Pretty much sums it up. By the way, do you think there will be a correction for the "paper price"? COMEX margin top up?
Calling all Manipulation Theorists
- Thread starter wrcmad
- Start date
Pretty much sums it up. By the way, do you think there will be a correction for the "paper price"? COMEX margin top up?
Yep, ad hoc "allegations" make a good conspiracy. That is my point.
Sources?
Actually, I wrote 1:4 (not 4:1) - that means contracts are covered 4 times over by physical.I agree that over-selling contracts doesn't necessarily constitute manipulation, however, I do find it questionable that even the current month ratio is more than 1:1
If you go back and look at the current month historical data on COMEX, the contracts are always covered by at least 1:4.
The spoofing went for several years. I think 7 years from one bank and 5-6 years for others IIRC from our last conversation.
Let me dig up some documents which show the dates and conversations between traders.
And that's the thing, it would be good to get your definition of manipulation so we're on the same page, rather than arguing moot points.
As far as 'manipulation' and price suppression is concerned, I think it's important to lay out whether it's possible. Whether certain entities have the opportunity and ability to manage the price to level of their satisfaction or desires.
You suggest that regardless of whether certain entities engage in trading, their activities still constitute, and are bound by fundamentally, supply and demand. (Correct me if I'm Wrong).
^^ I hold the same position ^^ BUT (and its a big BUTT), the INTENTIONS to place the positions/trades they do are what would constitute manipulation and price suppression, IMO.
However, even if you had the intention and leverage to drive the price in one direction or the other, it doesn't mean that the supply and demand fundamentals don't exist. The market is still driven by supply and demand, even if you can trade one way or the other.
And that's why I would like you to address this question:
Could certain entities place large enough positions to move the market in the desired direction, and not only affect the price, but also affect market psychology from price/market behaviour?
Most traders, specifically those bound by position limits, have to make a calculated assessment (guess) as to where the market is moving. Larger traders, those with hedge exemptions, have the ability to move markets due to the size of their positions, to limiting degrees.
I think certain trading entities have the capability of suppressing the price IF the demand is within certain parameters relative to physical silver holdings and position size. I can also see how they could manipulate the market by placing positions, moving the price in a direction of their choosing and altering the market psychology by doing so.
I also think that many form a view on manipulation based upon probability, rather than 100% undeniable fact. If you hold the view that the market is managed, manipulated and often suppressed, what does that actually mean for the individual? That silver may be undervalued? That silver will never go up because certain entities won't allow it? I don't think Silver is ever bought because people believe the market is manipulated, but I do think it forms part of the reasoning for why the market has dropped (when it does), for many.
Pirocco
Well-Known Member
The "paper" part of the price is the futures/forward component in the spot price.
That component is due to futures and options on these.
It's published on finviz.com, it's called the "net total position".
Paper price, is ALWAYS corrected. Simply because the goal of a futures contract is to hedge, not to deliver - it's a "bogus" order to make a price increase AFTER own store stocks have been replenished, as to inflict customers a higher price, the difference being the targeted profit. When stock is sold, the hedge is dumped with it, and so the "paper" component in the spot price.
Karoi
Well-Known Member
I don’t think there's much conspiracy around the simple fact that governments and banks lie or mislead the public around the world. Even the mainstream media reports on these lies from time to time.
I don't believe in most conspiracy theories in general, however a small percentage do end up being facts.
Well that makes a big difference!Actually, I wrote 1:4 (not 4:1) - that means contracts are covered 4 times over by physical.
If you go back and look at the current month historical data on COMEX, the contracts are always covered by at least 1:4.
I understand why there’s a big ratio with the paper market overall, but I still don’t quite agree with the logic of it for a number of reasons. I know many would disagree with me on that one, but I’m not too bothered
I just read your signature lines! If you don’t mind me asking, does your PMs portfolio consist of paper, physical or both?
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Ok, here's some info surrounding manipulation over a Multi-year timeframe:
The below link is from a chat portal between multiple banks/personnel.
http://www.goldchartsrus.com/chartstemp/MarketManipulation.php
This video from Mad Mike links with the above chat logs.
This summarises the above quite well...
https://www.nasdaq.com/articles/her...d-ubs-traders-rigged-silver-market-2016-12-08
Here's an extract from the article linked below, also a good read:
"Turning first to the recent Merrill Lynch case, in late June this year the CFTC announced that it had fined Merrill Lynch Commodities Inc (MLCI) $25 million for manipulating gold and silver futures contracts on the COMEX exchange between 2008 and 2014. This was done ‘thousands of times’ according to the CFTC, by MLCI traders ‘spoofing’, or placing and then cancelling orders before they were executed. By creating artificial demand or supply and thus false prices, this interfered with the (already broken) precious metals price discovery that would have otherwise occurred."
https://www.bullionstar.com/blogs/r...-manipulation-the-greatest-trick-ever-pulled/
The CFTC seem to think that spoofing is manipulation... I dare say that it's likely the intentions, frequency, cooperative behaviour and impacts on market psychology which classifies the manipulation, rather than the act of cancelling orders before execution.
"this interfered with the (already broken) precious metals price discovery that would have otherwise occurred"
The below link is from a chat portal between multiple banks/personnel.
http://www.goldchartsrus.com/chartstemp/MarketManipulation.php
This video from Mad Mike links with the above chat logs.
This summarises the above quite well...
https://www.nasdaq.com/articles/her...d-ubs-traders-rigged-silver-market-2016-12-08
Here's an extract from the article linked below, also a good read:
"Turning first to the recent Merrill Lynch case, in late June this year the CFTC announced that it had fined Merrill Lynch Commodities Inc (MLCI) $25 million for manipulating gold and silver futures contracts on the COMEX exchange between 2008 and 2014. This was done ‘thousands of times’ according to the CFTC, by MLCI traders ‘spoofing’, or placing and then cancelling orders before they were executed. By creating artificial demand or supply and thus false prices, this interfered with the (already broken) precious metals price discovery that would have otherwise occurred."
https://www.bullionstar.com/blogs/r...-manipulation-the-greatest-trick-ever-pulled/
The CFTC seem to think that spoofing is manipulation... I dare say that it's likely the intentions, frequency, cooperative behaviour and impacts on market psychology which classifies the manipulation, rather than the act of cancelling orders before execution.
"this interfered with the (already broken) precious metals price discovery that would have otherwise occurred"
Lol "Mad Mike" 
Wow. A lot to digest.
I have given it a red-hot go below.
Spoofing, high-closing, ramping, and wash trading (for example) do not fit this definition, as these techniques are aimed at merely creating short-term pricing abberrations, and are not what the PM fraternity are referring to when they reference the "cartel".
As for multi-year suppression..... I would suggest not, however.
However, I disagree with your exception regarding INTENTION, for two reasons:
Firstly, as you note, intention matters not to the supply/demand fundamentals. A free market is a free market, supply/demand is just that, and if you decide to execute a trade and take on risk however you want or like, then you are not doing anything morally wrong by participating any way you wish to participate. To regulate these kind of decisions to such a degree is impossible, and is in the realm of the hard-left anyway, so can be deemed unrealistic.
Second, the short-term, relative small price movements created by these trades don't constitute long-term price suppression.
The effect on psychology is irrelevant, and akin to shifting blame. Market price is a quantitative representation of the collective psychology of all participants, so any participant is a contributor to the psychology of the participants. To isolate the contribution of just one participant for castigation would, IMO, constitute futile targeting of an individual based on nothing but the fact that you have taken a disliking for him/her (probably because they traded in the opposite direction to you). An analogous argument would be to accuse all the silver-bull newsletters over the last decade of artificially affecting the psychology of thousands of potential silver buyers, who were then convinced to enter the market long, and subsequently gave up 100's of % in returns due to the lost opportunity caused by having their funds tied up in metal - sounds ridiculous, yes? In the end, it is solely the responsibility of the market participant to gather and interpret all information pertaining to a buy/sell decision, and then take responsibility for their own actions/behaviours.
It is one thing to assume this market could be suppressed. It is another to propose a motive for why it would want to be suppressed?
It is interesting to note that over the 24hrs since I asked the many believers of long-term silver price suppression to educate me, there has only been one solid example put forward... and it was the Hunt Brothers who actually manipulated price upwards!
Any discussion of possible motive for price-suppression opens yet another can of worms.
Absolutely.
My point exactly.
As for value, actually putting a quantitative value on silver is another topic of discussion that you and I have had over recent months. I have asked many times on this forum, but nobody here has ever been able to show how you can definitively value an oz of silver. The common perception here is that it is "undervalued"... no shyte sherlock, everyone is holding it, so of course they believe it is undervalued.
I have given it a red-hot go below.
In the context of manipulation to suppress silver prices over the long-term (as is the theory of permabulls and many stackers), my definition would be, price manipulation can be defined broadly as a systematic, organised and purposeful effort to consistently control silver prices at an artificially low value over a long period of time. My timeframe would be a decade, given that I have listened to the wailing since the 2011 peak until now.
Spoofing, high-closing, ramping, and wash trading (for example) do not fit this definition, as these techniques are aimed at merely creating short-term pricing abberrations, and are not what the PM fraternity are referring to when they reference the "cartel".
As outlined above, there are no doubt short-term blips or spread-widening can be achieved in the silver market - it is carried out in every other market, so why not silver?
As for multi-year suppression..... I would suggest not, however.
Agree with your supply/demand logic.
However, I disagree with your exception regarding INTENTION, for two reasons:
Firstly, as you note, intention matters not to the supply/demand fundamentals. A free market is a free market, supply/demand is just that, and if you decide to execute a trade and take on risk however you want or like, then you are not doing anything morally wrong by participating any way you wish to participate. To regulate these kind of decisions to such a degree is impossible, and is in the realm of the hard-left anyway, so can be deemed unrealistic.
Second, the short-term, relative small price movements created by these trades don't constitute long-term price suppression.
My opinion of affect on price is addressed above.
The effect on psychology is irrelevant, and akin to shifting blame. Market price is a quantitative representation of the collective psychology of all participants, so any participant is a contributor to the psychology of the participants. To isolate the contribution of just one participant for castigation would, IMO, constitute futile targeting of an individual based on nothing but the fact that you have taken a disliking for him/her (probably because they traded in the opposite direction to you). An analogous argument would be to accuse all the silver-bull newsletters over the last decade of artificially affecting the psychology of thousands of potential silver buyers, who were then convinced to enter the market long, and subsequently gave up 100's of % in returns due to the lost opportunity caused by having their funds tied up in metal - sounds ridiculous, yes? In the end, it is solely the responsibility of the market participant to gather and interpret all information pertaining to a buy/sell decision, and then take responsibility for their own actions/behaviours.
That is all very presumptuous, and is typically representative of what I am highlighting as unreasonable opinion.
It is one thing to assume this market could be suppressed. It is another to propose a motive for why it would want to be suppressed?
It is interesting to note that over the 24hrs since I asked the many believers of long-term silver price suppression to educate me, there has only been one solid example put forward... and it was the Hunt Brothers who actually manipulated price upwards!
Any discussion of possible motive for price-suppression opens yet another can of worms.
Agree, many form a view on manipulation due to their own skewed perception of probability - which is usually manifested by the instinctive human need for one's opinion to be validated (to be correct).
"....but I do think it forms part of the reasoning for why the market has dropped (when it does), for many."
Absolutely.
My point exactly.
As for value, actually putting a quantitative value on silver is another topic of discussion that you and I have had over recent months. I have asked many times on this forum, but nobody here has ever been able to show how you can definitively value an oz of silver. The common perception here is that it is "undervalued"... no shyte sherlock, everyone is holding it, so of course they believe it is undervalued.
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All phys, but I use my physical stack as a platform to trade paper around it.
As mentioned above, spoofing isn't long-term price suppression.... it is pip-trading.
To conflate the two is often the deceptive strategy of the permabull to defend their narrative.
Probably.
There are plenty here... but very quiet this week?
In the context of manipulation to suppress silver prices over the long-term (as is the theory of permabulls and many stackers), my definition would be, price manipulation can be defined broadly as a systematic, organised and purposeful effort to consistently control silver prices at an artificially low value over a long period of time. My timeframe would be a decade, given that I have listened to the wailing since the 2011 peak until now.
Spoofing, high-closing, ramping, and wash trading (for example) do not fit this definition, as these techniques are aimed at merely creating short-term pricing abberrations, and are not what the PM fraternity are referring to when they reference the "cartel".
You claim they do not fit the definition, yet multiple short-terms eventually make up long-terms.
Incase you missed it the first time...
"Turning first to the recent Merrill Lynch case, in late June this year the CFTC announced that it had fined Merrill Lynch Commodities Inc (MLCI) $25 million for manipulating gold and silver futures contracts on the COMEX exchange between 2008 and 2014. This was done ‘thousands of times’ according to the CFTC, by MLCI traders ‘spoofing’, or placing and then cancelling orders before they were executed. By creating artificial demand or supply and thus false prices, this interfered with the (already broken) precious metals price discovery that would have otherwise occurred."
Thousands of times over a 6 year period. Thousands. This is by one banking entity. I think your dropping the ball on this one.
Why do you suggest not?
You have grossly misunderstood my point. I wasn't targeting one individuals psychology, I was stating the effects of the collective psychology of the markets responding to changes in price/trends.
That's a good point, but I think there's a massive difference spruiking silver and affecting market psychology by altering price and trends. Same ball, different rules and playing field.
Agreed. I think you fall within that 'Human' category and are subject to the same conditions.
My point exactly.
As for value, actually putting a quantitative value on silver is another topic of discussion that you and I have had over recent months. I have asked many times on this forum, but nobody here has ever been able to show how you can definitively value an oz of silver. The common perception here is that it is "undervalued"... no shyte sherlock, everyone is holding it, so of course they believe it is undervalued.
Yes, agreed. Value is subjective and price reflects what people are willing to pay/receive for that value - It's a perception to fill a need or meet a desire.
Yet where the 'undervalued' rhetoric comes from is Silver's price relative to Gold, mining ratio to Gold, currency creation, inflation, current and potential consumption rate, above and below ground reserves and it's industrial uses and demand.
Silver is pretty F#@king incredible.
Do you even think long-term price suppression is possible?
Government would be kept to a limited size if they were held to the spending of only gold/silver backed money. Their overly interfering and tyrannical ways could not have existed without the de-coupling of gold from currency. The people whom own the government, the bankers, created this dodgy fiat scheme, and the governments went along with it because they saw power and easy money, they betrayed us the people in doing so. They became the servants of the bankers and not the people any longer. But their position is out of balance with the natural accounting and will not last.
So gold and silver is basically their enemy.
If gold and silver were left to go to extremely high levels, like they were a God made treasure out of the ground. Common folk could become so wealthy that they could contest the governments monopoly on power.
Isn't it curious that the hunt brothers were chased out of silver then Warren Buffet then Bill Gates? The tater two getting a carrot rather than a stick.
So gold and silver is basically their enemy.
If gold and silver were left to go to extremely high levels, like they were a God made treasure out of the ground. Common folk could become so wealthy that they could contest the governments monopoly on power.
Isn't it curious that the hunt brothers were chased out of silver then Warren Buffet then Bill Gates? The tater two getting a carrot rather than a stick.
IMO you are drawing a long bow to find a fit for your argument.
I don't accept the premise that many individual spoofing events make a long-term price suppression event. That is not the point of spoofing, and that is no secret.
In fact, the CFTC statement shows there is no way one can make that insinuation, as it states the spoofers were creating both artificial demand and supply: "By creating artificial demand or supply....."
Based on the facts presented, I simply reject the suggestion that it is the same thing.
Because nobody has ever been able to show how.
The long-running and well-known theories of Central Bankers, JPM and the like (Banksters) running a systematic scheme to suppress the price of PM's have never been presented in any other format than baseless conspiracies.
Their alleged methods of dumping bucket-loads of naked shorts doesn't stack up when studied in the context of market arbitrage or position covering and the relationship to market dynamics.
The COMEX (Crimex) vault depletion rumours have been started by people who should know better, and have always turned out to be total BS.
The theory that suppression is needed to preserve the value of fiat currency is (IMHO) one that is always presented using half-baked arguments that consider only points that stack-up the narrative, and neglect important facts that may oppose or renounce the theory.
Above all, the price-suppression theory falls completely ass-over-head when metal prices make new highs via the very same market, instruments and mechanisms allegedly used to suppress price - this is my point for this thread.
No.
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Yep.
The fiat currency system is purposely designed to lose value steadily over time, it doesn't require the suppression of sound money alternatives to achieve that end.
And, governments employ the use of guns and cages to force us to accept fiat currency, they don't require the suppression of sound money alternatives to achieve that end.
Good morning!
Is it possible the activity to suppress the price could be determined by a prior assessment of risk and impact? That in a time of high activity from traders who are buying the market the risks are too great and the best time to short the market with high volumes is when the market becomes less weighted on the opposing side?
You seem to be set in your ways and have made a poor assumption as to how this could work. In your views there's not even a possibility the market could be suppressed, so I can see how you take the stance that you do.
You don't think it's possible... hmmmm, so do you believe those with hedge exemptions can make a significant impact on price discovery? Do you believe the big commercial players could move the market by placing well timed positions?
Have banking entities colluded to move the markets in the past?
I bet you haven't even bothered to read any of those articles I provided, nor have you listened the Mad Mike's video.
Do us both a favour and analyse the information I provided. Look at the chat logs and open your eyes a little wider.
To suggest it's not even possible is embarassing on behalf of your position.
No, you won't allow yourself to see. You know certain entities have the ability to place very large positions. The CFTC's position limits now provide them with more potential to overwhelm market demand. You have all the evidence provided to you showing the banks were colluding to move the market in their favour, Not just once, but over several years and 1000's of trades. JPM traders pleaded guilty to manipulation, the DOJ refered to JPM as a "criminal enterprise" for their activities surrounding manipulation in the silver and gold markets.
Now you say that it isn't even Possible to suppress the price long-term.
I'm starting to think I'm debating with a donkey over here...