Tuesday, March 8, 2011

Charlie Sheen's Plan to Squeeze Silver Shorts

There's been a lot of speculation that there are  major players caught in a short squeeze in silver. Here are a few things to consider before attempting to participate in such a squeeze:

A. It is not entirely clear there is such a squeeze

B. If it is indeed major players who are caught in a short position, they will crush anyone that attempts to squeeze them. They will change rules and do whatever it takes to break such a squeeze.

C. You will not win

Those doing the supposed squeezing are quite a mixed group, as one EPJ Daily Alert subscriber wrote to me:
 A few blogs...have been awash in rumors that major players are hopelessly short in the paper market for silver. I think I'd be over stating the case only a bit if I said the rumors have gone viral. I take these rumors with a giant grain of salt but there's a whole subculture of blogs now carrying this information with hundreds if not thousands of commenters claiming they're dumping their 401(k)s, IRAs, savings accounts, insurance policies, credit cards, etc. into physical silver.  I can't help but think the silver market is running face first into a mania that will all end in tears. In addition, producers are claiming marginal prices of around $5/oz. At today's spot prices, that's probably a $20-$25/oz spread. I can't see that lasting as even the most marginal producer can probably turn a profit on those spreads. Other bloggers are also reporting boiler room type setups attempting to cram silver and silver stocks down the throat of any widow willing to listen.
And, now, we have the ultimate silver warrior, Charlie Sheen.  Sheen is egging the CFTC on to squeeze the silver shorts. According to FT, Sheen has taken time from his marathon interviews, and quality time with his goddesses, to write the CFTC with his very own magic fingertips to call for a reduction in contract limits for any one troll silver holder from 5,000 contracts to 1,500 contracts.

The battles of a great warrior never cease.

I repeat, to anyone thinking of squeezing the silver shorts, leave this battle to Charlie. Only a man with his magical power will win this battle.


  1. Since Charlie Sheen is a buddy of Alex Jones', maybe this shouldn't be so surprising. What is more surprising is that Mr. Sheen hasn't dropped dead out of exhaustion yet.

    He looks like an energizer bunny these days.

  2. JPM against the juggernaut of Sheen'z Torpedoes of Truth? An epic battle, which Homer will chronicle, once Sheen carries him from Hades on his silver-tipped and diamond-encrusted Nike shoes. Beware the pomegranate.

  3. Wenzel, I wouldn't crack too hard on the Silver story before doing some research of your own. Start with Ted Butler.

    Not for nothing, but you revere Abby "Silver is about to crash" Doolittle.

    That was like 5 dollars ago.

    Got Silver?

  4. robert wenzel is a douche who doesn't know the facts.

  5. Pete,

    Wenzel's reasoning for why silver MIGHT come tumbling down is entirely different from Doolittle's. Doolittle's is based on techinical patterns, Wenzel's is based on the tried and true fact that if something will harm the elite and help the small unconnected person, the elite will simply change the rules and crush the little guy.

    I don't know that this will happen, there's obviously a dire supply problem in the physical silver market (see the US mint suspending production of silver eagles due to an inability to get the silver blanks). But there was a supply problem, of sorts, when the Hunts cornered the market (i.e. they weren't selling) and we all saw how that turned out.

    disclosure - own a great amount of physical silver and 2 miners that mine silver

  6. I don't know if the rumors of a 3 billion oz. JPM silver short are true. I don't know if there's still gold in Ft. Knox and the NY Fed. I do know the government is printing money like it's going out of style. I'll take rock over paper in this case.

  7. This time the little people win.
    Let them try to confiscate or over tax PMs, see what happens.
    They're walking a fine line, if they cross it, we're all Egyptians.
    Fertile ground? Yep.
    Believe it.

  8. "They will change rules and do whatever it takes to break such a squeeze."

    Like what for instance?

  9. I have no doubt that the big banks will use every dirty trick they can think up to fight the short squeeze. However, Pete was right to recommend Ted Butler. Ted's research in the COT and Bank Participation Reports is fairly in depth, and more than anything else I think his reporting is responsible for the short squeeze going viral. http://news.silverseek.com/SilverSeek/1299509764.php