Cornering the Silver Market?
ksammut
Posts: 1,071 ✭✭✭
I really enjoy reading the posts on the PM Forum and I would like to put forward a couple of questions.
What would it take to corner the silver market? $10 or $20 billion? Supply is low and the market is so thinly traded. I also suspect that the COMEX only has a limited supply of silver should investors demand delivery.
One of the main reasons the Hunt Brothers failed was because they were highly leveraged and could not meet the margin calls. It seems investors and not just US investors could take advantage of the relative scarcity of silver and force all the paper shorts to cover.
My second question; what would happen if enough large investors either collectively or independently forced massive short covering? Would the major short holders (banks) go under and would our government allow that to happen?
The government changed the rules on the Hunts but I think it would be harder to change the rules if a foreign group of investors or country (think China or some Middle Eastern Country(s) wanted to do harm to the US or were simply motivated by the potential of a huge payday or the power it would create by owning a good percentage of a key metal.
What would it take to corner the silver market? $10 or $20 billion? Supply is low and the market is so thinly traded. I also suspect that the COMEX only has a limited supply of silver should investors demand delivery.
One of the main reasons the Hunt Brothers failed was because they were highly leveraged and could not meet the margin calls. It seems investors and not just US investors could take advantage of the relative scarcity of silver and force all the paper shorts to cover.
My second question; what would happen if enough large investors either collectively or independently forced massive short covering? Would the major short holders (banks) go under and would our government allow that to happen?
The government changed the rules on the Hunts but I think it would be harder to change the rules if a foreign group of investors or country (think China or some Middle Eastern Country(s) wanted to do harm to the US or were simply motivated by the potential of a huge payday or the power it would create by owning a good percentage of a key metal.
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price manipulation can occur with less
DeBoers have cornered the diamond market
OPEC has manipulated the oil market
Cargill has manipulated the corn market (controlling 120% in 1946)
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