Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Update - Nadeem_Walayat
2.Will Deutsche Bank Crash The Global Stock Market? - Clif_Droke
3.Gold Price In Excess Of $8000 While US Dollar Collapses - Hubert_Moolman
4.BrExit UK Economic Collapse Evaporates, GDP Forecasts for 2016 and 2017 - Nadeem_Walayat
5.Gold Stocks Massive Price Correction - Zeal_LLC
6.Stock Market Predicts Donald Trump Victory - Austin_Galt
7.Next Financial Crisis Will be Far Worse than 2008/09 - Chris_Vermeulen
8.The Gold To Housing Ratio As A Valuation Indicator - Dan_Amerman
9.GDXJ Gold Stocks - A Diamond in the Rough - Rambus_Chartology
10.Gold Boom! End Game Nears As Central Banks Buying Up Gold Mining Companies! - Jeff_Berwick
Last 7 days
Gold’s Moving Averages and Long-Term Outlook - 26th Sept 16
September Stock Market - The Not So Silent Demise of Deutsche Bank - 26th Sept 16
SPX sell signal confirmed - 26th Sept 16
SPX is testing the next level of support - 26th Sept 16
Outrageously Entertaining US Presidential Campaign Final Stages - What Happens Next? - 26th Sept 16
BoJ, FOMC and Where To Now? - 26th Sept 16
Stock Market New All Time Highs Next - 26th Sept 16
Why Trump Will Win US General Election 2016 Prediction Forecast - 26th Sept 16
Martial Law Rolls Out Across the US As Jubilee Nears - 26th Sept 16
Stock Market More Correction Likely - 25th Sept 16
US Presidential Election Forecast 2016 - Trump Riding BrExit Wave into the White House - 25th Sept 16
US Economy GDP Growth Estimates in Free-Fall: FRBNY Nowcast 2.26% Q3, 1.22% Q4 - 24th Sept 16
Gold and Gold Stocks Corrective Action Continues Despite Dovish Federal Reserve - 24th Sept 16
Global Bonds: Why Our Analyst Says Things Just Got "Monumental" - 24th Sept 16
Where Did All the Money Go? - 23rd Sept 16
Pension Shortfalls Could Be 4X To 7X Greater Than Reported - 23rd Sept 16
Gold Unleashed by the Fed - 23rd Sept 16
Gold around U.S Presidential Elections - 23rd Sept 16
Here’s Why Eastern Europe Is Doomed - 23rd Sept 16
Nasdaq NDX 100 Big Cap Tech Breakout ? - 23rd Sept 16
The Implications of the Italian Banking Crisis Could Be Disastrous - 22nd Sept 16
TwinLakes Theme Park Summer Super 6 FREE Return Entry for Real? - 21st Sept 16
Has the Silver Bullet Run Out of Fire Power? - 21st Sept 16
Frack Sand: The Unsung Hero Of The OPEC Oil War - 21st Sept 16
What’s Happening With Gold? - 21st Sept 16
Gold vs. Stocks and Commodities, Pre-FOMC - 20th Sept 16
BrExit UK Inflation CPI, RPI Forecast 2016, 2017 - 20th Sept 16
European banks may be more important than the Fed this week - 20th Sept 16
Gold, Silver, Stocks and Bonds Grand Ascension or Great Collapse? - 20th Sept 16
Mass Psychology in Action; Instead of Selling Gilead it is Time to Take a Closer Look - 20th Sept 16
Hillary - Finally Well Deserved Recognition for Deplorables - 20th Sept 16
Fascist Business Model: Reich Economics - 19th Sept 16
Multiweek Correction in Gold and Silver Markets Continues - 19th Sept 16
Stock Market May Turn Ugly This Week - 19th Sept 16
China Is Digging Itself into a Deeper Hole - 19th Sept 16
Yellen’s Footnote 8 Would Put Interest Rates on Autopilot - 19th Sept 16
Central Bank Digital Currencies: A Revolution in Banking? - 19th Sept 16
UK Government Surrenders to China / France to Build Nuclear Fukushima Plant At Hinkley Point C - 19th Sept 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

Silver, But No Silver Lining

Commodities / Gold & Silver Dec 12, 2008 - 06:39 AM GMT

By: Robert_Singer

Commodities

Best Financial Markets Analysis ArticleThe end of our consumer society is on the horizon, which should be no surprise to anyone who took Economics 101. Do we really expect to spend our way out of this mess by buying and selling each other useless cheap stuff from China ?

As the financial collapse gathers steam, gold and silver oracles like Butler , Friedman, Morgan and Turk who have been predicting for years the launch of the price of silver to the moon will see their prophecy fulfilled, but a celebration is not in order.


Being wealthy during the last 60 years of unprecedented prosperity at the expense of the Third World and the environment is one thing, but profiting from a bull market in silver when millions of hungry Americans are living in tent-cities next door is quite another.

A default at the Comex that will ignite the explosion in the price of silver and gold is in progress. Investors turned away from the bullion and coin dealers who refuse to sell silver at the $9 paper price opened commodity futures brokerage accounts. They hope to take delivery of the real thing--silver bars with serial numbers--at the manipulated price of $9 an ounce before the Comex has to shut down and admit they never had enough real silver.

Silver delivery at $9 per ounce is courtesy of The Shorts, the largest concentrated short position by four or less dealers in financial history.

Ted Butler, a brilliant researcher, has been writing about the concentrated short position in silver for years and initially thought the default at Comex would come when the dealers ran out of liquidity, but his research suggested otherwise: “Even when holding extremely large short positions and incurring massive unrealized paper losses, measuring in the many hundreds of millions of dollars, the dealers have never collectively turned tail and bought back their short positions to the upside.”

Shorts to Comex and the regulators: The dramatic price decline in August from $21 to $ 9 is our parting gift to you for looking the other way during our obvious manipulation of prices in the War on Precious Metals. We had to prevent gold and silver from gaining legitimacy as stores of value or consumerism would not have become hyper-consumerism. Mopping up our mess will be easier at $9 instead of $21.

The Comex maintains a guarantee fund and insurance policy to meet a clearing member default, but it has only about $250 million, which is insufficient to cover the losses, but imagine a default at $50 or more per ounce.

Why has the price of silver historically been suppressed, stuck for years in th e $4 to $5 trading range?

The downward price manipulation of silver caused by the excessive and uneconomic short position on the Comex has been the subject of most of Butler 's research. His explanation for market fluctuations are often greed-and-profit but he just as often contradicts himself and writes: “It is my contention that this uniquely large and concentrated short position in silver explains why the price is still cheap. Therefore, in spite of the open losses the shorts are experiencing and the great profits accruing to silver investors, the price manipulation is still in place.” James R. Cook, president of Investment Rarities, credits Ted Butler for the vast majority of investment silver purchased in the past seven years, but when Cook asks the obvious question, “Isn't the manipulated downward price consistent with a strategy to encourage the purchase of silver?”, Ted is unable to provide a greed-and-profit motive and repeats what has become his mantra, “My main motive has been and still remains doing what I can to end this manipulative crime in progress.”

It is manipulative and it is a crime, but Ted Butler is unable to consistently support a profit motive because there isn't one. The Puppet Masters manipulate the paper price of the precious metals downward to prevent gold and silver from gaining legitimacy as stores of value instead of the fiat currencies we call money.

Behind every consumer society is the reality of a credit-based monetary system and a fiat currency. There is not enough gold and silver in the world to back the trillions of dollars required for the industrial revolution and the global consumer economy. Behind every fiat currency is a Federal Reserve or a Central Bank controlled by the same men: Rothschild, Rockefeller, Kuhn, Loeb, and Ted Butler's prime suspect in the “ongoing intentional not accidental” great crime of keeping the price of silver low so investors can “buy a lot more metal”: JP Morgan Chase. "The paper margin calls and technical selling in silver was intentionally planned and forced on us by those who held big short positions.”

One of the more absurd notions that found its way into the history books and the writings of economic experts is that somehow these men were made wealthier from the Monopoly money they printed, the same money that enabled consumers to buy houses, cars, furniture and electronics, i.e. the cheap “stuff” we use on a daily basis. Recall that in 1910 these men already controlled one-sixth of the entire world's wealth, and it was real wealth: gold, silver and raw materials in a world before we had a “throw away" mentality and the planet's ecological structures were still in balance.

The Federal Reserve puppet masters orchestrated the Industrial Revolution, the Great Depression, the stagflation of the 1970's and the dot-com and the housing market bubbles, all of which resulted in unprecedented prosperity.

Consumers can thank the puppet masters for all that “stuff” they have because as Ron (sound money) Paul puts it, “Our current system gives us a free ride, our paper (fiat) buys cheap goods from overseas, and foreigners risk all by financing our extravagance.”

Thank them also for the unprecedented environmental damage and pollution caused by our hyper-consumer society.

We have consumed the resources of our planet; and it's time for a change to a sustainable, non-consumer society. When people still had jobs and weren't scared to go shopping, I recommended The Story of Stuff but, thanks to the financial meltdown, consumerism is on the way out, so now the video to watch is the sequel: The Power of Community – How Cuba Survived Peak Oil.

By Robert Singer

Information about Robert Singer and other articles he has written are on his Authors page: http://www.opednews.com/author/author20310.html

Robert Singer is a retired information technology professional and an environmental activist living in southern California. In 1995 he and his cousin Adam D. Singer founded IPC The Hospitalist Company, Inc., where he served as chief technology officer. Today the company manages more than 130 practice groups, providing care in some 300 medical facilities in 18 states. Prior to that he was president of Useful Software, a developer and publisher of business and consumer software for the personal computing Industry.

© 2008 Copyright Robert Singer - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Robert Singer Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Jan Williams
13 Dec 08, 10:29
Robert Singer

Your readers may want to read other interesting and thought provoking articles by Robert Singer

http://www.opednews.com/author/author20310.html


Laurie Mitchell
13 Dec 08, 13:02
Survive Peak Oil, grow your own food

The Power of Community: How Cuba Survived Peak Oil

Cuba adapted, survived, and thrived because they mobilized their entire culture. They made changes requiring cooperation, adaptability, and openness to alternatives. As one Cuban in the film remarks, “When told they needed to reduce energy use, everybody did it.”

http://www.powerofcommunity.org/cm/index.php


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife