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<p>[QUOTE=&quot;coinbuff, post: 572305, member: 9564&quot;]Here&#039;s an interesting bit I copied from a Sovereign Society investment newsletter:</p><p>&nbsp;</p><p><font face="Arial">But its chief usage – by far – comes from industry and manufacturing.</font></p><p><font face="Arial">As such, GM – one of America’s largest manufacturers – is a relatively big player in the Palladium markets. In fact, according to the SEC filing, GM had roughly 104,000 troy ounces of the stuff just sitting around back in 2000.</font></p><p><font face="Arial">And this is where the story starts.</font></p><p><font face="Arial">You see, being GM, they were in a bit of a bind. They needed a little cash flow to open up some breathing room, and that Palladium stash started to draw the attention of the top brass. At market prices those days, that stockpile was worth over US$95 million dollars. A pretty penny back in the pre-bailout days.</font></p><p><font face="Arial">So they wanted to take advantage of that favorable price and sell off their huge pile of Palladium. But, of course, they had the stuff for a reason, and they’d eventually need to buy it back in the open markets.</font></p><p><font face="Arial">So on or around December 15th of 2000, they sold their Palladium to an investment bank while simultaneously entering into forward contracts under which they’d buy the Palladium back over the next six months.</font></p><p><font face="Arial">Go ahead and scratch your head. It’s not supposed to make sense just yet. Why were they selling it if they were just going to buy it back in the future? Were they just moving paper around?</font></p><p><font face="Arial">Absolutely not!</font></p><p><font face="Arial">You see, Palladium isn’t as popular as gold. As such, it’s not as &quot;liquid&quot; …meaning that the trading volume is much thinner, making it easier for a single player to move the whole market.</font></p><p><font face="Arial">And that’s exactly what GM’s 104,000-ounce sale did at the end of 2000:</font></p><p style="text-align: center"><p style="text-align: center"><b><font face="Arial">The Fix is In! GM’s Sale Moves the Market Into Steep Decline</font></b><b><font face="Arial"></font></b></p> <p style="text-align: center"><b><font face="Arial"><img src="http://www.sovereignsociety.com/Portals/0/brett/pallgraph.jpg" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /></font></b></p> </p><p><font face="Arial">As you can see in the chart above, GM’s sale roughly coincided with an all-time high in the price for Palladium. What effect did selling more than 100,000 ounces have on the market? Just take a look. It fell off like a rock.</font></p><p><font face="Arial">GM made a killing by buying back their stock at a discount over the next few months. A brilliant business maneuver on their part.</font></p><p><b><font face="Arial">So What Does This Mean For Me?</font></b></p><p><br /></p><p><font face="Arial">This should give you an idea of just how thin the trading volume can be in the “fringe metals” market for Palladium or even Platinum. And if a major industrial player – like GM, Ford or Chrysler – steps foot on the field, they can change the direction of the whole market in a single stroke.</font></p><p><font face="Arial">It’s worth noting that this filing was only released in 2009…when the actual trade took place almost a decade ago. So there’s a real lack of information when it comes to investing in markets like this. If you were bullish on Palladium before GM made the sale, then you could’ve been bushwhacked on your holdings and you wouldn’t even know why for almost a decade. </font></p><p><font face="Arial">So if you are investing in things like Palladium or Platinum, you should always do so with great caution and the expectation that much of the action will be driven by what goes on behind closed doors.</font></p><p><font face="Arial">However, on the flip side, this lesson is a powerful weapon. Major industrial players like GM and Chrysler – with their massive hoards of precious metals – are now facing potential bankruptcy and liquidation. </font></p><p><font face="Arial">And you’ve just seen what happens when a player like that dumps their holdings on the open exchange. So if you know a bankruptcy is coming, and you’re confident in your information, a short position on Palladium could end up being a real windfall.</font></p><p><font face="Arial">Also, as I mentioned above, being familiar with the <i><font face="Arial">uses</font></i> of these metals could give you an added edge. We know that Palladium is considered to be a crucial element in the cold fusion process, for example. So if some scientist has that “Eureka” moment and cold fusion becomes the wave of the future, palladium could soar. And knowing this crucial bit could get you in at the ground floor.</font></p><p><font face="Arial">Anyway you slice it, Palladium can be a dangerous market. As you can see, the information doesn’t always make the rounds, and that can make a market pretty danged inefficient. But, if you know who moves your market…and you know what you’re investing in (for example knowing that a Chrysler bankruptcy could drive Palladium prices down) then you’re already a cut above the rest. And often that’s all it takes.</font>[/QUOTE]</p><p><br /></p>

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