How the Silver Market is Manipulated
You all have read my position on silver and gold manipulation. But below, I am pasting an article that I believe really explains it well. You really need to read it.
For my overseas readers who speak English well enough, I recommend that you use the "TRANSLATE" button on the left in the options to translate this to your native language. The information is very detailed and can be a little confusing. I speak 3 languages and tested the translation. I recommend using my translation feature.
Also, this article is a bit in-depth, but I highly recommend that you take your time and read the entire article. It's not that long.
CYA: SE:
********************************************************************************
If
the entire world only produces 880,000,000 ounces of silver per
year...and if 75% of that silver is consumed through the production of
cell phones, solar panels and other items...then how do The Banks manage
price off of the remaining 220,000,000 ounces? The answer: Alchemy.
If
the entire world only produces 880,000,000 ounces of silver per
year...and if 75% of that silver is consumed through the production of
cell phones, solar panels and other items...then how do The Banks manage
price off of the remaining 220,000,000 ounces? The answer: Alchemy.
Now
take a look at the upper left of that chart back up above. Do you see
that, as of last Friday, total Comex silver open interest had grown to a
new ALLTIME high of 234,558 contracts?
Now
take a look at the upper left of that chart back up above. Do you see
that, as of last Friday, total Comex silver open interest had grown to a
new ALLTIME high of 234,558 contracts?
For my overseas readers who speak English well enough, I recommend that you use the "TRANSLATE" button on the left in the options to translate this to your native language. The information is very detailed and can be a little confusing. I speak 3 languages and tested the translation. I recommend using my translation feature.
Also, this article is a bit in-depth, but I highly recommend that you take your time and read the entire article. It's not that long.
CYA: SE:
********************************************************************************
Silver Price Management
Turd Ferguson
Turd Ferguson
If
the entire world only produces 880,000,000 ounces of silver per
year...and if 75% of that silver is consumed through the production of
cell phones, solar panels and other items...then how do The Banks manage
price off of the remaining 220,000,000 ounces? The answer: Alchemy.
Look, you likely already know how The Bullion Banks
alchemize gold in order to control price. After the failure of the US to
manage price in the 1950s and the failure of The London Gold Pool in
the 1960s, the alchemy of paper/digital "gold" was formalized with the
creation of Comex gold futures in 1975. If you need a refresher, perhaps
you should take a moment and read this: https://www.tfmetalsreport.com/blog/8075/42-years-fractional-reserve-alchemy
Today, we want to focus upon how The Banks and The
Comex alchemize silver. Like the alchemy of gold, the alchemy of
paper/digital silver is als
Silver Price Management
Turd Ferguson
Turd Ferguson
If
the entire world only produces 880,000,000 ounces of silver per
year...and if 75% of that silver is consumed through the production of
cell phones, solar panels and other items...then how do The Banks manage
price off of the remaining 220,000,000 ounces? The answer: Alchemy.
Look, you likely already know how The Bullion Banks
alchemize gold in order to control price. After the failure of the US to
manage price in the 1950s and the failure of The London Gold Pool in
the 1960s, the alchemy of paper/digital "gold" was formalized with the
creation of Comex gold futures in 1975. If you need a refresher, perhaps
you should take a moment and read this:
Today, we want to focus upon how The Banks and The
Comex alchemize silver. Like the alchemy of gold, the alchemy of
paper/digital silver is also done to manage and control price. However,
where the gold price is managed in order to prop up and sustain
confidence in the fiat currency system, the alchemy of silver is
primarily done for profit. And which parties profit?
- The Banks which manage, manipulate and control price through the brute force of sheer market domination.
- Manufacturers who use silver as a key input in their products. For examples, check the list found here: http://www.silverusersassociation.org
If someone is profiting in this process, then it follows that someone is also losing. And who are the losers?
- Mining companies, their shareholders and their employees.
- Any and all investors and traders of physical silver.
So, with all that in mind, let's take a look at how The Banks alchemize "silver" for investment demand.
As with just about anything, and as we wrote here (https://www.tfmetalsreport.com/blog/8252/econ-101-silver-market-manipulation),
much of this can be explained through the lessons of Econ 101. Where
supply meets demand is where you discover price. If demand outstrips
supply, price is forced to rise. Conversely, if supply increases faster
than demand, prices fall.
Applying this lesson to silver...If industrial
production annually consumes about 3/4 of mine supply, leaving just
220,000,000 ounces per year for investment, then the shifting demand for
that 220,000,000 ounces would largely determine price. In years where
investment demand rose, leading to a shortfall in supply, prices would
rise. In years where investment demand fell, leading to a surplus in
supply, prices would fall.
And now we've come to the crux of the matter. How do
Banks manage price for themselves and the manufacturers when the supply
of actual, physical silver is so incredibly tight? The answer, again, is
alchemy. The Banks create all forms of virtual/paper "silver" and then
convince the investment world that it's a proxy for the real thing.
Whether through the creation of shares in the SLV and other ETFs or the
creation of futures contracts on The Comex , these forms of digital
silver take the place of actual, physical silver and are used to meet
the investment demand that exceeds the supply of real, physical silver.
For today, let's just focus upon how The Comex
functions in this process. Again, in numbers that are approximations,
the world annually produces about 880,000,000 ounces of physical silver
per year. This leaves only about 220,000,000 ounces to satisfy
investment demand after industrial demands consume up to 660,000,000
ounces per year. How do The Banks on The Comex manage this investment
demand? Through the unfettered creation of paper derivative contracts
which are fed to speculators and traders who seek silver "exposure"
through investment.
Note the chart below and pay particular attention to
the bubbles showing total Comex silver contract open interest at certain
dates since late last year.
This post is not intended to describe again how price
is effected by the daily creation of open interest. Instead, note the
volume of the contract creation since the first of the year.
In the lower left, note that total Comex silver open
interest was 163,812 contracts on January 3, 2017. At 5,000 ounces per
contract, this represents a total of Comex obligation of 819,060,000
ounces of digital silver.
Compare that to the CME Silver Stocks report of that
same date. Note that the total Comex vault supply of silver was
181,903,038 ounces with 28,050,481 ounces listed as "registered".
Now
take a look at the upper left of that chart back up above. Do you see
that, as of last Friday, total Comex silver open interest had grown to a
new ALLTIME high of 234,558 contracts?
Let's do the math, shall we? Again, with each Comex
contract representing an eventual obligation to take or make delivery of
5,000 ounces of silver, 234,558 contracts equates to a total digital
supply of 1,172,790,000 ounces of "silver".
Deciphering how much virtual/paper/digital silver has
been created thus far in 2017 in order to meet investment demand is
pretty simple:
Friday, April 21 paper supply: 1,172,790,000 ounces
Tuesday, January 3 paper supply: 819,060,000 ounces
DIFFERENCE: 353,730,000 ounces
So, how is it that price is only up 12% year-to-date?
Supply and demand. But not supply of simply physical metal. Instead,
this is about the supply of digital metal or "exposure" and how this
bank-created product is foisted upon the masses as a substitute for the
real thing.
How do The Banks and Silver Users solve the problem
of supply and demand? Well, if the world only has 225,000,000 ounces of
silver each year available for investment demand, then you simply create
virtual/paper/digital silver in enough supply to soak up the excess
demand. And so far this year, The Banks have created over 350,000,000
ounces for this purpose.
Oh, and in case you're wondering, has the amount of
silver held on deposit at The Comex grown over this same time period? I
mean, to be fair, you would think that it should, right? Well see below.
Note that as of last Friday, the same date as the latest open interest
alltime high, total silver in the Comex vaults was still just
195,505,395 ounces of which 30,532,200 was listed as registered.
We've often described The Comex Pricing Scheme as a
fraud and a scam and you can once again see why in the data above. While
total, potential delivery obligations have grown by 353,730,000 ounces,
total silver in the vaults has grown by just 13,602,357 ounces. That's leverage of 26:1. But,
obviously, not ALL of the Comex silver is for sale. If we look at just
the supply of "registered" silver, we see that it has only grown by
2,481,719 ounces over the same time period. The leverage of this silver versus total open interest is 142:1.
Anyway, we'll write about that again some other day. In the meantime, what is the point/objective of this post?
Simply...You need to realize and understand how this
works. The price of physical silver is determined NOT through the
trading of actual silver. Instead, paper derivative contracts that act
as proxies or substitutes for physical silver make up the vast majority
of the transactions and, as long as the investment world continues to
accept these worthless paper obligations and the scheme through which
the price is discovered, the fraud will continue.
All parties interested in fair pricing MUST reject The Bankers and their scheme:
- Investors must demand physical metal. NOT paper derivatives, NOT unallocated accounts and NOT shares of ETFs.
- Mining companies must demand delivery into a physical exchange for their product and move their business away from the hyper-leveraged paper exchanges.
- Traders must recognize that The Banks are using their ignorance against them. Every trader that believes in "free and fair markets" in nothing but the proverbial fool who is soon to be separated from his cash.
Only when the world demands physical delivery for
their silver investments will The Bankers' schemes finally fail. Only
then will true and fair price discovery finally be made.
TF
o done to manage and control price. However,
where the gold price is managed in order to prop up and sustain
confidence in the fiat currency system, the alchemy of silver is
primarily done for profit. And which parties profit?
- The Banks which manage, manipulate and control price through the brute force of sheer market domination.
- Manufacturers who use silver as a key input in their products. For examples, check the list found here: http://www.silverusersassociation.org
If someone is profiting in this process, then it follows that someone is also losing. And who are the losers?
- Mining companies, their shareholders and their employees.
- Any and all investors and traders of physical silver.
So, with all that in mind, let's take a look at how The Banks alchemize "silver" for investment demand.
As with just about anything, and as we wrote here (https://www.tfmetalsreport.com/blog/8252/econ-101-silver-market-manipulation),
much of this can be explained through the lessons of Econ 101. Where
supply meets demand is where you discover price. If demand outstrips
supply, price is forced to rise. Conversely, if supply increases faster
than demand, prices fall.
Applying this lesson to silver...If industrial
production annually consumes about 3/4 of mine supply, leaving just
220,000,000 ounces per year for investment, then the shifting demand for
that 220,000,000 ounces would largely determine price. In years where
investment demand rose, leading to a shortfall in supply, prices would
rise. In years where investment demand fell, leading to a surplus in
supply, prices would fall.
And now we've come to the crux of the matter. How do
Banks manage price for themselves and the manufacturers when the supply
of actual, physical silver is so incredibly tight? The answer, again, is
alchemy. The Banks create all forms of virtual/paper "silver" and then
convince the investment world that it's a proxy for the real thing.
Whether through the creation of shares in the SLV and other ETFs or the
creation of futures contracts on The Comex , these forms of digital
silver take the place of actual, physical silver and are used to meet
the investment demand that exceeds the supply of real, physical silver.
For today, let's just focus upon how The Comex
functions in this process. Again, in numbers that are approximations,
the world annually produces about 880,000,000 ounces of physical silver
per year. This leaves only about 220,000,000 ounces to satisfy
investment demand after industrial demands consume up to 660,000,000
ounces per year. How do The Banks on The Comex manage this investment
demand? Through the unfettered creation of paper derivative contracts
which are fed to speculators and traders who seek silver "exposure"
through investment.
Note the chart below and pay particular attention to
the bubbles showing total Comex silver contract open interest at certain
dates since late last year.
This post is not intended to describe again how price
is effected by the daily creation of open interest. Instead, note the
volume of the contract creation since the first of the year.
In the lower left, note that total Comex silver open
interest was 163,812 contracts on January 3, 2017. At 5,000 ounces per
contract, this represents a total of Comex obligation of 819,060,000
ounces of digital silver.
Compare that to the CME Silver Stocks report of that
same date. Note that the total Comex vault supply of silver was
181,903,038 ounces with 28,050,481 ounces listed as "registered".
Now
take a look at the upper left of that chart back up above. Do you see
that, as of last Friday, total Comex silver open interest had grown to a
new ALLTIME high of 234,558 contracts?
Let's do the math, shall we? Again, with each Comex
contract representing an eventual obligation to take or make delivery of
5,000 ounces of silver, 234,558 contracts equates to a total digital
supply of 1,172,790,000 ounces of "silver".
Deciphering how much virtual/paper/digital silver has
been created thus far in 2017 in order to meet investment demand is
pretty simple:
Friday, April 21 paper supply: 1,172,790,000 ounces
Tuesday, January 3 paper supply: 819,060,000 ounces
DIFFERENCE: 353,730,000 ounces
So, how is it that price is only up 12% year-to-date?
Supply and demand. But not supply of simply physical metal. Instead,
this is about the supply of digital metal or "exposure" and how this
bank-created product is foisted upon the masses as a substitute for the
real thing.
How do The Banks and Silver Users solve the problem
of supply and demand? Well, if the world only has 225,000,000 ounces of
silver each year available for investment demand, then you simply create
virtual/paper/digital silver in enough supply to soak up the excess
demand. And so far this year, The Banks have created over 350,000,000
ounces for this purpose.
Oh, and in case you're wondering, has the amount of
silver held on deposit at The Comex grown over this same time period? I
mean, to be fair, you would think that it should, right? Well see below.
Note that as of last Friday, the same date as the latest open interest
alltime high, total silver in the Comex vaults was still just
195,505,395 ounces of which 30,532,200 was listed as registered.
We've often described The Comex Pricing Scheme as a
fraud and a scam and you can once again see why in the data above. While
total, potential delivery obligations have grown by 353,730,000 ounces,
total silver in the vaults has grown by just 13,602,357 ounces. That's leverage of 26:1. But,
obviously, not ALL of the Comex silver is for sale. If we look at just
the supply of "registered" silver, we see that it has only grown by
2,481,719 ounces over the same time period. The leverage of this silver versus total open interest is 142:1.
Anyway, we'll write about that again some other day. In the meantime, what is the point/objective of this post?
Simply...You need to realize and understand how this
works. The price of physical silver is determined NOT through the
trading of actual silver. Instead, paper derivative contracts that act
as proxies or substitutes for physical silver make up the vast majority
of the transactions and, as long as the investment world continues to
accept these worthless paper obligations and the scheme through which
the price is discovered, the fraud will continue.
All parties interested in fair pricing MUST reject The Bankers and their scheme:
- Investors must demand physical metal. NOT paper derivatives, NOT unallocated accounts and NOT shares of ETFs.
- Mining companies must demand delivery into a physical exchange for their product and move their business away from the hyper-leveraged paper exchanges.
- Traders must recognize that The Banks are using their ignorance against them. Every trader that believes in "free and fair markets" in nothing but the proverbial fool who is soon to be separated from his cash.
Only when the world demands physical delivery for
their silver investments will The Bankers' schemes finally fail. Only
then will true and fair price discovery finally be made.
TF
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