In The News Today

Jim Sinclair’s Commentary

Before silver is finished margins will be raised to cash. Volatility, thy name is silver.

CME Group Hiking Silver-Futures Margins By Another 11.6%
02 May 2011, 04:35 p.m.
By Kitco News

CME Group is hiking silver margins by another 11.6% after already hiking them twice last week, the exchange announced Monday afternoon.

The “initial” margin to open new speculative positions in the main 5,000-ounce silver-futures contract will rise to $16,200 from $14,513, according to a notice released by the exchange. The “maintenance” margin for exiting speculative positions, as well as both initial and maintenance margins for hedger positions, will rise to $12,000 from $10,750.

The changes will be effective after the close of business on Tuesday. Margins are also rising for Comex MiNY silver futures and E-mini silver futures.

The notice from CME Group, which operates the Comex division of the New York Mercantile Exchange, said the change is a part of the “normal review of market volatility to ensure adequate collateral coverage.”


Jim Sinclair’s Commentary

Without QE who will buy Treasury instruments in the amounts required due to the deficit?

U.S. Treasury: China Has Decreased Its Holdings of U.S. Debt
Friday, April 29, 2011
By Terence P. Jeffrey

( – Mainland China has decreased its holdings of U.S. Treasury securities since last October, according to a report updated today by the U.S. Treasury Department.

Since September 2008, when they eclipsed Japan, entities in mainland China have been the largest foreign owners of U.S. government debt. But, as indicated by the Treasury Department chart linked here, Chinese ownership of U.S. Treasury securities peaked in October 2010 and has declined in each of the four most recent months reported by the Treasury Department.

At the end of October 2010, China owned 1.1753 trillion in U.S. Treasury securities. That dropped to $1.1641 trillion by the end of November, $1.1601 trillion by the end of December, $1.1547 trillion by the end of January, and $1.1541 trillion by the end of February 2011.

February is the latest month for which the Treasury has estimated foreign holdings of U.S. debt.

Back in February 2001, according to historical data reported by the Treasury, the mainland Chinese owned only $63.7 billion in U.S. debt. In the ensuing decade, the Chinese massively increased their holdings of U.S. Treasury securities, and especially in the past five years. In February 2006, China owned $318.4 billion in U.S. debt and Japan owned $656.4 billion.


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