Monday, August 1, 2011

Bob Moriarty Compares Silver to Housing Bubble, Says Final Bull Market Top is In

He's Ba-aaaaaack!
In April, we asked whether Bob Moriarty was now a Silver Troll, as he declared silver at a top at $31 (nice call Bob, considering silver topped at $49.73), and at $38, Moriarty declared silver the world's most overvalued asset.
We warned readers in late April that silver was getting overextended and that a correction was due, but we believe that silver's fundamentals have not changed, and we have yet to see the final parabolic blow-off phase where the general public goes all-in to the shiny metal.

Our call on Bob seems to have been much more accurate than his call on silver, as today Bob made these comments:
* "Gold and silver are not wealth"
*Compares gold and silver currently to housing bubble in 2007
*States that silver's FINAL bull market top is in
*After bashing gold and silver Bob pumps pink sheet junior miner Northern Gold Mining, currently trading at $.34. 
*States that silver's May action was a "MANIA"
*Bob culminates his argument with this doozy: “In 160 years of trading, there has never been a correction in silver as severe as the 34% decline we experienced in to the May 17 low. Declines of this magnitude have always been an indication a final bull market top in place.”

Um.......The Doc calls BULLSH**!!
That statement is 100% FALSE and is intended purely to provoke a panic/fear response by the reader.
Bob hopes readers have a short memory, or else are new to the silver market.
Just 3 years ago, in 2008, silver corrected from $21.31 to nearly $8, a 62.5% correction! 
And after the 62.5% correction, the silver bull ended there merely as a result of such a severe correction, right? 
Oh wait...silver gained 525% over the next 2.5 years.
Silver Price Chart 10 years in USD per Troy Oz
10 Year Silver Chart
Sure Looks Like Silver Has
Irreversibly Broken Down, Right?

As to Moriarty's ridiculous conclusion that silver's FINAL bull market top is in solely because silver corrected 34% in May we make the following points
*When did the US federal government balance their budget?
*When did silver's supply/demand fundamentals change from a massive deficit to a surplus?
*When did we miss the general public rushing into gold and silver? (We wrote about a month ago how an Average Jane who is a friend of The Doc had NO IDEA WHAT GOLD AND SILVER WERE when The Doc recommended them for her portfolio)
*When did the COMEX substantially increase their registered silver inventories which were at a NEW ALL-TIME RECORD LOW OF 26.7 MILLION OUNCES ON FRIDAY???
*When did The Bernank find buyers for the $3 Trillion in T-bonds that will be issued in the next year and a half so he will not need to perform QE3 to monetize the federal debt?
*When did less than 1% of the population owning a particular asset become to be known as a MANIA?
*When did....ok, you get the point.  Nothing's changed.

Things are WORSE than in 2008, from which silver roared to a 525% gain in 2.5 years after its severe correction.

Ok, now that we've cleared up the fact that Moriarty's statements today are largely incorrect, and in at least once case blatantly false, what is the purpose of such a piece by one who owns a gold/silver website?

Think back for a moment to the TIMING of Moriarty and 5 other analysts' coordinated attack on silver back in May.  They were all PERFECTLY TIMED and released the exact day that silver was severely taken down as it threatened to cross $50 and take out all overhead resistance. 
The silver trolls' work coincided with 5 successive margin hikes which succeeded at inducing a silver correction.

Fast forward to today, where we have repeatedly stated that the $40-$41 level for silver is a MAJOR battleground, and a clear break-out above $41 will have silver quickly shooting back into the mid 40's, and back challenging $50 before Blythe knows what hit her.

Last week we saw 7-8 cartel raids thrown at silver.
Last night we saw Interactive Brokers raise silver margins above exchange requirements.
Today we see the re-emergence of the silver troll attacks. 

Think the cartel does not understand the importance of the $40-$41 level of silver?

Buy the FREAKING Dip (BTFD) and keep accumulating physical silver.

P.S. Sorry if this appeared rant like, which I'm sure it did.
This appears however to be more than simply a bad call by an analyst that I disagree with, but rather a continuation of coordinated attacks on silver investors to prevent a break-out of silver.