Yesterday I was commenting on the strength of gold during COMEX op-ex week, which rarely happens (only once in the last 5 years that I can recall). Silver was taken down as per the usual drill with the COMEX criminals. The much anticipated CFTC hearings obviously were yet another sham to try and 'look busy' while the regulators do absolutely nothing. I think a delivery failure and COMEX default are the only way that the manipulation will come to an end, and it is inevitable in my opinion.

The shorts are doomed and each month we get closer to that day when the COMEX must confess that they do not have the silver to meet all of the contrat delivery demands. No problem, they will just settle in cash like nothing is wrong, and those businesses and investors that paid up expecting real physical bullion as per the terms of their contracts will be screwed.

Which brings us to the price action today. Silver has rebounded sharply, as the intervention yesterday was only sufficient to discourage some silver longs from requesting delivery on the May contracts. It used to be that when a major intervention was underway to drive silver or gold lower that it would continue for weeks before the market bottomed and bounced. Now it is good for a few hours before investors decide they cannot wait to buy more cheap metal and bid it back up. I think the awareness is also growing that paper contracts are fraud and those who want real silver are not wililng to pretend they have it with ETF products. This means more and more players are paying up to get their hands on the real metal, and this in turn is making the paper rollover scam even more acute.

As an investor primarily leveraged to silver I am counting the days until we get a serious breakout. I think we could see silver make a new bull market high this year above $21 and a new all-time high above $50 within 2-3 years. All this hand-wringing about ECU and the daily market depth is not going to matter much if silver breaks out. We now have two mills operating and production is climbing. There is still some work to do to get the recovery efficiency up to spec, and until then I doubt ECU wants to put the higher grade ore through the circuit or increase production towards capacity. But I do think they will get there, and be fully leveraged to that higher metals regime that is coming.

I hold most of my ECU in a retirement account and I do not trade it. I do not get too much angst over the usual silliness that goes on in the retail forums. I am keeping my eye on the long term. I have decided to let the company have this year to get its act together and start generating recurring production gains and become self-financing. I think they will get there. And if I am right, I will be happy I put up with all of the nonsense in the silver trading pits and all of the ups and downs with the share price for the last few years.

cheers!

mike

Voluntary disclosure: ECU has a paid advertisement on my website. My comments are my own personal opinion and I have not spoken with management for several months.