I knew I shouldn’t have shorted SLV!
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Shorting silver in a plunging dollar market with gold on the move is almost as dumb as “going for it” on 4th and 2 on your own 28 , about two minutes to go and with the lead.

Heck, maybe it’s even more dumb. At least Belichick– with his multiple Lombardi Trophy mantle display– had an excuse to feel arrogant about his low-percentage play-calling. The silver bears, who were gold bears before that and stock bears before even that had no call to compound mistake after mistake by risking the last remnants of their capital on such an audacious call.

And now they are paying for it, or to be more incisive — paying me. [[AGQ]] which you recall I added when I heard that the “Reverse Lock” was shorting silver, is up another 1000 basis points this morning. I can’t imagine what that’s doing to the leveraged short ursines, but it’s gotta be something close to being drawn, quartered and then lightly salted/lightly peppered before being chucked on the grill, marbled T-bone style.

Amazingly, silver has decided to catch up to gold this morning, with an over one dollar move (price of silver is up $1.02 cents as I type this, or 5.9%) today, the silver to gold ratio now stands at a stunningly low 62x, down from 64x as of late last week.

Gee, I wonder if that move to rationality is going to continue (remember, gold is continuing to rise as well)?

You’ve seen this list before, but at the risk of boring you, go get ’em:

Silver Wheaton Corp. (USA) [[SLW]] [[PAAS]] [[EXK]] Silver Standard Resources Inc. (USA) [[SSRI]] [[CDE]] Hecla Mining Company [[HL]] And a new one I haven’t talked much about — [[SVM]] .

Don’t forget about the pure bullion plays either. [[SLV]] is one time and [[AGQ]] is two.

Happy hunting, and watch for pullbacks. We are parabolizing here, so I am talking off the rest of my call positions today.

Best to you all.
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Addendum: Platinum is another precious metal in “catch up” mode. I’ve banged the drum on [[PTM]] enough times that you should have at least a little. This should be a continuing move, here, however. I am also considering, but have not yet bot [[PAL]] , which is a dodgy stock even in the best of times.

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I did not go to 60% Cash.

That is all.

Carry on.

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Don’t Mind Me…
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I have already bot small amounts of [[EXK]] at $3.20 , Exeter Resource Corp. [[XRA]] at $5.56 and now Royal Gold, Inc. [[RGLD]] at $49.97 today…

Why?

Because that’s what I said I was going to do, no?

What the heck good is this blogging stuff if one doesn’t act on one’s own discipline?

It’s weurth (sic) nothing, that’s wot.

Note, we are over $1,000 in the price of gold.
Note, we are over $1,100 in the price of gold.

Note, we are in “breakout to the next level territory,” the next level not being close to here.

In other words, it has begun, my friends. Pullbacks should be taken as gifts, and silver under $20 an ounce should be bought.

[[CDE]] at these levels is a golden basket of twinkies from the Turkey Gods. Do not disdain that gift, heathens. 

Their wrath– once disdained — will bring stuffing from the sky, that will occlude your carbureutor (sic) and make you late for work.

I will take other requests, and other queries, but do not test my good humor. 

Just know this —  if you have not taken advantage of the Grandmother Gold Stock (RGLD) upon this retest of the breakout, you have no one to blame but your old dodge-ball coach.

He foolishly allowed you to take one too many to the bean.

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Be-ware!  Be-ware! Beware-Beware-Beware!

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What makes a bear run nekkid onto the piazaa you ask?   The promise of honey, mayhap?

Mayhap, rabbit… mayhap.

But you simply must ask, if only for the sake of  civilized conversation — what honey is available, Mr. Silver Urso?

I mean, the traditional price ratio between gold and silver has been in the 40x area in our “modern era”  (i.e., “Post-Rooseveltian gold grab, 1933.” )

This evening, with gold at $1,108/oz. and silver at $17.39, that ratio stands at a hamster’s whisper below 64x.

For those scoring at home, that’s a 60% premium to the historical ratio.  

Ironically, it appears shorting [[GDX]] is a better roll of the dice than shorting [[SLV]]  here.   Why you’d be cracked enough to short either, however, is a question for those better schooled in psychiatry than myself.  

I vote “secret death wish.”

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On seeing the Silver Bears in the Piazza this morning, I loaded a bit more [[AGQ]] — 400 shs at $60.55, bringing us within 600 shares of my longer term goal of 4k total.    First target on SLV is $18.08 and then $19.13 and then to the old highs at $20.66.   

Silver Wheaton Corp. (USA) [[SLW]] broke to post-crash highs today, and will run into congestion at $15.00, so be nimble here.

Looks like [[GLD]] is comfortable staying over $106.50 at least for now.   Whether we continue to break out, or will consolidate some here, will depend on that line, I believe.

On non-PM related topics, Jacksonian Long Term Hold Monsanto Company [[MON]] had a BTFO on the revelation that more of their universe-changing IP is being rolled out earlier than expected.  

Odd, no?  

Get Frankenfoods or go eat a frankfurter, hippies! 

I sold half my $70 strike November MON calls that I bot on the Bollinger Band crash trade back in the high 60’s a week or so back, and am holding the rest to dispense with on a follow-up tomorrow.    Or not, if none materializes.  

Also, [[BIOS]] continues to btfo, despite my having sold half my position in the high 7.90’s.   I will continue to hold as a result of this continued move.

Good luck, piazza pizza eaters.

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UPDATE:  Some fun facts for the healthcare debate crowd, courtesy of The National Center for Policy Analysis.

Enjoy!

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Daaaaaah-DOPE-di-dope-di-dope-dope-dope-dope-daaaaahhhhh…..
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Dateline Palo Alto — Sierra Club President Richard Cecil-Head, IV speaking from his Half Moon Bay headquarter today stated that “No efforts will be spared,” in seeking to preserve the shrinking populace of gold bears in the foothills of Palo Alto.

“Few people realize the boon to society these particular bears can provide,” stated Mr. Head.  

 “Leaving aside their propensity to keep their backyard pools clean of scree and pine dust– sometimes scrubbing them as many as three times a day– these bears also provide significant aesthetic value by selling into every downspike and even potential downspike in this secular bull market over the last nine years.”

“Do you realize how rare a commodity such perfect obtuseness is nature?  Darwin be damned – these knuckleheads must be preserved for the good of us all!”

Head is particularly concerned about the dead and dying bears being reported all up and down the California coast, especially those found with [[GDX]] -brand tire tracks across their furry backs.

“Please,”  Mr. Head told this reporter “Let’s get this story out there.   We cannot afford to lose this valuable animal to the ravages of rational market.”

(Rumours (sic) of Mr. Head’s large investments in physical gold were unconfirmed as of this column’s deadline.)

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Today I was busy, friends.

I sold a lot of phat calls that I owned since the last two dips today, mostly because they were getting long in the tooth (ie, “December strikes”).   I got rid of December GDX $39’s and $40’s at embarassing profits, all thanks and praise to the GDX shorts, once again.   I did similarly with December strike Silver Wheaton Corp. (USA) [[SLW]] calls that I held at $7.50 and $9.00 strikes.  

The profits were unseemly.  I shall not speak of them again, for fear of “colour” (sic).

I also sold 20 Allied Nevada Gold Corp. [[ANV]] December $7.50 calls for a nice mark up, and I hold another 20 I will likely boost tomorrow.   I still hold another 40 SLW and another 20 GDX December 40’s (listen, I had a ton, okay?) which I will likely get rid of for the one reason that time grows short on them.

The next dip I will be starting the process all over again, likely with the same robust names, as they have been “berry berry good to me,” Garret Morris-style.

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Please tell me you got some Royal Gold, Inc. [[RGLD]] over the last weeks and/or months?    It broke the fruits out today, and it’s in “I dunno WTF” territory now.

I would love for RGLD to return to the breakout area of $49.72 or so… I just don’t know that we’ll see it.    I will not sell this stock under $200,  and  I firmly believe it will be the Potash Corp./Saskatchewan (USA) [[POT]] and The Mosaic Company [[MOS]] of the “next” commodity bubble, which will be precious metal driven.

Don’t forget about [[PTM]] in all the gold and silver shuffle, either.  

  Sell some Silver Standard Resources Inc. (USA) [[SSRI]] if you have gains.  It’s a lagger, and I’m cutting back on it.   I think I shall replace it with Allied Nevada Gold Corp. [[ANV]] , on the Jacksonian Roster, fwiw.

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Last, there’s been a lot of back and forth this last weekend over the benificence of socialized medicine, care of Nan Pelosi, Scary Harry Reid and President Obama.   Putting all politics aside, know this — you cannot get something for nothing, and economics law will not self-suspend, even in the name of alleged altruism.

As I explained to a fellow blogger over the weekend, increased demand drives one of two things — higher prices or lack of supply, depending on whether prices are allowed to increase in a free market environment.

Increased participation in a market at a “zero price” (ie, gov’t paid health-care) will put a strain on our current supply of very expensive health care, even positing there is no exit by our  current providers.    If prices are not allowed to rise — or heaven forfend  they are cut — there will be massive “throwing in of the towel” by providers across the board.

Look for a  bifurcated system to arise, in that event, where the best providers that remain will “opt out” of any government — and likely many “governmentalized private” — insurance programs to serve those who can afford “club-based” gold plated care.  

Does anyone think that anybody but the Ted Kennedys and other such plutocrats who can join “the Club” will be happy with what remains for the masses?  

Dr. Fly cannot attend to everyone, you know.

Think hard, America.

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Thanks, L’il Buddy!
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As Fly may have already catechized, The Turkey Gods are all about “giving thanks and praise.”

So this month especially you must dig out the old acolyte’s robe, dust off the incense urn, and begin “lubricating the pipes” with a mixture of chamomile tea and castor oil to ready them for the proper Gregorian hymns and chants of the Season.

This year, a full First Rite ceremony of Turkey Carols and strong-bourboned wassailing will be reserved for the Blessing of the Lemmings — that annual bishop’s tradition whereupon all good Lemmings worldwide are blessed by the Turkey Gods for turning over the proceeds of their accounts to those more weurthy (sic), in the Gobblers’ Mercy.

That would be we of the Jacksonian bent, who have been blessed once again with said proceeds, thanks to an Oracle from the West, who has instructed his flock to proceed swiftly over the cliff of “Short [[GDX]] ,” much to our non-chagrin.

May he and his tribe prosper and multiply — in at least a more favorable rate than they have been proceeding over aforesaid White Cliffs of Dover.
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To add to this morning’s glorious GDX burst, we are coming Turkeygod-awful close to $1,100 on the price of gold. This is a psychological barrier, obviously, as the more technical resistance resides about $20 north of that line.

That said, should we burst through $1,100, we may get a Maypole Dancing psychotic celebration of short covering in the miners as a whole, in which case, you want to be owning some juniors for purse-snatch quick gains that will accrue.

I like Golden Star Resources Ltd. (USA) [[GSS]] again, but also Allied Nevada Gold Corp. [[ANV]] ,
Yamana Gold Inc. (USA) [[AUY]] ,
[[BAA]] ,
[[CDE]] ,
Eldorado Gold Corporation (USA) [[EGO]] ,
[[EXK]] ,
Eldorado Gold Corporation (USA) [[EGO]] ,
Hecla Mining Company [[HL]] IAMGOLD Corporation (USA) [[IAG]] ,
Ivanhoe Mines Ltd. (USA) [[IVN]] ,
NovaGold Resources Inc. (USA) [[NG]] ,
New Gold Inc. (USA) [[NGD]] ,
Northgate Minerals Corporation (USA) [[NXG]] ,
[[PAAS]] [[PTM]] (platinum WILL catch up!)
Rubicon Minerals Corp. (USA) [[RBY]] Silver Wheaton Corp. (USA) [[SLW]] Silver Standard Resources Inc. (USA) [[SSRI]] Exeter Resource Corp. [[XRA]] , and,
most important of all — Royal Gold, Inc. [[RGLD]] “The Grandmother Stock.”
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On other fronts, commodity plays Thompson Creek Metals Company, Inc. [[TC]] and Teck Cominco Limited (USA) [[TCK]] are doing well again, and The Andersons, Inc. [[ANDE]] looks like it may have at least temporarily arrested it’s fall.

Monsanto Company [[MON]] is finally working on that Bollinger Band crash trade from a week back, at over $70, and let’s not forget about le grand merde fan hedge — [[TBT]] .

Last, pinless hand grenade [[CVM]] is on the move again, don’t ask me why, ask the Turkey Gods.

Pax Vobiscum, Children of the Turkey.

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Thompson Creek Metals Company, Inc. [[TC]]

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