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<p>[QUOTE=&quot;Rono, post: 434558, member: 6492&quot;]Howdy folks,</p><p>&nbsp;</p><p>I think a couple of forces are at work.&nbsp; </p><p>&nbsp;</p><p>First of all the hedge funds are having to raise enormous amounts of cash to meet redemptions and to attempt to deleverage their musty hides from the derivative quagmire they find themselves.&nbsp; This means they&#039;re having to sell the family jewels, the kitchen sink, their first born and one of their kidneys.&nbsp; This includes gold and silver but particularly in security form.</p><p>&nbsp;</p><p>The paper or security price of gold and silver has been hammered while supply for physical bullion has shrunk if not disappeared completely.&nbsp; Note that the security price includes mining stocks, bullion ETF&#039;s, futures contracts, etc.&nbsp; - all the paper representations of bullion.</p><p>&nbsp;</p><p>However, while the &#039;paper price&#039; has dropped like a rock, all of a sudden there are real supply shortages all over for the individul retail customer (folks like you and I).&nbsp; The mint has halted sales of various products over the past couple of months, many of the major dealers have little or no stock of some items, people are scrambling to buy real hands-on physical bullion products - and having a tough time.</p><p>&nbsp;</p><p>We can probably assume that some of the smaller dealers are hesitant to &#039;buy high/sell low&#039; and really don&#039;t want to sell stuff they paid a lot more for.&nbsp; However, the major dealers have such enormous turnover that this doesn&#039;t really apply to them.&nbsp; </p><p>&nbsp;</p><p>Is the paper price artificially low?&nbsp; I don&#039;t know.&nbsp;&nbsp; However, I very clearly remember from Econ 101 and looking at various supply/demand curves, that the closest example to this present situation is when they impose price controls to keep the price artificially low.&nbsp; Whenver the prices are lower than people feel are correct - for any reason - they simply refuse to sell and the supply dries up.&nbsp; This is what we saw back in the 70&#039;s with the oil crisis.&nbsp; Once they imposed price controls, supply disappeared.&nbsp; This same thing happens when they impose rent controls - no supply.</p><p>&nbsp;</p><p>Right now the paper price is so low, there is no supply.</p><p>&nbsp;</p><p>go figure,</p><p>&nbsp;</p><p>rono[/QUOTE]</p><p><br /></p>

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