Gold/silver paper smackdown coming?

Not so impossible. London is the only city in the world that allows banks to do infinite rehypothecation (re-loaning of the same asset to infinity to boost balance sheets even though there is only the one initial asset backing the whole thing). So if there's a one in a million chance somebody won't pay then there's a 1000% chance the counter party risk chain will cause a black hole requiring more infinite rehypothecation to fill it, because the only real assets they have are already highly leveraged as it is. If they have an operation in London then it's a pretty safe assumption they have counter party risk. That's where the AIG fraud stemmed from, Bear Stearns bets, MF Global bets, the list goes on. The ones who are technically bankrupt are the ones who are exposed to more risk than they have assets. That would essentially be all those which are too big to fail.

 

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Sounds reasonable. But you can't count on London banks being the only institutions with this "privilege."

Now, if your country's at risk, anything goes. We will see plenty of treachery and thievery before this is over.

 

http://www.silverdoctors.com/raid-9...per-silver-dumped-to-smash-silver-towards-30/

" 90 million ounces of paper silver were dumped on the market "

Nope, no manipulation by the paper pushers here...

 

Just curious, what good does such hyperbole do without a context to place it in? How many of these were new contracts to replaced expired ones? How many were for physcially back trucks or silver? Is it impossible to think the contracts might ever get renewed? Why don't these places report how many contracts the "cartel" retire each month and take OFF the market?

Maybe something is going on, but with a story talking about "cartels" and the like, and not placing such volumes into any kind of market specific context, I simply laugh iand ignore.

Sorry, I know it ticks people off when I dismiss these things, but without a framework of REAL DATA, such off the cuff reporting of selected data is truly meaningless.

Let me throw one at you. Let's say 5000 bushel of corn traded on the CME today. Is that good, bad, or indifferent? What about 40 loads of block cheese? How about 3 loads of butter? How about yada, yada, yada. Without knowing SPECIFICS on how a market woroks normally, what should we draw from this headline? What is provable/actionable?

 

car·tel
1. an international syndicate, combine, or trust formed especially to regulate prices and output in some field of business.

Cartel may not be the most palatable label, but it is most certainly accurate for the CME since that is precisely what they do. Not sure why there is the need to focus on labels anyway. They are irrelevant to the underlying nature of what they are describing, simply a method of reference, and an unnecessary distraction to make the subject of discussion. The nature determines the label, not the other way around. Of course if people need an excuse to ignore information they will find one no matter how illogical.

Focusing strictly on information and not semantics, Chinese markets are closed for the New Year holiday week so volume is light. It's a golden opportunity (pun intended) to impact gold and silver prices with lighter volume and one of the largest PM buying nations temporarily on the sidelines.

It is the timing that is more telling than anything else. Were this done when Chinese markets were open it would not have been as dramatic a selloff because of higher volume and more buyers. So whoever is selling chose to do it at a time when it would have the most impact.

Interestingly enough, stocks rose in parallel to silver dropping so it's apparent where the money went, and that it had nothing to do with physical metal. It's all about gaming confidence. Make silver look bad and stocks look good simultaneously at the most convenient time to have the greatest impact. If it gets below the psychological $30 then even better.

We should all be thankful we can still buy at $30 anyway. Once true supply and demand takes hold of price discovery there will be no going back.

 

I wasn't objecting really to the nomenclature, more relative trading volumes, whether other contracts expired, and these were simply replaceing them, whether physical silver deliveries into storage have been up, etc. You know, data to put the other data into context.

 

http://www.silverdoctors.com/200-mi...in-1-minute-friday-during-cartel-silver-raid/

"200 Million Ounces of Paper Silver Traded in 1 Minute Friday"

 

silverdoctors is as about as reliable a news source as FOX

 

Well, friday was Feb. expiration of options, so x number sold, same x number bought , Y number expired. No ounces of silver was harmed in this monthly dance. If they were so intelligent they should have said that, but since they want to create fear, they said what they said.