Trump did tell you he wanted a weaker dollar. Today in Davos, Sec. Mnuchin quite literally praised the weaker dollar, which has led to a rout in the greenback — lower by 0.75% v the Euro, pushing the dollar index to new lows.
US Dollar burns after Mnuchin comments that indicates that Trump admin has abandoned strong Dollar policy. Dollar Index DXY plunges to lowest level since 2014. pic.twitter.com/zVG3KL97Yr
— Holger Zschaepitz (@Schuldensuehner) January 24, 2018
“Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters in Davos. The currency’s short term value is “not a concern of ours at all,” he said.
“Longer term, the strength of the dollar is a reflection of the strength of the U.S. economy and the fact that it is and will continue to be the primary currency in terms of the reserve currency,” he said.
The dollar is now at 3 year lows and I am keenly positioned in NUGT and EGO, ahead of this news. Obviously, I didn’t know Mnuchin would say these things, but I did suspect the dollar would continue to press lower. All you had to do was look at the trends and quit being such lazy ham and eggers.
To that end, if we’re going to get a run in precious metals, silver offers greater beta and it would be wise for anyone to gain exposure to this sector, often ridiculed as the red headed stepchild of gold.
I think silver has a strong chance at breaking out here and truly gaining some investor interest. I went long EXK this morning, in the $2.50s, looking for $4 or MOAR.
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Silver is a nobrainer. JPM cornered the market by taking clues from real men who like their shiny as doorstops. JPM warehouses overflowing with bars. This should be epic. Russia/China/Iran hoarding gold, JPM hoarding silver with much bigger potential.
https://tinyurl.com/ydadqtq2
I don’t see how knowing that there’s a JPM hoard necessarily helps silver — unless you know their intentions.
Exeter pyramid Jerry, Exeter pyramid (extra Kramer) with gold and silver as unadulterated monetary asset at the bottom of the pyramid. JPM, just as all the other banks, is loaded w/ trillions of interest rate derivatives which will go up in flames once (((they))) decide to ‘pull it’. There will be nothing left other than hard assets in one’s possession. KSA/Iran has the crude, China/Russia is backing their crude contracts w/ gold in their possession, JPM will back their contracts w/ silver in their warehouse. Silver is now a rare precious metal and has a much higher upside potential than gold. JPM will be the top dog here to go to with asset backed contracts. Nobody, let alone JPM, corners the silver market w/o planning on destroying their competition and making obscene profits in the process. JPM is not hoarding silver to keep the prices down and losing money. JPM is a predator and they will kill their rivals. Get in on it and use au/ag bars as doorstops in your cave.
Thanks for your thoughts on their plans. My only point was that a completed accumulation is not axiomatically bullish – while a not yet begun accumulation would be.
Counterintuitive magik trik. While one is focused on the right hand, the left hand is emptying his wallet. You completely missed the phyzz accumulation stage which begun with paper shit derivatives price smash down via Bear Stern massive paper short when silver was $35 way back when… Sleigh of hand. Weak hands unloaded their valuable silver into JPM’s lap in exchange for worthless (((confetti))) all the way down to $15. That’s how these deceiving snakes do it. With paper prices going up, the accumulation stage is nearly completed. Nazis, thinking like deceiving snakes, loaded up on the shiny stuff at the same time as the usual suspects did – at fire sale prices. The lower the price went, the more Nazis rejoiced and drank marxists’ favoured Louis Roederer Cristal and kosher Château Lafite Rothschild.
Thanks for the link, sarc.
TLDR: JPM **already** made their profits on the silver market, by shorting silver contracts on the way down to the current price, but they will have difficulty spiking the price back up.
Some follow-up thoughts (others read the link first):
In the short term, market manipulators can move a commodity’s prices down, no question. However, over a 7-year period, I don’t see how this is possible unless there was also a surplus (supply outstripping demand) of the stated commodity to start with. This goes double if you want to accumulate a large physical positon of that commodity.
Basic economics state that to unload that large position profitably, the market surplus would have to turn into a market shortage: either demand has to increase substantially or supply has to decrease. So let’s talk numbers.
According to the link, “With the publically disclosed 133 million ounces JPM holds in the COMEX warehouses, JPM’s total holdings are 675 million ounces at a minimum.” This is equal to ~4100 and ~21,000 metric tonnes. According to the USGS (https://minerals.usgs.gov/minerals/pubs/commodity/silver/ numbesr in metric tonnes),
US production 1100 (2016)
US consumption 7230 (2016)
NY COMEX storage 5600 (2016)
World production 27,000 (2016)
World reserves 570,000 (2016)
So you can see two things: JPM’s holdings are huge relative to consumption. This means it would take a long time to unload their silver, particularly if the latter (21,000) number is to be beliived. Secondly, JPM’s holdings are not that large compared to the world, which means that if a sudden increase in sliver demand appears, there is plenty of supply that can be brought on-line (even considering that much of the reserves are held by governements to back their currencies). So it is unlikely that JPM could simulataneously control/restrict supply while unloading their own physical silver.
Now some notes on demand. Looking at Jan-Aug 2017 (latest) USGS data, you can estimate US consumption (mining + imports – exports). This would indicate a 12% drop in consumption from 2106 to last year. Furthermore, Trump’s tariif on solar panel may increase *US* solar supply and silver demand, but it will cause a worldwide drop in silver (solar uses 5-10% of world-wide silver consumption).
Also, I am not claiming that JPM accumualted silver and will now lose money on their silver trade. Instead, they have already made money on the way down by shorting silver contracts (and holding some physical silver as a hedge). The profits on the short contracts will exceed any losses on the physical silver.
https://www.sprottmoney.com/blog/jpmorgans-imaginary-silver-hoard-is-explained-jeff-nielson.html (from 3 years ago when peopel thought silver would spike)
To be clear, I can see sliver hitting $19 and maybe even $20 (tax cut -> wage increase -> inflation), but we won’t see the 2010-2011 spike anytime soon.
@number, laws of supply/demand and fundamentals do not apply in the most manipulated and rigged market which is silver. JPM is a market maker who breached its fiduciary duty and is engaging in criminal and illegal activity. JPM is using paper price and leverage to force DIS-hoarding of metal from weak hands to corner silver market. Nothing changed since the days of Blythe Masters. JPM cornered silver and will dictate the price, up or down, to extract maximun profit for JPM and its insiders. Time will tell.
Thanks for the link sarc
And rates up in defense. I guess Minutechin has no worries about the debt on which they’ve been shortening maturities on in the final fit of not-on-my-watchism before the fall of the Republic. Anyway, sold half my dollar puts on this dollar dump as it is occurring at what is perhaps the tail end?? of the post tax bill plunge. May the dollar could bounces a little here.
As peripheral economies deteriorate, higher rates will create global demand for USD that everybody is now dumping due to trade war fears and petroyuan impact on crude prices. Long-term (2Q), USD up, 10YTR down.
Im short gold and Ill be urinating down your spine. Just give it time.
Those that are long pretty charts deserve what they have coming
As long as the charts are higher, I’m in. Actually, the chart setups leave something to be desired.
I hope Munchin’ knows what he’s doing. Weaker dollar looks good short term tho.
I just hope that what Mnuchin is doing is what he *actually thinks* is best for the country, and not best for his personal fortune. However, the Swamp is strong in this administration, so I won’t hold my breath.
“I hope Munchin’ knows what he’s doing.” Based on his wife’s pic…