Is there any logical reason why First Majestic Silver premiums have increased near to 40%? http://seekingalpha.com/instablog/839735-katchum/1987492-gold-flow-from-west-to-east-continues
I don't see much possibility of Comex or the LBMA defaulting any time soon. Besides, cash settlement from any of these entities is not an uncommon event. Sure, it's definitely a ponzi scheme but still backed by a cash settlement clause which is in endless supply at the moment regardless of how much physical metal is held or even in existence. Increasing premiums seem to be linked with increasing public awareness of the various rackets going on. From my position I would see that as a somewhat positive indication.
Yeah, 40% is quite a leap but I'm a great believer in the free market, that being the market sets prices rather than some faceless bankster or bureaucrat. The price of silver should rightly be reflected by many factors, mining cost to extract it from the ground, refining cost, wholesaler margin and then retail price which is driven largely by supply and demand plus competition from other retailers. In other words, the highest price the retailer can get away with and still make sales. Free market capitalism, bless their black little hearts. Of course, then it's up to the consumer to shop around for the price they are prepared to pay or to opt out and not buy.
