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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (24221)	1/8/2005 10:31:39 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

In the early 90's China, which at the time had an enormous silver stockpile, was approached by the Masters of the Universe (MoU) types with a "leasing plan" investmentrarities.com that was to be combined with a gradual sale and dehoarding program. It was a pricing cartel, that allowed China initially to orderly sell (as opposed to just dumping, a la Soviet Union) excess silver at non distress prices. Meanwhile, in an oh by the way, they could loan some to the MoUs for interest payments, so that the MoUs could engage in various financial paper carry trades (like buying more US debt) and other scams. This is similar to what happened in gold when the contango was much higher in the late 90's, but gold is a much bigger physical market, and when the MoUs were trapped, they got the European CBs to "bail them out" of the short squeeze, via the WAG agreement. Yeah, that's when the UK (and other apparatcheks) sold a bunch of gold at $275, and put it into interest bearing securities like US Treasuries. We all know how that has worked out, don't we? Message 20903262 My assumption is that at some point in this exercise, and as the Chinese silver dehoarding got into it's late stages, the MoUs got trapped in a loser. The reason for the trap is what I call the mentality of "synthetic economics" (). Also remember that silver gets used up in various economic uses. We also know how these MoU types pervasively operate (the Enron model) when they've been trapped in a bad trade. Yes, that's right they manipulate it, and try to hide it. If you read through the Butler material this comes through loud and clear. This story in fact is a great lesson for a lot of shit going down in the world of "finance". () The belief that resources always fall like deflationary manna from heaven, or that government cronies will come to the rescue with supplies from endless "stockpiles". That gives the MoUs the false notion (there's that friggin maladjustmwnr message again!)being short commodities and resources is always "OK". Oh how the world has changed.