@dcarr said:
You accuse others of making stuff up.
You wrote: "[Barrick] COULDN'T suppress the price even if they wanted to."
You made that up, based on faulty assumptions and without doing any research.
Not at all, I followed the gold stocks for 20+ years. Even industry-wide hedging wasn't larger than CB sales.
@Peter89 said:
I realise now that I don't know the difference between the concepts of hedging and short selling.
Until now I naively associated hedging with mining companies and short selling with bullion banks.
Maybe It's just a terminological non-issue, maybe they are synonyms, I don't know, but if someone has some input >on this, please do
Short-sellers try and profit from a drop in price. That is what Barrick and other hedgers were looking to do, the difference is they are COMMERCIAL HEDGERS who produce (go long) the metal. So they have a built-in "hedge" against shorting in that they can deliver the underlying product (gold).
The fear is that if you short....your losses are UNLIMITED. If you go long gold, your losses are capped at the price you paid (if it goes to zero).
So Barrick and other hedgers are "short-sellers" but they are hedged short sellers. They are called commercial hedgers by the CFTC and other reporting services. A hedge fund selling short is a speculator...they don't produce gold.....if it goes up, they have to buy back and cover their losses.
Barrick only made like $150-$175 MM a year as I recall.....$2 BB over a decade-plus....this was NOT a huge source of revenue for them.
@dcarr said:
You accuse others of making stuff up.
You wrote: "[Barrick] COULDN'T suppress the price even if they wanted to."
You made that up, based on faulty assumptions and without doing any research.
Not at all, I followed the gold stocks for 20+ years. Even industry-wide hedging wasn't larger than CB sales.
That's my priority for evaluating fundamentals. Goldminer WORKED for a gold company....ask him if hedging or CB sales are more important.
.
I never made any statements about which was larger or more important.
As a significant fringe player, Barrick WAS able to affect the gold price, despite what you claim.
Short-sellers try and profit from a drop in price. That is what Barrick and other hedgers were looking to do, the difference is they are COMMERCIAL HEDGERS who produce (go long) the metal. So they have a built-in "hedge" against shorting in that they can deliver the underlying product (gold).
Thank you GF
I get the fundamental difference in the business model between commercial hedgers and short selling speculators.
My only problem was the fact that producers/commercial hedgers, after having sold their future production, are in the same position of short selling hedge funds, until they have produced what they have previously sold.
So in the meawhile - while they produce what they have previously sold - producers/commercial hedgers and short selling hedge funds are in the same position, so to speak.
Anyway, I think we have successfully highjacked the original subject of this thread
@dcarr said:
I never made any statements about which was larger or more important.
As a significant fringe player, Barrick WAS able to affect the gold price, despite what you claim.
AFFECT the gold price, at the margin, minisculely ? Maybe.
Set the price ? Drive it down ? Move it down alot ?
My only problem was the fact that producers/commercial hedgers, after having sold their future production, are in > the same position of short selling hedge funds, until they have produced what they have previously sold.
Presumably, they are constantly producing gold so they are always in a position to deliver the product. It's not like they only get the mined gold once or twice a year. So it works out for them. Again, they probably cover their shorts most of the time by closing out the short position NOT by delivering the metal. Ditto oil hedgers.
So in the meawhile - while they produce what they have previously sold - producers/commercial hedgers and short selling hedge funds are in the same position, so to speak.
Yeah, they are. Just that the producers/commercial hedgers have 2 ways to close their short positions, speculators have only 1 way to do it.
Anyway, I think we have successfully highjacked the original subject of this thread
@dcarr said:
I never made any statements about which was larger or more important.
As a significant fringe player, Barrick WAS able to affect the gold price, despite what you claim.
AFFECT the gold price, at the margin, minisculely ? Maybe.
Set the price ? Drive it down ? Move it down alot ?
Absolute rubbish.
.
In 1980, two wealthy brothers drove the price of silver from $4 to $50.
In 1980, two wealthy brothers drove the price of silver from $4 to $50.
Good point DC!
The Koch brothers, sentenced for having manipulated the comex and indirectly the international price.
(I'm not sure about the "from $4 to $50" part, but that's not the point)
Unless the findings justifying that sentence were false - I think there is a general agreement that the Koch brothers did influence the silver price, the disagreement concerning the question about the illegality of their deeds - that story shows how easy it is to move the worldwide market price of a commodity (probably because of the fact that the price is set at the margin).
It would be interesting to know how many short contracts the Koch's scheme involved, and compare that figure e.g. with how many short contracts Barrick sold.
Just to have a rough idea about whether - based on the sheer quantity of metal sold on the comex - Barrick could have influenced the gold market (which would neither be proof of them intending to influence the gold price nor of them collaborating with the Central Banks etc.)
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@dcarr said:
In 1980, two wealthy brothers drove the price of silver from $4 to $50.
No, the price was already at $15 when they made their move in late-1979.
And markets were much smaller and illiquid back then, both silver and gold.
Ok then $15 to $50.
That is still a lot from small-time siblings.
Barrick could have easily done similar (in the other direction) if they had wanted to go that far.
PS:
The silver price started 1978 at about $4.90 and ended 1978 at about $6.20 .
The silver price started 1979 at about $6.20 and ended 1979 at about $25.00 .
But note that as late as August 1979 silver had still never gone above $10 .
That is likely when the Hunt Brothers really came in, starting at about $10, not $15.
But they could have started buying silver a couple years earlier - no data on that.
The silver price moved when the futures prices lifted off in early-1980. I remember...I had to write a report on it for my social studies class in high school !!
@GoldFinger1969 said:
The silver price moved when the futures prices lifted off in early-1980. I remember...I had to write a report on it for my social studies class in high school !!
Can you not see the 1979 chart I posted ?
That sure looks like a "lift-off" in September 1979, and again in December 1979.
No, only Nelson and Herbert. Lamar was busy trying to replace Hank Stram for his NFL Chiefs team.
He may not have been directly involved in the beginning, but surely was aware of it and still got dragged into some of the the aftermath.
In August 1988, a federal grand jury ordered Nelson Bunker Hunt, William Herbert Hunt and a third brother, Lamar Hunt, to pay more than $130 million in damages for conspiring to corner the world’s silver market and for ruining the investments of Minpeco, a mineral marketing company of the Peruvian government.
No, only Nelson and Herbert. Lamar was busy trying to replace Hank Stram for his NFL Chiefs team.
He may not have been directly involved in the beginning, but surely was aware of it and still got dragged into some of the the aftermath.
In August 1988, a federal grand jury ordered Nelson Bunker Hunt, William Herbert Hunt and a third brother, Lamar Hunt, to pay more than $130 million in damages for conspiring to corner the world’s silver market and for ruining the investments of Minpeco, a mineral marketing company of the Peruvian government.
Those were the days.
Too bad they couldn't pump the price of the gutter up today. I mean arguably it's sitting at $22 and realistically probably worth somewhere in the neighborhood of $12 but a nice temporary manipulation back to $50 sure would be nice.
Sorry for talking about gutter in a thread about the metal of kings. Didn't want to divert but looks like it already was. THKS!
I think talking about peak commodity x makes sense only assuming a certain x's value,
because increasing x's value normally --> increasing exploring/development/production of x.
I didn’t write a paper on it in my social studies class, but I was making quite a bit of money in gold & silver forward contracts (on margin) in both 1979 and 1980, until my broker had me get out at around $650.
I made more one day in 1979 than my annual salary that year. It will probably happen one more time before I’m gone - in the not-too-distant future unless gov.com tries to pull a fast one.
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said:
I didn’t write a paper on it in my social studies class, but I was making quite a bit of money in gold & silver forward >contracts (on margin) in both 1979 and 1980, until my broker had me get out at around $650.
I made more one day in 1979 than my annual salary that year. It will probably happen one more time before I’m > > gone - in the not-too-distant future unless gov.com tries to pull a fast one.
I can see some short-sellers or gold leasers who always make $$$ and get complacent getting caught by a short-term spike in gold and the metal then moving like $500 in a week.
@jmski52 said:
I didn’t write a paper on it in my social studies class, but I was making quite a bit of money in gold & silver forward contracts (on margin) in both 1979 and 1980, until my broker had me get out at around $650.
What was your strategy?
Did you have some general trading rules?
@dcarr said:
Wow, don't look for me to become one of your clients any time soon.
Barrick Gold what the biggest forward seller. They had a plan and it worked fairly well, for a while. They sold a lot of >forward production into the market to drive down the gold price. Why would they want a lower gold price ? So that >they could buy up other gold mining companies on the cheap. Then use production from those other companies to >fulfill Barrick's delivery contracts. The mining industry eventually started to resist this activity and one of the things >that a number of mining companies did was to end forward selling. Barrick had difficulties in producing enough >gold for their hedge book, even after taking over the other mining companies.
Barrick was a highly-speculative and manipulative company that seemed more interested in "financial engineering" >than actually mining gold. A gold mining company might be able to lock in a price for their future production. But >locking in the operating costs for that future production is another matter.
No, the reason for the forward selling was to take into account the normal contango where future prices are HIGHER than spot prices. No one company can drive down the gold price, that's the same conspiracy nonsense we heard from gold bugs over the decade. Homestake and Newmont and Agnico-Eagle and Franco-Nevada all did more M&A than Barrick -- and none had big hedging programs.
Barrick's strategy was correct for the 1980's and 1990's. It didn't work after 2000.
I’d suggest that buyers of gold need to be part of the equation including manufacturers, processors, governments and more buy gold futures to take delivery.
As their demands lessen, gold price weakens in dollar terms.
"Poets are the unacknowledged legislators of the world." PBShelley
What was your strategy?
Did you have some general trading rules?
My strategy at the time was that because of rising inflation, I wanted to own bullion - and I was young & bold. I had already bought a couple bags of Morgan Dollars from Nunemakers - which was kinda cool at the time.😎
One evening in 1978 or 1979 - I forget exactly when - I was contacted by a Terry Ziegler with International Precious Metals Corp. out of Fort Lauderdale, and he convinced me to get into some gold & silver margin contracts. I rode them out and when I cashed out, I took delivery of 2 rolls of British Sovereigns as trophies, paid for most of my ex-wife's law school at Wash U. and bought an A-frame in a wooded resort outside of St. Louis.
My trading rule was that I followed Terry's advice when he called me and suggested that I get out. I subsequently made a mistake in buying another silver contract from him in March of 1980 and promptly lost about $1,000 before calling it quits in a hurry.😉
Unless you count some 100 oz. Sunshine bars in the late 1980's, I didn't get back into silver again until 1998 & 1999. I started back into gold in 1987 with some of the newly-issued AGEs, and platinum in 1996 with some Platinum Maples.
My longterm strategy has been steady accumulation, averaging in when I had enough cash to make a decent buy. The only influence price levels have had on my strategy was that when prices were higher I had to wait a little longer before saving enough cash to make another purchase.
The larger the purchase, the more thought has to go into selecting the type of bullion you buy. There's always a feeling of diving off the high diving board right before pulling the trigger, so you have to make sure that it makes sense at the time.
I still don't see anything wrong with that approach.
Given the current state of the world, I don't see any better places to be than in physical precious metals, and maybe some cash.
I’ve participated in two precious metals bull market cycles. You never really know what to expect, but I do sleep soundly having physical metals - more so than I ever did in playing the stock market.
Q: Are You Printing Money? Bernanke: Not Literally
@dcarr said:
Can you not see the 1979 chart I posted ?
That sure looks like a "lift-off" in September 1979, and again in December 1979.
The Hunt's were in silver long before it spiked. They added the biggest $$$ as it lifted off, did lots of buying in the $20's.
.
In your previous post, you claimed that the Hunt Brothers didn't get into the market until after it reached $15 in 1980.
But now you claim that they were active in the silver market long before that ?
Their activity likely started lifting the silver price starting in 1972.
As I stated previously, this one moderately-large fringe player was able to move the market price significantly.
@dcarr said:
Can you not see the 1979 chart I posted ?
That sure looks like a "lift-off" in September 1979, and again in December 1979.
The Hunt's were in silver long before it spiked. They added the biggest $$$ as it lifted off, did lots of buying in the $20's.
.
In your previous post, you claimed that the Hunt Brothers didn't get into the market until after it reached $15 in 1980.
But now you claim that they were active in the silver market long before that ?
Their activity likely started lifting the silver price starting in 1972.
As I stated previously, this one moderately-large fringe player was able to move the market price significantly.
.
There is a lot more money floating around now than in 1980 and many, many more "moderately large fringe players" so why haven't they moved the price since? Silver is such a relatively tiny market. Do they not care to make vast fortunes?
I said the Hunt's got REALLY involved once the price got to about $15 or so. I'm giving an approximate range when their names started to show up in the press. I'm going by The NY Times which I used at that time.
They owned silver for YEARS before it lifted off. And gold.
They put Big $$$ into it as it ROSE instead of selling......they bought more and more futures contracts driving the price up.
@dcarr said:
Can you not see the 1979 chart I posted ?
That sure looks like a "lift-off" in September 1979, and again in December 1979.
The Hunt's were in silver long before it spiked. They added the biggest $$$ as it lifted off, did lots of buying in the $20's.
.
In your previous post, you claimed that the Hunt Brothers didn't get into the market until after it reached $15 in 1980.
But now you claim that they were active in the silver market long before that ?
Their activity likely started lifting the silver price starting in 1972.
As I stated previously, this one moderately-large fringe player was able to move the market price significantly.
.
There is a lot more money floating around now than in 1980 and many, many more "moderately large fringe players" so why haven't they moved the price since? Silver is such a relatively tiny market. Do they not care to make vast fortunes?
.
why haven't they moved the price since?
How do you know they haven't (2003-2011, for example) ?
@jmski52 said:
As the Hunts learned, they can change the rules if the “wrong people” are winning.
That is true, they did change the rules in the middle of the game. Wasn't right but nobody was going to feel sorry for billionaires who cornered 1/3rd of the silver market.
The rule of law means that if there is someone taking unfair advantage of the current legal structure, you put it to a referendum vote and change the law.
You don’t retroactively screw certain people by decree while exempting special interests, which is pretty much how it’s being done now, and that’s exactly what happened to the Hunts.
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said:
The rule of law means that if there is someone taking unfair advantage of the current legal structure, you put it to a >referendum vote and change the law.
You don’t retroactively screw certain people by decree while exempting special interests, which is pretty much how >it’s being done now, and that’s exactly what happened to the Hunts.
No, it was stated in the arbitration agreement they signed that the rules of the exchange can be changed AT ANY TIME. Did you ever seee "Trading Place" at the end where the managing director says that "all accounts to be settled at the end of the day -- no exceptions." Same thing.
BTW, the Hunt Brothers did great damage to the silver and gold markets and scared off a generation of potential investors.
@jmski52 said:
You don’t retroactively screw certain people by decree while exempting special interests, which is pretty much how >it’s being done now, and that’s exactly what happened to the Hunts.
No "special interests" were protected, unless you think millions of jewelry dealers around the world conspired together.
The losses would have been HIGHER had the Hunt's been allowed to continue. What you are saying is akin to letting a bank run 30 or 40-to-1 leverage.
The arbitration agreement was retroactive, illustrating my point that the exchange was allowed to go around the law in order to screw the Hunts.
Allowing the exchange to change the rules in order to screw one group of traders retroactively is what damaged the markets, not the fact that the Hunts were amassing a large leveraged position.
If the Hunts were wrong, the markets would have eventually punished them without the cftc’s or Fed’s illegal interference in the markets.
Speaking of banks, why are they allowed to create money by making loans while having zero reserve? That’s a bunch more than 40 to 1 leverage, and it’s type of mismanagement that has caused the debt problem in the first place. Banking needs to be fundamentally restructured and the Fed needs to be dismantled.
Q: Are You Printing Money? Bernanke: Not Literally
My trading rule was that I followed Terry's advice when he called me and suggested that I get out. I subsequently made a mistake in buying another silver contract from him in March of 1980 and promptly lost about $1,000 before calling it quits in a hurry.😉
@jmski52 said:
The arbitration agreement was retroactive, illustrating my point that the exchange was allowed to go around the > > law in order to screw the Hunts.
Allowing the exchange to change the rules in order to screw one group of traders retroactively is what damaged >the markets, not the fact that the Hunts were amassing a large leveraged position.
They didn't change the rules to screw the Hunt's....they changed the rules to restore market competitiveness. What the Hunt's were doing was ILLEGAL and in violation of numerous laws, including the Sherman Anti-Trust Act.
The Hunt's also used HIDDEN accounts and never DISCLOSED their ownership of Bache Securities which was both trading gold and a custodian for the Hunt's. Blatant conflict-of-interest. You guys rail against the banks, and here was a bank CLEARLY trying to stoke bullish positions to help their largest shareholder.
If the Hunts were wrong, the markets would have eventually punished them without the cftc’s or Fed’s illegal >interference in the markets.
The Fed did nothing. The Hunt's engaged in illegal acitivity and committed fraud, too. I like the Hunt's and hate changing the rules of the game while it's being played, but they broke the law SEVERAL times.
So now you're in favor of manipulated markets, deception, fraud, lying, and misreporting of positions -- as long as it pushes prices UP and not DOWN ??
Speaking of banks, why are they allowed to create money by making loans while having zero reserve? That’s a >bunch more than 40 to 1 leverage, and it’s type of mismanagement that has caused the debt problem in the first >place. Banking needs to be fundamentally restructured and the Fed needs to be dismantled.
They aren't. You are just regurgitating nonsense from anti-banking morons looking to get click-bait. Take a look at a bank balance sheet some time -- it might open your eyes.
Speaking of banks, why are they allowed to create money by making loans while having zero reserve? ...
They aren't. You are just regurgitating nonsense from anti-banking morons looking to get click-bait. ...
From November 27:
The Federal Reserve Board on Monday announced technical details related to reserve requirements for depository institutions, which will remain zero. ...
The Federal Reserve Board on Monday announced technical details related to reserve requirements for depository institutions, which will remain zero. The annual adjustment and publication of the reserve requirement exemption amount and low reserve tranche is required by law and does not indicate a change in depository institutions' reserve requirements.
No reserve requirement except for exceptions. Money out of thin air.
Q: Are You Printing Money? Bernanke: Not Literally
@pmbug said:
The Federal Reserve Board on Monday announced technical details related to reserve requirements for depository > institutions, which will remain zero. ...
Keep reading....
"...For 2024, the reserve requirement exemption amount will be set at $36.1 million, unchanged from 2023, and the low reserve tranche will be set at $644.0 million, down from $691.7 million in 2023."
Not necessary. The Fed issued that press release because they were required to report on reserve requirement exemptions. And they did set some exemptions. And those exemptions are immaterial as they explained. The exemptions would only be meaningful if they actually had a reserve requirement greater than zero, which they do not.
I posted the citation to show you that we do live in an age of zero reserve banking. The Federal Reserve itself is telling you this. Here's another (older) announcement from the Fed:
As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions.
@jmski52 said:
No reserve requirement except for exceptions. Money out of thin air.
The banks hold tons of various regulatory capital. Your problem is you think banking can be eliminated from a modern economy.
Wait for it. . . Central Bank Digital Currencies (when implemented) will eventually eliminate banks (as we know them) from a modern economy.
As for banks being required to hold protective reserves, the FED has historically shown it will bailout not just US banks, but also those outside the US.
Bank failures? One would be justified to assume that the big boys are working behind the scenes to eliminate the little boys. The banking industry is no different when it comes to market share.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@jmski52 said:
The arbitration agreement was retroactive, illustrating my point that the exchange was allowed to go around the law in order to screw the Hunts.
Allowing the exchange to change the rules in order to screw one group of traders retroactively is what damaged the markets, not the fact that the Hunts were amassing a large leveraged position.
Rectroactivity contradicts fundamentally the rule of law.
There is no rule of law where futures decisions can change what is legal today.
The Hunts went so far to ask the authorities if they were allowed to take delivery, getting the go ahead.
Later the authorities changed their opinion.
As you say, this arbitrariness destroyed the confidence in the markets, in particular in the US authorities overseeing the price wise most important silver market worldwide, the Comex.
Comments
Not at all, I followed the gold stocks for 20+ years. Even industry-wide hedging wasn't larger than CB sales.
CB Sales....SWF sales....Institutional sales.....jewelry demand...hedging.
That's my priority for evaluating fundamentals. Goldminer WORKED for a gold company....ask him if hedging or CB sales are more important.
Short-sellers try and profit from a drop in price. That is what Barrick and other hedgers were looking to do, the difference is they are COMMERCIAL HEDGERS who produce (go long) the metal. So they have a built-in "hedge" against shorting in that they can deliver the underlying product (gold).
The fear is that if you short....your losses are UNLIMITED. If you go long gold, your losses are capped at the price you paid (if it goes to zero).
So Barrick and other hedgers are "short-sellers" but they are hedged short sellers. They are called commercial hedgers by the CFTC and other reporting services. A hedge fund selling short is a speculator...they don't produce gold.....if it goes up, they have to buy back and cover their losses.
Barrick only made like $150-$175 MM a year as I recall.....$2 BB over a decade-plus....this was NOT a huge source of revenue for them.
.
I never made any statements about which was larger or more important.
As a significant fringe player, Barrick WAS able to affect the gold price, despite what you claim.
.
Thank you GF
I get the fundamental difference in the business model between commercial hedgers and short selling speculators.
My only problem was the fact that producers/commercial hedgers, after having sold their future production, are in the same position of short selling hedge funds, until they have produced what they have previously sold.
So in the meawhile - while they produce what they have previously sold - producers/commercial hedgers and short selling hedge funds are in the same position, so to speak.
Anyway, I think we have successfully highjacked the original subject of this thread
AFFECT the gold price, at the margin, minisculely ? Maybe.
Set the price ? Drive it down ? Move it down alot ?
Absolute rubbish.
Presumably, they are constantly producing gold so they are always in a position to deliver the product. It's not like they only get the mined gold once or twice a year. So it works out for them. Again, they probably cover their shorts most of the time by closing out the short position NOT by delivering the metal. Ditto oil hedgers.
Yeah, they are. Just that the producers/commercial hedgers have 2 ways to close their short positions, speculators have only 1 way to do it.
Is this PEAK gold or PEEK at gold ?
.
In 1980, two wealthy brothers drove the price of silver from $4 to $50.
.
Good point DC!
The Koch brothers, sentenced for having manipulated the comex and indirectly the international price.
(I'm not sure about the "from $4 to $50" part, but that's not the point)
Unless the findings justifying that sentence were false - I think there is a general agreement that the Koch brothers did influence the silver price, the disagreement concerning the question about the illegality of their deeds - that story shows how easy it is to move the worldwide market price of a commodity (probably because of the fact that the price is set at the margin).
It would be interesting to know how many short contracts the Koch's scheme involved, and compare that figure e.g. with how many short contracts Barrick sold.
Just to have a rough idea about whether - based on the sheer quantity of metal sold on the comex - Barrick could have influenced the gold market (which would neither be proof of them intending to influence the gold price nor of them collaborating with the Central Banks etc.)
Hunt Brothers
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Three brothers.
My US Mint Commemorative Medal Set
No, the price was already at $15 when they made their move in late-1979.
And markets were much smaller and illiquid back then, both silver and gold.
No, only Nelson and Herbert. Lamar was busy trying to replace Hank Stram for his NFL Chiefs team.
Ok then $15 to $50.
That is still a lot from small-time siblings.
Barrick could have easily done similar (in the other direction) if they had wanted to go that far.
PS:
The silver price started 1978 at about $4.90 and ended 1978 at about $6.20 .
The silver price started 1979 at about $6.20 and ended 1979 at about $25.00 .
But note that as late as August 1979 silver had still never gone above $10 .
That is likely when the Hunt Brothers really came in, starting at about $10, not $15.
But they could have started buying silver a couple years earlier - no data on that.
The silver price moved when the futures prices lifted off in early-1980. I remember...I had to write a report on it for my social studies class in high school !!
Can you not see the 1979 chart I posted ?
That sure looks like a "lift-off" in September 1979, and again in December 1979.
He may not have been directly involved in the beginning, but surely was aware of it and still got dragged into some of the the aftermath.
In August 1988, a federal grand jury ordered Nelson Bunker Hunt, William Herbert Hunt and a third brother, Lamar Hunt, to pay more than $130 million in damages for conspiring to corner the world’s silver market and for ruining the investments of Minpeco, a mineral marketing company of the Peruvian government.
My US Mint Commemorative Medal Set
Those were the days.
Too bad they couldn't pump the price of the gutter up today. I mean arguably it's sitting at $22 and realistically probably worth somewhere in the neighborhood of $12 but a nice temporary manipulation back to $50 sure would be nice.
Sorry for talking about gutter in a thread about the metal of kings. Didn't want to divert but looks like it already was. THKS!
The whole worlds off its rocker, buy Gold™.
I think talking about peak commodity x makes sense only assuming a certain x's value,
because increasing x's value normally --> increasing exploring/development/production of x.
Koch Brothers... Hunt Brothers... tomayto... tomahto...
I didn’t write a paper on it in my social studies class, but I was making quite a bit of money in gold & silver forward contracts (on margin) in both 1979 and 1980, until my broker had me get out at around $650.
I made more one day in 1979 than my annual salary that year. It will probably happen one more time before I’m gone - in the not-too-distant future unless gov.com tries to pull a fast one.
I knew it would happen.
I can see some short-sellers or gold leasers who always make $$$ and get complacent getting caught by a short-term spike in gold and the metal then moving like $500 in a week.
Just don't ask me when.....
What was your strategy?
Did you have some general trading rules?
I’d suggest that buyers of gold need to be part of the equation including manufacturers, processors, governments and more buy gold futures to take delivery.
As their demands lessen, gold price weakens in dollar terms.
What was your strategy?
Did you have some general trading rules?
My strategy at the time was that because of rising inflation, I wanted to own bullion - and I was young & bold. I had already bought a couple bags of Morgan Dollars from Nunemakers - which was kinda cool at the time.😎
One evening in 1978 or 1979 - I forget exactly when - I was contacted by a Terry Ziegler with International Precious Metals Corp. out of Fort Lauderdale, and he convinced me to get into some gold & silver margin contracts. I rode them out and when I cashed out, I took delivery of 2 rolls of British Sovereigns as trophies, paid for most of my ex-wife's law school at Wash U. and bought an A-frame in a wooded resort outside of St. Louis.
My trading rule was that I followed Terry's advice when he called me and suggested that I get out. I subsequently made a mistake in buying another silver contract from him in March of 1980 and promptly lost about $1,000 before calling it quits in a hurry.😉
Unless you count some 100 oz. Sunshine bars in the late 1980's, I didn't get back into silver again until 1998 & 1999. I started back into gold in 1987 with some of the newly-issued AGEs, and platinum in 1996 with some Platinum Maples.
My longterm strategy has been steady accumulation, averaging in when I had enough cash to make a decent buy. The only influence price levels have had on my strategy was that when prices were higher I had to wait a little longer before saving enough cash to make another purchase.
The larger the purchase, the more thought has to go into selecting the type of bullion you buy. There's always a feeling of diving off the high diving board right before pulling the trigger, so you have to make sure that it makes sense at the time.
I still don't see anything wrong with that approach.
Given the current state of the world, I don't see any better places to be than in physical precious metals, and maybe some cash.
I’ve participated in two precious metals bull market cycles. You never really know what to expect, but I do sleep soundly having physical metals - more so than I ever did in playing the stock market.
I knew it would happen.
The Hunt's were in silver long before it spiked. They added the biggest $$$ as it lifted off, did lots of buying in the $20's.
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In your previous post, you claimed that the Hunt Brothers didn't get into the market until after it reached $15 in 1980.
But now you claim that they were active in the silver market long before that ?
Their activity likely started lifting the silver price starting in 1972.
As I stated previously, this one moderately-large fringe player was able to move the market price significantly.
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There is a lot more money floating around now than in 1980 and many, many more "moderately large fringe players" so why haven't they moved the price since? Silver is such a relatively tiny market. Do they not care to make vast fortunes?
Knowledge is the enemy of fear
I said the Hunt's got REALLY involved once the price got to about $15 or so. I'm giving an approximate range when their names started to show up in the press. I'm going by The NY Times which I used at that time.
They owned silver for YEARS before it lifted off. And gold.
They put Big $$$ into it as it ROSE instead of selling......they bought more and more futures contracts driving the price up.
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How do you know they haven't (2003-2011, for example) ?
As the Hunts learned, they can change the rules if the “wrong people” are winning.
I knew it would happen.
That is true, they did change the rules in the middle of the game. Wasn't right but nobody was going to feel sorry for billionaires who cornered 1/3rd of the silver market.
What people should feel sorry for is the rule of law.
I knew it would happen.
You mean with the COMEX margin requirements ? If you are trying to corner the market, you had to think there might be a roadblock.
I agree the Hunts were sideswiped, but to be perfectly honest, they were asking for it. And I say this as someone who likes the family.
The rule of law means that if there is someone taking unfair advantage of the current legal structure, you put it to a referendum vote and change the law.
You don’t retroactively screw certain people by decree while exempting special interests, which is pretty much how it’s being done now, and that’s exactly what happened to the Hunts.
I knew it would happen.
No, it was stated in the arbitration agreement they signed that the rules of the exchange can be changed AT ANY TIME. Did you ever seee "Trading Place" at the end where the managing director says that "all accounts to be settled at the end of the day -- no exceptions." Same thing.
BTW, the Hunt Brothers did great damage to the silver and gold markets and scared off a generation of potential investors.
No "special interests" were protected, unless you think millions of jewelry dealers around the world conspired together.
The losses would have been HIGHER had the Hunt's been allowed to continue. What you are saying is akin to letting a bank run 30 or 40-to-1 leverage.
The arbitration agreement was retroactive, illustrating my point that the exchange was allowed to go around the law in order to screw the Hunts.
Allowing the exchange to change the rules in order to screw one group of traders retroactively is what damaged the markets, not the fact that the Hunts were amassing a large leveraged position.
If the Hunts were wrong, the markets would have eventually punished them without the cftc’s or Fed’s illegal interference in the markets.
Speaking of banks, why are they allowed to create money by making loans while having zero reserve? That’s a bunch more than 40 to 1 leverage, and it’s type of mismanagement that has caused the debt problem in the first place. Banking needs to be fundamentally restructured and the Fed needs to be dismantled.
I knew it would happen.
That was less sophisticated than I thought
Thanks for sharing jm
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They didn't change the rules to screw the Hunt's....they changed the rules to restore market competitiveness. What the Hunt's were doing was ILLEGAL and in violation of numerous laws, including the Sherman Anti-Trust Act.
The Hunt's also used HIDDEN accounts and never DISCLOSED their ownership of Bache Securities which was both trading gold and a custodian for the Hunt's. Blatant conflict-of-interest. You guys rail against the banks, and here was a bank CLEARLY trying to stoke bullish positions to help their largest shareholder.
The Fed did nothing. The Hunt's engaged in illegal acitivity and committed fraud, too. I like the Hunt's and hate changing the rules of the game while it's being played, but they broke the law SEVERAL times.
So now you're in favor of manipulated markets, deception, fraud, lying, and misreporting of positions -- as long as it pushes prices UP and not DOWN ??
They aren't. You are just regurgitating nonsense from anti-banking morons looking to get click-bait. Take a look at a bank balance sheet some time -- it might open your eyes.
From November 27:
https://www.federalreserve.gov/newsevents/pressreleases/bcreg20231127a.htm
Banks do have cash reserves but their cash management is not tied to deposits.
Yelling at clouds on pmbug.com
The Federal Reserve Board on Monday announced technical details related to reserve requirements for depository institutions, which will remain zero. The annual adjustment and publication of the reserve requirement exemption amount and low reserve tranche is required by law and does not indicate a change in depository institutions' reserve requirements.
No reserve requirement except for exceptions. Money out of thin air.
I knew it would happen.
I wonder how many of the regulators at CFTC had puts in the silver market when they prohibited buy orders and only allowed sell orders to take place.
Market Manipulation at its face. Illegal.
I knew it would happen.
Keep reading....
"...For 2024, the reserve requirement exemption amount will be set at $36.1 million, unchanged from 2023, and the low reserve tranche will be set at $644.0 million, down from $691.7 million in 2023."
This is irrelevant to 99% of banks.
The banks hold tons of various regulatory capital. Your problem is you think banking can be eliminated from a modern economy.
Not necessary. The Fed issued that press release because they were required to report on reserve requirement exemptions. And they did set some exemptions. And those exemptions are immaterial as they explained. The exemptions would only be meaningful if they actually had a reserve requirement greater than zero, which they do not.
I posted the citation to show you that we do live in an age of zero reserve banking. The Federal Reserve itself is telling you this. Here's another (older) announcement from the Fed:
https://www.federalreserve.gov/monetarypolicy/reservereq.htm
Yelling at clouds on pmbug.com
Wait for it. . . Central Bank Digital Currencies (when implemented) will eventually eliminate banks (as we know them) from a modern economy.
As for banks being required to hold protective reserves, the FED has historically shown it will bailout not just US banks, but also those outside the US.
Bank failures? One would be justified to assume that the big boys are working behind the scenes to eliminate the little boys. The banking industry is no different when it comes to market share.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
https://www.msn.com/en-us/money/other/it-was-a-tough-year-for-almost-every-bank-not-named-jpmorgan/ar-AA1m7qkL
We're watching the banking version of The Quickening. "There can be only one!"
Yelling at clouds on pmbug.com
You are just regurgitating nonsense from anti-banking morons looking to get click-bait.
Apparently not.
I knew it would happen.
Rectroactivity contradicts fundamentally the rule of law.
There is no rule of law where futures decisions can change what is legal today.
The Hunts went so far to ask the authorities if they were allowed to take delivery, getting the go ahead.
Later the authorities changed their opinion.
As you say, this arbitrariness destroyed the confidence in the markets, in particular in the US authorities overseeing the price wise most important silver market worldwide, the Comex.
My US Mint Commemorative Medal Set