Silver Manipulation: Who Benefits?
Hi, it's Jeff here...thanks for the contribution. I thought I would go ahead and address this using this format...
Hello Dr Jeff & fellow reads.
I love silver and the promises / predictions that silver will reach $100, $150 or more is exciting. And, so what if this takes 5, 7 or 10 years: the longer the better because it gives me more time to buy more silver while I can afford it.
What puzzles me is, if there is so little silver (less than gold by some accounts) within our ability to economically mine and the uses for silver keep increasing in number, why is silver so cheap?
Yes, I understand that there has been suggestions that some big players have been using their considerable wealth to short the market and keep the prices down. But, wouldn't doing this cost them a fortune?They make a killing inducing longs into selling and buying back those positions at a profit. This has gone on for years. Who do you suppose steps in to buy when the market craters 10,20,30% out of no where, for no reason? The shorts may be trapped, but they are not stupid.
And, silver miners and the major silver investors (who would be financially missing out as a consequence) are not without considerable influence either.The miners depend on the bullion banks for financing - which is almost impossible to come by these days given that the entire sector is considered risky at best. Only a handful have had the 'where with all' (or cash flow) to speak out against the blatant manipulation.
So, presumably they didn't know about, couldn't do anything about it, or didn't want to do anything about it. This doesn't make sense.
Is it paper silver that kept the price down? 'Yes
Are these certificates, and the like, keeping the prices down by artificially increases the amount of available silver available for trading?Price discovery happens at the COMEX. The bullion banks make up (practically) the entire short side of the market
against a huge variety of longs. That's concentration and it's illegal.
The increase in available silver occurs by creating pretend, or paper, silver. Paper silver, along with shares in silver mining companies, provide the average investor with a range of alternative options for investing in, what might be loosely classed as silver related products. (Presumably, long after the world has run out of physical silver, people will be still investing in paper silver?) My point being that, if it wasn't for the paper silver, people wishing to invest in silver would have to invest in the much more limited physical silver; hence, the price of silver would better reflect the demand for silver.Yes, cheap silver has made it available for those of us who figured it out and went against the grain of poor sentiment all these years. Of course, a lot of people have known about this are gone now and that's a shame. Many more have become disillusioned by the counter-intuitive trading and have left, bitter, and resentful.
Chris Powell of GATA said it best...
...the manipulation of precious metals prices is a cosmic deception and fraud, and the great enabler of all sorts of vast evils -- from what U.S. Rep. Ron Paul has called "the welfare/warfare state" to the expropriation and grinding down of the working class and the developing world by the financial class, a vile national and class imperialism -- in the here and now. People are suffering and even dying every day all over the world because of this fraud, and no eventual profit to gold and silver investors can ever undo that.
If a large number of investors are investing in paper silver and it is this artificial increase in the amount of silver related products that is helping to keep the price down, then doesn't follow that all of these paper investors are, at least in part, participating in a form of price fixing?
Yes, indeed most derivatives are sham - silver or no - yet another reason to get out of paper denominated assets.