The Silver Bear Case Re Visited

Silver SLV\PSLV update 5/3/11

Submitted by: Francis Soyer

Over the last two days there have been numerous margin hikes for silver. This in my view is an act of desperation on behalf of the Fed Reserve which is in a state of controlled retreat into precious metals. Large commercial banks who are heavily short Silver going into OPEX for May and of course JPM who at this point has nothing to lose in shorting Silver naked in that they are already bankrupt from the losses from silvers rise since October (about a 100% return since then).

Seeing as dollar based assets which comprise just about everything EXCEPT precious metals and commodities will continue to lose value as the dollar continues it slide in the face of a U.S. default which is all but inevitable at this point Francis is using this as an opportunity to buy yes BUY More Silver. Simply put the fundementals of why Silver is a buy have not changed and Francis is happy to ride this out and add more in that this is not a sprint it is a 15 or so month marathon that only ends one way with Silver rediculously higher probably in the 150's low end and possible low 500's high end. Notice in the chart below over the last quarter there has only been three opportunities to buy at or near the VWAP (Volume weighted average Price)