Anyone notice the short term lease rates for silver bullion went negative? This means that, if you are in a position to take advantage of it, that you get paid more than you borrowed.
Interesting indeed. I guess lowering margin requirements wasn't good enough to sucker more speculative longs into the silver market before they smack it down again. They'd better hurry up because once the Pan Asian Gold Exchange opens up in June the CME won't pull any weight in this market. http://silverdoctors.blogspot.com/2012/02/short-term-silver-lease-rates-go.html
So they lowered the margin requirements of silver? Gee, why weren't there 50 threads started about that and how they are killing the silver sellers, and its all a bunch of manipulation? So silver can be leveraged much more highly now? Meaning that people can bet a lot more money than they own that silver is going up? Sounds like manipulation to me, they had better have Congressional hearings.....
Don't get me wrong...I LOVE numismatic PMs. However, when I buy them it's almost always from stock returns...meaning, if you're young, don't waste your time with PMs...learn how to invest (not speculate...INVEST!!) in stocks. :thumb: OK...here's some advice my Father gave to me at an early age and I'll pass it along. Agree or disagree...makes no difference...it's simply advice. Dad said... 1. "If you can eliminate an expense, it's the same as a tax-free investment" 2. "Reduce your expenses and invest...until you save $1 for every $1 you spend" 3. "Once you are saving $1 for every $1 spent, you can then BEGIN to think about luxuries...such as a new car" NOTE: I was 40 when I bought my first new car. I'm 53 now...and very comfortable (Dad was right!...and I'm still driving the same car!) EDIT: I guess this is a bit "Off-Topic"...I apologize. Somehow the topic got me thinking about this. I hate to see young folks thinking of "bullion" as an investment. I guess it is...but not like stocks.
Maybe OT but sound advice nonetheless. Too many Americans live for today, but I am betting most of us on the bullion forums are exceptions to that rule. That is one thing, (and maybe only one), that we can all agree on.
Most likely. And before February 29th. That should confuse you even more :smile. (it requires a loooong explanation)
Probably because the price didn't budge in response to the margine decrease. That's a little different than a 10% drop in 10 minutes after a margin hike.
I am simply saying its curious how on this board not one word is ever mentioned when things that should be positive to prices are changed. Not once in the recent increase in silver have I heard anyone say anything about this. I would think for intellectual honesty those who post so vehemently about margin increases should post when they decline, and let others know that this could be a factor in the recent increases. Not saying you Inflexion, just a general comment to the board. It just seems price decreases is always the result of "the man" hosing people, but the opposite is never given as a reason why prices are increasing, people just assume price increases are a reinforcement of their idea silver should be much higher. Dangerous in my view if people only get investing ideas from here. Chris
I can only speak for myself and the reason I didn't post about it was because there was no price change. I expected at least some price uptick, but since that didn't happen it was mostly a non event. Silver still has the highest margin requirements of anything so this change doesn't really mean all that much. Last year there were a lot of speculative longs driving up the market to $49 so the margin hike was justified, but the level of the moves before and after $49 shed light on how price was not reflective of the actual market whether up or down. I think the fact that the speculative longs did not return to the market after this margin decrease means that the speculators have been burned and are styaing away so the CME did their job of stabilizing the market albeit only after allowing rampant speculation far longer than they should have which gave them the opportunity to scare people away from silver as an investment in the first place.
Fair enough post sir. Like I said, I was not directing the comment at you. Sorry if I post these warnings, I just seem to get frazzled by the general "its their fault I am not a millionaire holding my 100 ounces of silver" attitude of many posts. Leverage works both ways, and many refuse to accept that buying on margin is just as much a market manipulation as short selling, and much selling is needed simply to offset the margin buys on the other side. So many simply point to selling as proof "the man" is keeping them down, and postulate someday "the man" will be forced to give up and silver will be $1000 an ounce. Its much more complicated than that, and a lot of very smart people decide every day whether to sell on this market, and if the price truly was out of line with reality, WHY would the miners, (who employ soem very bright people), sell? If the CME is $34 but you KNOW its worth $100, shame on you for selling at $34, right? The miners aren't stupid. Anyway, sorry for rant. Chris
It's always "the market" on the way up and "the man" on the way down. "Overcoming manipulaiton" going up, "overwhelming manipulation" going down.
I think that the speculators have turned to other instruments such as stocks and Forex. Most investors are not one trick ponies. I wonder more why gold went from 1758 to 1778 within 20 minutes earlier and on high volume. Jim
It was a nice spike. It should be noted that lease rates for Gold have been negative, almost constantly for the last year. There were two very significant spikes (more negative) which the banksters used to knock down the price of gold in December. IMO the central banks should not be allowed to lease the people's gold for negative interest rates as the only reason for doing it is to suppress the gold prices. Despite this, it continues to go up. It appears they are going to try the same tactics on Silver now. ------------------- The reason the margin rates were dropped at the Comex because they lost a lot of customers over the MF Global scandle. People won't risk their business where their assets are no longer protected and nothing is being done when the assets are stolen. Banksters can't sell shorts if nobody is there.
I do agree with you that as long as buying on margin is part of the equation that we are going to see unusual market moves. And you are right that nobody was complaining when silver ran up too far too fast, but most everybody flipped out when it dropped. Granted the rise was notably much more gradual in comparison even though it was very fast by normal standards. Although for me personally the goal is not to be a millionairre, because I don't want my wealth denominated in currency that can be devalued. I want it denominated in silver, so lower prices mean I get to accumulate more wealth, and higher prices mean I don't get to buy as much
so if silver is going to take a hit...how big a hit will that be? and when? it's up right now almost to $35...