Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: regli who wrote (52620)	6/20/2006 11:58:12 AM
From: mishedlo	Read Replies (1) of 116555

Butler on Silver investmentrarities.com An email rebuttal from trotsky on Kitco. i've debated Butler endlessly on this in the past. what he overlooks is that many miners sell silver forward to the bullion banks. up to 10 years of forward sales exist out there. this is mainly by miners that have lots of by-product silver and want to have a fixed price for calculation purposes. iow, it is irrelevant to these positions how much silver there is in storage - the bullion banks use the COMEX contract to hedge away the the net long positions that they acquire as part of the forward sales deals with miners. that said, a part of the commercial position IS speculative in nature. i just don't think it is manipulative, except maybe in the very short term (short term market manipulation happens in ALL markets, not just silver). the large concentration ratio meanwhile is explained by the fact that there simply is only a handful of big bullion banks. many of the former players have chucked the business during the long bear market. IMO Trotsky has it correct and Butler is blowing smoke Mish

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