How did Silver manage to set new records ....
Boom
Posts: 10,165 ✭
only to fall to record lows?
Anyone care to offer some input here?
I remember reading (years ago) that the US Mint Silver Stockpile had Officially been declared depleted/ exhausted - kapoot ... & that the Mint would have to purchase silver form other entities.
Finally, this past year, silver went right through the proverbial roof, yet today it's dirt cheap.
What IS the deal with Silver? (and Gold)??
Thoughts, opinions ... insight?
Anyone care to offer some input here?
I remember reading (years ago) that the US Mint Silver Stockpile had Officially been declared depleted/ exhausted - kapoot ... & that the Mint would have to purchase silver form other entities.
Finally, this past year, silver went right through the proverbial roof, yet today it's dirt cheap.
What IS the deal with Silver? (and Gold)??
Thoughts, opinions ... insight?
0
Comments
in the early 80s.
it had nothing to do with fundementals.
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"In 1973, the Hunt family of Texas, possibly the richest family in America at the time, decided to buy precious metals as a hedge against inflation. Gold could not be held by private citizens at that time, so the Hunts began to buy silver in enormous quantity.
In 1979 the sons of patriarch H.L. Hunt, Nelson Bunker and William Herbert, together with some wealthy Arabs, formed a silver pool. In a short period of time they had amassed more than 200 million ounces of silver, equivalent to half the world's deliverable supply.
When the Hunt's had begun accumulating silver back in 1973 the price was in the $1.95 / ounce range. Early in '79, the price was about $5. Late '79 / early '80 the price was in the $50's, peaking at $54.
Once the silver market was cornered, outsiders joined the chase but a combination of changed trading rules on the New York Metals Market (COMEX) and the intervention of the Federal Reserve put an end to the game. The price began to slide, culminating in a 50% one-day decline on March 27, 1980 as the price plummeted from $21.62 to $10.80."
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so this open manipulation which people recall back to, to show us the
potential for what silver could do is truly a joke beyond description.
It was tried again.. to speculate it past 20+ bucks an ounce and failed
miserably and its price is now 50% of that. Due to the financial crisis
the culprits could not hang on and had to dump the metal.
gold on the other hand, did not take a drastic fall because it is a premium
hedge against troubled times while silver is now considered a minor
hedge... and more like a commodity compared to the king gold.
Only to see record declines in a very short time... Short answer is GREED......
Like china and copper, like china and nickel silver should have forced, I mean the sec should have forced the paper shorts to buy back there positions.
although the big shorts were actively collecting the real silver to show they could back up there positions.
IE when you see them in your town advertising we buy gold and silver 4 days only...
but thats just part of it in my opinion..
The SEC is the ones to blame for the low prices today...
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
in the early 80s. it had nothing to do with fundementals
Now this is the pot calling the kettle black. We've heard nothing but how manipulation of gold and silver down over the past 7 years is nothing but a pipe dream. Now we learn that the tremendous stagflation of the 1970's, Johnson's new society spending in the late 1960's, exiting the gold standard in 1971, etc. were not "fundamentals," but merely manipulation that bumped the price of silver from $1 to $50. I guess we were all part of that "manipulation" as we saw solid gem rare coins increase in value 10X-15X from 1975 to 1980, and of course gold increase some 15-25X depending if you want to go to the peak or just an solid average value. Yet gold was not manipulated up...but silver was! Another example of revisionist history. No fundamentals here folks, now move along........
roadrunner
<< <i>it was openly manipulated up to 50 an ounce by the hunt brothers
in the early 80s. it had nothing to do with fundementals
Now this is the pot calling the kettle black. We've heard nothing but how manipulation of gold and silver down over the past 7 years is nothing but a pipe dream. Now we learn that the tremendous stagflation of the 1970's, Johnson's new society spending in the late 1960's, exiting the gold standard in 1971, etc. were not "fundamentals," but merely manipulation that bumped the price of silver from $1 to $50. I guess we were all part of that "manipulation" as we saw solid gem rare coins increase in value 10X-15X from 1975 to 1980, and of course gold increase some 15-25X depending if you want to go to the peak or just an solid average value. Yet gold was not manipulated up...but silver was! Another example of revisionist history. No fundamentals here folks, now move along........
roadrunner >>
i was waiting for that. this is manipulation that can be proved.
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NEW YORK The flamboyant Hunt brothers of Texas, whose combined riches once totaled an estimated $6 billion, were found guilty in federal court Saturday of attempting to illegally corner the silver market in 1979-80 and were ordered to pay more than $130 million in damages.
Their failure to corner the market started a spiral that is believed to have reduced their fortune to $1 billion and resulted in bankruptcy of some of their companies.
The civil jury ordered Nelson Bunker Hunt, William Herbert Hunt and Lamar Hunt to pay more than $130 million in damages to the Peruvian government's mineral marketing company, Minpeco S.A., which said in the civil suit that it was ruined by the ...
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big difference. As soon as the govt changed the rules silver fell on its
face flat showing the fundamentals for that price simply did not exist.
the manipulation that you commonly speak of is always down. always down. THE MAN sticking it to the little guy. Lets face it.. the only
reason it hit 20 was speculation this year that had its bubble burst
in a dramatic fashion.
And the whole time frame you speak of silver was like 2-5 an ounce.
Only when the Hunt brothers plan came to fruition did the price spike. Late 79 I clearly showed above it was a measily 5 bucks.
but as always folks, do your own research. silver is 10ish an ounce
right now. you decide where it will go!
also please note he mentioned GEM coins which crashed spectacularly in the 80s. Gold crashed to lows that ran for a decade.
if there was fundamentals it was for a short while that most people
failed to capitalize on.
Also lets not confuse speculation with manipulation. Those are two
very different things. yes they might go hand in hand but they differ.
snooze zzzzz
One could lay the blame of such speculation at the feet of the FED since the constant expansion and then contraction of the money supply leads to such problems. Toss in the current fundamental push for "economy by politics" (ie bailout 'em out or let 'em fall), and it leaves the ships floundering without any rudders.
PS. The Hunts were merely playing the market by its rules. And it's rules were that major commericials had a monopoly...or so they thought. When big corporations play by those same rules to their advantage it's called capitalism. When BSC, Merrill, WaMu, and others got caught in far worse shenanigans they were allowed to survive. No one yet has been proven guilty in court and possibly never will. Yet these crimes should require a life sentence. The govt changed the rules on the Hunts and called them guilty. It hardly proves anything other than don't beat the FEDs/cartels at their own game...you may actually win...but in the end you'll lose. If you want the real scoop on the Hunts go talk with Jim Sinclair, he was one of the experts chosen to unwind their positions. Yeah, the same guy who doesn't know anything about the current markets and keeps saying "this is it."
roadrunner
The Hunts were merely playing the market by its rules. And it's rules were that major commericials had a monopoly...or so they thought. When big corporations play by those same rules to their advantage it's called capitalism.
The Hunts were making a rational investment to hedge against rampant inflation of 14% at the time.
They had intentions of taking delivery of physical silver that they already owned. The exchange changed the margin requirement practically overnight. That, and interest rates of 22% had the intended effect of forcing liquidations throughout the commodity complex before the contract expirations, and not just by the Hunts.
The lawsuits against the Hunts were not over market manipulation - they were over asset liquidation as a result of their forced bankruptcy. Nice work by the govt. Yeah, it WAS against the little guy.
This time around, business is hurting with interest rates at almost 0%. The Fed is pumping more money than we've ever imagined, which is quite a feat.
This time, it's different. Well, it is.
I knew it would happen.
jmski, my summary above essentially says the same thing. Many other sources say the exact same thing. But when Buffet took out a similar load in silver there was no hint that he was doing anything "illegal" like the maligned Hunts. The govt came to WB to "show him the light" and offer future prospects of sweet deals if he would succumb to the darkside of currency forces. So away went the Buffet hoard.
roadrunner
jmski, my summary above essentially says the same thing. Many other sources say the exact same thing. But when Buffet took out a similar load in silver there was no hint that he was doing anything "illegal" like the maligned Hunts. The govt came to WB to "show him the light" and offer future prospects of sweet deals if he would succumb to the darkside of currency forces. So away went the Buffet hoard.
roadrunner
You know, next to flippers, revisionists are among my least favorite types.
The Hunts did nothing wrong nor illegal. In fact, they were too successful.
The Fed can't allow that, not when it effects their biggest cash donors on Wall Street. A place the Hunts would have owned in short order.
Just read the book "Beyond Greed", by Stephen Fay. You'll learn ALL the details.
It is simply the bottom line all all things related to that era, period. Full stop!
No need to rely on Wiki biased nonsense.
The book is out of print now, but can be purchased from any number of used book sellers all over the net.
I got mine several years ago in hardcover and it was virtually new for around $5.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
were not there. in 79 silver was 5 whole bucks. manipulation and
speculation drove it to new highs which did not last for long. it promptly
sank back to where it belonged.
this is the era many bugs look back to as the glory days of PMs and
recall endlessly to pump their ideas.
<< <i>well OP. you see my explanation and you see other posters explanation. feel free to research or choose one. the fundamentals
were not there. in 79 silver was 5 whole bucks. manipulation and
speculation drove it to new highs which did not last for long. it promptly
sank back to where it belonged.
this is the era many bugs look back to as the glory days of PMs and
recall endlessly to pump their ideas. >>
READ THE DAMN BOOK!!
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
For one thing, we have a new technology in this market that didn't exist in the 1970's, unlimited otc derivatives to help balance off any PM's bet you'd like. There are a huge number of gold and derivatives bets out there (most owned by JPM) to help "balance" off their side of the bet. These encompass many times the size of the ready available physical market The only problem is that most of the derivatives are probably worthless and therefore cannot be allowed to come to light. Bear Stearns and Merrill probably owned a pile of them.
Buffet's buying did raise the price of the silver market several dollars per ounce which was a considerable amount. Apparently he was coerced to sell in order to support govt monetary policy. No doubt he received some perks or future perks for his good deed. I would assume that the stake in Lehman was one such reward.
roadrunner
Yes, the good old days. When I made more in gold forward contracts one day than my whole years' salary, more than once. When I bought a vacation place in the country and was able to send my (ex)wife to 3 years of law school with the proceeds. Ah yes. Let's "pump some ideas".
Why did I ever do that? Why did I buy bags of 90% silver, rolls of sovereigns, and multiple silver and gold contracts on margin in 1978-1979? Just dumb luck, as some would say. No thought of fundamentals and no thought of economic factors at all. Yes, just dumb luck.
Just like now. According to fc, I would have held silver for 20 years, but I didn't. Instead of holding pms that long, I bought real estate in the '80s, and then Intel and Sprint PCS for nice gains in the 90's - all of which have made my life alot easier today. No judgement involved though - according to fc, any reason for liking gold or silver right now is due to tunnel vision, and not thoughtful and experienced reasoning.
In spite of all the economic indicators that clearly show trouble brewing, we have a know-it-all who re-writes history that he knows nothing about, and insists that holding pms is just a nostagic throwback to an irrelevant past. That's ok, I'll just trust my own "dumb luck" again. No analysis, just dumb luck. eh?
Like I said, if fc wants to ignore what's happening, it's his game, nobody elses'.
I knew it would happen.
<< <i>this is the era many bugs look back to as the glory days of PMs and recall endlessly to pump their ideas
Yes, the good old days. When I made more in gold forward contracts one day than my whole years' salary, more than once. When I bought a vacation place in the country and was able to send my (ex)wife to 3 years of law school with the proceeds. Ah yes. Let's "pump some ideas".
Why did I ever do that? Why did I buy bags of 90% silver, rolls of sovereigns, and multiple silver and gold contracts on margin in 1978-1979? Just dumb luck, as some would say. No thought of fundamentals and no thought of economic factors at all. Yes, just dumb luck.
Just like now. According to fc, I would have held silver for 20 years, but I didn't. Instead of holding pms that long, I bought real estate in the '80s, and then Intel and Sprint PCS for nice gains in the 90's - all of which have made my life alot easier today. No judgement involved though - according to fc, any reason for liking gold or silver right now is due to tunnel vision, and not thoughtful and experienced reasoning.
In spite of all the economic indicators that clearly show trouble brewing, we have a know-it-all who re-writes history that he knows nothing about, and insists that holding pms is just a nostagic throwback to an irrelevant past. That's ok, I'll just trust my own "dumb luck" again. No analysis, just dumb luck. eh?
Like I said, if fc wants to ignore what's happening, it's his game, nobody elses'. >>
But, but, we have this know-it-all who wasn't even alive back then, who doesn't know what happened save for Wikipedia(the new and improved all knowing source for punks who want to brag about knowing it all) and we are blessed by his universal knowlege of all things. We should all just bow down and be thankful for his blessed prescence here. How did we ever get by back in those days without him?
I, too, was putting away silver as much as I could back in '78-'79. I cashed out for more than a couple year's salary at a time when I had a new family and infants to take care of. I didn't hang on then either. I bought real estate and began a new business that started strong and was clicking along at over 250K net 7 years later. Not too shabby for 1987. And yet again, I was dumb enought to sell it for 5 times annual net and use a good amount to buy into some new company started up by a guy I knew over in Austin named Michael Dell, continue raising my children as a single Father and then go back to school and get another engineering degree. By the '90s I was making more in salary than I was running my business and had a lot of extra time left over. How foolish of me!
Had to have been dumb luck, after all, by then fc may have been in the eighth grade or so, thus I was left on my own without his vast guidance. Lord, how did I ever make it to today?
I began studying precious metals again around '99 and started to pour my resources into that and have now for nearly a decade.
I'm contemplating a very early retirement in the next year, a decade before the Fed says I should. Actually, building a ranch, so it will hardly be retirement, but I will be out of the rat race and very happy in the country. Woe is me.......... help us fc, we just can't make it on our own. All I've been able to do is put myself in the top rank in the bullion poll, own a huge home and several high end sports cars. I'm sure I must be doomed. I guess I'll end up living in my truck, or in a van down by the river.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
It bears repeating – the paper shorts have NO DEFENSE against determined longs who are taking possession of the actual metal at an increasing rate. Have you had enough of this phony paper market yet? Are you tired of the cart leading the horse around? Then take the metal away from the warehouses and the Comex will cease being the corrupt den of thieves that it is. Do not forget how the Hunt brothers handled the silver shorts in the late 70’s before the feds stepped in to bail out their pals who were short the metal. The problem the Hunts had was that there were just two of them – an easy target – but in the case of thousands and thousands of investors who take physical delivery of the gold out of the Comex warehouses – what is the claim going to be from the feds? That the Comex market should not be a place where buyers can go and obtain gold? If not, then shut the damn thing down. If so, then buzz off.
roadrunner