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<p>[QUOTE=&quot;InfleXion, post: 1286324, member: 29012&quot;]The price of precious metals is set by the Chicago Mercantile Exchange which trades paper representations of gold, silver, and many other commodities. Adrian Douglas has stated in a courtroom that they leverage paper assets (certificates) to real existing metal in their vaults represented by that paper at a ratio of 45:1 or greater, and Bix Weir estimates it is over 100:1.&nbsp; </p><p><br /></p><p>While this has many potential impliciations, the one I would focus on here is that the volume of trading is significantly greater in paper, and thus the price is not a reflection of real life supply and demand dynamics for the physical metal. This means that the price can do a lot of things that don&#039;t make sense based on market fundamentals, and this will likely continue to be the case until position limits are fully enforced. At some point in the future the price must be set free, but until then we could very well see $20 silver. Any such drops would just squeeze the supply which means higher prices sooner than otherwise.[/QUOTE]</p><p><br /></p>

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