What I had long suspected to be true was confirmed the other day when Mike Maloney from goldsilver.com revealed on RT's Capital Account that it is normal practice for one party (read JPMorgan) to hold 30% of the entire Silver market. This means two things. 1) That if you take the top 3 market participants, they would in all likelihood control upwards of 70% of the whole Silver market, making collusion very likely and profitable. Secondly, if one company owns 30% of any market, then they can swing that market in any way they wish, which explains why the Silver market has been completely unaffected by fundamental forces for the last 12 months. Many people have wondered over the reason, but the answer is simple, the market is rigged to hell.
This also means that price discovery is severely hindered. The actual price for physical Silver is likely to be higher than the quoted spot price, since spot includes all the paper silver currently circulating on the exchange. It will only take one crisis of confidence in a Silver ETF for people to start demanding physical delivery. If this happens, the price will go through the roof very quickly.
I suspect that JPMorgan used the recent dip in the silver market to get rid of the 128Million Ounces of shorts that they inherited from Bear Stearns. They may have lost some money, but nowhere near the amount of money they would have lost if silver was at it's true price of $40 an ounce.
You can watch the video here:
A Blog about the constantly moving world of finance with a focus on the struggle between the paper gold and physical gold markets and the manipulations used by large banks to keep precious metals prices down. I believe these events will eventually lead to the collapse of the paper fiat economy, leaving anyone who is holding paper instead of physical commodities totally broke. Now is not the time to own paper.
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