Naysayers and famous quotes from critics who just couldn't see possibility!

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NAYSAYERS PROVEN WRONG...

"Man  will never reach the moon regardless of all future scientific  advances."

--        Dr. Lee DeForest, "Father of Radio & Grandfather        of Television."

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"The  bomb will never go off. I speak as an expert in explosives."

  -        - Admiral William Leahy , US Atomic Bomb Project

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"There is no likelihood man can ever tap the power of the atom."

--        Robert Millikan, Nobel Prize in Physics, 1923

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"Computers in the future may weigh no more than 1.5 tons."

--        Popular Mechanics, forecasting the relentless march of science,        1949

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"I  think there is a world market for maybe five  computers."

--        Thomas Watson, chairman of IBM, 1943

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"I have traveled the length and breadth of this country and talked with the  best people, and I can assure you that data processing is a fad that won't last out the year."

-- The editor in charge of business books for Prentice Hall, 1957

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"But what is it good for?"

--        Engineer at the Advanced Computing Systems Division of IBM, 1968,        commenting on the microchip.

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"640K ought to be enough for anybody."

--        Bill Gates, 1981

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This 'telephone' has  too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us."  

--        Western Union internal memo, 1876.

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"The Wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?"

--        David Sarnoff's associates in response to his urgings for investment in the radio in the 1920s.

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"The concept is interesting and well-formed, but in order to earn better than a  'C', the idea must be feasible."

--        A Yale University management professor in response to Fred Smith's paper proposing reliable overnight delivery service. (Smith went on to found Federal Express Corp.)

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"I'm just glad it'll be Clark Gable who's falling on his face and not Gary Cooper."

-- Gary  Cooper on his decision not to take the leading role in "Gone With The Wind."

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"A cookie store is a bad idea. Besides, the market research reports say America likes crispy cookies, not soft and chewy cookies like you make."

--        Response to Debbi Fields' idea of starting Mrs. Fields'        Cookies.

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"We don't like their sound, and guitar music is on the way out,"

--        Decca Recording Co. rejecting the Beatles, 1962.

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"Heavier-than-air flying machines are impossible,"

--        Lord Kelvin, president, Royal Society, 1895.

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"If  I had thought about it, I wouldn't have done the experiment. The literature was full of examples that said you can't do        this,"

-        - Spencer Silver on the work that led to the unique adhesives for 3-M  "Post-It" Notepads .

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"Drill for oil? You mean drill into the ground to try and find oil? You're crazy,"

--        Drillers who Edwin L. Drake tried to enlist to his project to drill for  oil in 1859.

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"Stocks have reached what looks like a permanently high plateau."

--        Irving Fisher, Professor of Economics, Yale University , 1929.

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"Airplanes  are interesting toys but of no military value."

--        Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre        , France .

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"Everything  that can be invented has been invented."

--        Charles H. Duell, Commissioner, US Office of Patents, 1899.

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"The super computer is technologically impossible. It would take all of the water that flows over Niagara Falls to cool the heat generated by the number of  vacuum tubes required."

-- Professor  of Electrical Engineering, New York University

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"I  don't know what use any one could find for a machine that would make copies of documents. It certainly couldn't be a feasible business by itself."

--        the head of IBM, refusing to back the idea, forcing the inventor to found Xerox.

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"Louis  Pasteur's theory of germs is ridiculous fiction."

--        Pierre Pachet, Professor of Physiology at Toulouse , 1872

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"The abdomen, the chest, and the brain will forever be shut from the intrusion of the wise and humane surgeon."

--        Sir John Eric Ericksen, British surgeon, appointed Surgeon-Extraordinary to Queen Victoria 1873.

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And last but not least

"There is no reason anyone would want a computer in their  home."

--        Ken Olson, president, chairman and founder of Digital Equipment Corp.,  1977

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Is there slight of hand in the silver futures market? Should you own physical silver?

Image via WikipediaGold/Silver Futures Manipulation

by J.S. Kim, SmartknowledgeU.com newsletter

 

Earlier this month, I discussed gold/silver futures manipulation on the Max Keiser Report in the interview below:

JS Kim on the Max Keiser Report, Part I

JS Kim on the Max Keiser Report, Part II

In this interview, I discussed the explosion of gold and silver futures transactions in EFP (Exchange of Futures for Physical) and EFS (Exchange of Futures for Swaps) transactions. These two transactions comprised 98% of 99% of all daily transactions in the gold and silver futures market in New York during the month of May. Certain changes in commodities law in February and March of 2005 allowed for paper ETFs and even financial derivative or paper products that tracked the returns of gold and silver to be substituted for the "physical" part of this transaction. This means of course that the commodity regulators in the US, in an effort to keep the US dollar stable, had started to allow fraudulent paper contracts to be substituted for real physical gold and real physical silver in these transactions.

When GATA first uncovered this potential and likely fraud occuring in the futures markets, banker shills responded in online forums by saying that since EFP and EFS transactions were irrelevant because they constituted a very small percent of the total daily transactions in the futures markets. Thus, they concluded, it wouldn't even matter if gold and silver futures contracts were being exchanged for paper airplanes because in essence the volume of EFP and EFS transactions were much too small to impact liquidity and price discovery in the gold/silver futures markets in any kind of meaningful manner.

On Max Keiser's show, when I pointed out the fact that EFP and EFS transactions now comprised nearly 100% of all daily gold/silver futures transactions, I was attacked for making these statements from anonymous (i.e. cowardly) posters  that stated that again, these transactions were irrelevant because they were not true settlements as only true settlements in the futures markets occurred in cash or physical. 

However, this twisting of the facts I had presented was 100% wrong and disingenuous. Here's why. If the economic equivalent of the silver ETF, SLV, shares were exchanged in an EFP transaction for 50 long silver futures contracts, the owner of the SLV shares opens up 50 new long silver futures contracts, but the holder of the 50 long silver futures contracts, in ADDITION to receiving the SLV shares, also opens up 50 short silver futures contracts to offset his long position and effectively close out his long futures position. So the NET effect is that 50 NEW short silver futures contracts are opened with possibly nary a single ounce of REAL PHYSICAL SILVER exchanging hands. Ultimately, this exerts downward pressure on the silver futures prices, AND the silver futures market is robbed of a REAL transaction in REAL PHYSICAL SILVER that would have contributed to price discovery of a silver futures contract. 

To think about this another way, imagine that you could trade two shares of Netflix stock for every one share of Google stock instead of selling Netflix stock and receiving a cash payment. And imagine if 99% of all sales of Netflix stock consisted of Netflix for Google stock swaps. Now imagine that Google stock starts sinking and Netlflix launches a new product in the REAL WORLD that leads to a 50% boost in sales, but 99% of all transactions in Netflix still involve Netflix for Google swaps. Ultimately, the value of Netflix stock is going to be suppressed because these paper for paper swaps lead to no true price discovery of the value of Netflix stock and disregard information that is happening the real world regarding Netflix sales.  

While not a perfect analogy, it is a relevant analogy in that EFP and EFS transactions rob the silver and gold futures markets of real price discovery of how much one troy ounce of PHYSICAL gold should trade for and how much one troy ounce of PHYSICAL silver should also trade for. Furthermore, these EFP and EFS swaps allow the banksters to set prices for gold and silver in the futures markets that ABSOLUTELY DISREGARD the real time supply and demand for PHYSICAL GOLD and PHYSICAL SILVER that happens in the REAL WORLD. When you realize this, would you then consider the futures market to be a real market or a fraudulent market?  And that is precisely why nearly 100% of daily gold/silver futures transactions now consist of these privately negotiated transactions that contribute nothing to true price discovery. If bankers wanted to wield these paper for paper transactions as a weapon to prevent true price discovery of gold and silver, it certainly could be used for this purpose,  and this is precisely my point.   
 

According to the latest June COMEX physical inventory report, JP Morgan, though it owns eligible physical silver (NOT available to settle silver futures contracts), owns NOT ONE TROY OUNCE OF registered physical silver in the COMEX vaults that can be used to settle its short futures silver contracts. As far as I understand the purpose of the futures market, the regulators tell us that the purpose of the futures market is not to allow speculators to create gross distortions in the commodities market for their own personal windfall at the expense of the public, but to allow producers to hedge against rising and falling commodity prices in the free market. Since JP Morgan isn't a silver miner the last time I checked and they hold zero ounces of registered physical silver in the COMEX vaults, why are they even allowed to participate in the silver futures markets? Also realize that total COMEX silver dipped below 100M oz for the first time ever this week.  The fact that the inventory of physical silver that can be used to deliver against silver futures contracts in COMEX vaults is plummeting like a stone in the ocean should serve as a warning to anyone that owns paper gold and paper silver to IMMEDIATELY convert these paper contracts into REAL PHYSICAL GOLD AND SILVER before it is too late.

Lastly, I discuss the similarities of the bankster games when they took down silver from $50 a troy ounce to $33 a troy ounce to the bankster games that they inflicted upon the silver futures markets in 1980 when the Hunt Brothers tried to corner the silver market. Trust me, the price of silver in the REAL physical market, specifically in silver coins, never approached the $33 an ounce that banksters were setting in the futures markets. If you listen to my above interview, you will discover that the banksters used virtually the same blueprint they used to destroy the Hunt Brothers to inflict the same damage to PAPER silver prices this year as well. 

By understanding these bankster games, we at SmartKnowledgeU have been able to consistently outperform the gold/silver sector every year by a very significant margin.  That's not to see that are immune to volatility because if you invest in the gold & silver sector,  you WILL be subject to considerable volatility at times. However, knowing when to sell versus knowing when to be patient will be the difference between large gains at the end of the year or possibly large losses even if you are invested in the right assets. Since the launch of our Crisis Investment Opportunities newsletter in June, 2007, thus far, we have yielded positive returns every single year, and significant returns every year except in 2008, a year in which we ended up just very slightly positive. Still, from January 2008 to May 2011, our CIO newsletter has returned a cumulative yield of +136.84%, nearly doubling the +69.53% performance of #1 globally ranked John Paulson's Advantage Fund during the same investment period.  Right now, we are entering a period will gold and silver mining stocks will be bottoming and when great gains will be made in future years. Buying mining stocks at the right time WILL be the key to earning large profits in future years. 
 

Good investing, 

JS Kim

Managing Director

SmartKnowledgeU Pte. Limited


PS: You can follow Mr. Kim on Facebook and Twitter.

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Talison Lithium, the largest pure lithium producer in the world, is going public!

 In June I wrote about how the market for the electric metal (Lithium) was heating up and I highlighted five  junior lithium miners that stand to benefit from the coming "second leg" of the lithium Bull Market (Fall 2010)

Then in early July I told you about Salares Lithium and its Salares 7 project in the Atacama Desert of Chile, how vast their new holdings were, and how they might be a takeover target as this bull begins its second leg. It was my thought at the time that, because of an overstake of the Salares property by SQM (the largest brine producer in Chile) I believed that SQM might make some sort of offer for Salares.

However, within days of that article in which I made Salares my conviction stock pick, Talison Lithium, a private company from Australia, swooped in on Salares and a merger was announced combining the raw holdings of the Salares 7 project in Chile with the Two producing plants that Talison operates in Australia to mostly supply the burgeoning Chinese market with Lithium. Talison is the largest supplier of the commodity to China at this writing, supplying 66% of Chinese demand.

On Sept 17th, that merger should be completed and the stock of a new company (TalisonLithium Ltd is going public) will launch on the TSE. This will be the largest, pure lithium company in the world and thus the new lithium ETFs will have no choice but to place it near the top of their basket of stocks in the lithium sector.

Salares shareholders (as of the merger announcement) will benefit to the tune of approx 98.2% as their shares will increase from the .62 at time trading was stopped, to approx $1.25 when the new company begins trading on the TSE in Sept. (2.81 shares of Salares for each share of the new entity, striking price between $3.50 and $4 returns over 1.25 to Salares Share holders).
However, this writer will be holding on to his shares of the public version of Talison Lithium, as it will have to be listed in the new Global X ETF recently announced on the NYSE and Lithium indexes which are popping up on the radar screens this year.  Lets face it, in any market, indexes and ETFs cannot afford to ignore the world leader, and in this case, it will be the worlds largest pure lithium play.
Talison operates two producing lithium plants at their Greenbushes operation in Australia. It  has 25 years of production under its belt, supplies 300 companies with lithium and lithium carbonate, including many in China where it is the largest offshore supplier into that market. In its latest announcement of the merger with Salares, Talison management advise they are on track to ramp up production by 100% by 2011 and have many more potential customers knocking on the door at this writing.
That 100% increase does not even include the Salares 7 project in Chile which it acquires from Salares Lithium but it appears there are big plans for that area as well.

Yes, I doubled my money on this trade, but I believe it will double again well before Christmas, and double again before spring.  Maybe sometime in 2012 I might think about selling this stock, then again, when you are on a rocket ship, it is a bit hard to jump off.
Here's to your retirefund.
HP
Electric Metals Market heating up 
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