Bearish News

From the Des Moines Register:

War is a drain, Paul tells Iowans

Ron Paul says that since 2008 he has seen more potential voters come around to his way of thinking about the economy, and that he hopes his views on foreign policy will gain similar traction in the run-up to the 2012 presidential race.

“People are now seeing the economic burden of our foreign policy – you know, the hundreds and hundreds of billions of dollars of foreign aid that is taken out of our country,” the Texas representative said Monday during a visit to his campaign office in Ankeny. “People are starting to realize that war is a drain.

Ron Paul is the only 2012 presidential candidate who can truly call himself anti-war. The only one that can give Americans a chance at ending unsustainable foreign engagements.

He’s the only candidate who might be willing/able to cut defense spending as much as necessary (not 2% or 5% – think 30-50%). He’s the only one likely to stop reckless foreign policy; “aid” that is often counter-productive and only beneficial to a few.

If you’re skeptical on Dr. Paul — as most are at first — read up. Do some research. Take politico hit-pieces with a grain of salt, as anyone attempting to be objective always should.

Read his books – End the Fed, The Revolution, others. Read his economic influences, like Murray Rothbard and Ludwig von Mises, Hayek and Hazlitt. Surf around Mises.org.

Watch him in the 2012 presidential candidate debate on Fox:

Watch his CPAC speech:

He’s polling #2 in New Hampshire. Crazier things have happened.

From the Center for Freedom and Prosperity, presented by Hiwa Alaghebandian.

Guest post by Jesse (highly recommended reading -Adam)

Gold Daily and Silver Weekly Charts – and Le US Douleur – More Volatility Ahead for Silver

Silver was hit harder as the US equities fell, and gold maintained some resilience.

The intraday moves had the character of bear raids and sharp selling in size, rather than steady liquidation.

Notice that the dollar too was weaker today, although it remains in a short term uptrend.

The number of contracts standing for May delivery of silver ROSE today according to Harvey Organ. The Comex delivered no actual silver, but the trading desks offered plenty of paper, as overall open interest rose again.

Someone asked me what it might be like if the Comex was unable to meet its deliveries, and there was a  cascading effect to the metals encumbered by counterparty risk in the two big ETFs, if they were hit by a wave of redemptions as large shareholders sought to lock in supply.

I did not see their scenario of multiple days of up limits until the market clears, simply because it seems to be a few large members important to the exchange who seem to be ‘holding the bag’  in this case.  Market solutions are for the little people and relative outsiders like the Hunt Brothers.

Rather, I would anticipate a declaration of force majeure, and a forced settlement in cash and shares of SLV, which themselves are probably representations of bullion rather than the metal itself.   I do not know what the rationale for this might be, and it is not quite clear to me that they would even need one except for cosmetic purposes.

When you have power and have learned to use it with ruthless hypocrisy, the only thing you need to respond to is a greater force of power that calls you to accounts. This is one of the great lessons from the recent financial crisis.  When the government and the regulators do not uphold their responsibilities, fraud becomes fashionable.

The Comex has about 32 million ounces of deliverable silver on their books, and they are dragging out the delivery process each month, as virtually no new inventory becomes available to replenish their supply.

I was a little shocked that the parabolic rise in price and  the subsequent calculated smackdown in conjunction with the increased margin requirements shook no new significant inventory loose for the dealers, only more paper profits. Customer withdrawals continue as well, with almost 3.5 million ounces leaving this month.

However it transpires, if it does, it will be memorable.   I am looking at the supply and demand as the numbers are published, and not at anything esoteric or private.  So I would imagine that the CFTC and the least sophisticated traders in the market can see the same things unfolding.  I hear things from time to time about back room discussions about the resolution of all this, and have to work to separate them from the tide disinformation, of which there is quite a bit more than you might imagine.  People are very concerned about a potential shock to the credibility of the system.  Of course, they may be utterly out of touch with current reality.  Trust is in short supply, and the natives are growing restless.

Rumours, and disparaging talk, and theoretical discussions are well and good, but as they say, show me the money, or in this case, the bullion.

Where is it, how much of there is it, and what are they going to do when and if the supply of silver bullion drops below 30 million ounces deliverable, which is really a pittance given the size of the market? A silver futures contract on Comex is 5,000 ounces, and so that represents a mere 6,000 contracts.  There are a total of 123,000 contracts open today.  Last Friday the volume was an eye popping 126,000 contracts!  This at times seems less a market, and more a game of musical chairs, or a shell game.  And if the allegations are true about the LBMA,  and their leverage, then what we have here may be a recipe for a severe market dislocation.

And this is why I expect the silver market to remain highly volatile, with some amazing moves ahead, both up and down. And stretchers perhaps, to carry out some players from the pits, as they get caught offside in high frequency moves, and an increasingly disorderly trade. And this due to the failure to reform the financial system.

And for us, the smaller investors, caution is advised.

If you haven’t heard, there’s a great new series on HBO called Game of Thrones (airs Sunday 9:00pm ET).

Sopranos with Swords is an unofficial slogan being thrown around, but I prefer Lord of the Rings for grown folk.

Episode 5 just aired, and it was a good one. I won’t dish any spoilers.

The series is based on the excellent series of books by George R. R. Martin, A Song of Ice and Fire. There are 4 books so far, another is done and due out shortly. 7 books are planned eventually, and if all goes according to plan, each book gets a season on HBO. 10-12 1 hr episodes per season.

I picked up the books in 2004, and started collecting first editions of A Game of Thrones (aGOT) around 3 years ago when the HBO pilot was announced. I own around a dozen at last count. And though it’s not really an invesment, per se, on an ROI-basis it would probably look good on paper (not that I plan on selling).

As one of the few geeks who has followed the market for aGOT first editions,  I’ve noticed recently that high-quality copies have become quite scarce on the market. And if the books were a stock, they’d be in a very bullish price trend. Some that sold for $75 2 years ago are fetching $500 today. But volume is light, there are only 39 “first editions” listed on the leading used/rare book site Abe Books. At least half are garbage and outrageously priced.

First edition books are an interesting market. Low volume, small number of sellers, very few people who dabble in it as an investment, and lots of (mostly wealthy, myself excluded) collectors.

Last year I bought the aGOT geek’s holy grail, an as-new limited special edition A Game of Thrones published by Meisha Merlin in 2003. Beautiful version of the book, slipcased and illustrated gorgeously. Signed and numbered by the author, as well as the artists (pic right).

Only 448 were printed, with an original price of $250.

Technically, the numbered Meisha Merlin books are not the true holy grail. There is a lettered edition of which only 52 were printed. Don’t even try, unless you’re prepared to write a really big check. From what I understand all the lettereds are held by rabid fans and insiders, and all of the insiders are rabid fans. The series is that good.

There are currently only three Meisha Merlin numbereds I can find online today. Two on Amazon, priced at $1800 and $2495. There’s one on Abe Books for $2495. Obviously, I cannot vouch for the sellers, but those prices seem to be roughly in line with what other copies were selling for earlier this year. The market for lettered/numbered books is tiny compared to regular British and American first editions.

A few years back Mr. Martin did a FAQ about collecting first editions. It’s dated (so no, you cannot buy MMs for $250 any more, and I found his price estimates to be slightly inflated at the time, though they are likely conservative now) but still relevant:

Q:  How do I know if I have a first edition of A GAME OF THRONES? Which was the first edition, anyway? What is it worth?

A:  There have been five hardcover editions of A GAME OF THRONES published in English to date.

The Bantam 1996 edition was the true first, as I see things. It had a silver foil cover with an embossed throne but no other illustration. That one has become quite valuable, and seems to sell for $200 to $600 (depending on condition), the last time I checked.

The HarperCollins/ Voyager 1996 edition was the British first. Its official publication date was earlier than that of the Bantam edition, but Bantam went to print several months early to hand out copies at the ABA, so I consider theirs the true first. However, the British edition had a much smaller print run. As a consequence, it is much rarer, and even more valuable. I’ve seen it selling for anywhere from $800 to $1500 on the internet.

Then came the SF Book Club edition. A smaller size hardcover, it used the Bantam cover, but was a dull grey instead of bright silver. You see this one listed on ebay frequently. Some sellers are honest enough to list it as the SFBC edition. Others just call it the “hardcover,” trying to pass it off as the first. You can join the SFBC and get the book for around $12 even now, so it’s foolish to pay $50 or more for the same thing on ebay.

The Meisha Merlin limited edition was slipcased, signed, and numbered, and featured artwork by Jeffrey Jones and Charles Keegan. That came out in 2001. It was limited to 52 lettered copies and 448 numbered. The lettered are all sold out, but numbered copies remain available from Meisha Merlin at $250. It is easily the most beautiful edition of the novel, a real treat for a collector who loves fine books.

In June 2002 Bantam went back to press and released a second edition of their hardcover. That’s the one available in the bookstores now. Silver foil cover, but the paperback cover art (a Steve Youll painting of Jon Snow and Ghost with a burning castle in the background) is inset within the foil, giving the book the same “look” as the hardcovers of A CLASH OF KINGS and A STORM OF SWORDS. Unfortunately, the numeral “1″ was not removed from the print history line on the copyright page, leading some people to think this is a first edition, first printing. It’s not. It’s a second printing, and it’s worth the cover price.

I really do suggest reading the books if you’re into this sort of fiction. It’s my favorite series of all time, by far. Time Magazine called Martin the American Tolkien, but really, he’s much better. To my pleasant surprise, the HBO series is doing his work justice.

Here’s a link to the first book on Amazon – A Game of Thrones.