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<p>[QUOTE=&quot;InfleXion, post: 1646230, member: 29012&quot;]You&#039;ve made half of my point. It&#039;s a bet, not a purchase. The fact that the price is impacted by bets means that the price action is skewed. Now I did not say silver was 50 times undervalued, I said it could be. It could be 50 times overvalued for that matter based strictly on what the paper price actually means. Although with a 50x diluted supply it stands to reason due to the laws of supply and demand that demand would also need the same boost to keep things even keel. If this mechanism allows for 50x leverage then it could be a wash, or it could be skewed by a magnitude of 2500. We have no idea because the price is not based on people who are buying and selling, but rather betting on whether it will go up or down.</p><p><br /></p><p>Now if it actually involved putting up 100% margin for a 100% physical backed contract then I would have no issue. At least then the bet is truly representative of the item being impacted, but allowing for leverage means people playing futures get more bets for the same price than a normal buyer. Allowing someone to buy something with money they don&#039;t have skews the price (artificial demand or artificial selling depending on the desire of the gambler). Allowing something to be sold in lieu of the actual item skews the price (diverted demand when buying or ownership not required when selling). Put aside the numbers for a moment, and it&#039;s obvious that this cannot be accurate.[/QUOTE]</p><p><br /></p>

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