Confiscation —both direct and indirect forms — and market manipulation tend to go hand in hand when it comes to forecasting the silver market’s future.
Furthermore, ongoing silver pricing issues include the overwhelming concentration of silver shorts, as bullion banks act like producers and push paper prices lower without ever being forced to deliver physical metal into a futures contract.
They try to keep their activities out of the media spotlight, with their claims of being safely hedged firmly entrenched in the minds of the mainstream investor.
Endless Investigations and QE Extensions
The seemingly endless CFTC investigation into silver market manipulation seems to be designed to do nothing while appearing to do something about the increasingly obvious covert market intervention.
In addition, extendinginflationary QE programs to infinity will have the long term effect of destroying currency savings and dwindling precious metal supplies. This means that there will be less and less physical silver available for future savers and investors with each passing day as investment demand surges.
As the house of fiat currency cards starts to fall and currency wars heat up, the eventual response to manipulation or downward price control will be a dramatic upward spike as silver prices return to fairer levels determined by supply and demand factors.
Questionable London Fixings and HFT Wash Trades
The CFTC is already discussing internally whether the daily fixing of the gold and silver price in London is open to manipulation.
Furthermore, The Wall Street Journal reported last Sunday that the CFTC is also investigating alleged wash trades by high-speed trading firms in future contracts tied to precious metals, oil, agricultural products and the Standard & Poor’s 500.
An illegal wash trade occurs when a concern executes a transaction against itself. This phenomenon is not to be confused with a “wash sale" that occurs when an investor sells a security at a loss but then purchases the same or a substantially similar security within 30 days of the original sale, thereby invalidating the tax deductibility of their loss.
Basically, more and more silver buyers seem to be emerging at each price dip. The stronger hands also increasingly seem to be the bullion banks themselves, who arereportedly covering their own profitable short positions and going long.
The CyprusCrisis and the Dual Wars
Currency markets were shocked earlier this week by the Cyprus banking event in Europe that threatened confiscation of as much as ten percent of savings accounts held in Cypriot banks in order to pay back some of the country’s increasing overwhelming sovereign debt.
The consolidated Euro currency gapped sharply downwards from last week’s 1.3074 close versus the U.S. Dollar as trading opened for the week when the forex market had a chance to react to the threat made over the weekend. The Euro managed to find support at the 1.2842 level after the highly controversial proposal was unanimously rejected by the Cypriot parliament.
It appears that fears of confiscation may well be coming true as the dual wars on savings and hard assets seem to be intensifying. Still, it seems worth asking oneself cui bono or who benefits from these wars?
Certainly those insidious wars do not benefit smaller savers and investors. Such people would seem wise to diverge from the mainstream investment community that has been deliberately lulled into a false sense of security by those who control the media.
Instead of being suckered into holding intrinsically worthless paper assets, amore intelligent and well-informed response favors increasingone’spersonal stockpile of physical precious metals. This strategy has historically proven useful as a means of preserving wealth through a wideningfinancial crisis that simply cannot be fixed with bailout Band-Aids.
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