I agree with you on the rest re the market..
But am rethinking linkages... as now think silver shares, maybe gold, could trade against the market for a while... and do very well on bad days. Also applies to bad days in bitcoin... which might see $ exit the trade looking for alternatives to digital gold... and find the best option is real gold... although silver is the more popular for now... and that might well be sustained... given the rapacious nature of the new crop of traders seems to have them prefer decapitating bankers whenever possible... and that's certainly possible in the silver trade now... in spite of their protestations that it cannot happen... I agree with others that the leverage in the silver market is on the order of 100:1 or greater...
They're playing fast and loose with the rules in the paper trade now... having, since the failures of the market in March 2020, declared an exchange for physical or EFP in London to be "as good as physical" in meeting the COMEX delivery shortfalls... Look at depth in trading on COMEX and you will see a massive share of "deliveries" are being conducted in London as EFP "delivery"... which is a fraud. The COMEX delivery requirement is for real physical metal... that is good for delivery meaning it has not other encumbrances... no other claims made against it... In the London market the EFP deliveries are being done on the secondary market... meaning when they say "it has been delivered"... they mean there is metal there in London, but we're not guaranteeing that there aren't other claims against it.
So really all they've done is convert the failure to deliver real metal in the Comex into a failure to deliver real metal in London... while leveraging the market that much more, over time, with additional rehypothecation.
The "solution" to not having silver to deliver... is to short more silver in London, and pretend it has been delivered there... instead of here. That will only work as long as investors in SLV continue to own shares of SLV while thinking there is real silver held in a vault for them... against each SLV share... instead of just an IOU written against metal that exists somewhere... that might have 120 IOUs written against it. The last burble in the metals market exposed exactly that happening in the inter-bank dealings... when a bank failure showed that the metal in the vaults was all claimed multiple times over...
They've already re-written the market rules... in violation of the law... to say there are no rules... they can do whatever they want to maintain "market stability"...
But, the key requirement for market stability... is markets that have a reason to be stable... and not markets that are directed, by arbitrary rule, to be stable on command, in opposition to the reality of supply and demand, when they cannot and should not be stable... at the wrong price.
Another meaning of "stable" market they way they're using it is "dead"... which requires only a recognition event to eliminate the illusion of animation where it is lacking...
I think the real risk to the dollar... is in the silver short being unwound... which might take down the entire global banking system... the entire edifice of fiat currencies... not just the dollar. Which also means they will be desperate to prevent it happening... but cannot stop it from happening... if investors continue buying silver in physical form only, instead of accepting their fake paper IOUs.
Or, they could surrender on the practice of fraud...
The obvious way out... is to let the price rise... let the ACTUAL market work... and let the chips fall where they may... when paper contracts for paper silver are forced to be settled in paper dollars... and the fraud is forced to come to an end, with fraudsters forced to admit the "silver in the vault" as a guarantee against SLV shares... was never really there... that event giving us real price discovery in the metals markets... while punishing the frauds... and making it profitable to mine metals again... instead of artificially transferring the value generated in that industry... to the bankers and their giant industrial clients... with fraud practiced in the futures markets.
Odds of that happening ? Almost totally dependent on the silver trade... and the impacts that occur when monetary demand rises to the level that industrial demand can't be met at the real price...
The awareness has been there a long time, from the Hunt Brothers trade to the post GATA crowd getting it...
But, doing something about it... when the regulators are corrupt and only help those practicing the fraud ?
Now is the first time since the Hunt Brothers... that there's been an obvious path, if not a plan, to solve the problem... in a way that avoids their ability to drown the solution in a sea of new paper...
Buy only physical... or PSLV... and mining shares... and ignore the BS paper prices and derivatives trades...
Noted today... the 3x long ETN was up 5%... at the same time the 3X short ETN was down 12%... ?
How does that work ?
On E-Bay... you can get 1000 ounce bars... the .999 fine for $31.50 per ounce... the .9999 fine for $35.50.
That's the real price of silver today... unless you can get physical delivery on a contract... which is silver at below market prices, being subsidized by the futures trade.
That's why big miners like CDE always lose money... why the share price is always shrinking over time... is that they lose the hedging game, on purpose... always ending up committed to filling industrial orders at below market prices... but as long the delivery for industry continues... and mining execs cash pay checks... there's no real pressure to change the structure of the scam. |
