If you don't Silver Stack you will be left behind

Here's an article about how JP morgan with it's Comex has been buying up bargain silver lately, in order to corner the market, or tank it or something:
http://www.silverseek.com/article/jp-morgan-cornering-silver-bullion-market-14366

 

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I don't usually like this kind of article, but this one sounds plausible.

 

J P Morgan is a principal and manager of the SLV silver trust. Putting silver into the depository increases their holdings. Much is probably used to reduce their previous short holdings , which a little while ago the Bullion dealers/newletters, etc. were saying was evidence silver was going to 'GTTM'. Now they are using this to indicate similar GTTM. For JPM to increase their shares of SLV, they put silver in and claim shares. With shares they can short or go long or straddle. Sure they can control the direction silver is going more than a few stackers and bullion sellers, but they can because they use money to make money to buy silver whether we like it or not.

 

Please, that is not a serious article, it is nothing more than an advertisement/infomercial.

 

It may be, but it's interesting that they have so much silver. Meanwhile it's hard to figure out whether it's a good or bad idea to buy any more. JP Morgan seems to be all in. What they will do with it is another story. They may use it to suppress the value of silver because that will hold up their dollar denominated assets, or maybe they are just positioning themselves for a rise in silver's value. Hard to tell.

 

They don't have silver to try to corner the market, play with it, try to make it shinier or anything else. They have or hold the contracts on behalf of a client, they're a bullion bank and it's their business to do just that. I'll never understand why people can't grasp this concept.

 

Then they think it's going up. Why else would they accumulate so much physical silver?

 

More like they ( SLV principals ) think that the public thinks silver is going up due to many assorted factors, almost everyone being baseless for evidence,

If the 'word' is that silver is going up, many here would find it difficult to buy 100 oz, let alone 10,000 ounces. But many others ( gamblers ( day traders, etc.)~ those who buy and sell on 'inside info, charts, or gut feelings ) can use options on non-delivery contracts to control that amount of silver using fiat money. If they are correct, their profit will be multiple times the ones who buy the physical. If they are wrong, they lose fiat and play again, hoping the bullion sites/experts cause a run up. Even if they win or lose, SLV has to own the silver to back the number of options they manage through an exchange, so the principals will buy more or sell off excess physical, to meet the need. They make their money on the SLV commissions. Last year silver ( SLV) dropped badly, so JPM and SLV used shorts to make their money, this year, even with ups and down, SLV has a 1-2 % gain, so they buy more silver for long contracts.

I am sure they try to manipulate the direction, but the newsletters and PM hawkers do a good job, so like 'sports betting' they try to stay in the middle and play both sides, keeping the 'vig', other peoples money, for profit. Lots of profit! This is true for other precious metal trusts also, read their documents before investing if you decide such.

 

I like your read on it. They make money on both sides of the game. We had a little rally today. Silver is on the upswing again. Maybe...

 

You have received some good answers Revi. JPM is the market maker. Someone has to be. If not them, then maybe a hedge fund in the future will be it. As the market maker, they simply try to buy and sell, balance the market, and make money both ways. Without a market maker, a market is illiquid and of little use to anyone.

 

For the average investor not familiar with equities, precious metals are a good option. Like any investment, the tough part is figuring out where they bottom, so if you buy and it goes lower, buy more to lower your average price per ounce. The advantage that metals have over equities is that they will always retain intrinsic value. The disadvantage is that they pay no dividends and the holding time to reap a profit can be extensive.

 

As they say you should have some percentage in metals, some in real estate and some in potato chips. I really don't know, I just like the shiny.

 

The other problem with PM is physical security and the buy/sell spread. Both are additional costs that have to be overcome before an investor makes a profit. Even if you do not pay money to store them, you effectively are self insuring them and have a theoretical cost you bear each year.

Other investments have other risks as well like counterparty for financial instruments, evvironmental and legal for land, etc. Not trying to demean any of them, just listing potential downsides.

 

You're looking at it realistically, which is a great thing. This is why I always say: "Balance is key!"

 

I think of PM's as an insurance policy. I'm not going to cash them in until I need to do so. That day could come some time soon, but we're not there yet. If I don't have to it means that the economy is still giving me food and shelter. If it doesn't at some point, it's time to use them.

 

MCM being sold over is yet one more little sign Bullion is going back to 2006-07 Levels. We are seeing a weak dollar last few weeks over all last month or so and sure bullion is going up a bit but do not be fooled the FED will pump the Dollar in the near future and Bullion will slip back down. I am only picking up half pound to pound of silver a month, till 2006-07 levels are back. Please strong hands with your Bullion.

 

Not sure what you mean by 2006-2007 levels...in those years it wildly fluctuated between $9.00 to almost $16.00 which we had this year...

 

I think we are on a little upswing now. Up about a buck since Tuesday. What's up?

It's hard to tell what's going to happen, but this is a little encouragement to those of us who are still buying some silver.

 

Its a long term play. Now that prices are realistic inflation adjusted I am buying again and am happy to be able to. I am switching more to gold and platinum simply because I am running out of room in my sdb. I buy silver at times when dealers I know have it, but am not chasing it. Don't stress daily/weekly/monthly swings. budget out some money and simply buy some over time.

 

Exactly. I buy a little at a time, and it looks like last weeks prices were a buying opportunity. I really didn't know at the time, which was good because I was pretty much broke then.