Quantcast

#SilverSqueeze Underway?

The movement, should it succeed, would create true price discovery for silver...

(Clint Siegner, Money Metals News Service) The populist movement to punish Wall Street is turning its focus to silver.

The markets may finally force more honest price discovery. That would certainly be welcomed by metals investors long frustrated by concerns about price suppression.

Silver prices are pushed around by a handful of the world’s largest banks. The captured regulators and the Department of Justice (For the Well Connected) have done little to curb the cheating, despite piles of evidence.

The bullion banks, with their friends in government, seem to get away with coordinated take-downs of speculative longs who are daring enough to buy futures contracts or options.

...article continued below
- Advertisement -

It helped that the precious metals sector was ignored by a large portion of the investing public and that most people were inclined to believe exchanges, like the COMEX, are under proper oversight.

That has changed a lot, especially in the past year.

The 7.5 million members of the Reddit board Wall Street Bets are part of an honest money/anti-Wall Street movement which is building steam.

Last spring, investors bought record amounts of physical bullion. Sales of coins, rounds, and bars accelerated again in January. Demand went parabolic last Thursday when the call to buy silver began to go viral.

...article continued below
- Advertisement -

The movement, should it succeed, would create true price discovery for silver. The bullion bankers have capped prices by selling hundreds of ounces of paper silver for every ounce they have in physical bar form. About 8 firms, including some of the world’s largest banks, have a leveraged short position representing more than 400 million ounces.

They may be unable to deliver anywhere near that quantity if contract holders start demanding the metal. The idea is to force them to buy physical bars to meet delivery obligations. At that point, the jig is up.

However, it is critical that investors not try to beat the bullion bankers at their own game. People joining this movement should buy physical metal only and avoid futures or other derivatives purporting to represent silver.

The Hunt Brothers learned that lesson the hard way in 1980. They bought futures contracts and demanded delivery of every ounce.

When the banks couldn’t deliver, the COMEX and the regulators exercised the option that exists in the rules to force cash settlements of delivery obligations. They also disallowed new orders to buy. Only orders to sell were accepted. When only sellers were allowed in the “market,” prices collapsed.

The Hunts were vilified for trying to “corner the market,” but it was the banks and regulators who were bad actors.

The Wall Street Bets crowd is re-learning that lesson now as to Gamestop. Brokerages are limiting position sizes and buy orders.

If you are buying a conventional paper security on a Wall Street exchange, you are playing in a rigged casino and should not always expect to get a fair shake. This includes investors buying shares or options in the silver ETFs or in silver mining companies.

The good news is the campaign to break the bullion banks’ hold over the silver market can win, if investors buy physical metal instead. Buying physical bullion is not like buying shares of Gamestop where investors are subject to arbitrary and fast changing rules designed to protect the banks, hedge funds, and brokerages.

Shortage

Wall Street built the futures markets and other metals derivatives to capture and control the demand for precious metals.

Their system works so long as investors keep playing – believing the paper they buy actually represents some sort of claim on underlying physical metal.

The offtake of millions of ounces of silver as refiners and mints convert COMEX bars into retail bullion products combined with rising numbers of futures contract holders standing for delivery of bars could be a deadly combination.

Remember, the silver shorts are using extraordinary leverage. Hundreds of ounces have been sold for every ounce sitting in a vault.

As long as people focus on accumulating physical metal, there may not be much the bullion banks can do about it other than squeal…Original Source

Clint Siegner is a Director at Money Metals Exchange, a precious metals dealer recently named “Best in the USA” by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

- Advertisement -

TRENDING NOW

Tennesee Transgender Bathroom Law Allows Students to Sue Liberal Schools

(Headline USA) Tennessee lawmakers have passed a bill that would allow students who are forced to share a bathroom or locker room with a...

Police Officer Placed on Leave After NC Fatal Shooting

(Associated Press) A North Carolina deputy shot and killed a black man while executing a search warrant Wednesday, authorities said, spurring an outcry from...

Social Justice Warriors Sue DeSantis Over Anti-Rioting Law

(Associated Press) A social justice group has filed a lawsuit against Florida Gov. Ron DeSantis and others two days after the Republican signed a...

Simon & Schuster Rejects Employees’ Demands to Spike Mike Pence’s Book

Publishing company Simon & Schuster rejected demands to spike former vice president Mike Pence’s upcoming book after leftist employees began circulating a petition against...

AOC Reintroduces Green New Deal to Combat ‘Racial, Economic, Climate Injustice’

Rep. Alexandria Ocasio--Cortez, D-NY, reintroduced the Green New Deal this week as a bill to fundamentally transform the U.S. economy and promote “racial, economic,...

Black Activists Call for ‘Insane’ Boycott of Home Depot over Ga. Election Law

Georgia leaders representing more than 1,000 churches in the state encouraged leftists to boycott Home Depot, arguing the company didn’t denounce Georgia’s new election-integrity...

Mark McCloskey Considering Senate Run

Mark McCloskey, the St. Louis lawyer who rose to national prominence last summer after confronting Black Lives Matter rioters outside his home, said he...

BLM Rioters: ‘We Are Never Going To Be Satisfied’

Black Lives Matter rioters in Minneapolis and several other major cities continued to make their presence felt throughout American cities yesterday, even after the...

Minutes After Chauvin Verdict, Woke Mob Finds New Martyr in Knife-Wielding Ohio Teen

The fatal shooting of a knife-wielding black teenage girl by police in Columbus, Ohio, came within minutes of the verdict in George Floyd’s killing---resulting...
- Advertisement -