What happen to the Silver Market?

Love all the input and ideas. Turned out to be a highly interesting discussion. Thanks all!

 

Log in or Sign up to hide this ad.

Oh Good Grief. By harping on this point it is you who are trying to change the topic.

You were simply wrong with the point you made, i.e. gold is no different than any other metal because other metals have been used to mint currency. You missed the point completely that other metals have been very rare and valuable and furthermore missed the point of the metal being the object of value being traded. (your statement that governments don't do assays) I'm still not sure you understand it.

In any case, I'm not going to go back to ancient history and dig up the examples for you. It's not worth my time to give you complex histories that you won't take the time to look at and/or don't have an open enough mind to understand the context. Or if outright, proven wrong, you are simply silent.

 

So....no proof of your assertion about copper being more expensive than gold then? Also, no further comment on how you DID give only gold a primary function of money, and nothing else, which of course would mean only gold is money?

You are the master of changing the subject when demonstrably wrong. I was simply hoping that once, just once, you would actually admit your post was in error. Instead you twist it around like a pinata conveniently ignore being called on something.

I am wrong many times, and change my opinion over time. have both admitted here and documented my changing opinions based upon others input. I am open enough to accept others opinions, and not have to claim to be perfect and incapable of being incorrect.

Btw I never said government does not do assays. I was incorrect to say they ALWAYS make money striking coinage, I will modify that to say 99.9% of the time government earns seignorage, and the early US mint was an aberration. There, I admitted I misspoke, I am simply asking you to admit the same.

 

Business as usual with the CFTC and JP Morgan

Still want to say that silver is not manipulated? Seriously? This is almost criminal that they pull this crap, attempt to report until Jan 2012. That's akin to telling a crack addict to attempt to not do crack....sad

Here's the link for your enjoyment...

http://www.scribd.com/doc/67350783/Silver-Gorillas-CFTC-Etc-1

 

Sorry man, but "uncomfortable degree of accuracy" also means he was frequently wrong therefor could not prove his point, and waivers for reporting on new regulations are so common as to be nearly standard practice. I could give you tons of non-PM related examples.

I see no smoking gun, just another blog from a non-expert trying to convince you the world is out to get you, and by the way buy some PM from me before it becomes illegal.

If a third party who knows the normal financial dealings of a market maker in a large publicly traded market are, and how silver market makers markedly differ from them, and can point out specifics of illegalities and the manipulation, then I would listen. I have read these articles for decades and they always have the same tone, making the same errors in analysis, and the same conclusion.

Just my opinion.

Chris

 

It looks more and more to me like the CFTC is in the sack with Morgan. This smells of letting them get thier situation in order before they put the limits on and don't worry about the means you use to get there, as we won't be looking, just make it look like you're trying to report the info (wink, wink).

This doesn't really matter to me, as it just offered up another buying op for me to increase my stack at discounted prices. In fact if they drive it down to 20 I'd be fine with it as long as there is still physical inventory to buy.

 

I interpret 'uncomfortable degree of accuracy' differently, in that it was so spot on in advance that it was uncomfortable to see a market that can be predicted with such accuracy. The whistleblower they're referring to is Andrew MaGuire who I've mentioned here before. I don't see any new information in this link, or any evidence that wasn't already provided in the lawsuit. What I do see is a clear indication that after over a year the CFTC is very reluctant to do their job even after being given expanded authority to do so. If they want to keep the price down so I can keep buying for cheap it's no problem for me. They can't suppress the price forever, and I'll jump on every buying opportunity they throw my way. The fundamentals are rock solid and I don't mind waiting for the supply squeeze to rout them.

 

I agree that phrase could be read differently, but to make a big deal out of delayed implementation of major new reporting requirements simply ignores the fact these are more commonly delayed in implementation that implemented right away. That part is completely normal, but the writer makes it seems its some unusual, rare thing that has to mean a conspiracy against PM owners.

 

Hmm I see what you're saying. I don't know what the typical procedure is, and would agree that continuations are pretty common in general.

 

I don't think that putting something off again, that was supposed to be implemented over a year ago is anything to sneeze at. We should excuse that, after all they're trying to reverse direction with the Queen Mary in the Erie canal.

Again, they can beat it down to $15 for all I care, just another buying op for me.

 

I agree. I've read all of the usual editorial stuff regarding silver manipulation, but there is never any hard evidence.

 

Why is is called "manipulation" when the price of silver is going down, and "great investment plan" when the silver price is going up?

I've said numerious times on this forum that silver is a speculators metal and this is what happens with speculation.

 

And that is great for you then sir. I appreciated the post, I am simply pointing out some deficiencies in these blog posts from people who simply are uninformed and therefor make incorrect judgments. I can give you examples where reporting has been delayed several times, for years, and it was all considered normal. I would say a year or two delay in such far reaching changes in reporting is more common than not, and therefor the author either errored in his post, or intentionally misled by telling the reader there has to be something nefarious about it.

Simply stated, most of these bloggers either do not know what they are talking about when it comes to markets and tax practices, or they do but twist it for dramatization. That is my opinion overall.

If the prices are working out for you, I am glad for you and go for it man. I am happy for you. I simply post "contra" posts here to try to convince people to not form their whole opinion of the PM market solely on these types of posts.

 

I won't argue that paper silver is a speculator's asset, but why is this the case? At $30 silver with 1 Boz available (which is a generous estimate), one could buy the entire market with $30 billion. With paper silver leveraged in the area of 100 to 1 vs. the actual physical in existence, and short positions in existence to the tune of at least a couple billion even after how much they've unwound with this recent dip (arguably orchestrated for that very purpose) it makes sense why it is so easily moved. With hundreds of trillions in the derivatives market, it only takes a drop in the bucket to make big moves in silver.

I would agree that if manipulation is to be the word applied, that it goes in both directions. The point I would make is that the market is only able to be speculative because the price is so low. Eric Sprott and David Morgan correctly anticipated a $5 increase in the price of silver just by opening up the PSLV and buying up 20 million ounces of physical silver. There are quite a few billionairres nowadays who could suddenly decide to do the same if they lose faith in paper assets.

Once the physical market is squeezed (and it is noticably squeezed at today's prices compared to $40 silver) to the point of the CME price being irrelevant I highly doubt it will be at the mercy of such speculation. In the hypothetical case that precious metals were the only safe haven the price is nowhere anywhere close to where it would have to be for everybody to join the party. There's just not enough of it around, and would run out first unless the price went higher. Precious metals are created by exploding stars, and we can't make more of it. We can only make more paper.

 

It seems to be popping back up today- I wonder if this has legs.

 

Well I'd think if it doesn't have immediate legs, it'll get them soon enough. The big 4 shorts now have their short position wound down by the most since JPM took over Bear Stearns position, so they're going to do what they can to drive it up for their benefit. The real question is who's left to take it up with them after being fleeced a couple times in the last 6 months?

 

I wouldn't hold my breath in the short term. We've seen that anything can happen. Until fundamentals are the driving force we will likely see swings in both directions. Any additional downside would further drain existing supply and provide more longterm support to the upside. Although Clive Maund of silverseek.com who accurately predicted both the timing and the magnitude of the recent downturn is now very bullish on silver, but even if the short positions get flushed out that doesn't mean someone else won't come pick up the slack as long as they've got an abundance tax payer dollars flowing into their balance sheet.

 

I would. If a manufacturer uses silver in production, and the business model indicates that the company can meet its financial targets by locking in $30 silver for the next year, then hedging with paper silver to achieve the economic goal is in no way speculation.

 

This is a good example of how it can be used in a non-speculative manner, and how the paper market should be utilized. I find it hard to reconcile the recent moves (as well as the April-May moves up and down) if the cause is not due to speculation though, unless everybody was hedging in a similar manner and got flushed out when target price levels were broken which does make sense. What doesn't make sense is that it can happen over and over without traders wising up.

 

I don't know the answer. But prices are usually set at the margin and if a relatively small number of speculators get into financial trouble with margin or for other reasons, they will sell everything by necessity or through panic or planned loss controls. So the market cascades and takes out the speculators with pretty specatcular price drops -- even if most players using the market for legitimate physical hedging just sit and do nothing. The dumbest money sets the price.