What Just Happened?!?!

By Michael Pennington © Copyright 2010 Pennco Coins

Late last night, Silver took a sudden and unexpected nosedive from $19.08 down to $18.80. I say unexpected because Silver has been so strong lately. I woke up this morning thinking we could be looking at a real bloodbath today. Much to my surprise, I was shocked and delighted to see Silver’s price rise from $18.80 all the way up to $19.33! What happened?

Bloomberg reported this morning, that J. P. Morgan, the largest short seller of Silver in the world,  said today that they will be shutting down their proprietary commodity trading operations in response to the Volcker Rule in the Financial Reform legislation.

The JPM proprietary commodity trading group is headquartered in London with a few traders located in New York.

Employees are being told that they may apply for other positions now.

Speculation is that this is also in response to position limits and other reforms in the Commodity Markets spearheaded by Commissioner Bart Chilton which will make it more difficult for large players to dominate the short term markets through sheer position size. In addition, this operation has suffered considerable losses as Gold and Silver prices continued their upward trends. This provoked a high level review by top executives. It is not clear if JPM will be exiting all markets at the same time including gold and silver in addition to other commodities.

We will look for clarification from their official statement which has not yet been issued.

The fact is JP Morgan holds more than 40% of the total shorts in the Silver market. At last check, this amounted to over 200,000,000 ozs of silver that must be covered. This could develop into the greatest short squeeze of all time!

As a result, it seems to me that there may be real stress in the wholesale physical silver market. I’ve been writing about this before today’s announcement. All the factors I look at, including flows into ETFs, the shorting of SLV, the decline in COMEX silver inventories, the strong retail and institutional investment demand in silver, the now growing world industrial demand, etc., suggest tightness and the potential for a silver shortage like never before. In fact, recently I have hinted that the short manipulation in the precious metals may come to an end soon. Today’s announcement could certainly enhance that timetable.

This means that when the silver shortage hits, the price will explode. On this, there is no question. Industrial users, at the very first sign of delay in silver shipments, will immediately buy or try to buy more silver than they normally buy, in order to protect against future operation-interrupting delays. This is just human nature. The world has never experienced a true silver shortage ever, so the price impact is clearly unknown. I’ll try not to overstate how high I think the price will go in a true silver shortage and how quickly it will occur, so that I don’t sound too extreme. But the price move will give new meaning to “high” and “fast.” I see Silver possibly reaching $60 – $75 per oz at sometime in the future.

None of this means Silver will go up 10% tomorrow. Be smart. Watch developments closely. I’ll do my best every week to provide you with my opinion. I’ve waited a long time for Silver and Gold price suppression schemes to end. We are a big step closer to that tonight.


I rarely use this report to represent a political view. However, this week I saw a link regarding a new law the White House is endorsing which will make housing extremely difficult and more expensive than it is now. If that’s possible. Please educate yourselves on these issues and take whatever action you feel is important.

IF you own a Home you need to Read this.

Something every home owner should be made aware of!

Don’t want to be bothered with “Political stuff?”   You’d better read this one. It will come as a huge shock to you if you aren’t informed as to what Obama is up to, and apparently it has already passed one hurdle. It will take very little now to put it into actual law!!  YOU’D BETTER WAKE UP AMERICA !!!! So you think you live in a free country, boy have you got a surprise coming.

A License Required for your HOUSE?

If you own your home you really need to check this out. At the end of this email is the Google link to verify.  If the country thinks the housing market is depressed now, wait until everyone sees this; no one will be buying homes in the future.

We encourage you to read the provisions of the Cap and Trade Bill that has passed the House of Representatives and being considered by the Senate. We are ready to join the next march on Washington ! This Congress and whoever on their staffs that write this junk are truly out to destroy the middle class of the U.S.A …..

A License will be required for your house…no longer just for cars and mobile homes….Thinking about selling your house.  Take a look at H.R.
2454  (Cap and Trade bill).  This is unbelievable!  Only the beginning from this administration! Home owners take note & tell your friends and relatives who are home owners!

Beginning 1 year after enactment of the Cap and Trade Act, you won’t be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the “Cap & Trade” bill passed by the House of Representatives, if it is also passed by the Senate, will be the largest tax increase any of us has ever experienced.

The Congressional Budget Office (supposedly non-partisan) estimates that in just a few years the average cost to every family of four will be $6,800 per year. No one is excluded.  However, once the lower classes feel the pinch in their wallets, you can be sure these voters get a tax refund (even if they pay no taxes at all) to offset this new cost. Thus, you Mr. And Mrs. Middle Class have to pay even more since additional tax dollars will be needed to bail out everyone else..

But wait. This awful bill (that no one in Congress has actually read) has many more surprises in it. Probably the worst one is this: A year from now you won’t be able to sell your house. Yes, you read that right.

The caveat is (there always is a caveat) that if you have enough money to make required major upgrades to your home, then you can sell it. But, if not, then forget it. Even pre-fabricated homes (“mobile homes”) are included. In effect, this bill prevents you from selling your home without the permission of the EPA administrator.

To get this permission, you will have to have the energy efficiency of your home measured. Then the government will tell you what your new energy efficiency requirement is and you will be forced to make modifications to your home under the retrofit provisions of this Act to comply with the new energy and water efficiency requirements.

Then you will have to get your home measured again and get a license
(called a “label” in the Act) that must be posted on your property to show what your efficiency rating is; sort of like the Energy Star efficiency rating label on your refrigerator or air conditioner. If you don’t get a high enough rating, you can’t sell.

And, the EPA administrator is authorized to raise the standards every year, even above the automatic energy efficiency increases built into the Act. The EPA administrator, appointed by the President, willrun the Cap & Trade program  (AKA the “American Clean Energy and Security Act of
2009”) and is authorized to make any future changes to the regulations and standards he/she alone determines to be in the government’s best interest. Requirements are set low initially so the bill will pass Congress; then the Administrator can set much tougher new standards every year.

The Act itself contains annual required increases in energy efficiency for private and commercial residences and buildings. However, the EPA administrator can set higher standards at any time. Sect. 202 Building Retrofit Program mandates a national retrofit program to increase the energy efficiency of all existing homes across America.

Beginning 1 year after enactment of the Act, you won’t be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. You had better sell soon, because the standards will be raised each year and will be really hard (Ie., ex$pen$ive) to meet in a few years. Oh, goody!

The Act allows the government to give you a grant of several thousand dollars to comply with the retrofit program requirements IF you meet certain energy efficiency levels. But, wait, the State can set additional requirements on who qualifies to receive the grants. You should expect requirements such as “can’t have an income of more than $50K per year”, “home selling price can’t be more than $125K”, or anything else to target the upper middle class (and that’s YOU) and prevent them from qualifying for the grants.

Most of us won’t get a dime and will have to pay the entire cost of the retrofit out of our own pockets. More transfer of wealth, more “change you can believe in.” Sect. 204 Building Energy Performance Labeling Program establishes a labeling program that for each individual residence will identify the achieved energy efficiency performance for “at least 90 percent of the residential market within 5 years after the date of the enactment of this Act.”

This means that within 5 years 90% of all residential homes in the U.S. must be measured and labeled. The EPA administrator will get $50M each year to enforce the labeling program. The Secretary of the Department of Energy will get an additional $20M each year to help enforce the labeling program. Some of this money will, of course, be spent on coming up with tougher standards each year…

Oh, the label will be like a license for your car. You will be required to post the label in a conspicuous location in your home and will not be allowed to sell your home without having this label. And, just like your car license, you will probably be required to get a new label every so often – maybe every year.

But, the government estimates the cost of measuring the energy efficiency of your home should only cost about $200 each time. Remember what they said about the auto smog inspections when they first started: that in California it would only cost $15.

That was when the program started. Now the cost is about $50 for the inspection and certificate; a 333% increase. Expect the same from the home labeling program. Sect. 304 Greater Energy Efficiency in Building Codes establishes new energy efficiency guidelines for the National Building Code and mandates at 304(d) that 1 year after enactment of this Act, all state and local jurisdictions must adopt the National Building Code energy efficiency provisions or must obtain a certification from the federal government that their state and/or local codes have been brought into full compliance with the National Building Code energy efficiency standards.

CHECK OUT Just a few of the sites;

Cap and Trade: A License Required for your Home http://www.nachi.org/forum/f14/cap-and-trade-license-required-your-home-44750/

HR2454 American Clean Energy & Security Act: http://www.govtrack.us/congress/bill.xpd?bill=h111-2454

Cap & Trade A license required for your home: http://www.prisonplanet.com/cap-and-trade-a-license-required-for-your-home.html

Cap and trade is a license to cheat and steal: http://www.sfexaminer.com/opinion/columns/oped_contributors/Cap-and-trade-is-a-license-to-cheat-and-steal-45371937.html

Cap and Trade: A License Required for your Home: http://www.freerepublic.com/focus/news/2393940/posts

Thinking about selling your House? Look at HR 2454: http://www.federalobserver.com/2009/10/01/thinking-about-selling-your-house-a-look-at-h-r-2454-cap-and-trade-bill/


This is bad…..real bad….these guys MUST be stopped, stopped now, and stopped HARD!!!!

Pass this on to everyone on your e-mail list – pass it across America!



About Pennco Coins

Pennco Coins
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