Loading ...The metals this morning, Wednesday, Sept. 11, 2019
I am showing only silver, although the pattern is similar for gold. Silver is more volatile and therefore displays price changes better. Last night and this morning, the Chinese returned to the metals on the buy side. You can see this last night (red line) with a surge of ten cents upon the opening of the SGE at 9:30 pm, although silver firmed all day yesterday. The buying continued into this morning (green line) and we now wait for the market to eliminate any gap up by opening at $18.10. From there on, it’s up to that whale who has been buying silver or other idiots who are still hanging on to the wrong end of that huge Open Interest in COMEX silver to cover their exposure.
Silver may be above its cost of production by a dollar or so, but it is still dirt cheap at barely above half what it was priced at 39 years ago when it sold for $34 in dollars twelve to fifteen times worth more. To put the inflation adjustment back in for today’s tiny dollars, the price of silver needs to be at least $400 per ounce just to equal the average price for 1980. So this ‘rally’ in silver prices does not impress. In fact, it is a cruel joke. The reason silver is still down here under $20 is because COMEX and London are selling infinite volumes of paper silver to drown any advance in paper silver. Last Friday, COMEX sold a BILLION ounces of paper silver to quash the silver market. They did this to block an immanent breach of $21 in the spot market that might have initiated a buying frenzy in paper silver on COMEX.
All of this selling is designed to block the real breakout for silver that resides above $21. I watched a video yesterday with Chris Marcus in which $800 silver was quoted as a price goal for silver. That did not overly impress me either. A day’s average wage in 1900 was a tenth ounce of silver for an American. An average day’s wage today is $250. To reach that 1900 valuation for silver, simple arithmetic requires a present price of $2500 per ounce. Even if you back calculate inflation to 1970, the price of silver must rise 50 fold from it’s 1970 level. Since the price of silver was about $1.80 U.S. in 1970, that implies a present value of $90 but realize that the 1970 price had been fixed by the Treasury department using sales from the strategic stockpiles. These were exhausted by 2006. Essentially, silver has had its price imposed by Anglo-American interests for all of the 20th century. One has to wonder why.
Harvey Organ believes if silver blows up to its real fair value, it will take down the entire financial system, starting with the big banks who are mega short silver. Given the efforts being exerted to suppress the silver market, I have to wonder if Harvey’s conclusion may be valid. The effort to suppress silver is far greater than the effort to suppress gold. Just look at the silver open interest on COMEX compared to world stockpiles. COMEX alone has shorted more silver than exists in all world stockpiles and that’s just the open interest, not the total volume of selling. So, there is something really wrong with the Western centric financial system, and it seems to be related to silver. As a general rule, all of the world’s derivative silver markets sell the total above ground stockpiles of silver EVERY DAY. So, what is it about silver that requires a blitzkrieg of selling every day to keep its price suppressed? Rhody