You’ve got the silver

In the wake of the pushback against game rigging, and lets face it, flat out evil hedge fund people who destroy working businesses by putting both thumbs on one side of the scale and forcing values downwards with derivatives (mathematical inversions of buying stocks) the same crew who managed to score a partial victory against them, (only partial because the game riggers called a time out on the game as soon as their illegal or at least profoundly unethical trickery stopped working) are now trying to do a similar thing to the price of silver.

This is a whole lot of fun and something we can all participate in easily. Go to Kitko silver chart to watch what the “spot price of silver” is doing, and if you like, call one of the big bullion dealers and buy some physical silver and help push the price upwards.

There is a caveat though in our opinion.

The theory used to punish the hedge funds, is not fully applicable to silver as it was to Game Stop stores. The idea, as I understand it, (expect people who know a lot more than I do to comment under this post and read and consider those opinions carefully. They could be right, and I may be totally misunderstanding the situation like Power Line did on their short article on the Game Stop issue) that the price of metals like silver and gold are being kept artificially low by paper shorts. That for every Oz. someone thinks they own on paper, whether it be a pseudo-physical silver company like Sprott, or just buying some derivatives that attempt to predict a future silver price, there is only a tiny fraction of that amount in actual circulation. So a run on physical silver should drive the price up to what it should really be based on supply and demand.

The thing is, with Game Stop, as I understand it, the owners also called their brokers and told them not to lend shares to short sellers. This helped stop the downward pressure on share price while new buying drove it up, righteously punishing the vultures that had planned to push it into the ground and pluck its bones. If the Hedge funds could not borrow shares, they cannot push the price down then sell the shares back and take the difference. (Rumours after 911 circulated that Osama Bin Laden had shorted the airline used to crash into the WTC on Sept. 11)

So there is no way to stop the fed reserve or any other party interested in maintaining the value of the dollar from issuing as much paper silver, in effect a short, as it floods the market with non-existent supply. However if this was the only variable, then purchasing lots of physical silver from places that have to deliver your purchase theoretically would bring silver to a real supply-demand price. Which, according to the theory outlined above, would be very high indeed. Hundreds of dollars an Oz. troy.

There is however another variable that also was not in play with Game Stop.

When you buy silver from a bullion dealer, you are buying a product. So some of the signs that the attempt to push up silver is working, signs that also appeared during the first lockdown by the way, may or may not mean what they think it does. Remember, whatever it is you buy, is made by someone.

Imagine you sold snowballs at the side of a field. its just you and a pair of leather mitts and you can make about 3 decent snowballs a minute. Normally you sell just under what you can make for gangs of kids determined to snow each other under and can’t be bothered to make their own, or yours have better ballistics. Suddenly, there is a rumour that there isn’t enough snow, so people start buying your snow balls at 5X the rate you can produce them.

Well. The price will go up a lot Im sure. But it doesn’t mean there is a shortage of snow. Just of the ability to make it into a form they want their snow to be in.

This might explain the gap between the ‘spot’ price, or price the metal is thought to be worth, and the price per Oz. dealers are selling it for.

Normally most bullion dealers sell basic silver products for about USD $3.00 to $3.50/Oz over the spot. But during the lockdowns and now, its closer to ten dollars.

This doesn’t mean the price of silver is up ten dollars. It means that the dealers are taking a higher margin because of the demand for their inventory which is strained from massive buying right now.

The actual spot is going up though. But it seems to have a ceiling at USD $30.00 Oz. at the time of writing, it has bounced downwards every time it gets close to that price.

(If Silver manages to substantially break USD $30.00/Oz that may be meaningful)

Now this still doesn’t mean either theory is correct. Its also possible, likely even, that experienced traders who buy large amounts are are happy with a modest profit, sell as soon as it nears $30.00 as the first rule of the day trader is “Don’t be greedy”. If enough people sell once these Reddit guys drive the price up for them, then the price will come down. This is all true even if there is ZERO truth in the paper metals theory that holds these commodities down in price.

It should be noted that it is pretty much universally believed that there is massively more silver and gold out there than physically exists, and this is why its cheap. And also, this is why the Reddit group has decided to target Silver to try and correct the price to market forces.

The thing is, it might actually be at market value.

Either way it will be really fun to watch and minimal harm is likely to anyone because if you buy silver and take delivery of it, (buy physical bullion instead of any kind of promissory note) you have the silver. And even if the price goes down, you don’t lose anything unless you sell it and it can still be used for things. Less so since digital cameras. But some things. Really big and cool looking belt buckles could be in our future.

About Eeyore

Canadian artist and counter-jihad and freedom of speech activist as well as devout Schrödinger's catholic

11 Replies to “You’ve got the silver”

  1. I have posted the thoughts of some pretty big brains on this site about the meaning of precious metals in terms of our economies, value, debt and savings. It’s a big subject. I think it was Mark Twain who defined a gold mine as “…a hole in the ground with a liar standing at the top of the hole…” The same thing could be said, to a lesser degree, about a silver mine.

    My belief in precious metals comes from the basics that I have learned. There is no counter-party risk for he who holds it. This makes it the highest form of money, and as such will spawn countless derivatives of which we must be quite sophisticated as investors in order to bring our understanding to them. The real value of precious metals does not change. It is the fiat currency against which they are measured that changes. This makes pm’s also a true measure of value, like the U.S. 10-year treasury bill used to be.

    The other day I had a conversation with an old Polish man about preservation of wealth. He said he bought land. I said there was also precious metals, and that I preferred them because they are more liquid than land. “Right,” he replied. “The Jews like the gold.”

    Regardless of how they are perceived, their 5000-year history as money matters. For a better understanding read this, then come back in six months when you’re done. You may see things differently. Look to the right side of the page under the first post titled, It All Starts Here:

    • Land is not an investmnet in a communist state. Or any state where something that tethers you to your investment also makes you a slave to the people who can tax and control what you do with your land.

      PMs certainly appear to be the only form of wealth you can hang on to and trade without too much government interference.

      But should people start using it a lot, expect a return of the Highwayman.

      Come to think of it, we already have them now except they take your coach and we call them car jackers.

    • Unless you live in a Communist country, land definitely gains value without any care input. You can let it go wild and it still increases in value.

      About gold and other metals: once heated enough, they melt and then with more heat, they evaporate.

      IMO: Because silver is so indispensable for so many industries, they’ve intentionally kept the price of silver at a low threshold.

      More uses for silver that gold doesn’t have, which makes silver almost indispensable:

      • Haven’t done well with land. Invested upstate NY, and the high taxes at up more money than the land is worth.

        Houses, though… hard to lose with houses. Unless you bought in Detroit.

        • The thing with houses is you have to invest in the upkeep (windows, roof, and more) to maintain its value. The value barely goes up unless it is in a desirable area. While land, no investment whatsoever and taxes are very low because there is no house.

  2. SILVER: I’ve been saying this for over 30 years. The price of silver is under-evaluated. Entities have been hard at work promoting gold.

    Gold is not indispensable, while silver is.

    What is silver used for in industry?
    The industrial demand for silver

    Silver has many industrial uses, accounting for more than half of annual demand worldwide over the last five years.

    This means that economic growth can affect silver prices far more than it affects gold. Only 10-15% of annual gold demand worldwide comes from industrial use, the rest going to jewelry and investment.

    Because of silver’s physical strength, brilliance, malleability and ductility (it can be squashed or pulled into shape), people have also used silver in jewelry, tableware and fine art for thousands of years. Industrial applications use silver’s conductivity (the highest of any element for electricity and heat) as well as its sensitivity to light and anti-bacterial qualities.

    Today silver is invaluable to solder and brazing alloys, batteries, dentistry, glass coatings, LED chips, medicine, nuclear reactors, photography, photovoltaic (or solar) energy, RFID chips (for tracking parcels or shipments worldwide), semiconductors, touch screens, water purification, wood preservatives and many other industrial uses. Washington-based industry group the Silver Institute calls it “the indispensable metal”.

    The biggest consumers of silver for industrial applications this past decade have been the US, Canada, China, India, Japan, South Korea, Germany and Russia. Over that time silver demand from older industries has faded, only to be replaced by new technological uses.

    Here we look at three major industrial uses of silver – photography, solar energy, and medical – and how they are changing.


  3. The problem with SILVER, although it has more use than gold: we all know they’ve been crushing its true value. So now, people are rushing to buy silver, and that includes hedge funds at play. The price will collapse in due time.

    Nations and Wall Street have too much gold stored in their reserves. They can’t allow silver to rise.

  4. And after all is said and done, my experience (paid dearly for) is that silver will soon me hammered hard again. Until central bankers are ready for transition away from fiat, in earnest, I do not believe they will leave the pm markets unmolested.

    • I agree. The world’s central banks, including IMF, have too much invested in gold. Never forget why Qaddafi was eliminated. He wanted to start a new gold Pan African currency and he had a lot of gold amassed in lingots within a structure.

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