Silver price about to plummet

[HawkHybrid]

2 minutes ago, Michal said:

Paper silver might go to 10 cents per oz, so what if you wont be able to buy physical silver ? Paper is worth as much as paint on it, if nobody is willing to deliver goods which paper represents. 

 

it doesn't work like that, the paper silver market

is an extension of the physical silver market.

 

HH

[Michal]

1 minute ago, HawkHybrid said:

 

it doesn't work like that, the paper silver market

is an extension of the physical silver market.

 

HH

Is it? They can settle contract in cash (even if you demand delivery), no need to deliver. Pure physical extension indeed.  

[HawkHybrid]

13 minutes ago, Michal said:

Is it? They can settle contract in cash (even if you demand delivery), no need to deliver. Pure physical extension indeed.  

 

read the contract. where does it say it allows you to

choose to get physical delivery?

 

it's like paying for bullion mixed dates and getting

annoyed that you are not allowed to choose the

dates yourself?

 

HH

[Michal]

5 minutes ago, HawkHybrid said:

 

read the contract. where does it say it allows you to

choose to get physical delivery?

 

it's like paying for bullion mixed dates and getting

annoyed that you are not allowed to choose the

dates yourself?

 

HH

Pure physical extension indeed...

[HawkHybrid]

the purpose of paper contracts is to help with

price discovery. it was never intended to deliver

physical metal.

 

the fact is that those who want physical metal

are free to buy physical metal, all half a billion

toz per year extra if they really want it.

(silver is great, everyone says it's 'worth' so much

more yet no one is willing to pay for it.)

those who want papers contracts choose

accordingly.

 

fti silver being abundant in 1980 and 2011 did not

stop it's prices going through the roof.

 

people need to decide if:

1. the facts are misleading them, or

2. those with a vested interest in selling them more

physical silver are intentionally misleading them.

 

HH

 

[Oldun]

This mini chat is getting weird. Bottom line, you can take delivery if they allow it. If they don’t allow it or can’t produce the goods, they have the option to pay you in cash and there isn’t a damned thing anyone can do about it.

[HawkHybrid]

2 minutes ago, Oldun said:

or can’t produce the goods

 

this is a non issue that is highlighted by many

physical silver pumpers. whether or not they

have the physical silver is not important.

they can always choose to pay in cash. it is

their choice by contract not yours.

there is absolutely nothing to stop you from

buying physical silver with settlement in cash.

people don't do this because they choose not to

do this. not because it's not an option.

 

you pay for mutton, you get served mutton and

then wonder why you don't have the option of

choosing lamb?

 

think about it this way, who is more likely to mislead

you?

1. silver pumpers with a vested interest.

2. the whole world of searchable facts, contracts etc.

 

is this a case of the whole world must be wrong

because I am right?

 

(they won't allow you to take delivery because it

costs them time and effort to set up delivery.

it's simply easier to settle in cash and if you must

have physical you can use that cash to source it

locally. price discovery of silver is done globally.

they don't want to deal with people's local issues

of shipping and taxes. it's set up to be a global market.

it does makes sense if you think about it.)

 

HH

[Oldun]

Dont be a pillbox. If someone has bought something from someone, anyone or anything and they aint got it, of course they have to return the amount legally agreed.

 

I am not a silver pumper and I resent you trying to paint me as such. Bad darts.

[Oldun]

4 minutes ago, HawkHybrid said:

 

this is a non issue that is highlighted by many

physical silver pumpers. whether or not they

have the physical silver is not important.

they can always choose to pay in cash. it is

their choice by contract not yours.

there is absolutely nothing to stop you from

buying physical silver with settlement in cash.

people don't do this because they choose not to

do this. not because it's not an option.

 

you pay for mutton, you get served mutton and

then wonder why you don't have the option of

choosing lamb?

 

think about it this way, who is more likely to mislead

you?

1. silver pumpers with a vested interest.

2. the whole world of searchable facts, contracts etc.

 

is this a case of the whole world must be wrong

because I am right?

 

(they won't allow you to take delivery because it

costs them time and effort to set up delivery.

it's simply easier to settle in cash and if you must

have physical you can use that cash to source it

locally. price discovery of silver is done globally.

they don't want to deal with people's local issues

of shipping and taxes. it's set up to be a global market.

it does makes sense if you think about it.)

 

HH

They DO allow you to take delivery, if it suits them at any given time. If it doesn’t, theywont.

[HawkHybrid]

3 minutes ago, Oldun said:

Dont be a pillbox. If someone has bought something from someone, anyone or anything and they aint got it, of course they have to return the amount legally agreed.

 

what did yo pay for?

they got what they paid for which is a contract

to be settled in cash.

the fact that they did not get what they thought

they were getting is not a fault of the supplier.

the supplier did not intentional mislead them.

 

HH

[Oldun]

Please stop. You are buying a contract they allows the buyer to take delivery but it also clearly states in the contract that they can settle in cash if they want to. You can add sauce and tricks to that anyway you wish but those are the facts.

[HawkHybrid]

7 minutes ago, Oldun said:

They DO allow you to take delivery, if it suits them. Read thecontract.

 

not just anybody. only those that suits them.

if you want to take delivery from half way

around then they couldn't care less.

the key is only when it suits them. ie they get

to make the choice, not you.

 

HH

[Oldun]

Durrrrr that is what I have just said. You are arguing to agree.

[HawkHybrid]

8 minutes ago, Oldun said:

Please stop. You are buying a contract they allows the buyer to take delivery but it also clearly states in the contract that they can settle in cash if they want to. You can add sauce and tricks to that anyway you wish but those are the facts.

 

that would be a vaulted physical silver contract,

where you get to choose to take delivery or not.

they are not the same contracts. those who are

so obsessed with taking delivery can choose to

buy a vaulted physical silver contract.

 

just because physical silver pumpers choose to

mislead people by not distinguishing between the

two different contracts, it doesn't make the

contracts the same.

 

HH

[Platinum]

There are many different contracts in the silver market. Some allows for delivery, others don’t. Some gives the buyer the right to choose what to settle in and others the seller.

What can be said about the paper market however is that it is highly liquid if there is trust in it, yet it is not worth a dime if people get spooked into only wanting physical delivery.

This is where the crux of this discussion comes in. Paper contracts are not as good as gold (ie the physical delivery) should the trust in the paper market fade away. Yet a lot of buyers of the contracts might be unaware of- or have misinterpreted the terms - of the contracts, believing the have a claim on the physical metal and that they have the option to choose that, when in the contract it strictly says something else to what they think.

[HawkHybrid]

48 minutes ago, Platinum said:

Yet a lot of buyers of the contracts might be unaware of- or have misinterpreted the terms - of the contracts, believing the have a claim on the physical metal

 

many of those who actually deal in the contracts

should/probably know where they stand on physical

delivery. it's mostly the silver stackers that believe

they are unaware.

as the story goes, someone mistakened a comex

contract for a buyers choice physical delivery contract.

when it came to settling the contract, demanded that

cash was not acceptable as physical metal was

required. kicked up a fuss on how 'right' they were.

silver pumpers quickly seized the chance to being

'proof' that comex did not have the physical silver

required settle their contracts.

 

if you listen to david morgan he will tell you that it is

demand that is the driving force for the silver market

and not supply. we are not dealing with r5 specialist

coins here. silver in 15 times as abundant as gold in

ground and we've been mining it for millenia.

 

HH

[sovereignsteve]

12 hours ago, HawkHybrid said:

 

it doesn't work like that, the paper silver market

is an extension of the physical silver market.

 

HH

No, it's related to the physical market. To be an extension the number of contracts would have to be 1:1 with the amount of physical, otherwise it's just leverage.

you said previously the paper markets were devised to aid price discovery of physical. I don't know if that was the expected or simply the cover story but it clearly can't do the job. To do this it would have to have zero leverage instead of the massive ratios of paper:physical you see quoted. 

For price discovery you need a balance of buyers to sellers based on supply and demand. If the number of paper contracts is in theory infinite, there can never be a shortage of supply ergo price discovery can't work.

[HawkHybrid]

34 minutes ago, sovereignsteve said:

No, it's related to the physical market. To be an extension the number of contracts would have to be 1:1 with the amount of physical, otherwise it's just leverage.

you said previously the paper markets were devised to aid price discovery of physical. I don't know if that was the expected or simply the cover story but it clearly can't do the job. To do this it would have to have zero leverage instead of the massive ratios of paper:physical you see quoted. 

For price discovery you need a balance of buyers to sellers based on supply and demand. If the number of paper contracts is in theory infinite, there can never be a shortage of supply ergo price discovery can't work.

 

that is how it works. supply and demand.

demand can be infinite so why must supply be

fixed? (this solves the problem of a monopoly

which does not aid price discovery)

every contract has a counter. don't look at it as

there is not enough physical silver to pay out

on this contract. it pays out in cash which can

be used to acquire physical silver if you so wish.

this is the key bit, people who have their contracts

settled in cash then choose not to convert that

cash all into physical silver. ie they never wanted it

all into physical silver. these buyers were never

interested in holding physical silver. they are not

part of the physical silver demand, they just want

a profit in currency. should these non physical

silver demand be allowed to skew the results?

 

there is no leverage. each silver ounce in each

contract moves 1:1 with the spot price. having

a lot of silver ounces don't make it leveraged.

it just means that you have a larger stake at

hand.

 

the fact is many markets(maybe every single

one) has a paper futures element to help with

price discovery. how is it only a problem for

silver? what about gold, coffee, oil or shares?

 

the truth is it's not a problem for any of those

markets. it's only claimed to be a problem to

help with the silver suppression bias. silver

pumpers are making it up as they go along.

 

it's along the lines of 'I lost therefore they

cheated' mentality.

 

HH

[sovereignsteve]

14 minutes ago, HawkHybrid said:

that is how it works. supply and demand.

demand can be infinite so why must supply be

fixed?

i'm actually surprised you don't understand how supply/demand and price discovery works. The supply of everything is fixed, but it may increase with increased production but this takes time.

If demand is infinite and supply fixed, the price will rise to a level where demand reduces. If the demand is poor, the price will fall. This is price discovery.

If you break the connection between demand and supply ie the actual amount of physical, this breaks down.

If the production of paper contracts can be varied to suit the whim of the brokers, with no regard to the actual amount of physical, then the price is being manipulated not discovered.

If there is a surge in buying paper, more can be issued to increase "supply", therefore the price need not rise. If there is a surge in selling paper, the price can be left to drift downwards.

In your example "demand can be infinite so why must supply be fixed?" you are suggesting that supply must be increased to satisfy demand. If this is done by issuing more paper, the demand will be satisfied without the price increasing. This is artificial price suppression.

[HawkHybrid]

5 minutes ago, sovereignsteve said:

If you break the connection between demand and supply ie the actual amount of physical, this breaks down.

 

this is not true. if you remove the presence of a monopoly

then only those who truly wants the physical can bid for it

in their own markets. current supply is fixed but future

supply is not. our collective choices determine how many

new mines will be created.

the paper contracts are to negate the effects of those who

try to create a monopoly in the market. these people have

no use/interest in the underlying asset. they want to cripple

the flow of the market for their own personal gains.

 

price discovery is when those who want physical negotiate

with those who supply physical until both parties can agree

on a price. those who are only interested in paper contracts

can do so. you need to remember there is a paper contracts

buyer for every paper contracts seller. and no, the paper

contracts buyer doe not actually want physical ie taking

away from the physical market, (as often suggested by

silver pumpers).

 

funny how it only breaks down for silver and not any of

the other commodities including coffee, oil etc?

of course silver is special because metals pumpers say

it's so?

 

does this price discovery work? so far, I don't see any problems

with the flow of physical from those who supply it to those

who demand it, at prices that both agree on. looks like it's

working to me?

 

as many have stated before paper contracts cannot be used to

satisfy physical demand. does it matter how many paper

contracts are traded?

 

HH

[Platinum]

1 hour ago, HawkHybrid said:

many of those who actually deal in the contracts should/probably know where they stand on physical delivery. it's mostly the silver stackers that believe they are unaware.

if you listen to david morgan he will tell you that it is demand that is the driving force for the silver market

People can not even grasp major fundamentals, eg to differentiate money from currency and currency from EBCs (Electronic Bank Claims), so pardon me if I don’t believe that even ”many” understands what they are doing and what risks and legal mumbo jumbo is involved in the respective markets.

As for David Morgan (who I personally believe is good to listen to for his expertise), his view is only one of many.

[HawkHybrid]

1 minute ago, Platinum said:

People can not even grasp major fundamentals, eg to differentiate money from currency and currency from EBCs (Electronic Bank Claims), so pardon me if I don’t believe that even ”many” understands what they are doing and what risks and legal mumbo jumbo is involved in the respective markets.

 

those who trade in these contracts will know how

the operate. either that or will learn very fast.

that single idiot who stupidly failed to read the very

contract that they were signing is not representative

of the people buying many of these contracts.

 

(you only need to read the bit that tells you how the

contract will be settled, kind of useful to know I would

of thought)

 

HH

[Airhead]

1 hour ago, sovereignsteve said:

No, it's related to the physical market. To be an extension the number of contracts would have to be 1:1 with the amount of physical, otherwise it's just leverage.

you said previously the paper markets were devised to aid price discovery of physical. I don't know if that was the expected or simply the cover story but it clearly can't do the job. To do this it would have to have zero leverage instead of the massive ratios of paper:physical you see quoted. 

For price discovery you need a balance of buyers to sellers based on supply and demand. If the number of paper contracts is in theory infinite, there can never be a shortage of supply ergo price discovery can't work.

I think the leverage ratio is roughly 100 to 1 in both Silver and Gold.

[HawkHybrid]

7 minutes ago, Airhead said:

I think the leverage ratio is roughly 100 to 1 in both Silver and Gold.

 

it's not a leveraged ratio, each contract contains

many toz of silver, each toz is unleveraged at 1:1

against the spot price.

it's only leveraged if it moves bigger in price per

unit than the underlying asset. having more of them

doesn't make it leveraged.

 

HH

[Airhead]

3 minutes ago, HawkHybrid said:

 

it's not a leveraged ratio, each contract contains

many toz of silver each toz is unleveraged at 1:1

against the spot price.

 

HH

But many of the precious metal funds do operate on a fractional basis, contract pricing to the spot price and not having the physical just allows devious financial minds to game the system. IMHO is a bit immoral.