Who is pushing the price up, and how much does one need to do it?

C

Cheepo

New Member
It seems to me that someone is pushing the price of silver up every time it reaches 19.50 or so. I guess there is a way to do it AND make money in the process by bidding for a price increase in the futures market, and buy a lot of physical metal, at the same time, when the price reaches 19.50 or so.

Is that so? How much money does it cost to do it, and how much money does one make? I guess since there is a relatively small amount of silver around, the amount of money needed is "finite"? :D Still, it should be possible for regulators to spot it, right? Or maybe they are looking somewhere else? :D

Also, who is doing so? The usual suspects would be Goldman Sachs, institutional investors, and funds? What do you think?
 
Cheepo said:
Still, it should be possible for regulators to spot it, right? Or maybe they are looking somewhere else?
Click to expand...

Oh you mean the CFTC - Commodity Futures Trading Commission

Run by ummmm.... Gary Sensler for the past 5 years....

Gary Gensler served as Chairman of the Commodity Futures Trading Commission (CFTC) from May 26, 2009, to January 3, 2014

Prior to his public service, Chairman Gensler worked for 18 years at Goldman Sachs, where he became a partner
Click to expand...
http://www.cftc.gov/About/Commissioners/FormerCommissioners/ggensler


Yep I'm sure Goldman Sachs and JP Morgan could not possibly be involved in any sort of manipulation or they surely would have gotten caught by now
 
Average price 1997-2003 was $4.92
Stockpiling rate 1997-2003 was 98.843 Moz per year.
Price over this period can be called stable, so stockpiling rate must have mathed consumption rate.

Average price 2004-2012 was $17.23
Stockpiling rate 2004-2012 was 288.855 Moz per year
Price rose from $5 to $31

So on average, 9 years long, 190 Moz was annually added to the stockpile, totaling to 1710 Moz, which increased the price with 25 price dollars.
So one needs to buy 68.4 Moz to move the price a dollar up.

An alternate way is the Comex position, preferably in a fast price uptrend:
25/02/2014 38985 $21.81
04/02/2014 14852 $19.525
= 24133 positions corresponds 2.285 price dollars.
That's 10561.5 positions per price dollar.
10561.5 x 5000 = 52.807 Moz to move the price a dollar up.

So if you want a rude figure as the average of above 2 samples, it needs about 60 Moz to move a dollar.
Using this figure, the $32 > $50 price move of 2011 must have been near exactly a whole annual world production bought in 2.5 months.
Then again sold in a couple days.
Rather funny eh? Remember how forums were flooded with positivity and $100 and $1000?
One may have thought lol there is nobody that thinks of selling.
But apparently, the opposite must have been true. They all sat on the edge of their chair with their finger hovering above the SELL button. Deciding 'bout 30000 tonnes silver. :D
 
Pirocco said:
Rather funny eh? Remember how forums were flooded with positivity and $100 and $1000?
One may have thought lol there is nobody that thinks of selling.
But apparently, the opposite must have been true. They all sat on the edge of their chair with their finger hovering above the SELL button. Deciding 'bout 30000 tonnes silver. :D
Click to expand...


Well said.... It is because talks like this, Big Brother doesn't want that to happen. If it happens which I think it will inevitably happen. It will be sudden. Or else why bother stacking?:D
 
Or maybe we all got on the wrong boat and now it's sinking.. :p
Somehow something like, graphine will replace silver in the next few years.. and silver will loose a lot of industrial uses.
Nah.. stuff that.
$1000 Silver and were rich like pirates!!
 
Now?
It started to sink on 1 may 2011.
And the closer it comes to the bottom of the sea, the better it is to jump on!
Because just like in my 2011 hurah train leaving the station, the inverted is also true, when everybody sits with a sad smiley, it's about the best moment to buy more. If you can. i.e. if you didn't listen to Silverdoctors / Zerohedge etc, and didn't shoot it into their pockets.
 
Is anybody actually listening to zerohedge? I think they ALWAYS get it wrong, because they only publish either plain lies or gross exaggerations.
 
If I visit the dozen dealers in my country and a neighbor one, their blogs and info pages are cluttered with (references to) silverdoctors/zerohedge articles. Makes it pretty clear doesn't it?
It's obvious that they try to hype precious metals. I have no problem with a business advertising its product. That's just normal and I'm happy to know about alternatives/choices. But this is different, they construct bogus stories to mislead people, and that makes your 'they're always wrong' statement not even relevant. Somebody that is wrong, still says what he think, and does himself, so the being wrong also inflicts that somebody the corresponding nasty consequences. But that zerohedge/silverdoctors/etc club, isn't 'wrong' as such. They trick others into errors on purpose, and themselves they do not do what they suggest others.
And it works, just look at the amount posts on forums, by oldies as well as newbies, that believe what they read there, because it's well packaged in a 'professional' appearing sphere, with enough complex terminology to make readers think that they are 'insiders' that share their good knowledge with the good people out there. But put this next to the ever returning false stories, alike comparing a mined silver production amount with a daily trading volume (if me and you sell a single kilocoin 10 times to eachother on a day, then we generated a trading volume of 10 kilo with just 1 kilocoin needed for it), as to suggest silver shortages, and you quickly realize that something is seriously wrong with their 'good knowledge', serious enough to render out even stupidity, to leave only misleading.
 
Cheepo said:
It seems to me that someone is pushing the price of silver up every time it reaches 19.50 or so. I guess there is a way to do it AND make money in the process by bidding for a price increase in the futures market, and buy a lot of physical metal, at the same time, when the price reaches 19.50 or so.

What do you think?
Click to expand...
It is simply market dynamics. :)
While the perception is often 'smackups', there was no such thing not so long ago. :|
 
wrcmad said:
It is simply market dynamics. :)
While the perception is often 'smackups', there was no such thing not so long ago. :|
Click to expand...
Tongue in cheek, or seriously?

So tell me, in your playbook, doesn't "market dynamics" include player manipulation, often referred to as 'smackups'?
That is, intentional buying, selling, and related activities, to influence market prices.

I mean, surely 'market dynamics' includes more than - mother nature, and activities independent of attempts to influence market prices.
Aren't some silver transactions done with 'ulterior motives'?

Weren't the Hunt Brothers part of market dynamics?
 
Don't say 'thievery on a marketplace'.
Say 'market dynamics'.
Political correctness on the market of the shinies! :D
 
From what I can piece together - just a hunch - it seems to me the 'real cost to produce' - is around $19.50 U.S.

All those mines producing silver as a by-product (or not), decide at some point to stock pile, instead of releasing to buyers. Make more money in the end by holding for awhile.
Nothing nefarious, just good business practice.

JMO
 
Makes me remember those IMF words in its beginning days (when the US government was abit wary 'bout it). They would let the gold market 'free', but with the 'system' having a huge stockpile to start with, and with the 'system' making sure that gold trading would stay mainly in the 'public' (read: system) sphere, and do all they can to avoid too much of it going to people on markets. And that's what they did since. Drive the price down when people on markets want to sell, and drive the price up when people on markets want to buy.
Much similar to the ever-returning so-called 'Snake in the Tunnel' multicurrency control method, as to shape the whole of the currency market in such a way that intra competition is limited by defining min and max levels, and interfere everytime one seems to go 'out the tunnel'.
One may wonder who sits behind those 'Swap Dealers'. And what is traded on those so-called Dark Pool markets. A while ago I collected all data I could find about it, and to my surprise, the whole of it appeared as very experienced / specialized in a high degree, as indicated by maturity of related software. Yet, few to nobody knows about them. I never came across any reference in any 'common' newspaper / tvnews, they all act like they don't exist, and their 'financial news' is like all there is out there. Yet, if you look at the amounts liquidity moved there, as occasionally mentioned, the 'visible' market is like a dwarf next to it.
Then look at the names of the involved entities. The same names that popped up as key ones in the crisis. The same names that are present in the list of we-all-bail-out-eachother, with that bailing out masked even as penalties.
Still, we, have still something to say there. Whether we buy or not buy at the price they try to inflict us.
 
BeHereNow said:
From what I can piece together - just a hunch - it seems to me the 'real cost to produce' - is around $19.50 U.S.

All those mines producing silver as a by-product (or not), decide at some point to stock pile, instead of releasing to buyers. Make more money in the end by holding for awhile.
Nothing nefarious, just good business practice.

JMO
Click to expand...
Yes, I think that is called 'producer hedging', yet there are different exact explanations of it out there, that seem to 'fight' eachother.
But it doesn't appear to be in a degree that matters alot, and there is alot + and - so it happens on a relatively short term.

Producer Hedging (positive means it's [SUPPLY], negative means it's [DEMAND])
1997 68.1
1998 6.5
1999 -16
2000 27.4
2001 -18.9
2002 24.8
2003 -21.0
TOTAL1997-2003 70.9 RATE 10.129/YEAR
2004 -2.0
2005 45.9
2006 -11.6
2007 -24.1
2008 -8.7
2009 -17.4
2010 50.4
2011 12.2
2012 -41.5

Yet, things may have been different in earlier years (where I lack data for).
For ex, I found this about gold http://www.x24kgold.com/2011/05/producer-hedging.html (caution: possible vested interest site):
Hedging and de-hedging activities are thus important in the wider gold market. To give a historical perspective, the 1990s were largely characterized by unrelenting downward pressure on the gold price, which led to steadily increasing levels of hedging undertaken by producers who were seeking revenue protection from further declines. In 1995, hedging had a particularly noticeable impact, reaching 475 tonnes and thus accounting for about 13% of total supply. By September 1999,however, the gold price had made an abrupt change of direction and started to climb. Many hedged producers were caught off-guard and were unable to take advantage of soaring spot prices. On the back of this crisis, the year 2000 was the first year since the late 1970s when the global producer hedge book did not expand. There has since been a protracted period of de-hedging, in which producers have both delivered into and also prematurely closed out their hedge contracts. This is accomplished either by bullion purchases from the market, delivered to the bullion bank,or through delivering their own production into contracts before they mature. De-hedging posted a record level of 447 tonnes in 2007, representing just over 11% of total gold demand. Expectations for higher gold prices and investors' associated anti-hedging sentiment were the chief reasons for this.

It can be seen that, pre-1999, producer hedging activity was a significant supply component in the gold market, whereas post-1999, hedging activity became a significant demand component of the market. Today, many more exotic and complex financial derivatives and option structures exist, in addition to the humble forward sale, through which producers can hedge. The effect of these more complicated contracts is, however, ultimately the same: hedging activity by gold producers affects the timing of mine supply reaching the market.
Click to expand...
Producer hedging (positive means it's [SUPPLY], negative means it's [DEMAND])
All data I have (most from World Gold Council source), didn't search very well yet:
(tonnes)
1995 475 http://www.x24kgold.com/2011/05/producer-hedging.html
1996 ?
1997 504
1998 97
1999 506
2000 -15
2001 -151
2002 -412
2003 -289
2004 -438
2005 -92
2006 -410
2007 -447
2008 -346
2009 -252
2010 -116
This makes clear that there was alot producer hedging in the nineties.
To give some context to estimate above figures:
Mine production
1997 2527
1998 2574
1999 2602
2000 2618
2001 2645
2002 2618
2003 2621
2004 2493
2005 2548
2006 2486
2007 2476
2008 2409
2009 2584
2010 2659
2011 2839
2012 2864.1
2013 3018.6

Net Government Sales (positive means it's [SUPPLY], negative means it's [DEMAND])
1997 326
1998 363
1999 477
2000 479
2001 520
2002 547
2003 620
2004 479
2005 663
2006 370
2007 484
2008 236
2009 30
2010 77
2011 -455
2012 -544.1
2013 -368.6

Recycling
1997 631
1998 1108
1999 620
2000 619
2001 749
2002 872
2003 985
2004 878
2005 897
2006 1126
2007 956
2008 1217
2009 1672
2010 1653
2011 1611.9
2012 1590.8
2013 1371.4

For ex, the 504 tonnes producer hedging (supply) in 1997 was then 20% of a worlds total annual traded.
Since 2000, they are dehedging.
 
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