I recently read that $2 billion could corner the silver market and free up silver's manipulated price point. This could be achieved by a single investor. What keeps this from happening? Do they fear the same repercussions as the Hunt brothers were dealt? It just seems that at present prices being near or below mining all in costs, it would be almost impossible to lose on such a deal even if they got the Hunt treatment.
Introduce yourself first. You will then become privy to the fact that Silver Stackers has this aim in mind. We have passed 50% of the target and will soon claim total domination over the silver market.
Ok, sorry. I am a rookie stacker from the northeast and have accumulated 1000+ oz in the past few months. I read all I can on the situation surrounding the stock market, the condition of U.S. fiat and the PM markets. I began stacking as fear arose how I would pay my mortgage etc. should the economy collapse and I lost part or all of my income. PMs just seemed a no brainer for accomplishing this. You say "We" have passed 50% of the target. Hope you might be able to shed some light on that. I would think that an instant shock to the market would prove much more effective and profitable to the person or group that cornered the market.
I think the answer is some people grabbing profit and that corner being shot out the picture. Happened before.
boston- I was referencing this article http://www.silverdoctors.com/is-this-broadside-about-to-free-silver-again/#more-46326
This theory coincides with a Wikipedia article I read recently: " The silver market is much smaller in value than the gold market. The London silver bullion market turns over 18 times less money than gold. With physical demand estimated at only $15.2 billion per year, it is possible for a large trader or investor to influence the silver price either positively or negatively. " http://en.wikipedia.org/wiki/Silver_as_an_investment
978 million ounces of silver sold last year of which 819 million ounces was from new production. 819 million ounces at $20 is $16.38 billion dollars. So no, 2 billion dollars will not corner the market in silver. It will not even corner 1/8th of a single year of supply and that's not counting what happens when the price goes up and new supply comes online as a result. It wont even allow you to buy into a significant chunk of the mining sector that produces silver because most of them produce silver as a bi-product of mining something else like copper and lead and without cornering the supply you have not cornered the market.
I think what the post means, is the inventory in the COMEX. Someone with a couple billion could buy the inventory then demand physical delivery. The registered inventory is a lot of paper, and not much actual silver.
Of course there isn't much silver. Its a futures market, thats how futures markets work. A mining company with say 1 million ounces in the production pipeline short sells 1 million ounces in X months time. This grantees they will be able to pay for the costs involved because they have already pre-sold their entire production. The buyer of the contract is going to be either a direct consumer (most likely not because they would likely want to buy closer to the delivery date) or a speculator. A speculator could be holding on to the contract in order to sell it at a higher price closer to delivery (when consumers are willing to pay more for it) or the contract will be held as a hedge on some other asset and swapped out as it gets closer to maturity to keep the hedge going. Most of the players in the market itself are doing financial things and are not actually the buyers or sellers of the commodity itself and for most of the life of the contract there may not be enough commodity to back it but that's because its a futures contract and not an ETF. That doesn't mean you wont be stuck overpaying on 2 billion dollars worth of contracts if you are dumb enough to buy up all the offers. Remember the Hunt brothers where broken because the COMEX decided that everyone had to take physical delivery at the end of each month! That meant the people on the exchange who where hedging or who where holding to sell at a premium simply stepped away from the game and the Hunts where stuck holding a fuck ton of silver they had bought at $50 which by the end of the month was $10. Even if the Hunt brothers had not been greedy and stupid by using leverage the market would have still rolled right over them since the price would have been high right up until they run out of money (prices can go up indefinitely if you are stupid enough to continue to overpay) and crashed back down again when they run out of money and the supply still rolls in.
Where did you read this statement? The standardized amount associated to a futures contract is no commodity that is present now, so one could title these as "paper", but the comex inventories are present stocks of commodities. Both registered and eligible. About that "paper": a futures contract is ment to "deliver" cash, that compensates for a changing commodity price (hedging). It compensates both losses and gains (-cash). http://www.cmegroup.com/delivery_reports/Silver_stocks.xls Activity Date: 8/22/2014 TOTAL REGISTERED 59.989.534(.148) so 60 Moz < US$ 1,17 billion TOTAL ELIGIBLE 118.908.533(.126) so 119 Moz <- US$ 2,32 billion COMBINED TOTAL 178.898.067(.274) so 179 Moz <- US$ 3,5 billion Only 1% of futures contracts (not just silver) actually ends in delivery of the commodity. Why is that? Because it was never the intention to buy the commodity (here) in the first place. The actual purchases occur in the cash market, not the futures market. The latter is just price fixing, as to lock in a price of a planned purchase, or a planned sale, on the cash/spot market. When the price changes, dollars will be added to, or removed from, the futures positions account. The net sum of: 1) the futures positions accounts dollar stream, 2) price change, will be equal to: 3) the cash-market-agreed contract price. And that keeps 3) fixed. http://forums.silverstackers.com/topic-56015-agressive-hedge-fund-buying-plagued-silver.html POST #9 gives a more detailed explanation Comex inventories however actually store commodity. This stockpile is what it is: a stockpile. Just silver whose owners decided to store it there. The amount silver isn't related at all to the net amount futures contracts. The latter can be a decade low and a decade high, for a same stockpile.
I think the "disinformed..." part of my signature text again applies here lol. One may wonder why they chosed that name "zero hedge". Because they want their victims to act careless?
> Only 1% of futures contracts (not just silver) actually ends in delivery of the commodity. > Why is that? Because it was never the intention to buy the commodity (here) in the first place. Ahh, it seems I was not completely accurate in my description of the COMEX / futures market. I'll have to go through your links and update myself. Not that how I was wrong makes the case closer to OPs claim that you could corner the market with $2B
Over the years 2009-2013 about 1000 Moz (investment nearly precisely identical - funny coincidence - to coins & medals) was stockpiled. This was no paper silver but really produced silver, coins & medals & 1000 ounce bars that now it in Comex depositories / ETF depositories and maybe some unpublished stocks. This topic talks about cornering the market by buying 100 Moz (todays price, 2 billion usd) of it. Well, it WILL cause a price uptrend, but every price dollar requires 70 Moz so at most, and on its own, it would move spot to $21. And even if it would lure others into buying too, well, there is another 900 Moz out there, that may be thrown for sale when its owners see less losses let alone profit. As a remark I wanna add this: there are substantial glitches in the silver market data, so there is some unknown / unreported trading going on, and it looks like sized as about 200 Moz. In other words: the price can move like 3 dollars, without any data explaining it. I'm sure of one occasion that must have happened in 2013. And that 3 dollars was precisely the unexplained part of the price drop mid april 2013, where the futures markets net total, in a very rare occasion, that week did NOT drop with the price. 2013 was a sale, so whoever, exempted from reporting duties, it was that bought that silver, can't sell it again. I don't know if 'they' sold all they had then, but if they did, and want to repeat, we could see a price uptrend sized $3 with nothing explaining it. The rest of the price trend, will depend on all of us, haha. Like it is now, I'm quite unwilling to pay more than spot reference $19. And last futures market position size, gives $17 a good chance. Because alot decided to get out in last uptrend, the futures hedge is at todays price much bigger than it was in the past. If it will happen will depend on whether or not they will buy back in. The lower a price goes, the higher the chance on it. But I don't count on it. Coming months will tell. Since 3 months seems to be a typical price cycle period, we may know end september/start october. In meantime there will be some 5 futures hedge size reports, to judge further.
