I know I have been accused of only posting inflammatory articles. Here is one I just saw from Coinflation that I thought was a very balanced, fair article. Yes, it could be that I think that because I agree with its conclusion, but I do think its more informative than most such articles. http://www.silverseek.com/article/end-silver-fix-nigh-13193
Though an interesting article, it avoids discussing the actual areas of manipulation. The London Fix is not and never was manipulation. All that this confirms is the banks want to keep PM's suppressed and feel that the London Fix was an obstacle to that.
Well many here have pointed to the "London Fix" as proof of manipulation. That is half the reason I post this article. The other half is the admission that doing certain things that some pm proponents have long advocated will increase the buy/sell spread, making life worst for miners and collectors. A ton of stuff done in the London Fix and on the CME is really for the benefit of pm buyers, though many/most do not realize it.
Interesting article. The comments were almost as entertaining. Something will be established to replace the fix - it almost has to or there will be problems establishing pricing. From another article on the same topic: The London Bullion Market Association (LBMA) said it had launched a consultation among market participants "to try and ensure that there is something that replaces the silver fix." "We don't have a lot of time until August 14," a spokesman said. "We will be talking to people who can help administer." The LBMA said it will approach miners and users of the benchmarks, regulators and potential administrators requesting feedback. So while the Fix is on its way out, they are already working to establish a replacement mechanism by August. Not sure how it will affect the bid/ask spread during the transition, but I dont think it will be much of a bump in the road, and I certainly do not believe it will be the catalyst for silver to shoot to $100 (or whatever).
As long as someone can sell massive 'paper' contracts with a keystroke that do not have to be backed by metal, the prices will continue to be manipulated.
The same can be said of buyers being able to buy hundreds of ounces that they have no ability to fully pay for. Thd leverage has always been just as much on the buying side as the selling side, but that could mean pm was manipulated to be too high a price, something most pm investors never wish to consider, right?
Well this last year someone in one trade dumped like 3 months of silver production in a single trade. True it works both ways but in stocks it is called naked short selling...in metals it is called normal.
No, naked short selling is selling actual or faked shares one doesn't possess or using the allowable time between selling and delivery to buy it back at lower prices making money or not being able to do so and face financial and legal penalties. If it was perfectly easy to do and escape consequences, everyone would do it. I would do it if legal! The futures market for commodities is more like the stock option market, which is nominally paper based, but is balanced, as the number of sell (put) options are balanced by the same number of buy ( call) options. If the future contract has not been paid as a 'deliver' contract, no physical metal changes hand. A 'deliver' contract is bought or sold at the amount X spot cost plus fees, so yes, someone could sell a huge amount of 'deliver' contracts, but someone else would have to buy such contracts, and there should be no effect. However if the popular press reports it as a massive selling of silver ( and not mentioning there was an offsetting massive buy) it appears different than it is. Yes, an accredited future trader could do illegal things, but again the penalties. To understand the futures market, you can not just go by this, you need to have a feed that shows all of the future contracts and the exchange. But many just believe their side of the story and only see BUYs or only SELLs. That makes them suckers either way. IMO
I think that the author of the article is right that there will be unintended consequences of ending the London fix, it seems that there are always unintended consequences to any so called reform, and none of them are ever responsible, for instance if a reform is made with the intention of benefiting consumers of a product, even if consumers are not benefitted or the reform actually makes things worse for consumers, there is never the option of admitting the misstake and going back to the old ways. I agree with the author that volatility will increase, the ironic thing is that those who think silver is manipulated will see that manipulation is in the eyes of the beholder, if you are a buyer, you want to see prices suppressed or as low as possible, if you are a seller you want to see prices higher, this reform seems to me to do both, if you are selling to the public you will be getting your higher prices, if you are buying from the public you will probably be able to buy for less, since in a volatile market that can swing wildly, buyers will not want to purchase your 100 ounce bar at anything that could be a loss for them two or three days down the line when they sell it. The spread will probaly be worse, thus making it harder for the smaller players to make any money, and they call it reform.
Thought I would give this thread a bump with the unveiling of the new silver benchmark today. See article below. It will be interesting to see how this plays out... http://www.nasdaq.com/article/concerns-remain-ahead-of-new-silver-benchmark-debut-20140814-00869
