16% of US Annual Silver Supply Just Vaporized

Paper markets would be fine if they were 100% backed by physical metal and did not have any margin allowed. It's not the paper that's the problem, it's the leverage.

Even in 1980 the Hunt Brothers did not corner the physical market. The CME changed the rules on the assumption that they were going to request delivery, but they never even got the chance. Had there not been leverage they would have had a lot tougher time buying so many contracts. It is the disconnect that paper markets allow via leverage that causes volatility.

 

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