Author Archives: Keith Weiner


A Frenzied Spike and a Shortage of Coins

For a few frenzied minutes, while everyone was sleeping, the price of silver spiked 56 cents. Well, at least the West Coast of America was sleeping. It began at 8:30 in New York, where presumably most traders were not sleeping. And of course, it was afternoon here in London (where Monetary Metals just held a seminar). The catalyst was a news release: the non-farm payroll numbers.

$0.56, or 3.8%, is a big move for a whole day. It happened in 15 minutes (and most of the move occurred during 3 distinct minutes).

In addition to the big price move, there is one other fact silver analysts are pondering. There is a real shortage of silver coins.




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Borrowing to Consume

As I have discussed previously, if you borrow cash then it’s not income. This is why no one in his right mind borrows to buy consumer goods. Those who try cannot sustain it for long. What if someone else borrows? Suppose someone else—let’s call her Jordyn—buys your house from you, at a higher price than you originally paid for it. You can spend some of the gain.


zuckerwattePhoto credit: Robert Clark


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A Trend Change may be in the Works

The price of gold moved up moderately, and the price of silver moved down a few cents last week. However, there were some interesting fireworks in the middle of the week. Tuesday, the prices dropped and Thursday the prices of the metals popped $23 and $0.34 respectively.

Everyone can judge the sentiment prevailing in gold and silver articles for themselves, but we think there is a growing feeling of optimism (that is a renewed fall in the dollar, which most think is a rise in gold). This goes along with a sense that the long bull run in the stock market is rolling over.


gravity-2Gravity… ever since Einstein invented it, stocks occasionally go down


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An Absurd Idea

Take the notion of the efficient market. What does that mean? Today, hordes of people are coming out of economics and finance majors believing an absurdity. Yes, I said absurdity. They think that, if the market is efficient, it’s impossible to beat the average investor. This is based on the premise that stock prices (or commodity prices, bond prices, etc.) always incorporate all relevant information.




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Changes in the Market Structure after Large Moves

The prices of the metals moved up a bunch this week, with gold + $32 and silver +$0.55. We have seen some discussion of gold backwardation in the context of scarcity, and hence setting expectations of higher prices. That’s good, as the swings from contango to backwardation and back are the only way to understand changing supply and demand in the market.

You should be cautious about trading yesterday’s news. There was indeed backwardation in gold and silver. However, the cobasis is a sensitive indicator. It predicts the likely path of the price, but you should get an updated picture before buying based on an old reading after a sizeable price move.

In this Report, we’ll look at both metals bases, as well as their cobasis term structures. So read on …


Wad-Bushara-GadarifPhoto credit: Mohamed Nureldin Abdullah / Reuters


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Horse Racing and the Monetary Metals

Consider the sport of betting on the sport of horse racing. It’s actually similar to the analysis of the gold and silver markets. How’s that?

First, there is the manic-depressive crowd. Sometimes (as we are told—we don’t hang out at race tracks) the bettors sometimes get overly excited about a horse with slim chances to win, or get totally unexcited about a strong horse. The track responds by lowering or raising the payout for winning, respectively. The more betting on a horse, the lower the payout.


horse-racing-las-vegasHorse race in Las Vegas

Photo via


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A Quiet Week

This was a fairly quiet week in the market for the metals, with a min-rally on Thursday especially in silver which hit almost $15. By the end of the week, the price of gold was down $13 and the price of silver was up 3 cents. The action was elsewhere (e.g. equities and currencies).

We don’t think that the price action necessarily tells us anything by itself. That’s why we look at it in the light of the basis action—the spread between spot and futures. What happened to the fundamentals of the metals this week? Read on…




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THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

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