TWENTY Times FACE Reached

What you missed is that the bullion banks ARE the speculators.

 

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Close, but I would say the bullion banks are the market makers instead of speculators. In every market like this there has to be someone "creating" the security. The security in this case is paper PM, which is much easier to deal with financially than physical paper. How does the market maker create the security? By SELLING the rights to the PM on the market. So, of course these bullion banks SELL PM's, if they didn't there would be nothing to trade. This is the exact same thing that happens with agricultural futures, stock futures, etc.

Have these entities gone too far? I don't know, but just wanted to let everyone know that "sales" by these entities are expected in the normal course of their business. Nowadays, without these sales there really wouldn't be a PM market at all, since physical delivery is too troublesome for most participants.

 

In every other market, a "market maker" is supposed to stand ready to buy or sell whatever it is they are making a market in. In the case of silver, the institutions you refer to apparently don't own the silver they are selling. Therefore, it is more proper to describe them as speculators than as market makers. But I'm watching to see how the CFTC sorts it out. My guess is that silver prices will go a lot higher once the short-side speculators masquerading as market makers are shaken out. If they somehow come up with the silver bullion, then you are correct. Time will tell.

 

That's the trouble with both banking and market makers. They make money by lending/trading more than they actually have and HOPE they can simply buy their way out of the debt. When they can't, they go crying to the Government to bail them out because the markets are collapsing. Guess who winds up holding the debt? Certainly not the ones who were making the huge profits.

 

The $50 price did not last very long, actually-- it was just a blip on the screen. The dealers I knew were buying like the price was $25. The best price I ever got selling it back in those days was 16X face, a couple of weeks before the peak.

 

It has been 30 years since the great silver meltdown of 1980. Not everything was melted, as evidenced by all the junk silver that is still available today. Also, in the ensuing 30 years, a lot more silver has been unearthed and come onto the market. Further, lots of silver items were being made during the '80s and '90s when the price was in the $4-$5 range. And Grandma might not have sold her silver tea set in 1980 for sentimental or other reasons, but her heirs in 2010 might not have such an attachment to it.