Silver is being wrecked by COMEX Silver Futures Contracts.
In these contracts you can purchase an option on 5,000 ounces of .999 pure silver. You purchase the option, but do not HAVE to exercise it.
If you short, you buy the silver for the price of the option, and sell it today. At the end of the contract you must give silver BACK to the entity you borrowed it from.
The name of the game is to borrow the silver and sell it today at a high price, believing it’ll be cheaper at the end of the contract. At the end of the contract you buy 5,000 ounces of cheap silver and give it back to the lender. You pocket the difference in prices minus the cost of the contract. When the short seller has to go buy the silver to make the lender whole, the seller has to go to the silver market and BUY silver. The buyer increases demand. This will drive the price up, at least a little, maybe a lot. If there are too many short contracts that need to be made whole their buying activity can create a “Short squeeze,” driving prices through the roof, rewarding us hodlers, and crushing the shorties.
Except that’s not how it works. You can read it for yourself at https://www.cmegroup.com/confluence/display/EPICSANDBOX/Silver
Tier 1: The active contract month settles to the volume-weighted average price (VWAP) of the trades executed on CME Globex between 13:24:00 and 13:25:00 ET, the settlement period, rounded to the nearest $0.001 per troy ounce.
Tier 2: If there is no VWAP, then the last trade price is checked against the bid/ask.
If the last trade price is outside of the bid/ask spread, then the contract settles to the nearest bid or ask price.
If the last trade price is within the bid/ask spread or if a bid/ask is not available, then the contract settles to the last trade price.
Tier 3: If there is no last trade price available, then the prior settle is checked against the bid/ask.
If the prior settle is outside of the bid/ask spread, then the contract settles to the nearest bid or ask price.
If the prior settle is within the bid/ask spread or if a bid/ask is not available, then the contract settles to the prior settlement price.
The contracts settle not in silver, but in dollars. By allowing these contracts these crooked bastards essentially have tied silver to the dollar, but not the dollar to silver. They’ve allowed a facility that allows exchange of dollars for silver without actually moving silver. This has made silver inflationary along with the dollar.
In other words, if the short seller had to settle the contract in silver, silver demand would be much higher, therefore silver prices would be much higher.
Additionally, more shorts can be made than silver in existence.
Silver is being manipulated heavily. COMEX allows it and your government allows it.
Silver will continue to be VERY low until no one wants the dollar. When that happens you’ll be able to take your family to a nice steakhouse for four 1964 American Silver Dollars.
When are people going to get mad about this stuff? When are people going to realize the Bible (and Islam) is right about usury?
What’s going to happen when they get mad?