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An article to warm the cockles of Chainpin's heart - Silver price manipulation
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j p o
Apr 13, 12 10:19
Post #1 of 13
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An article to warm the cockles of Chainpin's heart - Silver price manipulation
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http://www.silverseek.com/...-silver-manipulation
While I do not fear the total collapse of world currency to the extent this guys does and don't think we will have a runaway metals market to the extent presented here. There is some very troubling information in here.
A lot of gold and silver has been "sold" over the last few years. I use sold loosely as the vast majority of people don't have physical possession of any metal.
Why is this a problem? Well from the articel:
"As I understand things, JP Morgan (and many other banks, but mostly JP Morgan) has many clients who want to be long silver, in the OTC or "Over The Counter" market and LBMA market, up to perhaps $100 billion to $200 billion worth of "silver" in "accounts". But JP Morgan (and other western banks) never went out and bought this silver in the first place, because there does not exist $100 billion to $200 billion worth of silver to buy in a world that produces and mines only about $6 billion (at $10/oz.) to $21 billion (at $30/oz) worth of silver per year. This puts JP Morgan (and other banks) in a natural short position, as they owe their clients 10-20 times more silver than the world produces annually."
Eppur si muove
Apr 13, 12 10:42
Post #2 of 13
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Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [j p o]
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Interesting what they identify as the cause of the problem: "The key reason why the London LBMA and OTC silver selling is so successful is that nobody ever asks for delivery of the silver, because there is a 20% tax on silver delivery in London."
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"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." --Benjamin Franklin
klehner
Apr 13, 12 10:47
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Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [Eppur si muove]
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Eppur si muove wrote:
Interesting what they identify as the cause of the problem: "The key reason why the London LBMA and OTC silver selling is so successful is that nobody ever asks for delivery of the silver, because there is a 20% tax on silver delivery in London."
I'm guessing there isn't any such tax on the delivery of oil, and oil sells at a volume an order of magnitude greater than world production, and thus most oil is not actually delivered, either.
Nobody asks for delivery of the silver, or the oil, or the gold, because it is speculation.
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Of course, with your ears stuffed with outrage cotton balls, all you heard was, rahrahra, govt comes to get your guns, rhahrahrah, stamp out your FREEEEEDOM! - slowguy
Eppur si muove
Apr 13, 12 10:57
Post #4 of 13
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Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [klehner]
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Nobody asks for delivery of the silver, or the oil, or the gold, because it is speculation.
Or because it is intended as an inflation hedge, which amounts to the same thing. Nevertheless, from JP Morgan's point of view, the existence of the tax gives them one more reason not to worry about the chickens coming home to roost.
I'll be interested in what CP has to say. He knows much more about such matters than I.
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"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." --Benjamin Franklin
(This post was
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j p o
Apr 13, 12 11:13
Post #5 of 13
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Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [Eppur si muove]
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This has become such a large issue because JPM holds such a huge position, and it is short so they have a definite incentive to artificially keep the price low. There is no analogous entity in the oil market.
There was a driveby murder of the silver price last April where the price fell 30% overnight. Many saw that as a distinct ast of market manipulation. But hard evidence on this kind of act is hard to piece together.
At the height of bank hatred there was a lot of people who said that if you really hate banks, buy an ounce of silver and take it home with you as a way to harm JPM.
MJuric
Apr 13, 12 11:27
Post #6 of 13
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Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [j p o]
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There was a driveby murder of the silver price last April where the price fell 30% overnight. Many saw that as a distinct ast of market manipulation. But hard evidence on this kind of act is hard to piece together.
I don't think this was "Hard to piece together at all". Wasn't there a margin increase for both Silver and Gold. IIRC this was done for silver and later for gold but to a lesser effect resulting in a lower price for both. IIRC this is relatively common practice for commodities.
It was without doubt "Market manipulation" but not necessarily uncommon market manipulation and certainly not unprecedented.
~Matt
j p o
Apr 13, 12 12:05
Post #7 of 13
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Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [MJuric]
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There was a margin increase, the price dropping from 48'ish to low 30's in a day or so was pretty harsh though. And more than a few saw this price plunge being driven by nefarious intent.
JPM denied they had a short position for a long time, then they admitted it, now they say they have it but they have areally good reason for it. But that reason lies somewhere outside of normal logic.
At any particular time I do not have a large stake in silver and usually it is a matter of a few hundred to a few thousand dollars worth. Most of the time I only own the silver I buy for a matter of days and usually hours. But I have to watch the price so I know what I can resell it for, so I find the topic interesting.
What I have found is that I know enough to know I don't know anything and should stay away from large long term metal investing.
AnthonyS
Apr 13, 12 20:41
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Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [j p o]
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This is why morons like me go to the actual gold and silver exchanges and pay a premium to hold the real thing. Paper silver and paper gold will be as worthless as paper home equity notes if the SHTF. I have enough money tied up in 401ks, I'm not about to bump those rates up either. I'll just keep buying actual silver and actual gold with my extra money. I may never need it in which case I will leave it to my family some day. But if I ever need it, I will have it too.
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You will remain the same person, before, during and after the race. So the result, no matter how important, will not define you. The journey is what matters. ~ Chrissie W.
tri_yoda
Apr 13, 12 21:13
Post #9 of 13
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Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [j p o]
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j p o wrote:
At any particular time I do not have a large stake in silver and usually it is a matter of a few hundred to a few thousand dollars worth. Most of the time I only own the silver I buy for a matter of days and usually hours. But I have to watch the price so I know what I can resell it for, so I find the topic interesting.
Do you ever take physical delivery of the silver you own? Trading paper is fine, but there is some security in actually holding precious metals. You have to ask yourself, why (especially in the case of silver), do you have to pay a 5-10% premium to the spot price in a lot of cases, just to actually be able to take delivery. One possibility of course is that this is just a way to take advantage of the "morons" who actually want to have physical possession of something they own. The other possibility is that there is actually something to theory that major institutions, led by JPM are short many billions of dollars of physical and therefore a lot of people who think they own PMs just own a promise from JPM. JPM could default on their promise, you can't default on silver bullion you own. Only time will tell.
j p o
Apr 16, 12 12:36
Post #10 of 13
(1038 views)
Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [tri_yoda]
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tri_yoda wrote:
j p o wrote:
At any particular time I do not have a large stake in silver and usually it is a matter of a few hundred to a few thousand dollars worth. Most of the time I only own the silver I buy for a matter of days and usually hours. But I have to watch the price so I know what I can resell it for, so I find the topic interesting.
Do you ever take physical delivery of the silver you own? Trading paper is fine, but there is some security in actually holding precious metals. You have to ask yourself, why (especially in the case of silver), do you have to pay a 5-10% premium to the spot price in a lot of cases, just to actually be able to take delivery. One possibility of course is that this is just a way to take advantage of the "morons" who actually want to have physical possession of something they own. The other possibility is that there is actually something to theory that major institutions, led by JPM are short many billions of dollars of physical and therefore a lot of people who think they own PMs just own a promise from JPM. JPM could default on their promise, you can't default on silver bullion you own. Only time will tell.
I always hold the silver I buy. I go to a lot of coin auctions. If the bulk coins sell for less than I can sell them for I buy them. It is kind of cool to carry around a couple pounds of silver.
xtremrun
Apr 16, 12 12:47
Post #11 of 13
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Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [j p o]
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Wonder why the secret service does not charge them? Like this guy.
http://www.myrtlebeachonline.com/...with-mail-fraud.html
tri_yoda
Apr 16, 12 18:34
Post #12 of 13
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Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [j p o]
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j p o wrote:
tri_yoda wrote:
j p o wrote:
At any particular time I do not have a large stake in silver and usually it is a matter of a few hundred to a few thousand dollars worth.
Most of the time I only own the silver
I buy for a matter of days and
usually hours
. But I have to watch the price so I know what I can resell it for, so I find the topic interesting.
Do you ever take physical delivery of the silver you own? Trading paper is fine, but there is some security in actually holding precious metals. You have to ask yourself, why (especially in the case of silver), do you have to pay a 5-10% premium to the spot price in a lot of cases, just to actually be able to take delivery. One possibility of course is that this is just a way to take advantage of the "morons" who actually want to have physical possession of something they own. The other possibility is that there is actually something to theory that major institutions, led by JPM are short many billions of dollars of physical and therefore a lot of people who think they own PMs just own a promise from JPM. JPM could default on their promise, you can't default on silver bullion you own. Only time will tell.
I always hold the silver I buy. I go to a lot of coin auctions. If the bulk coins sell for less than I can sell them for I buy them. It is kind of cool to carry around a couple pounds of silver.
I guess I am surprised that a lot of silver at auction sells for less than what a dealer will pay for it (which is usually within $1 per ounce of spot). Call me stupid, but I can't see why an auctioneer would set minimum bids that are lower than retail sale prices for what are effectively liquid investments. You can argue all day about the price of a painting or furniture, but at any given moment there is a market price for silver. So people hire an auctioneer to sell stuff for less (not to mention the commission) than they could get if they just walked into a pawn shop with it.
What state do you live in?
j p o
Apr 17, 12 6:45
Post #13 of 13
(969 views)
Re: An article to warm the cockles of Chainpin's heart - Silver price manipulation [tri_yoda]
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tri_yoda wrote:
j p o wrote:
tri_yoda wrote:
j p o wrote:
At any particular time I do not have a large stake in silver and usually it is a matter of a few hundred to a few thousand dollars worth.
Most of the time I only own the silver
I buy for a matter of days and
usually hours
. But I have to watch the price so I know what I can resell it for, so I find the topic interesting.
Do you ever take physical delivery of the silver you own? Trading paper is fine, but there is some security in actually holding precious metals. You have to ask yourself, why (especially in the case of silver), do you have to pay a 5-10% premium to the spot price in a lot of cases, just to actually be able to take delivery. One possibility of course is that this is just a way to take advantage of the "morons" who actually want to have physical possession of something they own. The other possibility is that there is actually something to theory that major institutions, led by JPM are short many billions of dollars of physical and therefore a lot of people who think they own PMs just own a promise from JPM. JPM could default on their promise, you can't default on silver bullion you own. Only time will tell.
I always hold the silver I buy. I go to a lot of coin auctions. If the bulk coins sell for less than I can sell them for I buy them. It is kind of cool to carry around a couple pounds of silver.
I guess I am surprised that a lot of silver at auction sells for less than what a dealer will pay for it (which is usually within $1 per ounce of spot). Call me stupid, but I can't see why an auctioneer would set minimum bids that are lower than retail sale prices for what are effectively liquid investments. You can argue all day about the price of a painting or furniture, but at any given moment there is a market price for silver. So people hire an auctioneer to sell stuff for less (not to mention the commission) than they could get if they just walked into a pawn shop with it.
What state do you live in?
Hey, it amazes me too. I live in central Ohio. Last batch I bought was about $25 face value at $17.50 per face dollar. I sold it a day later at $22.50.
One auction I went to I had to make two trips to the car because it wouldn't all fit in my backpack. I was buying rolls of quarters at $180 and sold them an hour later for $215.
It isn't necessarily the auctioneer's fault, it is the people putting it up for auction. On top of selling it at auction for less than they could otherwise sell it they give the auctioneer 10 - 20 %. So that $17.50 actually netted them about $14. Simple ignorance, I think, in not knowing the value and not knowing what it will sell for at auction.
But then you go to some auctions and people are paying over spot value. So you never know.
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