Decoding Silver DISinformation

REUTERS, ahem..cough-cough,  wants to make sure that everyone knows…

(Reuters) – The United States Mint said on Wednesday it has enough American Eagle gold and silver bullion coins to meet demand and does not expect to allocate them in early 2012.

via U.S. Mint says has enough gold, silver Eagles coins | Reuters

The latest agnotology spin is that silverbugs can blame the silver bloodletting on inflation in China. Right.

Metalheads (I will hereby steal that term from Thomas Frank) will be displeased if they see signs either that China’s inflation is overheating and in need of more monetary policy tightening or that tightening is already crimping activity more than expected.

via Silver Hammered, Until it Isn’t – MarketBeat – WSJ.

Here is one of those classic Ag Agnotology lessons in how to read an article. The Street headlines this:  ”Swing Point on Gold, Silver Bullion Trade”. Thus Baiting the silver trader. The article discusses the ‘doldrums’ of the silver market, then below is the Switch (to Forex).

Investors who do not want to wait for their regional cash market to open, or do not have 24-hour access to the market they have open positions in, are able to access the 24-hour currency market. There is potential to analyze and trade currencies in a high-volume market that is supported by the global inter-bank system.

Investors can trade currencies in-line with a rising global market, or trade ahead of a falling cash market open. Being able to use currencies offers the opportunity to be in a trade before the regional market opens. Traders could trade the currency pair AUD-USD in-line with the potential seen in bullion trade. Selling the US dollar and buying the Australian dollar on days of equity and bullion strength is a simple process of placing a buy order on AUD-USD. The position can be managed in a similar way that equity-based trades would be bought and sold.

via Swing Point on Gold, Silver Bullion Trade – TheStreet

I’m seeing more of these types of articles coming out of the mainstream-agnotology financial folks. It’s a scary sign for the silver paper trade, because it looks like a growing setup to (more drastically) curb upside paper spot…though overall, this is very bullish for physical silver.

Commodity markets need international oversight, more transparency and intervention to deflate bubbles because increasing speculation means prices are no longer driven by supply and demand, the United Nations said.

via Commodity Bubbles Caused by Speculators Need Intervention, UN Agency Says – Bloomberg

The Street is agnotology. Knowing that, here is a ‘behind enemy lines’ bit of ag agnotology which reveals the following:

1. superficially points the finger at the CME (for the silver crash) while in actuality blaming the “hot money” (i.e. ‘speculators’). In other words, this is CME apologetics; they are saying that the silver trade volume was (and therefore we are lead to believe ‘is’) without fundamentals – just speculators chasing hot money.

2. The article concedes that silver is poised for a “bounce” up. Now when an agnotologist source says that silver is heading north (after a bloodletting), in actuality the source is saying to themselves “Hey, silver is already making its move so let’s make it look like we are unbiased.”

In summary, it looks like the agnotologists are seeing the blood flow dry up from the recent smackdown. But make no mistake, they are resetting the trap. For example, if silver starts setting up for its, rightful, parabolic move up, and we see the agnotologists (CNBC, etc) supporting the action at that time – then the trap is about to be sprung, again.

The overall silver pattern that we are dealing with here is the agnotologists continuously ‘reseting the trap’ with as little fanfare (and as much silver blood) as possible. However, when the thing is ready to actually collapse – it is going to be a RUN.

Is silver setting up for a huge snapback rally? It very well could be. Silver has stabilized after its 30% crash from recent highs of just under $50 an ounce, and it looks like the CME Group is done with raising margins on the shining speculative metal. The CME hiked margins four times in order to shake the hot money out of the silver market. Mission accomplished. Now this formerly red-hot trading vehicle is off the radar of many traders on Wall Street.

Selling euphoria and buying panic can be a successful strategy. The euphoria in silver was evident in the volume that came into the iShares Silver Trust(SLV_) near the top. Volume clocked in at over 180 million shares a number of times when the SLV traded between $46 and $48 a share. That volume wasn’t just higher than normal; it was record-breaking by extreme amounts.

Strong volume is a great technical indicator when you see it early in a trend. It’s a major warning sign when you see extreme volume activity after something has run up big like the SLV did. If you look at the volume following the crash in the SLV, you’ll see that downside action also picked up dramatically, with a number of trading sessions registering between 180 million and 294 million shares. This extreme volume on the way down could mean that everyone who wanted out is out.

This now sets up silver for some short-covering profit-taking action. If you shorted the SLV near the top, you have some big profits that you might want to start locking in. Buyers could also easily move back into the precious metal now that the price has stabilized and volume has returned to more normal levels, which indicates all the hot money is gone. There are a number of ways to play a bounce in silver, including the SLV or the more-leveraged ProShares Ultra Silver ETF(AGQ_). That said, the huge drop in silver has now created an even bigger buying opportunity in the silver mining stocks. Many of these names crashed hard as silver came down so fast. They now look poised for some big snapback rallies that could make traders some fast money.

http://stockpickr.com/roberto-p/portfolio/silver-miners-poised-to-rebound-05-24-2011/

If you’re looking to play silver here, make sure you’re watching the action in the U.S. dollar. If the dollar starts to rally again like it did recently, then a huge bounce back in silver might be put on hold.

via 5 Silver Mining Stocks Poised to Rebound – TheStreet

Having recently seen this “split” theme repeated in several agnotology sources, one is drawn to the conclusion that silver is being taken as a very serious threat to established interests.

some experts are now seeing a split of sorts between gold and its cousins.

via Gold, Silver Slide As Some See Split Forming In Precious Metals – Focus on Funds – Barrons.com

Memo | From: JPM | To: CNBC FM Actors

When talking about silver, work in the word “SPECULATION” as much as possible.

Fast Money doing their thing.

In today’s episode: The end of QE2 spells doom for commodities, especially precious metals, especially silver.

The ‘Joel Osteen’ character (sitting to the far left side of the screen)  is the one who delivers the message from God. He is the one we’re REALLY supposed to trust. On this episode Joel says: “There are a lot of people investing in this (commodities) asset class that really don’t belong there.”

‘Curly’ (of Larry and Moe fame, sitting on the far right side of the screen) is the shill who says things that we might be thinking and is specifically there to look (basically) dumb, so that we distrust that voice in our head saying ‘something’s not right’. In this episode, Curly throws out the ‘C’ bomb (conspiracy) only to be laughed at by the others. FYI, for the purposes of a good agnotology confidence game, sometimes he has to say things that are technically accurate.

Lastly, for a tasty slice of subliminal Ag agnotology pie, listen to the gal ( let’s call her, Me-so-money, aka the-smart-sexy-Asian-woman-who-switches-off-a-part-of-men’s-brains) at 2:47 actually say that “the margin requirements (in silver) were lifted and silver hasn’t been able to regain its footing”.

In short, this is all bullish for silver (at least into the low-mid $40′s).