Market, Energy, and Inflation posture (Not Political).

I just read that JP Morgan just had to pay huge fines for market manipulation of silver, and that professional traders had been artificially suppressing the price of silver for over 10 years. If this is all true, then silver doesn't need the help of a Reddit group to climb.

 

Crap! There’s a certain website out there where some people talk about some things and I read this very thing a couple of weeks ago. Of course the info was given without a citation so I shrugged it off but told myself it wouldn’t surprise me if it were true. And now here we are. It seems like we truly do live behind a veil.

 

Yes. Buy. Buy. Buy.

 

Shit like this always happens and more often than not, news publication is either delayed or altogether nonexistent. These companies pay even bigger money to the media to hide the news on top of their fines whenever they get caught.

 

Just read about how the Indian government brokered some kind of deal for potash that none of the big suppliers are willing to honour. Not sure if that means now is the time to buy or sell potash stocks, though.

 

They also banned Bitcoin and will be introducing their own crypto soon. With how large their population is...might be worth snagging a few coins early.

 

The Reddit group is not targeting silver. You can go to Reddit and find that out in 30 seconds. I believe all this silver hype is the big dogs doing what they do, manipulate the little dogs. All the news organisations are piled onto helping them also.

 

Just opened an account using your referral.

Any recommendations on how to proceed would be very welcome. I'm behind in learning about crypto and really need all the help I can get. Thanks.

 

Jeff. OK. Think I got it now.

No doubt the new crypto makers are counting on that.

 

First, thanks for using my referral link!!!

The options on BlockFi are:
Bitcoin (BTC) - This is the "Reserve Currency" of the crypto world. You can't go wrong with it, but your returns may be higher in other cryptos, but with potentially higher risk. I don't consider any of the ones available on Blockfi to be high risk, though there will be volatility.
Ethereum (ETH) - This is probably second to Bitcoin in importance in the crypto world. Hundreds of other cryptos are built on top of the Ethereum network, and all this benefits Ethereum.
USDC - A digital form of the U.S. dollar - called a Stablecoin
Litecoin (LTC) - Another popular crypto. I do not know the utility of it off the top of my head. I do hold a few LTC based on the recommendation of my guru.
GUSD - Another Stablecoin tied to the U.S. dollar
Pax Gold (PAXG) - An awesome way to hold gold without the hassle of storing it. One PAXG is always worth one ounce of gold. And yes, if you wanted, you could take delivery of the gold backing it.
Paxos (PAX) - Yet another Stablecoin tied to the U.S. dollar

Of these, if you are interested in investing in gold, buy some PAXG. Otherwise, you couldn't go wrong investing in equal parts BTC, ETH, and LTC.

While Blockfi is a great first step, if/when you are ready to expand to other cryptos, you can learn about the more complicated exchanges. It can be quite intimidating when you are doing it for the first few times.

 

Don't fucking buy silver. Buy GME.

Diamond hands babyyy ✊✊

 

Yes. Both sides are playing the infowars game considering it’s billions on the line. Now the poors are looking for the next GameStop and the rich are defending again. Either way, silver is still decent to be in long term anyways. SLV and IAU are safe buys long or short term to add to any portfolio. So if it does materialize, cool. If not, hold until you’re old.

 

Man, hope folks that got in late didn’t get burned too bad and only put in what they could afford to lose. I’m hoping for a happy ending for them, but it’s looking a bit grim at the moment.

 

Them diamond hands look a little shaky at the moment...

 

The corrupt will not allow their rigged game to be used against them

 

Hold!

 

The casino will let you win a little bit every so often, but The House never loses in the end.

 

I thought y'all would appreciate this. This is copied from a free newsletter I get from Jeff Brown, of Brownstone Research. It does a great job of analyzing the market chaos last week and provides some updates on the general investing climate that resulted from it. If the links don't work and you're interested in them, let me know.

---Begin Jeff Brown---
Dear Reader,
I’m amazed it took this long…
After all, Facebook has been around since 2004… Reddit since 2005… and Twitter since 2006. These platforms have existed for the last decade as forums for millions to share interests… as well as healthy and very unhealthy discourse. But finally, retail investors have figured out how to use social media to band together and profit from one of Wall Street’s oldest moves – the short sell. Short selling is not as straightforward as we might think… There is actually a lot of nuance. And investors who aren’t aware of the mechanics ultimately end up stacking the deck against themselves. That said, there is nothing sinister about short selling. I would argue that it is a necessity – a vital dynamic of capital markets. Short selling helps keep asset values in check. When a stock gets ridiculously overvalued, short sellers step in to sell the stock with the expectation that it will return to a more reasonable valuation. Hedge funds focused on short selling often uncover accounting fraud or other corporate shenanigans that reveal that a company isn’t quite what it represents itself to be. In this regard, short sellers do a great service to the markets and those who invest in them.

But there are some critical elements of short selling that normal investors should understand…

• When we sell a stock short, we are borrowing shares, selling them, and creating a liability. We have to buy back the shares we sold at some point to return them to the lender. Ideally, we’re buying back at a price lower than what we borrowed. If so, we make a profit… maybe.
  
  
• Every short sale is done on margin and requires a margin account. And as there is a lender, there is a cost to borrowing. Stocks that are considered easy to borrow – think large, highly liquid stocks – might have an annual margin interest rate of 5%.
  
  But “hard to borrow” stocks can have a margin interest rate of 20% or more. That is why profit is a “maybe.” A successful short sale has to be timed well, and the stock’s drop has to be large enough to cover what we paid in margin interest.
  

But it gets worse. Here is what most won’t tell you…

• When we short shares of a stock that pays a dividend, we have to pay the dividend to the person who bought the shares that we sold. It comes right out of our brokerage account automatically.
  
  
• The lender of our shares can call those shares back at the time of their choosing. This is where retail investors can really get screwed. We don’t have the kind of leverage that a fund does to preserve our position.
  
  
• For example, let’s say that we sold $20,000 worth of shares in a terrible company that was being hyped up, but we believed that it was a fraud. The stock then runs up 40% leading into the company’s earnings announcement.
  
  We’re not worried because we are certain the results will be terrible, and the stock will collapse. But the day before the earnings announcement, the broker that lent us the stock calls the shares back and we take a 40% loss ($8,000)… plus whatever margin interest we paid and any commissions. The next day, the stock collapses. Not only are we in the hole $8,000, but we also missed out on a big profit. It isn’t right or fair, but it is perfectly legal. It has even happened to me.
  
  
• The size of our potential losses is technically unlimited. Short sellers of Tesla learned this painfully over the last couple of years. Tesla’s stock has soared more than 20x. Can you imagine losing multiples of the amount that you received selling shares short? That has to hurt.
  

This is why my general advice to investors is to avoid short selling entirely. There are simply too many dynamics that favor Wall Street. There are, however, bearish ETFs and funds that we can buy if we think the market is going to drop. This limits our downside greatly even if our timing is wrong.
Options are another alternative. We can buy puts on stocks that we think are destined to fall. The most we can lose on a put is the cost of the option, which controls our downside. All this leads me back to the excitement of GameStop and how Wall Street sold short the stock. Unlike what I outlined above – legal short selling – this was “naked” short selling. The brokers lent out shares of stock that didn’t exist. It should be impossible, but it happens all the time. And it typically results in large price distortions that favor Wall Street and hedge funds. GameStop was an exception.

As I’ve covered in recent days, Reddit users in the WallStreetBets forum recognized the rampant naked short selling in GameStop. And they did something about it. And now WallStreetBets has 8.4 million followers. As a result, Citron Research, a firm that has profited off of short selling for the last two decades, got taken out to the woodshed on the GameStop trade. Firms like Citron quietly establish short positions at the best prices and then publish damning research on the company. They make TV appearances and try to drive the stock down. But Citron got burnt so badly on GameStop that it just announced it will discontinue publishing short selling research. The game is up.

Hedge funds now know that grossly distorted short positions will be recognized by groups of retail investors who can cause a short squeeze in a matter of days or hours… with the potential loss of billions for funds. Now investment banks like Jefferies and Wells Fargo are even publishing lists of companies that are heavily shorted and are candidates for short squeezes. That’s exactly how free markets should work.

And one last note before we turn to the rest of today’s Bleeding Edge…
Don’t forget to mark your calendar for our Investment Accelerator event taking place next Wednesday evening at 8 p.m. ET. I can’t wait for this one. At the event, I am going to bring viewers up to speed on what I believe is my most ambitious project to date. We’re going to talk about a rare opportunity to join a top-tier group of investors for the chance to share in $1 billion in tech profits. I will also share what we are most excited about right now here at Brownstone Research. And I will outline what I see as the five best investment opportunities that could 10x our money over the next five years.

I know the world and the markets seem chaotic right now. Many people are worried about the future. But I’m not one of them. While I acknowledge the problems as I see them – as regular readers well know – I see immense opportunity in a number of areas right now. In fact, all the uncertainty that’s prevalent today is creating the perfect climate for tech-savvy investors. Those who can tune out the day-to-day noise and focus on the big picture will do very well in the years to come. And that’s what our Investment Accelerator event is all about. The market is giving us a tremendous opportunity to turbocharge our investment returns right now. Let’s make sure we take advantage of it. So please join me on Wednesday, February 10, at 8 p.m. ET sharp. We have a big night planned.
---End Jeff Brown---

Again, let me know if you want more info.

 

Thanks for posting that. It was informative and a good perspective. I think a lot of people are confused about what happened, myself being one.

 

Me three.

 

Me four LOL

(Seriously though...VERY informative. I appreciate this being posted.)

 

I sold my GME position at 414 on the infamous Thursday morning when it became clear that hitting 7 figures on Friday wasn't in the cards. All said and done, I banked 670k CAD from GME purchased in my TFSA since November, selling my other high risk stuff and averaging up to 60-something CAD per share. Bought a pile of VOO afterwards to let things cool a bit to not to call the thunder of the CRA, haha. Pretty funny for things to work out that way on what started as a long bet!

 

If anyone is interested, there is a new credit card that pays rewards in Bitcoin. Here is a link to get on the waitlist to apply for it:

https://blockfi.com/credit-card-waitlist/?r=wpaR3

 

Ah no, I need something tangible...

 

Again? They are pumping that one up again?

 

Sure, Why not? What do you have to lose...its only money.

 

Shorters gotta buy back eventually

 

Was haulted towards the end of trading day

 

Anyone else find it interesting that the yield on the 10-year treasury is around 1.40%. Will they continue to rise or are we going to see another dip? I have my own thoughts of course, but am interested to hear other perspectives.