Re: CFTC to investigate silver manipulation by two or three U.S. banks
Leo Marx
>
> x-no-archive: yes
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> http://online.wsj.com/article/SB122231175151874367.html
> 'Wall Street Journal' (Sept. 25)
"The agency has long heard from frustrated silver investors."
Wa, Wa, Wa, my silver investments didn't pan out.
Must be fraud.
JAM
mazorj
"A" <aa...@att.net> wrote in message
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> x-no-archive: yes
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> http://online.wsj.com/article/SB122231175151874367.html
> 'Wall Street Journal' (Sept. 25)
Interesting that they didn't find naked puts, which would be a good
indicator of attempted market manipulation.
Does anyone know exactly what it is they're trading at the
stratospheric levels of the silver commodities markets? It's
certainly not junk coins or even significant amounts of bullion coins.
In the total market for silver, industrial and other non-numismatic
applications probably dwarf the demands of numismatists and small-time
hoarders. So I'm thinking it's bullion bars, and not in the form of
little 1-oz. jewelry ingots. Think of big 100-oz. bars to go into
vaults or factory furnaces.
The reason I ask is that there may be a disconnect between what we as
collectors and small hoarders are seeing in the discrepancy between
commodity prices and local availability, as opposed to worldwide
price/availability in the bigger markets, which presumably are a much
bigger force in setting commodity prices. There is a scenario that
might explain that disconnect.
Suppose that industrial and other non-numismatic demands have been
drifting down for some time - not unreasonable given the world
economy. That lowers commodity prices. So silver producers (miners
and refiners) react by cutting production. For a while, silver
becomes relatively more scarce but the overall market doesn't care
because its demand is still falling. However, we collectors and
hoarders are going in the opposite direction. We want more but
because we're only a small sliver of the market, we don't have enough
marketing demand to reverse the trend toward less production. Since
our needs are relatively modest in terms of total world demand, and we
want it in forms that are small potatoes in the overall markets -
coins and small bars - we "don't get no respect". World prices drop
even as we are experiencing a shortage of silver in the forms we want.
We suspect foul play, when it may just be that we're a niche market
that is going unsatisfied because we're running against the tide.
Theoretically, somebody should ramp up production to meet our
requirements but the effect of imperfect markets works both ways.
The only thing that connects us directly to the bigger world market
are the Mints, which also cannot get enough for their (i.e., our)
needs. Who knows, maybe overall demand has been steady or rising.
Maybe the mint demands and shortages are big enough that they alone
should have been pushing commodity pricing upward. So in order to
test this scenario, we'd need to know what the total world production
and consumption figures have been for silver, how quickly and cheaply
producers can ramp up production to meet increases in demand, and the
percentages that are consumed for numismatic and small hoarding needs.
If we're just a very tiny tail on a big, slow-moving dog, we can wag
all we want but the dog isn't going to pay us much attention.
This is more in the vein of a thought experiment than proven theory,
so all serious comments and critiques are welcome. Especially if they
have relevant data.
mazorj
down $2.09 to $10.19, with platinum and palladium not doing any
better. How do you make sense of a market where gold runs up to $924
in a few days and then plunges 8% - almost back to where it was - and
silver loses 17% as well? There are some really big market forces
churning out there. Collectors and small hoarders are just a tick on
the dog, along for the ride wherever it goes for reasons that have
nothing to do with our limited interest in coins and small amounts of
bullion.
"mazorj" <maz...@verizon.net> wrote in message
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>
> "A" <aa...@att.net> wrote in message
> news:c_6dnQN8A5caSnHV...@earthlink.com...
>> x-no-archive: yes
>>
>> http://online.wsj.com/article/SB122231175151874367.html
>> 'Wall Street Journal' (Sept. 25)
>
> Interesting that they didn't find naked puts, which would be a good
> indicator of attempted market manipulation.
...
> ...there may be a disconnect between what we as collectors and small
Leo Marx
>
> The monex.com ticker (noon Sunday) has gold down $73 to $851, silver
> down $2.09 to $10.19, with platinum and palladium not doing any
> better. How do you make sense of a market where gold runs up to $924
> in a few days and then plunges 8% - almost back to where it was - and
> silver loses 17% as well?
Profit taking.