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The reason for silver's rise

Apr 27, 2011

http://seekingalpha.com/article/265381-short-sellers-now-screaming-about-a-buy-side-silver-conspiracy

This illustrates that the COMEX is now just a sideshow. A lot of people are simply buying physical silver.

The silver buyers do include some billionaires, undoubtedly, but most of them are simply folks who watched Jeffrey Christian's testimony at the well publicized CFTC position limits hearing back on March 25, 2010, and came away with the distinct impression that a small group of London banks have been creating alchemic silver. The banks were ostensibly "selling" and then "storing" so-called "unallocated silver bars" for silver investors. In reality, they seem to have been maintaining a fractional banking system in which only one physical ounce is really purchased for every 100 ounces they supposedly sell.

Let's go over that again...because once you understand the particulars, the reaction of the price of silver becomes perfectly understandable. 1) Bank sells silver, a very precious item, for big money; 2) Bank doesn't buy the silver it sells, or, if it does buy it, leases out or sells 99 ounces for every 1 ounce in the vault; 3) Bank gets paid "storage fees" from all its customers, even though their silver is not in the vault; 4) Bank profits are equal to 99 times what it sells initially, and then, the value of the stream of storage fees after that. Nice work if you can get it....

Had the worldwide silver scam remained a secret, suppression of precious metals prices might have gone on forever. But the genie is now out of the bottle and mortal men, not even those who run casino-banks, cannot hope to put him back in. Once it became clear that the bullion banks were leveraged 100 to 1 in a silver based fractional banking scheme, it was only a matter of time before the market clobbered them. That is what is happening.

COMMENT: Back in 1980 when the price of silver hit $50, it was the result of two brothers who were able to corner the market on silver. They were billionaires, and there was a shortage of silver, so they were able to buy up much of the available silver, causing the price to rise dramatically.

The government stepped in an forced them to disgorge their silver. That is how the government forced the price of silver back to its very low levels.

This time, however, there are millions of little people, each buying a little silver. It's hard to call that a "conspiracy," because if so, it is the most disorganized conspiracy in history. The COMEX has been used to manipulate the price of PAPER contracts for silver by appearing to "sell" what is not there. This creates an artificial "glut" of silver, and the price then falls. But the little people have reacted by saying, "Oh, boy, look at these bargain prices! Time to buy again!"

This has served to create a physical shortage of silver on the actual market. So while the COMEX continues buying and selling paper silver, they have only succeeded in creating bargain prices for the average person, who then goes to a coin dealer and buys silver coins, bars, or rounds.

In this way, the Lilliputians have overwhelmed the Giants of Manipulation. They have done it by buying physical silver, rather than speculating in paper contracts.


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Category: Financial

Dr. Stephen Jones


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