Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Of Silver Shortages and New Cartels

Commodities / Gold and Silver 2015 Jun 19, 2015 - 12:56 PM GMT

By: Dr_Jeff_Lewis

Commodities

Question from a fellow silver highwayman.  

“I don’t understand why the major silver producers don’t set their own prices - why let the brokers set the prices. If the producers stop selling forward contracts, this nonsense all stops.”

In other words, set up a cooperative that guarantees a price floor with the agreement that miners never sell production for less. The price is reset instantly. In essence, that’s what the speculators are doing in reverse with paper.


What would the producers say? Would they suddenly awaken?

This reminds me of another email I received that day. It was a response to an email from my Silver Investing E-Course about Nanosilver and the Food Industry. Here’s a quote from that piece:

“The amount of silver used in nanosilver-embedded products is very small, so it's unlikely that the food industry will become a major consumer, but silver's use in this area is expected to increase in coming years. Silver's use in food hygiene applications was estimated at fewer than one million ounces last year, and is expected to at least double in the next few years”.

Jeff:  What might happen, I wonder, when silver users realize there may be a shortage around a corner? If I were in charge, I’d be happy to buy and store for future use, a healthy store. One business only, say, buys a million ounces to protect his business. Now this business may be set for five years. And so does another, and another! And these businesses are all in the same industry! Other industry users realize that maybe, just maybe, there may be no silver to use. So they too start to stockpile.  These people alone might be strong enough to push prices way up, regardless of the ongoing manipulation.

Another thought:

Industry may usually only use a very small amount of silver for each individual application. I do not mind buying a small insurance policy to make sure that my business will continue to operate with the needed silver.

Yes, all it takes it one or two big players and the jig is up. 

All the major users use just in time inventory practices - so they have no clue about how dire things are. Maybe some will eventually retool or use a substitute, but not until we've moved back toward natural prices based on supply and demand, which will likely overshoot in a dramatic way. 

Of course, it's hard to see how a violent correction to the upside wouldn't send ripples across the entire financial derivative landscape. But then again, the formation of any counter cartel would be short-lived to say the least.

Can you imagine the ripples that would send through the halls of justice – applied, of course, through terrifying screams of litigation attorneys from the biggest financial institutions to have ever roamed the earth?

As much as I’d like to see these guys pay for their sins, the formation of a new producer carter - a “de Beers of Silver” - simply risks being viewed as another monopoly. Probably in that case commodity law would actually be (unevenly) applied and said producer would be busted for price rigging.

In essence, the price of all major commodities are determined by using paper or electronic derivatives traded by speculators who have nothing to do with production or consumption. Just another symptom from years of untethered finance and power consolidation.

All are rigged in this way - only silver much more so than them all.

Ultimately, they can’t set prices on their own; if that were the case, they’d be forming their own cartel.

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2015 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in