Silver prices

I'd advocate no margin on the buy or the sell side. Each contract is fully backed by real funds and fully represented by real goods. If market cornering is a worry, wouldn't position limits be sufficient? Leverage and fractional banking are what allow bubbles to happen. Without those things exuberance in either direction would be contained by the fact that your own assets or money are at risk. I see nothing wrong with speculating if you are on the hook for your decisions.

I guess I don't see why the market would be ultra low volume if there was a 1:1 ratio of commodity per paper contract. Real time transactions on a large scale would still take place, as you pointed out in another post things don't have to move to make the transaction happen. I'm just saying take the margin out of the equation and let market forces do the rest. In today's marketplace we have instant global communication. Removing leverage doesn't mean we'd have to go back to the early days where price discovery information relied on archaic transportation methods. The reasons leverage was needed in the first place are no longer relevant. Its primary purpose now is counterintuitive to the reason it was incepted.

 

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I don't think I could agree with that. Removing credit from the system would be a tremendous setback to the way markets operate. For example, it would prevent a farmer from hedging his crop because his ultimate buyer isn't the exchange and he doesn't want to deliver to them. You can probably think of a multitude of other situations where someone might want to buy or sell futures contracts without promising delivery. Leverage and credit in markets are not a problem. I think that the development and widespread use of derivative products [such as interest rate swaps] by banks and hedge funds have unnecessarily tainted the legitimate use of leverage.

 

Excellent distinctions I can get on board with for the most part. It's unfortunate that the good use and bad use of leverage are not separable at this juncture. While I can see how hedging makes it a lot easier for businesses to stay in business, I do still think that we could do away with hedging without any additional detriment beyond what would happen if derivatives were pulled from the scenario. As long as it's an even playing field, why can't we do away with leverage? The world got by without hedging for generations. I think the assumption that we have to keep doing things the way we have been should be questioned, because it isn't working properly any longer.

 

Hedging has been around for a very long time. So has credit and the use of leverage. You can't really do away with any of these and maintain a capitalist economy. You're moving into the realm of telling people what they can and can't do with their possessions, and history has shown that this doesn't work well. The way to stop the improper use is to stop bailing out the abusers, but that probably won't happen either. I believe at one time officers and owners of banks were personally liable for losses. Something like that would tighten up the ship.

 

And so would debtor prisons and child support courts.


BTW - silver will go up.

 

Here in NJ, EVERYTHING is illegal unless specifically permitted by state law, or if you buy a permit. So don't mention debtor prison. Someone in Trenton may be reading this. Remember, this is the state that had the egg police. <--- not joking.

I agree about silver.

 

Jersey is the wild wild west compared to NY, where smoking is a crime in a public plaza.

 

Both of your states are just bleeping nuts, but NYC is becoming a laughingstock of the nation. California may have to go extra crazy to beat legally proscribing the size of a soda.

 

That is easy to say when you don't have a 25 million person metro area deal with. Like crocadial dundee once said...8 million people, it must be a friendly place.

Smoking doesn't bother me outdoors. Its stopping in a subway door or on top of a staircase that should be a 30 day jail sentence. Also, drivers should not be allowed from Jersey.

 

So, you are saying that the size of your city, (and Mr. Bloomberg is not mayor to anywhere NEAR 25 million people sir), necessitates dictating the size of soda a restaurant may serve? I simply don't know how Mexico City and Tokyo, too far larger cities, have managed to keep their population under control without similar measures.

 

No - I don't and can't wait to get rid of him. I doubt these laws would pass a Supreme Court challenge if anyone wanted to take the time to actually pay for a challenge. There is though, a real need to regulate both the quality of food and sanitation of restaurants and food delivery operations.

 

I'm going to kill this because we are already violating the no politics rule and it didn't take long to happen.

 

I will stop too. It was my fault, not Ruben's Jim/Doug. I deserve the wrist slap.

 

BTW - silver will go up.

 

IDK, there is an excellent case to be made that with weaker industrial demand and lower oil PM has already factored in any European actions. I kind of see it a touch overpriced right now.

Yes, if Spain went down and Italy looked like they will follow suit there could be a short term pop, but the world is slowing down economically, India's currency is down making PM more expensive for them, and oil, the main driver of costs, is stable.

My view at least.

 

it is when the economy really heats up, that is when silver will skyrocker.

 

All things being equal, silver will go up, and it will go down. I give it a 50/50 chance that we touch down to the 2008 top of $21 before breaking to a new all time high. If not then I'd say the bottom came and went.