silver price manipulation whistle blower assassination attempt

MrEnglish

Look what just happened to silver, this is on top of the last spike.


http://www.24hgold.com/english/Gold_silver_prices_charts.aspx?money=GBPound


Almost 13 pounds an oz


Happy days.

jim83

Honestly, I think the silver bugs are going to get hammered by buying into this manipulation thing. I have listened to many "smoking gun" podcasts and read plenty of articles, but not yet encountered any actual evidence that anything untoward has taken place.

Statements like this show that the people going nuts about all this don't really understand how the market actually operates.

This increase in notional value of silver derivatives represents approximately 220 million ounces, which is 125 percent of the global production of silver during the quarter -- and that is only the increase. The entire notional value represents 106 percent of annual global production.

As I understand it, (and I admit I have the intrinsic capacity to be completely wrong,) it is perfectly normal in the OTC derivative market for more paper to be traded than the physical commodity itself, because contracts are not extinguished when they are sold, they are extinguished at settlement.

If we have players in the market selling in a chain, a new contract is opened at each transaction. e.g. A > B > C > D -- in this scenario, there are 3 contracts open all claiming for all or some of the same lump of metal. If D were to take delivery, the chain would wind down back to A without anyone defaulting, but the overall market shows 3x as many liabilities as what actually exists.

This differs from how the futures market operates where contracts are extinguished when they are sold.



Note: I do own physical silver and if I were to sell today I would make a very handsome profit in a relatively short space of time (I was buying coins for well under spot price 2 years ago). But people are sinking their savings into the stuff, thinking that buying silver is a one-way bet and that they are outsmarting the best traders in the world. It isn't and they're not.

Oh, and £13/oz silver and £820/oz gold is not something to be cheering about, whether you own the stuff or not. High gold means failing economy/currency. It's certainly not "happy days". Cheering gold's rise is to cheer on creeping impoverishment of the world around you.

MrEnglish

Jim thanks for a good mature post. It makes a change from many on here. You say the raising price of silver and gold is not something to be happy about because they are crushing the markets. But why didnt people say that about house prices the last decade or so?

So you sound bearish with PMs? Do you see the price going down?

Or do you see this as a high, the end of the bull market?

Be careful what you say in the coming months I will quote you next to a graph

But seriously I am interested in your thoughts on the future of PMs?



It is funny watching other news commentaries on why gold is up today. Do you want to know why it is up today? Quite simply it is a bull market, that is why. Stage II of bull markets produce strong steady gains and that is exactly what we are seeing so it is no surprise to market veterans like Jim Sinclair, Eric Sprott, Richard Russell or John Hathaway to see new highs.
May 11, 2010

When you are bearish in a bull market life is tough and you miss many opportunities. You will be on the sidelines on days like today and it will leave you feeling sick. What do you do now? Do you start to buy now? The answer is that you should never lose your position in a bull market. They are sneaky and can run away from you in a heartbeat.

Gold is up over $30 today hitting $1,235.00 spot and silver is up 90 cents to $19.40 spot. Investors who have been patient and have not lost their positions are feeling redeemed. Somehow all of the suffering seems worth it on a day like today. For the bears, well they will just say that silver and the HUI have not confirmed...That may help them psychologically, but not on their P&L.

“Men who can be both right and sit tight are uncommon.”


http://www.thestreet.com/story/10753883/1/silver-price-manipulation-investigation-focused-on-jpmorgan-chase.html

MrEnglish

jim83 wrote: »

Honestly, I think the silver bugs are going to get hammered by buying into this manipulation thing. I have listened to many "smoking gun" podcasts and read plenty of articles, but not yet encountered any actual evidence that anything untoward has taken place.

Statements like this show that the people going nuts about all this don't really understand how the market actually operates.

As I understand it, (and I admit I have the intrinsic capacity to be completely wrong,) it is perfectly normal in the OTC derivative market for more paper to be traded than the physical commodity itself, because contracts are not extinguished when they are sold, they are extinguished at settlement.

If we have players in the market selling in a chain, a new contract is opened at each transaction. e.g. A > B > C > D -- in this scenario, there are 3 contracts open all claiming for all or some of the same lump of metal. If D were to take delivery, the chain would wind down back to A without anyone defaulting, but the overall market shows 3x as many liabilities as what actually exists.

This differs from how the futures market operates where contracts are extinguished when they are sold.



Note: I do own physical silver and if I were to sell today I would make a very handsome profit in a relatively short space of time (I was buying coins for well under spot price 2 years ago). But people are sinking their savings into the stuff, thinking that buying silver is a one-way bet and that they are outsmarting the best traders in the world. It isn't and they're not.

Oh, and £13/oz silver and £820/oz gold is not something to be cheering about, whether you own the stuff or not. High gold means failing economy/currency. It's certainly not "happy days". Cheering gold's rise is to cheer on creeping impoverishment of the world around you.

I remember the last time I talked about silver with you was a few months ago end of Feb the price taken down manipulated to less than 9.50 pounds an oz and I bought as much as I could. I said it will never be taken down this low ever again because there are shortages everywhere. And the price suppression was so obvious. Also talked my Dad into buying as much as he could.

Now the price is 13.50 an oz as I type this. I have over 10,000 oz now so thats 40 grand profit. Hard to believe but this is really happening and its got a long way to go. Its amazing how its going up, but they are doing everything they can to keep it off the front page. When the general public catches on its going to be a frenzy.

jim83

MrEnglish wrote: »

You say the raising price of silver and gold is not something to be happy about because they are crushing the markets. But why didnt people say that about house prices the last decade or so?

Many did say high house prices were bad for the economy, but it's really not the same thing. Over-inflated house prices were a cause of the ailing economy, but rising gold price is because of the ailing economy. The difference is that of cause and effect.

Gold doesn't rise without everything else going down the pan. To be happy about it rising is to be happy about the economy weakening and as much as I like gold, I'd rather live in a stable economy.

MrEnglish wrote: »

So you sound bearish with PMs? Do you see the price going down?

Or do you see this as a high, the end of the bull market?

On the contrary, I am confident that the nominal price of precious metals will continue to rise and I have a decent amount of the yellow stuff. I'm not cheering it on though and nominal price really does not matter.

MrEnglish wrote: »

But seriously I am interested in your thoughts on the future of PMs?

Gold is different to silver IMO.

Whilst gold's primary function is and has always been money, silver has evolved into being primarily an industrial metal. As far as I'm aware no country uses it as money any more and no central bank holds any meaningful amount of it. Big entities do not consider silver to be a hard currency (they hold gold), the only people that do appear to be amateur speculators.

If the world economy continues on its downward path and low interest rate policy continues in the USA, I think gold may gain value slightly due to big players looking for a safe haven. But in a rational world silver should track the broader commodities markets and possibly even lose value relative to real inflation as deleveraging continues and industrial demand falls. They are almost plays on opposing things.

However, the key phrase in the above paragraph is "in a rational world". Bubbles form in loose monetary environments and the amateur silver-buying community is rife with irrationality. A silver bubble could form if more of the lay community get sucked into the one-way-bet mentality and they have enough funds to sustain the market.

I do find it astonishing that so many complete novices seem to think they're outsmarting the best traders in the world by buying lumps of metal and hiding them under their bed.

MrEnglish wrote: »

I remember the last time I talked about silver with you was a few months ago end of Feb...

I think you're mistaken. As far as I'm aware, we've never spoken before. I have spotted you commenting on youtube videos though... eg. "20% VAT is great news for us silver investors, all our silver will be up another 2.5%" - which is rather silly.

purch

I have over 10,000 oz now so thats 40 grand profit

So it's pretty clear then.

You are only interested in Silver for a quick short term profit.

Your 'whining' about market manipulation is purely because you believe it is stopping you make a 'killing'.

You are no different from JP Morgan and all the others you accuse of 'manipulating' the market............just a spiv !!!!

Really2

MrEnglish wrote: »

I remember the last time I talked about silver with you was a few months ago end of Feb the price taken down manipulated to less than 9.50 pounds an oz and I bought as much as I could.

Now the price is 13.50 an oz as I type this. I have over 10,000 oz now so thats 40 grand profit.

You would have to have paid VAT on your 9.50 so I make that a £23,300 profit.

So you managed to buy £95,000 (well £111,625 after VAT) at near the bottom of the market.

How often do you take this "all in" "!!!!!! or bust" approach on investments.

harryhound

Does the speculator have to pay VAT on old silver coins; making collecting scrap silver a "boot sale" hobby?

Really2

harryhound wrote: »

Does the speculator have to pay VAT on old silver coins; making collecting scrap silver a "boot sale" hobby?

Depends on source they were purchasing from if, you were purchasing off other "boot sale" sellers it would be unlikely they were VAT registered.

But chances are you would pay over market price for items made in to something.

RDB

harryhound wrote: »

Does the speculator have to pay VAT on old silver coins; making collecting scrap silver a "boot sale" hobby?

Harry we have had this conversation on the other thread.

Yes there is VAT on any silver in the UK. But that is then the value of it if you sell the same day.

To buy 2nd hand silver (with no VAT) is the same price as buying new from a dealer and paying VAT.

Everyone moans about us countries that have to pay VAT on silver, but actually its an advantage.

As the silver price goes up it goes up with another 17.5% on top from what you bought it at.

Soon to be 20% VAT so thats why so many dealers are sold out in the UK, everyone with any sence is buying silver now at these very cheap prices.