Just my own personal thoughts on silver and the un-easy market conditions.

Goldman Sachs was caught manipulating recently, but it was deemed "unintentional" so they only got a ~$50,000 fine. Legality appears to be selective, although whether or not the JPM silver short situation constitutes manipulation or concentration seems to be a matter of semantics.

On a side note, I just read this article that seems to indicate QE3 began today. Curious what you guys think as bonds are not my area of expertise.

http://www.zerohedge.com/article/epic-bond-rout-leads-biggest-weekly-surge-5-year-yield-history

 

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Just your own personal thoughts.............. I'd say it's just the plan facts!

 

An "Epic Bond Rout"? When the 5 year Treasury moves all the way up to a staggering 1.82%? This guy must not have seen many Bond Routs. BTW, I actually bought T-bills & bonds in the early 1980's, at yields from about 8.75 to 10.75%. That was after a very long, very serious, very real "Epic Bond Rout".

A great, great time to buy bonds. And of course gold, silver, oil, & real estate (in some areas) had totally crashed......

 

The title was based on one data snippet, which was the highest weekly raise in bond yields ever. It sounds like that didn't do a whole lot from a broader perspective, but the timing is interesting considering it was the day after QE2 ended.

 

I did see that big %-age move in the 5-year. I'm wondering if it isn't far more likely to have big %-age moves in T-bond prices & yields when interest rates are at such ridiculously low levels? The question if it happened b/c QE2 ended is a good one, but I'm not sure important it would be even if true. Personally, I think it might be healthier if interest rates rose to at least semi-normal levels.

cheers, woody

 

Nothing conspiratorial about your post at all. The situation is what it is.

When COMEX decided to crash the silver price recently, it was interesting to see how little the drop of the CME silver spot price had on the price individuals were, and still are, willing to pay for physical metals in real-time markets like eBay. While the silver spot price plummeted down to the low $30's, people were still paying over $41/$42 per physical ounce on eBay. It's adjusted a little further downward in recent weeks, but it seems that many understand the spot price is more reflective of the ETFs /paper silver. CME can manipulate the market all it wants, but from my understanding, in the end, their manipulations will only mean higher silver prices, as the market will correct the price to actually reflect the value of the metal and what people are actually willing to pay for it.

 

Good thread overall. Best I have read on this board concerning this topic.

To me, bottom line, the CME is a market where silver prices try to be found. Its their market, their rules, and you can ignore it if you like. This is not a legally created market, they can do what they like, how they like, and be used or not used however you feel. At this time, it is the market quoted for PM, but many commodities are like this. We buy commodities al of the time below or above CME market pricing if the market is not reflecting reality. This is normal practice. CME frequently has deficiencies and real traders know when the CME is too high, too low, or the real street price. Also remember the CME is only the US board for PM, there are other markets around the world too.

Bottom bottom line, its a market you can refer to or not, your choice.

 

I don't think that is the case. They still have to operate within the law, honor contract law, and not manipulate prices to defaud one class of customers in favor of another.

 

Silver Contracts

Most silver and gold paper contracts are legal side bets and do not reflect reality. I do know that physical silver is not readily available. I purchased 100 Silver Maples from the my local T.D. bank and the box they came in, had the initials, C.I.B.C, another Canadian bank, on the inside of the box they came in. This tells me that when orders are made there is a lot of stuff going on behind the scenes to fill orders. I had to wait 2 weeks to even place the order as everything was sold out.

 

Yes, I guess I meant more of the line of their rules and how they operate. They are a private market and change margins or anything they like. Yes, they have to honor UCC law, but many rules of the market are up to the market to determine.

Like I said, they are not the only market. If the CME was manipulating silver downward, why are the other markets in line with them? I would think if the CME was manipulating markets downward by $5, then London would always be $5 higher for silver prices. Are all of the world markets manipulating similarly? Bullion sellers aren't stupid, and if they always got $5 more in London they would ship the bullion there.

 

I would agree physical silver is tight. You have to ask yourself why though. Is industrial demand skyrocketing? No. Is production declining? No. What has changed? It is "investor" demand for coins and small bars. This demand has been climbing steadily for the last few years. The problem with this "demand" is that its not consuming silver like industry does, its more inventory than anything.

So, building inventory of investors who are driven in large part on psychology is the primary mover of this market. This is what worries me about long term stability of these prices. Short term I have no idea, but how long do you think these massive issues of ASE and similar bullion will be off the market? What will happen if investors find another hot idea and start selling these instead of buying?

Just a thought.

 

you could have easily bought junk US silver or bars or many other kinds of silver without waiting.
maples are a very nice coin and command a premium.