Apparatntly, you weren't around in 1980 or weren't paying attention. The Hunts were buying silver futures contracts on the open market; i.e., in plain sight, and taking delivery. Perfectly legal. They weren't hiding anything. Inflation was going through the roof and they knew, as did almost anyone who cared to look, that there was a fundamental imbalance in the supply/demand of silver, so they started loading their boat in plain sight. Since when does that constitute "cornering the market", whatever that is. You've been reading too much Wall Street spin.
At some point between $2.00 and $50.00 (I've read in the teens and twenties) the major brokerage houses and bullion banks came to the conclusion that silver was way over-priced and took the other side of these trades; i.e., they went short. It doesn't take a genius to realize that at $50.00 silver, the big CFTC members (and their clients) in New York and Chicago were way underwater. Enter the CFTC. We're not talking about a simple change in margin requirements. That's chump change in this game. No, the CFTC literally changed the rules. They mandated that buy orders could only be made by someone who already held a position in the market. Anyone who was not already in the market could not buy silver futures contracts; however, they could SELL silver futures contracts. Guess what happened? Silver did what the CFTC wanted it to do and the only thing it could do under those trading rules; sold off, big time.
This blatant rip-off of the free market system was not lost on Warren Buffet. In case you weren't paying attention then either, Buffet bought his 130 million ozs very quietly from London and European exchanges. He knows a rigged market when he sees it, and wasn't about to make his purchases in a market the CFTC controls. |
