Friday we left off talking about Silver and ended the piece discussing the ongoing bullion bank price suppression scheme. We’ve often commented on the issue because new proof comes up all the time and it’s hard not to comment on a blatant in justice being done against everyday Americans. It’s gotten to the point that many long time skeptics have come to admit in recent months that it is a very manipulated market. So, could the price drop very hard? Absolutely.
However, none of that really matters. They’ve been doing this for decades and again, the price of silver has increased more than almost any other asset over the last 12 years. This is clear evidence, that the bullion banks can control it for short periods of time by overwhelming the market with force. But in the longer run, they don’t have as much money to throw away as the market itself would like to make on seeing the price rise. So they sell millions of tons in very short periods and overwhelm all the buyers of that time, which leads to steep drops.
But then the market (which by the way, has far more demand for real physical silver than can be satisfied with real mine production every year), says “YES, I will buy more at this price.” And the price rebounds ferociously. It might have fallen faster and further than gold and might stay down longer after gold has rebounded, but it will most likely rebound stronger than gold when it does.
So it might be possible to wait and buy into silver at a cheaper price than it’s at today. However, it might not be. Here’s why…
If the great crash happens because the US Dollar is diving in value, people everywhere will be scrambling to put their money into something real. Silver which is readily available today, quite simply won’t be available to you unless you have something to trade (like food) to someone who owns silver and is willing to part with it for what you have, because they certainly won’t want your green paper with dead presidents on it. Silver prices will be shooting upwards and Dollar values downward. So, you’ll be too late.
Now, I said that silver is available today, but this is a half truth. It is in small quantities, if you’re trying to buy multi-millions worth, it’s not nearly as available as it appears and you’ll have to wait a months to receive it. You took economics 101 in high school or college, right? “Supply and Demand determines the price of a thing.” Does that sound like a market which should see its price plummeting all the time? Well of course, not but we’ve already discussed how the price is derived.
So US Dollar value destruction is one scenario that would shoot prices upward, is there another reason that you should make sure you own enough silver now even though prices could potentially drop?
Absolutely, we discussed the bullion bank manipulation of the “price” of silver. It’s interesting that the Fed has been able to twist our thinking so much that we now think of silver or gold having a price rather than understanding that the US Dollar has a price based in silver (as the US Constitution clearly defined.) But that’s how people think now instead of understanding what is truly valuable even though we’ve only been on this often-tried, never-worked-in-history, fiat money experiment for 40 years. Isn’t it amazing how easily Man can be confused about what is real and what is not?
Sorry, I’m off track….The bullion bank price suppression scheme has been at work for a long time. However, as was admitted by CPM at the trial in March 2010, they trade 100 times as much paper in these markets as actually exist in physical supply. This leverage is far more severe than the leverage which has practically already (and will soon) brought the entire fiat banking system to its knees.
You see, for every piece of paper (or blip on a computer screen) held by a trader on the COMEX or LBMA that indicates ownership of real metal, 1% actually exists. So if 2% of all those who hold the imaginary paper assets decide that they want to take their silver in physical form, the whole system blows up. In a similar scenario, if the growing losses by JP Morgan Chase (the biggest short on the market) gets unmanageable, and they decide they have to unwind the position by becoming the largest buyer on the market, prices will explode and it will become clear to all that physical silver is truly precious and most paper silver is just an IOU from a bankrupt organization.
We don’t know when this day will come, but we do believe its arrival is a certainty and it’s certainly prudent to be prepared in advance.
We also wanted to share a couple interviews with Jim Sinclair which are both eye opening and insightful. If you’re interested in this topic and haven’t heard them yet, you ought to listen!
This is the 18th post in a series. You should read the initial thoughts on these forecasts here. and the Overall Prediction Page here. Here are the rest of the posts: 3) Ben Bernanke’s Dollar Devaluation Plan, 4) The Coming US Dollar Devaluation, 5) Stock Market Volatility, & 6) Stocks to Fall in 2012, 7) The European Crises, & European Options, 9) European Prediction, 10) Recession in Japan, 11) Japanese Yen Crash,12) War with Iran, 13) Jewish Perspective on Iran, 14) Commodities to End 2012 Lower, 15) Where Will Gold Go Next?, 16) Gold, Should you Wait?, & 17) Will Silver Move Higher?