Thursday, May 5, 2011

Another Rate Hike......

As I had suggested in my article yesterday……..

From Zerohedge:

CME Hikes Silver Margins By 17%: 4th Hike In 8 Trading Days

Submitted by Tyler Durden on 05/04/2011 17:36 -0400

"Nobody could have foreseen this. Nobody. At this point there is nothing left to comment on what is a concerted action to "mitigate" any and all risk in the commodity market but could as well be classified as executive order 6102.5. While we were joking before that soon one will have to post more cash than an silver contract is worth, we are now forced to reevaluate this sarcasm."

In addition to this Goldman Sachs (if you can believe a word they say) and others are calling for a temporary reversal in the dollar which would put further pressure on the commodities. Luckily that should include oil. If the dollar rallies and oil doesn’t retrace we have big problems. That would mean that dollars are being sold at an increasing rate throughout the world. Typically that would mean silver and gold would rise but as you can see the paper market in silver is at this point controllable.

Remember, there are TWO markets in silver: paper and physical. There is a shite load of paper silver and the price is easily controlled through margin hikes. Most people in the paper market are not interested in physically owning the metal. They don’t even think there’s a problem with the dollar as our nation’s debt ceiling is about to surpass the GDP. You can only hike so high however before you destroy that market. As I’ve said before, when the Comex is going through the process of defaulting the paper price of silver will go down and the physical price goes up.

Apmex which has usually charged $1.29 in premiums over spot is now charging $3.79 in spot. Physical sellers tire of the Comex but they don’t make the rules.

No comments:

Post a Comment