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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 451.89+1.9%4:00 PM EST

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To: TobagoJack who wrote (154608)3/18/2020 2:32:01 AM
From: sense  Read Replies (2) of 219618
 
Yeah. Same thing as what I was describing earlier re the physical silver market.

With electronics demand dead... there may well be a mountain of silver piling up at the mines or the refiners... but if it is there... and it isn't making it to the dealers...? The transmission mechanism also has to work for the "reality" to be made FUNCTIIONAL in the REAL market .

But, the difference is ? In a commodity sold to a user, physical delivery has to happen. In the derivative... it doesn't... its just an accounting entry. So what we see now... that's the system working the way it should... derivatives plummet because of the (assumed to exist) surplus... as physical surges because... the surplus isn't putting ounces into the market sufficient to meet demand that requires delivery.

Same thing as occurring in finance...

The transmission mechanism is different... not physical... but, if you can't deliver the benefit of a derivative position because the transmission mechanism is jammed... ?

The risk is not just banks insolvency... given innovations in glue since 2008 may allow Humpty to be put together again with relative ease.

But, if... the lack of lending "authority" in the changes that have been implemented... isn't just about "liquidity shortages" but instead about "the derivatives market is failing" ?

Derivatives give enormous power... You can use them to manipulate things with leverage... even making the "real" appear such a small portion of the total market that REAL fluctuations don't even impact prices... giving both "control" and an entirely artificial stability... which might seem a good thing... but, beyond being obvious as fraud... it also disrupts the markets ability to make adjustments to real changes in demand.

Silver is a TINY market... so, not that hard to manipulate with big quantities of "fake" inventory... but, it is also a market that is peopled with real people... who are pissed off at having their markets being being derivativized into irrelevance... If silver were ONLY an industrial commodity... probably the corporates would accept it and ignore it.... like the banks would tell them they must. But the sale of silver as a store of value... as alternative money... is a cottage industry... people by a lot of stubborn old cranks...

It's been 20+ years now... but Murphy's gonna win this one... "weeks to months"...

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