IMF predicts America's Fall from Number One

There are many reasons for this but in my view the primary causes are the fools in Washington DC who spent us into the toilet using borrowed money to do so and who then had their puppet at the Federal Reserve print gazillions of Dollars into existence thereby assuring its debasement.

The combination assures us that the next two generations will be saddled with a debt burden, not of their own making, which will never be repaid in its original form.

I might also add the role of a large portion of the citizenry who seem to think that they are entitled to the fruits of the labors of others and who continue to vote for the very same type of politicians who are ensuring our decline.

Then again, you can also thank those who made it so difficult to own and operate a business here in the US between excessive regulation and overbearing bureaucrats that entrepreneurs threw up their hands in disgust and just moved their operations overseas.

April 25, 2011, 8:57 a.m. EDT

IMF bombshell: Age of America nears end

Commentary: China’s economy will surpass the U.S. in 2016

You can read the entire story here ( it will undoubtedly deeply grieve you if you love this nation) :

http://www.marketwatch.com/story/imf-bombshell-age-of-america-about-to-end-2011-04-25?link=MW_home_latest_news

Silver reaches within 20 cents of $50

Silver is on fire in Asian trading this evening moving to a session high of $49.82 after which is rapidly dropped a full $1.00 in price before bouncing back over $49 again. It is extremely volatile right now and I mean "VOLATILE". The price is swinging all over the place within mere seconds.

Its strength is helping to pull Gold higher as well which has gone on to hit a new all time high at $1518.40 as I write this.

What is remarkable about this is that the Dollar is actually higher  this evening in Asian trade.

Trader Dan on King World News Weekly Metals Wrap

Please click here to listen to my regular weekly radio interview with Eric King of King World News on the Weekly Metals' Wrap.

http://tinyurl.com/3wjjrpd

 

 

Broad Dollar Index continues sinking

A BRIEF CONSIDERATION OF SILVER'S OPEN INTEREST

Time permitting, I hope to have more on this later but wanted to throw a brief comment or two about silver's rocket move higher.

This has been a strange market to read with what I consider to be confusing CFTC COT reports and various changes in the daily open interest as well as all manner of rumors surrounding the delivery process. If I had nothing to go on but price action, I would say that a large short or shorts are in serious trouble and are attempting to get out but are not being allowed to by some very big and committed buyers who are going after them. I have seen enough cornered shorts being hounded by wolves who smell blood in the water during my trading career to be fairly confident that this is behind some of the price action in silver.

However, based strictly on the changes in open interest it is unclear if this is actually occuring. The sharp push from $34 to $42 was accompanied by a rather sizeable increase in open interest indicating that it was not primarily driven by short covering. If anything, fresh shorts were piling in, each of them attempting to pick a top or with other purposes in mind and kept on coming in as silver moved an incredible $8 higher in less than a month's time.

From $42 to $44 there was short covering occuring as some of the shorts were throwing in the towel and giving up leaving a lot of blood on the floor of the pit as they departed. However, once again the open interest has stabilized and actually ticked up some Wednesday as price soared above $45. Clearly some new shorting is occuring as top pickers are once again trying to strike what they think is paydirt. I am especially eager to see the numbers from today's sharp push through $46.

At some point the top pickers are going to get it right but as long as they keep coming in and the determined buyers keep showing up, we should see more bouts of this sort of change in open interest - namely - it increases as these fresh shorts take on the new buyers only to see the same shorts run for cover and close out their short positions with large losses as the market buying pressure forces them out. The process can then repeat with open interest rising and then subsequently falling and then repeating again.

If we do indeed get a serious short squeeze, and I mean one in which we see a total capitulation of the large short that has ruled this market for many years previously, we are not going to see any increases in open interest but rather a sharp fall in the total OI as they finally and completely give up. Whether that happens is anyone's guess. I would have thought it would already have commenced seeing the enormority of the paper losses that are accruing to those on the short side of this market. The margin calls and the need to constantly raise more cash to maintain these deeply underwater short positions must boggle the mind at this point.  Just the run from $34 to $42 was a loss of $40,000 per single contract! Imagine holding hundreds if not thousands of these!

Having been on the wrong side of a market at various times in my career I can tell you from firsthand experience, the emotions that one deals with run the gamut from fear to despair to panic and total desperation. It is a horrid thing to live through mainly because the losses mount at such a rapid clip. What makes matters worse is that you keep waiting for a setback in price, any setback, to try to buy back those shorts and it never seems to come. Prices just keep going up and up and up and up. You learn very quickly the terrible, awful power of leverage gone awry.

We will just have to wait and see how this all ends but for now, with so many apparently eager top pickers coming in, it is difficult to say that this thing has run out of upside just yet. They are providing the firepower to take it higher as they are forced into buying it all back at a higher level and taking their losses with them. Perhaps when we see an end to efforts to pick a top, this thing will actually top out. Either way, it has been one helluva ride already. The thing is that if you look at silver in inflation adjusted terms, the gray metal is still cheap by comparison to where it was in late 1979, early 1980.

US Dollar posts the lowest Weekly Close in 32 Months

Not much more needs to be said about the US Dollar than this headline. They managed to push it just barely above the support level ahead of the long holiday weekend but it certainly looks weak heading into next week. The problem is even though the "short Dollar" trade is crowded, there does not yet exist a fundamental reason to buy the Greenback.

That bodes poorly moving forward, oversold, crowded or extreme bearish sentiment notwithstanding.

CMEGroup (Nymex and Comex) markets closed for trading tomorrow

Gold and silver will not be trading on the Comex tomorrow in observance of the upcoming Easter Holiday according to the CME press release. They will reopen Sunday evening.


Thursday, Apr 21
NYMEX & COMEX® and DME Products on CME Globex 1615 CT / 1715 ET – Regular CME Globex close for trade date Thursday, Apr 21
Friday, Apr 22 CME Globex is closed
Sunday, Apr 24 1700 CT / 1800 ET – Regular CME Globex open for trade date Monday, Apr 25

Silver - 30 Minute chart

Here is a 30 minute chart of Silver noting the current support and resistance levels at this time.

A push through the region near $46.25 should let it run towards $47. A breach of $45.50 would imply a drop towards $45.10.