Guest Post from Ned Naylor Leyland: Walls of Worry and Roads to Damascus

Attention all SLA members – see chart below – This reversal in Silver is a near-perfect echo of the ‘wall of worry’ experienced by Silver longs in ’79 before the big move higher. In both cases Silver had risen around 1000% from its secular low before taking a well-deserved breather and shaking out the weak hands. In 1979, just like 2011, we also saw a brief reversal of the parabola leading to a 25% short-term drop in Silver before it went into ‘Saul on the road to Damascus’ mode a month or so later. The conditions for a genuine squeeze are far more apparent today than they ever were in 1979/80, so I see no reason to doubt either that we will see such a squeeze in due course or that we will see continued currency debasement an a global scramble to switch paper for physical metal.

79 comments on “Guest Post from Ned Naylor Leyland: Walls of Worry and Roads to Damascus
  1. swampy says:

    Like cool water to them that are dieing of thirst. Thanks for the perspective Max.

  2. Marc Authier says:

    Again. The fundementals are EVEN better today than in 1979.

    10 times more worldwide toilet paper, 100 times more debt, any ONLY 0,80% of assets in precious metals. In the 80′s people has 9 % of their assets in precious metals and US treasuries were giving a generous 22%. Today it’s 0%. No it’s minus 8% yield when include the real inflation rate.

    The best. Obama racked up in 2 years more US debt than in the precedent last 200 years !

    And another cool factor. Governments don’t have ONE ounce of silver. At the time US government had something like 4 billion ounces. So did China. Ain’t the case today.

  3. snoop diddy says:

    completely different geopolitically nowadays to then too.
    China wasn’t producing much of anything and Russia and Eastern Europe and were pretty much not producing anything that was exported to the west. So Reagan started Reaganomics with a captured western world market as the foundation stone for increasing the ponzi scheme. Now all there is as a base is corporate fraud and self delusions.

  4. Philippo says:

    I’ve been calling Guernsey Mint all morning in an attempt to buy the dip – their phone lines are permanently engaged.

  5. MirrorMirror says:

    The Institutional Gold Rush
    Friday, May 06, 2011 – by Peter Schiff

    …. The University of Texas, with its billion-dollar stash of physical gold, is one institution that has finally seen the cliff. The physical delivery of this purchase exemplifies the severity of the threat that UT’s endowment board perceives.

    The average investor should recognize that there is little time left to purchase precious metals before substantial new demand drives the price of gold higher. A very small percentage change in large institutional investment is all that’s required for massive gold price increases.

    http://www.thedailybell.com/2230/Peter-Schiff-The-Institutional-Gold-Rush.html

    .
    .
    .

    Silver’s Bubble Has Burst?
    Friday, May 06, 2011 – by Staff Report

    ….. From a macro-point of view silver and gold will continue to climb in purchasing power until the back of the business cycle is broken and fiat money is drained from the system in large amounts. The West, and the rest of the world are probably nowhere near that inflexion point – especially with central banks still keeping rates artificially low and the US Fed itself just coming off more bouts of money printing via quantitative easing….

    http://www.thedailybell.com/2231/Silvers-Bubble-Has-Burst.html

  6. Chervonets says:

    Only when the dollar drops for real and it is clear that there is no way out for the US and that the role as reserve currency is completely over, then it will move into its final parabolic rise. And then the international talks will start on the new standard with Chinese/Russians sitting around the table with big gold and silver reserves. When they can agree a new standard we know it is the end of the rise, when not the mess will continue. When they finally agree something we will know the new price of PM which will be fixed to stabilize the world fin system and I don’t see how they can fix prices under market prices as that is stealing/fraud.
    Before all that happens and unless you believe the US will recover, it is just a waiting game. Most of the public still doesn’t get that the US and probably also Europe is completely bankrupt and have passed the point of no return. When this despair knocks on the door, the big public will move in and then there is the final rise.
    Until that time it is all a bit of fluffing around and no real action, the camera man is still sitting and enjoying his coffee.

  7. ZORRO LONDON says:

    Altghough corruption has always been present even historically, the world was not:

    A) As systemically corrupt and near to breaking point
    B) Bankrupt several times over, with the cancer of derivatives swelling unabated.

    I would love to know how the Chinese see this playing out.

    Will be interesting also to see what links / alliances form between China & Russia.

    We are without a doubt in the collapse phase of the NWO

    To them numbers and dates in their satanic cabalistic beliefs are extemely important.

    This is a subject I am regrettably ignorant of, but must research as best as is possible.

    Out of collapse comes chaos.

    Final phase …..is “normalisation”. This is the objective that was there all along, no matter what the human cost or misery.

    Where the current FIAT system WILL inevitably crash into oblivion, the big question at the moment, and one that we can all speculate about on here is what will the replacement be?

    Clearly, and against historical precedent and context we know that these political and economic alchemists love and WANT their GOLD, and silver is the industrial strategic material that enables the 21st century modern world to function….so IS also is key!

    Against that knowledge, its a waiting game. Patience, not short term char watching.

    Yes now is the time to load up on silver.

    The final question to be asked is where this demonic “omlette” is being prepared…..is how many of US eggs, will be sacrificed and perish, as a result of this vermins master plan and scheme?

    It could well be BILLIONS, but they care not ….one …jot!………………….Z

  8. Tamir says:

    @Chervonets,

    Yes, I agree with you.

  9. TheSaint - Greece says:

    Guys I’m living in Greece and I’m looking for a way to buy silver and gold at reasonable prices. Can you suggest some trustworthy sites that make deliveries in Greece? Bank of Greece sells (rarely) and buys gold bullion coins but their prices and policies are ridiculous.
    Max and Stacy it would be great if you could post a mini guide on how to buy and sell precious metals online. They’re not always easy to come by in all countries.
    VATs, custom taxes etc. does anyone know how it goes in Europe?

  10. Bonn says:

    I think this Osama Episode has opened a Can of Worms fer the Obama Administration and i think its gonna Backfire
    http://www.sun-sentinel.com/news/nationworld/wpix-family-unhappy-about-obama-visit,0,4037272.story

  11. ellubo says:

    Max makes the market? Seems not…

  12. Mayo says:

    Guys & gals.. hedge your f.ing bets! PM’s are a great hedge against fiats but do you have a hedge against that hedge when poop starts pouring? Esp. when you’re in illiquid trade.. traders can exit out of their positions in few seconds and for your physical it could take quite some time to get out.. if you ever want to get out that is. Market is not a one way elevator… don’t be dumb.. hedge your “sure things” whatever they might be in life.

  13. microhousehold says:

    Just another dead cat bounce for the dollar.
    Let’s see what happens when the food/ energy shortages start to emerge again.
    Fukushima didn’t help.

  14. silverbuyer says:

    “TheSaint – Greece” – try https://www.coininvestdirect.com

    If you collect in their store in Germany – only pay 7% VAT.

    I’m in UK and we get hit with 20% VAT, so its worth taking a trip there for us, although from Greece it may not be feasible. However if you can arrange for a private courier yourself then still only pay 7% VAT per German law. EC reg specifies that country specific VAT should be levied only if the company that’s selling the goods are delivering the goods to the destination. Therefore if you arrange for it then German VAT only.

  15. MirrorMirror says:

    Goldman Comments On Oil, Sees It Going Back To Recent Highs On “Critically Tight Supply-Demand Fundamentals”

    http://www.zerohedge.com/article/goldman-comments-oil-sees-it-going-back-recent-highs-critically-tight-supply-demand-fundamen

    LOL
    Suddenly supply versus demand is taken seriously !
    Not for Silver though !

    Why believe anything at all !
    All MSM crapand manipulation.

  16. Mike/Liverpool says:

    Mirror
    Thought you like this:-
    http://jonathandaviswm.com/jonathan-davis-media/359/

  17. MirrorMirror says:

    ROTFLMAO….

    Terrorist ( / M.I.C.) Wish List! Plans To Strike U.S. Cities & Trains 10 Years After 9/11!

    http://www.youtube.com/watch?v=w0D3WGOfFvI

    LOL .. have they buried the hard-disk in the ocean as well?

  18. Harry says:

    Interesting theory.
    I do hope we’re at the bottom for now and the next weeks etc will be up.
    Bought some more.
    Getting closer to 500.
    That number might not work perfectly in euro-land when we get to sell the stuff but it is a nice number anyways.

  19. Marc Authier says:

    It always make me laught when I hear the financial presstitutes talking about a precious metals bubble. A bubble compared with what ? 0% interest US treasury bonds ?

  20. MirrorMirror says:

    @Mike/Liverpool …. GOOD AUDIO , thanks !

    http://jonathandaviswm.com/jonathan-davis-media/359/

    The lady reporter was given a quick lesson in (scary) economics .

    Who was the Scotsman talking ?
    LOL … more of this please !

  21. MirrorMirror says:

    @Mike/Liverpool … Jonathan Davis .. of course .

  22. Peter says:

    Forgive my ignorance, having never bought anything on margin in my life, I am a little bit mystified. However, does the raising of margin requirements apply to both long and short positions in silver?

  23. TheSaint - Greece says:

    @silverbuyer Thanks for the reply, I’ll look into it :)

  24. Angelo says:

    TheSaint in Greece, Hi, I have used these guys https://www.coininvestdirect.com/
    they are based in Germany and they do deliver to Greece.

    I must say that here in the UK we are hit with 20% VAT and I am trying to find other, legal options to avoid this. I am Greek and travel to Cyprus often I’ll see if I can get it cheeper there.

    20% is a large figure similar to the this crash!

    does anyone know if one can just take a boat to Guernsey and back to the mainland with a bag of tax free?

    What are the rules for traveling with bullion?

  25. Hi Max!

    Still here, yeah the price of silver went down. I haven’t lost a single ounce or WWII Silver Nickel!!! Feel bad for all those paper silver traders that lost their digital money and virtual silver!

    I just got paid and am fixin’ to get me some silver!

    It’s like Ted Butler said “EXPECT PRICE VIOLENCE”!!!
    http://www.youtube.com/watch?v=NhBC1v5WJpo

  26. Philippo says:

    Just to play devil’s advocate . . . if you shift a couple of months along the timeline and overlay this last weeks crash one could argue there’s an even better fit. A peak of 50 followed by a huge collapse. If this is the case, then we’re headed a long way down from here . . .

  27. MirrorMirror says:

    @Peter

    AFAIK …. the CFTC decided to “control” margins more tightly for all traders EXCEPT the bullion banks , claiming that the BBs have a “legitimate interest” in the physical market, whereas all others are possibly just speculators .. or words to that effect.

    The margin changes are for credit , whether long or short positions AFAIK.
    Of course, the Commercial Shorts have VAST fiat-paper-money resources that put them at a great advantage versus all other traders !

  28. Angelo says:

    Oops, you beat me to it SilverBuyer. And thanks for the advice. Do you happen to know a good courier for the job?

  29. October says:

    it will be ~$55 by October/2011

  30. Youri Carma says:

    If you looke at the fundamentalz you wonder why they bother to push Silver & Gold down in the first place, it’s pathetic.

    - Is it hutz·pah?
    - Are they delusional?
    - They just push it down so some elitist can buy on the cheap?

    They can’t win. They can’t beat us. That’s why we here and they are there. Because we are winnars. We’ll always be winners and they ….

    ………… always be losers…..

  31. ZORRO LONDON says:

    New names appearing on here, is encouraging as the SLA continues to grow.

    @ Mirror Mirror.

    is it not possible that to all intents and purposes Bin Laden was effectively and unofficially under Pakistani house arrest?

    That way they would not inflame either side.

    The US needed a political propaganda coup, and acted unilaterally, whilst doubling up as a smoke screen to defend the crumbling $$$.

    And we all know how that piece of SIMULTANEOUS political and economic theatre has played out so far.

    If the markets can hit PMs & Oil downwards in such a dramatic way over such an insignificant event as taking out a defunct figure head, IMAGINE conversely what will happen, if there is a very serious terrorist event which shows that Bin Ladens death was NOT AT ALL theraputic but inflamatory…….Z

  32. Lafayette nous voila says:

    Not too long ago somebody, from England, I think, recommended Suisse Gold as a good dealer. Has anybody dealt with them? Any bad experience to report?
    Thanks

  33. HUH? says:

    Fox News generates post-debate buzz around Fed-Insider Herman Cain, obscures Ron Paul (anyone surprised?)

    http://www.infowars.com/post-debate-gop-buzz-surrounds-herman-cain-former-federal-reserve-insider/

  34. TheSaint - Greece says:

    Ευχαριστω Angelo.
    You guys should watch this documentary.
    DEBTOCRACY
    http://www.debtocracy.gr/indexen.html
    “For the first time in Greece a documentary produced by the audience. “Debtocracy” seeks the causes of the debt crisis and proposes solutions, hidden by the government and the dominant media. The documentary will be distributed free by the end of March without usage rights and broadcasted and subtitled in at least three languages.

  35. TJ says:

    @The Saint Greece

    If you’re in Athens, check around the stock exchange for traders, scalpers if you like. At least they know the name of the game and seemed happy to guide me when I bought 200 ounces of silver there.

  36. Harry says:

    Silver is getting killed again.
    2 dollars off.
    Pfff…………..

  37. TJ says:

    @ Harry

    The Flak is most intense when you’re over the target ;-)

    Buy the dip!!!!

  38. ZORRO LONDON says:

    Max at his best!

    http://www.youtube.com/watch?v=ZoQrYa_NKQQ

    We need 50 Maxs!

    Z

  39. flicks says:

    Cant get AJ’s youtube channel what are you guys getting ?

    http://www.youtube.com/user/TheAlexJonesChannel#p/a/u/0/lyZ7W9aSgKs

  40. Marc Authier says:

    @Peter
    It applies to both. But you will notice that these bastards from the CME and Comex, hike the margins when people are mostly betting for higher prices. Never when you are betting for lower prices. These people are criminals. It’s blatant attempt to hammer the price.

  41. Paddy says:

    when it hits the 200 day MA on Euro/Silver i’m all in. Beginning to sound like a speculator but i suppose theres nothing wrong with that if it helps bring down JPM and their mates

  42. Bill says:

    Mirror:
    Why believe anything at all?
    Good question. At least about what comes out of the MSM.

  43. Mini US says:

    Jim Rogers take on correction of Silver and oil.

    http://www.youtube.com/watch?v=4IdY_zRs404

  44. Bill says:

    Has there been any evidence that this is not just JPM pumping and dumping to get out of their SLV positions?

  45. Bill says:

    MAYBE when they enough people out of SLV they will actually start backing SLV shares with real silver.

  46. MirrorMirror says:

    I must admit Tyler Turden is one of the most humorous Bloggers out there :

    JPMorgan Is in ‘Advanced’ Negotiations to Resolve CDO Probe (Bloomberg)

    http://www.zerohedge.com/article/frontrunning-may-6-0

    LOL … “Advanced” … a bit like HFT … run like hell and get there before the others do !

  47. Bill says:

    Paddy (or anyone) what is the 200 day moving average?

  48. MirrorMirror says:

    DAMN FUNNY …. G14 Classified

    http://www.youtube.com/watch?v=dOJKDoH4aTo

    2 mins of fun .
    ;-)

  49. Marc Authier says:

    http://www.zerohedge.com/article/eric-sprott-there-no-more-silver-left

    For the nervous nellies. About physical silver. Not about the cancerous CME Comex form. ‘There no more silver left.’ Eric Sprott. It’s good to remind us why you have to buy ONLY physical silver and NEVER paper silver.

  50. MirrorMirror says:

    Ahmadinejad allies charged with sorcery

    Close allies of Iran’s president, Mahmoud Ahmadinejad, have been accused of using supernatural powers to further his policies amid an increasingly bitter power struggle between him and the country’s supreme leader, Ayatollah Ali Khamenei.

    http://www.guardian.co.uk/world/2011/may/05/ahmadinejad-allies-charged-with-sorcery?CMP=twt_gu

    LOL … it just gets funnier.

  51. California Doctor says:

    General Keiser -
    I am readying my forces to begin action as part of the SLA.
    These forces will empty our region of silver inventory in most of the coin shops in this region. We are assessing inventory now and supply of silver bullion is extremely tight. There are no silver rounds available. A major wholesaler claims to have monster boxes to ship, but multiple attempts to reach him fail to obtain inventory.

    It appears that the $34 range is holding today. It is my view that JPMC needs to cover shorts at $28. They are likely to be attempting to cover those puts and shorts on Silver through the sheeple sticking their FRN’s into SLV shares.

  52. Bill says:

    Well on 9/11 we are asked to not believe in the laws of physics or that a building fell for no reason at freefall speed into its own footprint so what is the difference between this and sorcery.

  53. Harry says:

    @TJ: another 60 rounds ordered and paid in euros…

  54. MirrorMirror says:

    @Bill … “what is the difference between this and sorcery.”

    The Difference ?
    At least “their” Supreme Leader was honest !

    ;-)

  55. LexLuthor says:

    I really hope that the justice will prevail at the end. At least this time with our cause, because I am SICK of all those motherfcuking criminals tayloring our destinies and robbing us blind at each step. My fcuking luck wanted I live in the coutry with the highest tax rate on the planet!!!!

  56. Sam The Bull says:

    Most people dont understand Geo-politics and the Iluminist crack pot behind the curtain .They needed to pull all the stops to stop the silver train and commodites complex going super-nova ……. They needed to pull a mini dollar rally and a mini deflation collapse so they can 1- get Obama re-elected ( how else can you re-elect a man if the dollar is collapsing and silver is at 100 a ounce and gold at 2000 ….2- have a excuse for QE3 and 3- Let there crack pot buddies get as much phyz silver and gold as possible before the hyper-Inflation event that will kill the dollar …… So expect a huge crash soon so they ( Obama and economic advisor ) can come up as the saviors once again and wait till you see the next round of QE3 and stimulus package its giving Paul Krugman a Massive hard-On …. SO expect choppy action till DEC best advise is BUY BUY BUYYYYYYYY and know your Enemy

  57. MirrorMirror says:

    BTW .. don’t like the way Gold and Silver are shooting UP before markets open.

    Normally ( IMO ) it means that Shorts at loading up …. buy to cover and shorting from the higher point for the day’s action.

    GLTA

  58. John Galt says:

    @ MirrorMirror

    Agreed….it could be another headfake. On silver I could see it getting crushed lower still…..into the 20s (?).

  59. Mini US says:

    Bill
    I think the Morgue just need a trigger.
    CME raising Margin requirement three times>Hedge funds sell>Morgue jumps on with shorts>Band Wagon arrives>Collapse happens>Leverage lessened in market>reasonable trading resumes.

    No expert, but I think thats how it goes.

  60. MirrorMirror says:

    @John Galt

    Record volume in SLV yesterday : 294 Million x 36$ – 33$ !!
    ca. 10 Bio$ in one day.

    http://finance.yahoo.com/q/hp?s=SLV+Historical+Prices

    Pity they don’t show the “Short Interest” , as they do for Stocks.

  61. Mini US says:

    I have been asking how much of this market is leveraged for about a year.
    Now I have my answer :)

  62. John Galt says:

    That’s the thing with buying physical….it protects you from getting fleeced by the headfake BS. Don’t use your rent money or grocery money to buy the physical…use your savings that you don’t plan on needing for years to come, and just bury it somewhere.

    Around here (in Canada) there are old homes being renovated, and every so often stories come out about finding cans of food and small wads of paper money sealed up inside the walls. Not just hidden in a nook….but sealed up behind lath and plaster. Some people laugh at how “crazy” people must have been in the 1930s.

    My reply is always this: Just consider how bad times must have been for people to go to those measures. Paper money THEN was real, because it was backed by real gold.

    Today: no more.

  63. Mini US says:

    John Galt

    Agreed.
    If people think they can make a quick buck in any market they will see results like this.
    Listen to people like Jim Rogers who talk in 5 and 10 year investment strategies.
    Jim, and any other seasoned investors want to see this reaction, it means the market is back to normal trading, not bubble trouble.

    I’d love to be a fly on the wall at the IMF/SNB International Monetary System Conference on the 10th May.

    http://www.imf.org/external/np/sec/pr/2011/pr11156.htm

    Can anyone get me an invite? :)

  64. MirrorMirror says:

    @Mini …”Can anyone get me an invite?”

    Yes, but you have to ware a shirt and tie, and you are not allowed to mentioned the name Max Keiser !
    ;-)

  65. Mini US says:

    Attention SLA members, learn about the markets until they don’t work anymore.
    Until then, this is how it is.

  66. Mini US says:

    @Mirror Mirror

    I could manage that.
    I’d be on my best behaviour….
    until I had to shout KEISERMEISTER at the top of my voice, then they would have to eject me ;)

  67. John Galt says:

    @ Mini US

    An invite would be fun, but likely none of use would ever get into the REAL meetings taking place.

    At the G20 in Toronto last year it was said there were 2 levels of security. The outer one (mostly dealing with public) were manned by police and RCMP. The “inner one” was the likes of CSIS, Secret Service etc. protecting heads of state etc.
    What few people realize is that there were actually 3 layers of security….the innermost one was comprised of Blackwater types who were given carte blanche clearance. It should make one question who the serious power brokers were, because Obama was only second tier.

  68. Mini US says:

    AUD and precious metals still (kind of) in sync for now.

    One day they won’t be.
    Could be Federal Budget night next Tuesday :)

  69. John Galt says:

    I was talking with my son this morning, trying to explain the wild gyrations of the markets recently. With respect to silver it’s seeming more and more like the banksters are VIOLENTLY shaking things up to flush out what they can – perhaps to bring supply to market.

    The analogy I used was akin to shaking a piggy bank to get out the last of the coins.

    If we accept that the physical supply is now bone dry, would it not make sense for them to massively spike the price higher…..maybe to $100 or so, to pry the silver from profit takers before crashing the price again?

    Also, once prices are in record high territory for a time, it will make headline news….and droves of people will look to cash in by selling jewelry, silver teapots etc. This last run to almost $50 was too quick and too brief to have much effect…..if the banksters are sincere about shaking out more physical to cover their paper they’ll have to pay MUCH higher premiums. Clearly the old tricks no longer work.

  70. Peter says:

    @Marc Authier
    @MirrorMirror

    Thanks. I guessed it would be rigged in some way, I just wasn’t sure how!!

  71. Paddy says:

    @Bill

    MA’s just the average value of a security, so 200 day would plot the previous 200 days of average trading day range. the silver price has bounced off this trend line frequently in the last couple years.

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