Friday, September 3, 2010
By Bix Weir: The silver market is one of those puzzles that continues to challenge our understanding of free market concepts because it is MASSIVELY volatile for such a stable supply/demand dynamic. When was the last time you heard of a gigantic silver discovery that would drastically increase the supply of silver? Or a new manufacturing technology that will replace the ever increasing demand for industrial silver? Let me save you some time...you have never heard of any drastic changes in the supply/demand equation. So why are silver prices so volatile when everything else related to physical silver isn't?
Taking a deep look at the details of COMEX silver trading can be very illuminating as to why but when you understand what is really going on... it is downright infuriating! I've put together a rare glimpse into what REALLY happens when buyers and sellers get together to make a market in silver on the COMEX. I hope you are sitting down because this covers just 5 MINUTES of a ordinary trading day.......read on
Given the decades of rampant manipulation of the precious metals markets on the “short” side of trading, it is more than ironic that as the U.S. CFTC (“Commodity Futures Trading Commission”) ponders restrictions on commodities markets, it has expressed the most public concern about “speculators” on the “long” side of investing.
This comes with HSBC sitting with the largest concentrated-position in the gold market in history (“short”), while JP Morgan sits with the largest concentrated-position in the history of the silver market (also “short”). Furthermore, these concentrations (in proportionate terms) are far larger than anything seen in the history of all commodities markets.
Nonetheless, we continue to hear endless rhetoric about “speculators” disrupting markets (especially the crude oil market) – through “competing” with the buyers who actually consume these commodities through their own operations. Such “disruptive speculation” is often referred to (disparagingly) as “hoarding”.....read on