Silvergate Short Squeeze?

February 15, 2023, 12:42 am email to business partners:

Silvergate is the most shorted stock right now

Gregory Nguyen <nguyen.greg@gmail.com>	12:42 AM (0 minutes ago)
to Keri, Edwin

Short squeeze coming.  $14.50 low yesterday, closed at $17.36.

Reddit Preparing To Unleash "World's Biggest Short Squeeze" In Silver

I've been blogging about silver (and gold) price suppression by the bullion banks for 13 years.  The Reddit traders are embarking on a short squeeze of silver.

https://www.zerohedge.com/markets/reddit-preparing-unleash-worlds-biggest-short-squeeze-silver

James Turk – A Massive Short Squeeze Is About To Send Gold Skyrocketing

I learned a new acronym today:  EFP, Exchange of Futures for Physicals.  This is why gold and silver shorts are scrambling for inventory.

http://kingworldnews.com/james-turk-massive-short-squeeze-send-gold-skyrocketing/

James Turk - Monster Gold & Silver Short Squeeze Developing

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/30_James_Turk_-_Monster_Gold_%26_Silver_Short_Squeeze_Developing.html

This Triggered The Short Squeeze That Is Crushing Gold Bears

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/8/27_This_Triggered_The_Short_Squeeze_That_Is_Crushing_Gold_Bears.html

What Investors Should Know And Do To Make Sure The Short Interest In Arena's Stock Is Playing By The Rules.

http://beta.fool.com/mrjosephd/2012/11/26/what-investors-should-know-and-do-make-sure-short-/17306/

We Are In The Early Stages Of A Massive Short Squeeze In Gold

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/11_We_Are_In_The_Early_Stages_Of_A_Massive_Short_Squeeze_In_Gold.html

Huge Rally Fuel in Place for Gold Futures

Long story not so short:  the big commercials, normally permanently short COMEX gold, have reduced their net short positions to below record levels.

The momentum-trading hedge funds, have reduced their normally net long positions below record levels.  But that's not due to them reducing their aggregate long positions--it's from hedgies piling on aggregate short positions.

Since the big commercials (gold mining producers, refineries, jewelers, bullion banks) represent the biggest money as well as usually being the most informed, we can deduce the current slide in gold prices is close to being exhausted.  Meanwhile, the "hot" money hedge funds are betting on further declines.

Should a reversal occur, this sets up as a possible short squeeze scenario, where longs and short-covering sellers will bid up prices in a "buy first, ask questions later" competition.

When an asset is hated by the consensus, it's a contrarian indicator that a bottom reversal is imminent--much like when an asset is universally loved, the bursting of the bubble looms.  Anybody remember the 1999 internet bubble or the subprime real estate bubble in 2006--when everybody and their brothers were pounding the table on NASDAQ stocks and flipping properties, respectively?  How did that turn out?  That's because the wrong people were giving the wrong advice at exactly the wrong time.  The consensus was that you couldn't lose following what everybody else was already doing.  Oops...

With gold and silver, it's hated by 99% of the population right now, pundits and laymen alike.  To a contrarian, it's a dream set up for a huge short-covering rally.  It's a lonely trade, but it's the right one--because it is lonely.

http://www.gotgoldreport.com/2013/05/huge-rally-fuel-in-place-for-gold-futures.html

Kaye - Expect A Massive Silver Short Squeeze

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/30_Kaye_-_Expect_A_Massive_Silver_Short_Squeeze.html

Coming Short Squeeze In Gold To Shock The World

This is a must-read interview of a money manager in Hong Kong.  He's an ex-Goldmanite, a former status quo guy who is obviously blowing the whistle on re-hypothecation in the physical gold markets.  Unlike London or New York, Hong Kong is mostly a physical gold market, not a paper exchange.  Hong Kong is the pathway for physical gold to enter mainland China, who is already the world's largest producer of gold.  Between their prodigious extraction and their voracious imports of gold, China has surpassed India as the world's largest consumer of physical gold.

It doesn't take much speculation to connect the dots and understand China is in a race to back the renminbi with gold as China seeks reserve currency status.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/29_Exclusive__Coming_Short_Squeeze_In_Gold_To_Shock_The_World.html

Schiff - When Silver Breaks $50 Shorts to Propel it to $75-$100

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/22_Schiff_-_When_Silver_Breaks_%2450_Shorts_to_Propel_it_to_%2475-%24100.html

Perfect Storm Sees Gold & Silver Surge – Chavez Gold Action Leads To Backwardation, Short Squeeze And ‘Havoc’ Concerns

Long-time readers of this blog know the concepts of backwardation, contango, a short squeeze, physical delivery vs. cash settlement, paper futures contracts vs. physical bullion, and the ramifications of a default at the COMEX (and at the LBMA).  For those late to the game, listen up.

And don't listen to the foolish Dennis Gartman, despite his huge following from CNBC.  He's been trying to trade in and out of this decade-long gold bull market for the last few years, frequently calling a wrong-headed "top".  His followers would have made more money if they just bought gold and sat on their holdings.

http://www.zerohedge.com/news/perfect-storm-sees-gold-silver-surge-%E2%80%93-chavez-gold-action-leads-backwardation-short-squeeze-and

Ben Davies - Look For Another Short Squeeze in Silver

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/2_Ben_Davies_-_Look_For_Another_Short_Squeeze_in_Silver.html

SHORT COVERING, NOT SPECULATIVE BUYING, LED TO SILVER’S PARABOLIC RISE

With many speculative longs liquidated out of their positions, look for silver to build a base here, and consolidate within a trading range, before building up energy for another rally by late summer.  Seasonally, with Diwali in September, Ramadan, and the Holiday seasons peaking in Q4, look for mid-summer doldrums in the precious metals complex. 

http://pragcap.com/short-covering-not-speculative-buying-led-to-silvers-parabolic-rise

See disclaimers in the side bar.

Disclosure:  long precious metals equities.

Silver Surges Over $46.25/oz as Rumours of a Short Squeeze and Cornering Market Gain Credence; Speculators Smell Blood

http://news.goldseek.com/GoldSeek/1303392419.php

Gold and silver have surged to new record nominal highs in dollar terms (all time and 31 year) with the dollar falling sharply on international markets. Silver has continued to surge in all currencies and has surged to a new record nominal high of $46.25/oz (£27.85/oz and €31.54/oz) on growing rumours of a short squeeze involving a billionaire or state interest attempting to corner the silver market.

Traders and technically minded investors are firmly focused on silver’s record nominal high of $50.35/oz. Some with a longer term fundamental focus continue to see silver in triple digits if it is to match the real record highs of $130/oz seen in 1980. The inflation adjusted silver chart puts the present sharp rise in the all important historical context.

The massive concentrated short positions of some Wall Street banks have incurred serious losses and a desperate attempt to close their futures positions due to the tight physical marketplace may be leading to a short squeeze. This is something that GoldCore and a few other analysts have warned of for some time.

We have long said that the very small silver market was ripe for cornering by private or state interests and that appears to be happening on some level. However, there are an increasingly large number of silver buyers who realize the market can be cornered and they are buying in anticipation of this event.

The blogosphere has again been ahead of the curve and dismissal of much circumstantial evidence of silver manipulation, a short squeeze etc. as “conspiracy theories” is becoming less easy to do. It looks like many investors internationally and one or a few private individuals and states are cornering the silver market.

I'll take the comment about being part of the "blogosphere" as a compliment.

Anatomy of a short squeeze

A short squeeze is one of the reasons my long-term price targets for gold is $6300 and for silver is $400.  The calculations were based on trough-to-peak valuations of other asset bubbles, including the 1970's bull market in precious metals, housing stocks, and internet equities.  Other variables include money supply metrics (M1, M2, M3) relative to above-ground gold reserves.  For silver, the gold/silver ratio falling to normal ranges was the overarching factor.

Of course, if the USDollar collapses, all bets are off, and these seemingly outlandish mental price targets will be proven conservative. 

http://www.goldmoney.com/gold-research/anatomy-of-a-short-squeeze.html

Silver offers the closer parallel with the London Bridge example. There are a few banks with large short positions in silver on the US futures market in quantities that simply cannot be covered by physical stock. The outstanding obligations are far larger than the stock available. The lesson from the London Bridge example is that prices in a bear squeeze can go far higher than anyone reasonably thinks possible. The short position in gold is less visible, being mainly in the unallocated accounts of the bullion banks operating in the LBMA market. But it is there nonetheless, and the bullion banks’ obligations to their bullion-unallocated account holders are far greater than the bullion they actually hold.

But there is one vital difference between my example from the property market of 1974 and gold and silver today. The bear who got caught short of London Bridge Securities was right in principal, because LBS went bust shortly afterwards; but in the case of gold and silver, the acceleration of monetary inflation is underwriting rising prices for both metals, making the position of the bears increasingly exposed as time marches on.

Perhaps the most important lesson we can learn from the LBS situation – and highly applicable to the situation today in precious metals, which could be developing into the largest short squeeze in history – is that very few other people in the investment community actually understand what is happening. This is something to bear in mind when taking investment advice.

See disclaimers in the side bar.  Any price targets are of the opinion of the author only, and should not be used as investment guidelines.

Disclosure:  long precious metals mining shares.

Embry - Short Squeeze in Silver, Manipulators Getting Overrun

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/22_Embry_-_Short_Squeeze_in_Silver%2C_Manipulators_Getting_Overrun.html

“There is a tremendous bid in the gold and silver markets at a time when the market is tight in these metals and there is a concentrated short position in both gold and silver.  The Middle-East crisis has come out of left field and this is creating additional bidding in the precious metals markets.  To be bearish gold and silver is to be bullish paper currencies and in view of QE and sovereign risks, that is a terrible bet.”

When asked about silver Embry remarked, “Eric Sprott and I have always contended that in silver if you get some serious physical buying in the absence of above ground inventories that are available for sale, that the paper manipulators would basically get overrun.  Right now we are in the process seeing that unfolding.

I definitely think a short squeeze is underway in silver.  The evidence will be if the price of silver moves sharply higher from here.  I think you will know if you have a real short squeeze if this thing starts piling on gains in the next week.

The price of silver has been held back for so long and this is not something that can be cured with existing mine production because mine production has been sticky.  People are coming after silver as a monetary asset because it’s so much cheaper than gold and this is creating an explosive situation.”

Short Squeeeeeeze in silver

Click on image to enlarge.

This is what the shorts look like when they are being squeezed.

JPMorgan, HSBC Sued For Silver Market Manipulation

Finally. No one will ever accuse me of being a conspiracy theorist anymore. Whether JPMorgan and HSBC will be found guilty or not is immaterial. They will surely settle without admitting guilt, and pay a hefty fine to make it go away. But the blatant price suppression of silver (and gold) will finally end if justice is served.

http://www.zerohedge.com/article/jpm-hsbc-sued-conspiracy-keep-silver-price-low-reaping-billions-illegal-profits

The horse is out of the barn, and expect precious metals prices to rise again as shorts are forced to cover. And if longs insist on physical delivery, a short squeeze will trample shorts dumb enough to not cover.

Silver, bitchez!

See disclaimers in the side bar.

Disclosure: long precious metals mining shares.

1999 gold short squeeze

We looked into the abyss if the gold price rose further . A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K.

- Edward A. J. George, Governor of the Bank of England and a director of the Bank of International Settlements, 1999

The price of gold was $253 at the time. It is now $1160/oz. today. Yet the strain on physical inventory is more acute than ever, as resources are depleted.

Disclosure: long physical gold and silver, and long mining shares.