manipulating precious metals without owning actual precious metals

This is your interpretation, not mine. I said nothing about conspiracies. I only asked this question which I will restate again lest it get lost in all the noise.

So the price of silver, in the last 3 years has ranged from ~$17 to ~$50 and then back to the upper $20s. If the market is providing true price discovery how can these wild swings in price be explained? Certainly it isn't by demand and supply issues because this represents a swing in price closing in on 200% in an economy that hasn't gone anywhere during that same period. ​

It seems simple enough and I don't see how it's confusing to anyone what was asked. The question wasn't even directed at you so if you don't know the answer, then I don't care. You already said in this topic that don't trade futures, are not interested in futures and have no interest in learning the technical details about futures market language. So given this, I have no expectations that you would or even could come up with a reasonable answer. I only request that you stop directing insults towards me.

 

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I answered you in post #99 and anyone interested can read it. The answer has nothing to do with futures. It's just the way markets work and have always worked. But I'm sure you will pretend this isn't sufficient because nothing that anyone says to you will ever be sufficient. That's the game you play.

 

If you did in fact talk to the VP of the CME Group, I'm afraid you didn't gain much from the experience since you came here and told us all how silver trades on the CME and implied that you can take physical delivery in Chicago. You post is quoted below.

Given this incorrect information I then, as a courtesy, informed the forum that gold and silver are not traded on the CME as you stated here. It is traded on the Comex in NY. I clearly stated that the CME Group owns both.

Whether you know anything about commodities or not holds no interest with me, so I'd really wish you would stop directing these sorts of posts towards me.

 

As my colleagues here will find out, I do not discuss my experience, strategy, or intentions. I DO, however, read a lot of testimony presented to Congress, and the committee reports that result, as well as the blogs of various firebrands and malcontents; most contain a grain of truth somewhere, sometimes an entire nugget.

I worked for a profligate, corrupt agency, and finally woke up and retired on the very first day I was eligible, despite good money. My degree and graduate work are both in economics. I will watch for credible evidence of market manipulation and post blogs or reports here for the skeptics to attack. I predict that by July 1, 2014, neither GLD or SLV will exist, having been bankrupted, liquidated under court order, or simply disappearing due to a business model that's no longer feasible. We'll see.

I said I could visualize plausible arguments for SLV (especially) going up or down, but I wouldn't dream of investing in the "upside" leg.

 

No pretense from me. You are certainly entitled to such an opinion just as you are entitled to your opinion that markets are not manipulated. Do I consider this proof? No, but that shouldn't matter to you given what you have said.

 

It might be a good idea to start a separate thread to post your research so those of us interested in it can follow your work. Otherwise it might get lost with all the other stuff posted here.

 

I thank you very much for your opinion too.

 

The burden of proof that markets are manipulated lies with those who claim it. Volitility is not proof, as I have demonstrated with examples. I'm sure you are aware that it's tough to prove a negative [that markets are not manipulated] so instead of making claims, you should support your position with solid evidence.

 

This is a good approach and one I support. There is never any reason to drag a person's "qualifications" and credibility into play when having a discussion on the issues of bullion investing. It's the content they post and not who they are and what they have done that matters.

 

I completely agree with this statement. However proof that something exists does not require a direct observation of that something. Proof can be an observation of effects of that something. For example, they have discovered planets that can't be directly observed but they know they are there due to their effects which can be observed.

This is why I asked the question that I asked. If the market was behaving as a true commodity pricing mechanism for silver, yet there doesn't seem to be any shortage of silver and demand is pretty static, then there should not be wild price swings as we have been seeing. If there is an explanation for this, beyond "markets just work this way", that isn't some sort of manipulation, then it should be easy to state. Else it sounds like the excuse the Church gave for imprisoning Galileo for life for stating that the planets orbited the sun and not the earth.

Of course there is another explanation. That would be that silver is not really a simple commodity and in fact is more importantly a monetary security. It doesn't trade with the same rules that apply to real commodities like hog jowls on the CME and instead has properties closer to that of a currency. This would also fit in with the fact that it trades on it's own unique exchange, the Comex, which has it own unique rules, where just two other items trade one them being gold. Amazing this unique exchange for just 3 metals considering the many hundreds of other commodities out there. if one accepts this, then all the thinking about silver mines, industrial demand, corn on the CME, etc are really irrelevant.

 

If you or anyone is concerned about price fixing in any market, why would they invest there, or stay there; with this doubt? It appears this thread is a mind game of one ups-man ship rather than anything else. I probably just put a target on my back by saying so. :>)

 

Yeah, its just a real peeing contest.

On that note, Happy July 4th to everyone for those lucky enough to be able to get away from work for the holiday.

 

Every one of these manipulation threads is the same thing by the same posters. It just gets hashed out, then rehashed over and over and finally everyone of the combatants leaves it alone until next week when somebody new brings it up, then it's a "here we go again" groundhog day event.

In the end I've yet to see any concession given by either side, just the same info over and over. It's as if a few want and need attention, and if they only get it from each other, they're fine with that.

If somebody could send me a pm when something new and exciting happens, I'd be greatful.

 

Easy answer: Despite the manipulation there is potential to make a lot of money in silver and gold.

Any investment is a risk. Risk is reduced when knowledge replaces bad assumptions, such as silver trading like corn on the Chicago commodities market. I don't see any issue at all with having these discussions as I think they provide value to those who are here who are actually interested in bullion investing.

I'm surprised that people would advocate for silence on the matter.

 

OK, how would one make a lot of money in silver and gold now?

 

You missed my point which was that it doesn't matter if it's manipulated up or down. What matters, and what cannot be disputed, is that the price is not accurate. If the price is being manipulated to the upside, I will be just as happy to see it go to $10/oz as I would to see it go to $100 as long as I can have confidence that it is a fair market. Price doesn't matter to me because I'm not selling. I have my silver and I'm just happy to have it, mission accomplished. Just because I believe it is manipulated to the downside doesn't mean that everyone has to, but everyone should know that putting faith in the current price discovery method is asking to get burned.

 

Nobody should, and if $20 is production cost at $27 then sure the price ought to be less. It's just that silver could still be $27, and if all of a sudden all the primary silver mines were opened the production cost would suddenly change. But yes, you have swayed me. It's just that production cost can change all by itself for a number of reasons, and just because it makes the case a certain way today doesn't mean it will tomorrow. If the price were suddenly at $50, and it were profitable to open those primary silver mines then the production cost might be justified at $50. If the available scrap supply was no longer able to meet the shortfall in demand from mining, production cost would be much higher. Is it prudent to wait until there is a full blown shortage to raise the price, or would it be wiser to heed the trend and preemptively raise prices to curb demand? You know what I think

 

I think we are getting closer. My only dispute would be regardless of market price cost of production is independent. What happens is cost of production changes most on energy prices assuming similar mines in operation. At times the mines may make a mint, but they need to since at other times they are losing money. All of them lose money for too long and mines start to close. This would take a year or more usually. Have high prices and high profits for too long and people look to open new mines. This takes longer, especially in countries like the US with myriads of environmental rules. I seriously doubt any new mine has opened yet in responses to silver first going over $30 an ounce. I am not saying they WILL, just saying it takes that long for new production to come online.

This is why I have always believed silver COULD go to $100 for short term, maybe a few years. At some point, though, economics will produce more competition in my view. This is assuming current energy prices. If oil went to $300 a barrel, I am not sure $100 an ounce silver is hugely profitable. Like I have said, thinking of PM as condensed oil is in many ways a good way to understand its underlying price structure.

Just my opinion.

Chris

 

Then participate. State your view, ask a question, disagree with a point.

You are right they are rehashed, I am not doubting that, but on this thread I believe I have added some real market information that many or most others do not have experience with.

Sorry if we bore you I guess.

 

Ahh so now you are interested in what we have to say here. My recommendation is to read through this topic then start a topic if you don't know enough about gold or silver to make some money. IMO, it would be off-topic here.