Jason Hommel asks a VERY interesting question

[Spartacus]

why are the Silver fabricators NOT auctioning off their Silver to the highest bidder?

HEY DEALERS: there's this new doohickey called the interwebs. Heck, use ebay until you set up your own system. A good Ruby on Rails guy could do a test setup in a couple of days.

What magical power does the futures market have over these people? I mean, aside from doing a little work for them (and doing that work, price-finding[*], in a way that robs them of god knows how much profit)

EDIT: It would help if I gave the right link, wouldn't it?

http://news.silverseek.com/GoldIsMoney/1219600231.php
[*] the less charitable might write price rigging/fixing

NOTE: the ONLY things I believe are the things I explicitly write that I believe. PLEASE DO NOT assign any views to me simply because I link to an interesting article

[Guest]

Re: Jason Hommel asks a VERY interesting question

<<

While gold was first discovered in Alaska during the 1870s, the 1890s have come to be known as the Yukon-Klondike Gold Rush days, as thousands of rugged individuals swarmed to the northern climes to find fortune and glory. Unsurprisingly, during the winter of 1896-97 the Alaskan ports were frozen solid and therefore closed to all shipping traffic. Food became very scarce and very expensive since new supplies had to be brought in over land at great hardship. Reportedly, a can of sardines that had cost $0.10 in New York could be priced at 10 times that amount by the time it reached the gold miners in Alaska. Still, there was great demand even at such inflated prices.

For instance, in one remote mining town the price of a can of sardines was sold at rapidly escalating prices from $10.00, to $30.00, then $50.00. Finally, one desperately hungry miner paid $100.00 for a can of the highly sought after sardines. He took it back to his room to eat. He opened it. To his amazement he discovered the sardines were rotten. Angered, he found the person who sold him the tin and confronted him with the rotten evidence. The seller was amazed and shouted, "You mean you actually opened that can of sardines? You fool; those were trading sardines, NOT eating sardines!".

The Reality

The action in the precious metals markets is being hard-sold as the end of a bubble when in fact it is nothing more than another skillful manipulation and smash down. A confluence of factors have come together to sell this story including a shutdown of factories in China to help clean up the air for the Olympic games that has temporarily upset commodity demand from the most important user. A lot of fuss has been made of the decline in India for jewelry demand yet a huge factor in that market was the sudden unwillingness by the Western bullion banks to extend the usual bank lines of credit that has disrupted the usual workings in that market so that backlog will soon manifest itself. >>

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Another unprecedented event has been the incredible fact that you no longer have to pay to “lease” gold and silver, the bullion banks now actually pay derivatives dealers to take it and sell it.

[Rajiv]

Re: Jason Hommel asks a VERY interesting question

The action in the precious metals markets is being hard-sold as the end of a bubble when in fact it is nothing more than another skillful manipulation and smash down.

You are being a bit paranoid yourself aren't you? ;)

[kingcopper]

Re: Jason Hommel asks a VERY interesting question

I don't ever subscribe to such paranoid beliefs but there is definately a concerted effort to crush silver's true dollar value right now. I'd buy all I can get right now but my most excellent source has raised premiums on 1 oz. bullion and SCRAP by a factor of 4! Silver might as well be trading for $17 an oz anyway. How much does an ounce of silver cost anyway after all associated mining expenses? I've been told around $17 an oz. Is silver free?

[Guest]

Re: Jason Hommel asks a VERY interesting question

Rajiv -

Did you notice the quotation marks? I am agnostic, not only in metals manipulation but on much of any other conspiracies also. I believe that the entropy inherent in the randomness of unfolding human history decimates conspiracies with great efficiency, and that the proponents of conspiracies are for the major part hapless dupes who abdicate their otherwise perfectly good capacity for skepticism. As I explicitly noted to you in the previous post on another thread, all positions inviting an understanding based on collusion and secretive manipulations should be approached with extreme caution - that implies that agnosticism is in fact the most appropriate approach in 99% of all instances where manipulative collusion is suspected, because the mere accretion by natural progress f vested interests is far more often the case, and this is by no means the same thing as collusion.

However, in a few cases, the cumulative evidence for a premeditated and concerted collusive / manipulative action builds, to such a point as to be much more difficult to refute.

In the case of the minutes of the closed session congressional meeting, we have nothing - zip, nada, to even prove they occurred as such, let alone of any collusion. I therefore would have heavily qualified anything I posted on that topic as having any credibility. In the case of the manipulation of silver, we have the recent work of Butler tracking the 400% increase in silver short positions, by big banks exclusively, and coinciding within a one month period with the largest decline in this metal in nearly a decade. We have some similar work posted by Bart which shows an extraordinary resemblance in USD/ EURO currency trades typefied by a startling concentration and SIZE of 'ONE WAY" bets, and all suddenly emerging within a very narrow time window. I'd call this cumulatively, at very least a firmer and more serious intel. Probably a lot firmer.

To equate as equivalently rational, the existence of a "closed session" of congress which was the "air tight and leak proof" venue for discussion of a national coup d'etat seems a notable stretch as a comparison. The idea that a "closed session" of the US congress is an "airtight chamber for the subversion of the US constitution" verges almost on the comical, no?

In that case, ambiguous references, without attributions beyond rumor, posted without explicit disclaimers, which expand on the "gruesome details" of plotting of a "USA KRISTALLNACHT" are the difference between informed, cautious acceptance of possible collusion, and a blanket approach which introduces the possibility for collusion everywhere.

Let us keep rhetorical objections aside here. And once again, I would simply repeat Spartacus's own request below. Unless a claim is specifically made and "explicitly owned" by a poster, it is misrepresentation to suggest the content they post is their specific declared position. BTW, I have seen little compelling evidence for the "Bilderberger Collusion" either.

Respectfully.

NOTE: the ONLY things I believe are the things I explicitly write that I believe. PLEASE DO NOT assign any views to me simply because I link to an interesting article

You are being a bit paranoid yourself aren't you? ;)

[Spartacus]

Re: Jason Hommel asks a VERY interesting question

there doesn't need to be any secret conspiracy - a small number of independent organizations discover a way to make money. Because the number of organizations is small, and they are all large organizations, their activities end up creating enormous concentration, and end up affecting the price.

Certainly I don't believe there is any secret conspiracy - why bother with secrecy

I can believe that these new shorts made some kind of calculation that suggested the new short was in their best interests. Maybe they did not figure the market is so small that their activities would have this affect.

OR

they looked at the COMEX and CFTC actions and independently thought they could do anything they want with impunity - with no risk of backlash from regulators. No secret conspiracies needed. the seeming blase, let the shorts do whatever they want attitude of the regulators in Silver (deserved or not) is common knowledge.

Of all these scenarios I'm painting for you, secret conspiracies are not needed. They may be there, but there's no need for them to explain events.

I don't ever subscribe to such paranoid beliefs but there is definately a concerted effort to crush silver's true dollar value right now. I'd buy all I can get right now but my most excellent source has raised premiums on 1 oz. bullion and SCRAP by a factor of 4! Silver might as well be trading for $17 an oz anyway. How much does an ounce of silver cost anyway after all associated mining expenses? I've been told around $17 an oz. Is silver free?

Like I wrote, maybe it's concerted, maybe not ... but it IS a buying opportunity - if you can find the Silver to buy.

[mesyn191]

Re: Jason Hommel asks a VERY interesting question

Apmex and a few other sites got some 1,000oz bars and 500oz and 32oz bags of silver shot in a few days ago, stocks are low (often only 1 or 2 of the 1,000oz bars in stock if at all...) but you can still get significant (well, significant quantities from my perspective, if you're the sort that buys 5,000oz+ every other week then yes I bet things seem damn scarce to you...) quantities of it at a good price (.40$ a oz premium on the 1,000oz bars, goes up significantly on the smaller bars of course, personally I like the 32oz silver shot ;) ).

[tombat1913]

Re: Jason Hommel asks a VERY interesting question

I don't ever subscribe to such paranoid beliefs but there is definately a concerted effort to crush silver's true dollar value right now. I'd buy all I can get right now but my most excellent source has raised premiums on 1 oz. bullion and SCRAP by a factor of 4! Silver might as well be trading for $17 an oz anyway. How much does an ounce of silver cost anyway after all associated mining expenses? I've been told around $17 an oz. Is silver free?

I can't see a mining company selling at that kind of a loss.

[Spartacus]

Re: Jason Hommel asks a VERY interesting question

remember that copper, zinc & lead miners make up most of the Silver supply. the Silver income is a small fraction of their output/profit.

Barrick is one of the world's largest Silver producers, but no one who wants to "play" Silver buys Barrick stock. The profit/loss on the Silver is the least of Barrick's concerns. I suppose they could tune their processes for higher yield on Copper and others if the Silver price is really low, and absolutely, a low price should force the closure of some primarily-Siver or Silver-only mines.


AND ... and there is some srewy stuff in the mining industry that I just do not understand.

the CEO of PAAS (I don't know if it's the same guy today) is on the record saying he wants to be the largest Silver producer in the world - not the most profitable - the largest. What kind of sense does THAT make? Companies are suppose to MAKE A PROFIT. They're not supposed to exist to satisfy some egotistical sh*t head's idea of "I'm a bigshot" . He was hired as CEO because of past reputation, and apparently thinks of himself as some kind of gift from god, but he's basically been mining Silver as fast as he can - AFAICT, he's basically depleting an in-ground resource at uneconomic prices.

Puplava at one point contrasted Bob Quartermain with another Silver mining executive - BQ has minimal staff, minimal office space, does his road shows by himself. The other guy does everything first class - huge, opulent offices, first class travel, the whole bit. Based on this and other reports, I can guess who this other exec is.

I can't see a mining company selling at that kind of a loss.

they do it, whatever their reasons ... I remember angry commentary in the 80s about Armand Hammer continuing to mine Silver at a loss for years and years at a primary Silver mine. Who knows why he did it - found some way to make money regardless? Love of losing money?

Also remember that Silver Standard only just started the process to go into production because Silver made no economic sense to mine by itself until late 2006.

At a time where no one is selling their SLV (real Silver), PAAS is shelling out their Silver hand over fist - and they've done it for years, yes, on many occasions below the cost of production.