrent, not a trickle.

Even the rounds available on the secondary market, from ostensibly secure online precious metals sites such as APMEX, are subject to the same hazards faced by others. The fakes are getting so good, they're fooling the experts! If I am not deceived by my failing vision, the picture below and the text that follows, from the APMEX site, pictures the "fake" Type 2 Prospector.
"Guaranteed .999-fine, these 1 oz rounds will be Engelhard only. Due to the extreme popularity of these rounds, when we come across an offering, we will set them aside so you can buy exactly this brand. With these rounds no longer being minted, they are difficult to locate in quantity. When we do have them, they typically sell out quickly. Don't wait too long as they may not be here next time you return!"

Provident Metals offers an image of the Type One Prospector, and upon close inspection the diffences are easy to see. Note greater detail in water left of miner's pan.

When industry giants, whose expert status is nonpareil, can be gulled into listing Type 2 Prospectors that may prove to be counterfeits, can any source be trusted? Must the Engelhard Silver Prospector be relegated to the status of "yeah, it's a nice looking round, but I wouldn't touch one with a ten-foot pole, it's probably fake." I hope not, but the more that I delve into this cesspool, it seems the cistern has already been fatally contaminated. There's a turd in the silver pool, and it appears to be Chinese.

Buy Real Silver. Buy Real Gold. Save Copper. Start Now.

Saturday, January 28, 2012

Ebay Prospects Poor For Silver

Are you relying upon ebay as a source of small lots of silver, that you hope to win at a small premium to melt, or perhaps even below? I suspect that's the intent of several posters at two different precious metals forums I am a member of, and Not so much the members of the latter group, as they tend to buy, sell, and trade amongst each other, or participate in "group buys" so as to qualify for the minimum purchase requirements from online precious metals dealers, or private mints, that would otherwise present a formidable barrier to the small budget collector.

But members at realcent frequently brag of their "finds" on ebay, recounting how they were able to place a winning bid at such and such a percentage below melt, or combine any number of discounting mechanisms to realize a substantially reduced final cost. This rodomontage, more often than not, is boasting regarding silver rounds, in small lots. The American Silver Eagle is one of the most widely produced one troy ounce silver rounds, more ubiquitous than even its darling sister to the North, the Canadian Maple Leaf, and more often than not the threads are about one of these two coins.

But occasionally someone will post about a seemingly great deal they just scored on a silver round that is a bit more arcane in nature, the Engelhard Silver Prospector. Popular following the previous Hunt Brothers induced silver run-up, these rounds, produced by Engelhard from 1982 until 1987, are sought after collectibles, due to their scarcity and thus difficulty of acquisition. Did I say scarcity? Aren't there 219 individual listings on ebay right now, if you search for Engelhard Silver Prospector by each individual year of issue? And even more if you search with less stringent fields?

Did I previously mention a seemingly great deal? What you are buying on ebay might be a great deal, but for the seller, and not so the buyer. I'm not too sure about this Albert, and correct me if I'm wrong, but shouldn't silver-plated brass be a lot cheaper than silver, per troy ounce? Chances are good, no... make that very very bad, that the great deal on the Prospector you just won is only a piece of brass or copper with a 100 mill coating of silver, that looks alot like an authentic round. So much so, that it has fooled most of the people buying and selling on ebay.

If I'm right, and here I'm depending on the corroborative evidence describing these fake Prospectors, then the counterfeits appear to have less detail on them, suggesting that they were made from a mold. The ripples in the water are less defined, there are fewer wrinkles in the upper right arm of the prospector, and fewer creases in the leg of his upright leather boot. One detail, which is telling in its absence, is the presence of four or five tiny horizontal ripples that descend in vertical fashion, and measure less than one millimeter, to the left of the miner's pan. According to the links posted, this detail is missing on the fakes.

So, bearing these parameters in mind, I set about to determine how many listings on ebay might be vending counterfeit Prospectors. It would be unfair to characterize these sellers as con men, as they very well might not realize they are selling suspect coins. Some of the biggest power sellers on ebay, some with positive feedback in excess of 15,000, are among the "guilty" parties. Rather than alleging that they are selling fakes, let us proceed to christen the "authentic" Prospector as Type 1, and the round with less details, described as fake by others, as Type 2.

After examination of all the images that were clear enough to differentiate Type 1 from Type 2, I was able to establish an incredibly high percentage of potential fakes being sold online. If this is true, than the Chinese criminal enterprises that are alleged to be fabricating these counterfeits have flooded the markets with them. Of the 219 listings I scrutinized, 167 are Type 2. If this is true, and this means of identification is valid to detect faux silver, then it means that greater than 76% of the Prospectors listed on ebay are fakes! You have less than a one in four chance of finding silver, if you're panning the Engelhard River on ebay!

I originally began to look into this after being alerted that fake 1984 Prospectors have been found. Videos on youtube depict individuals grinding down the silvery exterior layer on some of these suspect coins, only to find a core of brass-colored metal. But if what this reviewer found to be key to identifying the fakes (Type 2) is true then one can no longer trust the secondary market as a source for investment grade silver, if they be Prospectors.

Are the 1984 issues the only ones whose provenance is controversial? No. I looked at 105 listings for 1982, only four of them were authentic (Type 1). Of the 1983 listings, there was only one, and it was Type 2, even though it is wrapped in factory sealed plastic. ... 3a6fb26a8b Of the 1984 listings, there were only three Type 1 out of 37 listings. The 1985 listings revealed 35 Type 1, and 22 Type 2. 1986 showed twelve listings with the findings evenly divided, six each.

1987, the last year the silver Prospector was released by Engelhard, there were three Type 1, and four "fakes" Type 2. One of the Type 2's is in this cardboard-enclosed set disseminated by Whitman Coin Products.. Was their company duped as well, by fakes that were present even then, back in 1987? ... 5ae10270cb Or, is there more to this story? Is it possible that there are two types of coin, both authentic?

I suspect this speculation might be true, that both types can be authentic, and that the cause of the blurred features on the Type 2 could possibly be due to tired dies late in production. I decided to conduct some experiments. I attempted to test the specific gravity of both types, following instructions on a youtube video, and my results were inconclusive. On the two coins I tested the result for both was 10.4667, pure silver should be 10.5. But this test was conducted on one of each type. Of the 21 coins that I personally had at hand all were nearly identical in wt at 31.1, or 31.2 grams. One weighed 31.3.

I conducted a ring test on these coins. Some of them, when balanced upon a fingertip and struck with another coin, produced a rich resonant timbre that endured more than a few seconds. Others produced only a short plink. Again, both types produced contradictory evidence. I don't wish to conduct destructive tests to reveal the interior of the rounds, nor do I wish to drip nitric acid upon them to see if a color change would indicate their purity. But tomorrow, I think I'll go pick up a rare earths magnet and conduct that test.

There's much more to this story than first meets the eye, and if indeed the Chinese counterfeits pervade our supply to the degree suggested by the physical description of the Type 2 round, then we are all in deep feces. How many dollars have been lost to the supply and demand equation, that would otherwise have lifted silver prices higher if demand wasn't being funneled away and being satisfied by fakes? How many small scale buyers, once discovering they were duped, will remain in the silver pits of ebay mining for more ore?

For now, until substantive examination can provide more concrete evidence, one would do well to exercise caution. Buy a different round for now, until these charges are proven invalid. Purchase directly from known, trusted online precious metals dealers. There are many reputable ones, just a few of which are APMEX, Tulving, Provident Metals, and Gainesville Coins. Make sure they offer a money-back guarantee. Follow these simple guidelines and you should be safe. For if you don't, sooner or later a true piece of junk silver will wind up in your hoard, and you will be hard pressed to get your money back. I guarantee it.

The Bearer of Bad News

Recently, on, where I frequently buy, sell, and trade silver and gold with other members, it was brought to my attention that an item that I had sold might have been a counterfeit. I don't remember where I obtained these coins, but I deal through what I view as reputable sources. I have bought similar coins from several other members, as well as for years upon ebay, so in essence, establishing provenance is impossible. I offered a refund or an exchange, and the issue is still in discussion.

Several points arise from this. It is contingent upon you as the seller, to demonstrate integrity and offer compensation to the buyer if your reputation is important to you. I know, in my instance, I plan to continue as a member for years on the various internet venues I haunt, and I am not willing to tarnish my image and be known as a scam artist, merely for a few hundred dollars. Send back those twelve 1984 Engelhard Prospectors, I'd rather eat their cost then reap my just dessert if I didn't.

One issue that raises it's ugly head from this fiasco is this. Do I trust my buyer? How do I know he didn't get duped by someone else he has no recourse for recovery from, and is now telling me that the rounds were provided by me and me alone? On ebay, I could definitely see that being an issue, as a buyer might purchase a roll unsuspecting of their authenticity, and upon receipt merely open the lid and admire the top round without further disturbance, to avoid leaving fingerprints.

Months, or even years later, one's suspicion might become aroused when a flurry of news items regarding Chinese counterfeits hit the bullion stacking universe. You go to examine your hoard, thinking smugly "well, I know mine are all good." You weigh them, expecting the industry standard of 31.1 grams, or at worst a variance of no more than plus 0.1 gram in excess. To your horror, you realize that most if not all of your Prospectors weigh 30.9 grams or less, which could well be a tip-off they're fakes.

How could this happen? Well, the counterfeits are getting that good! They're fooling dealers who don't test their silver content, or check their weight, because visually, they're nearly indistinguishable from the Real McCoy. Sure, you feel a sense of chagrin that you were duped, but even the so-called experts fall victim to the same scam, so find solace in that, if you can. But then, what does a defrauded buyer do? If he can't pinpoint who he bought them from, then will any scapegoat do? How could someone prove that you were the one who sold them the rounds?

I can foresee this becoming a problem on bidding venues like ebay. There are unscrupulous people in the world, and should someone find themselves holding the short end of the stick, how hard would it be for them to purchase a like article on ebay, then upon receipt return the counterfeits and demand a refund? As fakes become more ubiquitous, you can be sure this will occur. The seller, to maintain their feedback intact, will accept the return of the fakes and refund the money involved, never knowing, with certainty, if he is himself a subsequent victim of duplicity.

Thankfully, in this case, I have no doubt that the rounds were once mine, although I am unable myself to determine where in turn I got them from. In this instance, the buyer and I have conducted numerous transactions in good faith, and I had not the slightest inclination to doubt him when he expressed his doubts to me. Sure, I was dismayed, but there is no way a seller, wishing to maintain their integrity, can in any way challenge an honorable buyer in this situation. A resolution is in the works, one that we both consider satisfactory.

This situation raises ethical and philosophical issues. Two more points, then I will let the matter rest. You know what's ironic? These fake silver rounds are no different than Federal Reserve Notes. Backed, as they are, by no more than "the full faith and credit" of the United States Government, they circulate freely and have value. As long as you think they have worth, they do! It's only when you become disillusioned, that the individual (or the public) will scramble to abandon them.

Fakes are, beyond doubt, circulating widely without the knowledge of the public, and thus for all intents and purposes have the same value as real silver, until one is tested and determined to be counterfeit. And the same holds true with the value of our currency. It is being tested now, and found lacking in purity. Were it a coin, such debasement would be apparent to all, as since the founding of The Federal Reserve in 1913, our dollars have lost nearly 98% of their purchasing power.

If you want to enjoy a teaching opportunity with your children, search images for advertising circulars from the Twentie's and Thirtie's. You'll find hundreds of pictures of early century posters and placards, newsprint and magazine spreads that will tout the products of the day. Aside from laughing at the artwork, you can point out how inexpensive items once were. The kids will giggle and scoff, although I seriously doubt, after due consideration, that you'll feel the same. What The Fed has wrought is really no laughing matter, rather one more suited to induce nausea.

Finally, does the emergence of widespread counterfeiting offer an opportunity to some enterprising individual? Each of us is susceptible to being deceived by an authentic looking imposter. Why doesn't someone come up with a wallet-sized Identikit that could hold a gram scale and known fakes of such items as Kooks and Pandas, Koalas and Maple Leafs, Prospector's and American Silver Eagles? It would not even need to contain the actual fakes, but merely high quality images of them, side by side with real rounds, pointing out tell-tale signs of fraudulence.

I, for one, would endorse adoption of the use of such a tool, and would consider myself fortunate were I able to obtain one. The Fisch tool set renders detecting counterfeit gold coins more simple, we need someone with industry to step forward with an idea such as mine, or its derivative, so that the plethora of fakes that are circulating as silver bullion can be detected and destroyed, their fabricators identified and prosecuted for criminal acts. Too bad we couldn't as easily find someone more qualified to pilot our national helicopter, Ben.

Buy Silver. Buy Gold. Save Copper. Start Now.

Thursday, January 26, 2012

Ten Silver Coins Priceless in the Eyes of Aficionados

This morning I was reading a thread on BullionStacker entitled "Interesting Article." There, forum member mtforpar had posted a link to what I presumed was a submission by Adam Doolittle, published in Silver Monthly. That piece, entitled The Ten Worst Silver Coins For Investment, apparently raised the hackles of the BS pack, as mtforpar stated "I stumbled across this article tonight. I love it because I am making money by doing the exact opposite of the articles advice." I replied, taking the stance of devil's advocate, and some interesting points were raised.

Doolittle's offering, upon investigation, represents more than an author submitting an article to a online website that publishes it within an e-zine. It turns out Adam Doolittle himself is the host of Silver Monthly, which bills itself as a venue that attempts to promote intelligent investing in precious metals by connecting reader's with great writers. Their mission statement in part, states "intelligently analyzing the silver market, investments, and policies influencing these topics."

A bit of history: a paraphrased excerpt of which follows. In 2005, Adam Doolittle founded Silver Monthly. He felt that there were too many conspiracy theories being touted in the precious metals arena that were masquerading as professional journalism. So Silver Monthly was begun as an attempt to publish credible content regarding a variety of issues facing silver investors, such as market forces, overall economic conditions, and politics.

Doolittle's piece The 10 Worst Silver Coins for Investment specifies ten different silver rounds, which most are familiar with. If you are an investor new to precious metals, he suggests that purchasing high-premium bullion rounds is a strategy ill-suited to increasing your net worth as rapidly as possible. He lauds the simple tactics of paying the least amount possible for your silver. Don't pay a premium, he recommends, because you'll wind up paying a high price.

The coins he nominates as candidates - primarily Perth Mint choices - are, ironically, among the favorites of collectors at Bullion Stacker. Historical price performance is available for high-grade Morgan Dollars. Similar comprehensive documentation for recently produced Government Mint issued bullion rounds is lacking. Anecdotal evidence as presented by purchase prices and completed sales on ebay could well prove inconclusive of trends due to the nature of the short time frame encompassed.

Therefore, I shall intentionally limit the focus of my rebuttal to his selection of the Morgan Dollar as one of the worst coins that investors could select by which to increase their net worth with its appreciation. The Morgan Dollar is second only to the Lincoln Cent amongst American collectors in popularity. Mr. Doolittle might as well disparage the Greek Gods. He would do well to be wary of lightning bolts in his area. They may well emanate from atop Mt. Olympus, hurled by an angry Zeus.

The Morgan dollar was designed by George T. Morgan, Assistant Chief Engraver under William Barber at that time.
It was produced by the United States Mint from 1878 until 1904 then, following a respite, again for one final year in 1921. The coin, with its large size and intricate designs, is considered by many numismatists as one of the finest ever placed into circulation.

Despite hundreds of millions being melted, many still exist in pristine condition, perhaps accounting for their popularity. Superior grade specimens, covering a range of years and an array of mint marks, may still be obtained at reasonable cost. Slabbed Morgan's performed reasonably well during the Hunt Brothers induced silver spike of 1979 to 1980. I've read that select key-dated coins in gem condition appreciated as much as 800%.

This, however, was during a period when that increase was surpassed more than three-fold by the simple increase in the value of silver bullion itself. Thus, one might consider Morgan Dollars as a means of diversification within a precious metals portfolio, as opposed to their being the centerpiece and sole component of a bullion acquisition investment strategy. As silver rises in price, there will be profits to be captured at either end of the spectrum. And, in any event, those with the means to procure high dollar high dollars are by no means destitute.

Doolittle mentions expensive third party graded and slabbed Morgan dollars, contending that if a hefty premium is paid to purchase the coin, it may not do as well as simple bullion in a scenario of hyperinflation. He asserts "The problem with these coins as investments is that their numismatic premiums are unlikely to keep up with the rise in the price of silver. For example, if silver goes up 177% from $18 to $50, then a one-ounce numismatic collectible coin valued at $100 is likely to go up by only 32% to $132. The collectible coin will go up based on the silver it contains, but there’s no reason to think the numismatic premium will increase too."

Though Doolittle's reasoning appears plausible, it may in fact be specious. As long as a collector base exists, there will be an increasing demand for rare, key-date coins, in superior grade condition. This will cause their prices to increase. It's inevitable. When the hammer falls during the auction of a rare date high-grade Morgan there is often a stunned silence, before the charged atmosphere erupts spontaneously into appreciative cheers. Of course, should "the shit hit the fan," then all bets are off.

Mr. Doolittle, with his attack, has launched a weapon threatenening the very existence of a premium market for Morgan Dollars should too many newcomers with funds in hand, freshly induced into purchasing precious metals, take his tirade as gospel (Yahweh has spoken) and widespread adoption of His Commandment ensue. While collecting Morgan Dollars may not be the most lucrative journey one could embark upon, it represents a goal that is indeed a worthy challenge. The completion of a registry of third-party graded slabbed coins in MS65 or better condition, remains a dream few but the wealthy will realize.

The Morgan cartwheel is held sacrosanct by its many worshippers, and in choosing to target this King of the Coins, Adam, in the eyes of the congregation, has done little more than to compare unfavorably to a hungry Neanderthal, wrapped loosely in animal furs, tracking a gigantic lumbering Wooly Mammoth across snowy wastelands, poking at it with a sharpened pole, hoping to hasten its demise. CaveDude? Bro, unless you get very lucky, you're gonna starve.

Buy Silver. Buy Gold. Save Copper. Start Now.

Opportunity Lost?

This Wednesday morning, January 25th, 2012, the same day that Helicopter Ben announced that The Fed will continue their accomodative ZIRP until 2014, I was watching intently on Netdania as the silver price streamed live. I like to watch a one minute refresh, as it gives me a quick indication of market direction, alerting me to the possibility of an entry point for stock trades that I've referred to, utilizing leveraged ETF's. Silver had finished Monday at $32.20, and then fifteen cents higher the following day.

I was hoping that, if a silver sell-off were to continue, as one might have inferred from overnight weakness, that spot would have drifted down to, say, $31.00. That would have provided enough incentive for me to book a trade, having retraced from a print above $32.50 in previous days. Failing that, I was watching the "witching hour" 10:00am EST, during which the New York trading desks frequently unleash the hounds of short selling, leading to a temporary rout in the silver market precipitating a swift plunge.

Had that occurred, even to the tune of just a near-vertical drop of sixty or seventy cents to $31.30, I would have been convinced that the time was ripe to implement a new position, and would have liquidated shares to pick up more of the Velocity Shares triple-leveraged silver ETF, USLV, thus to initiate another trade as detailed in Triple Dip, Double Run. I watched with mixed emotions as the unfolding tape unveiled a story that defied my expectations.

Instead of a downturn, silver took off. This was shortly after the FOMC made their announcement, and apparently traders found this further admission of accomodative policy implementation to be supportive of a weak dollar policy, and thus a favorable environment for precious metals investment. It turns out silver never hit my target, dropping only to an intraday low of $31.89 before it headed North with a vengeance. At today's bottom USLV could have been purchased at $39.68, had one's timing been perfect. More likely, one would have been fortunate to pick up shares at $39.80.

In anticipation, I had readied one portfolio for liquidation of a few positions. I had been prepared to sell some shares of a few various silver miners. These included my holdings of Pan American Silver (250 shares), a portion of my AGQ (327 shares), as well as my stakes in Fortuna Silver Mines (308 shares), Impact Silver (914 shares), another bloc of Silver Wheaton (319 shares), and my entire position in Tahoe Resources (114 shares). Liquidating these shares would have generated $38,236. Subtracting $56 in trading expenses I could have purchased 959 new shares of USLV at the aforementioned price.

I missed this opportunity because I asked too much of the market, and you don't always get what you want. Had I acknowledged that spot had retraced a respectable amount, and made those sales enabling that purchase, I would have shown a gain, by the end of trading that day, of almost $6,396. Silver went on to rise $1.20, and USLV demonstrated a commensurately healthy triple-leveraged return of 12.44%. But it's simplistic to just say I lost the chance to earn $6,396. We need to examine the performance of the equities I kept more closely.

These surged nicely as well, albeit not with the strength of USLV. At 10:00am EST, had I triggered the trades, AGQ shares were $53.43. They finished the day at $59.39, a gain of 8.23%. Liquidating those shares would have obtained $17471.61 for me. Holding them instead, their value increased to $19,420.53. FSM was $6.10 per share and increased to $6.54, a gain of 6.34%. Selling those would have realized $1878.80. Holding them resulted in a gain to $2,014.32

ISVLF shares would have netted $1.55. Instead, they rose to $1.68, a 5.12% gain. Their sale initially would have raised $1416.70. Their retention resulted in $1,535.32. PAAS shares were worth $21.18 in the morning, but by mid-afternoon they had climbed to $22.37, a gain of 2.38%. They grew in value from $5295.00 to $5592.50. SLW rose from $31.45 to $34.88, a 7.99% gain. Their value increased from $10032.55 to $11126.72. THOEF was the strongest of this handfull, rising from $18.79 per share to $21.01, a hardy gain of 11.57%. Their value rose from $2142.06 to $2395.14.

So what is the point of all this number crunching? Isn't it all just a waste of time? "No," I contend, because sometimes a review of the numbers will elucidate previously unconsidered attributes of the trade not exercised, which can help one to evaluate the potential of possible trade executions in the future. Let's look at what the numbers have to reveal. In a previous article, A Good Parking Place, I promoted the thesis that selecting cash as a place to wait for value buys can be a poor choice.

Some stock market gurus advise never to chase price, to let the stock come back to you, thus never to "buy at market." I would have sold those positions and had a balance of $38,236 with which to buy new shares. But had I followed the premise of never buy at market, and placed a limit buy order, say at $38.60 for 964 shares, the order never would have triggered as, for the remainder of the day, the entry point into USLV became increasingly more costly. Sitting in cash would have cost $6375.96 in opportunity lost.

But what actually did transpire? By retaining the original shares considered for sale, their value increased to $41,991.53, a gain of $3754.81, representative of a 9.61% increase. So the opportunity lost expense was reduced to $2621.15. Reviewing these numbers and analyzing their meaning imparts a message. Triple-leveraged returns on a nice silver up day, can be very robust. I'm talking huge, Jorge!

It's hard to argue with success. Triple Dip, Double Run has very real potential, particularly if you are alert to market movements and can employ the strategy at opportune moments. Today was not even ideal to play the strategy, and yet look at what unfolded. Imagine how much greater the returns can be on days when immense pressure is exerted upon the market to suppress prices, and serendipity allows you the good fortune to make timely trades. Why (pause for effect) you could make a good fortune!

Buy Silver. Buy Gold. Save Copper. Start Now.

Retarding Resource Depletion

Recently, in another piece entitled Ten Silver Coins Priceless in the Eyes of Aficionados, I took the side of detractors of an article published in Silver Monthly, submitted by Adam Doolittle. That submission, entitled The Ten Worst Silver Coins For Investment seemed to raise the defensive nature of some forum members at an internet site I am proud to claim membership to as well,

BullionStacker is comprised mostly of folks who are long-established in the cyberworld as advocates of investments in safe-haven metals, silver and gold, platinum and palladium, as a means of preserving their purchasing power. It is vital that one protect themselves in this fashion, as on a worldwide basis governments, each with their own rationale, race each other in depreciating their currencies, inflating the money supply with global simultaneity, firing the first shots in what Jim Rickards likes to term The Currency Wars.

Unfortunately, the victims are often their own citizenry, particularly the middle class. This socioeconomic group suffers constant attrition, it's numbers shorn as constituents are lost to unemployment and underemployment, savings are exhausted, or pensioners discover their fixed incomes insufficient to cover ever-expanding expenses. Too often, the best formulated plans of those who have just retired, or planned to soon do so, are disrupted by poor investment choices or dismal returns within their 401K's.

These individuals are then faced with alternatives, none of them pleasant. They can remain in the workforce, health permitting, should they enjoy the luxury of doing so at their place of employment. They can delay, sometimes interminably, their target deadline for full retirement. Or, they can attempt to return to the workplace in order to supplement their meager subsistence, perhaps as one of those cheerful blue-haired elderly greeters at Walmart who, were you able to look past their friendly mien, one might be painfully dismayed to discover their financial straits.

But, I digress. The point I want to make today is that there is a unforeseen consequence to individuals purchasing specialty silver coins from private and government mints, such as the Royal Canadian Mint, or the Perth Mint of Australia. What qualifies a coin, in my estimation, as specialty in nature? One that is produced in limited number to increase its allure due to novelty, one that is often classified as exotic, picturing an animal indigenous only to the region of the Mint fabricating it, and one, which for marketing reasons, carries a hefty premium above the melt value of the silver content of the coin.

I need not detail individual attributes of the coins of which Mr. Doolittle relates, as most are familiar with the perquisities of Kooks and Pandas, Koalas, Grizzlies, Wolves, and Cougars. The list could extend beyond, to encompass New Zealand Taku Turtles, Bolivian Andean Cats or Blue Macaws, as well as any number of limited item geographically related national park themed items produced by our own United States Mint. Any time there is a piece produced by a public or private mint, that carries an onerous premium to melt, there will be ramifications.

What might those ramifications be? Why only that one could spend their money more strategically, if their intent was to benefit from an ultimate rise in the price of silver increasing the value of their previously acquired physical hoard. You see, Gomer, there is only a limited amount of money chasing a diminishing above-ground supply of silver, whether fabricated in the form of small bars or coin to stimulate investor demand, or as one thousand ounce bars of .9999 purity to service the needs of industrial users.

What happens to the eventual resource depletion of silver, when people pay bloated premiums on one troy ounce silver rounds produced by mints? It retards the attenuation of supply. The off-take of silver from the market is slowed. This is counter-productive if one's hope is that a steady acquisition of small amounts of silver, by a burgeoning cadre of citizens that circumnavigate the globe, all coveting the lustruous noble element, will eventually deplete stocks and thereby cause a resultant price rise.

Spending extra money on premiums slows the eventual extinction of silver, and will prove deleterious to the individual attempting to get the most for their money. Silver has been estimated, by the GFMS, to have less than a decade's supply of metal retained in the Earth's crust at present rates of extraction. Why would you not want to pay as little premium as possible to obtain the wealth-safeguarding status that silver confers upon its holders?

It's really no different than the claims made by detractors of the various silver ETF's, such as the iShares Silver Trust SLV, or the ETFS Silver Fund SIVR. They claim that money funneled into those exchange-traded funds, which are intended to track the price performance of silver, with such emulation affording one the opportunity to realize paper profits in various venues, does nothing to promote the acceleration of price rise.

Instead, this inflow of funds is, in reality, siphoned away, diminishing demand rather than enhancing it. There are many, Jason Hommel and Ted Butler among them, who assert that the various ETF's do not even hold the silver they purport to stockpile as backing to the shares. This money would be better spent, as Max Keiser suggests, by people withdrawing their contributions to such entities and purchasing tangible physical silver that they then take possession of.

Some like to opine "if you don't hold it, you don't own it." If you were constrained, due to financial limitations, to purchasing only a few hundred dollars worth of silver each month, wouldn't you far prefer to obtain more ounces for your money? By amassing a store of wealth that increased considerably faster in size, measured by number of ounces, rather than an ostensible shadow worth variable denoted by collector's avarice, wherein liquidity might limit demand?

Due to the reasons listed, I think it's indisputable. It just makes more sense to get the most for your money, particularly for those new to accumulating silver ounces. Why don't we reverse and modify that maxim? Wouldn't it be more conducive to all of our goals if everyone were to realize that "if you don't own it (high-premium silver rounds), you hold more of it?" To borrow from Ultimate Cage Fighting, I know I'd much prefer to survive the melee for three rounds, rather than get beaten by a devastating first silver round knock-out.

Buy Silver. Buy Gold. Save Copper. Start Now.

Wednesday, January 25, 2012

You Always Hurt The Ones You Love

County Limerick, in Ireland, draws no small bit of fame due to the consensus that a poetic form of jesting, the limerick, derives from there. Widely heralded as an example of bawdy rhymes, in which the first, second, and fifth line rhyme with one another, as well as the third and fourth, they are often dismissed as mere doggerel. But those who do so risk writing off a form that has its devotees, moreso in praise of the laughter evoked, rather than their sober intent and lofty musings.

Here then, in honor of that tradition, are some that were crafted recently to bring notice upon forum members, who, in all likelihood, would have preferred to remain outside this particular circle of limelight. With the intent of providing a laugh for those who know them best, and recording for posterity these five-line jokes, then let us now expose to pillory some of these fine folks. If perusing these mockeries stimulates mirth, why not visit and lurk or join for more fun yet?

Doc Chris Rodebaugh

There once was a Doc named Rodebaugh
Who prized Morgans more than cole slaw
But the long arm of the law
Reached forth with its claw
When Chris peddled a counterfeit flaw

There once was a Doc named Rodebaugh
Who preferred slabbed St. Gauden's over raw
But then he learned he'd been reamed
By a fake gold-colored coin scheme
Now third party grading sticks in his craw

There once was a Doc named Rodebaugh
Who wielded his craft with dental saw
They thought they were getting a filling
As their gold fillings he was stealing
Which left quite a hole in each patient's jaw

Once Doc found his woman with a Jamaican
In six feet of water covering Caribbean sand
It's a good thing that clown
Was already half-drowned
Or Rodie might have Aruba'd that man


There once was an old geezer named Ray
Who was practically giving his silver away
It was really feedback he was after
Which accounts for all the laughter
As members wondered what's on sale today?


Txbullion's real name is Jack
And it's pennies that he loves to stack
In fact he's got so much copper
He may be richer than Cyndi Lauper
Is it any surprize he's lost track?


Corsair's a student some say
Who in Calculus just got an A
An accomplishment to be proud of
Till you learn extra credit was allowed
I hope he didn't do that for the grade?

Market Harmony

Market Harmony is a fellow named Mike
Who enjoys it when precious metals spike
Women melt in his arms, too
Or at least their gold charms do
As he re-molds them into something he likes


Adam Rice is a fairly nice guy
I'm surprized you would have to ask why
With a name like the kidman
Even Jamaicans urge "Bid, Mon!"
So most auctions he loses, but he tries


Eric (Thogey) has a business doing lawns
But it's not always foreign silver he pawns
Once he went in for some money
With a red package that was runny
The broker yelled "that's a toe! Sew it back on!"


68camaro is a great guy named Rich
Rates the markets, better than Fitch
On the rise of metals I'm told
He favors silver over gold
If he's wrong, well "ain't life a bitch?"


Sheikh yer Bu Tay repairs roofs in the rain
Covering holes so that they will drain
It's actually quite frightening
He works faster than lightning
But when he doesn't, "Oh Lord, the pain!"


Jonflyfish loves to explain
With PM's up or down how he gains
Silver and gold will now either
Hold, advance, or retreat here
Ain't it nice to have them kinda brains?


Scott was a consistent silver buyer
And each time it would seem to rise higher
Till the day that it dove as he wept
Taking his treasure trove to new depths
Proving dollar cost averaging is a lie here


On realcent there's a guy with a handle of Z00
Often reader's would question his comments with "Who?"
"too much time on their hands," he chided the Boards
But with Markets closed we can't add to our hoards
So let's ease up, folks, remember... he's a Noob


A Gentleman resides here named Country
Who Excels at accounting your hunts, free
For spare time he is lacking
After all of that tracking
"But for me," he explains "it is fun, see?"


Chad likes to prep for the day
When TSHTF as they say
"Could you can this, Mr. Nickelless?"
"I'm not sure, might be ticklish"
"But my herring are pickled fish, Oy Vey!"


Gun Nuts gotta love this Deal
No Eastern bloc rip-offs, they're real
If you're looking for a gun
His forum is the one
As thieves would say "it's a steal!"


There's a guy with a name of Rexmerdinus
Seems it rhymes, almost, with sex murderuh's
Whom the cattle on the trail
With a question will assail
"Is that Tex," moo moo, "a herdin' us?"


There's another fella named Rastatodd
Who, if he fished, could be called Castarod
But owning an Italian Deli would be best
As patrons, rubbing bellies, could then jest
"This is delicious, who made this pasta, God?"


Aaron is uthminsta in disguise
Heck, you want to rhyme that, you try
During auctions, instead of bidding
He asks questions, I'm not kidding
Instead of bid increments he'll post "Why?"


Natsb88 is the one with the store
That sells copper bars, silver and more
An engineering student in school
He now follows the Golden Rule's
That should ensure business success, fer shore


There once was a man named Peter
Took a taxi to his girlfriend's to meet her
In her bedroom Slickeast
Found her infected, with yeast
So he proceeded to bake, rather than eat her


There once was a guy Newton7
Roamed the Forum as late as eleven
Posting "There is money, I think,
Mostly sorting Copper from Zinc,
It's like catching pennies from Heaven"


There's an ethical member, Barrytrot
Who promotes Biblical precepts and thought
Like morals, of wrong and right
Beliefs, the importance of polite
It would be cool if Eternity was not very hot


justj2k78 is jumbled up code for just Jay
A psych nurse who can't wait to get paid
This guy loves his work
For Kooks are his quirk
And for Silver Eagles he'll happily trade


Jason the New Hampshire sorter
Dwells not far from Poverty's border
Constantly increasing his hoard
Despite what he can afford
"I'll pay, somehow, for silver I order"


Joe knows a Surething when he sees one
The Fed's printing is nothing but treason
"By the time we hyperinflate
Fiat currency will deflate"
So he's buying silver now with good reason


Trent is a man out standing in his field
Producing amazing crop yields
He's called Tractorman
It's a bigger factor than
The horse-driven plows Amish wield


Theshoenlebens is really named Chris
From frequent dealings I am positive of this
But it seems there's a crisis
He can't pay for his license
Though most Weekend Sale Silver he claims as his


There's an avid roll hunter named CardsnCoins
Searching for silver from New York to Des Moines
To boxes of dimes he's addicted
Seems he's OCD afflicted
Precious Metals Anonymous he'll soon need to join.


ScottyTx is, you guessed it, named Scotty
Who likes to sell coins to us that he got free
Says he works on a rig
But that's not his main gig
"The big money is made on Craigslist below spot, see?"


JadeDragon is too hard to rhyme
So I'll use Cameron, instead, this one time
If a problem is designed
A solution he will find
And publish an E-how for inquiring minds

Silver Addict

There's a Big Dog on this site sniffing our butts
Seems some show dogs prefer mixing with mutts
Silver Addict, you see,
Yearns, at times to run free
From BS duties, but don't worry David, you'll adjust


Highroller is Adam, he's The Man
To store copper till he's rich, that's the plan
As the prices climb higher
A bigger warehouse he'll acquire
So his supply can then satisfy the demand


Andres goes by the name of Oakair
Moved because of all the old folk there
From Florida's sunny shores pretty
To Denver's Mile High City
Beats LA, with it's smog he'd have choked there


I wonder where Neilgin is?
Hope he's not wasted on too many gin fizz
I've enjoyed in the past
His posts, as long as they last,
Could be he's fishin and reeling in his


I don't even know this dude Richard Penny
But he's limericking along with the best of many
But anyone who likes NASCAR
Earns himself a gold star
As long I don't have to pay for that award, if any


There's a guy in CA named blackrabbit
Who swaps MJ to support his crack habit
His parents failed, you see
To raise him religiously
But they blame all of that on a slack Abbot


In the Dakota's there lives NDFarmer
And Ron, it seems is quite the charmer
Told the wife, "That copper ain't wert much
Just a few thousand boxes or such"
Because he didn't want to alarm her

Dumpster Diver

There's a salvage man here, Dumpster Diver
Who's as ingenious at scrounging as McGyver
But with "the touch" that he's got
He avoids much copper that is hot
It's just at parties that he's the live wire, sir

Copper Catcher

Copper Catcher holds this famed record thus far
For KSA Mystery Box's contents he's the star
Who could ever believe
That they would receive
A one hundred ounce Engelhard bar?!!!

Delaware Jack

"If you can read this then you are in range here"
And it's evident to me that sign spells danger
So with Delaware Jack
You just better keep track
Of the difference tween live friends and dead strangers


An unorthodox cross-dressing priest; Aristobolus
Offered turkey dinners at Thanksgiving that cried "Gobble us"
He continued in this service
Till He actually grew nervous
That the spike heels he wore "might just hobble us"


Austin wasn't really a grump, thanks
It's just that an undeserved bump ranks
So when they told Chief "no more"
"I'll get even," he swore
"I'll turn them into one of my dump banks"


There was a stacker once named CU Baker
A fan, can you believe, of the Lakers?
When LA slid into the ocean
Due to seismic commotion
They then renamed the team The Quakers


Mike's from Utah, he's known as Peace People
And he'd rather not support their fees steep, he'll
Avoid sites like ebay
And to paypal he'll say
"Keep your gifts, I ain't helpin' you fleece sheeple"


He's got a cartoon avatar, Woody Woodpecker
You'd imagine, too, that there'd be a Shrek here
Is this rhyme, or a crime?
For OneBiteAtATime
To me sounds just like Hannibal Lecter


How far can the gold bull climb?
To unimaginable heights given time
But if you think it's too late
Board the agmoose that waits
Bet with Keith on silver troy ounces .999


Was the number of Sioux braves in the tribe
Little Bighorn, General Custer
Battle's blood remains dust there
Guess they wanted them all dead, not alive


Treetop's a nice guy named Zac
Who moved, anticipating an urban attack
This once NM high plains drifter
Couldn't have uprooted much swifter
If he were pulling weeds in his garden out back


Notre Dame, Indiana, or Purdue
Rob Stapleton has big goals, that's no news
So he's investing now for his son
With TheJonasCollegeFund
Hoping one day all these school dreams come true


Up North, in Oregon's forested Beaver State
There resides a family of cent sorters of late
Henrysmedford is their name
Theodore shares Franklin's tv fame
For saving two hundred thousand coppers to date


The Roadrunner's a fleet-footed bird
At least that's what I've always heard
To outpace inflation
He invests in safe havens
Till they reach levels that today seem absurd


We've a member on the realcent forum named the saabman
Who, were he a baseball fan, could quote stats of Ty Cobb, and
His avatar "don't tread on me"
Promoted Colonial Liberty
And that snake? It's scarier than McQueen screaming "it's the Blob, man!"

Buy Silver. Buy Gold. Save Copper. Start Now.

Friday, January 20, 2012

A Good Parking Place

Single women have a joke they like to share about men. "They're like parking spaces," they laugh, "the good ones are all taken, and the ones that are left over are all handicapped." While I'm not here today to bash on men, perhaps the distaff side has a point worth considering. What is a good parking space within one's portfolio? I'd like to explore the thesis that you might consider forgetting cash. There are better ways to park your assets that will put you closer to your destination.

What might that destination be? Why, what else than increasing the worth of your portfolio? And how might you go about that? By successfully obeying and performing the mantra of buy low, sell high. But when you sell, where do you go? Do you leave it in cash, waiting for the next opportunity in equities that catches your eye as a value buy? I'd like to suggest an alternative, that might have the potential for steadier, incremental growth, rather than waiting for a chance at larger gains that may not appear.

One problem with selling in an upward-trending market is that the equities you dispose of, taking profits in cash, may continue their uptrend, robbing you of further potential gains. As well, anything that you might hope to invest those profits in could, as well, become commensurately more expensive. That said, there is sage wisdom in the saying trader's like to bandy about, "pigs get fat, but hogs get slaughtered." Another one is "no one ever went broke taking a profit."

So is there a happy medium? Should you be satisfied with "settling" for a fairly hefty percentage gain, and not hoping to capture every point of the move? One of the greatest trader's in history, Jesse Livermore, did exactly that. He didn't try to time every market bottom, or top, with exactitude, but stated "I'm happy if I can capture eighty percent of the move. If I miss the bottom or the top by ten percent, that's okay."

This tells me it's prudent to take some profits off the table occasionally, and indeed, those times when I got gluttonous for more gains, and started "counting the paper profits" were those same instances when the market reverted to means and stole those gains back. So, I have learned it's better to hit for multiple singles, repeatedly, rather than hope for a home run. Today I put that tactic in to practice, and let me describe the results.

In another column, Triple Dip, Double Run, I explained my rationale for attempting to optimize my portfolio's performance using leveraged ETF's. As my many columns suggest, I am a confirmed hard money, silver and gold, advocate, and I am convicted that we are presently witnessing what will become one of the biggest all-time bull markets in history. When the precious metals run is done, values will be at many multiples of their present levels. And this race is a marathon, barely begun. We have not yet reached midpoint, and the sprint to the finish will be something incredible to view.

Alright, let's get to the point. Last week, five trading days ago to be precise, I purchased more of the triple-leveraged Velocity Shares Silver ETF USLV. But I decided to try something different this time. In the past month or so, I had successfully liquidated shares of ProShares double-leveraged Silver ETF AGQ, to provide cash for further shares of USLV, each time that there appeared to be a manipulated sell-off in silver that resulted in a quick, dramatic plunge in price.

My thinking was that, in this upward-trending market, the price would quickly revert to it's prior levels, and that from it's purchase price, USLV would outperform AGQ. This theory, so far in practice, has proven valid. In the past, when I would sell AGQ to purchase USLV, and then subsequently sell USLV to repurchase AGQ, each time I would have more AGQ shares than I had started with. This would "reload the gun" so to speak, for further iterations of the strategy.

This time, rather than sell more AGQ, I decided to sell some of my mining equities instead. My thinking was that the miner's, as a rule, are not so volatile as silver bullion, sometimes lagging by days any sizable gains or losses, and that very stability might represent an unexamined potential for further gains. I decided to explore that option. Within two accounts, on January 13, 2012, I sold shares of First Majestic, Alexco Resources, Hecla Mining, Silvercorp, Mag Silver Corp, Silver Wheaton, Endeavor Silver Corp, Great Panther Silver Limited, and Global X Silver Miners ETF.

I was able to utilize those funds, as well as those obtained by selling a further small block of AGQ, to purchase 2946 shares of USLV at an average cost of $33.09. So how did that little experiment perform? These trades are performed within two self-directed 401K accounts, and require three days to settle, or else you can be in danger of committing a "good faith" violation by selling equities that have not yet settled. Those trades all cleared on January 19, 2012.

I honestly expected the markets to plunge today, the 20th, as it is the option's expiry date for silver and gold futures, and usually da boyz will come in with a heavy hand and kill any attempt at a rally. I watched perhaps thirty minutes of them attempting to cap any rally beyond a spot price of $31.00, before they finally threw in the towel. And then the spot price was off to the races. USLV quickly climbed past $39.50, triggering my sell order before I could rescind it. As I write this, the high print for the day so far has been $41.63.

So, in hindsight, I could have captured a larger gain, but I am disinclined to get slaughtered for being a hog. Had I reset my sell orders to $40.50 as was my intention, then the price might have reached $40.49 and then sank back well below $39.50. In my book, a $6.41 per share gain in one week is good enough. I took those gains and repurchased the mining equities I had sold a week earlier. I bought in the same proportion as I had sold. And what were the results?

When I started, I had 890 shares of AG, I ended up with 1077. I sold 123 shares of AGQ and repurchased 130. I had 1628 shares of EXK, and wound up with 1924. I started with 1188 shares of HL and ended with 1369. I began with 688 shares of MVG and finished with 866. Originally I held 643 shares of SLW, I now hold 752. I had 1601 shares of SVM, I now have 1857. I started with 866 shares of AXU, I now have 1039. Began GPL with 2014, now have 2254. And finally, SIL. Began with 338, now 386.

I gave away some topside potential by selling early, still a profit in excess of $18,000 isn't bad for one week. I now have considerably more shares of each of the miners than when I began, and I believe they hold greater potential to show further gains than I could have realized by sitting in cash and hoping for a pullback. In any event, I believe an investment in currently undervalued mining share equities affords a much better parking space than does cash. I'm now positioned to repeat the maneuver, given that, sooner or later, da boyz will provide another opportunity.

I believe that "churning" one's account, in this fashion, provides the potential, with close monitoring, to optimize one's profits, certainly to a greater extent than merely employing a buy and hold philosophy, or by taking a more active role and selling high, becoming sidelined in cash, then praying for a pullback to re-enter your positions. Once silver gathers a head of steam this time, there's no telling how far the train could surge up the tracks, leaving those parked in cash stranded at the station. If you've already got physical, Elmo, it's time to buy the miners. Forget cash, unless you prefer parking in a handicapped spot.

Buy Silver. Buy Gold. Save Copper. Start Now.

Wednesday, January 11, 2012

Triple Dip, Double Run

Did you ever see The Sting? This 1973 drama, starring Paul Newman, Robert Redford, and Robert Shaw is one of my all-time favorites. The script gives life to revenge-seeking con men who plot to redress a wrong by swindling a small fortune from a crooked bankster. The score, written by Marvin Hamlisch, helped popularize The Entertainer. The film won several Academy Awards, among them best picture, and it seemed as if nearly everyone was whistling Scott Joplin's classic 1902 piano ragtime tune.

In case you're not familiar with its plot elements, the two con men, Newman and Redford, devise a means to rig a poker game. After a series of hands, they entice Shaw to basically go "all in," as they say in the parlance, stealing a huge pot from him. I won't ruin the movie for you by revealing all the twists and turns, as it is well worth viewing this old classic if you've yet to have the pleasure. It was one of the movies, along with Butch Cassidy and the Sundance Kid, that helped bolster the young Robert Redford's incredible screen popularity at the time.

I'm opening with these movie memories to familiarize the unitiated to an idea. We're all attempting to win at a losing game. The game seems to be hosted by the players with the biggest bankrolls, who swiftly proceed to fleece the naive. When hands are dealt by the same players who hold all the cards, how can they lose? It doesn't take long to be driven out of the betting parlor when your stack of chips dwindles in size to the point where you can no longer be competitive.

When you attempt to play the silver futures market, the profits can be immense, but they're unlikely to be yours. As Ted Butler has long demonstrated, the COMEX appears to be rigged so that the fix favors bullion bank JPMorgan et al. Time after time silver, amount favorable public sentiment, gathers momentum and begins to run strongly in a seemingly unstoppable forward charge. Then the unthinkable happens and the advance is thwarted, often in dramatic fashion. Witness the carnage of the 30% waterfall plunge induced by four sequential CME margin hikes, after silver touched a nominal high in May, 2011.

So, if investing in silver futures appears to be a losing proposition, is there a bet you can place that has a higher likelihood of success? I think I've devised just such a wager. So far, implementing this strategy has resulted in three separate occasions duing which I've been able to scrape some of the winner's pot in my own direction. If the player's are going to cheat, you might as well look over their shoulder to glimpse their cards, helping you determine when to raise the stakes of your own bets.

How is it that I'm convinced that the silver, and gold, markets are fixed? I've long felt that there was market manipulation occuring in silver pricing, but lacked the definitive proof to corroborate that suspicion. It's not always easy to identify patterns utilizing only the three day spot pricing charts provided by Kitco. But thanks to an article published by Dimitri Speck, the link of which follows: I can elucidate the points I am about to present.

Study the following chart, which shows on a minute-to-minute basis, over an eleven-year period, the trading patterns that result in pricing changes of spot silver.

As you can see, there is a pattern that occurs on a repetitive basis. This observation is not to imply with certainty of accuracy that these movements will occur daily with the exact same magnitude, but that enough similarities have occurred repeatedly, in a consistent manner within these small windows of time, that it allows for a predictive capability. And that prediction is this; if the silver market is showing a strong rise from the open, at 10:00 am the New York trading desks will implement strategies that result in capping the price rise and suffocating the rally, frequently driving spot down dramatically.

This same pattern repeats, to a smaller degree, two hours later, which I won't delve into as Speck covers the phenomena in depth in his article. So how do we benefit from this advance knowledge? If one could wager with fair certainty that an event were about to occur, knowing that outcome in advance could prove profitable if one understood various means of implementing trades to capitalize on such movements. I'm certain that more advanced techniques exist, but here is a simple one which I've devised.

I have yet to develope the expertise to play options, so what I've done instead is to utilize leveraged ETF's. I use ProShares AGQ, which is structured to emulate double the performance of silver, and USLV, which is Velocity Shares entry into the field with triple exposure to silver pricing movements. There also exist double and triple inverse ETF's, but I get enough of an adrenalin rush by watching the horses race around the track, without feeling the need to jockey my own mount and reverse field at times, risking getting trampled in the process. I won't bet against silver by using inverse leverage.

What I will do is this. I call my strategy Triple Dip, Double Run, and no, that's not a flavor at Baskin Robbins. I am convicted that the long term trend of silver is upwards, given time that no one, if honest, can accurately predict the duration of, to levels many multiples of its present value. And so, I am confident that any drop in the price of silver will be temporary in nature, and presents an opportunity to further my gains. Were these not plays designed for paper profits within a self-directed 401k, in a physical sense they would be considered "buying the dip."

So what I do is this. At any given time, I am substantially invested in AGQ, poised to outperform silver on a two to one basis as the price climbs (runs). If, at one of the times that the charts illuminate as subject to manipulation, the price is forced down in dramatic fashion, then I liquidate shares of AGQ to purchase USLV. I do this as rapidly as possible, not hoping to further my gains by trying to outguess the direction of furthur pricing movements after my sale. If a significant movement has already occurred, that's sufficient for me.

So how does this work? If AGQ is trading at a certain value and the price plunges, then it's value drops as well, twice the distance of silver's loss. But USLV will drop three times the loss. So by acquiring USLV on troughs, I hope to regain the lost ground in faster fashion then merely remaining parked in AGQ the entire time. Yes, this strategy risks further downside losses if the market continues to bleed, that is why you use a tranche system of trading, only commiting a fraction of your capital at each trade.

When the market bottoms and starts once more to ascend, you can calculate how much USLV will need to regain in value in order to sell those shares and to repurchase your starting position of AGQ. But there would be no gain if you merely replaced the shares. What you do is wait until there is a strong upward movement, which can occur on short-covering days, and then sell your USLV to repurchase AGQ.

I have now done this three times, and each time has resulted in the acquisition of ten to twenty-five more shares of AGQ then the number with which I began. Since such movements, the drops and recoveries producing opportunities affording profitability, can occur within a period as short as three days or less, one can understand that simply repeating this process will lead to gradual accrual of many more shares of AGQ then one would have held through a long term buy and hold philosophy.

One could, if confident enough of silver's ultimate rise, just buy USLV and hold it for the long term, hoping to capitalize on the triple leverage in an upward-trending market. But for all that I feel assured of silver's destination, I know that the road will be long and uneven, filled with potholes. For that reason, I myself do not utilize USLV on a permanent basis to bet on optimism, I use it instead to bet against pessimism. Selling your USLV and repurchasing AGQ allows you the option of repeating the process, each time garnishing greater share count.

There is a danger to these tactics, and that is that silver will drop, and continue dropping, long enough that your triple exposure with inverse leverage could severely cripple the value of your accounts. As yet, this has not happened to me, although November 2011 was a rough ride requiring indomitable stoicism. I am offering this idea for consideration only, should you adopt it the risk is yours alone. It can be extremely harrowing betting on an ETF that will triple your losses in a down market. It is not for the faint of heart.

But I am confident that silver, if suppressed in price, can not remain so for long. The markets we are enduring are managed by the bullion banks to their advantage, but Eric Sprott for one feels there is just too much physical demand for silver for the banksters to do so in perpetuity. In time, physical depletion of silver will cause the pricing of silver to revert to basic supply and demand fundamentals, rather than the artificial prices resulting from the criminal banking cartel's artifice.

Playing at the table with the Big Boys can be fun if you've marked the cards. If JPMorgan and HSBC are going to cheat and continue to suppress pricing, with the apparent blessing of regulatory agencies such as the CFTC, then you might as well attempt to profit from their oft-times predictable raids. It could be years before they are booted as the dealers, so you might as well benefit from foreknowledge of their rules to play the silver game, but to your advantage.

The whole venture is akin to a rollercoaster ride, one that can thrill with its breath-taking course. Successfully employing Triple Dip, Double Run enables you to feel safely buckled in, secure that any market offers opportunities for profit. You'll enjoy the ride a lot more, knowing that the next plunge could well bring an "Oh Boy" grin to your face, rather than a "not again" grimace.

Buy Silver. Buy Gold. Save Copper. Start Now.