Derivative Conspiracy Theories

[The Merchant]

Some interesting posts have emerged firstly to support market supression to the downside, now potentially to the upside.

In my opinion, this ignores a fundamental rule of capitalism: to generate a profit.
Speculation occurs because of belief in the profit motive.

Excessive speculative shorts could have been in effect in the recent past because of the consistent price trends before this recent run up. Historically they would have been nice little earners.

But with the hard and enduring run up in silver prices there are going to be some burnt short speculators. Does that mean the system has gone all wrong? No, capitalism involves risks, sometimes those risks don't pay off.

So holders of silver instead of running around with conspiracy theories, should be focussing instead on trying to understand price movements.

My own view is that the recent price spike has been influenced by a shortage of physical silver coupled with a high level of shorts. But that does not mean that silver is going to crash.

Future movements in the price of silver will be determined by the movements in derivative products, movements in physical silver production, and movements in underlying demand for physical silver. Lots of factors that will interact with each other. To look at only one factor is to base a decision on only part of the picture.

 

[Recent]

They have been holding silver down for decades to support there stupid fiat, paper notes backed by fresh air.So we just forget this and call it capitalism........not me

The last time we had a shortage of metals (2008) the price went down....but oh no saying there is no conspiracy is just plain ignorance.

 

[The Merchant]

They have been holding silver down for decades to support there stupid fiat, paper notes backed by fresh air.So we just forget this and call it capitalism........not me

The last time we had a shortage of metals (2008) the price went down....but oh no saying there is no conspiracy is just plain ignorance.

So do you really care if they have been trying to hold down silver prices? Doesn't that make it easier to buy more silver with that same fiat money?

The prices went down in 2008 because of the GFC. Alot of speculation exists in PM as well (just look at all the posts in this forum whether to sell once the price drops abit)

The point i am trying to make is that understanding why different market participants interact makes it a hell of a lot easier to acquire PM (and why i won't be scared out of short term price movments).

 

[The Merchant]

So holders of silver instead of running around with conspiracy theories, should be focussing instead on trying to understand price movements.

silver without a conspiracy is nowhere near as much fun. and why would any stacker want to understand movements. short term you would because you would be in paper. if you are a paper player then you wont be buying 10/50 oz. will be a lot with leverage and options. but you need a lot more cash tucked away if you get caught short. i dont think its about price movements,its about the world movements that you need to watch. war, scams,debt,banksters is what makes the charts move,not charts.

greece folded because of goldman sachs,from there it has been downhill. iraq cost the yanks how much?????????? wow we are talking serious money. the banks sold mortgages to dodgy customers and then bet on it to fail.60 trillion in the world in money,on paper last time i looked at derivatives it was just over 500 trillion. something will give,where is what i like to know so i can be some place else.

Some people might be doing this for fun.
I am doing it to protect my family's future.

Why would i be in paper short term? just because prices dropped a bit, i am not shaken out of my positions (and i mentioned this on SS, april holiday volume light, if things go back down nothing to worry about).

An no i am not so smart as to have bought all my holdings anywhere near the bottom.

 

[Silverado]

So holders of silver instead of running around with conspiracy theories, should be focussing instead on trying to understand price movements.

Professor Antal Fekete writes that it is important to watch and trade the 'Silver Basis' as opposed to the 'Silver Price'

A Primer on the Silver Basis: http://www.kitco.com/ind/fekete/jun122008.html

If anyone knows of a web service that can track the Silver Basis, please chip in. It would serve as a good learning tool in understanding this under documented method of 'Precious Metals Basis Trading'

 

[The Merchant]

So holders of silver instead of running around with conspiracy theories, should be focussing instead on trying to understand price movements.

Professor Antal Fekete writes that it is important to watch and trade the 'Silver Basis' as opposed to the 'Silver Price'

A Primer on the Silver Basis: http://www.kitco.com/ind/fekete/jun122008.html

If anyone knows of a web service that can track the Silver Basis, please chip in. It would serve as a good learning tool in understanding this under documented method of 'Precious Metals Basis Trading'

Thanks for the link, i have saved it.
I need to go through this article in more detail when i'm not so sleeping. but i think the crust of what you are looking for is the degree to which the market goes into backwardisation or contago.

 

[Silverado]

but i think the crust of what you are looking for is the degree to which the market goes into backwardisation or contango

Probably correct...I'd like the Gold Basis Detector hard wired into a Red flashing light and mounted in my lounge room. It would alert me to the fact I need to visit the supermarket and drive thru bottle shop before the zombies emerge.

Seriously though, he does see the Gold Basis as the signal for collapse. Fekete is a deflationist which is interesting, I wonder if he's read the FOFOA Blogpost http://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html

That post has won over at least one deflationist lately, would love to have Steve Keen run a debunk on it.